<PAGE> 1
As filed with the Securities and Exchange Commission on October 14, 1994
Registration No. 33-
Washington, D. C. 20549
SECURITIES AND EXCHANGE COMMISSION
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)
Outboard Marine Corporation Employees Stock Ownership and
Tax Deferred Savings 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 355,000 $22.5625 $8,009,687.50 $2,761.74
par value $.15
per share
Preferred
Purchase Rights)
(1) Together with an indeterminate number of additional shares which may be
necessary 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 Outboard Marine Corporation Employees
Stock Ownership and Tax Deferred Savings Plan (the "Plan") and are not required
to be filed with the Commission as a part of the Registration 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 Securities Exchange 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) Outboard Marine Corporation Employees Stock Ownership and Tax Deferred
Savings 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
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
Registrant 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
as Exhibit 5.1).
24.2 Consent of Arthur Andersen & Co.
25.1 Powers of Attorney.
28.1 Outboard Marine Corporation Employee Stock Ownership and
Tax Deferred Savings Plan as Amended
Item 9. Undertakings.
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 effect-
ive date of the registration statement (or the most recent post-effective amend-
ment thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any mat-
erial change to such information in the registration statement; provided, how-
ever, that paragraphs (i) and (ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13 or section 15(d)
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of the Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) 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 Regis-
trant's annual report pursuant to Plan's annual report pursuant to section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(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
Registrant 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 and is, there-
for, 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 10
(included in the opinion filed
on Exhibit 5.1).
24.2 Consent of Arthur Andersen & Co. 9
25.1 Powers of Attorney (included as 7
part of the signature page hereto).
28.1 Outboard Marine Corporation Employee 11
Stock Ownership and Tax Deferred
Savings Plan as Amended
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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 sub-
stitution 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 amend-
ments to this registration statement and to file the same, with all exhibits
thereto, and other documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this regis-
tration 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
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Date October 7, 1994 J. WILLARD MARRIOTT, JR. Director
------------------------
J. Willard Marriott, Jr.
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 reports dated June 3, 1993
included (or incorporated by reference) in Outboard Marine Corporation's Form
10-K for the year ended September 30, 1993 and to all references to our Firm
included in this registration.
ARTHUR ANDERSEN LLP
-------------------
Arthur Andersen LLP
Milwaukee, Wisconsin
October 7, 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: Outboard Marine Corporation Employees Stock Ownership and Tax Deferred
Savings 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" pursuant
to the Outboard Marine Corporation Employees Stock Ownership and Tax Deferred
Savings Plan (the "Plan") to eligible employees of the Registrant and partici-
pating 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. The Common Stock, when issued by the Registrant in accordance with the
Registration Statement, will be validly issued, fully paid and non-
assessable.
3. Interests in the Plan acquired by eligible employees are and will
continue to be valid and enforceable.
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
requirements for tax qualification.
3. As of the date hereof, the provisions of the Plan and Trust, the written
documents which constitute the Plan, comply with the provisions of Title I
of ERISA applicable thereto and we have no reason to believe that the
Internal Revenue Service 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 Registration
Statement referred to above.
Respectfully submitted,
OUTBOARD MARINE CORPORATION
D. JEFFREY BADDELEY
- -------------------
D. Jeffrey Baddeley
Vice President and
General Counsel
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OUTBOARD MARINE CORPORATION
EMPLOYEE STOCK OWNERSHIP AND TAX
DEFERRED SAVINGS PLAN
ARTICLE I.
Amendment Restatement
1.1 Amendment and Restatement. The Outboard Marine Corporation Employees
Stock Ownership and Tax Deferred Savings Plan, as amended and restated effective
October 1, 1984, and further amended, effective January 1, 1989, is hereby
amended and restated, effective October 1, 1988. It is intended that the Plan
shall qualify under Sections 401(a) and 401(k) of the Code. It is further
intended that part of the Plan shall continue to qualify as a tax credit
employee stock ownership plan under Section 409 of the Code and pursuant to
which certain assets of the Plan may be invested primarily in employer
securities, as defined in Section 409(1) of the Code.
The provisions of the Plan as herein amended and restated shall apply to
persons who are Employees on or after October 1, 1988. Eligibility for benefits
and the amount of benefits, if any, payable to an Employee who has had a
Termination of Employment prior to October 1, 1988 and who has not been rehired
shall be determined in accordance with the provisions of the Plan in effect of
the date of the Termination of Employment, except as otherwise specifically
provided.
ARTICLE II.
Definitions
When used herein the following words shall have the following meanings
unless the context clearly indicates otherwise.
2.1 "Accounts" means a Participant's share in the Trust. Each Participant
shall have the following separate Accounts which shall be reduced by any
distributions therefrom:
Employer Matching Contributions, made to the Plan in accordance with Section
4.1, Minimum Employer Contributions made to the Plan in accordance with Section
12.3(a), an Forfeitures plus income and gains and less expenses and losses
attributable thereto. To the extent required by the provisions Section 8.5(d),
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 and Special Employer Contributions made to the
Plan in accordance with Sections 4.2 and 4.1, plus income and gains and less
expenses and losses attributable thereto.
(c) A "Rollover Contribution Account" to which shall be credited a Partic-
ipant's Rollover Contributions made to the Plan in accordance with Section 4.6,
plus income and gains and less expenses and losses attributable thereto.
(d) An "ESOP Contribution Account" to which shall be credited ESOP
Contributions with respect to Compensation paid or accrued prior to January 1,
1987, plus income and gains and less expenses and losses attributable thereto.
(e) An "Investment Account" to which shall be credited amounts determined
pursuant to Section 7.12, plus income and gains and less expenses and losses
attributable thereto.
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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 3.3 and 3.4.
2.4 "Authorized Leave of Absence" means any absence authorized by an
Employer under the Employer's standard personnel practices. 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.
2.6 "Beneficiary Designation Form" means the form provided or permitted
8.3(c), may (a) designate his Beneficiary, (b) select the form of the
Beneficiary's benefit and (c) elect to permit his Beneficiary to change the
form of tie Beneficiary's benefit.
2.7 "Board of Directors" means the board of directors of the Company.
2.8 "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.
2.9 "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 414(o) of the
Code; provided however, for purposes of 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%".
2.10 "Company" means Outboard Marine Corporation or any successor corporation
by merger, consolidation, purchase, or otherwise.
2.11 "Company Stock" means the common stock of the Company which is an
Employer Security as defined in Section 409(1) of the Code, except as other
wise provided herein, and which is not subject to a put, call, or other option
or buy-sell or similar agreement other than as specified by the Plan while held
by or when distributed from the Plan.
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
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.
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(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 and, 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.
(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.
Effective with respect to Plan Years beginning on or after January 1, 1989, 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) except
for purposes of Section 6.4 and except for purposes of determining Highly
Compensated Employees under Section 2.24.
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
2.14 "Effective Date" means October 1, 1988.
2.15 Eligible Employee" means any Employee employed by an Employer, ex-
cluding any Employee who is a member of 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 any 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 401(k) Contributions" made pursuant to Section 4.2(a);
(c) "Special Employer Contributions" made pursuant to Section 4.3(a); and
(d) "Minimum Employer Contributions" made pursuant to Section 12.3(a).
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2.19 "Entry Date" means October 1, January 1, April 1, and July 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.
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 he 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) ("5% 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 than 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 the paragraph
(d) 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 Controlled Entities shall be treated as a Highly
Compensated Employee for such Plan Year.
(e) For purposes of determining the total number of persons employed (b)
the Company and Commonly Controlled Entities under Section 2.24(c) or (d), the
(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,
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(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 of 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 member of the
group consisting of the one hundred (100) employees of the Company and Commonly
Controlled Entities aid 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 ascendants or descendants, or any spouse of such lineal
ascendants 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:
(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 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
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<PAGE> 16
performance of duties shall be determined in accordance with the provisions of
Labor Department Regulations Section 2530.200b-2(b), and Hours of Service shall
be credited to computation periods in accordance with the provisions of Labor
Department Regulations Section 2530.200b-2(c).
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.
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 could 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 commences and if such Parental Leave continues into a
subsequent Plan Year, the Hours of Service shall be credited to the
subsequent Plan Year.
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 "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 place-
ment 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 Man-
agement Committee such timely information as may reasonably be required to est-
ablish that the absence from work was for one of the reasons specified in this
Section and 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.
2.29 "Participant" means an Eligible Employee participating in the Plan as
2.30 "Plan" means the Outboard Marine Corporation Employees Stock Ownership
and Tax Deferred Savings Plan, as set forth herein and as from time to time
amended.
2.31 "Plan Administrator" means the person, persons or group appointed to
act as Plan Administrator under Section 8.11, and in the absence of such
appointment, the Management Committee.
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2.32 "Plan Year" means each twelve-month period beginning on October 1 and
ending on September 30.
2.33 "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.",
2.34 "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 reached 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 7 -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 the 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 he reaches
age 70-1/2, the "Required beginning Date" for such Participant shall be the
April of the calendar year following the calendar year in which such Plan
Year ends; provided, however, that if a Participant attained age 70-1/2
during 1988 is not a 5% owner, and had not retired by January 1, 1989 the
Participant's Required Beginning Date shall be April, 1990.
Section 402(a)(5), Section 403(a)(4), or Section 408(d)(3) of the Code.
2.36 "Termination of Employment" means (a) a resignation by an Employee for
any reason, (b) a dismissal of an Employee for
any reason, (c) death o] 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.
2.37 "Trust" means he trust established and maintained for the purposes of
the Plan which is administered by the Trustee in accordance with the
revisions of the Trust Agreement.
2.38 "Trust Agreement" means the agreement between the Company and the
Trustee as from time to time amended.
2.39 "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.
2.40 "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.
2.41 "Valuation Date" means
(a) for all purposes under the Plan other than those described in Section
2.41(b), March 31, June 30, September 30 and December 31, and
(b) with respect to any ESOP Contribution Account or any other amounts
invested in Company Stock, the last day of each Plan Year, and such additional
dates as the Management Committee shall deem appropriate including different
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<PAGE> 18
dates for different investment funds.
2.42 "Year of Vesting Service" means a Plan Year in which the Participant
is credited with at least 1,000 Hours of Service.
ARTICLE III.
3.1 Participation. Each Eligible Employee who was a Participant in the
Plan on the day before the Effective Date
accordance with the terms hereof. Each Eligible Employee who was an Eligible
Employee on 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 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 reason-
able 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 following the Entry Date coinciding with or next
following the date 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 Termin-
ation 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 following the Entry Date coinciding with
or next following the date he again becomes a Participant.
Contributions
4.1 Employer-Matching Contributions.
(a) Employer Matching Contributions. 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.
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<PAGE> 19
(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 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 (a) 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
reduced 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-five percent (25%)
of his Compensation (in increments of one percent (1%)) (except that, prior
to January 1, 1989, the maximum shall be nineteen percent (19%)) 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-five
percent (25%) the maximum percentage b) which a Highly Compensated Employee
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 pro rata portion of said amount for any partial Plan Year or calendar year
of contributions. Notwithstanding the foregoing, the Employer 401(k)
Contributions of any Active Participant for any calendar year shall not exceed
$7,627 (in 1989), adjusted in subsequent years are determined in accordance
with regulations or rulings prescribed by the Secretary of Treasury or his
delegate pursuant to the provisions of Section 415(d) of the Code and increased
in accordance with the provisions of Elections 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
further 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())
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.
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 year 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 amount (if any) as
the Management Committee may determine.
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<PAGE> 20
(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
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, change or revocation. An election or change in a
Participants 401(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 Participant's 401(k) Election may be made at any time and shall be
effective immediately or at such later date as the Participant shall
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.l, 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 may deem reasonable. Prior to the acceptance of a Rollover
Contribution, the Management Committee may requite the submission of
evidence so that it
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 shall be a Participant solely for the purpose of making aid
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 Contribution. 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
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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 401(k) Contributions. Notwithstanding the provisions
of Section 4.2, 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.; to the
contrary, (1) an Active Participant's Employer 401(k) Contributions under
the Plan
Related Plan for any calendar year shall not exceed $7,627 (in 1989, adjusted
in subsequent years as determined n 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 deem 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 Participant's Employer
401(k) Contributions, (2) any elective deferrals ( s defined in Section
402(g) of the Code) under a Relate Plan, and (3) other elective deferrals
(as define in Section 402(g) of the Code) exceeds $7,627 (in 1 89, adjusted
in subsequent years as determined in accordance with regulations prescribed
by the Secretary of Treasurer, or his delegate, and increased in accordance
with the provisions of Sections 402(g)(4) and 402(g)(8) of the Cod., 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 tie 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 Section 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 of 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).
Distribution. Income for the period between the end of a calendar year
and the date of a distribution shall equal the product of the number of
months which he elapsed since the end of the preceding calendar year
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<PAGE> 22
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 Deferral Percentages. For any Plan Year, Section 401(k)(3)
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:
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<PAGE> 23
(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 (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
non-elective 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 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 Committee's determination of allowable Employer 401k
Contribution for 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
of 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 than 12 months
following the close of the Plan Year in which the reduced 401(k)
Contributions were deferred 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.
(e) Aggregation Rules. Notwithstanding the foregoing provisions in this
Section 5.4 to the Section 5.3, if a Related Plan which contains a cash or
deferred arrangement and he Plan are treated as one plan for purposes of
Section 401(a)(4) or
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410(b) of the Code, such plans shall be treated as one arrangement under
this Section 5.3, and that if a Highly Compensated Employees 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 amounts under subsection (1) above. For this purpose,
distribution made on or before the 15th day of a month shall be deemed to
have been made on the last date 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 caused to comply with
the requirements of Section 401(m) of the Code. The requirements of Section 401
(m) of the Code are as follows:
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.
(b) Section 401(m) Contributions. "Section 401(m) Employer Matching
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
Contributions, or the qualified nonelective contributions (as defined in Section
401(m)(4)(C) of the Code) made under any Related Plan and (2) all or any portion
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<PAGE> 25
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 extend 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) 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 such 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 and limitations as it may
deem appropriate to insure that Section 401(m) Contributions herein. If the
Management Committee determines that it is necessary or desirable, the
Management Committee may 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 Pan Year shall be reduced under the
following leveling method: the Employer Matching Contributions and, if necessary
the matched Employer 401(k) Contribution With respect thereto and the un-
matched 401(k) Contribution of 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 percentage to
equal that of the Highly Compensated Employ with the next highest average contr-
ibution 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.
(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 treated as one plan for
purposes of Code Section 401(a):4) or Code Section 410(b), such plans shall
be treated as one arrangement under this Section and further provided that
if a Highly Compensated Employee is a participant under any Related Plan to
which matching 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.
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 allowable to each of a
Participant's respective Accounts to which his
Section 401(m) Contributions for the Plan Year
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<PAGE> 26
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 for Period Between End of Plan Year
and Distribution. Income for the period between
the end of a Plan Bar 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 n the first day of the next month.
5.5 Multiple Use of Section 5.3 and Section 5.4.
Notwithstanding Section J.3 and Section 5.4, the sum of the actual deferral
percentages 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) tie 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
(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
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 limitations as it may deem appropriate to insure that the above
limitations are met.
If the Management Committee de ermines that the reduction or disallowance of
401(k) contributions or Employer Matching Contributions is necessary or
desirable with respect to Highly Compensated Employees, he 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 made 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
of the Plan Year, Employer Matching Contributions shall be allocated to
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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 n t Highly
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 Contribution. Any of the provisions herein t) 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 hi; 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 on
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 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
in Section 6.4(b)(2)(B), contributions
allocated to any individual medical account
established for the Participant, which is part
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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) for the
Participant; provided however that the
limitation in Section 6.4(b)(2)(A) shall not
apply to any amounts treated as an Annual
Addition under this Section 6.4(b)(1)(E).
Rollover Contributions to the Plan shall not be included as a part of the
Participant's Annual Additions. Employer Contributions 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 by 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 and
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.
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<PAGE> 29
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 the Plan Year shall be held, subject to the
limits of this Section 6.4, in a suspense account and
allocated in the subsequent Plan Year prior to making any
Employer Contributions in any subsequent Plan Year. On Plan
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 be 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 15(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 in which he
participates to the extent provided therein and (b)
second, by reducing the Participant's Annual Additions
to the extent necessary to reduce the Combined Fraction
of such Participant to 1.0.
(e) 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.
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<PAGE> 30
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
Participants and their Beneficiaries, except as otherwise provided in Sections
6.4 and 7.14.
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 Fun 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
contracts) 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) Company Stock Fund Effective at such time as determined
by the Management Committee, such Investment Fund providing
for investments (excluding amounts held in the Rollover
Contribution Account) in Company Stock in accordance with
the direction of individual Participants, provided that the
Trustee may, in its discretion temporarily hold a portion of
the Fund in cash or short-term liquid investments, pending
investment or reinvestment or pending distribution of
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<PAGE> 31
benefits.
(b) Participant Elections
(1) 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 as 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 invest-
ment election, his Accounts shall be invested in the
Investment Fund designated from time to time by the
Management Committee.
(2) Notwithstanding the provisions of the Plan to the
contrary, except for the provisions of Section 7.12
and 8.7, each Participant's ESOP Contribution Account
shall be invested in the Company Stock Fund, and such
Account shall remain invested in the Company Stock Fund
and shall not be subject to Participant investment
elections unless the Participant is otherwise entitled to
a distribution of such Account pursuant to Section 8.8.
(c) Limitations on Participant Elections to
Investment in Company Stock.
Notwithstanding any provisions herein to the contrary,
a Participant's investment in Company Stock is limited
to twenty-five percent (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 valued as of the Valuation Date
with respect to Company 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 Contribution Account balances may,
respectively, be invested in Company Stock.
(d) Limitations on Investment Elections of Officers
or Directors. The Management Committee may, in such
manner as it deems appropriate, restrict the investment
of any Participant who is a officer or director
(for purposes of Section 16 of the Securities Exchange
Act of 1934) of the Company in Company Stock under the
Plan if the Management Committee in its sole discretion
determines that such investment is a non-exempt pur-
chase or sale for purposes of Section 16 of the Secur-
ities 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.
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<PAGE> 32
7.8 Trust Income. As of each applicable 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
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.
(2) Notwithstanding the provisions of the Plan to the contrary, except for
the provisions of Section 7.12 and 8.7, each Participant's ESOP Contribution
Account shall be invested in the Company Stock Fund, and such Account shall
remain invested in the Company Stock Fund and shall not be subject to
Participant investment elections unless the Participant is otherwise
entitled to a distribution of such Account pursuant to Section 8.8.
(c) Limitations on Participant Elections to Investment in Company Stock,
Notwithstanding any provisions herein to the contrary, a Participant's
investment in Company Stock is limited to twenty-five percent (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 valued as of the Valuation Date with respect to Company 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 Contribution Account
balances may, respectively, be invested in Company Stock.
(d) Limitations on Investment Elections of Officers or Directors. The
management Committee may, in such manner as it deems appropriate,
restrict the investment of any Participant who is ;n officer or director
(for purposes of Section 16 of the Securities Exchange Act of 1934) of the
Company in Company 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 applicable 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 accumulated 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 of the Company Stock Fund among the
sum of (a) all Participants' Accounts invested in such Pooled Investment Fund
and the Company Stock Fund, plus (b) the suspense account maintained under
Section 6.4(c) if invested in such Pooled Investment Fund, which sum shall be
valued as of tie 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 respective Pooled Investment Fund or Company Stock Fund multiplied by a
fraction, the numerator of which s the balance of such Account invested in such
Pooled Investment Fund or Company Stock Fund as of the preceding Valuation Date
(reduced by any distributions therefrom since the preceding Valuation Date) and
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<PAGE> 33
the denominator of which is the total value of all Accounts invested in such
Pooled Investment Fund or Company Stock Fund as of the preceding Valuation Date
(reduced by any distributions therefrom since the preceding Valuation Date);
provided however that for the purpose of allocating such income as of the first
Valuation Date, the numerator and denominator of the preceding fraction shall
be determined by using Account balances as of the first Valuation Date after all
contributions are credited thereto and before income is allocated as provided
in this Section.
For purposes of the preceding sentence an amount equal to one-half (1/2) of
Employer 401(k) Contributions made between the preceding Valuation Date and the
current Valuation Date and which has not been distributed since the preceding
Valuation Date shall be treated as if it were in the 401(k) Account on the
preceding Valuation Date.
7.9 Acquisition and Holding of Company Stock. The Trustee is authorized to
invest 100% of the assets of the Trust Fund in Company Stock, as directed by
Participants and provided that all ESOP Contribution Accounts shall be invested
in Company Stock subject to the provisions of this Article VII and Section 8.8.
7.10 Purchase or Sale of Company Stock. The Trustee, on behalf of the Plan,
may acquire Company Stock from, or sell Company 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 Company Stock. At such time and in such manner as the Manage
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 of Company 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 Company 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 Diversification of Investments.
(a) Election by Qualified Participant. A Qualified Participant (as defined
below) shall be permitted to direct the transfer of an amount equal to twenty-
five percent (25%) of the value of such Qualified Participant's ESOP
Contribution Account balance attributable to Company Stock acquired by, or
contributed to, the Plan after December 31, 1986, if any, reduced by (1)
Company Stock acquired by the Plan after December 31, 1986 (i) with
contributions made to the Plan on or before December 31, 1986, or (ii) with
earnings or dividends paid in cash to the Plan on or before December 31, 1986
or (2) the number of such shares already transferred pursuant to this Section
7.12 to such Participant's Investment Account during each Annual Election
Period (as defined below) before the Participant's last Annual Election Period.
Within a Qualified Participant's last annual Election Period, the Participant
may direct the Plan to transfer to his Investment Account an amount equal to
fifty percent (50%) of the value of the Participant's ESOP account balance
attributable to Company Stock acquired by the Plan after December 31, 1986
reduced as described above and by the number of such shares already
transferred pursuant to this Section 7.12. Within 90 days after the Annual
Election Period during which the Participant makes such an election the
applicable amount shall be transferred to the Participant's Investment
Account subject to the provisions of Section 7.12(c) below.
(b) Determination of Amount Subject to Diversification Requirements.
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<PAGE> 34
The portion of the balance of a Participant's ESOP Contribution Account
attributable to Company Stock which was acquired by the Plan after December 31,
1986, shall be determined by multiplying the number of shares of Company Stock
held in the Participant's ESOP Contribution Account increased by the number of
such shares already transferred pursuant to this Section 7.12 by a fraction,
the numerator of which is the number of shares of Company Stock acquired by
the Plan after December 31, 1986, and allocated to all Participants' ESOP
Contribution Account and the denominator of which is the total number of shares
held in all participants' ESOP Contribution Account on the date the individual
becomes a Qualified Participant.
(c) Investment Elections or Distribution of Amounts Transferred to the
Participant's Investment Account. Notwithstanding anything contained herein
to the contrary, a Qualified Participant shall have the right to elect, on such
forms and in accordance with rules and procedures as the Management Committee
may establish, to have the amounts in his Investment Account invested in at
least three (3) Investment Funds which may be established by the Management
Committee pursuant to Section 9.5(1) ("Investment Options") provided, however,
f the Management Committee does not establish Investment Options pursuant to
this Section 7.12, the amount the Participant elects to transfer to his Invest-
ment Account Pursuant to Section 7.12(a) shall, at the Participant's election,
be distributed to the Participant within 10 days after the Annual Election
Period during which the Participant elected to transfer such amount. If the
Committee establishes Investment Options, such Investment Options shall meet
the requirements of Section 401(a)(28) if the Code and shall be consistent
with regulations prescribed by the Secretary of the Treasury 401(a)(28) of the
Code.
The Participant's election as to the percentage of the Investment Account to be
invested in each investment shall be made in increments of ten percent (10%)
up to one hundred percent (100%). The Participant's investment election shall
remain effective until such time as the Participant files a new investment
election and it becomes effective or until the Participant ceases to be a
participant.
(d) "Qualified Participant" means a Participant who has attained age 55
and completed at least 10 years of participation in the Plan.
(e) "Annual Election Period" means the 90 day period after the last day
of each Plan Year in the Participant's Qualified Election period.
(f) "Qualified Election Period" means the six Plan Year period beginning
with the Plan Year in which the Participant first becomes a Qualified
Participant.
7.13 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 a 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.
7.14 Right of the Employers to Trust Assets. 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
Participants or their Beneficiaries and for fraying 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
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<PAGE> 35
not initially so qualify, Employer 4101(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, Employees 401(k) Contributions
conditioned on deductibility shall be distributed to the appropriate
Participant and other Employer Contributions conditioned upon deductibility
shall be returned to 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) Contribution 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 shall 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 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 than his surviving spouse with his spouse's consent, is a lump
sum, in accordance with and subject to the limitations of Section 8.3.
(c) If a Participant suffers a financial emergency or hardship, he may
elect to receive a distribution of 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 Roll-
over 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 retire-
ment 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 8.11, notwithstanding the provisions of Sections 8.2,
8.3, and 8.10.
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8.2 Payment of Vested Accrued Benefit on Termination of 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, or, if the Participant has
a Termination of Employment after attaining age 59-1/2, in installment payments,
except that any amounts which are distributable in Company Stock shall be
distributed only in the form of a lump sum. Distributions under this Section
shall be made or shall commence as soon as reasonably possible after such
Valuation Date.
(b) If a Participant elects installment payments (and is otherwise eligible
for installment payments), such installments shall be paid at least annually,
over a period certain, not in excess of the life expectancy of the Participant
or the joint and last survivor life expectancy of the Participant and his
beneficiary (determined in accordance with the applicable treasury
regulations), nor shall such period be longer than the period permitted under
the minimum distribution incidental benefit requirement of Treasury Regulation
section 1.401(a)(9)-2.
(c) The life expectancy of a Participant and of his spouse and the joint and
last survivor life expectancy of the Participant and his spouse may be
redetermined if permitted by the Management Committee in accordance with such
uniform and non-discriminatory rules as the Management Committee shall
establish, but may not be redetermined more frequently than annually.
(d) If the Participant fails to elect a method of payment by his 65th
Birthday, his vested Accrued Benefit shall be paid as soon as practicable after
his 65th birthday in one lump sum.
(e) A Participant who has elected installment payments may elect to change
the method and timing of payments, however, payments shall be made not less
rapidly than otherwise permitted in this Section.
(f) Benefit payments shall be made or shall commence not later than the
Required Beginning Date, regardless of whether the Participant has elected to
defer such payments under this Section.
8.3 Payment of Vesting 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) if
the Participant is married, 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 sole or all of his vested Accrued
Benefit under the Plan (and in accordance with Section 8.10 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 Form of Payment. Payments on the death of the 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 Beneficiary, if any, on he Participant's death. Such Beneficiary
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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)
other provisions of his vested Accrued his Required Beginning Benefit shall
be distributed the calendar year of the Participant's is his spouse, his
distributed no later 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
(i) his surviving spouse;
(ii) his estate.
(d) Period of Distribution. Notwithstanding any his Plan, if a Participant
dies before benefit has been distributed and before Date, the Participant's
Accrued distributed no later than December 31 of the contains the fifth (5th)
anniversary death; except that if his Beneficiary vested Accrued Benefit may be
than 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 Hardship Withdrawal".
(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 plus income allocable the and credited to his account as of
December 31, 1988 (but not in excess of the value of his 401(k) Contribution
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 if 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
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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;
(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) Withdrawals at over 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 Interest.
(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 vestee 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;
(3) his ESOP Contribution Account; and
(4) 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%
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(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 he 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.
(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 in 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 (f the Participant's Employer Matching Contribution Amount
Amounts which must be reinstated pursuant to this Section 8.5(d)(1) shall,
unless contributed by the Employers, be reinstated from Forfeiture with an
Employer resumed, and, then the amount the Trust invested in the Plan Year
in which service or Commonly Controlled Entity is the extent such
Forfeitures are less to be reinstated, as an expense of Plan Year in which
service is resumed.
(2) If a Participant who had a Termination of Employment resumes 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, it is
permanently forfeited pursuant to this Section 8.5(d)(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 Employ-
ment, 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 Pre-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 Taxes from . 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
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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,
(a) payment of a Participant's benefits shall be made or shall commence
(Unless the Participant elects otherwise) not later than sixty (60) days
after the latest of the close of the Plan Year in which (1) the Participant
attains age sixty-five (65), (2) occurs the tenth (10th) anniversary of the
date on which the Participant commenced participation in the Plan, and (3)
the Participant had a Termination of Employment; or
(b) with respect to the Participant's ESOP Contribution Account, the earlier
of (1) the period described in Section 8.7(a) or (2) unless the Participant
elects otherwise, the later of one year after the Plan Year (i) in which the
Participant has a Termination of Employment by reason of attaining Normal
Retirement Date, Disability or death, or (ii) which is the fifth Plan Year
following the Plan Year in which the Participant otherwise has a Termination
of Employment, except that this subparagraph (ii) shall not apply if the
Participant is reemployed by the Employer or Commonly Controlled Entity
before distribution is required to begin under this subparagraph (ii);
provided that, in any event, payment of benefits shall commence or shall
be made not later than a Participant's Required Beginning Date.
8.8 Restrictions on Distributions of and Investments in Company Stock.
Notwithstanding the provisions of the Plan to the contrary, and except for
Section 7.12 and 8.7, no distributions shall be made to any Participant of
any Company Stock which has been allocated to the Participant's ESOP
Contribution Account for less than 84 months following the month as of which
such Company Stock was allocated to such Accounts, unless
(a) the Participant shall have a Termination of Employment or the Plan shall
terminate;
(b) the Participant shall transfer to the employment of an acquiring
employer from the employment of an Employer upon the sale by the Employer to
the acquiring employer of (i) substantially all of the assets used by the
Employer in a trade or business conducted by the Employer or (ii)
substantially all of the stock of a subsidiary of the Employer; or
(c) with respect to the stock of the Employer, the Participant continues
employment with a subsidiary after the Employer has imposed of its interest
in such subsidiary.
8.9 Facility of Payment. If a Participant or Beneficiary is declared an
incompetent or is a minor, and a conservator, guardian, or other person legally
charged with his care has been appointed, 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 Accrued 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
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Employee, Participant, Beneficiary,
and every other person r party interested or concerned. An Employer, the Trustee
and the Management Committee shall not be under any duty to see the proper
application of such payments made to a Participant, conservator, guardian, or
relatives of a Participant.
8.10 Spousal Consents 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 prescribe; and further provided that the Manage-
ment Committee may provide a spousal consent form which provides that such
consent once given is irrevocable.
8.11 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, regardless of any election or consent of the Participant, his
spouse, or other Beneficiary.
8.12 Form of Payment, A Participant's vested Accrued Benefit payable under
this Article shall be distributed in cash, except that the Participant may
elect to have the portion of his vested Accrued Benefit which is invested in
Company Stock distributed in shares of Company Stock.
8.13 Put Option Age Requirement. If any of the Company Stock distributed
to a Participant is not publicly traded when distributed, the Participant shall
be entitled to put the Company Stock to the Company for a 60-day period
beginning on the date of distribution and, if the put option is not exercised
within such 10-day period, for an additional period of at least 60 days in the
following Plan Year (as provided in regulations prescribed by the Secretary
of the Treasury). A put option shall be exercisable at a price equal to the
value of the Company Stock determined as of the preceding Valuation Date. If a
Participant exercises a put option with respect to Company Stock distributed as
part of a distribution of the Participant's entire vested Accrued Benefit
within one taxable year, the amount to be paid for the Company Stock may be
deferred only if adequate security and a reasonable rate of interest are
provided and if periodic payments are made in substantially equal install-
ments (not less frequently than annually) beginning within 30 days after the
date the put option is exercised an extending for no more than five years
after the put option is exercised. If a Participant exercises a put option with
respect to an installment distribution, the amount to be paid shall be paid not
later than 30 days after the put option is exercised.
8.14 Improper Payment of Benefits. The Management Committee shall require
reimbursement of any amount of payment subsequently determines not to have been
properly payable to a Participant.
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8.15 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 amount: 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 for 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 his 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 shall, by its terms, be required
to be repaid within five (5) years used to acquire a dwelling unit which
time is to be used (determined at the end) as a principal residence of
the participant, except as provided in the regulations prescribed by the
Secretary of the Treasury, for the term of the loan in 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 rite
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 (to the extent not invested in Company Stock), then from
his 401(k) Account (to the extent not invested in Company 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 may be unpaid at the time
the Participant's vested Accrued Benefit shall become payable, be deducted
from the amount 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 who 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 it
terms and foreclosure occurs, the Plan may foreclose on the portion of the
Participant's Accounts which secure the loan, except that foreclosure on
any portion of the 401(k) Account shall not occur until the earliest date
that a Participant could elect a distribution.
(d) The note representing the loan will be segregated in a separate fund
held by the Trustee as a separate
ear-marked investment solely for the account of the Participant. A
Participant's payments to the Trust of principal and interest 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 repay-
ments 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
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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 the time it is disbursed. Prepayment of the principal
is permitted at any time without penalty.
ARTICLE IX.
Administration
9.1 Board of Directors 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
(with or without cause) of the members the, to which is delegated the overall
administration and operation of the supervising and terminating the Manager in
accordance with the Trust Committee Membership. The Management of one (1) or
more members, who shall of Directors. In the absence of such appointment, if
the Trustee is one or more individuals, the Trustee shall serve as the Manage-
ment 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 members 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 Manage-
ment Committee, shall file an acceptance thereof in writing with the secretary
of the Company and the secretary of appointment and removal of the Management
Committee responsibility for the Plan, and for appointing Trustee and any
Investment Agreement.
9.2 Management Committee shall consist be appointed by the Board the Manage-
ment 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 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. The action of the Management Committee shall be
determined by the vote or other affirmative expression if 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 meeting and acts of the Management Committee and
shall have custody of all 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 Committees. 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;
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(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;
(k) To make available to Participants upon request, for examination during
business hours, such records as pertain exclusively to the examining
Participant; and
(l) To establish investment funds from time to time, and to make such
investment funds available for Participant investment elections pursuant
to Article VII.
9.6 Allocations and Regulations of Responsibility.
(a) The Board of Directors, the Management Committee and, if the Trustees
one or more individuals, the Trustee, respectively, shall have the authority
to delegate, from time to time, by instrument in writing filed in their re-
spective 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 the 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 or 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
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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 effort 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 as a member of the Management
Committee. Any other number of the Management Committee may receive
compensation of 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 lie 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 status as an Employee, and all other matters
contained therein applicable to this Plan; provided that a Participant may
request a correction in the record of his age at any time prior to retirement,
and such correction shall be made if within 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 Manage-
ment Committee and the Plan Administrator have discretionary authority to
determine matters within their jurisdiction and the decisions of the Manage-
ment Committee and of the Plan Administrator shall be final, binding and
conclusive upon the Employers and the Trustee and upon each Employee,
Participant, former Participant, Beneficiary and every other person or party
interested or concerned.
9.13 Company, Management Committee and Trustee as Agent. The Company, the
Management Committee and, if the Trustee is one or more individuals the 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
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by the Secretary of the Treasury by regulations, the to 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
Segregation 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 received 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 the rate 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 he 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.
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., 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 less special circumstances require an
processing the Claim. If such an accessing is required, written notice of
furnished to the Claimant prior to the al ninety (90) day period, which
notice 1 circumstances requiring an extension final decision will be reached
(which than one hundred and eighty (180) days 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 prescription 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 the 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
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<PAGE> 47
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.
ARTICLE XI.
Amendment and Termination of the Plan
11.1 Discontinuance of Contributions. It is the expectation of the Company
that it sill 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, may amend,
modify, change, revise or discontinue the Plan or the Trust Agreement, at
any time; provided,
that, except as provided in Section 7.14, 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 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 benefit of
Participants and their Beneficiaries; or (iv) have any retroactive effect
as to deprive any Participant or Beneficiary of any benefit provided that
no amendment made in decisions of the Code, or any other statute's trusts,
or any official regulations pursuant thereto, shall be considered pre-
judicial 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 leaving 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 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
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with or to obtain benefits or advantages under the provisions of
applicable law, 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 o 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 adopted by the
Management Committee to the Employers on a timely basis.
11.5 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.
11.3 Plan Termination. Although it is the intention of the Company that
this Plan is permanent, the Company reserves 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 signs on its behalf by an officer of the
Company and stating the fact of such termination.
11.4 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 and after
payment of all expenses and of accounts to reflect such expenses,
and reallocation to the date of he extent that the Board of Directors 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
may distributed, then continued earnings, losses and expenses of the trust.
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 to the Plan and
employer contributions and forfeitures allocated for the Participant to
all Related Defined Contribution Plans in the Aggregation Group; provided,
however, that for Plan Years beginning before January 1, 1985 and after
December 31, 1988, employer contributions attributable to salary reduction
or similar arrangement under the Plan and Related Defined Contribution Plans
shall not be included in Aggregate Employer Contributions.
(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 ii 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
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in a Permissive Aggregation Group with the Plan.
(i) Mandatory Aggregation Group means each plan (considering tie 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 liable the plan in which the Key Employee
participated to meet the requirements of Section 4(1(a)(4) or Section 410
of the Code.
If the Plan is not described in (A) or (B) above, it shall not be part of a
Mandatory Aggregation Group.
(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), and a collect-
ively bargained plan, if when considered as a part of the Aggregation
Group such plan does not cause the Aggregation Group to fail to satisfy
the requirements of Section 401(a)(4) and Section 410 of the Code
considering, if the plan is a 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 provider 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 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).
(i) An officer of the Employer or Commonly Controlled Entity who:
(A) in any Measurement Period, in the case of a Plan Year beginning after
December 31, 1983, is an officer during the Plan Year and has annual
Compensation for the Plan Year in an amount greater than fifty percent (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); and
(B) in any Measurement Period, in the case of any Plan Year beginning on or
before December l, 1983, is an officer during the Plan Year regardless of
his Compensation (except to the extent that applicable law, regulations and
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rulings duplicate that the fifty percent (50%) requirement set forth in
subparagraph (A) above is applicable).
No more than a total of fifty (50) persons (or, if lesser, the greater of
three (3) persons or ten percent (10%) of all persons or beneficiaries of
persons who are employees or former employees) shall be treated as Key
Employees under this paragraph (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 8, 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 in Section 1.416-1(T-13) of
the Treasury regulations.
(ii) One (1 of the ten (10) persons who, during a Plan Year in the
Measurement Period:
(A) have annual Compensation from the Employer or a Commonly Controlled
Entity for such Plan Year greater than the amount in effect under Section
45 (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 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); 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 a Key Employee under this paragraph unless he owns more than
one-half percent (1/2%) interest ii 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 be treated as Key Employees under this
paragraph (ii) for any Measurement Period.
(iii) i person who, for a Plan Year in the Measurement Period, is a
more than five percent (5%) owner (or is considered as owning more than five
percent (5%) within the meaning of Code Section 318) of the Employer or a
Commonly Controlled Entity.
(iv) I 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%) than the meaning of Code Section 318) of the Employs , 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.
(v) I the number of persons who meet the requirements t be treated as
Key Employees under paragraph (i) r (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 ii a Plan Year in the Measurement Period for
which the requirements are met and who are within the limitation on the number
of Key Employees will be treated as Key Employees.
If the requirements of paragraph (i) or (ii) are met by a person in more
than one (1) Plan Year in the Measurement Period, each person will be counted
only once under paragraph (i) or (ii):
(A) under paragraph (i), the Plan Year in the Measurement Period in which
a person who was an office, and had the highest annual Compensation shall
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be used to determine whether the person will 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 Present Value of Accrued Benefits
for any person shall be counted only once.
(e) means a person or the beneficiary of a person who, at any time
during the Measurement Period, has an account balance in the Plan or
an account balance Dr accrued benefit in any Related Plan in the
Aggregation Group and who is not a Key Employee.
(f) "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, was 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 if the valuation date coincident
with or immediately preceding the Determination Date, adjusted for
contributions due as of the Determination Date, as follows:
(A) in the case of a plan not subject to the minimum funding requirements
of Section 412 of the Code, by including the amount of any contributions
actually made after the valuation date but on or before the Determination
Date, and, in the first plan year of a plan, by including contributions
made after the Determination Date that are allocated as of a date in that
first plan year; and
(B) in the case of a plan that is subject to the minimum funding require-
ments, by including the amount of any contributions that would be alloc-
ated as of a date not later than the Determination Date, plus adjustments
to those amounts as required under applicable rulings, even though those
amounts are not yet required to be contributed or allocated (e.g., because
they have been waived) and by including the amount of any contributions
actually made (or due to be made) after the valuation date but before the
expiration of the extended payment period in Section 41!(c)(10) of the
Code.
(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 an
Employer maintaining the Plan on the Determination Date, expressed as a
benefit commencing at Normal Retirement Date for the person's attained
age, if later) and further determined using the same method which is
used for accrual purposes under all Related Define Benefit Plans in
the Aggregation Group, and if he same method is not used for all
Related Define Benefit Plans then as if such benefit accrued no more
rapidly than at the slowest permitted accrual rate u dewier Code
Section 411(b)(1)(C) determined bast d on 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
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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 by
an employer maintaining a plan on the Determination Date is determined as of
the most recent valuation date which is within a 12-month period ending on
the Determination Date, provided however that:
(A) or the first plan year of the plan, the present value for an employee
is determined as if the employee had a Termination of Employment (1) on the
Determination Date or
(2) on such valuation date but taking into account the estimated accrued
benefit as of the Determination Date; and
(B) or the second and subsequent plan years of tie plan, the accrued benefit
taken into account for an employee is not less than the accrued benefit
taken into account for the first plan year unless the difference is
attributable to using a estimate of the accrued benefit as of the
Determination Date for the first plan year and using the actual accrued
benefit as of the Determination Date for the second plan year.
For purposes of this paragraph (ii), the valuation date is the valuation
date used by the plan for computing plan costs for minimum funding,
regardless of whether a valuation is performed that year.
If the plan provides for a nonproportional subsidy as described in
Treasury Regulations Section 1.416-1(T-27) the present value of accrued
benefits shall be determined taking into account the value of nonproportional
subsidized early retirement benefits and nonproportional subsidized benefit
options.
(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 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(e) of the Code, shall be excluded.
(B) In computing the Present Value of Accrued Benefits with respect to
rollovers or plan-to-plan transfers, the following rules shall be applied
to determine whether amounts which have been distributed during the five
(5) year period ending on the Determination Date from or accepted into
this Plan or any plan in the Aggregation Group shall be included in
determining the Present Value of Accrued Benefits:
(1) Unrelated Transfers accepted into the Plan or any plan in the
Aggregation Group after December 31, 1983 shall not be included.
(2) 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.
(3) Unrelated Transfers made from the Plan or any plan in the Aggregation
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<PAGE> 53
Group shall be included.
(4) Related Transfers made from the Plan or any plan in the Aggregation
Group shall not be included by the transferor plan (but shall be counted
by the accepting plan).
The Accrued Benefit of any individual who has not performed services or
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 the 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 Continually 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 of Accrued
Benefits for Key Employees under all plans in the Aggregation Group
exceeds sixty percent (60%) of the sum of the Present Value of Accrued
Benefits for all employees under all plans in the Aggregation Group;
provided that, for purposes of determining the sum of the Present Value of
Accrued Benefits for all employees under all plans in the Aggregation
Group, here 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 precedes ninety percent (90%) of the sum of
the Present Value of Accrued Benefits for all employees under all plans in
the Aggregation Group.
(i) Top Heavy Plan means the Plan in any Plan Year in which it is a merger
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 a 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
representative 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 Contribution. In any Plan Year
in which the Plan is a Top Heavy Plan, the Employers shall
make additional Employer Contributions to the Plan as
necessary for each participant who is employed on the last
day of the Plan Year and who is a Non-Key Employee to bring
aggregate Employer Contributions participant's Employer 401(k)
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<PAGE> 54
Contributions g Contributions used for purposes of al contribution
percentage under the Plan Year up to at least three Compensation, or
if the Plan is not amended in an aggregation group in order to benefit
plan in the aggregation group to comments of Section 401(a)(4) or code,
such lesser amount as is equal to age 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 his failed to complete the requisite number of hours of service
(if any) after becoming a Participant in the Plan, the amount of his
A (excluding such Par and Employer Matching determining the acts
Section 5.4(c) for percent (3%) of his required to be included
permit a defined be satisfy the require Section 410 of the largest
percent
(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 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) Limitation. 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, in determining the denominator of the
Defined Contribution Plan Fraction and the Defined Benefit Plan Fraction,
at each place at which 1.25 would have been used, 1.00 shall be
substituted, unless the Plan is not a Super Top Heavy Plan and the
special requirements of Section 416(h)(2) of the Code have been satisfied.
(d) Transition Rule for a Top Heavy Plan. Notwithstanding the
provisions of Section 12.3(c), for each Plan Year in which tie Plan is
a Top Heavy Plan and in which the Plan does not meet the special
requirements of Section 416(h)(2) of the Code in order to use 1.25 in
the denominator of the defined Contribution Plan Fraction and the
Defined Benefit Plan Fraction, if an Employee was a participant in
one or more defined benefit plans and in one or more defined
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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 mike the
Employee's Combined Fraction
equal to 1.00 shall be used in the denominator of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction if there are
no further accruals or annual additions under any Top Heavy Plans until
the Participant's Combined Fraction is not greater than 1.00 when a
factor of 1.00 is used in the denominators of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction. Any provisions
therein to the contrary notwithstanding, if the Plan is a Top heavy Plan
and the Plan does not meet the special requirements of Section 416(h)(2)
of the Code in order to use 1.25 ii the 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 Fraction and the Defined
Contribution Plan Fraction, until such time as the Participant's
Combined Fraction is not greater than 1.00.
(e) Transitions Rule 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 combined 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 )f 1.00 is used
in the denominators of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Faction. 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 the 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
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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 shall be
substituted hereunder for the Company or the Employer.
13.3 Plan Merger. The Plan shall not merge or consolidate with, or
transfer any aspects 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 Management Committee,
the Plan Administrator and, if the Trustees are one )r 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 a.1 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 toleration 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 for going, 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 Amount. Unclaimed amounts shall consist of the amounts of
the Accounts of a Participant which cannot be distributed because of the
Management Committee's inability, after a reasonable search, to locate a
Participant or his Beneficiary within a period of two (2) years after the
payment of benefits becomes due Unclaimed amounts for a Plan Year shall
become a Forfeiture and shall be allocated in accordance with Section 6.5
hereof within a reasonable time after the close of the Plan Year n which such
two-year period shall end. If an unclaimed account is subsequently properly
claimed by the Participant or the Participant's Beneficiary, said amount shall
be paid to such Participant or Beneficiary, and shall be accounted formerly
charging Forfeitures in the Plan Year such amount is paid and to the extent
such Forfeitures are less than the amounts paid, as an expense of the Trust
in the Plan Year in which paid
13.6 Nonalienation of Benefits.
(a) Benefits payable under this Plan shall not be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, on or levy of any kind, either voluntary or
involuntary, prior to actually being received by the person entitled
under the terms of the Plan; and any attempt to anticipate, alienate,
sell, edge, encumber, charge, garnish, otherwise dispose of any right to
benefits payable hereunder, shall be void. The Trust Fund shall not
be liable for, or subject to, the abilities, engagements or torts of any
benefits hereunder.
Ending Section 13.6(a), the Trustee shall comply with any order determined
by the Management Committee to be a Qualified Domestic Relations Order as
provided in Section 13.7.
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<PAGE> 57
13.7 Qualified Domestic Relations Order.
(a) "Qualified Domestic Relations Order" means any judgement, decree, or
order (including approval of a property settlement agreement):
(1) which is made pursuant to a state domestic relations law including
a community property law), garnishment, execute voluntary or involuntary
by the person entitled the Plan; and any a transfer, assign, execute on,
levy or benefits payable he shall not in any debts, contracts, person
entitled to
(b) Notwithstanding
(2) which relates to the provision of child support, payments, or marital
property rights to a spouse, former spouse, child, or other dependent of
a Participant,
(3) which creates or recognizes the existence of an alternate payee's
right to receive all or a portion of the Participant's Accrued Benefit
under the Plan, and
(4) with respect to which the requirements of paragraphs (b) and (c) are
met.
(b) 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:
(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
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<PAGE> 58
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 payment is to
begin under such order (but taking into account only the present value of
the benefit 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 t:) the 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 8.10.
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 n 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 Participants, 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 tie Plan shall be construed
and enforced as if such provisions, to the extent invalid or unenforceable
had not been 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 20th day of September 1989.
OUTBOARD MARINE CORPORATION
BY: JAMES C. CHAPMAN
----------------
James C. Chapman
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ATTEST: HOWARD MALOVANY
---------------
Howard Malovany
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