As filed with the Securities and Exchange Commission on February 20, 1996.
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
MATTEL, INC.
------------
(Exact name of Registrant as specified in its charter)
Delaware 95-1567322
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Continental Boulevard, El Segundo, California 90245-5012
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
MATTEL, INC. HOURLY EMPLOYEE PERSONAL INVESTMENT PLAN
-----------------------------------------------------
(Full title of the plan)
Leland P. Smith, Esq.
Assistant General Counsel and Assistant Secretary
MATTEL, INC.
333 Continental Boulevard
El Segundo, California 90245-5012
---------------------------------------
(Name and Address of agent for service)
(310) 252-4821
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
_______________
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered (1) Share (2) Price (2) Fee
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,000,000
($1.00 Par Value) shares $33.8125 $33,812,500 $11,659.48
- -----------------------------------------------------------------------------
<FN>
(1) Shares of the Company's Common Stock are accompanied by the Company's
Preference Share Purchase Rights (the "Rights") which, until the occurrence
of any of certain prescribed events, are not exercisable, are evidenced
by the certificates for the Common Stock and will be transferred along
with and only with the Company's Common Stock. Upon the occurrence of
such prescribed events, separate Rights certificates will be issued
representing one Right for each share of Common Stock held, subject to
adjustment pursuant to anti-dilution provisions. There are also
registered an undetermined number of additional shares of Common Stock
that may be sold in accordance with the provisions of the Plan in the
event of any change in the outstanding shares of Common Stock of the
Company, including a stock dividend or stock split.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1993, as amended,
and based upon the average of the high and low prices of the
Registrant's Common Stock as reported on the New York Stock Exchange on
February 15, 1996.
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
- -----------------------------------------------------------------------------
<PAGE>
PART II
-------
Item 3. Incorporation of Documents by Reference.
- --------------------------------------------------
The following documents, which have been filed with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are hereby incorporated by reference in, and shall be deemed to be a
part of, this Registration Statement: Mattel's Annual Report on Form 10-K for
the year ended December 31, 1994, its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995, June 30, 1995 and September 30, 1995, its
Current Reports on Form 8-K dated January 4, 1995, February 7, 1995, March 21,
1995, April 18, 1995, July 18, 1995, August 11, 1995, August 29, 1995,
October 17, 1995, January 24, 1996, January 26, 1996, February 1, 1996 and
February 7, 1996 and its Notice of Annual Meeting of Stockholders and Proxy
Statement, dated March 22, 1995.
All documents filed by Mattel or the Plan pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the Plan or the filing of a post-
effective amendment which indicates that all the securities offered hereby
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference into the Registration
Statement and to be a part thereof from the respective dates of filing of
such documents.
Item 4. Description of Securities
- -----------------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
- ------------------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
- --------------------------------------------------
Mattel, Inc. (The "Company" or the "Registrant"), has
adopted provisions in its Restated Certificate of Incorporation
(the "Certificate"), which require the Company to indemnify any
and all persons whom it has the power to indemnify pursuant to
the Delaware General Corporation Law (the "DGCL") against any and
all expenses, judgments, fines, amounts paid in settlement, and
any other liabilities to the fullest extent permitted by the
DGCL.
The Certificate also empowers the Registrant by action
of its Board of Directors to purchase and maintain insurance, at
its expense, to protect itself and such persons against any such
expense, judgment, fine, amount paid in settlement or other
liability, whether or not the Registrant would have the power to
indemnify any such individual under the DGCL.
In addition, the Registrant's By-laws require that each
person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative by
reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director, officer
employee or agent of the Registrant or is or was serving at the
request of a director, officer, employee or agent of the
Registrant or is or was serving at the request of the Registrant
as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent, or in any
other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Registrant
to the fullest extent authorized by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Registrant to provide broader indemnification rights than said
law permitted the Registrant to provide prior to such amendment)
against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators;
provided, however, that except for claims by such persons for non-
payment of entitled indemnification claims against the
Registrant, the Registrant shall indemnify such person seeking
indemnification in connection with a proceeding initiated by such
person only if such proceeding was authorized by the Registrant's
Board of Directors. The By-laws specify that the right to
indemnification so provided is a contract right, sets forth
certain procedural and evidentiary standards applicable to the
enforcement of a claim under the By-laws, entitle the persons to
be indemnified to be reimbursed for the expenses of prosecuting
any such claim against the Registrant and entitle them to have
all expenses incurred in advance of the final disposition of a
proceeding paid by the Registrant. Such provisions, however, are
intended to be in furtherance and not in limitation of the
general right to indemnification provided in the By-laws.
The Company has entered into indemnity agreements (the
"Indemnity Agreements") with each director of the Company,
including directors who are also officers and employees of the
Company, and certain senior officers of the Company. The
Indemnity Agreements provide that the Company will pay any costs
which an indemnitee actually and reasonably incurs because of
claims made against him or her by reason of the fact that he or
she is or was a director or officer of the Company. The payments
to be made under the Indemnity Agreements include, but are not
limited to, expenses of investigation, judicial or administrative
proceedings or appeals, damages, judgments, fines, amounts paid
in settlement, and attorneys' fees and disbursements, except the
Company is not obligated to make any payment under the Indemnity
Agreements which the Company is prohibited by law from paying as
indemnity, or where (a) indemnification is provided to an
indemnitee under an insurance policy, except for amounts in
excess of insurance coverage, (b) the claim is one for which an
indemnitee is otherwise indemnified by the Company, (c) final
determination is rendered in a claim based upon the indemnitee
obtaining a personal profit or advantage to which he or she is
not legally entitled, (d) final determination is rendered on a
claim for an accounting of profits made in connection with a
violation of Section 16(b) of the Securities Exchange Act of
1934, or similar state or common law provisions, (e) the
indemnitee was adjudged to be deliberately dishonest, or (f)
(with respect to a director) liability arises out of a breach of
certain of his or her fiduciary duties.
The directors and officers of the Company and its
subsidiaries are insured under certain insurance policies against
claims made during the period of the policies against liabilities
arising out of claims for certain acts in their capacities as
directors and officers of the Company and its subsidiaries.
Item 7. Exemption from Registration Claimed
- ---------------------------------------------
Not Applicable.
Item 8. Exhibits.
- -------------------
4.1* Mattel, Inc. Hourly Employee Personal Investment Plan
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Coopers & Lybrand L.L.P.
24.1* Power of Attorney
- -----------------
* Filed herewith.
Mattel, Inc. has submitted the Mattel, Inc. Hourly Employee Personal
Investment Plan to the Internal Revenue Service ("IRS") and hereby undertakes
to submit any amendment to the Plan to the IRS in a timely manner and to make
all changes required by the IRS in order to qualify the Plan.
Item 9. Undertakings.
- -----------------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post effective amendment to this
registration statement to include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) 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.
The undersigned registrant hereby undertakes that for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
----------
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 El Segundo, State of
California, on February 20, 1996.
MATTEL, INC.
By: /s/ Ned Mansour
-----------------------------
Title: Executive Vice President,
General Counsel and Secretary
POWER OF ATTORNEY
-----------------
We, the undersigned directors and officers of Mattel, Inc., do
hereby severally constitute and appoint John W. Amerman, John L.
Vogelstein, Ned Mansour and Leland P. Smith, and each of them, our true and
lawful attorneys and agents, to do any and all acts and things in our name
and behalf in our capacities as directors and officers and to execute any
and all instruments for us and in our names in the capacities indicated
below, which said attorneys and agents, or any of them, may deem necessary
or advisable to enable said Company to comply with the Securities Act of
1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement on Form S-8, including specifically but not without limitation,
power and authority to sign for us or any of us, in our names in the
capacities indicated below, any and all amendments (including post-
effective amendments) hereto; and we do each hereby ratify and confirm all
that said attorneys and agents or any one of them, shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ John W. Amerman Chairman of the Board February 20, 1996
- ------------------- and Chief Executive Officer
JOHN W. AMERMAN
/s/ Francesca Luzuriaga Executive Vice President February 20, 1996
- ----------------------- and Chief Financial Officer
FRANCESCA LUZURIAGA
/s/ Jill E. Barad Director, President and February 20, 1996
- ----------------- Chief Operating Officer
JILL E. BARAD
/s/ Harold Brown Director February 20, 1996
- ----------------
HAROLD BROWN
/s/ James A. Eskridge Director and Group President, February 20, 1996
- --------------------- Mattel, Worldwide
JAMES A. ESKRIDGE
Director February 20, 1996
- ---------------------
TULLY M. FRIEDMAN
/s/ Ronald M. Loeb Director February 20, 1996
- ------------------
RONALD M. LOEB
/s/ Edward H. Malone Director February 20, 1996
- --------------------
EDWARD H. MALONE
/s/ Edward N. Ney Director February 20, 1996
- -----------------
EDWARD N. NEY
/s/ William D. Rollnick Director February 20, 1996
- -----------------------
WILLIAM D. ROLLNICK
/s/ John L. Vogelstein Director February 20, 1996
- ----------------------
JOHN L. VOGELSTEIN
/s/ Christopher A. Sinclair Director February 20, 1996
- ---------------------------
CHRISTOPHER A. SINCLAIR
<PAGE>
POWER OF ATTORNEY
-----------------
We, the undersigned officers of Mattel, Inc., the Plan
Administrator for the Mattel, Inc. Hourly Employee Personal Investment
Plan, do hereby severally constitute and appoint John W. Amerman, John L.
Vogelstein, Ned Mansour and Leland P. Smith, and each of them,
our true and lawful attorneys and agents, to do any and all acts
and things in our name and behalf in our capacities as directors
and officers and to execute any and all instruments for us and in
our names in the capacities indicated below, which said attorneys
and agents, or any of them, may deem necessary or advisable to
enable said Plan to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this
Registration Statement on Form S-8, including specifically, but
without limitation, power and authority to sign for us or any of
us, in our names in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and we
do each hereby ratify and confirm all that said attorneys and
agents or any one of them, shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of
1933, 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 hereunto duly authorized.
Mattel, Inc. Hourly Employee Personal Investment Plan
-----------------------------------------------------
(Name of Plan)
Plan Administrators
/s/ Michelle Charmello
---------------------------
Michelle Charmello
/s/ Leland P. Smith
---------------------------
Leland P. Smith
/s/ William Stavro
---------------------------
William Stavro
/s/ William Whitman
---------------------------
William Whitman
Date: February 20, 1996
-----------------
EXHIBIT 4.1
MATTEL, INC.
HOURLY EMPLOYEE PERSONAL INVESTMENT PLAN
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I GENERAL........................................................ I-1
1.1 Plan Name..................................................... I-1
1.2 Plan Purpose.................................................. I-1
1.3 Effective Date................................................ I-1
ARTICLE II DEFINITIONS.................................................. II-1
2.1 Accounts..................................................... II-1
2.2 Affiliated Company........................................... II-2
2.3 After-Tax Contributions...................................... II-3
2.3A Applicable Appendix.......................................... II-3
2.3B Basic Participant Contributions.............................. II-3
2.4 Before-Tax Contributions..................................... II-3
2.5 Beneficiary.................................................. II-3
2.6 Reserved for Plan Modifications.............................. II-4
2.7 Board of Directors........................................... II-4
2.8 Reserved for Plan Modifications.............................. II-4
2.9 Reserved for Plan Modifications.............................. II-4
2.10 Code......................................................... II-4
2.11 Committee.................................................... II-4
2.12 Company...................................................... II-4
2.13 Company Contributions........................................ II-5
2.14 Company Matching Contributions............................... II-5
2.15 Company Stock................................................ II-5
2.16 Compensation................................................. II-5
2.16A Covered Group................................................ II-8
2.17 Deferral Limitation.......................................... II-8
2.18 Reserved for Plan Modifications.............................. II-8
2.19 Distributable Benefit........................................ II-8
2.20 Effective Date............................................... II-8
2.21 Eligible Employee............................................ II-9
2.22 Employee..................................................... II-9
2.23 Employment Commencement Date................................ II-10
2.23A Entry Date.................................................. II-10
2.24 ERISA....................................................... II-10
2.25 Hardship.................................................... II-11
2.26 Highly Compensated Employee................................. II-11
2.27 Hour of Service............................................. II-15
2.28 Investment Manager.......................................... II-17
2.29 Normal Retirement........................................... II-17
-i-
2.30 Normal Retirement Date...................................... II-17
2.31 Participant................................................. II-17
2.32 Participation Commencement Date............................. II-17
2.33 Participating Company....................................... II-18
2.34 Period of Severence......................................... II-18
2.35 Plan........................................................ II-18
2.36 Plan Administrator.......................................... II-18
2.37 Plan Year................................................... II-18
2.38 Reserved for Plan Modifications............................. II-19
2.39 Severance Date.............................................. II-19
2.40 Supplemental Participant Contributions...................... II-19
2.41 Reserved for Plan Modifications............................. II-20
2.42 Reserved for Plan Modifications............................. II-20
2.43 Reserved for Plan Modifications............................. II-20
2.44 Total and Permanent Disability.............................. II-20
2.45 Trust and Trust Fund........................................ II-20
2.46 Trustee..................................................... II-20
2.47 Valuation Date.............................................. II-21
2.48 Year of Service............................................. II-21
ARTICLE III ELIGIBILITY AND PARTICIPATION.............................. III-1
3.1 Eligibility to Participate.................................. III-1
ARTICLE IV TRUST FUND................................................... IV-1
4.1 Trust Fund................................................... IV-1
ARTICLE V EMPLOYEE CONTRIBUTIONS......................................... V-1
5.1 Employee Contributions........................................ V-1
5.2 Amount Subject to Election.................................... V-1
5.3 Termination of, Change in Rate of, or
Resumption of Deferrals....................................... V-3
5.4 Limitation on Before-Tax Contributions by
Highly Compensated Employees.................................. V-3
5.5 Provisions for Disposition of Excess Before-
Tax Contributions by Highly Compensated
Employees..................................................... V-8
5.6 Provisions for Return of Annual Before-Tax
Contributions in Excess of the Deferral
Limitation................................................... V-11
5.7 Character of Amounts Contributed as Before-
Tax Contributions............................................ V-15
5.8 Participant Transfer/Rollover Contributions.................. V-15
ARTICLE VI COMPANY CONTRIBUTIONS........................................ VI-1
6.1 General...................................................... VI-1
-ii-
6.2 Requirement for Net Profits.................................. VI-1
6.3 Special Limitations on After-Tax
Contributions and Company Matching
Contributions................................................ VI-2
6.4 Provision for Return of Excess After-Tax
Contributions and Company Matching
Contributions on Behalf of Highly
Compensated Employees........................................ VI-6
6.5 Forfeiture of Company Matching Contributions
Attributable to Excess Deferrals or
Contributions............................................... VI-10
6.6 Investment and Application of Plan
Contributions............................................... VI-10
6.7 Irrevocability.............................................. VI-13
6.8 Company, Committee and Trustee Not
Responsible for Adequacy of Trust Fund...................... VI-14
ARTICLE VII PARTICIPANT ACCOUNTS AND ALLOCATIONS....................... VII-1
7.1 General..................................................... VII-1
7.2 Participants' Accounts...................................... VII-1
7.3 Revaluation of Participants' Accounts....................... VII-1
7.4 Treatment of Accounts Following Termination
of Employment............................................... VII-2
7.5 Accounting Procedures....................................... VII-2
ARTICLE VIII VESTING; PAYMENT OF PLAN BENEFITS........................ VIII-1
8.1 Vesting.................................................... VIII-1
8.2 Distribution Upon Retirement............................... VIII-2
8.3 Distribution Upon Death Prior to Termination
of Employment.............................................. VIII-3
8.4 Death After Termination of Employment...................... VIII-3
8.5 Termination of Employment Prior to Normal
Retirement Date............................................ VIII-4
8.6 Withdrawals................................................ VIII-6
8.7 Form of Distribution...................................... VIII-11
8.8 Election for Direct Rollover of
Distributable Benefit to Eligible Retirement
Plan...................................................... VIII-12
8.9 Designation of Beneficiary................................ VIII-14
8.10 Facility of Payment....................................... VIII-16
8.11 Requirement of Spousal Consent............................ VIII-17
8.12 Additional Documents...................................... VIII-17
8.13 Company Stock Distribution................................ VIII-18
8.14 Valuation of Accounts..................................... VIII-19
8.15 Forfeitures; Repayment.................................... VIII-21
-iii-
8.16 Loans..................................................... VIII-22
8.17 Special Rule for Disabled Employees....................... VIII-25
8.18 Reserved for Plan Modifications........................... VIII-26
ARTICLE IX OPERATION AND ADMINISTRATION OF THE PLAN..................... IX-1
9.1 Plan Administration.......................................... IX-1
9.2 Committee Powers............................................. IX-2
9.3 Investment Manager........................................... IX-4
9.4 Periodic Review.............................................. IX-4
9.5 Committee Procedure.......................................... IX-5
9.6 Compensation of Committee.................................... IX-6
9.7 Resignation and Removal of Members........................... IX-6
9.8 Appointment of Successors.................................... IX-6
9.9 Records...................................................... IX-7
9.10 Reliance Upon Documents and Opinions......................... IX-7
9.11 Requirement of Proof......................................... IX-8
9.12 Reliance on Committee Memorandum............................. IX-9
9.13 Multiple Fiduciary Capacity.................................. IX-9
9.14 Limitation on Liability...................................... IX-9
9.15 Indemnification............................................. IX-10
9.16 Reserved for Plan Modifications............................. IX-10
9.17 Allocation of Fiduciary Responsibility...................... IX-10
9.18 Bonding..................................................... IX-11
9.19 Reserved for Plan Modifications............................. IX-12
9.20 Reserved for Plan Modifications............................. IX-12
9.21 Reserved for Plan Modifications............................. IX-12
9.22 Prohibition Against Certain Actions......................... IX-12
9.23 Plan Expenses............................................... IX-13
ARTICLE X SPECIAL PROVISIONS CONCERNING COMPANY STOCK................... X-1
10.1 Securities Transactions....................................... X-1
10.2 Valuation of Company Securities............................... X-2
10.3 Allocation of Stock Dividends and Splits...................... X-3
10.4 Reinvestment of Dividends..................................... X-3
10.5 Voting of Company Stock....................................... X-3
10.6 Confidentiality Procedures.................................... X-5
10.7 Securities Law Limitation..................................... X-5
ARTICLE XI MERGER OF COMPANY; MERGER OF PLAN............................ XI-1
11.1 Effect of Reorganization or Transfer of
Assets....................................................... XI-1
11.2 Merger Restriction........................................... XI-1
-iv-
ARTICLE XII PLAN TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS...... XII-1
12.1 Plan Termination............................................ XII-1
12.2 Discontinuance of Contributions............................. XII-1
12.3 Rights of Participants...................................... XII-3
12.4 Trustee's Duties on Termination............................. XII-3
12.5 Partial Termination......................................... XII-4
12.6 Failure to Contribute....................................... XII-5
ARTICLE XIII APPLICATION FOR BENEFITS................................. XIII-1
13.1 Application for Benefits................................... XIII-1
13.2 Action on Application...................................... XIII-1
13.3 Appeals.................................................... XIII-2
ARTICLE XIV LIMITATIONS ON CONTRIBUTIONS............................... XIV-1
14.1 General Rule................................................ XIV-1
14.2 Annual Additions............................................ XIV-1
14.3 Other Defined Contribution Plans............................ XIV-2
14.4 Combined Plan Limitation (Defined Benefit
Plan)....................................................... XIV-2
14.5 Adjustments for Excess Annual Additions..................... XIV-2
14.6 Disposition of Excess Amounts............................... XIV-4
14.7 Affiliated Company.......................................... XIV-5
ARTICLE XV RESTRICTION ON ALIENATION.................................... XV-1
15.1 General Restrictions Against Alienation...................... XV-1
15.2 Nonconforming Distributions Under Court
Order........................................................ XV-2
ARTICLE XVI PLAN AMENDMENTS............................................ XVI-1
16.1 Amendments.................................................. XVI-1
16.2 Retroactive Amendments...................................... XVI-2
16.3 Amendment of Vesting Provisions............................. XVI-2
ARTICLE XVII TOP-HEAVY PROVISIONS..................................... XVII-1
17.1 Minimum Company Contributions.............................. XVII-1
17.2 Reserved for Plan Modifications............................ XVII-2
17.3 Top-Heavy Determination.................................... XVII-2
17.4 Maximum Annual Addition.................................... XVII-5
17.5 Aggregation................................................ XVII-6
ARTICLE XVIII MISCELLANEOUS.......................................... XVIII-1
18.1 No Enlargement of Employee Rights......................... XVIII-1
18.2 Mailing of Payments; Lapsed Benefits...................... XVIII-1
18.3 Addresses................................................. XVIII-3
-v-
18.4 Notices and Communications................................ XVIII-4
18.5 Reporting and Disclosure.................................. XVIII-4
18.6 Governing Law............................................. XVIII-4
18.7 Interpretation............................................ XVIII-5
18.8 Certain Securities Laws Rules............................. XVIII-5
18.9 Withholding for Taxes..................................... XVIII-6
18.10 Limitation on Company; Committee and Trustee
Liability................................................. XVIII-6
18.11 Successors and Assigns.................................... XVIII-6
18.12 Counterparts.............................................. XVIII-6
-vi-
<PAGE>
HOURLY EMPLOYEE PERSONAL INVESTMENT PLAN
ARTICLE I
GENERAL
1.1 Plan Name.
---------
This instrument evidences the terms of a tax-qualified retirement
plan for the Eligible Employees of Mattel, Inc. and its participating
affiliates to be known as the "Mattel, Inc. Hourly Employee Personal
Investment Plan" ("Plan").
1.2 Plan Purpose.
------------
This Plan is intended to qualify under Code Section 401(a) as a
profit sharing plan, although contributions may be made to the Plan without
regard to profits, and with respect to the portion hereof intended to
qualify as a Qualified Cash or Deferred Arrangement, to satisfy the
requirements of Code Section 401(k).
The Plan provisions contained in Articles I through XVIII
uniformly apply to all covered employees and groups within the Plan. The
Appendices specify the applicable individual Plan provisions for each
Covered Group which may differ as to eligibility requirements, contribution
levels, benefit levels and other unique features attributable to each
Covered Group.
1.3 Effective Date.
--------------
The original effective date of this Plan is July 1, 1995.
I-1
<PAGE>
ARTICLE II
DEFINITIONS
2.1 Accounts.
--------
"Accounts" or "Participant's Accounts" means the following Plan
accounts maintained by the Committee for each Participant as required by
Article VII:
(a) "Before-Tax Contributions Account" shall mean the
account established and maintained for each Participant under
Article VII for purposes of holding and accounting for amounts held in
the Trust Fund which are attributable to Participant Before-Tax
Contributions, and any earnings thereon, in accordance with Article V.
(b) "After-Tax Contributions Account" shall mean the
account established and maintained for each Participant under
Article VII to reflect amounts held in the Trust Fund on behalf of
such Participant which are attributable to Participant After-Tax
Contributions and any earnings thereon, in accordance with Article V.
(c) "Company Matching Account" shall mean the account
established and maintained for each Participant under Article VII for
purposes of holding and accounting for amounts held in the Trust Fund
which are attributable to Company Matching Contributions, and any
earnings thereon, pursuant to Section 6.1(c).
(d) "Company Contributions Account" shall mean the account
established and maintained for each Participant
II-1
under Article VII for purposes of holding and accounting for amounts
held in the Trust Fund which are attributable to Company Contributions,
and any earnings thereon, pursuant to Section 6.1(a).
(e) "Transfer/Rollover Account" shall mean the account
established and maintained for each Participant under Article VII for
purposes of holding and accounting for amounts held in the Trust Fund
which are attributable to amounts distributed to the Participant from
any other plan qualified under Code Section 401(a), or from an
Individual Retirement Account attributable to employer contributions
under another plan qualified under Code Section 401(a), and any
earnings on such amounts, as provided in Section 5.8.
2.2 Affiliated Company.
------------------
"Affiliated Company" shall mean:
(a) Any corporation that is included in a controlled group
of corporations, within the meaning of Section 414(b) of the Code,
that includes the Company,
(b) Any trade or business that is under common control with
the Company within the meaning of Section 414(c) of the Code,
(c) Any member of an affiliated service group, within the
meaning of Section 414(m) of the Code, that includes the Company, and
II-2
(d) Any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code.
2.3 After-Tax Contributions.
-----------------------
"After-Tax Contributions" shall mean those contributions by a
Participant to the Trust Fund in accordance with Article V which do not
qualify as Before-Tax Contributions.
2.3A Applicable Appendix.
-------------------
"Applicable Appendix" shall mean the unique provisions which
apply to a specific Covered Group outlined in the Appendices attached
hereto and incorporated as part of the Plan.
2.3B Basic Participant Contributions.
-------------------------------
"Basic Participant Contributions" shall mean those amounts which
a Participant elects to contribute to the Plan in accordance with Article V
at the rate of from one percent (1%) to six percent (6%) of the
Participant's Compensation.
2.4 Before-Tax Contributions.
------------------------
"Before-Tax Contributions" shall mean those amounts contributed
to the Plan as a result of a salary or wage reduction election made by the
Participant in accordance with Article V, to the extent such contributions
qualify for treatment as contributions made under a "qualified cash or
deferred arrangement" within the meaning of Section 401(k) of the Code.
2.5 Beneficiary.
-----------
"Beneficiary" or "Beneficiaries" shall mean the person or persons
last designated by a Participant as set forth in
II-3
Section 8.9 or, if there is no designated Beneficiary or surviving
Beneficiary, the person or persons designated in Section 8.9 to receive
the interest of a deceased Participant in such event.
2.6 Reserved for Plan Modifications.
-------------------------------
2.7 Board of Directors.
------------------
"Board of Directors" shall mean the Board of Directors (or its
delegate) of Mattel, Inc. as it may from time to time be constituted.
2.8 Reserved for Plan Modifications.
-------------------------------
2.9 Reserved for Plan Modifications.
-------------------------------
2.10 Code.
----
"Code" shall mean the Internal Revenue Code of 1986, as in effect
on the date of execution of this Plan document and as thereafter amended
from time to time.
2.11 Committee.
---------
"Committee" shall mean the Committee described in Article IX
hereof.
2.12 Company.
-------
"Company" shall mean Mattel, Inc., or any successor thereof, if
its successor shall adopt this Plan.
II-4
2.13 Company Contributions.
---------------------
"Company Contributions" shall mean amounts paid by a
Participating Company into the Trust Fund in accordance with
Section 6.1(a).
2.14 Company Matching Contributions.
------------------------------
"Company Matching Contributions" shall mean amounts paid by a
Participating Company into the Trust Fund in accordance with
Section 6.1(c).
2.15 Company Stock.
-------------
"Company Stock" shall mean whichever of the following is
applicable:
(a) So long as the Company has only one class of stock,
that class of stock.
(b) In the event the Company at any time has more than one
class of stock, the class (or classes) of the Company's stock
constituting "employer securities" as that term is defined in
Section 409A(1) of the Code.
2.16 Compensation.
------------
(a) "Compensation" shall mean the full salary and wages
(including overtime, shift differential and holiday, vacation and sick
pay) and other compensation paid by a Participating Company during a
Plan Year by reason of services performed by an Employee, subject,
however, to the following special rules and to the provisions of
Subsections 2.16(b) through (e):
(i) Except as specified in (ii) below, fringe benefits
and contributions by the Participating Company to
II-5
and benefits under any employee benefit shall not be taken into account
in determining compensation;
(ii) Amounts deducted pursuant to authorization by an
Employee or pursuant to requirements of law (including amounts of salary or
wages deferred in accordance with the provisions of Section 5.1 and which
qualify for treatment under Code Section 401(k) or amounts deducted
pursuant to Code Section 125 or 129) shall be included in "Compensation"
except as specifically provided to the contrary elsewhere in this Plan;
(iii) Amounts paid or payable by reason of services
performed during any period in which an Employee is not a Participant under
the Plan shall not be taken into account in determining Compensation;
(iv) Amounts deferred by the Employee pursuant to non-
qualified deferred compensation plans, regardless of whether such amounts
are includable in the Employee's gross income for his current taxable year,
shall not be taken into account in determining Compensation;
(v) Amounts included in any Employee's gross income
with respect to life insurance as provided by Code Section 79 shall not be
taken into account in determining compensation; and
(vi) Amounts paid to Employees as "bonuses" shall not
be taken into account in determining compensation.
(b) Reserved for Plan Modifications.
-------------------------------
(c) The term "Compensation," for purposes of Article XIV of
this Plan, shall mean wages as defined in
II-6
Section 3401(a) and all other payments of compensation to an Employee
by the Company (in the course of the Company's trade or business) for
which the Company is required to furnish the Employee a written
statement under Code Sections 6041(d) and 6051(a)(3). Compensation
for purposes of this Subsection (c) shall be determined without regard
to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).
(d) In the event that this Plan is deemed a Top-Heavy Plan
as set forth in Article XVII, the term "Compensation" shall not
include amounts excluded by reason of and to the extent provided by
Sections 17.1 and 17.2.
(e) The "Compensation" of any Employee taken into account
under the Plan for any Plan Year shall not exceed $150,000 (or such
adjusted amount as may be prescribed for such Plan Year pursuant to
Section 401(a)(17) of the Code). In determining the Compensation of a
Participant for purposes of this limitation, the rules of
Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the Spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules the adjusted $150,000 limitation is
exceeded, then, the
II-7
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under
this Subsection (e) prior to the application of this limitation.
2.16A Covered Group
-------------
"Covered Group" shall mean a specific group of employees
identified in an Applicable Appendix as covered under the Plan.
2.17 Deferral Limitation.
-------------------
"Deferral Limitation" shall mean the dollar limitation on the
exclusion of elective deferrals from a Participant's gross income under
Section 402(g) of the Code, as in effect with respect to the taxable year
of the Participant.
2.18 Reserved for Plan Modifications.
-------------------------------
2.19 Distributable Benefit.
---------------------
"Distributable Benefit" shall mean the vested interest of a
Participant in this Plan which is determined and distributable in
accordance with the provisions of Article VIII following the termination of
the Participant's employment.
2.20 Effective Date.
--------------
"Effective Date" shall mean the commencement date of coverage of
the Plan's provisions with respect to each Covered Group contained in each
Applicable Appendix to the Plan.
II-8
2.21 Eligible Employee.
-----------------
"Eligible Employee" shall mean any individual who is a member of
a Covered Group and is an Employee employed by a Participating Company,
except
(a) any Employee who is covered by a collective bargaining
agreement to which a Participating Company is a party if there is
evidence that retirement benefits were the subject of good faith
bargaining between the Participating Company and the collective
bargaining representative, unless the collective bargaining agreement
provides for coverage under this Plan, or
(b) any Employee who is a "leased employee," within the
meaning of Code Section 414(n).
(c) Reserved for Plan modifications.
-------------------------------
2.22 Employee.
--------
(a) "Employee" shall mean each person currently employed in
any capacity by the Company or Affiliated Company any portion of whose
income is subject to withholding of income tax and/or for whom Social
Security contributions are made by the Company. The term "Employee"
also includes a "leased employee," to the extent required by Code
Section 414(n).
(b) Although Eligible Employees are the only class of
Employees eligible to participate in this Plan, the term "Employee" is
used to refer to persons employed in a non-Eligible Employee capacity
as well as Eligible Employee category. Thus, those provisions of this
Plan that are not
II-9
limited to Eligible Employees, such as those relating to Hours of
Service, apply to both Eligible and non-Eligible Employees.
2.23 Employment Commencement Date.
----------------------------
"Employment Commencement Date" shall mean each of the following:
(a) The date on which an Employee first performs an Hour of
Service in any capacity for the Company or an Affiliated Company with
respect to which the Employee is compensated or is entitled to
compensation by the Company or the Affiliated Company.
(b) In the case of an Employee who has a one-year Period of
Severance and who is subsequently reemployed by the Company or an
Affiliated Company, the term "Employment Commencement Date" shall also
mean the first day following such one-year Period of Severance on
which the Employee performs an Hour of Service for the Company or an
Affiliated Company with respect to which he is compensated or entitled
to compensation by the Company or Affiliated Company.
2.23A Entry Date.
----------
"Entry Date" shall mean the first day of each month.
2.24 ERISA.
-----
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
II-10
2.25 Hardship.
--------
"Hardship" shall mean a need created by immediate and heavy
financial obligations of the Participant, which obligations cannot be met
by other sources reasonably available to the Participant, and shall be
limited to a distribution for the purpose of meeting major medical expenses
of the Participant or his Spouse or dependents. A distribution shall be
deemed to be necessary for the purpose of meeting major medical expenses if
such expenses were previously incurred, or if such distribution is
necessary to obtain major medical care. The amount required to meet a
Hardship need may include amounts necessary to pay federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution. Any determination of Hardship shall be in accordance with
regulations promulgated under Code Section 401(k). The existence of a
Participant's financial Hardship and the amount required to meet the need
created by the Hardship shall be determined by the Committee in accordance
with rules of uniform application which the Committee may from time to time
prescribe.
2.26 Highly Compensated Employee.
---------------------------
(a) "Highly Compensated Employee" shall mean any Employee
who
(i) was a 5% owner during the Determination Year or
the Look Back Year;
(ii) received Compensation from the Company in excess
of $75,000 during the Look Back Year;
II-11
(iii) received Compensation from the Company in excess
of $50,000 during the Look Back Year and was in the "top-paid group" of
Employees for such Look Back Year;
(iv) was at any time an officer during the Look Back
Year and received Compensation greater than fifty percent (50%) of the
amount in effect under Section 415(b)(1)(A) of the Code in such Look Back
Year; or
(v) was an Employee described in Paragraph (ii),
(iii), or (iv) above for the Determination Year and was a member of the
group consisting of the 100 Employees paid the greatest Compensation during
the Determination Year.
(b) Determination of a Highly Compensated Employee shall be
in accordance with the following definitions and special rules:
(i) "Determination Year" means the Plan Year for which
the determination of Highly Compensated Employee is being made.
(ii) "Look Back Year" is the twelve (12) month period
preceding the Determination Year.
(iii) An Employee shall be treated as a 5% owner for
any Determination Year or Look Back Year if at any time during such Year
such Employee was a 5% owner (as defined in Section 17.3).
(iv) An Employee is in the "top-paid group" of
Employees for any Determination Year or Look Back Year if such Employee is
in the group consisting of the top twenty
II-12
percent (20%) of the Employees when ranked on the basis of Compensation
paid during such Year.
(v) For purposes of this Section, no more than
fifty (50) Employees (or, if lesser, the greater of three (3) Employees or
ten percent (10%) of the Employees) shall be treated as officers. To the
extent required by Code Section 414(q), if for any Determination Year or
Look Back Year no officer of the Company is described in this Section, the
highest paid officer of the Company for such year shall be treated as
described in this Section.
(vi) If any individual is a "family member" with
respect to a 5% owner or of a Highly Compensated Employee in the group
consisting of the ten (10) Highly Compensated Employees paid the greatest
Compensation during the Determination Year or Look Back Year, then
(A) such individual shall not be considered a
separate Employee, and
(B) any Compensation paid to such individual (and
any applicable contribution or benefit on behalf of such individual) shall
be treated as if it were paid to (or on behalf of) the 5% owner or Highly
Compensated Employee.
For purposes of this Paragraph (vi), the term "family member"
means, with respect to any Employee, such Employee's spouse and lineal
ascendants or descendants and the spouses of such lineal ascendants or
descendants.
(vii) For purposes of this Section the term
"Compensation" means Compensation as defined in Code
II-13
Section 415(c)(3), as set forth in Section 2.16(c), without regard
to the limitations of Section 2.16(e); provided, however, the
determination under this Paragraph (vi) shall be made without regard
to Code Sections 125, 402(a)(8), and 401(h)(1)(B), and in the case of
Participant contributions made pursuant to a salary reduction agreement,
without regard to Code Section 403(b).
(viii) For purposes of determining the number of
Employees in the "top-paid" group under this Section, the following
Employees shall be excluded:
(A) Employees who have not completed six (6)
months of service,
(B) Employees who normally work less than 17-1/2
hours per week,
(C) Employees who normally work not more than
six (6) months during any Plan Year, and
(D) Employees who have not attained age 21,
(E) Except to the extent provided in Treasury
Regulations, Employees who are included in a unit of employees covered by
an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between Employee representatives and the Company, and
(F) Employees who are nonresident aliens and who
receive no earned income (within the meaning of Code Section 911(d)(2) from
the Company which constitutes income from sources within the United States
(within the meaning of Code Section 861(a)(3)).
II-14
The Company may elect to apply Subparagraphs (A) through (D)
above by substituting a shorter period of service, smaller number of hours
or months, or lower age for the period of service, number of hours or
months, or (as the case may be) than as specified in such Subparagraphs.
(ix) A former Employee shall be treated as a Highly
Compensated Employee if
(A) such Employee was a Highly Compensated
Employee when such Employee incurred a severance, or
(B) such Employee was a Highly Compensated
Employee at any time after attaining age fifty-five (55).
(x) Code Sections 414(b), (c), (m), and (o) shall be
applied before the application of this Section. Also, the term "Employee"
shall include "leased employees," within the meaning of Code
Section 414(n), unless such leased Employee is covered under a "safe
harbor" plan of the leasing organization and not covered under a qualified
plan of the Affiliated Company.
(c) To the extent permissible under Code Section 414(q),
the Committee may determine which Employees shall be categorized as
Highly Compensated Employees by applying a simplified method and
calendar year election prescribed by the Internal Revenue Service.
2.27 Hour of Service.
---------------
(a) "Hour of Service" of an Employee shall mean the
following:
II-15
(i) Each hour for which the Employee is paid by the
Company or an Affiliated Company or entitled to payment for the performance
of services as an Employee.
(ii) Each hour in or attributable to a period of time
during which the Employee performs no duties (irrespective of whether he
has terminated his Employment) due to a vacation, holiday, illness,
incapacity (including pregnancy or disability), layoff, jury duty, military
duty or a Leave of Absence, for which he is so paid or so entitled to
payment, whether direct or indirect. However, no such hours shall be
credited to an Employee if such Employee is directly or indirectly paid or
entitled to payment for such hours and if such payment or entitlement is
made or due under a plan maintained solely for the purpose of complying
with applicable workmen's compensation, unemployment compensation or
disability insurance laws or is a payment which solely reimburses the
Employee for medical or medically related expenses incurred by him.
(iii) Each hour for which he is entitled to back pay,
irrespective of mitigation of damages, whether awarded or agreed to by the
Company or an Affiliated Company, provided that such Employee has not
previously been credited with an Hour of Service with respect to such hour
under paragraphs (i) or (ii) above.
(b) Hours of Service under Subsections (a)(ii) and (a)(iii)
shall be calculated in accordance with Department of Labor Regulation
29 C.F.R. Section 2530.200b-2(b). Hours of Service shall be credited
to the appropriate
II-16
computation period according to the Department of Labor Regulation
Section 2530.200b-2(c). However, an Employee will not be considered
as being entitled to payment until the date when the Company or the
Affiliated Company would normally make payment to the Employee for
such Hour of Service.
2.28 Investment Manager.
------------------
"Investment Manager" means the one or more Investment Managers,
if any, that are appointed pursuant to Section 9.3.
2.29 Normal Retirement.
-----------------
"Normal Retirement" shall mean a Participant's termination of
employment on or after attaining the Plan's Normal Retirement Date.
2.30 Normal Retirement Date.
----------------------
"Normal Retirement Date" shall be the Participant's sixty-fifth
birthday.
2.31 Participant.
-----------
"Participant" shall mean any Eligible Employee who has satisfied
the participation eligibility requirements set forth in Section 3.1 and has
begun participation in this Plan in accordance with the provisions of
Section 3.2.
2.32 Participation Commencement Date.
-------------------------------
"Participation Commencement Date" shall mean the day on which an
Employee's participation in this Plan may commence in accordance with the
provisions of Article III.
II-17
2.33 Participating Company.
---------------------
"Participating Company" shall mean Mattel, Inc., Mattel
Operations, Inc. and any other Affiliated Company (or similar entity) that
has been granted permission by the Board of Directors to participate in
this Plan, provided that contributions are being made hereunder for the
Employees of such Participating Company. Permission to become a
Participating Company shall be granted under such conditions and upon such
conditions as the Board of Directors deems appropriate.
2.34 Period of Severance.
-------------------
"Period of Severance" shall mean the period of time commencing on
the Participant's Severance Date and continuing until the first day, if
any, on which the Participant completes one or more Hours of Service
following such Severance Date.
2.35 Plan.
----
"Plan" shall mean the Mattel, Inc. Hourly Employee Personal
Investment Plan herein set forth, and as it may be amended from time to
time.
2.36 Plan Administrator.
------------------
"Plan Administrator" shall mean the administrator of the Plan,
within the meaning of Section 3(16)(A) of ERISA. The Plan Administrator
shall be Mattel, Inc.
2.37 Plan Year.
---------
"Plan Year" shall mean the fiscal year of the Company which is
the twelve consecutive month period ending each December 31.
II-18
2.38 Reserved for Plan Modifications.
-------------------------------
2.39 Severance Date.
--------------
"Severance Date" shall mean the earlier of (a) the date on which
an Employee quits, retires, is discharged, or dies; or (b) the first
anniversary of the first date of a period in which an Employee remains
absent from service (with or without pay) with the Company or an Affiliated
Company for any reason other than quit, retirement, discharge or death
(such as vacation, holiday, sickness, disability, leave of absence or
layoff).
In the case of an Employee who has a maternity or paternity
absence described in Code Sections 410(a)(5)(E) and 411(a)(6)(E), the
Employee's Period of Severance will begin on the second anniversary of the
date the Employee is first absent for a maternity or paternity leave,
provided the Employee does not perform an Hour of Service during such
period. The first one-year period of the absence will be included in the
Employee's period of service and the second one-year period is neither part
of the period of service nor part of the Period of Severance. The
Committee may require that the Employee furnish such timely information as
the Committee may reasonably require to establish that the absence from
work is for such a maternity or paternity absence, and the number of days
for which there was such an absence.
2.40 Supplemental Participant Contributions.
--------------------------------------
"Supplemental Participant Contributions" shall mean those amounts
which a Participant elects to contribute to the
II-19
Plan in accordance with Article V in excess of the Participant's Basic
Participant Contributions.
2.41 Reserved for Plan Modifications.
-------------------------------
2.42 Reserved for Plan Modifications.
-------------------------------
2.43 Reserved for Plan Modifications.
-------------------------------
2.44 Total and Permanent Disability.
------------------------------
An individual shall be considered to be suffering from a Total
and Permanent Disability if he has been unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which has lasted for a continuous period of at least 12 months.
An individual's disabled status shall be determined by the Committee,
based on such evidence as the Committee determines to be sufficient. The
rules of this Section 2.44 shall be applied by the Committee in accordance
with Treasury Regulations, if any, promulgated under Code Section 415 or
Code Section 37(e)(3).
2.45 Trust and Trust Fund.
--------------------
"Trust" or "Trust Fund" shall mean the one or more trusts created
for funding purposes under the Plan.
2.46 Trustee.
-------
"Trustee" shall mean the corporation appointed by the Company to
act as Trustee of the Trust Fund, or any successor or other corporation
acting as a trustee of the Trust Fund.
II-20
2.47 Valuation Date.
--------------
"Valuation Date" shall mean the last day of each calendar month
and such additional dates as may be determined in rules prescribed by the
Committee.
2.48 Year of Service.
---------------
"Year of Service" means three hundred sixty five (365) days
included in a period of service recognized under this Section 2.48.
(a) Subject to the succeeding provisions of this
Section 2.48, a Participant shall be credited with a period of service
equal to the elapsed time between his Employment Commencement Date and
his subsequent Severance Date.
(b) A Participant additionally shall receive credit for a
Period of Severance in computing his service hereunder if such
Participant completes an Hour of Service prior to the first
anniversary of his Severance Date. Except as provided in this
Section 2.48(b), a Period of Severance shall not be included in a
Participant's period of service hereunder.
(c) If a Participant who does not have any vested interest
in his accounts under the Plan has five (5) consecutive one-year
Periods of Severance, any prior period of service shall be disregarded
for all purposes of the Plan. Periods of service credited under this
Section 2.48 before such five (5) consecutive one-year Periods of
Severance shall not include any period or periods of service
II-21
that are not required to be taken into account under this Section
2.48(c) by reason of any prior Periods of Severance.
(d) The number of a Participant's Years of Service for
vesting shall be determined by reference to each three hundred sixty
five day period of service recognized under this Section 2.48, whether
or not consecutive.
(e) Notwithstanding any other provision of this Plan,
service performed by Employees for employers other than the Company or
Affiliated Companies may be taken into account in computing service
for any purpose of this Plan to the extent and in the manner
determined by resolution of the Administrative Committee in its sole
discretion.
(f) Notwithstanding any other provision of this Plan,
service performed for an Affiliated Company prior to such entity
becoming an Affiliated Company may be taken into account for purposes
of computing service for any purpose of this Plan to the extent and in
the manner determined by resolution of the Board of Directors of the
Company in its sole discretion.
II-22
<PAGE>
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility to Participate.
--------------------------
(a) Each Eligible Employee shall be eligible to become a
Participant in the Plan on the later of: (i) the Entry Date
coinciding with or next following such Eligible Employee's
satisfaction of the age and service requirements specified in the
Applicable Appendix; or (ii) the Effective Date specified in the
Applicable Appendix.
(b) An Employee who did not become a Participant on the
Entry Date coincident with or next following the date on which he
satisfied the age and service requirements specified in the Applicable
Appendix because he was not then an Eligible Employee shall become a
Participant as of the first day on which he or she again becomes an
Eligible Employee.
(c) Notwithstanding the preceding rules of this
Section 3.1, the actual date upon which an Employee will commence
participation will be determined pursuant to the rules of Section 3.2.
3.2 Commencement of Participation.
-----------------------------
(a) Each Eligible Employee shall be entitled automatically
to commence participation in this Plan with respect to the Company
Contributions described in Section 6.1(a).
(b) Reserved for Plan modifications.
-------------------------------
III-1
(c) Reserved for Plan modifications.
-------------------------------
(d) Each Eligible Employee shall be entitled to commence
Before-Tax Contributions and Company Matching Contributions as set
forth in Section 6.1(c) as of the date he becomes an Eligible
Employee.
(e) The Committee may prescribe such rules as it deems
necessary or appropriate regarding times and procedures for
Participants to make elections to contribute a portion of Compensation
as provided in Section 5.1.
3.3 Rehired Employees.
-----------------
(a) A Participant who has a termination of employment after
satisfying the age and service requirements specified in the Applicable
Appendix and has no vested interest in his Accounts and subsequently
becomes an Eligible Employee, shall thereupon be eligible to become a
Participant, unless his or her Period of Severance is five years or longer
in which case he or she shall be treated as a new Employee.
(b) A Participant who has a termination of employment and
has a vested interest in his Accounts and subsequently becomes an Eligible
Employee shall thereupon be eligible to become a Participant.
III-2
<PAGE>
ARTICLE IV
TRUST FUND
4.1 Trust Fund.
----------
(a) The Company has entered into a Trust Agreement for the
establishment of a Trust to hold the assets of the Plan.
Simultaneously with the establishment of this Plan the Company shall
pay to the Trustee a specified sum of money as its initial
contribution to the Trust Fund. The Trustee shall acknowledge receipt
of this contribution and shall agree to hold and administer this
contribution together with such additional funds and assets that may
be subsequently deposited with the Trustee pursuant to the terms of
this Plan.
(b) The Trust Fund is authorized to invest in either
Company Stock or such other assets as the Committee or the Investment
Manager (if applicable) may direct. Participants may direct the
investment of the assets in their Accounts in the Trust Fund from
among the acceptable investment alternatives which the Committee may
from time to time make available.
(c) The Committee shall not be required to engage in any
transaction, including without limitation, directing the purchase or
sale of Company Stock, which it determines in its sole discretion,
might tend to subject itself, its members, the Plan, the Company, or
any Participant to liability under federal or state securities law.
IV-1
<PAGE>
ARTICLE V
EMPLOYEE CONTRIBUTIONS
5.1 Employee Contributions.
-----------------------
In accordance with rules which the Committee shall prescribe from
time to time, each Participant shall be given an opportunity to elect to
have a percentage of his or her Compensation contributed to the Plan. A
contribution election by a Participant shall remain in effect from year to
year (notwithstanding salary or wage rate changes) until changed by the
Participant. At the election of the Participant, contributions shall be
made as Before-Tax Contributions, After-Tax Contributions or a combination
thereof.
5.2 Amount Subject to Election.
--------------------------
(a) Subject to the limitations of this Article V, the
amount of an individual's Compensation that may be contributed subject
to the election provided in Section 5.1 shall be a whole percentage of
the individual's Compensation, which percentage is not less than one
percent (1%) nor more than the percentage specified in the Applicable
Appendix.
(b) No Participant shall be permitted to make Before-Tax
Contributions in excess of the Deferral Limitation. Any election by a
Participant to make Before-Tax Contributions shall be deemed to
include an election to automatically substitute After-Tax
Contributions for such Before-Tax Contributions, effective for the
period starting
V-1
on the date immediately following the date the Participant's Before-Tax
Contributions for a calendar year equal the Deferral Limitation and ending
on the immediately following December 31. In the event a Participant's
Before-Tax Contributions exceed the Deferral Limitation, excess
contributions shall be subject to the provisions of Section 5.6.
(c) For purposes of satisfying one of the tests described
under Section 5.4 and Section 6.3, the Committee may prescribe such
rules as it deems necessary or appropriate regarding the maximum
amount that a Participant may elect to contribute and the timing of
such an election. These rules may prescribe a maximum percentage of
Compensation that may be contributed, or may provide that the maximum
percentage of Compensation that a Participant may contribute will be a
lower percentage of his Compensation above a certain dollar amount of
Compensation than the maximum deferral percentage below that dollar
amount of Compensation. These rules shall apply to all individuals
eligible to make the election described in Section 5.1, except to the
extent that the Committee prescribes special or more stringent rules
applicable only to Highly Compensated Employees.
V-2
5.3 Termination of, Change in Rate of, or Resumption of Deferrals.
--------------------------------------------------------------
(a) A Participant may at any time submit a request to the
Committee to terminate his contributions made pursuant to this
Article V.
(b) A Participant may at any time (but not more frequently
than once every two weeks) submit a request to the Committee to alter
the rate of, or resume his contributions made pursuant to this
Article V.
(c) A request for termination, alteration, or resumption or
alteration of the rate of contributions shall be in form satisfactory
to the Committee. The Committee may require at least thirty (30) days
notice prior to commencement of the payroll period for which such
change is to be effective.
5.4 Limitation on Before-Tax Contributions by Highly Compensated
------------------------------------------------------------
Employees.
----------
With respect to each Plan Year, Participant Before-Tax
Contributions under the Plan for the Plan Year shall not exceed the
limitations on contributions on behalf of Highly Compensated Employees
under Section 401(k) of the Code, as provided in this Section. In the
event that Before-Tax Contributions under this Plan on behalf of Highly
Compensated Employees for any Plan Year exceed the limitations of this
Section for any reason, such excess contributions and any income allocable
thereto shall be returned to the Participant or recharacterized as
Participant After-Tax Contributions, as provided in Section 5.5.
V-3
(a) The Before-Tax Contributions by a Participant for a
Plan Year shall satisfy the Average Deferral Percentage test set forth
in (i)(A) below, or the alternative Average Deferral Percentage test
set forth in (i)(B) below, and to the extent required by regulations
under Code Section 401(m), also shall satisfy the test identified in
(ii) below:
(i) (A) The "Actual Deferral Percentage" for Eligible
Employees who are Highly Compensated Employees shall not be more than the
"Actual Deferral Percentage" of all other Eligible Employees multiplied by
1.25, or
(i) (B) The excess of the "Actual Deferral"
Percentage" for Eligible Employees who are Highly Compensated Employees
over the "Actual Deferral Percentage" for all other Eligible Employees
shall not be more than two percentage points, and the "Actual Deferral
Percentage" for Highly Compensated Employees shall not be more than the
"Actual Deferral Percentage" of all other Eligible Employees multiplied by
2.00.
(ii) Average Contribution Percentage for Highly
Compensated Employees eligible to participate in this Plan and a plan of
the Company or an Affiliated Company that is subject to the limitations of
Section 401(m) of the Code including, if applicable, this Plan, shall be
reduced in accordance with Section 6.4, to the extent necessary to satisfy
the requirements of Treasury Regulations Section 1.401(m)-2.
(b) For the purposes of the limitations of this
Section 5.4, the following definitions shall apply:
V-4
(i) "Actual Deferral Percentage" means, with respect
to Eligible Employees who are Highly Compensated Employees and all other
Eligible Employees for a Plan Year, the average of the ratios, calculated
separately for each Eligible Employee in such group, of the amount of
Before-Tax Contributions under the Plan allocated to each Eligible Employee
for such Plan Year to such Employee's "Compensation" for such Plan Year.
An Eligible Employee's Before-Tax Contributions may be taken into account
for purposes of determining his Actual Deferral Percentage for a particular
Plan Year only if such Before-Tax Contributions relate to Compensation that
either would have been received by the Eligible Employee in the Plan Year
(but for the deferral election), or is attributable to services performed
in the Plan Year and would have been received by the Eligible Employee
within two and one-half (21/2) months after the close of the Plan Year (but
for the deferral election), and such Before-Tax Contributions are allocated
to the Eligible Employee as of a date within that Plan Year. For purposes
of this rule, an Eligible Employee's Before-Tax Contributions shall be
considered allocated as of a date within a Plan Year only if (A) the
allocation is not contingent upon the Eligible Employee's participation in
the Plan or performance of services on any date subsequent to that date,
and (B) the Before-Tax Contribution is actually paid to the Trust no later
than the end of the twelve month period immediately following the Plan Year
to which the contribution relates. To the extent determined by the
Committee and in accordance with regulations issued by the Secretary of the
V-5
Treasury, contributions on behalf of an Eligible Employee that satisfy the
requirements of Code Section 401(k)(3)(C)(ii) may also be taken into
account for the purpose of determining the Actual Deferral Percentage of
such Eligible Employee.
(ii) "Compensation" means Compensation determined by
the Committee in accordance with the requirements of Section 414(s) of the
Code, including, to the extent elected by the Committee, amounts deducted
from an Employee's wages or salary that are excludable from income under
Sections 125, 129, or 402(a)(8) of the Code.
(c) In the event that as of the last day of a Plan Year
this Plan satisfies the requirements of Section 401(a)(4) or 410(b) of
the Code only if aggregated with one or more other plans which include
arrangements under Code Section 401(k), then this Section 5.4 shall be
applied by determining the Actual Deferral Percentages of Eligible
Employees as if all such plans were a single plan, in accordance with
regulations prescribed by the Secretary of the Treasury under
Section 401(k) of the Code.
(d) For the purposes of this Section, the Actual Deferral
Percentage for any Highly Compensated Employee who is a participant
under two or more Code Section 401(k) arrangements of the Company or
an Affiliated Company shall be determined by taking into account the
Highly Compensated Employee's Compensation under each such arrangement
and contributions under each such arrangement which qualify for
treatment under Code Section 401(k), in accordance with
V-6
regulations prescribed by the Secretary of the Treasury under Section
401(k) of the Code.
(e) If an Eligible Employee (who is also a Highly
Compensated Employee) is subject to the family aggregation rules in
Section 2.26(b)(vi), the combined Actual Deferral Percentage for the
family group (which is treated as one Highly Compensated Employee)
shall be the Actual Deferral Percentage determined by combining the
Before-Tax Contributions, amounts treated as Before-Tax Contributions
under Code Section 401(k)(3)(D)(ii), and Compensation of all eligible
family members.
(f) For purposes of this Section, the amount of Before-Tax
Contributions by a Participant who is not a Highly Compensated
Employee for a Plan Year shall be reduced by any Before-Tax
Contributions in excess of the Deferral Limitation which have been
distributed to the Participant under Section 5.6, in accordance with
regulations prescribed by the Secretary of the Treasury under
Section 401(k) of the Code.
(g) The determination of the Actual Deferral Percentage of
any Participant shall be made after applying the provisions of
Section 14.5 relating to certain limits on Annual Additions under
Section 415 of the Code.
(h) The determination and treatment of Before-Tax
Contributions and the Actual Deferral Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
V-7
(i) The Committee shall keep or cause to have kept such
records as are necessary to demonstrate that the Plan satisfies the
requirements of Code Section 401(k) and the regulations thereunder, in
accordance with regulations prescribed by the Secretary of the
Treasury.
5.5 Provisions for Disposition of Excess Before-Tax Contributions by
----------------------------------------------------------------
Highly Compensated Employees.
-----------------------------
(a) The Committee shall determine, as soon as is reasonably
possible following the close of each Plan Year, the extent, if any, to
which deferral treatment under Code Section 401(k) may not be
available for Before-Tax Contributions by Highly Compensated
Employees. If, pursuant to the determination by the Committee, any or
all of a Participant's Before-Tax Contributions are not eligible for
tax-deferral treatment, then any excess Before-Tax Contributions and
any income allocable thereto shall be disposed of in accordance with
(i) or (ii) below.
(i) To the extent permissible under Section 6.3,
excess Before-Tax Contributions by the Highly Compensated Employee in a
Plan Year may be recharacterized as After-Tax Contributions for the Plan
Year not later than two and one-half (2-1/2) months following the close of
the Plan Year. Any recharacterization shall be effective retroactive to
the date of the Highly Compensated Employee's earliest Before-Tax
Contributions during the Plan Year in which the excess Before-Tax
Contributions were made. To the extent required by Treas. Reg. Section 1-
401(k)-1(f)(3), Before-Tax Contributions
V-8
recharacterized as After-Tax Contributions shall continue to be treated as
Before-Tax Contributions for purposes of Article VIII.
(ii) To the extent a Participant's Before-Tax
Contributions cannot be recharacterized in accordance with (i) above, any
excess Before-Tax Contributions in a Plan Year shall, if administratively
feasible, be distributed to the Participant not later than two and one-half
(2-1/2) months following the close of the Plan Year in which such excess
Before-Tax Contributions were made, but in any event no later than the
close of the first Plan Year following the Plan Year in which such excess
Before-Tax Contributions were made (after withholding any applicable income
taxes due on such amounts).
(b) For purposes of this Section, the amount of excess
Before-Tax Contributions to be distributed to a Participant for a Plan
Year or recharacterized shall be reduced by the amount of any Before-
Tax Contributions in excess of the Deferral Limitation (for the
Participant's taxable year that ends with or within the Plan Year)
which have been distributed to the Participant under Section 5.6, in
accordance with regulations prescribed by the Secretary of the
Treasury under Section 401(k) of the Code.
(c) The Committee shall determine the amount of any excess
Before-Tax Contributions by Highly Compensated Employees for a Plan
Year by application of the leveling method set forth in Treasury
Regulation Section 1.401(k)-1(f)(2) under which the Deferral
Percentage of the Highly Compensated Employee who has the highest such
percentage for
V-9
such Plan Year is reduced to the extent required (i) to enable the
Plan to satisfy the Actual Deferral Percentage test, or
(ii) to cause such Highly Compensated Employee's Deferral Percentage
to equal the Deferral Percentage of the Highly Compensated Employee
with the next highest Deferral Percentage. This process shall be
repeated until the Plan satisfies the Actual Deferral Percentage test.
For each Highly Compensated Employee, the amount of excess Before-Tax
Contributions shall be equal to the total Before-Tax Contributions
(plus any amounts treated as Before-Tax Contributions) made or deemed
to be made by such Highly Compensated Employee (determined prior to
the application of the foregoing provisions of this Subsection (c))
minus the amount determined by multiplying the Highly Compensated
Employee's Deferral Percentage (determined after application of the
foregoing provisions of this Subsection (c)) by his Compensation.
(d) The determination and correction of excess Before-Tax
Contributions of a Highly Compensated Employee whose Actual Deferral
Percentage is determined under the family aggregation rules in
Section 5.4(e) shall be accomplished by reducing the Actual Deferral
Percentage as required under Subsections (a) and (b) above and
allocating the excess Before-Tax Contributions for the family unit
among family members in proportion to the Before-Tax Contributions of
each family member that are combined to determine the Actual Deferral
Percentage.
V-10
(e) For purposes of satisfying the Actual Deferral
Percentage test, income allocable to a Participant's excess Before-Tax
Contributions, as determined under (b) above, shall be determined in
accordance with any reasonable method used by the Plan for allocating
income to Participant Accounts, provided such method does not
discriminate in favor of Highly Compensated Employees and is
consistently applied to all Participants for all corrective
distributions or recharacterizations under the Plan for a Plan Year.
The Committee shall not be liable to any Participant (or his
Beneficiary, if applicable) for any losses caused by misestimating the
amount of any Before-Tax Contributions in excess of the limitations of
this Article V and any income allocable to such excess.
(f) To the extent required by regulations under
Section 401(k) or 415 of the Code, any excess Before-Tax Contributions
with respect to a Highly Compensated Employee shall be treated as
Annual Additions under Article XIV for the Plan Year for which the
excess Before-Tax Contributions were made, notwithstanding the
distribution or recharacterization of such excess in accordance with
the provisions of this Section.
5.6 Provisions for Return of Annual Before-Tax Contributions in Excess of
---------------------------------------------------------------------
the Deferral Limitation.
------------------------
(a) In the event that due to error or otherwise, a
Participant's Before-Tax Contributions under this Plan exceed the
Deferral Limitation for any calendar year (but
V-11
without regard to amounts of compensation deferred under any other plan),
the excess Before-Tax Contributions for the Plan Year, if any, together
with income allocable to such amount shall be distributed to the
Participant on or before the first April 15 following the close of the
calendar year in which such excess contribution is made. The amount
of excess Before-Tax Contributions that may be distributed to a
Participant under this Section for any taxable year shall be reduced
by any excess Before-Tax Contributions previously distributed or
recharacterized in accordance with Section 5.5 for the Plan Year
beginning with or within such taxable year.
(i) Income on Before-Tax Contributions in excess of
the Deferral Limitation shall be calculated in accordance with
Section 5.5(e), except calculations of allocable income shall be made with
reference to the calendar year (if the Plan Year is not the calendar year).
(ii) Reserved for Plan modifications.
-------------------------------
(iii) The Committee shall not be liable to any
Participant (or his Beneficiary, if applicable) for any losses caused by
misestimating the amount of any Before-Tax Contributions in excess of the
limitations of this Article V and any income allocable to such excess.
(b) If in any calendar year a Participant makes Before-Tax
Contributions under this Plan and additional elective deferrals,
within the meaning of Code Section 402(g)(3), under any other plan
maintained by the
V-12
Company or an Affiliated Company, and the total amount of the
Participant's elective deferrals under this Plan and all such other
plans exceed the Deferral Limitation, the Company and each
Affiliated Company maintaining a plan under which the Participant made
any elective deferrals shall notify the affected plans in writing, and
corrective distributions of the excess elective deferrals, and any
income allocable thereto, shall be made from one or more such plans,
to the extent determined by the Company and each Affiliated Company.
The determination of the amount of a Participant's elective deferrals
for any calendar year shall be made after applying the provisions of
Section 14.5 relating to certain limits on Annual Additions under
Section 415 of the Code. All corrective distributions of excess
elective deferrals shall be made on or before the first April 15
following the close of the calendar year in which the excess elective
deferrals were made.
(c) In accordance with rules and procedures as may be
established by the Committee, a Participant may submit a claim to the
Committee in which he certifies in writing the specific amount of his
Before-Tax Contributions for the preceding calendar year which, when
added to amounts deferred for such calendar year under any other plans
or arrangements described in Section 401(k), 408(k) or 403(b) of the
Code (other than a plan maintained by the Company or an Affiliated
Company), will cause the Participant to exceed the Deferral Limitation
for the calendar year in which the
V-13
deferral occurred. Any such claim must be submitted to the Committee
no later than the March 1 of the calendar year following the calendar
year of deferral. To the extent the amount specified by the Participant
does not exceed the amount of the Participant's Before-Tax Contributions
under the Plan for the applicable calendar year, the Committee shall
treat the amount specified by the Participant in his claim as a Before-
Tax Contribution in excess of the Deferral Limitation for such calendar
year and return such excess and any income allocable thereto to the
Participant, as provided in (a) above. In the event that for any reason
such Participant's Before-Tax Contributions in excess of the Deferral
Limitation for any calendar year are not distributed to the
Participant by the time prescribed in (a) above, such excess shall be
held in the Participant's Before-Tax Contribution Account until
distribution can be made in accordance with the provisions of this
Plan.
(d) To the extent required by regulations under
Section 402(g) or 415 of the Code, Before-Tax Contributions with
respect to a Participant in excess of the Deferral Limitation shall be
treated as Annual Additions under Article XIV for the Plan Year for
which the excess contributions were made, notwithstanding the
distribution of such excess in accordance with the provisions of this
Section.
V-14
5.7 Character of Amounts Contributed as Before-Tax Contributions.
-------------------------------------------------------------
Unless otherwise specifically provided to the contrary in this
Plan, amounts deferred pursuant to a Participant's election to make Before-
Tax Contributions in accordance with Section 5.1 (and which qualify for
treatment under Code Section 401(k) and are contributed to the Trust Fund
pursuant to Article VI) shall be treated, for federal and state income tax
purposes, as Participating Employer contributions.
5.8 Participant Transfer/Rollover Contributions.
--------------------------------------------
Effective as of an Eligible Employee's Employment Commencement
Date, or such later date as may be determined by the Administrator,
amounts, if any, distributed to such Eligible Employee or payable to such
Eligible Employee from another plan that satisfies the requirements of Code
Section 401(a), or held in an individual retirement account which is
attributable solely to a rollover contribution within the meaning of Code
Section 408(d)(3), may be transferred to this Plan, including by direct
rollover from another plan that satisfies the requirements of Code Section
401(a), and credited to the Participant's Transfer/Rollover Account in
accordance with Code Section 402 and rules which the Committee shall
prescribe from time to time; provided, however, the Committee determines
that the continued qualification of this Plan under Code Section 401(a) or
401(k) would not be adversely affected by such transfer, or would cause
this Plan to become a "transferee plan," within the meaning of Code
Section 401(a)(ll). Any amounts transferred in accordance
V-15
with this Section 5.8, which shall be in cash, shall not be subject to
distribution to the Participant except as expressly provided under the terms
of this Plan.
V-16
<PAGE>
ARTICLE VI
COMPANY CONTRIBUTIONS
6.1 General.
-------
Subject to the requirements and restrictions of this Article VI
and Article XIV, and subject also to the amendment or termination of the
Plan or the suspension or discontinuance of contributions as provided
herein, a Participating Company shall contribute for each Participant who
is an Employee of such Participating Company, as follows:
(a) An amount to the Participant's Company Contributions
Account equal to the amount specified in the Applicable Appendix.
(b) An amount to the Participant's Before-Tax Contributions
Account which is equal to the amount of the Participant's Before-Tax
Contributions pursuant to Section 5.1 and which qualify for tax
treatment under Code Section 401(k).
(c) An amount to the Participant's Company Matching Account
equal to the amount specified in the Applicable Appendix.
6.2 Requirement for Net Profits.
---------------------------
Contributions by a Participating Employer shall be made without
regard to current or accumulated profits for the year; provided, however,
that the Plan is intended to be designed to qualify as a profit sharing
plan for purposes of Sections 401(a) et seq. of the Code.
-- ----
VI-1
6.3 Special Limitations on After-Tax Contributions and Company Matching
-------------------------------------------------------------------
Contributions.
--------------
With respect to each Plan Year, After-Tax Contributions and
Company Matching Contributions under the Plan for the Plan Year shall not
exceed the limitations on contributions on behalf of Highly Compensated
Employees under Section 401(m) of the Code, as provided in this Section.
For purposes of this Section, excess Before-Tax Contributions
recharacterized as After-Tax Contributions after the close of a Plan Year
shall be treated as After-Tax Contributions in a Plan Year as provided in
Section 5.5(a)(i). In the event that After-Tax Contributions and Company
Matching Contributions under this Plan on behalf of Highly Compensated
Employees for any Plan Year exceed the limitations of this Section for any
reason, such excess contributions and any income allocable thereto shall be
disposed of in accordance with Section 6.4. For purposes of this
Section 6.3, the meaning of the term "Compensation" shall be as defined in
Section 5.4(b).
(a) After-Tax Contributions and Company Matching
Contributions on behalf of Participants under Section 6.1(c) for a
Plan Year shall satisfy the Average Contribution Percentage test set
forth in (i)(A) below, or the Average Contribution Percentage test set
forth in (i)(B) below:
(i) (A) The "Average Contribution Percentage" for
Eligible Employees who are Highly Compensated Employees shall not be more
than the "Average Contribution
VI-2
Percentage" of all other Eligible Employees multiplied by 1.25, or
(i) (B) The excess of the "Average Contribution
Percentage" for Eligible Employees who are Highly Compensated Employees
over the "Average Contribution Percentage" for the other Eligible Employees
shall not be more than two (2) percentage points, and the "Average
Contribution Percentage" for Eligible Employees who are Highly Compensated
Employees shall not be more than the "Average Contribution Percentage" of
all other Eligible Employees multiplied by 2.00.
(ii) The Average Contribution Percentage for Highly
Compensated Employees eligible to participate in this Plan and a plan of
the Company or an Affiliated Company that satisfies the requirements of
Section 401(k) of the Code, including, if applicable, this Plan, shall be
reduced to the extent necessary to satisfy the requirements of Treasury
Regulations Section 1.401(m)-2 or similar such rule.
(b) For purposes of this Section, "Average Contribution
Percentage" means, with respect to a group of Eligible Employees for a
Plan Year, the average of the "Contribution Percentage," calculated
separately for each Eligible Employee in such group. The
"Contribution Percentage" for any Eligible Employee is determined by
dividing the sum of After-Tax Contributions during the Plan Year and
Company Matching Contributions under the Plan on behalf of each
Eligible Employee for such Plan Year, by such Eligible Employee's
Compensation for such Plan Year.
VI-3
"Company Matching Contributions" for purposes of the Average Contribution
Percentage test shall include a Company Matching Contribution only if it
is allocated to the Participant's Company Matching Contributions Account
during the Plan Year and is paid to the Trust Fund by the end of the
twelfth month following the close of the Plan Year. To the extent
determined by the Committee and in accordance with regulations issued by
the Secretary of the Treasury under Code Section 401(m)(3), the Before-Tax
Contributions on behalf of an Eligible Employee and any "qualified
nonelective contributions," within the meaning of Code
Section 401(m)(4)(c), on behalf of an Eligible Employee may also be
taken into account for purposes of calculating the Contribution
Percentage of such Eligible Employee, but shall not otherwise be taken
into account. However, any Company Matching Contributions taken into
account for purposes of determining the Actual Deferral Percentage of
an Eligible Employee under Section 5.4(a) shall not be taken into
account under this Section 6.3.
(c) In the event that as of the last day of a Plan Year
this Plan satisfies the requirements of Section 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Section 410(b) of the Code
only if aggregated with this Plan, then this Section 6.3 shall be
applied by determining the Contribution Percentages of Eligible
Employees as if all such plans were a single plan,
VI-4
in accordance with regulations prescribed by the Secretary of the
Treasury under Section 401(m) of the Code.
(d) For the purposes of this Section, the Contribution
Percentage for any Eligible Employee who is a Highly Compensated
Employee under two or more Code Section 401(a) plans of the Company or
an Affiliated Company to the extent required by Code Section 401(m),
shall be determined in a manner taking into account the participant
contributions and matching contributions for such Eligible Employee
under each of such plans.
(e) If an Eligible Employee (who is also a Highly
Compensated Employee) is subject to the family aggregation rules in
Section 2.26(b)(vi), the combined Average Contribution Percentage for
the family group (which is treated as one Highly Compensated Employee)
shall be the Average Contribution Percentage determined by combining
the After-Tax Contributions, Company Matching Contributions, amounts
treated as Company Matching Contributions under Code
Section 401(m)(3), and Compensation of all the eligible family
members.
(f) The determination of the Contribution Percentage of any
Participant shall be made after first applying the provisions of
Section 14.5 relating to certain limits on Annual Additions under
Section 415 of the Code, then applying the provisions of Section 5.6
relating to the return of Before-Tax Contributions in excess of the
Deferral Limitation, then applying the provisions of Section 5.5
VI-5
relating to certain limits under Section 401(k) of the Code imposed on
Pre-Tax Contributions of Highly Compensated Employees, and last,
applying the provisions of Section 6.5 relating to the forfeiture of
Company Matching Contributions attributable to excess Before-Tax or
After-Tax Contributions.
(g) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(h) The Committee shall keep or cause to have kept such
records as are necessary to demonstrate that the Plan satisfies the
requirements of Code Section 401(m) and the regulations thereunder, in
accordance with regulations prescribed by the Secretary of the
Treasury.
6.4 Provision for Return of Excess After-Tax Contributions and Company
------------------------------------------------------------------
Matching Contributions on Behalf of Highly Compensated Employees.
-----------------------------------------------------------------
(a) The Committee shall determine, as soon as is reasonably
possible following the close of the Plan Year, the extent (if any) to
which After-Tax and Company Matching Contributions on behalf of Highly
Compensated Employees may cause the Plan to exceed the limitations of
Section 6.3 for such Plan Year. If, pursuant to the determination by
the Committee, After-Tax and Company Matching Contributions on behalf
of a Highly Compensated Employee may cause the Plan
VI-6
to exceed such limitations, then the Committee shall take the following
steps:
(i) First, any excess After-Tax Contributions that
were not matched by Company Matching Contributions, and any income
allocable thereto, shall be distributed to the Highly Compensated Employee
(after withholding any applicable income taxes on such amounts).
(ii) Second, if any excess remains after the
provisions of (i) above are applied, to the extent necessary to eliminate
the excess, Company Matching Contributions on behalf of the Highly
Compensated Employee, and any income allocable thereto, shall be forfeited,
to the extent forfeitable under the Plan, or distributed to the Highly
Compensated Employee, to the extent non-forfeitable under the Plan (after
withholding any applicable income taxes on such amounts). Any
corresponding After-Tax Contributions, and any income allocable thereto,
shall be distributed to the Highly Compensated Employee (after withholding
any applicable income taxes on such amounts).
(iii) If administratively feasible, excess After-Tax
Contributions and Company Matching Contributions which are nonforfeitable
under the Plan, including any income allocable thereto, shall be
distributed to Highly Compensated Employees, or, to the extent forfeitable,
forfeited, within two and one-half (2-1/2) months following the close of
the Plan Year for which the excess Contributions were made, but in any
event no later than the end of the first Plan Year following the Plan Year
for which the excess Contributions were made, notwithstanding any other
VI-7
provision in this Plan. Amounts of excess Company Matching Contributions
forfeited by Highly Compensated Employees under this Section, including any
income allocable thereto, shall be applied, to the maximum extent
practicable, to reduce Company Matching Contributions for the Plan Year for
which such excess Contributions were made and thereafter shall be applied
as soon as possible to reduce Company Matching Contributions for succeeding
Plan Years.
(b) The Committee shall determine the amount of any excess
After-Tax Contributions and Company Matching Contributions made by or
on behalf of Highly Compensated Employees for a Plan Year by
application of the leveling method set forth in Proposed Treasury
Regulation Section 1.401(m)-1(e)(2) under which the Contribution
Percentage of the Highly Compensated Employee who has the highest such
percentage for such Plan Year is reduced, to the extent required (i)
to enable the Plan to satisfy the Average Contribution Percentage
test, or (ii) to cause such Highly Compensated Employee's Contribution
Percentage to equal the Contribution Percentage of the Highly
Compensated Employee with the next highest Contribution Percentage.
This process shall be repeated until the Plan satisfies the Average
Contribution Percentage test. For each Highly Compensated Employee,
the amount of excess After-Tax and Company Matching Contributions
shall be equal to the total After-Tax and Company Matching
Contributions (plus any amounts treated as Company Matching
Contributions) made on behalf of such
VI-8
Highly Compensated Employee (determined prior to the application of
the foregoing provisions of this Subsection (b)) minus the amount
determined by multiplying the Highly Compensated Employee's Contribution
Percentage (determined after the application of the foregoing provisions
of this Subsection (b)) by his Compensation.
(c) The determination and correction of excess After-Tax
and Company Matching Contributions made by and on behalf of a Highly
Compensated Employee whose Average Contribution Percentage is
determined under the family aggregation rules in Section 6.3(e) shall
be accomplished by reducing the Average Contribution Percentage of the
Highly Compensated Employee as required under Subsections (a) and (b)
above and allocating the excess After-Tax and Company Matching
Contributions for the family unit among the family members in
proportion to the After-Tax and Company Matching Contributions of each
family member that are combined to determine the Average Contribution
Percentage.
(d) For purposes of satisfying the Average Contribution
Percentage test, income allocable to a Participant's excess After-Tax
Contributions or Company Matching Contributions, as determined under
(b) above, shall be determined by applying procedures comparable to
those provided under Section 5.5.
(e) To the extent required by regulations under
Section 414(m) or 415 of the Code, any excess After-Tax Contributions
or matching Company Contribution forfeited by
VI-9
or distributed to a Highly Compensated Employee in accordance with this
Section shall be treated as an Annual Addition under Article XIV for the
Plan Year for which the excess contribution was made, notwithstanding such
forfeiture or distribution.
6.5 Forfeiture of Company Matching Contributions Attributable to Excess
-------------------------------------------------------------------
Deferrals or Contributions.
---------------------------
To the extent any Company Matching Contributions allocated to a
Participant's Company Matching Contributions Account are attributable to
excess Before-Tax Contributions required to be distributed to the
Participant in accordance with Section 5.5 or 5.6, or excess After-Tax
Contributions required to be distributed to the Participant in accordance
with Section 6.10, such Company Matching Contributions, including any
income allocable thereto, shall be forfeited, notwithstanding that such
Company Matching Contributions may otherwise be nonforfeitable under the
terms of the Plan. Any Company Matching Contributions forfeited by a
Participant in accordance with this Section 6.5 shall be applied to reduce
Company Matching Contributions.
6.6 Investment and Application of Plan Contributions.
-------------------------------------------------
(a) Subject to the provisions of Section 4.1(b), all
contributions to the Trust Fund under Section 6.1 (including Before-
Tax Contributions) and Participant After-Tax Contributions under
Section 5.1 shall be invested as provided in this Section 6.6, subject
to such rules as the Committee may adopt, in its sole discretion, to
implement
VI-10
the provisions of this Section 6.6. The Committee may establish a choice
of investment alternatives for Accounts from which each Participant may
select in determining the manner in which his Account will be invested.
In its sole discretion, the Committee may establish an investment
alternative consisting of Company Stock. If investment alternatives are
established in accordance with this Section 6.6, the following provisions
of this Section 6.6 shall apply, including, in the event the Committee
establishes a Company Stock alternative, the limitations of (iv) below and
the provisions of Article X relating to investments in Company Stock.
(i) A Participant may elect at any time to change an
investment election with respect to the allocation of future contributions
made by him or on his behalf (such election to apply to all such
contributions without regard to any distinction between Company
contributions or Participant contributions) among the investment
alternatives. The Committee may require at least thirty (30) days notice
prior to the commencement of the payroll period for which such change is to
be effective. Any such election shall be made in any whole percentage,
subject to the provisions of Subsection (iv) below.
(ii) Separate Trust Fund Subaccounts shall be
established for each investment alternative selected by a Participant, and
each such Subaccount shall be valued separately.
(iii) A Participant may elect twice per quarter to
change the investment of his Accounts and reallocate
VI-11
such Accounts among the investment alternatives in any whole percentage,
subject to the limitations of (iv) below. Subject to such rules as the
Committee may prescribe, any such election to change shall be effective as soon
as practical following receipt of the Participant's election. Any such change
shall be implemented by the Committee in accordance with practices and
procedures established by the Committee to provide for the orderly
liquidation and/or purchase of investments.
(iv) If a Company Stock alternative is established by
the Committee, each Participant may elect to invest up to a maximum of
twenty-five percent (25%) of contributions made by him or on his behalf
(such limitation to apply to all contributions without regard to any
distinction between Company contributions and Participant contributions) in
the Company Stock alternative in accordance with this Section 6.6. Such a
Participant may also elect to transfer amounts from his Accounts held in
other investment alternatives to the Company Stock alternative in
accordance with this Section 6.6, provided, however, that no such transfer
shall be implemented to the extent that such transfer would result in the
value of the Participant's interest in the Company Stock Fund exceeding
twenty-five percent (25%) of the value of his interest in all investment
alternatives held under the Plan. Notwithstanding the preceding sentence,
neither the Company nor the Committee, nor any representative of the
Company, the Committee or of the Plan shall have any obligation to monitor
the value of a Participant's interest in the Company Stock Fund, or
VI-12
to manage said fund, and no person shall or shall have any authority to
dispose of any Participant's interest in the Company Stock Fund except in
accordance with a Participant's valid election or otherwise in accordance
with express provisions of this Plan.
(v) In the case of a Participant who fails to make an
effective election, for any reason whatsoever, as to how all or any portion
of his interest therein shall be invested, the Committee shall prescribe
rules which shall require that the Accounts of such Participant be invested
in the fixed income fund.
6.7 Irrevocability.
--------------
A Participating Company shall have no right or title to, nor
interest in, the contributions made to the Trust Fund, and no part of the
Trust Fund shall revert to the Participating Company except that on and
after the Effective Date funds may be returned to a Participating Company
as follows:
(a) In the case of a Participating Company contribution
which is made by a mistake of fact, that contribution may be returned
to the Participating Company within one (1) year after it is made.
(b) All contributions to the Trust Fund are conditioned on
deductibility under Code Section 404. In the event deduction is
disallowed for any such contribution, such contribution may be
returned to the Participating Company.
VI-13
6.8 Company, Committee and Trustee Not Responsible for Adequacy of Trust
--------------------------------------------------------------------
Fund.
----
The Company, Committee and Trustee shall not be liable or
responsible for the adequacy of the Trust Fund to meet and discharge any or
all payments and liabilities hereunder. All Plan benefits will be paid
only from the Trust assets, and neither the Company, the Committee nor the
Trustee shall have any duty or liability to furnish the Trust with any
funds, securities or other assets except as expressly provided in the Plan.
Except as required under the Plan or Trust or under Part 4 of Title I of
ERISA, the Company shall not be responsible for any decision, act or
omission of the Trustee, the Committee, or the Investment Manager (if
applicable), and shall not be responsible for the application of any
moneys, securities, investments or other property paid or delivered to the
Trustee.
VI-14
<PAGE>
ARTICLE VII
PARTICIPANT ACCOUNTS AND ALLOCATIONS
7.1 General.
-------
(a) All contributions under this Plan shall be held in the
Trust Fund.
(b) All gains, losses, dividends and other property
acquisitions and/or transfers that occur with respect to the Trust
Fund shall be held, charged, credited, debited or otherwise accounted
for under said fund on an unallocated basis until allocated to
Participants' Accounts as of a Valuation Date as provided under this
Plan or otherwise used or applied in accordance with the provisions of
this Plan.
7.2 Participants' Accounts.
----------------------
In order to account for the allocated interest of each
Participant in the Trust Fund, there shall be established and maintained
the Accounts described in Section 2.1.
7.3 Revaluation of Participants' Accounts.
-------------------------------------
As of each Valuation Date, the Accounts of each Participant shall
be revalued so as to reflect a proportionate share in any increase or
decrease in the fair market value of the assets in the Trust Fund as of
that date as compared with the value of the assets in the Trust Fund as of
the immediately preceding Valuation Date. The valuation and allocation
provisions of this Section 7.3 shall be applied and implemented in
accordance with the following rules:
VII-1
(a) As of each Valuation Date the Accounts holding such
assets shall be revalued so as to reflect to each such Account a
proportionate share in the net income or loss of the assets since the
immediately preceding Valuation Date.
(b) The Company, Committee and Trustee do not in any manner
or to any extent whatsoever warrant, guarantee or represent that the
value of a Participant's Accounts shall at any time equal or exceed
the amount previously contributed thereto.
7.4 Treatment of Accounts Following Termination of Employment.
---------------------------------------------------------
Following a Participant's termination of employment, pending
distribution of the Participant's Distributable Benefit pursuant to the
provisions of Article VIII below, the Participant's Plan Accounts shall
continue to be maintained and accounted for in accordance with all
applicable provisions of this Plan.
7.5 Accounting Procedures.
---------------------
The Committee and the Trustee shall establish accounting
procedures for the purpose of making the allocations, valuations and
adjustments to Participants' Accounts provided for in this Article VII.
From time to time the Committee and Trustee may modify such accounting
procedures for the purpose of achieving equitable, nondiscriminatory, and
administratively feasible allocations among the Accounts of Participants in
VII-2
accordance with the general concepts of the Plan and the provisions of this
Article VII.
VII-3
<PAGE>
ARTICLE VIII
VESTING; PAYMENT OF PLAN BENEFITS
8.1 Vesting.
-------
Each Participant's vested interest in his Accounts shall be
determined as follows:
(a) Each Participant shall at all times be one hundred
percent (100%) vested in his Before-Tax Contributions Account, his
After-Tax Contributions Account and his Transfer/Rollover Account
under the Plan.
(b) Each Participant shall become vested in his Company
Matching Account and his Company Contributions Account according to
the table set forth below:
Number of Vesting
Years of Service Percentage
---------------- ----------
Less than 1 0
At least 1 but less 0
than 2
At least 2 but less 25
than 3
At least 3 but less 50
than 4
At least 4 but less 75
than 5
5 or more 100
(c) Reserved for Plan modifications.
-------------------------------
(d) Additionally a Participant shall become one hundred
percent (100%) vested in his Company Matching Account and his Company
Contributions Account upon attainment of Normal Retirement Date while
an Employee, or in the event of death or Total and Permanent
Disability while an Employee.
VIII-1
8.2 Distribution Upon Retirement.
----------------------------
(a) A Participant may retire from the employment of the
Company on his Normal Retirement Date. Subject to the required
distribution rules under (b) below, if the Participant continues in
the service of the Company beyond his Normal Retirement Date, he shall
continue to participate in the Plan in the same manner as Participants
who have not reached their Normal Retirement Dates. At the subsequent
termination of the Participant's employment on his late retirement
date, his Distributable Benefit shall be based upon the value of his
Accounts as of the applicable Valuation Date determined with reference
to the date of distribution. After a Participant has reached his
Normal Retirement Date, any termination of the Participant's
employment (other than by reason of death or disability) shall be
deemed a Normal Retirement.
(b) Upon Normal Retirement a Participant shall be entitled
to a distribution of his Distributable Benefit in the Trust Fund.
Such distribution shall be made or commence to be made as soon as
practicable but no later than the sixtieth day after the close of the
Plan Year in which occurs the Participant's termination of employment
with the Company and all Affiliated Companies; provided, however, in
the case of a Participant who is a "5-percent owner" (within the
meaning of Section 401(a)(9) of the Code) and, in the case of any
Participant who attains age 70-1/2 after December 31, 1987,
distribution shall be made not later than
VIII-2
April 1 following the calendar year in which such Participant attains
age 70-1/2, whether or not the Participant's employment has terminated.
8.3 Distribution Upon Death Prior to Termination of Employment.
----------------------------------------------------------
(a) Upon the death of a Participant during his employment
the Committee shall direct the Trustee to make a distribution of the
Participant's Distributable Benefit in the Trust Fund to the
Beneficiary designated by the deceased Participant, or as otherwise
determined under Section 8.9.
(b) Distribution as provided in Section 8.3(a) shall be
made or commence to be made not later than sixty (60) days after the
close of the Plan Year in which all facts required by the Committee to
be established as a condition of payment shall have been established
to the satisfaction of the Committee (provided that, to the extent
required by Section 401(a)(9) of the Code, his entire Distributable
Benefit shall be distributed within five (5) years of such
Participant's death).
8.4 Death After Termination of Employment.
-------------------------------------
Upon the death of a former Participant after his retirement or
other termination of employment, but prior to the distribution of his
Distributable Benefit in the Trust Fund to which he is entitled, the
Committee shall direct the Trustee to make a distribution of the balance to
which the deceased Participant was entitled, to the Beneficiary designated
by the
VIII-3
deceased Participant or as otherwise determined under Section 8.9.
8.5 Termination of Employment Prior to Normal Retirement Date.
---------------------------------------------------------
(a) Subject to the provisions of Section 8.5(b) below, if a
Participant's employment for the Company and all Affiliated Companies
terminates prior to his Normal Retirement Date, his Distributable
Benefit in the Trust Fund shall be paid in a lump sum distribution as
soon as administratively feasible following his Normal Retirement
Date, or prior to his Normal Retirement Date in accordance with
Subsection 8.5(b). Unless the Participant's Distributable Benefit is
payable prior to his Normal Retirement in accordance with (b), the
Participant shall be deemed to have elected to defer distribution
until his Normal Retirement Date. In no event shall such distribution
be later than sixty (60) days after the close of the Plan Year in
which occurs the Participant's Normal Retirement Date.
(b) If the Participant makes a valid written election in
accordance with (c) below (and without regard to any such election if
the distribution is not more than $3,500), payment of his
Distributable Benefit pursuant to this Section 8.5 may be made on an
earlier date which is not later than sixty (60) days after the close
of the Plan Year in which occurs the Participant's termination of
employment with the Company and all Affiliated Companies, to the extent
VIII-4
administratively feasible. For purposes of Section 72(t) of
the Code, any distribution to a Participant in accordance with this
Section 8.5 during or following the year in which he attains age
fifty-five (55) shall be deemed to be on account of an event
enumerated in Code Section 72(t)(2).
(c) Any written election by a Participant to receive
payment of his Distributable Benefit prior to Normal Retirement Date
shall not be valid unless such election is made both (A) after the
Participant receives a written notice advising him of his right to
defer payment to Normal Retirement Date and (B) within the ninety (90)
day period ending on the Participant's "Benefit Starting Date." The
notice to the Participant advising him of his right to defer payment
shall be given no less than thirty (30) nor more than ninety (90) days
prior to the Participant's Benefit Starting Date. For purposes of
this Subsection(c), "Benefit Starting Date" shall mean the first day
of the first period for which the Participant's Distributable Benefit
is paid. Notwithstanding the foregoing, payment of the Participant's
Distributable Benefit may commence less than thirty (30) days after
receipt of the notice, provided that the Plan Administrator clearly
informs the Participant that the Participant has a right to a period
of at least thirty (30) days after receiving the notice to consider
the decision of whether or not to elect to receive payment and the
Participant, after receiving the notice, affirmatively elects to
receive payment.
VIII-5
(d) In the event a Participant is not fully vested in all
of his Company Contributions Account or Company Matching Account under
the Plan, the portion of such Accounts which is not vested shall be
forfeited as of the earlier of the date such Accounts are distributed
to him or the date he incurs five (5) consecutive one-year Periods of
Severance.
(e) Notwithstanding the foregoing, if a Participant ceases
to be an Employee by reason of the disposition by the Company or an
Affiliated Company of either (i) substantially all of the assets used
by the Company or an Affiliated Company, as the case may be, in a
trade or business, or (ii) the interest of the Company or an
Affiliated Company, as the case may be, in a subsidiary, such
Participant shall be entitled to distribution of his Distributable
Benefit as if, for purposes of this Plan only, such event constitutes
a termination of employment.
8.6 Withdrawals.
-----------
(a) Subject to the succeeding provisions of this
Section 8.6, while he is still an Eligible Employee, a Participant may
withdraw amounts from his Accounts under the Plan; provided, however,
that not more than one withdrawal may be made by a Participant from
his Accounts within any single quarter of a Plan Year. Payment of a
withdrawal shall be made only in cash and shall be allocated pro rata
among the Participant's investment fund subaccounts,
VIII-6
including any Company Stock subaccount. In no event may any amount be
withdrawn by a Participant after he ceases to be an Eligible Employee.
(b) A withdrawal from a Participant's Transfer/Rollover
Account may be made in accordance with rules of uniform application
which the Committee may from time to time prescribe.
(c) A withdrawal from a Participant's After-Tax
Contribution Account may be made in accordance with rules of uniform
application which the Committee may from time to time prescribe;
provided, however, that except in the case of a Participant who is
determined to have a Total and Permanent Disability and who is
ineligible to make further contributions under Section 5.1, no amount
representing After-Tax Contributions made within the preceding six
months to the Plan which were matched by Company Matching
Contributions may be withdrawn from such Account.
(d) A withdrawal from a Participant's Before-Tax
Contributions Account may be made in accordance with rules of uniform
application which the Committee may from time to time prescribe;
provided, however, no Participant may withdraw from his Before-Tax
Contributions Account prior to attaining age 59-1/2 or a determination
by the Committee that such Participant has a Total and Permanent
Disability or that the withdrawal is necessary to relieve a Hardship
of the Participant or his family. For purposes of this
Section 8.6(d), a withdrawal may be considered to be
VIII-7
necessary on account of a Hardship of the Participant if the Committee
determines that the amount required to meet such Hardship is not readily
available to the Participant from other resources, in accordance with
regulations prescribed by the Secretary of the Treasury under
Section 401(k) of the Code. The Committee may determine that a
withdrawal is necessary on account of a Hardship on the basis of facts
and circumstances, as provided in (i) below, or on the basis of the
criteria specified in (ii) below:
(i) A distribution generally may be treated as
necessary on account of a Hardship of a Participant if the Committee
reasonably relies on the Participant's representations to the Committee,
unless the Committee has actual knowledge to the contrary, that the
Hardship cannot be relieved (A) through reimbursement or compensation by
insurance or otherwise, (B) by reasonable liquidation of assets, if such
liquidation would not itself cause an immediate and heavy financial need,
(C) by the cessation of Participant Before-Tax Contributions to the Plan,
or (D) by other distributions or non-taxable loans from plans of the
Company or any other employer, or by borrowing from commercial sources on
reasonable commercial terms, unless the obligation to repay the loan would
be inconsistent with the purpose of the withdrawal. For purposes of this
Section, a Participant's resources shall be deemed to include those assets
of his spouse and minor children that are reasonably available to the
Participant.
VIII-8
(ii) A distribution shall be deemed by the Committee
to be necessary on account of a Hardship of a Participant if all of the
following requirements are satisfied: (A) the distribution is not in
excess of the amount of the Hardship, (B) the Participant has obtained all
distributions (other than Hardship distributions) and all non-taxable loans
(at the time of the loan) currently available under all plans maintained by
the Company, (C) the Participant's Before-Tax Contributions and After-Tax
Contributions and employee contributions under all qualified and
nonqualified plans of deferred compensation maintained by the Company,
including a stock option, stock purchase, or similar plan, or a cash or
deferred arrangement that is part of a cafeteria plan within the meaning of
Code Section 125, will be suspended under the terms of each such plan, or
in accordance with the terms of an otherwise legally enforceable agreement,
for twelve (12) months following the receipt of the distribution, and
(D) the Deferral Limitation for the Participant for the Participant's
taxable year following the taxable year of distribution is reduced by the
amount of the Participant's Before-Tax Contributions for the taxable year
of distribution.
No earnings credited to a Participant's Before-Tax Contributions
Account shall be available for a Hardship withdrawal.
(e) A withdrawal from a Participant's vested interest in
his Company Contributions Account may be made in accordance with rules
of uniform application which the
VIII-9
Committee may from time to time prescribe; provided, however, that no
Participant may withdraw from his Company Contributions Account prior
to attaining age 59-1/2 or a determination by the Committee that such
Participant has a Total and Permanent Disability or that the withdrawal
is necessary to relieve a Hardship of the Participant or his family.
(f) A withdrawal from the vested portion of a Participant's
Company Matching Account may be made in accordance with rules of
uniform application which the Committee may from time to time
prescribe; provided, however, that unless the Participant has
completed an aggregate of at least sixty (60) months of participation
in this Plan as of the date of withdrawal or has attained age 59-1/2
or is determined by the Committee to have Total and Permanent
Disability, any withdrawal from such Company Matching Account shall
not include amounts attributable to Company contributions made within
the two (2) year period preceding withdrawal.
(g) If a Participant makes an in-service withdrawal from
his Company Contributions Account or Company Matching Account at a
time when the Participant does not have a one hundred percent (100%)
vested interest in the value of such Account, and the Participant may
increase his vested interest in the Account:
(i) such Account shall be established as a separate
Account as of the date of distribution, and
VIII-10
(ii) at any relevant time the Participant's vested
interest in the value of such separate Account shall be equal to an amount
("X") determined by the formula:
X = P(AB + D) - D
For purposes of applying the formula above: P is the nonforfeitable
percentage at the relevant time, AB is the Account balance at the
relevant time, and D is the amount of the withdrawal.
(h) Disbursement of withdrawals shall be as soon as
administratively practicable after the submission of a request for
withdrawal in form satisfactory to the Committee.
8.7 Form of Distribution.
--------------------
(a) Unless a Participant makes a written election in
accordance with Section 8.8 below, a Participant's Distributable
Benefit shall be payable in the form of a single sum distribution.
Except for any portion of such Distributable Benefit that is payable
in the form of Company Stock in accordance with Section 8.13, such
distribution shall be in cash.
(b) In the case of any disbursement from a Participant's
Accounts, such disbursement shall be made ratably from such investment
funds or investment vehicles in which such Participant's Accounts
affected by such disbursement are invested.
VIII-11
8.8 Election for Direct Rollover of Distributable Benefit to Eligible
-----------------------------------------------------------------
Retirement Plan.
---------------
(a) To the extent required by Section 401(a)(31) of the
Code, a Participant who is eligible to receive payment of his
Distributable Benefit shall be entitled to elect a direct rollover of
all or part of the taxable portion of his Distributable Benefit to an
"eligible retirement plan." For purposes of this Section, an
"eligible retirement plan" shall mean any plan described in Code
Section 402(c)(8)(B), except that such plan must be a defined
contribution plan, the terms of which permit the acceptance of a
direct rollover from a qualified plan. Any non-taxable portion of the
Participant's Distributable Benefit shall be payable to the
Participant in accordance with Section 8.7 above.
(b) A Participant's direct rollover election under this
Section shall be in writing and shall be made in accordance with rules
and procedures established by the Committee. Such election shall
specify the dollar or percentage amount of the Distributable Benefit
to be rolled over, the name of the eligible retirement plan selected
by the Participant, and such additional information as the Committee
deems necessary or appropriate in order to implement the election. It
shall be the Participant's responsibility to confirm that the eligible
retirement plan designated in his direct rollover election will accept
the direct rollover of his Distributable Benefit. The Committee
VIII-12
shall be entitled to direct the rollover based on its reasonable reliance
on information provided by the Participant, and shall be not required to
independently verify such information, unless it is clearly
unreasonable not to do so.
(c) At least thirty (30) days, but not more than ninety
(90) days, prior to the date a Participant's Distributable Benefit
becomes payable, the Participant shall be given written notice of any
right he may have to elect a direct rollover of the taxable portion of
his Distributable Benefit to an eligible retirement plan.
Notwithstanding the foregoing, a direct rollover of the Participant's
Distributable Benefit may be made less than thirty (30) days after
receipt of the notice, provided that the Plan Administrator clearly
informs the Participant that the Participant has a right to a period
of at least thirty (30) days after receiving the notice to consider
the decision of whether or not to elect a direct rollover and the
Participant, after receiving the notice, affirmatively elects a direct
rollover.
(d) If a Participant who attained his Normal Retirement
Date or whose Distributable Benefit does not exceed $3,500 fails to
file a written election with the Committee within ninety (90) days
after notice is given, or if the Committee cannot effect the direct
rollover within a reasonable time after the election is filed due to
the failure of the Participant to take such actions as may be
VIII-13
required by the eligible retirement plan before it will accept the direct
rollover, the Participant's Distributable Benefit shall be paid to him
after withholding applicable income taxes.
(e) If a Participant has made a direct rollover election
with respect to any portion of his Distributable Benefit that is
payable in Company Stock, as provided in Section 8.13, unless the
eligible retirement plan specified by the Participant will accept a
direct rollover of such Stock, the Stock will be distributed to the
Participant, notwithstanding the Participant's direct rollover
election.
(f) To the extent required by Section 401(a)(31) of the
Code, if all or a portion of a Participant's Distributable Benefit is
payable to the Participant's surviving Spouse, or to a former Spouse
in accordance with a "qualified domestic relations order," such
surviving Spouse or former Spouse shall be entitled to elect a direct
rollover of all or a portion of such distribution in accordance with
the provisions of this Section.
8.9 Designation of Beneficiary.
--------------------------
(a) Subject to the provisions of Section 8.11, each
Participant shall have the right to designate a Beneficiary or
Beneficiaries to receive his interest in the Trust Fund in the event
of his death before receipt of his entire interest in the Trust Fund.
This designation is to
VIII-14
be made on the form prescribed by and delivered to the Committee.
(b) Subject to the provisions of Section 8.11, a
Participant shall have the right to change or revoke any such
designation by filing a new designation or notice of revocation with
the Committee. Subject to the provisions of Section 8.11, no notice
to any Beneficiary nor consent by any Beneficiary shall be required to
effect any such change or revocation.
(c) If a deceased Participant shall have failed to
designate a Beneficiary, or if the Company shall be unable to locate a
designated Beneficiary after reasonable efforts have been made, or if
for any reason the designation shall be legally ineffective, or if the
Beneficiary shall have predeceased the Participant without effectively
designating a successor Beneficiary, any distribution required to be
made under the provisions of this Plan shall commence within three (3)
years after the Participant's death to the person or persons included
in the highest priority category among the following, in order of
priority:
(i) The Participant's surviving spouse;
(ii) The Participant's surviving children, including
adopted children;
(iii) The Participant's surviving parents; or
(iv) The Participant's estate.
VIII-15
The determination by the Committee as to which persons, if any,
qualify within the foregoing categories shall be final and conclusive
upon all persons.
(d) In the event that the deceased Participant was not a
resident of California at the date of his death, the Committee, in its
discretion, may require the establishment of ancillary administration
in California. In the event that a Participant shall predecease his
Beneficiary and on the subsequent death of the Beneficiary a remaining
distribution is payable under the applicable provisions of this Plan,
the distribution shall be payable in the same order of priority
categories as set forth above but determined with respect to the
Beneficiary, subject to the same provisions concerning non-California
residency, the unavailability of an estate representative and/or the
absence of administration of the Beneficiary's estate as are
applicable on the death of the Participant.
8.10 Facility of Payment.
-------------------
If any payee under the Plan is a minor or if the Committee
reasonably believes that any payee is legally incapable of giving a valid
receipt and discharge for any payment due him, the Committee may have the
payment, or any part thereof, made to the person (or persons or
institution) whom it reasonably believes is caring for or supporting the
payee, unless it has received due notice of claim therefor from a duly
appointed guardian or committee of the payee. Any payment shall be a
VIII-16
payment from the Accounts of the payee and shall, to the extent thereof, be
a complete discharge of any liability under the Plan to the payee.
8.11 Requirement of Spousal Consent.
------------------------------
Notwithstanding any Beneficiary designation submitted by a
Participant, any distribution required to be made under the terms of the
Plan by reason of the death of the Participant shall be paid in full to the
Participant's surviving spouse, unless there is no surviving spouse or the
spouse consents in writing to the beneficiary designation, acknowledging
the effect of the election. Any such spousal consent, to be valid, must be
witnessed by a plan representative or a notary public. The spousal consent
requirement of this Section 8.11 shall be waived and the Participant's
Beneficiary designation shall be made effective if the Participant
establishes to the satisfaction of the Committee that the required consent
cannot be obtained because there is no spouse or the spouse cannot be
located.
8.12 Additional Documents.
--------------------
(a) The Committee or Trustee, or both, may require the
execution and delivery of such documents, papers and receipts as the
Committee or Trustee may determine necessary or appropriate in order
to establish the fact of death of the deceased Participant and of the
right and identity of any Beneficiary or other person or persons
claiming any benefits under this Article VIII.
VIII-17
(b) The Committee or the Trustee, or both, may, as a
condition precedent to the payment of death benefits hereunder,
require an inheritance tax release and/or such security as the
Committee or Trustee, or both, may deem appropriate as protection
against possible liability for state or federal death taxes
attributable to any death benefits.
8.13 Company Stock Distribution.
--------------------------
Except in the case of a withdrawal in accordance with Section
8.6, payment of any portion of a Participant's Distributable Benefit held
in his Company Stock subaccount shall be paid in Company Stock, unless the
Participant elects in writing in accordance with procedures established by
the Committee that payment shall be made in cash in lieu of Company Stock
(which election may apply to a payment to the trustee of an "eligible
retirement plan" in accordance with Section 8.8). Within a reasonable
period of time prior to the date such Participant's Distributable Benefit
is to be paid, the Committee shall notify the Participant of his right to
elect to have payment of the value of his Company Stock subaccount made in
the form of a cash distribution in lieu of a Company Stock distribution.
Upon being so notified, the Participant shall have a reasonable time (at
least thirty (30) days) in which to file a written election to have such
payment made in cash. Any such election shall be irrevocable and shall
operate to require the Trustee to value such Company Stock as of the
immediately
VIII-18
following Valuation Date at the then prevailing purchase price.
Neither the Company, the Committee, nor the Trustee shall be required to
time the distribution or sale of Company Stock to anticipate fluctuations
in the purchase price. If a Participant fails to file a written election
to receive a cash payment of the value of the portion of his Distributable
Benefit attributable to his Company Stock subaccount within thirty (30)
days of receiving notification, payment shall be made in Company Stock.
8.14 Valuation of Accounts.
---------------------
(a) For purposes of determining a Participant's
Distributable Benefit under this Plan, the value of a Participant's
Accounts shall be determined in accordance with rules prescribed by
the Committee, subject, however, to the following provisions:
(i) Unless the provisions of (ii) below apply, if a
Participant's employment terminates for any reason other than death, the
value of a Participant's Accounts shall be determined as of the Valuation
Date coinciding with or next following the date on which a properly
completed application for payment or transfer of the Participant's
Distributable Benefit, and such other forms as may be required by the
Committee in order to process the distribution or transfer, are received by
the Committee.
(ii) If a Participant's employment terminates for any
reason other than death and the Committee does not receive the
Participant's properly completed application for
VIII-19
the payment or transfer of the Participant's Distributable Benefit, and such
other forms as may be required by the Committee to process the payment or
transfer, and the value of such Participant's Accounts at the applicable
Valuation Date does not exceed $3500, the applicable Valuation Date shall be
the Valuation Date coinciding with or next following the expiration of a
reasonable period of time after the Participant is furnished with such
application and forms, including any tax notice required under Code Section
402(f).
(iii) In the case of a Participant's death, the value
of a Participant's Accounts for purposes of determining the Participant's
Distributable Benefit shall be determined as of the Valuation Date
coinciding with or next following the date on which the Committee has been
furnished with all documents and information (including but not limited to
proof of death, facts demonstrating the identity and entitlement of any
Beneficiary or other payee, and any and all releases) necessary to
distribute such Participant's Accounts.
(iv) In the case of any withdrawal or loan, the value
of a Participant's Accounts under the Plan shall be determined as of the
Valuation Date coinciding with or next following the date on which the
Participant submits a request for such withdrawal or loan in a form
satisfactory to the Committee and the withdrawal or loan is approved.
(v) The value of a Participant's Accounts shall be
increased or decreased (as appropriate) by any contributions, forfeitures,
or distributions properly allocable
VIII-20
under the terms of this Plan to his Accounts that occurred on or after the
most recent Valuation Date or for any other reason were not otherwise
reflected in the valuation of his Accounts on such Valuation Date.
(b) Neither the Committee, the Company, nor the Trustee
shall have any responsibility for any increase or decrease in the
value of a Participant's Accounts as a result of any valuation made
under the terms of this Plan after the date of his termination of
employment and before the date of the distribution of his Accounts to
him. Also, neither the Committee, the Company, nor the Trustee shall
have any responsibility for failing to make any interim valuation of a
Participant's Accounts between the date of distribution to the
Participant of his Accounts and the applicable Valuation Date, even
though the Plan assets may have been revalued in that interim for a
purpose other than to revalue the Accounts under this Plan.
8.15 Forfeitures; Repayment.
----------------------
(a) Amounts forfeited in accordance with Section 8.5(d)
shall be applied as soon as practicable to reduce future Company
contributions.
(b) A Participant who elects to receive a distribution
pursuant to Subsection 8.5(b) may, in the case of his reemployment as
an Eligible Employee, repay the total amount distributed and shall in
such case be fully restored in amounts forfeited in accordance with
Section 8.5(d);
VIII-21
provided, however, that no such repayment shall be permitted unless such
repayment is made prior to the date the Participant incurs five (5)
consecutive one-year Periods of Severance and prior to the fifth
anniversary of his Employment Commencement Date following the Period
of Severance.
8.16 Loans.
-----
(a) From time to time, the Committee may adopt procedures
whereby a Participant may borrow from his Accounts under the Plan. In
no event may any amount be borrowed by a Participant after he ceases
to be an Eligible Employee. In addition to such other requirements as
may be imposed by applicable law, any such loan shall bear a
reasonable rate of interest, shall be adequately secured by proper
collateral, and shall be repaid within a specified period of time
according to a written repayment schedule that calls for substantially
level amortization over the term of the loan.
(b) In connection with the requirements set forth in
Subsection (a) above, the Committee shall establish the applicable
interest rate, which shall be reasonably equivalent to interest rates
available commercially with respect to similar loans. Without
prejudice to the right of any Participant and the Trustee to enter
into other appropriate arrangements to secure repayment of a loan
pursuant to this Section 8.16, a loan to a Participant
VIII-22
hereunder may be secured by an interest in the Participant's vested
interest in his Accounts under this Plan. Any loan shall by its terms
require repayment within five (5) years in substantially level payments
made no less frequently than quarterly, except that the repayment period
may in the discretion of the Committee be up to a maximum of fifteen
(15) years in the case of a loan certified by the Participant to be
used to acquire any dwelling unit which within a reasonable time is to
be used (determined at the time the loan is made) as a principal
residence of the Participant.
(c) In no event shall the principal amount of a loan
hereunder, at the time the loan is made, together with the outstanding
balance of all other loans to the Participant under this Plan, exceed
the lesser of:
(i) fifty percent (50%) of the value of the
Participant's vested interest in his Accounts under this Plan, or
(ii) fifty thousand dollars ($50,000), reduced by the
highest outstanding loan balance of the Participant from the Plan during
the 1-year period ending on the day before the date on which such loan was
made.
No loan less than two thousand dollars ($2,000) will be made. Unless
otherwise determined by the Committee, no Participant may have more
than one loan outstanding under this Plan on any date.
(d) Each Participant desiring to enter into a loan
arrangement pursuant to this Section 8.16 shall apply
VIII-23
for a loan by submitting a loan request in form satisfactory to the
Committee. The Committee shall notify the Participant within a
reasonable time whether the request is approved or denied. Upon approval
of the request by the Committee, the Participant shall enter into a loan
agreement with the Trustee. Such a Participant shall execute such
further written agreements as may be necessary or appropriate to
establish a bona fide debtor-creditor relationship between such
Participant and the Trustee and to protect against the impairment of
any security for said loan.
(e) Any loan made to a Participant shall be secured by a
pro rata portion of his vested investment fund subaccounts, including
any Company Stock subaccount. Repayments of a loan by a Participant
shall be invested among the Participant's investment fund subaccounts
in accordance with the Participant's investment election then in
effect under Section 6.6(a)(i).
(f) Loans shall be repaid in accordance with the repayment
schedule provided under the terms of the loan agreement.
Notwithstanding the repayment schedule provided in a loan agreement,
however, the amount of any outstanding loan shall be due and payable
on the earlier to occur of (a) the date on which distribution is made
or commences to be made of the participant's vested interest under the
Plan or (b) the expiration of one hundred eighty (180) days following
the date the Participant ceases to be an Employee.
VIII-24
Following a Participant's Severance Date, any outstanding loan amount
which has become due and payable under the foregoing rule or otherwise,
and which is secured by the Participant's vested interest in his Accounts,
shall be treated as distributed from the Plan to the Participant.
(g) In the event a Participant fails to repay a loan in
accordance with the terms of a loan agreement, such loan shall be
treated as in default. The date of the enforcement of the security
interest due to a loan in default shall be determined by the
Committee, provided no loss of principal or income shall result due to
any delay in the enforcement of the security interest due to the
default. As of the Participant's Severance Date, the Participant's
Distributable Benefit shall be reduced by the outstanding amount of a
loan which is then in default, including any accrued interest thereon,
that is secured by the Participant's vested interest in his Accounts.
Any reasonable costs related to collection of a loan made hereunder
shall be borne by the Participant.
(h) To the extent required to comply with the requirements
of Section 401(a)(4) of the Internal Revenue Code, loans hereunder
shall be made in a uniform and non-discriminatory manner.
8.17 Special Rule for Disabled Employees.
-----------------------------------
(a) Subsection 8.17(b) shall apply to any Participant whose
active performance of services for a
VIII-25
Participating Company has ceased by reason of disability, and who has not
subsequently resumed the active performance of such services.
(b) In the case of a Participant to whom this
Section 8.17(b) applies, so long as such Participant continues to
receive Compensation from a Participating Company, but in no event for
longer than a period of six (6) months commencing with the date of
such Participant's cessation of active service, such Participant may
continue to participate in this Plan in the same manner as any other
Participant.
(c) Reserved for Plan modifications.
-------------------------------
(d) Reserved for Plan modifications.
-------------------------------
(e) For purposes of this Plan, a Participant shall not be
deemed to have terminated employment prior to his ceasing to be
eligible for contributions under this Section 8.17, and upon such
cessation of eligibility shall be deemed to have terminated employment
only if he did not then begin or recommence employment for the Company
or an Affiliated Company.
8.18 Reserved for Plan Modifications.
-------------------------------
VIII-26
<PAGE>
ARTICLE IX
OPERATION AND ADMINISTRATION OF THE PLAN
9.1 Plan Administration.
-------------------
(a) Authority to control and manage the operation and
administration of the Plan shall be vested in a committee
("Committee") as provided in this Article IX.
(b) The members of the Committee shall be appointed by the
Board of Directors and shall hold office until resignation, death or
removal by the Board of Directors. Members of the Committee may, but
need not be, appointed by appropriate designation of a Committee
heretofore constituted pursuant to the provisions of another employee
benefit plan maintained by the Company.
(c) For purposes of ERISA Section 402(a), the members of
the Committee shall be the Named Fiduciaries of this Plan.
(d) The Secretary of the Committee shall cause to be
attached to the copy of the Plan maintained in the office of the
Committee for the purpose of inspection an accurate schedule listing
the names of all persons from time to time serving as the Named
Fiduciaries of the Plan.
(e) Notwithstanding the foregoing, a Trustee with whom Plan
assets have been placed in trust or an Investment Manager appointed
pursuant to Section 9.3 may be granted exclusive authority and
discretion to manage and control all or any portion of the assets of
the Plan.
IX-1
9.2 Committee Powers.
----------------
The Committee shall have all powers and discretion necessary to
supervise the administration of the Plan and control its operations. In
addition to any powers and authority conferred on the Committee elsewhere
in the Plan or by law, the Committee shall have, by way of illustration but
not by way of limitation, the following powers and authority:
(a) To allocate fiduciary responsibilities (other than
trustee responsibilities) among the Named Fiduciaries and to designate
one or more other persons to carry out fiduciary responsibilities
(other than trustee responsibilities). However, no allocation or
delegation under this Section 9.2(a) shall be effective until the
person or persons to whom the responsibilities have been allocated or
delegated agree to assume the responsibilities. The term "trustee
responsibilities" as used herein shall have the meaning set forth in
Section 405(c) of ERISA. The preceding provisions of this
Section 9.2(a) shall not limit the authority of the Committee to
appoint one or more Investment Managers in accordance with
Section 9.3.
(b) To designate agents to carry out responsibilities
relating to the Plan, other than fiduciary responsibilities.
(c) To employ such legal, actuarial, medical, accounting,
clerical and other assistance as it may deem appropriate in carrying
out the provisions of this Plan, including one or more persons to
render advice with regard
IX-2
to any responsibility any Named Fiduciary or any other fiduciary may
have under the Plan.
(d) To establish rules and regulations from time to time
for the conduct of the Committee's business and the administration and
effectuation of this Plan.
(e) To administer, interpret, construe and apply this Plan
in its discretion and to decide all questions which may arise or which
may be raised under this Plan by any Employee, Participant, former
Participant, Beneficiary or other person whatsoever, including but not
limited to all questions relating to eligibility to participate in the
Plan, the amount of service of any Participant, and the amount of
benefits to which any Participant or his Beneficiary may be entitled
by reason of his service prior to or after the Effective Date hereof.
(f) To determine the manner in which the assets of this
Plan, or any part thereof, shall be disbursed.
(g) To direct the Trustee, in writing, from time to time,
to invest and reinvest the Trust Fund, or any part thereof, or to
purchase, exchange, or lease any property, real or personal, which the
Committee may designate. This shall include the right to direct the
investment of all or any part of the Trust in any one security or any
one type of securities permitted hereunder. Among the securities
which the Committee may direct the Trustee to purchase are "employer
securities" as defined in Code Section 409A(1) or any successor
statute thereto.
IX-3
(h) To perform or cause to be performed such further acts
as it may deem to be necessary, appropriate or convenient in the
efficient administration of the Plan.
Any action taken in good faith by the Committee in the exercise of
authority conferred upon it by this Plan shall be conclusive and binding
upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute.
9.3 Investment Manager.
------------------
(a) The Committee, by action reflected in the minutes
thereof, may appoint one or more Investment Managers, as defined in
Section 3(38) of ERISA, to manage all or a portion of the assets of
the Plan.
(b) An Investment Manager shall discharge its duties in
accordance with applicable law and in particular in accordance with
Section 404(a)(1) of ERISA.
(c) An Investment Manager, when appointed, shall have full
power to manage the assets of the Plan for which it has
responsibility, and neither the Company nor the Committee shall
thereafter have any responsibility for the management of those assets.
9.4 Periodic Review.
---------------
(a) At periodic intervals, not less frequently than
annually, the Committee shall review the long-run and short-run
financial needs of the Plan and shall determine a funding policy for
the Plan consistent with the objectives
IX-4
of the Plan and the minimum funding standards of ERISA, if applicable.
In determining the funding policy the Committee shall take into account,
at a minimum, not only the long-term investment objectives of the Trust
Fund consistent with the prudent management of the assets thereof, but
also the short-run needs of the Plan to pay benefits.
(b) All actions taken by the Committee with respect to the
funding policy of the Plan, including the reasons therefor, shall be
fully reflected in the minutes of the Committee.
9.5 Committee Procedure.
-------------------
(a) A majority of the members of the Committee as
constituted at any time shall constitute a quorum, and any action by a
majority of the members present at any meeting, or authorized by a
majority of the members in writing without a meeting, shall constitute
the action of the Committee.
(b) The Committee may designate certain of its members as
authorized to execute any document or documents on behalf of the
Committee, in which event the Committee shall notify the Trustee of
this action and the name or names of the designated members. The
Trustee, Company, Participants, Beneficiaries, and any other party
dealing with the Committee may accept and rely upon any document
executed by the designated members as representing action by the
Committee until the Committee shall file with the
IX-5
Trustee a written revocation of the authorization of the designated
members.
9.6 Compensation of Committee.
-------------------------
(a) Members of the Committee shall serve without
compensation unless the Board of Directors shall otherwise determine.
However, in no event shall any member of the Committee who is an
Employee receive compensation from the Plan for his services as a
member of the Committee.
(b) All members shall be reimbursed for any necessary or
appropriate expenditures incurred in the discharge of duties as
members of the Committee.
(c) The compensation or fees, as the case may be, of all
officers, agents, counsel, the Trustee, or other persons retained or
employed by the Committee shall be fixed by the Committee.
9.7 Resignation and Removal of Members.
----------------------------------
Any member of the Committee may resign at any time by giving
written notice to the other members and to the Board of Directors effective
as therein stated. Any member of the Committee may, at any time, be
removed by the Board of Directors.
9.8 Appointment of Successors.
-------------------------
(a) Upon the death, resignation, or removal of any
Committee member, the Board of Directors may appoint a successor.
IX-6
(b) Notice of appointment of a successor member shall be
given by the Secretary of the Company in writing to the Trustee and to
the members of the Committee.
(c) Upon termination, for any reason, of a Committee
member's status as a member of the Committee, the member's status as a
Named Fiduciary shall concurrently be terminated, and upon the
appointment of a successor Committee member the successor shall assume
the status of a Named Fiduciary as provided in Section 9.1.
9.9 Records.
-------
(a) The Committee shall keep a record of all its
proceedings and shall keep, or cause to be kept, all such books,
accounts, records or other data as may be necessary or advisable in
its judgment for the administration of the Plan and to properly
reflect the affairs thereof.
(b) However, nothing in this Section 9.9 shall require the
Committee or any member thereof to perform any act which, pursuant to
law or the provisions of this Plan, is the responsibility of the Plan
Administrator, nor shall this Section relieve the Plan Administrator
from such responsibility.
9.10 Reliance Upon Documents and Opinions.
------------------------------------
(a) The members of the Committee, the Board of Directors,
the Company and any person delegated under the provisions hereof to
carry out any fiduciary responsibilities under the Plan ("delegated
fiduciary"),
IX-7
shall be entitled to rely upon any tables, valuations,
computations, estimates, certificates and reports furnished by any
consultant, or firm or corporation which employs one or more
consultants, upon any opinions furnished by legal counsel, and upon
any reports furnished by the Trustee. The members of the Committee,
the Board of Directors, the Company and any delegated fiduciary shall
be fully protected and shall not be liable in any manner whatsoever
for anything done or action taken or suffered in reliance upon any
such consultant or firm or corporation which employs one or more
consultants, Trustee, or counsel.
(b) Any and all such things done or actions taken or
suffered by the Committee, the Board of Directors, the Company and any
delegated fiduciary shall be conclusive and binding on all Employees,
Participants, Beneficiaries, and any other persons whomsoever, except
as otherwise provided by law.
(c) The Committee and any delegated fiduciary may, but are
not required to, rely upon all records of the Company with respect to
any matter or thing whatsoever, and may likewise treat those records
as conclusive with respect to all Employees, Participants,
Beneficiaries, and any other persons whomsoever, except as otherwise
provided by law.
9.11 Requirement of Proof.
--------------------
The Committee or the Company may require satisfactory proof of
any matter under this Plan from or with respect to any
IX-8
Employee, Participant, or Beneficiary, and no person shall acquire any rights
or be entitled to receive any benefits under this Plan until the required proof
shall be furnished.
9.12 Reliance on Committee Memorandum.
--------------------------------
Any person dealing with the Committee may rely on and shall be
fully protected in relying on a certificate or memorandum in writing signed
by any Committee member or other person so authorized, or by the majority
of the members of the Committee, as constituted as of the date of the
certificate or memorandum, as evidence of any action taken or resolution
adopted by the Committee.
9.13 Multiple Fiduciary Capacity.
---------------------------
Any person or group of persons may serve in more than one
fiduciary capacity with respect to the Plan.
9.14 Limitation on Liability.
-----------------------
(a) Except as provided in Part 4 of Title I of ERISA, no
person shall be subject to any liability with respect to his duties
under the Plan unless he acts fraudulently or in bad faith.
(b) No person shall be liable for any breach of fiduciary
responsibility resulting from the act or omission of any other
fiduciary or any person to whom fiduciary responsibilities have been
allocated or delegated, except as provided in Part 4 of Title I of
ERISA.
IX-9
(c) No action or responsibility shall be deemed to be a
fiduciary action or responsibility except to the extent required by
ERISA.
9.15 Indemnification.
---------------
(a) To the extent permitted by law, the Company shall
indemnify each member of the Board of Directors and the Committee, and
any other Employee of the Company with duties under the Plan, against
expenses (including any amount paid in settlement) reasonably incurred
by him in connection with any claims against him by reason of his
conduct in the performance of his duties under the Plan, except in
relation to matters as to which he acted fraudulently or in bad faith
in the performance of such duties. The preceding right of
indemnification shall pass to the estate of such a person.
(b) The preceding right of indemnification shall be in
addition to any other right to which the Board member or Committee
member or other person may be entitled as a matter of law or
otherwise.
9.16 Reserved for Plan Modifications.
-------------------------------
9.17 Allocation of Fiduciary Responsibility.
--------------------------------------
(a) Part 4 of Title I of ERISA permits the division,
allocation and delegation between Plan fiduciaries of the fiduciary
responsibilities owed to the Plan Participants. Under this concept,
each fiduciary, including
IX-10
a Named Fiduciary, is accountable only for his own functions, except
to the extent of his co-fiduciary liability under Section 405 of ERISA.
(b) Under the preceding provisions of this Article IX, the
day-to-day operational, administrative and investment aspects of the
Plan have been delegated to the Committee. Except to the extent
expressly provided to the contrary in the Plan document, the
responsibilities delegated to the Committee include, by way of
illustration but not by way of limitation, such matters as:
(i) Satisfying accounting and auditing requirements;
(ii) Satisfying insurance and bonding requirements;
(iii) Administering the Plan's claims procedure; and
(iv) Appointing Investment Managers.
9.18 Bonding.
-------
(a) Except as is prescribed by the Board of Directors, as
provided in Section 412 of ERISA, or as may be required under any
other applicable law, no bond or other security shall be required by
any member of the Committee, or any other fiduciary under this Plan.
(b) Notwithstanding the foregoing, for purposes of
satisfying its indemnity obligations under Section 9.15, the Company
may (but need not) purchase and pay premiums for
IX-11
one or more policies of insurance. However, this insurance shall not
release the Company of its liability under the indemnification provisions.
9.19 Reserved for Plan Modifications.
-------------------------------
9.20 Reserved for Plan Modifications.
-------------------------------
9.21 Reserved for Plan Modifications.
-------------------------------
9.22 Prohibition Against Certain Actions.
-----------------------------------
(a) To the extent prohibited by law, in administering this
Plan the Committee shall not discriminate in favor of any class of
Employees and particularly it shall not discriminate in favor of
highly compensated Employees, or Employees who are officers or
shareholders of the Company.
(b) The Committee shall not cause the Plan to engage in any
transaction that constitutes a nonexempt prohibited transaction under
Section 4975(c) of the Code or Section 406(a) of ERISA.
(c) All individuals who are fiduciaries with respect to the
Plan (as defined in Section 3(21) of ERISA) shall discharge their
fiduciary duties in accordance with applicable law, and in particular,
in accordance with the standards of conduct contained in Section 404
of ERISA.
IX-12
9.23 Plan Expenses.
-------------
(a) All expenses incurred in the establishment,
administration and operation of the Plan, including but not limited to
the expenses incurred by the members of the Committee in exercising
their duties, shall be charged to the Trust Fund and allocated to
Participants Accounts as determined by the Committee, but shall be
paid by the Company if not paid by the Trust Fund.
(b) Notwithstanding the foregoing, the cost of interest and
normal brokerage charges which are included in the cost of securities
purchased by the Trust Fund (or charged to proceeds in the case of
sales) or other charges relating to specific assets of the Plan shall
be charged and allocated in a fair and equitable manner to the
Accounts to which the securities (or other assets) are allocated.
IX-13
<PAGE>
ARTICLE X
SPECIAL PROVISIONS
CONCERNING COMPANY STOCK
10.1 Securities Transactions.
-----------------------
Subject to the limitations of Section 6.6(a)iv, the Trustee shall
acquire Company Stock in the open market or from the Company or any other
person, including a party in interest, pursuant to a Participant's election
to invest any Company contributions on his behalf (including Before-Tax
Contributions), or Participant After-Tax Contributions, in the Company
Stock alternative established by the Committee in accordance with
Section 6.6, or to transfer amounts held in other investment alternatives
to such Company Stock alternative. No commission will be paid in
connection with the Trustee's acquisition of Company Stock from a party in
interest. Pending acquisition of Company Stock and pursuant to a
Participant's investment election, elected amounts shall be allocated to
the Participant's Company Stock subaccount in cash and may be invested in
any short-term interest fund of the Trustee. Neither the Company, nor the
Committee, nor any Trustee have any responsibility or duty to time any
transaction involving Company Stock in order to anticipate market
conditions or changes in Company Stock value. Neither the Company, nor the
Committee nor any Trustee have any responsibility or duty to sell Company
Stock held in the Trust Fund in order to maximize return or minimize loss.
X-1
10.2 Valuation of Company Securities.
-------------------------------
When it is necessary to value Company Stock held by the Plan, the
value will be the current fair market value of the Company Stock,
determined in accordance with applicable legal requirements.
If the Company Stock is publicly traded, fair market value will
be based on the most recent closing price in public trading, as reported in
The Wall Street Journal or any other publication of general circulation
- -----------------------
designated by the Committee, unless another method of valuation is required
by the standards applicable to prudent fiduciaries.
If the Company Stock cannot be valued on the basis of its closing
price in recent public trading, fair market value will be determined by the
Company in good faith based on all relevant factors for determining the
fair market value of securities. Relevant factors include an independent
appraisal by a person who customarily makes such appraisals, if an
appraisal of the fair market value of the Company Stock as of the relevant
date was obtained.
In the case of a transaction between the Plan and a party in
interest, the fair market value of the Company Stock must be determined as
of the date of the transaction rather than as of some other Valuation Date
occurring before or after the transaction. In other cases, the fair market
value of the Company Stock will be determined as of the most recent
Valuation Date.
X-2
10.3 Allocation of Stock Dividends and Splits.
----------------------------------------
Company Stock received by the Trust as a result of a Company
Stock split or Company Stock dividend on Company Stock held in
Participants' Accounts will be allocated as of the Valuation Date
coincident with or following the date of such split or dividend, to each
Participant who has such an Account. The amount allocated will bear
substantially the same proportion to the total number of shares received as
the number of shares in the Participant's Account bears to the total number
of shares allocated to such Accounts of all Participants immediately before
the allocation. The shares will be allocated to the nearest thousandth of
a share.
10.4 Reinvestment of Dividends.
-------------------------
Upon direction of the Committee, cash dividends may be reinvested
as soon as practicable by the Trustee in shares of Company Stock for
Participants' Accounts. Cash dividends may be reinvested in Company Stock
purchased as provided in Section 10.1 or purchased from the Accounts of
Participants who receive cash distributions of a fractional share or a
fractional interest therein.
10.5 Voting of Company Stock.
-----------------------
The Trustee shall have no discretion or authority to vote Company
Stock held in the Trust on any matter presented for a vote by the
stockholders of the Company except in accordance with timely directions
received by the Trustee from Participants, unless otherwise required by
applicable law.
X-3
(a) Each Participant shall be entitled to direct the
Trustee as to the voting of all Company Stock allocated and credited
to his Account.
(b) All Participants entitled to direct such voting shall
be notified by the Company, pursuant to its normal communications with
shareholders, of each occasion for the exercise of such voting rights
within a reasonable time before such rights are to be exercised. Such
notification shall include all information distributed to shareholders
either by the Company or any other party regarding the exercise of
such rights. If a Participant shall fail to direct the Trustee as to
the exercise of voting rights arising under any Company Stock credited
to his Accounts, or if any Company Stock held in the Plan has not been
allocated to Participants' Accounts, the Trustee shall not be required
to vote such Company Stock except as otherwise required by applicable
law. The Trustee shall maintain confidentiality with respect to the
voting directions of all Participants.
(c) Each Participant shall be a Named Fiduciary (as that
term is defined in ERISA Section 402(a)(2)) with respect to Company
Stock for which he has the right to direct the voting under the Plan
but solely for the purpose of exercising voting rights pursuant to
this Section 10.5.
X-4
10.6 Confidentiality Procedures.
--------------------------
The Committee shall establish procedures intended to ensure the
confidentiality of information relating to Participant transactions
involving Company Stock, including the exercise of voting, tender and
similar rights. The Committee shall also be responsible for ensuring the
adequacy of the confidentiality procedures and monitoring compliance with
such procedures. The Committee may, in its sole discretion, appoint an
independent fiduciary to carry out any activities that it determines
involve a potential for undue Company influence on Participants with
respect to the exercise of their rights as shareholders.
10.7 Securities Law Limitation.
-------------------------
Neither the Committee nor the Trustee shall be required to engage
in any transaction, including, without limitation, directing the purchase
or sale of Company Stock, which it determines in its sole discretion might
tend to subject itself, its members, the Plan, the Company, or any
Participant or Beneficiary to a liability under federal or state securities
laws.
X-5
<PAGE>
ARTICLE XI
MERGER OF COMPANY; MERGER OF PLAN
11.1 Effect of Reorganization or Transfer of Assets.
----------------------------------------------
In the event of a consolidation, merger, sale, liquidation, or
other transfer of the operating assets of the Company to any other company,
the ultimate successor or successors to the business of the Company shall
automatically be deemed to have elected to continue this Plan in full force
and effect, in the same manner as if the Plan had been adopted by
resolution of its Board of Directors, unless the successor(s), by
resolution of its Board of Directors, shall elect not to so continue this
Plan in effect, in which case the Plan shall automatically be deemed
terminated as of the applicable effective date set forth in the board
resolution.
11.2 Merger Restriction.
------------------
Notwithstanding any other provision in this Article, this Plan
shall not in whole or in part merge or consolidate with, or transfer its
assets or liabilities to any other plan unless each affected Participant in
this Plan would receive a benefit immediately after the merger,
consolidation, or transfer (if the Plan then terminated) 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).
XI-1
<PAGE>
ARTICLE XII
PLAN TERMINATION AND
DISCONTINUANCE OF CONTRIBUTIONS
12.1 Plan Termination.
----------------
(a) (i) Subject to the following provisions of this
Section 12.1, the Company may terminate the Plan and the Trust Agreements
at any time by an instrument in writing executed in the name of the Company
by an officer or officers duly authorized to execute such an instrument,
and delivered to the Trustee.
(ii) The Plan and Trust Agreements may terminate if the
Company merges into any other corporation, if as the result of the merger
the entity of the Company ceases, and the Plan is terminated pursuant to
the rules of Section 11.1.
(b) Upon and after the effective date of the termination, the
Company shall not make any further contributions under the Plan and no
contributions need be made by the Company applicable to the Plan year
in which the termination occurs, except as may otherwise be required
by law.
(c) The rights of all affected Participants to benefits accrued
to the date of termination of the Plan, to the extent funded as of the
date of termination, shall automatically become fully vested as of
that date.
12.2 Discontinuance of Contributions.
-------------------------------
(a) In the event the Company decides it is impossible or
inadvisable for business reasons to continue
XII-1
to make contributions under the Plan, the Company by resolution of its
Board of Directors may discontinue contributions to the Plan. Upon and
after the effective date of this discontinuance, no Participating Company
or Participant shall make any further contributions under the Plan and no
contributions need be made by a Participating Company with respect to
the Plan Year in which the discontinuance occurs, except as may
otherwise be required by law. A Participant shall be released from
any salary reduction agreement under the Plan as of the effective date
of a discontinuance of contributions.
(b) The discontinuance of contributions on the part of the
Company shall not terminate the Plan as to the funds and assets then
held by the Trustee, or operate to accelerate any payments of
distributions to or for the benefit of Participants or Beneficiaries,
and the Trustee shall continue to administer the Trust Fund in
accordance with the provisions of the Plan until all of the
obligations under the Plan shall have been discharged and satisfied.
(c) However, if this discontinuance of contributions shall
cause the Plan to lose its status as a qualified plan under Code
Section 401(a), the Plan shall be terminated in accordance with the
provisions of this Article XII.
(d) On and after the effective date of a discontinuance of
contributions, the rights of all affected Participants to benefits
accrued to that date, to the extent
XII-2
funded as of that date, shall automatically become fully vested as of
that date.
12.3 Rights of Participants.
----------------------
In the event of the termination of the Plan, for any cause
whatsoever, all assets of the Plan, after payment of expenses, shall be
used for the exclusive benefit of Participants and their Beneficiaries and
no part thereof shall be returned to the Company, except as provided in
Section 6.7 of this Plan.
12.4 Trustee's Duties on Termination.
-------------------------------
(a) On or before the effective date of termination of this
Plan, the Trustee shall proceed as soon as possible, but in any event
within six months from the effective date, to reduce all of the assets
of the Trust Fund to cash and other securities in such proportions as
the Committee shall determine (after approval by the Internal Revenue
Service, if necessary or desirable, with respect to any portion of the
assets of the Trust Fund held in common stock or securities of the
Company).
(b) After first deducting the estimated expenses for
liquidation and distribution chargeable to the Trust Fund, and after
setting aside a reasonable reserve for expenses and liabilities
(absolute or contingent) of the Trust, the Committee shall make
required allocations of items of income and expense to the Accounts.
(c) Following these allocations, the Trustee shall
promptly, after receipt of appropriate instructions
XII-3
from the Committee, distribute in accordance with Section 8.7 to each
former Participant in Company stock or cash an amount equal to the amount
credited to his Accounts as of the date of completion of the
liquidation.
(d) The Trustee and the Committee shall continue to
function as such for such period of time as may be necessary for the
winding up of this Plan and for the making of distributions in
accordance with the provisions of this Plan.
(e) Notwithstanding the foregoing, distributions to
Participants upon Plan termination in accordance with this Section
12.4 shall only be made if a "successor plan," within the meaning of
regulations under Code Section 401(k)(10), is not established. In the
event a "successor plan" is established prior to or subsequent to the
termination of the Plan, the Committee shall direct the Trustee to
continue to hold any assets of the Trust Fund not payable upon the
termination until such assets may, at the direction of the Committee,
be transferred to and held in the successor plan until distributable
under the terms of that successor plan.
12.5 Partial Termination.
-------------------
(a) In the event of a partial termination of the Plan
within the meaning of Code Section 411(d)(3), the interests of
affected Participants in the Trust Fund, as of
XII-4
the date of the partial termination, shall become nonforfeitable as of
that date.
(b) That portion of the assets of the Plan affected by the
partial termination shall be used exclusively for the benefit of the
affected Participants and their Beneficiaries, and no part thereof
shall otherwise be applied.
(c) With respect to Plan assets and Participants affected
by a partial termination, the Committee and the Trustee shall follow
the same procedures and take the same actions prescribed in this
Article XII in the case of a total termination of the Plan.
12.6 Failure to Contribute.
---------------------
The failure of a Participating Company to contribute to the Trust
in any year, if contributions are not required under the Plan for that
year, shall not constitute a complete discontinuance of contributions to
the Plan.
XII-5
<PAGE>
ARTICLE XIII
APPLICATION FOR BENEFITS
13.1 Application for Benefits.
------------------------
The Committee may require any person claiming benefits under the
Plan to submit an application therefor, together with such documents and
information as the Committee may require. In the case of any person
suffering from a disability which prevents the claimant from making
personal application for benefits, the Committee may, in its discretion,
permit another person acting on his behalf to submit the application.
13.2 Action on Application.
---------------------
(a) Within ninety days following receipt of an application
and all necessary documents and information, the Committee's
authorized delegate reviewing the claim shall furnish the claimant
with written notice of the decision rendered with respect to the
application.
(b) In the case of a denial of the claimant's application,
the written notice shall set forth:
(i) The specific reasons for the denial, with
reference to the Plan provisions upon which the denial is based;
(ii) A description of any additional information or
material necessary for perfection of the application (together with an
explanation why the material or information is necessary); and
XIII-1
(iii) An explanation of the Plan's claim review
procedure.
(c) A claimant who wishes to contest the denial of his
application for benefits or to contest the amount of benefits payable
to him shall follow the procedures for an appeal of benefits as set
forth in Section 13.3 below, and shall exhaust such administrative
procedures prior to seeking any other form of relief.
13.3 Appeals.
-------
(a) (i) A claimant who does not agree with the decision
rendered with respect to his application may appeal the decision to the
Committee.
(ii) The appeal shall be made, in writing, within sixty
days after the date of notice of the decision with respect to the
application.
(iii) If the application has neither been approved nor
denied within the ninety day period provided in Section 13.2 above, then
the appeal shall be made within sixty days after the expiration of the
ninety day period.
(b) The claimant may request that his application be given full
and fair review by the Committee. The claimant may review all
pertinent documents and submit issues and comments in writing in
connection with the appeal.
(c) The decision of the Committee shall be made promptly, and
not later than sixty days after the Committee's receipt of a request
for review, unless special
XIII-2
circumstances require an extension of time for processing, in which case
a decision shall be rendered as soon as possible, but not later than one
hundred twenty days after receipt of a request for review.
(d) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to
be understood by the claimant with specific reference to the pertinent
Plan provisions upon which the decision is based.
XIII-3
<PAGE>
ARTICLE XIV
LIMITATIONS ON CONTRIBUTIONS
14.1 General Rule.
------------
(a) Notwithstanding anything to the contrary contained in
this Plan, the total Annual Additions under this Plan to a
Participant's Plan Accounts for any Limitation Year shall not exceed
the lesser of:
(i) Thirty Thousand Dollars ($30,000) (or if greater,
one-fourth (1/4) of the defined benefit dollar limitation set forth in
Section 415(b) of the Code as in effect for the Limitation Year); or
(ii) Twenty-five percent of the Participant's total
Compensation from the Company and any Affiliated Companies for the year,
excluding amounts otherwise treated as Annual Additions under Section 14.2.
(b) For purposes of this Article XIV, the Company has
elected a "Limitation Year" corresponding to the Plan Year.
14.2 Annual Additions.
----------------
For purposes of Section 14.1, the term "Annual Additions" shall
mean, for any Limitation Year, the sum of:
(a) the amount credited to the Participant's Accounts from
Company contributions for such Limitation Year;
(b) any Employee contributions for the Limitation Year; and
XIV-1
(c) any amounts described in Section 415(l)(1) or
419(A)(d)(2) of the Code.
14.3 Other Defined Contribution Plans.
--------------------------------
If the Company or an Affiliated Company is contributing to any
other defined contribution plan (as defined in Section 415(i) of the Code)
for its Employees, some or all of whom may be Participants in this Plan,
then contributions to the other plan shall be aggregated with contributions
under this Plan for the purposes of applying the limitations of
Section 14.1.
14.4 Combined Plan Limitation (Defined Benefit Plan).
-----------------------------------------------
In the event a Participant hereunder also is a participant in any
qualified defined benefit plan (within the meaning of Section 415(k) of the
Code) of the Company or an Affiliated Company, then the benefit payable
under such other defined benefit plan, or any of them, shall be reduced for
so long and to the extent necessary to provide that the sum of the "defined
benefit fraction" and the "defined contribution fraction," for any
Limitation Year, as defined in Section 415(e) of the Code, shall not exceed
one (1).
14.5 Adjustments for Excess Annual Additions.
---------------------------------------
In general, the amount of excess for any Limitation Year under
this Plan and any other defined contribution plan (as defined in Code
Section 414(i)) or defined benefit plan (as defined in Code Section 414(j))
maintained by the Company or an Affiliated Company will be determined so as
to avoid Annual Additions in excess of the limitations set forth in
Sections 14.1
XIV-2
through 14.4. However, if as a result of an administrative error, the
Annual Additions to a Participant's Accounts under this Plan (after giving
effect to the maximum permissible adjustments under the other plans) would
exceed the applicable limitations described in Sections 14.1 through 14.4,
the excess amount shall be subject to this Section 14.5.
(a) Reserved for Plan modifications.
-------------------------------
(b) The following rules shall apply:
(i) If the Participant made any after-tax
contributions to this or any other defined contribution plan that is
maintained by the Company or an Affiliated Company, which after-tax contri-
butions were not matched by matching contributions, within the meaning of
Code Section 401(m), such after-tax contributions and any earnings thereon
shall be returned to the Participant to the extent of any excess Annual
Additions.
(ii) If excess Annual Additions remain after the
application of the above rule, if the Participant made any Before-Tax
Contributions for the Plan Year to this or any other defined contribution
plan that is maintained by the Company or an Affiliated Company, which
Before-Tax Contributions were not matched by matching contributions, within
the meaning of Code Section 401(m), Before-Tax Contributions and any
earnings thereon shall be returned to the Participant to the extent of any
excess Annual Additions.
(iii) If excess Annual Additions remain after the
application of the above rule, if the Participant made
XIV-3
any after-tax contributions for the Plan Year to this or any other defined
contribution plan that is maintained by the Company or an Affiliated Company,
which after-tax contributions were matched by matching contributions, within
the meaning of Code Section 401(m), any such after-tax contributions and any
earnings thereon shall be returned to the Participant and any matching
contributions attributable thereto shall be reduced to the extent necessary
to eliminate any remaining excess Annual Additions.
(iv) If excess Annual Additions remain after the
application of the above rule, if the Participant made any Before-Tax
Contributions for the Plan Year to this or any other defined contribution
plan that is maintained by the Company or an Affiliated Company, which
Before-Tax Contributions were matched by matching contributions, within the
meaning of Code Section 401(m), any such Before-Tax Contributions and any
earnings thereon shall be returned to the Participant and any matching
contributions attributable thereto shall be reduced to the extent necessary
to eliminate any remaining excess Annual Additions.
(v) If excess Annual Additions remain after the
application of the above rule, any other Company contributions for the Plan
Year shall be reduced to the extent necessary to eliminate any remaining
excess Annual Additions.
14.6 Disposition of Excess Amounts.
-----------------------------
Any excess amounts contributed by a Participating Company on
behalf of a Participant for any Plan Year (other than
XIV-4
Before-Tax Contributions) shall be held unallocated in a suspense account
for the Plan Year and applied, to the extent possible, first to reduce the
Participating Company contributions for the Plan Year, and next, to reduce the
Participating Company contributions for the succeeding Plan Year, or Years,
if necessary. No investment gains or losses shall be allocated to a
suspense account.
14.7 Affiliated Company.
------------------
For purposes of this Article XIV, the status of an entity as an
Affiliated Company shall be determined by reference to the percentage tests
set forth in Code Section 415(h).
XIV-5
<PAGE>
ARTICLE XV
RESTRICTION ON ALIENATION
15.1 General Restrictions Against Alienation.
---------------------------------------
(a) The interest of any Participant or Beneficiary in the
income, benefits, payments, claims or rights hereunder, or in the
Trust Fund shall not in any event be subject to sale, assignment,
hypothecation, or transfer. Each Participant and Beneficiary is
prohibited from anticipating, encumbering, assigning, or in any manner
alienating his or her interest under the Trust Fund, and is without
power to do so, except as may otherwise be provided for in the Trust
Agreement. The interest of any Participant or Beneficiary shall not
be liable or subject to his debts, liabilities, or obligations, now
contracted, or which may be subsequently contracted. The interest of
any Participant or Beneficiary shall be free from all claims,
liabilities, bankruptcy proceedings, or other legal process now or
hereafter incurred or arising; and the interest or any part thereof,
shall not be subject to any judgment rendered against the Participant
or Beneficiary.
(b) In the event any person attempts to take any action
contrary to this Article XV, that action shall not be effective, and
all Participants and their Beneficiaries, may disregard that action
and shall not suffer any liability for any disregard of that action,
and shall be reimbursed on demand out of the Trust Fund for the amount
of any loss,
XV-1
cost or expense incurred as a result of disregarding or of acting in
disregard of that action.
(c) The preceding provisions of this Section 15.1 shall be
interpreted and applied by the Committee in accordance with the
requirements of Code Section 401(a)(13) as construed and interpreted
by authoritative judicial and administrative rulings and regulations.
(d) The provisions of Subsections 15.1(a) and 15.1(b) are
expressly subject to qualified domestic relations orders, as provided
in Code Section 401(a)(13)(B).
15.2 Nonconforming Distributions Under Court Order.
---------------------------------------------
(a) In the event that a court with jurisdiction over the
Plan and the Trust Fund shall issue an order or render a judgment
requiring that all or part of a Participant's interest under the Plan
and in the Trust Fund be paid to a spouse, former spouse and/or
children of the Participant by reason of or in connection with the
marital dissolution and/or marital separation of the Participant and
the spouse, and/or some other similar proceeding involving marital
rights and property interests, then notwithstanding the provisions of
Section 15.1 the Committee may, in its absolute discretion, direct the
applicable Trustee to comply with that court order or judgment and
distribute assets of the Trust Fund in accordance therewith. Pending
distribution to an alternate payee of any portion of a Participant's
vested interest in the Trust Fund, pursuant to
XV-2
a court order or judgment, such portion shall be segregated and invested
in accordance with rules prescribed by the Committee, and neither the
Participant nor the alternate payee shall be entitled to make an election
with respect to the investment of such segregated portion.
(b) The Committee's decision with respect to compliance
with any such court order or judgment shall be made in its absolute
discretion and shall be binding upon the Trustee and all Participants
and their Beneficiaries; provided, however, that the Committee in the
exercise of its discretion shall not make payments in accordance with
the terms of an order which is not a qualified domestic relations
order or which the Committee determines would jeopardize the continued
qualification of the Plan and Trust under Section 401 of the Code.
Notwithstanding the foregoing, the Committee may make a distribution
to an alternate payee prior to the date the Participant attains age
fifty (50), if such distribution is required by a qualified domestic
relations order.
(c) Neither the Plan, the Company, the Committee nor the
Trustee shall be liable in any manner to any person, including any
Participant or Beneficiary, for complying with any such court order or
judgment.
(d) Nothing in this Section 15.2 shall be interpreted as
placing upon the Company, the Committee or any Trustee any duty or
obligation to comply with any such court order or judgment. The
Committee may, if in its
XV-3
absolute discretion it deems it to be in the best interests of the Plan
and the Participants, determine that any such court order or judgment
shall be resisted by means of judicial appeal or other available judicial
remedy, and in that event the Trustee shall act in accordance with the
Committee's directions.
(e) The Committee shall adopt procedures and provide
notifications to a Participant and alternate payees in connection with
a qualified domestic relations order, to the extent required under
Code Section 414(p).
XV-4
<PAGE>
ARTICLE XVI
PLAN AMENDMENTS
16.1 Amendments.
----------
The Board of Directors may at any time, and from time to time,
amend the Plan by an instrument in writing executed in the name of the
Company by an officer or officers duly authorized to execute such
instrument, and delivered to the applicable Trustee. However, to the
extent required by law, no amendment shall be made at any time, the effect
of which would be:
(a) To cause any assets of the Trust Fund to be used for or
diverted to purposes other than providing benefits to the Participants
and their Beneficiaries, and defraying reasonable expenses of
administering the Plan, except as provided in Section 6.7;
(b) To have any retroactive effect so as to deprive any
Participant or Beneficiary of any accrued benefit to which he would be
entitled under this Plan, in contravention of Code Section 411(d)(6),
if his employment were terminated immediately before the amendment;
(c) To eliminate or reduce an optional form of benefit to
the extent so doing would contravene Code Section 411(d)(6); or
(d) To increase the responsibilities or liabilities of a
Trustee or an Investment Manager without his written consent.
XVI-1
16.2 Retroactive Amendments.
----------------------
Notwithstanding any provisions of this Article XVI to the
contrary, the Plan may be amended prospectively or retroactively (as
provided in Section 401(b) of the Code) to make the Plan conform to any
provision of ERISA, any Code provisions dealing with tax-qualified
employees' trusts, or any regulation under either.
16.3 Amendment of Vesting Provisions.
-------------------------------
Effective January 1, 1989, if the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's vested
interest in his Accounts, each Participant who has completed at least three
(3) Years of Service may elect, within a reasonable time after the adoption
of the amendment, to continue to have his vested interest computed under
the Plan without regard to such amendment. The period during which the
election may be made shall commence when the date of the amendment is
adopted and shall end on the latest of: (i) 60 days after the amendment is
adopted; (ii) 60 days after the amendment is effective; or (iii) 60 days
after the Participant is issued written notice of the amendment.
In the event that the Plan's vesting schedule is amended, the
nonforfeitable percentage of every Employee who is a Participant on the
date the amendment is adopted, or the date the amendment is effective, if
later, in his Company Matching Account and/or Company Contributions Account
shall be not less than his percentage computed under the Plan without
regard to the amendment.
XVI-2
<PAGE>
ARTICLE XVII
TOP-HEAVY PROVISIONS
17.1 Minimum Company Contributions.
-----------------------------
In the event that this Plan is deemed a Top-Heavy plan with
respect to any Plan Year, each Non-Key Employee who is a Participant shall
receive Company contributions that in the aggregate are at least equal to
the lesser of three percent (3%) of Compensation or the percentage at which
Company contributions are made for the Key Employee (under any plan
required to be included in an Aggregation Group) for whom such percentage
is the highest for the Plan Year, regardless of whether the Non-Key
Employee elected to make Before-Tax Contributions to the Plan for the Plan
Year, completed less than 1,000 Hours of Service during such Plan Year, or
the Non-Key Employee's level of Compensation. For purposes of this
Section 17.1, Company contributions shall include amounts considered
contributed by Key Employees and which qualify for treatment under Code
Section 401(k), and any Company contributions for Key Employees taken into
account under Section 401(k)(3) or 401(m) of the Code, but shall not
include such amounts considered as contributed by or for Non-Key Employees.
Further, in determining the percentage at which Company contributions are
made for the Plan Year for the Key Employee for whom such percentage is the
highest, the contributions for a Key Employee shall be divided by so much
of a Key Employee's compensation for the Plan Year as does not exceed
XVII-1
$200,000, as that amount is adjusted each year by the Secretary of the
Treasury.
In the event a Participant is covered by both a defined
contribution and a defined benefit plan maintained by the Company, both of
which are determined to be Top-Heavy Plans, the defined benefit minimum,
offset by the benefits provided under the defined contribution plan, shall
be provided under the defined benefit plan.
17.2 Reserved for Plan Modifications.
-------------------------------
17.3 Top-Heavy Determination.
-----------------------
This Plan shall be deemed a Top-Heavy Plan with respect to any
Plan Year in which, as of the Determination Date: (a) the aggregate of the
Accounts of Key Employees under the Plan exceeds 60% of the aggregate of
the Accounts of all Employees; or (b) the aggregate of the Accounts of Key
Employees under all defined contribution plans and the present value of the
cumulative accrued benefits for Key Employees under all defined benefit
plans includable in an Aggregation Group exceed 60% of a similar sum for
all employees in such group. As used above, the term "Aggregation Group"
includes all plans of Participating Companies having one or more Key
Employees as Participants and any other defined contribution plan of a
Participating Company that permits a plan of a Participating Company having
one or more Key Employees to meet the qualification requirements of
Sections 401(a)(4) or 410 of the Code.
XVII-2
The present value of account balances under a defined
contribution plan shall be determined as of the most recent valuation date
that falls within or ends on the Determination Date. The present value of
accrued benefits under a defined benefit plan shall be determined as of the
same valuation date used for computing plan costs for minimum funding. The
present value of the cumulative accrued benefits of a Non-Key Employee
shall be determined under either:
(i) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by affiliated companies, within
the meaning of Code Sections 414(b), (c), (m) or (o); or
(ii) if there is no such method, as if such benefit accrued
not more rapidly than the lowest accrual rate permitted under the
fractional accrual rate of Section 411(b)(1)(C) of the Code.
For purposes of this Article XVII, "Determination Date" shall
mean, with respect to any Plan Year, the last day of the preceding Plan
Year, or, in the case of the first Plan Year, the last day of such Plan
Year.
The term, "Key Employee" shall mean, for purposes of this
Article XVII, any Employee or former Employee who, at any time during such
Plan Year (or any of the 4 preceding Plan Years) is:
(1) an officer of a Participating Company having an annual
compensation in excess of 50 percent of the amount
XVII-3
in effect under Section 415(b)(1)(A) of the Code for such Plan Year;
(2) one of the 10 Employees having an annual compensation
in excess of 150 percent of the amount in effect under
Section 415(c)(1)(A) of the Code owning (or considered as owning
within the meaning of Section 318 of the Code) the largest interests
in a Participating Company;
(3) a 5% owner of a Participating Company; or
(4) 1% owner of a Participating Company having an annual
compensation from a Participating Company of more than $150,000.
For purposes of (1) above, no more than 50 Employees (or, if
lesser, the greater of 3 or 10% of the Employees) shall be treated as
officers.
A 5% (or 1%, if applicable) owner means any person who owns (or
is considered as owning within the meaning of Section 318 of the Code) more
than 5% (1%) of the outstanding stock of the Participating Company or stock
possessing more than 5% (1%) of the total combined voting power of all
stock of the Participating Company.
For purposes of applying the constructive ownership rules under
Section 318(a)(2) of the Code, subparagraph (C) of such Section shall be
applied by substituting "5 percent" for "50 percent."
For purposes of determining "5% owners" and/or "1% owners," the
aggregating rules of Sections 414(b), (c) and (m) of the Code shall not
apply. For purposes of determining whether an
XVII-4
Employee has compensation of more than $150,000, however, compensation from
each entity required to be aggregated under Sections 414(b), (c) and/or (m)
of the Code shall be taken into account.
For purposes of determining the amount of a Participant's Account
for purposes of this Section 17.3, the amount shall include the aggregate
distributions under the Plan made to the Participant during the five year
period ending on the Determination Date.
The following shall not be taken into account for purposes of
determining whether this Plan is a Top-Heavy Plan: (1) any rollover to the
Plan that is initiated by a Participant; (2) the account value of any
Participant who is not a Key Employee with respect to any Plan Year but was
a Key Employee with respect to any prior Plan Year; and (3) the account
value of a Participant who has not received any compensation from any
Participating Company under the Plan (other than benefits under the Plan)
during the five year period ending on the Determination Date.
17.4 Maximum Annual Addition.
-----------------------
(a) Except as set forth below, in the case of any Top-Heavy
Plan the rules of Section 14.4 shall be applied by substituting "1.0"
for "1.25" in the defined benefit plan fraction and the defined
contribution fraction.
XVII-5
(b) The rule set forth in Subsection (a) above shall not
apply if the requirements of both Paragraphs (i) and (ii), below, are
satisfied.
(i) The requirements of this Paragraph (i) are
satisfied if the rules of Section 17.4(a) above would be satisfied after
substituting "four percent (4%)" for "three percent (3%)" where it appears
therein with respect to Participants covered only under a defined
contribution plan.
(ii) The requirements of this Paragraph (ii) are
satisfied if the Plan would not be a Top-Heavy Plan if "ninety percent
(90%)" were substituted for "sixty percent (60%)" each place it appears in
Section 17.3(a)(ii).
(c) The rules of Subsection (a) shall not apply with
respect to any Employee as long as there are no --
(i) Company contributions, forfeitures, or voluntary
nondeductible contributions allocated to the Employee under a defined
contribution plan maintained by the Company, or
(ii) Accruals by the Employee under a defined benefit
plan maintained by the Company.
17.5 Aggregation.
-----------
Each Plan of a Participating Company required to be included in
an "Aggregation Group" shall be treated as a Top-Heavy Plan if such group
is a "Top-Heavy Group."
For purposes of this Article XVII, an "Aggregation Group" shall
mean: (i) each plan of a Participating Company in which a Key Employee is
a Participant, and (ii) each other plan
XVII-6
of a Participating Company which enables any plan described in (i) above to
meet the requirements of Section 401(a)(4) or 410 of the Code.
Any plan of a Participating Company that is not required to be
included in an Aggregation Group may be treated as part of such group if
such group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code with such plan taken into account.
For purposes of this Section 17.5, a "Top-Heavy Group" means any
Aggregation Group if the sum (as of the Determination Date) of the present
value of the cumulative accrued benefits for Key Employees under all
defined benefit plans included in such group and the aggregate of the
accounts of Key Employees under all defined contribution plans included in
such group exceed 60% of a similar sum determined for all Employees.
XVII-7
<PAGE>
ARTICLE XVIII
MISCELLANEOUS
18.1 No Enlargement of Employee Rights.
---------------------------------
(a) This Plan is strictly a voluntary undertaking on the
part of the Company and shall not be deemed to constitute a contract
between the Company and any Employee, or to be consideration for, or
an inducement to, or a condition of, the employment of any Employee.
(b) Nothing contained in this Plan or the Trust shall be
deemed to give any Employee the right to be retained in the employ of
the Company or to interfere with the right of the Company to discharge
or retire any Employee at any time.
(c) No Employee, nor any other person, shall have any right
to or interest in any portion of the Trust Fund other than as
specifically provided in this Plan.
18.2 Mailing of Payments; Lapsed Benefits.
------------------------------------
(a) All payments under the Plan shall be delivered in
person or mailed to the last address of the Participant (or, in the
case of the death of the Participant, to the last address of any other
person entitled to such payments under the terms of the Plan)
furnished pursuant to Section 18.3 below.
(b) In the event that a benefit is payable under this Plan
to a Participant or any other person and after reasonable efforts such
person cannot be located for the
XVIII-1
purpose of paying the benefit for a period of three (3) consecutive
years, the Committee, in its sole discretion, may determine that such
person conclusively shall be presumed dead and upon the termination of
such three (3) year period the benefit shall be forfeited and as soon
thereafter as practicable shall be applied to reduce future Company
Contributions; provided, however, should any person entitled to such
benefit thereafter claim such benefit, such benefit shall be restored.
Alternatively, benefits that cannot be paid may escheat to the state in
accordance with applicable state law.
(c) For purposes of this Section 18.2, the term
"Beneficiary" shall include any person entitled under Section 8.9 to
receive the interest of a deceased Participant or deceased designated
Beneficiary. It is the intention of this provision that the benefit
will be distributed to an eligible Beneficiary in a lower priority
category under Section 8.9 if no eligible Beneficiary in a higher
priority category can be located by the Committee after reasonable
efforts have been made.
(d) The Accounts of a Participant shall continue to be
maintained until the amounts in the Accounts are paid to the
Participant or his Beneficiary. Notwithstanding the foregoing, in the
event that the Plan is terminated, the following rules shall apply:
(i) All Participants (including Participants who have
not previously claimed their benefits under the Plan)
XVIII-2
shall be notified of their right to receive a distribution of their interests
in the Plan;
(ii) All Participants shall be given a reasonable
length of time, which shall be specified in the notice, in which to claim
their benefits;
(iii) All Participants (and their Beneficiaries) who
do not claim their benefits within the designated time period shall be
presumed to be dead. The Accounts of such Participants shall be forfeited
at such time. These forfeitures shall be disposed of according to rules
prescribed by the Committee, which rules shall be consistent with
applicable law.
(iv) The Committee shall prescribe such rules as it
may deem necessary or appropriate with respect to the notice and forfeiture
rules stated above.
(e) Should it be determined that the preceding rules
relating to forfeiture of benefits upon Plan termination are
inconsistent with any of the provisions of the Code and/or ERISA,
these provisions shall become inoperative without the need for a Plan
amendment and the Committee shall prescribe rules that are consistent
with the applicable provisions of the Code and/or ERISA.
18.3 Addresses.
---------
Each Participant shall be responsible for furnishing the
Committee with his correct current address and the correct current name and
address of his Beneficiary or Beneficiaries.
XVIII-3
18.4 Notices and Communications.
--------------------------
(a) All applications, notices, designations, elections, and
other communications from Participants shall be in writing, on forms
prescribed by the Committee and shall be mailed or delivered to the
office designated by the Committee, and shall be deemed to have been
given when received by that office.
(b) Each notice, report, remittance, statement and other
communication directed to a Participant or Beneficiary shall be in
writing and may be delivered in person or by mail. An item shall be
deemed to have been delivered and received by the Participant when it
is deposited in the United States Mail with postage prepaid, addressed
to the Participant or Beneficiary at his last address of record with
the Committee.
18.5 Reporting and Disclosure.
------------------------
The Plan Administrator shall be responsible for the reporting and
disclosure of information required to be reported or disclosed by the Plan
Administrator pursuant to ERISA or any other applicable law.
18.6 Governing Law.
-------------
All legal questions pertaining to the Plan shall be determined in
accordance with the provisions of ERISA and the laws of the State of
California. All contributions made hereunder shall be deemed to have been
made in California.
XVIII-4
18.7 Interpretation.
--------------
(a) Article and Section headings are for convenient
reference only and shall not be deemed to be part of the substance of
this instrument or in any way to enlarge or limit the contents of any
Article or Section. Unless the context clearly indicates otherwise,
masculine gender shall include the feminine, and the singular shall
include the plural and the plural the singular.
(b) The provisions of this Plan shall in all cases be
interpreted in a manner that is consistent with this Plan satisfying:
(i) The requirements (of Code Section 401(a) and
related statutes) for qualification as a Profit Sharing Plan; and
(ii) The requirements (of Code Section 401(k) and
related statutes) for qualification as a Qualified Cash or Deferred
Arrangement.
18.8 Certain Securities Laws Rules.
-----------------------------
Any election or direction made under this Plan by an individual
who is or may become subject to liability under Section 16 of the
Securities Exchange Act of l934, as amended (the "Exchange Act"), may be
conditioned upon such restrictions as are necessary or appropriate to
qualify for an applicable exemption under Section 16(b) of the Exchange
Act, or any rule promulgated thereunder. To the extent required by Section
401(a)(4) of the Code, the rules under this Section 18.8 shall be
administered in a non-discriminatory manner.
XVIII-5
18.9 Withholding for Taxes.
---------------------
Any payments out of the Trust Fund may be subject to withholding
for taxes as may be required by any applicable federal or state law.
18.10 Limitation on Company; Committee and Trustee Liability.
------------------------------------------------------
Any benefits payable under this Plan shall be paid or provided
for solely from the Trust Fund and neither the Company, the Committee nor
the Trustee assume any responsibility for the sufficiency of the assets of
the Trust to provide the benefits payable hereunder.
18.11 Successors and Assigns.
----------------------
This Plan and the Trust established hereunder shall inure to the
benefit or, and be binding upon, the parties hereto and their successors
and assigns.
18.12 Counterparts.
------------
This Plan document may be executed in any number of identical
counterparts, each of which shall be deemed a complete original in itself
and may be introduced in evidence or used for any other purpose without the
production of any other counterparts.
IN WITNESS WHEREOF, in order to record the adoption of this Plan,
Mattel, Inc. has caused this instrument to be executed by its duly
authorized officers this 1st day of February,
XVIII-6
1996, effective, however, as of July 1, 1995, except as otherwise expressly
provided herein.
MATTEL, INC.
By: /s/ E. Joseph McKay
-------------------
By: /s/ Ned Mansour
---------------
XVIII-7
<PAGE>
MATTEL, INC.
HOURLY EMPLOYEE PERSONAL INVESTMENT PLAN
APPENDIX A
COVERED GROUP shall mean full-time employees of the Mattel-
Ontario division of Mattel Operations, Inc. who are benefits-eligible
associates paid on an hourly basis.
EFFECTIVE DATE shall mean July 1, 1995.
AGE AND SERVICE REQUIREMENTS shall mean attainment of age 18 and
completion of six (6) months of service.
PARTICIPANT'S CONTRIBUTION PERCENTAGE for purposes of Section 5.2
shall mean twelve percent (12%).
COMPANY CONTRIBUTIONS for purposes of Section 6.1(a) shall mean
for each month of each Plan Year one percent (1%) of the Participant's
Compensation during such month.
COMPANY MATCHING CONTRIBUTIONS for purposes of Section 6.1(c)
shall mean a dollar amount determined in accordance with the following
schedule:
YEARS OF SERVICE MATCHING CONTRIBUTION
---------------- ---------------------
Less than 6 0
months
More than 6 25% of the Participant's
months but less Basic Participant
than 5 Years Contributions as defined in
Section 2.3B
More than 5 30% of the Participant's
Years but less Basic Participant
than 10 Years Contributions as defined in
Section 2.3B
More than 10 40% of the Participant's
Years. Basic Participant
Contributions as defined in
Section 2.3B
No part of a Participant's Supplemental Participant Contributions (as
defined in Section 2.40) shall be eligible for Company Matching
Contributions.
<PAGE>
MATTEL, INC.
HOURLY EMPLOYEE PERSONAL INVESTMENT PLAN
APPENDIX B
COVERED GROUP shall mean full-time employees of the Mattel-
Augusta division of Mattel Operations, Inc. who are benefits-eligible
associates paid on an hourly basis.
EFFECTIVE DATE shall mean April 1, 1996.
AGE AND SERVICE REQUIREMENTS shall mean attainment of age 18 and
completion of six (6) months of service.
PARTICIPANT'S CONTRIBUTION PERCENTAGE for purposes of Section 5.2
shall mean twelve percent (12%).
COMPANY CONTRIBUTIONS for purposes of Section 6.1(a) shall mean
for each month of each Plan Year one percent (1%) of the Participant's
Compensation during such month.
COMPANY MATCHING CONTRIBUTIONS for purposes of Section 6.1(c)
shall mean a dollar amount determined in accordance with the following
schedule:
YEARS OF SERVICE MATCHING CONTRIBUTION
---------------- ---------------------
Less than 6 0
months
More than 6 25% of the Participant's
months but less Basic Participant
than 5 Years Contributions as defined in
Section 2.3B
More than 5 30% of the Participant's
Years but less Basic Participant
than 10 Years Contributions as defined in
Section 2.3B
More than 10 40% of the Participant's
Years. Basic Participant
Contributions as defined in
Section 2.3B
No part of a Participant's Supplemental Participant Contributions (as
defined in Section 2.40) shall be eligible for Company Matching
Contributions.
<PAGE>
EXHIBIT 23.1
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 6, 1995, which appears
on page 51 of the 1994 Annual Report to Shareholders of Mattel, Inc., which
is incorporated by reference in the Mattel, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1994. We also consent to the incorporation
by reference of our report on the Financial Statement Schedules, which appears
on page 28 of such Annual Report on Form 10-K.
/s/ Price Waterhouse LLP
- ------------------------
Los Angeles, California
February 20, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in the Registration
Statement of Mattel, Inc. on Form S-8 of our report dated February 4, 1993,
on our audit of the consolidated financial statements and schedules of
Fisher-Price, Inc. for the fiscal year ended January 3, 1993, which
report is included in the Annual Report on Form 10-K for the year ended
December 31, 1994.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
Rochester, New York
February 20, 1996
<PAGE>
