<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
NS GROUP, INC.
(Exact name of registrant as specified in its charter)
Kentucky 61-0985936
(State of Incorporation) (I.R.S. Employer Identification No.)
Ninth and Lowell Streets
Newport, Kentucky 41072
(Address, including zip code, of
registrant's principal executive offices)
--------------
NS GROUP, INC. SALARIED EMPLOYEES
RETIREMENT SAVINGS PLAN
(Full title of the plan)
------------
John R. Parker, Vice President
NS Group, Inc.
Ninth and Lowell Streets
Newport, Kentucky 41072
(606) 292-6809
(Name, address and telephone number,
including area code, of agent for service)
------------
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of securities Amount to offering price per aggregate offering Amount of
to be registered be registered share price registration fee
(1) (1)
- ------------------------------- ---------------- ---------------------- ---------------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, no par value, 450,000 $3.90625 $1,757,813 $489
including Preferred Stock
Purchase Rights (2)
- ------------------------------- ---------------- ---------------------- ---------------------- ----------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and Rule 457(h) under the Securities Act of
1933, based upon the average of the reported high and low prices of a share
of Common Stock on the New York Stock Exchange on February 24, 1999.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the benefit plan described herein.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents filed by NS Group, Inc. (the "Company") with
the Securities and Exchange Commission (the "Commission") are incorporated
herein by reference as of their respective dates of filing:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended September 26, 1998 filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
The Annual Report of the NS Group, Inc. Salaried Employees
Flexible Compensation Plan (now known as the NS Group, Inc. Salaried
Employees Retirement Savings Plan) on Form 11-K for the year ended
September 27, 1997 filed pursuant to Section 13 of the Exchange Act and
the requirements of Form S-8;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended December 26, 1998 filed pursuant to Section 13(a) of the
Exchange Act;
(c) The description of the Company's Common Stock, no par
value ("Common Stock"), contained in the Registration Statement on Form
8-A, dated November 17, 1988, filed pursuant to Section 12 of the
Exchange Act, including any amendment or report filed for the purpose
of updating such description; and
The description of the Company's Preferred Stock Purchase
Rights contained in the Registration Statement on Form 8-A, dated
November 5, 1998, filed pursuant to Section 12 of the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all Common Stock offered hereunder
has been sold or which deregisters all Common Stock then remaining unsold
hereunder shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
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<PAGE> 3
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Sections 271B.8-500 to 271B.8-580 of the Kentucky Business Corporation
Act provide that, subject to restrictions contained in the statute, a
corporation may indemnify any person made or threatened to be made a party to
any threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise or employee benefit plan.
A person, who has been successful on the merits or otherwise in any
suit or matter covered by the indemnification statute, is entitled to be
indemnified against expenses (including attorneys' fees) reasonably incurred by
him in connection therewith. Indemnification is authorized upon a determination
that the person to be indemnified has met the applicable standard of conduct
required. Such determination may be made by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding; or if such a quorum cannot be obtained, by a majority vote
of a committee of the board, duly designated so to act by a majority of the full
board, consisting solely of two or more directors who are not parties to the
action; or by special legal counsel selected by the board or a committee
thereof; or by the shareholders who are not parties to such action, suit or
proceeding. Expenses incurred in defense may be paid in advance upon receipt by
the corporation of a written affirmation by the director of his good faith
belief that he has met the applicable standard of conduct required, a written
undertaking by or on behalf of the director to repay such advance if it is
ultimately determined that he did not meet the standard of conduct and a
determination that the facts then known to those making the determination would
not preclude indemnification under the statute. The indemnification provided by
the statute is not deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
shareholders or disinterested directors, or otherwise, which will inure to the
benefit of the heirs, executors and administrators of such a person. Insurance
may be purchased on behalf of any person entitled to indemnification by the
corporation against any liability incurred in an official capacity regardless of
whether the person could be indemnified under the statute. References to the
corporation include all constituent corporations absorbed in a consolidation or
merger as well as the resulting or surviving corporation, and anyone seeking
indemnification by virtue of acting in some capacity with a constituent
corporation would stand in the same position as if he had served the resulting
or surviving corporation in the same capacity.
The By-Laws of the Company provide for indemnification of directors and
officers of the Company to the maximum extent permitted by the Kentucky Business
Corporation Act.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
II-2
<PAGE> 4
Item 8. Exhibits.
---------
See Index to Exhibits following signature pages.
Item 9. Undertakings.
-------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii)To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that the undertakings set
forth in paragraphs (i) and (ii) above do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Securities and
II-3
<PAGE> 5
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newport, Commonwealth of Kentucky, on this 26th day
of February, 1999.
NS GROUP, INC.
By /s/ John R. Parker
---------------------
John R. Parker
Vice President, Treasurer and Chief
Financial Officer
POWER OF ATTORNEY
-----------------
Each person whose signature appears below hereby constitutes and
appoints Clifford R. Borland and John R. Parker, and each of them severally, as
the undersigned's lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to execute in the undersigned's name, place and
stead, any amendments (including post-effective amendments) to the foregoing
Registration Statement and to file the same with the Securities and Exchange
Commission. Each of such attorneys shall have full power and authority to do and
perform, in the name and on behalf of each of the undersigned, every act
whatsoever necessary or desirable to be done, as fully to all intents and
purposes as the undersigned might or could do in person. The undersigned each
hereby ratifies and approves the acts of such attorneys and each of them.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
- ---------------------------------------- ------------------------------------------------ -----------------
Name Title Date
- ---- ----- ----
- ---------------------------------------- ------------------------------------------------ -----------------
<S> <C> <C>
/s/ Clifford R. Borland President, Chief Executive Officer and February 26, 1999
- -------------------------- Director (principal executive officer)
Clifford R. Borland
</TABLE>
S-1
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ John R. Parker Vice President, Treasurer and Chief Financial February 26, 1999
- ------------------------- Officer (principal financial officer)
John R. Parker
/s/ Thomas J. Depenbrock Vice President and Corporate Controller February 26, 1999
- ------------------------- (principal accounting officer)
Thomas J. Depenbrock
/s/ Paul C. Borland, Jr. Director February 26, 1999
- -------------------------
Paul C. Borland, Jr.
/s/ Ronald R. Noel Director February 26, 1999
- -------------------------
Ronald R. Noel
/s/ John B. Lally Director February 26, 1999
- -------------------------
John B. Lally
/s/ Patrick J.B. Donnelly Director February 26, 1999
- -------------------------
Patrick J.B. Donnelly
/s/ R. Glen Mayfield Director February 26, 1999
- -------------------------
R. Glen Mayfield
</TABLE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the NS Group, Inc. Salaried Employees Retirement Savings Plan has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Newport, Commonwealth of Kentucky, on
February 24, 1999.
ADVISORY COMMITTEE
By /s/ Thomas J. Depenbrock
--------------------------
Thomas J. Depenbrock, Member
By /s/ Ronald R. Noel
----------------------------
Ronald R. Noel, Member
By /s/ John R. Parker
----------------------------
John R. Parker, Member
S-2
<PAGE> 8
INDEX TO EXHIBITS
-----------------
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES:
4.1 Amended and Restated Articles of Incorporation of
the Company, as amended, filed as Exhibit 3.1 to
Amendment No. 1 to the Company's Registration
Statement on Form S-1 dated January 17, 1995 (Reg.
No. 33-56637) *
4.2 Amended and Restated By-Laws of the Company dated
December 4, 1995, filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 (File No.
1-9838)*
4.3 NS Group, Inc. Salaried Employees Retirement
Savings Plan
4.4 Trust Agreement for NS Group, Inc. Salaried
Employees Retirement Savings Plan
(23) CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Arthur Andersen LLP
(24) POWERS OF ATTORNEY
24.1 A Power of Attorney granted by each director
executing this registration statement is set forth on
the signature page to this Registration Statement
- -------------------------------------
* Indicates that exhibit is incorporated by reference from a previous filing
with the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 4.3
-----------
NS GROUP, INC. SALARIED EMPLOYEES RETIREMENT SAVINGS PLAN
(September 28, 1997 Restatement)
<PAGE> 2
TABLE OF CONTENTS
PREAMBLE
ARTICLE I
DEFINITIONS
1.1 Plan Definitions........................................... 2
1.2 Interpretation............................................. 7
ARTICLE II
SERVICE
2.1 Definitions................................................. 8
2.2 Crediting of Hours of Service............................... 8
2.3 Hours of Service Equivalencies.............................. 9
2.4 Limitations on Crediting of Hours of Service................10
2.5 Department of Labor Rules...................................10
2.6 Years of Eligibility Service................................11
2.7 Years of Vesting Service....................................11
ARTICLE III
ELIGIBILITY
3.1 Eligibility.................................................12
3.2 Transfers of Employment.....................................12
3.3 Reemployment................................................12
3.4 Notification Concerning New Eligible Employees..............12
3.5 Effect and Duration.........................................13
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 Tax-Deferred Contributions..................................14
4.2 Amount of Tax-Deferred Contributions........................14
4.3 Changes in Reduction Authorization..........................14
4.4 Suspension of Tax-Deferred Contributions....................15
4.5 Resumption of Tax-Deferred Contributions....................15
4.6 Delivery of Tax-Deferred Contributions......................15
4.7 Vesting of Tax-Deferred Contributions.......................15
(i)
<PAGE> 3
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 No After-Tax Contributions..................................16
5.2 Rollover Contributions......................................16
5.3 Vesting of Rollover Contributions...........................16
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 Contribution Period.........................................17
6.2 Profit-Sharing Contributions................................17
6.3 Allocation of Profit-Sharing Contributions..................17
6.4 Matching Contributions......................................17
6.5 Allocation of Matching Contributions........................17
6.6 Verification of Amount of Employer Contributions by the
Sponsor.....................................................18
6.7 Payment of Employer Contributions...........................18
6.8 Eligibility to Participate in Allocation....................18
6.9 Vesting of Employer Contributions...........................19
6.10 Election of Former Vesting Schedule.........................19
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 Definitions.................................................20
7.2 Code Section 402(g) Limit...................................23
7.3 Distribution of Excess Deferrals............................24
7.4 Limitation on Tax-Deferred Contributions of Highly
Compensated Employees.......................................24
7.5 Distribution of Excess Tax-Deferred Contributions...........25
7.6 Limitation on Matching Contributions of Highly
Compensated Employees.......................................26
7.7 Distribution of Excess Contributions........................27
7.8 Multiple Use Limitation.....................................28
7.9 Determination of Income or Loss.............................28
7.10 Code Section 415 Limitations on Crediting of
Contributions and Forfeitures...............................28
7.11 Coverage Under Other Qualified Defined Contribution
Plan........................................................29
7.12 Coverage Under Qualified Defined Benefit Plan...............30
7.13 Scope of Limitations........................................30
(ii)
<PAGE> 4
ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 General Fund................................................31
8.2 Investment Funds............................................31
8.3 Income on Trust.............................................31
8.4 Separate Accounts...........................................31
8.5 Sub-Accounts................................................32
ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 No Life Insurance Contracts.................................33
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 Future Contribution Investment Elections....................34
10.2 Deposit of Contributions....................................34
10.3 Election to Transfer Between Funds..........................34
ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 Crediting Separate Accounts.................................35
11.2 Valuing Separate Accounts...................................35
11.3 Plan Valuation Procedures...................................35
11.4 Finality of Determinations..................................36
11.5 Notification................................................36
ARTICLE XII
LOANS
12.1 No Loans....................................................37
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 Withdrawals of Rollover Contributions.......................38
13.2 Withdrawals of Tax-Deferred Contributions...................38
13.3 Limitations on Withdrawals Other than Hardship
Withdrawals.................................................38
13.4 Conditions and Limitations on Hardship Withdrawals..........38
13.5 Order of Withdrawal from a Participant's Sub-Accounts.......40
(iii)
<PAGE> 5
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 Termination of Employment and Settlement Date...............41
14.2 Recrediting of Forfeited Amounts............................41
ARTICLE XV
DISTRIBUTIONS
15.1 Distributions to Participants...............................42
15.2 Distributions to Beneficiaries..............................42
15.3 Cash Outs and Participant Consent...........................43
15.4 Required Commencement of Distribution.......................43
15.5 Reemployment of a Participant...............................43
15.6 Restrictions on Alienation..................................44
15.7 Facility of Payment.........................................44
15.8 Inability to Locate Payee...................................44
ARTICLE XVI
FORM OF PAYMENT
16.1 Normal Form of Payment......................................45
16.2 Optional Form of Payment....................................45
16.3 Change of Option Election...................................45
16.4 Direct Rollover.............................................45
16.5 Notice Regarding Forms of Payment...........................46
16.6 Reemployment................................................46
ARTICLE XVII
BENEFICIARIES
17.1 Designation of Beneficiary..................................47
17.2 Spousal Consent Requirements................................47
ARTICLE XVIII
ADMINISTRATION
18.1 Authority of the Sponsor....................................48
18.2 Action of the Sponsor.......................................48
18.3 Claims Review Procedure.....................................49
18.4 Qualified Domestic Relations Orders.........................50
18.5 Indemnification.............................................50
18.6 Actions Binding.............................................50
(iv)
<PAGE> 6
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 Amendment...................................................51
19.2 Limitation on Amendment.....................................51
19.3 Termination.................................................51
19.4 Reorganization..............................................52
19.5 Withdrawal of an Employer...................................53
ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 Adoption by Related Companies...............................54
20.2 Effective Plan Provisions...................................54
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 No Commitment as to Employment..............................55
21.2 Benefits....................................................55
21.3 No Guarantees...............................................55
21.4 Expenses....................................................55
21.5 Precedent...................................................55
21.6 Duty to Furnish Information.................................55
21.7 Withholding.................................................56
21.8 Merger, Consolidation, or Transfer of Plan Assets...........56
21.9 Back Pay Awards.............................................56
21.10 Condition on Employer Contributions.........................57
21.11 Return of Contributions to an Employer......................57
21.12 Validity of Plan............................................57
21.13 Trust Agreement.............................................57
21.14 Parties Bound...............................................58
21.15 Application of Certain Plan Provisions......................58
21.16 Leased Employees............................................58
21.17 Transferred Funds...........................................59
ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 Definitions.................................................60
22.2 Applicability...............................................62
22.3 Minimum Employer Contribution...............................62
22.4 Adjustments to Section 415 Limitations......................63
22.5 Accelerated Vesting.........................................63
(v)
<PAGE> 7
ARTICLE XXIII
EFFECTIVE DATE
23.1 Effective Date of Amendment and Restatement.................64
(vi)
<PAGE> 8
PREAMBLE
The NS Group, Inc. Salaried Employees Retirement Savings Plan, originally
effective as of September 30, 1984, and heretofore known as the NS Group, Inc.
Salaried Employees Flexible Compensation Plan, is hereby amended and restated in
its entirety. Effective September 26, 1998, the Newport Steel Corporation
Salaried Employees Profit Sharing Plan and the Koppel Steel Corporation Salaried
Employees Profit Sharing Plan were merged into this Plan. The Plan, as amended
and restated hereby, is intended to qualify as a profit-sharing plan under
Section 401(a) of the Code, and includes a cash or deferred arrangement that is
intended to qualify under Section 401(k) of the Code. The Plan is maintained for
the exclusive benefit of eligible employees and their beneficiaries.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Separate Account under the Plan on and after the
effective date of this amendment and restatement shall be not less than his
vested interest in his account on the day immediately preceding the effective
date. In addition, notwithstanding any other provision of the Plan to the
contrary, the forms of payment and other Plan provisions that were available
under the Plan immediately prior to the later of the effective date of this
amendment and restatement or the date this amendment and restatement is adopted
and that may not be eliminated under Section 411(d)(6) of the Code shall
continue to be available to Participants who had an account under the Plan on
the day immediately preceding the later of the effective date or the date this
amendment and restatement is adopted.
<PAGE> 9
ARTICLE I
DEFINITIONS
1.1 PLAN DEFINITIONS
As used herein, the following words and phrases have the meanings hereinafter
set forth, unless a different meaning is plainly required by the context:
The "ADMINISTRATOR" means the Sponsor unless the Sponsor designates another
person or persons to act as such.
An "AFTER-TAX CONTRIBUTION" means any after-tax employee contribution made by a
Participant as may be permitted under Article V.
The "BENEFICIARY" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under the
Plan.
The "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "COMPENSATION" of a Participant for any period means the wages as defined in
Section 3401(a) of the Code, determined without regard to any rules that limit
compensation included in wages based on the nature or location of the employment
or services performed, and all other payments made to him for such period for
services as an Employee for which his Employer is required to furnish the
Participant a written statement under Sections 6041(d), 6051(a)(3), and 6052 of
the Code, and excluding reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, welfare benefits and
director's fees, but determined prior to any exclusions for amounts deferred
under Section 125, 402(e)(3), 402(h)(1)(B), 403(b), or 457(b) of the Code or for
certain contributions described in Section 414(h)(2) of the Code that are picked
up by the employing unit and treated as employer contributions.
In no event, however, shall the Compensation of a Participant taken into account
under the Plan for any Plan Year exceed (1) $200,000 for Plan Years beginning
prior to January 1, 1994, or (2) $150,000 for Plan Years beginning on or after
January 1, 1994 (subject to adjustment annually as provided in Section
401(a)(17)(B) and Section 415(d) of the Code; provided, however, that the dollar
increase in effect on January 1 of any calendar year, if any, is effective for
Plan Years beginning in such calendar year). If the Compensation of a
Participant is determined over a period of time that contains fewer than 12
calendar months, then the annual compensation limitation described above shall
be adjusted with respect to that Participant by multiplying the annual
compensation limitation in effect for the Plan Year by a fraction the numerator
of which is the number of full months in the period and the denominator of which
is
2
<PAGE> 10
12; provided, however, that no proration is required for a Participant who is
covered under the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12 months. In
determining the Compensation, for purposes of applying the annual compensation
limitation described above, of a Participant who is a five percent owner or
among the ten Highly Compensated Employees receiving the greatest Compensation
for the Plan Year, the Compensation of the Participant's spouse and of his
lineal descendants who have not attained age 19 as of the close of the Plan Year
shall be included as Compensation of the Participant for the Plan Year. If as a
result of applying the family aggregation rule described in the preceding
sentence the annual compensation limitation would be exceeded, the limitation
shall be prorated among the affected family members in proportion to each
member's Compensation as determined prior to application of the family
aggregation rules.
A "CONTRIBUTION PERIOD" means the period specified in Article VI for which
Employer Contributions shall be made.
An "ELIGIBLE EMPLOYEE" means any Employee who has met the eligibility
requirements of Article III to have Tax-Deferred Contributions made to the Plan
on his behalf.
The "ELIGIBILITY SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his eligibility to participate in the Plan as may be required under Article III
or Article VI.
An "EMPLOYEE" means any salaried or hourly employee of an Employer at a plant,
division, or other business operation to which coverage has been extended, other
than (i) an employee who is covered by a collective bargaining agreement that
does not specifically provide for coverage under the Plan or (ii) an employee
classified as a co-op, intern, temporary or contract employee.
An "EMPLOYER" means the Sponsor and any entity which has adopted the Plan as may
be provided under Article XX, including Newport Steel Corporation, Koppel Steel
Corporation, Imperial Adhesives, Inc. and Erlanger Tubular Corporation..
An "EMPLOYER CONTRIBUTION" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "ENROLLMENT DATE" means the first day of each calendar quarter; provided,
however, that for purposes of participation in the Profit-Sharing Contributions
portion of the Plan, the term "Enrollment Date" shall mean the first day of each
Plan Year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "GENERAL FUND" means a Trust Fund maintained by the Trustee as required to
hold and administer any assets of the Trust that are not allocated among any
separate Investment Funds as
3
<PAGE> 11
may be provided in the Plan or the Trust Agreement. No General Fund shall be
maintained if all assets of the Trust are allocated among separate Investment
Funds.
A "HIGHLY COMPENSATED EMPLOYEE" means an Employee or former Employee who is a
highly compensated active employee or highly compensated former employee as
defined hereunder.
A "highly compensated active employee" includes any Employee who performs
services for an Employer during the determination year and who (i) was a five
percent owner at any time during the determination year or the look back year,
(ii) received compensation from an Employer during the look back year in excess
of $75,000 (subject to adjustment annually at the same time and in the same
manner as under Section 415(d) of the Code), (iii) was in the top paid group of
employees for the look back year and received compensation from an Employer
during the look back year in excess of $50,000 (subject to adjustment annually
at the same time and in the same manner as under Section 415(d) of the Code),
(iv) was an officer of an Employer during the look back year and received
compensation during that year in excess of 50 percent of the dollar limitation
in effect for that year under Section 415(b)(1)(A) of the Code or, if no officer
received compensation in excess of that amount for the look back year or the
determination year, received the greatest compensation for the look back year of
any officer, or (v) was one of the 100 employees paid the greatest compensation
by an Employer for the determination year and would be described in (ii), (iii),
or (iv) above if the term "determination year" were substituted for "look back
year".
A "highly compensated former employee" includes any Employee who separated from
service from an Employer and all Related Companies (or is deemed to have
separated from service from an Employer and all Related Companies) prior to the
determination year, performed no services for an Employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the date the
Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top paid group,
the 100 employees receiving the greatest compensation from an Employer, the
number of employees treated as officers, and the compensation considered, shall
be made in accordance with the provisions of Section 414(q) of the Code and
regulations issued thereunder. For purposes of this definition, the following
terms have the following meanings:
(a) The "determination year" means the Plan Year or, if the Administrator
makes the election provided in paragraph (b) below, the period of time,
if any, which extends beyond the look back year and ends on the last
day of the Plan Year for which testing is being performed (the "lag
period"). If the lag period is less than 12 months long, the dollar
amounts specified in (ii), (iii), and (iv) above shall be prorated
based upon the number of months in the lag period.
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<PAGE> 12
(b) The "look back year" means the 12-month period immediately preceding
the determination year; provided, however, that the Administrator may
elect instead to treat the calendar year ending with or within the
determination year as the "look back year".
An "HOUR OF SERVICE" with respect to a person means each hour, if any, that may
be credited to him in accordance with the provisions of Article II.
An "INVESTMENT FUND" means any separate investment Trust Fund maintained by the
Trustee as may be provided in the Plan or the Trust Agreement or any separate
investment fund maintained by the Trustee, to the extent that there are
Participant Sub-Accounts under such funds, to which assets of the Trust may be
allocated and separately invested.
A "MATCHING CONTRIBUTION" means any Employer Contribution made to the Plan on
account of a Participant's Tax-Deferred Contributions as provided in Article VI.
The "NORMAL RETIREMENT DATE" of an employee means the date he attains age 62.
A "PARTICIPANT" means any person who has a Separate Account in the Trust.
The "PLAN" means NS Group, Inc. Salaried Employees Retirement Savings Plan, as
from time to time in effect.
A "PLAN YEAR" means each 52 or 53 consecutive week period ending on the last
Saturday in September.
A "PROFIT-SHARING CONTRIBUTION" means any Employer Contribution made to the Plan
as provided in Article VI, other than Matching Contributions.
A "RELATED COMPANY" means any corporation or business, other than an Employer,
which would be aggregated with an Employer for a relevant purpose under Section
414 of the Code.
A "ROLLOVER CONTRIBUTION" means any rollover contribution to the Plan made by a
Participant as may be permitted under Article V.
A "SEPARATE ACCOUNT" means the account maintained by the Trustee in the name of
a Participant that reflects his interest in the Trust and any Sub-Accounts
maintained thereunder, as provided in Article VIII.
The "SETTLEMENT DATE" of a Participant means the date on which a Participant's
interest under the Plan becomes distributable in accordance with Article XV.
The "SPONSOR" means NS Group, Inc., and any successor thereto.
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A "SUB-ACCOUNT" means any of the individual sub-accounts of a Participant's
Separate Account that is maintained as provided in Article VIII.
A "TAX-DEFERRED CONTRIBUTION" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with his reduction
authorization executed pursuant to Article IV.
The "TRUST" means the trust, custodial accounts, annuity contracts, or insurance
contracts maintained by the Trustee under the Trust Agreement.
The "TRUST AGREEMENT" means the agreement entered into between the Sponsor and
the Trustee relating to the holding, investment, and reinvestment of the assets
of the Plan, together with all amendments thereto and shall include any
agreement establishing a custodial account, an annuity contract, or an insurance
contract (other than a life, health or accident, property, casualty, or
liability insurance contract) for the investment of assets if the custodial
account or contract would, except for the fact that it is not a trust,
constitute a qualified trust under Section 401 of the Code.
The "TRUSTEE" means the trustee or any successor trustee which at the time shall
be designated, qualified, and acting under the Trust Agreement and shall include
any insurance company that issues an annuity or insurance contract pursuant to
the Trust Agreement or any person holding assets in a custodial account pursuant
to the Trust Agreement. The Sponsor may designate a person or persons other than
the Trustee to perform any responsibility of the Trustee under the Plan, other
than trustee responsibilities as defined in Section 405(c)(3) of ERISA, and the
Trustee shall not be liable for the performance of such person in carrying out
such responsibility except as otherwise provided by ERISA. The term Trustee
shall include any delegate of the Trustee as may be provided in the Trust
Agreement.
A "TRUST FUND" means any fund maintained under the Trust by the Trustee.
A "VALUATION DATE" means the date or dates designated by the Sponsor and
communicated in writing to the Trustee for the purpose of valuing the General
Fund and each Investment Fund and adjusting Separate Accounts and Sub-Accounts
hereunder, which dates need not be uniform with respect to the General Fund,
each Investment Fund, Separate Account, or Sub-Account; provided, however, that
the General Fund and each Investment Fund shall be valued and each Separate
Account and Sub-Account shall be adjusted no less often than once annually.
The "VESTING SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
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1.2 INTERPRETATION
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
ARTICLE II
SERVICE
2.1 DEFINITIONS
For purposes of this Article, the following terms have the following meanings.
(a) A "break in service" means any computation period during which a person
completes less than 501 Hours of Service except that no person shall
incur a break in service solely by reason of temporary absence from
work not exceeding 12 months resulting from illness, layoff, or other
cause if authorized in advance by an Employer or a Related Company
pursuant to its uniform leave policy, if his employment shall not
otherwise be terminated during the period of such absence.
(b) A "maternity/paternity absence" means a person's absence from
employment with an Employer or a Related Company because of the
person's pregnancy, the birth of the person's child, the placement of a
child with the person in connection with the person's adoption of the
child, or the caring for the person's child immediately following the
child's birth or adoption. A person's absence from employment will not
be considered a maternity/paternity absence unless the person furnishes
the Administrator such timely information as may reasonably be required
to establish that the absence was for one of the purposes enumerated in
this paragraph and to establish the number of days of absence
attributable to such purpose.
2.2 CREDITING OF HOURS OF SERVICE
A person shall be credited with an Hour of Service for:
(a) each hour for which he is paid, or entitled to payment, for the
performance of duties for an Employer or a Related Company during the
applicable computation period; provided, however, that hours
compensated at a premium rate shall be treated as straight-time hours;
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<PAGE> 15
(b) subject to the provisions of Section 2.4, each hour for which he is
paid, or entitled to payment, by an Employer or a Related Company on
account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
lay-off, jury duty, military duty, or leave of absence;
(c) each hour for which he would have been scheduled to work for an
Employer or a Related Company during the period that he is absent from
work because of service with the armed forces of the United States
provided he is eligible for reemployment rights under the Uniformed
Services Employment and Reemployment Rights Act of 1994 and returns to
work with an Employer or a Related Company within the period during
which he retains such reemployment rights; and
(d) each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by an Employer or a Related Company;
provided, however, that the same Hour of Service shall not be credited
both under paragraph (a) or (b) or (c) of this Section, as the case may
be, and under this paragraph (d); and provided, further, that the
crediting of Hours of Service for back pay awarded or agreed to with
respect to periods described in such paragraph (b) shall be subject to
the limitations set forth therein and in Section 2.4.
Notwithstanding the foregoing and solely for purposes of determining whether a
person who is on a maternity/paternity absence beginning on or after the first
day of the first Plan Year that commences on or after January 1, 1985, has
incurred a break in service, Hours of Service shall include those hours with
which such person would otherwise have been credited but for such
maternity/paternity absence, or shall include eight Hours of Service for each
day of maternity/paternity absence if the actual hours to be credited cannot be
determined; except that not more than 501 hours are to be credited by reason of
any maternity/paternity absence. Any hours included as Hours of Service pursuant
to the immediately preceding sentence shall be credited to the computation
period in which the absence from employment begins, if such person otherwise
would incur a break in service in such computation period, or, in any other
case, to the immediately following computation period.
2.3 Hours of Service Equivalencies
Notwithstanding any other provision of the Plan to the contrary, an Employer may
elect to credit Hours of Service to its employees in accordance with one of the
following equivalencies, and if an Employer does not maintain records that
accurately reflect actual hours of service such Employer shall credit Hours of
Service to its employees in accordance with one of the following equivalencies:
(a) If the Employer maintains its records on the basis of days worked, an
employee shall be credited with 10 Hours of Service for each day on
which he performs an Hour of Service.
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<PAGE> 16
(b) If the Employer maintains its records on the basis of weeks worked, an
employee shall be credited with 45 Hours of Service for each week in
which he performs an Hour of Service.
(c) If the Employer maintains its records on the basis of semi-monthly
payroll periods, an employee shall be credited with 95 Hours of Service
for each semi-monthly payroll period in which he performs an Hour of
Service.
(d) If the Employer maintains its records on the basis of months worked, an
employee shall be credited with 190 Hours of Service for each month in
which he performs an Hour of Service.
2.4 LIMITATIONS ON CREDITING OF HOURS OF SERVICE
In the application of the provisions of paragraph (b) of Section 2.2, the
following shall apply:
(a) An hour for which a person is directly or indirectly paid, or entitled
to payment, on account of a period during which no duties are performed
shall not be credited to him if such payment is made or due under a
plan maintained solely for the purpose of complying with applicable
workers' compensation, unemployment compensation, or disability
insurance laws.
(b) Hours of Service shall not be credited with respect to a payment which
solely reimburses a person for medical or medically-related expenses
incurred by him.
(c) A payment shall be deemed to be made by or due from an Employer or a
Related Company (i) regardless of whether such payment is made by or
due from such employer directly or indirectly, through (among others) a
trust fund or insurer to which any such employer contributes or pays
premiums, and (ii) regardless of whether contributions made or due to
such trust fund, insurer, or other entity are for the benefit of
particular persons or are on behalf of a group of persons in the
aggregate.
(d) No more than 501 Hours of Service shall be credited to a person on
account of any single continuous period during which he performs no
duties (whether or not such period occurs in a single computation
period), unless no duties are performed due to service with the armed
forces of the United States for which the person retains reemployment
rights as provided in paragraph (c) of Section 2.2.
2.5 DEPARTMENT OF LABOR RULES
The rules set forth in paragraphs (b) and (c) of Department of Labor Regulations
ss.2530.200b-2, which relate to determining Hours of Service attributable to
reasons other than the performance of duties and crediting Hours of Service to
computation periods, are hereby incorporated into the Plan by reference.
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<PAGE> 17
2.6 YEARS OF ELIGIBILITY SERVICE
There shall be no years of Eligibility Service credited under the Plan.
2.7 YEARS OF VESTING SERVICE
There shall be no years of Vesting Service credited under the Plan.
ARTICLE III
ELIGIBILITY
3.1 ELIGIBILITY
Each Employee who was an Eligible Employee immediately prior to the effective
date of this amendment and restatement shall continue to be an Eligible
Employee. Each other Employee shall become an Eligible Employee with respect to
certain portions of the Plan as of the applicable Enrollment Date coinciding
with or next following the date on which he has attained age 20 1/2.
3.2 TRANSFERS OF EMPLOYMENT
If a person is transferred directly from employment with an Employer or with a
Related Company in a capacity other than as an Employee to employment as an
Employee, he shall become an Eligible Employee as of the date he is so
transferred if prior to an Enrollment Date coinciding with or preceding such
transfer date he has met the eligibility requirements of Section 3.1. Otherwise,
the eligibility of a person who is so transferred to elect to have Tax-Deferred
Contributions made to the Plan on his behalf shall be determined in accordance
with Section 3.1.
3.3 REEMPLOYMENT
If a person who terminated employment with an Employer and all Related Companies
is reemployed as an Employee and if he had been an Eligible Employee prior to
his termination of employment, he shall again become an Eligible Employee on the
date he is reemployed. Otherwise, the eligibility of a person who terminated
employment with an Employer and all Related Companies and who is reemployed by
an Employer or a Related Company to elect to have Tax-Deferred Contributions
made to the Plan on his behalf shall be determined in accordance with Section
3.1 or 3.2.
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3.4 NOTIFICATION CONCERNING NEW ELIGIBLE EMPLOYEES
Each Employer shall notify the Administrator as soon as practicable of Employees
becoming Eligible Employees as of any date.
3.5 EFFECT AND DURATION
Upon becoming an Eligible Employee, an Employee shall be entitled to elect to
have Tax-Deferred Contributions made to the Plan on his behalf and shall be
bound by all the terms and conditions of the Plan and the Trust Agreement. A
person shall continue as an Eligible Employee eligible to have Tax-Deferred
Contributions made to the Plan on his behalf only so long as he continues
employment as an Employee.
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 TAX-DEFERRED CONTRIBUTIONS
Effective as of the date he becomes an Eligible Employee, each Eligible Employee
may elect in writing in accordance with rules prescribed by the Administrator to
have Tax-Deferred Contributions made to the Plan on his behalf by his Employer
as hereinafter provided. An Eligible Employee's written election shall include
his authorization for his Employer to reduce his Compensation and to make
Tax-Deferred Contributions on his behalf and his election as to the investment
of his contributions in accordance with Article X. Tax-Deferred Contributions on
behalf of an Eligible Employee shall commence with the first payroll period
beginning on or after the date on which his election is effective.
4.2 AMOUNT OF TAX-DEFERRED CONTRIBUTIONS
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of an
Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than one percent nor more than 15 percent. In the event
an Eligible Employee elects to have his Employer make Tax-Deferred Contributions
on his behalf, his Compensation shall be reduced for each payroll period by the
percentage he elects to have contributed on his behalf to the Plan in accordance
with the terms of his currently effective reduction authorization.
4.3 CHANGES IN REDUCTION AUTHORIZATION
An Eligible Employee may change the percentage of his future Compensation that
his Employer contributes on his behalf as Tax-Deferred Contributions at such
time or times during the Plan Year as the Administrator may prescribe by filing
an amended reduction authorization with his Employer such number of days prior
to the date such change is to become effective as the Administrator shall
prescribe. An Eligible Employee who changes his reduction authorization
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<PAGE> 19
shall be limited to selecting a percentage of his Compensation that is otherwise
permitted hereunder. Tax-Deferred Contributions shall be made on behalf of such
Eligible Employee by his Employer pursuant to his amended reduction
authorization filed in accordance with this Section commencing with Compensation
paid to the Eligible Employee on or after the date such filing is effective,
until otherwise altered or terminated in accordance with the Plan.
4.4 SUSPENSION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may have such contributions suspended at any time by giving such number of days
advance written notice to his Employer as the Administrator shall prescribe. Any
such voluntary suspension shall take effect commencing with Compensation paid to
such Eligible Employee on or after the expiration of the required notice period
and shall remain in effect until Tax-Deferred Contributions are resumed as
hereinafter set forth.
4.5 RESUMPTION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions may have such contributions resumed at such time or times during
the Plan Year as the Administrator may prescribe, by filing a new reduction
authorization with his Employer such number of days prior to the date as of
which such contributions are to be resumed as the Administrator shall prescribe.
4.6 DELIVERY OF TAX-DEFERRED CONTRIBUTIONS
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets, each Employer shall cause to
be delivered to the Trustee in cash all Tax-Deferred Contributions attributable
to such amounts.
4.7 VESTING OF TAX-DEFERRED CONTRIBUTIONS
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 NO AFTER-TAX CONTRIBUTIONS
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<PAGE> 20
There shall be no After-Tax Contributions made to the Plan.
5.2 ROLLOVER CONTRIBUTIONS
An Employee who was a participant in a plan qualified under Section 401 or 403
of the Code and who receives a cash distribution from such plan that he elects
either (i) to roll over immediately to a qualified retirement plan or (ii) to
roll over into a conduit IRA from which he receives a later cash distribution,
may elect to make a Rollover Contribution to the Plan if he is entitled under
Section 402(c), Section 403(a)(4), or Section 408(d)(3)(A) of the Code to roll
over such distribution to another qualified retirement plan. The Administrator
may require an Employee to provide it with such information as it deems
necessary or desirable to show that he is entitled to roll over such
distribution to another qualified retirement plan. An Employee shall make a
Rollover Contribution to the Plan by delivering, or causing to be delivered, to
the Trustee the cash that constitutes the Rollover Contribution amount within 60
days of receipt of the distribution from the plan or from the conduit IRA in the
manner prescribed by the Administrator. If the Employee does not already have an
investment election on file with the Administrator, the Employee shall also
deliver to the Administrator his election as to the investment of his
contributions in accordance with Article X.
5.3 VESTING OF ROLLOVER CONTRIBUTIONS
A Participant's vested interest in his Rollover Contributions Sub-Account shall
be at all times 100 percent.
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 CONTRIBUTION PERIOD
The Contribution Period for Matching Contributions under the Plan shall be each
payroll period. The Contribution Period for Profit-Sharing Contributions under
the Plan shall be each Plan Year.
6.2 PROFIT-SHARING CONTRIBUTIONS
Each Employer may, in its discretion, make a Profit-Sharing Contribution to the
Plan for the Contribution Period in an amount determined by the Employer.
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6.3 ALLOCATION OF PROFIT-SHARING CONTRIBUTIONS
Any Profit-Sharing Contribution made by an Employer for a Contribution Period
shall be allocated among its Employees during the Contribution Period who are
eligible to participate in the allocation of Profit-Sharing Contributions for
the Contribution Period, as determined under this Article. The allocable share
of each such Employee shall be in the ratio which his Compensation from the
Employer for the Contribution Period bears to the aggregate of such Compensation
for all such Employees.
6.4 MATCHING CONTRIBUTIONS
Each Employer may, in its discretion, make a Matching Contribution to the Plan
for each Contribution Period in an amount equal to 50 percent of the aggregate
"eligible Tax-Deferred Contributions" for the Contribution Period made on behalf
of its Employees during the Contribution Period who are eligible to participate
in the allocation of Matching Contributions for the Contribution Period, as
determined under this Article. For purposes of this Article, "eligible
Tax-Deferred Contributions" with respect to an Employee mean the Tax-Deferred
Contributions made on his behalf for the Contribution Period in an amount up to,
but not exceeding, the "match level". For purposes of this Article, the "match
level" means 4 percent of an Employee's Compensation for the Contribution
Period.
6.5 ALLOCATION OF MATCHING CONTRIBUTIONS
Any Matching Contribution made by an Employer for the Contribution Period shall
be allocated among its Employees during the Contribution Period who are eligible
to participate in the allocation of Matching Contributions for the Contribution
Period, as determined under this Article. The allocable share of each such
Employee shall be an amount equal to 50 percent of the "eligible Tax-Deferred
Contributions" made on his behalf for the Contribution Period.
6.6 VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE SPONSOR
The Sponsor shall verify the amount of Employer Contributions to be made by each
Employer in accordance with the provisions of the Plan. Notwithstanding any
other provision of the Plan to the contrary, the Sponsor shall determine the
portion of the Employer Contribution to be made by each Employer with respect to
an Employee who transfers from employment with one Employer as an Employee to
employment with another Employer as an Employee.
6.7 PAYMENT OF EMPLOYER CONTRIBUTIONS
Employer Contributions made for a Contribution Period shall be paid in cash or
in qualifying employer securities, as defined in Section 407(d)(5) of ERISA, to
the Trustee within the period of time required under the Code in order for the
contribution to be deductible by the Employer in determining its Federal income
taxes for the Plan Year.
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6.8 ELIGIBILITY
Each Employee shall be eligible to participate in the allocation of Employer
Contributions beginning on the date he becomes, or again becomes, an Eligible
Employee in accordance with the provisions of Article III. Notwithstanding the
foregoing, no person shall be eligible to participate in the allocation of
Profit-Sharing Contributions for a Contribution Period unless (i) he is employed
by an Employer or a Related Company on the last day of the Contribution Period,
(ii) he has completed at least 500 Hours of Service during the Plan Year, and
(iii) he is not classified as a president or vice-president of an Employer;
provided, however, that if the Plan would not otherwise meet the minimum
coverage requirements of Section 410(b) of the Code in any Plan Year, the group
of Employees eligible to participate in the allocation of Profit-Sharing
Contributions, shall be expanded to include the minimum number of Employees who
would be eligible to participate except for their failure to complete the
required number of Hours of Service during the Plan Year that is necessary to
meet the minimum coverage requirements. The Employees who become eligible to
participate under the provisions of the immediately preceding clause shall be
those Employees who have completed the greatest number of Hours of Service
during the Plan Year. If the Plan still would not meet the minimum coverage
requirements of Section 410(b) of the Code, the group of Employees shall be
expanded further to include the minimum number of Employees who are not employed
by an Employer or a Related Company on the last day of the Contribution Period
that is necessary to meet the minimum coverage requirements. The Employees who
become eligible to participate under the provisions of the immediately preceding
sentence shall be those Employees who have completed the greatest number of
Hours of Service during the Contribution Period.
6.9 VESTING OF EMPLOYER CONTRIBUTIONS
A Participant's vested interest in his Employer Contributions Sub-Account shall
be at all times 100 percent.
6.10 ELECTION OF FORMER VESTING SCHEDULE
If the Sponsor adopts an amendment to the Plan that directly or indirectly
affects the computation of a Participant's vested interest in his Employer
Contributions Sub-Account, any Participant with three or more years of Vesting
Service shall have a right to have his vested interest in his Employer
Contributions Sub-Account continue to be determined under the vesting provisions
in effect prior to the amendment rather than under the new vesting provisions,
unless the vested interest of the Participant in his Employer Contributions
Sub-Account under the Plan as amended is not at any time less than such vested
interest determined without regard to the amendment. A Participant shall
exercise his right under this Section by giving written notice of his exercise
thereof to the Administrator within 60 days after the latest of (i) the date he
receives notice of the amendment from the Administrator, (ii) the effective date
of the amendment, or (iii) the date the amendment is adopted. Notwithstanding
the foregoing, a Participant's vested interest in his Employer Contributions
Sub-Account on the effective date of such an amendment shall not be
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<PAGE> 23
less than his vested interest in his Employer Contributions Sub-Account
immediately prior to the effective date of the amendment.
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "actual deferral percentage" with respect to an Eligible Employee
for a particular Plan Year means the ratio of the Tax-Deferred
Contributions made on his behalf for the Plan Year to his test
compensation for the Plan Year; provided, however, that contributions
made on a Participant's behalf for a Plan Year shall be included in
determining his actual deferral percentage for such Plan Year only if
the contributions are made to the Plan prior to the end of the
12-month period immediately following the Plan Year to which the
contributions relate. The determination and treatment of the actual
deferral percentage amounts for any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of the greater
of the average contribution percentage for eligible participants other
than Highly Compensated Employees or the average actual deferral
percentage for Eligible Employees other than Highly Compensated
Employees and (ii) the lesser of 200 percent or two plus the lesser of
such average contribution percentage or average actual deferral
percentage, or, if it would result in a larger aggregate limit, the
sum of (iii) 125 percent of the lesser of the average contribution
percentage for eligible participants other than Highly Compensated
Employees or the average actual deferral percentage for Eligible
Employees other than Highly Compensated Employees and (iv) the lesser
of 200 percent or two plus the greater of such average contribution
percentage or average actual deferral percentage.
(c) The "annual addition" with respect to a Participant for a limitation
year means the sum of the Tax-Deferred Contributions and Employer
Contributions allocated to his Separate Account for the limitation
year (including any excess contributions that are distributed pursuant
to this Article), the employer contributions, employee contributions,
and forfeitures allocated to his accounts for the limitation year
under any other qualified defined contribution plan (whether or not
terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and amounts described in Sections
415(l)(2) and 419A(d)(2) of the Code allocated to his account for the
limitation year; provided, however, that the annual addition for
limitation years beginning prior to January 1, 1987 shall not be
recalculated to treat all employee contributions as annual additions.
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(d) The "Code Section 402(g) limit" means the dollar limit imposed by
Section 402(g)(1) of the Code or established by the Secretary of the
Treasury pursuant to Section 402(g)(5) of the Code in effect on
January 1 of the calendar year in which an Eligible Employee's taxable
year begins.
(e) The "contribution percentage" with respect to an eligible participant
for a particular Plan Year means the ratio of the matching
contributions made to the Plan on his behalf for the Plan Year to his
test compensation for such Plan Year, except that, to the extent
permitted by regulations issued under Section 401(m) of the Code, the
Sponsor may elect to take into account in computing the numerator of
each eligible participant's contribution percentage the Tax-Deferred
Contributions made to the Plan on his behalf for the Plan Year;
provided, however, that any Tax-Deferred Contributions that were taken
into account in computing the numerator of an eligible participant's
actual deferral percentage may not be taken into account in computing
the numerator of his contribution percentage; and provided, further,
that contributions made by or on a Participant's behalf for a Plan
Year shall be included in determining his contribution percentage for
such Plan Year only if the contributions are made to the Plan prior to
the end of the 12-month period immediately following the Plan Year to
which the contributions relate. The determination and treatment of the
contribution percentage amounts for any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.
(f) An "elective contribution" means any employer contribution made to a
plan maintained by an Employer or any Related Company on behalf of a
Participant in lieu of cash compensation pursuant to his written
election to defer under any qualified CODA as described in Section
401(k) of the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under Section 457 of the Code, or
any plan as described in Section 501(c)(18) of the Code, and any
contribution made on behalf of the Participant by an Employer or a
Related Company for the purchase of an annuity contract under Section
403(b) of the Code pursuant to a salary reduction agreement.
(g) An "eligible participant" means any Employee who is eligible to have
Tax-Deferred Contributions made on his behalf (if Tax-Deferred
Contributions are taken into account in computing contribution
percentages) or to participate in the allocation of matching
contributions.
(h) An "excess deferral" with respect to a Participant means that portion
of a Participant's Tax-Deferred Contributions that when added to
amounts deferred under other plans or arrangements described in
Sections 401(k), 408(k), or 403(b) of the Code, would exceed the Code
Section 402(g) limit and is includable in the Participant's gross
income under Section 402(g) of the Code.
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(i) A "family member" of an Employee means the Employee's spouse, his
lineal ascendants, his lineal descendants, and the spouses of such
lineal ascendants and descendants.
(j) A "limitation year" means the 12-month period designated as such by
the Sponsor.
(k) A "matching contribution" means any employer contribution allocated to
an Eligible Employee's account under the Plan or any other plan of an
Employer or a Related Company solely on account of elective
contributions made on his behalf or employee contributions made by
him.
(l) The "test compensation" of an Eligible Employee for a Plan Year means
compensation as defined in Section 414(s) of the Code and regulations
issued thereunder, limited, however, to (1) $200,000 for Plan Years
beginning prior to January 1, 1994, or (2) $150,000 for Plan Years
beginning on or after January 1, 1994 (subject to adjustment annually
as provided in Section 401(a)(17)(B) and Section 415(d) of the Code;
provided, however, that the dollar increase in effect on January 1 of
any calendar year, if any, is effective for Plan Years beginning in
such calendar year). If the test compensation of a Participant is
determined over a period of time that contains fewer than 12 calendar
months, then the annual compensation limitation described above shall
be adjusted with respect to that Participant by multiplying the annual
compensation limitation in effect for the Plan Year by a fraction the
numerator of which is the number of full months in the period and the
denominator of which is 12; provided, however, that no proration is
required for a Participant who is covered under the Plan for less than
one full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months. In determining the
test compensation, for purposes of applying the annual compensation
limitation described above, of a Participant who is a five-percent
owner or among the ten Highly Compensated Employees receiving the
greatest test compensation for the limitation year, the test
compensation of the Participant's spouse and of his lineal descendants
who have not attained age 19 as of the close of the limitation year
shall be included as test compensation of the Participant for the
limitation year. If as a result of applying the family aggregation
rule described in the preceding sentence the annual compensation
limitation would be exceeded, the limitation shall be prorated among
the affected family members in proportion to each member's test
compensation as determined prior to application of the family
aggregation rules.
7.2 CODE SECTION 402(g) LIMIT
In no event shall the amount of the Tax-Deferred Contributions made on behalf of
an Eligible Employee for his taxable year, when aggregated with any elective
contributions made on behalf of the Eligible Employee under any other plan of an
Employer or a Related Company for his taxable year, exceed the Code Section
402(g) limit. In the event that the Administrator determines that the reduction
percentage elected by an Eligible Employee will result in his exceeding the Code
Section 402(g) limit, the Administrator may adjust the reduction authorization
of such Eligible Employee by reducing the percentage of his Tax-Deferred
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Contributions to such smaller percentage that will result in the Code Section
402(g) limit not being exceeded. If the Administrator determines that the
Tax-Deferred Contributions made on behalf of an Eligible Employee would exceed
the Code Section 402(g) limit for his taxable year, the Tax-Deferred
Contributions for such Participant shall be automatically suspended for the
remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit has
nevertheless been exceeded by an Eligible Employee for his taxable year, the
Tax-Deferred Contributions that, when aggregated with elective contributions
made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company, would exceed the Code Section 402(g) limit, plus any income and
minus any losses attributable thereto, shall be distributed to the Eligible
Employee no later than the April 15 immediately following such taxable year. Any
Tax-Deferred Contributions that are distributed to an Eligible Employee in
accordance with this Section shall not be taken into account in computing the
Eligible Employee's actual deferral percentage for the Plan Year in which the
Tax-Deferred Contributions were made, unless the Eligible Employee is a Highly
Compensated Employee. If an amount of Tax-Deferred Contributions is distributed
to a Participant in accordance with this Section, matching contributions that
are attributable solely to the distributed Tax-Deferred Contributions, plus any
income and minus any losses attributable thereto, shall be forfeited by the
Participant. Any such forfeited amounts shall be applied against the Employer
Contribution obligations for the Plan Year of the Employer for which the
Participant last performed services as an Employee. Notwithstanding the
foregoing, however, should the amount of all such forfeitures for any Plan Year
with respect to any Employer exceed the amount of such Employer's Employer
Contribution obligation for the Plan Year, the excess amount of such forfeitures
shall be held unallocated in a suspense account established with respect to the
Employer and shall for all Plan purposes be applied against the Employer's
Employer Contribution obligations for the following Plan Year.
7.3 DISTRIBUTION OF EXCESS DEFERRALS
Notwithstanding any other provision of the Plan to the contrary, if a
Participant notifies the Administrator in writing no later than the March 1
following the close of the Participant's taxable year that excess deferrals have
been made on his behalf under the Plan for such taxable year, the excess
deferrals, plus any income and minus any losses attributable thereto, shall be
distributed to the Participant no later than the April 15 immediately following
such taxable year. Any Tax-Deferred Contributions that are distributed to a
Participant in accordance with this Section shall nevertheless be taken into
account in computing the Participant's actual deferral percentage for the Plan
Year in which the Tax-Deferred Contributions were made. If an amount of
Tax-Deferred Contributions is distributed to a Participant in accordance with
this Section, matching contributions that are attributable solely to the
distributed Tax-Deferred Contributions, plus any income and minus any losses
attributable thereto, shall be forfeited by the Participant. Any such forfeited
amounts shall be applied against the Employer Contribution obligations for the
Plan Year of the Employer for which the Participant last performed services as
an Employee.
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Notwithstanding the foregoing, however, should the amount of all such
forfeitures for any Plan Year with respect to any Employer exceed the amount of
such Employer's Employer Contribution obligation for the Plan Year, the excess
amount of such forfeitures shall be held unallocated in a suspense account
established with respect to the Employer and shall for all Plan purposes be
applied against the Employer's Employer Contribution obligations for the
following Plan Year.
7.4 LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY COMPENSATED
EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average actual deferral percentage for such Eligible Employees that exceeds the
greater of:
(a) a percentage that is equal to 125 percent of the average actual
deferral percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent of the average actual
deferral percentage for all other Eligible Employees and that is not
more than two percentage points higher than the average actual
deferral percentage for all other Eligible Employees.
In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year or to adjust the projected actual deferral
percentages of Highly Compensated Employees by reducing their percentage
elections with respect to Tax-Deferred Contributions for any remaining portion
of a Plan Year to such smaller percentages that will result in the limitation
set forth above not being exceeded. In the event of any such suspension or
reduction, Highly Compensated Employees affected thereby shall be notified of
the reduction or suspension as soon as possible and shall be given an
opportunity to make a new Tax-Deferred Contribution election to be effective the
first day of the next following Plan Year. In the absence of such an election,
the election in effect immediately prior to the suspension or adjustment
described above shall be reinstated as of the first day of the next following
Plan Year.
For purposes of applying the limitation contained in this Section, the
Tax-Deferred Contributions and test compensation of any Eligible Employee who is
a family member of another Eligible Employee who is a five percent owner or
among the ten Highly Compensated Employees receiving the greatest test
compensation for the Plan Year shall be aggregated with the Tax-Deferred
Contributions and test compensation of such other Eligible Employee, and such
family member shall not be considered an Eligible Employee for purposes of
determining the average actual deferral percentage for all other Eligible
Employees.
In determining the actual deferral percentage for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year, elective contributions made to
his accounts under any
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other plan of an Employer or a Related Company shall be treated as if all such
contributions were made to the Plan; provided, however, that if such a plan has
a plan year different from the Plan Year, any such contributions made to the
Highly Compensated Employee's accounts under the plan for the plan year ending
with or within the same calendar year as the Plan Year shall be treated as if
such contributions were made to the Plan. Notwithstanding the foregoing, such
contributions shall not be treated as if they were made to the Plan if
regulations issued under Section 401(k) of the Code do not permit such plan to
be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, then actual deferral percentages under the Plan shall be calculated
as if the Plan and such one or more other plans were a single plan. For Plan
Years beginning after December 31, 1991, plans may be aggregated to satisfy
Section 401(k) of the Code only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year.
7.5 DISTRIBUTION OF EXCESS TAX-DEFERRED CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.4 is exceeded in any Plan Year, the
Tax-Deferred Contributions made with respect to a Highly Compensated Employee
that exceed the maximum amount permitted to be contributed to the Plan on his
behalf under Section 7.4, plus any income and minus any losses attributable
thereto, shall be distributed to the Highly Compensated Employee prior to the
end of the next succeeding Plan Year. If excess amounts are attributable to
Participants aggregated under the family aggregation rules described in Section
7.4, the excess shall be allocated among family members in proportion to the
Tax-Deferred Contributions made with respect to each family member. If such
excess amounts are distributed more than 2 1/2 months after the last day of the
Plan Year for which the excess occurred, an excise tax may be imposed under
Section 4979 of the Code on the Employer maintaining the Plan with respect to
such amounts.
The maximum amount permitted to be contributed to the Plan on a Highly
Compensated Employee's behalf under Section 7.4 shall be determined by reducing
Tax-Deferred Contributions made on behalf of Highly Compensated Employees in
order of their actual deferral percentages beginning with the highest of such
percentages. The determination of the amount of excess Tax-Deferred
Contributions shall be made after application of Section 7.3, if applicable.
If an amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and minus
any losses attributable thereto, shall be forfeited by the Participant. Any such
forfeited amounts shall be applied against the Employer Contribution obligations
for the Plan Year of the Employer for which the Participant last performed
services as an Employee. Notwithstanding the foregoing, however, should the
amount of all such forfeitures for any Plan Year with respect to any Employer
exceed the amount of such
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Employer's Employer Contribution obligation for the Plan Year, the excess amount
of such forfeitures shall be held unallocated in a suspense account established
with respect to the Employer and shall for all Plan purposes be applied against
the Employer's Employer Contribution obligations for the following Plan Year.
7.6 LIMITATION ON MATCHING CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the matching
contributions made with respect to a Plan Year on behalf of eligible
participants who are Highly Compensated Employees may not result in an average
contribution percentage for such eligible participants that exceeds the greater
of:
(a) a percentage that is equal to 125 percent of the average contribution
percentage for all other eligible participants; or
(b) a percentage that is not more than 200 percent of the average
contribution percentage for all other eligible participants and that
is not more than two percentage points higher than the average
contribution percentage for all other eligible participants.
For purposes of applying the limitation contained in this Section, the matching
contributions, Tax-Deferred Contributions (to the extent that such Tax-Deferred
Contributions are taken into account in computing contribution percentages), and
test compensation of any eligible participant who is a family member of another
eligible participant who is a five percent owner or among the ten Highly
Compensated Employees receiving the greatest test compensation for the Plan Year
shall be aggregated with the matching contributions, Tax-Deferred Contributions,
and test compensation of such other eligible participant, and such family member
shall not be considered an eligible participant for purposes of determining the
average contribution percentage for all other eligible participants.
In determining the contribution percentage for any eligible participant who is a
Highly Compensated Employee for the Plan Year, matching contributions, employee
contributions, and elective contributions (to the extent that elective
contributions are taken into account in computing contribution percentages) made
to his accounts under any other plan of an Employer or a Related Company shall
be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under the
plan for the plan year ending with or within the same calendar year as the Plan
Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(m) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or a Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, the contribution percentages under the Plan shall be calculated as
if the Plan and such one or more
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other plans were a single plan. For Plan Years beginning after December 31,
1989, plans may be aggregated to satisfy Section 401(m) of the Code only if they
have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the elective contributions taken into account in computing
contribution percentages for any Plan Year.
7.7 DISTRIBUTION OF EXCESS CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.6 is exceeded in any Plan Year, the
matching contributions made on behalf of a Highly Compensated Employee that
exceed the maximum amount permitted to be contributed to the Plan on behalf of
such Highly Compensated Employee under Section 7.6, plus any income and minus
any losses attributable thereto, shall be distributed to the Participant prior
to the end of the next succeeding Plan Year. If excess amounts are attributable
to Participants aggregated under the family aggregation rules described in
Section 7.5, the excess shall be allocated among family members in proportion to
the matching contributions made with respect to each family member. If such
excess amounts are distributed more than 2 1/2 months after the last day of the
Plan Year for which the excess occurred, an excise tax may be imposed under
Section 4979 of the Code on the Employer maintaining the Plan with respect to
such amounts.
The maximum amount permitted to be contributed to the Plan on behalf of a Highly
Compensated Employee under Section 7.6 shall be determined by reducing matching
contributions made on behalf of Highly Compensated Employees in order of their
contribution percentages beginning with the highest of such percentages.
The determination of the amount of excess matching contributions shall be made
after application of Section 7.3, if applicable, and after application of
Section 7.5, if applicable.
7.8 MULTIPLE USE LIMITATION
Notwithstanding any other provision of the Plan to the contrary, the following
multiple use limitation as required under Section 401(m) of the Code shall
apply: the sum of the average actual deferral percentage for Eligible Employees
who are Highly Compensated Employees and the average contribution percentage for
eligible participants who are Highly Compensated Employees may not exceed the
aggregate limit. In the event that, after satisfaction of Section 7.5 and
Section 7.7, it is determined that contributions under the Plan fail to satisfy
the multiple use limitation contained herein, the multiple use limitation shall
be satisfied by further reducing the actual deferral percentages of Eligible
Employees who are Highly Compensated Employees (beginning with the highest such
percentage) to the extent necessary to eliminate the excess, with such further
reductions to be treated as excess Tax-Deferred Contributions and disposed of as
provided in Section 7.5, or in an alternative manner, consistently applied, that
may be permitted by regulations issued under Section 401(m) of the Code.
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7.9 DETERMINATION OF INCOME OR LOSS
The income or loss attributable to excess contributions that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participant's
Separate Accounts.
7.10 CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS AND
FORFEITURES
Notwithstanding any other provision of the Plan to the contrary, the annual
addition with respect to a Participant for a limitation year shall in no event
exceed the lesser of (i) $30,000 (adjusted as provided in Section 415(d) of the
Code, with the first adjustment being made for limitation years beginning on or
after January 1, 1996) or (ii) 25 percent of the Participant's compensation, as
defined in Section 415(c)(3) of the Code and regulations issued thereunder, for
the limitation year. If the annual addition to the Separate Account of a
Participant in any limitation year would otherwise exceed the amount that may be
applied for his benefit under the limitation contained in this Section, the
limitation shall be satisfied by reducing contributions made on behalf of the
Participant to the extent necessary in the following order:
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have not been matched, if any, shall be reduced.
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have been matched and the matching contributions
attributable thereto, if any, shall be reduced pro rata.
Employer Contributions (other than matching contributions) otherwise
allocable to the Participant's Separate Account for the limitation year
shall be reduced.
The amount of any reduction of Tax-Deferred Contributions (plus any income
attributable thereto) shall be returned to the Participant. The amount of any
reduction of Employer Contributions shall be deemed a forfeiture for the
limitation year. Amounts deemed to be forfeitures under this Section shall be
held unallocated in a suspense account established for the limitation year and
shall be applied against the Employer's contribution obligation for the next
following limitation year (and succeeding limitation years, as necessary). If a
suspense account is in existence at any time during a limitation year, all
amounts in the suspense account must be allocated to Participants' Separate
Accounts (subject to the limitations contained herein) before any further
Tax-Deferred Contributions or Employer Contributions may be made to the Plan on
behalf of Participants. No suspense account established hereunder shall share in
any increase or decrease in the net worth of the Trust. For purposes of this
Article, excesses shall result only from the allocation of forfeitures, a
reasonable error in estimating a Participant's annual compensation (as defined
in Section 415(c)(3) of the Code and regulations issued thereunder), a
reasonable error in determining the amount of Tax-Deferred Contributions that
may be made with respect to any Participant under the limits of Section 415 of
the Code, or other limited facts and circumstances that justify the availability
of the provisions set forth above.
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7.11 COVERAGE UNDER OTHER QUALIFIED DEFINED CONTRIBUTION PLAN
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the annual addition for the limitation year
would otherwise exceed the amount that may be applied for the Participant's
benefit under the limitation contained in Section 7.10, such excess shall be
reduced first by returning the employee contributions made by the Participant
for the limitation year under all of the defined contribution plans other than
the Plan and the income attributable thereto to the extent necessary. If the
limitation contained in Section 7.10 is still not satisfied after returning all
of the employee contributions made by the Participant under all such other
plans, the excess shall be reduced by returning the elective contributions made
on the Participant's behalf for the limitation year under all such other plans
and the income attributable thereto to the extent necessary on a pro rata basis
among all of such plans. If the limitation contained in Section 7.10 is still
not satisfied after returning all of the elective contributions made on the
Participant's behalf under all such other plans, the procedure set forth in
Section 7.10 shall be invoked to eliminate any such excess. If the limitation
contained in Section 7.10 is still not satisfied after invocation of the
procedure set forth in Section 7.10, the portion of the employer contributions
and of forfeitures for the limitation year under all such other plans that has
been allocated to the Participant thereunder, but which exceeds the limitation
set forth in Section 7.10, shall be deemed a forfeiture for the limitation year
and shall be disposed of as provided in such other plans; provided, however,
that if the Participant is covered by a money purchase pension plan, the
forfeiture shall be effected first under any other defined contribution plan
that is not a money purchase pension plan and, if the limitation is still not
satisfied, then under such money purchase pension plan.
7.12 COVERAGE UNDER QUALIFIED DEFINED BENEFIT PLAN
If a Participant in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by an Employer or a Related Company, in
no event shall 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) exceed 1.0 in any limitation year. If,
before October 3, 1973, the Participant was an active participant in a qualified
defined benefit plan maintained by an Employer or a Related Company and
otherwise satisfies the requirements of Section 2004(d)(2) of ERISA, then for
purposes of applying this Section, the defined benefit plan fraction shall not
exceed 1.0. If the Plan satisfied the applicable requirements of Section 415 of
the Code as in effect for all limitation years beginning before January 1, 1987,
an amount shall be subtracted from the numerator of the defined contribution
plan fraction (not exceeding such numerator) as prescribed by the Secretary of
the Treasury so that the sum of the defined benefit plan fraction and the
defined contribution plan fraction computed under Section 415(e)(1) of the Code,
as revised by the Tax Reform Act of 1986, does not exceed 1.0 for such
limitation year. In the event the special limitation contained in this Section
is exceeded, the benefits otherwise payable to the Participant under any such
qualified defined benefit plan shall be reduced to the extent necessary to meet
such limitation.
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7.13 Scope of Limitations
The limitations contained in Sections 7.10, 7.11, and 7.12 shall be applicable
only with respect to benefits provided pursuant to defined contribution plans
and defined benefit plans described in Section 415(k) of the Code.
ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 GENERAL FUND
The Trustee shall maintain a General Fund as required to hold and administer any
assets of the Trust that are not allocated among the separate Investment Funds
as provided in the Plan or the Trust Agreement. The General Fund shall be held
and administered as a separate common trust fund. The interest of each
Participant or Beneficiary under the Plan in the General Fund shall be an
undivided interest.
8.2 INVESTMENT FUNDS
The Sponsor shall determine the number and type of Investment Funds. The Sponsor
shall communicate the same and any changes therein in writing to the
Administrator and the Trustee. Each Investment Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in any Investment Fund shall be an undivided
interest.
The Sponsor may determine to offer one or more Investment Funds that are
invested in whole or in part in equity securities issued by an Employer or a
Related Company that are publically traded and are "qualifying employer
securities" as defined in Section 407(d)(5) of ERISA.
8.3 INCOME ON TRUST
Any dividends, interest, distributions, or other income received by the Trustee
with respect to any Trust Fund maintained hereunder shall be allocated by the
Trustee to the Trust Fund for which the income was received.
8.4 SEPARATE ACCOUNTS
As of the first date a contribution is made by or on behalf of an Employee,
there shall be established a Separate Account in his name reflecting his
interest in the Trust. Each Separate Account shall be maintained and
administered for each Participant and Beneficiary in accordance with the
provisions of the Plan. The balance of each Separate Account shall be the
balance of the
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account after all credits and charges thereto, for and as of such date, have
been made as provided herein.
8.5 SUB-ACCOUNTS
A Participant's Separate Account shall be divided into individual Sub-Accounts
reflecting the portion of the Participant's Separate Account that is derived
from Tax-Deferred Contributions, Rollover Contributions, or Employer
Contributions. Each Sub-Account shall reflect separately contributions allocated
to each Trust Fund maintained hereunder and the earnings and losses attributable
thereto. Such other Sub-Accounts may be established as are necessary or
appropriate to reflect a Participant's interest in the Trust.
ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 NO LIFE INSURANCE CONTRACTS
There shall be no life insurance contracts purchased under the Plan.
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 FUTURE CONTRIBUTION INVESTMENT ELECTIONS
Each Eligible Employee shall make an investment election in the manner and form
prescribed by the Administrator directing the manner in which his Tax-Deferred
Contributions, Rollover Contributions, and Employer Contributions that are made
in cash shall be invested. An Eligible Employee's investment election shall
specify the percentage, in 5 percent increments, of such contributions that
shall be allocated to one or more of the Investment Funds with the sum of such
percentages equaling 100 percent. The investment election by a Participant shall
remain in effect until his entire interest under the Plan is distributed or
forfeited in accordance with the provisions of the Plan or until he files a
change of investment election with the Administrator, in such form and at such
times as the Administrator shall prescribe. A Participant's change of investment
election may be made effective as of the date or dates specified by the
Administrator, and must be filed with the Administrator such number of days
prior to the effective date as the Administrator shall prescribe.
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10.2 DEPOSIT OF CONTRIBUTIONS
All Tax-Deferred Contributions, Rollover Contributions, and Employer
Contributions that are made in cash shall be deposited in the Trust and
allocated among the Investment Funds in accordance with the Participant's
currently effective investment election; provided, however, that any
contributions made to the Plan in qualifying employer securities shall be
allocated to the Employer securities Investment Fund established by the Sponsor,
pending directions to the Administrator regarding their future investment. If no
investment election is on file with the Administrator at the time contributions
are to be deposited to a Participant's Separate Account, the Participant shall
be notified and an investment election form shall be provided to him. Until such
Participant shall make an effective election under this Section, his
contributions shall be allocated among the Investment Funds as directed by the
Administrator.
10.3 ELECTION TO TRANSFER BETWEEN FUNDS
A Participant may elect to transfer investments from any Investment Fund to any
other Investment Fund. The Participant's transfer election shall specify a
percentage, in 5 percent increments, of the amount eligible for transfer that is
to be transferred, which percentage may not exceed 100 percent. Any transfer
election must be filed with the Administrator in such form and at such times as
the Administrator shall prescribe. Subject to any restrictions pertaining to a
particular Investment Fund, a Participant's transfer election may be made
effective as of the date or dates specified by the Administrator, and must be
filed with the Administrator such number of days prior to the effective date as
the Administrator shall prescribe.
ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 CREDITING SEPARATE ACCOUNTS
All contributions made under the provisions of the Plan shall be credited to
Separate Accounts in the Trust Funds by the Trustee, in accordance with
procedures established in writing by the Administrator, either when received or
on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be
determined by the Administrator.
11.2 VALUING SEPARATE ACCOUNTS
Separate Accounts in the Trust Funds shall be valued by the Trustee on the
Valuation Date, in accordance with procedures established in writing by the
Administrator, either in the manner adopted by the Trustee and approved by the
Administrator or in the manner set forth in Section 11.3 as Plan valuation
procedures, as determined by the Administrator.
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11.3 PLAN VALUATION PROCEDURES
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Separate Accounts in a Trust Fund shall be
adjusted to reflect any increase or decrease in the value of the Trust Fund for
the period of time occurring since the immediately preceding Valuation Date for
the Trust Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be determined by valuing all
of the assets of the Trust Fund at fair market value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized and
unrealized, during the valuation period shall be determined on the
basis of the valuation under paragraph (a) taking into account
appropriate adjustments for contributions, loan payments, and
transfers to and distributions, withdrawals, loans, and transfers from
such Trust Fund during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust Fund
shall be allocated among Separate Accounts in the Trust Fund in the
ratio of the balance of the portion of such Separate Account in the
Trust Fund as of the preceding Valuation Date less any distributions,
withdrawals, loans, and transfers from such Separate Account balance
in the Trust Fund since the Valuation Date to the aggregate balances
of the portions of all Separate Accounts in the Trust Fund similarly
adjusted, and each Separate Account in the Trust Fund shall be
credited or charged with the amount of its allocated share.
11.4 FINALITY OF DETERMINATIONS
The Trustee shall have exclusive responsibility for determining the balance of
each Separate Account maintained hereunder. The Trustee's determinations thereof
shall be conclusive upon all interested parties.
11.5 NOTIFICATION
Within a reasonable period of time after the end of each Plan Year, the
Administrator shall notify each Participant and Beneficiary of the balances of
his Separate Account and Sub-Accounts as of a Valuation Date during the Plan
Year.
ARTICLE XII
LOANS
12.1 NO LOANS
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There shall be no loans made to Participants from the Plan.
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and has
attained age 59 1/2 may elect in writing, subject to the limitations and
conditions prescribed in this Article, to make a cash withdrawal from his
Rollover Contributions Sub-Account.
13.2 WITHDRAWALS OF TAX-DEFERRED CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and who has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in this Article may elect in writing, subject to the
limitations and conditions prescribed in this Article, to make a cash withdrawal
from his Tax-Deferred Contributions Sub-Account. The maximum amount that a
Participant may withdraw pursuant to this Section because of a hardship is the
balance of his Tax-Deferred Contributions Sub-Account, exclusive of any earnings
credited to such Sub-Account as of a date that is after September 24, 1988.
13.3 LIMITATIONS ON WITHDRAWALS OTHER THAN HARDSHIPS WITHDRAWALS
Withdrawals made pursuant to this Article, other than hardship withdrawals,
shall be subject to the following conditions and limitations:
A Participant must file a written withdrawal application with the
Administrator such number of days prior to the date as of which it
is to be effective as the Administrator shall prescribe.
Withdrawals may be made effective as soon as administratively
feasible.
13.4 CONDITIONS
A Participant must file a written application for a hardship withdrawal with the
Administrator such number of days prior to the date as of which it is to be
effective as the Administrator may prescribe. Hardship withdrawals may be made
effective as soon as administratively feasible. The Administrator shall grant a
hardship withdrawal only if it determines that the withdrawal is necessary to
meet an immediate and heavy financial need of the Participant. An immediate and
heavy financial need of the Participant means a financial need on account of:
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(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the Code) medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage payments)
of a principal residence for the Participant;
(c) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, or any dependent of the
Participant;
(d) the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's
principal residence; or
(e) costs directly related to the funeral expenses of the Participant's
spouse or any dependent of the Participant.
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if all of the following requirements are
satisfied:
The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant.
The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under
all plans maintained by an Employer or any Related Company.
The Participant's Tax-Deferred Contributions and the Participant's
elective tax-deferred contributions and employee after-tax
contributions under all other tax-qualified plans maintained by an
Employer or any Related Company shall be suspended for at least
twelve months after his receipt of the withdrawal.
The Participant shall not make Tax-Deferred Contributions or
elective tax-deferred contributions under any other tax-qualified
plan maintained by an Employer or any Related Company for the
Participant's taxable year immediately following the taxable year
of the withdrawal in excess of the applicable limit under Section
402(g) of the Code for such next taxable year less the amount of
the Participant's Tax-Deferred Contributions and elective
tax-deferred contributions under any other plan maintained by an
Employer or any Related Company for the taxable year of the
withdrawal.
The amount of a hardship withdrawal may include any amounts necessary to pay any
Federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution. A Participant shall not fail to be treated as an
Eligible Employee for purposes of applying the
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limitations contained in Article VII of the Plan merely because his Tax-Deferred
Contributions are suspended in accordance with this Section.
13.5 ORDER OF WITHDRAWAL FROM A PARTICIPANTS'S SUB-ACCOUNTS
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the order prescribed by the
Administrator, which order shall be uniform with respect to all Participants and
non-discriminatory. If the Sub-Account from which a Participant is receiving a
withdrawal is invested in more than one Investment Fund, the withdrawal shall be
charged against the Investment Funds as directed by the Administrator.
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
A Participant's Settlement Date shall occur on the date he terminates employment
with an Employer and all Related Companies because of death, retirement or other
termination of employment or is determined to be disabled by the Administrator.
Written notice of a Participant's Settlement Date shall be given by the
Administrator to the Trustee. For purposes of this Section 14.1, a Participant
is disabled if he is eligible to receive a disability benefit under the Social
Security Act.
14.2 RECREDITING OF FORFEITED AMOUNTS
For Plan Years beginning on and after October 1, 1989, a former Participant
under the Newport Steel Corporation Salaried Employees Profit Sharing Plan who
forfeited the non-vested portion of his Employer Contribution Sub-Account in
accordance with the provisions of that plan as in effect on September 30, 1989
and who is reemployed by an Employer or a Related Company shall have such
forfeited amounts recredited to a new Separate Account in his name, without
adjustment for interim gains or losses experienced by the Trust, if:
(a) he returns to employment with an Employer or a Related Company before
he incurs five consecutive breaks in service commencing after the
later of his Settlement Date or the date he received distribution of
the vested portions of his Separate Account;
(b) he resumes employment covered under the Plan before the end of the
five-year period beginning on the date he is reemployed; and
(c) if he received distribution of the vested portions of his Separate
Account, he repays to the Plan the full amount of such distribution
before the end of the five-year period beginning on the date he is
reemployed.
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Funds needed in any Plan Year to recredit the Separate Account of a Participant
with the amounts of prior forfeitures in accordance with the preceding sentence
shall come first from Trust income earned in such Plan Year, with each
Investment Fund being charged with the amount of such income proportionately,
unless his Employer chooses to make an additional Employer Contribution and
shall finally be provided by his Employer by way of a separate Employer
Contribution.
ARTICLE XV
DISTRIBUTIONS
15.1 DISTRIBUTIONS TO PARTICIPANTS
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Separate Account in the form provided under Article XVI
beginning as soon as reasonably practicable following his Settlement Date or the
date his application for distribution is filed with the Administrator, if later.
15.2 DISTRIBUTIONS TO BENEFICIARIES
If a Participant dies prior to the date distribution of his vested interest in
his Separate Account begins under this Article, his Beneficiary shall receive
distribution of the Participant's vested interest in his Separate Account in the
form provided under Article XVI beginning as soon as reasonably practicable
following the date the Beneficiary's application for distribution is filed with
the Administrator. Unless distribution is to be made over the life or over a
period certain not greater than the life expectancy of the Beneficiary,
distribution of the Participant's entire vested interest shall be made to the
Beneficiary no later than the end of the fifth calendar year beginning after the
Participant's death. If distribution is to be made over the life or over a
period certain no greater than the life expectancy of the Beneficiary,
distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the
first calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's death
or (ii) the end of the calendar year in which the Participant would
have attained age 70 1/2.
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
If a Participant dies after the date distribution of his vested interest in his
Separate Account begins under this Article, but before his entire vested
interest in his Separate Account is distributed, his Beneficiary shall receive
distribution of the remainder of
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the Participant's vested interest in his Separate Account beginning as soon as
reasonably practicable following the Participant's date of death in a form that
provides for distribution at least as rapidly as under the form in which the
Participant was receiving distribution.
15.3 CASH OUTS AND PARTICIPANT CONSENT
Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Separate Account does not exceed $5,000,
distribution of such vested interest shall be made to the Participant in a
single sum payment as soon as reasonably practicable following his Settlement
Date. If a Participant's vested interest in his Separate Account exceeds $5,000,
distribution shall not commence to such Participant prior to his Normal
Retirement Date without the Participant's written consent. If at the time of a
distribution or deemed distribution to a Participant from his Separate Account,
the Participant's vested interest in his Separate Account exceeded $5,000, then
for purposes of this Section, the Participant's vested interest in his Separate
Account on any subsequent date shall be deemed to exceed $5,000.
15.4 REQUIRED COMMENCEMENT OF DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, distribution of
a Participant's vested interest in his Separate Account shall commence to the
Participant no later than the earlier of:
(a) unless the Participant elects a later date, 60 days after the close of
the Plan Year in which (i) the Participant's Normal Retirement Date
occurs, (ii) the 10th anniversary of the year in which he commenced
participation in the Plan occurs, or (iii) his Settlement Date occurs,
whichever is latest; or
(b) the April 1 following the close of the calendar year in which he
attains age 70 1/2, whether or not his Settlement Date has occurred,
except that if a Participant attained age 70 1/2 prior to January 1,
1988, and was not a five-percent owner (as defined in Section 416 of
the Code) at any time during the five-Plan-Year period ending within
the calendar year in which he attained age 70 1/2, distribution of
such Participant's vested interest in his Separate Account shall
commence no later than the April 1 following the close of the calendar
year in which he attains age 70 1/2 or retires, whichever is later.
Distributions required to commence under this Section shall be made in the form
provided under Article XVI and in accordance with Section 401(a)(9) of the Code
and regulations issued thereunder, including the minimum distribution incidental
benefit requirements.
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15.5 REEMPLOYMENT OF A PARTICIPANT
If a Participant whose Settlement Date has occurred is reemployed by an Employer
or a Related Company, he shall continue to have a right to any distribution or
further distributions from the Trust arising from his prior Settlement Date and
any amounts credited to his Separate Account with respect to employment after
his prior Settlement Date shall be accounted for separately.
15.6 RESTRICTIONS ON ALIENATION
Except as provided in Section 401(a)(13) of the Code relating to qualified
domestic relations orders and Section 1.401(a)-13(b)(2) of Treasury regulations
relating to Federal tax levies and judgments, no benefit under the Plan at any
time shall be subject in any manner to anticipation, alienation, assignment
(either at law or in equity), encumbrance, garnishment, levy, execution, or
other legal or equitable process; and no person shall have power in any manner
to anticipate, transfer, assign (either at law or in equity), alienate or
subject to attachment, garnishment, levy, execution, or other legal or equitable
process, or in any way encumber his benefits under the Plan, or any part
thereof, and any attempt to do so shall be void.
15.7 FACILITY OF PAYMENT
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment only upon receipt of written instructions to
such effect from the Administrator. Any such payment shall be charged to the
Separate Account from which any such payment would otherwise have been paid to
the individual found incapable of attending to his financial affairs and shall
be a complete discharge of any liability therefor under the Plan.
15.8 INABILITY TO LOCATE PAYEE
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within a reasonable
period after the Administrator mails written notice of his eligibility to
receive a distribution hereunder to his last known address and makes such other
diligent effort to locate the person as the Administrator determines, that
benefit will be forfeited and applied first against the Employer Contribution
obligations for the Plan Year of the Employer for which the Participant last
performed services as an Employee. However, if the payee later files a claim for
that benefit, the benefit will be restored through an additional Employer
Contribution.
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ARTICLE XVI
FORM OF PAYMENT
16.1 NORMAL FORM OF PAYMENT
Unless the Participant, or his Beneficiary, if the Participant has died, elects
the optional form of payment, distribution shall be made to the Participant, or
his Beneficiary, as the case may be, in a single sum payment. Notwithstanding
the foregoing, in lieu of cash, a Participant or his Beneficiary, as the case
may be, may elect, under either the normal or optional forms of payment,
distribution in Employer stock of that portion of his Separate Account invested
in such.
16.2 OPTIONAL FORM OF PAYMENT
A Participant, or his Beneficiary, as the case may be, may elect to receive
distribution of all or a portion of his Separate Account in a series of
installments over a period not exceeding the life expectancy of the Participant,
or the Participant's Beneficiary, if the Participant has died, or a period not
exceeding the joint life and last survivor expectancy of the Participant and his
Beneficiary. Each installment shall be equal in amount except as necessary to
adjust for any changes in the value of the Participant's Separate Account,
unless the Participant elects a more rapid distribution schedule. The
determination of life expectancies shall be made on the basis of the expected
return multiples in Table V and VI of Section 1.72-9 of the Treasury regulations
and shall be calculated once at the time installment payments begin.
16.3 CHANGE OF OPTION ELECTION
A Participant or Beneficiary who has elected the optional form of payment may
revoke or change his election at any time by filing with the Administrator a
written election in the form prescribed by the Administrator.
16.4 DIRECT ROLLOVER
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in the form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have any portion or all of a distribution
made on or after January 1, 1993, that is an "eligible rollover distribution"
paid directly by the Plan to the "eligible retirement plan" designated by the
"qualified distributee"; provided, however, that this provision shall not apply
if the total distribution is less than $200 and that a "qualified distributee"
may not elect this provision with respect to a portion of a distribution that is
less than $500. Any such payment by the Plan to another "eligible retirement
plan" shall be a direct rollover. For purposes of this Section, the following
terms have the following meanings:
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(a) An "eligible retirement plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code that accepts rollovers;
provided, however, that, in the case of a direct rollover by a
surviving spouse, an eligible retirement plan does not include a
qualified trust described in Section 401(a) of the Code.
(b) An "eligible rollover distribution" means any distribution of all or
any portion of the balance of a Participant's Separate Account;
provided, however, that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially
equal periodic payments made not less frequently than annually for the
life or life expectancy of the qualified distributee or the joint
lives or joint life expectancies of the qualified distributee and the
qualified distributee's designated beneficiary, or for a specified
period of ten years or more; and any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code.
(c) A "qualified distributee" means a Participant, his surviving spouse,
or his spouse or former spouse who is an alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of
the Code.
16.5 NOTICE REGARDING FORMS OF PAYMENT
Within the 60 day period ending 30 days before the date as of which distribution
of a Participant's Separate Account commences, the Administrator shall provide
the Participant with a written explanation of his right to defer distribution
until his Normal Retirement Date, or such later date as may be provided in the
Plan, his right to make a direct rollover, and the forms of payment available
under the Plan. Distribution of the Participant's Separate Account may commence
less than 30 days after such notice is provided to the Participant if (i) the
Administrator clearly informs the Participant of his right to consider his
election of whether or not to make a direct rollover or to receive a
distribution prior to his Normal Retirement Date and his election of a form of
payment for a period of at least 30 days following his receipt of the notice and
(ii) the Participant, after receiving the notice, affirmatively elects an early
distribution.
16.6 REEMPLOYMENT
If a Participant is reemployed by an Employer or a Related Company prior to
receiving distribution of the entire balance of his vested interest in his
Separate Account, his prior election of a form of payment hereunder shall
continue in effect with respect to that portion of his Separate Account
attributable to his prior employment.
ARTICLE XVII
BENEFICIARIES
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17.1 DESIGNATION OF BENEFICIARY
A married Participant's Beneficiary shall be his spouse, unless the Participant
designates a person or persons other than his spouse as Beneficiary with his
spouse's written consent. A Participant may designate a Beneficiary on the form
prescribed by the Administrator. If no Beneficiary has been designated pursuant
to the provisions of this Section, or if no Beneficiary survives the Participant
and he has no surviving spouse, then the Beneficiary under the Plan shall be the
deceased Participant's surviving children in equal shares or, if there are no
surviving children, the Participant's surviving parents in equal shares or, if
there are no surviving parents, the Participant's estate. If a Beneficiary dies
after becoming entitled to receive a distribution under the Plan but before
distribution is made to him in full, and if no other Beneficiary has been
designated to receive the balance of the distribution in that event, the estate
of the deceased Beneficiary shall be the Beneficiary as to the balance of the
distribution.
17.2 SPOUSAL CONSENT REQUIREMENTS
Any written spousal consent given pursuant to this Article must acknowledge the
effect of the action taken and must be witnessed by a Plan representative or a
notary public. A Participant's spouse will be deemed to have given written
consent to the Participant's designation of Beneficiary if the Participant
establishes to the satisfaction of a Plan representative that such consent
cannot be obtained because the spouse cannot be located or because of other
circumstances set forth in Section 401(a)(11) of the Code and regulations issued
thereunder. Any written consent given or deemed to have been given by a
Participant's spouse hereunder shall be valid only with respect to the spouse
who signs the consent.
ARTICLE XVIII
ADMINISTRATION
18.1 AUTHORITY OF THE SPONSOR
The Sponsor, which shall be the administrator for purposes of ERISA and the plan
administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out its
duties hereunder. The Sponsor shall be a "named fiduciary" as that term is
defined in Section 402(a)(2) of ERISA. The Sponsor, by action of its board of
directors, may:
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(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA) among
named fiduciaries; and
(b) designate a person or persons other than a named fiduciary to carry
out any of such powers, authority, or responsibilities;
except that no allocation by the Sponsor of, or designation by the Sponsor with
respect to, any of such powers, authority, or responsibilities to another named
fiduciary or a person other than a named fiduciary shall become effective unless
such allocation or designation shall first be accepted by such named fiduciary
or other person in a writing signed by it and delivered to the Sponsor.
18.2 ACTION OF THE SPONSOR
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18.1, may be
taken by a majority of the members of the board of directors of the Sponsor,
either by vote at a meeting, or in writing without a meeting, or by the employee
or employees of the Sponsor designated by the board of directors to carry out
such acts on behalf of the Sponsor. All notices, advice, directions,
certifications, approvals, and instructions required or authorized to be given
by the Sponsor as under the Plan shall be in writing and signed by either (i) a
majority of the members of the board of directors of the Sponsor or by such
member or members as may be designated by an instrument in writing, signed by
all the members thereof, as having authority to execute such documents on its
behalf, or (ii) the employee or employees authorized to act for the Sponsor in
accordance with the provisions of this Section. 18.3 Claims Review Procedure
18.3 CLAIMS REVIEW PROCEDURE
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Sponsor shall transmit a written notice of such decision to the Claimant within
90 days of the date the claim was filed or, if special circumstances require an
extension, within 180 days of such date, which notice shall be written in a
manner calculated to be understood by the Claimant and shall contain a statement
of (i) the specific reasons for the denial of the claim, (ii) specific reference
to pertinent Plan provisions on which the denial is based, and (iii) a
description of any additional material or information necessary for the Claimant
to perfect the claim and an explanation of why such information is necessary.
The notice shall also include a statement advising the Claimant that, within 60
days of the date on which he receives such notice, he may obtain review of such
decision in accordance with the procedures hereinafter set forth. Within such
60-day period, the Claimant or his authorized representative may request that
the claim denial be reviewed by filing with the Sponsor a written request
therefor, which request shall contain the following information:
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(a) the date on which the Claimant's request was filed with the Sponsor;
provided, however, that the date on which the Claimant's request for
review was in fact filed with the Sponsor shall control in the event
that the date of the actual filing is later than the date stated by
the Claimant pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Sponsor to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the Sponsor should reverse the previous denial of his claim
for benefits and accept his claim as made; and
(d) any written material (offered as exhibits) which the Claimant desires
the Sponsor to examine in its consideration of his position as stated
pursuant to paragraph (c) of this Section.
Within 60 days of the date determined pursuant to paragraph (a) of this Section
or, if special circumstances require an extension, within 120 days of such date,
the Sponsor shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits and shall render its written decision on review to
the Claimant. The Sponsor's decision on review shall be written in a manner
calculated to be understood by the Claimant and shall specify the reasons and
Plan provisions upon which the Sponsor's decision was based.
18.4 QUALIFIED DOMESTIC RELATIONS ORDERS
The Sponsor shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures shall
be in writing and shall comply with the provisions of Section 414(p) of the Code
and regulations issued thereunder.
18.5 INDEMNIFICATION
In addition to whatever rights of indemnification the members of the board of
directors of the Sponsor or any employee or employees of the Sponsor to whom any
power, authority, or responsibility is delegated pursuant to Section 18.2, may
be entitled under the articles of incorporation or regulations of the Sponsor,
under any provision of law, or under any other agreement, the Sponsor shall
satisfy any liability actually and reasonably incurred by any such person or
persons, including expenses, attorneys' fees, judgments, fines, and amounts paid
in settlement (other than amounts paid in settlement not approved by the
Sponsor), in connection with any threatened, pending or completed action, suit,
or proceeding which is related to the exercising or failure to exercise by such
person or persons of any of the powers, authority, responsibilities, or
discretion as provided under the Plan, or reasonably believed by such person or
persons to be provided hereunder, and any action taken by such person or persons
in
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connection therewith, unless the same is judicially determined to be the result
of such person or persons' gross negligence or willful misconduct.
18.6 ACTIONS BINDING
Subject to the provisions of Section 18.3, any action taken by the Sponsor which
is authorized, permitted, or required under the Plan shall be final and binding
upon the Employers, the Trustee, all persons who have or who claim an interest
under the Plan, and all third parties dealing with the Employers or the Trustee.
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 AMENDMENT
Subject to the provisions of Section 19.2, the Sponsor may at any time and from
time to time, by action of its board of directors, amend the Plan, either
prospectively or retroactively. Any such amendment shall be by written
instrument executed by the Sponsor.
19.2 LIMITATION ON AMENDMENT
The Sponsor shall make no amendment to the Plan which shall decrease the accrued
benefit of any Participant or Beneficiary, except that nothing contained herein
shall restrict the right to amend the provisions of the Plan relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be made
hereunder which shall permit any part of the Trust to revert to an Employer or
any Related Company or be used or be diverted to purposes other than the
exclusive benefit of Participants and Beneficiaries.
19.3 TERMINATION
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon any
such termination of the Plan, the following actions shall be taken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and
all Separate Accounts and Sub-Accounts shall be adjusted in the manner
provided in Article XI, with any unallocated contributions or
forfeitures being allocated as of the termination date in the manner
otherwise provided in the Plan. The termination date shall become a
Valuation Date for purposes of Article XI. In determining the net
worth of the Trust, there shall be included as a liability such
amounts as shall be necessary to pay all
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expenses in connection with the termination of the Trust and the liquidation and
distribution of the property of the Trust, as well as other expenses, whether or
not accrued, and shall include as an asset all accrued income.
(b) All Separate Accounts shall then be disposed of to or for the benefit
of each Participant or Beneficiary in accordance with the provisions
of Article XV as if the termination date were his Settlement Date;
provided, however, that notwithstanding the provisions of Article XV,
if the Plan does not offer an annuity option and if neither his
Employer nor a Related Company establishes or maintains another
defined contribution plan (other than an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code), the Participant's
written consent to the commencement of distribution shall not be
required regardless of the value of the vested portions of his
Separate Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the
balance of his Tax-Deferred Contributions Sub-Account prior to his
separation from service (other than a distribution made in accordance
with Article XIII or required in accordance with Section 401(a)(9) of
the Code) unless (i) neither his Employer nor a Related Company
establishes or maintains another defined contribution plan (other than
an employee stock ownership plan as defined in Section 4975(e)(7) of
the Code, a tax credit employee stock ownership plan as defined in
Section 409 of the Code, or a simplified employee pension as defined
in Section 408(k) of the Code) either at the time the Plan is
terminated or at any time during the period ending 12 months after
distribution of all assets from the Plan; provided, however, that this
provision shall not apply if fewer than two percent of the Eligible
Employees under the Plan were eligible to participate at any time in
such other defined contribution plan during the 24-month period
beginning 12 months before the Plan termination, and (ii) the
distribution the Participant receives is a "lump sum distribution" as
defined in Section 402(e)(4) of the Code, without regard to clauses
(i), (ii), (iii), and (iv) of sub-paragraph (A), sub-paragraph (B), or
sub-paragraph (H) thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each Participant and Beneficiary in his
Employer Contributions Sub-Account shall be 100 percent; and, if there is a
partial termination of the Plan, the vested interest of each Participant and
Beneficiary who is affected by the partial termination in his Employer
Contributions Sub-Account shall be 100 percent. For purposes of the preceding
sentence only, the Plan shall be deemed to terminate automatically if there
shall be a complete discontinuance of contributions hereunder by all Employers.
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19.4 REORGANIZATION
The merger, consolidation, or liquidation of any Employer with or into any other
Employer or a Related Company shall not constitute a termination of the Plan as
to such Employer. If an Employer disposes of substantially all of the assets
used by the Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such Participant
prior to his separation from service (other than a distribution made in
accordance with Article XIII or required in accordance with Section 401(a)(9) of
the Code), except that a distribution shall be permitted to be made in such a
case, subject to the Participant's consent (to the extent required by law), if
(i) the distribution would constitute a "lump sum distribution" as defined in
section 402(e)(4) of the Code, without regard to clauses (i), (ii), (iii), or
(iv) of sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof, (ii)
the Employer continues to maintain the Plan after the disposition, (iii) the
purchaser does not maintain the Plan after the disposition, and (iv) the
distribution is made by the end of the second calendar year after the calendar
year in which the disposition occurred.
19.5 WITHDRAWAL OF AN EMPLOYER
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor or
any other Employer. Upon the withdrawal of an Employer, the withdrawing Employer
shall determine whether a partial termination has occurred with respect to its
Employees. In the event that the withdrawing Employer determines a partial
termination has occurred, the action specified in Section 19.3 shall be taken as
of the withdrawal date, as on a termination of the Plan, but with respect only
to Participants who are employed solely by the withdrawing Employer, and who,
upon such withdrawal, are neither transferred to nor continued in employment
with any other Employer or a Related Company. The interest of any Participant
employed by the withdrawing Employer who is transferred to or continues in
employment with any other Employer or a Related Company, and the interest of any
Participant employed solely by an Employer or a Related Company other than the
withdrawing Employer, shall remain unaffected by such withdrawal; no adjustment
to his Separate Accounts shall be made by reason of the withdrawal; and he shall
continue as a Participant hereunder subject to the remaining provisions of the
Plan.
ARTICLE XX
ADOPTION BY OTHER ENTITIES
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20.1 ADOPTION BY RELATED COMPANIES
A Related Company that is not an Employer may, with the consent of the Sponsor,
adopt the Plan and become an Employer hereunder by causing an appropriate
written instrument evidencing such adoption to be executed in accordance with
the requirements of its organizational authority. Any such instrument shall
specify the effective date of the adoption.
20.2 EFFECTIVE PLAN PROVISIONS
An Employer who adopts the Plan shall be bound by the provisions of the Plan in
effect at the time of the adoption and as subsequently in effect because of any
amendment to the Plan.
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 NO COMMITMENT AS TO EMPLOYMENT
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any period.
21.2 BENEFITS
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 NO GUARANTEES
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount which
may become due to any person hereunder.
21.4 EXPENSES
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust, unless the
Sponsor or an Employer elects to make payment.
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21.5 PRECEDENT
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
21.6 DUTY TO FURNISH INFORMATION
The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
the other reasonably deems necessary to perform its duties hereunder or
otherwise imposed by law.
21.7 WITHHOLDING
The Trustee shall withhold any tax which by any present or future law is
required to be withheld, and which the Administrator notifies the Trustee in
writing is to be so withheld, from any payment to any Participant or Beneficiary
hereunder.
21.8 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS
The Plan shall not be merged or consolidated with any other plan, nor shall any
of its assets or liabilities be transferred to another plan, unless, immediately
after such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at least
equal to the benefit he would have received immediately prior to such merger,
consolidation, or transfer of assets or liabilities (assuming in each instance
that the Plan had then terminated).
21.9 BACK PAY AWARDS
The provisions of this Section shall apply only to an Employee or former
Employee who becomes entitled to back pay by an award or agreement of an
Employer without regard to mitigation of damages. If a person to whom this
Section applies was or would have become an Eligible Employee after such back
pay award or agreement has been effected, and if any such person who had not
previously elected to make Tax-Deferred Contributions pursuant to Section 4.1
shall within 30 days of the date he receives notice of the provisions of this
Section make an election to make Tax-Deferred Contributions in accordance with
such Section 4.1 (retroactive to any Enrollment Date as of which he was or has
become eligible to do so), then such Participant may elect that any Tax-Deferred
Contributions not previously made on his behalf but which, after application of
the foregoing provisions of this Section, would have been made under the
provisions of Article IV, shall be made out of the proceeds of such back pay
award or agreement. In addition, if any such Employee or former Employee would
have been eligible to participate in the allocation of Employer Contributions
under the provisions of Article
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VI for any prior Plan Year after such back pay award or agreement has been
effected, his Employer shall make an Employer Contribution equal to the amount
of the Employer Contribution which would have been allocated to such Participant
under the provisions of Article VI as in effect during each such Plan Year. The
amounts of such additional contributions shall be credited to the Separate
Account of such Participant. Any additional contributions made by such
Participant and by an Employer pursuant to this Section shall be made in
accordance with, and subject to the limitations of the applicable provisions of
Articles IV, VI, and VII.
21.10 CONDITION ON EMPLOYER CONTRIBUTIONS
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Section 401(a) of the Code, the exempt
status of the Trust under Section 501(a) of the Code, and the deductibility of
the contribution under Section 404 of the Code. Except as otherwise provided in
this Section and Section 21.11, however, in no event shall any portion of the
property of the Trust ever revert to or otherwise inure to the benefit of an
Employer or any Related Company.
21.11 RETURN OF CONTRIBUTIONS TO AN EMPLOYER
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Section 404 of the Code,
such contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the extent
disallowed, whichever is applicable. In the event the Plan does not initially
qualify under Section 401(a) of the Code, any contribution of an Employer made
hereunder may be returned to the Employer within one year of the date of denial
of the initial qualification of the Plan, but only if an application for
determination was made within the period of time prescribed under Section
403(c)(2)(B) of ERISA.
21.12 VALIDITY OF PLAN
The validity of the Plan shall be determined and the Plan shall be construed and
interpreted in accordance with the laws of the Commonwealth of Kentucky, except
as preempted by applicable Federal law. The invalidity or illegality of any
provision of the Plan shall not affect the legality or validity of any other
part thereof.
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21.13 TRUST AGREEMENT
The Trust Agreement and the Trust maintained thereunder shall be deemed to be a
part of the Plan as if fully set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the Plan.
21.14 PARTIES BOUND
The Plan shall be binding upon the Employers, all Participants and Beneficiaries
hereunder, and, as the case may be, the heirs, executors, administrators,
successors, and assigns of each of them.
21.15 APPLICATION OF CERTAIN PLAN PROVISIONS
For purposes of the general administrative provisions and limitations of the
Plan, a Participant's Beneficiary or alternate payee under a qualified domestic
relations order shall be treated as any other person entitled to receive
benefits under the Plan. Upon any termination of the Plan, any such Beneficiary
or alternate payee under a qualified domestic relations order who has an
interest under the Plan at the time of such termination, which does not cease by
reason thereof, shall be deemed to be a Participant for all purposes of the
Plan.
21.16 LEASED EMPLOYEES
Any leased employee, other than an excludable leased employee, shall be treated
as an employee of the Employer for which he performs services for all purposes
of the Plan with respect to the provisions of Sections 401(a)(3), (4), (7), and
(16), and 408(k), 410, 411, 415, and 416 of the Code; provided, however, that no
leased employee shall accrue a benefit hereunder based on service as a leased
employee except as otherwise specifically provided in the Plan. A "leased
employee" means any person who performs services for an Employer or a Related
Company (the "recipient") (other than an employee of the recipient) pursuant to
an agreement between the recipient and any other person (the "leasing
organization") on a substantially full-time basis for a period of at least one
year, provided that such services are of a type historically performed, in the
business field of the recipient, by employees. An "excludable leased employee"
means any leased employee of the recipient who is covered by a money purchase
pension plan maintained by the leasing organization which provides for (i) a
nonintegrated employer contribution on behalf of each participant in the plan
equal to at least ten percent of compensation, (ii) full and immediate vesting,
and (iii) immediate participation by employees of the leasing organization
(other than employees who perform substantially all of their services for the
leasing organization or whose compensation from the leasing organization in each
plan year during the four-year period ending with the plan year is less than
$1,000); provided, however, that leased employees do not constitute more than 20
percent of the recipient's nonhighly compensated work force. For purposes of
this Section, contributions or benefits provided to a leased employee by the
leasing organization that are attributable to services performed for the
recipient shall be treated as provided by the recipient.
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21.17 TRANSFERRED FUNDS
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and shall
be accounted for separately to the extent necessary to accomplish the foregoing.
ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 DEFINITIONS
For purposes of this Article, the following terms shall have the following
meanings:
(a) The "compensation" of an employee means compensation as defined in
Section 415 of the Code and regulations issued thereunder. In no
event, however, shall the compensation of a Participant taken into
account under the Plan for any Plan Year exceed (1) $200,000 for Plan
Years beginning prior to January 1, 1994, or (2) $150,000 for Plan
Years beginning on or after January 1, 1994 (subject to adjustment
annually as provided in Section 401(a)(17)(B) and Section 415(d) of
the Code; provided, however, that the dollar increase in effect on
January 1 of any calendar year, if any, is effective for Plan Years
beginning in such calendar year). If the compensation of a Participant
is determined over a period of time that contains fewer than 12
calendar months, then the annual compensation limitation described
above shall be adjusted with respect to that Participant by
multiplying the annual compensation limitation in effect for the Plan
Year by a fraction the numerator of which is the number of full months
in the period and the denominator of which is 12; provided, however,
that no proration is required for a Participant who is covered under
the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12
months. In determining the compensation, for purposes of applying the
annual compensation limitation described above, of a Participant who
is a five-percent owner or one of the ten Highly Compensated Employees
receiving the greatest compensation for the Plan Year, the
compensation of the Participant's spouse and of his lineal descendants
who have not attained age 19 as of the close of the Plan Year shall be
included as compensation of the Participant for the Plan Year. If as a
result of applying the family aggregation rule described in the
preceding sentence the annual compensation limitation would be
exceeded, the limitation shall be prorated among the affected family
members in proportion to each member's compensation as determined
prior to application of the family aggregation rules.
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(b) The "determination date" with respect to any Plan Year means the
last day of the preceding Plan Year, except that the determination
date with respect to the first Plan Year of the Plan, shall mean
the last day of such Plan Year.
(c) A "key employee" means any Employee or former Employee who is a key
employee pursuant to the provisions of Section 416(i)(1) of the
Code and any Beneficiary of such Employee or former Employee.
(d) A "non-key employee" means any Employee who is not a key employee.
(e) A "permissive aggregation group" means those plans included in each
Employer's required aggregation group together with any other plan
or plans of the Employer, so long as the entire group of plans
would continue to meet the requirements of Sections 401(a)(4) and
410 of the Code.
(f) A "required aggregation group" means the group of tax-qualified
plans maintained by an Employer or a Related Company consisting of
each plan in which a key employee participates and each other plan
that enables a plan in which a key employee participates to meet
the requirements of Section 401(a)(4) or Section 410 of the Code,
including any plan that terminated within the five-year period
ending on the relevant determination date.
(g) A "super top-heavy group" with respect to a particular Plan Year
means a required or permissive aggregation group that, as of the
determination date, would qualify as a top-heavy group under the
definition in paragraph (i) of this Section with "90 percent"
substituted for "60 percent" each place where "60 percent" appears
in the definition.
(h) A "super top-heavy plan" with respect to a particular Plan Year
means a plan that, as of the determination date, would qualify as a
top-heavy plan under the definition in paragraph (j) of this
Section with "90 percent" substituted for "60 percent" each place
where "60 percent" appears in the definition. A plan is also a
"super top-heavy plan" if it is part of a super top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group if the sum, as of the
determination date, of the present value of the cumulative accrued
benefits for key employees under all defined benefit plans included
in such group and the aggregate of the account balances of key
employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all
employees covered by the plans included in such group.
(j) A "top-heavy plan" with respect to a particular Plan Year means (i),
in the case of a defined contribution plan (including any simplified
employee pension plan), a plan for which, as of the determination
date, the aggregate of the accounts (within the meaning of Section
416(g) of the Code and the regulations and rulings thereunder) of key
employees exceeds 60 percent of the aggregate of the accounts of all
participants under the plan, with the accounts valued as of the
relevant valuation date and increased for any distribution of an
account balance made in the five-year period ending on the
determination date, (ii), in the case of a defined benefit plan, a
plan for which, as of the determination date, the present value of the
cumulative accrued benefits payable under the plan (within the meaning
49
<PAGE> 57
of Section 416(g) of the Code and the regulations and rulings
thereunder) to key employees exceeds 60 percent of the present value
of the cumulative accrued benefits under the plan for all employees,
with the present value of accrued benefits to be determined under the
accrual method uniformly used under all plans maintained by an
Employer or, if no such method exists, under the slowest accrual
method permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code and including the present value of any part
of any accrued benefits distributed in the five-year period ending on
the determination date, and (iii) any plan (including any simplified
employee pension plan) included in a required aggregation group that
is a top-heavy group. For purposes of this paragraph, the accounts and
accrued benefits of any employee who has not performed services for an
Employer or a Related Company during the five-year period ending on
the determination date shall be disregarded. For purposes of this
paragraph, the present value of cumulative accrued benefits under a
defined benefit plan for purposes of top-heavy determinations shall be
calculated using the actuarial assumptions otherwise employed under
such plan, except that the same actuarial assumptions shall be used
for all plans within a required or permissive aggregation group. A
Participant's interest in the Plan attributable to any Rollover
Contributions, except Rollover Contributions made from a plan
maintained by an Employer or a Related Company, shall not be
considered in determining whether the Plan is top-heavy.
Notwithstanding the foregoing, if a plan is included in a required or
permissive aggregation group that is not a top-heavy group, such plan
shall not be a top-heavy plan.
(k) The "valuation date" with respect to any determination date means
the most recent Valuation Date occurring within the 12-month period
ending on the determination date.
22.2 APPLICABILITY
Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article shall be applicable during any Plan Year in which the Plan is
determined to be a top-heavy plan as hereinafter defined.
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22.3 MINIMUM EMPLOYER CONTRIBUTION
If the Plan is determined to be a top-heavy plan, the Employer Contributions
allocated to the Separate Account of each non-key employee who is an Eligible
Employee and who is employed by an Employer or a Related Company on the last day
of such top-heavy Plan Year shall be no less than the lesser of (i) three
percent of his compensation or (ii) the largest percentage of compensation that
is allocated as an Employer Contribution and/or Tax-Deferred Contribution for
such Plan Year to the Separate Account of any key employee; except that, in the
event the Plan is part of a required aggregation group, and the Plan enables a
defined benefit plan included in such group to meet the requirements of Section
401(a)(4) or 410 of the Code, the minimum allocation of Employer Contributions
to each such non-key employee shall be three percent of the compensation of such
non-key employee. Any minimum allocation to a non-key employee required by this
Section shall be made without regard to any social security contribution made on
behalf of the non-key employee, his number of hours of service, his level of
compensation, or whether he declined to make elective or mandatory
contributions. Notwithstanding the minimum top-heavy allocation requirements of
this Section, if the Plan is a top-heavy plan, each non-key employee who is an
Eligible Employee and who is employed by an Employer or a Related Company on the
last day of a top-heavy Plan Year and who is also covered under any other
top-heavy plan or plans of an Employer will receive the top-heavy benefits
provided under such other plan in lieu of the minimum top-heavy allocation under
the Plan.
22.4 ADJUSTMENTS TO SECTION 415 LIMITATIONS
If the Plan is determined to be a top-heavy plan and an Employer maintains a
defined benefit plan covering some or all of the Employees that are covered by
the Plan, the defined benefit plan fraction and the defined contribution plan
fraction, described in Article VII, shall be determined as provided in Section
415 of the Code by substituting "1.0" for "1.25" each place where "1.25"
appears, except that such substitutions shall not be applied to the Plan if (i)
the Plan is not a super top-heavy plan, (ii) the Employer Contribution for such
top-heavy Plan Year for each non-key employee who is to receive a minimum
top-heavy benefit hereunder is not less than four percent of such non-key
employee's compensation, and (iii) the minimum annual retirement benefit accrued
by a non-key employee who participates under one or more defined benefit plans
of an Employer or a Related Company for such top-heavy Plan Year is not less
than the lesser of three percent times years of service with an Employer or a
Related Company or thirty percent.
22.5 ACCELERATED VESTING
If the Plan is determined to be a top-heavy plan, a Participant's vested
interest in his Employer Contributions Sub-Account shall be determined no less
rapidly than in accordance with the following vesting schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
------------------------ ---------------
less than 3 0%
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3 or more 100%
52
<PAGE> 60
ARTICLE XXIII
EFFECTIVE DATE
23.1 EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT
This amendment and restatement is effective as of September 28, 1997.
* * *
EXECUTED AT Newport, Kentucky, this 24th day of September, 1998.
NS GROUP, INC.
By: ------------------------------
Clifford R. Borland, President
53
<PAGE> 1
EXHIBIT 4.4
-----------
TRUST AGREEMENT
FOR
NS GROUP, INC.
SALARIED EMPLOYEES RETIREMENT SAVINGS PLAN
<PAGE> 2
TABLE OF CONTENTS
PREAMBLE
ARTICLE I
DEFINITIONS; PURPOSE; RIGHTS OF ELIGIBLE
EMPLOYEES AND BENEFICIARIES
1.1 Definitions ...........................................2
1.2 Purpose ...............................................2
1.3 Rights of Eligible Employees and Beneficiaries ........2
ARTICLE II
POWERS AND DUTIES OF THE TRUSTEE
2.1 Powers and Duties of Trustee ..........................3
2.2 Trust Funds and Investments ...........................3
2.3 Adjustment of Claims ..................................5
2.4 Borrowing .............................................5
2.5 Voting Rights .........................................5
2.6 Directions to Trustee .................................6
2.7 Registration of Securities; Nominees ..................7
2.8 Agents, Attorneys, Actuaries, and Accountants .........7
2.9 Deposit of Funds ......................................7
2.10 Payment of Taxes; Indemnity ...........................7
2.11 Records and Statements ................................8
2.12 Authority .............................................8
2.13 Court Action Not Required .............................8
2.14 Reliance on Written Directions ........................8
2.15 Trustee's Performance .................................9
2.16 Counsel ...............................................9
2.17 Insurance Contracts ...................................9
ARTICLE III
PAYMENTS OUT OF THE TRUST
3.1 Payments .............................................10
3.2 Compensation and Expenses ............................10
3.3 Return of Contributions to the Sponsor ...............10
(i)
<PAGE> 3
ARTICLE IV
SUCCESSION TO THE TRUSTEESHIP
4.1 Resignation of the Trustee ...........................11
4.2 Removal of the Trustee ...............................11
4.3 Appointment of a Successor Trustee ...................11
ARTICLE V
AMENDMENT
5.1 Right of Amendment ...................................12
5.2 Limitation on Amendment ..............................12
ARTICLE VI
MISCELLANEOUS
6.1 Validity of Trust Agreement ..........................13
6.2 No Guarantees ........................................13
6.3 Duty to Furnish Information ..........................13
6.4 Withholding ..........................................13
6.5 Parties Bound ........................................13
6.6 Bonding Requirements .................................13
(ii)
<PAGE> 4
PREAMBLE
THIS Trust Agreement, formerly known as the Trust Agreement for NS Group, Inc.
Salaried Employees Flexible Compensation Plan, is entered into by and between NS
Group, Inc. (the "Sponsor") and Key Trust Company of Ohio, N.A., a national
banking association with full trust powers, (the "Trustee");
WHEREAS, under declaration of trust, there is presently maintained a trust for
the purpose of providing benefits under the NS Group, Inc. Salaried Employees
Retirement Savings Plan, formerly known as the NS Group, Inc. Salaried
Employees Flexible Compensation Plan (the "Plan");
WHEREAS, effective September 26, 1998, the Newport Steel Corporation Salaried
Employees Profit Sharing Plan and Trust and the Koppel Steel Corporation
Salaried Employees Profit Sharing Plan and Trust were merged into the Plan and
this Trust Agreement;
WHEREAS, the Trustee consents to the merger of the Newport Steel Corporation
Salaried Employees Profit Sharing Plan and Trust and the Koppel Steel
Corporation Salaried Employees Profit Sharing Plan and Trust into the Plan and
this Trust Agreement and agree to hold the assets transferred from such plans
and trusts in accordance with the terms of this Trust Agreement;
WHEREAS, the Sponsor desires to amend and restate in their entirety the
provisions of the declaration of trust in this Trust Agreement;
NOW, THEREFORE, the parties agree that effective as of September 27, 1998, the
prior declaration of trust is hereby amended and restated in this Trust
Agreement and that the Trustee shall hold all assets presently held in the trust
and all funds and other property from time to time contributed or transferred to
it pursuant to the provisions of the Plan, together with all the increments,
proceeds, investments and reinvestments thereof, in trust, for the uses and
purposes and upon the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS; PURPOSE; RIGHTS OF ELIGIBLE
EMPLOYEES AND BENEFICIARIES
1.1 Definitions
For all purposes of this Trust Agreement, the terms defined in the Plan shall
have the meanings therein set forth, unless, as the case may be, a different
meaning is clearly required by the context hereof.
<PAGE> 5
1.2 Purpose
The Trust is established to provide retirement and other benefits for eligible
employees and their beneficiaries. Except as provided in Section 3.3, prior to
the satisfaction of all liabilities under the Plan, no part of the Trust assets
may be applied to any purpose other than providing benefits under the Plan and
for defraying expenses of administering the Plan and the Trust.
1.3 Rights of Eligible Employees and Beneficiaries
The rights of eligible employees and their beneficiaries shall be determined
solely under the Plan.
ARTICLE II
POWERS AND DUTIES OF THE TRUSTEE
2.1 Powers and Duties of Trustee
In the administration of the Trust, the Trustee shall have the powers and duties
set forth in this Article II, in addition to all powers and duties otherwise
expressly set forth in this Trust Agreement.
2.2 Trust Funds and Investments
The Trustee shall establish Trust Funds as provided by the Plan or this Trust
Agreement or as designated by the Sponsor under authority of the Plan or this
Trust Agreement in which all the assets of the Trust shall be held. Subject to
the provisions of Section 2.6, and with respect to such Trust Funds, the Trustee
is empowered:
(a) to invest and reinvest all or any part of the Trust, including both
principal and income, in such securities, including employer
securities, real estate, and other property as may be selected by it;
moreover, the Trustee may invest and reinvest the entire Trust or any
part thereof in qualifying employer securities and qualifying employer
real property;
(b) to purchase annuities or otherwise invest assets of the Trust under a
contract or contracts with an insurance company or companies, and hold
and retain such contract or contracts as part of the Trust;
(c) to invest and reinvest all or any part of the Trust under an insurance
contract or contracts that contain provisions relating to a guaranteed
rate of return on such investment;
(d) to sell, lease, exchange, or otherwise dispose of all or any part of
the Trust at such prices, upon such terms and conditions, and in such
manner as it shall determine, including the
2
<PAGE> 6
right to lease, with or without option to purchase, for any term, and
also including the right to surrender or cancel any insurance or
annuity contract or contracts at any time held in the Trust;
(e) to exercise, buy, or sell rights of conversion or subscription;
provided, however, that any conversion of employer securities shall be
on the same terms as are applicable to all holders of the convertible
securities and in exchange for at least the fair market value of the
securities converted;
(f) to enter into or oppose any plan of consolidation, merger,
reorganization, capital readjustment, or liquidation of any corporation
or other issuer of securities held hereunder (including any plan for
the sale, lease, or mortgage of any of its property or the adjustment
or liquidation of any of its indebtedness) and, in connection with any
such plan, to enter into any security holders' trust agreement, to
deposit securities under such agreement, and to pay assessments or
subscriptions from the other assets held hereunder;
(g) to retain in cash or in forms of investment otherwise unproductive of
income such portion of the Trust as it shall determine is necessitated
by the cash requirements of the Trust; provided, however, that, to the
maximum extent feasible, such amounts shall be held which are
productive of income but are sufficiently liquid to meet such cash
requirements;
(h) to deposit securities held hereunder in any depository;
(i) to transfer to and invest all or any part of the Trust in the Key Bank
Managed Guaranteed Income Fund, the Key Bank Multiple Investment Trust
for Employee Benefit Trusts, or any collective investment trust which
constitutes an exempt trust within the meaning of the Code and which is
then maintained by a bank or trust company, or any of its affiliates,
when such bank or trust company is acting as Trustee, co-Trustee, agent
for the Trustee, or as an Investment Manager; provided that the
instrument establishing such collective investment trust, as amended
from time to time, shall govern any investment therein, and is hereby
made a part of this Trust Agreement as if fully set forth herein;
(j) to transfer to and invest all or any part of the Trust in any trust
which forms a part of a pension or profit-sharing plan of an Employer
or a Related Company qualified under the Code and which constitutes an
exempt trust within the meaning of the Code; provided that the
instrument establishing such trust, as amended from time to time, shall
govern any investment therein, and is hereby made a part of this Trust
Agreement as if fully set forth herein;
(k) to engage in any transaction with respect to all or any part of the
Trust with a pooled investment fund of any insurance company qualified
to do business in any state (as defined in ERISA) which transaction is
a sale or purchase of an interest in such fund;
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(l) to purchase and acquire put or call options if the options are traded
on and purchased through a national securities exchange registered
under the Securities and Exchange Act of 1934, as amended, or, if the
options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange; and
(m) pursuant to the direction of the Sponsor or Administrator, to purchase
and sell interests in a registered investment company registered under
the Investment Company Act of 1940, for which the Trustee or an
affiliate of the Trustee serves as investment advisor or sub-advisor
and receives compensation from the registered interest investment
company for its services as investment advisor or sub-advisor, provided
that the applicable conditions of Department of Labor Prohibited
Transaction Exemption 77-4 are satisfied.
The term "securities", wherever used in this Trust Agreement, shall include
common and preferred stocks, contractual obligations of every kind, whether
secured or unsecured, equitable interests in real or personal property, and
intangible property of every description and howsoever evidenced.
Notwithstanding the foregoing provisions of this Section, the Trustee shall not
acquire or hold any employer security unless it is a qualifying employer
security and shall not acquire or hold any employer real property unless it is
qualifying employer real property; moreover, the Trustee shall not acquire or
hold any qualifying employer security or qualifying employer real property in
violation of the provisions of Sections 407 and 408 of ERISA. The terms
"employer security", "qualifying employer security", "employer real property",
and "qualifying employer real property" shall have the meanings provided in
Section 407(d) of ERISA.
2.3 Adjustment of Claims
Subject to the provisions of Section 2.6, the Trustee is empowered to compromise
and adjust any and all claims, debts, or obligations in favor of or against the
Trust, whether such claims be in litigation or not, upon such terms and
conditions as it shall determine, and to reduce the rate of interest on, to
extend or otherwise modify, to foreclose upon default, or otherwise to enforce
any such claim, debt, or obligation.
2.4 Borrowing
Subject to the provisions of Section 2.6, the Trustee is empowered to borrow
money, upon such terms and conditions as it deems desirable or proper for the
improvement, protection, preservation, or other best interest of the Trust. For
any sum so borrowed, the Trustee may issue its promissory note as Trustee and
secure the repayment thereof by mortgaging or pledging any part or all of the
Trust.
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2.5 Voting Rights
Subject to the provisions of Section 2.6, the Trustee is empowered to exercise
the voting rights appurtenant to any securities held hereunder, either in person
or by proxy, and to execute proxies or powers of attorney to any one or more
persons.
2.6 Directions to Trustee
The powers conferred upon the Trustee in Sections 2.2, 2.3, 2.4, and 2.5 shall
be exercised by the Trustee in its sole discretion, subject to the following:
(a) With respect to Section 2.2, the Trustee shall establish such separate
Investment Funds as the Sponsor shall determine and direct in writing,
including an Employer Stock Investment Fund. As provided in the Plan,
each Participant shall make investment elections with respect to the
investment of his Separate Account among the Investment Funds. The
Trustee shall have no responsibility for the selection of investments
among the Investment Funds and shall not render investment advice to
any person in connection thereto. The Trustee shall be required to
follow the directions so given to it, except that the Trustee shall not
be required to follow any directions that would result in a breach of
the Trustee's fiduciary duties. The Employer Stock Investment Fund
shall be invested by the Trustee primarily in Employer Stock. The
Sponsor may direct the Trustee to purchase Employer Stock on the open
market through a national securities exchange, or on the
over-the-counter market through a broker-dealer which is a member of
the National Association of Securities Dealers. In addition, the
Trustee may purchase Employer Stock from the Sponsor in accordance with
the requirements of Section 408 of ERISA.
(b) With respect to Sections 2.2 and 2.5, the Sponsor may at any time
appoint an Investment Manager to manage the investment of the assets of
the Trust. The term "Investment Manager" shall have the same meaning as
provided in Section 3(38) of ERISA. Upon appointment of the Investment
Manager in writing and the written acknowledgment by the Investment
Manager of its status as a fiduciary with respect to the Plan, it shall
have such authority as is delegated to it by the Sponsor, together with
such authority as may thereafter from time to time be delegated to it
by the Sponsor. Upon the appointment of an Investment Manager and the
delegation to it of authority over investment management as herein
provided, the Trustee shall be required to follow the written
investment directions of the Investment Manager. Any such written
directions of the Investment Manager may be of a continuing nature, or
otherwise, and may be revoked or superseded by the Investment Manager
at any time by notice in writing to the Trustee.
(c) With respect to Sections 2.2, 2.3, 2.4, and 2.5, the Sponsor at any
time may direct the Trustee in writing to obtain written approval of
such person or persons as the Sponsor may designate before exercising
any one or more of such powers. Moreover, the Sponsor
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at any time may direct the Trustee in writing to follow any written
directions of such person or persons as the Sponsor may designate, with
respect to the exercise of any one or more of such powers, including,
with respect to Section 2.5, Participant directions to the Trustee in
writing with respect to voting of any employer securities credited to
his Separate Account. Voting by the Trustee shall be made in accordance
with the procedures prescribed from time to time by the Sponsor and by
the Trustee. Any such written directions by such designated person or
persons may be of a continuing nature, or otherwise, and may be revoked
or superseded by such person or persons, or by the Sponsor, at any time
by notice in writing to the Trustee. The Trustee shall be required to
follow the directions so given to it; provided, however, that the
Trustee shall not be required to follow any directions which would
result in a breach of the Trustee's fiduciary duties.
2.7 Registration of Securities; Nominees
The Trustee is empowered to register securities in its own name, or in the name
of its nominee, without disclosing the trust, or to hold the same in bearer
form, and to take title to other property in its own name or in the name of its
nominee without disclosing the trust; provided, however, that the Trustee shall
be responsible for the acts of its nominees.
2.8 Agents, Attorneys, Actuaries, and Accountants
The Trustee is empowered to employ such agents, attorneys (including attorneys
who may be of counsel for the Sponsor), actuaries, and accountants as it may
deem necessary or proper in connection with its duties hereunder, and to
determine and pay the reasonable compensation and expenses of such agents,
attorneys, actuaries, and accountants.
2.9 Deposit of Funds
The Trustee is empowered to deposit funds, pending investment or distribution
thereof, in the commercial or savings department of any bank, savings and loan
association or trust company supervised by the United States or a state or
agency thereof; and it is authorized to accept such regulations covering the
withdrawal of funds so deposited as it shall deem proper. The Trustee may
deposit all or any part of the Trust, including both principal and interest, in
the banking department of the Trustee (and any of its affiliates) and of any
other fiduciary or party-in-interest with respect to the Trust; provided,
however, that the deposits bear a reasonable rate of interest and are authorized
pursuant to the provisions of Section 408 of ERISA.
2.10 Payment of Taxes; Indemnity
The Trustee is empowered to pay out of the Trust, as a general charge thereon,
any and all taxes of whatsoever nature assessed on or in respect to the Trust;
provided, however, that, if the Sponsor shall notify the Trustee in writing that
in the opinion of its counsel any such tax is not
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lawfully assessed, the Trustee, if so requested by the Sponsor, shall contest
the validity of such tax in any manner deemed appropriate by the Sponsor or its
counsel. The word "taxes", as used herein, shall be deemed to include any
interest or penalties assessed in respect to such taxes. Unless the Trustee
first shall have been indemnified to its satisfaction by the Sponsor, the
Trustee shall not be required to contest the validity of any tax, to institute,
maintain, or defend against any other action or proceeding, or to incur any
other expense in connection with the Trust, except to the extent that the Trust
is sufficient therefor.
2.11 Records and Statements
The Trustee shall keep accurate records of all receipts, disbursements, and
other transactions affecting the Trust which, together with the assets
comprising the Trust and all evidences thereof, shall be available for
inspection or for the purpose of making copies or reproductions thereof by the
Sponsor or any of its duly authorized representatives. The Trustee shall render
to the Sponsor at intervals agreed to by the Sponsor and the Trustee statements
of receipts and disbursements and of all transactions during the preceding
interval affecting the Trust and a statement of all assets held in the Trust.
2.12 Authority
The Trustee is authorized to execute and deliver any and all instruments and to
perform any and all acts which may be necessary or proper to enable it to
discharge its duties under this Trust Agreement and to carry out the powers and
authority conferred upon it.
2.13 Court Action Not Required
All the powers and authority herein conferred upon the Trustee shall be
exercised by it without the necessity of applying to any court for leave or
confirmation. No person, firm, or corporation dealing with the Trustee shall be
required to ascertain whether the Trustee shall have obtained the approval of
any court or of any person with respect to any action which it may propose to
take hereunder, but every such person, firm, or corporation shall be protected
in relying solely upon the deed, transfer, or assurance of the Trustee.
2.14 Reliance on Written Directions
Any written direction, request, approval, or other document signed in the name
of the Sponsor or the Administrator by a duly authorized individual shall be
conclusively deemed to constitute the written direction, request, approval, or
other document of the Sponsor or the Administrator and the Trustee shall not be
liable for any loss, or by reason of any breach, arising from the direction
unless it is clear on the direction's face that the actions to be taken under
the direction would be prohibited by the fiduciary duty rules of Section 404(a)
of ERISA or would be contrary to the terms of the Plan or this Trust Agreement.
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2.15 Trustee's Performance
In the exercise of any of the powers and authority herein conferred upon it, the
Trustee shall adhere at all times to the fiduciary standards established by
ERISA.
2.16 Counsel
The Trustee may consult with counsel selected by it, who may be of counsel for
the Sponsor, as to any matters or questions arising hereunder, and the opinion
of such counsel shall be full and complete authority and protection in respect
to any action taken, suffered, or omitted by the Trustee in good faith and in
accordance with the opinion of such counsel.
2.17 Insurance Contracts
Notwithstanding any other provision of this Trust Agreement or the Plan to the
contrary, the Administrator shall retain all discretionary power relating to any
annuity, endowment or other form of insurance contract acquired by or delivered
to the Trustee. As directed by the Administrator, the Trustee will acquire, hold
and dispose of insurance contracts, deliver the purchase price, and exercise any
and all rights, privileges, options, and elections under those policies. The
Trustee will be fully discharged with respect to any policy when it is delivered
to the Administrator.
ARTICLE III
PAYMENTS OUT OF THE TRUST
3.1 Payments
The Trustee shall make payments from the Trust to such persons in such amounts
and at such times as the Sponsor or the Administrator from time to time shall
direct in writing to be payable under the Plan.
3.2 Compensation and Expenses
The Trustee shall be entitled to such reasonable compensation for its services
as the Sponsor and the Trustee from time to time shall agree, and shall be
entitled to reimbursement for all reasonable expenses incurred by the Trustee in
the administration of the Trust. All compensation, if applicable, and expenses
of administering the Plan or Trust, including fees assessed against the Plan,
the Trust, the Sponsor, or the Administrator, shall be paid by the Sponsor,
except that, in the event the Sponsor fails to make payment, such compensation
and expenses shall be paid out of the Trust as a general charge thereon. If the
Sponsor so directs, costs incident to the management of the assets of an
Investment Fund or to the purchase or sale of securities held in an Investment
Fund shall be paid by the Trustee from such Investment Fund.
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3.3 Return of Contributions to the Sponsor
Upon written notice of the Sponsor, the Trustee shall pay over to the Sponsor
the amount of any contribution (i) made under a mistake of fact, or (ii)
disallowed as a deduction contribution under Section 404 of the Code, or (iii)
with respect to which the Plan does not qualify initially under Section 401(a)
of the Code or the Trust is not exempt under Section 501(a) of the Code. In no
event shall the Trustee make such payment later than one year after (i) the
payment of the contribution, or (ii) the disallowance of the deduction to the
extent disallowed, or (iii) the date of denial of the initial qualification of
the Plan.
ARTICLE IV
SUCCESSION TO THE TRUSTEESHIP
4.1 Resignation of the Trustee
Any Trustee acting hereunder may resign at any time by giving notice in writing
to the Sponsor at least 30 days before such resignation is to become effective,
unless the Sponsor shall accept as adequate a shorter notice.
4.2 Removal of the Trustee
The Sponsor may, with or without cause, remove any Trustee acting hereunder by
giving notice in writing to the Trustee at least 30 days before such removal is
to become effective, unless the Trustee shall accept as adequate a shorter
notice.
4.3 Appointment of a Successor Trustee
If for any reason a vacancy should occur in the trusteeship, a successor Trustee
shall forthwith be appointed by the Sponsor. Any successor Trustee appointed
hereunder shall execute, acknowledge, and deliver to the Sponsor an instrument
in writing accepting such appointment hereunder. Such successor Trustee
thereupon shall become vested with the same title to the property comprising the
Trust, and shall have the same powers and duties with respect thereto, as are
hereby vested in the original Trustee. The predecessor Trustee shall execute all
such instruments and perform all such other acts as the successor Trustee or
Sponsor shall reasonably request to effectuate the provisions hereof. The
successor Trustee shall have no duty to inquire into the administration of the
Trust for any period prior to its succession.
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ARTICLE V
AMENDMENT
5.1 Right of Amendment
The Sponsor reserves the right, at its sole discretion, from time to time to
amend the provisions of this Trust Agreement in any manner; provided, however,
that the powers, duties, and immunities of the Trustee under this Trust
Agreement shall not be substantively changed without its approval. Any such
amendment shall be by written instrument executed by the Sponsor and delivered
to the Trustee, and may be made retroactively if in the opinion of the Sponsor
such amendment is necessary to enable the Plan and the Trust to meet the
requirements of the Code (including the regulations and rulings issued
thereunder) or the requirements of any governmental authority.
5.2 Limitation on Amendment
The Sponsor shall make no amendment to this Trust Agreement that results in the
forfeiture or reduction of the accrued benefit of any Participant or
Beneficiary. Notwithstanding the preceding sentence, nothing herein contained
shall restrict the right to amend the provisions of this Trust Agreement
relating to the administration of the Plan and the Trust. Moreover, no such
amendment shall be made under this Article which shall permit any part of the
Trust to revert to the Sponsor or any Related Company or to be used for or be
diverted to purposes other than for the exclusive benefit of Participants and
Beneficiaries.
ARTICLE VI
MISCELLANEOUS
6.1 Validity of Trust Agreement
The validity of this Trust Agreement shall be determined and this Trust
Agreement shall be construed in accordance with the laws of the Commonwealth of
Kentucky, except to the extent that they are superseded by Section 514 of ERISA.
The invalidity or illegality of any provision of this Trust Agreement shall not
affect the validity or legality of any other part hereof.
6.2 No Guarantees
Neither the Sponsor nor the Trustee guarantees the Trust from loss or
depreciation.
6.3 Duty to Furnish Information
The Administrator, the Employers, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
such other reasonably deems
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necessary to perform its duties imposed under the Plan or this Trust Agreement
or otherwise imposed by law.
6.4 Withholding
The Trustee shall withhold any Federal tax which by any present or future law is
required to be withheld from any payment under the Plan, unless the Sponsor
shall have notified the Trustee in writing to the effect that the Sponsor has
withheld such tax.
6.5 Parties Bound
This Trust Agreement shall be binding upon the parties hereto, all Participants,
and persons claiming under or through them pursuant to the Plan, and, as the
case may be, the heirs, executors, administrators, successors, and assigns of
each of them.
6.6 Bonding Requirements
Every fiduciary, except a bank or an insurance company, unless exempted by ERISA
and the regulations thereunder, shall be bonded in an amount not less than ten
percent of the funds such fiduciary handles; provided, however, that the minimum
bond shall be $1,000 and the maximum bond shall be $500,000. The amount of funds
handled shall be determined at the beginning of each Plan Year by the amount of
funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current Plan Year. The bond shall provide protection to the Plan against
any loss by reason of acts of fraud or dishonesty by the fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Section 412(a)(2) of ERISA), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything to the contrary
contained in the Plan or this Trust Agreement, the cost of such bonds shall be
an expense of and may, at the election of the Sponsor, be paid from the Trust or
by the Sponsor.
* * *
EXECUTED this 24th day of September, 1998.
NS GROUP, INC.
By /s/ Clifford R. Borland
--------------------------------------
Clifford R. Borland, President
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KEY TRUST COMPANY OF OHIO, N.A., Trustee
By /s/ Matthew R. Depe
-------------------------------------
Title: Vice President
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EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated November 2, 1998
included in NS Group, Inc.'s Form 10-K for the year ended September 26, 1998 and
our report dated March 3, 1998 included in the NS Group, Inc. Salaried Employees
Flexible Compensation Plan's Annual Report on Form 11-K for the year ended
September 27, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Cincinnati, Ohio
February 25, 1999
