<PAGE>
As filed with the Securities and Exchange Commission On April 14, 1999
Registration No. 333 - _____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
TRUE NORTH COMMUNICATIONS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-1088161
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
101 East Erie Street
Chicago, Illinois 60611-2897
(Address of Principal Executive Offices) (Zip Code)
TRUE NORTH COMMUNICATIONS INC.
PROFIT SHARING AND SAVINGS PLAN
FOR BJK&E
(Full title of the plan)
Theodore J. Theophilos
Executive Vice President of Corporate Development and Business Affairs
True North Communications Inc.
101 East Erie Street
Chicago, Illinois
60611-2897
(Name and address of agent for service)
(312) 425-6500
(Telephone number, including area code, of agent for service.)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Proposed maximum Proposed maximum
Title of Securities Amount to be offering price aggregate offering Amount
to be Registered (1) registered per share (2) price registration fee
==================================================================================================
<S> <C> <C> <C> <C>
Common Stock, 200,000 $27.38 $5,476,000 $1,522.33
$.33 1/3 par value (3)
==================================================================================================
</TABLE>
__________________
(1) 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.
(2) Estimated pursuant to Rule 457(h) under the Securities Act of 1933, solely
for the purpose of calculating the amount of the registration fee, based
upon the average of the high and low sales prices reported for shares of
the Common Stock in the New York Stock Exchange Composite Transactions on
April 8, 1999, which was $27.38.
(3) Includes an equal number of associated preferred stock purchase rights
("Rights") to purchase 1/2,000 of a share of Series B Junior Preferred
Stock, par value $1.00 per share. Rights initially are attached to and
trade with the Common Stock of Registrant. The value attributable to such
Rights, if any, is reflected in the market price of the Common Stock.
<PAGE>
PART I: INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing information specified in Part I (plan
information and registrant information) will be sent or given to employees as
specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the
"Securities Act"). Such documents need not be filed with the Securities and
Exchange Commission (the "SEC") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 under the
Securities Act. These documents and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed (File Number 1-5029) by
the Registrant with the SEC pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act") are incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998;
2. The description of the Common Stock contained in the Joint Proxy
Statement/ Registration Statement on Form S-4 (Registration No. 333-
41189) under the caption "Description of True North Common Stock"
filed by the Registrant with the SEC on November 26, 1997, including
any amendments or reports filed for the purpose of updating such
description.
3. The description of the Registrant's Preferred Stock Purchase Rights
contained in the Registrant's Registration Statement on Form 8-A filed
on November 5, 1998 and any amendment or report filed for the purpose
of updating such description.
All reports and other documents filed by the Registrant pursuant
to Section 13(a), 13(c) 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by reference
herein and to be a part hereof from the dates of filing of such reports and
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein, or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
2
<PAGE>
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Suzanne S. Bettman, Vice President and Assistant General Counsel
of True North, will issue an opinion about the legality of the True North Common
Stock being offered by this prospectus.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act. Registrant's Bylaws also provide that Registrant will indemnify
its directors, officers, employees and other agents to the fullest extent
permitted by Delaware law.
Registrant's Certificate of Incorporation, as amended, provides
for the elimination of liability for monetary damages for breach of the
directors' fiduciary duty of care to Registrant or its stockholders. These
provisions do not eliminate the directors' duty of care and in appropriate
circumstances, equitable remedies such as injunctive or other forms of non-
monetary relief will remain available under Delaware law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to Registrant or its stockholders, for acts or omissions not in
good faith or involving intentional misconduct, for knowing violations of law,
for any transaction from which the director derived an improper personal
benefit, or for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision does not affect
a director's responsibilities under any other laws, such as the federal
securities laws or state or federal environmental laws.
Furthermore, Registrant has secured insurance covering Registrant
and its directors and officers and those of its principal subsidiaries against
certain liabilities.
Item 7. Exemptions from Registration Claimed.
Not applicable.
Item 8. Exhibits.
(a) The following is a list of Exhibits included as part of this
Registration Statement. Items marked with a single asterisk are filed
herewith.
4.1 Restated Certificate of Incorporation, as amended, of
Registrant (incorporated by reference to Exhibit 3(i)
to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994).
3
<PAGE>
4.2 Certificate of Ownership and Merger changing Registrant's name to
True North Communications Inc. (incorporated by reference to
Exhibit (3)(i) to Registrant's Current Report on Form 8-K dated
December 9, 1994).
4.3 Certificate of Designation of Series B Junior Participating
Preferred Stock of Registrant, filed in Delaware on November 5,
1998 (incorporated by reference to Exhibit 4.3 to Registrant's
Registration Statement on Form S-3, filed December 7, 1998 (File
No. 333-68485).
4.4 Bylaws, as restated March 4, 1998, of Registrant (incorporated by
reference to Exhibit 4.4 to Registrant's Post-Effective Amendment
No. 1 on Form S-8, dated March 17, 1998 to Registrant's
Registration Statement on Form S-4, filed November 26, 1997 (File
No. 333-41189)).
4.5 Certificate of Amendment of Restated Certificate of Incorporation
filed in Delaware on December 30, 1997 (incorporated by reference
to Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997).
4.6 Rights Agreement dated as of November 4, 1998 between Registrant
and The First Chicago Trust Company of New York, as Rights Agent
(incorporated by reference to Exhibit 4 to Registrant's Current
Report on Form 8-K dated November 4, 1998).
*4.7 Registrant's Profit Sharing and Savings Plan for BJK&E as Amended
and Restated Effective January 1, 1998
*4.8 Amendment to Registrant's Profit Sharing and Savings Plan for
BJK&E, dated April 1, 1999.
*5.1 Opinion of Suzanne S. Bettman, Vice President, Assistant General
Counsel of Registrant.
Pursuant to Item 8(b), the Registrant undertakes that it will
submit the Plan and all amendments thereto to the Internal
Revenue Service in a timely manner and that it will make all
changes required by the Service to issue a determination letter
with respect to the Plan.
*23.1 Consent of Arthur Andersen LLP, independent public accountants.
*23.2 Consent of KPMG Peat Marwick LLP, independent certified public
accountants.
*23.2 Consent of Suzanne S. Bettman, Vice President, Assistant General
Counsel of Registrant (included in Exhibit 5.1).
*24.1 Power of Attorney (included in signature page).
4
<PAGE>
(b) Not applicable.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (f the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b) of the Securities Act if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a) (1) (i) and (a) (1) (ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in
the 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that , for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange
5
<PAGE>
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 Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
6
<PAGE>
SIGNATURES
Registrant: Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, State of Illinois, on April 14, 1999.
TRUE NORTH COMMUNICATIONS INC.
By: /s/ DAVID A. BELL
---------------------------------------
David A. Bell
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David A. Bell, Donald L. Seeley and Theodore J.
Theophilos, and each of them, his or her true and lawful attorney-in-fact with
full power of substitution and resubstitution, in any and all capacities, to
sign this Registration Statement or amendments (including post-effective
amendments) thereto and to file the same with all exhibits thereto, and other
documents in connection therewith authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes and he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
* * * * *
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney has been signed by the following
persons on April 14, 1999 in the capacities indicated.
Signature Title
--------- -----
/s/ DAVID A. BELL Chairman and Chief Executive
---------------------------------
David A. Bell Officer (principal
executive officer)
/s/ DONALD L. SEELEY Executive Vice President,
---------------------------------
Donald L. Seeley Chief Financial Officer
(principal financial officer)
7
<PAGE>
/s/ KEVIN J. SMITH Senior Vice President, Chief
---------------------------------
Kevin J. Smith Accounting Officer
(principal accounting officer)
BRUCE MASON* Director
---------------------------------
Bruce Mason
RONALD W. BESS* Director
---------------------------------
Ronald W. Bess
DONALD M. ELLIMAN, JR.* Director
---------------------------------
Donald M. Elliman, Jr.
W. GRANT GREGORY* Director
---------------------------------
W. Grant Gregory
LEO-ARTHUR KELMENSON* Director
---------------------------------
Leo-Arthur Kelmenson
RICHARD P. MAYER* Director
---------------------------------
Richard P. Mayer
MICHAEL E. MURPHY* Director
---------------------------------
Michael E. Murphy
CHARLES D. PEEBLER, JR.* Director
---------------------------------
Charles D. Peebler, Jr.
J. BRENDAN RYAN* Director
---------------------------------
J. Brendan Ryan
MARILYN R. SEYMANN* Director
---------------------------------
Marilyn R. Seymann
STEPHEN T. VEHSLAGE* Director
---------------------------------
Stephen T. Vehslage
8
<PAGE>
*By /s/ THEODORE J. THEOPHILOS
---------------------------------
Theodore J. Theophilos, as Attorney-in-Fact
The Plan. Pursuant to the requirements of the Securities Act of 1933, as
amended, the trustees (or other persons who administer the employee benefit
plan) have duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois on April 14, 1999.
TRUE NORTH COMMUNICATIONS INC.
Profit Sharing and Savings Plan for BJK&E
By: Bozell, Jacobs, Kenyon & Eckhardt, Inc.,
as Plan Administrator
By /s/ GARY D. CHESTER
---------------------------------------
Gary D. Chester
Vice President
9
<PAGE>
Exhibit 4.7
TRUE NORTH COMMUNICATIONS INC.
PROFIT SHARING AND SAVINGS PLAN
FOR BJK&E
Amended and Restated as of January 1, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I DEFINITIONS................................................. 2
1.1 "Accounts".................................................. 2
1.2 "Beneficiary"............................................... 2
1.3 "Code"...................................................... 2
1.4 "Committee"................................................. 2
1.5 "Company"................................................... 2
1.6 "Compensation".............................................. 2
1.7 "Contribution Agreement".................................... 3
1.8 "Disability"................................................ 3
1.9 "Discretionary Contribution"................................ 3
1.10 "Effective Date"............................................ 3
1.11 "Elective Contribution"..................................... 4
1.12 "Eligible Employee"......................................... 4
1.13 "Employee".................................................. 4
1.14 "Employer".................................................. 4
1.15 "Entry Date"................................................ 4
1.16 "ERISA"..................................................... 4
1.17 "Highly Compensated Employee"............................... 4
1.18 "Hour of Service"........................................... 4
1.19 "Investment Funds".......................................... 6
1.20 "Matching Contribution"..................................... 6
1.21 "Nonforfeitable"............................................ 6
1.22 "Parent Corporation"........................................ 6
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
1.23 "Participant"............................................... 6
1.24 "Participating Employer".................................... 6
1.25 "Pension Investment Committee".............................. 6
1.26 "Plan"...................................................... 6
1.27 "Plan Administrator"........................................ 6
1.28 "Plan Year"................................................. 6
1.29 "Qualified Nonelective Contribution"........................ 6
1.30 "Qualifying Employer Securities"............................ 6
1.31 "Rollover Contribution"..................................... 7
1.32 "Stock"..................................................... 7
1.33 "TN Stock Fund"............................................. 7
1.34 "Trust"..................................................... 7
1.35 "Trustee"................................................... 7
1.36 "Trust Fund"................................................ 7
1.37 "Valuation Date"............................................ 7
1.38 "Voluntary After-Tax Contribution".......................... 7
1.39 "Voluntary Contribution Agreement".......................... 7
1.40 "Year of Service"........................................... 7
ARTICLE II EMPLOYEE PARTICIPATION........................................ 7
2.1 ELIGIBILITY................................................. 8
2.2 DURATION OF PARTICIPATION................................... 8
2.3 WAIVER OF PARTICIPATION..................................... 8
ARTICLE III CONTRIBUTIONS AND FORFEITURES................................ 8
3.1 ELECTIVE CONTRIBUTIONS...................................... 8
3.2 MATCHING CONTRIBUTIONS...................................... 8
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
3.3 DISCRETIONARY CONTRIBUTIONS................................. 9
3.4 QUALIFIED NONELECTIVE CONTRIBUTIONS......................... 9
3.5 VOLUNTARY AFTER-TAX CONTRIBUTIONS........................... 9
3.6 ROLLOVER CONTRIBUTIONS...................................... 10
3.7 TIME FOR MAKING CONTRIBUTIONS............................... 10
3.8 CREDITING OF CONTRIBUTIONS.................................. 10
3.9 ALLOCATION OF FORFEITURES................................... 10
3.10 CODE LIMITATIONS............................................ 11
3.11 RETURN OF CONTRIBUTIONS..................................... 11
ARTICLE IV PARTICIPANT ACCOUNTS.......................................... 11
4.1 ACCOUNTS.................................................... 11
4.2 ADJUSTMENT OF ACCOUNTS...................................... 11
4.3 INVESTMENT FUNDS............................................ 12
ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING................... 12
5.1 NORMAL RETIREMENT AGE....................................... 12
5.2 PARTICIPANT DISABILITY OR DEATH............................. 13
5.3 VESTING SCHEDULE............................................ 13
5.4 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS /
RESTORATION OF FORFEITED ACCOUNT BALANCE.................... 13
5.5 BREAK IN SERVICE - VESTING.................................. 14
5.6 INCLUDED YEARS OF SERVICE - VESTING......................... 14
5.7 FORFEITURE OCCURS........................................... 14
5.8 AMENDMENT TO VESTING SCHEDULE............................... 15
ARTICLE VI PAYMENT OF BENEFITS......................................... 15
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
6.1 SEPARATION FROM SERVICE FOR REASONS OTHER THAN DEATH........ 15
6.2 TIME OF DISTRIBUTIONS....................................... 15
6.3 DISTRIBUTIONS AFTER A PARTICIPANT'S DEATH................... 16
6.4 METHOD OF BENEFIT PAYMENT................................... 16
6.5 MINIMUM DISTRIBUTION RULES.................................. 17
6.6 IN-SERVICE WITHDRAWALS...................................... 18
6.7 WITHDRAWALS FROM ELECTIVE CONTRIBUTIONS ACCOUNT, MATCHING
CONTRIBUTIONS ACCOUNT AND QNEC ACCOUNT AFTER ATTAINMENT
OF AGE 59 1/2............................................... 19
6.8 WITHDRAWALS AFTER ATTAINMENT OF AGE 65...................... 19
6.9 HARDSHIP WITHDRAWALS........................................ 19
6.10 WITHDRAWALS FROM VOLUNTARY AFTER-TAX CONTRIBUTIONS ACCOUNT
AND ROLLOVER CONTRIBUTIONS ACCOUNT.......................... 20
6.11 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS............... 20
6.12 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS......... 20
6.13 PARTICIPANT LOANS........................................... 21
ARTICLE VII EMPLOYER ADMINISTRATIVE PROVISIONS........................... 22
7.1 INFORMATION TO COMMITTEE.................................... 22
7.2 NO LIABILITY................................................ 22
ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS....................... 22
8.1 BENEFICIARY DESIGNATION..................................... 22
8.2 NO BENEFICIARY DESIGNATION.................................. 23
8.3 PERSONAL DATA TO COMMITTEE.................................. 23
8.4 ADDRESS FOR NOTIFICATION.................................... 23
8.5 ASSIGNMENT OR ALIENATION.................................... 23
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
8.6 INFORMATION AVAILABLE....................................... 23
8.7 BENEFIT CLAIMS AND APPEAL PROCEDURES........................ 24
ARTICLE IX ADMINISTRATIVE COMMITTEE.................................... 25
9.1 APPOINTMENT OF COMMITTEE.................................... 25
9.2 TERM........................................................ 25
9.3 GENERAL..................................................... 25
9.4 MANNER OF ACTION............................................ 26
9.5 AUTHORIZED REPRESENTATIVE................................... 26
9.6 INTERESTED MEMBER........................................... 26
9.7 INDIVIDUAL STATEMENT........................................ 26
9.8 UNCLAIMED ACCOUNT PROCEDURE................................. 26
ARTICLE X TRUST....................................................... 27
10.1 TRUST AGREEMENT............................................. 27
10.2 INVESTMENT IN QUALIFYING EMPLOYER SECURITIES................ 27
10.3 PENSION INVESTMENT COMMITTEE; FUNDING POLICY................ 27
10.4 FEES AND EXPENSES FROM TRUST FUND........................... 27
10.5 PARTIES TO LITIGATION....................................... 28
10.6 DISTRIBUTION DIRECTIONS..................................... 28
10.7 VOTING RIGHTS............................................... 28
10.8 TENDER OFFERS............................................... 28
ARTICLE XI LIMITS ON CONTRIBUTIONS..................................... 29
11.1 SECTION 404 LIMITS.......................................... 29
11.2 SECTION 415 LIMITS.......................................... 29
11.3 SECTION 402(g) LIMITS....................................... 30
11.4 SECTION 401(k)(3) LIMITS.................................... 31
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
11.5 SECTION 401(m) LIMITS....................................... 34
11.6 SECTION 410(b) LIMITS....................................... 38
ARTICLE XII SPECIAL TOP-HEAVY PROVISIONS................................. 38
12.1 PROVISIONS TO APPLY......................................... 38
12.2 MINIMUM CONTRIBUTION........................................ 38
12.3 ADJUSTMENT TO LIMITATION ON BENEFITS........................ 39
12.4 DEFINITIONS................................................. 39
ARTICLE XIII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION................... 41
13.1 EXCLUSIVE BENEFIT........................................... 41
13.2 PLAN AMENDMENT.............................................. 41
13.3 PLAN TERMINATION............................................ 42
13.4 PLAN MERGER OR CONSOLIDATION................................ 42
13.5 ACTION TO AMEND OR TERMINATE PLAN........................... 42
ARTICLE XIV MISCELLANEOUS................................................ 42
14.1 EVIDENCE.................................................... 42
14.2 USERRA COMPLIANCE........................................... 42
14.3 NO RESPONSIBILITY FOR EMPLOYER ACTION....................... 43
14.4 FIDUCIARIES NOT INSURERS.................................... 43
14.5 INDEMNIFICATION............................................. 43
14.6 WAIVER OF NOTICE............................................ 43
14.7 WORD USAGE.................................................. 43
14.8 STATE LAW................................................... 43
14.9 EMPLOYMENT NOT GUARANTEED................................... 44
</TABLE>
<PAGE>
TRUE NORTH COMMUNICATIONS INC.
PROFIT SHARING AND SAVINGS PLAN
FOR BJK&E
THIS PLAN, hereby adopted as of January 1, 1998 by BOZELL, JACOBS,
KENYON & ECKHARDT, INC., a corporation organized under the laws of the State of
Delaware ("the Company").
WITNESSETH:
WHEREAS, the Company previously maintained the Bozell, Jacobs, Kenyon
& Eckhardt, Inc. Profit Sharing and Savings Plan, a plan which was established
effective May 1, 1968, and which was amended and restated from time to time; and
WHEREAS, in conjunction with the merger of Cherokee Acquisition
Corporation, a subsidiary of True North Communications Inc., with and into the
Company on December 30, 1997, the Bozell, Jacobs, Kenyon & Eckhardt, Inc. Profit
Sharing and Savings Plan was amended and renamed, as of such date, as the True
North Communications Inc. Profit Sharing and Savings Plan for BJK&E; and
WHEREAS, the Company previously maintained the Bozell, Inc. Stock
Bonus Plan, which was amended and restated from time to time; and
WHEREAS, in conjunction with the merger of Cherokee Acquisition
Corporation, a subsidiary of True North Communications Inc., with and into the
Company on December 30, 1997, the Bozell, Inc. Stock Bonus Plan was amended and
renamed, as of such date, as the True North Communications Inc. Stock Bonus Plan
for BJK&E; and
WHEREAS, effective as of January 1, 1998, the True North
Communications Inc. Stock Bonus Plan for BJK&E has been merged into the True
North Communications Inc. Profit Sharing and Savings Plan for BJK&E, with the
Profit Sharing and Savings Plan remaining as the surviving plan (the "Plan"),
which surviving Plan is hereby being amended and restated in its entirety; and
WHEREAS, it is intended that the Plan shall continue to constitute a
profit sharing plan that satisfies the qualification requirements of Sections
401 and 501(a) of the Code (as hereinafter defined) and that the salary
reduction arrangement hereunder shall continue to constitute a qualified cash or
deferred arrangement, within the meaning of Section 401(k) of the Code, and that
the terms of the Plan shall be interpreted in a manner consistent therewith; and
WHEREAS, it is intended that the TN Stock Fund (as hereinafter
defined) shall continue to be invested primarily, if not exclusively, in
Qualifying Employer Securities (as hereinafter defined), that the assets of the
True North Communications Inc. Stock Bonus Plan for BJK&E which was merged into
the Plan shall be commingled with and become a portion of the TN Stock Fund, and
that the terms of the Plan which have specific application to the TN Stock Fund
shall apply, without distinction, to the portion thereof which is attributable
to the True
<PAGE>
North Communications Inc. Stock Bonus Plan for BJK&E in the same manner as such
terms apply to the balance of the TN Stock Fund; and
WHEREAS, the terms of the Plan generally are effective as of January
1, 1998, except that, to the extent necessary to reflect changes in the Code
Section 401 qualified plan rules which became effective prior to such date, such
terms shall be effective as of such earlier date(s).
NOW, THEREFORE, the Company hereby amends and restates the Plan in
its entirety to provide as follows:
ARTICLE I
DEFINITIONS
1.1. "Accounts" mean, for any Participant, the accounts established
and maintained under the Plan pursuant to ARTICLE IV. References to a
Participant's Account Balance refer to the balance of a Participant's Account or
Accounts, as applicable.
1.2. "Beneficiary" means a person designated by a Participant or who
otherwise is entitled to receive benefits under the Plan upon the death of a
Participant, in accordance with Sections 8.1 and 8.2.
1.3. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
1.4. "Committee" means the administrative committee established by
the Company, in accordance with ARTICLE IX, as the same may be constituted from
time to time.
1.5. "Company" means Bozell, Jacobs, Kenyon & Eckhardt, Inc.
1.6. "Compensation" means the Participant's wages, including
salaries, fees for professional service and other amounts received for personal
services actually rendered in the course of employment with the Employer
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, overtime and bonuses).
Compensation includes "elective contributions" made by the Employer on the
Employee's behalf. "Elective contributions" are amounts excludible from the
Employee's gross income under Code Section 402(a)(8) (relating to a Code Section
401(k) arrangement), Code Section 402(h) (relating to a simplified employee
pension), Code Section 125 (relating to a cafeteria plan) or Code Section 403(b)
(relating to a tax-sheltered annuity). A Compensation payment includes
Compensation paid by the Employer to an Employee through another person under
the common paymaster provisions of Code Sections 3121(s) and 3306(p).
"Compensation" does not include: (i) Employer contributions
(other than "elective contributions") to a plan of deferred compensation to the
extent the contributions are not included in the gross income of the Employee
for the taxable year in which contributed, on behalf of an Employee to a
Simplified Employee Pension Plan to the extent such contributions are excludible
from Employee's gross income, and
(2)
<PAGE>
any distributions from a plan of deferred compensation, regardless of whether
such amounts are includible in the gross income of the Employee when
distributed; (ii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture; (iii) amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and (iv) other amounts which
receive special tax benefits, such as auto allowances, severance pay, and
premiums for group term life insurance (but only to the extent that the premiums
are not includible in the gross income of the Employee). "Compensation" also
does not include reimbursements or other expense allowances, fringe benefits
(cash and non-cash), moving expenses, deferred compensation and welfare
benefits.
Compensation for a Plan Year shall not exceed $160,000 (adjusted for
changes in the cost-of-living, as the Commissioner of Internal Revenue may
prescribe).
Any reference in this Plan to Compensation is a reference to the
definition in this Section, unless the Plan reference specifies a modification
to this definition. The Committee will take into account only Compensation
actually paid for the relevant period.
For Plan allocation purposes, "Compensation" does not include (i)
amounts received from an Employer that is not a Participating Employer or (ii)
amounts received from an entity before such time that the entity has become a
Participating Employer.
1.7. "Contribution Agreement" means an agreement entered into between
a Participant and the Participant's Participating Employer pursuant to which
Elective Contributions are to be made for the Participant's benefit.
1.8. "Disability" means the inability of a Participant, because of a
physical or mental condition, to perform the duties of his customary position of
employment (or inability to engage in any substantial gainful activity) for an
indefinite period which the Committee considers will be of long continued
duration, or the permanent loss, loss of use or disfiguration of a member or
function of the body which results in a termination of employment of the
Participant. The Committee may require a Participant to submit to a physical
examination in order to confirm the Participant's disability.
1.9. "Discretionary Contribution" means a discretionary Employer
contribution made pursuant to Section 3.3.
1.10. "Effective Date" means January 1, 1998. Notwithstanding the
preceding sentence, the amendments contained herein designed to comply with the
changes in the Code Section 401 qualified plan rules made by the Uruguay Round
Agreements Act (GATT), the Taxpayer Relief Act of 1997 (TRA '97), and the Small
Business Job Protection Act of 1996 (SBJPA), including the Uniformed Services
Employment and Reemployment rights Act of 1994 (USERRA), shall be effective as
of January 1, 1997, or as of such other date(s) required under the
aforementioned statutes.
(3)
<PAGE>
1.11. "Elective Contribution" means a contribution made to the Plan
for the benefit of a Participant pursuant to a Contribution Agreement, in
accordance with Section 3.1.
1.12. "Eligible Employee" means any Employee who is employed by a
Participating Employer other than (i) an Employee covered by a collective
bargaining agreement as to which retirement benefits were the subject of good
faith bargaining, unless such agreement expressly provides for participation in
the Plan; (ii) an Employee who is a nonresident alien and who receives no earned
income from the Employer which constitutes income from sources within the United
States; (iii) a "leased employee" within the meaning of Code Section 414(n);
(iv) an Employee employed by a Participating Employer in an operating unit or
division for such period of time that such operating unit or division does not
participate in the Plan, as determined by the Committee; or (v) an individual
who is not characterized or treated by the Participating Employer as a common
law employee of a Participating Employer. In the event an individual described
in (v) above is reclassified or deemed to be reclassified as a common law
employee of a Participating Employer, the individual shall be eligible to
participate in the Plan as of the actual date of such reclassification (to the
extent such individual otherwise qualifies as an Eligible Employee hereunder).
If the effective date of any such reclassification is prior to the actual date
of such reclassification, in no event shall the reclassified individual be
eligible to participate in the Plan retroactively to the effective date of such
reclassification.
1.13. "Employee" means any individual employed by an Employer,
including any leased employee and any other individual required to be treated as
an employee pursuant to Code Section 414(n) or Code Section 414(o).
1.14. "Employer" means (i) the Company; (ii) any Participating
Employer; (iii) any corporation that is a member of a controlled group of
corporations (as defined in Code Section 414(b)) of which the Company or a
Participating Employer is also a member; (iv) any trade or business, whether or
not incorporated, that is under common control (as defined in Code Section
414(c)) with the Company or a Participating Employer; or (v) to the extent
required by Code Section 414(o), any other organization.
1.15. "Entry Date" means the first day of each calendar quarter.
1.16. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.17. "Highly Compensated Employee" or "HCE" means each individual
employed by an Employer who (a) during the Plan Year or during the calendar year
preceding the Plan Year was a "5% owner" within the meaning of Code Section
414(q); or (b) for the calendar year preceding the Plan Year had Compensation in
excess of $80,000 (as adjusted under such Code Section) and, if the Company
elects in a manner consistent with Code Section 414(q), was in the "top paid
group" as defined therein, for such calendar year. A "Nonhighly Compensated
Employee" or "NHCE" means each individual employed by an Employer who is not an
HCE.
1.18. "Hour of Service" means:
(4)
<PAGE>
(a) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Committee credits Hours of Service
under this paragraph (a) to the Employee for the computation period in which the
Employee performs the duties, irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation
of damages, to which the Employer has agreed or for which the Employee has
received an award. The Committee credits Hours of Service under this paragraph
(b) to the Employee for the computation period(s) to which the award or the
agreement pertains rather than for the computation period in which the award,
agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is terminated), for
reasons other than for the performance of duties during a computation period,
such as a leave of absence, vacation, holiday, sick leave, illness, incapacity
(including disability), layoff, jury duty or military duty. The Committee will
credit no more than 501 Hours of Service under this paragraph (c) to an Employee
on account of any single continuous period during which the Employee does not
perform any duties (whether or not such period occurs during a single
computation period). The Committee shall credit Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of Labor
Reg. (S)2530.200b-2, which Regulation is hereby incorporated by reference.
The Committee shall not credit an Hour of Service under more than one
of the above paragraphs. A computation period for purposes of this Section is
the Plan Year, Year of Service period, Break in Service period or other period,
as determined under the Plan provision for which the Committee is measuring an
Employee's Hours of Service.
Hours of Service are determined by the Committee based on records of
actual hours worked and hours for which the Employer makes payment or for which
payment is due from the Employer.
Unless the Committee affirmatively determines otherwise (which
determination shall be made in a nondiscriminatory manner), Hours of Service
(and Years of Service) with an entity (or, as determined by the Committee in a
non-discriminatory manner, its predecessor) prior to the time that such entity
(or its predecessor) has become an Employer, as a result of a corporate
acquisition or otherwise, shall be credited under the Plan as Hours of Service
(and Years of Service), to the same extent as it would be had such service been
with the Company. By way of example, and not limitation, periods of employment
with True North Communications Inc. prior to its acquisition of the Company
shall be treated as Hours and Years of Service under the Plan to the same extent
as periods of employment with the Company.
Solely for purposes of determining whether an Employee incurs a Break
in Service under any provision of this Plan, the Committee shall credit Hours of
Service during an Employee's unpaid absence period due to maternity or paternity
leave. The Committee shall consider an Employee on maternity or paternity leave
if the Employee's absence is due to the Employee's pregnancy, the birth of the
Employee's child, the placement with the Employee of
(5)
<PAGE>
an adopted child, or the care of the Employee's child immediately following the
child's birth or placement. The Committee shall credit Hours of Service under
this paragraph on the basis of the number of Hours of Service the Employee would
receive if the Employee were paid during the absence period or, if the Committee
cannot determine the number of Hours of Service the Employee would receive, on
the basis of 8 hours per day during the absence period. The Committee shall
credit only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Committee shall credit all Hours of
Service described in this paragraph to the computation period in which the
absence period begins or, if not necessary to prevent a Break in Service in such
computation period, to the immediately following computation period.
1.19. "Investment Funds" shall have the meaning set forth in Section
4.3.
1.20. "Matching Contribution" means an Employer contribution made for
the benefit of a Participant on account of an Elective Contribution, pursuant to
Section 3.2.
1.21. "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Account Balance.
1.22. "Parent Corporation" means True North Communications Inc.
1.23. "Participant" means an individual who participates in the Plan
pursuant to the terms hereof.
1.24. "Participating Employer" means the Company and each direct or
indirect subsidiary or affiliate of the Company which, with the consent of the
Company, and in accordance with Exhibit A hereto, adopts the Plan as a
Participating Employer.
1.25. "Pension Investment Committee" means the committee established
by the Parent Corporation to monitor and control the investment decisions of
various employee benefit plans maintained by the Parent and its affiliates.
1.26. "Plan" means the True North Communications Inc. Profit Sharing
and Savings Plan for BJK&E.
1.27. "Plan Administrator" means the Company unless the Company
designates another person or group of persons to hold such position.
1.28. "Plan Year" means the calendar year.
1.29. "Qualified Nonelective Contribution" or "QNEC" means a
discretionary Employer contribution which is designated by the Company as such,
pursuant to Section 3.4.
1.30. " " means securities which, with reference to the Company,
are "employer securities" under Section 409(l) of the Code and Section 407(d)(5)
of ERISA.
(6)
<PAGE>
1.31. "Rollover Contribution" means a contribution made by an Eligible
Employee of an amount distributed from a qualified plan or conduit IRA, in
accordance with Section 3.6.
1.32. "Stock" means shares of Parent Corporation common stock which
are Qualifying Employer Securities.
1.33. "TN Stock Fund" shall have the meaning set forth in Section 4.3.
1.34. "Trust" means the separate Trust created under the Plan. "Trust
Agreement" means the agreement between the Company and the Trustee setting forth
the provisions of the Trust.
1.35. "Trustee" means the person or entity named as trustee, or
successor trustee, in the Trust Agreement forming a part of the Plan; provided,
however, that the group of individuals who served as the Trustee of the Plan
immediately prior to the Effective Date shall continue to serve as such with
respect to that portion of the Trust Fund which is not covered by a separate
trust agreement until such time that such portion of the Trust Fund becomes
covered by a separate trust agreement, and until such time such Trustee and such
portion of the Trust Fund shall be governed by the trust provisions of the
Bozell, Jacobs, Kenyon & Eckhardt, Inc. Profit Sharing and Savings Plan as in
effect immediately prior to the Effective Date.
1.36. "Trust Fund" means all property of every kind held or acquired
by the Trustee under the Plan.
1.37. "Valuation Date" means each business day. Notwithstanding the
foregoing, the Committee, upon reasonable notice, may change the Valuation Date
to the last day of each calendar month or to the last day of each calendar
quarter, and each additional day which it deems appropriate.
1.38. "Voluntary After-Tax Contribution" means an after-tax
contribution made to the Plan for the benefit of a Participant pursuant to a
Voluntary Contribution Agreement, in accordance with Section 3.5.
1.39. "Voluntary Contribution Agreement" means an agreement entered
into between a Participant and his Participating Employer pursuant to which
Voluntary After-Tax Contributions are to be made for the Participant's benefit
in accordance with Section 3.5.
1.40. "Year of Service" means a 12-consecutive-month computation
period during which an Employee completes not less than 1,000 Hours of Service.
For purposes of ARTICLE II (participation requirements), the first 12-
consecutive-month computation period begins on the Employee's employment
commencement date, and each Plan Year beginning subsequent to the Employee's
employment commencement date constitutes an additional 12-consecutive-month
computation period. For purposes of ARTICLE V (vesting requirements), the Plan
Year is the 12-consecutive-month computation period.
ARTICLE II
EMPLOYEE PARTICIPATION
(7)
<PAGE>
2.1. ELIGIBILITY. Each Eligible Employee shall become a Participant
-----------
on the Entry Date coincident with or immediately following the date on which he
completes a Year of Service, provided he is still an Eligible Employee on such
date. Solely for this purpose, all of an Employee's Years of Service with an
Employer are taken into account.
2.2. DURATION OF PARTICIPATION. An individual who becomes a
-------------------------
Participant shall remain a Participant as long as an Account is maintained under
the Plan for his benefit or until his death, if earlier. Notwithstanding the
preceding sentence, unless otherwise expressly provided for under the Plan, no
contributions shall be made nor shall any forfeitures be allocated with respect
to a Participant who is no longer an Eligible Employee.
If an individual who is a Participant or former Participant (or who
otherwise satisfied the Plan's eligibility requirements but did not begin to
participate in the Plan) either terminates employment or ceases to be an
Eligible Employee (because of a transfer in position or otherwise) and later
becomes an Eligible Employee again, such individual shall immediately become a
Participant eligible to receive contributions.
2.3. WAIVER OF PARTICIPATION. Notwithstanding anything herein to the
-----------------------
contrary, an individual who has satisfied the Plan's eligibility requirements
can elect not to become a Plan Participant.
ARTICLE III
CONTRIBUTIONS AND FORFEITURES
3.1. ELECTIVE CONTRIBUTIONS.
(a) Each Participant may enter into a Contribution Agreement with
his Participating Employer specifying that a whole percentage (not exceeding 10%
or such other percentage designated by the Committee and applied on a
nondiscriminatory basis to all Participants) of Compensation will be contributed
to the Trust as an Elective Contribution. By agreeing to Elective Contributions,
the Participant agrees to a reduction in Compensation by the percentage
designated, and the Participating Employer agrees to contribute the amount of
reduced Compensation to the Trust.
(b) Each Contribution Agreement shall be in the form prescribed
or approved by the Committee and may be entered into or changed by the
Participant, with such prior notice as the Committee may prescribe, as of the
first day of any calendar quarter. A Contribution Agreement may be revoked by
the Participant, with such prior notice as the Committee may prescribe, as of
the last day of any calendar month. A Contribution Agreement shall be effective
with respect to Compensation payable on and after the date the Contribution
Agreement is received by the Committee or as soon as practicable thereafter, as
determined by the Committee.
3.2. MATCHING CONTRIBUTIONS.
(a) For each payroll period, each Participating Employer shall
make a Matching Contribution to the Trust for the benefit of each Participant on
whose behalf it made Elective Contributions for such Plan Year who is employed
by the Employer on the last day of
(8)
<PAGE>
such payroll period. The amount of Matching Contributions made by a
Participating Employer for the payroll period on behalf of a Participant shall
be equal to 50% of the sum of the Elective Contributions made on behalf of the
Participant for the current payroll period and all prior payroll periods in the
Plan Year which do not exceed 4% of the Participant's cumulative Compensation
for the Plan Year, reduced by all prior Matching Contributions made on behalf of
the Participant for the Plan Year.
(b) Matching Contributions shall satisfy the requirements of Code
Section 401(k)(3)(D)(ii)(I); they will be Nonforfeitable when made and will be
subject to the same distribution rules as Elective Contributions.
3.3. DISCRETIONARY CONTRIBUTIONS.
(a) Each Plan Year the Company, in its sole discretion, shall
determine whether a Discretionary Contribution shall be made to the Trust for
the Plan Year, and the amount thereof. If the Company determines that a
Discretionary Contribution is to be made, each Participating Employer shall
contribute its pro rata portion thereof, based on its Employees who participate
in the Plan. Discretionary Contributions may be made whether or not the Company
or any Participating Employer has any net profits.
(b) Discretionary Contributions for a Plan Year shall be
allocated among and credited to the Discretionary Contribution Accounts of all
Participants who either (i) are Employees on the last day of the Plan Year and
complete at least 1,000 Hours of Service during the Plan Year or (ii) who cease
to be Employees during the Plan Year by reason of death, Disability or
separation from service after attainment of the Normal Retirement Age. The
Discretionary Contribution for a Plan Year shall be allocated to the Accounts of
Participants described in the preceding sentence in proportion to their relative
amounts of Compensation for that portion of the Plan Year during which they were
both a Participant and an Eligible Employee.
3.4. QUALIFIED NONELECTIVE CONTRIBUTIONS. In order to satisfy the
-----------------------------------
Code Section 401(k)(3) and/or the Code Section 401(m) requirements, the Company,
in its discretion, may determine that a QNEC shall be made to the Trust for a
Plan Year. If the Company so determines it shall also determine (i) the amount
thereof and (ii) whether the QNEC shall be allocated solely to Participants who
are Nonhighly Compensated Employees. If the Company determines that a QNEC shall
be made, each Participating Employer shall contribute its pro rata portion
thereof, based on its Employees who participate in the Plan. A QNEC for a Plan
Year shall be allocated among and credited to the QNEC Accounts of all
Participants (or, if applicable, the QNEC Accounts of all Nonhighly Compensated
Employee Participants) who are eligible for Elective Contributions for the Plan
Year, in proportion to their relative amounts of Compensation for the Plan Year.
QNECs shall be 100% Nonforfeitable at all times and shall be subject to the same
distribution rules as Elective Contributions.
3.5. VOLUNTARY AFTER-TAX CONTRIBUTIONS.
(a) Each Participant may enter into a Voluntary Contribution
Agreement with his Participating Employer specifying that a whole percentage
(not exceeding 10% or such
(9)
<PAGE>
other percentage designated by the Committee and applied on a nondiscriminatory
basis to all Participants) of Compensation will be contributed to the Trust as a
Voluntary After-Tax Contribution. In addition, solely during the first calendar
quarter of 1998, each Participant may enter into a Voluntary Contribution
Agreement with his Participating Employer specifying that a percentage of a
bonus otherwise payable to the Participant shall be contributed to the Trust as
a Voluntary After-Tax Contribution. By agreeing to Voluntary After-Tax
Contributions, the Participant agrees to a withholding in Compensation by the
percentage designated and the Participating Employer agrees to contribute an
equivalent amount to the Trust.
(b) Each Voluntary Contribution Agreement shall be in the form
prescribed or approved by the Committee and may be entered into or changed by
the Participant, with such prior notice as the Committee may prescribe, as of
the first day of any calendar month. A Voluntary Contribution Agreement may be
revoked by the Participant, with such prior notice as the Committee may
prescribe, as of the last day of any calendar month. A Voluntary Contribution
Agreement shall be effective with respect to Compensation payable on and after
the date the Contribution Agreement is received by the Committee or as soon as
practicable thereafter, as determined by the Committee.
3.6. ROLLOVER CONTRIBUTIONS. Subject to the consent of the Committee,
----------------------
an Eligible Employee may make a Rollover Contribution to the Plan of amounts
distributed (directly or indirectly) from other qualified plans and conduit
IRAs, provided that the contribution of such amount will not jeopardize the tax-
exempt status of the Plan or Trust and will not create any adverse tax
consequences for the Company or an Employer. Prior to accepting any such
contribution, the Committee may require the Eligible Employee to establish that
the amounts to be contributed satisfy the rollover requirements of the Code and
this Section.
3.7. TIME FOR MAKING CONTRIBUTIONS. Elective Contributions and
-----------------------------
Voluntary After-Tax Contributions shall be paid to the Trust as soon as such
contributions can reasonably be segregated from the general assets of the
Participating Employer, but in any event, within 15 business days after the end
of the month for which the Compensation to which such contributions relate is
paid. Matching Contributions, Discretionary Contributions and QNECs for a Plan
Year shall be contributed not later than the time prescribed by law (including
extensions) for filing the Participating Employer's federal income tax return
for its taxable year in or with which the Plan Year ends.
3.8. CREDITING OF CONTRIBUTIONS. Elective Contributions, Matching
--------------------------
Contributions and Voluntary After-Tax Contributions shall be allocated among and
credited to the respective Accounts of Participants eligible to share in such
contributions as of the Valuation Date coinciding with or next following the
date the contributions are received by the Trustee. Discretionary Contributions
and QNECs for a Plan Year shall be allocated among and credited to the
respective Accounts of Participants eligible to share in such contributions as
of the last of such Plan Year.
3.9. ALLOCATION OF FORFEITURES. Subject to Sections 5.4 and 9.8, as
-------------------------
of the last day of the Plan Year the Committee shall reallocate forfeitures
occurring in such Plan Year in the same manner as it allocates Discretionary
Contributions for such Plan Year.
(10)
<PAGE>
3.10. CODE LIMITATIONS. All contributions to the Plan (and reallocation
----------------
of forfeitures) are subject to the applicable limits set forth under Code
Sections 401(k), 401(m), 402(g), 404, and 415, as further described in ARTICLE
XI.
3.11. RETURN OF CONTRIBUTIONS. If any contribution by a Participating
-----------------------
Employer to the Trust is (i) made by reason of a good faith mistake of fact, or
(ii) believed by the Participating Employer in good faith to be deductible under
Code Section 404 for the taxable year when paid (or treated as paid under Code
Section 404(a)(6)), but the deduction is disallowed, the Trustee shall, upon
request by the Participating Employer, return to the Participating Employer the
excess of the amount contributed over the amount, if any, that would have been
contributed had there not occurred a mistake of fact or a mistake in determining
the deduction. Such excess shall be reduced by the losses of the Trust
attributable thereto, if and to the extent such losses exceed the gains and
income attributable thereto. In no event shall the return of a contribution
hereunder cause any Participant's Accounts to be reduced to less than they would
have been had the mistaken or nondeductible amount not been contributed. No
return of a contribution hereunder shall be made more than one year after the
mistaken payment of the contribution or disallowance of the deduction, as the
case may be. All contributions to the Plan are conditioned upon their
deductibility.
ARTICLE IV
PARTICIPANT ACCOUNTS
4.1. ACCOUNTS. The Committee shall establish and maintain (or cause the
--------
Trustee to establish and maintain) for each Participant such Accounts as are
necessary to carry out the purposes of this Plan. Without limiting the
foregoing, to the extent applicable, the Committee shall maintain the following
Accounts for each Participant: (1) an Elective Contributions Account which shall
be credited with Elective Contributions made on behalf of the Participant; (2) a
Matching Contributions Account which shall be credited with Matching
Contributions allocated to the Participant's Account; (3) a Discretionary
Employer Contributions Account which shall be credited with Discretionary
Contributions, reallocated forfeitures and Employer contributions which were
made under the True North Communications Inc. Stock Bonus Plan for BJK&E; (4) a
QNEC Account which shall be credited with QNECs allocated to the Participant's
Account; (5) a Voluntary After-Tax Contributions Account which shall be credited
with Voluntary After-Tax Contributions made by the Participant; and (6) Rollover
Contributions Account which shall be credited with a Participant's Rollover
Contributions.
4.2. ADJUSTMENT OF ACCOUNTS. As of each Valuation Date, each Account shall
----------------------
be adjusted to reflect the fair market value of the assets allocated to the
Account. In so doing, (i) each Account Balance will be increased by the amount
of contributions, income and gain allocable to such Account since the prior
Valuation Date; and (ii) each Account Balance will be decreased by the amount of
distributions from the Account and expenses and losses allocable to the Account
since the prior Valuation Date.
Any expenses relating to a specific Account or Accounts, including without
limitation, commissions or sales charges with respect to an investment in which
the Account participates, may be charged solely to the particular Account or
Accounts.
(11)
<PAGE>
4.3. INVESTMENT FUNDS. At the direction of the Pension Investment
----------------
Committee, the Trustee shall establish and maintain one or more investment
funds, with differing investment objectives, in which the Trust Fund shall be
invested (the "Investment Funds"). Except as provided in the following
paragraph and subject to rules established by the Committee (which rules shall
be applied in a uniform, nondiscriminatory manner), each Participant shall
direct the investment by the Trustee of amounts allocated to the Participant's
Accounts among any one or more or the Investment Funds. The Pension Investment
Committee may at any time, and from time to time, direct that a new Investment
Fund or Funds be established and/or discontinue an existing Investment Fund or
Funds. All dividends, interest and other income of, as well as any cash
received from the sale or exchange of securities or other property of an
Investment Fund, shall be invested and reinvested in the same Investment Fund.
Notwithstanding the preceding paragraph, the portion of a
Participant's Accounts which, as of the Effective Date, is held by the Trustee
in a separate fund which is invested by the Trustee primarily, if not
exclusively, in Qualifying Employer Securities (consisting of (i) the "Company
Stock Fund" as such term was defined under the Plan prior to the Effective Date
and (ii) the assets held under the True North Communications Inc. Stock Bonus
Plan for BJK&E which was merged into the Plan), shall not be invested in the
Investment Funds, but instead shall continue to be held by the Trustee in a
separate fund which is invested by the Trustee primarily, if not exclusively, in
Stock (the "TN Stock Fund"). However, subject to applicable securities laws and
only as and to the extent permitted by the Committee in accordance with rules
which it may establish (which rules may include amount limitations), each
Participant may, from time to time, direct the Trustee to transfer all or a
portion of his Account Balance which is invested in the TN Stock Fund into one
or more of the Investment Funds.
All investment directions shall be timely furnished to the Trustee by
the Committee, except to the extent that the Committee and the Trustee mutually
agree that the Trustee may accept investment instructions directly from
Participants. In making any investment of the assets of the Trust Fund among
the various Investment Funds, the Trustee shall be fully entitled to rely on
such directions furnished by the Committee or, if applicable under the preceding
sentence, by the Participant, and shall be under no duty to make any inquiry or
investigation with respect thereto. None of the Trustee, the Committee, or the
Pension Investment Committee shall be liable for any loss, nor shall any of such
parties be liable for any breach, resulting from a Participant's direction of
the investment of any part of his individual Account in one or more of the
Investment Funds.
The Plan is intended to be an "ERISA Section 404(c) plan" within the
meaning of regulations issued pursuant to such section. The Committee shall be
the fiduciary identified to furnish the information contemplated by ERISA
Section 404(c), but may designate on its behalf another person or entity to
provide such information or to perform any of the obligations of the Committee
under this Section 4.3.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.1. NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is
---------------------
65 years of age. If a Participant is employed by an Employer on or after
attainment of the
(12)
<PAGE>
Participant's Normal Retirement Age, the Participant's Account Balance shall
become 100% Nonforfeitable.
5.2. PARTICIPANT DISABILITY OR DEATH. If a Participant's employment
-------------------------------
with an Employer terminates as a result of death or disability, the
Participant's Account Balance shall become 100% Nonforfeitable.
5.3. VESTING SCHEDULE.
----------------
(a) ACCOUNTS WHICH ARE ALWAYS NONFORFEITABLE. A
Participant's Elective Contributions Account, Matching Contributions Account,
QNEC Account, Voluntary After-Tax Contributions Account and Rollover
Contributions Account shall always be 100% Nonforfeitable.
(b) DISCRETIONARY CONTRIBUTION ACCOUNT VESTING SCHEDULE.
Subject to Sections 5.1 and 5.2, a Participant's Nonforfeitable percentage of
his Discretionary Contributions Account shall be determined in accordance with
the following schedule:
<TABLE>
<CAPTION>
Percent of
Years of Service Nonforfeitable
With Employer Account Balance
------------- ------------------
<S> <C>
Less than 2................................................ None
2 years, but fewer than 3.................................. 17%
3 years, but fewer than 4.................................. 25%
4 years, but fewer than 5.................................. 40%
5 years, but fewer than 6.................................. 60%
6 years, but fewer than 7.................................. 80%
7 or More.................................................. 100%
</TABLE>
5.4. CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS /
---------------------------------------------------------
RESTORATION OF FORFEITED ACCOUNT BALANCE. If, pursuant to Article VI, a
- ----------------------------------------
partially-vested Participant receives a cash-out distribution, the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Account Balance derived from Discretionary Contributions. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Account Balance.
(a) RESTORATION AND CONDITIONS UPON RESTORATION. A
partially-vested Participant who is re-employed by the Employer after receiving
a cash-out distribution of the Nonforfeitable percentage of his Account Balance
may repay the Trustee the amount of the cash-out distribution attributable to
Employer contributions, unless the Participant no longer has a right to
restoration under the provisions of this Section 5.4. If a partially-vested
Participant
(13)
<PAGE>
makes the cash-out distribution repayment, the Committee, subject to the
conditions of this paragraph (a), shall restore his Account Balance attributable
to Employer contributions to the same dollar amount as the dollar amount of his
Account Balance on the Valuation Date immediately preceding the date of the
cash-out distribution, unadjusted for any gains or losses occurring subsequent
to that Valuation Date. If a partially-vested Participant makes the cash-out
distribution repayment, the Participant's restored Account Balance shall be
invested in the Investment Fund(s), in accordance with the Participant's
investment instructions in effect at the time of the repayment. The Committee
will not restore a re-employed Participant's Account Balance under this
paragraph if: (1) five years have elapsed since the Participant's first re-
employment date following the cash-out distribution; or (2) the Participant
incurred a Forfeiture Break in Service (as defined in Section 5.6).
(b) TIME AND METHOD OF RESTORATION. The Committee shall restore a
Participant's Account Balance in accordance with paragraph (a) as of the last
day of the Plan Year coincident with or immediately following the repayment. To
restore the Participant's Account Balance, the Committee, to the extent
necessary, shall allocate to the Participant's Account the amount, if any, of
Participant forfeitures which the Committee would otherwise allocate under
Section 3.9. To the extent such amount is insufficient to enable the Committee
to make the required restoration, the Employer shall contribute the additional
amount necessary to make the required restoration.
(c) 0% VESTED PARTICIPANT. A deemed cash-out rule applies to a 0%
vested Participant. A 0% vested Participant is a Participant whose Account
Balance derived from Employer contributions is entirely forfeitable at the time
of his termination of employment. Under the deemed cash-out rule, the Committee
will treat the 0% vested Participant as having received a cash-out distribution
on the date of the Participant's termination of employment or, if the
Participant's Account is entitled to an allocation of Employer contributions for
the Plan Year in which he separates from service, on the last day of that Plan
Year. For purposes of applying the restoration provisions of this Section 5.4,
the Committee will treat the 0% vested Participant as repaying his cash-out
"distribution" on the first date of his re-employment with the Employer.
5.5. BREAK IN SERVICE - VESTING. For purposes of this Article V, a
--------------------------
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service with the Employer.
5.6. INCLUDED YEARS OF SERVICE - VESTING. For purposes of
-----------------------------------
determining "Years of Service" under this ARTICLE, the Plan takes into account
all Years of Service which an Employee completes with an Employer, excluding
Plan Years prior to May 1, 1968 (the original effective date of the Plan). For
the sole purpose of determining a Participant's Nonforfeitable percentage of his
Account Balance derived from Employer contributions which accrued for his
benefit prior to a Forfeiture Break in Service, the Plan disregards any Year of
Service after the Participant incurs a Forfeiture Break in Service. The
Participant incurs a Forfeiture Break in Service when he incurs five consecutive
Breaks in Service.
5.7. FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
-----------------
Discretionary Contribution Account Balance occurs on the earlier of (i) the date
the Participant
(14)
<PAGE>
receives (or is deemed to receive) a cash-out distribution; or (ii) the last day
of the Plan Year in which the Participant first incurs a Forfeiture Break in
Service.
5.8. AMENDMENT TO VESTING SCHEDULE. Though the Company reserves the
-----------------------------
right to amend the vesting schedule at any time, the Committee shall not apply
the amended vesting schedule to reduce the Nonforfeitable percentage of any
Participant's Account Balance derived from Employer contributions (determined as
of the later of the date the Employer adopts the amendment, or the date the
amendment becomes effective) to a percentage less than the Nonforfeitable
percentage computed under the Plan without regard to the amendment.
If the Company makes a permissible amendment to the vesting schedule,
each Participant having at least three Years of Service with the Employer may
elect to have the percentage of his Nonforfeitable Account Balance computed
under the Plan without regard to the amendment. The Participant must file his
election with the Committee within 60 days of the latest of (a) the Employer's
adoption of the amendment; (b) the effective date of the amendment; or (c) his
receipt of a copy of the amendment. The Committee, as soon as practicable, must
forward a true copy of any amendment to the vesting schedule to each affected
Participant, together with an explanation of the effect of the amendment, the
appropriate form upon which the Participant may make an election to remain under
the vesting schedule provided under the Plan prior to the amendment and notice
of the time within which the Participant must make an election to remain under
the prior vesting schedule. For purposes of this Section, an amendment to the
vesting schedule includes any Plan amendment which directly or indirectly
affects the computation of the Nonforfeitable percentage of an Employee's rights
to his Employer derived Account Balance.
ARTICLE VI
PAYMENT OF BENEFITS
6.1. SEPARATION FROM SERVICE FOR REASONS OTHER THAN DEATH. Following
----------------------------------------------------
a Participant's separation from service for any reason other than death, the
Participant may receive (or begin to receive) his Nonforfeitable Account
Balance. The amount of the distribution shall be determined as of the Valuation
Date immediately preceding the date distribution is made.
6.2. TIME OF DISTRIBUTIONS. Distribution with respect to a
Participant's separation from service normally will be made as soon as
practicable after such separation from service. In the case of a Participant
whose Nonforfeitable Account Balance is valued in excess of $5,000 and who has
not yet attained age 65, however, distribution may not be made under this
Section unless (i) between the 30th and 90th day prior to the date distribution
is to be made, the Committee notifies the Participant in writing that he may
defer distribution until age 65; and (ii) the Participant consents to the
distribution in writing after the information described above has been provided
to him and files such consent with the Committee. Notwithstanding the foregoing,
distribution may commence less than 30 days after the required notification
described above is given provided that (i) the Committee clearly informs the
Participant that the Participant has a right to a period of at least 30 days
after receiving the notice to consider whether or not to elect a distribution,
and (b) the Participant, after receiving the notice, affirmatively elects a
distribution. A Participant's Nonforfeitable Account Balance will be considered
to be valued in
(15)
<PAGE>
excess of $5,000 if the value thereof exceeds $5,000 at the time of the
distribution in question or exceeded $5,000 at the time of any prior
distribution to the Participant. In the event that a Participant who has not
attained age 65 at the time of separation from service fails to consent to a
distribution at the time of separation from service, the Participant may later
request a distribution of all or a portion of his Nonforfeitable Account
Balance, and distribution will be made, provided the consent requirements of
this Section are then satisfied. Unless the Participant otherwise elects,
distribution under this Section will be made no later than the 60th day after
the close of the Plan Year in which occurs the later of the Participant's
separation from service or the Participant's attainment of age 65. A Participant
may, however, elect to defer distribution beyond such time, subject to the
minimum distribution rules provided in Section 6.5.
6.3. DISTRIBUTIONS AFTER A PARTICIPANT'S DEATH.
-----------------------------------------
(a) DEATH PRIOR TO SEPARATION FROM SERVICE. If a Participant dies
prior to his separation from the service of an Employer, the Participant's
Beneficiary shall receive (or begin to receive) the Participant's Nonforfeitable
Account Balance as soon as practicable following the Participant's death (or
when the Committee receives notification of or otherwise confirms the
Participant's death), but in no event later than December 31 of the fifth
calendar year following the year of the Participant's death.
(b) DEATH AFTER SEPARATION FROM SERVICE. If a Participant dies
after separation from service but before the distribution of his Accounts has
begun, the Participant's Beneficiary shall receive the Participant's
Nonforfeitable Account Balance. Distribution shall be made (or begin to be made)
as soon as practicable following the Participant's death (or when the Committee
receives notification of or otherwise confirms the Participant's death), but no
later than December 31 of the fifth calendar year following the year of the
Participant's death. If a Participant dies after separation from service, after
distribution of his Nonforfeitable Account Balance has begun, but before
distribution of his entire Nonforfeitable Account Balance has been completed,
distribution shall continue to be made to the Participant's Beneficiary on the
same schedule that distributions were made prior to the Participant's death,
unless the Beneficiary elects to accelerate payment.
(c) Any distribution to a Beneficiary under this Section shall be
determined as of the Valuation Date immediately preceding the date distribution
is made.
6.4. METHOD OF BENEFIT PAYMENT.
-------------------------
(a) Subject to Section 6.5, a Participant (or, in the case of
death, a Participant's Beneficiary) may elect distribution under one, or any
combination, of the following methods: (i) a single lump sum; (ii) multiple,
partial lump sum payments; or (iii) monthly, quarterly or annual installments
over no more than 15 years. In no event shall payment be made in the form of a
life annuity. The foregoing distribution options are, however, available only if
the Participant's Nonforfeitable Account Balance exceeds (or at the time of a
prior distribution exceeded) $5,000; otherwise, payment shall be made in a
single lump sum payment. In the event a benefit payment is due and the
Participant fails to elect a method of payment, payment shall be made in a
single lump sum.
(16)
<PAGE>
(b) All distributions shall be made in cash; provided, however,
that if a Participant's Account Balance is invested, in whole or in part, in the
TN Stock Fund, the portion so invested that is being distributed shall be paid
in whole shares of Stock unless the Participant elects to receive payment in
cash. Fractional shares of Stock shall in all events be paid in cash.
(c) If a Participant has elected to receive an installment
distribution, the Participant may at any time elect to accelerate the payment of
the remaining balance.
6.5. MINIMUM DISTRIBUTION RULES.
--------------------------
(a) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS.
Distributions hereunder may not be made under a method of payment which, as of
the "required beginning date," does not satisfy the Code Section 401(a)(9)
minimum distribution requirements. A Participant's "required beginning date"
generally is the April 1 following the close of the calendar year in which the
Participant attains age 70 1/2. However, if the Participant is not a 5% owner
(within the meaning of Code Section 416) and attains age 70 1/2 prior to
terminating employment, the Participant's "required beginning date" is the April
1 following the close of the calendar year in which the Participant separates
from service. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Account Balance as of the latest valuation date
preceding the beginning of the calendar year, divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code Section 401(a)(9) regulations). The
Committee will increase the Participant's Nonforfeitable Account Balance, as
determined on the relevant valuation date, for contributions or forfeitures
allocated after the valuation date and by December 31 of the valuation calendar
year, and will decrease the valuation by distributions made after the valuation
date and by December 31 of the valuation calendar year. For purposes of this
valuation, the Committee will treat any portion of the minimum distribution for
the first distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In computing a
minimum distribution, the Committee shall use the unisex life expectancy
multiples under Treas. Reg. (S)1.72-9. The Committee, only upon the
Participant's written request made prior to the required distribution date, may
compute the minimum distribution for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Committee may not
redetermine the joint life and last survivor expectancy of the Participant and a
nonspouse designated Beneficiary in a manner which takes into account any
adjustment to a life expectancy other than the Participant's life expectancy.
If the Participant's spouse is not the Participant's designated
Beneficiary, a method of payment to the Participant (whether by Participant
election or by Committee direction) may not provide more than incidental
benefits to the Beneficiary. The Plan must satisfy the minimum distribution
incidental benefit ("MDIB") requirements in the Treasury regulations promulgated
under Code Section 401(a)(9) for distributions made on or after the
Participant's required beginning date and before the Participant's death.
The minimum distribution for the first distribution calendar year is
due by the Participant's required beginning date. The minimum distribution for
each subsequent
(17)
<PAGE>
distribution calendar year, including the calendar year in which the
Participant's required beginning date falls, is due by December 31 of that year.
(b) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his required beginning date, the method of payment to the
Beneficiary must provide for completion of payment over a period which does not
exceed the payment period which had commenced for the Participant. If the
Participant's death occurs prior to his required beginning date, the method of
payment to the Beneficiary, subject to Section 6.4, must provide for completion
of payment to the Beneficiary over a period not exceeding: (i) five years after
the date of the Participant's death; or (ii) if the Beneficiary is a designated
Beneficiary, the designated Beneficiary's life expectancy. The Committee may not
direct payment of the Participant's Nonforfeitable Account Balance over a period
described in clause (ii) of the preceding sentence unless payment commences to
the designated Beneficiary no later than the December 31 following the close of
the calendar year in which the Participant's death occurred or, if later, and
the designated Beneficiary is the Participant's surviving spouse, December 31 of
the calendar year in which the Participant would have attained age 70 1/2. If
distribution is made in accordance with said clause (ii), the minimum
distribution for a calendar year equals the Participant's Nonforfeitable Account
Balance as of the latest Valuation Date preceding the beginning of the calendar
year divided by the designated Beneficiary's life expectancy. The Committee
shall use the unisex life expectancy multiples under Treas. Reg. (S)1.72-9 for
purposes of applying this paragraph. The Committee, only upon the written
request of the Participant or of the Participant's surviving spouse, may
recalculate the life expectancy of the Participant's surviving spouse not more
frequently than annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences payment to the
designated Beneficiary. The Committee shall apply this paragraph by treating any
amount paid to the Participant's child, which becomes payable to the
Participant's surviving spouse upon the child's attaining the age of majority,
as paid to the Participant's surviving spouse. Upon the Beneficiary's written
request, the Committee must direct the Trustee to accelerate payment of all, or
any portion, of the Participant's unpaid Account Balance, as soon as
administratively practicable following the effective date of that request.
(c) TEFRA ELECTIONS. Notwithstanding the foregoing provisions, if a
Participant signed a written distribution designation prior to January 1, 1984,
the Committee may distribute the Participant's Nonforfeitable Account Balance in
accordance with that designation. This paragraph does not apply to a pre-1984
distribution designation, and the Committee will not comply with that
designation, if any of the following applies: (1) the method of distribution
would have disqualified the Plan under Code Section 401(a)(9) as in effect on
December 31, 1983; (2) the Participant did not have an Account Balance as of
December 31, 1983; (3) the distribution designation does not specify the timing
and form of the distribution and the death Beneficiaries (in order of priority);
(4) the substitution of a Beneficiary modifies the payment period of the
distribution; or (5) the Participant (or Beneficiary) modifies or revokes the
distribution designation.
6.6. IN-SERVICE WITHDRAWALS.
----------------------
(18)
<PAGE>
(a) Except as expressly provided in the balance of this
ARTICLE, Plan benefits are not payable to a Participant prior to the
Participant's separation from service.
(b) Any Participant election to receive an in-service
withdrawal must be made on a form or in such manner prescribed by the Committee
in which the Participant specifies the percentage or dollar amount to be
distributed. The Participant's election shall relate solely to his Account
balance as of the Valuation Date coincident with or next following receipt of
his election form by the Committee. The Trustee shall make a distribution to a
Participant in accordance with the Participant's election under this Section as
soon as administratively practicable following its receipt of the Participant's
election form, but in no event more than 60 days from its receipt of the
Participant's election form.
6.7. WITHDRAWALS FROM ELECTIVE CONTRIBUTIONS ACCOUNT, MATCHING
---------------------------------------------------------
CONTRIBUTIONS ACCOUNT AND QNEC ACCOUNT AFTER ATTAINMENT OF AGE 59 1/2. After a
- ---------------------------------------------------------------------
Participant attains age 59 1/2, the Participant, until he retires, has a
continuing right to elect to withdraw all or any portion of his Deferral
Contributions Account, Matching Contributions Account and QNECs Account.
6.8. WITHDRAWALS AFTER ATTAINMENT OF AGE 65. After a Participant
--------------------------------------
attains age 65, the Participant, until he retires, has a continuing right to
elect to withdraw all or any portion of his Account Balance.
6.9. HARDSHIP WITHDRAWALS.
--------------------
(a) Subject to the rules set forth in paragraph (b), a
Participant may elect to withdraw the Elective Contributions allocated to the
Participant's Elective Contributions Account (plus any earnings on the
Participant's Elective Contributions credited before January 1, 1989) on account
of a hardship.
(b) For purposes hereof, a withdrawal is on account of
hardship only if it is both (i) made on account of an immediate and heavy
financial need of the Participant; and (ii) is necessary to satisfy the
financial need. A withdrawal will be considered as made on account of an
immediate and heavy financial need only if it is for: (1) medical expenses
described in Code Section 213(d) incurred by the Participant, by the
Participant's spouse, or by any of the Participant's dependents; (2) the
purchase (excluding mortgage payments) of a principal residence for the
Participant; (3) the payment of post-secondary education tuition, for the next
semester or for the next quarter, for the Participant, for the Participant's
spouse, or for any of the Participant's dependents; or (4) to prevent the
eviction of the Participant from his principal residence or the foreclosure on
the mortgage of the Participant's principal residence. The amount necessary to
meet a financial need may include any amounts necessary to pay any income taxes
or penalties reasonably anticipated to result form the distribution. The
Committee shall determine whether there is an immediate and heavy financial need
as defined above solely on written evidence furnished by the Participant, which
evidence must also indicate the amount of the need.
In order that it be deemed necessary to satisfy the financial need,
the following restrictions apply to a hardship withdrawal: (a) the Participant
may not make elective deferrals
(19)
<PAGE>
or employee contributions to the Plan for the 12-month period following the date
of his hardship withdrawal; (b) the withdrawal may not exceed the amount of the
immediate and heavy financial need; (c) the Participant must have obtained all
distributions, other than hardship distributions, and all nontaxable loans
currently available under this Plan and all other qualified plans maintained by
the Employer; and (d) the Participant agrees to limit elective deferrals under
this Plan and under any other qualified Plan maintained by the Employer, for the
Participant's taxable year immediately following the taxable year of the
hardship distribution, to the Code Section 402(g) limitation, reduced by the
amount of the Participant's elective deferrals made in the taxable year of the
hardship distribution.
6.10. WITHDRAWALS FROM VOLUNTARY AFTER-TAX CONTRIBUTIONS ACCOUNT AND
--------------------------------------------------------------
ROLLOVER CONTRIBUTIONS ACCOUNT. A Participant, until he retires, has a
- ------------------------------
continuing right to elect to withdraw all or any portion of his After-Tax
Contribution Account and his Rollover Contributions Account.
6.11. DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing
---------------------------------------------
contained in this Plan shall prevent the Trustee, in accordance with the
direction of the Committee, from complying with the provisions of a qualified
domestic relations order, as defined in Code Section 414(p). The Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age (as defined under Code Section 414(p))
under the Plan. A distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (1) the order
specifies distribution at that time or permits an agreement between the Plan and
the alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $5,000, and the
order requires, the alternate payee consents to any distribution occurring prior
to the Participant's attainment of earliest retirement age. Nothing in this
Section 6.11 permits a Participant a right to receive distribution at a time
otherwise not permitted under the Plan nor does it permit the alternate payee to
receive a form of payment not permitted under the Plan.
The Committee shall establish reasonable procedures to determine the
qualified status of a domestic relations order.
If any portion of the Participant's Nonforfeitable Account Balance is
payable during the period the Committee is making its determination of the
qualified status of the domestic relations order, the Committee shall make a
separate accounting of the amounts payable. If the Committee determines the
order is a qualified domestic relations order within 18 months of the date
amounts first are payable following receipt of the order, the Committee shall
direct the Trustee to distribute the payable amounts in accordance with the
order. If the Committee does not make its determination of the qualified status
of the order within the 18-month determination period, the Committee shall
direct the Trustee to distribute the payable amounts in the manner the Plan
would distribute if the order did not exist and shall apply the order
prospectively if the Committee later determines the order is a qualified
domestic relations order.
6.12. DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS. A
---------------------------------------------------
Participant may elect, at the time and in the manner prescribed by the
Committee, to have any
(20)
<PAGE>
portion of his eligible rollover distribution paid directly to an eligible
retirement plan specified by the Participant in a direct rollover designation.
For purposes of this Section 6.12, a Participant includes a Participant's
surviving spouse and the Participant's spouse or former spouse who is an
alternate payee under a qualified domestic relations order.
The following definitions apply to this Section:
(1) ELIGIBLE ROLLOVER DISTRIBUTION. An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
Participant, except an eligible rollover distribution does not include: any
distribution which is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies) of the
Participant and the Participant's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent required under Code
Section 401(a)(9); and the portion of any distribution which is not includible
in gross income (determined without regard to the exclusion of net unrealized
appreciation with respect to employer securities).
(2) ELIGIBLE RETIREMENT PLAN. An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 401(a),
which accepts the Participant's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.
(3) DIRECT ROLLOVER. A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
6.13. PARTICIPANT LOANS.
-----------------
(a) A Participant may request and the Trustee is specifically
authorized to make loans to Participants on a nondiscriminatory basis in
accordance with a Participant loan policy established by the Committee,
provided: (1) the loan policy satisfies the requirements of paragraph (b); (2)
loans are available to all Participants on a reasonably equivalent basis and are
not available in a greater amount for HCEs; (3) any loan is adequately secured
and bears a reasonable rate of interest; (4) the loan provides for repayment
within a specified time; (5) the default provisions of the note prohibit offset
of the Participant's Nonforfeitable Account Balance prior to the time the
Trustee otherwise would distribute the Participant's Nonforfeitable Account
Balance; (6) the amount of the loan does not exceed (at the time the Plan
extends the loan) the present value of the Participant's Nonforfeitable Account
Balance; and (7) the loan otherwise conforms to the exemption provided by Code
Section 4975(d)(1). If a Participant defaults on a loan made pursuant to a loan
policy adopted by the Committee, the default shall be deemed to be a
distributable event. The Trustee, at the time of the default, shall reduce the
Participant's Nonforfeitable Account Balance by the lesser of the amount in
default (plus accrued interest) or the Plan's security interest in the
Nonforfeitable Account Balance. The note evidencing a loan to a Participant
under this Section shall be an asset of the Trust which is allocated to the
Account of the Participant borrower, and for purposes of the Plan shall be
deemed to have a value at any
(21)
<PAGE>
given time equal to the unpaid principal balance of the note plus the amount of
accrued but unpaid interest.
(b) A loan policy satisfies the requirements of this paragraph (b) if
it is in writing and includes: (1) the identity of the person or positions
authorized to administer the participant loan program; (2) a procedure for
applying for the loan; (3) the criteria for approving or denying a loan; (4) the
limitations, if any, on the types and amounts of loans available; (5) the
procedure for determining a reasonable rate of interest; (6) the types of
collateral which may secure the loan; and (7) the events constituting default
and the steps the Plan will take to preserve plan assets in the event of
default.
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.1. INFORMATION TO COMMITTEE. Each Employer shall supply current
------------------------
information to the Committee as to the name, date of birth, date of employment,
annual compensation, leaves of absence, Years of Service and date of termination
of employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the
Committee considers necessary. The Employer's records as to the current
information the Employer furnishes to the Committee are conclusive as to all
persons.
7.2. NO LIABILITY. The Employers assume no obligation or responsibility
------------
to any of their Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of the Committee, the Trustee or the Plan
Administrator.
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.1. BENEFICIARY DESIGNATION. Each Participant may from time to time
-----------------------
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Account Balance (including, if applicable, any
life insurance proceeds payable to the Participant's Account) on event of his
death and (subject to the provisions of ARTICLE VI) the Participant may
designate the form and method of payment. The Committee shall prescribe the
form for the written designation of Beneficiary and, upon the Participant's
filing the form with the Committee, the form effectively revokes all
designations filed prior to that date by the same Participant.
A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent and a notary public
or the Committee (or its representative) must witness that consent. The spousal
consent requirements of this paragraph do not apply if: (1) the Participant and
his spouse are not married throughout the one year period ending on the date of
the Participant's death; (2) the Participant's spouse is the Participant's sole
primary beneficiary; (3) the Committee is not able to locate the Participant's
spouse; (4) the Participant is legally separated or has been abandoned (within
the meaning of State law) and the Participant has a court order to that effect;
or (5) other circumstances exist under which the
(22)
<PAGE>
Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
8.2. NO BENEFICIARY DESIGNATION. If a Participant fails to name a
--------------------------
Beneficiary in accordance with Section 8.1 or if the Beneficiary named by a
Participant predeceases him or dies before complete distribution of the
Participant's Account Balance as prescribed by the Participant's Beneficiary
form, then the Committee shall direct the Trustee to pay the Participant's
Account Balance in accordance with ARTICLE VI in the following order of priority
to:
(i) the Participant's surviving spouse;
(ii) the Participant's surviving children, including
adopted children, in equal shares;
(iii) the Participant's surviving parents, in equal shares;
or
(iv) the legal representative of the estate of the last to
die of the Participant and his Beneficiary.
8.3. PERSONAL DATA TO COMMITTEE. Each Participant and each
--------------------------
Beneficiary of a deceased Participant must furnish to the Committee such
evidence, data or information as the Committee considers necessary or desirable
for the purpose of administering the Plan. The provisions of this Plan are
effective for the benefit of each Participant upon the condition precedent that
each Participant will furnish promptly full, true and complete evidence, data
and information when requested by the Committee, provided the Committee advises
each Participant of the effect of his failure to comply with its request.
8.4. ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary
------------------------
of a deceased Participant must file with the Committee from time to time, in
writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Committee, or as shown on the
records of the Employer, binds the Participant, or Beneficiary, for all purposes
of this Plan.
8.5. ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p)
------------------------
relating to qualified domestic relations orders, neither a Participant nor a
Beneficiary may anticipate, assign or alienate (either at law or in equity) any
benefit provided under the Plan, and the Trustee shall not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan is
not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.6. INFORMATION AVAILABLE. Any Participant or Beneficiary may
---------------------
examine copies of the Plan description, latest annual report, the Plan, the
Trust Agreement, or any other instrument under which the Plan was established or
is operated. The Committee shall maintain all of the items listed in this
Section 8.7 in its office, or in such other place or places as it may designate
from time to time in order to comply with the regulations issued under ERISA,
(23)
<PAGE>
for examination during reasonable business hours. Upon the written request of a
Participant or Beneficiary the Committee shall furnish the Participant or
Beneficiary with a copy of any item listed in this Section 8.7 The Committee may
make a reasonable charge to the requesting person for the copy so furnished.
8.7. BENEFIT CLAIMS AND APPEAL PROCEDURES.
------------------------------------
(a) Claims for benefits under the Plan shall be submitted in
writing to the Committee or a person designated by the Committee for this
purpose.
(b) Any denial by the Committee of a claim for benefits under the
Plan by a Participant or Beneficiary (a "Claimant") or his authorized
representative shall be stated in writing by the Committee and delivered or
mailed to the Claimant. Such notice shall set forth in a manner calculated to be
understood by the Claimant the specific reason or reasons for the denial, make
specific reference to pertinent provisions of the Plan on which the denial is
based, furnish 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 set forth an explanation of the Plan's claim
review procedure. Such notice shall be provided to the Claimant within 90 days
of receipt by the Committee of the claim; provided, however, that such 90 day
period may upon notice be extended for another 90 days for special
circumstances. If a notice of denial is not furnished within the aforementioned
period, the claim shall be deemed denied and the Claimant may request a review
thereof pursuant to the procedures set forth in the following paragraphs.
(c) Within 60 days after receipt by a Claimant of written
notification of the denial of a claim, such Claimant (or his duly authorized
representative) may request, in a writing addressed to the Committee, a review
of the Committee's denial of his claim, submit issues and comments thereon, and
request an opportunity to review at any reasonable time pertinent documents
pertaining to the Plan, including such records of the Plan as pertain to the
Claimant.
(d) Upon receipt of a timely request for review, the Committee
may, in its discretion, designate one or more persons to hear the Claimant's
request and inquire into the merits of the matter. Such designee shall meet
promptly with the Claimant and/or his duly authorized representative and hear
such arguments and examine such documents as the Claimant or his representative
shall present. The designee shall then report his findings to the Committee
orally or in writing.
(e) Within 60 days after the receipt by the Committee of a
request for review by the Claimant, the Committee shall render a decision on
review. In the event that special circumstances require an extension of time
beyond 60 days after receipt of the request for review for the processing of
such request for review, the Committee shall render a decision on review as soon
as possible, but in no event will the decision on review be rendered later than
120 days after receipt of a request for review. The decision on review shall be
in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the Claimant, and make specific reference
to the pertinent provisions of the Plan on which the decision is based.
(24)
<PAGE>
ARTICLE IX
ADMINISTRATIVE COMMITTEE
9.1. APPOINTMENT OF COMMITTEE. The Company shall appoint a group of
------------------------
individuals to serve as the administrative committee (the "Committee") to
administer the Plan. The Company at any time, and from time to time, may add or
subtract Committee members. Committee members may, but need not be,
Participants.
The members of the Committee shall serve without compensation for
services as such. The direct expenses of the Committee, including personnel and
any bonds required under ERISA, may, however, be paid either by the Employer or
from the Trust, in accordance with Section 10.4.
9.2. TERM. Each member of the Committee shall continue to serve until
----
he is removed by the Company or until he resigns. The Company may, but need not
require an accounting, upon the removal or resignation of a Committee member.
Upon the removal or resignation of a Committee member, the remaining members of
the Committee may exercise any and all of the powers, authority, duties and
discretion conferred upon the Committee pending the filling of the vacancy.
9.3. GENERAL. The Committee has the following powers and duties:
-------
(i) to determine the rights of eligibility of an
Employee to participate in the Plan, the value of a Participant's Account
Balance and the Nonforfeitable percentage of each Participant's Account
Balance;
(ii) to interpret and construe the terms of the Plan in
its complete and unfettered discretion;
(iii) to adopt rules and regulations necessary or
appropriate for the proper and efficient administration of the Plan;
(iv) to enforce the terms of the Plan and the rules and
regulations it adopts;
(v) to direct the Trustee as respects the crediting and
distribution of the Trust;
(vi) to review and render decisions respecting a claim
for (or denial of a claim for) a benefit under the Plan and the amount thereof;
(vii) to furnish the Employer with information which the
Employer may require for tax or other purposes;
(viii) to allocate and delegate its ministerial duties and
responsibilities and to appoint such agents, counsel, accountants and
consultants as may be required or desired to assist in administering the Plan;
and
(25)
<PAGE>
(ix) to establish nondiscriminatory procedures for
Participant loans.
Without limiting the foregoing, the Committee shall have the right to
interpret and construe the Plan's terms, determine all questions of eligibility
and status under the Plan and exercise the fullest discretion permitted by law
regarding Plan administration. The decisions of the Committee shall be final
and binding.
9.4. MANNER OF ACTION. The Committee may make decisions and take
----------------
action by a majority of its members.
9.5. AUTHORIZED REPRESENTATIVE. The Committee may authorize one or
-------------------------
more of its members, t o sign on its behalf any notices, directions,
applications, certificates, consents, approvals, waivers, letters or other
documents.
9.6. INTERESTED MEMBER. No member of the Committee may decide or
-----------------
determine any matter concerning the distribution, nature or method of settlement
of his own benefits under the Plan, except in exercising an election available
to that member in his capacity as a Participant.
9.7. INDIVIDUAL STATEMENT. As soon as practicable after the last day
--------------------
of each Plan Year, but within the time prescribed by ERISA and the regulations
under ERISA, the Plan Administrator s hall deliver to each Participant (and to
each Beneficiary) a statement reflecting the condition of his Account Balance in
the Trust as of that date and such other information ERISA requires be furnished
the Participant or Beneficiary. No Participant, except a member of the
Committee, has the right to inspect the records reflecting the Account of any
other Participant.
9.8. UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
---------------------------
Trustee or the Committee to search for, or ascertain the whereabouts of, any
Participant or Beneficiary. At the time a Participant's or Beneficiary's
benefit becomes distributable under Article VI, the Committee, by certified or
registered mail addressed to his last known address of record with the Committee
or the Employer, shall notify any Participant, or Beneficiary, that he is
entitled to a distribution under this Plan. If the Participant, or Beneficiary,
fails to claim his distributive share or make his whereabouts known in writing
to the Committee within 6 months from the date of mailing of the notice, the
Committee may treat the Participant's or Beneficiary's unclaimed payable Account
Balance as forfeited and reallocate the unclaimed payable Account Balance in
accordance with Section 3.9. Where the benefit is distributable to the
Participant, the forfeiture under this paragraph occurs as of the last day of
the notice period, if the Participant's Nonforfeitable Account Balance does not
exceed $5,000, or as of the first day the benefit is distributable without the
Participant's consent, if the present value of the Participant's Nonforfeitable
Account Balance exceeds $5,000. Where the benefit is distributable to a
Beneficiary, the forfeiture occurs on the date the notice period ends except, if
the Beneficiary is the Participant's spouse and the Nonforfeitable Account
Balance payable to the spouse exceeds $5,000, the forfeiture occurs as of the
first day the benefit is distributable without the spouse's consent. Pending
forfeiture, the Committee, following the expiration of the notice period, may
direct the Trustee to segregate the Nonforfeitable Account Balance in a
segregated Account and
(26)
<PAGE>
to invest that segregated Account in Federally insured interest bearing savings
accounts or time deposits (or in a combination of both), or in other fixed
income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Account Balance under the provisions of the first paragraph of this Section 9.8
makes a claim, at any time, for his forfeited Account Balance, the Committee
shall restore the Participant's or Beneficiary's forfeited Account Balance to
the same dollar amount as the dollar amount of the Account Balance forfeited,
unadjusted for any gains or losses occurring subsequent to the date of the
forfeiture. The Committee will make the restoration during the Plan Year in
which the Participant or Beneficiary makes the claim, first from the amount, if
any, of Participant forfeitures the Committee otherwise would allocate for the
Plan Year, and then from the amount, or additional amount, the Employer
contributes to enable the Committee to make the required restoration. The
Committee shall direct the Trustee to distribute the Participant's or
Beneficiary's restored Account Balance to him not later than 60 days after the
close of the Plan Year in which the Committee restores the forfeited Account
Balance.
ARTICLE X
TRUST
10.1. TRUST AGREEMENT. The Company has entered into a Trust Agreement
---------------
with the Trustee. Such Trust Agreement shall be deemed to form a part of the
Plan and all rights which may accrue to any person under the Plan shall be
subject to the terms of the Trust Agreement.
10.2. INVESTMENT IN QUALIFYING EMPLOYER SECURITIES. The Plan is
--------------------------------------------
intended to be an "eligible individual account plan" within the meaning of
Section 407 of ERISA. Accordingly, the Trustee is authorized to acquire and hold
Qualifying Employer Securities and "qualifying employer real property" (as such
term is defined in ERISA Section 407). Furthermore, the Trustee is authorized
and directed to invest the TN Stock Fund primarily, if not exclusively, in
Qualifying Employer Securities.
10.3. PENSION INVESTMENT COMMITTEE; FUNDING POLICY. The Pension
--------------------------------------------
Investment Committee shall (i) periodically review all pertinent Employee
information and Plan data in order to establish the funding and investment
policy of the Plan and to determine the appropriate methods of carrying out the
Plan's objectives; and (ii) be responsible for selecting the Investment Funds
and monitoring their performance, in accordance with Section 4.3. The Pension
Investment Committee shall also have the power to engage the services of an
Investment Manager or Managers (as defined in ERISA Section 3(38)), each of whom
will have full power and authority to manage, acquire or dispose (or direct the
Trustee with respect to acquisition or disposition) of any Plan asset under its
control. The Pension Investment Committee shall communicate periodically, as it
deems appropriate, to the Trustee and to any Plan Investment Manager the Plan's
short-term and long-term financial needs so investment policy can be coordinated
with Plan financial requirements.
10.4. FEES AND EXPENSES FROM TRUST FUND. Each Plan fiduciary shall be
---------------------------------
entitled to receive reasonable compensation to the extent agreed upon from time
to time between the Company and the fiduciary, except that no person who is
receiving full pay from an
(27)
<PAGE>
Employer may receive compensation for services as a fiduciary, and a fiduciary
may receive reimbursement of expenses properly and actually incurred in the
performance of its duties with the Plan. The Trustee shall pay all fees and
expenses reasonably incurred in the administration of the Plan from the Trust
Fund, unless the Company or another Employer pays the fees and expenses. The
Committee shall not treat any fee or expense paid, directly or indirectly, by
the Company or an Employer as an Employer contribution, provided the fee or
expense relates to the ordinary and necessary administration of the Plan or
Trust Fund.
10.5. PARTIES TO LITIGATION. Except as otherwise provided by ERISA, only
---------------------
the Company, the Participating Employers, the Plan Administrator, the Committee,
the Pension Investment Committee and the Trustee are necessary parties to any
court proceeding involving the Trustee or the Trust Fund. No Participant, or
Beneficiary, is entitled to any notice of process unless required by ERISA. Any
final judgment entered in any proceeding will be conclusive upon the Employer,
the Plan Administrator, the Committee, the Trustee, Participants and
Beneficiaries.
10.6. DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution
-----------------------
made from the Trust, the Trustee shall promptly notify the Committee and then
dispose of the payment in accordance with the subsequent direction of the
Committee.
10.7. VOTING RIGHTS. The Trustee shall vote, in person or by proxy,
-------------
shares of Stock allocated to the Account of a present or former Participant (or,
in the event of his death, the present or former Participant's Beneficiary) in
accordance with instructions obtained from such Participant. Each Participant
shall be entitled to give voting instructions with respect to the number of
shares of Stock allocated to his Account as of the Valuation Date prior to the
stockholder record date for such vote. Written notice of any meeting of
stockholders of Parent Corporation and a request for voting instructions shall
be given by the Trustee or the Committee, at such time and in such manner as the
Committee shall determine, to each Participant entitled to give instructions for
voting shares of Stock at such meeting. All shares of Stock allocated to
Participant Accounts for which no voting instructions are received and all
shares of Stock not allocated to Participant Accounts as of the stockholder
record date shall, to the extent permitted by law, be voted by the Trustee in
the same proportions as shares for which instructions are received.
10.8. TENDER OFFERS.
-------------
(a) In the event a tender or exchange offer is made generally to the
stockholders of Parent Corporation to transfer all or a portion of their shares
of Stock in return for valuable consideration, including but not limited to,
offers regulated by Section 14(d) of the Securities Exchange Act of 1934, as
amended, the Trustee shall respond to such tender or exchange offer in respect
of shares of Stock allocated to an Account of a present or former Participant
(or, in the event of his death, the present or former Participant's Beneficiary)
in accordance with instructions obtained from such Participant. Each
Participant shall be entitled to give instructions with respect to tendering or
withdrawal from tender of such Shares. A Participant shall not be limited in
the number of instructions to tender or withdraw from tender which he can give
but a Participant shall not have the right to give instructions to tender or
withdraw from tender after a reasonable time established by the Trustee pursuant
to paragraph
(28)
<PAGE>
(c) below. The Trustee shall, to the extent permitted by law, respond to any
such tender or exchange offer in respect of all shares of Stock allocated to
Participant Accounts for which no instructions are received and all shares of
Stock not allocated to Participant Accounts in the same proportions as shares
for which instructions are received. All instructions from Participants shall be
kept confidential and shall not be disclosed to any person, including the
Employer or Parent Corporation.
(b) Within a reasonable period of time after the commencement of a
tender or exchange offer, the Committee or the Trustee shall provide to each
Participant:
(i) the offer to purchase or exchange, as distributed by
the offeror to the stockholders of the Parent Corporation,
(ii) a statement of the shares of Stock allocated to his
Account, and
(iii) directions as to the means by which a Participant
can give instructions with respect to the tender or exchange offer.
The Committee shall establish and pay for a means by which a Participant
can expeditiously deliver to the Committee instructions addressed to the Trustee
with respect to a tender or exchange offer. The Committee shall transmit to the
Trustee aggregate numbers of shares of Stock to be tendered or withheld from
tender representing instructions of Participants. The Committee, at its
election, may engage an agent to receive instructions from Participants and
transmit them to the Trustee.
(c) The Trustee shall follow the instructions of the Participants
with respect to the tender or exchange offer as transmitted to the Trustee. The
Trustee may establish a reasonable time, taking into account the time
restrictions of the tender or exchange offer, after which it will not accept
Participant instructions.
ARTICLE XI
LIMITS ON CONTRIBUTIONS
11.1. SECTION 404 LIMITS. The sum of the contributions made by each
------------------
Participating Employer under the Plan for any Plan Year shall not exceed the
maximum amount deductible under the applicable provisions of the Code. All
contributions under the Plan made by a Participating Employer are expressly
conditioned on their deductibility under Code Section 404 for the taxable year
when paid (or treated as paid under Code Section 404(a)(6)).
11.2. SECTION 415 LIMITS.
------------------
(a) INCORPORATION BY REFERENCE. Code Section 415 is hereby
incorporated by reference into the Plan.
(b) LIMITATION YEAR. For purposes of determining the Code Section 415
limits under the Plan, the "limitation year" shall be the calendar year.
(29)
<PAGE>
(c) SATISFYING LIMITATIONS. To the extent necessary to satisfy the
limitations of Code Section 415 for any Participant, the annual addition which
would otherwise be made on behalf of the Participant under the Plan shall be
reduced before the Participant's benefit is reduced under any and all defined
benefit plans, and before the Participant's annual addition is reduced under any
other defined contribution plan.
(d) CORRECTIONS. If, as a result of the allocation of forfeitures, a
reasonable error in estimating a Participant's compensation for a Plan Year or
limitation year, a reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that may be made with
respect to any individual under the limits of Code Section 415, or under such
other facts and circumstances as may be permitted under regulation or by the
Internal Revenue Service, the annual addition under the Plan for a Participant
would cause the Code Section 415 limitations for a limitation year to be
exceeded, the excess amounts shall be disposed of as follows: (1) first, by
returning Voluntary After-Tax Contributions to the Participant in an amount not
to exceed the excess; and (2) any remaining excess shall be disposed of in
accordance with the rules provided in Treas. Reg. (S)1.415-6(b)(6)(ii).
11.3. SECTION 402(g) LIMITS.
---------------------
(a) IN GENERAL. The maximum amount of Elective Contributions made on
behalf of any Participant for any calendar year, when added to the amount of
elective deferrals (as hereinafter defined) under all other plans, contracts and
arrangements of an Employer with respect to the Participant for the calendar
year), shall in no event exceed the maximum applicable limit in effect for the
calendar year under Treas. Reg. (S)1.4021(g)-l(d). For purposes of the Plan, an
individual's "elective deferrals" for a taxable year are the sum of the
following: (i) any elective contribution under a qualified cash or deferred
arrangement (as defined in Code Section 401(k)) to the extent not includible in
the individual's gross income for the taxable year on account of Code Section
402(a)(8) (before applying the limits of Code Section 402(g) or this section);
(ii) any employer contribution to a Code Section 408(k) simplified employee
pension (a "SEP") to the extent not includible in the individual's gross income
for the taxable year under Code Section 401(h)(1)(B) (before applying the limits
of Code Section 402(g)); (iii) any employer contribution to a custodial account
or annuity contract under Code Section 403(b) under a salary reduction agreement
(within the meaning of Code Section 3121(a)(5)(D)), to the extent not includible
in the individual's gross income for the taxable year on account of Code Section
403(b) before applying the limits of Code Section 402(g); (iv) any elective
employee contribution to a simple retirement account under a qualified salary
reduction arrangement (as defined in Code Section 408(p)(2)(A)); and (v) any
employee contribution designated as deductible under a trust described in Code
Section 501(c)(19) (before applying the limits of Code Section 402(g)).
A Participant will be considered to have made "excess deferrals" for a
taxable year to the extent that the Participant's elective deferrals for the
taxable year exceed the applicable limit described above for the year.
(b) DISTRIBUTION OF EXCESS DEFERRALS. In the event that an amount is
included in a Participant's gross income for a taxable year as a result of an
excess deferral under Code Section 402(g), and the Participant notifies the
Committee on or before the March 1
(30)
<PAGE>
following the taxable year that all or a specified part of an Elective
Contribution made for his benefit represents an excess deferral, the Committee
shall make every reasonable effort to cause such excess deferral, adjusted for
allocable income, to be distributed to the Participant no later than the April
15 following the calendar year in which such excess deferral was made. The
income allocable to excess deferrals is equal to the allocable gain or loss for
the taxable year of the individual, but not the allocable gain or loss for the
period between the end of the taxable year and the date of distribution (the
"gap period"). Income allocable to excess deferrals for the taxable year shall
be determined by multiplying the gain or loss attributable to the Participant's
Elective Contribution Account for the taxable year by a fraction, the numerator
of which is the Participant's excess deferrals for the taxable year, and the
denominator of which is the sum of the Participant's Elective Contribution
Account balance as of the beginning of the taxable year plus the Participant's
Elective Contributions for the taxable year. No distribution of an excess
deferral shall be made during the taxable year of a Participant in which the
excess deferral was made unless the correcting distribution is made after the
date on which the Plan received the excess deferral and both the Participant and
the Plan designates the distribution as a distribution of an excess deferral.
The amount of any excess deferrals that may be distributed to a Participant for
a taxable year shall be reduced by the amount of Elective Contributions that
were excess contributions and were previously distributed to the Participant for
the Plan Year beginning with or within such taxable year.
(c) TREATMENT OF EXCESS DEFERRALS. For other purposes of the Code,
including Code Sections 401(a)(4), 401(k)(3), 404, 409, 411, 412, and 416,
excess deferrals must be treated as employer contributions even if they are
distributed in accordance with paragraph (b) above. However, excess deferrals of
a Participant who is not a HCE will not be taken into account for purposes of
Code Section 401(k)(3) (the actual deferral percentage test) to the extent the
excess deferrals are prohibited under Code Section 401(a)(30). Excess deferrals
will also be treated as employer contributions for purposes of Code Section 415
unless distributed under paragraph (b) above.
11.4. SECTION 401(k)(3) LIMITS.
------------------------
(a) IN GENERAL. Elective Contributions made under the Plan are
subject to the limits of Section 401(k)(3), as more fully described below. The
Plan provisions relating to the Code Section 401(k)(3) limits are to be
interpreted and applied in accordance with Code Sections 401(k)(3) and
401(a)(4), which are hereby incorporated by reference, and in such manner as to
satisfy such other requirements relating to Code Section 401(k) as may be
prescribed by the Secretary of the Treasury from time to time.
(b) ACTUAL DEFERRAL RATIOS. For each Plan Year, the Committee shall
determine the "actual deferral ratio" for each Participant who is eligible for
Elective Contributions. The actual deferral ratio shall be the ratio, calculated
to the nearest one-hundredth of one percent, of the Elective Contributions (plus
any (i) Qualified Nonelective Contributions and any (ii) Matching Contributions
that are "qualified matching contributions" (as defined in the following
sentence) which are, in either case, treated as Elective Contributions) made on
behalf of the Participant for the Plan Year to the Participant's Compensation
for the applicable period. "Qualified matching contributions" means matching
contributions that meet the vesting and withdrawal restrictions applicable to
elective deferrals under a qualified cash or
(31)
<PAGE>
deferred arrangement, in accordance with Treas. Reg. (S)1.401(k)-1(g)(13). For
purposes of determining a Participant's actual deferral ratio:
(i) Elective Contributions will be taken into account only if both
of the following requirements are satisfied: (A) the Elective Contribution is
allocated to the Participant's Elective Contribution Account as of a date within
the Plan Year, is not contingent upon participation in the Plan or performance
of services on any date subsequent to that date, and is actually paid to the
Trust no later than the end of the 12-month period immediately following the
Plan Year to which the contribution relates; and (B) the Elective Contribution
relates to Compensation that either would have been received by the Participant
in the Plan Year but for the Participant's election to defer under the Plan or
is attributable to services performed in the Plan Year and, but for the
Participant's election to defer, would have been received by the Participant
within 2 1/2 months after the close of the Plan Year. To the extent Elective
Contributions which meet the requirements of (A) and (B) above constitute excess
deferrals described in Section 11.3(a), they will be taken into account for each
HCE, but will not be taken into account for any NHCE.
(ii) In the case of a Participant who is a HCE for the Plan Year and
is eligible to have elective contributions (and qualified nonelective or
qualified matching contributions, to the extent treated as elective
contributions) allocated to his account under two or more cash or deferred
arrangements described in Code Section 401(k) maintained by an Employer, the
Participant's actual deferral ratio shall be determined as if such elective
contributions (as well as qualified nonelective or qualified matching
contributions) are made under a single arrangement, and if two or more of the
cash or deferred arrangements have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated as a
single arrangement.
(iii) The applicable period for determining Compensation for each
Participant for a Plan Year shall be the 12-month period ending on the last day
of such Plan Year; provided, however, that to the extent permitted under
Regulations, the Committee may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during which the individual
was a Participant.
(iv) Qualified Nonelective Contributions made on behalf of
Participants who are eligible to receive Elective Contributions shall be treated
as Elective Contributions to the extent permitted by Treas. Reg. (S)1.401(k)-
1(b)(5). To the extent elected by the Committee, Matching Contributions which
constitute qualified matching contributions made on behalf of Participants who
are eligible to receive Elective Contributions shall be treated as Elective
Contributions to the extent permitted by Treas. Reg. (S)1.401(k)-1(b)(5).
(v) In the event that the Plan satisfies the requirements of Code
Section 401(k), 410(a)(4), or 410(b) only if aggregated with one or more other
plans with the same plan year, or if one or more other plans with the same Plan
Year satisfy such Code sections only if aggregated with this Plan, then this
section shall be applied by determining the actual deferral ratios as if all
such plans were a single plan.
(32)
<PAGE>
(vi) An employee who would be a Participant but for the failure
to make Elective Contributions shall be treated as a Participant on whose behalf
no Elective Contributions are made.
(vii) Elective Contributions made on behalf of Participants who
are not HCEs which could be used to satisfy the Code Section 401(k)(3) limits
but are not necessary to be taken into account in order to satisfy such limits,
may instead be taken into account for purposes of the Code Section 401(m) limits
to the extent permitted by Treas. Reg. (S)1.401(m)-1(b)(5).
(c) ACTUAL DEFERRAL PERCENTAGES. The actual deferral ratios for all
HCEs who are eligible for Elective, Contributions for a Plan Year shall be
averaged to determine the actual deferral percentage for the highly compensated
group, and the actual deferral ratios for all Employees who are not HCEs but are
eligible for Elective Contributions for the Plan Year shall be averaged to
determine the actual deferral percentage for the nonhighly compensated group.
The actual deferral percentages must satisfy at least one of the following
tests:
(i) the actual deferral percentage for the highly compensated
group does not exceed 125% of the actual deferral percentage for the nonhighly
compensated group; or
(ii) the excess of the actual deferral percentage for the
highly compensated group over the actual deferral percentage for the nonhighly
compensated group does not exceed two percentage points, and the actual deferral
percentage for the highly compensated group does not exceed twice the actual
deferral percentage of the nonhighly compensated group.
The tests in (i) and (ii) above shall be applied using the actual deferral
percentage for the highly compensated group for the current Plan Year and the
actual deferral percentage for the nonhighly compensated group for the
immediately preceding Plan Year (taking into account the nonhighly compensated
group that existed during such preceding Plan Year).
(d) ADJUSTMENTS BY COMMITTEE. If, prior to the time all Elective
Contributions for a Plan Year have been contributed to the Trust, the Committee
determines that Elective Contributions are being made at a rate which will cause
the Code Section 401(k)(3) limits to be exceeded for the Plan Year, the
Committee may, in its sole discretion, limit the amount of Elective
Contributions to be made with respect to one or more HCEs for the balance of the
Plan Year by suspending or reducing Elective Contribution elections to the
extent the Committee deems appropriate. Any Elective Contributions which would
otherwise be made to the Trust shall instead be paid to the affected Participant
in cash.
(e) EXCESS CONTRIBUTIONS. If the Code Section 401(k)(3) limits have not
been met for a Plan Year after all contributions for the Plan Year have been
made, the Committee will determine the amount of excess contributions with
respect to Participants who are HCEs. To do so, the Committee will perform the
following computation (which shall be used solely to determine the aggregate
amount to be distributed under paragraph (f) below and not the amount to be
distributed to any individual): first, the actual deferral ratio of the HCE
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<PAGE>
with the highest actual deferral ratio shall be reduced to the extent necessary
to (i) enable the Plan to satisfy the Code Section 401(k)(3) limits or (ii)
cause such employee's actual referral ratio to equal the actual deferral ratio
of the HCE with the next highest actual deferral ratio; and second, this process
shall be repeated until the Plan satisfies the Code Section 401(k)(3) limits.
(f) DISTRIBUTION OF EXCESS CONTRIBUTIONS. The aggregate amount of
reductions determined under paragraph (e) above shall be distributed, first, to
the HCEs with the highest dollar amounts of Elective Contributions, pro rata, in
an amount equal to the lesser of (i) the total amount of excess contributions
for the Plan Year determined under paragraph (e) above or (ii) the amount
necessary to cause the amount of such Employees' Elective Contributions to equal
the amount of the Elective Contributions of the HCEs with the next highest
dollar amount of Elective Contributions. This process is repeated until the
aggregate amount distributed under this paragraph (f) equals the amount of
excess contributions determined under paragraph (e) above. Income on excess
contributions shall be distributed in accordance with applicable Regulations.
If, pursuant to Section 11.4(b)(iv), the Committee has elected to treat certain
Matching Contributions (which are qualified matching contributions) as Elective
Contributions, the Committee shall treat excess contributions as attributable
proportionately to Elective Contributions and to such Matching Contributions.
(g) SPECIAL RULE. For purposes of distributing excess contributions, the
amount of excess contributions that may be distributed with respect to a HCE for
a Plan Year shall be reduced by the amount of excess deferrals previously
distributed to the HCE for his taxable year ending with or within such Plan
Year.
(h) RECORDKEEPING REQUIREMENT. The Committee, on behalf of the
Participating Employers, shall maintain such records as are necessary to
demonstrate compliance with the Code Section 401(k)(3) limits including the
extent to which Qualified Nonelective Contributions and Matching Contributions
which are qualified matching contributions are taken into account in determining
the actual deferral ratios.
(i) EFFECT ON MATCHING CONTRIBUTIONS. A Participant's Elective
Contributions which are returned as a result of the Code Section 401(k)(3)
limits for a Plan Year shall not be taken into account in determining the amount
of Matching Contributions to be made for the Participant's benefit for the Year.
To the extent Matching Contributions (with respect to which the Committee has
not, or could not, elect to treat as Elective Contributions under Section
11.4(b)(iv)) have already been made with respect to the Elective Contributions
at the time the Elective Contributions are determined to be excess
contributions, such Matching Contributions shall be distributed to the
Participant at the same time as the Elective Contributions are returned or
recharacterized; provided, however, that to the extent the Participant does not
have a vested interest in such Matching Contributions, the Participant shall
forfeit such Matching Contributions.
11.5. SECTION 401(m) LIMITS.
---------------------
(a) IN GENERAL. Matching Contributions and Voluntary After-Tax
Contributions made under the Plan are subject to the limits of Code Section
401(m), as more fully described below. The Plan provisions relating to the Code
Section 401(m) limits are to be
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<PAGE>
interpreted and applied in accordance with Code Sections 401(m) and 401(a)(4),
which are hereby incorporated by reference, and in such manner as to satisfy
such other requirements relating to Code Section 401(m) as may be prescribed by
the Secretary of the Treasury from time to time.
(b) ACTUAL CONTRIBUTION RATIOS. For each Plan Year, the Committee will
determine the "actual contribution ratio" for each Participant who is eligible
for Matching Contributions (including a Participant who would be eligible for
Matching Contributions had he elected to make Elective Contributions) or
Voluntary After-Tax Contributions (including a Participant who could, but does
not, make any such Contributions). The actual contribution ratio shall be the
ratio, calculated to the nearest one-hundredth of one percent, of the sum of the
Matching Contributions (other than Matching Contributions which the Committee
has elected, pursuant to Section 11.4(b)(iv) to treat as Elective Contributions)
and Qualified Nonelective Contributions which are not treated as Elective
Contributions made on behalf of the Participant for the Plan Year and the
Participant's Voluntary After-Tax Contributions for the Plan Year (such sum
hereinafter being referred to as "aggregate contributions"), to the
Participant's Compensation for the applicable period. For purposes of
determining a Participant's actual contribution ratio:
(i) A Matching Contribution will be taken into account only if
the Contribution is allocated to a Participant's Account as of a date within the
Plan Year, is actually paid to the Trust no later than 12 months after the close
of the Plan Year, and is made on behalf of a Participant on account of the
Participant's Elective Contributions for the Plan Year. A Voluntary After-Tax
Contribution will be taken into account for the Plan Year in which the
Contribution is paid to the Trust (or paid by the Participant to an agent of the
Plan, if the funds are transmitted to the Trust within a reasonable period
thereafter).
(ii) In the case of a Participant who is a HCE for the Plan
Year and is eligible to have matching contributions or employee contributions
(including amounts treated as matching contributions) allocated to his accounts
under two or more plans maintained by an Employer which may be aggregated for
purposes of Code Sections 410(b) and 401(a)(4), the Participant's actual
contribution ratio shall be determined as if such contributions are made under a
single plan, and if two or more of the plans have different Plan Years, all
plans ending with or within the same calendar year shall be treated as a single
plan.
(iii) The applicable period for determining Compensation for
each Participant for a Plan Year shall be the 12-month period ending on the last
day of such Plan Year; provided, however, that to the extent permitted under
Regulations, the Committee may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during which the individual
was a Participant.
(iv) Elective Contributions not applied to satisfy the Code
Section 401(k)(3) limits and Qualified Nonelective Contributions not treated as
Elective Contributions may be treated as Matching Contributions and included in
"aggregate contributions" to the extent permitted by Treas. Reg. (S)401(m)-
1(b)(5).
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<PAGE>
(v) In the event that the Plan satisfies the requirements of
Code Sections 401(k), 410(a)(4), or 410(b) only if aggregated with one or more
other plans with the same plan year, or if one or more other plans with the same
Plan Year satisfy such Code sections only if aggregated with this Plan, then
this section shall be applied by determining the actual contribution ratios as
if all such plans were a single plan.
(c) ACTUAL CONTRIBUTION PERCENTAGES. The actual contribution ratios for
all HCEs who are eligible for Matching Contributions or Voluntary After-Tax
Contributions for a Plan Year shall be averaged to determine the actual
contribution percentage for the highly compensated group for the Plan Year, and
the actual contribution ratios for all Employees who are not HCEs but are
eligible for Matching Contributions or Voluntary After-Tax Contributions for the
Plan Year shall be averaged to determine the actual contribution percentage for
the nonhighly compensated group for the Plan Year. The actual contribution
percentages must satisfy at least one of the following tests:
(i) The actual contribution percentage for the highly
compensated group does not exceed 125% of the actual contribution percentage for
the nonhighly compensated group; or
(ii) The excess of the actual contribution percentage for the
highly compensated group over the actual contribution percentage for the
nonhighly compensated group does not exceed two percentage points, and the
actual contribution percentage for the highly compensated group does not exceed
twice the actual contribution percentage of the nonhighly compensated group.
The tests in (i) and (ii) above shall be applied using the actual
contribution percentage for the highly compensated group for the current Plan
Year and the contribution percentage for the nonhighly compensated group for the
immediately preceding Plan Year (taking into account the nonhighly compensated
group that existed during such preceding Plan Year).
(d) MULTIPLE USE TEST. In the event that (i) the actual deferral
percentage and actual contribution percentage for the highly compensated group
each exceeds 125% of the respective actual deferral percentage or actual
contribution percentage for the nonhighly compensated group, and (ii) the sum of
the actual deferral percentage and the actual contribution percentage for highly
compensated group exceeds the "aggregate limit" within the meaning of Treas.
Reg. (S)1.401(m)-2(b)(3), the Committee shall reduce the actual contribution
ratios of HCEs who had both an actual deferral ratio and an actual contribution
ratio for the Plan Year to the extent required by such section and in the same
manner as descried in paragraphs (f) and (g) below.
(e) ADJUSTMENTS BY COMMITTEE. If, prior to the time all Matching and
Voluntary After-Tax Contributions for a Plan Year have been contributed to the
Trust, the Committee determines that such Contributions are being made at a rate
which will cause the Code Section 401(m) limits to be exceeded for the Plan
Year, the Committee may, in its sole discretion, limit the amount of such
Contributions to be made with respect to one or more HCEs for the balance of the
Plan Year by limiting the amount of such Contributions to the extent the
Committee deems appropriate.
(36)
<PAGE>
(f) EXCESS AGGREGATE CONTRIBUTIONS. If the Code Section 401(m) limits
have not been satisfied for a Plan Year after all contributions for the Plan
Year have been made, the excess of the aggregate contributions actually made on
behalf of HCEs for the Plan Year over the maximum amount of such contributions
permitted under Code Section 401(m)(2)(A) shall be considered to be "excess
aggregate contributions." The Committee shall determine the amount of excess
aggregate contributions. To do so, the Committee shall perform the following
computation (which shall be used solely to determine the aggregate amount to be
distributed under paragraph (g) below and not the amount to be distributed to
any individual): first, the actual contribution ratio of the HCE with the
highest actual contribution ratio shall be reduced to the extent necessary to
(i) enable the Plan to satisfy the Code Section 401(m) limits or (ii) cause such
employee's actual contribution ratio to equal the actual contribution ratio of
the HCE with the next highest actual contribution ratio; and second, this
process shall be repeated until the Plan satisfies the Code Section 401(m)
limits. In no event shall excess aggregate contributions remain unallocated or
be allocated to a suspense account for allocation in a future Plan Year.
(g) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The aggregate
amount of reductions determined under paragraph (f) above shall be distributed,
first, to the HCEs with the highest dollar amounts of aggregate contributions,
pro rata, in an amount equal to the lesser of (i) the total amount of excess
aggregate contributions for the Plan Year determined under paragraph (f) above
or (ii) the amount necessary to cause the amount of such Employees' aggregate
contributions to equal the amount of the aggregate contributions of the HCEs
with the next highest dollar amount of aggregate contributions. This process is
repeated until the aggregate amount distributed under this paragraph (g) equals
the amount of excess aggregate contributions determined under paragraph (f)
above. Income on excess aggregate contributions shall be distributed in
accordance with applicable Regulations. Distribution of excess aggregate
contributions shall be made after the close of the Plan Year to which the
contributions relate, but within 12 months after the close of such Plan Year.
Excess aggregate contributions shall be treated as employer contributions for
purposes of Code Sections 401(a)(4), 404 and 415 even if distributed from the
Plan. Notwithstanding the foregoing, to the extent a Participant would receive a
distribution of excess aggregate contributions pursuant to this Section which
relate to Matching Contributions in which the Participant does not have a vested
interest, such portion of the excess aggregate contributions shall be forfeited.
An HCE's share of excess aggregate contributions for a Plan Year shall be
allocated by the Committee to contributions made by or for such HCE in the
following priority: (1) first, to Voluntary After-Tax Contributions, if any; (2)
second, to Matching Contributions (which are not treated as Elective
Contributions under Section 11.4(b)(iv)) allocable with respect to Elective
Contributions which have been determined to be excess contributions under
Section 11.4; (3) third, on a pro rata basis, to Matching Contributions (which
are not treated as Elective Contributions under Section 11.4(b)(iv)) and, if
applicable, to Elective Contributions relating to those Matching Contributions
which the Committee has elected to take into account in computing actual
contribution percentages; and (4) last, to Qualified Nonelective Contributions
taken into account in computing actual contribution percentages.
(h) RECORDKEEPING REQUIREMENT. The Committee, on behalf of the
Participating Employers, shall maintain such records as are necessary to
demonstrate compliance with the Code Section 401(m) limits, including the extent
to which Elective Contributions and
(37)
<PAGE>
Qualified Nonelective Contributions are taken into account in determining the
actual contribution ratios.
11.6. SECTION 410(b) LIMITS.
---------------------
(a) Notwithstanding anything to the contrary, if the number of
Participants who are eligible to share in any contribution for a Plan Year is
such that the Plan would fail to meet the requirements of Code Section 410(b),
then the group of Participants eligible to share in the contribution for the
Plan Year will be increased to include such minimum number of Participants who
are not in the service of the Participating Employers on the last day of the
Plan Year, as may be necessary to satisfy the applicable tests under the above
Code sections. The Participants who will become eligible to share in the
contribution will be those Participants who, when compared to Participants who
are similarly situated, completed the greatest number of hours of service in the
Plan Year before the termination of their service.
(b) The preceding paragraph shall not be construed to permit the
reduction of any Participant's Account balance, and any amounts which were
allocated to Participants whose eligibility to share in the contribution did not
result from the application of the preceding paragraph will not be reallocated
to satisfy such requirements. Instead, the Participating Employer will make an
additional contribution equal to the amount which the affected Participants
would have received had they been included initially in the allocation of the
Participating Employer's contribution, even if it would cause the contributions
of the Participating Employer for the Plan Year to exceed the amount which is
deductible by the Participating Employer for such Plan Year under Code Section
404. Any adjustments pursuant to this paragraph shall be considered to be a
retroactive amendment of the Plan which was adopted by the last day of the Plan
Year.
ARTICLE XII
SPECIAL TOP-HEAVY PROVISIONS
12.1. PROVISIONS TO APPLY. The provisions of this Article shall apply for
-------------------
any top-heavy Plan Year notwithstanding anything to the contrary in the Plan.
12.2. MINIMUM CONTRIBUTION. For any Plan Year which is a top-heavy plan
--------------------
year, the Participating Employers shall contribute to the Trust a minimum
contribution on behalf of each Participant who is not a key employee for such
year and who has not separated from service from the Employers by the end of the
Plan Year, regardless of whether or not the Participant has elected to make
Elective Contributions for the Year. The minimum contribution shall, in general,
equal 3% of each such Participant's Compensation, but shall be subject to the
following special rules:
(a) If the largest contribution on behalf of a key employee for
such year, taking into account only Elective Contributions, Matching
Contributions (if any), Discretionary Contributions and Qualified Nonelective
Contributions, is equal to less than 3% of the key employee's Compensation, such
lesser percentage shall be the minimum contribution percentage for Participants
who are not key employees. This special rule shall not apply, however, if the
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<PAGE>
Plan is required to be included in an aggregation group and enables a defined
benefit plan to meet the requirements of Code Sections 401(a)(4) or 410.
(b) No minimum contribution will be required with respect to a
Participant who is also covered by another top-heavy defined contribution plan
of an Employer which meets the vesting requirements of Code Section 416(b), and
under which the Participant receives the top-heavy minimum contribution.
(c) If a Participant is also covered by a top-heavy defined benefit
plan of an Employer, "5%" shall be substituted for "3%" above in determining the
minimum contribution.
(d) The minimum contribution with respect to any Participant who is
not a key employee for the particular year will be offset by any Discretionary
Contributions and any Qualified Nonelective Contributions, but not any other
type of contribution otherwise made for the Participant's benefit for such year.
(e) If additional minimum contributions are required under this
Section, such contributions shall be credited to the Participant's Discretionary
Contribution Account.
(f) A minimum contribution required under this Section shall be
made even though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation for the year because of (i) the
Participant's failure to complete 1,000 hours of service (or any equivalent
provided in the Plan), or (ii) the Participant's failure to make mandatory
contributions or Elective Contributions to the Plan, or (iii) Compensation less
than a stated amount.
12.3. ADJUSTMENT TO LIMITATION ON BENEFITS. For purposes of the Code
------------------------------------
Section 415 limits, the definitions of "defined contribution plan fraction" and
"defined benefit plan fraction" contained therein shall be modified for any Plan
Year which is a top-heavy Plan Year, by substituting "1.0" for "1.25" in Code
Sections 415(e)(2)(B) and 415(e)(3)(B).
12.4. DEFINITIONS. For purposes of these top-heavy provisions, the
-----------
following terms have the following meanings:
(a) "key employee" means a key employee described in Code Section
416(i)(1) and "non-key employee" means any employee who is not a key employee
(including employees who are former key employees);
(b) "top-heavy plan year" means a Plan Year if any of the following
conditions exist: (i) the top-heavy ratio for the Plan exceeds 60% and the Plan
is not part of any required aggregation group or permissive aggregation group of
plans; (ii) this Plan is a part of a required aggregation group of plans but not
part of a permissive aggregation group and the top-heavy ratio for the group of
plans exceeds 60%; or (iii) the Plan is part of a required aggregation group and
part of a permissive aggregation group of plans and the top-heavy ratio for the
permissive aggregation group exceeds 60%.
(39)
<PAGE>
(c) "top-heavy ratio":
(i) If the employer maintains one or more defined
contribution plans (including any SEP) and the employer has not maintained any
defined benefit plan which during the 5-year period ending on the determination
date(s) has or has had accrued benefits, the top-heavy ratio for the Plan alone
or for the required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of the account balances of all key
employees on the determination date(s) (including any part of any account
balance distributed in the 5-year period ending on the determination date(s)),
and the denominator of which is the sum of all account balances (including any
part of an account balance distributed in the 5-year period ending on the
determination date(s)), both computed in accordance with Section 416. Both the
numerator and the denominator of the top-heavy ratio are increased to reflect
any contribution not actually made as of the determination date, but which is
required to be taken into account on that date under Section 416.
(ii) If the employer maintains one or more defined
contribution plans (including any SEP) and the employer maintains or has
maintained one or more defined benefit plans which during the 5-year period
ending on the determination date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation group as appropriate
is a fraction, the numerator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all key employees,
determined in accordance with (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for all key
employees as of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all participants, determined in accordance with (i) above, and the
present value of all accrued benefits under the defined benefit plan or plans
for all participants as of the determination date(s), all determined in
accordance with Code Section 416. The accrued benefits under a defined benefit
plan in both the numerator and denominator of the top-heavy ratio are increased
for any distribution of an accrued benefit made in the 5-year period ending on
the determination date.
(iii) For purposes of (i) and (ii) above, the value of
account balances and the present value of accrued benefits will be determined as
of the most recent valuation date that falls within or ends with the 12-month
period ending on the determination date, except as provided in Section 416 for
the first and second plan years of a defined benefit plan. The account balances
and accrued benefits of a participant (A) who is not a key employee but who was
a key employee in a prior year, or (B) who has not been credited with at least
one Hour of Service with any employer maintaining the plan at any time during
the 5-year period ending on the determination date will be disregarded. The
calculation of the top-heavy ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Code Section 416. Deductible employee contributions will not be taken into
account for purposes of computing the top-heavy ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same calendar year.
(iv) The accrued benefit of a Participant other than a key
employee shall be determined under (A) the method, if any, that uniformly
applies for accrual
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<PAGE>
purposes under all defined benefit plans maintained by the employer, 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 rule of Code Section
411(b)(1)(C).
(d) The "permissive aggregation group" is the required aggregation group
of plans plus any other plan or plan of the employer which, when considered as a
group with the required aggregation group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(e) The "required aggregation group" is (i) each qualified plan of the
employer in which at least one key employee participates or participated at any
time during the determination period (regardless of whether the plan has
terminated), and (ii) any other qualified plan of the employer which enables a
plan described in (i) to meet the requirements of Sections 401(a)(4) and 410(b).
(f) For purposes of computing the top-heavy ratio, the "valuation date"
shall be the last day of the applicable plan year.
(g) For purposes of establishing present value to compute the top-heavy
ratio, any benefit shall be discounted only for mortality and interest based on
the interest and mortality rates specified in the defined benefit plan(s), if
applicable.
(h) The term "determination date" means, with respect to the initial
plan year of a plan, the last day of such plan year and, with respect to any
other plan year of a plan, the last day of the preceding plan year of such plan.
The term "applicable determination date" means, with respect to the Plan, the
determination date for the Plan Year of reference and, with respect to any other
plan, the determination date for any plan year of such plan which falls within
the same calendar year as the applicable determination date of the Plan.
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.1. EXCLUSIVE BENEFIT. Except as provided under Article III, the
-----------------
Employer has no beneficial interest in any asset of the Trust Fund and no part
of any asset in the Trust Fund may ever revert to or be repaid to an Employer,
either directly or indirectly; nor, prior to the satisfaction of all liabilities
with respect to the Participants and their Beneficiaries under the Plan, may any
part of the corpus or income of the Trust Fund, or any asset of the Trust Fund,
be (at any time) used for, or diverted to, purposes other than the exclusive
benefit of the Participants or their Beneficiaries.
13.2. PLAN AMENDMENT. The Company has the right at any time, and from
--------------
time to time, to amend the Plan in any manner it deems advisable; provided,
however, that the Company may not (i) amend the Plan or Trust in such manner as
would cause or permit any part of the assets of the Trust Fund to be diverted to
purposes other than for the exclusive benefit of each Participant and his
Beneficiary (except as permitted by the Plan with respect to Qualified Domestic
Relations Orders or the return of contributions upon nondeductibility or mistake
of fact), unless such amendment is required or permitted by law, governmental
regulation or ruling; or (ii) amend the Plan or Trust retroactively in such a
manner as would reduce the accrued
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<PAGE>
benefit of any Participant, except as otherwise permitted or required by law.
For purposes of this Section, an amendment which has the effect of decreasing a
Participant's Account Balance or eliminating an optional form of benefit, with
respect to benefits attributable to service before the amendment, shall be
treated as reducing an accrued benefit to the extent provided in Code Section
411(d)(6).
13.3. PLAN TERMINATION. The Company has established the Plan and
----------------
authorized the establishment of the Trust with the bona fide intention and
expectation that contributions will be continued indefinitely, but may
discontinue contributions under the Plan or terminate the Plan at any time
without liability whatsoever for any such discontinuance or termination. In
addition, the Participating Employers shall have no obligation or liability
whatsoever to maintain the Plan for any given length of time. Upon either full
or partial termination of the Plan, or upon complete discontinuance of
contributions to the Plan, an affected Participant's right to his Account
Balance shall become 100% Nonforfeitable, irrespective of the vesting schedule
which otherwise would apply. As soon as practicable following a full
termination of the Plan, the Company shall direct the distribution of the assets
of the Trust Fund to Participants in a manner consistent with the terms hereof;
distributions may be made through the purchase of irrevocable nontransferable
deferred commitments from an insurer. Except as permitted by Treasury
Regulations, the termination of the Plan shall not result in the reduction of
Code Section 411(d)(6) "protected benefits."
13.4. PLAN MERGER OR CONSOLIDATION. In case of any merger or
----------------------------
consolidation of the Plan with, or transfer of assets and liabilities of the
Plan to, any other plan, provision must be made so that each Participant would,
if the Plan 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 the Plan had then terminated.
13.5. ACTION TO AMEND OR TERMINATE PLAN. Action to amend, terminate or
---------------------------------
make any other structural changes to the Plan may be taken or authorized by the
Company's board of directors, the Executive Committee of the Company's board of
directors or by the True North Communications, Inc. board of directors or by any
authorized committee thereof. Any such action, to the extent it materially
impacts the obligations or responsibilities of the Trustee, shall be timely
communicated to the Trustee.
ARTICLE XIV
MISCELLANEOUS
14.1. EVIDENCE. Anyone required to give evidence under the terms of the
--------
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. Both the
Committee and the Trustee are fully protected in acting and relying upon any
evidence described under the immediately preceding sentence.
14.2. USERRA COMPLIANCE. Notwithstanding any provisions of this Plan to
-----------------
the contrary, contributions, benefits and service credit with respect to
qualified military
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<PAGE>
service will be provided in accordance with Code Section 414(u) and loan
repayments may be suspended under Code Section 414(u)(4).
14.3. NO RESPONSIBILITY FOR EMPLOYER ACTION. The Committee has no
-------------------------------------
obligation or responsibility with respect to any action required by the Plan to
be taken by a Participating Employer, Employer, any Participant or eligible
Employee, or for the failure of any of the above persons to act or make any
payment or contribution, or to otherwise provide any benefit contemplated under
this Plan. Furthermore, the Plan does not require the Committee to collect any
contribution required under the Plan or to determine the correctness of the
amount of any Employer contribution. The Committee need not inquire into and
shall not be responsible for any action or failure to act on the part of the
others. Subject to Section 13.5, any action required of a corporate Employer
must be by its board of directors or its designate.
14.4. FIDUCIARIES NOT INSURERS. The Committee, the Plan Administrator and
------------------------
Employer in no way guarantee the Trust Fund from loss or depreciation. The
Employer does not guarantee the payment of any money which may be or becomes due
to any person from the Trust Fund. The liability of the Committee to direct the
Trustee to make any payment from the Trust Fund at any time and all times is
limited to the then available assets of the Trust.
14.5. INDEMNIFICATION. The Company indemnifies and saves harmless the
---------------
Committee, the Pension Investment Committee, and each of their members, and the
Plan Administrator, its employees, officers and directors, from and against any
and all loss resulting from liability to which any of such persons may be
subjected by reason of any act or conduct (except willful misconduct or gross
negligence) in their official capacities in the administration of the Plan, the
Trust or both, including all expenses reasonably incurred in their defense, in
case the Employer fails to provide such defense. Furthermore, the Company may
execute a letter agreement with the Committee members, the Pension Investment
Committee members, or any of the other persons mentioned in the first sentence
of this Section, further delineating the indemnification agreement of this
Section 7.3, provided the letter agreement is consistent with and does not
violate the requirements of ERISA. The indemnification provisions of this
Section 7.3 does not relieve any person from any liability which such person may
have under ERISA for breach of a fiduciary duty. The indemnification provisions
of this Section 7.3 extend to the Trustee solely to the extent provided by a
separate written agreement executed by the Trustee and the Company.
14.6. WAIVER OF NOTICE. Any person entitled to notice under the Plan may
----------------
waive the notice.
14.7. WORD USAGE. Words used in the masculine also apply to the feminine
----------
where applicable, and wherever the context of the Plan dictates, the plural
includes the singular and the singular includes the plural.
14.8. STATE LAW. The Plan will be construed, administered and enforced in
---------
accordance with the internal laws of the State of Nebraska, except to the extent
preempted by ERISA or other Federal statute.
(43)
<PAGE>
14.9. EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
-------------------------
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Participant or any Beneficiary any right to
continue employment, any legal or equitable right against an Employer, or
Employee of an Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
IN WITNESS WHEREOF, the undersigned has executed this Plan to be
effective as of the 1st day of January, 1998.
BOZELL, JACOBS, KENYON &
ECKHARDT, INC.
By:___________________________
Name:
Title:
Attest:
____________________
(44)
<PAGE>
EXHIBIT A
MULTIPLE EMPLOYER PROVISIONS
1. Purpose. Whereas the Plan may from time to time be a multiple
-------
employer plan, within the meaning of Code Section 413(c), by virtue of the
participation therein of one or more Employers whose Employees are not treated,
under Code Section 414, as employed by the same Employer as the Employees of the
Company, the provisions of this EXHIBIT A shall continuously apply to the Plan.
2. Definitions. Except as expressly provided herein, all Plan
-----------
definitions shall be applicable to this Exhibit A unless the context clearly
requires otherwise. Solely for purposes of this Exhibit, the following
definitions shall also apply:
a. "Affiliate" means a Participating Employer whose Employees are
treated, under Code Section 414, as employed by the same employer as another
Participating Employer.
b. "Company" means BJK&E.
c. "Company Affiliate" means a Participating Employer whose
Employees are treated, under Code Section 414, as employed by the same employer
as the Company.
d. "Non-Affiliated Participating Employer" means a Participating
Employer whose employees are not treated, under Code Section 414, as employed by
the same employer as the Company.
e. "Participating Employer" means each Employer which is
participating in the Plan, whether or not such Employer is a Company Affiliate.
3. Adoption by Other Employers: Impact of Disaffiliation.
-----------------------------------------------------
Notwithstanding anything herein to the contrary, any other corporation or other
business entity, whether or not an Affiliate of the Company, may, with the
consent of the Company, adopt this Plan and participate therein as a
Participating Employer. In the event that a Participating Employer which is a
Company Affiliate ceases to be a Company Affiliate (by virtue of a direct or
indirect change in ownership of such Participating Employer or otherwise), such
Participating Employer shall cease to participate in the Plan unless both the
Company and the Participating Employer take appropriate action to continue the
Participating Employer's participation in the Plan. For purposes of this
paragraph 3, (i) consent and appropriate action by the Company shall not require
action by the Company's board of directors and may consist of the action of a
duly authorized senior officer of the Company acting on behalf of the Company,
and (ii) appropriate action by a Participating Employer shall not require action
by the Participating Employer's board of directors and may consist of the action
of a duly authorized senior officer of the Participating Employer acting on
behalf of the Participating Employer.
4. Trust Fund. The Trustee may, but shall not be required to, commingle,
----------
hold and invest as one Trust Fund, all contributions made by the Participating
Employers, as well as all increments thereof. However, the assets of the Plan
shall, on an ongoing
(i)
<PAGE>
basis, be available to pay benefits to all Participants and Beneficiaries under
the Plan without regard to the Participating Employer who contributed such
assets. On the basis of the information furnished by the Committee, the Trustee
shall keep separate books and records concerning the accounts and credits of the
Employees of each Participating Employer.
5. Crediting of Service. For purposes of determining Hours and Years of
--------------------
Service, all Participating Employers shall be treated as a single Employer.
6. Participating Employers' Contribution. The Company shall determine
-------------------------------------
the level of Employer Contributions for a Plan Year; provided, however, that
each Non-Affiliated Participating Employer may independently determine its own
level of Discretionary Contributions (i.e., profit sharing contributions) to the
Plan. A Participating Employer's contributions to the Plan shall be allocated
only among Participants of such Participating Employer and its Affiliates.
7. Forfeitures. All rights and values forfeited by a Participant on or
-----------
after termination of employment shall inure only to the benefit of the
Participants of the Participating Employer and the Affiliates of the
Participating Employer which last employed the forfeiting Participant.
8. Special Rule for Participation in TN Stock Fund. No portion of the
-----------------------------------------------
contributions made by or on behalf of any Participating Employer, other than a
Participating Employer described in this paragraph, and no portion of any
forfeitures which are reallocated to the accounts of Participants who are
employees of a Participating Employer not described in this paragraph shall be
invested in the TN Stock Fund. All such contributions and reallocated
forfeitures shall instead be invested in the Investment Funds (in accordance
with the investment instructions of the Participants to whose accounts such
amounts are allocated). A Participating Employer is described in this paragraph
if and only if (i) such Participating Employer is directly or indirectly wholly
owned by the Company, or (ii) as of March 31, 1997, a portion of the
contributions made by or on behalf of such Participating Employer has been
allocated to the TN Stock Fund; provided, however, that in any Plan Year in
which application of such rule shall result in a discriminatory availability of
benefits, rights and features under the Plan, within the meaning of Treas. Reg.
(S)1.401(a)(4)-4, each Participating Employer which is a Company Affiliate shall
be treated as described in this paragraph (or, at the election of the Plan
Administrator, those Company Affiliates designated by the Plan Administrator
shall be treated as described in this paragraph, such that the group of Company
Affiliates so designated and the Company Affiliates not so designated shall each
separately satisfy the requirements of Code Section 410(b) and Treas. Reg.
(S)1.401(a)(4)-4(b)).
9. Employee and Participant Transfers. It is anticipated that an
----------------------------------
Employee may be transferred between Participating Employers. The transfer of
any Participant or Employee from one Participating Employer to another
Participating Employer, whether such individual is an Employee of the Company,
Company Affiliate or a Non-Affiliated Participating Employer, shall not affect
such individual's rights under the Plan, and all amounts credited to such
individual's accounts as well as his accumulated service time with the
transferor or predecessor, and his length of participation in the Plan, shall
continue to such individual's credit. No such transfer shall effect a
termination of employment hereunder, and the Participating Employer to which the
Employee is
(ii)
<PAGE>
transferred shall thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer from whom the
Employee was transferred.
10. Expenses. Unless paid by the Company, all expenses of the Trust
--------
which, at the election of the Company, are paid by the Participating Employers
and are not paid by the Trust Fund, shall be allocated among the Participating
Employers, such that each Participating Employer's portion of the total expenses
paid by the Participating Employers shall be a fraction, the numerator of which
is the total amount standing to the credit of all Participants employed by such
Participating Employer, and the denominator of which is the total standing to
the credit of all Participants.
11. Contribution by Affiliate. If any Participating Employer is prevented
-------------------------
in whole or in part from making a contribution to the Trust Fund which it would
otherwise have made under the Plan by reason of having no current or accumulated
earnings or profits, or because such earnings or profits are less than the
contribution which it would otherwise have made, then, pursuant to Code Section
404(a)(3)(B), so much of the contribution which such Participating Employer was
so prevented from making may be made, for the benefit of the participating
employees of such Participating Employer, by the other Participating Employers
who are members of the same affiliated group within the meaning of Code Section
1504 to the extent of their current or accumulated earnings or profits, except
that such contribution by each such other Participating Employer shall be
limited to the proportion of its total current and accumulated earnings or
profits remaining after adjustment for its contribution to the Plan made without
regard to this paragraph which the total prevented contribution bears to the
total current and accumulated earnings or profits of all the Participating
Employers remaining after adjustment for all contributions made to the Plan
without regard to this paragraph.
12. Designation of Agent. Each Participating Employer shall be deemed to
--------------------
be a party to this Plan; provided, however, that with respect to all of its
relations with the Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably the
Company as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.
13. Designation of Trustee, Plan Administrator and Committee. The Company
--------------------------------------------------------
shall have the sole authority to designate and replace the Plan Trustee, the
Plan Administrator and the Committee.
14. Plan Amendment and Termination. The Company or the Parent Corporation
------------------------------
shall have the sole authority to amend or terminate the Plan, in accordance with
Section 13.5. The Company or the Parent Corporation may from time to time make
one or more Plan amendments which it determines, in its own discretion, to be
appropriate or necessary, and need not consult with any other Participating
Employer before making any Plan amendment. In the event that a Non-Affiliated
Participating Employer is not satisfied with a Plan Amendment adopted by the
Company or by the Parent Corporation, or desires that the Plan be amended and
the Company and the Parent Corporation do not agree thereto, such Non-Affiliated
Participating Employer may discontinue its participation in the Plan, in
accordance with paragraph 15 of this Exhibit A.
(iii)
<PAGE>
15. Discontinuance of Participation. Each Participating Employer may
-------------------------------
discontinue or revoke its participation in the Plan at any time. At the time of
any such discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee and the Company.
The Trustee shall thereafter transfer, deliver and assign to a trust fund
designated by such Participating Employer, which trust fund shall be established
or maintained by such Participating Employer under a plan satisfying the
qualified plan requirements of Code Section 401, assets allocable to the
Participants of such Participating Employer, and corresponding liabilities;
provided, however, that no such transfer shall be made unless all applicable
qualified plan requirements are satisfied in conjunction therewith, including,
but not limited to, the requirements of Code Section 414(l). If no successor is
designated, the Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of the Plan. In no such event
shall any part of the corpus or income of the Trust as it relates to such
Participating Employer be used for or diverted to purposes other than for the
exclusive benefit of the Employees of such Participating Employer.
16. Administrator's Authority. The Plan Administrator shall have
-------------------------
authority to make any and all necessary rules or regulations, binding upon all
Participating Employers and all Participants, to effectuate the purpose of this
Article.
(iv)
<PAGE>
EXHIBIT 4.8
AMENDMENT TO
THE TRUE NORTH COMMUNICATIONS INC.
PROFIT SHARING AND SAVINGS PLAN FOR BJK&E
AMENDMENT TO
THE TRUE NORTH COMMUNICATIONS INC.
PROFIT SHARING AND SAVINGS PLAN FOR BJK&E
In accordance with Section 13.2 of the True North Communications Inc.
Profit Sharing and Savings Plan for BJK&E (the "Plan"), Bozell, Jacobs, Kenyon &
Eckhardt, Inc. hereby amends the Plan as follows, effective as of April 1, 1999:
1. Article I is amended by the addition of the following Section 1.30A
after Section 1.30:
1.30A "Restricted Account Balance" shall have the meaning set forth
in Section 4.3.
2. Section 2.1 is amended to read as follows:
"2.1 ELIGIBILITY.
-----------
(a) Existing Participants. Each Eligible Employee who was a
---------------------
Participant immediately prior to April 1, 1999, shall continue to be a
Participant on and after such date.
(b) Elective Contributions, Voluntary After-Tax Contributions and
-------------------------------------------------------------
Matching Contributions. Each Eligible Employee not described in
-----------------------
paragraph (a) whose Hours of Service customarily exceed 1,000 in a
Plan Year shall become eligible to make Elective Contributions,
pursuant to Section 3.1 and Voluntary After-Tax Contributions,
pursuant to Section 3.5 and to have Matching Contributions made for
his benefit, pursuant to Section 3.2, on the first day of the first
month coinciding with or next following the 60th day after his or
her date of employment, provided he is still an Eligible Employee on
such date. An Employee whose Hours of Service customarily exceed
1,000 in a Plan Year (or who has completed a Year of Service) and who
becomes (or again becomes) an Eligible Employee upon his (i) transfer
to a Participating Employer from an Employer that is not a
Participating Employer, (ii) change in employment status or (iii)
rehire by a Participating Employer shall become eligible to make
Elective Contributions, pursuant to Section 3.1 and Voluntary After-
Tax Contributions, pursuant to Section 3.5 and to have Matching
Contributions made for his benefit, pursuant to Section 3.2, as soon
as administratively practicable following such transfer, change in
employment status or rehire, but in no event earlier than the first
day of the month immediately following such transfer, change in
employment status or rehire. Any other Eligible Employee shall become
eligible to make Elective
<PAGE>
Contributions, pursuant to Section 3.1 and Voluntary After-Tax
Contributions, pursuant to Section 3.5 and to have Matching
Contributions made for his benefit, pursuant to Section 3.2, as of the
Entry Date coinciding with or next following his completion of a Year
of Service, provided he is still an Eligible Employee on such date.
"(c) Discretionary Contributions. Each Eligible Employee not
---------------------------
described in paragraph (a) shall become a Participant eligible to be
allocated Discretionary Contributions, pursuant to Section 3.3, and
to participate in the Plan for all other purposes, on the Entry Date
coincident with or immediately following the date on which he
completes a Year of Service, provided he is still an Eligible Employee
on such date."
3. Section 3.2, second sentence, is amended to read as follows:
"The amount of Matching Contributions made by a Participating Employer
for the payroll period on behalf of a Participant shall be equal to
100% of the sum of the Elective Contributions made on behalf of the
Participant for the current payroll period and all prior payroll
periods in the Plan Year which do not exceed 3-1/3 % of the
Participant's cumulative Compensation for the Plan Year, reduced by
all prior Matching Contributions made on behalf of the Participant for
the Plan Year."
4. Section 3.5, paragraph (b), first sentence, is amended to read as
follows:
"Each Voluntary Contribution Agreement shall be in the form prescribed
or approved by the Committee and may be entered into or changed by the
Participant, with such prior notice as the Committee may prescribe, as
of the first day of any calendar quarter."
5. Article III is amended by the addition of the following Section 3.12
at the end thereof:
"3.12 FORMS OF CONTRIBUTIONS. Contributions to the Plan may be made
in cash or shares of Stock or a combination thereof. For this
purpose, the value of Stock delivered to the Trustee shall be the
closing price therefor on such date, as reported on the New York Stock
Exchange or such other national securities exchange on which the Stock
may be listed or, if not listed on a stock exchange on such date, the
mean of the reported bid prices for the Stock on such date."
6. Section 4.3 is amended to read as follows:
"4.3 INVESTMENT FUNDS.
----------------
At the direction of the Pension Investment Committee, the Trustee
shall establish and maintain one or more investment funds, with
differing investment objectives, in which the Trust Fund shall be
invested (the "Investment Funds"). One of the Investment Funds
established and maintained by the Trustee shall be a fund
(2)
<PAGE>
whose assets shall be invested primarily, if not exclusively, in Stock
(the "TN Stock Fund"). Except as provided in the following paragraph,
and subject to rules established by the Committee (which rules shall
be applied in a uniform, nondiscriminatory manner), each Participant
shall direct the investment by the Trustee of amounts allocated to the
Participant's Accounts among any one or more or the Investment Funds.
The Pension Investment Committee may at any time, and from time to
time, direct that a new Investment Fund or Funds be established and/or
discontinue an existing Investment Fund or Funds. All dividends,
interest and other income of, as well as any cash received from the
sale or exchange of securities or other property of an Investment
Fund, shall be invested and reinvested in the same Investment Fund.
Notwithstanding the preceding paragraph, the following portions of a
Participant's Accounts shall not be subject to investment direction by
the Participant, but instead shall be invested exclusively in the TN
Stock Fund: (i) the portion of the Participant's Matching
Contributions Account attributable to Matching Contributions made on
his behalf on or after April 1, 1999, and the portion of such account
which was invested in the "Company Stock Fund" as such term was
defined under the Plan prior to the Effective Date, and (ii) the
portion of the Participant's Discretionary Employer Contributions
Account attributable to contributions which were made under the True
North Communications Inc. Stock Bonus Plan for BJK&E which was merged
into this Plan and the portion of such account which was invested in
the "Company Stock Fund" as such term was defined under the Plan prior
to the Effective Date (said portions of a Participant's Accounts
hereinafter being referred to as the Participant's "Restricted Account
Balance"). However, subject to applicable securities laws and only as
and to the extent permitted by the Committee in accordance with rules
which it may establish (which rules may include age and/or amount
limitations and which rules may be amended from time to time), a
portion of each Participant's Restricted Account Balance may become
unrestricted, on or after which time, the Participant may direct the
investment of such portion of the Participant's Accounts among one or
more of the Investment Funds made available under the Plan, as
provided and in accordance with the provisions of the first paragraph
of this Section 4.3.
All investment directions shall be timely furnished to the Trustee by
the Committee, except to the extent that the Committee and the Trustee
mutually agree that the Trustee may accept investment instructions
directly from Participants. In making any investment of the assets of
the Trust Fund among the various Investment Funds, the Trustee shall
be fully entitled to rely on such directions furnished by the
Committee or, if applicable under the preceding sentence, by the
Participant, and shall be under no duty to make any inquiry or
investigation with respect thereto. None of the Trustee, the
Committee, or the Pension Investment Committee shall be liable for any
loss, nor shall any of such parties be liable for any breach,
resulting from a Participant's direction of the investment of any part
of his individual Account in one or more of the Investment Funds.
(3)
<PAGE>
Except with respect to Restricted Account Balances, the Plan is
intended to be an "ERISA Section 404(c) plan" within the meaning of
regulations issued pursuant to such section. The Committee shall be
the fiduciary identified to furnish the information contemplated by
ERISA Section 404(c), but may designate on its behalf another person
or entity to provide such information or to perform any of the
obligations of the Committee under thps Section 4.3.
The Trustee may make purchases and sales of Stock for the TN Stock
Fund either in the public market or in private purchases at the then
current market price."
7. Article 10, Section 10.9 is amended to read as follows:
"10.9 CONFIDENTIALITY. Notwithstanding anything contained herein to
---------------
the contrary, all instructions and directions received by the Trustee
for Participants pursuant to Section 10.7 and 10.8 shall be maintained
by the Trustee as confidential and shall not be disclosed to any
person, including but not limited to, any Participating Employer or
Employee, or any Employee, officer or director of any Participating
Employer or Employer; provided, however, that such instructions may be
relayed by the Trustee to a record keeper, auditor or other person
providing services to the Plan if such person (i) is not a
Participating Employer or Affiliate or an Employee, officer or
director of a Participating Employer or Affiliate and (ii) agrees not
to divulge such instructions to any other person, including but not
limited to, any Participating Employer or Employer, or any Employee,
officer or director of any Participating Employer or Affiliate."
8. Exhibit A, Section 8, second sentence is amended to read as follows:
"All such contributions and reallocated forfeitures shall instead be
invested in the other Investment Funds (in accordance with the
investment instructions of the Participants to whose accounts such
amounts are allocated)."
IN WITNESS WHEREOF, Bozell, Jacobs, Kenyon & Eckhardt, Inc. has caused this
amendment to be executed this 6th day of April, 1999.
BOZELL, JACOBS, KENYON & ECKHARDT, INC.
By: ________________________________________
Its: ________________________________________
(4)
<PAGE>
Exhibit 5.1
[Letterhead of True North]
April 13, 1999
True North Communications Inc.
101 East Erie Street
Chicago, Illinois 60611
Ladies and Gentlemen:
This opinion is delivered to you in connection with the registration
statement on Form S-8 to be filed with the Securities and Exchange Commission on
the date hereof (the "Registration Statement") relating to the registration of
200,000 shares of common stock, $.33-1/3 par value per share, of True North
Communications Inc. (the "Company"), together with Preferred Stock Purchase
Rights (the "Rights") associated therewith (the "Registered Shares") issued
under, and interests (the "Interests") in, the True North Communications Inc.
Profit Sharing and Savings Plan for BJK&E (the "Plan"). The Terms of the Rights
are set forth in the Rights Agreement dated as of November 4, 1998 between the
Company and the First Chicago Trust Company of New York, as Rights Agent.
I, in my capacity as Vice President and Assistant General Counsel of the
Company, am familiar with the proceedings to date with respect to the
Registration Statement and have examined such records, documents and matters of
law and satisfied myself as to such matters of fact as I have considered
relevant for the purposes of this opinion.
Based upon my examination mentioned above, and relying upon statements of
fact contained in the documents which I have examined, I am of the opinion that:
(i) the Interests of participants in the Plan will be valid and the
Registered Shares, when sold or issued hereafter in accordance with
the provisions of the Plan, in accordance with Delaware law and upon
payment of the consideration for such shares as contemplated by the
Plan, will be validly issued, fully paid and non-assessable; and
(ii) the Rights associated with the Registered Shares will be legally
issued when such Rights shall have been duly issued in accordance
with the terms of the Rights Agreement.
I do not find it necessary for the purposes of this opinion, and
accordingly do not purport to cover herein, the application of the securities or
"blue sky" laws of the various states to the sale of the Registered Shares of
associated Rights.
<PAGE>
April 13, 1999
Page 2
This opinion is limited to the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. I assume
no obligation to revise or supplement this opinion should the General
Corporation Law of the State of Delaware or the federal law of the United States
as presently in effect be changed by legislative action, judicial decision or
otherwise.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement and to the
references to me in the Registration Statement. In giving this consent, I do not
thereby admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Suzanne S. Bettman
-----------------------
Suzanne S. Bettman
Vice President
Assistant General Counsel
<PAGE>
[Letterhead of Arthur Andersen LLP]
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our reports and to all references
to our Firm included in or made a part of this Registration Statement on Form
S-8.
/s/ Arthur Andersen LLP
Chicago, Illinois
April 13, 1999
<PAGE>
Exhibit 23.2
[Letterhead of KPMG Peat Marwick LLP]
Accountants' Consent
The Board of Directors
True North Communications, Inc.:
We consent to the use of our reports incorporated by reference herein.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Omaha, Nebraska
April 12, 1999
