As filed with the Securities and Exchange Commission on January 12, 2000
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MOTOROLA, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-1115800
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
1303 East Algonquin Road
Schaumburg, Illinois 60196
(Address of Principal Executive Offices) (Zip Code)
General Instrument Corporation Savings Plan
(Full Title of Plans)
Carl F. Koenemann
Executive Vice President and Chief Financial Officer
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
(Name and Address of Agent for Service)
(847) 576-5000
(Telephone Number, Including Area Code, of Agent for Service)
_____________________________
CALCULATION OF REGISTRATION FEE
- --------------|--------------|-----------------|-------------------|------------
Title of | | | |
Each Class of |Amount to Be |Proposed Maximum | Proposed Maximum | Amount of
Securities To |Registered (1)|Offering Price |Aggregate Offering |Registration
Be Registered | |Per Share (2) | Price (2) | Fee (3)
- --------------|--------------|-----------------|-------------------|------------
Motorola, Inc.| 2,000,000 | $125.50 | $251,000,000.00 | $66,264.00
Common Stock | | | |
($3 Par | | | |
Value) (4) | | | |
- --------------|--------------|-----------------|-------------------|------------
(1) In addition, pursuant to Rule 416(c), this Registration Statement also
covers an indeterminate amount of interests to be offered or sold pursuant
to the General Instrument Corporation Savings Plan.
(2) Estimated solely for purposes of calculating registration fee, pursuant to
Rule 457(c) and (h)(1), on the basis of the average of the high and low
reported sales price of the registrant's common stock on the New York Stock
Exchange -- Composite Tape on January 7, 2000.
(3) Pursuant to Rule 457(h)(2), no registration fee is required with respect to
the interests in the General Instrument Corporation Savings Plan.
(4) Includes preferred stock purchase rights. Prior to the occurrence of
certain events, the preferred stock purchase rights will not be evidenced
separately from the registrant's common stock.
<PAGE>
EXPLANATORY NOTE
Motorola, Inc. ("Motorola" or the "Registrant") hereby registers
2,000,000 shares of common stock, par value $3.00 per share, of Motorola
("Motorola Common Stock") and the associated rights (the "Rights") to purchase
Junior Participating Preferred Stock, Series B, par value $100 per share, in
connection with the General Instrument Corporation Savings Plan (the "Plan"),
and also hereby registers an indeterminate amount of interests to be offered or
sold pursuant to the Plan. On January 5, 2000, Lucerne Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Motorola ("Merger Sub"),
merged (the "Merger") with and into General Instrument Corporation, a Delaware
corporation ("General Instrument"), pursuant to the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of September 14, 1999, among Motorola, Merger
Sub and General Instrument. Following the Merger, Motorola Common Stock is
substituted for the common stock of General Instrument under the Plan.
PART I
INFORMATION REQUIRED IN THE 10(a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended (the "Securities Act"), and
the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents previously filed by Motorola with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein
by reference:
(a) Motorola's Annual Report on Form 10-K, as amended, for the fiscal year
ended December 31, 1998.
(b) Motorola's Quarterly Reports on Form 10-Q, as amended, for the quarters
ended April 3, July 3, and October 2, 1999.
(c) Motorola's Current Reports on Form 8-K filed September 16, 1999 and
January 6, 2000.
(d) The description of Motorola Common Stock contained in Motorola's
Registration Statement on Form 8-B dated July 2, 1973, including any
amendment or report filed with the Commission for the purpose of updating
such description.
(e) The description of the Rights contained in Motorola's Registration
Statement on Form 8-A dated November 5, 1998, including any amendment or
report filed for the purpose of updating such description.
-1-
<PAGE>
All documents subsequently filed by Motorola pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 5. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law contains
detailed provisions for indemnification of directors and officers of Delaware
corporations against expenses, judgments, fines and settlements in connection
with litigation. The Company's Restated Certificate of Incorporation, as
amended, and its Directors' and Officers' Liability Insurance Policy provide for
indemnification of the directors and officers of the Company against certain
liabilities.
Item 6. Exhibits
Exhibit
Number Description
4.1 Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3(i)(b) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended April 2, 1994 (File No. 1-7221)).
4.2 Certificate of Designations, Preferences and Rights of Junior
Participating Preferred Stock, Series B (incorporated by reference to
Exhibit 3.3 to the Registrant's Registration Statement on Form S-3
dated January 20, 1999 (Registration No. 333-70827)).
4.3 By-laws, as amended through February 17, 1999 (incorporated by
reference to Exhibit 3.3 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (File No. 1-7221)).
4.4 Rights Agreement, dated as of November 5, 1998 between the Registrant
and Harris Trust and Savings Bank, as Rights Agent (incorporated by
reference to Exhibit 1.1 to the Registrant's Amendment No. 1 to
Registration Statement on Form 8-A/A dated March 16, 1999 (File No.
1-7221)).
5.1 An opinion of counsel as to the legality of the shares of common
stock being registered is not required since such shares are not
original issuance shares.
-2-
<PAGE>
5.2 The Registrant undertakes to submit the Plan, as amended, to the
Internal Revenue Service ("IRS") in a timely manner for a
determination letter as to its qualified status, and the Registrant
will make all changes required by the IRS in order to qualify the
Plan.
23.1 Consent of KPMG.
24.1 Power of Attorney (included on the signature page to this registration
statement).
99.1 General Instrument Corporation Savings Plan, as amended and restated
as of January 1, 1998.
99.2 First Amendment to the General Instrument Corporation Savings Plan,
dated as of July 1, 1999.
99.3 Second Amendment to the General Instrument Corporation Savings Plan,
dated as of October 29, 1999.
99.4 Third Amendment to the General Instrument Corporation Savings Plan,
dated as of December 29, 1999.
Item 7. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment hereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant
to Rule 424 (b) under the Securities Act of 1933 if, in the aggregate,
the changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth I the "Calculation of
Registration Fee" table in the effective registration statement.
-3-
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Schaumburg, State of Illinois, on this 12th day of
January, 2000.
MOTOROLA, INC.
By: /s/ Carl F. Koenemann
------------------------------
Name: Carl F. Koenemann
Title: Executive Vice President
and Chief Financial
Officer
Each of the undersigned hereby constitutes and appoints Christopher B.
Galvin, Robert L. Growney, Carl F. Koenemann and Anthony M. Knapp, and each of
them, as attorneys for him and in his name, place and stead, and in any and all
capacities, to execute and file any amendments, supplements or statements with
respect to this Registration Statement, hereby giving and granting to said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing whatsoever requisite and necessary to be done in and about
the premises, as fully, to all intents and purposes, as he might or could do if
personally present at the doing thereof, hereby ratifying and confirming all
that said attorney, or any of them, or their or his substitute or substitutes,
may or shall lawfully do, or cause to be done, by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on January 12, 2000.
Signature Title
Principal Executive Officer:
/s/ Christopher B. Galvin Director, Chairman of the Board and Chief
- --------------------------- Executive Officer
Christopher B. Galvin
Principal Financial Officer:
/s/ Carl F. Koenemann Executive Vice President and Chief
- --------------------------- Financial Officer
Carl F. Koenemann
Principal Accounting Officer:
/s/ Anthony M. Knapp
- ---------------------------
Anthony M. Knapp Senior Vice President and Controller
<PAGE>
Signature Title
Directors:
/s/ Ronnie C. Chan Director
- ---------------------------
Ronnie C. Chan
/s/ H. Laurance Fuller Director
---------------------------
H. Laurance Fuller
/s/ Robert W. Galvin Director
---------------------------
Robert W. Galvin
/s/ Robert L. Growney Director
---------------------------
Robert L. Growney
/s/ Anne P. Jones Director
---------------------------
Anne P. Jones
/s/ Donald R. Jones Director
---------------------------
Donald R. Jones
/s/ Judy C. Lewent Director
- ---------------------------
Judy C. Lewent
/s/ Dr. Walter E. Massey Director
- ---------------------------
Dr. Walter E. Massey
/s/ Nicholas Negroponte Director
- ---------------------------
Nicholas Negroponte
/s/ John E. Pepper, Jr. Director
- ---------------------------
John E. Pepper, Jr.
/s/ Samuel C. Scott III Director
- ---------------------------
Samuel C. Scott III
/s/ Gary L. Tooker Director
- ---------------------------
Gary L. Tooker
<PAGE>
Signature Title
/s/ B. Kenneth West Director
- ---------------------------
B. Kenneth West
/s/ Dr. John A. White Director
- ---------------------------
Dr. John A. White
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act, the
Committee appointed under the Plan has duly caused this Registration Statement
to be signed on behalf of the Plan by the undersigned, thereunto duly
authorized, in the City of Horsham, Commonwealth of Pennsylvania, on January 12,
2000.
GENERAL INSTRUMENT CORPORATION
SAVINGS PLAN
By: GENERAL INSTRUMENT CORPORATION
EMPLOYEE BENEFITS ADMINISTRATIVE
COMMITTEE
By: /s/ Scott A. Crum
--------------------------------
Scott A. Crum, Committee Member
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- -------- -----------
4.1 Restated Certificate of Incorporation, as amended (incorporated
by reference to Exhibit 3(i)(b) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 2, 1994 (File No. 1-7221)).
4.2 Certificate of Designations, Preferences and Rights of Junior
Participating Preferred Stock, Series B (incorporated by reference to
Exhibit 3.3 to the Registrant's Registration Statement on Form S-3
dated January 20, 1999 (Registration No. 333-70827)).
4.3 By-laws, as amended through February 17, 1999 (incorporated by
reference to Exhibit 3.3 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (File No. 1-7221)).
4.4 Rights Agreement, dated as of November 5, 1998 between the
Registrant and Harris Trust and Savings Bank, as Rights Agent
(incorporated by reference to Exhibit 1.1 to the Registrant's
Amendment No. 1 to Registration Statement on Form 8-A/A dated March
16, 1999 (File No. 1-7221)).
5.1 An opinion of counsel as to the legality of the shares of common
stock being registered is not required since such shares are not
original issuance shares.
5.2 The Registrant undertakes to submit the Plan, as amended, to the
Internal Revenue Service ("IRS") in a timely manner for a
determination letter as to its qualified status, and the Registrant
will make all changes required by the IRS in order to qualify the
Plan.
23.1 Consent of KPMG.
24.1 Power of Attorney (included on the signature page to this registration
statement).
99.1 General Instrument Corporation Savings Plan, as amended and restated
as of January 1, 1998.
99.2 First Amendment to the General Instrument Corporation Savings Plan,
dated as of July 1, 1999.
99.3 Second Amendment to the General Instrument Corporation Savings
Plan, dated as of October 29, 1999.
99.4 Third Amendment to the General Instrument Corporation Savings Plan,
dated as of December 29, 1999.
Exhibit 23.1
[LETTERHEAD OF KPMG LLP]
Consent of Independent Auditors
The Board of Directors
Motorola, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-8 of Motorola, Inc. of our reports dated January 13, 1999, except as to Note
8, which is as of March 1, 1999, relating to the consolidated balance sheets of
Motorola, Inc. and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows and related financial statement schedule for each of the years in the
three-year period ended December 31, 1998, which reports appear in or are
incorporated by reference in the annual report on Form 10-K/A of Motorola, Inc.
for the year ended December 31, 1998.
/s/ KPMG LLP
Chicago, Illinois
January 12, 2000
Exhibit 99.1
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
Effective as of July 1, 1997. Amended
and Restated as of January 1, 1998.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I - Adoption................................................ 1
1.1 Adoption ............................................... 1
1.2 Transfer of Assets and Liabilities...................... 1
1.3 Spin-off of NextLevel Systems, Inc. and CommScope, Inc.. 1
ARTICLE II - Definitions............................................ 2
2.1 Accounts.............................................. 2
(a) An Employer Contribution Account............... 2
(b) A Matched Participant Contribution Account..... 2
(c) An Unmatched Participant Contribution Account.. 2
(d) A Rollover Contribution Account................ 2
(e) A Trust-to-Trust Account....................... 2
2.2 Accrued Benefit........................................ 2
2.3 Active Participant..................................... 3
2.4 Administrative Committee............................... 3
2.5 Authorized Leave of Absence............................ 3
2.6 Beneficiary............................................ 3
2.7 Board of Directors..................................... 3
2.8 Chairman............................................... 3
2.9 Code................................................... 3
2.10 Company................................................ 3
2.11 Company Stock.......................................... 3
2.12 CommScope Stock........................................ 3
2.13 Compensation........................................... 3
(a) In General..................................... 3
(b) Code Section 415 Compensation (for Plan Years
Commencing Before January 1, 1998)............. 4
(c) Code Section 414(s) Compensation............... 4
2.14 Compensation Reduction Election........................ 4
2.15 Continuous Service..................................... 4
2.16 Disability or Disabled................................. 5
2.17 Effective Date......................................... 5
2.18 Eligible Employee...................................... 5
(a) Union Employees................................ 5
(b) Leased Employees............................... 5
(c) Independent Contractors........................ 5
2.19 Employee............................................... 5
2.20 Employer............................................... 5
2.21 ERISA.................................................. 6
2.22 Forfeiture............................................. 6
2.23 GSI Plan............................................... 6
2.24 GSI Stock.............................................. 6
2.25 Hardship............................................... 6
<PAGE>
(a) Medical Expenses............................... 6
(b) Home Purchase.................................. 6
(c) Educational Expenses........................... 6
(d) Prevention of Eviction or Foreclosure.......... 6
(e) Other Deemed Hardship Events Designated by the
Internal Revenue Service....................... 6
2.26 Highly Compensated Employee............................ 6
(a) ............................................... 6
(b) ............................................... 7
(1) ...................................... 7
(2) ...................................... 7
(3) ...................................... 7
(4) ...................................... 7
(5) ...................................... 7
(6) ...................................... 7
(c) ............................................... 7
(d) ............................................... 7
(e) ............................................... 7
2.27 Hour of Service......................................... 8
(a) ............................................... 8
(b) ............................................... 8
(c) ............................................... 8
2.28 Investment Committee.................................... 8
2.29 Investment Fund......................................... 8
2.30 Matching Employer Contributions......................... 9
2.31 Normal Retirement Date.................................. 9
2.32 Old GI Plan............................................. 9
2.33 One Year Break In Service............................... 9
2.34 Participant.............................................. 9
2.35 Participant Contributions................................ 9
(a) Matched Participant Contributions............... 9
(b) Unmatched Participant Contributions............. 9
2.36 Period of Non-employment................................. 9
2.37 Plan.................................................... 10
2.38 Plan Administrator...................................... 10
2.39 Plan Year............................................... 10
2.40 Related Company......................................... 10
2.41 Related Plan............................................ 10
2.42 Required Distribution Date.............................. 10
(a) ............................................... 10
(b) ............................................... 10
2.43 Rollover Contribution................................... 10
2.44 Special Fiduciary..... ................................. 10
2.45 Special Section 401(k) Contributions.................... 10
2.46 Spin-Off Date........................................... 10
2.47 Termination of Employment............................... 10
2.48 Transferred Participant................................. 11
2.49 Trust................................................... 11
2.50 Trust Agreement......................................... 11
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<PAGE>
2.51 Trust Fund.............................................. 11
2.52 Trustee................................................. 11
2.53 Trust-to-Trust Transfer................................. 11
2.54 Valuation Date.......................................... 11
2.55 Vesting Service......................................... 12
ARTICLE III - Participation............................................... 12
3.1 Participation........................................... 12
(a) Participation on Effective Date................ 12
(b) Participation After the July 1, 1997........... 12
3.2 Certification of Participation and Compensation to the
Administrative Committee................................ 12
3.3 Participation Upon Re-employment........................ 12
ARTICLE IV - Contributions................................................ 12
4.1 Participant Contributions............................... 12
(a) Participant Contributions...................... 13
(1) Payroll Compensation Reductions....... 13
(2) Bonus Compensation Reductions.................. 13
(3) Initial and Changed Compensation Reduction
Elections...................................... 14
(4) Revocations of Compensation Reduction
Elections...................................... 14
(5) Contribution and Limitations on Contribution
of Elected Amounts............................. 14
(b) Deadline for Participant Contributions......... 15
(c) Restrictions on Participant Contributions...... 15
(1) Dollar Limitations.................... 15
(2) Discrimination Limitations............ 16
(A) General Limit................. 16
(B) Alternative Limit............. 16
(d) Average ADP; Actual Deferral Percentage........ 18
(e) Aggregation Rules.............................. 18
(f) Allocation of Participant Contributions........ 19
4.2 Matching Employer Contributions......................... 19
(a) Matching Employer Contributions................ 19
(b) Deadline for Matching Employer Contributions... 19
(c) Restrictions on Matching Employer
Contributions.................................. 19
(1) General Limit......................... 19
(2) Alternative Limit..................... 19
(d) Average ACP; Actual Contribution Percentage.... 21
(e) Aggregation Rules.............................. 21
(f) Allocation of Matching Employer Contributions.. 22
4.3 Multiple Use of Sections 4.1(c)(2) and 4.2(c)........... 22
(a) ............................................... 22
(b) ............................................... 22
(c) ............................................... 22
(d) ............................................... 22
(e) Average Aggregate Contribution Percentage;
Aggregate Contribution Percentage.............. 24
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<PAGE>
4.4 Order of Application of Limitations of Sections 4.1(c)(1),
4.1(c)(2), 4.2(c), 4.3 and 5.1.......................... 24
4.5 Special Section 401(k) Contributions.................... 24
(a) Special Section 401(k) Contributions........... 24
(b) Deadline for Special Section 401(k)
Contributions.................................. 24
(c) Allocation of Special Section 401(k)
Contributions.................................. 24
4.6 Rollover Contributions into the Plan.................... 25
4.7 Trust-to-Trust Transfers to the Plan.................... 25
4.8 Allocation of Income or Loss............................ 25
(a) Income or Loss for Plan Year................... 26
(b) Income or Loss for Period Between End of
Plan Year and Distribution..................... 26
4.9 Determination and Amount of Employer Contributions...... 26
4.10 Vesting................................................. 26
(a) Termination Upon Normal Retirement Date,
Death or Disability............................ 26
(b) Other Termination.............................. 26
(1) ...................................... 26
(2) ...................................... 26
(3) ...................................... 26
(4) ...................................... 26
(5) ...................................... 27
(c) Forfeitures.................................... 27
(d) Return to Employment........................... 27
(e) Application of Forfeitures..................... 27
ARTICLE V - Limitations on Contributions.................................. 28
5.1 Limitations on Contributions............................ 28
(a) Limitations on Contributions................... 28
(b) Definitions.................................... 28
(1) Annual Additions...................... 28
(A) .............................. 28
(B) .............................. 28
(C) .............................. 28
(D) .............................. 28
(E) .............................. 28
(F) .............................. 28
(2) Maximum Annual Additions.............. 29
(A) Percentage Limitation......... 29
(B) Dollar Limitation............. 29
(c) Elimination of Annual Excess................... 29
(1) Unmatched Participant Contributions... 29
(2) Matched Participant Contributions
and Related Matching Employer
Contributions......................... 29
(3) Special Section 401(k) Contributions.. 29
(d) Combined Limitations........................... 30
(e) Standard of Control............................ 30
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<PAGE>
ARTICLE VI - Trustee and Trust Fund....................................... 30
6.1 Trust Agreement......................................... 30
6.2 Selection of Trustee.................................... 30
6.3 Trustee's Duties........................................ 30
6.4 Trust Expenses.......................................... 31
6.5 Trust Entity............................................ 31
6.6 Separate Accounts....................................... 31
6.7 Investment Funds........................................ 31
6.8 Investment of Matching Employer Contributions........... 32
6.9 Investment of Participants' Employer Contribution
Accounts................................................ 32
(a) In General..................................... 32
(b) Direction of Pre-June 10, 1992 Employer
Contribution Accounts.......................... 32
(c) Investment in CommScope Stock Fund and GSI
Stock Fund..................................... 32
(d) Dividends on CommScope Stock and GSI Stock..... 32
6.10 Investment Elections with Regard to Participant
Contributions, Special Section 401(k) Contributions,
Rollover Contributions, Trust-to-Trust Transfers and
Cash Dividends with Respect to CommScope Stock and
GSI Stock............................................... 33
6.11 Investment Elections with Regard to Matched
Participant Contribution Accounts, Unmatched
Participant Contribution Accounts, Rollover
Contribution Accounts and Trust-to-Trust Accounts....... 33
(a) In General..................................... 33
(b) Investment in CommScope Stock Fund and GSI
Stock Fund..................................... 33
(c) Dividends on CommScope Stock and GSI Stock..... 34
6.12 Special Provisions for Company Stock Fund, CommScope
Stock Fund and GSI Stock Fund........................... 34
6.13 Shareholder Rights in Company Stock..................... 34
(a) Participant Directions......................... 34
(b) Named Fiduciaries.............................. 35
(c) Confidentiality................................ 35
(d) Fiduciary Override............................. 35
6.14 Trust Income............................................ 35
6.15 Correction of Error..................................... 36
6.16 Right of the Employers to Trust Assets.................. 36
(a) Return of Contributions Where Deduction is
Disallowed..................................... 36
(b) Return of Contributions Made Through Mistake
of Fact........................................ 36
ARTICLE VII - Benefits.................................................... 37
7.1 Payment of Benefits in General.......................... 37
7.2 Payment of Vested Accrued Benefit on Termination
of Employment........................................... 37
7.3 Payment of Accrued Benefit on Account of Death.......... 37
(a) Payment to Surviving Spouse.................... 37
(b) Payment to Other Beneficiary................... 37
(c) Designation of Beneficiary..................... 37
(1) ...................................... 38
(2) ...................................... 38
(d) Period of Distribution......................... 38
7.4 Participant Withdrawals................................. 38
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<PAGE>
(a) Withdrawal from Rollover Contribution Account
and Trust-to-Trust Account..................... 38
(b) Withdrawals from the Employer Contribution
Account Attributable to Matching Employer
Contributions Made Prior to January 1, 1991.... 39
(c) Withdrawal After Age 59-1/2.................... 39
(d) Hardship Withdrawal............................ 39
(1) Necessary to Satisfy Immediate and
Heavy Financial Need.................. 39
(2) Exhaustion of Other Sources of Funds.. 40
(3) Twelve Month Suspension of Elective
Contributions......................... 40
(4) Limitation on Participant Contribution
in the Year Following the Hardship
Withdrawal............................ 40
7.5 Deadline for Payment of Benefits........................ 40
7.6 Spousal Consents........................................ 40
(a) Conditions for Valid Spousal Consent........... 40
(1) ...................................... 40
(2) ...................................... 41
(3) ...................................... 41
(4) ...................................... 41
(b) Treatment of Former Spouse as a Spouse Pursuant
to a Qualified Domestic Relations Order........ 41
7.7 Facility of Payment..................................... 41
7.8 Form of Payment......................................... 41
7.9 Lump Sum Payment Without Election....................... 41
7.10 Direct Rollover to Another Plan......................... 41
7.11 Distributions to an Employed Participant on his
Required Distribution Date.............................. 42
7.12 Request for Withdrawal or Distribution.................. 42
7.13 Deduction of Taxes from Amounts Payable................. 42
7.14 Improper Payment of Benefits............................ 42
7.15 Participant Loans....................................... 42
(a) Loan Amount.................................... 42
(1) ...................................... 42
(A) .............................. 43
(B) .............................. 43
(2) ...................................... 43
(b) Loan Terms..................................... 43
(c) Level Amortization............................. 43
(1) Authorized Leave of Absence........... 43
(2) Military Leave........................ 43
(d) Loans Granted on a Reasonably Equivalent
Basis.......................................... 43
(e) Source of Loans................................ 43
(1) the Rollover Contribution Account..... 44
(2) the Unmatched Participation
Contribution Account.................. 44
(3) the Matched Participant Contribution
Account............................... 44
(4) the Employer Contribution Account;.... 44
(5) the Trust-to-Trust Account............ 44
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<PAGE>
(f) Loan Earmarked as a Separate Investment for
Participant's Accounts......................... 44
(g) Loans Subject to Terms and Conditions Imposed
by Administrative Committee.................... 44
ARTICLE VIII - Administration............................................. 45
8.1 Board of Directors Duties............................... 45
8.2 Chairman Duties......................................... 45
(a) ............................................... 45
(b) ............................................... 45
8.3 Administrative Committee Membership..................... 45
8.4 Administrative Committee Structure...................... 45
8.5 Administrative Committee Actions........................ 45
8.6 Administrative Committee Duties......................... 46
(a) ............................................... 46
(b) ............................................... 46
(c) ............................................... 46
(d) ............................................... 46
(e) ............................................... 46
(f) ............................................... 46
(g) ............................................... 46
(h) ............................................... 46
(i) ............................................... 46
(j) ............................................... 46
(k) ............................................... 46
(l) ............................................... 46
(m) ............................................... 46
8.7 Investment Committee Membership......................... 47
8.8 Investment Committee Structure.......................... 47
8.9 Investment Committee Actions............................ 47
8.10 Investment Committee Duties............................. 47
(a) ............................................... 47
(b) ............................................... 47
(c) ............................................... 47
(d) ............................................... 47
(e) ............................................... 48
(f) ............................................... 48
(g) ............................................... 48
8.11 Committee and Plan Administrator Bonding and Expenses... 48
8.12 Allocations and Delegations of Responsibility........... 48
(a) Delegations of Responsibility.................. 48
(b) Allocations of Responsibility.................. 48
8.13 Information To Be Supplied by Employers................. 49
8.14 Records................................................. 49
8.15 Fiduciary Capacity...................................... 49
8.16 Plan Administrator...................................... 49
8.17 Fiduciary Responsibility................................ 49
(a) Determination of Validity of a Spousal Consent. 49
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<PAGE>
(b) Determination of Validity of a Qualified
Domestic Relations Order....................... 50
8.18 Committee/Plan Administrator Decisions Final............ 50
ARTICLE IX - Claims Procedure............................................. 50
9.1 Initial Claim for Benefits.............................. 50
9.2 Review of Claim Denial.................................. 51
ARTICLE X - Amendment and Termination of the Plan......................... 51
10.1 Plan Termination........................................ 51
10.2 Amendments.............................................. 51
10.3 Payment Upon Termination................................ 52
10.4 Withdrawal from the Plan by an Employer................. 52
ARTICLE XI - Top Heavy Provisions......................................... 52
11.1 Application............................................. 52
11.2 Special Top Heavy Definitions........................... 52
(a) Aggregate Employer Contributions............... 53
(b) Aggregation Group.............................. 53
(1) Mandatory Aggregation Group........... 53
(A) .............................. 53
(B) .............................. 53
(2) Permissive Aggregation Group.......... 53
(c) Determination Date............................. 54
(d) Key Employee................................... 54
(1) ...................................... 54
(A) .............................. 54
(B) .............................. 54
(C) .............................. 54
(D) .............................. 54
(2) ...................................... 55
(A) .............................. 55
(B) .............................. 55
(3) ...................................... 55
(4) ...................................... 55
(5) ...................................... 55
(A) .............................. 55
(B) .............................. 56
(e) Non-Key Employee............................... 56
(f) Present Value of Accrued Benefits.............. 56
(1) ...................................... 56
(A) .............................. 56
(B) .............................. 56
(2) ...................................... 56
(A) Interest rate: 5%............. 57
(B) Post Retirement Mortality:
1984 Unisex Pension Table..... 57
(C) ............................. 57
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<PAGE>
(D) .............................. 57
(3) ...................................... 57
(4) ...................................... 57
(A) .............................. 57
(B) .............................. 58
(g) Related Transfer............................... 58
(h) A Top Heavy Aggregation Group.................. 58
(i) Top Heavy Plan................................. 59
(j) Unrelated Transfer............................. 59
11.3 Special Top Heavy Provisions............................ 59
(a) Minimum Employer Contributions................. 59
(1) ...................................... 59
(2) ...................................... 59
(3) ...................................... 59
(b) Vesting........................................ 60
(c) Limitations.................................... 60
(d) Transition Rule for a Top Heavy Plan........... 60
(e) Transition Rule for a Super Top Heavy Plan..... 60
(f) Terminated Plan................................ 61
(g) Frozen Plans................................... 61
ARTICLE XII - Miscellaneous Provisions.................................... 61
12.1 Employer Joinder........................................ 61
12.2 Plan Merger............................................. 61
12.3 Non-Alienation of Benefits.............................. 62
(a) In General..................................... 62
(b) Exception for Certain Domestic Relations
Orders......................................... 62
(1) ...................................... 62
(2) ...................................... 62
(3) ...................................... 62
12.4 Qualified Domestic Relations Order...................... 62
(a) Qualified Domestic Relations Order............. 62
(1) ...................................... 62
(2) ...................................... 62
(3) ...................................... 62
(4) ...................................... 62
(b) Information Required in a Qualified Domestic
Relations Order................................ 62
(1) ...................................... 63
(2) ...................................... 63
(3) ...................................... 63
(4) ...................................... 63
(c) Provisions Prohibited in a Qualified Domestic
Relations Order................................ 63
(1) ...................................... 63
(2) ...................................... 63
(3) ...................................... 63
(d) Nondisqualifying Provisions.................... 63
(1) ...................................... 63
(A) .............................. 63
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<PAGE>
(B) .............................. 63
(2) ...................................... 63
(3) ...................................... 64
(e) Treatment of Former Spouse as the Participant's
Spouse......................................... 64
(f) Separate Accounting of Amounts Payable Pursuant
to a Qualified Domestic Relations Order........ 64
12.5 Unclaimed Amounts....................................... 64
12.6 No Contract of Employment............................... 64
12.7 Reduction for Overpayment............................... 64
12.8 Employees' Trust........................................ 64
12.9 Source of Benefits...................................... 65
12.10 Indemnification......................................... 65
12.11 Company Merger.......................................... 65
12.12 Gender and Number....................................... 65
12.13 Headings................................................ 65
12.14 Uniform and Non-Discriminatory Application of
Provisions.............................................. 65
12.15 Invalidity of Certain Provisions........................ 65
12.16 Qualified Military Service.............................. 65
12.17 Law Governing........................................... 66
- x -
<PAGE>
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
ARTICLE I
Adoption
1.1 Adoption. The General Instrument Corporation Savings Plan, as set forth
herein, was established effective July 1, 1997 as the NextLevel Systems, Inc.
Savings Plan. The name of the Plan was changed to General Instrument Corporation
Savings Plan effective February 2, 1998. The Plan, as amended and restated
herein is effective January 1, 1998, except as otherwise provided.
The Plan is intended to be a qualified profit sharing plan as described in
Sections 401(a) and 401(k) of the Internal Revenue Code.
1.2 Transfer of Assets and Liabilities. The account balances under the
General Instrument Corporation Savings Plan maintained by General Instrument
Corporation of Delaware prior to the Spin-Off Date (as defined below) (the "Old
GI Plan") of each Transferred Participant shall be transferred to the Plan as
soon as reasonably practicable on or following the date of distribution by
General Instrument Corporation ("Old GI") of all shares of NextLevel Systems,
Inc. owned by it (the "Spin-off Date"), subject to the receipt of a favorable
determination by the Internal Revenue Service that the Plan is qualified under
Sections 401(a) and 401(k) of the Code and that such transfer does not cause a
loss of qualification of the Plan or the Old GI Plan. Except as provided in
Sections 6.9(c) and 6.11(b), a Transferred Participant's transferred account
balances shall remain invested in the same Investment Funds in which such
transferred accounts were invested under the Old GI Plan immediately prior to
the transfer until the Participant elects to change the investment of his
Accounts in accordance with Sections 6.9 and 6.11.
1.3 Spin-off of NextLevel Systems, Inc. and CommScope, Inc. Old GI spun off
CommScope, Inc. and NextLevel Systems, Inc. by distributing to Old GI's
shareholders, as a spin-off dividend, all shares of NextLevel Systems, Inc.
common stock ("Company Stock") and CommScope, Inc. common stock ("CommScope
Stock") owned by Old GI. Old GI was renamed General Semiconductor, Inc. ("GSI")
as of the Spin-off Date. As a result of the spin-off. The Old GI Plan received
shares of Company Stock and CommScope Stock as dividends with respect to shares
of Old GI's common stock ("Old GI Stock") held by the Old GI Plan as of the
Spinoff Date. The Old GI Stock held by the Old GI Plan is to be replaced with
General Semiconductor, Inc. common stock ("GSI Stock"). The shares of Company
Stock, GSI Stock and CommScope Stock allocable to the Transferred Participant's
accounts under the Old GI Plan have been or will be transferred to Participant's
Accounts under the Plan pursuant to the transfer of assets and liabilities in
accordance with Section 1.2. In order to provide Transferred Participants with
the opportunity to continue to hold the same economic investment following the
spin-off of NextLevel Systems, Inc. and CommScope, Inc. as before, and enhanced
flexibility following, the spin-off, the Plan provides, subject to the
provisions of Sections 6.9, 6.10, 6.11 and 6.12, that Participants may elect to
continue holding shares of GSI Stock and CommScope Stock transferred to their
Accounts from the Old GI Plan, or may elect to reinvest such shares in
accordance with the provisions of Section 6.9 and 6.11, as applicable.
<PAGE>
ARTICLE II
Definitions
The following terms whenever used in the following capitalized form shall
have the meaning set forth below, unless the context clearly indicates
otherwise:
2.1 "Accounts" means a Participant's share in the Trust. Each Participant
shall have the following five (5) separate Accounts consisting of the amounts
described below, plus income and gains and less expenses and losses attributable
thereto, and reduced by any distributions therefrom:
(a) An "Employer Contribution Account" to which shall be credited
Matching Employer Contributions made in accordance with Section 4.2 and
Minimum Employer Contributions made in accordance with Section 11.3(a) and
amounts transferred to the Plan from the Participant's employer
contribution account under the Old GI Plan. To the extent required by the
provisions of Section 4.10(d), the Participant's Employer Contribution
Account shall be divided into a "Pre-Break Employer Contribution
Subaccount" and a "Post-Break Employer Contribution Subaccount".
(b) A "Matched Participant Contribution Account" to which shall be
credited Matched Participant Contributions made in accordance with Section
4.1 and Special Section 401(k) Contributions made in accordance with
Section 4.5 and amounts transferred to the Plan from the Participant's
matched participant contribution account under the Old GI Plan. The
Participant's Matched Participant Contribution Account shall be separated
into (i) a Matched Participant Contribution Subaccount and (ii) a Special
Section 401(k) Contribution Subaccount.
(c) An "Unmatched Participant Contribution Account" to which shall be
credited Unmatched Participant Contributions made in accordance with
Section 4.1 and amounts transferred to the Plan from the Participant's
unmatched participant contribution account under the Old GI Plan.
(d) A "Rollover Contribution Account" to which shall be credited
Rollover Contributions made in accordance with Section 4.6 and amounts
transferred to the Plan from the Participant's rollover contribution
account under the Old GI Plan.
(e) A "Trust-to-Trust Account" to which shall be credited
Trust-to-Trust Transfers made to the Plan on behalf of a Participant and
amounts transferred to the Plan from the Participant's trust-to-trust
account under the Old GI Plan. To the extent required by the circumstances,
a Participant's Trust-to-Trust Account shall be divided into a "Pre-1996
Trust-to-Trust Account" and a "Post-1995 Trust-to-Trust Account."
2.2 "Accrued Benefit" means a Participant's total interest in the Trust
composed of such Participant's Accounts. The value of an Accrued Benefit at any
time during any Plan Year shall be its value as adjusted on the coinciding or
immediately preceding Valuation Date.
- 2 -
<PAGE>
2.3 "Active Participant" means a Participant who is an Eligible Employee as
of any day of the Plan Year.
2.4 "Administrative Committee" means the committee appointed pursuant to
Section 8.3 to administer the Plan. Effective on and after February 2, 1998, the
Administrative Committee is the General Instrument Corporation Employee Benefits
Administrative Committee.
2.5 "Authorized Leave of Absence" means an absence with or without
compensation, authorized by an Employer on a non-discriminatory basis for
disability, jury duty, military duty, or other reasons.
2.6 "Beneficiary" means any person designated by a Participant, unless
otherwise designated under the terms of the Plan, in accordance with Section
7.3(c) to receive death benefits under the Plan.
2.7 "Board of Directors" means the board of directors of the Company.
2.8 "Chairman" means the chairman of the Board of Directors.
2.9 "Code" means the Internal Revenue Code of 1986, as amended, or any
succeeding Internal Revenue Code, and references to sections thereof shall be
deemed to include any such sections as amended, modified or renumbered.
2.10 "Company" means (a) prior to February 2, 1998, NextLevel Systems,
Inc., and (b) on and after February 2, 1998, General Instrument Corporation or
any successor corporation by merger, consolidation, purchase or otherwise, which
elects to adopt the Plan and the Trust.
2.11 "Company Stock" means (a) prior to February 2, 1998, the common stock
of NextLevel Systems, Inc. and (b) on and after February 2, 1998, the common
stock of General Instrument Corporation, which constitutes qualifying employer
securities (as defined in Section 407(d)(5) of ERISA).
2.12 "CommScope Stock" means the common stock of CommScope, Inc.
transferred from the Old GI Plan to the Transferred Participants' Accounts
pursuant to Sections 1.2 and 1.3 and invested in the CommScope Stock Fund.
2.13 "Compensation" means the amounts below:
(a) In General. Except as provided in (b) or (c), Compensation means
the total amount of base salary and wages paid by an Employer through the
U.S. payroll system of the Employer to a Participant while an Eligible
Employee, including short-term disability payments made directly from the
assets of the Employer, and excluding overtime pay, commissions, incentive
pay, severance pay and any other cash payments or benefits provided,
increased by the amount of any elective contributions made by an Employer
or any Related Company on behalf of an Employee that are not includable in
the Participant's income under Section 125, Section 402(e)(3), Section
402(h)(1)(B), Section 403(b), Section 408(p)(2)(A)(i) or Section 457 of the
Code.
- 3 -
<PAGE>
For purposes of Section 4.1(a), "Payroll Compensation" means
Compensation as defined above, and "Bonus Compensation" means, for any
year, the amount, if any, payable to an Active Participant in that year as
an annual formula-based profit sharing bonus payable pursuant to the
Employer's profit sharing bonus program.
(b) Code Section 415 Compensation (for Plan Years Commencing Before
January 1, 1998). For purposes of determining the limitations under Plan
Articles V and XI (except for purposes of Plan Section 11.2(d)) for Plan
Years commencing prior to January 1, 1998, Compensation means total
compensation paid to an Employee by the Employers and all Related Companies
for the Plan Year, not increased by the amount of any elective
contributions that are made by an Employer or any Related Company on behalf
of an Employee that are not includable in the Employee's income under
Section 125, Section 402(e)(3), Section 402(h)(1)(B), Section 403(b),
Section 408(p)(2)(A)(i) or Section 457 of the Code and excluding any
benefits paid under the Plan or under any other qualified plan described in
Section 401(a) of the Code, or other deferred compensation, stock options
or other distributions which receive special tax benefit.
(c) Code Section 414(s) Compensation. For purposes of determining
whether an Employee is a Highly Compensated Employee in accordance with
Plan Section 2.26 or a Key Employee in accordance with Plan Section
11.2(d), for purposes of determining the Actual Contribution Percentage
under Plan Section 4.2(d) and the Actual Deferral Percentage under Plan
Section 4.1(d), and, with respect to Plan Years commencing on or after
January 1, 1998, for purposes of determining the limitations under Articles
V and XI, Compensation means Compensation as defined in (b) above,
increased by the amount of any elective contributions made by an Employer
or any Related Company on behalf of an Employee that are not includable in
the Employee's income under Section 125, Section 402(e)(3), Section
402(h)(1)(B), Section 403(b), Section 408(p)(2)(A)(i) or Section 457 of the
Code.
Except for purposes of determining Highly Compensated Employees under Plan
Section 2.26, Key Employees under Plan Section 11.2(d) and the limitations under
Plan Section 5.1, the amount of an Employee's annual Compensation taken into
account under the Plan will not exceed the maximum amount of annual Compensation
permitted to be taken into account under Section 401(a)(17) of the Code
($160,000 in 1997, as adjusted for cost-of-living increases in accordance with
applicable regulations and rulings under Section 401(a)(17) of the Code).
2.14 "Compensation Reduction Election" means the properly completed and
executed form provided by the Administrative Committee which has been filed by
the Participant with the Administrative Committee as provided in Section 4.1. A
"Bonus Compensation Reduction Election" shall apply to Bonus Compensation (as
defined in Section 2.13(a)). A "Payroll Compensation Reduction Election" shall
apply to Payroll Compensation (as defined in Section 2.13(a)).
2.15 "Continuous Service" means the period of employment of an Employee by
an Employer or Related Company (including periods of Authorized Leave of
Absence) measured from the date an Employee first performs an Hour of Service
upon employment or reemployment
- 4 -
<PAGE>
to the date of the Employee's Termination of Employment; provided that an
Employee shall not be credited with more than 12 months of Continuous Service
with respect to any single period of Authorized Leave of Absence; and provided,
further, that if an Employee who has a Termination of Employment is reemployed
by an Employer or a Related Company and performs an Hour of Service before he
incurs a One Year Break In Service, such Termination of Employment shall be
disregarded and his employment shall be treated as continuous through the date
he resumes employment as an Employee. An Employee shall receive 1/12 of a year
of Continuous Service for each full or partial calendar month of employment.
Any person who was employed by Next Level Communication ("NLC") on
September 27, 1995, and who, immediately thereafter and pursuant to Old GI's
acquisition of the assets of NLC, became an Employee of an Employer, shall be
credited with Continuous Service under the Plan for his periods of employment
with NLC prior to its acquisition by Old GI. Any person who was employed by the
Broadcast Products Group of Compression Labs, Inc. ("CLI") on June 24, 1996, and
who, immediately thereafter and pursuant to the acquisition of certain assets of
such Broadcast Products Group by Charger Industries, Inc. (now known as
Magnitude Compression Systems, Inc. ("MCS")) became an Employee of MCS, shall be
credited with Continuous Service under the Plan for his periods of employment
with CLI prior to such acquisition.
2.16 "Disability" or "Disabled" means a physical or mental injury or
disease for which benefits are payable under the terms of the Company's
long-term disability insurance plan (or for which benefits would have been
payable had the Participant been a participant in such long-term disability
insurance plan) or any successor to such plan, as in effect on the date such
disability is incurred.
2.17 "Effective Date" of this amendment and restatement is January 1, 1998.
The original effective date of the Plan was July 1, 1997.
2.18 "Eligible Employee" means any Employee who is employed by an Employer
and paid through the U.S. payroll system of the Employer but excluding:
(a) Union Employees. Any Employee a member of a unit of employees
covered by a collective bargaining agreement, unless the agreement requires
inclusion of the Employee in the Plan.
(b) Leased Employees. Leased Employees. Any Employee who is a leased
employee within the meaning of Section 414(n) of the Code.
(c) Independent Contractors. Any individual who is classified by the
Employer as an independent contractor.
2.19 "Employee" means any common law employee of an Employer or a Related
Company and any leased employee (within the meaning of Code Section 414(n)) of
an Employer or any Related Company.
2.20 "Employer" means the Company and any Related Company which, pursuant
to Section 12.1, elects to adopt the Plan.
- 5 -
<PAGE>
2.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
2.22 "Forfeiture" means the portion of a Participant's Accrued Benefit
which is forfeited as provided in Sections 4.1(c)(1), 4.1(c)(2), 4.2(c), 4.10(c)
and 12.5.
2.23 "GSI Plan" Plan means the General Semiconductor, Inc. Savings Plan.
2.24 "GSI Stock" Stock means common stock of General Semiconductor, Inc.
transferred from the Old GI Plan to the Transferred Participants' Accounts
pursuant to Sections 1.2 and 1.3 and invested in the GSI Stock Fund.
2.25 "Hardship" means an immediate and heavy financial need of the
Participant on account of:
(a) Medical Expenses. Expenses for medical care described in Section
213(d) of the Code previously incurred by the Participant, the
Participant's spouse or any dependents of the Participant (as defined in
Section 152 of the Code) or amounts necessary for these persons to obtain
medical care described in Section 213(d) of the Code;
(b) Home Purchase. Costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments);
(c) Educational Expenses. Payment of tuition and related educational
fees for the next 12 months of post-secondary education for the
Participant, his spouse, children or dependents (as defined in Section 152
of the Code);
(d) Prevention of Eviction or Foreclosure. Payments necessary to
prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal residence; and
(e) Other Deemed Hardship Events Designated by the Internal Revenue
Service. Such other events, if any, that are designated by the Internal
Revenue Service as constituting deemed immediate and heavy financial needs
in regulations, revenue rulings, notices, or other documents of general
applicability.
2.26 "Highly Compensated Employee" means, for any Plan Year, any individual
who (i) is an Employee described in subsection (a) or (b) below, or (ii) is a
former Employee described in subsection (c), below:
(a) An Employee who at any time during the current Plan Year or the
preceding Plan Year is a more than five percent (5%) owner (or is
considered as owning more than five percent (5%) within the meaning of
Section 318 of the Code) ("5% Owner") of the Employer or a Related Company;
- 6 -
<PAGE>
(b) An Employee who (i) received Compensation during the preceding
Plan Year in excess of $80,000 (in 1996, as adjusted in accordance with
regulations and rulings under Section 414(q) of the Code), and (ii) if the
Administrative Committee elects to apply this clause (ii) to determine the
Highly Compensated Employees for a Plan Year, is in the group consisting of
the top twenty percent (20%) of the total number of persons employed by the
Employer and Related Companies when ranked on the basis of Compensation
paid during the preceding Plan Year, provided that, for purposes of
determining the total number of persons employed by the Employer and
Related Companies, the following Employees shall be excluded:
(1) Employees who have not completed an aggregate of six (6)
months of service during the preceding Plan Year,
(2) Employees who work less than seventeen and one-half (17-1/2)
hours per week for 50% or more of the total weeks worked by such
employees during the preceding Plan Year,
(3) Employees who normally work during not more than six (6)
months during any year,
(4) Employees who have not attained age 21 by the end of the
preceding Plan Year,
(5) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer or a Related Company which constitutes income during
the preceding Plan Year from sources within the United States (within
the meaning of Section 861(a)(3) of the Code), and
(6) Except to the extent provided in regulations prescribed by
the Secretary of the Treasury, Employees who are members of a
collective bargaining unit represented by a collective bargaining
agent with which an Employer or a Related Company has or has had a
bargaining agreement.
(c) A former Employee of an Employer or any Related Company shall also
be treated as a Highly Compensated Employee for a Plan Year if such former
Employee was a Highly Compensated Employee (1) at the time he has a
Termination of Employment, or (2) at any time after he attains age 55.
(d) For purposes of this Section 2.26, an Employee who performs no
services for the Employer or Related Companies during a Plan Year (for
example, an Employee who is on an Authorized Leave of Absence throughout
the Plan Year) shall be treated as having had a Termination of Employment
in the Plan Year in which he last performed services for the Employer or a
Related Company.
(e) For purposes of this Section, an Employee who performs services
for the Employer or a Related Company during a Plan Year shall nevertheless
be deemed to have had a Termination of Employment (solely for purposes of
determining whether such
- 7 -
<PAGE>
Employee is a Highly Compensated Employee for any period after he has an
actual Termination of Employment) if (1) in a Plan Year prior to his
attainment of age 55, the Employee receives Compensation in an amount less
than 50% of his average annual Compensation for the three consecutive
calendar years preceding such Plan Year during which his Compensation was
the greatest (or the total period of the Employee's service with the
Employer and Related Companies, if less) and (2) after such Plan Year in
which the Employee is deemed to have had a Termination of Employment and
before the Plan Year in which the Employee has an actual Termination of
Employment, the Employee's services for and Compensation from the Employer
and Related Companies do not increase significantly.
2.27 "Hour of Service" means each hour for which an Employee is paid, or
entitled to payment, by an Employer or a Related Company:
(a) for the performance of duties;
(b) on account of a period of time during which no duties were
performed; provided that, no more than 501 Hours of Service shall be
credited for any single continuous period during which an Employee performs
no duty, and provided that no Hours of Service shall be credited for
payments made or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation, unemployment compensation
or disability insurance laws, or for reimbursement of medical expenses; and
(c) for which back pay, irrespective of mitigation of damages, is
awarded or agreed to by the Employer or Related Company; provided that, no
more than 501 Hours of Service shall be credited for any single continuous
period of time during which the Employee did not or would not have
performed duties and, provided that, Hours of Service credited under (a)
and (b) shall not be credited under (c).
The determination of Hours of Service for reasons other than the
performance of duties shall be determined in accordance with the provisions of
Labor Department Regulations Section 2530.200b-2(b), and Hours of Service shall
be credited to computation periods in accordance with the provisions of Labor
Department Regulations Section 2530.200b-2(c).
2.28 "Investment Committee" means the Committee appointed pursuant to
Section 8.7 to manage and control Plan assets. Effective on and after February
2, 1998, the Investment Committee is the General Instrument Corporation Employee
Benefits Investment Committee.
2.29 "Investment Fund" means each pooled or commingled investment fund
designated by the Investment Committee pursuant to Section 6.7, including a fund
(the "Company Stock Fund") designated for investment in Company Stock. Up to
100% of the assets of the Company Stock Fund may be invested in Company Stock.
Notwithstanding the foregoing, the Company Stock Fund shall not invest in any
shares of Company Stock or any other qualifying employer security (within the
meaning of Section 407(d)(5) of ERISA) prior to the Spin-Off Date. The Special
Fiduciary shall direct the investment of the assets, if any, held in the Company
Stock Fund prior to the Spin-Off Date in its sole discretion.
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Effective as of the Spin-off Date, two additional Investment Funds will be
established and maintained under the Plan: the "GSI Stock Fund" and the
"CommScope Stock Fund". Subject to the provisions of Sections 6.9, 6.10, 6.11
and 6.12, shares of CommScope Stock received by a Transferred Participant's
Accounts from the Old GI Plan will be transferred to the CommScope Stock Fund,
and shares of GSI Stock received by a Transferred Participant's Accounts from
the Old GI Plan will be transferred to the GSI Stock Fund.
2.30 "Matching Employer Contributions" means the payments made from time to
time by an Employer to the Trustee in accordance with Section 4.2.
2.31 "Normal Retirement Date" means (a) in the case of a Transferred
Participant who became a participant in the Old GI Plan before October 1, 1993,
the date on which the Transferred Participant attains age 65, and (b) in the
case of a Participant who is not described in (a), the later of (1) the date on
which the Participant attains age 65 or (2) the earlier of (i) the Participant's
completion of two years of Vesting Service or (ii) the fifth (5th) anniversary
of the date on which the Participant commenced participation in the Plan (or the
Old GI Plan).
2.32 "Old GI Plan" means the General Instrument Corporation Savings Plan
maintained by General Instrument Corporation of Delaware immediately prior to
the Spin-Off Date.
2.33 "One Year Break In Service" means a Period of Non-employment of at
least twelve (12) consecutive months.
2.34 "Participant" means a current or former Eligible Employee
participating in the Plan as provided in Article III.
2.35 "Participant Contributions" means the contributions made by an
Employer on behalf of an Active Participant attributable to reductions in the
Participant's Compensation pursuant to a Compensation Reduction Election made in
accordance with Section 4.1 including:
(a) "Matched Participant Contributions" which means the portion of the
Participant's Contributions made by an Employer on behalf of a Participant
with respect to which the Employer shall make Matching Employer
Contributions in accordance with Section 4.2; and
(b) "Unmatched Participant Contributions" which means the portion of
the Participant Contributions made by an Employer on behalf of a
Participant with respect to which the Employer shall not make Matching
Employer Contributions in accordance with Section 4.2.
2.36 "Period of Non-employment" means the period of time from the earliest
of (a) an Employee's Termination of Employment, (b) the first anniversary of the
commencement of an Authorized Leave of Absence, or (c) the first anniversary of
an Employee's first absence from work for any reason other than a Termination of
Employment or Authorized Leave of Absence, until the date the Employee is
credited with an Hour of Service upon reemployment by an Employer or a Related
Company.
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2.37 "Plan" means (a) prior to February 2, 1998, the NextLevel Systems,
Inc. Savings Plan and (b) on and after February 2, 1998, the General Instrument
Corporation Savings Plan, as herein set forth, and as hereafter from time to
time amended.
2.38 "Plan Administrator" means the person appointed in accordance with
Section 8.16 to serve as the plan administrator within the meaning of Section
414(g) of the Code and as the administrator within the meaning of Section
3(16)(A) of ERISA.
2.39 "Plan Year" means the calendar year.
2.40 "Related Company" means a corporation, trade, or business if it and an
Employer are members of a controlled group of corporations as defined in Section
414(b) of the Code or under common control as defined in Section 414(c) of the
Code or members of an affiliated service group as defined in Section 414(m) of
the Code or members of a group the members of which are required to be
aggregated pursuant to regulations under Section 414(o) of the Code; provided
however, for purposes of determining Related Plans in the application of Section
5.1, the standard of control under Sections 414(b) and 414(c) of the Code (and
thus also Related Plans) shall be deemed to be "more than 50%" rather than "at
least 80%".
2.41 "Related Plan" means any other defined contribution plan or any
defined benefit plan (as defined in Section 415(k) of the Code) maintained by an
Employer or a Related Company, respectively called a "Related Defined
Contribution Plan" and "Related Defined Benefit Plan."
2.42 "Required Distribution Date" means April 1 of the calendar year
following the later of:
(a) the calendar year in which the Participant attains age 70-1/2, or
(b) if the Participant is not a five percent (5%) owner of the
Employer or a Related Company (as determined under Code Section 416(i)) at
any time during the Plan Year ending with or within the calendar year in
which he attains age 70-1/2, the calendar year in which he has a
Termination of Employment.
2.43 "Rollover Contribution" means a rollover contribution from a qualified
trust as described in Code Section 402(c) made in accordance with Section 4.6 of
the Plan.
2.44 "Special Fiduciary" means the investment manager, ancillary trustee or
the Trustee appointed in accordance with Section 8.10(g) to exercise the
responsibilities delegated to the Special Fiduciary under the terms of the Plan
and Trust.
2.45 "Special Section 401(k) Contributions" means the payments made from
time to time by an Employer to the Trustee in accordance with Section 4.5.
2.46 "Spin-Off Date" that date as defined in Section 1.2.
2.47 "Termination of Employment" occurs when a person leaves the employ of
an Employer or Related Company. An Employee who becomes Disabled shall have a
Termination
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of Employment on the first anniversary of the Employee's last day of
active service with an Employer or Related Company prior to incurring the
Disability; provided that if an Employee incurs a Disability and prior to the
first anniversary of his last day of active service with an Employer or Related
Company prior to incurring the Disability, resumes active service, and within 21
days of such resumption of active service again ceases to perform active duties
for an Employer or Related Company on account of such Disability, then the
resumption of active service shall be disregarded for purposes of determining
the date of the Employee's Termination of Employment. If an Employee incurs a
Disability and prior to the first anniversary of his last day of active service
with an Employer or Related Company prior to incurring the Disability, resumes
active service for more than 21 days following such resumption of active
service, and again ceases to perform active duties for an Employer or Related
Company on account of such Disability, then such Employee shall have a
Termination of Employment on the first anniversary of his last day of active
service with an Employer or Related Company during such period of temporary
resumption of service. Transfers of employment from an Employer or Related
Company to employment by another Employer or Related Company shall not
constitute a Termination of Employment.
2.48 "Transferred Participant" means each person who immediately prior to
the Spin-off Date was a participant in the Old GI Plan and either (a) an active
Employee of NextLevel Systems, Inc. or any subsidiary of NextLevel Systems, Inc.
or (b) a former Employee who at the time of his Termination of Employment was
employed by one of the following subsidiaries, divisions or business units of
Old GI which, together with the Company was spun-off from Old GI: (1) the
Broadband Networks businesses, (2) the Satellite Data Networks businesses, or
(3) the Next Level Communications businesses.
2.49 "Trust" means the Vanguard Fiduciary Trust Company Trust Agreement by
and between the Company and the Trustee and any amendments thereto or successor
or supplemental agreements, by which contributions shall be received, held,
invested and distributed to or for the benefit of Participants and
Beneficiaries.
2.50 "Trust Agreement" means the agreement between the Company and the
Trustee establishing the NextLevel Systems, Inc. Savings Trust and any
amendments thereto or successor or supplemental agreements, by which
contributions shall be received, held, invested and distributed to or for the
benefit of Participants and Beneficiaries.
2.51 "Trust Fund" means any property, real or personal, received by the
Trustee, plus all income and gains and less losses, expenses and distributions
chargeable thereto.
2.52 "Trustee" means the corporation, bank, trust company, individual or
individuals who accept appointment as trustee to execute the duties of the
Trustee set forth in the Trust Agreement.
2.53 "Trust-to-Trust Transfer" means the transfer of an amount to the Trust
for the benefit of a Participant pursuant to Section 4.7. A direct rollover
described in Section 401(a)(31) of the Code shall not be considered a
Trust-to-Trust Transfer.
2.54 "Valuation Date" means the last business day of each calendar month
and such additional dates as the Administrative Committee shall deem
appropriate. The Administrative
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Committee may designate different additional Valuation Dates for different
Investment Funds and for different purposes under the Plan.
2.55 "Vesting Service" means the sum of the Employee's periods of
Continuous Service.
ARTICLE III
Participation
3.1 Participation.
(a) Participation on Effective Date. Each Eligible Employee who was a
participant in the Old GI Plan on June 30, 1997 became a Participant in the
Plan immediately on July 1, 1997 in accordance with the terms hereof.
(b) Participation After the July 1, 1997. Each other Eligible Employee
shall become a Participant as of the first day of the payroll period ending
in a month if not less than thirty (30) days (or such shorter period as may
be permitted by the Administrative Committee) prior to the first day of
such month the Eligible Employee executes and delivers to the
Administrative Committee (1) a Compensation Reduction Election, (2) a
Beneficiary designation, and (3) an investment election on such form or
forms provided or permitted by the Administrative Committee. An Eligible
Employee shall not become a Participant in the Plan until he has properly
completed all of the above listed requirements.
Each Participant shall continue as such until the later of his Termination
of Employment or the distribution of his entire vested Accrued Benefit from the
Plan.
3.2 Certification of Participation and Compensation to the Administrative
Committee. Each Employer shall certify to the Administrative Committee the names
of all new Participants, such Participants' Compensation and such other
information as the Administrative Committee may request.
3.3 Participation Upon Re-employment. An Employee who has a Termination of
Employment, and thereafter resumes employment with an Employer as an Eligible
Employee shall become a Participant upon becoming an Eligible Employee and
executing and delivering the election forms in accordance with Section 3.1(b).
ARTICLE IV
Contributions
4.1 Participant Contributions. Participant Contributions shall consist of
the sum of the Participant's Matched Participant Contributions and his Unmatched
Participant Contributions (if any) specified in his Compensation Reduction
Election.
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(a) Participant Contributions. In accordance with such rules as the
Administrative Committee, in its discretion, shall from time to time
specify:
(1) Payroll Compensation Reductions. Each Active Participant may
elect a Participant Contribution from his Payroll Compensation in the
amount (if any) specified in a Payroll Compensation Reduction Election
filed with the Administrative Committee. An Active Participant's
Payroll Compensation Reduction Election shall specify
(i) a Matched Participant Contribution in an amount up to a
maximum of six percent (6%) of his Payroll Compensation (in
increments of one percent (1%)), and
(ii) if the Participant elected a six percent (6%) Matched
Participant Contribution, an Unmatched Participant Contribution
in an amount up to a maximum of four percent (4%) of his Payroll
Compensation (in increments of one percent (1%)).
An Active Participant's Payroll Compensation Reduction Election shall
continue in effect, notwithstanding any change in Payroll
Compensation, until such Active Participant shall change or revoke
such Payroll Compensation Reduction Election.
(2) Bonus Compensation Reductions. Each Active Participant who is
not a Highly Compensated Employee for the Plan Year may elect an
Unmatched Participant Contribution from his Bonus Compensation in the
amount (if any) specified in a Bonus Compensation Reduction Election
filed with the Administrative Committee. An Active Participant's Bonus
Compensation Reduction Election shall specify an amount of 0%, 50% or
100% of such Active Participant's Bonus Compensation. An Active
Participant's Bonus Compensation Reduction Election shall be effective
only with respect to the first Bonus Compensation that becomes payable
following the date such election is filed.
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(3) Initial and Changed Compensation Reduction Elections. An
Active Participant may make or change a Compensation Reduction
Election (with respect to Payroll Compensation or Bonus Compensation
or both) by filing with the Administrative Committee written notice of
such election or change on such form and in such manner as the
Administrative Committee may prescribe, provided that a Compensation
Reduction Election or a change thereof shall apply solely to
Compensation not paid or payable as of the date of such election or
change. An election or change in an Active Participant's Payroll
Compensation Reduction Election shall be made not less than thirty
(30) days (or such shorter period as may be permitted by the
Administrative Committee) prior to the beginning of a calendar quarter
(or such additional date or dates as may be permitted by the
Administrative Committee) and shall be effective as of the first day
of the payroll period ending in such calendar quarter (or as of such
additional date or dates as may be permitted by the Administrative
Committee to make or change a Payroll Compensation Reduction
Election). Notwithstanding the foregoing, the payroll compensation
reduction election in effect under the Old GI Plan immediately prior
to July 1, 1997 will be treated as having been made under this Plan
and will remain in effect until changed or revoked pursuant to this
Section 4.1(a)(3) or (4). An election or change in an Active
Participant's Bonus Compensation Reduction Election shall be made not
less than thirty (30) days (or such shorter period as may be permitted
by the Administrative Committee) prior to the date on which the Bonus
Compensation to which it relates is payable.
(4) Revocations of Compensation Reduction Elections. An Active
Participant may revoke a Payroll Compensation Reduction Election with
respect to Compensation not paid or payable as of the date of such
revocation. Revocation of a Payroll Compensation Reduction Election
shall be effective as of the first day of the payroll period ending in
any calendar month (or as of such additional date or dates as may be
permitted by the Administrative Committee) if the Administrative
Committee receives written notice of the revocation at least thirty
(30) days (or such shorter period as may be permitted by the
Administrative Committee) before the first day of such calendar month
(or before such other date or dates as may be permitted by the
Administrative Committee to revoke a Payroll Compensation Reduction
Election). An Active Participant who revokes his Payroll Compensation
Reduction Election shall not be eligible thereafter to make another
Payroll Compensation Reduction Election effective prior to the first
day of the payroll period ending in the calendar month that begins at
least one (1) month following the effective date of such revocation.
Bonus Compensation Reduction Elections shall be irrevocable.
(5) Contribution and Limitations on Contribution of Elected
Amounts. Each Employer shall reduce each Participant's Compensation
and contribute to the Trust, as a Participant Contribution on behalf
of each Active Participant employed by the Employer, the amount by
which such Participant's Payroll or Bonus Compensation, as applicable,
has been reduced under such Participant's Compensation Reduction
Elections; provided, however, that notwithstanding the foregoing, (i)
Participant Contributions of any Active Participant for any calendar
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year shall not exceed $9,500 (in 1997, as adjusted for cost-of-living
increases by the Secretary of the Treasury or his delegate pursuant to
the provisions of Code Section 402(g)(5) and increased in accordance
with applicable regulations and rulings under Sections 402(g)(4) and
402(g)(8) of the Code with respect to any Participant who participates
in a plan described in Section 403(b) of the Code or who is a
qualified employee in a plan of a qualified organization (as defined
in Code Section 402(g)(8)) ("Dollar Limit"); (ii) a Participant's
Compensation Reduction election shall become ineffective upon his
ceasing to be an Eligible Employee, and (iii) an Active Participant's
Bonus Compensation Reduction Election shall be immediately revoked if
he is determined to be a Highly Compensated Employee. The
Administrative Committee may, in its discretion, impose such
additional rules, regulations and limitations on the amount of
Participant Contributions that may be elected, including limitations
on the amount of Participant Contributions that an Active Participant
may elect for each payroll period to a pro-rata portion of the Dollar
Limit, and limitations on the amount of Participant Contributions that
may be elected by Highly Compensated Employees to ensure that the
limitations of Sections 4.1(c)(2), 4.2(c) and 4.3 are not exceeded.
(b) Deadline for Participant Contributions. Each Employer shall
contribute the Participant Contributions for each payroll period during a
Plan Year to the Trustee as soon as reasonably possible after the
Participant's Payroll Compensation or Bonus Compensation, as applicable,
has been reduced, but not later than the latest date as may be permitted
under applicable law, Treasury Regulations and rulings of the Internal
Revenue Service.
(c) Restrictions on Participant Contributions. Participant
Contributions shall not exceed the maximum dollar amount permitted under
Section 402(g) of the Code or the amounts permitted under the
non-discrimination rules of Section 401(k) of the Code as set forth below:
(1) Dollar Limitations. The sum of (i) the Participant's
Participant Contributions, (ii) any elective contributions excluded
from the Participant's gross income made under a Related Plan and
(iii) if the Participant shall notify the Administrative Committee in
writing of any other plan under which elective contributions are
excluded from the Participant's gross income, any other elective
contributions excluded from the Participant's gross income made under
any other plan during a calendar year, shall not exceed the Dollar
Limit (as defined in Section 4.1(a)(5)) for such calendar year. If the
sum of such amounts exceeds the Dollar Limit for a calendar year, the
Administrative Committee shall, not later than the April 15 following
the close of such calendar year, distribute to the Participant all or
such portion of the Participant's Participant Contributions (by first
distributing Unmatched Participant Contributions then Matched
Participant Contributions) for such calendar year (i) as requested in
writing by the Participant on or before the March 1 following the
close of such calendar year, or (ii) as determined by the
Administrative Committee, as is necessary to eliminate the excess, and
any net income and minus any loss allocable to such amount determined
in accordance with Section 4.8. Any Matching Employer
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Contributions (including any net income and minus any loss allocable
thereto determined in accordance with Section 4.8) made with respect
to such distributed Matched Participant Contributions shall be
forfeited and allocated in accordance with Section 4.10(e).
(2) Discrimination Limitations. First the Unmatched Participant
Contributions and second the Matched Participant Contributions
(together with the Matching Employer Contributions made with respect
to such Matched Participant Contributions) made on behalf of the
Highly Compensated Employees for a Plan Year will be reduced to the
extent the Administrative Committee determines necessary to cause the
Average ADP (as defined in Section 4.1(d) below) of Active
Participants who are Highly Compensated Employees not to exceed the
greater of the following limits (the "Required ADP Test"):
(A) General Limit. The excess of the Average ADP of Highly
Compensated Employees for such Plan Year over the Average ADP of
all other Active Participants for the preceding Plan Year is not
more than two percentage points, and the Average ADP of the
Highly Compensated Employees for such Plan Year is not more than
the Average ADP of all other Active Participants for the
preceding Plan Year multiplied by two; or
(B) Alternative Limit. The Average ADP of the Highly
Compensated Employees for such Plan Year is not more than the
Average ADP of all other Active Participants for the preceding
Plan Year multiplied by 1.25.
If the Administrative Committee so elects, it may apply the
limits set forth in paragraphs (A) and (B) of this Section 4.1(c)(2)
by using the Average ADP of all other Active Participants (other than
Highly Compensated Employees) for the Plan Year for which the
determination is made rather than for the preceding Plan Year;
provided that such election may not be changed except as provided by
the Secretary of the Treasury.
To the extent the Administrative Committee determines necessary
to pass the Required ADP Test, Participant Contributions (and Matching
Employer Contributions allocated with respect to Participant
Contributions) shall be reduced for Highly Compensated Employees in
the following steps:
Step 1: The Administrative Committee shall first determine the
dollar amount of the reductions which would have to be made to the
Participant Contributions of each Highly Compensated Employee who is
an Active Participant for the Plan Year in order for the Average ADP
of the Highly Compensated Employees for the Plan Year to satisfy the
Required ADP Test. Such amount shall be calculated by first
determining the dollar amount by which the Participant Contributions
of Highly Compensated Employees who have the highest Actual Deferral
Percentage (as defined in Section 4.1(d)) would have to be reduced
until the first to occur of: (i) such Employees' Actual Deferral
Percentage would equal the Actual Deferral Percentage of the Highly
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Compensated Employee or group of Highly Compensated Employees with the
next highest Actual Deferral Percentage; or (ii) the Average ADP of
all of the Highly Compensated Employees, as recalculated after the
reductions made under this Step 1, satisfies the Required ADP Test.
Then, unless the recalculated Average ADP of the Highly Compensated
Employees satisfies the Required ADP Test, the reduction process shall
be repeated by determining the amount of reductions which would have
to be made to the Participant Contributions of the Highly Compensated
Employees who, after all prior reductions, would have the highest
Actual Deferral Percentage until the first to occur of: (iii) the
Actual Deferral Percentage, after all prior reductions under this Step
1, of each person in such group would equal the Actual Deferral
Percentage of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest Actual Deferral
Percentage; or (iv) the Average ADP of all of the Highly Compensated
Employees, after the prior reductions, satisfies the Required ADP
Test. This process is repeated until the Average ADP of all of the
Highly Compensated Employees, after all reductions, satisfies the
Required ADP Test.
Step 2. Determine the total dollar amount of reductions to the
Participant Contributions calculated under Step 1 ("Total Excess
Deferrals").
Step 3. Reduce the Participant Contributions of the Highly
Compensated Employees with the highest dollar amount of Participant
Contributions by the lesser of the dollar amount which either (i)
causes each such Highly Compensated Employee's Participant
Contributions to equal the dollar amount of the Participant
Contributions of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest dollar amount of
Participant Contributions; or (ii) reduces the Highly Compensated
Employees' Participant Contributions by the Total Excess Deferrals.
Then, unless the total amount of reductions made to Highly Compensated
Employees' Participant Contributions under this Step 3 equals the
amount of the Total Excess Deferrals, the reduction process shall be
repeated by reducing the Participant Contributions of the group of
Highly Compensated Employees with the highest dollar amount of
Participant Contributions, after the prior reductions made in this
Step 3, by the lesser of the amount which either: (iii) causes such
Highly Compensated Employees' Participant Contributions after prior
reductions made in this Step 3 to equal the dollar amount of the
Participant Contributions of the Highly Compensated Employees with the
next highest dollar amount of Participant Contributions; or (iv)
causes total reductions to equal the Total Excess Deferrals. This
process is repeated with each successive group of Highly Compensated
Employees with the highest dollar amount, after the prior reductions,
of the Participant Contributions until the total reductions made under
this Step 3 equal the Total Excess Deferrals.
The Administrative Committee shall, not later than the last day
of the Plan Year next following the Plan Year in which such amounts
are contributed, distribute the amount of Participant Contributions
(including any income earned and minus any loss allocable to such
amounts determined in accordance with Section 4.8) to the Highly
Compensated Employees on whose behalf such contributions were made.
Any Matching Employer Contributions reduced
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(including any income earned and minus any loss allocable thereto
determined in accordance with Section 4.8) shall be forfeited and
allocated in accordance with Section 4.10(e).
Notwithstanding the foregoing, the amount of Participant
Contributions (and Matching Employer Contributions allocated with
respect to such Participant Contributions) that are required to be
reduced to comply with the provisions of this Section 4.1(c)(2) shall
be reduced, but not below zero, by the amount of Participant
Contributions (and Matching Employer Contributions allocated with
respect to such Participant Contributions) previously distributed (or
forfeited) in accordance with Section 4.1(c)(1).
(d) Average ADP; Actual Deferral Percentage. The "Average ADP" for a
specified group of Active Participants for a Plan Year shall be the average
of the Actual Deferral Percentages (as defined below) of the members of
such group. The "Actual Deferral Percentage" of an Active Participant is
the ratio of the amount of Participant Contributions actually paid over to
the Plan on behalf of such Active Participant for such Plan Year divided by
the Active Participant's Compensation for the Plan Year, or, at the
discretion of the Administrative Committee to the extent not prohibited by
regulations prescribed by the Secretary of the Treasury or his delegate,
the sum of (i) Participant Contributions, and (ii) any portion or all of
the Special Section 401(k) Contributions actually paid over to the Plan on
behalf of such Active Participant for the Plan Year divided by the Active
Participant's Compensation for the Plan Year.
(e) Aggregation Rules. The Actual Deferral Percentage for any Active
Participant who is a Highly Compensated Employee for the Plan Year and who
is eligible to have Participant Contributions allocated under this Plan and
is also eligible to have elective deferrals (within the meaning of Section
401(m)(4)(B) of the Code), qualified matching contributions (within the
meaning of Treasury Regulation Section 1.401(k)-1(g)(13)(i)) or qualified
nonelective contributions (within the meaning of Treasury Regulation
Section 1.401(k)-1(g)(13)(ii)), allocated pursuant to a cash or deferred
arrangement under one or more Related Plans shall be determined as if such
Participant Contributions, elective deferrals, qualified matching
contributions and qualified nonelective contributions were made under a
single arrangement. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different plan years, all cash
or deferred arrangements ending with or within the same calendar year shall
be treated as a single arrangement.
In the event this Plan satisfies the requirements of Section 401(k),
401(a)(4) or 410(b) of the Code only if aggregated with one or more Related
Plans, or if one or more Related Plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then Sections
4.1(c)(2) and (d) shall be applied by determining the Actual Deferral
Percentages of Participants as if this Plan and all such Related Plans were
a single plan; provided, however, that the Plan and one or more Related
Plans may be aggregated in order to satisfy the non-discrimination rules of
Section 401(k) of the Code only if such plans have the same plan year.
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(f) Allocation of Participant Contributions. As of each Valuation
Date, Matched Participant Contributions made to the Plan since the
immediately preceding Valuation Date shall be allocated to the Matched
Participant Contribution Account of each Active Participant on whose behalf
such Matched Participant Contributions were made and Unmatched Participant
Contributions made to the Plan since the immediately preceding Valuation
Date shall be allocated to the Unmatched Participant Contribution Account
of each Active Participant on whose behalf such Unmatched Participant
Contributions were made.
4.2 Matching Employer Contributions.
(a) Matching Employer Contributions. Subject to Sections 10.1, 10.2
and 10.4, for each Plan Year each Employer shall contribute on behalf of
each Active Participant employed by the Employer an amount equal to fifty
percent (50%) of the Matched Participant Contributions made on behalf of
the Active Participant pursuant to Section 4.1 during such Plan Year.
(b) Deadline for Matching Employer Contributions. Matching Employer
Contributions for each Plan Year shall be delivered to the Trustee not
later than the due date for the filing of the federal income tax return
(including any extensions) of the Employer for the tax year during which
the last day of such Plan Year occurs.
(c) Restrictions on Matching Employer Contributions. Notwithstanding
the provisions of Section 4.2(a), Matching Employer Contributions for a
Plan Year made on behalf of Highly Compensated Employees shall be reduced
to the extent the Administrative Committee determines necessary to cause
the Average ACP (as defined in Section 4.2(d) below) of Active Participants
who are Highly Compensated Employees not to exceed the greater of the
following limits (the "Required ACP Test"):
(1) General Limit. The excess of the Average ACP for Highly
Compensated Employees for such Plan Year over the Average ACP of all
other Active Participants for the preceding Plan Year is not more than
two percentage points, and the Average ACP of the Highly Compensated
Employees for such Plan Year is not more than the Average ACP of all
other Active Participants for the preceding Plan Year multiplied by
two; or
(2) Alternative Limit. The Average ACP of the Highly Compensated
Employees for such Plan Year is not more than the Average ACP of all
other Active Participants for the preceding Plan Year multiplied by
1.25.
If the Administrative Committee so elects, it may apply the limits set
forth in paragraphs (1) and (2) of this Section 4.2(c) by using the Average
ACP (as defined in Section 4.2(d)) of all other Active Participants (other
than Highly Compensated Employees) for the Plan Year for which the
determination is made rather than for the preceding Plan Year; provided
that such election may not be changed except as provided by the Secretary
of the Treasury.
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To the extent that the Administrative Committee, after giving effect
to any reduction in the amount of Participant Contributions and Matching
Employer Contributions pursuant to Section 4.1(c), determines it necessary
to pass the Required ACP Test, Matching Employer Contributions shall be
reduced for Highly Compensated Employees in the following steps:
Step 1: The Committee shall first determine the dollar amount of the
reductions which would have to be made to the Matching Employer
Contributions of Highly Compensated Employees who are Active Participants
for the Plan Year in order that the Average ACP of the Highly Compensated
Employees to satisfy the Required ACP Test. Such amount shall be calculated
by first determining the dollar amount by which the Matching Employer
Contributions of the Highly Compensated Employees who have the highest
Actual Contribution Percentage would have to be reduced until the first to
occur of: (i) such Employees' Actual Contribution Percentage would equal
the Actual Contribution Percentage of the Highly Compensated Employee or
group of Highly Compensated Employees with the next highest Actual
Contribution Percentage; or (ii) the Average ACP of all of the Highly
Compensated Employees, as recalculated after the reductions made under this
Step 1, satisfies the Required ACP Test. Then, unless the Average ACP of
the Highly Compensated Employees, as recalculated after the reductions made
under this Step 1, satisfies Required ACP Test, the reduction process shall
be repeated by determining the dollar amount of reductions which would have
to be made to the Matching Employer Contributions of the group of Highly
Compensated Employees who after all prior reductions made in this Step 1
would have the highest Actual Contribution Percentage until the first to
occur of: (iii) the Actual Contribution Percentage, after the prior
reductions made in this Step 1, of each person in such group equals the
Actual Contribution Percentage of the Highly Compensated Employee or group
of Highly Compensated Employees with the next highest Actual Contribution
Percentage; or (iv) the Average ACP of all of the Highly Compensated
Employees, after the prior reductions, satisfies the Required ACP Test.
This process is repeated until the Average ACP of all of the Highly
Compensated Employees, after all reductions, satisfies the Required ACP
Test.
Step 2. Next, the Committee shall determine the total dollar amount of
reductions to the Matching Employer Contributions calculated under Step 1
("Total Excess Contributions").
Step 3. Finally, the Administrative Committee shall reduce the
Matching Employer Contributions of the Highly Compensated Employee or group
of Highly Compensated Employees with the highest dollar amount of Matching
Employer Contributions by the lesser of the amount which either: (i) causes
each such Highly Compensated Employee's Matching Employer Contributions to
equal the dollar amount of the Matching Employer Contributions of the
Highly Compensated or group of Highly Compensated Employees with the next
highest dollar amount of Matching Employer Contributions; or (ii) reduces
the Highly Compensated Employees' Matching Employer Contributions by the
Total Excess Contributions. Then, unless the total amount of reductions
made to Highly Compensated Employees' Matching Employer Contributions under
this Step 3 equals the amount of Total Excess Contributions, the reduction
process shall be repeated by reducing the Matching Employer Contributions
of the group of
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Highly Compensated Employees with the highest dollar amount of Matching
Employer Contributions, after the prior reductions made in this Step 3, by
the lesser of the amount which either: (iii) causes each such Highly
Compensated Employee's Matching Employer Contributions after prior
reductions made in this Step 3 to equal the dollar amount of the Matching
Employer Contributions of other Highly Compensated Employees with the next
highest dollar amount of Matching Employer Contributions; or (iv) causes
total reductions to equal the Total Excess Contributions. This process is
repeated with each successive group of Highly Compensated Employees with
the highest dollar amount, after the prior reductions, of the Matching
Employer Contributions made under this Step 3 until the total reductions
equal the Total Excess Contributions.
The Administrative Committee shall, not later than the last day of the
Plan Year next following the Plan Year in which such amounts are
contributed, distribute, to the extent vested, the amount of Matching
Employer Contributions reduced (including any income earned and minus any
loss allocable to such amounts determined in accordance with Section 4.8),
to the Highly Compensated Employees on whose behalf such contributions were
made. Any non-vested Matching Employer Contributions reduced (including any
income earned and minus any loss allocable thereto determined in accordance
with Section 4.8) shall be forfeited and allocated in accordance with
Section 4.10(e).
(d) Average ACP; Actual Contribution Percentage. The "Average ACP" for
a specified group of Active Participants for a Plan Year shall be the
average of the Actual Contribution Percentages (as defined below) of the
persons in such group. An Active Participant's "Actual Contribution
Percentage" is the ratio of the amount of Matching Employer Contributions
actually paid over to the Plan on behalf of such Active Participant for
such Plan Year divided by the Active Participant's Compensation during such
Plan Year, or at the discretion of the Administrative Committee to the
extent not prohibited by regulations prescribed by the Secretary of
Treasury or his delegate, the sum of (i) Matching Employer Contributions,
and (ii) any portion or all of the Participant Contributions and/or Special
Section 401(k) Contributions actually paid over to the Plan on behalf of
such Active Participant for the Plan Year divided by the Active
Participant's Compensation during the Plan Year.
(e) Aggregation Rules. The Actual Contribution Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and who
is eligible to have Matching Employer Contributions allocated under this
Plan and is also eligible to make employee nondeductible contributions or
to have matching contributions (within the meaning of Section 401(m)(4)(A)
of the Code) allocated under one or more Related Plans shall be determined
as if the total of such Matching Employer Contributions, employee
nondeductible contributions, and matching contributions was made under this
Plan and under each such Related Plan.
In the event that this Plan satisfies the requirements of Section
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
Related Plans, or if one or more Related Plans satisfy the requirements of
such sections of the Code only if aggregated with this Plan, then Sections
4.2(c) and (d) shall be applied by determining the Average ACP of
Participants as if this Plan and all such Related Plans were a single
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plan; provided, however, that the Plan and one or more Related Plans may be
aggregated in order to satisfy the non-discrimination requirements of
Section 401(m) of the Code only if such plans have the same plan year.
(f) Allocation of Matching Employer Contributions. As of each
Valuation Date, Matching Employer Contributions made to the Plan since the
immediately preceding Valuation Date shall be allocated to the Employer
Contribution Account of each Active Participant on whose behalf they were
made.
4.3 Multiple Use of Sections 4.1(c)(2) and 4.2(c). Notwithstanding Sections
4.1(c)(2) and 4.2(c), the sum of the Average ADP and the Average ACP for a Plan
Year, of the Highly Compensated Employees shall not exceed the greater of (i)
the sum of (a) plus (b) or (ii) the sum of (c) plus (d) (the "Multiple Use
Test") where:
(a) is one hundred and twenty-five percent (125%) of the greater of
(1) the Average ADP for the preceding Plan Year of all Active Participants
other than Highly Compensated Employees, or (2) the Average ACP for the
preceding Plan Year of all Active Participants other than Highly
Compensated Employees;
(b) is two percent (2%) plus the lesser of the percentage determined
under Section 4.3(a)(1) or the percentage determined under Section
4.3(a)(2), but in no event shall this percentage exceed two hundred percent
(200%) of the lesser of the percentage determined under Section 4.3(a)(1)
or the percentage determined under Section 4.3(a)(2);
(c) is one hundred and twenty-five percent (125%) of the lesser of (1)
the Average ADP for the preceding Plan Year of all Active Participants
other than Highly Compensated Employees, or (2) the Average ACP for the
preceding Plan Year of all Active Participants other than Highly
Compensated Employees; and
(d) is two percent (2%) plus the greater of the percentage determined
under Section 4.3(a)(1) or the percentage determined under Section
4.3(a)(2), but in no event shall this percentage exceed two hundred percent
(200%) of the greater of the percentage determined under Section 4.3(a)(1)
or the percentage determined under Section 4.3(a)(2).
If the Administrative Committee so elects, it may apply the limits set
forth in this Section 4.3 by using the Average ADP and the Average ACP of Active
Participants (other than Highly Compensated Employees) for the Plan Year for
which the determination is made rather than for the preceding Plan Year;
provided that such election may not be changed except as provided by the
Secretary of the Treasury.
To the extent the Administrative Committee determines it necessary in order
to satisfy the limitations of this Section 4.3, the Administrative Committee may
reduce or prospectively disallow Participant Contributions or Matching Employer
Contributions for Highly Compensated Employees, including Participant
Contributions or Matching Employer Contributions already made for the Plan Year,
in accordance with the following steps:
Step 1. The Administrative Committee shall determine the dollar amount
of the reductions which have to be made under this Section 4.3 so that the
Multiple Use Test is
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met. Such amount shall be calculated by first determining the dollar amount
by which the Participant Contributions (and the Matching Employer
Contributions allocated with respect to such Participant Contributions),
after any reductions made under Step 1 of Sections 4.1(c)(2) and 4.2(c), of
Highly Compensated Employees who have the highest Aggregate Contribution
Percentage (as defined in Section 4.3(e) below) would have to be reduced
until his Aggregate Contribution Percentage equals either: (i) the
Aggregate Contribution Percentage of the Highly Compensated Employee or
group of Highly Compensated Employees with the next highest Aggregate
Contribution Percentage; or (ii) the Average Aggregate Contribution
Percentage (as defined in Section 4.3(e) below) of the Highly Compensated
Employees, as calculated after such reduction, satisfies the Multiple Use
Test. Then, unless the Average Aggregate Contribution Percentage of the
Highly Compensated Employees, as recalculated after the reductions made
under Step 1 of Sections 4.1(c)(2), 4.2(c) and 4.3, satisfies the Multiple
Use Test, the reduction process shall be repeated by determining the amount
of reductions which would have to be made to the Participant Contributions
(and the Matching Employer Contributions allocated with respect to such
Participant Contributions) of Highly Compensated Employees who, after all
prior reductions under Step 1, would have the highest Aggregate
Contribution Percentage until the first to occur of: (iii) the Aggregate
Contribution Percentage, after the prior reductions, of each person in such
group equals the Aggregate Contribution Percentage of the Highly
Compensated Employee or group of Highly Compensated Employees with the next
highest Aggregate Contribution Percentage; or (iv) the Average Aggregate
Contribution Percentage of all Highly Compensated Employees, after all
prior reductions made under Sections 4.1(c)(1), 4.2(c) and 4.3, satisfies
the Multiple Use Test. This process is repeated until the Average Aggregate
Contribution Percentage of all of the Highly Compensated Employees, after
all reductions, satisfies the Multiple Use Test.
Step 2. Next the Administrative Committee shall determine the total
dollar amount of reductions to the Participant Contributions and Matching
Employer Contributions as calculated under Step 1 ("Total Reduction
Amount").
Step 3. Once the Total Reduction Amount has been determined, the
Participant Contributions and Matching Employer Contributions ("Aggregate
Contributions") of the Highly Compensated Employee with the highest dollar
amount of Aggregate Contributions, after any reductions made in Step 3 of
Sections 4.1(c)(2) or 4.2(c), shall be reduced by the lesser of the amount
which either: (i) causes such Highly Compensated Employee's Aggregate
Contributions to equal the Aggregate Contributions of the Highly
Compensated Employee or group of Highly Compensated Employees with the next
highest dollar amount of Aggregate Contributions; or (ii) reduces the
Highly Compensated Employee's Aggregate Contributions by the Total
Reduction Amount. Then, unless the total amount of reductions made equals
the Total Reduction Amount, the reduction process shall be repeated by
reducing the Aggregate Contributions of the group of Highly Compensated
Employees with the highest dollar amount of Aggregate Contributions by the
lesser of the amount which either: (iii) causes such Highly Compensated
Employees' Aggregate Contributions to equal the dollar amount of Aggregate
Contributions of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest dollar amount of Aggregate
Contributions; or (iv) causes total reductions to equal the Total Reduction
Amount. This process is repeated with each successive group of Highly
Compensated Employees with
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the highest dollar amount of Aggregate Contributions, after the prior
reductions, until the total amount of reductions made under this Step 3 is
equal to the Total Reduction Amount.
(e) Average Aggregate Contribution Percentage; Aggregate Contribution
Percentage. The "Average Aggregate Contribution Percentage" for a specified
group of Active Participants for a Plan Year shall be the sum of the
Average ADP and the Average ACP of the persons in such group. An Active
Participant's "Aggregate Contribution Percentage" for a Plan Year is sum of
the such Active Participant's Actual Deferral Percentage and Actual
Contribution Percentage for the Plan Year.
4.4 Order of Application of Limitations of Sections 4.1(c)(1), 4.1(c)(2),
4.2(c), 4.3 and 5.1. Section 4.1(c)(1) shall be first applied to contributions
under the Plan; second, Section 4.1(c)(2) shall be applied to contributions
under the Plan; third, Section 4.2(c) shall be applied to contributions under
the Plan; and last, Section 4.3 shall be applied to contributions under the
Plan. Section 5.1 shall be applied to contributions under the Plan without
regard to Sections 4.1(c)(1), 4.1(c)(2), 4.2(c) or 4.3.
4.5 Special Section 401(k) Contributions.
(a) Special Section 401(k) Contributions. For each Plan Year, the
Company may, on or before the due date (including extensions) for filing
the Company's federal income tax return for the tax year during which the
last day of such Plan Year occurs, elect to have the Company and the other
Employers make a Special Section 401(k) Contribution to the Trust in such
amount (if any) as the Board of Directors may determine. In any Plan Year
in which the Company elects to have such a Special Section 401(k)
Contribution made, each Employer shall contribute a fractional portion of
the Special Section 401(k) Contribution in an amount equal to the total
Special Section 401(k) Contribution, multiplied by a fraction, the
numerator of which is the aggregate Compensation for such Plan Year paid by
such Employer to Active Participants who are employed by such Employer and
who are not Highly Compensated Employees, and the denominator of which is
the aggregate Compensation paid by all Employers to all Active Participants
who are not Highly Compensated Employees.
(b) Deadline for Special Section 401(k) Contributions. Special Section
401(k) Contributions for each Plan Year shall be delivered to the Trustee
on or before the due date for the filing of the federal income tax return
(including extensions) of the Employer for the tax year during which the
last day of such Plan Year occurs.
(c) Allocation of Special Section 401(k) Contributions. As of the last
day of each Plan Year, Special Section 401(k) Contributions made to the
Plan for the Plan Year shall be allocated to the Special Section 401(k)
Contribution Subaccount of the Matched Participant Contribution Account of
each Active Participant who is not a Highly Compensated Employee in the
ratio that the amount of Matching Employer Contributions made to the Plan
for such Plan Year on behalf of such Active Participant bears to the total
amount of Matching Employer Contributions made to the Plan for such Plan
Year on behalf of all Active Participants who are not Highly Compensated
Employees.
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4.6 Rollover Contributions into the Plan. The Administrative Committee
shall, at the request of an Eligible Employee, direct the Trustee to accept on
behalf of the Eligible Employee a Rollover Contribution to be held in the
Rollover Contribution Account for the Eligible Employee. For purposes of this
Section 4.6, a Rollover Contribution shall include any direct transfer of an
eligible rollover distribution described in Section 401(a)(31) of the Code from
a qualified plan or an employee annuity. Prior to the acceptance of a Rollover
Contribution, the Administrative Committee may require the submission of
evidence so that it may be reasonably satisfied that such Rollover Contribution
qualifies as a Rollover Contribution. If the Administrative Committee shall
determine subsequent to any Rollover Contribution that such contribution did not
in fact constitute a qualified Rollover Contribution, the amount of the Rollover
Contribution, increased by income and gains and reduced (but not below zero) by
losses and expenses, shall be returned to the Eligible Employee.
4.7 Trust-to-Trust Transfers to the Plan.
(a) Except as set forth in Schedule A or Section 4.7(c), no
Trust-to-Trust Transfers shall be accepted by the Plan.
(b) A Participant's accounts in a plan (which is qualified under
Section 401(a) of the Code) other than the Plan which were transferred to
the Trust in a Trust-to-Trust Transfer prior to January 1, 1996, if any,
shall be credited to the Participant's Pre-1996 Trust-to-Trust Account,
which shall be subject to the applicable provisions contained in Schedule
A.
(c) Notwithstanding Section 4.7(a) above, in the event that a
participant in the CommScope, Inc. Employees Profit Sharing and Savings
Plan (the "CommScope Plan") ceases to be eligible to receive or make
contributions under the CommScope Plan prior to the Spin-off Date, but is
not eligible to receive a lump sum distribution of accrued benefit from the
CommScope Plan because he has not incurred a "separation from service"
within the meaning of section 401(k) of the Code, and becomes a Participant
in the Plan prior to the Spin-off Date, such individual's accrued benefit
in the CommScope Plan shall be transferred to the Trust in a Trust-to-Trust
Transfer as soon as practicable after the date on which the individual
becomes a Participant. The amount of such Trust-to-Trust Transfer shall be
credited to the individual's Post-1995 Trust-to-Trust Account.
All Pre-1996 Trust-to-Trust Accounts shall be fully vested and
non-forfeitable. All Post-1995 Trust-to-Trust Accounts shall be subject to the
vesting provisions of the CommScope Plan.
All optional forms of benefit available under the transferor plan with
respect to Trust-to-Trust Transfers to the Plan shall be preserved. In addition,
all Post-1995 Trust-to-Trust Accounts which are attributable to elective
contributions or to qualified non-elective contributions or qualified matching
contributions (within the meaning of Treasury Regulation ss. 1.401(k)-1(g)(13))
shall be subject to the distribution restrictions described in Treasury
Regulation ss. 1.401(k)-1(d).
4.8 Allocation of Income or Loss. Any income or loss attributable to
contributions distributed or forfeited pursuant to Sections 4.1(c)(1),
4.1(c)(2), and 4.2(c) shall be distributed or
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forfeited, as applicable. Such distributable or forfeitable income or loss shall
be determined as follows:
(a) Income or Loss for Plan Year. The Administrative Committee shall
compute income or loss attributable to distributed or forfeited
contributions for a completed Plan Year using any reasonable method
permitted under Treasury Regulations Sections 1.401(k)-1(f)(4)(ii),
1.401(m)-1(e)(3)(ii) and 1.402(g)-1(e)(5), as applicable; provided that the
method does not violate Section 401(a)(4) of the Code, is used consistently
for all Participants and for all corrective distributions under the Plan
for the Plan Year and is used by the Plan for allocating income to
Participants' Accounts.
(b) Income or Loss for Period Between End of Plan Year and
Distribution. The Administrative Committee shall compute income or loss
attributable to distributed or forfeited contributions for the period
between the end of the Plan Year and the date of distribution (the "Gap
Period") using any reasonable method permitted under Treasury Regulations
Sections 1.401(k)-1(f)(4)(ii), 1.401(m)-1(e)(3)(ii) and 1.402(g)-1(e)(5),
as applicable; provided that the method does not violate Section 401(a)(4)
of the Code, is used consistently for all Participants and for all
corrective distributions under the Plan for the Gap Period and is used by
the Plan for allocating income to Participants' Accounts.
4.9 Determination and Amount of Employer Contributions. The Administrative
Committee shall determine and shall certify to the Trustee the amount of any
contribution to be made by each Employer hereunder. In making such
determination, the Administrative Committee shall be entitled to rely upon the
estimates of Compensation made by the accounting officers of each respective
Employer with respect to the Employees of that Employer. Such determination
shall be binding on all Participants, the Trustee, and the Employer. Under no
circumstances shall any Participant or Beneficiary have any right to examine the
books and records of any Employer.
4.10 Vesting.
(a) Termination Upon Normal Retirement Date, Death or Disability. A
Participant's Accrued Benefit shall be fully vested and non-forfeitable if
on or before the date he has a Termination of Employment the Participant
attains his Normal Retirement Date, dies or becomes Disabled.
(b) Other Termination. Except as provided in Section 4.10(a), the
vested portion of a Participant's Accrued Benefit shall consist of the sum
of:
(1) the balance of the Participant's Matched Participant Account;
(2) the balance of the Participant's Unmatched Participant
Contribution Account;
(3) the balance of the Participant's Rollover Contribution
Account;
(4) the balance of the Participant's Trust-to-Trust Account; and
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(5) a percentage ("Vested Percentage") of the balance of the
Participant's Employer Contribution Account determined in accordance
with the Vesting Schedule specified below:
Years of Vested
Vesting Service Percentage
Less than 1 year 50%
1 year but less than 2 years 75%
2 years or more 100%
(c) Forfeitures. If a Participant has a Termination of Employment,
then that portion of the Participant's Accrued Benefit which is not vested
as of his Termination of Employment shall become a Forfeiture as of the
earlier of the date on which the balance of the Participant's Accounts is
distributed or the last day of the Plan Year in which the Participant
incurs a One Year Break in Service.
(d) Return to Employment. If a Participant or a former Participant
resumes service with an Employer as an Employee before incurring a Period
of Non-employment lasting six or more years, the amount forfeited shall be
reinstated to the Participant's or former Participant's Employer
Contribution Account out of Forfeitures for the Plan Year in which
reemployment occurs and to the extent that Forfeitures for such Plan Year
are not sufficient, charged ratably against income and gain of the Trust
Fund; provided that in the case of a former Participant such reinstatement
shall occur only if the former Participant becomes an Eligible Employee and
repays the Trust the full amount of the prior distribution before the
earlier of (i) five years after the former Participant resumes employment
with an Employer as an Employee or (ii) the completion of a Period of
Non-employment lasting at least six years after the date of the prior
distribution.
If a former Participant resumes employment with an Employer after
incurring a Period of Non-employment lasting at least six years, the
amounts forfeited under Section 4.10(c) shall not be reinstated.
If a Participant who is not fully vested in his Employer Contribution
Account has a Termination of Employment, does not receive a distribution of
his Accounts following his Termination of Employment, and subsequently
resumes employment as an Employee after incurring a Period of
Non-employment lasting at least six years, then (i) the vested portion of
the Participant's Employer Contribution Account attributable to Matching
Employer Contributions made prior to the Participant's Termination of
Employment shall be fully vested and shall be held in the Pre-Break
Employer Contribution Subaccount of the Participant's Employer Contribution
Account, and (ii) the Participant's Employer Contributions and Forfeitures,
if any, allocated after the Participant's reemployment shall vest in
accordance with the provisions of Sections 4.10(a) and (b) and shall be
held in the Post-Break Employer Contribution Subaccount of the
Participant's Employer Contribution Account.
(e) Application of Forfeitures. Forfeitures arising pursuant to
Section 4.1(c)(1), 4.1(c)(2), 4.2(c), 4.10(c) or 12.5 during a Plan Year
shall be applied to
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restore any Forfeitures that are reinstated during the Plan Year pursuant
to Section 4.10(d) or 12.5, to correct errors in the adjustment of
Participants' Accounts pursuant to Section 6.15, or toward the payment of
Matching Employer Contributions. Forfeitures that are applied toward
payment of Matching Employer Contributions shall be considered to be
Matching Employer Contributions, shall reduce the amount of Matching
Employer Contributions otherwise required to be made to the Trust, and
shall be allocated in accordance with Section 4.2(f).
ARTICLE V
Limitations on Contributions
5.1 Limitations on Contributions.
(a) Limitations on Contributions. Any of the provisions herein to the
contrary notwithstanding, a Participant's Annual Additions (as defined in
Section 5.1(b)(1) below) for any Plan Year shall not exceed his Maximum
Annual Additions (as defined in Section 5.1(b)(2) below) for the Plan Year.
If a Participant's Annual Additions exceed his Maximum Annual Additions,
the Participant's Annual Additions for the Plan Year shall be reduced
according to Section 5.1(c) by the amount necessary to eliminate such
excess (the "Annual Excess").
(b) Definitions.
(1) "Annual Additions" of a Participant for a Plan Year means the
sum of the following:
(A) Matching Employer Contributions, including Forfeitures,
and Minimum Employer Contributions (as defined in Article XI) for
the Plan Year allocated to his Employer Contribution Account,
(B) Matched Participant Contributions for the Plan Year
allocated to his Matched Participant Contribution Account,
(C) Unmatched Participant Contributions for the Plan Year
allocated to his Unmatched Participant Contribution Account,
(D) Special Section 401(k) Contributions for the Plan Year
allocated to his Matched Participant Contribution Account,
(E) All employer contributions, non-deductible employee
contributions and forfeitures for such Plan Year allocated to
such Participant's accounts for such Plan Year under any Related
Defined Contribution Plan,
(F) contributions allocated to any individual medical
account (as defined in Code Section 401(h)) established for the
Participant which
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is part of a Related Defined Benefit Plan as provided in Code
Section 415(l) and any amount attributable to post-retirement
medical benefits allocated to an account, established under Code
Section 419A(d)(1) for the Participant; provided, however, that
the limitation in Section 5.1(b)(2)(A) shall not apply to any
amounts treated as an Annual Addition under this Section
5.1(b)(1)(F).
A Participant's Annual Additions shall include amounts described in
this Section 5.1(b)(1) that are determined to be excess contributions
as defined in Section 401(k)(8)(B) of the Code, excess aggregate
contributions as defined in Section 401(m)(6)(B) of the Code, and
excess deferrals as described in Section 402(g) of the Code,
regardless of whether such amounts are distributed or forfeited.
Rollover Contributions and Trust-to-Trust Transfers shall not be
included as part of a Participant's Annual Additions. The Annual
Additions for any Plan Year beginning before January 1, 1987 shall not
be recomputed to treat all non-deductible employee contributions as
Annual Additions.
(2) "Maximum Annual Additions" of a Participant for a Plan Year
means the lesser of (A) and (B) below:
(A) Percentage Limitation.(A) Percentage Limitation. 25% of
the Participant's Compensation during the Plan Year; or
(B) Dollar Limitation. $30,000 (in 1997, as adjusted for
cost-of-living increases in accordance with regulations
prescribed by the Secretary of the Treasury or his delegate
pursuant to the provisions of Section 415(d) of the Code).
(c) Elimination of Annual Excess. If a Participant has an Annual
Excess for a Plan Year, such excess shall not be allocated to the
Participant's Accounts but shall be eliminated as follows:
(1) Unmatched Participant Contributions. The Participant's
Unmatched Participant Contributions for the Plan Year shall be reduced
to the extent necessary to eliminate the Annual Excess.
(2) Matched Participant Contributions and Related Matching
Employer Contributions. If any Annual Excess remains, the
Participant's Matched Participant Contributions and the related
Matching Employer Contributions for the Plan Year shall be reduced in
proportionate amounts to the extent necessary to eliminate the Annual
Excess.
(3) Special Section 401(k) Contributions. If any Annual Excess
remains, the Participant's Special Section 401(k) Contributions for
the Plan Year shall be reduced to the extent necessary to eliminate
the Annual Excess.
Any Participant Contributions reduced or eliminated under this Section
5.1 shall be distributed to the Participant. Any allocations of Matching
Employer Contributions
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<PAGE>
and Special Section 401(k) Contributions reduced or eliminated under this
Section 5.1 shall be held, subject to the limits of this Section 5.1, in a
suspense account and applied to reduce the Matching Employer Contributions
and Special Section 401(k) Contributions for the next succeeding Plan Year
of the Employer with respect to which such reductions have occurred. On
Plan termination any amounts held in a suspense account which may not be
allocated to Participants in the Plan Year of the termination under the
provisions of this Section, shall be returned to the Employers in such
proportions as shall be determined by the Committee.
(d) Combined Limitations. Effective for Plan Years commencing prior to
January 1, 2000, if a Participant participates or has participated in any
Related Defined Benefit Plan, the sum of the Defined Benefit Plan Fraction
(as defined in Section 415(e)(2) of the Code) and the Defined Contribution
Plan Fraction (as defined in Section 415(e)(3) of the Code) for such
Participant shall not exceed 1.0 (called the "Combined Fraction"). If the
Combined Fraction of such Participant exceeds 1.0 for any Plan Year
commencing prior to January 1, 2000, the Participant's Defined Benefit Plan
Fraction shall be reduced (a) first, by limiting the Participant's annual
benefits payable from the Related Defined Benefit Plan in which he
participates to the extent provided therein and (b) second, by reducing the
Participant's Annual Additions to the extent necessary to reduce the
Combined Fraction of such Participant to 1.0.
(e) Standard of Control. For purposes of this Section 5.1, the
standard of control for determining a Related Company under Sections 414(b)
and 414(c) of the Code (and thus also Related Plans) shall be deemed to be
"more than 50%" rather than "at least 80%".
ARTICLE VI
Trustee and Trust Fund
6.1 Trust Agreement. The Company and the Trustee have entered into a Trust
Agreement which provides for the investment of the assets of the Plan and
administration of the Trust Fund. The Trust Agreement, as from time to time
amended, shall continue in force and shall be deemed to form a part of the Plan,
and any and all rights or benefits which may accrue to any person under the Plan
are subject to all the terms and provisions of the Trust Agreement.
6.2 Selection of Trustee. The Company shall select the Trustee in
accordance with the Trust Agreement. The subsequent resignation or removal of a
Trustee and the appointment of a successor Trustee and the approval of his or
its accounts shall be accomplished in the manner provided in the Trust
Agreement.
6.3 Trustee's Duties. The powers, duties and responsibilities of the
Trustee shall be as stated in the Trust Agreement, and nothing contained in this
Plan either expressly or by implication shall be deemed to impose any additional
powers, duties or responsibilities upon the Trustee. All Matching Employer
Contributions, Participant Contributions, Special Section 401(k) Contributions,
Rollover Contributions and Trust-to-Trust Transfers to the Plan shall be paid
into the Trust, and all benefits payable under the Plan shall be paid from the
Trust. An
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Employer shall have no rights or claims of any nature in or to the assets of the
Trust Fund except the right to require the Trustee to hold, use, apply and pay
such assets held by the Trustee, in accordance with the directions of the
Investment Committee and the Administrative Committee, as applicable, for the
exclusive benefit of the Participants and their Beneficiaries, except as
otherwise provided in Sections 5.1 and 6.16.
6.4 Trust Expenses. All clerical, legal and other expenses of the Plan and
the Trust and Trustee's fees, if any, shall be paid by the Trust except to the
extent paid by an Employer.
Out of pocket expenses incurred by the Trust in the course of resolving
conflicting claims to a Participant's Accounts whether under domestic relations
orders or otherwise (including, without limitation, attorney's fees and court
costs) shall be charged, to the extent permitted by law, solely to the Accounts
of such Participant and shall not be treated as a general Trust expense
chargeable to the Accounts of all Participants.
6.5 Trust Entity. The Trust under this Plan from its inception shall be a
separate entity aside and apart from Employers or their assets. The Trust, and
the corpus and income thereof, shall in no event and in no manner whatsoever be
subject to the rights or claims of any creditor of any Employer.
6.6 Separate Accounts. The Administrative Committee shall maintain separate
Accounts for each Participant as described in Section 2.1 hereof. Contributions
shall be credited to Participant's Accounts on the Valuation Date coinciding
with or next following the date the contribution is actually received by the
Trustee. Withdrawals and distributions shall be charged to a Participant's
Accounts on the Valuation Date coinciding with or next preceding the date such
withdrawal or distribution is made from the Participant's Accounts. Earnings,
gains and loses shall be credited or charged to a Participant's Accounts on the
Valuation Date coinciding with or next following the date such amounts are
actually credited or charged by the Investment Fund in which such Participant's
Accounts are invested. Expenses shall be charged to a Participant's Accounts on
the Valuation Date coinciding with or next preceding the date such expenses are
actually paid by the Investment Fund in which such Participant's Accounts are
invested.
6.7 Investment Funds. The assets of the Trust Fund shall be invested in the
Investment Funds designated by the Investment Committee for the investment of
Participants' Accounts. The Investment Committee may, from time to time,
designate additional Investment Funds with such investment characteristics as it
deems appropriate. The Investment Committee may also terminate any Investment
Fund and may modify the investment characteristics of any Investment Fund as it
deems appropriate. The designation, modification or termination of any
Investment Fund shall be reflected in the records of the Investment Committee
and shall be communicated promptly to the Administrative Committee and the Plan
Administrator. Subject to the provisions of Sections 6.9, 6.10 and 6.11, up to
100% of a Participant's Accounts may be invested in the Company Stock Fund.
In order to maintain appropriate or adequate liquidity and pending or
pursuant to investment directions from the Investment Committee or an investment
manager, the Trustee is authorized to hold such portions of each of the
Investment Funds as it deems necessary in cash or liquid short-term cash
equivalent investments or securities (including, but not limited to, United
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States government treasury bills, commercial paper, and savings accounts and
certificates of deposit, and common or commingled trust funds invested in such
securities).
Notwithstanding any provision in Section 6.9, 6.10 or 6.11 to the contrary,
the Investment Committee may issue rules and regulations imposing such
restrictions and limitations on the investment of contributions in, and
transfers of Account balances among, the Investment Funds as it deems
appropriate from time to time, consistent with the investment objectives of the
respective Investment Funds.
6.8 Investment of Matching Employer Contributions. Participants' Matching
Employer Contributions and earnings thereon shall be invested in the Company
Stock Fund.
6.9 Investment of Participants' Employer Contribution Accounts.
(a) In General. Except as provided in (b) or (c), Participants'
Employer Contribution Accounts shall be invested in the Company Stock Fund.
(b) Direction of Pre-June 10, 1992 Employer Contribution Accounts.
Notwithstanding Section 6.9(a), a person who was a participant in the Old
GI Plan on or before June 9, 1992 may direct the investment of the portion,
if any, of his Employer Contribution Account which was not invested in the
company stock fund under the Old GI Plan on December 31, 1992 among the
Investment Funds (other than the Company Stock Fund, the CommScope Stock
Fund and the GSI Stock Fund) in accordance with such rules and procedures
as the Administrative Committee may establish or adopt.
(c) Investment in CommScope Stock Fund and GSI Stock Fund. Effective
as of the Spin-off Date and subject to Section 6.12:
(1) Shares of CommScope Stock transferred to the Participant's
Employer Contribution Account from the Old GI Plan shall be invested
in the CommScope Stock Fund.
(2) Shares of GSI Stock transferred to the Participant's Employer
Contribution Account from the Old GI Plan shall be invested in the GSI
Stock Fund.
Notwithstanding the foregoing, a Participant may elect to transfer all or
any portion of his Employer Contribution Account which is invested in
either the CommScope Stock Fund or the GSI Stock Fund to any Investment
Fund (other than the GSI Stock Fund or the CommScope Stock Fund) in
accordance with such rules and procedures as the Administrative Committee
may establish or adopt. A Participant may not elect to transfer any portion
of his Employer Contribution Account into the CommScope Stock Fund or the
GSI Stock Fund.
(d) Dividends on CommScope Stock and GSI Stock. Cash dividends and
other cash distributions received with respect to the portion of a
Participant's Employer Contribution Account invested in the CommScope Stock
Fund or the GSI Stock Fund
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shall not be reinvested in CommScope Stock or GSI Stock but shall be
invested among other Investment Funds in accordance with Section 6.10.
6.10 Investment Elections with Regard to Participant Contributions, Special
Section 401(k) Contributions, Rollover Contributions, Trust-to-Trust Transfers
and Cash Dividends with Respect to CommScope Stock and GSI Stock. A Participant
may direct the investment of his Participant Contributions, Special Section
401(k) Contributions, Rollover Contributions, amounts transferred in
Trust-to-Trust Transfers to the Plan and any cash dividends or other cash
distributions received with respect to the portion of the Participant's Accounts
invested in the CommScope Stock Fund or the GSI Stock Fund among the Investment
Funds (other than the CommScope Stock Fund and the GSI Stock Fund) in accordance
with such rules and procedures as the Administrative Committee may establish or
adopt. A Participant's investment election made pursuant to this Section 6.10
shall continue in effect, notwithstanding any change in the amount of
contributions to the Plan until such Participant shall change his investment
election. A Participant's election with respect to the investment of his
contributions under the Old GI Plan in effect on June 30, 1997 shall be treated
as having been made under this Plan and shall remain in effect hereunder until
the Participant changes his investment election in accordance with this Section
6.10.
6.11 Investment Elections with Regard to Matched Participant Contribution
Accounts, Unmatched Participant Contribution Accounts, Rollover Contribution
Accounts and Trust-to-Trust Accounts.
(a) In General. Except as provided in (b), a Participant may elect to
transfer all or any portion of his Matched Participant Contribution
Account, Unmatched Participant Contribution Account, Rollover Contribution
Account and Trust-to-Trust Account balances among the Investment Funds
(other than the CommScope Stock Fund and the GSI Stock Fund) in accordance
with such rules and procedures as the Administrative Committee may
establish or adopt; provided that no portion of a Participant's Account
balances may be transferred to the Company Stock Fund pursuant to this
Section 6.11 unless such Participant was an Eligible Employee at any time
on or after May 1, 1993.
(b) Investment in CommScope Stock Fund and GSI Stock Fund. Effective
as of the Spin-off Date and subject to Section 6.12:
(1) Shares of CommScope Stock transferred to the Participant's
Accounts (other than his Employer Contribution Account) from the Old
GI Plan shall be invested in the CommScope Stock Fund.
(2) Shares of GSI Stock transferred to the Participant's Accounts
(other than his Employer Contribution Account) from the Old GI Plan
shall be invested in the GSI Stock Fund.
Notwithstanding the foregoing, a Participant may elect to transfer all or
any portion of his Matched Participant Contribution Account, Unmatched
Participant Contribution Account, Rollover Contribution Account and
Trust-to-Trust Account balances held in the CommScope Stock Fund or GSI
Stock Fund to any other Investment Fund (other than the
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CommScope Stock Fund or the GSI Stock Fund) in accordance with such rules
and procedures as the Administrative Committee may establish or adopt.
(c) Dividends on CommScope Stock and GSI Stock. Cash dividends and
other cash distributions received with respect to the portion of a
Participant's Accounts (other than his Employer Contribution Account)
invested in the CommScope Stock Fund or the GSI Stock Fund shall not be
reinvested in CommScope Stock or GSI Stock but shall be invested among the
other Investment Funds in accordance with Section 6.10.
6.12 Special Provisions for Company Stock Fund, CommScope Stock Fund and
GSI Stock Fund. Notwithstanding any provision in this Article VI to the
contrary, if the Special Fiduciary determines that a Participant's investment
election (or failure to file an investment election) with respect to the
Participant's Company Stock Fund, CommScope Stock Fund and/or GSI Stock Fund is
not "proper" under Section 403(c) of ERISA or appropriate in light of prudent
investment standards including (except with respect to the investment in Company
Stock) considerations of diversification, the Special Fiduciary shall have
absolute discretion at any time to require either the sale or continued holding
of all or any portion of the Company Stock, CommScope Stock or GSI Stock
allocated to Participants' Accounts without regard to the Participant's
investment election (or failure to file an investment election) with respect to
the investment of the Participant's Accounts in the Company Stock Fund, the
CommScope Stock Fund or the GSI Stock Fund. In considering any sales of
CommScope Stock or GSI Stock pursuant to Participants' investment elections
under Sections 6.9(c) and 6.11(b) or upon the determination of the Special
Fiduciary, the Special Fiduciary shall act in accordance with the best interests
of Participants to protect the value of Plan assets.
6.13 Shareholder Rights in Company Stock.
(a) Participant Directions. Each Participant or Beneficiary of a
deceased Participant, as a named fiduciary, shall have the right to direct
the Special Fiduciary as to the manner of voting and the exercise of all
other rights which a shareholder of record has with respect to shares (and
fractional shares) of Company Stock which have been allocated to the
Participant's Accounts in the Company Stock Fund (including, but not
limited to, the right to sell or retain shares in a public or private
tender offer). In voting or exercising such other rights with respect to
such shares, the Participants and Beneficiaries shall consider the
long-term interests of all current Participants in providing benefits under
the Plan and Trust. Subject to Section 6.13(d), the Special Fiduciary shall
direct the Trustee to vote or exercise shareholder rights with respect to
all shares (and fractional shares) of Company Stock in the Company Stock
Fund for which the Special Fiduciary received timely directions from
Participants and Beneficiaries in accordance with such Participants' and
Beneficiaries' directions. The Special Fiduciary shall direct the Trustee
to vote all shares (and fractional shares) of Company Stock in the Company
Stock Fund for which the Special Fiduciary has not received timely voting
instructions in the Special Fiduciary's sole discretion. In the event of a
tender offer for Company Stock, the Special Fiduciary shall determine in
its sole discretion whether to direct the Trustee to tender any shares (or
fractional shares) of Company Stock in the Company Stock Fund for which the
Special Fiduciary does not receive a timely direction from the Participant
or Beneficiary as to whether to tender such shares (and fractional shares).
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(b) Named Fiduciaries. Each Participant and Beneficiary who is
authorized (pursuant to Section 6.13(a)) to direct the Special Fiduciary as
to the manner of voting and the exercise of other shareholder rights with
respect to shares (and fractional shares) of Company Stock allocated to
such Participant's or Beneficiary's Accounts in the Company Stock Fund is a
named fiduciary (within the meaning of Section 402(a)(2) of ERISA) with
respect to such shares (and fractional shares). The Administrative
Committee shall cause each such Participant and Beneficiary to be notified
of his status as a named fiduciary, shall instruct each such Participant
and Beneficiary that in exercising such authority to direct the Special
Fiduciary, with respect to shares of Company Stock allocated to his
Accounts in the Company Stock Fund, he should consider the long-term
interests of all current Participants in providing benefits under the Plan.
(c) Confidentiality. The Special Fiduciary shall solicit the
directions of Participants and Beneficiaries in accordance with Section
6.13(a) and (b) and shall follow such directions by directing the Trustee
to deliver aggregate votes to the Company or otherwise implementing such
directions in any convenient manner that preserves the confidentiality of
the votes or other directions of individual Participants and Beneficiaries,
except to the extent necessary to comply with applicable federal laws or
state laws that are not preempted by ERISA. Any designee of the Special
Fiduciary who assists in the solicitation or tabulation of the directions
of Participants and Beneficiaries shall certify that he will maintain the
confidentiality of all directions given.
(d) Fiduciary Override. Notwithstanding the foregoing, in the event
that the Special Fiduciary determines that the manner of voting and the
exercise of other shareholder rights with respect to shares of Company
Stock held in the Company Stock Fund is not proper or is contrary to the
provisions of ERISA (including, without limitation, the fiduciary
responsibility requirements of Section 404 of ERISA), the Special Fiduciary
shall disregard such direction and assume responsibility for the voting or
exercise of other shareholder rights with respect to such shares of Company
Stock held in the Company Stock Fund.
6.14 Trust Income. As of each Valuation Date, the fair market value of the
Trust and of each Investment Fund shall be determined and recorded by the
Trustee. The Trustee's determination of fair market value shall be final and
conclusive on all persons. As of each Valuation Date, the Administrative
Committee (or the Trustee on the Administrative Committee's behalf) shall
determine the net income, gains or losses of the Trust Fund and of each separate
Investment Fund since the preceding Valuation Date. The net income, gains or
losses thus derived from the Trust shall be accumulated and shall from time to
time be invested as a part of the Trust Fund. The Administrative Committee (or
the Trustee on the Administrative Committee's behalf) shall proportionately
allocate the net income, gains or losses of each Investment Fund among (a) the
Participants' Accounts and (b) the suspense account maintained under Section
5.1(c) for unallocated Employer contributions, all as valued as of the preceding
Valuation Date (reduced by any distributions therefrom since the preceding
Valuation Date) by crediting (or charging) each such Account by an amount equal
to the net income, gains or losses of each Investment Fund multiplied by a
fraction, the numerator of which is the balance of such Account invested in such
Investment Fund as of the preceding Valuation Date (reduced by any distributions
therefrom since the preceding Valuation Date) and the denominator of which is
the
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total value of all Accounts invested in such Investment Fund as of the
preceding Valuation Date (reduced by any distributions therefrom since the
preceding Valuation Date); provided, however, that for the purpose of allocating
such income as of the first Valuation Date, the numerator and denominator of the
preceding fraction shall be determined by using Account balances as of the first
Valuation Date after all contributions are credited thereto and before income is
allocated as provided in this Section 6.14. Not less than 30 days after the last
day of each calendar quarter (or after such additional date or dates as the
Investment Committee in its discretion may request), the Trustee shall provide
the Administrative Committee and the Investment Committee with a written report
detailing the fair market value of the Trust and of each Investment Fund as of
the last day of the calendar quarter (or as of such other date or dates as the
Investment Committee in its discretion may request).
6.15 Correction of Error. In the event of an error in maintaining a
Participant's Accounts, the Company may in its sole discretion elect to
contribute such amount as it shall determine to correct the error. Unless the
Company so elects, the Administrative Committee, in its sole discretion, may
correct such error by either (i) in the case of an error resulting in reducing a
Participant's Account balance, allocating Forfeitures for the Plan Year to such
Participant's Accounts in such amount as he shall determine to be needed to
correct the error, or (ii) crediting or charging the adjustment required to make
such correction to or against income or as an expense of the Trust for the Plan
Year in which the correction is made. Except as provided in this Section 6.15,
the Accounts of other Participants shall not be readjusted on account of such
error.
6.16 Right of the Employers to Trust Assets. Except as provided in Section
5.1 and subject to (a) and (b) below, the Employers shall have no right or
claims to the Trust Fund except the right to require the Trustee to hold, use,
apply, and pay such assets in its possession in accordance with the Plan for the
exclusive benefit of the Participants or their Beneficiaries and for defraying
the reasonable expenses of administering the Plan and Trust.
(a) Return of Contributions Where Deduction is Disallowed. If, and to
the extent that, a deduction for Matching Employer Contributions,
Participant Contributions or Special Section 401(k) Contributions under
Section 404 of the Code is disallowed, Participant Contributions
conditioned on deductibility will be distributed to the appropriate
Participant and other Employer contributions conditioned upon deductibility
will be returned to the appropriate Employer within one year after the
disallowance of the deduction; and
(b) Return of Contributions Made Through Mistake of Fact. If, and to
the extent that, a Matching Employer Contribution, Participant Contribution
or Special Section 401(k) Contribution is made through mistake of fact,
Participant Contributions will be distributed to the appropriate
Participant and other Employer contributions will be returned to the
appropriate Employer within one year of the payment of the contribution.
All Employer contributions are conditioned upon their being deductible
under Section 404 of the Code.
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ARTICLE VII
Benefits
7.1 Payment of Benefits in General. Subject to the special rules applicable
to a Participant's Trust-to-Trust Account set forth in Schedule A, a
Participant's benefits under this Plan shall be payable in accordance with the
provisions of this Article. Except as otherwise specifically provided, the
provisions of this Article shall apply to all distributions or withdrawals
occurring on or after July 1, 1997, including distributions to Participants (or
to the Beneficiaries of deceased Participants) who had a Termination of
Employment prior to July 1, 1997.
7.2 Payment of Vested Accrued Benefit on Termination of Employment. If a
Participant has a Termination of Employment for any reason other than the
Participant's death, the Trustee shall pay the vested portion of the
Participant's Accrued Benefit in the form of a single lump sum or a direct
rollover (as described in Section 7.10), or any combination thereof, to the
Participant within a reasonable period after the Valuation Date coinciding with
or next following (a) the later of (1) the Participant's Termination of
Employment or (2) his Normal Retirement Date, or (b) such earlier or later date
following the Participant's Termination of Employment as the Participant may
elect in accordance with Section 7.12 and subject to Section 7.5.
7.3 Payment of Accrued Benefit on Account of Death.
(a) Payment to Surviving Spouse. If a married Participant dies before
his entire vested Accrued Benefit has been paid from the Plan and if the
Participant has not designated a Beneficiary other than his spouse (or his
spouse has not consented to such designation in accordance with Section
7.6), the Trustee shall distribute the Participant's vested Accrued Benefit
in the form of a single lump sum or a direct rollover (as described in
Section 7.10), or any combination thereof, to the Participant's surviving
spouse within a reasonable period after the Valuation Date coinciding with
or next following (a) the later of (1) the Participant's Death or (2) his
Normal Retirement Date, or (b) such earlier or later date following the
Participant's death as the Participant's surviving spouse may elect in
accordance with Section 7.12 and subject to Section 7.5.
(b) Payment to Other Beneficiary. If the Participant does not have a
surviving spouse or if the Participant (with his spouse's consent in
accordance with Section 7.6) has named a Beneficiary other than his
surviving spouse to receive some or all of his vested Accrued Benefit (or
remaining vested Accrued Benefit), the Trustee shall distribute the
Participant's vested Accrued Benefit (or remaining vested Accrued Benefit),
within a reasonable time after the Valuation Date coinciding with or next
following the date of the Participant's death, to his designated
Beneficiary in the form of a lump sum.
(c) Designation of Beneficiary. Subject to Section 7.6, the
Participant may select or change his Beneficiary from time to time by
filing a Beneficiary designation in writing with the Administrative
Committee. No designation of Beneficiary or change of Beneficiary shall be
effective until it is received by the Administrative Committee and, if
applicable, until the consent of the Participant's spouse (in accordance
with Section 7.6) is received by the Administrative Committee. If a
Participant shall fail to file a valid
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Beneficiary designation, if all persons designated as the Beneficiary shall
have predeceased the Participant (or, in the case of a Beneficiary other
than an individual, cease to exist prior to the Participant's death), or
if, after a reasonable search, the Administrative Committee is unable to
locate the Participant's Beneficiary within a period of two years following
the Participant's death, the Participant shall be deemed to have designated
the following as Beneficiary in the following order of precedence:
(1) the Participant's surviving spouse;
(2) the Participant's estate.
(d) Period of Distribution. Notwithstanding the foregoing Sections of
this Article VII, if a Participant dies and if at the time of his death
such Participant has not attained his Required Distribution Date, such
Participant's vested Accrued Benefit shall be distributed no later than
December 31 of the calendar year which contains the fifth anniversary of
the Participant's death; except that if the Beneficiary is the
Participant's surviving spouse, the Participant's vested Accrued Benefit
shall be distributed no later than December 31 of the calendar year in
which the Participant would have attained age 70-1/2.
If the surviving spouse of a Participant who is the Participant's
Beneficiary dies before distributions have begun to the surviving spouse
under this Section 7.3(d), distributions shall be made in accordance with
this Section 7.3(d) as if the surviving spouse were the Participant.
7.4 Participant Withdrawals. A Participant may, in accordance with Section
7.12, withdraw all or any portion of his Accounts pursuant to (a), (b), (c)
and/or (d) below; provided, however, that the amount withdrawn pursuant to this
Section 7.4 shall not be less than the lesser of two hundred dollars ($200) or
the amount of the Participant's vested Accrued Benefit. A Participant who has
received a withdrawal pursuant to this Section 7.4 shall not be entitled to
receive another withdrawal (other than a Hardship withdrawal described in
Section 7.4(d)) until the Participant has completed at least six (6) months of
participation in the Plan following such withdrawal. Withdrawals shall be made
pro rata from each Investment Fund in which the Account or Accounts from which
the withdrawal is paid are invested.
(a) Withdrawal from Rollover Contribution Account and Trust-to-Trust
Account. A Participant may, in accordance with Section 7.12, withdraw, for
any reason, all or any portion of his Rollover Contribution Account and,
subject to the restrictions and limitations imposed under Section 4.7 and,
if applicable, Schedule A, his Trust-to-Trust Account.
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(b) Withdrawals from the Employer Contribution Account Attributable to
Matching Employer Contributions Made Prior to January 1, 1991. A
Participant who has withdrawn, or has requested a withdrawal of, the entire
amount to which he is entitled under Section 7.4(a) may, in accordance with
Section 7.12, withdraw, for any reason, of all or any portion of the
Participant's Employer Contribution Account in excess of the sum of (1) the
aggregate amount of matching employer contributions contributed to his
employer contribution account under the Old GI Plan on or after January 1,
1991 and any income credited to his Employer Contribution Account which is
attributable to such matching employer contributions and (ii) any Employer
Matching Contributions contributed to the Participant's Employer
Contribution Account after June 30, 1997 and any income credited to such
Account which is attributable to such Employer Matching Contributions;
provided that the withdrawal of all or any portion of a Participant's
Employer Contribution Account pursuant to this Section 7.4(b) shall result
in a suspension of Matching Employer Contributions with respect to such
Participant for a period of one (1) month effective on the first payroll
date of the month immediately following the month in which the withdrawal
is paid.
(c) Withdrawal After Age 59-1/2. A Participant who has attained age
59-1/2 and who has withdrawn, or has requested a withdrawal of, the entire
amount to which he is entitled under Section 7.4(a) may, in accordance with
Section 7.12, withdraw, for any reason, of all or any portion of his
Matched Participant Contribution Account, his Unmatched Participant
Contribution Account, and his vested Employer Contribution Account.
(d) Hardship Withdrawal. A Participant may request, in accordance with
Section 7.12, a withdrawal for reasons of Hardship of all or any portion of
(i) his Employer Contribution Account; (ii) his Matched Participant
Contribution Account excluding any income or gain credited to his Matched
Participant Contribution Account for any period after December 31, 1988 and
excluding any portion of the Special Section 401(k) Contribution
Subaccount, and (iii) his Unmatched Participant Contribution Account
excluding any income or gain credited to his Unmatched Participant
Contribution Account for any period after December 31, 1988; provided the
following requirements are satisfied:
(1) Necessary to Satisfy Immediate and Heavy Financial Need. The
amount of the withdrawal on account of Hardship shall not exceed the
amount necessary to satisfy the Participant's immediate and heavy
financial need arising by reason of a Hardship, including the amount
needed to pay any federal, state and local income taxes and penalties
reasonably expected to be incurred by reason of the withdrawal;
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(2) Exhaustion of Other Sources of Funds. The Participant must
have obtained all distributions and withdrawals other than Hardship
distributions or withdrawals, and all non-taxable loans currently
available under the Plan and all Related Plans and the Participant
must have exercised all options to acquire Company Stock granted under
an equity incentive or any similar plan maintained by an Employer or
any Related Company if such options are currently exercisable and if
the fair market value of Company Stock exceeds the exercise price of
the option;
(3) Twelve Month Suspension of Elective Contributions. The
Participant's Participant Contributions, elective deferrals (as
defined in Section 402(g) of the Code) and employee contributions
under the Plan and all other qualified and nonqualified plans of
deferred compensation (including equity incentive or any similar
plans, and cash or deferred arrangements which are part of a cafeteria
plan within the meaning of Section 125 of the Code but excluding
health or welfare benefits and flexible spending arrangements that are
part of a cafeteria plan) maintained by an Employer or a Related
Company shall be suspended for a period of twelve (12) months
following the receipt of the Hardship withdrawal; and
(4) Limitation on Participant Contribution in the Year Following
the Hardship Withdrawal. The Participant Contributions under the Plan
and elective deferrals under any Related Plan for the Participant's
taxable years immediately following the taxable year of the Hardship
withdrawal shall not exceed the maximum amount described in Section
4.1(c)(1) for such next taxable year less the amount of such
Participant's Participant Contributions under the Plan and elective
deferrals under any Related Plan for the taxable year of the Hardship
withdrawal.
Withdrawals made pursuant to this Section 7.4(d) shall be made first
from the Participant's Employer Contribution Account, then from the
Participant's Unmatched Participant Contribution Account and finally from
the Participant's Matched Participant Contribution Account.
7.5 Deadline for Payment of Benefits. Notwithstanding any other provision
herein, unless the Participant in accordance with provisions of the Plan elects
otherwise, payment of benefits will be made or commence not later than sixty
(60) days after the latest of the close of the Plan Year in which (1) the
Participant attains age sixty-five (65), (2) occurs the tenth (10th) anniversary
of the Plan Year in which the Participant commenced participation, or (3) the
Participant had a Termination of Employment; provided, however, in no event
shall payment of benefits be made later than a Participant's Required
Distribution Date.
7.6 Spousal Consents.
(a) Conditions for Valid Spousal Consent. A valid spousal consent to
the Participant's naming of a Beneficiary other than his spouse shall be:
(1) in a writing acknowledging the effect of the consent;
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(2) signed by the Participant's spouse and witnessed by a notary
public;
(3) effective only for the spouse who gives the consent; and
(4) effective only with respect to the specific beneficiary named
in the consent unless the spouse voluntarily in such consent expressly
permits subsequent elections of beneficiaries without further spousal
consent and acknowledges the spouse's right to limit the consent to a
specific beneficiary;
provided that the consent of a Participant's spouse shall not be required
if it is established to the satisfaction of a Plan representative that such
consent may not be obtained because there is no spouse, or because the
spouse cannot be located or because of such other circumstances as the
Secretary of the Treasury may by regulations prescribe.
(b) Treatment of Former Spouse as a Spouse Pursuant to a Qualified
Domestic Relations Order. To the extent provided in any Qualified Domestic
Relations Order (as defined in Section 12.4), the former spouse of a
Participant shall be treated as the surviving spouse of such Participant
for purposes of providing consent in accordance with this Section 7.6.
7.7 Facility of Payment. If a Participant or Beneficiary is declared an
incompetent or is a minor, and a conservator, guardian, or other person legally
charged with his care has been appointed, any benefits to which such Participant
or Beneficiary is entitled shall be payable to such conservator, guardian, or
other person legally charged with his care. An Employer, the Trustee, the
Administrative Committee and the Plan Administrator shall not be under any duty
to see to the proper application of such payments made to a Participant,
conservator, guardian, or relatives of a Participant.
7.8 Form of Payment. Subject to Section 7.10, all distributions shall be
paid in a lump sum in cash, or at the option of the Participant, in cash plus
that number of whole shares (with cash in lieu of fractional shares) of Company
Stock allocated to the Participant's Accounts in the Company Stock Fund;
provided, however, that all withdrawals made pursuant to Section 7.4 shall be
paid in a lump sum in cash.
7.9 Lump Sum Payment Without Election. Notwithstanding any other provision
of this Article VII and subject to Section 7.10, if a Participant (or the
Beneficiary of a deceased Participant) is entitled to a distribution (including
distributions with respect to Participants who had a Termination of Employment
prior to January 1, 1998) and if the value of a Participant's vested Accrued
Benefit does not exceed $5,000, the Administrative Committee shall direct the
immediate distribution of such benefit regardless of any election or consent of
the Participant, his spouse or other Beneficiary.
7.10 Direct Rollover to Another Plan. Notwithstanding any provision of this
Plan to the contrary, a Participant, his surviving spouse or a former spouse who
is an alternate payee under a Qualified Domestic Relation Order (as defined in
Section 12.4) (a "Distributee") may elect, at such time and in such manner as
prescribed by the Administrative Committee, to have
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all or any portion of the benefits payable to such Distributee which constitutes
an eligible rollover distribution as defined in Section 402(c)(4) of the Code
paid by the Trustee directly to the eligible retirement plan (as described in
Section 401(a)(31)(D) of the Code) specified by such Distributee.
7.11 Distributions to an Employed Participant on his Required Distribution
Date. A Participant who is employed by the Company or a Related Company on or
after his Required Distribution Date shall receive a distribution of his entire
vested Accrued Benefit (valued as of December 31 of the Plan Year immediately
preceding his Required Distribution Date) not later than his Required
Distribution Date. As of each December 31 thereafter, the Participant's entire
vested Accrued Benefit shall be distributed to him.
7.12 Request for Withdrawal or Distribution. Except as otherwise provided
to the contrary in this Article VII, a distribution or withdrawal shall be paid
only if the Participant or Beneficiary files a written request for a
distribution or withdrawal with the Administrative Committee on such form as the
Administrative Committee shall provide or permit and in accordance with such
rules and regulations as the Administrative Committee may prescribe. A
distribution or withdrawal shall be paid within a reasonable period after the
last day of the calendar quarter (or after such additional date or dates as may
be permitted by the Administrative Committee) in which the Administrative
Committee receives a valid written request for a distribution or withdrawal
provided that the Administrative Committee receives such written request at
least thirty (30) days (or such shorter period as may be permitted by the
Administrative Committee) prior to the last day of such calendar quarter (or
such additional dates as may be permitted by the Administrative Committee for
distributions and withdrawals.
7.13 Deduction of Taxes from Amounts Payable. The Trustee may deduct from
the amounts to be distributed hereunder such amounts as the Trustee, in his or
its sole discretion, deems proper to protect the Trustee and the Trust against
liability for the payment of death, succession, inheritance, income, or other
federal, state or local taxes, and out of the money so deducted, the Trustee may
discharge any such liability and pay the amount remaining to the Participant or
his Beneficiary, as the case may be.
7.14 Improper Payment of Benefits. The Administrative Committee shall
require reimbursement of any amount of payment subsequently determined not to
have been properly payable to a Participant.
7.15 Participant Loans.
(a) Loan Amount. Upon proper application of a Participant, the
Administrative Committee shall grant a loan to such Participant, for any
reason, in such amount and for such period as the Administrative Committee
shall determine, but not exceeding the lesser of:
(1) $50,000, when added to all outstanding amounts loaned to the
Participant from the Plan and all Related Plans, reduced by the excess
(if any) of;
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(A) the Participant's highest outstanding balance of loans
from the Plan and all Related Plans during the one-year period
ending on the day before the date on which such loan is made,
over
(B) the Participant's outstanding balance of loans from the
Plan and all Related Plans on the date on which such loan is
made; or
(2) 50% of the Participant's vested Accrued Benefit valued as of
the most recent Valuation Date for which a valuation has been
completed preceding the date of disbursement of the loan.
A participant may not have more than one loan from the Plan
outstanding at any time.
(b) Loan Terms. Any loan made under this Section 7.15 shall, by its
terms, be required to be repaid within five (5) years unless the loan is
used to acquire a 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) Level Amortization. All loans, except as provided in the
regulations prescribed by the Secretary of the Treasury, shall be amortized
over the term of the loan in substantially level payments not less
frequently than quarterly. A Participant's loan shall be repaid by means of
payroll deduction.
(1) Authorized Leave of Absence. Notwithstanding the foregoing
provisions of this Section 7.15(c), a Participant's loan payments
shall be suspended for a period of up to one year while the
Participant is on an unpaid Authorized Leave of Absence (other than a
military leave described in clause (2) below); provided that the loan
must be repaid within the term specified in Section 7.15(b) and the
installments due after the earlier of the Participant's resumption of
active service or the first anniversary of the commencement of the
Authorized Leave of Absence may not be less than the installments
payable immediately prior to the commencement of the Authorized Leave
of Absence.
(2) Military Leave. Notwithstanding the provisions of Section
7.15(b) and (c), a Participant's loan repayments shall be suspended as
permitted under Section 414(u)(4) of the Code during periods of
absence from employment due to service in the Armed Forces of the
United States.
(d) Loans Granted on a Reasonably Equivalent Basis. The Administrative
Committee may grant such loans and may direct the Trustee to lend Trust
Fund assets to such Participant, provided that such loans are available to
all Participants on a reasonably equivalent basis, are not made available
to Highly Compensated Employees in amounts greater than the amounts made
available to other Employees, bear a reasonable rate of interest, and are
adequately secured.
(e) Source of Loans. Any loan made pursuant to this Section 7.15 shall
be made from the Participant's Accounts in the following order:
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(1) the Rollover Contribution Account;
(2) the Unmatched Participation Contribution Account;
(3) the Matched Participant Contribution Account;
(4) the Employer Contribution Account; and
(5) the Trust-to-Trust Account.
If a Participant's Account is invested in more than one Investment
Fund at the time of the loan, the loan shall be made pro rata from each
Investment Fund. Such loan and any accrued but unpaid interest with respect
thereto, shall constitute a first lien upon the interest of such
Participant in the Accounts from and to the extent to which the loan is
made and, to the extent that the loan may be unpaid at the time the
Participant's Accounts become payable, shall be deducted from the amount
payable to such Participant or his Beneficiary at the time of distribution
of any portion of his Account. In the event that a Participant fails to
repay a loan according to its terms and foreclosure occurs, the Plan may
foreclose on the portion of the Participant's Accounts which secure the
loan and which would be distributable to the Participant as of the earliest
date on which the Participant could elect a distribution or withdrawal
pursuant to Article VII. Such foreclosed amount shall be deemed to be a
distribution.
(f) Loan Earmarked as a Separate Investment for Participant's
Accounts. The note representing the loan shall be segregated in a separate
fund held by the Trustee as a separate ear-marked investment solely for the
account of the Participant. Interest and principal payments on a
Participant's loan shall be credited to each of the Participant's Accounts
in the ratio that the amount of the loan borrowed from the Account bears to
the total amount of the loan borrowed from all of the Participant's
Accounts.
Interest and principal payments shall be invested in accordance with
the Participant's investment election under Section 6.10 in effect at the
time such interest and principal payment is made; provided, however, that
principal and interest payments with respect to the portion of any loan
borrowed from the Participant's Employer Contribution Account which at the
time of the loan was not invested in the Company Stock Fund, shall be
invested pursuant to the Participant's investment election under Section
6.9 in effect with respect to such amounts at the time such principal and
interest payment is made.
(g) Loans Subject to Terms and Conditions Imposed by Administrative
Committee. Any loan made pursuant to this Section 7.15, subject to the
foregoing requirements, shall be subject to such terms and conditions as
the Administrative Committee may in its discretion impose. The
Administrative Committee may adopt such non-discriminatory rules and
regulations relating to loans to Participants as it may deem appropriate.
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ARTICLE VIII
Administration
8.1 Board of Directors Duties. The Board of Directors shall have overall
responsibility for the establishment, amendment and termination of the Plan.
8.2 Chairman Duties. The Chairman shall have overall responsibility for the
administration and operation of the Plan, which responsibility he shall
discharge by the appointment and removal (with or without cause) of the Trustee
and the members of:
(a) the Administrative Committee to which is delegated the overall
responsibility for the administration and operation of the Plan (other than
the authority to manage and control Plan assets and to select the Trustee
and one or more investment managers); and
(b) the Investment Committee to which is delegated the authority to
manage and control Plan assets and to appoint, remove and supervise any
investment manager or Special Fiduciary in accordance with the terms of the
Plan and Trust Agreement.
8.3 Administrative Committee Membership. The Administrative Committee shall
consist of not less than three (3) members, who shall be appointed by the
Chairman or his delegate. The members of the Administrative Committee shall
remain in office at the will of the Chairman or his delegate, and the Chairman
or his delegate may from time to time remove any of said members with or without
cause and shall appoint any successors.
8.4 Administrative Committee Structure. Each member of the Administrative
Committee may (but need not) be an officer, director or Employee of an Employer
hereunder. Each person upon becoming a member of the Administrative Committee,
shall file an acceptance thereof in writing with the Chairman or his delegate
and the other members of the Administrative Committee. Any member of the
Administrative Committee may resign by delivering his written resignation to the
Chairman or his delegate and the other members of the Administrative Committee,
and such resignation shall become effective upon the date specified therein but
not earlier than the date such written resignation is delivered to the Chairman
or his delegate. Any member of the Administrative Committee who is an officer,
director or Employee of an Employer shall automatically cease to be a member of
the Administrative Committee on his ceasing to be an officer, director or
Employee of an Employer. In the event of a vacancy in membership, the remaining
members shall constitute the Administrative Committee with full power to act
until said vacancy is filled.
8.5 Administrative Committee Actions. The Administrative Committee may
establish its own rules and procedures, may act either with or without a formal
meeting, including telephonically, and shall meet at the call of any member. The
Chairman or his delegate shall designate a chairman who shall be a member of the
Administrative Committee. The Administrative Committee shall appoint a secretary
who may (but need not) be a member of the Administrative Committee and such
other officers as the Administrative Committee may deem necessary who may (but
need not) be members of the Administrative Committee.
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8.6 Administrative Committee Duties. The Administrative Committee, on
behalf of the Participants and Beneficiaries of the Plan and Trust shall enforce
the Plan and the Trust Agreement in accordance with the terms of the Plan and
the Trust Agreement and shall have all powers necessary to accomplish that
purpose, including but not by way of limitation, the following:
(a) To appoint and remove, as it deems advisable, the Plan
Administrator;
(b) To issue rules, regulations and procedures necessary for the
proper conduct and administration of the Plan and to change, alter, or
amend such rules, regulations and procedures;
(c) To construe the Plan and Trust Agreement;
(d) To determine all questions arising in the administration of the
Plan, including those relating to the eligibility of persons to become
Participants; the rights of Participants, former Participants and their
Beneficiaries; and Employer contributions, and its decision thereon shall
be final and binding upon all persons hereunder;
(e) To compute and certify to the Trustee the amount and kind of
benefits payable to Participants or their Beneficiaries;
(f) To authorize all disbursements of the Trustee from the Trust Fund
in accordance with the provisions of the Plan;
(g) To employ and suitably compensate such accountants and attorneys
(who may but need not be the accountants or attorneys of the Company) and
other persons to render advice and clerical employees as it may deem
necessary to the performance of its duties;
(h) To communicate the Plan and its eligibility requirements to the
Employees and to notify Employees when they become eligible to participate;
(i) To invest all or a portion of the Trust Fund in loans to
Participants and to segregate the note representing such loan in a separate
fund in accordance with Section 7.15;
(j) To have prepared and furnished to Participants and Beneficiaries
all information required under federal law or provisions of this Plan to be
furnished to them;
(k) To have prepared and filed or published with the Department of
Labor and the Department of Treasury or other governmental agency all
reports and other information required under federal law;
(l) To make available to Participants upon request, for examination
during business hours, such records as pertain exclusively to the examining
Participant; and
(m) To hear, review and determine claims for benefits.
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8.7 Investment Committee Membership. The Investment Committee shall consist
of not less than three (3) members who shall be appointed by the Chairman or his
delegate. The members of the Investment Committee shall remain in office at the
will of the Chairman or his delegate and the Chairman or his delegate may from
time to time remove any said members with or without cause and shall appoint any
successors.
8.8 Investment Committee Structure. Each member of the Investment Committee
may (but need not) be an officer, director or Employee of an Employer hereunder.
Each person upon becoming a member of the Investment Committee shall file an
acceptance thereof in writing with the Chairman or his delegate and the other
members of the Investment Committee. Any member of the Investment Committee may
resign by delivering his written resignation to the Chairman or his delegate and
the other members of the Investment Committee, and such resignation shall become
effective upon the date specified therein but not earlier than the date such
written resignation is delivered to the Chairman or his delegate. Any member of
the Investment Committee who is an officer, director or Employee of an Employer
shall automatically cease to be a member of the Investment Committee on his
ceasing to be an officer, director or Employee of an Employer. In the event of a
vacancy in membership, the remaining members shall constitute the Investment
Committee with full power to act until said vacancy is filled.
8.9 Investment Committee Actions. The Investment Committee may establish
its own rules and procedures, may act either with or without a formal meeting,
including telephonically, and shall meet at the call of any member. The Chairman
or his delegate shall designate a chairman who shall be a member of the
Investment Committee. The Investment Committee shall appoint a secretary who may
(but need not) be a member of the Investment Committee and such other officers
as the Investment Committee may deem necessary who may (but need not) be members
of the Investment Committee.
8.10 Investment Committee Duties. The Investment Committee on behalf of the
Participants and Beneficiaries of the Plan and Trust shall manage and control
the assets of the Plan and shall have all of the powers necessary to accomplish
that purpose, including but not by way of limitation, the following:
(a) To appoint and remove, as it deems advisable, one or more
investment managers pursuant to the provisions of the Trust Agreement;
(b) To periodically monitor the performance of the investment managers
and of the Trustee;
(c) To establish and communicate to the Trustee and the investment
managers the general investment objectives and guidelines of the Trust;
and, from time to time to modify such general investment objectives and
guidelines;
(d) To establish, modify the investment characteristics of, or
terminate Investment Funds from time to time;
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(e) To impose such rules and restrictions on investments in, and
transfers among, the Investment Funds as it deems appropriate from time to
time, consistent with the investment objectives of the respective
Investment Funds; and
(f) To employ and suitably compensate such accountants, attorneys and
financial advisors (who may but need not be the accountants, attorneys and
financial advisors of the Company) and other persons to render advice and
clerical employees as it may deem necessary to the performance of its
duties; and
(g) To appoint and remove, as it deems advisable, one or more Special
Fiduciaries who shall be independent of the Company, CommScope, Inc. and
GSI Systems, Inc. and who may be the Trustee, or an investment manager or
ancillary trustee appointed in accordance with the terms of the Trust
Agreement.
8.11 Committee and Plan Administrator Bonding and Expenses. The members of
the Investment Committee and the Administrative Committee and the Plan
Administrator shall serve without bond (except as otherwise required by federal
law) and without compensation for their service as such; but all expenses of the
Investment Committee, the Administrative Committee and the Plan Administrator,
including compensation of the Trustee, accountants, attorneys and other persons
who render advice or services to the Plan, shall be paid by the Trust except to
the extent paid by the Employers.
8.12 Allocations and Delegations of Responsibility.
(a) Delegations of Responsibility. The Board of Directors, the
Chairman, the Investment Committee, the Administrative Committee, and the
Plan Administrator, respectively, shall have the authority to delegate from
time to time, in writing, all or any part of his or its responsibilities
under the Plan to such person or persons as he or it may deem advisable
(and may authorize such person, upon receiving the written consent of the
delegating authority, to delegate such responsibilities to such other
person or persons as the delegating authority shall authorize), and in the
same manner to revoke any such delegation of responsibility. Any action of
the delegate in the exercise of such delegated responsibilities shall have
the same force and effect for all purposes hereunder as if such action had
been taken by the delegating authority. The Employers, the Board of
Directors, the Chairman, the Investment Committee, the Administrative
Committee, and the Plan Administrator shall not be liable for any acts or
omissions of any such delegate. The delegate shall periodically report to
the delegating authority concerning the discharge of the delegated
responsibilities.
(b) Allocations of Responsibility. The Board of Directors, the
Investment Committee, the Administrative Committee, and, if the Plan
Administrator is more than one person, the Plan Administrator shall have
the authority to allocate from time to time, in writing, all or any part of
its responsibilities under the Plan to one or more of its members as it may
deem advisable, and in the same manner to revoke such allocation of
responsibilities. Any action of the member to whom responsibilities are
allocated in the exercise of such allocated responsibilities shall have the
same force and effect for all purposes hereunder as if such action had been
taken by the allocating authority. The Employers, the Board of Directors,
the Chairman, the Investment Committee, the
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Administrative Committee, and the Plan Administrator shall not be liable
for any acts or omissions of such member. The member to whom
responsibilities have been allocated shall periodically report to the
allocating authority concerning the discharge of the allocated
responsibilities.
8.13 Information To Be Supplied by Employers. Employers shall provide the
Investment Committee, Administrative Committee, the Plan Administrator and the
Trustee or their delegates with such information as they shall from time to time
determine to be necessary in the discharge of their duties. The Investment
Committee, Administrative Committee, the Plan Administrator and the Trustee may
rely conclusively on the information certified to it by an Employer.
8.14 Records. The regularly kept records of the Administrative Committee,
the Plan Administrator, the Company and the other Employers shall be conclusive
evidence of the Vesting Service of a Participant, his Compensation, his age, his
marital status, his status as an Eligible Employee, and all other matters
contained in such records applicable to this Plan provided that a Participant
may request a correction in the record of his age at any time prior to
retirement, and such correction shall be made if within ninety (90) days after
such request he furnishes in support thereof a birth certificate, baptismal
certificate, or other documentary proof of age satisfactory to the
Administrative Committee.
8.15 Fiduciary Capacity. Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Plan.
8.16 Plan Administrator. The Administrative Committee may appoint a Plan
Administrator who may (but need not) be a member of the Administrative
Committee, and in the absence of such appointment, the Administrative Committee
shall be the Plan Administrator.
8.17 Fiduciary Responsibility. If a Plan fiduciary acts in accordance with
ERISA, Title I, Subtitle B, Part 4:
(a) Determination of Validity of a Spousal Consent. In determining
that the Participant's spouse has consented to the Participant's naming of
a Beneficiary other than his spouse or that the consent of the
Participant's spouse may not be obtained because there is no spouse, the
spouse cannot be located or other circumstances prescribed by the Secretary
of the Treasury by regulations, then to the extent of payments made
pursuant to such consent or determination, the Plan and its fiduciaries
shall have no further liability.
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(b) Determination of Validity of a Qualified Domestic Relations Order.
In treating a domestic relations order as being (or not being) a Qualified
Domestic Relations Order (as defined in Section 12.4), or, during any
period in which the issue of whether a domestic relations order is a
Qualified Domestic Relations Order is being determined (by the
Administrative Committee, by a court of competent jurisdiction, or
otherwise), in separately accounting for the amounts ("Segregated Amounts")
which would have been payable to the alternate payee during such period if
the order had been determined to be a Qualified Domestic Relations Order,
in paying the Segregated Amounts (including any interest thereon) to the
person entitled thereto if within the 18-month period beginning with the
date on which the first payment would be required to be made under the
domestic relations order (the "18-Month Period") the domestic relations
order (or a modification thereof) is determined to be a Qualified Domestic
Relations Order, in paying the Segregated Amounts (including any interest
thereon) to the person entitled thereto if there had been no order, if
within the 18-Month Period the domestic relations order is determined not
to be qualified, or if the issue is not resolved within the 18-Month Period
and in prospectively applying a domestic relations order which is
determined to be qualified after the close of the 18-Month Period, then the
obligation of the Plan and its fiduciaries to the Participant and each
alternate payee shall be discharged to the extent of any payment made
pursuant to such acts.
8.18 Committee/Plan Administrator Decisions Final. The Investment
Committee, the Administrative Committee and the Plan Administrator shall have
discretion to determine all matters within their respective jurisdictions. The
decisions of the Investment Committee, the Administrative Committee and of the
Plan Administrator shall be final, binding and conclusive upon the Employers,
and the Trustee and upon each Employee, Participant, former Participant,
Beneficiary and every other person or party interested or concerned.
ARTICLE IX
Claims Procedure
9.1 Initial Claim for Benefits. Each Participant or Beneficiary (a
"Claimant") may submit his claim for benefits to the Administrative Committee
(or to such other person or persons as may be designated by the Administrative
Committee) in writing in such form as is provided or approved by the
Administrative Committee, which claim shall designate the date upon which the
Claimant desires his benefits to commence. A Claimant shall have no right to
seek review of a denial of benefits, or to bring any action in any court to
enforce a claim for benefits prior to his filing a claim for benefits and
exhausting his rights to review under Sections 9.1 and 9.2.
When a claim for benefits has been filed properly, such claim for benefits
shall be evaluated and the Claimant shall be notified of its approval or the
denial within ninety (90) days after the receipt of such claim unless special
circumstances require an extension of time for processing the claim. If such an
extension of time for processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial
ninety (90) day period which shall specify the special circumstances requiring
an extension and the date by which a final decision will be reached (which date
shall not be later than one hundred and eighty
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(180) days after the date on which the claim was filed). A Claimant shall be
given a written notice in which the Claimant shall be advised as to whether the
claim is granted or denied, in whole or in part. If a claim is denied, in whole
or in part, the Claimant shall be given written notice which shall contain (1)
the specific reasons for the denial, (2) references to pertinent plan provisions
upon which the denial is based, (3) a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is necessary, and (4) the Claimant's rights to seek
review of the denial.
9.2 Review of Claim Denial. If a claim is denied, in whole or in part, (or
if within the time periods presented in Section 9.1 the Claimant has not
received an approval or a denial and the claim is therefore deemed denied) the
Claimant shall have the right to request that the Administrative Committee
review the denial, provided that the Claimant files a written request for review
with the Administrative Committee within sixty (60) days after the date on which
the Claimant received written notification of the denial. A Claimant (or his
duly authorized representative) may review pertinent documents and submit issues
and comments in writing to the Administrative Committee. Within sixty (60) days
after such request for review is received, the review shall be made and the
Claimant shall be advised in writing of the decision on review, unless special
circumstances require an extension of time for processing the review, in which
case the Claimant shall be given a written notification within such initial
sixty (60) day period specifying the reasons for the extension and when such
review shall be completed (provided that such review shall be completed within
one hundred and twenty (120) days after the date on which the request for review
was filed). The decision on review shall be forwarded to the Claimant in writing
and shall include specific reasons for the decision and references to plan
provisions upon which the decision is based. A decision on review shall be final
and binding on all persons for all purposes. If a Claimant shall fail to file a
request for review in accordance with the procedures described in Sections 9.1
and 9.2, such Claimant shall have no right to review and shall have no right to
bring action in any court and the denial of the claim shall become final and
binding on all persons for all purposes.
ARTICLE X
Amendment and Termination of the Plan
10.1 Plan Termination. It is the present intention of the Company that it
will continue the Plan and the payment of contributions indefinitely, but the
continuation of the Plan and the payment of Employer contributions is not
assumed as a contractual obligation of the Company or any other Employer; and
the right is reserved by the Company and each other Employer at any time to
reduce, suspend or discontinue its contributions hereunder, and the right is
reserved by the Company to terminate the Plan at any time, provided, however,
that the termination of the Plan or the reduction, suspension or discontinuance
of contributions hereunder shall not have any retroactive effect as to deprive
any Participant or Beneficiary of any benefit already accrued.
10.2 Amendments. The Company, by resolution of the Board of Directors, may
amend, modify, change, revise, discontinue or terminate the Plan at any time;
provided, that, except as provided in Sections 5.1 and 6.16, no amendment shall:
(a) increase the duties or liabilities of the Trustee, the Investment Committee,
the Administrative Committee or the Plan Administrator without consent of the
entity affected; (b) have the effect of vesting in any
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Employer any interest in any funds, securities or other property subject to the
terms of this Plan and the Trust Agreement; (c) authorize or permit at any time
any part of the corpus or income of the Trust Fund to be used or diverted to
purposes other than for the exclusive benefit of Participants and their
Beneficiaries; or (d) have any retroactive effect as to deprive any Participant
or Beneficiary of any benefit already accrued; provided, however, that no
amendment made in conformance to provisions of the Code, or any other statute
relating to employees' trusts, or any official regulations or ruling issued
pursuant thereto, shall be considered prejudicial to the rights of any
Participant or Beneficiary.
10.3 Payment Upon Termination. Upon termination of the Plan or complete
discontinuance of Employer contributions, the unvested portion of each
Participants' Accrued Benefit that has not been forfeited pursuant to Section
4.10(c) prior to the termination of the Plan or complete discontinuance of
Employer contributions shall become fully vested and nonforfeitable. Upon a
partial termination of the Plan, the Accrued Benefit of each former Active
Participant who lost status as a Active Participant because of such partial
termination shall become fully vested and nonforfeitable. In the event of
termination of the Plan and after payment of all expenses, the Administrative
Committee may direct that either (1) each Participant and each Beneficiary of a
deceased Participant receive his entire Accrued Benefit as soon as reasonably
possible or (2) the Trust be continued and Participants' Accrued Benefits be
distributed at such times and in such manner as provided in Article VII in which
case continued allocations of net income, gains, losses and expenses of the
Trust Fund as provided in Section 6.14 shall be made.
10.4 Withdrawal from the Plan by an Employer. While it is not the present
intention of any Employer to withdraw from the Plan and Trust Agreement, any
Employer other than the Company may withdraw from the Plan and Trust Agreement,
under such terms and conditions as the Board of Directors may prescribe, by
delivery to the Trustee and the Company of a resolution of its board of
directors electing to so withdraw. An Employer who ceases to be a Commonly
Controlled Entity shall automatically withdraw from the Plan effective as of the
date such Employer ceases to be a Commonly Controlled Entity.
ARTICLE XI
Top Heavy Provisions
11.1 Application. The definitions in Section 11.2 shall apply under this
Article XI and the special rules in Section 11.3 shall apply, notwithstanding
any other provisions of the Plan, for any Plan Year in which the Plan is a Top
Heavy Plan and for such other Plan Years as may be specified herein. Anything in
this Article XI to the contrary notwithstanding, if the Plan is a multiemployer
plan described in Code Section 414(f), or a multiple employer plan as described
in Code Section 413(c), the provisions of this Article XI shall be applied
separately to each Employer and Related Company taking account of benefits under
the plan provided to employees of the Employer or Related Company because of
service with that Employer or Related Company.
11.2 Special Top Heavy Definitions. The following special definitions shall
apply under this Article XI.
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(a) "Aggregate Employer Contributions" means the sum of all Employer
contributions under this Plan allocated for a Participant to the Plan and
employer contributions and forfeitures allocated for the Participant to all
Related Defined Contribution Plans in the Aggregation Group; provided,
however, that for Plan Years beginning before January 1, 1985, Participant
Contributions under the Plan and employer contributions attributable to
salary reduction or similar arrangement under the Plan and Related Defined
Contribution Plans shall not be included in Aggregate Employer
Contributions, and with respect to Non-Key Employees for Plan Years
beginning after December 31, 1988, Participant Contributions and Matching
Employer Contributions under the Plan and employer contributions
attributable to salary reduction or similar arrangement and matching
contributions (within the meaning of Section 401(m)(4)(A) of the Code)
under the Plan and Related Defined Contribution Plans shall not be included
in Aggregate Employer Contributions.
(b) "Aggregation Group" means the group of plans in a Mandatory
Aggregation Group, if any, that includes the Plan, unless the inclusion of
Related Plans in the Permissive Aggregation Group would prevent the Plan
from being a Top Heavy Plan, in which case "Aggregation Group" means the
group of plans consisting of the Plan and each other Related Plan in a
Permissive Aggregation Group with the Plan.
(1) "Mandatory Aggregation Group" means each plan (considering
the Plan and Related Plans) that, during the Plan Year that contains
the Determination Date or any of the four preceding Plan Years,
(A) had a participant who was a Key Employee, or
(B) was necessary to be considered with a plan in which a
Key Employee participated in order to enable the plan in which
the Key Employee participated to meet the requirements of Section
401(a)(4) or 410 of the Code.
If the Plan is not described in (A) or (B) above, it shall not be
part of a Mandatory Aggregation Group.
(2) "Permissive Aggregation Group" means the group of plans
consisting of (A) the plans, if any, in a Mandatory Aggregation Group
with the Plan, and (B) any other Related Plan, that, when considered
as a part of the Aggregation Group, does not cause the Aggregation
Group to fail to satisfy the requirements of Section 401(a)(4) and
Section 410 of the Code. A Related Plan in (B) of the preceding
sentence may include a simplified employee pension plan, as defined in
Code Section 408(k), and a collectively bargained plan, if when
considered as a part of the Aggregation Group such plan does not cause
the Aggregation Group to fail to satisfy the requirements of Section
401(a)(4) and Section 410 of the Code considering, if the plan is a
multiemployer plan as described in Code Section 414(f) or a multiple
employer plan as described in Code Section 413(c), benefits under the
plan only to the extent provided to
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employees of the employer because service with the employer and, if
the plan is a simplified employee pension plan, only the employer's
contribution to the plan.
(c) "Determination Date" means, with respect to a 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. If the Plan is aggregated with other plans in
the Aggregation Group, the Determination Date for each other plan shall be,
with respect to any plan year, the Determination Date for each such other
plan which falls in the same calendar year as the Determination Date for
the Plan.
(d) "Key Employee" means, for the Plan Year containing the
Determination Date, any person or the beneficiary of any person who is an
Employee or former Employee of an Employer or a Related Company as
determined under Code Section 416(i) and who, at any time during the Plan
Year containing the Determination Date or any of the four (4) preceding
Plan Years (the "Measurement Period"), is a person described in paragraph
(1), (2), (3) or (4), subject to paragraph (5).
(1) An officer of the Employer or Related Company who:
(A) in any Measurement Period, in the case of a Plan Year
beginning after December 31, 1983, is an officer during the Plan
Year and has annual Compensation for the Plan Year in an amount
greater than fifty percent of the amount in effect under Section
415(b)(1)(A) of the Code for the calendar year in which such Plan
Year ends ($125,000 in 1997, as adjusted for cost-of-living
increases in accordance with regulations prescribed by the
Secretary of the Treasury or his delegate pursuant to the
provisions of Section 415(d) of the Code); and
(B) in any Measurement Period, in the case of a Plan Year
beginning on or before December 31, 1983, is an officer during
the Plan Year, regardless of his Compensation (except to the
extent that applicable law, regulations and rulings indicate that
the fifty percent (50%) requirement set forth in subparagraph (A)
above is applicable).
No more than a total of fifty (50) persons (or, if lesser, the greater
of three (3) persons or ten percent (10%) of all persons or
beneficiaries of persons who are employees or former employees) shall
be treated as Key Employees under this paragraph (1) for any
Measurement Period. For purposes of determining the number of officers
taken into account hereunder, employees described in Section
2.26(c)(1) through (6) shall be excluded. In the case of an Employer
or Related Company which is not a corporation:
(C) in any Measurement Period, in the case of a Plan Year
beginning on or before February 28, 1985 no persons shall be
treated as Key Employees under this paragraph (1); and
(D) in any Measurement Period, in the case of a Plan Year
beginning after February 28, 1985, the term "officer" as used in
this
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subsection (d) shall include administrative executives as
described in Section 1.416-1(T-13) of the Treasury Regulations.
(2) One (1) of the ten (10) persons who, during a Plan Year in
the Measurement Period:
(A) have annual Compensation from the Employer or a Related
Company for such Plan Year greater than the amount in effect
under Section 415(c)(1)(A) of the Code for the calendar year in
which such Plan Year ends ($30,000 in 1997, as adjusted in
accordance with regulations prescribed by the Secretary of the
Treasury or his delegate pursuant to the provisions of Section
415(d) of the Code); and
(B) own (or are considered as owning within the meaning of
Code Section 318) in such Plan Year, the largest percentage
interests in the Employer or a Related Company, in such Plan
Year, provided that no person shall be treated as a Key Employee
under this paragraph (2) unless he owns more than one-half
percent (1/2%) interest in the Employer or a Related Company.
No more than a total of ten (10) persons or beneficiaries of persons
who are employees or former employees shall be treated as Key
Employees under this paragraph (2) for any Measurement Period.
(3) A person who, for a Plan Year in the Measurement Period, is a
more than five percent (5%) owner (or is considered as owning more
than five percent (5%) within the meaning of Code Section 318) of the
Employer or a Related Company.
(4) A person who, for a Plan Year in the Measurement Period, is a
more than one percent (1%) owner (or is considered as owning more than
one percent (1%) within the meaning of Code Section 318) of the
Employer or a Related Company and has an annual Compensation for such
Plan Year from the Employer and Related Companies of more than
$150,000.
(5) If the number of persons who meet the requirements to be
treated as Key Employees under paragraph (1) or (2) exceed the
limitation on the number of Key Employees to be counted under
paragraph (1) or (2), those persons with the highest annual
Compensation in a Plan Year in the Measurement Period for which the
requirements are met and who are within the limitation on the number
of Key Employees will be treated as Key Employees.
If the requirements of paragraph (1) or (2) are met by a person in
more than one (1) Plan Year in the Measurement Period, each person
will be counted only once under paragraph (1) or (2):
(A) under paragraph (1), the Plan Year in the Measurement
Period in which a person who was an officer and had the highest
annual
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Compensation shall be used to determine whether the person will
be treated as a Key Employee under the preceding sentence;
(B) under paragraph (2), the Plan Year in the Measurement
Period in which the ownership percentage interest is the greatest
shall be used to determine whether the person will be treated as
a Key Employee under the preceding sentence.
Notwithstanding the above provisions of paragraph (5), a person may be
counted in determining the limitation under both paragraphs (1) and
(2). In determining the sum of the Present Value of Accrued Benefits
for Key Employees under subsection (h) of this Section, the Present
Value of Accrued Benefits for any person shall be counted only once.
(e) "Non-Key Employee" means a person with an accrued benefit or
account balance in the Plan or any Related Plan in the Aggregation Group at
any time during the Measurement Period who is not a Key Employee, and any
beneficiary of such a person.
(f) "Present Value of Accrued Benefits" means, for any Plan Year, an
amount equal to the sum of (1), (2) and (3), subject to (4), for each
person who, in the Plan Year containing the Determination Date, was a Key
Employee or a Non-Key Employee.
(1) The value of a person's Accrued Benefit under the Plan and
each Related Defined Contribution Plan in the Aggregation Group,
determined as of the valuation date coincident with or immediately
preceding the Determination Date, adjusted for contributions due as of
the Determination Date, as follows:
(A) in the case of a plan not subject to the minimum funding
requirements of Section 412 of the Code, by including the amount
of any contributions actually made after the valuation date but
on or before the Determination Date, and, in the first plan year
of a plan, by including contributions made after the
Determination Date that are allocated as of a date in that first
plan year; and
(B) in the case of a plan that is subject to the minimum
funding requirements, by including the amount of any
contributions that would be allocated as of a date not later than
the Determination Date, plus adjustments to those amounts as
required under applicable rulings, even though those amounts are
not yet required to be contributed or allocated (e.g., because
they have been waived) and by including the amount of any
contributions actually made (or due to be made) after the
valuation date but before the expiration of the extended payment
period in Section 412(c)(10) of the Code.
(2) The sum of the actuarial present values of a person's accrued
benefits under each Related Defined Benefit Plan in the Aggregation
Group, expressed as a benefit commencing at Normal Retirement Date (or
the person's attained age, if later) determined based on the following
actuarial assumptions:
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(A) Interest rate: 5%; and
(B) Post Retirement Mortality: 1984 Unisex Pension Table;
and determined in accordance with Code Section 416(g), provided,
however, that the accrued benefit of any Non-Key Employee shall be
determined under the method which is used for accrual purposes for all
Related Defined Benefit Plans or, if no single accrual method is used
in all such plans, such accrued benefit shall be determined as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The present value of an
accrued benefit for any person who is employed by an employer
maintaining a plan on the Determination Date is determined as of the
most recent valuation date which is within a 12-month period ending on
the Determination Date, provided however that:
(C) for the first plan year of the plan, the present value
for an employee is determined as if the employee had a
Termination of Employment (i) on the Determination Date or (ii)
on such valuation date but taking into account the estimated
accrued benefit as of the Determination Date; and
(D) for the second and subsequent plan years of the plan,
the accrued benefit taken into account for an employee is not
less than the accrued benefit taken into account for the first
plan year unless the difference is attributable to using an
estimate of the accrued benefit as of the Determination Date for
the first plan year and using the actual accrued benefit as of
the Determination Date for the second plan year.
For purposes of this paragraph (2), the valuation date is the
valuation date used by the plan for computing plan costs for minimum
funding, regardless of whether a valuation is performed that year.
If the plan provides for a nonproportional subsidy as described
in Treasury Regulations Section 1.416-1(T-27), the present value of
accrued benefits shall be determined taking into account the value of
nonproportional subsidized early retirement benefits and
nonproportional subsidized benefit options.
(3) The aggregate value of amounts distributed during the plan
year that includes the Determination Date or any of the four preceding
plan years including amounts distributed under a terminated plan
which, if it had not been terminated, would have been in the
Aggregation Group.
(4) The following rules shall apply in determining the Present
Value of Accrued Benefits:
(A) Amounts attributable to qualified voluntary employee
contributions, as defined in Section 219(e) of the Code, shall be
excluded.
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(B) In computing the Present Value of Accrued Benefits with
respect to rollovers or plan-to-plan transfers, the following
rules shall be applied to determine whether amounts which have
been distributed during the five (5) year period ending on the
Determination Date from or accepted into this Plan or any plan in
the Aggregation Group shall be included in determining the
Present Value of Accrued Benefits:
(i) Unrelated Transfers accepted into the Plan or any
plan in the Aggregation Group after December 31, 1983 shall
not be included.
(ii) Unrelated Transfers accepted on or before December
31, 1983 and all Related Transfers accepted at any time into
the Plan or any plan in the Aggregation Group shall be
included.
(iii) Unrelated Transfers made from the Plan or any
plan in the Aggregation Group shall be included.
(iv) Related Transfers made from the Plan or any plan
in the Aggregation Group shall not be included by the
transferor plan (but shall be counted by the accepting
plan).
(C) The Accrued Benefit of any individual who has not
performed services for an Employer maintaining the Plan at any
time during the five (5) year period ending on the Determination
Date shall be excluded.
(g) "Related Transfer" means a rollover or a plan-to-plan transfer
which is either not initiated by the Employee or is made between plans each
of which is maintained by a Related Company.
(h) A "Top Heavy Aggregation Group" exists in any Plan Year for which,
as of the Determination Date, the sum of the Present Value of Accrued
Benefits for Key Employees under all plans in the Aggregation Group exceeds
sixty percent (60%) of the sum of the Present Value of Accrued Benefits for
all employees under all plans in the Aggregation Group; provided that, for
purposes of determining the sum of the Present Value of Accrued Benefits
for all employees, there shall be excluded the Present Value of Accrued
Benefits of any Non-Key Employee who was a Key Employee for any Plan Year
preceding the Plan Year that contains the Determination Date. For purposes
of applying the special rules herein with respect to a Super Top Heavy
Plan, a Top Heavy Aggregation Group will also constitute a "Super Top Heavy
Aggregation Group" if in any Plan Year as of the Determination Date, the
sum of the Present Value of Accrued Benefits for Key Employees under all
plans in the Aggregation Group exceeds ninety percent (90%) of the sum of
the Present Value of Accrued Benefits for all employees under all plans in
the Aggregation Group.
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(i) "Top Heavy Plan" means the Plan in any Plan Year in which the Plan
is a member of a Top Heavy Aggregation Group, including a Top Heavy
Aggregation Group consisting solely of the Plan. For purposes of applying
the rules herein with respect to a Super Top Heavy Plan, a Top Heavy Plan
will also constitute a "Super Top Heavy Plan" if the Plan in any Plan Year
is a member of a Super Top Heavy Aggregation Group, including a Super Top
Heavy Aggregation Group consisting solely of the Plan.
(j) "Unrelated Transfer" means a rollover or a plan-to-plan transfer
which is both initiated by the Employee and (a) made from a plan maintained
by a Related Company to a plan maintained by an employer which is not a
Related Company or (b) made to a plan maintained by a Related Company from
a plan maintained by an employer which is not a Related Company.
11.3 Special Top Heavy Provisions. For each Plan Year in which the Plan is
a Top Heavy Plan, the following rules shall apply, except that the special
provisions of this Section 11.3 shall not apply with respect to any employee
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 one or more Employers if there is evidence that retirement
benefits were the subject of good faith bargaining between such employee
representative and the Employer or Employers:
(a) Minimum Employer Contributions. In any Plan Year in which the Plan
is a Top Heavy Plan, the Employers shall make additional Employer
Contributions to the Plan as necessary for each Participant who is employed
on the last day of the Plan Year and who is a Non-Key Employee to bring the
amount of his Aggregate Employer Contributions for the Plan Year up to at
least three percent (3%) of his Compensation, or if the Plan is not
required to be included in an Aggregation Group in order to permit a
Related Defined Benefit Plan in the Aggregation Group to satisfy the
requirements of Section 401(a)(4) or Section 410 of the Code, such lesser
amount as is equal to the largest percentage of a Key Employee's
Compensation allocated to the Key Employee as Aggregate Employer
Contributions, unless such Participant is a Participant in a Related
Defined Benefit Plan and receives a minimum benefit thereunder in
accordance with Section 416(c) of the Code in which case such Participant
shall not receive a minimum contribution under this Section 11.3(a).
For purposes of determining whether a Non-Key Employee is a Participant
entitled to have minimum Employer Contributions made on his behalf, a
Non-Key Employee will be treated as a Participant even if he is not
otherwise a Participant (or accrues no benefit) under the Plan because:
(1) he has failed to complete the requisite number of hours of
service (if any) after becoming a Participant in the Plan,
(2) he is excluded from participation in the Plan (or accrues no
benefit) merely because his compensation is less than a stated amount,
or
(3) he is excluded from participation in the Plan (or accrues no
benefit) merely because of a failure to make mandatory employee
contributions
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or, if the Plan is a 401(k) plan, because of a failure to make
elective 401(k) contributions.
(b) Vesting. For each Plan Year in which the Plan is a Top Heavy Plan
and any Plan Year thereafter, the Employer Contribution Account of a
Participant who has at least one Hour of Service after the Plan becomes a
Top Heavy Plan and who has completed three (3) or more years of Vesting
Service shall become fully vested and nonforfeitable.
(c) Limitations. For Plan Years commencing prior to January 1, 2000,
in computing the limitations under Section 5.1 hereof for years in which
the Plan is a Top Heavy Plan, the special rules of Section 416(h) of the
Code shall be applied in accordance with applicable regulations and rulings
so that, in determining the denominator of the Defined Contribution Plan
Fraction and the Defined Benefit Plan Fraction, at each place at which
"1.25" would have been used, "1.00" shall be substituted, and by
substituting $41,500 for $51,875 in the numerator of the transition
fraction described in Section 415(e)(6)(B) of the Code, unless the Plan is
not a Super Top Heavy Plan and the special requirements of Section
416(h)(2) of the Code have been satisfied. This Section 11.3(c) shall not
apply to any Plan Year commencing after December 31, 1999.
(d) Transition Rule for a Top Heavy Plan. Notwithstanding the
provisions of Section 11.3(c), for each Plan Year commencing prior to
January 1, 2000 in which the Plan is a Top Heavy Plan and in which the Plan
does not meet the special requirements of Section 416(h)(2) of the Code in
order to use 1.25 in the denominator of the Defined Contribution Plan
Fraction and the Defined Benefit Plan Fraction, if an Employee was a
participant in one or more defined benefit plans and in one or more defined
contribution plans maintained by the employer before the plans became Top
Heavy Plans and if such Participant's Combined Fraction exceeds 1.00
because of accruals and additions that were made before the plans became
Top Heavy Plans, a factor equal to the lesser of 1.25 or such lesser amount
(but not less than 1.00) as shall be needed to make the Employee's Combined
Fraction equal to 1.00 shall be used in the denominator of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction if there
are no further accruals or annual additions under any Top Heavy Plans until
the Participant's Combined Fraction is not greater than 1.00 when a factor
of 1.00 is used in the denominators of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction. Any provisions herein to the
contrary notwithstanding, for Plan Years commencing prior to January 1,
2000, if the Plan is a Top Heavy Plan and the Plan does not meet the
special requirements of Section 416(h)(2) of the Code in order to use 1.25
in the denominators of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction, there shall be no further Annual Additions for
a Participant whose Combined Fraction is greater than 1.00 when a factor of
1.00 is used in the denominator of the Defined Benefit Plan Fraction and
the Defined Contribution Plan Fraction, until such time as the
Participant's Combined Fraction is not greater than 1.00. This Section
11.3(d) shall not apply to any Plan Year commencing after December 31,
1997.
(e) Transition Rule for a Super Top Heavy Plan. Notwithstanding the
provisions of Sections 11.3(c) and 11.3(d), for each Plan Year commencing
prior to
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January 1, 2000 in which the Plan is a Super Top Heavy Plan, (1) if an
Employee was a participant in one or more defined benefit plans and in one
or more defined contribution plans maintained by the employer before the
plans became Super Top Heavy Plans, and (2) if such Participant's Combined
Fraction exceeds 1.00 because of accruals and additions that were made
before the plans became Super Top Heavy Plans and if immediately before the
plans became Super Top Heavy Plans the Combined Fraction as then computed
did not exceed 1.00, then a factor equal to the lesser of 1.25 or such
lesser amount (but not less than 1.00) as shall be needed to make the
Employee's Combined Fraction equal to 1.00 shall be used in the denominator
of the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction if there are no further accruals or annual additions under any
Super Top Heavy Plans until the Participant's Combined Fraction is not
greater than 1.00 when a factor of 1.00 is used in the denominators of the
Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction.
Any provisions herein to the contrary notwithstanding, for Plan Years
commencing prior to January 1, 2000, if the Plan is a Super Top Heavy Plan,
there shall be no further Annual Additions for a Participant whose Combined
Fraction is greater than 1.00 when a factor of 1.00 is used in the
denominator of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction until the Participant's Combined Fraction is not
greater than 1.00. This Section 11.3(e) shall not apply to any Plan Year
commencing after December 31, 1999.
(f) Terminated Plan. If the Plan becomes a Top Heavy Plan after it has
formally been terminated, has ceased contributions and has been or is
distributing all plan assets to participants and their beneficiaries as
soon as administratively feasible or if a terminated plan has distributed
all benefits of participants and their beneficiaries, the provisions of
Section 11.3 shall not apply to the Plan.
(g) Frozen Plans. If the Plan becomes a Top Heavy Plan after
contributions have ceased under the Plan but all assets have not been
distributed to participants or their beneficiaries, the provisions of
Section 11.3 shall apply to the Plan.
ARTICLE XII
Miscellaneous Provisions
12.1 Employer Joinder. Any Related Company may by resolution of such
Related Company's board of directors, with the approval of the Board of
Directors and subject to such terms and conditions as the Board of Directors may
prescribe, adopt the Plan and Trust Agreement.
12.2 Plan Merger. The Plan shall not merge or consolidate with, or transfer
any assets or liabilities to any other plan, unless each Participant would
receive a benefit immediately after the merger, consolidation or transfer (if
the Plan were then terminated) which is equal to or greater than the benefit to
which he would have been entitled immediately before the merger, consolidation,
or transfer (if the Plan were then terminated).
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12.3 Non-Alienation of Benefits.
(a) In General. No benefit payable at any time under this Plan shall
be subject in any manner to alienation, sale, transfer, assignment, pledge,
attachment, or other legal processes, or encumbrance of any kind, other
than federal tax levies and judgements which are enforceable under federal
law. Any attempt to alienate, sell, transfer, assign, pledge or otherwise
encumber any such benefits, whether currently or thereafter payable, shall
be void. No benefit, nor any fund which may be established for the payment
of such benefits, shall, in any manner, be liable for or subject to the
debts or liabilities of any person entitled to such benefits.
(b) Exception for Certain Domestic Relations Orders. Notwithstanding
Section 12.3(a), the Trustee
(1) shall comply with an order entered on or after January 1,
1985, determined by the Committee to be a Qualified Domestic Relations
Order as provided in Section 12.4,
(2) shall comply with a domestic relations order entered before
January 1, 1985, if benefits are already being paid under such order,
and
(3) may treat an order entered before January 1, 1985, as a
Qualified Domestic Relations Order even if it does not meet the
requirements of Section 12.4.
12.4 Qualified Domestic Relations Order.
(a) "Qualified Domestic Relations Order" means any judgment, decree,
or order (including approval of a property settlement agreement):
(1) which is made pursuant to a state domestic relations law
(including a community property law),
(2) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse,
child, or other dependent of a Participant,
(3) which creates or recognizes the existence of an alternate
payee's right to receive all or a portion of the Participant's Accrued
Benefit under the Plan, and
(4) with respect to which the requirements of paragraphs (b) and
(c) are met.
(b) Information Required in a Qualified Domestic Relations Order. A
domestic relations order can be a Qualified Domestic Relations Order only
if such order clearly specifies:
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(1) the name and the last known mailing address, if any, of the
Participant and the name and mailing address of each alternate payee
covered by the order,
(2) the amount or percentage of the Participant's Accrued Benefit
to be paid by the Plan to each such alternate payee, or the manner in
which such amount or percentage is to be determined,
(3) the number of payments or period to which such order applies,
and
(4) each Plan to which such order applies.
(c) Provisions Prohibited in a Qualified Domestic Relations Order. A
domestic relations order can be a Qualified Domestic Relations Order only
if such order does not:
(1) require the Plan to provide any type or form of benefit, or
any option not otherwise provided under the Plan,
(2) require the Plan to provide increased benefits (determined on
the basis of actuarial value), or
(3) require the payment of benefits to an alternate payee which
are required to be paid to another alternate payee under another order
previously determined to be a Qualified Domestic Relations Order.
(d) Nondisqualifying Provisions. A domestic relations order shall not
be treated as failing to meet the requirements of Section 12.4(c)(1) solely
because such order requires that payment of benefits be made to an
alternate payee:
(1) in the case of any payment before a Participant has had a
Termination of Employment, on or after the earlier of:
(A) the date on which the Participant is entitled to
received benefits under the Plan, or
(B) the later of
(i) the date the Participant attains age 50, or
(ii) the earliest date on which the Participant could
begin receiving benefits under the Plan if the Participant
had a Termination of Employment, and
(2) as if the Participant had retired on the date on which such
payment is to begin under such order, and
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(3) in any form in which such benefits may be paid under the Plan
to the Participant (other than in the form of a qualified joint and
survivor annuity with respect to the alternate payee and his or her
subsequent spouse).
(e) Treatment of Former Spouse as the Participant's Spouse. To the
extent provided in any Qualified Domestic Relations Order, the former
spouse of a Participant shall be treated as the surviving spouse of such
Participant for purposes of consenting to the naming of another Beneficiary
to the extent provided in Sections 7.3 and 7.6. An alternate Payee shall be
considered a Beneficiary under the terms of this Plan until the alternate
payee's benefits are distributed.
(f) Separate Accounting of Amounts Payable Pursuant to a Qualified
Domestic Relations Order. In the case of any domestic relations order
received by the Plan, the Administrative Committee shall separately account
for the amounts payable under the domestic relations order. If it is
determined that the order is not a Qualified Domestic Relations Order, the
amounts separately accounted for during such determination shall no longer
be accounted for separately.
12.5 Unclaimed Amounts.
Unclaimed amounts shall consist of the amounts of the Accounts of a
retired, deceased or terminated Participant which cannot be distributed because
of the Administrative Committee's inability, after a reasonable search, to
locate a Participant or his Beneficiary within a period of two (2) years after
the payment of benefits becomes due in accordance with Section 7.5. Unclaimed
amounts for a Plan Year shall become a Forfeiture and shall be applied in
accordance with Section 4.10(e) as of the close of the Plan Year in which such
two-year period shall end. If an unclaimed amount is subsequently properly
claimed by the Participant or the Participant's Beneficiary, said amount shall
be paid to such Participant or Beneficiary out of Forfeitures for the Plan Year
in which such benefits are properly claimed and to the extent that Forfeitures
for such Plan Year are not sufficient, such payments shall be charged ratably
against income or gain of the Trust Fund unless paid by an Employer.
12.6 No Contract of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between any Employer and any Employee or
as creating a right of any Employee to be continued in the employment of any
Employer.
12.7 Reduction for Overpayment. The Administrative Committee shall,
whenever it determines that a person has received benefit payments under this
Plan in excess of the amount to which the person is entitled under the terms of
the Plan, make a reasonable attempt to collect such overpayment from the person.
If the person to whom such overpayments were made does not, within a reasonable
time, make the requested repayment to the Trustee, the overpayment shall be
considered as an advance payment of benefits, if any, and the Administrative
Committee shall direct the Trustee to reduce all future benefits payable to that
person, if any, by the amount of the overpayment.
12.8 Employees' Trust. The Plan and Trust are created for the exclusive
purpose of providing benefits to the Participants in the Plan and their
Beneficiaries and defraying reasonable expenses of administering the Plan and
Trust. The Plan and Trust shall be interpreted in a
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<PAGE>
manner consistent with their being a Plan described in Section 401(a) of the
Code and a Trust exempt under Section 501(a) of the Code. At no time shall the
Trust Fund be diverted from the above purpose, except as provided in Section
6.16.
12.9 Source of Benefits. All benefits payable under the Plan shall be paid
or provided solely from the Trust and the Employers assume no liability or
responsibility therefore.
12.10 Indemnification. The Company shall indemnify and hold harmless each
member of the Board of Directors, each member of the Investment Committee, each
member of the Administrative Committee, the Chairman, the Plan Administrator
and, if the Trustees are one or more individuals, the Trustees, and each officer
and employee of an Employer to whom are delegated duties, responsibilities, and
authority with respect to the Plan, from and against all claims, liabilities,
fines and penalties, and all expenses reasonably incurred by or imposed upon him
(including, but not limited to, reasonable attorney fees) which arise as a
result of his actions or failure to act in connection with the operation and
administration of the Plan to the extent lawfully allowable and to the extent
that such claim, liability, fine, penalty, or expense is not paid for by
liability insurance purchased or paid for by the Company. Notwithstanding the
foregoing, the Company shall not indemnify any person for any such amount
incurred through any settlement or compromise of any action unless the Company
consents in writing to such settlement or compromise.
12.11 Company Merger. In the event that any successor corporation to the
Company, by merger, consolidation, purchase or otherwise, shall elect to adopt
the Plan, such successor corporation shall be substituted hereunder for the
Company upon filing in writing with the Trustee its election so to do.
12.12 Gender and Number. Except when the context indicates to the contrary,
when used herein, masculine terms shall be deemed to include the feminine or
neuter, and singular the plural.
12.13 Headings. The headings of articles and sections are included solely
for convenience of reference, and if there is any conflict between such headings
and the text of this Plan, the text shall control.
12.14 Uniform and Non-Discriminatory Application of Provisions. The
provisions of this Plan shall be interpreted and applied in a uniform and
non-discriminatory manner with respect to all Participants, former Participants,
and Beneficiaries.
12.15 Invalidity of Certain Provisions. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof and the Plan shall be construed and enforced
as if such provisions, to the extent invalid or unenforceable, had not been
included.
12.16 Qualified Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with Section 414(u)
of the Code.
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<PAGE>
12.17 Law Governing. The Plan shall be construed and enforced according to
the laws of Delaware other than its laws with respect to choice of law, to the
extent not preempted by ERISA.
Executed this 2nd day of March, 1998.
GENERAL INSTRUMENT CORPORATION
By: /s/ Scott A Crum
------------------------------
Vice President, Administration
and Employee Resources
ATTEST:
/s/ Lee S. Zimmerman
- -----------------------------
Assistant Secretary
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<PAGE>
SCHEDULE A
I. Notwithstanding any provision in the Plan to the contrary, the provisions
of this Part I of Schedule A shall apply to the portion, if any, of a
Transferred Participant's Trust-to-Trust Account which was transferred to
the General Instrument Corporation Savings Trust (the "Old GI Trust") from
the Singer Company Deferred Savings Plan ("The 401(k) Advantage") and
subsequently transferred to the Trust pursuant to Section 1.2.
A. Accounting. The Administrative Committee shall separately account for
the portion of a Participant's Trust-to-Trust Account attributable to
elective deferrals (within the meaning of Section 401(g) of the Code)
and after-tax contributions made under The 401(k) Advantage. Earnings,
gains, loses and expenses shall be credited or charged with respect to
such separately accounted for elective deferrals and after-tax
contributions in accordance with Section 6.6 as if such separately
accounted for amounts were held in separate Accounts.
B. Investment. The portion of a Participant's Trust-to-Trust Account
attributable to The 401(k) Advantage shall be invested by the Trustee
in accordance with the directions of the Investment Committee until
such time as the Investment Committee shall, in its sole discretion,
decide to permit Participants to direct the investment of such portion
of the Participant's Trust-to-Trust Account attributable to The 401(k)
Advantage pursuant to Section 6.11.
C. Withdrawals while Employed. A Participant may not withdraw his
Trust-to-Trust Account attributable to The 401(k) Advantage in
accordance with Section 7.4 except as follows:
- A Participant may withdraw all or any portion of his
Trust-to-Trust Account attributable to after-tax
contributions under The 401(k) Advantage by filing a written
withdrawal request in accordance with Section 7.12.
- A Participant who has attained age 59-1/2 may withdraw no
more frequently than once annually all or any portion of his
Trust-to-Trust Account attributable to The 401(k) Advantage
by filing a written withdrawal request in accordance with
Section 7.12.
- A Participant may withdraw all or any portion of his
Trust-to-Trust Account attributable to The 401(k) Advantage
(excluding earnings credited thereon after December 31, 1988)
on account of a Hardship in accordance with Section 7.4(d) by
filing a written withdrawal request in accordance with
Section 7.12.
D. Distributions upon Termination of Employment or Death. In addition to
the distribution provisions available under Article VII, a Participant
who has had a Termination of Employment or the Beneficiary of a
deceased Participant may elect to receive a distribution from the
portion of the Participant's Trust-to-Trust Account attributable to
The 401(k) Advantage as follows:
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<PAGE>
- The Participant or his Beneficiary may elect to receive a
distribution of the portion of the Trust-to-Trust Account
attributable to after-tax contributions under The 401(k)
Advantage in a lump sum at any time prior to the later of the
Participant's Termination of Employment or Normal Retirement
Date and receive the balance of the Participant's Trust-to-
Trust Account attributable to The 401(k) Advantage at such
time and in such manner as provided in Section 7.2 or 7.3, as
applicable, by filing a request for a distribution in
accordance with Section 7.12.
- The Participant or his Beneficiary may elect to purchase an
annuity contract with all or any portion of the Participant's
Trust-to-Trust Account attributable to The 401(k) Advantage
at such time and in such manner as provided in Section 7.2 or
7.2, as applicable by filing a request for benefits in
accordance with Section 7.12. Any such annuity contract
purchased hereunder shall comply with the requirements of
Sections 401(a)(11) and 417 of the Code.
II. Notwithstanding any provision in the Plan to the contrary, the provisions
of this Part II of Schedule A shall apply to the portion, if any, of a
Transferred Participant's Trust-to-Trust Account which was transferred to
the Old GI Trust from the General Instrument Corporation Payroll Stock
Ownership Plan (the "PAYSOP") and subsequently transferred to the Trust
pursuant to Section 1.2.
A. Investment. The Trust-to-Trust Account of any Participant for whom
there is no valid investment election in effect because of the
Administrative Committee's inability to locate such Participant shall
be invested among the Investment Funds at the discretion of the
Investment Committee until such time as the Participant has been
located and has provided the Administrative Committee with an
investment election in accordance with Section 6.11, or has received a
distribution of his entire Trust-to-Trust Account balance.
B. Withdrawals While Employed. No portion of a Participant's
Trust-to-Trust Account attributable to the PAYSOP may be withdrawn
pursuant to Section 7.4.
C. Distributions Upon Termination of Employment or Death. The portion of
a Participant's Trust-to-Trust Account attributable to the PAYSOP may
be distributed following a Participant's Termination of Employment as
provided in Section 7.2 or 7.3 by filing a written distribution
request in accordance with Section 7.12.
III. Effective September 27, 1995, Next Level Communications ("NLC") adopted the
Old GI Plan for the benefit of its eligible employees and the Next Level
Communications 401(k) Plan (the "NLC Plan") was merged into and became a
part of the Old GI Plan. Notwithstanding any provision of the Plan to the
contrary, the provisions of this Section III of Schedule A shall apply to
the portion of each Transferred Participant's Trust-to-Trust Account which
was transferred to the GI Trust from the NLC Plan and subsequently
transferred to the Trust pursuant to Section 1.2.
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<PAGE>
A. Accounting. The Administrative Committee shall separately account for
the portion of a Participant's Trust-to-Trust Account attributable to
elective deferrals (within the meaning of Section 402(g) of the Code)
and rollover contributions, if any, made under the NLC Plan. Earnings,
gains, losses and expenses shall be credited or charged with respect
to such separately accounted for elective deferrals and rollover
contributions in accordance with Section 6.6 as if such separately
accounted for amounts were held in separate Accounts under the Plan.
B. Investment. Each Participant shall be permitted to direct the
investment of the portion of his Trust-to-Trust Account which is
attributable to the NLC Plan in accordance with the provisions of
Section 6.10 of the Plan.
C. Distributions and Withdrawals. Except as provided below, (i) the
provisions of Article VII applicable to distributions and withdrawals
from a Participant's Participant Contribution Account (including
restrictions on in-service withdrawals) shall apply to the portion of
a Participant's Trust-to-Trust Account attributable to elective
deferrals (within the meaning of Section 402(g) of the Code) made
under the NLC Plan, and (ii) the provisions of Article VII applicable
to distributions and withdrawals from a Participant's Rollover
Contribution Account shall apply to the portion of a Participant's
Trust-to-Trust Account attributable to rollover contributions under
the NLC Plan.
Notwithstanding the foregoing, a Participant who is entitled to
receive a distribution pursuant to Section 7.2 or 7.5 of the Plan may
elect to receive a distribution of the portion of his Trust-to-Trust
Account which is attributable to the NLC Plan in the form of monthly,
quarterly, semi-annual, or annual installments over a period certain
not to exceed the greater of the life expectancy of the Participant or
the joint life expectancies of the Participant and the Participant's
Beneficiary; provided that such period shall not be longer than the
period permitted under the minimum distribution incidental benefit
requirement of Proposed Treasury Regulation ss. 1.401(a)(9)-2.
D. Vesting. The portion of each Participant's Trust Account which is
attributable to the NLC Plan shall be fully vested at all times.
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Exhibit 99.2
FIRST AMENDMENT TO THE
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
The General Instrument Corporation Savings Plan, as amended and
restated effective January 1, 1998 (the "Plan"), is hereby amended as follows
effective July 1, 1999, except as otherwise provided:
I.
Section 2.29 is amended effective January 1, 2000 or such earlier or later
date as determined by the Investment Committee is its sole discretion (the
"Elimination Date") to read as follows:
2.29 "Investment Fund" means each pooled or commingled investment fund
designated by the Investment Committee pursuant to Section 6.7, including a
fund (the "Company Stock Fund") designated for investment in Company Stock
II.
Section 4.1(a)(1)(ii) of the Plan is amended effective July 1, 1999 to read
as follows:
(ii) if the Participant elected a six percent (6%) Matched Participant
Contribution, an Unmatched Participant Contribution in an amount up to a
maximum of six percent (6%) (in increments of one percent (1%)). The
Company's Senior Vice President Administration and Employee Resources may,
by written resolution, increase or decrease the maximum permissible
Unmatched Participant Contribution percentage from time to time.
III.
Section 6.7 is amended effective as of the date of execution of this
Amendment to add the following new paragraph to the end thereof:
Notwithstanding any provision of the Plan to the contrary, the
CommScope Stock Fund and the GSI Stock Fund shall be terminated effective
January 1, 2000 or such earlier or later date as the Investment Committee
may determine (the "Elimination Date"). As soon as practicable after the
Elimination Date, the portion, if any, of each Participant's Account
balance that is invested in the CommScope Stock Fund and the GSI Stock Fund
shall be liquidated and reinvested among the remaining Investment Funds in
accordance with the Participant's investment election under Section 6.10 in
effect as of the Elimination Date. In the event the Participant does not
have an investment election in effect under Section 6.10 as of the
Elimination Date, the proceeds, if
<PAGE>
any, from the liquidation of the Participant's interest in the Comm-Scope
Stock Fund and GSI Stock Fund shall be reinvested in the Investment Fund or
Investment Funds designated by the Investment Committee.
IV.
Section 6.9(c) is amended effective as of the Elimination Date to read as
follows:
(c) Direction of the Portion of the Employer Contribution Account
Attributable to Shares of CommScope Stock and GSI Stock Transferred from
the Old GI Plan. Notwithstanding Section 6.9(a) and subject to the last
paragraph of Section 6.7, a Participant may elect to transfer all or part
of that portion of the Participant's Employer Contribution Account that is
attributable to
(1) Shares of CommScope common stock that were transferred to the
Participant's Employer Contribution Account from the Old GI Plan, and
(2) Shares of GSI common stock that were transferred to the
Participant's Employer Contribution Account from the Old GI Plan
among the Investment Funds in accordance with such rules and procedures as
the Administrative Committee may establish or adopt.
V.
Section 6.9(d) is deleted effective as of the Elimination Date.
VI.
Section 6.10 is amended effective as of the Elimination Date to read as
follows:
6.10 Investment Elections with Regard to Participant Contributions,
Special Section 401(k) Contributions, Rollover Contributions and
Trust-to-Trust Transfers. A Participant may direct the investment of his
Participant Contributions, Special Section 401(k) Contributions, Rollover
Contributions and amounts transferred in Trust-to-Trust Transfers to the
Plan in accordance with such rules and procedures as the Administrative
Committee may establish or adopt. A Participant's investment election made
pursuant to this Section 6.10 shall continue in effect, notwithstanding any
change in the amount of contributions to the Plan until such Participant
shall change his investment election.
- 2 -
<PAGE>
VII.
Section 6.11 is amended effective as of the Elimination Date to read as
follows:
6.11 Investment Elections with Regard to Matched Participant
Contribution Accounts, Unmatched Participant Contribution Accounts,
Rollover Accounts and Trust-to-Trust Accounts. A Participant may transfer
all or any portion of his Matched Participant Contribution Account,
Unmatched Participant Contribution Account, Rollover Contribution Account
and Trust-to-Trust Account balances among the Investment Funds in
accordance with such rules and procedures as the Administrative Committee
may establish or adopt; provided that no portion of the Participant's
Account balances may be transferred to the Company Stock Fund pursuant to
this Section 6.11 unless such Participant was an Eligible Employee at any
time on or after May 1, 1993.
VIII.
Section 6.12 is amended effective as of the Elimination Date to read as
follows:
6.12 Special Provisions for Company Stock Fund. Notwithstanding any
provision of this Article VI to the contrary, if the Special Fiduciary
determines that a Participant's investment election (or failure to file an
investment election) with respect to the Participant's Company Stock Fund
is not "proper" under Section 403(c) of ERISA or appropriate in light of
prudent investment standards (except considerations of diversification),
the Special Fiduciary shall have absolute discretion at any time to require
either the sale or continued holding of all or any portion of the Company
Stock allocated to the Participant's Accounts without regard to the
Participant's investment election (or failure to file an investment
election) with respect to the investment of the Participant's Accounts in
the Company Stock Fund.
IX.
Section 8.10(g) is amended effective as of the Elimination Date to
read as follows:
(g) To appoint and remove, as it deems advisable, one or more Special
Fiduciaries who shall be independent of the Company and who may be the
Trustee, or an investment manager or ancillary trustee appointed in
accordance with the terms of the Trust Agreement.
- 3 -
<PAGE>
X.
Except as set forth herein, the Plan shall remain in full force and
effect.
Executed this 1st of July, 1999
GENERAL INSTRUMENT CORPORATION
By: /s/ Scott A. Crum
Senior Vice President Administration and
Employee Resources
- 4-
Exhibit 99.3
SECOND AMENDMENT TO THE
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
The General Instrument Corporation Savings Plan, as amended and restated
effective January 1, 1998 (the "Plan"), and as subsequently amended, is hereby
amended as follows effective November 1, 1999:
I.
Article I is hereby amended to add a new Section 1.4 to read as follows:
1.4 Withdrawal of Next Level Communications and affiliates from
the Plan and Transfer of Assets and Liabilities to the Next Level
Communications, Inc. Savings Plan. Effective November 1, 1999, Next
Level Communications, Next Level Communications L.P. and Next Level
Communications, Inc. (individually and collectively "Next Level")
shall withdraw from the Savings Plan and Next Level shall cease to be
an Employer hereunder. No employee of Next Level will be considered an
Eligible Employee hereunder on or after November 1, 1999 and no
Employer Contributions shall be made on behalf of any Next Level
employee with respect to Compensation paid on or after November 1,
1999.
On or about November 10, 1999, Next Level Communications, Inc. is
expected to offer its stock for purchase in an initial public offering
(the "IPO"). As a result of the IPO, Next Level is expected to no
longer qualify as a Related Company (other than for purposes of
Section 5.1). Notwithstanding the IPO, a Participant's period of
service with Next Level after the IPO and prior to the transfer of
assets and liabilities to the Next Level Communications, Inc. Savings
Plan (as provided below) shall continue to be taken into account under
the Plan for purposes of determining such Participants' Vesting
Service hereunder. In addition, a Participant who is an employee of
Next Level shall not be considered to have had a Termination of
Employment due to the IPO for any purpose under this Plan (including
for purposes of eligibility for loans and distributions) while such
Participant is an employee of Next Level.
The Account balances of each Transferred Next Level Participant
(as defined below) shall be transferred to the Next Level
Communications, Inc. Savings Plan (the "Next Level Plan") as soon as
reasonably practicable after the IPO but not prior to January 1, 2000,
subject to the receipt of a favorable determination by the Internal
Revenue Service that the Plan is qualified under Sections 401(a) and
401(k) of the Code and that such transfer does not cause a loss of
qualification of the Plan or the Next Level Plan. For purposes of this
Section 1.4, a "Transferred Next Level Participant" means each
Participant who immediately prior to No-
<PAGE>
vember 1, 1999 was (a) an active employee of Next Level or (b) a
former Employee who was employed by Next Level at the time of his
Termination of Employment.
For purposes of applying the nondiscrimination tests in Sections
4.1(c)(2), 4.2(c) and 4.3 for the Plan Year ending December 31, 1999,
the Plan shall disregard the Transferred Next Level Participants as
Active Participants for the Plan Year ending December 31, 1999.
Contributions made on behalf of the Transferred Next Level
Participants during such Plan Year shall be subject to the
nondiscrimination requirements set forth in the Next Level
Communications Saving Plan as if such contributions had been
contributed under that plan.
II.
Except as set forth herein, the Plan shall remain in full force and effect.
Executed this 29th day of October, 1999.
GENERAL INSTRUMENT CORPORATION
By: /s/ Scott A. Crum
---------------------------------
Senior Vice President, Administration and
Employee Resources
- 2 -
Exhibit 99.4
THIRD AMENDMENT TO THE
GENERAL INSTRUMENT CORPORATION SAVINGS PLAN
The General Instrument Corporation Savings Plan, as amended and restated
effective January 1, 1998 (the "Plan"), and as subsequently amended, is hereby
amended as follows; effective as of the Effective Time (as defined in the
Agreement and Plan of Merger by and Among Motorola, Inc., Lucerne Acquisition
Corp. and General Instrument Corporation dated September 14, 1999 ("the Merger
Agreement")):
I.
Subject to and conditioned upon the consummation of the transactions
contemplated by the Merger Agreement, Section 2.11 of the Plan is amended to
read as follows:
2.11 "Company Stock" means (a) prior to February 2, 1998, the common
stock of NextLevel Systems, Inc.; (b) on and after February 2, 1998 and
prior to the Effective Time (as defined in the Agreement and Plan of Merger
by and Among Motorola, Inc., Lucerne Acquisition Corp. and General
Instrument Corporation dated September 14, 1999) (the "Effective Time"),
the common stock of General Instrument Corporation, and (c) on and after
the Effective Time, common stock of Motorola, Inc. which constitutes
qualifying employer securities (as defined in Section 407(d)(5) of ERISA).
II.
Except as set forth herein, the Plan shall remain in full force and effect.
Executed this 29th day of December, 1999.
GENERAL INSTRUMENT CORPORATION
By: /s/ Scott A. Crum
--------------------------------
Senior Vice President, Administration and
Employee Resources
