As filed with the Securities and Exchange Commission on September 23, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CIRCLE INTERNATIONAL GROUP, INC.
(Exact name of issuer as specified in its charter)
Delaware 94-1740320
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
260 Townsend Street, San Francisco, California 94107-0933
(Address of principal executive offices) (Zip Code)
CIRCLE INTERNATIONAL GROUP SAVINGS PLAN
(Full title of the plan)
Peter Gibert
Circle International Group, Inc.
260 Townsend Street, San Francisco, California 94107-0933
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (415) 978-0600
Copy to:
Robert H. Kennis, Esq.
Circle International Group, Inc.
260 Townsend Street, San Francisco, California 94107-0933
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate
to be to be Price Offering Amount of
Registered Registered Per Share* Price* Registration
- --------------------------------------------------------------------------------
Common Stock 100,000 shares $19.828125 $1,981,250 $585.00
================================================================================
* Estimated solely for the purpose of calculating the registration fee on the
basis of $19.828125, the average of the high and low prices for the Common Stock
on September 22, 1998 as reported by NASDAQ.
** In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
<PAGE>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this registration
statement: (i) the Annual Report on Form 10-K for The Circle International
Group, Inc. (the "Company") for the fiscal year ended December 31, 1997 filed
pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); (ii) all reports filed by the Company pursuant to
Sections 13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by such Form 10-K; and (iii) the description of the Company's common
stock set forth in the Company's Registration Statement on Form 8-A relating
thereto, including any amendment or report filed for the purpose of updating
such description. All documents filed by the Company after the date of this
registration statement pursuant to Sections 13(a), 13(c), 14, and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment (that indicates
all securities offered have been sold or deregisters all securities then
remaining unsold), shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SIXTH of the Company's Certificate of Incorporation provides that
directors of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director, to
the fullest extent permitted by the General Corporation Law of the State of
Delaware (the "DGCL").
Article V of the Company's Bylaws provides for indemnification of officers and
directors to the full extent and in the manner permitted by Delaware law.
Section 145 of the DGCL makes provision for such indemnification in terms
sufficiently broad to cover officers and directors under certain circumstances
for liabilities arising under the Securities Act of 1933.
The Company has entered into indemnification agreements with each director and
officer which provide indemnification under certain circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
2
<PAGE>
ITEM 8. EXHIBITS
4.1 Circle International Group Savings Plan, as amended.
5.1 Undertaking re Status of Favorable Determination Letter Covering the Plan.
Circle International Group, Inc. (the "Company") will submit the Circle
International Group Savings Plan (the "Plan") to the Internal Revenue
Service (the "IRS") with a request for a favorable determination that the
Plan qualifies under section 401(a) and related provisions of the Internal
Revenue Code of 1986, as amended, and to make such changes to the Plan
required by the IRS in order to receive such favorable determination.
5.2 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Independent Auditors.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is included in Exhibit 5.2.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act 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 the
Plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4
<PAGE>
Signatures
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California on the 24th day of
August, 1998.
Circle International Group, Inc.
(Registrant)
/s/ Peter Gibert
- ------------------------------------
Peter Gibert
Chairman of the Board of Directors,
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
dates indicated.
Signature Title Date
Principal Executive Officer:
/s/ Peter Gibert
- ------------------------------------
Peter Gibert Chairman of the August 24, 1998
Board of Directors
Principal Financial Officer and
Accounting Officer:
/s/ Janice Kerti
- ------------------------------------
Janice Kerti Senior Vice President, August 24, 1998
Chief Financial Officer
5
<PAGE>
Directors:
/s/ David I. Beatson
- ------------------------------------
David I. Beatson Director August 24, 1998
/s/ Wesley J. Fastiff
- ------------------------------------
Wesley J. Fastiff Director August 24, 1998
/s/ Peter Gibert
- ------------------------------------
Peter Gibert Director August 24, 1998
/s/ Edwin J. Holman
- ------------------------------------
Edwin J. Holman Director August 24, 1998
/s/ John M. Kaiser
- ------------------------------------
John M. Kaiser Director August 24, 1998
/s/ John M. Lillie
- ------------------------------------
John M. Lillie Director August 24, 1998
/s/ Ray C. Robinson, Jr.
- ------------------------------------
Ray C. Robinson, Jr. Director August 24, 1998
/s/ Frank J. Wezniak
- ------------------------------------
Frank J. Wezniak Director August 24, 1998
A majority of the members of the Board of Directors.
6
<PAGE>
THE PLAN
Pursuant to the requirements of the Securities Act of 1933, the Plan has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Francisco, State of
California, on the 24th day of August, 1998.
CIRCLE INTERNATIONAL GROUP SAVINGS PLAN
Signature Title Date
/s/ Robert H. Kennis Member of the August 24, 1998
- ------------------------------------
Robert H. Kennis Savings Plan Committee
/s/ Rae Fawcett Member of the August 24, 1998
- ------------------------------------
Rae Fawcett Savings Plan Committee
/s/ Janice Kerti Member of the August 24, 1998
- ------------------------------------
Janice Kerti Savings Plan Committee
/s/ Mark R. Kailor Member of the August 24, 1998
- ------------------------------------
Mark R. Kailor Savings Plan Committee
/s/ Gary VanNostern Member of the August 24, 1998
- ------------------------------------
Gary VanNostern Savings Plan Committee
/s/ Randy T. Clark Member of the August 24, 1998
- ------------------------------------
Randy T. Clark Savings Plan Committee
A majority of the members of the Savings Plan Committee for the Circle
International Group Savings Plan.
7
<PAGE>
EXHIBIT INDEX
4.1 Circle International Group Savings Plan, as amended.
5.1 Undertaking re Status of Favorable Determination Letter Covering the Plan
(See Item 8 of this Registration Statement).
5.2 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Independent Auditors.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is included in Exhibit 5.1.
8
<PAGE>
Exhibit 4.1
The Harper Group Savings Plan and Trust
As Amended and Restated Effective November 1, 1993
The Harper Group, Inc. previously established The Harper Group Profit Sharing
and Tax Shelter Investment Plan, as renamed effective November 1, 1993, The
Harper Group Savings Plan for the benefit of eligible employees of the Company
and its participating affiliates. The Plan is intended to constitute a qualified
profit sharing plan, as described in Code section 401(a), which includes a
qualified cash or deferred arrangement, as described in Code section 401(k).
The provisions of this Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between The Harper Group, Inc. and
Wells Fargo Bank, National Association. The Trust is intended to be tax exempt
as described under Code section 501(a).
The Plan constitutes an amendment and restatement of The Harper Group Profit
Sharing and Tax Shelter Investment Plan, as renamed effective November 1, 1993,
The Harper Group Savings Plan which was originally established effective as of
November 19, 1973, and its related trust agreement.
The Harper Group Savings Plan and Trust, as set forth in this document, is
hereby amended and restated effective as of November 1, 1993.
Date: , 19 The Harper Group, Inc.
-------------------------- ----
By:
-----------------------------------
Title:
------------------------------
The trust agreement set forth in those provisions of this Plan and Trust which
relate to the Trustee is hereby executed.
Date: , 19 Wells Fargo Bank, National Association
-------------------------- ----
By:
----------------------------------
Title:
-----------------------------
Date: , 19 Wells Fargo Bank, National Association
-------------------------- ----
By:
----------------------------------
Title:
-----------------------------
9
<PAGE>
TABLE OF CONTENTS
1 DEFINITIONS...........................................................14
-----------
2 ELIGIBILITY...........................................................22
-----------
2.1 Eligibility.....................................................22
2.2 Ineligible Employees............................................22
2.3 Ineligible or Former Participants...............................22
3 PARTICIPANT CONTRIBUTIONS.............................................23
-------------------------
3.1 Pre-Tax Contribution Election...................................23
3.2 Changing a Contribution Election................................23
3.3 Revoking and Resuming a Contribution Election...................23
3.4 Contribution Percentage Limits..................................23
3.5 Refunds When Contribution Dollar Limit Exceeded.................24
3.6 Timing, Posting and Tax Considerations..........................24
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS..................................25
------------------------------------
4.1 Rollovers.......................................................25
4.2 Transfers From Other Qualified Plans............................25
5 EMPLOYER CONTRIBUTIONS................................................26
----------------------
5.1 Company Match Contributions.....................................26
5.2 Profit Sharing Contributions....................................27
6 ACCOUNTING............................................................28
----------
6.1 Individual Participant Accounting...............................28
6.2 Sweep Account is Transaction Account............................28
6.3 Trade Date Accounting and Investment Cycle......................28
6.4 Accounting for Investment Funds.................................28
6.5 Payment of Fees and Expenses....................................28
6.6 Accounting for Participant Loans................................29
6.7 Error Correction................................................29
6.8 Participant Statements..........................................29
6.9 Special Accounting During Conversion Period.....................30
6.10 Accounts for QDRO Beneficiaries.................................30
7 INVESTMENT FUNDS AND ELECTIONS........................................31
------------------------------
7.1 Investment Funds................................................31
7.2 Investment Fund Elections.......................................31
7.3 Responsibility for Investment Choice............................31
7.4 Default if No Election..........................................31
7.5 Timing..........................................................32
7.6 Switching Fees..................................................32
10
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8 VESTING & FORFEITURES.................................................33
---------------------
8.1 Fully Vested Contribution Accounts..............................33
8.2 Full Vesting upon Certain Events................................33
8.3 Vesting Schedule................................................33
8.4 Forfeitures.....................................................33
8.5 Rehired Employees...............................................34
9 PARTICIPANT LOANS.....................................................35
-----------------
9.1 Participant Loans Permitted.....................................35
9.2 Loan Funding Limits.............................................35
9.3 Maximum Number of Loans.........................................35
9.4 Source of Loan Funding..........................................35
9.5 Interest Rate...................................................36
9.6 Repayment.......................................................36
9.7 Repayment Hierarchy.............................................36
9.8 Loan Application, Note and Security.............................36
9.9 Default, Suspension and Call Feature............................36
9.10 Spousal Consent.................................................37
10 IN-SERVICE WITHDRAWALS................................................38
----------------------
10.1 Hardship Withdrawals............................................38
10.2 Rollover Account Withdrawals....................................39
10.3 Over Age 70 1/2 Withdrawals.....................................40
10.4 Withdrawal Processing...........................................40
10.5 Spousal Consent.................................................41
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS....................................42
----------------------------------
11.1 Benefit Election................................................42
11.2 Payment Form and Medium.........................................42
11.3 Small Amounts Paid Immediately..................................43
11.4 Deemed Distribution.............................................43
11.5 Latest Commencement Permitted...................................43
11.6 Payment Within Life Expectancy..................................43
11.7 Incidental Benefit Rule.........................................43
11.8 Payment to Beneficiary..........................................43
11.9 Beneficiary Designation.........................................44
11.10 Spousal Consent.................................................44
12 ADP AND ACP TESTS.....................................................45
-----------------
12.1 Contribution Limitation Definitions.............................45
12.2 ADP and ACP Tests...............................................47
12.3 Correction of ADP and ACP Tests.................................48
12.4 Multiple Use Test...............................................48
12.5 Correction of Multiple Use Test.................................49
12.6 Adjustment for Investment Gain or Loss..........................49
12.7 Testing Responsibilities and Required Records...................49
12.8 Separate Testing................................................49
11
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13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS..........................50
--------------------------------------------
13.1 "Annual Addition" Defined.......................................50
13.2 Maximum Annual Addition.........................................50
13.3 Avoiding an Excess Annual Addition..............................50
13.4 Correcting an Excess Annual Addition............................50
13.5 Correcting a Multiple Plan Excess...............................50
13.6 "Defined Benefit Fraction" Defined..............................51
13.7 "Defined Contribution Fraction" Defined.........................51
13.8 Combined Plan Limits and Correction.............................51
14 TOP HEAVY RULES.......................................................52
---------------
14.1 Top Heavy Definitions...........................................52
14.2 Special Contributions...........................................53
14.3 Adjustment to Combined Limits for Different Plans...............53
15 PLAN ADMINISTRATION...................................................54
-------------------
15.1 Plan Delineates Authority and Responsibility....................54
15.2 Fiduciary Standards.............................................54
15.3 Company is ERISA Plan Administrator.............................54
15.4 Administrator Duties............................................54
15.5 Advisors May be Retained........................................55
15.6 Delegation of Administrator Duties..............................55
15.7 Committee Operating Rules.......................................56
16 MANAGEMENT OF INVESTMENTS.............................................57
-------------------------
16.1 Trust Agreement.................................................57
16.2 Investment Funds................................................57
16.3 Authority to Hold Cash..........................................57
16.4 Trustee to Act Upon Instructions................................58
16.5 Administrator Has Right to Vote Registered Investment
Company Shares..................................................58
16.6 Custom Fund Investment Management...............................58
16.7 Authority to Segregate Assets...................................59
16.8 Maximum Permitted Investment in Company Stock...................59
16.9 Participants Have Right to Vote and Tender Company Stock........59
16.10 Registration and Disclosure for Company Stock...................59
17 TRUST ADMINISTRATION..................................................60
--------------------
17.1 Trustee to Construe Trust.......................................60
17.2 Trustee To Act As Owner of Trust Assets.........................60
17.3 United States Indicia of Ownership..............................60
17.4 Tax Withholding and Payment.....................................60
17.5 Trustee Duties and Limitations..................................61
17.6 Trust Accounting................................................61
17.7 Valuation of Certain Assets.....................................61
17.8 Legal Counsel...................................................62
17.9 Fees and Expenses...............................................62
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18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION.....................63
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights..........................63
18.2 Limited Return of Contributions.................................63
18.3 Assignment and Alienation.......................................63
18.4 Facility of Payment.............................................64
18.5 Reallocation of Lost Participant's Accounts.....................64
18.6 Claims Procedure................................................64
18.7 Construction....................................................65
18.8 Jurisdiction and Severability...................................65
18.9 Indemnification by Employer.....................................65
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION.......................66
-----------------------------------------------
19.1 Amendment.......................................................66
19.2 Merger..........................................................66
19.3 Divestitures....................................................66
19.4 Plan Termination................................................67
19.5 Amendment and Termination Procedures............................67
19.6 Termination of Employer's Participation.........................68
19.7 Replacement of the Trustee......................................68
19.8 Final Settlement and Accounting of Trustee......................68
APPENDIX A - INVESTMENT FUNDS...............................................69
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES..............................71
APPENDIX C - LOAN INTEREST RATE.............................................72
Amendment No. 1.............................................................73
Amendment No. 2.............................................................76
Amendment No. 3.............................................................78
13
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1 DEFINITIONS
-----------
When capitalized, the words and phrases below have the following meanings
unless different meanings are clearly required by the context:
1.1 "Account". The records maintained for purposes of accounting for a
Participant's interest in the Plan. "Account" may refer to one or all
of the following accounts which have been created on behalf of a
Participant to hold specific types of Contributions under the Plan:
(a) "Pre-Tax Account". An account created to hold Pre-Tax
Contributions.
(b) "Rollover Account". An account created to hold Rollover
Contributions.
(c) "Company Match Account". An account created to hold Company
Match Contributions.
(d) "Profit Sharing Account". An account created to hold Profit
Sharing Contributions.
1.2 "ACP" or "Average Contribution Percentage". The percentage calculated
in accordance with Section 12.1.
1.3 "Administrator". The Company, which may delegate all or a portion of
the duties of the Administrator under the Plan to a Committee in
accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage calculated in
accordance with Section 12.1.
1.5 "Beneficiary". The person or persons who is to receive benefits after
the death of the Participant pursuant to the "Beneficiary Designation"
paragraph in Section 11, or as a result of a QDRO.
1.6 "Break in Service". The fifth anniversary (or sixth anniversary if
absence from employment was due to a Parental Leave) of the date on
which a Participant's employment ends.
1.7 "Code". The Internal Revenue Code of 1986, as amended. Reference to
any specific Code section shall include such section, any valid
regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such
section.
1.8 "Committee". If applicable, the committee which has been appointed by
the Company to administer the Plan in accordance with Section 15.6.
1.9 "Company". The Harper Group, Inc. or any successor by merger, purchase
or otherwise.
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1.10 "Company Stock". Shares of common stock of the Company, its
predecessor(s), or its successors or assigns, or any corporation with
or into which said corporation may be merged, consolidated or
reorganized, or to which a majority of its assets may be sold.
1.11 "Compensation". The sum of a Participant's Taxable Income and salary
reductions, if any, pursuant to Code sections 125, 402(e)(3), 402(h),
403(b), 414(h)(2) or 457.
For purposes of determining benefits under this Plan, Compensation is
limited to $200,000 (as indexed for the cost of living pursuant to
Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of
determining benefits under this Plan for Plan Years beginning after
December 31, 1993, Compensation is limited to $150,000 (as indexed for
the cost of living pursuant to Code sections 401(a)(17) and 415(d))
per Plan Year.
For purposes of the preceding sentences, in the case of an HCE who is
a 5% Owner or one of the 10 most highly compensated Employees, (i)
such HCE and such HCE's family group (as defined below) shall be
treated as a single employee and the Compensation of each family group
member shall be aggregated with the Compensation of such HCE, and (ii)
the limitation on Compensation shall be allocated among such HCE and
his or her family group members in proportion to each individual's
Compensation before the application of this sentence. For purposes of
this Section, the term "family group" shall mean an Employee's spouse
and lineal descendants who have not attained age 19 before the close
of the year in question.
For the purpose of determining HCEs and key employees, Compensation
for the entire Plan Year shall be used. For the purpose of determining
ADP and ACP, Compensation shall be limited to amounts paid to an
Eligible Employee while a Participant.
1.12 "Contribution". An amount contributed to the Plan by the Employer or
an Eligible Employee, and allocated by contribution type to
Participants' Accounts, as described in Section 1.1. Specific types of
contribution include:
(a) "Pre-Tax Contribution". An amount contributed by the Employer on
an eligible Participant's behalf in conjunction with a
Participant's Code section 401(k) salary deferral election.
(b) "Rollover Contribution". An amount contributed by an Eligible
Employee which originated from another employer's qualified plan.
(c) "Company Match Contribution". An amount contributed by the
Employer on an eligible Participant's behalf based upon the
amount contributed by the eligible Participant.
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(d) "Profit Sharing Contribution". An amount contributed by the
Employer on an eligible Participant's behalf and allocated on a
pay based formula to the Participant.
Effective January 1, 1994, an amount previously contributed by
the Employer on an eligible Participant's behalf and allocated on
a pay based formula to the Participant under former Plan
provisions, which continue to be accounted for in the Plan.
1.13 "Contribution Dollar Limit". The annual limit placed on each
Participant's Pre-Tax Contributions, which shall be $7,000 per
calendar year (as indexed for the cost of living pursuant to Code
section 402(g)(5) and 415(d)). For purposes of this Section, a
Participant's Pre-Tax Contributions shall include (i) any Employer
contribution made under any qualified cash or deferred arrangement as
defined in Code section 401(k) to the extent not includible in gross
income for the taxable year under Code section 402(e)(3) or
402(h)(1)(B) (determined without regard to Code section 402(g)), and
(ii) any Employer contribution to purchase an annuity contract under
Code section 403(b) under a salary reduction agreement (within the
meaning of Code section 3121(a)(5)(D)).
1.14 "Direct Rollover". A payment from the Plan to an Eligible Retirement
Plan specified by a Distributee.
1.15 "Disability". A Participant's total and permanent, mental or physical
disability resulting in termination of employment as evidenced by
presentation of medical evidence satisfactory to the Administrator.
1.16 "Distributee". An Employee or former Employee, the surviving spouse of
an Employee or former Employee and a spouse or former spouse of an
Employee or former Employee determined to be an alternate payee under
a QDRO.
1.17 "Effective Date". November 1, 1993, unless stated otherwise and except
that provisions related to Company Match Contributions and related
Accounts are effective January 1, 1994. The date upon which the
provisions of this document become effective. In general, the
provisions of this document only apply to Participants who are
Employees on or after the Effective Date. However, investment and
distribution provisions apply to all Participants with Account
balances to be invested or distributed after the Effective Date.
1.18 "Eligible Employee". An Employee of an Employer, except any Employee:
(a) who is treated as an Employee because he or she is a Leased
Employee
(b) who is a nonresident alien who (i) either receives no earned
income (within the meaning of Code section 911(d)(2)), from
sources within the United States under Code section 861(a)(3); or
(ii) receives such earned income from such sources within the
United States but such income is exempt from United States income
tax under an applicable income tax convention; or
(c) who is a summer student.
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1.19 "Eligible Retirement Plan". An individual retirement account described
in Code section 408(a), an individual retirement annuity described in
Code section 408(b), an annuity plan described in Code section 403(a),
or a qualified trust described in Code section 401(a), that accepts a
Distributee's Eligible Rollover Distribution, except that with regard
to an Eligible Rollover Distribution to a surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
1.20 "Eligible Rollover Distribution". A distribution of all or any portion
of the balance to the credit of a Distributee, excluding a
distribution that is (i) one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of a Distributee or the joint lives (or
joint life expectancies) of a Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or
more; (ii) a distribution to the extent such distribution is required
under Code section 401(a)(9); and (iii) the portion of a distribution
that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to Employer
securities).
1.21 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom any income
for such employment is subject to withholding of income or social
security taxes, or
(b) a Leased Employee.
1.22 "Employer". The Company and any Subsidiary or other Related Company of
either the Company or a Subsidiary which adopts this Plan with the
approval of the Company.
1.23 "ERISA". The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific section shall include such section,
any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or
superseding such section.
1.24 "Forfeiture Account". An account holding amounts forfeited by
Participants who have left the Employer, invested in interest bearing
deposits of the Trustee, pending disposition as provided in this Plan
and Trust and as directed by the Administrator.
1.25 "HCE" or "Highly Compensated Employee". An Employee described as a
Highly Compensated Employee in Section 12.
1.26 "Hour of Service". Each hour for which an Employee is entitled to:
(a) payment for the performance of duties for any Related Company;
17
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(b) payment from any Related Company for any period during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, sickness,
incapacity (including disability), layoff, leave of absence, jury
duty or military service;
(c) back pay, irrespective of mitigation of damages, by award or
agreement with any Related Company (and these hours shall be
credited to the period to which the agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these hours shall
be based upon his or her normally scheduled hours per week or a
40 hour week if there is no regular schedule).
The crediting of hours for which no duties are performed shall be in
accordance with Department of Labor regulation sections 2530.200b-2(b)
and (c). Actual hours shall be used whenever an accurate record of
hours are maintained for an Employee. Otherwise, an equivalent number
of hours shall be credited for each payroll period in which the
Employee would be credited with at least 1 hour. The payroll period
equivalencies are 45 hours weekly, 90 hours biweekly, 95 hours
semimonthly and 190 hours monthly.
An Employee's service with a predecessor or acquired company shall
only be counted in the determination of his or her Hours of Service
for eligibility and/or vesting purposes if (1) the Company directs
that credit for such service be granted, or (2) a qualified plan of
the predecessor or acquired company is subsequently maintained by any
Employer or Related Company.
1.27 "Ineligible". The Plan status of an individual during the period in
which he or she is (1) an Employee of a Related Company which is not
then an Employer, (2) an Employee, but not an Eligible Employee, or
(3) not an Employee.
1.28 "Investment Fund" or "Fund". An investment fund as described in
Section 16.2. The Investment Funds authorized by the Administrator as
of the Effective Date are as set forth in Appendix A.
1.29 "Leased Employee". An individual who is deemed to be an employee of
any Related Company as provided in Code section 414(n) or (o).
1.30 "Leave of Absence". A period during which an individual is deemed to
be an Employee, but is absent from active employment, provided that
the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed forces and
the individual returns to active employment within the period
during which he or she retains employment rights under federal
law.
1.31 "Loan Account". The record maintained for purposes of accounting for a
Participant's loan and payments of principal and interest thereon.
18
<PAGE>
1.32 "NHCE" or "Non-Highly Compensated Employee". An Employee described as
a Non-Highly Compensated Employee in Section 12.
1.33 "Normal Retirement Date". The date of a Participant's 65th birthday.
1.34 "Owner". A person with an ownership interest in the capital, profits,
outstanding stock or voting power of a Related Company within the
meaning of Code section 318 or 416 (which exclude indirect ownership
through a qualified plan).
1.35 "Parental Leave". The period of absence from work by reason of
pregnancy, the birth of an Employee's child, the placement of a child
with the Employee in connection with the child's adoption, or caring
for such child immediately after birth or placement as described in
Code section 410(a)(5)(E).
1.36 "Participant". An Eligible Employee who begins to participate in the
Plan after completing the eligibility requirements as described in
Section 2.1. An Eligible Employee who makes a Rollover Contribution
prior to completing the eligibility requirements as described in
Section 2.1 shall also be considered a Participant except for purposes
of provisions related to Contributions (other than a Rollover
Contribution). A Participant's participation continues until his or
her employment with all Related Companies ends and his or her Account
is distributed or forfeited.
1.37 "Pay". The base pay, overtime, shift differential and commissions paid
to an Eligible Employee by an Employer while a Participant during the
current period.
Pay is neither increased nor decreased by any salary credit or
reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited
to $200,000 (as indexed for the cost of living pursuant to Code
sections 401(a)(17) and 415(d)) per Plan Year. Pay is limited to
$150,000 (as indexed for the cost of living pursuant to Code sections
401(a)(17) and 415(d)) per Plan Year effective for Plan Years
beginning after December 31, 1993.
For purposes of Contributions described in Section 5.2, the
limitations as described in the third paragraph of Section 1.11 shall
also apply.
1.38 "Period of Employment". The period beginning on the date an Employee
first performs an hour of service and ending on the date his or her
employment ends. Employment ends on the date the Employee quits,
retires, is discharged, dies or (if earlier) the first anniversary of
his or her absence for any other reason. The period of absence
starting with the date an Employee's employment temporarily ends and
ending on the date he or she is subsequently reemployed is (1)
included in his or her Period of Employment if the period of absence
does not exceed one year, and (2) excluded if such period exceeds one
year.
Period of Employment includes the period prior to a Break in Service.
19
<PAGE>
An Employee's service with a predecessor or acquired company shall
only be counted in the determination of his or her Period of
Employment for eligibility and/or vesting purposes if (1) the Company
directs that credit for such service be granted, or (2) a qualified
plan of the predecessor or acquired company is subsequently maintained
by any Employer or Related Company.
1.39 "Plan". The Harper Group Savings Plan set forth in this document, as
from time to time amended.
1.40 "Plan Year". The annual accounting period of the Plan and Trust which
ends on each December 31.
1.41 "QDRO". A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within the
meaning of Code section 414(p).
1.42 "Related Company". With respect to any Employer, that Employer and any
corporation, trade or business which is, together with that Employer,
a member of the same controlled group of corporations, a trade or
business under common control, or an affiliated service group within
the meaning of Code section 414(b), (c), (m) or (o).
1.43 "Settlement Date". For each Trade Date, the Trustee's next business
day.
1.44 "Spousal Consent". The written consent given by a spouse to a
Participant's election or waiver of a specified form of benefit,
including a loan or in-service withdrawal, or Beneficiary designation.
The spouse's consent must acknowledge the effect on the spouse of the
Participant's election, waiver or designation and be duly witnessed by
a notary public. Spousal Consent shall be valid only with respect to
the spouse who signs the Spousal Consent and only for the particular
choice made by the Participant which requires Spousal Consent. A
Participant may revoke (without Spousal Consent) a prior election,
waiver or designation that required Spousal Consent at any time before
payments begin. Spousal Consent also means a determination by the
Administrator that there is no spouse, the spouse cannot be located,
or such other circumstances as may be established by applicable law.
1.45 "Subsidiary". A company which is 50% or more owned, directly or
indirectly, by the Company.
1.46 "Sweep Account". The subsidiary Account for each Participant through
which all transactions are processed, which is invested in interest
bearing deposits of the Trustee.
1.47 "Sweep Date". The cut off date and time for receiving instructions for
transactions to be processed on the next Trade Date.
1.48 "Taxable Income". Compensation in the amount reported by the Employer
as "Wages, tips, other compensation" on Form W-2, or any successor
method of reporting under Code section 6041(d).
20
<PAGE>
1.49 "Trade Date". Each day the Investment Funds are valued, which is
normally every day the assets of such Funds are traded.
1.50 "Trust". The legal entity created by those provisions of this document
which relate to the Trustee. The Trust is part of the Plan and holds
the Plan assets which are comprised of the aggregate of Participants'
Accounts, any unallocated funds invested in deposit or money market
type assets pending allocation to Participant's Accounts or
disbursement to pay Plan fees and expenses and the Forfeiture Account.
1.51 "Trustee". Wells Fargo Bank, National Association.
1.52 "Year of Vesting Service". Effective for Employees hired on or after
January, 1994, a 12 month Period of Employment and the same for
Employees hired before January 1, 1994, except to the extent described
below.
Notwithstanding, if it would provide a more favorable result for the
Employee, for service prior to January 1, 1994, a Year of Vesting
Service for periods prior to November 1, 1993, is a 12 month period
ending on the last day of any Plan Year in which an Employee is
credited with at least 1,000 Hours of Service, plus two months.
Years of Vesting Service shall include service credited prior to
November 19, 1973.
21
<PAGE>
2 ELIGIBILITY
-----------
2.1 Eligibility
All Participants as of November 1, 1993 shall continue their
eligibility to participate. Each other Eligible Employee shall become
a Participant on the first January 1, April 1, July 1, or October 1
after the date he or she attains age 18, and completes a 6 month
Period of Employment. The eligibility period begins on the date an
Employee's Period of Employment commences.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements, but is
Ineligible at the time participation would otherwise begin (if he or
she were not Ineligible), he or she shall become a Participant on the
first subsequent date on which he or she is an Eligible Employee.
2.3 Ineligible or Former Participants
A Participant may not make or share in Plan Contributions, nor
generally be eligible for a new Plan loan, during the period he or she
is Ineligible, but he or she shall continue to participate for all
other purposes. An Ineligible Participant or former Participant shall
automatically become an active Participant on the date he or she again
becomes an Eligible Employee.
22
<PAGE>
3 PARTICIPANT CONTRIBUTIONS
-------------------------
3.1 Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to reduce
his or her Pay by an amount which does not exceed the Contribution
Dollar Limit, within the limits described in the Contribution
Percentage Limits paragraph of this Section 3, and have such amount
contributed to the Plan by the Employer as a Pre-Tax Contribution. The
election shall be made as a whole percentage of Pay in such manner and
with such advance notice as prescribed by the Administrator. In no
event shall an Employee's Pre-Tax Contributions under the Plan and all
other plans, contracts or arrangements of all Related Companies exceed
the Contribution Dollar Limit for the Employee's taxable year
beginning in the Plan Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or her
Pre-Tax Contribution election as of any January 1, April 1, July 1, or
October 1 in such manner and with such advance notice as prescribed by
the Administrator. The changed percentage shall become effective with
the first payroll paid after such date. Participants' Contribution
election percentages shall automatically apply to Pay increases or
decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution election at any time
in such manner as prescribed by the Administrator, and such election
shall be effective as soon as administratively feasible. A Participant
may contribute again by making a new Contribution election at the same
time and in the same manner in which a Participant may change his or
her election.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to time, without
the necessity of amending this Plan and Trust document, the minimum,
if applicable, and maximum Pre-Tax Contribution percentages,
prospectively or retrospectively (for the current Plan Year), for all
Participants. In addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it deems
necessary. As of the Effective Date, the maximum Contribution
percentages are:
Highly
Contribution Compensated All Other
Type Employees Participants
---- --------- ------------
Pre-Tax 10% 15%
23
<PAGE>
Irrespective of the limits that may be established by the
Administrator in accordance with this paragraph, in no event shall the
contributions made by or on behalf of a Participant for a Plan Year
exceed the maximum allowable under Code section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Pre-Tax Contributions for a calendar year to
this and any other qualified defined contribution plan in excess of
the Contribution Dollar Limit may notify the Administrator in writing
by the following March 1 (or as late as April 14 if allowed by the
Administrator) that an excess has occurred. In this event, the amount
of the excess specified by the Participant, adjusted for investment
gain or loss, shall be refunded to him or her by April 15 and shall
not be included as an Annual Addition under Code section 415 for the
year contributed. Refunds shall not include investment gain or loss
for the period between the end of the applicable Plan Year and the
date of distribution. Any Company Match Contributions attributable to
refunded excess Pre-Tax Contributions as described in this Section
shall be deemed a Contribution made by reason of a mistake of fact and
removed from the Participant's Account.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover Contributions, may
only be made through payroll deduction. Such amounts shall be paid to
the Trustee in cash and posted to each Participant's Account(s) as
soon as such amounts can reasonably be separated from the Employer's
general assets and balanced against the specific amount made on behalf
of each Participant. In no event, however, shall such amounts be paid
to the Trustee more than 90 days after the date amounts are deducted
from a Participant's Pay. Pre-Tax Contributions shall be treated as
employer contributions in determining tax deductions under Code
section 404(a).
24
<PAGE>
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS
------------------------------------
4.1 Rollovers
The Administrator may authorize the Trustee to accept a rollover
contribution in cash, within the meaning of Code section 402(c) or
408(d)(3)(A)(ii), directly from an Eligible Employee or as a Direct
Rollover from another qualified plan on behalf of the Eligible
Employee, even if he or she is not yet a Participant. The Employee
shall be responsible for furnishing satisfactory evidence, in such
manner as prescribed by the Administrator, that the amount is eligible
for rollover treatment. A rollover contribution received directly from
an Eligible Employee must be paid to the Trustee in cash within 60
days after the date received by the Eligible Employee from a qualified
plan or conduit individual retirement account. Contributions described
in this paragraph shall be posted to the applicable Employee's
Rollover Account as of the date received by the Trustee.
If it is later determined that an amount contributed pursuant to the
above paragraph did not in fact qualify as a rollover contribution
under Code section 402(c) or 408(d)(3)(A)(ii), the balance credited to
the Employee's Rollover Account shall immediately be (1) segregated
from all other Plan assets, (2) treated as a nonqualified trust
established by and for the benefit of the Employee, and (3)
distributed to the Employee. Any such nonqualifying rollover shall be
deemed never to have been a part of the Plan.
4.2 Transfers From Other Qualified Plans
The Administrator may instruct the Trustee to receive assets in cash
or in kind directly from another qualified plan. The Trustee may
refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable;
(b) instructions for posting amounts to Participants' Accounts are
incomplete;
(c) any amounts are not exempted by Code section 401(a)(11)(B) from
the annuity requirements of Code section 417; or
(d) any amounts include benefits protected by Code section 411(d)(6)
which would not be preserved under applicable Plan provisions.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee.
25
<PAGE>
5 EMPLOYER CONTRIBUTIONS
----------------------
Employer Contributions described in Section 5.1 are effective January 1,
1994. Employer Contributions described in Section 5.2 ceased effective
December 31, 1993.
5.1 Company Match Contributions
(a) Frequency and Eligibility.
Basic Contribution: For each period for which Participants'
Contributions are made, the Employer shall make basic Company
Match Contributions as described in the following Allocation
Method paragraph on behalf of each Participant who contributed
during the period.
Supplemental Contribution: For each Plan Year, the Employer may
make supplemental Company Match Contributions as described in the
following Allocation Method paragraph on behalf of each
Participant who contributed during the period and was an Eligible
Employee on the last day of the Plan Year and each Participant
who is otherwise eligible but who ceased being an Employee during
the Plan Year after having attained age 65, or by reason of his
or her Disability or death.
(b) Allocation Method.
Basic Contribution: The basic Company Match Contributions
(including any Forfeiture Account amounts applied as basic
Company Match Contributions in accordance with Section 8.4) for
each period shall total 50% of each eligible Participant's
Pre-Tax Contributions for the period, provided that no basic
Company Match Contributions (and Forfeiture Account amounts)
shall be made based upon a Participant's Contributions in excess
of 6% of his or her Pay. The Employer may change the basic 50%
matching rate or the 6% of considered Pay to any other
percentages, including 0%, generally by notifying eligible
Participants in sufficient time to adjust their Contribution
elections prior to the start of the period for which the new
percentages apply.
Supplemental Contribution: The supplemental Company Match
Contributions (including any Forfeiture Account amounts applied
as supplemental Company Match Contributions in accordance with
Section 8.4) for the Plan Year shall total a percentage, as
determined by the Company, of each eligible Participant's Pre-Tax
Contributions for the Plan Year, provided that no supplemental
Company Match Contributions (and Forfeiture Account amounts)
shall be made based upon a Participant's Contributions in excess
of 6% of his or her Pay.
(c) Timing, Medium and Posting. The Employer shall make each period's
Company Match Contribution in cash as soon as is feasible, and
not later than the Employer's federal tax filing date, including
extensions, for deducting such Contribution. The Trustee shall
post such amount to each Participant's Company Match Account once
the total Contribution received has been balanced against the
specific amount to be credited to each Participant's Company
Match Account.
26
<PAGE>
5.2 Profit Sharing Contributions
(a) Frequency and Eligibility. For each Plan Year, the Employer may
make a Profit Sharing Contribution on behalf of each Participant
who was an Eligible Employee on the last day of the Plan Year and
was credited with at least 1,000 Hours of Service for the Plan
Year and each Participant who is otherwise eligible but who
ceased being an Employee during the Plan Year after having
attained age 65, or by reason of his or her Disability or death.
Profit Sharing Contributions will be discontinued effective with
the Plan Year beginning January 1, 1994. The Profit Sharing
Contribution for the Plan Year ending December 31, 1993 will
represent the final Profit Sharing Contribution.
(b) Allocation Method. The Profit Sharing Contribution (including any
Forfeiture Account amounts applied as Profit Sharing
Contributions in accordance with Section 8.4) for each Plan Year,
shall be in an amount determined by the Company and allocated
among eligible Participants in direct proportion to their Pay.
(c) Timing, Medium and Posting. The Employer shall make each Plan
Year's Profit Sharing Contribution in cash as soon as is
feasible, and not later than the Employer's federal tax filing
date, including extensions, for deducting such Contribution. The
Trustee shall post such amount to each Participant's Profit
Sharing Account once the total Contribution received has been
balanced against the specific amount to be credited to each
Participant's Profit Sharing Account.
27
<PAGE>
6 ACCOUNTING
----------
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of Accounts for
each Participant in order to reflect transactions both by type of
Contribution and investment medium. Financial transactions shall be
accounted for at the individual Account level by posting each
transaction to the appropriate Account of each affected Participant.
Participant Account values shall be maintained in shares for the
Investment Funds and in dollars for their Sweep and Participant Loan
Accounts. At any point in time, the Account value shall be determined
using the most recent Trade Date values provided by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep Account will
be credited with interest up until the date on which it is removed
from the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each Trade Date.
For any transaction to be processed as of a Trade Date, the Trustee
must receive instructions for the transaction by the Sweep Date. Such
instructions shall apply to amounts held in the Account on that Sweep
Date. Financial transactions of the Investment Funds shall be posted
to Participants' Accounts as of the Trade Date, based upon the Trade
Date values provided by the Trustee, and settled on the Settlement
Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in shares. The
Trustee is responsible for determining the share values of each
Investment Fund as of each Trade Date. To the extent an Investment
Fund is comprised of collective investment funds of the Trustee, or
any other fiduciary to the Plan, the share values shall be determined
in accordance with the rules governing such collective investment
funds, which are incorporated herein by reference. All other share
values shall be determined by the Trustee. The share value of each
Investment Fund shall be based on the fair market value of its
underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to Account
maintenance, transaction and Investment Fund management and
maintenance, as set forth below, are paid by the Employer directly, or
indirectly, through the Forfeiture Account as directed by the
Administrator, such fees and expenses shall be paid as set forth
below. The Employer may pay a lower portion of the fees and expenses
allocable to the Accounts of Participants who are no longer Employees.
28
<PAGE>
(a) Account Maintenance: Account maintenance fees and expenses,
include but are not limited to, administrative, Trustee,
government annual report preparation, audit, legal,
nondiscrimination testing, and fees for any other special
services. Account maintenance fees shall be charged to
Participants on a per Participant basis provided that no fee
shall reduce a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses include but are not
limited to recurring payment, Investment Fund election change and
loan fees. Transaction fees shall be charged to the Participant's
Account involved in the transaction provided that no fee shall
reduce a Participant's Account balance below zero.
(c) Investment Fund Management and Maintenance: Management and
maintenance fees and expenses related to the Investment Funds
shall be charged at the Investment Fund level and reflected in
the net gain or loss of each Fund.
As of the Effective Date, a breakdown of which Plan fees and expenses
shall generally be borne by the Trust (and charged to individual
Participants' Accounts) and those that shall be paid by the Employer,
directly or indirectly, is set forth in Appendix B and may be changed
from time to time, without the necessity of amending this Plan and
Trust Document.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days, from the
Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account of the
Participant and accounted for in dollars as an earmarked asset of the
borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's Account
balance with the amount that would be credited to the Account had no
error or omission been made. Funds necessary for any such restoration
shall be provided through payment made by the Employer, or if the
restoration involves an employer contribution account, the
Administrator may direct the Trustee to use amounts from the
Forfeiture Account.
6.8 Participant Statements
The Administrator shall provide Participants with statements of their
Accounts as soon after the end of each quarter of the Plan Year as is
administratively feasible.
29
<PAGE>
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable accounting
methods in performing their respective duties during the period of
converting the prior accounting system of the Plan and Trust to
conform to the individual Participant accounting system described in
this Section. This includes, but is not limited to, the method for
allocating net investment gains or losses and the extent, if any, to
which contributions received by and distributions paid from the Trust
during this period share in such allocation.
6.10 Accounts for QDRO Beneficiaries
A separate Account shall be established for an alternate payee
entitled to any portion of a Participant's Account under a QDRO as of
the date and in accordance with the directions specified in the QDRO.
In addition, a separate Account may be established during the period
of time the Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic relations order
qualifies as a QDRO. Such a separate Account shall be valued and
accounted for in the same manner as any other Account.
(a) Distributions Pursuant to QDRO's. If a QDRO so provides, the
portion of a Participant's Account payable to an alternate payee
may be distributed, in a form as permissible under the
Distribution Once Employment Ends Section, to the alternate payee
at the time specified in the QDRO, regardless of whether the
Participant is entitled to a distribution from the Plan at such
time.
(b) Participant Loans. Except to the extent required by law, an
alternate payee, on whose behalf a separate Account has been
established, shall not be entitled to borrow from such Account.
If a QDRO specifies that the alternate payee is entitled to any
portion of the Account of a Participant who has an outstanding
loan balance, all outstanding loans shall generally continue to
be held in the Participant's Account and shall not be divided
between the Participant's and alternate payee's Accounts.
(c) Investment Direction. Where a separate Account has been
established on behalf of an alternate payee and has not yet been
distributed, the alternate payee may direct the investment of
such Account in the same manner as if he or she were a
Participant.
30
<PAGE>
7 INVESTMENT FUNDS AND ELECTIONS
------------------------------
7.1 Investment Funds
Except for Participants' Sweep and Loan Accounts, the Trust shall be
maintained in various Investment Funds. The Administrator shall select
the Investment Funds available to Participants and may change the
number or composition of the Investment Funds, subject to the terms
and conditions agreed to with the Trustee. As of the Effective Date, a
list of the Investment Funds available to Participants is set forth in
Appendix A, and may be changed from time to time, without the
necessity of amending this Plan and Trust document.
7.2 Investment Fund Elections
Each Participant shall make an investment election covering all of his
or her Contribution Accounts, except for the portion of his or her
Profit Sharing Account as described in Appendix A, such portion of
which is subject to investment restrictions as described in Appendix
A. Effective July 1, 1994, the preceding reference to ", except for
the portion of his or her Profit Sharing Account as described in
Appendix A, such portion of which is subject to investment
restrictions as described in Appendix A" will no longer apply.
A Participant shall make his or her investment election in any
combination of one or any number of the Investment Funds offered in
accordance with the procedures established by the Administrator and
Trustee. However, during the period of converting the prior accounting
system of the Plan and Trust to conform to the individual Participant
accounting system described in Section 6, Trust assets may be held in
any investment vehicle permitted by the Plan, as directed by the
Administrator, irrespective of Participant investment elections.
The Administrator may set a maximum percentage of the total election
that a Participant may direct into any specific Investment Fund, which
maximum, if any, is set forth in Appendix A, and may be changed from
time to time, without the necessity of amending this Plan and Trust
document.
7.3 Responsibility for Investment Choice
Each Participant shall be solely responsible for the selection of his
or her Investment Fund choices. No fiduciary with respect to the Plan
is empowered to advise a Participant as to the manner in which his or
her Accounts are to be invested, and the fact that an Investment Fund
is offered shall not be construed to be a recommendation for
investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for the investment
of that portion of a Participant's Account which is not yet held in an
Investment Fund and for which no valid investment election is on file.
The Investment Fund specified as of the Effective Date is as set forth
in Appendix A, and may be changed from time to time, without the
necessity of amending this Plan and Trust document.
31
<PAGE>
7.5 Timing
A Participant shall make his or her initial investment election upon
becoming a Participant and may change his or her election at any time
in accordance with the procedures established by the Administrator and
Trustee. Investment elections received by the Trustee by the Sweep
Date will be effective on the following Trade Date.
7.6 Switching Fees
A reasonable processing fee may be charged directly to a Participant's
Account for Investment Fund election changes in excess of a specified
number per year as determined by the Administrator.
32
<PAGE>
8 VESTING & FORFEITURES
---------------------
8.1 Fully Vested Contribution Accounts
A Participant shall be fully vested in these Accounts at all times:
Pre-Tax Account
Rollover Account
8.2 Full Vesting upon Certain Events
A Participant's entire Account shall become fully vested once he or
she has attained his or her Normal Retirement Date as an Employee or
upon his or her leaving the Employer due to his or her Disability or
death.
8.3 Vesting Schedule
In addition to the vesting provided above, a Participant's Company
Match and Profit Sharing Accounts shall become vested in accordance
with the following schedule:
Years of Vesting Vested
Service Percentage
------- ----------
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
If this vesting schedule is changed, the vested percentage for each
Participant shall not be less than his or her vested percentage
determined as of the last day prior to this change, and for any
Participant with at least three Years of Vesting Service when the
schedule is changed, vesting shall be determined using the more
favorable vesting schedule.
8.4 Forfeitures
A Participant's non-vested Account balance shall be forfeited as of
the Settlement Date following the Sweep Date on which the
Administrator has reported to the Trustee that the Participant's
employment has terminated with all Related Companies. Forfeitures from
all Participants' Employer Contribution Accounts shall be transferred
to and maintained in a single Forfeiture Account, which shall be
invested in interest bearing deposits of the Trustee. Forfeiture
Account amounts shall be utilized to restore Accounts, to pay Plan
fees and expenses, to reduce Company Match or may increase the amount
allocated as Profit Sharing Contributions as directed by the
Administrator.
33
<PAGE>
8.5 Rehired Employees
(a) Service. If an Employee is rehired, all Periods of Employment
credited prior to his or her termination of employment shall be
counted in determining his or her vested interest.
(b) Account Restoration. If an Employee is rehired before he or she
has a Break in Service, the amount forfeited when his or her
employment last terminated shall be restored to his or her
Account. The restoration shall include the interest which would
have been credited had such forfeiture been invested in the Sweep
Account from the date forfeited until the date the restoration
amount is determined. The amount shall come from the Forfeiture
Account to the extent possible, and any additional amount needed
shall be contributed by the Employer. The vested interest in his
or her restored Account shall then be equal to:
V% times (AB + D) - D
where:
V% = current vested percentage
AB = current account balance
D = amount previously distributed
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9 PARTICIPANT LOANS
-----------------
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms and
conditions set forth in this Section. All loan limits are determined
as of the Sweep Date the loan is processed. The funds will be
disbursed to the Participant on the following Settlement Date.
9.2 Loan Funding Limits
The loan amount must meet all of the following limits:
(a) Plan Minimum Limit. The minimum amount for any loan is $1,000.
(b) Plan Maximum Limit. Subject to the legal limit described in (c)
below, the maximum a Participant may borrow, including the
outstanding balance of existing Plan loans, is 100% of the
following Accounts which are fully vested, except for the portion
of his or her Profit Sharing Account as described in Appendix A:
Pre-Tax Account
Company Match Account
Profit Sharing Account
Rollover Account
Effective July 1, 1994, the preceding reference to ", except for
the portion of his or her Profit Sharing Account as described in
Appendix A" will no longer apply.
(c) Legal Maximum Limit. The maximum a Participant may borrow,
including the outstanding balance of existing Plan loans, is 50%
of his or her vested Account balance, not to exceed $50,000.
However, the $50,000 maximum is reduced by the Participant's
highest outstanding loan balance during the 12 month period
ending on the day before the Sweep Date as of which the loan is
made. For purposes of this paragraph, the qualified plans of all
Related Companies shall be treated as though they are part of
this Plan to the extent it would decrease the maximum loan
amount.
9.3 Maximum Number of Loans
A Participant may have only one loan outstanding at any given time.
9.4 Source of Loan Funding
A loan to a Participant shall be made solely from the assets of his or
her own Accounts. The available assets shall be determined first by
Account type and then by investment type within each type of Account.
The hierarchy for loan funding by type of Account shall be the order
listed in the preceding Plan Maximum Limit paragraph. Within each
Account used for funding a loan, amounts shall first be taken from the
Sweep Account and then taken by type of investment in direct
proportion to the market value of the Participant's interest in each
Investment Fund as of the Sweep Date on which the loan is made.
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9.5 Interest Rate
The interest rate charged on Participant loans shall be a fixed
reasonable rate of interest, determined from time to time by the
Administrator, which provides the Plan with a return commensurate with
the prevailing interest rate charged by persons in the business of
lending money for loans which would be made under similar
circumstances. As of the Effective Date, the interest rate is
determined as set forth in Appendix C, and may be changed from time to
time, without the necessity of amending this Plan and Trust document.
9.6 Repayment
Substantially level amortization shall be required of each loan with
payments made at least monthly, generally through payroll deduction.
Loans may be prepaid in full or in part at any time. The Participant
may choose the loan repayment period, not to exceed 5 years.
9.7 Repayment Hierarchy
Loan principal repayments shall be credited to the Participant's
Accounts in the inverse of the order used to fund the loan. Loan
interest shall be credited to the Participant's Accounts in direct
proportion to the principal payment. Loan payments are credited by
investment type based upon the Participant's current investment
election for new Contributions.
9.8 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and with such
advance notice as prescribed by the Administrator. All loans shall be
evidenced by a promissory note, secured only by the portion of the
Participant's Account from which the loan is made, and the Plan shall
have a lien on this portion of his or her Account.
9.9 Default, Suspension and Call Feature
(a) Default. A loan is treated as a default if scheduled loan
payments are more than 90 days late, provided that the
Administrator may agree to a suspension of loan payments for up
to 6 months for a Participant who is on a Leave of Absence. A
Participant shall then have 30 days from the time he or she
receives written notice of the default and a demand for past due
amounts to cure the default before it becomes final.
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(b) Actions upon Default. In the event of default, the Administrator
may direct the Trustee to report the default as a taxable
distribution. As soon as a Plan withdrawal or distribution to
such Participant would otherwise be permitted, the Administrator
may instruct the Trustee to execute upon its security interest in
the Participant's Account by distributing the note to the
Participant.
(c) Call Feature. The Administrator shall have the right to call any
Participant loan once a Participant's employment with all Related
Companies has terminated or if the Plan is terminated.
9.10 Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
take out a loan under the Plan.
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10 IN-SERVICE WITHDRAWALS
----------------------
10.1 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may request the
withdrawal of any amount necessary to satisfy a financial need
including amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from
the distribution. Only requests for withdrawals (1) on account of
a Participant's "Deemed Financial Need" or "Demonstrated
Financial Need", and (2) which are "Demonstrated as Necessary" to
satisfy the financial need will be approved.
(b) "Deemed Financial Need". Financial commitments relating to:
(1) unreimbursable medical expenses described under Code section
213(d) incurred (or to be incurred) by the Employee, his or
her spouse or dependents;
(2) the purchase (excluding mortgage payments) of the Employee's
principal residence;
(3) the payment of unreimbursable tuition and related
educational fees for up to the next 12 months of
post-secondary education for the Employee, his or her spouse
or dependents;
(4) the need to pay for the funeral expenses of an Employee's
family member;
(5) the need for the Employee to prevent losing his or her
principal residence through eviction or foreclosure on the
mortgage; or
(6) any other circumstance specifically permitted under Code
section 401(k)(2)(B)(i)(IV).
(c) "Demonstrated Financial Need". A determination by the
Administrator that a severe financial hardship to the Participant
has resulted from:
(1) a sudden and unexpected illness or accident to the Employee
or his or her spouse or dependents;
(2) the loss, due to casualty, of the Employee's property other
than nonessential property (such as a boat or a television);
or
(3) some other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the
control of the Employee.
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(d) "Demonstrated as Necessary". A withdrawal is "demonstrated as
necessary" to satisfy the financial need only if the Employee
represents that he or she is unable to relieve the financial need
(without causing further hardship) by doing any or all of the
following:
(1) receiving any reimbursement or compensation from insurance
or otherwise;
(2) reasonably liquidating his or her assets and the assets of
his or her spouse or minor children that are reasonably
available to the Employee to the extent such liquidation
would not cause further hardship;
(3) ceasing all of his or her contributions to all qualified and
nonqualified plans of deferred compensation and all stock
option or stock purchase plans maintained by Related
Companies;
(4) obtaining all other possible withdrawals and nontaxable
loans available from all plans maintained by Related
Companies; and
(5) obtaining all possible loans from commercial sources on
reasonable commercial terms.
(e) Account Sources for Withdrawal. The withdrawal amount shall come
only from the Participant's fully vested Accounts, except for the
portion of his or her Profit Sharing Account as described in
Appendix A, in the following priority order:
Rollover Account
Company Match Account
Profit Sharing Account
Pre-Tax Account
Effective July 1, 1994, the preceding reference to ", except for
the portion of his or her Profit Sharing Account as described in
Appendix A" will no longer apply.
The amount that may be withdrawn from a Participant's Pre-Tax
Account shall not include any earnings credited to his or her
Pre-Tax Contribution Account after the start of the first Plan
Year beginning after December 31, 1988.
(f) Permitted Frequency. There is no restriction on the number of
Hardship withdrawals permitted to a Participant.
10.2 Rollover Account Withdrawals
No in-service withdrawals are permitted from a Participant's Rollover
Account except as provided elsewhere in this Section.
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<PAGE>
10.3 Over Age 70 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and over age 70
1/2 may withdraw from the Accounts listed in paragraph (b) below.
(b) Account Sources for Withdrawal. The withdrawal amount shall come
only from the Participant's fully vested Accounts, in the
following priority order:
Rollover Account
Pre-Tax Account
Company Match Account
Profit Sharing Account
(c) Permitted Frequency. There is no restriction on the number of
Over Age 70 1/2 withdrawals permitted to a Participant.
(d) Suspension from Further Contributions. An Over Age 70 1/2
withdrawal shall not affect a Participant's ability to make
further Contributions.
10.4 Withdrawal Processing
(a) Minimum Amount. There is no minimum amount for any type of
withdrawal.
(b) Application and Notice. A Participant shall apply for any type of
withdrawal in such manner and with such advance notice as
prescribed by the Administrator. The Participant shall be
provided the notice prescribed by Code section 402(f).
If an in-service withdrawal is one to which Code sections
401(a)(11) and 417 do not apply, such in-service withdrawal may
commence less than 30 days after the aforementioned notice is
provided, if:
(1) the Participant is clearly informed that he or she has the
right to a period of at least 30 days after receipt of such
notice to consider his or her option to elect or not elect a
Direct Rollover for all or a portion, if any, of his or her
in-service withdrawal which will constitute an Eligible
Rollover Distribution; and
(2) the Participant after receiving such notice, affirmatively
elects a Direct Rollover for all or a portion, if any, of
his or her in-service withdrawal which will constitute an
Eligible Rollover Distribution or alternatively elects to
have all or a portion made payable directly to him or her,
thereby not electing a Direct Rollover for all or a portion
of such amount.
40
<PAGE>
(c) Approval. The Administrator, or the Trustee if otherwise
authorized by the Administrator and expressly agreed to by the
Trustee, is responsible for determining that a withdrawal request
conforms to the requirements described in this Section and
granting or denying approval of such request.
(d) Time of Processing. The Trustee shall process a withdrawal
request approved and received by a Sweep Date, based on the
Account value as of the Sweep Date, and fund them on the
following Settlement Date. The Trustee shall then make payment as
soon thereafter as is administratively feasible.
(e) Medium and Form of Payment. The medium of payment for a
withdrawal shall be cash. With regard to the portion of a
withdrawal representing an Eligible Rollover Distribution, a
Participant may elect to have such amount paid as Direct Rollover
to an Eligible Retirement Plan. The form of payment for
withdrawals shall be a single installment.
(f) Investment Fund Sources. Within each Account type used for
funding a withdrawal, amounts shall first be taken from the Sweep
Account and then taken by type of investment in direct proportion
to the market value of the Participant's interest in each
Investment Fund (which excludes Participant loans) at the time
the withdrawal is made.
10.5 Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
make an in-service withdrawal under the Plan.
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11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS
----------------------------------
11.1 Benefit Election
A Participant, or his or her Beneficiary in the case of his or her
death, shall be provided with information regarding all optional times
and forms of payment available to include the notices prescribed by
Code section 402(f) and Code section 411(a)(11). Subject to the other
requirements of this Section, a Participant, or his or her Beneficiary
in the case of his or her death, may elect, in such manner and with
such advance notice as prescribed by the Administrator, to have his or
her vested Account balance paid to him or her beginning upon any
Settlement Date following his or her termination of employment with
all Related Companies.
If a distribution is one to which Code sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
aforementioned notices are provided, if:
(a) the Participant is clearly informed that he or she has the right
to a period of at least 30 days after receipt of such notices to
consider the decision as to whether to elect a distribution and
if so to elect a particular form of distribution and to elect or
not elect a Direct Rollover for all or a portion, if any, of his
or her distribution which will constitute an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notices, affirmatively
elects a distribution and a Direct Rollover for all or a portion,
if any, of his or her distribution which will constitute an
Eligible Rollover Distribution or alternatively elects to have
all or a portion made payable directly to him or her, thereby not
electing a Direct Rollover for all or a portion thereof.
11.2 Payment Form and Medium
A Participant may elect to be paid in any of these forms:
(a) a single lump sum, or
(b) a portion paid in a lump sum, and the remainder paid later, or
(c) periodic installments over a period not to exceed the life
expectancy of the Participant and his or her Beneficiary.
Distributions shall be made in cash, except to the extent a
distribution consists of an offset amount as described in Section
9.9(c). With regard to the portion of a distribution representing an
Eligible Rollover Distribution, a Distributee may elect to have all or
a portion of such amount paid as a Direct Rollover to an Eligible
Retirement Plan.
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<PAGE>
11.3 Small Amounts Paid Immediately
If, at the time a Participant's employment with all Related Companies
ends, the Participant's vested Account balance is $3,500 or less, the
Participant's benefit shall be paid as a single lump sum as soon as
administratively feasible after his or her employment with all Related
Companies ends in accordance with procedures prescribed by the
Administrator.
11.4 Deemed Distribution
For purposes of Section 8.4, vested Account balances will be deemed
distributed as of the Settlement Date following the Sweep Date on
which the Administrator has reported to the Trustee that the
Participant's employment with all Related Companies has terminated.
11.5 Latest Commencement Permitted
In addition to any other Plan requirements and unless a Participant
elects otherwise, his or her benefit payments will begin not later
than 60 days after the end of the Plan Year in which he or she attains
his or her Normal Retirement Date or retires, whichever is later.
However, if the amount of the payment or the location of the
Participant (after a reasonable search) cannot be ascertained by that
deadline, payment shall be made no later than 60 days after the
earliest date on which such amount or location is ascertained. In any
case, benefit payments shall begin by the April 1 immediately
following the end of the calendar year in which the Participant
attains age 70 1/2 (whether or not he or she is an Employee).
11.6 Payment Within Life Expectancy
The Participant's payment election must be consistent with the
requirement of Code section 401(a)(9) that all payments are to be
completed within a period not to exceed the lives or the joint and
last survivor life expectancy of the Participant and his or her
Beneficiary. The life expectancies of a Participant and his or her
spouse may not be recomputed annually.
11.7 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or her sole
primary Beneficiary, the minimum annual distribution for each calendar
year, beginning with the year in which he or she attains age 70 1/2,
shall not be less than the quotient obtained by dividing (a) the
Participant's vested Account balance as of the last Trade Date of the
preceding year by (b) the applicable divisor as determined under the
incidental benefit requirements of Code section 401(a)(9).
11.8 Payment to Beneficiary
Payment to a Beneficiary must either: (1) be completed within five
years of the Participant's death or (2) begin within one year of his
or her death and be completed within the period of the Beneficiary's
life or life expectancy, except that:
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<PAGE>
(a) If the Participant dies after the April 1 immediately following
the end of the calendar year in which he or she attains age 70
1/2, payment to his or her Beneficiary must be made at least as
rapidly as provided in the Participant's distribution election;
(b) If the surviving spouse is the Beneficiary, payments need not
begin until the date on which the Participant would have attained
age 70 1/2 and must be completed within the spouse's life or life
expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (1) before the April 1 immediately following the
end of the calendar year in which the Participant would have
attained age 70 1/2 and (2) before payments have begun to the
spouse, the spouse will be treated as the Participant in applying
these rules.
11.9 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the Participant's
remaining Plan interest at the time of his or her death. The
designation may be changed at any time. However, a Participant's
spouse shall be the sole primary Beneficiary unless the designation
includes Spousal Consent for another Beneficiary. If no proper
designation is in effect at the time of a Participant's death or if
the Beneficiary does not survive the Participant, the Beneficiary
shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, per stirpes (by right of
representation), or
(c) Participant's estate.
11.10 Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
receive a distribution under the Plan.
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12 ADP AND ACP TESTS
-----------------
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12 (where a
definition is contained in both Sections 1 and 12, for purposes of
Section 12 the Section 12 definition shall be controlling):
(a) "ACP" or "Average Contribution Percentage". The Average
Percentage calculated using Contributions allocated to
Participants as of a date within the Plan Year.
(b) "ACP Test". The determination of whether the ACP is in compliance
with the Basic or Alternative Limitation for a Plan Year (as
defined in Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The Average Percentage
calculated using Deferrals allocated to Participants as of a date
within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is in compliance
with the Basic or Alternative Limitation for a Plan Year (as
defined in Section 12.2).
(e) "Average Percentage". The average of the calculated percentages
for Participants within the specified group. The calculated
percentage refers to either the "Deferrals" or "Contributions"
(as defined in this Section) made on each Participant's behalf
for the Plan Year, divided by his or her Compensation for the
portion of the Plan Year in which he or she was an Eligible
Employee while a Participant. (Pre-Tax Contributions which will
be refunded solely because they exceed the Contribution Dollar
Limit are included in the percentage for the HCE Group but not
for the NHCE Group if such excess Pre-Tax Contributions were made
to plans of Related Companies.)
(f) "Contributions" shall include Company Match Contributions. In
addition, Contributions may include Pre-Tax Contributions, but
only to the extent that (1) the Employer elects to use them, (2)
they are not used or counted in the ADP Test, and (3) they are
necessary to meet the ACP Test Alternative Limitation (defined in
Section 12.2 (b)) or the Multiple Use Test.
(g) "Deferrals" shall include Pre-Tax Contributions.
(h) "Family Member". An Employee who is, at any time during the Plan
Year or Lookback Year, a spouse, lineal ascendant or descendant,
or spouse of a lineal ascendant or descendant of (1) an active or
former Employee who at any time during Plan Year or Lookback Year
is a more than 5% Owner (within the meaning of Code section
414(q)(3)), or (2) an HCE who is among the 10 Employees with the
highest Compensation for such Year.
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(i) "HCE" or "Highly Compensated Employee". With respect to each
Employer and its Related Companies, an Employee during the Plan
Year or Lookback Year who (in accordance with Code section
414(q)):
(1) Was a more than 5% Owner at any time during the Lookback
Year or Plan Year;
(2) Received Compensation during the Lookback Year (or in the
Plan Year if among the 100 Employees with the highest
Compensation for such Year) in excess of (i) $75,000 (as
adjusted for such Year pursuant to Code sections 414(q)(1)
and 415(d)), or (ii) $50,000 (as adjusted for such Year
pursuant to Code sections 414(q)(1) and 415(d)) in the case
of a member of the "top-paid group" (within the meaning of
Code section 414(q)(4)) for such Year), provided, however,
that if the conditions of Code section 414(q)(12)(B)(ii) are
met, the Company may elect for any Plan Year to apply clause
(i) by substituting $50,000 for $75,000 and not to apply
clause (ii);
(3) Was an officer of a Related Company and received
Compensation during the Lookback Year (or in the Plan Year
if among the 100 Employees with the highest Compensation for
such Year) that is greater than 50% of the dollar limitation
in effect under Code section 415(b)(1)(A) and (d) for such
Year (or if no officer has Compensation in excess of the
threshold, the officer with the highest Compensation),
provided that the number of officers shall be limited to 50
Employees (or, if less, the greater of three Employees or
10% of the Employees); or
(4) Was a Family Member at any time during the Lookback Year or
Plan Year, in which case the Contributions and Compensation
of the HCE and his or her Family Members shall be aggregated
and they shall be treated as a single HCE.
A former Employee shall be treated as an HCE if (1) such former
Employee was an HCE when he separated from service, or (2) such
former Employee was an HCE in service at any time after attaining
age 55.
The determination of who is an HCE, including the determinations
of the number and identity of Employees in the top-paid group,
the top 100 Employees and the number of Employees treated as
officers shall be made in accordance with Code section 414(q).
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(j) "HCE Group" and "NHCE Group". With respect to each Employer and
its Related Companies, the respective group of HCEs and NHCEs who
are eligible to have amounts contributed on their behalf for the
Plan Year, including Employees who would be eligible but for
their election not to participate or to contribute, or because
their Pay is greater than zero but does not exceed a stated
minimum.
(1) If the Related Companies maintain two or more plans which
are subject to the ADP or ACP Test and are considered as one
plan for purposes of Code sections 401(a)(4) or 410(b), all
such plans shall be aggregated and treated as one plan for
purposes of meeting the ADP and ACP Tests, provided that,
for Plan Years beginning after December 31, 1989, plans may
only be aggregated if they have the same Plan Year.
(2) If an HCE, who is one of the top 10 paid Employees or a more
than 5% Owner, has any Family Members, the Deferrals,
Contributions and Compensation of such HCE and his or her
Family Members shall be combined and treated as a single
HCE. Such amounts for all other Family Members shall be
removed from the NHCE Group percentage calculation and be
combined with the HCEs.
(3) If an HCE is covered by more than one cash or deferred
arrangement maintained by the Related Companies, all such
plans shall be aggregated and treated as one plan for
purposes of calculating the separate percentage for the HCE
which is used in the determination of the Average
Percentage.
(k) "Lookback Year". Pursuant to Code section 414(q), the Company
elects as the Lookback Year the current calendar year (ending
with the Plan Year).
(l) "Multiple Use Test". The test described in Section 12.4 which a
Plan must meet where the Alternative Limitation (described in
Section 12.2(b)) is used to meet both the ADP and ACP Tests.
(m) "NHCE" or "Non-Highly Compensated Employee". An Employee who is
not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must meet either
the Basic or Alternative Limitation when compared to the respective
ADP and ACP for the NHCE Group, defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may not exceed
1.25 times the NHCE Group Average Percentage.
(b) Alternative Limitation. The HCE Group Average Percentage is
limited by reference to the NHCE Group Average Percentage as
follows:
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<PAGE>
If the NHCE Group Then the Maximum HCE
Average Percentage is: Group Average Percentage is:
---------------------- ----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a maximum
percentage to be used in place of the calculated percentage for all
HCEs that would reduce the ADP and/or ACP for the HCE group by a
sufficient amount to meet the ADP and ACP Tests.
(a) ADP Correction. Pre-Tax Contributions shall, by the end of the
next Plan Year, be refunded (including amounts previously
refunded because they exceeded the Contribution Dollar Limit) to
the Participant in an amount equal to the actual Deferrals minus
the product of the maximum percentage and the HCE's Compensation.
Any Company Match Contributions attributable to refunded excess
Pre-Tax Contributions as described in this Section 12.3(a) shall
be deemed a Contribution made by reason of a mistake of fact and
removed from the Participant's Account.
(b) ACP Correction. Contributions shall, by the end of the next Plan
Year, be refunded to the Participant to the extent vested, and
forfeited to the extent such amounts were not vested, as of the
end of the Plan Year being tested in an amount equal to the
actual Contributions minus the product of the maximum percentage
and the HCE's Compensation.
(c) Investment Fund Sources. Once the amount of excess Deferrals
and/or Contributions is determined amounts shall then be taken by
type of investment in direct proportion to the market value of
the Participant's interest in each Investment Fund (which
excludes his or her Loan Account balance) at the time the
correction is made.
(d) Family Member Correction. To the extent any reduction is
necessary with respect to an HCE and his or her Family Members
that have been combined and treated for testing purposes as a
single Employee, the excess Deferrals and Contributions from the
ADP and/or ACP Test shall be prorated among each such Participant
in direct proportion to his or her Deferrals or Contributions
included in each Test.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is used to
meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group
must also comply with the requirements of Code section 401(m)(9). Such
Code section requires that the sum of the ADP and ACP for the HCE
Group (as determined after any corrections needed to meet the ADP and
ACP Tests have been made) not exceed the sum (which produces the most
favorable result) of:
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(a) the Basic Limitation (defined in Section 12.2) applied to either
the ADP or ACP for the NHCE Group, and
(b) the Alternative Limitation applied to the other NHCE Group
percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator shall
determine a maximum percentage to be used in place of the calculated
percentage for all HCEs that would reduce either or both the ADP or
ACP for the HCE Group by a sufficient amount to meet the multiple use
limit. Any excess shall be handled in the same manner that the
distribution of excess Deferrals or Contributions are handled.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a Participant
or forfeited in accordance with Section 12.3 or 12.5 shall be adjusted
for investment gain or loss. Refunds or forfeitures shall not include
investment gain or loss for the period between the end of the
applicable Plan Year and the date of distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the Plan
meets the ADP, ACP and Multiple Use Tests and that the Contribution
Dollar Limit is not exceeded. In carrying out its responsibilities,
the Administrator shall have sole discretion to limit or reduce
Deferrals or Contributions at any time. The Administrator shall
maintain records which are sufficient to demonstrate that the ADP, ACP
and Multiple Use Tests have been met for each Plan Year for at least
as long as the Employer's corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs, NHCEs, and the
performance of the ADP, ACP and Multiple Use Tests and any
corrective action resulting therefrom shall be made separately
with regard to the Employees of each Employer (and its Related
Companies) that is not a Related Company with the other
Employer(s).
(b) Collective Bargaining Units: The performance of the testing and
any corrective action resulting therefrom shall be applied
separately to Employees who are eligible to participate in the
Plan as a result of a collective bargaining agreement.
In addition, separate testing may be applied, at the discretion of the
Administrator and to the extent permitted under Treasury regulations,
to any group of Employees for whom separate testing is permissible.
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13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
--------------------------------------------
13.1 "Annual Addition" Defined
The sum of all amounts allocated to the Participant's Account for a
Plan Year. Amounts include contributions (except for rollovers or
transfers from another qualified plan), forfeitures and, if the
Participant is a Key Employee (pursuant to Section 14) for the
applicable or any prior Plan Year, medical benefits provided pursuant
to Code section 419A(d)(1). For purposes of this Section 13.1,
"Account" also includes a Participant's account in all other defined
contribution plans currently or previously maintained by any Related
Company. The Plan Year refers to the year to which the allocation
pertains, regardless of when it was allocated. The Plan Year shall be
the Code section 415 limitation year.
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this Plan and
any other defined contribution plan maintained by any Related Company
for any Plan Year shall not exceed the lesser of (1) 25% of his or her
Taxable Income or (2) the greater of $30,000 or one-quarter of the
dollar limitation in effect under Code section 415(b)(1)(A).
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any additional
Contributions would produce an excess Annual Addition for such year,
Contributions to be made for the remainder of the Plan Year shall be
limited to the amount needed for each affected Participant to receive
the maximum Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a Participant's
Account (resulting from forfeitures, allocations, reasonable error in
determining Participant compensation or the amount of elective
contributions, or other facts and circumstances acceptable to the
Internal Revenue Service) the excess amount (adjusted to reflect
investment gains) shall first be returned to the Participant to the
extent of his or her Pre-Tax Contributions (however to the extent
Pre-Tax Contributions were matched, the applicable Company Match
Contributions shall be forfeited in proportion to the returned matched
Pre-Tax Contributions) and the remaining excess, if any, shall be
forfeited by the Participant and together with forfeited Company Match
Contributions, used to reduce subsequent Contributions as soon as is
administratively feasible.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess Annual
Addition, received allocations to more than one defined contribution
plan, the excess shall be corrected by reducing the Annual Addition to
this Plan only after all possible reductions have been made to the
other defined contribution plans.
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13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the "projected
annual benefit" and the denominator is the greater of 125% of the
"protected current accrued benefit" or the normal limit which is the
lesser of (1) 125% of the maximum dollar limitation provided under
Code section 415(b)(1)(A) for the Plan Year or (2) 140% of the amount
which may be taken into account under Code section 415(b)(1)(B) for
the Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit provided by the
Plan determined pursuant to Code section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined benefit plan in
existence on (1) July 1, 1982, shall be the accrued annual
benefit provided for under Public Law 97-248, section 235(g)(4),
as amended, or (2) on May 6, 1986, shall be the accrued annual
benefit provided for under Public Law 99-514, section 1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the Participant's
Annual Addition for each Plan Year to date and the denominator is the
sum of the "annual amounts" for each year in which the Participant has
performed service with a Related Company. The "annual amount" for any
Plan Year is the lesser of (1) 125% of the Code section 415(c)(1)(A)
dollar limitation (determined without regard to subsection (c)(6)) in
effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B)
amount in effect for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code section
415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-248, section
235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
If a Participant has also participated in a defined benefit plan
maintained by a Related Company, the sum of the Defined Benefit
Fraction and the Defined Contribution Fraction for any Plan Year may
not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan
Year, the Participant's benefit under any defined benefit plan (to the
extent it has not been distributed or used to purchase an annuity
contract) shall be limited so that the combined fraction does not
exceed 1.0 before any defined contribution limits will be enforced.
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14 TOP HEAVY RULES
---------------
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the following
meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each qualified plan
of an Employer (and its Related Companies) (1) in which a Key
Employee is a participant or was a participant during the
determination period (regardless of whether such plan has
terminated), or (2) which enables another plan in the group to
meet the requirements of Code sections 401(a)(4) and 410(b). The
Employer may also treat any other qualified plan as part of the
group if the group would continue to meet the requirements of
Code sections 401(a)(4) and 410(b) with such plan being taken
into account.
(b) "Determination Date". The last Trade Date of the preceding Plan
Year or, in the case of the Plan's first year, the last Trade
Date of the first Plan Year.
(c) "Key Employee". A current or former Employee (or his or her
Beneficiary) who at any time during the five year period ending
on the Determination Date was:
(1) an officer of a Related Company whose Compensation (i)
exceeds 50% of the amount in effect under Code section
415(b)(1)(A) and (ii) places him within the following
highest paid group of officers:
Number of Employees Number of
not Excluded Under Code Highest Paid
Section 414(q)(8) Officers Included
----------------- -----------------
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation exceeds $150,000, or
(4) a more than 0.5% Owner who is among the 10 Employees owning
the largest interest in a Related Company and whose
Compensation exceeds the amount in effect under Code section
415(c)(1)(A).
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(d) "Plan Benefit". The sum as of the Determination Date of (1) an
Employee's Account, (2) the present value of his or her other
accrued benefits provided by all qualified plans within the
Aggregation Group, and (3) the aggregate distributions made
within the five year period ending on such date. Plan Benefits
shall exclude rollover contributions and plan to plan transfers
made after December 31, 1983 which are both employee initiated
and from a plan maintained by a non-related employer.
(e) "Top Heavy". The Plan's status when the Plan Benefits of Key
Employees account for more than 60% of the Plan Benefits of all
Employees who have performed services at any time during the five
year period ending on the Determination Date. The Plan Benefits
of Employees who were, but are no longer, Key Employees (because
they have not been an officer or Owner during the five year
period), are excluded in the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in which the
Plan is Top Heavy, the Employer shall not allow any contributions
(other than a Rollover Contribution) to be made by or on behalf
of any Key Employee unless the Employer makes a contribution
(other than Pre-Tax and Company Match Contributions) on behalf of
all Participants who were Eligible Employees as of the last day
of the Plan Year in an amount equal to at least 3% of each such
Participant's Taxable Income. The Administrator shall remove any
such contributions (including applicable investment gain or loss)
credited to a Key Employee's Account in violation of the
foregoing rule and return them to the Employer or Employee to the
extent permitted by the Limited Return of Contributions paragraph
of Section 18.
(b) Overriding Minimum Benefit. Notwithstanding, contributions shall
be permitted on behalf of Key Employees if the Employer also
maintains a defined benefit plan which automatically provides a
benefit which satisfies the Code section 416(c)(1) minimum
benefit requirements, including the adjustment provided in Code
section 416(h)(2)(A), if applicable. If this Plan is part of an
aggregation group in which a Key Employee is receiving a benefit
and no minimum is provided in any other plan, a minimum
contribution of at least 3% of Taxable Income shall be provided
to the Employees specified in the preceding paragraph of this
plan. In addition, the Employer may offset a defined benefit
minimum by contributions (other than Pre-Tax and Company Match
Contributions) made to this Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall be
substituted for 125% in determining the Defined Benefit Fraction and
the Defined Contribution Fraction.
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15 PLAN ADMINISTRATION
-------------------
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator, the Committee
and/or the Trustee, as applicable, whose specific duties are
delineated in this Plan and Trust. In addition, Plan fiduciaries also
include any other person to whom fiduciary duties or responsibility is
delegated with respect to the Plan. Any person or group may serve in
more than one fiduciary capacity with respect to the Plan. To the
extent permitted under ERISA section 405, no fiduciary shall be liable
for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with this Plan and
Trust to the extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence that a
prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying reasonable
expenses of administering the Plan;
(d) diversify Plan investments so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not
to do so; and
(e) treat similarly situated Participants and Beneficiaries in a
uniform and nondiscriminatory manner.
15.3 Company is ERISA Plan Administrator
The Company is the plan administrator, within the meaning of ERISA
section 3(16), which is responsible for compliance with all reporting
and disclosure requirements, except those that are explicitly the
responsibility of the Trustee under applicable law. The Administrator
and/or Committee shall have any necessary authority to carry out such
functions through the actions of the Administrator, duly appointed
officers of the Company, and/or the Committee.
15.4 Administrator Duties
The Administrator shall have the discretionary authority to construe
this Plan and Trust, other than the provisions which relate to the
Trustee, and to do all things necessary or convenient to effect the
intent and purposes of the Plan, whether or not such powers are
specifically set forth in this Plan and Trust. Actions taken in good
faith by the Administrator shall be conclusive and binding on all
interested parties, and shall be given the maximum possible deference
allowed by law. In addition to the duties listed elsewhere in this
Plan and Trust, the Administrator's authority shall include, but not
be limited to, the discretionary authority to:
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(a) determine who is eligible to participate, if a contribution
qualifies as a rollover contribution, the allocation of
Contributions, and the eligibility for loans, withdrawals and
distributions;
(b) provide each Participant with a summary plan description no later
than 90 days after he or she has become a Participant (or such
other period permitted under ERISA section 104(b)(1)), as well as
informing each Participant of any material modification to the
Plan in a timely manner;
(c) make a copy of the following documents available to Participants
during normal work hours: this Plan and Trust (including
subsequent amendments), all annual and interim reports of the
Trustee related to the entire Plan, the latest annual report and
the summary plan description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased Participant's
interest based upon such proof and evidence as it deems
necessary;
(e) establish and review at least annually a funding policy bearing
in mind both the short-run and long-run needs and goals of the
Plan. To the extent Participants may direct their own
investments, the funding policy shall focus on which Investment
Funds are available for Participants to use; and
(f) adjudicate claims pursuant to the claims procedure described in
Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors (including
attorneys, accountants, actuaries, consultants, record keepers,
investment counsel and administrative assistants) as it considers
necessary to assist it in the performance of its duties. The
Administrator shall also comply with the bonding requirements of ERISA
section 412.
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, has appointed a Committee
to administer the Plan on its behalf. The Company shall provide the
Trustee with the names and specimen signatures of any persons
authorized to serve as Committee members and act as or on its behalf.
Any Committee member appointed by the Company shall serve at the
pleasure of the Company, but may resign by written notice to the
Company. Committee members shall serve without compensation from the
Plan for such services. Except to the extent that the Company
otherwise provides, any delegation of duties to a Committee shall
carry with it the full discretionary authority of the Administrator to
complete such duties.
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15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company to the
Committee may be done by a majority of its members. The majority
may be expressed by a vote at a meeting or in writing without a
meeting, and a majority action shall be equivalent to an action
of all Committee members.
(b) Meetings. The Committee shall hold meetings upon such notice,
place and times as it determines necessary to conduct its
functions properly.
(c) Reliance by Trustee. The Committee may authorize one or more of
its members to execute documents on its behalf and may authorize
one or more of its members or other individuals who are not
members to give written direction to the Trustee in the
performance of its duties. The Committee shall provide such
authorization in writing to the Trustee with the name and
specimen signatures of any person authorized to act on its
behalf. The Trustee shall accept such direction and rely upon it
until notified in writing that the Committee has revoked the
authorization to give such direction. The Trustee shall not be
deemed to be on notice of any change in the membership of the
Committee, parties authorized to direct the Trustee in the
performance of its duties, or the duties delegated to and by the
Committee until notified in writing.
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16 MANAGEMENT OF INVESTMENTS
-------------------------
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in accordance
with those provisions of this Plan and Trust which relate to the
Trustee, for use in providing Plan benefits and paying Plan expenses
not paid directly by the Employer. Plan benefits will be drawn solely
from the Trust and paid by the Trustee as directed by the
Administrator. Notwithstanding, the Administrator may appoint, with
the approval of the Trustee, another trustee to hold and administer
Plan assets which do not meet the requirements of Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the Trustee to
invest Trust assets in one or more Investment Funds. The number and
composition of Investment Funds may be changed from time to time,
without the necessity of amending this Plan and Trust document. The
Trustee may establish reasonable limits on the number of Investment
Funds as well as the acceptable assets for any such Investment Fund.
Each of the Investment Funds may be comprised of any of the following:
(a) shares of a registered investment company, whether or not the
Trustee or any of its affiliates is an advisor to, or other
service provider to, such company;
(b) collective investment funds maintained by the Trustee, or any
other fiduciary to the Plan, which are available for investment
by trusts which are qualified under Code sections 401(a) and
501(a);
(c) individual equity and fixed income securities which are readily
tradable on the open market;
(d) guaranteed investment contracts issued by a bank or insurance
company;
(e) interest bearing deposits of the Trustee; and
(f) Company Stock.
Any Investment Fund assets invested in a collective investment fund,
shall be subject to all the provisions of the instruments establishing
and governing such fund. These instruments, including any subsequent
amendments, are incorporated herein by reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment manager
of each Investment Fund to maintain sufficient deposit or money market
type assets in each Investment Fund to handle the Fund's liquidity and
disbursement needs. Each Participant's and Beneficiary's Sweep
Account, which is used to hold assets pending investment or
disbursement, shall consist of interest bearing deposits of the
Trustee.
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16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in the
Investment Funds as soon as practicable after such instructions are
received from the Administrator, Participants, or Beneficiaries. Such
instructions shall remain in effect until changed by the
Administrator, Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company Shares
The Administrator shall be entitled to vote proxies or exercise any
shareholder rights relating to shares held on behalf of the Plan in a
registered investment company. Notwithstanding, the authority to vote
proxies and exercise shareholder rights related to such shares held in
a Custom Fund is vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the Trustee, an
investment manager for any Investment Fund established by the Trustee
solely for Participants of this Plan (a "Custom Fund"). The investment
manager may be the Administrator, Trustee or an investment manager
pursuant to ERISA section 3(38).The Administrator shall advise the
Trustee in writing of the appointment of an investment manager and
shall cause the investment manager to acknowledge to the Trustee in
writing that the investment manager is a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the Trustee, shall
be established for a Custom Fund. If a Custom Fund consists
solely of collective investment funds or shares of a registered
investment company (and sufficient deposit or money market type
assets to handle the Fund's liquidity and disbursement needs),
its' underlying instruments shall constitute the guidelines.
(b) Authority of Investment Manager. The investment manager of a
Custom Fund shall have the authority to vote or execute proxies,
exercise shareholder rights, manage, acquire, and dispose of
Trust assets. Notwithstanding, the authority to vote proxies and
exercise shareholder rights related to shares of Company Stock
held in a Custom Fund is vested as provided otherwise in Section
16.
(c) Custody and Trade Settlement. Unless otherwise expressly agreed
to by the Trustee, the Trustee shall maintain custody of all
Custom Fund assets and be responsible for the settlement of all
Custom Fund trades. For purposes of this section, shares of a
collective investment fund, shares of a registered investment
company and guaranteed investment contracts issued by a bank or
insurance company, shall be regarded as the Custom Fund assets
instead of the underlying assets of such instruments.
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(d) Limited Liability of Co-Fiduciaries. Neither the Administrator
nor the Trustee shall be obligated to invest or otherwise manage
any Custom Fund assets for which the Trustee or Administrator is
not the investment manager nor shall the Administrator or Trustee
be liable for acts or omissions with regard to the investment of
such assets except to the extent required by ERISA.
16.7 Authority to Segregate Assets
The Company may direct the Trustee to split an Investment Fund into
two or more funds in the event any assets in the Fund are illiquid or
the value is not readily determinable. In the event of such
segregation, the Company shall give instructions to the Trustee on
what value to use for the split-off assets, and the Trustee shall not
be responsible for confirming such value.
16.8 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund(s) the Fund(s) may be
comprised entirely of Company Stock and the Fund(s) may be as large as
necessary to comply with Participants' and Beneficiaries' investment
elections and as otherwise described in Appendix A. Effective July 1,
1994, the preceding reference to "and as otherwise described in
Appendix A" will no longer apply.
16.9 Participants Have Right to Vote and Tender Company Stock
Each Participant or Beneficiary shall be entitled to instruct the
Trustee as to the voting or tendering of any full or partial shares of
Company Stock held on his or her behalf in the Company Stock Fund(s).
Prior to such voting or tendering of Company Stock, each Participant
or Beneficiary shall receive a copy of the proxy solicitation or other
material relating to such vote or tender decision and a blank form for
the Participant or Beneficiary to complete which confidentially
instructs the Trustee to vote or tender such shares in the manner
indicated by the Participants or Beneficiaries. Upon receipt of such
instructions, the Trustee shall act with respect to such shares as
instructed. The Administrator shall instruct the Trustee with respect
to how to vote or tender any shares for which instructions are not
received from Participants or Beneficiaries.
16.10 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining the
applicability (and, if applicable, complying with) the requirements of
the Securities Act of 1933, as amended, the California Corporate
Securities Law of 1968, as amended, and any other applicable blue sky
law. The Administrator shall also specify what restrictive legend or
transfer restriction, if any, is required to be set forth on the
certificates for the securities and the procedure to be followed by
the Trustee to effectuate a resale of such securities.
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17 TRUST ADMINISTRATION
--------------------
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe those
provisions of this Plan and Trust which relate to the Trustee and to
do all things necessary or convenient to the administration of the
Trust, whether or not such powers are specifically set forth in this
Plan and Trust. Actions taken in good faith by the Trustee shall be
conclusive and binding on all interested parties, and shall be given
the maximum possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth in this
Plan and Trust, the Trustee shall have all the power, authority,
rights and privileges of an absolute owner of the Trust assets and,
not in limitation but in amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell, tender,
exchange, dispose of, encumber, hypothecate, pledge, mortgage,
lease, grant options respecting, repair, alter, insure, or
distribute any and all property in the Trust;
(b) borrow money, participate in reorganizations, pay calls and
assessments, vote or execute proxies, exercise subscription or
conversion privileges, exercise options and register any
securities in the Trust in the name of the nominee, in federal
book entry form or in any other form as will permit title thereto
to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate, adjust,
settle, enforce or foreclose, by judicial proceedings or
otherwise, or defend against the same, any obligations or claims
in favor of or against the Trust; and
(d) lend, through a collective investment fund, any securities held
in such collective investment fund to brokers, dealers or other
borrowers and to permit such securities to be transferred into
the name and custody and be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any Trust
assets outside the jurisdiction of the United States, except as
authorized by ERISA section 404(b).
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold federal
(and, if applicable, state) income taxes with regard to any
Eligible Rollover Distribution that is not paid directly to an
Eligible Retirement Plan in a Direct Rollover in accordance with
the Participant's withholding election or as required by law if
no election is made or the election is less than the amount
required by law. With regard to any taxable distribution that is
not an Eligible Rollover Distribution, the Trustee shall
calculate and withhold federal (and, if applicable, state) income
taxes in accordance with the Participant's withholding election
or as required by law if no election is made.
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(b) Taxes Due From Investment Funds. The Trustee shall pay from the
Investment Fund any taxes or assessments imposed by any taxing or
governmental authority on such Fund or its income, including
related interest and penalties.
17.5 Trustee Duties and Limitations
Unless otherwise agreed to by the Trustee, the Trustee's duties shall
be confined to construing the terms of the Plan and Trust as they
relate to the Trustee, receiving funds on behalf of and making
payments from the Trust, safeguarding and valuing Trust assets, and
investing and reinvesting Trust assets in the Investment Funds as
directed by the Administrator or Participants. The Trustee shall have
no duty or authority to ascertain whether Contributions are in
compliance with the Plan, to enforce collection or to compute or
verify the accuracy or adequacy or any amount to be paid to it by the
Employer. The Trustee shall not be liable for the proper application
of any part of the Trust with respect to any disbursement made at the
direction of the Administrator.
17.6 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable period)
following the close of the Plan Year, the Trustee shall provide
the Administrator with an annual accounting of Trust assets and
information to assist the Administrator in meeting ERISA's annual
reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records and provide
sufficient reporting to allow the Administrator to properly
monitor the Trust's assets and activity.
(c) Administrator Approval. Approval of any Trustee accounting will
automatically occur 90 days after such accounting has been
received by the Administrator, unless the Administrator files a
written objection with the Trustee within such time period. Such
approval shall be final as to all matters and transactions stated
or shown therein and binding upon the Administrator.
17.7 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is not
readily tradable and listed on a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, the
Trustee may engage a qualified independent appraiser to determine the
fair market value of such property, and the appraisal fees shall be
paid from the Investment Fund containing the asset.
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17.8 Legal Counsel
The Trustee may consult with legal counsel of its choice, including
counsel for the Employer or counsel of the Trustee, upon any question
or matter arising under this Plan and Trust. When relied upon by the
Trustee, the opinion of such counsel shall be evidence that the
Trustee has acted in good faith.
17.9 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such as may be
mutually agreed upon by the Company and the Trustee. Trustee fees and
all reasonable expenses of counsel and advisors retained by the
Trustee shall be paid in accordance with Section 6.
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18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any Employee. The
Employer expressly reserves the right to discharge an Employee at any
time, with or without cause, without regard to the effect such
discharge would have upon the Employee's interest in the Plan.
18.2 Limited Return of Contributions
Except as provided in this paragraph, (1) Plan assets shall not revert
to the Employer nor be diverted for any purpose other than the
exclusive benefit of Participants or their Beneficiaries; and (2) a
Participant's vested interest shall not be subject to divestment. As
provided in ERISA section 403(c)(2), the actual amount of a
Contribution made by the Employer (or the current value of the
Contribution if a net loss has occurred) may revert to the Employer
if:
(a) such Contribution is made by reason of a mistake of fact;
(b) initial qualification of the Plan under Code section 401(a) is
not received and a request for such qualification is made within
the time prescribed under Code section 401(b) (the existence of
and Contributions under the Plan are hereby conditioned upon such
qualification); or
(c) such Contribution is not deductible under Code section 404 (such
Contributions are hereby conditioned upon such deductibility) in
the taxable year of the Employer for which the Contribution is
made.
The reversion to the Employer must be made (if at all) within one year
of the mistaken payment of the Contribution, the date of denial of
qualification, or the date of disallowance of deduction, as the case
may be. A Participant shall have no rights under the Plan with respect
to any such reversion.
18.3 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not otherwise
required by law, no benefit provided by the Plan may be anticipated,
assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit with
respect to a Participant pursuant to a QDRO, or
(b) to use a Participant's vested Account balance as security for a
loan from the Plan which is permitted pursuant to Code section
4975.
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18.4 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the Administrator
reasonably believes that any payee is legally incapable of giving a
valid receipt and discharge for any payment due him or her, the
Administrator shall have the payment of the benefit, or any part
thereof, made to the person (or persons or institution) whom it
reasonably believes is caring for or supporting the payee, unless it
has received due notice of claim therefor from a duly appointed
guardian or conservator of the payee. Any payment shall to the extent
thereof, be a complete discharge of any liability under the Plan to
the payee.
18.5 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to payment of a
Plan benefit after a reasonable search, the Administrator may at any
time thereafter treat such person's Account as forfeited and use such
amount to offset any Employer Contributions or as otherwise provided
in Section 8. If such person subsequently presents the Administrator
with a valid claim for the benefit, such person shall be paid the
amount treated as forfeited, plus the interest that would have been
earned in the Sweep Account to the date of determination. The
Administrator shall direct the Trustee to pay the amount from the
Forfeiture Account or through an additional Employer Contribution.
18.6 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees with the
Administrator's determination of his or her right to Plan
benefits must submit a written claim and exhaust this claim
procedure before legal recourse of any type is sought. The claim
must include the important issues the interested party believes
support the claim. The Administrator, pursuant to the authority
provided in this Plan, shall either approve or deny the claim.
(b) Process for Denying a Claim. The Administrator's partial or
complete denial of an initial claim must include an
understandable, written response covering (1) the specific
reasons why the claim is being denied (with reference to the
pertinent Plan provisions) and (2) the steps necessary to perfect
the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested party may make
a written appeal of the Administrator's initial decision, and the
Administrator shall respond in the same manner and form as
prescribed for denying a claim initially.
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<PAGE>
(d) Time Frame. The initial claim, its review, appeal and final
review shall be made in a timely fashion, subject to the
following time table:
Days to Respond
Action From Last Action
------ ----------------
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the maximum
response time for its initial and final review if it provides an
explanation within the normal period of why an extension is
needed and when its decision will be forthcoming.
18.7 Construction
Headings are included for reading convenience. The text shall control
if any ambiguity or inconsistency exists between the headings and the
text. The singular and plural shall be interchanged wherever
appropriate. References to Participant shall include Beneficiary when
appropriate and even if not otherwise already expressly stated.
18.8 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and administered
under ERISA and other applicable federal laws and, where not otherwise
preempted, by the laws of the State of California. If any provision of
this Plan and Trust shall become invalid or unenforceable, that fact
shall not affect the validity or enforceability of any other provision
of this Plan and Trust. All provisions of this Plan and Trust shall be
so construed as to render them valid and enforceable in accordance
with their intent.
18.9 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries against
any and all liabilities resulting from any action or inaction,
(including a Plan termination in which the Company fails to apply for
a favorable determination from the Internal Revenue Service with
respect to the qualification of the Plan upon its termination), in
relation to the Plan or Trust (1) including (without limitation)
expenses reasonably incurred in the defense of any claim relating to
the Plan or its assets, and amounts paid in any settlement relating to
the Plan or its assets, but (2) excluding liability resulting from
actions or inactions made in bad faith, or resulting from the
negligence or willful misconduct of the Trustee. The Company shall
have the right, but not the obligation, to conduct the defense of any
action to which this Section applies. The Plan fiduciaries are not
entitled to indemnity from the Plan assets relating to any such
action.
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19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
-----------------------------------------------
19.1 Amendment
The Company reserves the right to amend this Plan and Trust at any
time, to any extent and in any manner it may deem necessary or
appropriate. The Company (and not the Trustee) shall be responsible
for adopting any amendments necessary to maintain the qualified status
of this Plan and Trust under Code sections 401(a) and 501(a). If the
Committee is acting as the Administrator in accordance with Section
15.6, it shall have the authority to adopt Plan and Trust amendments
which have no substantial adverse financial impact upon an Employer or
the Plan. All interested parties shall be bound by any amendment,
provided that no amendment shall:
(a) become effective unless it has been adopted in accordance with
the procedures set forth in Section 19.5;
(b) except to the extent permissible under ERISA and the Code, make
it possible for any portion of the Trust assets to revert to an
Employer or to be used for, or diverted to, any purpose other
than for the exclusive benefit of Participants and Beneficiaries
entitled to Plan benefits and to defray reasonable expenses of
administering the Plan;
(c) decrease the rights of any Employee to benefits accrued
(including the elimination of optional forms of benefits) to the
date on which the amendment is adopted, or if later, the date
upon which the amendment becomes effective, except to the extent
permitted under ERISA and the Code; nor
(d) permit an Employee to be paid the balance of his or her Pre-Tax
Account unless the payment would otherwise be permitted under
Code section 401(k).
19.2 Merger
This Plan and Trust may not be merged or consolidated with, nor may
its assets or liabilities be transferred to, another plan unless each
Participant and Beneficiary would, if the resulting plan were then
terminated, receive a benefit just after the merger, consolidation or
transfer which is at least equal to the benefit which would be
received if either plan had terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation of: (1)
substantially all of the Employer's assets used in a trade or business
to an unrelated corporation, or (2) a sale of such Employer's interest
in a subsidiary to an unrelated entity or individual, lump sum
distributions shall be permitted from the Plan, except as provided
below, to Participants with respect to Employees who continue
employment with the corporation acquiring such assets or who continue
employment with such subsidiary, as applicable.
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Notwithstanding, distributions shall not be permitted if the purchaser
agrees, in connection with the sale, to be substituted as the Company
as the sponsor of the Plan or to accept a transfer of the assets and
liabilities representing the Participants' benefits into a plan of the
purchaser or a plan to be established by the purchaser.
19.4 Plan Termination
The Company may, at any time and for any reason, terminate the Plan in
accordance with the procedures set forth in Section 19.5, or
completely discontinue contributions. Upon either of these events, or
in the event of a partial termination of the Plan within the meaning
of Code section 411(d)(3), the Accounts of each affected Employee who
has not yet incurred a Break in Service shall be fully vested. If no
successor Plan is established or maintained, lump sum distributions
will be made in accordance with the terms of the Plan as in effect at
the time of the Plan's termination or as thereafter amended provided
that a post-termination amendment will not be effective to the extent
that it violates Section 19.1 unless it is required in order to
maintain the qualified status of the Plan upon its termination. The
Trustee's and Employer's authority shall continue beyond the Plan's
termination date until all Trust assets have been liquidated and
distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the adoption of any
amendment or termination (a "Change") of this Plan and Trust:
(a) The Company may adopt any Change by action of its board of
directors in accordance with its normal procedures.
(b) The Committee, if acting as Administrator in accordance with
Section 15.6, may adopt any amendment within the scope of its
authority provided under Section 19.1 and in the manner specified
in Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and (2) signed and
dated by an executive officer of the Company or, in the case of
an amendment adopted by the Committee, at least one of its
members.
(d) If the effective date of any Change is not specified in the
document setting forth the Change, it shall be effective as of
the date it is signed by the last person whose signature is
required under clause (2) above, except to the extent that
another effective date is necessary to maintain the qualified
status of this Plan and Trust under Code sections 401(a) and
501(a).
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(e) No change shall become effective until it is accepted and signed
by the Trustee (which acceptance shall not unreasonably be
withheld).
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate its Plan
participation by action of its board of directors in accordance with
its normal procedures. Written notice of such action shall be signed
and dated by an executive officer of the Employer and delivered to the
Company. If the effective date of such action is not specified, it
shall be effective on, or as soon as reasonably practicable, after the
date of delivery. Upon the Employer's request, the Company may
instruct the Trustee and Administrator to spin off all affected
Accounts and underlying assets into a separate qualified plan under
which the Employer shall assume the powers and duties of the Company.
Alternatively, the Company may treat the event as a partial
termination described above or continue to maintain the Accounts under
the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and Trust or may be
removed by the Company at any time upon at least 90 days written
notice (or less if agreed to by both parties). In such event, the
Company shall appoint a successor trustee by the end of the notice
period. The successor trustee shall then succeed to all the powers and
duties of the Trustee under this Plan and Trust. If no successor
trustee has been named by the end of the notice period, the Company's
chief executive officer shall become the trustee, or if he or she
declines, the Trustee may petition the court for the appointment of a
successor trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as is administratively feasible after
its resignation or removal as Trustee, the Trustee shall transfer
to the successor trustee all property currently held by the
Trust. However, the Trustee is authorized to reserve such sum of
money as it may deem advisable for payment of its accounts and
expenses in connection with the settlement of its accounts or
other fees or expenses payable by the Trust. Any balance
remaining after payment of such fees and expenses shall be paid
to the successor trustee.
(b) Final Accounting. The Trustee shall provide a final accounting to
the Administrator within 90 days of the date Trust assets are
transferred to the successor trustee.
(c) Administrator Approval. Approval of the final accounting will
automatically occur 90 days after such accounting has been
received by the Administrator, unless the Administrator files a
written objection with the Trustee within such time period. Such
approval shall be final as to all matters and transactions stated
or shown therein and binding upon the Administrator.
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APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered to Participants and Beneficiaries as of the
Effective Date include this set of daily valued funds:
Category Funds
-------- -----
Money Market Money Market
Fixed Income U.S. Treasury Allocation
Balanced Asset Allocation
Equity Company Stock
International Equity
S&P 500 Stock
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the Money Market
Fund.
III. Transition Frozen Company Stock Fund
As of the Effective Date, a portion of each Participant's or Beneficiary's
Profit Sharing Account is invested in shares of Company Stock as directed
by the Company. A separate Company Stock Fund, designated as the Frozen
Company Stock Fund, shall be established as of the Effective Date. The Fund
will continue to operate as a Frozen Fund subject to investment and
disbursement restrictions as described in item IV until such time as it is
determined that it is no longer necessary to impose the investment and
disbursement restrictions. At or after such time the assets of the Frozen
Company Stock Fund will be transferred to the Company Stock Fund.
Effective July 1, 1994, it was determined that it was no longer necessary
to impose the investment and disbursement restrictions as described in item
IV. The Frozen Company Stock Fund will no longer operate as a Frozen Fund
subject to investment and disbursement restrictions as described in item
IV. Effective on or about December 31, 1994 the assets of the Frozen
Company Stock Fund will be transferred to the Company Stock Fund.
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<PAGE>
APPENDIX A - INVESTMENT FUNDS
(continued)
IV. Contribution Accounts For Which Investment and Disbursement is Restricted
A Participant or Beneficiary may direct the investment of his or her entire
Account except for the portion of his or her Profit Sharing Account which
as of the Effective Date is invested in the Company Stock Fund designated
as the Frozen Company Stock Fund and earnings thereon to be invested in the
same.
The portion of a Participant's or Beneficiary's Profit Sharing Account
invested in the Frozen Company Stock Fund is restricted from transfers,
loans, and withdrawals until such time as it is determined that it is no
longer necessary to impose the investment and disbursement restrictions.
Effective July 1, 1994, it was determined that it was no longer necessary
to impose such investment and disbursement restrictions thereby permitting
a Participant or Beneficiary to direct the investment of his or her entire
Account.
V. Maximum Percentage Restrictions Applicable to Certain Investment Funds
As of the Effective Date, there are no maximum percentage restrictions
applicable to any Investment Funds.
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APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
1) Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants, except that the Employer shall pay the fees related to the
Company Stock Fund(s).
2) Recordkeeping Fees: These are paid by the Employer on a quarterly basis.
3) Loan Fees: A $3.50 per month fee is assessed and billed/collected quarterly
from the Account of each Participant who has an outstanding loan balance.
4) Extra Investment Changes: For each change by a Participant, in excess of 6
changes per year, a $10 fee will be assessed and billed/collected quarterly
from the Participant's Account.
5) Recurring Payment Fees: A $3.00 per check fee will be assessed and
billed/collected quarterly from the Participant's Account.
6) Additional Fees Paid by Employer: All other Plan related fees and expenses
shall be paid by the Employer. To the extent that the Administrator later
elects that any such fees shall be borne by Participants, estimates of the
fees shall be determined and reconciled, at least annually, and the fees
will be assessed monthly and billed/collected from Accounts quarterly.
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<PAGE>
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant loans shall
be equal to the Trustee's prime rate, plus 2%.
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<PAGE>
Amendment No. 1
to the
The Harper Group Savings Plan and Trust
WHEREAS, The Harper Group, Inc. (the "Company"), approved and adopted The
Harper Group Profit Sharing and Tax Shelter Investment Plan, as renamed
effective November 1, 1993, The Harper Group Savings Plan (the "Plan") and Trust
Agreement (the "Trust") which were originally effective November 19, 1973 and
most recently restated effective November 1, 1993;
WHEREAS, Section 19.1 of the Plan and Trust provides that the Company
reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that Sections 5 and 13 are amended effective
January 1, 1995, Section 1 is amended effective January 1, 1996 and Section 11
is amended effective May 1, 1996 as follows:
Effective January 1, 1995:
- --------------------------
1. Section 5 is amended to restate (a) and (b) of Subsection 5.1 each in its
entirety as follows:
5.1 Company Match Contributions
(a) Frequency and Eligibility.
Basic Contribution: For each period for which Participants'
Contributions are made, the Employer shall make basic Company
Match Contributions, as described in the following Allocation
Method paragraph, on behalf of each Participant who contributed
during the period.
For each Plan Year, the Employer shall make basic Company Match
Contributions, referred to as reconciling basic Company Match
Contributions, as described in the following Allocation Method
paragraph, on behalf of each Participant who contributed during
the period and whose basic Company Match Contributions would be
greater if the percentage of considered Pay as described in the
following Allocation Method paragraph was based on Pay during the
portion of the Plan Year in which he or she was a Participant and
an Eligible Employee rather than on Pay for each period for which
he or she made Participant Contributions.
Supplemental Contribution: For each Plan Year, the Employer may
make supplemental Company Match Contributions, as described in
the following Allocation Method paragraph, on behalf of each
Participant who contributed during the period and was an Eligible
Employee on the last day of the Plan Year and each Participant
who is otherwise eligible but who ceased being an Employee during
the Plan Year after having attained age 65, or by reason of his
or her Disability or death.
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<PAGE>
(b) Allocation Method.
Basic Contribution: The basic Company Match Contributions
(including any Forfeiture Account amounts applied as basic
Company Match Contributions in accordance with Section 8.4) for
each period shall total 50% of each eligible Participant's
Pre-Tax Contributions for the period, provided that no basic
Company Match Contributions (and Forfeiture Account amounts)
shall be made based upon a Participant's Contributions in excess
of 6% of his or her Pay. The Employer may change the basic 50%
matching rate or the 6% of considered Pay to any other
percentages, including 0%, generally by notifying eligible
Participants in sufficient time to adjust their Contribution
elections prior to the start of the period for which the new
percentages apply.
The reconciling basic Company Match Contribution (including any
Forfeiture Account amounts applied as reconciling basic Company
Match Contributions in accordance with Section 8.4) for each
period shall total the difference, if any, of the basic Company
Match Contributions that would have been credited to each
eligible Participant if the 6% of Pay (or such percentage of Pay
as in effect) was based on Pay during the portion of the Plan
Year in which he or she was a Participant and an Eligible
Employee rather than on Pay for each period for which he or she
made Participant Contributions.
Supplemental Contribution: The supplemental Company Match
Contributions (including any Forfeiture Account amounts applied
as supplemental Company Match Contributions in accordance with
Section 8.4) for the Plan Year shall total a percentage, as
determined by the Employer, of each eligible Participant's
Pre-Tax Contributions for the Plan Year, provided that no
supplemental Company Match Contributions (and Forfeiture Account
amounts) shall be made based upon a Participant's Contributions
in excess of the percentage of his or her Pay eligible for basic
Company Match Contributions.
2. Section 13 is amended to restate Subsection 13.2 in its entirety as
follows:
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this Plan and
any other defined contribution plan maintained by any Related Company
for any Plan Year shall not exceed the lesser of (1) 25% of his or her
Taxable Income or (2) $30,000 (as adjusted for the cost of living
pursuant to Code section 415(d)).
Effective January 1, 1996:
- --------------------------
1. Section 1 is amended to restate Subsection 1.51 in its entirety as follows:
1.51 "Trustee". BZW Barclays Global Investors, National Association.
74
<PAGE>
Effective May 1, 1996:
- ----------------------
1. Section 11 is amended to restate the introduction to Subsection 11.2 and to
restate Subsection 11.3, including the Title thereof, each in its entirety
as follows:
11.2 Payment Form and Medium
Except to the extent otherwise provided by Section 11.3, a Participant
may elect to be paid in any of these forms:
11.3 Distribution of Small Amounts
If after a Participant's employment with all Related Companies ends,
the Participant's vested Account balance is $3,500 or less, and if at
the time of any prior in-service withdrawal or distribution the
Participant's vested Account balance did not exceed $3,500, the
Participant's benefit shall be paid as a single lump sum as soon as
administratively feasible in accordance with procedures prescribed by
the Administrator.
Date: , 19 The Harper Group, Inc.
---------------------- ----
By:
----------------------------------
Title:
-----------------------------
The provisions of the above amendment which relate to the Trustee are hereby
approved and executed.
Date: , 19 BZW Barclays Global Investors,
---------------------- ----
National Association
By:
----------------------------------
Title:
-----------------------------
Date: , 19 BZW Barclays Global Investors,
---------------------- ----
National Association
By:
----------------------------------
Title:
-----------------------------
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<PAGE>
Amendment No. 2
to the
Circle International Group Savings Plan and Trust
WHEREAS, Circle International Group, Inc. (the "Company") (formerly known
as The Harper Group, Inc.), approved and adopted The Harper Group Profit Sharing
and Tax Shelter Investment Plan as renamed, effective November 1, 1993, The
Harper Group Savings Plan and again subsequently renamed, effective May 13,
1997, the Circle International Group Savings Plan (the "Plan") and Trust
Agreement (the "Trust") which were originally effective November 19, 1973, most
recently restated effective November 1, 1993 and subsequently amended;
WHEREAS, effective May 13, 1997, The Harper Group, Inc. became known as
Circle International Group, Inc. and The Harper Group Savings Plan was renamed
the Circle International Group Savings Plan;
WHEREAS, Section 19.1 of the Plan and Trust provides that the Company
reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that Sections 1 and 18 are amended effective
October 13, 1996, Section 1 is amended effective October 15, 1996, Section 3 is
amended effective February 3, 1997 and Section 1 is amended effective May 13,
1997 as follows:
Effective October 13, 1996:
- ---------------------------
1. Section 1 is amended to add a new Subsection 1.52 and to redesignate each
subsequent Subsection as follows:
1.52 "USERRA". The Uniformed Services Employment and Reemployment Rights
Act of 1994.
2. Section 18 is amended to add a new Subsection 18.2 and to redesignate each
subsequent Subsection as follows:
18.2 Compliance With USERRA
Notwithstanding any provision of the Plan to the contrary, with regard
to an Employee who serves in qualified military service (as defined by
Code section 414(u)(5)) and is reemployed on or after December 12,
1994, within the time required by USERRA, contributions shall be made
and benefits and service credit shall be provided with respect to his
or her qualified military service in accordance with Code section
414(u). Furthermore, notwithstanding any provision of the Plan to the
contrary, Participant loan payments may be suspended during a period
of qualified military service.
Effective October 15, 1996:
- ---------------------------
1. Section 1 is amended to restate Subsection 1.51 in its entirety as follows:
1.51 "Trustee". Barclays Global Investors, National Association.
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<PAGE>
Effective February 3, 1997:
- ---------------------------
1. Section 3 is amended to restate Subsection 3.6 in its entirety as follows:
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover Contributions, may
only be made through payroll deduction. Such amounts shall be paid to
the Trustee in cash and posted to each Participant's Account(s) as
soon as such amounts can reasonably be separated from the Employer's
general assets and balanced against the specific amount made on behalf
of each Participant. In no event, however, shall such amounts be paid
to the Trustee more than 15 business days following the end of the
month that includes the date amounts are deducted from a Participant's
Pay (or as that maximum period may be otherwise extended by ERISA).
Pre-Tax Contributions shall be treated as Contributions made by an
Employer in determining tax deductions under Code section 404(a).
Effective May 13, 1997:
- -----------------------
1. Section 1 is amended to restate Subsections 1.9 and 1.39 each in its
entirety as follows:
1.9 "Company". Circle International Group, Inc. or any successor by
merger, purchase or otherwise.
1.39 "Plan". The Circle International Group Savings Plan set forth in this
document, as from time to time amended.
Date: , 19 The Circle International Group, Inc.
---------------------- ----
By:
----------------------------------
Title:
-----------------------------
The provisions of the above amendment which relate to the Trustee are hereby
approved and executed.
Date: , 19 Barclays Global Investors,
---------------------- ----
National Association
By:
----------------------------------
Title:
-----------------------------
Date: , 19 Barclays Global Investors,
---------------------- ----
National Association
By:
----------------------------------
Title:
-----------------------------
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<PAGE>
Amendment No. 3
to the
Circle International Group Savings Plan and Trust
WHEREAS, Circle International Group, Inc. (the "Company") (formerly known
as The Harper Group, Inc.), approved and adopted The Harper Group Profit Sharing
and Tax Shelter Investment Plan as renamed, effective November 1, 1993, The
Harper Group Savings Plan and again subsequently renamed, effective May 13,
1997, the Circle International Group Savings Plan (the "Plan") and Trust
Agreement (the "Trust") which were originally effective November 19, 1973, most
recently restated effective November 1, 1993 and subsequently amended;
WHEREAS, Section 19.1 of the Plan and Trust provides that the Company
reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that Sections 1, 3, 4, 9, 11, 12 and 15 are
effective January 1, 1997, Section 13 is amended effective January 1, 1998 and
Sections 13 and 14 are amended effective January 1, 2000 as follows:
Effective January 1, 1997:
- --------------------------
1. Section 1 is amended to restate Subsections 1.11, 1.13, 1.18 and 1.29, to
hereby delete the last paragraph of Subsection 1.37, to add a new
Subsection 1.43 and to redesignate each subsequent Subsection as follows:
1.11 "Compensation". The sum of a Participant's Taxable Income and salary
reductions, if any, pursuant to Code section 125, 402(e)(3),
402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or 457.
For purposes of determining benefits under the Plan, Compensation is
limited to $150,000 per Plan Year (as adjusted for cost of living
increases pursuant to Code sections 401(a)(17) and 415(d)).
For purposes of determining HCEs and key employees and for Plan Years
commencing after December 31, 1997, for purposes of Section 13.2,
Compensation for the entire Plan Year shall be used. For purposes of
determining ADP and ACP, Compensation shall be limited to amounts paid
to an Eligible Employee while a Participant.
1.13 "Contribution Dollar Limit". The annual limit placed on each
Participant's Pre-Tax Contributions, which shall be $7,000 per
calendar year (as adjusted for cost of living increases pursuant to
Code sections 402(g)(5) and 415(d)). For purposes of this Section, a
Participant's Pre-Tax Contributions shall include (i) any employer
contribution under a qualified cash or deferred arrangement (as
defined in Code section 401(k)) to the extent not includible in gross
income for the taxable year under Code section 402(e)(3) (determined
without regard to Code section 402(g)), (ii) any employer contribution
to the extent not includible in gross income for the taxable year
under Code section 402(h)(1)(B) (determined without regard to Code
section 402(g)), (iii) any employer contribution to purchase an
annuity contract under Code section 403(b) under a salary reduction
agreement (within the meaning of Code section 3121(a)(5)(D)) and (iv)
any elective employer contribution under Code section 408(p)(2)(A)(i).
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1.18 "Eligible Employee". An Employee of an Employer, except any Employee:
(a) who is treated as an Employee because he or she is a Leased
Employee; or
(b) who is a nonresident alien who (I) either receives no earned
income (within the meaning of Code section 911(d)(2)), from
sources within the United States under Code section 861(a)(3); or
(ii) receives such earned income from such sources within the
United States but such income is exempt from United States income
tax under an applicable income tax convention.
1.29 "Leased Employee". An individual, not otherwise an Employee, who,
pursuant to an agreement between a Related Company and a leasing
organization, has performed, on a substantially full-time basis, for a
period of at least 12 months, services under the primary direction or
control of the Related Company, unless:
(a) the individual is covered by a money purchase pension plan
maintained by the leasing organization and meeting the
requirements of Code section 414(n)(5)(B), and
(b) such individuals do not constitute more than 20% of all
Non-Highly Compensated Employees of all Related Companies (within
the meaning of Code section 414(n)(5)(C)(ii)).
1.43 "Required Beginning Date". The latest date benefit payments shall
commence to a Participant. Such date shall mean the April 1 that next
follows the calendar year in which the Participant attains age 70 1/2.
2. Section 3 is amended to restate Subsection 3.5 in its entirety as follows:
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Pre-Tax Contributions for a calendar year to
the Plan and comparable contributions to any other qualified defined
contribution plan in excess of the Contribution Dollar Limit may
notify the Administrator in writing by the following March 1 (or as
late as April 14 if allowed by the Administrator) that an excess has
occurred. In this event, the amount of the excess specified by the
Participant, adjusted for investment gain or loss, shall be refunded
to him or her by the April 15 following the year of deferral and shall
not be included as an Annual Addition (as defined in Section 13.1)
under Code section 415 for the year contributed. The excess amounts
shall first be taken from unmatched Pre-Tax Contributions and then
from matched Pre-Tax Contributions. Any Company Match Contributions
attributable to refunded excess Pre-Tax Contributions as described in
this Section, adjusted for investment gain or loss, shall be forfeited
and used as described in Section 8. Refunds and forfeitures shall not
include investment gain or loss for the period between the end of the
applicable calendar year and the date of distribution or forfeiture.
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<PAGE>
3. Section 4 is amended to restate the Heading thereof and to restate
Subsection 4.2, including the Title thereof, each in its entirety as
follows:
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
----------------------------------------------------------------------
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets in cash
or in kind directly from another qualified plan or to transfer assets
in cash or in kind directly to another qualified plan; provided that
receipt of a transfer shall not be directed if:
(a) any amounts are not exempted by Code section 401(a)(11)(B) from
the annuity requirements of Code section 417 unless the Plan
complies with such requirements; or
(b) any amounts include benefits protected by Code section 411(d)(6)
which would not be preserved under applicable Plan provisions.
The Trustee may refuse to receive any such transfer if:
(a) the Trustee finds the in kind assets unacceptable; or
(b) instructions for posting amounts to Participants' Accounts are
incomplete.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee. To the extent a
receipt of a transfer includes Participant loans, such loans shall
continue in effect subject to the terms and conditions in effect as of
the date of the transfer.
4. Section 9 is amended to restate Subsection 9.9, including the Title
thereof, in its entirety as follows:
9.9 Repayment Suspension, Default and Call Feature
(a) Repayment Suspension. The Administrator may agree to a suspension
of loan payments for up to six months for a Participant who is on
a Leave of Absence without pay. During the suspension period,
interest shall continue to accrue on the outstanding loan
balance. At the expiration of the suspension period all
outstanding loan payments and accrued interest thereon shall be
due unless otherwise agreed upon by the Administrator.
(b) Default. A loan is treated as in default if a scheduled loan
payment is not made at the time required. A Participant shall
then have a grace period to cure the default before it becomes
final. Such grace period shall be for a period that does not
extend beyond the last day of the calendar quarter following the
calendar quarter in which the scheduled loan payment was due or
such lesser or greater maximum period as may later be authorized
by Code section 72(p).
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In the event a default is not cured within the grace period, the
Administrator may direct the Trustee to report the outstanding
principal balance of the loan and accrued interest thereon as a
taxable distribution to the Participant. As soon as a Plan
withdrawal or distribution to such Participant would otherwise be
permitted, the Administrator may instruct the Trustee to execute
upon its security interest in the Participant's Account by
distributing the note to the Participant.
(c) Call Feature. The Administrator shall have the right to call any
Participant loan once a Participant's employment with all Related
Companies has terminated or if the Plan is terminated.
5. Section 11 is amended to restate the Heading thereof, to restate the first
paragraph of Subsection 11.1 in its entirety, to add a new second
paragraph, to restate Subsections 11.5 and 11.7 and items (a) and (c) of
Subsection 11.8 each in its entirety as follows:
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S
---------------------------------------------------------------------------
REQUIRED BEGINNING DATE
-----------------------
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his or her
death, shall be provided with information regarding all optional times
and forms of distribution available under the Plan, including the
notices prescribed by Code sections 402(f) and 411(a)(11). Subject to
the other requirements of this Section, a Participant, or his or her
Beneficiary in the case of his or her death, may elect, in such manner
and with such advance notice as prescribed by the Administrator, to
have his or her vested Account balance paid to him or her beginning
upon any Settlement Date following the Participant's termination of
employment with all Related Companies and a reasonable period of time
during which the Administrator shall process, and inform the Trustee
of, the Participant's termination or, if earlier, at the time of the
Participant's Required Beginning Date.
Notwithstanding, if a Participant's termination of employment with all
Related Companies does not constitute a separation from service for
purposes of Code section 401(k)(2)(B)(i)(I) or otherwise constitute an
event set forth under Code section 401(k)(10)(A)(ii) or (iii) as
described in Section 19.3, the portion of a Participant's Account
subject to the distribution rules of Code section 401(k) may not be
distributed until such time as he or she separates from service for
purposes of Code section 401(k)(2)(B)(i)(I) or, if earlier, upon such
other event as described in Code section 401(k)(2)(B) and as provided
for in the Plan.
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11.5 Latest Commencement Permitted
In addition to any other Plan requirements and unless a Participant
elects otherwise, his or her benefit payments shall begin not later
than 60 days after the end of the Plan Year in which he or she attains
his or her Normal Retirement Date or retires, whichever is later.
However, if the amount of the payment or the location of the
Participant (after a reasonable search) cannot be ascertained by that
deadline, payment shall be made no later than 60 days after the
earliest date on which such amount or location is ascertained but in
no event later than the Participant's Required Beginning Date. A
Participant's failure to elect in such manner as prescribed by the
Administrator to have his or her vested Account balance paid to him or
her, shall be deemed an election by the Participant to defer his or
her distribution but in no event shall his or her benefit payments
commence later than his or her Required Beginning Date.
If benefit payments cannot begin at the time required because the
location of the Participant cannot be ascertained (after a reasonable
search), the Administrator may, at any time thereafter, treat such
person's Account as forfeited subject to the provisions of Section
18.6.
11.7 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or her sole
primary Beneficiary, the minimum annual distribution for each calendar
year, beginning with the calendar year preceding the calendar year
that includes the Participant's Required Beginning Date, shall not be
less than the quotient obtained by dividing (a) the Participant's
vested Account balance as of the last Trade Date of the preceding year
by (b) the applicable divisor as determined under the incidental
benefit requirements of Code section 401(a)(9).
11.8 Payment to Beneficiary
(a) If the Participant dies after his or her Required Beginning Date,
payment to his or her Beneficiary must be made at least as
rapidly as provided in the Participant's distribution election;
(c) If the Participant and the surviving spouse who is the
Beneficiary die (i) before the Participant's Required Beginning
Date and (ii) before payments have begun to the spouse, the
spouse shall be treated as the Participant in applying these
rules.
6. Section 12 is amended to hereby delete item (h) of Subsection 12.1, to
redesignate each subsequent item, to restate items (h) and (i) (formerly
items (i) and (j)) of Subsection 12.1 each in its entirety, to hereby
delete item (j) (formerly item (k)) of Subsection 12.1, to redesignate each
subsequent item, to restate Subsection 12.2 and the Introduction and items
(a) and (b) of Subsection 12.3 each in its entirety as follows and to
hereby delete item (d) of Subsection 12.3:
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12.1 Contribution Limitation Definitions
(h) "HCE" or "Highly Compensated Employee". With respect to all
Related Companies, an Employee who (in accordance with Code
section 414(q)):
(1) Was a more than 5% Owner (within the meaning of Code section
414(q)(2)) at any time during the Plan Year or the preceding
Plan Year; or
(2) Received Compensation during the preceding Plan Year in
excess of $80,000 (as adjusted for such Year pursuant to
Code sections 414(q)(1) and 415(d)) or, if the Company
elects for such preceding Plan Year, "in excess of $80,000
(as adjusted for such Year pursuant to Code sections
414(q)(1) and 415(d)) and was a member of the "top-paid
group" (within the meaning of Code section 414(q)(3)) for
such preceding Plan Year" shall be substituted for the
preceding reference to "in excess of $80,000 (as adjusted
for such Year pursuant to Code sections 414(q)(1) and
415(d))".
A former Employee shall be treated as an HCE if (1) such
former Employee was an HCE when he or she separated from
service, or (2) such former Employee was an HCE in service
at any time after attaining age 55.
The determination of who is an HCE and the determination of
the number and identity of Employees in the top-paid group
shall be made in accordance with Code section 414(q).
(i) "HCE Group" and "NHCE Group". With respect to all Related
Companies, the respective group of HCEs and NHCEs who are
eligible to have amounts contributed on their behalf for the Plan
Year, including Employees who would be eligible but for their
election not to participate or to contribute, or because their
Pay is greater than zero but does not exceed a stated minimum.
For Plan Years commencing after December 31, 1998, with respect
to all Related Companies, if the Plan permits participation prior
to an Eligible Employee's satisfaction of the minimum age and
service requirements of Code section 410(a)(1)(A), Eligible
Employees who have not met the minimum age and service
requirements of Code section 410(a)(1)(A) may be excluded in the
determination of the NHCE Group, but not in the determination of
the HCE Group, for purposes of (i) the ADP Test, if Code section
410(b)(4)(B) is applied in determining whether the 401(k) portion
of the Plan meets the requirements of Code section 410(b), or
(ii) the ACP Test, if Code 410(b)(4)(B) is applied in determining
whether the 401(m) portion of the Plan meets the requirements of
Code section 410(b).
(1) If the Related Companies maintain two or more plans which
are subject to the ADP or ACP Test and are considered as one
plan for purposes of Code sections 401(a)(4) or 410(b), all
such plans shall be aggregated and treated as one plan for
purposes of meeting the ADP and ACP Tests, provided that the
plans may only be aggregated if they have the same plan
year.
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(2) If an HCE is covered by more than one cash or deferred
arrangement, or more than one arrangement permitting
employee or matching contributions, maintained by the
Related Companies, all such plans shall be aggregated and
treated as one plan (other than those plans that may not be
permissively aggregated) for purposes of calculating the
separate percentage for the HCE which is used in the
determination of the Average Percentage. For purposes of the
preceding sentence, if such plans have different plan years,
the plans are aggregated with respect to the plan years
ending with or within the same calendar year.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must meet either
the Basic or Alternative Limitation when compared to the respective
preceding Plan Year's ADP and ACP for the preceding Plan Year's NHCE
Group, defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may not exceed
1.25 times the NHCE Group Average Percentage.
(b) Alternative Limitation. The HCE Group Average Percentage is
limited by reference to the NHCE Group Average Percentage as
follows:
If the NHCE Group Then the Maximum HCE
Average Percentage is: Group Average Percentage is:
---------------------- ----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus
2% More than 8% NA - Basic Limitation applies
Alternatively, the Company may elect to use the Plan Year's ADP for
the NHCE Group for the Plan Year and/or the Plan Year's ACP for the
NHCE Group for the Plan Year. If such election is made, such election
may not be changed except as provided by the Code.
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a maximum
percentage to be used in place of the calculated percentage for all
HCEs that would reduce the ADP and/or ACP for the HCE Group by a
sufficient amount to meet the ADP and ACP Tests.
With regard to each HCE whose Deferral percentage and/or Contribution
percentage is in excess of the maximum percentage, a dollar amount of
excess Deferrals and/or excess Contributions shall then be determined
by (i) subtracting the product of such maximum percentage for the ADP
and the HCE's Compensation from the HCE's actual Deferrals and (ii)
subtracting the product of such maximum percentage for the ACP and the
HCE's Compensation from the HCE's actual Contributions. Such amounts
shall then be aggregated to determine the total dollar amount of
excess Deferrals and/or excess Contributions. ADP and/or ACP
corrections shall be made in accordance with the leveling method as
described below.
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(a) ADP Correction. The HCE with the highest Deferral dollar amount
shall have his or her Deferral dollar amount reduced in an amount
equal to the lesser of the dollar amount of excess Deferrals for
all HCEs or the dollar amount that would cause his or her
Deferral dollar amount to equal that of the HCE with the next
highest Deferral dollar amount. The process shall be repeated
until the total of the Deferral dollar amount reductions equals
the dollar amount of excess Deferrals for all HCEs.
To the extent an HCE's Deferrals were determined to be reduced as
described in the paragraph above, Pre-Tax Contributions shall, by
the end of the next Plan Year, be refunded to the HCE, except
that such amount to be refunded shall be reduced by Pre-Tax
Contributions previously refunded because they exceeded the
Contribution Dollar Limit. The excess amounts shall first be
taken from unmatched Pre-Tax Contributions and then from matched
Pre-Tax Contributions. Any Company Match Contributions
attributable to refunded excess Pre-Tax Contributions as
described in this Section, adjusted for investment gain or loss
for the Plan Year to which the excess Pre-Tax Contributions
relate, shall be forfeited and used as described in Section 8.
(b) ACP Correction. The HCE with the highest Contribution dollar
amount shall have his or her Contribution dollar amount reduced
in an amount equal to the lesser of the dollar amount of excess
Contributions for all HCEs or the dollar amount that would cause
his or her Contribution dollar amount to equal that of the HCE
with the next highest Contribution dollar amount. The process
shall be repeated until the total of the Contribution dollar
amount reductions equals the dollar amount of excess
Contributions for all HCEs.
To the extent an HCE's Contributions were determined to be
reduced as described in the paragraph above, Company Match
Contributions shall, by the end of the next Plan Year, be
refunded to the HCE to the extent vested, and forfeited and used
as described in Section 8 to the extent such amounts were not
vested, as of the end of the Plan Year being tested.
(c) Investment Fund Sources. Once the amount of excess Deferrals
and/or Contributions is determined, within each Account from
which amounts are refunded or forfeited, amounts shall first be
taken from the Sweep Account and then taken by Investment Fund in
direct proportion to the market value of the Participant's
interest in each Investment Fund (which excludes his or her Loan
Account balance) as of the Trade Date on which the correction is
processed
7. Section 15 is amended to restate the first sentence of Subsection 15.6 in
its entirety as follows:
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, may appoint a Committee to
administer the Plan on its behalf.
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<PAGE>
Effective January 1, 1998:
- --------------------------
1. Section 13 is amended to hereby change the reference in Subsection 13.2
from "Taxable Income" to "Compensation".
Effective January 1, 2000:
- --------------------------
1. Section 13 is amended to hereby delete Subsections 13.6, 13.7 and 13.8.
2. Section 14 is amended to hereby delete Subsection 14.3.
Date: , 19 The Circle International Group, Inc.
---------------------- ----
By:
----------------------------------
Title:
-----------------------------
The provisions of the above amendment which relate to the Trustee are hereby
approved and executed.
Date: , 19 Barclays Global Investors,
---------------------- ----
National Association
By:
----------------------------------
Title:
-----------------------------
Date: , 19 Barclays Global Investors,
---------------------- ----
National Association
By:
----------------------------------
Title:
-----------------------------
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Exhibit 5.1
September 1, 1998
Circle International Group, Inc.
260 Townsend Street
San Francisco, CA 94107-0933
Re: Circle International Group, Inc./
Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with the
proposed issuance pursuant to the Circle International Group Savings Plan (the
"Plan"), of up to 100,000 additional shares of common stock ("Common Stock"), of
the Circle International Group, Inc., a Delaware corporation (the "Company").
We have examined instruments, documents, and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; and (c) the truth,
accuracy, and completeness of the information, representations, and warranties
contained in the records, documents, instruments, and certificates we have
reviewed.
Based on such examination, we are of the opinion that the 100,000
additional shares of Common Stock to be issued by the Company pursuant to the
Plan after the filing of this Registration Statement on Form S-8 are validly
authorized shares of Common Stock, and, when issued in accordance with the
provisions of the Plan after the filing of this Registration Statement, will be
legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to this
Registration Statement on Form S-8 and to the use of our name wherever it
appears in said Registration Statement. In giving such consent, we do not
consider that we are "experts" within the meaning of such term as used in the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission issued thereunder with respect to any part of
the Registration Statement, including this opinion, as an exhibit or otherwise.
Very truly yours,
/s/ Orrick, Herrington & Sutcliffe LLP
ORRICK, HERRINGTON & SUTCLIFFE LLP
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Circle Internatonal Group Savings Plan of our report
dated August 5, 1998, with respect to the financial statements and schedules of
the Circle Internatonal Group Savings Plan for the years ended December 31, 1997
and 1996.
/s/ MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
August 5, 1998
88
