<PAGE> 1
As filed with the Securities and Exchange Commission on July 27, 1999
Registration Statement No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
AMERICAN INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2592361
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 Pine Street, New York, New York 10270
(Address, including zip code, of principal executive offices)
SunAmerica Profit Sharing and Retirement Plan
(Full title of the plans)
Kathleen E. Shannon
Vice President and Secretary
70 Pine Street
New York, New York 10270
(212) 770-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities to be price offering registration
to be registered registered (2) (3) per share (3) price (3) fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $2.50 par value (1) 1,000,000 shares $118.10 $118,100,000 $32,832
- -----------------------------------------------------------------------------------------------------
</TABLE>
1. This registration statement also registers interests in the
above-referenced plan. Pursuant to Rule 457(h)(2) no separate fee is
payable with respect to the registration of these interests.
2. This registration statement also relates to an indeterminate number of
additional shares of Common Stock that may be issued pursuant to
anti-dilution and adjustment provisions of the above-referenced plan.
3. Estimated solely for purposes of calculating the registration fee. Such
estimate has been computed in accordance with Rule 457(h) and is based
upon the average of the high and low sales prices of the Common Stock
of American International Group, Inc. on July 21, 1999 as reported on
the New York Stock Exchange Composite Tape.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
All information required by Part I to be contained in the prospectus is
omitted from this Registration Statement in accordance with Rule 428 under the
Securities Act of 1933, as amended (the "Securities Act").
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by American International Group
Inc. ("AIG") with the Securities and Exchange Commission (the "Commission")(File
No. 1-8787) and are incorporated herein by reference:
(1) AIG's Annual Report on Form 10-K for the year ended
December 31, 1998;
(2) AIG's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999;
(3) AIG's Current Report on Form 8-K, dated June 3, 1999; and
(4) The description of Common Stock contained in the
Registration Statement on Form 8-A, dated September 20, 1984, filed
pursuant to Section 12(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
The Annual Report on Form 11-K for the fiscal year ended December 31,
1998 of the SunAmerica Profit Sharing and Retirement Plan (the "Plan") has been
filed with the Commission and is incorporated by reference herein.
All documents filed by AIG and the Plan pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold, or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Common Stock is registered under Section 12(b) of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The financial statements incorporated in this Registration Statement
by reference to (i) the audited consolidated financial statements and financial
statement schedules listed in the index on page 25 of AIG's Current Report on
Form 8-K dated June 3, 1999 and (ii) the financial statements in the Annual
Report on Form 11-K of the SunAmerica Profit Sharing and Retirement Plan for the
fiscal year ended December 31, 1998 have been so incorporated in reliance on
the reports of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
This Registration Statement relates only to previously issued shares of
Common Stock. As a result, no opinion with respect to the validity of the shares
of Common Stock registered hereunder is required.
II-1
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation, as amended, of AIG (the
"Certificate") provides that AIG shall indemnify to the full extent permitted by
law any person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that he, his testator or intestate is or was a director, officer or
employee of AIG or serves or served any other enterprise at the request of AIG,
including services by a director, officer or employee with respect to an
employee benefit plan. Section 6.4 of AIG's By-laws contains a similar
provision.
The Certificate also provides that a director will not be personally
liable to AIG or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that such an exemption from liability
or limitation thereof is not permitted by the Delaware General Corporation Law
(the "GCL").
Section 145 of the GCL permits indemnification against expenses, fines,
judgments and settlements incurred by any director, officer or employee of AIG
in the event of pending or threatened civil, criminal, administrative or
investigative proceedings, if such person was, or was threatened to be made, a
party by reason of the fact that he is or was a director, officer or employee of
AIG. Section 145 also provides that the indemnification provided for therein
shall not be deemed exclusive of any other rights to which those seeking
indemnification may otherwise be entitled. In addition, AIG and its subsidiaries
maintain a directors' and officers' liability insurance policy.
In addition, Section 9.11 of the Plan provides that AIG shall indemnify
the Board of Directors, any Employee performing duties with respect to the Plan,
the Plan Administrator and the Trustee (each as defined therein) from and
against any and all claims, losses, damages, expenses and liabilities
(including, without limitation, reasonable attorneys' fees) arising from their
responsibilities in connection with the Plan, unless such liability arises from
such person's gross negligence or dishonesty in performance of its duties.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The exhibits are listed in the exhibit index.
ITEM 9. UNDERTAKINGS
AIG 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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
II-2
<PAGE> 5
(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 this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by AIG pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(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.
AIG hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of AIG's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and each filing of the Plan's annual
report pursuant to section 15(d)) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of AIG or
the Plan pursuant to the foregoing provisions, or otherwise, AIG and the Plan
have been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by AIG or the Plan of expenses incurred or
paid by a director, officer or controlling person of AIG or the Plan 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, AIG or the Plan 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.
II-3
<PAGE> 6
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and State of New
York, on the 27th day of July, 1999.
AMERICAN INTERNATIONAL GROUP, INC.
By: /s/ M. R. Greenberg
__________________________________
(M. R. Greenberg, Chairman)
KNOW ALL MEN BY THESE PRESENTS: that each person whose signature
appears below constitutes and appoints M. R. Greenberg, Edward E. Matthews and
Howard I. Smith, and each of them, as true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities to sign any and all
amendments (including post-effective amendments) to this Registration Statement
on Form S-8, and to file the same, with all exhibits thereto, and other
documents in connection herewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-law and agents, and each of them, full power and
authority to do and perform each and every act and thing required and necessary
to be done in and about the foregoing as fully for all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their 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, as amended,
this Registration Statement on Form S-8 has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ M. R. Greenberg Chairman, Chief Executive Officer
___________________________________ and Director (Principal Executive July 27, 1999
(M. R. Greenberg) Officer)
/s/ Howard I. Smith Executive Vice President, Chief
___________________________________ Financial Officer and Director July 27, 1999
(Howard I. Smith) (Principal Financial and
Accounting Officer)
/s/ M. Bernard Aidinoff
____________________________________ Director July 27, 1999
(M. Bernard Aidinoff)
/s/ Eli Broad
___________________________________ Director July 27, 1999
(Eli Broad)
</TABLE>
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<PAGE> 7
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Pei-yuan Chia
___________________________________ Director July 27, 1999
(Pei-yuan Chia)
___________________________________ Director
(Marshall A. Cohen)
/s/ Barber B. Conable, Jr.
___________________________________ Director July 27, 1999
(Barber B. Conable, Jr.)
___________________________________ Director
(Martin S. Feldstein)
___________________________________ Director
(Ellen V. Futter)
___________________________________ Director
(Leslie L. Gonda)
/s/ Evan G. Greenberg
___________________________________ Director July 27, 1999
(Evan G. Greenberg)
___________________________________ Director
(Carla A. Hills)
/s/ Frank J. Hoenemeyer
___________________________________ Director July 27, 1999
(Frank J. Hoenemeyer)
/s/ Edward E. Matthews
___________________________________ Director July 27, 1999
(Edward E. Matthews)
/s/ Dean P. Phypers
___________________________________ Director July 27, 1999
(Dean P. Phypers)
/s/ Thomas R. Tizzio
___________________________________ Director July 27, 1999
(Thomas R. Tizzio)
___________________________________ Director
(Edmund S. W. Tse)
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
___________________________________ Director
(Jay S. Wintrob)
/s/ Frank G. Wisner
___________________________________ Director July 27, 1999
(Frank G. Wisner)
</TABLE>
The Plan. Pursuant to the requirements of the Securities Act of 1933,
as amended, the trustees (or other persons who administer the employee benefit
plan) have duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of New York, State of New
York, on July 27, 1999.
SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN
By: /s/ Scott L. Robinson
___________________________________
Name: Scott L. Robinson
Title: Senior Vice President and Controller
II-6
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------- ----------- --------
<S> <C> <C>
4 (a) SunAmerica Profit Sharing and Retirement Plan, as amended
and restated effective January 1, 1989 ............................ Filed as exhibit hereto.
5 Opinion re validity......................................................... Not applicable.
15 Letter re unaudited interim financial information........................... Not applicable.
23 Consents of experts and counsel
(a) PricewaterhouseCoopers LLP. ....................................... Filed as exhibit hereto.
24 Power of Attorney........................................................... Included in signature pages.
</TABLE>
II-7
<PAGE> 1
Exhibit 4(a)
SUNAMERICA PROFIT SHARING
AND
RETIREMENT PLAN
As Amended and Restated Effective January 1, 1989,
Except as Otherwise Provided Herein
[Subject to Approval by the Internal Revenue Service]
<PAGE> 2
SUNAMERICA
PROFIT SHARING AND
RETIREMENT PLAN
THIS AMENDMENT AND RESTATEMENT made and entered into this 30th day of
December, 1994, by SUNAMERICA INC., a Maryland corporation (the "Company");
W I T N E S S E T H:
WHEREAS, the Company previously established a qualified plan as defined
in Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended,
for the exclusive benefit of eligible employees of the Company and Employers
adopting the Plan with the approval of the Company, such plan to be known as the
SunAmerica Profit Sharing and Retirement Plan (the "Plan"); and
WHEREAS, the Company now desires to amend and restate the Plan to
incorporate the requirements of the Tax Reform Act of 1986 and subsequent
legislation, and to make certain other changes;
NOW THEREFORE, the Company hereby amends and restates the Plan,
effective as of January 1, 1989, to read as follows:
<PAGE> 3
PURPOSE
Pursuant to a resolution of its Board of Directors, SunAmerica, Inc. had adopted
the following amendment and restatement of the SunAmerica Profit Sharing and
Retirement Plan for the benefit of its Employees. It is intended that this Plan
meet all of the requirements for profit sharing plan and cash or deferred
arrangement qualification under the Internal Revenue Code, as amended, and the
Employee Retirement Income Security Act of 1974, as amended. If any provision of
this Plan is subject to more than one interpretation, such ambiguity shall be
resolved in favor of the interpretation which is consistent with this Plan being
so qualified.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS................................................................................... 1
Section 1.1 "Account"....................................................................... 1
Section 1.2 "Affiliated Employer"........................................................... 2
Section 1.3 "Annual Compensation"........................................................... 2
Section 1.4 "Annuity Starting Date"......................................................... 3
Section 1.5 "Actual Contribution Percentage"................................................ 3
Section 1.6 "Average Contribution Percentage"............................................... 4
Section 1.7 "Actual Deferral Percentage".................................................... 4
Section 1.8 "Average Deferral Percentage"................................................... 4
Section 1.9 "Beneficiary"................................................................... 4
Section 1.10 "Break in Service".............................................................. 5
Section 1.11 "Code".......................................................................... 5
Section 1.12 "Company"....................................................................... 5
Section 1.13 "Company Stock"................................................................. 5
Section 1.14 "Computation Period"............................................................ 5
Section 1.15 "Covered Employment Classification"............................................. 5
Section 1.16 "Effective Date"................................................................ 5
Section 1.17 "Elective Deferral"............................................................. 5
Section 1.18 "Eligible Employee"............................................................. 6
Section 1.19 "Eligible Spouse"............................................................... 6
Section 1.21 "Employer"...................................................................... 6
Section 1.22 "Employment".................................................................... 6
Section 1.23 "Employment Commencement Date".................................................. 6
Section 1.24 "Entry Date".................................................................... 6
Section 1.25 "ERISA"......................................................................... 7
Section 1.26 "Excess Aggregate Contributions"................................................ 7
Section 1.27 "Excess Contributions".......................................................... 7
Section 1.28 "Family Member"................................................................. 7
Section 1.30 "Forfeiture".................................................................... 7
Section 1.32 "Highly Compensated Employee"................................................... 7
Section 1.33 "Hour of Service"............................................................... 9
Section 1.34 "Investment Manager"............................................................ 11
Section 1.35 "Matching Contribution"......................................................... 11
Section 1.36 "Month of Service".............................................................. 11
Section 1.37 "Named Fiduciaries"............................................................. 11
Section 1.38 "Non-Highly Compensated Employee"............................................... 11
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
Section 1.39 "Normal Retirement Date"........................................................ 11
Section 1.40 "Participant"................................................................... 11
Section 1.41 "Pay Deferrals"................................................................. 11
Section 1.42 "Plan".......................................................................... 12
Section 1.43 "Prior Plan".................................................................... 12
Section 1.44 "Plan Administrator"............................................................ 12
Section 1.45 "Plan Year"..................................................................... 12
Section 1.46 "Qualified Joint and Survivor Annuity".......................................... 12
Section 1.47 "Qualified Leave of Absence".................................................... 12
Section 1.48 "Qualified Nonelective Contribution"............................................ 13
Section 1.49 "Qualified Joint and Survivor Annuity".......................................... 13
Section 1.50 "Qualified Preretirement Survivor Annuity"...................................... 13
Section 1.51 "Reemployment Commencement Date"................................................ 13
Section 1.52 "Secretary"..................................................................... 13
Section 1.53 "Special Distribution Restrictions"............................................. 13
Section 1.54 "Trust Agreement"............................................................... 14
Section 1.55 "Trust (or Trust Fund)"......................................................... 14
Section 1.56 "Trustee"....................................................................... 14
Section 1.57 "Total Disability".............................................................. 14
Section 1.58 "Valuation Date"................................................................ 14
Section 1.59 "Vesting Service"............................................................... 14
Section 1.60 "Vested Interest"............................................................... 15
Section 1.61 "Year of Service"............................................................... 15
Section 1.62 "Construction".................................................................. 15
ARTICLE II
ELIGIBILITY TO PARTICIPATE.................................................................... 16
Section 2.1 Eligibility To Participate...................................................... 16
Section 2.2 Break In Service Before Eligibility To Participate.............................. 16
Section 2.3 Reparticipation After A Break In Service........................................ 16
Section 2.4 Covered Employment Classification Requirement................................... 16
Section 2.5 Reparticipation On Reentry To Covered Employment Classification................. 16
Section 2.6 Notice of Eligibility........................................................... 16
Section 2.7 Employee Election To Participate................................................ 16
ARTICLE III
CONTRIBUTIONS................................................................................. 18
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
Section 3.1 Funding Policy.................................................................. 18
Section 3.2 Pre-Tax Matched Contributions................................................... 18
Section 3.3 Pre-Tax Unmatched Contributions................................................. 18
Section 3.4 Payroll Deduction; Change or Suspension of Pay Deferral Contributions........... 18
Section 3.5 Limitation of Elective Deferrals; Return of Contributions....................... 19
Section 3.7 Matching Contributions.......................................................... 22
Section 3.8 Limitation on Matching Contributions............................................ 23
Section 3.9 Company Discretionary Contributions............................................. 25
Section 3.10 Employee After-Tax Contributions................................................ 26
Section 3.11 Maximum Allocations............................................................. 26
Section 3.12 Excess Allocations.............................................................. 30
Section 3.13 Rollover Contributions.......................................................... 30
Section 3.14 Asset Transfers................................................................. 31
Section 3.15 Contribution Under Mistake of Fact.............................................. 31
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS................................................................... 32
Section 4.1 Investment of Participant Accounts.............................................. 32
Section 4.2 Procedures for Investment Directions............................................ 33
Section 4.3 Valuation Date Adjustments...................................................... 35
Section 4.4 Statements Of Account Value..................................................... 35
Section 4.5 Investments Limited By Contract Terms........................................... 35
Section 4.6 Voting Rights................................................................... 35
Section 4.7 Tender or Exchange Offer for Company Stock...................................... 36
ARTICLE V
VESTING....................................................................................... 39
Section 5.1 Fully Vested Accounts........................................................... 39
Section 5.2 Vesting Of Other Accounts....................................................... 39
Section 5.3 Graduated Vesting............................................................... 39
Section 5.4 Vesting Service Within Controlled Group......................................... 40
Section 5.5 Vesting Provision Amendments.................................................... 40
ARTICLE VI
WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT................................................ 42
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C>
Section 6.1 Withdrawals From Participant After-Tax Contribution Account..................... 42
Section 6.2 Hardship Withdrawals............................................................ 42
Section 6.3 In-Service Withdrawals.......................................................... 44
ARTICLE VII
DISTRIBUTIONS................................................................................. 45
Section 7.1 Normal Retirement Benefits...................................................... 45
Section 7.2 Disability Benefits............................................................. 45
Section 7.3 Postponed Retirement............................................................ 45
Section 7.4 Death Benefits When Death Precedes Commencement of Benefits..................... 45
Section 7.5 Termination Benefits............................................................ 45
Section 7.6 Form of Payment of Benefits..................................................... 46
Section 7.7 Maintenance of Accounts Prior to Payout......................................... 49
Section 7.8 Commencement of Payments........................................................ 49
Section 7.9 Errors in Participations' Accounts.............................................. 50
Section 7.11 Errors in Participant's Accounts................................................ 50
Section 7.12 Payment of Benefits of Disabled or Incapacitated Person......................... 51
Section 7.13 Direct Transfer of Eligible Rollover Distributions.............................. 51
ARTICLE VIII
TERMINATION OF EMPLOYMENT..................................................................... 53
Section 8.1 Distributions................................................................... 53
Section 8.2 Forfeitures..................................................................... 53
ARTICLE IX
ADMINISTRATION................................................................................ 55
Section 9.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration ............................................................... 55
Section 9.2 Administration.................................................................. 55
Section 9.3 Claims Procedure................................................................ 55
Section 9.4 Records and Reports............................................................. 56
Section 9.5 Other Administrative Powers and Duties.......................................... 56
Section 9.6 Rules and Decisions............................................................. 57
Section 9.7 Procedures...................................................................... 57
Section 9.8 Authorization of Benefit Distributions.......................................... 57
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
Section 9.9 Application and Forms for Distributions......................................... 57
Section 9.10 Notices to Trustee.............................................................. 58
ARTICLE X
ESTABLISHMENT OF TRUST........................................................................ 59
Section 10.1 Establishment of Trust.......................................................... 59
ARTICLE XI
AMENDMENT OF THE PLAN......................................................................... 60
ARTICLE XII
TERMINATION OF THE PLAN....................................................................... 61
ARTICLE XIII
MISCELLANEOUS................................................................................. 62
Section 13.2 Spendthrift Clause.............................................................. 62
Section 13.3 Participation of Adopting Employer and Its Employees............................ 63
Section 13.4 Qualification of Plan as a Condition............................................ 64
Section 13.5 Successor to the Company........................................................ 64
Section 13.6 Transfer of Plan Assets......................................................... 64
Section 13.7 Delegation of Authority by the Company.......................................... 65
Section 13.9 Headings........................................................................ 65
ARTICLE XIV
TOP-HEAVY PLAN PROVISIONS..................................................................... 66
Section 14.1 Application..................................................................... 66
Section 14.2 Definitions..................................................................... 66
Section 14.3 Allocation of Minimum Contribution.............................................. 68
</TABLE>
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<PAGE> 9
ARTICLE I
DEFINITIONS
When used in this Plan, following terms shall have the meanings set forth below
unless a different meaning is plainly required by the context:
Section 1.1 "Account" means an Account containing assets of the Plan, and shall
include the following:
(a) The "Employee Pre-Tax Matched Contribution Account" means that
account established for the benefit of a Participant to
reflect Employee Pre-Tax Matched Contributions. "Employee
Pre-Tax Matched Contributions" are a Participant's Pay
Deferrals made pursuant to Section 401(k) of the Code in
accordance with Article III which are taken into account as
the basis for Company Matching Contributions. A Participant's
Employee Pre-Tax Matched Contribution Account shall be fully
vested at all times.
(b) The "Employee Pre-Tax Unmatched Contribution Account" means
that account established for the benefit of a Participant to
reflect Employee Pre-Tax Unmatched Contributions. "Employee
Pre-Tax Unmatched Contributions" are a Participant's Pay
Deferrals made pursuant to Section 401(k) of the Code in
accordance with Article III which are not taken into
account as the basis for Company Matching Contributions. A
Participant's Employee Pre-Tax Unmatched Contribution Account
shall be fully vested at all times.
(c) The "Company Discretionary Contribution Account" means that
account established for the benefit of a Participant to
reflect Company Discretionary Contributions. "Company
Discretionary Contributions" are the Employer contributions,
if any, made in the form of Qualified Nonelective
Contributions pursuant to Section 3.9 of the Plan. Company
Discretionary Contributions shall be fully vested when
allocated to a Participant's Company Discretionary
Contribution Account.
(d) The "Company Matching Contribution Account" means that account
established for the benefit of a Participant to reflect
Company Matching Contributions. "Company Matching
Contributions" are the contributions made by an Employer with
respect to Plan Years beginning on or after January 1, 1989 to
match a Participant's Employee Pre-Tax Matched Contributions
as provided in Section 3.7(a). Company Matching
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<PAGE> 10
Contributions shall be subject to the vesting provisions of
Section 5.3 of the Plan.
(e) The "Company Profit Sharing Stock Contribution Account" means
that account established for the benefit of a Participant to
reflect Company Profit Sharing Stock Contributions. "Company
Profit Sharing Stock Contributions" are the contributions made
by an Employer with respect to Plan Years beginning on or
after January 1, 1993 as provided in Section 3.7(b). Company
Profit Sharing Stock Contributions shall be subject to the
vesting provisions of Section 5.3 of the Plan.
(f) The "Rollover/Transfer Account" means that account established
for the benefit of a Participant to reflect Rollover
Contributions made pursuant to Section 3.13 and/or Asset
Transfers made pursuant to Section 3.14. A Participant's
Rollover/Transfer Account shall be fully vested at all times.
(g) The "Participant After-Tax Contribution Account" means that
account established for the benefit of a Participant to
reflect the Participant's voluntary non-deferred, after-tax
contributions made to the Plan prior to January 1, 1989.
Effective January 1, 1989, Employee after-tax contributions
shall not be permitted to be made to the Plan. A Participant's
After-Tax Contribution Account shall be fully vested at all
times.
(h) The "Pre-1989 Employer Matching Contribution Account" means
that account established for the benefit of a Participant to
reflect "Employer Matching Contributions" (as defined in the
Prior Plan) made on behalf of a Participant prior to January
1, 1986, and "Non-elective Employer Contributions" (as defined
in the Prior Plan) made on behalf of a Participant after
January 1, 1986 and before January 1, 1989. A Participant's
Pre-1989 Employer Matching Contribution Account shall be fully
vested at all times.
The Committee shall have the authority to establish or maintain such other
sub-accounts as may be deemed necessary for the purpose of proper
administration.
Section 1.2 "Affiliated Employer" means the Employer and any member of a control
group which includes the Employer, as contemplated by Section 414(b), (c), (m),
(n) and/or (o) of the Code and the Regulations issued thereunder.
Section 1.3 "Annual Compensation" means the Participant's remuneration from the
Employer for the Plan Year, including wages, salary, overtime pay, marketing
incentive
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<PAGE> 11
compensation, and all elective contributions made by the Employer on behalf of
the Employee but which are not includable in the Employee's gross income for
federal income tax purposes (under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code), but shall exclude bonuses, awards, prizes, other special payments,
and any other form of compensation not specifically identified above, and shall
also exclude indirect payments such as contributions made by the Employer to
this or any other profit sharing plan, pension plan, welfare plan, group
insurance plan, etc. maintained by the Employer, whether such plan is qualified
or nonqualified. Notwithstanding the foregoing, the Employer may elect to use
any method of determining Annual Compensation for any purpose under the Plan,
including nondiscrimination testing, provided that such method is permissible
under Regulations issued by the Secretary.
For purposes of determining the amount a Participant may elect to contribute to
the Plan as a Pay Deferral, only Annual Compensation paid while the Participant
participates in the Plan shall be considered. For purposes of determining the
amount that a Participant who is employed as an annuity or mutual fund
wholesaler may elect to contribute to the Plan as a Pay Deferral, for Plan Years
beginning on January 1, 1994, Annual Compensation shall be limited to $90,000,
and for Plan Years beginning on or after January 1, 1995, Annual Compensation
shall be limited to an amount equal to the Code Section 402(g) annual Elective
Deferral limit (as indexed) divided by ten percent (10%).
For Plan Years beginning on or after January 1, 1989, the Annual Compensation of
any Employee taken into account under the Plan for any Plan Year shall not
exceed $200,000, as adjusted under Section 415(d) of the Code. For Plan Years
beginning on or after January 1, 1994, the Annual Compensation of any Employee
taken into account under the Plan for any Plan Year shall not exceed $150,000,
as adjusted under the Code. In the case of a Participant who is a member of the
family of: (i) a 5% owner or (ii) a Highly Compensated Employee in the group
consisting of the 10 Highly Compensated Employees paid the greatest Annual
Compensation during such Plan Year, each as determined under Section 414(q)(6)
of the Code, the Participant's Annual Compensation shall include any Annual
Compensation received from the Employer by such Participant's spouse and any
lineal descendants of the Participant who have not attained age 19 before the
close of such Plan Year.
Section 1.4 "Annuity Starting Date" means the first day of the first period for
which an amount is received or receivable as an annuity, or, in the case of a
benefit not payable in the form of an annuity, the first day on which all events
have occurred which entitle the Participant to such benefit.
Section 1.5 "Actual Contribution Percentage" means a ratio (expressed as a
percentage) of the amount of Matching Contributions paid to the Plan by or on
behalf of each Participant for the Plan Year to such Participant's Annual
Compensation for such Plan
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<PAGE> 12
Year. For purposes of the foregoing an Employer may elect, under Regulations
issued by the Secretary, to take into account any other contributions under the
Plan or any other plan of the Employer. Employee contributions shall be taken
into account for the Plan Year in which such contribution is made. Employer
contributions shall be taken into account if allocated as of the end of the Plan
Year and made within twelve (12) months thereafter. Actual Contribution
Percentages should be rounded to the nearest one hundredth of one percent
(1/100%).
Section 1.6 "Average Contribution Percentage" means the average (expressed as a
percentage) of the Actual Contribution Percentages of a specified group of
Participants. Average Contribution Percentages shall be rounded to the nearest
one hundredth of one percent (1/100%).
Section 1.7 "Actual Deferral Percentage" means a ratio (expressed as a
percentage) of the amount of Pay Deferrals made on behalf of each Participant
for the Plan Year to such Participant's Annual Compensation for such Plan Year.
For purposes of the foregoing an Employer may elect, under Regulations issued by
the Secretary, to take into account as a Pay Deferral on behalf of a Participant
any Qualified Nonelective Contributions. Employee contributions shall be taken
into account for the Plan Year in which such contribution is made. Employer
contributions shall be taken into account if allocated as of the end of the Plan
Year and made within twelve (12) months thereafter. Actual Deferral Percentages
should be rounded to the nearest one hundredth of one percent (1/100%).
Section 1.8 "Average Deferral Percentage" means the average (expressed as a
percentage) of the Actual Deferral Percentages of a specified group of
Participants. Average Deferral Percentages shall be rounded to the nearest one
hundredth of one percent (1/100%).
Section 1.9 "Beneficiary" means (i) with respect to a married Participant, such
Participant's Eligible Spouse or such other Beneficiary designated in accordance
with the provisions of Section 7.6(b), and (ii) with respect to an unmarried
Participant, any individual, trust or other entity designated by a Participant
on a form supplied by the Plan Administrator to receive benefits payable
hereunder upon the Participant's death. In the event benefits become payable
upon the death of a Participant and no Beneficiary has been properly designated
as above provided, or if the designated Beneficiary shall have predeceased him,
such benefits shall be payable in full to a beneficiary (or beneficiaries)
selected in the following order: (i) the surviving spouse of the Participant;
(ii) if the Participant dies without a spouse, to the Participant's children pro
rata; (iii) if no surviving spouse or children, to the Participant's parents, to
the Participant's brothers and sisters pro rata; and (iv) if no surviving
relatives as set forth above, to the Participant's estate.
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Section 1.10 "Break in Service" means each Computation Period during which an
Employee fails to be credited with more than 500 Hours of Service; provided,
however, that an Employee shall not be charged with a Break in Service under
this Section 1.9 if he fails to complete more than 500 Hours of Service in a
Computation Period due to Qualified Leave of Absence.
Section 1.11 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
Section 1.12 "Company" means SunAmerica Inc. and its successors and assigns
which adopt the Plan in writing.
Section 1.13 "Company Stock" means the common stock of SunAmerica Inc., $1.00
par value per share, and any securities substituted for such stock by way of
recapitalization, reorganization, merger, or consolidation.
Section 1.14 "Computation Period" means, for the purposes of vesting and
eligibility, the twelve (12) consecutive month period beginning on the
Employee's Employment Commencement Date or the anniversary of the Employee's
Employment Commencement Date.
Section 1.15 "Covered Employment Classification" means the class or classes of
Employees eligible to participate in this Plan, and shall be limited to all
Employees on the active employment rolls of the Employer on or after the
Effective Date except for (i) Employees covered by a collective bargaining
agreement pursuant to which retirement benefits were subject to good faith
bargaining (unless such agreement provides for coverage under the Plan), (ii)
leased Employees as defined in Section 414(n) of the Code, (iii) Employees hired
on or after April 1, 1993, who are not employed as full-time Employees scheduled
to work a minimum of thirty-five (35) hours per week and (iv) Employees hired to
work on a temporary basis. A part-time Employee who is hired prior to April 1,
1993 is eligible to continue participating in the Plan on or after April 1, 1993
provided such part-time Employee is regularly scheduled to work a minimum of
twenty (20) hours per week and is not Employed on a temporary basis.
Section 1.16 "Effective Date" means, when referring to the adoption of the Plan,
July 1, 1982, and when referring to this amendment and restatement of the Plan,
January 1, 1989.
Section 1.17 "Elective Deferral" means, with respect to any taxable year of an
Employee, the sum of: (i) any elective Pay Deferral or contribution to any other
cash or deferred arrangement (as defined in Section 401(k) of the Code) in lieu
of receipt of such amount as compensation; (ii) any elective SEP contributions
under Section 402(h) of the Code; and (iii) any salary reduction contribution to
a Code Section 403(b) annuity.
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Section 1.18 "Eligible Employee" shall mean an Employee who is directly or
indirectly eligible to have Pay Deferrals made on his behalf to the Plan for all
or a portion of the Plan Year. An Employee will not cease to be an Eligible
Employee merely because he is suspended from making Pay Deferrals due to a
withdrawal of contributions, because he elects not to participate (other than an
initial, irrevocable election never to participate in any cash or deferred
arrangement maintained by any Employer) , or because he is prevented from making
such Pay Deferrals by operation of Section 415 of the Code.
Section 1.19 "Eligible Spouse" means the spouse to whom a Participant is married
on the earlier of the Participant's Annuity Starting Date or the date of the
Participant's death, provided, however, that in the event a qualified domestic
relations order as defined in Section 414(p) of the Code provides that a
Participant and his spouse or former spouse are to be treated as having been
married on the Annuity Starting Date, such Participant and his spouse or former
spouse shall be so treated for purposes of this Plan.
Section 1.20 "Employee" shall mean any person who is in the employ of an
Employer. In addition, the term Employee shall include leased employees within
the meaning of Section 414(n)(2) of the Code unless (i) such leased employees
constitute less than twenty percent (20%) of the Employer's non-highly
compensated work force within the meaning of Section 414(n)(5)(C)(ii) of the
Code, and (ii) such leased employees are covered by a plan described in Section
414(n)(5) of the Code, in which event such leased employees shall not be
considered Employees for purposes of this Plan. Leased employees shall not be
eligible to participate in the Plan.
Section 1.21 "Employer" means the Company and any Affiliated Employer which is
authorized by the Company to participate herein and which adopts the Plan for
the exclusive benefit of its Employees, in accordance with any conditions
required by the Company. The authorized Employers hereunder, the class of
Employees of such Employers eligible to participate in the Plan, and the date on
which such Employer's authorized participation in this Plan began are set forth
in Schedule A hereto.
Section 1.22 "Employment" means service as an Employee of an Employer. The term
"Reemployment" means Employment following a period of severance. The terms
"Employed" and "Reemployed" shall be used in the same sense as the terms
Employment and Reemployment, respectively.
Section 1.23 "Employment Commencement Date" means the date on which the Employee
first performs an Hour of Service.
Section 1.24 "Entry Date" means the first day of the month coincident with or
next following the completion of three (3) Months of Service, as is more fully
provided in Section 1.34 and Article II.
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<PAGE> 15
Section 1.25 "ERISA" means the Employee Retirement Income Security Act of 1974
as amended and in force from time to time.
Section 1.26 "Excess Aggregate Contributions" means with respect to any Plan
Year, the aggregate amount of Matching Contributions (or any other contribution
taken into account for purposes of Section 3.8 of the Plan) on behalf of a
Highly Compensated Employee for such Plan Year, to the extent such amount
exceeds the maximum permissible amount of such contributions under the
limitations of Section 3.8 (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of their Actual Contribution
Percentages, beginning with the highest of such percentages).
Section 1.27 "Excess Contributions" means with respect to any Plan Year, the
aggregate Employer contributions paid to the Plan as a Pay Deferral (or any
other contribution taken into account for purposes of Section 3.6 of the Plan)
on behalf of a Highly Compensated Employee for such Plan Year, to the extent
such amount exceeds the maximum permissible amount of such contributions under
the limitations of Section 3.6 (determined by reducing contributions made on
behalf of Highly Compensated Employee in order of their Actual Deferral
Percentages, beginning with the highest of such percentages).
Section 1.28 "Family Member" means, with respect to any Highly Compensated
Employee, the (i) spouse, (ii) lineal ascendants, (iii) lineal descendants, or
(iv) spouse of a lineal ascendant or lineal descendant.
Section 1.29 "Fiduciary" means the Named Fiduciaries and other parties
designated as Fiduciaries by such Named Fiduciaries in accordance with the
powers herein provided but only with respect to the specific responsibilities of
each in connection with the Plan and Trust Fund.
Section 1.30 "Forfeiture" means the portion of a Participant's Company Matching
Contribution Account and/or Company Profit Sharing Stock Contribution Account
not vested at the time of the termination of his Employment and which, in
accordance with the provisions of Section 8.2, reverts to the Trust Fund and is
used to reduce the Company Matching Contributions.
Section 1.31 "Fund" or "Trust Fund" means all of the assets of the Plan held by
the Trustee (or any nominee thereof) at any time under the Trust Agreement.
Section 1.32 "Highly Compensated Employee" -
(a) General Definition - Any Employee who, during the relevant
Plan Year or the preceding Plan Year: (i) was, at any time, a five percent (5%)
owner (as defined in Section 416(i)(1) of the Code); (ii) received compensation
from the Employer
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in excess of $75,000.00; (iii) received compensation from the Employer in excess
of $50,000.00 and was in the Top Paid Group of Employees for such Plan Year; or
(iv) was at any time an officer of the Employer and received compensation
greater that 50% of the amount in effect under Code Section 415(b)(1)(A) for
such Plan Year. Applicable compensation levels shall be indexed in accordance
with Regulations issued by the Secretary.
For the purposes of determining Highly Compensated Employees,
each Plan Year the Plan Administrator may elect (i) to make the look-back year
calculation for a determination year on the basis of the calendar year ending
with or within the applicable determination year as provided in Regulation
Section l.414(q)-lT, Q&A 14(b), provided that such election is applicable for
such Plan Year to all qualified plans maintained by the Company, and (ii) to
apply the simplified method for determining Highly Compensated Employees as
provided in Code Section 414(q)(12)
(b) Certain Current Year Exclusions - In applying the
foregoing subparagraph (a) with respect to the current Plan Year, any Employee
not described in (ii), (iii) or (iv) above for the preceding Plan Year (without
regard to this sentence) shall not be treated as described in (ii), (iii) or
(iv) for the current Plan Year unless such Employee is among the one hundred
(100) Employees receiving the greatest compensation from the Employer for the
current Plan Year.
(c) Determination of Officers - For purposes of applying (iv)
of Subparagraph (a) above, no more than fifty (50) Employees, or, if less, the
greater of three (3) Employees or ten percent (10%) of all Employees, shall be
treated as officers. In addition, if, for any year, no officer of the Employer
is described in subparagraph (a)(iv) above, the officer of the Employer with
the greatest compensation shall be treated as an officer described in
subparagraph (a)(iv) above.
(d) Treatment of Certain Family Members - Any Family Member of
a five percent (5%) owner or of the 10 Highly Compensated Employees receiving
the greatest compensation from the Employer during the relevant year shall be
aggregated with such 5% owner or Highly Compensated Employee for purposes of
Sections 3.6 and 3.8 of the Plan, in accordance with Regulations issued by the
Secretary.
(e) Compensation - For purposes of this Section of the Plan,
compensation means an individual's compensation as determined under Code Section
415(c)(3), increased by elective contributions under a cafeteria plan (under
Section 125 of the Code), Pay Deferrals (Sections 401(k) and 402(a)(8) of the
Code), and contributions to an SEP (Section 402(h)(1)(B) of the Code), and, in
the case of Employer contributions made pursuant to a salary reduction
agreement, increased by contributions to a tax-sheltered annuity (Section 403(b)
of the Code).
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(f) Top Paid Group - An Employee who is in the top twenty
percent (20%) of Employees when such Employees are ranked on the basis of
compensation (as such term is used for purposes of determining Highly
Compensated Employees) paid with respect to such Plan Year. For purposes of such
determination the following Employees shall be excluded:
(i) Employees who have not completed 6 months of service;
(ii) Employees who normally work fewer than 17-1/2 hours
per week;
(iii) Employees who have not attained age 21;
(iv) Employees who normally work not more than 6 months
during any year;
(v) Except to the extent provided in Regulations,
employees who are included in a unit of employees
covered by a collective bargaining agreement between
employee representatives and the Employer; and
(vi) Employees who are nonresident aliens and who receive
no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer which
constitutes income from sources within the United
States (within the meaning of Section 861(a)(3) of
the Code).
Provided, however, that the Employer may elect to apply (i)
through (iv) above by substituting a shorter period of service, smaller number
of hours or months, or lower age, than that specified in (i) through (iv).
(g) Application Order - Subsections (b), (c), (m), (n) and (o)
of Section 414 of the Code shall be applied before applying the foregoing
provisions.
Section 1.33 "Hour of Service" means:
(a) Each hour for which an Employee is paid, or entitled to
payment by the Employer for the performance of duties. Hours under this
paragraph shall be credited to the Employee for the Computation Period or
Periods in which the duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to
payment by the Employer on account of a period of time during which no duties
are performed
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(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), jury duty,
military duty, or Authorized Leave of Absence; provided, however, that under
this paragraph (b):
(i) Subject to Section 5.6, no more than 500 hours of Service
shall be credited for any single continuous period (whether or not such
period occurs in a single computation period) during which the Employee
performs no duties;
(ii) No hours shall be credited if such payment is made or due
under a plan maintained by the Employer solely for purposes of
complying with applicable workmen's compensation, unemployment
insurance or disability insurance laws; and
(iii) No hours shall be credited for a payment which solely
reimburses an Employee for medical or medically related expenses
incurred by the Employee.
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer. These hours shall be
credited to the Employee for the Computation Period to which the award or
agreement pertains rather than to the period in which the award, agreement or
payment is made. The same Hours of Service shall not be credited under
paragraphs (a) or (b), as the case may be, and this paragraph (c). Crediting of
hours for backpay awarded or agreed to with respect to periods described in
paragraph (b) shall be subject to the limitations of that paragraph.
(d) Hours of Service credited under the Plan shall be
calculated and credited subject to the rules and restrictions set forth in
Department of Labor Regulations Section 2530.200b-2(b), (c) and (f) which are
incorporated herein by reference.
(e) Where the Employer maintains the plan of a predecessor
employer, Hours of Service for such predecessor employer shall be treated as
Hours of Service for the Employer.
(f) Solely for purposes of determining whether a Break in
Service has occurred for participation and vesting purposes, an individual who
is absent from work for maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been credited to such individual
but for such absence, or if such hours cannot be determined, then eight (8)
Hours of Service per day of such absence; provided, that the credit for Hours of
Service pursuant to this paragraph shall not exceed 501 Hours of Service for
each absence. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (i) by reason of the pregnancy of the
individual, (ii) by reason of a birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection with the
adoption of such child by
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<PAGE> 19
such individual, or (iv) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited in the Computation Period in
which the absence begins if the crediting is necessary to prevent a Break in
Service in that period; otherwise, such hours shall be credited in the following
Computation Period.
Section 1.34 "Investment Manager" means a Fiduciary appointed by the Employer
who: (a) has the power to manage, acquire, or dispose of any asset of the Plan;
(b) is (i) a registered investment advisor under the Investment Advisors Act of
1940 or (ii) a bank, as defined in that Act or (iii) an insurance company
qualified to perform services described in clause (a) under the laws of more
than one state; and (c) has acknowledged in writing that he is a Fiduciary with
respect to the Plan.
Section 1.35 "Matching Contribution" means Basic Matching Contributions and
Company Profit Sharing Stock Contributions, if any, made by the Employer as
provided in Section 3.7, plus any other Employer contribution made on account of
any Employee contribution. Matching Contributions shall be credited to a
Participant's Company Profit Sharing Stock Contribution Account or Basic
Matching Contribution Account, as applicable.
Section 1.36 "Month of Service" means, for purposes of determining eligibility
to participate in the Plan, a complete calendar month, beginning with the first
available workday of the calendar month during which the Employee performs
services for the Employer.
Section 1.37 "Named Fiduciaries" means the Company, the Retirement Plan
Committee and the Trustee.
Section 1.38 "Non-Highly Compensated Employee" means an Employee who is neither
a Highly Compensated Employee nor a Family Member.
Section 1.39 "Normal Retirement Date" means the date an individual attains age
65 (his "Normal Retirement Age").
Section 1.40 "Participant" means an Employee who meets the eligibility
requirements as specified in Section 2.1, who has taken all of the steps
required by Article II, and who maintains an Account in the Plan.
Section 1.41 "Pay Deferrals" means, for each Plan Year, the Basic Elective
Contributions and Voluntary Elective Contributions made by the Employer for such
Plan Year pursuant to a deferral election by a Participant. Under circumstances
specified by the Secretary in Regulations and as otherwise provided in the Plan,
certain other contributions may be
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treated as Pay Deferrals for purposes of Section 3.6 of the Plan, and Pay
Deferrals may be treated as other than Pay Deferrals for purposes of Section 3.8
of the Plan.
Section 1.42 "Plan" means the SunAmerica Profit Sharing and Retirement Plan as
set forth in this document and all subsequent amendments.
Section 1.43 "Prior Plan" means the Plan as in effect prior to January 1, 1989.
Section 1.44 "Plan Administrator" means "The Retirement Plan Committee", the
members of which are appointed by the Company to administer the Plan.
Section 1.45 "Plan Year" means the 12 consecutive month period used for
maintaining the financial records of the Plan, which begins on each January 1
and ends on each December 31. The first Plan Year was a short Plan Year,
beginning on July 1, 1982 and ending on December 31, 1982.
Section 1.46 "Qualified Joint and Survivor Annuity" means, for a Participant who
is married on his Annuity Starting Date, an annuity for the life of a
Participant with a contingent survivor annuity for the life of such
Participant's spouse which is not less than one-half, nor greater than, the
amount of the annuity payable during the joint lives of the Participant and such
Participant's spouse. Unless specifically elected to the contrary, the
contingent spousal annuity shall be 50% of the level of benefits payable during
the joint lives of the Participant and his spouse. A Qualified Joint and
Survivor Annuity for a Participant who is not married on his Annuity Starting
Date shall be a straight life annuity for his life only, with no survivorship
feature. Such Qualified Joint and Survivor Annuity shall be the actuarial
equivalent of any other form of payment available under this Plan.
Section 1.47 "Qualified Leave of Absence" means a leave of absence during any
Computation Period in which the Employee completes less than 501 Hours of
Service for these reasons:
(a) temporary layoff;
(b) leave of absence approved by the Company;
(c) Service in the Armed Forces of the United States for a period
of three years or less, provided the Employee applies for
reemployment within the time and under the conditions provided
by law; or
(d) Total Disability.
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Section 1.48 "Qualified Nonelective Contribution" means any Employer
contributions which are fully vested and nonforfeitable when allocated to
Participants' accounts, which Participants may not elect to receive in cash
until distributed from the Plan, and which meet the Special Distribution
Restrictions.
Section 1.49 "Qualified Joint and Survivor Annuity" means an annuity based on
the Participant's Vested Interest for the life of the Participant with a
survivor annuity for the life of such Participant's Eligible Spouse equal to
either fifty percent (50%) or one hundred percent (100%) of the amount of the
annuity payable during the joint lives of the Participant and his Eligible
Spouse, and which is the actuarial equivalent of a single annuity for the life
of the Participant (or any annuity in a form having the effect of such an
annuity). Unless otherwise specifically elected to the contrary, the contingent
survivor annuity shall be 50% of the amount of the annuity which is payable
during the joint lives of the Participant and his spouse.
Section 1.50 "Qualified Preretirement Survivor Annuity" means an annuity for the
life of an Eligible Spouse, the actuarial equivalent of which is one hundred
percent (100%) of the Participant's Vested Interest as of his date of death.
Section 1.51 "Reemployment Commencement Date" means the first date on which the
Employee performs an Hour of Service following a period of severance.
Section 1.52 "Secretary" means the Secretary of the Treasury.
Section 1.53 "Special Distribution Restrictions" means that the applicable fully
vested amount is not distributable to Participants or their Beneficiary(ies)
merely by reason of any stated period of participation or the lapse of any fixed
number of years, nor earlier than the earliest of:
(i) Separation from Employment by the Participant;
(ii) Death of the Participant;
(iii) Total Disability of the Participant;
(iv) Attainment of age 59-1/2 by the Participant;
(v) Except as limited by subsection (vii) below,
termination of the Plan without establishment of a
successor plan;
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<PAGE> 22
(vi) Hardship of the Participant; but only if and to the
extent permitted by the Code and Regulations issued
thereunder and the provisions of section 6.1 hereof;
(vii) With respect to Pay Deferrals (and earnings thereon),
and Qualified Nonelective Contributions or Matching
Contributions (and earnings thereon) taken into
account for purposes of Section 3.6, upon (A)
termination of the Plan; (B) sale of substantially
all assets used by the Employer in the trade or
business in which the Participant is Employed; or (C)
the sale of an Employer's interest in a subsidiary;
provided, however, that such distributions may only
be made if and to the extent permitted by the Code
and Regulations issued thereunder.
Section 1.54 "Trust Agreement" means the agreement entered into between the
Company and the Trustee which provides for the holding and investment of the
assets of the Plan.
Section 1.55 "Trust (or Trust Fund)" means the fund maintained under the Plan in
accordance with the terms of the Trust Agreement, as amended from time to time,
which constitutes a part of the Plan.
Section 1.56 "Trustee" means the person, or entity (or persons or entities)
named in the Trust Agreement for the Plan and any successor (or successors)
appointed by the Company to serve as Trustee.
Section 1.57 "Total Disability" means a Participant's permanent and total
incapacity to engage in any substantial gainful employment for the Employer for
physical or mental reasons, medically determined, which can be expected to be of
long continued and indefinite duration. Total Disability shall be deemed to
exist only when a written application has been filed with the Plan Administrator
by or on behalf of such Participant, and when such Total Disability is certified
to the Plan Administrator by a licensed physician approved by the Plan
Administrator.
Section 1.58 "Valuation Date" means the date which shall be used hereunder for
purposes of determining account values. Under Article IV, the Investment Funds
shall be valued on a daily basis. The "Annual Valuation Date" shall be December
31 of each Plan Year.
Section 1.59 "Vesting Service" means the number of Years of Service completed by
the Employee (regardless of employment classification), subject to the Break in
Service rules of Section 5.6.
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<PAGE> 23
Section 1.60 "Vested Interest" means the portion of the Participant's Account
which under the terms hereof is nonforfeitable.
Section 1.61 "Year of Service" means a 12-consecutive month period during which
the Employee is credited with not less than 1,000 Hours of Service.
Section 1.62 "Construction" - The singular form of any word shall include the
plural, and the masculine gender shall include the feminine, wherever necessary
for the proper interpretation of this Plan.
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<PAGE> 24
ARTICLE II
ELIGIBILITY TO PARTICIPATE
Section 2.1 Eligibility To Participate. For Plan Years beginning on or after
January 1, 1989, each Employee who is employed in a Covered Employment
Classification shall be eligible to become a Participant for all purposes under
the Plan on the Entry Date coincident with or next following the completion of
three (3) Months of Service, provided such individual is actively employed in a
Covered Employment Classification on such Entry Date. Participation shall be
subject to the rules of Section 2.7.
Section 2.2 Break In Service Before Eligibility To Participate. An Employee who
separates from Employment but does not incur a one-year Break In Service prior
to becoming eligible to participate shall have his pre-break and post-break
service aggregated for the purposes of determining eligibility under Section
2.1. An Employee who incurs a one-year Break In Service prior to becoming
eligible to participate must satisfy the eligibility requirements of Section 2.1
in the same manner as a new Employee in order to participate in the Plan.
Section 2.3 Reparticipation After A Break In Service. An Employee who incurs a
Break in Service after becoming eligible to participate in this Plan shall again
become eligible to participate upon the date he first performs an Hour of
Service subsequent to the date he incurs a Break in Service.
Section 2.4 Covered Employment Classification Requirement. An Employee who is
not employed in a Covered Employment Classification shall not be eligible to
participate in this Plan during the period when he is not Employed in a Covered
Employment Classification.
Section 2.5 Reparticipation On Reentry To Covered Employment Classification. An
Employee who was a Participant in this Plan and who thereafter is excluded from
participating in this Plan in accordance with Section 2.4 of this Article and
who is subsequently Re-employed in a Covered Employment Classification, shall be
immediately eligible to become a Participant on the date the Employee is
Reemployed in a Covered Employment Classification.
Section 2.6 Notice of Eligibility. The Plan Administrator shall notify every
Employee of the Plan's eligibility requirements and shall give every Employee
who is Employed In a Covered Employment Classification an opportunity to become
a Participant.
Section 2.7 Employee Election To Participate. To become a Participant, an
Employee must meet the requirements of this Article, and at least 30 days prior
to the Entry Date on
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which the Employee wishes to become a Participant or within such shorter period
of time as permitted by the Plan Administrator, the Employee must execute an
application specifying a rate of contribution as described in Article III. The
Employee must also make an investment election as described in Article IV
hereof. No Employee shall become a Participant until the Employee has met the
above requirements.
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ARTICLE III
CONTRIBUTIONS
Section 3.1 Funding Policy. The provisions of this Plan shall be deemed to be
the stated written procedure for carrying out the funding policy of this Plan.
All contributions shall be paid over to the Trustee and shall be invested by the
Trustee in accordance with the Plan and the Trust Agreement.
Section 3.2 Pre-Tax Matched Contributions. Each Participant may elect to make
Pre-Tax Matched Contributions in any whole percentage up to a maximum of 4%
(prior to February 1, 1994, the maximum was 6%) of the Participant's Annual
Compensation while the Participant is eligible to make such contributions in
accordance with the provisions of this Plan. No Participant may make any Pre-Tax
Matched Contributions subsequent to the Participant's termination of Employment
with the Employer.
Section 3.3 Pre-Tax Unmatched Contributions. For Plan Years beginning on or
after January 1, 1989, each Participant who is making the maximum Pre-Tax
Matched Contribution permissible under Section 3.2 may elect to make Pre-Tax
Unmatched Contributions in any whole percentage of his Annual Compensation up to
a maximum of 6% (prior to February 1, 1994, the maximum was 4%), while he is
eligible to make such contributions in accordance with the provisions of this
Plan. No Participant may make any Pre-Tax Unmatched Contributions subsequent to
the Participant's termination of Employment with the Employer.
Section 3.4 Payroll Deduction; Change or Suspension of Pay Deferral
Contributions.
(a) Payroll Deduction. All Participant contributions shall be
made by means of payroll deductions. The amounts, so deducted, shall be paid
monthly, or more frequently as permitted by the Company, to the Trustee by the
Plan Administrator and shall be credited to the Participant's appropriate
Account in accordance with Section 1.1.
(b) Change in Rate of Contribution. A Participant who has
elected to make contributions at a specified rate of Annual Compensation may
elect to change such rate of contribution one (1) time per calendar quarter,
effective for the first pay period which begins in the following calendar
quarter, upon not less than fifteen (15) days written notice to the Plan
Administrator; provided, however, that the Plan Administrator may, in its sole
discretion, (i) permit such elections to become effective upon such shorter
notice period as it deems adequate for this purpose, and/or (ii) permit such
elections to become effective as of such other date(s) as it deems appropriate
under the circumstances.
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(c) Suspension of Contributions. A Participant may, at any
time by written notice to the Plan Administrator, elect to completely suspend
all of his contributions hereunder. Any such election shall be effective as soon
as is administratively practicable, or as of such later date as the Participant
shall specify in such written notice. A Participant who elects to completely
suspend all contributions may elect to resume any or all such contributions as
of the first day of a payroll period in a calendar quarter which begins after a
suspension period of six months, upon filing a new written contribution election
with the Plan Administrator not fewer than thirty (30) days prior to such
effective date; provided however, that the Plan Administrator may, in its sole
discretion, permit such shorter notice period as it deems adequate for this
purpose.
Section 3.5 Limitation of Elective Deferrals; Return of Contributions.
Notwithstanding any other provision of this Plan, in no event shall the Elective
Deferral(s) of any individual with respect to any taxable year of such
individual exceed seven thousand dollars ($7,000.00), or such adjusted amount as
is established by the Secretary from time to time in accordance with cost of
living adjustments under Code Section 415(d), for all plans in which such
individual is a participant, whether or not maintained by the Employer. In the
event such Elective Deferrals of a Participant or former Participant exceed such
limitation for any taxable year of such Participant, such Participant or former
Participant shall, not later than March 1 following the close of, and with
respect to, the taxable year in which such excess Elective Deferrals were made,
(i) notify the Plan Administrator in writing of the Elective Deferrals made
under any plan other than this Plan, (ii) allocate in writing such excess
Elective Deferral between or among such other plans and this Plan, and (iii)
state in writing that if such excess Elective Deferral allocable to the Plan is
not distributed, the deferral limitations of Section 402(g) of the Code will be
exceeded for the Participant's taxable year with respect to which such Elective
Deferral was made. Upon such notification the Plan Administrator shall
distribute any excess Elective Deferral (and any income allocable thereto) to
the relevant Participant not later than April 15 of the calendar year following
the close of the Participant's taxable year with respect to which such excess
Elective Deferral was made. Solely for purposes of the preceding sentence, the
income deemed allocable to any such excess Elective Deferral shall be determined
in accordance with Regulations issued by the Secretary. The amount of excess
Elective Deferrals to be distributed for a taxable year shall be reduced by any
Excess Contributions previously distributed to the Participant during the Plan
Year beginning in such taxable year.
Section 3.6 Limitation on Pay Deferral Contributions.
(a) Limitation. Notwithstanding any provision in the Plan to
the contrary, the Average Deferral Percentage for Highly Compensated Employees
for any Plan Year shall not exceed the greater of (i) or (ii) below:
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(i) The Average Deferral Percentage of all other Eligible
Employees who are Non-Highly Compensated Employees, multiplied by 1.25,
or
(ii) The Average Deferral Percentage of all other Eligible
Employees who are Non-Highly Compensated Employees, multiplied by 200%,
provided, however, that in this case the Average Deferral Percentage of
the Highly Compensated Employees shall not exceed the Average Deferral
Percentage of the Non-Highly Compensated Employees by more than two (2)
percentage points, or such lesser amount as may be required by
Regulations issued by the Secretary to prevent the multiple use of this
alternative limitation with respect to any Employee who is a Highly
Compensated Employee.
(b) Special Adjustments. For purposes of this Section, the
following special rules shall apply:
(i) If any Highly Compensated Employee is eligible to have Pay
Deferrals (or other contributions taken into account in determining
Average Deferral Percentages) allocated to his account under two or
more plans or arrangements described in Code Section 401(k) maintained
by the Company or an Employer, all such Pay Deferrals (and other such
contributions) shall be aggregated as if made under a single plan or
arrangement.
(ii) In the case of a Highly Compensated Employee who is
either 5% owner or one of the ten most Highly Compensated Employees
(and is thereby subject to the Family Member aggregation rules of
Section 414(q)(6) of the Code), the Actual Deferral Percentage for the
family group (which is treated as one Highly Compensated Employee) is
determined by combining the Pay Deferrals (or other contributions
treated as Pay Deferrals) and Annual Compensation of all Family
Members. Except to the extent taken into account in the preceding
sentence, the Pay Deferrals (or other contributions treated as Pay
Deferrals) and Annual Compensation of all Family Members shall be
disregarded in determining the Actual Deferral Percentages for the
groups of Highly Compensated Employees and Non-Highly Compensated
Employees.
(iii) If two (2) or more plans of the Company are treated as
one (1) plan for purposes of Section 410(b) and/or Section 401(a)(4) of
the Code because such plans would not otherwise satisfy such Section
410(b) and/or Section 401(a)(4), such plans shall be treated as one (1)
plan for purposes of this Section. If a Highly Compensated Employee
participates in two (2) or more plans of the Company to which such
contributions are made by or on behalf of such Highly Compensated
Employee, all such contributions shall be aggregated for purposes of
this Section.
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(c) Adjustment of Pay Deferrals. If during a Plan Year the
Plan Administrator determines that there is a likelihood that the Average
Deferral Percentage of the Highly Compensated Employees will exceed the
limitation specified in subsection (a), then the Plan Administrator may
prospectively reduce the deferrals of the Highly Compensated Employees, by such
amount and beginning as of such pay period during the Plan Year as is deemed
necessary by the Plan Administrator in its sole discretion to prevent the
limitation in subsection (a) from being exceeded for the Plan Year. The Plan
Administrator may terminate (in whole or in part) any reduction of deferrals
under this subsection which is no longer necessary to prevent the limitation
specified in subsection (a) from being exceeded for the Plan Year. Whenever
necessary during the Plan Year, the Plan Administrator may institute further
reductions of deferrals, or reinstate reductions of deferrals, to the extent
required to prevent the limitation in subsection (a) from being exceeded. Any
adjustment in Participant Pay Deferrals made pursuant to this subsection shall,
to the extent possible, reduce the deferral of each affected Participant by an
identical percentage of Annual Compensation.
(d) Distribution of Excess Contributions and Income. If the
Pay Deferral feature of the Plan fails the limitations of subsection (a) for any
Plan Year, then except as may be otherwise provided in this Section and
notwithstanding any other provision of the Plan, any Excess Contributions for
such Plan Year (and net any income allocable thereto) shall be distributed to
the Highly Compensated Employees and, where applicable, Family Members, not
later than two and one-half (2-1/2) months following the Plan Year with respect
to which such Excess Contributions were made. Alternatively, any Excess
Contributions may be distributed not later than the end of the Plan Year
following the Plan Year with respect to which to Excess Contributions were made,
provided the Employer pays any applicable excise tax on such distribution. The
Plan may use any reasonable method for computing the income allocable to Excess
Contributions, provided that the method does not violate Section 401(a)(4) of
the Code, is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income to Participants' Accounts. The amount of Excess Contributions
to be distributed with respect to an Employee for a Plan Year shall be reduced
by any excess Elective Deferrals previously distributed during the taxable year
ending in the same Plan Year.
Any such distribution of Excess Contributions and income
thereon shall be made to Highly Compensated Employees on the basis of the
respective portions of the total Excess Contributions attributable to each such
Employee. Excess Contributions of Participants which are subject to the Family
Member aggregation rules shall be allocated among the Family Members in
proportion to the Pay Deferrals (or other contributions taken in account in
determining Average Deferral Percentages) of each Family Member which are
required to be aggregated. Any such distribution may and shall be made without
regard to any other provision of this Plan restricting distributions. Any such
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Excess Contributions distributed to a Highly Compensated Employee or Family
Member (with earnings thereon) shall be distributed pro rata from any Account
which contains contributions used in computing Average Deferral Percentages,
based on contributions made to such Accounts during such Plan Year.
(e) Determinations By Plan Administrator. Notwithstanding the
foregoing provisions of this Section, any determination required by this Section
shall be made by the Plan Administrator, and the determination by such Plan
Administrator of the method of compliance with subsection (a) and reduction of
deferrals in excess of that permitted by subsection (a), in accordance with
subsection (c), and the determination of the amount of any Excess Contribution
to be distributed pursuant to subsection (d), shall be final, binding, and
conclusive as to all Participants, former Participants, Beneficiaries, and any
other person or entity associated with or benefiting from this Plan.
(f) Multiple Use Limitation. In the event that the multiple
use limitation as set forth in Section l.401(m)-2(b) of the Regulations applies
with respect to any Highly Compensated Employee, the Actual Deferral Percentages
of each Highly Compensated Employee shall be reduced (beginning with such Highly
Compensated Employee whose Actual Deferral Percentage is highest) so that the
multiple use limitation is not exceeded. The amount by which each Highly
Compensated Employee's Actual Deferral Percentage is reduced shall be treated as
an Excess Contribution as provided under Section 3.6(d).
(g) Priority of Application of Sections. Section 3.5 shall be
applied before this Section; provided, however, that except to the extent
provided in Regulations, any Elective Deferral distributed under Section 3.5
shall be deemed not to have been distributed for purposes of this Section. This
Section shall be applied before Section 3.8 of the Plan.
Section 3.7 Matching Contributions.
(a) Company Matching Contributions. The Employer shall make
monthly Company Matching Contributions to the Trustee, which shall be credited
to each eligible Participant's Company Matching Contribution Account. The amount
of the Company Matching Contribution to be made under this Section 3.7 for any
particular month with respect to any particular Participant shall be equal to
$1.00 for each $1.00 of such Participant's Employee Pre-Tax Matched
Contributions; provided, however, that no such Company Matching Contribution
shall be made with respect to any individual who is not actively Employed by an
Employer on the last day of the month with respect to which such Company
Matching Contribution would otherwise be required. Notwithstanding the
foregoing, the Employer may, in its sole discretion, elect to make Company
Matching Contributions more frequently than monthly, in which event such
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Company Matching Contributions shall be made with respect to any individual who
is actively Employed by an Employer on the date such contribution was actually
made. Company Matching Contributions shall be subject to the vesting provisions
set forth in Section 5.3(b).
(b) Company Profit Sharing Stock Contributions. In accordance
with the terms of this subsection, for Plan Years beginning on or after January
1, 1993, the Company, in its sole discretion, may annually make Company Profit
Sharing Stock Contribution to the Trust, which may be made conditional upon the
Company obtaining a pre-determined return-on-equity target (or such other
measure of performance as the Company deems appropriate) . The Company may make
the designated Company Profit Sharing Stock Contribution, if any, by
transferring to the Trustee shares of authorized but unissued Company Stock,
valued at the New York Stock Exchange closing price on the last day of the
payroll period (or next following business day) occurring on or after the
release of the Company's audited financial results for the Company's fiscal year
(the "Stock Valuation Date"), within five (5) business days following the Stock
Valuation Date. Such Company Profit Sharing Stock Contribution for a Plan Year,
if any, shall be allocated on a per capita basis to the Company Profit Sharing
Stock Contribution Account of each Participant who: (i) is actively employed in
good standing on the last day of the Plan Year (or such date the Company Profit
Sharing Stock Contribution is actually made, if earlier), and (ii) has made
Employee Pre-Tax Matched Contributions under the Plan for such a period of time
as designated by the Company; provided, however, the Plan Administrator may, on
a nondiscriminatory basis, waive requirement (i) and/or (ii) above where a
Participant is on a Qualified Leave of Absence, or where applicable hardship
withdrawal restrictions would prevent a Participant from making the required
Employee Pre-Tax Matched Contributions, or in such other circumstances as the
Plan Administrator deems appropriate. Company Profit Sharing Stock
Contributions, if any, shall be subject to the vesting provisions set forth in
Section 5.3(b).
Section 3.8 Limitation on Matching Contributions.
(a) Limitation. Notwithstanding any provision in the Plan to
the contrary, the Average Contribution Percentage for Highly Compensated
Employees for any Plan Year shall not exceed the greater of (i) or (ii) below:
(i) The Average Contribution Percentage of all Employees who
are Non-Highly Compensated Employees, multiplied by 1.25, or
(ii) The Average Contribution Percentage of all Employees who
are Non-Highly Compensated Employees, multiplied by 200%, provided,
however, that in this case the Average Contribution Percentage of the
Highly Compensated Employees shall not exceed the Average Contribution
Percentage of the Non-Highly Compensated
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Employees by more than two (2) percent points, or such lesser amount as may be
required by Regulations issued by the Secretary to prevent the multiple use of
this alternative limitation with respect to any Employee who is a Highly
Compensated Employee.
(b) Special Adjustments. For purposes of this Section, the
following special rules shall apply:
(i) If any Highly Compensated Employee is eligible to have
Matching Contributions (or other contributions taken into account in
determining Average Contribution Percentages) allocated to his account
under two or more plans or arrangements described in Code Section
401(m) maintained by the Company or an Employer, all such Matching
Contributions (and other such contributions) shall be aggregated as if
made under a single plan or arrangement.
(ii) In the case of a Highly Compensated Employee who is
either a 5% owner or one of the ten most Highly Compensated Employees
(and is thereby subject to the Family Member aggregation rules of
Section 414(q)(6) of the Code), the Actual Contribution Percentage for
the family group (which is treated as one Highly Compensated Employee)
is determined by combining the Matching Contributions (or other
contributions taken into account in determining the Average
Contribution Percentage) and Annual Compensation of all Family Members.
Except to the extent taken into account in the preceding sentence, the
Matching Contributions (or other contributions taken into account in
determining the Average Contribution Percentage) and Annual
Compensation of all Family Members shall be disregarded in determining
the Actual Contribution Percentages for the groups of Highly
Compensated Employees and Non-Highly Compensated Employees.
(iii) If two (2) or more plans of the Company are treated as
one (1) plan for purposes of Section 410(b) and/or Section 401(a)(4)
of the Code because such plans would not otherwise satisfy such Section
410(b) and/or Section 401(a)(4), such plans shall be treated as one
(1) plan for purposes of this Section. If a Highly Compensated Employee
participates in two (2) or more plans of the Company to which such
contributions by or on behalf of such Highly Compensated Employee are
made, all such contributions shall be aggregated for purposes of this
Section.
(c) Employees Taken Into Account. Each Employee who is
eligible to receive Matching Contributions (or is eligible to receive other
contributions which are taken into account under this Section 3.8) shall be
taken into account as a Highly Compensated Employee or Non-Highly Compensated
Employee, as applicable, for purposes of this Section, whether or not any such
contributions are made by or on behalf of such Employee.
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<PAGE> 33
(d) Distribution of Excess Aggregate Contributions and Income.
Notwithstanding any other provision of the Plan, any Excess Aggregate
Contributions for such Plan Year (and net any income allocable thereto) shall be
distributed to the Highly Compensated Employees and, where applicable, Family
Members, not later than two and one-half (2 1/2) months following the Plan Year
with respect to which such Excess Aggregate Contributions were made.
Alternatively, any Excess Aggregate Contributions may be distributed not later
than the end of the Plan Year following the Plan Year with respect to which the
Excess Aggregate Contributions were made, provided the Company pays any
applicable excise tax on such distribution. The Plan may use any reasonable
method for computing the income allocable to Excess Aggregate Contributions,
provided that the method does not violate Section 401(a)(4) of the Code, is
used consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year, and is used by the Plan for allocating income
to Participants' Accounts.
Any such distribution of Excess Aggregate Contributions and
income thereon shall be made to Highly Compensated Employees on the basis of the
respective portions of the total Excess Aggregate Contributions attributable to
each such Employee. Excess Aggregate Contributions of Participants which are
subject to the Family Member aggregation rules shall be allocated among the
Family Members in proportion to the Matching Contributions (or other
contributions taken in account in determining Average Contribution Percentages)
of each Family Member which are required to be aggregated. Any such distribution
may and shall be made without regard to any other provision of this Plan
restricting distributions. Any such Excess Aggregate Contributions distributed
to a Highly Compensated Employee or Family Member (with earnings thereon) shall
be distributed pro rata from any Account which contains contributions used in
computing Average Contribution Percentages, based on contributions made to such
Accounts during such Plan Year.
(e) Determinations By Plan Administrator. Notwithstanding the
foregoing provisions of this Section, any determination required by this Section
shall be made by the Plan Administrator, and the determination by such Plan
Administrator of the method of compliance with subsection (a) and the
determination of the amount of any Excess Aggregate Contribution to be
distributed pursuant to subsection (d), shall be final, binding, and conclusive
as to all Participants, former Participants, Beneficiaries, an any other person
or entity associated with or benefiting from this Plan.
(f) Priority of Application of Sections. The provisions of
Section 3.5 shall be applied before Section 3.6, which, in turn, shall be
applied before this Section.
Section 3.9 Company Discretionary Contributions. In addition to any other
Employer contributions made under the Plan, the Employer may, in its sole
discretion, make a Company Discretionary Contribution in the form of a Qualified
Nonelective Contribution
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to the Trust for a Plan Year. The amount of a Company Discretionary Contribution
for a Plan Year, if any, shall be determined annually by the Employer in its
sole discretion. In the event the Employer elects to make a Company
Discretionary Contribution, the Employer shall make such contribution only with
respect to Participants who are Non-Highly Compensated Employees and shall
allocate such contribution in such manner as the Company in its sole discretion
determines among such Non-Highly Compensated Employees.
Section 3.10 Employee After-Tax Contributions. Effective for Plan Years
beginning on or after January 1, 1989, Employee after-tax contributions shall
not be permitted.
Section 3.11 Maximum Allocations.
(a) Notwithstanding anything contained herein to the contrary,
the Annual Addition made to the Account(s) of a Participant for any limitation
year shall not exceed the lesser of $30,000 (or, if greater, one-fourth (1/4) of
the defined benefit dollar limitation determined under Section 415(d) of the
Code for the relevant limitation year) or twenty-five percent (25%) of the
Participant's compensation (as reported on Form W-2 in accordance with
Regulation Section 1.415-2(d)(11)(i)) for the relevant limitation year.
(b) For any Participant in the Plan who is also a Participant
in one or more defined benefit plans (as defined in Section 414(j) of the Code)
maintained by the Employer, the Annual Addition to such Participant's Account
under this Plan during a Plan Year shall be further limited (in addition to the
limitation under (a) above) to the extent necessary to prevent the sum of the
fractions in (1) and (2) below, computed as of the close of the Plan Year, from
exceeding 1.0:
(1) The Projected Annual Benefit (as defined in subsection (d)
below) of the Participant under such defined benefit plans, divided by
the lesser of:
(i) the product of $90,000 (this amount shall be
adjusted automatically in accordance with regulations
promulgated by the Secretary of the Treasury) multiplied by
1.25, or
(ii) the product of 100% of the Participant's Average
Compensation (as defined in subsection (d) below) multiplied
by 1.4; plus
(2) The sum of the Annual Additions to such Participant's
Accounts under this Plan and all other defined contribution plans (as
defined in Section 414(i) of the Code) maintained by the Employer for
such Plan Year and for all Prior Years divided by the sum of the lesser
of the following amounts determined for such Plan Year and all Prior
Years (as defined in subsection (d) below):
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<PAGE> 35
(i) the product of the Dollar Limitation (as defined
in subsection (d) below) in effect for the year multiplied by
1.25, or
(ii) the product of 25% of the Participant's
compensation, within the meaning of Code section 415(c)(3),
for the year multiplied by 1.4.
(c) In the event that a Participant's Annual Addition under
this Plan, when added to the Annual Addition under any other defined
contribution plan or the Projected Annual Benefit under any defined benefit plan
maintained by the Employer, exceeds the limitations specified in Section 3.11(a)
or (b), appropriate reductions in such Annual Addition or Projected Annual
Benefit shall be made in the following order:
(1) First, any defined benefit plan maintained by the
Employer, and
(2) to the extent that additional reductions are still
necessary, any other defined contribution plan maintained by the
Employer, and
(3) to the extent that any additional reductions are still
necessary, this Plan.
(d) For purposes of this Section 3.11, the following
definitions and rules of interpretation shall apply:
(1) The "Annual Addition" of a Participant means the
sum of Employer contributions (excluding, however, any Employer
contribution distributed to a Participant as an Excess Contribution or
an Excess Aggregate Contribution, to the extent such exclusion is
permissible under the Code and Regulations issued by the Secretary),
Forfeitures, Employee contributions (other than any contribution
distributed to the relevant individual to the extent such exclusion is
permissible under the Code and Regulations issued by the Secretary),
contributions to an individual medical benefit account defined in
Section 415(1)(2) of the Code, and any amount described in Section
419(A)(d)(2) of the Code attributable to post-retirement medical
benefit coverage, but shall not include any Rollover Contributions made
pursuant to Section 3.13 or any Asset Transfers made pursuant to
Section 3.14.
(2) "Projected Annual Benefit" means the Annual
Benefit (as defined below) to which a Participant would be entitled
under a defined benefit plan (after giving effect to any limitation on
such benefit contained in such Plan that may be applicable to the
Participant) based on the assumptions that he continues employment
until his normal retirement date thereunder, that his
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<PAGE> 36
compensation continues at the same rate as in effect for the Plan Year
under consideration until such normal retirement date, and that all
other relevant factors used to determine benefits under such plan
remain constant for all future Plan Years.
(3) The "Annual Benefit" of a Participant means the
annual amount payable under a defined benefit plan computed in
accordance with the following rules:
(i) where the benefit payable under a defined benefit
plan is other than in the form of either a straight life
annuity or a qualified joint and survivor annuity within the
meaning of Code Section 401(a)(11)(G)(iii), it shall be
adjusted to the Actuarial Equivalent benefit in the form of a
straight life annuity on the basis of reasonable actuarial
assumptions;
(ii) in the case of a benefit under a defined benefit
plan which begins prior to the Participant's Social Security
Retirement Age, such benefit shall be adjusted to the
Actuarial Equivalent of a benefit commencing at the
Participant's Social Security Retirement Age on the basis of
reasonable actuarial assumptions for purposes of applying the
Code Section 415(b) dollar maximum;
(iii) in the case of a benefit under a defined
benefit plan which begins after the Participant's Social
Security Retirement Age, such benefit shall be adjusted to the
Actuarial Equivalent of a benefit commencing at the
Participant's Social Security Retirement Age on the basis of
reasonable actuarial assumptions for purposes of applying the
Code Section 415(b) dollar maximum.
The adjustment described in (2) above shall be made in such
manner as the Secretary may prescribe which is consistent with
the reduction for old-age insurance benefits commencing before
the Social Security Retirement Age under the Social Security
Retirement Act.
(4) "Average Compensation" means a Participant's
average compensation for the period of 3 consecutive Plan Years (or the
actual number of consecutive years of employment for Participants
employed by an Employer less than 3 consecutive years) during which the
Participant had the greatest aggregate compensation, within the meaning
of Code section 415(c)(3).
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(5) "Prior Year" means a year, preceding the current
Plan Year, in which the Participant was in the service of the Employer.
For purposes of the preceding sentence, year shall mean (in the event
the Plan was in existence during such year) a Plan Year, or (in the
event the Plan was not in existence during such year) a 12-month period
which begins and ends on the same dates as the Plan Year.
(6) "Dollar Limitation" means the limitation provided
in section 415(c)(1)(A) of the Code (adjusted in accordance with
regulations of the Secretary of the Treasury) as in effect for the
particular Plan Year.
(7) "Actuarial Equivalent" means a benefit of
equivalent value when computed on the basis of such reasonable interest
rates, mortality tables and other assumptions as are approved by the
Company from time to time.
(8) "Social Security Retirement Age" means age 65 in
the case of a Participant attaining age 62 before January 1, 2000
(i.e., born before January 1, 1938), age 66 for a Participant attaining
age 62 after December 31, 1999, and before January 1, 2017 (i.e., born
after December 31, 1937, but before January 1, 1955), and age 67 for a
Participant attaining age 62 after December 31, 2016 (i.e., born after
December 31, 1954)
(9) For purposes of computing the maximum allocation
under either Section 3.11(a) or Section 3.11(b), all defined benefit
plans (whether or not terminated) of the Employer shall be treated as
one defined benefit plan, and all defined contribution plans (whether
or not terminated) of the Employer shall be treated as one defined
contribution plan.
(10) When the term "Employer" is used in this
Section, it shall mean the Employer and any other corporation which is
a member of a controlled group of corporations (within the meaning of
Code section 414(b), as modified by section 415(h) of the Code) of
which the Employer is also a member.
(11) For purposes of Section 3.11(b)(1)(i) and
(b)(2)(i), "1.0" shall be substituted for "1.25" in any Plan Year in
which more than 90% of the aggregate accrued benefits are for Key
Employees.
(e) In addition to other limitations set forth in the Plan and
notwithstanding any other provision of the Plan, the Annual Addition under the
Plan (and all other defined contribution plans required to be aggregated with
this Plan under Code section 415) shall not increase to an amount in excess of
the amount permitted (when
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considered with all other aggregated plans of the Employer) under section 415 of
the Code as amended.
Section 3.12 Excess Allocations. If, pursuant to Section 3.11 immediately above,
there is an excess allocation with respect to a Participant for a Plan Year,
such excess amount shall be disposed of as follows:
(a) Return to the Participant that portion or all of his
Employee contributions (if any) to the extent such contributions constitute
Annual Additions for the Plan Year in excess of the limitations of this Section.
(b) Distribute to the Participant that portion or all of his
Pay Deferrals to the extent that the distribution would reduce the excess
allocation in the Participant's Accounts.
(c) Forfeit that portion, or all, of the Employer
contributions made to the Participant's Accounts to the extent such
contributions constitute Annual Additions for the Plan Year in excess of the
limitations of this Section. Any amounts forfeited under Subsection (c) that are
attributable to Employer contributions to this Plan shall be accounted for by
means of a separate "Suspense Account." The Suspense Account shall not
participate in earnings or losses of the Trust Fund. Any amount held in such
Suspense Account shall be applied toward funding the Employer contributions for
the then current and/or next succeeding Plan Year. No Employer contribution
shall be made which constitutes an Annual Addition prior to the reallocation of
the entire balance held in a Suspense Account established under this Section.
Any such Forfeiture under Subsection (c) occurring for the Plan Year in which
the Plan is terminated and allocated for such Plan Year in accordance with the
terms of the Plan shall be returned to the Employer that contributed the amount
forfeited.
Section 3.13 Rollover Contributions. With the consent of the Plan Administrator,
the Trustee may accept as a Rollover Contribution any amounts received by an
Employee from another qualified plan, either directly within the time prescribed
by law for such rollovers or through an Individual Retirement Account or Annuity
whose assets came solely from a qualified plan. Notwithstanding any other
provision of the Plan to the contrary, an Employee shall be eligible to
participate in the Plan solely for purposes of this Section 3.13 on the first
day on which such Employee is credited with one (1) Hour of Service. Such
amounts shall be held for the benefit of an Employee in a Rollover/Transfer
Account established for his benefit, or otherwise separately accounted for, and
shall at all times be fully vested. The Plan Administrator and the Trustee may
request such information from the Employee as they deem necessary to determine
that a proper rollover contribution is being made. Rollover amounts shall be
invested in accordance with the provisions of Article IV of the Plan, by
including such Employee in the term
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Participant for purposes of such Article, and such Rollover Contribution as a
Participant contribution for purposes of such Article. Rollover Contributions
shall be subject to the provisions of the Plan regarding distributions and
withdrawals. Rollover Contributions shall not be treated as an Annual Addition
for purposes of Section 3.11 of the Plan.
Section 3.14 Asset Transfers. The Trustee may, with the consent of the Company,
accept a transfer of assets directly from the trustee of another qualified plan
as contemplated by Section 401(a) of the Code, provided the Trustee is satisfied
that the provisions of Section 414(1) of the Code and any other applicable legal
requirements will be satisfied with respect to such transfer. Any assets so
transferred to this Plan with respect to a Participant shall be held in a
Rollover/Transfer Account to be administered as otherwise provided in the Plan
with regard to distributions and withdrawals.
Section 3.15 Contribution Under Mistake of Fact.
(a) In the case of a contribution which was made by a
participating Employer by a mistake of fact, such contribution shall be returned
to such Employer by the Trustee at the direction of the Plan Administrator
within one (1) year after the payment of the contribution.
(b) A participating Employer's contribution for each Plan Year
is conditioned upon the Plan's initial and continuing qualification under
Sections 401 and 501 of the Code, and a participating Employer's contribution
for any Plan Year with respect to which it is not so qualified shall revert and
be repaid by the Plan Administrator to such Employer within one year after the
date of denial of qualification of the Plan.
(c) A participating Employer's contribution is conditioned
upon the deductibility thereof under Section 404 of Code, and to the extent the
deduction is disallowed or considered a contribution under mistake of fact, the
contribution shall revert and be repaid by the Trustee at the direction of the
Committee to such Employer within one year after the disallowance of the
deduction. The amount returnable shall be the mistaken or non-deductible
contribution, unadjusted for any earnings attributable thereto, but reduced by
any losses thereto.
(d) In no event shall the return of any such contribution
cause any Participant's interest in the Plan to be less than it would have been
if such mistake of fact contribution had not been made.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
Section 4.1 Investment of Participant Accounts. In accordance with the rules
provided in Section 4.2 below, a Participant shall direct the investment of
amounts credited to his Account into one or more of the following separate
Investment Funds maintained within the Trust Fund:
(a) The Retirement Money Market Portfolio is a money market
fund which seeks as high a level of current income as is consistent with the
preservation of principal and liquidity. This Fund invests in high-quality U.S.
dollar-denominated money market instruments of U.S. and foreign issuers.
Investments in the Fund are not insured or guaranteed by the U.S. government.
(b) The Managed Income Portfolio (formerly, the "GIC Open-End
Portfolio") seeks preservation of capital and a competitive level of income over
time. This Fund purchases high-quality, short- and long-term investment
contracts, bank investment contracts, short-term money market instruments, and
"synthetic" guaranteed investment contracts.
(c) The Intermediate Bond Fund is an income fund which seeks a
high level of current income by investing primarily in investment grade fixed
income obligations rated Baa or better by Moody's or BBB or better by Standard &
Poor's, including corporate bonds, mortgage securities, bank obligations and
U.S. government and agency securities.
(d) The Mortgage Securities Portfolio is an income fund which
seeks a high level of current income by investing in a broad range of
mortgage-related securities, including Ginnie Maes, Fannie Maes and Freddie Maes
and collateralized mortgage obligations.
(e) The Investment Grade Bond Fund (formerly, the "Flexible
Bond Fund") is an income fund which seeks a high rate of current income
consistent with reasonable risk. It invests at least 65% of its portfolio in
investment grade debt securities and seeks to protect investors' capital as well
as take advantage of opportunities to realize capital appreciation.
(f) The Equity-Income Fund is a growth and income fund which
seeks a yield that exceeds the composite yield of the S&P 500. It also considers
the potential for capital appreciation when selecting fund investments. It
invests primarily in
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income-producing equity securities (common and preferred stocks) but can also
invest in bonds and convertible securities.
(g) The Growth & Income Portfolio is a growth and income fund
which seeks long-term capital growth, current income, and growth of income
consistent with reasonable investment risk. It invests in common stocks,
securities convertible into common stocks, preferred stocks and fixed-income
securities.
(h) The Magellan Fund is a growth fund which seeks long-term
capital appreciation by investing in the domestic and foreign stocks of both
well-known and lesser-known companies with potentially above-average growth
potential and a correspondingly higher level of risk.
(i) The Overseas Fund is a growth fund which seeks long-term
capital appreciation by investing primarily in foreign common stocks and
securities.
(j) The Growth Company Fund is a growth fund which seeks
long-term capital appreciation by investing primarily in common stocks and
securities convertible into common stocks. It may invest in companies of any
size with above-average growth potential or in companies in emerging growth
areas.
(k) The SunAmerica Common Stock Fund is a fund invested
exclusively in SunAmerica Common Stock, although it may hold other short-term
investments from time to time. The SunAmerica Common Stock Fund may be
subdivided into separate subaccounts to reflect the various investment rules
applicable to different types of contributions. The SunAmerica Common Stock Fund
shall be available for investment effective as of April 1, 1993.
Upon reasonable notice to the Plan Administrator, the Trustee may change the
investment objectives of any of the established Investment Funds. At the
direction of the Plan Administrator, the Trustee shall change the Investment
Funds offered hereunder to eliminate certain funds or establish other funds in
addition to or in lieu of the Investment Funds previously described in this
Section. Any such changes shall not require the amendment of this Plan or the
Trust.
Section 4.2 Procedures for Investment Directions.
(a) A Participant shall direct the investment, or change the
direction of the investment, of the amounts credited to his Account by
communicating such direction to the Plan Administrator (or its agent) through
the telephone enrollment system provided for such purpose (or through any other
method made available by the Plan Administrator) in accordance with such rules
as may be established by the Plan Administrator.
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Any investment direction submitted by a Participant must
specify, in 5% increments, from 10% to 100%, the percentage of his contributions
to be invested in one or more of the separate Investment Funds maintained under
the Trust Fund and must specify whether such investment instructions apply to
existing savings, future contributions, or both. To the extent permitted by
applicable regulations, if a Participant fails to submit a statement of
direction properly directing the investment of 100% of his contributions, any
portion not properly directed shall be invested in the Retirement Money Market
Portfolio.
A Participant may make exchanges into or out of the Investment
Funds on a daily basis, subject to restrictions limiting the number of exchanges
permitted during any Plan Year, as specified in the prospectus for each
Investment Fund.
(b) Anything to the contrary notwithstanding, the following
additional provisions shall control transactions involving the applicable
Investment Fund. The Plan Administrator shall have the authority to impose such
additional nondiscriminatory restrictions upon transactions involving particular
Investment Funds as it deems appropriate without the necessity of amending the
Plan.
(i) The SunAmerica Common Stock Fund -
(A) A Participant may not direct the investment of
more than twenty-five percent (25%) of his contributions, nor
any portion of his account balance which is invested in any
other Investment Fund, into the SunAmerica Common Stock Fund.
(B) Investment instructions to make exchanges out of
the SunAmerica Common Stock Fund may be given (or cancelled)
on any business day during the first fifteen (15) days of a
month. Such instructions shall be executed on the sixteenth
(16th) day of the month (or next following business day if the
16th is not a business day).
(C) The applicable per share transaction fee for
investments into or exchanges out of the SunAmerica Common
Stock Fund may be charged against the Participant's Account.
(D) Except in the case where participation in the
Plan terminates or as otherwise specifically provided by the
Company, contributions to a Participant's Company Profit
Sharing Stock Contribution Account and earnings thereon must
remain invested in the SunAmerica Common Stock Fund for a
minimum period of two (2) years following the date of the
contribution.
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(ii) The Managed Income Portfolio - Amounts exchanged out of
the Managed Income Portfolio and into a "competing" fund must first be
transferred to a "non-competing" fund for a minimum period of ninety
(90) days.
(c) The Participant will have the sole responsibility for the
investment of his Accounts among the available Investment Funds, and no
fiduciary or other person will have any liability for any loss or diminution in
value resulting from Participant's exercise of such investment responsibility.
It is intended that Section 404(c) of ERISA will apply to a Participant's
exercise of investment responsibilities under this Article and that the Plan
Administrator will take all actions required to comply with the provisions of
Section 404(c) of ERISA.
Section 4.3 Valuation Date Adjustments. In accordance with rules adopted by the
Trustee, at the end of each business day ("Valuation Date"), the Trustee shall
determine the fair market value of the Investment Funds as are established under
Section 4.1, determine the gain or loss experienced by each such Fund since the
immediately preceding Valuation Date, and adjust each Participant's Account with
his or her proportionate percentage of such gain or loss.
Section 4.4 Statements Of Account Value. The Plan Administrator shall provide
each Participant with a statement of the value of his Accounts within the
Investment Funds maintained under this Plan. In no event shall such statements
be furnished less frequently than once each year.
Section 4.5 Investments Limited By Contract Terms. Notwithstanding the foregoing
or any other provision of the Plan to the contrary, if the date on which or as
of which any investment of Employer or Participant contributions or reinvestment
of a Participant's Accounts is limited by the contractual terms of any
Investment Fund(s) established from time to time in accordance with Section 4.1,
and such contractual limitations provide for an effective date of such
investment or reinvestment which is later than the date otherwise indicated in
this Article IV, then the date on which or as of which such investment or
reinvestment shall be made is the date established by the contractual terms of
such Investment Fund(s).
Section 4.6 Voting Rights.
(a) Voting as Directed by Participants. Notwithstanding
anything in the Plan to the contrary, each Participant who timely provides
instructions to the Trustee shall be entitled to direct the Trustee how to vote
any shares of Company Stock allocated to his Accounts (the "Allocated Shares")
with respect to any matter for which shareholder approval is required. Such a
voting Participant shall be a Named Fiduciary within the meaning of Section
403(a)(1) of ERISA, with respect to the vote of such Allocated
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Shares. Reasonable means shall be employed by the Trustee to provide
confidentiality with respect to the directions by such Participant and the
Trustee shall hold such directions in confidence and shall not divulge or
release such directions to any person including the Company or any director,
officer, employee or agent of the Company, it being the intent of this provision
to ensure that the Company (and its directors, officers, employees and agents)
cannot determine the direction given by any Participant. Such instructions shall
be in such form and shall be filed in such manner and at such time as the
Trustee may prescribe. In lieu of voting Participants' fractional Allocated
Shares as directed by Participants, the Trustee may vote the combined fractional
Allocated Shares to the extent possible to reflect the directions of
Participants with fractional Allocated Shares.
(b) Voting by Trustee. The Trustee shall vote that number of
shares of Company Stock not credited to Participants' Accounts ("Unallocated
Shares") determined by multiplying the total number of Unallocated Shares by a
fraction the numerator of which is the number of Allocated Shares for which the
Trustee received voting directions from Participants and the denominator of
which is the total number of Allocated Shares. The Trustee shall vote the
Unallocated Shares determined pursuant to the foregoing formula in the same
proportion on each issue as it votes Allocated Shares for which it received
voting directions from Participants. The Trustee shall not vote the remaining
Unallocated Shares.
(c) Obligations of the Company. The Company shall use its
reasonable best efforts, in conjunction with the Plan Administrator and the
Trustee, to cause to be delivered to each Participant on a timely basis all
proxy materials, notices and information as are furnished to the Company's
stockholders in respect of the exercise of voting rights, together with forms by
which the Participant may confidentially instruct the Trustee, or revoke such
instruction, with respect to shares of Company Stock allocated to his Accounts.
Section 4.7 Tender or Exchange Offer for Company Stock.
(a) The provisions of this Section shall apply in the event
any person, either alone or in conjunction with others, makes a tender offer, or
exchange offer, or otherwise offers to purchase or solicits an offer to sell to
such person one percent or more of the outstanding shares of Company Stock
(herein referred to as a "Tender Offer").
(b) The Trustee may not take any action in response to a
Tender Offer except as otherwise provided in this Section 4.7. Each Participant
may direct the Trustee to sell, offer to sell, exchange or otherwise dispose of
the Allocated Shares in his Accounts in accordance with the provisions,
conditions and terms of such Tender Offer and the provisions of this Section.
Such a tendering Participant shall be a Named
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Fiduciary within the meaning of section 403(a)(1) of ERISA, with respect to the
direction of such Allocated Shares. Reasonable means shall be employed by the
Trustee to provide confidentiality with respect to the tendering direction by
such Participant and the Trustee shall hold such directions in confidence and
shall not divulge or release such directions to any person including the Company
or any director, officer, employee or agent of the Company, it being the intent
of this provision to ensure that the Company (and its directors, officers,
employees and agents) cannot determine the tendering direction given by any
Participant. Such instructions shall be in such form and shall be filed in such
manner and at such time as the Trustee may prescribe.
(c) A Participant who has directed the Trustee to tender or
exchange the Allocated Shares in his Accounts may, at any time prior to the
tender or exchange offer withdrawal date, or such earlier date as established by
the Trustee, instruct the Trustee to withdraw, and the Trustee shall withdraw,
such Allocated Shares from the tender or exchange offer prior to the withdrawal
deadline. The Trustee may impose reasonable limits on the number of instructions
to tender or exchange or withdraw which a Participant may give to the Trustee.
(d) In lieu of tendering or exchanging Participants'
fractional Allocated Shares as directed by Participants, if the majority of the
Allocated Shares are directed to be tendered or exchanged, then the Trustee
shall also tender or exchange any fractional Allocated Shares which are held in
the Trust. However, if the majority of the Allocated Shares are not directed to
be tendered or exchanged, then the Trustee shall not tender or exchange any
fractional Allocated Shares.
(e) The Trustee shall sell, offer to sell, exchange or
otherwise dispose of the Allocated Shares with respect to which it has received
directions to do so under this Section and which have not been withdrawn. The
proceeds of a disposition directed by a Participant shall be allocated to such
Participant's Accounts in proportion to the number of shares of Company Stock
which the Participant instructed the Trustee to sell, exchange or otherwise
dispose of.
(f) To the extent to which Participants do not instruct the
Trustee or do not issue valid directions to the Trustee to sell, offer to sell,
exchange or otherwise dispose of the Allocated Shares, such Participants shall
be deemed to have directed the Trustee that such shares of Company Stock remain
in the Participants' Accounts subject to all provisions of the Plan.
(g) The Trustee shall tender that number of Unallocated Shares
determined by multiplying the total number of Unallocated Shares by a fraction
the numerator of which is the number of Allocated Shares for which the Trustee
has received directions from Participants to tender (which directions have not
been withdrawn as of
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the date of this determination) and the denominator of which is the total number
of Allocated Shares.
(h) The Company shall use its reasonable best efforts, in
conjunction with the Plan Administrator and the Trustee, to cause to be
delivered to each Participant on a timely basis all materials, notices and
information as are furnished to the Company's stockholders in respect of the
exercise of tender or exchange rights, together with forms by which the
Participant may confidentially instruct the Trustee, or revoke a prior
instruction, with respect to shares of Company Stock allocated to his Accounts.
Any Trustee instruction form shall prominently note that a failure to return
such form within a specified reasonable period of time shall be deemed to be a
direction to the Trustee not to tender or exchange shares of Company Stock
allocated to the Participant's Accounts.
(i) Notwithstanding the foregoing provisions of this Section
4.7, the Trustee shall have the right to change or modify its actions hereunder
to comply with the terms of any valid order of a court of competent jurisdiction
directing it to take certain actions inconsistent with the requirements of this
Section 4.7.
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ARTICLE V
VESTING
Section 5.1 Fully Vested Accounts. The Participant's interest in his Employee
Pre-Tax Matched Contribution Account, Employee Pre-Tax Unmatched Contribution
Account, Company Discretionary Contribution Account, Participant After-Tax
Contribution Account, Pre-1989 Employer Matching Contribution Account, and
Rollover/Transfer Account shall be fully vested at all times.
Section 5.2 Vesting Of Other Accounts. The Participant's interest in his Company
Matching Contribution Account and Company Profit Sharing Stock Contribution
Account shall become fully vested and nonforfeitable at the earliest of the
following dates, provided he is Employed by an employer on such date:
(a) The date of the Participant's death;
(b) The date the Participant incurs Total Disability;
(c) The date the Participant attains Normal Retirement Age (65);
(d) The date of termination of this Plan or the date of the
complete cessation of Employer contributions hereunder; or
(e) The date the Participant becomes 100% vested in accordance
with Section 5.3.
Section 5.3 Graduated Vesting.
Prior to the date that a Participant becomes fully vested in
his Company Matching Contribution Account and Company Profit Sharing Stock
Contribution Account in accordance with Section 5.2, the Participant shall earn
a Vested Interest in such Accounts in accordance with the following schedule:
<TABLE>
<CAPTION>
Vesting Service Vested Interest
--------------- ---------------
<S> <C>
Less than 2 years 0%
2 years 25%
3 years 50%
4 years 75%
5 years 100%
</TABLE>
Notwithstanding the foregoing or any other provision of the Plan to the
contrary, any Participant (i) who was actively employed by the Company in
Atlanta, Georgia, on April 4, 1989, (ii) whose Employment with the Company was
immediately or ultimately thereafter eliminated as a result of the
reorganization of the controlled group of
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corporations which includes the Company, and (iii) who remained actively
employed by the Company until his release from Employment date (as such date may
be amended from time to time) specified by the Company in a written notice to
such Participant, shall in each case be considered one hundred percent (100%)
vested in his Company Matching Contribution Account, if any; provided, however,
that no such Participant shall be considered 100% vested pursuant to this
paragraph in the event such Participant ceased active Employment with the
Company between April 4, 1989 and his specified date of release from Employment
by reason of either a voluntary termination of Employment or a discharge from
Employment for cause (such determinations to be made in the sole discretion of
the Plan Administrator).
Forfeitures of amounts in a Participant's Company Matching
Contribution Account and Company Profit Sharing Stock Contribution Account shall
occur, be allocated, and be reinstated as provided in Section 8.3 of the Plan.
Section 5.4 Vesting Service Within Controlled Group. In the event that the
Employer is a member of a controlled group of corporations within the meaning of
Section 1563(a) of the Internal Revenue Code, Vesting Service completed by a
Participant with any Employer who is a member of such controlled group shall be
treated as service with the Employer for the purposes of determining such
Participant's Vested Interest under this Plan.
Section 5.5 Vesting Provision Amendments. No amendment to the vesting provisions
shall deprive a Participant of his nonforfeitable right accrued before the date
of any such amendment.
In the event an amendment is adopted which changes the vesting schedule
contained in Section 5.3, each Participant with at least three (3) Years of
Service with the Employer may elect to have his non-forfeitable percentage
computed under the Plan without regard to such amendment.
Such election may be made in writing to the Plan Administrator any time after
the adoption of any such amendment, provided, however, that the election period
shall end no earlier than the latest of 60 days following (i) the date the
amendment is effective, (ii) the date the amendment was adopted, or (iii) the
date the Participant is given written notification of the amendment by the
Employer or Plan Administrator.
Section 5.6 Effect Of Breaks In Service On Vesting. In the case of a Participant
who incurs a Break in Service and who had a nonforfeitable right to any portion
of the Employer derived account balance before such Break in Service occurred,
Vesting Service completed prior to such Break shall be counted after the
Participant completes one full year of Vesting Service subsequent to such Break.
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In the case of a Participant who has 5 consecutive 1-year Breaks in Service, all
Years of Service after such Breaks in Service will be disregarded for the
purpose of vesting the Employer-derived account balance that accrued before such
Breaks, but both pre-Break and post-Break service will count for the purposes of
vesting the Employer-derived account balance that accrues after such Breaks.
Both accounts will share in the earnings and losses of the Fund.
In the case of a Participant who does not have 5 consecutive 1-year Breaks in
Service, both the pre-Break and post-Break Service will count in vesting both
the pre-Break and post-Break Employer-derived account balance.
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ARTICLE VI
WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
Section 6.1 Withdrawals From Participant After-Tax Contribution Account. A
Participant may elect to withdraw all, but not less than all, of the value of
his Participant After-Tax Contribution Account upon written request submitted to
the Plan Administrator. Payment shall be made as soon as administratively
practicable following such request.
Section 6.2 Hardship Withdrawals. A Participant may request a withdrawal on
account of a hardship in accordance with the provisions of this Section 6.2.
(a) The amounts available for withdrawal under this Section
6.2 shall include Company Discretionary Contributions, Pre-1989 Employer
Matching Contributions, Employee Pre-Tax Matched Contributions, Employee Pre-Tax
Unmatched Contributions and Rollover/Transfer Contributions allocated to a
Participant's Accounts, plus earnings thereon; provided, however, that earnings
after December 31, 1988 may not be withdrawn.
(b) The withdrawal request must be necessitated by a financial
emergency involving (i) expenses for medical care as described in Section 213(d)
of the Code incurred by the Employee or the Employee's spouse or dependent as
defined in Section 213(d) of the Code; (ii) costs related to the purchase of the
Employee's principal residence (excluding mortgage payments); (iii) the payment
of tuition and related educational fees for the next twelve months for the
post-secondary education of the Employee or the Employee's spouse or dependent
as defined in Section 213(d) of the Code; (iv) the need to prevent the eviction
of the Employee from his principal residence or the foreclosure on the mortgage
of his principal residence; (v) the funeral expenses of a member of the
Employee's family; or (vi) such other event which makes a hardship distribution
necessary in light of immediate and heavy financial needs of the Participant.
The necessity of a hardship distribution shall be determined by the Plan
Administrator in each case (using whatever presumptions may be permissible under
applicable IRS rules and regulations).
(c) The amount withdrawn may not exceed the actual expenses
incurred or to be incurred by the Participant because of the emergency or other
event. The amount withdrawn may include any amounts necessary to pay any taxes
or penalties reasonably anticipated to result from the distribution.
(d) A withdrawal request under this paragraph shall include
(unless unnecessary under applicable IRS Rules and Regulations) a full statement
of the reasons
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for the withdrawal, the amount of other financial resources available to the
Participant, if any, and such other information as the Plan Administrator may
request. The Plan Administrator may rely, for this purpose, on a Participant's
written representation that the need cannot be satisfied (i) through
reimbursement from insurance or otherwise, (ii) by reasonable liquidation of
assets reasonably available to be Participant or the Participant's immediate
family, (iii) by cessation of contributions by the Participant to the Plan, or
(iv) by other distributions or loans from any plan maintained by any Employer or
by borrowing from commercial sources on reasonable terms. A Participant's
resources for this purpose shall be deemed to include assets of his spouse and
minor children.
A distribution will automatically be considered necessary to satisfy a
qualifying need if (i) it does not exceed the amount of such need, (ii) the
Participant first obtains all other distributions (other than hardship
distributions), and all non-taxable loans which may be available to the
Participant from any plan maintained by the Employer, (iii) the Participant is
suspended from making any contribution to the Plan and any other plan of the
Employer until the twelfth (12th) monthly anniversary of the date of such
withdrawal, and (iv) the Participant's Section 402(g) limit for the calendar
year during which such suspension period lapses shall be reduced by any Elective
Deferrals made by the Participant during the calendar year of such withdrawal.
(e) The determination of the existence of the emergency and
the financial hardship, and of the amount to be distributed, shall be made by
the Plan Administrator in a uniform and nondiscriminatory manner. The Plan
Administrator may apply such reasonable presumptions in determining the
existence of a financial emergency and the financial resources available to a
Participant as may be permissible under applicable IRS Rules and Regulations.
(f) Only one withdrawal shall be permitted during any twelve
month period unless an additional withdrawal is permitted by the Plan
Administrator.
(g) A Participant's election to withdraw must be made in
writing to the Plan Administrator in the form prescribed by the Plan
Administrator. The election must include the written consent of the
Participant's spouse, if any, witnessed by the Plan Administrator or a notary
public and acknowledging the effect of the withdrawal. The election must specify
both the total amount elected to be withdrawn from the Participant's Accounts
and the respective percentages of such total amount which are to be withdrawn
from the various Investment Fund(s) in which a Participant's Accounts may be
invested pursuant to Article IV. Any such withdrawal shall be made as soon as
administratively practicable following receipt from the Plan Administrator of
approval of the withdrawal.
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Section 6.3 In-Service Withdrawals. Effective on and after August 1, 1990, upon
written request submitted to the Plan Administrator, a Participant who has
attained age 59 1/2 may request a withdrawal in accordance with the provisions
of this Section 6.3. Payment shall be made as soon as administratively
practicable following such request.
(a) The amounts available for withdrawal under this Section
6.3 shall include Employee Pre-Tax Matched Contributions, Employee Pre-Tax
Unmatched Contributions, Company Discretionary Contributions, Pre-1989 Employer
Matching Contributions, and Rollover/Transfer Contributions, plus earnings
thereon.
(b) Only one withdrawal shall be permitted during any twelve
month period unless an additional withdrawal is permitted by the Plan
Administrator.
(c) The minimum withdrawal permitted is the lesser of $2500 or
100% of all of the Participant's Accounts eligible to be withdrawn.
(d) A Participant's election to withdraw must be made in
writing to the Plan Administrator in the form prescribed by the Plan
Administrator. The election must include the written consent of the
Participant's spouse, if any, witnessed by the Plan Administrator or a notary
public and acknowledging the effect of the withdrawal. The election must specify
both the total amount elected to be withdrawn from the Participant's Accounts
and the respective percentages of such total amounts which are to be withdrawn
from the various Investment Fund(s) in which a Participant's Accounts may be
invested pursuant to Article IV. Any such withdrawal shall be made as of the
Valuation Date coincident with or immediately following receipt from the Plan
Administrator of approval of the withdrawal, or if later, the Valuation Date
specified in such written notification.
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ARTICLE VII
DISTRIBUTIONS
Section 7.1 Normal Retirement Benefits. A Participant may retire under the Plan
at his Normal Retirement Date and shall be entitled to receive his Vested
Interest in the Plan. The manner and timing of payment of such benefits under
this Section shall be determined under the provisions of this Article.
Section 7.2 Disability Benefits. In the event a Participant shall suffer a Total
Disability, he shall be entitled to retire under the Plan for disability and to
receive his Vested Interest in the Plan. The manner and timing of the payment of
such benefits under this Section shall be determined under the provisions of
this Article.
Section 7.3 Postponed Retirement. In the event a Participant remains Employed
after his Normal Retirement Date, provided he does not incur a Break in Service,
he shall continue to be a Participant just as if he had not yet attained his
Normal Retirement Date. When such a Participant actually retires, he shall be
entitled to receive his Vested Interest in the Plan upon his actual retirement.
The manner and timing of payment of benefits under this Section shall be
determined under the provisions of this Article.
Section 7.4 Death Benefits When Death Precedes Commencement of Benefits. If
death precedes the payment of benefits to an Employee, Participant, or, subject
to Section 7.5, a former Participant, the Vested Interest of such deceased
person shall be paid in accordance with the provisions of this Section 7.4:
(a) Participants Who Have An Eligible Spouse - If, on the date
of his death, a Participant is married to an Eligible Spouse, a death benefit in
the form of a Qualified Preretirement Survivor Annuity shall be paid to such
Participant's Eligible Spouse within a reasonable time after the Participant's
death. Before the commencement of the Qualified Preretirement Survivor Annuity,
the Eligible Spouse shall have the right to elect an optional form of benefit in
accordance with the provisions of Section 7.6(c).
(b) Participants Who Do Not Have An Eligible Spouse - If, on
the date of his death, a Participant does not have an Eligible Spouse, the
Participant's Vested Interest shall be paid to the Participant's Beneficiary in
the form elected by such Beneficiary in accordance with Section 7.6(c).
Section 7.5 Termination Benefits. If prior to retirement (including retirement
due to a Total Disability) or death, the Participant's Employment with the
Employer is terminated for any reason whatsoever, such terminated Participant
shall be entitled to receive, in lieu of all other benefits and rights under
this Plan, his entire Vested Interest determined in
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accordance with the provisions of Article V. The manner and timing of the
payment of such benefits shall be determined under the provisions of this
Article.
Section 7.6 Form of Payment of Benefits.
(a) Normal Form of Benefits for Participants Who Do Not Have
an Eligible Spouse - Except as otherwise required with respect to married
Participants in Section 7.6(b) and the election of an optional form of payment
in Section 7.6(c), a Participant entitled to benefits hereunder shall receive
his benefits in equal monthly installments during his lifetime as a ten year
certain life annuity; provided, however, that any such Participant may elect in
his sole discretion to receive his benefits in an optional form as provided
under Section 7.6(c) rather than in the form of such ten year certain life
annuity by filing a writing with the Plan Administrator at any time prior to his
Annuity Starting Date. Any such election may be revoked at any time prior to his
Annuity Starting Date, and if so revoked, another election may be made at any
time prior to his Annuity Starting Date.
(b) Qualified Joint and Survivor Annuity for Married
Participants Who Have an Eligible Spouse - The benefits under this Plan of any
Participant or former Participant who is married to an Eligible Spouse on his
Annuity Starting Date will be paid in the form of a Qualified Joint and Survivor
Annuity unless the Participant otherwise elects within the period of time and in
the manner set forth below:
(i) Notice of Option to Elect An Alternate Form of Benefit -
The Plan Administrator shall notify each Participant of his right to
elect not to receive his benefits under this Plan in the form of a
Qualified Joint and Survivor Annuity. Any such notice shall also
contain an explanation of the terms and conditions of the applicable
annuity(ies), the financial effect of the exercise of such option, the
right to make and the effect of a revocation of such election, and the
requirement of the written consent by the Participant's Eligible Spouse
to any such election. Such notice and information shall be delivered to
the Participant within a reasonable period of time before the Annuity
Starting Date, provided, however, that such period shall be not less
than ninety (90) days.
(ii) Time and Manner of Election - An election to waive the
Qualified Joint and Survivor Annuity form of benefit (or revocation of
such an election) shall be made during the ninety (90) day period
ending on the Annuity Starting Date, provided, however, that if a
Participant reasonably requests additional information within such
ninety (90) day period, the election period shall in all cases include
the ninety (90) day period following the date on which the additional
information so requested is personally delivered or mailed to the
Participant. The Plan Administrator need not comply with more than one
such
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request made by a particular Participant or former Participant. Any
such election is revocable by the Participant by a signed writing
delivered to the Plan Administrator within the election period, and if
such election is revoked, another election may be made during the
election period, subject to the consent of the Participant's Eligible
Spouse, if any, at the time of such subsequent election.
(iii) Consent By An Eligible Spouse - An election by a
Participant who is married to an Eligible Spouse to receive his
retirement benefit in a form other than a Qualified Joint and Survivor
Annuity shall not be effective unless such Eligible Spouse makes a
written consent to the Participant's election, such consent to
acknowledge the effect of the Participant's election and to be
witnessed by a notary public or a representative designated by the Plan
Administrator. Consent by an Eligible Spouse shall not be required if
it is established to the satisfaction of the Plan Administrator that
such consent cannot be obtained because there is no Eligible Spouse,
because the Eligible Spouse cannot be located, or because of such other
circumstances as the Secretary may prescribe by Regulations. Consent by
an Eligible Spouse, or establishment that an Eligible Spouse's consent
cannot be obtained, shall be effective only with respect to such
Eligible Spouse.
(iv) Additional Rules for Joint and Survivor Annuity
(A) If a Participant's retirement benefits are to be
paid in the form of a Qualified Joint and Survivor Annuity and
his Eligible Spouse dies before the Participant's Annuity
Starting Date, the Participant shall be entitled to the
benefits he would have received had he not been married to an
Eligible Spouse.
(B) If a Participant's or former Participant's
retirement benefits are to be paid in the form of a Qualified
Joint and Survivor Annuity and the Participant dies on or
before the Annuity Starting Date, his Eligible Spouse shall
receive a Qualified Preretirement Survivor Annuity as provided
in Section 7.4.
(C) If payment of a Participant's benefits has
commenced as a Qualified Joint and Survivor Annuity and his
Eligible Spouse thereafter dies, the Participant shall
continue to receive the reduced retirement benefit payable at
the time of the death of his Eligible Spouse.
(c) Election of Optional Forms of Payment - A Participant
entitled to benefits payable under 7.6(a), a married Participant electing (with
the written consent of such Participant's Eligible Spouse) not to receive a
Qualified Joint and Survivor Annuity,
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or an Eligible Spouse entitled to benefits under Section 7.4(a) which have not
yet commenced, may elect to have his benefit payable under one of the optional
forms of payment set forth below, which is the Actuarial Equivalent of the
Normal Form. An option shall be exercised in writing on a form approved by the
Plan Administrator before the Participant's benefit payments commence and no
later than sixty (60) days after such person becomes entitled to receive a
benefit payment.
The optional forms of benefits are as follows:
(1) Lump Sum Option - A Participant may elect to receive his
benefit payable in a single lump sum payment, payable as soon as
practicable following entitlement thereto.
(2) Ten Year Certain Life Annuity - A Participant may elect to
receive his benefit payable in a life annuity with guaranteed payments
for a period of ten (10) years.
(d) Lump Sum Payment of Value of Small Benefits -
Notwithstanding any other provision of Section 7.4 or this Section 7.6, any
benefits payable under the Plan may be paid as a lump sum distribution under the
following circumstances:
(i) If the Participant's Account Balance does not exceed
$3,500.00, then the Plan Administrator shall pay such benefit in a lump
sum to the appropriate recipient(s) thereof within an administratively
practicable time after the occurrence of the event giving rise to
entitlement to a distribution and, at any time prior to the Annuity
Starting Date; or
(ii) If such Account Balance exceeds $3,500.00, or is equal to
or less than $3,500.00 but no lump sum distribution is made prior to
the Annuity Starting Date, then only with the consent of all recipients
(and the Eligible Spouse, if any), shall the Plan Administrator direct
the payment of such Account Balance in a lump-sum to the appropriate
recipient(s) thereof within an administratively practicable time after
the occurrence of the event giving rise to entitlement to a
distribution or the date of such consent, if later.
(e) Death Benefits After Commencement of Payments - If a
former Participant dies after payment of his Qualified Joint and Survivor
Annuity or optional form of benefits has commenced, regardless of whether such
payments commenced prior to, on, or after his Normal Retirement Date, or a
deferred retirement date, the death benefit payable under the Plan attributable
to the Participant's account shall be the death benefit, if any, payable in
accordance with the terms of such Qualified Joint and Survivor Annuity or
optional form of benefit.
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Section 7.7 Maintenance of Accounts Prior to Payout - After a Participant's
Employment terminates and prior to the distribution of all of his benefits to
him or to his Beneficiary, as the case may be, his Account Balance, as it may
exist from time to time, shall be maintained, subject to Section 7.6, in the
manner described in this Section 7.7. The Trustee shall segregate the account(s)
credited to such former Participant as of the date his Employment terminated,
and such segregated account(s) shall not thereafter share in any allocations of
Employer contributions. The balance in such segregated account(s) shall remain
invested as a part of the Trust Fund pending distribution, sharing in the net
income, net loss, net appreciation and net depreciation of the Trust Fund to the
same extent as if such account had not been segregated, with the Trustee having
the same powers of investment, reinvestment and commingling as he has for all
other assets of the Trust Fund.
Section 7.8 Commencement of Payments.
(a) In General - Notwithstanding anything herein to the
contrary, unless a Participant otherwise elects in a writing delivered to the
Plan Administrator, subject to the requirements of Section 7.8(b), benefit
payments hereunder shall commence not later than sixty (60) days after the later
of (i) the date on which a Participant reaches his Normal Retirement Date, (ii)
the Plan Year in which occurs the tenth anniversary of the year in which such
Participant commenced participation, or (iii) the Plan Year in which such
Participant's Employment with the Employer terminates, unless the recipient of
the benefit agrees otherwise.
(b) Required Commencement Date - Payment of a Participant's
entire interest shall commence not later than April 1 of the calendar year
following the calendar year in which he attains age 70-1/2.
(c) Period of Distribution - The entire interest of a
Participant shall be distributed to the Participant either: (i) as of the
required commencement date as described in Section 7.8(b), or (ii) beginning not
later than such required commencement date, in accordance with regulations
prescribed by the Secretary of the Treasury, (1) over the life of such
Participant or (2) over the lives of the Participant and a designated
Beneficiary or (3) over a period not exceeding the life expectancy of the
Participant or (4) over a period not exceeding the life expectancy of the
Participant and a designated Beneficiary. The life expectancy of an Employee and
Employee's spouse (other than in the case of a life annuity) may be
redetermined, but not more frequently than annually. The provisions of Section
401(a)(9) of the Code and regulations issued by the Secretary thereunder,
including but not limited to Section 1.401(a)(9)-2, shall override any
distribution provision of the Plan to the extent such provision is inconsistent
with such Section.
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(d) When the Participant's Death Precedes Commencement of
Benefit Payments - If death precedes the commencement of payments to an Employee
of his interest in the Plan, his interest in the Plan, as determined under
Section 7.4, shall be distributed within five (5) years after the death of such
Employee, the payment of such benefits to be made in such manner as may be
determined under the provisions of Section 7.4; provided, however, that the five
year requirement shall not apply if: (i) any portion of the Employee's interest
is payable to (or for the benefit of) a designated Beneficiary; (ii) such
portion will be distributed (in accordance with regulations) over the life of
such designated Beneficiary (or over a period not extending beyond the life
expectancy of such Beneficiary); and (iii) such distributions commence no later
than one year after the date of the Employee's death (or such later date as the
Secretary may, under regulations, prescribe). If the designated Beneficiary
referred to in this Section 7.8(d) is the surviving spouse of the Employee, the
date on which distributions are required to commence shall be not earlier than
the date the deceased Employee would have attained age 70-1/2. If such surviving
spouse dies prior to the commencement of distributions to such spouse, this
Section 7.8(d) shall be applied as if the surviving spouse were the Employee.
For purposes of this section, a distribution to a child shall be treated as if
it had been paid to the surviving spouse of the Employee if such amount will
become payable to the surviving spouse upon such child reaching majority (or
such other event designated and permitted under the regulations).
(e) When the Participant's Death Occurs After Commencement of
Benefit Payments - If death occurs after distributions to the Employee of his
interest in the Plan have commenced, the undistributed balance of the interest
of such Employee, if any, shall be distributed at least as rapidly as under the
method of distribution used under Section 7.6 as of the date of his death.
Section 7.9 Errors in Participations' Accounts. When an error or omission is
discovered in the account of a Participant, the Trustee shall be authorized to
make such equitable adjustments as may be appropriate as of the Plan Year in
which the error or omission is discovered.
Section 7.10 No Other Benefits or Withdrawals. Except as expressly provided for
in this Article VII and Sections 6.1, 6.2 and 6.3, for so long as this Plan
continues in effect, no individual, whether a Participant, former Participant,
Beneficiary or otherwise, shall be entitled to any payment or withdrawal of
funds from the Trust Fund. This prohibition applies to Trust funds attributable
to individual contributions as well as those attributable to other sources.
Section 7.11 Errors in Participant's Accounts. When an error or omission is
discovered in an account of a Participant, the Plan Administrator, and the
Trustee shall be authorized
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to make such equitable adjustments as may be appropriate as of the Plan Year in
which the error or omission is discovered.
Section 7.12 Payment of Benefits of Disabled or Incapacitated Person. Whenever,
in the opinion of the Plan Administrator or its agent, a person entitled to
receive any payment of a benefit hereunder is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial affairs, the
Plan Administrator or its agent may direct the Trustee to make payments to such
person or to his legal representative or to a relative or friend of such person
for his benefit, or the Plan Administrator or its agent may direct the Trustee
to apply the payment for the benefit of such person in such manner as the Plan
Administrator or its agent considers advisable. Any payment of a benefit or
installment thereof in accordance with the provisions of this Section shall be a
complete discharge of any liability for the making of such payment under the
provisions of the Plan.
Section 7.13 Direct Transfer of Eligible Rollover Distributions.
(a) For the purposes of this Section 7.13, the following
definitions shall apply:
(i) "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution shall 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 includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
(ii) "Eligible Retirement Plan" shall mean 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 shall mean only an individual
retirement account or individual retirement annuity.
(iii) "Distributee" shall mean 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
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domestic relations order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the spouse or former spouse.
(iv) "Direct Rollover" shall mean a payment to the Eligible
Retirement Plan specified by the Distributee either by direct transfer from the
Plan, or by delivery of the distribution check by the Distributee, provided such
check is made out in a manner to ensure that it is negotiable only by the
trustee of the Eligible Retirement Plan.
(b) Notwithstanding any provision of the Plan to the contrary,
with respect to any distribution made on or after January 1, 1993, a Distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover in
accordance with procedures established by the Plan Administrator.
(c) The Employer will provide the Participant a written notice
as required by Code Section 402(f) which provides a general description of the
Distributee's distribution options and notice of the Distributee's other rights,
if any, to defer receipt of the distribution. Such notice will be given within
the time period specified in Reg. Section l.411(a)-ll(c); provided, however,
that if the distribution is one to which Code Sections 401(a) (11) and 417 do
not apply, such distribution may commence less than 30 days after the required
notice is given, provided that
(i) the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a
distribution (and, if applicable, a Participant
distribution option), and
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
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ARTICLE VIII
TERMINATION OF EMPLOYMENT
Section 8.1 Distributions. Except as provided in Section 7.6(d), distribution of
the Participant's Vested Interest in the Plan shall be made or commence to be
made as soon as practicable after the Participant's (or his Beneficiary's)
request for distribution following his attainment of Normal Retirement Age,
death, Total Disability or termination of Employment, whichever is appropriate,
but in no event later than the required commencement date specified in Section
7.8.
Section 8.2 Forfeitures. A Participant who terminates his Employment with the
Employer and is partially vested in his Company Matching Contribution Account
and/or Company Profit Sharing Stock Contribution Account, as determined in
accordance with Section 5.3, shall forfeit the portion of such Account which is
not vested at the time the first of the following events occurs:
(a) the date on which such Participant incurs his first
Break in Service, or
(b) the date on which any distribution is made of any
portion of his Vested Interest in the Plan, or
(c) the date of the Participant's death.
Provided, however, and notwithstanding the foregoing or any other provision of
the Plan, if a Participant terminates his Employment with the Employer as
contemplated in Section 8.1 and has no Vested Interest in his Company Matching
Contribution Account and/or Company Profit Sharing Stock Contribution Account,
as determined in accordance with Section 5.3, such Participant shall forfeit the
entire balance in such Account at the time of such termination of Employment.
In the event a Participant who received a distribution as a result of his
termination of Employment returns to active Employment with the Employer and
repays the amount of the distribution paid to him not later than the earlier of
(i) five (5) years after the date the Participant is Reemployed, or (ii) the
date the Participant incurs a fifth (5th) consecutive Break in Service, the
amount which was previously treated as a Forfeiture shall be reinstated to such
Participant's Account.
In the event a Participant who did not receive a distribution as a result of his
termination of Employment returns to active Employment with the Employer prior
to the date on which he incurs a fifth (5th) consecutive Break in Service, the
amount which was
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previously treated as a Forfeiture shall be reinstated to such Participant's
Account upon such Participant's completion of one Year of Service after such
Re-employment.
Any amount treated as a Forfeiture in accordance with this
Section shall be held in suspense. Upon the former Participant's fifth (5th)
consecutive Break in Service, or death, or the complete termination of the Plan
(whichever first occurs), any Forfeiture shall be treated as a final Forfeiture
and shall not be subject to restoration in accordance with the preceding
paragraph. Any amount held in suspense (whether or not a final Forfeiture) shall
be applied as of the Annual Valuation Date for the Plan Year in which such
Forfeiture occurs or, at the option of the Employer, as of any Valuation Date(s)
which coincides with or follows the date of Forfeiture (as determined in
accordance with Section 8.2) and precedes such Annual Valuation Date. Each
Forfeiture allocation shall be applied first to restore the nonvested portion of
the Company Matching Contribution Account and/or Company Profit Sharing Stock
Contribution Account of any individual which is then required to be restored in
accordance with the Plan, and second to reduce any Employer contribution
otherwise required or affirmatively elected to be made by the Employer. To the
extent any such Forfeiture can not be applied in such manner for the Plan Year
in which such Forfeiture arose, any excess shall be carried over for application
in future Plan Years. In the event of a Plan termination, any excess which can
not be so allocated shall be applied in accordance with Section 3.12 of the
Plan.
No earnings or losses will be credited or debited to
Forfeitures held in suspense. All earnings and losses attributable to
Forfeitures held in suspense shall be treated as earnings and losses of the
Fund.
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ARTICLE IX
ADMINISTRATION
Section 9.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration. The Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given or delegated to them
under this Plan and Trust. The Employer, or the Company on behalf of the
Employer, shall have the sole responsibility for making the contributions under
the Plan as specified in Article III. The Company shall have the sole authority
to appoint and remove the Plan Administrator, any Trustee or Trustees, any
Investment Manager which may be provided for under the Trust instrument, and to
amend or terminate, in whole or in part, this Plan. The Plan Administrator shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described in this Plan. To the extent assets of
the Plan are not subject to participant directed investment pursuant to Article
IV, the Trustee (or Investment Manager, if appointed) shall have the sole
responsibility for the administration and the management of the assets held
under the Trust all as specifically provided in Article X below. Each Fiduciary
warrants that any directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan authorizing or providing
for such direction, information or action. Furthermore, each Fiduciary may rely
upon any direction, information or action of another Fiduciary as being proper
under this Plan, and is not required under this Plan to inquire into the
propriety of any direction, information or action. It is intended under this
Plan that each Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under this Plan and shall not
be responsible for any act or failure to act of another Fiduciary. No Fiduciary
guarantees the Trust in any manner against investment loss or depreciation in
asset value.
Section 9.2 Administration. The Plan shall be administered by the Plan
Administrator, which may be an individual or a committee appointed by the
Company. The Plan Administrator may appoint or employ persons to assist in the
administration of the Plan and may appoint or employ any other agents it deems
advisable, including legal counsel, actuaries, auditors, bookkeepers and
recordkeepers to serve at the Plan Administrator's direction. All usual and
reasonable expenses of the Plan and the Plan Administrator shall be paid by the
Company.
Section 9.3 Claims Procedure. The Plan Administrator shall have the exclusive
discretionary power to construe and interpret the Plan, and the power to
determine all questions that may arise thereunder including, but not limited to,
(i) the eligibility of individuals to participate in the Plan, (ii) the amount
of benefits to which any Participant or Beneficiary may become entitled
hereunder, and (iii) any situation not specifically covered by the provisions of
the Plan, and the Plan Administrator's decisions on such
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matters shall be final and binding on all parties. If a request for a Plan
distribution by a Participant or Beneficiary is wholly or partially denied, the
Plan Administrator, or the designated party, will provide such claimant a
comprehensible written notice setting forth:
(a) The specific reason or reasons for such denial;
(b) Specific reference to pertinent Plan provisions on which
the denial is based;
(c) A description of any additional material or information
necessary for the claimant to submit to perfect the claim and an
explanation of why such material or information is necessary;
(d) A description of the Plan's claim review procedure. The
review procedure is available upon written request by the claimant to
the Plan Administrator, or the designated party, within 60 days after
receipt by the claimant of written notice of the denial of the claim,
and includes the right to examine pertinent documents and submit issues
and comments in writing to the Plan Administrator, or the designated
party. The decision on review will be made within 60 days after receipt
of the request for review, unless circumstances warrant an extension of
time not to exceed an additional 60 days, and shall be in writing and
drafted in a manner calculated to be understood by the claimant, and
include specific reasons for the decision with references to the
specific Plan provisions on which the decision is based.
Section 9.4 Records and Reports. The Plan Administrator shall exercise such
authority and responsibility as it deems appropriate in order to comply with
ERISA and government regulations issued thereunder relating to records of
Participants' service and benefits; notifications to Participants; reports to,
or registration with, the Internal Revenue Service; reports to the Department of
Labor; and such other documents and reports as may be required by ERISA.
Section 9.5 Other Administrative Powers and Duties. The Plan Administrator shall
have such powers and duties (which powers and duties shall be exclusive) as may
be necessary to discharge its functions hereunder, including:
(a) to construe and interpret the Plan, decide all questions
of eligibility and determine the amount, manner and time of payment of
any distributions hereunder;
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(b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for distributions;
(c) to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information explaining the
Plan, which shall include providing Participants not less frequently
than annually with periodic statements of their accounts;
(d) to receive from Employees and agents and from Participants
such information as shall be necessary for the proper administration of
the Plan;
(e) to receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the
receipts and disbursements, of the Trust from the Trustee;
(f) to appoint or employ individuals or other parties to
assist in the administration of the Plan and any other agents it deems
advisable, including accountants, legal counsel, bookkeepers and
recordkeepers; and
(g) to designate or employ persons to carry out any of the
Plan Administrator's fiduciary duties or responsibilities under the
Plan.
Section 9.6 Rules and Decisions. The Plan Administrator may adopt such rules and
procedures as it deems necessary, desirable, or appropriate. All rules and
decisions of the Plan Administrator shall be uniformly and consistently applied
to all Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon information
furnished by a Participant or Beneficiary, the legal counsel of the Plan
Administrator, or the Trustee.
Section 9.7 Procedures. The Plan Administrator shall keep all necessary records
and forward all necessary communications to the Trustee. The Plan Administrator
may adopt such regulations as it deems desirable for the administration of the
Plan.
Section 9.8 Authorization of Benefit Distributions. The Plan Administrator or
its agent shall issue directions to the Trustee concerning all distributions
which are to be made from the Trust pursuant to the provisions of the Plan, and
shall warrant that all such directions are in accordance with this Plan.
Section 9.9 Application and Forms for Distributions. The Plan Administrator may
require a Participant to complete and file with the Plan Administrator an
application for a distribution, and all other forms approved by the Plan
Administrator, and to furnish all pertinent information requested by the Plan
Administrator. The Plan Administrator may
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rely upon all such information so furnished it, including the Participant's
current mailing address.
Section 9.10 Notices to Trustee. All notices from the Plan Administrator or any
Investment Manager to the Trustee shall be in writing, and the Trustee may rely
thereon in carrying out their duties and responsibilities hereunder.
Section 9.11 Indemnification by the Company. The Company shall indemnify and
hold harmless the Board of Directors, any Employee of the Company or an Employer
performing duties with respect to the Plan, the Plan Administrator and the
Trustee (if not compensated for services rendered to the Plan) from and against
any and all claims, losses, damages, expenses and liabilities (including,
without limitation, reasonable attorneys' fees) arising from their
responsibilities in connection with the Plan, unless such liability arises from
the person's gross negligence or dishonesty in the performance of its duties.
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ARTICLE X
ESTABLISHMENT OF TRUST
Section 10.1 Establishment of Trust. All assets of and contributions to the Plan
shall be held in trust by the Trustee, pursuant to the terms of the Trust
Agreement entered into between the Company and the Trustee, the terms of which
are specifically incorporated by reference into this document. The Trustee shall
hold, manage and invest the assets of the Plan pursuant to the Trust Agreement,
subject to the right of the Company and the Investment Committee to appoint an
Investment Manager for all or any portion of the Trust Fund and, to the right of
Participants to direct the investment of their Accounts in accordance with
Section 4.1. It is expressly permissible under the Plan for Trust assets to be
invested in qualifying employer securities, as that term is defined in Section
407(d)(5) of ERISA, up to and including fifty percent (50%) of total Trust
assets. If SunAmerica Common Stock is purchased other than on the open market,
it will be valued in good faith and based on all relevant factors.
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ARTICLE XI
AMENDMENT OF THE PLAN
The Company, through resolutions adopted by the Board of
Directors, or by amendments adopted by a committee or officers authorized by the
Board of Directors, shall have the right at any time by instrument in writing,
duly executed and acknowledged and delivered to the Trustee, to modify, alter or
amend the Plan in whole or in part, provided, however, that any benefits which
have actually accrued and become payable hereunder shall not be affected
thereby. No amendment shall be made which shall cause or authorize any part of
the Trust Fund to revert or be refunded to the Employer or to be used for or
diverted to purposes other than the exclusive and sole benefit of the
Participants or their Beneficiaries (other than such part as is required to pay
taxes and expenses of administration). No amendment to the Plan shall reduce a
Participant's account balance, reduce an early retirement benefit or eliminate
an optional form of distribution except to the extent permissible under Code
Sections 411, 412, or any other relevant Code Section, or Regulations issued
under any such Code Section. No amendment to the Plan shall have the effect of
decreasing a Participant's Vested Interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the date it
becomes effective. The Company shall have the limited right to amend the Plan at
any time, retroactively or otherwise, in such respects and to such extent as may
be necessary to qualify it under existing and applicable laws and regulations so
as to permit the full deduction for tax purposes of the Employer contributions
made hereunder, and if and to the extent necessary to accomplish such purpose
may by such amendment decrease or otherwise affect the rights of Participants to
benefits which have actually accrued and become payable hereunder,
notwithstanding any provision herein to the contrary.
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ARTICLE XII
TERMINATION OF THE PLAN
The Plan herein provided for has been established by the
Company with the bona fide intention that it shall be continued in operation
indefinitely. However, the Company, through resolutions adopted by the Board of
Directors or a committee authorized by the Board of Directors, reserves the
right at any time to terminate or partially terminate the Plan. In the event of
the termination or partial termination of the Plan, each affected Participant
shall become fully vested in his Accounts.
Should the Company decide to terminate or partially terminate
the Plan, the Trustee shall be notified of such termination in writing and shall
proceed at the direction of the Plan Administrator to liquidate the assets of
the Trust Fund, using the proceeds thereof as follows:
First, to pay any due and accrued expenses and liabilities of
the Trust and any expenses involved in the termination or partial
termination of the Plan.
Second, to distribute to Participants in the Plan who are
affected by such termination or partial termination, the amount of
their interest in the Trust Fund, within a reasonable time in a manner
consistent with the provisions of Article VII hereof.
Notwithstanding the foregoing, the Trustee shall not be required to make any
distribution from the Trust in the event the Plan is terminated or partially
terminated until such time as the Internal Revenue Service shall have determined
in writing that such termination or partial termination will not adversely
affect the prior qualification of the Plan.
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ARTICLE XIII
MISCELLANEOUS
Section 13.1 Participants' Rights; Acquittance. Except to the extent required by
law as in effect and applicable hereto from time to time, neither the
establishment of the Trust hereby created, nor any modification thereof, nor the
creation of any fund or account, nor the payment of any distributions, shall be
construed as giving to any Participant or other person any legal or equitable
right against the Employer, or any officer or employee thereof, or the Trustee
or the Plan Administrator except as herein provided; nor shall any Participant
have any legal right, title or interest in this Trust or any of its assets,
except in the event and to the extent that amounts may actually be distributable
to him hereunder, and the same limitations shall be applicable with respect to
distributions upon death which may be payable to the Beneficiaries of a
Participant. Under no circumstances shall the terms of Employment of any
Participant be modified or in any way affected hereby. This Plan and Trust shall
not constitute a contract of Employment nor afford any individual any right to
be retained in the employ of the Employer.
Section 13.2 Spendthrift Clause. To the extent permitted by law, Participants
are prohibited from anticipating, encumbering, alienating or assigning any of
their rights, claims or interest in this Trust or in any of the assets thereof,
and no undertaking or attempt to do so shall in any way bind the Plan
Administrator or the Trustee or be of any force or effect whatsoever.
Furthermore, to the extent permitted by law, no such rights, claims or interest
of a Participant in this Trust or in any of the assets thereof shall in any way
be subject to such Participant's debts, contracts or engagements, nor to
attachment, garnishment, levy or other legal or equitable process; provided,
however, anything to the contrary herein notwithstanding, to the extent
permissible under applicable law, a Participant's interest hereunder is subject
to all bona fide and existing debts owed by such Participant to the Plan and
Trust, if any, and upon such Participant or the Beneficiary of such Participant
becoming entitled to receive a distribution hereunder, the Trustee, if prior to
disbursement it has received certified notice or confirmation from the Plan
Administrator in such form as it may reasonably require of the fact and amount
of such indebtedness, shall pay first from the distribution so payable the
amount of such indebtedness to the Plan and Trust with the remainder, if any,
being payable as otherwise provided herein.
The foregoing provision against the assignment of a
Participant's right in the Plan shall not apply in the case of a qualified
domestic relations order which is determined by the Plan Administrator to meet
the requirements of Section 414(p) of the Code. Unless otherwise provided in the
qualified domestic relations order: (i) amounts paid to the alternate payee will
be withdrawn pro rata from all of the Participant's accounts and (ii) the amount
shall be paid as soon as administratively practicable.
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In any action or proceeding involving the Trust Fund, or any
property constituting part or all thereof, or the administration thereof, the
Company, the Plan Administrator, and the Trustee shall be the only necessary
parties and no Employees or former Employees of the Company or their
Beneficiaries or any other person having or claiming to have an interest in the
Trust Fund or under the Plan shall be entitled to any notice or service of
process.
Any final judgment which is not appealed or appealable that
may be entered in any such action or proceeding shall be binding and conclusive
on the parties hereto, the Plan Administrator, the Trustee, and all persons
having or claiming to have any interest in the Trust Fund or under the Plan.
Section 13.3 Participation of Adopting Employer and Its Employees. With the
written consent of the Company, an adopting Employer may become a party to this
agreement pursuant to authorization by its Board of Directors. In the event an
adopting Employer does so become a party, it shall contribute to the Plan, and
its Employees shall be entitled to benefits thereunder, in accordance with its
terms, subject to the following special provisions:
(a) In computing the Vesting Service of a person who is in the
employ of more than one of the adopting Employers at the same time, the period
of Employment of such person with any of the adopting Employers shall be
counted, and a transfer of an Employee from the Employment of one adopting
Employer to the Employment of another shall not interrupt his Service, nor shall
such a transfer constitute a termination of Employment under the terms of this
Plan.
(b) The contribution of each adopting Employer shall be
allocated among its Employees separately from the contributions of the others in
accordance with the provisions of Article III. The Forfeitures of a Participant
shall be allocated only among the Participants who are Employees of the adopting
Employer with which the forfeiting Participant was employed. Net increases and
decreases in the value of the Trust Fund resulting from increases or decreases
in the value of the assets of the Trust and earnings and losses shall be
allocated among all Participants under the Plan as a group in accordance with
the provisions of Section 4.5. Participants who are Employees of one or more
adopting Employers shall have separate accounts with respect to their
participation as an Employee of each such adopting Employer.
(c) In the event of a transfer of any Participant from the
Employment of one adopting Employer to the Employment of another, his Account
shall be considered and treated thereafter as the Account of a Participant who
is an Employee of the adopting Employer to which he is transferred, except, if
such Participant thereafter forfeits all or a part of his interest under any of
the provisions of the Plan, the Plan Administrator shall,
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on the next following Annual Valuation Date, divide such Forfeiture for the
purpose of allocation in an equitable manner, considering all the circumstances,
between the two adopting Employers.
In the event of such a transfer, the Participant transferred
shall share in the next annual contribution of each of such adopting Employers
on a pro rata basis, based upon the amount of wages or salary earned with each
such Employer during its fiscal year in which the transfer takes place.
Section 13.4 Qualification of Plan as a Condition. This Plan is based upon the
condition subsequent that it shall be approved and qualified by the Internal
Revenue Service as meeting the requirements of the Internal Revenue Code and
regulations issued thereunder with respect to employees' plans and trusts,
including a salary reduction arrangement, so as to permit, among other incidents
to such qualified plans, the Employer to deduct for income tax purposes the
amount of its contributions to the Plan as set forth herein, and so that such
contributions will not be taxable at the time of contribution to the
Participants as income. Therefore, if when this Plan is submitted for initial
qualification and approval by the Internal Revenue Service, the Internal Revenue
Service rules that the Plan does not meet the qualification requirements of the
Internal Revenue Code for the purposes specified in the preceding sentence, and
the deficiencies precluding qualification may not be corrected by amendment
effective as of the Effective Date, then regardless of any other provision
herein contained, this Plan shall be and become null and void ab initio, and any
contributions under the Plan for any fiscal year of an Employer commencing on or
after the Effective Date shall be returned to the Employers for the benefit of
the Employees on whose behalf the contribution was made to the Trust.
Section 13.5 Successor to the Company. In the event of the dissolution, merger,
consolidation or reorganization of the Company, provision may be made by which
the Plan and Trust will be continued by the successor; and, in that event, such
successor shall be substituted for the Company under the Plan. The substitution
of the successor shall constitute an assumption of Plan liabilities by the
successor and the successor shall have all the powers, duties and
responsibilities of the Company under the Plan.
Section 13.6 Transfer of Plan Assets. In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund, held under any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:
(a) Each Participant would, if either this Plan or
the other plan then terminated, receive a benefit immediately after the
merger, consolidation or
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transfer which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation
or transfer, if the Plan had then terminated;
(b) Resolutions of the Board of Directors of the
Employer of the affected Participants shall authorize such transfer of
assets; and, in the case of the new or successor employer of the
affected Participants, its resolutions shall include an assumption of
liabilities with respect to such Participant's inclusion in the new
employer's plan; and
(c) Such other plan and trust are qualified under
Sections 401(a) and 501(a) of the Internal Revenue Code.
Section 13.7 Delegation of Authority by the Company. Whenever the Company under
the terms of this Agreement is permitted or required to do or perform any act or
matter or thing it shall be done and performed by any officer or individual
thereunto duly authorized by the Board.
Section 13.8 Construction of Agreement. This Plan shall be construed according
to the laws of the State of California, and all provisions hereof shall be
administered according to, and its validity and enforceability shall be
determined under, the laws of such state, except where pre-empted by ERISA.
Section 13.9 Headings. The headings of Sections and Subsections are for ease of
reference only and shall not be construed to limit or modify the detailed
provisions hereof.
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ARTICLE XIV
TOP-HEAVY PLAN PROVISIONS
Section 14.1 Application. In the event that the Plan is determined to be a
Top-Heavy Plan as hereinafter defined, this Article XIV shall become effective
as of the first day of the Plan Year in which the Plan is a Top-Heavy Plan.
Section 14.2 Definitions.
(a) Top-Heavy Compensation. For purposes of this Section of
the Plan, Top-Heavy Compensation means an individual's compensation (as
determined under Code Section 415(c)(3)) from the Employer for the Plan Year;
provided, however, that for purposes of determining Key Employees pursuant to
Section 14.2(b), Top-Heavy Compensation shall be increased by elective
contributions under a cafeteria plan (Section 1.25 of the Code), Pay Deferrals
(Sections 401(k) and 401(a)(8) of the Code), and contributions to a SEP (Section
402(h)(1)(B) of the Code), and, in the case of Employer contributions made
pursuant to a salary reduction agreement, increased by contributions to a
tax-sheltered annuity (Section 403(b) of the Code).
(b) Key Employee. During any year that the Plan is a Top-Heavy
Plan, a Participant who is a Key Employee within the meaning of Section 416 of
the Code, including any Employee, former Employee or Beneficiary of an Employee
or former Employee who at any time during the Plan Year or any of the four (4)
preceding Plan Years, is or was:
(i) an officer of the Employer whose Top-Heavy Compensation is
greater than 50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code for any Plan Year, provided that Employees
described in Section 414(q)(7) of the Code shall be excluded;
(ii) 1 of the 10 Employees having Top-Heavy Compensation of
more than the dollar limitation in Section 415(c)(1)(A) of the Code and
owning (or considered as owning within the meaning of Section 318 of
the Code) one of the largest interests in the Employer, which interest
is at least 1/2%;
(iii) a five percent (5%) owner of the Employer; or
(iv) a one percent (1%) owner of the Employer having Top-Heavy
Compensation from the Employer of more than $150,000.
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Ownership shall be determined according to Section
416(i)(1)(B) of the Code. For purposes of (i) above, no more than 50 Employees
(or, if less, the greater of three (3) or ten percent (10%) of the Employees)
shall be treated as officers. For purposes of (ii) above, if two Employees have
the same ownership interest, the Employee with the higher Top-Heavy Compensation
shall be treated as having the larger interest. An Employee or former Employee
who is not a Key Employee shall be a "Non-Key Employee."
(c) Minimum Contribution. For a Plan Year, the lesser of three
percent (3%) of a Participant's Top-Heavy Compensation or a percentage of a
Participant's Top-Heavy Compensation equal to the percentage at which
contributions are made (or required to be made) under the Plan and all other
plans required to be aggregated under Section 416(g)(2) of the Code, (i.e., each
plan maintained by the Employer in which a Key Employee is a Participant and all
other plans maintained by the Employer which enable the plans in which a Key
Employee is a Participant to meet the requirements of Section 401(a) (4) and
Section 410) for the Key Employee for whom such percentage is highest. The
percentage of a Key Employee's Top-Heavy Compensation at which contributions are
made shall be determined by dividing the contributions for each such Employee by
his Top-Heavy Compensation for the Plan Year. Matching Contributions and Pay
Deferrals allocated to the account of a Key Employee shall be taken into account
in determining the amount of any required minimum contribution under this
Article; provided, however, that to the extent Matching Contributions are taken
into account for any such Plan Year for purposes of the nondiscrimination tests
of Sections 401(k) or 401(m) of the Code, any such contribution allocated to the
Account of a Non-Key Employee shall not be taken into account in determining
whether any such required minimum contribution has been satisfied; and further
provided that under no circumstances shall Pay Deferrals allocated to the
Account of Non-Key Employee for any such Plan Year be applied toward
satisfaction of any required minimum contribution hereunder.
(d) Top-Heavy Plan. For any Plan Year, a plan that is required
in such year to satisfy the requirements of Section 416 of the Code because the
aggregate of the accounts of all Key Employees in the Plan exceeds sixty percent
(60%) of the aggregate of the accounts of all Participants in the Plan, such
determination to be made in accordance with the procedures described in Section
416(g) of the Code and the regulations thereunder as of the Annual Valuation
Date immediately preceding such Plan Year (or in the case of the first Plan
Year, as of the last day of such Plan Year) (the "Determination Date"), and
shall include distributions made in the last five years. The account balance of
any Participant who has not performed any services for the Employer in the last
five years shall not be taken into account. For purposes of determining whether
the Plan is a Top-Heavy Plan, the Plan shall be aggregated with all other plans
maintained by the Employer which are required to be aggregated with the Plan in
order for the Plan to
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meet the requirements of Sections 401(a)(4) and 410 of the Code, and all other
plans maintained by the Employer in which a Key Employee is a Participant (the
"Required Aggregation Group"). In addition, the Plan may also be aggregated with
any other plans maintained by the Employer (the "Permissive Aggregation Group")
so long as such aggregation would not prevent the aggregated group from
satisfying the requirements of Code Sections 401(a)(4) and 410.
Section 14.3 Allocation of Minimum Contribution. For any year in which the Plan
is a Top-Heavy Plan, the Minimum Contribution as defined in Section 14.2(c)
hereof shall be made to the account of each Participant who is a Non-Key
Employee, unless the Minimum Contribution for the Participant is made under
another defined contribution plan maintained by the Employer, or the Participant
accrues a minimum benefit under a defined benefit plan maintained by the
Employer. Such Minimum Contribution shall be made to the Account of each Non-Key
Employee Participant who has not separated from service on the last day of such
Plan Year without regard to such Participant's Hours of Service during such Plan
Year, and without regard to such Participant's compensation for such Plan Year.
The Employer shall determine under which plan a Participant shall receive the
Minimum Contribution (or accrue a minimum benefit) if the Employee is a
Participant in more than one plan maintained by the Employer. Such Minimum
Contribution shall be made without consideration of the Employer's contributions
under Section 3111 of the Code.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized corporate officers and its corporate seal to
be hereunto affixed as of the day and year first above written.
COMPANY:
(CORPORATE SEAL) SUNAMERICA INC.
ATTEST: /s/ Susan L. Harris By: /s/ Darlene Chandler
------------------------ -------------------------
Title: Vice President, Organization
Planning and Development/
Human Resources
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EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 11, 1999
relating to the consolidated financial statements and financial statement
schedules, which appears in American International Group, Inc.'s Current Report
on Form 8-K dated June 3, 1999. We also consent to the reference to us under
the heading "Interests of Named Experts and Counsel" in such Registration
Statement. We also consent to the incorporation by reference in this
Registration Statement of our report dated June 7, 1999 relating to the
financial statements, which appears in the Annual Report of the SunAmerica
Profit Sharing and Retirement Plan on Form 11-K for the year ended December 31,
1998.
PricewaterhouseCoopers LLP
New York, New York
July 27, 1999
