Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
HANNAFORD BROS.
(Exact name of registrant as specified in its charter)
Maine 01-0085930
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
145 Pleasant Hill Road, Scarborough, Maine 04074
(Address of Principal Executive Offices) (Zip Code)
HANNAFORD SOUTHEAST SAVINGS AND INVESTMENT PLAN
(Full title of plan)
Charles H. Crockett
145 Pleasant Hill Road
Scarborough, Maine 04074
(207) 883-2911
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Per Offering Registra-
Registered Registered Share* Price* tion Fee
Common Stock, 500,000 shares $26.875 $13,437,500 $4,633.62
$.75 Par Value
*Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h). Reflects the average of the high and low
prices reported for June 5, 1995.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Hannaford Bros. Co. ("Hannaford" or the "Company") and the Hannaford
Southeast Savings and Investment Plan (the "Plan") hereby incorporate by
reference into this Registration Statement the Company's Annual Report on
Form 10-K for the year ended December 31, 1994; the Company's Quarterly
Report on Form 10-Q for the quarter ended April 1, 1995; the description of
the Company's Common Stock contained in the Registration Statement filed
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including any amendment or report filed for the purpose of
updating such description; and all documents filed by the Company or the
Plan pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold.
Item 5. Interests of Named Experts and Counsel.
Verrill & Dana of Portland, Maine, is general counsel to the Company
and has given its opinion with regard to the validity of the Common Stock
and the Plan interests to which this Registration Statement relates. Peter
B. Webster, a partner in the firm, serves as Clerk and an Assistant
Secretary of the Company; Gregory S. Fryer, a partner in the firm, also
serves as an Assistant Secretary of the Company. Members of the firm hold
in the aggregate less than 1% of the Common Stock of Hannaford.
Item 6. Indemnification of Directors and Officers.
Hannaford's bylaws provide for indemnification of directors and
officers of the Company for certain actions taken or omitted in good faith.
In general, the scope of such indemnity is as broad as is permitted by the
Maine Business Corporation Act. In addition, Hannaford carries liability
insurance relative to certain of these indemnifications. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may
be permitted pursuant to the foregoing provisions or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Pursuant to an amended and restated standstill agreement between
Hannaford and the Sobey Parties dated as of February 4, 1988, the Company
has agreed to indemnify the Sobey Parties against any claims which may arise
from execution and delivery of such agreement. The Sobey Parties presently
own approximately 25.6% of the Company's outstanding Common Stock.
<PAGE>
Item 8. Exhibits.
(a) The following exhibits are filed as part of this Registration
Statement:
4.1 Articles of Incorporation of the Registrant, as amended, is
incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993 (SEC File No. 1-
7603).
4.2 By-laws of the Registrant, as amended, is incorporated by reference to
Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 (SEC File No. 1-7603).
4.3 Rights Agreement dated of February 4, 1988 between the Registrant and
The First National Bank of Boston, as Rights Agent, is incorporated by
reference to Exhibit 2 to the Registrant's Current Report on Form 8-K, dated
February 16, 1988 (SEC File No. 1-7603).
4.4 Appointment and Amendment Agreement dated September 22, 1992 to said
Rights Agreement, substituting Continental Stock Transfer & Trust Company as
Rights Agent, is incorporated by reference to Exhibit 4.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended January 2,
1993 (SEC File No. 1-7603).
4.5 Hannaford Southeast Savings and Investment Plan.
5 Opinion, dated June 8, 1995, of Verrill & Dana, including the consent
of such counsel.
15 Letter of Coopers & Lybrand dated June 7, 1995.
23.1 Consent of Coopers & Lybrand (included in Exhibit 15).
23.2 Consent of Verrill & Dana (included in Exhibit 5).
(b) The Registrant undertakes to submit the Plan and any amendment
thereto to the Internal Revenue Service in a timely manner and has made or
will make all changes required by the IRS in order to qualify the Plan.
Item 9. Undertakings.
1. The undersigned Registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment
to this Registration Statement to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement.
<PAGE>
2. The undersigned Registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. The undersigned Registrant hereby undertakes 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.
4. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's Annual Report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense
of any action, suit, or proceeding) is asserted by such director, officer,
or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Scarborough, State of Maine, on
June 8, 1995.
HANNAFORD BROS. CO.
/s/Hugh G. Farrington
Hugh G. Farrington
President
Chief Executive Officer
Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated above.
/s/James L. Moody, Jr. /s/Laurel Cutler
James L. Moody, Jr. Laurel Cutler
Chairman of the Board, Director
Director
/s/David F. Sobey /s/Blythe J. McGarvie
David F. Sobey Blythe J. McGarvie
Director Senior Vice President,
Chief Financial Officer
/s/Walter J. Salmon /s/Robert L. Strickland
Walter J. Salmon Robert L. Strickland
Director Director
/s/Hugh G. Farrington /s/Richard K. Lochridge
Hugh G. Farrington Richard K. Lochridge
President Director
Chief Executive Officer
Director
/s/Claudine B. Malone /s/Bruce D. Kay
Claudine B. Malone Bruce D. Kay
Director Vice President & Controller
/s/Robert D. Bolinder /s/William A. Andres
Robert D. Bolinder William A. Andres
Director Director
/s/Bruce G. Allbright /s/William T. End
Bruce G. Allbright William T. End
Director Director
/s/James W. Gogan
James W. Gogan
Director
<PAGE>
HANNAFORD BROS. CO.
FORM S-8
INDEX TO EXHIBITS
4.1 Articles of Incorporation of the Registrant, as amended, is
incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993 (SEC File No. 1-
7603).
4.2 By-laws of the Registrant, as amended, is incorporated by reference to
Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 (SEC File No. 1-7603).
4.3 Rights Agreement dated of February 4, 1988 between the Registrant and
The First National Bank of Boston, as Rights Agent, is incorporated by
reference to Exhibit 2 to the Registrant's Current Report on Form 8-K, dated
February 16, 1988 (SEC File No. 1-7603).
4.4 Appointment and Amendment Agreement dated September 22, 1992 to said
Rights Agreement, substituting Continental Stock Transfer & Trust Company as
Rights Agent, is incorporated by reference to Exhibit 4.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended January 2,
1993 (SEC File No. 1-7603).
4.5 Hannaford Southeast Savings and Investment Plan.
5 Opinion, dated June 8, 1995, of Verrill & Dana, including the consent
of such counsel.
15 Letter of Coopers & Lybrand dated June 7, 1995.
23.1 Consent of Coopers & Lybrand (included in Exhibit 15).
23.2 Consent of Verrill & Dana (included in Exhibit 5).
Exhibit 4.5
HANNAFORD SOUTHEAST SAVINGS AND INVESTMENT PLAN
ARTICLE I
Purpose
The Boney Wilson & Sons, Inc. Retirement Savings Plan, originally adopted
effective March 1, 1993, is hereby renamed the Hannaford Southeast Savings
and Investment Plan and hereby amended and restated effective generally July
1, 1995.
The purpose of this Plan is to encourage Eligible Employees to provide for
their financial security through regular savings. The Plan is intended to
comply with the requirements of Section 401(a) and 401(k) of the Code and
shall be interpreted to comply with the applicable provisions of the Code
and ERISA, as well as the regulations and rulings issued thereunder.
ARTICLE II
Definitions
The following terms, when used herein, shall have the following meanings
unless the context clearly indicates otherwise:
2.1 "Account" shall mean the account established and maintained by the
Administrative Committee for each Participant which shall reflect the
Participant's share of the Trust Fund; provided such Account shall, in
accordance with Section 8.1, reflect separately the Participant's (a)
Elective Contributions, (b) Matching Contributions, (c) Discretionary
Contributions, (d) Rollover Contributions, and (e) any direct transfer of
plan assets made on behalf of an Employee in accordance with Section 4.9.
2.2 "Actual Deferral Percentage" for any Plan Year shall mean, except as
otherwise provided in Section 2.39, the average of the ratios, calculated
separately for each Eligible Employee, of the amount of Elective
Contributions made on behalf of such Employee for such year to such
Employee's compensation for such year (whether or not the Employee was a
Participant for the entire Plan Year). For purposes of this Section,
"compensation" shall mean compensation as defined in Section 7.5 and may, at
the election of the Employer, include amounts excludable from gross income
under Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code.
2.3 "Administrative Committee" shall mean the Committee appointed in
accordance with Section 13.1.
2.4 "Annual Addition" shall mean the sum of the Employer Contributions,
employee contributions and forfeitures allocated to the Account of a
Participant for a Limitation Year and the amounts described in Section 7.6.
2.5 "Beneficiary" shall mean the person or persons designated by a
Participant as provided in Section 9.8 to receive any benefits payable under
the Plan following the death of the Participant.
2.6 "Board of Directors" shall mean the Board of Directors of the Company
or any corporation with or into which it may be merged or consolidated.
<PAGE>
2.7 "Break in Service", effective January 1, 1995, shall have the meaning
set forth in subsection (a) or (b) below, whichever is applicable:
(a) In the case of an hourly Employee, the term "Break in Service" shall
mean a Plan Year in which such Employee is not credited with more than four
hundred and thirty-five (435) Hours of Service on account of any one or more
of the following:
(i) discharge from employment;
(ii) voluntary termination of employment;
(iii) failure to return to the employ of an Employer or a Related Employer
prior to the expiration of the period entitling such Employee to
reemployment rights under the Uniformed Services and Reemployment Rights Act
of 1994 or any other applicable federal law after military service in the
Armed Forces of the United States;
(iv) failure to return to the employ of an Employer or a Related Employer
upon the expiration of any period of absence due to sickness, accident or
disability for which such Employee is entitled to receive benefits under any
welfare plan sponsored by an Employer or a Related Employer; or
(v) failure to return to the employ of an Employer or a Related Employer
when recalled following a temporary period of layoff for a period not to
exceed twelve (12) months.
(b) In the case of a salaried or salaried nonexempt Employee, the term
"Break in Service" shall mean a Plan Year in which such Employee is not
credited with more than five hundred (500) Hours of Service on account of
any one or more of the following:
(i) discharge from employment;
(ii) voluntary termination of employment;
(iii) failure to return to the employ of an Employer or a Related Employer
prior to the expiration of the period entitling such Employee to
reemployment rights under the Uniformed Services Employment and Reemployment
Rights Act of 1994 or any other applicable federal law after military
service in the Armed Forces of the United States;
(iv) failure to return to the employ of an Employer or a Related Employer
upon the expiration of any period of absence due to sickness, accident or
disability for which such Employee is entitled to receive benefits under any
welfare plan sponsored by an Employer or a Related Employer; or
(v) failure to return to the employ of an Employer or a Related Employer
when recalled following a temporary period of layoff for a period not to
exceed twelve (12) months.
2.8 "Code" shall mean the Internal Revenue Code of 1986, as from time to
time amended.<PAGE>
2.9 "Company" shall mean Hannaford Bros. Co., a Maine corporation or any
corporation with or into which it may be merged or consolidated.
2.10 "Company Stock" shall mean shares of common stock of the Company.
2.11 "Compensation" shall mean prior to January 1, 1996, the total
compensation paid by an Employer to the Employee for services rendered while
a Participant that constitutes wages as defined in Section 3401(a) of the
Code and all other payments made by an Employer to an Employee for services
rendered while a Participant for which the Employer is required to furnish
the Employee a written statement under Sections 6041(d), 6051(a)(3) and 6052
of the Code without regard to any rules under Section 3401(a) of the Code
that limit the remuneration included in wages based on the nature or
location of the employment or services performed. Notwithstanding the
foregoing to the contrary, Compensation (i) shall include elective
contributions made by an Employer on behalf of an Employee that are not
includable in income under Sections 125, 402(e)(3), or 402(h) of the Code;
and (ii) shall be reduced by reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation
and welfare benefits.
Effective January 1, 1996, "Compensation" shall mean the basic compensation
paid, before any reduction pursuant to a Deferral Election or a benefit
election under an Employer's Code Section 125 plan, by an Employer to an
Employee for services rendered while a Participant, excluding reimbursements
or other expense allowances, fringe benefits (cash and noncash), moving
expenses, deferred compensation, welfare benefits, unguaranteed overtime
pay, bonuses, and other irregular payments.
Notwithstanding the foregoing to the contrary, the annual Compensation of
any Employee in excess of Two Hundred Thousand Dollars ($200,000.00) (or
such higher amount as the Secretary of the Treasury may prescribe) shall not
be taken into account under the Plan, and, effective January 1, 1994, the
annual Compensation of any Employee in excess of One Hundred Fifty Thousand
Dollars ($150,000.00) (or such higher amount as the Secretary of the
Treasury may prescribe) shall not be taken into account under the Plan. In
the event Compensation is determined based on a period which contains fewer
than twelve (12) calendar months, the annual Compensation limit shall be an
amount equal to the annual Compensation limit for the calendar year in which
the period begins multiplied by a fraction, the numerator of which is the
number of full calendar months in the period and the denominator of which is
twelve (12). For purposes of the annual Compensation limit, any
Compensation paid to an Employee who is the spouse or a lineal descendant
(who has not attained age nineteen (19) by the close of the Plan Year) of an
Employee who is a Five Percent Owner or one of the ten (10) Highly
Compensated Employees paid the highest compensation (as defined in Section
7.5) for the Plan Year shall be treated as paid to or on behalf of such Five
Percent Owner or Highly Compensated Employee. If the annual Compensation
limit is exceeded as a result of the application of the preceding sentence,
then the limit shall be prorated among the affected Employees' Compensation
<PAGE>
as determined prior to the application of the annual Compensation limit. If
Compensation for a prior Plan Year is taken into account for any Plan Year,
such Compensation shall be subject to the annual Compensation limit in
effect for such prior Plan Year.
The average percentage of total compensation (as defined in Treasury
Regulation Section 1.414(s)-1(d)(3)(ii) included in the Compensation of
Highly Compensated Employees as a group shall not exceed by more than a de
minimis amount the average percentage of total compensation included in the
Compensation of Non-Highly Compensated Employees as a group. This
determination shall be made in accordance with the provisions of Regulation
Section 1.414(s)-1(d)(3), which is incorporated herein by reference.
2.12 "Deferral Election" shall mean an election made by an Eligible Employee
in accordance with Section 5.1.
2.13 "Determination Date" shall mean, with respect to any Plan Year, the
last day of the preceding year or, in the case of the first Plan Year of the
Plan, the last day of such Plan Year.
2.14 "Discretionary Contribution" shall mean a contribution made by an
Employer in accordance with Section 4.1(c).
2.15 "Effective Date" of this amendment and restatement shall mean, except
as provided otherwise herein, July 1, 1995.
2.16 "Elective Contribution" shall mean a contribution made by an Employer
on behalf of a Participant pursuant to a Deferral Election, as provided in
Section 4.1(a).
2.17 "Eligibility Computation Period" shall mean the initial twelve (12)
consecutive month period beginning with the date on which the Employee first
performs an Hour of Service and thereafter each Plan Year commencing with
the Plan Year which includes the first anniversary of his or her Employment
Commencement Date.
In the case of an hourly Employee, effective January 1, 1995, if such
Employee is credited with eight hundred seventy (870) Hours of Service in
both his or her initial Eligibility Computation Period and in the Plan Year
which includes the first anniversary of his or her Employment Commencement
Date, he or she shall be credited with two (2) Years of Participation
Service.
In the case of a salaried or salaried nonexempt Employee, effective January
1, 1995, if such Employee is credited with one thousand (1,000) Hours of
Service in both his or her initial Eligibility Computation Period and the
Plan Year which includes the first anniversary of his or her Employment
Commencement Date, such Employee shall be credited with two (2) Years of
Participation Service.
<PAGE>
In measuring completion of a Year of Participation Service upon reemployment
of an Employee after he or she has incurred a Break in Service, the term
"Eligibility Computation Period" shall mean the twelve (12) consecutive
month period beginning on the Employee's Reemployment Commencement Date and,
where necessary, Plan Years beginning with the Plan Year which includes the
first anniversary of the Employee's Reemployment Commencement Date.
2.18 "Eligible Employee" shall mean an Employee who is eligible to
participate in the Plan as provided in Section 3.1.
2.19 "Employee" shall mean any individual who is employed by the Company or
one of its subsidiaries in its Southeast Division, excluding Leased
Employees.
2.20 "Employer" shall mean the Company, Boney Wilson & Sons, Inc. and any
other subsidiary of the Company that adopts the Plan with the consent of the
Board of Directors. If an Employer is a member of a group of employers
which constitutes a controlled group of corporations (as defined in Section
414(b) of the Code), which constitutes trades or businesses (whether or not
incorporated) which are under common control (as defined in Section 414(c)
of the Code), or which constitutes an affiliated service group (as defined
in Section 414(m) of the Code and modified in Section 414(o) of the Code),
all such employers shall be considered a single employer as required by
Sections 414(b), 414(c), 414(m) and 414(o) of the Code. For purposes of
applying the limitations of Article VII, the Section 414(b) definition of a
controlled group of corporations and the Section 414(c) definition of trades
or businesses under common control shall be modified as provided in Section
415(h) of the Code.
2.21 "Employer Contribution" shall mean any Elective Contribution, Matching
Contribution, Discretionary Contribution or such additional contribution as
may be required under Section 9.4 made by an Employer in accordance with the
terms of the Plan.
2.22 "Employment Commencement Date" shall mean the date on which an Employee
first performs an Hour of Service for an Employer.
2.23 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time, and any regulations issued pursuant
thereto as such Act or such regulations affect this Plan.
2.24 "Excess Deferral" shall mean Elective Contributions in excess of the
limitation of Section 6.1.
2.25 "Excess Elective Contributions" shall mean for any Plan Year the excess
of
(a) the aggregate amount of Employer Contributions taken into account under
Section 5.3 that are paid to the Trust on behalf of Highly Compensated
Eligible Employees for such year, over
<PAGE>
(b) the maximum amount of such contributions permitted under Section 5.3.
2.26 "Excess Matching Contributions" shall mean for any Plan Year the excess
of
(a) the aggregate amount of Employer Contributions taken into account under
Section 4.7(a) that are paid to the Trust on behalf of Highly Compensated
Eligible Employees for such year, over
(b) the maximum amount of such contributions permitted under Section
4.7(a).
2.27 "Finance Committee" shall mean the Finance Committee of the Board of
Directors.
2.28 "Five Percent Owner" shall mean any person who owns (or is considered
as owning within the meaning of Section 318 of the Code) more than five
percent (5%) of the outstanding stock of an Employer or stock possessing
more than five percent (5%) of the total combined voting power of all stock
of an Employer.
2.29 "Former Participant" shall mean any individual who ceases to be
employed by an Employer or a Related Employer and is no longer employed by
any of them, and who has not received full distribution of his or her
Account.
2.30 "Highly Compensated Eligible Employee" shall mean an Employee who is
eligible to participate in the Plan as provided in Section 3.1 and who is a
Highly Compensated Employee.
2.31 "Highly Compensated Employee" shall mean any Employee who, during the
Plan Year or the preceding Plan Year--
(a) was at any time a Five Percent Owner;
(b) received compensation from an Employer in excess of Seventy-Five
Thousand Dollars ($75,000.00) or such higher amount in effect under Section
414(q) of the Code;
(c) received compensation from an Employer in excess of Fifty Thousand
Dollars ($50,000.00) or such higher amount in effect under Section 414(q) of
the Code, and was in the Top-Paid Group for such year; or
(d) was at any time an officer and received compensation greater than fifty
percent (50%) of the amount in effect under Section 415(b)(1)(A) of the Code
for such year, but
(i) in no event shall more than fifty (50) Employees or, if less, ten
percent (10%) of all Employees, be treated as officers under this Section,
and
<PAGE>
(ii) if for any determination year no officer of an Employer is described
in this subsection, the officer of such Employer receiving the greatest
compensation for such year shall be treated as a Highly Compensated Employee
under this subsection.
For any Plan Year in which an Employee is not a member of the group
consisting of the one hundred (100) Employees receiving the greatest
compensation from an Employer during such year, he or she shall not be
treated as a Highly Compensated Employee under subsections (b), (c) or (d)
of this Section unless such Employee was treated as a Highly Compensated
Employee under one of such subsections for the preceding Plan Year, without
regard to this sentence. A former Employee shall be treated as a Highly
Compensated Employee if he or she was a Highly Compensated Employee when
such Employee separated from service or at any time after attaining age
fifty-five (55).
If an Employee is a family member of a Five Percent Owner or of one of the
ten (10) Highly Compensated Employees receiving the greatest compensation
from the Employer during the Plan Year, then such Employee shall not be
considered a separate Employee and the compensation paid by the Employer to
such Employee (and any contribution or benefit on his or her behalf) shall
be treated as if it were paid to (or on behalf of) the Five Percent Owner or
Highly Compensated Employee. For purposes of this Section, "family member"
shall mean a spouse, lineal ascendant, lineal descendant and the spouses of
such lineal ascendants and descendants.
For purposes of this Section, "compensation" shall have the meaning given
such term under Section 415(c)(3) of the Code, but without regard to the
exclusions provided under Sections 125, 402(e)(3) and 402(h)(1)(B) of the
Code.
The dollar amounts in subsections (b) and (c) of this Section 2.31 shall be
increased at the same time and in the same manner as the dollar limitation
under Section 415(b)(1)(A) of the Code.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the Top-Paid
Group, the top one hundred (100) Employees, the number of Employees treated
as officers and the compensation that is considered, shall be made in
accordance with Section 414(q) of the Code and the regulations thereunder.
2.32 "Hour of Service", effective January 1, 1995, shall have the meaning
set forth in subsection (a) or (b) below, whichever is applicable:
(a) In the case of an hourly Employee, the term "Hour of Service" shall
mean:
(i) each hour for which such Employee is paid, or entitled to payment, for
the performance of duties for an Employer. Such hours shall be credited to
the computation period in which such duties are performed.
<PAGE>
(ii) each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by an Employer, provided the same hours shall
not be credited under both subsection (a)(i) and this subsection (a)(ii).
These hours shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
(b) In the case of a salaried or salaried nonexempt Employee, the term
"Hour of Service" shall mean:
(i) each hour for which such an Employee is paid, or entitled to payment,
for the performance of duties for an Employer. Such hours shall be credited
to the computation period in which such duties are performed.
(ii) each hour for which such an Employee is paid, or entitled to payment,
directly or indirectly, by an Employer on account of a period of time during
which no duties were performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or leave of
absence. Notwithstanding the preceding sentence,
(aa) no more than five hundred and one (501) Hours of Service shall be
credited under this subsection (b)(ii) to an Employee on account of any
single continuous period during which he or she performs no duties (whether
or not such period occurs in a single computation period),
(bb) Hours of Service shall not be credited if payment is made or due under
a plan maintained solely for the purpose of complying with applicable
workers' compensation, unemployment compensation or disability insurance
laws; and
(cc) Hours of Service shall not be credited if payment is made solely to
reimburse an Employee for medical or medically related expenses incurred by
such Employee.
(iii) each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by an Employer. The same hours shall not be
credited both under subsection (b)(i) or (b)(ii) and under this subsection
(b)(iii). These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
In the case of any salaried or salaried nonexempt Employee, such Employee
shall be credited with forty-five (45) Hours of Service for each week such
Employee is required to be credited with at least one (1) Hour of Service in
accordance with subsections (b)(i), (b)(ii) or (b)(iii) of this Section.
Hours of Service shall be credited with respect to employment with other
members of an affiliated service group (as defined in Section 414(m) of the
Code), a controlled group of corporations (as defined under Section 414(b)
of the Code) or a group of trades or businesses under common control (as
<PAGE>
defined under Section 414(c) of the Code) of which an Employer is a member,
and any other entity required to be aggregated with an Employer pursuant to
Section 414(o) of the Code. Hours of Service shall also be credited with
respect to any individual who is treated as an Employee under Section 414(n)
or Section 414(o) of the Code. Hours of Service shall be credited under
this subsection only to the extent required under Section 414(b), (c), (m),
(n), (o) (or other applicable sections) of the Code and the regulations
thereunder.
The number of Hours of Service to be credited to each Employee shall be
determined in accordance with the provisions of 29 C.F.R. Sections
2530.200b-2(b), 2(c) and 2530.200b-3(e)(4) which are incorporated herein by
reference.
Each Employee who is absent from work for any period (i) by reason of the
pregnancy of the Employee, (ii) by reason of the birth of a child of the
Employee, (iii) by reason of the placement of a child with the Employee in
connection with the adoption of the child by the Employee, or (iv) for
purposes of caring for such child for a period beginning immediately
following such birth or placement shall, solely for purposes of determining
whether such Employee has incurred a Break in Service, be credited with the
Hours of Service which would normally have been credited to such Employee
but for such absence or, if such Hours of Service cannot be determined,
eight (8) Hours of Service for each day of such absence; provided the total
number of Hours of Service credited in accordance with this paragraph on
account of such absence shall not exceed five hundred and one (501). The
Hours of Service described in this paragraph shall be credited in the
computation period in which the absence begins, if the Employee would be
prevented from incurring a Break in Service in such period solely because
the Employee is credited with such Hours of Service or, in all other cases,
in the immediately following computation period.
2.33 "Investment Fund" shall mean an investment fund described in Section
11.2.
2.34 "Investment Manager" shall mean any fiduciary, other than the Trustee
or a named fiduciary (as defined in Section 402(a)(2) of ERISA):
(a) who is appointed by the Finance Committee to manage, acquire, or
dispose of all or any portion of the Trust Fund;
(b) who is (i) registered as an investment adviser under the Investment
Advisers Act of 1940; (ii) is a bank, as defined in said Act; or (iii) is an
insurance company qualified to manage, acquire or dispose of all or any
portion of the Trust Fund under the laws of more than one State; and
(c) who has acknowledged, in writing, that he or she is a fiduciary with
respect to the Plan."
2.35 "Key Employee" shall mean any Employee or former Employee (and the
Beneficiary of such Employee) who at any time during the Plan Year or the
four (4) preceding Plan Years is:
<PAGE>
(a) an officer of an Employer having annual compensation (as defined in
Section 7.5) from an Employer greater than fifty percent (50%) of the amount
in effect under Section 415(b)(1)(A) of the Code for any Plan Year (but in
no event shall more than fifty (50) Employees or, if less, the greater of
three (3) or ten percent (10%) of all Employees be treated as Key Employees
by reason of being officers);
(b) A person owning (or considered as owning within the meaning of Section
318 of the Code) more than a one-half percent interest, as well as one
of the ten (10) largest interests in an Employer, and having annual
compensation (within the meaning of Section 7.5) from such Employer of more
than the limitation in effect under Section 415(c)(1)(A) of the Code for any
Plan Year;
(c) a Five Percent Owner; or
(d) a person who has annual compensation (as defined in Section 7.5) from
an Employer of more than One Hundred and Fifty Thousand Dollars
($150,000.00) and who would be described in (c) above if one percent (1%)
was substituted for five percent (5%).
The determination of who is a Key Employee shall be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder, the provisions
of which are incorporated herein by reference. For purposes of determining
annual compensation under this Section, amounts excluded from gross income
under Sections 125, 402(e)(3), 402(h)(1)(B) and 403(b) of the Code shall be
taken into account.
2.36 "Leased Employee" shall mean any person who is not an Employee but who
provides services to an Employer if:
(a) such services are provided pursuant to an agreement between the
Employer and any leasing organization;
(b) such person has performed services for the Employer (or for the
Employer and any related person determined in accordance with Section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least one (l) year; and
(c) such services are of a type historically performed, in the business
field of the Employer, by employees.
2.37 "Limitation Year" shall mean a calendar year (or any other twelve (12)
consecutive month period adopted for all qualified plans of an Employer
pursuant to a written resolution adopted by such Employer). If the
Limitation Year is amended to a different twelve (12) consecutive month
period, the new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
2.38 "Matching Contribution" shall mean a contribution made by an Employer
in accordance with Section 4.1(b) on behalf of a Participant who has made a
Deferral Election.
<PAGE>
2.39 "Matching Contribution Percentage" shall mean for any Plan Year the
average of the ratios, calculated separately for each Eligible Employee, of
the amount of Matching Contributions made on behalf of such Employee for
such year and, at the election of the Employer, the amount of Elective
Contributions made on behalf of such Employee for such year to such
Employee's compensation for such year. For purposes of this Section,
"compensation" shall mean compensation as defined in Section 7.5 and may, at
the election of the Employer, include amounts excludable from gross income
under Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code. Notwithstanding
the foregoing provisions of this Section or Section 2.2 to the contrary, no
Elective Contributions may be taken into account in calculating the Matching
Contribution Percentage for any Eligible Employee unless the requirement of
Section 5.3(a) is satisfied both with and without the exclusion of such
Elective Contributions in calculating the Employee's Actual Deferral
Percentage.
2.40 "Named Fiduciary" or "Named Fiduciaries" shall mean, with respect to
the operation and administration of the Plan, the Administrative Committee,
and with respect to the management of the Trust Fund, the Finance Committee
and the Trustee.
2.41 "Non-Key Employee" shall mean any Employee who is not a Key Employee.
2.42 "Normal Retirement Age" shall mean age sixty-five (65).
2.43 "Participant" shall mean an Eligible Employee who elects to participate
in the Plan in accordance with Section 5.1, or who has made a Rollover
Contribution or on whose behalf a direct transfer has been made in
accordance with Section 4.9, and each other Eligible Employee on whose
behalf an Employer makes a Discretionary Contribution.
2.44 "Permissive Aggregation Group" shall mean each plan of an Employer
which is included in a Required Aggregation Group and any other plan or
plans of such Employer which, when considered as a group with the Required
Aggregation Group, continues to satisfy the requirements of Sections
401(a)(4) and 410 of the Code.
2.45 "Plan" shall mean the Hannaford Southeast Savings and Investment Plan.
2.46 "Plan Year" shall mean the twelve (12) consecutive month period ending
December 31.
2.47 "Reemployment Commencement Date" shall mean the first day for which an
Employee is entitled to be credited with an Hour of Service after the first
Eligibility Computation Period in which the Employee incurs a Break in
Service following an Eligibility Computation Period in which the Employee is
credited with more than the number of Hours of Service determined in
accordance with subsection (a) or (b) below, whichever is applicable:
(a) In the case of an hourly Employee, four hundred and thirty-five (435)
Hours of Service; and
<PAGE>
(b) In the case of a salaried or salaried nonexempt Employee, five hundred
(500) Hours of Service.
In the case of an Employee who is credited with no Hours of Service in an
Eligibility Computation Period beginning after the Employee's Reemployment
Commencement Date, the Employee shall be treated as having a new
Reemployment Commencement Date as of the first day for which the Employee is
entitled to be credited with an Hour of Service after such Eligibility
Computation Period.
2.48 "Related Employer" shall mean the Company or any subsidiary thereof.
2.49 "Required Aggregation Group" shall mean each plan of an Employer in
which a Key Employee is a participant and each other plan of such Employer
which enables any plan of the Employer in which a Key Employee is a
participant to meet the requirements of Sections 401(a)(4) or 410 of the
Code.
2.50 "Rollover Contribution" shall mean a contribution made by an Employee
in accordance with Section 4.8.
2.51 "Top Heavy" shall mean that as of the Determination Date:
(a) The Top Heavy Ratio for the Plan exceeds sixty percent (60%), if the
Plan is not included in a Required Aggregation Group;
(b) The Top Heavy Ratio for the Required Aggregation Group which includes
the Plan exceeds sixty percent (60%), if the Plan is included in a Required
Aggregation Group, but is not included in a Permissive Aggregation Group; or
(c) The Top Heavy Ratio for the Permissive Aggregation Group which includes
the Plan exceeds sixty percent (60%), if the Plan is included in a
Permissive Aggregation Group.
2.52 "Top Heavy Ratio" shall mean:
(a) If the Plan is not included in a Required Aggregation Group, a
fraction, the numerator of which is the sum of the Account balances of Key
Employees under the Plan and the denominator of which is the sum of the
Account balances of all Participants under the Plan; or
(b) If the Plan is included in a Required Aggregation Group or a Permissive
Aggregation Group, a fraction, the numerator of which is the sum of the
account balances of Key Employees under all defined contribution plans
included in such group and the present value of the accrued benefits of Key
Employees under all defined benefit plans included in such group and the
denominator of which is the sum of the account balances of all participants
under all defined contribution plans included in such group and the present
value of the accrued benefits of all participants under all defined benefit
plans included in such group.
<PAGE>
The account balances, as well as the present value of accrued benefits,
shall be determined, as of the Valuation Date coinciding with the
Determination Date, in accordance with the provisions of Section 416(g) of
the Code and the regulations thereunder which are incorporated herein by
reference. In determining the Top Heavy Ratio for any Plan Year, if an
individual is a Non-Key Employee with respect to the Plan or with respect to
any other plan which is included in the same Required Aggregation Group or
Permissive Aggregation Group as the Plan, but was a Key Employee with
respect to the Plan or such other plan for any prior plan year, any account
balance or accrued benefit for such individual shall not be taken into
account. In addition, any account balance or accrued benefit of any
individual who has not performed services for an Employer at any time during
the five (5) year period ending on the Determination Date shall not be taken
into account; provided, however, if such individual subsequently performs
services for an Employer, his or her account balance or accrued benefit
shall be taken into account, as required by regulations, in a subsequent
Plan Year.
2.53 "Top-Paid Group" shall mean for any Plan Year the group of Employees
consisting of the top twenty percent (20%) of Employees based on
compensation (as defined for purposes of Section 2.31) received from an
Employer during such year. For purposes of determining the number of
Employees in the Top-Paid Group, the following Employees shall be excluded:
(a) Employees who have not completed six (6) months of service;
(b) Employees who normally work less than seventeen and one-half
hours per week;
(c) Employees who normally work less than six (6) months during any year;
(d) Employees who have not attained age twenty-one (21);
(e) Employees who are nonresident aliens and who receive no earned income
(within the meaning of Section 911(d)(2) of the Code) from an Employer that
constitutes income from sources within the United States (within the meaning
of Section 861(a) (3) of the Code).
An Employer may elect to apply subsections (a), (b), (c) or (d) of this
Section by substituting a shorter period of service, a smaller number of
hours or months, or a lower age than that specified in each subsection.
2.54 "Trust" shall mean the Hannaford Bros. Co. Savings and Investment
Trust, as amended from time to time.
2.55 "Trustee" shall mean the person or persons appointed by the Finance
Committee to serve as trustee(s) of the Trust.
2.56 "Trust Fund" shall mean the property held in the Trust for the benefit
of the Participants and their Beneficiaries.
<PAGE>
2.57 "Valuation Date" shall mean the last day of each calendar month,
provided, however, when such term is used in the context of Article X, such
term shall mean the last day of each Plan Year.
2.58 "Vesting Computation Period" shall mean a Plan Year. If the Plan Year
is changed, the Vesting Computation Period shall be deemed to include a
corresponding twelve (12) consecutive month period. The new Vesting
Computation Period shall commence within the prior Vesting Computation
Period so that the new period overlaps the prior period. Each hourly
Employee shall be credited with one (1) Year of Vesting Service if he or she
is credited with at least eight hundred and seventy (870) Hours of Service
in only the prior Vesting Computation Period; one (1) Year of Vesting
Service if he or she is credited with at least eight hundred and seventy
(870) Hours of Service in only the new Vesting Computation Period; and two
(2) Years of Vesting Service if he or she is credited with at least eight
hundred and seventy (870) Hours of Service in each of the two (2)
overlapping Vesting Computation Periods. Each salaried or salaried
nonexempt Employee shall be credited with one (1) Year of Vesting Service if
he or she is credited with at least one thousand (1,000) Hours of Service in
only the prior Vesting Computation Period; one (1) Year of Vesting Service
if he or she is credited with at least one thousand (1,000) Hours of Service
in only the new Vesting Computation Period; and two (2) Years of Vesting
Service if he or she is credited with at least one thousand (1,000) Hours of
Service in each of the two (2) overlapping Vesting Computation Periods.
2.59 "Year of Participation Service", effective January 1, 1995, shall have
the meaning set forth in subsection (a) or (b) below, whichever is
applicable:
(a) In the case of an hourly Employee, an Eligibility Computation Period
during which such Employee has completed eight hundred and seventy (870) or
more Hours of Service.
(b) In the case of a salaried or salaried nonexempt Employee, an
Eligibility Computation Period during which such Employee has completed one
thousand (1,000) or more Hours of Service.
2.60 "Year of Vesting Service", effective January 1, 1995, shall have the
meaning set forth in subsection (a) or (b) below, whichever is applicable:
(a) In the case of an hourly Employee, a Vesting Computation Period during
which such Employee has completed eight hundred and seventy (870) or more
Hours of Service.
(b) In the case of a salaried or salaried nonexempt Employee, a Vesting
Computation Period during which such Employee has completed one thousand
(1,000) or more Hours of Service.
For purposes of determining the number of a Participant's Years of Vesting
Service, service prior to March 1, 1993, shall be disregarded.
<PAGE>
In the case of a Participant who incurs a Break in Service or period of
consecutive Breaks in Service, such Participant shall be credited with his
or her Years of Vesting Service prior to such Break in Service in accordance
with subsection (c) or (d) below, whichever is applicable:
(c) a Participant who had a nonforfeitable right to all of his or her
Account when he or she incurred the Break in Service shall receive credit
for all Years of Vesting Service prior to his or her Break in Service upon
completing a Year of Vesting Service thereafter.
(d) a Participant who did not have a nonforfeitable right to all of his or
her Account when he or she incurred the Break in Service shall receive
credit for Years of Vesting Service prior to his or her Break in Service if
he or she completes a Year of Vesting Service thereafter and the number of
his or her consecutive Breaks in Service is less than five (5).
ARTICLE III
Participation
3.1 DATE OF PARTICIPATION. Each Employee who is a Participant on the
Effective Date shall continue to participate in the Plan in accordance with
its terms. Each Employee who is in the employ of an Employer on the
Effective Date and who meets the requirements of Section 3.2 on or before
June 30, 1995, shall be eligible to participate in the Plan as of the
Effective Date. Each other Employee who thereafter meets the requirements
of Section 3.2 shall be eligible to participate in the Plan as of the first
day of the second (or any subsequent) calendar month following the calendar
month in which he or she meets such requirements, provided he or she is
still in the employ of an Employer on such date.
3.2 PARTICIPATION REQUIREMENTS. Each Employee who has attained age twenty-
one (21) and completed one (1) Year of Participation Service shall be
eligible to participate in the Plan.
3.3 REEMPLOYED ELIGIBLE EMPLOYEE. An Eligible Employee who is reemployed
by an Employer shall again be eligible to participate in the Plan as of his
or her Reemployment Commencement Date.
3.4 CHANGE OF EMPLOYMENT STATUS.
(a) An Employee whose employment status changes by reason of being
transferred from the employ of a Related Employer that has not adopted the
Plan to the employ of an Employer (or by reason of being transferred within
the Company to its Southeast Division) shall be eligible to participate in
the Plan as of the later of the first day of the second month following the
date his or her of employment status changes or the first day of the second
month following the month in which he or she meets the requirements of
Section 3.2. Notwithstanding the preceding sentence to the contrary,
(i) if such Employee is an eligible employee (but not a participant)
under the Hannaford Northeast Savings and Investment Plan as of the date his
<PAGE>
or her employment status changes, he or she shall be eligible to participate
in the Plan as of such date;
(ii) if such Employee is a participant in the Hannaford Northeast Savings
and Investment Plan as of the date his or her employment status changes, he
or she shall be eligible to participate in the Plan as of such date, and his
or her deferral election and investment direction in effect under the
Hannaford Northeast Savings and Investment Plan as of such date shall be
deemed a Deferral Election under Section 5.1 and an investment direction
under Section 11.5 of this Plan; and
(iii) if such Employee is an eligible employee or a participant in the
Hannaford Northeast Savings and Investment Plan as of the date his or her
employment status changes and such date is prior to July 1, 1995, he or she
shall be eligible to participate in the Plan as soon as practicable after
the date his or her employment status changes, and, in the case of a
participant, his or her deferral election and investment direction in effect
under the Hannaford Northeast Savings and Investment Plan shall be deemed a
Deferral Election under Section 5.1 and an investment direction under
Section 11.5 of this Plan.
(b) A Participant whose employment status changes by reason of being
transferred to the employ of a Related Employer that has not adopted the
Plan (or by reason of being transferred within the Company to its Northeast
Division) shall nevertheless continue to participate in the Plan, but
without the right to make a Deferral Election or share in an allocation of
Employer Contributions occurring after the date his or her employment status
changes, until the earlier of the date the assets credited to his or her
Account are transferred pursuant to Section 4.9 to the Hannaford Northeast
Savings and Investment Plan or any other plan of a Related Employer and the
date he or she ceases to be employed by the Company and any other Related
Employer.
ARTICLE IV
Contributions and Direct Transfers
4.1 EMPLOYER CONTRIBUTIONS. For each Plan Year, each Employer shall con-
tribute to the Plan:
(a) The Elective Contributions to be made in accordance with Section 5.1 on
behalf of each Participant in its employ during such year; and
(b) The Matching Contributions, if any, to be made on behalf of each
Participant in its employ during such year who has made a Deferral Election
for such year at the rate determined by the Human Resources Committee of the
Board of Directors; provided, however, no Matching Contribution may be made
with respect to any Excess Deferral or Excess Elective Contribution or any
Elective Contribution which is returned to the Participant pursuant to
Section 7.4(b); and
(c) the Discretionary Contributions, if any, in such amount as may be
determined by the Human Resources Committee of the Board of Directors.
<PAGE>
4.2 TIMING OF EMPLOYER CONTRIBUTIONS. The Elective Contributions and
Matching Contributions for the payroll periods ending within any calendar
month shall be paid to the Trust not later than the tenth day of the next
succeeding month. The Discretionary Contributions, if any, with respect to
any Plan Year shall be paid to the Trust at such time or times as may be
determined by the Employer, but not later than the date prescribed by law
for filing the Employer's federal income tax return for its taxable year
which ends with or within such Plan Year, including extensions which have
been granted for filing such return.
4.3 FORM OF CONTRIBUTIONS. Elective Contributions shall be made in cash.
Matching Contributions and Discretionary Contributions may, at the election
of the Human Resources Committee of the Board of Directors, be made in cash
or in Company Stock, or any combination thereof; provided any contribution
in the form of Company Stock shall be valued at its fair market value as of
the date of contribution.
4.4 MAXIMUM CONTRIBUTIONS. In no event shall the contributions made by an
Employer for any Plan Year exceed the maximum amount which such Employer is
permitted to deduct for federal income tax purposes or cause the Annual
Addition for any Participant to exceed the amount permitted under the Plan.
4.5 RETURN OF CONTRIBUTIONS. Contributions by each Employer are
conditioned upon the initial qualification of the Plan under Section 401(a)
of the Code and upon their deductibility under Section 404 of the Code.
Upon the request of any Employer, any contributions attributable to such
Employer (a) which are made by reason of a mistake of fact, (b) which are
conditioned upon the initial qualification of the Plan, or (c) for which a
deduction is disallowed shall be returned to the Employer within one (1)
year of the mistaken payment of the contribution, denial of qualification
(provided the application for qualification is made by the time prescribed
by law for filing such Employer's federal income tax return for its taxable
year in which the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe), or disallowance of the deduction. In the event
of a denial of qualification, the amount contributed for the period during
which the Plan was not qualified may be returned. In the event of a mistake
of fact or a disallowance of deduction, the amount which may be returned to
such Employer is the excess of the amount contributed over the amount that
would have been contributed had there not occurred a mistake of fact or an
error in determining the deduction. Earnings attributable to any excess
contribution shall not be returned, and losses attributable thereto shall
reduce the amount which may be returned.
The portion of any contribution returned to an Employer in accordance with
this Section that represents Elective Contributions shall be paid promptly
by such Employer to the Participants on whose behalf such contributions were
made.
4.6 NONFORFEITABLE CONTRIBUTIONS. Each Participant shall have a fully
vested and nonforfeitable interest in his or her Elective Contributions
Account at all times. Each Participant shall have a vested and
<PAGE>
nonforfeitable interest in his or her Matching Contributions Account and
Discretionary Contributions Account in accordance with the schedule set
forth in Section 9.3.
4.7 SPECIAL RULES FOR MATCHING CONTRIBUTIONS.
(a) The Matching Contribution Percentage for Highly Compensated Eligible
Employees for any Plan Year shall not exceed the greater of:
(i) the Matching Contribution Percentage for all other Eligible Employees
multiplied by 1.25; or
(ii) the lesser of the Matching Contribution Percentage for all other
Eligible Employees multiplied by 2, or the Matching Contribution Percentage
for such Eligible Employees plus two percent (2%).
(b) For purposes of this Section, if two or more qualified plans maintained
by the Employer are treated as one plan to meet the requirements of Section
401(a)(4), Section 410(b) or Section 401(m) of the Code, such plans shall be
treated as a single plan. If a Highly Compensated Eligible Employee
participates in any other qualified plan maintained by the Employer to which
Matching Contributions or Employee contributions are made, all such
contributions for Plan Years ending with or within the same calendar year
shall be aggregated for purposes of this Section. If a Highly Compensated
Eligible Employee participates in two or more cash or deferred arrangements
that have different plan years, all cash or deferred arrangements with Plan
Years ending with or within the same calendar year shall be treated as a
single arrangement. Plans may be aggregated in order to satisfy Section
401(m) of the Code only if they have the same plan year.
(c) If an Employee is a family member within the meaning of Section 2.31 of
a Five Percent Owner or of one of the ten (10) Highly Compensated Employees
receiving the greatest compensation from an Employer during the Plan Year,
then the individual Matching Contribution Percentage attributable to such
Employee shall be treated as if it were attributable to the Five Percent
Owner or Highly Compensated Employee. An Employee who is a family member
with respect to a Five Percent Owner or one of the ten (10) Highly
Compensated Employees receiving the greatest compensation from an Employer
shall not be considered a separate Employee for purposes of determining the
Matching Contribution Percentage for Highly Compensated Eligible Employees
and the Matching Contribution Percentage for all other Eligible Employees.
(d) To the extent Elective Contributions are taken into account under this
Section, any Elective Contributions returned to a Participant pursuant to
Section 7.4(b) shall be disregarded.
(e) Any Matching Contribution which is attributable to an Excess Deferral
or Excess Elective Contribution shall be forfeited and shall be disregarded
for purposes of subsection (a) of this Section. Forfeitures shall be used
to reduce Employer Contributions.
<PAGE>
(f) For purposes of this Section, Matching Contributions shall be treated
as made for a Plan Year to which they relate if such contributions are made
no later than the end of the twelve (12) month period beginning on the day
after the close of the Plan Year. Each Employer shall maintain records
sufficient to demonstrate satisfaction of this Section and the amount of any
Elective Contributions taken into account under this Section. The
determination and treatment of the individual Matching Contribution
Percentage of any Eligible Employee shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(g) In the event that the Matching Contribution Percentage of the Highly
Compensated Eligible Employees for any Plan Year exceeds the limitation of
subsection (a) above, the Administrative Committee shall, within two and
one-half months after the end of such year, distribute the Excess
Matching Contributions to the extent nonforfeitable (plus any income and
minus any loss allocable thereto) to such Highly Compensated Eligible
Employees on the basis of the respective portions of the Excess Matching
Contributions attributable to each such Employee and shall designate such
distribution as a distribution of Excess Matching Contributions (plus any
income and minus any loss allocable thereto). To the extent the Excess
Matching Contributions are forfeitable, they shall be forfeited in
accordance with the provisions of Section 9.4; provided, however, that
forfeitures of Excess Matching Contributions may not be allocated to the
accounts of Participants whose Matching Contributions are reduced pursuant
to this subsection (g).
(h) Excess Matching Contributions shall be allocated to Participants who
are subject to the family aggregation rules of Section 414(q)(6) of the Code
in the manner prescribed by regulations.
(i) Excess Matching Contributions shall be adjusted for any income or loss
up to the date of distribution (or forfeiture). The income or loss
allocable to Excess Matching Contributions shall be determined by the same
manner in which income or loss is allocated to Participants' Accounts under
Article VIII.
(j) The amount of any Highly Compensated Eligible Employee's Excess
Matching Contributions shall be determined by reducing contributions on
behalf of all such Employees in the order of their respective individual
Matching Contribution Percentages, beginning with the highest such
percentage. The determination of the amount of Excess Matching
Contributions with respect to the Plan shall be made after first determining
the amount of Excess Deferrals under Article VI and then determining the
amount of Excess Elective Contributions under Section 5.3.
4.8 ROLLOVER CONTRIBUTIONS. An Employee who has received an eligible
rollover distribution (as defined in Section 402(c)(4) of the Code) from an
employee's trust described in Section 401(a) of the Code which is exempt
from tax under Section 501(a) of the Code may transfer all or any portion of
such distribution to the Trust, provided the transfer is made to the Trust
<PAGE>
not later than the sixtieth (60th) day following the day on which the
Employee received such distribution. In addition, an Employee who receives
a total distribution from an individual retirement account (within the
meaning of Section 408(a) of the Code) which is attributable solely to a
rollover contribution (as defined in Section 402(c)(5) of the Code) from an
employee's trust described in Section 401(a) of the Code which is exempt
from tax under Section 501(a) of the Code may transfer the entire amount
distributed to the Trust not later than the sixtieth (60th) day following
the day on which the Employee received such distribution. Notwithstanding
the foregoing to the contrary, an Employee who has received an eligible
rollover distribution (as hereinabove defined) solely by reason of the death
of his or her spouse or a distribution from an individual retirement account
(as hereinabove defined), which account is attributable solely to a rollover
contribution (as hereinabove defined) from an employee's trust described in
Section 401(a) of the Code which is exempt from tax under Section 501(a) of
the Code of amounts received by reason of the death of his or her spouse,
may not transfer any portion of such distribution to the Trust.
A Rollover Contribution shall be credited to a Rollover Contributions
Account on behalf of the contributing Employee, and such Employee shall have
a fully vested and nonforfeitable interest in his or her Rollover
Contributions Account. The Rollover Contributions Account of any Employee
who is not a Participant shall be administered, invested and distributed as
if such account constituted an Elective Contributions Account. The Rollover
Contributions Account of a Participant shall be administered, invested and
distributed in the same manner and at the same time as his or her Elective
Contributions Account.
4.9 DIRECT TRANSFERS. The Administrative Committee may direct the Trustee
to transfer the assets credited to the Account of a Participant or Former
Participant to another employer's retirement plan, provided immediately
prior to the transfer, the transferee plan contains a provision permitting
such transfer and is qualified under Section 401(a) of the Code and the
related trust is exempt under Section 501(a) of the Code. Notwithstanding
the preceding sentence to the contrary, in the case of a Participant whose
employment status changes by reason of being transferred to the employ of a
Related Employer that has adopted the Hannaford Northeast Savings and
Investment Plan (or by reason of being transferred within the Company to its
Northeast Division), the Administrative Committee shall direct the Trustee
to transfer the assets credited to the Account of such Participant to the
Hannaford Northeast Savings and Investment Plan as of the date of such
change in employment status or as soon as practicable thereafter.
The assets of another profit sharing plan may, with the prior consent of the
Administrative Committee, be directly transferred to the Plan, provided
immediately prior to the transfer, the transferor plan contains a provision
permitting such transfer and is qualified under Section 401(a) of the Code
and the related trust is exempt under Section 501(a) of the Code. Upon
receipt, the Administrative Committee shall credit the Account of each
Employee who participated in the transferor plan with the portion of the
transferred assets standing to the credit of such Employee under the
<PAGE>
transferor plan immediately prior to such transfer, provided such amount
shall be separately accounted for in accordance with Section 8.1. With
respect to a Participant who has an outstanding loan balance under the
transferor plan at the time of the transfer, the promissory note evidencing
such loan shall be transferred to this Plan and the outstanding loan balance
shall be treated in accordance with the provisions of Section 9.11 as an
outstanding loan balance under this Plan. For purposes of the preceding
sentence, the provisions of Section 9.11 shall be effective July 1, 1995.
Except as hereinafter provided, each elective, matching or other type of
contribution comprising the Transfer Account of any Employee or Participant
shall be administered, invested and distributed in accordance with the
provisions of this Plan applicable to such type of contribution. An
Employee or Participant may direct the investment of each type of
contribution comprising his or her Transfer Account only to the extent
provided in the transferor plan. The portion of the Transfer Account
invested in Company Stock at the time of the transfer and not subject to
participant investment direction under the transferor plan shall remain
invested in Company Stock. Each type of contribution comprising the
Transfer Account which was not fully vested under the transferor plan as of
the date of the transfer shall remain subject to the vesting schedule set
forth in the transferor plan; provided, however, when a Participant attains
Normal Retirement Age he or she shall have a fully vested right to his or
her Transfer Account. Each type of contribution comprising the Transfer
Account which was fully vested under the transferor plan as of the date of
the transfer shall remain fully vested under this Plan.
The foregoing provisions of this Section shall not apply to any direct or
indirect transfers from a plan (other than this Plan) which is subject to
Section 401(a)(11) of the Code.
ARTICLE V
Deferral Elections
5.1 TIMING AND METHOD. Any Eligible Employee may participate in the Plan
by electing to defer part of his or her Compensation each payroll period,
provided that an Eligible Employee may not defer less than one percent (1%)
nor more than fifteen percent (15%) of his or her Compensation each Plan
Year. The amount deferred shall be contributed to the Plan by the Employer
on behalf of the electing Eligible Employee. A Deferral Election shall be
made by such written, telephonic or electronic means as shall be prescribed
by the Administrative Committee.
A Deferral Election received by the Administrative Committee on or before
the fifteenth (15th) day of any month shall be effective on the later of (i)
the first day of the first payroll period in the month following the month
in which such election was received by the Administrative Committee; or (ii)
the first day of the first payroll period in the month specified in said
election. A Deferral Election received by the Administrative Committee
after the fifteenth (15th) day of any month shall be effective on the later
of (i) the first day of the first payroll period in the second month
<PAGE>
following the month in which such election was received by the
Administrative Committee; or (ii) the first day of the first payroll period
in the month specified in said election. A deemed Deferral Election
pursuant to Section 3.4(a) shall be effective as of the date of the affected
individual's change in employment status; provided, however, that a deemed
Deferral Election with respect to an individual described in Section
3.4(a)(iii) shall be effective as soon as practicable after his or her
change in employment status. A Deferral Election shall remain in effect
until amended or terminated in accordance with Section 5.2.
If a Participant terminates a Deferral Election in accordance with Section
5.2, such Participant may subsequently make another Deferral Election,
provided such election shall not become effective until the first day of the
first payroll period beginning on or after the earlier of the first day of
the Plan Year or the first day of the seventh month of the Plan Year
following receipt of such election by the Administrative Committee, provided
such election is received at least fifteen (15) days in advance of the date
such election is to effective.
5.2 AMENDMENT OR TERMINATION BY PARTICIPANT. A Participant may amend his
or her Deferral Election to increase or decrease the deferral percentage
within the limits of Section 5.1 or may terminate his or her Deferral
Election by such written, telephonic or electronic means as shall be
prescribed by the Administrative Committee. Except as provided in Section
9.11, an amendment shall become effective on the first day of the first
payroll period beginning on or after the earlier of the first day of the
Plan Year or the first day of the seventh month of the Plan Year following
receipt of such amendment by the Administrative Committee, provided such
election is received at least fifteen (15) days in advance of the date such
election is to become effective. A termination shall become effective on
the first day of the first payroll that begins at least ten (10) days after
the date such termination is received by the Administrative Committee.
5.3 LIMITATIONS ON ACTUAL DEFERRAL PERCENTAGE. In the event a Highly
Compensated Employee participates in two or more cash or deferred
arrangements (under Section 401(k) of the Code) that have different plan
years, for purposes of this Section, all such arrangements ending with or
within the same calendar year shall be treated as a single arrangement. For
purposes of this Section, this Plan and any other Code Section 401(k) plan
maintained by an Employer shall be treated as a single plan if such plans
are treated as one plan for purposes of Section 401(a)(4) or 410(b) of the
Code or if a Highly Compensated Eligible Employee participates in such other
plan. Plans may be aggregated to satisfy Section 401(k) of the Code only if
such plans have the same plan year.
(a) The Actual Deferral Percentage for Highly Compensated Eligible
Employees for any Plan Year shall not exceed the greater of:
(i) the Actual Deferral Percentage for all other Eligible Employees
multiplied by 1.25; or
<PAGE>
(ii) the lesser of the Actual Deferral Percentage for all other Eligible
Employees multiplied by 2, or the Actual Deferral Percentage for such
Eligible Employees plus two percent (2%).
(b) The sum of the Actual Deferral Percentage for Highly Compensated
Eligible Employees and the Matching Contribution Percentage for Highly
Compensated Eligible Employees for any Plan Year shall not exceed the
greater of:
(i) the sum of (1) the greater of the Actual Deferral Percentage for all
other Eligible Employees multiplied by 1.25, or the Matching Contribution
Percentage for all other Eligible Employees multiplied by 1.25, and (2) the
lesser of the Actual Deferral Percentage for all other Eligible Employees
plus 2, or the Matching Contribution Percentage for all other Eligible
Employees plus 2, provided that in no event shall such percentage plus 2
exceed such percentage multiplied by 2.
(ii) the sum of (1) the lesser of the Actual Deferral Percentage for all
other Eligible Employees multiplied by 1.25 or the Matching Contribution
Percentage for all other Eligible Employees multiplied by 1.25, and (2) the
greater of the Actual Deferral Percentage for all other Eligible Employees
plus 2 or the Matching Contribution Percentage for all other Eligible
Employees plus 2, provided that in no event shall such percentage plus 2
exceed such percentage multiplied by 2.
Subsection (b) of this Section shall not apply if the respective Actual
Deferral Percentage and Matching Contribution Percentage of the Highly
Compensated Eligible Employees does not exceed the respective Actual
Deferral Percentage and Contribution Percentage of all other Eligible
Employees multiplied by 1.25.
For purposes of this Section, Elective Contributions and Matching
Contributions must be made before the last day of the twelve (12) month
period immediately following the Plan Year to which such contributions
relate. Any Elective Contributions returned to a Participant pursuant to
Section 7.4(b) shall be disregarded.
If an Employee is a family member within the meaning of Section 2.31 of a
Five Percent Owner or one of the ten (10) Highly Compensated Employees
receiving the greatest compensation from an Employer during the Plan Year,
then the individual Actual Deferral Percentage attributable to such Employee
shall be treated as if it were attributable to the Five Percent Owner or
Highly Compensated Employee. An Employee who is a family member with
respect to a Five Percent Owner or one of the ten (10) Highly Compensated
Employees receiving the greatest compensation from an Employer shall not be
considered a separate Employee for purposes of determining the Actual
Deferral Percentage for Highly Compensated Eligible Employees and the Actual
Deferral Percentage for all other Eligible Employees.
An Employer shall maintain records sufficient to demonstrate compliance with
this Section and the amount of any Matching Contributions used to satisfy
<PAGE>
this Section. The determination and treatment of the contributions on
behalf of any Participant that are taken into account for purposes of this
Section shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
5.4 RESTRICTIONS AND ADJUSTMENTS. The Administrative Committee may
restrict the deferral percentages elected by Participants if the
Administrative Committee determines such restriction is necessary to comply
with Section 4.4, Section 5.3, Article VI, or Article VII.
In the event that the Actual Deferral Percentage of the Highly Compensated
Eligible Employees for any Plan Year exceeds the limitations prescribed in
Section 5.3(a), the Administrative Committee shall, within two and one-half
months after the end of such year, distribute the Excess Elective
Contributions (plus any income and minus any loss allocable thereto) to such
Highly Compensated Eligible Employees on the basis of the respective
portions of the Excess Elective Contributions attributable to each such
Employee and shall designate such distribution as a distribution of Excess
Elective Contributions (plus any income and minus any loss allocable
thereto). Excess Elective Contributions shall be allocated to Participants
who are subject to the family aggregation rules of Section 414(q)(6) of the
Code in the manner prescribed by regulations.
The amount of any Highly Compensated Eligible Employee's Excess Elective
Contributions shall be determined by reducing contributions on behalf of all
such Employees in the order of their respective individual deferral
percentages, beginning with the highest such percentage. The amount of
Excess Elective Contributions with respect to a Highly Compensated Eligible
Employee for any Plan Year shall be reduced by the amount of Excess
Deferrals previously distributed to such Employee under Article VI for the
calendar year ending with or within the Plan Year; provided, however, that
notwithstanding the distribution of an Excess Deferral in accordance with
Section 6.2 to a Highly Compensated Eligible Employee, such distributed
amount shall be taken into account under Section 5.3.
Excess Elective Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to Excess Elective
Contributions shall be determined by the same manner in which income or loss
is allocated to Participants' Accounts under Article VIII of the Plan.
In the event that the sum of the Actual Deferral Percentage for Highly
Compensated Eligible Employees and the Matching Contribution Percentage for
Highly Compensated Eligible Employees for any Plan Year exceeds the
limitations prescribed in Section 5.3(b), the Administrative Committee
shall, within two and one-half months after the end of such year,
reduce the Matching Contribution Percentage for Highly Compensated Employees
in the manner prescribed in subsection (g) through (j) of Section 4.7.
<PAGE>
ARTICLE VI
Excess Deferrals
6.1 LIMITATION ON ELECTIVE CONTRIBUTIONS. Effective January 1, 1995, the
Elective Contributions that may be allocated to a Participant's Account for
any calendar year shall not exceed Nine Thousand Two Hundred Forty Dollars
($9,240.00), reduced by the amount of any employer contributions for such
year on behalf of such Participant pursuant to an election to defer
compensation under any qualified cash or deferred arrangement within the
meaning of Section 401(k) of the Code, any simplified employee pension or
cash arrangement within the meaning of Section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under Section 457 of the Code, any plan
within the meaning of Section 501(c)(18) of the Code and any salary
reduction agreement for the purchase of an annuity contract under Section
403(b) of the Code. The dollar limitation of this Section shall be
automatically adjusted to reflect any cost of living adjustment made under
Section 402(g)(5) of the Code.
6.2 DISTRIBUTION OF EXCESS DEFERRAL. In the event that the limitation of
Section 6.1 is exceeded with respect to any Participant for any calendar
year, not later than April 15 of the following calendar year, the
Administrative Committee shall distribute the Excess Deferral (plus any
income and minus any loss allocable thereto) to such Participant and
designate such distribution as a distribution of an Excess Deferral (plus
any income and minus any loss allocable thereto), provided that the
Administrative Committee has received the notice prescribed in Section 6.3.
Excess Deferrals shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Deferrals shall be
determined by the same manner in which income or loss is allocated to the
Participants' Accounts under Article VIII of the Plan.
The amount of Excess Deferral with respect to a Participant for any calendar
year shall be reduced by the amount of any Excess Elective Contributions
previously distributed to such Participant for the Plan Year beginning with
or within the calendar year.
6.3 NOTICE BY PARTICIPANT. It shall be the responsibility of the
Participant to notify the Administrative Committee of any Excess Deferral
for a calendar year. Such notice shall be in writing; shall specify the
amount of the Excess Deferral; shall state that if the Excess Deferral is
not distributed, such excess shall be includable in the Participant's gross
income under Section 402(g) of the Code; and shall be submitted to the
Administrative Committee not later than March 1 of the following calendar
year. A Participant shall be deemed to have notified the Administrative
Committee of an Excess Deferral to the extent such Participant has an Excess
Deferral for a calendar year, taking into account only Elective
Contributions under the Plan and any other plans of his or her Employer
subject to Section 402(g) of the Code.
<PAGE>
ARTICLE VII
Limitation on Annual Additions
7.1 LIMITATION FOR DEFINED CONTRIBUTION PLANS. The Annual Additions which
may be allocated to the Account of a Participant for a Limitation Year shall
not exceed the lesser of:
(a) Thirty Thousand Dollars ($30,000.00) (or, if greater, one-fourth (1/4)
of the dollar limitation in effect under Section 415(b)(1)(A) of the Code);
or
(b) Twenty-five percent (25%) of the Participant's compensation (as defined
in Section 7.5) for the Limitation Year,
reduced by the sum of (i) the annual additions allocated within such
Limitation Year to the accounts of such Participant under all other
qualified defined contribution plans maintained by an Employer and (ii) the
contributions on behalf of such Participant to welfare benefit funds (as
defined in Section 419(e) of the Code) and individual medical benefit
accounts (as defined in Section 415(l)(2) of the Code) which, as hereinafter
provided, are treated as annual additions to a defined contribution plan.
The dollar limitation of this Section shall be automatically adjusted to
reflect any cost of living adjustment made under Section 415(d) of the Code.
If an Annual Addition allocated to a Participant's Account for a Limitation
Year when added to the sum of (i) the Annual Additions previously allocated
within such year to the Participant's Account, (ii) the annual additions
previously allocated within such year to the Participant's accounts under
all other qualified defined contribution plans maintained by an Employer and
(iii) the aforesaid contributions to welfare benefit funds (as defined in
Section 419(e) of the Code) and individual medical benefit accounts (as
defined in Section 415(l)(2) of the Code) exceeds the limitation set forth
in this Section, such excess shall be reduced as hereinafter provided in
this Article.
If the allocation of an Annual Addition to a Participant's Account coincides
with the allocation of an annual addition to such Participant's account or
accounts under one or more other qualified defined contribution plans
maintained by an Employer and/or the allocation of a contribution on behalf
of such Participant to one or more welfare benefit funds (as defined in
Section 419(e) of the Code) or individual medical benefit accounts (as
defined in Section 415(l)(2) of the Code) which, as hereinafter provided,
are treated as an annual addition to a defined contribution plan and such
allocations exceed the limitation set forth in this Section, the excess
attributable to this Plan, which shall be reduced as hereinafter provided in
this Article, shall be equal to the product determined by multiplying the
total excess by a fraction, the numerator of which is the Annual Additions
previously allocated to the Participant's Account within such Limitation
Year and the denominator of which is the sum of the Annual Additions
previously allocated to the Participant's Account within such Limitation
Year and the annual additions previously allocated to the Participant's
accounts under such other plans within such Limitation Year.
<PAGE>
The limitation set forth in this Section may be applied on the basis of
reasonable estimates of compensation for the Limitation Year, provided such
estimates are uniformly determined for all Participants. As soon as
practicable after the end of each Limitation Year, the limitation shall be
applied on the basis of actual compensation.
Notwithstanding the foregoing, the compensation limitations of Section
7.1(b) shall not apply to any contribution for medical benefits (within the
meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under Section 415(h)(1) or Section
419A(d)(2) of the Code.
7.2 LIMITATION FOR DEFINED CONTRIBUTION PLAN AND DEFINED BENEFIT PLAN. If
a Participant also participates or has participated in a qualified defined
benefit plan maintained by an Employer, then in addition to the limitation
set forth in the preceding Section, the sum of the fractions determined
under subsections (a) and (b) below for any Limitation Year shall not exceed
1.0.
(a) A fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all qualified defined benefit plans (whether
or not terminated) maintained by the Employer and the denominator of which
is the lesser of (i) the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such year multiplied by 1.25, or (ii) the
amount which may be taken into account under Section 415(b)(1)(B) of the
Code with respect to the Participant for such year multiplied by 1.4.
For purposes of this subsection (a), "projected annual benefits" shall mean
the annual retirement benefit (adjusted to an actuarially equivalent
straight life annuity, if such benefit is expressed in a form other than a
straight life annuity, or qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of the plan, assuming:
(i) the Participant will continue employment until normal retirement age
under the plan (or current age, if later); and
(ii) the Participant's compensation for the current Limitation Year and all
other relevant factors used to determine benefits under the plan will remain
constant for all future Limitation Years.
Notwithstanding the foregoing, if the Participant participated as of the
first day of the first Limitation Year beginning after December 31, 1986, in
one or more qualified defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction shall not
be less than one hundred twenty-five percent (125%) of the sum of the annual
benefits which the Participant accrued under such plans as of the close of
the last Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the Plan after May 5, 1986. The
preceding sentence applies only if the qualified defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415
of the Code for all Limitation Years beginning before January 1, 1987.
<PAGE>
(b) A fraction, the numerator of which is the sum of the annual additions
to the Participant's accounts under all qualified defined contribution plans
(whether or not terminated) maintained by an Employer for the current and
all prior Limitation Years (including the annual additions attributable to
the Participant's nondeductible voluntary contributions under all qualified
defined benefit plans, whether or not terminated, maintained by an Employer)
and the contributions on behalf of the Participant to all welfare benefit
funds (as defined in Section 419(e) of the Code) and individual medical
benefit accounts (as defined in Section 415(l)(2) of the Code) maintained by
an Employer which, as hereinafter provided, are treated as annual additions
to a defined contribution plan and the denominator of which is the sum of
the lesser of the following amounts determined for the current Limitation
Year and all prior Limitation Years in which the Participant performed
service for the Employer (regardless of whether a defined contribution plan
was maintained by the Employer): (i) the dollar limitation in effect under
Section 415(c)(1)(A) of the Code for such year multiplied by 1.25, or (ii)
thirty-five percent (35%) of the Participant's compensation for such year.
If an Employee was a participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more qualified
defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction shall be adjusted
if the sum of the fractions under this Section would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (i) the excess of the sum of said fractions over 1.0 multiplied
by (ii) the denominator of this fraction, shall be permanently subtracted
from the numerator of this fraction. The adjustment shall be calculated
using the fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after May 5, 1986, but
using the Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as Annual
Additions.
If the sum of said fractions for any Limitation Year exceeds 1.0, the Annual
Additions allocated to the Participant's Account for such Limitation Year
shall be reduced, as hereinafter provided in this Article, until the sum of
the fractions does not exceed 1.0 or the rate of accrual of the
Participant's accrued benefit under the defined benefit plan shall be
reduced until the sum of the fractions does not exceed 1.0.
7.3 COMBINING AND AGGREGATING PLANS. For purposes of applying the
limitations described in this Article:
(a) All qualified defined benefit plans (without regard to whether a plan
has been terminated) ever maintained by an Employer shall be treated as one
defined benefit plan; and
<PAGE>
(b) All qualified defined contribution plans (without regard to whether a
plan has been terminated) ever maintained by an Employer shall be treated as
one defined contribution plan.
7.4 REDUCTION OF EXCESS ANNUAL ADDITIONS. If for any Limitation Year the
Annual Additions allocated to the Account of any Participant exceed the
limitations set forth in the preceding Sections of this Article, the
following rules apply to the extent necessary to reduce such excess:
(a) Any nondeductible voluntary employee contributions to the extent they
would reduce the excess amount, shall be returned to the Participant;
(b) Any Elective Contributions to the extent they would reduce the excess
amount, shall be returned to the Participant;
(c) If after the application of subsections (a) and (b) an excess amount
still exists and the Participant is covered by the Plan at the end of the
Limitation Year, the excess amount allocated to the Participant's Account
for such year shall be used to reduce Employer Contributions for the next
Limitation Year and for each succeeding Limitation Year, if necessary, for
such Participant;
(d) If after the application of subsections (a) and (b) an excess amount
still exists and the Participant is not covered by the Plan at the end of
the Limitation Year, the excess amount allocated to the Participant's
Account for such Limitation Year shall be held unallocated in a suspense
account. The suspense account shall be applied to reduce Employer
Contributions for all remaining Participants in the next Limitation Year and
each succeeding Limitation Year, if necessary.
If a suspense account is in existence at any time during a Limitation Year
pursuant to subsection (d) of this Section, it shall not participate in the
allocation of the Investment Funds' income, expenses, gains and losses. If
a suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer Contributions or
employee contributions may be made to the Plan for that Limitation Year.
For purposes of subsections (c) and (d) excess amounts may not be
distributed to Participants or Former Participants.
7.5 DEFINITION OF COMPENSATION. For purposes of applying the limitations
of this Article, the term "compensation" shall mean, with respect to a
Limitation Year, the total compensation paid by an Employer to an Employee
for services rendered while an Employee that constitutes wages as defined in
Section 3401(a) of the Code and all other payments by an Employer to an
Employee for services rendered while an Employee for which an Employer is
required to furnish the Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or services performed.
<PAGE>
For purposes of applying the limitations of this Article, "compensation" for
a Limitation Year shall mean the compensation actually paid or includable in
gross income during such Limitation Year. Notwithstanding the preceding
sentence "compensation" with respect to a Participant who is permanently and
totally disabled (within the meaning of Section 22(e)(3) of the Code) shall
mean the compensation such Participant would have received for the
Limitation Year if he or she had been paid at the rate in effect immediately
before becoming permanently and totally disabled; provided, such imputed
compensation may be taken into account only if the Participant is not a
Highly Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
Notwithstanding the foregoing to the contrary, for purposes of Sections 2.2,
2.39 and 10.3(b), the annual "compensation" of any Employee in excess of Two
Hundred Thousand Dollars ($200,000.00) (or such higher amount as the
Secretary of the Treasury may prescribe) shall not be taken into account,
and, effective January 1, 1994, the annual "compensation" of any Employee in
excess of One Hundred Fifty Thousand Dollars ($150,000.00) (or such higher
amount as the Secretary of the Treasury may prescribe) shall not be taken
into account. In the event "compensation" is determined based on a period
of time which contains fewer than twelve (12) calendar months, the annual
compensation limit shall be an amount equal to the annual compensation limit
for the Limitation Year in which the period begins multiplied by a fraction,
the numerator of which is the number of full calendar months in the period
and the denominator of which is twelve (12). For purposes of the annual
compensation limit, any "compensation" paid to an Employee who is the spouse
or lineal descendant (who has not attained age nineteen (19) by the close of
the Plan Year) of an Employee who is a Five Percent Owner or one of the ten
(10) Highly Compensated Employees paid the highest "compensation" for the
Plan Year shall be treated as paid to or on behalf of such Five Percent
Owner or Highly Compensated Employee. If the annual compensation limit is
exceeded as a result of the application of the preceding sentence, then the
limit shall be prorated among the affected Employees' "compensation" as
determined prior to the application of the annual compensation limit. If
"compensation" for a prior Limitation Year is taken into account for any
Limitation Year, such compensation shall be subject to the annual
compensation limit in effect for such prior Limitation Year.
7.6 CERTAIN CONTRIBUTIONS TREATED AS ANNUAL ADDITIONS. For purposes of
this Article:
(a) Excess Matching Contributions and Excess Elective Contributions shall
be treated as Annual Additions;
(b) Amounts derived from contributions which are paid or accrued in taxable
years ending after December 31, 1985, and which are attributable to post-
retirement medical benefits allocated to the separate account of a key
employee (as defined in Section 419A(d)(3) of the Code) under a welfare
benefit fund (as defined in Section 419(e) of the Code) maintained by the
Employer, shall be treated as annual additions to a defined contribution
plan; and
<PAGE>
(c) Contributions allocated after March 31, 1984, to an individual medical
benefit account (as defined in Section 415(l)(2) of the Code) which is part
of a defined benefit plan maintained by the Employer shall be treated as
annual additions to a defined contribution plan.
ARTICLE VIII
Accounts and Valuation
8.1 PARTICIPANT ACCOUNTS. The Administrative Committee shall establish and
maintain a separate Account for each Participant which shall separately
reflect:
(a) The Participant's Elective Contributions and the income, expenses,
gains and losses of the Trust Fund attributable thereto (such portion of a
Participant's Account shall be referred to as his or her "Elective
Contributions Account");
(b) The Participant's Matching Contributions, if any, and the income,
expenses, gains and losses of the Trust Fund attributable thereto (such
portion of a Participant's Account shall be referred to as his or her
"Matching Contributions Account");
(c) The Participant's share of Discretionary Contributions, if any, and the
income, expenses, gains and losses of the Trust Fund attributable thereto
(such portion of a Participant's Account shall be referred to as his or her
"Discretionary Contributions Account");
(d) The Participant's Rollover Contributions and the income, expenses,
gains and losses of the Trust Fund attributable thereto (such portion of a
Participant's Account shall be referred to as his or her "Rollover
Contributions Account"); and
(e) The assets transferred from another qualified plan on behalf of the
Participant in accordance with Section 4.9 and the income, expenses, gains
and losses of the Trust Fund attributable thereto (such portion of a
Participant's Account shall be referred to as his or her "Transfer
Account").
8.2 ADJUSTMENTS. The Administrative Committee shall adjust the
Participants' Accounts as of each Valuation Date as follows:
(a) First, determine the net fair market value of each Investment Fund as
of the close of business on such date or, if that date is not a business
day, as of the close of business on the last preceding business day.
(b) Second, allocate the income, expenses, gains and losses of each
Investment Fund among the Accounts in proportion to the Account balances (to
the extent invested in such fund) as of the preceding Valuation Date,
increased by one-half (1/2) of the sum of the contributions and periodic
<PAGE>
loan repayments invested on behalf of the Participant in such fund since the
preceding Valuation Date and by that portion of any lump sum loan repayment
invested in such fund since the preceding Valuation Date.
(c) Third, reduce the separate Account of each Participant to reflect
distributions, loans and withdrawals made from such Account since the
preceding Valuation Date.
(d) Fourth, credit each Participant's Account with the contributions made
on his or her behalf, the assets transferred from another qualified plan in
accordance with Section 4.9, and the Participant's loan repayments since the
preceding Valuation Date.
(e) Fifth, adjust each Participant's Account to reflect transfers among the
Investment Funds.
(f) Notwithstanding the foregoing provisions of this Section to the
contrary, the Administrative Committee may debit in a uniform and
nondiscriminatory manner the Account of any Participant or Former
Participant as of any Valuation Date in the amount of any reasonable expense
attributable to such Participant's or Former Participant's exercise of
control over his or her Account since the preceding Valuation Date. The
Administrative Committee shall establish, in writing, reasonable procedures
to inform Participants and Former Participants that such expenses may be
charged to their Accounts pursuant to this Section 8.2(f), to inform each
Participant or Former Participant at least annually of the actual expenses
incurred with respect to his or her Account, and to otherwise carry out this
subsection. A Participant's or Former Participant's "exercise of control
over his or her Account" shall include but not be limited to the following:
(i) a request for a loan pursuant to Section 9.11;
(ii) a request for a hardship withdrawal distribution pursuant to Section
9.12; and
(iii) an investment direction pursuant to Section 11.5 or Section 11.6.
8.3 ALLOCATION OF ELECTIVE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS. Any
Elective Contributions and Matching Contributions made on behalf of a
Participant for payroll periods ending in any month shall be allocated to
the Participant's Account as of the Valuation Date coinciding with or next
following the end of such month; provided that any Matching Contributions
shall be allocated based on such Participant's Elective Contributions
(excluding Excess Elective Contributions) as the Human Resources Committee
of the Board of Directors may determine.
8.4 ALLOCATION OF DISCRETIONARY CONTRIBUTIONS. As of the last Valuation
Date of each Plan Year, the Trustee shall allocate the Discretionary
Contribution, if any, for such Plan Year to the separate Accounts of the
Eligible Employees entitled to share therein in proportion to their
respective amounts of compensation for such Plan Year. For purposes of this
<PAGE>
Section, "compensation" shall have the meaning given such term in Section
2.11, except that it shall include compensation paid for services rendered
while an Employee.
8.5 ELIGIBLE EMPLOYEES ENTITLED TO SHARE IN DISCRETIONARY CONTRIBUTIONS.
An Eligible Employee shall be entitled to share in the Discretionary
Contribution for a Plan Year if, in the case of an hourly Employee, he or
she is credited with at least eight hundred seventy (870) Hours of Service
during such Plan Year or, in the case of a salaried or salaried nonexempt
Employee, at least one thousand (1,000) Hours of Service during such Plan
Year, and if he or she remains in the employ of an Employer on the last
business day of such Plan Year, or if he or she dies, retires after having
attained Normal Retirement Age or retires on account of Disability during
such Plan Year.
In the event application of the preceding sentence would cause the Plan to
fail to satisfy the requirements of Section 410(b) of the Code for any Plan
Year, the following provisions shall apply:
(a) An Eligible Employee shall be entitled to share in the Discretionary
Contribution for a Plan Year if, in the case of an hourly Employee, he or
she is credited with more than four hundred and thirty-five (435) Hours of
Service during such Plan Year or, in the case of a salaried or salaried
nonexempt Employee, more than five hundred (500) Hours of Service during
such Plan Year, and remains in the employ of an Employer on the last
business day of such Plan Year, or if he or she dies, retires after having
attained Normal Retirement Age or retires on account of Disability during
such Plan Year.
(b) If after applying subsection (a) above the Plan would fail to satisfy
the requirements of Section 410(b) of the Code, an Eligible Employee shall
be entitled to share in the Discretionary Contribution for a Plan Year if he
or she remains in the employ of an Employer on the last business day of such
Plan Year, without regard to the number of Hours of Service credited during
such year, or if he or she dies, retires after having attained normal
Retirement Age or retires on account of Disability during such Plan Year.
(c) If after applying subsections (a) and (b) of this Section the Plan
would fail to satisfy the requirements of Section 410(b) of the Code, an
Eligible Employee shall be entitled to share in the Discretionary
Contribution for a Plan Year if, in the case of an hourly Employee, he or
she is credited with more than four hundred and thirty-five (435) Hours of
Service during such Plan Year or, in the case of a salaried or salaried
nonexempt Employee, more than five hundred (500) Hours of Service during
such Plan Year, regardless of whether he or she remains in the employ of an
Employer on the last business day of such year, or if he or she dies,
retires after having attained Normal Retirement Age or retires on account of
Disability during such Plan Year.
8.6 ALLOCATION OF ROLLOVER CONTRIBUTIONS AND ASSET TRANSFERS. Any Rollover
Contribution and any direct transfer of plan assets in accordance with
<PAGE>
Section 4.9 made on behalf of an Employee shall be allocated to his or her
Account as of the Valuation Date coinciding with or next following the date
such contribution or transfer is received by the Trustee.
8.7 REPORTS TO PARTICIPANTS. The Administrative Committee shall, at least
annually, determine each Participant's share of the Trust Fund and furnish
each Participant with a statement summarizing his or her Account.
ARTICLE IX
Distribution, Loans and Withdrawals
9.1 RETIREMENT. When a Participant attains Normal Retirement Age, he or
she shall have a fully vested and nonforfeitable right to his or her
Account. Following retirement, such Participant shall receive distribution
of his or her Account in such manner and at such time as hereinafter
provided.
9.2 DISABILITY. If a Participant retires on account of a Disability, such
Participant shall have a fully vested and nonforfeitable right to his or her
Account. Such Participant shall receive distribution of his or her Account
in such manner and at such time as hereinafter provided.
9.3 TERMINATION OF EMPLOYMENT. If a Participant ceases to be employed by
an Employer or a Related Employer and is no longer employed by any of them
prior to attaining Normal Retirement Age for any reason other than
Disability or death, such Participant shall receive distribution of the
vested portion of his or her Account in such manner and at such time as
hereinafter provided. The vested portion of such Participant's Account
shall be equal to the sum of the following:
(a) Such Participant's Elective Contributions Account, Rollover
Contributions Account, and the portion of his or her Transfer Account that
was fully vested and nonforfeitable as of the date of transfer; and
(b) Such Participant's vested percentage of his or her Matching
Contributions Account and Discretionary Contributions Account determined in
accordance with the following schedule:
Number of Participant's
Years of Vesting Service Vested Percentage
Less than 5 0%
5 or more 100%
; and
(c) Such Participant's vested percentage of his or her Transfer Account
determined in accordance with Section 4.9.
<PAGE>
9.4 FORFEITURES. If a Participant is not vested in any portion of his or
her Matching Contributions Account, Discretionary Contributions Account, and
matching contributions and discretionary contributions sub-accounts under
his or her Transfer Account at the time he or she ceases to be employed by
an Employer or a Related Employer and is no longer employed by any of them,
the balance of such accounts and sub-accounts shall be forfeited as of the
date he or she ceases to be employed by an Employer or a Related Employer
and is no longer employed by any of them. If such Participant is reemployed
by an Employer or any Related Employer prior to incurring five (5)
consecutive Breaks in Service, the balance of his or her Matching
Contributions Account, Discretionary Contributions Account and matching
contributions and discretionary contributions sub-accounts under his or her
Transfer Account as of the Valuation Date coinciding with or next following
the date he or she ceased to be employed shall be restored.
Restoration shall be made by the end of the Plan Year following the Plan
Year in which the Participant is reemployed by an Employer or any Related
Employer. Restoration shall first be made out of forfeitures and to the
extent forfeitures are insufficient, then out of Employer Contributions.
The amounts forfeited by Participants in any Plan Year shall be used to make
restoration in accordance with this Section and, to the extent forfeitures
exceed the amounts required to make restoration, to reduce Employer
Contributions. The amount, if any, by which forfeitures occurring during a
Plan Year exceed the sum of the amounts required to make restoration and the
amount required to be contributed by an Employer for such Plan Year shall be
credited to an excess forfeiture account, which shall be adjusted for the
income, expenses, gains and losses attributable thereto in the same manner
provided for adjustment of Accounts. On the Valuation Date coinciding with
the last day of the next succeeding Plan Year, the excess forfeiture account
shall be closed and treated as a forfeiture occurring in such Plan Year.
This procedure shall be repeated for each Plan Year in which forfeitures
occurring during such year exceed the sum of the amount required to make
restoration and the amount required to be contributed by an Employer for
such year, subject, however, to such modification as may be required by the
Section governing termination of the Plan.
9.5 DISTRIBUTIONS TO PARTICIPANTS.
(a) Subject to the provisions of subsections (c), (d), (e), (f) and (g)
below, a Participant may elect to receive distribution of the vested portion
of his or her Account as of any Valuation Date which occurs after the date
he or she ceases to be employed by an Employer or a Related Employer and is
no longer employed by any of them.
(b) A Participant shall be entitled to a distribution of the vested portion
of his or her Account upon the occurrence of any of the following events:
(i) the termination of the Plan by the Participant's Employer, without
the establishment or maintenance of another defined contribution plan (other
than an employee stock ownership plan as defined in Section 4975(e)(7) of
the Code);
<PAGE>
(ii) the sale or other disposition by an Employer to an unrelated
corporation of substantially all of the assets (within the meaning of
Section 409(d)(2) of the Code) used by such Employer in a trade or business
of the Employer, if the Participant continues employment with the
corporation acquiring such assets; or
(iii) the sale or other disposition by an Employer of such Employer's
interest in a subsidiary (within the meaning of Section 409(d)(3) of the
Code), to an unrelated entity if the Participant continues employment with
such subsidiary.
Subject to the provisions of subsections (c), (d), (e), (f) and (g) below, a
Participant may elect to receive distribution of the vested portion of his
or her Account as of any Valuation Date following the occurrence of such
event.
An election pursuant to subsections (a) or (b) above shall be made by
delivering a written election, on such form as the Administrative Committee
may prescribe, to the Administrative Committee at least fifteen (15) days in
advance of the Valuation Date, specified in the election, as of which
distribution is to be made. The Participant's Account shall be valued as of
the Valuation Date elected by the Participant and distribution shall be made
in a lump sum as soon as practicable thereafter.
(c) Notwithstanding the foregoing provisions of this Section to the
contrary, if the value of the vested portion of a Participant's Account does
not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the
Valuation Date following the date he or she ceases to be employed by an
Employer or a Related Employer and is no longer employed by any of them (and
did not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the
date of any prior distribution), his or her Account shall be distributed in
a lump sum as soon as practicable after such Valuation Date.
(d) Notwithstanding the foregoing provisions of this Section to the
contrary, distribution to a Participant shall be made not later than the
sixtieth (60th) day after the later of the close of the Plan Year in which
the Participant attains the Normal Retirement Age or in which the
Participant ceases to be employed by an Employer or a Related Employer and
is no longer employed by any of them.
(e) Notwithstanding the foregoing provisions of this Section to the
contrary, a Participant may elect to receive or commence receiving
distribution of the portion of his or her vested Account balance, if any,
which was allocated to his or her Account as of June 30, 1995, at such time
and in such manner as provided in Exhibit A to this Plan; provided, however,
this subsection (e) shall not apply if such portion does not exceed Three
Thousand Five Hundred Dollars ($3,500.00) as of such date (and did not
exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the date of any
prior distribution).
<PAGE>
(f) Notwithstanding the foregoing provisions of this Section to the
contrary, distribution to a Participant shall be made or commence not later
than April 1 of the calendar year following the calendar year in which the
Participant attains age seventy and one-half.
(g) Notwithstanding the foregoing provisions of this Section to the
contrary, distribution to a Participant who has attained age seventy and
one-half before January 1, 1988, and is not a Five Percent Owner,
shall be made not later than April 1 of the calendar year following the
later of the calendar year in which the Participant attains age seventy and
one-half or the calendar year in which the Participant retires.
For purposes of this subsection (g), a Five Percent Owner shall mean a
Participant who is a Five Percent Owner at any time during the Plan Year
ending with or within the calendar year in which such Participant attains
age sixty-six and one-half or any subsequent Plan Year.
9.6 REQUIRED DISTRIBUTIONS TO PARTICIPANTS. Each Participant who is
required to receive a distribution pursuant to Section 9.5(f) and who
continues in the employ of an Employer or a Related Employer may elect, in
lieu of receiving a lump sum distribution of his or her Account, to receive
annual installments of the minimum amount determined in accordance with
Section 9.7. Such annual installments shall be paid over a period not to
exceed the life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and his or her spouse; provided, such
distribution must be made over a period such that the present value of the
payments to be made to the Participant must be greater than fifty percent
(50%) of the present value of the payments to be made to the Participant and
the Participant's spouse determined as of the date the Participant ceases to
be employed by an Employer or a Related Employer and is no longer employed
by any of them. The first two installments under this Section may be paid
in the calendar year following the calendar year in which the Participant
attains age seventy and one-half; thereafter, one installment shall be
paid in each calendar year.
An election shall be made by delivering a written election, on such form as
the Administrative Committee may prescribe, to the Administrative Committee
at least fifteen (15) days in advance of the date distribution is required
to commence pursuant to Section 9.1(f).
9.7 MINIMUM AMOUNTS TO BE DISTRIBUTED TO PARTICIPANTS. The amount to be
distributed each year to a Participant pursuant to Section 9.5(f), beginning
in the calendar year following the calendar year in which he or she attains
age seventy and one-half, shall not be less than the quotient obtained
by dividing the Participant's Account balance at the beginning of such year
by the life expectancy of the Participant (or the joint life and last
survivor expectancy of the Participant and his or her spouse) determined as
of the beginning of such year and reduced by one (1) for each year
thereafter.
<PAGE>
Notwithstanding the above, if the Participant (or his or her spouse, in the
event the Participant dies before distribution of his or her Account is made
or commences) so elects prior to the time distribution must commence
pursuant to Section 9.5 or 9.8, the life expectancy of the Participant, the
life expectancy of the spouse or the joint life and last survivor expectancy
of the Participant and his or her spouse shall be recalculated pursuant to
the regulations under Section 401(a)(9) of the Code. Such election shall be
irrevocable. In the absence of such election, life expectancy shall not be
recalculated. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
Distribution shall be made in accordance with the regulations under Section
401(a)(9) of the Code, including Regulation 1.401(a)(9)-2, which shall
override any distribution options in the Plan inconsistent therewith.
9.8 DISTRIBUTIONS TO SURVIVING SPOUSES AND BENEFICIARIES. Upon the death
of a Participant, the balance of the Participant's Account shall be
distributed to his or her surviving spouse or, if the Participant is not
survived by a spouse or the Participant's surviving spouse consents, to the
Participant's designated Beneficiary. To be effective, the consent of the
Participant's surviving spouse must be in writing, must acknowledge the
effect thereof and must be witnessed by a notary public. A Participant's
Account shall be valued as of the Valuation Date next following the date of
his or her death and shall be distributed to his or her surviving spouse or
Beneficiary in a lump sum as soon as practicable thereafter, but not later
than sixty (60) days after the close of the Plan Year in which the
Participant's death occurs.
Subject to the preceding provisions of this Section, each Participant from
time to time, by completing and signing a form furnished by the
Administrative Committee, may designate any person or persons (who may be
designated concurrently, contingently or successively) to receive any
benefits payable upon his or her death. Each beneficiary designation shall
revoke all prior designations by the Participant and shall be effective only
when filed in writing with the Administrative Committee during the
Participant's lifetime. If a Participant fails to designate a Beneficiary,
distribution shall be made to his or her surviving spouse, but if the
Participant is not survived by a spouse, to such of the Participant's issue
who survive him or her, such issue to take per stirpes, but if the
Participant is not survived by a spouse or any issue, then to the
Participant's estate. If a designated Beneficiary does not survive the
Participant and no successor Beneficiary has been designated, distribution
shall be made to the Participant's estate.
Notwithstanding the foregoing provisions of this Section to the contrary, a
surviving spouse or Beneficiary may elect to receive or begin receiving
distribution of the portion of the Participant's Account balance, if any,
which was allocated to such Participant's Account as of June 30, 1995, at
such time and in such manner as provided in Exhibit A to this Plan;
provided, however, this paragraph shall not apply if such portion does not
<PAGE>
exceed Three Thousand Five Hundred Dollars ($3,500.00) as of such date (and
did not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the
date of any prior distribution).
9.9 DISTRIBUTION TO ALTERNATE PAYEE. In the event that all or a portion of
a Participant's Account is immediately distributable to an alternate payee,
pursuant to a qualified domestic relations order, the Administrative
Committee shall distribute the amount payable to such alternate payee in a
lump sum as soon as practicable after determining that such order is
qualified in accordance with Article XVI. Except as otherwise provided in
the domestic relations order, such distribution shall be made as of the
Valuation Date following the date that it is determined that the order is
qualified. If the amount to be distributed in accordance with this section
exceeds Three Thousand Five Hundred Dollars ($3,500.00), no distribution
shall be made without the written consent of the alternate payee.
In the event that all or a portion of a Participant's Account is payable to
an alternate payee pursuant to a qualified domestic relations order, but is
not immediately distributable under such order, the Administrative Committee
shall direct the Trustee to establish a separate account within the meaning
of Section 16.5(b) on behalf of the alternate payee as soon as practicable
after determining that such order is qualified in accordance with Article
XVI. The Administrative Committee shall distribute the amount payable from
such account to such alternate payee in a lump sum at such time as is
provided by the terms of such order. Distribution of a separate account
pursuant to this Section 9.9 may be made prior to the Participant's
"earliest retirement age" as defined in Section 16.7.
9.10 DISTRIBUTIONS TO MINORS AND INCOMPETENT PERSONS. If any person to
whom benefits shall be distributed under the Plan shall be a minor, or if
the Administrative Committee shall determine that such person is incompetent
by reason of mental or physical disability, the Administrative Committee may
direct the Trustee to distribute such benefits in one or more of the
following ways to be determined by the Administrative Committee:
(a) directly to such minor or incompetent person; or
(b) to a legal or natural guardian or other relative of such minor, or to
the legal guardian or conservator of such incompetent person or to any adult
person with whom such incompetent person temporarily or permanently resides.
The receipt by such minor, incompetent person, guardian, conservator,
relative or other person shall be a complete discharge of the Trustee, the
Administrative Committee, and the Trust Fund, and the Trustee and
Administrative Committee shall be without any responsibility to see to the
application of any such distributions.
9.11 LOANS. Effective September 1, 1995, the Administrative Committee may
direct the Trustee to make a loan or loans from the vested portion of a
Participant's Account to a Participant or Beneficiary who is a "party in
interest" as defined in Section 3(14) of ERISA, subject to the following:
<PAGE>
(a) Each request for a loan shall be made to the Administrative Committee
at least twenty (20) days prior to the last business day of the month in
which the loan is to be made. The application shall contain such
information as the Administrative Committee may reasonably request.
(b) A loan for any month shall be made by the last business day of such
month and the amount of such loan shall be determined with reference to the
fair market value of the Participant's Account as of the most recent
Valuation Date preceding the date the loan is to be made for which valuation
data has been received by the Administrative Committee.
(c) No loan shall be made in an amount less than Five Hundred Dollars
($500.00). A Participant requesting a loan may amend his or her Deferral
Election to decrease the amount being deferred, on such form and in such
manner as the Administrative Committee shall prescribe. Such amendment
shall be submitted to the Administrative Committee with the Participant's
loan application and shall be effective as of the first day of the first
payroll period with respect to which the first loan payment is due.
(d) Any loan made on or after January 1, 1987, when added to the balance of
all other outstanding loans with respect to a Participant's Account from
the Plan, shall not exceed the lesser of--
(i) Fifty Thousand Dollars ($50,000.00), reduced by the excess, if any,
of--
(aa) the Participant's highest outstanding loan balance under the Plan for
the one (1) year period ending on the day before such loan is made, over
(bb) the Participant's loan balance under the Plan on the day such loan is
made, or
(ii) Fifty percent (50%) of the Participant's vested interest in his or her
Account.
The total of the unpaid balances of all loans (including accrued but unpaid
interest) made with respect to a Participant's Account under the Plan and
all other qualified retirement plans maintained by his or her Employer shall
not exceed the maximum amount which may be loaned in accordance with the
limitations of Section 72(p) of the Code.
(e) Each loan shall be evidenced by a promissory note bearing a reasonable
rate of interest as determined by the Administrative Committee taking into
consideration interest rates currently being charged by commercial lenders
for loans made under similar circumstances, and shall be adequately secured
in such manner as the Administrative Committee may determine. Collateral
for a loan may consist of an assignment of not more than fifty percent (50%)
of a Participant's vested interest in his or her Account. In the event of
default on a loan, the Administrative Committee shall, after giving the
Participant or Beneficiary written notice of the default and an opportunity
<PAGE>
to cure the default, in accordance with the terms and conditions of such
loan, foreclose upon the collateral to the extent necessary to satisfy the
Participant's obligation. If the collateral for such loan is the
Participant's vested interest in his or her Account, such foreclosure may
not occur prior to the Participant's termination of employment.
(f) Each loan shall be made for such term and, subject to (e) above, upon
such terms and conditions as the Administrative Committee shall determine;
provided that substantially level amortization, with payments not less
frequently than quarterly, shall be required over the term of such loan, and
further provided that the term shall not exceed five (5) years.
(g) Each loan shall be treated and accounted for as an investment of a
Participant's Elective Contributions Account except to the extent such loan
exceeds the value of such Account, in which case the excess shall be treated
and accounted for as an investment of the Participant's Matching
Contributions Account and Discretionary Contributions Account. The Trustee
shall establish a loan fund to which it shall transfer the amount of each
loan from the other Investment Funds in which the Participant's Account is
invested in proportion to the amounts invested in such funds as of the date
such loan is made. Amounts of principal and interest paid on any loan shall
be transferred from the loan fund to the Investment Funds in accordance with
the Participant's investment election in effect at the time of payment.
Upon payment in full of a loan, a Participant may amend his or her Deferral
Election to increase the amount being deferred, or in the case of a
Participant who has terminated his or her Deferral Election, make a new
election, on such form and in such manner as the Administrative Committee
shall prescribe. Such amendment or new election shall become effective in
accordance with the effective date provisions of Section 5.1.
(h) For purposes of this Section 9.11, the Rollover Contributions Account
of any Participant shall be deemed part of his or her Elective Contributions
Account.
(i) No distribution (other than a deemed distribution under Section 72(p)
of the Code) shall be made to any Participant or Former Participant or to a
Beneficiary of any Participant until all unpaid loans with respect to the
Participant's Account, including accrued interest thereon, have been paid in
full.
(j) The Administrative Committee shall follow a uniform and
nondiscriminatory policy in making loans to assure that loans are available
to all Participants and Beneficiaries who are "parties in interest" on a
reasonably equivalent basis as required under 29 CFR Section 2550.408b-1 and
to further assure that the Plan meets the requirements of Section 401(a)(4)
of the Code.
(k) The Administrative Committee shall establish, in writing,
administrative procedures to carry out the provisions of this Section 9.11.
<PAGE>
9.12 HARDSHIP WITHDRAWALS. The Administrative Committee may direct the
Trustee to make a hardship withdrawal distribution to a Participant or
Former Participant from his or her Elective Contributions Account subject to
the following:
(a) Each request for a hardship withdrawal must be by written application
filed with the Administrative Committee at least ten (10) days prior to the
date such withdrawal is to be made. The application shall specify the
reason for such withdrawal and shall include such other information and
documentation as the Administrative Committee may request.
(b) A hardship withdrawal shall be made as soon as practicable after
determining that the requirements of subsection (c) are met and shall be
made only in cash.
(c) A hardship withdrawal shall be permitted only if the distribution is on
account of an immediate and heavy financial need of the Participant and is
necessary to satisfy such financial need.
(i) A financial need may qualify as immediate and heavy without regard to
whether such need was foreseeable or voluntarily incurred by the
Participant. The following shall be deemed immediate and heavy financial
needs:
(aa) Payment of medical expenses described in Section 213(d) of the Code
previously incurred by the Participant, his or her spouse or dependent
(within the meaning of Section 152 of the Code) or payment necessary for
such persons to obtain medical care described in Section 213(d) of the Code;
(bb) Costs directly related to the purchase (excluding mortgage payments)
of a principal residence of the Participant;
(cc) Payment of tuition, related educational fees and room and board
expenses for the next twelve (12) months of post-secondary education for the
Participant, his or her spouse or dependent (within the meaning of Section
152 of the Code); and
(dd) Payment to prevent eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the Participant's
principal residence.
The above list of deemed immediate and heavy financial needs shall not be
exclusive, and other needs may qualify as immediate and heavy financial
needs.
(ii) A distribution shall be treated as necessary to satisfy an immediate
and heavy financial need of the Participant only to the extent the amount of
such distribution is not reasonably available to the Participant from other
resources. The Administrative Committee may reasonably rely on the
Participant's representations that the need cannot be relieved by insurance,
<PAGE>
by reasonable liquidation of the Participant's assets, by termination of the
Participant's Deferral Election or by other distributions or loans from the
Plan or from commercial lenders. A Participant's resources shall be deemed
to include those assets of his or her spouse and minor children that are
reasonably available to the Participant.
(iii) The amount of an immediate and heavy financial need may include any
amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution.
(d) Withdrawals shall be charged against the Investment Funds in which the
withdrawing Participant's Account is invested in proportion to the amounts
invested in such funds as of the date such withdrawal is made.
(e) Withdrawals shall in no event exceed the sum of the Elective
Contributions allocated to the Participant's Account.
(f) For purposes of this Section 9.12, the vested portion of a
Participant's Matching Contributions Account and Discretionary Contributions
Account which was allocated to his or her Account as of June 30, 1995, shall
be deemed part of his or her Elective Contributions.
(g) A request for a hardship distribution shall be treated as a claim for
benefits under Article XIV.
(h) The Administrative Committee may from time to time establish rules
governing withdrawals, including withdrawal minimums and the extent to which
withdrawals shall be limited because of Plan loans. Such rules shall be
applied on a uniform and nondiscriminatory basis.
9.13 FORM OF DISTRIBUTION. Distribution of a Participant's Account shall
be made in cash. However, a Participant may elect that distribution of that
portion of his or her Account which is invested in the Company Stock Fund be
distributed, in whole or in part, in whole shares of Company Stock. Such
election shall be made on such form, in such manner and at such time as
shall be prescribed by the Administrative Committee.
9.14 DIRECT ROLLOVERS.
(a) A Participant who is entitled to receive an eligible rollover
distribution may elect to have such distribution (or a portion thereof not
less than Five Hundred Dollars ($500.00)) made directly to an eligible
retirement plan ("direct rollover election").
An alternate payee who is entitled to receive an eligible rollover distribu-
tion pursuant to a qualified domestic relations order under Article XVI and
who is the spouse or a former spouse of a Participant may make a direct
rollover election as if such alternate payee were the Participant.
A surviving spouse who is entitled to receive an eligible rollover
distribution by reason of the Participant's death may make a direct rollover
<PAGE>
election; provided that such election is restricted to an eligible
retirement plan that is an individual retirement account described in
Section 408(a) of the Code or an individual retirement annuity described in
Section 408(b) of the Code.
(b) No earlier than ninety (90) days and no later than thirty (30) days
before an eligible rollover distribution is to be made, the Administrative
Committee shall provide the Participant, alternate payee, or surviving
spouse, as the case may be, with a written explanation of -
(i) the rules under which he or she may make a direct rollover election;
(ii) the legal requirement that federal income tax be withheld from the
distribution if he or she does not elect a direct rollover;
(iii) the rules under which the amount that he or she actually receives
will not be subject to federal income tax if such amount is transferred
("rolled over") within sixty (60) days after being received pursuant to
Section 402(c) of the Code;
(iv) the rules, if applicable, for receiving special income tax averaging,
or capital gain treatment, under Section 402(d) of the Code; and
(v) the Plan provisions under which a direct rollover election with
respect to one payment in a series of periodic payments will apply to all
subsequent payments until such election is changed.
Notwithstanding the foregoing to the contrary, if an eligible rollover
distribution is one of a series of periodic payments, the explanation
required by this subsection shall be provided annually as long as such
payments continue.
(c) A direct rollover election shall be made in such manner and at such
time as the Administrative Committee shall prescribe, and shall include:
(i) the name of the eligible retirement plan;
(ii) a statement that such plan is an eligible retirement plan; and
(iii) any other information necessary to permit a direct rollover by the
means selected by the Administrative Committee.
An election to make a direct rollover with respect to one payment in a
series of periodic payments shall apply to all subsequent payments in the
series until such election is changed; such change with respect to
subsequent payments may be made at any time.
(d) Notwithstanding subsection (b) to the contrary, if an individual after
receiving the written explanation required by subsection (b), affirmatively
elects to make or not make a direct rollover, an eligible rollover
<PAGE>
distribution may be made less than thirty (30) days after the date such
written explanation was given, provided the Administrative Committee has
informed such individual, in writing, of his or her right to a period of at
least thirty (30) days to make such election.
(e) As used in this Section, the following terms shall have the following
meanings:
(i) "Eligible Retirement Plan" shall mean
(A) an individual retirement account, described in Section 408(a) of the
Code;
(B) an individual retirement annuity described in Section 408(b) of the
Code (other than an endowment contract);
(C) a trust described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) of the Code and which is part of a defined
contribution plan described in Section 414(i) of the Code that permits
rollover contributions; or
(D) an annuity plan described in Section 403(a) of the Code.
(ii) "Eligible Rollover Distribution" shall mean a distribution from the
Plan of Two Hundred Dollars ($200.00) or more, excluding the following:
(A) a required distribution pursuant to Section 9.7;
(B) a return of Elective Contributions pursuant to Section 7.4; and
(C) a corrective distribution pursuant to Section 4.7, 5.4 or 6.2.
ARTICLE X
Top Heavy Provisions
10.1 TOP HEAVY REQUIREMENTS. Notwithstanding any provision of this Plan to
the contrary, if the Plan is or becomes Top Heavy, then the provisions of
this Article shall become applicable and supersede any conflicting
provisions of this Plan.
10.2 MINIMUM VESTING REQUIREMENTS. The vested percentage of each
Participant in his or her Matching Contributions Account, Discretionary
Contributions Account and the portion of his or her Transfer Account which
was not fully vested under the transferor plan as of the date of the
transfer shall be determined in accordance with the following schedule:
Number of Participant's
Years of Vesting Service Vested Percentage
Less than 3 0%
3 or more 100%
<PAGE>
10.3 MINIMUM CONTRIBUTION REQUIREMENT. Except as hereinafter provided, for
each Plan Year in which the Plan is Top Heavy, each Employer shall
contribute, on behalf of each Eligible Employee who is a Non-Key Employee
and who has not separated from its employ by the end of the Plan Year, an
amount equal to the lesser of:
(a) three percent (3%) of such Eligible Employee's compensation (as defined
in Section 7.5); or
(b) the percentage of such Eligible Employee's compensation (as defined in
Section 7.5) which is equal to the largest percentage determined by dividing
the Employer Contributions allocated to the Account of each Key Employee by
such Key Employee's compensation (as so defined).
The preceding sentence shall be applied by substituting four percent (4%)
for three percent (3%) for each Plan Year in which:
(i) the Plan is included in a Required Aggregation Group or a Permissive
Aggregation Group which includes a qualified defined benefit plan and the
Top Heavy Ratio does not exceed ninety percent (90%); and
(ii) the limitation set forth in Section 7.2 would be exceeded if 1.0 is
substituted for 1.25 wherever 1.25 appears in said limitation.
The minimum contribution shall be made on behalf of each Eligible Employee
who is a Non-Key Employee and who remains in the service of the Employer on
the last day of the Plan Year, regardless of the number of Hours of Service
such Eligible Employee is credited with during such Plan Year.
Notwithstanding any provision of this Section to the contrary, for each Plan
Year in which the Plan is Top Heavy, an Eligible Employee who is a Non-Key
Employee and who is also covered by a qualified defined benefit plan
maintained by his or her Employer, shall accrue a minimum benefit (as
required by Section 416(c)(1) of the Code) and a minimum contribution shall
not be made on behalf of such Eligible Employee under this Plan. The
preceding sentence shall be applied by substituting "three percent (3%)" for
"two percent (2%)" in Section 416(c)(1)(B)(i) of the Code and by increasing
(but not by more than ten percentage points) the percentage provided in
Section 416(c)(1)(B)(ii) of the Code for each Plan Year in which:
(i) the Plan is included in a Required Aggregation Group or a Permissive
Aggregation Group which includes a qualified defined benefit plan and the
Top Heavy Ratio does not exceed ninety percent (90%); and
(ii) the limitation set forth in Section 7.2 would be exceeded if 1.0 is
substituted for 1.25 wherever 1.25 appears in said limitation.
For purposes of satisfying the minimum contribution requirement of this
Section, Elective Contributions and Matching Contributions shall not be
taken into account.
<PAGE>
10.4 MODIFIED LIMITATION ON ALLOCATIONS. The limitation of Section 7.2
shall be applied by substituting 1.0 for 1.25 whenever 1.25 appears in said
limitation for each Plan Year in which the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which includes a
qualified defined benefit plan and the Top Heavy Ratio exceeds ninety
percent (90%).
10.5 PRESENT VALUE FACTORS. For purposes of determining the Top Heavy
Ratio, the present value of accrued benefits under all defined benefit plans
included in a Required Aggregation Group or a Permissive Aggregation Group
shall be based on the following factors:
Interest: Six and one-half percent (6.5%) per annum
Mortality: 1971 Group Annuity Mortality Table, using male
rates for all individuals
10.6 BENEFIT ACCRUAL. For purposes of determining the Top Heavy Ratio, the
accrued benefit of any Non-Key Employee under all defined benefit plans
included in a Required Aggregation Group or a Permissive Aggregation Group
shall be determined under the method used for accrual purposes for all such
plans of an Employer or, if no method is prescribed, as if such benefit
accrued no more rapidly than the slowest rate permitted under Section
411(b)(1)(C) of the Code.
ARTICLE XI
Trust Fund Investments
11.1 DUTIES. The Trustee shall receive and hold all contributions made by
an Employer together with such other assets as may be transferred to it in
accordance with the provisions of the Plan. In addition, the Trustee shall
make distributions as directed by the Administrative Committee in accordance
with the provisions of Article IX.
11.2 INVESTMENT FUNDS. The Trustee shall establish a Company Stock Fund
and one or more other Investments Funds as the Finance Committee may from
time to time direct. The Finance Committee shall direct that each
Investment Fund, other than the Company Stock Fund, shall be invested:
(a) at the discretion of the Trustee in accordance with such investment
guidelines and objectives as may be established by the Finance Committee for
such Investment Fund; or
(b) at the discretion of a duly appointed Investment Manager in accordance
with such investment guidelines and objectives as may be established by the
Finance Committee; or
(c) in such investments as the Finance Committee may specify for such
Investment Fund.
<PAGE>
The Finance Committee may from time to time change its direction with
respect to any Investment Fund and may, at any time, eliminate any
Investment Fund. Whenever an Investment Fund is eliminated, the Trustee
shall promptly liquidate the assets of such Investment Fund and reinvest the
proceeds thereof in accordance with the direction of the Finance Committee.
The Trustee shall transfer to each Investment Fund such portion of the
assets of the Trust as the Administrative Committee may from time to time
direct in accordance with the terms of the Plan. All interest, dividends
and other income received with respect to, and any proceeds realized from
the sale or other disposition of, assets held in any Investment Fund shall
be credited to and reinvested in such Investment Fund, and all expenses
properly attributable to any Investment Fund shall be paid therefrom unless
paid by the Employers.
11.3 COMPANY STOCK FUND. The Trustee shall establish a Company Stock Fund
which shall be invested primarily in shares of Company Stock. The Trustee
shall, as soon as practicable, apply amounts allocated to the Company Stock
Fund to purchase Company Stock on the open market or in private
transactions, from the Company or otherwise, at current market value.
Pending investment in Company Stock, the Trustee shall invest amounts
allocated to and dividends or other amounts received by the Company Stock
Fund in short-term cash equivalents including, but not limited to, short-
term debt obligations issued or guaranteed by the United States government,
money market funds and savings accounts. Notwithstanding the provisions of
this Section 11.3 to the contrary, the Trustee shall be under no duty or
obligation to invest any assets of the Trust in shares of Company Stock
unless (i) such shares constitute "qualifying employer securities" within
the meaning of Section 407 of ERISA and (ii) such investment is not
prohibited by Section 404, 406 or 407 of ERISA.
11.4 INVESTMENT OF DISCRETIONARY CONTRIBUTIONS. Each Participant's
Discretionary Contributions Account shall be invested in the Company Stock
Fund.
11.5 INVESTMENT OF ELECTIVE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS. Each
Participant may direct that Elective Contributions and Matching
Contributions made on his or her behalf shall be invested in any one or more
of the Investment Funds, provided the percentage of Elective Contributions
and Matching Contributions to be invested in any Investment Fund must be one
percent (1%), or any multiple thereof. An investment direction shall be
made by such written, telephonic or electronic means as shall be prescribed
by the Administrative Committee.
A Participant's investment direction, if received by the Administrative
Committee prior to the date he or she commences participation, shall be
effective as of said date. If a Participant does not make an investment
direction or an investment direction is not received by the Administrative
Committee before he or she commences participation, the Elective
Contributions and Matching Contributions on behalf of such Participant shall
<PAGE>
be invested in the fund which presents the least risk of loss as determined
by the Trustee. An investment direction received by the Administrative
Committee after the date a Participant commences participation shall be
effective as of the first business day of the calendar month following
receipt by the Administrative Committee or as soon as practicable
thereafter. A deemed investment direction pursuant to Section 3.4(a) shall
be effective as of the date of the affected individual's change in
employment status; provided, however, that a deemed investment direction
with respect to an individual described in Section 3.4(a)(iii) shall be
effective as soon as practicable after his or her change in employment
status.
Once each calendar month, a Participant may elect to have future Elective
Contributions and Matching Contributions on his or her behalf invested in
the Investment Funds in proportions other than those previously elected, but
in multiples of one percent (1%). An election modifying a previous
investment direction shall be made by such written, telephonic or electronic
means as shall be prescribed by the Administrative Committee and shall be
effective as of the first business day of the calendar month following
receipt by the Administrative Committee or as soon as practicable
thereafter.
11.6 REINVESTMENT OF ELECTIVE CONTRIBUTIONS ACCOUNT AND MATCHING
CONTRIBUTIONS ACCOUNT. Once each calendar month, a Participant, Former
Participant, surviving spouse or Beneficiary may elect to reinvest the
balance of his or her Elective Contributions Account and Matching
Contributions Account in any one or more of the Investment Funds, provided
the portion of such Elective Contributions Account and Matching
Contributions Account invested in any Investment Fund must be one percent
(1%), or any multiple thereof, of such balance. An election to reinvest an
Elective Contributions Account and Matching Contributions Account shall be
made by such written, telephonic or electronic means as shall be prescribed
by the Administrative Committee and shall be effective as of the first
business day of the calendar month following receipt by the Administrative
Committee or as soon as practicable thereafter.
11.7 LOAN FUND. Participant loans and payments of principal and interest
shall be credited to and charged against the loan fund established by the
Trustee in accordance with Section 9.11(g).
11.8 VOTING RIGHTS. Stock held in the Company Stock Fund shall be voted by
the Trustee.
ARTICLE XII
Finance Committee
12.1 DUTIES. The Finance Committee shall be a Named Fiduciary within the
meaning of Section 402(a)(2) of ERISA and shall have the following powers
and duties:
<PAGE>
(a) to appoint and remove the Trustee and establish the terms of the Trust
agreement;
(b) to direct the Trustee to establish one or more Investment Funds and to
change or eliminate any Investment Fund other than the Company Stock Fund;
(c) to appoint one or more Investment Managers to direct the investment of
the assets of the Trust or such portion thereof as may be designated by the
Finance Committee; to remove any Investment Manager; and to establish
investment guidelines and objectives which shall be binding on such
Investment Managers;
(d) to limit the investment of one or more Investment Funds to such shares
of stock, bonds, mortgages, notes, mutual fund shares, deposit
administration, investment or group annuity contracts issued by a legal
reserve life insurance company or other property of any kind, real or
personal, as the Finance Committee may deem appropriate;
(e) to establish investment guidelines and objectives which shall be
binding on the Trustee;
(f) to employ or retain counsel, accountants and other consultants,
including professional investment advisers, as it deems to be in the best
interests of the Plan;
(g) to direct the Trustee to employ and transfer all of the assets of the
Trust or such portion thereof as the Finance Committee may designate to one
or more custodians selected by it; and
(h) to approve and accept accounts rendered by the Trustee.
The Finance Committee shall act by a majority of its members and such action
may be taken by a vote at a meeting or in a writing without a meeting. Any
member may participate in a meeting by means of a conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other.
12.2 DELEGATION OF MINISTERIAL DUTIES. The Finance Committee may, by a
writing signed by a majority of its members, delegate to any member or
members of the Committee or to any Employee or Employees, severally or
jointly, the authority to perform any ministerial act in connection with the
administration of the Plan.
12.3 COMPENSATION AND REIMBURSEMENT OF EXPENSES. The members of the
Finance Committee shall be entitled to reasonable compensation for services
rendered and to reimbursement of expenses properly and actually incurred, in
the performance of their duties on behalf of the Plan, but no person so
serving who already receives compensation from an Employer or any Related
Employer for services rendered as an employee shall receive compensation for
such services, except for reimbursement of expenses properly and actually
incurred and not otherwise reimbursed.
<PAGE>
12.4 RELIANCE ON REPORTS. The Finance Committee shall be entitled to rely
upon all certificates and reports made by any agent, attorney, accountant,
actuary or other consultant, including any investment adviser, employed to
assist in the performance of its duties.
12.5 MULTIPLE SIGNATURES. A majority of the members of the Finance
Committee or any one member authorized by such Committee shall have
authority to execute all documents, reports or other memoranda necessary or
appropriate to carry out the actions and decisions of the Finance Committee.
The Trustee, any investment manager or any other interested party may rely
upon any document, report or other memorandum so executed as evidence of the
Finance Committee action or decision indicated thereby.
ARTICLE XIII
Administrative Committee
13.1 APPOINTMENT OF ADMINISTRATIVE COMMITTEE. The Human Resources
Committee of the Board of Directors shall appoint an Administrative
Committee of not less than four (4) individuals who shall have authority to
control and manage the administration of the Plan. The Administrative
Committee shall act by a majority of its members, and such action may be
taken in a meeting or in a writing without a meeting. Any member may
participate in a meeting by means of a conference telephone or similar
communications equipment by means of which all persons participating can
hear each other.
13.2 RESIGNATION AND REMOVAL. Any person appointed to serve as a member of
the Administrative Committee shall serve at the pleasure of the Human
Resources Committee of the Board of Directors and may be removed by delivery
of written notice of removal, which shall take effect at the date specified
therein. Any member of the Administrative Committee may resign at any time
by delivering to the Human Resources Committee a written notice of
resignation, which shall take effect at a date specified therein. The Human
Resources Committee, as soon as practicable following delivery of a written
notice of removal or receipt of a written notice of resignation of any
member of the Administrative Committee, shall consider the appointment of a
successor.
13.3 POWERS AND DUTIES. The Administrative Committee shall be a Named
Fiduciary within the meaning of Section 402(a)(1) of ERISA with the
following powers and complete discretionary authority to control and manage
the operation and administration of the Plan:
(a) To determine all questions concerning the eligibility of Employees to
participate in and receive benefits under the Plan;
(b) To compute the amount of benefits payable to any Participant or
Beneficiary;
<PAGE>
(c) To authorize and direct the Trustee with respect to the payment of
benefits;
(d) To furnish the Trustee with such information, statements and reports as
will enable the Trustee to comply with the reporting and disclosure
requirements under ERISA and the Code;
(e) To interpret the provisions of the Plan and to make rules and
regulations for the administration of the Plan;
(f) To maintain all the necessary records for the administration of the
Plan;
(g) To employ or retain counsel, accountants, actuaries or such other
consultants as may be required to assist in administering the Plan;
(h) To act as agent for service of legal process; and
(i) To give written notice to all interested parties (as defined in the
regulations prescribed under Section 7476(b)(1) of the Code), in the form
and manner, and at such time as prescribed by such regulations, of an
application for an advance determination with respect to the initial
qualification of the Plan or to the effect of an amendment or termination of
the Plan.
The Administrative Committee shall have no power or authority over the
investment of the assets of the Trust and nothing in this Section 13.3 shall
be construed as granting such power and authority. Except as otherwise
provided, the Trustee shall have exclusive authority and discretion to
manage and control the investment of the Trust Fund.
13.4 REPORTING AND DISCLOSURE. The Administrative Committee shall furnish
to each Participant and to each other person who is receiving benefits under
the Plan, and shall file with the Secretary of Labor and the Secretary of
Treasury, all reports, disclosures and notifications as are required under
the Code.
13.5 DELEGATION OF MINISTERIAL DUTIES. The Administrative Committee may
delegate to any member or members of the Committee or to any other person or
persons, severally or jointly, the authority to perform any ministerial act
in connection with the administration of the Plan.
13.6 PAYMENT OF PLAN EXPENSES. Notwithstanding any provision of the Plan
or Trust to the contrary, payment of any reasonable expenses of
administering the Plan, as determined by the Administrative Committee, shall
be made from the Trust Fund, unless paid by an Employer. If such expenses
are incurred as a result of services provided to the Plan or Trust by a
party in interest (as defined in Section 3(14) of ERISA), no payment shall
be made from the Trust Fund unless such payment (a) satisfies the applicable
requirements of Section 408 of ERISA and the regulations thereunder; or (b)
is otherwise exempt from the applicable prohibited transaction rules of the
Code and ERISA.
<PAGE>
13.7 COMPENSATION AND REIMBURSEMENT OF EXPENSES. The members of the
Administrative Committee shall be entitled to reasonable compensation for
services rendered and to reimbursement of expenses properly and actually
incurred, in the performance of their duties on behalf of the Plan, but no
person so serving who already receives compensation from an Employer or any
Related Employer for services rendered as an Employee shall receive
compensation from the Plan, except reimbursement of expenses properly and
actually incurred and not otherwise reimbursed.
13.8 UNIFORMITY OF RULES AND REGULATIONS. In the administration of the
Plan and the interpretation and application of its provisions, the
Administrative Committee shall exercise its powers and authority in a
nondiscriminatory manner, and shall apply uniform administrative rules and
regulations in order to assure substantially the same treatment to
Participants in similar circumstances.
13.9 RELIANCE ON REPORTS. The Administrative Committee shall be entitled
to rely upon all certificates and reports made by any counsel, accountant,
actuary or other consultant employed or retained to assist in administering
the Plan.
13.10 MULTIPLE SIGNATURES. A majority of the members of the Administrative
Committee or any one member authorized by such Committee shall have
authority to execute all documents, reports or other memoranda necessary or
appropriate to carry out the actions and decisions of the Administrative
Committee. The Trustee or any other interested party may rely upon any
document, report or other memorandum so executed as evidence of the
Administrative Committee action or decision indicated thereby.
13.11 CONFIDENTIALITY OF PARTICIPANT DECISIONS RELATING TO COMPANY STOCK.
The Administrative Committee shall establish procedures designed to
safeguard the confidentiality of information relating to the purchase,
holding and sale of Company Stock, and the exercise of voting, tender and
similar rights with respect thereto, by Participants, Former Participants,
surviving spouses and Beneficiaries. The Administrative Committee shall be
responsible for ensuring that such procedures meet the applicable
requirements of ERISA Reg. Secion 2550.404c-1(d)(2). In the event the
Administrative Committee determines that a particular situation involves a
potential for undue Employer or Related Employer influence upon
Participants, Former Participants, surviving spouses and Beneficiaries
within the meaning of ERISA Reg. Section 2550.404c-1(d)(2), the
Administrative Committee shall promptly appoint an independent fiduciary to
perform the role of the Administrative Committee and carry out activities
with respect to such situation. Such independent fiduciary shall not be a
person affiliated with an Employer within the meaning of ERISA Reg. Section
2550.404c-1(e)(3).
<PAGE>
ARTICLE XIV
Claims Procedure
14.1 FILING A CLAIM FOR BENEFITS. A Plan Participant or other person
entitled to benefits under the Plan may make a claim for Plan benefits by
filing a written request with the Administrative Committee upon a form to be
furnished to it for such purpose.
14.2 DENIAL OF CLAIM. If a claim is wholly or partially denied, the
Administrative Committee shall furnish the claimant with written notice
setting forth in a manner calculated to be understood by the claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent Plan provisions on which the denial is
based;
(c) A description of any additional material or information necessary for
the claimant to perfect his or her claim and an explanation why such
material or information is necessary; and
(d) Appropriate information as to the steps to be taken if the claimant
wishes to submit his or her claim for review.
Such notice shall be furnished to the claimant within ninety (90) days after
receipt of his or her claim, unless special circumstances require an
extension of time for processing such claim. If an extension of time for
processing is required, the Administrative Committee shall, prior to the
termination of the initial ninety (90) day period, furnish the claimant with
written notice indicating the special circumstances requiring an extension
and the date by which the Committee expects to render its decision. In no
event shall an extension exceed a period of ninety (90) days from the end of
the initial ninety (90) day period.
14.3 APPEAL OF DENIED CLAIM. A claimant may request the Administrative
Committee to review a denied claim. Such request shall be in writing and
must be delivered to the Administrative Committee within sixty (60) days
after receipt by the claimant of written notification of denial of claim. A
claimant or his or her duly authorized representative may:
(a) Review pertinent documents, and
(b) Submit issues and comments in writing.
14.4 DECISION ON APPEAL. The Administrative Committee shall notify the
claimant of its decision on review not later than sixty (60) days after
receipt of a request for review, unless special circumstances require an
extension of time for processing, in which case a decision shall be rendered
as soon as possible but not later than one hundred twenty (120) days after
receipt of a request for review. If an extension of time for review is
<PAGE>
required because of special circumstances, written notice of the extension
must be furnished to the claimant prior to the commencement of the
extension. The Administrative Committee's decision on review shall be in
writing and shall include specific reasons for the decision, as well as
specific references to the pertinent Plan provisions on which the decision
is based.
ARTICLE XV
Amendment and Termination
15.1 AMENDMENT. The Company, through the Human Resources Committee of its
Board of Directors, reserves the right to amend the Plan from time to time,
provided that no amendment shall, except as otherwise provided in this Plan
or authorized by law, permit any part of the Trust Fund to revert to an
Employer or Related Employer or permit any part of the Trust Fund to be used
for, or diverted to, purposes other than the exclusive benefit of the
Participants, their surviving spouses and Beneficiaries. Each such
amendment shall be effective with respect to a subsidiary of the Company
that has adopted the Plan without further action by the subsidiary.
If the vesting schedule in effect under the Plan is amended, each
Participant who has completed at least three (3) Years of Vesting Service
may elect to have the vested percentage of his or her Account determined
without regard to such amendment. The Administrative Committee shall
promptly give each such Participant written notice of the adoption of such
amendment and the availability of the election to have the vested percentage
of his or her Account determined without regard to such amendment. An
election by a Participant shall be in writing and shall be effective if
filed with the Administrative Committee at any time during the period
beginning with the date such amendment is adopted and ending on the later of
(i) the date which is sixty (60) days after the day such amendment is
adopted, (ii) the date which is sixty (60) days after the day such amendment
becomes effective, or (iii) the date which is sixty (60) days after the day
the Participant receives written notice of such amendment. An election once
made shall be irrevocable. For purposes of this Section, a Participant
shall be considered to have completed three (3) Years of Vesting Service if
the Participant has completed three (3) years of Vesting Service prior to
the expiration of the period in which an election could be made.
15.2 ACCOUNTS NOT TO BE DECREASED BY AMENDMENT. No Amendment shall, except
to the extent permitted under Section 412(c)(8) of the Code, decrease a
Participant's Account balance or, except to the extent permitted by
regulations, eliminate an optional form of benefit. In addition, no
amendment shall have the effect of decreasing a Participant's vested
interest determined without regard to such amendment as of the later of the
date such amendment is adopted or the date it becomes effective.
15.3 TERMINATION. The Company, through the Human Resources Committee of
its Board of Directors, may terminate the Plan at any time in its entirety
or with respect to any Employer or any division by written notice delivered
<PAGE>
to the Trustee. The Plan shall terminate with respect to any Employer on
the earliest of the following dates:
(a) The date the Employer is judicially declared bankrupt or insolvent;
(b) The date the Employer permanently discontinues contributions under the
Plan;
(c) The date the Employer is merged or consolidated with another
corporation and the Employer is not the surviving corporation or
substantially all its assets are sold, unless the surviving or purchasing
corporation makes provision to continue the Plan with the consent of the
Company; or
(d) The date the Employer withdraws from the Plan.
If an Employer permanently discontinues contributions or the Plan is
otherwise completely or partially terminated for any other reason, each
affected Participant shall have a fully vested and nonforfeitable interest
in his or her Account and the Trustee shall make distributions in such
manner and at such times as directed by the Administrative Committee in
accordance with the terms of the Plan. Notwithstanding any provision of the
Plan to the contrary, distribution of a Participant's Account shall be made
without the Participant's or Former Participant's consent following
termination of the Plan, unless applicable regulations require that the
Account of a Participant who does not consent to a distribution be
transferred to another qualified plan maintained by his or her Employer.
15.4 NOTICE OF AMENDMENT OR TERMINATION. In the case of an application for
an advance determination as to whether a Plan amendment or termination
affects the continuing qualification of the Plan, the Administrative
Committee shall furnish each interested party (as defined by the regulations
prescribed under Section 7476(b)(1) of the Code) with written notice, in the
form and manner, and at such time as prescribed by such regulations, of the
adoption of any amendment or Plan termination.
ARTICLE XVI
Nonalienability of Benefits; Qualified Domestic Relations Orders
16.1 NONALIENABILITY OF BENEFITS. Except as expressly provided below, the
benefits provided under the Plan shall not be subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, and any
attempt to cause such benefits to be so subjected will not be recognized.
16.2 QUALIFIED DOMESTIC RELATIONS ORDERS. The provisions of Section 16.1
shall apply to the creation, assignment or recognition of a right to any
benefit payable with respect to a Participant, including the creation,
assignment or recognition of any right, pursuant to a domestic relations
order, except that said provisions shall not apply if the order is
determined to be a qualified domestic relations order.
<PAGE>
16.3 NOTICE. Upon the receipt of any domestic relations order by the Plan,
the Administrative Committee shall promptly notify, in writing, the
Participant and any alternate payee named in the domestic relations order
(at the address included in the domestic relations order) of the receipt of
such order and the Plan's procedures for determining the qualified status of
such domestic relations order.
16.4 REPRESENTATIVE. Any alternate payee named in a domestic relations
order received by the Plan shall have the right to designate, by notice in
writing to the Administrative Committee, a representative for the receipt of
copies of notices that are sent to the alternate payee with respect to such
domestic relations order.
16.5 SEPARATE ACCOUNT.
(a) During any period in which the issue of whether a domestic relations
order is a qualified domestic relations order is being determined (by the
Administrative Committee, by a court of competent jurisdiction, or
otherwise), the Administrative Committee shall direct the Trustee to
segregate in a separate interest-bearing account in the Trust or in an
interest-bearing escrow account, the amounts, if any, which would have been
payable to any alternate payee during such period if the order had been
determined to be a qualified domestic relations order.
(b) In the event an alternate payee does not receive an immediate
distribution pursuant to a domestic relations order which is determined by
the Administrative Committee or by a court of competent jurisdiction to be a
qualified domestic relations order, the Administrative Committee shall
direct the Trustee to establish a separate account in the Plan in the name
of the alternate payee as soon as practicable following such determination.
An alternate payee shall have the same rights and protections as a
Participant with respect to such account and shall be entitled to receive
distribution of such account in accordance with Section 9.5.
16.6 DETERMINATION BY ADMINISTRATIVE COMMITTEE. Within ninety (90) days
after receipt of a domestic relations order, the Administrative Committee
shall determine whether such order is a qualified domestic relations order
and shall notify, in writing, the Participant and each alternate payee named
in such order of such determination.
If the Administrative Committee shall determine that the domestic relations
order is a qualified domestic relations order and such order provides that
the benefits required to be paid thereunder are immediately distributable,
the Administrative Committee shall direct the Trustee to pay to each
alternate payee named in such order, the benefits required to be paid
thereunder, including any amounts segregated in a separate account or escrow
account in accordance with subsection (a) of Section 16.5 (plus any interest
thereon). If the Administrative Committee shall determine that the domestic
relations order is a qualified domestic relations order and such order does
not provide that the benefits required to be paid thereunder are immediately
distributable, the Administrative Committee shall direct the Trustee to
establish a separate account in accordance with Section 16.5(b).
<PAGE>
If the Administrative Committee shall determine that the domestic relations
order is not a qualified domestic relations order, the notice required by
the first paragraph of this Section shall include a statement of the
specific reason or reasons for the Administrative Committee's determination
and the Administrative Committee shall direct the Trustee to continue to
segregate, in accordance with Section 16.5(a) in a separate account or
escrow account, during the eighteen (18) month period beginning with the
date on which the first payment would be required to be made under such
domestic relations order, any amounts which would have been payable to any
alternate payee during such eighteen (18) month period if the order had been
determined to be a qualified domestic relations order, unless such order
shall sooner be determined, by the Administrative Committee or a court of
competent jurisdiction, to be a qualified domestic relations order, in which
event the Administrative Committee shall direct the Trustee to make payment
of any segregated amount to each alternate payee named in the order or to
establish a separate account in the name of each alternate payee named in
the order in accordance with the second paragraph of this Section. If
neither the Administrative Committee nor a court of competent jurisdiction
shall determine within said period of eighteen (18) months that such
domestic relations order is a qualified domestic relations order; then, upon
expiration of said period, the Administrative Committee shall direct the
Trustee to pay any such segregated amount (plus any interest thereon) to the
person or persons who would have been entitled to such amounts if there had
been no order.
16.7 DEFINITIONS. As used in this Article, the following terms shall have
the meanings hereinafter set forth:
(a) "Alternate payee" shall mean any spouse, former spouse, child or other
dependent of a Participant who is recognized by a domestic relations order
as having a right to receive all, or a portion of, the benefits payable
under the Plan with respect to such Participant.
(b) "Domestic relations order" shall mean any judgment, decree or order
(including approval of a property settlement agreement) which relates to the
provision of child support, alimony payments or marital property rights of a
spouse, former spouse, child or other dependent of a Participant, and is
made pursuant to a state domestic relations law (including a community
property law).
(c) "Earliest retirement age" shall mean the earlier of:
(i) the date on which the Participant is entitled to a distribution under
the Plan, or
(ii) the later of the date the Participant attains age fifty (50), or the
earliest date on which the Participant could begin receiving payments under
the Plan if he or she separated from service.
(d) "Qualified domestic relations order" shall mean a domestic relations
order which:
<PAGE>
(i) creates or recognizes the existence of an alternate payee's right to,
or assigns to an alternate payee the right to, receive all or a portion of
the benefits payable with respect to a Participant under the Plan; and
(ii) clearly specifies:
(aa) the name and the last known mailing address (if any) of the
Participant and the name and mailing address of each alternate payee covered
by the order;
(bb) the amount or percentage of the Participant's benefits to be paid by
the Plan to each such alternate payee, or the manner in which such amount or
percentage is to be determined;
(cc) the number of payments or period to which such order applies; and
(dd) each plan to which such order applies; and
(iii) does not require the Plan to:
(aa) provide any type or form of benefits, or any option, not otherwise
provided under the Plan;
(bb) provide increased benefits (determined on the basis of actuarial
value); or
(cc) pay benefits to an alternate payee which are required to be paid to
another alternate payee under another order previously determined to be a
qualified domestic relations order.
In the case of any payment to an alternate payee before a Participant has
separated from service, a domestic relations order shall not be treated as
failing to meet the requirements of clause (aa) of subparagraph (iii) solely
because such order requires that payment of benefits be made to an alternate
payee:
(i) on or after the date on which the Participant attains (or would have
attained) the earliest retirement age;
(ii) as if the Participant has retired on the date on which such payment
is to begin under such order; and
(iii) in any form in which such benefits may be paid under the Plan to the
Participant (other than in the form of a joint and survivor annuity with
respect to the alternate payee and his or her subsequent spouse).
<PAGE>
ARTICLE XVII
Delegation of Authority by Subsidiaries
17.1 DELEGATION OF AUTHORITY BY SUBSIDIARIES. Each subsidiary of the
Company that adopts the Plan hereby irrevocably grants to the Company, its
Board of Directors, the Finance Committee and the Administrative Committee,
exclusive authority to exercise all the powers conferred on them by the
terms of the Plan, including the power vested in the Human Resources
Committee of the Board of Directors to amend or terminate the Plan, and each
adopting subsidiary irrevocably appoints the Company, its Board of
Directors, the Finance Committee and the Administrative Committee as its
agents for such purposes. In addition, each subsidiary of the Company that
adopts the Plan shall automatically become a party to the Trust without
further action on its part.
ARTICLE XVIII
Miscellaneous
18.1 MERGER OR CONSOLIDATION OF PLAN. 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 or she would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.
18.2 FIDUCIARY RESPONSIBILITY.
(a) Allocation of Responsibility. All fiduciaries with respect to the Plan
and Trust shall be required to meet the prudence, diversification and other
fiduciary responsibilities of applicable law to the extent such requirements
and responsibilities apply to them, provided each fiduciary shall be
responsible for carrying out only the requirements, responsibilities and
duties placed upon such fiduciary by provisions of the Plan and Trust. In
particular:
(i) An Investment Manager shall have full investment responsibility with
respect to the assets of the Trust for which it has the power of investment
direction. Except as otherwise provided by law, the other fiduciaries,
including but not limited to, the Trustee and the Finance Committee, shall
have no duty or responsibility with respect to the investment of such assets
as long as they are subject to the investment direction of such Investment
Manager.
(ii) The Trustee shall have full investment responsibility with respect to
the assets of the Trust which are not invested pursuant to the direction of
the Finance Committee and are not subject to the investment direction of an
Investment Manager. Except as otherwise provided by law, the other
fiduciaries shall have no duty or responsibility with respect to the
investment of such assets.
<PAGE>
(iii) The Trustee shall have no duty or responsibility with respect to
investment of assets of the Trust so long as they are invested at the
direction of the Finance Committee or a duly appointed Investment Manager.
(iv) The Administrative Committee shall have no duty or responsibility
with respect to the investment of the assets of the Trust.
(v) The fiduciaries, including but not limited to, the Trustee, the
Finance Committee, the Administrative Committee and any Investment Manager
shall have no responsibility for the investment elections made by
Participants, Former Participants, surviving spouses or Beneficiaries, or
for the exercise of voting, tender or similar rights by Participants, Former
Participants, surviving spouses or Beneficiaries except as otherwise
provided by applicable law.
(b) FIDUCIARY DUTIES. Each fiduciary shall exercise the powers granted to
it and shall discharge its duties under the Plan solely in the interest of
the Participants, their surviving spouses and Beneficiaries and:
(i) for the exclusive purpose of
(aa) providing benefits to Participants, their surviving Spouses and
Beneficiaries, and
(bb) defraying reasonable expenses of administering the Plan;
(ii) with the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent person acting in like capacity and familiar
with such matters would use in the conduct of an enterprise of a like
character and with like aims; and
(iii) by diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly prudent
not to do so.
18.3 PROHIBITED TRANSACTIONS. Neither the Trustee, nor the Finance
Committee, nor any Investment Manager, nor any Participant or Former
Participant who directs the investment of his or her Account shall engage in
a transaction which the Trustee, Finance Committee, Investment Manager,
Participant or Former Participant knows or should know is prohibited by
Section 406 or 407(a) of ERISA or by Section 4975 of the Code, unless an
appropriate exemption or exemptions have been granted by the Department of
Labor under Section 408 of ERISA and the Department of the Treasury under
Section 4975(c)(2) of the Code.
18.4 EXCLUSIVE BENEFIT. Except as otherwise provided in the Plan or
authorized by the Code, in no event shall any part of the Trust Fund be used
for, or diverted to, purposes other than for the exclusive benefit of the
Participants, their surviving spouses and Beneficiaries.
<PAGE>
18.5 SERVICE WITH PREDECESSOR EMPLOYER. Service with a predecessor
employer shall, to the extent required by the Code and regulations, be
treated as service with an Employer or Related Employer.
18.6 INITIAL PLAN QUALIFICATION. All contributions under the Plan are
conditioned on initial qualification of the Plan under Section 401(a) of the
Code. If the Plan does not initially qualify, the Trustee shall, upon
written request of the Administrative Committee, return to each Employer the
amount of its contributions and any net earnings thereon.
18.7 EMPLOYMENT. Participation in the Plan shall not give any Participant
the right to be retained in the employ of the Employer or any other right
not specified herein.
18.8 GENDER. When necessary to the meaning hereof, and except when
otherwise indicated by the context, either the masculine or the neuter
pronoun shall be deemed to include the masculine, the feminine and the
neuter.
18.9 GOVERNING LAW. This Plan shall be governed and construed by the laws
of the United States of America. To the extent that the laws of the United
States of America shall not be held to have preempted local law, the Plan
shall be administered under the laws of the State of Maine.
18.10 ARTICLE AND SECTION HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings and Table of Contents are inserted for convenience of
reference and shall not be considered in the construction of the Plan.
IN WITNESS WHEREOF, Boney Wilson & Sons, Inc. and Hannaford Bros. Co. have
caused this document to be executed by their duly authorized officers on
this 24th day of May, 1995.
BONEY WILSON & SONS, INC.
By: s/Garrett D. Bowne, IV
Its Treasurer
HANNAFORD BROS. CO.
By: s/Blythe J. McGarvie
Its Senior Vice President &
Chief Financial Officer
<PAGE>
EXHIBIT A
SECTION 5.04 - WHEN BENEFITS START.
Benefits under the Plan begin when a Member retires, dies or ceases to be an
Employee, whichever applies, as provided in the preceding sections of this
article. Benefits which begin before Normal Retirement Date for a Member
who became Totally Disabled when he was an Employee shall be deemed to begin
because he is Totally Disabled. The start of benefits is subject to the
qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Member attains the earlier of (i) age 65 or (ii) the later
of Normal Retirement Age or age 62.
(b) The tenth anniversary of the Member's Entry Date.
(c) The date the Member ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Member and spouse to consent
to a distribution while a benefit is immediately distributable, within the
meaning of Section 6.03, shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this section.
The Member may elect to have benefits begin after the latest date for
beginning benefits described above, subject to the following provisions of
this section. The Member shall make the election in writing and deliver the
signed election to the Plan Administrator before Normal Retirement Date or
the date he ceases to be an Employee, if later. The election must describe
the form of distribution and the date benefits will begin. The Member shall
not elect a date for beginning benefits or a form of distribution which
would result in a benefit payable when he dies which would be more than
incidental within the meaning of governmental regulations.
Benefits shall begin by the Member's Required Beginning Date, as defined in
Section 6.02. Distribution of the Vested Account resulting from
Contributions made after the Member's Required Beginning Date shall begin by
the April 1 following the calendar year in which such Contributions were
made.
If a Member receives a taxable distribution (including a withdrawal) of any
part of his Vested Account, he may be subject to a Federal tax penalty. The
tax penalty does not apply if the distribution is:
(a) made on or after age 59 1/2;
(b) made on account of the Member's death to his Beneficiary or estate;
(c) made on account of being disabled;
<PAGE>
(d) part of a series of periodic payments after separation from service
that are substantially equal, at least annual, and based on the life
expectancy of the Member or the Member and his Beneficiary; or
(e) made after separation from service after the attainment of age 55.
In addition, no tax is imposed on amounts received and paid during the
taxable year for medical expenses in an amount not to exceed that deducible
under Code Section 213. Disabled means that a Member is disabled to the
extent he is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or be of long-continued and indefinite duration.
Proof of the existence of the disability will be in such form and manner as
the Secretary of the Treasury may require.
Contributions which are used to compute the Actual Deferral Percentage, as
defined in Section 3.07, (Elective Deferral Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions) may be
distributed upon disposition by us of substantially all of the assets used
by us in a trade or business disposition by us of our interest in a
subsidiary if the transferee corporation is not a Controlled Group member,
the Employee continues employment with the transferor corporation and the
transferor corporation continues to maintain the Plan. The distribution
must be a total distribution.
ARTICLE VI
DISTRIBUTION OF BENEFITS
The provisions of this article shall apply on or after August 23, 1984, to
any Member who is credited with at least one Hour of Service or one hour of
paid leave on or after that date and to such other Members as provided in
Section 6.05. If the Effective Date of our Plan is before January 1, 1984,
the provisions of the Prior Plan as in effect on the day before the TEFRA
Compliance Date shall apply before August 23, 1984. If the Effective Date
of our Plan is on or after January 1, 1984, and before August 23, 1984, the
provisions of the Plan as originally adopted shall apply before August 23,
1984.
SECTION 6.01 - AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see Section 6.03), the automatic form of benefit
payable to or on behalf of a Member is determined as follows:
(a) The automatic form of retirement benefit for a Member who does not die
before his Annuity Starting Date shall be the Qualified Joint and Survivor
Form.
<PAGE>
(b) The automatic form of death benefit for a Member who dies before his
Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Member who has a
spouse to whom he has been continuously married throughout the one-year
period ending on the date of his death. The spouse may elect to start
receiving the death benefit on any first day of the month on or after the
Member dies and by the date the Member would have been age 70 1/2. If the
spouse dies before benefits start, the Member's Vested Account, determined
as of the date of the spouse's death, shall be paid to the spouse's
Beneficiary.
(2) A single sum payment to the Member's Beneficiary for a Member who does
not have a spouse who is entitled to a Qualified Preretirement Survivor
Annuity.
Before a death benefit will be paid on account of the death of a Member who
does not have a spouse who is entitled to a Qualified Preretirement Survivor
Annuity, it must be established to the satisfaction of a plan representative
that the Member does not have such a spouse.
SECTION 6.02 - OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and Last Survivor
Expectancy) calculated using the attained age of the Member (or Designated
Beneficiary) as of the Member's (or Designated Beneficiary's) birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date Life Expectancy was first calculated. If Life
Expectancy is being recalculated, the Applicable Life Expectancy shall be
the Life Expectancy so recalculated. The applicable calendar year shall be
the first Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
Designated Beneficiary means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9) and the
regulations thereunder.
Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the Member's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Member's Required Beginning
Date. For distributions beginning after the Member's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to (e) below.
Joint and Last Survivor Expectancy means joint and last survivor expectancy
computed by use of the expected return multiples in Tables V and Vi of
section 1.72-9 of the Income Tax Regulations.
<PAGE>
Unless otherwise elected by the Member (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Member (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated.
Life Expectancy means life expectancy computed by use of the expected return
multiples in Tables V and VI of section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Member (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Member (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated.
Member's Benefit means
(1) The Account balance as of the last valuation date in the calendar year
immediately preceding the Distribution Calendar Year (valuation calendar
year) increased by the amount of any contributions or forfeitures allocated
to the Account balance as of the dates in the valuation calendar year after
the valuation date and decreased by distributions made in the valuation
calendar year after the valuation date.
(2) For purposes of (1) above, if any portion of the minimum distribution
for the first Distribution Calendar Year is made in the second Distribution
Calendar Year on or before the Required Beginning Date, the amount of the
minimum distribution made in the second Distribution Calendar Year shall be
treated as if it had been made in the immediately preceding Distribution
Calendar Year.
Required Beginning Date means, for a Member, the first day of April of the
calendar year following the calendar year in which the Member attains age 70
1/2, unless otherwise provided in (1), (2) or (3) below:
(1) The Required Beginning Date for a Member who attains age 70 1/2 before
January 1, 1988, and who is not a 5-percent owner is the first day of April
of the calendar year following the calendar year in which the later of
retirement or attainment of age 70 1/2 occurs.
(2) The Required Beginning Date for a Member who attains age 70 1/2 before
January 1, 1988, and who is a 5-percent owner is the first day of April of
the calendar year following the later of
(i) the calendar year in which the Member attains age 70 1/2, or
<PAGE>
(ii) the earlier of the calendar year with or within which ends the Plan
Year in which the Member becomes a 5-percent owner, or the calendar year in
which the Member retires.
(3) The Required Beginning Date of a Member who is not a 5-percent owner
and who attains age 70 1/2 during 1988 and who has not retired as of January
1, 1989, is April 1, 1990.
A Member is treated as a 5-percent owner for purposes of this section if
such Member is a 5-percent owner as defined in Code Section 416(i)
(determined in accordance with Code Section 416 but without regard to
whether the Plan is top-heavy) at any time during the Plan Year ending with
or within the calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this section, they
must continue to be distributed, even if the Member ceases to be a 5-percent
owner in a subsequent year.
(b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of five,
ten, or fifteen years; a single life annuity with installment refund;
survivorship life annuities with installment refund and survivor percentages
of 50, 66 2/3, or 100; fixed period annuities for any period of whole months
which is not less than sixty and does not exceed the Life Expectancy of the
Member and the named Beneficiary as provided in (d) below where the Life
Expectancy is not recalculated: and a series of installments chosen by the
Member with a minimum payment each year beginning with the year the Member
turns age 70 1/2. The payment for the first year in which a minimum payment
is required will be made by April 1 of the following calendar year. The
payment for the second year and each successive year will be made by
December 31 of that year. The minimum payment will be based on a period
equal to the Joint and Last Survivor Expectancy of the Member and the
Member's spouse, if any, as provided in (d) below where the Joint and Last
Survivor Expectancy is recalculated. The balance of the Member's Vested
Account if any, will be payable on the Member's death to his Beneficiary in
a single sum. If not prohibited in Item Y of the Adoption Agreement - Plus,
a single sum payment is also available.
Election of an optional form is subject to the qualified election provisions
of Article VI.
Any annuity contract distributed shall be nontransferable. The terms of any
annuity contract purchased and distributed by the Plan to a Member or spouse
shall comply with the requirements of this Plan.
(c) The optional forms of death benefit are a single sum payment and any
annuity that is an optional form of retirement benefit. However, a series
of installments shall not be available if the Beneficiary is not the spouse
of the deceased Member.
<PAGE>
(d) Subject to Section 6.01, joint and survivor annuity requirements, the
requirements of this section shall apply to any distribution of a Member's
interest and will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of this section apply to
calendar years beginning after December 31, 1984.
All distributions required under this section shall be determined and made
in accordance with the proposed regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Member must be distributed or begin to be
distributed no later than the Member's Required Beginning Date.
As of the first Distribution Calendar Year, distributions, if not made in a
single sum, may only be made over one of the following periods (or
combination thereof):
(1) the life of the Member,
(2) the life of the Member and a Designated Beneficiary.
(3) a period certain not extending beyond the Life Expectancy of the
Member, or
(4) a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Member and a Designated Beneficiary.
If the Member's interest is to be distributed in other than a single sum,
the following minimum distribution rules shall apply on or after the
Required Beginning Date:
(5) Individual account:
(i) If a Member's Benefit is to be distributed over
(A) a period not extending beyond the Life Expectancy of the Member or the
Joint Life and Last Survivor Expectancy of the Member and the Member's
Designated Beneficiary or
(B) a period not extending beyond the Lite Expectancy of the Designated
Beneficiary,
the amount required to be distributed for each calendar year beginning with
the distributions for the first Distribution Calendar Year, must be at least
equal to the quotient obtained by dividing the Member's Benefit by the
Applicable Life Expectancy.
<PAGE>
(ii) For calendar years beginning before January 1, 1989, if the Member's
spouse is not the Designated Beneficiary, the method of distribution
selected must assure that at least 50% of the present value of the amount
available for distribution is paid within the Life Expectancy of the Member.
(iii) For calendar year beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
Distribution Calendar Year shall not be less than the quotient obtained by
dividing the Member's Benefit by the lesser of
(A) the Applicable Life Expectancy or
(B) if the Member's spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4 of section
1.401(a)(9)-2 of the proposed regulations.
Distributions after the death of the Member shall be distributed using the
Applicable Life Expectancy in (5)(i)above as the relevant divisor without
regard to Proposed Regulations section 1.401(a)(9)-2.
(iv) The minimum distribution required for the Member's first Distribution
Calendar Year must be made on or before the Member's Required Beginning
Date. The minimum distribution for the Distribution Calendar Year for other
calendar years, including the minimum distribution for the Distribution
Calendar Year in which the Member's Required Beginning Date occurs, must be
made on or before December 31 of that Distribution Calendar Year.
(6) Other forms:
(i) If the Member's Benefit is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder shall be made
in accordance with the requirements of Code Section 401(a)(9) and the
proposed regulations thereunder
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Member dies after
distribution of his interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the
method of distribution being used prior to the Member's death.
(2) Distribution beginning after death. If the Member dies before
distribution of his interest begins, distribution of the Member's entire
interest shall be completed by December 31 of the calendar year containing
the fifth anniversary of the Member's death except to the extent that an
election is made to receive distributions in accordance with (i) or (ii)
below.
<PAGE>
(i) if any portion Of the Member's interest is payable to a Designated
Beneficiary, distributions may be made over the life or over a period
certain not greater than the Life Expectancy of the Designated Beneficiary
commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Member died;
(ii) if the Designated Beneficiary is the Member's surviving spouse, the
date distributions are required to begin in accordance with (i) above shall
not be earner than the later of
(A) December 31 of the calendar year immediately following the calendar
year in which the Member died and
(B) December 31 of the calendar year in which the Member would have
attained age 70 1/2.
If the Member has not made an election pursuant to this (e)(2) by the time
of his death, the Member's Designated Beneficiary must elect the method of
distribution no later than the earlier of
(iii) December 31 of the calendar year in which distributions would be
required to begin under this subparagraph, or
(iv) December 31 of the calendar year which contains the fifth anniversary
of the date of death of the Member.
If the Member has no Designated Beneficiary, or if the Designated
Beneficiary does not elect a method of distribution, distribution of the
Member's entire interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Member's death.
(3) For purposes of (e)(2) above, if the surviving spouse dies after the
Member, but before payments to such spouse begin, the provisions of (e)(2)
above, with the exception of (e)(2)(ii) therein, shall be applied as if the
surviving spouse were the Member.
(4) For purposes of this (e), any amount paid to a child of the Member will
be treated as if it had been paid to the surviving spouse if the amount
becomes payable to the surviving spouse when the child reaches the age of
majority.
(5) For purposes of this (e), distribution of a Member's interest is
considered to begin on the Member's Required Beginning Date (or if (e)(3)
above is applicable, the date distribution is required to begin to the
surviving spouse pursuant to (e)(2) above). If distribution in the form of
an annuity irrevocably commences to the Member before the Required Beginning
Date, the date distribution is considered to begin is the date distribution
actually commences.
<PAGE>
SECTION 6.03 - ELECTION PROCEDURES.
The Member, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made.
Any election permitted under (a) and (b)below shall be subject to the
qualified election provisions of (c) below.
(a) Retirement Benefits. A Member may elect his Beneficiary or Contingent
Annuitant and may elect to have retirement benefits distributed under any of
the optional forms of retirement benefit described in Section 6.02.
(b) Death Benefits. A Member may elect his Beneficiary and may elect to
have death benefits distributed under any of the optional forms of death
benefit described in Section 6.02.
If the Member has not elected an optional form of distribution for the death
benefit payable to his Beneficiary, the Beneficiary may, for his own benefit
elect the form of distribution, in like manner as a Member.
The Member may waive the Qualified Preretirement Survivor Annuity by naming
someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in Section
6.01, the spouse may, for his own benefit waive the Qualified Preretirement
Survivor Annuity by electing to have the benefit distributed under any of
the optional forms of death benefit described in Section 6.02.
(c) Qualified Election. The Member, Beneficiary or spouse may make an
election at any time during the election period. The Member, Beneficiary,
or spouse may revoke the election made (or make a new election) at any time
and any number of times during the election period. An election is
effective only if it meets the consent requirements below.
The election period as to retirement benefits is the 90-day period ending on
the Annuity Starting Date. An election to waive the Qualified Joint and
Survivor Form may not be made before the date he is provided with the notice
of the ability to waive the Qualified Joint and Survivor Form. If the
Member elects the series of installments, he may elect on any later date to
have the balance of his Vested Account paid under any of the optional forms
of retirement benefit available under the Plan. His election period for
this election is the 90-day period ending on the Annuity Starting Date for
the optional form of retirement benefit elected.
A Member may make an election as to death benefits at any time before he
dies. The spouse's election period begins on the date the Member dies and
ends on the date benefits begin. The Beneficiary's election period begins
on the date the Member dies and ends on the date benefits begin. An
<PAGE>
election to waive the Qualified Preretirement Survivor Annuity may not be
made by the Member before the date he is provided with the notice of the
ability to waive the Qualified Preretirement Survivor Annuity. A Member's
election to waive the Qualified Preretirement Survivor Annuity which is made
before the first day of the Plan Year in which he reaches age 35 shall
become invalid on such date. An election made by a Member after he ceases
to be an Employee will not become invalid on the first day of the Plan Year
in which he reaches age 35 with respect to death benefits from that part of
his Account resulting from Contributions made before he ceased to be an
Employee.
If the Member's Vested Account has at any time exceeded $3,500, any benefit
which is (1) immediately distributable or (2) payable in a form other than a
Qualified Joint and Survivor Form or a Qualified Preretirement Survivor
Annuity requires the consent of the Member and the Member's spouse (or where
either the Member or the spouse has died, the survivor). The consent of the
Member or spouse to a benefit which is immediately distributable must not be
made before the date the Member or spouse is provided with the notice of the
ability to defer the distribution. Such consent shall be made in writing.
The consent shall not be made more than 90 days before the Annuity Starting
Date. Spousal consent is not required for a benefit which is immediately
distributable in a Qualified Joint and Survivor Form. Furthermore, if
spousal consent is not required because the Member is electing an optional
form of retirement benefit that is not a life annuity pursuant to (d) below,
only the Member need consent to the distribution of a benefit payable in a
form that is not a life annuity and which is immediately distributable.
Neither the consent of the Member nor the Member's spouse shall be required
to the extent that a distribution is required to satisfy Code Section
401(a)(9) or Code Section 415. In addition, upon termination of this Plan
if the Plan does not offer an annuity option (purchased from a commercial
provider), the Member's Account balance may, without the Member's consent be
distributed to the Member or transferred to another defined contribution
plan (other than an employee stock ownership plan as defined in Code Section
4975(e)(7)) within the same Controlled Group. A benefit is immediately
distributable if any part of the benefit could be distributed to the Member
(or surviving spouse) before the Member attains (or would have attained if
not deceased) the older of Normal Retirement Age or age 62. If the
Qualified Joint and Survivor Form is waived, the spouse has the right to
limit consent only to a specific Beneficiary or a specific form of benefit
The spouse can relinquish one or both such rights. Such consent shall be
made in writing. The consent shall not be made more than 90 days before the
Annuity Starting Date. If the Qualified Preretirement Survivor Annuity is
waived, the spouse has the right to limit consent only to a specific
Beneficiary. Such consent shall be in writing. The spouse's consent shall
be witnessed by a plan representative or notary public. The spouse's
consent must acknowledge the effect of the election, including that the
spouse had the right to limit consent only to a specific Beneficiary or a
specific form of benefit, if applicable, and that the relinquishment of one
<PAGE>
or both such rights was voluntary. Unless the consent of the spouse
expressly permits designations by the Member without a requirement of
further consent by the spouse, the spouse's consent must be limited to the
form of benefit, if applicable, and the Beneficiary (including any
Contingent Annuitant), class of Beneficiaries, or contingent Beneficiary
named in the election. Spousal consent is not required. however, if the
Member establishes to the satisfaction of the plan representative that the
consent of the spouse cannot be obtained because there is no spouse or the
spouse cannot be located. A spouse's consent under this paragraph shall not
be valid with respect to any other spouse. A Member may revoke a prior
election without the consent of the spouse. Any new election will require a
new spousal consent, unless the consent of the spouse expressly permits such
election by the Member without further consent by the spouse. A spouse's
consent may be revoked at any time within the Member's election period.
Before the first Yearly Date in 1989, the Member's Account which results
from deductible Voluntary Contributions shall not be taken into account in
determining whether the Member's Vested Account has exceeded $3,500 and an
election as to the distribution of a Member's Vested Account which results
from deductible Voluntary Contributions is not subject to the consent
requirements above and may be made any time before such distribution is to
begin.
(d) Special Rule for Profit Sharing Plans. As provided in the preceding
provisions of the Plan, if a Member has a spouse to whom he has been
continuously married throughout the one-year period ending on the date of
the Member's death, the Member's Vested Account, including the proceeds
payable under any Insurance Policy on the Member's life, shall be paid to
such spouse. However, if there is no such spouse or if the surviving spouse
has already consented in a manner conforming to the qualified election
requirements in (c) above, the Vested Account shall be payable to the
Member's Beneficiary in the event of the Member's death.
The Member may waive the spousal death benefit described above at any time
provided that no such waiver shall be effective unless it satisfies the
conditions of (c) above (other than the notification requirement referred to
therein) that would apply to the Member's waiver of the Qualified
Preretirement Survivor Annuity.
This subsection (d) applies if with respect to the Member, the Plan is not a
direct or indirect transferee after December 31, 1984, of a defined benefit
plan, money purchase plan (including a target plan), stock bonus or profit
sharing plan which is subject to the survivor annuity requirements of Code
Section 401(a)(11) and Code Section 417. If the above condition is met
spousal consent is not required for electing an optional form of retirement
benefit that is not a life annuity. If the above condition is not met. the
consent requirements of this Article shall be operative.
<PAGE>
SECTION 6.04 - NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Member and the Member's spouse a written explanation of the
optional forms of retirement benefit in Section 6.02, including the material
features and relative values of these options, in a manner that would
satisfy the notice requirements of Code Section 417(a)(3) and the right of
the Member and the Member's spouse to defer distribution until the benefit
is no longer immediately distributable. The Plan Administrator shall
furnish the written explanation by a method reasonably calculated to reach
the attention of the Member and the Member's spouse no less than 30 days and
no more than 90 days before the Annuity Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Member a written explanation of the following: the terms and
conditions of the Qualified Joint and Survivor Form; the Member's right to
make, and the effect of, an election to waive the Qualified Joint and
Survivor Form; the rights of the Member's spouse; and the right to revoke an
election and the effect of such a revocation. The Plan Administrator shall
furnish the written explanation by a method reasonably calculated to reach
the attention of the Member no less than 30 days and no more than 90 days
before the Annuity Starting Date.
After the written explanation is given, a Member or spouse may make written
request for additional information. The written explanation must be
personally delivered or mailed (first class mail, postage prepaid) to the
Member or spouse within thirty days from the date of the written request The
Plan Administrator does not need to comply with more than one such request
by a Member or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified Joint
and Survivor Form and the financial effect upon the Member's benefit (in
terms of dollars per benefit payment) of electing not to have benefits
distributed in accordance with the Qualified Joint and Survivor Form.
(c) Qualified Preretirement Survivor Annuity. The Plan Administrator shall
furnish to the Member a written explanation of the following: the terms and
conditions of the Qualified Preretirement Survivor Annuity; the Member's
right to make, and the effect of, an election to waive the Qualified
Preretirement Survivor Annuity; the rights of the Member's spouse; and the
right to revoke an election and the effect of such a revocation. The Plan
Administrator shall furnish the written explanation by a method reasonably
calculated to reach the attention of the Member within the applicable
period. The applicable period for a Member is whichever of the following
periods ends last:
(1) the period beginning one year before the date the individual becomes a
Member and ending one year after such date; or
<PAGE>
(2) the period beginning one year before the date the Member's spouse is
first entitled to a Qualified Preretirement Survivor Annuity and ending one
year after such date.
If such notice is given before the period beginning with the first day of
the Plan Year in which the Member attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the Member attains age 35,
an additional notice shall be given within such period. If a Member ceases
to be an Employee before attaining age 35, an additional notice shall be
given within the period beginning one year before the date he ceases to be
an Employee and ending one year after such date.
After the written explanation is given, a Member or spouse may make written
request for additional information. The written explanation must be
personally delivered or mailed (first class mail, postage prepaid) to the
Member or spouse within thirty days from the date of the written request.
The Plan Administrator does not need to comply with more than one such
request by a Member or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Preretirement Survivor Annuity and the financial effect upon the spouse's
benefit (in terms of dollars per benefit payment) of electing not to have
benefits distributed in accordance with the Qualified Preretirement Survivor
Annuity.
SECTION 6.05 - TRANSITIONAL RULES.
In modification of the preceding provisions of this Plan, distributions
(including distributions to a five-percent owner of us) may be made in a
form which would not have caused this Plan to be disqualified under Code
Section 401(a)(9) as in effect before the TEFRA Compliance Date. The form
must be elected by the Member or, if the Member has died, by the
Beneficiary. The election must be made in writing and signed before January
1, 1984. The election will only be applicable if the Member has an Account
as of December 31, 1983. The Member's or Beneficiary's election must
specify when the distribution is to begin, the form of distribution and the
Contingent Annuitant and/ or Beneficiaries listed in the order of priority,
if applicable. A distribution upon death will not be covered by this
transitional rule unless the election contains the required information
described above with respect to the distributions to be made when the Member
dies. Distributions in the process of payment on January 1, 1984, are
deemed to meet the above requirements if the form of distribution was
elected in writing and the form met the requirements of Code Section
401(a)(9) as in effect before the TEFRA Compliance Date. If the election
under this paragraph is revoked, any subsequent distribution must meet the
requirements of Code Section 401(a)(9) and the proposed regulations
thereunder. If an election is revoked subsequent to the date distributions
<PAGE>
are required to begin, the Plan must distribute by the end of the calendar
year following the calendar year in which the revocation occurs the total
amount not yet distributed which would have been required to have been
distributed to satisfy Code Section 401(a)(9) and the proposed regulations
thereunder, but for the Code Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distribution must meet the minimum
distribution incidental benefit requirements in section 1.401(a)(9)-2 of the
proposed regulations. Any changes in the election will be considered a
revocation of the election. However, the mere substitution or addition of
another Beneficiary (one not named in the election) under the election will
not be considered to be a revocation of the election, so long as such
substitution or addition does not alter the period over which distributions
are to be made under the election, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the rules in Q&A
J-2 and Q&A J-3 of section 1.401(a)(9)-1 of the proposed regulations shall
apply. A Member's election of an optional form of retirement benefit shall
be subject to his spouse's consent as provided in Section 6.03.
A Member, who would not otherwise receive the benefits prescribed by the
previous sections of this article, will be entitled to the following
benefits:
(a) If he is living and not receiving benefits on August 23, 1984, he will
be given the opportunity to elect to have the prior sections of this article
apply, if he is credited with at least one Hour of Service under this Plan
or a predecessor plan in a plan year beginning on or after January 1, 1976,
and he had at least ten Years of Service when he separated from service.
(b) If he is living and not receiving benefits on August 23, 1984 he will
be given the opportunity to elect to have his benefits paid according to the
following provisions of this section, if he is credited with at least one
Hour of Service under this Plan or a predecessor plan on or after September
2, 1974, and he is not credited with any service in a plan year beginning on
or after January 1, 1976.
The respective opportunities to elect (as described in (a) and (b) above)
must be afforded to the appropriate Members during the period beginning on
August 23, 1984, and ending on the date benefits would otherwise begin to
such Member.
Any Member who has elected according to (b) above and any member who does
not elect under (a) above or who meets the requirements of (a) above except
that such Member does not have at least ten Years of Service when he
separated from service, shall have his benefits distributed in accordance
with the following if benefits would have been payable in the form of a life
annuity:
<PAGE>
(c) Automatic joint and survivor annuity. If benefits in the form of a
life annuity become payable to a married Member who:
(1) begins to receive payments under the Plan on or after Normal Retirement
Age; or
(2) dies on or after Normal Retirement Age while still working for us; or
(3) begins to receive payments on or after the qualified early retirement
age; or
(4) separates from service on or after attaining Normal Retirement Age (or
the qualified early retirement age) and after satisfying the eligibility
requirements for the payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be paid under the Qualified Joint and Survivor Form,
unless the Member has elected otherwise during the election period. The
election period must begin at least six months before the Member attains
qualified early retirement age and end not more than 90 days before benefits
begin. Any election hereunder will be in writing and may be changed by the
Member at any time.
(d) Election of early survivor annuity. A Member who is employed after
attaining the qualified early retirement age will be given the opportunity
to elect, during the election period, to have a Qualified Preretirement
Survivor Annuity payable on death. Any election under this provision will
be in writing and may be changed by the Member at any time. The election
period begins on the later of (1) the 90th day before the Member attains the
qualified early retirement age, or (2) the Member's Entry Date, and ends on
the date the Member terminates employment.
(e) For purposes of this paragraph, qualified early retirement age is the
latest of:
(1) the earliest date, under the Plan, on which the Member may elect to
receive retirement benefits,
(2) the first day of the 120th month beginning before the Member reaches
Normal Retirement Age, or
(3) the Member's Entry Date.
Exhibit 5
VERRILL & DANA
Attorneys at Law
ONE PORTLAND SQUARE
P.O. BOX 586
PORTLAND, MAINE 04112-0586
(207) 774-4000
Facsimile (207) 774-7499
June 8, 1995
Hannaford Bros. Co.
145 Pleasant Hill Road
Scarborough, Maine 04074
Re: HANNAFORD SOUTHEAST SAVINGS AND INVESTMENT
PLAN -- REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") of Hannaford Bros. Co., a Maine corporation (the "Company"),
relating to the Hannaford Southeast Savings and Investment Plan (the "Plan")
and 500,000 shares (the "Shares") of the Company's Common Stock, par value
$.75 per share, proposed to be issued and sold by the Company in connection
therewith. It is our understanding that the Registration Statement is to be
filed with the Securities and Exchange Commission on or about June 9, 1995.
We have examined the originals, or photostatic or certified copies, of
such records and certificates of the Company, such certificates of public
officials and of officers of the Company, and such other documents as we have
deemed relevant. In such examination we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies, and the authenticity of the originals of such
copies. We have also assumed the accuracy and completeness of statements of
fact contained in such documents.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and, when issued and paid for in accordance
with the terms of the Plan, will be validly issued, fully paid, and non-
assessable.
We consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section
7 of the Securities Act of 1933 or the General Rules and Regulations of the
Securities and Exchange Commission.
Very truly yours,
s/Verrill & Dana
Exhibit 15
Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Hannaford Southeast Savings and Investment Plan
Registration on Form S-8
We are aware that our report dated April 20, 1995, on our review of interim
financial information of Hannaford Bros. Co. and Subsidiaries as of April 1,
1995 and for the three month periods ended April 1, 1995 and April 2, 1994,
and included in Form 10-Q for the quarter then ended is incorporated by
reference in this registration statement. Pursuant to rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of this
registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
s/Coopers & Lybrand L.L.P.
Portland, Maine
June 7, 1995
