<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 29, 1998.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
HUGHES SUPPLY, INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
FLORIDA 59-0559446
(State or Other Jurisdiction of Incorporation or
Organization) (I.R.S. Employer Identification Number)
</TABLE>
20 NORTH ORANGE AVENUE
SUITE 200
ORLANDO, FLORIDA 32801
(Address of Principal Executive Offices) (Zip Code)
HUGHES SUPPLY, INC.
CASH OR DEFERRED PROFIT SHARING
PLAN AND TRUST
(Full Title of the Plan)
J. STEPHEN ZEPF
TREASURER AND CHIEF FINANCIAL OFFICER
HUGHES SUPPLY, INC.
20 NORTH ORANGE AVENUE
SUITE 200
ORLANDO, FLORIDA 32801
(Name and Address of Agent for Service)
(407) 841-4755
(Telephone Number, Including Area Code, of Agent for Service)
---------------------
COPIES OF COMMUNICATIONS TO:
<TABLE>
<S> <C>
BENJAMIN P. BUTTERFIELD, ESQ. MARK A. LOEFFLER, ESQ.
GENERAL COUNSEL AND SECRETARY POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
HUGHES SUPPLY, INC. SIXTEENTH FLOOR
20 NORTH ORANGE AVENUE, SUITE 200 191 PEACHTREE STREET, N.E.
ORLANDO, FLORIDA 32801 ATLANTA, GEORGIA 30303
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED(1) REGISTERED(2) PER SHARE(3) OFFERING PRICE(3) FEE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per
share............................ 250,000 Shares $31.59375 $7,898,438 $2,331
- ---------------------------------------------------------------------------------------------------------------------
Rights to Purchase Series A Junior
Participating Preferred Stock, no
par value per share(4)........... 250,000 Rights N/A N/A N/A
=====================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this registration statement (this
"Registration Statement") also covers an indeterminate amount of interests
to be offered or sold pursuant to the employee benefit plan (the "Plan")
described herein.
(2) Representing shares to be issued that (i) at the option of Hughes Supply,
Inc. (the "Registrant"), may be used pursuant to any matching of
contributions in connection with the Plan and (ii) may be acquired by the
Trustee of the Plan and held for the account of Plan participants.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(h)(1) under the Securities Act.
(4) The rights to purchase the Series A Junior Participating Preferred Stock
(the "Rights") will be attached to and trade with shares of the Registrant's
Common Stock. Value attributable to such Rights, if any, will be reflected
in the market of the shares of the Registrant's Common Stock.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in this Part I will be
sent or given to employees as specified by Rule 428(b)(1) of the Securities Act.
I-1
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year
ended January 30, 1998 (File No. 001-08772);
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1998 (File No. 001-08772);
(3) The Registrant's Current Report on Form 8-K as filed with the
Commission on May 22, 1998 (File No. 001-08772);
(4) The description of the Registrant's Common Stock contained on the
Registrant's statement on Form 8-A as filed with the Commission pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (File No. 001-08772); and
(5) The description of the Rights contained on the Registrant's
statement on Form 8-A as filed with the Commission pursuant to Section 12
of the Exchange Act (File No. 001-08772).
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
thereof from the date of filing such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850 of the Florida Business Corporation Act permits, and in
some cases requires, the Registrant as a Florida corporation to indemnify a
director, officer, employee, or agent of the Registrant, or any person serving
at the request of the Registrant in any such capacity with respect to another
entity, against certain expenses and liabilities incurred as a party to any
proceeding, including, among others, a proceeding under the Securities Act,
brought against such person by reason of the fact that such person is or was a
director, officer, employee, or agent of the Registrant or is or was serving in
such capacity with respect to another entity at the request of the Registrant.
With respect to actions, other than in the right of the Registrant, such
indemnification is permitted if such person acted in good faith and in a manner
such person reasonably believed to be in, or not opposed to, the best interests
of the Registrant, and with respect to any criminal action or proceeding, if
such person had no reasonable cause to believe his or her conduct was unlawful.
Termination of any such action by judgment, order, settlement or conviction or a
plea of nolo contendere, or its equivalent shall not, of itself, create a
presumption that such person did not act in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, or with respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful.
With respect to any action threatened, pending or completed in the right of
the Registrant to procure a judgment in its favor against any such person, the
Registrant may indemnify any such person against expenses actually and
reasonably incurred by him or her in connection with the defense or settlement
of such action or suit, including the appeal thereof, if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the Registrant, except that no indemnification shall be
made in respect of any claim, issue or matter as to which any such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his or her duties to the Registrant unless the court in which the action was
brought determines that despite the adjudication of liability, but in view of
all the circumstances in the case, such person is fairly and reasonably entitled
to indemnity for such expenses.
II-1
<PAGE> 4
Section 607.0850 also provides that if any such person has been successful
on the merits or otherwise in defense of any action, suit or proceeding, whether
brought in the right of the Registrant or otherwise, such person shall be
indemnified against expenses actually and reasonably incurred by him or her in
connection therewith.
If any director or officer does not succeed upon the merits or otherwise in
defense of an action, suit or proceeding, then unless pursuant to a
determination made by a court, indemnification by the Registrant shall be made
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper because he or she has met
the applicable standard of conduct. Any such determination may be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who are not parties to such action, suit or
proceeding;
(b) If such a quorum is not obtainable, or, even if obtainable, by a
majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;
(c) By independent legal counsel selected by the board of directors
prescribed in paragraph (a) or the committee prescribed in paragraph (b);
or if a quorum of the directors cannot be obtained for paragraph (a) or the
committee cannot be designated under paragraph (b), selected by a majority
vote of the full board of directors (in which directors who are parties may
participate); or
(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to the proceeding or, if no such quorum
is obtainable, by a majority vote of shareholders who were not parties to
such proceeding.
Section 607.0850 also contains a provision authorizing corporations to
purchase and maintain liability insurance on behalf of its directors and
officers. For some years the Registrant has maintained an insurance policy which
insures directors and officers of the Registrant against amounts the directors
or officers are obligated to pay in respect of their respective legal liability,
whether actual or asserted, for any negligent act, any error, any omission or
any breach of duty which, subject to the applicable limits and terms of the
policy, include damages, judgments, settlements, costs of investigation, and
costs, charges and expenses incurred in the defense of actions, suits or
proceedings or appeals thereto, subject to the exceptions, limitations and
conditions set forth in the policy.
II-2
<PAGE> 5
ITEM 8. EXHIBITS
The following items are filed as exhibits to this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <C> <S>
4.1 -- Restated Articles of Incorporation of the Registrant, as
amended (Incorporated by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1997 as filed with the Commission.)
4.2 -- Form of Articles of Amendment to Restated Articles of
Incorporation of the Registrant (Incorporated by reference
to Exhibit 99.2 to the Registrant's Registration Statement
on Form 8-A dated May 22, 1998 as filed with the
Commission.)
4.3 -- Composite By-laws of Registrant, as amended (Incorporated by
reference to Exhibit 3.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended January 30, 1998
as filed with the Commission.)
4.4 -- Form of Common Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value (Incorporated by
reference to Exhibit 4.1 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 31, 1997 as
filed with the Commission.)
4.5 -- Rights Agreement dated as of May 20, 1998 between Hughes
Supply, Inc. and American Stock Transfer & Trust Company
(Incorporated by reference to Exhibit 99.2 to the
Registrant's Registration Statement on Form 8-A dated May
22, 1998 as filed with the Commission.)
5.1 -- Opinion of Benjamin Butterfield, Esq.
23.1 -- Consent of Price Waterhouse LLP.
24.1 -- Power of Attorney (included in the signature page in Part II
of the Registration Statement.)
99.1 -- Hughes Supply, Inc. Cash or Deferred Profit Sharing Plan and
Trust, as amended and restated as of February 1, 1997.
</TABLE>
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, Form S-8 or Form F-3
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 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
II-3
<PAGE> 6
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Exchange Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the 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 Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 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.
(d) The undersigned Registrant hereby undertakes that it has submitted or
will submit the Plan and any amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and has or will make any changes required by the IRS
in order to qualify the Plan under Section 401(k) of the Internal Revenue Code
of 1986, as amended.
II-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the City of Orlando, State of Florida, on this 29th day of June,
1998.
HUGHES SUPPLY, INC.
By: /s/ DAVID H. HUGHES
------------------------------------
David H. Hughes
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David H. Hughes and J. Stephen Zepf, or any of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any or all amendments to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto each of said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully as to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DAVID H. HUGHES Chairman of the Board and June 29, 1998
- ----------------------------------------------------- Chief Executive Officer
David H. Hughes (Principal Executive Officer)
/s/ J. STEPHEN ZEPF Treasurer and Chief Financial June 29, 1998
- ----------------------------------------------------- Officer (Principal Financial
J. Stephen Zepf and Accounting Officer)
/s/ A. STEWART HALL, JR. Director June 29, 1998
- -----------------------------------------------------
A. Stewart Hall, Jr.
/s/ VINCENT S. HUGHES Director June 29, 1998
- -----------------------------------------------------
Vincent S. Hughes
/s/ JOHN D. BAKER II Director June 29, 1998
- -----------------------------------------------------
John D. Baker II
/s/ ROBERT N. BLACKFORD Director June 29, 1998
- -----------------------------------------------------
Robert N. Blackford
</TABLE>
II-5
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOHN B. ELLIS Director June 29, 1998
- -----------------------------------------------------
John B. Ellis
/s/ H. CORBIN DAY Director June 29, 1998
- -----------------------------------------------------
H. Corbin Day
</TABLE>
II-6
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S> <C>
4.1 -- Restated Articles of Incorporation of the Registrant, as
amended (Incorporated by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1997 as filed with the Commission.)
4.2 -- Form of Articles of Amendment to Restated Articles of
Incorporation of the Registrant (Incorporated by reference
to Exhibit 99.2 to the Registrant's Registration Statement
on Form 8-A dated May 22, 1998 as filed with the
Commission.)
4.3 -- Composite By-laws of Registrant, as amended (Incorporated by
reference to Exhibit 3.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended January 30, 1998
as filed with the Commission.)
4.4 -- Form of Common Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value (Incorporated by
reference to Exhibit 4.1 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 31, 1997 as
filed with the Commission.)
4.5 -- Rights Agreement dated as of May 20, 1998 between Hughes
Supply, Inc. and American Stock Transfer & Trust Company
(Incorporated by reference to Exhibit 99.2 to the
Registrant's Registration Statement on Form 8-A dated May
22, 1998 as filed with the Commission.)
5.1 -- Opinion of Benjamin Butterfield, Esq.
23.1 -- Consent of Price Waterhouse LLP.
24.1 -- Power of Attorney (included in the signature page in Part II
of the Registration Statement.)
99.1 -- Hughes Supply, Inc. Cash or Deferred Profit Sharing Plan and
Trust, as amended and restated as of February 1, 1997.
</TABLE>
II-7
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF HUGHES SUPPLY, INC. APPEARS HERE]
June 29, 1998
Hughes Supply, Inc.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
Re: Registration Statement on Form S-8
Gentlemen:
I am general counsel of Hughes Supply, Inc., a Florida corporation (the
"Company"). I am furnishing this opinion in connection with the registration
under the Securities Act of 1933, as amended, pursuant to a Registration
Statement on Form S-8 (the "Registration Statement") of 250,000 shares of common
stock, par value $1.00 per share of the Company (the "Common Stock"), that may
be (i) issued in connection with the matching of contributions (the "Original
Issuance Shares") made under the Hughes Supply, Inc. Cash or Deferred Profit
Sharing Plan and Trust (the "Plan"), or (ii) acquired by the Trustee of the Plan
and held for the account of the Plan participants.
I have examined and am familiar with the Plan, copies of the Restated
Articles of Incorporation and Bylaws of the Company, the Registration Statement,
and such other corporate records and documents as I deemed necessary to form the
basis for the opinion hereinafter expressed.
In my examination of such material, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals, and
the conformity to the original documents of all copies submitted to me. As to
questions of fact material to such opinion, I have relied upon statements of
officers and representatives of the Company and others.
Based on the foregoing, it is my opinion that:
(i) The Original Issuance Shares have been duly authorized;
(ii) Upon the issuance and delivery of the Original Issuance Shares,
upon receipt of lawful consideration therefor pursuant to the
Plan, such Original Issuance Shares will be validly issued, fully
paid and non-assessable; and
(iii) The participations in the Plan to be extended to participants in
the Plan will be, when extended in accordance with the Plan,
validly issued.
<PAGE> 2
Hughes Supply, Inc.
June 29, 1998
Page 2
I hereby consent to the reference to me in the Registration Statement and
as an attorney who will pass on the legal matters in connection with the
offering and to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Benjamin P. Butterfield
---------------------------
Benjamin P. Butterfield
General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 27, 1998, which appears on page
26 of the 1998 Annual Report to Shareholders of Hughes Supply, Inc., which is
incorporated by reference in the Hughes Supply, Inc. Annual Report on Form 10-K
for the year ended January 30, 1998.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Orlando, Florida
June 26, 1998
<PAGE> 1
EXHIBIT 99.1
HUGHES SUPPLY, INC.
CASH OR DEFERRED PROFIT SHARING
PLAN AND TRUST
(AMENDED AND RESTATED AS OF FEBRUARY 1, 1997)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I Name...................................................................................................2
ARTICLE II Definitions............................................................................................2
ARTICLE III Participation.........................................................................................25
3.1 ELIGIBILITY REQUIREMENTS..............................................................................25
3.2 PARTICIPATION OF REEMPLOYED INDIVIDUALS...............................................................26
3.3 SERVICE WITH A RELATED ENTITY.........................................................................26
3.4 DISPUTES OVER PARTICIPATION...........................................................................27
ARTICLE IV Contributions.........................................................................................27
4.1 EMPLOYER CONTRIBUTIONS................................................................................27
4.2 ELECTIVE CONTRIBUTIONS................................................................................28
4.3 CHANGES TO CONTRIBUTION RATE..........................................................................29
4.4 EMPLOYER MATCHED CONTRIBUTIONS........................................................................29
4.5 DISCRETIONARY EMPLOYER CONTRIBUTIONS..................................................................30
4.6 RESTRICTED EMPLOYER CONTRIBUTIONS.....................................................................30
4.7 MINIMUM EMPLOYER CONTRIBUTION.........................................................................31
4.8 DELIVERY OF CONTRIBUTIONS TO TRUSTEE..................................................................32
4.9 RETURN OF EMPLOYER CONTRIBUTIONS......................................................................32
4.10 VOLUNTARY CONTRIBUTIONS...............................................................................33
4.11 RIGHTS FOR MILITARY SERVICE...........................................................................33
ARTICLE V Maximum Contributions.................................................................................34
5.1 LIMITATIONS ON ELECTIVE CONTRIBUTIONS.................................................................34
5.2 PROCEDURE IF ELECTIVE CONTRIBUTION
LIMITATION EXCEEDED...................................................................................35
5.3 TREATMENT OF SIMILAR PLANS............................................................................37
5.4 LIMITATION ON MATCHED CONTRIBUTIONS...................................................................37
5.5 PROCEDURE IF MATCHED CONTRIBUTION
LIMITATION EXCEEDED...................................................................................38
5.6 LIMITATION ON ADP AND MCP TESTS.......................................................................40
5.7 LIMITATION ON DISCRETIONARY AND RESTRICTED
EMPLOYER CONTRIBUTIONS................................................................................42
5.8 RECHARACTERIZING CONTRIBUTIONS........................................................................42
5.9 RETURN OF EXCESS ELECTIVE CONTRIBUTIONS...............................................................45
5.10 MAXIMUM ANNUAL ADDITIONS..............................................................................46
5.11 LIMITATION FOR COMBINATION OF PLANS...................................................................49
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE VI Allocation of Employer Contributions,
Forfeitures and Earnings..............................................................................51
6.1 INDIVIDUAL ACCOUNTS...................................................................................51
6.2 VALUATION DATE ADJUSTMENTS AND ALLOCATIONS
PRIOR TO MAY 1, 1998..................................................................................51
6.3 VALUATION DATE ADJUSTMENTS AND ALLOCATIONS
AFTER APRIL 30, 1998..................................................................................56
6.4 INTERIM ALLOCATION OF NET INCOME OR NET LOSS..........................................................60
6.5 INVESTMENT OF CONTRIBUTIONS...........................................................................60
6.6 VALUATION OF TRUST FUND...............................................................................61
6.7 VESTING OF RIGHTS.....................................................................................61
ARTICLE VII Vesting...............................................................................................61
7.1 VESTED ACCOUNT........................................................................................61
7.2 VESTING TABLE.........................................................................................61
7.3 EVENTS ACCELERATING VESTING...........................................................................62
7.4 AMENDMENTS TO VESTING TABLE...........................................................................63
7.5 FORFEITURE FOR BREACH INVOLVING THE PLAN..............................................................64
ARTICLE VIII Retirement Benefits...................................................................................65
8.1 BENEFITS ON NORMAL RETIREMENT.........................................................................65
8.2 BENEFITS AFTER NORMAL RETIREMENT......................................................................65
ARTICLE IX Death Benefits........................................................................................66
9.1 PAYMENT OF DEATH BENEFITS.............................................................................66
9.2 DESIGNATION OF BENEFICIARY............................................................................67
9.3 DOCUMENTATION OF PAYMENT..............................................................................68
9.4 RIGHTS OF SURVIVING SPOUSE............................................................................68
ARTICLE X Termination of Employment.............................................................................69
10.1 RIGHTS UPON TERMINATION OF EMPLOYMENT.................................................................69
10.2 VESTING UPON TERMINATION..............................................................................71
10.3 PAYMENT TO TERMINATED PARTICIPANTS....................................................................71
10.4 FORFEITURES...........................................................................................71
10.5 BENEFITS UPON REEMPLOYMENT............................................................................75
10.6 TERMINATION DUE TO DISABILITY.........................................................................76
ARTICLE XI Payment of Benefits...................................................................................76
11.1 NOTICE TO TRUSTEE.....................................................................................76
11.2 TRUSTEE'S DUTIES......................................................................................76
11.3 COMMENCEMENT OF PAYMENT...............................................................................76
11.4 PAYMENT OPTIONS.......................................................................................80
11.5 LIMITED LUMP SUM PAYMENTS.............................................................................82
11.6 LIMITATION ON PERIOD OF DISTRIBUTION..................................................................82
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
11.7 SUSPENSION OF BENEFIT PAYMENTS DURING
REEMPLOYMENT..........................................................................................83
11.8 CONSENT TO DISTRIBUTION PRIOR TO RETIREMENT AGE.......................................................83
11.9 FINANCIAL HARDSHIP WITHDRAWALS........................................................................84
11.10 EARLY WITHDRAWAL BENEFITS.............................................................................86
11.11 LOANS TO PARTICIPANTS.................................................................................87
11.12 SPECIAL RULES FOR TEFRA ELECTIONS AND PRIOR
DISTRIBUTIONS.........................................................................................87
11.13 ALLOWANCE OF DIRECT ROLLOVERS.........................................................................89
11.14 SPECIAL RULES REGARDING DIRECT ROLLOVERS..............................................................91
11.15 DISTRIBUTION TO ALTERNATE PAYEE PURSUANT TO
A QUALIFIED DOMESTIC RELATIONS ORDER..................................................................91
ARTICLE XII Top-Heavy Provisions..................................................................................92
12.1 TOP-HEAVY DETERMINATION...............................................................................92
12.2 TOP-HEAVY RATIO DEFINED...............................................................................93
12.3 REQUIRED AGGREGATION GROUP AND PERMISSIVE
AGGREGATION GROUP DEFINED.............................................................................94
12.4 ACCOUNT BALANCE DEFINED...............................................................................95
12.5 ACCRUED BENEFIT DEFINED...............................................................................96
12.6 ADJUSTMENTS TO ACCOUNT BALANCES AND ACCRUED
BENEFITS..............................................................................................96
12.7 EMPLOYEES EXCLUDED FROM COMPUTATIONS..................................................................99
12.8 ADJUSTMENTS TO SECTION 415 LIMITATIONS................................................................99
12.9 TOP-HEAVY PLAN REQUIREMENTS..........................................................................101
ARTICLE XIII Administration of Funds..............................................................................101
13.1 EXPENSES.............................................................................................101
13.2 ACCOUNTS.............................................................................................101
ARTICLE XIV The Trustee and Investments..........................................................................102
14.1 TRUSTEE'S DUTIES.....................................................................................102
14.2 TRUSTEE'S POWERS.....................................................................................102
14.3 DIRECTION OF TRUSTEE.................................................................................105
14.4 VOTING COMMON STOCK..................................................................................109
14.5 DELEGATION OF DUTIES.................................................................................109
14.6 TRUSTEE'S RELIANCE ON OTHERS.........................................................................110
14.7 COUNSEL TO TRUSTEE...................................................................................110
14.8 LIABILITY OF TRUSTEE.................................................................................110
14.9 CHARGES AGAINST THE TRUST............................................................................110
14.10 REASONABLE COSTS OF THE TRUST........................................................................111
14.11 COMPENSATION OF TRUSTEE..............................................................................111
14.12 INSPECTION OF RECORDS................................................................................111
14.13 RESIGNATION OF TRUSTEE...............................................................................112
</TABLE>
<PAGE> 5
<TABLE>
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14.14 STATEMENT OF ACCOUNTS................................................................................112
14.15 TRANSFER OF TRUST FUNDS..............................................................................113
14.16 INDEMNIFICATION OF TRUSTEE...........................................................................113
14.17 DISBURSEMENTS........................................................................................113
14.18 PROHIBITION AGAINST DIVERSION OF FUNDS...............................................................114
ARTICLE XV Administrative Committee.............................................................................115
15.1 COMMITTEE............................................................................................115
15.2 APPOINTMENT AND RESIGNATION OF MEMBER................................................................115
15.3 POWER OF COMMITTEE...................................................................................116
15.4 NON-DISCRIMINATION...................................................................................116
15.5 COMMITTEE ACTION.....................................................................................116
15.6 AGENTS OF THE COMMITTEE..............................................................................117
15.7 COMMITTEE RECORDS....................................................................................117
15.8 REIMBURSEMENT OF EXPENSE.............................................................................117
15.9 EXPENSES AFTER DISCONTINUANCE........................................................................117
15.10 INSPECTION OF RECORDS................................................................................117
15.11 COMMITTEE CERTIFICATION..............................................................................118
15.12 DIRECTION OF TRUSTEE.................................................................................118
15.13 CLAIMS...............................................................................................119
15.14 HEARINGS.............................................................................................119
ARTICLE XVI Amendment and Termination of Plan....................................................................120
16.1 ESTABLISHMENT OF PLAN................................................................................120
16.2 AMENDMENT OR TERMINATION.............................................................................120
16.3 TERMINATION..........................................................................................121
16.4 EFFECT OF TERMINATION................................................................................121
16.5 SUCCESSOR ORGANIZATION...............................................................................122
16.6 EFFECT ON SUCCESSORS.................................................................................122
16.7 PAYMENT OF BENEFITS UPON TERMINATION.................................................................122
ARTICLE XVII Miscellaneous Provisions.............................................................................124
17.1 VOLUNTARY PLAN.......................................................................................124
17.2 BENEFITS PAYABLE FROM TRUST..........................................................................124
17.3 CONTROL OF TEXT......................................................................................124
17.4 GENDER...............................................................................................124
17.5 AFFILIATES...........................................................................................125
17.6 FLORIDA LAW..........................................................................................125
17.7 NONALIENATION OF BENEFITS AND DOMESTIC
RELATIONS ORDERS.....................................................................................125
17.8 TRANSFER OF ACCOUNT..................................................................................130
17.9 ACCEPTANCE OF TRANSFERS AND ROLLOVER
CONTRIBUTIONS........................................................................................130
17.10 INCAPACITY OF PARTICIPANT............................................................................131
</TABLE>
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17.11 LOCATION OF PARTICIPANTS.............................................................................132
17.12 EXCLUSIVE BENEFIT....................................................................................132
17.13 FIDUCIARY............................................................................................133
17.14 WAIVER OF NOTICE.....................................................................................133
17.15 MODIFICATION OF PROVISIONS FOR ACQUIRED
ENTITIES.............................................................................................134
EXHIBIT "A" Provisions for Former Employees of J&J, Inc..........................................................135
</TABLE>
<PAGE> 7
HUGHES SUPPLY, INC.
CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
(AMENDED AND RESTATED AS OF FEBRUARY 1, 1997)
THIS AGREEMENT, made and entered into this ____ day of ____________
1998, by and between Hughes Supply, Inc., a corporation organized and existing
under the laws of the State of Florida, with its principal office and place of
business in Orlando, Florida (hereinafter referred to as the "Employer"), and
SunTrust Bank, Central Florida, National Association, as Trustee of the Trust
hereby created (hereinafter referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer entered into a profit sharing plan and trust
effective as of February 1, 1969, known as the Hughes Supply Profit Sharing Plan
and Trust, as amended by four amendments; and
WHEREAS, the Employer amended and restated said plan and trust in its
entirety in order to add a cash or deferred arrangement which meets the
requirements of Section 401(k) of the Internal Revenue Code of 1986;
WHEREAS, the Employer desires to update the Plan for recent changes in
federal law and to convert allocations to daily valuation as of May 1, 1998;
1
<PAGE> 8
NOW, THEREFORE, effective as of February 1, 1997, the Employer and the
Trustee hereby amend and restate the plan and trust to read as follows:
ARTICLE I
NAME
1.1 This cash or deferred profit sharing plan and trust shall be
known as the Hughes Supply, Inc. Cash or Deferred Profit Sharing Plan and Trust
(Amended and Restated as of February 1, 1997).
ARTICLE II
DEFINITIONS
2.1 "ACCOUNT BALANCE" shall be defined in accordance with
paragraph 12.4.
2.2 "ACCRUED BENEFIT" shall be defined in accordance with
paragraph 12.5.
2.3 "ACTIVE PARTICIPANT" shall mean a Participant who is an
Employee on the Valuation Date and any other Participant defined as an "Active
Participant" in accordance with paragraph 3.3.
2.4 "ACTUAL DEFERRAL PERCENTAGE" With respect to a Plan Year shall
mean, effective for the Plan Year which begins February 1, 1997, and subsequent
Plan Years, the average of the ratios, calculated for all Highly Compensated
Employees who are eligible to participate as a group and for all Certain Other
2
<PAGE> 9
Participants as a separate group, of (a) the sum of the (i) Elective
Contributions made on behalf of each Participant in the group for the Plan Year
and (ii) Restricted Employer Contributions allocated to the Participant's
Restricted Employer Contribution account and deemed to be treated as Elective
Contributions pursuant to paragraph 5.8, to (b) the Participant's ADP
Compensation for such Plan Year. The ratio for Highly Compensated Employees
shall be determined with respect to the current Plan Year, but the ratio for
Certain Other Participants shall be determined with respect to the immediately
preceding Plan Year unless the Corporation files an election to use the ratios
for the current Plan Year for both groups, except that for the Plan Year
beginning February 1, 1997, the ratio for Certain Other Participants may be, at
the option of the Committee, the current or immediately preceding Plan Year
without filing an election. The ratios for each Participant within a group shall
be calculated separately prior to averaging all ratios for all Participants
within a group. For purposes of this paragraph, the ratio for any Highly
Compensated Employee Participant who is eligible to make Elective Contributions
for the Plan Year under two or more arrangements described in Section 401(k) of
the Code that are maintained by the Employer or a Related Entity shall be
determined as if all such contributions are made under a single arrangement and,
if such plans have different plan years, the plan years ending within the same
calendar year shall be treated as a single plan. If multiple plans are
aggregated for purposes
3
<PAGE> 10
of Section 410(b) of the Code, the provisions of paragraph 5.3 shall apply. The
Plan will take into account the actual Elective Contribution ratios of all
eligible Employees for purposes of the Actual Deferral Percentage test under
paragraph 5.1 and Section 401(k) of the Code. For this purpose, an eligible
Employee is any Employee who is directly or indirectly eligible to make an
Elective Contribution under the Plan for all or a portion of a Plan Year and
includes the following:
(a) an Employee who would be a Plan Participant but for
the failure to make required contributions;
(b) an Employee whose eligibility to make Elective
Contributions has been suspended because of an election (other than certain
one-time elections) not to participate, or due to a hardship distribution; and
(c) an Employee who cannot make Elective Contributions
because of annual addition limitations under paragraph 5.12 and Section 415 of
the Code.
In the case of an eligible Employee who makes no Elective Contributions, the
Elective Contribution ratio that is to be included in determining the Elective
Contribution Percentage is zero. If the Plan calculates the Actual Deferral
Percentage for the Plan Year beginning February 1, 1997, using the ratio for
Certain Other Participants from the prior Plan Year, for purposes of determining
the group of Certain Other Participants, the Plan shall use the Plan definition
of Highly Compensated Active Participants in force immediately prior to February
1, 1997.
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<PAGE> 11
2.5 "ACTUAL RETIREMENT DATE" shall mean the last day on which a
Participant is employed by the Employer after reaching his or her Normal
Retirement Date.
2.6 "ADP COMPENSATION" Effective for the Plan Year which begins
February 1, 1994, ADP Compensation shall mean the remuneration of a Participant
paid by the Employer during any Plan Year in the form of cash compensation, but
shall not include any non-cash compensation charged to the Participant. ADP
Compensation shall also include Elective Contributions made pursuant to a
Compensation Deferral Agreement, and any other contributions made on behalf of
the Participant for the Plan Year which are not currently includible in gross
income by reason of the application of Sections 125, 402(a)(8), 402(h)(1)(B) or
403(b) of the Code, but shall not include any other Employer contributions or
benefits arising in connection with this Plan or in connection with any other
employee benefit or welfare benefit plan of the Employer. The Committee may
elect to exclude from ADP Compensation for any Plan Year all compensation earned
during a period when the Employee was not a Participant in the Plan provided
this limit is applied uniformly to all Participants for such Plan Year. However,
ADP Compensation taken into account for purposes of this Plan shall be limited
to $l50,000 or such other amount as may be provided by the Treasury Department
under Section 401(a)(17) of the Code. For purposes of this paragraph, the
$150,000 compensation limitation in effect for a calendar year applies to any
period, not exceeding twelve (12) months,
5
<PAGE> 12
over which compensation is determined (the "determination period"). If a
determination period consists of fewer than 12 months, the compensation
limitation will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the denominator of which is
12.
2.7 "AFFILIATE" shall mean any corporation which is a subsidiary
of or affiliated with Hughes Supply, Inc., and which is designated by the Board
of Directors of Hughes Supply, Inc. as an Affiliate under the Plan. The
designation shall become effective only when it shall have been accepted in
writing by the Affiliate. The Board of Directors of Hughes Supply, Inc. or the
Affiliate may revoke the designation at any time, but until such designation has
been revoked in writing, all the provisions of the Plan and amendments thereto
shall apply to the employees of the Affiliate. In the event the designation of
an Affiliate as such is revoked, the Plan will be deemed terminated only as to
such Affiliate.
2.8 "AGGREGATE COMPENSATION" shall mean the remuneration of a
Participant paid by the Employer during any Plan Year as determined pursuant to
the statute and regulations for determining wages subject to federal income
taxes for purposes of computing Form W-2 plus Elective Contributions made
pursuant to a Compensation Deferral Agreement, and any other contributions made
on behalf of the Participant for the Plan Year which are not currently
includable in gross income by reason of the application of Sections 125,
402(a)(8), 402(h)(1)(B) or 403(b) of the Code,
6
<PAGE> 13
but shall not include any other contributions or benefits arising in connection
with this Plan or in connection with any other employee benefit or welfare
benefit plan of the Employer to the extent such contributions or benefits are
not currently includable in gross income. However, Aggregate Compensation taken
into account for purposes of this Plan shall be limited to $150,000 or such
other amount as may be provided by the Treasury Department under Section
401(a)(17) of the Code. For purposes of this paragraph, the $150,000
compensation limitation in effect for a calendar year applies to any period, not
exceeding twelve (12) months, over which compensation is determined (the
"determination period"). If a determination period consists of fewer than 12
months, the compensation limitation will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
2.9 "ALL TAXABLE COMPENSATION" shall mean the remuneration of a
Participant paid by the Employer or a Related Entity during any Plan Year as
determined pursuant to the statute and regulations for determining wages subject
to federal income taxes for purposes of completing Form W-2 and shall include
regular salaries, but shall not include any amounts which are excluded from
compensation pursuant to Treasury Regulation Section 1.4152(d)(2), such as any
contributions or benefits arising in connection with this Plan. However, All
Taxable Compensation taken into account for purposes of this Plan shall be
limited to
7
<PAGE> 14
$150,000 or such other amount as may be provided by the Treasury Department
under Section 401(a)(17) of the Code. For purposes of this paragraph, the
$150,000 compensation limitation in effect for a calendar year applies to any
period, not exceeding twelve (12) months, over which compensation is determined
(the "determination period"). If a determination period consists of fewer than
12 months, the compensation limitation will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
2.10 "ALLOCATION COMPENSATION" shall mean the remuneration of a
Participant paid by the Employer during any Plan Year in the form of cash
compensation, but shall not include any non-cash compensation charged to the
Participant. "Allocation Compensation" shall also include Elective Contributions
made pursuant to a Compensation Deferral Agreement, and any other contributions
made on behalf of the Participant for the Plan Year which are not currently
includable in gross income by reason of the application of Sections 125,
402(a)(8), 402(h)(1)(B) or 403(b) of the Code, but shall not include any other
Employer contributions or benefits arising in connection with this Plan or in
connection with any other employee benefit or welfare benefit plan of the
Employer. However, Allocation Compensation taken into account for purposes of
this Plan shall be limited to $150,000 or such other amount as may be provided
by the Treasury Department under Section 401(a)(17) of the Code. For purposes of
8
<PAGE> 15
this paragraph, the $150,000 compensation limitation in effect for a calendar
year applies to any period, not exceeding twelve (12) months, over which
compensation is determined (the "determination period"). If a determination
period consists of fewer than 12 months, the compensation limitation will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
2.11 "ANNIVERSARY DATE" shall mean the Effective Date and each
anniversary of the Effective Date.
2.12 "BENEFICIARY" shall mean a person, estate, trust or
organization entitled to receive any payment under this Plan on the death of a
Participant. Any designation of a Beneficiary is subject to the rights of a
surviving Spouse under paragraph 9.4 and the rights of an Alternate Payee under
paragraph 17.7.
2.13 "CERTAIN OTHER PARTICIPANTS" shall mean any Participant who is
eligible to make Elective Contributions during any portion of the Plan Year and
who, with respect to the Plan Year, is not a Highly Compensated Employee.
2.14 "CODE" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be amended from time to time, and references thereto
shall also include the valid rules and regulations thereunder.
9
<PAGE> 16
2.15 "COMMITTEE" shall mean the Administrative Committee designated
by the Board of Directors of Hughes Supply, Inc. in accordance with Article XIV.
2.16 "COMPENSATION DEFERRAL AGREEMENT" shall mean an agreement
pursuant to which the Employee agrees to defer receipt, pursuant to paragraph
4.02 hereof, of a stipulated percentage of his Compensation and his Employer
agrees to contribute to the Plan the amount so deferred as an Elective
Contribution.
2.17 "DISABILITY" shall mean a physical or mental condition found
by the Committee, on the basis of medical evidence satisfactory to the
Committee, under which a Participant is permanently unable to perform
substantially all of the duties of the job with the Employer to which he or she
is regularly assigned and thereafter will be wholly and permanently unable to
engage in any occupation or gainful employment for which he or she is reasonably
suited by background, education, training and experience; provided, however,
that no Participant shall be deemed to be disabled for purposes of this
paragraph if the disability resulted from chronic or excessive use of alcohol,
addiction to narcotics, engagement in a criminal act, or an injury sustained
either as a result of an act of war or while serving as a member of the armed
forces of any country or while on duty with the National Guard.
10
<PAGE> 17
2.18 "EFFECTIVE DATE" shall mean February 1, 1997, the date on
which the provisions of this amended and restated plan and trust became
effective.
2.19 "ELECTIVE CONTRIBUTIONS" shall mean contributions made
pursuant to paragraph 4.2.
2.20 "EMPLOYEE" shall mean any person employed by the Employer as a
common-law employee, but such term shall not include
(a) leased employees, as defined below,
(b) nonresident aliens who do not receive any earned
income, as defined in Code Section 911(d)(2), from the Employer which
constitutes United States source income, as defined in Code Section 861(a)(3),
or
(c) any employee of the Employer included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement unless the agreement requires the employee to be
included in the Plan. A leased employee, as defined herein, shall receive credit
for vesting and eligibility service for any period of time he is employed by a
leasing organization and is performing services for the Employer or a Related
Entity unless
(i) the leased employee is participating in a qualified pension
plan, as defined herein, and
(ii) leased employees do not constitute more than twenty percent
(20%) of the Employer's nonhighly compensated
11
<PAGE> 18
work force (as defined by Section 414(n) of the Code). For
purposes of this paragraph, a "leased employee", is any person
(other than an Employee of the Employer) who pursuant to an
agreement between the Employer and any other firm or
individual ("leasing organization") has performed services for
the Employer or for the Employer and related persons on a
substantially full-time basis for a period of at least one (1)
year and such services are of a type historically performed by
employees in the business field of the Employer. A "qualified
pension plan" is a money purchase pension plan sponsored by
the leasing organization which provides (i) a nonintegrated
employer contribution rate of at least ten percent (10%) of
compensation (as defined by Section 414(n)(5)(C)(iii) of the
Code), (ii) immediate participation for each employee of the
leasing organization (other than employees who perform
substantially all of their services for the leasing
organization), and
(iii) full and immediate vesting; provided, however, that clause
(ii) shall not apply to any individual whose compensation from
the leasing organization in each plan year during the four (4)
year period ending with the plan year is less than $1,000.
12
<PAGE> 19
2.21 "EMPLOYER" shall mean Hughes Supply, Inc. and any Affiliate
while the latter's designation as an Affiliate is in effect, and shall include
any successor business organization or any other business organization which,
with the consent of the Board of Directors of Hughes Supply, Inc., shall assume
the obligations hereunder with respect to its employees. Such assumption shall
be in writing and shall be signed by Hughes Supply, Inc., the Trustee, and the
organization assuming the obligations hereunder.
2.22 "ENTRY DATE" shall mean February 1 and August 1 of the Plan
Year. In addition a special Entry Date shall occur on May 1, 1998.
2.23 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and as it may be amended from time to time, and references
thereto shall also include the valid rules and regulations issued thereunder.
2.24 "EMPLOYER SECURITIES" shall mean any qualifying employer
security as that term is defined in Section 407(d)(5) of ERISA and the
regulations thereunder as they currently exist and as they may be amended in the
future.
2.25 "HARDSHIP" shall mean a condition, the presence of which shall
be determined under paragraph 11.9 on the basis of information supplied to the
Committee by the Participant.
2.26 "HIGHLY COMPENSATED EMPLOYEE" shall mean any Participant who
is an Employee during the Plan Year and who:
13
<PAGE> 20
(a) was a five percent (5%) owner, as defined in Section
416(i)(1)(B) of the Code, at any time during the Plan Year or the preceding Plan
Year, or
(b) received Available Compensation from the Employer in
excess of $80,000, as adjusted pursuant to Section 414(q)(1) of the Code and, if
the Employer elects, was in the top-paid group of employees, as defined below,
for the preceding Plan Year.
For purposes of this paragraph the term "top-paid group of employees"
means a group of employees consisting of the top twenty percent (20%) of all
employees when ranked on the basis of Available Compensation paid during such
Plan Year. For purposes of determining the "top-paid group of employees" any
employee who (i) has not attained age twenty-one (21), (ii) is part of a unit of
employees covered by a collective bargaining agreement (except to the extent
provided in Treasury Regulations) and (iii) nonresident aliens with no U.S.
source income shall be disregarded. Subsections 414(b), (c), (m), (n) and (o) of
the Code shall be applied before the application of this paragraph to define
Highly Compensated Employee. Available Compensation as used in this paragraph
shall be computed without regard to the $150,000 limitation which would
otherwise apply pursuant to paragraph 2.6.
2.27 "KEY EMPLOYEE" shall mean any Employee, former Employee or
Beneficiary who, at any time during the Plan Year or any of the four (4)
preceding Plan Years, is:
14
<PAGE> 21
(a) an officer of the Employer having Aggregate
Compensation from the Employer in excess of 1.5 times the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for the Plan Year; provided that
not more than fifty (50) Employees or, if lesser, the greater of (i) three (3)
or (ii) ten percent (10%) of the Employees, shall be considered officers;
(b) one of the ten (10) Employees who has Aggregate
Compensation from the Employer of more than the amount in effect under Section
415(c)(1)(A) of the Code, owning (or considered to own within the meaning of
Code Section 318) the largest interests in the Employer (the Employee having the
greater compensation from the Employer shall be considered to own the larger
interest in the Employer if two (2) or more Employees shall have the same
ownership interest in the Employer);
(c) a five percent (5%) owner of the Employer; or
(d) a one percent (1%) owner of the Employer who has
Aggregate Compensation from the Employer of more than $150,000.
For purposes of this paragraph, the aggregation rules of Section
414(b), (c) and (m) of the Code, requiring that related employers be treated as
a single employer, shall apply for all purposes except for purposes of
determining ownership in the Employer. All provisions of this paragraph shall be
interpreted in accordance with the provisions of Section 416 of the Code.
2.28 "LEAVE OF ABSENCE" shall mean a period of absence granted in a
uniform and nondiscriminatory manner by the Employer, upon application in
writing, for reasons relating to:
15
<PAGE> 22
(a) accident, sickness or disability for which no
benefits are being paid under this Plan;
(b) job-connected education or training;
(c) governmental service, including jury duty, whether
elective or by appointment; or
(d) layoff, whether temporary or indefinite.
No Leave of Absence, except as required by law, may be granted for more
than one year, by the end of which time the Employee must be re-employed by the
Employer. If the Employee is not re-employed by the expiration of his or her
Leave of Absence, his or her employment shall cease with the date such Leave of
Absence began.
2.29 "LIMITATION YEAR" shall mean the Plan Year used for purposes
of applying the annual addition limitations of Section 415 of the Code set forth
in Section V.
2.30 "MATCHED CONTRIBUTIONS" shall mean Employer contributions
required pursuant to paragraph 4.4.
2.31 "MATCHED CONTRIBUTION PERCENTAGE" with respect to a Plan Year
shall mean, effective for the Plan Year beginning February 1, 1997, and
subsequent Plan Years, the average of the ratios, calculated for all Highly
Compensated Employees who are eligible to participate as a group and for all
Certain Other Participants as a separate group, of the amount of the Matched
Contributions made on behalf of each Participant in the group for the Plan Year
and those amounts treated as Matched Contributions
16
<PAGE> 23
pursuant to paragraph 5.8, to the Participant's ADP Compensation for the Plan
Year. The ratio for Highly Compensated Active Participants shall be determined
with respect to the Current Plan Year, but the ratio for Certain Other
Participants shall be determined with respect to the immediately preceding Plan
Year, unless the Employer files an election to use the ratios for the current
Plan year. The ratio for each Participant within a group shall be calculated
separately prior to averaging all ratios for all Participants within a group.
For purposes of this paragraph, the ratio for any Highly Compensated Employee
who is eligible to receive Matched Contributions for the Plan Year or to make
nondeductible employee contributions for the Plan Year under two or more plans
described in Section 401(a) of the Code that are maintained by the Employer or a
Related Entity shall be determined as if all such contributions were made under
a single plan. If multiple plans are aggregated for purposes of Section 410(b)
of the Code, the provisions of paragraph 5.3 shall apply. The Plan will take
into account the actual Matching Contribution ratios of all eligible Employees
for purposes of the Matching Contribution Percentage test under paragraph 5.4
and Section 401(m) of the Code. For this purpose, an eligible Employee is any
Employee who is directly or indirectly eligible to receive an allocation of
Matching Contributions or to make Elective Contributions and includes the
following:
(a) an Employee who would be a Plan Participant but for
the failure to make required contributions;
17
<PAGE> 24
(b) an Employee whose right to make Elective
Contributions or receive Matching Contributions has been suspended because of an
election (other than certain one-time elections) not to participate, or due to a
hardship distribution; and
(c) an Employee who cannot make an Elective Contribution
or receive a Matching Contribution due to annual additions limitations under
paragraph 5.12 and Section 415 of the Code.
In the case of an eligible Employee who makes no Elective Contributions and who
receives no Matching Contributions, the Matching Contribution ratio that is to
be included in determining the Matching Contribution to be included in
determining the Matching Contribution Percentage is zero. If the Plan calculates
the Matching Contribution Percentage for the Plan Year beginning February 1,
1997, using the ratio for Certain Other Participants from the prior Plan Year,
for purposes of determining the group of Certain Other Participants, the Plan
shall use the Plan definition of Highly Compensated Active Participants in force
immediately prior to February 1, 1997.
2.32 "NON-KEY EMPLOYEE" shall mean an Employee who is not a Key
Employee.
2.33 "NORMAL RETIREMENT DATE" shall mean the Anniversary Date
nearest a Participant's sixty-fifth (65th) birthday.
18
<PAGE> 25
2.34 "ONE YEAR BREAK IN SERVICE" shall mean a twelve (12)
consecutive month Period of Severance.
2.35 "PARTICIPANT" shall mean an Employee who has satisfied the
eligibility requirements of Article III or a former Employee who continues to
have an account with the Plan.
2.36 "PERIOD OF SEPARATION" shall mean a period of time commencing
with the date an Employee separates from Service and ending with the date such
Employee resumes employment with the Employer.
2.37 "PERIOD OF SEVERANCE" shall mean a period of time commencing
with the earlier of:
(a) The date an Employee separates from Service by reason
of quitting, retirement, death or discharge, or
(b) The date twelve (12) months after the date an
Employee separates from Service for any other reason, provided that in the case
of an absence from Service which begins on or after February 1, 1985, the Period
of Severance of an Employee who is absent from Service beyond the first
anniversary of the first date of absence for reasons of maternity or paternity
leave shall not commence until the second anniversary of the first date of such
absence. "Maternity or paternity leave" shall mean any separation from Service
(i) by reason of the pregnancy of the Employee, (ii) by reason of the birth of a
child of the Employee, (iii) by reason of the placement of a child in connection
with the adoption of such child by such Employee, or (iv) for purposes
19
<PAGE> 26
of caring for such child for a period immediately following such birth or
placement, but only if the Employee furnishes to the Committee such timely
information as the Committee may reasonably require to establish that the
absence from Service is for one of the permitted reasons and the number of days
for which there was such an absence. The period between the first and second
anniversaries of the first date of absence from work for such a reason is
neither Service for purposes of eligibility or vesting nor a Period of
Severance; and ending, in the case of an Employee who separates from Service by
reason other than death, with the date such Employee resumes employment with the
Employer.
2.38 "PLAN" shall mean the Hughes, Inc. Supply Cash or Deferred
Profit Sharing Plan and Trust (Amended and Restated as of February 1, 1998) as
embodied in this Agreement and as it may subsequently be amended.
2.39 "PLAN YEAR" shall mean each fiscal year beginning on February
1 and ending on January 31.
2.40 "REEMPLOYED INDIVIDUAL" shall mean a person who, after having
separated from Service, resumes employment:
(a) with any non-forfeitable interest in his or her
Employer Contribution Account, or
(b) with no such non-forfeitable interest in his or her
Employer Contribution Account, and who resumes employment either before a One
Year Break in Service or after a One Year Break in Service but before his or her
latest Period of Severance
20
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equals or exceeds the greater of (i) five (5) years of Service or (ii) his or
her length of Service; provided, however, that in the case of an individual who
became reemployed before February 1, 1985, the foregoing rule shall be applied
after substituting "zero (0)" for "five (5)," and provided further that in the
case of an individual who became reemployed on or after February 1, 1985, such
an individual shall receive no credit for Service for which no credit would have
been given had he or she become reemployed on January 31, 1985. In computing the
length of Service before a One Year Break in Service, any Service not required
to be taken into account under this paragraph by reason of any prior separation
from Service shall be disregarded.
2.41 "RELATED ENTITY" shall mean any corporation, trade or business
which is considered to be a member of a controlled group of corporations or an
affiliated service group which includes the Employer or which is considered to
be under common control with the Employer, as those terms are defined in Section
414(b), (c) and (m) of the Code as modified by Section 415(h) of the Code.
2.42 "RESTRICTED EMPLOYER CONTRIBUTIONS" shall mean Employer
contributions made pursuant to paragraph 4.6.
2.43 "ROLLOVER ACCOUNT" shall mean the account described at
paragraph 17.9.
2.44 "SERVICE" shall mean service without any break in employment
for the period prior to February 1, 1976, and, for the period after January 31,
1976, Service shall mean the time period
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commencing on the later of February 1, 1976 or an Employee's employment
commencement date and ending on the date a Period of Severance begins. Service
for these purposes includes a Period of Separation of less than twelve (12)
consecutive months. In the case of an Employee who separates from Service and
later resumes employment with the Employer, the period of Service prior to his
or her resumption of employment with the Employer shall be aggregated only if
such Employee is a Reemployed Individual. In calculating an individual's
Service, the following rules shall also apply:
(a) Except as hereinafter provided, an Employee shall not
receive any credit for Service for any period or periods of time in which said
Employee is not in the employ of an Employer unless the Employee is entitled to
credit for Service under Regulation Section 1.410(a)-7 issued by the Secretary
of the Treasury pursuant to ERISA or subparagraph (e) below.
(b) Transfers between Employers or Related Entities shall
not be deemed to be a break in Service. Service with a Related Entity shall
constitute Service with the Employer.
(c) In the event a Participant is reemployed after
incurring a Disability as defined in this Plan, he or she shall receive credit
for Service during the period in which he or she was disabled.
(d) In the event an Employee is on an authorized Leave of
Absence, he or she will be given credit for Service during such authorized
absence.
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(e) In the event an Employee is in "qualified military
service" as such term is defined in Section 414(u)(4) of the Code, his or her
Service shall not be deemed to be terminated except as provided herein. A
Participant who is discharged, released or who resigns from such military
service at a time and under conditions which entitle him or her, under
applicable Federal or State laws including, without limitation, the Uniformed
Services Employment and Reemployment Rights Act of 1994, to reemployment with
the Employer, but does not within ninety (90) days after discharge, release, or
resignation from such service, return to the employment of the Employer, shall
be deemed to have terminated employment on the date of his or her entrance into
such military service; and all of his or her rights hereunder shall cease as of
that date, and any benefit to which he or she may have been entitled shall be
forfeited except such vested rights, if any, to which he or she may be entitled,
under the provisions of Article VI.
2.45 "SPECIAL RESTRICTED EMPLOYER CONTRIBUTIONS" shall mean
Employer contributions made pursuant to paragraph 4.6, but allocated solely to
Certain Other Participants.
2.46 "SPOUSE" shall mean the Participant's spouse provided the
Participant and the spouse are married on the earlier of the following:
(a) the date as of which the Participant's benefits
commence; or
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(b) the date of the Participant's death. Spouse shall
also include a former spouse to the extent required under a Qualified Domestic
Relations order as defined at paragraph 17.7.
2.47 "TERMINATION DATE" shall mean the last day on which a
Participant is employed by the Employer.
2.48 "TOTAL ACCOUNT" shall mean the account of the Participant
which represents the entire interest of the Participant and which consists of
the Elective Contribution account, Matched Contribution account, discretionary
employer contribution account, Restricted Employer Contribution Account and
Rollover Account.
2.49 "TOP-HEAVY DETERMINATION DATE" shall mean the last day of the
preceding Plan Year, which is the date with respect to each Plan Year for
testing of a plan's top-heavy status. For newly adopted plans, the Top-Heavy
Determination Date shall be the last day of the first Plan Year.
2.50 "TOP-HEAVY PLAN" shall mean a plan as defined at paragraph
12.1.
2.51 "TRANSFERRED PARTICIPANT" shall mean an employee of a Related
Entity which is not an Employer under this Plan, who was participating in this
Plan immediately prior to his or her transfer to such Related Entity.
2.52 "TRUST" shall mean the trust created by this Agreement and
entered into between the Employer and the Trustee.
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2.53 "TRUST FUND" shall mean all assets held by the Trustee under
the terms of this Agreement.
2.54 "TRUSTEE" shall mean Sun Bank, National Association, or any
successor trustee appointed and qualified pursuant to paragraph 14.14.
2.55 "VALUATION DATE" shall mean the last day of April, the last
day of July, the last day of October and the last day of January of each Plan
Year. Notwithstanding the prior provisions of this paragraph, on and after May
1, 1998, Valuation Date shall mean any business day the United States financial
markets, the Trustee and the Federal Reserve are open for business.
2.56 "VESTED ACCOUNT" shall have the meaning given in paragraph
7.1.
ARTICLE III
PARTICIPATION
3.1 ELIGIBILITY REQUIREMENTS. An Employee included under the
provisions of the Plan in effect immediately prior to the Effective Date shall
continue to participate in accordance with the provisions of this amended and
restated Plan, provided the Employee is in the employ of the Employer on that
date. Any other Employee shall become a Participant as of the Entry Date
coinciding with or next succeeding the date the Employee attains age twenty-one
(21) and completes at least one year of Service with the Employer, provided that
the Employee is still in the employ of the Employer on that date.
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3.2 PARTICIPATION OF REEMPLOYED INDIVIDUALS. A Reemployed
Individual shall become a Participant on the later of the date of reemployment
by the Employer or the date described above in paragraph 3.1. An individual's
period of Service after he incurs five (5) consecutive One-Year Breaks in
Service shall not be taken into account in determining the vested percentage of
his discretionary employer contribution account which accrued prior to such
Breaks in Service.
3.3 SERVICE WITH A RELATED ENTITY. If a Participant is transferred
on or after August 1 of any Plan Year to a Related Entity which is not an
Employer under this Plan, he or she shall be deemed an Active Participant
hereunder for such Plan Year. if an employee of a Related Entity which is not an
Employer under this Plan commences employment with an Employer after July 31 of
any Plan Year, he or she shall not become eligible to participate hereunder
until the first day of the subsequent Plan Year. If a Participant is transferred
prior to August 1 of any Plan Year to a Related Entity which is not an Employer
under this Plan, he or she shall not be deemed an Active Participant hereunder
after the transfer. Notwithstanding the above, if a Participant is transferred
during a Plan Year to a Related Entity which is not an Employer under this Plan,
but the Participant is transferred again during the same Plan Year and is
employed by the Employer on the last day of such Plan Year, he or she shall be
deemed to be an Active Participant under this Plan for the entire Plan
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Year. If an employee of a Related Entity which is not an Employer under this
Plan is transferred to an Employer during the Plan Year, but the employee is
transferred again during the same Plan Year and is employed on the last day of
such Plan Year by a Related Entity which is not an Employer under this Plan,
such employee shall not be entitled to participate hereunder for any periods
during which he is not employed by an Employer.
3.4 DISPUTES OVER PARTICIPATION. Questions concerning the
eligibility of an Employee to become a Participant shall be decided by the
Committee, which shall give the Employee an opportunity to be heard if the
Employee so requests. The decision of the Committee shall be final.
ARTICLE IV
CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS. The Board of Directors of the Employer
shall determine the contribution (which may be either a fixed dollar amount, a
percentage of profits, or any other formula for determining the contribution) to
be contributed by the Employer to the Trust for each year subject, however, to
any Matched Contribution required pursuant to paragraph 4.4 and any minimum
employer contribution required pursuant to paragraph 4.7 and provided that the
aggregate amount of Elective Contributions, Matched Contributions, discretionary
employer contributions, Restricted Employer Contributions and minimum employer
contributions to be contributed and deducted for any particular
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<PAGE> 34
fiscal year of the Employer shall not exceed fifteen percent (15%) of All
Taxable Compensation for that year of all Active Participants and further
provided that once the contribution has been allocated to the Participants'
accounts pursuant to Article V, the amounts allocated to each account are not in
excess of the amounts which, when added to allocated forfeitures, are allowable
as annual additions to the Participant's account under paragraph 5.12 below. Any
contribution made to the Trust for any Plan Year is conditioned on the
deductibility of the contribution for federal income tax purposes under Section
404 of the Code.
4.2 ELECTIVE CONTRIBUTIONS. A Participant may, pursuant to a
Compensation Deferral Agreement, direct the Employer to contribute Elective
Contributions from the Participant's Allocation Compensation to the
Participant's Elective Contribution account in an amount of not less than two
percent (2%) nor more than fifteen percent (15%) of the amount of Allocation
Compensation paid during the pay period provided that the aggregate Elective
Contribution for any Participant for any calendar year may not exceed Seven
Thousand Dollars ($7,000), as adjusted by the Treasury Department pursuant to
Section 402(g) of the Code for cost of living changes. The Committee may also
allow contributions at a rate higher than fifteen percent (15%) during any
deferral period if it is necessary to allow the Participant to reach a higher
percentage contribution for the entire Plan Year provided the aggregate Elective
Contribution for the Plan Year does not exceed fifteen percent (15%) of
Allocation
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Compensation and further provided that such exceptions are done in a
nondiscriminatory manner for all Participants. Elective Contributions shall be
made on a payroll deduction basis each pay period.
4.3 CHANGES TO CONTRIBUTION RATE. An Active Participant may direct
the Employer to discontinue making Elective Contributions at any time by giving
written notice to the Committee of such suspension on a form provided by the
Committee at least fourteen (14) days prior to the effective date of the
suspension. An Active Participant may change the rate of or resume Elective
Contributions as of any Entry Date by giving notice to the Committee on a form
provided by the Committee at least fourteen (14) days prior to such Entry Date.
4.4 EMPLOYER MATCHED CONTRIBUTIONS. Prior to May 1, 1998, as of
each Valuation Date the Employer shall make a Matched Contribution to each
Participant's Matched Contribution account for each of its Participants who made
Elective Contributions during the three (3) calendar month period ending on such
Valuation Date, provided they are an Employee on such Valuation Date or
terminate employment due to death, Disability, or Retirement during such
valuation period. The Matched Contribution shall be equal to fifty percent (50%)
of the eligible Elective Contributions of each eligible Participant, as set
forth in this paragraph, but such Matched Contributions shall not exceed one and
one-half percent (1.5%) of the Participant's
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<PAGE> 36
Allocation Compensation in the three (3) calendar month period ending on the
Valuation Date. After April 30, 1998, following each payroll period the Employer
shall make a Matched Contribution to each Participant's Matched Contribution
account for each of its Participants who made Elective Contributions for the
payroll period. The Matched Contribution shall be equal to fifty percent (50%)
of the eligible Elective Contributions made during the payroll period by each
eligible Participant, but such Matched Contribution shall not exceed one and
one-half percent (1.5%) of the Participant's Allocation Compensation for the
payroll period. In addition, each Participant's Matched Contributions for any
Plan Year may not exceed one-half of the dollar limitation set forth in Section
402(g) of the Code which is Seven Thousand Dollars ($7,000), as adjusted by the
Treasury Department pursuant to Section 402(g) of the Code for cost of living
changes. The Matched Contributions shall be held in the Participant's Matched
Contribution account.
4.5 DISCRETIONARY EMPLOYER CONTRIBUTIONS. Each Plan Year the
Employer may contribute a discretionary employer contribution in addition to any
other contribution set forth herein. Such contribution may be made in cash or in
Employer Securities or in a combination of both. Such contribution shall be
subject to the vesting schedule set forth in Article VII.
4.6 RESTRICTED EMPLOYER CONTRIBUTIONS. Each Plan Year the Employer
may contribute a Special Restricted Employer Contribution and a Restricted
Employer Contribution in addition
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to any other contribution set forth herein. Such contributions may be made in
cash or in Employer Securities or in a combination of both. Such contributions
shall be allocated pursuant to paragraph 6.2. Once allocated to a Participant's
account, such contributions shall be fully vested at all times.
4.7 MINIMUM EMPLOYER CONTRIBUTION. For any Plan Year in which the
Plan is determined to be a Top-Heavy Plan, Employer contributions, including
discretionary employer contributions, Restricted Employer Contributions and
minimum employer contributions, but excluding Elective Contributions and Matched
Contributions, allocated on behalf of any Participant who is a Non-Key Employee
but who is employed on the last day of the Plan Year shall be equal to at least
three percent (3%) of that Participant's All Taxable Compensation.
Notwithstanding the prior provisions of this paragraph, if the Employer
contributions, including Elective Contributions, Matched Contributions,
discretionary employer contributions, Restricted Employer Contributions and
minimum employer contributions, allocated to the account of each Key Employee in
all defined contribution plans of the Employer is less than three percent (3%)
of All Taxable Compensation of each Key Employee, the minimum percentage of the
Compensation that must be contributed by the Employer pursuant to this paragraph
for a Plan Year shall be the largest percentage of All Taxable Compensation
contributed by the Employer on behalf of any Key Employee for that Plan Year. A
minimum allocation for any such Participant shall be required
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under this Plan to the extent the minimum allocation requirements are not met
for that Participant under other defined contribution plans of the Employer.
4.8 DELIVERY OF CONTRIBUTIONS TO TRUSTEE. Elective Contributions
from Participants shall be remitted to the Trustee as soon as reasonably
possible after the contributions are made. All other contributions shall be
contributed within twelve (12) months after the end of the Plan Year with
respect to which the contribution relates or, if earlier, within the time
prescribed by Section 404(a)(6) of the Code within which contributions must be
made in order to be allowed as a Federal income tax deduction for the Employer's
fiscal year for which the contribution has been made.
4.9 RETURN OF EMPLOYER CONTRIBUTIONS. No assets of the Trust Fund
shall at any time revert or be repaid to the Employer except that:
(a) If, due to a mistake of fact, made in good faith, the
Employer makes a contribution (i) that otherwise would not have been made, or
(ii) which is of a greater amount than the amount that otherwise would have been
contributed, such contribution or excess amount may be repaid by the Trustee to
the Employer at the Employer's option provided that such repayment is made
within twelve (12) months from the date that the Employer paid the contribution
to the Trust.
(b) If a contribution (or portion thereof) made by the
Employer is disallowed as a deduction to the Employer for federal
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income tax purposes, the amount of such contribution (or portion thereof) may be
repaid by the Trustee to the Employer at the Employer's option provided that
such repayment is made within twelve (12) months after the disallowance of the
deduction has occurred.
In making repayment under either subparagraph (a) or (b) above, only
the amount of the contribution (or portion thereof) involved may be repaid, and
no earnings attributable thereto may be included in such repayment. In the event
there have been net investment losses that are attributable to such amount, the
amount payable will be adjusted to reflect its proportional share of any such
losses.
4.10 VOLUNTARY CONTRIBUTIONS. A separate account shall be
established for each participant who contributed voluntary after-tax employee
contributions to a plan which has been consolidated with and into this Plan.
However, no voluntary after-tax contributions shall be contributed by an
employee to this plan at any time. Employees who have voluntary after-tax
contributions may withdraw them upon thirty (30) days advance written notice to
the Committee.
4.11 RIGHTS FOR MILITARY SERVICE. Notwithstanding any provisions of
this Plan to the contrary, a Participant who has been in "qualified military
service" as defined in Section 414(u)(4) of the Code and is entitled to
reemployment rights under the Uniformed Services Employment and Reemployment
Rights
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Act of 1994 shall be entitled to contributions, benefits and service credit in
accordance with Section 414(u) of the Code.
ARTICLE V
MAXIMUM CONTRIBUTIONS
5.1 LIMITATIONS ON ELECTIVE CONTRIBUTIONS. The Actual Deferral
Percentage for Highly Compensated Employees who are eligible to participate in
the Plan for any Plan Year shall not exceed the greater of (a) or (b) below
subject to the provisions of paragraph 5.6:
(a) 125% of the Actual Deferral Percentage of Certain
Other Participants, or
(b) 200% of the Actual Deferral Percentage of Certain
Other Participants, provided, however, that the Actual Deferral Percentage for
the Highly Compensated Employees who are eligible to participate in the Plan
does not exceed the Actual Deferral Percentage of Certain Other Participants by
more than two (2) percentage points or such lesser amount as the Secretary of
the Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
A Participant who makes Elective Contributions under this Plan during
any calendar year in excess of seven thousand dollars ($7,000), as adjusted by
the Treasury Department pursuant to Section 402(g) of the Code for cost of
living changes, shall be
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subject to the corrective procedures set forth under Section 402(g) of the Code
and paragraph 5.09.
5.2 PROCEDURE IF ELECTIVE CONTRIBUTION LIMITATION EXCEEDED. The
Committee shall determine as of the end of the Plan Year whether the Actual
Deferral Percentage for the Highly Compensated Employees will satisfy either of
the tests contained in paragraph 5.1. In the event that (i) neither of the tests
described in paragraph 5.1 will be satisfied after all Restricted Employer
Contributions have been allocated for the Plan Year, and all recharacterizations
have been completed pursuant to paragraph 5.8, and (ii) the Plan fails to
satisfy the multiple use test set forth in paragraph 5.6, any excess
contributions, as defined below, plus any income allocable thereto, shall be
distributed to the Highly Compensated Employees who are affected, as prescribed
below, on or before April 15 following the end of such Plan Year to avoid the
excise tax equal to ten percent (10%) of the amount of the excess contributions
not distributed to the appropriate Highly Compensated Employees during the first
2 1/2 months of that next Plan Year. Otherwise, such distribution shall occur no
later than the last day of the immediately succeeding Plan Year. For purposes of
this paragraph, "excess contribution" shall mean, with respect to a Plan Year,
the excess of the amount of Elective Contributions contributed on behalf of the
Highly Compensated Employee including amounts treated as Elective Contributions
pursuant to paragraph 5.8 for such Plan Year over the maximum amount allowed in
order to satisfy either of the tests of
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paragraph 5.1, subject to the provisions of paragraph 5.6. The maximum amount
allowed is determined by reducing the Elective Contributions, as set forth
below, made on behalf of one or more of the Highly Compensated Employees in
order of such Employee making the largest Elective Contribution by amount and
not by percentage. Any reduction as to a particular Highly Compensated Employee
shall occur first from Elective Contributions contributed by the Participant
without regard to paragraph 5.8 and then from contributions that were
recharacterized as Elective Contributions pursuant to paragraph 5.8. Income (or
loss) allocable to the excess contributions shall also be distributed. The
income allocable to the excess contributions shall include the income (or loss)
for the Plan Year in which the excess contribution was made. The income for the
Plan Year shall be determined by multiplying the income (or loss) allocable
under the terms of this Plan to the Participant's Elective Contribution Account
and to amounts treated as Elective Contributions pursuant to paragraph 5.8 for
the Plan Year by a fraction, the numerator of which is the amount of the
Elective Contribution that is reduced and the denominator of which is (i) the
value of the Participant's Elective Contribution Account including the value of
amounts treated as Elective Contributions pursuant to paragraph 5.8, on the last
day of the Plan Year, reduced by (ii) the gain allocable to such total amounts
for the Plan Year, or increased by (iii) the loss allocable to such total
amounts for the Plan Year. The excess contributions to be distributed to a
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Participant shall be decreased by the amount of Elective Contributions
distributed to the Participant pursuant to paragraph 5.09 for the calendar year
ending within the Plan Year. Distributions authorized herein shall be made in
the form of a single payment notwithstanding any provisions herein to the
contrary.
5.3 TREATMENT OF SIMILAR PLANS. The limitations of paragraphs 5.10
and 5.11 shall apply as if the total benefit payable under all qualified defined
benefit plans maintained by an Employer or a Related Entity were payable from
one plan and as if the total Annual Additions made to all qualified defined
contribution plans maintained by an Employer or a Related Entity were made to
one plan. If this Plan satisfies the requirements of Section 410(b) of the Code
(other than Section 410(b)(2)(A)(ii) of the Code) only if aggregated with one or
more other plans or if one or more other plans satisfy the requirements of
Section 410(b) of the Code (other than Sections 410(b)(2)(A)(ii) of the Code)
only if aggregated with this Plan, then all of the limitations of Article V
shall be determined as if all such plans were a single plan.
5.4 LIMITATION ON MATCHED CONTRIBUTIONS. The Matched Contribution
Percentage for the Highly Compensated Employees who are eligible to participate
in the Plan for any Plan Year shall not exceed the greater of (a) or (b) below
subject to the provisions of paragraph 5.6:
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(a) 125% of the Matched Contribution Percentage of
Certain Other Participants, or
(b) 200% of the Matched Contribution Percentage of
Certain Other Participants, provided, however, that the Matched Contribution
Percentage for the Highly Compensated Employees who are eligible to participate
in the Plan does not exceed the Matched Contribution Percentage of Certain Other
Participants by more than two (2) percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly Compensated Employee.
5.5 PROCEDURE IF MATCHED CONTRIBUTION LIMITATION EXCEEDED. The
Committee shall determine as of the end of the Plan Year whether the Matched
Contribution Percentage for the Highly Compensated Employees will satisfy either
of the tests contained in paragraph 5.4. In the event that neither of the tests
described in paragraph 5.4 will be satisfied after (i) all Restricted Employer
Contributions have been allocated for the Plan Year and all recharacterizations
have been completed pursuant to paragraph 5.8, and (ii) the Plan fails to
satisfy the multiple use test set forth in paragraph 5.6, any excess aggregate
contributions, as defined below, plus any income allocable thereto, shall be
distributed to the Highly Compensated Employees who are affected, as prescribed
below, on or before April 15 following the end of such Plan Year to avoid the
excise tax equal to ten percent (10%) of the amount of the excess
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aggregate contributions not distributed to the appropriate Highly Compensated
Employees during the first 2 1/2% months of that next Plan Year. Otherwise, such
distribution shall occur no later than the last day of the immediately
succeeding Plan Year. For purposes of this paragraph "excess aggregate
contributions" shall mean, with respect to a Plan Year, the excess of the amount
of Matched Contributions contributed on behalf of the Highly Compensated
Employee including amounts treated as Matched Contributions pursuant to
paragraph 5.8 for such Plan Year over the maximum amount allowed in order to
satisfy either of the tests of paragraph 5.4, subject to the provisions of
paragraph 5.6. The maximum amount allowed is determined by reducing the Matched
Contributions made on behalf of one or more of the Highly Compensated Employees
in order of such Employees whose accounts have received the largest amount of
Matched Contributions and not by percentages. Any reduction as to a particular
Highly Compensated Employee shall occur first from Matched Contributions made
without regard to paragraph 5.8 and then from contributions that were
recharacterized as Matched Contributions pursuant to paragraph 5.8. Income (or
loss) allocable to the excess aggregate contributions shall also be distributed.
The income allocable to the excess aggregate contributions shall include the
income (or loss) for the Plan Year in which the excess aggregate contribution
was made. The income for the Plan Year shall be determined by multiplying the
income (or loss) allocable under the terms of this Plan to the Participant's
Matched Contribution
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Account and to amounts treated as Matched Contributions pursuant to paragraph
5.8 for the Plan Year by a fraction, the numerator of which is the amount of the
Matched Contribution that is reduced and the denominator of which is (i) the
value of the Participant's Matched Contribution Account and the value of amounts
treated as Matched Contributions pursuant to paragraph 5.8 on the last day of
the Plan Year, reduced by (ii) the gain allocable to such total amounts for the
Plan Year, or increased by (iii) the loss allocable to such total amounts for
the Plan Year.
Distributions authorized herein shall be made in the form of a single
payment notwithstanding any provisions herein to the contrary.
5.6 LIMITATION ON ADP AND MCP TESTS. Effective for the Plan Year
which begins February 1, 1989, the sum of the Highly Compensated Employees
Actual Deferral Percentage and Matched Contribution Percentage may not exceed
the multiple use limitation which is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the Actual Deferral Percentage of
Certain Other Participants for the Plan Year; or (b) the
Matched Contribution Percentage of Certain Other Participants
for the Plan Year.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice
the lesser of (i)(a) or (i)(b).
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The Committee, in lieu of determining the multiple use limitation as the sum of
(i) and (ii), may elect to determine the multiple use limitation as the sum of
(iii) and (iv):
(iii) 125% of the lesser of: (a) the Actual Deferral Percentage of
Certain Other Participants for the Plan Year; or (b) the
Matched Contribution Percentage of Certain Other Participants
for the Plan Year.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Committee will determine whether the Plan satisfies the multiple use
limitation after applying the Actual Deferral Percentage and the Matched
Contribution Percentage test and after making any corrective distributions
required. If the Committee determines the Plan has failed to satisfy the
multiple use limitation, the Committee will correct the failure by treating the
excess amount as excess Elective Contributions or excess aggregate Matched
Contributions as determined by the Committee in its sole discretion in
accordance with Section 401(m)(9) of the Code and the Treasury Regulations
issued thereunder. In addition, the requirements of this paragraph shall be
administered in accordance with the provisions of Section 401(k) of the Code and
Sections 1.401(k)-l(b)(3), 1.401(m)-l(b) and 1.401(m)-2(c) of the Treasury
Regulations issued thereunder
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5.7 LIMITATION ON DISCRETIONARY AND RESTRICTED EMPLOYER
CONTRIBUTIONS. Discretionary employer contributions and Restricted Employer
Contributions may not discriminate in favor of Highly Compensated Employees
pursuant to the provisions of Section 401(a)(4) of the Code.
5.8 RECHARACTERIZING CONTRIBUTIONS. The Committee may elect to
make the following elections for any Plan Year, but shall not be bound to make
the same election in any subsequent year:
(a) Amounts treated as Elective Contributions. The
Committee may elect to treat all or part of the Matched Contributions,
Restricted Employer Contributions and/or the Special Restricted Employer
Contributions as Elective Contributions for purposes of complying with the
requirements of paragraph 5.1 for any Plan Year. In such event, the Matched
Contributions, Restricted Employer Contributions and Special Restricted Employer
Contributions treated as Elective Contributions shall not be considered as
Matched Contributions for purposes of paragraphs 5.4 and 5.5, but the remaining
Matched Contributions must satisfy the provisions of paragraph 5.4. In such
event, all Restricted Employer Contributions and Special Restricted Employer
Contributions, including those treated as Elective Contributions, must meet the
requirements of paragraph 5.7 for the Plan Year and the Restricted Employer
Contributions and Special Restricted Employer Contributions, excluding those
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treated as Elective Contributions and excluding those treated as Matched
Contributions pursuant to (b) below, must independently meet the requirements of
paragraph 5.7 for the Plan Year. Except as specifically provided above, the
Matched Contributions, Restricted Employer Contributions and Special Restricted
Employer Contributions treated as Elective Contributions shall not be taken into
account in determining whether any other contributions or benefits satisfy the
requirements of paragraph 5.7.
(b) Amounts Treated as Matched Contributions. The
Committee may elect to treat all or part of the Elective Contributions,
Restricted Employer Contributions and/or the Special Restricted Employer
Contributions as Matched Contributions for purposes of complying with the
requirements of paragraph 5.4 for any Plan Year. In such event, all Elective
Contributions, including the Elective Contributions treated as Matched
Contributions, must meet the requirements of paragraph 5.1 for the Plan Year and
the Elective Contributions, excluding those treated as Matched Contributions,
must independently meet the provisions of paragraph 5.1 for the Plan Year.
Except as provided in the preceding sentence, Elective Contributions treated as
Matched Contributions shall not be considered in determining whether any other
contributions satisfy the requirements of paragraph 5.1. If Restricted Employer
Contributions and/or Special Restricted Employer Contributions are treated as
Matched Contributions, all Restricted Employer Contributions and Special
Restricted Employer Contributions,
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<PAGE> 50
including those treated as Matched Contributions, must meet the requirements of
paragraph 5.7 for the Plan Year and the Restricted Employer Contributions and
Special Restricted Employer Contributions, excluding those treated as Matched
Contributions and excluding those treated as Elective Contributions pursuant to
(a) above, must independently meet the requirements of paragraph 5.7 for the
Plan Year. Except as specifically provided above, the Elective Contributions,
Restricted Employer Contributions and Special Restricted Employer Contributions
treated as Matched Contributions shall not be taken into account in determining
whether any other contributions or benefits satisfy the requirements of
paragraphs 5.1 or 5.7.
(c) Restrictions on Recharacterizations. Notwithstanding
the prior provisions of this paragraph, Restricted Employer Contributions and
Special Restricted Employer Contributions may not be treated as Elective
Contributions if the effect is to increase the difference between the Actual
Deferral Percentage for all Highly Compensated Employees and the Actual Deferral
Percentage for all Certain Other Participants. Similarly, Restricted Employer
Contributions and Special Restricted Employer Contributions may not be treated
as Matched Contributions if the effect is to increase the difference between the
Matched Contribution Percentage for all Highly Compensated Employees and the
Matched Contribution Percentage for all Certain Other Participants.
44
<PAGE> 51
(d) Code Provisions. The requirements of this paragraph
shall be administered in accordance with the provisions of Section 401(k) of the
Code and Sections 1.401(k)-l(b)(3) and 1.401(m)-l(b) of the Treasury Regulations
thereunder.
5.9 RETURN OF EXCESS ELECTIVE CONTRIBUTIONS. If a Participant
determines that his or her Elective Contributions to this Plan plus elective
contributions to any other 401(k) plan exceed the annual limitation on such
contributions pursuant to Section 402(g) of the Code (relating to the $7,000
exclusion limitation on elective deferrals) for any calendar year and not later
than the first March 1 following the end of such calendar year the Participant
notifies the Committee in writing of the amount of the Elective Contribution to
this Plan that represents an excess deferral, the Committee shall direct the
Trustee to distribute such amount plus any income allocable to such amount, as
determined in accordance with the procedure set forth in paragraph 5.2 for
income on "excess contributions," in one lump sum to the Participant not later
than the first April 15 following the end of such calendar year notwithstanding
any other provisions of this Plan. Any return of Elective Contributions pursuant
to this paragraph shall not reduce the Elective Contributions taken into account
for purposes of calculating the Actual Deferral Percentage of any Highly
Compensated Employee who is eligible to participate in the Plan, but it shall
reduce the Elective Contributions taken into account for such purposes for
Certain Other Participants if the excess Elective Contributions
45
<PAGE> 52
are made to this Plan or any plan of a Related Entity. The amount to be returned
pursuant to this paragraph shall be reduced by the amount of "excess
contributions" previously distributed, pursuant to paragraph 5.2, for the Plan
Year beginning within the calendar year.
5.10 MAXIMUM ANNUAL ADDITIONS. Notwithstanding anything contained
herein to the contrary, the annual addition, as defined herein, made to a
Participant's account for any Plan Year after the Effective Date shall not
exceed the lesser of twenty-five (25%) of such Participant's All Taxable
Compensation (for Plan Years ending prior to February 1, 1998) or Aggregate
Compensation (for Plan Years beginning after January 31, 1998) for such Plan
Year or Thirty Thousand Dollars ($30,000.00) (as adjusted for increases in the
cost of living in accordance with regulations prescribed by the Secretary of the
Treasury or his delegate). In the event this limitation is exceeded, the
Elective Contribution credited to such Participant's account shall be reduced so
that the amount credited shall not exceed this limitation and the amount of
Elective Contribution so reduced shall be distributed to the Participant. In the
event the limitation is still exceeded the forfeitures allocated to such
Participant's account shall be reduced so that the amount credited shall not
exceed this limitation and the amount of forfeitures so reduced shall be
reallocated in the same manner as the initial allocation of forfeitures was
made, except that such Participant's account shall not share in the
reallocation. In the event the limitation
46
<PAGE> 53
is still exceeded, the discretionary employer contribution credited to such
Participant's account shall be reduced so that the amount credited shall not
exceed this limitation and the amount of such Employer contribution so reduced
shall be reallocated in the same manner as the initial allocation of such
Employer contribution was made, except that such Participant's account shall not
share in the reallocation. In the event the limitation is still exceeded, the
Special Restricted Employer Contribution and Restricted Employer Contribution
credited to such Participant's account shall be reduced so that the amount
credited shall not exceed this limitation and the amount of such Employer
contribution so reduced shall be reallocated in the same manner as the initial
allocation of such Employer contribution was made, except that such
Participant's account shall not share in the reallocation. If, after the
reductions described above are made, a portion of the Employer contribution or
forfeitures remains unallocated due to the annual addition limitation set forth
above, such unallocated portion shall be held in a suspense account and
allocated at the end of the next Plan Year (to the extent possible without
exceeding this limitation) to the Participants' accounts in the same manner as
the Employer contribution would be allocated for such Plan Year. In such event
the suspense account shall be allocated prior to allocation of the Employer
contribution for the succeeding Plan Year and to the extent the annual additions
limitation for such Plan Year is again exceeded, the reductions set forth above
for Employer
47
<PAGE> 54
contributions shall apply until such time as the entire suspense account is
allocated. If unallocated amounts are held in a suspense account at the time of
the termination of the Plan and such unallocated portions may not be allocated
as a result of the limitations of this paragraph, then such unallocated portions
shall be returned to the Employer. Notwithstanding the foregoing, the otherwise
permissible annual addition for any Participant under this Plan may be further
reduced to the extent necessary, as determined by the Employer, to prevent
disqualification of the Plan under Section 415 of the Code (or any statute of
similar import), which imposes additional limitations on the benefits payable to
any Participant who also participates in another tax-qualified pension, profit
sharing or any other type of retirement plan of the Employer. "Annual addition"
means the total of all of the company and employee contributions and forfeitures
allocated to a Participant's account in this and any other tax-qualified defined
contribution plan of the Employer and all Related Entities.
Amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Section 415(l)(1) of the Code, which is part of a defined
benefit plan maintained by the Employer or a Related Entity are treated as
annual additions to a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of
48
<PAGE> 55
a Participant who at any time during the Plan Year or any preceding Plan Year
was a Key Employee, under a welfare benefit fund, as defined in Section 419(e)
of the Code, maintained by the Employer or a Related Entity, are treated as
annual additions to a defined contribution plan.
5.11 LIMITATION FOR COMBINATION OF PLANS. In the case of a
Participant who participates in this Plan and a qualified defined benefit plan
maintained by the Employer or any Related Entity, the sum of the defined benefit
plan fraction and the defined contribution plan fraction in any Plan Year shall
not exceed l.0. For purposes of applying the limitation of this paragraph, the
following rules shall apply:
(a) The defined benefit plan fraction for such Plan Year
is a fraction:
(i) the numerator of which is the projected annual
benefit of the Participant under the defined benefit plan
(determined as of the close of the Plan Year), and
(ii) the denominator of which is the lesser of the
following:
(aa) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(b)(1)(A) of
the Code for such Plan Year, or
49
<PAGE> 56
(bb) the product of 1.4 multiplied by the amount
which may be taken into account under the percentage
limitation of Section 415(c)(1)(B) of the Code with
respect to such individual for such Plan Year.
(b) The defined contribution plan fraction for such Plan
Year is a fraction:
(i) the numerator of which is the sum of the total annual
additions (as defined in paragraph 5.10) to the Participant's
account(s) under the defined contribution plan(s) as of the
close of the Plan Year, and
(ii) the denominator of which is the sum of the lesser of
the following amounts for such Plan Year and for each prior
year of service with the Employer:
(aa) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of
the Code for such Plan Year (determined without
regard to Section 415(c)(6)), or
(bb) the product of 1.4 multiplied by the amount
which may be taken into account under the percentage
limitation of Section 415(c)(1)(B) of the Code with
respect to such individual for such Plan Year.
If such sum exceeds 1.0, then the benefits from the defined
benefit plan will be limited to such amounts as will reduce
such sum to 1.0. For each Plan Year in
50
<PAGE> 57
which the Plan is a Top-Heavy Plan, this paragraph shall be
subject to the provisions of paragraph 12.8.
ARTICLE VI
ALLOCATION OF EMPLOYER CONTRIBUTIONS,
FORFEITURES AND EARNINGS
6.1 INDIVIDUAL ACCOUNTS. The Committee shall establish and
maintain adequate records to disclose the interest in the Trust of each
Participant, former Participant and Beneficiary, which interest shall be known
as the Participant's Total Account. Such records shall be in the form of
individual accounts and each Participant or former Participant shall have the
following accounts:
(a) Elective Contribution account
(b) Matched Contribution account
(c) Discretionary employer contributions account
(d) Restricted Employer Contribution account
(e) Rollover account
(f) Voluntary Contribution account
The Committee, at its option, may establish additional accounts or subaccounts
for the proper administration of the Plan. The existence of such accounts will
not be deemed to give any person any right, title or interest in any or to any
specific assets or part of the Trust Fund.
6.2 VALUATION DATE ADJUSTMENTS AND ALLOCATIONS PRIOR TO MAY 1,
1998. On each Valuation Date prior to May 1, 1998, the account of each
Participant and former Participant or Beneficiary
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<PAGE> 58
shall be adjusted in accordance with the following provisions in the order set
forth below:
(a) Reduce the balances in each account by any
withdrawals from that account since the most recent Valuation Date.
(b) Elective Contributions shall be allocated to the
Elective Contributions account for the Participant that made the Elective
Contribution.
(c) Matched Contributions shall be allocated on the
Valuation Date to the Matched Contributions account for the Participant for whom
the Matched Contribution was made pursuant to paragraph 4.4.
(d) Minimum employer contributions shall be allocated
only on the last Valuation Date of each Plan Year to the discretionary employer
contribution account for the Participants who are entitled thereto pursuant to
paragraph 4.7.
(e) Forfeitures shall first be used to correct a mistake
of fact in allocating contributions. Forfeitures used to correct a mistake shall
be allocated as required to correct the mistake. Secondly, forfeitures shall be
used to provide Matched Contributions in accordance with paragraph 4.4. Any
remaining forfeitures shall be used to reestablish accounts pursuant to
paragraph 10.4. Discretionary employer contributions used to correct a mistake
shall be allocated as required to correct the mistake. Forfeitures and
discretionary employer contributions used to reestablish an account pursuant to
paragraph 10.4 shall
52
<PAGE> 59
be allocated to the reemployed Participant's discretionary employer contribution
account.
(f) Discretionary employer contributions and forfeitures
remaining after excluding any such amounts allocated pursuant to subparagraph
(e) shall be allocated only on the last Valuation Date of each Plan Year to the
discretionary employer contribution accounts of each Participant who is an
Employee on the last day of the Plan Year and such allocation shall be based on
the same proportion that each such Participant's Allocation Compensation, after
excluding any portion of such Allocation Compensation that was earned during a
period when he was not a Participant with respect to such Plan Year, bears to
the total of such Allocation Compensation of all such Participants with respect
to such Plan Year. However, if the Plan fails to satisfy the coverage test
prescribed by Section 410(b) of the Code, the requirement that an Employee be
employed on the last day of the Plan Year to receive an allocation of
discretionary employer contributions and forfeitures shall be suspended
beginning first with the includible Employee, as defined below, employed with
the Employer on the last day of the Plan Year, then the includible Employee(s)
who have the latest separation from service during the Plan Year, and continuing
to suspend in descending order the employment requirement for each includible
Employee who incurred an earlier separation from service, from the latest to the
earliest separation from service date, until the Plan satisfies the coverage
test for the Plan Year. If two or more includible
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<PAGE> 60
Employees have a separation from service on the same day, the employment
requirement shall be suspended for all such includible Employees, irrespective
of whether the Plan can satisfy the coverage test by accruing benefits for fewer
than all such includible Employees. For purposes of this paragraph, "includible"
Employees are all Employees other than any Employee who incurs a separation from
service during the Plan Year and fails to complete at least 501 Hours of Service
for the Plan Year. A Plan satisfies the coverage test if, on the last day of
each quarter of the Plan Year, the number of certain other Participants who
benefit under the Plan is at least equal to 70% of the total number of
includible certain other Participants as of such day. For purposes of the
Coverage Test, an Employee is benefiting under the Plan on a particular date if
he is entitled to an allocation of Employer Contributions and forfeitures for
the Plan Year. This suspension of employment requirement applies separately to
Matched Contributions, and the Committee will treat an Employee as benefiting
under that portion of the Plan if he is an eligible Employee for purposes of the
Code Section 401(m) nondiscrimination test.
(g) Special Restricted Employer Contributions shall be
allocated only on the last Valuation Date of each Plan Year to the Restricted
Employer Contribution accounts of each Certain Other Participant who is an
Employee on the last day of the Plan Year and such allocation shall be based on
the same proportion that each such Participant's Allocation Compensation, after
54
<PAGE> 61
excluding any portion of such Allocation Compensation that was earned during a
period when he was not a Participant with respect to such Plan Year, bears to
the total of such Allocation compensation of all, such Participants with respect
to such Plan Year.
(h) Notwithstanding the above, Restricted Employer
Contributions, after excluding any Special Restricted Employer Contributions
required pursuant to the provisions of paragraph 4.6, shall be allocated only on
the last Valuation Date of each Plan Year to the Restricted Employer
Contribution accounts of each Participant who is an Employee on the last day of
the Plan Year and such allocation shall be based on the same proportion that
each such Participant's Allocation Compensation, after excluding any portion of
such Allocation Compensation that was earned during a period when he was not a
Participant with respect to such Plan Year, bears to the total of such
Allocation Compensation of all such Participants with respect to such Plan Year.
(i) Allocate the earnings or losses accrued since the
last Valuation Date on the Elective Contribution Accounts and Rollover Accounts
to the Elective Contribution accounts and Rollover Accounts, respectively, based
on the balance in each such account at the most recent Valuation Date (after all
additions, withdrawals and transfers were completed on the prior Valuation Date)
minus (i) 100% of any distributions or
55
<PAGE> 62
withdrawals, plus (ii) 50% of the contributions or additions allocated to that
account since the most recent Valuation Date.
(j) Allocate the earnings or losses accrued since the
last Valuation Date on the Matched Contribution Accounts, discretionary employer
contribution accounts, Restricted Employer Contribution Accounts and Voluntary
Contribution Accounts to those respective accounts based on (i) the balance in
each such account at the most recent Valuation Date (after all additions,
withdrawals and transfers were completed on the prior Valuation Date), minus (i)
100% of any distributions or withdrawals since the most recent Valuation Date.
6.3 VALUATION DATE ADJUSTMENTS AND ALLOCATIONS AFTER APRIL 30,
1998. On each Valuation Date after April 30, 1998, the account of each
Participant and former Participant or Beneficiary shall be adjusted in
accordance with the following provisions in the order set forth below:
(a) Reduce the balances in each account by any
withdrawals from that account since the most recent Valuation Date.
(b) Elective Contributions received by the Trustee shall
be allocated on the earliest Valuation Date administratively feasible to the
Elective Contributions account for the Participant that made the Elective
Contribution.
(c) Matched Contributions received by the Trustee shall
be allocated on the earliest Valuation Date administratively feasible to the
Matched Contributions account
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<PAGE> 63
for the Participant for whom the Matched Contribution was made pursuant to
paragraph 4.4.
(d) Minimum employer contributions shall be allocated
only on the last Valuation Date of each Plan Year to the discretionary employer
contribution account for the Participants who are entitled thereto pursuant to
paragraph 4.7.
(e) Forfeitures available since the most recent Valuation
Date pursuant to paragraph 10.4 may be held and invested at the direction of the
Committee in a forfeiture management account. The forfeitures plus earnings
shall first be used to correct a mistake of fact in allocating contributions.
Forfeitures used to correct a mistake shall be allocated as required to correct
the mistake. Secondly, forfeitures shall be used to provide Matched
Contributions in accordance with paragraph 4.4. Any remaining forfeitures shall
be used to reestablish accounts pursuant to paragraph 10.4. Discretionary
employer contributions used to correct a mistake shall be allocated as required
to correct the mistake. Forfeitures and discretionary employer contributions
used to reestablish an account pursuant to paragraph 10.4 shall be allocated to
the reemployed Participant's discretionary employer contribution account.
(f) Forfeitures remaining unallocated at the end of a
Plan Year, including earnings thereon, after excluding any such amounts
allocated pursuant to subparagraph (e) and discretionary employer contributions
shall be allocated upon receipt of the
57
<PAGE> 64
discretionary employer contribution to the discretionary employer contribution
accounts of each Participant who is an Employee on the last day of the Plan Year
and, such allocation shall be based on the same proportion that each such
Participant's Allocation Compensation for the Plan Year bears to the total of
such Allocation Compensation of all such Participants with respect to such Plan
Year. If no discretionary employer contribution is made for a Plan Year,
allocation of forfeitures plus earnings thereon shall occur as directed by the
Committee. If the Plan fails to satisfy the coverage test prescribed by Section
410(b) of the Code, the requirement that an Employee be employed on the last day
of the Plan Year to receive an allocation of discretionary employer
contributions and forfeitures shall be suspended beginning first with the
includible Employee, as defined below, employed with the Employer on the last
day of the Plan Year, then the includible Employee(s) who have the latest
separation from service during the Plan, Year, and continuing to suspend in
descending order the employment requirement for each includible Employee who
incurred an earlier separation from service, from the latest to the earliest
separation from service date, until the Plan satisfies the coverage test for the
Plan Year. If two or more includible Employees have a separation from service on
the same day, the employment requirement shall be suspended for all such
includible Employees, irrespective of whether the Plan can satisfy the coverage
test by accruing benefits for fewer than all such includible Employees. For
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<PAGE> 65
purposes of this paragraph, "includible" Employees are all Employees other than
any Employee who incurs a separation from service during the Plan Year and fails
to complete at least 501 Hours of Service for the Plan Year. A Plan satisfies
the coverage test if, on the last day of each quarter of the Plan Year, the
number of Certain Other Participants who benefit under the Plan is at least
equal to 70% of the total number of includible Certain Other Participants as of
such day. For purposes of the Coverage Test, an Employee is benefiting under the
Plan on a particular date if he is entitled to an allocation of Employer
Contributions and forfeitures for the Plan Year. This suspension of employment
requirement applies separately to Matched Contributions, and the Committee will
treat an Employee as benefiting under that portion of the Plan if he is an
eligible Employee for purposes of the Code Section 401(m) nondiscrimination
test.
(g) Special Restricted Employer Contributions made for a
Plan Year shall be allocated to the Restricted Employer Contribution account of
each Certain Other Participant who is an Employee on the last day of the Plan
Year and such allocation shall be based on the same proportion that each such
Participant's Allocation Compensation with respect to such Plan Year bears to
the total of such Allocation Compensation of all such Participants with respect
to such Plan Year.
(h) Restricted Employer Contributions made for a Plan
Year, after excluding any Special Restricted Employer
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<PAGE> 66
Contributions required pursuant to the provisions of paragraph 4.6, shall be
allocated to the Restricted Employer Contribution account of each Participant
who is an Employee on the last day of the Plan Year and such allocation shall be
based on the same proportion that each such Participant's Allocation
Compensation bears to the total of such Allocation Compensation of all such
Participants with respect to such Plan Year.
(i) Allocate the earnings or losses accrued since the
last Valuation Date on all accounts to the respective account based on the
balance in each such account at the most recent Valuation Date (after all
additions, withdrawals and transfers were completed on the prior Valuation
Date).
6.4 INTERIM ALLOCATION OF NET INCOME OR NET LOSS. Prior to May 1,
1998, if upon distribution of benefits to a Participant, a material change in
the value of the assets of the Trust Fund has occurred since the last Valuation
Date and distribution is to be made prior to the next Valuation Date, the
Committee, in its discretion, may estimate the net income or net loss of the
Trust since the last Valuation Date and adjust the value of the distribution to
reflect this estimate.
6.5 INVESTMENT OF CONTRIBUTIONS. The contributions under this Plan
shall be held and invested by the Trustee as provided in Article XIV, subject to
direction by the Committee pursuant to paragraph 14.3.
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<PAGE> 67
6.6 VALUATION OF TRUST FUND. The fair market value of the Trust
Fund shall be determined by the Trustee on every Valuation Date.
6.7 VESTING OF RIGHTS. The fact that allocations shall be made and
credited to the account of a Participant shall not vest in such Participant any
right, title or interest in or to any assets except at the time or times and
upon the terms and conditions expressly set forth in this Plan.
ARTICLE VII
VESTING
7.1 VESTED ACCOUNT. A Participant's Vested Account shall be equal
to the sum of the value, as of the most recent Valuation Date, of the
Participant's Elective Contribution account, Matched Contribution account,
Restricted Employer Contribution account and Rollover Account, plus the product
of (i) the amount in the Participant's discretionary employer contribution
account times (ii) the appropriate vesting percentage from paragraph 7.2 or
paragraph 7.3.
7.2 VESTING TABLE. A Participant shall be vested in an amount
equal to a percentage of the balance of the Participant's discretionary employer
contribution account. Such percentage shall be determined in accordance with the
following schedules:
(a) For all Plan Years before the Plan is determined to
be a Top-Heavy Plan for any Plan Year:
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<TABLE>
<CAPTION>
Vested Forfeited
Period of Service Percentage Percentage
- ----------------- ---------- ----------
<S> <C> <C>
Less than 3 years .................. 0% 100%
3 but not less than 4............... 20% 80%
4 but not less than 5............... 40% 60%
5 but not less than 6............... 60% 40%
6 but not less than 7............... 80% 20%
7 or more years..................... 100% 0%
</TABLE>
(b) For any Plan Year in which the Plan is determined to
be a Top-Heavy Plan:
<TABLE>
<CAPTION>
Vested Forfeited
Period of Service Percentage Percentage
- ----------------- ---------- ----------
<S> <C> <C>
Less than 2 years .................. 0% 100%
2 but not less than 3............... 20% 80%
3 but not less than 4............... 40% 60%
4 but not less than 5............... 60% 40%
5 but not less than 6............... 80% 20%
6 or more years..................... 100% 0%
</TABLE>
(c) If the Plan becomes a Top-Heavy Plan and subsequently
ceases to be a Top-Heavy Plan in a subsequent Plan Year, each Participant shall
continue to vest hereunder in accordance with subparagraph 7.1(b).
7.3 EVENTS ACCELERATING VESTING. Regardless of the
provisions of paragraph 7.2, a Participant who has less than a 100% vested
interest in his or her discretionary employer contribution account shall be
deemed to have a 100% vested interest in such accounts upon the occurrence of
the earliest of the following:
(a) retirement on or after Normal Retirement Date (any
discharge or voluntary termination of employment on or after Normal Retirement
Date shall be deemed a retirement);
(b) death prior to termination of employment;
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<PAGE> 69
(c) termination due to Disability pursuant to paragraph
10.6;
(d) complete termination of the Plan;
(e) partial termination of the Plan where the Participant
is covered by or affected by the event or events leading to or causing the
partial termination;
(f) complete discontinuance of contributions by the
Employer which results in abandonment of the Plan; or
(g) attainment of age 65.
7.4 AMENDMENTS TO VESTING TABLE. A Participant's vested interest
in his or her discretionary employer contribution account shall not be reduced
as the result of any direct or indirect amendment to this Article VII. In the
event that this Plan is amended to change or modify the applicable vesting
schedule of paragraph 7.2, a Participant with at least three (3) years of
Service as of the expiration date of the election period may elect to be subject
to the vesting schedule in effect prior to the amendment, unless the new vesting
schedule is more favorable to the Participant in every respect. If a Participant
fails to make such election, then the Participant shall be subject to the new
vesting schedule. The Participant's election period shall commence on the date
of the amendment and shall end sixty (60) days after the latest of:
(a) the date the amendment is adopted;
(b) the effective date of the amendment; or
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<PAGE> 70
(c) the date the Participant receives written notice of
the amendment from the Employer or the Committee.
7.5 FORFEITURE FOR BREACH INVOLVING THE PLAN.
Notwithstanding the prior provisions of this Article, a Participant's benefits
hereunder may be reduced if a court order or requirement to pay arises after
August 5, 1997, from (i) a judgement of conviction for a crime involving the
Plan; (ii) a civil judgment or consent order or decree that is entered by a
court in an action brought in connection with a violation, or alleged violation,
of part 4 of subtitle B of Title I of ERISA; or (iii) pursuant to a settlement
agreement between the Participant and the Secretary of Labor or the Pension
Benefit Guarantee Corporation in connection with the violation, or alleged
violation, of part 4 of subtitle B of Title I of ERISA by a fiduciary or any
other person. Such offset shall occur, however, only if the judgment, order,
decree or settlement agreement expressly provides for the offset of all or part
of the amount ordered or required to be paid to the Plan out of the
Participant's benefits under the Plan. Furthermore, if the survivor annuity
requirements of Section 401(a)(11) of the Code apply with respect to
distributions from the Plan to the Participant, and if the Participant has a
spouse at the time the offset is to be made, then the offset may occur only if
(i) the spouse has properly consented in writing to the offset; (ii) such
consent may not be obtained due to the circumstances described in Code Section
417(a)(2)(B); (iii) an election to waive the
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<PAGE> 71
spouse's right to either a qualified joint and survivor annuity or a qualified
preretirement survivor annuity is in effect pursuant to Section 417(a); (iv)
such spouse is ordered or required in such judgment, order, decree or settlement
to pay an amount to the Plan in connection with a violation of part 4 of
subtitle B of Title I of ERISA; or (v) in the judgment, order, decree or
settlement such spouse retains the right to receive the survivor annuity under a
qualified joint and survivor annuity or under a qualified preretirement survivor
annuity. The provisions of this paragraph shall be applied in accordance with
the requirements of Code section 401(a)(13)(C) and (D).
ARTICLE VIII
RETIREMENT BENEFITS
8.1 BENEFITS ON NORMAL RETIREMENT. A Participant who retires on or
after his or her Normal Retirement Date shall be entitled to receive his or her
Vested Account in the manner prescribed in Article XI.
8.2 BENEFITS AFTER NORMAL RETIREMENT. A Participant may continue
employment beyond his or her Normal Retirement Date. Distribution or
commencement of payments will be deferred until the Participant's Actual
Retirement Date unless the Participant elects to receive an early withdrawal
pursuant to paragraph 11.10. During any period of deferral, Employer
contributions and forfeitures shall be allocated to his or her account and the
account shall share in the net income or net loss of the Trust
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<PAGE> 72
Fund in the same manner as all other Participants if he or she otherwise
qualifies for such allocations under the terms of this Plan.
ARTICLE IX
DEATH BENEFITS
9.1 PAYMENT OF DEATH BENEFITS. In the event of the death of a
Participant prior to complete distribution of his or her account, the
Participant's death benefit shall be one hundred percent (100%) of the balance
of his or her account as of (i) the most recent Valuation Date, less any
distribution or withdrawals since that date for distributions prior to May 1,
1998, or (ii) for distributions made after April 30, 1998, the Valuation Date
immediately prior to the distribution. Such death benefit shall be paid to his
or her designated Beneficiary, subject to the rights of a surviving Spouse
pursuant to paragraph 9.4 below, and paragraph 17.7 with respect to an alternate
payee. Commencement of the distribution of the death benefit shall occur as soon
as reasonably possible after the date the Participant died, unless the
Beneficiary (or surviving Spouse, if applicable) elects to defer distribution to
a later date, and provided that the distribution shall be made in accordance
with the requirements of paragraph 11.6. The death benefit shall be paid under
any method of payment set forth in paragraph 11.4 which is selected by the
recipient or, if the recipient does not select the method of
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payment within a reasonable period of time, the death benefit shall be paid in
one lump sum.
9.2 DESIGNATION OF BENEFICIARY. At any time and from time to time,
each Participant, by written direction to the Committee, shall have the
unrestricted right to designate the Beneficiary to receive death benefits
payable hereunder, subject to the provisions of paragraph 9.4. Such designation
or selection must be made on forms furnished by the Employer and filed with the
Committee prior to the Participant's death, otherwise the designation shall be
null and void. The signature of a Participant to any document in which a
Beneficiary and method of payment are selected or requested to be selected shall
constitute conclusive evidence that such Beneficiary or such method of payment
has been designated or selected by such Participant, regardless of the fact that
there may be other signatures on such document, and regardless of the fact that
the signature of such Participant may appear only in the form of a consent. If
no Beneficiary is effectively designated at the time of the death of a
Participant, the death benefit shall be payable, subject to the provisions of
paragraph 9.4, to the first surviving class of the following:
(a) surviving Spouse;
(b) surviving lineal descendants, per stirpes;
(c) surviving parents;
(d) surviving brothers and sisters; or
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(e) the personal representative of the estate of such
Participant.
9.3 DOCUMENTATION OF PAYMENT. The Committee may require the
execution and delivery of such documents, papers and receipts as may be deemed
necessary in order to be assured that the payment of any of said death benefits
is properly made and is made to the proper person or party entitled thereto,
even if this results in delaying the payments beyond the time specified in
paragraph 9.1.
9.4 RIGHTS OF SURVIVING SPOUSE. Except as provided below, if a
Participant dies before his Total Account has been distributed, then such
account shall be payable upon the death of the Participant to the Participant's
surviving Spouse regardless of any Beneficiary designation to the contrary, and
no designated Beneficiary shall have any rights, claims or actions for benefits
under this Plan unless the Spouse consents to the designation as set forth
herein. The consent of a surviving Spouse to a designation shall be effective
only if the surviving Spouse consents or has consented in writing to the
designation of a Beneficiary on a form prescribed by the Committee which names
the particular Beneficiaries other than the Spouse including any class of
Beneficiaries or any contingent Beneficiaries, the consent acknowledges the
effect of the election, the consent is witnessed by a representative of the Plan
or a notary public, and the consent is received by the Committee. Any consent by
a Spouse shall be effective only with respect to such Spouse and
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not with respect to any subsequent Spouse of the Participant. The Committee
shall be fully protected in directing payment in accordance with such a consent,
and the Plan shall be discharged from liability to the extent of payments made
pursuant to the consent. The consent of the Spouse to a particular Beneficiary
designation is irrevocable and any subsequent change in the named non-Spouse
Beneficiaries shall not be effective without the consent of the Spouse, given as
prescribed above. No consent of a Spouse is required if the Participant has no
surviving Spouse, the Participant's surviving Spouse cannot be located, or if
other circumstances exist as may be prescribed by regulations issued by the
Treasury Department.
ARTICLE X
TERMINATION OF EMPLOYMENT
10.1 RIGHTS UPON TERMINATION OF EMPLOYMENT. If a Participant ceases to
be an Employee prior to death and prior to reaching his or her Normal Retirement
Date, then notwithstanding any of the provisions of this Plan to the contrary,
the rights and interests of such Participant in this Plan and under this
Agreement shall be and hereby are expressly limited in the manner provided for
in this Article. For purposes of this Plan and unless stated otherwise, a
Transferred Participant shall be deemed not to have terminated his or her
employment while employed by a Related Entity or the Employer and shall be
considered an Active Participant hereunder and his or her account
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Participant and his or her Beneficiary (unless the Beneficiary is the
Participant's Spouse, in which case this percentage limitation shall not apply).
If distribution of the Participant's benefits has commenced and the Participant
dies before his or her entire account has been distributed, the remaining
portion of such account must be distributed at least as rapidly as it would have
been under the payment method in force for distributions to the Participant as
of the date of death. If a Participant dies before distribution of his or her
account has commenced, the remaining account balance must be distributed no
later than five (5) years after the death of the Participant except that if the
account becomes payable to a Beneficiary designated by the Participant, the
distribution can be made over a period of years selected by the Beneficiary
pursuant to paragraph 11.4 provided (i) the period of years does not extend
beyond the life expectancy of the designated Beneficiary, and (ii) distributions
to the designated Beneficiary begin not later than one (1) year after the date
of the Participant's death or such later date selected in accordance with
regulations issued by the Treasury Department. However, if the designated
Beneficiary is the Participant's surviving Spouse, the commencement of
distributions to the surviving Spouse may be delayed until the date on which the
Participant would have attained age seventy and one-half (70-1/2) and, if the
surviving Spouse dies before commencement of distributions to such Spouse,
subsequent distributions shall be governed by the rules of this paragraph as
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shall continue to be maintained while employed by a Related Entity or the
Employer.
10.2 VESTING UPON TERMINATION. Upon termination of employment, a
Participant shall be vested in an amount equal to his or her Vested Account,
determined in accordance with Article VII.
10.3 PAYMENT TO TERMINATED PARTICIPANTS. Distribution of a
terminated Participant's Vested Account will commence in accordance with the
provisions of Article XI.
10.4 FORFEITURES. If a Participant terminates service with the
Employer, the non-vested portion of the Participant's discretionary employer
contribution account shall be forfeited in accordance with subparagraph (a)
below, if applicable, or subparagraph (b) if (a) is not applicable, and shall be
reallocated as provided in paragraph 6.2.
(a) Cash Out and Buy Back Rule:
(i) If the Participant upon termination of
employment receives the entire vested balance in his
discretionary employer contribution account no later
than the last day of the second Plan Year following
the Plan Year in which the Participant terminated
participation in the Plan, the non-vested portion of
the Participant's discretionary employer contribution
account shall be forfeited as of the date as of which
the distribution is
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completed. If the terminated Participant has no
vested interest in his discretionary employer
contribution account, then for purposes of this
paragraph he shall be deemed to have received a cash
out distribution of his entire vested balance in such
account as of the first Valuation Date following his
termination of employment and he shall forfeit his
entire interest in such account as of such date.
(ii) If a Participant receives a distribution
pursuant to subparagraph (a)(i) and resumes service
as an Employee before he incurs five (5) consecutive
One Year Breaks in Service, the Participant's
discretionary employer contribution account will be
restored to the balance in the account on the date of
the distribution if the Participant repays to the
Plan the amount for the distribution from such
account before the earlier of five (5) years after
the first date on which the Participant is
subsequently re-employed by the Employer, or the date
on which the Participant incurs, after such
termination, five (5) consecutive One Year Breaks in
Service. This subparagraph (a)(ii) shall apply only
if the Participant forfeited a portion of his
discretionary employer contribution account at the
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time of the prior distribution. If such a rehired
Employee was deemed to have received a distribution
pursuant to the last sentence of subparagraph (a)(i)
when he last terminated employment, then his prior
forfeiture shall be restored as of the last day of
the Plan Year in which the Employee is rehired.
(iii) Forfeitures which must be restored shall
first come from the forfeitures which occurred during
the current Plan Year or, if not sufficient, the
Employer shall make additional Employer contributions
in an amount sufficient to reestablish the
forfeitures of an Employee who is reemployed.
Restoration of the account shall occur as of the last
day of the Plan Year in which full repayment is made
or deemed to be made pursuant to subparagraph (a)(ii)
and any addition assets which are required to be
contributed for the restoration of the account must
be contributed no later than the last day of the Plan
Year following the Plan Year in which full repayment
occurs.
(iv) the repayment by the Employee and
restoration of the discretionary employer
contribution account balance shall not be treated as
an annual addition.
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(v) Notwithstanding any other provisions of this
subparagraph (a), if a Participant terminated
employment and incurred a One Year Break in Service
prior to February 1, 1985, any forfeiture which
occurred prior to February 1, 1985 as a result of his
or her termination shall not be reestablished.
(b) Delayed Forfeitures:
(i) If subparagraph (a) is not applicable and if a
distribution is made at a time when a Participant has
a vested right to less than 100% of the discretionary
employer contribution account and the Participant has
not incurred five (5) consecutive One (1) Year Breaks
in Service, the Participant's vested interest shall
be determined as follows:
(aa) A separate subaccount will be
established for the Participant's remaining interest
in the discretionary employer contribution account as
of the time of the distribution, and
(bb) At any relevant time the
Participant's vested interest in the separate
subaccount will be equal to an amount ("X")
determined by the following formula:
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X=P times [AB + (R times D)] - (R times D). For
purposes of applying the formula, P is the vested
percentage at the relevant time, AB is the subaccount
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the subaccount
balance at the relevant time to the discretionary
employer contribution account balance after
distribution.
(ii) If subparagraph (a) does not apply, when a terminated
Participant incurs five (5) consecutive one (1) Year Breaks in
Service, the non-vested portion of the discretionary employer
contribution account, as determined pursuant to subparagraph
(b)(i), shall be immediately forfeited. The vested portion of
the discretionary employer contribution account, if any, shall
be credited to a subaccount which shall represent the
Participant's vested interest in his Discretionary employer
contribution account prior to reemployment. Thereafter, the
Participant shall be fully vested in such subaccount and the
vesting schedule set forth in Article VI shall apply only to
amounts which are allocated to the Participant's Discretionary
employer contribution account after reemployment.
10.5 BENEFITS UPON REEMPLOYMENT. If a terminated or retired
Participant returns to the employ of the Employer,
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further distributions will be made only in accordance with the provisions of
Article XI regarding suspension of benefit payments during reemployment. The
balance in the reemployed Participant's Vested Account plus any reestablished
forfeiture determined under paragraph 10.4 shall become the beginning balance in
the reemployed Participant's account.
10.6 TERMINATION DUE TO DISABILITY. Notwithstanding any of the
other provisions of this Plan, if a Participant shall terminate his or her
employment due to a Disability which occurred while he or she was employed by
the Employer, such disabled Participant shall be entitled to receive his or her
Vested Account in accordance with the provisions of Article XI.
ARTICLE XI
PAYMENT OF BENEFITS
11.1 NOTICE TO TRUSTEE. The Committee shall notify the Trustee in
writing when the Actual Retirement Date or Termination Date of each Participant
occurs.
11.2 TRUSTEE'S DUTIES. Upon receipt of such notification and
subject to the other provisions of this Article, the Trustee shall take such
actions as may be necessary in order to distribute to such Participant or his or
her Beneficiary, in accordance with this Article, the Participant's account,
subject to the rights of an alternate payee pursuant to paragraph 17.7.
11.3 COMMENCEMENT OF PAYMENT. Subject to the balance of this
paragraph, for a Participant who terminates employment for
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any reason and for Participants who make financial hardship withdrawals pursuant
to paragraph 11.9 or early withdrawals pursuant to paragraph 11.10, distribution
of benefits hereunder shall commence as soon as administratively feasible after
the Participant terminates employment or receives approval from the Committee
for a hardship withdrawal or early withdrawal or, for such withdrawals made
prior to May 1, 1998, if the Participant elects to defer distribution, then as
soon as reasonably possible after any subsequent Valuation Date with regard to
which the valuation of Plan accounts has been completed and certified by the
Committee to the Trustee as being correct. A benefit notice shall be provided to
the Participant at least 30 days, but not earlier than 90 days before benefits
may commence. The notice should explain the optional forms of payment as well as
any right to defer commencement of benefits. The Participant may waive the 30
day minimum notice requirement, or any portion thereof, to the extent allowed by
the Code and ERISA. The distribution shall be based upon the vested balance in
the Participant's Total Account on the most recent Valuation Date and for such
withdrawals made prior to May 1, 1998, such amount shall be increased by the
vested portion of Employer Contributions, including Elective Contributions,
which are to be allocated to the Participant's Total Account subsequent to such
Valuation Date. If the Participant delays distribution pursuant to paragraph
11.8 and subsequently files a written request with the Committee for a
distribution, the distribution will be based upon the vested
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balance in the Participant's Total Account as of the Valuation Date immediately
prior to date the distribution is processed by the Trustee. If such a
Participant (or his Beneficiary if the Participant dies) does not file a request
for distribution of his benefits, distribution shall made as if the Participant
(or Beneficiary) had filed a written request that his benefits be distributed as
of the date the Participant attains (or would have attained) age sixty-five
(65).
Without the written consent of the Participant, no benefits will be
paid to a Participant or Beneficiary, before he or she reaches age fifty-nine
and one-half (59-1/2), unless payment is made on account of death, Disability or
termination of employment with the Employer and all Related Entities after
attainment of age fifty-five (55). Subject to all of the provisions of this
paragraph, the Participant's or Beneficiary's benefits shall begin as soon as
possible after the receipt of the recipients request for payment of benefits. If
the recipient does not file a written request for benefits within a reasonable
time after receiving notice from the Employer that he is entitled to benefits,
the recipient's benefits shall be paid to the recipient in a single lump-sum
distribution subject to the provisions of paragraph 11.8. Any distribution is
subject to the rights of a Surviving Spouse under paragraph 9.04 and to the
rights of an Alternate Payee under paragraph 17.7. Notwithstanding any other
provisions of this paragraph, unless the recipient elects to receive his
benefits at a later date, and provided the Plan
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permits such a delay, the recipient's benefits must begin no later than the
earlier of the following:
(a) Sixty (60) days after the close of the Plan Year in
which the latest of the following occurs:
(i) the date on which the Participant attains
age sixty-five (65); or
(ii) the tenth anniversary of the Participant's
commencement of participation in this Plan; or
(iii) the date on which the Participant terminates
service with the Employer.
(b) All distributions generally must commence by the
Participant's "required beginning date," (as defined in this paragraph) subject
to any distribution elections made in advance of the required beginning date, if
applicable. A Participant's required beginning date is April 1 following the
close of the calendar year in which the Participant attains age 70 1/2. However,
if the Participant is still actively employed by the Employer or a Related
Entity on December 31 of the year in which the Participant attains age 70 1/2
and the Participant is not a five percent (5%) owner, as defined below, then
the required beginning date shall be April 1 of the year following the year in
which the Participant retires from the Employer and all Related Entities or, if
earlier, the April 1 following the close of the calendar year in which the
Participant becomes a five percent (5%.) owner. A Participant shall be deemed to
be a five percent (5%) owner if the Participant is a "5-percent owner" as
defined in Section
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416(i)(1)(B) of the Code for the Plan Year ending in the calendar year in which
the Participant attains age 70 1/2 or any later Plan Year. A mandatory
distribution will be made in a lump sum at the Participant's required beginning
date unless the Participant makes a valid election to receive an alternative
form of payment.
11.4 PAYMENT OPTIONS. Once a Participant or Beneficiary becomes
entitled to begin receiving benefits, he or she shall file a written request for
benefits with the Committee. Subject to paragraph 11.5, the Participant or
Beneficiary shall be entitled to request in writing that the benefits be paid in
cash or distributed in kind under a method of payment selected by such
Participant or Beneficiary from those methods of payment set forth below:
(a) a single lump-sum distribution;
(b) a term certain annuity which provides for monthly,
quarterly or annual payments over a period to be selected by the Participant or
Beneficiary, subject to the provisions of paragraph 11.6. If a Participant
selects a term certain annuity, the Committee, at its discretion, may instruct
the Trustee to purchase such an annuity from a reputable insurance company
selected by the Committee or the Committee may instruct the Trustee to pay a
term certain annuity from the Trust. If paid from the Trust, the Participant or
Beneficiary shall receive monthly payments until the account is reduced below
the amount of one monthly payment regardless of the number of actual payments
that are made. The balance of the funds in the account which
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remains after the final monthly payment has been deducted shall be distributed
along with the final monthly payment. The Committee shall set the monthly
payment after taking into consideration the balance in the account, the expected
future earnings on the account, any expenses that may be allocated to the
account and any other factors or reasonable actuarial assumptions that are
necessary in making a reasonable estimate. Once payments begin, the Committee
may, but is not required, to recalculate and alter the periodic payments if it
determines that the actual earnings on the Participant's account materially
differ from the original estimate of earnings used in the earlier calculation of
the installment distribution. A monthly installment payment shall not be less
than an amount equal to one-twelfth (1/12) of the amount obtained by dividing
the value of the Participant's account as of the most recent year-end Valuation
Date by either (i) the Participant's life expectancy, or (ii) the joint life and
last survivor expectancy of the Participant and his or her designated
Beneficiary, at the time benefit payments commenced, less one (1) year for each
Plan Year which has commenced since benefit payments commenced. Life
expectancies shall be calculated using the return multiples of Treasury
Regulation Section 1.72-9. If the Plan is terminated, the Committee may direct
the Trustee to use the remaining account balance to purchase a term-certain
annuity selected by the Committee for the remaining period of distribution
originally selected by the Participant.
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11.5 LIMITED LUMP SUM PAYMENTS. Once a Participant terminates
employment with the Employer and all Related Entities and notwithstanding
anything to the contrary pertaining to the payment of benefits and the election
of optional forms of benefits, a lump sum payment shall be made to any
Participant, Spouse or Beneficiary where the vested portion of his or her Total
Account does not exceed Three Thousand Five Hundred Dollars ($3,500) for Plan
Years ending prior to February 1, 1998, and Five Thousand Dollars ($5,000) for
Plan Years beginning after January 31, 1998, and such Participant, Spouse or
Beneficiary shall be paid a lump-sum amount equal to his or her interest in the
Plan, thereby relinquishing any right or interest the recipient may have in any
annuity or monthly payments hereunder. Payment shall commence as soon as
administratively feasible following termination of employment.
11.6 LIMITATION ON PERIOD OF DISTRIBUTION. If a Participant elects
to receive his or her benefits in monthly installment payments in accordance
with paragraph 11.4, the period of years selected may not exceed the life
expectancy of such Participant or the joint life and last survivor expectancy of
such Participant and a Beneficiary designated by the Participant as calculated
using the return multiples of Treasury Regulation Section 1.72-9, and shall be
further limited, if necessary, in order that the present value of the expected
payments to the Participant shall be at least fifty percent (50%) of the present
value of all payments expected to be made to the
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if the Spouse had been the Participant. For purposes of this paragraph, any
amount paid to a child of the Participant shall be treated as if it has been
paid to the Participant's surviving Spouse if distribution of the account will
become payable to the surviving Spouse (i) when the child attains the age of
majority or (ii) upon any other designated event permitted under regulations
issued by the Treasury Department.
11.7 SUSPENSION OF BENEFIT PAYMENTS DURING REEMPLOYMENT. A
Participant who retires under the provisions of the Plan, or a Participant who
terminates service with an Employer before his, or her Normal Retirement Date,
and who is currently receiving any benefits under the Plan shall not receive any
benefit payments during a period of reemployment unless the payments are
pursuant to a hardship withdrawal under paragraph 11.10 or an in-service
withdrawal under paragraph 11.11. Such benefit payments will be suspended during
the reemployment and will be recalculated at the reemployed individual's next
Termination Date in accordance with the Plan.
11.8 CONSENT TO DISTRIBUTION PRIOR TO RETIREMENT AGE. If a
Participant is entitled to a distribution of benefits hereunder, no distribution
of benefits may commence before the Participant attains age 65 unless the
Participant provides written consent to the commencement of the distribution.
Such consent shall be contained in the written request for benefits filed with
the Committee pursuant to paragraph 11.4 and must be filed not more than ninety
(90) days prior to the commencement of the
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distribution of any part of the benefit. This paragraph shall not apply to
distributions made pursuant to the provisions of paragraphs 5.2, 5.5, 5.11 or
11.5.
11.9 FINANCIAL HARDSHIP WITHDRAWALS. A Participant may apply for a
distribution of up to the total amount of his Elective Contributions plus the
amount in any Rollover Account, in the event of a financial hardship. However,
the Committee shall permit such a distribution only on account of an immediate
and heavy financial need of the Participant, as determined by subparagraph (a)
and only to the extent that the distribution is necessary to satisfy such
immediate and heavy financial need, as determined by subparagraph (b).
(a) Distribution deemed necessary to satisfy financial
need. A distribution will be deemed to be necessary to satisfy an immediate and
heavy financial need of a Participant if all of the following requirements are
satisfied:
(i) The distribution is not in excess of the
amount of the immediate and heavy financial
need of the Participant,
(ii) The Participant has obtained all
distributions, other than hardship
distributions, and all nontaxable loans
currently available under all plans
maintained by the Employer and all Related
Entities,
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(iii) The Participant may not make Elective
Contributions under this Plan and all other
plans maintained by the Employer and any
Related Entity. The Participant's Elective
Contributions under this Plan and all plans
maintained by the Employer and all Related
Entities will be suspended for at least
twelve (12) months after receipt of the
hardship distribution, and
(iv) The Participant may not make Elective
Contributions under this Plan and all other
plans maintained by the Employer and any
Related Entity for the calendar year
immediately following the calendar year of
the hardship distribution in excess of the
applicable limit under Section 402(g) of the
code for such next calendar year less the
amount of such Participant's Elective
Contributions for the calendar year of the
hardship distribution.
Notwithstanding the above provisions, if any plan maintained
by the Employer or any Related Entity does not provide the limitations set forth
in subparagraphs (a)(iii) or (a)(iv), a distribution from this Plan shall not be
deemed necessary to satisfy a financial need.
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(b) Deemed immediate and heavy financial need. A
distribution will be deemed to be made on account of an immediate and heavy
financial need of the Participant if the distribution is on account of:
(i) Medical expenses described in Section 213(d)
of the Code incurred by the Participant, his
spouse or any dependents of the Participant
(as defined in Section 152 of the Code);
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii) Payment of tuition for the next semester or
quarter of post-secondary education for the
Participant, his spouse, children, or
dependents; or
(iv) The need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the
Participant's principal residence.
11.10 EARLY WITHDRAWAL BENEFITS. Once a Participant attains
age fifty-nine and one-half (59-1/2) and has a 100% vested interest in his Total
Account he may commence distribution of his entire account balance as of any
Valuation Date upon written notice to the Committee at least forty-five (45)
days prior to such date. Payment of benefits pursuant to this paragraph shall be
made in accordance with the provisions of Article XI as if the
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Participant had terminated employment as of the date distribution shall
commence.
11.11 LOANS TO PARTICIPANTS. Loans to Participants from
this Plan are not permitted.
11.12 SPECIAL RULES FOR TEFRA ELECTIONS AND PRIOR
DISTRIBUTIONS. A distribution to any Participant or Beneficiary, including a
Participant who is a five percent (5%) owner, as defined in Section 416(i)(1)(B)
of the Code, may be made without regard to the provisions of this Plan which
require that (i) distributions must commence no later than age 70-1/2 or actual
retirement (as detailed at paragraph 10.3), (ii) minimum payments must be made
if monthly installments are selected (as detailed at paragraph 10.4), (iii) the
period of years under monthly installment distributions must be limited to life
expectancies (as detailed at paragraph 10.6), or (iv) distributions after the
death of a Participant must commence within a certain time and may not continue
beyond a certain period (as detailed at paragraph 10.6), if the distribution is
made in accordance with the requirements of (a) or (b) as applicable:
(a) This paragraph shall apply if, with respect
to a distribution to a Participant:
(i) the distribution by the Trust is one which
would not have disqualified the Trust under Section
401(a)(9) of the Code as in effect prior to amendment
by the Deficit Reduction Act of 1984;
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(ii) the distribution is in accordance with a
method of distribution designated in writing and
signed by the Participant or, if the Participant was
deceased, by the Participant's Beneficiary, prior to
January 1, 1984;
(iii) the Participant had accrued a benefit under
the Plan as of December 31, 1983;
(iv) the method of distribution designated by the
Participant or Beneficiary specifies the time at
which distribution will commence, the period over
which distributions will be made and, in the case of
any distribution upon the Participant's death, the
Beneficiaries listed in order of priority; and
(v) the method of distribution selected provides
that the present value of the expected payments to
the Participant shall be at least fifty percent (50%)
of the present value of all payments expected to be
made to the Participant and his or her beneficiary.
(b) This paragraph shall apply if, with respect
to a distribution to a Beneficiary, the requirements of subparagraphs (a)(i)
through (a)(iv) inclusive are satisfied with respect to the distributions to be
made after the death of the Participant.
(c) For any distribution which commences before
January 1, 1984, but continues after December 31, 1983, the Participant, or the
Beneficiary, to whom such distribution is being made, will be presumed to have
designated the method of
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distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the two
requirements of subparagraphs (a)(i) and (a)(iv) above.
(d) If a designation is revoked, any subsequent
distribution must satisfy the general distribution requirements of this Plan.
Any changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of a Beneficiary under
the designation will not be considered to be a revocation of the designation, so
long as such substitution or addition does not after the period over which
distributions are to be made under the designation, directly or indirectly,
including the altering of the relevant measuring life.
11.13 ALLOWANCE OF DIRECT ROLLOVERS. This Paragraph applies
to distributions made on or after January 1, 1993. Notwithstanding any provision
of this Plan to the contrary that would otherwise limit a distributee's election
under this Paragraph, a distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For purposes of this Paragraph 11.13 and
Paragraph 11.14, the following definitions shall apply:
An "eligible rollover distribution" is any distribution of all or any
portion of the balance to the credit of the
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distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
An "eligible retirement plan" is an individual retirement account
described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in section
403(a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
A "distributee" includes an employee or former employee. In addition,
the employee's or former employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations
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order, as defined in section 414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.
A "direct rollover" is a payment by the plan to the eligible retirement
plan specified by the distributee.
11.14 SPECIAL RULES REGARDING DIRECT ROLLOVERS. Notwithstanding any
other provisions of this Article XI to the contrary, effective February 1, 1993,
in addition to the provisions of Paragraph 11.13, a distributee who is entitled
to receive an eligible rollover distribution pursuant to Paragraph 11.13 may
elect, on a form provided by the Committee, to make a direct rollover of a
portion of his Vested Account eligible for distribution in a single lump sum and
to receive the remaining portion of his Vested Account eligible for distribution
in the form of installment payments otherwise allowed under Article XI, unless
the provisions of paragraph 11.5 regarding limited lump sum payments apply.
11.15 DISTRIBUTION TO ALTERNATE PAYEE PURSUANT TO A QUALIFIED
DOMESTIC RELATIONS ORDER. Effective February 1, 1994, distribution of benefits
to an Alternate Payee pursuant to a Qualified Domestic Relations Order (as both
are defined in Section 414(p) of the Code and Paragraph 17.7 of the Plan) may
commence in accordance with the distribution provisions of the Plan at any time
as specified by such Qualified Domestic Relations Order. In such situations
where the Alternate Payee's distribution occurs prior to commencement of
distributions to the
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Participant whose account is subject to the Qualified Domestic Relations Order
and prior to the date the Participant attains his "earliest retirement age" (as
defined in Section 414(p)(4)(B) of the Code), the time and form of payment shall
be determined pursuant to the Plan as if the Alternate Payee had been a
Participant who terminated employment immediately prior to the date of
distribution specified in the Qualified Domestic Relations Order.
Notwithstanding the above, distribution of benefits to an Alternate Payee shall
not commence prior to the earlier of (i) the date such Participant becomes
eligible to receive a distribution or (ii) the date such Participant attains the
"earliest retirement age" unless such Alternate Payee consents in writing to
such early distribution, or unless the present value of the benefit to be paid
to such Alternate Payee does not exceed Three Thousand Five Hundred Dollars
($3,500) for Plan Years ending prior to February 1, 1998, or Five Thousand
Dollars ($5,000) for Plan Years beginning after January 31, 1998.
ARTICLE XII
TOP-HEAVY PROVISIONS
12.1 TOP-HEAVY DETERMINATION. For any Plan Year beginning after
December 31, 1983, this Plan is a Top-Heavy Plan only if, as of the Top-Heavy
Determination Date, either of the following conditions exists:
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(a) The Top-Heavy Ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of a required aggregation group, as defined in
subparagraph 12.3.
(b) This Plan is part of a required aggregation group of
plans and the Top-Heavy Ratio for the group of plans exceeds sixty percent
(60%).
Notwithstanding the provisions of (a) and (b) above, if this Plan is
also part of a permissive aggregation group of plans, as defined in subparagraph
12.3, and the Top-Heavy Ratio for the permissive aggregation group of plans does
not exceed sixty percent (60%), this Plan shall not be a Top-Heavy Plan.
12.2 TOP-HEAVY RATIO DEFINED. The Top-Heavy Ratio shall be computed
as follows:
(a) If the Employer maintains this Plan alone or this
Plan and one or more defined contribution plans (including any simplified
employee pension plans) and the Employer has not maintained any defined benefit
plan which had Accrued Benefits during the five-year period ending on the
Top-Heavy Determination Date, the Top-Heavy Ratio for this Plan alone or for the
required aggregation group or permissive aggregation group (as appropriate) is a
fraction, the numerator of which is the sum of the Account Balances of all Key
Employees as of the Top-Heavy Determination Date and the denominator of which is
the sum of all Account Balances for all participants in all such defined
contribution plans.
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(b) If the Employer maintains this Plan alone or this
Plan and one or more defined contribution plans (including any simplified
employee pension plans) and the Employer maintains or has maintained one or more
defined benefit plans which had Accrued Benefits during the five-year period
ending on the Top-Heavy Determination Date, the Top-Heavy Ratio for the required
aggregation group or permissive aggregation group (as appropriate) is a
fraction, the numerator of which is the sum, for all Key Employees, of the
Account Balances under the defined contribution plan or plans and the Accrued
Benefits under the defined benefit plan or plans as of the Top-Heavy
Determination Date, and the denominator of which is the sum, for all
participants in such plans, of the Account Balances under the defined
contribution plan or plans and the Accrued Benefits under the defined benefit
plan or plans as of the Top-Heavy Determination Date.
(c) When aggregating plans, Account Balances and Accrued
Benefits shall be calculated as of the Top-Heavy Determination Dates that fall
within the same calendar year.
12.3 REQUIRED AGGREGATION GROUP AND PERMISSIVE AGGREGATION GROUP
DEFINED.
(a) A required aggregation group is a group of two or
more plans including this Plan which consists of the following:
(i) each qualified plan of the Employer in which
at least one (1) Key Employee participates; and
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(ii) each qualified plan of the Employer which
enables a plan described in (i) above to meet the
requirements of Section 401(a)(4) of the Code
(regarding nondiscrimination in contributions or
benefits) or Section 410 of the Code (regarding
minimum participation standards).
(b) A permissive aggregation group is a group of two or
more plans including this Plan which consists of the following:
(i) this Plan;
(ii) any plan or plans of the Employer included
in the required aggregation group (if any); and
(iii) any other plan or plans of the Employer
which when considered as a group with the plan or
plans described in subparagraphs (i) or (ii) above
would satisfy the requirements of Sections 401(a)(4)
and 410 of the Code.
12.4 ACCOUNT BALANCE DEFINED. Subject to the provisions of
paragraph 12.6 below, the Account Balance as of any Top-Heavy Determination Date
shall be equal to:
(a) the value of the participant's account as of the most
recent valuation date occurring within a twelve (12) month period ending on the
Top-Heavy Determination Date; plus
(b) an adjustment for the amount of any contributions
actually made to the account after the valuation date, but on or before the
Top-Heavy Determination Date (except that in the first
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plan year of the plan the adjustment shall also include the amount of any
contributions made after the Top-Heavy Determination Date that are allocated as
of a date in that first plan year); plus
(c) an adjustment for distributions as provided in
subparagraph 12.6(b).
12.5 ACCRUED BENEFIT DEFINED. Subject to the provisions of
paragraph 12.6 below, the Accrued Benefit as of any Top-Heavy Determination Date
shall be equal to:
(a) the present value of the accrued benefit as of the
most recent valuation date which is within a twelve (12) month period ending on
the Top-Heavy Determination Date, calculated using the actuarial assumptions
utilized in funding the defined benefit plan, taking into account those certain
assumptions regarding current employees provided by Code Section 416 and the
regulations thereunder, where the valuation date shall be the same valuation
date used for computing plan costs for minimum funding regardless of whether a
valuation is performed that year; plus
(b) an adjustment for distributions as provided in
subparagraph 12.6(b); less
(c) an adjustment for certain rollovers or transfers
accepted by the plan as provided by subparagraph 12.6(c).
12.6 ADJUSTMENTS TO ACCOUNT BALANCES AND ACCRUED BENEFITS. The
following adjustments shall be made in computing all Account Balances and
Accrued Benefits:
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(a) Deductible employee contributions, as defined in Code
Section 72(o)(5)(A), shall not be taken into account.
(b) Distributions made within the plan year that includes
the Top-Heavy Determination Date and within the four preceding plan years shall
be added to a participant's Account Balance or Accrued Benefit, including
distributions of employee contributions made during and before the plan year,
except as follows:
(i) Distributions made after the valuation date
and prior to the Top-Heavy Determination Date shall
not be included to the extent that such distributions
were considered as part of a participant's Account
Balance or Accrued Benefit as of the valuation date
in computing his Account Balance or Accrued Benefit.
(ii) As provided in subparagraph 11.6(c) below,
certain transfers of assets and distributions which
are rolled over by the participant into another
qualified plan are not considered distributions for
purpose of this paragraph (b).
(iii) As provided under Code Section 416 and the
regulations thereunder, certain other distributions
shall not be considered distributions for purposes of
this subparagraph (b).
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(c) Rollovers and transfers of assets shall be considered
as follows:
(i) In the case of "unrelated" rollovers and
transfers, as defined below, the plan making the
distribution shall add the distribution to the
participant's Account Balance or Accrued Benefit and
the plan accepting the rollover or transfer shall not
include the rollover or transfer as part of the
participant's Account Balance or Accrued Benefit if
such rollover or transfer was accepted after December
31, 1983, but the receiving plan shall so include
such rollover or transfer and the plan making the
transfer shall not include such amount if accepted
prior to January 1, 1984.
(ii) In the case of "related" rollovers and
transfers, as defined below, the plan making the
distribution shall not add the distribution to the
participant's Account Balance or Accrued Benefit and
the plan accepting the rollover or transfer shall
include the rollover or transfer as part of the
participant's Account Balance or Accrued Benefit,
regardless of the date accepted.
An "unrelated" rollover or transfer is one which is initiated by the employee
and paid from a plan maintained by one employer to a plan maintained by another
employer, where the two employers are not required to be aggregated under Code
Section 414(b), (c) or
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(m). A "related" rollover or transfer is any rollover or transfer which is not
an unrelated rollover or transfer.
12.7 EMPLOYEES EXCLUDED FROM COMPUTATIONS. For plan years beginning
after December 31, 1984, the Accrued Benefit and the Account Balance of a
participant shall not be taken into account in determining the Top-Heavy Ratio
if the participant has performed no service for the Employer or a Related Entity
during the five-year period ending on the Top-Heavy Determination Date. If the
former Employee is rehired and performs service for the Employer or a Related
Entity, his or her Accrued Benefit and Account Balance shall be included in
determining the Top-Heavy Ratio. For any plan year, if a participant ceases to
be a Key Employee but remains employed, his or her Accrued Benefit and Account
Balance shall be disregarded in determining the Top-Heavy Ratio for any plan
year after the last plan year for which the participant was a Key Employee.
12.8 ADJUSTMENTS TO SECTION 415 LIMITATIONS. For any Plan Year in
which the Plan is a Top-Heavy Plan and for all subsequent Plan Years, the
overall limitations on combined plan contributions and benefits under Section
415 of the Code shall be reduced by substituting 1.0 for 1.25 in the definitions
of defined contribution fraction and defined benefit fraction in paragraph 5.4
of the Plan unless both of the following tests are satisfied:
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(a) the Plan would not be a Top-Heavy Plan if "ninety
percent (90%)" were substituted for "sixty percent (60%)" in each place that it
appears in paragraph 12.1, and
(b) each participant who is not a Key Employee receives
an additional minimum benefit or contribution under a plan of the Employer. In
the case of a participant who is not a Key Employee but who is employed on the
Valuation Date and is participating only in a defined benefit plan, the
additional minimum benefit for each year of service counted is one (1)
percentage point, up to a maximum of ten (10) percentage points, of the
Participant's average All Taxable Compensation for the five (5) consecutive
years when the Participant had the highest All Taxable Compensation from the
Employer, computed as described in Section 416(c)(1)(D) of the Code. In the case
of a participant who is not a Key Employee but who is employed on the Valuation
Date and is participating only in a defined contribution plan, the additional
minimum contribution shall be one percent (1%) of the participant's All Taxable
Compensation. In the case of a participant who is not a Key Employee but who is
employed on the Valuation Date and is participating both in a defined benefit
plan and a defined contribution plan, there shall be no minimum benefit provided
under the defined benefit plan, but the additional minimum contribution under
the defined contribution plan shall be four and one-half percent (4 1/2) of the
participant's All Taxable Compensation.
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12.9 TOP-HEAVY PLAN REQUIREMENTS. For any Plan Year beginning after
December 31, 1983 in which this Plan is a Top-Heavy Plan, the following special
rules shall apply:
(a) the minimum allocations provided at paragraph 4.7;
and
(b) the special vesting table provided at paragraph 7.2.
ARTICLE XIII
ADMINISTRATION OF FUNDS
13.1 EXPENSES. In the event expenses of the Trust are not paid by
the Employer directly and aside from its contribution to this Plan, such
expenses shall be deemed to be a charge upon the Trust fund and the Trustee
shall pay out such sums as may be required to defray such expenses and to
satisfy such obligation to compensate the Trustee. Such payments shall be
charged to the Participants' accounts in the same proportion and manner as
losses of the Trust are chargeable and the Trustee shall not be required to see
to the reimbursement of such sums to the Trust fund by or from the Employer.
13.2 ACCOUNTS. The Committee shall maintain the accounts set
forth in paragraph 6.1 in the name of each Participant.
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ARTICLE XIV
THE TRUSTEE AND INVESTMENTS
14.1 TRUSTEE'S DUTIES. The Trustee shall hold, use and apply all funds
and other assets received by it subject to the terms and provisions of this Plan
and Trust and for the purposes set forth herein. The Trustee hereby accepts the
Trust created hereunder and agrees to perform its duties under this Plan and
Trust.
14.2 TRUSTEE'S POWERS. The Trustee shall have all of the powers
necessary for carrying out the purposes of this Trust. Without limiting the
powers and authority of the Trustee, except as provided in paragraph 14.3, the
Trustee shall have the right at any time and from time to time with respect to
any or all of the property which shall at any time or times form part of the
principal or income of the Trust:
(a) To sell, grant options to purchase, exchange or alter assets
of the Trust fund or any of them; to enter into any contract without personal
liability thereon.
(b) To invest and reinvest all funds from time to time available
for investment or reinvestment in (i) any securities or other personal property,
including regulated investment companies, mutual funds, money market funds,
common or commingled funds, including funds for which the Trustee or its
affiliates serve as investment advisor or in any other capacity, fixed income
securities, real estate, mortgages on real estate,
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guaranteed investment contracts or other similar investments, bonds and
preferred or common stocks, covered options on such stocks, notes, government
obligations, savings accounts, certificates of deposit, repurchase agreements
and cash equivalents of the Trustee, its affiliates or others; (ii) "qualifying
employer securities" as defined under Section 4.7 of ERISA, if not more than
ninety-five percent (95%) of the fair market value of the Trust fund is
represented by said qualifying employer securities; or (iii) "qualifying
employer real property" as defined under Section 407 of ERISA, if not more than
fifty percent (50%) of the fair market value of the Trust Fund is represented by
said qualifying employer real property; or (iv) mortgages on property, whether
owned by the Employer or others, even though such investments may not be
authorized for reinvestment of trust funds under the laws applicable thereto; or
(v) life insurance;
(c) To retain, without liability for loss or depreciation
resulting therefrom, property originally received from the Employer, whether
real or personal, for such time as it shall deem advisable although such
property may not be of the character prescribed by law or by the terms of this
instrument for the investment of other Trust assets and although it represents a
large percentage or all of the Trust fund. Such original property may
accordingly be held as a permanent investment.
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(d) To lease property upon any terms or conditions and for any
term of years although extending beyond the period of any Trust hereunder.
(e) To cause any of the investments to be registered in its name
or in the name of its nominee; any corporation or its transfer agent may presume
conclusively that such nominee is the actual owner of any investment submitted
for transfer.
(f) To delegate powers, discretionary or otherwise, for any
purpose to one or more nominees or proxies with or without power of substitution
and to make assignments to, and deposits with, committees, Trustees, agents,
depositories and other representatives; to retain any investment received in
exchange in any reorganization or recapitalization.
(g) To borrow money, assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(h) To vote and exercise all stockholders, or other rights with
respect to any share of stock or security held by the Trustee, except (effective
August 20, 1984) as provided in paragraph 14.5 below.
(i) To determine the market value of any investment of the Trust
fund for any purpose on the basis of such quotation, evidence, date or
information as the Trustee may deem pertinent and reliable without any
limitation whatever.
(j) To collect principal and income due or payable to the Trust
and to give a receipt therefor.
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(k) To take any and all further action necessary or advisable in
order to carry out the provisions and purposes of the Plan.
(1) Notwithstanding that the Trustee may be holding common stock
of the Employer or of any corporation in which the Trustee may be deemed an
Affiliate or of any successor corporation resulting from any merger,
reorganization, corporate or other change, the Trustee is authorized as Trustee
to exercise, with respect to any such common stock, any and all of the powers,
authorities and discretions provided herein, including, without limitation, the
power to retain such stock as long as it may deem advisable, to vote in person
or by proxy at corporate or other meetings and to grant proxies, discretionary
or otherwise, in respect thereof. The Trustee shall incur no liability
whatsoever by reason of any action taken pursuant to the provisions of this
subparagraph except for its gross negligence or willful misconduct.
14.3 DIRECTION OF TRUSTEE. With respect to the powers and authorities
of the Trustee, the Committee shall have the right to direct the Trustee in
writing with respect to the exercise of any such powers or authorities other
than the voting of common stock as provided in paragraph 14.5 below. This shall
include the right of the Committee to direct the Trustee to invest different
types of accounts in different types of investments or investment funds. In
addition, this shall include the right of the Committee to direct the Trustee to
retain a specific investment
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manager or managers for the investment of all or any portion of the assets held
in any account or subaccount maintained hereunder. The Committee shall also have
authority to hire an investment manager or managers to manage one or more
investment funds or options which can be offered to Plan Participants. In
accordance with such rules as may be determined by the Committee, the
Participants may be allowed to direct the Trustee to invest certain accounts or
subaccounts, as delineated by the Committee, in one or more of the investment
funds or options managed by the investment manager. [To the extent the Committee
authorizes the use of such investment funds or options, the Participants shall
be allowed to direct the Trustee to switch assets held in such accounts and
subaccounts between the investment funds or options as of each Valuation Date.]
The Committee may also terminate such process on at least thirty (30) days
advance written notice to the Trustee and the affected investment managers and
shall promptly notify each Participant of the change. The Committee or Employer
may withdraw the authorization for an investment manager to invest all or any
portion of the assets held in the Plan or any investment manager may resign by
providing written notice of the removal or resignation at least thirty (30) days
in advance of its effective date and said written notice shall be provided by
said party to each of the other parties from the group consisting of the
Committee, the Trustee and the investment manager. An investment manager shall
mean any person, firm or corporation who is a registered investment advisor
under the
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Investment Advisors Act of 1940, a bank or an insurance company and who
acknowledges its fiduciary responsibility to the Plan in writing, in a manner
satisfactory to the Committee and the Trustee. The Trustee shall be responsible
for the investment of Plan assets under the investment control of an investment
manager only after written notification of the resignation or removal of such
investment manager is provided to the Trustee by the investment manager, by the
Committee, or by the Employer. The Trustee shall cease to be responsible for the
investment of assets that the Committee's written notification places under the
direction of an investment manager at such time as the investment manager is
retained and authorized to direct the investment of such assets. An investment
manager retained hereunder may from time to time issue orders for the purchase
or sale of securities directly to a broker and upon request the Trustee shall
execute and deliver the appropriate trading authorizations on behalf of the
investment manager. Notifications of the issuance of each such order shall be
given promptly to the Trustee by the investment manager and the execution of
each such order shall be confirmed by notice to the Trustee by the investment
manager or the broker, in accordance with standard commercial practices. Upon
such notification the Trustee shall be authorized to pay for securities sold
against payment therefor, as the case may be. In connection with directions by
the Committee to the Trustee as described in this paragraph, the Trustee shall
be protected in acting upon such directions and upon any instruments,
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certificates or papers in connection therewith believed by it to be genuine.
Until the Committee shall give such directions or the Trustee receives written
notification that the Committee shall be incapable for any reason of giving
directions to the Trustee as herein provided for, the Trustee shall act and
shall be protected in acting without directions as in its discretion it deems
appropriate or advisable under the circumstances for carrying out the provisions
of the Plan. In connection with directions by the Committee regarding the
retention of an investment manager or managers, the Trustee shall have no duty
or obligation to review any investment to be acquired, held or disposed of by,
or at the direction of, any such investment manager or to make any
recommendations with respect to the disposition or continued retention of any
such investment. The Trustee shall be indemnified and held harmless by the
Employer against any and all liability arising as a result of the Trustee acting
pursuant to the direction of any investment manager or as a result of failing to
act in the absence of such direction. Notwithstanding the provisions of
paragraph 14.2(h), any investment manager retained as described in this
paragraph shall have the sole responsibility and authority to vote and exercise
all stockholders' or other rights with respect to any share of stock or other
security held in any Plan account or subaccount under the investment control of
such investment manager. Notwithstanding the provisions of paragraphs 14.2(l)
and 14.5, any investment manager retained as described in this paragraph
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shall vote any shares of common stock of the Employer under the investment
control of such investment manager in the same manner as the Trustee would be
required to vote such shares pursuant to paragraph 14.5 if such shares were
under the investment control of the Trustee.
14.4 VOTING COMMON STOCK. The Committee shall direct the Trustee on
voting all common stock of the Employer held by the Trustee pursuant to this
Plan. When the Trustee receives notice of a meeting of the shareholders owning
common stock of the Employer for which a vote of the Shareholders is required,
the Trustee shall send copies of the notice to the Committee and request
directions from the Committee as to voting such shares. The Committee shall
direct the voting of such shares solely in the best interests of the
Participants and Beneficiaries and shall deliver such directions in writing to
the Trustee sufficiently in advance of the shareholders meeting to allow the
Trustee adequate time to vote the shares by proxy.
14.5 DELEGATION OF DUTIES. The Trustee may retain suitable agents,
investment advisers and legal counsel and pay them reasonable expenses and
compensation. The Trustee shall not be responsible for any loss occasioned by
any such agents, investment advisers and legal counsel selected with reasonable
care.
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14.6 TRUSTEE'S RELIANCE ON OTHERS. The Employer shall furnish the
Trustee from time to time with certified copies of resolutions of its Board of
Directors evidencing the appointment and termination of office of any members of
the Committee, and of successors to such members, together with specimens of
their signatures, and the Trustee shall be entitled to rely conclusively upon
such resolutions and signatures as evidence of the identity of the members of
the Committee and shall not be charged with notice of any change with respect
thereto until the Company shall have furnished the Trustee with certified
copies of resolutions of the Board of Directors relative to such change.
14.7 COUNSEL TO TRUSTEE. The Trustee may consult with legal counsel,
who may be counsel for the Employer or for the Trustee, with respect to any
question pertaining to this Plan or to the duties of the Trustee hereunder, and
shall be fully protected with respect to any action taken or omitted by it in
good faith on the basis of the opinion of such counsel.
14.8 LIABILITY OF TRUSTEE. To the extent permitted by law, the Trustee
shall not be liable for any action taken or omitted except for its own willful
misconduct or gross negligence.
14.9 CHARGES AGAINST THE TRUST. The Trustee shall deduct as a charge
against the Trust fund any and all taxes paid by it which may be imposed upon
the income or principal of the Trust, or which the Trustee may be required to
pay with respect to the interest of any Participant or other person in or to the
Trust.
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Any charge which the Trustee is required to pay with respect to a Participant's
or other person's interest shall not exceed the vested amount of his account.
14.10 REASONABLE COSTS OF THE TRUST. The Employer may pay the
reasonable costs and expenses of the Trustee incurred in the administration of
this Trust, including Trustee's compensation and reasonable legal expenses. All
expenses, including the Trustee's compensation and reasonable legal expenses,
shall be paid from the Trust unless paid by the Employer and until paid shall
constitute a charge upon the Trust.
14.11 COMPENSATION OF TRUSTEE. The Trustee shall receive compensation
in accordance with its standard schedule of fees in effect from time to time
over the period during which its services are performed. The Trustee shall have
a lien upon the Trust fund for such compensation until the same is paid by the
Employer. In addition, the Trustee or its affiliates are hereby authorized to
accept any additional fees which they derive by virtue of maintaining, managing
or serving as the investment advisor of any common or commingled fund, mutual
fund, regulated investment companies, or other such funds which may be
maintained, managed or advised by any Trustee or its affiliates to the extent
provided by law.
14.12 INSPECTION OF RECORDS. The Trustee shall keep full and complete
records and accounts of all receipts, disbursements and investments of the
Trust. Such records and accounts shall be
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available for examination by the Employer during the business hours of the
Trustee. Any Participant shall have the right, no more often than one time in
any Plan Year, to inspect such records as pertain to him or her by making such
request to the Committee. The Trustee shall not be required to make any
inventory or appraisal or report to any court, nor to secure any order of court
for the exercise of any power herein contained, and shall not be required to
give bond.
14.13 RESIGNATION OF TRUSTEE. The Trustee may resign upon giving thirty
(30) days' written notice to the Employer. The Board of Directors of the
Employer may remove the Trustee acting as such at any time and appoint a
successor Trustee. The appointment of a successor Trustee shall be effective
upon the acceptance in writing of such Trusteeship by a successor Trustee. In
such event the successor Trustee shall have full right, title and interest in
and to every asset of the Trust, including, but not by way of limitation, each
policy or contract subject to the Trust, without the necessity for any deed,
assignment, release or instrument of transfer.
14.14 STATEMENT OF ACCOUNTS. In case of the resignation or removal of
the Trustee, the Trustee shall have the right to a settlement of its accounts,
which at the option of the Trustee may be made either by judicial settlement
instituted by the Trustee in a court of competent jurisdiction, or by agreement
of settlement between the Trustee and the Employer, and such
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agreement of settlement shall be binding upon all Participants and their
Beneficiaries.
14.15 TRANSFER OF TRUST FUNDS. Upon such settlement, the Trustee shall
transfer to the successor Trustee the Trust fund as it may then be constituted,
and true copies of such of its records as relate to the Trust, and shall execute
all documents necessary for transferring the assets of the Trust; and the
Trustee shall thereupon be discharged from further accountability for all
matters embraced in its settlement.
14.16 INDEMNIFICATION OF TRUSTEE. The Trustee shall not be liable and
shall be indemnified and held harmless by the Employer for any action taken at
the direction of the Committee, or for any failure to act, if action can be
reasonably taken only after receipt from the Committee of specific directions,
or for failure to act, pending the receipt of direction from the Committee when
direction is requested in writing by the Trustee.
14.17 DISBURSEMENTS. No disbursement from the Trust fund shall be made
by the Trustee for purposes of the payment of any Plan benefit except on the
written direction of the Committee, and the Trustee shall have no duty or
obligation whatsoever to inquire as to the accuracy of such direction or its
propriety in light of the provisions of the Plan, ERISA or the Code. Upon
written direction (which may be a continuing direction) from the Committee as to
the name of any person to whom a distribution is to be made from the Trust fund
and when such distribution is to
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be made and the amount thereof, the Trustee shall draw checks in the name of the
person designated by the Committee and deliver such checks and/or other assets
in such manner and in such amounts and at such times as the Committee shall
direct. In the event the Trustee shall deem it necessary to withhold any
distribution pending compliance with legal requirements with respect to probate
of wills, appointment of personal representatives, payment or provision for
estate or inheritance taxes, or for death duties or otherwise, the Trustee shall
notify the Committee and shall thereafter take no action pending receipt of the
Committee's instructions to distribute and request an agreement from the
Employer, in form satisfactory to the Trustee, protecting it from any liability
arising out of noncompliance with such requirements.
14.18 PROHIBITION AGAINST DIVERSION OF FUNDS. It shall be impossible by
operation of the Plan or of the Trust, by natural termination of either, by
power of revocation or amendment, by the happening of any contingency, by
collateral arrangement or by any other means, for any part of the corpus or
income of the Trust to be used for, or diverted to, purposes other than for the
exclusive benefit of Participants or their Beneficiaries, except as specifically
provided by the terms of this Plan.
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ARTICLE XV
ADMINISTRATIVE COMMITTEE
15.1 COMMITTEE. This Plan and Trust shall be administered by an
Administrative Committee (herein referred to as the "Committee") of three (3) to
seven (7) persons, who shall be appointed by the Board of Directors of Hughes
Supply, Inc., and each Committee member shall hold office at the pleasure of
such Board of Directors of Hughes Supply, Inc. Directors and officers of an
Employer and Participants in the Plan may be appointed members of the Committee.
Vacancies arising in the Committee from death, resignation, removal or otherwise
shall be filled by the Board of Directors of Hughes Supply, Inc., but the
Committee may act notwithstanding the existence of vacancies so long as a
majority of the Committee remains.
15.2 APPOINTMENT AND RESIGNATION OF MEMBER. A person appointed a member
of the Committee shall signify his or her acceptance by filing a written
acceptance with the Board of Directors of Hughes Supply, Inc. and filing a copy
of such acceptance with the Trustee. A member of the Committee may resign by
delivering his or her written resignation to the Board of Directors of Hughes
Supply, Inc. and a copy thereof to the Trustee. Until the Trustee shall receive
such written notice of acceptance or resignation from a member of the Committee,
the Trustee shall be protected in acting upon any directions of the
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Committee signed by such member or members upon any instruments, certificates or
papers.
15.3 POWER OF COMMITTEE. The Committee shall have complete control of
the administration of this Plan and Trust, with all powers necessary to enable
it to carry out its duties in that respect. Not in limitation, but in
amplification of the foregoing, the Committee shall have the duty and authority
to:
(a) Determine the eligibility of Participants.
(b) Interpret and construe the provisions of this Plan.
(c) Decide any disputes which may arise with regard to rights of
Employees, the Employer, and Participants, and their legal representatives or
Beneficiaries under the terms of this Plan.
(d) Direct the administration of this Plan.
15.4 NON-DISCRIMINATION. The Committee shall not take any action or
direct the Trustee to take any action whatsoever which would result in
benefiting one Participant or group of Participants at the expense of another,
or in discrimination as between Participants similarly situated, by the
application of different rules to substantially similar sets of facts.
15.5 COMMITTEE ACTION. The Committee shall act by a majority of the
number constituting the Committee, and such action may be taken either by vote
at a meeting or in writing without a meeting.
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15.6 AGENTS OF THE COMMITTEE. The Committee may appoint one or more
agents, who need not be members of the Committee, who may sign all papers in its
behalf.
15.7 COMMITTEE RECORDS. The Committee shall keep a complete record of
all proceedings and all data necessary for the administration of this Plan and
Trust.
15.8 REIMBURSEMENT OF EXPENSE. The members of the Committee shall serve
without compensation for their services as such, but shall be reimbursed by the
Employer for all necessary expenses incurred in the discharge of their duties.
No member of the Committee shall incur any liability for anything done or
omitted by him or her, excepting only liability for his or her own willful
misconduct.
15.9 EXPENSES AFTER DISCONTINUANCE. If the Employer advises the
Committee in writing of its determination to make no further contributions to
this Trust, the expenses of the Committee shall thereafter be charged against
and paid out of the Trust fund, and a lien for the payment thereof shall be
impressed upon the assets of the Trust to be charged proportionately against the
amount standing to the credit of each Participant.
15.10 INSPECTION OF RECORDS. The Committee may inspect the records of
the Employer whenever such inspection may be reasonably necessary in order to
determine any facts pertinent to the performance of the duties of the Committee
under this Agreement. The Committee, however, shall not be required to make
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such an inspection, but may, in good faith, rely upon any statement of the
Employer or any of its officials or Employees.
15.11 COMMITTEE CERTIFICATION. The findings and certification of fact
on matters properly before the Committee shall be final and conclusive.
15.12 DIRECTION OF TRUSTEE. Whenever the Committee shall direct the
Trustee with respect to the exercise of any of the powers or authorities granted
to the Committee hereunder, such direction shall be in writing and shall be
signed by one or more of the members of the Committee designated by the
Committee and such designation as to who is so authorized shall be filed with
the Trustee. The Trustee shall not be required to act upon any written notice of
the Committee unless the same is delivered to it, nor shall it be required to so
act unless in its judgment, compliance with such direction would not
substantially increase its duties and responsibilities or violate the provisions
of this Plan. The Trustees shall be fully protected in accepting the Committee's
written direction and acting upon any direction purporting to be from the
Committee provided it does not violate any of the provisions of this Plan. When
the Committee directs the Trustee to make a distribution, the date of
distribution, for valuation purposes and otherwise, shall be the date the
Trustee receives the Committee's written directions at the Trustee's principal
place of business or at such other address that the Trustee may designate in
writing to the Committee.
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15.13 CLAIMS. Claims for benefits under the Plan shall be filed with
the Committee on forms supplied by the Employer. Written notice of the
disposition of a claim shall be furnished the claimant within thirty (30) days
after the application therefor is filed. In the event the claim is denied, the
reasons for the denial shall be specifically set forth, pertinent provisions of
the Plan shall be cited and, where appropriate, an explanation as to how the
claimant can perfect the claim will be provided.
15.14 HEARINGS. Any Participant, Employee, former Employee, or
Beneficiary, who has been denied a benefit, or feels aggrieved by any other
action of the Employer or Committee, shall be entitled, upon written request to
the Committee, to receive a written notice of such action together with a full
and clear statement of the reasons for the action. If the claimant wishes
further consideration of his or her position, he or she may obtain a form from
the Committee on which to request a hearing. Such form, together with a written
statement of the claimant's position, shall be filed with the Committee not
later than ninety (90) days after receipt of the written notification provided
for above in paragraph 15.13. The Committee shall schedule an opportunity for a
full and fair hearing of the issue within the next thirty (30) days. The
decision following such hearing shall be made within thirty (30) days and shall
be communicated in writing to the claimant.
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ARTICLE XVI
AMENDMENT AND TERMINATION OF PLAN
16.1 ESTABLISHMENT OF PLAN. The Employer has established this Plan with
the bona fide intention and expectation that from year to year it will be able
to and will deem it advisable to make its contributions as herein provided.
However, the Employer realizes that circumstances not now foreseen or
circumstances beyond its control may make it either impossible or inadvisable to
continue to make its contribution as herein provided.
16.2 AMENDMENT OR TERMINATION. The Employer may, by proper resolutions
of its Board of Directors, amend this Plan at any time or times by written
amendment executed in its name, by its duly authorized officers and delivered to
the Trustee and Committee provided that no amendment shall:
(a) Substantially change or increase the duties of the Trustee
without its written consent.
(b) Take away from any Participant or any Beneficiary of a
deceased Participant any of the rights or benefits to which he or she is
entitled under this Plan with respect to any contributions made prior to such
amendment.
(c) Direct that any use shall be made of Trust funds or assets
other than for the benefit of Participants and their Beneficiaries, or provide
that any Trust funds or payments under the Trust shall ever revert to or be made
to the Employer.
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16.3 TERMINATION. In the event the Board of Directors decides it is
impossible or inadvisable for the Employer to continue to make its contributions
as herein provided, the Board of Directors shall have the power to terminate the
Plan, in whole or in part, by appropriate resolution. A certified copy of such
resolution shall be delivered to the then Participants, Trustee and Committee.
In the event of such complete or partial termination or voluntary discontinuance
or suspension of Employer contributions to the Plan, the amount then credited to
the accounts of the Participants who are affected by the termination or
discontinuance shall be fully vested in the affected Participants and
distributed to them, or for their benefit, as if they had retired as of the date
of such complete or partial termination unless the Committee decides that it is
more prudent to continue to hold the assets in the Trust.
16.4 EFFECT OF TERMINATION. After the date specified in such
resolution, the Employer shall make no further contributions under the Plan, and
at such specified date of discontinuance of contributions by the Employer, there
shall be a one hundred percent (100%) vesting of all rights and benefits under
this Plan, irrespective of the length of the Participants' Service under the
Plan. However, the Trust shall remain in existence and all of the provisions of
the Plan shall remain in force which are necessary, in the sole opinion of the
Committee, other than the provisions relating to Employer contributions. The
provisions of this paragraph 16.4 shall be subject to the provisions of
paragraph 16.6.
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this paragraph 16.4 shall be subject to the provisions of paragraph 16.6.
16.5 SUCCESSOR ORGANIZATION. Nothing in this Article shall prevent the
continuation of the Plan by a business organization which employs some or all of
the Participants who are no longer employed by the Employer if the Employer
consents to the continuation of the Plan and if such organization shall agree to
assume the liabilities of this Trust with respect to such Participants. Upon
agreement with the Trustee, such organization shall become the Employer with
respect to such Participants. The account of any Participant who does not become
an Employee of the assuming organization shall become fully vested and shall be
distributed to such Participant as provided in Article X hereof.
16.6 EFFECT ON SUCCESSORS. In the case of any merger or consolidation
of the Trust with, or transfer of the Trust assets to, any other plan, the
Participant will (if the Plan then terminates) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit he or she would have been entitled to receive immediately before the
merger, consolidation or transfer (if the Plan had been terminated).
16.7 PAYMENT OF BENEFITS UPON TERMINATION. In the event that the Board
of Directors of the Employer shall decide to terminate completely the Plan and
Trust, it shall be terminated as of a date to be specified in certified copies
of the Board of
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Directors' resolutions to be delivered to the then Participants, Committee and
Trustee. Upon termination of the Plan and after payment of all expenses and
proportional adjustment of Participants' accounts to reflect such expenses, fund
profits or losses and reallocations to the date of termination, each Participant
or retired Participant shall be entitled to receive any amounts then credited to
his or her account in the Trust fund. The Committee may direct the Trustee to
make payment of such amount in cash, in assets of the Trust fund, or in the form
of an immediate or deferred annuity in its sole discretion. However, the portion
of the Participant's Account Balance or Accrued Benefit attributable to Elective
Contributions or treated as Elective Contributions under Section 401(k) of the
Code is not distributable unless the Participant is otherwise entitled under the
Plan to a distribution of that portion of his or her Account Balance or Accrued
Benefit or the Plan termination occurs without the establishment of a successor
plan. A Successor Plan is a defined contribution plan, other than an Employee
Stock Ownership Plan, maintained by the Employer or by a Related Employer at the
time of the termination of the Plan or within the period ending twelve months
after the final distribution of assets. A distribution made after March 31,
1988, pursuant to a Plan termination which occurs without the establishment of a
Successor Plan, must be part of a lump sum distribution to the Participant of
his or her Vested Account Balance or Accrued Benefit.
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ARTICLE XVII
MISCELLANEOUS PROVISIONS
17.1 VOLUNTARY PLAN. The adoption and maintenance of the Plan shall not
be deemed to constitute a contract between the Employer and any Employee or to
be a consideration for, or an inducement or condition of, the employment of any
person. Nothing herein contained shall be deemed to give any Employee the right
to be retained in the employ of the Employer or to interfere with the right of
the Employer to discharge any Employee at any time, nor shall it be deemed to
give to the Employer the right to require the Employee to remain in its employ,
nor shall it interfere with the Employee's right to terminate his employment at
any time.
17.2 BENEFITS PAYABLE FROM TRUST. All benefits payable under the Plan
shall be paid or provided for solely from the Trust, and the Employer assumes no
liability or responsibility therefor.
17.3 CONTROL OF TEXT. The headings of articles are included solely for
convenience of reference, and if there is any conflict between such headings and
the text of this Plan, the text shall control.
17.4 GENDER. Masculine gender shall include the feminine, and the
singular shall include the plural unless the context clearly indicates
otherwise.
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17.5 AFFILIATES. Any Affiliate or subsidiary of the Employer may become
a party to this Plan for the purpose of including hereunder as Participants the
employees of such Affiliate or subsidiary, but only at the time or times and in
the manner and upon the terms and conditions imposed by the Board of Directors
of the Employer.
17.6 FLORIDA LAW. All legal questions pertaining to the Plan and Trust
shall be determined in accordance with the laws of the State of Florida except
to the extent preempted by ERISA.
17.7 NONALIENATION OF BENEFITS AND DOMESTIC RELATIONS ORDERS. Any
benefits payable under this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, prior to being actually received by the person entitled to receive
such benefits. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to receive benefits
payable under this Plan shall be void. The Trust Fund shall not be liable in any
manner for, or subject to, the debts, contracts, liabilities, engagements or
torts of any person entitled to receive benefits under this Plan.
Notwithstanding the general nonalienation of benefits provision set forth above,
the Plan shall provide for the payment of benefits in accordance with the
applicable requirements of a Qualified Domestic Relations Order. For
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purposes of this paragraph, a "Domestic Relations Order" means any judgment,
decree, or order (including approval of a property settlement agreement) which:
(i) relates to the provision of child support, alimony payments, or marital
property rights to a spouse, former spouse, child, or other dependent of a
Participant, and (ii) is made pursuant to a state domestic relations law
(including a community property law).
For purposes of this paragraph, a "Qualified Domestic Relations Order"
means a Domestic Relations Order, as defined above, entered on or after January
1, 1985 which:
(a) creates or recognizes the existence of an Alternate Payee's
right to, or assigns to an Alternate Payee the right to, receive all or a
portion of the benefits payable with respect to a Participant under the Plan;
(b) clearly specifies:
(i) the name and the last known mailing address (if any) of
the Participant and the name and mailing address of each
Alternate Payee covered by the order,
(ii) the amount or percentage of the Participant's benefits
to be paid by the Plan to each such Alternate Payee, or the
manner in which such amount or percentage is to be determined,
(iii) the number of payments or period to which such order
applies, and
(iv) each plan to which such order applies;
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(c) does not require the Plan to provide any type or form of
benefit, or any option, not otherwise provided under the Plan;
(d) does not require the Plan to provide increased benefits
(determined on the basis of actuarial value); and
(e) does not require payment of benefits to an Alternate Payee
which are required to be paid to another Alternate Payee under another order
previously determined to be a Qualified Domestic Relations order.
A Domestic Relations order entered before January 1, 1985 shall be
treated as a Qualified Domestic Relations Order if payment of benefits pursuant
to the order had commenced as of January 1, 1985. A Domestic Relations Order
entered before January 1, 1985 pursuant to which payment of benefits had not
commenced as of January 1, 1985 shall be treated as a Qualified Domestic
Relations Order only if such order meets, or is amended to meet, the
requirements of subparagraphs (a) through (e) above.
In the case of any payment before a Participant has separated from
service, a Domestic Relations Order shall not be treated as failing to meet the
requirements of subparagraph (c) of this paragraph solely because such order
requires that payment of benefits be made to an Alternate Payee (i) on or after
the date on which the Participant attains (or would have attained) age fifty
(50), (ii) as if the Participant had retired on the date on which such payment
is to begin under such order, and (iii) in any form in which such benefits may
be paid under the
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Plan to the Participant (other than in the form of a joint and survivor annuity
with respect to the Alternate Payee and his subsequent spouse).
For purposes of this paragraph, the term "Alternate Payee" shall mean
any spouse, former spouse, child or other dependent of a Participant who is
recognized by a Domestic Relations Order as having a right to receive all, or a
portion of, the benefits payable under the Plan with respect to the Participant.
In the case of any Domestic Relations Order received by the Plan (i) the
Committee shall promptly notify the Participant and any other Alternate Payee of
the receipt of such order and the Plan's procedures for determining the
qualified status of a Domestic Relations Order, and (ii) within a reasonable
period after receipt of such order, the Committee shall determine whether such
order is a Qualified Domestic Relations Order and notify the Participant and
each Alternate Payee of such determination. The Committee shall establish a
reasonable procedure to determine the qualified status of Domestic Relations
Orders, and to administer distributions under such qualified orders. Such
procedures (i) shall be in writing, (ii) shall provide for the notification of
each person specified in a Domestic Relations Order as entitled to payment of
benefits under the Plan (at the address included in the Domestic Relations
Order) of such procedures promptly upon receipt by the Plan of the Domestic
Relations Order, and (iii) shall permit an Alternate Payee to designate a
representative for receipt of copies of notices that are sent to the Alternate
Payee
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with respect to a Domestic Relations Order. During any period in which the issue
of whether a Domestic Relations Order is a Qualified Domestic Relations Order is
being determined (by the Committee, or by a court of competent jurisdiction, or
otherwise), the Committee shall segregate in a separate account of the Plan, or
in an escrow account, the amounts which would have been payable to the Alternate
Payee during such period if the order had been determined to be a Qualified
Domestic Relations Order. If within eighteen (18) months from the date of
receipt of the order (or modification thereof) by the Committee the same is
determined to be a Qualified Domestic Relations Order, the Committee shall pay
the segregated amount (plus any interest thereon) to the person or persons
entitled thereto. If within the eighteen (18) months it is determined that the
order is not a Qualified Domestic Relations Order, or the issue as to whether
such order is a Qualified Domestic Relations Order is not resolved, then the
Committee shall pay the segregated amounts (plus any interest thereon) to the
person or persons who would have been entitled to such amounts if there had been
no order. Any determination that an order is a Qualified Domestic Relations
Order which is made after the close of the eighteen (18) month period shall be
applied prospectively only. If the Committee or any other Plan fiduciary treats
a Domestic Relations Order as being (or not being) a Qualified Domestic
Relations Order, or takes action under Section 206(d)(3)(H) of ERISA, then the
Plan's obligation to the Participant, a surviving Spouse, and each Alternate
Payee shall be discharged to the extent of any payment made.
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17.8 TRANSFER OF ACCOUNT. A Participant who has terminated his or her
employment may request, subject to Committee approval, that the Trustee transfer
the Participant's Vested Account, to: (i) another trust forming part of a
tax-qualified employee benefit plan maintained by such Participant's new
employer and meeting the requirements of Section 401(a) of the Code, provided
that the trust to which such transfer is made specifically permits the transfer;
or (ii) an individual retirement account or individual retirement annuity (as
defined in Section 408 of the Code). The Committee may request a legal opinion
as to whether the transfer will affect the tax-qualified status of the Plan,
particularly where transfers are made on behalf of a Key Employee in a Top-Heavy
Plan.
17.9 ACCEPTANCE OF TRANSFERS AND ROLLOVER CONTRIBUTIONS. The Trustee,
subject to Committee approval, may accept funds transferred from another trust
forming part of a tax-qualified employee benefit plan or funds qualifying as a
rollover contribution under Sections 408(d)(3) or 402(a)(5) of the Code,
provided that in the case of a transfer from such a trust, the trust from which
such funds are transferred specifically permits the transfer, the trust is not
part of a plan to which the requirements of Sections 401(a)(11) and 417 of the
Code apply and the Trustee is satisfied that the transfer or rollover
contribution will not jeopardize the tax-qualified or exempt
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status of the Plan or Trust. The Committee shall develop such procedures, and
may require such information from an Employee desiring to make any transfer, as
it deems necessary or desirable to determine that the proposed transfer will
meet the requirements of this paragraph. The Committee shall maintain a
separate, 100% vested account for each Employee on whose behalf a transfer or
rollover contribution is accepted, to be called a Rollover Account, which shall
receive the amount transferred or rolled over. Such account shall share in the
allocation of the net income or net loss of the Trust as provided at paragraph
5.2.
17.10 INCAPACITY OF PARTICIPANT. If for any reason the Committee shall
consider that it is undesirable, because of the physical or other incapacity,
incompetency or minority of a Participant or Beneficiary entitled thereto, to
make any distribution provided herein directly to such person, the Committee
shall have the right to direct the Trustee to pay or apply any such distribution
for the benefit of such Participant or Beneficiary in any way that it shall deem
advisable or to direct the making of such payments to the guardian of the
property of such minor or incompetent appointed in any jurisdiction or to such
persons, natural guardian or person with whom such person may reside or to any
person furnishing services to such person, who, in the judgment of the
Committee, will apply the same for the benefit of the Participant or
Beneficiary; provided, however, that no such payments shall be made to an
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Employer other than in a fiduciary capacity. Any such payment or application for
the benefit of a Participant or Beneficiary entitled thereto or to any other
person for his or her benefit, shall be a complete discharge of all liability of
the Plan and Trustee therefor.
17.11 LOCATION OF PARTICIPANTS. If the Trustee is unable to make
payment to any person to whom a payment is due under the Plan because it cannot
ascertain the whereabouts or identity of such person and if more than six (6)
years after such payment is due a notice of the payment so due is mailed to the
last known address of such person as shown on the records of the Committee, and
within three (3) months after such mailing such person has not made written
claim therefor, the Committee, after notice to the Employer, may direct the
Trustee that such payment and all remaining payments otherwise due to such
person be treated as a forfeiture and reallocated among the then Participants in
accordance with paragraph 6.2. If the person who cannot be located contacts the
Trustee or Committee after the forfeiture has been reallocated, his or her
forfeiture shall be reestablished by the Employer so that a distribution can be
made to the individual.
17.12 EXCLUSIVE BENEFIT. It shall be impossible, under any conditions,
for any part of the corpus or income of the Trust to be used for, or diverted
to, purposes other than the exclusive benefit of the Employees or their
Beneficiaries (including the payment of the expenses of the administration of
the Plan or of
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the Trust or both) and the Trust shall continue for such time as may be
necessary to accomplish the purposes for which it is created.
17.13 FIDUCIARY. The Employer shall be the "Named Fiduciary" within the
meaning of Section 402 of ERISA. The Employer shall have the power to delegate
fiduciary responsibilities. Such delegations may be to the Committee, Employees
of the Employer or to other individuals, firms or corporations, all of whom
shall serve at the pleasure of the Employer and, if full-time Employees of the
Employer, without compensation. Any such person may resign by delivering a
written resignation to the Employer. Vacancies created by resignation, death or
other cause may be filled by the Employer or the assigned responsibilities may
be reabsorbed or redelegated by the Employer. The Employer shall indemnify all
of those to whom it delegates fiduciary duties against any and all claims,
losses, damages, expenses and liability arising from their responsibilities in
connection with the Plan, unless the same is determined to be due to gross
negligence or willful misconduct.
17.14 WAIVER OF NOTICE. Any individual which may be entitled to notice
under the Plan may waive the notice, unless the Code or Treasury Regulations
prescribe the notice or ERISA specifically or impliedly prohibits such a waiver.
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17.15 MODIFICATION OF PROVISIONS FOR ACQUIRED ENTITIES. Exhibits may be
attached hereto which modify some or all of the provisions of this Plan with
regard to participants of retirement plans which are consolidated with and into
this Plan. In such case the provisions of such exhibit(s) shall govern
notwithstanding the provisions set forth in this Plan document.
IN WITNESS WHEREOF, the Employer and the Trustee have caused this Plan
to be executed by their duly authorized officers and their corporate seals to be
hereto affixed and attested all as of the day and year first above written.
HUGHES SUPPLY, INC.
(CORPORATE SEAL)
By: /s/
ATTEST: -------------------------------------
Title: President
----------------------------------
Date: 3/18/98
/s/ JAY CLARK -----------------------------------
- ----------------------------------
Title: Asst. Secretary
----------------------------
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
(CORPORATE SEAL)
By: /s/ KARLA B. ENGARD
ATTEST: -------------------------------------
Title: Vice-President
----------------------------------
Date: April 8, 1998
/s/ SUSAN CONERLY -----------------------------------
- ----------------------------------
Title: Vice President
----------------------------
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EXHIBIT "A" TO THE
HUGHES SUPPLY, INC. CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
(AMENDED AND RESTATED AS OF FEBRUARY 1, 1997)
FOR FORMER EMPLOYEES OF J & J, INC.
APPLICATION
This Exhibit "All shall be effective as of May 31, 1997. For purposes of
this Exhibit "A", the term "Former J & J Participant" means a person who was at
any time a Participant of the J & J, Inc. 401(k) Plan (the "J & J Plan")
provided the individual has an account balance in the J & J Plan as of May
31, 1997 or is entitled by law to have this Plan reestablish a prior forfeiture
under the J & J Plan due to reemployment with J & J, Inc., or its successor,
after May 31, 1997. This Exhibit "All shall only apply to a Former J & J
Participant.
Article III, Paragraph 3.1
ELIGIBILITY REQUIREMENTS
In addition to the provisions of Paragraph 3.1 of Article III of the Hughes
Supply, Inc. Cash or Deferred Profit Sharing Plan (the "Plan"), each Former J &
J Participant who is an active employee on May 31, 1997 shall be a Participant
in this Plan on May 31, 1997. In addition, each individual who is an active
employee of J & J, Inc. or its successor on May 31, 1997 and who would have
become a participant in the J & J Plan on July 1, 1997, shall be a Participant
in this Plan on July 1, 1997 provided such employee is still an active employee
of J & J, Inc., or any Employer on July 1, 1997. Thereafter, the Entry Dates of
February 1 and August 1 pursuant to Section 2.2 of this Plan shall apply
beginning with the Entry Date of August 1, 1997.
Article III, Paragraph 3.3
SERVICE WITH A RELATED ENTITY
In addition to the provisions of Paragraph 3.3 of the Plan's Article
III, each former employee of J & J, Inc. shall receive credit for all past
service with J & J, Inc. for purposes of determining the employee's eligibility
for entry into the Plan and Years of Vesting Service.
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Article VI, Paragraph 6.4
PRIOR PLAN ACCOUNTS
In addition to the provisions of Paragraph 6.4 of the Plan's Article VI, to
the extent detailed account information is available, each Former J & J
Participant's account shall be allocated as follows:
"Deferred Compensation" to the J &: J Plan, as defined therein plus
earnings thereon shall be held in an Elective Contribution account
hereunder.
"Matching Contributions" to the J & J Plan plus earnings thereon shall be
held in a Matched Contribution account and hereunder.
"Employer's Non-Elective Contributions" under the J & J Plan plus earnings
thereon shall be held in a Discretionary employer contribution account
hereunder.
"Qualified Non-Elective Contributions" to their J & J Plan plus earnings
thereon shall be held in a Restricted Employer Contribution account
hereunder.
"Top Heavy Minimum Contributions" under the J & J Plan plus earnings
thereon shall be held in a discretionary employer contribution account
hereunder.
"Transfers from Qualified Plans" to the J & J Plan plus earnings thereon
shall be held in a Rollover Contribution account hereunder.
Article VII, Paragraph 7.2
VESTING TABLE
In accordance with the provisions of Paragraph 7.4 and in addition to the
provisions of Paragraph 7.2 of the Plan's Article VII, each Former J & J
Participant's Vested Percentage under the J & J Plan as of May 31, 1997 shall be
recorded and maintained under this Plan as the Minimum Vested Percentage,
nonforfeitable at all times, for each Former J & J Participant. Thereafter, the
Vested Percentage of each Former J & J Participant shall increase in accordance
with the Vesting Table under this Plan.
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Article VIII, Paragraph 8.1
BENEFITS ON NORMAL RETIREMENT
Notwithstanding the provisions of Paragraph 8.1 of the Plan's Article VIII,
Former J & J Participants who would have been entitled to retire with full
vesting upon their attainment of age fifty-five (55) under the Early Retirement
Date provisions of the J & J Plan shall be entitled to elect distribution of his
or her entire account balance upon termination of employment with an Employer
after attaining age fifty-five (55) in the manner prescribed in Article XI of
this Plan as if he or she had retired hereunder.
Article XI, Paragraph 11.4
PAYMENT OPTIONS
Notwithstanding the provisions of Paragraph 11.4 of the Plan's Article XI,
the following provisions apply to each Former J & J Participant from whom the
Plan receives a transfer from the J & J Plan: The Trustee must distribute a
married or unmarried Participant's nonforfeitable account balance in the form of
a qualified joint and survivor annuity, unless the Participant makes a valid
waiver election within the 90 day period ending on the "annuity starting date".
If, as of the annuity starting date, the Participant is married, a qualified
joint and survivor annuity is an immediate annuity which is purchasable with the
Participant's nonforfeitable account balance and which provides a life annuity
for the Participant and a survivor annuity payable for the remaining life of the
Participant's surviving spouse equal to 50% of the amount of the annuity payable
during the life of the Participant. However, the Participant may elect to
receive a smaller annuity benefit with continuation of payments to the spouse at
a rate of one hundred percent (100%) of the rate payable to the Participant
during his or her lifetime which alternative joint and survivor annuity shall be
equal in value to the automatic qualified joint and 50% survivor annuity. If, as
of the annuity starting date, the Participant is not married, a qualified joint
and survivor annuity is an immediate life annuity for the Participant which is
purchasable with the Participant's nonforfeitable account balance. On or before
the annuity starting date, the Trustee, without Participant or spousal consent,
must pay the Participant's nonforfeitable account balance in a lump sum, in lieu
of a qualified joint and survivor annuity, if the Participant's nonforfeitable
account balance is not greater than $3,500, for Plan Years ending prior to
February 1, 1998, or $5,000 for all Plan Years beginning after January 31, 1998.
For purposes of these provisions, "annuity starting date" means the first day of
the first period for which an amount is paid as an annuity, or, in the case of a
benefit not payable in the form of an annuity, the first
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day on which all events have occurred which entitle the Participant to such
benefits.
If a married Participant dies prior to his or her annuity starting date,
the Trustee must distribute a portion of the Participant's nonforfeitable
account balance to the Participant's surviving spouse in the form of a
preretirement survivor annuity, unless the Participant has a valid waiver
election in effect, or unless the Participant and his or her spouse were not
married throughout the one year period ending on the date of his or her death. A
preretirement survivor annuity is an annuity which is purchasable with the
Participant's Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to each type of contribution under the Plan in the same proportion
as the Participant's nonforfeitable account balance is attributable to those
contributions. The portion of the Participant's nonforfeitable account balance
not payable under this paragraph is payable to the Participant's Beneficiary. If
the present value of the preretirement survivor annuity does not exceed $3,500,
for Plan Years ending prior to February 1, 1998, or $5,000, for all Plan Years
beginning after January 31, 1998, the Trustee must make a lump sum distribution
to the Participant's surviving spouse on or before the annuity starting date, in
lieu of a preretirement survivor annuity.
If the present value of the preretirement survivor annuity exceeds $3,500,
for Plan Years ending prior to February 1, 1998, or $5,000, for Plan Years
beginning after January 31, 1998, the Participant's surviving spouse may elect
to have the Trustee commence payment of the preretirement survivor annuity at
any time following the date of the Participant's death, but not later than the
date required to satisfy the mandatory minimum distribution requirements
prescribed by Internal Revenue Code Section 401(a)(9). For this purpose only,
the forms of payment permitted by Internal Revenue Code Section 401(a)(9) may be
elected in lieu of the preretirement survivor annuity. In the absence of an
election by the surviving spouse, the Trustee must distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant would
have attained Normal Retirement Age; or (iv) the date the Participant would have
attained age 62.
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If the Participant has in effect a valid waiver election regarding the
qualified joint and survivor annuity or the preretirement survivor annuity, the
Trustee will distribute the Participant's nonforfeitable account balance in
accordance with the payment options set forth in Paragraph 11.4 of this Plan or
the Participant may select an annuity provided the annuity may not be in a form
that will provide for payments over a period extending beyond either the life of
the Participant or the lives of the Participant and his or her designated
Beneficiary, or the life expectancy of the Participant, or the joint and last to
die expectancy of the Participant and his or her designated Beneficiary.
The Trustee will reduce the Participant's nonforfeitable account balance by
any security interest held by the Plan by reason of a Participant loan to
determine the value of the Participant's Nonforfeitable account balance
distributable in the form of a qualified joint and survivor annuity or
preretirement survivor annuity. For purposes of applying these provisions, a
former spouse shall be treated as the Participant's spouse or surviving spouse
to the extent provided under a qualified domestic relations order. The
provisions of this section apply separately to the portion of the Participant's
nonforfeitable account balance subject to the qualified domestic relations order
and to the portion of the Participant's nonforfeitable account balance not
subject to that order.
Not earlier than 90 days, but not later than 30 days, before the
Participant's annuity starting date, the Participant must be provided a written
explanation of the terms and conditions of the qualified joint and survivor
annuity, the Participant's right to make, and the effect of, an election to
waive the joint and survivor form of benefit, the rights of the Participant's
spouse regarding the waiver election and the Participant's right to make, and
the effect of, a revocation of a waiver election. The Plan does not limit the
number of times the Participant may revoke a waiver of the qualified joint and
survivor annuity or make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this section, has consented in writing to the
waiver election, the spouse's consent acknowledges the effect of the election,
and a notary public or the Plan Administrator (or his or her representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form of
payment designated by the Participant or to any change in that designated form
of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary
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designation or to any change in the Participant's Beneficiary designation. The
spouse's consent to a waiver of the qualified joint and survivor annuity is
irrevocable, unless the Participant revokes the waiver election. The spouse may
execute a blanket consent to any form of payment designation or to any
Beneficiary designation made by the Participant, if the spouse acknowledges the
right to limit that consent to a specific designation but, in writing, waives
that right. The consent requirements of this section apply to a former spouse of
the Participant, to the extent required under a qualified domestic relations
order.
The Plan Administrator will accept as valid a waiver election which does
not satisfy the spousal consent requirements if it is established that the
Participant does not have a spouse, the spouse is not able to be located, the
Participant is legally separated or has been abandoned (within the meaning of
State law) and the Participant has a court order to that effect, or other
circumstances exist under which the Secretary of the Treasury will excuse the
consent requirement. If the Participant's spouse is legally incompetent to give
consent, the spouse's legal guardian (even if the guardian is the Participant)
may give consent.
A Participant and spouse may waive any notice or election requirement and
commence distribution of benefits to the extent allowed by law.
The Plan Administrator must provide a written explanation of the
preretirement survivor annuity to each married Participant, within the following
period which ends last: (1) the period beginning on the first day of the Plan
Year in which the Participant attains age 32 and ending on the last day of the
Plan Year in which the Participant attains age 34; (2) a reasonable period after
an Employee becomes a Participant; (3) a reasonable period after the joint and
survivor rules become applicable to the Participant; or (4) a reasonable period
after a fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the Plan
Administrator must provide the written explanation within the period beginning
one year before and ending one year after the separation from service. The
written explanation must describe, in a manner consistent with Treasury
regulations, the terms and conditions of the preretirement survivor annuity
comparable to the explanation of the qualified joint and survivor annuity
required. The Plan does not limit the number of times the Participant may revoke
a waiver of the preretirement survivor annuity or make a new waiver during the
election period.
A Participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no earlier than
the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent
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requirements, except the spouse need not consent to the form of benefit payable
to the designated Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the Participant revokes
the waiver election. Irrespective of the time of election requirement described
in clause (a), if the Participant separates from service prior to the first day
of the Plan Year in which he attains age 35, the Plan Administrator will accept
a waiver election as respects the Participant's account balance attributable to
his or her service prior to his or her separation from service. Furthermore, if
a Participant who has not separated from service makes a valid waiver election,
except for the timing requirement of clause (a), the Plan Administrator will
accept that election as valid, but only until the first day of the Plan Year in
which the Participant attains age 35. A waiver election described in this
paragraph is not valid unless made after the Participant has received the
written explanation described in this section.
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