As filed with the Securities and Exchange Commission on July 22, 1999
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
AEGON N.V.
(Exact name of registrant as specified in its charter)
The Netherlands N/A
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Mariahoeveplein 50
2591 TV The Hague
The Netherlands
(Address of principal executive offices)
-----------------------
TRANSAMERICA CORPORATION EMPLOYEES STOCK SAVINGS PLAN
(Full title of the Plan)
-----------------------
Craig D. Vermie
AEGON USA, Inc.
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (319) 398-8511
-----------------------
Copy to:
Richard D. Truesdell, Jr., Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
-----------------------
<TABLE>
CALCULATION OF REGISTRATION FEE
==========================================================================================================================
Proposed
Maximum
Amount Offering Proposed Amount of
Title of to be Price Maximum Aggregate Registration
Securities to be Registered Registered(1) per Share(2) Offering Price Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, par value fifty cents
Dutch Guilder per share.................... 3,000,000 $73.59375 $220,782,250 $61,378
==========================================================================================================================
</TABLE>
(1) Plus an indeterminate number of additional shares which may be offered and
issued to prevent dilution resulting from stock splits, stock dividends or
similar transactions. In addition, pursuant to Rule 416(c) under the
Securities Act of 1933, as amended (the "1933 Act"), this registration
statement also covers an indeterminate amount of interests to be offered
or sold pursuant to the employee benefit plan referenced above.
(2) Estimated pursuant to Rule 457(c) under the 1933 Act solely for the
purpose of computing the registration fee, based upon the average of the
high and low prices of the securities being registered hereby on the New
York Stock Exchange Composite Transaction Tape on July 16, 1999.
===============================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
AEGON N.V. (the "Registrant") hereby files this Registration Statement
with the Securities and Exchange Commission (the "Commission") on Form S-8 to
register 3,000,000 shares of the Registrant's Common Shares, par value fifty
cents Dutch Guilder per share ("Common Shares"), for issuance pursuant to the
Plan and such indeterminate number of additional shares which may be offered
and issued to prevent dilution resulting from stock splits, stock dividends or
similar transactions pursuant to the Plan.
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Registrant pursuant to the Securities and Exchange Act of 1933 (the "1933 Act")
or the Securities Exchange Act of 1934 (the "1934 Act") are incorporated by
reference herein:
(1) The Registrant's Annual Report on Form 20-F, as amended, for the
fiscal year ended December 31, 1998 and
(2) All reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Exchange Act since December 31, 1998 including, to the extent
specifically designated therein, certain reports on Form 6-K.
(3) The description of the Registrant's Common Shares contained in
the Registrant's Form 8-A (File No. 1-10882) filed with the Commission on
October 4, 1991.
All documents filed with the Commission by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, including any Annual
Report Form 20-F and, to the extent specifically designated therein, certain
reports on Form 6-K, subsequent to the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered herein
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof or of the related prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
is also incorporated or deemed to be incorporated herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable, see Item 3(3) above.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable. As of the date hereof, Mr. Italiaander owned an amount of
AEGON common shares equal to less than one one-hundredth of one percent of the
total number outstanding of AEGON common shares.
2
<PAGE>
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify each member of the Executive Board and
the Supervisory Board and each officer of the Company if, in the course of
carrying out his duties, such person incurs personal liability under civil law
for the financial consequences thereof, subject to the Company's reservation of
its rights to recover payment made under the indemnity from each such person to
the fullest extent permitted by applicable laws. The Company maintains an
insurance policy with a third party insurer insuring officers and directors
against the foregoing liability.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
4.01 Form of Transamerica Corporation Employees Stock Savings Plan.
4.02 Specimen Share Certificate. (Incorporated herein by reference to
the Registrant's Form 8-A (File No. 1-10882) filed on October 4,
1991).*
5.01 Opinion of Hans Italiaander; Senior Counsel of AEGON N.V.,
regarding the legality of the Common Shares.
23.01 Consent of Ernst & Young Accountants.
23.02 Consent of Hans Italiaander (included in Exhibit 5.01).
24.01 Power of attorney (included on the signature page of this
registration statement).
- ---------
*Incorporated by reference.
Item 9. UNDERTAKINGS
(a) 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
1933 Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
this 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
material change to such information in the registration statement;
3
<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the 1933
Act, 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; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
Annual Report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's Annual Report
pursuant to Section 15(d) of the 1934 Act) 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.
(c) Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
EXPERTS
The financial statements incorporated in this Registration Statement on
Form S-8 by reference to the Annual Report on Form 20-F as of December 31, 1998
and 1997 and for each of the three years ended December 31, 1998 have been so
incorporated in reliance on the report of Ernst & Young Accountants,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL MATTERS
The validity of the Common Shares offered hereunder has been passed upon
by Hans Italiaander, Senior Counsel of AEGON N.V.
4
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of The Hague, The Netherlands, on July
21, 1999.
AEGON N.V.
By: /s/ K.J. Storm
-----------------------------------------
Name: K.J. STORM
Title: Chairman of the Executive Board
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints K.J. Storm, D.J. Shepard and Craig D. Vermie,
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, 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
Registration Statement has been signed by the following persons in the
following capacities on July 21, 1999.
NAME TITLE
---- -----
/s/ K.J. Storm Chairman of the Executive Board
- -------------------------------- (Chief Executive Officer)
K.J. STORM
/s/ H.B. Van Wijk Executive Board Member
- -------------------------------- (Principal Financial and Accounting Officer)
H.B. VAN WIJK
/s/ P. Van de Geijn Executive Board Member
- -------------------------------- (Executive Officer)
P. VAN DE GEIJN
/s/ D.J. Shepard Executive Board Member
- --------------------------------
D.J. SHEPARD
<PAGE>
/s/ G. Van Schaik Chairman of the Supervisory
- --------------------------------- Board of Directors
G. VAN SCHAIK
/s/ H. de Ruiter Supervisory Board Member
- --------------------------------- (Vice Chairman)
H. DE RUITER
/s/ F.J. de Wit Supervisory Board Member
- ---------------------------------
F.J. DE WIT
/s/ O.J. Olcay Supervisory Board Member
- ---------------------------------
O.J. OLCAY
/s/ G.A. Posthumus Supervisory Board Member
- ---------------------------------
G.A. POSTHUMUS
/s/ M. Tabaksblat Supervisory Board Member
- ---------------------------------
M. TABAKSBLAT
/s/ K.M.H. Peijs Supervisory Board Member
- ---------------------------------
K.M.H. PEIJS
/s/ D.G. Eustace Supervisory Board Member
- ---------------------------------
D.G. EUSTACE
/s/ J.F.M. Peters Supervisory Board Member
- ---------------------------------
J.F.M. PETERS
/s/ Sir Michael Jenkins Supervisory Board Member
- ---------------------------------
SIR MICHAEL JENKINS
/s/ W.F.C. Stevens Supervisory Board Member
- ---------------------------------
W.F.C. STEVENS
<PAGE>
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on July 21, 1999 by the
undersigned as the duly authorized representative of AEGON N.V. in the United
States.
/s/ Craig D. Vermie
------------------------------------
CRAIG D. VERMIE
Cedar Rapids, Iowa
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
- ------ ------- -------------
4.01 Form of Transamerica Corporation Employees Stock
Savings Plan
4.02 Specimen Share Certificate. (Incorporated herein by *
reference to the Registrant's Form 8-A (File No.
1-10882) filed on October 4, 1991).
5.01 Opinion of Hans Italiaander; Senior Counsel of
AEGON N.V., regarding the legality of the Common
Shares.
23.01 Consent of Ernst & Young Accountants.
23.02 Consent of Hans Italiaander (included in Exhibit 5.01).
24.01 Power of attorney (included on the signature page of
this registration statement).
- ---------
* Incorporated by reference.
EXHIBIT 4.01
TRANSAMERICA CORPORATION
EMPLOYEES STOCK SAVINGS PLAN
(September 1, 1996 Restatement)
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1 - OBJECTIVES ........................................... 1
SECTION 2 - DEFINITIONS .......................................... 1
2.1 Affiliate ...............................................1
2.2 After-Tax Contributions .................................2
2.3 Board of Directors ......................................2
2.4 Break in Service ........................................2
2.5 Code ....................................................2
2.6 Committee ...............................................3
2.7 Computation Period ......................................3
2.8 Date of Hire ............................................3
2.9 Date of Rehire ..........................................3
2.10 Disability ..............................................3
2.11 Divested Participant ....................................3
2.12 Eligible Employee ...................................... 3
2.13 Employee ............................................... 4
2.14 Employer Contributions ................................. 4
2.15 Entry Date ............................................. 4
2.16 Employers .............................................. 4
2.17 ERISA .................................................. 4
2.18 Highly Compensated Employee ............................ 4
2.19 Hour of Service ....................................... 6
2.20 Inactive Employee ..................................... 7
2.21 Investment Funds ...................................... 7
2.22 Investment Manager .................................... 7
2.23 Leased Employee ....................................... 7
2.24 Leave of Absence ...................................... 7
2.25 Matched Pre-Tax Contributions ......................... 7
2.26 Normal Retirement Age ................................. 7
2.27 Participant ........................................... 7
2.28 Participant's Account or Account ...................... 8
2.29 Plan .................................................. 8
2.30 Plan Year ............................................. 8
2.31 Pre-Tax Contributions ................................. 8
2.32 Rehired Employee ...................................... 8
2.33 Salary ................................................ 8
2.35 Transamerica Common Stock ............................. 11
2.36 Trust Agreement ....................................... 11
2.37 Trustee ............................................... 11
2.38 Trust Fund ............................................ 11
2.39 Unmatched Pre-Tax Contributions ....................... 11
i
<PAGE>
Page
----
2.40 Valuation Date ........................................ 11
2.41 Year of Vesting Service ............................... 12
SECTION 3 - ELIGIBILITY AND PARTICIPATION ....................... 12
3.1 Eligibility ........................................... 12
3.2 Participation ......................................... 12
3.3 Voluntary Suspension................................... 13
3.4 Mandatory Suspension .................................. 13
3.5 Termination of Participation .......................... 13
SECTION 4 - PRE-TAX AND EMPLOYER CONTRIBUTIONS .................. 14
4.1 Pre-Tax Contributions ................................. 14
4.2 Salary Deferral Elections ............................. 17
4.3 Investment of Pre-Tax and After-Tax Contributions...... 19
4.4 Investment Funds ...................................... 19
4.5 Payment to Trustee; Allocation ........................ 20
4.6 Employer Contributions ................................ 20
4.7 Limitations on Allocations ............................ 22
SECTION 5 - ACCOUNTING .......................................... 26
5.1 Participants' Accounts ................................ 26
5.2 Investment Earnings ................................... 26
5.3 Accounting Methods .................................... 26
5.4 Participant Loans ..................................... 27
5.5 Valuations and Reports ................................ 27
5.6 Valuation of Transamerica Common Stock ................ 27
5.7 Statements of Participant's Accounts .................. 27
SECTION 6 - DISTRIBUTIONS ....................................... 28
6.1 Events Permitting Distribution ........................ 28
6.2 Times for Distribution ................................ 28
6.3 Consent Requirements .................................. 29
6.4 Form of Distribution .................................. 29
6.5 Direct Rollovers ...................................... 30
6.6 Special Distribution Rules ............................ 30
6.7 Beneficiary Designations .............................. 31
6.8 Death Distributions ................................... 32
6.9 Payments to Incompetents .............................. 33
6.10 Effect of Disability .................................. 33
6.11 Undistributable Accounts .............................. 33
6.12 Right of First Refusal ................................ 33
ii
<PAGE>
Page
----
SECTION 7 - WITHDRAWALS, PARTICIPANT LOANS AND DOMESTIC
RELATIONS ORDERS ............................................... 34
7.1 General Withdrawal Rules .............................. 34
7.2 Hardship Withdrawals .................................. 34
7.3 After-Tax and Rollover Accounts ....................... 36
7.4 [Reserved] ............................................ 37
7.5 Terms and Conditions Governing Withdrawals ............ 37
7.6 Participant Loans ..................................... 37
7.7 Qualified Domestic Relations Orders ................... 38
SECTION 8 - VESTING AND TERMINATION OF EMPLOYMENT ............... 39
8.1 Vesting in Participant Contributions ...................39
8.2 Vesting in Employer Contributions ......................39
8.3 Transfers of Employment ................................40
8.4 Vesting Schedule Amendment .............................40
SECTION 9 - REPAYMENTS AND REINSTATEMENT ........................ 41
9.1 Forfeitures and Reinstatements .........................41
9.2 Repayments .............................................41
9.3 Reinstatement Procedure ................................42
SECTION 10 - ADMINISTRATION OF THE PLAN ......................... 42
10.1 Plan Administrator .................................... 42
10.2 Committee ............................................. 42
10.3 Actions by Committee .................................. 42
10.4 Powers of Committee ................................... 42
10.5 Fiduciary Responsibilities ............................ 44
10.6 Decisions of Committee ................................ 44
10.7 Administrative Expenses ............................... 44
10.8 Eligibility to Participate ............................ 44
10.9 Indemnification ....................................... 44
10.10 Purchases of Transamerica Common Stock ............... 44
SECTION 11 - TRUST FUND AND CONTRIBUTIONS ....................... 45
11.1 Trust Fund ............................................ 45
11.2 No Diversion of Assets ................................ 45
11.3 Continuing Conditions on Employer Contributions ....... 45
iii
<PAGE>
Page
----
SECTION 12 - MODIFICATION OR TERMINATION OF PLAN ................ 46
12.1 Employers' Obligations Limited ........................ 46
12.2 Right to Amend or Terminate ........................... 46
12.3 Effect of Termination ................................. 47
12.4 Disposition of Affiliates ............................. 47
12.5 Acquisition of Affiliates ............................. 48
12.6 Transfers and Rollover Contributions .................. 51
SECTION 13 - VOTING OF SHARES AND GENERAL PROVISIONS ............ 52
13.1 Voting of Shares; Tender or Exchange Offers ........... 52
13.2 Named Fiduciary Status; Confidentiality ............... 53
13.3 Self-Tender ........................................... 53
13.4 Plan Information ...................................... 53
13.5 Inalienability ........................................ 53
13.6 Rights and Duties ..................................... 53
13.7 No Enlargement of Employment Rights ................... 54
13.8 Apportionment of Costs and Duties ..................... 54
13.9 Merger, Consolidation or Transfer ..................... 54
13.10 Applicable Law ....................................... 54
13.11 Severability ......................................... 54
13.12 Captions ............................................. 54
SECTION 14 - TOP-HEAVY PLAN ..................................... 54
14.1 Top-Heavy Plan Status ................................. 54
14.2 Top-Heavy Plan Provisions ............................. 55
EXECUTION ....................................................... 56
iv
<PAGE>
TRANSAMERICA CORPORATION
EMPLOYEES STOCK SAVINGS PLAN
(September 1, 1996 Restatement)
TRANSAMERICA CORPORATION, having established the Transamerica Corporation
Employees Stock Savings Plan (the "Plan"), effective as of May 1, 1964, and
having amended and restated the Plan on numerous prior occasions, most recently
effective as of January 1, 1994 (and the other dates specified in that
restatement), hereby again amends and restates the Plan in its entirety,
effective as of September 1, 1996 (except as otherwise indicated herein), as
follows:
SECTION 1
OBJECTIVES
The Plan was established and is maintained for the benefit of Eligible
Employees of Transamerica Corporation and its participating Affiliates, in
order to (1) afford Eligible Employees the opportunity to acquire a common
stock interest in Transamerica Corporation and certain other investments on a
continuing basis, and (2) provide Eligible Employees with a means of
supplementing their retirement income on a tax-favored basis.
The Plan is intended to qualify as (a) a profit-sharing plan (within the
meaning of section 401 (a) of the Code), that includes a qualified cash or
deferred arrangement (within the meaning of section 401(k) of the Code), (b) a
404(c) plan (within the meaning of section 404(c) of ERISA), and (c) an
eligible individual account plan (within the meaning of section 407(d)(3) of
ERISA).
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
2.1 Affiliate shall mean (a) a corporation, trade or business which is,
together with any Employer, a member of a controlled group of corporations or
an affiliated service group or under common control (within the meaning of
section 414(b), (c) or (m) of the Code), but only for the period during which
such other entity is so affiliated with any Employer; and (b) any other entity
required to be aggregated with any Employer pursuant to regulations under
section 414(o) of the Code.
<PAGE>
2.2 After-Tax Contributions shall mean (a) all amounts contributed under
the Plan by an Active Participant on an after-tax basis prior to 1987, and (b)
any employee after-tax contributions included in account balances transferred
to this Plan in a trust-to-trust transfer of assets and liabilities pursuant
to Section 12.5.1(a) in connection with a corporate acquisition.
2.3 Board of Directors shall mean the Board of Directors of Transamerica,
as from time to time constituted.
2.4 Break in Service shall mean as to any Employee a Computation Period
for which the Employee is credited with 500 or fewer Hours of Service, and
shall be deemed incurred on the last day of such Computation Period. Solely for
purposes of determining whether a Break in Service has been incurred, in the
case of an Employee or former Employee who is absent from active employment
with an Employer or Affiliate for any period,
(a) By reason of her pregnancy or the birth of his or her child,
(b) By reason of the placement of a child with the Employee or former
Employee in connection with his or her adoption of such child,
(c) For purposes of caring for any such child for a period beginning
immediately following such birth or placement, or
(d) On account of a leave of absence taken pursuant to the Family and
Medical Leave Act of 1993 ("FMLA"),
"Hour of Service " means each hour which is not credited as an Hour of Service
under Section 2.19 (because the Employee or former Employee is not paid or
entitled to payment therefor) but which would otherwise normally have been
credited to such individual (but for such absence) under Section 2.19.1. In
any case in which an Employer or Affiliate is unable to determine the number of
hours which would otherwise normally have been credited to an Employee (but for
the absence), such individual shall be credited with eight (8) Hours of Service
for each day of such absence. Notwithstanding the foregoing, (1) no more than
501 Hours of Service shall be credited under this Section 2.4 to any individual
on account of any single pregnancy, birth or placement or other FMLA leave, and
(2) the hours described in this Section 2.4 shall be treated as Hours of
Service (A) only for the Computation Period in which the absence from active
employment begins, if the Employee or former Employee would thereby be
prevented from incurring a Break in Service in such Computation Period, or (B)
in any other case, for the next following Computation Period.
2.5 Code shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
2
<PAGE>
2.6 Committee shall mean the Stock Savings Plan Administration Committee
appointed by the Chief Executive Officer of Transamerica and charged with the
general administration of the Plan pursuant to Section 10, as it may be
constituted from time to time
2.7 Computation Period shall mean for each (a) Employee, each period of 12
consecutive months beginning on his or her Date of Hire and each anniversary of
that Date; and (b) Rehired Employee who is rehired after incurring a one-year
Break in Service, each period of 12 consecutive months beginning on his or her
Date of Rehire and each anniversary of the Date.
2.8 Date of Hire shall mean the first date on which an Employee completes
an Hour of Service under Section 2.19.1.
2.9 Date of Rehire shall mean the first date on which a Rehired Employee
completes an Hour of Service under Section 2.19.1.
2.10 Disability shall mean or refer to a disability which (a) the
Committee has found would qualify an Employee (upon the expiration of any
applicable waiting period) for the payment of benefits under his or her
Employer's long-term disability income plan, and (b) shall be deemed incurred
on the first anniversary of the last day on which the Employee completed an
Hour of Service (as defined in Section 2.19). The Committee may (in its
discretion) waive or reduce the one-year waiting period described in clause (b)
if it determines that the disability is of such severity that it is highly
probable to last more than one year. The Committee's determination as to a
Participant's disability shall be final.
2.11 Divested Participant shall mean an individual who (a) is employed by
an entity or division that, before such entity or division was divested by
Transamerica, was an Employer (or a division of an Employer), and (b) has not
had a "separation from service" within the meaning of section
401(k)(2)(B)(i)(I) of the Code with respect to the Plan.
2.12 Eligible Employee shall mean every Employee of an Employer, except
one who is included in any of the following classes of Employees which are not
eligible to become Participants:
(a) Employees whose contracts of employment exclude them from
participating in the Plan,
(b) Hourly-paid Employees (unless the Committee designates an
Employer's hourly-paid Employees as Eligible Employees under the Plan),
(c) Employees who are members of a collective bargaining unit and who
are covered by a collective bargaining agreement which does not
specifically provide for their coverage under the Plan,
(d) Employees who are employed at a division or facility of an
Employer which is specifically excluded from coverage by resolution of the
Employer's board of directors,
3
<PAGE>
(e) Employees who are paid on a non-United States payroll,
(f) Employees who are in the regular employ of an Employer on its
Commonwealth of Puerto Rico payroll,
(g) Employees who are paid on a commissions-only basis,
(h) Inactive Employees, or
(i) Employees who, as to any period of time, are classified or
treated by an Employer as independent contractors, consultants, Leased
Employees or employees of an employment agency or any entity other than an
Employer, even if such individuals are subsequently determined to have
been common-law employees of the Employer during such period,
2.13 Employee shall mean an individual who is any one of the following:
(a) employed by one of the Employers and/or Affiliates as a
common-law employee,
(b) a Leased Employee, or
(c) an Inactive Employee,
provided, however, that if Leased Employees constitute less than twenty percent
of the Employers' and Affiliates' non-highly-compensated work force (within the
meaning of section 414(n)(5)(C)(ii) of the Code), the term "Employee" shall not
include those Leased Employees who are covered by a plan described in section
414(n)(5) of the Code.
2.14 Employer Contributions shall mean the amounts credited to
Participants' Employer Accounts under the Plan by the Employers in accordance
with Section 4.6.
2.15 Entry Date shall mean the first day of each payroll period.
2.16 Employers shall mean Transamerica and the participating Affiliates of
Transamerica. At such times and under such conditions as Transamerica may
direct, one or more other Affiliates may become participating Affiliates or a
participating Affiliate may be withdrawn from the Plan.
2.17 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended. Reference to a specific section of ERISA shall include such
section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section.
2.18 Highly Compensated Employee shall mean an Highly Compensated Active
Employee or a Highly Compensated Former Employee, as defined below:
4
<PAGE>
(a) "Highly Compensated Active Employee" shall mean any Employee who
performs services for an Employer or Affiliate during the Determination
Year and who:
(1) During the Look-Back Year (A) was a 5 percent owner (within
the meaning of section 414(q)(3) of the Code) (a "5% Owner"), (B)
received Compensation in excess of $75,000 (as adjusted pursuant to
sections 414(q)(1) and 415(d) of the Code), (C) received Compensation
in excess of $50,000 (as adjusted pursuant to sections 414(q)(1) and
415(d) of the Code) and was a member of the top-paid group (within
the meaning of section 414(q)(4) of the Code) for such Year, or (D)
was an officer of an Employer or Affiliate and received Compensation
for such Year that is greater than 50% of the dollar limitation in
effect under section 415(b)(1)(A) and (d) of the Code or, if no
officer has Compensation in excess of that threshold for such Year,
the highest paid officer for such Year;
(2) (A) Would be described in clause (B), (C) or (D) of
paragraph (a)(1) above if the term "Determination Year" were
substituted for the term "Look-Back Year" and (B) is one of the 100
Employees who received the most Compensation during the Determination
Year; or
(3) Is a 5% Owner at any time during the Determination Year.
Subject to the satisfaction of such conditions as may be prescribed under
section 414(q)(12)(B)(ii) of the Code, Transamerica may elect for any Plan
Year (1) to apply paragraph (a)(1)(B) above by substituting "$50,000" for
"$75,000" and (2) not to apply paragraph (a)(1)(C) above.
(b) "Highly Compensated Former Employee" shall mean any Employee who
(1) separated (or was deemed to have separated) from service prior to the
Determination Year, (2) performed no services for any Employer or
Affiliate during the Determination year, and (3) was a Highly Compensated
Active Employee for either the separation year or any Determination Year
ending on or after his or her 55th birthday.
(c) If an Employee is, at any time during a Determination or
Look-Back Year, a spouse, lineal ascendant or descendant, or spouse of a
lineal ascendant or descendant (a "Family Member") of either (1) a 5%
Owner who is an active or former Employee or (2) a Highly Compensated
Employee who is one of the ten most highly compensated Employees ranked on
the basis of Compensation paid for such Year (a "Family Employee"), then
for such Year the Family Member and the Family Employee shall be
aggregated and treated as one Employee receiving Compensation and
contributions under the Plan, and making Pre-Tax Contributions under the
Plan, equal to the sum of such Compensation and contributions received by,
and Pre-Tax Contributions made by, the Family Member and the Family
Employee.
(d) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in
the top-paid group, the
5
<PAGE>
top 100 Employees and the number of Employees treated as officers, shall
be made in accordance with section 414(q) of the Code.
(e) For purposes of this Section 2.18,
(1) "Determination Year" shall mean the Plan Year for which the
determination is being made;
(2) "Look-Back Year" shall mean the Plan Year immediately
preceding the Determination Year, unless the Committee (in its
discretion) elects to make Look-Back Year calculations based on the
Determination Year; and
(3) "Compensation" shall mean Testing Compensation (as defined
in Section 4.1.9, but without regard to the last two sentences
thereof).
2.19 Hour of Service shall mean any hour described in Sections 2.19.1
through 2.19.4, subject to the provisions of Sections 2.4, 2.19.5 and 2.19.6.
2.19.1 Paid Hours Worked. Each hour for which an Employee is directly
or indirectly paid or entitled to payment by an Employer or Affiliate for the
performance of duties shall be credited to the Employee for the Computation
Period in which the duties are performed.
2.19.2 Other Paid Hours. Each hour for which an Employee is directly
or indirectly paid or entitled to payment by an Employer or Affiliate for a
period of time for reasons (such as vacation, sickness or disability) other
than for the performance of duties, to the extent that such period is not
included in a Leave of Absence, shall be credited, up to a maximum of 501 Hours
of Service with respect to any single continuous period, to the Employee in
accordance with 29 C.F.R. 2530.200b-2(b) and (c), which regulation is
incorporated in the Plan by this reference.
2.19.3 Back Pay. Each hour for which back pay (regardless of any
mitigation of damages) has been awarded or agreed to by an Employer or
Affiliate shall be credited to the Employee for the Computation Period or
Periods to which the award or agreement pertains.
2.19.4 Leave of Absence. Each hour of any period during which an
Employee is on a Leave of Absence, except to the extent that such hour is
credited under Section 2.4, shall be credited to the Employee on a uniform and
nondiscriminatory basis.
2.19.5 Other Rules. Hours of Service shall be credited under only one
of Sections 2.19.1 through 2.19.4 for any single continuous period of
employment. With respect to an Employee who is employed in a classification of
employees for whom the Employer has elected to count Hours of Service using an
equivalency method in accordance with 29 C.F.R. Section 2530.200b-3(c), such an
Employee shall be credited with 190 Hours of Service during any calendar month
of his or her employment in which he or she completes one or more Hours of
Service. All other Employees shall be credited with Hours of Service based upon
records of hours worked and hours for which payment is made or due; provided,
however, that if such
6
<PAGE>
records are not maintained, such an Employee's Hours of Service shall be
determined in accordance with the equivalency method set forth above. For
purposes of applying this Section 2.19, the term "Employer" shall include a
predecessor employer (within the meaning of section 414(a) of the Code) with
respect to an Employer. An Inactive Employee who is compensated on a
commissions basis shall be credited with 190 Hours of Service for each calendar
month in which he or she receives any commissions.
2.19.6 Pre-1975 Hours. Notwithstanding the foregoing, no period of an
Employee's employment prior to 1975 with an Affiliate which was not at the time
an Employer shall be included in his Hours of Service under this Section 2.19.
2.20 Inactive Employee shall mean any individual who is not a common law
employee of an Employer, but who has entered into an agency contract with an
Employer, provided that his or her service under such agency contract is
recognized for benefit accrual purposes under a pension plan of a U.S.
Affiliate or a registered retirement plan of a Canadian Affiliate.
2.21 Investment Funds shall mean (collectively) the investment funds
designated by the Committee pursuant to Section 4.4.
2.22 Investment Manager shall mean any investment manager appointed by the
Committee in accordance with Section 10.5.1.
2.23 Leased Employee shall mean an individual who is a leased employee
(within the meaning of section 414(n)(2) of the Code) of an Employer.
2.24 Leave of Absence shall mean the period of an Employee's absence from
active employment (a) authorized by an Employer in accordance with its
established and uniformly administered personnel policies, provided that the
Employee returns to active employment after the authorized absence period
expires, unless the Employee's failure to return is attributable to his or her
retirement, Disability or death; or (b) because of military service in the
armed forces of the United States, provided that the Employee returns to active
employment following discharge within the period during which he or she retains
reemployment rights under federal law.
2.25 Matched Pre-Tax Contributions shall mean the amounts contributed
under the Plan by the Employers on behalf of, and pursuant to deferral
elections made by, an Active Participant in accordance with Section 4.1.1.
2.26 Normal Retirement Age shall mean for each Employee the later of (a)
the date on which he or she reaches age 65, or (b) the fifth anniversary of his
or her Date of Hire.
2.27 Participant shall mean an Eligible Employee who has become a
Participant in the Plan pursuant to Section 3.1 or 3.2 and has not ceased to be
a Participant pursuant to Section 3.5. For each Plan Year a Participant shall
be classified as an "Active Participant" if he or she has enrolled in the Plan
by authorizing the required Pre-Tax Contributions in accordance with Section
3.2.
7
<PAGE>
2.28 Participant's Account or Account shall mean as to any Participant the
separate account maintained in order to reflect his or her interest in the
Plan. Each Participant's Account shall be comprised of one or more separate
subaccounts (as specified by the Committee), including but not limited to, the
following subaccount:
2.28.l After-Tax Account is the subaccount maintained to record (a)
the Participant's After-Tax Contributions (if any) made prior to 1987 and (b)
any employee after-tax contributions included in account balances transferred
to this Plan in a trust-to-trust transfer of assets and liabilities pursuant to
Section 12.5.1(a) in connection with a corporate acquisition, and the
adjustments relating thereto.
2.28.2 Employer Account is the subaccount maintained to record the
Employer Contributions allocated to the Participant's Account (and any
reinstatement made pursuant to Section 9. 1), and the adjustments relating
thereto.
2.28.3 Loan Account is the subaccount maintained for the purpose of
administering any loans made to the Participant under Section 7.6.
2.28.4 Pre-Tax Account is the subaccount maintained to record the
Pre-Tax Contributions made on behalf of the Participant and the adjustments
relating thereto.
2.28.5 Rollover Account is the subaccount maintained to record any
transfers made to the Plan made by or on behalf of a Participant pursuant to
Section 12 and any adjustments relating thereto.
2.29 Plan shall mean the Transamerica Corporation Employees Stock Savings
Plan, as set forth in this instrument and as heretofore or hereafter amended
from time to time.
2.30 Plan Year shall mean the calendar year.
2.31 Pre-Tax Contributions shall mean the amounts credited to a
Participant's Pre-Tax Contribution Account under the Plan pursuant to his or
her deferral elections made in accordance with Section 3.2 and 4.1.A
Participant's Pre-Tax Contributions shall include his or her Matched Pre-Tax
Contributions (as described in Section 4.1.1) and/or Unmatched Pre-Tax
Contributions (as described in Section 4.1.2).
2.32 Rehired Employee shall mean a former Employee who again becomes an
Employee.
2.33 Salary shall mean, subject to the provisions of Section 2.33.1
through 2.33.4, the amount and types of an Employee's compensation (including
Pre-Tax Contributions made in accordance with Sections 3.2 and 4.1) which are
taken into account in determining benefits under his or her Employer's
retirement program (or would be taken into account if the Employee were then
participating in such program, including salary, wages, overtime,
performance-related bonuses, production bonuses, shift differentials,
commissions (except commissions paid to life insurance salespersons), vacation
pay, sick pay and activated military leave pay (but not
8
<PAGE>
temporary military duty pay), before any payroll deductions for income tax,
Social Security tax, employee benefits, or reductions for any other purpose;
provided, however, that all other items of extra pay, including but not limited
to the following, shall not be included in Salary:
(a) vacation pay for accrued but unused vacation days and personal
holiday cash-outs,
(b) severance pay and settlements in connection with termination of
employment,
(c) in lieu pay (i.e., pay in lieu of notice in connection with a
termination of employment),
(d) hiring and other bonuses not related to performance (including
retention incentives),
(e) education awards (other than bonuses for successfully completing
actuarial certification, FLMI or CPCU examinations),
(f) bonuses for referral of new employees,
(g) cash and non-cash prizes,
(h) cash awards and sales awards,
(i) imputed income on group life insurance,
(j) any settlements related to employment status,
(k) the value of fringe benefits,
(1) teaching fees,
(m) dividends or other payments from the Plan,
(n) payments from and amounts deferred under all nonqualified.
deferred compensation plans, including the Transamerica Corporation Stock
Savings Plan Plus, the Transamerica Corporation Supplemental Pension Plan,
the Transamerica Corporation SSP+ Supplemental Pension Plan and the
Transamerica Corporation Deferred Compensation Plan,
(o) mortgage subsidy payments,
(p) relocation allowances,
(q) automobile allowances,
9
<PAGE>
(r) moving expense reimbursements,
(s) state disability insurance refunds,
(t) overpayments,
(u) income resulting from the exercise of non-qualified stock
options,
(v) income resulting from elections under section 83(b) of the Code,
(w) income resulting from property vesting pursuant to section 83 of
the Code,
(x) restricted stock dividends,
(y) Benefit Dollars (as defined in the Transamerica Flexibility 125
Plan), whether applied to purchase non-taxable benefits or received in
cash,
(z) education expenses and reimbursements, and
(aa) disability pay and workers compensation payments.
2.33.1 Elective Contributions. Notwithstanding the foregoing
provisions of this Section 2.33, elective contributions made by an Employer
under an employee benefit plan on behalf of an Employee that are not includable
in income under section 125 or section 402(e)(3) of Code, and that reduce the
amount of taxable compensation that the employee would have received but for
such employee benefit plan, shall be included in Salary.
2.33.2 Purchases and Sales of Vacation Days. Notwithstanding the
foregoing provisions of this Section 2.33, any reduction or increase in
compensation attributable to the purchase or sale of vacation days shall be
disregarded in determining Salary.
2.33.3 Administrative Provisions. The Committee may determine on a
nondiscriminatory basis the specific manner in which a Participant's Salary
shall be determined for purposes of applying Section 4.2.2.
2.33.4 Dollar Limit. No portion of an Employee's Salary during a Plan
Year which exceeds $150,000 (as adjusted in accordance with section 401(a)(17)
of the Code) shall be taken into account under the Plan for any Plan Year.
Notwithstanding the foregoing, the $150,000 dollar limit shall not be adjusted
in accordance with section 401(a)(17) for the Plan Year ending December 31,
1997. In applying that dollar limit for a Plan Year, Section 2.18(c) shall
apply except that the term "Family Member" shall only include a spouse or a
lineal descendant who has not attained age 19 before the close of the Plan
Year. If the dollar limitation would be exceeded as a result of the application
of these family aggregation rules, the limitation will be prorated among the
affected individuals in proportion to the annual compensation of each such
individual (determined prior to the application of the dollar limitation).
10
<PAGE>
2.33.5 Failsafe. Notwithstanding the foregoing provisions of this
Section 2.33, in no event shall Salary for any Participant exceed in any given
Plan Year the maximum amount considered to be nondiscriminatory under section
414(s) of the Code.
2.34 Transamerica shall mean Transamerica Corporation, a Delaware
corporation.
2.35 Transamerica Common Stock shall mean the common stock of Transamerica
or, if the common stock of Transamerica ceases to be readily tradeable on an
established securities market, the common stock of Transamerica having a
combination of voting power and dividend rights equal to or in excess of (a)
that class of common stock of Transamerica having the greatest voting power,
and (b) that class of common stock of Transamerica having the greatest dividend
rights.
2.36 Trust Agreement shall mean the trust agreement entered into by and
between Transamerica and the Trustee, as amended from time to time, for the
purpose of establishing and maintaining the Trust Fund.
2.37 Trustee shall mean the Trustee under the Trust Agreement, and any
successor, additional or substituted trustee or trustees from time to time
acting as Trustee of the trust established by the Trust Agreement.
2.38 Trust Fund shall mean all the assets, at any time and from time to
time, of the trust established by the Trust Agreement to hold assets of the
Plan.
2.39 Unmatched Pre-Tax Contributions shall mean the amounts contributed
under the Plan by the Employers on behalf of, and pursuant to deferral
elections made by, an Active Participant in accordance with Section 4.1.2.
2.40 Valuation Date shall mean:
(a) For purposes of valuing Plan assets and Members' Accounts for
periodic reports and statements, the date as of which such reports or
statements are made; and
(b) For purposes of determining the amount of assets actually
distributed to the Participant, his or her beneficiary or an Alternate
Payee (or available for loan or withdrawal), the date on which occur the
relevant transactions required to liquidate to cash the assets allocated
to the Participant's Account, proldded that when such transactions occur
on more than one date, there shall be several Valuation Dates, as
appropriate.
In any other case, the Valuation Date shall be the date designated by the
Committee (in its discretion) or the date otherwise set out in this Plan. In
all cases, the Committee (in its discretion) may change the Valuation Date, on
a uniform and nondiscriminatory basis, as is necessary or appropriate.
Notwithstanding the foregoing, the Valuation Date shall occur at least
annually.
11
<PAGE>
2.41 Year of Vesting Service shall mean a Computation Period commencing
after 1975 for which an Employee is credited with at least 1,000 Hours of
Service. In the case of a Participant who has no vested interest in his or her
Employer Account and who incurs a Break in Service on or after January 1, 1985,
Years of Service accumulated prior to the Break in Service shall be disregarded
if the number of his or her consecutive one-year Breaks in Service equals or
exceeds the greater of five (5) or the aggregate number of Years of Service
accumulated prior to the first of such consecutive Breaks in Service, excluding
Years of Service disregarded by reason of any prior Break(s) in Service. In the
case of a Participant who has no vested interest in his or her Employer Account
and who incurs a Break in Service prior to January 1, 1985, Years of Vesting
Service shall be determined under the terms of the Plan as then in effect.
SECTION 3
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Each individual who is both a Participant in the Plan on
August 31, 1996 and an Eligible Employee on September 1, 1996, shall
automatically continue as a Participant on September 1, 1996. Each other
Eligible Employee shall automatically become a Participant in the Plan on the
later of (a) the Entry Date next following the first Computation Period for
which he or she is credited with at least 1,000 Hours of Service, provided that
he or she is employed as an Eligible Employee on such Entry Date; or (b) the
date he or she becomes an Eligible Employee.
3.1.1 Rehired Employees. A Rehired Employee who previously satisfied
the 1,000 Hours of Service eligibility requirement shall become a Participant
on the later of his or her Date of Rehire or the date he or she becomes an
Eligible Employee. A Rehired Employee who previously did not satisfy the 1,000
Hours of Service eligibility requirement shall become a Participant on the
later of (a) the Entry Date next following the first Computation Period for
which he or she is credited with at least 1,000 Hours of Service, provided that
he or she is employed as an Eligible Employee on such Entry Date; or (b) the
date he or she becomes an Eligible Employee.
3.1.2 Employer Aggregation. An Eligible Employee who is employed by
more than one Employer shall nevertheless be considered an Eligible Employee
for purposes of the Plan. The total Salary paid to the Eligible Employee by all
Employers shall be deemed to have been paid by one Employer for purposes of the
Plan.
3.2 Participation. Each Participant's decision to become an Active
Participant shall be entirely voluntary.
3.2.1 Active Participation. An Eligible Employee who is a Participant
under Section 3.1 may elect to become an Active Participant, effective as of
any Entry Date, provided that he or she enrolls in the Plan and elects to make
Pre-Tax Contributions, in such manner and within such advance notice period as
the Committee (in its discretion) shall specify.
12
<PAGE>
3.2.2 Inactive Participation. A Participant who does not elect to
become an Active Participant when eligible to do so may elect to become an
Active Participant effective as of any Entry Date, provided that he or she
enrolls in the Plan and elects to make Pre-Tax Contributions, in such manner
and within such advance notice period as the Committee (in its discretion)
shall specify.
3.3 Voluntary Suspension. An Active Participant may voluntarily suspend
his or her active participation in the Plan, thereby suspending his or her
Pre-Tax Contributions for future payroll periods during the suspension period,
by giving notice to such person, in such manner and within such advance notice
period as the Committee (in its discretion) shall specify.
3.3.1 Effect. For the period for which a Participant's active
participation is suspended, he or she shall not make any Pre-Tax Contributions
nor share in the allocation of Employer Contributions, and he or she may not
later make the Pre-Tax Contributions that he or she might otherwise have made
during the suspension period. No distribution shall be made to a Participant
solely as the result of the suspension of his or her active participation.
3.3.2 Resumption of Active Participation. A Participant whose active
participation in the Plan has been suspended may voluntarily resume his or her
Pre-Tax Contributions, effective with respect to Salary paid for the payroll
period beginning on any Entry Date, by again electing to become an Active
Participant in accordance with Section 3.2.
3.4 Mandatory Suspension. If a Participant (a) ceases to be an Eligible
Employee because he or she ceases to meet the requirements of Section 2.12, (b)
is transferred to employment with an Affiliate which is not an Employer, (c) is
granted a Leave of Absence without pay, or (d) is qualified for Disability or
short-term disability benefits (after the Employer has made payments at the
regular compensation rate for his or her accumulated sick leave days) under his
or her Employer's disability income plan, then:
(a) His or her status as an Active Participant shall be suspended (in
accordance with Section 3.3.1) for each payroll period beginning during
the continuation of such ineligible status, and
(b) After he or she again becomes an Eligible Employee and the
conditions described in clauses (a) through (d) above cease to apply, his
or her status as an Active Participant may be resumed only in accordance
with Section 3.3.2.
3.5 Termination of Participation. An Eligible Employee who has become a
Participant shall remain a Participant until his or her employment as an
Eligible Employee with all Employers terminates or, if he or she had been an
Active Participant and remains alive, until his or her entire vested Account
balance is distributed (whichever is later).
13
<PAGE>
SECTION 4
PRE-TAX AND EMPLOYER CONTRIBUTIONS
4.1 Pre-Tax Contributions. Each Active Participant may elect to defer
portions or his or her Salary payments and to have the amounts of such
deferrals contributed by the Employers as Pre-Tax Contributions to the Trust
Fund.
4.1.1 Matched Pre-Tax Contributions. An Active Participant may elect
to defer as his or her Matched Pre-Tax Contributions a portion of each payment
of Salary that would otherwise be made to him or her, after the election
becomes and while it remains effective pursuant to Section 4.2, equal to any
whole percentage that does not exceed 6%; provided, however, that the
Committee may increase the maximum percentage from 6% to any whole percentage
not exceeding 15% by action taken and communicated to Participants prior to
the period with respect to which the Committee determines that such increased
percentage may be elected.
4.1.2 Unmatched Pre-Tax Contributions. An Active Participant may
elect to defer as his or her Unmatched Pre-Tax Contributions a portion of each
payment of Salary that would otherwise be made to him or her, after the
election becomes and while it remains effective pursuant to Section 4.2, equal
to any whole percentage that does not exceed 6%; provided, however, that this
Section 4.1.2 shall apply to a particular Active Participant only if (a) he or
she has elected the maximum percentage permitted under Section 4.1.1, and (b)
he or she is not an HCE Participant (as defined in Section 4.1.6).
Notwithstanding the preceding sentence, an Active Participant (i) who is an HCE
Participant, and (ii) whose Salary for the immediately preceding Plan Year was
less than $150,000 (as adjusted for that year in accordance with section
401(a)(17) of the Code), may elect to defer as his or her Unmatched Pre-Tax
Contributions a portion of each payment of Salary that would otherwise be made
to him or her, after his or her election becomes and while it remains effective
pursuant to Section 4.2, equal to 1% (or such higher percentage as may be
designated by the Committee, up to a maximum of 6%) of his or her Salary,
provided that he or she has elected the maximum percentage permitted under
Section 4.1.1.
4.1.3 Limited Pre-Tax Contributions. An Active Participant whose
Salary for the immediately preceding Plan Year was equal to or greater than
$150,000 (as adjusted for that year in accordance with section 401(a)(17) of
the Code), shall be limited to a total Pre-Tax Contribution equal to 1% (i.e.,
1% Matched Pre-Tax Contribution and 0% Unmatched Pre-Tax Contribution). For
purposes of the foregoing, "Salary" shall be determined by including amounts
deferred under the Transamerica Corporation Stock Savings Plan Plus and the
Transamerica Corporation Deferred Compensation Plan.
4.1.4 Section 401(k) Ceiling. Notwithstanding any contrary Plan
provision, the Committee (in its discretion):
(a) May suspend or limit any Participant's salary deferral election
at any time in order to prevent the cumulative amount of the Pre-Tax
Contributions contributed on behalf of the Participant for any calendar
year from exceeding the Section 401(k) Ceiling;
14
<PAGE>
(b) May cause any amount allocated to the Participant's Account and
designated by the Participant as an excess deferral (calculated by taking
into account only amounts deferred under this and any other cash or
deferred arrangement maintained by any Employer or Affiliate and
qualified under section 401(k) of the Code), together with any income
allocable thereto for the calendar year to which the excess deferral
rates, to be distributed to the Participant in accordance with section
402(g)(2)(A) of the Code; and
(c) May (but shall have no obligation whatsoever to) cause any other
amount allocated to the Participant's Account as an excess deferral,
together with any income allocable thereto for the calendar year to which
the excess deferral relates, to be distributed to the Participant in
accordance with section 402(g)(2)(A) of the Code.
(d) Any Employer Contributions allocated to the Participant's
Employer Account by reason of any excess deferral distributed pursuant to
paragraph (b) or (c), together with any income allocable thereto for the
calendar year to which the excess deferral relates, shall be forfeited at
the time such distribution is made and applied to reduce the next
succeeding Employer Contribution to the Plan, without regard to the extent
of the Participant's vested interest in his or her Employer Account.
(d) The "Section 401(k) Ceiling" is a dollar amount equal to the
dollar limit prescribed in section 402(g) of the Code (as adjusted
pursuant to sections 402(g)(5) and 415(d) of the Code).
4.1.5 Limitations on HCE Participants. For any Plan Year, the
Committee (in its discretion) may limit the period for which, and/or specify a
lesser maximum percentage or amount at which, Pre-Tax Contributions may be
elected by any Participant in such manner as may be necessary or appropriate in
order to assure that the limitation described in Section 4.1.7 will be
satisfied.
4.1.6 HCE and Non-HCE Participants. All Participants who are Eligible
Employees at any time during a Plan Year (whether or not they are Active
Participants), and who are Highly Compensated Employees with respect to the
Plan Year, shall be HCE Participants " for the Plan Year. All other
Participants who are Eligible Employees at any time during the Plan Year shall
be "Non-HCE Participants " for the Plan Year.
4.1.7 Deferral Percentage Limitation. In no event shall the actual
deferral percentage, determined in accordance with Section 4.1.8 (the "ADP'),
for the HCE Participants for a Plan Year exceed the maximum ADP, as determined
by reference to the ADP for the Non-HCE Participants, in accordance with the
following table:
15
<PAGE>
If the ADP for the
Non-HCE Participants Then the Maximum ADP for
("NHCEs' ADP") is: the HCE Participants is:
Less than 2% 2. 0 x NHCEs' ADP
2% to 8% NHCEs' ADP + 2 percentage points
More than 8% 1. 25 x NHCEs' ADP
4.1.8 Actual Deferral Percentage. The actual deferral percentage for
the HCE or Non-HCE Participants for a Plan Year shall be calculated by
computing the average of the percentages (calculated separately for each HCE or
Non-HCE Participant) (the "Deferral Rates") determined by dividing (1) the
total of all Pre-Tax Contributions made by the Participant and credited to his
or her Pre-Tax Account for the Plan Year, by (2) the Participant's Testing
Compensation (as defined in Section 4.1.9) for the Plan Year. In computing a
Participant's Deferral Rate, the following special rules shall apply:
(a) If any Employer or Affiliate maintains any other cash or deferred
arrangement which is aggregated by Transamerica with this Plan for
purposes of applying section 401(a)(4) or 410(b) of the Code, all such
cash or deferred arrangements shall be treated as one plan for purposes of
applying Section 4.1.7.
(b) If an HCE Participant is a participant in any other cash or
deferred arrangement maintained by any Employer or Affiliate, then the
separate Deferral Rates determined for the Participant under all such cash
or deferred arrangements shall be aggregated with the separate Deferral
Rate determined under this Section 4.1.8 for the Participant for purposes
of applying Section 4.1.7.
(c) If an HCE Participant is subject to the family aggregation rules
of Section 2.18(c), the Deferral Rate of the family unit shall be the
greater of (1) the combined Deferral Rate of all eligible Family Members
(as defined in Section 2.18(c)) who are HCE Participants without regard to
family aggregation, or (2) the combined Deferral Rate of all eligible
Family Members.
4.1.9 Testing Compensation. For purposes of applying Sections 4.1 and
4.6, "Testing Compensation" means with respect to any Participant shall mean:
(a) The sum of (1) his or her Total Compensation (as defined in
Section 4.7.2(c)), (2) Pre-Tax Contributions credited to his or her
Account, and (3) other amounts that are contributed to an employee benefit
plan by any Employer or Affiliate pursuant to a salary reduction agreement
and not includable in gross income under section 125, 401(k), 402(e)(3),
402(h), 403(b) or 414(h)(2) of the Code; or
(b) The amount of his or her compensation calculated by the Committee
in a manner which satisfies applicable requirements of Treas. Reg. Section
1.401(k)-l(g)(2)(i).
16
<PAGE>
Compensation for periods prior to the time that the individual becomes a
Participant shall not be taken into account. No amount in excess of $150,000
(as adjusted in accordance with section 401(a)(17) of the Code) shall be taken
into account for any Participant under this Section 4.1.6 for any Plan Year. In
applying that dollar limit for a Plan Year, Section 2.18(c) shall apply
except that the term "Family Member" shall include a spouse or lineal
descendant who has not attained age 19 before the close of the Plan Year.
4.2 Salary Deferral Elections.
4.2.1 Pre-Tax Contributions. Each Active Participant shall determine
the percentage of his or her Salary that shall be deferred and contributed to
the Trust Fund as his or her Pre-Tax Contributions, subject to the limitations
of Section 4. 1, at the time he or she becomes an Active Participant and
thereafter may redetermine such percentage from time to time as of any Entry
Date. In either event, (a) the Active Participant shall make a salary deferral
election with respect to his or her Pre-Tax Contributions, in such manner and
within such advance notice period as the Committee (in its discretion) shall
specify, and (b) no Pre-Tax Contributions shall be made by any Active
Participant except in accordance with his or her salary deferral election and
the limitations of Section 4.1. The deferral election made by an Active
Participant pursuant to this Section 4.2 shall remain in effect,
notwithstanding any increase or decrease in the Participant's Salary, until his
or her active participation in the Plan is terminated, except to the extent the
election is suspended in accordance with Sections 3.3, 3.4 and 7.5.3, changed
in accordance with this Section 4.2.1 or reduced by the Committee pursuant to
Section 4.1.4 or 4.1.5.
4.2.2 Amount. The amount of Pre-Tax Contributions that may be made by
each Active Participant for each payroll period shall be determined by each
Employer consistently for its own Employees as the amount that is the next
higher whole dollar amount, relative to the amount determined by multiplying
the percentage elected by the Active Participant pursuant to Section 4.1 by the
amount of his or her Salary for that payroll period.
4.2.3 Potential Excess ADP. In the event that (but for the
application of this Section 4.2.3) the Committee determines that the ADP for
the HCE Participants would exceed the maximum permitted under Section 4.1.7 for
a Plan Year (the "ADP Maximum"), then the Committee (in its discretion) may
reduce, in accordance with Section 4.1.4, the amounts or percentages of Pre-Tax
Contributions subsequently to be contributed on behalf of any Participant by
such amounts or percentages as, and for as long as, the Committee in its
discretion may determine is necessary or appropriate in the circumstances then
prevailing.
4.2.4 Actual Excess ADP. In the event that the Committee determines
that the ADP for the HCE Participants exceeds the ADP Maximum for any Plan
Year, the amount of any excess contributions (within the meaning of section
401(k)(8)(B) of the Code), contributed on behalf of any HCE Participant,
together with any income allocable thereto for the Plan Year to which the
excess amount relates, shall be distributed to the HCE Participant before the
close of the next following Plan Year.
17
<PAGE>
(a) Determination of Excess Contributions. The amount of excess
contributions for an HCE Participant shall be determined in the following
manner:
(1) Pre-Tax Contributions of the HCE Participant with the
highest Deferral Rate shall be reduced to the extent necessary to
satisfy the ADP test in Section 4.1.7 or to cause such Rate to equal
the Deferral Rate of the HCE Participant with the next highest
Deferral Rate. This process shall be repeated until the ADP test is
satisfied.
(2) The amount of excess contributions for an HCE Participant
shall be equal to his or her Pre-Tax Contributions (calculated using
the Participant's original Deferral Rate), minus his or her Pre-Tax
Contributions calculated using the Participant's Deferral Rate as
reduced under paragraph (1) above.
(3) The amount of excess contributions, as determined according
to the method described in this paragraph (a), shall be reduced by
any excess deferrals previously distributed to a Participant for the
Plan Year under Section 4.1.4.
(b) Family Aggregation. In the case of an HCE Participant whose
Deferral Rate is determined under the family aggregation rules of Section
4.1.8(c), the Deferral Rate shall be reduced in accordance with the
"leveling" method described in Treas. Reg. Section 1.401(k)-l(f)(2). Excess
contributions for the family unit shall be allocated among the Family
Members in proportion to the Pre-Tax Contributions of each Family Member
that have been combined.
(c) Determination of Allocable Income. The income allocable to any
excess contributions for a Plan Year, excluding income for the period
between the end of the Plan Year and the date of distribution, shall be
determined in accordance with section 401(k)(8)(A)(i) of the Code.
(d) Forfeiture of Related Employer Contributions. Any Employer
Contributions allocated to the Participant's Employer Account by reason of
any excess contributions distributed pursuant to this Section 4.2.4,
together with any income allocable thereto for the Plan Year to which the
excess contributions relate, shall be forfeited and applied to reduce the
next succeeding Employer Contribution to the Plan, without regard to the
extent of the Participant's vested interest in his or her Employer
Account.
(e) Incorporation By Reference. The foregoing provisions of this
Section 4 are intended to satisfy the requirements of section 401(k)(3) of
the Code and, to the extent not otherwise stated above, the provisions of
sections 401(k)(3) and 401(m)(9) of the Code and Treas. Reg. Sections
1.401(k)-l(b) and 1.401(m)-2 are incorporated herein by reference.
18
<PAGE>
4.3 Investment of Pre-Tax and After-Tax Contributions.
4.3.1 Pre-Tax and After-Tax Contributions. Each Participant (or, if
deceased, his or her beneficiary) shall elect, in such manner and at such times
as the Committee (in its discretion) shall specify, the percentages of all
amounts allocated to his or her Pre-Tax and After-Tax Accounts (and the
percentages of all future amounts to be allocated to his or her Pre-Tax
Account) that are to be invested in each of the Investment Funds. A Participant
(or beneficiary) may specify as to any Investment Fund any percentage, provided
that the total of the percentages specified shall not exceed 100%.
4.3.2 Changes. The instructions of a Participant (or beneficiary),
concerning the investment of the amounts allocated to his or her Pre-Tax and
After-Tax Accounts (and the percentages of all future amounts to be allocated
to his or her Pre-Tax Account) may be changed in accordance with such
procedures as the Committee (in its discretion) shall designate from time to
time. The changed election shall remain in effect until it is changed by the
Participant in accordance with this Section 4.3.2. Changes in amounts
credited to an Investment Fund invested in fixed income contracts shall be
permitted only upon maturation of the particular fixed income contract to which
such amounts are credited.
4.3.3 Failure to Elect and Deleted Funds. If a Participant (or
beneficiary) fails to direct the manner in which the amounts allocated (or to
be allocated) to his or her Pre-Tax and After-Tax Accounts are to be invested,
such amounts shall be invested in the Investment Fund specified by the
Committee for that purpose. Whenever the Committee discontinues an Investment
Fund and the Participant does not make a new election with respect to amounts
allocated (or to be allocated) to the discontinued Investment Fund, such
amounts shall be invested in the Investment Fund specified by the Committee for
that purpose.
4.4 Investment Funds.
4.4.1 General. The Committee shall designate four or more Investment
Funds which the Trustee shall establish and maintain for the investment of
Pre-Tax Contributions, After-Tax Contributions and Employer Contributions. The
Trustee shall establish and maintain the Investment Funds for the purpose of
investing such portions of Participants' Accounts as are properly allocable to
each such Fund pursuant to this Section 4. The Committee shall direct the
Trustee to invest each Investment Fund (a) in units, shares or other interests
in one or more common, pooled or other collective investment funds which funds
are either (1) maintained by any person described in section 3(38)(B) of ERISA
or an affiliate of such person, or (2) registered under the Investment Company
Act of 1940, or (b) in such group pension contracts as may be designated by the
Committee, or (c) in shares of Transamerica Common Stock and (for liquidity)
short-term investments (as described in clause (a) above).
4.4.2 Changes. The Committee may discontinue the availability of any
of the Investment Funds and/or may designate one or more additional Investment
Funds. The Committee also may redesignate the collective investment funds
and/or group pension contracts in which any Investment Fund shall be invested.
19
<PAGE>
4.5 Payment to Trustee; Allocation. Amounts equal to all Pre-Tax
Contributions to be made on behalf of Active Participants in accordance with
Sections 4.1 and 4.2 for a payroll period, shall be paid by the Employers to
the Trustee, within a reasonable period after the end of the payroll period
(and in no event later than 15 days after the end of the calendar month in
which the payroll period ends). To the extent that the Pre-Tax
Contributions to be made by Employers other than Transamerica are made in
Transamerica Common Stock, such Employers shall transfer the amount of the
Contributions to Transamerica in cash, and Transamerica shall transfer the
appropriate amount of Transamerica Common Stock (as determined in accordance
with Section 5.6) to the Trust Fund on their behalf. Upon receipt by the
Trustee, the Pre-Tax Contributions paid on behalf of each Active Participant
shall be credited to his or her Pre-Tax Account, subject to the provisions of
Section 4.7, and invested in accordance with Sections 4.3 and 4.4.
4.6 Employer Contributions. Subject to the provisions of Sections 4.7 and
12, the Employers shall contribute amounts to the Trust Fund (the "Employer
Contributions") equal to 75% of the Matched Pre-Tax Contributions paid on behalf
of each Active Participant. Notwithstanding the foregoing, the Board of
Directors (in its sole discretion) shall be authorized (without further
amendment of the Plan) to decrease the rate of Employer Contributions under
this Section 4.6 to any rate less than 1%, and to increase the rate of
Employer Contributions under this Section 4.6 to any rate higher than 75%,
provided that the aggregate Employer Contributions for each Plan Year shall in
no event exceed 25% of the Total Compensation (as defined in Section 4.7.2(c))
of the Active Participants for that Plan Year.
4.6.1 Limitations on HCE Participants. For any Plan Year, the
Committee (in its discretion) may limit the Employer Contributions to be
contributed for the benefit of HCE Participants (as defined in Section 4.1.6)
in such manner as may be necessary or appropriate in order to assure that the
limitation described in Section 4.6.3 will be satisfied.
4.6.2 Contribution Percentage Limitation. In no event shall the
actual contribution percentage, determined in accordance with Section 5.1.3
(the "ACP'), for the HCE Participants for a Plan Year exceed the maximum ACP
as determined by reference to the ACP for the Non-HCE Participants, in
accordance with the following table:
If the ACP for the
Non-HCE Participants Then the Maximum ACP for
("NHCEs' ACP") is: the HCE Participants is:
Less than 2% 2.0 x NHCEs' ACP 2% to 8% 1 NHCEs' ACP + 2 percentage points
More than 8% 1.25 x NHCEs' ACP
4.6.3 Actual Contribution Percentage. The actual contribution
percentage for the HCE or Non-HCE Participants for a Plan Year shall be
calculated by computing the average of the percentages (calculated separately
for each HCE or Non-HCE Participant) (the "Contribution Rates") determined by
dividing (a) the total of all Employer Contributions made on behalf of the
Participant and credited to his or her Employer Account for the Plan Year, by
20
<PAGE>
(b) the Participant's Testing Compensation (as defined in Section 4.1.9) for
the Plan Year. The special aggregation rules set forth in Section 4.1.8 with
respect to the calculation of the Participants' ADPs shall also apply to the
calculation of their ACPs.
4.6.4 Potential Excess ACP. In the event that (but for the
application of this Section 4.6.4) the Committee determines that the ACP for
the HCE Participants would exceed the maximum permitted under Section 4.6.2 for
a Plan Year (the "ACP Maximum"), then, the Committee (in its discretion) may
reduce, in accordance with Section 4.6.1, the percentage or amount of Employer
Contributions subsequently to be contributed on behalf of the HCE Participants
by such percentage or amount as, and for as long as, the Committee in its
discretion may determine is necessary or appropriate in the circumstances then
prevailing.
4.6.5 Actual Excess ACP. In the event that the Committee determines
that the ACP for the HCE Participants exceeds the ACP Maximum for a Plan Year,
then the amount of any "excess aggregate contributions" (within the meaning of
section 401(m)(6)(B) of the Code) contributed on behalf of any HCE Participant,
together with any income allocable to that amount for the Plan Year to which
the excess aggregate contributions relates, shall be (1) distributed to the HCE
Participant before the close of the next following Plan Year, or (2) forfeited
and applied to reduce the next succeeding Employer Contributions to the Plan.
(a) Distribution or Forfeiture of Excess Amount. The percentage or
amount of the excess amount to be distributed pursuant to clause (1) above
shall be the same as the HCE Participant's vested percentage interest in
his or her Employer Account, and the remainder of the excess amount shall
be forfeited pursuant to clause (2) above.
(b) Determination of Excess Aggregate Contributions. The amount of
excess aggregate contributions for an HCE Participant, the income
allocable thereto, and the application of the family aggregation rules
shall be determined in the manner provided in Section 4.2.4 with respect
to excess contributions.
(c) Prohibition on Multiple Use. Notwithstanding any contrary Plan ,
provision, the multiple use of the alternative methods of compliance with
sections 401(k) and (m) of the Code, as set forth in sections
401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code, shall not be
permitted. In the event that multiple use occurs, it shall be corrected by
reducing the ADP and/or ACP for HCE Participants (in the discretion of the
Committee) and treating such reduction as an excess contribution and/or
excess aggregate contributions (as appropriate) under Sections 4.2.4 or
this Section 4.6.5.
(d) Incorporation By Reference. The foregoing provisions of this
Section 4.6 are intended to satisfy the requirements of section 401(m) of
the Code and, to the extent not otherwise stated above, the provisions of
sections 401(m)(2) and (9) of the Code and Treas. Reg. Sections
1.401(m)-l(b) and 1.401(m)-2 are incorporated herein by reference.
4.6.6 Reinstatements. The Employers shall also contribute to the
Trust Fund the amount necessary to reinstate previously forfeited Employer
Account balances in accordance
21
<PAGE>
with Section 9. 1, to the extent that funds from current forfeitures are
insufficient to cover such reinstatements.
4.6.7 Form of Contributions. Employer Contributions shall be paid in
cash or in the form of Transamerica Common Stock. To the extent that Employer
Contributions to be made by Employers other than Transamerica are made in the
form of Transamerica Common Stock, such Employers shall transfer the amount of
their Employer Contributions to Transamerica in cash, and Transamerica shall
transfer the appropriate amount of Transamerica Common Stock to the Trust Fund
on such Employers' behalf. When Employer Contributions are to be made in the
form of Transamerica Common Stock, the amount to be contributed shall be
determined pursuant to such method as shall be selected by the Committee and
communicated to the Participants.
4.6.8 Allocation and Investment. Subject to the limitations in
Section 4.6.1 and 4.7, the Employer Contributions made in respect of the
Matched Pre-Tax Contributions credited to each Active Participant's Account
upon receipt by the Trustee shall be credited to his or her Employer Account
upon receipt by the Trustee. To the extent that the Employer Contributions are
made in cash, they shall be invested in shares of Transamerica Common Stock.
4.6.9 Forfeitures. Amounts forfeited by former Active Participants
under Section 8.2 shall be determined monthly and applied to reduce the next
succeeding Employer Contributions, except to the extent necessary to provide
for the reinstatement of previously forfeited Employer Account balances in
accordance with Section 9. 1.
4.6.10 Participants Age 60 and Over. Effective as of February 1,
1993, each Participant who has attained at least age 60 may reallocate the
investment of his or her Employer Account. Such reallocation elections shall be
governed by Section 4.3.2.
4.6.11 Errors. Pursuant to Section 5.7, each Participant will receive
a quarterly statement of his or her Account transactions. Within 30 days of
receipt of that statement, each Participant must notify the Committee of any
error in the statement and provide any documents and/or information as the
Committee may require.
4.7 Limitations on Allocations.
4.7.1 Annual Addition Limitation. Notwithstanding any contrary Plan
provision, in no event shall the Annual Addition to any Participant's Account
for any Plan Year exceed the lesser of (a) $30,000 (or (if greater) 25% of the
dollar limitation in effect under section 415(b)(1)(A) of the Code), or (b)
25% of the Participant's Total Compensation for the Plan Year; provided,
however, that clause (b) shall not apply to Annual Additions described in
clauses (5) and (6) of Section 4.7.2(b).
4.7.2 Definitions. For purposes of this Section 4.7, the following
definitions shall apply:
22
<PAGE>
(a) "Affiliate" means a corporation, trade or business which is,
together with any Employer, a member of a controlled group of corporations
or an affiliated service group or under common control (within the meaning
of section 414(b), (c), (m) or (o) of the Code, as modified by section
415(h) of the Code), but (except for purposes of paragraph (d) below) only
for the period during which such other entity is so affiliated with any
Employer.
(b) "Annual Addition" means with respect to each Participant the sum
for a Plan Year of (1) the Participant's Pre-Tax Contributions to be
credited to the Participant's Pre-Tax Contribution Account; (2) any
Employer Contributions to be credited to the Participant's Employer
Account; (3) the share of all contributions made by all Employers and
Affiliates (including salary reduction contributions made pursuant to
section 401(k) of the Code) and any forfeitures to be credited to the
Participant's account under any Aggregated Plan; (4) any after-tax
employee contributions made by the Participant for the Plan Year under any
Aggregated Plan; (5) any amount allocated to the Participant's individual
medical account (within the meaning of section 415(l) of the Code) under
any defined benefit plan maintained by any Employer or Affiliate; and (6)
any amount attributable to post-retirement medical benefits which is
allocated pursuant to section 419A(d) of the Code to the Participant's
separate account under a welfare benefits fund (within the meaning of
section 419(e) of the Code) maintained by any Employer or Affiliate.
(c) "Total Compensation" means:
(1) The total of all wages, salaries, fees for professional
services and other amounts paid to an Employee by any Employer or
Affiliate for personal services actually rendered in the course of
employment, including (but not limited to) bonuses, overtime,
commissions and incentive compensation, but excluding (1) Pre-Tax and
Employer Contributions made on his or her behalf in accordance with
Sections 4 and 5, (2) any other salary reduction contributions made
pursuant to sections 125, 401(k) and 402(e)(3) of the Code, (3)
contributions made by an Employer or Affiliate to any other plan of
deferred compensation, to the extent that the contributions are not
includable in the gross income of the Participant for the taxable
year in which contributed; (4) contributions made by an Employer or
Affiliate on behalf of the Employee to a simplified employee pension
(as described in section 408(k) of the Code), to the extent that such
contributions are excluded from the Employee's gross income under
section 402(h) of the Code; (5) any distribution to the Employee from
a plan of deferred compensation, except any amount received from an
unfunded plan of deferred compensation that is includable in the
gross income of the Employee; (6) amounts realized from the exercise
of a non-qualified stock option; (7) amounts realized when restricted
stock or other property becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; (8) amounts realized
from the sale, exchange or other disposition of stock acquired under
a qualified stock option; and (9) other amounts that receive special
tax benefits, such as premiums for group-term life insurance (to the
extent that such amounts are not includable in the gross income
23
<PAGE>
of the Employee) or contributions made by an Employer or Affiliate
toward the purchase of an annuity contract (described in section
403(b) of the Code). This definition is intended to satisfy the
requirements of Treas. Reg. Section 1.415-2(d)(1) and (2); or
(2) Compensation calculated by the Committee in any other manner
which satisfies applicable requirements of Treas. Reg. Section
1.415-2(d).
(d) "Total Service " means with respect to each Participant the total
number of Plan Years in which he or she was an Employee of an Employer or
employed by an Affiliate.
4.7.3 Other Defined Contfibution Plans. All defined contribution
plans (terminated or not) maintained by any Employer or Affiliate shall be
considered as one plan in applying the limitations of this Section 4.7.
4.7.4 Defined Benefit Plans. If any Participant participates in both
this Plan and one or more defined benefit plans maintained by any Employer or
Affiliate for the same Plan Year, then:
(a) the ratio of (1) the sum of (A) the maximum amount that may be
allocated as an annual addition to his or her account under this Plan and
all other defined contribution plans under this Section 4.7 for the Plan
Year and (B) the Annual Additions actually made to his or her account
(subject to section 415(e)(4) of the Code) for all of his or her prior
Total Service to (2) the sum of the lesser of the following amounts
(determined for each Plan Year included in his or her Total Service):
(i) an amount equal to 35% of the Participant's Total
Compensation for the Plan Year, or
(ii) the product of 1.25 multiplied by the dollar limitation in
effect under section 415(c)(1)(A) and (d) of the Code for the Plan
Year;
when added to:
(b) the ratio of (1) his or her aggregate projected annual retirement
benefit under all such defined benefit plans (determined as of the end of
the Plan Year) to (2) the lesser of (A) an amount equal to 140 % of the
Participant's average Total Compensation for the three (3) consecutive
years included in his or her Total Service in which he or she had the
highest Total Compensation and was an active participant in any such
defined benefit plan or (B) the product of 1.25 multiplied by $90,000 (as
adjusted for cost of living increases in accordance with section 415(d) of
the Code),
shall not exceed 1.0; provided, however, that if Transamerica has made the
election provided in section 415(e)(6) of the Code, the amount determined
under section 415(e)(6) shall be substituted for the amount determined
under clause (a)(2) above for Plan Years ended prior to 1983.
24
<PAGE>
4.7.5 Adjustments. If, as a result of (1) a reasonable error in
estimating a Participant's Total Compensation, allocating forfeitures under any
Aggregated Plan or other circumstances which permit the application of this
Section 4.7.5, or (2) a reasonable error in determining the amount Pre-Tax
Contributions that may be made under the limits of this Section 4 .7, any of
the limitations of this Section 4.7 otherwise would be exceeded with respect to
any Participant for any Plan Year (after taking into account the transitional
rules applicable to the 1982 amendments to section 415 of the Code), then the
following actions, but only to the extent necessary to avoid exceeding such
limitations, shall be taken in the following order:
(a) Any after-tax employee contributions made by the Participant
under any Aggregated Plan for the Plan Year shall be returned to him or
her;
(b) In the circumstances described in clause (2) above, Unmatched
Pre-Tax Contributions shall be distributed to the Participant to the
extent required to reduce the excess annual addition to the Participant's
Account attributable to that circumstance;
(c) In the circumstances described in clause (2) above, Matched
Pre-Tax Contributions shall be distributed to the Participant to the
extent required to reduce the excess annual addition to the Participant's
Account attributable to that circumstance;
(d) The Participant's accrued benefit under any defined benefit plan
shall be frozen and/or the rate of its future accrual shall be reduced;
(e) Any Employer Contributions allocated to the Participant's
Employer Account under this Plan and/or any employer matching
contributions allocated to his account under any Aggregated Plan shall be
reallocated to a suspense account, and the balance credited to that
account shall be applied to reduce Employer Contributions or other
employer matching contributions (of the same class) otherwise to be made
for and reallocated to all eligible Participants or participants in the
Aggregated Plan for succeeding Plan Years in order of time; and
(f) The Participant's Unmatched Pre-Tax Contributions, Matched
Pre-Tax Contributions, or any salary reduction contributions made at the
Participant's election pursuant to section 401(k) of the Code under any
Aggregated Plan shall be reallocated to a suspense account and applied to
reduce such Pre-Tax Contributions or other salary reduction contributions
as otherwise are to be made thereafter at his or her election under this
or any Aggregated Plan.
4.7.6 Suspense Accounts. If a suspense account is created under
Section 4.7.5(e) and/or (f) and exists in a later Plan Year, the amount
allocated to the suspense account shall be reallocated to the Participant's
account before any amount may be contributed to this or any Aggregated Plan on
behalf of the Participant for that Plan Year. If the Participant for whom a
suspense account is maintained terminates employment with all Employers and
Affiliates before the suspense account balance has been reallocated pursuant to
Section 4.7.5, that balance shall be reallocated among the accounts of all
Participants who remain Employees on the first day of the next following Plan
Year, in direct proportion to each such Participant's share of the aggregate
25
<PAGE>
Total Compensation paid to all such Participants for the Plan Year of
termination (subject to the limitations of this Section 4.7), before any amount
may be contributed to this or any Aggregated Plan for the Plan Year of
reallocation. Suspense accounts shall not share in allocations of earnings
and gains (or-losses) of the Trust Fund. The balances credited to all suspense
accounts shall be returned to the Employers upon termination of the Plan.
SECTION 5
ACCOUNTING
5.1 Participants' Accounts. At the direction of the Committee, there shall
be established and maintained for each Participant, as appropriate:
(a) A Pre-Tax Account, to which shall be credited all Pre-Tax
Contributions paid to the Trust Fund under Section 4.1;
(b) An Employer Account, to which shall be credited all Employer
Contributions paid to the Trust Fund under Section 4.6;
(c) An After-Tax Account, to which shall be credited any After-Tax
Contributions paid to the Trust Fund on his or her behalf prior to January
1, 1987 (if any); and
(d) If the Participant has an outstanding loan in accordance with
Section 7.6, a Loan Account to which shall be credited the amounts
described in Section 5.4.
5.2 Investment Eamings. Each Participant's Account shall initially reflect
the value of the Participant's interests in each of the Investment Funds which
interests were acquired with the amounts credited thereto. Each Participant's
Account also shall be credited periodically with the net earnings and gains (or
losses) with respect to the investments made by his or her Account. Any such
net earnings or gains realized with respect to any investment of any
Participant's Account shall be reinvested in additional amounts of the same
investment and credited to the Participant's Account. Temporary cash balances
arising from time to time in any Participant's Account, pending the investment,
reinvestment or distribution of such Account, shall be held in cash or invested
by the Trustee where feasible in units of the commingled short-term investment
fund maintained by the Trustee.
5.3 Accounting Methods. The accounting methods or formulae to be used
under the Plan for the purpose of maintaining the Participants' Accounts shall
be determined by the Committee.
5.3.1 Accounting During Conversion Period. The Committee and Trustee
may use any reasonable accounting methods in performing their respective duties
during any period during which there is a change in accounting systems (the
"Conversion Period"). This includes, but is not limited to, the method for
allocating net investment gains or losses and the extent, if
26
<PAGE>
any, to which contributions received by and distributions paid from the Trust
during this period share in such allocation.
5.3.2 Moratorium. Notwithstanding any contrary Plan provision, during
any period in which Participant Account information and account balances are
being reconciled and recordkeeping systems are being tested in connection with
the transition to a daily valuation services, the Committee may impose a
moratorium or other limitations on distributions, withdrawals, loans,
investment allocations and reallocations and other Participant Account
transactions.
5.4 Participant Loans. In the event a loan is to be made to a Participant
in accordance with Section 7.6, the Committee shall direct that an amount, in
cash (or its equivalent), equal to the amount of the loan be reallocated within
the Participant's Account from subaccounts other than the Loan Account to the
Loan Account. Interest and principal payments on loans made to a Participant
shall be allocated to the Participant's Loan Account as received by the Trustee
and, after appropriate adjustments have been made to the Loan Account
reflecting such payments, shall be reallocated among such other subaccounts in
the Participant's Account. The order in which amounts are reallocated from the
Loan Account to other subaccounts in the Participant's Account, or to the Loan
Account from other subaccounts, shall be determined in accordance with uniform
and nondiscriminatory procedures adopted by the Committee and modified by it
from time to time. Amounts reallocated to the Participant's remaining
subaccount from the Loan Account shall be invested according to the
Participant's most recent investment directions for his or her Pre-Tax
Contributions (if any) to the Plan.
5.5 Valuations and Reports. The fair market value of each Participant's
Account shall be determined as of each Valuation Date. In making such
determinations and in crediting net earnings and gains (or losses) in the
Investment Funds to the Participants' Accounts, the Committee (in its
discretion) may employ, and may direct the Trustee to employ, such accounting
methods as the Committee (in its discretion) may deem appropriate in order
fairly to reflect the fair market values of the Investment Funds and each
Participant's Account. For this purpose the Trustee and the Committee (as
appropriate) may rely upon information provided by the Committee, the Trustee
or other persons believed by the Trustee or the Committee to be competent. The
value of the interest of any Participant's Account in the Transamerica Common
Stock Fund shall be measured in units (rather than shares of Common Stock) in
such manner as the Committee (in its discretion) shall specify.
5.6 Valuation of Transamerica Common Stock. For all purposes of the Plan,
the Trustee shall determine the fair market value of a share of Transamerica
Common Stock, which, as of any date, shall be determined (a) by the closing
price of Transamerica Common Stock as reported on the New York Stock Exchange
Composite Index for the day or days preceding the date of the transfer as may
be designated by the Committee in a uniform or nondiscriminatory manner, or (b)
pursuant to such other method as shall be selected by the Committee and
communicated to the Participants.
5.7 Statements of Participant's Accounts. Each Member shall be furnished
with periodic statements of his or her interest in the Plan, at least
quarterly.
27
<PAGE>
SECTION 6
DISTRIBUTIONS
6.1 Events Permitting Distribution. Distribution of the balance credited
to a Participant's Account shall be made only in the following circumstances:
6.1.1 Upon the Participant's retirement in accordance with the
provisions of his or her Employer's retirement program, but only if such
retirement constitutes a "separation from service" within the meaning of
section 401(k)(2)(B)(i)(I) of the Code;
6.1.2 Upon termination of the Participant's employment from all
Employers and Affiliates by reason of death or upon the cessation of his or her
active employment from all Employers and Affiliates by reason of Disability;
6.1.3 Upon termination of the Participant's employment with all
Employers and Affiliates (whether by reason of resignation, dismissal or
otherwise) for any reason other than those specified in Sections 6.1.1 and
6.1.2, but only to the extent provided in Section 6.2, and only if such
termination constitutes a "separation from service" within the meaning of
section 401(k)(2)(B)(i)(I) of the Code;
6.1.4 Upon the Committee's approval of the Participant's application
for a withdrawal from his or her Account, to the limited extent provided in
Sections 7.1 through 7.5, or in accordance with Section 7.6;
6.1.5 In the case of an Alternate Payee (as defined in Section 7.7.1),
as directed in a domestic relations order which the Committee determines is
a QDRO (as defined in Section 7.7), but only as to the portion of the
Participant's Account which the QDRO states is payable to the Alternate Payee;
or
6.1.6 In the case of a Participant who attains age 70 1/2 during or
after 1988, by December 31 of the calendar year in which he or she attains age
70 1/2.
6.2 Times for Distribution. Subject to the consent provisions. of Section
6.3 and except as provided in Section 7.7 (relating to QDROs), distributions
from a Participant's Account shall occur at the following times:
6.2.1 Retirement or Disability. Distributions arising from a
Participant's retirement or Disability shall be made as soon as practicable
after the distribution event occurs.
6.2.2 Death. Distributions arising from a Participant's death shall
be made at the time specified in Section 6.8.
6.2.3 Employment Termination. Distributions arising from the
termination of a Participant's employment as described in Section 6.1.3 shall
be made as soon as practicable after the termination.
28
<PAGE>
6.2.4 Withdrawals. Distributions arising from a Participant's
exercise of her withdrawal rights shall occur at the times set forth in Section
7.2, 7.3 or 7.4 (whichever applies).
6.2.5 Deadline. All distributions shall be made no later than the
date specified in Section 6.6.2, and any subsequent allocations to the Account
shall be distributed by the end of the calendar year in which such allocations
are credited. In the case of a Participant who attains age 70 1/2 in 1996 or a
later Plan Year, and remains an Employee, such Participant may elect to receive
a distribution by December 31 of the year in which he or she reaches age 70
1/2, or may defer the distribution until the end of the calendar year in which
he or she terminates employment with all Employers and Affiliates.
6.3 Consent Requirements. Notwithstanding the provisions of Section 6.2,
no portion of a Participant's Account shall be distributed to the Participant,
unless the consent provisions of this Section 6.3 are satisfied. If the vested
balance credited to a Participant's Account is distributed to him or her on
account of his or her retirement, Disability, or other termination of
employment (as described in Sections 6.1.1, 6.1.2 and 6.1.3), and such vested
balance exceeded $3,500 as of the next preceding Valuation Date (or the date of
any prior withdrawal or distribution to the Participant), no portion of the
Participant's Account shall be distributed to the Participant, until the date
specified in Section 6.6.2, unless the Participant consents to an earlier
distribution.
6.4 Form of Distribution.
6.4.1 Cash. With respect to any portion of a Participant's Account as
is not invested in Transamerica Common Stock, any distribution from such
portion of the Account shall be made in the form of a single lump sum payment
of cash (or its equivalent) equal to the vested balance credited to such
portion of the Account as of the relevant Valuation Date; provided, however,
that the Participant or beneficiary may elect to receive the distribution
entirely in the form of Transamerica Common Stock.
6.4.2 Transamerica Common Stock. Any distribution from such portion
of a Participant's Account as is invested in the Transamerica Common Stock Fund
as of the Valuation Date shall be made in the form of a single lump sum
payment, as elected by the distributee, in-
(a) Such whole number of shares of Transamerica Common Stock as is
equivalent to the full value of the units of the Transamerica Common Stock
Fund then credited to such portion of the Account; or
(b) Cash (or its equivalent) equal to the full value of the units of
the Transamerica Common Stock then credited to such portion of the
Account.
6.4.3 Fractional Shares. If shares of Transamerica Common Stock are
to be distributed, only full shares shall be distributed and cash (or its
equivalent) shall be distributed in lieu of any fractional share.
29
<PAGE>
6.4.4 Uninvested Amounts. Whenever a distribution is made, subject to
the right of the Participant (or beneficiary) to elect to have the entire
distribution made in the form of Transamerica Common Stock, the Participant's
Pre-Tax and/or After-Tax Contributions, to the extent not theretofore invested
pursuant to Section 4.3, shall be returned to the Participant or, in the event
of death, paid to his or her beneficiary in accordance with Section 6.8, in
cash.
6.5 Direct Rollovers. Subject to the provisions of this Section 6.5 and
such procedures as the Committee may designate (and modify from time to time),
a Participant (or beneficiary) may elect to have all or part of his or her
distribution paid directly to the trustee or custodian of another qualified
retirement plan or individual retirement account ("IRA"), as a direct rollover
of the distribution in accordance with section 401(a)(31) of the Code.
6.5.1 Ineligible Distributions. Notwithstanding the foregoing, the
following portions (if any) of a distribution shall not be eligible to be
directly rolled over: (a) the portion of any distribution that is required to
be made under section 401(a)(9) of the Code (relating to certain distributions
to Participants after age 70 1/2 and certain death distributions to
beneficiaries); and (b) the portion that represents the return of a
Participant's After-Tax Contributions.
6.5.2 Partial Rollovers. If a Participant or beneficiary (a) elects
to have less than 100% of the distribution directly rolled over, or (b) elects
a rollover to more than one qualified retirement plan or IRA, the minimum
amount that may be directly rolled over to a single plan or IRA shall be $500.
6.5.3 Form of Rollovers. All rollovers under this Section 6.5 shall
be subject to the provisions of Section 6.4 (regarding the permissible forms of
distribution from the Plan).
6.5.4 Waiver of 30-day Notice Requirement. A distribution may
commence less than 30 days after the notice required under Treas. Reg.
1.411(a)-11(c) is given to the Participant (or beneficiary), provided that (a)
the Participant (or beneficiary) is clearly informed that he or she has a right
to consider, for a period of at least 30 days after receiving the notice, a
decision on whether to elect a distribution (and, if applicable, a particular
distribution option), and (b) the Participant (or beneficiary), after receiving
the notice, affirmatively elects a distribution.
6.6 Special Distribution Rules. The following special rules shall apply to
all distributions under the Plan.
6.6.1 No Life Annuities. In no event shall any distribution under
this Plan be made in the form of a life annuity.
6.6.2 Deferral Limitation. In no event shall any distribution under
this Plan be deferred beyond the end of the calendar year in which the
Participant attains age 70 1/2 or terminates his or her employment with all
Employers and Affiliates (whichever is later).
30
<PAGE>
6.6.3 Premature Distributions. Despite the fact that a penalty tax
may be imposed under section 72(t) of the Code on certain distributions
(including withdrawals) paid from any Participant's Account before the date the
Participant dies, becomes disabled (within the meaning of section 72(m)(7) of
the Code), attains age 59 1/2, or separates from service during or after
the calendar year in which he or she attains age 55, such premature
distributions may be made if (but only to the extent) permitted under
applicable Plan provisions and such distribution policies or practices as may
be established by the Committee.
6.7 Beneficiary Designations. Each Participant may designate, in a signed
writing delivered to the Committee on such form as it may prescribe, one or
more beneficiaries to receive any distribution which may become payable as the
result of the Participant's death.
6.7.1 Spousal Consent. If a Participant designates a person other
than his or her spouse as a primary beneficiary, the designation shall be
ineffective unless the Participant's spouse consents to the designation. Any
spousal consent required under this Section 6.7 shall be ineffective unless it
(a) is set forth in writing, (b) acknowledges the effect of the Participant's
designation of the other person as a primary beneficiary of the Participant
under the Plan, and (c) is signed by the spouse and witnessed by an authorized
agent of the Committee or a notary public. Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of the
Committee that such written consent may not be obtained because there is no
spouse or the spouse cannot be located, his or her designation shall be
effective without spousal consent. Any spousal consent required under this
Section 6.7 shall be valid only with respect to the spouse who signs the
consent.
6.7.2 Changes, Failed Designations and Payment to Successive
Beneficiaries. A Participant may designate different beneficiaries at any time
by delivering a new designation in like manner. Any designation shall become
effective only upon its receipt by the Committee. If a Participant dies without
having designated a beneficiary, the Participant's beneficiary designation does
not satisfy the requirements of the Plan, or if the Designated Beneficiary does
not survive the Participant, the Participant's Account shall be payable to the
surviving person or persons in the first of the following classes of successive
preference beneficiaries of which a member survives the Participant: The
Participant's (a) spouse, (b) children, including legally adopted children, (c)
parents, (d) brothers and sisters, (e) estate. In determining such person or
persons, reliance may be made upon an affidavit by a member of any of any of
the classes of preference beneficiaries. Payment based upon such affidavit
shall be full acquittance of any benefit payable under the Plan unless, before
such payment is made, the Plan has received written notice of a valid claim by
some other person. If two or more persons become entitled to benefits as
preference beneficiaries, they shall share equally.
6.7.3 Alternate Payees. Each Alternate Payee (as defined in Section
7.7.1) under a domestic relations order which the Committee has determined to
be a QDRO (as defined in Section 7.7) may designate, on such form and in such
manner as the Committee may prescribe, one or more beneficiaries to receive any
distribution which may become payable as the result of the Alternate Payee's
death. An Alternate Payee may designate different beneficiaries at any time by
delivering a new designation in like manner. Any designation shall become
effective only upon its receipt by the Committee and the last effective
designation received by the
31
<PAGE>
Committee shall supersede all prior designations. Any designation must be
consistent with the terms of the QDRO. If an Alternate Payee dies without
having designated a beneficiary, the Alternate Payee's beneficiary designation
does not satisfy the requirements of the Plan, or if the Designated
Beneficiary does not survive the Alternate Payee, the Alternate Payee's
remaining interest in the Plan shall be payable to his or her estate.
6.8 Death Distributions. Upon the death of a Paiticipant, distribution of
the balance credited to his or her Account shall be made in accordance with
this Section 6.8.
6.8.1 Post-Commencement Death. If a Participant dies after
distribution of his or her Account has commenced but before the entire balance
of the Account has been distributed, then the remainder shall be distributed
to his or her beneficiary in a lump sum payment as soon as practicable after
the date of death.
6.8.2 Pre-Commencement Death. If the Participant dies before
distribution from his or her Account has commenced (whether or not the
Participant had previously terminated employment), the entire balance of the
Participant's Account shall be distributed to the Participant's beneficiary, at
such time as the beneficiary shall elect, (a) within five (5) years after the
Participant's death or, (b) if the Participant's surviving spouse is his or her
Designated Beneficiary, by the end of the calendar year in which the
Participant would have attained age 70 1/2 (or, if later, by the end of the
calendar year in which the Participant terminated employment with all Employers
and Affiliates by reason of death).
6.8.3 Child Beneficiaries. To the extent that the timing of a payment
would be permissible under clause (b) of Section 6.8.2 if such payment were to
be made to the Participant's surviving spouse, such timing shall also be
permissible for a payment which is to be made to any minor child who is the
Designated Beneficiary of the Participant, if such payment is made prior to the
time the child attains age 19 or is no longer a student and a dependent
(determined in accordance with sections 151(e) and 152 of the Code).
6.8.4 Surviving Spouse Beneficiaries. If any portion of the
Participant's Account is payable to the Participant's surviving spouse as a
Designated Beneficiary, and such spouse dies before distributions have
commenced to him or her, then the distribution of such portion of the
Participant's Account shall be completed within five (5) years after the
spouse's death.
6.8.5 Trust Beneficiaries. To the extent permitted by section
401(a)(9) of the Code, if any portion of a Participant's Account is payable to
a trust, and the beneficiaries of the trust include the Participant's
surviving spouse and/or children, the timing rules in this Section 6.8 shall
apply as if such payment were to be made directly to such surviving spouse
and/or children.
6.8.6 For purposes of this Section 6.8, a "Designated Beneficiary"
means an individual who is designated by the Participant as his or her
beneficiary in accordance with Section 6.7.
32
<PAGE>
6.9 Payments to Incompetents. If any individual to whom a benefit is
payable under the Plan is a minor, or if the Committee determines that any
individual to whom a benefit is payable under the Plan is incompetent to
receive such payment or to give a valid release therefor, payment shall be made
to the guardian, committee or other representative of the estate of such
individual which has been duly appointed by a court of competent jurisdiction.
If no guardian, committee or other representative has been appointed, payment
may be made to any person as custodian for such individual under the California
Uniform Transfers to Minors Act (or similar law of another state) or may be
made to or applied to or for the benefit of the minor or incompetent, the
incompetent's spouse, children or other dependents, the institution or persons
maintaining the minor or incompetent, or any of them, in such proportions as
the Committee from time to time shall determine; and the release of the person
or institution receiving the payment shall be a valid and complete discharge of
any liability of the Plan with respect to any benefit so paid.
6.10 Effect of Disability. If the active employment of a Participant
ceases at any time on account of his or her Disability, the Participant shall
be deemed for all purposes of this Plan to have retired under his or her
Employer's retirement program on the date his or her active employment ceases
by reason of Disability. In such event the former Participant's Employer
Account shall be 100% vested and the entire balance credited to his or her
Account shall be distributable to him or her in the manner and at the times set
forth in this Section 6.
6.11 Undistributable Accounts. Each Participant and (in the event of
death) his or her beneficiary shall keep the Committee advised of his or her
current address. If the Committee is unable to locate the Participant or
beneficiary to whom a Participant's Account is payable under this Section 6,
(a) the Participant's Account shall be closed 35 months after the date the
Account first became distributable to such Participant or beneficiary and (b)
the balance credited to the Account shall be applied in the same manner as
forfeitures under Section 4.6.9. If the Participant or beneficiary whose
Account was closed under the preceding sentence subsequently files a claim for
distribution of his or her Account, and if the Committee determines that such
claim is valid, then the balance previously removed upon closure of the Account
shall be restored to the Account by means of a special contribution which shall
be made to the Trust Fund by the last Employer of the Participant.
6.12 Right of First Refusal. In the event that shares of Transamerica
Common Stock are distributed that are not publicly traded, such shares may, as
determined by the Committee, be subject to a "right of first refusal". Such a
right shall provide that, prior to any subsequent transfer, the shares must
first be offered by written offer to Transamerica, and then, if refused by
Transamerica, to the Trust Fund. The purchase price and other terms must not be
less favorable to the seller than the greater of (a) the fair market value of
the shares, as determined by an independent appraiser (appointed by the Board
of Directors), or (b) the price and other terms offered by a buyer, other than
an Employer or the Trust Fund, making a good faith offer to purchase the
shares. The right of first refusal must lapse no later than 14 days after the
seller gives written notice to Transamerica that an offer by a third party to
purchase the shares has been received.
33
<PAGE>
SECTION 7
WITHDRAWALS, PARTICIPANT LOANS AND DOMESTIC RELATIONS ORDERS
7.1 General Withdrawal Rules. Subject to the provisions of this Section 7,
a Participant may make withdrawals from his or her Accounts (other than his or
her Employer Account) in accordance with Sections 7.2 through 7.4. In no event
may a Participant, prior to termination of his or her employment with all
Employers and Affiliates, make any withdrawal or receive a distribution from
his or her Employer Account.
7.2 Hardship Withdrawals. A Participant who is either an Employee or a
Divested Participant may make a request for a financial hardship withdrawal
from his or her Pre-Tax Account, subject to the provisions of Section 7.5.
7.2.1 Applications. Each application by a Participant for a financial
hardship withdrawal from his or her Pre-Tax Account shall be submitted to the
Committee in writing and on such forms as the Committee may designate. Action
upon any such application shall be taken by the Committee in accordance with
the rules set forth in this Section 7.2. A hardship withdrawal will be granted
only if the Committee, after considering all relevant facts and circumstances
and applying the objective standards of this Section 7 in a nondiscriminatory
manner, determines an immediate and heavy financial need exists and that the
amount to be withdrawn is not in excess of the amount necessary to meet the
need.
7.2.2 Immediate and Heavy Financial Need. A withdrawal under this
Section 7.2 shall be permitted only for an immediate and heavy financial need.
For purposes of this Section 7.2, only the following shall be deemed to
constitute immediate and heavy financial needs:
(a) Unreimbursed medical expenses described in section 213(d) of the
Code incurred by the Participant, the Participant's spouse, or the
Participant's dependents (as defined in section 152 of the Code);
(b) Purchase (excluding any mortgage payments) of a principal
residence of the Participant;
(c) Payment of tuition for the next semester, quarter or other
segment of post-secondary education for the Participant, the Participant's
spouse, children, or dependents;
(d) A payment to prevent the eviction of the Participant from his or
her principal residence or to prevent the foreclosure on the mortgage on
the Participant's principal residence;
(e) Funeral expenses of a family member;
(f) Loss of income due to disability of the Participant or the
Participant's spouse;
34
<PAGE>
(g) Excessive debt, such that basic living expenses of the
Participant cannot be met unless the debt is immediately reduced;
(h) Back taxes (including penalties and interest) that are
immediately due and payable;
(i) Motor vehicle repairs or purchase of a motor vehicle required for
transportation to work;
(j) Expenses to repair damage from natural causes (storm, earthquake,
etc.) to the Participant's principal residence, to the extent not covered
by insurance;
(k) Expenses to repair and/or maintain habitability and prevent
serious deterioration (serious roof leaks, dry rot, etc.) to the
Participant's principal residence;
(1) Expenses for remodeling to expand the size of the Participant's
principal residence to meet the needs of his or her growing family; and
(m) Such other events or circumstances as are designated by the
Commissioner of Internal Revenue as immediate and heavy financial needs
for purposes of section 401(k) (2) (B) of the Code, through the
publication of revenue rulings, notices, and other documents of general
applicability.
7.2.3 Payment Amount. The amount that may be withdrawn at any one
time shall not exceed the lesser of (a) 100% of the balance credited to the
Participant's Pre-Tax Account (valued at the date the approved financial
hardship withdrawal is processed by the Trustee), or (b) the amount required to
meet the financial obligations created by the immediate and heavy financial
need forming the basis for the withdrawal. Notwithstanding the foregoing, (a)
for withdrawals made during and after the 1989 Plan Year, no amounts
attributable to earnings credited to the Participant's Pre-Tax Account for
periods after December 31, 1988 may be withdrawn, and (b) the amount of a
withdrawal may be increased by the amount of income taxes and/or penalty taxes
reasonably expected to result from the withdrawal.
7.2.4 Other Distributions. In addition to the requirements of Section
7.5.2 (requiring the distribution of all other distributions available to the
Participant under this Plan prior to a hardship withdrawal under this Section
7.2), a hardship withdrawal shall not be available to a Participant under this
Section 7.2 unless he or she has obtained all distributions, other than
hardship distributions, Currently available to the Participant underthis Plan
and all other tax-qualified plans maintained by any Employer or Affiliate.
7.2.5 Loans and Certifications. In addition to the requirements of
Section 7.5.2 (requiring the distribution of all other distributions available
to the Participant under this Plan prior to a hardship withdrawal under this
Section 7.2), a hardship withdrawal shall not be available to a Participant
under this Section 7.2 unless the Participant:
35
<PAGE>
(a) Has obtained (without incurring further hardship) all nontaxable
loans currently available to the Participant under the Plan and all other
tax-qualified plans maintained by any Employer or Affiliate; and
(b) Certifies in writing in such form as the Committee may designate
that the Participant's need cannot reasonably be relieved: (1) through
reimbursement or compensation by insurance or otherwise, (2) by
liquidation of the Participant's assets, (3) by cessation of the
Participant's Pre-Tax Contributions to the Plan, or (4) by other
distributions or nontaxable (at the time of the loan) loans from the Plan
and all other tax-qualified plans maintained by any Employer or Affiliate,
or by borrowing from commercial sources on reasonable commercial terms, in
an amount sufficient to satisfy the need. For purposes of this Section
7.2.5(b), the Participant's assets shall be deemed to include the assets
of his or her spouse and children that are reasonably available to the
Participant. In addition, a need cannot reasonably be relieved by one of
the actions specified in this Section 7.2.5(b) if the effect would be to
increase the amount of the need . For example, the need for funds to
purchase a principal residence cannot reasonably be relieved by a Plan
loan if the loan would disqualify the employee from obtaining other
necessary financing.
7.2.6 Withdrawals Limited to Once in 12 Months. Except for
withdrawals described in Section 7.2.2(c), (relating to tuition payments), no
more than one financial hardship withdrawal under this Section 7.2 shall be
permitted during any 12 calendar months.
7.2.7 Effect of Withdrawal on Stock Options. Notwithstanding any
contrary Plan provision, a Participant shall not receive a financial hardship
withdrawal under this Section 7.2 unless, for each period during which his or
her active participation is suspended pursuant to Section 7.5.3(a), the
Participant agrees not to exercise any option for Transamerica Common Stock
issued to him or her under a plan maintained by Transamerica or any Affiliate;
provided, however, that the Participant shall be permitted to exercise any such
option if the Committee determines that (a) such exercise (including a
particular manner of exercise) would be consistent with the requirements of
Treasury Regulation section 1.401(k)-l(d)(2)(iii)(B), as amended from time to
time (the "Safe Harbor"), or (b) under the circumstances then prevailing,
satisfaction of the requirements of the Safe-Harbor is not necessary to ensure
the continued tax qualification of the Plan.
7.3 After-Tax and Rollover Accounts. A Participant who has an After-Tax
Account and/or Rollover Account may make withdrawals from his or her After-Tax
Account and/or Rollover Account by making a withdrawal request on such form and
in such manner as the Committee may designate. A Participant may make a
withdrawal under this Section 7.3 no more than once each calendar month;
provided, however, that withdrawals made at the same time shall be considered a
single withdrawal.
7.3.1 Payment Amount. The amount of any withdrawal under this Section
7.3. shall not exceed 100% of the balance credited to the Participant's
After-Tax and/or Rollover Accounts. For purposes of this Section 7.3.1, the
After-Tax and/or Rollover Account balance shall be determined as of the date
the withdrawal is processed by the Trustee.
36
<PAGE>
7.4 [Reserved]
7.5 Terms and Conditions Governing Withdrawals. Any withdrawal made under
Sections 7.2 through 7.4 shall be subject to the following conditions:
7.5.1 Form of Payment. The amount of any withdrawal under Sections
7.2 through 7.4 shall be distributed in a lump sum cash payment.
7.5.2 Priorities. A Participant may not make a financial hardship
withdrawal under Section 7.2 from his or her Pre-Tax Account unless he or she
has withdrawn or at the same time withdraws the entire balances credited to his
or her After-Tax and Rollover Accounts pursuant to Sections 7.3 and 7.4.
7.5.3 Suspension. Notwithstanding any contrary Plan provision, the
active participation of a Participant who makes a withdrawal under Section 7.2
and/or a financial hardship withdrawal from his or her pre-tax accounts (if
any) under any other plan maintained by Transamerica or any Affiliate which
includes a "cash or deferred arrangement" under section 401(k) of the Code
shall be suspended (or further suspended if the withdrawal is made during
another mandatory suspension period) as to Pre-Tax Contributions for a period
of 12 months. No such suspension shall apply to any Participant whose
application for a withdrawal under Section 7.2 is granted by the Committee on
or after July 1, 1996.
7.6 Participant Loans. The Committee shall direct the Trustee to make
loans to Participants who are (a) Employees (other than Inactive Employees)
and/or (b) "parties in interest" under section 3(14) of ERISA with respect to
the Plan. Such loans shall be made only in accordance with uniform and
nondiscriminatory procedures adopted by the Committee (and modified by it from
time to time), which procedures shall (a) be in writing, (b) form a part of the
Plan, and (c) comply with 29 C.F.R. Section 2550.408b-1.
37
<PAGE>
7.7 Qualified Domestic Relations Orders. The Committee shall establish
written procedures for determining whether a domestic relations order
purporting to dispose of any portion of a Participant's Account is a qualified
domestic relations order (within the meaning of section 414(p) of the Code) (a
"QDRO").
7.7.1 No Payment Unless a QDRO. No payment shall be made to any
person designated in a domestic relations order (an "Alternate Payee") until
the Committee (or a court of competent jurisdiction reversing an initial
adverse determination by the Committee) determines that the order is a QDRO.
Payment shall be made to each Alternate Payee as specified in the QDRO.
7.7.2 Immediate Payment Permitted. Payment may be made to an
Alternate Payee, in accordance with the QDRO, at any time beginning as soon as
practicable after the QDRO determination is made, without regard to whether the
distribution, if made to a Participant at the time specified in the QDRO, would
be permitted under the terms of the Plan.
7.7.3 Delayed Payment. If the QDRO does not provide for immediate
payment to an Alternate Payee, the Committee shall maintain a separate
subaccount to record the Alternate Payee's interest in the Participant's
Account. All investment decisions with respect to amounts credited to the
subaccount shall be made by the Alternate Payee in the manner provided in
Section 4.3. Distributions to Alternate Payees shall be made as soon as
reasonably practicable after the earliest of:
(a) The date when the Alternate Payee consents in writing to the
distribution;
(b) The date specified in the QDRO; or
(c) The Alternate Payee's 65th birthday.
7.7.4 Hold Procedures. Notwithstanding any contrary Plan provision,
prior to the receipt of a domestic relations order, the Committee may, in its
sole discretion, place a hold upon all or a portion of a Participant's Account
for a reasonable period of time (as determined by the Committee) if the
Committee receives notice that (a) a domestic relations order is being sought
by the Participant, his or her spouse, former spouse, child or other dependent
and (b) the Participant's Account is a source of the payment under such
domestic relations order. For purposes of this Section 7.7.4, a "hold" means
that no withdrawals, loans, distributions, or investment transfers may be made
with respect to a Participant's Account. If the Committee places a hold upon a
Participant's Account pursuant to this Section 7.7.4, it shall inform the
Participant of such fact.
38
<PAGE>
SECTION 8
VESTING AND TERMINATION OF EMPLOYMENT
8.1 Vesting in Participant Contributions. A Participant's interest(s) in
his or her Pre-Tax, After-Tax and Rollover Accounts at all times shall be 100%
vested and nonforfeitable. Upon termination of the Participant's employment
with all Employers and Affiliates for any reason at any time, the balance(s)
credited to his or her Pre-Tax, After-Tax and Rollover Accounts shall be
distributable to the Participant in the manner and at the times set forth in
Section 6.
8.2 Vesting in Employer Contributions. A Participant's interest in his or
her Employer Account shall be vested in accordance with the following schedule:
Number of Years Vested Percentage
of Vesting Service of Employer Account
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
8.2.1 Termination and Forfeiture. Upon termination of the
Participant's employment with all Employers and Affiliates for any reason at
any time, the vested portion of his or her Employer Account shall be
distributable to him or her in the manner and at the times set forth in Section
6. The nonvested portion (if any) of his or her Employer Account shall be
forfeited as of the earliest of the following dates:
(a) The date on which the vested portion of the Participant's Account
is distributed;
(b) The date on which the Participant separates from service with all
Employers and Affiliates when he or she has no vested interest in his or
Employer Account, at which point the Participant shall be deemed to have
received a distribution of zero dollars ($0.00); or
(c) The date on which the Participant incurs five (5) consecutive
one-year Breaks in Service following his or her separation from service
with all Employers and Affiliates.
Any such forfeiture shall be subject to the reinstatement provisions of Section
9. All forfeitures shall be credited against subsequent Employer Contributions
as provided in Section 4.6.9.
8.2.2 Normal Retirement Age. Notwithstanding the foregoing, each
Participant who reaches Normal Retirement Age (or older) while he or she is an
Employee shall have a 100% vested and nonforfeitable interest in his or her
Employer Account.
39
<PAGE>
8.2.3 Death. Notwithstanding the foregoing, each Participant who dies
while he or she is an Employee shall have a 100% vested and nonforfeitable
interest in his or her Employer Account.
8.2.4 Effective Date. The provisions of this Section 8.2 shall apply
to any Participant who has at least one Hour of Service on or after April 1,
1996 (the "Effective Date"). The vested interest of any Participant who
terminated service with all Employers and Affiliates prior to the Effective
Date shall be determined under the terms of the Plan as in effect on the date
of his or her termination. If a Participant who terminated service prior to the
Effective Date is reemployed by an Employer or Affiliate after the Effective
Date, the provisions of this Section 8.2 shall apply only with respect to (a)
amounts not previously forfeited as of the date of reemployment, (b) amounts
reinstated to his or her Employer Account after the date of reemployment in
accordance with Section 9, and (c) amounts allocated to his or her Employer
Account after the date of reemployment.
8.2.5 No Decrease in Vesting. Notwithstanding any contrary Plan
provision, the vested percentage of a Participant's Employer Account, as
determined under this Section 8.2 as amended effective April 1, 1996, shall not
at any time be less than such percentage determined without regard to such
amendment.
8.3 Transfers of Employment. The transfer of a Participant from employment
with an Employer to employment with another Affiliate shall not constitute a
termination of employment under the Plan. Upon termination of his or her
employment with such other Affiliate (other than for transfer to employment
with another Affiliate), the former Participant's employment shall be deemed
then to have terminated under the Plan.
8.4 Vesting Schedule Amendment. If the vested percentage of the Employer
Account of any Participant who is credited with at least three (3) Years of
Vesting Service would be less (as to future Employer Contribution allocations)
as the result of either an amendment to Section 8.2 or the Plan's becoming and
thereafter ceasing to be a Top-Heavy Plan (as defined in Section 14.1), then
each such Participant may elect, within a reasonable time after the amendment
is adopted or the cessation occurs, to have his or her vested percentage
determined under the Plan without regard to the amendment or cessation. The
period during which the election may be made shall begin on the date the
amendment is adopted or the cessation occurs and shall end on the later of (a)
60 days after such date, (b) 60 days after the amendment becomes effective, or
(c) 60 days after written notice of the amendment or cessation is issued to the
Participant.
40
<PAGE>
SECTION 9
REPAYMENTS AND REINSTATEMENTS
9.1 Forfeitures and Reinstatements.
9.1.1 Repayment. A Rehired Employee who suffered a forfeiture of all
or a portion of his or her Employer Account, and who did not incur five (5)
consecutive one-year Breaks in Service between the date his or her employment
terminated and his or her Date of Rehire, shall be entitled, upon again
becoming an Active Participant in the Plan, to repay to the Plan in cash the
dollar value of the amount that was distributed to him or her.
9.1.2 Reinstatement. Upon making a cash repayment in accordance with
Section 9.2 of the portion of his or her Employer Account that was distributed
to him or her, the Participant shall be entitled to reinstatement of the prior
forfeiture to his or her Employer Account. If the Participant makes the cash
repayment, his or her After-Tax Account shall reflect such amount as is
attributable to the repayment and his or her Employer Account shall reflect
such amount as is attributable to the reinstatement. The Participant's vested
interest in the portion of his or her Employer Account attributable to the
reinstatement shall be determined separately by applying the vesting schedule
set forth in Section 8.2 to the portion(s) of such Account attributable to the
reinstatement so as to reflect the prior distribution and repayment.
9.2 Repayments. Any cash repayment permitted under Section 9.1 must be
made in one lump sum within five years after his or her Date of Rehire. The
Participant shall determine in accordance with Section 4.3 how any such cash
repayment shall be invested. Repayments made in accordance with this Section
9.2 shall be allocated to the Participant's After-Tax Account and shall not be
taken into account for the purpose of determining the amount of any Employer
Contributions under Section 4.6 or applying the limitations provided in Section
4.7.
9.2.1 Special 60 Day Repayment Rule. Notwithstanding any contrary
provision of this Section 9, an Active Participant whose Date of Rehire is
within 60 days after the date on which he or she received a distribution from
the Plan (the "Distribution Date") may make a repayment permitted under Section
9.1 by, within 60 days after the Distribution Date, furnishing to the Plan the
Transamerica Common Stock certificate (if any) and check (if any) that were
distributed to the Participant from the Plan. Amounts repaid pursuant to this
Section 9.2.1 shall be credited to the Accounts from which they were paid;
provided, however, that (a) for the period during which amounts repaid in cash
(or by check) were not held in the Trust Fund, such amounts shall not be taken
into account for purposes of crediting investment earnings and losses, and (b)
the repaid amounts shall not again be taken into account for the purpose of
determining the amount of any Employer Contributions under Section 4.6 or
applying the limitations provided in Section 4.7.
9.2.2 Special Rollover Repayment Rule. Notwithstanding any contrary
provision of this Section 9, an Active Participant whose Date of Rehire is
within 60 days after his or her Distribution Date may, within 60 days after the
Distribution Date, make a repayment permitted under Section 9.1 in the form of
a rollover in the form of cash and/or Transamerica Common Stock; provided,
however, that such rollover (a) otherwise is consistent with the requirements
of
41
<PAGE>
Section 12.6, and (b) is not made from an individual retirement plan (within
the meaning of section 7701(a)(37) of the Code). No repayment made in
accordance with this Section 9.2.2 shall be taken into account for the purpose
of determining the amount of any Employer Contributions under Section 4.6 or
applying the limitations provided in Section 4.7.
9.3 Reinstatement Procedure. Any reinstatement of a prior forfeiture made
pursuant to Section 9.1 (a) shall be effected as soon as the repayment
described in Section 9.1 occurs, and (b) to the extent possible shall be
charged to current forfeitures and, thereafter, to subsequent Employer
Contributions.
SECTION 10
ADNENISTRATION OF THE PLAN
10. 1 Plan Administrator. Transamerica is hereby designated as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
10.2 Committee. The Plan shall be administered by a Committee which shall
consist of not less than three (3) nor more than seven (7) members, appointed
by and holding office at the pleasure of the Chief Executive Officer of
Transamerica. The Committee shall have the authority to control and manage the
operation and administration of the Plan as the named fiduciary under section
402(a)(1) of ERISA. Any member of the Committee may resign at any time by
notice in writing mailed or delivered to the Chief Executive Officer. The Chief
Executive Officer may remove any member of the Committee at any time and may
fill any vacancy which exists.
10.3 Actions by Committee. Each decision of a majority of the members of
the Committee then in office-shall constitute the final and binding act of the
Committee. The Committee may act with or without a meeting being called or held
and shall keep minutes of all meetings held and a record of all actions taken
by written consent. The Committee shall meet at least two (2) times each year.
10.4 Powers of Committee. The Committee shall have all discretion and
powers necessary to supervise the administration of the Plan and to control its
operation in accordance with its terms, including, but not by way of
limitation, the following powers:
(a) To interpret the provisions of the Plan and to determine, in its
sole discretion, any question arising under, or in connection with the
administration or operation of, the Plan;
(b) To determine all considerations affecting the eligibility of any
Employee to become an Active Participant or remain a Participant in the
Plan;
(c) To cause one or more separate Accounts to be maintained for each
Participant;
42
<PAGE>
(d) To cause Employer Contributions to be credited to Active
Participants' Employer Accounts;
(e) To establish and revise an accounting method or formula for the
Plan, as provided in Section 5.3;
(f) To determine the manner and form in which, and to notify the
Trustee or custodian of, any distribution to be made under the Plan;
(g) To delegate to one or more named individuals authority to grant
or deny hardship withdrawal and loan applications under Section 7;
(h) To determine the status and rights of Participants and their
spouses, beneficiaries or estates;
(i) To instruct the Trustee or custodian with respect to matters
within the jurisdiction of the Committee;
(j) To employ such counsel, agents and advisers, and to obtain such
legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan;
(k) To establish, from time to time, rules for the performance of its
powers and duties and for the administration of the Plan;
(1) TO designate the investments to be held in the Investment Funds;
(m) To arrange for distribution (at least annually) to each
Participant of a statement of benefits accrued under the Plan;
(n) To establish rules and regulations by which requests for Plan
information from Participants are processed expeditiously and completely;
(o) To appoint one or more Investment Managers in accordance with
Section 10.5.1;
(p) To notify each terminated Participant of his or her vested
interest under the Plan and the written explanation described in section
402(f) of the Code;
(q) To publish a claims and appeal procedure satisfying the minimum
standards of section 503 of ERISA pursuant to which Participants or their
spouses, beneficiaries or estates may claim Plan benefits and appeal
denials of such claims; and
(r) To delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf
of the Committee one or more of the fiduciary and/or ministerial functions
of the Committee under the Plan.
43
<PAGE>
10.5 Fiduciary Responsibilities. To the extent permissible under ERISA,
any person may serve in more than one fiduciary capacity with respect to the
Plan. Except as required by specific provisions of ERISA, no person who is a
fiduciary with respect to the Plan shall be under any obligation to perform any
duty or responsibility with respect to the Plan which has been specifically
allocated to another fiduciary.
10.5.1 Investment Manager Appointment. The Committee in its
discretion may appoint, and thereafter may discharge, one or more investment
managers (the "Investment Managers") to manage the investment of any designated
portion or portions of the Trust Fund. In the event of any such appointment,
the Trustee shall follow the instructions of the Investment Manager in
investing and administering Trust Fund assets managed by the Investment
Manager.
10.5.2 Eligibility. The person, firm or corporation appointed as
Investment Manager (a) shall be a person described in section 3(38)(B) of
ERISA, (b) shall make such representations from time to time as the Committee
may require in order, to determine its qualifications to be appointed and to
continue to serve in such capacity, and (c) shall acknowledge in writing its
status as a fiduciary with respect to the Plan upon acceptance of its
appointment.
10.6 Decisions of Committee. All decisions of the Committee, and any
action taken by it in respect of the Plan and within the powers granted to it
under the Plan, shall be conclusive and binding on all persons, and subject to
the claims and appeal procedure described in Section 10.4(q), shall be given
the maximum deference permitted by law.
10.7 Administrative Expenses. All expenses incurred in the administration
of the Plan by the Committee, or otherwise, including legal, Trustee's and
investment management fees and expenses, shall be paid and borne by the
Employers, provided that the Committee may, to the extent not inconsistent with
ERISA, direct payment of such expenses from the Trust Fund upon discontinuance
of contributions or termination of the Plan.
10.8 Eligibility to Participate. No member of the Committee who is also an
Employee shall be excluded from participating in the Plan if otherwise
eligible, but he or she shall not be entitled, as a member of the Committee, to
act or pass upon any matters pertaining specifically to his or her own Account
under the Plan.
10.9 Indemnification. Each of the Employers shall, and hereby does,
indemnify and hold harmless any of its Employees, officers or directors who may
be deemed to be a fiduciary of the Plan, and the members of the Committee, from
and against any and all losses, claims, damages or liabilities (including
attorneys' fees and amounts paid, with the approval of the Board of Directors,
in settlement of any claim) arising out of or resulting from the implementation
of a duty, act or decision with respect to the Plan, so long as such duty, act
or decision does not involve gross negligence or willful misconduct on the part
of any such individual.
10.10 Purchases of Transamerica Common Stock. The Trustee shall purchase
Transamerica Common Stock directly from Transamerica. All purchases of
Transamerica
44
<PAGE>
Common Stock from Transamerica shall be for no more than adequate
consideration, as defined in section 3(18) of ERISA, which shall be deemed to
be the mean between the highest and lowest sales prices reported on the NASDAQ
consolidated transaction reporting system (or if not so reported, the principal
market on which Transamerica Common Stock is traded) on the same day as the
Trustee's purchase from Transamerica. Notwithstanding the foregoing, the
Management Development and Compensation Committee of the Board of Directors
shall be authorized (without further amendment of the Plan) to (a) direct the
Trustee to discontinue or resume purchases of Transamerica Common Stock
directly from Transamerica and to discontinue or resume purchases in the open
market; and (b) determine and direct the Trustee that another method for
determining adequate consideration shall be used.
SECTION 11
TRUST FUND AND CONTRIBUTIONS
11.1 Trust Fund. Subject to the provisions of Section 12.(1), all Employer
Contributions shall be deposited in the Trust Fund for the purposes provided
in the Plan. All assets of the Plan shall be held in the Trust Fund and
administered in trust by the Trustee under and subject to the terms of the Plan
and the Trust Agreement under which the Trust Fund is maintained from time to
time. The Trust Agreement shall be deemed a part of the Plan. All obligations
and liabilities of the Trustee shall be governed solely by the provisions of
the Trust Agreement.
11.2 No Diversion of Assets. Each Employee, Participant, beneficiary and
other person receiving or entitled to receive benefits under the Plan shall
look solely to the assets of the Trust Fund or assets of the Plan held by the
custodian for distributions under the Plan. Notwithstanding any contrary Plan
provision, at no time shall any assets of the Plan be used for, or diverted
to, purposes other than for the exclusive benefit of Employees, Participants,
beneficiaries and other persons receiving or entitled to receive benefits or
payments under the Plan. Except to the limited extent permitted by Sections
4.7.6 and 11.3, no assets of the Plan shall ever revert to or become the
property of the Employers.
11.3 Continuing Conditions on Employer Contributions. Any obligation to
contribute Pre-Tax Contributions and/or to make Employer Contributions to the
Trust Fund is hereby conditioned upon the continued qualification of the Plan
under section 401(a) of the Code and the exempt status of the Trust Fund under
section 501(a) of the Code and upon the deductibility of such Pre-Tax and/or
Employer Contributions under section 404(a) of the Code. That portion of any
Pre-Tax or Employer Contribution which is contributed or made by reason of a
good faith mistake of fact, or by reason of a good faith mistake in determining
the deductibility of such Contribution, shall be returned to the Employer as
promptly as practicable, but not later than one year after the contribution was
made or the deduction was disallowed (as the case may be). The amount returned
pursuant to the preceding sentence shall be an amount equal to the excess of
the amount actually contributed over the amount that would have been
contributed if the mistake had not been made; provided, however, that gains
attributable to the returnable portion shall be retained in the Trust Fund;
and provided, further, that the returnable portion shall be reduced (a) by any
losses attributable thereto and (b) to avoid a reduction in the balance of any
45
<PAGE>
Participant's Account below the balance that would have resulted if the mistake
had not been made.
SECTION 12
MODIFICATION OR TERMINATION OF PLAN
12.1 Employers' Obligations Limited. The Plan is voluntary on the part of
the Employers, and the Employers shall have no responsibility to satisfy any
liabilities under the Plan. Furthermore, the Employers do not guarantee to
continue the Plan, and Transamerica at any time may, by appropriate amendment
of the Plan, suspend Employer Contributions or may discontinue Employer
Contributions, with or without cause. Complete discontinuance of all Pre-Tax
and Employer Contributions shall be deemed a termination of the Plan. If
Employer Contributions are suspended, each Participant shall be notified of the
suspension and each Active Participant may thereupon suspend his or her Pre-Tax
Contributions without any penalty for the period during which Employer
Contributions are suspended.
12.2 Right to Amend or Terminate. The Board of Directors reserves the
right to alter, amend or terminate the Plan, or any part thereof, in such
manner as it may determine and for any reason whatsoever.
12.2.1 Committee Amendment Power. Notwithstanding the foregoing, any
alteration or amendment to the Plan may be effected by action of the Committee
if the present value of the future costs resulting from such alteration or
amendment would have a financial impact of less than $500,000 on a consolidated
basis. Any such alteration or amendment adopted by the Committee shall be
subject to the approval of the Chief Executive Officer of Transamerica (or his
or her delegate), unless the present value of the future costs resulting from
such alteration or amendment would have a financial impact of $50,000 or less
on a consolidated basis.
12.2.2 Limitations. Any such alteration, amendment or termination
that is approved by the Board of Directors or the Committee (a "Change") shall
take effect upon the date indicated in the document embodying such alteration,
amendment or termination; provided, however, that:
(a) No Change to the Plan shall (1) divest any portion of an Account
that is then vested under the Plan, or (2) except as may be permitted by
regulations or other IRS guidance, eliminate any optional form of benefit
(within the meaning of section 411(d)(6)(B)(ii) of the Code) with
respect to benefits accrued prior to the adoption of the Change;
(b) Any Change to the Plan, or any part thereof, shall be subject to
Section 11.2 with respect to the restriction against diversion of the
assets of the Plan; and
(c) No Change to the Plan which would increase the limit on Employer
Contributions above the amount provided in Section 4.6 shall be made
effective unless
46
<PAGE>
such Change has first been approved by the holders of a majority of the
outstanding shares of Transamerica Common Stock present in person or by
proxy at the meeting at which such Change is considered.
12.3 Effect of Termination. If the Plan is completely or partially
terminated, or if there is a complete discontinuance of Pre-Tax and Employer
Contributions, then the interests of all Participants affected by such
termination or discontinuance in their Employer Accounts shall become 100%
vested and nonforfeitable. The balances credited to the Accounts of the
affected Participants may be distributed to them in the manner and at the times
set forth in Section 6.
12.4 Disposition of Affiliates. The following provisions shall apply in
connection with the disposition of Affiliates.
12.4.1 General. In the event of the shut-down of a plant or facility,
the sale of substantially all of the assets used by an Affiliate in a trade or
business conducted by the Affiliate, or the sale or spin-off of at least 50%
of the outstanding voting stock of an Affiliate, the Chief Executive Officer of
Transamerica (in his or her discretion) may direct that (a) the interest of
each Participant, who ceases to be employed by an Affiliate upon the
consummation and by reason of such shut-down, sale or spin-off (an "Affected
Participant") shall be 100% vested in his or her Employer Account, and/or (b)
the Account balances of the Affected Participant be transferred in a direct
trust-to-trust transfer to a defined contribution plan maintained for the
benefit of the Affected Participants after such transaction, and/or (c) to the
extent permitted under section 401(k) of the Code, the vested Account balances
of the Affected Participants be distributable (subject to the consent rules in
Section 6.3) during a period lasting no longer than the end of the second Plan
Year that begins after the date of such transaction. The Committee may adopt
such procedures as it deems necessary or appropriate to effect the provisions
of this Section 12.4.1, including (but not limited to) temporarily
discontinuing Participants' rights to change their contribution and investment
instructions and to receive withdrawals, loans, and distributions from the
Plan.
12.4.2 Delaval. The interest of each Affected Delaval Participant in
his or her Employer Account shall be 100% vested as of the date of the
distribution ("Distribution Date") by Transamerica of all of the shares of
common stock of Transamerica Delaval Inc. For purposes of this Section 12.4.2,
an "Affected Delaval Participant" shall mean a Participant who, as of the
Distribution Date, is an employee of Transamerica Delaval Inc. or one of its
subsidiaries.
12.4.3 TIG.
(a) Termination of Participation in the Plan. The members of the TIG
Group shall be withdrawn as participating Employers, and all TIG
Participants who are employed by a member of the TIG Group shall cease
active participation in the Plan, on the earlier of (i) the end of the
last full pay period prior to the Public Offering Date, or (ii) the date
that the TIG SSP becomes effective.
47
<PAGE>
(b) Vesting. Effective as of the Public Offering Date, each TIG
Participant who was employed by a member of the TIG Group on or after July
1, 1992 shall be 100% vested in his or her Employer Account.
(c) Plan-to-Plan Transfer. Transamerica shall cause the Account
balances of all TIG Participants to be transferred in a plan-to-plan
transfer to the TIG SSP in accordance with the provisions of Section 3 of
the Benefits Agreement.
(d) Definitions. For purposes of applying this Section 12.4.3, the
following terms shall have the following meanings:
(i) "Benefits Agreement" shall mean the Employee Benefits and
Compensation Allocation Agreement dated as of January 28, 1993,
between Transamerica and Holdings, including any amendments thereto.
(ii) "Holdings" shall mean TIG Holdings, Inc., a Delaware
corporation.
(iii) "TIG Group" shall mean (i) Transamerica Insurance Group, a
California corporation, and its subsidiaries, and (ii) Holdings and
its subsidiaries.
(iv) "TIG Participant" shall mean a Participant who is employed
by a member of the TIG Group at any time prior to the Public Offering
Date, but not including any Participant who, on the day before the
Public Offering Date (1) is an employee of an Affiliate not in the
TIG Group, and (2) is not primarily employed by a member of the TIG
Group.
(v) "TIG SSP" shall mean the defined contribution plan
established by a member of the TIG Group in accordance with Section 3
of the Benefits Agreement.
(vi) "Public Offering Date" shall mean the date of the initial
public offering of the stock of Holdings.
12.5 Acquisition of Affiliates. The following provisions shall apply in
connection with the acquisition of Affiliates.
12.5.1 General. In the event of the acquisition by Transamerica or
another Affiliate of substantially all of the assets used by an employer in a
trade or business conducted by such employer or the acquisition by Transamerica
or another Affiliate of more than 50% of the outstanding voting stock of an
employer or its affiliate, the Committee (in its discretion) (a) may authorize
the acceptance, from a defined contribution plan maintained for the benefit of
employees of the seller or its affiliates (the "Seller's Plan"), of direct
trust-to-trust transfers of the account balances of individuals who become
Employees upon the consummation and by reason of the acquisition (the "Acquired
Employees") subject to the provisions of Section 12.6.2; (b) may authorize the
acceptance of rollover contributions by the Acquired Employees of distributions
they receive from the Seller's Plan, subject to the limitations imposed by
section
48
<PAGE>
402(c) and related provisions of the Code; (c) may provide for the
administration and subsequent distribution of amounts transferred or
contributed pursuant to (a) and/or (b) above pending the occurrence of a
distribution event described in Section 6.1 with respect to each Acquired
Employee; and (d) subject to the approval of the Chief Executive Officer of
Transamerica, and subject to such terms and conditions as the Committee may
impose, may grant past service credit to the Acquired Employees for purposes of
determining eligibility to participate and/or vesting under the Plan, such that
the service of such Acquired Employees with the acquired business prior to the
date of acquisition is recognized to the same extent that such service would
have been recognized had it been with Transamerica. The Committee shall have
all powers necessary or appropriate to the orderly administration of this
Section 12.5, including the power to direct the sale of any assets transferred
or contributed to the Plan in-kind.
12.5.2 Fairmont Acquisition. Effective May 21, 1987, for purposes of
determining eligibility to participate and vesting hereunder, in the case of
any individual who was employed by Fairmont Financial, Inc., a California
corporation, or one of its subsidiaries (the "Fairmont Group") on May 21, 1987,
employment with any member of the Fairmont Group prior to May 21, 1987 shall be
recognized to the same extent that such employment would have been recognized
had it been with Transamerica.
12.5.3 BWAC Acquisition. Effective October 31, 1987, for purposes of
determining eligibility to participate and vesting hereunder, in the case of
any individual who was employed by BWAC Inc., a Delaware corporation, or one of
its subsidiaries (the "BWAC Group") on October 31, 1987, employment with any
member of the BWAC Group prior to October 31, 1987 shall be recognized to the
same extent that such employment would have been recognized had it been with
Transamerica.
12.5.4 Commercial Acquisition. Effective December 1, 1987, for
purposes of determining eligibility to participate and vesting hereunder, in
the case of any individual who was employed by Commercial Risk Underwriters
Insurance Company, a Nevada corporation ("Commercial") on December 1, 1987,
employment with Commercial prior to December 1, 1987 shall be recognized to
the same extent that such employment would have been recognized had it been
with Transamerica.
12.5.5 HFC0 Acquisition. Notwithstanding any contrary provisions of
the Plan, any individual who, on October 31, 1988, was employed by TEFCO, Inc.,
a Maryland corporation, and was eligible to participate in the Thrift Plan for
Employees of Alexander & Alexander Services Inc. and Subsidiaries on that date,
shall be eligible to become an active participant in the Plan as of November 1,
1988.
12.5.6 Tiphook p1c Acquisition. Effective March 16, 1994, for
purposes of determining eligibility to participate and vesting hereunder, in
the case of any former employee of Tiphook p1c who became an Employee on March
16, 1994 by reason of an Employer's acquisition of Tiphook p1c, employment with
Tiphook plc shall be recognized to the same extent that such employment would
have been recognized had it been with Transamerica.
49
<PAGE>
12.5.7 Universal Systems of America, Inc. Acquisition.
Notwithstanding any contrary provisions of the Plan, any individual who, on
April 6, 1994, was employed by Universal Systems of America, Inc., shall be
eligible to become an active participant in the Plan as of July 1, 1996.
12.5.8 General Electric Capital Corporation Acquisition. Effective
October 1, 1991, for purposes of determining eligibility to participate and
vesting hereunder, in the case of any former employee of General Electric
Capital Corporation who became an Employee on October 1, 1991 by reason of an
Employer's acquisition of General Electric Capital Corporation, employment with
General Electric Capital Corporation shall be recognized to the same extent
that such employment would have been recognized had it been with Transamerica.
12.5.9 Citicorp North America, Inc. Acquisition. Effective March 9,
1992, for purposes of determining eligibility to participate and vesting
hereunder, in the case of any former employee of Citicorp North America, Inc.
who became an Employee on March 9, 1992 by reason of an Employer's acquisition
of Citicorp North America, Inc., employment with Citicorp North America, Inc.
shall be recognized to the same extent that such employment would have been
recognized had it been with Transamerica.
12.5.10 FIFSI, Inc. (dba Nova Financial Services) Acquisition.
Effective July 1, 1990, for purposes of determining eligibility to participate
and vesting hereunder, in the case of any former employee of FIFSI, Inc. (dba
Nova Financial Services) who became an Employee by reason of an Employer's
acquisition of FIFSI, Inc. (dba Nova Financial Services), employment with
FIFSI, Inc. (dba Nova Financial Services) shall be recognized to the same
extent that such employment would have been recognized had it been with
Transamerica.
12.5.11 HomeFirst, Inc. Acquisition. Effective October 9, 1992, for
purposes of determining eligibility to participate and vesting hereunder, in
the case of any former employee of HomeFirst, Inc. who became an Employee on
October 9, 1992 by reason of an Employer's acquisition of HomeFirst, Inc.,
employment with HomeFirst, Inc. shall be recognized to the same extent that
such employment would have been recognized had it been with Transamerica.
12.5.12 Premier Life Insurance Company of New York Acquisition.
Effective January 16, 1993, for purposes of determining eligibility to
participate hereunder, in the case of any former employee of Premier Life
Insurance Company of New York who became an Employee on January 16, 1993 by
reason of an Employer's acquisition of Premier Life Insurance Company of New
York, employment with Premier Life Insurance Company of New York shall be
recognized to the same extent that such employment would have been recognized
had it been with Transamerica.
12.5.13 Special Vesting Rule for Divested Employees of the Over the
Road Trailer Division. Effective November 30, 1992, each Participant who was
employed by the Over the Road Trailer Division of Transamerica Leasing Inc. on
November 30, 1992 shall be 100% vested in his or her Employer Account.
50
<PAGE>
12.5.14 Special Vesting Rule for Divested Employees of Transamerica
Title Insurance Company. Effective March 30, 1990, each Participant who was
employed by Transamerica Title Insurance Company on March 30, 1990 shall be
100% vested in his or her Employer Account.
12.5.15 Special Vesting Rule for Divested Employees of Transamerica
Distribution Services, Inc. Effective June 30, 1991, each Participant who was
employed by Transamerica Distribution Services, Inc. on June 30, 1991 shall be
100% vested in his or her Employer Account.
12.6 Transfers and Rollover Contributions. Subject to the provisions of
Section 12.6.5, the Committee may direct the Trustee to accept a transfer to
the Trust Fund of assets held by or for the benefit of any Eligible Employee
who is, or will become (upon satisfaction of the service requirement of Section
3.1), a Participant of this Plan, (a) except as otherwise provided in Section
12.6.2, directly from the trustee or custodian of, or the issuer of an annuity
contract which funds, another plan which is qualified under section 401(a) or
403(a) of the Code, or (b) if the transfer of such assets to the Trust Fund
qualifies as a rollover under section 402(c), 403(a)(4) or 408(d)(3)(A)(ii) of
the Code, directly from such Participant. Any such transfer shall be made (if
at all) in the form of cash (or its equivalent), provided that a transfer made
pursuant to clause (a) may be made in-kind if and to the extent such in-kind
transfer is acceptable to the Trustee and approved by the Committee. A transfer
made pursuant to clause (a) may be either a plan-to-plan transfer of assets and
liabilities, or a direct transfer of an eligible rollover distribution pursuant
to section 401(a)(31) of the Code.
12.6.1 Rollover Account. Assets transferred to the Trust Fund
pursuant to this Section 12.6 shall be credited to a separate rollover
subaccount for the Participant which shall be his or her "Rollover Account." A
Participant's interest in his or her Rollover Account shall be fully (100%)
vested and nonforfeitable at all times. The Participant shall indicate, in such
manner and within such advance notice period as the Committee.(in its
discretion) shall specify, the percentages of the amounts allocated to his or
her Rollover Account that are to be invested in each of the Investment Funds.
In all other respects Rollover Account investments shall be subject to Section
4.3.
12.6.2 Impermissible Transfers. The Committee shall not direct the
Trustee to accept a transfer to the Trust Fund from another plan pursuant to
Section 12.6(a) if such transfer would cause the Plan to become a Transferee
Plan. For purposes of this Section 12.6.2, "Transferee Plan" means a plan
which receives a direct or indirect transfer of assets from a plan (in a
transfer which is a plan-to-plan transfer of assets and liabilities rather
than a direct transfer of an eligible rollover distribution pursuant to section
401(a)(31) of the Code) which is a defined benefit plan, money purchase
pension plan, or other plan which is required to provide automatic survivor
benefits pursuant to section 401(a)(11) of the Code, and shall include any
plan which itself receives a direct or indirect transfer of assets from a
Transferee Plan.
12.6.3 Nonqualifying Rollovers. If it is later determined that a
transfer to the Trust Fund made pursuant to Section 12.6(a) or (b) that was
intended to qualify as a rollover did not in fact qualify as a rollover under
section 402(c), 403(a)(4) or 408(d)(3)(A)(ii) of the Code,
51
<PAGE>
then the balance credited to the Participant's Rollover Account shall
immediately be (a) segregated from all other Plan assets, (b) treated as a
nonqualified trust established by and for the benefit of the Participant, and
(c) distributed to the Participant. Such a nonqualifying rollover shall be
deemed never to have been a part of the Trust Fund.
SECTION 13
VOTING OF SHARES AND GENERAL PROVISIONS
13.1 Voting of Shares; Tender or Exchange Offers. Subject to the
provisions of Section 13.2, the following provisions shall apply with respect
to voting, tender and exchange offers.
13.1.1 Voting of Shares. Whenever any proxies or consents are
solicited from the shareholders of Transamerica Common Stock, each Participant
(or, in the event of death, his or her beneficiary) whose Account is invested
in the Transamerica Common Stock Fund shall have the right to direct the
Trustee or custodian (as appropriate) in writing as to the manner in which the
shares attributable to his or her interest in such Fund shall be voted. The
Trustee, or such other person designated by Transamerica (but not otherwise
affiliated with Transamerica) to solicit and/or tabulate votes of Transamerica
shareholders generally (a "Recordkeeper") or custodian (as appropriate) shall
utilize its best efforts to distribute or cause to be distributed in a timely
manner to each Participant (or beneficiary) a copy of the proxy solicitation
material sent to shareholders, together with a form addressed to the Trustee,
Recordkeeper or custodian soliciting the Participant's (or beneficiary's)
confidential, written instructions as to the manner in which such shares shall
be voted. If such instructions are sent to a Recordkeeper, the Recordkeeper
shall communicate the instructions to the Trustee. Upon receipt of such
instructions, the Trustee or custodian shall vote such shares as instructed.
Shares of Transamerica Common Stock as to which the Trustee or custodian
receives no voting instructions shall be voted by the Trustee in the same
proportion as shares are to be voted pursuant to the written voting
instructions received by the Trustee or custodian (as appropriate).
13.1.2 Tender or Exchange Offers. Each Participant (or, in the event
of death, his or her beneficiary) whose Account is invested in the Transamerica
Common Stock Fund shall have the right to direct the Trustee in writing as to
the manner in which to respond to a tender or exchange offer with respect to
the shares attributable to his or her interest in such Fund. The Trustee or, if
Transamerica so elects, a Recordkeeper (as defined in Section 13.1.1), shall
utilize its best efforts to distribute or cause to be distributed in a timely
manner to each Participant (or beneficiary) such information as will be
distributed to shareholders of Transamerica Common Stock in connection with any
such tender or exchange offer, together with a form addressed to the Trustee or
Recordkeeper soliciting the Participant's (or beneficiary's) confidential,
written instructions as to whether such shares shall be tendered or exchanged.
If such instructions are sent to a Recordkeeper, the Recordkeeper shall
communicate the instructions to the Trustee. If the Trustee receives no written
directions from a Participant (or beneficiary) as to the manner in which to
respond to such a tender or exchange offer, the Trustee shall not tender or
exchange any shares of Transamerica Common Stock credited to the Account of the
Participant (or beneficiary).
52
<PAGE>
13.2 Named Fiduciary Status, Confidentiality. Notwithstanding any contrary
Plan provision, for purposes of Section 13.1, each Participant (or, in the
event of death, his or her beneficiary) shall be deemed to be a
"named fiduciary" (within the meaning of section 402(a) of ERISA) with respect
to the shares of Transamerica Common Stock (as appropriate) as to which such
Participant (or beneficiary) has the right of direction regarding voting,
tender or exchange. That named fiduciary status shall apply for such whole
shares of Transamerica Common Stock (if any) actually held for the benefit of
any Participant (or beneficiary) and allocable to his or her Account by reason
of the Account's investment (if any) in the Transamerica Common Stock Fund. The
directions received by the Trustee and any Recordkeeper (as defined in Section
13. L 1) from the Participants (or beneficiaries) shall be held by the Trustee
or Recordkeeper in strict confidence and shall not be divulged or released to
any person, including employees, officers or directors of Transamerica or any
other Employer or Affiliate; provided, however, that, to the extent necessary
for the operation of the Plan, such directions may be relayed by the Trustee to
a recordkeeper or auditor for the Plan which recordkeeper or auditor (i) is not
an Employer or Affiliate, and (ii) agrees not to divulge such directions to any
other person, including employees, officers or directors of Transamerica or any
other Employer or Affiliate.
13.3 Self-Tender. Notwithstanding any contrary Plan provision, in the
event that Transamerica makes a tender offer with respect to shares of
Transamerica Common Stock, Transamerica may, in its sole discretion, distribute
or cause to be distributed in a timely manner to each Participant (or, in the
event of death, his or her beneficiary) whose Account is invested in the
Transamerica Common Stock Fund such information as will be distributed to
shareholders of Transamerica Common Stock in connection with any such tender
offer, together with a form addressed to Transamerica (or its Affiliate)
soliciting the Participant's (or beneficiary's) written instructions as to
whether the shares attributable to his or her interest in such Fund shall be
tendered. The instructions received by Transamerica (or its Affiliate) from the
Participants (or beneficiaries) shall be communicated to the Trustee. If the
Trustee receives no written directions from a Participant (or beneficiary) as
to the manner in which to respond to such a tender offer, the Trustee shall not
tender any shares of Transamerica Common Stock allocable to the Account of the
Participant (or beneficiary).
13.4 Plan Information. Each Participant shall be advised of the general
provisions of the Plan and, upon written request addressed to the Committee,
shall be furnished with any information requested, to the extent required by
applicable law, regarding his or her status, rights and privileges under the
Plan.
13.5 Inalienability. Except to the extent otherwise directed by a domestic
relations order which the Committee determines is a QDRO (as defined in Section
7.6) or mandated by applicable law, in no event may either a Participant, a
former Participant or his or her spouse, beneficiary or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other
legal process.
13.6 Rights and Duties. No person shall have any rights in or to the Trust
Fund or other assets of the Plan, or under the Plan, except as, and only to the
extent, expressly provided for in the Plan. To the maximum extent permissible
under section 410 of ERISA, neither the
53
<PAGE>
Employers, the Trustee, the custodian nor the Committee shall be subject to any
liability or duty under the Plan except as expressly provided in the Plan, or
for any action taken, omitted or suffered in good faith.
13.7 No Enlargement of Employment Rights. Neither the establishment or
maintenance of the Plan, the making of any Employer Contributions nor any
action of any Employer or the Trustee, custodian or Committee, shall be held or
construed to confer upon any individual any right to be continued as an
Employee nor, upon dismissal, any right or interest in the Trust Fund or other
assets of the Plan other than as provided in the Plan. Each Employer expressly
reserves the right to discharge any Employee at any time, with or without
cause.
13.8 Apportionment of Costs and Duties. All acts required of the Employers
under the Plan may be performed by Transamerica for itself and its Affiliates,
and the costs of the Plan shall be equitably apportioned among Transamerica and
the other Employers. Whenever an Employer is permitted or required under the
terms of the Plan to do or perform any act, matter or thing, it shall be done
and performed by any officer or employee of the Employer who is thereunto duly
authorized by the board of directors of the Employer.
13.9 Merger, Consolidation or Transfer. This Plan shall not be merged or
consolidated with any other plan, nor shall there be any transfer of any assets
or liabilities from this Plan to any other plan, unless immediately after such
merger, consolidation or transfer, each Participant's accrued benefit, if such
other plan were then to terminate, is at least equal to the accrued benefit to
which the Participant would have been entitled if this Plan had been terminated
immediately before such merger, consolidation or transfer.
13.10 Applicable Law. The provisions of the Plan shall be construed,
administered and enforced in accordance with ERISA and, to the extent
applicable, the laws of the State of California.
13.11 Severability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan, and the Plan shall be construed and enforced as if such
provision had not been included.
13.12 Captions. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or intent
of the Plan nor in any way shall affect the construction of any provision of
the Plan.
SECTION 14
TOP-HEAVY PLAN
14.1 Top-Heavy Plan Status. Notwithstanding any contrary Plan provision,
the provisions of this Section 14 shall apply with respect to any Plan Year
beginning after 1983 for which the Plan is a top-heavy plan (within the meaning
of section 416(g) of the Code) (a "Top-Heavy Plan"). The Committee, acting on
behalf of all Employers, shall determine as to
54
<PAGE>
each Plan Year whether or not the Plan is a Top-Heavy Plan for that Plan Year.
For purposes of making that determination as to any Plan Year, (a) the date as
of which the determination is made and the applicable Valuation Date shall be
the last business day of the immediately preceding Plan Year; (b) this Plan
shall be aggregated with each other qualified plan of any Employer or Affiliate
(1) in which a key employee (within the meaning of section 416(i)(1) and (5) of
the Code) participates, and/or (2) which enables this Plan or any plan
described in clause (1) of this sentence to meet the requirements of section
401(a)(4) or, 410 of the Code; (c) this Plan may be aggregated with any other
qualified plan of any Employer or Affiliate, which plan is not required to be
aggregated under clause (b) of this sentence, if the resulting group of plans
would continue to meet the requirements of sections 401(a)(4) and 410 of the
Code; (d) rollover contributions and other similar transfers shall be excluded
as provided in section 416(g)(4)(A) of the Code; (e) distributions during the
5-year period ending on the determination date shall be taken into account to
the extent required under section 416(g)(3) of the Code; (f) the benefits of
Participants who were key employees (within the meaning of section 416(i)(1) of
the Code) in a prior Plan Year but are non-key employees (within the meaning of
section 416(i)(2) of the Code) for the Plan Year in which the determination is
made, shall not be taken into account as provided in section 416(g)(4)(B) of
the Code; and (g) the Accounts of Participants who have not performed services
for an Employer during the 5-year period ending on the determination date shall
not be taken into account, as provided in section 416(g)(4)(E) of the Code.
14.2 Top-Heavy Plan Provisions. For any Plan Year for which the Plan is a
Top-Heavy Plan, the following provisions shall apply:
14.2.1 Vesting Schedule. The vested percentage of each Participant's
Employer Account shall be determined in accordance with the following schedule,
unless such schedule provides for vesting at a rate which is less rapid than
the vesting rate then in effect under Section 8.2:
Number of Years Vested Percentage of
of Vesting Service Employer Account
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
14.2.2 Minimum Allocation. The Employers shall make an additional
contribution to the Employer Account of each Participant who is a non-key
employee (within the meaning of section 416(i)(2) and (5) of the Code), and who
is employed on the last business day of the Plan Year, regardless of whether he
or she was an Active Participant for any portion of the Plan Year. Such
additional contribution shall be an amount which, when added to the Employer
and Pre-Tax Contributions and forfeitures allocated to such Participant's
Account for the Plan Year pursuant to Sections 4 and 5, equals 3% of his or
her Total Compensation (as defined in Section 4.7.2(c), but disregarding any
amount in excess of $150,000 (as adjusted in accordance with
55
<PAGE>
section 401(a)(17) of the Code) for the Plan Year; provided, however, that if
the Key Employee Percentage is less than 3 then the percentage rate at which
such additional Employer Contributions shall be made for that Plan Year shall
be reduced from 3% to the Key Employee Percentage. The "Key Employee
Percentage" shall be the largest percentage Computed by dividing (a) the
amount of the regular Employer and Pre-Tax Contributions and forfeitures
allocated for that Plan Year to the Account of each Participant who is a key
employee (within the meaning of section 416(i)(1) and (5) of the Code), by (b)
the amount of his or her Total Compensation (as defined above) for the Plan
Year. In no event shall such portion of a Participant's Employer Account as is
attributable to any minimum allocation made under this Section 14.2.2 be
subject to forfeiture solely by reason of any withdrawal from the Participant's
Pre-Tax Account.
14.2.3 Defined Benefit Plan. With respect to each Participant who is
also a participant in a qualified defined benefit plan maintained by any
Employer or Affiliate, the 1.25 multiplier set forth in Section 4.7.4(a)(2)(ii)
and (b)(2)(B) shall be reduced to 1.0 and $41,500 shall be substituted for
$51,875 in applying the transitional rule under section 415(e)(6) of the Code
as described in the first sentence of Section 4.7.5, unless for the Plan Year
(a) the aggregation group of which the Plan is a member is not "super
top-heavy" (within the meaning of section 416(h)(2)(B) of the Code) and (b)
7.5% is substituted for each reference to 3% in applying Section 14.2.2.
EXECUTION
IN WITNESS WHEREOF, Transamerica, by its duly authorized officers, has
executed this restated Plan on the date indicated below.
TRANSAMERICA CORPORATION
(seal)
Dated: 12/31/96 By /s/ Rona King Pehrson
-------------------------- ---------------------------------------
Title: Vice President - Human Resources
Dated: 12/31/96 And By /s/ Jaclyn L. Larson
-------------------------- -----------------------------------
Title: Assistant Secretary
56
EXHIBIT 5.01
Opinion of Senior Counsel of AEGON N.V.
I am legal counsel of AEGON N.V. (the "Company"). I am rendering this opinion
in connection with the registration on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, of 3,000,000 shares of the
Company's common shares, par value fifty cents Dutch Guilder per share (the
"AEGON Common Shares") deliverable in accordance with the Transamerica
Corporation Employee Stock Savings Plan (the "Plan") as referred to in such
Registration Statement.
I have not investigated the laws of any jurisdiction but The Netherlands, and do
not express an opinion on the laws of any jurisdiction but The Netherlands.
I have examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records and other instruments as I
have deemed necessary or advisable for the purpose of rendering this opinion.
Upon the basis of the foregoing, I am of the opinion that the AEGON Common
Shares deliverable in accordance with the Plan are duly authorized and when so
delivered will be legally issued and fully paid.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
/s/ Hans Italiaander
- ---------------------------------
Hans Italiaander
The Hague, July 20, 1999
EXHIBIT 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the Transamerica Corporation
Employees Stock Savings Plan for the registration of 3,000,000 Ordinary Shares,
par value fifty cents Dutch Guilder per share, and to the incorporation by
reference therein of our report dated March 3, 1999, with respect to the
consolidated financial statements and schedules of AEGON N.V. included in its
Annual Report (Form 20-F) for the year ended December 31, 1998, filed with the
Securities and Exchange Commission.
The Hague, July 19, 1999
Ernst & Young Accountants
/s/ Ernst & Young
