EXHIBIT 10.6
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BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
401(k) PROFIT SHARING PLAN
As Amended and Restated Effective as of January 1, 2000
(with certain other effective dates as noted herein)
June 2000
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BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
401(k) PROFIT SHARING PLAN
TABLE OF CONTENTS
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DEFINITIONS:...................................................3
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ARTICLE I PARTICIPATION........................................7
ARTICLE II PARTICIPANT DEFERRAL CONTRIBUTIONS..................9
ARTICLE III EMPLOYER MATCHING CONTRIBUTIONS...................12
ARTICLE IV PROFIT SHARING CONTRIBUTIONS.......................15
ARTICLE V ROLLOVER CONTRIBUTIONS; DIRECT TRANSFERS............16
ARTICLE VI CONTRIBUTION LIMITATIONS...........................19
ARTICLE VII INVESTMENT OF FUNDS...............................21
ARTICLE VIII VESTING OF INTEREST..............................27
ARTICLE IX PAYMENTS FROM ACCOUNTS.............................30
ARTICLE X LOANS...............................................36
ARTICLE XI ADMINISTRATION.....................................38
ARTICLE XII TRUSTEE...........................................39
ARTICLE XIII TERMINATION AND AMENDMENT........................40
ARTICLE XIV MISCELLANEOUS.....................................41
ARTICLE XV TOP HEAVY PROVISIONS...............................42
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BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
401(k) PROFIT SHARING PLAN
As Amended and Restated Effective as of January 1, 2000
(with certain other effective dates as noted herein)
The Burlington Coat Factory Warehouse Corporation Employees' Profit Sharing
Plan was originally established by the Board of Directors, effective November 1,
1983, for the exclusive benefit of eligible employees of the Company and their
beneficiaries. The Plan, as renamed, has been amended and restated,
(i) effective as of July 1, 1989 (with certain later effective
dates), to comply with the provisions of the Tax Reform Act of 1986 as well as
certain other legislative and regulatory changes;
(ii) effective as of September 1, 1995, to incorporate a cash or
deferred arrangement qualifying under Code section 401(k);
(iii) effective as of June 29, 1997, (A) to implement certain changes
required by the Small Business Job Protection Act of 1996, (B) to make certain
minor changes to conform to current administrative practice, (C) effective as of
December 1, 1997, to add the Stock Fund as an additional Investment Fund
available to Participants, and (D) effective as of January 1, 1998 to change the
Plan Year to the calendar year; and
(iv) effective as of January 1, 1999 (A) to provide for a 90-days of
service requirement for eligibility under the salary deferral feature of the
Plan, (B) to provide that the amount, if any, of the Employer matching
contribution for any Plan Year is made at the sole discretion of the Company,
(C) to provide that forfeitures of Participants' Company Accounts will be
applied towards future Employer matching contributions, (D) to make certain
minor changes to conform to current administrative practice, (E) to implement,
as of various effective dates, certain additional changes required by the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997 and the
Internal Revenue Service Restructuring and Reform Act of 1998, and (F)
effective as of January 1, 1998, to increase the amount which may be cashed out
without a Participant's consent to $5,000.
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Since the statutory effective dates with respect to the Plan of certain
changes required by the Small Business Job Protection Act of 1996 and the
Taxpayer Relief Act of 1997 precede, it is the intent of the Committee that
certain provisions of the Plan which have been amended pursuant to the amendment
and restatement of the Plan, effective as of January 1, 1999, be retroactively
applied as of dates preceding January 1, 1999. Accordingly, the following
sections of the Plan, as amended and restated, effective as of January 1, 1999,
of the Plan, are retroactively amended as follows:
(a) Sections 2.4, 3.2, 3.3 and 9.11 are effective as of January 1,
1997; and
(b) the provisions of Sections 9.5 and 9.7 concerning the cash-out
of a Participant's benefit without the consent of the
Participant are effective as of January 1, 1998.
The purpose of this amendment and restatement of the Plan, effective as of
January 1, 2000 (with certain other effective dates as noted herein), is:
(i) to amend the Employer Matching Contributions provisions to
conform with the safe harbor provisions of Code section 401(k)(12),
(ii) effective January 1, 2001, to provide for a one Year of Service
requirement for eligibility to make deferral contributions, and
(iii) effective January 1, 2001, to provide that forfeitures of a
Participant's Profit Sharing Account and Prior Plan Account shall be applied
toward future Employer matching contributions under Section 3.1 in such manner
as determined by the Committee.
Except as otherwise expressly provided, the provisions of the Plan, as set
forth in this document and as may be amended from time to time, establish the
rights and obligations with respect to Participants on and after the Effective
Date. Rights and obligations under the Plan with respect to any Employee who
terminated employment with the Employer for any reason prior to the Effective
Date shall be determined in accordance with the provisions of the Plan as in
effect on the date of such termination.
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Definitions:
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The following words and phrases shall have the meanings provided
below, except as otherwise required by the context. As used in the Plan, the
masculine pronoun shall be deemed to include the feminine, and the singular
number, the plural, unless a different meaning is clearly indicated by the
context.
"Accounts" means the Profit Sharing Account, Company Account, Deferral
Account, Rollover Account, Transfer Account and Prior Plan Account, as
applicable, maintained for a Participant or inactive Participant (as
defined in Section 1.4).
"Affiliate" means the Company and any corporation which is a member of
a controlled group of corporations (as defined in Code section 414(b))
which includes the Company, or any trade or business (whether or not
incorporated) which is under common control (within the meaning of Code
section 414(c)) with the Company.
"Allocation Date" means the date as soon as practicable after each
Valuation Date on which income, gains and profits are credited to, and
losses and expenses are debited from, a Participant's Prior Plan Account.
"Board of Directors" means the Board of Directors of the Company.
"Break in Service" means a Plan Year during which a Participant fails
to complete at least 501 Hours of Service. For purposes of determining
whether a Break in Service has occurred, a Participant who is absent from
employment because of a Leave of Absence, pregnancy, the birth of the
Participant's child, the placement of a child with the Participant for
adoption, or the need to care for such child during the period immediately
following such birth or placement shall be given credit for each Hour of
Service which otherwise would normally have been credited to such
Participant but for such absence. If the Committee is unable to determine
the number of such hours, eight Hours of Service shall be credited per day
of absence. No more than 501 Hours of Service shall be credited to a
Participant under this paragraph because of such Leave of Absence,
pregnancy or placement. Hours of Service shall not be credited to a
Participant under this paragraph unless such Participant furnishes to the
Committee such timely information as the Committee may require to establish
that the absence from employment is for reasons described above and to
establish the number of days for which there was such an absence. Hours of
Service credited under this paragraph shall be credited only for the Plan
Year in which the absence begins, if the Participant would be prevented
from incurring a Break in Service in such Plan Year solely because the
period of absence is treated as Hours of Service or, in any other case, in
the immediately following Plan Year.
"Code" means the Internal Revenue Code of 1986, as it may be amended
from time to time, and the regulations and rulings promulgated thereunder.
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"Committee" means the committee appointed by the Board of Directors
pursuant to Section 11.1.
"Company" means Burlington Coat Factory Warehouse Corporation, or any
successor entity.
"Company Account" means the separate account maintained for a
Participant to which Employer matching contributions and related earnings
are credited under ARTICLE III. The Committee shall establish separate
subaccounts to reflect the portion of a Participant's Company Account which
is attributable to Employer matching contributions made for Plan Years
commencing before January 1, 2000 and for Plan Years commencing after
December 31, 1999.
"Compensation" means the total annual wages and salary (not in excess
of $170,000, as may be adjusted by the Secretary of the Treasury from time
to time) of an Employee from the Employer, but excluding other
contributions to this Plan or contributions to other employee benefit plans
of the Employer.
"Deferral Account" means the separate account maintained for a
Participant to which a Participant's deferral contributions and related
earnings are credited under ARTICLE II.
"Effective Date" means January 1, 2000, the effective date of this
amendment and restatement of the Plan.
"Eligible Employee" means each Employee who meets the eligibility
requirements for Plan participation under ARTICLE I. Notwithstanding the
foregoing, for purposes of Sections 2.4 and 2.5, an Eligible Employee
includes an Employee whose eligibility to make contributions to the Plan
has been suspended because of a hardship withdrawal pursuant to Section
9.9.
"Employee" means an individual in the regular employment of the
Employer, but excluding a non-resident alien with no U.S. - source income,
and an employee covered by a collective bargaining unit whose retirement
benefits were the subject of good faith bargaining between the Employer and
the employee's representative representing such unit unless otherwise
agreed upon between such representative and Employer. The term "Employee"
shall also not include any person who performs services for an Employer
under an agreement or arrangement (which may be written, oral and/or
evidenced by the Employer's payroll practice) with the individual or with
another organization that provides the services of the individual to the
Employer, pursuant to which the person is treated as an independent
contractor or is otherwise treated as an employee of an entity other than
the Employer, irrespective of whether the individual is treated as an
employee of the Employer under common law employment principles or pursuant
to the provisions of Code section 414(m), 414(n) or 414(o).
"Employer" means the Company or a Participating Affiliate.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time, and the regulations and rulings
promulgated thereunder.
"Highly Compensated Employee" means (a) any Employee who is a 5% owner
(as defined in Code section 416(i)(1)) at any time during the current year
or the immediately preceding year, or (b) during the year immediately
preceding the current year, had compensation (as defined in Code section
414(q)(4)) from the Employer in excess of $80,000 (as adjusted pursuant to
Code section 415(d), except that the base period for determining any such
adjustment shall be the calendar quarter ending September 30, 1996).
Notwithstanding the foregoing, at the election of the Company, the
determination of Highly Compensated Employees pursuant to (b) above, shall
be limited to those Employees who are in the "top paid group" (as defined
in Code section 414(q)(3)) for such preceding year.
"Hour of Service" means each hour for which an Employee either is
directly or indirectly paid, or entitled to payment by the Employer or an
Affiliate. The number of Hours of Service, and the period to which such
hours shall be credited, will be determined in accordance with Department
of Labor regulations section 2530.200b-2. An hour for which an Employee is
paid at an overtime or premium rate shall be included only as a single
hour. An Employee with respect to whom the Employer or an Affiliate does
not maintain records reflecting the number of hours for which he is paid
shall be credited with 45 Hours of Service for each week or part thereof he
is paid or entitled to be paid by the Employer or an Affiliate.
"Investment Funds" means each of the investment funds as may be
authorized by the Committee from time to time for the investment of Plan
assets.
"Key Employee" means an individual described in Code section
416(i)(1).
"Leave of Absence" means a period of absence from employment because
(i) an Employer grants an Employee a leave of absence for a specified
period of time (not to exceed two years) and such leaves are granted on a
nondiscriminatory basis; (ii) an Employee is on active military duty; or
(iii) the Employee is temporarily laid off by an Employer. Notwithstanding
anything contained in the Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be provided
in accordance with Code section 414(u).
"Normal Retirement Age" means the later of (i) the date a Participant
attains age 65 or (ii) the fifth anniversary of the date the Participant
commenced participation in the Plan.
"Participant" means an Eligible Employee participating in the Plan in
accordance with ARTICLE I.
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"Participating Affiliate" means an Affiliate to which the Board of
Directors has extended the Plan and which adopts the Plan as a
participating employer by action of its board of directors or other
governing body.
"Plan" means the Burlington Coat Factory Warehouse Corporation 401(k)
Profit Sharing Plan, as set forth herein (including any Appendices hereto),
and as it may be amended from time to time.
"Plan Year" means the calendar year.
"Prior Plan" means the Burlington Coat Factory Warehouse Corporation
Employees Profit Sharing Plan, as in effect prior to September 1, 1995.
"Prior Plan Account" means the separate account maintained for a
Participant in which the Participant's account balance under the Prior Plan
and related earnings are credited. The Trustee may establish one or more
subaccounts within a Participant's Prior Plan Account to reflect the
portion of such Prior Plan Account which is invested in one or more of the
Investment Funds, in accordance with Section 7.3.
"Profit Sharing Account" means the separate account maintained for a
Participant in which the Participant's profit sharing contributions and
related earnings are credited under ARTICLE IV.
"Rollover Account" means the separate account maintained for a
Participant to which the Participant's rollover contributions and related
earnings are credited under Section 5.1.
"Stock" means the Company's common stock, par value $1.00 per share.
"Stock Fund" means the Investment Fund which is invested in Stock.
"Tender Offer" means any offer to acquire the Stock which is subject
to either section 13(e) or 14(d) of the Securities Exchange Act of 1934, as
amended, and which under the applicable rules and regulations is required
to be the subject of a filing with the Securities and Exchange Commission
on either Schedule 13E-4 or Schedule 14D-9.
"Total Disability" means the incapacity of a Participant, either
mental or physical, resulting in his inability to perform the usual duties
of his employment with his Employer, such incapacity to be deemed to exist
when so declared by the Committee in its judgment and discretion, supported
by the written opinion of at least one physician approved by the Committee.
"Transfer Account" means the separate account maintained for a
Participant to which amounts transferred on behalf of a Participant and
related earnings are credited under Section 5.2.
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"Trust Agreement" means the agreement between the Trustee and the
Company pursuant to which the Trust Fund is established and maintained, as
provided for in ARTICLE XII.
"Trustee" means the trustee under the Trust Agreement.
"Trust Fund" means the trust under the Plan established pursuant to
the Trust Agreement, as provided for in ARTICLE XII.
"Valuation Date" means (i) in the case of the portion of a
Participant's Prior Plan Account which is not Participant-directed pursuant
to Section 7.5(b), the last business day of each calendar month and (ii) in
the case of the portion of a Participant's Accounts which is Participant-
directed, each business day, and, in each case, such other date as may be
determined by the Committee in its sole discretion.
"Year of Service" means a Plan Year during which a Participant
completes at least 1,000 Hours of Service; provided, that (i) for purposes
of determining an Employee's eligibility to participate in (A) the profit
sharing feature of the Plan and (B) effective January 1, 2001, the salary
deferral feature of the Plan, pursuant to ARTICLE I, a Year of Service
shall mean any twelve (12) consecutive month period, beginning on or after
the date of the Employee's employment with an Affiliate, during which he
completes at least 1,000 Hours of Service; and (ii) for purposes of
determining the vesting of a Participant's interest, pursuant to ARTICLE
VIII, (A) an Employee who is credited with at least 1,000 Hours of Service
in both his first twelve (12) consecutive months of employment and the Plan
Year which begins during such twelve (12) month period shall be credited
with two (2) Years of Service at the end of such Plan Year and (B) Years of
Service completed by the Participant prior to his attainment of age
eighteen (18) shall be disregarded.
ARTICLE I
PARTICIPATION
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1.1 Participation in the Plan shall be offered only to Eligible
Employees of the Employer. Each Employee shall become an Eligible Employee (i)
with respect to the salary deferral feature of the Plan immediately following
the attainment of age 21 and the earlier of (A) the completion of 90 days of
continuous employment (during which the Employee completes at least 250 Hours of
Service) or (B) the completion of one Year of Service and (ii) with respect to
the profit sharing feature of the Plan immediately following the attainment of
age 21 and the completion of one Year of Service. Notwithstanding the
foregoing, effective January 1, 2001, an
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Employee shall become an Eligible Employee with respect to the salary deferral
feature of the Plan immediately following the attainment of age 21 and the
completion of one Year of Service. Once an Employee has become an Eligible
Employee, he will continue to be an Eligible Employee until he ceases to be an
Employee.
1.2 Each Eligible Employee on the Effective Date who was a
Participant in the Plan immediately prior to the Effective Date shall continue
as a Participant on the Effective Date. Each other Eligible Employee shall
become a Participant in the Plan upon satisfaction of the requirements of
Section 1.1; provided, however, that an Eligible Employee must also satisfy the
requirements of Section 1.3 to become a Participant with respect to the salary
deferral feature of the Plan.
1.3 At the time an Employee becomes an Eligible Employee, he will be
provided with a written application for participation in the salary deferral
feature of the Plan, as described in ARTICLE II, and an explanation of the Plan.
Each Eligible Employee who files a salary deferral election with the Committee
shall become a Participant with respect to the salary deferral feature of the
Plan as soon as administratively feasible following the date on which his
properly completed application is received by the Committee.
1.4 A Participant who (a) ceases to be an Employee or (b) enters the
military service of the United States, shall be an inactive Participant. Any
interest of such inactive Participant in the Investment Funds shall be allowed
to remain invested in the Trust Fund, subject to ARTICLE IX.
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ARTICLE II
PARTICIPANT DEFERRAL CONTRIBUTIONS
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2.1 Subject to Sections 2.4 and 2.5 and ARTICLE VI, a Participant may
elect to defer prospectively by payroll deduction from 1% to 15% of his
Compensation in 1/2% increments.
2.2 A Participant may change or suspend his deferral contributions at
any time, effective as of the next administratively feasible payroll date (but
in no event later than one month after such Participant requests such a change
or suspension), by timely delivering the appropriate form to the Committee.
2.3 The Employer shall contribute to the Plan, on behalf of each
Participant who elects pursuant to Section 2.1 to defer a percentage of his
Compensation, an amount in cash equal to the amount deferred by the Participant.
All such contributions, together with any related earnings, shall be credited to
the Participant's Deferral Account.
2.4 (a) If the actual deferral percentage (as defined in paragraph
(c) below) of Compensation paid during the Plan Year, or within 2-1/2 months
thereafter attributable to services performed in such Plan Year, for
Participants who are Highly Compensated Employees is more than the amount
permitted under the deferral limitations set forth in paragraph (b) below, the
deferral contributions of such Highly Compensated Employees shall be reduced by
the amount of "excess contributions" (as determined in accordance with Code
section 401(k)(8)(B)). The reduction of the deferral contributions of Highly
Compensated Employees shall be allocated among such Highly Compensated Employees
in the order of the highest dollar amounts of
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deferral contribution until such deferral limitations are satisfied. The
Employer shall attempt to distribute to such Participants any such excess
contributions, and any related earnings, no later than 2-1/2 months following
the Plan Year in which such excess contributions are made. In addition, if the
Employer believes that contributions would be in excess of the deferral
limitations set forth in paragraph (b) below, the Employer may in its sole
discretion suspend, in whole or part, deferral contributions to the Plan made on
behalf of Participants who are Highly Compensated Employees. In such case the
amounts which would ordinarily be deferred in a payroll period shall be paid
directly to such Participants.
(b) The actual deferral percentage for any Plan Year of all
Eligible Employees who are Highly Compensated Employees shall not exceed,
alternatively: (i) 125% of the prior Plan Year's actual deferral percentage for
all Eligible Employees during such prior Plan Year who were not Highly
Compensated Employees; or (ii) 200% of the prior Plan Year's actual deferral
percentage for all Eligible Employees during such prior Plan Year who were not
Highly Compensated Employees; provided, that solely for purposes of clause (ii)
above, the actual deferral percentage for all Eligible Employees who are Highly
Compensated Employees does not exceed the prior Plan Year's actual deferral
percentage for all Eligible Employees during such prior Plan Year who were not
Highly Compensated Employees by more than two percentage points, or such other
amount that the Secretary of the Treasury shall prescribe.
(c) For purposes of this Section 2.4, the actual deferral
percentage for a specified group of Eligible Employees for the applicable Plan
Year shall be the average of the ratios, calculated separately for each Eligible
Employee in such group, of (i) the amount of contributions under all plans of
the Employer which are subject to Code section 401(k) (other than plans which
may not be permissively aggregated) to the Deferral Account and Company
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Account (to the extent taken into account for purposes of the actual deferral
percentage test) made on behalf of each Eligible Employee for such Plan Year to
(ii) the Eligible Employee's Compensation for such Plan Year. For purposes of
determining the actual deferral percentage test, deferral contributions and
Employer matching contributions must be made before the last day of the 12-month
period immediately following the Plan Year to which contributions relate.
(d) If a reduction in the amount of deferral contributions on
behalf of a Participant is required because of the application of paragraph (a)
above, the reduction shall be treated as taxable earnings to the Participant for
the pay period in which the reduction occurs, and the Employer shall withhold
any taxes required by law on such taxable earnings.
(e) If a distribution of excess deferral contributions (and
related earnings) is required because of the application of paragraph (a) above,
the Employer shall withhold any taxes required by law on such distribution.
(f) The provisions of this Section 2.4 shall apply only with
respect to Plan Years commencing prior to the Effective Date.
2.5 Notwithstanding anything contained herein to the contrary, the
maximum amount of contributions credited to the Deferral Account on behalf of a
Participant in any calendar year may not exceed $10,500 (as may be adjusted by
the Secretary of the Treasury to reflect increases in the cost of living), and
any such contributions made to the Deferral Account in excess of such amount (as
adjusted), plus any related earnings on such excess amount, may be distributed
to the Participant no later than April 15 following the close of the calendar
year in which such excess contributions are made.
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ARTICLE III
EMPLOYER MATCHING CONTRIBUTIONS
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3.1 Subject to the provisions of Sections 3.2 and 3.3 and ARTICLE VI,
each Employer shall contribute in cash to the Plan for each Plan Year (i)
commencing prior to the Effective Date, an amount equal to that percentage of
each Participant's deferral contributions, if any, made pursuant to Section 2.1
on behalf of each Participant, as determined by the Company in its sole
discretion; and (ii) commencing on and after the Effective Date, an amount equal
to 100% of the first 3% and 50% of the next 2% of Compensation deferred by a
Participant in a Plan Year; provided, that with respect to Plan Years commencing
prior to January 1, 2000, nothing herein shall obligate the Company to determine
to make any matching contribution for any Plan Year; and provided further, that
the Company may, in its discretion, contribute Stock, valued at its fair market
value, in lieu of cash for all or any part of its contribution, if any, under
this Section 3.1. Employer matching contributions, if any, shall be credited
(i) with respect to Plan Years commencing prior to the Effective Date as soon as
practicable after, and as of, the end of each Plan Year with respect to which
such contribution is to be made to the Company Accounts of Participants who are
in the employ of an Employer on the last day of such Plan Year; (ii) with
respect to the Plan Year commencing on the Effective Date, as soon as
practicable after, and as of, the end of such Plan Year, and (iii) with respect
to Plan Years commencing on or after January 1, 2001, at the time that a
Participant's deferral contribution, made pursuant to Section 2.1 are credited
to the Participant's Deferral Account.
3.2 (a) If the contribution percentage (as defined in paragraph (c)
below) of Compensation for Participants who are Highly Compensated Employees is
more than the
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amount permitted under the special limitations set forth in paragraph (b) below,
the Employer matching contributions of such Highly Compensated Employees shall
be reduced by the amount of "excess aggregate contributions" (as determined in
accordance with Code section 401(m)(6)(B)). The reduction of the Employer
matching contributions of Highly Compensated Employees shall be allocated among
such Highly Compensated Employees in the order of the highest dollar amounts of
Employer matching contributions credited until such special limitations are
satisfied. Any excess Employer matching contributions made to the Trust Fund
(plus any related earnings) shall, to the extent possible, be distributed to
such Participants before the end of the Plan Year following the Plan Year in
which such excess Employer matching contributions are made. In addition, if the
Employer or the Committee determines that Employer matching contributions would
be in excess of the special limitations set forth in paragraph (b) below, the
Employer may, in its sole discretion, suspend, in whole or in part, deferral
contributions to the Plan made on behalf of Participants who are Highly
Compensated Employees and, therefore, related Employer matching contributions
with respect to such Participants (in which case the deferral contributions that
would ordinarily be contributed to the Trust Fund on such Participants' behalf
in a payroll period shall be paid directly to such Participants).
(b) The contribution percentage for any Plan Year of all
Eligible Employees who are Highly Compensated Employees shall not exceed,
alternatively: (i) 125% of the prior Plan Year's contribution percentage for all
Eligible Employees during such prior Plan Year who were not Highly Compensated
Employees, or (ii) 200% of the prior Plan Year's contribution percentage for all
Eligible Employees during such prior Plan Year who were not
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Highly Compensated Employees; provided, that solely for purposes of clause (ii)
above, the contribution percentage for all Eligible Employees who are Highly
Compensated Employees does not exceed the prior Plan Year's contribution
percentage for all Eligible Employees during such prior Plan Year who were not
Highly Compensated Employees by more than two percentage points, or such other
amount that the Secretary of the Treasury shall prescribe.
(c) For purposes of this Section 3.2, the contribution
percentage for a specified group of Eligible Employees for the applicable Plan
Year shall be the average of the ratios, calculated separately for each Eligible
Employee in such group, of (i) the amount of Employer matching contributions
under all plans of the Employer which are subject to Code section 401(m) (other
than plans which may not be permissively aggregated) made on behalf of each
Eligible Employee for such Plan Year (to the extent not taken into account for
purposes of the actual deferral percentage test) to (ii) the Eligible Employee's
Compensation for such Plan Year. For purposes of determining the contribution
percentage test, Employer matching contributions will be considered made for a
Plan Year if made before the last day of the 12-month period immediately
following the Plan Year to which contributions relate.
(d) If a distribution of excess Employer matching contributions
(and related earnings) is required because of the application of (a) above, the
Employer shall withhold any taxes required by law on such distribution.
(e) In the event an active Participant is required to reduce his
deferral contributions to the Plan as a result of the application of the
provisions of Section 2.4(a), the
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Employer matching contribution under Section 3.1(a) made on behalf of the
Participant for the remainder of the Plan Year shall be applied to the reduced
amount of deferral contributions.
(f) If both the actual deferral percentage and the actual
contribution percentage of Highly Compensated Employees exceeds 1.25 multiplied
by the actual deferral percentage and contribution percentage of the non-Highly
Compensated Employees, multiple use will occur. In the event of multiple use,
if one or more Highly Compensated Employees participate in a plan(s) subject to
both the actual deferral percentage and contribution percentage tests and the
sum of the two percentages of those Highly Compensated Employees subject to
either or both tests exceeds the "aggregate limit," then the average
contribution percentage of those Highly Compensated Employees who also
participate in a salary deferral arrangement will be reduced (beginning with the
Highly Compensated Employee whose dollar amount of contribution is the highest)
so that the limit is not exceeded. For the purposes of this Section, "aggregate
limit" shall mean the sum of (i) 125% of the greater of the actual deferral
percentage or the average contribution percentage for non-Highly Compensated
Employees for the Plan Year and (ii) the lesser of 200% of, or two percentage
points plus, the smaller of such actual deferral percentage or average
contribution percentage.
(g) The provisions of this Section 3.2 shall apply only with respect
to Plan Years commencing prior to the Effective Date.
ARTICLE IV
PROFIT SHARING CONTRIBUTIONS
----------------------------
4.1 Subject to ARTICLE VI, the Company shall contribute to the Plan
for each Plan Year such amount in cash as shall be authorized by the Board of
Directors in its sole discretion.
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4.2 The amount contributed for any Plan Year shall be allocated
proportionately among the Profit Sharing Accounts of Eligible Employees who
completed a Year of Service during, and are employed on the last day of, such
Plan Year. The Profit Sharing Account of each Eligible Employee shall be
credited with a proportionate amount of the contribution for such Plan Year
equal to the proportion that his Compensation for such Plan Year bears to the
total Compensation of all Eligible Employees who are eligible to share in the
Company's profit sharing contribution for such Plan Year.
ARTICLE V
ROLLOVER CONTRIBUTIONS; DIRECT TRANSFERS
----------------------------------------
5.1 Subject to the provisions of the Plan and to rules of uniform
application to be promulgated by the Committee, an Eligible Employee, or
Employee who is not yet an Eligible Employee, may make a contribution to the
Plan in cash which qualifies as a "rollover amount," "rollover contribution," or
"eligible rollover distribution" under Code section 403(a)(4), 408(d)(3) or
402(f)(2)(A), respectively. An Employee who wishes to make such a contribution
shall timely file with the Committee a written notice requesting approval for
such contribution, affirming that his contribution qualifies as a rollover
amount, rollover contribution or eligible rollover distribution. Investment of
such contribution, as between or among the Investment Funds, as applicable,
shall be as directed by the Employee in accordance with the provisions of
Sections 7.3 and 7.4. In addition to the written notice required under this
Section 5.1, the Committee may require documentation from the Employee, or the
applicable trustee, plan sponsor, custodian or other appropriate person in the
form of a statement from the plan administrator of the plan from which the
amount sought to be rolled over was distributed that
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such plan has received a favorable determination letter from the Internal
Revenue Service, as evidence of the contribution being qualified as a rollover
amount, rollover contribution or eligible rollover distribution, and until such
written notice and documentary evidence satisfactory to the Committee have been
so provided, the Committee shall not approve such contribution to the Plan. The
Committee shall be fully protected in relying on such written and documentary
evidence presented by or on behalf of the Employee. Contributions made by an
Employee pursuant to this Section 5.1 shall be credited to the Employee's
Rollover Account.
5.2 Subject to the provisions of the Plan and to rules of uniform
application to be promulgated by the Committee, and in addition to deferral
contributions or rollover contributions to the Plan in accordance with ARTICLE
II and Section 5.1, an Eligible Employee, or Employee who has not yet become an
Eligible Employee, may have transferred directly to the Plan on his behalf his
accrued benefit in another retirement plan qualified under Code section 401(a)
(provided such plan is not described in Code section 401(a)(11)(B)). An
Employee who wishes to have such an amount transferred shall timely file with
the Committee a written notice requesting approval for such transfer, affirming
that the transfer is from a tax-qualified plan. Such transfer shall be effected
directly from the transferor plan without distribution to the Employee, as soon
as practicable after receipt of such notice and approval by the Committee.
Investment of such transferred amount, as between or among the Investment Funds,
as applicable, shall be as directed by the Employee in accordance with the
provisions of Sections 7.3 and 7.4. In addition to the written notice required
under this Section 5.2, the Committee may require such further documentation
from the Employee, or the applicable trustee, plan sponsor, custodian or other
appropriate person, as evidence of the transfer being from a plan qualified
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under Code section 401(a), and until such written notice and documentary
evidence satisfactory to the Committee have been so provided, the Committee
shall not approve such transfer to the Plan. The Committee shall be fully
protected in relying on such written and documentary evidence presented by or on
behalf of the Employee. Transfers made by the Employee pursuant to this Section
5.2 shall be credited to the Employee's Transfer Account.
5.3 Upon the occurrence of an event of distribution as described in
Section 9.1, and notwithstanding any other provisions of the Plan to the
contrary that would otherwise limit a distributee's election under this Section
5.3, a distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this Section 5.3, the following definitions apply:
"Eligible rollover distribution" is any distribution of all or any
portion of the balance to the credit of the distributee, except that
an eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Code section 401(a)(9); any
hardship distribution described in Code section 401(k)(2)(B)(i)(IV);
and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
"Eligible retirement plan" is an individual retirement account
described in Code section 408(a), an individual retirement annuity
described in Code section 408(b), an annuity plan described in Code
section 403(a), or a qualified trust described in Code section 401(a),
that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
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"Distributee" includes an Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined
in Code section 414(p), are distributees with regard to the interest
of the spouse or former spouse.
"Direct rollover" is a payment by the Plan to the eligible retirement
plan specified by the distributee.
ARTICLE VI
CONTRIBUTION LIMITATIONS
------------------------
6.1 (a) Any provision of the Plan to the contrary notwithstanding,
no annual additions to a Participant's Accounts will be made in any Plan Year in
excess of the lesser of $30,000 (as adjusted from time to time by the Secretary
of the Treasury) or 25% of the Participant's "compensation" (within the meaning
of Code section 415(c)(3)).
(b) Any provision of the Plan to the contrary notwithstanding,
in the case of a Participant who is a participant in a defined benefit plan of
the Company, his maximum annual additions shall not exceed the amount which will
result in a defined contribution plan fraction which when added to the defined
benefit plan fraction of such Participant will exceed 1.0 for any Plan Year.
Except as may otherwise be required by law, this Section 6.1(b) shall no longer
apply after December 31, 1999.
(c) For purposes of applying this Section 6.1, all defined
benefit plans of the Company and any Affiliates (as determined in accordance
with Code section 415(h)), and all defined contribution plans of the Company and
any Affiliates (as determined in accordance with Code section 415(h)), including
the Plan, shall be combined or aggregated and the
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maximum benefit or annual additions limitation shall be determined on the basis
of a Participant's annual additions and benefits under all such plans.
(d) For purposes of this Section 6.1, (i) annual additions
means, for each Plan Year, (A) a Participant's deferral contributions; plus (B)
such Participant's share of Employer matching contributions which are allocated
to a Participant's Company Account; plus (C) such Participant's share of Company
profit sharing contributions (if any); plus (D) any forfeitures allocated to
such Participant's Accounts; (ii) a defined contribution plan means a plan which
provides for an individual account for each participant and for benefits based
solely upon the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which may be allocated to such participants' accounts; (iii) a
defined benefit plan means a plan which is not a defined contribution plan;
provided, however, in the case of a defined benefit plan which provides a
benefit derived from employer contributions which is based partly on the balance
of the separate account of a participant, such plan shall be treated as a
defined contribution plan to the extent benefits are based on the separate
account of a participant and as a defined benefit plan with respect to the
remaining portion of the benefits under the plan; (iv) the defined benefit plan
fraction for a Participant shall be a fraction the numerator of which is the
lesser of (A) the product of 1.25 multiplied by the dollar limitation in effect
for the plan, or (B) the product of 1.4 multiplied by an amount equal to 100% of
the Participant's average compensation for his high three years projected annual
benefit under the plan, if such plan provided the maximum benefit allowed by
law; and (v) the defined contribution plan fraction for a Participant shall be a
fraction the numerator of which is the sum of the annual additions to the
Participant's accounts under a
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defined contribution plan of the Company and Affiliates (as determined in
accordance with Code section 415(h)) and the denominator of which is the sum of
the lesser of the following amounts for such Plan Year and for each prior Plan
Year: (A) the product of 1.25 multiplied by the dollar limitation in effect for
such Plan Year, or (B) the product of 1.4 multiplied by the 25% of Participant's
"compensation" (within the meaning of Code section 415(c)(3)).
(e) If necessary to limit the total annual additions for a
Participant for a Plan Year, the Participant's deferral contributions shall be
repaid to him out of his Deferral Account to the extent necessary to reduce the
annual additions for each Plan Year so that they do not exceed the maximum
limitations pursuant to Section 6.1(a).
ARTICLE VII
INVESTMENT OF FUNDS
-------------------
7.1 The Employer, on a monthly basis or more frequently, will pay
over to the Trustee, or its agent, contributions made to the Plan to be held in
trust and invested as provided herein and in the Trust Agreement.
7.2 The Trust Fund will be invested in the Investment Funds.
7.3 (a) Each Participant's Profit Sharing Account, Company Account,
Deferral Account, Rollover Account, Transfer Account and the Participant-
directed portion of his Prior Plan Account, (collectively, the "Self-Directed
Account") will be invested in one or more of the Investment Funds. Each
Participant will designate the portion (expressed as a percentage in multiples
of 5%) of contributions under the Plan to his Self-Directed Account to be
invested in
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each Investment Fund. Such designation, once made, may be changed at any time.
The Participant may also transfer the amount equivalent to his interest, or any
partial interest (expressed as a percentage in multiples of 5%), in an
Investment Fund from such Investment Fund to another Investment Fund at any
time. Changes will be made by a Participant's direction in writing to the
Committee, or pursuant to a voice response system approved by the Committee, and
will be made effective as soon as possible after receipt of such direction. In
the event that (i) a Participant fails to make a designation, (ii) the Committee
does not receive a Participant's written notice or (iii) no record exists within
the voice response system utilized by the Plan of a Participant's designation of
Investment Funds, the Trustee shall invest any amount it receives with respect
to such Participant in the "Stable Value Fund" and the Committee shall take
reasonable steps to elicit an Investment Fund designation from the Participant.
(b) Notwithstanding Section 7.3(a), (i) no more than 35% of
contributions under the Plan to a Participant's Self-Directed Account may be
invested in the Stock Fund.
(c) Any transfer or investment requested by a Participant
pursuant to Section 7.3(a) that does not satisfy the requirements of Section
7.3(b) shall be null and void to the extent that the implementation of such
transfer or investment would cause the contributions under the Plan to such
Participant's Self-Directed Account invested in the Stock Fund to exceed the 35%
limitation described under Section 7.3(b).
(d) Purchases of Stock made pursuant to a Participant's
designation will be made on the open market or with Stock held in Company's
treasury ("Treasury Stock"), and the Participant's Account will be credited with
the number of whole and fractional shares of
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Stock so purchased (net of any brokerage commissions and fees). Sales of Stock
from the Stock Fund will be made on the open market. Purchases and sales of
Stock on the open market will be reflected at the Trustee's cost, net of any
brokerage commissions and fees, of such purchases and sales. Purchases made
with Treasury Stock will be reflected at the closing sales price for Stock on
the day preceding the day on which (i) a Participant directs the Trustee to
transfer amounts from an Investment Fund to the Stock Fund on his behalf or (ii)
Participant deferral contributions under Article II, Employer matching
contributions under Article III or amounts contributed under Article IV are
contributed to the Plan and invested in the Stock Fund in accordance with a
Participant's investment designation made pursuant to Section 7.3(a) (or if no
Stock is traded on either such day, on the next day on which open market trades
in Stock occur).
7.4 Each Participant shall have an interest in each Investment Fund
in which he has elected to have invested all or any part of his deferral
contributions under Section 2.1, his Employer matching contributions under
Section 3.1, his profit sharing contribution under Section 4.1, his rollover
contributions under Section 5.1, his transfer amounts under Section 5.2, and
the Participant-directed portion of his Prior Plan Account pursuant to Section
7.5(b). Each such Participant's interest at any time in the Investment Funds
shall be equal to the sum of such contributions and transfer amounts, adjusted
from time to time to reflect his proportionate share of the income and losses
realized by such Investment Funds and of the net appreciation or depreciation in
the value of such Investment Funds. The Committee shall maintain accounts to
reflect the interest of each Participant in each Investment Fund including, with
respect to the Stock Fund, a record of the number of shares of Stock allocated
to the Participant's Accounts and the cost basis of each such share of Stock.
As of each Valuation Date, the Committee shall
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ascertain from the Trustee the value of each Investment Fund and shall on such
basis determine the value of the interests of Participants. Any cash dividends
and cash proceeds from any other distributions received with respect to a
Participant's interest in the Stock Fund will be reinvested in additional shares
of Stock. The determinations of the Trustee and the Committee shall be
conclusive. Each Participant will be furnished a statement of his Accounts at
least quarterly.
7.5 (a) Each Participant's Prior Plan Account, if any, will be
invested by the Trustee in its sole discretion and in accordance with the terms
of the Trust Agreement. Each such Participant's Prior Plan Account shall be
credited on each Allocation Date with a proportionate share of all income, gains
or profits earned from the investment of the portion of the Trust Fund
containing the Participant's Prior Plan Account. Each such Participant's Prior
Plan Account shall be debited on each Allocation Date with a proportionate share
of any losses sustained by the Trustee from the investment of the Trust Fund
containing the Participant's Prior Plan Account on other transactions, and of
any expense incurred by the Trustee in the administration of the Prior Plan
Account under the Trust Fund.
(b) The Trustee may, in its discretion and on a uniform and
nondiscriminatory basis, designate that the investment of any portion of the
assets in a Participant's Prior Plan Account shall be governed by the
Participant's designation of Investment Funds pursuant to Section 7.3.
7.6 (a) Before each annual and special meeting of the shareholders
of the Company, and at such other times when shareholder action is required, the
Trustee shall send to each Participant having an investment in the Stock Fund
the proxy or consent solicitation
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materials that are sent to the Company's shareholders of record. Each such
Participant shall have the right to instruct the Trustee confidentially as to
the method of voting the shares of Stock allocated to his Account as of the
record date for determining the shares of Stock that are entitled to vote at the
meeting of shareholders or that are entitled to give or withhold consent to
corporate action. Full and fractional shares of Stock held in the Stock Fund
and allocated to a Participant's Account shall be voted by the Trustee in
accordance with the instructions received from such Participant. The Trustee
shall not vote shares of Stock for which voting instructions are not received
from Participants. Management and others may solicit such Participants' voting
rights under the same proxy rules applicable to all shareholders. The Company
shall ensure that the requisite voting forms, together with all information
distributed to shareholders of the Company in general regarding the exercise of
voting rights, are furnished to the Trustee and by the Trustee to Participants
within a reasonable time before such voting rights are to be exercised with
respect to Stock held in the Trust Fund.
(b) In the event that a Tender Offer is made generally to
shareholders of the Company to purchase Stock, the following procedures shall
apply and the following actions shall be taken with respect to the Stock held in
the Trust Fund:
(i) The Trustee or its authorized delegate shall, in a
timely manner, give to each Participant having, at that time, an
investment in the Stock Fund notice of the terms and conditions
of such Tender Offer.
(ii) Each Participant shall instruct the Trustee, in
accordance with procedures established by the Committee or
Trustee and designed to protect the confidentiality of the
Participant's exercise of the Tender Offer rights under this
Section 7.6(b) in accordance with Department of Labor regulation
section 2550.404(c)-1, to accept or decline such Tender Offer
with respect to all or any portion of the shares of Stock
allocated to the Participant's Account.
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(iii) The response of the Trustee to a Tender Offer, as to
whether the Tender Offer is accepted or rejected, shall be made
in accordance with instructions of the Participants given to the
Trustee on forms provided for that purpose by the Trustee. The
Trustee shall reject the Tender Offer with respect to shares for
which the Trustee does not receive instructions from a
Participant.
(iv) In the event the Trustee is instructed to tender
shares of Stock pursuant to the terms of a Tender Offer but less
than all of the shares of Stock for which the Trustee receives
instructions pursuant to Section 7.6(b)(ii) are accepted for
tender pursuant to such Tender Offer, the Trustee shall tender
the percentage of shares of Stock from each Participant's Account
for which the Trustee received instructions to tender pursuant
to Section 7.6(b)(ii) (rounded to the nearest whole share) which
bears the same ratio as the total shares accepted for tender
bears to the total number of shares for which the Trustee
originally received instructions to tender pursuant to Section
7.6(b)(ii). The proceeds of any sale pursuant to this Section
7.6(b)(iv) shall be allocated to the Accounts from which the
shares were sold. If any Tender Offer is accepted (in whole or
in part) pursuant to this Section 7.6(b), the Trustee shall have
the power to transfer Stock in order to effect such acceptance
with no further direction from the Participant or the Committee.
(c) Each Participant shall have right to instruct the Trustee
confidentially as to whether and how stock options, warrants or other similar
rights relating to Stock allocated to the Participant's Account should be
exercised. The Committee or the Trustee shall establish procedures to notify
timely each such Participant regarding such rights and the terms and conditions
for exercising such rights. If the Trustee fails to receive timely instructions
from the Participant, such rights shall not be exercised.
(d) For purposes of this Section 7.6, references to Participants
include their beneficiaries and, pursuant to Section 9.7, alternate payees for
whom a separate Account has been established pursuant to the terms of a
qualified domestic relations order. References to the Trustee shall include any
independent fiduciary appointed by the Committee pursuant to Department of Labor
regulations section 2550.404c-1 to safeguard the confidentiality of
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Participants' exercise of rights under this Section 7.6 where the Committee has
determined that such an appointment is warranted.
7.7 All transactions involving Stock, including distributions,
purchases and sales, shall be made only in compliance with applicable federal
and state laws, regulations and rules. All such transactions shall also be
subject to all restrictions and limitations imposed by the Company's articles of
incorporation and bylaws as amended from time to time, and by limitations and
restrictions applied by the applicable stock exchange on which shares of Stock
are publicly traded.
ARTICLE VIII
VESTING OF INTEREST
-------------------
8.1 A Participant's interest in his Deferral Account, Rollover
Account and Transfer Account, and in the portion of his Company Account
attributable to Employer matching contributions made for Plan Years commencing
on or after the Effective Date, adjusted for his share of income or losses and
appreciation or depreciation therein, shall be fully vested at all times.
8.2 (a) A Participant's interest in his Profit Sharing Account and
Prior Plan Account, and in the portion of his Company Account attributable to
Employer matching contributions made for Plan Years commencing before the
Effective Date, adjusted for his share of income or losses and appreciation or
depreciation therein, shall become vested in accordance with the following
schedule based on the Participant's Years of Service:
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Years of Service Vested Percentage
---------------- -----------------
less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
(b) Notwithstanding the foregoing, a Participant's interest in
his Profit Sharing Account and Prior Plan Account, and in the portion of his
Company Account attributable to Employer matching contributions made for Plan
Years commencing before the Effective Date, shall become fully and immediately
vested upon the first to occur of the following:
(1) the Participant's reaching Normal
Retirement Age,
(2) the Participant's Total Disability, or
(3) the Participant's death.
(c) For purposes of this Section 8.2, a Participant's Years of
Service shall include his entire Years of Service; provided, however:
(i) in the case of a Participant who was not vested in any
portion of his Profit Sharing Account, Company Account and Prior Plan
Account, his Years of Service shall not include his Years of Service
completed before a Break in Service if the number of consecutive one-
year Breaks in Service equals or exceeds the greater of five or the
aggregate number of Years of Service, whether or not consecutive,
completed before such Break in Service (such aggregate number of Years
of Service shall not include any Years of Service not taken into
account by reason of any prior Break in Service);
(ii) in the case of a Participant who has a Break in
Service of less than 12 months, his Years of Service shall include
both the Years of Service before and after such Break in Service; and
(iii) in the case of a Participant who was a participant in
the Prior Plan, his Years of Service shall include the period of his
service for which he was credited for vesting purposes under the Prior
Plan prior to September 1, 1995.
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8.3 (a) In the event a Participant's employment terminates before
his interests in his Profit Sharing Account and Prior Plan Account become fully
vested, the portion of such Accounts which is not vested shall be forfeited and,
subject to Section 8.5, allocated in the manner described in Section 4.2 to the
Profit Sharing Accounts of the remaining active Participants for the Plan Year
in which such forfeiture occurs; provided, however, that effective July 1, 2000,
such forfeited portion shall be applied as provided in Section 8.3(b).
(b) In the event a Participant's employment terminates before
his interest in his Company Account becomes fully vested, the portion of such
Account which is not vested shall be forfeited and, subject to Section 8.5,
applied towards future Employer matching contributions under Section 3.1 in such
manner as shall be determined by the Committee.
8.4 Notwithstanding the provisions of Section 8.2, in the event the
Plan shall be terminated or partially terminated, or upon a complete
discontinuance of contributions, the interest of an affected Participant in his
Profit Sharing Account, Company Account and Prior Plan Account shall become
fully vested.
8.5 In the case of a former Participant who has received a
distribution of his entire vested benefit under the Plan and forfeited his
nonvested interest in his Accounts by reason of termination of employment for
any reason, and who subsequently becomes a Participant prior to the occurrence
of five consecutive one-year Breaks in Service, he shall be entitled to repay to
the Plan the full amount of such distribution. Upon such repayment, any
interest in such Participant's Accounts which was forfeited at the time of his
termination of employment shall be restored and his right to receive such
interest upon a subsequent termination of employment shall
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be determined in accordance with Section 8.2 based upon his total Years of
Service at that time, if applicable. Such restoration shall be made from
amounts forfeited under Section 8.3(b) in the year in which an Employee's right
to such restoration arises. To the extent that current forfeitures are
insufficient to make such restoration, the Company shall make a special
contribution to the Plan to restore the forfeited amount.
ARTICLE IX
PAYMENTS FROM ACCOUNTS
----------------------
9.1 The entire vested interest of a Participant in his Accounts shall
become payable upon any of the following events:
(a) the Participant's termination of employment on or
after Normal Retirement Age;
(b) the Participant's Total Disability;
(c) the Participant's death;
(d) the Participant's other termination of employment
with the Employer (other than on account of a
transfer of employment to an Affiliate);
(e) on or after the Participant's attainment of age
59-1/2; or
(f) as a hardship withdrawal under Section 9.9.
9.2 A Participant may, prior to termination of his employment with
the Employer, designate a beneficiary to whom distribution of his interest in
the Trust Fund shall be paid in the event of his death prior to the full receipt
of such interest; provided, however, that in
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the event the Participant is married on the date of his death, such beneficiary
shall be deemed to be the Participant's surviving spouse. The Participant may
elect to change or revoke his designated beneficiary at any time; provided,
however, that in the event prior to such change or revocation such beneficiary
is the Participant's surviving spouse, such election shall not be effective
unless such surviving spouse provides written consent which acknowledges the
effect of such election and is witnessed by a Plan representative or a notary
public. The affirmative designation of any beneficiary and any elected change
or revocation thereof by a Participant shall be made on forms provided by the
Committee and shall not in any event be effective unless and until filed in
accordance with Committee procedures. If no designated or deemed beneficiary
survives the Participant or inactive Participant, or if an unmarried Participant
or inactive Participant fails to designate a beneficiary under the Plan, the
amount payable upon the death of the Participant or inactive Participant shall
be paid to his estate.
9.3 Upon termination of employment for any reason, any part of a
Participant's interest in his Accounts that has not vested shall be forfeited
and applied in accordance with Section 8.3, and his active participation under
the Plan will terminate subject to the provisions of Section 9.4. If the amount
of the vested portion of a Participant's Profit Sharing Account, Company Account
and Prior Plan Account at the time of the Participant's termination of
employment is zero, the Participant shall be deemed to have received a
distribution of such zero vested interest in such Accounts.
9.4 Notwithstanding the foregoing provisions of this ARTICLE IX, and
subject to Section 9.10, payments will be made from a Participant's Accounts
only upon the approval and direction of the Committee, at the time and in the
manner determined by the
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Committee in accordance with the provisions of the Plan. When the vested
interest of a Participant becomes payable in accordance with the provisions of
Section 9.1, the Committee shall direct the Trustee to pay from the Trust Fund
an amount equal to the value of such vested interest as determined under
Sections 7.4 and 7.5 (i) in the case of the portion of a Participant's Prior
Plan Account which is not Participant-directed, as of the next Valuation Date
following the event giving rise to the right to payment and (ii) in the case of
the portion of a Participant's Accounts which is Participant-directed, the
Valuation Date immediately preceding the date of payment. Unless the
Participant (or, if applicable, his beneficiary) does not consent to such
payment, pursuant to Section 9.5, any such amount shall be paid to the
Participant (or his beneficiary) no later than the earlier of (i) 60 days after
the close of the Plan Year in which such Participant's employment terminates or
(ii) the date the payment first becomes administratively feasible.
9.5 The amounts payable from the Trust Fund shall be paid as a single
sum; provided, however, that such single sum payment shall not be made without
the consent of the Participant (or, if applicable, his beneficiary) if such
amount exceeds $5,000 (or ever exceeded $5,000 at the time of any prior
distribution); and further provided, that at the election of the Participant
(or, if applicable, his beneficiary) and subject to any restrictions contained
in Section 7.7, the portion of such single sum payment that is attributable to
the Participant's investment in the Stock Fund may be paid in whole shares of
Stock equal in value to all or part of the Participant's interest in the Stock
Fund and any remaining interest in the Stock Fund shall be paid in cash.
Notwithstanding anything contained herein to the contrary but subject to Section
9.11, regardless of the form of payment, all distributions shall comply with
Code section
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401(a)(9), including the minimum distribution incidental death benefit
requirement of Code section 401(a)(9)(G).
9.6 If any person who is entitled to receive a payment from the Plan
shall die prior to such payment, the amount remaining to be paid shall be paid
in a single sum to the beneficiary previously designated by the Participant
whose interest is involved, or, if no such beneficiary survives, to the estate
of the Participant.
9.7 Except as required (i) by a "qualified domestic relations order"
(within the meaning of Code section 414(p)) or (ii) in connection with a
judgment or settlement entered into on or after August 5, 1997, involving the
Plan pursuant to the requirements of Code section 401(a)(13)(C) or as otherwise
required by law, no person shall have the right to assign, alienate, transfer,
hypothecate or otherwise subject to lien his interest in or his benefit under
the Plan, nor shall benefits under the Plan be subject to the claims of any
creditor. Any other provision of the Plan to the contrary notwithstanding, if
the amount payable to an alternate payee under a qualified domestic relations
order is less than or equal to $5,000, such amount shall be paid as soon as
practicable following the qualification of the order. If such amount exceeds
$5,000, it may be paid as soon as practicable following the qualification of the
order if the alternate payee consents thereto and if such order provides for
such payment; otherwise, it may not be payable prior to the Participant's
"earliest retirement age" (within the meaning of Code section 414(p)(4)(B)).
9.8 Subject to Section 10.4, upon written application to the
Committee, in such form and manner as the Committee may prescribe, a Participant
who is also an Employee
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may, on or after attainment of age 59-1/2, make a withdrawal once in each Plan
Year from any or all of his Accounts. The minimum withdrawal a Participant may
make under this Section 9.8 shall be the lesser of $500 or the balance in his
Accounts, as applicable.
9.9 (a) Upon written application of a Participant, the Committee
shall determine whether the Participant is entitled to make a hardship
withdrawal from his Deferral Account (excluding earnings on such Account), from
the vested portion of his Company Account (other than the portion of his Company
Account attributable to Employer matching contributions made for Plan Years
commencing on or after the Effective Date), or from his Profit Sharing Account,
Prior Plan Account, Rollover Account or Transfer Account, as applicable, subject
to the provisions of this Section 9.9. A hardship entitling a Participant to
make a withdrawal will exist if the Committee determines, pursuant to subsection
(b) of this Section 9.9, that the Participant has an immediate and heavy
financial need. A distribution based upon financial hardship cannot exceed the
amount required to meet the immediate and heavy financial need created by the
hardship and not reasonably available from reserves or other resources of the
Participant. The amount of immediate and heavy financial need may include any
amount necessary to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution. The determination of
the existence of financial hardship and the amount required to be distributed to
meet the need created by the hardship shall be made by the Committee, pursuant
to subsection (b) of this Section 9.9, in accordance with uniform and
nondiscriminatory standards. Such withdrawal shall be made in cash upon 30
days' prior written application to the Committee. In no event may the amount of
such hardship withdrawal exceed
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the amount necessary to constitute security for repayment of any outstanding
loan made pursuant to ARTICLE X.
(b) For purposes of this Section 9.9:
(i) A distribution will be made on account of an immediate and
heavy financial need of the Participant if the distribution is on
account of (A) medical expenses described in Code section 213(d)
incurred by the Participant, his spouse, or any dependents (as defined
in Code section 152) or necessary for these persons to obtain medical
care described in Code section 213(d); (B) the purchase (excluding
mortgage payments) of a principal residence for the Participant; (C)
the payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, or
any dependents; (D) the need to prevent the eviction of the
Participant from, or the foreclosure on the mortgage of, the
Participant's principal residence; or (E) other events or conditions
as prescribed or permitted by the Internal Revenue Service through
publication of documents of general applicability;
(ii) A distribution will be necessary to satisfy an immediate
and heavy financial need of a Participant if (A) the distribution is
not in excess of the amount of the immediate and heavy financial need
of the Participant and (B) the Participant has obtained all
distributions, other than hardship withdrawals, and all nontaxable
loans available under the Plan and any other plan maintained by the
Company in which the Participant participates; and
(iii) A Participant who receives a hardship withdrawal in
accordance with this Section (A) shall have contributions to his
Deferral Account (as well as other employee elective contributions
under any other plan of the Employer) suspended for 12 months after
receipt of the hardship withdrawal and (B) the maximum amount of
contributions to his Deferral Account made on behalf of such
Participant under this Plan or any other plan of the Employer in the
tax year following the tax year in which he receives a hardship
withdrawal shall be the applicable amount described in Section 2.5 for
such tax year reduced by the amount of contributions to his Deferral
Account made on behalf of such Participant in the tax year in which he
receives the hardship withdrawal.
9.10 All distributions made under this ARTICLE IX shall be paid to
the Participant, beneficiary or alternate payee with respect to a qualified
domestic relations order, in cash; provided, however, that a Participant,
beneficiary or alternate payee who receives a distribution and who has all or a
portion of his Accounts invested in the Stock Fund may request
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that all or a designated portion of such distribution be made in the form of
whole shares of Stock with the remainder, including any fractional share value,
to be paid in cash.
9.11 Any other provision of the Plan to the contrary notwithstanding,
payment of a benefit under the Plan to a Participant (i) who is a 5-percent
owner (as such term is defined in Code section 416(i)(1)(B)(i)) and any
Participant (other than such a 5-percent owner) who attains age 70-1/2 prior to
January 1, 1999 shall be made, or shall commence, no later than April 1 of the
calendar year following the calendar year in which such Participant attains age
70-1/2 and (ii) who is not a 5-percent owner and who attains age 70-1/2 after
December 31, 1998, shall be made, or shall commence no later than 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) the calendar year in which the
Participant terminates employment with an Employer. Notwithstanding the
foregoing, in the case of a Participant who attains age 70-1/2 during 1998 and
who has not terminated employment with an Employer, such Participant may elect
to defer receiving distributions until April 1 of the calendar year following
the calendar year in which the Participant terminates employment with an
Employer.
ARTICLE X
LOANS
-----
10.1 Upon application to the Committee in writing, or pursuant to a
voice response system approved by the Committee, a Participant shall be
permitted to borrow from his Accounts in accordance with criteria established by
the Committee on a uniform and nondiscriminatory basis. A Participant shall be
permitted to have no more than two loans outstanding at one time. Any such loan
shall be evidenced by a note.
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10.2 The minimum amount that a Participant shall be permitted to
borrow is $500. The maximum aggregate amount of all outstanding loans to a
Participant under this Plan and any other plan of the Employer is the lesser of
(i) $50,000 (reduced by the highest outstanding balance of any prior Plan loan
during the one-year period ending on the day before the date the Plan loan is
made), or (ii) 50% of such Participant's accrued vested balances in his Accounts
(less the value of the Participant's Account invested in the Stock Fund).
10.3 Each loan shall be repaid by the Participant through equal
payroll deductions, on a level amortization basis, commencing with the date of
the loan, over a period of not more than 60 months. Notwithstanding the
preceding sentence, the Committee may permit repayment of a loan over a period
in excess of five, but not in excess of twenty, years when the loan is used to
acquire any dwelling unit which within a reasonable time is to be used as a
primary residence of the Participant. Interest on loans shall be charged at a
reasonable rate, as determined by the Committee on a uniform and
nondiscriminatory basis. Such rate will remain fixed for the term of the loan.
A Participant may prepay the entire balance of his loan at any time without
penalty.
10.4 No distributions pursuant to ARTICLE IX (other than Section 9.9)
shall be made until the outstanding balance of any loan plus interest thereon is
repaid in full.
10.5 If a loan is in default, the Committee shall liquidate all or
any portion of the Participant's collateral account balance as necessary to
discharge the Participant's obligation under the loan agreement before any
amounts are paid to or on behalf of such Participant. In no
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event shall such liquidation occur prior to the time the Participant is entitled
to a distribution under ARTICLE IX. Any of the following events will be
considered a default:
(a) death or Total Disability of the Participant;
(b) termination of the Plan;
(c) termination of employment by the Participant for any
reason; or
(d) failure to make any required payment of loan principal
and interest.
10.6 All loans granted under this ARTICLE X shall be granted in a
uniform and nondiscriminatory manner in accordance with written loan procedures
established by the Committee. To the extent required by law and under such
rules as the Committee shall adopt, loans shall be made available on a
reasonably equivalent basis to any beneficiary or former Employee (i) who
maintains a balance in one of more Accounts under the Plan, and (ii) who is a
party-in-interest with respect to the Plan (within the meaning of ERISA section
3(14)).
10.7 The Company may amend the terms of, or discontinue, the loan
program as it deems appropriate. The Company or the Committee may also restrict
or suspend the making of loans if it determines that the loan program is having
adverse effects on Plan investment earnings or on Participants in general.
ARTICLE XI
ADMINISTRATION
--------------
11.1 The Plan shall be administered by a Committee of not less than
three persons appointed by the Board of Directors. The Company shall be the Plan
Administrator and
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"named fiduciary" (within the meaning of ERISA section 402(a)) and the Committee
shall assume the responsibilities and duties set forth in this ARTICLE XI.
11.2 The Committee shall establish rules for the administration of
the Plan. It shall interpret the Plan in its sole discretion and its
determinations shall be conclusive and binding upon all Participants and their
beneficiaries.
11.3 All expenses attributable to the administration of the Plan and
the expenses of the Trustee shall be paid out of the Trust Fund except to the
extent paid by the Employer.
11.4 The Committee shall have the power to assign any of its
responsibilities to subcommittees or members of the Committee and may designate
one or more subcommittees or other persons to carry out any of its
responsibilities.
11.5 The Committee may employ such agents and such clerical and other
services as it may deem advisable in carrying out the provisions of the Plan,
and may consult with counsel, who may be counsel for the Company.
ARTICLE XII
TRUSTEE
-------
12.1 All assets of the Plan shall be held pursuant to a Trust
Agreement between a Trustee designated by the Board of Directors and the
Company. The Trust Agreement shall provide, among other things, for a Trust
Fund, to be administered by the Trustee, with respect to which all contributions
shall be paid, and the Trustee shall have such rights, powers and duties as the
Board of Directors shall from time to time determine. All assets of the Trust
Fund shall be
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held, invested and reinvested in accordance with the provisions of the Plan and
the Trust Agreement.
12.2 All Employer contributions to the Plan are expressly conditioned
upon being deductible under Code section 404(a). At no time prior to the
satisfaction of all liabilities with respect to Participants and their
beneficiaries shall any part of the assets of the Plan be used for or diverted
to purposes other than for the exclusive benefit of such persons; provided,
however, Employer contributions may be returned to the Employer (a) within one
year after the payment of a contribution, if made by the Employer by reason of a
mistake of fact, or (b) within one year of the disallowance of a deduction, to
the extent a deduction is disallowed for such contribution under Code section
404(a).
ARTICLE XIII
TERMINATION AND AMENDMENT
-------------------------
13.1 The Company expects to continue the Plan indefinitely, but the
continuance of the Plan and the payment of contributions are not assumed as
contractual obligations.
13.2 The Plan may be terminated at any time by adoption of
resolutions by the Board of Directors. If the Plan shall be terminated, the
Trustee shall continue to hold, invest and administer the Trust Fund in
accordance with the provisions of the Trust Agreement and shall make
distributions therefrom in accordance with the provisions of the Plan, as then
in effect, pursuant to instructions filed with the Trustee by the Committee upon
such termination or from time to time thereafter. Upon a complete
discontinuance of contributions, or upon termination or
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partial termination of the Plan, each affected Participant or beneficiary shall
have a nonforfeitable interest in his Accounts in the Plan.
13.3 The Plan may be amended at any time and from time to time,
including retroactively, by adoption of resolutions by the Board of Directors;
provided, however, that no amendment shall reduce the vested percentage of a
Participant's accrued benefit derived from Employer contributions below the
vested percentage thereof on the date such amendment is adopted or becomes
effective, whichever is later; and provided further, that no amendment shall
decrease the accrued benefit of a Participant.
ARTICLE XIV
MISCELLANEOUS
-------------
14.1 Participation or non-participation in the Plan shall have no
effect upon the employment status of any Employee.
14.2 All benefits payable under the Plan shall be paid solely from
the Plan, and the Employer assumes no liability or responsibility with respect
to such payments.
14.3 In the event of any merger or consolidation of the Plan with, or
transfer of any assets or liabilities of the Plan to, any other plan, each
Participant shall be entitled to receive a benefit immediately after such
merger, consolidation, or transfer (computed as if such other plan had then
terminated) which is equal to or greater than the benefit he would have been
entitled to receive immediately before such merger, consolidation, or transfer
(computed as if the Plan had then terminated).
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14.4 The Plan shall be construed and enforced in accordance with the
laws of the State of New Jersey, except to the extent preempted by the laws of
the United States.
ARTICLE XV
TOP HEAVY PROVISIONS
--------------------
The provisions of this ARTICLE XV shall become applicable only under
the circumstances described hereunder.
15.1 For purposes of this ARTICLE XV, the Plan shall be "top heavy"
if, as of the determination date (the last day of the preceding Plan Year), the
present value of the cumulative account balances for Key Employees under the
Plan and all other plans in the "required aggregation group" or "permissive
aggregation group," as appropriate, exceeds 60% of the present value of the
cumulative account balances under all such plans for all Employees determined as
of the applicable "valuation date." For purposes of this ARTICLE XV, (a)
"required aggregation group" means (i) each qualified plan of any Employer in
which at least one Key Employee participates, and (ii) any other qualified plan
of any Employer which enables a plan described in (i) to meet the requirements
of Code section 401(a)(4) or 410, (b) "permissive aggregation group" means
the required aggregation group of plans plus any other plan or plans of any
Employer which, when considered as a group with the required aggregation group,
would continue to satisfy the requirements of Code sections 401(a)(4) and 410,
and (c) "valuation date" means the most recent Valuation Date within a 12-month
period ending on the determination date. The present value of such account
balances shall be computed in accordance with Code section 416(g), and the above
percentage ratio shall be determined by a fraction, the numerator of which is
the sum of the present value of the account balances of Key Employees under the
Plan.
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and all other plans in the aggregation group, and the denominator of which is
the sum of the present value of the account balances under all such plans,
including the Plan, for all Employees. If an individual has not performed any
service for the Employer at any time during the five-year period ending on a
determination date, any accrued benefit of such individual shall not be taken
into account.
15.2 The following provisions shall be applicable only in a Plan Year
with respect to which the Plan becomes top heavy as defined herein and
thereafter to the extent provided herein:
(a) Notwithstanding ARTICLE III, the Employer shall make a
special contribution on behalf of each non-Key Employee who has satisfied the
eligibility requirements of the Plan, whether or not a Participant in the Plan
and who is in service at the end of the Plan Year, with respect to such Plan
Year in an amount which equals the lesser of (i) 3% of his Compensation (as
defined in Code section 414(s)), or, to the extent required by the Code and
regulations) or (ii) the largest percentage of Compensation provided under the
Plan for any Key Employee for such Plan Year without regard to this Section
15.2. Any such special Employer contribution shall be credited to such
Participant's Company Account. Notwithstanding the foregoing provisions
of this Section 15.2(a), if a Participant in the Plan is also a participant in
any defined benefit plan of the Employer, then for each Plan Year with respect
to which the Plan is top heavy, such Participant's accrual of a minimum benefit
under such defined benefit plan in accordance with Code section 416(c)(1) shall
be deemed to satisfy the special Employer contribution requirement of this
Section 15.2(a). Employer contributions resulting from a salary
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reduction election by an Employee or matching contributions shall not be counted
toward meeting the minimum required allocations under this section.
(b) Notwithstanding Article VIII, a Participant's interest in
his Profit Sharing Account, Company Account and Prior Plan Account, adjusted for
his share of income or losses and appreciation or depreciation therein, shall
become vested in accordance with the following schedule based on the
Participant's Years of Service, if the application of such schedule would result
in the Participant having a greater vested percentage in his Profit Sharing
Account, Company Account and Prior Plan Account than he would otherwise have
under the terms of Article VIII of the Plan:
Years of Service Vested Percentage
---------------- -----------------
less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
The minimum allocation required (to the extent not forfeitable under
Code section 416(b)) may not be forfeited under Code section 411(a)(3)(B) or
411(a)(3)(D). If the Plan is no longer top-heavy in a later Plan Year, the
foregoing vesting schedule shall continue to apply with respect to employees
with less than three Years of Service except to the extent their benefits have
already vested by application of such schedule.
(c) Notwithstanding the provisions of Section 6.1, if during any
Plan Year an Employee participates in both a defined contribution plan and a
defined benefit plan maintained by the Company which comprise a "top heavy
group," as defined in Code section
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416(g)(2)(B), the denominators of the defined benefit plan fraction and the
defined contribution plan fraction, as described in Section 6.1(d), shall be
calculated by substituting "1.0" for "1.25" each place it appears in such
Section; provided however, that this Section 15.2(b) shall not apply with
respect to a plan in the top heavy group if (i) such plan would satisfy the
requirements of Code section 416(h)(2)(A) and (ii) the aggregate
accrued benefits and cumulative account balances of Key Employees under all
plans in the top heavy group do not exceed 90% of the aggregate accrued benefits
and cumulative account balances under all such plans for all Employees.
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APPENDIX A
GRANDFATHER PROVISIONS
----------------------
This Appendix A shall apply to a Participant in the Prior Plan with
respect to his Prior Plan Account. Terms in this Appendix A shall have the same
meanings as described in the Plan document, unless the context otherwise clearly
requires.
Upon the retirement of a Participant on or after the date on which
such Participant attains age 65 or the fifth anniversary of the
date on which he commenced participation in the Plan, whichever is
later, such Participant shall be entitled to have his Prior Plan Account
paid in one of the following manners:
(1) Such amounts shall be paid or applied in monthly,
quarterly, semi-annual or annual installments as nearly equal as
practicable, over a fixed reasonable period of time not to exceed the
life expectancy of such Participant, of the joint life expectancy of the
Participant and his designated Beneficiary; or
(2) Such amounts shall be paid in a lump sum; or
(3) Such amounts shall be used to purchase from an insurance
company selected by the Committee, a nontransferable immediate or deferred
annuity contract which shall provide for a fixed number of payments over a
reasonable period of time not to exceed the life expectancy of such Participant
or the joint life expectancy of the Participant and his designated beneficiary
and which shall not require the survival of the Participant or his designated
beneficiary as a condition of payment.
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