As filed with the Securities and Exchange Commission on January 14, 1994
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FEDERATED DEPARTMENT STORES, INC.
Delaware 7 West Seventh Street 31-0513863
(State of Cincinnati, Ohio 45202 (I.R.S. Employer
incorporation) (513) 579-7000 Identification No.)
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
Copies of notices and other communications
should be sent to:
Dennis J. Broderick, Esq. Neil Ganulin, Esq.
Senior Vice President, General Counsel Frost & Jacobs
and Secretary 2500 PNC Center
Federated Department Stores, Inc. 201 East Fifth Street
7 West Seventh Street Cincinnati, Ohio 45202
Cincinnati, Ohio 45202 (513) 651-6800
(513) 579-7000
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to be Offering Price Aggregate Offering Registration
to be Regitstered Registered Per Share (1) Price Fee
<S> <C> <C> <C> <C>
Common Shares,
par value $0.01
per share (2) 800,000 $22.26 $17,808,000 $6,140.74
(1) Computed soley for the purpose of calculating the registration fee, based
upon the average of the high and low prices per share of $22.26 on the New
York Stock Exchange on January 12, 1994, pursuant to Rule 457.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein.
</TABLE>
PART II
Item 3. Incorporation of Documents by Reference
The following documents (or, as applicable, the portions thereof specified
below) are incorporated by reference, as of their respective dates, in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K (the "Form 10-K")
for the fiscal year ended January 30, 1993, filed pursuant to Section 13(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) The Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended May 1, 1993, July 31, 1993 and October 30, 1993 and all
other reports, if any, filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year ended January 30, 1993;
(c) The description of the Common Stock contained under the
captions "Capital Stock--Common Stock--General," "Capital Stock--Common
Stock--Trading Market," and "Capital Stock--Certain Corporate Governance
Matters" in the Company's Registration Statement on Form 10, as amended
(Registration No. 1-10951) (the "Form 10"); and
(d) The Plan's Annual Report on Form 11-K for this fiscal
year ended December 31, 1992 filed pursuant to Section 15(d) of the Exchange
Act.
In addition, all documents subsequently filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all such securities then remaining
unsold shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Copies of the above documents (not including the exhibits to such
documents, unless such exhibits are specifically incorporated by reference in
such documents) and of the Company's 1993 Annual Report may be obtained
upon request without charge from the Secretary of the Company, 7 West
Seventh Street, Cincinnati, Ohio 45202 (telephone number (513) 579-7000).
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Company's Certificate of Incorporation (the "Certificate") provides,
as do the charters of many other publicly held companies, that the personal
liability of directors of the Company to the Company is eliminated to the
maximum extent permitted by Delaware law. The Certificate and the Company's
By-Laws (the "By-Laws") provide for the indemnification of the directors,
officers, employees, and agents of the Company and its subsidiaries to the full
extent that may be permitted by Delaware law from time to time, and the By-
Laws provide for various procedures relating thereto. Certain provisions of the
Certificate protect the Company's directors against personal liability for
monetary damages resulting from breaches of their fiduciary duty of care,
except as set forth below. Under Delaware law, absent these provisions,
directors could be held liable for gross negligence in the performance of their
duty of care, but not for simple negligence. The Certificate absolves directors
of liability for negligence in the performance of their duties, including gross
negligence. However, the Company's directors remain liable for breaches of
their duty of loyalty to the Company and its stockholders, as well as for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law and transactions from which a director derives an
improper personal benefit. The Certificate also does not absolve directors of
liability under section 174 of the Delaware General Corporation Law, which makes
directors personally liable for unlawful dividends or unlawful stock repurchases
or redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees, and other individuals
may be indemnified against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement in connection with specified actions,
suits, or proceedings, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation -- a "derivative
action"), if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the Company and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard of care is applicable in the case of
a derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such an action and Delaware law requires court approval before
there can be any indemnification of expenses where the person seeking
indemnification has been found liable to the Company.
The Certificate provides, among other things, that each person who was or
is made a party to, or is threatened to be made a party to, or is involved in,
any action, suit, or proceeding by reason of the fact that he or she is or was a
director or officer of the Company (or was serving at the request of the Company
as a director, officer, employee, or agent for another entity), will be
indemnified and held harmless by the Company to the full extent authorized by
Delaware law, as in effect on February 4, 1992 (or, to the extent
indemnification is thereafter broadened, as it may be amended), against all
expense, liability, or loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties, and amounts to be paid in settlement) reasonably
incurred by such person in connection therewith. The rights conferred thereby
will be deemed to be contract rights and will include the right to be paid by
the Company for the expenses incurred in defending the proceedings specified
above in advance of their final disposition.
As authorized by the Certificate, the Company has entered into
indemnification agreements with each of its directors and officers. These
indemnification agreements provide for, among other things, (i) the
indemnification by the Company of the indemnitees thereunder to the extent
described above, (ii) the advancement of attorneys' fees and other expenses, and
(iii) the establishment, upon approval by the Company's Board of Directors, of
trusts or other funding mechanisms to fund the Company's indemnification
obligations thereunder.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
4.1 -- Federated Department Stores, Inc. Retirement Income and
Thrift Incentive Plan
4.2* -- Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Form 10)
4.3* -- By-Laws of the Company (incorporated by reference to Exhibit
3.2 to the Form 10)
4.4* -- Rights agreement between the Company and the Rights Agent
thereunder (incorporated by reference to Exhibit 4.3 to the
Form 10)
5 -- Opinion of Counsel regarding the legality of the securities
being registered.
The undersigned Registrant hereby undertakes that it will
submit or has submitted the Federated Department Stores,
Inc. Retirement Income and Thrift Incentive Plan and any
amendment thereto to the Internal Revenue Service ("IRS")
in a timely manner and has made or will make all changes
required by the IRS in order to qualify Plan under Section
401 of the Internal Revenue Code of 1986, amended.
23 -- Consent of KPMG Peat Marwick
24* -- Powers of Attorney (incorporated by reference to Exhibit 24
to Form S-8, Registration Statement, Registration No.
033-50831).
* Previously filed.
Item 9. Undertakings.
(A) The Company and the Plan hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "Securities Act"), unless the information required to be included
in such post-effective amendment is contained in periodic reports filed by the
Company or the Plan pursuant to Section 13 or Section 15(d) of the Exchange Act
and incorporated herein by reference; (ii) to reflect in the prospectus any
facts or events arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
this Registration Statement unless the information required to be included in
such post-effective amendment is contained in periodic reports filed by the
Company or the Plan pursuant to Section 13 or Section 15(d) of the Exchange Act
and incorporated herein by reference; and (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 Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(B) The Company and the Plan hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
or the Plan's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and each filing of an employee benefit plan's annual report
pursuant to 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.
(C) 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 foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Cincinnati, State of Ohio on January 13, 1994.
FEDERATED DEPARTMENT STORES, INC.
By: \s\ Dennis J. Broderick
Dennis J. Broderick
Senior Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated on January 13, 1994.
Signature Title
* Chairman of the Board and Chief
Allen I. Questrom Executive Officer (principal
executive officer) and Director
* Vice Chairman and Chief
Ronald W. Tysoe Financial Officer (principal financial
officer) and Director
* Senior Vice President and Controller
John E. Brown (principal accounting officer)
* Director
Robert A. Charpie
* Director
Lyle Everingham
* Director
Meyer Feldberg
* Director
George V. Grune
* Director
Reginald H. Jones
* Director
John K. McKinley
* Director
G. William Miller
* Director
Joseph Neubauer
* Director
Karl M. von der Heyden
* Director
James M. Zimmerman
The undersigned, by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the above-
named persons.
\s\ Dennis J. Broderick,
Dennis J. Broderick,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, the Plan has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cincinnati, State of Ohio
on January 13, 1994.
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT
INCENTIVE PLAN
By: \s\ Boris Auerbach
Boris Auerbach
Vice President and Member of Retirement
Committee
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Exhibit Page
4.1 -- Federated Department Stores, Inc. Retirement E-1
Income and Thrift Incentive Plan
4.1* -- Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to
the Form 10)
4.3* -- By-Laws of the Company (incorporated by reference
to Exhibit 3.2 to the Form 10)
4.4* -- Rights agreement between the Company and the
Rights Agent thereunder (incorporated by reference
to Exhibit 4.3 to the Form 10)
5 -- Opinion of Counsel regarding the legality of the E-313
securities being registered.
23 -- Consent of KPMG Peat Marwick E-314
24* -- Powers of Attorney
* Previously filed.
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
(As amended and restated effective as of January 1, 1987
and containing all amendments through December 31, 1993)
INTRODUCTION
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . .1-1
1.1 Accounts . . . . . . . . . . . . . . . . . . . . .1-1
1.2 Affiliated Employer. . . . . . . . . . . . . . . .1-1
1.3 Annuity . . . . . . . . . . . . . . . . . . . . .1-1
1.4 Code . . . . . . . . . . . . . . . . . . . . . . .1-1
1.5 Committee . . . . . . . . . . . . . . . . . . . .1-1
1.6 Compensation . . . . . . . . . . . . . . . . . . .1-1
1.7 Effective Amendment Date . . . . . . . . . . . . .1-3
1.8 Employee . . . . . . . . . . . . . . . . . . . . .1-3
1.9 Employer . . . . . . . . . . . . . . . . . . . . .1-3
1.10 ERISA . . . . . . . . . . . . . . . . . . . . . .1-3
1.11 Family Member. . . . . . . . . . . . . . . . . . .1-4
1.12 Federated . . . . . . . . . . . . . . . . . . . .1-4
1.13 Highly Compensated Employee . . . . . . . . . . .1-4
1.14 Immediate Family Member . . . . . . . . . . . . .1-5
1.15 Investment Fund . . . . . . . . . . . . . . . . .1-5
1.16 Leased Employee . . . . . . . . . . . . . . . . .1-5
1.17 Leave of Absence . . . . . . . . . . . . . . . . .1-5
1.18 Non-Highly Compensated Employee . . . . . . . . .1-5
1.19 Normal Retirement Age. . . . . . . . . . . . . . .1-6
1.20 Participant . . . . . . . . . . . . . . . . . . .1-6
1.21 Plan . . . . . . . . . . . . . . . . . . . . . . .1-6
1.22 Plan Administrator . . . . . . . . . . . . . . . .1-6
1.23 Plan Year . . . . . . . . . . . . . . . . . . . .1-6
1.24 Savings Agreement. . . . . . . . . . . . . . . . .1-6
1.25 Spouse . . . . . . . . . . . . . . . . . . . . . .1-7
1.26 Top-Paid Highly Compensated Employee . . . . . . .1-7
1.27 Total Disability or Totally Disabled . . . . . . .1-7
1.28 Trust . . . . . . . . . . . . . . . . . . . . . .1-7
1.29 Trustee. . . . . . . . . . . . . . . . . . . . . .1-7
1.30 Trust Fund . . . . . . . . . . . . . . . . . . . .1-7
1.31 Valuation Date . . . . . . . . . . . . . . . . . .1-7
1.32 Valuation Period . . . . . . . . . . . . . . . . .1-7
SECTION 2 - SERVICE DEFINTIONS AND RULES . . . . . . . . . .2-1
2.1 Service Definitions. . . . . . . . . . . . . . . .2-1
2.2 Special Credited Employment . . . . . . . . . . .2-4
2.3 Affiliated Employment . . . . . . . . . . . . . .2-5
SECTION 3 - ELIGIBILITY AND PARTICIPATION . . . . . . . . .3-1
3.1 Eligibility for Participation . . . . . . . . . .3-1
3.2 Covered Employee . . . . . . . . . . . . . . . . .3-1
3.3 Entry Date . . . . . . . . . . . . . . . . . . . .3-2
3.4 Duration of Participation . . . . . . . . . . . .3-2
3.5 Reinstatement of Participant . . . . . . . . . . .3-2
3.6 Special Participation Rule Applicable to Persons With
Transferred Benefits . . . . . . . . . . . . . . .3-2
SECTION 4 - SAVINGS CONTRIBUTIONS. . . . . . . . . . . . . .4-1
4.1 Effective Date of Savings Agreement . . . . . . .4-1
4.2 Amendment and Suspension of Savings Agreement. . .4-3
4.3 Savings Contributions. . . . . . . . . . . . . . .4-3
4.4 Pre- and After-Tax Nature of Savings Contributions. . .4-3
4.5 Savings Contributions Eligible for Match . . . . .4-4
4.6 Mistake of Fact . . . . . . . . . . . . . . . . .4-5
SECTION 4A - AVERAGE ACTUAL DEFERRAL
PERCENTAGE RESTRICTIONS .. . . . . . . . . . . . . . . . .4A-1
4A.1 Average Actual Deferral Percentages Limits . . . .4A-1
4A.2 Special Rules for Average Actual Deferral Percentage
Limits . . . . . . . . . . . . . . . . . . . . . .4A-1
4A.3 Distribution or Recharacterization of Excess
Contributions . . . . . . . . . . . . . . . . . .4A-3
4A.4 Definitions for Average Actual Deferral
Percentage Limits . . . . . . . . . . . . . . . .4A-6
4A.5 Restructuring Into Employee Groups for Pre-
1992 Plan Year . . . . . . . . . . . . . . . . . .4A-7
4A.6 Disaggregating Portions of Plan For Post-1991 Plan Years . .4A-8
SECTION 5 - MATCHING CONTRIBUTIONS . . . . . . . . . . . . .5-1
5.1 Annual Amount of Matching Contributions. . . . . .5-1
5.2 Time and Form of Matching Contributions . . . . .5-2
5.3 Mistake of Fact . . . . . . . . . . . . . . . . .5-2
SECTION 5A - AVERAGE ACTUAL CONTRIBUTION
PERCENTAGE RESTRICTIONS . . . . . . . . . . . . . . . . .5A-1
5A.1 Average Actual Contribution Percentage Limits. . .5A-1
5A.2 Special Rules for Average Actual Contribution
Percentage Limits . . . . . . . . . . . . . . . .5A-1
5A.3 Distribution or Forfeiture of Excess Aggregate
Contributions . . . . . . . . . . . . . . . . . .5A-3
5A.4 Definitions for Average Actual Contribution
Percentage Limits . . . . . . . . . . . . . . . .5A-8
5A.5 Restructuring Into Employee Groups for Pre-
1992 Plan Years . . . . . . . . . . . . . . . . .5A-9
5A.6 Disaggregating Portions of Plan For Post-1991 Plan Years . .5A-10
SECTION 6 - ACCOUNTS AND THEIR ALLOCATIONS
AND VESTING. . . . . . . . . . . . . . . . . . . . . . . .6-1
6.1 Savings Accounts and Allocation of
Savings Contributions Thereto. . . . . . . . . . .6-1
6.2 Matching Accounts and Allocation of Matching
Contributions Thereto . . . . . . . . . . . . . .6-2
6.3 Retirement Income Accounts . . . . . . . . . . . .6-3
6.4 Allocation of Forfeitures . . . . . . . . . . . .6-4
6.5 Maximum Annual Addition to Accounts . . . . . . .6-4
6.6 Investment of Accounts . . . . . . . . . . . . . .6-4
6.7 Allocation of Income and Losses of Investment
Funds to Accounts . . . . . . . . . . . . . . . .6-4
6.8 Deduction of Benefit Payments, Forfeitures,
and Withdrawals . . . . . . . . . . . . . . . . .6-5
6.9 Account Balances . . . . . . . . . . . . . . . . .6-5
6.10 Vested Rights . . . . . . . . . . . . . . . . . .6-5
6.11 Voting of Federated Common Shares Held in Investment Fund. .6-6
SECTION 6A - MAXIMUM ANNUAL ADDITION LIMITS. . . . . . . . .6A-1
6A.1 Maximum Annual Addition Limit--Separate
Limitation as to This Plan . . . . . . . . . . . .6A-1
6A.2 Maximum Annual Addition Limit--Combined
Limitation for This Plan and Other Defined
Benefit Plans . . . . . . . . . . . . . . . . . .6A-4
SECTION 6B - INVESTMENT OF ACCOUNTS . . . . . . . . . . . .6B-1
6B.1 General Rules for Investment Accounts . . . . . .6B-1
6B.2 Investment of of Pre-July 1, 1993 Retirement Income Account . . .6B-2
6B.3 Investment Funds . . . . . . . . . . . . . . . . .6B-3
SECTION 6C - INVESTMENT OF ACCOUNTS PRIOR TO MARCH 31, 1994.6C-1
6C.1 Investment of Savings Accounts . . . . . . . . . .6C-1
6C.2 Investment of Matching Accounts . . . . . . . . .6C-2
6C.3 Investment of Retirement Income Accounts . . . . .6C-3
6C.4 Investment Funds . . . . . . . . . . . . . . . . .6C-3
SECTION 7 - WITHDRAWALS DURING EMPLOYMENT. . . . . . . . . .7-1
7.1 Withdrawals of After-Tax Savings Contributions . .7-1
7.2 Withdrawals of Pre-Tax Savings Contributions . . .7-2
7.3 Requirements for Hardship Withdrawals . . . . . .7-2
7.4 Suspension of Savings Contributions. . . . . . . .7-4
SECTION 8 - DISTRIBUTIONS ON ACCOUNT OF
TERMINATION OF EMPLOYMENT FOR REASONS
OTHER THAN DEATH . . . . . . . . . . . . . . . . . . . . .8-1
8.1 Distribution of Retirement Benefit . . . . . . . .8-1
8.2 Required Commencement Date . . . . . . . . . . . .8-1
8.3 Forfeiture of Nonvested Accounts on
Termination of Employment . . . . . . . . . . . .8-3
8.4 Application of Forfeitures . . . . . . . . . . . .8-3
SECTION 8A - FORM OF DISTRIBUTION OF SAVINGS
AND MATCHING ACCOUNTS . . . . . . . . . . . . . . . . . .8A-1
8A.1 Section Applies Only to Savings and
Matching Accounts. . . . . . . . . . . . . . . . .8A-1
8A.2 Normal Form of Savings Benefit -- Lump
Sum Payment . . . . . . . . . . . . . . . . . . .8A-1
8A.3 Optional Annuity Form of Benefit Rules . . . . . .8A-1
8A.4 Normal Form of Annuity Benefit . . . . . . . . . .8A-3
8A.5 Election Out of Normal Annuity Form . . . . . . .8A-3
8A.6 Optional Annuity Forms . . . . . . . . . . . . . .8A-4
8A.7 Annuity Definitions . . . . . . . . . . . . . . .8A-4
8A.8 Minimum Required Installment/Lump Sum
Form of Benefit . . . . . . . . . . . . . . . . .8A-5
SECTION 8B - FORM OF DISTRIBUTION OF RETIRE-
MENT INCOME ACCOUNTS . . . . . . . . . . . . . . . . . . .8B-1
8B.1 Section Applies Only to Retirement Income Accounts . .8B-1
8B.2 Normal Form of Profit Sharing Benefit --
Qualified Annuity Forms . . . . . . . . . . . . .8B-1
8B.3 Election Out of Normal Form . . . . . . . . . . .8B-1
8B.4 Regular Optional Forms . . . . . . . . . . . . . .8B-2
8B.5 Annuity Form of Benefit Rules . . . . . . . . . .8B-3
8B.6 Annuity Definitions. . . . . . . . . . . . . . . .8B-3
8B.7 Required Lump Sum Form for Small Profit Sharing
Benefit . . . . . . . . . . . . . . . . . . . . .8B-4
8B.8 Optional Minimum Required Installment/
Lump Sum Form of Benefit . . . . . . . . . . . . .8B-4
SECTION 9 - DISTRIBUTIONS ON ACCOUNT OF DEATH. . . . . . . .9-1
9.1 Distribution of Death Benefit . . . . . . . . . .9-1
9.2 Time of Death Benefit . . . . . . . . . . . . . .9-1
9.3 Normal Form of Death Benefit --
Lump Sum Payment . . . . . . . . . . . . . . . . .9-1
9.4 Optional Annuity Form of Death Benefit Rules . . .9-2
9.5 Annuity Definitions. . . . . . . . . . . . . . . .9-2
9.6 Designation of Beneficiary . . . . . . . . . . . .9-3
SECTION 9A - SPECIAL SPOUSAL DEATH BENEFIT RULES
FOR RETIREMENT INCOME ACCOUNTS . . . . . . . . . . . . . .9A-1
9A.1 Section Applies Only to Retirement Income Accounts . .9A-1
9A.2 Time of Profit Sharing Death Benefit . . . . . . .9A-1
9A.3 Normal Form of Profit Sharing Death Benefit. . . .9A-1
9A.4 Election Out of Normal Form . . . . . . . . . . .9A-1
9A.5 Optional Forms.. . . . . . . . . . . . . . . . . .9A-2
9A.6 Annuity Form of Benefit Rules. . . . . . . . . . .9A-2
9A.7 Required Lump Sum Form for Small Profit
Sharing Death Benefit . . . . . . . . . . . . . .9A-3
9A.8 Annuity Definitions . . . . . . . . . . . . . . .9A-4
9A.9 Designation of Beneficiary . . . . . . . . . . . .9A-4
SECTION 10 - ADDITIONAL DISTRIBUTION PROVISIONS. . . . . . .10-1
10.1 Allocation of Contributions After Distribution . .10-1
10.2 Determination of Proper Party for Distribution and
Forfeiture When Proper Party Cannot Be Located . .10-1
10.3 Reemployed Participant . . . . . . . . . . . . . .10-1
10.4 Nonalienation of Benefits . . . . . . . . . . . .10-2
10.5 Incompetency . . . . . . . . . . . . . . . . . . .10-2
10.6 Legal Distribution Limits . . . . . . . . . . . .10-2
10.7 Distribution Form Notices . . . . . . . . . . . .10-4
10.8 Direct Rollover Distributions. . . . . . . . . . .10-4
SECTION 11 - NAMED FIDUCIARIES . . . . . . . . . . . . . . .11-1
SECTION 12 - ADMINISTRATIVE AND INVESTMENT
COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . .12-1
12.1 Appointment of Committee . . . . . . . . . . . . .12-1
12.2 General Powers of Committee. . . . . . . . . . . .12-1
12.3 Records of Plan . . . . . . . . . . . . . . . . .12-2
12.4 Actions of Committee . . . . . . . . . . . . . . .12-2
12.5 Compensation of Committee and Payment of
Plan Administrative and Investment Charges . . . .12-3
12.6 Limits on Liability . . . . . . . . . . . . . . .12-3
12.7 Claims Procedure . . . . . . . . . . . . . . . . .12-3
12.8 Limits on Duties . . . . . . . . . . . . . . . . .12-4
12.9 Appointment of Investment Manager. . . . . . . . .12-4
SECTION 13 - TERMINATION OR AMENDMENT. . . . . . . . . . . .13-1
13.1 Right to Terminate . . . . . . . . . . . . . . . .13-1
13.2 Full Vesting Upon Termination or Complete
Discontinuance of Contributions . . . . . . . . .13-1
13.3 Effect of Termination of Plan or Complete
Discontinuance of Contributions . . . . . . . . .13-1
13.4 Amendment of Plan . . . . . . . . . . . . . . . .13-2
SECTION 14 - TOP HEAVY PROVISIONS . . . . . . . . . . . . .14-1
14.1 Determination of Whether Plan Is Top Heavy . . . .14-1
14.2 Effect of Top Heavy Status on Vesting . . . . . .14-5
14.3 Effect of Top Heavy Status on Contributions. . . .14-5
14.4 Effect of Top Heavy Status on Combined
Maximum Plan Limits . . . . . . . . . . . . . . .14-6
SECTION 15 - MISCELLANEOUS . . . . . . . . . . . . . . . . .15-1
15.1 Trust . . . . . . . . . . . . . . . . . . . . . .15-1
15.2 Mergers, Consolidations, and Transfers of Assets .15-1
15.3 Correction of Inadvertent Errors . . . . . . . . .15-2
15.4 Authority to Act for Federated or Other Employer .15-2
15.5 Relationship of Plan to Employment Rights. . . . .15-2
15.6 Applicable Law . . . . . . . . . . . . . . . . . .15-2
15.7 Agent for Service of Process . . . . . . . . . . .15-3
15.8 Reporting and Disclosure . . . . . . . . . . . . .15-3
15.9 Employees Transferring From Affiliated Employer .15-3
15.10 Separability of Provisions . .15-3
15.11 Counterparts. .15-3
15.12 Headings .15-3
15.13 Construction .15-3
15.14 Applicable Benefit Provisions.15-4
15.15 Employment Rule . .15-4
15.16 Appendices and Exhibits .15-4
SECTION 16 - MERGER OF CAMPEAU CALIFORNIA
PLAN INTO THIS PLAN. . . . . . . . . . . . . . . . . . . .16-1
16.1 Date of Merger . . . . . . . . . . . . . . . . . .16-1
16.2 Change in Campeau California Plan
Provisions After Merger. . . . . . . . . . . . . .16-1
16.3 Transfer of Amounts to this Plan . . . . . . . . .16-3
16.4 Participation of Campeau California Plan
Participants in This Plan. . . . . . . . . . . . .16-4
SECTION 17 - MERGER OF ALLIED PROFIT SHARING-INVESTMENT PLAN
INTO THIS PLAN AND AGGREGATION OF ALLIED PROFIT SHARING-
INVESTMENT PLAN AND THIS PLAN FOR NONDISCRIMINATION TESTING. . 17-1
17.1 Merger of Allied Plan Into This Plan . . . . . . .17-1
17.2 Effect of Allied Plan Merger on This Plan. . . . .17-1
17.3 Transfer of Amounts to This Plan By Reason of
Allied Plan Merger . . . . . . . . . . . . . . . .17-5
17.4 Aggregation of Allied Plan and This Plan for Coverage
and Nondiscrimination Testing. . . . . . . . . . .17-5
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . .S-1
APPENDIX A - PARTICIPATING CORPORATIONS . . . . . . . . . .App-1
EXHIBIT A - TRUST AGREEMENT. . . . . . . . . . . . . . . . .A-1
EXHIBIT B - JANUARY 1, 1987 THROUGH DECEMBER 31,
1988 PROVISIONS . . . . . . . . . . . . . . . . .B-1
EXHIBIT C - JANUARY 1, 1987 THROUGH DECEMBER 31,
1988 PROVISIONS OF MERGED CAMPEAU
CALIFORNIA PLAN. . . . . . . . . . . . . . . . . .C-1
FEDERATED DEPARTMENT STORES, INC.
RETIREMENT INCOME AND THRIFT INCENTIVE PLAN
(As amended and restated effective as of January 1, 1987
and containing all amendments through December 31, 1993)
INTRODUCTION
This plan shall be known as the Federated Department Stores, Inc.
Retirement Income and Thrift Incentive Plan (the "Plan").
The Plan provides additional retirement income to persons who participate
in the Plan. In this regard, it is intended that the Plan (together with the
Trust used in conjunction with the Plan) qualify as a tax-favored plan and trust
under Sections 401(a) and 501(a) of the Code. The Plan shall be interpreted in
a manner consistent with Sections 401(a) and 501(a) of the Code wherever
possible.
The Plan was adopted by Federated effective as of January 25, 1953 and
has been amended many times since then. This document, other than Exhibits B
and C attached hereto, amends and restates the Plan effective as of January 1,
1989. In addition, Exhibits B and C to this document provide all of the
provisions of the Plan (and of a plan which is merged into this Plan effective
as of January 1, 1989) which are effective for the period which begins on
January 1, 1987 and which ends on December 31, 1988.
SECTION 1
DEFINITIONS
As used in this Plan (and any Appendices hereto), the following general
terms shall have the meanings indicated unless it is clear from the context that
another meaning is intended:
1.1 Accounts - means, with respect to any Participant, the bookkeeping
accounts established by the Committee for the Participant in accordance with the
provisions of this Plan, and as to which contributions, forfeitures, and Trust
income and losses may be allocable under the Plan. The specific types and names
of Accounts provided for a Participant under the Plan are set forth in the
subsequent provisions of the Plan. Any reference to an Account (or to a portion
of an Account) in this Plan shall also be deemed a reference to all amounts
allocated to such Account (or to such Account portion) under this Plan.
1.2 Affiliated Employer - means each corporation which is a member of a
controlled group of corporations (within the meaning of Section 414(b) of the
Code as modified when applicable by Section 415(h) of the Code) of which the
Employer is a member, each trade or business which is under common control
(within the meaning of Section 414(c) of the Code as modified when applicable
by Section 415(h) of the Code) with the Employer, each member of an affiliated
service group (within the meaning of Section 414(m) of the Code) which includes
the Employer, and each other entity required to be aggregated with the Employer
under Section 414(o) of the Code; except that any corporation or trade or
business which is considered as part of the Employer as defined in Section 1.9
below shall not also be considered an Affiliated Employer hereunder.
1.3 Annuity - means a form of benefit without life insurance which
provides for equal payments at regular installments over more than a one-year
period.
1.4 Code - means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
1.5 Committee - means the committee appointed by Federated to serve
as the Committee described in Section 12 below. Federated may appoint the
same committee to perform the duties and responsibilities of the committee under
this Plan and the committee under the Federated Department Stores, Inc. Pension
Plan. Currently, Federated has appointed one committee to perform the functions
of both such committees.
1.6 Compensation - means, with respect to an Employee and for any
period, the amount determined as follows:
(a) Subject to paragraphs (b), (c), (d), and (e) below, the
Employee's "Compensation" for any period shall mean his wages (within the
meaning of Section 3401(a) of the Code) and all other payments of compensation
to the Employee by the Employer for which the Employer is required to furnish
the Employee a written statement (e.g., a Form W-2) under Section 6051(a)(3)
of the Code. Such Compensation shall be determined without regard to any rules
under Section 3401(a) of the Code that limit the remuneration included in wages
based on the nature or location of the employment or the services performed.
(b) Notwithstanding the foregoing, the following types of irregular
or additional compensation shall not be included in the "Compensation"
of an Employee for any period by reason of the provisions of paragraph (a)
above: director's fees; amounts realized from or recognized by reason of a
restricted stock award; amounts realized from stock appreciation rights; amounts
realized from or recognized by reason of the exercise of a stock option or the
disposition of stock acquired under a stock option; moving expense
reimbursements or payments made to cover mortgage interest differentials
resulting from a move; merchandise or savings bond awards; reimbursements for
tuition or educational expenses; cost of living allowances; amounts resulting
from a forgiveness of a loan; lump sum severance payments or lump sum payments
in settlement of disputes involving termination of employment; retention
bonuses or severance pay paid by reason of or approved by an order of a court;
sick pay or disability payments made under a third-party payor arrangement; any
imputed income or the like arising under welfare or other fringe benefit plans
or programs (including but not limited to group term life insurance, use of
employer cars, financial counseling, and employee discounts); any payments made
to cover any personal income taxes resulting from the imputing of income by
reason of welfare or other fringe benefits; and any payments which are not
reported as wages on a Form W-2 for the Employee but which are not otherwise
described in this paragraph (b).
(c) In addition to the amounts included in the Employee's
"Compensation" for any period under paragraphs (a) and (b) above, and
notwithstanding the provisions of such paragraphs, the Employee's
"Compensation" for any period shall also include (1) any amounts contributed to
this Plan or any other plan qualified under Section 401(a) of the Code and
maintained by the Employer which were subject to a cash or deferred election of
the Employee made under and pursuant to Section 401(k) of the Code and which
are not includable in the Employee's income for such period by reason of Section
402(e)(3) of the Code and (2) any amounts treated as employer contributions to
a cafeteria plan maintained by the Employer by reason of an election of the
Employee made under and pursuant to Section 125 of the Code and which are not
includable in the Employee's income for such period by reason of Section 125 of
the Code.
(d) Notwithstanding any of the provisions of paragraphs (a),
(b), and (c) above, the "Compensation" of the Employee which is taken into
account for any Plan Year beginning prior to January 1, 1994 under the Plan
shall not exceed $200,000 (or any higher amount to which this figure is adjusted
under Section 401(a)(17) of the Code by the Secretary of the Treasury or his
delegate for the calendar year in which such Plan Year begins).
(e) Finally, notwithstanding any of the provisions of paragraphs
(a), (b), (c), and (d) above, the "Compensation" of the Employee which is taken
into account for any Plan Year beginning on or after January 1, 1994 under the
Plan shall not exceed $150,000 (or any higher amount to which this figure is
adjusted under Section 401(a)(17) of the Code by the Secretary of the Treasury
or his delegate for the calendar year in which such Plan Year begins).
1.7 Effective Amendment Date - means the effective date of Sections
1 through 17 below, which is January 1, 1989.
1.8 Employee - is used herein only to refer to an individual who is
eligible to become a Participant in the Plan if he meets all of the
participation requirements set forth in Section 3 below (including certain
minimum service and covered employee requirements set forth in Section 3 below)
and, subject to the other provisions of this Section 1.8, means an individual
who is a common law employee of the Employer. It does not in any event include:
(1) a director of the Employer who is not employed by the Employer in any other
capacity; (2) except where Federated has otherwise agreed, any person whose
compensation is paid by the Employer for the lessee of a leased department in a
store operated by the Employer; or (3) any person whose compensation consists
solely of a retainer or fee. Further, when any corporation which is identified
in Appendix A hereto as being part of the Employer at any point in time later
loses its status as being part of the Employer (because it no longer is part of
a controlled group of corporations which includes Federated or because of any
other reason), all persons who are considered Employees under this Plan by
reason of their employment by such corporation immediately prior to such
corporation losing its status as part of the Employer shall no longer be
considered Employees under this Plan upon such corporation's loss of Employer
status. In addition, any Leased Employee shall be considered an Employee only
if he is both a Leased Employee of the Employer and Federated has agreed to his
being considered an Employee for purposes of this Plan.
1.9 Employer - means each and every corporation which is a member
of the controlled group of corporations (within the meaning of Section 414(b) of
the Code) which includes Federated and which is identified in Appendix A hereto
as participating in this Plan. No corporation can be part of the Employer
unless it is part of a controlled group of corporations which includes
Federated. Except where the context otherwise is clear, any reference to the
Employer in this Plan shall be deemed to be referring collectively to all of the
corporations which comprise the Employer.
1.10 ERISA - means Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as amended from time to time.
1.11 Family Member - means, with respect to any person who is a
Top-Paid Highly Compensated Employee for a specific Plan Year, each person
who at any time during such Plan Year is a Spouse or lineal ascendant or
descendant of such Top-Paid Highly Compensated Employee or a spouse of such
a lineal ascendant or descendant.
1.12 Federated - means Federated Department Stores, Inc., a Delaware
corporation with its principal office in Cincinnati, Ohio. Federated is the
sponsor of this Plan, and any other Employer may participate in this Plan only
if such participation is permitted by Federated.
1.13 Highly Compensated Employee - means, with respect to any Plan
Year (the "subject Plan Year"), any person who is an Employee during at least
part of such Plan Year and who during such Plan Year or the immediately
preceding Plan Year (the "look-back Plan Year") (1) was at any time a 5% owner
(as defined in Section 416(i)(1) of the Code) of the Employer, (2) received
Compensation in excess of $75,000, (3) received Compensation in excess of
$50,000 and was in the top 20% of all persons who were Employees at some time
during the applicable Plan Year (excluding those Employees described in Section
414(q)(8)(A) through (E) of the Code) when ranked on the basis of Compensation
received during such Plan Year, or (4) was at any time an officer of the
Employer and received Compensation greater than 50% of the amount in effect
under Section 415(b)(1)(A) of the Code for the applicable Plan Year (i.e., the
defined benefit pension plan dollar limit on annual benefits); provided that a
person shall not be considered a Highly Compensated Employee for the subject
Plan Year solely because he comes within a category of clause (2), (3), or (4)
above in the subject Plan Year (and where he does not come within any of such
categories in the look-back Plan Year) unless he is in the top 100 Employees who
received the most Compensation from the Employer during the subject Plan Year.
Also, for purposes of clause (4) above, no more than 50 Employees (or, if less,
the greater of three Employees or 10% of the number of persons who were
Employees of the Employer at some point during the applicable Plan Year
(excluding those Employees described in Section 414(q)(8)(A) through (E) of the
Code)) shall be treated as officers for either the subject Plan Year or the
look-back Plan Year. Further, if for either the subject Plan Year or the
look-back Plan Year no officer of the Employer is described in clause (4) above
because he fails to earn a sufficient level of Compensation, the officer of the
Employer with the highest Compensation for such year shall be treated as if he
were described in such clause (4) for such year. In addition, the $75,000 and
$50,000 amounts set forth above shall be adjusted for each Plan Year in
accordance with the adjustments to such amounts made by the Secretary of the
Treasury or his delegate under Section 414(q)(1) of the Code. Finally, a person
is a Highly Compensated Employee for the subject Plan Year if he separated from
service (or was deemed to have separated from service under Treasury regulations
issued under Section 414(q) of the Code) prior to the subject Plan Year, if he
performs no services for the Employer during the subject Plan Year, and if he
was considered a Highly Compensated Employee under the foregoing sentences
of this Section 1.13 for either the Plan Year in which he separated from service
(or was deemed to have separated from service) or any Plan Year ending on or
after the person's 55th birthday.
1.14 Immediate Family Member - means, with respect to any person
who is a Top-Paid Highly Compensated Employee for a specific Plan Year, each
person who is such Top-Paid Highly Compensated Employee's Spouse at any time
during such Plan Year or who is a lineal descendant of such Top-Paid Highly
Compensated Employee who has not attained age 19 by the close of the subject
Plan Year.
1.15 Investment Fund - means one of the separate commingled
investment funds established under the Trust which are used for the investment
of assets of the Plan. The specific Investment Funds used for the Plan are
described in the subsequent provisions of the Plan.
1.16 Leased Employee - means any person who is a leased employee
(within the meaning of Section 414(n) of the Code) of the Employer or an
Affiliated Employer. Under Code Section 414(n), subject to any subsequent
changes to such Code Section, a leased employee is an individual who provides
services to a recipient, in a capacity other than as a common law employee of
the recipient, in accordance with each of the following three requirements:
(1) the services are provided pursuant to an agreement between the recipient and
one or more leasing organizations; (2) the individual has performed such
services for the recipient on a substantially full-time basis for a period of at
least one year; and (3) such services are of a type historically performed, in
the business of the recipient, by employees. The determination of who is a
Leased Employee shall be consistent with any regulations issued under Section
414(n) of the Code.
1.17 Leave of Absence - means, with respect to an Employee, any
period of the Employee's absence from service with the Employer which does not
constitute a quit, retirement, or discharge under any uniform and
nondiscriminatory personnel policy of the Employer which applies to the class of
Employees to which such Employee belongs. For this purpose, if for any period
the Employee continues to perform the services required with respect to his
employment by the Employer, he is not considered absent from service (and
thereby is not on a Leave of Absence) for such period. A Leave of Absence shall
in any event include an absence of the Employee from service for maternity or
paternity reasons. An absence for "maternity or paternity reasons" means an
absence from service (1) by reason of the pregnancy of the Employee, (2) by
reason of the birth of a child of the Employee, (3) by reason of the placement
of a child with the Employee in connection with the adoption of such child by
the Employee, or (4) for purposes of caring for such child for a period
immediately following such birth or placement. An Employee shall be treated as
having terminated his employment with the Employer at the end of any Leave of
Absence unless at such time he returns to service with the Employer or is
granted by the Employer an extension of the approved leave of absence period.
1.18 Non-Highly Compensated Employee - means, with respect to any
Plan Year, any person who is an Employee during at least part of such Plan Year
and who is not a Highly Compensated Employee with respect to such Plan Year.
1.19 Normal Retirement Age - means, with respect to any Participant,
the date the Participant first reaches age 65.
1.20 Participant - means any person who becomes a Participant in
accordance with the provisions of the Plan, so long as he remains a Participant
under the provisions of the Plan. The provisions of Section 3 below determine
when a person is a Participant on or after the Effective Amendment Date.
1.21 Plan - means the Federated Department Stores, Inc. Retirement
Income and Thrift Incentive Plan, as currently set forth in this document and as
may be amended hereinafter. In addition, any reference to the "Plan" contained
in this document also refers to the Plan as in effect immediately prior to the
adoption of this document and which the current document amends and restates,
all defined contribution plans which preceded and were continued by the
immediately preceding plan or any such other preceding plan, and any defined
contribution plans which are or were merged into or have or had assets and
liabilities directly transferred to this Plan as currently constituted, the
immediately preceding plan, or any of such other preceding plans, with the
immediately preceding plan and all such other preceding and merged or
transferred plans being referred to herein as the "Prior Plans."
1.22 Plan Administrator - means Federated.
1.23 Plan Year - means the calendar year.
1.24 Savings Agreement - means, with respect to a Participant and for
any specified period that the agreement is in effect, any agreement between the
Participant and the Employer under which the Participant's Compensation for the
specified period is reduced on a pre-tax basis and/or on an after-tax basis (in
1% increments up to 10%) and the amount of such pre-tax and/or after-tax
reduction is contributed to the Trust by the Employer on behalf of the
Participant. In no event may a Participant reduce his Compensation for any
specified period on either a pre-tax or after-tax basis or on aggregate basis by
more than 10% pursuant to a Savings Agreement. The Committee may, in order to
make it easier for the Plan to meet the limits set forth in Sections 4A and 5A
below, further restrict the amount by which any Participant who is then believed
to be a Highly Compensated Employee may reduce his Compensation on either a
pre-tax or after-tax basis or on an aggregate basis for a specified period
pursuant to a Savings Agreement to some lower percent. Also, in no event may a
Participant reduce his Compensation on a pre-tax basis for any calendar year by
more than $7,000 (or any higher amount to which this figure is adjusted by the
Secretary of the Treasury or his delegate for such calendar year pursuant to
Section 402(g) of the Code). A Savings Agreement must be made on a form
prepared or approved for this purpose by the Committee. Any election on the
appropriate form that 0% of the Participant's Compensation is to be reduced
shall not be considered a Savings Agreement for purposes of the Plan.
1.25 Spouse - means, with respect to an Employee and at any relevant
time, the Employee's husband or wife who is recognized as such under the laws
of the State in which the Employee resides at such time.
1.26 Top-Paid Highly Compensated Employee - means, with respect to
any Plan Year, any person who is a Highly Compensated Employee with respect
to such Plan Year and who either is a 5% owner (as defined in Section 416(i)(1)
of the Code) of the Employer at any time during such Plan Year (or the
immediately preceding Plan Year) or is one of the ten Employees with the
greatest Compensation for the subject Plan Year.
1.27 Total Disability or Totally Disabled - means or refers to, with
respect to any Employee, a physical or mental disability of the Employee which
prevents him from performing the normal activities of his occupation and which
is reasonably expected to be permanent. An Employee shall be deemed to be
Totally Disabled only if the Committee determines such condition exists based on
credible medical evidence submitted by the Employee. For purposes of the Plan,
an Employee shall be considered to have terminated employment with the
Employer (and incurred a Date of Termination under Section 2.1.2 below) by
reason of a Total Disability when the Committee approves a finding that the
Participant is Totally Disabled.
1.28 Trust - means the Trust Agreement attached hereto as Exhibit B.
The Trust is used as the funding media for this Plan and is hereby deemed a part
of this Plan.
1.29 Trustee - means the person or persons serving from time to time
as the Trustee under the Trust.
1.30 Trust Fund - means the trust fund established in accordance with
the Trust.
1.31 Valuation Date - means the last day of each calendar month, as of
which dates the Plan's assets held in the Trust shall be valued.
1.32 Valuation Period - means any period which begins on a day which
immediately follows a Valuation Date and ends on the next following Valuation
Date.
SECTION 2
SERVICE DEFINITIONS AND RULES
2.1 Service Definitions. For purposes of the Plan, the following terms
related to service shall have the meanings hereinafter set forth unless the
context otherwise requires:
2.1.1 Break-in-Service - means, with respect to an Employee who
has incurred a Date of Termination of Employment, each twelve consecutive
month period which commences on the Employee's Date of Termination of
Employment, or an annual anniversary of such date, and during which the
Employee is not reemployed by the Employer. Notwithstanding the foregoing,
if the Employee incurs a Date of Termination by reason of being on a Leave of
Absence for maternity or paternity reasons (as defined in Section 1.l7 above)
which lasts for more than twelve consecutive months, the Employee shall incur
a Break-in-Service only for each twelve consecutive month period which
commences on the earlier of (1) the date the Employee quits, is discharged, or
retires or (2) the second annual anniversary of the date such Leave of Absence
began, or an annual anniversary of the earlier of such dates, and during which
the Employee is not reemployed by the Employer.
2.1.2 Date of Termination of Employment - means, with respect to
an Employee and subject to the other provisions of the Plan, a date determined
as follows:
(a) At any time after December 31, 1991, the Employee
shall be deemed to have incurred a Date of Termination of Employment on the
earlier of (1) the date he quits, retires, is discharged, or dies or (2) the
first annual anniversary of the date he begins a Leave of Absence (provided he
has not returned to service with the Employer prior to such first annual
anniversary).
(b) At any time prior to January 1, 1992, the Employee
shall be deemed to have incurred a Date of Termination of Employment on the
date he terminates employment with the Employer by reason of his quit,
retirement, discharge, or death. The Employee shall not be considered to have
incurred a Date of Termination of Employment prior to January 1, 1992 while
he is absent from service by reason of a Leave of Absence, provided that the
Employee timely furnishes a Plan representative with such information as may
reasonably be necessary to establish that the absence from service is because of
a Leave of Absence and is continuing and that no quit, retirement, or discharge
has yet occurred.
2.1.3 Eligibility Service - means, with respect to an Employee,
the Employee's period of service with the Employer to be taken into account for
purposes of determining his eligibility to become a Participant in the Plan,
computed as follows:
(a) An Employee who completes at least 1,000 Hours
of Service during the twelve consecutive month period commencing on his
Employment Date shall be credited with one year of Eligibility Service at the
end of such twelve consecutive month period.
(b) An Employee who fails to complete at least 1,000
Hours of Service during the twelve consecutive month period commencing on his
Employment Date shall be credited with one year of Eligibility Service at the
end of the first Plan Year commencing after such Employment Date during which he
completes at least 1,000 Hours of Service.
(c) For an Employee who both (1) incurs a Date of
Termination of Employment either prior to his being credited with one year of
Eligibility Service or prior to the first day of the first calendar quarter
which begins on or after he has been credited with a year of Eligibility Service
and (2) suffers a Break-in-Service before being subsequently reemployed by the
Employer, his service with the Employer prior to his reemployment shall be
disregarded in determining the Eligibility Service he needs under the Plan to
become a Participant (and his Reemployment Date shall be treated as if it were
his Employment Date for such purposes).
2.1.4 Employment Date - means, with respect to an Employee,
the date on which the Employee first performs an Hour of Service.
2.1.5 Five-Year Break-in-Service - means, with respect to an
Employee who has incurred a Date of Termination of Employment, a period
commencing on the Employee's Date of Termination of Employment and during
which he incurs five consecutive Breaks-in-Service.
2.1.6 Hour of Service - means, with respect to an Employee, each
hour for which the Employee: (1) is paid, or is entitled to payment, for the
performance of duties as an Employee; (2) is directly or indirectly paid, or is
entitled to payment, for a period of time (without regard to whether the
employment relationship is terminated) when he performs no duties as an
Employee due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, or leave of absence; and (3) is paid for any
reason in connection with his employment as an Employee an amount as "back
pay," irrespective of mitigation of damages. The crediting of Hours of Service
to an Employee under the Plan shall also be subject to the following provisions:
(a) Notwithstanding the foregoing provisions of this
Section 2.1.6, an Hour of Service shall not be credited to an Employee on
account of a payment which solely reimburses such Employee for medical, or
medically related, expenses incurred by or on behalf of the Employee.
(b) Also, subject to the other provisions of this Section
2.1.6, Hour of Service credit shall be calculated in accordance with paragraphs
(b) and (c) of Section 2530.200b-2 of the Department of Labor Hour of Service
Regulations, which paragraphs are hereby incorporated by reference into this
Plan.
(c) Effective as of January 1, 1994, any Employee who
on or after such date is exempt from the minimum wage and overtime pay
requirements of the Fair Labor Standards Act, and as to whom records of actual
hours worked are thereby not needed to be kept for such purposes, shall be
credited with: (1) if such Employee is paid on a weekly basis, 45 Hours of
Service for each week which ends after December 31, 1993 and for which he
would be credited with at least one Hour of Service under the other provisions
of this Section 2.1.6; (2) if such Employee is paid on a semi-monthly basis, 95
Hours of Service for each semi-monthly payroll period which ends after
December 31, 1993 and for which he would be credited with at least one Hour
of Service under the other provisions of this Section 2.1.6; or (3) if such
Employee is paid on a monthly basis, 190 Hours of Service for each month which
ends after December 31, 1993 and for which he would be credited with at least
one Hour of Service under the other provisions of this Section 2.1.6.
(d) Effective as of January 1, 1994, Hours of Service
to be credited to an Employee in connection with any period (1) which is of no
more than 31 days, (2) which ends after June 30, 1993, (3) which begins on the
first day of a pay period for the Employee (the "initial pay period"), (4) which
ends on the last day of the Employee's pay period which includes the pay day for
the initial pay period, and (5) which overlaps two computation periods or occurs
in a month which overlaps two computation periods shall be credited on behalf
of the Employee to the computation period in which falls the first day of the
month during which the pay day for the initial pay period occurs.
2.1.7 Period of Employment - means, with respect to an
Employee, a period which begins on an Employment Date or a Reemployment
Date of the Employee and ends on the next Date of Termination of Employment
he incurs. In the event an Employee incurs a Date of Termination of
Employment due to a quit, retirement, or discharge but is reemployed by the
Employer prior to his incurring a Break-in-Service, such prior Date of
Termination of Employment shall be disregarded in determining the Employee's
Periods of Employment under the Plan.
2.1.8 Reemployment Date - means, with respect to an Employee who
has previously incurred a Break-in-Service, the first day after the Employee's
most recent Break-in-Service on which the Employee performs an Hour of
Service.
2.1.9 Six-Year Break-in-Service - means, with respect to an
Employee who has incurred a Date of Termination of Employment, a period
commencing on the Employee's Date of Termination of Employment and during
which he incurs six consecutive Breaks-in-Service.
2.1.10 Vesting Service - means, with respect to a Participant, the
Participant's service with the Employer which is taken into account under the
Plan for vesting purposes (i.e., for purposes of determining the nonforfeitable
percentage of the Participant's Accounts under the Plan), computed as follows:
(a) The Participant shall be credited with Vesting Service
equal to the total number of years (including a fractional part of a year)
which are included in all Periods of Employment of the Participant. In no event
shall the Participant's years of Vesting Service credited for periods prior to
the Effective Amendment Date be less than the service credited under the Plan to
the Participant for vesting purposes as of the day immediately preceding the
Effective Amendment Date.
(b) Notwithstanding the foregoing, any Vesting Service
completed by the Participant prior to incurring one or more consecutive Breaks-
in-Service of the Participant shall be disregarded under the Plan after the
end of such Breaks-in-Service if (1) the Participant both did not have a
nonforfeitable interest in any Account under the Plan at the time the
Breaks-in-Service began (other than for the portion of any Account which is
attributable to any after-tax contributions the Participant made himself to the
Plan), (2) the number of the Participant's consecutive Breaks-in-Service which
follow such Vesting Service equals or exceeds the number of the Participant's
years of Vesting Service credited prior to the start of the Breaks-in-Service,
and (3) the number of the Participant's consecutive Breaks-in-Service which
follow such Vesting Service equals or exceeds five. Effective January 1, 1992,
the reference to "five" contained in clause (3) above is changed to "six,"
except that such change shall not apply in determining whether any Vesting
Service of the Participant completed prior to January 1, 1992 is to be
disregarded under this paragraph (b) if such Vesting Service would in any event
be disregarded under this paragraph (b) (without considering such change) as of
December 31, 1991. Further, clause (3) above shall not be a condition to
Vesting Service of the Participant completed prior to February 1, 1985 being
disregarded if such Vesting Service would in any event be disregarded as of
January 31, 1985 under this paragraph (b) if clause (3) above were completely
ignored. Finally, clauses (2) and (3) above shall not in any event be a
condition to Vesting Service of the Participant completed prior to January 1,
1976 being disregarded if such Vesting Service would be so disregarded as of
December 31, 1975 under this paragraph (b) if clauses (2) and (3) above were
completely ignored.
2.2 Special Credited Employment. For purposes of the Plan, years
during which an Employee was employed by a corporate or other predecessor of
any corporation included in the Employer which became part of the Employer
after the Effective Amendment Date, or by any division (including any branch
thereof) of the Employer whose business was acquired by the Employer after the
Effective Amendment Date, shall be considered in either case years of
Eligibility Service or Vesting Service under this Plan if they would have been
so considered under Section 2.1.3 or 2.1.10 above (as appropriate) had they been
completed with the Employer. In addition, to the extent that the Board of
Directors of Federated may from time to time determine, years of a Participant's
employment with a lessee of a leased department of a store operated by the
Employer whose business is directly assumed by the Employer shall be considered
years of Eligibility Service or Vesting Service under this Plan if they would
have been so considered under Section 2.1.3 or 2.1.10 above (as appropriate) had
they been completed with the Employer. Also, any period of service of any
Employee with the armed forces of the United States shall be credited as
Eligibility Service and/or Vesting Service to the extent required by Federal
law.
2.3 Affiliated Employment. Subject to Sections 4A.2.2 and 5A.2.2
below but notwithstanding any other provision of the Plan to the contrary:
2.3.1 Any period of employment of a person with the Employer
during which the person is not considered an Employee, any period of
employment with an Affiliated Employer, and any period during which a person
is a Leased Employee shall in any such case, regardless of whether occurring
prior to or after employment as an Employee of the Employer, be considered in
the same manner as employment as an Employee of the Employer for purposes
of crediting years of Eligibility Service and Vesting Service under this Plan to
such person, determining if such person has incurred a Break-in-Service, and
determining if and when such person has a vested right to a benefit under the
Plan.
2.3.2 Further, a transfer of status from that of being an Employee
to other employment with the Employer or to any employment with an Affiliated
Employer shall in any such case not be considered a termination of employment
from the Employer for purposes of determining when a benefit of this Plan due
a Participant, if any, is to be or begin to be distributed; rather, such
termination of employment shall be deemed to occur only upon the Participant's
later termination of employment from the group composed of the Employer and all
Affiliated Employers.
2.3.3 In addition, any person who during any Plan Year is an
employee of the Employer other than as an Employee, is an employee of an
Affiliated Employer, or is a Leased Employee shall be considered an Employee,
and any compensation received in any such capacity during such Plan Year shall
(if determined under the same principles as are set forth at Section 1.6 above)
be considered as Compensation, for purposes of determining the persons who are
the Highly Compensated Employees and the Top-Paid Highly Compensated
Employees for such Plan Year or the immediately following Plan Year.
2.3.4 Also, any compensation received during a period by a
person in the capacity of being an employee of the Employer other than as an
Employee, of being an employee of an Affiliated Employer, or of being a Leased
Employee shall (if determined under the same principles as are set forth at
Section 1.6 above or, if another definition of compensation is used under any of
the below-named Plan Sections, in accordance with such definition when being
considered under such Plan Section) be considered as Compensation of his for
such period for purposes of Section 4A below (which provides Average Actual
Deferral Percentage Limits), Section 5A below (which provides Average Actual
Contribution Percentage limits), Section 6A below (which provides maximum
annual addition limits), and Section 14 below (which provides top-heavy plan
rules).
2.3.5 Finally, except as is otherwise expressly provided in this
Plan (such as in Sections 4A, 5A, 6A, and 14 below), any period of employment
of a person by the Employer during which the person is not considered an
Employee, any period of employment with an Affiliated Employer, and any
period during which a person is a Leased Employee, and any compensation or
remuneration received during any such period, shall not be used in any manner
in calculating the amount of any benefit or contributions to which the person is
entitled under this Plan.
SECTION 3
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility for Participation. Persons shall remain or become
Participants in the Plan only in accordance with the following provisions:
3.1.1 Any person who was a participant in the Plan on the date
immediately preceding the Effective Amendment Date shall continue to be a
Participant in this Plan as of the Effective Amendment Date, unless he is no
longer a Covered Employee and no balance remains in any Accounts held on his
behalf as of the Effective Amendment Date.
3.1.2 Further, each other person who, as of any Entry Date, (1)
has completed at least one year of Eligibility Service and (2) is a Covered
Employee shall become a Participant as of such Entry Date. It is also provided
that, if a person has met all requirements for becoming a Participant other than
being a Covered Employee as of any Entry Date, and he subsequently becomes
a Covered Employee without losing credit under Section 2.1.3(c) above for the
year of Eligibility Service he completed before such prior Entry Date (e.g., by
reason of incurring a Break-in-Service), such Employee shall be deemed a
Participant in the Plan as of the date he so becomes a Covered Employee.
3.2 Covered Employee.
3.2.1 For purposes of the Plan and Section 3.1 above in
particular, a "Covered Employee" means an Employee who is not a participant,
eligible for participation, or in the process of qualifying for participation in
any other plan providing retirement benefits and qualified under Section 401(a)
of the Code which was adopted by the Employer or any Affiliated Employer, the
cost of which is borne in whole or in part by the Employer or any Affiliated
Employer.
3.2.2 Notwithstanding the provisions of Section 3.2.1 above, an
Employee shall not be considered other than a Covered Employee merely because
of his participation in another plan if such participation relates solely to
employment which preceded the Entry Date on which he would otherwise become
a Participant under the Plan and the Employee's benefits under such other plan
relate solely to such past service (in the case of a defined benefit pension
plan) or solely from contributions made with respect to such past service (in
the case of a defined contribution plan).
3.2.3 Further, again notwithstanding the provisions of Section
3.2.1 above, an Employee shall not be considered other than a Covered Employee
merely because of his participation in any of the following plans: (1) a plan
which was in effect for any corporation which became part of the Employer at the
time it became part of the Employer or for any division of the Employer at the
time its business was acquired by the Employer, provided the Income Before
Federal Taxes on Income of any such corporation or division is excluded for the
purpose of computing the Employer's contribution to the Plan pursuant to Section
5.1 below; (2) the Federated Department Stores, Inc. Pension Plan; or (3) the
Allied Stores Corporation Retirement Benefit Plan.
3.3 Entry Date. For purposes of the Plan and Section 3.1 above in
particular, an "Entry Date" means the first day of any calendar quarter which
begins on or after the Effective Amendment Date.
3.4 Duration of Participation.
3.4.1 Each Participant in the Plan shall continue to be a
Participant until he has ceased to be an Employee and the entire balance in his
Accounts under the Plan has been distributed or forfeited hereunder.
3.4.2 However, notwithstanding the foregoing, a Participant shall
be eligible to enter into or continue a Savings Agreement to the extent allowed
under Section 4 below only while he is considered an active Participant. For
this purpose and all other purposes of the Plan (and in particular for purposes
of Sections 3.5 and 4 below), a person is an "active Participant" for any period
which begins on the date he becomes a Participant under Section 3.1 above or
under Section 3.5 below and ends on the next date on which he ceases to be a
Covered Employee.
3.5 Reinstatement of Participation.
3.5.1 Any person who ceases to be an active Participant, but who
is thereafter reemployed as a Covered Employee by the Employer prior to incur-
ring a Break-in-Service after the latest prior date on which he was an active
Participant, shall be reinstated as an active Participant as of the date on
which he next completes an Hour of Service on or after such reemployment.
3.5.2 Further, any person who ceases to be an active Participant,
but who is thereafter reemployed as a Covered Employee by the Employer after
incurring a Break-in-Service after the latest prior date on which he was an
active Participant, shall also be reinstated as an active Participant as of the
date on which he next completes an Hour of Service on or after such
reemployment; except that, if such person is so reemployed prior to January 1,
1990, he shall not be reinstated as an active Participant prior to the first
Entry Date which coincides with or follows his completion of a new year of
Eligibility Service after the incurring of such Break-in-Service.
3.6 Special Participation Rule Applicable to Persons With Transferred
Benefits. Notwithstanding any of the foregoing provisions of this Section 3,
if, pursuant to any other provisions of this Plan, any amounts are transferred
to this Plan on behalf of a person from another plan qualified under Section
401(a) of the Code by reason of such person's prior participation in such other
plan, but such person does not become a Participant in the Plan under the
provisions of Section 3.1 above, such person shall not be considered an active
Participant in this Plan (and hence will not be entitled to enter into a Savings
Agreement under the Plan) but shall be considered a Participant for all other
provisions of this Plan which do not solely apply to active Participants (and
hence will generally have the same rights to direct the investment of his
Accounts, to withdraw amounts from his Accounts, and to have his Accounts
distributed to him as other Participants have under the Plan).
SECTION 4
SAVINGS CONTRIBUTIONS
4.1 Effective Date of Savings Agreement.
4.1.1 Any person who continues as an active Participant in the
Plan as of the Effective Amendment Date pursuant to Section 3.1.1 above and
who has a Savings Agreement in effect as of the date immediately preceding the
Effective Amendment Date shall continue to have such agreement apply on and
after the Effective Amendment Date, until and unless he amends or suspends such
Savings Agreement under the provisions of Section 4.2 below.
4.1.2 (a) In addition, any person who becomes an active
Participant in the Plan on or after the Effective Amendment Date pursuant to
Section 3.1.2 above may have a Savings Agreement take effect as of the later of
the date he first becomes a Participant or the first pay day which begins after
his Savings Agreement is filed with a Plan representative, provided that he
files such Savings Agreement with a Plan representative no later than 60 days
(effective January 1, 1994, 30 days), or such lesser number of days as the
Employer determines for the class of Participants to which he belongs, after the
date he first becomes a Participant.
(b) Notwithstanding any other provision of the Plan to
the contrary, any Savings Agreement of a Participant which is filed under para-
graph (a) of this Section 4.1.2 prior to January 1, 1994, after the date the
Participant first becomes a Participant in the Plan, and within 60 days after
such initial participation date will apply only to the Participant's
Compensation which is payable after such agreement is filed with a Plan
representative, but the limits on the amount by which his future Compensation
may be reduced for the period beginning with the first pay day occurring after
the filing of such Savings Agreement and ending on the last day of the Plan Year
in which such pay day occurs which are otherwise applicable under the first
three sentences of Section 1.24 above (e.g., the limit that any such reduction
in Compensation be in 1% increments up to 10%) may, at the option of the
Employer, be determined as if such Savings Agreement applied to the
Participant's Compensation paid during the period which begins on the date the
Participant first becomes a Participant in the Plan and ends on the last day of
the Plan Year in which such date occurs.
For administrative reasons, the rule set forth in the immediately preceding
sentence is eliminated for any Savings Agreement filed with a Plan
representative on or after January 1, 1994.
4.1.3 Further, any person who is reinstated as an active
Participant pursuant to Section 3.5.1 above (i.e., prior to incurring a Break-
in-Service after the latest prior date on which he was an active Participant)
shall have whatever Savings Agreement was in effect on the latest prior date on
which he was an active Participant continue to apply without change on and after
the date he is reinstated as an active Participant, until and unless he amends
or suspends such Savings Agreement under the provisions of Section 4.2 below.
If such a person had no Savings Agreement in effect on the latest prior date on
which he was an active Participant, he shall not be permitted to enter into a
new Savings Agreement except under the provisions of Section 4.1.5 below.
4.1.4 (a) Also, any person who is reinstated as an active
Participant pursuant to Section 3.5.2 above (i.e., after incurring a Break-
in-Service after the latest prior date on which he was an active Participant)
may have a new Savings Agreement take effect as of the later of the date he is
reinstated as an active Participant or the first pay day which occurs after his
Savings Agreement is filed with a Plan representative, provided that he files
such Savings Agreement with a Plan representative no later than 60 days
(effective January 1, 1994, 30 days), or such lesser number of days as the
Employer determines for the class of Participants to which he belongs, after the
date he is reinstated as an active Participant.
(b) Notwithstanding any other provision of the Plan to
the contrary, any Savings Agreement of a Participant which is filed under
paragraph (a) of this Section 4.1.4 prior to January 1, 1994, after the date the
Participant is reinstated as an active Participant in the Plan, and within 60
days after such reinstatement date will apply only to the Participant's
Compensation which is payable after such agreement is filed with a Plan
representative, but the limits on the amount by which his future Compensation
may be reduced for the period beginning with the first pay day occurring after
the filing of such Savings Agreement and ending on the last day of the Plan Year
in which such pay day occurs which are otherwise applicable under the first
three sentences of Section 1.24 above (e.g., the limit that any such reduction
in Compensation be in 1% increments up to 10%) may, at the option of the
Employer, be determined as if such Savings Agreement applied to the
Participant's Compensation paid during the period which begins on the date as of
which the Participant is reinstated as an active Participant in the Plan and
ends on the last day of the Plan Year in which such date occurs.
For administrative reasons, the rule set forth in the
immediately preceding sentence is eliminated for any Savings Agreement filed
with a Plan representative on or after January 1, 1994.
4.1.5 Except as otherwise provided above, any Savings Agreement
of an active Participant shall take effect as of (and not before) the first
day of the first Plan Year which begins on or after such Savings Agreement has
been filed with a Plan representative. The Committee may require for
administrative reasons that such Savings Agreement must be filed a reasonable
number of days prior to the first day of a Plan Year for it to be considered
effective as of such day.
4.1.6 Any Savings Agreement of an active Participant which becomes
effective under the foregoing provisions of this Section 4.1 shall not be
effective after the active Participant ceases to be an active Participant,
except with respect to Compensation paid for a prior period when he was an
active Participant and except as is otherwise provided in Section 4.1.3 above.
4.2 Amendment and Suspension of Savings Agreement.
4.2.1 An active Participant may amend the percent of future
Compensation subject to his then effective Savings Agreement as of the first day
of any Plan Year, provided he files an amended Savings Agreement which
reflects such change with a Plan representative on or prior to such day. The
Committee may require for administrative reasons that such amended Savings
Agreement must be filed a reasonable number of days prior to the first day of a
Plan Year for it to be considered effective as of such day.
4.2.2 Further, an active Participant may suspend altogether his then
effective Additional Savings Contributions (as defined in Section 4.5 below),
if any are then being made, or his entire then effective Savings Agreement with
respect to any Compensation payable to him on or after any date, provided he
files written notice of such suspension with a Plan representative prior to such
date. The Committee may require for administrative reasons that such written
notice of suspension must be filed a reasonable number of days prior to any date
on which Compensation is otherwise payable to him for such suspension notice
to be considered effective as to such Compensation.
4.2.3 If an active Participant suspends his entire Savings
Agreement under the provisions of Section 4.2.2 above during a Plan Year, he
may enter into a new Savings Agreement as of the first day of any subsequent
Plan Year (and not before), provided that he files the new Savings Agreement
with a Plan representative on or prior to such day and provided that he is not
then prohibited from entering into a Savings Agreement by reason of a hardship
withdrawal he has taken under this Plan (pursuant to Section 7.4 below) or any
other plan maintained by the Employer or an Affiliated Employer. The
Committee may require for administrative reasons that such new Savings
Agreement must be filed a reasonable number of days prior to the first day of a
Plan Year for it to be considered effective as of such day.
4.3 Savings Contributions. Subject to the other provisions of the Plan,
the Employer shall contribute to the Trust, on behalf of each active Participant
who has a Savings Agreement in effect, those contributions called for under such
Savings Agreement. Such contributions are described in this Plan as "Savings
Contributions." Savings Contributions shall be remitted by the Employer to the
Trust as soon as administratively practical. For purposes of allocating
earnings and other amounts under the Plan and of determining the investment
options applicable to a Participant's Savings Contributions, any Savings
Contributions shall be deemed to have been made as of the first Valuation Date
which coincides with or follows the pay day to which they relate and for the
Plan Year in which such Valuation Date occurs. Savings Contributions shall be
made in cash and shall not be dependent on net or accumulated profits of the
Employer.
4.4 Pre- and After-Tax Nature of Savings Contributions.
4.4.1 Any active Participant who enters into a Savings Agreement
or amended Savings Agreement under the Plan shall specify in such agreement
the portion of the Savings Contributions resulting from such agreement which
shall be considered under this Plan as "Pre-Tax Savings Contributions" and the
portion of such Savings Contributions which shall be considered "After-Tax
Savings Contributions." (The Committee may, in order to make it easier for the
Plan to meet the limits set forth in Sections 4A and 5A below, restrict the
maximum amount of the Savings Contributions applicable to an active Participant
who is then believed to be a Highly Compensated Employee which may be
specified by the Participant as Pre-Tax Savings Contributions, as After-Tax
Savings Contributions, or as Pre-Tax and After-Tax Savings Contributions in the
aggregate for any period to some percent of his Compensation for such period
which is less than the maximum percent of Compensation he is otherwise
permitted to elect to have contributed as Savings Contributions on his behalf
for such period.)
4.4.2 For purposes of the Plan, any Savings Contributions
applicable to an active Participant which are designated by the Participant as
Pre-Tax Savings Contributions shall be contributed to the Plan prior to the
Participant being deemed in receipt of such amounts for Federal income tax
purposes and shall thereby be considered to have been contributed on a "pre-tax"
basis.
4.4.3 Further, for purposes of the Plan, any Savings Contributions
applicable to an active Participant which are designated by the Participant as
After-Tax Savings Contributions shall be contributed to the Plan after the
Participant is deemed in receipt of such amounts for Federal income tax purposes
nd shall thereby be considered to have been contributed on an "after-tax" basis.
4.4.4 In certain situations, a portion of the Savings Contributions
made on behalf of an active Participant for a Plan Year which are designated by
the Participant as Pre-Tax Savings Contributions may be recharacterized as
After-Tax Savings Contributions (called herein the "Recharacterized Pre-Tax
Savings Contributions") in order to meet the average actual deferral percentage
restrictions set forth in Section 4A below. Such situations are described in
detail in Section 4A.3 below.
4.5 Savings Contributions Eligible for Match. For purposes of
determining the extent to which the Employer shall make Matching Contributions
under Section 5 below, certain Savings Contributions made on behalf of an active
Participant for any Plan Year are deemed to be "Basic Savings Contributions"
which are used to help determine the amount of Matching Contributions for such
Plan Year, and certain of such Savings Contributions are deemed to be
"Additional Savings Contributions" which are not used to determine the amount
of Matching Contributions for such Plan Year. For this purpose, the portion of
the Savings Contributions made on behalf of an active Participant for any Plan
Year are deemed to be Basic Savings Contributions or Additional Savings
Contributions in accordance with the following rules:
4.5.1 Any such Savings Contributions which are designated by the
Participant as Pre-Tax Savings Contributions (other than Recharacterized Pre-Tax
Savings Contributions) shall be deemed to be Basic Savings Contributions to the
extent they do not exceed 5% of the Participant's Compensation for such Plan
Year and shall be deemed to be Additional Savings Contributions to the extent
they do exceed 5% of the Participant's Compensation for such Plan Year;
4.5.2 Any such Savings Contributions which are Recharacterized
Pre-Tax Savings Contributions shall be deemed to be Basic Savings Contributions
to the extent they do not exceed the difference (if any) between 5% of the
Participant's Compensation for such Plan Year and the amount of Savings
Contributions made on behalf of the Participant for such Plan Year which both
are designated by the Participant as Pre-Tax Savings Contributions and are not
Recharacterized Pre-Tax Savings Contributions and shall be deemed to be
Additional Savings Contributions to the extent they do exceed such difference;
and
4.5.3 Any such Savings Contributions which are designated by the
Participant as After-Tax Savings Contributions shall be deemed to be Basic
Savings Contributions to the extent they do not exceed the difference (if any)
between 5% of the Participant's Compensation for such Plan Year and the
Savings Contributions made on behalf of the Participant for such Plan Year which
are designated by the Participant as Pre-Tax Savings Contributions (including
Recharacterized Pre-Tax Savings Contributions) and shall be deemed Additional
Savings Contributions to the extent they do exceed such difference.
4.6 Mistake of Fact.
4.6.1 Any After-Tax Savings Contribution contributed to the Plan
for a Participant which has been made in an amount in excess of the amount of
the After-Tax Savings Contribution elected by the Participant or which has been
taken from Compensation of the Participant paid when he was not a Participant
in the Plan may be paid by the Trustee to the Participant (unless repayment
is not administratively possible) as a correction of the mistake which led it to
be contributed to the Plan, upon the receipt by the Trustee of a written notice
of a Plan representative describing such mistake and requesting the payment of
such contribution to the Participant. Plan income attributable to such
contribution shall not be paid to the Participant in connection with such
payment, and Plan losses attributable to such contribution shall not reduce the
amount which is otherwise to be paid. (The Employer in its discretion may pay
to the Participant an additional amount, determined in any manner the Employer
chooses, to reflect interest which may have been earned by the Participant had
the returned Savings Contribution never been made to the Plan, but any such
payment shall only be made outside the Plan and shall not be paid by the Plan
itself.)
4.6.2 Any other Savings Contribution made upon the basis of a
mistaken factual assumption shall be repaid by the Trustee to the Employer
(unless repayment is not administratively possible) as a correction of such
mistaken factual assumption, upon the receipt by the Trustee within one year
from the date of such contribution of a written notice of the Employer
describing such mistaken factual assumption and requesting the return of such
contribution. Plan income attributable to such contribution shall not be paid
to the Employer, but Plan losses attributable to such contribution shall reduce
the amount which is otherwise to be paid.
SECTION 4A
AVERAGE ACTUAL DEFERRAL PERCENTAGE RESTRICTIONS
4A.1 Average Actual Deferral Percentage Limits. The Average Actual
Deferral Percentage of the Highly Compensated Employees for any Plan Year
must satisfy one of the following limits:
4A.1.1 Limitation 1: The Average Actual Deferral
Percentage of the Highly Compensated Employees for the subject Plan Year may
not exceed the Average Actual Deferral Percentage of the Non-Highly
Compensated Employees for such Plan Year multiplied by 1.25; or
4A.1.2 Limitation 2: The Average Actual Deferral
Percentage of the Highly Compensated Employees for the subject Plan Year both
may not exceed the Average Actual Deferral Percentage of the Non-Highly
Compensated Employees for such Plan Year multiplied by 2.0 and may not
exceed the Average Actual Deferral Percentage of the Non-Highly Compensated
Employees for such Plan Year by more than two percentage points.
4A.2 Special Rules for Average Actual Deferral Percentage Limits. For
purposes of the limits set forth in Section 4A.1 above, the following special
rules apply:
4A.2.1(a) For purposes of determining the Actual Deferral
Percentage for any Plan Year of an Eligible Participant who is a Top-Paid Highly
Compensated Employee for such Plan Year, the Pre-Tax Savings Contributions
and Compensation applicable to the Family Members of such Eligible Participant
for such Plan Year shall be treated (except as provided in paragraph (b) below)
as if they were the Pre-Tax Savings Contributions and Compensation for such
Plan Year of such Eligible Participant. Such Family Members shall be
disregarded as separate Eligible Participants in determining the Average Actual
Deferral Percentage for the subject Plan Year of both the Non-Highly
Compensated Employees and the Highly Compensated Employees.
(b) Notwithstanding the provisions of paragraph (a)
above, with respect to any Plan Year which begins on or after January 1, 1990
and prior to January 1, 1994 and any Eligible Participant who is a Top-Paid
Highly Compensated Employee for such Plan Year, any Compensation of his
Immediate Family Members for such Plan Year which is otherwise to be treated
as Compensation for such Plan Year of such Eligible Participant for purposes of
etermining his Actual Deferral Percentage for such Plan Year under paragraph
(a) above shall not be taken into account for such purpose to the extent such
amount, when added to the actual Compensation of such Eligible Participant for
such Plan Year, exceeds $209,200 (or any higher amount to which this figure is
adjusted under Section 401(a)(17) of the Code by the Secretary of the Treasury
or his delegate for the calendar year in which such Plan Year begins). Further,
and again notwithstanding the provisions of paragraph (a) above, with respect to
any Plan Year which begins on or after January 1, 1994 and any Eligible
Participant who is a Top-Paid Highly Compensated Employee for such Plan Year,
any Compensation of his Immediate Family Members for such Plan Year which
is otherwise to be treated as Compensation for such Plan Year of such Eligible
Participant for purposes of determining his Actual Deferral Percentage for such
Plan Year under paragraph (a) above shall not be taken into account for such
purpose to the extent such amount, when added to the actual Compensation of
such Eligible Participant for such Plan Year, exceeds $150,000 (or any higher
amount to which this figure is adjusted under Section 401(a)(17) of the Code by
the Secretary of the Treasury or his delegate for the calendar year in which
such Plan Year begins).
4A.2.2 If, with respect to any Plan Year (called the "subject
Plan Year" in this Section 4A.2.2), an Eligible Participant who is a Highly
Compensated Employee for the subject Plan Year is or was eligible to participate
in a cash or deferred arrangement, which qualifies under Section 401(k) of the
Code and is contained in an aggregatable plan, during at least a part of such
aggregatable plan's plan year which ends in the same calendar year in which the
subject Plan Year ends (the "aggregatable plan's subject plan year"), then, for
the purpose of determining the Actual Deferral Percentage of the Eligible
Participant for the subject Plan Year under this Plan, any contributions made to
such aggregatable plan for the aggregatable plan's subject plan year which would
be treated as Pre-Tax Savings Contributions of the Eligible Participant for the
subject Plan Year had they been allowed and made under this Plan for the subject
Plan Year shall be treated as if they were Pre-Tax Savings Contributions of the
Eligible Participant under this Plan for the subject Plan Year. For purposes
hereof, an "aggregatable plan" is a plan other than this Plan which is qualified
under Section 401(a) of the Code, is maintained by the Employer or an Affiliated
Employer, and is not prohibited from being aggregated with this Plan for
purposes of Section 410(b) of the Code under Treas. Reg. Section 1.410(b)-7.
4A.2.3 For purposes of determining if the Average Actual
Deferral Percentage limit of Section 4A.1 above is met for any Plan Year, the
Plan may treat any Matching Contributions (as provided for in Section 5.1 below)
which are made on behalf of an Eligible Participant who is a Non-Highly
Compensated Employee for such Plan Year as being Pre-Tax Savings
Contributions of such Eligible Participant for such Plan Year to the extent the
treatment of such Matching Contributions as Savings Contributions is helpful in
meeting the limit of Section 4A.1 above, provided that the limits of Section
5A.1 below are still met for such Plan Year even if the Matching Contributions
being treated as Savings Contributions hereunder are disregarded for purposes of
meeting such limit.
4A.2.4 To be counted in determining whether the Average
Actual Deferral Percentage limits are met for any Plan Year, any Pre-Tax Savings
Contributions must be paid to the Trust before the end of the Plan Year which
next follows the Plan Year to which such contributions relate.
4A.2.5 For purposes of this Section 4A, Pre-Tax Savings Contribu-
tions are treated as being "made on behalf of an Eligible Participant" for
a Plan Year if such contributions are allocated to an Account of the Eligible
Participant under the Plan as of any date in such Plan Year.
4A.3 Distribution or Recharacterization of Excess Contributions. Subject
to the provisions of this Section 4A.3 but notwithstanding any other provision
of the Plan to the contrary, any Excess Contributions applicable to any Plan
Year (called the "subject Plan Year" in this Section 4A.3) shall be distributed
during (but no later than the last day of) the immediately following Plan Year
to, or shall be recharacterized no later than 2-1/2 months after the end of the
subject Plan Year as After-Tax Savings Contributions (and be known as
"Recharacterized Pre-Tax Savings Contributions" hereunder) of, Eligible
Participants who were Highly Compensated Employees for the subject Plan Year.
The Committee shall choose, in its discretion, whether any Excess Contributions
applicable to a subject Plan Year shall be distributed or recharacterized. Such
decision shall be made within 2-1/2 months after the end of the subject Plan
Year. (Such Excess Contributions, even if distributed, shall still be treated
as part of the Annual Addition, as defined in Section 6A below, for the subject
Plan Year.) The following provisions apply to this distribution or
recharacterization requirement:
4A.3.1(a) For purposes of the Plan, "Excess Contributions" for
any subject Plan Year means the amount (if any) by which the aggregate sum of
Pre-Tax Savings Contributions paid to the Trust for such Plan Year on behalf of
Eligible Participants who are Highly Compensated Employees for such Plan Year
exceeds the maximum amount of such Pre-Tax Savings Contributions which could
have been made and still have satisfied one of the limitations set forth in
Section 4A.1 above. The Excess Contributions for any subject Plan Year shall be
determined, and applied to Eligible Participants who are Highly Compensated
Employees for such Plan Year, in accordance with the method described in para-
graphs (b) and (c) below.
(b) The amount of Excess Contributions which applies
to an Eligible Participant who is a Highly Compensated Employee for a subject
Plan Year is determined under the following leveling method. Under such
method, the Actual Deferral Percentage of the Highly Compensated Employee(s)
with the highest Actual Deferral Percentage for the subject Plan Year is reduced
to the extent required to enable one of the limitations set forth in Section
4A.1 above to be satisfied for the subject Plan Year or to cause such Actual
Deferral Percentage to equal the Actual Deferral Percentage of the Highly
Compensated Employee(s) with the next highest Actual Deferral Percentage for the
subject Plan Year, whichever comes first. This process is repeated as necessary
until one of the limitations set forth in Section 4A.1 above is satisfied for
the subject Plan Year. For each Highly Compensated Employee, his amount of
Excess Contributions for the subject Plan Year is equal to: (1) the total of
the Pre-Tax Savings Contributions paid to the Trust for such Plan Year on his
behalf (determined before the application of this paragraph (b)), less (2) the
amount determined by multiplying the Highly Compensated Employee's Actual
Deferral Percentage for the subject Plan Year (determined after the application
of this paragraph (b)) by his Compensation for such Plan Year. In no event
shall the Highly Compensated Employee's Excess Contributions for the subject
Plan Year exceed the total of the Pre-Tax Savings Contributions paid to the
Trust on his behalf for such Plan Year (determined before application of this
paragraph (b)).
(c) If any Excess Contributions are applied under the
provisions of paragraph (b) above for a subject Plan Year to an Eligible
Participant whose Actual Deferral Percentage for such Plan Year was affected by
the family member rules set forth in Section 4A.2.1 above, then such Excess
Contributions shall be further applied among such Eligible Participant and all
of his Family Members, in the proportion that the Pre-Tax Savings Contributions
of each such person for the subject Plan Year (determined before the application
of paragraph (b) above or this paragraph (c)) bears to the Pre-Tax Savings
Contributions of all such persons for the subject Plan Year (determined before
the application of paragraph (b) above or this paragraph (c)).
4A.3.2(a) If the Committee elects to distribute any Excess
Contributions for a subject Plan Year instead of recharacterizing them as
After-Tax Savings Contributions, then the distribution of any such Excess
Contributions to an Eligible Participant under the provisions of this Section
4A.3 shall be adjusted upward for the Trust's income allocable thereto (or
downward for the Trust's loss allocable thereto), as determined under paragraphs
(b) and (c) below.
(b) For purposes hereof, the Trust's income (or loss)
allocable to any Excess Contributions applicable to a subject Plan Year which
begins on or after January 1, 1991 and applied to an Eligible Participant shall
be equal to the product obtained by multiplying (1) the net income (or net loss)
for the subject Plan Year and for the gap period of the Investment Fund or Funds
in which the Eligible Participant's Savings Contributions were invested which is
allocable under Section 6.7 below to the portion of the Participant's Savings
Account attributable to Pre-Tax Savings Contributions by (2) a fraction, the
numerator of which is the amount of Excess Contributions otherwise being dis-
tributed to the Eligible Participant and the denominator of which is the total
balance as of the first day of the subject Plan Year of the portion of the
Eligible Participant's Savings Account attributable to Pre-Tax Savings
Contributions plus the Pre-Tax Savings Contributions allocated to that portion
of his Savings Account for the subject Plan Year and for the gap period. For
purposes hereof, the "gap period" refers to the period from the end of the
subject Plan Year through the last Valuation Date for which valuations of the
applicable Investment Fund or Funds have been completed and the results of which
are available to the Committee prior to the date the Excess Contributions are
being distributed.
(c) Also for purposes hereof, the Trust's income (or
loss) allocable to any Excess Contributions applicable to a subject Plan Year
which begins prior to January 1, 1991 and applied to an Eligible Participant
shall be equal to the product obtained by multiplying (1) the net income (or net
loss) for the subject Plan Year of the Investment Fund or Funds in which the
Eligible Participant's Savings Contributions were invested which is allocable
under Section 6.7 below to the portion of the Eligible Participant's Savings
Account attributable to Pre-Tax Savings Contributions by (2) a fraction, the
numerator of which is the amount of Excess Contributions otherwise being
distributed to the Eligible Participant and the denominator of which is the
total balance as of the last day of the subject Plan Year (reduced by any
income, and increased by any loss, occurring during such Plan Year) of the
portion of the Eligible Participant's Savings Account attributable to Pre-Tax
Savings Contributions. In addition, when such Excess Contributions relate to a
subject Plan Year which begins prior to January 1, 1991, the net income (or
loss) allocable to such Excess Contributions shall also include an additional
amount equal to the product obtained by multiplying 10% of the amount of net
income (or loss) determined to apply to such Excess Contributions under the
immediately preceding sentence by the number of whole calendar months between
the end of the subject Plan Year and the date the Excess Contributions are
paid to the Eligible Participant, counting the month of the distribution as a
whole calendar month only if such distribution occurs after the 15th of such
month.
(d) If any Excess Contributions applicable to an Eligible
Participant and for a subject Plan Year which begins on or after January 1, 1991
are distributed to the Eligible Participant under the provisions of this Section
4A.3, then, pursuant to Section 411(a)(3)(G) of the Code and Treas. Reg. Section
1.411(a)-4(b)(7), any Matching Contributions which are allocated to the Eligible
Participant's Matching Account for such Plan Year by reason of such Excess
Contributions (and not yet distributed or forfeited under the Plan by the date
the Excess Contributions are distributed) shall, together with the Trust's
income allocable thereto (or less the Trust's loss allocable thereto), be
forfeited as of the day such Excess Contributions are distributed to the
Eligible Participant (and such forfeited amounts shall be reallocated to
Accounts of other Participants in accordance with later provisions of the Plan).
For these purposes, the Trust's income (or loss) allocable to any such forfeited
Matching Contributions shall be equal to the product obtained by multiplying
(1) the total net income (or total net loss) for the subject Plan Year and for
the gap period of the Investment Fund or Funds in which the Eligible
Participant's Matching Contributions were invested which is allocable under
Section 6.7 below to the portion of the Eligible Participant's Matching
Account attributable to Matching Contributions by (2) a fraction, the
numerator of which is the Matching Contributions being forfeited
under this paragraph (d) and the denominator of which is the total balance as of
the first day of the subject Plan Year of the portion of the Eligible
Participant's Matching Account attributable to Matching Contributions plus the
Matching Contributions and forfeitures allocated to his Matching Account for the
subject Plan Year and for the gap period. For purposes hereof, the "gap period"
refers to the period from the end of the subject Plan Year through the last
Valuation Date for which valuations of the applicable Investment Fund or Funds
have been completed and the results of which are available to the Committee
prior to the date the Matching Contributions are being forfeited hereunder.
(e) If the entire balance of the portion of an Eligible
Participant's Savings Account which is attributable to Pre-Tax Savings Contri-
butions is distributed to the Eligible Participant during a subject Plan Year
(and no balance remains in that portion of his Savings Account at the end of
such Plan Year), then such distribution shall be deemed for all purposes of this
Plan as a distribution under this Section 4A.3.2 of Excess Contributions
applicable to the Eligible Participant for the subject Plan Year (and Trust
income or loss allocable thereto) to the extent Excess Contributions (and
allocable Trust income or losses) would otherwise have been required to be
distributed to the Eligible Participant under this Section 4A.3.
4A.3.3(a) If the Committee elects to recharacterize any Excess
Contributions for a subject Plan Year instead of distributing them, then any
Excess Contributions applicable to an Eligible Participant which are
recharacterized as After-Tax Savings Contributions under this Section 4A.3 shall
be includible in the Eligible Participant's gross income for Federal income tax
purposes on the earliest dates any such contributions would have been received
by the Eligible Participant had he originally elected not to have such amounts
contributed to the Plan.
(b) The Plan shall report any Recharacterized Pre-Tax
Savings Contributions as After-Tax Savings Contributions (1) by timely providing
such forms as the Commissioner of Internal Revenue designates to the Eligible
Participant, the Employer, and the Internal Revenue Service and (2) by timely
taking such other action as the Commissioner of Internal Revenue requires.
(c) Also, the Plan shall account for any Recharacterized
Pre-Tax Savings Contributions as After-Tax Savings Contributions for purposes
of Code Sections 72, 401(a)(4), and 401(k) (except Code Section 401(k)(2)).
However, the Plan shall continue to treat any such Recharacterized Pre-Tax
Savings Contributions as Pre-Tax Savings Contributions for all other purposes of
the Code, including Code Sections 404, 411, 415, 416, and 401(k)(2). Thus, for
example, any such Recharacterized Pre-Tax Savings Contributions shall be subject
to all distribution limits which otherwise apply to Pre-Tax Savings
Contributions.
4A.3.4 Notwithstanding any other provision of the Plan to the
contrary, the limitations set forth in Section 4A.1 above shall be deemed met
for any subject Plan Year if the Excess Contributions for such Plan Year are
distributed or recharacterized in accordance with and to the extent required by
the foregoing provisions of this Section 4A.3.
4A.3.5 If any Excess Contributions applicable to a subject
Plan Year are not either distributed to the appropriate Eligible Participants or
recharacterized as After-Tax Savings Contributions within 2-1/2 months after the
last day of the subject Plan Year, an excise tax shall be imposed under Code
Section 4979 on the Employer in an amount generally equal to 10% of such
Excess Contributions (unadjusted for income or loss allocable thereto).
4A.4 Definitions for Average Actual Deferral Percentage Limits. For
purposes of the limits set forth in this Section 4A, the following definitions
shall apply:
4A.4.1 "Average Actual Deferral Percentage" for any Plan
Year means: (1) with respect to the Highly Compensated Employees, the average
(to the nearest one-hundredth of a percent) of the Actual Deferral Percentages
of the Eligible Participants who are Highly Compensated Employees for such Plan
Year; and (2) with respect to the Non-Highly Compensated Employees, the
average (to the nearest one-hundredth of a percent) of the Actual Deferral
Percentages of the Eligible Participants who are Non-Highly Compensated
Employees for such Plan Year.
4A.4.2 "Actual Deferral Percentage" for any Plan Year
means, with respect to any person who is an Eligible Participant for such Plan
Year, the ratio (expressed as a percentage to the nearest one-hundredth of a
percent) of the Pre-Tax Savings Contributions made on behalf of the Eligible
Participant for such Plan Year to the Compensation of the Eligible Participant
for the entire Plan Year (regardless of whether he is a Participant for the
entire Plan Year or for only part but not all of such Plan Year). The Actual
Deferral Percentage of a person who is an Eligible Participant for such Plan
Year but who does not have any Pre-Tax Savings Contributions made on his behalf
for such Plan Year is 0%.
4A.4.3 "Eligible Participant" means, for any Plan Year,
each person who is both a Participant and a Covered Employee during at least
part of such Plan Year.
4A.4.4 "Compensation" means, with respect to any
Participant, his Compensation as defined in Section 1.6 above; except that, for
purposes of this Section 4A, (1) paragraph (d) of Section 1.6 above shall not
apply for the Plan Year beginning on January 1, 1989 and (2) lump sum
severance payments and lump sum payments in settlement of disputes involving
termination of employment (not including severance pay paid by reason of or
approved by an order of a court) shall not be excluded from Compensation by
reason of paragraph (b) of Section 1.6 above for the Plan Years which begin on
January 1, 1992 and January 1, 1993.
4A.5 Restructuring Into Employee Groups for Pre-1992 Plan Years.
Effective for any Plan Year beginning prior to January 1, 1992, and as permitted
in Treas. Reg. Section 1.401(k)-1(h)(3)(iii), the Committee may elect in its
discretion to treat the Plan as consisting of two or more component plans for
purposes of the rules of this Section 4A (and all other requirements of Sections
401(a)(4) and 401(m)(2) of the Code). If the Committee restructures the Plan
into two or more component plans, the rules of this Section 4A (as well as the
rules of Section 5A below and any other requirements mandated under Section
401(a)(4) of the Code) shall apply to each component plan (and to the Employees
included in each such plan) separately and without regard to any other component
plan. If the Committee decides for any Plan Year to restructure the Plan into
two or more component plans, the following conditions shall apply:
4A.5.1 Each component plan must apply to a separate group
of Employees and must meet the coverage requirements of Section 410(b) of the
Code as if it were a separate plan of the Employer (except that the permissive
aggregation rules of Treas. Reg. Section 1.410(b)-(7)(d) shall not be
available). For this purpose, the Employees included in a separate group of
Employees must share some common attribute, such as, for example, being employed
at the same division or being hired prior to or after a specified date. Each
Employee is permitted to be included in only one group of Employees and be
covered by or eligible for only one component plan. Each component plan shall
be deemed to consist of all of the allocations, accruals, and other benefits,
rights, and features provided to the group of Employees covered by or eligible
for such component plan.
4A.5.2 Any residual parts of the Plan which remain after it
has been restructured by the Committee into component plans each of which
applies to a group of Employees shall also be treated as a component plan.
4A.5.3 Any part of the Plan which is treated as a component
plan for any Plan Year may not be treated as part of another component plan for
the same Plan Year. However, the Committee may decide to change the basis
on which component plans are determined from Plan Year to Plan Year or to use
restructuring for one Plan Year but not for another.
4A.6 Disaggregating Portions of Plan For Post-1991 Plan Years.
Effective for the Plan Year beginning on January 1, 1992, the provisions of
Sections 4A.1 through 4A.4 above shall be applied only for the portion of this
Plan which covers Participants who are not collectively bargained employees and
as if such portion were a separate plan. Further, effective for any Plan Year
beginning on or after January 1, 1993, the provisions of Sections 4A.1 through
4A.4 above shall be applied separately for the portion of this Plan which covers
Participants who are not collectively bargained employees and the portion of the
Plan which covers Participants who are collectively bargained employees and as
if each such portion were a separate plan. For purposes hereof, a "collectively
bargained employee" is an Employee who is included in a unit of employees
covered by a collective bargaining agreement between employee representatives
and the Employer, provided retirement benefits were the subject of good faith
bargaining between such employee representatives and the Employer.
SECTION 5
MATCHING CONTRIBUTIONS
5.1 Annual Amount of Matching Contributions. For each Plan Year,
the Employer will contribute amounts to the Trust in addition to the Savings
Contributions elected by Participants for such Plan Year. Such additional
ontributions shall be referred to in the Plan as "Matching Contributions."
Subject to the other provisions of the Plan, the amount of Matching
Contributions which will be made by the Employer for any Plan Year will be the
greater of the amounts set forth in Sections 5.1.1 and 5.1.2 below:
5.1.1 An amount equal to 20% of the aggregate Basic Savings
Contributions which are made for the subject Plan Year to the Plan on behalf of
those Participants who are employed by the Employer on the last day of such
Plan Year and who did not make any withdrawal of Basic Savings Contributions
from their Accounts during such Plan Year.
5.1.2 An amount equal to the lesser of the amounts set forth in
paragraphs (a) and (b) below:
(a) An amount equal to 100% of the aggregate Basic
Savings Contributions which are made for the subject Plan Year to the Plan on
behalf of those Participants who are employed by the Employer on the last day
of such Plan Year and who did not make any withdrawal of Basic Savings
Contributions from their Accounts during such Plan Year.
(b) An amount equal to 2% of the Employer's Income
Before Federal Taxes on Income for the Federated calendar year which begins in
the subject Plan Year, as determined before deduction of the Matching
Contributions to the Plan made for such Plan Year, or such greater amount as the
Board of Directors of Federated in its discretion may determine. In determining
the amount provided under this paragraph (b), the following provisions apply:
(i) In no event will the amount set forth in this
paragraph (b), when added to the Pre-Tax Savings Contributions made for
Federated's tax year in which the subject Plan Year ends, exceed the maximum
amount which can be deducted for such Federated tax year as an employer
contribution to the Plan under the appropriate provisions of Section 404 of the
Code.
(ii) For purposes of this paragraph (b), the
Employer's "Income Before Federal Taxes on Income" for any Federated
calendar year means the Employer's Income Before Federal Taxes on Income as
determined for such year by Federated's chief accounting officer in accordance
with the standard accounting procedures of Federated.
(iii) Also for purposes of this paragraph (b), a
"Federated calendar year" means a period of twelve fiscal months of Federated,
which commences on the first day of its January fiscal month and ends on the
last day of its December fiscal month.
5.2 Time and Form of Matching Contributions.
5.2.1 Subject to the provisions of Section 5.2.2 below, the
Matching Contributions for any Plan Year may be paid in one or more
installments, but the total amount to be contributed must be paid to the
Trust on or before the last date permitted by applicable law for deduction of
such contributions for the tax year of Federated in which such Plan Year ends.
For purposes of allocating earnings and other amounts under the Plan and of
determining the investment options applicable to any Matching Contributions, any
Matching Contributions shall be deemed to have been made as of the last
Valuation Date which occurs in the Plan Year for which such Matching
Contributions are made.
5.2.2 The actual amount paid as Matching Contributions for any
Plan Year may initially, to the extent determined with respect to the amount set
forth in Section 5.1.2 above, be based upon the Employer's Income Before
Federal Taxes on Income (and the other items noted in Section 5.1.2 above) as
estimated by Federated's chief accounting officer in accordance with data
available to him at the time the estimate is made. In the event that, after
Federated's chief accounting officer subsequently determines the final
calculation of the amount set forth in Section 5.1.2 above, an additional amount
is required to be contributed to the Plan by the Employer to meet the required
Matching Contribution provisions of Section 5.1 above, then the Employer will
make such additional contribution as soon as possible after such final
calculation is completed. In the event that the final calculation of the amount
set forth in Section 5.1.2 above shows that the Employer made Matching
Contributions for the subject Plan Year in excess of the amount required under
Section 5.1 above, the amount by which the actual amount of Matching
Contributions which were made exceeds the required Matching Contributions for
such Plan Year shall be deemed not to have been made for such Plan Year but
instead shall be deemed made in the next following Plan Year and shall be used
as soon as possible to reduce (and to substitute for) the next required Matching
Contributions to be made to the Plan.
5.2.3 The Matching Contributions made for any Plan Year shall
be made in cash.
5.3 Mistake of Fact. Any Matching Contribution made upon the basis
of a mistaken factual assumption shall be repaid by the Plan to the Employer
(unless repayment is not administratively possible) as a correction of such
mistaken factual assumption, upon the receipt by the Trustee within one year
from the date of such contribution of a written notice of the Employer
describing such mistaken factual assumption and requesting the return of such
contribution. Plan income attributable to such contribution may not be paid to
the Employer, but Plan losses attributable to such contribution shall reduce the
amount which is otherwise to be paid.
SECTION 5A
AVERAGE ACTUAL CONTRIBUTION PERCENTAGE RESTRICTIONS
5A.1 Average Actual Contribution Percentage Limits.
5A.1.1 The Average Actual Contribution Percentage for
Highly Compensated Employees for any Plan Year must satisfy one of the
following limits:
(a) Limitation 1: The Average Actual Contribution
Percentage of the Highly Compensated Employees for the subject Plan Year may
not exceed the Average Actual Contribution Percentage of the Non-Highly
Compensated Employees for such Plan Year multiplied by 1.25; or
(b) Limitation 2: The Average Actual Contribution
Percentage of the Highly Compensated Employees for the subject Plan Year both
may not exceed the Average Actual Contribution Percentage of the Non-Highly
Compensated Employees for such Plan Year multiplied by 2.0 and may not
exceed the Average Actual Contribution Percentage of the Non-Highly
Compensated Employees for such Plan Year by more than two percentage points.
5A.1.2 In addition, the Average Actual Contribution
Percentage of the Highly Compensated Employees for any Plan Year may not,
when added to the Average Actual Deferral Percentage of the Highly
Compensated Employees for the same Plan Year, exceed the Aggregate Limit.
For purposes of the limitation set forth in this Section 5A.1.2, such Average
Actual Deferral Percentage and Average Actual Contribution Percentage shall be
determined as if all Excess Contributions attributable to the limits set forth
in Section 4A.1 above had previously been determined and recharacterized as
After-Tax Savings Contributions or distributed and as if all Excess Aggregate
Contributions attributable to the limits set forth in Section 5A.1.1 above had
previously been determined and distributed or forfeited (and hence as if such
Average Actual Deferral Percentage and Average Actual Contribution Percentage
had been calculated without considering the contributions reflected in such
Excess Contributions and Excess Aggregate Contributions, respectively). Also,
notwithstanding the foregoing, the limitation set forth in this Section 5A.1.2
shall automatically be deemed met for a Plan Year if either the Average Actual
Deferral Percentage of the Highly Compensated Employees for such Plan Year
is not in excess of the Average Actual Deferral Percentage of the Non-Highly
Compensated Employees for such Plan Year multiplied by 1.25 or the Average
Actual Contribution Percentage of the Highly Compensated Employees for such
Plan Year is not in excess of the Average Actual Contribution Percentage of the
Non-Highly Compensated Employees for such Plan Year multiplied by 1.25.
5A.2 Special Rules for Average Actual Contribution Percentage Limits.
For purposes of the limits set forth in Section 5A.1 above, the following
special rules apply:
5A.2.1(a) For purposes of determining the Actual Contribution
Percentage for any Plan Year of an Eligible Participant who is a Top-Paid Highly
Compensated Employee for such Plan Year, the Matching Contributions,
After-Tax Savings Contributions, and Compensation applicable to the Family
Members of such Eligible Participant for such Plan Year shall (except as
provided in paragraph (b) below) be treated as if they were Matching
Contributions, After-Tax Savings Contributions, and Compensation for such Plan
Year of such Eligible Participant. Such Family Members shall be disregarded as
separate Eligible Participants in determining the Average Actual Contribution
Percentage for the subject Plan Year of both the Non-Highly Compensated
Employees and the Highly Compensated Employees.
(b) Notwithstanding the provisions of paragraph (a)
above, with respect to any Plan Year which begins on or after January 1, 1990
and prior to January 1, 1994 and any Eligible Participant who is a Top-Paid
Highly Compensated Employee for such Plan Year, any Compensation for such
Plan Year of his Immediate Family Members for such Plan Year which is
otherwise to be treated as Compensation for such Plan Year of such Eligible
Participant for purposes of determining his Actual Contribution Percentage for
such Plan Year under paragraph (a) above shall not be taken into account for
such purpose to the extent such amount, when added to the actual Compensation of
such Eligible Participant for such Plan Year, exceeds $209,200 (or any higher
amount to which this figure is adjusted under Section 401(a)(17) of the Code by
the Secretary of the Treasury or his delegate for the calendar year in which
such Plan Year begins). Further, and again notwithstanding the provisions of
paragraph (a) above, with respect to any Plan Year which begins on or after
January 1, 1994 and any Eligible Participant who is a Top-Paid Highly
Compensated Employee for such Plan Year, any Compensation for such Plan
Year of his Immediate Family Members for such Plan Year which is otherwise
to be treated as Compensation for such Plan Year of such Eligible Participant
for purposes of determining his Actual Contribution Percentage for such Plan
Year under paragraph (a) above shall not be taken into account for such purpose
to the extent such amount, when added to the actual Compensation of such
Eligible Participant for such Plan Year, exceeds $150,000 (or any higher amount
to which this figure is adjusted under Section 401(a)(17) of the Code by the
Secretary of the Treasury or his delegate for the calendar year in which such
Plan Year begins).
5A.2.2 If, with respect to any Plan Year (called the "subject
Plan Year" in this Section 5A.2.2), an Eligible Participant who is a Highly
Compensated Employee for the subject Plan Year is or was eligible to participate
in an aggregatable plan, of which a part is subject to the provisions of Section
401(m) of the Code, during at least a part of such aggregatable plan's plan year
which ends in the same calendar year in which the subject Plan Year ends (the
"aggregatable plan's subject plan year"), then, for the purpose of determining
the Actual Contribution Percentage of the Eligible Participant for the subject
Plan Year under this Plan, any contributions made to such aggregatable plan for
the aggregatable plan's subject plan year which would be treated as After-Tax
Savings Contributions or Matching Contributions of the Eligible Participant for
the subject Plan Year had they been allowed and made under this Plan for the
subject Plan Year shall be treated as if they were After-Tax Savings
Contributions or Matching Contributions of the Eligible Participant under this
Plan for the subject Plan Year. For purposes hereof, an "aggregatable plan" is
a plan other than this Plan which is qualified under Section 401(a) of the Code,
is maintained by the Employer or an Affiliated Employer, and is not prohibited
from being aggregated with this Plan for purposes of Section 410(b) of the Code
under Treas. Reg. Section 1.410(b)-7.
5A.2.3 For purposes of determining if the Average Actual
Contribution Percentage limits of Section 5A.1 above are met for any Plan Year,
the Plan may treat any Pre-Tax Savings Contributions (as provided for in Section
4 above) which are made on behalf of an Eligible Participant who is treated as a
Non-Highly Compensated Employee for purposes of determining the Average
Actual Deferral Percentage of the Non-Highly Compensated Employees for such
Plan Year as being Matching Contributions of such Eligible Participant for such
Plan Year to the extent the treatment of such Pre-Tax Savings Contributions as
Matching Contributions is helpful in meeting the limits of Section 5A.1 above,
provided that the limits of Section 4A.1 above are still met for such Plan Year
even if the Pre-Tax Savings Contributions being treated as Matching
Contributions hereunder are disregarded for purposes of meeting such limits.
5A.2.4 To be counted in determining whether the Average
Actual Contribution Percentage limits are met for any Plan Year, any Matching
Contributions or After-Tax Savings Contributions must be paid to the Trust
before the end of the Plan Year which next follows the Plan Year to which such
contributions relate.
5A.2.5 Notwithstanding any other provisions herein to the
contrary, any Matching Contributions which are forfeited under Section 4A.3.2(d)
above by reason of relating to Excess Contributions which are distributed to an
Eligible Participant shall not be taken into account in determining the Eligible
Participant's Actual Contribution Percentage for any Plan Year or considered as
Matching Contributions for any other purpose under this Section 5A.
5A.2.6 For purposes of this Section 5A, Matching Con-
tributions or After-Tax Savings Contributions are treated as being "made on
behalf of an Eligible Participant" for a Plan Year if such contributions are
allocated to an Account of the Eligible Participant under the Plan as of any
date in such Plan Year.
5A.3 Distribution or Forfeiture of Excess Aggregate Contributions.
Subject to the provisions of this Section 5A.3 but notwithstanding any other
provision of the Plan to the contrary, any Excess Aggregate Contributions
applicable to any Plan Year (called the "subject Plan Year" in this Section
5A.3) shall be distributed no later than the last day of the immediately
following Plan Year to Eligible Participants who were Highly Compensated
Employees for the subject Plan Year or forfeited no later than as of the last
day of such immediately following Plan Year, in accordance with the following
provisions of this Section 5A. (Such Excess Aggregate Contributions shall still
be treated as part of the Annual Addition, as defined in Section 6A below, for
the subject Plan Year.) The following provisions apply to this distribution or
forfeiture requirement:
5A.3.1(a) For purposes of the Plan, "Excess Aggregate
Contributions" for any subject Plan Year means the amount (if any) by which the
aggregate sum of Matching Contributions and After-Tax Savings Contributions
(including Recharacterized Pre-Tax Savings Contributions) paid to the Trust for
such Plan Year on behalf of Eligible Participants who are Highly Compensated
Employees for such Plan Year exceeds the maximum amount of such Matching
Contributions and After-Tax Savings Contributions which could have been made
and still have satisfied one of the limitations set forth in Section 5A.1.1
above and the limitation set forth in Section 5A.1.2 above. The Excess
Aggregate Contributions for any subject Plan Year shall be determined, and
applied to Eligible Participants who are Highly Compensated Employees for such
Plan Year, in accordance with the method described in paragraphs (b) and (c)
below.
(b) The amount of Excess Aggregate Contributions
which applies to an Eligible Participant who is a Highly Compensated Employee
for a subject Plan Year is determined under the following leveling method.
Under such method, the Actual Contribution Percentage of the Highly
Compensated Employee(s) with the highest Actual Contribution Percentage for
the subject Plan Year is reduced to the extent required to enable one of the
limitations set forth in Section 5A.1.1 above and the limitation set forth in
Section 5A.1.2 above to be satisfied for the subject Plan Year or to cause such
Actual Contribution Percentage to equal the Actual Contribution Percentage of
the Highly Compensated Employee(s) with the next highest Actual Contribution
Percentage for the subject Plan Year, whichever comes first. This process is
repeated as necessary until one of the limitations set forth in Section 5A.1.1
above and the limitation set forth in Section 5A.1.2 above is satisfied for the
subject Plan Year. For each Highly Compensated Employee, his amount of
Excess Aggregate Contributions for the subject Plan Year is equal to: (1) the
total of the After-Tax Savings Contributions and Matching Contributions paid to
the Trust for such Plan Year on his behalf (determined before the application of
this paragraph (b)), less (2) the amount determined by multiplying the Highly
Compensated Employee's Actual Contribution Percentage for the subject Plan
Year (determined after the application of this paragraph (b)) by his
Compensation for such Plan Year. In no event shall the Highly Compensated
Employee's Excess Aggregate Contributions for the subject Plan Year exceed the
total of the After-Tax Savings Contributions and Matching Contributions paid to
the Trust on his behalf for such Plan Year (determined before application of
this paragraph (b)).
(c) If any Excess Aggregate Contributions are applied under
the provisions of paragraph (b) above for a subject Plan Year to an Eligible
Participant whose Actual Contribution Percentage for such Plan Year was affected
by the family member rules set forth in Section 5A.2.1 hereof, then such Excess
Aggregate Contributions shall be further applied among such Eligible Participant
and all of his Family Members, in the proportion that the sum of the Matching
Contributions and After-Tax Savings Contributions made to the Trust on behalf
of each such person for the subject Plan Year (determined before the application
of paragraph (b) above or this paragraph (c)) bears to the sum of the Matching
Contributions and After-Tax Savings Contributions made to the Trust on behalf
of all such persons for the subject Plan Year (determined before the application
of paragraph (b) above or this paragraph (c)).
5A.3.2 Excess Aggregate Contributions applicable to an
Eligible Participant for a Plan Year shall be deemed composed of certain types
of contributions made to the Plan on behalf of such Eligible Participant for
such Plan Year and shall be, together with Trust income (or loss) allocable
thereto in accordance with Section 5A.3.3 below, distributed or forfeited in the
following order of steps:
(a) Step 1: First, such Excess Aggregate Contributions
shall be deemed composed of After-Tax Savings Contributions (not including
Recharacterized Pre-Tax Savings Contributions) which are treated as Additional
Savings Contributions for the subject Plan Year. The Excess Aggregate
Contributions described in this first step shall be distributed to the Eligible
Participant;
(b) Step 2: Second, only to the extent still necessary
after the above step, such Excess Aggregate Contributions shall be deemed
composed of Recharacterized Pre-Tax Savings Contributions which are treated as
Additional Savings Contributions for the subject Plan Year. The Excess
Aggregate Contributions described in this second step shall be distributed to
the Eligible Participant;
(c) Step 3: Third, only to the extent still necessary after
the above two steps, such Excess Aggregate Contributions shall be deemed
composed of After-Tax Savings Contributions (not including Recharacterized
Pre-Tax Savings Contributions) which are treated as Basic Savings Contributions
for the subject Plan Year and the corresponding amount of Matching
Contributions for such Plan Year which are made or allocated by reason of or
with respect to such After-Tax Savings Contributions. The Excess Aggregate
Contributions described in this third step which are deemed to be composed of
After-Tax Savings Contributions shall be distributed to the Eligible
Participant. The Excess Aggregate Contributions described in this third step
which are deemed to be composed of Matching Contributions shall, pursuant to
Section 411(a)(3)(G) of the Code and Treas. Reg. Section 1.411(d)-4(b)(7), be
forfeited as of the day the other Excess Aggregate Contributions described in
this third step are distributed to the Eligible Participant (and be reallocated
to Accounts of other Participants in accordance with later provisions of the
Plan);
(d) Step 4: Fourth, only to the extent still necessary
after the above three steps, such Excess Aggregate Contributions shall be deemed
composed of Recharacterized Pre-Tax Savings Contributions which are treated as
Basic Savings Contributions for the subject Plan Year and the corresponding
amount of Matching Contributions for such Plan Year which are made or
allocated by reason of or with respect to such Recharacterized Pre-Tax Savings
Contributions. The Excess Aggregate Contributions described in this fourth step
which are deemed to be composed of Recharacterized Pre-Tax Savings
Contributions shall be distributed to the Eligible Participant. The Excess
Aggregate Contributions described in this fourth step which are deemed to be
composed of Matching Contributions shall, pursuant to Section 411(a)(3)(G) of
the Code and Treas. Reg. Section 1.411(d)-4(b)(7), be forfeited as of the day
the other Excess Aggregate Contributions described in this fourth step are
distributed to the Eligible Participant (and be reallocated to Accounts of other
Participants in accordance with later provisions of the Plan); and
(e) Step 5: Fifth, only to the extent still necessary after
the above four steps, such Excess Aggregate Contributions shall be deemed
composed of Matching Contributions for the subject Plan Year which were made
or allocated by reason of or with respect to Pre-Tax Savings Contributions (not
including Recharacterized Pre-Tax Savings Contributions) which are treated as
Basic Savings Contributions for such Plan Year. A portion of the Excess
Aggregate Contributions described in this fifth step, which portion is equal to
the amount of such Excess Aggregate Contributions multiplied by the vested
percentage which applies under this Plan to the portion of the Participant's
Matching Account to which such Excess Aggregate Contributions would
otherwise be allocated but for the provisions of this Section 5A, shall be
distributed to the Eligible Participant. The remaining portion of the Excess
Aggregate Contributions described in this fifth step shall be forfeited as of
the day the Committee takes the steps outlined in this Section 5A.3.2.
5A.3.3(a) Any distribution or forfeiture of Excess Aggregate
Contributions which apply to a subject Plan Year and to an Eligible Participant
under the provisions of this Section 5A.3 shall be adjusted upward for the
Trust's income allocable thereto (or downward for the Trust's loss allocable
thereto), as determined under paragraphs (b) and (c) below.
(b) For purposes hereof, the Trust's income (or loss)
allocable to any portion of the Excess Aggregate Contributions applicable to a
subject Plan Year which begins on or after January 1, 1991 and applied to an
Eligible Participant which is composed of a certain type of contribution (e.g.,
After-Tax Savings Contributions, Recharacterized Pre-Tax Savings Contributions,
or Matching Contributions) shall be equal to the product obtained by multiplying
(1) the net income (or net loss) for the subject Plan Year and for the gap
period of the Investment Fund or Funds in which such type of contribution was
invested which is allocable under Section 6.7 below to the portion of the
Participant's Accounts attributable to such type of contribution by (2) a
fraction, the numerator of which is the portion of the Excess Aggregate
Contributions otherwise being distributed to the Eligible Participant or
forfeited which is composed of such type of contribution and the denominator of
which is the total balance as of the first day of the
subject Plan Year of the portion of the Eligible Participant's Accounts
attributable to such type of contribution plus the contributions and forfeitures
allocated to such portion of the Eligible Participant's Accounts for the subject
Plan Year and for the gap period. For purposes hereof, the "gap period" refers
to the period from the end of the subject Plan Year through the last Valuation
Date for which valuations of the applicable Investment Fund or Funds have been
completed and the results of which are available to the Committee prior to the
date the applicable Excess Aggregate Contributions are being distributed or
forfeited.
(c) Also for purposes hereof, the Trust's income (or
loss) allocable to any portion of the Excess Aggregate Contributions applicable
to a subject Plan Year which begins prior to January 1, 1991 and applied to an
Eligible Participant which is composed of a certain type of contribution (e.g.,
After-Tax Savings Contributions, Recharacterized Pre-Tax Savings Contributions,
or Matching Contributions) shall be equal to the product obtained by multiplying
(1) the net income (or net loss) for the subject Plan Year of the Investment
Fund or Funds in which such type of contribution was invested which is allocable
under Section 6.7 below to the portion of the Participant's Accounts
attributable to such type of contribution by (2) a fraction, the numerator of
which is the portion of the Excess Aggregate Contributions otherwise being
distributed to the Eligible Participant or forfeited which is composed of such
type of contribution and the denominator of which is the total balance as of
the last day of the subject Plan Year (reduced by any income, and increased by
any loss, occurring during such Plan Year) of the portion of the Eligible
Participant's Accounts attributable to such type of contribution. In addition,
when such Excess Aggregate Contributions relate to a subject Plan Year which
begins prior to January 1, 1991, the net income
(or loss) allocable to such Excess Aggregate Contributions shall also
include an additional amount equal to the product obtained by multiplying 10%
of the amount of net income (or loss) determined to apply to such Excess
Aggregate Contributions under the immediately preceding sentence by the number
of whole calendar months between the end of the subject Plan Year and the date
the Excess Aggregate Contributions are paid to the Eligible Participant,
counting the month of the distribution as a whole calendar month only if such
distribution occurs after the 15th of such month.
5A.3.4 If the entire balance of the portion of an Eligible Partici-
pant's Accounts which is attributable to a certain type of contribution (e.g.,
After-Tax Savings Contributions, Recharacterized Pre-Tax Savings Contributions,
or Matching Contributions) is distributed to the Eligible Participant or
forfeited during a subject Plan Year (and no balance remains in that portion of
his Accounts at the end of such Plan Year), then such distribution or forfeiture
shall be deemed for all purposes of this Plan as a distribution or forfeiture
under this Section 5A.3 of Excess Aggregate Contributions applicable to the
Eligible Participant for the subject Plan Year (and Trust income or loss
allocable thereto) to the extent Excess Aggregate Contributions composed of such
type of contribution (and allocable Trust income or losses) would otherwise have
been required to be distributed to the Eligible Participant or forfeited under
this Section 5A.3.
5A.3.5 Notwithstanding any other provision of the Plan to the
contrary, the limitations set forth in Section 5A.1 above shall be deemed met
for any Plan Year if the Excess Aggregate Contributions for such Plan Year are
distributed or forfeited in accordance with the foregoing provisions of this
Section 5A.3.
5A.3.6 If any Excess Aggregate Contributions are distributed to the
appropriate Eligible Participants or forfeited more than 2-1/2 months after
the last day of the subject Plan Year, an excise tax shall be imposed under Code
Section 4979 on the Employer in an amount generally equal to 10% of such
Excess Aggregate Contributions (unadjusted for income or loss allocable
thereto).
5A.4 Definitions for Average Actual Contribution Percentage Limits. For
purpose of the limits set forth in this Section 5A, the following definitions
shall apply:
5A.4.1 "Average Actual Contribution Percentage" for any
Plan Year means: (1) with respect to the Highly Compensated Employees, the
average (to the nearest one-hundredth of a percent) of the Actual Contribution
Percentages of the Eligible Participants who are Highly Compensated Employees
for such Plan Year; and (2) with respect to the Non-Highly Compensated
Employees, the average (to the nearest one-hundredth of a percent) of the Actual
Contribution Percentages of the Eligible Participants who are Non-Highly
Compensated Employees for such Plan Year.
5A.4.2 "Actual Contribution Percentage" for any Plan Year
means, with respect to any person who is an Eligible Participant for such Plan
Year, the ratio, expressed as a percentage to the nearest one-hundredth of a
percent, of the Matching Contributions and After-Tax Savings Contributions
(including the Recharacterized Pre-Tax Savings Contributions) made on behalf of
the Eligible Participant for such Plan Year to the Compensation of the Eligible
Participant for the entire Plan Year (regardless of whether he is a Participant
for the entire Plan Year or for only part but not all of such Plan Year). The
Actual Contribution Percentage of a person who is an Eligible Participant for
such Plan Year but who does not have any Matching Contributions or After-Tax
Savings Contributions (including any Recharacterized Pre-Tax Savings
Contributions) made on his behalf for such Plan Year is 0%.
5A.4.3 The "Aggregate Limit" for any Plan Year means the
greater of the sums set forth in paragraphs (a) and (b) below:
(a) The sum of: (1) 125% of the greater of the Average
Actual Deferral Percentage of the Non-Highly Compensated Employees for such
Plan Year or the Average Actual Contribution Percentage of the Non-Highly
Compensated Employees for such Plan Year; and (2) the lesser of (i) 200% of the
lesser of the Average Actual Deferral Percentage of the Non-Highly Compensated
Employees for such Plan Year or the Average Actual Contribution Percentage of
the Non-Highly Compensated Employees for such Plan Year or (ii) 2% plus the
lesser of the Average Actual Deferral Percentage of the Non-Highly Compensated
Employees for such Plan Year or the Average Actual Contribution Percentage of
the Non-Highly Compensated Employees for such Plan Year.
(b) The sum of: (1) 125% of the lesser of the Average
Actual Deferral Percentage of the Non-Highly Compensated Employees for such
Plan Year or the Average Actual Contribution Percentage of the Non-Highly
Compensated Employees for such Plan Year; and (2) the lesser of (i) 200% of the
greater of the Average Actual Deferral Percentage of the Non-Highly
Compensated Employees for such Plan Year or the Average Actual Contribution
Percentage of the Non-Highly Compensated Employees for such Plan Year or (ii)
2% plus the greater of the Average Actual Deferral Percentage of the Non-Highly
Compensated Employees for such Plan Year or the Average Actual Contribution
Percentage of the Non-Highly Compensated Employees for such Plan Year.
5A.4.4 "Compensation" means, with respect to any
Participant, his Compensation as defined in Section 1.6 above; except that, for
purposes of this Section 5A, (1) paragraph (d) of Section 1.6 above shall not
apply for the Plan Year beginning on January 1, 1989 and (2) lump sum
severance payments and lump sum payments in settlement of disputes involving
termination of employment (not including severance pay paid by reason of or
approved by an order of a court) shall not be excluded from Compensation by
reason of paragraph (b) of Section 1.6 above for the Plan Years which begin on
January 1, 1992 and January 1, 1993.
5A.4.5 "Average Actual Deferrage Percentage," "Actual
Deferral Percentage," and "Eligible Participant" shall have the same meanings as
are set forth in Section 4A.4 above, and "Excess Contributions" shall have the
same meaning as is set forth in Section 4A.3 above.
5A.5 Restructuring Into Employee Groups for Pre-1992 Plan Years.
Effective for any Plan Year beginning prior to January 1, 1992, and as permitted
in Treas. Reg. Section 1.401(m)-1(g)(5)(ii), the Committee may elect in its
discretion to treat the Plan as consisting of two or more component plans for
purposes of the rules of this Section 5A (and all other requirements of Sections
401(a)(4) and 401(k) of the Code). If the Committee restructures the Plan into
two or more component plans, the rules of this Section 5A (as well as the rules
of Section 4A above and any other requirements mandated under Section
401(a)(4) of the Code) shall apply to each component plan (and to the Employees
included in each such plan) separately and without regard to any other component
plan. If the Committee decides for any Plan Year to restructure the Plan into
two or more component plans, the following conditions shall apply:
5A.5.1 Each component plan must apply to a separate group
of Employees and must meet the coverage requirements of Section 410(b) of the
Code as if it were a separate plan of the Employer (except that the permissive
aggregation rules of Treas. Reg. Section 1.410(b)-7(d) shall not be available).
For this purpose, the Employees included in a separate group of Employees must
share some common attribute, such as, for example, being employed at the same
division or being hired prior to or after a specified date. Each Employee is
permitted to be included in only one group of Employees and be covered by or
eligible for only one component plan. Each component plan shall be deemed to
consist of all of the allocations, accruals, and other benefits, rights, and
features provided to the group of Employees covered by or eligible for such
component plan.
5A.5.2 Any residual parts of the Plan which remain after it
has been restructured by the Committee into component plans each of which
applies to a group of Employees shall also be treated as a component plan.
5A.5.3 Any part of the Plan which is treated as a component
plan for any Plan Year may not be treated as part of another component plan for
the same Plan Year. However, the Committee may decide to change the basis
on which component plans are determined from Plan Year to Plan Year or to use
restructuring for one Plan Year but not for another.
5A.6 Disaggregating Portions of Plan For Post-1991 Plan Years.
Effective for any Plan Year beginning on or after January 1, 1992, the
provisions of Sections 5A.1 through 5A.4 above shall be applied only for the
portion of this Plan which covers Participants who are not collectively
bargained employees and as if such portion were a separate plan. For purposes
hereof, a "collectively bargained employee" is an Employee who is included in a
unit of employees covered by a collective bargaining agreement between employee
representatives and the Employer, provided retirement benefits were the subject
of good faith bargaining between such employee representatives and the Employer.
SECTION 6
ACCOUNTS AND THEIR ALLOCATIONS AND VESTING
6.1 Savings Accounts and Allocation of Savings Contributions Thereto.
6.1.1 The Committee shall establish and maintain a separate
bookkeeping account, called herein a "Savings Account," for each Participant.
Except as otherwise provided in the Plan, as of the last day of each Valuation
Period which ends after the Effective Amendment Date the Committee shall
allocate to a Participant's Savings Account all Savings Contributions made to
the Trust on behalf of the Participant which relate to pay days which fall in
such Valuation Period.
6.1.2 In addition, any and all amounts which were (1) attributable
to contributions made under the Plan by or at the election of a Participant (or
attributable to contributions made under any other plan qualified under Section
401(a) of the Code by or at the election of a Participant which merged into this
Plan prior to the Effective Amendment Date) and (2) credited to the
Participant's account under this Plan before the Effective Amendment Date shall
be deemed to have been allocated to the Participant's Savings Account at the
time they were actually credited to the Participant's account under the Plan.
Further, any and all amounts transferred to this Plan on behalf of a
Participant from another plan qualified under Section 401(a) of the Code on or
after the Effective Amendment Date (including amounts transferred to this Plan
under the provisions of Sections 16 and 17 below) shall, to the extent such
amounts reflect amounts which were contributed to such other plan by or at the
election of the Participant, be deemed to be allocated to the Participant's
Savings Account as of the first Valuation Date which coincides with or
follows such transfer.
6.1.3 The Committee shall keep records, to the extent necessary to
administer this Plan properly under the other provisions of the Plan and under
the applicable provisions of the Code, showing the portion of a Participant's
Savings Account which is attributable to each different type of contribution
reflected in it, e.g., Pre-Tax Savings Contributions or After-Tax Savings
Contributions. In this regard, to the extent any amounts allocated to a
Participant's Savings Account under this Plan reflect contributions made under
any other plan at the election of the Participant, such amounts shall be deemed
to reflect Pre-Tax Savings Contributions for purposes of this Plan to the extent
such amounts were made under such other plan on a "pre-tax" basis (i.e., prior
to the Participant being deemed in receipt of such amounts for Federal income
tax purposes) and shall be deemed to reflect After-Tax Savings Contributions for
purposes of this Plan to the extent such amounts were made under such other plan
on an "after-tax" basis (i.e., after the Participant was deemed in receipt of
such amounts for Federal income tax purposes). Further, to the extent any
amounts allocated to a Participant's Savings Account under this Plan reflect
contributions made under any other plan at the election of the Participant, such
amounts shall be deemed to reflect Basic Savings Contributions for purposes of
this Plan to the extent employer matching contributions were made by reason of
such amounts under such other plan and shall be deemed to reflect Additional
Savings Contributions for purposes of this Plan to the extent no such employer
matching contributions were made by reason of such amounts under such other
plan.
6.2 Matching Accounts and Allocation of Matching Contributions
Thereto.
6.2.1 The Committee shall establish and maintain a separate
bookkeeping account, called herein a "Matching Account," for each Participant.
Except as otherwise provided in the Plan, as of the last day of each Plan Year
which ends after the Effective Amendment Date the Committee shall allocate all
Matching Contributions made to the Trust for such Plan Year among the
Matching Accounts of all Participants who both are employed on the last day of
such Plan Year and made no withdrawal of Basic Savings Contributions from
their Saving Accounts during such Plan Year, in the proportion that the Basic
Savings Contributions made for such Plan Year by or for each such Participant
bears to the total Basic Savings Contributions made for such Plan Year by or for
all such Participants.
6.2.2 In addition, any and all amounts which were (1) attributable
to contributions made by the Employer under the prior matching contribution and
employee stock ownership portions of this Plan for a Participant (or
attributable to contributions made by an employer under the prior matching
contribution portion of any other plan qualified under Section 401(a) of the
Code which merged into this Plan prior to the Effective Amendment Date) and (2)
credited to the Participant's account under the Plan immediately before the
Effective Amendment Date shall be deemed to have been allocated to the
Participant's Matching Account at the time they were actually credited to the
Participant's account under this Plan. Further, any and all amounts transferred
to this Plan on behalf of a Participant from another plan qualified under
Section 401(a) of the Code on or after the Effective Amendment Date (including
amounts transferred to this Plan under the provisions of Sections 16 and 17
below) shall, to the extent such amounts reflect amounts which were contributed
under the matching contribution portion of such other plan, be deemed to be
allocated to the Participant's Matching Account as of the first Valuation Date
which coincides with or follows such transfer.
6.2.3 The Committee shall keep records, to the extent necessary to
administer this Plan properly under the other provisions of the Plan and under
the applicable provisions of the Code, showing the portion of a Participant's
Matching Account which is attributable to each different type of contribution
reflected in it.
6.2.4 Notwithstanding any other provision of the Plan to the
contrary, the aggregate Compensation for any Plan Year beginning prior to
January 1, 1994 of any Participant who is a Top-Paid Highly Compensated
Employee for such Plan Year and his Immediate Family Members for such Plan
Year shall not in any event be taken into account under the Plan in determining
the amount of Matching Contributions to be contributed for such Plan Year (or
in allocating such contributions) to the extent such amount exceeds $200,000 (or
any higher amount to which this figure is adjusted under Section 401(a)(17) of
the Code by the Secretary of the Treasury or his delegate for the calendar year
in which such Plan Year begins). Further, and again notwithstanding any other
provisions of the Plan to the contrary, the aggregate Compensation for any Plan
Year beginning on or after January 1, 1994 of any Participant who is a Top-Paid
Highly Compensated Employee for such Plan Year and his Immediate Family
Members for such Plan Year shall not in any event be taken into account under
the Plan in determining the amount of Matching Contributions to be contributed
for such Plan Year (or in allocating such contributions) to the extent such
amount exceeds $150,000 (or any higher amount to which this figure is adjusted
under Section 401(a)(17) of the Code by the Secretary of the Treasury or his
delegate for the calendar year in which such Plan Year begins). If either of
the immediately preceding two sentences causes the amount of the aggregate
Compensation for such Plan Year of such Participant and such Immediate Family
Members of his which otherwise would be taken into account under the Plan for
such purposes to be reduced, the amount of such reduction shall be applied among
such Participant and such Immediate Family Members of his, in the proportion
that the amount of Compensation for such Plan Year of each such person included
in such family group which otherwise would be taken into account for such
purposes in the absence of this provision bears to the aggregate Compensation
for such Plan Year of all such persons included in such family group which
otherwise would be taken into consideration for such purposes in the absence of
this provision.
6.3 Retirement Income Accounts. The Committee shall establish and
maintain a separate bookkeeping account, called herein a "Retirement Income
Account," for each Participant for whom amounts are allocable to such account
under the provisions of this Section 6.3. Any and all amounts which were (1)
attributable to contributions made by the Employer prior to January 1, 1984
under the prior retirement income portion (i.e., the regular profit sharing
contribution portion) of the Plan (or attributable to contributions made by an
employer prior to the Effective Amendment Date under a regular profit sharing
portion of any other plan qualified under Section 401(a) of the Code which
merged into this Plan prior to the Effective Amendment Date) and (2) credited to
the Participant's account under the Plan immediately prior to the Effective
Amendment Date shall be deemed to have been allocated to the Participant's
Retirement Income Account at the time they were actually credited to the
Participant's account under this Plan. Further, any and all amounts transferred
to this Plan on behalf of a Participant from another plan qualified under
Section 401(a) of the Code on or after the Effective Amendment Date (including
amounts transferred to this Plan under the provisions of Section 17 below)
shall, to the extent such amounts reflect amounts which were contributed under a
regular profit sharing portion of such other plan, be deemed to be allocated to
the Participant's Retirement Income Account as of the first Valuation Date which
coincides with or follows such transfer. For purposes hereof, a "regular profit
sharing portion" of a plan refers to the part of any profit sharing plan which
is not attributable to contributions made by or at the election of a participant
or to matching contributions made with respect to such participant-elected
contributions. The Committee shall keep records, to the extent necessary to
administer this Plan properly under the other provisions of the Plan and under
the applicable provisions of the Code, showing the portion of a Participant's
Retirement Income Account which is attributable to
contributions of each different plan reflected in it.
6.4 Allocation of Forfeitures. Any forfeitures from Accounts arising
under any of the provisions of the Plan shall be allocated to other Accounts
pursuant to Section 8.4 below.
6.5 Maximum Annual Addition to Accounts. A Participant's Accounts
held under the Plan shall be subject to the maximum annual addition limits of
Section 6A below.
6.6 Investment of Accounts. A Participant's Accounts held under the
Plan shall be invested in accordance with the provisions of Sections 6B and 6C
below. Section 6B below provides rules as to the investment of Accounts
beginning March 31, 1994, while Section 6C below provides the rules as to the
investment of accounts prior to March 31, 1994.
6.7 Allocation of Income and Losses of Investment Funds to Accounts.
6.7.1 Each Investment Fund shall be valued at its fair market
value as of each Valuation Date by the Trustee (or any other party designated
for this purpose by the Committee). Each Account which has amounts allocable
thereto invested at least in part in any such Investment Fund shall be credited
with the income of such Investment Fund, and charged with its losses, for each
Valuation Period, in the proportion that the value of each Account to the extent
invested in such Investment Fund at the start of the subject Valuation Period
(and not withdrawn, forfeited, or distributed therefrom during such Valuation
Period) bears to the total value of all Accounts to the extent invested in such
Investment Fund at the start of such Valuation Period (and not withdrawn,
forfeited, or distributed therefrom during such Valuation Period). For these
purposes, neither ontributions made to the Trust, increases or decreases in
a fund caused solely by reason of a Participant's changing the investment of
amounts allocated to his accounts, nor withdrawal or distribution payments
shall be considered income or losses of any such Investment Fund hereunder.
For purposes of the Plan, any income of any such Investment Fund is deemed to
include all income and realized and unrealized gains of such Investment Fund;
similarly, for purposes of this Plan, any losses of an Investment Fund are
deemed to include all expenses and realized and unrealized losses of the
Investment Fund.
6.7.2 As is indicated before in the Plan, the Committee shall keep
records, to the extent necessary to administer this Plan properly under the
other provisions of this Plan and under the applicable provisions of the Code,
showing he portion of each Account which is attributable to each different type
of contribution or to contributions under each different plan applicable to such
Account. In general, a pro rata portion of any income or losses of an
Investment Fund which is allocated under the foregoing provisions of this
Section 6.7 to an Account shall, when appropriate, be further allocated to any
portion of such Account for which a separate record is being maintained by the
Committee. As a result, any reference in the provisions of the Plan to a
portion of a Participant's Account which is attributable to a specific type of
contribution or to contributions previously made under a specific plan shall be
deemed to be referring to the balance of the portion of such Account which
reflects not only such specific type of contribution or contributions previously
made under such specific plan allocated to such Account but also the income or
losses allocated to such Account by reason of such specific type of contribution
or contributions previously made under such specific plan.
6.7.3 Further, when the investment of two or more Accounts in
the available Investment Funds is determined on an aggregate basis by a Parti-
cipant under later provisions of the Plan, the Committee shall keep records,
to the extent necessary to administer this Plan under the applicable provisions
of this Plan and under the applicable provisions of the Code, showing the
interest of each such Account in each such Investment Fund. In general, when
the investment of two or more Accounts in the available Investment Funds is
determined on an aggregate basis, each such Account will be considered to be
invested in a pro rata portion of each different Investment Fund investment made
on such aggregate basis.
6.8 Deduction of Benefit Payments, Forfeitures, and Withdrawals.
Any benefit payment, forfeiture, or withdrawal made from the balance of an
Account of a Participant under the provisions of the Plan shall be deducted, as
of the date of such payment, forfeiture, or withdrawal, from such Account. If
such Account is invested in more than one Investment Fund and such payment,
forfeiture, or withdrawal is of less than the entire balance in such Account,
the value of the investment of such Account among the Investment Funds will be
reduced on a pro-rata basis (i.e., in the proportion that the value of such
Account invested in each Investment Fund as of the latest Valuation Date which
coincides with or precedes the date of the payment, forfeiture, or withdrawal
bears to the total value of such Account invested in all such Investment Funds
as of such Valuation Date) to reflect the amount of such payment, forfeiture, or
withdrawal.
6.9 Account Balances. For purposes of the Plan, the balance or value
of any Account as of any specific date shall be deemed to be the net sum of
amounts allocated or credited to, or charged or deducted from, such Account on
or prior to such date under the provisions of the Plan. No Participant,
however, shall acquire any right or interest in a specific asset of the Trust
merely as a result of any allocation provided for in the Plan, other than as
expressly set forth in the Plan.
6.10 Vested Rights. A Participant shall be deemed vested in (i.e., have
a nonforfeitable right to) his Accounts (and the balances therein) only in
accordance with the following provisions:
6.10.1 A Participant is fully vested at all times in his Savings
Account.
6.10.2 (a) Except as is otherwise provided herein, a Participant
is fully vested at all times in any Matching Account of his.
(b) A Participant who fails to complete at least one Hour
of Service on or after January 1, 1987, however, is not vested at all in any
Matching Account of his unless he is credited with at least three years of
Vesting Service and is fully vested in such Account if he is so credited with at
least three years of Vesting Service.
(c) Notwithstanding the provisions of paragraph (b) above,
a Participant who fails to complete at least one Hour of Service on or after
January 1, 1987 is still fully vested in any Matching Account of his if he
attained age 55, incurred a total disability (as defined in Section 7.2.3
below), or died while, in any such case, still an Employee.
(d) Also notwithstanding the provisions of paragraph (b) above,
a Participant who fails to complete at least one Hour of Service on or after
January 1, 1987 is still fully vested in any portion of his Matching Account
which is attributable to prior contributions made on his behalf under the prior
employee stock ownership plan portion of this Plan.
6.10.3(a) Except as otherwise provided herein, a Participant
is fully vested at all times in any Retirement Income Account of his.
(b) A Participant who fails to complete at least one Hour
of Service on or after January 1, 1988, however, has a vested interest in any
Retirement Income Account of his as of any specific date equal to a percentage
(called herein a "vested percentage") of such Account, determined in accordance
with the following schedule (based upon his years of Vesting Service completed
to the subject date):
Years of Vesting Service Vested Percentage
Less than 5 0%
5 but less than 6 25%
6 but less than 7 40%
7 but less than 8 55%
8 but less than 9 70%
9 but less than 10 85%
10 or more 100%
(c) Notwithstanding the provisions of paragraph (b) above,
a Participant who fails to complete at least one Hour of Service on or after
January 1, 1988 is still fully vested in any Retirement Income Account of his if
he attained age 55, incurred a total disability (as defined in Section 7.2.3
below), or died while, in any such case, still an Employee.
6.11 Voting of Federated Common Shares Held in Investment Fund.
6.11.1 Effective January 1, 1995, any common shares of
Federated which are held in the Investment Fund described in Section 6B below
as Fund D ("Fund D") shall be voted, on any matter on which such common
shares have a vote, in the manner directed by the Participants pursuant to this
Section 6.11.
6.11.2 Specifically, each Participant who has any portion of his
Account invested in Fund D as of the record date used by Federated to determine
the Federated common shares eligible to vote on any matter may direct the Plan
as how a number of the Federated common shares held in Fund D as of such
record date are to be voted on such matter. The number of shares subject to the
Participant's direction shall be equal to the product produced by multiplying
the total number of Federated common shares held in Fund D as of such record
date by a fraction. Such fraction shall have a numerator equal to the value of
the portion of the Participant's Accounts which are invested in Fund D
determined as of the date of the latest valuation of Fund D which has been
completed prior to such record date and the results of which are available on
such record date to the Committee and a denominator equal to the total value of
Fund D as of such valuation date. If a Participant fails to instruct the Plan
on how to vote on any matter the number of Federated common shares held in Fund
D he is entitled to direct, such shares will not be voted on such matter.
6.11.3 Before any annual or special meeting of Federated share-
holders on or after January 1, 1995, a Plan representative, under procedures
developed by the Committee, will send each Participant who is entitled to direct
the vote of any Federated common shares held in Fund D on a matter being voted
on at such meeting a form allowing the Participant to instruct the Plan as to
the vote of such shares on such matter.
SECTION 6A
MAXIMUM ANNUAL ADDITION LIMITS
6A.1 Maximum Annual Addition Limit--Separate Limitation as to This
Plan.
6A.1.1 General Rules. Subject to the other provisions of
this Section 6A.1 but notwithstanding any other provision of the Plan to the
contrary, in no event shall the annual addition to a Participant's accounts for
any limitation year exceed the lesser of:
(a) $30,000 (or, if greater, 1/4 of the dollar limitation
for defined benefit plans in effect under Section 415(b)(1)(A) of the Code for
such limitation year); or
(b) 25% of the Participant's compensation for such
limitation year.
The part of the annual addition attributable to contributions to a defined
benefit plan for medical benefits under Code Section 401(h) or to contributions
to a welfare benefit fund for funding for post-retirement medical benefits under
Code Section 419A(d) shall not be applied against the limit set forth in
paragraph (b) above, however.
6A.1.2 Necessary Terms. For purposes of the rules set
forth in this Section 6A.1, the following terms shall apply:
(a) The "annual addition" to a Participant's accounts for
a limitation year for purposes of this Plan shall be determined under the
provisions of the Code (and mainly Code Section 415(c)(2)) in effect for such
limitation year. In general, for any limitation year beginning after December
31, 1986, the annual addition is generally the sum of employer contributions,
employee contributions, and forfeitures allocated to the Participant's accounts
for such limitation year under all defined contribution plans (as defined in
Code Section 414(i)) maintained by the Employer or any Affiliated Employers,
plus any contributions made on behalf of the Participant for such limitation
year under Code Section 415(1) or Code Section 419A(d) (e.g., contributions to a
defined benefit plan for medical benefits or contributions on behalf of a key
employee to a welfare benefit fund for funding for post-retirement medical
benefits) under defined benefit plans or welfare benefit funds maintained by the
Employer or any Affiliated Employers. (It is noted that for any limitation year
beginning before January 1, 1987, not all employee contributions were included
in the annual addition; instead, only the lesser of the amount of the employee
contributions made for such limitation year in excess of 6% of the Participant's
annual compensation for such limitation year or one-half of the employee
contributions made for such limitation year were counted as part of the annual
addition. This determination need not be recalculated for any such pre-1987
limitation year.)
(b) A Participant's "compensation" shall, for purposes
of the restrictions of Section 6A.1 hereof, refer to his Compensation as defined
in Section 1.6 above; except that, for purposes of this Section 6A.1, paragraph
(c) of Section 1.6 above shall not apply.
(c) The "limitation year" for purposes of the restrictions
under Section 6A.1 above shall be the Plan Year.
6A.1.3 Excess Annual Additions. If, as a result of the
allocation of forfeitures, a reasonable error in estimating a Participant's
compensation for a limitation year, a reasonable error in determining the amount
of any Pre-Tax Savings Contributions that may be made with respect to a
Participant under the limits of Section 415 of the Code, or under other limited
facts and circumstances which the Commissioner of Internal Revenue finds justify
the availability of the rules described in this Section 6A.1.3, the annual
addition for a Participant with respect to any limitation year would otherwise
cause the limits of Section 6A.1.1 above to be exceeded, such excess amount
shall not be deemed an annual addition in such limitation year for such
Participant and shall instead be adjusted under this Plan as follows:
(a) First, to the extent necessary to eliminate the excess
portion of the annual addition, the amount of the Matching Contributions made
or the Participant for the applicable limitation year and the forfeitures
allocated to the Participant's Matching Account for such limitation year (and
Plan earnings attributable to such Matching Contributions and forfeitures, which
shall be determined by the same method, or by a substantially similar method to
the method, used to determine Plan earnings attributable to Excess Aggregate
Contributions under Section 5A.3.3 above for the applicable limitation year)
shall be allocated to Accounts of other Participants in such a manner that they
are used in place of and to reduce the Employer contributions to the Plan at the
next earliest opportunity in succeeding limitation years. Such reallocated
Matching Contributions shall not, notwithstanding any other provision of the
Plan to the contrary, be taken into account as Matching Contributions of the
Participant in determining if the average actual contribution percentage limits
set forth in Section 5A.1 above (and Section 401(m)(2) of the Code) are met.
(b) Second, to the extent still necessary to eliminate the
excess portion of the annual addition, the amount of the Participant's After-Tax
Savings Contributions for the applicable limitation year which are designated by
the Participant as Additional Savings Contributions (and Plan earnings
attributable thereto, which shall be determined by the same method, or by a
substantially similar method to the method, used to determine Plan earnings
attributable to Excess Aggregate Contributions under Section 5A.3.3 above for
the applicable limitation year) shall be returned to the Participant. Such
returned After-Tax Savings Contributions shall not, notwithstanding any other
provision of the Plan to the contrary, be taken into account as After-Tax
Savings Contributions of the Participant in determining if the average actual
contribution percentage limits set forth in Section 5A.1 above (and Section
401(m)(2) of the Code) are met.
(c) Third, to the extent still necessary to eliminate the
excess portion of the annual addition, the amount of the Participant's Pre-Tax
Savings Contributions for the applicable limitation year which were designated
by the Participant as Additional Savings Contributions (and Plan earnings
attributable thereto, which shall be determined by the same method, or a
substantially similar method to the method, used to determine Plan earnings
attributable to Excess Contributions under Section 4A.3.2 above for the
applicable limitation year) shall be returned to the Participant. Such returned
Pre-Tax Savings Contributions shall not, notwithstanding any other provision of
the Plan to the contrary, be taken into account as Pre-Tax Savings Contributions
of the Participant in determining if the average actual
deferral percentage limits set forth in Section 4A.1 above (and
Section 401(k)(3) of the Code), and the dollar limit on Pre-Tax Savings
Contributions set forth in Section 1.24 above (and Section 402(g) of the Code),
are met.
(d) Fourth, to the extent still necessary to eliminate the
excess portion of the annual addition, the amount of After-Tax Savings
Contributions for the applicable limitation year which are designated by the
Participant as Basic Savings Contributions (and Plan earnings attributable
thereto, which shall be determined by the same method, or by a substantially
similar method to the method, used to determine Plan earnings attributable to
Excess Aggregate Contributions under Section 5A.3.3 above for the applicable
limitation year) shall be returned to the Participant. Such returned After-Tax
Savings Contributions shall not, notwithstanding any other provision of the Plan
to the contrary, be taken into account as After-Tax Savings Contributions of the
Participant in determining if the average actual contribution percentage limits
set forth in Section 5A.1 above (and Section 401(m)(2) of the Code) are met.
(e) Finally, to the extent still necessary to eliminate the
excess portion of the annual addition, the Participant's Pre-Tax Savings
Contributions for the applicable limitation year which are designated by the
Participant as Basic Savings Contributions (and Plan earnings attributable
thereto, which shall be determined by the same method, or by a substantially
similar method to the method, used to determine Plan earnings attributable to
Excess Contributions under Section 4A.3.2 above for the applicable limitation
year) shall be returned to the Participant. Such returned Pre-Tax Savings
Contributions shall not, notwithstanding any other provision of the Plan to the
contrary, be taken into account as Pre-Tax Savings Contributions of the
Participant in determining if the average actual deferral percentage limits set
forth in Section 4A.1 above (and Section 401(k)(3) of the Code), and the dollar
limit on Pre-Tax Savings Contributions set forth in Section 1.24 above (and
Section 402(g) of the Code), are met.
Any contributions which are to be used in place of and to reduce future Employer
contributions to the Plan shall be held in a suspense account until being able
to be so used. No Plan income or losses shall be allocated to such suspense
account. Also, while any suspense account exists, the Employer shall make
further contributions to the Plan for any succeeding limitation year only if the
amounts held in such suspense account shall be able to be allocated to
Participants' Accounts for such limitation year.
6A.1.4 Combining of Plans. If any other defined contribution
plans (as defined in Section 414(i) of the Code) in addition to this Plan are
maintained by the Employer or any Affiliated Employers, then the limitations set
forth in this Section 6A.1 shall be applied as if this Plan and such other
defined contribution plans are a single plan. If any reduction or adjustment in
a Participant's annual addition is required by this Section 6A.1, such reduction
or adjustment shall when necessary be made to the extent possible under any of
such other defined contribution plans in which a portion of the annual addition
was allocated to the Participant's account as of a date in the applicable
limitation year which is later than the latest date in such year as of which any
portion of the annual addition was allocated to the Participant's account under
this Plan (provided such other plan or plans provide for such reduction or
adjustment in such situation). To the extent still necessary, such reduction or
adjustment shall be made under this Plan.
6A.2 Maximum Annual Addition Limit--Combined Limitation for This
Plan and Other Defined Benefit Plans.
6A.2.1 General Rule. Subject to the other provisions of this Section
6A.2 but notwithstanding any other provision of this Plan to the contrary, if
a Participant in this Plan also participates in one or more defined benefit
plans (as defined in Section 414(j) of the Code) which are maintained by the
Employer or the Affiliated Employers, then in no event shall the sum of such
Participant's defined benefit plan fraction and defined contribution plan
fraction for any limitation year exceed 1.0. If and to the extent necessary,
the Participant's retirement benefits that are projected or payable under the
defined benefit plan or plans shall be reduced or frozen so that this limitation
is not exceeded (provided such defined benefit plan or plans provide for such
reduction or freezing of his retirement benefits in such situation).
If this limitation is still exceeded even after such reduction or freezing
of the Participant's retirement benefits, then the annual addition to the
Participant's Accounts under this Plan shall be reduced to the additional
extent necessary so that the limitation is not exceeded. Such reduction
shall, to the extent necessary, be made in the same manner as is described in
Section 6A.1.3 above.
6A.2.2 Defined Benefit Plan Fraction. For purposes of this Section
6A.2, a Participant's "defined benefit plan fraction" for limitation
year is a fraction:
(a) The numerator of which is the Participant's projected
annual benefit under all of the defined benefit plans maintained by the Employer
and the Affiliated Employers (determined as of the close of the subject
limitation year and including any such plans whether or not terminated); and
(b) The denominator of which is the lesser of (1) 1.25
multiplied by the dollar limitation in effect under Code Section 415(b)(1)(A)
for such limitation year or (2) 1.4 multiplied by the amount which may be taken
into account for the Participant under Code Section 415(b)(1)(B) by the close of
such limitation year (i.e., 1.4 multiplied by 100% of his average annual
compensation for his high three years). If a Participant's current accrued
benefit as of the first day of the limitation year beginning on January 1, 1987
exceeds the dollar limitation in effect under Code Section 415(b)(1)(A) for any
limitation year, however, then the dollar limitation referred to in clause (1)
above shall be deemed to be not less than such current accrued benefit. For
purposes hereof, the Participant's "current accrued benefit" means his accrued
benefit when expressed as an annual benefit and as determined under such defined
benefit plans as of the close of the last limitation year beginning before
January 1, 1987 (but disregarding any change in the terms and conditions of such
plans after May 5, 1986 and any cost of living adjustment occurring after May 5,
1986).
6A.2.3 Defined Contribution Plan Fraction. For purposes of this
Section 6A.2, a Participant's "defined contribution plan fraction" for any
limitation year is a fraction:
(a) The numerator of which is the sum of all of the annual
additions to the Participant's accounts under this Plan and all other defined
contribution plans maintained by the Employer and the Affiliated Employers
(whether or not terminated) which have been made as of the close of the subject
limitation year (including annual additions made in prior limitation years);
and
(b) The denominator of which is the sum of the lesser of
the following amounts determined for the subject limitation year prior
limitation year in which the Participant performed service for the Employer or
an Affiliated Employer: (1) 1.25 multiplied by the dollar limitation in effect
under Code Section 415(c)(1)(A) for the applicable limitation year (determined
without regard to Code Section 415(c)(6)), or (2) 1.4 multiplied by the amount
which may be taken into account for the Participant under Code Section
415(c)(1)(B) for the applicable limitation year. (In general, for limitation
years beginning after December 31, 1986, the dollar limitation in effect under
Code Section 415(c)(1)(A) for a limitation year is the greater of $30,000 or 1/4
of the dollar limitation in effect under Code Section 415(b)(1)(A) for such
limitation year, and the amount which may be taken into account under Code
Section 415(c)(1)(B) for a limitation year is 25% of the Participant's
compensation for such limitation year.)
6A.2.4 Other Necessary Terms. For purposes of the rules
set forth in this Section 6A.2, the following terms shall apply:
(a) A Participant's "projected annual benefit" as of the
close of any limitation year means the annual benefit that the Participant would
be entitled to under all of the defined benefit plans maintained by the Employer
and the Affiliated Employers if (1) the Participant continued in employment with
this current employer on the same basis as exists as of the close of the subject
imitation year until attaining his Normal Retirement Age (or, if he has already
attained such age by the close of the subject limitation year, he immediately
terminated his employment), (2) the Participant's annual compensation for the
subject limitation year remains the same each later limitation year until he
terminates employment, and (3) all other relevant factors used to determine
benefits under such plans for the subject limitation year remain constant for
all future limitation years.
(b) A Participant's "annual benefit" means a benefit
payable in the form of a single life annuity.
(c) A Participant's "annual addition," his "compensation,"
and the "limitation year" shall all have the same meanings as are
given to those terms in Section 6A.1 above.
6A.2.5 Adjustment of Defined Contribution Plan Fraction.
If necessary, an amount shall be subtracted from the numerator of the defined
contribution plan fraction applicable to a Participant in accordance with
regulations prescribed by the Secretary of the Treasury or his delegate so that
the sum of the Participant's defined benefit plan fraction and defined
contribution plan fraction computed as of the end of the last limitation year
beginning before January 1, 1987 does not exceed 1.0 for such limitation year.
6A.2.6 Combining of Plans. If any other defined contirbutions
plans (as defined in Section 414(i) of the Code) in addition to this Plan
are maintained by the Employer or any Affiliated Employers, then the limitation
set forth in this Section 6A.2 shall be applied as if this Plan and such other
defined contribution plans are a single plan. If any reduction or adjustment in
a Participant's annual addition is required by this Section 6A.2, such reduction
or adjustment shall be made to the extent possible under any of such other
defined contribution plan or plans in which a portion of the annual addition was
allocated to the Participant's account as of a date in the applicable limitation
year which is later than the latest date in such year as of which any portion of
the annual addition was allocated to the Participant's account under this Plan
(provided such other plan or plans provide for such reduction or adjustment in
such situation).
To the extent still necessary, such reduction or adjustment shall be made under
this Plan.
6A.2.7 Regulations. Certain of the foregoing provisions of this
Section 6A.2 refer to regulations prescribed by the Secretary of the Treasury
or his delegate. Prior to the issuance of any such regulation, the Plan may be
construed in accordance with any other notice provided by the Internal Revenue
Service which provides guidance as to the matter with which such regulation
shall be concerned.
SECTION 6B
INVESTMENT OF ACCOUNTS ON AND
AFTER MARCH 31, 1994
6B.1 General Rules for Investment of Accounts.
6B.1.1 All of a Participant's Accounts, except for any
portion of his Accounts which is referred to in Section 6B.2 below, shall be
invested on and after March 31, 1994 in the manner provided under and in
accordance with the provisions of Section 6B.1.2 below. For purposes of the
following provisions of this Section 6B.1, any references to a Participant's
"Accounts" refers to all portions of his Accounts other than for the portion
referred to in Section 6B.2 below.
6B.1.2(a) Each Participant may, effective as of the day next following
each Election Date, elect to invest when made the Participant's Savings
Contributions made to the Plan on or after the day next following such Election
Date (his "future Savings Contributions") in 1% increments among any or all of
Funds A, B, C, and D; except that the Participant may not elect that more than
25% of his future Savings Contributions will be invested in Fund D. If the
Participant never makes any such election with respect to any Election Date as
to the investment of his future Savings Contributions, then he shall be deemed
to have elected to invest his future Savings Contributions in Fund A until he
changes such election under this Section 6B.1.2.
(b) Any Matching Contributions made to the Plan on or
after March 31, 1994 and allocable to a Participant's Accounts shall be invested
when made in Fund D.
(c) Further, each Participant may, effective as of each Election
Date, elect to change the investment of the then balance of his Accounts
(including the portion of his Accounts attributable to his Savings
Contributions, and to Matching Contributions allocable to his Accounts, which
were made prior to such Election Date) in 1% increments among any or all of
Funds A, B, C, and D, provided that such election does not result in more than
25% of the then balance of his Accounts to be invested in Fund D.
(d) Unless a Participant changes the investment of the
balance of his Accounts as of any Election Date under paragraph (c) above, any
net income arising under Fund A, B, C, or D and allocable to the Participant's
Accounts shall be reinvested in such Fund.
(e) Any election made by a Participant under paragraph
(a) or (c) above must be made by a communication to a Plan representative under
a telephonic system approved by the Committee, or by any other method
approved by the Committee, and during an election period. If such election is
made by a telephonic communication, it shall be confirmed in writing by the Plan
representative to the Participant. The election period shall last for at least
two weeks, occur sometime in the three months immediately prior to the
applicable Election Date, and be set by the Committee.
(f) If a Participant fails as of any Election Date to make
an election as to the investment of his future Savings Contributions or the then
balance of his Accounts, then his future Savings Contributions or the then
balance of his Accounts, as the case may be, shall continue to be invested
in the same manner as applied prior to such Election Date without change until
the Participant subsequently is eligible to and does elect a change under this
Section 6B.1.2.
(g) For purposes of this Section 6B.1.2, an "Election
Date" means March 31, 1994 and each subsequent June 30, September 30,
December 31, and March 31.
6B.2 Investment of Pre-July 1, 1993 Retirement Income Account.
6B.2.1 Notwithstanding the provisions of Section 6B.1
above, the portion of a Participant's Retirement Income Account which is
attributable to amounts allocated to such Account prior to July 1, 1993 (and
which does not include amounts allocated to such Account on or after July 1,
1993 by reason of the merger of any other plan into this Plan on or after such
date) shall be invested on and after March 31, 1994 under and in accordance with
the provisions of Sections 6B.2.2, 6B.2.3, and 6B.2.4 below. For purposes of
the following provisions of this Section 6B.2, any references to a Participant's
"pre-July 1, 1993 Retirement Income Account" refers to the portion of the
Participant's Retirement Income Account described in the immediately preceding
sentence.
6B.2.2 Except as provided in Sections 6B.2.3 and 6B.2.4
below, a Participant's pre-July 1, 1993 Retirement Income Account shall be
invested in the Diversified Fund.
6B.2.3(a) Notwithstanding the provisions of Section 6B.2.2
above, each Participant who either (1) attains age 60 both while employed by the
Employer and prior to December 31, 1986 or (2) has both attained age 55 and
completed ten or more years of Vesting Service may, effective as of each
Election Date, elect that 25%, 50%, 75%, or 100% (as the Participant chooses) of
his pre-July 1, 1993 Retirement Income Account then invested in the Diversified
Fund shall be reinvested in the Stability Income Fund. Any amount so reinvested
in the Stability Income Fund may not thereafter be reinvested in the Diversified
Fund or any other fund.
(b) Any election made by a Participant under paragraph
(a) above must be made by a communication to a Plan representative under a
telephonic system approved by the Committee, or by any other method approved
by the Committee, and during an election period. If such election is made by
telephonic communication, it shall be confirmed in writing by the Plan
representative to the Participant. The election period shall last for at least
two weeks, occur sometime in the three months immediately prior to the
applicable Election Date, and be set by the Committee.
(c) For purposes of this Section 6B.2.3, an "Election
Date" means March 31, 1994 and each subsequent June 30, September 30,
December 31, and March 31.
6B.2.4 Also notwithstanding the provisions of Section
6B.2.2 above, any portion of a Participant's pre-July 1, 1993 Retirement Income
Account which has been invested in the Stability Income Fund prior to March 31,
1994 shall continue to be invested in such Fund without change and may not be
reinvested in the Diversified Fund or any other fund.
6B.3 Investment Funds. Several Funds shall be maintained in the Trust
Fund for the investment of Plan funds on and after March 31, 1994. For
purposes hereof, a "Fund" means a separate commingled investment fund
established under the Trust Fund which are used for the investment of assets of
the Plan. Each of such Funds has a specific investment focus and party or
parties directing its investments, which in both cases is chosen by the
Committee. Each Fund is subject to all of the terms of the Trust Fund. For
purposes of the Plan, the funds listed below are Funds used for the Plan on and
after March 31, 1994, have the investment focus described below, and are the
Funds in effect on and after March 31, 1994 referred to in the other provisions
of the Plan:
6B.3.1 "Fund A" invests in a variety of short-term fixed
income corporate and government bonds, investment contracts with selected
insurance companies which provide for a stated investment return, and
intermediate-term available rate fixed-income securities, as selected by the
Committee or by one or more investment managers appointed under the Trust
Fund.
6B.3.2 "Fund B" invests in a variety of corporate and
government fixed-income securities, equity securities, and cash equivalents, as
selected by the Committee or by one or more investment managers appointed
under the Trust Fund.
6B.3.3 "Fund C" invests in an equity index fund which
reflects Standard & Poor's 500 stock investments.
6B.3.4 "Fund D" invests primarily in common stock of
Federated Department Stores, Inc., except that a portion of such Fund may invest
in certain cash equivalents, as selected by the Committee or by an investment
manager appointed under the Trust Fund.
6B.3.5 "Diversified Fund" invests in a variety of corporate
and government fixed-income securities, equity securities, and cash equivalents,
as selected by the Committee or by one or more investment managers appointed
under the Trust Fund.
6B.3.6 "Stability Income Fund" invests in short-term
fixed-income corporate and government bonds and in other investments designed
to safeguard principal, as selected by the Committee or by one or more
investment managers appointed under the Trust Fund.
SECTION 6C
INVESTMENT OF ACCOUNTS PRIOR TO MARCH 31, 1994
6C.1 Investment of Savings Accounts.
6C.1.1 A Participant's Savings Account, except for any
portion of such Savings Account which is referred to in Section 6C.1.2 below,
shall be invested prior to March 31, 1994 in the manner elected (or deemed
elected) by the Participant under the provisions of Section 6C.1.3 below.
6C.1.2 The portion of a Participant's Savings Account which
was invested on December 31, 1984 in common stock of Federated shall be
invested: (1) prior to September 1, 1989, in Fund D; and (2) on and after
September 1, 1989 and prior to March 31, 1994, in the manner elected (or
deemed elected) by the Participant under the provisions of Section 6C.1.3 below.
6C.1.3(a) Each Participant may, effective as of each Election
Date, elect to invest his Savings Account (or to change the investment of his
Savings Account if he has previously elected or deemed to have elected the
manner in which to invest his Savings Account), in 25% increments among any
or all of Funds A, B, and C.
(b) Such an election must be made in a form or writing
prepared or approved by the Committee and filed with a Plan representative
during an election period. Such election period shall last for at least two
weeks, occur sometime in the three months prior to the applicable Election Date,
and be set by the Committee.
(c) If a Participant fails as of any Election Date to make
an election as to the investment of his Savings Account when otherwise eligible
under this Section 6C.1.3, then his last prior election (or deemed election) as
to the investment of his Savings Account shall continue in effect without change
until the Participant subsequently is eligible to and does elect a change under
this Section 6C.1.3 (or, if no prior election had previously been made or deemed
to be made by him as of such Election Date, then he shall be deemed to have
elected to invest his Savings Account in Fund A); with the one exception that,
if a Participant who has a portion of his Savings Account referred to in Section
6C.1.2 above fails to elect to make a change in his last election (or deemed
election) as of the September 1, 1989 Election Date, he shall be deemed to have
elected to invest as of such Election Date the portion of his Savings Account
referred to in Section 6C.1.2 above in Fund A.
(d) For purposes of this Section 6C.1.3, an "Election
Date" means September 1, 1989 and any subsequent date prior to January 1, 1994
which is chosen by the Committee to be an Election Date hereunder. The
Committee shall choose one (and only one) date to serve as an Election Date in
each Plan Year after the Plan Year which ends December 31, 1989 and prior to
the Plan Year which begins January 1, 1994 and announce it and the election
period which shall apply to such Election Date to Participants prior to the
start of such election period. In addition, for a Participant who first becomes
a Participant after the Effective Amendment Date, the date he first becomes a
Participant hereunder shall be considered an "Election Date" as to him.
6C.2 Investment of Matching Accounts.
6C.2.1 The portion of a Participant's Matching Account which
is attributable to contributions allocated to such Account prior to January 1,
1989 shall be invested: (1) prior to September 1, 1989 (if applicable), in the
Thrift Incentive Fund (except to the extent otherwise provided in Sections
6C.2.2); and (2) on and after September 1, 1989 and prior to March 31, 1994,
in the manner elected (or deemed elected) by the Participant under the
provisions of Section 6C.2.3 below.
6C.2.2 Notwithstanding the provisions of clause (1) of
Section 6C.2.1 above, prior to September 1, 1989, each Participant who either
(1) attained age 60 both while employed by the Employer and on or before
December 31, 1986 or (2) has both attained age 55 and completed ten or more
years of Vesting Service may elect in a form or writing prepared or approved by
the Committee and filed with a Plan representative that, effective as of the
first day of the first calendar month which begins after the election is filed
with the Plan representative, his Matching Account shall (except to the extent
otherwise provided in Section 6C.2.3 below) be invested in Fund A.
6C.2.3(a) Each Participant may, effective as of each Election Date, elect
to invest the portion of his Matching Account which is attributable to contribu-
tions allocated to such Account prior to January 1, 1989 (or to change the
investment of such portion of his Matching Account if he has previously elected
or deemed to have elected the manner in which to invest such portion of his
Matching Account) in 25% increments among any or all of Funds A, B, and C.
(b) Such an election must be made on a form or writing
prepared or approved by the Committee and filed with a Plan representative
during an election period. Such election period shall last for at least two
weeks, occur sometime in the three months prior to the applicable Election Date,
and be set by the Committee.
(c) If a Participant fails as of any Election Date to make
an election as to the investment of the portion of his Matching Account which is
attributable to contributions allocated to such Account prior to January 1, 1989
when otherwise eligible under this Section 6C.2.3, then his last prior election
(or deemed election) as to the investment of such portion of his Matching
Account shall continue in effect without change until the Participant
subsequently is eligible to and does elect a change under this Section 6C.2.3
(or, if no prior election had previously been made or deemed to be made by him
as of such Election Date, then he shall be deemed to have elected to invest such
portion of his Matching Account in Fund A).
(d) For purposes of this Section 6C.2.3, an "Election
Date" means September 1, 1989 and any subsequent date prior to January 1, 1994
which is chosen by the Committee to be an Election Date hereunder. The
Committee shall choose one (and only one) date to serve as an Election Date in
each Plan Year after the Plan Year which ends December 31, 1989 and prior to
the Plan Year which begins January 1, 1994 and announce it and the election
period which shall apply to such Election Date to Participants prior to the
start of such election period.
6C.2.4 The portion of a Participant's Matching Account
which is attributable to contributions allocated to such Account on and after
December 31, 1988 shall be invested prior to March 31, 1994 in Fund A.
6C.3 Investment of Retirement Income Accounts.
6C.3.1 Except as provided in Section 6C.3.2 below, a
Participant's Retirement Income Account shall be invested prior to March 31,
1994 in the Diversified Fund.
6C.3.2 Notwithstanding the provisions of Section 6C.3.1
above, each Participant who either (1) attained age 60 both while employed by
the Employer and prior to December 31, 1986 or (2) has both attained age 55 and
completed ten or more years of Vesting Service may elect prior to March 31,
1994 on a form or writing prepared or approved by the Committee and filed with
a Plan representative that, effective as of the first day of the first calendar
month which begins after the election is filed with the Plan representative,
25%, 50%, 75%, or 100% (as the Participant chooses) of his Retirement Income
Account then invested in the Diversified Fund shall be reinvested in the
Stability Income Fund. Any amount so reinvested in the Stability Income Fund
may not thereafter be reinvested in the Diversified Fund or any other fund.
6C.4 Investment Funds. Several Investment Funds shall be maintained
in the Trust for the investment of Plan funds prior to March 31, 1994. Each of
such Investment Funds has a specific investment focus and party directing its
investments, which in both cases is chosen by the Committee. Each Investment
Fund is subject to all of the terms of the Trust. For purposes of the Plan, the
funds listed below are Investment Funds used for the Plan prior to March 31,
1994, have the investment focus described below, and are the Investment Funds
in effect prior to March 31, 1994 which are referred to in the other provisions
of the Plan:
6C.4.1 "Fund A" invests in a variety of short-term fixed
income corporate and government bonds, investment contracts with selected
insurance companies which provide for a stated investment return, and
intermediate-term available rate fixed-income securities, as selected by the
Committee or by one or more investment managers appointed under the Trust.
6C.4.2 "Fund B" invests in a variety of corporate and
government fixed-income securities, equity securities, and cash equivalents, as
selected by the Committee or by one or more investment managers appointed
under the Trust.
6C.4.3 "Fund C" invests in an equity index fund which
reflects Standard & Poor's 500 stock investments.
6C.4.4 "Fund D" invests in certain cash equivalents, as
selected by the Committee or by one or more investment managers appointed
under the Trust. Fund D does not exist for any period after August 31, 1989.
6C.4.5 "Thrift Incentive Fund" invests in certain cash
equivalents, as selected by the Committee or by one or more investment managers
appointed under the Trust. The Thrift Incentive Fund does not exist for any
period after August 31, 1989.
6C.4.6 "Diversified Income Fund" invests in a variety of
corporate and government fixed-income securities, equity securities, and cash
equivalents, as selected by the Committee or by one or more investment managers
appointed under the Trust.
6C.4.7 "Stability Income Fund" invests in short-term
fixed-income corporate and government bonds and in other investments designed
to safeguard principal, as selected by the Committee or by one or more
investment managers appointed under the Trust.
SECTION 7
WITHDRAWALS DURING EMPLOYMENT
7.1 Withdrawals of After-Tax Savings Contributions.
7.1.1 Upon written notice filed with the Committee, a Participant
may elect to withdraw from his Savings Account any portion of the then value of
such Account which is attributable to his After-Tax Savings Contributions which
are treated under other provisions of the Plan as Additional Savings
Contributions (called the "After-Tax Additional Savings Contributions" in this
Section 7.1) and which he designates in the notice, as long as, if the with-
drawal is made prior to July 1, 1993, the requested amount (1) is not greater
than the difference between the dollar amount of the After-Tax Additional
Savings Contributions he has previously made to the Plan and the amount of
After-Tax Additional Savings Contributions he has previously withdrawn from the
Plan and (2) is not less than $500 (or, if less, the dollar amount of the then
unwithdrawn After-Tax Additional Savings Contributions he has previously made to
the Plan).
7.1.2 Also upon written notice filed with the Committee, any
Participant may, provided he elects at the same time to withdraw the maximum
amount of After-Tax Additional Savings Contributions he is permitted to
withdraw under Section 7.1.1 above (if any), elect to withdraw from his Savings
Account any portion of the then value of such Account which is attributable to
his After-Tax Savings Contributions which are treated under other provisions of
the Plan as Basic Savings Contributions (called the "After-Tax Basic Savings
Contributions" in this Section 7.1) and which he designates in the notice, so
long as, if the withdrawal is made prior to July 1, 1993, the requested amount
(1) is not greater than the difference between the dollar amount of the After-
Tax Basic Savings Contributions he has previously made to the Plan and the
amount of After-Tax Basic Savings Contributions he has previously withdrawn from
the Plan and (2) is not less than $500 (or, if less, the dollar amount of the
then unwithdrawn After-Tax Basic Savings Contributions he has previously made to
the Plan).
7.1.3 If a withdrawal under Section 7.1.1 above and/or Section 7.1.2
above is elected, the actual withdrawal payment shall be deemed made under the
Plan as of the last day of the calendar month in which the written notice
requesting withdrawal is filed with the Committee and shall actually be
distributed in cash to the Participant as soon as administratively practical
after the end of such month. Only one withdrawal under the provisions of this
Section 7.1 is permitted a Participant in any one Valuation Period, although
such withdrawal can include a withdrawal under both Sections 7.1.1 and 7.1.2
above.
7.2 Withdrawals of Pre-Tax Savings Contributions.
7.2.1 Upon written notice filed with the Committee, a Participant
may, provided he elects at the same time to withdraw the maximum amount he
is permitted to withdraw under Section 7.1 above (if any), request a withdrawal
from his Savings Account of any portion of the then value of such Account which
is attributable to his Pre-Tax Savings Contributions and which he designates in
the notice, so long as the requested amount is not greater than the difference
between the dollar amount of the Pre-Tax Savings Contributions previously made
on his behalf to the Plan and the amount of Pre-Tax Savings Contributions he has
previously withdrawn from the Plan. Further, no withdrawal may be allowed
under this Section 7.2 unless the withdrawal is requested (1) after the
Participant has attained age 59-1/2 or (2) because of a hardship.
7.2.2 If such a withdrawal is requested, the actual withdrawal
payment shall be deemed made under the Plan as of the last day of the calendar
month in which the written notice requesting the withdrawal is filed with the
Committee and shall actually be distributed in cash to the Participant as soon
as administratively practical after the end of such month, provided the
Committee or a Committee representative determines such request is to be granted
under the rules set forth in this Section 7.2 (and, if applicable, Section 7.3
below). Only one withdrawal under the provisions of this Section 7.2 is
permitted a Participant in any one Valuation Period.
7.2.3 Also, any withdrawal made by a Participant shall be deemed
for Plan purposes to consist first of those Pre-Tax Savings Contributions which
are treated under other provisions of the Plan as Additional Savings Contribu-
tions and second (only to the extent still necessary) of those Pre-Tax Savings
Contributions which are treated under other provisions of the Plan as Basic
Savings Contributions.
7.2.4 Any withdrawal requested under this Section 7.2 because
of a hardship shall be granted by the Committee or a Committee representative
if (and only if) the Committee or the Committee representative determines that
the requested hardship withdrawal meets the requirements set forth in Section
7.3 below.
7.3 Requirements for Hardship Withdrawals. Any withdrawal which
is requested by a Participant under Section 7.2 above because of a hardship must
meet the following requirements in order to be granted by the Committee or a
Committee representative:
7.3.1 Any such hardship withdrawal must be requested by the
Participant and certified to be on account of an immediate and heavy financial
need of the Participant. Also, effective for hardship withdrawals requested on
or after December 1, 1991, written documentation of the reason for requesting
the withdrawal shall be required. Whether a withdrawal is requested on account
of an immediate and heavy financial need of the Participant shall be determined
by the Committee or a Committee representative on the basis of all facts and
circumstances. In this regard, a withdrawal shall be considered to be requested
on account of an immediate and heavy financial need of the Participant if the
request is on account of:
(a) Expenses for medical care (described in Section
213(d) of the Code) previously incurred by the Participant, his spouse, or any
dependents of his (as defined in Section 152 of the Code) or necessary for these
persons to obtain medical care (described in Section 213(d) of the Code);
(b) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the Participant;
(c) The payment of tuition and related educational fees
for the next twelve months of post-secondary education for the Participant or
his spouse, children, or dependents (as defined in Section 152 of the Code);
(d) The need to prevent the eviction of the Participant
from his principal residence or the foreclosure on the mortgage of the
Participant's principal residence;
(e) The need to pay funeral expenses of a family
member of the Participant;
(f) The need to pay expenses resulting from sudden or
unexpected damage to the Participant's principal residence or personal property;
(g) To the extent not described in paragraph (a) above,
the need to pay expenses resulting from a sudden and unexpected illness or
accident of the Participant or a family member of the Participant; or
(h) To the extent not included in any of the foregoing
paragraphs, the need to pay expenses to alleviate the Participant's severe
financial hardship resulting from extraordinary and unforeseeable circumstances
beyond the control of the Participant.
7.3.2 Any such hardship withdrawal must also be necessary to
satisfy the need for the withdrawal. A withdrawal shall be deemed necessary to
satisfy such need if, and only if, all of the following conditions are certified
to by the Participant:
(a) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the applicable Participant which has
caused the Participant to request the withdrawal. Effective for hardship
withdrawals requested on or after December 1, 1991, the amount of an immediate
and heavy financial need of the Participant may include an amount permitted by
the Committee under uniform rules to cover Federal income taxes or penalties
which can reasonably be anticipated to result to the Participant from the
distribution;
(b) The Participant has obtained or is obtaining by or as
of the date as of which the withdrawal is deemed made hereunder all withdrawals
(other than hardship withdrawals) and all nontaxable (at the time of the loans)
loans then available under the Plan and all other plans of the Employer and the
Affiliated Employers, including any withdrawal available under Section 7.1
above;
(c) The Participant shall be suspended from making
employee contributions or having contributions made by reason of his election
pursuant to an arrangement described in Section 401(k) of the Code under the
Plan, or any other plan of the Employer or an Affiliated Employer which is
qualified under Section 401(a) of the Code, from the date as of which the with-
drawal is deemed made hereunder to the second January 1 which occurs after
such withdrawal date;
(d) The Participant shall be suspended from making
employee contributions or having contributions made by reason of his election
under any plan of deferred compensation of the Employer or an Affiliated
Employer which is not qualified under Section 401(a) of the Code, including for
purposes hereof a stock option or stock purchase plan, for at least twelve
months after the date as of which the withdrawal is deemed made hereunder; and
(e) The Participant cannot relieve such need through any
other resources.
7.4 Suspension of Savings Contributions. Notwithstanding any other
provision in the Plan to the contrary, the ability of any Participant who makes
a withdrawal under Sections 7.2 and 7.3 above because of a hardship to make
Savings Contributions under this Plan shall automatically be suspended from the
date as of which the withdrawal is deemed made hereunder until the second
January 1 which occurs after such withdrawal date. The Participant may elect to
have Savings Contributions resume being made on his behalf as of such second
January 1 (or the first day of any Plan Year which begins subsequent to such
second January 1) only by filing a new Savings Agreement with a Plan
representative on or prior to such day. The Committee may require for
administrative reasons that such new Savings Agreement must be filed a
reasonable number of days prior to such second January 1 or the first day of any
Plan Year beginning after such second January 1 for it to be considered
effective as of such day.
SECTION 8
DISTRIBUTIONS ON ACCOUNT OF TERMINATION
OF EMPLOYMENT FOR REASONS OTHER THAN DEATH
8.1 Distribution of Retirement Benefit. Each Participant who is vested
in any Account under the Plan shall be entitled to a retirement benefit under
the Plan, which is payable in accordance with the following provisions:
8.1.1 The form of such benefit shall be determined under Sections
8A and 8B below.
8.1.2 Further, subject to the other provisions of the Plan, such
benefit shall be paid or commence to be paid within a reasonable administrative
period after the date the Participant provides a Plan representative with a
written direction (on a form prepared or approved by the Committee) to pay the
benefit, except that in no event shall such benefit be paid or commence to be
paid prior to the earlier of the date the Participant ceases to be an Employee
or the Participant's Required Commencement Date or later than the Participant's
Required Commencement Date.
8.1.3 Notwithstanding the provisions of Section 8.1.2 above, such bene-
fit shall automatically be paid, with no direction or consent of the Participant
being required, within a reasonable administrative period after the date the
Participant ceases to be an Employee if the lump sum amount of such benefit is
then determined to be $3,500 or less and if the Participant's ceasing to be an
Employee occurs prior to his Required Commencement Date; except that such
benefit shall in no event be paid later than the Participant's Required
Commencement Date.
8.1.4 Also, in no event shall distribution of any benefit under the
Plan to a Participant under this Section 8.1 commence, provided the Participant
has filed a written direction to pay the benefit (when such direction is
required) and the amount of the benefit can be determined, later than 60 days
after the end of the later of the Plan Year during which the Participant attains
his Normal Retirement Age or the Plan Year in which he ceases to be an Employee.
8.1.5 If a Participant dies before the full distribution of the
retirement benefit to which he is entitled, his beneficiary under the Plan shall
be entitled to a benefit under Section 9 below and the provisions of this
Section 8.1 shall no longer apply.
8.2 Required Commencement Date. For purposes of the Plan and
Section 8.1 above in particular, a Participant's "Required Commencement Date"
means a date determined by the Committee for administrative reasons to be the
date on which the Participant's vested Plan benefit (if any such benefit would
then exist and not yet have been distributed) is to commence in order to meet
the requirements of Section 401(a)(9) of the Code (which provision generally
requires commencement of the benefit at some date even if the Participant
continues to be employed by the Employer after such date), which date shall be
subject to the following parameters:
8.2.1 For a Participant who attains age 70-1/2 after December 31,
1987, his Required Commencement Date must be no later than, and no earlier
than seven months prior to, the April 1 of the calendar year next following the
calendar year in which he attains age 70-1/2. It is provided, however, that, as
a special transition rule, the Required Commencement Date for any Participant
who attains age 70-1/2 in 1988 and is not a 5% owner of the Employer must be
no later than, and no earlier than seven months prior to, April 1, 1990.
8.2.2 For a Participant who attains age 70-1/2 before January 1,
1988 and is not a 5% owner of the Employer, his Required Commencement Date
must be no later than, and no earlier than seven months prior to, the April 1 of
the calendar year next following the later of: (1) the calendar year in which
he attains age 70-1/2; or (2) the calendar year in which he ceases to be an
Employee.
8.2.3 For a Participant who attains age 70-1/2 before January 1,
1988 and is a 5% owner of the Employer, his Required Commencement Date
must be no later than, and no earlier than seven months prior to, the April 1 of
the calendar year next following the later of: (1) the calendar year in which
he attains age 70-1/2; or (2) the earlier of the calendar year with or within
which ends the Plan Year in which he becomes a 5% owner of the Employer or the
calendar year in which he ceases to be an Employee.
8.2.4 A Participant is deemed to be a 5% owner of the Employer
for purposes hereof if he is a 5% owner of the Employer (as determined under
Section 416(i)(1)(B) of the Code) at any time during the Plan Year ending with
or within the calendar year in which he attains age 66-1/2 or any subsequent
Plan Year. Once a Participant meets the criteria, he shall be deemed a 5% owner
of the Employer even if he ceases to own 5% of the Employer in a later Plan
Year.
8.2.5 Notwithstanding the foregoing, for any Participant who has
no amount at all allocated to any Account of his under the Plan (or who is not
yet even a Participant) on the date which otherwise would be his Required
Commencement Date under the foregoing provisions of this Section 8.2, then his
Required Commencement Date shall not be subject to such foregoing provisions
but rather must be a date which falls in, and is no later than the December 31
of, the calendar year next following the first calendar year in which falls a
date as of which an amount is allocated to any Account of his under the Plan.
8.3 Forfeiture of Nonvested Accounts on Termination of Employment.
8.3.1 If a Participant ceases to be an Employee for any reason
without being fully vested at such time in any Account of his, the Participant
(referred to herein as a "nonretiree terminated Participant") shall forfeit from
such Account the nonvested balance therein (i.e., the total balance of such
Account less the vested portion, if any, of such balance), on and as determined
as of the last day of the first Five-Year Break-in-Service of the Participant
which occurs after the Participant ceases to be an Employee (unless he has been
rehired as an Employee since such prior termination of employment and prior to
the last day of such Five-Year Break-in-Service). Effective January 1, 1992,
the references to "Five-Year Break-in-Service" contained in the immediately
preceding sentence are changed to "Six-Year Break-in-Service," except that such
change shall not apply in determining when to forfeit the nonvested balance of
any Account of the nonretiree terminated Participant if such nonvested balance
would be forfeited in any event under this Section 8.3.1 (without considering
such change) on or before December 31, 1991. Any forfeited amount shall be
allocated to Accounts of other Participants in accordance with the provisions of
Section 8.4 below.
8.3.2 If the Trustee makes a distribution under Section 8.1 above
to a nonretiree terminated Participant prior to the date the nonvested portion
of any Account of his becomes forfeited, then at any relevant time prior to such
date the vested portion of such Account ("A") shall, except for any portion of
such Account for which a special vesting rule is provided under the next
sentence of this Section 8.3.2, be determined by the following formula:
A = P (B + (RxD)) - (RxD). For purposes of such formula, "P" is the vested
percentage of such Account at the relevant time as determined under Section 6.10
above (or, if applicable, Section 14.2 below), "B" is the value of such Account
at the relevant time, "D" is the value of the applicable distribution from such
Account at the time of such distribution, and "R" is the ratio of the value of
such Account at the relevant time to the value of such Account at the time of
the applicable distribution. If, however, such nonretiree terminated
Participant is reemployed as an Employee and again becomes a Participant after
the applicable distribution but prior to the date the nonvested balance of any
Account of the Participant becomes forfeited, a portion of such Account shall
reflect the contributions and forfeitures allocated to such Account after such
reemployment and the Participant shall have his vested interest in such portion
of such Account determined solely under Section 6.10 above (or, if applicable,
Section 14.2 below).
8.3.3 If at any time a nonretiree terminated Participant who is
partially but not fully vested in any Account of his has the nonvested balance
of such Account forfeited prior to receiving a complete distribution of the
vested balance of such Account, then, except for any portion of such Account for
which a special vesting rule is provided under the next sentence of this Section
8.3.3, such Account shall reflect only the remaining undistributed vested
portion of such Account (plus increases or decreases in the value thereof) and
the Participant shall be fully vested in such Account. If, however, such
nonretiree terminated Participant is reemployed as an Employee and again becomes
a Participant after the nonvested balance of any Account of his is forfeited, a
portion of such Account shall reflect the contributions and forfeitures
allocated to such Account after such reemployment and the Participant shall have
his vested interest in such portion of such Account determined solely under
Section 6.10 above (or, if applicable, Section 14.2 below).
8.4 Application of Forfeitures. Any amount of forfeiture arising under
the Plan during a Plan Year will be allocated in accordance with the following
provisions:
8.4.1 Any forfeitures which arise during a Plan Year from
Participants' Matching Accounts and Savings Accounts shall: (1) first be
allocated to correct any inadvertent errors made in crediting amounts to
Accounts and to make all restorals of Accounts required under the provisions of
Section 10.2 below (to the extent use of forfeited amounts under Section 8.4.2
below does not correct all such errors); and (2) second, to the extent any such
forfeitures still remain after the correction of such errors, be allocated among
the Matching Accounts of those Participants who are still employed as Covered
Employees on the last day of the subject Plan Year in the same manner as the
Matching Contributions of the Employer are allocated for such Plan Year and in
addition to such Matching Contributions.
8.4.2 (a) Any forfeitures which arise during a Plan Year from Participants'
Retirement Income Accounts shall: (1) first be allocated to correct any
inadvertent errors made in crediting amounts to Accounts and to make all
restorals of Accounts required under the provisions of Section 10.2 below; and
(2) second, to the extent any such forfeitures still remain after the correction
of such errors, be allocated among the Retirement Income Accounts of those
Participants who are still employed as Covered Employees on the last day of the
subject Plan Year, in the proportion that each such Participant's allocation
product for such Plan Year bears to the aggregate allocation products of all
such Participants for such Plan Year.
(b) For purposes of this Section 8.4.2, a Participant's
"allocation product" for a Plan Year means the product obtained by multiplying
the Participant's Retirement Income Account at the start of such Plan Year by
the Participant's length of service factor for such Plan Year.
(c) Also for purposes of this Section 8.4.2, a
Participant's "length of service factor" for a Plan Year shall be: (1) for a
Participant who has completed more than 20 years of Vesting Service by the end
of such Plan Year, one and one-half; and (2) for a Participant who has not
completed more than 20 years of Vesting Service by the end of such Plan Year,
one.
SECTION 8A
FORM OF DISTRIBUTION OF SAVINGS
AND MATCHING ACCOUNTS
8A.1 Section Applies Only to Savings and Matching Accounts. This
Section 8A provides rules as to the form (except for the time of payout, which
is provided for in Section 8 above) of a Participant's retirement benefit under
the Plan with respect to the part of such benefit attributable to the Savings
Account and Matching Account of the Participant (which part of such benefit is
referred to in this Section 8A as the Participant's "Savings Benefit"). Section
8B below provides the rules as to such form with respect to the part of the
retirement benefit attributable to any Retirement Income Account of the
Participant.
8A.2 Normal Form of Savings Benefit -- Lump Sum Payment. Subject
to the other provisions of the Plan, a Participant's Savings Benefit shall be
distributed in the form of a lump sum payment. The amount of the lump sum
payment shall be equal to the vested balances in the Participant's Savings and
Matching Accounts, determined as of the date (the "subject valuation date") of
the latest valuations of the Investment Funds which have been completed prior to
the date of the distribution and the results of which are available on the date
of the distribution to the Committee. Such lump sum payment shall be made in
cash, except that for any payment being made on or after March 31, 1994 the
Participant may elect, on a form or writing prepared or approved by the
Committee and filed with a Plan representative prior to the date the payment is
made, that the payment is to be made partly in the form of common shares of
Federated if a portion of his Savings and Matching Accounts then is invested in
the Investment Fund described in Section 6B below as Fund D ("Fund D"). If
such election is made, then such lump sum payment will consist of: (1) to the
extent sufficient Federated common shares are available under Fund D, Federated
common shares equal to the quotient produced by dividing the vested balances of
the portion of the Participant's Savings and Matching Accounts which is invested
in Fund D as of the subject valuation date by the closing price (the "subject
closing price") of a Federated common share on the latest trading day of the
largest securities market in which Federated common shares are traded which
occurs on or before the subject valuation date; and (2) cash equal to the
difference between the total vested balances of the Participant's Savings and
Matching Accounts as of the subject valuation date and the value of the
Federated common shares being distributed in the payment (as determined on the
basis of the subject closing price of a Federated common share).
8A.3 Optional Annuity Form of Benefit Rules. Subject to the other provi-
sions of the Plan, a Participant may elect to receive his Savings Benefit in
an Annuity form instead of the normal form set forth in Section 8A.2 above (or
to have part of his Savings Benefit paid in an Annuity form and the remainder
paid in the normal form set forth in Section 8A.2 above). Such an election must
be made on a form or writing prepared or approved by the Committee and filed
with a Plan representative prior to the date the benefit is payable under the
provisions of Section 8.1 above. If the Participant elects to receive his
Savings Benefit (or part of such benefit) in an Annuity form, the specific type
of Annuity in which such benefit shall be paid is determined under the
provisions of Sections 8A.4, 8A.5, and 8A.6 below. In addition, the election to
pay a Savings Benefit (or part of such benefit) in an Annuity form is subject to
the following provisions:
8A.3.1 The distribution of any Annuity shall be effected by
the application of an amount equal to the vested balances in the Participant's
Savings and Matching Accounts (determined as of the latest valuations of the
Investment Funds which have been completed prior to the date of the distribution
and the results of which are available on such date to the Committee), or the
part of such vested balances which the Participant elects to have distributed in
an Annuity form, to the purchase of a nontransferable Annuity contract providing
the applicable type of Annuity form from an insurance company selected by the
Committee and the subsequent forwarding of such contract to the Participant.
The purchase of such Annuity shall be made on behalf of the Participant as a
part of the Plan's administrative procedures. If the Participant receives a
benefit under Section 8B below in the same Annuity form as he receives his
Savings Benefit (or any part thereof), the Committee may choose to purchase one
Annuity contract to provide both such benefits.
8A.3.2 Any Annuity contract shall be purchased and
distributed on an immediate basis (i.e., payments under the contract shall begin
as of a date which coincides with the date as of which such purchase is made).
As a result, the vested balances of the Participant's Savings and Matching
Accounts shall be maintained in the Plan until the Annuity contract is to begin
payments, at which time the contract shall be purchased.
8A.3.3 The distribution of an Annuity contract hereunder shall,
for all purposes of the Plan, be deemed to constitute the full distribution of
the benefit attributable to the part of the Participant's Savings and Matching
Accounts which is due the Participant and is being paid in the form of an
Annuity.
8A.3.4 Notwithstanding any other provision of the Plan to
the contrary, the applicable Participant may not elect to receive his Savings
Benefit (or any part of such benefit) in an Annuity form if the value of such
benefit (or such part) at the time it is to be distributed, when added to the
value of any benefit under Section 8B below which the Participant also is to
receive in an Annuity form, is $3,500 or less. Instead, in such case such
benefit shall be distributed in a lump sum payment in accordance with the
provisions of Section 8A.2 above.
8A.3.5 If a Participant elects to receive part but not all of
his Savings Benefit in the form of an Annuity, then, for purposes of the
provisions of Sections 8A.4, 8A.5, and 8A.6 below, any reference in such
sections to a Participant's Savings Benefit shall be read to refer only to the
part of such benefit which the Participant elects to receive in the form of an
Annuity.
8A.4 Normal Form of Annuity Benefit.
8A.4.1 Subject to the other terms of the Plan, if a
Participant elects to receive his Savings Benefit in an Annuity form under the
provisions of Section 8A.3 above and he is not married as of the date payments
under the Annuity are to begin being paid, then such benefit shall be paid in
the form of a Single Life Annuity.
8A.4.2 Subject to the other terms of the Plan, if a
Participant elects to receive his Savings Benefit in an Annuity form under the
provisions of Section 8A.3 above and he is married as of the date payments under
the Annuity are to begin being paid, then such benefit shall be paid in the form
of a Qualified Joint and Survivor Annuity.
8A.5 Election Out of Normal Annuity Form.
8A.5.1 A Participant who elects to receive his Savings
Benefit in an Annuity form under the provisions of Section 8A.3 above may elect
to waive the normal Annuity form in which such benefit shall otherwise be paid
under Section 8A.4 above and instead to have such benefit paid in any specific
optional Annuity form permitted him under Section 8A.6 below, provided: (1)
such election is made in writing to a Plan representative (on a form or writing
prepared or approved by the Committee) both prior to the date on which the
Savings Benefit is otherwise distributed in the absence of this election and
within the 90 day period ending on the date on which his Savings Benefit is
distributed; and (2) for a Participant who is married on the date as of which
his Savings Benefit commences under the Annuity form and performs at least one
Hour of Service after August 22, 1984, the person who is the Spouse of the
Participant consents, in writing to a Plan representative, to such election
within the same 90 day period, with the Spouse's consent acknowledging the
effect of such consent and being witnessed by a notary public. (Prior to
August 1, 1989, the Spouse's consent may be witnessed by a Plan representative
instead of a notary public.) Any such Spouse's consent shall be irrevocable
once received by a Plan representative.
8A.5.2 Notwithstanding the provisions of clause (2) in
Section 8A.5.1 above, a consent of a Spouse shall not be required for purposes
of Section 8A.5.1 above if it is established to the satisfaction of a Plan
representative that the otherwise required consent cannot be obtained because
the Plan representative reasonably determines no Spouse exists, because the
Spouse cannot reasonably be located, or because of such other circumstances as
the Secretary of the Treasury or his delegate allows in regulations.
8A.5.3 The Participant may amend or revoke his election
of an optional Annuity form under this Section 8A.5 by written notice filed with
a Plan representative at any time before his Savings Benefit is distributed to
him under the Plan; provided that if the Participant attempts upon such an
amendment to elect another Annuity form of payment different than the normal
Annuity form applicable to him, the conditions of Sections 8A.5.1 and 8A.5.2
above must be satisfied as if such amendment were a new election.
8A.6 Optional Annuity Forms. A Participant who elects to receive his
Savings Benefit in an Annuity form may elect to receive such benefit, in lieu of
the normal Annuity form otherwise payable under Section 8A.4 above and
provided all of the election provisions of Section 8A.5 above are met, in any of
the following Annuity forms: (1) a Single Life Annuity (which is an optional
Annuity form only for a Participant who is married on the date his Savings
Benefit is distributed to him); (2) a Life and Ten Year Certain Annuity; (3) a
Full Cash Refund Annuity; or (4) a Period Certain Annuity.
8A.7 Annuity Definitions. For purposes of this Section 8A, the
following Annuity definitions apply:
8A.7.1 "Single Life Annuity" means an Annuity payable as
follows. Monthly payments are made to a Participant for his life and end with
the last monthly payment due for the month in which the Participant dies.
8A.7.2 "Qualified Joint and Survivor Annuity" means an
Annuity payable as follows. Monthly payments are made to a Participant for his
life, and after his death monthly survivor payments continue to the person who
is the Spouse of the Participant on the date as of which payments under the
Annuity begin being paid to the Participant (provided such person survives the
Participant) for such person's life. Each monthly survivor payment to such
person is equal in amount to 50% (or, if the Participant so elects in writing to
the applicable Plan representative within the 90 day period ending on the date
as of which payments under the Annuity begin being paid, 66-2/3%, 100%, or,
effective as of July 1, 1993, 75%) of the monthly payment amount made during
the life of the Participant under the same Annuity.
8A.7.3 "Life and Ten Year Certain Annuity" means an
Annuity payable as follows. Monthly payments are made to a Participant for his
life, and such payments end with the payment due for the month in which the
Participant dies if at least 120 monthly payments have been made on behalf of
the Participant. If not, the monthly payments continue after the Participant's
death to a contingent beneficiary until 120 monthly payments have been made,
when aggregated, to the Participant and the contingent beneficiary. The
Participant shall name the contingent beneficiary in his election of this form.
8A.7.4 "Full Cash Refund Annuity" means an Annuity
payable as follows. Monthly payments are made to a Participant for his life and
end with the last payment due for the month in which the Participant dies.
Further, if the cost of such Annuity exceeds the total of all monthly payments
made under the Annuity through the month in which the Participant dies, then the
amount of such excess shall be paid to a contingent beneficiary. The
Participant shall name the contingent beneficiary for purposes of such Annuity
in his election of this form.
8A.7.5 "Period Certain Annuity" means an Annuity payable as follows.
Monthly payments are made to a Participant for a certain number of months (the
"period certain") and end with the payment for the last month in such period
certain. If the Participant dies before the end of the period certain, then
the monthly payments due for the remaining months in the period certain after
the month of the Participant's death shall be paid to a contingent beneficiary.
The Participant shall specify the period certain to be used and name the
contingent beneficiary in his election of this form. The period certain may be
of any number of months, provided it is not less than 36 months and not more
than 180 months.
8A.8 Minimum Required Installment/Lump Sum Form of Benefit.
Subject to the other provisions of the Plan, a Participant who is required to
receive a retirement benefit under Section 8.1 above on his Required
Commencement Date solely because he has reached such date (and for no other
reason, such as his previously having ceased to be an Employee) shall receive
his Savings Benefit in a special installment form (called here the "Installment/
Lump Sum Form"), unless and until the Participant elects in a writing filed with
a Plan representative prior to the date of any payment otherwise required under
the Installment/Lump Sum Form to receive his Savings Benefit in the normal form
set forth in Section 8A.2 above (in which case his then remaining Savings
Benefit shall be paid in such normal form) or in an optional Annuity form (in
which case such election shall be subject to the rules of Sections 8A.3.1
through 8A.3.5 above and of Sections 8A.4 through 8A.6 above and, subject to
such rules, his then remaining Savings Benefit shall be paid in such optional
Annuity form). The Committee may require for administrative reasons that such
election must be filed a reasonable number of days or months prior to the date
of any payment otherwise required under the Installment/Lump Sum form for it to
be considered effective as of the date of such payment. The Installment/Lump
Sum Form is subject to the following provisions:
8A.8.1 Under the Installment/Lump Sum Form, a part of the
vested balances of the Participant's Savings and Matching Accounts is paid in
cash to the Participant (or, if he dies before payment of such part, to the
beneficiary of the Participant designated under the provisions of Section 9.6
below) for each Distribution Year. For any Distribution Year, the amount of the
distribution shall be equal to the lesser of: (1) an amount equal to the total
vested balances of all of the Participant's Accounts (determined as of the last
day of the latest calendar year which ends prior to the subject Distribution
Year) divided by the Life Expectancy of the Participant for such Distribution
Year; or (2) an amount equal to the vested balances of the Participant's Savings
and Matching Accounts (determined as of the latest valuations of the Investment
Funds which have been completed prior to the distribution and the results of
which are available on such date to the Committee). Any distribution which is
made hereunder for a Distribution Year shall be deemed for Plan purposes to be
taken first from the Participant's Savings Account and second (only to the
extent still necessary) from his Matching Account.
8A.8.2 Further, under the Installment/Lump Sum Form, any then remaining
vested balance in the Participant's Savings and Matching Accounts shall be
paid in a lump sum cash payment to the Participant (or, if he dies before
such payment, to the beneficiary of the Participant designated under the
provisions of Section 9.6 below) within a reasonable administrative period after
the Participant ceases to be an Employee for any reason. For purposes of this
distribution, the remaining vested balances of the Participant's Savings and
Matching Accounts shall be based on the latest valuations of the Investment
Funds which have been completed prior to the date of the distribution and the
results of which are available on such date to the Committee.
8A.8.3 The distribution to be made under the Installment/Lump Sum
Form for the Participant's first Distribution Year shall be made on the
Participant's Required Commencement Date. The distribution to be made
under the Installment/Lump Sum Form for any later Distribution Year shall be
made on a date which falls in such Distribution Year and which the Committee
determines for administrative reasons to be the date on which such distribution
is to be made in order to meet the requirements of Section 401(a)(9) of the
Code; except that, instead of a separate payment, the distribution to be made
for any Distribution Year in which the Participant ceases to be an Employee may
be paid as part of the final lump sum cash payment provided for in Section
8A.8.2 above (whenever it is paid) if (and only if) such final payment is made
in such Distribution Year. If the Participant affirmatively elects in writing
to have his Savings Benefit paid in the Installment/Lump Sum form, then such
form, once it commences, shall continue in accordance with the terms of this
Section 8A.8 which apply to such form and shall not be subject to change. Also,
notwithstanding any other provision of this Section 8A.8 to the contrary, any
distribution of a Participant's Savings Benefit which commences in the form of
the Installment/Lump Sum form and during the Plan Years beginning on January
1, 1991 and January 1, 1992 shall, once begun in such form, continue in
accordance with the terms of this Section 8A.8 which apply to such form and
shall not be subject to change.
8A.8.4 For purposes of this Section 8A.8, a "Distribution Year"
means, with respect to any Participant, the latest calendar year which ends
prior to or with the latest date which could serve as the Participant's Required
Commencement Date and each later calendar year to and including the calendar
year in which the Participant ceases to be an Employee.
8A.8.5 Also for purposes of this Section 8A.8, the "Life Expectancy"
of the Participant shall be: (1) for a Distribution Year both in which the
Participant first attains age 70-1/2 (if applicable) and which begins prior to
January 1, 1993, fifteen; (2) for each and any later Distribution Year which
begins prior to January 1, 1993, fifteen less the number of calendar years which
begin after the end of the calendar year in which the Participant first attains
age 70-1/2 and end prior to or with the last day of the subject Distribution
Year; and (3) for each and any Distribution Year which begins on or after
January 1, 1993, the Participant's life expectancy divisor for such Distribution
Year. For purposes hereof, the Participant's "life expectancy divisor" for any
Distribution Year which begins on or after January 1, 1993 shall be deemed to be
the applicable multiple set forth in the latest table adopted on or before the
first day of the subject Distribution Year under Treasury Regulation Section
1.72-9 to reflect expected return multiples for ordinary life annuities, one
life, which applies to the age of the Participant on his birthday in the subject
Distribution Year. (As of the Effective Amendment Date, the table contained in
Treasury Regulation Section 1.72-9 from which a Participant's life expectancy
divisor is derived is Table V.)
8A.8.6 Notwithstanding the foregoing provisions of this Section
8A.8, if the value of the Participant's Savings Benefit as of his Required
Commencement Date, when added to the value of any benefit under Section 8B
below which the Participant also is to receive, is $3,500 or less, his Savings
Benefit shall be distributed in the normal form set forth in Section 8A.2 above
instead of the Installment/Lump Sum Form.
SECTION 8B
FORM OF DISTRIBUTION OF
RETIREMENT INCOME ACCOUNTS
8B.1 Section Applies Only to Retirement Income Accounts. This Section
8B provides rules as to the form (except for the time of payout, which is set
forth in Section 8 above) of a Participant's retirement benefit under the Plan
with respect to the part of such benefit attributable to any Retirement Income
Account of the Participant (which part of such benefit is referred to in this
Section 8B as the Participant's "Profit Sharing Benefit"), if any. Section 8A
above provides the rules as to such form with respect to the part of the
retirement benefit attributable to any Savings and Matching Account of the
Participant (which part of such benefit is referred to in this Section 8B as the
Participant's "Savings Benefit").
8B.2 Normal Form of Profit Sharing Benefit -- Qualified Annuity
Forms.
8B.2.1 Subject to the other terms of the Plan, if a Participant
is not married as of the date payment of his Profit Sharing Benefit is
to commence, then such benefit shall be paid in the form of a Single Life
Annuity.
8B.2.2 Subject to the other terms of the Plan, if a Participant
is married as of the date payment of his Profit Sharing Benefit is to
commence, then such benefit shall be paid in the form of a Qualified Joint and
Survivor Annuity.
8B.3 Election Out of Normal Form.
8B.3.1 A Participant may elect to waive the normal form
in which his Profit Sharing Benefit shall otherwise be paid under Section 8B.2
above and instead to have such benefit (or any part of such benefit) paid in any
specific optional form permitted him under Section 8B.4 below or to have such
benefit paid in any optional form permitted him under Section 8B.8 below,
provided: (1) such election is made in writing to a Plan representative (on a
form or writing prepared or approved by the Committee) both prior to the date on
which the Profit Sharing Benefit is distributed in the absence of this election
and within the 90 day period ending on the date on which his Profit Sharing
Benefit is distributed or paid; and (2) for a Participant who is married on the
date as of which his Profit Sharing Benefit commences or is paid and performs at
least one Hour of Service after August 22, 1984, the person who is the Spouse of
the Participant consents, in writing to a Plan representative, to such election
within the same 90 day period, with the Spouse's consent acknowledging the
effect of such consent and being witnessed by a notary public. (Prior to August
1, 1989, the Spouse's consent may be witnessed by a Plan representative instead
of a notary public.) Any such Spouse's consent shall be irrevocable once
received by a Plan representative.
8B.3.2 Notwithstanding the provisions of clause (2) in
Section 8B.3.1 above, a consent of a Spouse shall not be required for purposes
of Section 8B.3.1 above if it is established to the satisfaction of a Plan
representative that the otherwise required consent cannot be obtained because
the Plan representative reasonably determines no Spouse exists, because the
Spouse cannot reasonably be located, or because of such other circumstances as
the Secretary of the Treasury or his delegate allows in regulations.
8B.3.3 The Participant may amend or revoke his election
of an optional form under this Section 8B.3 by written notice filed with a Plan
representative at any time before his Profit Sharing Benefit is distributed or
paid to him under the Plan; provided that if the Participant attempts upon such
an amendment to elect another form of payment different than the normal form
applicable to him, the conditions of Sections 8B.3.1 and 8B.3.2 above must be
satisfied as if such amendment were a new election.
8B.4 Regular Optional Forms.
8B.4.1 Provided all of the election provisions of Section 8B.3
above are met, a Participant may elect to receive his Profit Sharing Benefit
in any of the following forms instead of the normal form otherwise payable under
Section 8B.2 above (or to have part of his Profit Sharing Benefit paid in any of
the following forms and the remainder paid in the normal form otherwise payable
under Section 8B.2 above):
(a) A Single Life Annuity (which is an optional form
only for a Participant who is married on the date as of which his Profit Sharing
Benefit commences to be paid to him);
(b) A Life and Ten Year Certain Annuity;
(c) A Full Cash Refund Annuity;
(d) A Period Certain Annuity; or
(e) A lump sum payment. The amount of the lump sum
payment shall be equal to the vested balance of the Participant's Retirement
Income Account, determined as of the date (the "subject valuation date") of the
latest valuations of the Investment Funds which have been completed prior to the
date of the distribution and the results of which are available on the date of
the distribution to the Committee, or the part of such vested balance which the
Participant elects to have distributed in a lump sum payment form, as the case
may be. Such lump sum payment shall be made in cash, except that for any
payment being made on or after March 31, 1994 the Participant may elect, on a
form or writing prepared or approved by the Committee and filed with a Plan
representative prior to the date the payment is made, that the payment is to be
made partly in the form of common shares of Federated if a portion of his
Retirement Income Account then is invested in the Investment Fund described in
Section 6B below as Fund D ("Fund D"). If such election is made, then such
lump sum payment will consist of (1) to the extent sufficient Federated common
shares are available under Fund D, Federated common shares equal to the
quotient produced by dividing the vested balance of the portion of the
Participant's Retirement Income Account which is invested in Fund D as of the
subject valuation date by the closing price (the "subject closing price") of a
Federated common share on the latest trading day of the largest securities
market in which Federated common shares are traded which occurs on or before the
subject valuation date; and (2) cash equal to the difference between the total
vested balance of the Participant's Retirement Income Account as of the subject
valuation date and the value of the Federated common shares being distributed in
the payment (as determined on the basis of the subject closing price of a
Federated common share).
8B.5 Annuity Form of Benefit Rules. If a Participant's Profit Sharing
Benefit is paid in any Annuity form under the provisions of this Section 8B,
such Annuity form shall be subject to the following provisions:
8B.5.1 The distribution of any Annuity shall be effected by
the application of an amount equal to the vested balance in the Participant's
Retirement Income Account (determined as of the latest valuations of the
Investment Funds which have been completed prior to the date of the distribution
and the results of which are available on such date to the Committee), or the
part of such vested balance which is to be distributed in an Annuity form, to
the purchase of a nontransferable Annuity contract providing the applicable type
of Annuity form from an insurance company selected by the Committee and the
subsequent forwarding of such contract to the Participant. The purchase of such
Annuity shall be made on behalf of the Participant as a part of the Plan's
administrative procedures. If the Participant receives his Savings Benefit (or
any part thereof) under Section 8A above in the same Annuity form as he receives
his Profit Sharing Benefit (or any part thereof), the Committee may choose to
purchase just one Annuity contract to provide both such benefits.
8B.5.2 Any Annuity contract shall be purchased and
distributed on an immediate basis (i.e., payments under the contract shall begin
as of a date which coincides with the date as of which such purchase is made).
As a result, the vested portion of the Participant's Retirement Income Account
shall be maintained in the Plan until the Annuity contract is to begin payments,
at which time the contract shall be purchased.
8B.5.3 The distribution of an Annuity contract hereunder shall, for
all purposes of the Plan, be deemed to constitute the full distribution of the
benefit attributable to the part of the Participant's Retirement Income Account
which is due the Participant and is being paid in the form of an Annuity.
8B.6 Annuity Definitions. For purposes of this Section 8B, a "Single
Life Annuity," "Qualified Joint and Survivor Annuity," "Life and Ten Year
Certain Annuity," "Full Cash Refund Annuity," and "Period Certain Annuity"
shall have the same meanings as are set forth for such terms in Section 8A.7
above.
8B.7 Required Lump Sum Form for Small Profit Sharing Benefit. Subject to
Section 8B.8 below but notwithstanding any other provision of the Plan to the
contrary, a Participant shall automatically receive his Profit Sharing Benefit
in the form of a lump sum payment (and not in any Annuity form) unless the
value of such benefit at the time it is to be distributed, when added to the
value of any benefit under Section 8A above which the Participant elects to
receive in an Annuity form, is in excess of $3,500. The amount of the lump sum
payment shall be equal to the vested balance in the Participant's Retirement
Income Account determined as of the date (the "subject valuation date") of the
latest valuations of the Investment Funds which have been completed prior to the
date of the distribution and the results of which are available on the date of
the distribution to the Committee. Such lump sum payment shall be made in cash,
except that for any payment being made on or after March 31, 1994 the
Participant may elect, on a form or writing prepared or approved by the
Committee and filed with a Plan representative prior to the date the payment is
made, that the payment is to be made partly in the form of common shares of
Federated if a portion of his Retirement Income Account then is invested in the
Investment Fund described in Section 6B below as Fund D ("Fund D"). If such
election is made, then such lump sum payment will consist of: (1) to the extent
sufficient Federated common shares are available under Fund D, Federated
common shares equal to the quotient produced by dividing the vested balance of
the portion of the Participant's Retirement Income Account which is invested in
Fund D as of the subject valuation date by the closing price (the "subject
closing price") of a Federated common share on the latest trading day of the
largest securities market in which Federated common shares are traded which
occurs on or before the subject valuation date; and (2) cash equal to the
difference between the total vested balance of the Participant's Retirement
Income Account as of the subject valuation date and the value of the Federated
common shares being distributed in the payment (as determined on the basis of
the subject closing price of a Federated common share).
8B.8 Optional Minimum Required Installment/Lump Sum Form of
Benefit. As a special option, subject to the other provisions of the Plan, a
Participant who is required to receive a retirement benefit under Section 8.1
above on his Required Commencement Date solely because he has reached such
date (and for no other reason, such as his previously having ceased to be an
Employee) may elect to receive his Profit Sharing Benefit, in lieu of the form
otherwise payable under Section 8B.2 above and provided all of the election
provisions of Section 8B.3 above are met, in a special installment form (called
here the "Installment/Lump Sum Form"). Such an election must, in addition to
the requirements set forth in Section 8B.3 above, be filed with a Plan
representative prior to his Required Commencement Date. The Committee may
require for administrative reasons that such election must be filed a reasonable
number of days or months prior to his Required Commencement Date for it to be
considered effective. The Installment/Lump Sum Form is subject to the following
provisions:
8B.8.1 Under the Installment/Lump Sum Form, a portion
of the vested balance of the Participant's Retirement Income Account is paid in
cash to the Participant (or, if he dies before payment of such part, to the
beneficiary of the Participant designated under the provisions of Section 9A.9
below) for each Distribution Year. For any Distribution Year, the amount of the
distribution shall be equal to the difference between: (1) an amount equal to
the total vested balances of all of the Participant's Accounts (determined as of
the last day of the latest calendar year which ends prior to the subject
Distribution Year) divided by the Life Expectancy of the Participant for such
Distribution Year; and (2) the amount distributed to the Participant for such
Distribution Year from his Savings and Matching Accounts under Section 8A.8
above.
8B.8.2 Further, under the Installment/Lump Sum Form, any then
remaining vested balance in the Participant's Retirement Income Account shall
be paid in a lump sum cash payment to the Participant (or, if he dies before
such payment, to the beneficiary of the Participant designated under the pro-
visions of Section 9A.9 below) within a reasonable administrative period after
the Participant ceases to be an Employee for any reason. For purposes of this
distribution, the remaining vested balance of the Participant's Retirement
Income Account shall be based on the latest valuations of the Investment Funds
which have been completed prior to the date of the distribution and the results
of which are available on such date to the Committee.
8B.8.3 The distribution to be made under the Installment/Lump
Sum Form for the Participant's first Distribution Year shall be made
on the Participant's Required Commencement Date. The distribution to be made
under the Installment/Lump Sum Form for any later Distribution Year shall be
made on a date which falls in such Distribution Year and which the Committee
determines for administrative reasons to be the date on which such distribution
is to be made in order to meet the requirements of Section 401(a)(9) of the
Code; except that, instead of a separate payment, the distribution to be made
for any Distribution Year in which the Participant ceases to be an Employee may
be paid as part of the final lump sum cash payment provided for in Section
8B.8.2 above (whenever it is paid) if (and only if) such final payment is made
in such Distribution Year. If the Participant affirmatively elects in writing
to have his Profit Sharing Benefit paid in the Installment/Lump Sum form, then
such form, once it commences, shall continue in accordance with the terms of
this Section 8B.8 which apply to such form and shall not be subject to change.
8B.8.4 For purposes of this Section 8B.8, a "Distribution Year"
means, with respect to any Participant, the latest calendar year which ends
prior to or with the latest date which could serve as the Participant's Required
Commencement Date and each later calendar year to and including the calendar
year in which the Participant ceases to be an Employee.
8B.8.5 Also for purposes of this Section 8B.8, the "Life Expectancy"
of the Participant shall be: (1) for a Distribution Year both in which the
Participant first attains age 70-1/2 (if applicable) and which begins prior to
January 1, 1993, fifteen; (2) for each and any later Distribution Year which
begins prior to January 1, 1993, fifteen less the number of calendar years which
begin after the end of the calendar year in which the Participant first attains
age 70-1/2 and end prior to or with the last day of the subject Distribution
Year; and (3) for each and any Distribution Year which begins on or after
January 1, 1993, the Participant's life expectancy divisor for such Distribution
Year. For purposes hereof, the Participant's "life expectancy divisor" for any
Distribution Year which begins on or after January 1, 1993 shall be deemed to be
the applicable multiple set forth in the latest table adopted on or before the
first day of the subject Distribution Year under Treasury Regulation Section
1.72-9 which applies to the age of the Participant on his birthday in the
subject Distribution Year. (As of the Effective Amendment Date, the table
contained in Treasury Regulation Section 1.72-9 from which a Participant's life
expectancy divisor is derived is Table V.)
8B.8.6 Notwithstanding the foregoing provisions of this
Section 8B, if the Participant has any Savings Benefit which is also being
distributed under Section 8A above on his Required Commencement Date solely
because he has reached such date, then he may elect that his Profit Sharing
Benefit is to be distributed in the Installment/Lump Sum Form only if he also
elects in writing to have his Savings Benefit distributed in the Installment/
Lump Sum Form described in Section 8A.8 above.
8B.8.7 Also notwithstanding the foregoing provisions of this
Section 8B, if (1) the Participant has any Savings Benefit which is also being
distributed under Section 8A above on his Required Commencement Date solely
because he has reached such date, (2) such Savings Benefit is distributed under
the provisions of Section 8A above in the Installment/Lump Sum Form described
in Section 8A.8 above, (3) the Participant fails to indicate in any writing to a
Plan representative the form in which he wants his Profit Sharing Benefit
distributed on his Required Commencement Date, and (4) no portion of his Profit
Sharing Benefit would be required to be paid on his Required Commencement Date
under the Installment/Lump Sum Form described in this Section 8B.8 even if such
Installment/Lump Sum Form had been elected, then the Participant shall be
deemed to have elected to receive his Profit Sharing Benefit in the form of the
Installment/Lump Sum Form described in this Section 8B.8 until the first date on
which some portion of his Profit Sharing Benefit would be required to be paid
under the Installment/ Lump Sum Form described in this Section 8B.8 (the
"Required Profit Sharing Distribution Date"). At such time, the form of the
Participant's Profit Sharing Benefit shall be redetermined under all of the
provisions of this Section 8B (disregarding only this Section 8B.8.7) as if the
Required Profit Sharing Distribution Date was the date on which the
Participant's Profit Sharing Benefit was to commence.
SECTION 9
DISTRIBUTIONS ON ACCOUNT OF DEATH
9.1 Distribution of Death Benefit. If a Participant dies, whether while
employed by the Employer or after such employment has ceased, prior to having
a retirement benefit paid (or at least commence to be paid) to him under the
provisions of Sections 8, 8A, and/or 8B above, the Participant's beneficiary
shall be entitled to receive a death benefit under the Plan. Such death
benefit, regardless of the form of payment, is payable solely from and
attributable to the vested portions of the Participant's Accounts.
9.2 Time of Death Benefit. Subject to the provisions of Section 9A
below, any death benefit payable under Section 9.1 above on behalf of a Parti-
cipant shall be distributed within a reasonable administrative period after the
Employer or the Committee receives notice of the Participant's death (and in no
event, subject only to the Employer or the Committee receiving notice of the
death, shall such benefit be distributed later than December 31 of the calendar
year next following the calendar year in which the Participant died).
9.3 Normal Form of Death Benefit -- Lump Sum Payment. Subject to the
provisions of Section 9A below and the other provisions of this Section 9, any
death benefit payable under Section 9.1 above on behalf of a Participant shall
be distributed in the form of a lump sum payment. The amount of the lump sum
payment shall be equal to the vested balances of the Participant's Accounts
determined as of the date (the "subject valuation date") of the latest
valuations of the Investment Funds which have been completed prior to the date
of the distribution and the results of which are available on the date of the
distribution to the Committee. Such lump sum payment shall be made in cash,
except that for any payment being made on or after March 31, 1994 the
Participant's beneficiary may elect, on a form or writing prepared or approved
by the Committee and filed with a Plan representative prior to the date the
payment is made, that the payment is to be made partly in the form of common
shares of Federated if a portion of the Participant's Accounts then is invested
in the Investment Fund described in Section 6B below as Fund D ("Fund D").
If such election is made, then such lump sum payment will consist of: (1) to
the extent sufficient Federated common shares are available under Fund D,
Federated common shares equal to the quotient produced by dividing the vested
balances of the portion of the Participant's Accounts which is invested in Fund
D as of the subject valuation date by the closing price (the "subject closing
price") of a Federated common share on the latest trading day of the largest
securities market in which Federated common shares are traded which occurs on or
before the subject valuation date; and (2) cash equal to the difference
between the total vested balances of the Participant's Accounts as of the
subject valuation date and the value of the Federated common shares being
distributed in the payment (as determined on the basis of the subject closing
price of a Federated common share).
9.4 Optional Annuity Form of Death Benefit Rules. Subject to Section
9A below and the other provisions of this Section 9, a Participant's beneficiary
who is entitled to a death benefit payable under Section 9.1 above on behalf of
the Participant may elect to receive such death benefit in either a Single Life
Annuity, a Life and Ten Year Certain Annuity, a Full Cash Refund Annuity, or
a Period Certain Annuity, instead of the normal form set forth in Section 9.3
above. Such an election must be made on a form or writing prepared or
approved by the Committee and filed with a Plan representative prior to the date
the death benefit is payable under the provisions of Section 9.2 above. In
addition, the election to pay a death benefit in an optional Annuity form is
subject to the following provisions:
9.4.1 The distribution of any Annuity shall be effected by the
application of an amount equal to the vested balances of the Participant's
Accounts (determined as of the latest valuations of the Investment Funds which
have been completed prior to the date of the distribution and the results of
which are available on such date to the Committee) to the purchase of a
nontransferable Annuity contract providing the applicable type of Annuity form
from an insurance company selected by the Committee and the subsequent
forwarding of such contract to the Participant's beneficiary. The purchase of
such Annuity shall be made on behalf of the Participant's beneficiary as a part
of the Plan's administrative procedures.
9.4.2 Any Annuity contract shall be purchased and distributed on
an immediate basis (i.e., payments under the contract shall begin as of a date
which coincides with the date as of which such purchase is made). As a result,
the vested balances of the Participant's Accounts shall be maintained in the
Plan until the Annuity contract is to begin payments, at which time the contract
shall be purchased.
9.4.3 The distribution of an Annuity contract hereunder shall, for all
purposes of the Plan, be deemed to constitute the full distribution of the death
benefit which is due the Participant's beneficiary.
9.4.4 Notwithstanding any other provisions of the Plan to the contrary,
the applicable beneficiary may not elect to receive the death benefit due
to be paid hereunder in an optional Annuity form if the value of such death
benefit at the time it is to be distributed is $3,500 or less. Instead, in such
case such benefit shall be distributed in a lump sum payment in accordance with
the provisions of Section 9.3 above.
9.5 Annuity Definitions. For purposes of this Section 9, the following
Annuity definitions apply:
9.5.1 "Single Life Annuity" means an Annuity payable as follows.
Monthly payments are made to a Participant's beneficiary for the beneficiary's
life and end with the last monthly payment due for the month in which the
beneficiary dies.
9.5.2 "Life and Ten Year Certain Annuity" means an Annuity payable
as follows. Monthly payments are made to a Participant's beneficiary for the
beneficiary's life, and such payments end with the last monthly payment due for
the month in which the beneficiary dies if at least 120 monthly payments have
been made on behalf of the beneficiary. If not, the monthly payments continue
after the beneficiary's death to a contingent beneficiary until 120 monthly
payments have been made, when aggregated, to the beneficiary and the contingent
beneficiary. The beneficiary shall name the contingent beneficiary in his
election of this form.
9.5.3 "Full Cash Refund Annuity" means an Annuity payable as
follows. Monthly payments are made to a Participant's beneficiary for the
beneficiary's life and end with the last monthly payment due for the month in
which the beneficiary dies. Further, if the cost of such Annuity exceeds the
total of all monthly payments made under the Annuity through the month in which
the beneficiary dies, then the amount of such excess shall be paid to a
contingent beneficiary. The beneficiary shall name the contingent beneficiary
for purposes of such Annuity in his election of this form.
9.5.4 "Period Certain Annuity" means an Annuity payable as
follows. Monthly payments are made to a Participant's beneficiary for a certain
number of months (the "period certain") and end with the payment for the last
month in such period certain. If the beneficiary dies before the end of the
period certain, then the monthly payments due for the remaining months in the
period certain after the month of the beneficiary's death shall be paid to a
contingent beneficiary. The beneficiary shall specify the period certain to be
used and name the contingent beneficiary in his election of this form. The
period certain may be of any number of months, provided it is not less than 36
months and not more than 180 months.
9.6 Designation of Beneficiary. Subject to the provisions of Section
9A below, a Participant's beneficiary for purposes of the Plan shall be deemed
to be the surviving Spouse of the Participant. The Participant may designate a
different beneficiary on a form or writing prepared or approved by the Committee
and filed with a Plan representative. Such a designation is not effective,
however, unless (1) no Spouse survives the death of the Participant (or it is
established to the satisfaction of a Plan representative that no Spouse survives
such death, the Spouse cannot reasonably be located, or there exist other
circumstances prescribed by the Secretary of the Treasury or his delegate which
warrant the disregarding of any need for Spousal consent to the designated
beneficiary) or the Spouse irrevocably consents to the different beneficiary
before the Participant's death, (2) the subject form is filed with a Plan
representative prior to the Participant's death, and (3) the designated
beneficiary survives the death of the Participant. Such different beneficiary
may consist of one or more persons, trusts, corporations, or organizations. The
Participant may amend or revoke such designation at any time prior to his death
on a form or writing prepared or approved by the Committee and filed (prior to
his death) with a Plan representative, provided that any designation of a
beneficiary other than his Spouse shall only be effective if such designation
meets all of the conditions of the second sentence of this Section 9.6. Any
consent of a Spouse required hereunder must be made in writing, acknowledge the
effect of such consent, and be witnessed by a notary public. (Prior to August
1, 1989, the Spouse's consent may be witnessed by a Plan representative instead
of a notary public.) If the Committee determines that the Participant is not
survived by a Spouse or other properly designated beneficiary, the Participant's
beneficiary for purposes of the Plan shall be deemed to be the estate of the
Participant.
SECTION 9A
SPECIAL SPOUSAL DEATH BENEFIT DISTRIBUTION RULES FOR
RETIREMENT INCOME ACCOUNTS
9A.1 Section Applies Only to Retirement Income Accounts. This
Section 9A provides special rules as to the form and time of payment and the
designation of beneficiary with respect to the part (if any) of any death
benefit payable under Section 9 above on behalf of a Participant which is
attributable to the Participant's Retirement Income Account (which part of such
benefit is referred to in this Section 9A as the Participant's "Profit Sharing
Death Benefit") when (and only when) the Participant's beneficiary for purposes
of such Profit Sharing Death Benefit is the Participant's Spouse. To the extent
the provisions of this Section 9A apply, such provisions shall govern the
payment of the Participant's Profit Sharing Death Benefit, and the provisions of
Section 9 above shall apply only to the part of the death benefit otherwise
described in Section 9 above which is attributable to the Participant's Savings
and Matching Accounts (with such part being referred to in this Section 9A as
the Participant's "Savings Death Benefit" and with any reference to the Accounts
of the Participant contained in such Section 9 above being read to refer only to
the Participant's Savings and Matching Accounts).
9A.2 Time of Profit Sharing Death Benefit. If the Participant's beneficiary
for purposes of his Profit Sharing Death Benefit is his Spouse, then the
Participant's Profit Sharing Death Benefit shall be distributed to his Spouse
within a reasonable administrative period after the later of the date the
Employer or the Committee receives notice of the Participant's death or the date
the Spouse provides a written consent to payment of such benefit (except that in
no event, subject only to the Employer or the Committee receiving notice of the
death, shall such benefit be distributed later than December 31 of the later of
the calendar year next following the calendar year in which the Participant died
or the calendar year in which the Participant would have attained age 70-1/2 had
he survived).
9A.3 Normal Form of Profit Sharing Death Benefit. If the Participant's
beneficiary for purposes of his Profit Sharing Death Benefit is his Spouse,
then, subject to the other terms of this Section 9A, such Profit Sharing Death
Benefit shall be paid to the Spouse in the form of a Single Life Annuity.
9A.4 Election Out of Normal Form. If the Spouse of a Participant is en-
titled to receive the Participant's Profit Sharing Death Benefit in the form of
a Single Life Annuity under Section 9A.3 above, the Spouse may instead elect to
waive such Single Life Annuity form and have such benefit paid in any specific
optional form permitted the Spouse under Section 9A.5 below, provided such
election is made in writing to a Plan representative (on a form or writing
prepared or approved by the Committee) both prior to the date on which the
Profit Sharing Death Benefit is otherwise distributed in the absence of this
election and within the 90 day period ending on the date on which the Profit
Sharing Death Benefit is distributed. The Spouse may amend or revoke his
election of an optional form under this Section 9A.4 by written notice filed
with a Plan representative at any time before the Profit Sharing Death Benefit
is distributed to him under the Plan.
9A.5 Optional Forms. If the Spouse of a Participant is entitled to receive
the Participant's Profit Sharing Death Benefit in the form of a Single Life
Annuity under Section 9A.3 above, the Spouse may elect to receive such benefit,
in lieu of the Single Life Annuity form and provided all of the election
provisions of Section 9A.4 above are met, in any of the following forms:
9A.5.1 A Life and Ten Year Certain Annuity;
9A.5.2 A Full Cash Refund Annuity;
9A.5.3 A Period Certain Annuity; or
9A.5.4 A lump sum payment. The amount of the lump sum
payment shall be equal to the vested balance in the Participant's Retirement
Income Account determined as of the date (the "subject valuation date") of the
latest valuations of the Investment Funds which have been completed prior to the
date of the distribution and the results of which are available on the date of
the distribution to the Committee. Such lump sum payment shall be made in cash,
except that for any payment being made on or after March 31, 1994 the Spouse
may elect, on a form or writing prepared or approved by the Committee and filed
with a Plan representative prior to the date the payment is made, that the
payment is to be made partly in the form of common shares of Federated if a
portion of the Participant's Retirement Income Account then is invested in the
Investment Fund described in Section 6B below as Fund D ("Fund D"). If such
election is made, then such lump sum payment will consist of: (1) to the extent
sufficient Federated common shares are available under Fund D, Federated common
shares equal to the quotient produced by dividing the vested balance of the
portion of the Participant's Retirement Income Account which is invested in Fund
D as of the subject valuation date by the closing price (the "subject closing
price") of a Federated common share on the latest trading day of the largest
securities market in which Federated common shares are traded which occurs on or
before the subject valuation date; and (2) cash equal to the difference between
the total vested balance of the Participant's Retirement Income Account as of
the subject valuation date and the value of the Federated common shares being
distributed in the payment (as determined on the basis of the subject closing
price of a Federated common share).
9A.6 Annuity Form of Benefit Rules. If a Participant's Profit Sharing
Death Benefit is paid in any Annuity form to the Participant's Spouse under the
provisions of this Section 9A, such Annuity form shall be subject to the
following provisions:
9A.6.1 The distribution of any Annuity under the provisions of this
Section 9A shall be effected by the application of an amount equal to the
vested balance of the Participant's Retirement Income Account (determined as of
the date of the latest valuations of the Investment Funds which have been
completed prior to the date of the distribution and the results of which are
available on such date to the Committee) to the purchase of a nontransferable
Annuity contract providing the applicable type of Annuity form from an insurance
company selected by the Committee and the subsequent forwarding of such
contract to the Participant's Spouse. The purchase of such Annuity shall be
made on behalf of the Participant's Spouse as a part of the Plan's
administrative procedures. If the Spouse receives the Savings Death Benefit
under Section 9 above in the same Annuity form as he receives the Participant's
Profit Sharing Death Benefit, the Committee may choose to purchase just one
Annuity contract to provide both such benefits.
9A.6.2 Any Annuity contract provided under this Section 9A
shall be purchased and distributed on an immediate basis (i.e., payments under
the contract shall begin as of a date which coincides with the date as of which
such purchase is made). As a result, the vested balance of the Participant's
Retirement Income Account shall be maintained in the Plan until the Annuity
contract is to begin payments, at which time the contract shall be purchased.
9A.6.3 The distribution of an Annuity contract under this
Section 9A shall, for all purposes of the Plan, be deemed to constitute the full
distribution of the benefit attributable to the Participant's Profit Sharing
Death Benefit which is due the Participant's Spouse.
9A.7 Required Lump Sum Form for Small Profit Sharing Death Benefit.
Notwithstanding any other provision of the Plan to the contrary, if the Spouse
of a Participant is entitled to receive the Participant's Profit Sharing Death
Benefit under the provisions of this Section 9A, then the Spouse shall
automatically receive such benefit in the form of a lump sum payment (and not in
any Annuity form) if the value of such benefit at the time it is to be
distributed, when added to the value of any portion of the Savings Death Benefit
which is payable to the Spouse and which the Spouse elects to receive in an
Annuity form, is $3,500 or less. The amount of the lump sum payment shall be
equal to the vested balance in the Participant's Retirement Income Account
determined as of the date (the "subject valuation date") of the latest
valuations of the Investment Funds which have been completed prior to the date
of the distribution and the results of which are available on the date of the
distribution to the Committee. Such lump sum payment shall
be made in cash, except that for any payment being made on or
after March 31, 1994 the Spouse may elect, on a form or writing prepared or
approved by the Committee and filed with a Plan representative prior to the date
the payment is made, that the payment is to be made partly in the form of
common shares of Federated if a portion of the Participant's Retirement Income
Account then is invested in the Investment Fund described in Section 6B below
as Fund D ("Fund D"). If such election is made, then such lump sum payment
will consist of: (1) to the extent sufficient Federated common shares are
available under Fund D, Federated common shares equal to the quotient produced
by dividing the vested balance of the portion of the Participant's Retirement
Income Account which is invested in Fund D as of the subject valuation date by
the closing price (the "subject closing price") of a Federated common share on
the latest trading day of the largest securities market in which Federated
common shares are traded which occurs on or before the subject valuation date;
and (2) cash equal to the difference between the total vested balance of the
Participant's Retirement Income Account as of the subject valuation date and the
value of the Federated common shares being distributed in the payment (as
determined on the basis of the subject closing price of a Federated common
share).
9A.8 Annuity Definitions. For purposes of this Section 9A, a "Single
Life Annuity," "Life and Ten Year Certain Annuity," "Full Cash Refund
Annuity," and "Period Certain Annuity" shall have the same meanings as are set
forth for such terms in Section 9.5 above; except that any reference to a
"beneficiary" contained in each such section shall be read for purposes of this
Section 9A to refer to a "Spouse."
9A.9 Designation of Beneficiary. The Spouse of a Participant shall auto-
matically be deemed to be the beneficiary of the Participant's Profit Sharing
eath Benefit, unless no Spouse survives the death of the Participant (or it is
established to the satisfaction of a Plan representative that no Spouse survives
such death, the Spouse cannot reasonably be located, or there exist other
circumstances prescribed by the Secretary of the Treasury or his delegate which
would warrant the disregarding of any need of a spousal consent to a different
beneficiary if one had been attempted to be named by the Participant). If no
Spouse survives the death of the Participant (or it is established to the
satisfaction of a Plan representative that no Spouse survives such death, the
Spouse cannot reasonably be located, or there exist other circumstances
prescribed by the Secretary of the Treasury or his delegate which would warrant
the disregarding of any need for a spousal consent to a different beneficiary if
one had been attempted to be named by the Participant), the Participant's
beneficiary for purposes of his Profit Sharing Death Benefit shall be deemed to
be the same as his beneficiary determined under Section 9.6 above.
SECTION 10
ADDITIONAL DISTRIBUTION PROVISIONS
10.1 Allocation of Contributions After Distribution. Notwithstanding
any provision of the Plan to the contrary, any contributions which are allocated
to any Account of a Participant as of a date which is on or prior to the date of
a complete distribution of the vested balance of such Account to the Participant
(or his beneficiary) under Sections 8, 8A, 8B, 9, and/or 9A above but which are
actually paid to the Trust after the date of such distribution and any
contributions which both are allocated to such Account and actually paid to the
Trust after the date of such distribution (such contributions being referred to
herein in either case as "late contributions") shall be disregarded in the
determination of the amount of the vested balance of such Account to be
distributed. Instead, any late contributions shall (to the extent the
Participant is vested in such amounts under the other provisions of the Plan) be
paid within a reasonable administrative period after they are
actually paid to the Trust to the Participant (or, if the Participant dies
before such payment, to the appropriate beneficiary of the Participant under
the other provisions of the Plan) in accordance with the other provisions of the
Plan concerning benefit forms and assuming for such purpose that such late
contributions were the sole retirement benefit applicable to the Participant.
10.2 Determination of Proper Party For Distribution and Forfeiture
When Proper Party Cannot Be Located. The facts as shown by the records of the
Committee at the time of any payment due under the Plan shall be conclusive as
to the proper payee and of the amounts properly payable, and payment made in
accordance with such state of facts shall constitute a complete discharge of any
and all obligations under the Plan. If a Participant (or a person claiming
through him) who is entitled to a benefit hereunder cannot reasonably be
located, then such benefit may, in the discretion of the Committee, continue to
be held for the Participant or may be forfeited. If, however, such benefit is
forfeited but the lost Participant (or person claiming through him) thereafter
makes a claim for the amount previously forfeited hereunder, such benefit shall
be restored and paid to the proper party (without any interest credited on the
previously forfeited benefit) as soon as administratively possible. If the
amount of the forfeitures arising under the Plan for any Plan Year which are
applied under Section 8.4 above to make restorals required under this Section
10.2 for such Plan Year are insufficient to make all of the restorals required
under this Section 10.2 for such Plan Year, then the amount of such required
restorals shall be paid by the Employer to the Trust as a special contribution
in order to allow the Trust to make the required payments.
10.3 Reemployed Participant. Notwithstanding any other provision of the
Plan to the contrary, if a Participant in this Plan who ceased to be an Employee
and became thereby entitled to the distribution of all or any part of his
Plan Accounts resumes employment as an Employee prior to his Required
Commencement Date, the Committee shall then direct the Trustee to postpone or
cease distribution of such Accounts, to the extent such action is
administratively possible (e.g., no Annuity contract has been purchased), until
the Participant's later termination of employment (or, if earlier, his Required
Commencement Date).
10.4 Nonalienation of Benefits. To the extent permitted by law, no benefit
payable under the Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, whether voluntary or
involuntary, nor shall any such benefit be in any manner liable for or subject
to the debts, contracts, liabilities, engagements, or torts of the person
entitled to such benefit. The Committee shall, however, adopt procedures to
allow benefits to be assigned in connection with qualified domestic relations
orders (as defined in and in accordance with the provisions of Section 206(d) of
ERISA and Section 414(p) of the Code). In this regard, effective as of
September 1, 1990, the Plan shall permit a lump sum cash payment to be made at
any time to a Participant's alternate payee (as also is defined in ERISA Section
206(d) and Code Section 414(p)) if directed by a qualified domestic relations
order, even if the Participant has not yet ceased to be an Employee and has not
attained his earliest retirement date (again as defined in ERISA Section 206(d)
and Section 414(p) of the Code). Further, the Plan shall permit any such
alternate payee to have the same rights to direct the
investment of any part of any Account which is held under the Plan on
behalf of the alternate payee pursuant to a qualified domestic relations order
as a Participant would have.
10.5 Incompetency. Every person receiving or claiming benefits under
the Plan shall be conclusively presumed to be mentally or legally competent and
of age until the date on which the Committee receives written notice that such
person is incompetent or a minor for whom a guardian or other person legally
vested with the care of his person or estate has been appointed. If the
Committee finds that any person to whom a benefit is payable under the Plan is
unable to care for his affairs because he is incompetent or is a minor, any
payment due (unless a prior claim therefor has been made by a duly appointed
legal representative) may be paid to the spouse, a child, a parent, a brother,
or a sister of such person, or to any person or institution deemed by the
Committee to have incurred expense for such person. If a guardian of the estate
of any person receiving or claiming benefits under the Plan is appointed by a
court of competent jurisdiction, benefit payments may be made to such guardian
provided that proper proof of appointment and continuing qualification is
furnished in a form and manner acceptable to the Committee. Any payment made
pursuant to this Section 10.5 shall be a complete discharge of liability
therefor under the Plan.
10.6 Legal Distribution Limits.
10.6.1 Notwithstanding any other provision of this Plan to
the contrary, any payment of a retirement or death benefit in any form must meet
and be in accordance with the distribution requirements of Section 401(a)(9) of
the Code, including the incidental death benefit requirements which are referred
to in such section, and such section is hereby incorporated by reference into
this Plan. In this regard, the Plan shall be construed in accordance with any
final regulations (or, in the absence of final regulations, proposed
regulations) of the Secretary of the Treasury or his delegate which are issued
under Section 401(a)(9) of the Code.
10.6.2 In addition to the restrictions on distributions set forth
in the other provisions of the Plan, and subject to changes in the applicable
regulations, Code Section 401(a)(9) generally requires that:
(a) No Annuity form may be provided to a Participant unless
such Annuity is payable over the life of the Participant, the lives of the
Participant and a contingent beneficiary under the Annuity, or a period certain
which does not exceed the life expectancy of the Participant or the joint life
and last survivor expectancy of the Participant and such contingent beneficiary.
Any such life expectancy or joint life and last survivor expectancy is to be
computed by use of the expected return multiples in Tables V and VI of Treas.
Reg. Section 1.72-9 and to be based on the Participant's age and, if applicable,
the contingent beneficiary's age on his or their birthdays in the first
distribution year applicable to the Participant. For purposes hereof, a
Participant's "first distribution year" means the last calendar year which ends
prior to or with the latest date which could serve as the Participant's Required
Commencement Date.
(b) No Life and Ten Year Certain Annuity may be provided
to a Participant unless the attained age of the Participant on his birthday
in the calendar year in which the Annuity payments commence is younger than
age 91.
(c) Any Period Certain Annuity payable to a Participant
shall be adjusted to the extent necessary so that the Participant (or, after his
death, the contingent beneficiary under the Annuity) receives the equivalent of
twelve monthly payments under such Annuity by the latest date which could serve
as the Participant's Required Commencement Date and the equivalent of twelve
monthly payments by the end of each calendar year which ends after such date.
This requirement can be met by increasing one or more monthly payments under
the Annuity to the extent necessary to meet such requirement.
(d) No Annuity form may be provided to a Participant's
beneficiary (under the provisions of Sections 9 and/or 9A above), unless such
Annuity is payable over the life of the beneficiary or a period certain which
does not exceed the life expectancy of the beneficiary. Any such life
expectancy is to be computed by use of the expected return multiples in Table V
of Treas. Reg. Section 1.72-9 and is to be based on the beneficiary's age on his
birthday in the calendar year in which the distribution is required to begin.
(e) Any Period Certain Annuity payable to a Participant's
beneficiary (under the provisions of Sections 9 and/or 9A above)
shall be adjusted to the extent necessary so that the beneficiary (or, after his
death, the contingent beneficiary under the Annuity) receives the equivalent of
twelve monthly payments under such Annuity by the end of the calendar year in
which the distribution is required to begin and the equivalent of twelve monthly
payments by the end of each subsequent calendar year. This requirement can be
met by increasing one or more monthly payments under the Annuity to the extent
necessary to meet such requirements.
(f) Any Annuity provided under the Plan shall not be
able to be changed once payments are to begin thereunder, except to the extent
otherwise provided in this Plan.
10.7 Distribution Form Notices. The Plan shall provide a Participant
(or a beneficiary) with notices as to the forms in which he may receive any
retirement (or death) benefit to which he is entitled at such times as shall
allow the person to make a choice among his options. In this regard, the Plan
shall rovide any written explanations to a Participant (or a beneficiary) under
Code Section 417(a)(3) to the extent such explanations apply to the Participant.
Further, if any distribution to a Participant made under the Plan is one to
which Code Sections 401(a)(11) and 417 do not apply, such distribution may
commence less than 30 days after the notice required under Treas. Reg. Section
1.411(a)-11(c) is given, provided that: (1) the Participant is clearly informed
that he has a right to a period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option); and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
10.8 Direct Rollover Distributions.
10.8..1 This Section 10.8 applies to distributions made on
or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this Section
10.8, a distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution otherwise
payable to him paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
10.8.2 For purposes of this Section 10.8, the following
terms shall have the meanings indicated below:
(a) An "eligible rollover distribution" means, with respect
to any distributee, any distribution of all or any portion of the entire benefit
otherwise payable under the Plan to the distributee, except that an eligible
rollover distribution does not include: (1) any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; (2) any
distribution to the extent such distribution is required to be made under
Section 401(a)(9) of the Code; and (3) the portion of any distribution that is
not includible in gross income of the distributee for purposes of Federal income
tax.
(b) An "eligible retirement plan" means, with respect to any
distributee's eligible rollover distribution, an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to a distributee who is a
distributee by reason of being the surviving spouse of a Participant, an
"eligible retirement plan" means only an individual retirement account described
in Section 408(a) of the Code or an individual retirement annuity described in
Section 408(b) of the Code.
(c) A "distributee" means a Participant. In addition, a Parti-
cipant's surviving spouse, or a Participant's spouse or former spouse who is
the alternate payee under a qualified domestic relations order (as defined in
Section 414(p) of the Code), is a distributee with regard to any interest of the
Participant which becomes payable under the Plan to such spouse or former
spouse.
(d) A "direct rollover" means, with respect to any distributee,
a payment by the Plan to an eligible retirement plan specified by the
distributee.
10.8.3 The Committee may prescribe reasonable rules in
order to provide for the Plan to meet the provisions of this Section 10.8. Any
such rules shall comply with the provisions of Code Section 401(a)(31) and any
applicable Treasury regulations which are issued with respect to the direct
rollover requirements. For example, subject to meeting the provisions of Code
Section 401(a)(31) and applicable Treasury regulations, the Committee may: (1)
prescribe the specific manner in which a direct rollover will be made by the
Plan, whether by wire transfer to the eligible retirement plan, by mailing a
check to the eligible retirement plan, by providing the distributee a check made
payable to the eligible retirement plan and directing the distributee to deliver
the check to the eligible retirement plan, and/or by some other method;
(2) prohibit any direct rollover of any eligible rollover distributions payable
during a calendar year to a distributee when the total of such distributions is
less than $200; or (3) refuse to make a direct rollover of an eligible rollover
distribution to more than one eligible retirement plan.
SECTION 11
NAMED FIDUCIARIES
Any person, committee, or entity which is designated or appointed under the
Plan or the Trust (or under a procedure set forth in the Plan or the Trust) to
have any responsibility for the control, management, or administration of this
Plan or the assets thereof (each such fiduciary being hereinafter referred to
individually as a "Named Fiduciary" and collectively as the "Named Fiduciaries")
shall have only such powers and responsibilities as are expressed in the Plan or
the Trust or are provided for in the procedure by which he or it is designated
or appointed, and any power or responsibility for the control, management, or
administration of the Plan or Trust Fund which is not expressly allocated to any
Named Fiduciary, or with respect to which an allocation is in doubt, shall be
deemed allocated to Federated. Each Named Fiduciary shall have no responsi-
bility to inquire into the acts or omissions of any other Named Fiduciary
in the exercise of powers or the discharge of responsibilities assigned to such
other Named Fiduciary under the Plan.
Any Named Fiduciaries may, by agreement among themselves, allocate
any responsibility or duty, other than the responsibility of the Trustee for the
management and control of the Trust Fund within the meaning of Section 405(c)
of ERISA, assigned to a Named Fiduciary hereunder to one or more other Named
Fiduciaries, provided, however, that any agreement respecting such allocation
must be in writing and filed with the Committee for placement with the records
of the Plan. No such agreement shall be effective as to any Named Fiduciary
which is not a party thereto until such Named Fiduciary has received written
notice of such agreement from the Named Fiduciaries involved. Any Named
Fiduciary may, by written instrument filed with the Committee for placement with
the records of the Plan, designate a person who is not a Named Fiduciary to
carry out any of its responsibilities under the Plan, other than the responsi-
bility of the Trustee for the management and control of the Trust Fund within
the meaning of Section 405(c) of ERISA, provided, however, that no such
designation shall be effective as to any other Named Fiduciary until such other
Named Fiduciary has received written notice thereof.
Any Named Fiduciary, or a person designated by a Named Fiduciary to
perform any responsibility of a Named Fiduciary pursuant to the procedure
described in the preceding paragraph, may employ one or more persons to render
advice with respect to any responsibility such Named Fiduciary has under the
Plan or such person has by reason of such designation. A person may serve the
Plan in more than one fiduciary capacity and may be a Participant.
SECTION 12
ADMINISTRATIVE AND INVESTMENT COMMITTEE
12.1 Appointment of Committee. The Board of Directors of Federated
(the "Board") shall appoint the Committee, the members of which may be officers
or other employees of the Employer or any other persons. The Committee shall
be composed of not less than three nor more than 15 members, each of whom
shall serve at the pleasure of the Board, and vacancies in the Committee arising
by reason of resignation, death, removal, or otherwise shall be filled by the
Board. Any member may resign of his own accord by delivering his written
resignation to the Board.
12.2 General Powers of Committee.
12.2.1 The Committee shall administer the Plan, is
authorized to make such rules and regulations as it may deem necessary to carry
out the provisions of the Plan, and is given complete discretionary authority to
determine any person's eligibility for benefits under the Plan, to construe the
terms of the Plan, and to decide any other matters pertaining to the Plan's
administration. The Committee shall determine any question arising in the
administration, interpretation, and application of the Plan, which determination
shall be binding and conclusive on all persons. In the administration of the
Plan, the Committee may: (1) employ or permit agents to carry out nonfiduciary
and/or fiduciary responsibilities (other than trustee responsibilities as
defined in Section 405(c)(3) of ERISA), (2) provide for the allocation of
fiduciary responsibilities (other than trustee responsibilities as defined in
Section 405(c)(3) of ERISA) among its members, and (3) limit to the extent it
deems advisable the maximum percent of Compensation which a Participant who is
then believed by the Committee to be a Highly Compensated Employee may elect to
have contributed to the Plan as Pre-Tax Savings Contributions and/or After-Tax
Savings Contributions for a specific Plan Year. Actions dealing with fiduciary
responsibilities shall be taken in writing and the performance of agents,
counsel, and fiduciaries to whom fiduciary responsibilities have been delegated
shall be reviewed periodically.
12.2.2 Further, the Committee shall administer the Plan and adopt such
rules and regulations as in the opinion of the Committee are necessary
or advisable to implement and administer the Plan and to transact its business.
In performing their duties, the members of the Committee shall act solely in the
interest of the Participants of the Plan and their beneficiaries and:
(a) for the exclusive purpose of providing benefits to
Participants and their beneficiaries;
(b) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims; and
(c) in accordance with the documents and instruments
governing the Plan insofar as such documents and instruments are consistent with
the provisions of title I of ERISA.
12.2.3 Notwithstanding the foregoing provisions of this
Section 12.2, if the Committee cannot reasonably and economically determine or
verify, with respect to an Employee or a class of Employees, service, compen-
sation, date of hire, date of termination, or any other pertinent factor in
the administration of the Plan, the Committee shall adopt, with respect to such
Employee or class of Employees, reasonable and uniform assumptions regarding
the determination of such factor or factors, provided that no such assumption
shall (1) discriminate in favor of Highly Compensated Employees, (2) reduce or
eliminate a protected benefit (within the meaning of Treas. Reg. Section
1.411(d)4), or (3) operate to the disadvantage of such Employee or class of
Employees.
12.2.4 The Committee shall also establish guidelines with
respect to the investment of all funds held by the Trustee under the Plan and to
make or direct all investments pursuant thereto.
12.2.5 For purposes hereof, any party which has been
authorized by the Plan or under a procedure authorized under the Plan to perform
fiduciary and/or nonfiduciary administrative duties hereunder, whether such
party is the Committee, Federated, an agent appointed or permitted by the
Committee to carry out its duties, or otherwise, shall, when properly acting
within the scope of his or its authority, sometimes be referred to in the Plan
as a "Plan representative" or, if appointed by the Committee directly to be an
agent thereof, a "Committee representative."
12.3 Records of Plan. The Committee shall maintain or cause to be main-
tained records showing the fiscal transactions of the Plan, and shall keep or
cause to be kept in convenient form such data as may be necessary for valuations
of assets and liabilities of the Plan. The Committee shall prepare or have pre-
pared annually a report showing in reasonable detail the assets and liabilities
of the Plan and giving a brief account of the operation of the Plan for the past
Plan Year. In preparing this report, the Committee may rely on advice received
from the Trustee or other persons or firms selected by it or may adopt a report
on such matters prepared by the Trustee. Such report shall be submitted to the
Board and shall be filed in the office of the Secretary of the Committee.
12.4 Actions of Committee. The Committee shall appoint a Chairman
and a Secretary and such other officers, who may be, but need not be, members
of the Committee, as it shall deem advisable. The Committee shall act by a
majority of its members at the time in office, and any such action may be taken
either by a vote at a meeting or in writing without a meeting. The Committee
may by such majority action appoint subcommittees and may authorize any one
or more of the members or any agent to execute any document or documents or
to take any other action, including the exercise of discretion, on behalf of the
Committee. The Committee may provide for the allocation of responsibilities for
the operation and maintenance of the Plan.
12.5 Compensation of Committee and Payment of Plan Administrative
and Investment Charges. Unless otherwise determined by the Board, the
members of the Committee shall serve without compensation for services as such.
All expenses of administration of the Plan (excluding brokerage fees, expenses
related to securities transactions, and any taxes on the assets held in the
Trust Fund, which expenses shall only be payable out of the Trust Fund),
including, without limitation, the fees and charges of the Trustee, any
investment manager, any attorney, any accountant, any specialist, or any other
person employed by the Committee or the Employer in the administration of the
Plan, shall be paid out of the Trust Fund (or, if the Employer so elects, by the
Employer directly). In this regard, the Plan administrative and investment
expenses which shall be paid out of the Trust Fund (unless the Employer elects
to pay them itself) shall also include compensation payable to any employees of
the Employer or any Affiliated Employer who perform administrative or investment
services for the Plan to the extent such compensation would not have been
sustained had such services not been provided, to the extent such compensation
can be fairly allocated to such services, to the extent such compensation does
not represent an allocable portion of overhead costs, and to the extent such
compensation does not fail for some other reason to constitute a "direct
expense" within the meaning of 29 C.F.R. 2550.408c-2(b)(3).
12.6 Limits on Liability. Federated and each other Employer shall hold
each member of the Committee harmless from any loss, damage, or depreciation
which may result in connection with the execution of his duties or the exercise
of his discretion or from any other act or omission hereunder, except when due
to his own gross negligence or willful misconduct. Federated and each other
Employer shall indemnify and hold harmless each member of the Committee from
any and all claims, losses, damages, expenses (including counsel fees approved
by the Committee), and liabilities (including any amounts paid in settlement
with the Committee's approval) arising from any act or omission of such member,
except when the same is judicially determined to be due to the gross negligence
or willful misconduct of such member.
12.7 Claims Procedure. Pursuant to procedures established by the
Committee, adequate notice in writing shall be provided to any Participant or
beneficiary whose claim for benefits under the Plan has been denied. Such
notice shall set forth the specific reason for such denial, written in a manner
calculated to be understood by the claimant, and, provided review is requested
within 60 days after receipt by the claimant of written notification of denial
of his claim, shall afford a reasonable opportunity to any claimant whose claim
for benefits has been denied to a full and fair review of the decision denying
the claim.
12.8 Limits on Duties. The Committee shall have no duty to verify inde-
pendently any information supplied by the Employer and shall have no duty or
responsibility to collect from the Employer all or any portion of any Employer
ontribution to the Plan. The Committee also shall have no duty or
responsibility to verify the status of any Employee or former Employee under
this Plan or to determine the identity or address of any person who is or may
become entitled to the payment of any benefit from this Plan, and the Committee
shall be entitled to delay taking any action respecting the payment of any
benefit until the identity of the person entitled to such benefit and his
address have been certified by the Employer.
12.9 Appointment of Investment Manager.
12.9.1 The Committee, as a Named Fiduciary under the Plan, may
appoint in writing a person, or more than one person, who (1) is registered
as an investment adviser under the Investment Advisers Act of 1940 (the "Act"),
(2) is a Bank, as defined in the Act, or (3) is an insurance company
which is qualified, within the meaning of Section 3(38) of ERISA, to manage,
acquire, and dispose of the assets of an employee benefit plan, as an investment
manager for all or a specified portion of the assets of the Trust Fund or any
Investment Fund thereof. A person who is appointed as an investment manager
shall have the sole power, without prior consultation with the Trustee, to
manage and direct the acquisition and disposition of the assets of the Trust
Fund which specifically are allocated by the Committee to that person's
management account (his "Management Account"). The Committee at its discretion
may terminate the appointment of any person as an investment manager and may
cause assets to be added or deleted from any such person's Management Account.
12.9.2 The effective date of the appointment of a person as
an investment manager shall be the date such person delivers to the Committee
and to the Trustee a written statement which in the Committee's judgment
adequately covers items (a) through (d) below:
(a) An acknowledgment (1) that such person is a Plan
fiduciary within the meaning of Section 3(21)(A) of ERISA and (2) that such
person has assumed sole responsibility for the management and the direction of
the acquisition and disposition of the Trust Fund assets in his Management
Account;
(b) A representation that such person is registered as an
investment adviser under the Act, is a Bank as defined in the Act, or as an
insurance company has the power within the meaning of Section 3(38)(A) of
ERISA to manage, acquire, and dispose of the assets of an employee benefit plan;
(c) The names and signatures of individuals who are
authorized to act on behalf of such person in connection with the management of
his Management Account (the "List"), which List may be amended from time to
time by delivering written notice thereof to the Committee and to the Trustee
and which List may be relied upon by them; and
(d) If appropriate and negotiable, an agreement that such
person shall immediately notify the Committee of the commencement of any
Securities and Exchange Commission investigation of any of his investment
activities which may result either in a censure under the Act or in the
suspension or revocation of his registration as an investment adviser under the
Act.
12.9.3 The Committee may enter into a contract with an
investment manager in connection with his appointment as such, which agreement
may be subject to such terms and conditions as the Committee deems appropriate
under the circumstances, including the following types of provisions:
(a) The appointment as investment manager may be
terminated on the delivery of 30 days' prior written notice;
(b) If appropriate, the appointment shall be automatically
terminated in the event the investment manager's registration as an investment
adviser under the Act is suspended or revoked, such automatic termination to be
effective coincident with such suspension or revocation;
(c) The investment manager shall make reports to the
Committee describing all transactions with respect to his Management Account
for each agreed upon reporting period; and
(d) All fees or other agreed upon compensation for
services rendered to the Plan by the investment manager shall be paid out of the
Trust Fund (or, if the Employer so elects, by the Employer directly).
12.9.4 An investment manager may exercise his powers
through written directions or, at his option, may communicate such directions
orally and as soon as practicable thereafter confirm them in writing, provided
all directions, written or oral, shall be communicated by or, as applicable,
signed by one of the individuals whose name and signature appear on the List, or
the investment manager may communicate and confirm such instructions in any
manner agreed upon between the investment manager and the Trustee. The Trustee
shall follow all such directions from an investment manager, and shall not be
liable in any respect to any person for acting in accordance with such
directions or for failing to act in the absence of such directions. Pending
receipt of directions from the investment manager, any cash received by the
Trustee from time to time for his Management Account may be retained by it in
short-term investments as may be prudent under all of the facts and
circumstances then prevailing, including, without limitation, savings accounts,
commingled short-term investment funds, commercial paper, and governmental
securities.
12.9.5 The Committee shall establish an investment policy
for each investment manager and such policy shall preclude investments in
employer securities and employer real property within the meaning of Section 407
of ERISA except to the extent that such investments are allowable under ERISA.
The Committee in addition shall implement an investment manager performance
review procedure and pursuant thereto shall regularly review the performance of
the investment manager to determine whether his appointment as such should be
continued. The period between such reviews shall be determined by considering
all the relevant facts and circumstances, including the volume of Trust Fund
transactions.
SECTION 13
TERMINATION OR AMENDMENT
13.1 Right to Terminate. Federated and each other Employer expects
this Plan to be continued indefinitely, but Federated reserves the right to
terminate or to partially terminate the Plan or to completely discontinue
contributions to it.
13.2 Full Vesting Upon Termination or Complete Discontinuance of
Contributions. Should this Plan be terminated or partially terminated or if
contributions to the Plan are completely discontinued, then each affected
Participant shall immediately become fully vested and nonforfeitable in his Plan
Accounts (determined as of the date of the complete or partial termination or
complete discontinuance of contributions).
13.3 Effect of Termination of Plan or Complete Discontinuance of
Contributions.
13.3.1 Upon a complete or partial termination of the Plan
or complete discontinuance of contributions to the Plan, the Committee shall
determine, and direct the Trustee accordingly, from among the following
methods, the method of discharging and satisfying all obligations on behalf of
Participants affected by the complete or partial termination or complete
discontinuance of contributions: (1) by the continuation of the Trust and the
distribution to Participants and their beneficiaries of the Participants' Plan
Accounts due under the terms of the Plan as in effect immediately prior to the
complete or partial termination or discontinuance of contributions, (2) by the
liquidation and distribution of the assets of the Trust, (3) by the purchase of
Annuity contracts, or (4) by a combination of such methods. Any distributions
made by reason of the complete or partial termination of the Plan or complete
discontinuance of contributions shall continue to meet the provisions of the
Plan concerning the form in which distributions from the Plan must be made.
13.3.2 Any amounts held under the Trust which are not able to be
allocated to any Participants' Accounts under the terms of the Plan as of the
ate of a complete termination of the Plan (treating such date as if it were the
same as the last day of a Plan Year) shall be allocated among the Matching
Accounts of those Participants who were employed as Covered Employees during
the Plan Year in which the Plan's complete termination occurs, in proportion to
each such Participant's Compensation for the period beginning on the first day
of the Plan Year in which such complete termination occurs and ending on the
date of such complete termination, and, to the extent such amounts cannot be
allocated to any Participants' Accounts by reason of the maximum annual
addition limitations of the Plan set forth in Section 6A above, they shall be
returned to the Employer.
13.4 Amendment of Plan.
13.4.1 Subject to the other provisions of this Section 13.4,
Federated may amend this Plan at any time and from time to time in any respect,
provided that no such amendment shall make it possible, at any time prior to the
satisfaction of all liabilities with respect to Participants, for any part of
the income or corpus of the Trust Fund to be used for or diverted to any purpose
other than for the exclusive benefit of Participants and their beneficiaries.
13.4.2 It is provided, however, that, except as is otherwise
permitted in Section 411(d)(6) of the Code or in Treasury regulations issued
thereunder, no amendment to the Plan shall decrease any Participant's Accrued
Benefit. In addition, except as is otherwise permitted in Section 411(d)(6) of
the Code or in Treasury regulations issued thereunder, no amendment to the Plan
which eliminates or reduces an early retirement benefit or eliminates an
optional form of benefit shall be permitted with respect to any Participant who
meets (either before or after the amendment) the pre-amendment conditions for
such early retirement or optional form of benefit, to the extent such early
retirement or optional form of benefit is based and calculated on the basis of
the Participant's Accrued Benefit determined at the time of such amendment.
13.4.3 Also, notwithstanding any other provisions hereof
to the contrary, no Plan amendment (including any change made by this Plan
amendment and restatement) which changes any vesting schedule or affects the
computation of the nonforfeitable percentage of Accounts under the Plan shall be
deemed to reduce the amount of the vested portion of any Account of a
Participant below the amount of the vested portion of such Account, as deter-
mined as of the later of the date such amendment is adopted or the date such
amendment becomes effective, computed under the Plan without regard to such
amendment. Further, if a Plan amendment (including any change made by this
Plan amendment and restatement) is adopted which changes any vesting schedule
under the Plan or if the Plan is amended in any way which directly or indirectly
affects the computation of a Participant's nonforfeitable percentage, each
Participant who has completed at least three years of Vesting Service (as
defined in Section 2.1.10 above, disregarding for this purpose paragraph (b) of
Section 2.1.10 above) may elect, within the election period, to have his non-
forfeitable percentage computed under the Plan without regard to such amendment.
For purposes hereof, the "election period" is a period which begins on the date
the Plan amendment is adopted and ends on the date which is 60 days after the
latest of the following days: (1) the day the Plan amendment is adopted, (2) the
day the Plan amendment becomes effective, or (3) the day the Participant is
issued a written notice of the Plan amendment by Federated or the Committee.
SECTION 14
TOP HEAVY PROVISIONS
14.1 Determination of Whether Plan Is Top Heavy. For purposes of this
Section 14, this Plan shall be considered a "Top Heavy Plan" for any Plan Year
if, and only if, (1) this Plan is an Aggregation Group Plan during at least part
of such Plan Year, and (2) the ratio of the total Present Value of all accrued
benefits of Key Employees under all Aggregation Group Plans to the total Present
Value of all accrued benefits of both Key Employees and Non-Key Employees
under all Aggregation Group Plans equals or exceeds 0.6. All calculations
called for in clauses (1) and (2) above with respect to this Plan shall be made
as of the Determination Date which is applicable to the subject Plan Year, and
all calculations called for under clause (2) above with respect to any
Aggregation Group Plan other than this Plan shall be made as of that plan's
Determination Date which falls within the same calendar year as the
Determination Date being used by this Plan. For the purpose of this Section 14,
the following terms shall have the meanings hereinafter set forth:
14.1.1 Aggregation Group Plan. "Aggregation Group Plan" refers,
with respect to any plan year of such plan, to a plan (1) which qualifies under
Code Section 401(a) or as a simplified employee pension plan under Code Section
408 (k), (2) which is maintained by the Employer or an Affiliated Employer, and
(3) which either includes a Key Employee as a participant (determined as of the
Determination Date applicable to such plan year) or allows another plan
qualified under Code Section 401(a), maintained by the Employer or an Affiliated
Employer, and so including at least one Key Employee as a participant to meet
the requirements of Section 401(a)(4) or Section 410(b) of the Code. In
addition, the Employer may treat any plan which meets clauses (1) and (2) but
not (3) of the immediately preceding sentence as an "Aggregation Group Plan"
with respect to any plan year of such plan if the group of such plan and all
other Aggregation Group Plans shall meet the requirements of Sections 401(a)(4)
and 410(b) of the Code with such plan being taken into account.
14.1.2 Determination Date. The "Determination Date" which is applicable
to any plan year of an Aggregation Group Plan refers to the last day of the
immediately preceding plan year (except that, for the first plan year of such a
plan, the "Determination Date" applicable to such plan year shall be the last
day of such first plan year).
14.1.3 Key Employee. With respect to any Aggregation Group
Plan and as of any Determination Date, a "Key Employee" refers to a person who
at any time during the plan year which includes such Determination Date or
during any of the four immediately preceding plan years is an employee of the
Employer or an Affiliated Employer and:
(a) An officer (disregarding any person with the title but not
the authority of an officer) of the Employer or an Affiliated Employer, provided
such person receives compensation from the Employer and the Affiliated
Employers of an amount greater than 50% of the amount in effect under Section
415(b)(1) (A) of the Code (i.e., the maximum dollar limit for defined benefit
plans) for an applicable plan year in which he is such an officer. For this
purpose, no more than 50 employees (or, if less, the greater of three or 10% of
the employees of the Employer and all Affiliated Employers) shall be treated as
officers;
(b) One of the ten employees directly owning (or considered
as owning within the meaning of Code Section 318, except that subparagraph (C)
of Code Section 318(a)(2) shall be applied by substituting "5%" for "50%") the
largest employee-held interests in the Employer and the other Affiliated
Employers, provided such person owns at least 0.5% of the Employer or any
Affiliated Employer and receives compensation from the Employer and the other
Affiliated Employers of an amount greater than the amount in effect under Code
Section 415(c)(1)(A) (i.e., the maximum dollar annual addition limit for defined
contribution plans) for an applicable plan year in which he is such an employee.
For this purpose, if two employees have the same interest in the Employer and
the other Affiliated Employers, the employee having the greater annual
compensation from the Employer and the Affiliated Employers shall be treated
as having a larger interest;
(c) A 5% or more owner of the Employer; or
(d) A 1% or more owner of the Employer who receives
compensation of $150,000 or more from the Employer and the other Affiliated
Employers for an applicable plan year in which he owns such interest.
For purposes of paragraphs (c) and (d) above, a person is considered to own 5%
or 1%, as the case may be, of the Employer if he owns (or is considered as
owning within the meaning of Code Section 318, except that subparagraph (C) of
Code Section 318(a)(2) shall be applied by substituting "5%" for "50%") at least
5% or 1%, as the case may be, of either the outstanding stock of the Employer
or the voting power of all stock of the Employer. Further, for purposes of this
entire Section 14.1.3, the term "Key Employee" includes any person who is
deceased as of the subject Determination Date but who when alive had been a
Key Employee during the plan year which includes the subject Determination
Date or any of the four immediately preceding plan years, and any accrued
benefit payable to his beneficiary shall be deemed to be the accrued benefit of
such person.
14.1.4 Non-Key Employee. With respect to any Aggregation
Group Plan and as of any Determination Date, a Non-Key Employee refers to a
person who at any time during the plan year which includes such Determination
Date or during any of the four immediately preceding plan years is an employee
of the Employer or an Affiliated Employer and who has never been considered
a Key Employee as of such or any earlier Determination Date. Further, for
purposes of this Section 14.1.4, the term "Non-Key Employee" includes any
person who is deceased as of the subject Determination Date and who when alive
had been an employee of the Employer or an Affiliated Employer during the plan
year which includes the subject Determination Date or any of the four
immediately preceding plan years, but had not been a Key Employee as of the
subject or any earlier Determination Date, and any accrued benefit payable to
his beneficiary shall be deemed to be the accrued benefit of such person.
14.1.5 Present Value of Accrued Benefits.
(a) For any Aggregation Group Plan which is a defined benefit
plan (as defined in Code Section 414(j)), including such a plan which has
been terminated, the "Present Value" of a participant's accrued benefit, as
determined as of any Determination Date, refers to the single sum value
(calculated as of the latest Valuation Date which coincides with or precedes
such Determination Date and in accordance with the actuarial assumptions adopted
under such defined benefit plan for valuing single sum forms of benefits for
purposes of such plan's top-heavy provisions which are in effect as of such
Valuation Date) of the monthly retirement or termination benefit which the
participant had accrued under such plan to such Valuation Date. For this
purpose, such accrued monthly retirement or termination benefit is calculated as
if it was to first commence as of the first day of the month next following the
month the participant first attains his normal retirement age under such plan
(or, if such normal retirement age had already been attained, as of the first
day of the month next following the month in which occurs such Valuation Date)
and as if it was to be paid in the form of a single life annuity. Also, the
accrued benefit of any participant under such plan (other than a participant who
is a Key Employee) shall be determined under the method which is used for
accrual purposes for all plans of the Employer and the Affiliated Employers (or,
if there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rates permitted under Section 411(b) (1)(C) of the Code). In
addition, the dollar amount of any distributions made from the plan (including
the value of any annuity contract distributed from the plan) actually paid to
such participant prior to the subject Valuation Date but still within the plan
year which includes such Valuation Date or one of the four immediately preceding
plan years shall be added in calculating such "Present Value" of the
participant's accrued benefit.
(b) For any Aggregation Group Plan which is a defined contri-
bution plan (as defined in Code Section 414(i)), including such a plan which
as been terminated, the "Present Value" of a participant's accrued benefit, as
determined as of any Determination Date, refers to the sum of (1) the total of
the participant's account balances under the plan (valued as of the latest
Valuation Date which coincides with or precedes such Determination Date), and
(2) an adjustment for contributions due as of such Determination Date. In the
case of a profit sharing or stock bonus plan, the adjustment in clause (2) above
shall be the amount of the contributions, if any, actually made after the
subject Valuation Date but on or before such Determination Date (and, in the
case of the first plan year, any amounts contributed to the plan after such
Determination Date which are allocated as of a date in such first plan year).
In the case of a money purchase pension or target benefit plan, the adjustment
in clause (2) above shall be the amount of the contributions, if any, which are
either actually made or due to be made after the subject Valuation Date but
before the expiration of the period allowed for meeting minimum funding
requirements under Code Section 412 for the plan year which includes the subject
Determination Date. In addition, the value of any distributions made from the
plan (including the value of any annuity contract distributed from the plan)
actually paid to such participant prior to the subject Valuation Date but still
within the plan year which includes such Valuation Date or one of the four
immediately preceding plan years shall be added in calculating such "Present
Value" of the participant's accrued benefit.
(c) In the case of any rollover (as defined in the appropriate
provisions of the Code) from an Aggregation Group Plan to another plan qualified
under Section 401(a) of the Code or vice versa, or a direct qualified
plan-to-qualified plan transfer to or from a subject Aggregation Group Plan,
which rollover or transfer is both initiated by a participant and made between a
plan maintained by the Employer or an Affiliated Employer and a plan maintained
by an employer other than the Employer or an Affiliated Employer, (1) the
Aggregation Group Plan, if it is the plan from which the rollover or transfer is
made, shall count the amount of the rollover or transfer as a distribution made
as of the date such amount is distributed by such plan in determining the
"Present Value" of the participant's accrued benefit under paragraph (a) or (b)
above, as applicable, and (2) the Aggregation Group Plan, if it is the plan to
which the rollover or transfer is made, shall not so consider the amount of the
rollover or transfer as part of the participant's accrued benefit in determining
such "Present Value" if such rollover was accepted after December 31, 1983 and
shall so consider such amount if such rollover was accepted prior to January 1,
1984.
(d) In the case of any rollover (as defined in the appropriate
provisions of the Code) from an Aggregation Group Plan to another plan qualified
under Section 401(a) of the Code or vice versa, or a direct qualified
plan-to-qualified plan transfer to or from a subject Aggregation Group Plan,
which rollover or transfer is not described in paragraph (c) above, (1) the
subject Aggregation Group Plan, if it is the plan from which the rollover or
transfer is made, shall not consider the amount of the rollover or transfer as
part of the participant's accrued benefit in determining the "Present Value"
thereof under paragraph (a) or (b) above, as applicable, and (2) the subject
Aggregation Group Plan, if it is the plan to which the rollover or transfer is
made, shall consider the amount of the rollover or transfer when made as part of
the participant's accrued benefit in determining such "Present Value."
(e) As is noted in paragraphs (a) and (b) above, the "Present
Value" of any participant's accrued benefit under either a defined benefit plan
or a defined contribution plan as of any Determination Date includes the value
of any distribution from such a plan actually paid to such participant prior to
the last Valuation Date which coincides with or precedes such Determination Date
but still within the plan year which includes such Valuation Date or one of the
four immediately preceding plan years. This rule shall also apply to any
distribution under any terminated defined benefit or defined contribution plan
which, if it had not been terminated, would have been required to be included as
an Aggregation Group Plan.
(f) Notwithstanding the foregoing provisions, the "Present Value"
of a participant's accrued benefit under either a defined benefit plan or a
defined contribution plan as of any Determination Date shall be deemed to be
zero if the participant has not performed services for the Employer or any
Affiliated Employer at any time during the five year period ending on such
Determination Date.
14.1.6 Valuation Date. A "Valuation Date" refers to: (1) in the case
of a defined benefit plan (as defined in Code Section 414(j)), the date as of
which the plan actuary computes plan costs for minimum funding requirements
under Code Section 412 (except that, for a defined benefit plan which has
terminated, a "Valuation Date" shall be deemed to be the same as a Deter-
mination Date); and (2) in the case of a defined contribution plan (as defined
in Code Section 414(i)), the date as of which plan income, gains, and/or
contributions are allocated to plan accounts of participants.
14.1.7 Compensation. For purposes hereof, a participant's
"compensation" shall, for purposes of the rules of this Section 14, refer to his
Compensation as defined in Section 1.6 above; except that, for purposes of
Section 14.3 below, paragraph (c) of Section 1.6 above shall not apply.
14.2 Effect of Top Heavy Status on Vesting.
14.2.1 For any Plan Year in which this Plan is considered a Top
Heavy Plan, each Participant who completes at least one Hour of Service in such
year and who is not fully vested in any of his Accounts under Section 6.10 above
shall be deemed fully vested in all such Accounts if he has completed by the end
of such year at least three years of Vesting Service.
14.2.2 For any Plan Year in which this Plan is not considered a
Top Heavy Plan, the provisions of this Section 14.2 shall not be effective;
except that, if the Plan is not a Top Heavy Plan in a Plan Year after the
Plan was considered a Top Heavy Plan in the immediately preceding Plan Year,
any change back to the appropriate vesting schedule or provisions set forth in
Section 6.10 above shall be considered an amendment to the vesting schedule
(effective and adopted as of the first day of such new Plan Year) for purposes
of Section 13.4.2 above.
14.3 Effect of Top Heavy Status on Contributions.
14.3.1 Subject to Sections 14.3.2 and 14.3.3 below, for any Plan Year
in which this Plan is considered a Top Heavy Plan, the amount of the employer
contributions and forfeitures allocated under all Aggregation Group Plans
which are defined contribution plans (as defined in Code Section 414(i)) for
such Plan Year to the accounts of a Participant who is a Non-Key Employee on the
last day of such Plan Year (excluding any contributions made on behalf of the
Non-Key Employee by reason of his election under an arrangement qualifying
under Section 401(k) of the Code and also excluding any matching contributions
within the meaning of Code Section 401(m)(4)(A) which are allocated to an
account of the Non-Key Employee) must be at least equal to the lesser of (1) 3%
of the Participant's compensation for such Plan Year or (2) the largest
allocation of contributions and forfeitures made for such Plan Year to the
accounts of a Participant who is a Key Employee as of the Determination Date
applicable to such Plan Year under all such Aggregation Group Plans (measured
as a percent of the Key Employee's compensation for such Plan Year and including
both any contributions made on behalf of the Key Employee by reason of his
election under an arrangement qualifying under Section 401(k) of the Code and
any matching contributions within the meaning of Code Section 401(m)(4)(A) which
are allocated to an account of the Key Employee). To the extent necessary, and
regardless of the existence of current or accumulated profits, the Employer
shall make additional contributions to this Plan which are just allocable to the
Accounts of Participants who are Non-Key Employees so that the requirement set
forth in the immediately preceding sentence is met for the subject Plan Year.
14.3.2 Notwithstanding the provisions of Section 14.3.1 above but
subject to the provisions of Section 14.3.3 below, in the case of any Non-Key
Employee who participates in both this Plan and another Aggregation Group Plan
that is a defined benefit plan (as defined in Code Section 414(j)) which is
maintained by the Employer, the provisions of Section 14.3.1 shall be inapplic-
able and the Employer shall cause such defined benefit plan to provide an
accrued benefit (attributable only to employer contributions) for such Non-Key
Employee which, if expressed as a single life annuity commencing on the first
day of the month next following the month in which the Non-Key Employee attains
his Normal Retirement Age, shall be equal at least to the product of (1) 2% of
the Non-Key Employee's average annual compensation for the five consecutive
calendar years which produce the highest result and (2) the Non-Key Employee's
years of service (up to but not exceeding ten such years). For purposes of
computing the product in the foregoing sentence: (1) compensation received in
any Plan Year which began prior to January 1, 1984 and in any calendar year
which begins after the end of the last Plan Year in which the Plan is considered
a Top Heavy Plan shall all be disregarded; and (2) years of service shall refer
generally to years of Vesting Service except that years of service for this
purpose shall not include the period of any Plan Year which began prior to
January 1, 1984 or any Plan Year as of which the Plan is not considered a Top
Heavy Plan.
14.3.3 Notwithstanding the foregoing provisions of Sections 14.3.1
and 14.3.2 above, such provisions shall not apply so as to cause any additional
contribution or benefit to be provided a Participant for a Plan Year under an
Aggregation Group Plan maintained by the Employer if (1) such Participant
actively participates in an Aggregation Group Plan maintained by an Affiliated
Employer at a date in the applicable Plan Year which is later than the latest
date in such year on which he actively participates in this Plan and (2) such
other plan provides for the same contribution or benefit as would otherwise be
required under Sections 14.3.1 and 14.3.2 above for such Plan Year.
14.4 Effect of Top Heavy Status on Combined Maximum Plan Limits.
For any Plan Year in which this Plan is considered a Top Heavy Plan, the
references to "125%" contained in Section 6A.2 above shall be changed to
"100%."
SECTION 15
MISCELLANEOUS
15.1 Trust. Subject to the provisions of Section 16 below, all assets of
the Plan shall be held in the Trust for the benefit of the Participants and
their beneficiaries. Except as provided in Sections 4.6, 5.3, and 13.3 above,
in no event shall it be possible for any part of the assets of the Plan to be
used for, or diverted to, purposes other than for the exclusive benefit of the
Participants and their beneficiaries or for payment of the proper administrative
costs of the Plan and the Trust. No person shall have any interest in or right
to any part of the earnings of the Trust, or any rights in, to, or under the
Trust or any part of the assets thereof, except as and to the extent expressly
provided in the Plan. Any person having any claim for any benefit under the
Plan shall look solely to the assets of the Trust Fund for satisfaction. In no
event shall Federated or any other Employer or any of their officers or agents,
or members of the Board, the Committee, or the Trustee, be liable in their
individual capacities to any person whomsoever for the payment of benefits under
the provisions of the Plan.
15.2 Mergers, Consolidations, and Transfers of Assets. Notwithstanding any
other provision hereof to the contrary, in no event shall this Plan or the Trust
be merged or consolidated with any other plan and trust, nor shall any of the
assets or liabilities of this Plan and the Trust be transferred to any other
plan or trust or vice versa, unless (1) the Committee consents to such merger,
consolidation, or transfer of assets as consistent with the rules set forth
herein and the purposes of this Plan, (2) each Participant and beneficiary would
(if this Plan and the Trust then terminated) receive a benefit immediately after
the merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if this Plan and the Trust had then terminated), and
(3) such merger, consolidation, or transfer of assets does not cause any accrued
benefit, early retirement benefit, or optional form of benefit of a person under
this Plan or the applicable other plan to be eliminated or reduced except to the
extent such elimination or reduction is permitted under Section 411(d)(6) of the
Code or in Treasury regulations issued thereunder. In the event of any such
merger, consolidation, or transfer, the requirements of clause (2) set forth in
the immediately preceding sentence shall be deemed to be satisfied if the
merger, consolidation, or transfer conforms to and is in accordance with
regulations issued under Section 414(1) of the Code. In addition, in the case
of any spin-off to this Plan from another plan which is maintained by the
Employer or an Affiliated Employer or of any spin-off from this Plan to another
Plan which is maintained by the Employer or an Affiliated Employer, a percentage
of the excess assets (as determined under Section 414(l)(2) of the Code) held in
the plan from which the spin-off is made (if any) shall be allocated to each of
such plans to the extent required by Section 414(l)(2) of the Code. Subject to
the provisions of this Section 15.2, the Committee may take action to merge or
consolidate this Plan and the Trust with any other plan and trust, or permit the
transfer of any assets and liabilities of this Plan and the Trust to any other
plan and trust or vice versa.
15.3 Correction of Inadvertent Errors. If any inadvertent errors are
made in crediting amounts to any Accounts which leave amounts held under the
Plan which are not reasonably able to be allocated to any specific Participant
or Account ("overcrediting errors"), then such amounts shall, except as noted
below, be used to the extent possible to correct any inadvertent errors made in
crediting amounts to any Accounts which leave such Accounts with balances which
are less than the balances which should exist under the Plan if no such errors
had been made ("undercrediting errors"). Effective as of the last day of the
Plan Year which ends December 31, 1991 and the last day of each subsequent Plan
Year and only to the extent the amounts attributable to overcrediting errors
which exist as of the last day of any such Plan Year are not needed to correct
the undercrediting errors which are then known, the amounts attributable to
overcrediting errors shall be treated for all purposes of the Plan as if they
were forfeitures from Matching Accounts arising under the Plan for the subject
Plan Year. Further, any undercrediting errors shall be corrected: (1) by use
of overcrediting errors to the extent permitted by the foregoing provisions of
this Section 15.3; (2) to the extent not corrected by such overcrediting errors,
by use of forfeitures to the extent permitted under Section 8.4 above; or (3) to
the extent not corrected by use of overcrediting errors or forfeitures, by
payment made by the Employer to the Trust as a special contribution in order to
make such corrections.
15.4 Authority to Act for Federated or Other Employer. Any matter or
thing to be done by Federated or any other employer included as part of the
Employer shall be done by its board of directors, except that the board may, by
resolution, delegate to any persons or entities all or part of its rights or
duties hereunder. Any such delegation shall be valid and binding upon all
persons, and the persons or entities to whom or to which authority is delegated
shall have full power to act in all matters so delegated until the authority
expires by its terms or is revoked by resolution of such board.
15.5 Relationship of Plan to Employment Rights. The adoption and
maintenance of the Plan is purely voluntary on the part of Federated and each
other Employer and neither the adoption nor the maintenance of the Plan shall be
construed as conferring any legal or equitable rights to employment on any
person.
15.6 Applicable Law. The provisions of the Plan shall be administered
and enforced according to Federal law and, only to the extent not preempted by
Federal law, to the laws of the State of Ohio. Either Federated or the Trustee
may at any time initiate any legal action or proceedings for the settlement of
the Trustee's accounts or for the determination of any question of construction
which arises or for instructions. Except as required by law, in any application
to, or proceeding or action in, any court with regard to the Plan or Trust, only
Federated and the Trustee shall be necessary parties, and no Participant,
beneficiary, or other person having or claiming any interest in the Plan or
Trust shall be entitled to any notice or service of process. Federated or the
Trustee may, if either so elects, include as parties defendant any other
persons. Any judgment entered into in such a proceeding or action shall be
conclusive upon all persons claiming under the Plan or Trust.
15.7 Agent for Service of Process. The agent for service of process for
the Plan shall be the Secretary of Federated.
15.8 Reporting and Disclosure. Federated shall act as the Plan
Administrator for purposes of satisfying any requirement now or hereafter
imposed through Federal or State legislation to report and disclose to any
Federal or State department or agency, or to any Participant or other person,
any information respecting the establishment or maintenance of the Plan or the
Trust Fund. Any cost or expense incurred in satisfying any and all such
reporting and disclosure requirements shall be deemed to be a reasonable expense
of administering the Plan and may be paid from the Trust Fund if not otherwise
elected to be paid by the Employer.
15.9 Employees Transferring From Affiliated Employer Savings Plan.
Notwithstanding any other provision of the Plan to the contrary, if any person
becomes a Participant in the Plan under the foregoing provisions of the Plan
after he is both employed by an Affiliated Employer and eligible to elect to
have savings contributions made on his behalf under a plan which is maintained
by such Affiliated Employer and qualified under Section 401(a) of the Code, he
may only have a Savings Agreement take effect under this Plan as of the date he
so becomes a Participant hereunder if he files such Savings Agreement with a
Plan representative on or prior to such date and if he is not prohibited from
entering into a Savings Agreement by reason of a hardship withdrawal he has
previously taken of amounts which were contributed to any plan maintained by the
Employer or an Affiliated Employer under a qualified cash or deferred
arrangement (as defined in Section 401(k) of the Code). If either such
condition is not met, such person shall not be permitted to enter into a new
Savings Agreement under this Plan except under the provisions of Section 4.1.5
above. The Committee may also require for administrative reasons that a Savings
Agreement must be filed a reasonable number of days prior to the date he becomes
a Participant hereunder for it to be effective as of such date.
15.10 Separability of Provisions. If any provision of the Plan is held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, and the Plan shall be construed and enforced as if
such provision had not been included.
15.11 Counterparts. The Plan may be executed in any number of
counterparts, each of which shall be deemed an original, and the counterparts
shall constitute one and the same instrument, which shall be sufficiently
evidenced by any one thereof.
15.12 Headings. Headings used throughout the Plan are for convenience
only and shall not be given legal significance.
15.13 Construction. In the construction of this Plan, the masculine
shall include the feminine, the singular shall include the plural, and the
plural shall include the singular, in all cases where such meanings would be
appropriate.
15.14 Applicable Benefit Provisions. Any benefit to which a Participant
becomes entitled under the Plan (or any death benefit to which a Participant's
Spouse or other beneficiary becomes entitled under the Plan) shall be determined
on the basis of the provisions of the Plan in effect as of the date the
Participant last ceases to be employed by the Employer or an Affiliated Employer
notwithstanding any amendment to the Plan adopted subsequent to such date,
except for subsequent amendments which are by their specific terms made
applicable to such Participant (or his Spouse or other beneficiary) or which are
required by applicable law to be applicable to such Participant (or his Spouse
or other beneficiary).
15.15 Employment Rule. Any individual who is a common law employee
of a corporation which is a member of the controlled group of corporations
(within the meaning of Section 414(b) of the Code) which includes Federated (the
"Federated controlled group") shall, for all purposes of this Plan, be
considered to be the common law employee of the corporation in the Federated
controlled group from whose payroll the individual is paid. If any individual
participating in this Plan by reason of being paid under the payroll of a
corporation which is included as part of the Employer is actually the common law
employee of a corporation in the Federated controlled group which is not
included as part of the Employer, such other corporation shall be considered an
employer participating in this Plan for purposes of Sections 401(a) and 404 of
the Code.
15.16 Appendices and Exhibits. Any Appendices and Exhibits attached
to this Plan are hereby deemed to be part of this Plan (or, to the extent
indicated below, part of any plan which is merged into this Plan). In this
regard: (1) Appendix A identifies the corporations that comprise the Employer
and are thereby participating in the Plan; (2) Exhibit A contains the Trust
which is used in conjunction with the Plan; (3) Exhibit B sets forth all of the
provisions of the Plan which are in effect from January 1, 1987 through December
31, 1988; and (4) Exhibit C sets forth all of the provisions of The Campeau
Corporation California Retirement Plan (which plan is mereged into this Plan,
effective as of the Effective Amendment Date, pursuant to the provisions of
Section 16 below) which are in effect from January 1, 1987 through December 31,
1988.
SECTION 16
MERGER OF CAMPEAU CALIFORNIA PLAN INTO THIS PLAN
16.1 Date of Merger. The Campeau Corporation California Retirement
Plan, as it existed on December 31, 1988 and as it is further modified under the
provisions of Exhibit C to this Plan (the "Campeau California Plan"), is merged
into this Plan effective retroactively as of the Effective Amendment Date.
16.2 Change in Campeau California Plan Provisions After Merger. Subject
to the following provisions of this Section 16.2 and to the provisions of
Section 16.3 below, the provisions of the Campeau California Plan shall continue
to apply without change (and such provisions are incorporated by reference into
this Section 16) to any person who qualified as a participant under the terms of
such plan as of the Effective Amendment Date (a "Campeau California Plan
Participant"). Notwithstanding the foregoing or any other provision of this
Plan to the contrary, the provisions of the Campeau California Plan are modified
effective as of the Effective Amendment Date by the following provisions of this
Section 16.2. Except as otherwise indicated below, any capitalized term used in
this Section 16.2 shall have the meaning provided therefor under the provisions
of the Campeau California Plan.
16.2.1 Subject to Section 16.2.9 below, effective as of the
Effective Amendment Date, any Campeau California Plan Participant who is an
Active Participant may elect to make Post-Tax Contributions under the provisions
of the Campeau California Plan regardless of whether or not such participant has
entered into a Salary Deferral Agreement.
16.2.2 Effective as of the Effective Amendment Date, any
contributions made under the provisions of the Campeau California Plan by or on
behalf of a Campeau California Plan Participant which are treated as Salary
Deferral Contributions, Post-Tax Contributions, or Matching Employer
Contributions under the provisions of the Campeau California Plan shall be
treated as if they were Pre-Tax Savings Contributions, After-Tax Savings
Contributions, or Matching Contributions, respectively, under the provisions of
this Plan other than this Section 16 for purposes of applying the requirements
of Sections 401(k)(3), 401(m)(2), and 415 of the Code, as such requirements are
applied under Sections 4A, 5A, and 6A above. Effective as of the Effective
Amendment Date, such requirements (as set forth in Sections 4A, 5A, and 6A
above) shall be applied (1) in lieu of any provisions of the Campeau California
Plan which would apply such requirements in a different manner, (2) as if such
Salary Deferral Contributions made under the provisions of the Campeau
California Plan and all other Pre-Tax Savings Contributions made under the
provisions of this Plan other than this Section 16 were made under one cash or
deferred arrangement (as such term is defined in Treas. Reg. Section 1.401(k)-
1(2)(i)), and (3) as if such Post-Tax Contributions and Matching Employer
Contributions made under the provisions of the Campeau California Plan and all
other After-Tax Savings Contributions and Matching Contributions made under
the provisions of this Plan other than this Section 16 were made under one plan.
16.2.3 No Rollover Contributions or plan-to-plan Transfers
shall be permitted under the provisions of the Campeau California Plan on or
after the Effective Amendment Date. Further, no portion of any Campeau
California Plan Participant's Account as of the Effective Amendment Date was
attributable to Rollover Contributions or plan-to-plan Transfers.
16.2.4 Effective as of the Effective Amendment Date, any
Campeau California Plan Participant who has at least one Hour of Service on or
after the Effective Amendment Date shall be fully vested in his Account.
16.2.5 Any loans made under the provisions of the
Campeau California Plan to a Campeau California Plan Participant on or after
October 18, 1989 shall be secured by one-half of his Account (instead of by his
entire Account).
16.2.6 Any withdrawal requested by a Campeau California
Plan Participant under the provisions of the Campeau California Plan from the
portion of his Account which is attributable to Salary Deferral Contributions
and by reason of a Serious Financial Hardship shall not be granted unless all of
the provisions of Section 7.3 above are met. Further, in no event may any such
withdrawal include any earnings or income allocated after December 31, 1988 to
the portion of such participant's Account which is attributable to his Salary
Deferral Contributions.
16.2.7 Effective as of the Effective Amendment Date, the
forms in which any Campeau California Plan Participant's Account may be paid
to such participant under the provisions of the Campeau California Plan shall be
a lump sum payment, a Single Life Annuity, a Life and Ten Year Certain
Annuity, a Full Cash Refund Annuity, and a Period Certain Annuity (with such
annuity forms being defined in Section 8A above). Further, effective as of the
Effective Amendment Date, the forms in which any Campeau California Plan
Participant's Account may be paid after such participant's death to his
beneficiary under the provisions of the Campeau California Plan shall be a lump
sum payment, a Single Life Annuity, a Life and Ten Year Certain Annuity, a Full
Cash Refund Annuity, and a Period Certain Annuity (with such annuity forms
being defined in Section 9 above). No prior optional form of benefit is
eliminated by reason of this provision, except for any prior optional form which
was subject to the discretion of the employer under the Campeau California Plan
or the insurance company issuing the Annuity Contract referred to in such plan
and which can be eliminated (because of such discretion) under Treas. Reg.
Section 1.411(d)-4, Q. and A.8.
16.2.8 Effective as of the Effective Amendment Date, the
top heavy provisions of Section 14 above shall apply to the provisions of the
Campeau California Plan as if the provisions of the Campeau California Plan and
the provisions of this Plan other than this Section 16 constituted one plan (and
the top heavy provisions otherwise contained in the Campeau California Plan
shall not apply).
16.2.9 Notwithstanding any of the foregoing paragraphs of
this Section 16.2, no Salary Deferral Contributions, Post-Tax Contributions,
Matching Employer Contributions, or any other contributions shall be made by
or on behalf of any Campeau California Plan Participant under the provisions of
the Campeau California Plan with respect to any pay period which begins on or
after June 15, 1989.
16.3 Transfer of Amounts to This Plan. During the last three calendar
months of 1992, all amounts then held under the Annuity Contract described in
the provisions of the Campeau California Plan (which represent all funds of the
Campeau California Plan) shall be transferred to the Trust used for this Plan.
(All amounts then held under such Annuity Contract were allocated to Campeau
California Plan Participants, and no unallocated funds existed under such
contract.) Such transfer shall be made in accordance with the provisions of the
Campeau California Plan, such Annuity Contract, and Section 15.2 above. The
provisions of the Campeau California Plan shall not be effective for any purpose
after such transfer of amounts is completed. Further, the provisions of this
Plan other than this Section 16 shall be modified by reason of such transfer of
amounts to the extent provided in the following provisions of this Section 16.3.
Except as otherwise indicated below, any capitalized term used in this Section
16.3 shall have the meaning provided therefor under the provisions of the
Campeau California Plan.
16.3.1 Any amounts transferred to this Plan under the
provisions of this Section 16.3 which are attributable to any Salary Deferral
Contributions and/or Post-Tax Contributions previously made by or on behalf of
a Campeau California Plan Participant shall be allocated upon such transfer to a
Savings Account held for such participant's benefit under and as provided in the
provisions of this Plan which precede this Section 16. Such Savings Account
shall be invested, administered, and distributed in accordance with the
provisions of this Plan which precede this Section 16 and which apply to any
Savings Account (and as if the applicable Campeau California Plan Participant
has an initial investment election as to such Savings Account as of the date the
transfer is made if he has not had an initial election before then under the
other provisions of this Plan). Notwithstanding any other provision of this
Plan, the Campeau California Plan Participant shall always be fully vested in
such Savings Account.
16.3.2 Any amounts transferred to this Plan under the
provisions of this Section 16.3 which are attributable to any Matching Employer
Contributions previously made on behalf of a Campeau California Plan Participant
shall be allocated upon such transfer to a Matching Account held for such
participant's benefit under and as provided in the provisions of this Plan which
precede this Section 16. Such Matching Account shall be invested, administered,
and distributed in accordance with the provisions of this Plan which precede
this Section 16. Notwithstanding any other provision of this Plan, the Campeau
California Plan Participant shall always be fully vested in such Matching
Account.
16.3.3 After the transfer of amounts described in this
Section 16.3, any Campeau California Plan Participant may withdraw under the
provisions of Section 7.1 above (provided, except to the extent modified herein,
all requirements set forth in such Plan section are met) any portion of his
Savings Account under this Plan which is attributable to his prior Post-Tax
Contributions made under the provisions of the Campeau California Plan,
including the portion of such Account attributable to earnings and income on
such Post-Tax Contributions. Further, after the transfer of amounts described
in this Section 16.3, any Campeau California Plan Participant may withdraw under
the provisions of Section 7.2 above (provided, except to the extent modified
herein, all requirements set forth or referred to in such Plan section are met)
any portion of his Savings Account under this Plan which is attributable to his
prior Salary Deferral Contributions made under the provisions of the Campeau
California Plan, other than for any portion of such Account attributable to
earnings and income on such Salary Deferral Contributions which were or are
allocated after December 31, 1988.
16.4 Participation of Campeau California Plan Participants in This Plan.
Not-withstanding any other provision of this Plan to the contrary, any Campeau
California Plan Participant who is a common law employee of Campeau
Corporation California (or any other real estate development corporation which
is a member of the controlled group of corporations, within the meaning of
Section 414(b) of the Code, which includes Federated) on June 15, 1989 shall
solely because of such employment be considered a Covered Employee under the
provisions of this Plan which precede this Section 16, and hence an active
Participant under the provisions of this Plan which precede this Section 16, for
the period beginning June 15, 1989 and ending on the earlier of such person's
termination of employment with Campeau Corporation California (and such other
real estate development corporations) or February 3, 1992. The common law
employer of any such participant for such period shall be considered an employer
participating in this Plan for purposes of Sections 401(a) and 404 of the Code.
SECTION 17
MERGER OF ALLIED PROFIT SHARING-INVESTMENT PLAN
INTO THIS PLAN AND AGGREGATION OF ALLIED
PROFIT SHARING-INVESTMENT PLAN AND THIS
PLAN FOR NONDISCRIMINATION TESTING
17.1 Merger of Allied Plan Into This Plan. The Allied Stores Corporation
Profit Sharing-Investment Plan (the "Allied Plan), as it exists on June
30, 1993, is merged into this Plan effective as of July 1, 1993 (the "Merger
Date"). The Allied Plan had been determined to be qualified as a tax-favored
plan under Section 401(a) of the Code by the Internal Revenue Service (the
"IRS") pursuant to an IRS letter dated October 1, 1992.
17.2 Effect of Allied Plan Merger on This Plan. The provisions of the
Allied Plan shall not be effective for any purpose on or after the Merger Date.
However, notwithstanding any other provision of this Plan to the contrary, the
provisions of this Plan other than this Section 17 shall be modified to the
extent provided in the following provisions of this Section 17.2 in order to
effect the merger of the Allied Plan into this Plan:
17.2.1 Definitions. For purposes of the following
provisions of this Section 17, the following terms have the meanings indicated
below:
(a) "Allied" means the following corporations (all
of which are subsidiaries of Federated): The Bon, Inc., Stern's, Inc., Jordan
Marsh Stores Corporation, and any corporation which has at least 80% of its
voting securities owned by one of the foregoing three corporations. Such
corporations were the only corporations participating in the Allied Plan during
the 1993 Pre-Merger Period.
(b) "Allied Participant" means any person who
is a participant in the Allied Plan (under such plan's provisions) at any time
during the 1993 Pre-Merger Period. An Allied Participant may or may not
become an active Participant under the terms of this Plan on or after the Merger
Date.
(c) "1993 Plan Year" means the Plan Year which
begins January 1, 1993 and ends December 31, 1993.
(d) "1993 Post-Merger Basic Savings
Contributions" means, with respect to any Allied Participant, any contributions
made to this Plan at the election of such participant which (1) are made as of
any date during the 1993 Post-Merger Period and (2) would be considered Basic
Savings Contributions under Section 4.5 above if all references in such section
to "5% of the Participant's Compensation for such Plan Year" actually referred
to "an amount equal to 5% of the Participant's Compensation for the 1993 Post-
Merger Period" and if any contributions made to the Allied Plan at the election
of the Allied Participant which were made as of any date during the 1993 Pre-
Merger Period were not considered Savings Contributions under this Plan.
(e) "1993 Post-Merger Period" means the portion
of the 1993 Plan Year which occurs on and after the Merger Date.
(f) "1993 Pre-Merger Basic Savings
Contributions" means, with respect to any Allied Participant, any contributions
made to the Allied Plan at the election of such participant which (1) are made
as of any date during the 1993 Pre-Merger Period and (2) would be considered
"Basic Savings Contributions" under the terms of the Allied Plan if the Allied
Plan were to remain in effect for the entire 1993 Plan Year without being merged
into this Plan, if such participant were to elect to have no further
contributions made by or on behalf of the participant to the Allied Plan as of
any date during the 1993 Post-Merger Period, and if any Compensation of the
Participant applicable to the 1993 Post-Merger Period were not considered
"Compensation" under the terms of the Allied Plan.
(g) "1993 Pre-Merger Period" means the portion
of the 1993 Plan Year which occurs prior to the Merger Date.
17.2.3 Special Rules on Determination and Allocation of
Regular Matching Contributions for 1993 Plan Year.
(a) If any Allied Participant becomes a
Participant in this Plan during the 1993 Plan Year, is employed by the Employer
on the last date of the 1993 Plan Year, and does not make any withdrawal of
Basic Savings Contributions from his Savings Account during the 1993 Post-
Merger Period, then, for purposes of Section 5.1.1 above, paragraph (a) of
Section 5.1.2 above, paragraph (b) of Section 5.1.2 above (as such paragraph is
modified by paragraph (b) immediately below), and Section 6.2.1 above, (1) such
Participant's Basic Savings Contributions for the 1993 Plan Year shall be deemed
to include only his 1993 Post-Merger Basic Savings Contributions and (2) such
Participant shall not be deemed to have withdrawn any Basic Savings
Contributions from his Accounts during the 1993 Plan Year.
(b) Paragraph (b) of Section 5.1.2 above shall,
for the 1993 Plan Year, be modified to read as follows:
(b) An amount equal to a certain percent
(the "Percent") of the aggregate Basic Savings
Contributions which are made for the 1993 Plan
Year to the Plan on behalf of those Participants who
are employed by the Employer on the last day of
the 1993 Plan Year and who did not make any
withdrawal of Basic Savings Contributions from
their Accounts during the 1993 Plan Year, or such
greater amount as the Board of Directors of
Federated in its discretion may determine. For
purposes hereof, the "Percent" shall mean the
percentage which (1) 2% of the Income Before
Federal Taxes on Income of the Employer and all
Affiliated Employers for the Federated calendar
year which begins in the 1993 Plan Year is of (2)
the total of all Basic Savings Contributions referred
to in the first sentence of this paragraph (b) and all
1993 Pre-Merger Basic Savings Contributions made
by Allied Participants. In determining the amount
provided under this paragraph (b), the following
provisions apply:
(i) In no event will the amount
set forth in this paragraph (b), when added to all
other contributions made by the Employer under
this Plan for Federated's tax year in which the 1993
Plan Year ends, exceed the maximum amount which
can be deducted for such Federated tax year as an
employer contribution to the Plan under the
appropriate provisions of Section 404 of the Code.
(ii) For purposes of this paragraph
(b), the "Income Before Federal Taxes on Income"
for any Federated calendar year means the Income
Before Federal Taxes on Income of the Employer
and all Affiliated Employers as determined for such
year by Federated's chief accounting officer in
accordance with the standard accounting procedures
of Federated.
(iii) Also for purposes of this
paragraph (b), a "Federated calendar year" means
a period of twelve fiscal months of Federated,
which commences on the first day of its January
fiscal month and ends on the last day of its
December fiscal month.
17.2.4 Special Matching Contributions Applicable to 1993
Pre-Merger Basic Savings Contributions. In addition to the Matching
Contributions which are determined under Section 5.1 above and allocable to
Participant's Accounts under Section 6.2.1 above, the Employer shall also make
a special Matching Contribution for the 1993 Plan Year which is determined and
allocable under this Section 17.2.4, all in accordance with the following
provisions:
(a) The amount of such additional Matching
Contribution shall be equal to a certain percent (the "Special Matching
Percentage") of the aggregate 1993 Pre-Merger Basic Savings Contributions made
by Allied Participants under the Allied Plan, with the Special Matching
Percentage being determined under the following provisions:
(i) Subject to the following provisions of
this paragraph (a), the Special Matching Percentage shall be determined in
accordance with the following schedule, based on the percentage which Net
Earnings attributable to Allied for the Federated tax year in which the 1993
Plan Year ends is of the Net Sales (including leased department sales)
attributable to Allied for such tax year (as such items are reported or
reflected in Federated's annual report to stockholders or in any similar report
prepared with respect to Allied):
If the percentage of Allied Net The Special Matching Percentage
Earnings to Allied Net Sales for the for the
tax year in which the 1993 Plan 1993 Plan Year is:
Year ends is:
Under 1.0% 12.5%
At least 1.0% but less than 1.5% 25%
At least 1.5% but less than 2.0% 37.5%
At least 2.0% but less than 2.25% 50%
At least 2.25% but less than 2.5% 62.5%
At least 2.5% but less than 2.75% 75%
At least 2.75% but less than 3.0% 87.5%
At least 3.0% but less than 3.25% 100%
At least 3.25% but less than 3.5% 125%
At least 3.5% but less than 4.0% 150%
At least 4.0% but less than 4.5% 200%
For each 0.5% in excess of 4.0% An additional 50%
(ii) To the extent that, for the Federated
tax year in which the 1993 Plan Year ends, the Employer realizes any unusual or
nonrecurring gain or loss which individually exceeds the sum of $10,000,000
before giving effect to the income tax consequences thereof, the Board of
Directors of Federated may, in its discretion and prior to the publication of
the applicable annual report for the tax year in question, direct that the
amount of such unusual or nonrecurring gain or loss, or of the net excess of all
such unusual and nonrecurring gains over all such unusual and nonrecurring
losses, or of the net excess of all such unusual and nonrecurring losses over
all such unusual and nonrecurring gains, or of any part of any such gain or loss
or of any such net excess, be excluded from the Net Earnings attributable to
Allied for such tax year (provided the Net Earnings figure after such exclusion
is adjusted to reflect the income tax consequences attributable to such
exclusion) for purposes of determining the Special Matching Percentage for the
1993 Plan Year. The determination of whether or not a gain or loss is unusual
or nonrecurring shall be within the sole discretion of the Board of Directors
of Federated but shall in any event include, without being limited to, the
following items: (1) gains or losses from the extinguishment of debt; (2) gains
or losses from the sale of property or equipment; and (3) gains or losses from
the sale of a segment of Allied's business, such as a division, subsidiary, or
shopping center.
(b) Except as otherwise provided in the Plan, as
of the last day of the 1993 Plan Year, the Committee shall allocate the special
Matching Contribution determined for the 1993 Plan Year under paragraph (a)
above among the Matching Accounts of all Allied Participants who made 1993
Pre-Merger Basic Savings Contributions under the Allied Plan, in the proportion
that the 1993 Pre-Merger Basic Savings Contributions made by or for each such
Allied Participant bear to the total 1993 Pre-Merger Basic Savings Contributions
made by or for all such Alliled Participants.
(c) All provisions of this Plan which concern in
any manner the Matching Contributions made under the Plan for the 1993 Plan
Year or the allocation of such contributions, other than Sections 5.1 and 6.2.1
above, shall apply to the special Matching Contribution described in this
Section 17.2.4.
17.2.5 Special Rule for Pre-Tax Withdrawal. On and after
the Merger Date, any Allied Participant may withdraw under the provisions of
Section 7.2 above (provided, except to the extent modified herein, all require-
ments set forth or referred to in such Plan section are met) any portion of
his Savings Account under this Plan which is attributable to his prior "Tax-
Deferred Savings Contributions" made under the provisions of the Allied Plan
(which are treated as Pre-Tax Savings Contributions under this Plan), other than
for any portion of such Account attributable to earnings and income on such Tax-
Deferred Savings Contributions which were or are allocated after December 31,
1988.
17.3 Transfer of Amounts to This Plan By Reason of Allied Merger.
On the Merger Date, all amounts then held under the trust used for the Allied
Plan (which holds all funds of the Allied Plan) shall be transferred to the
Trust used for this Plan. (All amounts then held under the trust used for the
Allied Plan will be allocated to Allied Participants, and no unallocated funds
will exist under such trust.) Such transfer shall be made in accordance with
the provisions of the Allied Plan and Section 15.2 above. The amounts
transferred to this Plan shall be allocated to Accounts under the provisions of
this Plan which precede this Section 17.
17.4 Aggregation of Allied Plan and This Plan for Coverage and
Nondiscrimination Testing. Notwithstanding any other provision of this Plan to
the contrary, this Plan and the Allied Plan are aggregated for purposes of
Section 410(b) of the Code for the Plan Year beginning January 1, 1992 (the
"1992 Plan Year") and the 1993 Plan Year (to the extent the Allied Plan is
separately maintained during such 1993 Plan Year). By reason of this Plan and
the Allied Plan being aggregated for purposes of Code Section 410(b) with
respect to the 1992 Plan Year and the 1993 Plan Year, any contributions made
under the provisions of the Allied Plan by or on behalf of an Allied Participant
which are treated as "Tax-Deferred Savings Contributions," "After-Tax Savings
Contributions," or "Matching Contributions" under the terms of the Allied Plan
shall be treated as if they were Pre-Tax Savings Contributions, After-Tax
Savings Contributions, or Matching Contributions, respectively, under the
provisions of this Plan which precede this Section 17 for purposes of applying
the requirements of Sections 401(k)(3) and 401(m)(2) of the Code, as such
requirements are applied under Sections 4A and 5A above. For both the 1992 Plan
Year and the 1993 Plan Year, such requirements (as set forth in Sections 4A and
5A above) shall be applied (1) as if such Tax-Deferred Savings Contributions
made under the provisions of the Allied Plan and all other Pre-Tax Savings
Contributions made under the provisions of this Plan which precede this Section
17 were made under one cash or deferred arrangement (as such term is defined in
Treas. Reg. Section 1.401(k)-1(2)(i)) and (2) as if such After-Tax Savings
Contributions and Matching Contributions made under the provisions of the Allied
Plan and all other After-Tax Savings Contributions and Matching Contributions
made under the provisions of this Plan which precede this Section 17 were made
under one plan. The provisions of this Section 17.4 shall be deemed to amend
both this Plan and the Allied Plan effective as of January 1, 1992.
SIGNATURE PAGE
IN WITNESS WHEREOF, Federated Department Stores, Inc. has
hereunto caused its name to be subscribed to this amendment and restatement of
the Plan on the 13th day of January, 1994, but
effective for all purposes as of January 1, 1987.
FEDERATED DEPARTMENT STORES, INC.
By \s\ Boris Auerbach
Title Vice President
APPENDIX A
PARTICIPATING CORPORATIONS
During the period which begins on the Effective Amendment Date and
ends on February 3, 1992, the Employer for purposes of this Plan shall be
deemed to consist of Federated and each corporation which is a subsidiary of
Federated (while it is such a subsidiary).
During the period which begins on February 4, 1992 and ends on June 30,
1993, the Employer for purposes of this Plan shall be deemed to consist of
Federated and each corporation which is a subsidiary of Federated (while it is
such a subsidiary), except that the following subsidiaries of Federated shall
not be considered part of the Employer for purposes of the Plan during such
period:
The Bon, Inc., Stern's, Inc., Jordan Marsh Stores Corporation, and any
corporation which is a subsidiary of Federated by reason of having at least 80%
of its voting securities owned by one of the foregoing three Federated
subsidiaries.
Beginning on July 1, 1993, the Employer for purposes of this Plan shall
be deemed to consist of Federated and each corporation which is a subsidiary of
Federated (while it is such a subsidiary).
Further additions or deletions to the corporations comprising the Employer
may be made by Federated from time to time.
For purposes hereof, a "subsidiary" of Federated means any corporation
of which at least 80% of its voting securities are owned by Federated or another
subsidiary of Federated.
EXHIBIT A
TRUST
This Exhibit A set forth the provisions of the Trust which is used in
conjunction with the Plan. Exhibit A is composed of the Trust document
immediately following this page.
TRUST AGREEMENT
between
FEDERATED DEPARTMENT STORES, INC.
and
BOSTON SAFE DEPOSIT AND TRUST COMPANY
Dated July 1, 1984
THIS AGREEMENT is made, executed and delivered in the City
of Boston, Commonwealth of Massachusetts, as of the 1st day of July,
1984, by and between FEDERATED DEPARTMENT STORES, INC., a Delaware
corporation, having its principal executive offices at Seven West
Seventh Street, Cincinnati, Ohio 45202 (hereinafter called the
"Company"), party of the first part, and BOSTON SAFE DEPOSIT AND TRUST
COMPANY, a Massachusetts trust company, having its principal office at
One Boston Place, Boston, Massachusetts 02106 (hereinafter called the
"Trustee"), party of the second part.
WHEREAS, the directors and stockholders of the Company have
adopted the Federated Department Stores, Inc. Retirement Income and
Thrift Incentive Plan (the "Plan") for the exclusive benefit of its
employees who become participants in the Plan; and
WHEREAS, the Federated Department Stores, Inc. Retirement
Income and Thrift Incentive Plan Trust (the "Trust") has been
established and maintained under a Trust Agreement dated January 25,
1953 by and between the Company and The First National Bank of Chicago
as trustee, which Trust Agreement has been restated as of February 1,
1976 and again as of January 1, 1980 and again as of November 1, 1981,
and amended as of April 26, 1984 and is again being restated herein,
effective as of July 1, 1984; and
WHEREAS, the Company has appointed the Trustee to serve as
successor trustee of the Trust effective as of November 1, 1981; and
WHEREAS, the Company has, effective July 1, 1984, merged the
Bullock's Profit Sharing Retirement Plan, the Rike-Kumler Company
Retirement Plan, and The Children's Place Profit Sharing Savings Plan,
profit sharing plans of certain of its divisions, into its Retirement
Income and Thrift Incentive Plan; and
WHEREAS, the Company has, effective July 1, 1984,
transferred the assets of the Ralphs Grocery Company Retirement Plan
(the "Ralphs Plan"), a pension plan of its Ralphs division, into this
Trust Fund as a subfund thereof and, after the merger described in the
preceding paragraph, transferred said assets from this Trust Fund to The
Northern Trust Company; and
NOW, THEREFORE, in consideration of good and valuable
considerations, the receipt of which is acknowledged, the Trustee
covenants and agrees that it will hold any and all sums which may from
time to time be paid to it as Trustee hereunder, in trust, for the uses
and purposes and upon the terms and conditions hereinafter stated.
ARTICLE I
1.1 The Trustee shall hold all contributions to the Plan made by
the Company and the participants and from time to time received by it
from the Company; and all such contributions and any and all securities,
and other property purchased or otherwise acquired from such funds,
together with the earnings, profits, increments, additions and
appreciation thereto and thereon as may accrue from time to time, shall
constitute the Trust Fund. The Trustee shall maintain such separate
funds within the Trust Fund as the Investment Committee, designated
pursuant to the provisions of Article VII of the Plan, shall from time
to time designate. The Trustee shall manage, invest and reinvest the
Trust Fund pursuant to the provisions hereinafter set forth and shall
collect the income from the Trust Fund and make payments therefrom in
accordance with the provisions of this Agreement. Subject to the
considerations and limitations set forth herein, the Trustee shall be
responsible for the property received by it as Trustee, but shall not be
responsible of the administration of the Plan or for the assets of the
Plan which have not been delivered to and accepted by the Trustee. The
Trustee shall not have any authority or obligation to determine the
adequacy of or to enforce the collection from the Company of any
contribution to the Trust.
1.2 The Trustee shall take such action with respect to the
powers conferred upon it by the provisions of Section 1.4 hereof as it
may at any time and from time to time be directed to take by the
Investment Committee; provided, further that:
(a) The Trustee shall invest and reinvest the principal and
income of the Trust Fund only in accordance with the directions of the
Investment Committee or a duly appointed investment manager; and shall
make every sale, exchange and reinvestment directed by the Investment
Committee or investment manager, as the case may be.
(b) When contributions to the Plan made by the Company and by
the participants shall be paid to the Trustee under the Plan, the
Investment Committee shall instruct the Trustee in writing, subject to
the provisions of Section 1.3 and 1.6 hereof, in what specific
securities or other property said amounts shall be invested, in what
manner and at what time.
(c) The Trustee shall not sell or exchange any investment in the
Trust Fund without prior written instruction of the Investment Committee
or as provided in Section 1.6. The Investment Committee may, on its own
motion, at any time and from time to time instruct the Trustee in
writing, subject to the provisions of Sections 1.3 and 1.6 hereof, to
dispose of any investment in the Trust Fund at such time and in such
manner as the Investment Committee shall designate in such instructions.
(d) Notwithstanding the foregoing, the Trustee, without
obtaining prior approval or direction from the Investment Committee,
shall invest cash balances held by it from time to time in short term
cash equivalents including, but not limited to, units in its short term
collective investment fund if otherwise permitted by the terms of this
Agreement, U.S. Treasury Bills, commercial paper (including such forms
of commercial paper as may be available through the Trustee's Trust
Department), certificates of deposit and similar type securities, with a
maturity not to exceed one year; and furthermore, sell such short term
investments as may be necessary to carry out the instructions of the
Investment Committee.
(e) The Trustee shall maintain a separate fund within the Trust
Fund for all contributions made pursuant to Article X of the Plan, which
article established an employee stock ownership plan for the purposes of
meeting the requirements of the Tax Reform Act of 1976, and all earnings
and dividends received with respect thereto, and, notwithstanding the
foregoing provisions of this Section 1.2, shall, and is hereby directed,
to invest such contributions, earnings and dividends in the common stock
of the Company, except as the Investment Committee may otherwise direct
in writing from time to time. The Company agrees that contributions
made pursuant to Article X shall be made at least thirty days prior to
the date that such contributions are to be invested in the common stock
of the Company. The contributions described in this paragraph (e), the
stock purchases thereunder and all dividends and earnings thereon shall
constitute a separate fund within the Trust Fund.
1.3 The cash and investments, the earnings thereon and the
proceeds thereof, attributable to the contributions made by participants
shall be administered by the Trustee as a separate fund or funds within
the Trust Fund and shall be invested and reinvested in such investments
as provided for in Section 4.7(a) of the Plan. In the investment of the
balance of the Trust Fund, except for the portion thereof designated as
comprising the Payment Account, the Trustee and the Investment Committee
shall be guided by the basic policy and specific intention of the
Company that said balance of the Trust Fund shall be invested as
provided in Section 4.7(b) of the Plan. In the selection and retention
of investments with respect to the portion of the Trust Fund designated
in the Plan as the Payment Account, the basic policy shall be the
maintenance of the principal of said account; provided, however, that in
conformity with the provisions of the Plan the Administrative Committee
provided for in Article VII of the Plan may instruct the Trustee to
retain without reinvestment the investments representing all or any part
of a participant's credits which are transferred to the Payment Account.
All or any portion of a participant's, former participant's or
beneficiary's interest in the Trust Fund may be invested separately or
jointly with other interests therein. The provisions of this Section do
not apply to Article X of the Plan.
1.4 Subject to the provisions of Sections 1.2, 1.3 and 1.6
hereof, the Trustee shall have the following powers with respect to any
and all moneys, securities and other property at any time held by it and
constituting part of the Trust Fund hereunder:
(a) to invest and reinvest the principal and income of the Trust
Fund, without distinction between principal and income, in any
securities or other property whatsoever (including any securities or
other property of the Company and/or any subsidiary thereof) whether or
not such securities or other property constitute investments in which
trustees are by law authorized to invest trust funds, and to retain, in
the Trust Fund, all such securities or other property;
(b) to retain any securities or other property at any time
received by it as Trustee hereunder, and without regard to the
proportion which such securities or other property either alone or in
conjunction with any securities or other property of the same or similar
character may bear to the entire amount of the Trust Fund;
(c) to sell any securities or other property at any time held by
it at either public or private sale for cash or on credit at such time
or times as it may deem appropriate and to exchange such property and
grant options for the purchase or exchange thereof;
(d) to consent to and participate in any plan of reorganization,
consolidation, merger, combination or other similar plan, to consent to
any contract, lease, mortgage, purchase, sale or other action by any
corporation pursuant to such plan and to accept and retain any
securities or other property issued under any such plan;
(e) to retain, manage, operate, repair and improve and to
mortgage or lease for any period any real estate; to renew or extend or
participate in the renewal or extension of any mortgage, upon such terms
as may be deemed advisable, and to agree to a reduction in the rate of
interest on any mortgage or to any other modification or change in the
terms of any mortgage or of any guarantee pertaining thereto, in any
manner and to any extent that may be deemed advisable for the protection
of the Trust Fund or the preservation of the value of the investment; to
waive any default whether in the performance of any covenant or
condition of any mortgage or in the performance of any guarantee or to
enforce any such default in such manner and to such extent as may be
deemed advisable; to exercise and enforce any and all rights of
foreclosure, to bid on property on foreclosure, to take a deed in lieu
of foreclosure with or without paying a consideration therefor and in
connection therewith to release the obligation on the bond secured by
such mortgage and to exercise and enforce in any action, suit or
proceeding at law or in equity any rights or remedies in respect of any
such mortgage or guarantee;
(f) to deposit any such securities or other property with any
protective, reorganization or similar committee; to delegate
discretionary power thereto and to pay and agree to pay part of its
expenses and compensation and any assessments levied with respect to any
such securities or other property so deposited;
(g) to exercise all conversion and subscription rights
pertaining to any securities or other property;
(h) to collect and receive any and all money, securities and
other property of whatsoever kind or nature due or owing or belonging to
the Trust Fund and to give full discharge and acquittance therefor; and
to extend the time of payment of any obligation at any time owing to the
Trust Fund;
(i) to exercise all voting rights, in the manner that the
Administrative Committee shall direct, with respect to any investment
held for the Trust and in connection therewith to grant proxies,
discretionary or otherwise, provided that voting rights as to shares of
common stock of the Company which have been allocated to participants'
accounts pursuant to Article V or Article X of the Plan (the number of
shares of common stock of the Company being determined, for the purpose
of this Section 1.4(i), based upon the most current information then
available to the Company) shall be voted on in the manner designated by
the participant, it being understood that shares as to which no
designations have been received shall be voted in the manner that the
Administrative Committee shall direct, except as to shares held for the
Company's employee stock ownership plan, which shall be voted on only if
and in the manner designated by the participant to whose account such
shares have been allocated;
(j) to cause any securities or other property to be registered
and held in the name of one or more nominees with or without indication
of the capacity in which the securities or other property are held, or
to hold securities in bearer form, but it shall be liable for any loss
which may result from such securities or other property being so
registered and held in such manner instead of in its name as Trustee of
the Trust Fund;
(k) to settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trust; to commence or
defend suits or legal proceedings whenever, in its judgment, any
interest of the Trust requires it, and to represent the Trust in all
suits or legal proceedings in any court of law or equity or before any
other body or tribunal (provided, however, that the Trustee shall have
no obligation to take any such action for the benefit of the Trust
unless it shall be first indemnified for all expenses in connection
therewith, including counsel fees);
(l) to borrow money from others including the Company for the
purpose of the Trust but only at the direction of the Administrative
Committee, and, upon such terms and conditions as the Administrative
Committee may authorize, to advance its own funds to the Trust Fund, and
for the sum so borrowed or advanced the Trustee may issue its promissory
note as Trustee and secure the repayment thereof by the pledging of any
securities or other property in its possession as Trustee hereunder, and
may charge interest at such reasonable rate as may be approved by the
Administrative Committee for any moneys advanced by it;
(m) to deposit securities with stock clearing corporations or
depositories or similar organizations, whether located within the
Commonwealth of Massachusetts or in another state of the United States
of America;
(n) to employ suitable agents and legal counsel, who may be
counsel for the Company or its own counsel, and, as part of its
reimbursable expenses under this Agreement, to pay their reasonable
compensation and expenses;
(o) to establish, manage, and administer a securities lending
program on behalf of the Trust, pursuant to which the Trustee shall have
authority to cause any or all securities held in the Trust (excluding
the common stock of the Company and any other securities which the
Investment Committee identifies in writing to the Trustee as not being
available to participate in said securities lending program) to be lent
to such one or more brokers as the Trustee shall select upon such terms
and conditions as the Trustee shall determine, but only if the
Investment Committee has authorized the Trustee to act as a "securities
lending fiduciary" pursuant to a separate written agreement setting
forth the terms and conditions of such authorization, including without
limitation the compensation to be paid to the Trustee for its services
with respect to such securities lending program; and
(p) generally to do all such acts, execute all such instruments,
take all such proceedings and exercise all such rights and privileges
with relation to any securities or other property constituting a part of
the Trust Fund as if an individual were the absolute owner thereof.
The term "securities or other property" shall include, but
need not be confined to, stocks, common or preferred, or any other
interest in any corporation, bonds, debentures, notes or other evidences
of indebtedness or ownership, mortgages, trust and participation
certificates, real property or part interests therein, leases on real
property, life insurance or annuity contracts, and any other property of
any kind or nature whatsoever (including expressly any securities or
other property of the Company and/or any subsidiary thereof, whether
foreign or domestic), even though the same may not be legal investments
for a trustee under the laws applicable hereto.
1.5 Whenever and as often as the Trustee hereunder deems such
action desirable, it may by written instrument appoint any person or
corporation in any State of the United States to act as "Ancillary
Trustee" with respect to any portion of the Trust Fund then held or
about to be acquired on behalf of the Trust. Each such Ancillary
Trustee shall have such rights, power, duties and discretions as are
delegated to it by the Trustee hereunder, but shall exercise the same
subject to such limitations or further directions of the Trustee as
shall be specified in the instrument evidencing its appointment. Such
Ancillary Trustee may resign, or may be removed by the Trustee, as to
all or any portion of the assets so held at any time or from time to
time, by written instrument delivered one to the other, and the Trustee
hereunder may thereupon appoint another Ancillary Trustee, as successor,
to whom such assets shall be transferred, or may itself receive such
assets in termination of the Ancillary Trusteeship to that extent. Each
Ancillary Trustee shall be accountable solely to the Trustee hereunder,
and shall be entitled to reasonable compensation.
1.6 The Investment Committee, by any two members, may direct the
Trustee to segregate all or a portion of the Trust Fund in a separate
investment account or accounts and may appoint an investment manager, as
defined in the Employee Retirement Income Security Act of 1974 as
heretofore or hereafter amended ("ERISA"), to direct the investment and
reinvestment of each such investment account or accounts. In such
event, the Investment Committee, by any two members, shall notify the
Trustee of the appointment of such investment manager. Thereafter, the
Trustee shall make every sale or investment as directed in writing by
the investment manager. It shall be the duty of the Trustee to act
strictly in accordance with each direction. The Trustee shall be under
no duty to question any such direction of the investment manager, to
review any securities or other property held in any such investment
account or accounts acquired by it pursuant to such directions, to make
any recommendations to the investment manager with respect to such
securities or other property, or to evaluate the performance of any
investment manager. Notwithstanding the foregoing, the Trustee, without
obtaining prior approval or direction from an investment manager, shall
invest cash balances held by it from time to time in short term cash
equivalents including, but not limited to, units in its short term
collective investment fund if otherwise permitted by the terms of this
Agreement, U.S. Treasury Bills, commercial paper (including such forms
of commercial paper as may be available through the Trustee's Trust
Department), certificates of deposit, and similar type securities, with
a maturity not to exceed one year; and, furthermore, sell such short
term investments as may be necessary to carry out the instructions of an
investment manager regarding more permanent type investments and
directed distributions. The Trustee shall not be liable or responsible
for any loss resulting to the Trust Fund by reason of any sale or
investment made pursuant to the direction of an investment manager nor
by reason of the failure to take any action with respect to any
investment which was acquired pursuant to any such direction in the
absence of further directions of such investment manager. The Trustee
may rely upon any order, certificate, notice, direction or other
documentary confirmation purporting to have been issued by the
investment manager, which the Trustee believes to be genuine and to have
been issued by such investment manager. The Trustee shall not be
charged with knowledge of the termination of the appointment of any
investment manager until its receives written notice thereof from the
Investment Committee.
1.7 Divisional Credits as defined in Section 1.26 of the Plan
formerly held pursuant to the Master Trust Agreement for Federated
Department Stores, Inc. Pension and Profit Sharing Plans, which has been
terminated, shall be held and commingled with all other funds held
pursuant hereto and administered, invested and reinvested in the manner
provided herein and the Trustee shall not be required to invest
separately such Credits.
1.8 The Declaration of Trust executed by Trustee on February 27,
1967 as amended and restated April 14, 1976 creating "The Pooled
Employee Trust Funds of Boston Safe Deposit and Trust Company", as it
may be amended from time to time, is hereby made a part of this Trust
Agreement. Notwithstanding any other provisions of this Agreement, any
part of the assets hereunder may be commingled with the assets of other
trusts by investment as a part of the Group trust created by said
Declaration of Trust and as a part of any one or more of the Funds into
which the Group Trust may from time to time be divided, and the assets
so invested shall be subject to all of the provisions of said
Declaration of Trust as it may be amended from time to time; provided
that until further action of the Board of Directors of the Company no
investment of the assets held hereunder shall be made in any Fund of the
Group Trust other than the Daily Liquidity Fund.
1.9 In the event that a tender offer is made for shares of
common stock of the Company, the Trustee shall tender such Shares only
to the extent directed by participants to whose accounts the shares had
been allocated, provided that the Trustee and the Company shall act
expeditiously in advising participants in a timely manner if at all
possible as to their rights in determining whether the shares in their
respective accounts shall be so tendered. The foregoing sentence
notwithstanding, as to shares of the common stock of the Company for
which no such direction is received from participants and such shares
which are not allocated to the accounts of participants (such shares
being collectively called "Undesignated Shares"), the Trustee shall
tender only such number of Undesignated Shares as determined by
multiplying the number of Undesignated Shares by a fraction, the
numerator of which is the total number of shares to be tendered by the
Trustee pursuant to participants' instructions and the denominator of
which is the total number of all shares for which the Trustee has
received instruction from participants in regard to such tender offer.
The foregoing sentence notwithstanding, the Trustee shall have full
discretion to tender or not tender Undesignated Shares under the terms
of the tender offer as amended by CRTF Corporation on April 7, 1988,
pursuant to the terms of the Merger Agreement entered into by the
Company and CRTF Corporation, dated April 1, 1988.
ARTICLE II
2.1 The Trustee shall keep accurate and detailed accounts of all
investments, receipts and disbursements and other transactions
hereunder. Whenever requested by the Administrative Committee or the
Company, the Trustee's accounts may be audited by independent public
accountants selected by the Company. The Trustee shall appraise the
Trust Fund as of the close of each plan year and at such other times as
may be necessary or appropriate under the Plan. Promptly after each
such appraisal, it shall file with the Company and with the
Administrative Committee a detailed statement in duplicate showing the
moneys, securities and other properties then held in the Trust Fund and
the appraised value of each item. The Trustee shall also render in
duplicate at least once each plan year detailed accounts of its
transactions under this Agreement to the Administrative Committee and
the Company, and the Administrative Committee and the Company may
approve such accounts of the Trustee by an instrument in writing
delivered to the Trustee. In the absence of the filing in writing with
the Trustee by the Administrative Committee or the Company of exceptions
or objections to any such account within six months after the receipt by
the Administrative Committee and the Company of any such account, the
Administrative Committee and the Company shall be deemed to have
approved such account; and in such case, or upon the written approval of
the Administrative Committee and the Company of any such account, the
Trustee shall be released, relieved and discharged with respect to all
matters and things set forth in such account, with like effect as if
such account had been settled or allowed by judgment or decree of a
court of competent jurisdiction in an action or proceeding in which the
Trustee, the Company, the Administrative Committee and all persons
having or claiming to have any interest in the Trust were parties. No
person interested in the Trust or otherwise, other than the Trustee, the
Company and the Administrative Committee, may require an accounting, or
bring any actions against the Trustee. In any proceeding instituted by
the Trustee, the Company and/or the Administrative Committee hereunder,
only the Administrative Committee, the Company and/or the Trustee shall
be the necessary parties. The Trustee shall have no duty to require any
contributions to be made hereunder, and shall be accountable only for
the funds actually received by it.
2.2 The Trustee shall make such payments from the Trust Fund at
such time or times to such person or persons, including the
Administrative Committee, and in such form and amounts as the
Administrative Committee shall direct in writing; provided, however,
that no payment shall be made, either during the existence or upon the
termination of the Plan which will cause or permit any part of the Trust
Fund to be used for or diverted to purposes other than for the exclusive
benefit of the participants, their beneficiaries, or estates, or the
payment of expenses, pursuant to the provisions of the Plan, or will
cause or permit any portion of the Trust Fund to revert to or become the
property of the Company. Notwithstanding the foregoing, the Trustee
shall be fully protected in acting upon any such written direction of
the Administrative Committee without inquiry or investigation and shall
have no duty to determine the rights or benefits of any person in the
Trust Fund or under the Plan or to inquire into the right or power of
the Administrative Committee to direct any such payment.
2.3 The Administrative Committee shall have complete control and
authority to determine the rights and benefits, and all claims and
demands arising out of the provisions of the Plan, of any participants
or former participants or their beneficiaries or other persons having or
claiming to have any interest in the Trust Fund or under the Plan, and
any determination by the Administrative Committee with respect thereto
or with respect to any questions arising in connection with the
administration, interpretation and application of this Agreement shall
be binding upon all such participants, former participants,
beneficiaries and other persons. The Trustee shall have no power or
authority nor any duty to determine the rights or benefits of any person
having or claiming to have an interest in the Trust Fund or under the
Plan, or to examine into or control any disposition of the Trust Fund or
any part thereof which may be directed by the Administrative Committee.
2.4 The Company and the Administrative Committee shall have the
exclusive right to enforce any and all provisions of this Agreement on
behalf of all participants or their beneficiaries or other persons
having or claiming to have an interest in the Trust Fund or under the
Plan. In any action or proceeding affecting the Trust Fund or any
property constituting part or all thereof, or the administration thereof
or for instructions to the Trustee, the Company, the Administrative
Committee and the Trustee shall be the only necessary parties; and shall
be solely entitled to any notice or process in connection therewith; and
any judgment that may be entered in such action or proceeding shall be
binding and conclusive on all persons having or claiming to have any
interest in the Trust Fund or under the Plan.
2.5 Except as otherwise provided in ERISA, the Trustee shall not
be liable or responsible for an act or omission of another person in
carrying out any fiduciary responsibility where such fiduciary
responsibility is allocated to such other person by this Agreement or
the Plan or pursuant to a procedure established by this Agreement or the
Plan.
2.6 The Company hereby agrees to indemnify and hold the Trustee
harmless from and against any loss, costs, damages or expenses,
including reasonable attorneys' fees, which the Trustee may incur or pay
out by reason of any alleged or actual act, or failure to act, on the
part of the Company, the Investment Committee, the Administrative
Committee, any investment manager appointed pursuant to Section 1.6 or
any other person appointed by, or acting on behalf of, any of the
foregoing, whether or not the Trustee may also be considered liable for
such alleged or actual act, or failure to act, under the provisions of
Section 405(a) of ERISA; provided, however, that the Company's
obligation under this Section 2.6 shall not apply to any loss, costs,
damages or expenses which the Trustee may pay or incur by reason of a
failure by the Trustee to perform its duties and responsibilities under
this Agreement.
ARTICLE III
3.1 The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon by the Administrative Committee
and the Trustee. The Trustee shall also be paid the reasonable expenses
incurred by it in the administration of this Trust including fees for
legal services rendered to the Trustee in any context directly or
indirectly pertaining to the Trust. Such compensation and expenses
shall be paid out of the Trust Fund, except to the extent that the
Company may elect to pay such items. All taxes of any and all kinds
whatsoever that may be levied or assessed under existing or future laws
upon the Trust Fund or the income thereof shall be paid from the Trust
Fund.
3.2 The Company shall certify to the Trustees the names of the
members of the Administrative and Investment Committees acting from time
to time and furnish to the Trustee specimens of the signatures of said
members. When any member shall cease to act, the Company shall promptly
give notice to that effect to the Trustee, and until such notice is
received by the Trustee, the Trustee shall be entitled to assume that
the membership of such Committee is unchanged and to act accordingly.
The Administrative and Investment Committees shall notify the Trustee in
writing, signed by one of its members, of the name or names of its
member or members or agent or agents authorized to execute any document
or documents on behalf of such Committee, and the Trustee shall accept
and rely upon any document executed by such member or members or agent
or agents as representing action by such Committee until such Committee
shall file with the Trustee a written revocation of such authorization.
If at any time there shall be no member of such Committee, then for the
purpose of this Agreement, the Company shall be deemed to be such
Committee until there shall again be one or more members of such
Committee acting, and until such time, this Agreement shall be deemed to
read as if the Company were named in each place where such Committee is
mentioned. The Trustee may rely upon any certification, notice or
direction of the Company purporting to have been signed by the
president, the executive president, or the vice president and treasurer
of the company which the Trustee believes to be genuine. Communications
to the Trustee shall be addressed to its principal office at One Boston
Place, Boston, Massachusetts 02106, and communications to the Investment
or Administrative Committee shall be sent to the office of the Company,
attention Treasurer, Seven West Seventh Street, Cincinnati, Ohio 45202,
unless the Trustee or either committee shall request that communications
be sent to another address or person. No communication shall be binding
upon the Trust Fund or the Trustee until it is received by the Trustee.
3.3 If at any time the Trustee is in doubt concerning the course
which it should follow in connection with any matter relating to the
administration of this Trust, it may request the Administrative
Committee to advise it with respect thereto, and shall be protected in
relying upon the advice or direction which may be given to it by the
Administrative Committee in response to such request. The Trustee may
consult with legal counsel, who may be counsel for the Company or its
own counsel, with respect to the meaning or construction of this
Agreement or its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall be fully
protected with respect to any action taken or omitted by it in good
faith pursuant to the advice of such counsel.
3.4 The Company or the Administrative Committee, or both, may
employ the Trustee as its agent to perform any act, keep any records or
accounts, or make any computation, which are required of the Company or
the Administrative Committee by this Agreement or the Plan and may
compensate said Trustee therefor, and such employment shall not be
deemed to be contrary to or inconsistent with the provisions of this
Agreement. Nothing done by said Trustee as agent for the Company or the
Administrative Committee shall change or increase in any manner its
responsibility or liability as Trustee hereunder.
3.5 Notwithstanding anything in this Agreement to the contrary,
the Trustee shall be indemnified and saved harmless by the Company from
and against all personal liability to which the Trustee may be subjected
as a result of the investment of any part of the Trust Fund in the
common stock of the Company or in any security, insurance company
contract or other property pursuant to the direction of the Company, the
Investment Committee, or any investment manager, including all expenses
reasonably incurred in its defense in the event the Company fails to
provide such defense.
ARTICLE IV
4.1 The Trustee may resign its duties hereunder by filing with
the Company its written resignation. Such resignation shall take effect
upon the appointment of a successor trustee as hereinafter provided.
4.2 The Trustee may be removed by the Company at any time, upon
60-days' notice to the Trustee but such notice may be waived by the
Trustee. Such removal shall be effected by delivering to the Trustee a
written notice of its removal executed by the Company, and giving notice
to the Trustee of the appointment of a successor trustee in the manner
hereinafter set forth. If within 60 days after notice of resignation or
removal shall have been given under the provisions of this Article, a
successor trustee shall not have been appointed, the resigning or
removed trustee or the Administrative Committee or any member of the
Administrative Committee may apply to any court of competent
jurisdiction for the appointment of a successor trustee.
4.3 The appointment of a successor trustee hereunder shall be
accomplished by and shall take effect upon the delivery to the resigning
or removed trustee, as the case may be, of (a) an instrument in writing
appointing such successor trustee, executed by the Company, and (b) an
acceptance in writing of the office of successor trustee hereunder
executed by the successor so appointed. Any successor trustee hereunder
may be either a corporation authorized and empowered to exercise trust
powers, or may be one or more individuals. All of the provisions set
forth herein with respect to the Trustee shall relate to each successor
trustee hereunder.
4.4 Upon the appointment of a successor trustee, the resigning
or removed trustee shall transfer and deliver the Trust Fund to such
successor trustee, after reserving such reasonable amount as it shall
deem necessary to provide for its expenses in the settlement of its
account, the amount of any compensation due to it and any sums
chargeable against the Trust Fund for which it may be liable, but if the
sums so reserved are not sufficient for such purposes, the resigning or
removed trustee shall be entitled to reimbursement for any deficiency
from the successor trustee and the Company.
ARTICLE V
5.1 The Company shall have the right at any time to terminate
the Trust. Notice of such termination shall be given to the Trustee by
an instrument in writing executed by the Company and declaring that the
Trust hereby established is terminated, together with a certified copy
of the resolution of the Board of Directors of the Company to that
effect. A termination of the Trust hereby established pursuant to
action of the Board of Directors shall take effect as of the date of the
delivery of such notice to the Trustee.
5.2 If and when this Trust is terminated as aforesaid, the
Trustee shall, upon the direction of the Administrative Committee,
distribute the Trust Fund to or for the benefit of the participants in
the Plan and beneficiaries named by said Administrative Committee (or by
the Company if the Administrative Committee does not act within a
reasonable time after such termination) and in the proportions and
manner specified by it, or in the absence of such direction, in such
manner as may be directed by a judgment or decree of a court of
competent jurisdiction. Upon making such payments the Trustee shall be
relieved from all further liability with respect to all amounts so paid.
5.3 The Company shall have the right at any time and from time
to time by an instrument in writing delivered to the Trustee executed
pursuant to the order of its Board of Directors, to modify or amend this
Agreement in whole or in part except that the duties and
responsibilities of the Trustee shall not be increased without its
written consent; provided, however, that no such modification or
amendment shall cause any part of the Trust Fund to be used for or
diverted to purposes other than for the exclusive benefit of the
participants, or their beneficiaries, or estates, or the payment of
expenses, pursuant to the provisions of the Plan. Any such modification
or amendment shall become effective upon delivery of the written
instrument of modification or amendment to the Trustee, and the
endorsement of the Trustee of its written consent thereto.
ARTICLE VI
6.1 Any subsidiary of the Company, with the consent of the Board
of Directors of the Company, may become a party to this Agreement by
taking appropriate corporate action to adopt the Plan for its employees,
and by executing and delivering counterparts of this Agreement to the
Company and the Trustee. Contributions paid to the Trustee by or on
behalf of each such subsidiary and its employees shall become a part of
the Trust Fund hereby created and shall be subject to all the terms and
conditions of this Agreement as it may exist from time to time.
6.2 No amounts payable from the Trust Fund to any person
pursuant to the provisions of the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge or seizure by such person, and no such amounts shall
be in any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of such person either during his
employment with the Company or after separation from its service, or
otherwise.
6.3 This Agreement and the Trust hereby created shall be
governed, construed, administered and regulated in all respects under
the laws of the Commonwealth of Massachusetts.
In Witness Whereof, FEDERATED DEPARTMENT STORES, INC. has caused
this Restated Agreement to be executed in its corporate name by its
Treasurer, and its corporate seal to be hereunto affixed and attested by
its Secretary, and BOSTON SAFE DEPOSIT AND TRUST COMPANY has caused this
Restated Agreement to be executed in its corporate name by one of its
Vice Presidents, and its corporate seal to be hereunto affixed and
attested by one of its Assistant Secretaries, as of July 1, 1984.
Attest: FEDERATED DEPARTMENT STORES, INC.
/s/ Boris Auerbach By: /s/ James M. Leahy
Secretary Treasurer
BOSTON SAFE DEPOSIT
Attest: AND TRUST COMPANY
/s/ Charlotte E. Tibbitts By: /s/ Robert E. Mainer
its Assistant Secretary Senior Vice President
EXHIBIT B
JANUARY 1, 1987 THROUGH DECEMBER 31, 1988 PROVISIONS OF
THIS PLAN
This Exhibit B sets forth the provisions of the Plan as in effect from
January 1, 1987 through December 31, 1988, and this Exhibit B is no longer
effective after December 31, 1988. Exhibit B is composed of three documents.
The first of such documents is a working copy of the Plan as effective
immediately prior to January 1, 1987. A prior determination of the Internal
Revenue Service that such pre-1987 Plan qualified as a tax-favored plan under
Section 401(a) of the Code was previously received by Federated.
The second of such documents is a technical amendment to the Plan to
make certain changes to the Plan (as in effect immediately prior to January 1,
1987) to reflect changes in the manner in which the Plan was operated from
January 1, 1987 through December 31, 1988.
The third of such documents is an amendment to the Plan, mainly taken
from the provisions of Model Amendment IV as set forth in Notice 87-2 of the
Internal Revenue Service (except for certain modifications made to Section XI
therein), to make sure the Plan complies with the requirements of the Tax Reform
Act of 1986 during the period from January 1, 1987 through December 31, 1988.
RETIREMENT INCOME
AND
THRIFT INCENTIVE PLAN
(As amended and restated through January 1, 1985)
FEDERATED DEPARTMENT STORES, INC. authorized the
establishment and putting into operation as of January 25, 1953
the Retirement Income and Thrift Incentive Plan, in order to
recognize the contribution of its employees to the growth and
success of the Company's business by providing eligible employees
with retirement, death and total disability benefits from the
profits of the Company and from investment in its common stock,
and by encouraging them to increase such benefits through
individual savings.
The Plan was amended; and, effective as of January 1, 1976
the Company adopted an amended and Restated Plan. The Plan was
subsequently amended and effective January 1, 1984 the Company
adopted a revised and restated Plan; provided that the provisions
set forth in the second paragraph of Section 4.2 thereof became
effective July 1, 1984.
The Plan was then further amended, and thereafter effective
January 1, 1985 the Company adopted an Amended and Restated Plan
as set forth therein.
The Plan and Trust are intended to meet the requirements of
Section 401(a) and 501(a) of the Internal Revenue Code of 1954,
as amended by the Employee Retirement Income Security Act of
1974.
The provisions of the Plan shall apply only to an employee
who terminates employment on or after the Effective Date of this
Amended and Restated Plan. The rights and benefits, if any, of a
former employee shall be determined in accordance with the prior
provisions of the Plan in effect on the date his employment
terminated.
ARTICLE I
Definitions
The following terms have the meanings specified below unless
the context otherwise requires:
1.1 "Plan" means the Retirement Income and Thrift Incentive
Plan set forth herein and as the same may be amended from time to
time.
1.2 "Retirement Income portion of the Plan" means that
portion of the Plan in which all participants shall participate
without requirement of any contributions to the Plan by the
participants.
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1.3 "Thrift Incentive portion of the Plan" means that part
of the Plan in which participants shall participate on the basis
of their voluntary contributions to the Plan pursuant to Section
4.2 hereof.
1.4 "Company" means Federated Department Stores, Inc., a
Delaware corporation, including the present divisions thereof,
and such additional division or divisions and such subsidiary or
subsidiaries as the Board of Directors may from time to time
determine.
1.5 "Division" means a constituent unit of Federated
Department Stores, Inc. as determined from time to time by the
Board of Directors, including its home office, and "subsidiary"
means any corporation more than 50% of whose voting stock is, at
the time the determination is made, owned directly or indirectly
by Federated Department Stores, Inc.
1.6 "Employee" means each person who is employed by the
Company as determined by the rules or practices of the division
or subsidiary by which such person is employed, but does not
include (i) a director of the Company who is not employed by the
Company in any other capacity, (ii) any person whose compensation
is paid by the Company for a lessee of a leased department of the
Company, (iii) any person whose compensation consists of a
retainer or a fee, or (iv) any employee of the Company's Ralphs
Division who is not a participant or eligible for participation
in the Ralphs Grocery Company Retirement Plan.
1.7 "Eligible employee" means each employee eligible to
become a participant as provided in Article II hereof.
1.8 "Participant" means each eligible employee who has
accepted the Plan in the manner provided in Section 3.1 hereof.
1.9 "Regular employment" means, commencing after December
31, 1975, employment for 1000 or more hours in any twelve month
period, provided that
(a) regular employment by the corporation or other
predecessor of any division, including any branch thereof,
of the Company whose business was acquired by the Company on
or prior to the Effective Date of the Plan shall be
considered as such employment by the Company.
(b) regular employment by the corporation or other
predecessor of any division, including any branch thereof,
of the Company whose business was acquired by the Company
after the Effective Date of the Plan to the extent that the
division becomes part of the Company as provided in Section
1.4 hereof or an employee becomes an employee of a division
included within such definition shall be considered as such
employment by the Company;
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(c) regular employment by a lessee of a leased
department of the Company whose business is directly assumed
by the Company or regular employment by any subsidiary of
the Company, shall be considered as such employment by the
Company to the extent that the Board of Directors may from
time to time determine.
The period of each approved absence shall be included in the
determination of regular employment. For all periods prior to
January 1, 1976, "Regular employment" shall have the meaning set
forth in this Plan, as in effect on December 31, 1975.
1.10 "Approved absence" means an absence, with or without
compensation, approved by the Company with respect to any of its
employees, or approved by the Committee, such as but not limited
to absence for service in the armed forces or in governmental
agencies, or for sickness or disability; provided that no absence
for a period of more than 12 consecutive calendar months (except
for service in the armed forces or in governmental agencies)
shall be approved absence for the purposes of the Plan unless the
Committee shall in its discretion so determine; provided further
that any absence for which compensation is paid directly or
indirectly by the Company shall in any event constitute an
approved absence.
1.11 "Committee" means the Administrative Committee
appointed as provided in Article VII hereof and "Administrator"
means the person designated for such purpose by the Committee.
1.12 "Board of Directors" means the Board of Directors of
Federated Department Stores, Inc.
1.13 "Anniversary Date of the Plan" means the first day of
the plan year as hereinafter defined.
1.14 "Fiscal year" means the annual accounting period of 52
or 53 weeks, as the case may be, ending approximately on the last
day of a taxable year (or such other annual accounting period as
may from time to time be established by the Board of Directors)
upon the basis of which the accounting records of the Company are
maintained.
1.15 "Compensation" of an employee for any year means the
total compensation paid such employee for such year by such of
the divisions and subsidiaries of the Company as shall have
elected to participate in the Plan for services rendered as
reported by the Company for federal income tax purposes
determined in accordance with rules established by the Committee
pursuant to Section 7.2 hereof. Compensation shall also include
tips paid to such employee to the extent reported by the Company
for federal income tax purposes, amounts as shall be contributed
pursuant to employee's elections to the Thrift Incentive portion
of the Plan pursuant to Section 401(k) of the Internal Revenue
Code, and amounts treated as employer contributions pursuant to
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employee's elections under Section 125 of the Internal Revenue
Code.
1.16 "Participating compensation" of an employee means his
compensation for such year as defined in Section 1.15 hereof;
provided that for any year in which an employee becomes a
participant, participating compensation shall include only the
compensation paid for the portion of the year in which such
employee is a participant.
1.17 "Contributions", or the "amount contributed", by a
participant in any year means the amount contributed by him to
the Plan during such year pursuant to Section 4.2 hereof and not
withdrawn by him during such year.
1.18 "Trust Fund" means the corpus of the fund established
under the trust agreement provided in Section 8.1 hereof, and all
earnings, increments and additions thereon and thereto, and
"Trustee" shall mean the trustee of said trust fund.
1.19 "Beneficial equivalent" means a benefit determined by
the Committee to be of equal value to another benefit or to a
dollar amount based upon, for determinations made from and after
January 1, 1984, the annuity purchase rates used at the date of
such determination for such purposes with respect to pension
plans qualified under Section 401(a) of the Code by the Travelers
Insurance Company.
1.20 "Normal retirement date" means the first day of the
first month which coincides with or next follows the date a
participant reaches (a) age 65 or (b) such later age as may be
provided under the Federal Social Security Act for the payment of
benefits on an unreduced basis.
1.21 "Effective Date of the Plan" means January 25, 1953,
"Effective Date of the Restated Plan" means January 1, 1976,
"Effective Date of the Revised and Restated Plan" means January
1, 1984 and "Effective Date of the Amended and Restated Plan"
means January 1, 1985.
1.22 The masculine pronoun includes the feminine pronoun
wherever used.
1.23 "Plan year" means the calendar year beginning on
January 1 of each year.
1.24 "Entry Date" means the first day of any calendar month
until July 1, 1984 and thereafter means the first day of any
calendar quarter.
1.25 A. "Magnin Plan" means the I. Magnin & Co. Profit
Sharing Retirement Benefit Payments Plan prior to January 1,
1975, the date of the merger of said plan into this Plan.
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B. "Bullock's Plan" means the Bullock's Profit
Sharing Retirement Benefit Payments Plan prior to July 1, 1984,
the date of merger of said plan into this Plan and Article XII
hereof.
C. "Rike's Plan" means the Rike-Kumler Company
Retirement Plan prior to July 1, 1984, the date the merger of
said plan into this Plan.
D. "Children's Place Plan" means The Children's Place
Profit Sharing Savings Plan prior to July 1, 1984, the date of
the merger of said plan into this Plan.
E. "Rich's Plan" means the Rich's Profit Sharing
Savings Plan prior to January 1, 1985, the date of the merger of
said plan into this Plan.
1.26 "Divisional Credits" means all credits to the accounts
of participants in the Magnin Plan, the Bullock's Plan (other
than such credits of participants in Article XII hereof), the
Rike's Plan and the Rich's Plan transferred to the Plan and the
accretions thereon as hereinafter provided for.
1.27 "Hour" means, subject to Sections 2530.200b-2 and
2530.200b-3 of the Department of Labor regulations, (a) each hour
for which an employee is paid or entitled to payment for the
performance of duties for the Company, these hours to be credited
to the employee for the computation period or periods in which
the duties are performed, (b) each hour for which an employee is
paid or entitled to payment by the Company on account of a period
of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence, these hours
to be credited to the employee for the computation period or
periods in which the period during which no duties are performed
occurs, and (c) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Company, these hours to be credited to the employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment was made.
1.28 "Joint and survivorship annuity" means an annuity for
the life of the participant with a survivor annuity for the life
of his spouse which is not less than one-half of, or greater
than, the amount of the annuity payable during the joint lives of
the participant and his spouse and which is the actuarial
equivalent of a single annuity for the life of the participant.
1.29 "Valuation Date" means, with respect to any plan year,
the last day of each calendar month in such plan year, and any
other date in such plan year as of which the Committee may decide
the Trust Fund shall be valued.
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1.30 "Valuation Period" means any period which begins on a
day which immediately follows a Valuation Date and ends on the
immediately following Valuation Date.
ARTICLE II
Eligibility
2.1 Each employee on the Effective Date of the Amended and
Restated Plan or on a subsequent Entry Date shall be an eligible
employee as of such date, provided that on such date he:
(a) shall have completed at least one twelve month
period of Regular employment either during the twelve month
period commencing with the last date of his employment by
the Company or in any calendar year following the last date
of his employment with the Company, subject to the break in
service provisions set forth in Section 6.8 hereof;
(b) shall not be a participant, be eligible for
participation, or be in the process of qualification for
participation (i) in any other plan providing retirement
benefits qualified under Section 401(a) of the Internal
Revenue Code or (ii) in any other plan providing retirement
benefits adopted in the Company after January 25, 1953, the
cost of which, in either case, is borne in whole or in part
by the Company; but an employee otherwise eligible to become
a participant hereunder shall not be disqualified therefrom
because of his participation in such other plan or plans if
(x) such participation relates solely to employment which
preceded the Entry Date on which he would otherwise become a
participant hereunder, and (y) the retirement benefits under
such other plan or plans, in the case of a pension plan
relate solely to such past service, or in the case of a
profit-sharing retirement plan are derived solely from
contributions made with respect to such past service. The
restrictions of this clause (b) shall not be applicable to
(1) such plans which were in effect in a division or
subsidiary at the time its business was acquired by the
Company, provided the Income Before Federal Taxes on Income
of any such division or subsidiary is excluded for the
purpose of computing the Company's contribution to the Plan
pursuant to Section 4.3 hereof, (2) the Company's Pension
Plan, (3) the Company's Supplementary Executive Retirement
Plan, and (4) the Ralphs Grocery Company Retirement Plan
maintained by the Company's Ralphs Division.
ARTICLE III
Participation
3.1 Each eligible employee as of the Entry Date shall
become a participant in the Plan as of said date. Within 60 days
after such Entry Date, or such further period as the Committee
may grant, each eligible employee shall file with the Committee
his written acceptance of participation in the Plan upon the
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terms and conditions hereof upon such form as the Committee shall
prescribe.
3.2 The participation of a participant in the Plan shall be
terminated upon:
(a) the termination of his reemployment for any
reason, provided that a same year break in service has
occurred as provided in Section 6.8 hereof;
(b) his ceasing to comply with the conditions of
eligibility contained in clause (b) of Section 2.1 hereof;
or
(c) failure to obtain approval by the Committee of an
absence for a period of more than 12 consecutive months
(except for service in the armed forces or in governmental
agencies) to the extent provided in Section 1.10 hereof.
If after termination of his employment a former participant
or other employee is reemployed by the Company, he shall for all
purposes of the Plan constitute a new employee as of the date of
such reemployment subject to the provisions of Section 6.8 of the
Plan. For the purpose of making allocations pursuant to Article
V, no allocation shall be made if the employee is not a
participant through the last day of such Plan year.
ARTICLE IV
Contributions
4.1 No contribution shall be required of any participant as
a condition of his participation in the Plan.
4.2 Each participant may, at his election, contribute to
the Thrift Incentive portion of the Plan, an amount equal to a
percentage of his participating compensation for such year. The
percentage of each participant's contribution shall be in a
multiple of 1%, but shall not be less than 1%, nor more than 5%,
of his participating compensation for the year in which such
contribution shall be made (such contributions, together with any
Qualified Deferred Earnings Contributions as defined in the next
paragraph, and "Mandatory Contributions" made under either the
Children's Place Plan or the Rich's Plan, are hereinafter
collectively referred to as "basic contributions"). In addition,
a participant may contribute in multiples of 1% but not more than
5% an additional percentage of his participating compensation for
the year in which such contribution shall be made (such
contributions, together with "Additional Contributions" made
under the Children's Place Plan and "Voluntary Contributions"
made under the Rich's Plan, are hereinafter referred to as
"additional contributions").
Effective as of the first day of the plan year following the
date upon which a participant completes three years of
<PAGE>
employment, that participant may elect under Section 401(k) of
the Internal Revenue Code and the applicable Treasury Regulations
thereunder, in writing on a form prescribed by the Committee, to
defer receipt of up to 5% of his Participating compensation, or
such lesser amount as established by rule of the Committee (which
rule may be applied uniformly, or solely to those Participants
who are "highly compensated" as defined in Section 401(k) of the
Internal Revenue Code and the applicable Treasury Regulations
thereunder) in whole or in part in place of the amounts
contributed pursuant to the first sentence of the first paragraph
of this Section (the amounts contributed under said sentence and
deferred under this paragraph shall not exceed 5%, in the
aggregate, of participating compensation) and to have such
deferred earnings, hereinafter referred to as Qualified Deferred
Earnings Contributions, contributed to the Plan by the Company on
his behalf; provided, however, that the total contribution under
this Section shall in no event exceed 10% of participating
compensation; and provided, further, that Qualified Deferred
Earnings Contributions and the appreciation thereon may not be
withdrawn by or distributed to said Participant until the
earliest of the Participant's retirement, death, disability,
separation from service, hardship (hardship hereunder means
necessary in light of immediate and heavy financial needs of the
Participant, and distributions for reason of hardship will be
limited to the amount required to meet an immediate financial
need that is not reasonably available from other resources of the
Participant, all as determined by the Committee in accordance
with Section 401(k) of the Internal Revenue Code and the
applicable Treasury Regulations thereunder) or attainment of age
59-1/2. Any (or all) "highly compensated employees" as
hereinafter defined may be required to revise his election to
defer an amount of his Participating compensation, in conformity
with a uniform rule of the Committee, if the Plan does not meet
both of the following limits:
(a) Those employees eligible to make Qualified
Deferred Earnings Contributions hereunder shall satisfy the
provisions of subparagraph (A) or (B) of Section 410(b) (1)
of the Code; and
(b) The actual deferral percentage for highly
compensated employees for such year shall bear a
relationship to the actual deferred percentage for all other
such eligible employees for such plan year which meet either
of the following tests:
(i) The actual deferral percentage for the group
of highly compensated employees is not more than the
actual deferral percentage of all other eligible
employees multiplied by 1.5.
(ii) The excess of the actual deferral percentage
for the group of highly compensated employees over that
of all other eligible employees is not more than 3
percentage points, and the actual deferral percentage
for the group of highly compensated employees is not
more than the actual deferral percentage of all other
eligible employees multiplied by 2.5.
In the event that the limits described above are inadvertently
exceeded, any excess Qualified Deferred Earnings Contributions
shall be treated as contributions under the first sentence of the
first paragraph hereof; provided that such recharacterization
shall occur prior to the end of the plan year for which such
excess occurs. For the purpose of this Section 4.2, the term
"highly compensated employee" means any employee who is more
highly compensated than two-thirds of all eligible employees.
All contributions shall be made by deductions authorized in
writing by the participant, upon such form as the Committee shall
prescribe, from each payment of compensation to the participant.
As of the first day of each Plan year following the first year in
which such contributions are made, the amount of such
contributions shall be adjusted to take into account any change
in election on the part of the participant. Such contributions
shall be automatically suspended during any period of approved
absence of the participant without compensation. All such
contributions shall be deposited by the Company with the Trustee,
within thirty (30) days after the end of the calendar month in
which the contributions are deducted, to be held by the Trustee
in the Trust Fund for and on account of the Thrift Incentive
portion of the Plan. A participant may at his election,
discontinue his contributions at any time during the Plan year,
but in such event he shall not again be eligible to contribute to
the Thrift Incentive portion of the Plan until the Anniversary
Date of the Plan next following the date of such discontinuance.
4.3 Subject to the provisions of Article VIII with regard
to amendments and termination of the Plan and the liabilities of
the Company under th Plan, for the Company's fiscal year
beginning February 3, 1985 and ending on February 1, 1986, and
for each calendar year beginning on or after January 5, 1986, the
Company shall contribute to the Plan for each such year an amount
equal to 2% of the Company's Income Before Federal Taxes on
Income for each such year, before deduction of any amount in
respect of said contribution by the Company to the Plan or such
greater amount as the Board of Directors in its discretion may
determine; provided that
(a) for the purpose of computing said contribution,
there shall be excluded from the Company's Income Before
Federal Taxes on Income for each such year, (i) the Income
Before Federal Taxes on Income of the Ralphs Grocery Company
division of this Company for each such year as determined in
accordance with the standard accounting procedures of the
Company by its chief accounting officer, except that for the
purpose of computing said contribution for calendar year
1986 and for each calendar year thereafter, there shall not
be so excluded that portion thereof determined by
multiplying such income by a fraction, the numerator of
which is the dollar amount of the compensation of all Ralphs
Division employees participating in this Plan and the
denominator of which is the sum of such compensation plus
the compensation of all other employees of the Ralphs
Division participating in any other plan providing
retirement benefits, the cost of which is borne in whole or
in any part by the Ralphs Division; and (ii) for each such
year, the Income Before Federal Taxes on Income of the
Bullock's Division of the Company as determined in
accordance with the standard accounting procedures of the
Company by its chief accounting officer arrived at by
multiplying such income by a fraction, the numerator of
which is the dollar amount of the compensation of all
participants under the Bullock's Profit Sharing Retirement
Benefit Payment Plan as incorporated into Article XII of
this Plan and the denominator of which is the sum of such
compensation plus the compensation of all participants of
the Bullock's Division under this Plan.
(b) the amount of said contribution for any plan year
shall not exceed the Maximum Allowable Contribution as
defined in Section 4.5 hereof, and
(c) the amount of said contribution for any plan year
shall be subject to reduction as provided in Section 4.6
hereof,
but shall in any event be sufficient to provide the 20% provided
for in Section 4.4 hereof. It is recognized that the portion of
the Company's Income Before Federal Taxes on Income attributable
to the period commencing on January 5, 1986 and ending on
February 1, 1986, inclusive, shall be considered for the purposes
of calculating the Company's contribution pursuant to this
Section for both fiscal year 1985 and calendar year 1986.
In addition, the Board of Directors may for any plan year
ending after January 1, 1984, from time to time make additional
contributions to the Retirement Income portion of the Plan."
4.4 The contribution of the Company for each plan year
pursuant to Section 4.3 hereof shall be allocated to, and be
deposited by the Company with the Trustee to be held by the
Trustee in the Trust Fund for and on account of, the Thrift
Incentive portion of the Plan provided that the amount so
allocated to the Thrift Incentive portion of the Plan shall not,
when added to surrendered Thrift Incentive credits as described
in Section 5.4(a), result in a total allocation for the plan year
to said portion of the Plan in excess of an amount equal to the
aggregate amount of participant's contributions made to said
portion of the Plan during such year but shall not be less than
20% of such contributions. If said total allocation (exclusive
of the part thereof representing allocations to make up prior
<PAGE>
years' deficiencies) would otherwise exceed said aggregate amount
of participants' contributions, the amount of such excess shall
be added to the amount otherwise required by this Section to be
allocated to the Retirement Income portion of the Plan.
For the purposes of this Section, contributions made by
participants shall not include additional contributions but shall
include Qualified Deferred Earnings Contributions as these terms
are used in Section 4.2 hereof.
4.5 As used in this Article
(a) "Maximum Allowable Contribution" means the smaller
of the following amounts:
(i) the maximum aggregate amount allocable to the
Thrift Incentive portion of the Plan pursuant to
Section 4.4 hereof; or
(ii) the maximum amount allowable as a deduction
in respect of the fiscal year of the Company for a
contribution to a profit sharing trust, in computing
the income of the Company for said fiscal year for the
purpose of federal taxes on income, as provided in the
Internal Revenue Code, including the provisions thereof
relating to the deductibility of contributions against
amounts by which the deductible limit in a preceding
year exceeded the contribution made in respect of such
preceding year.
(b) "Income Before Federal Taxes on Income" for a
fiscal or calendar year means the Company's Income Before
Federal Taxes on Income as determined by the Chief
Accounting Officer of the Company in Accordance with the
standard accounting procedures of the Company.
(c) Calendar year means the period of twelve fiscal
months of the Company, commencing on the first day of its
January fiscal month and ending with the last day of its
December fiscal month.
4.6 The amount of the Company's contribution to the Plan
for each plan year shall be paid to the Trustee, either in a
single payment or in installments, not later than the last day of
the period prescribed for the payment of a deductible
contribution for such year by the relevant provisions of the
Internal Revenue Code and other applicable law. Such
contribution may be based upon Income Before Federal Taxes on
Income estimated in accordance with established accounting
principles consistently applied to data available at the time the
estimate is made, and certified to by the chief accounting
officer of the Company, and the contribution of the Company shall
be made to the Trustee not later than the last day of the period
prescribed for the payment of a deductible contribution for such
<PAGE>
year by the relevant provisions of the Internal Revenue Code and
other applicable law on the basis of such estimate. In such
event, after the examination by the chief accounting officer of
the data necessary to the determination of the amount thereof for
the relevant calendar year (or fiscal year as to the Company's
fiscal year ending February 1, 1986), the Company shall determine
the amount of its contribution on the basis of such data and as
provided in this Article; and any amount by which the amount
theretofore contributed by the Company in respect of such year
shall be less than the amount of its contribution as so
determined shall be contributed by the Company not later than the
last day of the period prescribed by the relevant provisions of
the Internal Revenue Code and other applicable law for the
payment of a deductible contribution to the Plan for its next
succeeding plan year, and any amount by which the amount
theretofore contributed by the Company in respect to such year
shall exceed the amount of its contribution as so determined
shall be applied as promptly as possible as a reduction in the
amount of the contributions which the Company may thereafter be
required to make pursuant to Section 4.3 hereof. If, after the
Company has made a contribution for any such plan year, all or
any part thereof shall be finally disallowed as a deduction under
the Internal Revenue Code in computing the income of the Company
for the fiscal year within which the relevant plan year ends for
the purpose of federal taxes on income, then the amount of the
contributions that the Company would otherwise thereafter be
required to make pursuant to Section 4.3 hereof shall be reduced
by an amount equal to the amount disallowed as such a deduction.
4.7 It is the basic policy and specific intention of the
Company that the investment and reinvestment of the contributions
to the Plan made by the participants and by the Company
(including pursuant to Article XII hereof) shall be made as
follows:
(a) The cash and investments, the earnings thereon,
and the proceeds thereof attributable to the contributions
to this Plan or a plan merged herein made by participants,
shall be included in and invested and reinvested (except as
hereinafter expressly provided) as provided in Fund A
described below. Fund A shall also include funds
representing the Company-contributed portion of
participant's Thrift Incentive Credits transferred thereto
pursuant to Section 5.6 hereof. The foregoing
notwithstanding, the cash and investments thereon and the
proceeds thereof, attributable to the contributions made by
participants in the Rich's Plan which were invested on
December 31, 1984 in Diversified Investments, as defined in
the Rich's Plan, shall be included in and invested and
reinvested pursuant to Fund B described below, and such cash
and investments and the proceeds thereof so attributable
which were invested on December 31, 1984 in common stock of
Federated Department Stores, Inc. shall be included in and
invested pursuant to Fund C described below. The Company
may from time to time allow all participants who have such
credits included in either or both of Fund B or C to
transfer all or any portion of such credits to Fund A. The
dollar value of said credits so transferred shall be
determined by the Trustee as of the Valuation Date
immediately following the date on which such transfer shall
take place.
Fund A - all sums in this Fund shall be invested in a
variety of short-term fixed income corporate and government
bonds, investment contracts with selected insurance
companies which provide for a stated investment return, and
intermediate-term variable rate fixed-income securities as
selected by the Investment Committee or by investment
managers appointed thereunder.
Fund B - all sums in this Fund shall be invested in a
variety of corporate and government fixed income securities
and equity securities (but not securities of the Company),
and cash equivalents as selected by the Investment Committee
or by investment managers appointed thereunder.
Fund C - all sums in this Fund (consisting only of
funds invested as of December 31, 1984 in common stock of
Federated Department Stores, Inc. pursuant to the investment
alternative described in Section 3.3(b) (1), (2) or (6) of
the Rich's Plan and the earnings thereon) shall be invested
and reinvested in the common stock of Federated Department
Stores, Inc. and cash equivalents; provided that no
participant shall have the right to transfer sums into this
Fund or to make any contributions thereto.
(b) The cash and investments, the earnings thereon and
the proceeds thereof, attributable to the contributions made
by the Company (including contributions to the Profit
Sharing Account of Article XII participants), other than the
portion thereof representing the value of a participant's
Thrift Incentive Credits transferred to Fund A and
Retirement Income Credits and Divisional Credits transferred
to the Stability Income Fund, as hereinafter defined,
pursuant to Section 5.6 hereof (and an Article XII
participant's Profit Sharing Account transferred to the
Special Account pursuant to Section 12.16 hereof), shall be
invested and reinvested in common shares of Federated
Department Stores, Inc. and in such other investments all as
the Investment Committee created in accordance with Section
7.8 hereof may determine, it being understood that up to one
hundred percent (100%) of the amounts attributable to such
contributions may be invested in such common shares. All
funds representing the value of a participant's Retirement
Income and Divisional Credits so transferred to the fund
herein referred to as the "Stability Income Fund" (and an
Article XII participant's Profit Sharing Account transferred
to the Special Account pursuant to Section 12.16 hereof)
<PAGE>
shall be invested and reinvested in short-term fixed income
corporate and government bonds, or in such other investments
designed to safeguard the principal amount thereof as the
Investment Committee may determine. Credits of certain
participants who retired prior to January 1, 1980 and
elected to receive their distribution in the form of
installment payments shall also be included in the Stability
Income Fund.
ARTICLE V
Accounts and Allocations
5.1 The Committee shall cause the Trustee to maintain such
accounts as may be necessary or desirable to effectuate the
purposes of the Plan. Without limiting the generality of the
foregoing, the Committee shall cause the Trustee to maintain:
(a) a "Thrift Incentive Account", representing that
part of the Trust Fund attributable to the contributions
made by participants, and the contributions made by the
Company for and on account of both the Thrift Incentive
portion of the Plan, The Children's Place Plan prior to July
1, 1984, and the Rich's Plan prior to January 1, 1985, and
the earning, increments and additions thereon and thereto,
and
(b) a "Retirement Income Account", representing that
part of the Trust Fund attributable to the contributions
made by the Company for and on account of the Retirement
Income portion of the Plan, and the earnings, increments,
and additions thereon and thereto, and
(c) a "Divisional Credit Account", representing that
part of the Trust Fund attributable to the credits of
participants in the Magnin Plan, the Bullock's Plan
(excluding such credits of participants in Article XII
hereof), and the Rike's Plan prior to the respective mergers
thereof into this Plan, and the earnings, increments and
additions thereon and thereto.
5.2 The Committee shall maintain or cause to be maintained
a separate account for each participant, to which there shall be
credited and shown separately:
(a) the participant's interest, hereinafter referred
to as "Thrift Incentive Credits", in the Thrift Incentive
Account, and
(b) the participant's interest, hereinafter referred
to as "Retirement Income Credits", in the Retirement Income
Account, and
(c) the participant's Divisional Credits, as defined
in Section 1.26 hereof.
5.3 For the purpose of the equitable distribution of
benefits accruing to the participants under this Plan, the value
of the accounts of each participant herein shall be determined as
of each Valuation Date.
Allocations to the accounts of participants shall be made as
follows:
(a) As of each Valuation Date, there shall be
allocated to the account of each participant who is such on
that Date, the net earnings and capital gains and losses for
the preceding Valuation Period, whether or not realized, of
each investment fund described in Section 4.7 hereof in
which such account is invested, excluding any such earnings
or gains which are transferred to the separate accounts of
reemployed participants as provided in Section 6.9 hereof
(all such net earnings and capital gains and losses,
excluding such earnings or gains so transferred, are
hereafter collectively referred to as "accretions"), in the
proportion that the amount of such account, to the extent
invested in each such investment fund, as of the start of
such Valuation Period, and not withdrawn during such
Valuation Period, bears to the amount of all such accounts
to the extent invested in each such fund at the beginning of
such period, and not withdrawn during such Valuation Period.
In making the aforesaid allocation, participant
contributions made to the Thrift Incentive Account for any
payroll period ending since the immediately preceding
Valuation Date shall be disregarded. The foregoing
notwithstanding, dividends on the number of common shares of
Federated Department Stores, Inc. credited to the accounts
of participants in the Thrift Incentive Account or
Retirement Income Account who were such on the immediately
preceding Valuation Date (such accretions, for the purposes
of this clause, being the dividends on said number of
shares) shall be allocated to each such participant's
account in the proportion that the number of such shares
credited to him in each of said Accounts on the immediately
preceding Valuation Date bears to the total number of such
shares credited on the immediately preceding Valuation Date
to all such participants in each of said Accounts.
(b) The contribution of the Company for and on account
of the Thrift Incentive portion of the Plan for each plan
year when made, shall be deemed to have been made as of the
last day of each such plan year. Except as otherwise
provided in Section 4.2 hereof, additional Thrift Incentive
Credits equivalent to the amount of such contribution by the
Company shall be credited as of said date to the account of
each participant who remained such through the last day of
said plan year and who did not withdraw basic contributions
(as defined in Section 4.2 hereof) during said plan year, in
the proportion that the amount of each such participant's
basic contributions made in said year bears to the total
<PAGE>
amount of basic contributions made by all such participants
in said year.
(c) Additional Retirement Income Credits, if any,
equivalent in the aggregate to the amount of the Company's
contribution for any plan year shall then be credited as of
the close of such plan year to the account of each
participant who remained such through the last day of such
plan year, as the case may be, in the proportion that the
participating compensation of such participant for the plan
year bears to the total participating compensation of all
such participants for said calendar year.
Any appraisal of the Trust Fund, or any portion thereof, by
the Trustee shall give due regard to accrued expenses and other
proper charges to said fund to the extent that these are not
assumed by the Company pursuant to Section 7.5 hereof. The
Trustee's determination of the market value of the investments of
the Trust Fund, or any portion thereof, shall be final and
conclusive for all purposes of the Plan.
In no event shall the annual addition to a participant's
account under either this Section or Article X or Article XII
hereof exceed the lesser of $30,000 (or such amount as adjusted
for increases in the cost of living under regulations prescribed
by the Secretary of the Treasury or his delegate under Section
415(d) of the Internal Revenue Code) or 25% of the participant's
compensation (which term as used in this paragraph and the next
paragraph shall be as hereinafter defined in this Section 5.3).
For this purpose annual addition shall include contributions by
the Company, the lesser of one-half of the participant's
contribution or all of the participant's contribution in excess
of 6% of his compensation, and surrendered credits. Any amount
which would have been contributed to the account of a participant
but for the preceding sentence shall be allocated to the accounts
of other participants, subject to the preceding sentence, in the
same manner as surrendered credits for the purposes of Section
5.4 hereof (or as accretions for the purposes of Section 7 of
Article XII hereof). If as a result of the allocation of
surrendered credits, a reasonable error in estimating a
participant's compensation, or under other facts and
circumstances which the Commissioner of the Internal Revenue
Service finds justify the application of the rules hereinafter
set forth in this sentence, the annual addition to any
participant's account would cause the maximum annual addition set
forth above to be exceeded (the amount by which the maximum
annual addition is so exceeded been referred to in this Section
5.3 as the "excess amount"), the following adjustments shall be
made so that such maximum is not exceeded:
(1) Contributions to the Plan (other than Qualified
Deferred Earnings Contributions) made by the participant for
such year shall be returned to the participant to the extent
that the return would reduce the excess amount in the
<PAGE>
participant's account. Any earnings made by the Trust
attributable to such returned contribution will, unless also
so returned, be considered as participant contributions for
the year in question solely for the purpose of this
paragraph.
(2) If an excess amount remains in the account of any
participant following the return of participant
contributions described above, the remainder of the excess
amount shall be reallocated to the accounts of other
participants in the same manner as surrendered credits (or
as accretions for the purposes of Article XII hereof).
However, if this reallocation of the remaining excess amount
would cause the limitations set forth in this paragraph to
be exceeded with respect to each participant for the
relevant year, then that portion of the excess amount shall
not be so reallocated but held in a suspense account in the
Trust. In the plan year next following the year in which
such excess amounts are placed into the suspense account,
all amounts in said suspense account shall be allocated and
reallocated to the accounts of participants in the manner
provided in the preceding sentence before any Company
contributions and participant contributions shall be made
for such next following plan year.
If a participant also participates in a defined benefit plan
maintained by Federated, Section 415(e) of the Code provides that
the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall not exceed 1.0. Federated
intends that an adjustment, if any, in contributions or benefits
which is necessary to satisfy such 1.0 limitation under Section
415(e) of the Code shall be made exclusively in the defined
benefit plan so that no such adjustment need be made in this
Plan. For purposes of this paragraph, the defined benefit plan
fraction for any plan year is a fraction, the numerator of which
is the projected annual benefit of the participant under the
defined benefit plan as of the close of the plan year, and the
denominator of which is the lesser of (i) the product of 1.25
multiplied by the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such Plan year, or (ii) the product
of 1.4 multiplied by one hundred percent (100%) of the
participant's average compensation as an employee during the
three (3) consecutive calendar years (or actual number of years
if less than three) during which the participant actively
participated in the defined benefit plan and had the greatest
aggregate compensation as an employee. The defined contribution
plan fraction for any plan year is a fraction, the numerator of
which is the sum of the annual additions to the participant's
account under this Plan from (i) employer contributions, (ii)
forfeitures and (iii) employee contributions in excess of six
percent (6%) of his compensation for such plan year or one-half
(1/2) of his contributions, whichever is less, and the
denominator of which is the sum of the lesser of the following
<PAGE>
amounts determined for such year and for each prior year of
service:
(a) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of the Code
for such plan year (determined without regard to Section
415(c)(6) of the Code), or
(b) the product of 1.4 multiplied by twenty-five
percent (25%) of the participant's compensation as an
employee for such plan year.
As used in this paragraph and the preceding paragraph, the term
"compensation" shall mean all compensation of the participant
from the Company for a relevant plan year.
5.4 Upon termination of a participant in the Plan in any
plan year, the amount of the credits not then vested in him
pursuant to the provisions of Article VI hereof shall be deemed
to be outstanding until the close of such year as shall the
credits of a participant terminating in such year pursuant to
paragraph (a) of Section 6.7 hereof. All such credits,
hereinafter termed "surrendered credits", shall share
proportionately in the accretions of the Trust Fund for such year
with respect to said credits. The dollar value of such
surrendered credits invested in common stock of Federated
Department Stores, Inc. shall be determined as of the last day of
such year based on the last closing price of such stock for such
plan year. Such surrendered credits, after adding thereto or
subtracting therefrom the net amount of adjustments, if any, made
during such year to correct accounts of participants by reason of
correction of errors and subtracting therefrom amounts
transferred to the separate accounts of reemployed participants
as provided in Section 6.9 hereof, shall then be applied at the
close of such year as hereinafter described:
(a) The surrendered Thrift Incentive credits for said
year shall be applied to the Thrift Incentive Account. The
amount so applied shall be credited to the account of each
participant who remained such through the last day of such
taxable or plan year in the same manner as the contribution
of the Company for such year for and on account of the
Thrift Incentive portion of the Plan.
(b) The surrendered Retirement Income and Divisional
credits for said year shall be aggregated and applied to the
Retirement Income Account and Divisional Account. The
amount so applied shall be credited to the account of each
participant who remained such through the last day of such
plan year in the proportion that the aggregate amount of the
investments credited to his Retirement Income an divisional
Accounts at the beginning of said year (using for common
stock of Federated Department Stores, Inc., the last closing
market price of such stock for said year) multiplied by his
length of service factor (as described in paragraph (c)
hereof), bears to the total aggregate amount of the
investment credits in the Retirement Income and Divisional
Accounts of all such participants at the beginning of said
year for said plan year multiplied by their appropriate
length of service factors.
(c) For the purposes of this Section 5.4 the length of
service factor of a participant who, at the time of
determination thereof, has completed more than 20 years of
employment shall be one and one-half, and in the case of
every other participant shall be one. The determination of
a participant's period of employment for the purposes of
this Article shall be made as of the last day of the plan
year. For the purposes of this paragraph (c), "employment"
shall be calculated in the same manner as set forth in
Section 6.8 hereof.
5.5 When, pursuant to the terms of the Plan, distribution
of a participant's Thrift Incentive Credits, Retirement Income
Credits and Divisional Credits is to commence, the dollar value
of said credits, other than credits invested pursuant to
paragraph (b) of Section 4.7 in the common stock of Federated
Department Stores, Inc., shall be appraised by the Trustee as of
the latest Valuation Date prior to the commencement of such
distribution for which a valuation shall have occurred and be
available to the Plan Administrator (but in no event shall said
Valuation Date to be earlier than the Valuation Date immediately
preceding the date of such participant's termination of
participation in the Plan). The dollar value of such credits
invested in common stock of Federated Department Stores, Inc.
pursuant to paragraph (b) of Section 4.7 shall be determined by
the Trustee based upon the average price of such stock computed
on a daily basis for the ninety (90) day calendar period ending
on the latest Valuation Date prior to the commencement of such
distribution for which a valuation shall have occurred and be
available to the Plan Administrator (but in no event shall such
Valuation Date be earlier than the Valuation Date immediately
preceding the date of such participant's termination of
participation in the Plan); provided that if the participant then
elects to have all or part of the investments in such commons
stock distributed in kind, the whole shares of such investments
shall be distributed as so elected, in lieu of the dollar value
thereof.
5.6 At any time after attaining his 60th birthday, but
prior to termination of his participation in the Plan, a
participant shall have the election, which may not thereafter be
rescinded, to require the transfer of (a) cash and investments
equal in value to the Company-contributed portion of his Thrift
Incentive Credits (including the accretions thereon) to Fund A as
described in Section 4.7(a) hereof, and (b) cash and investments
equal in value to his Retirement Income Credits and Divisional
Credits to the Stability Income Fund as described in Section
<PAGE>
4.7(b). Such transfer shall be made as of the first day of the
month next succeeding the date that such participant's written
election has been received by the Committee. The dollar value of
said credits, other than credits invested pursuant to paragraph
(b) of Section 4.7 in the common stock of Federated Department
Stores, Inc. shall be determined by the Trustee as of the
Valuation Date immediately preceding the date on which such
transfer shall take place; and the dollar value of said credits
invested in common stock of Federated Department Stores, Inc.
pursuant to paragraph (b) of Section 4.7 shall be determined by
the Trustee based on the average price of said stock computed on
a daily based for the ninety (90) day calendar period ending on
the Valuation Date immediately preceding the date on which such
transfer shall take place.
5.7 As promptly as practicable after the close of each plan
year, the Committee shall give notice to each participant of the
credits to his account as of said date. The Committee may elect
such methods of recording and reporting the accounts of
participants, including the investments therein, as it may in its
discretion deem appropriate.
ARTICLE VI
Distribution
6.1 All credits of participants (other than the amount of
each participant's contributions) shall be contingent, and the
interest on the part of each participant therein shall be subject
to termination except to the extent that such credits or part
thereof shall become vested in him in accordance with the
provisions of this Article. Each participant's contributions
shall be nonforfeitable when made.
6.2 All contingent credits, as described in Section 6.1,
credited to the account of a Participant shall become
nonforfeitable
(a) on the date he attains his 55th birthday with
respect to all credits, or
(b) after he has completed 10 years of employment in
the case of his Retirement Income Credits and Divisional
Credits and 3 years of employment in the case of his Thrift
Incentive Credits.
6.3 If the participation of a participant in the Plan shall
terminate by reason of (a) his death, or (b) termination of his
employment and the Committee shall have determined that his is
then totally and permanently disabled, all the credits
theretofore credited to his account shall immediately become
vested in him in full.
If the participation of a participant in the Plan shall
terminate after he has completed five or more years of employment
<PAGE>
other than as provide in Section 6.2 and in the first paragraph
of this Section 6.3, there shall be paid to him in the manner
provided in Section 6.5 hereof his nonforfeitable percentage of
the remaining Retirement Income and Divisional credits thereto-
fore credited to his account. All other interest, if any, on the
part of the participant in the Plan shall terminate subject to
the provisions of Section 6.4, 6.8 and 6.9 hereof. The
nonforfeitable percentage of a participant's interest in his
Retirement Income and Divisional credits shall be determined on
the basis of the following schedule:
YEARS OF EMPLOYMENT PERCENTAGE
5 years but less than 6 25%
6 years but less than 7 40%
7 years but less than 8 55%
8 years but less than 9 70%
9 years but less than 10 85%
6.4 If the participation of a participant in the Plan shall
terminate before he shall acquire a nonforfeitable interest in
any portion of the contingent Thrift Incentive, Retirement Income
or Divisional Credits credited to his account, there shall be
paid to him his additional and basic contributions, if any,
together with any accretions on the cash and investments
representing such contributions as of the latest Valuation Date
prior to the commencement of such distribution for which a
valuation shall have occurred and be available to the Plan
Administrator (but in no event shall such Valuation Date be
earlier than the Valuation Date immediately preceding the date of
such participant's termination of participation in the Plan).
All other interest on the part of the participant in the Plan
shall terminate except as provided in Sections 6.8 and 6.9
hereof.
6.5 No cash or investments representing the credits vested
in any participant shall be paid or distributed to him until
after termination of such participant's employment. Following
termination of his employment, the Committee shall direct the
Trustee to cause to be paid or distributed to such participant or
to the surviving spouse, if any, of such participant, or if there
is no surviving spouse, or if the surviving spouse consents in
the manner required under Section 6.6 hereof, to another
beneficiary designated by him or if such participant's spouse
does not survive him and if no other beneficiary has been so
designated or if the designated beneficiary does not survive the
participant, to his estate, subject to the provisions of Section
6.6 hereof, the cash and investment representing the credits
vested in him. Such distribution shall be made in such one or
more of the following methods as the participant may elect:
(a) a joint and survivor annuity payable in monthly
installments for the life of the participant and his spouse
under which the amount of monthly survivor annuity
installments payable to the spouse for her lifetime shall
equal 50% (or if the participant elects 100% or 66-2/3%) of
the amount of the monthly installment payable to the
participant during his lifetime and which is the actuarial
equivalent of a single life annuity for the life of the
participant;
(b) an annuity payable in monthly installments for the
life of the participant;
(c) an annuity payable in monthly installments for the
lifetime of the participant, but for not less than 120
monthly installments or the beneficial equivalent of the
foregoing, or
(d) cash and/or kind in one lump sum distribution.
The foregoing notwithstanding, no distribution to any
participant shall be made in a form described in subsection
(b) or (c) above unless the spouse of such participant
consents in writing to such distribution not more than
ninety days prior to the commencement of such distribution.
No distribution to any participant shall be made to any
participant prior to his normal retirement date unless the
participant consents or unless the amount to be distributed
is not greater than $3,500. Notwithstanding any other
provision hereof, if the participation of a participant in
this Plan shall terminate and the nonforfeitable portion of
such participant's account is not greater than $3,500, such
portion shall be distributed in a lump sum cash payment as
soon as administratively practicable after such termination.
Any reference in the preceding sentences to the investments
representing a participant's credits shall mean either the
investments theretofore representing said credits or such other
investments as the Trustee shall have substituted therefor in its
administration of the Trust Fund. The distribution of a
participant's interest pursuant to one or more of the foregoing
methods shall be made on the first day of the calendar month
following the date on which his employment is terminated or as
soon as practicable thereafter, subject to the spousal consent
requirements set forth in this Section.
Notwithstanding the foregoing unless the participant elects
otherwise, any benefits under this Plan shall be paid in cash and
kind in one lump sum distribution. If an annuity is selected,
the form of the annuity in the case of a participant with a
spouse on his Final Election Date, as defined below, shall be a
joint and survivor annuity as described above, unless the
participant otherwise elects and the said spouse consents as
provided below. Any election of a form of benefit shall be made
in writing to the Committee only during the ninety days preceding
the first day of the first period for which an amount is received
as an annuity (or in the form of a lump sum distribution) under
<PAGE>
this Plan by such participant, his spouse, or other beneficiary
(said day being the "Final Election Date"), and shall, as to any
participant having at least one hour of employment with the
Company on or after August 23, 1984, having a spouse on the Final
Election Date, and selecting a form of annuity other than a joint
and survivor annuity, be valid only if the spouse consents in
writing to such an election, which consent shall acknowledge the
effect of such election and be witnessed by a plan representative
or notary public. Any spousal consent required by this Section
6.5 shall be valid only with respect to the spouse so consenting;
provided, however, said election as to any such participant not
so consented to by the participant's spouse shall be valid if it
is established to the satisfaction of a plan representative that
the spouse's consent may not be obtained because there is no
spouse, because the spouse cannot be located, or because of such
other circumstances as the Secretary of the Treasury may by
regulation prescribe. For the purposes of this Section 6.5 the
identity of a participant's spouse shall be established as of the
participant's Final Election Date and shall not be changed as a
result of a separation, divorce, or subsequent marriage of the
participant or his spouse to another individual unless otherwise
required by a qualified domestic relations order, as defined in
Section 414(p) of the Internal Revenue Code.
Within a reasonable time prior to his annuity starting date,
(and consistent with such regulations as the Secretary of the
Treasury may prescribe) each participant shall be provided with a
written explanation of (i) the terms and conditions of the joint
and survivor annuity described above, (ii) the participant's
right to make, and the effect of, an election to receive a form
of benefit other than the joint and survivor annuity described
above, (iii) the rights of the participant's spouse to approve or
disapprove such an election, and (iv) the right to make and the
effect of a revocation of an election to receive a form of
benefit other than a joint and survivor annuity as described
above. At any time and from time to time during the said
election period, any such election may be revoked in writing to
the Committee in the preceding sentence and another election may
be made by the participant (subject to the above spousal consent
requirements if an annuity other than a joint and survivor
annuity is selected).
The foregoing provisions of this Section 6.5 shall likewise
be applicable to any individual who works at least one Hour for
the Company beginning on or after January 1, 1976 and who had at
least 10 years of employment with the Company when he separated
from service with the Company (provided distribution of such
individual' interest hereunder has not commenced on or prior to
August 23, 1984), if the individual elects for such provisions to
so apply during the period commencing on August 23, 1984 and
ending on the date the distribution of such individual's interest
hereunder would otherwise commence to such individual.
<PAGE>
The account balance of 5-percent owner (as described in
Section 416(i) of the Code determined with respect to the plan
year ending in the calendar year in which such individual attains
age 70-1/2) shall be distributed or commence to be distributed,
no later than the first day of April following the calendar year
in which such individual attains age 70-1/2.
6.6 The interest or any undistributed balance thereof of
any participant, including his account under Article X (and
Article XII) hereof, shall be paid in the event of the
participant's death to his surviving spouse, if any, as
beneficiary; provided, however, that each participant may
designate, upon such form filed with the Committee as it shall
prescribe, a beneficiary, other than the participant's spouse, to
whom such payment shall be made if the participant's spouse, if
any, consents in writing to such beneficiary designation, and the
spouse's consent acknowledges the effect of such designation and
is witnessed by a plan representative or notary public. Any such
consent shall be valid only with respect to the spouse so
consenting. The foregoing notwithstanding such consent need not
be obtained if it is established to the satisfaction of a plan
representative that the spouse's consent may not be obtained
because there is no spouse, because the spouse cannot be located,
or because of such other circumstances as the Secretary of the
Treasury may be regulation prescribe. Subject to the spousal
consent requirement set forth in the preceding sentence, the
beneficiary so designated may be changed at any time and from
time to time prior to completion of distribution of the
participant's interest by his filing with the Committee, upon
such form as it shall prescribe, a notification of change of
beneficiary. If there is no surviving spouse and if no other
person shall be so designated as the beneficiary or if the
designated beneficiary shall not survive the participant, payment
of his interest or any undistributed balance thereof shall be
made to his estate. Payment to his surviving spouse or to such
other beneficiary as may be designated as provided above or to
the participant's estate shall be in such manner and upon such
conditions as the Committee shall determine subject to the
provisions of 6.5 hereof. Upon the death of a spouse, or such
other beneficiary designated as provided above, who shall have
survived the participant, any balance then unpaid shall be paid
to the estate of the spouse (or such other beneficiary) in such
manner and upon such conditions as the Committee shall determine.
No payment as herein provided shall be made to the estate of a
participant or to the estate of his spouse (or such other
beneficiary) if there are no known legatees, heirs or next-of-kin
of the participant or his spouse, or such other beneficiary, as
the case may be, except to the extent required to discharge
liabilities of the participant, his spouse, or such other
beneficiary; in the event that it appears within the year
following the death of the participant or his beneficiary, as the
case may be, that there are no legatees, heirs or next-of-kin of
the participant, his spouse, or such other beneficiary, as the
<PAGE>
case may be, any undistributed balance may thereafter be paid to
the Trustee to form part of the Trust Fund.
6.7 Notwithstanding anything to the contrary contained in
this Article,
(a) a participant may at any time request the return
to him and shall receive in whole or in part the dollar
amount of the basic or additional contributions (except for
basic contributions constituting Qualified Deferred Earnings
Contributions, which may be withdrawn only in the
circumstances provided in Section 4.2 hereof) therefore made
by him, and in such event the balance of his interest in the
Thrift Incentive Account shall not terminate; provided that
additional contributions shall be withdrawn before any other
withdrawals are permitted under this Section.
(b) notwithstanding the provisions of clause (a)
hereof, any withdrawal of a participant's basic or
additional contributions which is not for the total amount
of the participant's such contributions shall not be less
than $500 in either event.
6.8 As used in this Section and in Article X and XII,
the term "one year break in service" means the completion of a
twelve (12) consecutive month period without reemployment
commencing on the date of termination of employment and each
twelve (12) month period thereafter in which such participant is
not employed by the Company; provided, however, that in the case
of an Employee whose employment terminates while the Employee is
absent from work for maternity or paternity reasons, the twelve
month period of absence beginning on the date of said termination
shall not be considered a "one year break in service" if the
employee timely furnishes the Committee with such information as
may be reasonably necessary to establish (i) that the absence
from work is for maternity or paternity reasons, and (ii) the
number of days for which there was such an absence; and provided
further that such Employee shall not receive credit for
participation, vesting, or benefit accrual during said period of
absence for maternity or paternity reasons. Absence from work
for "maternity or paternity reasons" as described in the
preceding sentences means an absence (1) by reason of pregnancy
of the employee, (2) by reason of the birth of a child of the
employee, (3) by reason of the placement of a child with the
employee in connection with the adoption of such child by such
employee, or (4) for purposes of caring for such a child for a
period beginning immediately following such birth or placement.
For the purposes of Article VI hereof, years of employment before
any one year break in service shall not be taken into account
until such former participant has completed a year of regular
employment commencing with his date of reemployment. If such
participant had not completed three (3) years of employment or
had not attained age 55 at the time of such termination, years of
employment before any one year break in service shall not be
<PAGE>
taken into account if the number of consecutive one year breaks
in service equals or exceeds the greater of five (5) or the
aggregate number of years of employment prior to such break.
For the purposes of this Article, employment shall be
measured from the date of the most recent commencement of
employment to the date of termination of employment and subject
to the breaks in service rules provided for in this Section 6.8,
regardless of the date as to which participation commenced as
provided in Article III hereof.
6.9 If distribution has been made to a participant a
portion of whose interest in the Plan has terminated as provided
in Section 6.3, the forfeitable portion of the account not so
distributed shall be maintained in a separate account until the
participant incurs five consecutive one-year breaks in service.
If, following such termination, the participant shall incur five
consecutive one-year breaks in service, the balance of said
account shall be deemed to be a surrendered credit for the
purposes hereof. If the participant is reemployed prior to
incurring five consecutive one-year breaks in service, then such
separate account shall be maintained until the participant's
subsequent termination of employment. The vested portion of such
separate account to be paid at the time of the subsequent
termination of employment shall be determined in accordance with
the following formula.
X = P [(AB+RxD)] - (RxD)
Where:
X = the amount of his vested interest in
such separate account;
P = the percentage of his vested interest in
his credits under the Plan as provided
in Section 6.2 and 6.3 hereof (other
than the dollar amount of his
contributions, if any, made by him
pursuant to Section 4.2 hereof, together
with the accretions thereon as provided
in this Article VI) as of the date of
the subsequent termination of
employment;
AB = the balance in his separate account as
of the date of the subsequent
termination of employment;
D = the amount of the original distribution;
and
R = a fraction, the numerator of which
equals "AB" and the denominator of which
equals the amount of the interest
originally terminated.
6.10 If the termination of participation of a participant in
the Plan has occurred on or after the date the participant has
attained his 55th birthday or has completed 25 years of
<PAGE>
employment or by reason of death or total and permanent
disability as provided in the first paragraph of Section 6.3
hereof, such participant, or his beneficiary, shall receive a
distribution as it relates to his Thrift Incentive credits (other
than the cash and investments in his account attributable to his
contributions, Qualified Deferred Earnings Contributions, and
accretions thereon) equal in value to the greater of (a) the cash
and investments representing such Thrift Incentive credits vested
in him as otherwise provided in this Article VI as of December
31, 1983 together with the accretions thereon as of the last day
of the calendar quarter immediately preceding the date of such
termination, or (b) the total of (i) the dollar amount of the
contributions of the Company and of surrendered credits allocated
to the Thrift Incentive portion of the participant's account on
or before December 31, 1983, and (ii) the amount of accretions
thereon (other than gains and losses, whether or not realized)
allocated to the participant's account from time to time pursuant
to Section 5.3(a)(iv) and (v).
The amount, if any, by which the total of the vested amounts
provided for in clause (b) exceeds the amounts vested in such
Participant as provided in clause (a) is hereinafter referred to
as the "supplemental guarantee". The supplemental guarantee, if
any, shall be paid by the Company, upon certification by the
Administrative Committee, to the Participant's account to be
distributed as provided in Section 6.5 and 6.6 hereof, subject to
the provisions of the next three sentences hereof. If the sum of
the supplemental guarantees to be paid to all Participants when
added to the amount of the Company's contribution to the Plan as
provided in Article IV hereof for any fiscal year is in excess of
the amounts deductible by the Company for federal income taxes
for such year, then the total amount of such supplemental
guarantees shall be reduced accordingly, and the amounts of any
such reductions shall be paid directly to the Participants by the
Company. If the amount of any supplemental guarantee to the
Participant shall be in excess of the limitations set forth in
the last paragraph of Section 5.3 for contributions to a
Participant's account, the amount of the supplemental guarantee
to be paid the Participant's account shall be reduced in order to
meet such requirements and the amount of such reduction shall be
paid directly to the Participant by the Company. The time and
manner of any payments made directly to Participants as provided
in the three preceding sentences shall be determined at the
discretion of the Committee.
ARTICLE VII
Administrative Committee
7.1 The Board of Directors shall appoint the Committee
consisting of officers or other employees of the Company or any
other individuals. The Committee shall be composed of not less
than 3 nor more than 15 persons. The committeemen shall serve at
the pleasure of the Board of Directors and vacancies in the
Committee arising by reason of resignation, death, removal or
<PAGE>
otherwise shall be filled by the Board of Directors. Any
committeeman may resign of his own accord by delivering his
written resignation to the Board of Directors. The Committee
shall constitute the "name fiduciary" for the purposes of the
Employee Retirement Income Security Act of 1974 (hereinafter
referred to as "ERISA").
7.2 The Committee shall administer the Plan and is
authorized to make such rules and regulations as it may deem
necessary to carry out the provisions of the Plan. The Committee
shall determine any question arising in the administration,
interpretation and application of the Plan, which determination
shall be binding and conclusive on all persons.
In the administration of the Plan, the Committee may:
(a) employ agents to carry out nonfiduciary and
fiduciary responsibilities (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA):
(b) provide for the allocation of fiduciary
responsibilities (other than trustee responsibilities as
defined in Section 405(c)(3) of ERISA) among its members.
Actions dealing with fiduciary responsibilities shall be
taken in writing and the performance of agents, counsel, and
fiduciaries to whom fiduciary responsibilities have been
delegated shall be reviewed periodically.
The Committee shall administer the Plan and adopt such rules
and regulations as in the opinion of the Committee are necessary
or advisable to implement and administer the Plan and to transact
its business. In performing their duties, the members of the
Committee shall act solely in the interest of the participants of
the Plan and their beneficiaries and
(a) for the exclusive purpose of providing benefits to
participants and their beneficiaries;
(b) with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with
like aims; and
(c) in accordance with the documents and instrument
governing the Plan insofar as such documents and instruments
are consistent with the provisions of Title I of ERISA.
7.3 The Committee shall maintain or cause to be maintained
accounts showing the fiscal transactions of the Plan, and shall
keep or cause to be kept in convenient form such data as may be
necessary for valuations of the assets and liabilities of the
Plan. The Committee shall prepare annually a report showing in
reasonable detail the assets and liabilities of the Plan and
giving a brief account of the operation of the Plan for the past
year. In preparing this report the Committee may rely on advices
received from the Trustee or other person or firms selected by it
or may adopt a report on such matters prepared by the Trustee.
Such report shall be submitted to the Board of Directors and
shall be filed in the office of the Secretary of the Committee.
<PAGE>
7.4 The Committee shall appoint a Chairman and a Secretary
and such other officers, who may be but need not be members of
the Committee, as it shall deem advisable. The Committee shall
act by a majority of the committeemen at the time in office and
such action may be taken either by a vote at a meeting or in
writing without a meeting. The Committee may by such majority
action appoint subcommittees and may authorize any one or more of
the committeemen or any agent to execute any document or
documents or to take any other action, including the exercise of
discretion, on behalf of the Committee. The Committee may
provide for the allocation of responsibilities for the operation
and maintenance of the Plan.
7.5 Unless otherwise determined by the Board of Directors,
the committeemen shall serve without compensation for services as
such. All expense of administration of the Plan, excluding
salaries and other expenses of employees of the Company except to
the extent permitted by ERISA, but including, without limiting
the foregoing, (i) the fees and charges of the Trustee, and of
any attorney, accountant, specialist or other person employed by
the Trustee or the Company in the administration of the Plan,
(ii) taxes, if any, on the assets held by the Trustee or income
therefrom, and (iii) brokerage commissions, transfers taxes and
other expenses in connection with the purchase or sale of
securities by the Trustee which fees, charges, taxes,
commissions, transfer taxes and other expenses shall be paid out
of the assets of the Trust Fund.
7.6 Neither the Company not any committeeman shall be
liable for any loss or damage or depreciation which may result in
connection with the execution of their duties or the exercise of
their discretion or from any other act or omission hereunder,
except when due to their own gross negligence or willful
misconduct. The Company shall indemnify and hold harmless each
member of the Committee from any and all claims, loss, damages,
expense (including counsel fees approved by the Committee) and
liability (including any amounts paid in settlement with the
Committee's approval) arising from any act or omission of such
member, except when the same is judicially determined to be due
to the gross negligence or willful misconduct of such member.
7.7 Pursuant to procedures established by the Committee,
adequate notice in writing shall be provided to any participant
or beneficiary whose claim for benefits under the Plan has been
denied. Such notice shall set forth the specific reason for such
denial, written in a manner calculated to be understood by the
claimant, and provided review is requested within sixty (60) days
after receipt by the claimant of written notification of denial
of his claim, shall afford a reasonable opportunity to any
claimant whose claim for benefits has been denied to a full and
fair review of the decision denying the claim.
7.8 In addition to the Administrative Committee provided
for in Section 7.1 through 7.7 of the Plan, the Board of
Directors shall appoint an Investment Committee (which may be the
same as the Administrative Committee) to establish guidelines
with regard to the investments provided for in Section 4.7 hereof
and to make or direct all investments pursuant thereto. Such
Committee shall consist of not less than three nor more than
fifteen members and shall serve at the pleasure of the Board of
Directors. For such purposes the Investment Committee may retain
an investment manager or managers as defined in Section 3(39) of
ERISA to manage (including the power to acquire and dispose of)
all or any part of the assets of the Plan.
ARTICLE VIII
Qualification, Amendment and Termination
8.1 All assets of the Plan shall be held in a separate
single trust which may consist of one or more funds, all of which
together shall comprise the Trust Fund, for use in accordance
with the provisions of the Plan in providing the benefits and
paying the expenses thereof. The Trust Fund shall be held under
an appropriate trust agreement by a Trustee or Trustees appointed
from time to time by the Board of Directors, with such powers in
the Trustee or Trustees, and the Committee, as to investment,
reinvestment, control and disbursement of the funds, as shall be
provided in such trust agreement which shall be approved by the
Board of Directors.
8.2 The Plan and Trust shall, as a condition of their
effectiveness, be qualified under Section 401 and 501 of the
Internal Revenue Code. The Board of Directors may authorize any
modifications or amendments of the Plan or Trust, which may be
retroactive, if necessary or appropriate in its opinion to
qualify or maintain the Plan and Trust as a plan and trust
meeting the requirements of Sections 401 and 501 of the Internal
Revenue Code, as now in effect or hereafter amended, or any other
applicable provisions of the Internal Revenue Code, as now in
effect or hereafter amended or adopted, and the regulations
issued thereunder.
8.3 The Company reserves the right at any time and from
time to time to modify, suspend, amend or terminate the Plan or
the Trust Agreement in whole or in part (including the provisions
relating to contributions) by delivering to the Trustee and the
Committee a copy of such modification, suspension, amendment or
termination as approved by the Board of Directors; provided that
the Company shall have no power to modify, suspend, amend or
terminate the Plan or the Trust Agreement in such manner as will
cause or permit any part of the Trust Fund to be used for or
diverted to purposes other than for the exclusive benefit of
participants or their beneficiaries or estates, or the payment of
expenses, pursuant to the provisions of the Plan, or as will
cause or permit any portion of the Trust Fund to revert to or
become the property of the Company. No amendment to the Plan
shall decrease a Participant's account balance as calculated
immediately prior to such amendment or eliminate an optional form
<PAGE>
of distribution with respect to benefits accrued prior to such
amendment. Notwithstanding anything herein contained, the
Company, upon such termination of the Plan, shall have no
obligations or liability whatsoever to make any further payments
(including all or any part of any contribution payable prior to
the termination of the Plan) to the Trustee, and neither the
Trustee, the Committee nor any participant, employee or other
person shall have any right to compel the Company to make any
payments after the termination of the Plan.
8.4 Upon termination of the Plan or upon complete
discontinuance of contributions under the Plan, or if the Company
merges or consolidates with any other entity, and the Company is
not the surviving entity or if it sells its assets (except that
the Plan may be continued by any entity succeeding to the
business of the Company by whom some or all of the participants
are employed, if such entity shall agree to assume the
liabilities of the Plan as to them), the amounts credited to the
accounts of all participants shall become nonforfeitable,
notwithstanding the provisions of Article VI of the Plan. Upon
partial termination of the Plan, the amounts credited to the
accounts of all participants affected by such termination shall
become nonforfeitable, notwithstanding the provisions of Article
VI of the Plan. In the case of any merger or consolidation with,
or transfer of assets or liabilities to, any other employee
benefit plan, each person for whom an account is maintained shall
be entitled to receive a benefit from the Plan, if it is then
terminated, which is equal to or greater than the benefit he
would have been entitled to receive immediately before the
merger, consolidation or transfer, if the Plan had then been
terminated. Upon termination of the Plan, the Committee shall
direct the Trustee to distribute all assets remaining in the
Trust Fund, to the participants, their beneficiaries or estates
in accordance with the value of the accounts of such participants
as of the date of such termination of the Plan, in cash or in
kind or partly in cash and partly in kind, and in such manner as
the Committee shall determine; and the Committee's determination
shall be final and conclusive upon all persons; provided that no
employer security allocated to a participant's account under
Article X shall be so distributed before the end of the
eighty-fourth month beginning after the month in which the
security is allocated; and provided further that Qualified
Deferred Earnings Contribution shall not be distributed prior to
the earliest date for distribution thereof as set forth in the
second paragraph of Section 4.2 hereof. In the event the Plan is
terminated, the Committee in office at the time of such
termination shall continue to act with its full powers hereunder
until the completion of the distribution of such assets; and a
majority of the committeemen then in office shall have the power
to fill any vacancies occurring in the Committee after such
termination by resignation, death or otherwise. In the event the
Committee shall not within a reasonable time after such
termination have given the Trustee the directions provided in
this Section 8.4, the Company shall ipso facto succeed to all
<PAGE>
powers and duties of the Committee and shall direct the Trustee
to distribute said Trust Fund to the participants, their
beneficiaries or estates as in this Section 8.4 provided.
ARTICLE IX
Miscellaneous
9.1 Neither the establishment of the trust created by the
Trust Agreement, nor any modification thereof, nor the creation
of any fund or account, nor the payment of any benefits, shall be
construed as giving to any participant or other person any legal
or equitable right against the Company, or any officer or
employee thereof, or the Trustee, or the Committee, except as
herein expressly provided. All contributions may by the Company
to the Plan shall be voluntary, and the Company shall be under no
legal liability to make any such contributions. Nothing herein
contained shall entitle any person to any payment except out of
the Trust Fund except as provided in Section 6.10 hereof.
9.2 Neither the establishment of the Plan, the granting of
benefits nor any action of the Board of Directors, the Committee
or any Trustee of the funds of the Plan, now or hereafter, shall
be held or construed to confer upon any person any legal right to
be continued as an employee, or to interfere with the right of
the Company to discharge any employee whenever the interests of
the Company in its sole discretion may so require without
liability to the Company or the Committee or any Trustee of the
funds of the Plan.
9.3 The right of any participant or beneficiary to any
benefits or to any payment hereunder or to any separate account
shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, seizure
or escheat and if such participant or beneficiary shall attempt
to assign, transfer or otherwise dispose of or encumber such
right, or should such right be subjected to attachment,
execution, garnishment, sequestration or escheat, or other legal,
equitable or other process, it shall ipso facto pass to such one
or more persons as may be selected by the Committee from among
the beneficiaries, if any, theretofore designated by such
participant or the spouse, blood relatives and adopted children
of the participant, and if none, to the Trust Fund; provided,
however, that the Committee in its sole discretion may reappoint
the participant or beneficiary to receive any payment thereafter
becoming due either in whole or in part. The first sentence of
this Section 9.3 shall also apply to the creation, assignment or
recognition of a benefit payable with respect to a participant or
beneficiary pursuant to a domestic relations order unless such
order is determined to be a qualified domestic relations order,
as defined in Section 414(p) of the Internal Revenue Code. Any
appointment made by the Committee hereunder may be revoked by the
Committee at any time, and a further appointment made by it.
<PAGE>
9.4 The facts as shown by the records of the Committee at
the time of death of any person entitled to any benefits or to
any payment hereunder shall be conclusive as to the identity of
the proper payee and of the amounts properly payable, and payment
made in accordance with such state of facts shall constitute a
complete discharge of any and all obligations under Article VI
hereof. In the event any amount shall become payable hereunder
to any person or, upon his death, to his estate and, if after
written notice from the Committee mailed to such person's last
known address as shown in the Company's records, such person or
his personal representative shall not have presented himself to
the Committee within one year after the mailing of such notice,
then the Committee, in its sole discretion, may distribute such
amount, including any amount thereafter becoming due to such
person or his estate, among one or more of the spouse, blood
relatives and adopted children of such person or may direct said
amount to be paid to the Trustee to form a part of the Trust Fund
provided that such one year requirement shall not be applicable
if the amount payable hereunder is less than one hundred dollars.
Any action of the Committee under Sections 9.3 and 9.4 hereof
shall be final and conclusive upon all persons; and any person,
including the Trust Fund, who receives any distribution under
said sections shall be the absolute owner thereof, regardless of
whether such person had been a participant hereunder or the
designated beneficiary or the personal representative of any
participant hereunder. In the event payment is made to the Trust
Fund and the person entitled to payment thereafter presents
himself to the Committee, then payment shall be made to such
person. The amount of such payment shall be considered as a
correction of an error for the purposes of the fourth sentence of
Section 5.4 hereof. If the amount of surrendered credits under
that section are insufficient to allow such an adjustment, then
the amount of such payment shall be paid by the Company to the
Trust as a special contribution.
If any benefits or payments hereunder become distributable
to a minor or other person under a legal disability, then the
Committee may, in its discretion, direct that such distribution
shall be made either (a) directly to such person, (b) to a
parent, spouse or other third person caring for and supporting
such minor person, or (c) to the duly appointed guardian,
conservator or other legal representative of such person. If the
Committee shall be in doubt as to the right of any beneficiary to
receive any distribution under the Plan, the Committee may direct
the same shall be delivered to the estate of the participant.
Any distribution in accordance with the provisions of this
paragraph shall be final and conclusive as to all persons and
shall constitute a full and complete discharge of the Committee,
the Company and the Trust Fund.
9.5 Any subsidiary, with the consent of the Board of
Directors, may become a party to the Plan by taking appropriate
corporation action to adopt the Plan for its employees, and by
executing and delivering to the Company and to the Trustee
counterparts of the Trust Agreement provided in Section 8.1
<PAGE>
hereof. In such event that share of each such subsidiary in the
total contribution by the Company for any taxable or plan year
shall equal the total amount credited from said contribution to
the accounts of all participants who are the employees of such
subsidiary.
9.6 In the event that a subsidiary which is a party to the
Plan, or a division of the Company the employees of which are
participants in the Plan, ceases to be a subsidiary or a
division, as the case may be, by reason of the sale of the stock
of the subsidiary, or the sale of substantially all of the
property or assets of the subsidiary or division, to a purchaser
other than another subsidiary, the interests in the Plan of the
participants employed by such subsidiary or division shall be
determined as of the date of such sale in the same manner as in
the case of any other participant who terminates his employment
on that date; provided, however, that the Board of Directors may
determine the equitable part of the Trust Fund applicable to
participants who shall continue to be employed by such purchaser
and may direct the Trustee to apply such part thereof for their
benefit by the payment thereof to the trustee of any retirement
income, profit sharing or similar plan of such purchaser or
otherwise, all as the Board of Directors may direct. In
addition, the Committee may, upon the sale or other disposition
of any division, subsidiary or operating unit of the Company,
make nonforfeitable all or any part of contingent credits of
participants employed by such division, subsidiary or operating
unit, whether or not a partial termination of the Plan has
occurred as a result of said sale or disposition.
9.7 Whenever the Company under the terms of this Plan is
permitted or required to do or perform any act or matter or thing
it shall be done and performed by any officer thereunto
authorized by the Board of Directors.
9.8 All contributions to the Trust shall be deemed to take
place in the State of Massachusetts.
9.9 Amendments of the Plan as adopted by the Board of
Directors shall become effective on the Anniversary Date of the
Plan next following the date on which they were so adopted,
unless the provision of such amendment or of the resolution of
the Board of Directors adopting such amendment shall expressly
provide otherwise. In every case the effectiveness of an
amendment of the Plan shall be subject to receipt by the Company
of a ruling by the Treasury Department that such amendment does
not affect the status of the Plan as a qualified plan under the
applicable provisions of the Internal Revenue Code.
ARTICLE X
Employee Stock Ownership Plan
10.1 This Article is hereby established as a qualified stock
ownership plan under Section 301 of the Tax Reduction Act of 1975
<PAGE>
and Sections 401, 409A and 501 of the Internal Revenue Code, as
amended, and is designed to provide for the investment of the
Federated Department Stores, Inc. contribution pursuant to this
Article primarily in the common stock of the Company.
10.2 The definitions set forth in Sections 1.1, 1.4, 1.5,
1.6, 1.10, 1.11, 1.12, 1.13, 1.14, 1.15, 1.18, 1.20, 1.22, 1.23,
1.24, 1.29 and 1.30 therefor of the Plan shall also apply to this
Article. The provisions of Article VII, VIII and IX shall also
apply to this Article. Except as otherwise specifically
provided, the provisions of Article II through VI shall not
otherwise apply to this Article X or the credits created
hereunder.
10.3 All credits under the Company's Employee Stock
Ownership Plan adopted as of February 1, 1976 and not distributed
prior to the effective date of the merger of that Plan into this
Plan shall constitute credits under this Article.
10.4 The effective date of this Article is January 1, 1985.
10.5 An employee shall become a participant for the purposes
of this Article on the later of the date that he becomes a
participant under Articles I through IX of the Plan (pursuant to
Sections 2.1 and 3.1) or the first day after he has completed
three years of employment.
For the purposes of this Section, employment shall be
measured from the date of the most recent commencement of
employment to the date of termination of employment and subject
to the breaks in service rules provided for in the first two
sentences of Section 6.8 of the Plan.
10.6 The participation of a participant under this Article
shall terminate upon the termination of his employment for any
reason provided that a one year break in service has occurred as
provided in the first two sentences of Section 6.8 hereof. If
after termination of his employment a former participant or other
employee is reemployed by the Company, he shall for all purposes
of this Article constitute a new employee as of the date of such
reemployment unless at that time he again becomes a participant
under Article I through IX of the Plan.
10.7 Subject to the provisions of Article VIII hereof with
regard to amendments and termination of the Plan and the
liabilities of the Company under the Plan, the Company shall
contribute for each plan year
(a) an amount which does not exceed that portion of
the investment tax credit claimed by the Company pursuant to
Section 48(n)(1)(A) of the Internal Revenue Code as such
section may be amended from time to time and
(b) an amount which does not exceed that tax credit
claimed by the Company pursuant to Section 44G(c)(1)(B) of
the Internal Revenue Code as such section may be amended
from time to time.
10.8 The amount of the Company's contribution under this
Article for each plan year shall be paid to the Trustee by means
of a contribution of the common stock of Federated Department
Stores, Inc. or by cash either in a single payment or
installments, not later than the last day of the period
prescribed for the payment of such amount of such year by the
relevant provisions of the Internal Revenue Code and other
applicable law, provided that such payment shall be made at least
thirty days prior to the date that such stock is to be purchased
by the Trustee (if such purchases are made by the Trustee). Such
contribution may be estimated in accordance with established
accounting principles consistently applied to data available at
the time the estimate is made. In such event, after the
examination of the statements necessary to the determination of
the amount thereof as prepared for the tax return of the Company,
the Company shall determine the amount of its contribution on the
basis of such statements; and any amount by which the amount
theretofore contributed by the Company in respect of such plan
year shall be less than the amount of its contribution as so
determined shall be contributed by the Company not later than the
last day of the period prescribed by the relevant provisions of
the Internal Revenue Code and other applicable law for the
payment of a deductible contribution under this Article for its
next succeeding plan year, and any amount by which the amount
theretofore contributed by the Company in respect to such year
shall exceed the amount of its contribution as so determined
shall be applied as promptly as possible as a reduction in the
amount of the contributions which the Company may thereafter be
required to make pursuant to this Article. If after the Company
has made a contribution as provided for in clause (a) of Section
10.7 for any Plan year, all or any part thereof shall be finally
disallowed as an investment tax credit under the Internal Revenue
Code in computing the Federal income tax liability of the Company
for said fiscal year, then the amount of the contributions that
the Company would otherwise thereafter be required to make
pursuant to clause (a) of Section 10.7 hereof shall be reduced by
an amount equal to the amount disallowed as such a credit. If
there are no such contributions under this Article for succeeding
Plan year, if all such contributions have been made or if the
offset to such contributions is not permitted by law, said amount
equal to the amount disallowed shall be deemed to be a
contribution under this Article for the Plan year in which it is
paid. If after the Company has made a contribution as provided
for in clause (b) of Section 10.7 for any Plan year, all or any
part thereof shall be finally disallowed as a tax credit under
the Internal Revenue Code in computing the Federal income tax
liability of the Company for said fiscal year, then the amount of
the contributions that the Company would otherwise thereafter be
required to make pursuant to clause (b) of Section 10.7 hereof
shall be reduced by an amount equal to the amount disallowed as
such a credit. If there are no such contributions made under
this Article for succeeding Plan years, if all such contributions
have been made or if the offset to such contributions is not
permitted by law, said amount equal to the amount disallowed
<PAGE>
shall be deemed to be a contribution under this Article for the
Plan year in which it is paid. In no event shall there be any
return to the Company of a contribution in the event of recapture
or redetermination of either the investment tax credit or tax
credit claimed by the Company as provided in Section 10.7 hereof.
10.9 It is the basic policy and specific intention of the
Company that the fund of cash and investments, the earnings
thereon and the proceeds thereof, attributable to the
contributions made by the Company pursuant to this Article shall
be invested and reinvested in common shares of Federated
Department Stores, Inc. Notwithstanding the foregoing, the
Trustee is authorized to hold such reasonable cash balances as
may be necessary to meet the operating requirements of this
Article. Such balances may be invested in short term investments
as may be prudent under all the facts and circumstances then
prevailing, including without limitations, savings accounts,
commingled short term investment funds, commercial paper and
governmental securities.
10.10 The Committee shall cause the Trustee to maintain an
"ESOP Account" representing that part of the Trust Fund
attributable to the contributions made by the Company for and on
account of this Article and the predecessor plan referred to in
Section 10.3 hereof.
10.11 The Committee shall maintain, or cause to be
maintained, a separate account for each participant to which
there shall be credited and shown separately the participant's
interest under this Article.
10.12 For the purpose of equitable allocation of the
benefits accruing to the participants under this Article, the
amount of each such participant's interest therein shall be
determined as follows:
The contribution of the Company for and on account of
this Article for each Plan year, when made, shall be deemed
to have been made as of the last day of such year. Credits
equivalent in the aggregate to the amount of the Company's
contribution for the current Plan year shall be credited in
common shares of Federated Department Stores, Inc. acquired
as a result of such contribution as of the close of said
Plan year to the account of each participant who remains
such through the last day of each such Plan year in the
proportion that the participating compensation of such
participant for the Plan year bears to the total
participating compensation of all such participants for said
Plan year. For this purpose, participating compensation
shall include only the first dollar of compensation paid to
any participant.
As of the close of each Valuation Date, there shall be
allocated to the account of each participant under this
Article the accretions (as defined in Section 5.3 hereof)
for said year all as determined by the Trustee,
(i) on the number of common shares of Federated
Department Stores, Inc. credited to the accounts of
participants in the Plan who were such on the
immediately preceding Valuation Date (such accretions,
for the purposes of this clause, being the dividends on
said number of shares), in the proportion that the
number of such shares credited to him on the
immediately preceding Valuation Date bears to the total
number of such shares credited on the immediately
preceding Valuation Date to all such participants; and
(ii) on the balance of the cash and investments
under this Article, in the proportion that the amount
of such cash and investments credited to him on the
immediately preceding Valuation Date bears to the total
amount of such cash and investments credited on the
immediately preceding Valuation Date to all such
participants.
10.13 All credits under this Article become fully vested
when credited to the participant's account.
10.14 No cash or investments representing the credits of any
participant under this Article shall be paid or distributed to
him until after termination of such participant's employment.
Following termination of his employment, the Committee shall
direct the Trustee to cause to be paid or distributed to such
participant or to the surviving beneficiary designated by him or
his estate, subject to the provisions of Section 6.6 hereof, the
cash and investments representing the credits credited to his
account under this Article as of the date of such termination
together with the accretions thereon as of the latest Valuation
Date prior to the commencement of such distribution for which a
valuation shall have occurred and be available to the Committee.
Such distributions shall be made in kind in lump distributions in
whole shares only unless the participant or his beneficiary shall
have elected that such distribution be made in cash. In such
event such whole shares and in any event, any fractional shares
shall be distributed in cash and the value determined by the
Trustee as of the date of termination (or as of the day preceding
the date of receipt by the Committee of the papers deemed
necessary to direct distribution in the event that participation
has terminated by reason of death) based on the average price of
such stock computed on a daily basis for the ninety (90) day
calendar period ending on the latest Valuation Date prior to the
commencement of such distribution for which a valuation shall
have occurred and be available to the Committee (but in no event
shall such Valuation Date be earlier than the Valuation Date
immediately preceding the date of such participant's termination
of participation in this Plan).
<PAGE>
ARTICLE XI
Top-Heavy Provisions
11.1 The following provisions shall become effective in any
year after the 1983 plan year in which the Plan is determined to
be a Top-Heavy Plan.
(a) Determination of Top-Heavy: The Plan will be
considered a Top-Heavy Plan for the plan year if as of the
last day of the preceding plan year, (1) the value of the
sum of Thrift Incentive Accounts, Retirement Income Account,
Divisional Credit Account and the accounts under Article XII
hereof (collectively, the "Accounts") (but not including any
allocations to be made as of such last day of the plan year
except contributions actually made on or before that date
and allocated pursuant to Section 5.3) of participants who
are Key Employees (as defined in Section 416(i) of the
Internal Revenue Code) exceeds 60% of the value of the sum
of the Accounts (but not including any allocations to be
made as of such last day of the plan year except
contributions actually made on or before that date and
allocated pursuant to Section 5.3) of all participants (the
"60% Test") or (2) the Plan is part of a required
aggregation group (within the meaning of Section 416(g) of
the Internal Revenue Code) and the required aggregation
group is top-heavy. However, and notwithstanding the
results of the 60% Test, the Plan shall not be considered a
Top-Heavy Plan for any plan year in which the Plan is a part
of a required or permissive aggregation group (within the
meaning of Section 416(g) of the Internal Revenue Code)
which is not top-heavy. For the purpose of determining
whether or not the Plan is a Top-Heavy Plan, the account
balances and accrued benefits of any participant who has not
received any compensation from the Company at any time
during the five (5) year period ending on the last day of
the preceding plan year shall be disregarded. As used in
this Section 11.1, the term "required aggregation group":
means (1) each qualified plan of the Company in which at
least on Key Employee participates and (2) any other
qualified plan of the Company which enables a plan described
in (1) above to meet the requirements of Section 401(a)(4)
or 410 of the Code; and "permissive aggregation group" means
the required aggregation group of plans plus any other plan
or plans of the Company which, when considered as a group
with the required aggregation group, would continue to
satisfy the requirements of Section 401(A)(4) and 410 of the
Code.
(b) Minimum Allocations: Notwithstanding the
provisions of Section 5.3, for any plan year after 1983
during which the Plan is deemed a Top-Heavy Plan a portion
of the Company's contribution allocable to each Key Employee
shall be subject to forfeiture and reallocation to the
appropriate Accounts of non-Key Employees who are
participants in this Plan, but not in the Company's defined
benefit plan. Such forfeited and reallocated amount shall
equal the amount, if any, which if so reallocated to the
appropriate Accounts of such non-Key Employees, would result
in the Company's contribution (including Qualified Deferred
Earnings Contributions) to both Key Employees and such
non-Key Employees, when expressed as a percentage of each of
their respective compensation (which term, as used in this
Section (b), means all compensation of the participant from
the Company) being equal. For any non-Key Employee who
participates in the Plan and the Company's defined benefit
plan, the top-heavy provisions of Article XIII of the
Company's defined benefit plan shall apply to the payment of
benefits for the year in which the Plan is determined to be
top-heavy.
(c) Minimum Vesting: Notwithstanding the provision of
Section 6.4 or Article XII, for any plan year in which the
Plan is a Top-Heavy Plan, the vested percentage of a
participant in his Retirement Income Account, Divisional
Credit Account and Article XII account shall be determined
in accordance with the following table:
Vested Forfeited
Years of Employment Percentage Percentage
less than 2 0% 100%
2 but less than 3 20 80
3 but less than 4 40 60
4 but less than 5 60 40
5 but less than 6 80 20
6 or more 100 0
If the vesting schedule under the Plan shifts in or out of
the above schedule for any plan year because of the Plan's
top-heavy status, such shift is an amendment to the vesting
schedule and the election in Section 411(a)(10) of the Code
shall apply.
Except for benefits attributable to participant
contributions, the above vesting schedule applies to all
benefits within the meaning of Section 411(a)(7) of the
Code, including benefits accrued before the effective date
of Section 416 of the Code and benefits accrued before the
Plan became top-heavy. Further, no reduction in vested
benefits may occur in the event the Plan's status as
top-heavy changes for any plan year. However, this
paragraph (c) shall not apply to the account balances of any
participant who does not have an Hour of Service after the
Plan initially becomes top-heavy and such participant's
account balance attributable to Company contributions and
surrendered credits will be determined without regard to
this paragraph (c).
(d) Compensation Limitation: For any year in which
the Plan is a Top-Heavy Plan, only the first $200,000 (or
such larger amount as may be prescribed by the Secretary of
his delegate) of a participant's annual compensation shall
be taken into account for purposes of determining Company
contributions under the Plan.
(e) Impact on Maximum Benefits: For any year in which
the Plan is a Top-Heavy Plan, the last paragraph of Section
5.3 shall be read by substituting the number "1.00" for the
number "1.25" wherever it appears therein except such
substitution shall not have the effect of reducing any
benefit accrued under a defined benefit plan prior to the
first day of the plan year in which this provision becomes
applicable.
ARTICLE XII
Bullock's Profit Sharing Retirement Benefit Payments Plan
12.1 This Article is designed to allow employees of the
Company's Bullock's Division (hereinafter referred to as
"Bullock's") hired by Bullock's prior to August 29, 1964 and who,
on the effective date of this Article are participating employees
(such employees being hereinafter referred to as "Participating
Employees") in the Bullock's Profit Sharing Retirement Benefit
Payments Plan, established in 1943, and subsequently amended and
restated as of February 1, 1976 (the "Bullock's Plan"), said Plan
having been merged into this Article XII effective July 1, 1984,
to elect to participate and receive benefits under the foregoing
Articles I through XI, inclusive, or to elect to participate and
receive benefits pursuant to this Article XII.
12.2 The effective date of this Article is July 1, 1984.
12.3 Each Participating Employee shall elect either to
participate in the foregoing Articles I through XI, inclusive, or
to participate, effective as of July 1, 1984, in this Article XII
by filing with the Committee no later than June 30, 1984, his
written election upon such form(s) as the Committee shall
prescribe. Any such election to participate in Articles I
through XI, inclusive, shall be final and irrevocable, and said
Participating Employee shall not be eligible to participate in
this Article XII. If a Participating Employee fails to file his
written election as provided in the first sentence of this
Section 12.3, said Employee shall be deemed to have elected to
participate in the foregoing Articles I through XI, inclusive,
and shall as of the effective date hereof become a participant
therein, said Participating Employee having no further right to
become a participant in this Article XII.
12.4 If a Participating Employee elects pursuant to Section
12.3 hereof to participate in Articles I through XI hereof,
inclusive, the amounts credited to his accounts and accretions
thereon under the Bullock's Plan shall become Divisional Credits
<PAGE>
as defined in Section 1.26 of the foregoing Article I, as of the
later of January 1, 1984, or his Entry Date (as defined in
Section 1.24 of the foregoing Article I) into said Article I
through XI. If a Participating Employee elects to participate in
this Article XII said accounts and the accretions thereon shall
become accounts and accretions under this Article XII, and said
Participating Employee shall be governed by the provisions
incorporated into this Article XII as hereinafter set forth.
12.5 For the purposes of this Article XII only, the
following terms have the meanings specified below unless the
context otherwise requires:
(a) "Plan" means this Article XII and only those
portions of the foregoing Articles I through XI inclusive
which are expressly hereafter incorporated herein.
(b) "Trust" means the trust established under the
trust agreement provided in Section 8.1 of the foregoing
Article VIII.
12.6 The following provision of the foregoing Articles I
through XI are hereby incorporated into this Article XII (no
other provision of said Articles being applicable hereto):
Sections 1.4; 1.5; 1.6; 1.11; 1.12; 1.15; 1.18; 1.22; 1.23; 1.28;
1.29; 1.30; 4.7; the last two paragraphs of Section 5.3; Sections
5.7; 6.5; 6.6; the first two sentences of Section 6.8; Article
VII; Article VIII; Sections 9.1; 9.2; 2.5
9.3; 9.4; 9.6; 9.7; 9.8; 9.9; and Article XI. Certain provisions
of the Bullock's Plan are hereby restated and are hereinafter set
forth as Sections 12.7 through 12.19 hereof.
12.7 Termination of Participation
The participation of a participant in this Article XII shall
terminate upon the termination of his employment for any reason.
If after termination of his employment a former participant is
reemployed by the Company, he shall for all purposes hereof
constitute a new employee as of the date of such reemployment and
shall no longer be eligible to participate in this Article XII
but shall be eligible to participate in Articles I-XI hereof.
For the purpose of making allocations pursuant to Section 12.12,
no allocation shall be made if the employee is not a participant
through the last day of such plan year except as otherwise
provided in Sections 12.9 and 12.14 hereof.
12.8 Retirement Age
(a) Normal retirement date shall be the last day of
the month in which the sixty-fifth (65) birthday of the
participant occurs.
(b) Advance retirement date shall be the last day of
any month after the sixtieth (60) birthday and prior to the
sixty-fifth (65) birthday of the participant, subject to the
following conditions: Advance retirement date shall apply
to a participant who, after attaining the age of sixty (60)
years, had advanced his normal retirement date upon written
application to and approval by the Committee. In the event
of such advance retirement prior to normal retirement,
contributions by the Company on behalf of such employee will
then cease, and benefits shall be paid as provided in
Section 6.5 hereof.
(c) A participant who is transferred from Bullock's to
another division or subsidiary of the Company may with the
consent of such other division or subsidiary apply for
advance retirement in the manner provided and subject to the
conditions set forth in paragraph (b) above.
12.9 Amount of Retirement Income, Forms and Provisions
The benefits which shall be provided for any retiring
participant will be based upon the value of the participant's
interest in the Trust as of his retirement date. Disbursements
under this Article XII shall be made in accordance with Section
6.5 hereof.
Any participant who has attained his normal retirement date
and whose retirement date is other than on the first day of a
plan year, shall be entitled to receive, in lieu of the benefits
based upon the value of the participant's interest in the Trust
as of his retirement date, the value of his interest increased by
an allocation to such participant's account of that portion of
the Company's contribution, if any, to the Plan for the then
current plan year that the compensation earned by such
participant for the fractional part of the calendar year to his
retirement date bears to the total compensation paid to all
employees participating in this Article XII for such calendar
year. The additional benefits, so determined, need only be paid
on or before the expiration of ninety (90) days after the first
day of the next full plan year and only following such transfer
will the participant be entitled to receive the additional
benefits therefrom. The Committee is exclusively authorized and
empowered to determine the manner in which the value of such
additional benefits shall be effective. Such additional benefits
shall be subject to all of the other provisions of this Article
XII.
12.10 Company's Contributions
The Company will contribute to the Trust Fund within sixty
(60) days after the close of its fiscal year beginning February
3, 1985 and ending on February 1, 1986 and after the close of
each calendar year beginning on or after January 5, 1986 such
amounts out of the earnings of Bullock's as provided in this
Section. The funds paid to the Trustee shall be placed into the
Profit Sharing Account or Special Account (as hereinafter
provided for) and shall be allocated by the Committee to the
accounts of the various participants in this Article XII and
shall be credited by the Committee to the then participating
employees' accounts in accordance with such allocation, but
subject to all of the provisions of this Article XII. Such
allocation by the Committee shall be made in accordance with the
following method: To the account of each participating employee
that portion thereof that the total compensation paid to such
<PAGE>
employee bears to the total compensation paid to all employees
participating in this Article XII.
For the purposes of this Section, total compensation for any
participating employee shall be limited to $90,000.
The maximum annual contribution by the Company shall not
exceed fifteen percent (15%) of the aggregate annual compensation
paid or accrued to the participants in this Article XII; and,
subject to the foregoing limitation, the annual contribution of
the Company shall be a sum of money out of its earnings, the
amount of which shall be determined annually through the use and
application of the following formula:
Taking as a base the unaudited income before federal taxes
on income of Bullock's for the 1985 fiscal year and each calendar
year commencing on or after January 5, 1986 as determined in
accordance with divisional accounting policies of the Company and
as reflected on the books and in the financial statements of
Bullock's, the following adjustments shall be made in the
sequence indicated:
(a) Add back or subtract the net sum of audit
adjustments known at the time of determining the
contribution (which shall include the adjustment for the
effect of the "LIFO" inventory method);
(b) Add back all intra-company charges (except as
provided in (c) below) as reflected on the books of
Bullock's, including any net intra-company rent, (but
excluding rent paid to another division or a subsidiary of
the Company), finance cost transfer net, home office charges
or services, bank service charges and amortization of
capitalized leases;
(c) Deduct all intra-company credits (including
minimum rents capitalized) as reflected on the books of
Bullock's and deduct Federated Department Stores, Inc.
service fee (at .38% of divisional sales);
(d) Add back the California franchise tax expense as
reflected on the books of Bullock's;
(e) Deduct a sum representing imputed California
franchise tax calculated on the basis of the statutory rates
in effect for such relevant year applied to said base as
adjusted in accordance with clauses (a), (b), (c) and (d)
above;
(f) Add back the estimated expense for contribution to
this Article XII as shown by said financial statements; and
(g) Deduct an amount determined by multiplying the net
worth (as net worth is hereinafter defined) by five percent
(5%) and dividing the result thus obtained by the complement
of the federal income tax statutory rate in effect for the
relevant year; provided that if a federal excess profits tax
is in effect during any part of said relevant year, the
effective rate of provision for federal income taxes for the
relevant year as shown in the year to date unaudited
financial statement for the last fiscal month of said
relevant year, based on the relationship of Bullock's
provisions for federal income taxes, as determined in
accordance with Company accounting policy, to Bullock's
income before federal income taxes, shall be substituted for
the federal income tax statutory rate in making such
computation
An aggregate sum shall then be computed by the application
of the following schedule of percentages to the net sum derived
from the adjustments described above:
25% of the first $500,000 thereof;
20% of the second $500,000 thereof;
15% of the third $500,000 thereof;
10% of the excess of $1,500,000 thereof.
The aggregate sum thus computed shall then be adjusted by
excluding therefrom, a portion of such aggregate net sum arrived
at by multiplying such sum by a fraction, the numerator of which
is the dollar amount of the compensation of all Bullock's
employees participating in the foregoing Articles I through XI
and the denominator of which is the sum of such compensation plus
the compensation of all participants under this Article XII, the
adjusted net sum so calculated being the adjusted profits of
Bullock's which shall be contributed hereto. The term "calendar
year" as used in this Section 12.10 means the twelve fiscal
months of the Company commencing with the first day of its
January fiscal month and ending with the last day of its December
fiscal month.
The term "net worth" as hereinabove used is defined to be
the capital investment of the Company in Bullock's as shown on
the books of Bullock's as of the close of the Company's 1984
fiscal year for the purpose of determining the Company's
contribution for the 1985 fiscal year, and as of the close of the
preceding calendar year for the purpose of determining the
Company's contribution for the 1986 calendar year and each
calendar year thereafter, adjusted for the daily average effect
(on the basis of a 364 or 371 day fiscal or calendar year, as the
case may be) of changes therein during the fiscal or calendar
year, as the case may be, computed as follows:
(a) Add cash transferred to Bullock's (from the date
each transfer was effected);
(b) Add net profit earned since beginning of relevant
year (from the beginning of the fiscal month following that
in which said net profit was earned);
(c) Add amount of mortgage debt on real property
purchased transferred from Bullock's (from the date the
Company becomes obligated on such debt);
(d) Add non-cash transfers to or from Bullock's which
increase the account designated on the books of account of
Bullock's as "Divisional Net Assets" in accordance with
divisional accounting practices of the Company (from the
date each transfer was effected);
(e) Subtract cash transferred from Bullock's (from the
date each transfer was effected);
(f) Subtract non-cash transfers to or from Bullock's
which decrease the account designated on the books of
account of Bullock's as "Divisional Net Assets" in
accordance with divisional accounting practices of the
Company (from the date each transfer was effected); and
(g) Subtract capitalized leases net of accumulated
amortization (from the beginning of the fiscal month
following that in which the charge was entered on the books
of Bullock's).
When the final determination of the audited income before
federal taxes on income of Bullock's becomes available, the
contribution required thereby shall be calculated in the manner
provided in this section, and any difference between the
contribution as so determined and the amount which was actually
contributed, as calculated pursuant to this section, shall be
applied as promptly as possible to reduce or increase, as the
case may be, the contribution for an ensuing calendar year. If,
after the Company has made a contribution for any year, all or
any part thereof shall be finally disallowed as a deduction under
the Internal Revenue Code in computing the income of the Company
for said year for the purpose of federal taxes on income, then
the amount of the contributions that the Company would otherwise
thereafter be required to make pursuant to this section shall be
reduced by an amount equal to the amount disallowed as such a
deduction.
12.11 Employee's Interest in Trust Fund
The interest of any participating employee in this Article
XII, subject at all times to the termination of the Plan and the
Trust, shall be on any valuation date that part of the value of
Trust Fund as then reported by the Trustee represented by a
fraction whose numerator is the total of said employee's account
as maintained by the Committee and whose denominator is the sum
of all such accounts of all the participating employees in this
Article XII.
12.12 Accumulations
In the event that during any Valuation Period there shall
have accumulated net earnings and capital gains and losses
whether or not realized (hereinafter referred to as
"accretions"), such accretions shall remain as a part of the
Trust Fund and shall, as of the end of each Valuation Period, be
credited by the Committee to the account of all participants as
hereinafter provided. As of the close of each Valuation Period
there shall be allocated to the Article XII account of each
participant who remains such throughout the last day of said
Valuation Period, the accretions in the proportion that the
participant's Article XII account credited to him at the
beginning of said Valuation Period bears to the total amount in
the Article XII accounts of all participants at the beginning of
said Valuation Period.
12.13 Termination of Employment
Upon termination of employment, each employee participating
in this Article XII shall have a 100% vested interest in the
<PAGE>
value of his account as of the last day of the month immediately
preceding the date of such termination (unless such date was the
last day of the month in which event said date shall be used).
12.14 Death of Participating Employee
Subject to the provisions of Section 6.6 of Article VI, the
beneficiary or heirs at law of a participant in this Article XII
whose date of death is other than on the first day of a plan year
shall be entitled to receive, in lieu of the benefits based upon
the value of the participant's interest in the Trust as of the
date of death, the value of the participant's interest increased
by an allocation to such participant's Article XII account of
that portion of the Company's contribution, if any, to the plan
pursuant to this Article XII for the then current plan year that
the compensation earned by such participant for the fractional
part of the calendar year to his date of death bears to the total
compensation paid to all employees participating in this Article
XII for such calendar year. The additional benefits, so
determined, need only be paid on or before the expiration of
ninety (90) days after the first day of the next full plan year
and only following such transfer will the beneficiary or heirs at
law be entitled to receive the additional benefits therefrom.
The Committee is exclusively authorized and empowered to
determine the manner in which the value of such additional
benefits shall be distributable. Such additional benefits shall
be subject to all of the other provisions of this Article XII.
12.15 Transfer to other Divisions
In the event a participant is transferred from the employ of
Bullock's to the employ of another division or subsidiary of the
Company he shall not be deemed to have been discharged nor to
have terminated his employment for the purposes of this Article
XII and so long as such participant shall continue without a one
year break in service (as defined in Section 6.8 hereof) in such
employment in the employ of one or more divisions or subsidiaries
of the Company, he shall not be deemed to have terminated his
employment with Bullock's until the date on which he ceased to be
an employee of any such division or subsidiary, except that such
participant shall not be entitled to share in any contribution of
the Company to this Article XII, but the account of such
participant shall continue to share in the accretions on the
funds in the Profit Sharing Account and Special Account as
provided in Section 12.12 hereof.
12.16 Transfer to Special Account
At any time after attaining his 60th birthday, but prior to
termination of his employment, a participant shall have the
election, which may not thereafter be rescinded, to require the
transfer to the Special Account of an amount equal to his
interest in the Profit Sharing Account. Such transfer shall be
made as of the next Valuation Date following the date that such
participant's written election has been received by the Committee
in the case of amounts theretofore credited and as of the
Valuation Date following their being credited in the case of
<PAGE>
allocations thereafter credited. The dollar amount of said
credits shall be determined as of the Valuation Date immediately
preceding the date on which such transfer shall take place. Upon
such transfer said credits shall not thereafter be deemed to be
outstanding but the participant's interest shall thereafter be
represented by his resulting credits in the Special Account. All
amounts transferred to the Special Account pursuant to this
Section shall be reinvested as provided in Section 4.7(b) hereof.
12.17 Accounts of Participating Employees
The Committee shall maintain a separate account for each
employee participating in this Article XII and into such account
there shall be credited the employee's participation as provided
in this Article XII. On the first day of each plan year the
separate accounts of the participating employees shall be
credited with the proportionate share of contributions, and with
the increase, if any, in accretions as provided herein, and shall
be charged with the proportionate share of all expenses, if any,
and with the decrease, if any, in accretions.
12.18 Investments
Trust funds shall be invested in the manner prescribed in
Section 4.7(b) hereof.
12.19 Provisions for Accounts
The Committee shall cause the Trustee to maintain an account
entitled "The Profit Sharing Account", or similar designation,
wherein shall be maintained the funds and assets relating to this
Article XII; shall cause the Trustee to maintain an account
entitled "Special Account", or similar designation, wherein shall
be maintained the funds and assets relating to the Special
Account; and shall cause the Trustee to maintain an account
entitled "Payment Account", or similar designation, wherein shall
be kept and maintained the funds and assets which are transferred
from the Profit Sharing Account and the Special Account when
participants terminate employment and such transfers are
necessary for payment of the retirement benefits, and such
retirement benefits shall be paid from said Payment Account or
otherwise, as may have been determined by the Committee under the
authority granted the Committee hereunder with respect to
terminated participants.
The Trustee and the Committee are hereby authorized and
empowered to transfer into the Payment Account from either or
both the Special Account and the Profit Sharing Account, such
funds as may become available under the provisions hereof upon
the termination of a participant's employment with the Company,
either by retirement or otherwise, and until a determination has
been made of the rights, privileges and benefits of such a
participant, or where a dispute exists with a participant with
respect to the rights, privileges and benefits of such
participant, if any.
ARTICLE XIII
13.1 Retroactive Amendments to Rich's Plan. The purpose of
this Section 13.1 is to make certain amendments to the Rich's
Plan, as in effect on January 1, 1984, which amendments shall be
effective for the period commencing on January 1, 1984 and ending
on January 1, 1985, the date of the merger of the Rich's Plan
into this Plan. The Rich's Plan, as in effect on January 1,
1984, is hereby amended as follows:
(a) Section 4.2(b) thereof is hereby deleted and
Section 4.2(b) as set forth on Attachment "A" hereto is
substituted therefore.
(b) Article XV, as set forth on Attachment "A" hereto
is added as Article XV thereof.
ATTACHMENT "A"
Amendments to Rich's Plan Effective for 1984
4.8(b) In no event shall the annual addition to a
participant's account under this Plan hereof exceed the lesser of
$30,000 (or such amount as adjusted for increases in the cost of
living under regulations prescribed by the Secretary of the
Treasury or his delegate under Section 415(d) of the Internal
Revenue Code) or 25% of the participant's compensation (which
term is used in this paragraph and the next paragraph shall be as
defined in appropriate Internal Revenue Regulations). For this
purpose annual addition shall include contributions by Federated,
the lesser of one-half of the participant's contribution or all
of the participant's contribution in excess of 6% of his
compensation, and Forfeitures. The amount in excess of such
maximum annual additional shall be treated as a Forfeiture.
If a participant also participates in a defined benefit plan
maintained by Federated, Section 415(e) of the Code provides that
the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall not exceed 1.0. Federated
intends that an adjustment, in any, in contributions or benefits
which is necessary to satisfy such 1.0 limitation under Section
415(e) of the Code shall be made exclusively in the defined
benefit plan so that no such adjustment need be made in this
Plan. For purposes of this paragraph, the defined benefit plan
fraction for any plan year is a fraction, the numerator of which
is the projected annual benefit of the participant under the
defined benefit plan as of the close of the plan year, and the
denominator of which is the lessor of (i) the product of 1.25
multiplied by the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such plan year, or (ii) the product
of 1.4 multiplied by one hundred percent (100%) of the
participant's average compensation as an employee during the
three (3) consecutive calendar years (or actual number of years
if less than three) during which the participant actively
participated in the defined benefit plan and had the greatest
aggregate compensation as an employee. The defined contribution
plan fraction for any plan year is a fraction, the numerator of
which is the sum of the annual additions to the participant's
account under this Plan from (i) employer contributions, (ii)
forfeitures and (iii) employee contributions in excess of six
<PAGE>
percent (6%) of his compensation for such plan year or one-half
(1/2) of his contributions, whichever is less, and the
denominator of which is the sum of the lesser of the following
amounts determined for such year and for each prior year of
service:
(a) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of the Code
for such plan year (determined without regard to Section
415(c)(6) of the Code), or
(b) the product of 1.4 multiplied by twenty-five
percent (25%) of the participant's compensation as an
employee for such plan year.
ARTICLE XV
Top-Heavy Provisions
15.1 The following provisions shall become effective in any
year after the 1983 plan year in which the Plan is determined to
be a Top-Heavy Plan.
(a) Determination of Top-Heavy: The Plan will be
considered a Top-Heavy Plan for the plan year if as of the
last day of the preceding plan year, (1) the value of the
sum of the Accounts (but not including any allocations to be
made as of such last day of the plan year except
contributions actually made on or before that date and
allocated pursuant to the terms of this Plan) of
Participants who are Key Employees (as defined in Section
416(i) of the Internal Revenue Code) exceeds 60% of the
value of the sum of the Accounts (but not including any
allocations to be made as of such last day of the plan year
except contributions actually made on or before that date
and allocated pursuant to the terms of this Plan) of all
Participants (the "60% Test") or (2) the Plan is part of a
required aggregation group (within the meaning of Section
416(g) of the Internal Revenue Code) and the required
aggregation group is top-heavy. However, and
notwithstanding the results of the 60% Test, the Plan shall
not be considered a Top-Heavy Plan for any plan year in
which the Plan is a part of a required or permissive
aggregation group (within the meaning of Section 416(g) of
the Internal Revenue Code) which is not top-heavy.
(b) Minimum Allocations: Notwithstanding any other
provision of this Plan, for any plan year after 1983 during
which the Plan is deemed a Top-Heavy Plan a portion of
Federated's contribution allocable to each Key Employee
shall be subject to forfeiture and reallocation to the
appropriate Accounts of non-Key Employees who are
participants in this Plan, but not in Federated's defined
benefit plan. Such forfeited and reallocated amount shall
equal the amount, if any, which if so reallocated to the
appropriate Accounts of such non-Key Employees, would result
in Federated's contribution to both Key Employees and such
non-Key Employees, when expressed as a percentage of each of
their respective compensation (which term as used in this
Section shall be as defined in appropriate Internal Revenue
regulations and subject to the limitations of Section 416(d)
of the Internal Revenue Code) being equal. For any non-Key
Employee who participates in the Plan and Federated's
defined benefit plan, the top-heavy provisions of Article
XIII of Federated's defined benefit plan shall apply to the
payment of benefits for the year in which the Plan is
determined to be top-heavy.
(c) Minimum Vesting: Notwithstanding any other
provision of this Plan, if a participant's termination of
employment occurs while the Plan is a Top-Heavy Plan, such
participant's vested percentage in his Account shall not be
less than the percentage determined in accordance with the
following table:
Vested Forfeited
Years of Employment Percentage Percentage
less than 2 0% 100%
2 but less than 3 20 80
3 but less than 4 40 60
4 but less than 5 60 40
5 but less than 6 80 20
6 or more 100 0
(d) Compensation Limitation: For any year in which
the Plan is a Top-Heavy Plan, the compensation limitation
described in Section 416(d) of the Internal Revenue Code
shall apply.
(e) Change in Top-Heavy Status: If the Plan becomes a
Top-Heavy Plan and subsequently ceases to be such, the
vesting schedule in subsection (c) of this Section shall
continue to apply in determining the vested percentage of
any participant in his Account and who had at least five
years of employment as of December 31 in the last plan year
of top-heaviness. For other participants, said schedule
shall apply only to their Account balance as of such
December 31.
(f) Impact on Maximum Benefits: For any year in which
the Plan is a Top-Heavy Plan, the last paragraph of Section
4.8(b) shall be read by substituting the number "1.00" for
the number "1.25" wherever it appears therein except such
substitution shall not have the effect of reducing any
benefit accrued under a defined benefit plan prior to the
first day of the plan year in which this provision becomes
applicable.
PRE-JANUARY 1, 1989 OPERATIONAL AMENDMENT
The Plan, as in effect immediately prior to January 1, 1987, is amended
effective as of January 1, 1987 and for the period beginning on such date
through December 31, 1988 (except as otherwise specifically noted herein), in
the following respects:
1. The second grammatical paragraph of Section 4.2 of the Plan is
hereby amended to read as follows:
Each participant may elect under Section 401(k) of the
Internal Revenue Code and the applicable Treasury Regulations
thereunder, in writing on a form prescribed by the Committee, to
defer receipt of up to 10% of his Participating compensation, or
such lesser amount as established by rule of the Committee (which
rule may be applied uniformly, or solely to those Participants who
are "highly compensated" as defined in Section 401(k) of the
Internal Revenue Code and the applicable Treasury Regulations
thereunder) in whole or in part in place of the amounts contributed
pursuant to the first paragraph of this Section and to have such
deferred earnings, hereinafter referred to as Qualified Deferred
Earnings Contributions, contributed to the Plan by the Company
on his behalf; provided, however, that (1) the amount of a
participant's Qualified Deferred Earnings Contributions made in
any calendar year shall not exceed Seven Thousand Dollars
($7,000) as said sum may be adjusted in regulations promulgated
by the Secretary of the Treasury (except that this limitation shall
not apply to such Contributions attributable to service performed
in 1986 and described in Section 1105(c)(5) of the Tax Reform Act
of 1986); (2) the total contribution under this Section shall in no
event exceed 10% of participating compensation; and (3) Qualified
Deferred Earnings Contributions and the accretions (as defined in
Section 5.3 hereof) thereon may not be withdrawn by or
distributed to said Participant until the earliest of the Participant's
retirement, death, disability, separation from service, or as to
Qualified Deferred Earnings Contributions only, hardship (hardship
hereunder means necessary in light of immediate and heavy
financial needs of the Participant, and distributions for reason of
hardship will be limited to the amount required to meet an
immediate financial need that is not reasonably available from
other resources of the Participant, all as determined by the
Committee in accordance with Section 401(k) of the Internal
Revenue Code and the applicable Treasury Regulations thereunder)
or attainment of age 59-1/2. Any (or all) "highly compensated
employees" as hereinafter defined may be required to revise his
election to defer an amount of his Participating compensation, in
conformity with a uniform rule of the Committee, if the Plan does
not meet both of the following limits:
2. Section 4.7(a) of the Plan is amended to read as follows:
(a) Unless otherwise elected by participants as herein
provided, the cash and investments, the earnings thereon, and the
proceeds thereof attributable to the contributions to this Plan or a
plan merged herein made by participants, shall be included in and
invested and reinvested (except as hereinafter expressly provided)
as provided in Fund A described below. Fund A shall also include
funds representing the Company-contributed portion of
participants' Thrift Incentive Credits transferred thereto pursuant
to Section 5.6 hereof. In addition, effective as of November 30,
1988, Fund A shall also include funds held under the Plan which
are attributable to the employee stock ownership portion of this
Plan. The foregoing notwithstanding and unless otherwise elected
by participants, the cash and investments thereon and the proceeds
thereof, attributable to the contributions made by participants in the
Rich's Plan which were invested on December 31, 1984, in
Diversified Investments, as defined in the Rich's Plan, shall be
included in and invested and reinvested pursuant to Fund B
described below, and such cash and investments and the proceeds
thereof so attributable which are invested on December 31, 1984,
in common stock of Federated Department Stores, Inc., shall be
included in and invested pursuant to Fund D described below.
Effective as of July 1, 1987, and thereafter as of each subsequent
July 1, or such other date as the Committee may decide, each
participant shall have the opportunity to elect to have all or a
portion of the credits attributable to his contributions, or the
earnings thereon, in Funds A, B, C or D, described below,
reinvested as hereinafter provided in Fund A, B and C, or any of
them. The foregoing notwithstanding, an eligible employee shall
have the opportunity to make such an election as of his or her
Entry Date occurring after July 1, 1987. Such reinvestment shall
be made in increments of twenty-five percent (25%) of the
participant contributed portion (and the accretions thereon) of his
account, based upon the dollar value of such contributions and
accretions determined as of the Valuation Date immediately
preceding the date as of which such reinvestment shall be
effective. Employee contributions to the Plan and the accretions
thereon made subsequent to such an election shall be invested in
the same increments and in the Funds last elected by the
participant.
Fund A - all sums in this Fund shall be invested and
reinvested in a variety of short-term fixed income corporate and
government bonds, investment contracts with selected insurance
companies which provide for a stated investment return, and
intermediate-term variable rate fixed-income securities as selected
by the Investment Committee or by investment managers appointed
thereunder.
Fund B - all sums in this Fund shall be invested and
reinvested in a variety of corporate and government fixed income
securities, equity securities, and cash equivalents as selected by the
Investment Committee or by investment managers appointed
thereunder.
Fund C - all sums in this Fund shall be invested and
reinvested in an equity index fund which reflects Standard &
Poor's 500 stock investments.
Fund D - all sums in this Fund (consisting only of funds
invested as of December 31, 1984, in common stock of Federated
Department Stores, Inc., pursuant to the investment alternative
described in Section 3.3(b)(1), (2) or (6) of the Rich's Plan and the
earnings thereon) shall be invested and reinvested in the common
stock of Federated Department Stores, Inc., and cash equivalents;
provided that no participant shall have the right to transfer sums
into this Fund or to make any contributions thereto.
3. Section 5.2(a) and (b) are hereby amended to delete the word
"hereinafter" and to substitute therefor the word "herein".
4. The first sentence of subparagraph (a) of Section 5.3 of the Plan
is hereby amended to read as follows:
(a) As of each Valuation Date, there shall be allocated to
the account of each participant the net earnings and capital gains
and losses for the preceding Valuation Period, whether or not
realized, of each investment fund described in Section 4.7 hereof
in which such account is invested (all such net earnings and capital
gains and losses are hereafter collectively referred to as
"accretions"), in the proportion that the amount of such account,
to the extent invested in each such investment fund, as of the start
of such Valuation Period, and not withdrawn during such
Valuation Period, bears to the amount of all such accounts to the
extent invested in each such fund at the beginning of such period,
and not withdrawn during such Valuation Period.
5. Section 5.6 of the Plan is hereby amended to read as follows:
5.6 A participant who (1) shall have attained his 60th
birthday while an employee of the Company on or before
December 31, 1986, or (2) shall have attained his 55th birthday
and completed ten or more Years of Vesting Service, shall have
the election, which may not thereafter be rescinded, to require,
prior to termination of his participation in the Plan, the transfer of
all or part of (a) cash and investments equal in value to the
Company-contributed portion of his Thrift Incentive Credits
(including the accretions thereon) to Fund A as described in
Section 4.7(a) hereof, and (b) cash and investments equal in value
to his Retirement Income Credits and Divisional Credits to the
Stability Income Fund as described in Section 4.7(b). All such
transfers shall be made as of the first day of the month next suc-
ceeding the date that such participant's written election has been
received by the Committee. Any such transfer shall be equal to
25%, 50%, 75% or 100% of the value of such Credits as of the
day such transfer is made. Any subsequent Company contributions
to such participant's Thrift Incentive Credits, Retirement Income
Credits or Divisional Credits made subsequent to such an election
shall be invested in the same increments last elected by the
participant. The dollar value of said credits, other than credits
invested pursuant to paragraph (b) of Section 4.7 in the common
stock of Federated Department Stores, Inc., shall be determined by
the Trustee as of the Valuation Date immediately preceding the
date on which such transfer shall take place; and the dollar value
of said credits invested in common stock of Federated Department
Stores, Inc., pursuant to paragraph (b) of Section 4.7 shall be
determined by the Trustee based on the average price of said stock
computed on a daily basis for the ninety (90) day calendar period
ending on the Valuation Date immediately preceding the date on
which such transfer shall take place.
6. Section 6.1 of the Plan is hereby amended to read as follows:
6.1 All credits of participants (other than Thrift Incentive Credits)
shall be contingent, and the interest on the part of each participant therein
shall be subject to termination except to the extent that such credits or part
thereof shall become vested in him in accordance with the provisions of this
Article. All Thrift Incentive Credits, including but not limited to each
participant's contributions, shall be nonforfeitable when made.
7. Section 6.2(b) of the Plan is hereby amended by deleting the words
"and 3 years of employment in the case of his Thrift Incentive Credits".
8. Section 6.5 of the Plan is hereby amended by adding the following
as the last sentence of the first grammatical paragraph thereof:
In addition to the foregoing, the right of the participant to
commence distribution of his nonforfeitable portion of his account,
subject to the rules herein contained, shall accrue no later than the
date of his early or normal retirement under the Company's
Pension Plan adopted as of January 1, 1984, as the same has been
and may be from time to time amended.
9. Section 6.7(a) of the Plan is hereby amended to add the following
as the second sentence thereof:
The foregoing notwithstanding, no portion of a participant's basic
or additional contributions made in 1987 may be withdrawn in that
year, other than such contributions or portions thereof constituting
Qualified Deferred Earnings Contributions (which may be
withdrawn subject to all other requirements of this Plan).
10. A new Section 6.11 reading as follows is added to the Plan
immediately after Plan Section 6.10:
6.11 The provisions of Section 401(a)(9) of the Internal
Revenue Code, as amended, are hereby incorporated by reference
into the Plan and shall apply to this Plan notwithstanding any other
provision herein to the contrary. Such Section 401(a)(9)
provisions shall be applied in accordance with any final regulations
(or, in the absence of final regulations, proposed regulations)
issued by the Secretary of the Treasury or his delegate as to such
provisions.
11. Part of the first sentence of Section 9.3 of the Plan is hereby
amended by deleting the words "right to subjected" and substituting the words
"right be subjected" therefor.
12. Section 6.1 of the Plan is hereby amended, effective as of January
1, 1988 and for the period beginning on such date through December 31, 1988,
to read as follows:
6.1 Effective January 1, 1988, all credits of Participants
shall be nonforfeitable.
13. Sections 6.2, 6.3, and 6.4 of the Plan are hereby deleted from the
Plan and Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, and 6.11 of the Plan are
renumbered accordingly, effective as of January 1, 1988 and for the period
beginning on such date through December 31, 1988. All references in the Plan
to the deleted Sections are hereby deleted and references to the renumbered
Sections are hereby renumbered accordingly.
14. Section 9.6 of the Plan is hereby amended, effective as of May 11,
1988 and for the period beginning on such date through December 31, 1988, to
read as follows:
9.6 In the event that a subsidiary which is a party to the
Plan, or a division of the Company the employees of which are
participants in the Plan, ceases to be a subsidiary or a division, as
the case may be, by reason of the sale of the stock of the
subsidiary, or the sale of substantially all of the property or assets
of the subsidiary or division, to a purchaser other than another
subsidiary, the interests in the Plan of the participants employed by
such subsidiary or division shall be determined as of the date of
such sale in the same manner as in the case of any other
participant who terminates his employment on that date; provided,
however that the Trustee may be directed to apply the portion of
the Trust Fund applicable to participants who shall continue to be
employed by such purchaser for their benefit by the payment
thereof to the trustee of any retirement income, profit sharing or
similar plan of such purchaser.
PRE-JANUARY 1, 1989 TAX REFORM ACT AMENDMENT
The Plan, as in effect immediately prior to January 1, 1987, is amended
effective as of January 1, 1987 and for the period beginning on such date
through December 31, 1988, in accordance with the following provisions which are
designed to meet the requirements of the Tax Reform Act of 1986 (the "TRA")
which are effective prior to January 1, 1989. Such provisions are generally
taken from Model Amendment IV contained in Notice 87-2 of the Internal Revenue
Service, with certain modifications set forth in Section XI below to reflect the
fact that matching contributions which were made in relation to Excess
Contributions (as defined in Section XI below) distributed for plan years before
1989 were also distributed under the Plan. Other than for such Article XI
modifications, no change has been made in the provisions set forth in Model
Amendment IV of Notice 87-2.
SECTION I: PURPOSE AND EFFECTIVE DATE
1.1 Purpose. It is the intention of the Employer to amend the
plan to comply with those provisions of the Tax Reform Act of 1986 that
are effective prior to the first Plan Year beginning after December 31,
1988. Nothing contained in this amendment shall permit or require
Elective Deferrals, Matching Employer Contributions, or Employee
Contributions under the plan unless such Elective Deferrals, Matching
Employer Contributions, or Employee Contributions have been authorized
by the Employer under other provisions of the plan or under other
amendments thereto.
1.2 Effective Date. Except as otherwise provided, this
amendment shall be effective as of the first day of the first Plan Year
beginning after December 31, 1986.
SECTION II: DEFINITIONS
For purposes of this amendment only, the following definitions
shall apply.
2.1 "Adjustment Factor" shall mean the cost of living
adjustment factor prescribed by the Secretary of the Treasury under
Section 415(d) of the Code for years beginning after December 31, 1987,
as applied to such items and in such manner as the Secretary shall
provide.
2.2 "Affiliated Employer" shall mean the Employer and any
corporation which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which includes the Employer; any
trade or business (whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m) of the Code) which
includes the Employer; and any other entity required to be aggregated
with the Employer pursuant to regulations under Section 414(o) of the
Code.
2.3 "Code" shall mean the Internal Revenue Code of 1986 and
amendments thereto.
2.4 "Compensation" shall mean compensation paid by the
Employer to the Participant during the taxable year ending with or within
the Plan Year which is required to be reported as wages on the
Participant's Form W-2 and, if the provisions of the plan other than this
amendment so provide, shall also include compensation which is not
currently includible in the Participant's gross income by reason of the
application of Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b) of the
Code.
2.5 "Elective Deferrals" shall mean contributions made to the
plan during the Plan Year by the Employer, at the election of the
Participant, in lieu of cash compensation and shall include contributions
made pursuant to a salary reduction agreement.
2.6 "Employee" shall mean employees of the Employer and
shall include leased employees within the meaning of Section 414(n)(2) of
the Code. Notwithstanding the foregoing, if such leased employees
constitute less than twenty percent of the Employer's nonhighly
compensated work force within the meaning of Section 414(n)(1)(C)(ii) of
the Code, the term "Employee" shall not include those leased employees
covered by a plan described in Section 414(n)(5) of the Code unless
otherwise provided by the terms of this plan other than this amendment.
2.7 "Employee Contributions" shall mean contributions to the
plan made by a Participant during the Plan Year.
2.8 "Employer" shall mean the entity that esta-
blishes ormaintains the plan; any other organization which has adopted the
plan with the consent of such establishing employer; and any successor of
such employer.
2.9 "Family Member" shall mean an individual described in
Section 414(q)(6)(B) of the Code.
2.10 "Highly Compensated Employee" shall mean an individual
described in Section 414(q) of the Code.
2.11 "Inactive Participant" shall mean any Employee or former
Employee who has ceased to be a Participant and on whose behalf an
account is maintained under the plan.
2.12 "Matching Contribution" shall mean any contribution to the
plan made by the Employer for the Plan Year and allocated to a
Participant's account by reason of the Participant's Employee
Contributions or Elective Deferrals.
2.13 "Non-Highly Compensated Employee" shall mean an
Employee of the Employer who is neither a Highly Compensated
Employee nor a Family Member.
2.14 "Participant" shall mean any Employee of the Employer
who has met the eligibility and participation requirements of the plan.
2.15 "Qualified Nonelective Contributions" shall mean
contributions (other than Matching Contributions) made by the Employer
and allocated to Participants' accounts that the Participant may not elect
to receive in cash until distributed from the plan; that are 100 percent
vested and nonforfeitable when made; and that are not distributable under
the terms of the plan to Participants or their beneficiaries earlier than
the earlier of:
(i) separation from service, death, or disability of the
Participant;
(ii) attainment of the age 59-1/2 by the Participant;
(iii) termination of the plan without establishment of a successor
plan;
(iv) the events specified in those of Sections XIII, XIV or XV
of this amendment adopted by the Employer; or
(v) for Plan Years beginning before January 1, 1989, upon
hardship of the Participant.
2.16 "Plan Year" shall mean the plan year otherwise specified
in the plan.
SECTION III: PROVISIONS RELATING TO LEASED EMPLOYEES
3.1 Safe-Harbor. Notwithstanding any other provisions of the
Plan, for purposes of determining the number or identity of Highly
Compensated Employees or for purposes of the pension requirements of
Section 414(n)(3) of the Code, the employees of the Employer shall
include individuals defined as Employees in Section 2.6 of this
amendment.
3.2 Participation and Accrual. A leased employee within the
meaning of Section 414(n)(2) of the Code shall become a Participant in,
and accrue benefits under, the plan based on service as a leased employee
only as provided in provisions of the plan other than this Section III.
3.3 Effective Date. This Section III shall be effective for
services performed after December 31, 1986.
SECTION IV: LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
4.1 Revised Contribution Limitations Under Defined
Contribution Plan.
4.1(a) Definition of Annual Additions. For purposes of the plan,
"Annual Addition" shall mean the amount allocated to a Participant's
account during the Limitation Year that constitutes:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
(iv) Amounts described in Sections 415(l)(l) and 419(A)(d)(2)
of the Code.
4.1(b) Maximum Annual Addition. The maximum Annual
Addition that may be contributed or allocated to a Participant's account
under the Plan for any Limitation Year shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's compensation, within the
meaning of Section 415(c)(3) of the Code for the
Limitation Year.
4.1(c) Special Rules. The compensation limitation referred to in
Section 4.1(b)(ii) shall not apply to:
(i) Any contribution for medical benefits (within the meaning
of Section 419A(f)(2) of the Code) after separation from
service which is otherwise treated as an Annual Addition,
or
(ii) Any amount otherwise treated as an Annual Addition under
Section 415(l)(l) of the Code.
4.1(d) Definitions. For purposes of Section 4.1, "Defined
Contribution Dollar Limitation" shall mean $30,000 or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
4.2 Special Rules for Plans Subject to Overall Limitations
Under Code Section 415(e).
4.2(a) Recomputation Not Required. The Annual Addition for
any Limitation Year beginning before January 1, 1987 shall not be
recomputed to treat all Employee Contributions as an Annual Addition.
4.2(b) Adjustment of Defined Contribution Plan Fraction. If the
plan satisfied the applicable requirements of Section 415 of the Code as
in effect for all Limitation Years beginning before January 1, 1987, an
amount shall be subtracted from the numerator of the defined contribution
plan fraction (not exceeding such numerator) as prescribed by the
Secretary of the Treasury so that the sum of the defined benefit plan
fraction and defined contribution plan fraction computed under Section
415(e)(1) of the Code (as revised by this Section IV) does not exceed 1.0
for such Limitation Year.
4.3 Limitation Year. For purposes of this Section IV,
"Limitation Year" shall mean the limitation year specified in the plan, or
if none is specified, the calendar year.
4.4 Effective Date of Section IV Provisions. The provisions of
this Section IV shall be effective for Limitation Years beginning after
December 31, 1986.
SECTION V: ELECTIVE DEFERRALS
5.1 Maximum Amount of Elective Deferrals. Effective as of
January 1, 1987, no Employee shall be permitted to have Elective
Deferrals made under this plan during any calendar year in excess of
$7000 multiplied by the Adjustment Factor as provided by the Secretary
of the Treasury. The foregoing, limit shall not apply to Elective
Deferrals of amounts attributable to service performed in 1986 and
described in Section 1105(c)(5) of the Tax Reform Act of 1986.
5.2 Average Actual Deferral Percentage.
(a) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage for
Eligible Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 1.25; or
(b) the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage for
Eligible Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 2, provided that the Average
Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees does not exceed the Average
Actual Deferral Percentage by Eligible Participants who are
Nonhighly Compensated Employees by more than two (2)
percentage points or such lesser amount as the Secretary of the
Treasury shall prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly Compensated
Employee.
5.3 Definitions. For purposes of this Section V and for
purposes of Sections X and XI of this Amendment, the following
definitions shall be used:
5.3(a) "Actual Deferral Percentage" shall mean the ratio
(expressed as a percentage), of Elective Deferrals and Qualified Employer
Deferral Contributions on behalf of the Eligible Participant for the Plan
Year to the Eligible Participant's Compensation for the Plan Year.
5.3(b) "Average Actual Deferral Percentage" shall mean the
average (expressed as a percentage) of the Actual Deferral Percentage of
the Eligible Participants in a group.
5.3(c) "Qualified Employer Deferral Contributions" shall mean
Qualified Nonelective Contributions taken into account under the terms of
the plan without regard to this amendment in determining the Actual
Deferral Percentage.
5.3(c) "Eligible Participant" shall mean any Employee of the
Employer who is otherwise authorized under the terms of the Plan to have
Elective Deferrals or Qualified Employer Deferral Contributions allocated
to his account for the Plan Year.
5.4 Special Rules.
5.4(a) For purposes of this Section V, the Actual Deferral
Percentage for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective Deferrals
or Qualified Employer Deferral Contributions allocated to his account
under two or more plans or arrangements described in Section 401(k) of
the Code that are maintained by the Employer or an Affiliated Employer
shall be determined as if all such Elective Deferrals and Qualified
Employer Deferral Contribution were made under a single arrangement.
5.4(b) For purposes of determining the Actual Deferral Percentage
of a Participant who is a Highly Compensated Employee, the Elective
Deferrals, Qualified Employer Deferral Contributions and Compensation
of such Participant shall include the Elective Deferrals, Qualified
Employer Deferral Contributions and Compensation of Family Members,
and such Family Members shall be disregarded in determining the Actual
Deferral Percentage for Participants who are Nonhighly Compensated
Employees.
5.4(c) The determination and treatment of the Elective Deferrals,
Qualified Nonelective Contributions and Actual Deferral Percentage of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
SECTION VI: LIMITATIONS ON EMPLOYEE CONTRIBUTIONS
AND MATCHING EMPLOYER CONTRIBUTIONS
6.1 Contribution Percentage.
6.1(a) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25; or
6.1(b) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2, provided that the Average Contribution Percentage
for Eligible Participants who are Highly Compensated Employees does not
exceed the Average Contribution Percentage for Eligible Participants who
are Nonhighly Compensated Employees by more than two (2) percentage
points or such lesser amount as the Secretary of the Treasury shall
prescribe to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
6.2 Definitions. For purposes of this Section VI, and for
purposes of Section XII of this amendment, the following definitions shall
apply.
6.2(a) "Average Contribution Percentage" shall mean the average
(expressed as percentage) of the Contribution Percentages of the Eligible
Participants in a group.
6.2(b) "Contribution Percentage" shall mean the ratio (expressed
as a percentage), of the sum of the Employee Contributions and Matching
Contributions under the plan on behalf of the Eligible Participant for the
Plan Year to the Eligible Participant's Compensation for the Plan Year.
6.2(c) "Eligible Participant" shall mean any employee of the
Employer who is otherwise authorized under the terms of the plan to have
Employee Contributions or Matching Contributions allocated to his
account for the Plan Year.
6.3 Special Rules
6.3(a) For purposes of this Section VI, the Contribution
Percentage for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to make Employee
Contributions, or to receive Matching Contributions, Qualified
Nonelective Contributions or Elective Deferrals allocated to his account
under two or more plans described in Section 401(a) of the Code or
arrangements described in Section 401(k) of the Code that are maintained
by the Employer or an Affiliated Employer shall be determined as if all
such contributions and Elective Deferrals were made under a single plan.
6.3(b) In the event that this plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Section
410(b) of the Code if aggregated with this plan, then this Section VI shall
be applied by determining the Contribution Percentages of Eligible
Participants as if all such plans were a single plan.
6.3(c) For purposes of determining the Contribution Percentage
of an Eligible Participant who is a Highly Compensated Employee, the
Employee Contributions, Matching Employer Contributions and
Compensation of such Participant shall include the Employee
Contributions, Matching Employer Contributions and Compensation of
Family Members, and such Family Members shall be disregarded in
determining the Contribution Percentage for Eligible Participants who are
Nonhighly Compensated Employees.
6.3(d) The determination and treatment of the Contribution
Percentageof any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
SECTION VII: QUALIFIED VOLUNTARY EMPLOYEE
CONTRIBUTIONS NOT PERMITTED
The plan shall accept no Employee Contributions designated by the
Participant as deductible employee contributions (within the meaning of
Section 72(o)(5)(A) of the Code) for a taxable year of the Participant
beginning after December 31, 1986.
SECTION VIII: SPECIAL PROVISIONS FOR EMPLOYEE STOCK
OWNERSHIP PLANS AND STOCK BONUS PLANS
8.1 Definitions. For purposes of this amendment only, the
following definitions shall apply:
8.1(a) "ESOP" shall mean an "Employee Stock Ownership Plan"
as defined in Section 4975(e)(7) of the Code.
8.1(b) "TCESOP" shall mean "Tax Credit Employee Stock
Ownership Plan" as defined in Section 409(a) of the Code.
8.1(c) "Total Distribution" shall mean a distribution to a
Participant or a Participant's beneficiary, within one taxable year of such
recipient, of the entire balance to the credit of the Participant.
8.1(d) "Employer securities" shall mean:
(i) In the case of a TCESOP, common stock issued by
the Employer (or by a corporation which is a member of
the same controlled group of corporations as the Employer
as that term is defined in Section 409(1)(4) of the Code)
which is readily tradeable on an established securities
market, or stock which satisfies the requirements of Section
409(1)(2) or (3) of the Code;
(ii) In the case of an ESOP which is not a TCESOP, stock
described in Section 4975(e)(8) of the Code or in Treas.
Reg. Sec. 54.4975-12;
(iii) In the case of a stock bonus plan which is not a
TCESOP or an ESOP, any securities of the Employer held
by the plan.
8.1(e) "Qualified Participant" shall mean a Participant who has
attained age 55 and who has completed at least 10 years of participation.
8.1(f) "Qualified Election Period" shall mean the five Plan Year
period beginning with the later of (i) the Plan Year after the Plan Year in
which the Participant attains age 55; or (ii) the Plan Year after the Plan
Year in which the Participant first becomes a Qualified Participant.
8.2 Special Distribution and Payment Requirements.
8.2(a) In General. This Section 8.2 shall apply to TCESOPs,
ESOPs, and stock bonus plans and shall not eliminate any form or time
of distribution available under the plan prior to adoption to this
amendment.
8.2(b) Time of Distribution. Notwithstanding any other provision
of the plan, other than such provisions as require the consent of the
Participant and the Participant's spouse to a distribution with a present
balance in excess of $3,500, a Participant may elect to have the portion
of the Participant's account attributable to Employer Securities acquired
by the plan after December 31, 1986, distributed as follows:
(i) If the Participant separates from service by reason
of the attainment of normal retirement age under the plan, death,
or disability, the distribution of such portion of the Participant's
account balance will begin not later than one year after the close
of the Plan Year in which such event occurs unless the Participant
otherwise elects under the provisions of the plan other than this
Section 8.2.
(ii) If the Participant separates from service for any
reason other than those enumerated in paragraph (i) above, and is
not reemployed by the Employer at the end of the fifth Plan Year
following the Plan Year of such separation from service,
distribution of such portion of the Participant's account balance
will begin not later than one year after the close of the fifth Plan
Year following the Plan Year in which the Participant separated
from service unless the Participant otherwise elects under the
provisions of this plan other than this Section 8.2.
(iii) If the Participant separates from service for a reason
other than those described in paragraph (i) above, and is employed
by the Employer as of the last day of the fifth Plan Year following
the Plan Year of such separation from service, distribution to the
Participant, prior to any subsequent separation from service, shall
be in accordance with terms of the plan other than this Section 8.2.
For purposes of this Section 8.2, Employer Securities shall not include
any Employer Securities acquired with the proceeds of a loan described
in Section 404(a)(9) of the Code until the close of the Plan Year in which
such loan is repaid in full.
8.2(c) Period for Payment. Distributions required under Section
8.2 shall be made in substantially equal annual payments over a period of
five years unless the Participant otherwise elects under provisions of this
plan other than this Section 8.2. In no event shall such distribution
period exceed the period permitted under Section 401(a)(9) of the Code.
8.2(d) Determination of Amount Subject to Special Distribution
and Payment Requirements. The portion of a Participant's account
balance attributable to Employer Securities which were acquired by the
plan after December 31, 1986, shall be determined by multiplying the
number of shares of such securities held in the account by a fraction, the
numerator of which is the number of shares acquired by the plan after
December 31, 1986, and allocated to Participants' accounts (not to exceed
the number of shares held by the plan on the date of distribution) and the
denominator of which is the total number of such shares held by the plan
at the date of distribution.
8.3 Put Option Requirements.
8.3(a) In General. This Section 8.3 shall apply to distributions
of Employer Securities which acquired after December 31, 1986, by
TCESOPs, ESOPs, and stock bonus plans and shall not eliminate any time
or form of distribution available under the plan prior to adoption of this
amendment.
8.3(b) Put Option Payment. Notwithstanding any other provisions
of the plan regarding a Participant's right to exercise a put option, in
the case of a distribution of Employer Securities which are not readily
tradeable on an established securities market, the plan shall provide the
Participant with a put option that complies with the requirements of
Section 409(h) of the Code. Such put option shall provide that if an
employee exercises the put option, the Employer, or the plan if the plan
so elects, shall repurchase the Employer Securities as follows:
(i) If the distribution constitutes a Total Distribution,
payment of the fair market value of a Participant's account balance
shall be made in five substantially equal annual payments. The
first installment shall be paid not later than 30 days after the
Participant exercises the put option. The plan will pay a
reasonable rate of interest and provide adequate security on
amounts not paid after 30 days.
(ii) If the distribution does not constitute a Total
Distribution, the plan shall pay the Participant an amount equal to
the fair market value of the Employer Securities repurchased no
later than 30 days after the Participant exercises the put option.
8.4 Diversification of Investments.
8.4(a) In General. This section 8.4 shall apply to TCESOPs and
ESOPs.
8.4(b) Election by Qualified Participant. Each Qualified
Participant shall be permitted to direct the plan as to the investment of
25 percent of the value of the Participant's account balance attributable
to Employer Securities which were acquired by the plan after December 31,
1986, within 90 days after the last day of each Plan Year during the
Participant's Qualified Election Period. Within 90 days after the close
of the last Plan Year in the Participant's Qualified Election Period, a
Qualified Participant may direct the plan as to the investment of 50
percent of the value of such account balance.
8.4(c) Method of Directing Investment. The Participant's
direction shall be provided the Plan Administrator in writing; shall be
effective no later than 180 days after the close of the Plan Year to which
the direction applies; and shall specify which, if any, of the options set
forth in Section 8.4(d) the Participant selects.
8.4(d) Investment Options.
8.4(d)(i) At the election of the Qualified Participant, the plan
shall distribute (notwithstanding section 409(d) of the Code) the portion
of the Participant's account that is covered by the election within 90 days
after the last day of the period during which the election can be made.
Such distribution shall be subject to such requirements of the plan
concerning put options as would otherwise apply to a distribution of
Employer Securities from the plan. This Section 8.4(d)(i) shall apply
notwithstanding any other provision of the plan other than such provisions
as require the consent of the Participant and the Participant's spouse to a
distribution with a present value in excess of $3500. If the Participant
and the Participant's spouse do not consent, such amount shall be retained
in this plan.
8.4(d)(ii) In lieu of distribution under Section 8.4(d)(i), the
Qualified Participant who has the right to receive a cash distribution
under Section 8.4(d)(i) may direct the plan to transfer the portion of the
Participant's account that is covered by the election to another qualified
plan of the Employer which accepts such transfers, provided that such
plan permits employee-directed investment and does not invest in
Employer Securities to a substantial degree. Such transfer shall be made
no later that ninety days after the last day of the period during which the
election can be made.
8.4(d)(iii) If the Plan is a TCESOP, any distribution or transfer
under this Section 8.4(d) shall be made first from Employer Securities
allocated to the Participant's account at least 84 months before the month
in which the distribution or transfer occurs.
8.4(e) Determination of Amount Subject to Diversification
Requirements. The portion of a Participant's account balance attributable
to Employer Securities which were acquired by the plan after December
31, 1986, shall be determined by multiplying the number of shares of
such securities held in the account by a fraction, the numerator of which
is the number of shares acquired by the plan after December 31, 1986,
and allocated to Participants' accounts (not to exceed the number of shares
held by the plan on the date the individual becomes a Qualified
Participant) and the denominator of which is the total number of shares
held by the plan at the date the individual becomes a Qualified
Participant.
8.5 Voting Rights of Participants.
8.5(a) In General. This Section 8.5 shall apply to TCESOPs,
ESOPs, and stock bonus plans which are required to comply with Section
409(e) of the Code through the operation of Section 401(a)(22) of the
Code.
8.5(b) Issues Where Pass-Through Required. Notwithstanding any
other provision of the plan, if the plan has nay class of securities which
is not a registrationtype class of securities (as defined in Section
409(e)(4) of the Code), a Participant shall be entitled to direct the
trustee as to the manner in which voting rights will be exercised with
respect to any corporate matter which involves the voting of such shares
allocated to the Participant's account with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all
assets of a trade or business, or such similar transaction as may be
prescribed in Treasury regulations.
8.6 Independent Appraiser.
8.6(a) In General. This Section 8.6 shall apply to TCESOPs and
ESOPs.
8.6(b) Independent Appraisals. All valuations of Employer
Securities which are not readily tradeable on an established securities
market with respect to activities carried on by the plan shall be made by
an independent appraiser meeting requirements similar to those contained
in Treasury regulations under Section 170(a)(1) of the Code.
SECTION IX: DETERMINATION OF TOP-HEAVY STATUS
Solely for the purpose of determining if the plan, or any other plan
included in a required aggregation group of which this plan is a part, is
top-heavy (within the meaning of Section 416(g) of the Code) the accrued
benefit of an Employee other than a key employee (within the meaning of
Section 416(i)(l) of the Code) shall be determined under (a) the method,
if any, that uniformly applies for accrual purposes under all plans
maintained by the Affiliated Employers, or (b) if there is no such method,
as if such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section 411(b)(l)(C) of the
Code.
SECTION X: NOT REQUIRED OR ADOPTED FOR THIS PLAN
SECTION XI: DISTRIBUTION OF EXCESS CONTRIBUTIONS
11.1 In General. Notwithstanding any other provision of the
plan, Excess Contributions (and any Matching Contributions which were
made by reason of such Excess Contributions) and income allocable
thereto shall be distributed no later than the last day of each plan year
beginning after December 31, 1987, to Participants on whose behalf such
Excess Contributions were made for the preceding Plan Year.
11.2 Excess Contributions. For purposes of this amendment,
"Excess Contributions" shall mean the amount described in Section
401(k)(8)(B) of the Code.
11.3 Determination of Income. The income allocable to Excess
Contributions shall be determined by multiplying income allocable to the
Participant's Elective Deferrals for the Plan Year by a fraction, the
numerator of which is the Excess Contributions on behalf of the
Participant for the preceding Plan Year and the denominator of which is
the Participant's account balances attributable to Elective Deferrals on
the last day of the preceding Plan Year. The income allocable to the
Matching Contributions made by reason of such Excess Contributions
shall be determined by multiplying income allocable to the Participant's
Matching Contributions for the Plan Year by a fraction, the numerator of
which is the Matching Contributions on behalf of the Participant for the
preceding Plan Year and the denominator of which is the Participant's
account balances attributable to Matching Contributions on the last day of
the preceding Plan Year.
11.4 Maximum Distribution Amount. The Excess Contributions
(and the Matching Contributions related thereto) which would otherwise
be distributed to the Participant shall be adjusted for income; the Excess
Contributions shall be reduced, in accordance with regulations, by the
amount of Excess Deferrals distributed to the Participant; and the Excess
Contributions (and the Matching Contributions related thereto) shall, if
there is a loss allocable to the Excess Contributions (or such Matching
Contributions), in no event be less than the lesser of the Participant's
accounts under the plan or the Participant's Elective Deferrals (or
Matching Contributions) for the Plan Year.
SECTION XII: DISTRIBUTION OF EXCESS AGGREGATE
CONTRIBUTIONS
12.1 In General. Excess Aggregate Contributions and income
allocable thereto shall be forfeited, if otherwise forfeitable under the
terms of this Plan, or if not forfeitable, distributed no later than the
last day of each Plan Year beginning after December 31, 1987, to
Participants to whose accounts Employee Contributions or Matching
Contributions were allocated for the preceding Plan Year.
12.2 Excess Aggregate Contributions. For purposes of this
amendment, "Excess Aggregate Contributions" shall mean the amount
described in Section 401(m)(6)(B) of the Code.
12.3 Determination of Income. The income allocable to Excess
Aggregate Contributions shall be determined by multiplying the income
allocable to the Participant's Employee Contributions and Matching
Employer Contributions for the Plan Year by a fraction, the numerator of
which is the Excess Aggregate Contributions on behalf of the Participant
for the preceding Plan Year and the denominator of which is the sum of
the Participant's account balances attributable to Employee Contributions
and Matching Employer Contributions on the last day of the preceding
Plan Year.
12.4 Maximum Distribution Amount. The Excess Aggregate
Contributions to be distributed to a Participant shall be adjusted for
income, and, if there is a loss allocable to the Excess Aggregate
Contribution, shall in no event be less than the lesser of the Partici-
pant's account under the plan or the Participant's Employer Contributions
and Matching Contributions for the Plan Year.
12.5 Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be distributed from the Participant's
Employee Contribution account, and forfeited if otherwise forfeitable
under the terms of the plan (or, if not forfeitable, distributed) from the
Participant's Matching Contribution account in proportion to the
Participant's Employee Contributions and Matching Contributions for the
Plan Year.
12.6 Allocation of Forfeitures.
12.6(a) Amounts forfeited by Highly Compensated Employees
under this Section XII shall be:
(i) Treated as Annual Additions under Section 4.1(a) of this
amendment and either;
(ii) Applied to reduce employer contributions if forfeitures of
Matching Contributions under the Plan are applied to
reduce employer contributions; or
(iii) Allocated, after all other forfeitures under the plan, and
subject to Section 12.6(b) of this amendment, to the same
Participants and in the same manner as such other
forfeitures of Matching Contributions, are allocated to
other Participants under the Plan.
12.6(b) Notwithstanding the foregoing, no forfeitures
arising under this Section XII shall be allocated to the account of any
Highly Compensated Employee.
SECTION XIII: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XIV: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XV: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XVI: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XVII: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XVIII: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XIX: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
SECTION XX: NOT REQUIRED OR ADOPTED FOR THIS
PLAN
EXHIBIT C
JANUARY 1, 1987 THROUGH DECEMBER 31, 1988
PROVISIONS OF MERGED CAMPEAU CALIFORNIA PLAN
This Exhibit C sets forth the provisions of The Campeau Corporation
California Retirement Plan (referred to as the "Campeau California Plan"
throughout this Exhibit C) as in effect from January 1, 1987 through December
31, 1988, and this Exhibit C is no longer effective after December 31, 1988
(except to the extent the provisions of the Campeau California Plan as set forth
herein are incorporated by reference into Section 16 of this Plan). The Campeau
California Plan is merged into this Plan effective as of January 1, 1989.
Exhibit C is composed of three documents.
The first of such documents is a working copy of the Campeau California
Plan as effective immediately prior to January 1, 1987. A prior determination
of the Internal Revenue Service that such pre-1987 Campeau California Plan
qualified as a tax-favored plan under Section 401(a) of the Code was previously
received by the sponsor of such plan.
The second of such documents is a technical amendment to the Plan to
incorporate by reference the provisions of Section 401(a)(9) of the Code into
the Campeau California Plan effective as of January 1, 1987.
The third of such documents is an amendment to the Campeau California
Plan, taken from the provisions of Model Amendment IV as set forth in Notice
87-2 of the Internal Revenue Service, to make sure the Campeau California Plan
complies with the requirements of the Tax Reform Act of 1986 during the period
from January 1, 1987 through December 31, 1988.
THE CAMPEAU CORPORATION CALIFORNIA RETIREMENT PLAN
TABLE OF CONTENTS
ARTICLE CONTENT PAGE
I Definitions 1
II Service 10
III Eligibility, Enrollment and Participation 14
IV Contributions 16
IV-A Limitations on Allocations 22
V Annuity Contract and Participant's Account 30
VI Distribution of Benefits 32
VII Retirement Benefits 37
VIII Joint and Survivor Annuity Requirements 38
IX Termination of Employment 42
X Withdrawals 43
X-A Loans 45
XI Fiduciary Duties and Responsibilities 48
XII The Administrator 49
XIII Participants' Rights 51
XIV The Insurance Company 54
XV Amendment or Termination of the Plan 55
XVI Substitution of Plans 57
XVII Miscellaneous 58
XVIII Top Heavy Provisions 60
<PAGE>
ARTICLE I
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value
on any applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any
Participant who (a) performs duties as an Employee for the
Employer, and (b) is not an Inactive Participant.
1.3 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral
Percentage for the Highly Compensated Employee (top 1/3) and
all other Employees (lower 2/3) for a Plan Year is the
average of the ratios, calculated separately for each
Employee in such group, of the amounts included in the
Deferral Percentage Test during the Plan Year for each such
Employee to his Compensation for such Plan Year.
For purposes of the preceding sentence, Compensation shall
be the Participant's Compensation before the deferral in
Compensation pursuant to a Salary Deferral Agreement.
1.4 ANNUITY CONTRACT. The term Annuity Contract means the group
annuity contract issued by the Insurance Company to the
Employer to fund the benefits provided under this Plan, as
such contract may hereafter be amended from time to time in
accordance with the terms thereof.
1.5 BENEFICIARY. The Participant's spouse is the designated
beneficiary of the Participant's entire Vested Interest.
However, each Participant shall have the right to designate
another Beneficiary and to specify the form of death benefit
the Beneficiary is to receive, subject to the spousal
consent requirements of the "Qualified Election" provisions
of Article VIII, Joint and Survivor Annuity Requirements.
The Participant may change the Beneficiary and/or the form
of death benefit at any time, subject to appropriate spousal
consent.
If any distribution hereunder is made to a Beneficiary in
the form of an annuity, then such beneficiary shall also
have the right to designate a Beneficiary and to change that
Beneficiary from time to time. As an alternative to
receiving the benefit in the form of an annuity, the
Beneficiary may elect to receive a single cash payment or
any other form of payment provided for in the Plan.
<PAGE>
If a Beneficiary has not been designated, or if a
Beneficiary designation or change of Beneficiary
designation does not include the appropriate spousal
consent, or if no designated Beneficiary survives the
Participant, the Participant's entire Vested Interest shall
be distributed to the Participant's spouse, if living;
otherwise in equal shares to any surviving children of the
Participant. In the event none of the above named
individuals survives the Participant, the Participant's
entire Vested Interest shall be paid to the executor or
administrator of the Participant's estate.
1.6 BOARD OF DIRECTORS. The Term Board of Directors means the
Board of Directors of Campeau Corporation California.
1.7 COMPENSATION. The term Compensation means the total
earnings paid by the Employer to the Participant for the
period specified in the Plan including the deferral in
Compensation pursuant to a Salary Deferral Agreement.
1.8 CONTRIBUTION PERIOD. The term Contribution Period means
that regular period specified by the Employer for which
Employer Contributions, Salary Deferral Contributions and
Voluntary Contributions shall be made. No change in the
Contribution Period may be made except as of a Renewal Date.
1.9 DEFERRAL PERCENTAGE TEST. The term Deferral Percentage Test
means the deferral percentage tests set forth in
Section 401(k) of the Internal Revenue Code, as it may be
amended from time to time. All contributions made pursuant
to Salary Deferral Agreements shall be included in the
Deferral Percentage Test. At the Employer's discretion, the
Employer Contribution pursuant to Section 4.2(b) may be
designated as a 401(k) contribution as defined under IRC
Section 401(k), and therefore included in the Deferral
Percentage Test, or as a 401(a) contribution as defined
under IRC Section 401(a), and therefore not included in the
Deferral Percentage Test.
The Deferral Percentage Text is satisfied for a Plan Year if
one of the following two tests is met for such Plan Year:
(a) The Actual Deferral Percentage for the eligible Highly
Compensated Employees (top 1/3) is not more than the
Actual Deferral Percentage of all other eligible
Employees (lower 2/3) multiplied by 1.5.
<PAGE>
(b) The excess of the Actual Deferral Percentage for the
eligible Highly Compensated Employees (top 1/3) over
the Actual Deferral Percentage of all other eligible
Employes (lower 2/3) is not more than 3 percentage
points, and the Actual Deferral Percentage for the top
1/3 is not more than the Actual Deferral Percentage of
the lower 2/3 multiplied by 2.5.
1.10 DISABILITY. The term Disability means a Participant's
incapacity to engage in any substantial gainful activity
because of a medically determinable physical or mental
impairment which can be expected to result in death, or to
be of long, continued and indefinite duration. Such
determination of Disability shall be made by the
Administrator with the advice of competent medical
authority. All Participants in similar circumstances will
be treated alike.
1.11 DISABILITY RETIREMENT DATE. The term Disability Retirement
Date means the first day of the month after the
Administrator has determined that a Participant's incapacity
is a Disability.
1.12 EARLY RETIREMENT DATE. The term Early Retirement Date means
the first day of the month coinciding with or next following
the date a Participant is separated from Service with the
Employer on or after his 55th birthday for any reason other
than death or Disability, provided that on such date the
Participant has not attained his Normal Retirement Age.
1.13 EFFECTIVE DATE. The term Effective Date means January 1,
1986.
1.14 EMPLOYEE. The term Employee means any individual, other
than a sole-proprietor or partner, in the employ of the
Employer.
In addition, all individuals required to be considered
Employees of the Employer under Internal Revenue Code
Section 414(n) will be treated as Employees.
Any leased Employee shall be treated as an Employee of the
recipient Employer; however, contributions or benefits
provided by the leasing organization which are attributable
to services performed for the recipient Employer shall be
treated as provided by the recipient employer. The
preceding sentence shall not apply to any leased employee if
such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate
of at least 7-1/2 percent of compensation, (2) immediate
participation, and (3) full and immediate vesting. For
purposes of this paragraph, the term "leased employee" means
any person[other than an Employee of the recipient] who,
pursuant to an agreement between the recipient and any other
person ["leasing organization"], has performed services for
the recipient [or for the Employer and related persons
determined in accordance with Internal Revenue Code
Section 414(n)(6)] on a substantially full-time basis for a
period of at least one year and such services are of a type
historically performed by employees in the business field of
the recipient Employer.
1.15 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions
means the amount for any Plan Year which is equal to his
Voluntary Contributions.
1.16 EMPLOYER. The term Employer means Campeau Corporation
California and any company which is included in the
controlled group of corporations as defined in
Section 414(b) of the Internal Revenue Code of 1986 within
which Campeau Corporation California is also included and
which adopts the Plan with the approval of the Board of
Directors. In the case of a group of employers which
constitutes a controlled group of corporations [as defined
in Internal Revenue Code 414(b) as modified by
Section 415(h)] or which constitutes trades or business
(whether or not incorporated) which are under common control
[as defined in Section 414(c) as modified by Section 415(h)]
or which constitutes an affiliated service group [as defined
in Section 414(m)], all such employers shall be considered a
single employer for purposes of participation and vesting.
1.17 ENTRY DATE. The term Entry Date means either the Effective
Date of the January 1 or July 1 thereafter when an Employee
who has fulfilled the eligibility requirements commences
participation in the Plan.
Any employee who has satisfied the maximum eligibility
requirements permissible under ERISA may commence
participation in this Plan no later than the first day of
the first Plan Year beginning after the date on which the
Employee satisfied such requirements, provided that the
Employee has not separated from the Service of the Employer.
If an Employee is not in the active Service of the Employer
as of his initial Entry Date, his subsequent Entry Date
shall be the date he returns to the active Service of the
Employer, provided he still meets the eligibility
requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent
Entry Date shall be the applicable Entry Date as specified
above when the Employee actually enrolls as a Participant.
1.18 ERISA. The term ERISA means the Employee Retirement Income
Security Act of 1974 (PL 93-406) as it may be amended from
time to time, and any regulations issued pursuant thereto as
such Act and such regulations affect this Plan.
1.19 FIDUCIARY. The term Fiduciary means any, or all, of the
following, as applicable:
(a) any Person who exercises any discretionary authority or
control respecting the management of the Plan or its
assets;
(b) any Person who renders investment advice for a fee or
other compensation, direct or indirect, respecting any
monies or other property of the Plan or has authority
or responsibility to do so;
(c) any Person who has discretionary authority or
responsibility in the administration of the Plan; and
(d) any Person who has been designated by a Named Fiduciary
pursuant to authority granted by the Plan, who acts to
carry out a fiduciary responsibility, subject to any
exceptions granted directly or indirectly by ERISA.
1.20 FIXED ANNUITY. The term Fixed Annuity means an annuity
providing a series of payments that are payable in specified
dollar amounts.
1.21 FORFEITURE. The term Forfeiture means the amount, if any,
by which the value of a Participant's Account exceeds his
Vested Interest upon the occurrence of five consecutive
1-Year Breaks in Service following such Participant's
Termination of Employment.
1.22 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated
Employee means any eligible Employee who receives more
Compensation than two-thirds of all other eligible
Employees.
1.23 INACTIVE PARTICIPANT. The term Inactive Participant means
any Participant who does not currently meet the requirements
to be an Active Participant due to a suspension of the
performance of duties for the Employer.
In addition, a Participant who ceases to meet the
eligibility requirements in accordance with Section 3.1
shall be considered an Inactive Participant.
1.24 INSURANCE COMPANY. The term Insurance Company means
Connecticut General Life Insurance Company, a legal reserve
life insurance company of Hartford, Connecticut.
1.25 JOINT AND SURVIVOR ANNUITY. The term Joint and Survivor
Annuity means an annuity for the life of the Participant
with a survivor annuity for the life of the Participant's
spouse which is not less than one-half, nor greater than,
the amount of the annuity payable during the joint lives of
the Participant and the Participant's spouse. The Joint and
Survivor Annuity will be the amount of benefit which can be
purchased with the Participant's account balance.
1.26 LATE RETIREMENT DATE. The term Late Retirement Date means
the first day of the month coinciding with or next following
the date a Participant is separated from Service with the
Employer after his Normal Retirement Age, for any reason
other than death.
1.27 NAMED FIDUCIARY. The term Named Fiduciary means the
Administrator and any other Fiduciary designated in writing
by the Employer, and any successor thereto.
1.28 NORMAL RETIREMENT AGE. The term Normal Retirement Age means
the date the Participant attains age 65.
1.29 NORMAL RETIREMENT DATE. The term Normal Retirement Date
means the first day of the month coinciding with or next
following the date a Participant attains his Normal
Retirement Age.
1.30 PARTICIPANT. The term Participant means any Employee of the
Employer, who is or becomes eligible to participate under
this Plan in accordance with its provisions and shall
include an Active Participant and an Inactive Participant.
1.31 PARTICIPANT'S ACCOUNT. The term Participant's Account means
each Participant's individual accounts maintained under the
Annuity Contract by the Insurance Company in accordance with
the terms of this Plan and the Annuity Contract, including:
an account for Employer Contributions and earnings thereon;
and account for Salary Deferral Contributions and earnings
thereon; an account for Employee Contributions and earnings
thereon; and an account for Rollover Contributions, if any,
and earnings thereon. Each Participant's Account shall be
equal to the sum of the Participant's Guaranteed Long Term
Account, if any, the Participant's Variable Account, if any,
and the Participant's Guaranteed Short Term Account, if any.
1.32 PARTICIPANT'S GUARANTEED LONG TERM ACCOUNT. The term
Participant's Guaranteed Long Term Account means that
portion, if any, of the Participant's Account which is
invested in the Insurance Company's general portfolio. The
amount in the Guaranteed Long Term Account is invested
primarily in bonds, mortgages and real estate. Such
Participant's Guaranteed Long Term Account shall be valued
daily and credited with interest monthly in accordance with
the terms of the Annuity Contract.
1.33 PARTICIPANT'S GUARANTEED SHORT TERM ACCOUNT. The term
Participant's Guaranteed Short Term Account means that
portion, if any, of the Participant's Account which is
invested in the Insurance Company's Separate Account 80S
(SA-80S). Separate Account 80S may be invested in
short-term money market instruments having maturities
considered appropriate by Connecticut General. such
Participant's Guaranteed Short Term Account shall be valued
daily and credited with interest daily in accordance with
the terms of the Annuity Contract.
1.34 PARTICIPANT'S VARIABLE ACCOUNT. The term Participant's
Variable Account means that portion, if any, of the
Participant's Account which is invested in the Insurance
Company's Separate Account 3 (SA-3). Separate Account 3 is
invested primarily in common stocks. Such Participant's
Variable Account shall be valued on each date that the New
York Stock Exchange is open for unrestricted trading and the
Insurance Company is open to transact its normal business.
1.35 PERSON. The term Person means any natural person,
partnership, corporation, trust or estate.
1.36 PLAN. The term Plan means The Campeau Corporation
California Retirement Plan, the terms of which are set forth
herein as it may be amended from time to time.
1.37 PLAN ADMINISTRATOR. The terms Plan Administrator and
Administrator are used interchangeably throughout the Plan
and mean the Person or Persons designated by the Employer
and any successor(s) thereto. If more than one Person shall
be designated, the committee thus formed shall be known as
the Administrative Committee and all references in the Plan
to the Plan Administrator or Administrator shall be deemed
to apply to the Administrative Committee. The Plan
Administrator or Administrator shall signify in writing his
acceptance of his responsibility as a Named Fiduciary.
1.38 PLAN YEAR. The term Plan Year means the twelve-month period
commencing on January 1 and ending the following
December 31.
1.39 RENEWAL DATE. The term Renewal Date means each January 1 or
July 1 as of which certain determinations, transactions, and
calculations shall be made, as more fully indicated in the
body of the Plan.
1.40 SALARY DEFERRAL AGREEMENT. The term Salary Deferral
Agreement means an agreement between a Participant and the
Employer to defer the Participant's Compensation for the
purpose of making contributions to the Plan.
1.41 SEPARATE ACCOUNT. The term Separate Account means either
Separate Account 3 (Variable Account or SA-3) or Separate
Account 80S (Guaranteed Short Term Account or SA-80S) which
are pooled separate accounts maintained by the Insurance
Company with respect to a portion of its assets and which
are included in the Annuity Contract.
1.42 SERIOUS FINANCIAL HARDSHIP. The term Serious Financial
Hardship means the occurrence of an immediate and heavy
financial need of the Participant. A distribution based
upon financial hardship cannot exceed the amount required to
meet the immediate financial need created by the hardship
and not reasonably available from other resources of the
Participant.
1.43 TERMINATION OF EMPLOYMENT. The term Termination of
Employment means a severance of the Employer-Employee
relationship which occurs prior to a Participant's Normal
Retirement Age for any reason other than Early Retirement,
Disability, or death.
1.44 VARIABLE ANNUITY. The term Variable Annuity means an
annuity providing a series of payments that increase or
decrease to reflect changes in investment performance of the
underlying portfolio.
1.45 VESTED INTEREST. The term Vested Interest on any date means
the nonforfeitable right to an immediate or deferred benefit
in the amount which is equal to the sum of (a) and (b)
below:
(a) The value on that date of that portion of the
Participant's Account that is attributable to Employee
Contributions, Salary Deferral Contributions, Rollover
Contributions and Employer Contributions designated as
401(k) contributions pursuant to Section 4.2(b).
(b) The value on that date of that portion of the
Participant's Account that is attributable to and
derived from Employer Contributions not designated as
401(k) contributions (and Forfeitures, if any)
multiplied by his Vesting Percentage determined on the
date applicable.
1.46 VESTING PERCENTAGE. The term Vesting Percentage means the
Participant's nonforfeitable interest in Employer
Contributions credited to his account that are not
designated as 401(k) contributions plus the earnings thereon
computed as of the date of determining such percentage
because of the occurrence of some event in accordance with
the following schedule based on Years of Service with the
Employer:
Years of Service Vesting Percentage
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
Notwithstanding anything contained in the Plan to the
contrary, a Participant's Vesting Percentage shall be 100%
in the event he dies while in the employ of an employer.
1.47 VOLUNTARY CONTRIBUTIONS. The term Voluntary Contributions
means Post-Tax Contributions paid by the Participant as
further defined in Article IV.
ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the
Employer as an Employee. For purposes of determining
Service, employment with any company which is under common
control with the Employer as specified in Section 414 of the
Internal Revenue Code shall be treated as employment with
the Employer.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account
of a leave of absence authorized by the Employer pursuant to
the Employer's established leave policy will be counted as
employment with the Employer provided that such leave of
absence is of not more than two years' duration. Absence
from employment on account of active duty with the Armed
Forces of the United States will be counted as employment
with the Employer. If the Employee does not return to
active employment with the Employer, his Service will be
deemed to have ceased on the date the Administrator receives
notice that such Employee will not return to active Service
of the Employer. The Employer's leave policy shall be
applied in a uniform and nondiscriminatory manner to all
Participants under similar circumstances.
2.3 HOUR OF SERVICE. The term Hour of Service means a period of
Service during which an Employee shall be credited with one
Hour of Service as described in (a), (b), (c) and (d) below:
(a) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by the
Employer for the performance of duties. These hours
shall be credited to the Employee for the computation
period or periods in which the duties are performed;
and
(b) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by the
Employer for reasons (such as vacation, sickness or
disability) other than for the performance of duties.
Hours under this subsection shall be calculated and
credited pursuant to section 2530.200b-2 of the
Department of Labor Regulations which are incorporated
herein by this reference; and
(c) Each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or
agreed to by the Employer. These hours shall be
credited to the Employee for the computation period or
periods to which the award or agreement pertains rather
than the computation period in which the award,
agreement or payment is made; and
(d) Each hour for which an Employee is on an authorized
unpaid leave (such as service with the Armed Forces,
jury duty, educational leave). These hours shall be
credited to the Employee for the computation period or
periods in which such authorized leave takes place.
However, no more than 501 hours within any Plan Year
shall be credited under this subparagraph (d).
Hours of Service will be credited for employment with other
members of an affiliated service group [under Internal
Revenue Code Section 414(m)], a controlled group of
corporations [under Internal Revenue Code Section 414(b)],
or a group of trades or businesses under common control
[under Internal Revenue Code Section 414(c)], of which the
adopting employer is a member. Hours of Service will also
be credited for any individual considered an Employee under
Internal Revenue Code Section 414(n).
Solely for purposes of determining whether a one-year Break
In Service, as defined in Section 2.4, for participation and
vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or
paternity reasons shall receive credit for the hours of
service which would otherwise have been credited to such
individual but for such absence, or in any case in which
such hours cannot be determined, 8 hours of service per day
of such absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the individual,
(2) by reason of a birth of a child of the individual,
(3) by reason of the placement of a child with the
individual in connection with the adoption of such child by
such individual, or (4) for purposes of caring for such
child for a period beginning immediately following such
birth or placement. The hours of service credited under
this paragraph shall be credited (1) in the computation
period in which the absence begins if the crediting is
necessary to prevent a break in service in that period, or
(2) in all other cases, in the following computation period.
2.4 1-YEAR BREAK IN SERVICE. Except as provided in
Section 2.6(a), the term 1-Year Break in Service means any
Plan Year during which an Employee fails to complete more
than 500 Hours of Service.
2.5 DETERMINING VESTING PERCENTAGE. Vesting credit shall be
given for each Year of Service except those periods
specified in Section 2.7.
If a Participant completes less than 1,000 Hours of Service
during a Plan Year while remaining in the Service of the
Employer, his Vesting Percentage shall not be increased for
such Plan Year. However, at such time as the Participant
again completes at least 1,000 Hours of Service in any
subsequent Plan Year, his Vesting Percentage shall then take
into account all Years of Service with the Employer except
those specified in Section 2.7.
If an individual who ceases to be an Employee and is
subsequently rehired as an Employee enrolls (or reenrolls)
in the Plan, upon his participation (or reparticipation) his
Vesting Percentage shall then take into account all Years of
Service except those specified in Section 2.7.
2.6 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive-month period during which an Employee has
completed at least 1,000 Hours of Service.
(a) Eligibility Computation Period. For purposes of
determining Years of Service and Breaks in Service for
eligibility, the 12-consecutive-month period shall
begin with the date on which an Employee's employment
commenced and, where additional periods are necessary,
succeeding anniversaries of his employment commencement
date. The employment commencement date is the date on
which the Employee first performs an Hour of Service
for the Employer maintaining the Plan.
The eligibility requirement specified in Article III
is, or includes, a fractional Year of Service. Such
requirement shall be met upon completion of the
appropriate number of months of Service, and an
Employee shall not be required to earn a specified
number of Hours of Service during this period.
(b) Vesting Computation Period. In computing Years of
Service and Breaks in Service for vesting, the
12-consecutive-month period shall be the Plan Year.
However, active participation as of the last day of the
Plan Year is not required in order for a Participant to
be credited with a Year of Service for vesting
purposes.
Service with a predecessor organization of the Employer
shall be treated as Service with the Employer for that
purpose of subsections (a) and (b) above in any case in
which the Employer maintains the Plan of such predecessor
organization.
For the purpose of subsection (b) above, if any Plan Year is
less than 12 consecutive months, the number of Hours of
Service required to accrue a Year of Service (or to incur a
1-Year Break in Service), in such short Plan Year, shall
bear the same ratio to 1,000 (or in the case of a Break in
Service, 500) as the number of days in the short Plan Year
bears to 365.
2.7 EXCLUDED YEARS OF SERVICE. In determining the Vesting
Percentage of an Employee, all Years of Service with the
Employer shall be taken into account, except Plan Years
during which a Participant did not complete at least 1,000
Hours of Service.
ARTICLE III
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each current Employee shall be eligible to
become a Participant immediately. Each future Employee
shall be eligible to become a Participant as of the Entry
Date thereafter when he first meets the following
requirements:
- 1/2 Year of Service;
- not in a collective bargaining unit unless the
bargaining agreement provides for coverage; and
- classified as a salaried Employee.
In any event, an Employee will be eligible to become a
Participant as of an Entry Date after he has completed a
Year of Service provided that he satisfies the requirements
described above (other than the requirement that he has
completed a 1/2 Year of Service).
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may
enroll as of his Entry Date by completing and delivering to
the Administrator an enrollment form and/or a Salary
Deferral Agreement. He will then become a Participant as of
his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who
ceases to be an Employee and is subsequently rehired as an
Employee, the following provisions shall apply in
determining his eligibility to again participate in the
Plan:
(a) If the Employee had met the eligibility requirements
specified in Section 3.1 prior to his separation from
employment, he shall become an Active Participant in
the Plan in accordance with Section 3.2 as of the date
he is re-employed.
(b) If the Employee had not met the eligibility
requirements specified in Section 3.1 prior to his
separation from employment, he shall be eligible to
participate in the Plan on the first Entry Date
following his fulfillment of such eligibility
requirements.
For purposes of this Subsection, all Years of Service with
the Employer, including any Years of Service prior to any
Breaks in Service, shall be taken into account.
3.4 In the event a Participant becomes ineligible to participate
because he is no longer a member of the eligible class of
Employees, such Employee shall participate immediately upon
his return to the eligible class of Employees.
In the event an Employee who is not a member of the eligible
class of Employees becomes a member of the eligible class,
such Employee shall participate immediately if such Employee
has satisfied the minimum Service requirement and would have
previously become a Participant had he been in the eligible
class.
<PAGE>
ARTICLE IV
CONTRIBUTIONS
4.1 OPTIONAL SALARY DEFERRAL CONTRIBUTIONS. Each Active
Participant may elect to enter into a written Salary
Deferral Agreement with the Employer in an amount equal to
not less than 4% nor more than 20% of Compensation for the
Contribution Period. In consideration of such agreement,
the Employer will make a contribution for each Contribution
Period on behalf of the Participant in an amount equal to
the total amount by which the Participant's Compensation
from the Employer was deferred during the Contribution
Period pursuant to the Salary Deferral Agreement then in
effect. Optional Salary Deferral Contributions shall be
paid by the Employer to the Insurance Company not less
frequently than monthly or four weekly, but in no event
later than 30 days following the end of the Plan Year.
Salary Deferral Agreements shall be governed by the
following provisions:
(a) Amounts contributed pursuant to a Salary Deferral
Agreement shall be one hundred percent (100%) vested
and non-forfeitable at all times.
(b) Amounts contributed pursuant to a Salary Deferral
Agreement shall count as Employer Contributions and
shall be subject to the limitations on allocations in
accordance with Article IV-A.
(c) A Salary Deferral Agreement may be changed by a
Participant twice during the Plan Year, as of any
Renewal Date by filing written notice thereof with the
Administrator at any time. Such notice shall be
effective, and the Salary Deferral Agreement shall be
changed as of any Renewal Date, which dates must be at
least fifteen days after such notice is filed.
(d) Should the Employer determine that the percentage
election made by Highly Compensated Employees may
violate Section 401(k) of the Internal Revenue Code,
then on such occasion, the Employer may require a pro
rata reduction of the amount deferred by the Highly
Compensated Employees to assure compliance with the
Internal Revenue Code.
(e) If the Employer changes or suspends its Salary Deferral
Agreements as described in subsection (d) above, then
the affected Participants shall continue to participate
in the Plan. When the situation which resulted in the
change of the Salary Deferral Agreements as described
in subsection (d) above ceases to exist, the Employer
shall reinstate the Salary Deferral Agreements to the
fullest extent possible for all affected Participants
in a nondiscriminatory manner.
4.2 EMPLOYER CONTRIBUTIONS. The Employer shall make an Employer
Contribution in accordance with the following:
(a) Salary Deferral Contributions. The Employer shall
contribute an amount equal to the total amount of
contributions agreed to be made by the Employer
pursuant to the Salary Deferral Agreements in effect.
The Employer Contribution pursuant to the preceding
sentence shall be paid to the Insurance Company not
less frequently than monthly or four weekly, but in no
event later than 30 days following the end of the Plan
Year.
(b) Matching Employer Contributions. The Employer shall
make an Employer Contribution in an amount equal to
$.75 for each $1.00 up to a maximum of $2,625 per
Participant per year by which a Participant defers his
Compensation in amounts up to 4% pursuant to a Salary
Deferral Agreement, whether or not he is a Participant
on the last day of the Contribution Period, subject to
the limitations on allocations in accordance with
Article IV-A. The Employer Contribution shall be paid
to the Insurance Company not less frequently than
monthly or four weekly.
The Employer reserves the right to make all or part of
the Matching Employer Contributions on a nonforfeitable
(100% vested) basis if he determines that such
Contribution is necessary to insure that the Deferral
Percentage Test is met.
Unless elected otherwise in accordance with the terms of the
Annuity Contract the Employer will contribute to the Plan
the amount necessary to pay the expense charges and
administration charges described in the Annuity Contract.
Compensation for a Participant shall mean Compensation
earned during the period he was an Active Participant.
In addition to the Employer Contribution as determined in
Section 4.2(b) the Employer Contribution shall also include
any Forfeitures available for reallocation in accordance
with Section 9.3.
4.3 CREDITING OF SALARY DEFERRAL AND EMPLOYER CONTRIBUTIONS.
The Salary Deferral Contributions and the Employer
Contributions, (and any Forfeitures available for
reallocation in accordance with Section 9.3) shall be
credited to the Participant Account of each Participant for
whom such Contributions are made, in accordance with the
provisions of Article V.
4.4 ROLLOVER CONTRIBUTIONS. With the written permission of the
Plan Administrator and without regard to the limitations
imposed under Article IV-A, the Employer may receive, on
behalf of a Participant, Rollover Contributions
representing all or part of the entire amount of:
(a) any distribution from a terminated pension or profit
sharing plan meeting the requirements of Internal
Revenue Code Section 401(a); or
(b) any lump-sum distribution received by a Participant
from a pension or profit-sharing plan meeting the
requirements of Internal Revenue Code Section 401(a).
Rollover Contributions must be received from the Participant
within 60 days of his receipt of the funds either directly
from the pension or profit-sharing plan described above or
through the medium of an Individual Retirement Account.
In addition, Rollover Contributions may only include amounts
attributable to employer contributions and earnings thereon,
earnings on employee contributions, and employee
contributions which were eligible for a tax deduction under
Internal Revenue Code Section 219 and earnings thereon.
Rollover Contributions may be invested in any manner
authorized under the provisions of this Plan.
TRANSFERS. Also with the written permission of the Plan
Administrator and without regard to the limitations imposed
under Article IV-A, the Employer may receive, directly from
a terminated pension or profit-sharing plan meeting the
requirements of Internal Revenue Code Section 401(a), all or
part of the entire amount distributable on behalf of a
Participant from such plan. Likewise, the Employer may
receive transfers representing the assets of any predecessor
plan.
Transfers may be invested in any manner authorized under the
provisions of this Plan.
4.5 PARTICIPANT POST-TAX CONTRIBUTIONS. Each Active Participant
who has entered into a Salary Deferral Agreement may elect
to make periodic post-tax contributions under the Plan by
completing and delivering to the Administrator a payroll
deduction order. An Active Participant may elect to make
Post-Tax Contributions as of his Entry Date or as of any
Renewal Date thereafter, and may designate an amount equal
to a percentage (not more than 10%) of his compensation for
the Contribution Period as his Post-Tax Contribution under
the Plan. Thirty days before each Renewal Date, each Active
Participant may designate a new permissible amount (not more
than 10%) of his Compensation for the Contribution Period as
his Post-Tax Contribution under the Plan. Such
redesignation shall be made as if it were an original
designation and shall be effective as of such Renewal Date.
Post-Tax Contributions shall be deducted by the Employer
from the Participant's earnings while he has a payroll
deduction order in effect and shall be paid by the Employer
to the Insurance Company not less frequently than monthly or
four weekly.
Each Participant's Post-Tax Contributions to all qualified
plans of the Employer shall not exceed 10% of said
Participant's aggregate Compensation computed from his
Entry Date.
4.6 ADDITIONAL POST-TAX CONTRIBUTIONS. An Active Participant
may elect to make an additional Post-Tax Contribution in a
lump sum. Such additional Post-Tax Contributions may be
made (1) as of the Effective Date; or (2) as of any date
which is 30 days before such Renewal Date, in an amount up
to, but not in excess of, the difference between (a) 10% of
the aggregate of his Compensation while an Active
Participant under the Plan, and (b) the aggregate of his
Post-Tax Contributions made under the Plan prior to such
date.
Additional Post-Tax Contributions shall be paid by the
Employer to the Insurance Company within thirty days after
the date such Post-Tax Contribution is made by the
Participant. Additional Post-Tax Contributions shall be
considered Post-Tax Contributions for all other purposes of
the Plan and shall be subject to the terms thereof.
4.7 CREDITING POST-TAX CONTRIBUTIONS. Each Participant's
Post-Tax Contributions, if any, shall be credited to his
Participant's Account in accordance with the provisions of
Article V.
4.8 SUSPENSION OF SALARY DEFERRAL AGREEMENTS. The following
provisions shall apply with respect to suspension of Salary
Deferral Agreements.
(a) Elective Suspension. An Active Participant may elect
to suspend his Salary Deferral Agreement for a minimum
of three months by filing a written notice thereof with
the Administrator at any time. Such notice shall be
effective, and the Salary Deferral Agreement shall be
suspended, on the date specified in such notice, which
date must be at least fifteen days after such notice is
filed. The notice shall specify the period for which
such suspension shall be effective. Such period may
extend indefinitely.
(b) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence
or military leave shall have his Salary Deferral
Agreement suspended during such leave. Such suspension
of Contributions shall be effective on the date payment
of Compensation by the Employer to him ceases, and
shall remain in effect until payment of Compensation is
resumed.
(c) Non-Elective Suspension. An Active Participant who
ceases to meet the eligibility requirements as
specified in Section 3.1 but who remains in the employ
of the Employer, shall have his Salary Deferral
Agreement suspended, effective as of the date he ceases
to meet the eligibility requirements. Such suspension
shall remain in effect until he again meets such
eligibility requirements.
On any Renewal Date following the expiration of the
suspension period described in (a), (b) or (c) above, the
Participant's Salary Deferral Agreement shall automatically
become effective again and such applicable contributions
shall be resumed on behalf of the Participant.
4.9 SUSPENSION OF POST-TAX CONTRIBUTIONS. The following
provisions shall apply with respect to suspension of
Post-Tax Contributions. In the event that a Participant
suspends his Salary Deferral Agreement, he shall
automatically have his Post-Tax Contributions suspended for
the same period of time.
(a) Elective Suspension. An Active Participant may elect
to suspend his payroll deduction order for Post-Tax
Contributions for a minimum of three months by filing a
written notice thereof with the Administrator at any
time. Such notice shall be effective, and the Post-Tax
Contributions shall be suspended, on the date specified
in such notice, which date must be at least fifteen
days after such notice is filed. The notice shall
specify the period for which such suspension shall be
effective. Such period may extend indefinitely.
(b) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence
or military leave shall have his payroll deduction
order for Post-Tax Contributions suspended during such
leave. Such suspension of Contributions shall be
effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect
until payment of Compensation is resumed.
(c) Non-Elective Suspension. An Active Participant who
ceases to meet the eligibility requirements as
specified in Section 3.1 but who remains in the employ
of the Employer, shall have his payroll deduction order
for Post-Tax Contributions suspended, effective as of
the date he ceases to meet the eligibility
requirements. Such suspension shall remain in effect
until he again meets such eligibility requirements.
On any Renewal Date following the expiration of the
suspension period described in (a), (b) or (c) above, the
Participant's payroll deduction order for Post-Tax
Contributions shall automatically become effective again and
the Participant shall resume making Post-Tax Contributions.
ARTICLE IV-A
LIMITATIONS ON ALLOCATIONS
4A.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following
definitions are atypical terms which refer only to terms
used in the Limitation on Allocations sections of this
Article IV-A.
(a) Annual Additions. The term Annual Additions shall mean
the sum of the following amount allocated on behalf of
a Participant for a Limitation Year:
(i) all Employer Contributions and Contributions made
pursuant to a Salary Deferral Agreement, and
(ii) all Forfeitures, and
(iii) the lessor of (1) one-half of all Employee
Contributions, or (2) the amount of all Employee
Contributions in excess of 6 percent of such
Participant's actual Compensation.
For the purposes of this Article, Excess Amounts
reapplied to reduce Employer Contributions under
Section 4A.2(d) shall also be included as Annual
Additions.
Amounts allocated to an individual medical account, as
defined in Internal Revenue Code Section 415(l)(l),
which is part of a defined benefit plan maintained by
the Employer, are treated as Annual Additions to a
defined contribution plan. Also, amounts derived from
contributions paid or accrued attributable to
post-retirement medical benefits allocated to the
separate account of a key employee, as defined in
Internal Revenue Code Section 419A(d)(3), under a
welfare benefit fund, as defined in Internal Revenue
Code Section 419(e), maintained by the Employer, are
treated as Annual Additions to a defined contribution
plan.
(b) Compensation. The term Compensation shall mean a
Participant's earned income, wages, salaries, and fees
for professional services and other amounts received
for personal services actually rendered in the course
of employment with the Employer maintaining the Plan
(including, but not limited to, commission paid
salesmen, compensation for services on the basis or a
percentage of profits, commissions on insurance
premiums, tips and bonuses), and excluding the
following:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in
which contributed, or Employer contributions under
a simplified employee pension plan to the extent
such contributions are deductible by the Employee,
or any distributions from a plan of deferred
compensation;
(ii) amounts realized from the exercise of a
non-qualified stock option, or when restricted
stock (or property) held by the Employee either
becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) amount realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
(iv) other amounts which received special tax benefits,
or contributions made by the Employer (whether or
not under a salary reduction agreement) towards
the purchase of an annuity described in
Internal Revenue Code Section 403(b) (whether
or not the amounts are actually excludable from
the gross income of the Employee).
For the purposes of applying the limitations of this
Article, Compensation for a Limitation Year is the
Compensation actually paid or includible in gross
income during such year.
Notwithstanding the preceding sentence, Compensation
for a Participant who is permanently and totally
disabled [as defined in Internal Revenue Code Section
105(d)(4)] is the Compensation such Participant would
have received for the Limitation Year if the
Participant was paid at the rate of Compensation paid
immediately before becoming permanently and totally
disabled. Such imputed Compensation for the disable
Participant may be taken into account only if the
Participant is not an officer, a director or highly
compensated, and contributions made on behalf of such
Participant are nonforfeitable when made.
(c) Employer. The term Employer shall mean the Employer
that adopts this Plan. In the case of a group of
employers which constitutes a controlled group of
corporations [as defined in Internal Revenue Code
Section 414(b) as modified by Section 415(h)], or
which constitutes trade or business (whether or not
incorporated) which are under common control [as
defined in section 414(c) as modified by section
415(h)], or affiliated service groups [as defined in
Section 414(m)] of which the adopting Employer is a
part, all such employers shall be considered a single
Employer for purposes of applying limitations of this
Article.
(d) Excess Amount. The term Excess Amount shall mean the
excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
(e) Limitation Year. The term Limitation Year shall mean
the Calendar Year.
(f) Maximum Permissible Amount. The term Maximum
Permissible Amount shall mean the lesser of (1) $30,000
(or such other amount as may be determined by the
Commissioner to be effective as of the first day of
January of a calendar year and applicable to Limitation
Years ending within such calendar year), or (2) 25
percent of the Participant's Compensation for the
Limitation Year.
If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different
12-consecutive-month period, the Maximum Permissible
Amount for the short Limitation Year will be the lesser
of (1) $30,000 multiplied by a fraction, the numerator
of which is the number of months in the short
Limitation Year, and the denominator of which is 12, or
(2) 25 percent of the Participant's Compensation for
the Short Limitation Year.
4A.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not
maintain any qualified plan in addition to this Plan:
(a) The amount of Annual Additions which may be allocated
under this Plan on a Participant's behalf for a
Limitation Year shall not exceed the lesser of the
Maximum Permissible Amount or any other limitation
contained in this Plan.
(b) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum
Permissible Amount may be determined on the basis of
the Participant's estimated annual Compensation. Such
Compensation shall be determined on a reasonable basis
and shall be uniformly determined for all Participants
similarly situated. Any Employer Contributions based
on estimated annual Compensation shall be reduced by
any Excess Amounts carried over from prior years.
(c) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount
for such Limitation Year shall be determined on the
basis of the Participant's actual Compensation for such
Limitation Year. In the event a Participant separates
from the Service of the Employer prior to the end of
the Limitation Year, the Maximum Permissible Amount for
such Participant shall be determined prior to any
distribution of his Participant's Account on the basis
of his actual Compensation. Any Excess Amounts shall
be disposed of in accordance with Section 4A.2(d).
(d) If there is an Excess Amount with respect to a
Participant for a Limitation Year as a result of a
reasonable error in estimating the Participant's annual
Compensation, or under other limited facts and
circumstances which the Commissioner finds justified,
such Excess Amount shall be disposed of as follows:
(i) First, any Voluntary Employee Contributions shall
be returned to the Participant, to the extent that
the return would reduce the Excess Amount.
(ii) Second, any remaining Excess Amount must not be
distributed to the Participant, but shall be
reapplied to reduce Employer Contributions under
this Plan for the next Limitation Year (and for
succeeding Limitation Years, as necessary). In
each such succeeding Limitation Year the sum of
actual Employer Contributions, plus the reapplied
amount resulting from Excess Amounts, if any,
shall equal the amount of Employer Contributions
that would otherwise be allocated to each
Participant's Account.
4A.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one
or more defined contribution plans in addition to this Plan:
(a) The amount of Annual Additions which may be allocated
under this Plan on a Participant's behalf for a
Limitation Year, shall not exceed the lesser of:
(i) the Maximum Permissible Amount, reduced by the sum
of any Annual Additions allocated to the
Participant's Account for the same Limitation Year
under this Plan and such other defined
contribution plan; or
(ii) any other limitation contained in this Plan.
Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts
referred to in (i) above may be determined on the basis
of the Participant's estimated annual Compensation for
such Limitation Year. Such estimated annual
Compensation shall be determined for all Participants
similarly situated.
Any Employer Contribution based on estimated annual
Compensation shall be reduced by any Excess Amounts
carried over from prior years, if applicable.
(b) As soon as is administratively feasible after the end of
the Limitation Year, the amounts referred to in
Section 4A.3(a) shall be determined on the basis of the
Participant's actual Compensation for such Limitation
Year.
(c) If amounts are contributed to a Participant's Account
under this Plan on an allocation date which does not
coincide with the allocation date(s) for all such other
plans, and if a Participant's Annual Additions under
this Plan and all such other plans result in an Excess
Amount, such Excess Amount shall be deemed to have
derived from those Contributions last allocated.
(d) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount
attributable to this Plan will be the product of (i)
and (ii) below.
(i) The total in Excess Amount allocated as of such
date (including any amount which would have been
allocated but for the limitations of Internal
Revenue Code Section 415).
(ii) The ratio of (1) the amount allocated to the
Participant as of such date under this Plan,
divided by (2) the total amount allocated as of
such dated under all qualified defined
contribution plans (determined without regard to
the limitations of Internal Revenue Code Section
415).
(e) Any Excess Amount attributed to this Plan shall be
disposed of as provided in Section 4A.2(d).
4A.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a
defined benefit plan in addition to this Plan:
(a) If an individual is a Participant at any time in both
this Plan and a defined benefit plan maintained by the
Employer, the sum of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction for any year
may not exceed 1.0. In the event that the sum of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction exceeds 1.0, the Defined
Contribution Plan Fraction will be reduced in
accordance with Section 4A.2(d) until the sum of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction does not exceed 1.0.
If an individual was a Participant in this Plan or in
any other defined contribution plan maintained by the
Employer which was in existence on July 1, 1982, the
numerator of the Defined Contribution Plan Fraction
will be adjusted if the sum of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction
would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions
over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of
this Fraction. The adjustment is calculated using the
Fractions as they would be computed as of the later of
the end of the last Limitation Year beginning before
January 1, 1983 or June 30, 1983. This adjustment also
will be made if at the end of the last Limitation Year
beginning before January 1, 1984 the sum of the
Fractions exceeds 1.0 because of accruals or additions
that were made before the limitations of this Article
became effective to any plans of the Employer in
existence on July 1, 1982.
For purposes of this Section 4A.4, all defined benefit
plans of the Employer, whether or not terminated, will
be treated as on defined benefit plan and all defined
contributions plans of the Employer, whether or not
terminated, will be treated as on defined contribution
plan.
(b) The Defined Benefit Plan Fraction for any year is a
fraction, the numerator of which is the Participant's
Projected Annual Benefit under the defined benefit plan
(determined as of the close of the Limitation Year),
and the denominator of which is the lesser of (i) or
(ii) below:
(i) 1.25 times the dollar limitation in effect under
Internal Revenue Code Section 415(b)(1)(A) on
the last day of the Limitation Year; or
(ii) 1.4 times the amount which may be taken into
account under Internal Revenue Code Section
415(b)(1)(B) with respect to such Participant for
the Limitation Year.
Notwithstanding the above if the Participant was a
participant in one or more defined benefit plans
maintained by the Employer which were in existence on
July 1, 1982, the denominator of the Defined Benefit
Plan Fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the
Participant had accrued as of the later of the end of
the last Limitation Year beginning before January 1,
1983 or June 30, 1983. The preceding sentence applies
only if the defined benefit plans individually and in
the aggregate satisfied the requirements of Internal
Revenue Code Section 415 as in effect at the end of the
1982 Limitation Year.
(c) A Participant's Projected Annual Benefit is equal to
the annual benefit to which the Participant would be
entitled under the terms of the defined benefit plan
based upon the following assumptions:
(i) The Participant will continue employment until
reaching normal retirement age as determined under
the terms of the plan (or current age, if that is
later).
(ii) The Participant's Compensation for the Limitation
Year under consideration will remain the same
until the date the Participant attains the age
described in sub-division (i) of this
subparagraph.
(iii) All other relevant factors used to determine
benefits under the plan for the Limitation Year
under consideration will remain constant for all
future Limitation Years.
(d) The Defined Contribution Plan Fraction for any
Limitation Year is a fraction, the numerator of which
is the sum of the Annual Additions to the Participant's
Accounts in such Limitation Year and for all prior
Limitation Years, and the denominator of which is the
lesser of (i) or (ii) below for such Limitation Year
and for all prior Limitation Years of such
Participant's employment (assuming for this purpose,
that Internal Revenue Code Section 415(c) had been in
effect during such prior Limitation Years):
(i) 1.25 times the dollar limitation in effect under
Internal Revenue Code Section 415(c)(1)(A) on
the last day of the Limitation Year; or
(ii) 1.4 times the amount which may be taken into
account under Internal Revenue Code Section
415(c)(1)(B) with respect to such Participant
for the Limitation Year.
For the purposes of determining these Limitations on
Allocations, any non-deductible employee contributions
made under a defined benefit plan will be considered to
be a separate defined contribution plan and will be
considered to be part of the Annual Additions for the
appropriate Limitation Year.
ARTICLE V
ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5.1 ANNUITY CONTRACT. The Employer shall apply for and take the
necessary steps to obtain the Annuity Contract from the
Insurance Company. All contributions under the terms of
this Plan shall be paid to the Insurance Company in
accordance with the further terms of this Plan. All
payments to Participants and/or Beneficiaries, payable under
the terms of the Plan out of Participants' Accounts, will be
paid by the Insurance Company in accordance with the terms
of Article VI.
5.2 PARTICIPANT'S ACCOUNT. A Participant's Account shall be
maintained on behalf of each Participant until such account
is used to provide an annuity, or distributed in accordance
with the further terms of this Plan and the terms of the
Annuity Contract.
With respect to Employer Contributions, Salary Deferral
Contributions, Employee Contributions and Rollover
Contributions, the Participant shall have the right to
decide the amount aht shall be paid to the Participant's
Guaranteed Long Term Account, the amount that shall be paid
to the Participant's Variable Account, and the amount that
shall be paid to the Participant's Guaranteed Short Term
Account.
The Participant may change such amounts twice during a Plan
Year, as of any Renewal Date in accordance with the terms of
the Annuity Contract.
5.3 TRANSFERS BETWEEN THE GUARANTEED LONG TERM, VARIABLE AND
GUARANTEED SHORT TERM ACCOUNTS. Where permitted by the
terms and limitations of the Annuity Contract, amounts in a
Participant's Account may be transferred between the
Participant's Guaranteed Long Term Account and the
Participant's Variable Account, and from the Participant's
Guaranteed Short Term Account to the Participant's
Guaranteed Long Term Account and/or the Participant's Variable
Account twice during a calendar year, as of any Renewal
Date. With respect to the portion of a Participant's
Account attributable to Employer Contributions, Salary
Deferral Contributions, Employee Contributions and Rollover
Contributions, the Participant may designate the portion to
be transferred between the Participant's Guaranteed Long
Term Account and the Participant's Variable Account and the
portion to be transferred from the Guaranteed Short Term
Account to the Guaranteed Long Term Account and/or the
Variable Account.
5.4 Twice during each year the Insurance Company shall furnish
the Administrator and each Participant with a written report
of (a) the value of each such Participant's Guaranteed Long
Term Account, (b) the fair market value of each such
Participant's Variable Account, and (c) the value of each
such Participant's Guaranteed Short Term Account.
ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. All distributions hereunder,
whether in the form of an annuity or cash, or a combination
thereof, shall be made by the Insurance Company as of the
date specified, in accordance with the terms and conditions
set forth in the Annuity Contract and in accordance with the
requirements of Article VIII. The Insurance Company shall
be entitled to receive written instructions and proper
notice from the Administrator with respect to any
distribution and shall not be required to make such
distribution until such instructions have been received in a
form which in the opinion of the Insurance Company is
sufficiently clear with respect to the distributions
required.
6.2 PAYMENT OF BENEFITS. Unless the Participant elects
otherwise, the payment of benefits under this Plan to the
Participant shall be made not later than the 60th day after
the close of the Plan Year in which the later of (a) or (b)
occurs:
(a) the date on which the Participant attains his Normal
Retirement Age; or
(b) the date on which the Participant terminates his
Service (including Termination of Employment, death or
Disability) with the Employer.
The Participant may make an irrevocable written election,
prior to receipt of the payment, to defer such payment until
the date he incurs a 1-Year Break in Service.
In no event shall distribution of that portion of a
Participant's Account attributable to Contributions made
pursuant to a Salary Deferral Agreement and Employer
Contributions designated as 401(k) contributions (included
in the Deferral Percentage Test defined in Article I) be
made prior to the earliest of the Participant's Retirement,
death, Disability, Serious Financial Hardship, Termination
of Employment or attainment of age 59 1/2.
Notwithstanding subsections (a) and (b) above, distribution
to a Participant will commence no later than the date
determined in accordance with provisions of the following
two paragraphs.
Distribution to 5-Percent Owners. The entire Vested
Interest of a 5-percent owner [as described in Internal
Revenue Code Section 416(i) determined with respect to the
Plan Year ending in the calendar year in which such
individual attains age 70-1/2] must be distributed, in a
lump sum, no later than the first day of April following the
calendar year in which such individual attains age 70-1/2.
Distribution to Non-5-Percent Owners. Distribution to a
Participant other than a 5-percent owner must be made, in a
lump sum, no later than the first day of April following the
calendar year in which the later of Termination of
Employment or age 70-1/2 occurs.
In order that the Insurance Company may provide each benefit
in accordance with this Section the Administrator will
furnish the Insurance Company with the necessary forms and
information at least 30 day prior to the date the payment
is due to be made.
6.3 The rules and procedures for electing the timing and form of
distribution effective for each Participant or Beneficiary
shall be formulated and administered by the Administrator in
a consistent manner for all Participants in similar
circumstances. The distribution shall normally be made in
the form of an annuity. However, with respect to that
portion of the distribution attributable to Employer
Contributions, and subject to the provisions of Article
VIII, the Administrator shall have the right to specify that
each Participant may elect a distribution in the form of
cash or a combination of cash and an annuity. With respect
to that portion of the distribution attributable to Employee
Contributions, Salary Deferral Contributions and Rollover
Contributions, the Participant shall have the right to elect
the manner of distribution. Any annuity elected in
accordance with this Section may be a Fixed Annuity, or a
Variable Annuity, or a combination of both.
Notwithstanding the foregoing paragraph, if the
Participant's Vested Interest is three-thousand five-hundred
dollar ($3,500) or less, the distribution shall be in the
form of cash. A cash-out of the Participant's Vested
Interest may not be made after the annuity starting date
unless the Participant, if alive, and his spouse, if any,
consent in writing.
If the vested portion of a Participant's Vested Interest
exceeds $3,500 at the time that it first becomes payable,
the Participant and his spouse, if any, must consent in
writing to the distribution before payment may commence. If
the Participant and his spouse do not consent to the
distribution at such time, payment shall commence as of the
Participant's Normal Retirement Date.
6.4 DISTRIBUTION REQUIREMENTS.
(a) Except as otherwise provided in Article VIII, Joint and
Survivor Annuity Requirements, the requirements of this
Section shall apply to any distribution of a
Participant's Accrued Benefit.
(b) Limits on Settlement Options. Distributions, if not
made in a lump sum, may only be made over one of the
following periods (or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated
Beneficiary,
(3) a period certain not extending beyond the life
expectancy of the Participant, or
(4) a period certain not extending beyond the joint
and last survivor expectancy of the Participant
and a designated Beneficiary.
(c) Minimum Amounts to be Distributed. If the
Participant's entire Vested Interest is to be
distributed in other than a lump sum, then the amount
to be distributed each year must be at least an amount
equal to the quotient obtained by dividing the
Participant's entire Vested Interest by the life
expectancy of the Participant or joint and last
survivor expectancy of the Participant and designated
Beneficiary. Life expectancy and joint and last
survivor expectancy are computed by the use of the
return multiples contained in Section 1.72-9 of the
Income Tax Regulations. For purposes of this
computation, a Participant's life expectancy or that of
his spouse (other than in the case of a life annuity)
may be recalculated no more frequently than annually.
However, the life expectancy of a nonspouse Beneficiary
may not be recalculated.
If the Participant's spouse is not the designated
Beneficiary, the method of distribution selected must
assure that at least 50 percent of the present value of
the amount available for distribution is paid within
the life expectancy of the Participant.
In the event that an unmarried Participant elects that
his benefit shall be paid in the form of an annuity, it
shall be paid in the form of a life annuity for the
life of the Participant unless the Participant elects
otherwise.
6.5 NON-TRANSFERABLE. The Participant's right to any annuity
payments, benefits and refunds is not transferable and shall
be free from the claims of all creditors to the fullest
extent permitted by law.
6.6 DEATH DISTRIBUTION PROVISIONS. Upon the death of the
Participant, the following distribution provisions shall
take effect:
(a) If the Participant dies after distribution of his or
her entire Vested Interest has commenced, the remaining
portion of such Vested Interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's
death.
In no event shall distribution of the Participant's
remaining Vested Interest be made in a lump sum after
the Participant's death unless such distribution is
consented to, in writing, by the Participant's
surviving spouse, if any.
(b) If the Participant dies before distribution of his
Vested Interest commences, the Participant's entire
Vested Interest will be distributed no later than 5
years after the Participant's death except to the
except to the extent that an election is made to
receive distributions in accordance with (1) or (2)
below:
(1) if any portion of the Participant's Vested
Interest is payable to a designated Beneficiary,
distributions may be made in substantially equal
installments over the life or life expectancy of
the designated Beneficiary commencing no later
than 1 year after the Participant's death;
(2) if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are
required to begin in accordance with (1) above
shall not be earlier than the date on which the
Participant would have attained age 70-1/2.
However, the surviving spouse may elect, at any
time following the Participant's death to defer
the date on which distributions will begin until
no later than the date on which the Participant
would have attained age 70-1/2 and, if the spouse
dies before payments begin, subsequent
distributions shall be made as if the spouse had
been the Participant.
(c) For purposes of (b) above, payments will be calculated
by use of the return multiples specified in Section
1.72-9 of the Income Tax Regulations. Life expectancy
of a surviving spouse may be recalculated annually;
however, in the case of any other designated
Beneficiary, such life expectancy will be calculated at
the time payment first commences without further
recalculation.
(d) For purposes of this Section (Death Distribution
Provisions) any amount paid to a child of the
Participant will be treated as if it had been paid to
the surviving spouse if the amount becomes payable to
the surviving spouse when the child reaches the age of
majority.
ARTICLE VII
RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal
Retirement Age shall have a Vesting Percentage of 100%. If
a Participant retires from the active Service of the
Employer on his Normal Retirement Date he shall receive a
distribution of the entire value of his Participant's
Account as of his Normal Retirement Date.
7.2 EARLY RETIREMENT. A Participant who retires from the
Service of the Employer on his Early Retirement Date shall
have a Vesting Percentage of 100% and shall receive a
distribution of the entire value of his Participant's
Account, as of his Early Retirement Date.
7.3 LATE RETIREMENT. A Participant may continue in the Service
of the Employer after his Normal Retirement Age, and in
such event he shall retire on his Late Retirement Date.
Such Participant shall continue as a Participant under this
Plan until such Late Retirement Date. The Participant shall
have a Vesting percentage of 100% and shall receive a
distribution of the entire value of his Participant's
Account as of his Late Retirement Date.
7.4 DISABILITY RETIREMENT. A Participant who retires from the
Service of the Employer on account of Disability shall have
a Vesting Percentage of 100% and shall receive a
distribution of the entire value of his Participant's
Account as of his Disability Retirement Date.
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 The provisions of this Article shall take precedence over
any conflicting provision in this Plan.
The provisions of this Article shall apply to any married
Participant unless:
(a) upon the death of the Participant the Participant's
entire Vested Interest will be paid to the
Participant's Surviving Spouse, but if there is no
Surviving Spouse, or, if the Surviving Spouse has
already consented in a manner conforming to a Qualified
Election, then to the Participant's designated
Beneficiary;
(b) the Participant does not elect payments in the form of
a life annuity; and
(c) as to the Participant, the Plan is not a direct or
indirect transferee of a stock bonus or profit-sharing
plan which would otherwise provide for a life-annuity
form of payment to the Participant or a defined benefit
plan or money purchase pension plan (including a target
benefit plan).
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an
optional form of benefit is selected pursuant to a Qualified
Election within the 90-day period ending on the annuity
starting date, a married Participant's Vested Interest will
be paid in the form of a Qualified Joint and Survivor
Annuity. In the event an unmarried Participant elects
payment in the form of an annuity, his Vested Interest will
be paid in the form of a life annuity unless he elects
otherwise within the 90-day period before the annuity
starting date. For purposes of the Plan, the annuity
starting date is (a) the first day of the first period for
which an amount is payable as an annuity or (b) in the case
of a benefit not paid as an annuity, the first day on which
all events have occurred which entitle the Participant to
such benefit.
8.3 PAYMENT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless
an optional form of benefit has been selected within the
Election Period pursuant to a Qualified Election, if a
married Participant dies before benefits have commenced then
the Participant's entire Vested Interest shall be applied
toward the purchase of an annuity for the life of the
Surviving Spouse. As an alternative to receiving the
benefit in the form of an annuity, the Surviving Spouse may
elect to receive a single cash payment or any other form of
payment provided for in the Plan. Such annuity will
commence a single cash payment will be paid as soon as
practicable after the Participant's death unless the
Surviving Spouse elects to defer commencement or payment;
provided, however, that in no event may distribution be
deferred beyond the date described in Section 6.6(b)(2).
8.4 DEFINITIONS.
(a) Election Period. The period which begins on the first
day of the Plan Year in which the Participant attains
age 35 and ends on the date of the Participant's death.
If a Participant separates from Service prior to the
first day of the Plan Year in which age 35 is attained,
with respect to the account balance as of the date of
separation, the Election Period shall begin on the date
of separation.
(b) Qualified Election: A waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor
Annuity. The waiver must be in writing and must be
consented to by the Participant's Spouse. The Spouse's
consent to a waiver must be in writing, must
acknowledge the financial effect of the waiver, and
must be witnessed by a Plan representative or notary
public. Additionally, the Spouse's consent must
specifically acknowledge any nonspouse beneficiary
designated by the Participant. The Participant may not
subsequently designate another nonspouse Beneficiary
without the further written consent of the Spouse.
Notwithstanding this consent requirement, if the
Participant establishes to the satisfaction of a Plan
representative that such written consent may not be
obtained because there is no Spouse or the Spouse
cannot be located, a waiver will be deemed a Qualified
Election. Any consent necessary under this provision
will be valid only with respect to the Spouse who signs
the consent, or in the event of a deemed Qualified
Election, the designated Spouse. Additionally, a
revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any
time before the commencement of benefits. The number
of revocations shall not be limited.
(c) Qualified Joint and Survivor Annuity: An annuity for
the life of the Participant with a survivor annuity for
the life of the Spouse which is not less than 50
percent and not more than 100 percent of the amount of
the annuity which is payable during the joint lives of
the Participant and the Spouse and which is the amount
of benefit which can be purchased with the
Participant's Vested Interest. If no survivor annuity
percentage has been specified in an election, the
percentage payable to the Spouse will be 50 percent.
(d) Qualified Preretirement Survivor Annuity. A survivor
annuity for the life of the Spouse in the amount which
can be purchased with the Participant's entire Vested
Interest after reduction by the amount of any
outstanding loans on the annuity starting date.
(e) Spouse (Surviving Spouse): The spouse or surviving
spouse of the Participant, provided that a former
spouse will be treated as the Spouse or Surviving
Spouse to the extent provided under a Qualified
Domestic Relations Order as described in Internal
Revenue Code Section 414(p).
8.5 NOTICE REQUIREMENTS.
(a) In the case of a Qualified Joint and Survivor Annuity
as described in Section 8.2, the Plan Administrator
shall provide each Participant within a reasonable
period prior to the commencement of benefits a written
explanation of: (i) the terms and conditions of a
Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor
Annuity form of benefit; (iii) the rights of a
Participant's Spouse; and (iv) the right to make, and
the effect of, a revocation of a previous election to
waive the Qualified joint and Survivor Annuity.
(b) In the case of a Qualified Preretirement Survivor
Annuity as described in Section 8.3, the Plan
Administrator shall provide each Participant within the
period beginning on the first day of the Plan Year in
which the Participant attains age 32 and ending with
the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35, a written
explanation of the Qualified Preretirement Survivor
Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the
requirements of Section 8.5(a) applicable to a
Qualified Joint and Survivor Annuity.
If a Participant enters the Plan after the first day of
the Plan Year in which the Participant attained age 32,
the Plan Administrator shall provide notice no later
than the close of the second Plan Year succeeding the
entry of the Participant in the Plan.
If a Participant's Termination of Employment occurs
before the Participant attains age 32, the Plan
Administrator shall provide notice within one year of
such Termination of Employment.
(c) Notwithstanding the other requirements of this Section
8.5, the respective notices prescribed by this Section
need not be given to a Participant if the Plan "fully
subsidizes" the costs of a Qualified Joint and Survivor
Annuity or Qualified Preretirement Survivor Annuity.
For purposes of this Section 8.5(c), a plan fully
subsidizes the costs of a benefit if under the plan the
failure to waive such benefit by a participant would
not result in a decrease in any plan benefit with
respect to such participant and would not result in
increased contributions from the participant.
ARTICLE IX
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of
Employment, he shall be entitled to receive a distribution
of his entire Vested Interest. Such distribution shall be
further subject to the terms and conditions of Article VI.
If at the time of Termination the Participant is not 100%
vested, the non-vested portion of his Account shall be
placed in a separate account and will become a Forfeiture,
to be applied in accordance with Section 9.3, upon the date
the terminated Participant incurs 5 consecutive 1-Year
Breaks in Service.
If the Participant is rehired and re-enrolls in the Plan
prior to incurring 5 consecutive 1-Year Breaks in Service,
his vested or non-forfeitable portion of this separate
account shall, at any relevant time, be equal to an amount
("X") determined by the following formula.
X = P [ AB + (R x D) ] - (R x D)
For the purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant
time.
AB = The account balance at the relevant time.
R = The ratio of the account balance at the relevant time
to the account balance after the distribution.
D = The amount of the distribution.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no
further interest in or any rights to any portion of his
Participant's Account that becomes a Forfeiture due to his
Termination of Employment once the Participant incurs 5
consecutive 1-Year Breaks in Service in accordance with
Section 2.4.
9.3 FORFEITURE. Any Forfeiture shall be credited to the
Forfeiture account upon the occurrence of 5 consecutive
1-Year Breaks in Service following the Participant's
Termination of Employment.
Any amount in the Forfeiture account attributable to a
Participant's 5 consecutive 1-Year Breaks in Service
occurring in the Plan Year just ending shall be credited and
allocated to the Accounts of Participants in the manner set
forth in Article IV for the reallocation of forfeitures.
ARTICLE X
WITHDRAWALS
10.1 WITHDRAWAL - SALARY DEFERRAL CONTRIBUTIONS. If the
Participant has attained age 59-1/2, the Participant may
elect to withdraw from his Participant's Account an amount
which is equal to any whole percentage (not exceeding 100%)
of his Vested Interest in his Participant's Account
attributable to Salary Deferral Contributions.
If a Participant elects a withdrawal under the provisions of
this section, he may not elect another withdrawal under this
section for an additional period of twelve consecutive
months.
10.2 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Once during each Plan
Year a Participant may elect to withdraw from his
Participant's Account an amount up to 100% of the value of
that portion of his account attributable to his Rollover
Contributions as defined in Article IV.
10.3 WITHDRAWAL - POST-TAX CONTRIBUTIONS. Once during each Plan
Year a Participant may elect to withdraw an amount equal to
any whole percentage (not exceeding 100%) of his
Participant's Account attributable to his Post-Tax
Contributions including any gains thereon.
Such an election shall become effective in accordance with
the Notification section below.
If a Participant elects a withdrawal under the provisions of
this section, he may not elect another withdrawal under this
section for an additional period of twelve consecutive
months.
10.4 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP. In the event a
Participant suffers a Serious Financial Hardship, such
Participant may withdraw a portion of his Vested Interest in
his Participant's Account attributable to Salary Deferral
Contributions providing that the withdrawal does not exceed
the amount required to meet the immediate financial need
created by the Serious Financial Hardship.
Such Serious Financial Hardship must be shown by positive
evidence submitted to the Plan Administrator that the
hardship is of sufficient magnitude to impair the
Participant's financial security. Withdrawals shall be
determined in a consistent and nondiscriminatory manner, and
shall not affect the Participant's right under the Plan to
make additional withdrawals or to continue to be a
Participant.
10.5 NOTIFICATION. The Participant shall notify the
Administrator in writing of his election to make a
withdrawal under Sections 10.1, 10.2, 10.3 or 10.4. Any
such election shall be effective as of the date specified in
such notice, which date must be at least fifteen days after
such notice is filed. Payment of the withdrawal shall be
subject to the terms and conditions of Article VI.
10.6 NON-REPAYMENT. Withdrawals made in accordance with this
Article X may not be repaid.
10.7 SPOUSAL CONSENT. If such Participant is married, the
Participant's spouse must consent within 90-days prior to
the date of a withdrawal pursuant to Section 10.1, 10.3 and
10.4 before the withdrawal is paid. Such consent must
satisfy the conditions described in Section 8.4(b).
ARTICLE X-A
LOANS
10A.1 LOANS TO PARTICIPANTS. In the sole discretion of the
Plan Administrator, the Plan Administrator may make a bona
fide loan to a Participant, in an amount not less than
$1,000 which, when added to the outstanding balance of all
other loans to the Participant from all qualified plans of
the Employer, does not exceed the lesser of $50,000 or 50%
of that portion of the Vested Interest of the Participant's
Account attributable to Salary Deferral Contributions and
Employer Contributions. However, if a Participant's Vested
Interest in his Participant's Account attributable to such
Contributions is less than $20,000, the Participant may
borrow up to the lesser of $10,000 or his Vested Interest.
The loan shall be made under such terms, security interest,
and conditions as the Plan Administrator deems appropriate,
provided, however, that all loans granted hereunder:
(a) are available to all Participants on a reasonably
equivalent basis;
(b) are not made available to highly compensated Employees,
officers, directors or shareholders on a basis greater
than the basis made available to other Employees; and
(c) are made in accordance with and subject to all of the
provisions of this Article.
10A.2 In addition to such rules and regulations as the Plan
Administrator may adopt, all loans shall comply with the
following terms and conditions:
(a) An application for a loan by a Participant shall be
made in writing to the Plan Administrator whose action
thereon shall be final.
(b) With respect to any loan made, renegotiated, extended
or renewed to a Participant to whom the provisions of
Article VIII apply, the Plan Administrator shall obtain
the written consent of the Participant and the
Participant's spouse, if any, to the loan and to the
possible reduction, that may be made in accordance with
the provisions of Section 10A.2(f), in the amount of
benefit payable as either a Qualified Preretirement
Survivor Annuity or a Qualified Joint and Survivor
Annuity. Such consent shall be obtained with the
90-day period ending on the date the loan is made. The
consent of the spouse to whom the Participant is
married at the time a loan is made shall be binding on
any other spouse to whom a Participant may be married
at the time that distribution of benefits is
subsequently made. A Participant who is not married
at the time a loan is made shall not be required to
obtain the consent of any future spouse to such a
loan.
(c) The period of repayment for any loan shall be arrived
at by mutual agreement between the Plan Administrator
and the borrower but such period shall in no event
exceed 5 years from the effective date of the loan
unless the loan is used to acquire any dwelling unit
which, within a reasonable time (determined at the time
the loan is made) is to be used as a principal
residence of the Participant and repayments of any loan
granted under the terms of this Article shall actually
be made within such period.
(d) Each loan shall bear interest at a rate to be fixed by
the Plan Administrator and, in determining the interest
rate, the Plan Administrator shall take into
consideration interest rates currently being charged.
The Plan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans
granted at different times may bear different interest
rates if, in the opinion of the Plan Administrator, the
difference in rates is justified by a change in general
economic conditions. Each loan shall bear interest at
an effective annual percentage rate which is not less
than Connecticut General Life Insurance Company's
Guaranteed Long Term Account prime rate currently in
effect provided that such rate does not violate any
applicable usury laws.
(e) Every Participant receiving a loan hereunder will
receive a statement from the Plan Administrator clearly
reflecting the charges involved in each loan
transaction, including the dollar amount and annual
interest rate of the finance charges. The statement
will provide all information required to meet
applicable Truth-in-Lending laws.
(f) Each loan shall be made against collateral being the
assignment of the borrower's entire right, title and
interest in his Participant's Account supported by the
borrower's collateral promissory note for the amount of
the loan, including interest payable. In the event
that a distribution is due to the Participant-borrower,
the unpaid loan balance, together with interest
thereon, shall become due and payable and the Plan
Administrator shall first satisfy any and all
indebtedness from the Participant's Account before
making any payment to the Participant or the
Participant's Beneficiary, if applicable.
(g) No loan shall be approved by the Plan Administrator
unless the Participant's spouse, if any, consents to
the loan and to the possible reduction of the
Participant's Account as a result of the loan. Such
consent shall be in the form described in Section
8.4(b) and shall be made within the 90-day period
before the date the loan is made.
ARTICLE XI
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of
the Plan shall discharge his duties hereunder solely in the
interest of the Participants and their Beneficiaries and for
the exclusive purpose of providing benefits to Participants
and their Beneficiaries and defraying reasonable expenses of
administering the Plan. Each Fiduciary shall act with the
care, skill, prudence and diligence under the circumstances
that a prudent man acting in a like capacity and familiar
with such matters would use in conducting an enterprise of
like character and with like aims, in accordance with the
documents and instruments governing this Plan, insofar as
such documents and instruments are consistent with this
standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of
persons may serve in more than one Fiduciary capacity with
respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan
shall be construed to prevent any Fiduciary from receiving
any benefit to which he may be entitled as a Participant or
Beneficiary in this Plan, so long as the benefit is computed
and paid on a basis which is consistent with the terms of
this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to
prevent any Fiduciary from receiving any reasonable
compensation for services rendered, or for the reimbursement
of expenses properly and actually incurred in the
performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an
Employer shall receive compensation from this Plan, except
for reimbursement of expenses properly and actually
incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been
appointed pursuant to Section 12.7 of this Plan, he is
required to acknowledge in writing that he has undertaken a
Fiduciary responsibility with respect to the Plan. The
Insurance Company's liability as a Fiduciary is limited to
that arising from its management of any assets of the Plan
held by the Insurance Company in its Separate Accounts.
ARTICLE XII
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Board of Directors shall
designate a Person or Persons to serve as Administrator
under the Plan.
12.2 DUTIES AND RESPONSIBILITY. The Administrator shall
administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries in a nondiscriminatory
manner subject to the specific terms of the Plan.
The Administrator shall perform all such duties as are
necessary to operate, administer, and manage the Plan in
accordance with the terms thereof. This shall include
notification to the Insurance Company of any adjustment made
to a Participant's Account in accordance with Article IV-A.
The Administrator shall comply with the regulatory
provisions of ERISA and shall furnish to each Participant
covered under this Plan (a) a summary plan description, (b)
upon written request, a statement of his total benefits
accrued and his vested benefits if any and (c) the
information necessary to elect the benefits available under
the Plan. The Administrator shall also file the appropriate
annual reports and any other data which may be required by
appropriate regulatory agencies.
Furthermore, the Administrator shall take the necessary
steps to notify the appropriate interested parties whenever
an application is made to the Secretary of the Treasury for
a determination letter in accordance with Section 7476 of
the Internal Revenue Code as amended.
12.3 EXPENSES AND COMPENSATION. The expenses necessary to
administer the Plan shall be borne by the Employer,
including but not limited to those involved in retaining
necessary professional assistance from an attorney, an
accountant, an actuary, or an investment advisor. Nothing
shall prevent the Administrator from receiving reasonable
compensation for services rendered in administering the
Plan, provided the Administrator is not a full-time Employee
of any Employer adopting this Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to
perform his functions, the Employer shall supply full and
timely information to the Administrator on all matters
relating to this Plan as the Administrator may require.
12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the
event that more than one Person has been duly nominated to
serve as the Administrative Committee and has signified in
writing the acceptance of such designation, the
signature(s) of one or more Persons may be accepted by an
interested party as conclusive evidence that the
Administrative Committee has duly authorized the action
therein set forth and as representing the will of and
binding upon the whole Administrative Committee. No Person
receiving such documents or written instructions and acting
in good faith and in reliance thereon shall be obliged to
ascertain the validity of such action under the terms of
this Plan. The Administrative Committee shall act by a
majority of its members at the time in office and such
action may be taken either by a vote at a meeting or in
writing without a meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The
Administrator, or any member thereof may resign at any time
by delivering to the Board of Directors a written notice of
resignation, to take effect at a date specified therein,
which shall not be less than thirty (30) days after the
delivery thereof, unless such notice shall be waived.
The Administrator may be removed with or without cause by
the Board of Directors by delivery of written notice of
removal, to take effect at a date specified therein, which
shall be not less than thirty (30) days after delivery
thereof, unless such notice shall be waived.
The Board of Directors, upon receipt of or giving notice of
the resignation or removal of the Administrator, shall
promptly designate a successor Administrator who must
signify acceptance of this position in writing. In the
event no successor is appointed, the Board of Directors will
function as the Administrator until a new Administrator has
been appointed and has accepted such appointment.
12.7 The Administrator may appoint, in writing, an Investment
Manager or Managers and delegate to him the authority to
manage, acquire, invest or dispose of all or any part of the
plan assets. With regard to the assets entrusted to his
care, the Investment Manger shall provide written
instructions and directions to the Employer, who shall in
turn be entitled to rely upon such written direction. This
appointment and delegation shall be evidenced by a signed
written agreement.
12.8 The Administrator shall have the power, to the extent
permitted by law, to delegate the performance of such
Fiduciary and non-Fiduciary duties, responsibilities and
functions as the Administrator shall deem advisable for the
proper management and administration of the Plan in the best
interests of the Participants and their Beneficiaries.
ARTICLE XIII
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan
is established and the Plan assets are held for the
exclusive purpose of providing benefits for such Employees
and their Beneficiaries as have qualified to participate
under the terms of the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary
or the Employer acting in his behalf, shall notify the
Administrator of a claim of benefits under the Plan. Such
request shall be in writing to the Administrator and shall
set forth the basis of such claim and shall authorize the
Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take
such steps as may be necessary to facilitate the payment of
any benefits to which the Participant or Beneficiary may be
entitled under the terms of the Plan.
A decision by the Administrator shall be made promptly and
not later than 90 days after the Administrator's receipt of
the claim of benefits under the Plan, unless special
circumstances require an extension of the time for
processing in which case a decision shall be rendered as
soon as possible, but not later than 180 days after the
initial receipt of the claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any
Participant or Beneficiary has been denied by a Plan
Administrator, a written notice, prepared in a manner
calculated to be understood by the Participant, must be
provided, setting forth (1) the specific reasons for the
denial; (2) the specific reference to pertinent Plan
provisions on which the denial is based; (3) a description
of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such
material or information is necessary; and (4) an explanation
of the Plan's claim review procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or
Beneficiary (1) may request a review by a Named Fiduciary,
other than the Administrator, upon written application to
the Plan; (2) may review pertinent Plan documents; and (3)
may submit issues and comments in writing to a Named
Fiduciary. A Participant or Beneficiary shall have 60 days
after receipt by the claimant of written notification of a
denial of a claim to request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and
not later than 60 days after the Named Fiduciary's receipt
of a request for review, unless special circumstances
require an extension of the time for processing, in which
case a decision shall be rendered as soon as possible, but
not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall
be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by
the claimant, and specific references to the pertinent Plan
provisions on which the decision is based.
A Participant or Beneficiary shall be entitled, either in
his own name or in conjunction with any other interested
parties, to bring such actions in law or equity or to
undertake such administrative actions or to seek such relief
as may be necessary or appropriate to compel the disclosure
of any required information, to enforce or protect his
rights, to recover present benefits due to him or to clarify
his rights to future benefits under the Plan.
13.5 LIMITATION OF RIGHTS. Participation hereunder shall not
grant any Participant the right to be retained in the
Service of the Employer or any other rights or interest in
the Plan fund other than those specifically herein set
forth.
13.6 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of
his length of Service with the Employer, shall be fully
vested (100%) at all times in any portion of his
Participant's Account attributable to Employee Contributions
and Rollover Contributions.
13.7 MERGERS OR TRANSFERS. In the case of any merger or
consolidation with or transfer of assets or liabilities to
any other defined contribution plan, the following
conditions must be met:
(a) The sum of the account balances in each plan shall
equal the fair market value (determined as of the date
of the merger or transfer) or the entire plan assets.
(b) The assets of each plan shall be combined to form the
assets of the plan as merged (or transferred).
(c) Immediately after the merger (or transfer), each
Participant in the plan merged (or transferred) shall
have an account balance equal to the sum of the account
balances the Participant had in the plans immediately
prior to the merger (or transfer).
In the case of any merger or consolidation with or transfer
of assets or liabilities to any defined benefit plan, one
of the plans before such merger, consolidation, or transfer
shall be converted into the other type of plan and either
the rules described above, applicable to the merger of two
defined contribution plans, or the rules applicable to the
merger of two defined benefit plans, as appropriate, shall
be applied.
ARTICLE XIV
THE INSURANCE COMPANY
14.1 DUTIES AND RESPONSIBILITIES. The Insurance Company shall
issue the Annuity Contract and thereby assumes all the
duties and responsibilities set forth therein. The terms
of the Annuity Contract may be changed as provided therein
without amending this Plan, provided such changes shall
conform (1) to the requirements for qualification under
Section 401(a) of the Internal Revenue Code, as amended from
time to time and (2) to ERISA, as amended from time to time.
14.2 RELATION TO EMPLOYER, ADMINISTRATOR AND PARTICIPANTS. The
Insurance Company may receive the statement of the
Administrator or, if the Administrator so designates, the
Employer, as conclusive evidence of any of the matters
decided in the Plan and the Insurance Company shall be fully
protected in taking or permitting any action on the basis
thereof and shall incur no liability or responsibility for
so doing. The Insurance Company shall not be required to
question any action by the Employer of the Administrator or
any Participant nor to determine that such action is
properly taken under the Plan. The Insurance Company shall
be fully discharged from any and all liability with respect
to any payment to any Participant hereunder in accordance
with the terms of the Annuity Contract. The Insurance
Company shall not be required to take any action contrary to
its normal rules and practices.
ARTICLE XV
AMENDMENT OR TERMINATION OF THE PLAN
15.1 AMENDMENT OF PLAN. The Board of Directors shall have the
right from time to time to modify or amend, in whole or in
part, any or all provisions of the Plan. Upon any such
modification or amendment, the Administrator shall be
furnished a copy thereof. No amendment shall deprive any
Participant or Beneficiary of any Vested Interest hereunder.
Any Participant having not less than 5 Years of Service
shall be permitted to elect, in writing, to have his
Vesting Percentage computed under the Plan without regard
to such amendment.
The period during which the election must be made in writing
by the Participant shall begin no later than the date the
Plan amendment is adopted and end no later than after the
latest of the following dates:
(a) the date which is 60 days after the day the amendment
is adopted;
(b) the date which is 60 days after the day the amendment
becomes effective; or
(c) the date which is 60 days after the day the Participant
is issued written notice of the amendment by the
Employer or Administrator.
Such written election by a Participant shall be made to the
Administrator, who shall then give written notice to the
Insurance Company.
No amendment to the Plan shall decrease a Participant's
Account balance or eliminate an optional form of
distribution. Notwithstanding the preceding sentence, a
Participant's Account balance may be reduced to the extent
permitted under Internal Revenue Code Section 412(c)(8).
Furthermore, no amendment to the Plan shall have the effect
of decreasing a Participant's vested interest determined
without regard to such amendment as of the later of the date
such amendment is adopted or the date it becomes effective.
15.2 CONDITIONS OF AMENDMENT. The Employer shall not make any
amendment which would cause the Plan to lose its status as a
qualified plan within the meaning of Section 401(a) of the
Internal Revenue Code.
15.3 TERMINATION OF THE PLAN. The Board of Directors intends to
continue the Plan indefinitely for the benefit of
Participants, but reserves the right to terminate the Plan
at any time by resolution of the Board of Directors. Upon
such termination, the liability of the Employer to make
Employer Contributions hereunder shall terminate.
15.4 FULL VESTING. Upon the termination or partial termination
of the Plan, or upon complete discontinuance of Employer
Contributions, the rights of all affected Participants in
and to the amounts credited to each such Participant's
Account shall be 100% vested and nonforfeitable. Thereupon,
each Participant shall receive a total distribution of his
Participant's Account, including any amounts in the
forfeiture account allocated in accordance with Section
15.5, in accordance with the terms and conditions of Article
VI and the Annuity Contract.
15.5 APPLICATION OF FORFEITURES. Upon the termination of the
Plan, any amount in the Forfeiture account which has not
been allocated as of such termination shall be allocated and
credited to each Participant's Account of the then Active
Participants in the same manner as the last Employer
Contribution made under the Plan.
15.6 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding
any other provisions of this Plan, the Employer's adoption
of this Plan is subject to the condition precedent that the
Employer's Plan shall be approved and qualified by the
Internal Revenue Service as meeting the requirements of
Section 401(a) of the Internal Revenue Code. In the event
the Plan initially fails to qualify and the Internal Revenue
Service issues a final ruling that the Employer's Plan fails
to so qualify as of the Effective Date, all liability of the
Employer to make further Employers Contributions hereunder
shall cease. The Insurance Company, Plan Administrator,
and any other Named Fiduciary shall be notified immediately
by the Employer, in writing, of such failure to qualify.
Upon such notification, the value of the Participant's
Accounts shall be distributed in cash to the Employer,
subject to the terms and conditions of Article VI and the
Annuity Contract.
That portion of such distribution which is attributable to
Participant Contributions as specified in Section 13.6, if
any, shall be paid to the Participant, and the balance of
such distribution shall be paid to the Employer.
15.7 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is
notified subsequent to initial favorable qualification that
the Plan is no longer qualified within the meaning of
Section 401(a) of the Internal Revenue Code, and if the
Employer shall fail within a reasonable time to make any
necessary changes in order that the Plan shall so qualify,
the Participants' Accounts under the Annuity Contract shall
be fully vested and nonforfeitable and shall be disposed of
in the manner set forth in Sections 15.4 and 15.5 above;
with respect to a Plan which is no longer qualified, all
assets thereunder shall be segregated apart from all other
assets held under the Annuity Contract for any other
Employer.
ARTICLE XVI
SUBSTITUTION OF PLANS
16.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section
13.7 the Employer may substitute an individually designed
plan or a master or prototype plan for this Plan without
terminating this Plan as embodied herein and this shall be
deemed to constitute an amendment and restatement in its
entirety of this Plan as heretofore adopted by the Employer;
provided, however, that the Employer shall have certified to
the Insurance Company that this Plan is being continued on a
restated basis which meets the requirements of Section
401(a) of the Internal Revenue Code and ERISA.
16.2 TRANSFER OF ASSETS. Upon 90 days' written notification from
the Employer (unless the Insurance Company shall accept a
shorter period of notification) that a different plan
meeting the requirements set forth in Section 16.1 above has
been adopted by the Employer, and after the Insurance
Company has been furnished the Employer's certification in
writing that the Employer intends to continue the Plan as a
qualified plan under Section 401(a) of the Internal Revenue
Code and ERISA, the Insurance Company shall transfer the
value of all Participants' Accounts under the Annuity
Contract in accordance with the terms of the Annuity
Contract, to the Employer or such person or persons as may
be entitle to receive same. The Insurance Company may rely
fully on the representations or directions of the Employer
with respect to any such transfer and shall be fully
protected and discharged with respect to any such transfer
made in accordance with such representations, instructions
or directions.
ARTICLE XVII
MISCELLANEOUS
17.1 NON-REVERSION. This Plan has been established by the
Employer for the exclusive benefit of the Participants and
their Beneficiaries. Except as otherwise provided in
Section 15.6, Section 17.7 and Section 17.8, under no
circumstances shall any funds contributed hereunder at any
time revert to or be used by the Employer, nor shall any
such funds or assets of any kind be used other than for the
benefit of the Participants or their Beneficiaries.
17.2 GENDER AND NUMBER. When necessary to the meaning hereof,
and except when otherwise indicated by the context, either
the masculine or the neuter pronoun shall be deemed to
include the masculine, the feminine, and the neuter, and the
singular shall be deemed to include the plural.
17.3 REFERENCE TO THE CODE AND ERISA. Any reference to any
section of the Internal Revenue Code herein or to any other
statute or law shall be deemed to include any successor law
of similar import.
17.4 GOVERNING LAW. The Plan shall be governed and construed in
accordance with the laws of the state where the Employer has
its principal office.
17.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended
to comply with all requirements for qualification under the
Internal Revenue Code and ERISA, and if any provision hereof
is subject to more than one interpretation or any term used
herein is subject to more than one construction, such
ambiguity shall be resolved in favor of that interpretation
or construction which is consistent with the Plan being so
qualified. If any provision of the Plan is held invalid or
unenforceable, such invalidity or unenforceability shall not
affect any other provision, and this Plan shall be construed
and enforced as if such provision had not been included.
17.6 NON-ALIENATION. It is a condition of the Plan, and all
rights of each Participant shall be subject thereto, that no
right or interest of any Participant in the Plan shall be
assignable or transferable in whole or in part, either
directly or by operation of law or otherwise, including, but
without limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and
no right or interest of any Participant in the Plan shall be
liable for or subject to any obligation or liability of such
Participant.
17.7 CONTRIBUTION RECAPTURE. Notwithstanding any other
provisions of this Plan, (1) in the case of a contribution
which is made by an Employer by a mistake of fact, Section
17.1 shall not prohibit the return of such contribution to
the Employer within one year after the payment of the
contribution, and (2) if a contribution is conditioned upon
the deductibility of the contribution under Section 404 of
the Internal Revenue Code of 1986, then, to the extent the
deduction is disallowed, Section 17.1 shall not prohibit
the return to the Employer of such contribution (to the
extent disallowed) within one year after the disallowance
of the deduction. The amount which may be returned to the
Employer is the excess of (1) the amount contributed on (2)
the amount that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the
deduction. Earnings attributable to the excess
contribution may not be returned to the Employer, but
losses attributable thereto must reduce the amount to be so
returned. Furthermore, if the withdrawal of the amount
attributable to the mistaken contribution would cause the
balance of the individual account of any Participant to be
reduced to less than the balance which would have been in
the account had the mistaken amount not been contributed,
then the amount to be returned to the Employer would have
to be limited so as to avoid such reduction.
17.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any
other provisions of this Plan, the Participant's Account may
be segregated and distributed pursuant to a Qualified
Domestic Relations Order within the meaning of Internal
Revenue Code Section 414(p). The Plan Administrator shall
establish procedures for determining if a Domestic Relations
Order is qualified within the meaning of Section 414(p).
ARTICLE XVIII
TOP HEAVY PROVISIONS
18.1 DEFINITIONS. The following definitions are atypical terms
used on in this Article XVIII.
(a) Compensation. The term Compensation, whenever used in
this Article XVIII, means Compensation as defined in
Section 4A.1(b) of the Plan.
(b) Key Employee. The term Key Employee means any Employee
or former Employee (including deceased Employees) of
the Employer who at any time during the Plan Year or
the four preceding Plan Years is:
(i) An officer of the Employer who has an annual
Compensation greater than 150 percent of the
amount in effect under Internal Revenue Code
Section 415(c)(1)(A). In no event shall more than
50 Employees or, if less, the greater of three
Employees or 10% of all Employees, be taken
into account under this subsection as Key
Employees. If the number of officers is
limited by the terms of the preceding sentence,
the Employees with the highest Compensation
will be considered to be officers.
(ii) One of the ten Employees who has annual
Compensation greater than the amount in effect
under Internal Revenue Code Section 415 (c)(1)(A)
and who owns (or is considered to own within the
meaning of Internal Revenue Code Section 318, as
modified by Section 416(i)(1)(B)(iii)) both more
than 1/2% interest and the largest interest in the
Employer. If two or more Employees own equal
interest in the Employer, the ranking of ownership
share will be in descending order of such
Employees' Compensation. If the Employer is other
than a corporation, the term "interest" as used
herein shall refer to capital or profits interest.
(iii) An Employee who owns (or is considered to own
within the meaning of Internal Revenue Code
Section 318, as modified by Section 416
(i)(1)(B)(iii)) more than 5% of the outstanding
stock of the Employer or stock possessing more
than 5% of the total combined voting power of all
stock of the Employer. If the Employer is other
than a corporation, an Employee who owns, or is
considered to own, more than 5% of the capital or
profits interest in the Employer.
(iv) An Employee who owns (or is considered to own
within the meaning of Internal Revenue Code
Section 318, as modified by Section 416
(i)(1)(B)(iii)) more than 1% of the outstanding
stock of the Employer or stock possessing more
than 1% of the total combined voting power of all
stock of the Employer, and whose annual
Compensation is more than $150,000. If the
Employer is other than a corporation, an Employee
who owns, or is considered to own, more than 1% of
the capital or profits interest in the Employer,
and whose annual Compensation is more than
$150,000.
For the purposes of paragraphs (ii), (iii) and (iv),
above, if an Employee's ownership interest changes
during a given Plan Year, his ownership interest for
that Plan Year is the largest interest owned at any
time during the Plan Year.
The Beneficiary of any deceased Employee who was a Key
Employee shall be considered a Key Employee for the
same period as the deceased Employee would have been so
considered.
(c) Non-Key Employee. The term Non-Key Employee means any
Employee or former Employee of the Employer who is not
a Key Employee. The Beneficiary of any deceased
Employee who is a Non-Key Employee shall be considered
a Non-Key Employee for the same period as the deceased
Employee would have been so considered.
(d) Determination Date. The term Determination Date
means, with respect to a Plan Year, the last day of
the preceding Plan Year, or, in the case of the first
Plan Year of a plan, the last day of the first Plan
Year.
(e) Valuation Date. The term Valuation Date means, with
respect to a Plan Year, the last day of the preceding
Plan Year and is the date on which Account Balances
are valued for the purpose of determining the Plan's
Top-Heavy status.
(f) Account Balance. The term Account Balance means the
value of the Participant's Account standing to the
credit of a Participant, a former Participant, or the
Beneficiary of a former Participant, as the case may
be, as of the Valuation Date. Such Account Balance
shall include any contributions due as of the
Determination Date and all distributions made to the
Participant (or former Participant or Beneficiary, as
the case may be) during the Plan Year or the preceding
four Plan Years, except for distributions of Related
Rollovers. However, the Account Balance shall not
include any deductible Employee contributions made
pursuant to Internal Revenue Code Section 219 or
Unrelated Rollovers made to the Plan after December 31,
1983.
A Related Rollover is a Rollover Contribution or
Transfer that either was not initiated by the Employee
or was made to a plan maintained by the same Employer.
An Unrelated Rollover is a Rollover Contribution or
Transfer that was initiated by the Employee and was
made from a plan maintained by one employer to a plan
maintained by another employer.
For purposes of this subsection (f), the term Employer
shall include all employers that are required to be
aggregated in accordance with Internal Revenue Code
Sections 414 (b), (c) or (m).
(g) Required Aggregation Group. The term Required
Aggregation Group means all of the plans of the
Employer which cover a Key Employee, including any such
plan maintained by the Employer pursuant to the terms
of a collective bargaining agreement, and each other
plan of the Employer which enables any plan in which a
Key Employee participates to satisfy the requirements
of Internal Revenue Code Sections 401(a)(4) or 410.
(h) Permissive Aggregation Group. The term Permissive
Aggregation Group means all of the plans of the
Employer which are included in the Required Aggregation
Group plus any plans of the Employer which provide
comparable benefits to the benefits provided by the
plans in the Required Aggregation Group and are not
included in the Required Aggregation Group, but which
satisfy the requirements of Internal Revenue Code
Sections 401(a)(4) and 410 when considered together
with the Required Aggregation Group, including any plan
maintained by the Employer pursuant to a collective
bargaining agreement which does not include a Key
Employee.
(i) Top-Heavy Plan. The Plan is Top-Heavy if it meets the
requirements of the following Section 18.2.
(j) Super Top-Heavy Plan. The Plan is Super Top-Heavy if
it meets the requirements of the following Section
18.3.
(k) Terminated Plan. A plan shall be considered to be a
Terminated Plan if it:
(i) has been formally terminated;
(ii) has ceased crediting service for benefit accruals
and vesting;
(iii) has been or is distributing all plan assets to
participants (or beneficiaries) as soon as
administratively possible.
With the exception of the Minimum Employer Contribution
Requirements and the Minimum Vesting Requirements, the
Top Heavy Provision of this Article XVIII will apply to
any Terminated Plan which was maintained at any time
during the five years ending on the Determination Date.
(l) Frozen Plan. A plan shall be considered to be a Frozen
Plan if all benefit accruals have ceased but all assets
have not been distributed to participants or
beneficiaries. The Top Heavy Provisions of this
Article XVIII will apply to any such Frozen Plan.
18.2 This Plan shall be determined to be Top-Heavy if, as of the
Determination Date, the aggregate of the Account Balances of
Key Employees exceeds 60% of the aggregate of the Account
Balances of all Employees covered by the Plan. The
determination of whether the Plan is Top-Heavy shall be made
after aggregating all plans in the Required Aggregation
Group, and after aggregating any other plans which are in
the Permissive Aggregation Group, if such permissive
aggregation thereby eliminates the Top-Heavy status of any
plan within such Required Aggregation Group.
In determining whether this Plan is Top-Heavy, the Account
Balance of a former Key Employee who is now a Non-Key
Employee will be disregarded. Likewise, the Account Balance
of any Employee who has not performed an hour of service
during the five-year period ending on the Determination Date
will be excluded.
18.3 This Plan shall be determined to be Super Top-Heavy if, as
of the Determination Date, the Plan would meet the test
specified in Section 18.2 above, if 90% were substituted for
60% in each place where it appears. The Plan may be
permissively aggregated in order to avoid being Super
Top-Heavy.
18.4 Notwithstanding anything in the Plan to the contrary, if the
Plan is Top-Heavy with respect to any Plan Year, then the
Plan shall meet the following requirements for such Plan
Year:
(a) Compensation Limit. The annual Compensation of each
Participant taken into account under the Plan shall
not exceed $200,000; however, such dollar limitation
shall be adjusted to take into account any adjustments
made by the Secretary of the Treasury pursuant to
Internal Revenue Code Section 416(d)(2).
(b) Minimum Employer Contribution Requirements. A Minimum
Employer Contribution of 3% of each Eligible Employee's
Compensation will be made on behalf of each Eligible
Employee in the Plan.
If the actual Employer Contribution made or required to
be made for Key Employees is less than 3%, the Minimum
Employer Contribution required hereunder shall not
exceed the percentage contribution made for the Key
Employee for whom the percentage of Employer
Contributions and Forfeitures relative to the first
$200,000 of Compensation is the highest for the Plan
Year after taking into account contributions or
benefits under other qualified plans in the Plan's
Required Aggregation Group.
However, if a Participant in this Plan is also a
participant in a defined benefit plan maintained by the
Employer, such Participant shall receive the top heavy
minimum benefit under the defined benefit plan in lieu
of the Minimum Employer Contribution described herein.
Such minimum benefit will be equal to the Participant's
average yearly Compensation during his five
highest-paid consecutive years, multiplied by the
lesser of 2% per year of service or 20%. Compensation
periods and years of service to be taken into account
in the calculation of this benefit shall be subject to
any limitations set forth in the defined benefit plan.
For any Limitation Year in which this Plan is Top-Heavy
but not Super Top-Heavy, the Minimum Employer
Contribution shall be increased to 4% of each Eligible
Employee's Compensation in order to preserve the use of
the factor 1.25 in the denominators of the fractions
described in Section 4A.4(b)(1) and Section 4A.4(d)(1).
A Participant who receives the top heavy minimum
benefit in lieu of the Minimum Employer Contribution
will receive an increased minimum benefit equal to the
Participant's average yearly Compensation during his
five highest-paid consecutive years, multiplied by the
lesser of 3% per year of service or 20% plus one
percentage point (to a maximum of ten percentage
points) for each year that this Plan is maintained.
Compensation periods and years of service to be taken
into account in the calculation of this increased
minimum benefit shall be subject to any limitations set
forth in the defined benefit plan.
For any Limitation Year in which this Plan is Super
Top-Heavy, the factor of 1.25 in the denominators of
the fractions described in Section 4A.4(b)(i) and
Section 4A.4(d)(i) shall be reduced to 1.0. The
Minimum Employer Contribution payable in such years
shall be 3% of each Eligible Employee's Compensation
and the defined benefit top heavy minimum benefit shall
be average Compensation multiplied by the lesser of 2%
per year of service of 20%.
Eligible Employees are all Non-Key Employees who are
Participants in the Plan as of the last day of the Plan
Year regardless of whether they had completed 1000
hours of service during the Plan Year. Also included
are Non-Key Employees who would have been Participants
as of the last day of the Plan Year except for either
of the following reasons:
(i) The Employee's Compensation was below a required
minimum level; or
(ii) The Employee chose not to make either Required
Contributions or Salary Deferral Contributions
when he was eligible to do so.
In computing the Minimum Employer Contribution under
this subsection, Forfeitures allocated to a
Participant's Account, Salary Deferral Contributions,
and contributions made pursuant to any other salary
reduction arrangement the Employee may have entered
into, as permitted by regulations, shall be considered
Employer Contributions.
(c) Minimum Vesting Requirements. Vesting shall be
determined in accordance with the following schedule:
Years of Service Vesting Percentage
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
In the event the Plan ceases to be Top-Heavy, the
vesting schedule in this Section 18.4(c) shall continue
to apply until the Plan is amended to provide otherwise
and any such amendment shall comply with the provisions
of Section 15.1.
PRE-JANUARY 1, 1989 OPERATIONAL AMENDMENT
The Campeau California Plan, as in effect immediately prior to January
1, 1987, is amended effective as of January 1, 1987, by adding a new Section 6.7
reading as follows immediately after Section 6.6 thereof:
6.7 LEGAL DISTRIBUTION RULES. The provisions
of Internal Revenue Code Section 401(a)(9) are hereby
incorporated by reference into this Plan and shall apply to this Plan
notwithstanding any other provision herein to the contrary. Such
Section 401(a)(9) provisions shall be applied in accordance with
any final regulations (or, in the absence of final regulations,
proposed regulations) issued by the Secretary of the Treasury or
his delegate as to such provisions.
PRE-JANUARY 1, 1989 TAX REFORM ACT AMENDMENT
The Campeau California Plan, as in effect immediately prior to January
1, 1987, is amended effective as of January 1, 1987 and for the period beginning
on such date through December 31, 1988, in accordance with the following
provisions which are designed to meet the requirements of the Tax Reform Act
of 1986 (the "TRA") which are effective prior to January 1, 1989. Such
provisions are taken from Model Amendment IV contained in Notice 87-2 of the
Internal Revenue Service. No change has been made in the provisions set forth
in Model Amendment IV of Notice 87-2.
SECTION I: PURPOSE AND EFFECTIVE DATE
1.1 Purpose. It is the intention of the Employer to amend the
plan to comply with those provisions of the Tax Reform Act of 1986 that
are effective prior to the first Plan Year beginning after December 31,
1988. Nothing contained in this amendment shall permit or require
Elective Deferrals, Matching Employer Contributions, or Employee
Contributions under the plan unless such Elective Deferrals, Matching
Employer Contributions, or Employee Contributions have been authorized
by the Employer under other provisions of the plan or under other
amendments thereto.
1.2 Effective Date. Except as otherwise provided, this
amendment shall be effective as of the first day of the first Plan Year
beginning after December 31, 1986.
SECTION II: DEFINITIONS
For purposes of this amendment only, the following definitions
shall apply.
2.1 "Adjustment Factor" shall mean the cost of living
adjustment factor prescribed by the Secretary of the Treasury under
Section 415(d) of the Code for years beginning after December 31, 1987,
as applied to such items and in such manner as the Secretary shall
provide.
2.2 "Affiliated Employer" shall mean the Employer and any
corporation which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which includes the Employer; any
trade or business (whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m) of the Code) which
includes the Employer; and any other entity required to be aggregated
with the Employer pursuant to regulations under Section 414(o) of the
Code.
2.3 "Code" shall mean the Internal Revenue Code of 1986 and
amendments thereto.
2.4 "Compensation" shall mean compensation paid by the
Employer to the Participant during the taxable year ending with or within
the Plan Year which is required to be reported as wages on the
Participant's Form W-2 and, if the provisions of the plan other than this
amendment so provide, shall also include compensation which is not
currently includible in the Participant's gross income by reason of the
application of Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b) of the
Code.
2.5 "Elective Deferrals" shall mean contributions made to the
plan during the Plan Year by the Employer, at the election of the
Participant, in lieu of cash compensation and shall include contributions
made pursuant to a salary reduction agreement.
2.6 "Employee" shall mean employees of the Employer and
shall include leased employees within the meaning of Section 414(n)(2) of
the Code. Notwithstanding the foregoing, if such leased employees
constitute less than twenty percent of the Employer's nonhighly
compensated work force within the meaning of Section 414(n)(1)(C)(ii) of
the Code, the term "Employee" shall not include those leased employees
covered by a plan described in Section 414(n)(5) of the Code unless
otherwise provided by the terms of this plan other than this amendment.
2.7 "Employee Contributions" shall mean contributions to the
plan made by a Participant during the Plan Year.
2.8 "Employer" shall mean the entity that establishes or
maintains the plan; any other organization which has adopted the plan
with the consent of such establishing employer; and any successor of such
employer.
2.9 "Family Member" shall mean an individual described in
Section 414(q)(6)(B) of the Code.
2.10 "Highly Compensated Employee" shall mean an individual
described in Section 414(q) of the Code.
2.11 "Inactive Participant" shall mean any Employee or former
Employee who has ceased to be a Participant and on whose behalf an
account is maintained under the plan.
2.12 "Matching Contribution" shall mean any contribution to the
plan made by the Employer for the Plan Year and allocated to a
Participant's account by reason of the Participant's Employee
Contributions or Elective Deferrals.
2.13 "Non-Highly Compensated Employee" shall mean an
Employee of the Employer who is neither a Highly Compensated
Employee nor a Family Member.
2.14 "Participant" shall mean any Employee of the Employer
who has met the eligibility and participation requirements of the plan.
2.15 "Qualified Nonelective Contributions" shall mean
contributions (other than Matching Contributions) made by the Employer
and allocated to Participants' accounts that the Participant may not
elect to receive in cash until distributed from the plan; that are 100
percent vested and nonforfeitable when made; and that are not
distributable under the terms of the plan to Participants or their
beneficiaries earlier than the earlier of:
(i) separation from service, death, or disability of the
Participant;
(ii) attainment of the age 59-1/2 by the Participant;
(iii) termination of the plan without establishment of a successor
plan;
(iv) the events specified in those of Sections XIII, XIV or XV
of this amendment adopted by the Employer; or
(v) for Plan Years beginning before January 1, 1989, upon
hardship of the Participant.
2.16 "Plan Year" shall mean the plan year otherwise specified
in the plan.
SECTION III: PROVISIONS RELATING TO LEASED EMPLOYEES
3.1 Safe-Harbor. Notwithstanding any other provisions of the
Plan, for purposes of determining the number or identity of Highly
Compensated Employees or for purposes of the pension requirements of
Section 414(n)(3) of the Code, the employees of the Employer shall
include individuals defined as Employees in Section 2.6 of this
amendment.
3.2 Participation and Accrual. A leased employee within the
meaning of Section 414(n)(2) of the Code shall become a Participant in,
and accrue benefits under, the plan based on service as a leased employee
only as provided in provisions of the plan other than this Section III.
3.3 Effective Date. This Section III shall be effective for
services performed after December 31, 1986.
SECTION IV: LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
4.1 Revised Contribution Limitations Under Defined
Contribution Plan.
4.1(a) Definition of Annual Additions. For purposes of the plan,
"Annual Addition" shall mean the amount allocated to a Participant's
account during the Limitation Year that constitutes:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
(iv) Amounts described in Sections 415(l)(l) and 419(A)(d)(2)
of the Code.
4.1(b) Maximum Annual Addition. The maximum Annual
Addition that may be contributed or allocated to a Participant's account
under the Plan for any Limitation Year shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's compensation, within the
meaning of Section 415(c)(3) of the Code for the
Limitation Year.
4.1(c) Special Rules. The compensation limitation referred to in
Section 4.1(b)(ii) shall not apply to:
(i) Any contribution for medical benefits (within the meaning
of Section 419A(f)(2) of the Code) after separation from
service which is otherwise treated as an Annual Addition,
or
(ii) Any amount otherwise treated as an Annual Addition under
Section 415(l)(l) of the Code.
4.1(d) Definitions. For purposes of Section 4.1, "Defined
Contribution Dollar Limitation" shall mean $30,000 or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
4.2 Special Rules for Plans Subject to Overall Limitations
Under Code Section 415(e).
4.2(a) Recomputation Not Required. The Annual Addition for
any Limitation Year beginning before January 1, 1987 shall not be
recomputed to treat all Employee Contributions as an Annual Addition.
4.2(b) Adjustment of Defined Contribution Plan Fraction. If the
plan satisfied the applicable requirements of Section 415 of the Code as
in effect for all Limitation Years beginning before January 1, 1987, an
amount shall be subtracted from the numerator of the defined contribution
plan fraction (not exceeding such numerator) as prescribed by the
Secretary of the Treasury so that the sum of the defined benefit plan
fraction and defined contribution plan fraction computed under Section
415(e)(1) of the Code (as revised by this Section IV) does not exceed 1.0
for such Limitation Year.
4.3 Limitation Year. For purposes of this Section IV,
"Limitation Year" shall mean the limitation year specified in the plan,
or if none is specified, the calendar year.
4.4 Effective Date of Section IV Provisions. The provisions of
this Section IV shall be effective for Limitation Years beginning after
December 31, 1986.
SECTION V: ELECTIVE DEFERRALS
5.1 Maximum Amount of Elective Deferrals. Effective as of
January 1, 1987, no Employee shall be permitted to have Elective
Deferrals made under this plan during any calendar year in excess of
$7000 multiplied by the Adjustment Factor as provided by the Secretary
of the Treasury. The foregoing, limit shall not apply to Elective
Deferrals of amounts attributable to service performed in 1986 and
described in Section 1105(c)(5) of the Tax Reform Act of 1986.
5.2 Average Actual Deferral Percentage.
(a) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage for
Eligible Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 1.25; or
(b) the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage for
Eligible Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 2, provided that the Average
Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees does not exceed the Average
Actual Deferral Percentage by Eligible Participants who are
Nonhighly Compensated Employees by more than two (2)
percentage points or such lesser amount as the Secretary of the
Treasury shall prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly Compensated
Employee.
5.3 Definitions. For purposes of this Section V and for
purposes of Sections X and XI of this Amendment, the following
definitions shall be used:
5.3(a) "Actual Deferral Percentage" shall mean the ratio
(expressed as a percentage), of Elective Deferrals and Qualified Employer
Deferral Contributions on behalf of the Eligible Participant for the Plan
Year to the Eligible Participant's Compensation for the Plan Year.
5.3(b) "Average Actual Deferral Percentage" shall mean the
average (expressed as a percentage) of the Actual Deferral Percentage of
the Eligible Participants in a group.
5.3(c) "Qualified Employer Deferral Contributions" shall mean
Qualified Nonelective Contributions taken into account under the terms of
the plan without regard to this amendment in determining the Actual
Deferral Percentage.
5.3(c) "Eligible Participant" shall mean any Employee of the
Employer who is otherwise authorized under the terms of the Plan to have
Elective Deferrals or Qualified Employer Deferral Contributions allocated
to his account for the Plan Year.
5.4 Special Rules.
5.4(a) For purposes of this Section V, the Actual Deferral
Percentage for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective Deferrals
or Qualified Employer Deferral Contributions allocated to his account
under two or more plans or arrangements described in Section 401(k) of
the Code that are maintained by the Employer or an Affiliated Employer
shall be determined as if all such Elective Deferrals and Qualified
Employer Deferral Contribution were made under a single arrangement.
5.4(b) For purposes of determining the Actual Deferral Percentage
of a Participant who is a Highly Compensated Employee, the Elective
Deferrals, Qualified Employer Deferral Contributions and Compensation
of such Participant shall include the Elective Deferrals, Qualified
Employer Deferral Contributions and Compensation of Family Members,
and such Family Members shall be disregarded in determining the Actual
Deferral Percentage for Participants who are Nonhighly Compensated
Employees.
5.4(c) The determination and treatment of the Elective Deferrals,
Qualified Nonelective Contributions and Actual Deferral Percentage of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
SECTION VI: LIMITATIONS ON EMPLOYEE CONTRIBUTIONS
AND MATCHING EMPLOYER CONTRIBUTIONS
6.1 Contribution Percentage.
6.1(a) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25; or
6.1(b) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2, provided that the Average Contribution Percentage
for Eligible Participants who are Highly Compensated Employees does not
exceed the Average Contribution Percentage for Eligible Participants who
are Nonhighly Compensated Employees by more than two (2) percentage
points or such lesser amount as the Secretary of the Treasury shall
prescribe to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
6.2 Definitions. For purposes of this Section VI, and for
purposes of Section XII of this amendment, the following definitions
shall apply.
6.2(a) "Average Contribution Percentage" shall mean the average
(expressed as percentage) of the Contribution Percentages of the Eligible
Participants in a group.
6.2(b) "Contribution Percentage" shall mean the ratio (expressed
as a percentage), of the sum of the Employee Contributions and Matching
Contributions under the plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's Compensation for the Plan
Year.
6.2(c) "Eligible Participant" shall mean any employee of the
Employer who is otherwise authorized under the terms of the plan to have
Employee Contributions or Matching Contributions allocated to his
account for the Plan Year.
6.3 Special Rules
6.3(a) For purposes of this Section VI, the Contribution
Percentage for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to make Employee
Contributions, or to receive Matching Contributions, Qualified
Nonelective Contributions or Elective Deferrals allocated to his account
under two or more plans described in Section 401(a) of the Code or
arrangements described in Section 401(k) of the Code that are maintained
by the Employer or an Affiliated Employer shall be determined as if all
such contributions and Elective Deferrals were made under a single plan.
6.3(b) In the event that this plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Section
410(b) of the Code if aggregated with this plan, then this Section VI
shall be applied by determining the Contribution Percentages of Eligible
Participants as if all such plans were a single plan.
6.3(c) For purposes of determining the Contribution Percentage
of an Eligible Participant who is a Highly Compensated Employee, the
Employee Contributions, Matching Employer Contributions and
Compensation of such Participant shall include the Employee
Contributions, Matching Employer Contributions and Compensation of
Family Members, and such Family Members shall be disregarded in
determining the Contribution Percentage for Eligible Participants who are
Nonhighly Compensated Employees.
6.3(d) 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.
SECTION VII: QUALIFIED VOLUNTARY EMPLOYEE
CONTRIBUTIONS NOT PERMITTED
The plan shall accept no Employee Contributions designated by the
Participant as deductible employee contributions (within the meaning of
Section 72(o)(5)(A) of the Code) for a taxable year of the Participant
beginning after December 31, 1986.
SECTION VIII: NOT REQUIRED OR ADOPTED FOR CAMPEAU
CALIFORNIA PLAN
SECTION IX: DETERMINATION OF TOP-HEAVY STATUS
Solely for the purpose of determining if the plan, or any other plan
included in a required aggregation group of which this plan is a part,
is top-heavy (within the meaning of Section 416(g) of the Code) the
accrued benefit of an Employee other than a key employee (within the
meaning of Section 416(i)(l) of the Code) shall be determined under (a)
the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Affiliated Employers, or (b) if there is no
such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional accrual rate of
Section 411(b)(l)(C) of the Code.
SECTION X: NOT REQUIRED OR ADOPTED FOR CAMPEAU
CALIFORNIA PLAN
SECTION XI: DISTRIBUTION OF EXCESS CONTRIBUTIONS
11.1 In General. Notwithstanding any other provision of the
plan, Excess Contributions and income allocable thereto shall be
distributed no later than the last day of each plan year beginning
after December 31, 1987, to Participants on whose behalf such Excess
Contributions were made for the preceding Plan Year.
11.2 Excess Contributions. For purposes of this amendment,
"Excess Contributions" shall mean the amount described in Section
401(k)(8)(B) of the Code.
11.3 Determination of Income. The income allocable to Excess
Contributions shall be determined by multiplying income allocable to
the Participant's Elective Deferrals and Qualified Employer Deferral
Contributions for the Plan Year by a fraction, the numerator of which
is the Excess Contributions on behalf of the Participant for the
preceding Plan Year and the denominator of which is the Participant's
account balances attributable to Elective Deferrals and Qualified
Employer Deferral Contributions on the last day of the preceding Plan
Year.
11.4 Maximum Distribution Amount. The Excess Contributions
which would otherwise be distributed to the Participant shall be
adjusted for income; the Excess Contributions shall be reduced, in
accordance with regulations, by the amount of Excess Deferrals
distributed to the Participant; shall, if there is a loss allocable to
the Excess in no event be less than the lesser of the Participant's
account under the plan or the Participant's Elective Deferrals and
Qualified Employer Deferral Contribution for the Plan Year.
SECTION XII: DISTRIBUTION OF EXCESS AGGREGATE
CONTRIBUTIONS
12.1 In General. Excess Aggregate Contributions and income
allocable thereto shall be forfeited, if otherwise forfeitable under
the terms of this Plan, or if not forfeitable, distributed no later
than the last day of each Plan Year beginning after December 31, 1987,
to Participants to whose accounts Employee Contributions or Matching
Contributions were allocated for the preceding Plan Year.
12.2 Excess Aggregate Contributions. For purposes of this
amendment, "Excess Aggregate Contributions" shall mean the amount
described in Section 401(m)(6)(B) of the Code.
12.3 Determination of Income. The income allocable to Excess
Aggregate Contributions shall be determined by multiplying the income
allocable to the Participant's Employee Contributions and Matching
Employer Contributions for the Plan Year by a fraction, the numerator
of which is the Excess Aggregate Contributions on behalf of the
Participant or the preceding Plan Year and the denominator of which is
the sum of the Participant's account balances attributable to Employee
Contributions and Matching Employer Contributions on the last day of
the preceding Plan Year.
12.4 Maximum Distribution Amount. The Excess Aggregate
Contributions to be distributed to a Participant shall be adjusted for
income, and, if there is a loss allocable to the Excess Aggregate
Contribution, shall in no event be less than the lesser of the
Participant's account under the plan or the Participant's Employer
Contributions and Matching Contributions for the Plan Year.
12.5 Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be distributed from the Participant's
Employee Contribution account, and forfeited if otherwise forfeitable
under the terms of the plan (or, if not forfeitable, distributed) from
the Participant's Matching Contribution account in proportion to the
Participant's Employee Contributions and Matching Contributions for the
Plan Year.
12.6 Allocation of Forfeitures.
12.6(a) Amounts forfeited by Highly Compensated Employees
under this Section XII shall be:
(i) Treated as Annual Additions under Section 4.1(a) of this
amendment and either;
(ii) Applied to reduce employer contributions if forfeitures of
Matching Contributions under the Plan are applied to
reduce employer contributions; or
(iii) Allocated, after all other forfeitures under the plan, and
subject to Section 12.6(b) of this amendment, to the
same Participants and in the same manner as such other
forfeitures of Matching Contributions, are allocated to
other Participants under the Plan.
12.6(b) Notwithstanding the foregoing, no forfeiture arising
under this Section XII shall be allocated to the account of any
Highly Compensated Employee.
SECTION XIII: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XIV: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XV: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XVI: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XVII: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XVIII: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XIX: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
SECTION XX: NOT REQUIRED OR ADOPTED FOR THIS
CAMPEAU CALIFORNIA PLAN
January 13, 1994
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, Ohio 45202
Re: Federated Department Stores, Inc.
Retirement Income and Thrift Incentive Plan
Ladies and Gentlemen:
As Deputy General Counsel of Federated Department Stores,
Inc., a Delaware corporation (the "Company"), I have acted as
counsel of the Company in connection with the authorization of
the issuance and sale from time to time of up to 800,000 shares
of Common Stock, par value $.01 per share, of the Company (the
"Shares") under the Federated Department Stores, Inc. Retirement
Income and Thrift Incentive Plan (the "Plan") and an
indeterminate amount of interests under the Plan (the
"Interests"), as contemplated by the Company's Registration
Statement on Form S-8, which is being filed on or about January
13, 1994.
I have examined such documents, records and matters of law
as I have deemed necessary for purposes of this opinion. Based
thereupon, I am of the opinion that the Shares and the Interests
that may be issued and sold pursuant to the Plan will, when
issued and sold in accordance with the Plan, be duly authorized,
validly issued, fully paid, and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5
of the Registration Statement.
Very truly yours,
\s\ Boris Auerbach
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Federated Department Stores, Inc.:
We consent to incorporation by reference in this Registration Statement on
Form S-8 of Federated Department Stores, Inc. of our report dated March 8, 1993,
relating to the consolidated balance sheets of Federated Department Stores, Inc.
and subsidiaries as of January 30, 1993 and February 1, 1992, and the related
consolidated statements of operations and cash flows and related financial
statement schedules for each of the fifty-two week periods ended January 30,
1993, February 1, 1992 and February 2, 1991, which report appears in the
January 30, 1993 Annual Report on Form 10-K of Federated Department Stores,
Inc.
Our report refers to the Company's adoption of "fresh-start reporting" as of
February 1, 1992 to reflect the Company's emergence from bankruptcy and the
Company's adoption of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
and Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes," as of February 1, 1992.
\s\ KPMG Peat Marwick
KPMG PEAT MARWICK
Cincinnati, Ohio
January 13, 1994
