FORM 10-Q
<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF
May 31, 2000
For the quarterly period ended
...........................................
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ................... to
....................
0-11631
Commission File Number ..........
JUNO LIGHTING, INC.
.................................................................
.........
(Exact name of registrant as specified in its charter)
Incorporated in Delaware 36-2852993
.................................................................
.........
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1300 South Wolf Road, Des Plaines, Illinois 60017-5065
.................................................................
(Address of principal executive offices) (Zip Code)
847 - 827 - 9880
.................................................................
(Registrant's telephone number, including area code)
.................................................................
.........
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
X
Yes ..... No .....
There were 2,412,126 shares of common stock outstanding as of
June 30, 2000.
<Page 2>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
=====================================
( In Thousands)
May 31, November 30,
ASSETS 2000 1999
------ ---------- -----------
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 8 861 $ 8 632
Accounts receivable, less allowance for
possible losses of $1,388 and $1,382 28 014 26 799
Inventories at lower of cost or market 27 128 29 317
Prepaid expenses and miscellaneous 4 055 4 142
---------- ---------
TOTAL CURRENT ASSETS 68 058 68 890
---------- ----------
PROPERTY, PLANT AND EQUIPMENT,
less accumulated depreciation of
$21,668 and $19,360 47 195 47 802
--------- -------
OTHER ASSETS:
Goodwill and other intangibles, net of
accumulated amortization of
$1,706 and $1,629 3 762 4 123
Deferred financing costs & other, net of
accumulated amortization of $1,156 & $514 9 068 9 676
Miscellaneous 420 143
---------- ----------
TOTAL OTHER ASSETS 13 250 13 942
----------- ---------
$ 128 503 $ 130 634
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 6 854 $ 6 566
Accrued liabilities 15 685 16 272
Current maturities of long-term debt 4 070 3 330
---------- ----------
TOTAL CURRENT LIABILITIES 26 609 26 168
---------- ----------
LONG-TERM DEBT & DEFERRED INCOME TAXES 202 393 208 623
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred Stock, Series A cumulative, $.001 par,
$100 stated value shares authorized 5,000,000;
issued 1,060,000 114 738 110 282
Common stock, $.001 and $.01 par, shares
authorized 45,000,000 issued 2,412,126 2 2
Paid-in-capital 421 421
Accumulated other comprehensive income (684) (530)
Retained earnings <Deficit> (214 976) (214 332)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY <DEFICIT> (100 499) (104 157)
---------- ----------
$ 128 503 $ 130 634
========== ==========
(See Notes To Consolidated Financial Statements)
<Page 3>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===========================================
(In Thousands Except Per
Share Amounts)
Three Months Ended
-------------------------
May 31, May 31,
2000 1999
----------- -----------
(Unaudited) (Unaudited)
NET SALES $ 46 222 $ 45 504
COST OF SALES 23 265 23 477
---------- ----------
Gross profit 22 957 22 027
SELLING, GENERAL AND ADMINISTRATIVE 12 617 11 876
---------- ----------
Operating income 10 340 10 151
---------- ----------
OTHER INCOME (EXPENSE):
Interest expense (5 689) (24)
Interest and divided income 73 1 147
Miscellaneous 33 13
---------- ----------
Total other income (expense) (5 583) 1 136
---------- ----------
INCOME BEFORE TAXES ON INCOME 4 757 11 287
TAXES ON INCOME 1 723 3 981
---------- ----------
NET INCOME 3 034 7 306
LESS: PREFERRED DIVIDENDS 2 250 -
---------- ----------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 784 $ 7 306
========= ==========
NET INCOME PER COMMON SHARE (BASIC AND DILUTED) $ .33 $ .39
===== =====
<PAGE 4>
(See Notes To Consolidated Financial Statements)
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===========================================
(In Thousands Except Per
Share Amounts)
Six Months Ended
--------------------------
May 31, May 31,
2000 1999
----------- -----------
(Unaudited) (Unaudited)
NET SALES $ 85 687 $ 82 781
COST OF SALES 43 512 42 032
----------- -----------
Gross profit 42 175 40 749
SELLING, GENERAL AND ADMINISTRATIVE 24 867 22 672
----------- -----------
Operating income 17 308 18 077
----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (11 413) (62)
Interest and divided income 145 2 270
Miscellaneous 54 187
----------- -----------
Total other income (expense) (11 214) 2 395
----------- -----------
INCOME BEFORE TAXES ON INCOME 6 094 20 472
TAXES ON INCOME 2 282 7 157
----------- -----------
NET INCOME 3 812 13 315
LESS: PREFERRED DIVIDENDS 4 455 -
----------- ----------
NET(LOSS)INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (643) $ 13 315
=========== ==========
NET(LOSS)INCOME PER COMMON SHARE - BASIC $(0.27) $ 0.72
===== =====
NET(LOSS)INCOME PER COMMON SHARE - DILUTED $(0.27) $ 0.71
===== =====
(See Notes To Consolidated Financial Statements)
<Page 5>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF RETAINED
EARNINGS
=====================================================
(In Thousands)
Six Months Ended
May 31, 2000
-----------------
(Unaudited)
RETAINED EARNINGS(DEFICIT), beginning of period $(214 332)
PREFERRED DIVIDEND (4 455)
COMMON STOCK RETIREMENT (1)
NET INCOME, six months ended 3 812
May 31, 2000 ----------
RETAINED EARNINGS (DEFICIT), end of period $(214 976)
==========
(See Notes To Consolidated Financial Statements)
<Page 6>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
====================================
(In Thousands)
Six Months Ended
------------------
May 31, May 31,
2000 1999
------------ -----------
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net income from continuing operations $ 3 812 $ 13 315
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation & amortization 3 058 2 076
Changes in assets and liabilities:
(Increase) in accounts
receivable (1 369) (3 819)
Decrease(Increase) in inventory 2 188 (1 203)
Decrease in prepaid expense 88 1 297
Decrease(Increase) in other assets 35 (950)
(Decrease) in accounts
payable and accrued expenses (300) (335)
Increase (Decrease) in deferred
income taxes 275 186
----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 7 787 10 567
----------- ----------
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Capital expenditures (1 766) (3 133)
Purchases of marketable securities - (63 966)
Sales of marketable securities - 77 666
----------- ----------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (1 766) 10 567
----------- ----------
(Continued on Next Page)
<Page 7>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (CONTINUED)
====================================
(In Thousands)
Six Months Ended
----------------------------
May 31, May 31,
2000 1999
----------- -----------
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Proceeds from exercise of stock
options - 380
Proceeds from bank debt 2 500 -
Dividend paid - (3 720)
Principal payments on long-term debt (8 292) (60)
----------- -----------
NET CASH (USED IN) FINANCING ACTIVITIES (5 792) (3 400)
----------- -----------
NET INCREASE IN CASH 229 17 734
CASH AT BEGINNING OF PERIOD 8 632 10 498
----------- -----------
CASH AT END OF PERIOD $ 8 861 $ 28 232
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 11 477 $ 62
Income taxes 680 7 114
(See Notes To Consolidated Financial Statements)
<Page 8>
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
====================================================
FINANCIAL INFORMATION
The financial information presented in these
consolidated financial
statements is unaudited but, in the opinion of management,
reflects all normal adjustments necessary for the fair
presentation of the Company's financial position, results of its
operations and cash flows. The information in the condensed
consolidated balance sheet as of November 30, 1999 was derived
from the Company's audited consolidated financial statements.
INVENTORIES
Inventories are summarized as follows:
(In Thousands)
May 31, November 30,
2000 1999
------------------------
Finished goods $ 12 727 $14 333
Raw materials 14 401 14 984
------------ -----------
$ 27 128 $29 317
============ ============
LONG-TERM DEBT
The Company has a senior credit facility (the "Credit
Facility")with Bank Of America, N.A., Credit Suisse First Boston and
certain other lenders providing (i) a $90 million term facility consisting of a
(a) $40 million tranche A term loan ("Term Loan A"), and (b) $50 million
tranche Bterm loan ("Term Loan B"), and (ii) a $35 million revolving
credit facility (the "Revolving Credit Facility"). Borrowings under the Credit
Facility bear interest, at the Company's option, at a rate per annum equal to
either the Eurodollar rate (the London interbank offered rate for eurodollar
deposits as adjusted for statutory reserve requirements) or a base rate plus
a varying applicable percentage. At May 31, 2000 the nominal interest
rates for Term Loan A and Term Loan B were 8.60% and 9.10%, respectively.
Term Loan A and Term Loan B are each payable in separate quarterly
installments commencing February 29, 2000. The final maturity of
Term Loan A is November 30, 2005 and the final maturity of Term
Loan B is November 30, 2006. Borrowings under the Revolving
Credit Facility are due on November 30, 2005. In addition, the
Company issued $125 million principal amount of 11-7/8% senior
subordinated notes due July 1, 2009 (the "Notes") to qualified
institutional buyers under a private placement offering pursuant
to Rule 144A and Regulation S of the Securities Act, resulting in
approximately $120.4 million in proceeds to the Company.
Interest is payable on the Notes semi-annually on January 1 and
July 1 of each year commencing January 1, 2000. The Notes are
unsecured senior subordinated obligations of the Company,
subordinated in right of payment to all existing and future
senior indebtedness of the Company, including the Credit
Facility. Each of the aforementioned debt facilities contain
restrictive covenants. The Secured Credit Agreement requires the
Company to maintain certain financial ratios, as defined.
As of May 31, 2000, the Company was not in compliance
with a requirement of the Secured Credit Agreements for
maintaining a minimum ratio of EBITDA to Interest Expense, as
defined. On June 30, 2000, the lenders agreed to waive
compliance with this requirement for the quarter ended May 31,
2000 and modified this and other financial ratios for the
remainder of the term, as more particularly described in the First
Amendment to Credit Agreement dated June 30, 2000 and filed as an exhibit
hereto. Such modified ratios are less restrictive that previous ratios.
<PAGE 9>
The Credit Facility is collateralized by substantially all of the
assets of the Company and its domestic subsidiaries, as more
particularly described in the Credit Agreement dated June 29,
1999 and filed as an exhibit hereto. The aggregate amounts of
existing long-term debt maturing in each of the next five years
are as follows: 2001 - $4,973,000; 2002 - $5,877,000;
2003 -$7,684,000; 2004 - $7,684,000; 2005 - $9,490,000.
SERIES A PREFERRED STOCK
On June 30, 1999, the Company issued 1,060,000 shares
of Series A convertible stock ("Preferred Stock") to Fremont
Investors and certain employees of the Company. Holders of the
Preferred Stock are entitled to receive cumulative quarterly
dividends, whether or not declared by the Board of Directors, in
an amount equal to the greater of:
- dividends which would have been payable to the
holders of Series A Convertible Preferred Stock in
such
quarter had they converted their Series A Convertible
Preferred stock into Juno common stock prior to the
record date of dividends declared on the common stock
in such quarter, or
- the stated amount then in effect multiplied by 2%.
Through June 30, 2004, the dividends for the Preferred
Stock will be payable by an increase in the stated amount of such
stock. After June 30, 2004, the dividends will be paid in cash
until redemption or conversion. The Preferred Stock is
convertible into shares of the Company's common stock at a rate
of $26.25 per share. Holders of Preferred Stock are entitled to
vote for each whole share of common stock that would be issuable
to such holder upon the conversion of all the shares of the
Preferred Stock held by such holder on the record date for the
determination of stockholders entitled to vote. Additionally,
holders of Preferred Stock have preference to common stockholders
in the event of liquidation, dissolution or winding up of the
Company.
NET INCOME PER COMMON SHARE
Basic earnings per share is calculated by dividing net
income by the weighted average number of common shares
outstanding. Diluted earnings per share is calculated by
dividing net income by the weighted average number of common
shares outstanding including assumed exercise of dilutive stock
options during the periods. Such weighted average number of
shares outstanding is as follows:
May 31, May 31,
2000 1999
---------- ----------
3 months ended
Basic 2 412 126 18 602 007
Diluted 2 412 126 18 653 666
6 months ended
Basic 2 412 126 18 599 184
Diluted 2 412 126 18 654 308
(Continued on Next Page)
<Page 10>
COMPREHENSIVE INCOME
As of December 1, 1998, the Company adopted Statement
of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" (SFAS 130). The adoption of this Statement
had no impact on the Company's net income or stockholders'
equity. SFAS 130 establishes new rules for the reporting and
display of comprehensive income and its components. SFAS 130
requires foreign currency translation adjustments and unrealized
gains or losses on the Company's available-for-sale securities to
be included in other comprehensive income. Prior to the adoption
of SFAS 130, the Company reported such adjustments and unrealized
gains or losses separately in stockholders' equity. Amounts in
prior year financial statements have been reclassified to conform
to SFAS 130.
The components of comprehensive income, net of related
tax, are as follows (in thousands):
Three Months Ended Six MonthsEnded
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
------- ------- ------- -------
Net income $ 3 034 $ 7 306 $ 3 812 $13 315
Net change in
unrealized gain (loss)
on available-for-sale
securities - (913) - (1 124)
Foreign currency
translation adjustment (206) (64) (154) 118
------- ------- ------- -------
Comprehensive income $ 2 828 $ 6 457 $ 3 658 $12 309
======= ======= ======= =======
The components of accumulated other comprehensive
income, net of related tax, are as follows (in thousands):
May 31, November 30,
2000 1999
------ ------
Foreign currency translation adjustment $ (684) $ (530)
------ ------
Accumulated other comprehensive income $ (684) $ (530)
====== ======
(Continued on Next Page)
<Page 11>
MERGER AND RECAPITALIZATION
On June 30, 1999, Jupiter Acquisition Corp. ("Merger
Sub"), a Delaware corporation and a wholly-owned subsidiary of
Fremont Investors I, LLC ("Fremont Investors"), was merged (the
"Merger") with and into the Company pursuant to an Agreement and
Plan of Recapitalization and Merger dated March 26, 1999 (the
"Merger Agreement") by and among Merger Sub, the Company and
Fremont Investors. Pursuant to the Merger, the holders of all
the issued and outstanding shares of Juno common stock, $.01 par
value per share, were entitled to receive either $25 cash or one
share of Juno common stock, $.001 par value per share, for each
share of common stock issued and outstanding; provided that this
consideration was subject to proration, as such holders were
entitled to receive an aggregate of 2,400,000 shares of Juno
common stock. The Company funded this effective retirement of
16,242,527 shares of the Company's common stock with a payment to
stockholders in the aggregate of approximately $406 million. The
sources of this funding included the Company's available cash, a
$106 million preferred stock investment by Fremont and key
employees of Juno ("Preferred Stock"), approximately $94.9
million of bank debt ("Bank Debt") and the issuance of $125
million of subordinated debt ("Subordinated Debt"). In
connection with the Merger the Company incurred approximately
$9.7 million in transaction costs and $9.9 million of deferred
financing costs. Included in these costs were payments of
approximately $4.9 million to Fremont Investors.
GUARANTORS' FINANCIAL INFORMATION
The Company has issued and registered $125 million of
Series B Senior Subordinated Notes at 11-7/8% (the "Senior
Subordinated Notes") under the Securities Act of 1933, as amended
(the "Act"). Pursuant to the registration and issuance of the
Senior Subordinated Notes under the Act, the Company's wholly-
owned domestic subsidiaries, Juno Manufacturing, Inc., Indy
Lighting, Inc. and Advanced Fiberoptic Technologies, Inc., will
provide full and unconditional senior subordinated guarantees for
the Senior Subordinated Notes on a joint and several basis.
Following is consolidating condensed financial information
pertaining to the Company ("Parent") and its subsidiary guarantors and
subsidiary non-guarantors. The Company has not presented separate
financial statements and other disclosures concerning its subsidiary
guarantors because management has determined that such information is
not material to investors.
<TABLE>
For the Three Months Ended May 31, 2000
------------------------------------------
<CAPTION>
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 36 469 $ 34 969 $ 2 630 $(27 846) $ 46 222
Cost of sales 29 073 22 999 2 310 (31 117) 23 265
-------- ------------ ------------- ----------- ------------
Gross profit 7 396 11 970 320 (3 271) 22 957
Selling, general and
administrative 7 045 5 013 532 27 12 617
-------- ------------ ------------- ------------ ------------
Operating income 351 6 957 (212) (3 244) 10 340
Other income(expense) (5 564) 17 (35) (1) (5 583)
-------- ------------ ------------- ------------ ------------
Income (loss)before taxes
on income (5 213) 6 974 (247) (3 243) 4 757
Taxes on income (637) 2 471 (109) (2) 1 723
-------- ------------ ------------- ------------ ------------
Net income (loss) (4 576) 4 503 (138) (3 245) 3 034
Less: Preferred Dividends (2 250) - - - (2 250)
--------- ------------ ------------- ------------ ------------
Net Income (loss) available
To Common Shareholders $ (6 826) $ 4 503 $ (138) $(3 245) $ 784
======== =========== ============ ============ ===========
</TABLE>
(Continued on Next Page)
<Page 12>
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
For the Three Months Ended May 31, 1999
-----------------------------------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 35 260 $ 36 033 $ 2 765 $(28 554) $ 45 504
Cost of sales 27 914 22 336 2 452 (29 225) 23 477
-------- ------------ ------------- ----------- ------------
Gross profit 7 346 13 697 313 671 22 027
Selling, general and
administrative 6 055 5 297 495 29 11 876
-------- ------------ ------------- ------------ ------------
Operating income 1 291 8 400 (182) 642 10 151
Other income(expense) 1 022 150 (36) - 1 136
-------- ------------ ------------- ------------ ------------
Income (loss) taxes
on income 2 313 8 550 (218) 642 11 287
Taxes on income 915 3 160 (93) (1) 3 981
-------- ------------ ------------- ------------ ------------
Net income (loss)
available to
Common Shareholders $ 1 398 $ 5 390 $ (125) $643 $ 7 306
======== ============ ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 2000
----------------------------------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 68 881 $ 67 746 $ 4 923 $(55 863) $ 85 687
Cost of sales 54 256 43 610 4 208 (58 562) 43 512
-------- ------------ ------------- ----------- ------------
Gross profit 14 625 24 136 715 2 699 42 175
Selling, general and
administrative 13 687 10 100 1 026 54 24 867
-------- ------------ ------------- ------------ ------------
Operating income 938 14 036 (311) 2 645 17 308
Other income(expense) (11 185) 37 (65) (1) (11 214)
-------- ------------ ------------- ------------ ------------
Income (loss) before taxes
on income (10 247) 14 073 (376) 2 644 6 094
Taxes on income (2 501) 4 951 (165) (3) 2 282
-------- ------------ ------------- ------------ ------------
Net income (loss) (7 746) 9 122 (211) 2 647 3 812
Less: Preferred
Dividends (4 455) - - - (4 455)
-------- ------------ -------------- ----------- ------------
Net Income (loss)
available to
Common Shareholders $(12 201) $ 9 122 $ (211) $ 2 647 $ (643)
======== =========== ============= =========== ===========
</TABLE>
(Continued on Next Page)
<Page 13>
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 1999
-----------------------------------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 66 574 $ 66 896 $ 4 772 $(55 461) $ 82 781
Cost of sales 51 621 41 651 4 197 (55 437) 42 032
-------- ------------ ------------- ------------ ------------
Gross profit 14 953 25 245 575 (24) 40 749
Selling, general and
administrative 11 456 10 250 909 57 22 672
-------- ------------ ------------- ------------ ------------
Operating income 3 497 14 995 (334) (81) 18 077
Other income(expense) 2 179 282 (66) - 2 395
-------- ------------ ------------- ------------ ------------
Income (loss)before taxes
on income 5 676 15 277 (400) (81) 20 472
Taxes on income 1 895 5 436 (172) (2) 7 157
-------- ------------ ------------- ------------ ------------
Net income (loss)
available to
Common Shareholders $ 3 781 $ 9 841 $ (228) $ (79) $ 13 315
======== ============ ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
May 31, 2000
---------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Cash $ 8 574 $ 86 $ 71 $130 $ 8 861
Accounts receivable, net 27 610 63 525 1 364 (64 485) 28 014
Inventories 14 840 15 626 1 599 (4 937) 27 128
Other current assets 3 520 479 56 - 4 055
-------- ------------ ------------- ------------ ------------
Total current assets 54 544 79 716 3 090 (69 292) 68 058
Property and equipment 10 424 56 187 2 629 (377) 68 863
Less accumulated depreciation 2 516 18 933 491 (272) 21 668
-------- ------------ ------------- ------------ ------------
Net property and equipment 7 908 37 254 2 138 (105) 47 195
Other assets 73 125 72 - (59 947) 13 250
-------- ------------ ------------- ------------ ------------
Total assets $ 135 577 $ 117 042 $ 5 228 $ (129 344) $ 128 503
======== ============ ============= ============ ============
Current liabilities $ 76 881 $ 11 739 $ 2 344 $ (64 355) $ 26 609
Other liabilities 202 315 - 2 163 (2 085) 202 393
-------- ------------ ------------- ------------ ------------
Total liabilities 279 196 11 739 4 507 (66 440) 229 002
Total stockholders'
(deficit) equity (143 619) 105 303 721 (62 904) (100 499)
-------- ------------ ------------- ------------ ------------
Total liabilities and
stockholders' equity $135 577 $ 117 042 $ 5 228 $(129 344) $ 128 503
======== ============ ============= ============ ============
</TABLE>
(Continued on Next Page)
<Page 14>
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
November 30, 1999
-----------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash $ 5 748 $ 2 828 $ 27 $ 29 $ 8 632
Accounts receivable, net 26 206 50 536 1 721 (51 664) 26 779
Inventories 18 879 16 458 1 507 (7 527) 29 317
Other current assets 3 390 480 79 193 4 142
-------- ------------ ------------- ------------ ------------
Total current assets 54 223 70 302 3 334 (58 969) 68 890
Property and equipment 10 393 54 490 2 656 (377) 67 162
Less accumulated depreciation (2 330) (16 871) 429 (270) 19 360
-------- ------------ ------------- ------------ ------------
Net property and equipment 8 063 37 619 2 227 (107) 47 802
Other assets 73 819 75 1 (59 953) 13 942
-------- ------------ ------------- ------------ ------------
Total assets $136 105 $107 996 $ 5 562 $ (119 029) $ 130 634
======== ============ ============= ============ ============
Current liabilities $ 63 435 $ 11 815 $ 2 359 $ (51 441) $ 26 168
Other liabilities 208 542 - 2 177 (2 096) 208 523
-------- ------------ ------------- ------------ ------------
Total liabilities 271 977 11 815 4 536 (53 537) 234 791
Total stockholders'
(deficit) equity (135 872) 96 181 1 026 (65 492) (104 157)
-------- ------------ ------------- ------------ ------------
Total liabilities and
stockholders' equity $136 105 $107 996 $ 5 562 $ (119 029) $ 130 634
======== ============ ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 2000
-----------------------------------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities $ 8 673 $ (1 045) $ 74 $ 85 $ 7 787
--------- ------------ ------------- ------------ ------------
Cash flows provided by (used in)
investing activities
Capital expenditures (55) (1 696) (15) - (1 766)
--------- ------------ ------------- ------------ ------------
Net Cash provided by (used in)
investing activities (55) (1 696) (15) - (1 766)
--------- ------------ ------------- ------------ ------------
Cash provided by (used in)
financing activities
Proceeds from bank debt 2 500 - - - 2 500
Principal Payments on
Long Term Debt (8 292) - (14) 14 (8 292)
--------- ------------ ------------- ------------ ------------
Net cash used in financing
activities (5 792) - (14) 14 (5 792)
--------- ------------ ------------- ------------ ------------
Net increase (decrease)
in cash (2 826) (2 741) 45 99 (229)
Cash at beginning of period 5 748 2 828 27 29 8 632
--------- ------------ ------------- ------------ ------------
Cash at end of period $ 8 574 $ 87 $ 72 $ 128 $ 8 861
========= ============ ============= ============ ============
</TABLE>
<Page 15>
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 1999
-----------------------------------------
(in thousands)
Guarantor Non-Guarantor Total
Parent Subsidiaries Subsidiaries Eliminations Consolidated
-------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities $ 9 119 $ 1 228 $ (117) $ 337 $ 10 567
-------- ------------ ------------- ------------ ------------
Cash flows provided by (used in)
investing activities:
Capital expenditures (112) (2 897) (124) - (3 133)
Proceeds from sale of assets - - - - -
Purchases of marketable
securities (63 966) - - - (63 966)
Sales of marketable
securities 77 666 - - - 77 666
--------- ------------ ------------- ------------ ------------
Net Cash provided by (used in)
investing activities 13 588 (2 897) 124 - 10 567
--------- ------------ ------------- ------------ ------------
Cash provided by (used in)
financing activities:
Dividends paid (3 720) - - - (3 720)
Other financing activities 320 - (13) 13 320
--------- ------------ ------------- ------------ ------------
Net cash used in financing
activities (3 400) - (13) 13 (3 400)
--------- ------------ ------------- ------------ ------------
Net increase (decrease)
in cash 19 307 (1 669) (254) 350 17 734
Cash at beginning of period 9 162 958 349 29 10 498
--------- ------------ ------------- ------------ ------------
Cash at end of period $ 28 469 $ (711) $ 95 $ 379 $28 232
========= ============ ============= ============ ============
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
===========================================================
RESULTS OF OPERATIONS:
Three Months Ended May 31, 2000 Compared With Three Months
Ended May 31, 1999
During the second quarter ended May 31, 2000, net sales
increased by 1.6% to $46,222,000 compared to $45,504,000 for the
like period in 1999. Sales increases, principally as a result of
new residential and commercial construction activities and sales
of the Company's new Flex 12 product line were offset, in part,
by a softening in national account business.
Cost of sales as a percentage of net sales decreased to
50.3% for the quarter, compared to 51.6% for the like period in
1999 due to a favorable change in sales mix and the result of
decreases in aluminum raw material costs.
Selling, general and administrative expenses expressed as a
percentage of sales increased to 27.3% for the second quarter of
2000 compared with 26.1% for the like period in 1999 due
primarily to increases of approximately $400,000 for amortization
of deferred financing costs resulting from the
recapitalization transaction, and freight cost increases of
approximately $300,000.
<Page 16>
As a result of the above factors, operating income
increased slightly to 22.4% of sales as compared to 22.3% for the
like period in 1999.
Interest expense was $5,689,000 for the second quarter
ended May 31, 2000 compared to $24,000 for the like period in
1999. This increase reflects interest related to borrowings used
to finance the merger that occurred in the third quarter of 1999.
Six Months Ended May 31, 2000 Compared With Six Months
Ended May 31, 1999
During the six month period ended May 31, 2000, net sales
increased 3.5% to $85,687,000 compared to $82,781,000 for the
like period in 1999. In management's opinion, this increase is
due primarily to an increase in the overall demand for lighting
products.
Cost of sales as a percentage of net sales remained
unchanged at 50.8%.
Selling, general and administrative expenses expressed as a
percentage of sales increased to 29.0% for the period compared
with 27.4% for the like period in 1999 due to the same factors
cited for the second quarter.
As a result of the above factors, operating income
decreased to 20.2% of sales as compared to 21.8% for the like
period in 1999.
Interest expense was $11,413,000 for the six months ended
May 31, 2000 compared to $62,000 for the like period in 1999.
This increase reflects interest related to borrowings used to
finance the merger that occurred in the third quarter of 1999.
INFLATION
---------
While Juno believes that it generally has been successful in
controlling
the prices it pays for materials and passing on increased costs
by increasing
its prices, the Company may not have future success in limiting
material price increases or reflecting any material price
increases in the prices it charges its customers or offsetting
such price increases through improved
efficiencies.
LIQUIDITY AND CAPITAL RESOURCES:
During the six month period ended May 31, 2000, the Company
generated positive net cash flow from operating activities of
$7,787,000. This was comprised principally of net income,
depreciation and amortization, and a decrease in inventory,
(collectively aggregating $9,058,000), net of an increase in
accounts receivable of $1,369,000.
Net cash used in investing activities amounted to $1,766,000
and was used to finance capital expenditures.
The net cash used in financing activities of $5,792,000
consisted of principal payments on long-term debt of $8,292,000
less proceeds from the Revolving Credit Facility of $2,500,000.
The Company historically has funded its operations
principally from cash generated from operations, available cash
and income from marketable securities. The Company incurred
substantial indebtedness in connection with the Merger. The
Company's liquidity needs are expected to arise primarily from
operating activities and servicing indebtedness incurred in
connection with the Merger.
Principal and interest payments under the Senior Credit Facility
and the Subordinated Debt represent significant liquidity requirements
for the
<Page 17>
Company. As of May 31, 2000, the Company had cash of approximately
$8.9 million and total indebtedness of $204.4 million. Detailed information
concerning the terms of the Senior Credit Facility and the
Subordinated Debt can be found in the Company's audited financial statements.
The Company's $35 million Revolving Credit Facility is available
to finance its working capital and had no outstanding balance on May 31,
2000. The Company's principal source of cash to fund its liquidity needs
will be net cash from operating activities and borrowings under the Senior
Credit Facility. The Company believes these sources will be adequate to meet
its anticipated future requirements for working capital, capital
expenditures, and scheduled payments of principal and interest on its
existing indebtedness for the next 12 months. However, the Company may not
generate sufficient cash flow from operations or have future working capital
borrowings available in an amount sufficient to enable it to service its
indebtedness,including the notes, or to make necessary capital expenditures.
OTHER MATTERS:
-------------
This document contains various forward-looking statements.
Statements in this document that are not historical are forward-looking
statements. Such statements are subject to various risks and uncertainties that
could cause actual results to vary materially from those stated. Such risks and
uncertainties include: economic conditions generally; levels of
construction and remodeling activities, the ability to improve
manufacturing efficiencies, disruptions in manufacturing or distribution,
product and price competition, raw material prices, the ability to develop and
successfully introduce new products, technology changes, patent issues, exchange
rate fluctuations, and other risks and uncertainties. The Company
undertakes no obligation to update any such factors or to publicly announce the
result of any revisions to any of the forward-looking statements contained
herein to reflect future events or developments.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
=======================================================
The Company does not have any material risk-sensitive
investments.
<Page 18>
PART II - OTHER INFORMATION
===========================
Item 1. Legal Proceedings - Reference is made to Item 3 of the
Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1999 for a description of Linda Parnes v.
George M. Ball, Thomas Tomsovic, Allan
Coleman, Robert S. Fremont, Julius Lewis, Fremont Investors I, LLC,
Fremont Partners, L.P. and Juno Lighting, Inc.
On September 8, 1997, Juno Lighting, Inc. was served with a complaint
for a patent infringement alleged by Mr. Ole K. Nilssen
(Case No. 97 C 4624 in the United States District Court
for the Northern District of Illinois). In this complaint,
Mr. Nilssen alleges that Juno has infringed seven of Mr. Nilssen's
patents and sought a permanent injunction against Juno's sale
of products utlizing the inventions claimed by such patents and
unspecified monetary damages including a request for treble
damages. These patents relate variously to low-voltage, high
frequency power supplies for lighting systems and to so-called
track lighting systems incorporating such low-voltage high
frequency power supplies. Juno filed an answer and counterclaim
denying the allegations of the complaint and asserting a number of
affirmative defenses and prayers for declaratory relief.
To allow the parties to focus on negotiating a potential
resolution of this dispute, on November 10, 1999, Juno and
Mr. Nilssen dismissed their cases without prejudice and further
entered into an agreement to toll the statute of limitations
up to and including May 15, 2000.
To avoid further operation of the statute of limitations, on May
15, 2000, Mr. Nilssen filed, but did not serve upon the Company, a
complaint against Juno Ligting, Inc. in the United States District
Court for the District of Deleware. In this complaint, Mr. Nilssen
alleges the same causes of action and seeks the same relief as in
the dismissed action. The Company and Mr. Nilssen continue to focus
on negotiating a potential resolution of this dispute.
Item 2. None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held it's annual meeting of stockholders on
April 25, 2000.
(b) The Company's stockholders elected the following persons
to serve as directors: Robert Jaunich II, Mark Williamson,
Daniel Dalle Molle and Glenn Bordfeld.
(c) The following table shows the votes that were cast with
respect to the election of directors:
Nominee Votes In Favor Votes Withheld
------- -------------- --------------
Robert Jaunich II 5,891,937 12,219
Mark Williamson 5,891,937 12,219
Daniel Dalle Molle 5,891,563 12,593
Glenn Bordfeld 5,891,948 12,208
Item 5. Other Information - None
Item 6. (a) Exhibits
Exhibit No. Exhibit Description
----------- -------------------
10.1 Juno Lighting, Inc. 401(k) Plan, Amended and
Restated effective December 1,1999, executed June 30,2000.
10.1(a) Juno Lighting, Inc. 401(k) Trust Agreement, effective
July 1, 2000, executed June 28, 2000.
10.1(b) Amendment to the 401(k) Trust Agreement with Juno
Lighting,Inc. effective July 1, 2000, executed
June 29, 2000.
10.2 First Amendment to Credit Agreement, dated as of June
30, 2000 among Juno Lighting, Inc., Bank of America,
N.A., Credit Suisse First Boston and certain other
lenders thereto.
(b) During the quarter for which this report is filed, no reports on
Form 8-K were filed.
<Page 19>
SIGNATURES
==========
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JUNO LIGHTING, INC.
By:George J. Bilek
---------------------------------------
George J. Bilek, Vice President Finance
and Treasurer (Principal Financial and
Accounting Officer)
Dated: July 14, 2000
<Page 20>
JUNO LIGHTING, INC. 401(k) PLAN
Amended and Restated
Effective as of December 1, 1999
Table of Contents
<Page 21>
ARTICLE 1. ADOPTION 1
ARTICLE 2. DEFINITIONS 1
2.1 "Account" or "Accounts" 1
2.2 "Accrued Benefit". 2
2.3 "Active Participant" 2
2.4 "Authorized Leave of Absence" 2
2.5 "Beneficiary" or "Beneficiaries" 2
2.6 "Board of Directors" 2
2.7 "Break in Service" 2
2.8 "Code" 3
2.9 "Committee" 3
2.10 "Company". 3
2.11 "Compensation" 3
2.12 "Compensation Reduction Election" 4
2.13 "Continuous Service" 4
2.14 "Disability" or "Disabled". 5
2.15 "Effective Date" 5
2.16 "Elective Contribution". 5
2.17 "Eligibility Service". 5
2.18 "Eligible Employee" 5
2.19 "Employee". 6
2.20 "Employer" 6
2.21 "Employer Matching Contributions". 6
2.22 "Employer Profit Sharing Contributions". 6
2.23 "Entry Date". 6
2.24 "ERISA" 6
2.25 "Family Leave". 7
2.26 "Forfeiture" 7
2.27 "Hardship" 7
2.28 "Highly Compensated Employee" 8
2.29 "Highly Compensated Participant". 9
2.30 "Hour of Service" 9
2.31 "Investment Fund". 10
2.32 "Non-Highly Compensated Participant" 10
2.33 "Normal Retirement Date" 10
2.34 "Participant". 10
2.35 "Period of Severance" 10
2.36 "Plan". 11
2.37 "Plan Administrator" 11
<Page 22>
2.38 "Plan Year". 11
2.39 "QDRO" 11
2.40 "QMAC". 11
2.41 "Qualified Military Leave". 11
2.42 "QNEC". 11
2.43 "Related Entity" 11
2.44 "Related Plan" 11
2.45 "Required Beginning Date" 11
2.46 "Rollover Contribution". 12
2.47 "Termination of Employment" 12
2.48 "Transition Period". 12
2.49 "Trust". 12
2.50 "Trust Agreement" 13
2.51 "Trust Fund" 13
2.52 "Trustee". 13
2.53 "Trust-to-Trust Transfer" 13
2.54 "Valuation Date" 13
2.55 "Vesting Service" 13
2.56 "Year of Vesting Service" 14
ARTICLE 3. PARTICIPATION 14
3.1 Participation. 14
3.2 Participation Upon Change of Job Status. 14
3.3 Duration of Participation. 14
3.4 Participation Upon Reemployment 14
ARTICLE 4. CONTRIBUTIONS 15
4.1 Elective Contributions. 15
4.2 Employer Matching Contributions. 17
4.3 Employer Profit Sharing Contributions. 18
4.4 Special Contributions; QNECs and QMACs. 18
4.5 Rollover Contributions into the Plan. 20
4.6 Trust-to-Trust Transfers to the Plan. 20
4.7 Reemployment Following Qualified Military Leave. 20
ARTICLE 5. RESTRICTIONS AND LIMITATIONS ON CONTRIBUTIONS 22
5.1 Restrictions on Elective Contributions. 22
5.2 Restrictions on Employer Matching Contributions 26
5.3 Multiple Use of Sections 5.1(b) and 5.2 29
5.4 Order of Application of Limitations of Sections 5.1(a),
5.1(b), 5.2, 5.3 and 5.6. 31
5.5 Allocation of Income, Gain or Loss 31
5.6 Limitations on Contributions. 32
<Page 23>
5.7 No Non-Deductible Contributions. 35
ARTICLE 6. BENEFITS 35
6.1 Payment of Benefits in General. 35
6.2 Payment of Vested Accrued Benefit on Termination of
Employment. 35
6.3 Payment of Accrued Benefit on Account of Death. 35
6.4 Participant Withdrawals. 37
6.5 Vesting. 39
6.6 Installment Payments 40
6.7 Deadline for Payment of Benefits. 41
6.8 Spousal Consent to a Beneficiary Designation. 41
6.9 Facility of Payment. 42
6.10 Lump Sum Payment Without Election. 42
6.11 Direct Rollover to Another Plan. 42
6.12 Request for Withdrawal or Distribution. 42
6.13 Deduction of Taxes from Amounts Payable 42
6.14 Participant Loans 43
ARTICLE 7. TRUSTEE AND TRUST FUND 45
7.1 Trust Agreement. 45
7.2 Selection of Trustee. 45
7.3 Trustee's Duties. 45
7.4 Trust Expenses. 45
7.5 Trust Entity. 45
7.6 ERISA Section 404(c) Plan. 45
7.7 Separate Accounts. 46
7.8 Investment Funds. 46
7.9 Investment Elections with Respect to Contributions 46
7.10 Investment Elections with Respect to Accounts. 47
7.11 Trust Income 47
7.12 Right of the Employers to Trust Assets. 48
ARTICLE 8. ADMINISTRATION 48
8.1 Board of Directors Duties. 48
8.2 Committee Membership. 49
8.3 Committee Structure. 49
8.4 Committee Actions. 49
8.5 Committee Duties 49
8.6 Correction of Errors. 51
8.7 Committee and Plan Administrator Bonding and Expenses.
51
8.8 Allocations and Delegations of Responsibility. 51
8.9 Information To Be Supplied by Employers. 52
8.10 Records. 52
<Page 24>
8.11 Fiduciary Capacity. 52
8.12 Committee/Plan Administrator Decisions Final. 52
8.13 Fiduciary as Participant. 53
ARTICLE 9. CLAIMS PROCEDURE 53
9.1 Initial Claim for Benefits. 53
9.2 Review of Claim Denial 53
9.3 Limitation on Filing Suit. 54
ARTICLE 10. AMENDMENT AND TERMINATION OF THE PLAN 54
10.1 Plan Termination. 54
10.2 Amendments. 54
10.3 Payment Upon Termination. 55
10.4 Withdrawal from the Plan by an Employer. 55
ARTICLE 11. TOP HEAVY PROVISIONS 55
11.1 Application. 55
11.2 Special Top Heavy Definitions 55
11.3 Special Top Heavy Provisions 62
ARTICLE 12. MISCELLANEOUS PROVISIONS 65
12.1 Employer Joinder. 65
12.2 Actions by Employer. 65
12.3 Plan Merger. 65
12.4 Non-Alienation of Benefits. 65
12.5 Qualified Domestic Relations Order. 66
12.6 Unclaimed Amounts 68
12.7 No Contract of Employment. 69
12.8 Employees' Trust. 69
12.9 Source of Benefits. 69
12.10 Indemnification. 69
12.11 Company Merger. 69
12.12 Gender and Number. 69
12.13 Headings. 69
12.14 Uniform and Non-Discriminatory
Application of Provisions. 70
12.15 Invalidity of Certain Provisions. 70
12.16 Law Governing. 70
<Page 25>
APPENDIX A 1
JUNO LIGHTING, INC. 401(k) PLAN
Amended and Restated
Effective as of December 1, 1999
ARTICLE 1.
Adoption
Juno Lighting, Inc. adopted the Juno Lighting, Inc. 401(k)
Plan (the "Plan") effective December 1, 1985, to encourage
eligible employees to defer receipt of a portion of their
compensation and to provide certain additional benefits. The
Plan, which has been amended from time to time, was amended and
restated, effective December 1, 1987. The Plan was then amended
by the First Amendment to the amended and restated Plan,
effective September 1, 1994. The Plan is hereby further amended
and restated, effective December 1, 1999, except as set forth
herein. The Plan, as amended and restated, is intended to be a
qualified profit sharing plan under Sections 401(a) and 401(k) of
the Code.
Except as otherwise specifically provided herein, the Plan
as amended and restated herein applies to persons who are
Employees of an Employer on and after December 1, 1999.
Eligibility, benefits, payment of benefits and the amount of
benefits, if any, payable to an Employee who has had a
Termination of Employment prior to December 1, 1999 and has not
resumed active employment and completed at least one Hour of
Service on or after December 1, 1999 shall be determined in
accordance with the provisions of the Plan in effect on the date
of the Termination of Employment, except as otherwise
specifically provided herein.
ARTICLE 2.
Definitions
The following capitalized terms shall have the meaning set
forth below, unless the context clearly indicates otherwise:
2.1 "Account" or "Accounts" means a Participant's share in the
Trust. Each Participant shall have the following four (4)
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 Profit Sharing Contribution Account" to which
shall be credited Employer Profit Sharing Contributions made in
accordance with Section 4.3 and Minimum Employer Contributions
made in accordance with Section 11.3(a) and Forfeitures allocated
to a Participant in accordance with Section 4.3(b).
(b) An "Elective Contribution Account" to which shall be
credited Elective Contributions made by Participants in
accordance with Section 4.1, Employer Matching Contributions made
by an Employer on behalf of a Participant in accordance with
Section 4.2, QNECs and QMACs made in accordance with Section 4.4,
and a proportionate share of any gains, losses, interest, and
expenses attributable thereto. A Participant's Elective
Contribution Account shall be fully
<Page 26>
vested and nonforfeitable.
The Participant's Elective Contribution Account shall be
separated into an "Elective Contribution Subaccount" and a
"QNEC/QMAC Subaccount."
(c) A "Rollover Contribution Account" to which a Participant's
Rollover Contributions are credited, plus all income and gains
credited thereto, and less all losses, expenses, and
distributions chargeable thereto.
(d) A "Trust-to-Trust Account" to which shall be credited Trust-
to-Trust Transfers made to the Plan on behalf of a Participant in
accordance with Section 4.6.
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.
2.3 "Active Participant" means a Participant who:
(a) for all purposes except those described in Section 2.3(b),
(i) has 1,000 Hours of Service during the Plan Year and is an
Employee on the last day of the Plan Year, or (ii) has a
Termination of Employment during the Plan Year (A) after
attaining his Normal Retirement Date, (B) by reason of
Disability, or (C) by reason of death; and
(b) for purposes of Article 5, for purposes of electing to have
Elective Contributions made on his behalf, and for entitlement to
allocations of Employer Matching Contributions made based on
payroll periods (but not for Year End Adjustment described in
Section 4.2(a)) and Special Employer Contributions, is an
Employee on any day of the Plan Year without regard to whether
the Employee has 1,000 Hours of Service for the Plan Year or is
employed on the last day of the Plan Year.
2.4 "Authorized Leave of Absence" means an absence with or
without compensation, authorized by an Employer on a non-
discriminatory basis for disability, jury duty, or other reasons.
2.5 "Beneficiary" or "Beneficiaries" means any person or persons
designated by a Participant in accordance with Section 6.3(f) to
receive death benefits under the Plan, unless otherwise provided
under the terms of the Plan.
2.6 "Board of Directors" means the board of directors of the
Company.
2.7 "Break in Service" means, for purposes of determining
Eligibility Service, a Period of Severance of at least 12 months,
and for all other purposes, including
<Page 27>
determining Years of
Vesting Service, a Plan Year within which the Employee has not
been credited with more than 500 Hours of Service.
2.8 "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any subsequent Internal Revenue Code; if
there is a subsequent Internal Revenue Code, any references
herein shall be deemed to refer to any such Sections as amended,
modified or renumbered.
2.9 "Committee" means the committee appointed pursuant to
Section 8.1 to administer the Plan.
2.10 "Company" means Juno Lighting, Inc. and any successor entity
by merger, consolidation, purchase or otherwise, which adopts the
Plan and the Trust by operation of law or otherwise.
2.11 "Compensation" means the amounts described below:
(a) Compensation means, with respect to the Employees of each
Employer, the total cash compensation actually paid during the
Plan Year to a Participant by such Employer, including salaries,
wages, fees for professional services, and other amounts received
(whether or not such amounts are paid in cash) for personal
services actually rendered in the course of employment with the
Employer, overtime, commissions, bonuses, compensation for
services on the basis of a percentage of profits, tips, fringe
benefits and reimbursements or other expense allowances under a
nonaccountable plan (as described in Treasury Regulations Section
1.62-2(c), to the extent that the amounts are includable in gross
income, increased by any amounts by which the Participant's
Compensation is reduced by salary reduction or similar
arrangement under any cafeteria Plan (as described in Section 125
of the Code) maintained by such Employer.
(b) Compensation as defined in paragraph (a) above shall exclude
(1) contributions to a deferred compensation plan to the extent
that, before the application of Code Section 415 limitations to
such deferred compensation plan, the contributions are not
includable in the gross income of the Participant for the taxable
year of contribution, (2) contributions to a simplified employee
pension described in Code Section 408(k), (3) benefits paid under
a deferred compensation plan regardless of whether such benefits
are includable in the Participant's gross income; provided that
any amounts received pursuant to an unfunded non-qualified plan
shall be considered as Compensation in the year the amounts are
includable in the gross income of the Participant, (4) amounts
realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by a Participant either
becomes freely transferable or is no longer subject to a
substantial risk of forfeiture, (5) amounts realized from the
sale, exchange or other disposition of stock acquired under a
qualified stock option, and (6) other amounts which receive
special tax benefits, such as premiums for group-term life
insurance (to the extent not includable in the gross
<Page 28>
income of
the Participant) or contributions made by an Employer (whether or
not under a salary reduction agreement) toward the purchase of a
Code Section 403(b) annuity contract (whether or not the
contributions are excludable from the gross income of the
Participant).
(c) For purposes of determining Highly Compensated Employees in
accordance with Section 2.28, Key Employees under Section
11.2(d), the Actual Deferral Percentage under Section 5.1(c), and
the Actual Contribution Percentage under Section 5.2(c), and for
purposes of applying the limitations on contributions under
Section 5.6, and for purposes of applying the top-heavy
provisions of Article 11, Compensation means the total
compensation paid to an individual by an Employer and Related
Entities during the Plan Year, increased by any amounts by which
the individual's compensation is reduced by salary reduction or
similar arrangement under any cafeteria plan (as described in
Section 125 of the Code) maintained by an Employer or Related
Entity, and excluding any benefits paid under the Plan or under
any other qualified plan described in Section 401(a) of the Code,
and excluding other deferred compensation, stock options, and any
other distributions which receive special tax benefits.
Except for purposes of determining Highly Compensated
Employees under Section 2.28, Key Employees under
Section 11.2(d) and the contribution limitations under
Section 5.6, 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 Code Section 401(a)(17) ($170,000 in
2000, as adjusted for cost-of-living increases in accordance
with applicable regulations and rulings under Code
Section 401(a)(17)) ("Compensation Limit"). For any Plan
Year consisting of fewer than twelve consecutive months, the
amount of an Employee's Compensation taken into account
under the Plan shall not exceed the product of the
Compensation Limit, multiplied by a fraction, the numerator
of which is the number of months in such Plan Year and the
denominator of which is twelve. For the Plan Year
commencing December 1, 1997 and thereafter, the limitations
on the dollar amount of Compensation that may be taken into
account under the Plan shall be determined without regard to
the family aggregation rules described in Section
401(a)(17)(A) of the Code as in effect for prior Plan Years.
2.12 "Compensation Reduction Election" means the Participant's
election properly completed and filed with the Committee as
provided in Section 4.1. Such election may be in traditional
paper form or by electronic or telephonic means, as determined by
the Committee from time to time.
2.13 "Continuous Service" means the period of employment of an
Employee by an Employer or Related Entity (including periods of
Authorized Leave of Absence) measured from the date an Employee
first performs an Hour of Service upon employment or reemployment
(the "Employment Commencement Date") to the date of the
Employee's Termination of Employment; provided that an Employee
shall not be
<Page 29>
credited with more than 24 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 Entity and performs an Hour of Service before he incurs a
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.
Continuous Service shall be measured in monthly increments
beginning with the Employment Commencement Date, and accumulating
thereafter in monthly intervals on the correspondingly numbered
day of the following calendar month; provided that for any
Employment Commencement Date or subsequent correspondingly
numbered date which should occur on a day of the month which does
not have an identical, corresponding date in the month following
such month (the "Next Month"), the monthly increment shall
cumulate and be measured on the last calendar day of the Next
Month. For fractional months, Continuous Service of fifteen (15)
days or more shall be considered as a full month; Continuous
Service of less than fifteen (15) days shall be disregarded.
Effective June 1, 1989, Continuous Service shall include service
with Indy Lighting Co. ("Indy") as reflected on Indy's records
immediately prior to Indy's acquisition by the Company.
2.14 "Disability" or "Disabled" means the Participant is unable
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or be of long-continued and
indefinite duration. The Disability of a Participant shall be
determined by the Committee based on competent evidence deemed
appropriate by the Committee.
2.15 "Effective Date" of this Plan, as amended and restated
herein, is December 1, 1999 except as otherwise specifically
provided in Appendix A. The Plan was originally effective as of
December 1, 1985.
2.16 "Elective Contribution" means the contributions made by an
Employer to the Trust 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.
2.17 "Eligibility Service" means the sum of an Employee's periods
of Continuous Service, excluding, if the Employee had a Break in
Service before completing the period of Eligibility Service
required to become a Participant under Article 3, all periods of
Continuous Service before the Break in Service.
2.18 "Eligible Employee" means any Employee who is employed by an
Employer, including an Employee on an Authorized Leave of
Absence, but excluding:
(a) Union Employees. Any Employee whose employment is governed
by the terms of a collective bargaining agreement between
Employee representatives (within the meaning of Code Section
7701(a)(46)) and the Employer under which retirement benefits
were the subject of good faith bargaining between the parties,
unless the agreement requires inclusion of the Employee in the
Plan.
<Page 30>
(b) Certain Security Guards. Any individual who is a security
guard other than the manager of the security department.
(c) Certain Production Workers. Any individual who is a
production worker hired on or after September 15, 1987.
(d) Leased Employees. Any person who performs services for an
Employer by and through a contract or agreement, whether written
or verbal, with a third party and who is paid by such third
party, including any person who is a leased employee within the
meaning of Section 414(n) of the Code, a co-employee or joint
employee, or an outsourced employee, even if such person is
subsequently determined by any governmental agency or court to
be, or have been, a common law employee of the Employer.
(e) Independent Contractors. Any individual who performs
services for an Employer pursuant to a contract or agreement,
whether written or verbal, which provides that the person is an
independent contractor or consultant, even if such person is
subsequently determined to be a common-law employee of an
Employer.
(f) Nonresident Aliens. Employees who are nonresident aliens
(within the meaning of Code Section 7701(b)(1)(B)) and who
receive no earned income (within the meaning of Code Section
911(d)(2)) from an Employer which constitutes income from sources
within the United States (within the meaning of Code Section
861(a)(3)).
2.19 "Employee" means any common law employee of an Employer or a
Related Entity and any leased employee (within the meaning of
Code Section 414(n)) of an Employer or any Related Entity.
2.20 "Employer" means the Company and any Related Entity which,
pursuant to Section 12.1, has adopted the Plan.
2.21 "Employer Matching Contributions" means the contributions
made from time to time by an Employer to the Trust in accordance
with Section 4.2.
2.22 "Employer Profit Sharing Contributions" means the
contributions made from time to time by an Employer to the Trust
in accordance with Section 4.3.
2.23 "Entry Date" means through May 31, 2000, each May 31 and
November 30. Beginning June 1, 2000, Entry Date shall mean each
December 1, March 1, June 1, and September 1, and such additional
dates as the Committee may from time to time provide.
2.24 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and references to sections
thereof shall be deemed to include any such sections as amended,
modified or renumbered.
<Page 31>
2.25 "Family Leave" means a period of time during which an
Employee is absent from work: (a) by reason of the pregnancy of
the Employee, (b) by reason of the birth of a child of the
Employee, (c) by reason of the placement of a child with the
Employee in connection with the adoption of such child by such
Employee, (d) for purposes of caring for such child for a period
beginning immediately following such birth or placement, or (e)
any other leave required by the Family and Medical Leave Act. An
absence from work shall not be a Family Leave unless the Employee
furnishes the Committee such timely information as may reasonably
be required to establish that the absence from work was for one
of the reasons specified in this Section 2.25 and the period for
which there was such an absence. Nothing contained herein shall
be construed to establish an Employer policy of treating a Family
Leave as an Authorized Leave of Absence.
2.26 "Forfeiture" means the portion of a Participant's Accrued
Benefit which is forfeited pursuant to Sections 5.1(a), 5.1(b),
5.2, 5.6(c), 6.5(d) and 12.6. Forfeitures are allocated pursuant
to Section 6.5(f).
2.27 "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. Effective on the later of July 1, 2000 or
the first day commencing after the end of the Transition Period,
costs directly related to the purchase of a principal residence
for the Participant (excluding mortgage payments);
(c) Educational Expenses. Effective on the later of July 1,
2000 or the first day commencing after the end of the Transition
Period, payment of tuition and related educational fees for the
next twelve (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; or
(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.
<Page 32>
2.28 "Highly Compensated Employee" means, effective for the Plan
Year beginning December 1, 1996, and for all Plan Years beginning
thereafter, an individual who is an Employee described in
subsection (a) or (b) below. (In general, the definition in this
Section 2.28 is effective for years beginning after December 31,
1996, except that in determining whether an Employee is a Highly
Compensated Employee for years beginning in 1997, this Section
2.28 shall be treated as having been in effect for years
beginning in 1996):
(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) of the Employer or a
Related Entity ("5% Owner");
(b) An Employee who (i) received Compensation during the
preceding Plan Year in excess of $80,000 (for the Plan Year
beginning in 1999, as adjusted in accordance with regulations and
rulings under Section 414(q) of the Code), and (ii) if elected by
the Committee 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 Entities 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 Entities, 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 twenty-one (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 Entity 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 Entity
has or has had a bargaining agreement.
<Page 33>
2.29 "Highly Compensated Participant" means, for a Plan Year, a
Highly Compensated Employee who is an Active Participant for the
Plan Year.
2.30 "Hour of Service" means each hour for which an Employee is
paid, or entitled to payment, or receives earned income from an
Employer or a Related Entity while an Employee:
(a) for the performance of duties;
(b) on account of a period of time during which no duties were
performed; 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 Entity;
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).
Hours of Service credited to a Participant for the
performance of duties will be credited to the computation
period in which the duties are performed. 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 to which the award or agreement pertains. Except in
the case of an Authorized Leave of Absence, not more than
501 Hours of Service shall be credited for any continuous
period during which an employee performs no duty or, in the
case of service required to be credited for payments of back
pay awarded or agreed to, for a period during which an
employee did not or would not have performed duties.
To the extent not credited above, for periods of
Authorized Leave of Absence or Qualified Military Leave, an
Employee shall be credited with a number of Hours of Service
for each week of such Authorized Leave of Absence or
Qualified Military Leave equal to the Employee's weekly
average number of Hours of Service for the six-week period
immediately preceding such Authorized Leave of Absence or
Qualified Military Leave.
To the extent not credited above, solely for purposes
of avoiding a Break in Service, for periods of absence from
work on account of Family Leave, an Employee shall be
credited with:
(1) the Hours of Service which normally would have
been credited to such individual but for the Family Leave; or
<Page 34>
(2) eight (8) Hours of Service per day of such absence if
the Plan is unable to determine the Hours of Service which would
have been credited to such individual but for the Family Leave.
An Employee's Hours of Service for absence on account
of Family Leave shall not exceed the lesser of (i) 501 Hours
of Service or (ii) the number of Hours of Service needed to
prevent a Break in Service in the period specified in the
following sentence. Such Hours of Service, if any, shall be
credited to the Plan Year, as applicable, in which absence
because of Family Leave commenced except that if such Hours
of Service are not needed to prevent a Break in Service in
the Plan Year in which the absence because of Family Leave
commenced and if such Family Leave continues into a
subsequent Plan Year, the Hours of Service shall be credited
to the subsequent Plan Year.
For each Employee who is paid on other than an hourly
basis, Hours of Service shall be credited according to the
following schedule, based on the payroll period of the
Employee for each payroll period in which he earned at least
one Hour of Service:
Payroll Period Hours of Service
Daily 10
Weekly 45
Bi-Weekly 90
Semi-Monthly 95
Monthly 190
2.31 "Investment Fund" means each investment fund designated by
the Committee pursuant to Section 7.8.
2.32 "Non-Highly Compensated Participant" means, for a Plan Year,
any Active Participant who is not a Highly Compensated Employee
for such Plan Year.
2.33 "Normal Retirement Date" means the day on which a
Participant attains age 65.
2.34 "Participant" means a current or former Eligible Employee
participating in the Plan as provided in Article 3.
2.35 "Period of Severance" means the period of time from the
earliest of (a) an Employee's Termination of Employment, (b) the
second 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 Entity; provided that in the case of an
absence from service beyond the first anniversary of the first
day of an absence due to a Family Leave, Period of Severance
shall commence on the second anniversary of the first day of such
absence and last until the date on which the Employee is credited
with an Hour of Service on reemployment by an Employer or a
Related Entity.
<Page 35>
2.36 "Plan" means the Juno Lighting, Inc. 401(k) Plan, as herein
set forth, and as hereafter from time to time amended.
2.37 "Plan Administrator" means the person serving in accordance
with Section 8.5(a) 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.
2.38 "Plan Year" means each 12-month period beginning December 1
and ending November 30.
2.39 "QDRO" means a Qualified Domestic Relations Order as defined
in Section 12.5.
2.40 "QMAC" means the qualified matching contribution made from
time to time by an Employer to the Trust in accordance with
Section 4.4.
2.41 "Qualified Military Leave" means an absence due to service
in the uniformed services (as defined in chapter 43 of title 38
of the Code) by any Employee provided the Employee returns to
employment with the Employer with re-employment rights provided
by law.
2.42 "QNEC" means the qualified non-elective contribution made
from time to time by an Employer to the Trust in accordance with
Section 4.4.
2.43 "Related Entity" 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 5.6, 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%."
2.44 "Related Plan" means any other defined contribution plan and
any defined benefit plan (as defined in Section 415(k) of the
Code) maintained by an Employer or a Related Entity, respectively
called a "Related Defined Contribution Plan" and a "Related
Defined Benefit Plan."
2.45 "Required Beginning Date" means, effective for the Plan Year
beginning December 1, 1997 and for all Plan Years beginning
thereafter, 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 Entity (as determined under Code Section
416(i)) at any time during the
<Page 36>
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.
2.46 "Rollover Contribution" means a rollover contribution from a
qualified trust as described in Code Section 402(c)(4), from an
employee annuity as described in Code Section 403(a)(4), or from
an individual retirement account or individual retirement annuity
as described in Code Section 408(d)(3) made in accordance with
Section 4.5 of the Plan, including an elective transfer that
meets the requirements of Treasury Regulations Section 1.411(d)-
4(b).
2.47 "Termination of Employment" means the occurrence of any one
of the following:
(a) a resignation by an Employee for any reason;
(b) a dismissal of an Employee for any reason;
(c) any complete severance of an Employee's employment
relationship with all Employers and Related Entities;
(d) an Employee fails to report for work within 15 calendar days
of notice of recall to work from layoff; or
(e) an Employee fails to report for work at the conclusion of an
Authorized Leave of Absence, or at any other time without
reasonable cause as determined by the Employer.
Transfers of employment by an Employee from the Company
to another Employer or a Related Entity, or from one Related
Entity to another Related Entity or to an Employer, shall
not constitute a Termination of Employment of such Employee
for purposes of the Plan. An Employee shall be deemed to
have a Termination of Employment in the event of the
disposition of substantially all of the assets of a trade or
business by an Employer or Related Entity (including an
Employer) if the Employee continues in employment with the
purchaser of such stock or assets, provided that the
purchaser does not maintain the Plan within the meaning of
Treasury Regulations Section 1.401(k)-1(d)(4). A
Termination of Employment on account of Disability shall be
deemed to occur when the Committee makes its determination
of Disability.
2.48 "Transition Period" means the period beginning on or about
June 1, 2000 and ending July 1, 2000 or as soon thereafter as
administratively possible in order to accommodate a change in
recordkeeper and a change in trustee, during which Participants
cannot change elections, transfer funds among different
investment vehicles, receive hardship withdrawals, or engage in
such other transactions as shall be determined by the Committee.
2.49 "Trust" means a trust agreement by and between the Company
and the Trustee and any amendments thereto or successor or
supplemental agreements, by which
<Page 37>
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 Juno Lighting, Inc. 401(k) 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
4.6. 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, effective on the later of July 1,
2000 or the first day commencing after the end of the Transition
Period, every business day and such additional more frequent
dates as the Committee may from time to time provide. Until the
later of July 1, 2000 or the first day commencing after the end
of the Transition Period, "Valuation Date" shall mean the last
business day of February, May, August, and November, and such
additional more frequent dates as the Committee may from time to
time provide.
2.55 "Vesting Service" means an Employee's Years of Vesting
Service excluding:
(a) any Years of Vesting Service before 1976;
(b) if the Employee does not have any non-forfeitable interest
in any Employer Contributions allocated to his Accounts, Years of
Vesting Service before any period of consecutive Breaks in
Service if the number of consecutive Breaks in Service equals or
exceeds the greater of (i) five (5) consecutive Breaks in Service
or (ii) the aggregate number of periods of Vesting Service before
the consecutive Breaks in Service;
(c) Years of Vesting Service earned before a Break in Service
until the Employee has completed twelve (12) months of
Eligibility Service following the Break in Service; and
(d) for purposes of determining a Participant's vested interest
in the portion of the Participant's Employer Profit Sharing
Contribution Account which accrued before a period of five (5)
consecutive Breaks in Service and a Termination of
<Page 38>
Employment,
Years of Vesting Service after the period of five (5) consecutive
Breaks in Service.
2.56 "Year of Vesting Service" means a Plan Year within which an
Employee is credited with at least 1,000 Hours of Service. If a
Participant has a Break in Service, any Years of Vesting Service
earned before the Break in Service will not be counted until he
has completed twelve (12) months of Eligibility Service following
the Break in Service.
ARTICLE 3.
Participation
3.1 Participation.
(a) Participation on Effective Date. Each Eligible Employee who
was a participant in the Plan on the Effective Date shall remain
a Participant in the Plan in accordance with the terms hereof.
(b) Participation After the Effective Date. Each Eligible
Employee who was not a Participant on the Effective Date shall
become a Participant on the Entry Date coinciding with or next
following the later of the date he attains age 21 or completes
three (3) months of Eligibility Service.
(c) Participant Due to Rollover Contribution. An Eligible
Employee who makes a Rollover Contribution to the Plan pursuant
to Section 4.5 prior to satisfaction of the requirements in
Section 3.1(a) or 3.1(b) shall be a Participant solely with
respect to his Rollover Contribution Account and shall not be
considered an Active Participant until he satisfies the
requirements of Section 3.1(a) or 3.1(b).
3.2 Participation Upon Change of Job Status. An Employee who
has completed at least three (3) months of Eligibility Service,
but who is not a Participant because he is not an Eligible
Employee, shall become a Participant immediately upon becoming an
Eligible Employee, but not earlier than the date he would have
become a Participant had he been an Eligible Employee at all
times.
3.3 Duration of Participation. A Participant shall continue to
be a Participant until the later of the date he incurs a
Termination of Employment or the date his Accounts have been paid
from the Trust.
3.4 Participation Upon Reemployment. Upon resuming employment
as an Eligible Employee after a Termination of Employment without
incurring a Break in Service, an Eligible Employee shall become a
Participant (or again become a Participant) on the later of the
date he first completes an Hour of Service following
<Page 39>
reemploymentor the Entry Date on which he would have become a Participant had
he not had the Termination of Employment. Upon resuming
employment following a Break in Service, an Eligible Employee who
was a Participant immediately prior to the commencement of his
Period of Severance shall, after completing three (3) months of
Eligibility Service following such Break in Service, become a
Participant retroactively to the date such Eligible Employee
resumes employment; provided that such Eligible Employee shall be
treated as an inactive Participant until the date of his
completion of three (3) months of Eligibility Service following
the Break in Service (the "Active Participation Date"), and no
Compensation earned after resuming employment but prior to the
Participant's Active Participation Date shall be taken into
account under the Plan.
ARTICLE 4.
Contributions
4.1 Elective Contributions.
(a) Each Employer shall make Elective Contributions in
accordance with the Compensation Reduction Elections of Active
Participants, in accordance with such rules as the Committee, in
its discretion, shall from time to time specify. Each Active
Participant may elect Elective Contributions from his
Compensation in the amount (if any) specified in a Compensation
Reduction Election filed with the Committee.
(1) Highly Compensated. A Highly Compensated
Participant shall specify an Elective Contribution in an amount
not less than three percent (3%) and up to a maximum of eleven
percent (11%) of his Compensation (in increments of 1% or in such
increments as the Committee shall permit from time to time).
(2) Non-Highly Compensated. A Non-Highly Compensated
Participant shall specify an Elective Contribution in an amount
not less than three percent (3%) and up to a maximum of fifteen
percent (15%) of his Compensation (in increments of 1% or in such
increments as the Committee shall permit from time to time).
The Committee may specify higher or lower maximum
percentages for any group of Active Participants. An
Active Participant's Compensation Reduction Election
shall continue in effect, notwithstanding any change in
Compensation, until such Active Participant shall
change or revoke such Compensation Reduction Election,
cease to be an Active Participant, or receive a
hardship distribution under Section 6.4(b); provided
that if a Non-Highly Compensated Participant becomes a
Highly Compensated Participant, his Compensation
Reduction Election shall automatically be reduced, if
necessary, to 11%.
(b) Application of Limits. Elective Contributions shall be
based on Compensation paid with respect to a payroll period
without regard to whether the Participant has reached the Code
Section 401(a)(17) limit; provided that the Committee may from
time to time and in a uniform and nondiscriminatory manner set
alternative limits based on one or more of the following:
<Page 40>
(1) Compensation with respect to a payroll period
with regard to whether the Participant has reached the Code
Section 401(a)(17) limit;
(2) Compensation earned by a Participant year-to-date
without regard to whether the Participant has reached the Code
Section 401(a)(17) limit;
(3) Compensation earned by a Participant year-to-date with
regard to whether the Participant has reached the Code Section
401(a)(17) limit;
(4) a flat dollar amount;
(5) a prorated portion of the limitation in effect under
Code Section 402(g) for a Plan Year;
(6) a higher percentage than specified in Section 4.1; or
(7) varying percentages for different categories of
Compensation; provided that in no event shall a Participant's
aggregate Elective Contributions for a Plan Year exceed
the percentage of Compensation stated in Section 4.1,
taking into account the limitations of Code Sections
402(g) and 401(a)(17) for such Plan Year.
(c) Initial and Changed Compensation Reduction Elections. An
Active Participant may make or change a Compensation Reduction
Election by filing with the Committee notice of such election or
change on such form at such time and in such manner as the
Committee may prescribe from time to time, 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 Compensation Reduction Election shall be made at
such times and upon such prior notice as the Committee shall
permit and shall be effective at such times as designated by the
Committee.
(d) Revocations of Compensation Reduction Elections. An Active
Participant may revoke a Compensation Reduction Election with
respect to Compensation not paid or payable as of the date of
such revocation. Revocation of a Compensation Reduction Election
may be made at such times and upon such prior notice as the
Committee shall permit and shall be effective at such times as
designated by the Committee.
(e) Contribution and Limitations on Contribution of Elected
Amounts. Each Employer shall reduce each Participant's
Compensation and contribute to the Trust, as an Elective
Contribution on behalf of each Active Participant employed by the
Employer, the amount by which such Participant's Compensation, as
applicable, has been reduced pursuant to such Participant's
Compensation Reduction Election. The Committee may, in its
discretion, impose such rules,
<Page 41>
regulations and limitations on the
amount of Elective Contributions that may be elected, including
limitations on the amount of Elective Contributions that may be
elected by Participants whose Compensation for the prior Plan
Year exceeded the amount specified in Section 2.28(b)(i) (the
Highly Compensated Employee dollar limit) or any subgroup thereof
to ensure that the limitations of Sections 5.1(b), 5.2, and 5.3
are not exceeded.
(f) Deadline for Elective Contributions. Each Employer shall
contribute the Elective Contributions for each payroll period
during a Plan Year to the Trust as soon as reasonably possible
after the Participant's Compensation has been reduced, but not
later than the latest date as may be permitted under the
Department of Labor Regulations and Treasury Regulations and
rulings of the Internal Revenue Service and the Department of
Labor.
(g) Allocation of Elective Contributions. As of each Valuation
Date, Elective Contributions contributed to the Trust since the
immediately preceding Valuation Date shall be allocated to the
Elective Contribution Account of each Active Participant on whose
behalf such Elective Contributions were made.
4.2 Employer Matching Contributions.
(a) Employer Matching 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 Active Participant's
Elective Contributions not in excess of three percent (3%) of the
Active Participant's Compensation for such Plan Year, or such
larger or smaller percentage as the Company may determine.
Unless otherwise determined by the Committee, Employer Matching
Contributions shall be based on the Elective Contributions of
each Active Participant for each payroll period; provided that no
later than the deadline described in Section 4.2(b), each
Employer shall contribute additional Employer Matching
Contributions ("Year End Adjustment") on behalf of each Active
Participant to the extent necessary so that the aggregate
Employer Matching Contributions allocated to such Active
Participant for the Plan Year equal fifty percent (50%) of such
Active Participant's aggregate Elective Contributions for the
Plan Year not in excess of three percent (3%) of such Active
Participant's Compensation for the Plan Year.
(b) Deadline for Employer Matching Contributions. Employer
Matching Contributions for a Plan Year shall be delivered to the
Trust not later than the last day of the following Plan Year;
provided, however, that if the Employer intends to deduct such
Employer Matching Contributions, such Employer Matching
Contributions shall be delivered to the Trust 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.
<Page 42>
(c) Allocation of Employer Matching Contributions. As of each
Valuation Date, Employer Matching Contributions contributed to
the Trust since the immediately preceding Valuation Date shall be
allocated to the Employer Matching Contribution Account of each
Active Participant on whose behalf they were made.
4.3 Employer Profit Sharing Contributions.
(a) Employer Profit Sharing Contributions.
(1) Company Contributions. The Company shall
contribute to the Trust for each Plan Year for Active
Participants such amount, if any, as shall be determined by the
Board of Directors ("Company Contributions"); provided that the
Company shall not contribute an amount for any Plan Year greater
than the maximum amount deductible from income by the Company
under the provisions of the Code.
(2) Other Employer Contributions. Each Employer other than
the Company shall contribute an amount for each Plan Year equal
to the product of the total Compensation for such Plan Year of
Active Participants multiplied by a fraction, the numerator of
which is the Company Contribution for such Plan Year and the
denominator of which is the total Compensation of all Active
Participants.
(b) Allocation of Employer Profit Sharing Contributions. As of
the last day of each Plan Year, the Employer Profit Sharing
Contributions and Forfeitures for the Plan Year shall be
allocated to the Employer Profit Sharing Account of each Active
Participant in an amount equal to the product of (i) multiplied
by (ii) where:
(1) is the Employer Profit Sharing Contributions and
Forfeitures for the Plan Year, and
(2) is a fraction, the numerator of which is the Active
Participant's Compensation for the Plan Year and the denominator
of which is the total Compensation of all Active Participants for
such Plan Year.
(c) Deadline for Employer Profit Sharing Contributions.
Employer Profit Sharing Contributions for each Plan Year shall be
delivered to the Trust not later than the last day of the
following Plan Year; provided, however, that if the Employer
intends to deduct such Employer Profit Sharing Contributions,
such Employer Profit Sharing Contributions shall be delivered to
the Trust 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.
<Page 43>
4.4 Special Contributions; QNECs and QMACs.
(a) QNECs and QMACs. For each Plan Year, the Company may elect
to have the Company and the other Employers make a special
contribution to the Trust in such amount (if any) as the Company
may determine as QNECs and/or QMACs. In any Plan Year in which
the Company elects to have such a QNEC or QMAC made, each
Employer shall contribute a fractional portion of the QNEC or
QMAC in such amount as the Company shall determine to be
appropriate in the circumstances.
(b) Deadline for QNECs or QMACs. QNECs or QMACs for a Plan Year
shall be delivered to the Trust on or before the last day of the
following Plan Year; provided, however, that if the Employer
intends to deduct such QNEC or QMAC for such Plan Year, the QNEC
or QMAC shall be delivered to the Trust 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 QNECs or QMACs. As of the last day of each
Plan Year, QNECs or QMACs made to the Plan for the Plan Year
shall be allocated to the QNEC/QMAC Subaccount of the Elective
Contribution Account of each Non-Highly Compensated Participant
with an Accrued Benefit consisting of other than Rollover
Contributions and Trust-to-Trust Transfers, as determined by the
Company in its discretion, in whichever one or more of the
following methods as the Company shall determine:
(1) Compensation-Based QNEC.
(A) A Compensation-based QNEC may be allocated to the QNEC/QMAC
Subaccount of each Non-Highly Compensated Participant who has
Compensation not in excess of an amount specified by the
Company in the ratio that such Participant's Compensation for
the Plan Year bears to the total Compensation of all such
Participants for the Plan Year.
(B) A Compensation-based QNEC may be allocated to the QNEC/QMAC
Subaccount of each Non-Highly Compensated Participant in the
ratio that such Participant's Compensation for the Plan Year up
to an amount specified by the Company bears to the total
Compensation of all such Participants for the Plan Year up to an
amount specified by the Company.
(2) Per Capita-Based QNEC. A per capita-based QNEC
may be allocated to the QNEC/QMAC Subaccount of each Non-Highly
Compensated Participant in an amount equal to the total per
capita-based QNEC divided by the total number of such
Participants for the Plan Year.
<Page 44>
(3) Match-Based QMAC. A match-based QMAC may be allocated
to the QNEC/QMAC Subaccount of each Non-Highly Compensated
Participant in the ratio that the amount of Employer Matching
Contributions made to the Plan for such Plan Year on behalf of
such Participant bears to the total amount of Employer Matching
Contributions made to the Plan for such Plan Year on behalf of
all such Participants.
(4) Elective Contribution-Based QMAC. An Elective
Contribution-based QMAC may be allocated to the QNEC/QMAC
Subaccount of each Non-Highly Compensated Participant in the
ratio that the amount of Elective Contributions made to the Plan
for such Plan Year on behalf of such Participant bears to the
total amount of Elective Contributions made to the Plan for such
Plan Year on behalf of all such Participants.
4.5 Rollover Contributions into the Plan. The Committee may, 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. Prior to the acceptance of a Rollover Contribution,
the Committee may require the submission of evidence so that it
may be reasonably satisfied that such Rollover Contribution
qualifies as a Rollover Contribution. The Committee may impose
such conditions as it may determine on the acceptance of Rollover
Contributions, including but not limited to limitations or
restrictions on non-cash Rollover Contributions and a reasonable
determination that the Eligible Employee is likely to become a
Participant. If the 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. All Rollover Contributions are fully
vested and nonforfeitable.
4.6 Trust-to-Trust Transfers to the Plan. In the sole
discretion of the Committee, the Plan may accept the direct
transfer of assets and liabilities from another qualified
retirement plan, as set forth in an associated schedule created
by the Committee, which schedule shall become part of the Plan.
All optional forms of benefit available under the transferor plan
with respect to Trust-to-Trust Transfers to the Plan that are
required to be preserved shall be preserved. In addition, all
Transfer Accounts which are attributable to elective
contributions or to qualified non-elective contributions or
qualified matching contributions (within the meaning of Treasury
Regulations Section 1.401(k)-1(g)(13)) shall be subject to the
distribution restrictions described in Treasury Regulations
Section 1.401(k)-1(d).
4.7 Reemployment Following Qualified Military Leave. The
provisions of this Section 4.7 shall be effective as of December
12, 1994 and shall apply to each person reemployed by an Employer
after a Qualified Military Leave; provided that any Employee
seeking benefits under this Section 4.7 shall notify the
Committee of his
<Page 45>
eligibility and provide such information and
proof, including but not limited to his certificate of service,
as shall reasonably be required to confirm the Employee's
eligibility.
(a) Contributions. The Accounts of each such reemployed veteran
("Reemployed Veteran") shall be credited with contributions (but
not earnings except as he becomes entitled to them under the Plan
after the date of reemployment) as follows:
(1) Elective Contributions. The Elective
Contribution Account of each Reemployed Veteran shall be credited
with Elective Contributions as provided in this Section 4.7(a).
At any time during the period beginning on the date of
reemployment and having the same length as the lesser of
(A) three times the period of the Reemployed Veteran's Qualified
Military Leave or (B) five years, the Reemployed Veteran may make
Elective Contributions from his Compensation (in addition to the
Elective Contributions he may make pursuant to Section 4.1) with
respect to his period of Qualified Military Leave; provided that
the amount of such contributions shall not exceed the amount the
person would have been permitted to elect to contribute had the
person remained continuously employed and been an Eligible
Employee throughout the period of Qualified Military Leave.
(2) Matching Allocations. If a Reemployed Veteran makes
additional Elective Contributions under Section 4.7(a)(1)
("Additional Elective Contributions"), Employer Matching
Contributions in accordance with Section 4.7(a)(2) shall be
credited to the Reemployed Veteran's Elective Contribution
Account had such Additional Elective Contributions been made
during the period of Qualified Military Leave and had the
Reemployed Veteran been an Eligible Employee with Compensation
during the period of Qualified Military Leave. Such allocations
shall be made from special contributions made for this purpose by
the Employer.
(3) Employer Profit Sharing Contributions. Each Reemployed
Veteran's Employer Profit Sharing Contribution Account shall be
credited with the amount he would have received under Section 4.3
if he had been an Eligible Employee of an Employer with
Compensation during the period of Qualified Military Leave. Such
allocations shall be made from special contributions made for
this purpose by the Employer.
(b) Participant Loans. A Participant's loan repayments may be
suspended during a Qualified Military Leave pursuant to Section
6.14(c)(2).
(c) Service and Position with the Employer. In determining the
contributions to which each such Reemployed Veteran is entitled
under Section 4.7(a), he shall be credited with service hereunder
during his period of Qualified Military Leave. In
<Page 46>
addition, each
Reemployed Veteran shall be deemed to have been employed in the
same position he would have been in had he not had the period of
Qualified Military Leave.
(d) Break in Service. After reemployment, such a person shall
not be treated as having incurred a Break in Service by reason of
such person's period(s) of Qualified Military Leave.
(e) Compensation. For purposes of determining the amount of a
Reemployed Veteran's contributions under Section 4.7(a), the
Reemployed Veteran shall be treated as receiving Compensation
during the period of Qualified Military Leave equal to (1) the
Compensation he would have received during such period if he were
not on Qualified Military Leave, determined based on the rate of
pay the Reemployed Veteran would have received from the Employer
but for the absence during the period of Qualified Military
Leave, or (2) if the Compensation the Reemployed Veteran would
have received during such period was not reasonably certain, the
Reemployed Veteran's average compensation from the Employer
during the 12-month period immediately preceding the Qualified
Military Leave (or, if shorter, the period of employment
immediately preceding the Qualified Military Leave).
(f) Application of Nondiscrimination Tests and Contribution
Limits. The ADP Test under Section 5.1(b), the ACP Test under
Section 5.2, and the contribution limitations under Section 5.6
for a prior Plan Year shall not be recalculated to take into
account contributions made under this Section 4.7.
<Page 47>
ARTICLE 5.
Restrictions and Limitations on Contributions
5.1 Restrictions on Elective Contributions. Elective
Contributions of any Active Participant shall not exceed the
Dollar Limit set forth in Section 5.1(a) or the amounts permitted
under the non-discrimination rules of Section 401(k) of the Code
as set forth in Section 5.1(b).
(a) Dollar Limitations. The sum of (1) the Participant's
Elective Contributions, (2) any elective contributions excluded
from the Participant's gross income made under a Related Plan and
(3) if the Participant shall notify the 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 for
any calendar year $10,500 (in 2000, 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"). If the sum of such amounts
exceeds the Dollar Limit for a calendar year, the 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 Elective Contributions (by first
distributing unmatched Elective Contributions then matched
Elective Contributions) for such calendar year (1) as requested
in writing by the Participant on or before the March 1 following
the close of such calendar year, or (2) as determined by the
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 5.5. Any Employer Matching Contributions
(including any net income and minus any loss allocable thereto
determined in accordance with Section 5.5) made with respect to
such distributed Elective Contributions shall be forfeited and
allocated in accordance with Section 4.7.
(b) Discrimination Limitations. Effective for the Plan Year
beginning December 1, 1997, and for all Plan Years beginning
thereafter, first the unmatched Elective Contributions and second
the matched Elective Contributions (together with the Employer
Matching Contributions made with respect to matched Elective
Contributions) made on behalf of the Highly Compensated
Participants for a Plan Year will be reduced to the extent the
Committee determines necessary to cause the Average ADP (as
defined in Section 5.1(c) below) of the group of Highly
Compensated Participants not to exceed the greater of the
following limits (the "ADP Test"):
(1) General Limit. The excess of the Average ADP for
the group of Highly Compensated Participants for such Plan Year
over the Average ADP for the group of Non-Highly Compensated
Participants with respect to the preceding Plan Year is not more
than two percentage points, and the Average ADP for the group of
Highly Compensated Participants for such Plan Year is not more
than the Average ADP for the group of Non-Highly Compensated
Participants with respect to the preceding Plan Year multiplied
by two; or
<Page 48>
(2) Alternative Limit. The Average ADP for the group of
Highly Compensated Participants for such Plan Year is not more
than the Average ADP for the group of Non-Highly Compensated
Participants with respect to the preceding Plan Year multiplied
by 1.25.
If the Committee so elects, it may apply the limits set
forth in paragraphs (1) and (2) of this Section 5.1(b)
by using the Average ADP of Non-Highly Compensated
Participants with respect to the Plan Year for which
the determination is made rather than with respect to
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 Committee determines necessary to
pass the ADP Test, Elective Contributions (and Employer
Matching Contributions allocated with respect to Elective
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
Elective Contributions of each Highly Compensated
Participant for the Plan Year in order for the Average ADP
of the Highly Compensated Participants for the Plan Year to
satisfy the ADP Test. Such amount shall be calculated by
first determining the dollar amount by which the Elective
Contributions of Highly Compensated Participants who have
the highest Actual Deferral Percentage (as defined in
Section 5.1(c)) would have to be reduced until the first to
occur of: (i) such Participants' Actual Deferral Percentage
would equal the Actual Deferral Percentage of the Highly
Compensated Participant or group of Highly Compensated
Participants with the next highest Actual Deferral
Percentage; or (ii) the Average ADP of all of the Highly
Compensated Participants, as recalculated after the
reductions made under this Step 1, satisfies the ADP Test.
Then, unless the recalculated Average ADP of the Highly
Compensated Participants satisfies the ADP Test, the
reduction process shall be repeated by determining the
amount of reductions which would have to be made to the
Elective Contributions of the Highly Compensated
Participants 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 Participant or group of Highly Compensated
Participants with the next highest Actual Deferral
Percentage; or (iv) the Average ADP of all of the Highly
Compensated Participants, after the prior reductions,
satisfies the ADP Test. This process is repeated until the
Average ADP of all of the Highly Compensated Participants,
after all reductions, satisfies the ADP Test.
Step 2: Determine the total dollar amount of reductions to
the Elective Contributions calculated under Step 1 ("Total
Excess Deferrals").
Step 3: Reduce the Elective Contributions of the Highly
Compensated Participants with the highest dollar amount of
Elective Contributions by the lesser of the dollar amount
which either (i) causes each such Highly Compensated
Participant's Elective Contributions to equal the dollar
amount of the Elective Contributions of the Highly
Compensated Participant or group of Highly Compensated
Participants with the next highest dollar amount of Elective
Contributions; or (ii) reduces the Highly Compensated
Participants' Elective Contributions by the Total Excess
Deferrals. Then, unless the total amount of reductions made
to Highly Compensated Participants' Elective Contributions
under this Step 3 equals the amount of the Total Excess
Deferrals, the reduction process shall be repeated by
reducing the Elective Contributions of the group of Highly
Compensated Participants with the highest dollar amount of
Elective Contributions, after the prior reductions made in
this Step 3, by the lesser of the amount which either:
(iii) causes such Highly Compensated Participants' Elective
Contributions after prior reductions made in this Step 3 to
equal the dollar amount of the Elective Contributions of the
Highly Compensated Participants with the next highest dollar
amount of Elective Contributions; or (iv) causes total
reductions to equal the Total Excess Deferrals. This
process is repeated with each successive group of Highly
Compensated Participants with the highest dollar amount,
after the prior reductions, of the Elective Contributions
until the total reductions made under this Step 3 equal the
Total Excess Deferrals.
<Page 49>
The 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 Elective
Contributions (including any income earned and minus any
loss allocable to such amounts determined in accordance with
Section 5.5) to the Highly Compensated Participants on whose
behalf such contributions were made. Any Employer Matching
Contributions reduced (including any income earned and minus
any loss allocable thereto determined in accordance with
Section 5.5) shall be forfeited and allocated in accordance
with Section 4.7.
Notwithstanding the foregoing, the amount of Elective
Contributions (and Employer Matching Contributions allocated
with respect to such Elective Contributions) that are
required to be reduced to comply with the provisions of this
Section 5.1(b) shall be reduced, but not below zero, by the
amount of Elective Contributions (and Employer Matching
Contributions allocated with respect to such Elective
Contributions) previously distributed (or forfeited) in
accordance with Section 5.1(a).
(c) Definitions of Average ADP and Actual Deferral Percentage.
(1)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.
(2)The "Actual Deferral Percentage" of an Active
Participant is the ratio of the amount of Elective 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 Committee to the extent not prohibited by
regulations prescribed by the Secretary of the Treasury or his
delegate, the sum of (i) Elective Contributions, and (ii) any
portion or all of the QNECs and QMACs 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.
<Page 50>
(d) Aggregation Rules. The Actual Deferral Percentage for any
Highly Compensated Participant for the Plan Year who is eligible
to have Elective 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 Regulations
Section 1.401(k)-1(g)(13)(i)) or qualified nonelective
contributions (within the meaning of Treasury Regulations 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 Elective Contributions, elective deferrals, qualified
matching contributions and qualified nonelective contributions
were made under this Plan. If a Highly Compensated Participant
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
Sections 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
5.1(b) and (c) 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.
5.2 Restrictions on Employer Matching Contributions. The
provisions in this Section 5.2 shall be effective for the Plan
Year beginning December 1, 1997 and for all Plan Years
thereafter. Notwithstanding Section 4.2(a), the Committee, in
its discretion, may prospectively disallow Employer Matching
Contributions on behalf of Participants whose Compensation for
the prior Plan Year exceeded the amount specified in
Section 2.28(b)(i) (the Highly Compensated Employee dollar
limit). Notwithstanding the provisions of Section 4.2(a),
Employer Matching Contributions for a Plan Year made on behalf of
Highly Compensated Employees shall be reduced to the extent the
Committee determines advisable to cause the Average ACP (as
defined in Section 5.2(c) below) of Highly Compensated
Participants not to exceed the greater of the following limits
(the "ACP Test"):
(a) General Limit. The excess of the Average ACP for Highly
Compensated Participants for such Plan Year over the Average ACP
of Non-Highly Compensated Participants with respect to the
preceding Plan Year is not more than two percentage points, and
the Average ACP of the Highly Compensated Participants for such
Plan Year is not more than the Average ACP of Non-Highly
Compensated Participants with respect to the preceding Plan Year
multiplied by two; or
(b) Alternative Limit. The Average ACP of the Highly
Compensated Participants for such Plan Year is not more than the
Average ACP of Non-Highly Compensated Participants with respect
to the preceding Plan Year multiplied by 1.25.
<Page 51>
If the Committee so elects, it may apply the limits set
forth in paragraphs (a) and (b) of this Section 5.2 by using
the Average ACP (as defined in Section 5.2(c)) of Non-Highly
Compensated Participants with respect to the Plan Year for
which the determination is made rather than with respect to
the preceding Plan Year; provided that such election may not
be changed except as provided by the Secretary of the
Treasury.
To the extent that the Committee, after giving effect
to any reduction in the amount of Elective Contributions and
Employer Matching Contributions pursuant to Section 5.1,
determines it necessary to pass the ACP Test, Employer
Matching Contributions shall be reduced for Highly
Compensated Participants 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
Employer Matching Contributions of Highly Compensated
Participants for the Plan Year in order for the Average ACP
of the Highly Compensated Participants to satisfy the ACP
Test. Such amount shall be calculated by first determining
the dollar amount by which the Employer Matching
Contributions of the Highly Compensated Participants 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
Participant or group of Highly Compensated Participants with
the next highest Actual Contribution Percentage; or (ii) the
Average ACP of all of the Highly Compensated Participants ,
as recalculated after the reductions made under this Step 1,
satisfies the ACP Test. Then, unless the Average ACP of the
Highly Compensated Participants, as recalculated after the
reductions made under this Step 1, satisfies the ACP Test,
the reduction process shall be repeated by determining the
dollar amount of reductions which would have to be made to
the Employer Matching Contributions of the group of Highly
Compensated Participants 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
Participant or group of Highly Compensated Participants with
the next highest Actual Contribution Percentage; or (iv) the
Average ACP of all of the Highly Compensated Participants,
after the prior reductions, satisfies the ACP Test. This
process is repeated until the Average ACP of all of the
Highly Compensated Participants, after all reductions,
satisfies the ACP Test.
Step 2: Next, the Committee shall determine the total
dollar amount of reductions to the Employer Matching
Contributions calculated under Step 1 ("Total Excess
Contributions").
Step 3: Finally, the Committee shall reduce the Employer
Matching Contributions of the Highly Compensated Participant
or group of Highly Compensated Participants with the highest
dollar amount of Employer Matching Contributions by the
lesser of the amount which either: (i) causes each such
Highly Compensated Participant's Employer Matching
Contributions to equal the dollar amount of the Employer
Matching Contributions of the Highly Compensated Participant
or group of Highly Compensated Participants with the next
highest dollar amount of Employer Matching Contributions; or
(ii) reduces the Highly Compensated Participants' Employer
Matching Contributions by the Total Excess Contributions.
Then, unless the total amount of reductions made to Highly
Compensated Participants' Employer Matching Contributions
under this Step 3 equals the amount of Total Excess
Contributions, the reduction process shall be repeated by
reducing the Employer Matching Contributions of the group of
Highly Compensated Participants with the highest dollar
amount of Employer Matching Contributions, after the prior
reductions made in this Step 3, by the lesser of the amount
which either: (iii) causes each such Highly Compensated
Participant's Employer Matching Contributions after prior
reductions made in this Step 3 to equal the dollar amount of
the Employer Matching Contributions of other Highly
Compensated Participants with the next highest dollar amount
of Employer Matching Contributions; or (iv) causes total
reductions to equal the Total Excess Contributions. This
process is repeated with each successive group of Highly
Compensated Participants with the highest dollar amount,
after the prior reductions, of the Employer Matching
Contributions made under this Step 3 until the total
reductions equal the Total Excess Contributions.
<Page 52>
The 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 Employer Matching Contributions reduced (including
any income earned and minus any loss allocable to such
amounts determined in accordance with Section 5.5), to the
Highly Compensated Participants on whose behalf such
contributions were made. Any non-vested Employer Matching
Contributions reduced (including any income earned and minus
any loss allocable thereto determined in accordance with
Section 5.5) shall be forfeited and allocated in accordance
with Section 4.7.
(c) Definitions of Average ACP and Actual Contribution
Percentage.
(1) 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.
(2) An Active Participant's "Actual Contribution
Percentage" is the ratio of the amount of Employer Matching
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 such Plan Year, or at the
discretion of the Committee to the extent not prohibited by
regulations prescribed by the Secretary of Treasury or his
delegate, the sum of (i) Employer Matching Contributions, and
(ii) any portion or all of the Elective Contributions or QNECs
and QMACs, to the extent not used in the ADP Test, 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.
(d) Aggregation Rules. The Actual Contribution Percentage for
any Highly Compensated Participant for the Plan Year who is
eligible to have Employer Matching 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
Employer Matching Contributions, employee nondeductible
contributions, and matching contributions were made under this
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 Section 5.2 shall be
applied by determining the Average ACP 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
requirements of Section 401(m) of the Code only if such plans
have the same plan year.
<Page 53>
5.3 Multiple Use of Sections 5.1(b) and 5.2. Notwithstanding
Sections 5.1(b) and 5.2, the sum of the Average ADP and the
Average ACP for a Plan Year of the Highly Compensated
Participants 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 with respect to the preceding Plan Year of
Non-Highly Compensated Participants for such year, or (2) the
Average ACP with respect to the preceding Plan Year of Non-Highly
Compensated Participants for such year;
(b) is two percent (2%) plus the lesser of the percentage
determined under Section 5.3(a)(1) or the percentage determined
under Section 5.3(a)(2), but in no event shall this percentage
exceed two hundred percent (200%) of the lesser of the percentage
determined under Section 5.3(a)(1) or the percentage determined
under Section 5.3(a)(2);
(c) is one hundred and twenty-five percent (125%) of the lesser
of (1) the Average ADP with respect to the preceding Plan Year of
Non-Highly Compensated Participants for such year, or (2) the
Average ACP for the preceding Plan Year of Highly Compensated
Participants for such year; and
(d) is two percent (2%) plus the greater of the percentage
determined under Section 5.3(a)(1) or the percentage determined
under Section 5.3(a)(2), but in no event shall this percentage
exceed two hundred percent (200%) of the greater of the
percentage determined under Section 5.3(a)(1) or the percentage
determined under Section 5.3(a)(2).
If the Committee so elects, it may apply the limits set
forth in this Section 5.3 by using the Average ADP and the
Average ACP of Non-Highly Compensated Participants with
respect to the Plan Year for which the determination is made
rather than with respect to 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 Committee determines it necessary in
order to satisfy the limitations of this Section 5.3, the
Committee may reduce or prospectively disallow Elective
Contributions or Employer Matching Contributions for Highly
Compensated Participants, including Elective Contributions
or Employer Matching Contributions already made for the Plan
Year, in accordance with the following steps:
<Page 54>
Step 1: The Committee shall determine the dollar amount of
the reductions which have to be made under this Section 5.3
so that the Multiple Use Test is met. Such amount shall be
calculated by first determining the dollar amount by which
the Elective Contributions (and the Employer Matching
Contributions allocated with respect to such Elective
Contributions), after any reductions made under Step 1 of
Sections 5.1(b) and 5.2, of the Highly Compensated
Participant who has the highest Aggregate Contribution
Percentage (as defined in Section 5.3(e) below) would have
to be reduced until his Aggregate Contribution Percentage
equals either: (i) the Aggregate Contribution Percentage of
the Highly Compensated Participant or group of Highly
Compensated Participants with the next highest Aggregate
Contribution Percentage; or (ii) the Average Aggregate
Contribution Percentage of the Highly Compensated
Participants, as calculated after such reduction, satisfies
the Multiple Use Test. Then, unless the Average Aggregate
Contribution Percentage of the Highly Compensated
Participants, as recalculated after the reductions made
under Step 1 of Sections 5.1(b), 5.2 and 5.3, 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 Elective Contributions (and the Employer
Matching Contributions allocated with respect to such
Elective Contributions) of Highly Compensated Participants
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 Participant or group of Highly Compensated
Participants with the next highest Aggregate Contribution
Percentage; or (iv) the Average Aggregate Contribution
Percentage of all Highly Compensated Participants, after all
prior reductions made under Sections 5.1(b), 5.2(b) and 5.3,
satisfies the Multiple Use Test. This process is repeated
until the Average Aggregate Contribution Percentage of all
of the Highly Compensated Participants, after all
reductions, satisfies the Multiple Use Test.
Step 2: Next the Committee shall determine the total dollar
amount of reductions to the Elective Contributions and
Employer Matching Contributions as calculated under Step 1
("Total Reduction Amount").
Step 3: Once the Total Reduction Amount has been
determined, the Elective Contributions and Employer Matching
Contributions ("Aggregate Contributions") of the Highly
Compensated Participant with the highest dollar amount of
Aggregate Contributions, after any reductions made in Step 3
of Section 5.1(b) or 5.2, shall be reduced by the lesser of
the amount which either: (i) causes such Highly Compensated
Participant's Aggregate Contributions to equal the Aggregate
Contributions of the Highly Compensated Participant or group
of Highly Compensated Participants with the next highest
dollar amount of Aggregate Contributions; or (ii) reduces
the Highly Compensated Participant'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
Participants with the highest dollar amount of Aggregate
Contributions by the lesser of the amount which either:
(iii) causes such Highly Compensated Participants' Aggregate
Contributions to equal the dollar amount of Aggregate
Contributions of the Highly Compensated Participant or group
of Highly Compensated Participants 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 Participants with 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.
<Page 55>
(e) Definitions of Average Aggregate Contribution Percentage and
Aggregate Contribution Percentage.
(1) 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.
(2) An Active Participant's "Aggregate Contribution
Percentage" for a Plan Year shall be the sum of such Active
Participant's Actual Deferral Percentage and Actual Contribution
Percentage for the Plan Year.
5.4 Order of Application of Limitations of Sections 5.1(a),
5.1(b), 5.2, 5.3 and 5.6. Section 5.1(a) shall be first applied
to contributions under the Plan; second, Section 5.1(b) shall be
applied to contributions under the Plan; third, Section 5.2 shall
be applied to contributions under the Plan; and, finally,
Section 5.3 shall be applied to contributions under the Plan.
Sections 5.1(a), 5.1(b), 5.2 and 5.3 shall be applied after
application of Section 5.6.
5.5 Allocation of Income, Gain or Loss. Any income, gain or
loss attributable to contributions distributed or forfeited
pursuant to Sections 5.1(b) and 5.2 shall be distributed or
forfeited, as applicable. Such distributable or forfeitable
income, gain or loss shall be determined by the Committee 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 ("Permitted Method"); provided that the
Permitted 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. Unless the
Committee uses another Permitted Method for determining
allocation of income, gain or loss, the following methods shall
apply to Sections 5.1(b) and 5.2:
(a) Allocation of Income for Section 5.1(b). Income equal to
the sum of the amounts determined under (1) and (2) below shall
be allocated to and distributed with any amounts distributed to a
Participant as follows:
(1) Income for Plan Year. Income or loss for a
completed Plan Year shall equal the net income for the Plan Year
allocable to a Participant's Elective Contribution Account (prior
to the distribution of any excess contributions) multiplied by a
fraction, the numerator of which is the amount of Section
401(k)(3) Contributions so distributed and the denominator of
which is the sum of (i) the balance of such Account as of the
last day of the Plan Year (prior to distribution of any
Section 401(k)(3) Contribution for such Plan Year and prior to
allocation of income, gains, losses and expenses thereto) plus
(ii) the contributions to such Account, including distributed
contributions, for the Plan Year.
<Page 56>
(2) Income for Period Between End of Plan Year and
Distribution. No income shall be distributed with respect to the
period between the end of the Plan Year and the date of
distribution.
(b) Allocation of Income for Section 5.2. Income equal to the
sum of the amounts determined under (1) and (2) below shall be
allocated to and distributed with any amounts distributed to a
Participant as follows:
(1) Income for Plan Year. Income or loss for a
completed Plan Year shall equal the net income for the Plan Year
allocable to a Participant's Elective Contribution Account to
which Section 401(m) Contributions were allocated for the Plan
Year (prior to the distribution of any excess contributions)
multiplied by a fraction, the numerator of which is the amount of
Section 401(m) Contributions so distributed from such Account and
the denominator of which is the sum of (i) the balance of such
Account as of the last day of the Plan Year (prior to
distribution of any Section 401(m) Contribution for such Plan
Year and prior to allocation of income, gains, losses and
expenses thereto) plus (ii) the contributions to such Account,
including distributed contributions for the Plan Year.
(2) Income for Period Between End of Plan Year and
Distribution. No income shall be distributed with respect to the
period between the end of the Plan Year and the date of
distribution.
5.6 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 5.6(b)(1) below) for any Plan Year shall
not exceed his Maximum Annual Additions (as defined in Section
5.6(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 5.6(c) by the amount necessary to eliminate such excess
(the "Annual Excess").
(b) Definitions.
<Page 57>
(1) "Annual Additions" of a Participant for a Plan
Year means the sum of the following:
(A) Elective Contributions for the Plan Year allocated to the
Participant's Elective Contribution Account,
(B) Employer Matching Contributions for the Plan Year allocated
to the Participant's Employer Matching Contribution Account,
(C) Employer Profit Sharing Contributions, Forfeitures, and
Minimum Employer Contributions (as defined in Article 11) for the
Plan Year allocated to the Participant's Employer Profit Sharing
Contribution Account,
(D) QNECs or QMACs for the Plan Year allocated to the
Participant's Elective 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, and
(F) contributions allocated to any individual medical account
(as defined in Code Section 401(h)) established for the
Participant which 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 5.6(b)(2)(A)
shall not apply to any amounts treated as an Annual Addition
under this Section 5.6(b)(1)(F).
Rollover Contributions and Trust-to-Trust Transfers
shall not be included as part of a Participant's Annual
Additions.
(2)"Maximum Annual Additions" of a Participant for a
Plan Year means the lesser of (A) and (B) below:
(A) Percentage Limitation. 25% of the Participant's
Compensation during the Plan Year; or
(B) Dollar Limitation. $30,000 (in 2000, 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).
<Page 58>
(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 Elective Contributions. The
Participant's unmatched Elective Contributions for the Plan Year
shall be reduced to the extent necessary to eliminate the Annual
Excess.
(2) Matched Elective Contributions and Related Employer
Matching Contributions. If any Annual Excess remains, the
Participant's matched Elective Contributions and the related
Employer Matching Contributions for the Plan Year shall be
reduced in proportionate amounts to the extent necessary to
eliminate the Annual Excess.
(3) Employer Profit Sharing Contributions. If any Annual
Excess remains, the Participant's Employer Profit Sharing
Contributions for the Plan Year shall be reduced to the extent
necessary to eliminate the Annual Excess.
(4) QNECs or QMACs. If any Annual Excess remains, the
Participant's QNECs or QMACs for the Plan Year shall be reduced
to the extent necessary to eliminate the Annual Excess.
Any Elective Contributions reduced or eliminated under
this Section 5.6 shall be distributed to the
Participant. Any allocations of Employer Matching
Contributions, Employer Profit Sharing Contributions
and QNECs or QMACs reduced or eliminated under this
Section 5.6 shall be held, subject to the limits of
this Section 5.6, in a suspense account and applied in
the next succeeding Plan Year to reduce the Employer
Matching Contributions, Employer Profit Sharing
Contributions and QNECs or QMACs 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.
<Page 59>
5.7 No Non-Deductible Contributions. Notwithstanding the
provisions of Sections 4.1 and 4.5, no Employer shall make any
contributions for any Plan Year in excess of the maximum amount
deductible from income by the Employer for the Plan Year under
the provisions of the Code.
ARTICLE 6.
Benefits
6.1 Payment of Benefits in General. Subject to the special
rules applicable to a Participant's Trust-to-Trust Account set
forth in an associated schedule, a Participant's benefits under
this Plan shall be payable in accordance with the provisions of
this Article. Except as otherwise specifically provided in this
Article, the provisions of this Article shall apply to all
distributions or withdrawals occurring on or after the Effective
Date, including distributions with respect to Participants who
had a Termination of Employment prior to the Effective Date. All
distributions shall be paid in cash.
6.2 Payment of Vested Accrued Benefit on Termination of
Employment.
(a) Method of Payment. 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, in installments in
accordance with Section 6.6, or a direct rollover (as described
in Section 6.11), to the Participant (or the Participant's
eligible retirement plan), commencing no more than a reasonable
period after the Valuation Date coinciding with or next following
the later of (1) the Participant's Termination of Employment or
(2) his Normal Retirement Date, but not later than the
Participant's Required Beginning Date; provided, however, that a
Participant who has a Termination of Employment for reasons other
than retirement on or after his Normal Retirement Date,
Disability, or death shall not be entitled to elect installment
payments commencing before his Normal Retirement Date.
(b) Payment in Absence of an Election. If the Participant fails
to elect a method of payment by the Required Beginning Date, the
vested Accrued Benefit shall commence to be paid in a lump sum on
the Participant's Required Beginning Date.
(c) Changes in Method and Timing of Payments. A Participant may
elect to change the method and timing of payments within the
limitations of this Section 6.2.
<Page 60>
6.3 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 6.8), the Trustee shall
distribute the Participant's vested Accrued Benefit in the form
of a single lump sum, installments in accordance with Section
6.6, or a direct rollover (as described in Section 6.11), or any
combination thereof, to the Participant's surviving spouse, as
the surviving spouse may elect, 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 6.12 and subject to Section 6.7.
(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 6.8) 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 single lump sum, or installments in accordance with
Section 6.6, as the Participant's designated Beneficiary may
elect.
(c) Period of Distribution. Notwithstanding the foregoing
Sections of this Article 6, if a Participant dies and if at the
time of his death such Participant has not attained his Required
Beginning 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;
provided that if the surviving spouse or other Beneficiary or
Beneficiaries elect (if they are not prohibited by an election of
the Participant from so electing) to receive the balance of the
Participant's vested Accrued Benefit in the form of installments
over a period permitted under Section 6.6, but not exceeding the
life expectancy of the surviving spouse or Beneficiary, as
applicable, payment of such installments must commence no later
than (1) December 31 of the calendar year immediately following
the calendar year in which the Participant died, or (2) if the
Beneficiary is the Participant's surviving spouse, the later of
such December 31, or the December 31 of the calendar year in
which the Participant would have attained age 70 1/2.
Notwithstanding the foregoing, if the Participant
dies after he has attained his Required Beginning Date
and after distribution of his vested Accrued Benefit
has commenced in the form of installments, the balance
of his vested Accrued Benefit, if any, shall be
distributed to his surviving spouse or other
Beneficiary or Beneficiaries at least as rapidly as
under the installment schedule in effect immediately
prior to the Participant's death.
<Page 61>
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 6.3(c), distributions shall be made in
accordance with this Section 6.3(c) as if the surviving
spouse were the Participant.
If a Beneficiary has commenced to receive a
distribution under this Section 6.3(c), and such
Beneficiary dies more than one (1) year after the
Participant's death (or, if later, dies after the date
on which the Participant would have attained the age of
70 1/2 years, if the Beneficiary is the Participant's
surviving spouse), but before the entire vested Accrued
Benefit has been distributed, any subsequent
Beneficiary shall receive a distribution at least as
rapidly as under the distribution method in effect upon
the Beneficiary's death.
(d) Amount Paid to a Child. Any amount paid to a child, in
accordance with regulations prescribed by the Secretary of the
Treasury, shall be treated as if it had been paid to the
Participant's surviving spouse if such amount will become payable
to the surviving spouse upon such child reaching majority (or
such other events as the Secretary of the Treasury may by
regulations prescribe).
(e) Designation of Beneficiary. Subject to Section 6.8, the
Participant may select or change his Beneficiary from time to
time by filing a Beneficiary designation in writing with the
Committee. No designation of Beneficiary or change of
Beneficiary shall be effective until it is received by the
Committee and, if applicable, until the consent of the
Participant's spouse (in accordance with Section 6.8) is received
by the Committee. A designation of Beneficiary or change of
Beneficiary shall not be effective if received more than sixty
(60) days after the death of the Participant. If a Participant
shall fail to file a valid 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 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.
6.4 Participant Withdrawals. A Participant may, in accordance
with Section 6.12 and such rules as the Committee may impose,
withdraw all or any portion of his Accounts pursuant to (a) or
(b) below. The Committee shall establish rules relating to the
order in which funds shall be withdrawn from Accounts or
Subaccounts.
<Page 62>
(a) Withdrawal After Age 59 1/2. A Participant who has attained
age 59 1/2 may withdraw, for any reason, all or any portion of his
vested Accounts.
(b) Hardship Withdrawal. A Participant may request a withdrawal
for reasons of Hardship of all or any portion of his vested
Accounts, other than his QNEC/QMAC Subaccount and any income or
gain credited to his Elective 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;
(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 employer
stock granted under an equity incentive or any similar plan
maintained by an Employer or any Related Entity if such options
are currently exercisable and if the fair market value of
employer stock exceeds the exercise price of the option;
(3) Twelve Month Suspension of Elective Contributions. The
Participant's Elective 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 Entity shall be suspended for a period of
twelve (12) months following the receipt of the Hardship
withdrawal. Following the expiration of the twelve (12)-month
period, the Participant shall be required to make a new election
pursuant to Section 4.1 in order to resume Elective Contributions
following such suspension; and
(4) Limitation on Participant Contribution in the Year
Following the Hardship Withdrawal. The Elective 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 5.1(a) for such next taxable year
less the amount of such Participant's Elective Contributions
under the Plan and elective deferrals under any Related Plan for
the taxable year of the Hardship withdrawal.
<Page 63>
6.5 Vesting.
(a) Fully Vested Accounts. A Participant shall always be fully
vested in his Elective Contribution Account and his Rollover
Contribution Account.
(b) 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.
(c) Other Termination. Upon Termination of Employment on or
after June 1, 2000 and prior to Normal Retirement Date, death or
Disability, and except as provided in Section 6.5(a), the vested
portion of a Participant's Accrued Benefit attributable to his
Employer Profit Sharing Contribution Account and Trust-to-Trust
Transfer Account shall consist of:
(1) a percentage ("Vested Percentage") of the balance
of the Participant's Employer Profit Sharing Contribution Account
determined in accordance with the Vesting Schedule specified
below:
Years of Vested
Vesting Service Percentage
1 Year 20%
2 Years 40%
3 Years 60%
4 Years 80%
5 Years 100%
(2) unless fully vested at the time of such transfer,
the balance of the Participant's Trust-to-Trust Account shall be
vested according to the schedule created pursuant to Section 4.6.
(d) 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 Break
in Service. For this purpose, a Participant who has a
Termination of Employment when his Vested Percentage in his
Accrued Benefit is zero (0) shall be deemed to have received a
distribution of the balance of the Participant's Accounts as of
his Termination of Employment.
<Page 64>
(e) Return to Employment. If a Participant or a former
Participant resumes service with an Employer as an Employee
before incurring five (5) consecutive Breaks in Service, the
amount forfeited shall be reinstated to the Participant's or
former Participant's Employer Profit Sharing Contribution
Account, unadjusted for gains or losses occurring subsequent to
the distribution, out of Employer contributions in an amount
sufficient to restore any such forfeited Accounts; 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 (5) years after the former
Participant resumes employment with an Employer as an Employee or
(ii) the completion of five (5) consecutive Breaks in Service
after the date of the prior distribution.
If a former Participant resumes employment with an
Employer after incurring five (5) consecutive Breaks in
Service, the amounts forfeited under Section 6.5(d)
shall not be reinstated.
If a Participant who is not fully vested in his
Employer Profit Sharing 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 five (5) consecutive Breaks
in Service, then (i) the vested portion of the
Participant's Employer Profit Sharing Contribution
Account attributable to Employer Profit Sharing
Contributions made prior to the Participant's
Termination of Employment shall be fully vested and
shall be held in the Pre-Break Employer Profit Sharing
Contribution Subaccount of the Participant's Employer
Profit Sharing Account, and (ii) the Participant's
Employer Profit Sharing Contributions and Forfeitures,
if any, allocated after the Participant's reemployment
shall vest in accordance with the provisions of
Sections 6.5(b) and (c) and shall be held in the Post-
Break Employer Profit Sharing Contribution Subaccount
of the Participant's Employer Profit Sharing
Contribution Account, as applicable.
(f) Allocation of Forfeitures; Source of Reinstatement.
Forfeitures arising hereunder shall be applied to reinstate the
Accounts of Participants as required under Section 6.5(e). Any
Forfeitures remaining after application of the preceding sentence
shall be allocated in the same manner as Employer Profit Sharing
Contributions are allocated under Section 4.3(b). If Forfeitures
are insufficient in any Plan Year to reinstate the Accounts of
Participants as required under Section 6.5(e), the Employers
shall contribute any additional amount needed to satisfy the
requirements of Section 6.5(e).
6.6 Installment Payments. Installments elected pursuant to
Section 6.2 or 6.3 shall be paid quarterly or annually, as
elected by the Participant or his Beneficiary, over a period
certain which period shall in no event be in excess of the life
expectancy of the Participant, the joint and last survivor life
expectancy of the Participant and his Beneficiary or the life
expectancy of the Beneficiary (if the Beneficiary is receiving
the installments), if such Beneficiary is an individual, nor, if
installments are paid to the Participant and if the Participant's
spouse is not his Beneficiary, shall such period be longer than
the applicable period prescribed by the Secretary of the Treasury
in regulations issued pursuant to Section 401(a)(9)(G) of the
Code pertaining to the minimum distribution incidental benefit
requirement.
<Page 65>
6.7 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 or commence later than a Participant's Required
Beginning Date. In the event a Participant who is a five percent
(5%) owner (as determined under Code Section 416(i)) continues to
be employed by an Employer or Related Entity after his Required
Beginning Date, such Participant shall begin receiving
distributions in the minimum amount required under Code
Section 401(a)(9).
6.8 Spousal Consent to a Beneficiary Designation.
(a) Requirements for Valid Spousal Consent. A valid spousal
consent to the Participant's naming of a Beneficiary other than
his spouse shall be:
(1) in writing acknowledging the effect of the
consent;
(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 the Plan Administrator 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, and further
provided that the Committee may provide a spousal
consent form which provides that such consent, once
given, is irrevocable.
(b) Treatment of Former Spouse as a Spouse Pursuant to a
Qualified Domestic Relations Order ("QDRO"). To the extent
provided in any QDRO as defined in Section 414(b) of the Code, if
married to the Participant for at least one year, the former
spouse of a Participant shall be treated as the surviving spouse
of such Participant for purposes of Section 6.3 and providing
consent in accordance with this Section 6.8.
<Page 66>
6.9 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, or if any person shall have power of attorney with
respect to the withdrawal or distribution of such Participant's
or Beneficiary's benefits from an employee benefit plan, any
benefits to which such Participant or Beneficiary is entitled
shall be payable to such conservator, guardian, other person
legally charged with his care, or other person with power of
attorney. An Employer, the Trustee, the 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.
6.10 Lump Sum Payment Without Election. Notwithstanding any
other provision of this Article 6 and subject to Section 6.11, if
a Participant or his surviving spouse or other Beneficiary is
entitled to a distribution (including distributions with respect
to Participants who had a Termination of Employment prior to June
1, 2000) and if the value of a Participant's vested Accrued
Benefit does not exceed $5,000 (effective for distributions made
on or after June 1, 2000), the Committee shall direct the
immediate distribution of such benefit regardless of any election
or consent of the Participant, his spouse or other Beneficiary.
After a Participant's death, immediate distribution shall be made
to any Beneficiary (other than a surviving spouse) without such
Beneficiary's consent and regardless of whether the amount of the
distribution exceeds $5,000. Unless otherwise provided in a
QDRO, an immediate distribution shall be made to an alternate
payee in any amount without the alternate payee's consent if
distribution could be made to the Participant if the Participant
had a Termination of Employment.
6.11 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 QDRO (a "Distributee") may elect, at such time and in
such manner as prescribed by the Committee, to have 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.
6.12 Request for Withdrawal or Distribution. Except as otherwise
provided to the contrary in this Article 6, a distribution or
withdrawal shall be paid only if the Participant or Beneficiary
files a request for a distribution or withdrawal with the
Committee in accordance with such rules and regulations as the
Committee may prescribe. A distribution or withdrawal shall be
paid within a reasonable period after the Committee receives a
valid request for a distribution or withdrawal.
6.13 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.
<Page 67>
6.14 Participant Loans. This Section 6.14 shall become effective
on the later of July 1, 2000 or the first day commencing after
the end of the Transition Period:
(a) Loan Amount. Upon proper application of a Participant after
the date specified in loan procedures adopted by the Committee,
the Committee shall grant a loan to such Participant, for any
reason, in such amount and for such period as the 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:
(A) the Participant's highest outstanding balance of loans from
the Plan and all Related Plans during the one-year period
endin 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.
(b) Loan Terms. Any loan made under this Section 6.14 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) Leaves of Absence. Notwithstanding the foregoing
provisions of this Section 6.14(c), a Participant's loan payments
may be suspended for a period of up to one year while the
Participant is on an unpaid Authorized Leave of Absence or unpaid
Family Leave; provided that the loan must be repaid within the
maximum term specified in Section 6.14(b) and the amount of each
periodic loan payment due after the earlier of the Participant's
resumption of active service or the first anniversary of the
commencement of such leave may not be less than the amount of
each periodic loan payment immediately prior to the commencement
of such leave.
<Page 68>
(2) Military Leave. Notwithstanding the provisions of
Section 6.14(b) and (c), a Participant's loan repayments may be
suspended as permitted under Section 414(u)(4) of the Code during
periods of absence from employment due to service in the
uniformed services as defined in chapter 43 of title 38 of the
Code, whether or not such absence is a Qualified Military Leave.
(d) Loans Granted on a Reasonably Equivalent Basis. The
Committee may grant loans and may direct the Trustee to lend
Trust Fund assets to Participants, 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. The Committee shall establish rules
relating to the order in which funds shall be withdrawn from
Accounts or Subaccounts; provided that the source of loans shall
not include the Employer Profit Sharing Contribution Account.
(f) Security and Foreclosure. The 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 6. Such foreclosed amount shall be deemed to be a
distribution.
(g) 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 with regard to contributions under Section 7.9
in effect at the time such interest and principal
payment is made.
(h) Loans Subject to Terms and Conditions Imposed by Committee.
Any loan made pursuant to this Section 6.14, subject to the
foregoing requirements, shall be subject to such terms and
conditions as the Committee may in its discretion impose. The
Committee may adopt such non-discriminatory rules and regulations
relating to loans to Participants as it may deem appropriate.
<Page 69>
ARTICLE 7.
Trustee and Trust Fund
7.1 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.
7.2 Selection of Trustee. The Board of Directors 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 the
Trustee's accounts shall be accomplished in the manner provided
in the Trust Agreement.
7.3 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 contributions and Trust-
to-Trust Transfers under the Plan shall be paid into the Trust,
and all benefits payable under the Plan shall be paid from the
Trust. An 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 Committee, as
applicable, for the exclusive benefit of the Participants and
their Beneficiaries, except as otherwise provided in Sections 5.6
and 7.12.
7.4 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. The
Committee shall charge a Participant's Account for any
administrative expenses incurred by the Plan directly related to
such Account.
7.5 Trust Entity. The Trust under this Plan from its inception
shall be a separate entity aside and apart from the 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.
7.6 ERISA Section 404(c) Plan. This Plan is intended to be a
plan described in Section 404(c) of ERISA and 29 C.F.R. 2550-404c-
1. As a result, the Plan's fiduciaries may be relieved of
liability for any losses which are the direct and necessary
result of investment instructions given by Participants or
Beneficiaries.
<Page 70>
7.7 Separate Accounts. The 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 and no interest shall be credited after the date such
withdrawal or distribution is charged to the Participant's
Account. Earnings, gains and losses 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.
7.8 Investment Funds.
(a) The assets of the Trust Fund shall be invested in the
Investment Funds designated by the Committee for the investment
of Participants' Accounts. The Committee may, from time to time,
designate additional Investment Funds with such investment
characteristics as it deems appropriate. The 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 Committee and shall
be communicated promptly to the Plan Administrator.
(b) In order to maintain appropriate or adequate liquidity and
pending or pursuant to investment directions from the 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 States
government treasury bills, commercial paper, savings accounts,
certificates of deposit, and common or commingled trust funds
invested in such securities).
(c) Notwithstanding any provision in Section 7.9 or 7.10 to the
contrary, the 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 and ease of administration of the Plan.
7.9 Investment Elections with Respect to Contributions. Subject
to Section 7.8, a Participant, Beneficiary (after the death of
the Participant), or an alternate payee may direct the investment
of his Elective Contributions, QNECs and QMACs, Rollover
Contributions, Employer Matching Contributions, and Employer
Profit Sharing Contributions and amounts transferred in Trust-to-
Trust Transfers to the Plan among the Investment Funds in
accordance with such rules and procedures as the Committee may
establish or adopt. Subject to Section 7.8, a Participant's
investment election made pursuant to this Section 7.9 shall
continue in effect, notwithstanding any change in the amount of
contributions to the Plan until such Participant shall change his
investment election; provided, however, that the Committee may
suspend Participant investment elections under this Section 7.9
as reasonably necessary in the event of a merger, transfer of
assets or liabilities to or from this Plan, a change of Trustee
or recordkeeper for the Plan, or for such other reason as
determined by the Committee to be necessary and reasonable. In
the event the Participant, Beneficiary, or alternate payee, as
applicable, fails to make a valid election under this Section
7.9, his Accounts shall be invested in such Investment Fund(s) as
the Committee designates for such purpose.
<Page 71>
7.10 Investment Elections with Respect to Accounts. Subject to
Section 7.8, a Participant may elect to transfer all or any
portion of his Account balances among the Investment Funds in
accordance with such rules and procedures as the Committee may
establish or adopt; provided, however, that the Committee may
suspend Participant investment elections under this Section 7.10
as reasonably necessary in the event of a merger, transfer of
assets or liabilities to or from this Plan, a change of Trustee
or recordkeeper for the Plan, or for such other reason as
determined by the Committee to be necessary and reasonable.
Notwithstanding the foregoing, in the absence of a valid election
to transfer funds when one of more Investment Funds becomes
unavailable, the Committee shall direct the transfer of amounts
invested in such Funds among the available Investment Funds.
7.11 Trust Income. As of each Valuation Date, the fair market
value of the Trust and of each Investment Fund shall be
determined 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 Committee (or the Trustee on the
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
Committee (or the Trustee on the 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 5.6(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 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 7.11.
Periodically as provided in the Trust Agreement or, if not
provided in the Trust Agreement, at least annually, the Trustee
shall provide the Committee with a written report detailing the
fair market value of the Trust and of each Investment Fund.
<Page 72>
Notwithstanding the above, if the interest of a
Participant's Accounts in an Investment Fund is denominated
in shares or units of an investment company or common or
collective trust fund, then income, gains or losses of such
Investment Fund shall be reflected in the net asset value of
such shares or units as determined by such investment
company or common or collective trust fund.
7.12 Right of the Employers to Trust Assets. Except as provided
in Section 5.6 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 Employer Matching
Contributions, Employer Profit Sharing Contributions, Elective
Contributions or QNECs or QMACs under Section 404 of the Code is
disallowed, Elective 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, an Employer Matching Contribution,
Employer Profit Sharing Contribution, Elective Contribution or
QNEC or QMAC is made through mistake of fact, Elective
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, unless the
Employer otherwise specifies at the time of contribution.
ARTICLE 8.
Administration
8.1 Board of Directors Duties. The Board of Directors shall
have overall responsibility for the establishment, amendment and
termination of the Plan and shall appoint and remove (with or
without cause) the Trustee and the members of the Committee to
which is delegated the overall responsibility for the
administration and operation of the Plan.
<Page 73>
8.2 Committee Membership. The Committee shall consist of one
(1) or more members, who shall be appointed by the Board of
Directors. The members of the Committee shall remain in office
at the will of the Board of Directors and the Board of Directors
may from time to time remove any of said members with or without
cause and shall appoint any successors. In the absence of such
appointment, the officer of the Company with responsibility for
benefits and compensation shall be the Committee.
8.3 Committee Structure. Each member of the Committee may (but
need not) be an officer, director or Employee of an Employer
hereunder. Each person upon becoming a member of the Committee
shall file an acceptance thereof in writing with the secretary of
the Company and the other members of the Committee. Any member
of the Committee may resign by delivering his written resignation
to the secretary of the Company and the other members of the
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 secretary of the Company. Any
member of the Committee who is an officer, director or Employee
of an Employer shall automatically cease to be a member of the
Committee on his ceasing to be an officer, director or Employee
of an Employer, unless otherwise provided by the Board of
Directors. In the event of a vacancy in membership, the
remaining members shall constitute the Committee with full power
to act until said vacancy is filled.
8.4 Committee Actions. The action of the Committee shall be
determined by vote or other affirmative expression of a majority
of its members. Action may be taken by the Committee at a
meeting or in writing without a meeting. Any member may execute
any certificate or other written direction on behalf of the
Committee.
8.5 Committee Duties. The Committee, on behalf of the
Participants and Beneficiaries of the Plan and Trust, shall
administer 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. In the absence of such appointment, the Committee
shall be 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, in it sole and exclusive authority, 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;
<Page 74>
(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 have prepared and furnished to Participants and
Beneficiaries all information required under federal law or
provisions of this Plan to be furnished to them;
(j) 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;
(k) To make available to Participants upon request, for
examination during business hours, such records as pertain
exclusively to the examining Participant;
(l) To make all determinations, including factual
determinations, as to the amount and manner of allocations and
distributions of benefits;
(m) To hear, review and determine claims for benefits;
(n) To determine, in its full and complete discretion, whether a
domestic relations order constitutes a QDRO as provided in
Section 12.5 and whether a putative alternate payee otherwise
qualifies for benefits under the Plan;
(o) To create and implement a "black-out" period, including the
right to suspend distributions, withdrawals and Participant
investment elections;
(p) To determine, in its full and complete discretion, whether
the Plan has suffered a partial termination pursuant to Code
Section 411(d)(3) or a de facto termination;
(q) To determine whether the Participant's spouse has consented
to the Participant's naming of a Beneficiary other than his
spouse, 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; and
<Page 75>
(r) To determine that any and all forms, elections, designations
and directions, except for spousal consent and as otherwise
required by law, may be in traditional paper form or by
electronic or telephonic means, as determined by the Committee
from time to time.
8.6 Correction of Errors. The Committee may correct any defect,
supply any omission or reconcile any inconsistency, including,
but not limited to, mathematical errors, in such manner and to
such extent as the Committee shall deem necessary to carry out
the purposes of the Plan. The Committee may adopt rules and
regulations as it deems desirable for the conduct of the
administration of the Plan. In all events, the Committee's
decision in any matter shall be binding and conclusive as to all
persons affected.
(a) Underpayments. In the case of an error resulting in an
understatement of a Participant's Account balance, 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 Committee, in its sole discretion, may correct such
error by 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 8.6, the Accounts of other
Participants shall not be readjusted on account of such error.
(b) Improper Overpayments. The 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
Committee shall direct the Trustee to reduce all future benefits
payable to that person, if any, by the amount of the overpayment.
8.7 Committee and Plan Administrator Bonding and Expenses. The
members of the 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 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.
8.8 Allocations and Delegations of Responsibility.
(a) Delegations of Responsibility. The Board of Directors, the
Committee, and the Plan Administrator, respectively, shall have
the authority to delegate from time to time 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 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
such delegation or notice of revocation shall be effective upon
notice to the delegate. 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 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.
<Page 76>
(b) Allocations of Responsibility. The Board of Directors, the
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
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.
8.9 Information To Be Supplied by Employers. Employers shall
provide the 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 Committee, the Plan Administrator and the Trustee may rely
conclusively on the information certified to it by an Employer.
8.10 Records. The regularly kept records of the 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, or other documentary proof of age satisfactory
to the Committee.
8.11 Fiduciary Capacity. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the
Plan.
8.12 Committee/Plan Administrator Decisions Final. The Committee
and the Plan Administrator shall have discretion to determine all
matters within their respective jurisdictions. The decisions of
the 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.
<Page 77>
8.13 Fiduciary as Participant. A fiduciary who is also a
Participant or a Beneficiary shall receive any benefit to which
he may be entitled as a Participant or Beneficiary in the Plan so
long as such benefit is computed and paid on a basis that is
consistent with the terms of the Plan as applied to all other
Participants and Beneficiaries.
ARTICLE 9.
Claims Procedure
9.1 Initial Claim for Benefits. Each Participant or Beneficiary
(a "Claimant") may submit his claim for benefits to the Committee
(or to such other person or persons as may be designated by the
Committee) in writing in such form as is provided or approved by
the 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 (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 Committee review the denial, provided
that the Claimant files a written request for review with the
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
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.
<Page 78>
9.3 Limitation on Filing Suit. No Claimant shall have a right
to bring action in any court more than ninety (90) days after the
notification to the Claimant of the decision on review under
Section 9.2.
ARTICLE 10.
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 may amend, modify, change, revise,
discontinue or terminate the Plan at any time; provided that,
except as provided in Sections 5.6 and 7.12, no amendment shall:
(a) materially increase the duties or liabilities of the Trustee,
the Committee or the Plan Administrator without the consent of
the entity affected; (b) have the effect of vesting in any
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. In the event the Committee
makes an election under Section 2.28 (the definition of Highly
Compensated Employee) or with regard to the discrimination rules
in Section 5.1(b) or Section 5.2, or creates a schedule in
accordance with Section 4.6, such elections and such schedules
shall constitute amendments to the Plan for the applicable Plan
Years. Notwithstanding anything in this Section 10.2 to the
contrary, the Committee may amend Section 6.14 of the Plan, other
than Section 6.14(a), (d) and (f).
<Page 79>
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 6.5(d) 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 Committee may direct that
either (a) each Participant and each Beneficiary of a deceased
Participant receive his entire Accrued Benefit as soon as
reasonably possible or (b) the Trust be continued and
Participants' Accrued Benefits be distributed at such times and
in such manner as provided in Article 6 in which case continued
allocations of net income, gains, losses and expenses of the
Trust Fund as provided in Section 7.11 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 notice of its election to so
withdraw. An Employer who ceases to be a Related Entity shall
automatically withdraw from the Plan effective as of the date
such Employer ceases to be a Related Entity.
ARTICLE 11.
Top Heavy Provisions
11.1 Application. The definitions in Section 11.2 shall apply
under this Article 11 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 11 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 11 shall be applied separately to each
Employer and Related Entity taking account of benefits under the
plan provided to employees of the Employer or Related Entity
because of service with that Employer or Related Entity.
11.2 Special Top Heavy Definitions. The following special
definitions shall apply under this Article 11:
(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, 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, Elective Contributions and Employer Matching
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.
<Page 80>
(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
employees of the employer because of 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.
<Page 81>
(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
Entity 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 Entity 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 ($130,000 in 1999, 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. In the case of an Employer or
Related Entity 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 subsection shall include administrative executives as
described in Section 1.416-1(T-13) of the Treasury Regulations.
<Page 82>
(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
Entity 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 1999, 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 Entity, 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 Entity.
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 Entity.
(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 Entity and has an
annual Compensation for such Plan Year from the Employer and
Related Entities 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) exceeds
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 Compensation shall be used to determine
whether the person will be treated as a Key Employee under
the preceding sentence;
<Page 83>
(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 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.
<Page 84>
(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:
(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.
<Page 85>
(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.
(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).
(v) 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 Entity.
<Page 86>
(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.
(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 Entity to a plan maintained
by an employer which is not a Related Entity or (b) made to a
plan maintained by a Related Entity from a plan maintained by an
employer which is not a Related Entity.
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).
<Page 87>
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 or, if the Plan is a 401(k) plan, because
of a failure to make Elective Contributions.
(b) Vesting. For each Plan Year in which the Plan is a Top
Heavy Plan and any Plan Year thereafter, the Employer Profit
Sharing 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.
<Page 88>
(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, 1999.
(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 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.
<Page 89>
(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 12.
Miscellaneous Provisions
12.1 Employer Joinder. Any Related Entity may, with the approval
of the Company and subject to such terms and conditions as the
Company may prescribe, adopt the Plan and Trust Agreement.
12.2 Actions by Employer. Any actions to be taken hereunder by
the Company or any Employer shall be taken by its board of
directors or its delegate or, in the case of an entity other than
a corporation, by an equivalent governing body or delegate.
12.3 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).
12.4 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
judgments 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 benefit, shall, in any manner, be liable for
or subject to the debts or liabilities of any person entitled to
such benefit.
(b) Exception for Certain Domestic Relations Orders.
Notwithstanding Section 12.4(a), the Trustee
<Page 90>
(1) shall comply with an order entered on or after
January 1, 1985, determined by the Committee to be a QDRO as
provided in Section 12.5,
(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
QDRO even if it does not meet the requirements of Section 12.5.
12.5 Qualified Domestic Relations Order.
(a) "Qualified Domestic Relations Order" or "QDRO" 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 QDRO. A domestic relations order
can be a QDRO only if such order clearly specifies:
(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 QDRO. A domestic relations order
can be a QDRO only if such order does not:
<Page 91>
(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 QDRO.
(d) Nondisqualifying Provisions. A domestic relations order
shall not be treated as failing to meet the requirements of
Section 12.5(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 receive
benefits under the Plan, or
(B) the Participant's "earliest retirement age" which shall mean
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
the order may provide for distribution at any
time,
(2) as if the Participant had retired on the date on
which such payment is to begin under such order, and
(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 QDRO, 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 6.3 and 6.8.
(f) Alternate Payee as Beneficiary. An alternate payee shall be
considered a Beneficiary under the terms of this Plan until the
alternate payee's benefits are distributed, unless the Plan
provides otherwise.
<Page 92>
(g) Separate Accounting of Amounts Payable Pursuant to a QDRO.
In the case of any domestic relations order received by the Plan,
the Committee shall separately account for the amounts payable
under the domestic relations order. If it is determined that the
order is not a QDRO, the amounts separately accounted for during
such determination shall no longer be accounted for separately.
(h) Determination of Validity of a QDRO. In treating a domestic
relations order as being (or not being) a QDRO (as defined in
Section 12.5), or, during any period in which the issue of
whether a domestic relations order is a QDRO is being determined
(by the 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 QDRO,
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 QDRO, 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.
(i) QDRO Procedures. The Committee shall adopt reasonable
procedures for determining the qualified status of a domestic
relations order and to administer distributions under such
qualified orders.
<Page 93>
12.6 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
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 6.7. Unclaimed amounts for a Plan Year shall become a
Forfeiture and shall be applied in accordance with Section
5.6(c)(4) 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 prior to termination of the Plan, 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.
12.7 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.
12.8 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 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 7.13.
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 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.
<Page 94>
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 Law Governing. The Plan shall be construed and
enforced according to the laws of Illinois other than its laws
with respect to choice of law, to the extent not preempted by
ERISA.
Executed this 30th day of June , 2000.
JUNO LIGHTING, INC.
By: /s/ Glenn R. Bordfeld
President
ATTEST:
/s/ Joel W. Chemers
Secretary
<Page 95>
APPENDIX A
This amendment and restatement is effective as of December 1,
1999; provided, however, that the following provisions shall have
retroactive effect as of the dates provided below:
(a) For Plan Years commencing on or after December 1, 1997, the
limitations on the dollar amount of Compensation that may be
taken into account under the Plan shall be determined without
regard to the family aggregation rules described in Section
401(a)(17)(A) of the Code as in effect for prior Plan Years.
(b) Section 2.28, the definition of "Highly Compensated
Employee," shall be effective for the Plan Year beginning
December 1, 1996 and for all Plan Years beginning thereafter. In
general, Section 2.28 is effective for years beginning after
December 31, 1996, except that in determining whether an employee
is a Highly Compensated Employee for years beginning in 1997,
Section 2.28 shall be treated as having been in effect for years
beginning in 1996.
(c) Section 2.45, the definition of "Required Beginning Date,"
shall be effective for the Plan Year beginning December 1, 1997
and for all Plan Years beginning thereafter.
(d) Section 4.7, governing veterans' re-employment rights, shall
be effective as of December 12, 1994.
(e) Sections 5.1(b) and 5.2, the ADP and the ACP Tests, shall be
effective as of the Plan Year beginning December 1, 1997 and for
all Plan Years beginning thereafter.
(f) Section 6.10, increasing the cash out limit from $3,500 to
$5,000, shall be effective for distributions made on or after
June 1, 2000 (including distributions to Participants who
terminated employment prior to June 1, 2000).
<Page 96>
SMITH BARNEY
CORPORATE TRUST
TRUST AGREEMENT
To Appoint Smith Barney Corporate Trust Company
As Sole Trustee Or Additional Trustee
Instructions: This Trust Agreement is for all plans appointing
Smith Barney Corporate Trust Company as Sole Trustee or
Additional Trustee where the Employer retains its present Plan or
will adopt a Plan which is not a Salomon Smith Barney Prototype
Retirement Plan. This Trust Agreement should not be executed if
the Employer has adopted a Salomon Smith Barney Prototype Plan
and Trust. The proper Employer representative must sign each of
the Trust Adoption Agreement pages (two sets of original
signatures) where indicated and return this entire Agreement
along with other applicable new account documentation to Smith
Barney Corporate Trust Company, 824 Market Street, Suite 210,
Wilmington, Delaware 19801. Upon receipt and acceptance, Smith
Barney Corporate Trust Company will return a fully executed copy
of this Agreement to the Employer.
<Page 97>
(1) Trust Adoption Agreement
Smith Barney Corporate Trust
Company
Trust Agreement
The Employer named below hereby executes and adopts the
attached SMITH BARNEY CORPORATE TRUST COMPANY TRUST AGREEMENT
(THE "AGREEMENT") in accordance with this Trust Adoption
Agreement.
I. GENERAL INFORMATION
Employer: __Juno Lighting, Inc. ___________ Telephone: ___(847)
827-5894
Address: ___1300 S. Wolf Road, P.O. Box 5065
___________Des Plaines, IL. 60017-5065
Employer Tax ID Number: __36-2852993 ___________________
Trust Tax ID Number: __ 95-6817943 _
Account Number(s) Covered Under This
Agreement:__60279______________________________________________
Smith Barney Corporate Trust Company will be: Sole Trustee
(b) PLAN INFORMATION
Name of Plan: ____Juno Lighting, Inc. 401(k) Plan
_________________________________________________________________
____________
(c) ADOPTION OF THE AGREEMENT
The undersigned Employer hereby agrees to and adopts the
provisions of the attached Agreement.
(d) REPRESENTATIONS
The undersigned Employer hereby agrees and represents that:
(a) Smith Barney Corporate Trust Company has been duly appointed
as the trustee of the trust (the "Trust") established under the
above named plan (the "Plan");
(b) The Plan maintained by the Employer has been duly adopted,
is presently a qualified plan under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and a
favorable determination letter as to such qualified status has
been received or applied for (if applied for, the Employer will
promptly notify Smith Barney Corporate Trust Company of any
denial or withdrawal of such application);
(c) Smith Barney Corporate Trust Company will be promptly
notified by the Employer of any change in, or facts which could
result in loss of, the qualified status of the Plan;
(d) no Plan document imposes any duties upon Smith Barney
Corporate Trust Company that are not contained in, or are
inconsistent with, the Agreement;
(e) copies of all Plan related documents, and the most recent
determination letter received form the Internal Revenue Service
with respect to the Plan, are available from the Employer upon
request by Smith Barney Corporate Trust Company;
(f) if applicable, the Plan permits investment in collective
trust funds; and
(g) the person or persons identified in the Smith Barney
Corporate Trust Company new account form by the Employer as
authorized signers on behalf of the plan have been duly appointed
and are authorized to give direction to Smith Barney Corporate
Trust Company as indicated on the new account form pursuant to
the terms of the Plan and Trust;
(h) pursuant to the Plan, all securities held in the trust shall
be voted by the Investment Manager which has been duly appointed
by the Employer, or in the absence of such Investment Manager, by
the Employer.
IN WITNESS WHEREOF, the Employer and Smith Barney Corporate
Trust Company have executed this Trust Adoption Agreement.
ACCEPTED BY SMITH BARNEY CORPORATE TRUST COMPANY The
Employer
ON _________________ _____, 20____
By: X____/s/ __Joel W. Chemers__Vice President____
___6/28/00__
Employer's Signature (and Title)
Date
EFFECTIVE AS OF __July 1, 2000
SMITH BARNEY CORPORATE TRUST COMPANY
By: __/s/ G. DeFazio____________________________
Authorized Signer for Smith Barney Corporate Trust Company
IMPORTANT: EACH OF THE TWO ADOPTION PAGES MUST BE COMPLETED IN
DUPLICATE. ORIGINAL SIGNATURES MUST APPEAR ON EACH ADOPTION
PAGE. RETURN THE ENTIRE DOCUMENT - DO NOT TEAR OFF FRONT PAGE.
<Page 98>
12.17 TRUST AGREEMENT
THIS AGREEMENT is made by and between the Employer
whose name is set forth on the attached trust
adoption agreement (the "Trust Adoption Agreement") and
Smith Barney Corporate Trust Company
(hereinafter sometimes referred to as the "Trustee")
effective as of the date specified on the Trust
Adoption Agreement.
WITNESSETH:
WHEREAS, the Employer has heretofore adopted a
qualified employee retirement plan described in the
Trust Adoption Agreement (the "Plan");
WHEREAS, the Employer desires to appoint the Trustee as
a directed trustee of the Plan for the limited purposes
hereinafter set forth; and
WHEREAS, the Trustee desires to act as a directed
trustee of the Plan for the limited purposes
hereinafter set forth.
NOW, THEREFORE, the Employer hereby establishes a fund
with the Trustee which fund shall be held, managed and
controlled by the Trustee without distinction between
principal and income (the "Trust Fund") subject to the
terms and conditions hereinafter set forth:
Section 1 Concerning the Trust Fund
1.1 The Plan, this Agreement and the Trust Fund created
hereunder are intended to meet all the applicable
requirements of Sections 401(a) and 501(a) of the
Internal Revenue Code of 1986, as amended (the
"Code"), and the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
1.2 The Employer assumes full responsibility to
establish and maintain the Plan as a plan meeting
the qualification requirements of Section 40 1(a)
of the Code, and shall promptly notify the Trustee
of a change in such qualified status.
1.3 The Trustee agrees to accept contributions which
are paid to it in accordance with the terms of the
Plan. The Trustee shall be entitled to rely upon
the determination of the Plan Administrator (as
defined in Section 2.1) that all contributions
received by it are properly contributed or trans
ferred in accordance with the provisions of the
Plan. Such contributions shall be in cash or in
such other form as may be acceptable to the
Trustee. All contributions so received, together
with the income and any other increment thereon,
shall be held, managed and controlled by the
Trustee pursuant to the terms of this Agreement
without distinction between principal and income.
1.4 The Trustee shall be responsible for the property
received by it as trustee, but shall have no
responsibility to enforce the collection from the
Employer of any contribution to the Trust Fund, nor
any responsibility for the sufficiency of the Trust
Fund to meet and discharge any and all liabilities
under the Plan.
<Page 99>
1.5 Except as otherwise permitted by the terms of the Plan and
applicable law, no part of the Trust Fund shall be used for,
or diverted to, purposes other than for the exclusive benefit
of the Plan participants and their beneficiaries.
1.6 The Trustee shall maintain, or cause to be maintained, such
accounts as may be necessary to properly administer the Trust
Fund.
1.7 The Employer hereby certifies that the terms of the Plan do
not impose any duties upon the Trustee that are not contained
in, or are inconsistent with, this Agreement.
1.8 The Trustee shall have no duties or obligations with respect
to the Trust Fund unless such duties or obligations have been
specifically undertaken by the Trustee by the express terms of
this Agreement or any supplemental agreement between the Employer
and the Trustee, or are imposed by applicable law.
Section 2 Plan Administrator
2.1 As used in this Agreement, the term "Plan Administrator"
shall mean:
(a) the person (including, without limitation, any
individual, committee, partnership or corporation) so
designated in accordance with the terms of the Plan or in
writing by the Employer from time to time; or
(b) if no such person is so designated, such term shall mean
the Employer.
Pursuant to the provisions of the Plan, different persons may be
designated to perform different duties and may have different
powers in the capacity of Plan Administrator. By way of example
and not limitation, the same Plan Administrator may be the
fiduciary responsible for the administration of the Plan and for
directing the investment of the Trust Fund, or different Plan
Administrators may be designated to perform administrative and
investment functions. The Employer shall provide to the Trustee
a certificate, signed by an authorized officer of the Employer,
that contains the name(s) of the Plan Administrator responsible
for the investment of the Trust Fund, for the administration of
the Plan (including the authority to direct benefit payments
from the Trust Fund), and any other special powers or duties of
a Plan Administrator delegated to another person in accordance
with the Plan.
2.2 The Employer shall provide the Trustee in writing with the name
or names and specimen signature or signatures and a description
of the specific powers and duties of each Plan Administrator.
The Employer shall give prompt written notice to the Trustee of
a change in the identity, powers or duties of any Plan
Administrator, and the Trustee shall be entitled to rely
entirely on its failure to receive such notice as a
certification from the Employer that a designated Plan
Administrator and its powers and duties have not been changed.
2.3 The Trustee shall from time to time, pursuant to the written
directions of the Plan Administrator, make payments out of the
Trust Fund, in such amounts and for such proper purposes as may
be specified by the written directions of the Plan
Administrator. All payments to be paid by means of a check from
the Trustee shall be paid from a non-interest bearing checking
account.
<Page 100>
Investment and Administration of the Trust Fund
Section 3
3.1 In General - The Trustee shall have exclusive authority and
discretion to manage and control the Trust Fund; provided,
however, that the Trustee's authority and discretion with
respect to the Trust Fund shall at all times be subject to
the proper directions of the Plan Administrator that are
made in accordance with the terms of the Plan and that are
not contrary to ERISA (the "Plan Administrator's
Directions"); and further provided, that in the event
authority to manage, acquire or dispose of assets of the
Plan is delegated to (i) an investment adviser registered
under the Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act"); (ii) is not registered as an
investment adviser under the Investment Advisers Act by
reason of paragraph (I) of section 203A(a) of such Act, is
registered as an investment adviser under the laws of the
State (referred to in paragraph (I)) in which it maintains
its principal office and place of business, and, at the time
the fiduciary last filed the registration form most recently
filed by the fiduciary with such State in order to maintain
the fiduciary's registration under the laws of such State,
also filed a copy of such form with the Secretary of Labor;
(iii) a bank, as defined in the Investment Advisers Act or
(iv) an insurance company qualified to manage, acquire or
dispose of assets of the Plan under the laws of more than
one State; and such investment adviser, bank or insurance
company has acknowledged in writing that it is a fiduciary
with respect to the Plan (an "Investment Manager"), the
Trustee's authority and discretion with respect to the
assets of the Plan shall be subject at all times to the
directions of the Investment Manager (the "Investment
Manager's Directions"). The Plan Administrator's Directions
and the Investment Manager's Directions sometimes are
hereinafter collectively referred to as the "Investment
Directions." The Trustee shall have no liability for any
action taken in accordance with such Investment Directions.
3.2 Investment of Trust Fund - The Trustee shall invest the
Trust Fund in accordance with the Investment Directions;
provided, however, that the Trustee (or any affiliate of the
Trustee) shall have exclusive management and control over
any assets of the Plan that are invested in any collective
trust fund maintained by the Trustee (or by its affiliate)
pursuant to Section 3.8 of the Agreement.
3.3 Investment Manager - If investment of the Trust Fund is to
be directed in whole or in part by an Investment Manager,
the Plan Administrator shall deliver to the Trustee a copy
of each of the following documents:
1. The Investment Manager's written acknowledgment that it
is a fiduciary of the Plan;
2. A certificate evidencing (i) the Investment Manager's
current registration under the Investment Advisers Act, or
under the State registration requirements exception to
Federal registration under the Investment Advisers Act, (ii)
that the Investment Manager is a bank as defined in the
Investment Advisers Act or (iii) that the Investment Manager
is an insurance company qualified to manage, acquire or
dispose of assets of the Plan under the laws of more than
one State;
3. Written notice from the Plan Administrator of the
appointment of the Investment Manager; and
4. The instrument evidencing the Investment Manager's
acceptance of such appointment.
The Trustee shall be entitled to rely, without any
independent investigation, upon such documents until such
time as it is otherwise notified in writing of some change
by the Plan Administrator. The Plan Administrator shall
deliver to the Trustee prior written notice of the removal
or replacement of any such Investment Manager.
<Page 101>
3.4 Administration of the Trust Fund - The Trustee shall
administer the Trust Fund in accordance with the Plan
Administrator's Directions made directly to the Trustee or
through a Financial Consultant of Salomon Smith Barney Inc.
or Robinson-Humphrey Company, LLC, provided that such
Directions are made in accordance with this Section 3.
3.5 Participant Directed Investment - In the event that the Plan
Administrator advises the Trustee in writing that the Plan
provides for individual accounts and permits a participant
or beneficiary to exercise control over the assets in any
such account, pursuant to written Investment Directions, the
Trustee shall invest any such account as directed by any
such participant or beneficiary in writ~g; provided,
however, that the exercise of investment authority by any
such participant or beneficiary shall occur only with the
prior written consent of the Trustee; and provided further,
that the Trustee shall not be liable for any loss, or by
reason of any breach, that results from such participant's
or beneficiary's exercise of control.
3.6 Investments - Pursuant to the Investment Directions, the
Plan Administrator or the Investment Manager, as the case
may be, shall direct the investment and reinvestment of the
Trust Fund, without distinction between principal and
income, in such securities or in such property, real or
personal, wherever situated, as the Plan Administrator or
the Investment Manager, as the case may be, shall deem
advisable to the extent such investments are consistent with
the terms of the Plan, including, but not limited to,
annuity contracts, insurance contracts, real estate, managed
commodity assets, common or preferred stocks, exchange
listed option investments (including, without limitation,
the purchase or sale of puts and calls or any combination
thereof), futures contracts, options on futures, collective
trust funds, trust and participation certificates, bonds and
mortgages (including, without limitation, part interests in
bonds and mortgages or notes and mortgages insured by the
Federal Housing Administration), leaseholds on improved or
unimproved real estate, securities of the Employer or any of
its affiliates, partnership interests, interests in joint
ventures, insurance company investment contracts, and other
evidences of indebtedness or ownership. Notwithstanding the
foregoing, the Trustee shall invest all assets of the Trust
Fund which are to be invested on an interim basis pending
reinvestment, distribution or other disbursement either (i)
in depository accounts bearing a reasonable rate of interest
which are maintained by the Trustee or by an affiliate of
the Trustee or sub-custodian, as selected by the Trustee or
(ii) in commingled short-term investment funds which are
maintained by the Trustee or by any affiliate of the
Trustee, in which event the provisions of Section 3.8 shall
apply.
3.7 The following provisions shall apply with respect to any
individual annuities, group annuities or life insurance
policies (referred to in this sub-Section as "Contracts")
which are acquired by the Trustee pursuant to the Investment
Directions:
(a) The Trustee shall execute the application for any
Contract to be applied hereunder in such form as shall be
prescribed in the Investment Directions.
(b) The Trustee shall be the absolute owner of all
Contracts which shall be held in the Trust Fund and the
Plan shall be named as beneficiary of all such Contracts.
(c) Pursuant to written Investment Directions, the
Trustee shall pay from the Trust Fund premiums,
assessments, dues, charges and interest to acquire or
maintain any Contract held in the Trust Fund. The Trustee
shall have no duty to make any such payment unless and
until it shall have received such direction, and its sole
duty shall be to make such payments in such manner as it
may be directed. If the cash available in the Trust Fund
is not sufficient to pay all of the sums specified in the
Investment Directions with respect to Contracts, the
Trustee shall immediately notify the Plan Administrator
or Investment Manager, as the case may be, of the amount
of the deficiency; and the Trustee shall be under no duty
or obligation to make any such payments directed by the
Plan Administrator or Investment Manager, as the case may
be, unless and until the Trustee shall be in receipt of
an Employer contribution or other cash in the possession
of the Trustee which the Plan Administrator or Investment
Manager, as the case may be, directs the Trustee to use
for that purpose.
<Page 102>
(d) Pursuant to written Investment Directions, the Trustee
shall, without the consent of any other person, (1) collect
and receive all dividends or other payments of any kind
payable with respect to, under, or arising out of, any
Contracts held in the Trust Fund or leave the same with the
issuing insurance company; (2) convert from one form of
Contract to any other form of Contract; designate any mode of
settlement of the proceeds of any Contract held in the Trust
Fund; sell or assign any Contract held in the Trust Fund; or
surrender for cash any Contract held in the Trust Fund; (3)
borrow sums of money from the issuing insurance company upon
any Contracts issued by it and held in the Trust Fund,
provided that the Trustee shall borrow such sums only in
respect of all Contracts for the time being held in the Trust
Fund, and upon a pro raw and uniform basis; (4) agree with the
insurance company issuing any Contract to any release,
reduction, modification or amendment thereof; and (5) without
limitation of any of the foregoing, exercise any and all of
the rights, options or privileges that belong to the absolute
owner of any Contracts held in the Trust Fund or that are
granted by the terms of any such Contracts or of this
Agreement. The Trustee shall exercise the foregoing powers or
any other action permitted by any Contract held in the Trust
Fund subject to the Investment Directions, and the Trustee
shall have no duty to exercise any of such powers or to take
any such action unless and until it shall have received such
Directions. The Trustee upon receipt of written Investment
Directions shall deliver any Contract held in the Trust Fund
to such person or persons as may be specified in such
Directions.
(e) The Trustee shall hold in the Trust Fund pursuant to the
terms of this Agreement all payments of any kind received with
respect to any Contract held in the Trust Fund, whether as a
result of sale, assignment, surrender or otherwise.
(f) In the event that the Trustee shall have borrowed any
sums of money upon any Contract held in the Trust Fund, it
shall have no duty to repay any part of the money so borrowed,
notwithstanding the fact that thereafter it may have
sufficient funds to make such repayment, unless and until it
shall have received written Investment Directions to make the
repayment; and any such repayment shall be made pro rata and
on a uniform basis with respect to all such policies against
which borrowing then being repaid, in whole or in part, shall
have been made.
(g) The Trustee shall execute all necessary receipts and
releases to any insurance company issuing any Contract or
Contracts held in the Trust Fund, and, upon receipt of written
Investment Directions, shall deliver such receipts and
releases when the proceeds of any Contract held in the Trust
Fund have become payable, and in connection therewith shall
make reasonable efforts to collect such sums as may appear to
be due; but the Trustee shall have no duty to begin or
maintain any action, suit or other legal or equitable
proceeding to collect the proceeds of any Contract (1) except
upon receipt of written Investment Directions and (2) unless
the Trustee is in possession of funds sufficient for the
purpose or unless it has been indemnified by the Employer to
its satisfaction for its counsel fees, costs, disbursements
and all other expenses and liabilities to which it may be
subjected as a consequence of beginning or maintaining any
such action, suit or other legal or equitable proceeding. The
Trustee may use the proceeds of any Contract held in the Trust
Fund to defray expenses incurred in connection with enforcing
payment of such Contract. The Trustee shall, upon receipt of
written Investment Directions, compromise and adjust claims
arising out of the Contracts held in the Trust Fund upon such
terms and conditions as it may deem just; and any such
compromise shall be binding and conclusive upon all persons
interested in or having any rights under or to the Trust Fund.
(h) No insurance company issuing any Contract or Contracts
held in the Trust Fund shall be deemed to be a party to this
Agreement for any purpose, or to be responsible in any way for
the validity of this Agreement, or to have any liability under
this Agreement other than as stated in any Contract that is
issued by it. Any insurance company may deal with the Trustee
as absolute owner of any Contract issued by such insurance
company and held in the Trust Fund, without inquiry as to the
authority of the Trustee to so act, and may accept and rely
upon any written notice, instruction, direction, certificate
or other communication from the Trustee believed by the
insurer to be genuine and to be signed by the Trustee, and
shallincur no liability or responsibility by so doing. Any
sums paid by an insurance company under any of the terms of a
Contract issued by it and held in the Trust Fund, either to
the Trustee, or, in accordance with the direction of the
Trustee, to any other person or persons designated in such
Contract as the person or persons to whom such payment shall
be made, shall be a full and complete discharge of the
liability to pay such sums, and the insurance company shall
have no obligation with respect to this Agreement.
(i) The Trustee shall follow the Investment Directions
concerning the exercise or nonexercise of any powers or
options concerning any Contract held in the Trust Fund.
The Trustee shall not be liable (1) for the refusal of
any insurance company to issue, modify or convert any
Contract or Contracts, or to take any other action
requested by the Trustee, (2) for the form, genuineness,
validity, sufficiency or effect of any Contract or
Contracts held in the Trust Fund, (3) for the act of any
person or persons that may render any such Contract or
Contracts null and void, (4) for the failure of any
insurance company to pay the proceeds of any such
Contract or Contracts as and when the same shall become
due and payable, (5) for any delay in payment resulting
from any provision contained in any such Contract or (6)
for the lapse or uncollectibility of any Contract for any
reason whatsoever. To the extent permitted under applica
ble law, and notwithstanding any other provision to the
contrary in this Agreement, the Employer hereby agrees to
indemnify the Trustee and to hold it hannless from and
against any claim or liability which may be asserted
against the Trustee by reason of any action taken upon
Investment Directions or for any failure to act in the
absence of any such Directions with respect to any
Contract or the acquisition of any Contract or exercise
or nonexercise of any right or option thereunder.
<Page 103>
3.8 Power to Invest in a Collective Trust Fund - The Trustee,
upon receipt of written Investment Directions, shall invest
some or all of the Trust Fund in one or more collective
trust funds (including, without limitation, any collective
trust fund maintained by the Trustee or by any affiliate of
the Trustee) that are exempt from taxation under Section 501
(a) of the Code. To the extent that assets held in the Trust
Fund are invested in any such collective trust fund, the
declaration of trust creating such collective trust fund
hereby is adopted in its entirety as an integral part of the
Plan and of this Agreement. Any such investment in any
collective trust fund shall be subject to all the provisions
of such declaration of trust, as hereafter amended or
supplemented, and the Plan Administrator or Investment
Manager shall not have any right to vote or otherwise in any
manner control the operation and management of any
collective trust fund in which assets of the Plan are
invested, the operation of any party to any such collective
trust fund, or any beneficiary of any such collective trust
fund. The Trustee (or its affiliate) is hereby authorized to
utilize investment advice received from investment advisers
for any collective trust fund maintained by the Trustee (or
affiliate) including, without limitation, such advice
received from Greenwich Street Advisors and Smith Barney
Asset Management each of which is a division of an affiliate
of the Trustee, and to utilize the brokerage services of
Salomon Smith Barney Inc. or Robinson-Humphrey Company, LLC,
affiliates of the Trustee. The Plan Administrator or the
Investment Manager, as the case may be. shall determine,
prior to any direction by either of them to invest the Trust
Fund in any collective trust fund maintained by the Trustee
(or by any of its affiliates) that the services provided to
the Plan through the collective trust fund including,
without limitation, any advisory services provided to the
Trustee (or affiliate) by Greenwich Street Advisors or Smith
Barney Investment Advisors, and brokerage services provided
by Salomon Smith Barney Inc. or Robinson-Humphrey Company,
LLC, are (i) necessary to the operation of the Plan, (ii)
furnished under a declaration of trust which is reasonable
and (iii) furnished for reasonable compensation.
3.9 Trustee's Investment Powers - The Trustee shall have the
following investment powers to effectuate the Investment
Directions:
(a) To purchase, or subscribe for, any securities or
property and to retain such assets in the Trust Fund;
(b) To sell, exchange, convey, transfer, or otherwise
dispose of. any securities or property held in the Trust
Fund by private contract or public auction. and no person
dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the
validity, expediency. or propriety of any such sale or
other dispositions:
(c) To keep any portion of the Trust Fund in cash or
cash balances, it being understood that the Trustee shall
not be required to pay any interest on any such balances;
(d) To accept and retain for such time as shall be
determined any securities or other property received or
acquired by the Trustee hereunder, whether or not such
securities or other property would normally be purchased
as investments hereunder; and
(e) To renew or extend, or to participate in the renewal
or extension of, any mortgage upon such terms as the
Trustee may be authorized to accept.
3.10 Trustee's Administrative Powers - The Trustee shall have the
following administrative powers which it shall exercise in
its own discretion or to effectuate the Investment
Directions, as the case may be, with respect to the
administration of the Trust Fund:
(a) To give general or special proxies or powers of
attorneys with or without powers of substitution; to
exercise any conversion privileges, subscription rights
or other options, and to make payments incidental
thereto; to oppose, or to consent to, or to otherwise
participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate
discretionary powers, and to pay any assessments or
charges in connection therewith; to abandon any property
determined by it to be worthless; and generally to
exercise any of the powers of an owner with respect to
stocks, bonds, securities and other property held as a
part of the Trust Fund;
<Page 104>
(b) To borrow or raise monies for the purposes of the
Trust Fund from anyone (other than a "party in interest"
as defined in Section 3(14) of ERISA) in such amount, and
upon such terms and conditions, as authorized by the Plan
Administrator's Directions and, for any sum so borrowed,
to issue its promissory note as Trustee, and to secure
the repayment thereof by pledging all, or any part, of
the Trust Fund; and no person lending money to the
Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency or
propriety of any such borrowing;
(c) To settle, compromise, or submit to arbitration any
claims, debts or damages due or owing to or from the
Trust Fund, to commence or defend suits or legal or
administrative proceedings, and to represent the Trust
Fund in all suits and legal and administrative
proceedings;
(d) To make, execute, acknowledge and deliver any and
all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(e) To retain any of its affiliates or any other proper
party to act as subcustodian with respect to all or any
portion of the assets of the Trust Fund; provided,
however, that any compensation paid to such affiliated
subcustodian shall be paid by the Trustee, in its
corporate capacity, and shall not be a charge against the
Trust Fund, and to hold the indicia of ownership of
assets of the Trust Fund in the custody of persons,
custodians or agents outside the United States, to the
extent permitted under ERISA;
(f) To lend or borrow securities or to enter into
repurchase agreements, subject to such restrictions as
the Trustee in its sole discretion may impose;
(g) To register any investment held as part of the Trust
Fund in its own name or in the name of a nominee or to
hold any investment in bearer form; provided, however,
that the books and records of the Trustee shall at all
times show that all such investments held for the Trust
Fund are part of the Trust Fund;
(h) To engage such attorneys, investment advisers,
accountants and such other advisors, and, anything
contained herein to the contrary notwithstanding, to
engage in such legal or administrative proceedings as it
may deem necessary in certain circumstances in connection
with the ~dministration of the Trust Fund, and to
compensate any persons so engaged at such wages. fees,
remuneration, consideration or otherwise, and upon such
terms and conditions as it shall deem reasonable and
proper. Such compensation shall be a charge upon the
Trust Fund and shall in no event be deducted from any
commissions or other compensation payable to the Trustee;
and
(i) To do all such acts, and to exercise all such rights
and privileges, although not specifically mentioned
herein, as the Trustee may deem necessary or proper to
carry out any of the powers set forth herein or otherwise
in the best interest of the Trust Fund.
<Page 105>
Section 4 Compensation and Expenses
4.1 The Trustee shall receive compensation for the performance
of its duties hereunder in accordance with its schedule of
compensation then in effect when such services are rendered.
The Trustee may from time to time amend the schedule, which
amendment shall become effective no earlier than thirty (30)
days after written notice is given to the Employer. Such
compensation shall constitute a charge to be paid by the
Trust Fund.
4.2 Expenses for legal, accounting and all other proper charges
and disbursements of the Trustee shall constitute a charge
to be paid by the Trust Fund.
4.3 Any taxes that may be imposed upon the Trust Fund shall
constitute a charge to be paid by the Trust Fund.
4.4 The Trustee may withdraw from the Trust Fund amounts
sufficient to pay any proper charge against the Trust Fund.
The Employer may make additional contributions to the Trust
Fund for any charges withdrawn from the Trust Fund.
4.5 Notwithstanding the foregoing, to the extent permitted by
law, the Employer shall have the option prior to the payment
of the charge from the Trust Fund to pay directly any charge
against the Trust Fund.
Maintenance of Records and Accounts
Section 5
5.1 The Trustee shall keep or cause to be kept accurate and
detailed records of all its receipts, investments,
disbursements and other transactions that are made pursuant
to this Agreement.
5.2 As soon as practicable after the close of each plan year as
designated in the Plan, the removal or resignation of the
Trustee as provided in Section 6 of this Agreement, or the
termination of the Plan or this Agreement, the Trustee shall
render to the Employer a written accounting of all its
transactions relating to the Trust Fund during the period
from the last previous accounting to the close of the plan
year, the removal or resignation of the Trustee, or the date
of termination of the Plan or this Agreement. After the
mailing of such accounting to the Employer, the Employer
shall promptly notify the Trustee in writing of its approval
or disapproval thereof. Such approval of any statement of
account shall constitute an account stated between the
Trustee and the Employer as to all matters embraced therein
and shall be binding upon the Employer to the same extent as
if the account had been settled and allowed in a proceeding
before a court of competent jurisdiction. In the event that
the Employer shall not, within ninety (90) days after the
mailing of such statement, notify the Trustee in writing of
its disapproval, such statement shall constitute an account
stated between the Employer and the Trustee as to all
matters embraced therein with the same force and effect as
if such statement had been duly approved in writing.
<Page 106>
5.3 The Trustee shall provide the Employer with a written
valuation of the Trust Fund as of the close of each plan
year or at such other time or times as may be requested by
the Plan Administrator and agreed to by the Trustee. The
Trustee's valuation for securities listed on a national
securities exchange shall be based on the most recent
available public quotation. For any other securities and
assets, the Trustee shall rely on the most recent valuation
provided by the Plan Administrator.
5.4 The Trustee shall provide the Employer with such
information, in addition to that provided under Sections 5.2
and 5.3. in the Trustee's possession, as may be necessary
for the Employer to meet the requirements of Section 103 of
ERISA.
5.5 Nothing contained herein shall deprive the Trustee of the
right to have a judicial settlement of its accounts.
Removal, Resignation and
Section 6 Appointment of
Successor Trustee
6.1 Removal of Trustee - The Trustee may be removed by the
Employer at any time by written notice to the Trustee;
provided that prior to the effective date of the removal a
successor trustee(s) has been appointed and has duly
accepted such appointment in a writing addressed to the
Trustee; and further provided, that the effective date of
such removal shall be greater than sixty (60) days after the
date of receipt of such notice by the Trustee, unless a
shorter period of time is established by the mutual written
agreement of the Employer and the Trustee.
6.2 Resignation of Trustee - The Trustee may resign at any time
by written notice to the Employer; provided that the
effective date of the resignation shall be greater than
sixty (60) days after the date of receipt of such notice by
the Employer, unless a shorter period of time is established
by the mutual written agreement of the Employer and the
Trustee.
6.3 Appointment of Successor Trustee - The Employer shall
appoint a successor trustee to act hereunder prior to the
effective date of the removal or resignation of the Trustee.
In the event that the Employer shall not have designated a
successor trustee within sixty (60) days after receipt of
notice of removal or resignation, the Trustee may apply to
any court of competent jurisdiction for the appointment of a
successor trustee.
6.4 Powers of Successor Trustee - Each successor trustee shall
have the powers and duties conferred upon the Trustee in
this Agreement, and the term "Trustee" as used in this
Agreement shall be deemed to include any successor trustee.
6.5 Delivery of Assets to Successor Trustee - The Trustee shall
transfer and deliver the Trust Fund to the successor trustee
as soon as practicable after the effective date of the
successor trustees appointment.
6.6 Reserving Funds for Expenses - The Trustee may reserve such sums
as it deems necessary to defray its expenses in settling its
accounts, to pay any of its accounts, to pay any of its compen
sation due and unpaid, and to discharge any obligation of the
Trust Fund for which the Trustee may be liable; provided,
however, that in the event the sums so reserved are not
sufficient for such purposes, the Trustee shall be entitled to
recover the amount of any deficiency from the Employer, the
successor trustee or each of them.
6.7 Liability of Trustee - At the time the Trust Fund shall have
been transferred and delivered to a successor trustee and the
accounts of the Trustee have been settled, and all duties and
responsibilifles of the Trustee hereunder have been carried out,
the Trustee shall be released and discharged from all further
accountability or liability for the Trust Fund as imposed under
this Agreement and shall not be responsible in any way for the
further disposition of the Trust Fund or any part thereof.
<Page 107>
Section 7 Immunity of Trustee
7 1 Reliance on Counsel - The Trustee may from time to time
consult with counsel and shall be entitled to rely entirely
upon the advice of counsel with respect to any act or
omission.
7.2 Action by Employer - Except as otherwise specifically
provided herein, any action by an Employer that is a
corporation pursuant to any of the provisions of this
Agreement shall be evidenced by (1) a resolution of its
board of directors (the "Board") certified to the Trustee
over the signature of its Secretary or Assistant Secretary
or other duly authorized agent under the corporate seal, if
any, or (2) by appropriate written authorization of any
person or committee to which the Board has delegated the
authority to take such action, and the Trustee shall be
fully protected in acting in accordance with any such
resolution or other authorization. Any action by an Employer
that is a partnership or a sole proprietorship shall be
evidenced by a written certification of a general partner of
the partnership or the sole proprietor, as the case may be.
7.3 General Indemnity - The Employer agrees to indemnify and
hold the Trustee harmless from and against any liability
that the Trustee may incur in the administration of the
Trust Fund including, without limitation, liability for
legal and other professional fees, unless arising from the
Trustee's own negligence or willful misconduct, or except as
such indemnification may be prohibited by
ERISA.
7.4 Specific Indemnities - The Employer agrees to indemnify and
hold the Trustee harmless from and against any liability
that the Trustee may incur due to the occurrence of any of
the following events:
(a) The Employer's failure to make any contribution to
the Trust Fund:
(b) The insufficiency of the Trust Fund to discharge any
liabilities under the Plan:
(c) Following the written directions received from the
Plan Administrator or investment Manager, as the case may
be, pursuant to the provisions of this Agreement:
(e) The application of any part of the Trust Fund by the
Trustee in accordance with the written directions of
the Plan Administrator pursuant to the provisions of this
Agreement: and
(d) Any other action taken or omitted by the Trustee pursuant to
any Investment Directions.
7.5 Conflicting Instructions - In the event of any disagreement
resulting in conflicting instructions to. or adverse claims
or demands upon, the Trustee with respect to payments or
instructions, the Trustee shall be entitled, at its option,
to refuse to comply with any such instruction, claim or
demand so long as such disagreement shall continue, and in
the exercise of such refusal, the Trustee may elect not to
make any payment or other disposition of assets held
pursuant to this Agreement. The Trustee shall not be or
become liable in any way for its failure or refusal to com
ply with any such conflicting instructions or adverse claims
or demands, and it shall be entitled to continue to refrain
from acting until such conflicting or adverse instructions,
claims or demands (a) shall have been adjusted by agreement
and the Trustee shall have been notified in writing thereof
or (b) shall have been finally determined in a court of
competent jurisdiction.
7.6 Waiver --The Trustee shall not, by act, delay, omission or
otherwise, be deemed to have waived any right or remedy it
may have either under this Agreement or generally, and no
waiver shall be valid unless it is contained in a written
instrument signed by the Trustee and only to the extent
expressly set forth therein. A waiver by the Trustee under
the terms of this Agreement shall not be construed as a bar
to, or waiver of, the same or any other such right or remedy
that the Trustee would otherwise have on any other previous
or subsequent occasion.
<Page 108>
Section 8 Plan Termination and Trust Amendments
8 1 (a) In the event that the Plan is discontinued in whole or in
part or this Agreement is revoked or
terminated, the Trustee (after reserving such sums as the
Trustee shall deem necessary to set-
tle its accounts and to discharge any obligation of the
Trust Fund for which the Trustee may
be liable in accordance with Section 6.6 hereof) shall
apply or distribute the Trust Fund in
accordance with the Plan Administrator's Directions. Upon
the Employer's discontinuance of
the Plan in whole or in part or the revocation or
termination of this Agreement, the Trustee
shall have the right to have its accounts settled. When the
Trust Fund shall have been so applied
or distributed, and the accounts of the Trustee shall have
been settled, the Trustee shall not be
responsible in any way for the further disposition of the
Trust Fund (or that part thereof so
applied or distributed, if the Plan is terminated only in
part). The Trustee shall have the right
to withhold distribution or application of any part of
the Trust Fund unless and until written approval of any
such termination has been granted by the Internal Revenue Service: and
(b)if the Plan is a defined benefit plan subject to the jurisdiction of the
Pension Benefit Guaranty Corporation (the "PBGC"), (i) the period of time
set forth in Section 4041 (b)(2)(C) of
ERISA has elapsed and the PBGC has not issued any notice
of noncompliance or (ii) the
PBGC has notified the Plan Administrator that the
requirements for a distress termination
have been met pursuant to Section 404 l(c)(3)(A) of ERISA.
(c) The provisions of sub-Paragraph (b) shall not apply
to a Plan which is not a defined benefit plan.
(d) Assets of the Trust Fund shall not be returned to
the Employer unless and until the Employer has delivered
to the Trustee (i) a certification of an enrolled actuary
stating that there is an amount remaining in the Trust
Fund that is not required for the payment of the benefits
pi~vided under the Plan for participants or their
beneficiaries and (ii) an opinion of counsel satisfactory
to the Trustee, stating that such return of assets is
permitted under the terms of the Plan and applicable law.
<Page 109>
8.2 The Trustee, with the consent of the Employer, shall have
the right to amend this Agreement in any manner. Notice of
any proposed amendment to this Agreement shall be sent to
the Employer by the Trustee and shall provide a list of
acceptable methods for the Employer to indicate or withhold
its consent to such amendment.
ARTICLE 13. Discharge of Duties of Trustee
Section 9 and Allocation of
Responsibilities
9.1 Discharge of Duties - The Trustee shall discharge its duties
set forth in this Agreement solely in the interest of Plan
participants and their beneficiaries and for the exclusive
purpose of providing benefits to Plan participants and their
beneficiaries and defraying reasonable expenses of
administering the Trust Fund. The Trustee shall discharge
its duties hereunder with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims.
9.2 Allocation of Responsibilities - In the event that the
Trustee has been designated as an additional Trustee for the
Plan, it shall have no responsibilities other than as set
forth herein, and this Agreement shall constitute a
supplemental trust agreement. The duties of the Trustee
shall be limited to the assets held in the Trust Fund, and
the Trustee shall have no duties with respect to assets held
by any other person including, without limitation, any other
trustee for the Plan. The Employer hereby agrees that the
Trustee shall not serve as, and shall not be deemed to be, a
co-trustee under any circumstances.
9.3 Relationship of Fiduciaries - The Trustee shall be solely
responsible for its own acts or omissions. The Trustee shall
have no duty to question any other fiduciary's performance
of duties allocated to such other fiduciary pursuant to the
Plan. The Trustee shall not be responsible for the breach of
another fiduciary unless the Trustee (i) participates
knowingly in, or knowingly undertakes to conceal, an act or
omission of such other fiduciary, knowing such act or
omission is a breach, (ii) has actual knowledge of a breach
by such other fiduciary and fails to make reasonable efforts
under the circumstances to remedy the breach or (iii) has
failed to perform its own specific fiduciary duties and
thereby has enabled another fiduciary to commit a breach.
<Page 110>
Section 10 Miscellaneous Provisions
10.1 Execution of Adoption Agreement - This Agreement shall be
adopted by execution of the Trust Adoption Agreement.
10.2 Severability - In the event that any provision of this
Agreement is deemed or held to be unlawful or invalid for
any reason, such event shall not adversely affect any other
provision contained herein unless such illegality shall make
impossible or impracticable the functioning of this
Agreement, and in such case, the appropriate parties shall
immediately amend this Agreement.
10.3 Titles and Headings - The titles and headings of the
Sections in this instrument are placed herein for
convenience of reference only. In the event of any conflict,
the text of this instrument, rather than such titles or
headings, shall control the interpretation of any of the
terms and provisions contained herein.
10.4 Subject to the provisions of ERISA which may be applicable
and may provide to the contrary. this Agreement shall be
administered, construed and enforced according to the laws
of the State of Delaware.
10.5 All required notification of the Trustee shall be made in
writing and delivered to Smith Barney Corporate Trust Company at
824 Market Street, Suite 210, Wilmington, Delaware 19801.
<Page 111>
This Amendment modifies and amends the Smith Barney Corporate
Trust Company Trust Agreement ["the Agreement"] made by and
between Smith Barney Corporate Trust Company ["the Trustee"] and
Juno Lighting, Inc. ["the Plan Administrator"].
NOW THEREFORE, intending to be legally bound by the Agreement as
modified by this Amendment, the parties agree as follows:
13.1 Participant Directed Investment
Section 3.5 is amended by replacing the words "written Investment
Directions" in the third line with the following: written,
electronic, or telephonic investment directions given directly to
the Trustee by the participant, beneficiary, or alternate payee
according to procedures, terms, and conditions determined by the
Plan Administrator and accepted by the Trustee.
Section 3.5 is amended by inserting after the word "account" in
the fourth line the following: (subject to such procedures,
terms, and conditions).
Section 3.5 is amended by deleting the words "in writing" from
the fourth and fifth lines.
13.2 Proxy statements
The Agreement is amended by adding a new Section 3.6A as follows:
The Trustee shall forward to each Investment Manager or the Plan
Administrator, as applicable, any and all proxies, proxy
statements, notices, requests, advice or other communications
within a reasonable time in light of the circumstances, upon
receipt of such materials by the Trustee (or its nominee), except
as from time to time the Plan Administrator and the Trustee shall
in writing otherwise agree, and the Trustee shall follow voting
instructions from the Investment Manager or the Plan
Administrator with respect thereto.
13.3 Trustee's investment powers
Section 3.9(c) is amended by inserting after the words "cash
balances" the following: for a limited time pending investment
or distribution.
13.4 Trustee's accounts
Section 5.2 is amended by inserting after the phrase "...
designated in the Plan," the following: the close of each
calendar quarter (namely the last days of March, June, September,
and December of each calendar year),.
<Page 112>
Section 5.2 is amended by inserting after the phrase "... from
the last previous accounting to the close of the plan year," the
following: calendar quarter,.
Section 5.2 is amended by inserting after the phrase "the date of
termination of the Plan or this Agreement," the following: it
being understood that the written account of all the transactions
relating to the Trust Fund for the plan year shall cover the 12-
month period from one plan year ending date (as designated in the
Plan) to the next, and that the written account of all the
transactions relating to the Trust Fund for the calendar quarter
shall cover the 3-month period for each calendar quarter ending
on the last days of March, June, September, and December of each
calendar year.
13.5 Trustee's valuations
Section 5.3 is amended by inserting after the words "as of the
close of each plan year" the following: and as of the close of
each calendar quarter (namely the last days of March, June,
September, and December of each calendar year),.
13.6 Removal of Trustee
Section 6.1 is amended by revising the proviso to read as
follows: that the effective date of such removal shall be no
earlier than ten (10) days after written notice is given to the
Trustee, unless a shorter period of time is established by mutual
agreement of the Employer and the Trustee.
13.7 Liability of Trustee
Section 6.7 is revised in its entirety to read as follows:
At the time the Trust Fund shall have been transferred and
delivered to a successor trustee and if within ninety (90) days
after receipt of the final statement of account, the Employer or
the successor trustee does not notify the Trustee in writing of
its disapproval with respect to the final statement of account,
the accounts of the Trustee shall have been settled, and the
Trustee shall be released and discharged from all further
accountability or liability for the Trust Fund and shall not be
responsible in any way for the further disposition of the Trust
Fund or any part thereof.
13.8 Indemnification
Section 7.3 is revised in its entirety to read as follows:
The Employer shall hold harmless and indemnify the Trustee from
and against any liability that the Trustee may incur in the
administration of the Trust Fund including, without limitation,
liability for legal and other professional fees, unless arising
from the Trustee's breach of this Agreement or from the Trustee's
breach of a duty under Part 4 of Title I of the Employee
Retirement Income Security Act of 1974, as amended ["ERISA"]
after giving effect, consistent with ERISA 405, to this
Agreement and any writings contemplated or permitted to be given
under this Agreement.
To make the Agreement including this Amendment binding, the
parties have signed below.
<Page 113>
Smith Barney Corporate Trust Company
Juno Lighting, Inc. by its agent Copeland Associates LLC
BY: BY:
___/s/ __Joel Chemers_________ ____/s/__G._DeFazio_________
date: ___June 28, 2000________ date: ___June 29, 2000__
<Page 114>
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this
"Amendment"), dated as of June 30, 2000, among JUNO LIGHTING,
INC., a Delaware corporation (the "Company"), the lenders party
to the Credit Agreement referred to below (the "Lenders"), BANK
OF AMERICA, N.A., as administrative agent (the "Administrative
Agent") for the Lenders, and CREDIT SUISSE FIRST BOSTON, as
syndication agent for the Lenders (the "Syndication Agent",
together with the Administrative Agent, being hereinafter
referred to collectively as the "Agents").
PRELIMINARY STATEMENTS:
(1) The Company, the Lenders and the Agents have entered
into a Credit Agreement dated as of June 29, 1999 (said Credit
Agreement being hereinafter referred to as the
"Credit Agreement"; the terms defined therein being used herein
as therein defined unless otherwise defined herein).
(2) The Company is in violation of Section 8.1(a) of the
Credit Agreement since, on May 31, 2000, the Interest Coverage
Ratio of the Company was 1.987 to 1.00 instead of the required
level of at least 2.00 to 1.00 (the "Existing Default").
(3) The Company has requested that the Required Lenders
waive the Existing Default and amend the Credit Agreement as
hereinafter set forth.
(4) The Required Lenders are, on the terms and conditions
stated below, willing to waive the Existing Default and amend the
Credit Agreement as hereinafter set forth.
<Page 115>
1
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 4
hereof, hereby amended as follows:
(a) Sections 8.1(a), (b) and (c) of the Credit Agreement are
amended in full to
read as follows:
"(a) Interest Coverage Ratio. Permit the Interest Coverage
Ratio as at the last day of any period of four consecutive fiscal
quarters of the Company ending with any fiscal quarter set forth
below to be less than the ratio set forth opposite such fiscal
quarter:
Fiscal Quarter Interest Coverage Ratio
08/31/2000 1.60 to 1.00
11/30/2000 1.60 to 1.00
02/28/2001 1.60 to 1.00
05/31/2001 1.60 to 1.00
08/31/2001 1.60 to 1.00
11/30/2001 1.85 to 1.00
02/28/2002 1.85 to 1.00
05/31/2002 1.85 to 1.00
08/31/2002 1.85 to 1.00
11/30/2002 2.00 to 1.00
02/28/2003 2.00 to 1.00
05/31/2003 2.00 to 1.00
08/31/2003 2.00 to 1.00
11/30/2003 2.25 to 1.00
02/28/2004 2.25 to 1.00
05/31/2004 2.25 to 1.00
08/31/2004 2.25 to 1.00
11/30/2004 2.50 to 1.00
02/28/2005 2.50 to 1.00
05/31/2005 2.50 to 1.00
08/31/2005 2.50 to 1.00
11/30/2005 2.75 to 1.00
11/30/2005 2.75 to 1.00
02/28/2006 2.75 to 1.00
05/31/2006 2.75 to 1.00
08/31/2006 2.75 to 1.00
11/30/2006 3.00 to 1.00
<Page 116>
(b) Leverage Ratio. Permit the Leverage Ratio as at the last
day of any period of four consecutive fiscal quarters of the
Company ending with any fiscal quarter set forth below to exceed
the ratio set forth opposite such fiscal quarter:
Fiscal Quarter Leverage Ratio
08/31/2000 5.25 to 1.00
11/30/2000 5.25 to 1.00
02/28/2001 5.10 to 1.00
05/31/2001 5.10 to 1.00
08/31/2001 5.10 to 1.00
11/30/2001 4.75 to 1.00
02/28/2002 4.75 to 1.00
05/31/2002 4.75 to 1.00
08/31/2002 4.75 to 1.00
11/30/2002 4.50 to 1.00
02/28/2003 4.50 to 1.00
05/31/2003 4.50 to 1.00
11/30/2003 4.50 to 1.00
02/28/2004 4.25 to 1.00
05/31/2004 4.25 to 1.00
08/31/2004 4.25 to 1.00
11/30/2004 4.00 to 1.00
02/28/2005 4.00 to 1.00
05/31/2005 4.00 to 1.00
08/31/2005 4.00 to 1.00
11/30/2005 3.50 to 1.00
02/28/2006 3.50 to 1.00
05/31/2006 3.50 to 1.00
8/31/2006 3.50 to 1.00
11/30/2006 3.00 to 1.00
<Page 117>
(c) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for any period of four consecutive fiscal quarters
of the Company ending with any fiscal quarter set forth below to
be less than the ratio set forth below opposite such fiscal
quarter:
Fiscal Quarter Fixed Charge Coverage Ratio
08/31/2000 1.20 to 1.00
11/30/2000 1.20 to 1.00
02/28/2001 1.20 to 1.00
05/31/2001 1.20 to 1.00
08/31/2001 1.20 to 1.00
11/30/2001 1.35 to 1.00
02/28/2002 1.35 to 1.00
05/31/2002 1.35 to 1.00
08/31/2002 1.35 to 1.00
11/30/2002 1.60 to 1.00
02/28/2003 1.60 to 1.00
05/31/2003 1.60 to 1.00
08/31/2003 1.60 to 1.00
11/30/2003 1.70 to 1.00
02/28/2004 1.70 to 1.00
05/31/2004 1.70 to 1.00
08/31/2004 1.70 to 1.00
11/30/2004 1.80 to 1.00
02/28/2005 1.80 to 1.00
05/31/2005 1.80 to 1.00
08/31/2005 1.80 to 1.00
11/30/2005 1.80 to 1.00
02/28/2006 1.80 to 1.00
05/31/2006 1.80 to 1.00
08/31/2006 1.80 to 1.00
11/30/2006 2.00 to 1.00 "=
(b) Clause (b)(iii) in the first sentence of Section 4.2 of
the Credit Agreement is amended in full to read as follows:
"(iii) each prepayment is in a minimum principal amount of
$1,000,000 and a multiple of $1,000,000 in excess thereof (unless
such prepayment is made on a date on which principal of the Term
Loans is due and payable pursuant Section 3.3, 3.4 or 4.3(b), in
which case there shall be no
minimum prepayment amount)."
<Page 118>
4
SECTION 2. Amendment to Annex A of Credit Agreement. Annex A
of the Credit Agreement is, effective as of the date hereof, and
subject to the satisfaction of the conditions precedent in
Section 4 hereof, hereby amended and restated to read as set
forth on Exhibit A of this Amendment.
SECTION 3. Waiver of Existing Default. The Required Lenders
hereby waive the Existing Default. Nothing contained in this
Amendment shall constitute or be construed as a waiver of any
other Default or Event of Default.
SECTION 4. Conditions of Effectiveness. This Amendment shall
become effective when, and only when, on or before June 30, 2000,
the Administrative Agent shall have received
counterparts of this Amendment executed by the Company and the
Required Lenders or, as to any of the Required Lenders, advice
satisfactory to the Administrative Agent that such Lenders have
executed this Amendment and Sections 1, 2 and 3 hereof shall
become effective when, and only when, on or
before June 30, 2000, the Administrative Agent shall have
additionally received all of the following documents, each
document (unless otherwise indicated) being dated the date of
receipt thereof by the Administrative Agent (which date shall be
the same for all such documents), in form and substance
satisfactory to the Administrative Agent:
(a) Certified copies of (i) the resolutions of the Board of
Directors of (x) the Company approving this Amendment and the
matters contemplated hereby and (y) each Loan Party (other than
the Company) evidencing approval of the Consent appended hereto
(the "Consent") and the matters contemplated hereby and thereby
and (ii) all documents evidencing any other necessary corporate
action and approvals of Governmental Authorities, if any, with
respect to this Amendment and the Consent and the matters
contemplated hereby and thereby.
(b) A certificate of the Secretary or an Assistant Secretary
of the Company and each Loan Party (other than the Company)
certifying the names and true signatures of its officers
authorized to sign this Amendment or the Consent and the other
documents to be delivered hereunder.
(c) Counterparts of the Consent, executed by each Loan Party
(other than the Company).
<Page 119>
5
A certificate signed by a duly authorized officer of the
Company stating that:
(i) The representations and warranties contained in Section
5 hereof are correct on and as of the date of such certificate as
though made on and as of such date; and
(ii) After giving effect to the waiver contained in Section
3 of this Amendment, no event has occurred and is continuing that
constitutes a Default or an Event of Default.
(e) The Administrative Agent shall have received payment of
all fees payable to it and the Lenders pursuant to the fee letter
dated as of June 30, 2000, between the Administrative Agent and
the Company.
SECTION 5. Representations and Warranties of the Company.
The Company represents and warrants to the Agents and the Lenders
as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
indicated at the beginning of this Amendment.
(b) The execution, delivery and performance by the Company
of this Amendment and the Loan Documents, as amended hereby, to
which it is or is to be a party are within the Company's
corporate powers, have been duly authorized by all necessary
corporate action and do not
violate, contravene or create a default under (i) the Company's
charter or by-laws (or other organizational documents), (ii) any
Requirement of Law or (iii) any Contractual Obligation binding on
or affecting the Company, or result in, or require, the creation
or imposition of any mortgage, deed of trust, pledge, Lien,
security interest or other charge, encumbrance or preferential
arrangement of any nature (other than pursuant to the Security
Documents) upon or with respect to any of the properties now
owned or hereafter acquired by the Company.
(c) No authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority is required
for the due execution, delivery and performance by the Company of
this Amendment or any of the Loan Documents, as amended hereby,
to which it is or is to be a party.
<Page 120>
6
(d) This Amendment and each of the other Loan Documents, as
amended hereby, to which the Company is a party constitute legal,
valid and binding obligations of the Company enforceable against
the Company in accordance with their respective terms.
(e) The Consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at November 30, 1999, and the
related Consolidated statements of earnings and of
cash flows for the fiscal year ended on such date, reported on by
copies of which have heretofore been furnished to each Lender,
present fairly the Consolidated financial condition of the
Company and its Consolidated Subsidiaries as at such date, and
the Consolidated results of their operations and their
Consolidated cash flows for the fiscal year then ended. The
unaudited Consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at May 31, 2000, and the related
unaudited Consolidated statements of earnings and of cash flows
for the six-month period ended on such date, certified by a
Responsible Officer, copies of which have heretofore been
furnished to each Lender, present fairly the Consolidated
financial condition of the Company and its Consolidated
Subsidiaries as at such date, and the Consolidated results of
their operations and their Consolidated cash flows for the
six-month period then ended (subject to normal year-end audit
adjustments and the absence of footnotes). All such financial
statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently
throughout the periods involved as required by GAAP (except as
approved by such accountants or Responsible Officer, as the case
may be, and as disclosed therein). Neither the Company nor any of
its Consolidated Subsidiaries had, at the date of the most recent
balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment,
including any Hedge Agreement, which is not reflected in the
foregoing statements or in the notes thereto. Since November 30,
1999, there has been no development or event that could
reasonably be expected to have a Material Adverse Effect.
<Page 121>
7
(f) Except with respect to certain Intellectual Property
identified by the Company in writing to the Administrative Agent,
neither the Company nor any Subsidiary has acquired any property
since the Closing Date in which a perfected security interest or
Lien has not been granted to the Administrative Agent (i)
pursuant to the Guarantee and Collateral Agreement or (ii) in
accordance with Section 7.10 of the Credit Agreement.
(g) The representations and warranties of the Company and
its Subsidiaries contained in the Credit Agreement and the other
Loan Documents are true and correct on the date
hereof with the same force and effect as if made on such date.
SECTION 6. Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of Sections 1, 2 and 3 hereof, on
and after the date hereof each reference in the Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in
the other Loan Documents to "the
Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit
Agreement and the Notes, and all other Loan Documents, are and
shall continue to be in full force and effect and are hereby in
all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Security Documents and all of
the Collateral described therein do and shall continue to secure
the payment and performance
of the Obligations.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of any Lender or the
Administrative Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any
of the Loan Documents.
<Page 122>
8
SECTION 7. Costs, Expenses and Taxes. The Company agrees to
pay on demand all costs and expenses of the Administrative Agent
in connection with the preparation, execution, delivery,
administration, modification and amendment of this Amendment and
the other instruments and documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-
pocket expenses of counsel for the Administrative Agent with
respect thereto and with respect to advising the Administrative
Agent as to its rights and responsibilities hereunder and
thereunder. The Company further agrees to pay on demand all costs
and expenses, if any (including, without limitation, reasonable
counsel fees an expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of
this Amendment and the other instruments and documents to be
delivered hereunder, including, without limitation, reasonable
counsel fees and
expenses in connection with the enforcement of rights under this
Section 7. In addition, the Company shall pay any and all stamp
and other taxes payable or determined to be payable in connection
with the execution and delivery of this Amendment and the other
instruments and documents to be delivered hereunder, and agrees
to hold the Agents and each Lender harmless from and against any
and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes.
SECTION 8. Execution in Counterparts. This Amendment may be
executed in any number of counterparts (including facsimile
counterparts) and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
SECTION 9. Governing Law. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of
New York, without regard to the principles of conflict of laws
thereof, except Sections 5-1401 and 5-1402 of the New York
General Obligations Law.
<Page 123>
9
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
JUNO LIGHTING, INC.
By:_/s/_ Joel W. Chemers _______
Name:__Joel W. Chemers__________
Title:_Vice President___________
BANK OF AMERICA, N.A.,
as Administrative Agent, Issuing Bank, and a Lender
By:__/s/ W. Thomas Barnett______
Name:__W. Thomas Barnett________
Title:_Managing Director________
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent and a Lender
By:__/s/ Bill O'Daly____________
Name:_____Bill O'Daly___________
Title:_Vice President____________
CREDIT SUISSE FIRST BOSTON,
as Syndicated Agent and a Lender
By:___/s/ Thomas G. Muoio____
Name:__Thomas G. Muoio_______
Title:__Vice President_______
U.S. BANK NATIONAL ASSOCIATION
By:__/s/ Carol Morse_____________
Name:___Carol Morse______________
Title:_Senior Vice President_____
NATIONAL CITY BANK
By:__/s/ Michael Brothers________
Name:__Michael Brothers__________
Title:_Vice President____________
WELLS FARGO BANK, N.A.
By:___/s/ David A Neumann________
Name:__David A. Neumann__________
Title:__Senior Vice President____
<Page 124>
10
COMERICA BANK
By:__/s/ James B. Haeffner_______
Name:___James B. Haeffner_______
Title:__First Vice President_____
FIRSTAR BANK MILWAUKEE, N.A.
By:__/s/ Jason R. Hickey______
Name:__Jason R. Hickey________
Title:_Vice President_________
HARRIS TRUST AND SAVINGS BANK
By:_/s/ Ronald V. Redd________
Name:___Ronald V. Redd________
Title:_Vice President_________
SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as Investment Advisor
By:__/s/ Payson F. Swaffield_
Name:__Payson F. Swaffield____
Title:_Vice President_________
KEMPER FLOATING RATE FUND
By:_/s/ Kelly D. Babson_______
Name:__Kelly D. Babson________
Title:_Managing Director______
STEIN ROE & FARNHAM CLO I LTD.
By: STEIN ROE & FARNHAM INCORPORATED, as Portfolio Manager
By:__/s/ James R. Fellows_____
Name:_James R. Fellows________
Title:__Sr. Vice President & Portfolio Manager
STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY
By:__/s/ James R. Fellows_____
Name:_James R. Fellows________
Title:__Sr. Vice President & Portfolio Manager
OLYMPIC FUNDING TRUST
By:__/s/ Ashley R. Hamilton___
Name:_Ashley R. Hamilton_____
Title:_Authorized Agent_______
<Page 125>
11
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc. as its investment manager
By:_/s/ Jason Groom___________
Name:__Jason Groom____________
Title:___Vice President_______
KZH RIVERSIDE LLC
By:_/s/ Susan Lee_____________
Name:___Susan Lee_____________
Title:_Authorized Agent_______
<Page 126>
12
CONSENT
Dated as of June 30, 2000
Each of the undersigned, as a Loan Party, hereby consents to
the foregoing Amendment and hereby confirms and agrees that (i)
each of the Loan Documents to which it is a party is, and shall
continue to be, in full force and effect in accordance with its
respective terms and is hereby ratified and confirmed in all
respects, and (ii) upon the effectiveness of, and on and after
the date of, the foregoing Amendment, each reference in the
Security Documents to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended by the foregoing
Amendment. Each of the undersigned Loan Parties hereby represents
and warrants to the Administrative Agent and the Lenders that the
execution and delivery of this Consent by such Loan Party has
been duly authorized by all necessary corporate action and does
not violate or contravene or create a default under any
Requirement of Law or any Contractual Obligation.
JUNO MANUFACTURING,
an Illinois corporation
By:___/s/ Joel W. Chemers
Name:__Joel W. Chemers___
Title:_Vice President____
INDY LIGHTING, INC.,
an Indiana corporation
By:_ _/s/ Joel W. Chemers
Name:__ Joel W. Chemers__
Title:__ Vice President__
ADVANCED FIBEROPTIC TECHNOLOGIES,
INC., a Florida corporation
By:___/s/ Joel W. Chemers
Name:___ Joel W. Chemers_
Title:___ Vice President_
JUNO LIGHTING, LTD.,
a corporation organized under the laws of Ontario, Canada
By:_ _/s/ Joel W. Chemers
Name:___ Joel W. Chemers__
Title:___ Vice President__
13
<Page 127>
EXHIBIT A
Annex A to
Credit Agreement
<TABLE>
Applicable Percentage for Revolving
Credit Loans, Tranche A Term Loans,
Letter of Credit Fees and Commitment Fees
<CAPTION>
<S> <C> <C> <C> <C> <C>
Pricing Level Leverage Leverage Leverage Leverage Leverage
Ratio Ratio Ratio Ratio Ratio
Level I Level II Level III Level IV Level V
Leverage Ratio = X x is greater than 4.000 is less 3.500 is less 2.75 is less x is less than
or equal to 4.500 than or equal than or equal than or equal 2.750
to x less than to x less than to x less
4.500 4.000 than 3.500
Applicable
Percentage for
Eurodollar
Loans 2.750% 2.500% 2.250% 2.000% 1.625%
Applicable 1.250% 1.000% .750% 0.500% 0.125%
Percentage for
Base Rate Loans
Applicable 2.750% 2.500% 2.250% 2.000% 1.625%
Percentage for
Letter of
Credit
Fees
Applicable 0.500% 0.500% 0.500% 0.500% 0.375%
Percentage for
Commitment Fees
</TABLE>
<TABLE>
Applicable Percentage for
Tranche B Term Loans
<CAPTION>
<S> <C> <C> <C> <C> <C>
Pricing Level Leverage Leverage Leverage Leverage Leverage
Ratio Ratio Level Ratio Ratio Ratio
Level I II Level Level IV Level V
III
Leverage Ratio = X x is 4.000 is less 3.50 is less 2.750 is less x is less than
greater than than or equal than or equal than or equal 2.750
or equal to to x less than to x less than to x less
4.500 4.500 4.000 than 3.500
Applicable 3.250% 3.000% 3.000% 2.750% 2.750%
Percentage for
Eurodollar
Loans
Applicable 1.750% 1.500% 1.500% 1.250% 1.250%
Percentage for
Base Rate Loans
</TABLE>
14
