<PAGE> 1
As filed with the Securities and Exchange Commission on October 14, 1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
OUTBOARD MARINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1589715
(State of incorporation) (I.R.S. Employer Identification Number)
100 Sea Horse Drive, Waukegan, Illinois 60085
(Address of principal executive offices, including zip code)
OMC Boat Group 401k Plan
(Full title of the Plan)
D. JEFFREY BADDELEY
General Counsel
Outboard Marine Corporation
100 Sea Horse Drive
Waukegan, Illinois 60085
(708) 689-5431
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title Amount Proposed Proposed Amount of
of to be maximum maximum registr-
securities regist- offering aggregate ation
to be ered price per offering fee
registered (1) (2) share (3) price (3) (3)
- ---------- ------- --------- ------------- ---------
Common Stock 133,000 $22.5625 $3,000,812.50 $1,034.68
par value $.15
per share
(including
Preferred
Purchase Rights)
(1) Together with an indeterminate number of additional shares which may be nec-
essary to adjust the number of shares reserved for issuance pursuant to the Plan
as a result of any future stock split, stock dividend or similar adjustment of
the outstanding Common Stock.
(2) Together with an indeterminate number of Plan interests as available in
accordance with the Plan.
(3) Estimated solely for the purpose of calculating the registration fee pur-
suant to Rule 457(h)(1) based upon the average of the high and low sales prices
for the Common Stock reported on the New York Stock Exchange as of October 7,
1994.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Note: The documents containing the information required by this section will be
given to employees participating in the OMC Boat Group 401k Plan (the "Plan")
and are not required to be filed with the Commission as a part of the Regist-
ration Statement or as an Exhibit.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference.
The following documents of Outboard Marine Corporation (OMC or the
Registrant) filed or to be filed with the Commission are incorporated herein by
reference as of their respective date:
(a) OMC's Annual Report on Form 10-K for the year ended September 30, 1993.
(b) OMC Boat Group 401k Plan Annual Report on Form 11-K filed contemporaneously
herewith.
(c) All other reports filed by OMC pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since September 30, 1993.
(d) The description of the Registrant's Common Stock, par value $.15 per share,
contained in the Registrant's Registration Statement on Form S-3 filed with the
Commission on February 24, 1987 pursuant to Section 12 of the Securities
Exchange Act of 1934, and all amendments and reports filed by the Registrant for
the purpose of updating such description.
(e) The description of the Registrant's Preferred Stock Purchase Rights
contained in the Registrant's Registration Statement on Form 8-A as filed with
the Commission on June 26, 1986, including any amendments or reports filed by
OMC for the purpose of updating the description of such Rights.
All documents subsequently filed by the Registrant pursuant to Section
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 prior to the
filing of a post-effective amendment to the Registration Statement relating to
the Common Stock offered hereby which indicates that all such Common Stock has
been sold or which deregisters all such Common Stock remaining unsold shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock and Preferred Stock Purchase
Rights registered hereby is being passed upon for OMC by D. Jeffrey Baddeley,
Vice President and General Counsel of OMC. Mr. Baddeley is the beneficial owner
of less than 1% of the outstanding shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law, as amended, grants the
Registrant broad powers to indemnify any person in connection with legal
proceedings brought against him by reason of his present or past status as an
officer or director of the Registrant, provided that the person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Registrant, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
This statute also gives the Registrant broad power to indemnify any such person
against expenses in connection with any action by or in the name of the Regist-
rant provided the person acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the Registrant except that no
indemnification may be made if such person is adjudged to be liable to the
Registrant unless and only to the extent the court in which such action was
brought determines upon application that, despite such adjudication, but in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to such indemnity as the court deems proper. In addition, to the
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extent that any such person is successful in the defense of any such legal
proceeding, the Registrant is required by statute to indemnify such person
against expenses, including attorneys' fees, that are actually and reasonably
incurred by such person in connection therewith.
Article VII of OMC's By-Laws provides that the Registrant shall indemnify
its officers and directors to the fullest extent permitted by applicable law and
that such indemnification shall not be deemed exclusive of any other rights to
which any person indemnified may be entitled by law or otherwise.
The Company maintains directors' and officers' liability insurance and
corporate reimbursement policies insuring directors and all officers against
loss arising from claims made arising out of the performance of their duties.
The effect of the foregoing provisions of the General Corporation Law of
the State of Delaware and the Registrant's Amended and Restated By-laws would be
to permit such indemnification by the Registrant for liabilities arising under
the Securities Act of 1933.
Item 7. Exception from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following are filed as exhibits to this Registration Statement:
Exhibit
No. Description of Exhibit
- ------- --------------------------------
5.1 Opinion of D. Jeffrey Baddeley.
24.1 Consent of D. Jeffrey Baddeley
(included in the opinion filed
as Exhibit 5.1).
24.2 Consent of Arthur Andersen & Co.
25.1 Powers of Attorney.
28.1 OMC Boat Group 401k Plan as Amended.
Item 9. Undertakings.
(a) Rule 415 offerings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a funda-
mental change in the information set forth in the registration statement; and
(iii) To include any material information with respect to the plan of distr-
ibution not previously disclosed in the registration statement or any material
change to such information in the registration statement; provided, however,
that paragraphs (i) and (ii) do not apply if the information required to be
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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 reg-
istration 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) Incorporation by reference of subsequent documents required by the
Securities Exchange Act of 1934 (the "Exchange Act").
The undersigned Registrant hereby undertakes that, for purposes of deter-
mining any liability under the Securities Act of 1933, each filing of the Reg-
istrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 and each filing of a Plan's annual report pur-
suant to section 15(d) of the Securities Exchange Act of 1934 that is incorp-
orated by reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Form S-8 Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the Reg-
istrant pursuant to the provisions described in Item 6, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act as is, there-
fore, 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.
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EXHIBIT INDEX
Exhibit Number Description of Exhibit Page
- -------------- ------------------------------- ----
5.1 Opinion of D. Jeffrey Baddeley. 10
24.1 Consent of D. Jeffrey Baddeley
(included in the opinion filed
as Exhibit 5.1). 10
24.2 Consent of Arthur Andersen & Co. 9
25.1 Powers of Attorney (included as
part of the signature page hereto). 7
28.1 OMC Boat Group 401k Plan as Amended. 11
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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 state-
ment to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Waukegan, State of Illinois, on October 7, 1994.
OUTBOARD MARINE CORPORATION
By: JAMES C. CHAPMAN
----------------
James C. Chapman
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
J. C. Chapman, J. R. Maurice, D. J. Baddeley and H. Malovany and each of them,
his true and lawful attorneys-in-fact and agents, with full power of substi-
tution and resubstitution for him in his name, place and stead, in any and all
capacities to sign any and all pre-effective and\or post-effective amendments to
this registration statement and to file the same, with all exhibits thereto, and
other documents in connection therewith with the Securities and Exchange Comm-
ission under the Securities Act of 1933, and hereby ratifies, approves and
confirms all that each of such attorneys-in-fact and agents, or their subst-
itutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registrat-
ion statement has been signed by the following persons in the capacities and on
the dates indicated.
Date October 7, 1994 JAMES C. CHAPMAN Chairman of the
---------------- Board of Directors,
James C. Chapman President and Chief
Executive Officer
Date October 7, 1994 JAMES R. MAURICE Vice President, Controller
---------------- (Principal accounting
James R. Maurice officer)
Date October 7, 1994 FRANK BORMAN Director
------------
Frank Borman
Date October 7, 1994 WILLIAM C. FRANCE Director
-----------------
William C. France
Date October 7, 1994 URBAN T. KUECHLE Director
----------------
Urban T. Kuechle
Date October 7, 1994 RICHARD T. LINDGREN Director
-------------------
Richard T. Lindgren
Date October 7, 1994 J. WILLARD MARRIOTT Director
-------------------
J. Willard Marriott, Jr.
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Date October 7, 1994 RICHARD J. STEGEMEIER Director
---------------------
Richard J. Stegemeier
Date October 7, 1994 CHARLES D. STRANG Director
-----------------
Charles D. Strang
Date October 7, 1994 RICHARD F. TEERLINK Director
-------------------
Richard F. Teerlink
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CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated October 29, 1993
included (or incorporated by reference) in Outboard Marine Corporation's Form
10-K for the year ended September 30, 1993 to our report dated June 3, 1993 in
OMC Boat Group 401k Plan Form 11-K for the year ended September 30, 1993 and to
all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
-------------------
Arthur Andersen LLP
Milwaukee, Wisconsin
October 3, 1994
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Direct Dial: (708) 689-5356
Telecopier: (708) 689-6246
Outboard Marine Corporation
100 Sea Horse Drive
Waukegan, Illinois 60085
RE: OMC Boat Group 401k Plan
Gentlemen:
Reference is made to the Form S-8 Registration Statement to be filed by
Outboard Marine Corporation, a Delaware corporation (the "Registrant") with the
Securities and Exchange Commission (the "Registration Statement"), in connection
with the offering of the Registrant's common stock, $.15 par value per share,
including Preferred Stock Purchase Rights (collectively "Common Stock") the OMC
Boat Group 401k Plan (the "Plan") to eligible employees of the Registrant and
participating subsidiaries.
I have acted as counsel for Registrant and in such capacity have had
general legal supervision over certain corporate proceedings and have acted as
its counsel with respect to the establishment and amendment of the Plan and the
preparation of the Registration Statement.
It is my opinion that:
1. Registrant is a corporation existing under the laws of the State of Delaware.
2. Shares of Common Stock, $.15 par value per share, when sold under the Plan in
accordance with the Registration Statement will be validly issued, fully paid
and non-assessable.
I confirm that:
1. The Plan and trust are subject to the provisions of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Such provisions
include those dealing with reporting and disclosure, participation and vesting,
funding, fiduciary responsibility, and administration and enforcement.
2. The Plan is also subject to the provisions of Title II of ERISA, the require-
ments for tax qualification.
3. As of the date hereof, the provisions of the Plan and Trust, the written doc-
uments which constitute the Plan, comply with the provisions of Title I of ERISA
applicable thereto and we have no reason to believe that the IRS will not issue
a favorable determination with respect to the continued qualification of the
Plan and Trust as so constituted or as may be so amended.
I hereby consent to the use of this opinion as an exhibit to the Registr-
ation Statement referred to above.
Respectfully submitted,
OUTBOARD MARINE CORPORATION
D. JEFFREY BADDELEY
- -------------------
D. Jeffrey Baddeley
Vice President and
General Counsel
GGR:tmv
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OMC BOAT GROUP
401(k) PLAN
ARTICLE I
Purpose
1.1 Purpose. The OMC Boat Group 401(k) Plan is hereby
established, effective October 1, 1989. It is intended that the
Plan shall qualify under Sections 401(a) and 401(k) of the Code.
ARTICLE II
Definitions
When used herein the following words shall have the following
meanings unless he context clearly indicates otherwise.
2.1 "Accounts" means a Participant's share in the Trust. Each
Participant shall have the following three (3) separate Accounts
which shall be reduced by any distributions therefrom:
(a) An "Employer Matching Contribution Account" to which
shall be credited Employer Matching Contributions made to the Plan
in accordance with Section 4.1, Minimum Employer Contributions made
to the Plan pursuant to Section 12.3(a) and Forfeitures, plus
income and gains and less expenses and losses attributable thereto.
To the extent required by the provisions of Section 8.5(d)(2), the
Participant's Employer Matching Contribution Account shall be
divided into a Pre-Break Employer Matching Contribution Account and
a Post-Break Employer Matching Contribution Account.
(b) A "401(k) Account" to which shall be credited the
Participant's Employer 401(k) Contributions made to the Plan
pursuant to Section 4.2, Special Employer Contributions made to the
Plan pursuant to Section 4.3, plus income and gains and less
expenses and losses attributable thereto.
(c) A "Rollover Contribution Account" to which shall be
credited a Participant's Rollover Contributions made to the Plan in
accordance with Section 4.6, plus income and gains and less
expense; and losses attributable thereto.
2.2 "Accrued Benefit" means a Participant's interest in the
Trust composed of such Participant's Accounts. The value of an
Accrued Benefit at any time during any Plan Year shall be its value
as adjusted on the coinciding or immediately preceding Valuation
Date.
2.3 "Active Participant" means a Participant who is an Eligible
Employee on any day of the Plan Year, subject to the provisions of
Sections 3. ; and 3.4.
2.4 "Authorized Leave of Absence" means any absence authorized
by an Employer under the Employer's standard personnel practices.
An absence due to service in the Armed Forces of the United States
shall be considered an Authorized Leave of Absence provided that
the Employee returns to employment with the Employer with
re-employment rights provided by law.
2.5 "Beneficiary" means any person designated by a Participant
in accordance with Section 8.3 to receive any death benefits which
shall be payable under the Plan.
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2.6 "Beneficiary Designation Form" means the form provided or
permitted by the Management Committee on which the Participant, in
accordance with Section 8.3(c), may (a) designate his Beneficiary,
(b) select the form of his Beneficiary's benefit and (c) elect to
permit his Beneficiary to change the form of the Beneficiary's
benefit.
2.7 "Board of Directors" means the board of directors of the
Company.
2.8 "Break in Service" means a Plan Year within which an
Employee has not completed or been credited with more than 500
Hours of Service.
2.9 "Code" means the internal Revenue Code of 1986, as amended
from time to time and any subsequent Internal Revenue Code.
References to any section of the Code shall be deemed to include
similar sections of the Code as renumbered or amended.
2.10 "Commonly Controlled Entity" means a corporation, trade,
or business if it and an Employer are members of a controlled group
of corporations as defined in Section 414(b) of the Code or under
common control as defined in Section 414(c) of the Code or members
of an affiliated service group as defined in Section 414(m) of the
Code or members of a group the members of which are required to be
aggregated pursuant to regulations under Section 14(o) of the Code;
provided however, for purposes of Section 6. , the standard of
control for determining a Commonly Controlled Entity under Sections
414(b) and 414(c) of the Code (and thus also Related Plans) shall
be deemed to be "more than 50% rather than "at least 80%".
2.11 "Company" means OMCCC Inc. or any successor corporation
by merger, consolidation, purchase, or otherwise.
2.12 "Compensation" means the amounts described below.
(a) Except as provided in (b) and (c), compensation means
with respect to the Employees of each Employer the total cash
compensation actually paid during the Plan Year to a Participant,
while a Participant in the Plan, by such Employer, including
regular salary, wages, commissions, bonuses, if any, and overtime
and increased by any amounts by which the Participant's
Compensation is reduced by salary reduction or similar arrangement
under the Plan, any Related Plan or any cafeteria plan (as
described in Section 125 of the Code maintained by such Employer
and excluding any other benefits paid under the Plan or under any
other qualified plan described in Section 401(a) of the Code, and
excluding other deferred compensation, stock options, and any other
distributions which receive special tax benefit.
(b) For purposes of determining the limitations under
Section 6.4 and for purposes of Article XII (except for determining
a Key Employee under Section 12.2(d)), Compensation means the total
compensation paid to an individual by an Employer and Commonly
Controlled Entities during the Plan Year, not increased by any
amount by which the individual's Compensation is reduced by salary
reduction or similar arrangement under the Plan, any Related Plan
or any cafeteria plan (as described in Section 125 of the Code)
maintained by an Employer or Commonly Controlled Entity, and
excluding any other benefits paid under the Plan or under any other
qualified plan described in Section 401(a) of the Code, and
excluding other deferred compensation, stock options, and any other
distributions which receive special tax benefit.
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(c) For purposes of determining Highly Compensated Employees
under Section 2.24, Key Employees under Section 12.2(d), the
average contribution percentage under Section 5.4(c), and the
actual deferral percentage under Section 5.3(c), Compensation means
the total compensation paid to an individual by an Employer and
Commonly Controlled Entities during the Plan year, increased by any
amounts by which the individual's compensation is reduced by salary
reduction or similar arrangement under the Plan, any Related Plan
or any cafeteria plan (as described in Section 125 of the Code)
maintained by an Employer or Commonly Controlled Entity, and
excluding any benefits paid under the Plan or under any other
qualified plan described in Section 401(a) of the Code, and
excluding other deferred compensation, stock options, and any other
distributions which receive special tax benefit.
Except for purposes of Section 6.4 and except for purposes of
determining Highly Compensated Employees under Section 2.24, the
amount of an Employee's Compensation taken into account under the
Plan shall not exceed $200,000 (adjusted from time to time by the
Secretary of the Treasury at the same time and in the same manner
as under Section 415(d) of the Code).
2.13 "Disability" or Disabled" means a total incapacity
resulting from personal injury or sickness, whether or not
resulting from a Participant's employment, which, in the opinion of
a physician who is acceptable to the Management Committee, will
presumably cause a Participant to be permanently absent from
employment with the Company or any subsidiary, and which causes the
Company or subsidiary, as the case may be, to retire him from its
employment.
2.14 "Effective Date" means October 1, 1989.
2.15 "Eligible Employee" means any Employee employed by an
Employer, excluding any Employee who is a member of a collective
bargaining unit represented by a collective bargaining agent with
which the Employer has or has had a bargaining agreement (unless
such agreement requires that members of such bargaining unit
participate in the Plan).
2.16 "Employee" means any individual who is employed by an
Employer or a Commonly Controlled Entity, including a person on an
Authorized Leave of Absence. Such term does not include a
consultant or an independent contractor.
2.17 "Employer" means the Company, and, effective on such date
as elected by each of the following entities, BRAMCO, INC., CARL A.
LOWE INDUSTRIES, INC., DONZI MARINE CORPORATION, FOUR WINNS, INC.,
FOUR WINNS OF TEXAS, INC., HYDRA SPORTS, INC., MARINE FABRICATORS,
INC., SEA NYMPH, INC., STRATOS BOATS, INC., SUNBIRD BOAT CO., INC.,
SYRACUSE TRANSPORTATION COMPANY and any other Commonly Controlled
Entity which, pursuant to Section 13.1 of the Plan, elects to adopt
the Plan.
2.18 "Employer Contributions" means the following payments made
from time to time by an Employer to the Trustee:
(a) "Employer Matching Contributions" made pursuant to
Section 4.1;
(b) "Employer 40l(k) Contributions" made pursuant to
Section 4.2(a);
(c) "Special Employer Contributions" made pursuant to
Section 4.3(a); and
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(d) "Minimum Employer Contributions" made pursuant to
Section 12.3(a).
2.19 "Entry Date" means January 1, April 1, July 1, and
October 1, and such additional dates as the Management
Committee may from time to time provide.
2.20 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
2.21 "Forfeiture" means the portion of a Participant's Accrued
Benefit which is forfeited as provided in Sections 8.5 and 13.5.
2.22 "401(k) Election" means the properly completed and
executed 401(k) Election form which has been filed by the
Participant with the Management Committee as provided in Section
4.4.
2.23 "401(k) Election Form" means the form provided by the
Management Committee to Participants for the purpose of making
401(k) Elections pursuant to Section 4.4.
2.24 "Highly Compensated Employee" means any Participant who at
any time during the Plan Year or the preceding Plan Year, who at
the time he has a Termination of Employment, or who at any time
after he attains age fifty-five (55):
(a) is an Employee and more than five percent (5%) owner (or
is considered as owning more than five percent (5%) within the
meaning of Section 318 of the Code) (115% owner") of the
Company or a Commonly Controlled Entity;
(b) receives Compensation in excess of $75,000 (adjusted as
determined in accordance with regulations prescribed by the
Secretary of the Treasury or his delegate pursuant to
provisions of Section 415(d) of the Code);
(c) (i) receives Compensation in excess of $50,000 (adjusted
as determined in accordance with regulations prescribed by the
Secretary of the Treasury or his delegate pursuant to
provisions of Section 415(d) of the Code) and (ii) subject to
subparagraph (e) hereof, is in the group consisting of the top
twenty percent (20%) of the total number of persons employed by
the Company and Commonly Controlled Entities when ranked on the
basis of Compensation paid during such year.
(d) (i) is an officer of the Company or a Commonly Controlled
Entity, provided that, subject to subparagraph (e) hereof, no
more thin a total of fifty (50) persons (or, if lesser, the
greater of three (3) persons or ten percent (10%) of persons
employed by the Company and Commonly Controlled Entities) shall
be treated as Highly Compensated Employees under this paragraph
for any Plan Year, and (ii) receives Compensation in excess
of fifty percent (50%) of the amount in effect under Section
415(b)(1)(A) of the Code (adjusted as determined in accordance
with regulations prescribed by the Secretary of the Treasury or
his delegate pursuant to the provisions of Section 415(d) of
the Code), provided that, if, for any Plan Year, no officer of
the Company and all Commonly Controlled Entities receives
Compensation in excess of the applicable amount under this
paragraph (d), then the highest paid officer of the Company and
Commonly Controller Entities shall be treated as a Highly
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<PAGE> 15
Compensated Employee for such Plan Year.
(e) For purposes of determining the total number of persons
employed by the Company and Commonly Controlled Entities under
Section 2.24(c) or (d), the following employees shall be
excluded:
(i) employees who have not completed thirty (30) days of
employment with an Employer or Commonly Controlled Entity,
(ii) employees who work less than seventeen and one-half
(17-1/2) hours per week,
(iii) employees who normally work during not more than six
(6) months during any year,
(iv) except to the extent provided in regulations to be
prescribed by the Secretary of Treasury, employees who are
members of a collective bargaining unit represented by a
collective bargaining agent with which the Company or a
Commonly Controlled Entity has or has had a bargaining
agreement, and
(v) employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the
Code) from the Company and Commonly Controlled Entities which
constitutes income from sources within the United States
(within the meaning of Section 861(a)(3) of the Code).
(f) In the case )f the Plan Year for which the relevant
determination is being made, any Participant not described in
paragraph (b), (c), or (d) for the preceding Plan Year (without
regard to this sentence) shall not be treated as described in
paragraph (b), (c), or (d) unless such Participant is a member
of the group consisting of the one hundred (100) employees of
the Company and Commonly Controlled Entities paid the greatest
Compensation during the Plan Year for which such determination
is being made.
(g) For purposes of this Section, the Compensation, (i) of
any Highly Compensated Employee in the group consisting of the
ten (10) most highly compensated employees of the Company and
Commonly Controlled Entities paid the greatest Compensation
(without regard to this sentence) or (ii) of any 5% owner of
the Company or a Commonly Controlled Entity, shall include any
Compensation paid to a spouse, lineal yens or descendants, or
any spouse of such lineal yens or descendants of such Highly
Compensated Employee or 5% Owner and such spouse, lineal
ascendants or descendants, or any spouse of such lineal
ascendants or descendants shall not be treated as an employee
for purposes of this Section.
2.25 "Hour of Service" means each hour for which an
Employee is paid, or entitled to payment, by an Employer or a
Commonly Controlled Entity:
(a) for the performance of duties;
(b) on account of a period of time during which no
duties were performed; provided that, no more than 501 Hours of
Service shall be credited for any single continuous period
during which an Employee performs no duty, and provided that
Hours of Service shall not be credited for payments made or due
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<PAGE> 16
under a plan maintained solely for the purpose of complying
with applicable worker's compensation, unemployment
compensation or disability insurance laws, or for reimbursement
of medical expenses; and
(c) for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the Employer or Commonly
Controlled Entity; provided that, no more than 501 Hours of
Service shall be credited for any single continuous period of
time during which the Employee did not or would not have
performed duties and, provided that, the same Hours of Service
have not already been credited under (a) or (b) above.
For Employees who are paid on other than an hourly basis, Hours
of service shall be credited for each payroll period of the
Employee for which the Employee receives or is entitled to
receive compensation according to the following chart:
Payroll Period Hours of Service Credited
-------------- -------------------------
(1) Daily 10
(2) Weekly 45
(3) Bi-Weekly 90
(4) Semi-Monthly 95
(5) Monthly 190
The determination of Hours of Service for reasons other than
the performance of duties shall be determined in accordance with
the provisions of Labor Department Regulations Section
2530.200b-2(b), any Hours of Service shall be credited to
computation periods in accordance with the provisions of Labor
Department Regulations Section 2530.200b-2(c).
To the extent not credited above, for periods of Authorized
Leave of Absence, an Employee shall be credited with a number of
Hours of Service for each week of such Authorized Leave of Absence
equal to the Employee's weekly average number of Hours
of Service for the six-week period immediately preceding such
Authorized Leave of Absence.
To the extent not credited above, solely for purposes of
avoiding a Break in Service, for periods of absence from work
on account of Parental Leave, an Employee shall be credited,
but not in excess of the number of Hours of Service required to
bring the total of Hours of Service for the Plan Year to 501, with
(1) the Hours of Service which normally would have been
credited to such individual but for the Parental Leave or
(2) 8 Hours of Service per day of such absence if the Plan
is unable to determine the Hours of Service which would have
been credited to such individual but for the Parental Leave.
An Employee's Hours of Service for absence on account of
Parental Leave shall be credited to the Plan Year in which absence
because of a Parental Leave commenced, except that if such Hours of
Service are not needed to prevent a Break in Service in the Plan
Year in which the absence because of Parental Leave commenced and
if such Parental Leave continues into a subsequent Plan Year, the
Hours of Service shall be credited to the subsequent Plan Year.
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<PAGE> 17
2.26 "Management Committee" means the committee appointed
pursuant to Article IX to administer the Plan.
2.27 "Normal Retirement Date" means the date on which a
Participant attains age 65.
2.28 "OMC Stock" means the common stock of Outboard Marine
Corporation.
2.29 "Parental Leave" means a period of time during which an
Employee is absent from work: (a) by reason of the pregnancy of the
Employee, (b) by reason of the birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (d)
for purposes of caring for such child for a period beginning
immediately following such birth or placement. An absence from work
shall not be a Parental Leave unless the Employee furnishes the
Management Committee such timely information as may reasonably be
required to establish that the absence from work was for one of the
reasons specified in this Section end the number of days for which
there was such an absence. Nothing contained herein shall be
construed to establish an employer policy of treating a Parental
Leave as an Authorized Leave of Absence.
2.30 "Participant" means an Eligible Employee participating in
the Plan as provided in Article III.
2.31 "Plan" means the OMC BOAT GROUP 401(k) PLAN, as set forth
herein and as from time to time amended.
2.32 "Plan Administration" means the person, persons or group
appointed to act as Plan Administrator under Section 9.11, and in
the absence of such appointment, the Management Committee.
2.33 "Plan Year" means each twelve-month period beginning on
October 1 and ending on September 30.
2.34 "Related Plan" means any other defined contribution plan
or a defined benefit Plan (as defined in Section 415(k) of the
Code) maintained by an Employer or a Commonly Controlled Entity,
respectively called a "Related Defined Contribution Plan" and a
"Related Defined Benefit Plan."
2.35 "Required Beginning Date" means April 1 of the calendar
year following
(a) for a Participant who reaches age 70-1/2 on or after
January 1, 1988, the calendar year in which the Participant
reaches age 70-1/2, and
(b) for a Participant who reaches age 70-1/2 prior to
January 1, 1988, the later of
(1) the calendar year in which the Participant
reaches age 70-1/2, or
(2) if the Participant is not a 5% owner of the Employer
(as determined under Code Section 416(i)) at any time
during he Plan Year ending with or within the calendar
year in which he reaches age 70-1/2 or any of the four 4)
prior Plan Years, the calendar year in which he
terminates employment with the Company and all Commonly
Controlled Entities, provided that if any such
Participant becomes a 5% owner during any Plan Year after
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<PAGE> 18
he reaches age 70-1/2, the "Recruited Beginning Date" for
such Participant shall be the April 1 of the calendar
year following the calendar year in which such Plan Year
ends;
provided, however, if a Participant attained age
70-1/2 during 1988 and is not a 5% owner and had not
retired by January 1, 1989, the participant's Required
Beginning Date shall be April 1, 1990.
2.36 "Rollover Contribution" means a rollover contribution as
described in Section 4 2(a)(5), Section 403(a)(4), or Section
408(d)(3) of the code.
2.37 "Servicing Agent" means an entity appointed by the Board
of Directors in accordance with Section 11.4.
2.38 "Termination of Employment" means (a) a resignation by an
Employee for any reason, (b) a dismissal of an Employee for any
reason, (c) death or retirement, (d) a failure to return to work
without reasonable cause, as determined by the Employer, after the
conclusion of an Authorized Leave of Absence or (e) any other
termination of employment. The transfer of an Employee from
employment by an Employer or a Commonly Controlled Entity to
employment by another Employer or a Commonly Controlled Entity
shall not be regarded as a Termination of Employment.
2.39 "Trust" means the trust established and maintained for the
purposes of the Plan, which is administered by the Trustee in
accordance with the provisions of the Trust Agreement.
2.40 "Trust Agreement" means the agreement between the Company
and the Trustee as from time to time amended.
2.41 "Trust Fund" means all property, real or personal,
received or held by the Trustee plus all income and gains and minus
all losses, expenses, and distributions chargeable thereto.
2.42 "Trustee" means any corporation, individual or individuals
who shall accept the appointment as trustee to execute the duties
of the Trustee, as specifically set forth in the Trust Agreement.
2.43 "Valuation Date" means
(a) for all purposes under the Plan except those described in
subparagraph (b), March 31, June 30, September 30 and
December 31 and such additional dates as the Management
Committee shall deem appropriate; and
(b) for any amounts invested OMC Stock the last day
of the Plan Year or such additional dates as the management
Committee shall deem appropriate.
2.44 "Year of Vesting Service" means a Plan Year in which the
Participant is credited with at least 1,000 Hours of Service.
ARTICLE III
Participation
3.1 Participation. Each Eligible Employee who has completed
thirty (30) day; of employment with an Employer or Commonly
Controlled Entity, on or before the Effective Date shall become a
Participant in this Plan on the Effective Date. Each other Eligible
Employee shall become a Participant in this Plan on the first Entry
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<PAGE> 19
Date coinciding with or next following the date he completes thirty
(30) days of employment with an Employer or Commonly Controlled
Entity.
Admission to participation in the Plan shall only be made when an
Employee is not on an Authorized Leave of Absence or serving with
the Armed Forces of the United States. Each Participant shall
continue as such until the later of his Termination of Employment
or the distribution of his entire Accrued Benefit.
3.2 Certification of Participation and Compensation to
Management Committee. Each Employer shall provide to the Management
Committee, within a reasonable time after each Entry Date, the
names of all new Participants. Each Employer, within a reasonable
time after the last day of each Plan Year, shall provide to the
Management Committee each Participant's Compensation during such
Plan Year and such other information as the Management Committee
may request.
3.3 Participation Upon Change of Job Status. A person who has
completed thirty (30) days of employment with an Employer or
Commonly Controlled Entity, but who is not a Participant because he
is not an Eligible Employee, shall become a Participant immediately
upon becoming an Eligible Employee, but not earlier than the date
upon which he would have become a Participant had he been an
Eligible Employee at all times, provided that such Eligible
Employee's 401(k) Election shall not become effective prior to the
first day of the payroll period coinciding with or next following
the Entry Date on which he becomes a Participant.
3.4 Participation Upon Re-employment. An Eligible Employee who
(a) has a Termination of Employment, (b) was a Participant
immediately before such termination of Employment, and (c)
thereafter becomes an Eligible Employee shall again become a
Participant immediately upon becoming an Eligible Employee,
provided that such Eligible Employee's 401(k) Election shall not
become effective prior to the first day of the payroll period
coinciding with or next following the Entry Date on which he
becomes a Participant.
ARTICLE IV
Contributions
4.1 Employer Matching Contributions.
(a) Employer Matching Contributions. Subject to Sections
11.1, 11.2 and 11.3, for each Plan Year, each Employer shall
contribute on behalf of each Active Participant employed by
the Employer an amount, if any, equal to such percentage as
the Management Committee may annually determine, of the
Employer 401(k) Contributions made on behalf of the Active
Participants employed by such Employer pursuant to Section
4.2(a) for such Plan Year, excluding amounts of Employer
401(k) Contributions in excess of such percentage of a
Participant's Compensation as the Management Committee may
annually determine.
(b) Deadline for Contributions. Employer Matching
contributions for each Plan Year shall be delivered to the
Trustee as soon as reasonably possible after the end of the
Plan Year on or before such date as the Management Committee
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<PAGE> 20
shall specify, but not later than the due date for the filing
of the federal income tax return (including any extensions)
of the Employer for the tax year during which the last day of
such Plan Year occurs.
4.2 Employer 401(k) Contributions.
(a) Employer 401(k) Contributions. Each Active Participant
shall, commencing as of the first day of the payroll period
coinciding with or next following the Entry Date on which he
becomes a Participant, have his Compensation reduced for each
Plan Year by the amount (if any) specified in his 401(k)
Election made in accordance with this Section 4.2(2) and
Section 4.4. Each Employer shall contribute to the Trust, as
an Employer 401(k) Contribution on behalf of each Active
Participant employed by the Employer, the amount by which
such Participant's Compensation has been educed under such
Participant's 401(k) Election. A Participant's 401(k)
Election, if any, shall be made by written authorization and
shall equal a minimum of one percent (1%) up to a maximum of
twenty percent (20%) of his Compensation (in increments of
one percent (1%)) in accordance with such rules as the
Management Committee, in its discretion, shall from time to
time specify; provided that the Management Committee may, in
its discretion further limit to some percentage less than
twenty percent (2(%) the maximum percentage by which a Highly
Compensated Employee may reduce his Compensation under this
Section 4.2 and provided further that no Employer 401(k)
Contribution for any calendar year or Plan Year shall exceed
an amount which may from time to time be established by the
Management Committee or a prorata portion of said amount for
any partial Plan Year or calendar year of contributions.
Notwithstanding the foregoing, the Employee 401(k)
Contributions of any Active Participant for any calendar year
shall not exceed $7,627 (in 1989, adjusted in subsequent
years as determined in accordance with regulations or rulings
prescribed by the Secretary of Treasury or his delegate
pursuant to the provisions of Section 15(d) of the Code and
increased in accordance with the provisions of Sections
402(g)(4) and 402(g)(8) of the Code with respect to any
Participant who participates in a plan described in Section
403(b) of the Code or who is a qualified employee in a plan
of a qualified organization (as defined in Code Section
402(g)(8)); and provided that the Management Committee may,
in its discretion, limit the monthly amount of Employer
401(k) Contributions for Active Participants to a pro rata
portion of such annual limit with such rounding and other
administratively desirable provisions as it from time to time
deems appropriate
(b) Deadline for Employer 401(k) Contributions. Each Employer
shall contribute the Employer 401(k) Contributions for each
Plan Year to the Trustee as soon as reasonably possible after
the Participant's Compensation has been reduced for each pay
period at such time as the Management Committee shall from
time to time determine, but not later than twelve (12)
months; after the last day of the Plan Year to which such
401(k) Contribution relates or, with the approval of the
Management Committee, by such later date as may be permitted
under applicable law, Treasury Regulations and Rulings of the
Internal Revenue Service.
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<PAGE> 21
4.3 Special Employer Contributions.
(a) Special Employer Contributions. For each Plan Year, the
Company may, on or before the due date (including
extensions) for filing the Company's federal income tax
return for the tax yea- during which the last day of such
Plan Year occurs, elect to have the Company and the other
employers make Special Employer Contributions to the Trust
in such amounts (if any as the Management Committee may
determine.
(b) Deadline for Special Employer Contributions. Special
Employer Contributions for each Plan Year shall be delivered
to the Trustee on or before such date as the Management
Committee shall specify, but not later than the due date for
the filing of the federal income tax return (including
extensions) of the Employer for the tax year during which
the last lay of such Plan Year occurs.
4.4 401(k) Elections. A Participant may make, change or revoke
a 401(k) Election by filing with the Management Committee written
notice of such election, change or revocation on such form and in
such manner as the Management Committee may prescribe, provided
that a 401(k) Election or a change or revocation shall apply solely
to Compensation payable as of the date of such election, charge or
revocation. An election or change in a Participant's 101(k)
Election shall be made not less than thirty (30) days prior to a
Valuation Date, and shall be effective on the first day of the
payroll period following the Valuation Date, provided that the
Management Committee, in its discretion, may permit an election to
be made or to become effective at any additional times as it may
designate. A revocation of a Participants 401(k) Election may be
made at any time and shall be effective immediately or at such
later date as the Participant shill specify. The 401(k) Election by
the Participant shall continue in effect, notwithstanding any
change in compensation, until such Participant shall change such
401(k) Election or until he shall cease to be an Active
Participant.
4.5 Prevented Contributions. Notwithstanding the provisions of
Sections 4.1, 4.2 and 4.3, no Employer shall make any contribution
for any Plan Year in excess of the maximum amount deductible from
income by the Employer for the Plan Year under the provisions of
the Code.
4.6 Rollover Contributions.
(a) Notwithstanding the provisions of Section 3.1, the
Management Committee may, at the request of an Eligible
Employee, direct the trustee to accept a Rollover
Contribution to the Plan for such Eligible Employee provided
the Management Committee reasonably anticipates he will meet
the requirements of Section 3.1, to be held in the Rollover
Contribution Account for such person, regardless of whether
he has fulfilled the requirements for participation under
Section 3.1; provided, however, that if any such Rollover
Contribution includes property other than money, the
Management Committee may in its sole discretion refuse to
accept such Rollover Contribution or may condition its
acceptance of such Rollover Contribution upon such terms and
conditions as the Management Committee in its sole
discretion ma( deem reasonable. Prior to the acceptance of
a Rollover Contribution, the Management Committee may
require the submission of evidence so that it may be
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<PAGE> 22
reasonably satisfied that such Rollover Contribution
qualifies as a Rollover Contribution. If the Management
Committee shall determine subsequent to any Rollover
Contribution that such contribution did not in fact
constitute a qualified Rollover Contribution, the amount of
his Rollover Contribution Account shall be returned to the
Eligible Employee or Participant. An Eligible Employee
making a Rollover Contribution who is otherwise ineligible
to be a Participant shill be a Participant solely for the
purpose of making and withdrawing such contributions until
he meets the other requirements for participation in the
Plan.
All Rollover Contributions are fully vested and nonforfeitable.
(b) Withdrawal of Rollover Contributions. A Participant may,
upon written notice to the Management Committee at least
thirty (30) days (or such shorter period as the Management
Committee shall allow) prior to a Valuation Date, withdraw
all or any portion of such Participant's Rollover
Contribution Account valued as of such Valuation Date.
distribution of such withdrawals shall be made in a lump sum
within a reasonable time following the Valuation Date. The
Management Committee may, from time to time, establish such
uniform and non-discriminatory rules and procedures as it
deems appropriate to administer or limit the withdrawal of
Rollover Contributions under this subsection.
ARTICLE V
Restrictions and Limitations on Contributions
5.1 Order of Application of the Restrictions and limitations
on Contributions. Sections 5.2, 5.3, 5.4, 5.5, and 6.4 shall be
applied in sequential order to contributions under the Plan.
5.2 Restrictions on 40l(k) Contributions. Notwithstanding the
provisions of Section 5.2, 401(k) Elections for any Participant or
group of Participants shall not exceed either the maximum dollar
amount permitted under Section 402(g) of the Code as set forth in
Sections 5.2(a) or 5.2(b) or the amounts permitted under the
non-discrimination rules of Section 401(k) of the Code as set forth
in Section 5.3 and in Section 5.5:
(a) Deferral Limits. Notwithstanding anything in Sections
4.1 or 4.2 to the contrary, (1) an Active Participant's
Employer 401(k) Contributions under the Plan and his
elective deferrals (as defined in Section 402(g) of the
Code) under any related Plan for any calendar year shall not
exceed $7,627 (in 1989, adjusted in subsequent years as
determined in accordance with regulations prescribed by the
Secretary of Treasury or his delegate); and (2) the
Management Committee may, in its discretion, limit the
periodic amount of Employer 401(k) Contributions for Active
Participants to a pro rata portion of such annual limit with
such rounding and other administratively desirable
provisions as it from time to time deems appropriate.
(b) Aggregate Deferral. If for any calendar year, the
Participant notifies the Management Committee in writing
prior to March 1 (or such later date as the Management
Committee permits, but no later than April 15) of the
succeeding calendar year that the sum of (1) the
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<PAGE> 23
Participant's Employee 401(k) Contributions, (2) any
elective deferrals (as defined in Section 402(g) of the
Code) under a Related Plan, and (3) other elective deferrals
(as defined in Section 402(g) of the Code) exceeds $7,627
(in 1989, adjusted in subsequent years as determined in
accordance with regulations prescribed by the Secretary of
Treasury or his delegate, and increased in accordance with
the provisions of Sections 402(g)(4) and 402(g)(8) of the
Code as applicable), then the Management Committee shall,
not later than the April 15 following the receipt of such
notice, distribute to the Participant all or such portion of
the Participant's Employer 401(k) Contributions for such
calendar year as requested in writing, but no more than the
amount necessary to eliminate the excess. Any income
allocable to such excess amount, determined under Sect-on
5.2(c), shall also be distributed.
(c) Allocation of Income. Income equal to the sum of the
amounts determined under (1) and (2) below shall be
allocated to and distributed with any amounts distributed to
a Participant as follows:
(1) Income for the Participant's Taxable Year. Income for a
completed calendar year shall equal the net income for the calendar
year allocable to a Participant's Employer 401(k) Account
multiplied by a fraction, the numerator of which is the amount of
Employer 401(k) contributions so distributed and the denominator of
which is the balance of such Account as of the last day (f the
calendar year (prior to distribution of any Employer 401(k)
Contribution for such calendar year and prior to allocation of
income, gains, losses and expenses thereto).
(2) Income for Period Between End of Calendar Year and
Distribution. Income for the period between the end of a calendar
year and the date of a distribution shill equal the product of the
number of months which have elapsed since the end of the preceding
calendar year and the date of the distribution multiplied by 10
percent multiplied by the income allocated to such distributed
amounts under subsection (1) above. For this purpose, a
distribution made on or before the 15th day of a month shall be
deemed to have been made on the last day of the prior month, and a
distribution made after the 15th day of a month shall be deemed to
have been made on the first day of the next month.
5.3 401(k) Discrimination Limits.
(a) Limits on Deferral Percentages. For any Plan Year,
Section 401(k) Contributions, as defined below, shall in all
events be caused to comply with the requirements of Section
401(k)(3) of the Code. The requirements of Section 401(k)(3)
of the Code are as follows:
(1) either the excess of the actual deferral percentage (as
defined below) for such Plan Year for Active Participants who are
Highly Compensated Employees over that of Active Participants who
are non-Highly Compensated Employees is not more than two (2)
percentage points, and the actual deferral percentage for such Plan
Year for Active Participants who are Highly Compensated Employees
is not more than the actual deferral percentage for such Plan Year
of Active Participants who are non-Highly Compensated Employees
multiplied by two (2), or
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<PAGE> 24
(2) the actual deferral percentage for such Plan
Year for the Active Participants who are Highly
Compensated Employees is not more than the actual
deferral percentage for such Plan Year of Active Participants who
are non-Highly Compensated Employees multiplied by 1.25.
(b) Section 401(k)(3) Contributions. "Section 401(k)(3)
Contributions;" include 401(k) Contributions and, at the
Management Committee's election, all or any portion of the
Special Employer Contributions, or the matching contributions
(as defined in Section 401(m)(4)(A)) and/or qualified
nonelective contributions (as defined in Section 401(m)(4)(C)
of the Code) made under any Related Plan to the extent
permitted in applicable regulations and to the extent the
Management Committee separately accounts therefor (including
separate accounting for income, gains, losses, withdrawals,
and other credits or charges).
(c) Actual Deferral Percentage. The actual deferral
percentage for a specified group of Participants for a Plan
Year shall be the average of the ratios (calculated
separately for each Active Participant in such group) of the
amount of Section 401(k)(3) Contributions actually made on
behalf of each such Active Participant for such Plan Year
(excluding excess deferrals of non-Highly Compensated
Employees to the Plan or any Related Plan) divided by the
Active Participant's Compensation. Such ratios and the actual
deferral percentage for each group shall be calculated to the
nearest one-hundredth of one percent.
(d) Limits on Section 401(k)(3) Contributions. The Management
Committee may establish, from time to time, such rules,
restrictions, and limitations as it may deem appropriate to
insure that Section 401(k)(3) Contributions made to the Plan
satisfy the requirement of Section 401(k)(3) of the Code as
set forth herein. If the Management Committee determines that
it is necessary or desirable, the Management Committee may
reduce or completely disallow Employer 401(k) Contributions
for Highly Compensated Employees, including 401(k)
Contributions already made to the Plan for that Plan Year.
Upon reduction or disallowance by the Management Committee,
the amount by which the Employer 401(k) Contributions of
Highly Compensated Employees exceed the Management Committees
determination of allowable Employer 401(k) Contributions, or
Highly Compensated Employees for the Plan Year shall be
reduced under the following leveling method: the unmatched
Employer 401(k) Contributions and, if necessary, the matched
Employer 401(k) Contributions with respect thereto if the
Highly Compensated Employee with the highest actual deferral
percentage shall be reduced to the extent necessary to enable
the Plan to satisfy the requirement of Section 401(k)(3) of the Code or
to reduce such Highly Compensated Employee's actual deferral
percentage to equal that of the Highly Compensated Employee
with the next highest actual deferral percentage. This process
shall be repeated until the Plan satisfies the requirements of
Section 401(k)(3) of the Code. The Management Committee shall,
after the close of the Plan Year, and no later then 12 months
following the close of the Plan Year in which the reduced
401(k) Contributions were deferred, distribute the amount of
such contributions, including any income earned on such
amounts (determined under Section 5.3(f)), to the Highly
Compensated Employees on whose behalf such contributions were
made.
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<PAGE> 25
(e) Aggregation Rules. Notwithstanding the foregoing
provisions in this Section 5.3, if a Related Plan which
contains a cash or deferred arrangement and the Plan are
treated as one plan for purposes of Section 401(a)(4) or
410(b) of the Code, such plans shall be treated as one
arrangement under this Section 5.3, and if a Highly
Compensated Employee is a participant under a cash or deferred
arrangement under the Plan and a Related Plan, such plans
shall be treated as one arrangement for purposes of
determining the actual deferral percentage for such
Participant.
(f) Allocation of Income. Income equal to the sum of the
amounts determined under (1) and (2) below shall be allocated
to and distributed with any amounts distributed to a
Participant as follows:
(1) Income for Plan Year. Income for a completed Plan Year
shall equal the net income for the Plan Year allocable to each of
a Participant's respective Accounts to which his Section 401(k)(3)
Contributions for the Plan Year are allocated prior to distribution
of any excess contributions, multiplied by a fraction, the
numerator of which is the amount of Employer 401(k) Contributions
so distributed and the denominator of which is the total of such
Account balances as of the last day of the Plan Year (prior to
distribution of any excess contribution for such Plan Year and
prior to allocation of income, gains, losses and expenses thereto).
(2) Income for Period Between End of Plan Year and
Distribution. Income for the period between the end of a Plan Year
and the date of a distribution shall equal the product of the
number of months which have elapsed since the end of the preceding
Plan Year and the date of the distribution multiplied by
10 percent multiplied by the income allocated to such distributed
amount under subsection (1) above. For this purpose, a distribution
made on or before the 15th day of a month shall be deemed to have
been made on the last day of the prior month, and a distribution
made after the 15th day of a month shall be deemed to have been
made on the first day of the next month.
5.4 Restrictions on Employer Matching Contributions.
(a) Limits on Contribution Percentages. For any Plan Year,
Section 401(m) Contributions, as defined below, shall in all
events be causal to comply with the requirements of Section
401(m) of the Code. The requirements of Section 401(m) of the
Code are as follows:
(1) either the excess of the average contribution percentage
(as defined below) for the Plan Year for the group of Active
Participants who are Highly Compensated Employees over that of all
Active Participants who are non-Highly Compensated Employees is not
more than two (2) percentage points, and the average contribution
percentage for the Plan Year for the group of Active Participants
who are Highly Compensated Employees is not more than the average
contribution percentage for the Plan Year of all Active
Participants who are non-Highly Compensated Employees multiplied by
two (2), or
(2) the average contribution percentage for the Plan Year for
Active Participants who are Highly Compensated Employees is not
more than the average contribution percentage for the Plan Year of
all Active Participants who are non-Highly Compensated Employees
multiplied by 1.25.
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<PAGE> 26
(b) Section 401 m) Contributions. "Section 401(m)
Contributions" include Employer Matching Contributions and,
at the Management Committee election (to the extent they are
not treated as Section 401(k)(3) Contributions under Section
(5.3), (1) all or any portion of the Special Employer
Contribution:, or the qualified nonelective contributions (as
defined in Section 401(m)(4)(C) of the Code) made under any
elated Plan and (2) all or any portion of the Employer 401(k)
Contributions or elective deferrals (as defined in Section
402(g) of the Code) made under any Related Plan to the extent
permitted in applicable regulation; and to the extent the
Management Committee separately accounts therefor (including
separate accounting for income gains, losses, withdrawals,
and other credits or charges).
(c) Average Contribution Percentage. The average contribution
percentage for a specified group of Participants for a Plan
Year shall be the average of the ratios (calculated
separately for each Active Participant in such group) of the
amount of Section 401(m)
Contributions actually paid over to the Plan on behalf of
each Active Participant divided by the Active Participant's
Compensation. Such ratios and the average contribution
percentage for each group shall be calculated to the nearest
one-hundredth of one percent.
(d) Limits on Section 401(m) Contributions. The Management
Committee may establish, from time to time, such rules,
restrictions aid limitations as it may deem appropriate to
insure that Section 401(m) Contributions made to the Plan
satisfy the requirements of Section 401(m) of the Code set
forth herein. If the Management Committee determines that it
is necessary or desirable, the Management Committee ray
reduce or disallow Employer Matching Contributions or
Employer 401(k) Contributions for Highly Compensated
Employees, including Employer Matching Contributions or
Employer 401(k) Contributions already made for that Plan
Year.
Upon reduction or disallowance by the Management Committee,
the amount by which the Employer 401(k) Contributions or Employer
Matching Contributions of Highly Compensated Employees exceed the
Management Committee's determination of allowable Employer 401(k)
Contributions or Employer Matching Contributions for Highly
Compensated Employees for the Plan Year shall be reduced under the
following leveling method: the Employer Matching Contributions and,
if necessary, the matched Employer 401(k) Contributions with
respect thereto and the unmatched 401(k) Contributions (f the
Highly Compensated Employee with the highest average contribution
percentage shall be reduced to the extent necessary to enable the
Plan to satisfy the requirement of Section 401(m) of the Code or to
reduce such Highly Compensated Employee's average contribution
percents to equal that of the Highly Compensated Employee with
the next highest average contribution percentage. This process
shall be repeated until the Plan satisfies the requirements of
Section 401(m) of the Code. The Management Committee shall, after
the close of the Plan Year, and no later than 12 months following
the close of the Plan Year in which the reduced Employer 401(k)
Contributions were deferred or the reduced Employer Matching
Contributions arose, distribute the amount of such contributions,
including any income earned on such amounts (determined under
Section 5.4(f)), to the Highly Compensated Employees on whose
behalf such contributions were made.
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(e) Aggregation. Notwithstanding any provision in this
Section 5.4 to the contrary, if a Related Plan to which matching
contributions and employee contributions are made and the Plan are
created as one plan for purposes of Code Section 401(a)(4) or Code
Section 410(b), such plans shall be treated as on? arrangement
under this Section, and if a Highly Compensated Employee is a
participant under any Related Plan to which latching contributions
and employee contributions are made such plan and the Plan shall be
treated as one arrangement for purposes of determining the average
contribution percentage of such Highly Compensated Employee.
(f) Allocation of Income. Income equal to the sum of the
amounts determined under (1) and (2) below shall be allocated to
and distributed with any amounts distributed to a Participant as
follows:
(1) Income for Plan Year. Income for a completed Plan Year
shall equal the net income for the Plan Year allocable to each of
a Participant's respective Accounts to which his Section 401(m)
Contributions for the Plan Year are allocated prior to distribution
of any excess contributions, multiplied by a fraction, the
numerator of which is the amount of Employer 401(k) Contributions
and Employer Matching Contributions so distributed and the
denominator of which is the total of such Account balances as of
the last day of the Plan Year (prior to distribution of any excess
contribution for such Plan Year and prior to allocation of income,
gains, losses and expenses thereto).
(2) Income or Period Between End of Plan Year and Distribution.
Income for the period between the end of a Plan Year and the date
of a distribution shall equal the product of the number of months
which have elapsed since the end of the preceding Plan Year and the
date of the distribution multiplied by 10 percent multiplied by the
income allocated to such distributed amounts under subsection (1)
above. For this purpose, a distribution made on or before the 15th
day of a month shall be deemed to have been made on the last day of
the prior month, and a distribution made after the 15th day of a
month shall be deemed to have been made on the first day of the
next month.
5.5 Multiple Use of Section 5.3 and Section 5.4.
Notwithstanding Section 5.1 and Section 5.4, the sum of the actual
deferral percentage; and the average contribution percentages, for
a Plan Year, of the Highly Compensated Employees who are Active
participants shall not exceed the sum of (a) plus (b) where:
(a) is one hundred and twenty-five percent (125%) of the
greater of (1) the actual deferral percentages for such Plan Year
of the non-highly Compensated Employees who are Active
Participants, or (2) the average contribution percentage for such
Plan Year of such non-Highly Compensated Employees and
(b) is two (2) plus the lesser of the amount determined under
Section 5.5(a)(1) or the amount determined under Section 5.5(a)(2),
but in no event shall this amount exceed two hundred percent (200%)
of the lesser of the amount determined under Section 5.5(a)(1) or
the amount determined under Section 5.5(a)(2).
The Management Committee may establish, from time to time, such
rules, restrictions and imitations as it may deem appropriate to
insure that the above imitations are met. If the Management
Committee determines that the reduction or disallowance of 401(k)
Contributions or Employer Matching Contributions is necessary or
desirable with respect to Highly Compensated Employees, the
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Management Committee may reduce or disallow Employer 401(k)
contributions or Employer Matching Contributions for such Highly
Compensated Employees, including Employer 401(k) Contributions or
Employer Matching Contributions already mad? for that Plan Year, as
provided in Section 5.3(d) and (f) or Section 5.4(d) and (f).
ARTICLE VI
Allocations of Contributions
6.1 The Allocation of Employer Matching Contributions. As
of the last day an Year, Employer Matching Contributions shall be
allocated to the Employer Matching Contribution Account of each
Active Participant on whose behalf they were made.
6.2 Special Employer Contributions. As of the last day of the
Plan Year, all Special Employer Contributions of each Employer for
the Plan Year shall be allocated to the 401(k) Account of each
Active Participant of such Employer who is not a Highly Compensated
Employee in an amount equal to the Special Employer Contributions
made by such Employer multiplied by a fraction, (a) for purposes of
Section 5.3(a), the numerator of which is such Active Participant's
Employer 401(k) Contributions for the Plan Year, and the
denominator of which is the total of all Employer 401(k)
Contributions for the Plan Year made for Active Participants of such
Employer who are not Highly Compensated Employees, and (b)
for purposes of Section 5.4(a), the numerator of which is such
Active Participant's 401(m) Contribution (as defined in Section
5.4(b)) for the Plan Year, and the denominator of which is the
total of all 401(m) Contributions for the Plan Year made for Active
Participants of such Employer who are not employer Compensated
Employees.
6.3 Employer 401(k) Contributions. As of each Valuation Date,
Employer 401(k) Contributions made since the immediately preceding
Valuation Date shall be allocated to the 401(k) Account of the
Active Participant on whose behalf they were made.
6.4 Limitations on Contributions.
(a) Limitations on Contributions. Any of the provisions
herein to the contrary notwithstanding, a Participant's Annual
Additions (as defined in Section 6.4(b)(1) below) for any Plan Year
shall not exceed his Maximum Annual Additions (as defined in
Section 6.4(b)(2) below) for the Plan Year. If a Participant's
Annual Additions exceed his Maximum Annual Additions, the
Participant's Annual Additions for the Plan Year shall be reduced
according to section 6.4(c) by the amount necessary to eliminate
such excess (the "Annual Excess").
(b) Definitions.
(1) "Annual Additions" of a Participant for a
Plan Year means the sum of the following:
(A) Employer Matching Contributions for the Plan Year
allocated to his Employer Matching Contributor Account,
(B) Minimum Employer Contributions and Forfeitures for the
Plan Year allocated to his Employer Matching Contribution Account,
(C) Employer 401(k) Contributions for the
Plan Year allocated to his 401(k) Account,
(D) Special Employer Contributions for the
Plan Year allocated to his 401(k) Account,
(E) all employer contributions,
non-deductible employee contributions and forfeitures allocated to
such Participant's accounts under any Related Defined Contribution
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Plan for the Plan Year of the Related Defined
Contribution Plan ending with or within the Plan Year, and
(F) solely for purposes of the limit described ii Section (b)(2)
(B), contributions allocated t any individual medical account est-
ablished for the Participant, which is part of a Related Defined
Benefit Plan, as provided in Code Section 415(1) and any amount
attributable to post-retirement medical benefits allocated
to an account, established under Code Section 419A(d)(1) or the
Participant.
Rollover Contributions to the Plan shall not be
included as a part of a Participant's Annual Additions.
Employer Contribution., distributed pursuant to Sections
5.2(b), 5.3(d), and 5 4(d) in any Plan Year shall be
included as a part of a Participant's Annual Additions.
(2) "Maximum Annual Additions" of a Participant
for a Plan Year means the lesser of (A) and (B) below:
(A) 25% of the Participant's Compensation or
(B) the greater of (i) $30,000 or (ii) one-fourth (1/4) of
the amount in effect under Section 415(b)(1)(A) of the Code
($98,064 in 1989, adjusted in subsequent years as determined in
accordance with regulations prescribed y the Secretary of Treasury
or his delegate pursuant to the provisions of Section 415(d) of
the Code).
(c) Elimination of Annual Excess. If a Participant has an Annual
Excess for a Plan Year, such excess shall not be allocated
to the Participant's Accounts but shall be eliminated as follows
(1) The Participant's Employer 401(k) Contributions which are
not matched by the Employer pursuant to Section 4.1 and his
Special Employer Contributions allocated to his 401(k) Account
shall be reduced by first reducing his Special Employer
Contributions an thereafter his unmatched Employer 401(k)
Contributions to the extent necessary to eliminate the remaining
Annual Excess.
(2) If any Annual Excess remains, the Participant's Employer
401(k) Contributions which are matched by the employer pursuant to
Section 4.1 and his Employer Matching Contributions shall be
reduced in proportionate amounts to the extent necessary to eliminate
the remaining Annual Excess.
(3) If any Annual Excess remains, the Participant's
Forfeitures shall be reduced to the extent necessary to eliminate
the remaining excess.
Any Employer 401(k) Contributions, Employer Matching
Contributions, and Special Employer Contributions reduced or
eliminated under this Section 6.4 shall be distributed to the
Participant. Any allocations of Forfeitures reduced or eliminated
under this Section 6.4 shall, subject to the limits of this Section
6.4, be reallocated to the Accounts of the other Participants as of
the last day of that Plan Year in the same manner as such
Forfeitures were initially allocated. Any Forfeitures which cannot,
under the limits of this Section 6.4, be reallocated to the
Accounts of other Participants in he Plan Year shall be held,
subject to the limits of this section 6.4, in a suspense account
and reallocated in the subsequent Plan Year prior to making any
Employer Contributions in any subsequent Plan Year. On Plan
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termination any amounts held in a suspense account which, under the
limits of this Section 6.4, cannot be reallocated to Participants
in the Plan Year of the termination shall be returned to the
Employers in such proportions as shall b determined by the
Management Committee.
(d) If a Participant participates or has participated in any
Related Defined Benefit Plan, the sum of the Defined Benefit Plan
Fraction as defined in Section 415(e)(2) of the Code) and the
Defined Contribution Plan Fraction (as defined in Section 415:e)(3)
of the Code) for such Participant shall not exceed 1.0 (called the
"Combined Fraction"). If the Combined Fraction of such Participant
exceeds 1.0, the Participant's Defined Benefit Plan Fraction shall
be reduced (a) first, by limiting the Participant's annual benefits
payable from the Related Defined Benefit Plan ii which he
participates to the extent provided therein and (D) second, by
reducing the Participant's Annual Additions to the extent necessary
to reduce the Combined Friction of such Participant to 1.0.
(e) For purposes of this Section 6.4, the standard of control
for determining a Commonly Controlled Entity under Sections 414(b)
and 414(c) of the Code (and thus also Related Plans) shall be
deemed to be "more than 50%" rather than "at least 80%.
6.5 Forfeitures. As of the last day of the Plan Year, Forfeitures shall be
allocated to the Employer Matching Contribution Account of each Active
Participant in an amount equal to the product of the amount of such
Forfeitures, multiplied by a fraction, the numerator of which is the Active
Participant's Compensation and the denominator of which is the Compensation
of all Active Participants.
ARTICLE VII
Trustee and Trust Fund
7.1 Trust Agreement. The Company and the Trustee have entered
into a Trust Agreement which provides for the investment of the
assets of the Plan and administration of the Trust Fund. The Trust
Agreement, as from time to time amended, shall continue in force
and shall be deemed to form a part of the Plan, and any and all
rights or benefits which may accrue to any person under the Plan
shall be subject to all the terms and provisions of the Trust
Agreement.
7.2 Selection of Trustee. The Board of Directors shall adopt
the Trust Agreement and thereby appoint the Trustee. Thereafter,
the resignation or removal of a Trustee, the appointment of a
Trustee, and the approval of a Trustee's accounts shall be
accomplished in the manner provided in the Trust Agreement.
7.3 Trustee's Duties. The powers, duties and responsibilities
of the Trustee shall be as stated in the Trust Agreement, and
nothing contained in this Plan either expressly or by implication
shall be deemed to impose any additional powers, duties or
responsibilities upon the Trustee. All Employer Contributions and
Rollover Contributions shall be paid into the Trust, and all
benefits payable under the Plan shall be paid from the Trust. An
Employer shall have no rights or claims of any nature in or to the
assets of the Trust Fund except the right to require the Trustee to
hold, use, apply and pay such assets held by the Trustee, in
accordance with the directions of the Management Committee, for the
exclusive benefit of the Participant and their Beneficiaries,
except as otherwise provided in Sections 6.4 and 7.13.
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7.4 Trust Expenses. All clerical, legal and other expenses of
the Plan and the Trust and Trustee's fees, if any, shall be paid by
the Trust except to the extent paid by an Employer.
7.5 Trust Entity. The Trust under this Plan from its inception
shall be a separate entity aside and apart from Employers or their
assets, The Trust, and the corpus and income thereof, shall in no
event and in no manner whatsoever be subject to the rights or
claims of any creditor of any Employer.
7.6 Separate Accounts The Management Committee, or the Trustee
on the Management Committee's behalf, shall create and maintain
separate Accounts for each Participant as described in Section 2.1
hereof. Every adjustment to a Participant's Accounts shall be
considered as having been made on the relevant Valuation Date
regardless of the date of actual entry or receipt by the Trustee of
Employer Contributions or Rollover Contributions for a Plan year.
7.7 Investment Funds.
(a) Each Participant (or Beneficiary) shall have the right to
elect, at such times, on such forms and in accordance with such
rules and procedures as the Management Committee may establish, to
have his Accounts invested in the following Investment Funds:
(1) Pooled Investment Funds. Such Investment Funds
providing for the pooled or commingled investment of Participants,
Accounts as the Management Committee shall from time to time
establish, subject to such conditions and limitations as it shall
impose.
(2) Separate Investment Funds. Such Investment Funds
(including but not limited to mutual funds or annuity contract )
providing for investment in accordance with the direction of
individual Participants for whose account such Investment Funds are
maintained as the Management Committee shall from time to time
establish, subject to such conditions and limitations as it shall
impose.
(3) OMC Stock Fund. Effective at such time as determined
by the Management Committee, such Investment Fund providing for
investment (excluding amounts held in the Rollover Contribution
Account) in OMC Stock; provided that the Trustee may, in its
discretion, hold a portion of the Fund temporarily in cash or
short-term liquid investments, pending investment or re-investment
or pending distribution of benefits.
(b) Participant Elections. A Participant's (or Beneficiary's)
investment election or change of election shall be made not less
than 30 days prior to any September 30 (or such lesser period as
may be permitted by the Management Committee) and shall be
effective on such September 30 or as soon thereafter as reasonably
possible, provided that the Management Committee, in its
discretion, may permit elections to be made or to become effective
at any additional times is it may designate. A Participant's
or Beneficiary's) investment election shall remain effective until
such time as the Participant (or Beneficiary) files a new
investment election and it becomes effective. The investment
election of a deceased Participant shall remain effective until
such time as his Beneficiary files a new investment election and it
becomes effective. If a Participant (or Beneficiary) fails to make
an investment election his Accounts shall be invested in the
Investment Fund designated from time to time by the Management
Committee.
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(c) Limitations on Participant Elections to Invest in OMC
Stock. Notwithstanding any provisions herein to the contrary, a
Participant's investment in OMC Stock is limited to twenty-five
(25%) of the Participant's 401(k) Account and to twenty-five
percent (25%) of the Participant's Employer Matching Contribution
Account, with each such Account value as of the Valuation Date with
respect to the OMC Stock preceding the date of the Participant's
investment election to so invest; provided, however, because of
investment results up to 100% of a Participant's 401(k) Account
and Employer Matching Account balances may, respectively, be
invested in OMC Stock.
(d) Limitations on Investment Elections of Certain officers.
The Management Committee may, in such manner as it deems
appropriate, restrict the investment of any Participant who is an
officer or director (for purposes of Section 16 of the Securities
Exchange Act of 1934) of Outboard Marine Corporation in OMC Stock
under the Plan if the Management Committee in its sole discretion
determines that such investment is a non-exempt purchase or sale
for purposes of Section 16 of the Securities Exchange Act of 1934
or may render any exemption pursuant to such Section 16 unavailable
to any such officer or director who would be entitled to such an
exemption but for such investment.
7.8 Trust Income As of each Valuation Date the fair market
value of the Trust shall be determined, recorded and communicated
in writing to the Management Committee by the Trustee. The Trustee
shall also determine the fair market value of each Investment fund.
The Trustee's determination of fair market value shall be final and
conclusive on all persons. As of each Valuation Date the Management
Committee shall determine the net income, gains or losses of the
Trust Fund and of each Investment Fund since the preceding
Valuation Date. The net income, gains or losses thus derived from
the Trust shall be accumulate and shall from time to time be
invested as a part of the Trust Fund. The net income, gains or
losses of each Separate Investment Fund shall be credited (or
charged) to such Separate investment Fund. The Management Committee
shall proportionately allocate the net income, gains or losses of
each Pooled investment Fund and the OMC Stock Fund among (a) the
sum of all Participants' Accounts invested in such Pooled
Investment Fund and the OMC Stock Fund, and (b) the suspense
account maintained under Section 6.4(c) if invested in such Pooled
Investment Fund, all as valued as of the preceding Valuation Date
(reduced by any distributions therefrom since the preceding
Valuation Date) by crediting (or charging) each such account by an
amount equal to the net income, gains or losses of each Pooled
Investment Fund and OMC Stock Fund multiplied by a fraction, the
numerator of which is the balance of such Account invested in such
Pooled Investment Fund or OMC Stock Fund, respectively, as of the
preceding Valuation Date (reduced by any distributions therefrom
since the preceding Valuation Date) and the denominator of which is
the total value of all Accounts invested in such Pooled Investment
Fund or OMC Stock Fund, respectively, as of the preceding Valuation
Date (reduced by any distributions therefrom since the preceding
Valuation Date); provided however that for the purpose of
allocating such income as of the first Valuation Date, the
numerator and denominator of the preceding fraction shall be
determined by using Account balances as of the first Valuation Date
after all contributions are credited thereto and before income is
allocated as provided in this Section.
one-half (1/2) of Employer 401(k) Contributions made between the
preceding Valuation Date and the current Valuation Date and which
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For purposes of the preceding sentence an amount equal to
has not been distributed since the preceding Valuation Date shall
be treated as if it was in the 401(k) Account on the preceding
Valuation Date.
7.9 Acquisition and Holding of OMC Stock. The Trustee is
authorized to invest 100% of the assets of the Trust Fund in OMC
Stock, as directed by Participants.
7.10 Purchase or Sale of OMC Stock. The Trustee, on behalf of
the Plan, may acquire (OMC Stock from, or sell OMC Stock to, a
Party in Interest as defined in Section 3(14) of ERISA or a
Disqualified Person as defined in Section 4975(e)(2) of the Code,
if (a) such sale or acquisition is for adequate consideration and
(b) no commission is charged with respect to such sale or
acquisition.
7.11 Voting of OMC Stock. At such time and in such manner as
the Management Committee shall from time to time provide, each
Participant shall be given the opportunity to advise the Management
Committee as to the manner in which the Participant wishes shares
of OMC Stock in which the Participant's Accounts is invested to be
voted. The Management Committee shall
aggregate all directions by Participants, including those with
respect to fractional shares, to the extent that such fractional
shares can be aggregated to whole numbers of such shares, and shall
direct the Trustee to vote shares of such OMC Stock in accordance
with the Participants' directions, and to the extent that
Participants shall fail to give such directions, in such manner as
the Management Committee shall deem appropriate.
7.12 Correction of Error. In the event of an error in the
adjustment of a Participant's Account, the Employer may in its sole
discretion elect to contribute such amount as it shall determine to
correct the error, or the Management Committee, in its sole
discretion, may correct such error by either crediting or charging
the adjustment required to make such correction to or against
income or as an expense of the Trust for the Plan Year in which the
correction is made. Except as provided in this Section, the
accounts of other Participants shall not be readjusted on account
of such error.
7.13 Right of the Employers to Trust Assets. Except as provided
in Section 6.4, the Employers shall have no right or claims of any
nature in or to the Trust Fund except the right to require the
Trustee to hold, use, apply, and pay such assets in its possession
in accordance with the Plan for the exclusive benefit of the
Participant or their Beneficiaries and for defraying the reasonable
expenses of administering the Plan and Trust; provided that:
(a) if an Employer Contribution is conditioned upon initial
qualification of the Plan under Sections 401(a) or 401(k) of the
Code and if the Plan does not initially so qualify, Employer 401(k)
Contributions conditioned on such qualification shall be
distributed to the appropriate Participant and other Employer
Contributions shall be returned to the appropriate Employer within
one year of the denial of qualification of the Plan;
(b) if, and to the extent that, a deduction for Employer
Contributions under Section 404 of the Code is disallowed, Employer
4)1(k) Contributions conditioned on deductibility shall be
distributed to the appropriate Participant and other Employer
Contributions conditioned upon deductibility shall be returned to
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<PAGE> 34
the appropriate Employer within one year after the disallowance of
the deduction; and
(c) if, and to the extent that, an Employer contribution is
made through mistake of fact, Employer 401(k) Contributions shall
be distributed to the appropriate Participant and other Employer
Contributions shall be returned to the appropriate Employer within
one year of the payment of the contribution.
All Employer Contributions are conditioned on the Plan's being
initially qualified under Section 401(a) of the Code, all Employer
401(k) Contributions are conditioned on the Plan's being initially
qualified under Section 401(k) of the Code and all Employer
Contributions are conditioned upon their being deductible under
Section 404 of the Code.
ARTICLE VIII
Benefits
8.1 Payment of Benefits in General. A Participant's benefits
under this Plan hall be payable in accordance with the provisions
of this Article on or after the Valuation Date coincident with or
next following the Participant's or Beneficiary's election or other
right to commence to receive such benefits:
(a) If a Participant has a Termination of Employment for any
reason other than death, the vested portion of the Participant's
Accrued Benefit shall be payable in a lump sum, in accordance with
and subject to the limitations of Section 8.2.
(b) If a Participant dies, the vested portion of his Accrued
Benefit shall be payable to his surviving spouse if he is married,
or to his other Beneficiary or Beneficiaries if he is not married
or to the extent he designates a Beneficiary other that his
surviving spouse with his spouse's consent, in a lump sum, in
accordance with and subject to the limitations of Section 8.3.
(c) If a Participant suffers a hardship, he may elect to
receive a distribution of all or a portion of his vested Accrued
Benefit in accordance with and subject to the limitations of
Section 8.4(a).
(d) If a Participant attains age 59-1/2, he may elect to
receive a distribution of his vested Accrued Benefit in a lump sum
in accordance with and subject to the limitations of Section,
8.4(b).
(e) If a Participant makes Rollover Contributions in
accordance with Section 4.6(a), he may elect to receive a
distribution of all or a portion of his Rollover Contribution
Account in accordance with and subject to the limitations of
Section 4.6(b).
(f) If a Participant is otherwise entitled to a distribution
due to retirement on or after Normal Retirement Date, Disability,
death or other Termination of Employment, the Management Committee
shall require the immediate distribution of small vested Accrued
Benefits in accordance with and subject to the limitations of
Section 8.10, notwithstanding the provisions of sections 8.2, 8.3,
and 8.9.
8.2 Payment of Vested Accrued Benefit on Termination of
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Employment.
(a) Method and form of Payment. If a Participant has a
Termination of Employment for any reason other than the
Participant's death the Participant may, upon written notice to the
Management Committee at least thirty (30) days prior to a Valuation
Date, elect a distribution of his vested Accrued Benefit valued as
of such Valuation Date, in one (1) lump sum. Such distribution
shall be made as soon as reasonably possibility after such
Valuation Date.
(b) Benefit payments shall be made not later than the
Required Beginning Date, regardless of whether the Participant has
elected a distribution or elected to defer such payments under this
Section.
8.3 Payment of Vested Accrued Benefit on Death.
(a) Payment to spouse or Other Beneficiary. On the death of
a Participant before his vested Accrued Benefit has been paid from
the Plan, the Trustee shall pay the Participant's vested accrued
Benefit to the Participant's surviving spouse (who shall be deemed
to be the Participant's designated Beneficiary), subject to the
following sentence. if the Participant is not married, or to the
extent the Participant named a Beneficiary other than his surviving
spouse to receive some or all of his vested Accrued Benefit under
the Plan (and in accordance with Section 8.9 his surviving spouse
consented to the naming of the other beneficiary), the Trustee
shall pay the Participant's vested accrued Benefit to his
Beneficiary.
(b) Method and Form of payment. Payments on the death of a
Participant shall be made in one lump sum as soon as reasonably
possible after the Valuation Date coinciding with or next following
the death of the Participant and shall be valued as of such
Valuation Date. The surviving spouse, or other Beneficiary or
Beneficiaries, may elect (if they are not prohibited by an election
of the Participant from so electing) to defer or otherwise change
the timing of the receipt of the vested Accrued Benefit.
(c) Beneficiary designation. The Participant may designate a
Beneficiary or Beneficiaries to receive the undistributed portion
of the Participant's vested Accrued Benefit, if any, on the
Participant's death. Such Beneficiary or Beneficiaries shall be
designated by the Participant on a Beneficiary Designation Form
provided or permitted by the Management Committee, and may be
changed from time to time by filing a new Beneficiary Designation
Form with the Management Committee. No designation of
Beneficiary or change of Beneficiary shall be effective
until filed with the management Committee. If a
Participant (i) fails to file a valid Beneficiary
Designation Form, or (ii) if all persons designated on the
Beneficiary Designation Form predecease the Participant
(or, in the case of a Beneficiary other than an individual,
ceases to exist prior to the Participant's death) or, (iii) if any
Beneficiary other than the surviving spouse survives the
Participant but dies (or ceases to exist) prior to the receipt of
the total amount to which such Beneficiary was entitled, and if
there are no remaining contingent Beneficiaries, then the Trustee
shall distribute the portion of such Participant's vested Accrued
Benefit which is subject to the Beneficiary Designation Form in one
lump sum to the following who shall be deemed to have been
designated as Beneficiaries by the Participant in the following
order of precedence:
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<PAGE> 36
(i) his surviving spouse;
(ii) his estate.
(d) Period of Distribution. Notwithstanding any other
provisions of the Plan, if a Participant dies before his vested
Accrued Benefit has been distributed and before his Required
Beginning Date, the Participant's vested Accrued Benefit shall be
distributed no later than December 31 of the calendar year that
contains the fifth (5th) anniversary of the Participant's death;
except that if his Beneficiary is his spouse, his vested Accrued
Benefit may be distributed no later than December 31 of the
calendar year in which the Participant would have attained the age
of 70-1/2 years.
(e) If the surviving spouse of a Participant is the
Beneficiary, and the surviving spouse dies before distributions
have begun to the surviving spouse, the rules of this Section 8.3
shall apply as though such surviving spouse were the Participant.
8.4 Participant Withdrawals.
(a) Participant Hardship withdrawals. A Participant may, on
such form and in such manner as the Management Committee shall
prescribe, request a distribution on account of an immediate and
heavy financial need of the employee (described in Section
8.4(a)(1)) provided such distribution does not exceed the lesser of
(a) the aggregate amount of his Employer 401(k) Contributions (but
not in excess of the value of his 401(k) Account) or (b) the amount
necessary (described in Section 8.4(a)(2)) to satisfy such
immediate and heavy financial need.
(1) Immediate and Heavy Financial Need. A distribution will
be deemed to be made on account of an immediate and heavy financial
need of the Participant if the distribution is on account of:
(A) medical expenses described in Section 213(d) of the
Code incurred by the Participant, the Participant's spouse or any
dependent of the Participant (as defined in Section 152 of the
Code);
(B) purchase (excluding mortgage payments) of a principal
residence for the Participant;
(C) payment of tuition for the next semester or quarter of
post-secondary education for the Participant or the Participant's
spouse, children, or dependents; or
(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.
(2) Distribution Deemed Necessary to Satisfy Immediate and
Heavy Financial Need. A distribution will be deemed to be necessary
to satisfy an immediate and heavy financial need of a Participant
if all of the following requirements are satisfied:
(A) the distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant;
(B) the Participant has obtained all distributions other
than hardship distributions, and all non-taxable loans currently
available under the Plan and all Related Plans;
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(C) the Participant's elective deferrals (as defined in
Section 402(g) of the Code) and employee contributions under the
Plan or any Related Plan or other plan of the Employer shall be
suspended for twelve months after receipt of the hardship
distribution; and
(D) Employer 401(k) Contributions made on behalf of such
Participant under the Plan and elective deferrals to any Related
Plan for the Participant s taxable year immediately following the
taxable year of the hardship distribution shall not exceed the
applicable limit under Code Section 402(g) for such next taxable
year reduced by the amount of such Participant's 401(k)
Contributions for the taxable year of the hardship distribution.
(b) Withdrawal at or after Age 59-1/2. Any Participant who
has attained age 59-1/2 may, upon written notice to the Management
Committee at least thirty (30) days prior to a Valuation Date,
elect to have a distribution of all or a portion of the vested
portion of his Employer Matching Contribution Account and his
401(k) Account valued as of such Valuation Date. Such distribution
shall be made in a lump sum as soon as reasonably possible after
such Valuation Date.
(c) Continued Participation. A Participant who receives a
distribution pursuant to Section 8.4(a) or (b) shall continue to
participate in the Plan in accordance with the provisions thereof.
8.5 Vested Interests.
(a) Notwithstanding Section 8.5(b), a Participant shall be
one-hundred percent (100%) vested in his Accrued Benefit if before
or on the date he has a Termination of Employment he attains his
Normal Retirement Date, incurs a Disability or dies.
(b) The vested portion of the Participant's Accrued Benefit
or vested Accrued Benefit equals the sum of:
(1) his 401(k) account;
(2) his Rollover Contribution Account; and
(3) with respect to his Employer Matching Contribution Account, a
percentage determined in accordance with the following schedule:
Years of Vesting Vested
Service Interest
---------------- --------
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
(c) (1) If a Participant has a Termination of Employment, then,
except as otherwise provided in Section 8.5(b), that portion of the
Participant's Account which is not vested as of his Termination of
Employment shall become a Forfeiture as of the end of the earlier
of the Plan Year in which the vested portion of the Participant's
Accrued Benefit is fully distributed or the Plan Year in which the
Participant has five consecutive one-year Breaks in Service. The
unvested portion of the Accrued Benefit of a Participant who has no
vested Accrued Benefit shall become a Forfeiture as of the end of
the Plan Year in which the Participant has a Termination of
Employment.
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(2) Until the unvested portion of the Accrued Benefit of a
Participant who has had a Termination of Employment becomes a
Forfeiture, it shall be held in a separate account for the
Participant.
(d) Return to Employment.
(1) If a Participant who has a Termination of Employment
resumes service with the Employer or a Commonly Controlled Entity
before having five consecutive one-year Breaks in Service, the
amount, if any, forfeited under Section 8.5(c) shall be reinstated
to the Participant's Employer Matching Contribution Account.
Thereafter, such Participant's vested interest n his Employer
Matching Contribution Account shall be equal to an amount
determined by subtracting the amount, if any, of the Employer
Matching Contribution Account distributed on or after the
Participant's Termination of Employment ("Distributed Amount") from
the product of (i) the Participant's vested percentage determined
under the applicable provision in this section 8.5, multiplied by
(ii) the sum of (A) the Distributed Amount and (B) the value of the
Participant's Employer Matching Contribution Account. Amounts which
must be reinstated pursuant to this Section 8.5(d)(1) shall, unless
contributed by the Employers, be reinstated
from Forfeitures in the Plan Year in which service
with an Employer or Commonly Controlled Entity is
resumed, and, to the extent such Forfeitures are less
than the amounts to be reinstated, as an expense of
the Trust in the plan Year in which service is resumed.
(2) If a Participant who had a Termination of Employment resume
service with an Employer or Commonly Controlled Entity after having
five consecutive one-year Breaks in Service, the amount, if any,
forfeited under Section 8.5(c) shall not be reinstated. If the
vested portion of the Employer Matching Contribution Account of a
Participant whose unvested portion is permanently forfeited
pursuant to this Section 8.5(1)(2) was not distributed before his
resumption of service and such Employer Matching Contribution
Account was not 100% vested upon the Participant's Termination of
Employment, then the vested portion of the Participant's Employer
Matching Contribution Account which was not distributed shall be
held in a Pre-Break Employer Matching Contribution Account which
shall be 100% vested; and such Participant's Employer Matching
Contributions and Forfeitures attributable to service after rehire
shall be held in a Post-Break Employer Matching Contribution
Account which shall be vested in accordance with this Section 8.5.
(3) A Participant who had a Termination of Employment and
resumes service with the Employer or a Commonly Controlled Entity
shall be subject to the rules with respect to Forfeitures under the
terms of the Plan as in effect upon his Termination of Employment.
8.6 Deduction of Tax from Amounts Payable. The Trustee may
deduct from the amount to be distributed such amount as the
Trustee, in his or its sole discretion, deems proper to protect the
Trustee and the Trust against liability for the payment of death,
succession, inheritance, income, or other taxes, and out of the
money so deducted, the Trustee may discharge any such liability and
pay the amount remaining to the Participant or his Beneficiary, as
the case may be.
8.7 Deadline for Payment of Benefits. Notwithstanding any other
provision herein, payment of a Participant's benefits shall be made
(unless the Participant elects otherwise) not later than sixty (60)
day after the latest of the close of the Plan Year in which (a) the
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Participant attains age sixty-five (65), (b) occurs the tenth
(10th) anniversary of the date on which the Participant commenced
participation in the Plan, and (c) the Participant had a determin-
ation of Employment, provided, however, payment of benefits shall
commence or be made not later than a Participant's Required Beginning
Date.
8.8 Facility of Payment. If a Participant or Beneficiary is
declared an incompetent or is a minor, and a conservator, guardian,
or other person legally charged with his care has been appointed,
any benefits to which such Participant or Beneficiary is entitled
shall be payable to such conservator, guardian, or other person
legally charged with his care.
If a Participant or Beneficiary is incompetent, is a minor, or,
in the opinion of the Management Committee would fail to derive
benefit from distribution of funds, and if a conservator, guardian,
or other person charged with his care has not been appointed, the
Management Committee, in its sole and exclusive discretion, may (a)
require the appointment of a conservator or guardian, (b)
distribute the Participant's Accrued Benefit to relatives of the
Participant or Beneficiary for the benefit of the Participant or
Beneficiary, or (c) distribute such Accrual Benefit directly to or
for the benefit of the Participant or Beneficiary.
The decision of the Management Committee in such matters shall
be final, binding, and conclusive upon the Employer and the Trustee
and upon each Employee, Participant, Beneficiary, and every other
person or party interested or concerned. An Employer, the Trustee
and the Management Committee shall not be under any duty to see to
the proper application of such payments made to a Participant,
conservator, guardian, or relatives of a Participant.
8.9 Spousal Consent to a Waiver. A spousal consent to the
Participant's naming of a Beneficiary other than his spouse shall:
(a) be in a writing acknowledging the effect of the consent;
(b) be witnessed by the Management Committee or a notary
public;
(c) be effective only for the spouse who executes the
consent; and
(d) designate a Beneficiary which may not be further changed
without spousal consent unless the spouse in such consent expressly
permits subsequent changes in Beneficiary without further consent
and acknowledges the spouse's right to limit the consent to a
specific beneficiary; provided that the consent of a Participant's
spouse shall not be required if it is established to the satisfaction
of the Management Committee that such consent may not be obtained
because there is no spouse because the spouse cannot be located or
because of such other circumstances as the Secretary of the Treasury
may by regulations prescribed and further provided that the Management
Committee may provide a spousal consent form which provides that such
consent once given is irrevocable.
8.10 Lump Sum Payment Without Election. Notwithstanding the
provisions of this Article to the contrary, if the Participant or
Beneficiary is entitled to a distribution other than for hardship
or attainment of age 59-1/2, and if the value of the Participant's
vested Accrued Benefit before the commencement of such distribution
does not exceed $3,500, the Management Committee shall direct the
immediate distribution of such vested Accrued Benefit, if any,
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regardless of any election or consent of the Participant, his
spouse, or other Beneficiary.
8.11 Form of Payment. A Participant's vested Accrued Benefit
payable under this Article shall be distributed in cash, or, to the
extent invested in OMC Stock, and at the Participant's election, in
OMC Stock.
8.12 Improper Payment of Benefits. The Management
Committee shall require reimbursement of any amount of payment
subsequently determined not to have been properly payable to a
Participant or Beneficiary.
8.13 Participant Loans.
(a) Upon proper application of a Participant, the Management
Committee shall grant a loan to such Participant in such amount as
the Management Committee shall determine, not less than $500 and
not exceeding, when added to all outstanding amounts loaned to the
Participant from the Plan and all Related Plans, the lesser of:
(1) $50,000, reduced by the excess (if any) of:
(A) the Participant's highest outstanding balance of
loans from the Plan and all Related Plans during the one-year
period ending on the day before the date on which such loan is
made, over
(B) the Participant's outstanding balance of loans
from the Plan and all Related Plans on the date on which such
loan is made; or
(2) 1/2 of the Participant's vested Accrued Benefit under this
Plan determined at the time of the application, but not less than
the lesser of $10,000 or 100% of the Participant's vested Accrued
Benefit.
(b) Any loan made under this Section 8.13 shall, by its
terms, be required to be repaid within five (5) years unless the
loan is used to acquire a dwelling unit which within a reasonable
time is to be used (determined at the time the loan is made) as a
principal residence of the Participant. All loans, except as
provided in the regulations prescribed by the Secretary of the
Treasury, shall be amortized over the term of the loan in
substantially level payments not less frequently than quarterly.
(c) The Management Committee may grant such loans and may
direct the Trustees to lend Trust assets to such Participant,
provided that such loans are available to all Participants on a
reasonably equivalent basis, are not made available to Highly
Compensated Employees in amounts greater than the amounts made
available to other Employees, bear a reasonable rate of interest,
and are adequately secured. Any loan will be paid from the
Participant's Rollover Contribution Account first, then from his
Employer Matching Account except to the extent that such Account is
invested in OMC Stock), then from his 401(k) Account (except to the
extent that such Account is invested in OMC Stock). Any such loan,
subject to the foregoing, shall be under such terms and conditions
as the Management Committee may in its sole discretion deem
appropriate. Such loan, and any interest with respect thereto shall
constitute a first lien upon the interest of such Participant in
the Accounts from which the loan is paid and shall, to the extent
that the loan lay be unpaid at the time the Participant's vested
accrued Benefit shall become payable, be deducted from the amount
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payable to such Participant or his Beneficiary at the time of
distribution of any portion of his vested Accrued Benefit. If the
loan is in an amount which, in the opinion of the Management
Committee, is greater than can be adequately secured by said lien
the Management Committee shall require that Participant to
otherwise provide adequate security for the loan. In the event that
a Participant fails to repay a loan according to its terms and
foreclosure occurs, the Plan may foreclose on the portion of the
Participant's Accounts which secure the loan and which would be
distributable to the Participant as of the earliest date he
Participant could elect distribution.
(d) The note representing the loan will be segregated in a
separate fund held by the Trustee as separate ear-marked investment
solely for the account of the Participant. A Participant's payments
to the Trust of principal and interest on a note held in such a
segregated fund shall be invested by the Trustee in accordance with
the investment election of the Participant as is in effect as of
the date of each such repayment as soon as reasonably practical.
The income and principal repayments of a Participant's loan shall
be allocated to the Participant's Accounts in an amount equal to
the product of the amount of income or principal, respectively,
attributable to a loan multiplied by a fraction, the numerator of
which is the amount of such Account invested in the loan at the
time the loan is disbursed and the denominator of which is the
total amount of the loan at the time it is disbursed. Prepayment of
the principal is permitted at any time without penalty.
ARTICLE IX
Administration
9.1 Board of Director Duties. The Board of Directors shall have
overall responsibility for the establishment, amendment,
termination, administration and operation of the Plan, which
responsibility it shall discharge by the appointment and removal
(with or without cause) of the members of the Management Committee,
to which is delegated the overall responsibility for the
administration and operation of the Plan, and for appointing,
supervising and terminating the Trustee and any Investment Manager
in accordance with the Trust Agreement.
9.2 Management Committee Membership. The Management Committee
shall consist of one (1) or more members, who shall be appointed by
the Board of Directors. In the absence of such appointment, if the
Trustee is one or more individuals, the Trustee shall serve as the
Management Committee and if the Trustee is not one or more
individuals, the Company shall serve as the Management Committee.
The members of the Management Committee shall remain in office at
the will of the Board of Directors, and the Board of Directors may
from time to time remove any of said member with or without cause
and shall appoint their successors. The Management Committee shall
have the general responsibility for the administration of the Plan
and for carrying out its provisions.
9.3 Management Committee Structure. Each member of the
Management Committee may (but need not) be an officer, director or
Employee of an Employer hereunder, a Participant or Beneficiary.
Each person upon becoming a member of the Management Committee,
shall file an acceptance thereof in writing with the secretary of
the Company and the secretary of the Management Committee. Any
member of the Management Committee may resign by delivering his
written resignation to the secretary of the Company and the
secretary of the Management Committee, and such resignation shall
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become effective upon the date specified therein. In the event of
a vacancy in membership, the remaining members shall constitute
the Management Committee with full power to act until said
vacancy is filled.
9.4 Management Committee Actions. The action of the Management
Committee shall be determined by the vote or other affirmative
expression of a majority of its members. Action may be taken by the
Management Committee at a meeting or in writing without a meeting.
The Board of Directors of the Company shall choose a chairman who
shall be a member of the Management Committee and a secretary who
may (but need not) be a member of the Management Committee. The
secretary shall keep a record of all meetings and acts of the
Management Committee and shall have custody of 11 records and
documents pertaining to its operations. Either the chairman or
secretary may execute any certificate or other written direction on
behalf of the Management Committee.
9.5 Management Committee Duties. The Management Committee on
behalf of the Participants and all other Beneficiaries of the Plan
and the Trust shall enforce the Plan and the Trust Agreement in
accordance with the terms of the Plan and the Trust Agreement and
shall have all powers necessary to accomplish that purpose,
including, but not by way of limitation, the following:
(a) To appoint and remove, as it deems advisable, a Plan
Administrator;
(b) To issue rules and regulations necessary for the proper
conduct and administration of the Plan and to change, alter, or
amend such rules and regulations;
(c) To construe the Plan and Trust Agreement;
(d) To determine all questions arising in the administration
of the Plan, including those relating to the eligibility of persons
to become Participants, the rights of Participants and their
Beneficiaries, and Employer contributions, and its decision thereon
shall be final and binding upon all persons hereunder;
(e) To compute and certify to the Trustee the amount and kind
of benefits payable to Participants or their Beneficiaries;
(f) To authorize all disbursements of the Trustee from the
Trust Fund in accordance with the provisions of the Plan;
(g) To employ and suitably compensate such accountants,
attorneys (who may but need not be the accountants or attorneys of
the Company), and other persons to render advice and clerical
employees as it may deem necessary to the performance of its
duties;
(h) To hear, review and determine claims for benefits;
(i) To exercise any rights, powers or privileges granted to
it by the terms of the Trust Agreement;
(j) To communicate the Plan and its eligibility requirements
to the Employees and notify Employees when they become eligible to
participate; and
(k) To make available to Participants upon request, for
examination during business hours, such records as pertain
exclusively to the examining Participant.
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9.6 Allocations and Delegations of Responsibility.
(a) The Board of Directors, the Management Committee and, if
the Trustee is one or more individuals, the Trustee, respectively,
shall have the authority to delegate, from time to time, by
instrument in writing filed in their respective minute books, all
or any part of their respective responsibilities under the Plan to
such person or persons as it may deem advisable (and may authorize
such person, upon receiving written consent of the delegating
entity, to delegate such responsibilities to such other person or
persons as tie delegating entity shall authorize) and in the same
manner to revoke any such delegation of responsibility. Any action
of the delegate in the exercise of such delegated responsibilities
shall have the same force and effect for all purposes hereunder as
if such action had been taken by the delegating entity. Any
Employer, the Board of Directors, the Management Committee and, if
the Trustee is one or more individuals, the Trustee shall not be
liable for any acts or omissions of any such delegate. The delegate
shall periodically report to the delegating authority concerning
the discharge of the delegated responsibilities.
(b) The Board of Directors, the Management Committee and, if
the Trustee is one or more individuals, the Trustee shall have the
authority to allocate, from time to time, by instrument in writing
filed in their respective minute books, all or any part of their
respective responsibilities under the Plan to one or more of their
respective members as they may deem advisable, and in the same
manner to revoke such allocation of responsibilities. Any action of the
member to whom responsibilities are allocated in the exercise of such
allocated responsibilities shall have the same force and effect for all
purposes hereunder as if such action had been taken by the allocating
entity. An Employer, the Board of Directors, the Management committee
and, if the Trustee is one or more individuals, the Trustee shall not be
liable for any acts or omissions of such member. The member to whom
responsibilities have been allocated shall periodically report to the
allocating authority concerning the discharge of the allocated
responsibilities.
9.7 Management Committee Bonding and Expenses. The members
of the Management Committee shall serve without bond (except as
otherwise required by federal law). A member of the Management
Committee who is receiving full-time pay from an Employer or
Commonly Controlled Entity as an Employee shall serve without
compensation for services is a member of the Management
Committee. Any other member of the Management Committee may
receive compensation for services as a member of the Management
Committee from the Employer, but may not receive such
compensation for services from the Plan. All expenses of the
Management Committee shall be paid by the Trust except to the
extent paid by an Employer.
9.8 Information to be Supplied by Employer. Each Employer shall
provide the Management Committee and the Trustee or their delegate
with such information as it shall from time to time need in the
discharge of its duties. The Management Committee and the Trustee
may rely conclusively on the information certified to it by an
Employer.
9.9 Records. The regularly kept records of the Management
committee, any Employer and, if the Trustee is one or more
individuals, the Trustee shall be conclusive evidence of the
service of a Participant, his compensation, his age, his marital
status, his statue as an Employee, and all other matters contained
therein applicable to this Plan; provided that a Participant may
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request a correction in the record of his age at any time prior to
retirement, and such correction shall be made if within 90 days
after such request he furnishes in support thereof a birth
certificate, baptismal certificate, or other documentary proof of
age satisfactory to the Management Committee.
9.10 Fiduciary Capacity. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
9.11 Plan Administrator. The Management Committee may appoint
a Plan Administrator who may (but need not) be a member of the
Management Committee; and in absence of such appointment, the
Management Committee shall be the Plan Administrator.
9.12 Management Committee/Plan Administrator Decisions Final.
The Management Committee and Plan Administrator have discretionary
authority to determine matters within their jurisdiction and the
decisions of the Management Committee and Plan Administrator shall
be final, binding and conclusive upon the Employers and the Trustee
and upon each Employee, Participant, former Participant,
Beneficiary and every other person or party interested or
concerned.
9.13 Company, Management Committee and Trustee as Agent. The
Company, the Management Committee and, if the Trustee is one or
more individuals, he Trustee, shall act as agent for each Employer
in the administration of the Plan.
9.14 Fiduciary Responsibility. If a Plan fiduciary acts in
accordance with ERISA, Title I, Subtitle B, Part 4,
(a) in determining that the Participant's spouse has
consented to the Participant's naming of a Beneficiary other than
his spouse or that the consent of the Participant's spouse may not
be obtained because there is no spouse, the spouse cannot be
located or other circumstances prescribed by the Secretary of the
Treasury by regulations, then o the extent of payments made
pursuant to such consent or determination, the Plan and its
fiduciaries shall have no further liability; or
(b) in treating a domestic relations order as being (or not
being) a Qualified Domestic Relations order (defined in Section
13.7), or, during any period in which the issue of whether a
domestic relations order is a Qualified Domestic Relations Order is
being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), in separately accounting for the
amounts ("Segregated Amounts" which would have been payable to the
alternate payee during such period if the order had been determined
to be a Qualified Domestic Relations Order, in paying the
Segregated Amounts (including any interest thereon) to the person
entitled thereto if within the 18-month period beginning with the
date on which the first payment would be required to be made under
the domestic relations order (the "18-Month Period") the domestic
relations order (or a modification thereof) is determined to be a
Qualified Domestic Relations Order, in paying the Segregated
Amounts (including any interest thereon) to the
person entitled thereto if there had been no order if within the
18-Month Period the domestic relations order is determined not to
be qualified or if the issue is not resolved within the 18-Month
Period and in prospectively applying a domestic relations order
which is determined to be qualified after the close of the 18-Month
Period, then the obligation of the Plan and its fiduciaries to the
Participant and each alternate payee shall be discharged to the
extent of any payment made pursuant to such acts.
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ARTICLE X
Claims Procedure
10.1 Initial Claim for Benefits. Each Participant or
Beneficiary ("Claimant") may submit his application for benefits
("Claim") to the Management Committee (or to such other person as
may be designated by the Management Committee) in writing in such
form as is provided or approved by the Management Committee. A
Claimant shall have no right to seek review of a denial of
benefits, or to bring any action in any court to enforce a Claim
prior to his filing a Claim and exhausting his rights to review
under Sections 10.1 and 10.2.
When a Claim has been filed properly, such Claim shall be
evaluated and the Claimant shall be notified of the approval or the
denial of the Claim within ninety (90) days after the receipt of
such Claim unless special circumstances require an extension of
time for processing the Claim. If such an extension of time for
processing is required, written notice of the extension shall be
furnished to the Claimant prior to the termination of the initial
ninety (90) day period, which notice shall specify the special
circumstances requiring an extension and the date by which a final
decision will be reached (which date shall not be later than one
hundred and eighty (180) days after the date on which the Claim was
filed). A Claimant shall be given a written notice in which the
Claimant shall be advised as to whether the Claim is granted or
denied, in whole or in part. If a Claim is denied, in whole or in
part, the notice shall contain (1) the specific reasons for the
denial, (2) references to pertinent Plan provisions upon which the
denial is based, (3) a description of any additional material or
information necessary to perfect the Claim and an explanation of
why such material or information is necessary, and (4) the
Claimant's rights to seek review of the denial.
10.2 Review of Claim Denial. If a Claim is denied, in whole or
in part, the Claimant shall have the right to (i) request that the
Management Committee (or such other person as shall be designated
in writing by tie Management Committee) review the
denial, (ii) review pertinent documents, and (iii) submit issues
and comments in writing, provided that the Claimant files a written
request for review with the Management Committee within sixty (60
days after the date on which the claimant received written
notification of the denial. Within sixty (60) days after a request
for review is received, the review shall be made and the Claimant
shall be advised in writing of the decision on review, unless
special circumstances require an extension of time for processing
the review, in which case the Claimant shall be given a written
notification within such initial sixty 60) day period specifying
the reasons for the extension and when such review shall be
completed (provided that such review shall be completed within one
hundred and twenty (120) days after the date on which the request
for review was filed). The decision on review shall be forwarded to
the Claimant in writing and shall include specific reasons for the
decision and references to Plan provisions upon which the decision
is based. A decision on review shall be final and binding on all
persons for all purposes.
If a Claimant shall fail to file a request for review in
accordance with the procedures herein outlined, such Claimant shall
have no rights to review and shall have no right to bring action in
any court and the denial of the Claim shall become final and
binding on all persons for all purposes.
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ARTICLE XI
Amendment and Termination of the Plan
11.1 Discontinuance of Contributions. It is the expectation of
the Company that it will continue the Plan and the payment of
contributions hereunder indefinitely, but the continuation of the
Plan and the payment of Employer Contributions hereunder is not
assumed as a contractual obligation of the Company or any other
Employer; and the right is reserved by the Company or any other
Employer at any time to reduce, suspend or discontinue its
contributions hereunder, provided, however, that the Employer
Contributions accrued or determined for any Plan Year shall not be
retroactively reduced, suspended or discontinued.
11.2 Amendments.
(a) The Company by resolution of the Board of Directors or
the Servicing Agent by resolution of its board of directors may
amend, modify, change, revise or discontinue the Plan or the Trust
Agreement, at any time; provided, that, except as provided in
Sections 6.4 and 7.13, no amendment shall (i) increase the duties
or liabilities of the Trustee, the Management Committee or the Plan
Administrator without written consent of the entity affected; (ii)
have the effect of vesting in any Employer any interest in any
funds, securities or other property subject to the terms of this
Plan and the Trust Agreement; (iii) authorize or permit at any time
any part of the corpus or income of the Trust Fund to be used or
diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries; or (iv) have any retroactive
effect as to deprive any Participant or Beneficiary of any benefit
already accrued; provided that no amendment made in conformance to
provisions of the Code, or any other statute relating to employee's
trusts, or any official regulations or rulings issued pursuant
thereto, shall be considered prejudicial to the rights of any
Participant or Beneficiary, or to have violated the provisions
hereof.
(b) If a person is not an Employee on or after the effective
date of any amendment to the Plan, the amendment shall be deemed as
having no effect on the amount of such person's benefits or other
rights under the Plan unless the amendment specifically provides
otherwise.
(c) The Management Committee shall have the same authority
with respect to the adoption of amendments to the Plan and the
Trust Agreement as the Company or Servicing Agent in the following
circumstances.
(i) to adopt amendments to the Plan or Trust which the
Management Committee determines are necessary or desirable for the
Plan to comply with or to obtain benefits or advantages under the
provisions of applicable tax, regulations or rulings or
requirements of the Internal Revenue Service or other government
administrative agency or of changes in such law, regulations
rulings or requirements; and
(ii) to adopt any other procedural or cosmetic amendment
that the Management Committee determines to be necessary or
desirable that does not materially change benefits to Participants
or their Beneficiaries or materially increase the Employers'
contributions to the Plan.
The Management Committee shall provide notice of amendments
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adopted by the Management Committee to the Employers on a timely
basis.
11.3 Plan Termination. Although it is the intention of the
Company that this Plan be permanent, the Company or the
Servicing Agent shall have the right to terminate the Plan and the
Trust at any time, by delivering to the Management Committee and to
the Trustee a written resolution signed on its behalf by an officer
of the Company and stating the fact of such termination.
11.4 Appointment of Servicing Agent. The Board of Directors, by
resolution, may in its discretion, delegate its right pursuant to
Section 11.2(a) to amend, modify, change, revise or discontinue the
Plan or the Trust Agreement, and its right pursuant to Section 11.3
to terminate the Plan and Trust to another entity which shill act
as Servicing Agent. The entity may within a reasonable time accept
or reject such appointment by resolution of its board of directors.
If the entity accepts such appointment as Servicing Agent, it
shall, in lieu of the Company, have the rights described in
Sections 11.2 and 11.3 until such time as the Servicing Agent, by
a resolution of its board of directors, or the Company, by
resolution of the Board of Directors, shall cancel such
appointment.
11.5 Payment Upon Termination. Upon termination of the Plan or
complete discontinuance of Employer Contributions hereunder, each
Participant's Accrued Benefit shall become fully vested. Upon a
partial termination of the Plan, the Accrued Benefit of each former
Participant who lost status as a Participant (or otherwise suffered
the partial termination) because of such partial termination shall
become fully vested. In the event of termination of the Plan and
after payment of all expenses and proportional adjustment of
accounts to reflect such expenses, fund losses or profits and
reallocation to the date of termination, except to the extent that
the Board of Directors shall otherwise direct, each Participant and
each Beneficiary of a deceased Participant shall be entitled to
receive his entire Accrued Benefit as soon as reasonably possible.
If such amounts are not immediately distributed, then continued
allocations of the net earnings, losses and expenses of the Trust.
11.6 Withdrawal from the Plan by an Employer. While it is not
the present intention of any Employer to withdraw from the Plan and
Trust Agreement, any Employer other than the Company may withdraw
from the Plan and Trust Agreement, under such terms and conditions
as the Board of Directors may prescribe, by delivery to the Trustee
and the Company of a resolution of its board of directors electing
to so withdraw.
ARTICLE XII
Top Heavy Provisions
12.1 Application. The definitions in section 12.2 shall apply
under this Article XII and the special rules in Section 12.3 shall
apply notwithstanding any other provisions of the Plan, for any
Plan Year in which the Plan is a Top Heavy Plan and for such other
Plan Years as may be specified herein.
12.2 Special Top Heavy Definitions. The following special
definitions shall apply under this Article XII.
(a) "Aggregate Employer Contributions" means the sum of all
Employer Contributions under this Plan allocated for a Participant
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to the Plan and employer contributions and forfeitures allocated
for the Participant to all Related Defined Contribution Plans in
the Aggregation Group.
(b) "Aggregation Group" means the group of plans in a
Mandatory Aggregation Group, if any, that includes the Plan, unless
inclusion of Related Plans in the Permissive Aggregation Group in
the Aggregation Group would prevent the Plan from being a Top Heavy
Plan, in which case "Aggregation Group" means the group of plans
consisting of the Plan and each other Related Plan in a Permissive
Aggregation Group with the Plan.
(i) "Mandatory Aggregation Group" means each plan
(considering the Plan and Related Plans) that, during the Plan Year
that contains the Determination Date or any of the four preceding
Plan Years,
(A) had a participant who was a Key Employee,
or
(B) was necessary to be considered with a plan
in which a Key Employee participated in order to enable the plan
in which the Key Employee participated to meet the requirements of
Section 401(a)(4) or Section 410 of the Code.
If the Plan is not described in (A) or (B) above, it shall no;
be part of a Mandatory Aggregation Group.
(ii) "Permissive Aggregation Group" means the group of
plans consisting of (A) the plans, if any, in a Mandatory
Aggregation Group with the Plan, and (B) any other Related Plan,
that, when considered as a part of the Aggregation Group, does not
cause the Aggregation
Group to fail to satisfy the requirements of Section 401(a)(4) and
Section 410 of the Code. A Related Plan in (B) of the preceding
sentence may include a simplified employee pension plan, as defined
in Code Section 408(k), End a collectively bargained plan, if when
considered as a part of the Aggregation Group such plan does not
cause the Aggregation Group to fail to satisfy the requirements of
Section 401(a)(4) and Section 410 of tie Code considering, if the
plan is a multiple employer plan as described in Code Section
414(f) or a multiple employer plan as described in Code Section
413(c), benefits under the plan only to the extent provided to
employees of the employer because of service with the employer and,
if the plan is a simplified employee pension plan, only the
employer's contribution to the plan.
(c) "Determination Date" means, with respect to a plan year,
the last day of the preceding plan year or, in the case of the
first plan year, the last day of such plan year. If the Plan is
aggregated with other plans in the Aggregation Group, the
Determination Date for each other plan shall be, with respect to
any plan year, the Determination Date for each such other plan
which falls in the same calendar year as the Determination Date for
the Plan.
(d) "Key Employee" means, for the Plan Year containing the
Determination Date, any person or the beneficiary of any person who
is an employee or former employee of an Employer or a Commonly
Controlled Entity as determined under Code Section 416(i) and who,
at any time during the Plan Year containing the Determination Date
or any of the four (4) Preceding Plan Years (the "Measurement
Period"), is a person described in paragraph (i), (ii), (iii) or
(iv), subject to paragraph (v).
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<PAGE> 49
(i) An officer of the Employer or Commonly Controlled
Entity who in any Measurement Period, is an officer during tie Plan
Year and has annual Compensation for the Plan Year in an amount
greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for the calendar year in which
such Plan Year ends ($98,064 in 1989, adjusted as determined in
accordance with regulations prescribed by the Secretary of the
Treasury or his delegate pursuant to the provisions of Section
415(d) of the Code).
No more than a total of fifty (50) persons (or, if lesser, the
greater of three (3) persons or ten
percent (10%) of all persons or beneficiaries of persons who are
employees or former employees) shall be treated as Key Employees
under this paragraph (i) for any Measurement Period. In the case of
an Employer or Commonly Controlled Entity which is not a
corporation:
(A) In any Measurement Period, in the case of a Plan Year
beginning on or before February 28, 1985, no persons shall be
treated as Key Employees under this paragraph (i); and
(B) In any Measurement Period, in the case of a Plan Year
beginning after February 28, 1985, the term "officer" as used in
this subsection (d) shall include administrative executives as
described ii Section 1.416-1(T-13) of the Treasury Regulations.
(ii) One (1) f the ten (10) persons who, during a Plan
Year in the Measurement Period:
(A) have annual Compensation from the Employer or a Commonly
Controlled Entity for such Plan Year greater than the amount in
effect under Section 415(c)(1)(A) of the Code for the calendar
year in which such Plan Year ends (the greater of $30,000 or one-
fourth (1/4) of the dollar limitation n effect under Section 415
of the Code adjusted as determined in accordance with regulations
(b)(1)(A) prescribed by the Secretary of the Treasure or his
delegate pursuant to the provisions (f Section 415(d) of the
Code); and
(B) own (or are considered as owning within the meaning of
Code Section 318) in such Plan Year, the largest percentage
interests in the Employer or a Commonly Controlled Entity, in
such Plan Year, provided that no person shall be treated as Key
Employee under this paragraph unless he owns more than one-half
percent (1/2%) interest in the Employer or a Commonly Controlled
Entity.
No more than a total of ten (10) persons or beneficiaries of
persons who are employees or former employees shall e treated as
Key Employees under this paragraph (ii) for any Measurement
Period.
(iii) A person who, for a Plan Year in the
Measurement Period, is a more than five percent (5%)
owner (or is considered as owning more than five percent (5%)
within the meaning of Code Section 318) of the Employer (r a
Commonly Controlled Entity.
(iv) A person who, for a Plan Year in the Measurement
Period, is a more than one percent (1%) owner (or is considered as
owning more than one percent (1%) within the meaning of Code
Section 318) of the Employer or a Commonly Controlled Entity and
has an annual Compensation for such Plan Year from the Employer and
Commonly Controlled Entities of more than $150,000.
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<PAGE> 50
(v) If the number of persons who meet the requirements
to be treated as Key Employees under paragraph (i) or (ii) exceed
the limitation on the number of Key Employees to be counted under
paragraph (i) or (ii), those persons with the highest annual
Compensation in 2 Plan Year in the Measurement Period for which the
requirements are met and who are within the limitation or the
number of Key Employees will be treated as Key Employees.
If the requirements of paragraph (i) or (ii) are met by a
person in X than one (1) Plan Year in the Measurement Period, each
person will be counted only once under paragraph (i) or (ii):
(A) under paragraph (i), the Plan Year in the
Measurement Period in which a person who was an officer and had
the highest annual Compensation shall be used to determine whether
the person mill be treated as a Key Employee under the preceding
sentence;
(B) under paragraph (ii), the Plan Year in the
Measurement Period in which the ownership percentage interest is
the greatest shall be used to determine whether the person will be
treated as a Key Employee under the preceding sentence.
Notwithstanding the above provisions of paragraph (v), a person may
be counted in determining the limitation under both paragraphs (i)
and (ii). In determining the sum of the Present Value of Accrued
Benefits for Key Employees under subsection (h) of this Section, the
Value Present of Accrued Benefits for any person shall be counted
only once.
(e) "Non-Key Employees" means a person or the beneficiary of a person
who, at any time during the Measurement Period, -as an account balance
in the Plan or an account balance or accrued benefit in any Related
Plan in the Aggregation Group and who is not a Key Employee.
(f) "Present Value of Accrued Benefits" means, for any Plan Year, an
amount equal to the sum of (i), (ii) and (iii) for each person who, in
the Plan Year containing the Determination Date, as a Key Employee or
a Non-Key Employee.
(i) Subject to (iv) below, the value of a person's
Accrued Benefit under the Plan and each Related Defined
Contribution Plan in the Aggregation Group, determined as of the
valuation date coincident with or immediately preceding the
Determination Date, adjusted for contributions due as of the
Determination Date, as follows:
(A) in the case of a plan not subject to the minimum funding
requirements of Section 412 of the Code, by including the amount
or of any contributions actually made after the valuation date but
on before the Determination Date, and, in the first plan year of a
plan, by including contributions made after the Determination Date
that are allocated as of a date in that first plan year; and
(B) in the case of a plan that is subject to the minimum
funding requirements, by including the amount )f any contributions
that would be allocated a; of a date not later than the
Determination Date, plus adjustments to those amounts as required
under applicable rulings, even though those amounts are not yet
required to be contributed or allocated (e.g., because they have
been waived) and by including the amount of any contributions
actually made (or due to be made) after the valuation date but
before the expiration )f the extended payment period in Section
412(c)(10) of the Code.
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<PAGE> 51
(ii) Subject to (iv) below, the sum of the actuarial
present values of a person's accrued benefits under each Related
Defined Benefit Plan in the Aggregation group, determined, for any
person who is employed by at Employer maintaining the Plan on the
Determination Date, expressed as a benefit commencing at Normal
Retirement Date (or the person's attained age, if later), and
further determined using the same method which is used for accrual
purposes under all
Related Defined Benefit Plans in the Aggregation Group, and if the
same method is not used for all Related Defined Benefit Plans then
as if such benefit accrued no more rapidly than at the slowest
permitted accrual rate under Code Section 411(b)(1)(C) determined
based (n the following actuarial assumptions:
(A) Interest rate 5%; and
(B) Mortality: 1984 Unisex Pension Table;
and determined in accordance with Code Section 416(g), provided,
however that if a Related Defined Benefit Plan in the Aggregation
Group provides for different or additional actuarial assumptions to
be used in determining the present value of accrued benefits
thereunder for the purpose of determining the top heavy status
thereof, then such different or additional actuarial assumptions
shall apply with respect to each Related Defined Benefit Plan in
the Aggregation Group
The present value of an accrued benefit for any person who is
employed b, an employer maintaining a plan on the Determination
Date is determined as of the most recent valuation ate which is
within a 12-month period ending on he Determination Date, provided
however that:
(A) for the first plan year of the plan, the present value
for an employee is determined as if the employee had a Termin-
ation of Employment (-) on -,he Determination Date or (2) on such
valuation date but taking into account the estimated accrued
benefit as of the Determination Date; and
(B) for the second and subsequent plan years of the plan, the
accrued benefit taken into account for in employee is not less
than the accrued benefit taken into account for the first plan
year unless the difference is attributable to using an estimate
of the accrued benefit as of the Determination Date for the first
plan year and using the actual accrued benefit as of the Deter-
mination Date for the second plan year.
For purposes of the paragraph (ii), the valuation date is the
valuation date used by the plan for computing plan cots for minimum
funding, regardless of whether a valuation is performed that year.
If the plan provides for a nonproportional subsidy as described
in Treasury Regulations Section 1.416-1(T-27), the present value of
accrued benefits shall be determined taking into account the value
of nonproportional subsidized early retirement benefits and
nonproportional subsidized benefit options.
(iii) Subject to (iv) below, the aggregate value of amounts
distributed from the Plan and each Related Plan in the Aggregation
Group during the Plan Year that includes the Determination Date or
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<PAGE> 52
any of the four preceding Plan Years including amounts distributed
under a terminated plan which, if it had not been terminated, would
have been in the Aggregation Group.
(iv) The following rules shall apply in determining the
Present Value of Accrued Benefits:
(A) Amounts attributable to qualified voluntary employee
contributions, as defined in Section 219(2) of the Code, shall be
excluded.
(B) In computing the Present Value of Accrued Benefits
with respect to rollovers or plan-to-plan transfers, the
following rules shall be applied to determine whether amounts
which have been distributed during the five (5) year period
ending on the Determination Date from or accepted into this Plan
or any plan in the Aggregation Group shall be included in deter-
mining the Present Value of Accrued Benefits:
(1) Unrelated Transfers accepted into the Plan or any plan
in the Aggregation Group after December 31, 1983 shall not be
included.
(1) Unrelated Transfers accepted on or before December 31,
1983 and all Related Transfers accepted at any time into the
Plan or any plan in the Aggregation Group shall be included.
(2) Unrelated Transfers made from the Plan of any plan in
the Aggregation Group shall be included.
(3) Related Transfers made from the Plan of any plan in the
Aggregation Group shall not be included by the transferor
plan (but shall be counted by the accepting plan).
The Accrued Benefit of any individual who has not performed
services for an Employer maintaining the Plan or from a Commonly
Controlled Entity maintaining a Related Plan in the Aggregation
Group at any time during the five (5) year period ending on the
Determination Date shall be excluded in computing he Present Value
of Accrued Benefits.
(g) "Related Transfer" means a rollover or a plan-to-plan
transfer which is either not initiated by the Employee or is made
between plans each of which is maintained by a Commonly Controlled
Entity.
(h) A "Top Heavy Aggregation Group" exists in any Plan Year
for which, as of the Determination Date, the sum of the Present
Value off Accrued Benefits for Key Employees under all plans in the
Aggregation Group exceeds sixty percent (60%) of the sum of the
Present Value of Accrued Benefits for all employees under all plans
in the Aggregation Group; provided that, for purposes of
determining the sum of the Present Value of Accrued Benefits for
all employees under all plans in the Aggregation Group, the--e
shall be excluded the Present Value of Accrued Benefits of any
Non-Key Employee who was a Key Employee for any plan Year preceding
the Plan Year that contains the Determination Date. For purposes of
applying the special rules herein with respect to a Super Top Heavy
Plan, a Top Heavy Aggregation Group will also constitute a "Super
Top Heavy AggrEgation Group" if in any Plan Year as of the
Determination date, the sum of the Present Value of Accrued
Benefits for key Employees under all plans in the Aggregation Group
exceeds ninety percent (90%) of the sum of the Present Value of
Accrued Benefits for all employees under all plans in the
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<PAGE> 53
Aggregation Group.
(i) "Top Heavy Plan" means the Plan in any Plan Year in which
it is a member of a Top Heavy Aggregation Group, including a Top
Heavy Aggregation Group consisting solely of the Plan. For purposes
of applying the rules herein with respect to a Super Top Heavy
Plan, a Top Heavy Plan will also constitute a "Super Top Heavy
Plan" if the Plan in any Plan Year is a member of a Super Top Heavy
Aggregation Group, including a Super Top Heavy Aggregation Group
consisting solely of the Plan.
(j) "Unrelated transfer" means a rollover or a plan-to-plan
transfer which is both initiated by the Employee and (a) made from
a plan maintained by a Commonly Controlled Entity to i plan
maintained by an employer which is not a Commonly Controlled Entity
or (b) made to a plan maintained by a Commonly Controlled Entity
from a plan maintained by an employer which is not a Commonly
Controlled Entity.
12.3 Special Top Heavy Provisions. For each Plan Year in which
the Plan is a Top Heavy Plan, the following rules shall apply,
except that the special provisions of this Section 12.3 shall not
apply with respect to any employee included in a unit of employees
covered by an agreement which the Secretary of Labor finds to be a
collective-bargaining agreement between employee representatives
and one or more Employers if there is evidence that retirement
benefits were the subject of good faith bargaining between such
employee representative and the Employer or Employers:
(a) Minimum Employer Contributions. In any Plan Year in which
the Plan is z Top Heavy Plan, the Employers shall make additional
Employer Contributions to the Plan as necessary for each
Participant who is employed on the last day of the Plan Year end
who is a Non-Key Employee to bring the amount of his Aggregate
Employer Contributions (excluding such Participant's Employer
401(k) Contributions and Employer Matching Contributions used for
purposes of determining the actual contribution percentage under
Section 5.4(c)) for the Plan Year up to at least three percent (3%)
of his Compensation, or if the Plan is not required to be included
in an aggregation group in order to permit a defined benefit plan
in the aggregation group to satisfy the requirements of Section
401(a)(4) or Section 410 of the Code, such lesser amount as is
equal to the largest percentage of a Key Employee's Compensation
allocated to the Key Employee as Aggregate Employer Contributions,
unless such Participant is a Participant in a Related Defined
Benefit Plan and receives a minimum benefit thereunder in
accordance with Section 416(c) of the Code in which case such
Participant shall not receive a minimum contribution under this
Section 12.3(a).
For purposes of determining whether a Non-Key Employee is a
Participant entitled to have minimum Employer Contributions made on
his behalf, a Non-Key Employee will be treated as a Participant
even if he is not otherwise a Participant (or accrues no benefit)
under the Plan because:
(i) he has failed to complete the requisite number of hours
of service (if any) after becoming a Participant in the Plan,
(ii) he is excluded from participation in the Plan (or
accrues no benefit) merely because his compensation is less than a
stated amount, or
(iii) he is excluded from participation in the Plan (or
accrues no benefit) merely because of a failure to make mandatory
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<PAGE> 54
employee contributions or,
if the Plan is a 401(k) plan, because of a failure to make elective
401 k) contributions.
(b) Vesting. For each Plan Year in which the Plan is a Top
Heavy Plan and for each Plan Year thereafter, the Participant's
vested Accrued Benefit shall continue to be determined under the
following schedule:
Years of Vesting Percentage
Service Vested
----------------- ----------
Less than 1 year 0%
More than 1 year but less than 2 years 20%
More than 2 years but less than 3 years 40%
More than 3 years but less than 4 years 60%
More than 4 years but less than 5 years 80%
5 years or more 100%
(c) Limitations. In computing the limitations under Section 6.4
hereof for years in which the Plan is a Top Heavy Plan, the special
rules of Section 416(h) of the Code shall be applied in accordance
with applicable regulations and rulings so that, ii determining the
denominator of the Defined Contribution P-an Fraction and the
Defined Benefit Plan Fraction, at each place at which 111.2511
would have been used, 111.0011 shall be substituted, unless the
Plan is not a Super Top Heavy Plan and the special requirements of
Section 416(h)(2) of tie Code have been satisfied.
(d) Transition Rile for a Top Heavy Plan.
Notwithstanding the provisions of Section 12.3(c), for each Plan
Year in which the Plan is a Top Heavy Plan and in which the Plan
does not meet the special requirements of Section 416(h)(2) of
this Code in order to use 1.25 in the denominator of the Defined
Contribution Plan Fraction and the Defined Benefit Plan Fraction,
if an Employee was a participant in one or more defined benefit
plans and in one or more defined contribution plans maintained by
the employer before the plans became Top Heavy Plans and if such
Participant's Combined Fraction exceeds 1.00 because of accruals
and additions that were made before the plans became Top Heavy
Plans, a factor equal to the lesser of 1.25 or such lesser amount
(but not less than 1.00) as shall be needed to make the Employee's
Combined Fraction equal to 1.00 shall be used in the denominator of
the Defined Benefit Plan traction and the Defined Contribution Plan
Fraction if there are no further accruals or annual additions under
any Top Heavy Plans until the Participant's Combined Fraction is
rot greater than 1.00 when a factor of 1.00 is used in the
denominators of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction.
Any provisions herein to the contrary notwithstanding, if the Plan
is a Top Heave, Plan and the Plan does not meet the special
requirements of Section 416(h)(2) of the Code in order to use 1.25
in tie denominator of the Defined Benefit Plan Fraction and the
defined Contribution Plan Fraction, there shall be no further
Annual Additions for a Participant whose Combined Fraction is
greater than 1.00 when a factor of 1.00 is used in the denominator
of the Defined Benefit Plan Faction and the Defined Contribution
Plan Fraction until such time as the Participant's Combined
Fraction is not greater than 1.00.
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<PAGE> 55
(e) Transition Rile for a Super Top Heavy Plan. Notwithstanding
the provisions of Sections 12.3(c) and 12.3(d), for each Plan Year
in which the Plan is a Super Top Heavy Plan, (1) if an Employee was
a participant in one or more defined benefit plans and in one or
more defined contribution plans maintained by the employer before
the plans became Super Top Heavy Plans, and (2) if such
Participant's Combined Fraction exceeds 1.00 because of accruals
and additions that were made before the plans became Super Top
Heavy Plans and if immediately before the plans became Super Top
Heavy Plans the Combined Fraction as then computed did not exceed
1.00, then a factor equal to the lesser of 1.25 or such lesser
amount (but not less than 1.00) as shall be needed to make the
Employee's Combined Fraction equal to 1.00 shall be used in the
denominator of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction if there are no further accruals or
annual additions under any Super Top Heavy Plans until the
Participant's Combined Fraction is not greater than 1.00 when a
factor of 1.00 is used in the denominators of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction. Any
provisions herein to the contrary notwithstanding, if the Plan is
a Super Top Heavy Plan, there shall be no further Annual Additions
for a Participant whose Combined Fraction is greater than 1.00 when
a factor of 1.00 is used in the denominator of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction until
until Participant's Combined Fraction is not greater than 1.00.
(f) Terminated Plan. If the Plan becomes a Top Heavy Plan
after it has formally been terminated, has ceased crediting for
benefit accruals and vesting and has been or is distributing all
plan assets to participants and their beneficiaries as soon as
administratively feasible or if the Plan has distributed all
benefits of participants and their beneficiaries, the provisions of
Section 12.3 shall not apply to the Plan.
(g) Frozen Plans. If the Plan becomes a Top Heavy Plan after
contributions have ceased under the Plan but all assets have not
been distributed to participants or their beneficiaries, the
provisions of Section 12.3 shall apply to the Plan.
ARTICLE XIII
Miscellaneous Provisions
13.1 Employer Joinder. Any Commonly Controlled Entity may, with
the approval of the Board of Directors and subject to such terms
and conditions as the Board of Directors may prescribe, adopt the
Plan and Trust Agreement.
13.2 Company Merger. In the event that a corporation or other
entity becomes a successor corporation to the Company or an
Employer, by merger, consolidation, purchase or otherwise, such
successor corporation ;hall be substituted hereunder for the
Company or the Employer,
13.3 Plan Merger. The Plan shall not merge or consolidate with,
or transfer any assets or liabilities to any other plan, unless
each Participant would receive a benefit immediately after the
merger, consolidation or transfer (if the Plan were then
terminated) which is equal to or greater than the benefit he would
have been entitled to immediately before the merger, consolidation,
or transfer (if the Plan were then terminated).
13.4 Indemnification. Each Employer shall indemnify and hold
harmless each member of the Board of Directors, each member of the
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<PAGE> 56
Management Committee, the Plan Administrator and, if the Trustees
are one or more individuals, the Trustees, and each officer and
employee of an Employer to whom are delegated duties,
responsibilities, and authority with respect to the Plan, from and
against all claims, liabilities, fines and penalties, and all
expenses reasonably incurred by or imposed upon him (including, but
not limited to, reasonable attorney fees) which arise as a result
of his actions or failure to act in connection with the operation
and administration of the Plan to the extent lawfully allowable and
to the extent that such claim, liability, fine, penalty, or expense
is not paid for by liability insurance purchased or paid for by an
Employer. Notwithstanding the foregoing, an Employer shall not
indemnify any person for any such amount incurred through any
settlement or compromise of any action unless the Employer consents
in writing to such settlement or compromise.
13.5 Unclaimed Amounts. Unclaimed amounts shall consist of the
amounts of the Account, of a Participant which cannot be
(3) which creates or recognizes the existence of an alternate
payees right to receive all or a portion of the Participants
Accrued Benefit under the Plan, and
(4) with respect to which the requirements of paragraphs (b)
and (c) are met.
(b) A domestic relations order can be a Qualified Domestic
Relations order only if such order clearly specifies:
(1) the name and the last known mailing address, if any,
of the Participant and the name and mailing address of each
alternate payee covered by the order,
(2) the amount or percentage of the Participant's
Accrued Benefit to be paid by the Plan to each such alternate
payee, or the manner in which such amount or percentage is to be
determined,
(3) the number of payments or period to which such
order applies, and
(4) each Plan to which such order applies.
(c) A domestic relations order can be a Qualified Domestic
Relations Order only if such order does not:
(1) require the Plan to provide any type or form of benefit,
or any option not otherwise provided under the Plan,
(2) require the Plan to provide increased benefits (determined
on the basis of actuarial value), or
(3) require the payment of benefits to an alternate payee
which are required to be paid to another alternate payee under
another order previously determined to be a Qualified Domestic
Relations Order.
(d) A domestic relations order shall not be treated as failing
to meet the requirements of Section 13.7(c)(1) solely because such
order requires that payment of benefits be made to an alternate
payee:
(1) in the case of any payment before a Participant has had a
Termination of Employment, on or after the earlier of:
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<PAGE> 57
(A) the date on which the Participant is entitled
to receive benefits under the Plan, or
(B) the later of (i) the date the Participant
attains age 50, or (ii) the earliest date on which
the Participant could begin receiving benefits
under the Plan if the Participant had a Termination
of Employment,
(2) as if the Participant had retired on the date on which
such payment is to begin under such order (but taking into account
only the present value of the benefits actually accrued and not
taking into account the present value of any employer subsidy for
early retirement) and
(3) in any form in which such benefits may be paid under the
Plan to the Participant (other than in the form of a qualified
joint and survivor annuity with respect to tie alternate payee and
his or her subsequent spouse.
(e) To the extent provided in any Qualified Domestic
Relations Order, the former spouse of a Participant shall be
treated as the surviving spouse of such Participant for purposes
of consenting to the naming of another Beneficiary to the extent
provided in Section 8.3 and 8.9, and the current spouse shall not
be so treated unless such former spouse dies prior to tie annuity
starting date.
13.8 Contract of Employment. Nothing contained herein shall be
construed to constitute a contract of employment between an
Employer and any Employee.
13.9 Source of Benefits. All benefits payable under the Plan
shall be paid or provided for solely from the Trust and the
Employers assume no liability or responsibility therefore.
13.10 Employees' Trust The Plan and Trust are created for the
exclusive purpose of providing benefits to the Participants in the
Plan and their Beneficiaries and defraying reasonable expenses of
administering the Plan and Trust. The Plan and Trust shall be
interpreted in a manner consistent with their being a Plan
described in Section 401(a) of the Code and a Trust exempt under
Section 501(a) of the Code. At no time shall the Trust Fund be
diverted from the above purpose.
13.11 Gender and Number. Except when the context indicates to
the contrary, when used herein, masculine terms shall be deemed to
include the feminine, and singular the plural.
13.12 Headings. The headings of Articles and Sections are
included solely for convenience of reference, and if there is any
conflict between such headings and the text of this Plan, the text
shall control.
13.13 Uniform and Non-Discriminatory Application of
Provisions. The provisions of this Plan shall be interpreted and
applied in a uniform and non-discriminatory manner with respect to
all Participant;, former Participants, and Beneficiaries.
13.14 Invalidity of Certain Provisions. If any provision of
this Plan shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof
and the Plan shall be construed and enforced as if such
provisions, to the extent invalid or unenforceable, had not been
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<PAGE> 58
included.
13.15 Law Governing. The Plan shall be construed and enforced
according to the laws of Illinois other than its laws with respect
to choice of law, to the extent not preempted by ERISA.
Executed this 28th day of September 1989.
OMCCC INC
BY: ________________________________
ATTEST:
FOUR WINNS
BY: _________________________
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9117e(2)
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