As filed with the Securities and Exchange Commission on January 4, 1996.
Registration No. ________
================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
GOTTSCHALKS INC.
(Exact name of registrant as specified in its charter)
___________________
Delaware 77-0159791
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7 River Park Place East, Fresno, California 93720
(Address of principal executive offices)
GOTTSCHALKS INC. RETIREMENT SAVINGS PLAN
(Full title of the plan)
Warren Williams, Esq.
General Counsel
GOTTSCHALKS INC.
7 River Park Place East
Fresno, California 93720
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent
for service: (209) 434-8000
___________________
Copy to:
D. Stephen Antion, Esq.
O'MELVENY & MYERS
400 South Hope Street
Los Angeles, California 90071-2899
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
_________________________________________________________________
Common Stock, 500,000(1) $5.3125(2) $2,656,250.00(2) $915.95(2)
$.01 par value shares
Interest in (1)
the Plan
_________________________________________________________________
<FN>
(1) This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, other
rights to purchase or acquire the shares of Common
Stock covered by the Prospectus and, pursuant to Rule
416, an indeterminate amount of interests in the
employee benefit plan described herein and an additional
indeterminate number of shares which by reason of
certain events specified in the Plan may become subject
to the Plan.
(2) Pursuant to Rule 457(h), the maximum offering price,
per share and in the aggregate, and the registration
fee were calculated based upon the average of the
high and low prices of the Common Stock on the New
York Stock Exchange reported in The Wall Street Journal,
Western Edition on December 29, 1995 for December 28,
1995.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
of Form S-8 (plan information and registrant information) will be
sent or given to employees as specified by Securities and Exchange
Commission Rule 428(b)(1). Such documents need not be filed with
the Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424. These documents,
which include the statement of availability required by Item 2 of
Form S-8, and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Form S-8 (Part II
hereof), taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933 (the
"Securities Act").
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of Gottschalks Inc. (the
"Company") and the Gottschalks Inc. Retirement Savings Plan (the
"Plan") filed with the Securities and Exchange Commission are
incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the
Company's fiscal year ended January 28, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for its
quarterly periods ended April 29, 1995, July 29, 1995 and
October 28, 1995;
(c) the Company's Report on Form 8-K dated June 27, 1995;
(d) the Plan's Annual Report on Form 11-K relating to the
fiscal year ended January 31, 1995; and
(e) the description of the Company's Common Stock contained
in the registration statement (and past and future
amendments thereto) for the Common Stock filed under
Section 12 of the Securities Exchange Act of 1934,
including any amendment or report filed for the purpose
of updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated
by reference into the prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein
or in a document, all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to
be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or amended, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Company's Common Stock, $.01 par value (the "Common
Stock"), is registered pursuant to Section 12 of the Exchange Act,
and, therefore, the description of securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. Section 102(b)(7)
of the Delaware General Corporation Law (the "DGCL") provides that
a Delaware corporation has the power to eliminate or limit the
personal liability of a director for violations of the director's
fiduciary duty, except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the
DGCL (providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions) or (iv) for
any transaction from which a director derived an improper personal
benefit.
Section 145 of the DGCL empowers a Delaware corporation
to indemnify any person who was or is a party, or is threatened to
be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was an
officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided that he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. A Delaware corporation may
indemnify past or present officers or directors of such corporation
or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the
corporation to procure a judgment in its favor under the same
conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is
successful on the merits or otherwise in the defense of any action
referred to above, or in defense of any claim, issue or matter
therein, the corporation must indemnify him against the expenses
(including attorneys' fees) which he actually and reasonably
incurred in connection therewith.
The Certificate of Incorporation of the Company limits
directors' liability for monetary damages to the Company and its
stockholders for breaches of fiduciary duty to the fullest extent
permitted by the DGCL.
The Company's Bylaws provide that each director or
officer of the Company who was or is a party or is threatened to be
made a party to or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she,
or a person of whom he or she is the legal representative, is or
was a director or officer of the Company or is or was serving at
the request of the Company as a director, officer, employee or
agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity or in another capacity while
serving as director, officer, employee or agent, shall be
indemnified and held harmless by the Company to the fullest extent
permitted by the laws of Delaware, as the same exist or may
hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company
to provide prior to such amendment), against all costs, charges,
expenses, liabilities and losses (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid
or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall
continue as to a person who has ceased to be a director or officer
and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that the Company shall indemnify
any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was initiated or authorized by one or
more members of the Company's Board of Directors. The right to
indemnification shall be a contract right and shall include the
right to be paid by the Company the expenses incurred in defending
any such proceeding in advance of its final disposition; provided,
however, that if the DGCL so requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service
was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan)
in advance of the final disposition of a proceeding shall be made
only upon delivery to the Company of an undertaking, by or on
behalf of such director or officer, to repay all amounts so
advanced if it will ultimately be determined that such director or
officer is not entitled to be indemnified.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4 Gottschalks Inc. Retirement
Savings Plan.
5 Opinion of Warren L. Williams, Esq. regarding
legality of interests and shares.
23.1 Consent of Deloitte & Touche LLP (Independent
Auditors' Consent).
23.2 Consent of Warren L. Williams, Esq. (included
in Exhibit 5).
The undersigned Company hereby undertakes to submit the Plan
and any amendment thereto to the Internal Revenue Service (the "IRS")
in a timely manner and will make all changes required by the IRS in
order to qualify the Plan.
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 Securities Act of 1933
(the "Securities 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; 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by reference in the
Registration Statement;
(2) That, for the purpose of determining any
liability under the Securities 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 Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange 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.
(h) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described in Item 6 above, 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 Securities 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 Securities Act
and will be governed by the final adjudication of such issue.
<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 Fresno, State of California, on
November 30, 1995.
GOTTSCHALKS INC.
By: __/s/ Joseph W. Levy___
Joseph W. Levy
Its: Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Joseph W. Levy, Stephen J. Furst and Warren L. Williams
his or her true and lawful attorneys-in-fact and agents with full
powers of substitution and resubstitution, for him or her and in
his or her 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, 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 or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
___/s/ Joseph W. Levy_______ Chairman and Chief November 29, 1995
Joseph W. Levy Executive Officer
(Principal Executive
Officer)
___/s/ Gerald H. Blum_______ Vice Chairman of the November 30, 1995
Gerald H. Blum Board
___/s/ Stephen J. Furst_____ President, Chief November 30, 1995
Stephen J. Furst Operating Officer
and Director
___/s/ Bret W. Levy_________ Vice President, November 29, 1995
Bret W. Levy Credit and Customer
Services, Director
___/s/ Sharon Levy__________ Director November 30, 1995
Sharon Levy
___/s/ Joseph J. Penbera____ Director November 30, 1995
Joseph J. Penbera
___/s/ Frederick R. Ruiz____ Director November 30, 1995
Frederick R. Ruiz
__/s/ O. James Woodward III_ Director November 27, 1995
O. James Woodward III
__/s/ Max Gutmann___________ Director November 30, 1995
Max Gutmann
__/s/ Alan A. Weinstein_____ Senior Vice President November 29, 1995
Alan A. Weinstein and Chief Financial
Officer (Principal
Accounting and Financial
Officer)
<PAGE>
The Plan. Pursuant to the requirements of the Securities
Act of 1933, the Plan's Administrative Committee has caused this
Registration Statement to be signed on behalf of the Plan by the
undersigned, thereunto duly authorized, in the City of Fresno,
State of California, on November 29, 1995.
GOTTSCHALKS INC. RETIREMENT SAVINGS PLAN
By: Investment Savings Committee
[Print Name of Plan Administrative
Committee]
By: ___/s/ Alan A. Weinstein___
Its: Secretary
<PAGE>
</TABLE>
Exhibit 4
GOTTSCHALKS, INC. RETIREMENT SAVINGS PLAN
Effective Date: August 7, 1986
As Amended and Restated Effective January 1, 1996
<PAGE>
GOTTSCHALKS, INC. RETIREMENT SAVINGS PLAN
C O N T E N T S
Page
SECTION 1 - Definitions 1-26
SECTION 2 - Participation 27-28
SECTION 3 - Contributions 29-41
SECTION 4 - Participant's Credit in the Trust Fund 42-47
SECTION 5 - Payment of Benefits 48-57
SECTION 6 - Designation of Beneficiary 58-59
SECTION 7 - Committee 60-62
SECTION 8 - The Trust Agreement 63
SECTION 9 - Rights under the Plan 64-67
SECTION 10 - Amendment of Plan 68-69
SECTION 11 - Termination of Plan 70-71
SECTION 12 - Construction and Enforcement of Plan 72
SECTION 13 - Top Heavy Plan 73-76
SECTION 14 - Loans 77-78
Execution of Plan 79
<PAGE>
GOTTSCHALKS, INC. RETIREMENT SAVINGS PLAN
_________
Statement of Purpose
Gottschalks, Inc., a California Corporation, established and
operates the Gottschalks, Inc. Retirement Savings Plan and related
Trust for the purpose of enabling Eligible Individuals and their
Beneficiaries to provide for their retirement income requirements.
The Plan is intended to qualify under the pertinent provisions of
the Internal Revenue Code of 1986, as amended, and the Trust
established pursuant to the related Trust Agreement is intended to
be exempt from federal income tax. The Plan is also intended to be
a profit-sharing plan within the meaning of Section 401(a)(27) of
the Internal Revenue Code of 1986, as amended.
<PAGE>
GOTTSCHALKS, INC. RETIREMENT SAVINGS PLAN
________
Effective January 1, 1996, except as otherwise indicated,
Gottschalks Inc. hereby amends and restates in its entirety the
Gottschalks, Inc. Retirement Savings Plan for the benefit of its
employees.
SECTION 1
Definitions
For purposes of this Plan, the terms set forth below shall have the
following meanings, unless a different meaning is specifically
provided or is clearly required by the context in which the term is
used:
1.1 Account:
"Account" means the record(s) maintained to record a
Participant's (or Beneficiary's or Alternate Payee's) interest
in the Plan. Each Participant (or, when applicable,
Beneficiary or Alternate Payee) may have a Salary Deferral
Account as described under Section 4.1(a), a Company Matching
Contribution Account as described under Section 4.1(b), and a
Rollover Account as described in Section 4.1(c). "Account"
shall include subaccounts, where applicable.
1.2 Account Balance:
"Account Balance" means, as of any date, the amount credited
to an individual's Account as of the Valuation Date coincident
with or immediately preceding such date, plus any Company
Contributions and Salary Deferrals and minus any withdrawals
or distributions made since such Valuation Date.
1.3 Actual Contribution Ratio:
Effective for each Plan Year beginning on or after January 1,
1987, "Actual Contribution Ratio" means the percentage
obtained with respect to each Highly Compensated Participant
and each Non-Highly Compensated Participant (calculated to the
nearest one-hundredth of one percent (0.01%) for each Plan Year
beginning on or after January 1, 1989) by dividing (a) by (b),
where (a) and (b) are defined as follows:
(a) The sum of the following items, except to the extent such
items are included in the calculation of the Actual
Deferral Ratio:
(1) Company Matching Contributions made on behalf of
such individual (less any amounts used to meet the
minimum top-heavy benefit requirements of Section
13.5 for each Plan Year beginning on or after
January 1, 1989);
(2) If such individual is a Highly Compensated
Participant, any contributions subject to Code
Section 401(m) (e.g., employer matching
contributions or employee after-tax contributions)
made on behalf of or by such individual to any
other plan maintained by an Affiliated Company;
(3) To the extent elected by the Committee, all or a
portion of the Company Contributions allocated to a
subaccount of the Salary Deferral Account of such
individual pursuant to Section 3.1(b);
(4) To the extent elected by the Committee, all or a
portion of the Salary Deferrals that are made by
such individual (provided that the Average Deferral
Percentage Test is met when such Salary Deferrals
are both included and excluded in calculating the
Actual Deferral Ratio);
(5) If applicable, any employer matching contributions
or employee after-tax contributions or qualified
nonelective contributions (within the meaning of
Code Section 401(m) and regulations promulgated
thereunder) made on behalf of or by such individual
under any plan of an Affiliated Company that is
required to be aggregated with the Plan in order to
meet the requirements of Code Section 401(a)(4) or
410(b) (other than Section 410(b)(2)(A)(ii)); and
(6) If elected by the Committee, any employer matching
contributions, employee after-tax contributions or
qualified nonelective contributions (within the
meaning of Code Section 401(m) and regulations
promulgated thereunder) made on behalf of or by
such individual to a plan maintained by an
Affiliated Company, or any salary deferral
contributions made by such individual to a plan
maintained by an Affiliated Company (provided that
the Average Deferral Percentage test is met when
such Salary Deferrals are both included and
excluded in calculating the Actual Deferral Ratio);
provided that such aggregated plans satisfy the
requirements of Code Sections 401(a)(4) and 410(b).
(b) The Compensation of such individual for such Plan Year.
1.4 Actual Deferral Ratio:
Effective for each Plan Year beginning on or after January 1,
1987, "Actual Deferral Ratio" means the percentage obtained
with respect to each Highly Compensated Participant and each
Non-Highly Compensated Participant (calculated to the nearest
one-hundredth of one percent (0.01%) for each Plan Year
beginning on or after January 1, 1989) by dividing (a) by (b),
where (a) and (b) are defined as follows:
(a) The sum of the following items, except to the extent such
items are included in the computation of the Actual
Contribution Ratio:
(1) Salary Deferrals made by such individual during the
Plan Year (as described in Section 3.3);
(2) To the extent elected by the Committee, Company
Matching Contributions (to the extent not used to
satisfy the minimum top-heavy benefit requirements
of Section 13.5 of the Plan for each Plan Year
beginning on or after January 1, 1989); provided
that, to the extent required by law, such
contributions must be fully vested and not subject
to withdrawal at such time such contributions to
the Plan are made;
(3) If such individual is a Highly Compensated
Participant, any salary deferral contributions
subject to Code Section 401(k) made by such
individual to any plan maintained by an Affiliated
Company;
(4) If applicable, any salary deferral contributions or
qualified nonelective contributions (within the
meaning of Code Section 401(m) and regulations
promulgated thereunder) made by or on behalf of
such individual under any other plan of an
Affiliated Company that is aggregated with the Plan
in order to meet the requirements of Code Section
401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)); and
(5) If elected by the Committee, salary deferral
contributions or qualified nonelective
contributions (within the meaning of Code Section
401(k) and regulations promulgated thereunder) made
by or on behalf of such individual under any other
cash or deferred arrangement maintained by an
Affiliated Company; provided that such aggregated
arrangement(s) (and the plan(s) of which it (they)
is (are) a part) satisfies (satisfy) the
requirements of Code Section 401(a)(4) and 410(b).
(b) The Compensation of such individual for such Plan Year.
1.5 Affiliated Company:
"Affiliated Company" means the Company and each organization
which is either (i) a member of a controlled group which
includes the Company, as defined in Code Sections 414(b) and
414(c), or (ii) a member of an affiliated service group which
includes the Company, as defined in Code Sections 414(m) and
(o). For purposes of Sections 1.23(b), 1.23(d), 1.45 and 4.2
and for purpose of Section 1.23(c) (except as otherwise
provided in that Section), an "Affiliated Company" shall
be determined by substituting "more than 50%" for "at
least 80%" where the latter would otherwise apply in
Code Sections 414(b) or 414(c).
1.6 Alternate Payee:
"Alternate Payee" means a Spouse, former Spouse, child or
other dependent of a Participant to whom Plan benefits are
payable under a "qualified domestic relations order" pursuant
to Section 9.6. To the extent a Participant's rights are
stated or limited herein, such Participant's Alternate
Payee(s) shall also be bound by such statement or limitation.
1.7 Annual Addition:
"Annual Addition" means, with respect to each Participant for
any Limitation Year, the aggregate of:
(a) Company Contributions made on such individual's behalf by
a Participating Company as provided under Section 3.1;
(b) Salary Deferrals made by the Participant under Section
3.3, and
(c) In the event a Participating Company pre-funds post-
retirement medical benefits under Code Section 419A(d),
any amount allocated to a separate account on behalf of
a Participant who is a Key Employee as defined in Section
13.2(b).
1.8 Average Contribution Percentage:
Effective for each Plan Year beginning on or after January 1,
1987, "Average Contribution Percentage" means, for the group
of Highly Compensated Participants, and separately, for the
group of Non-Highly Compensated Participants, the average of
the Actual Contribution Ratios, expressed as a percentage.
1.9 Average Contribution Percentage Test:
Effective for each Plan Year beginning on or after January 1,
1987, "Average Contribution Percentage Test" means the test
described in Section 3.6(b) of the Plan.
1.10 Average Deferral Percentage:
Effective for each Plan Year beginning on or after January 1,
1987, "Average Deferral Percentage" means, for the group of
Highly Compensated Participants and separately, for the group
of Non-Highly Compensated Participants, the average of the
Actual Deferral Ratios, expressed as a percentage.
1.11 Average Deferral Percentage Test:
Effective for each Plan Year beginning on or after January 1,
1987, "Average Deferral Percentage Test" means the test
described in Section 3.6(a) of the Plan.
1.12 Beneficiary:
"Beneficiary" means any person or persons entitled to receive
benefits by reason of a Participant's death, as provided in
Section 6. To the extent a Participant's rights are stated or
limited herein, such Participant's Beneficiary(ies) shall also
be bound by such statement or limitation.
1.13 Benefit Commencement Date:
"Benefit Commencement Date" means the date as of which a
benefit is paid or commences to be paid.
1.14 Board:
"Board" means the Board of Directors of the Company.
1.15 Break In Service:
"Break In Service" means any Plan Year during which an
individual does not complete any Hours of Service with an
Affiliated Company, except as follows:
(a) Solely for the purpose of determining whether a Break In
Service has occurred, an individual who is absent from
work for maternity or paternity reasons shall receive
credit for the Hours of Service which would otherwise
have been credited to such individual but for such
absence, or, in any case in which such hours cannot be
determined, eight (8) hours of service per day of such
absence. For purposes of this paragraph, absence from
work for maternity or paternity reasons means an absence:
(i) by reason of the pregnancy of the individual, (ii) by
reason of a birth of the child of the individual, (iii)
by reason of the placement of a child with the individual
in connection with the adoption of such child by such
individual or (iv) for purposes of caring for such child
for a period beginning immediately following such birth
or placement. This paragraph shall not apply unless the
Employee timely furnishes the Committee with such all
information the Committee may need to determine that the
absence was for a reason permitted under this paragraph.
The Hours of Service credited under this paragraph shall
be credited in the Plan Year in which the absence begins
if a crediting is necessary to prevent a Break In Service
in that Plan Year, or, in all other cases, solely in the
following Plan Year.
1.16 Code:
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.17 Committee:
"Committee" means the Administrative Committee appointed
pursuant to Section 7.
1.18 Company:
"Company" means Gottschalks, Inc., or any successor that
adopts the Plan.
1.19 Company Contributions:
"Company Contributions" means Company Matching Contributions.
1.20 Company Contribution Account:
"Company Contribution Account" means an individual's Company
Matching Contribution Account and any subaccounts that may be
added hereunder.
1.21 Company Matching Contribution:
"Company Matching Contribution" means the contribution made by
a Participating Company to a Participant's Company Matching
Contribution Account in accordance with Section 3.1(a).
1.22 Company Matching Contribution Account:
"Company Matching Contribution Account" means the Account
established to record the Company Matching Contributions
allocated to a Participant and any subaccounts that maybe
added hereunder.
1.23 Compensation:
"Compensation" shall mean the following:
(a) Determination of Highly Compensated Employees:
For the purpose of determining Highly Compensated
Employees, the Top Paid Group and Officers, Compensation
means the total amount paid to an Employee by an
Affiliated Company for a Plan Year including (i) salary,
commissions, bonuses and overtime as they are required to
be included in the annual calendar year compensation
reported in Box 1 (Compensation) on Internal Revenue
Service Form W-2, (ii) Salary Deferrals and (iii) any
Salary Reduction Contributions to a plan of an Affiliated
Company during such Plan Year; but excluding the amount
of any Company Matching Contributions or any other
employer contributions to this Plan or to any other plan
of deferred compensation maintained by an Affiliated
Company, amounts realized from the exercise of a
qualified stock option, amounts realized when
restricted stock is no longer subject to a
substantial risk of forfeiture, amounts realized
from the disposition of a qualified stock option
and all other amounts that receive special tax
benefits.
(b) Discrimination Test:
For the purposes of calculating the Actual Contribution
Ratios and the Actual Deferral Ratios, unless the
Committee elects otherwise in accordance with Code
Section 414(s) and the regulations thereunder,
Compensation means the total amount paid to an Employee
by an Affiliated Company for a Plan Year including (i)
salary, commissions, bonuses and overtime as they are
required to be included in the annual calendar year
compensation reported in Box 1 (Compensation) on Internal
Revenue Service Form W-2, (ii) Salary Deferrals and (iii)
any Salary Reduction Contributions to a plan of an
Affiliated Company during such Plan Year; provided that
Compensation shall include only amounts that were earned
while the Employee is a Participant. Compensation shall
exclude expense reimbursements or other expense
allowances, cash and noncash fringe benefits, moving
expenses, deferred compensation, and welfare benefits.
(c) Top Heavy Test:
(1) For the purpose of applying the top heavy
provisions of Section 13 of the Plan (except as
provided in paragraph (c)(2) below), Compensation
shall be determined in accordance with paragraph
(a), but shall be determined excluding Salary
Deferrals and any Salary Reduction Contributions to
any plan of an Affiliated Company during such Plan
Year.
(2) For the purpose of determining Key Employees,
Compensation shall be determined in accordance with
paragraph (a).
(d) Salary Deferrals and Contributions:
For the purposes of making Salary Deferrals and Company
Matching Contributions, Compensation shall be determined
in accordance with paragraph (b) but shall be determined
(i) on a Participating Company rather than an Affiliated
Company basis.
(e) Limitation:
(1) In applying paragraphs (b), (c)(1) and (d) above
(but not paragraphs (a) and (c)(2)), Compensation
shall be limited to $200,000 or such greater amount
as may be recognized for increases in the cost of
living as determined by the Secretary of the
Treasury under Code Section 415(d). Effective for
Plan Years beginning on or after January 1, 1994,
the model language of Revenue Procedure 94-13, is
added to this subparagraph, as follows:
(i) In addition to other applicable limitations set
forth in the plan, and notwithstanding any
other provision of the plan to the contrary,
for plan years beginning on or after January
1, 1994, the annual compensation of each
employee taken into account under the plan
shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by
the Commissioner for increases in the cost of
living in accordance with section
401(a)(17)(B) of the Internal Revenue Code.
The cost-of-living adjustment in effect for a
calendar year applies to any period, not
exceeding 12 month, over which compensation is
determined (determination period) beginning in
such calendar year. If a determination period
consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied
by a fraction, the numerator of which is the
number of months in the determination period,
and the denominator of which is 12.
(ii) For plan years beginning on or after January 1,
1994, any reference in this plan to the
limitation under section 401(a)(1&) of the
Code shall mean the OBRA '93 annual
compensation limit set forth in this
provision.
If compensation for any prior determination
period is taken into account in determining an
employee's benefits accruing in the current
year, the compensation for that prior
determination period is subject to the OBRA
'93 annual compensation limit in effect for
that prior determination period. For this
purpose, for determination periods beginning
before the first day of the first plan year
beginning on or after January 1, 1994, the
OBRA '93 annual compensation limit is
$150,000.
(2) For the purpose of applying the limitation under
paragraph (e)(1), the "Compensation" of any
Employee who is, directly or indirectly, a five
percent (5%) or more Owner of any Affiliated
Company or is one of the ten (10) most highly
compensated Employees shall include the
Compensation earned by such Employee's Spouse and
such Employee's lineal descendants who have not
attained age 19 before the end of such Plan Year.
1.24 Disability:
"Disability" means a Participant's total and permanent, mental
or physical disability resulting in termination of employment
as evidence by presentation of medical evidence satisfactory
to the Committee.
1.25 Effective Date:
"Effective Date" means August 7, 1986.
1.26 Eligibility Computation Period:
"Eligibility Computation Period" means, with respect to an
Employee a twelve (12) consecutive month period commencing
on the Employee's Employment Commencement Date or
Reemployment Commencement Date or anniversary thereof.
1.27 Eligible Employee:
"Eligible Employee" means each Eligible Individual who has met
the participation requirements of Section 2 and is eligible to
make Salary Deferrals, without regard to whether such Salary
Deferrals are prohibited under Section 3 or Section 5.
1.28 Eligible Individual:
"Eligible Individual" means each Employee of a Participating
Company, excluding:
(a) Any Employee who has not yet attained age twenty-one
(21).
(b) Any Employee whose conditions of employment are covered
by the terms of a collective bargaining agreement in
which retirement benefits were the subject of good faith
bargaining, unless such agreement specifically provides
for coverage under this Plan,
(c) Any Employee who is a nonresident alien and who receives
no income (within the meaning of Code Section 911(d)(2)
from an Affiliated Company that constitutes income from
sources within the United States (within the meaning of
Code Section 861(a)(3)),
(d) Any Employee who is a Leased Employee.
1.29 Eligible Participant:
"Eligible Participant" means an individual who:
(a) is an Eligible Employee on the last day of the Plan Year;
and
(b) has earned at least 1,000 Hours of Service for the Plan
Year.
In addition, "Eligible Participant" shall include an individual
who, while an Eligible Employee, retires on or after age 65, dies,
or becomes Disabled during such Plan Year, regardless of the number
of Hours of Service earned during the Plan Year.
1.30 Employee:
"Employee" means any person receiving Compensation for
services rendered to an Affiliated Company, including a Leased
Employee, but excluding the following:
(a) Any person serving only as a director of an Affiliated
Company; or
(b) Any person who is an independent contractor and for whom
an Affiliated Company is not required to make Social
Security contributions.
1.31 Employment Commencement Date:
"Employment Commencement Date" means the date on which an
Employee is first credited with an Hour of Service with an
Affiliated Company.
1.32 Entry Date:
"Entry Date" means, effective January 1, 1996, each January
1st, April 1st, July 1st, and October 1st.
1.33 ERISA:
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.34 Excess Aggregate Contribution:
Effective for each Plan Year beginning on or after January 1,
1987, "Excess Aggregate Contribution" means, with respect to
any Highly Compensated Participant, the excess of Company
Matching Contributions made on behalf of such individual for
the Plan Year over the maximum amount of such
contributions permitted under the Average Contribution
Percentage Test, as determined below:
(a) The Actual Contribution Ratio of the Highly Compensated
Participant with the highest Actual Contribution Ratio
shall be reduced to the extent required to:
(1) Cause the Plan to satisfy the Average Contribution
Percentage Test, or, if less,
(2) Cause such Highly Compensated Participant's Actual
Contribution Ratio to equal the Actual Contribution
Ratio of the Highly Compensated Participant with
the next highest Actual Contribution Ratio.
The above process shall be repeated until the Plan
satisfies the Average Contribution Percentage Test.
(b) The amount of Excess Aggregate Contributions for a Highly
Compensated Participant whose Actual Contribution Ratio
is adjusted in accordance with paragraph (a) shall be
equal to the amount of his Company Matching Contributions
(determined prior to the application of paragraph (a))
minus the amount determined by multiplying such
individual's adjusted Actual Contribution Ratio
(determined after application of paragraph (a)) by his
Compensation used in computing such ratio.
(c) In the case of a Highly Compensated Participant whose
Actual Contribution Ratio is determined under the family
aggregation rules as described in paragraph (b) of
Section 1.38, the Actual Contribution Ratio is reduced in
accordance with the leveling method described above and
the Excess Aggregate Contributions for the family unit
are allocated among the family members in proportion to
the contributions of each family member that have been
combined to determine the Actual Contribution Ratio.
1.35 Excess Contribution:
Effective for each Plan Year beginning on or after January 1,
1987, "Excess Contribution" means, with respect to any Highly
Compensated Participant, the excess of Salary Deferrals
made by such individual for the Plan Year over the
maximum amount of such contributions permitted under
the Average Deferral Percentage Test, as determined below:
(a) The Actual Deferral Ratio of the Highly Compensated
Participant with the highest Actual Deferral Ratio shall
be reduced to the extent required to:
(1) Cause the Plan to satisfy the Average Deferral
Percentage Test, or, if less,
(2) Cause such Highly Compensated Participant's Actual
Deferral Ratio to equal the Actual Deferral Ratio
of the Highly Compensated Participant with the next
highest Actual Deferral Ratio.
The above process shall be repeated until the Plan
satisfies the Average Deferral Percentage Test.
(b) The amount of Excess Contributions for a Highly
Compensated Participant whose Actual Deferral Ratio is
adjusted in accordance with paragraph (a) shall be equal
to the amount of his Salary Deferrals (determined prior
to the application of paragraph (a)) minus the amount
determined by multiplying such individual's adjusted
Actual Deferral Ratio (determined after application of
paragraph (a)) by his Compensation used in computing such
ratio.
(c) In the case of a Highly Compensated Participant whose
Actual Deferral Ratio is determined under the family
aggregation rules as described in paragraph (b) of
Section 1.38, the Actual Deferral Ratio is reduced in
accordance with the leveling method described above and
the Excess Contributions for the family unit are
allocated among the family members in proportion to the
Salary Deferrals of each family member that have been
combined to determine the Actual Deferral Ratio.
1.36 Forfeiture:
"Forfeiture" means any portion of the Company Account of a
Participant that is lost pursuant to Section 5.2 or 5.10 after
an individual Separates from Service. Forfeitures shall be
used to restore Accounts, to pay Plan fees and expenses and to
reduce the Company's obligation to make Company Matching
Contributions under the Plan.
1.37 Former Participant:
"Former Participant" means any individual who has Separated
from Service and is entitled to receive a distribution under
the Plan.
1.38 Highly Compensated Employee:
(a) Effective for Plan Years beginning on or after January 1,
1987, unless the Committee elects otherwise in accordance
with regulations under Code Section 414(q), "Highly
Compensated Employee" means:
(1) An Employee who:
(A) At any time during the Lookback Year (as
defined in paragraph (c)) or the Determination
Year (if different than the Lookback Year
under paragraph (c)) was, directly or
indirectly, a five percent (5%) or more Owner
of any Affiliated Company; or
(B) During the Lookback Year:
(i) Received Compensation (determined under
Section 1.23(a) in excess of $75,000 (or
such greater amount as may be prescribed
by the Secretary of the Treasury under
Code Section 415(d)); or
(ii) Received Compensation (determined
under Section 1.23(a) in excess of
$50,000 (or such greater amount as
may be prescribed by the Secretary
of the Treasury under Code Section
415(d)) and was also a member of the
Top Paid Group; or
(iii) Was an Officer; or
(C) If the Lookback Year is different than the
Determination Year under paragraph (c), then
during the Determination Year, the individual
met one of the requirements of paragraph (B)
above (applied by substituting the words
"Determination Year" for "Lookback Year") and
was one of the one hundred (100) Employees
having the highest Compensation (determined
under Section 1.23(a) during the Determination
Year.
(2) Unless the Committee elects otherwise in accordance
with applicable regulations, any former Employee:
(A) Who performed no active service during the
Determination Year, and
(B) Who was a Highly Compensated Employee (as
defined herein) either:
(i) At any time on or after reaching age
fifty-five (55); or
(ii) In the Employee's year of
separation, as defined in
regulations under Code Section
414(q) (generally, a year of
separation is the year in which an
Employee Separates from Service or
in which the Employee's Compensation
is sufficiently reduced so that the
Employee is deemed to have Separated
from Service);
shall (except for the purposes of determining
the Top Paid Group, the top 100 Employees
under paragraph (a)(1)(C) above, and
Officers), continue to be a Highly
Compensated Employee.
(b) Special Treatment of Certain Family Members:
If an Employee is a family member of any Highly
Compensated Employee who is either (i) a five percent
(5%) or more Owner of an Affiliated Company or (ii) one
of the ten (10) Employees having the highest Compensation
for such Plan Year (determined under Section 1.23(a),
such individual shall not be treated as a separate
Employee, and any Compensation (determined under Section
1.23(a) paid and any Company Contributions or Salary
Deferrals made on his behalf shall be treated as paid to
(or contributed on behalf of) such Highly Compensated
Employee. For purposes of this paragraph, (b), "family"
shall mean an Employee's Spouse, direct ascendants or
descendants, and the spouse(s) of such direct ascendants
or descendants.
(c) Testing Period:
Unless the Committee elects otherwise, the Lookback Year
shall be the calendar year ending with or within the Plan
Year (or, in the case of a Plan Year that is shorter than
twelve months, the calendar year ending with or within
the twelve month period ending with the end of such Plan
Year). The Determination Year shall be the period
beginning on the January 1 of such Plan Year and ending
on the last day of the Plan Year. If, for any Plan Year,
the Lookback Year and the Determination Year are the
same, then there shall be only one testing period for
such Plan Year. If the Committee so elects, the
"Lookback Year" instead shall be the twelve (12) month
period immediately preceding the beginning of the Plan
Year and the "Determination Year" shall be the Plan Year.
If the Determination Year is shorter than twelve months,
the calculation with respect to who is a Highly
Compensated Employee in the Determination Year shall be
adjusted pursuant to applicable regulations.
(d) Leased Employees:
Effective for each Plan Year beginning of or after
January 1, 1987, unless the Committee elects otherwise,
for purposes of determining Highly Compensated
Employees, an individual who would otherwise be a
Leased Employee (as defined in Section 1.43) shall
not be treated as a Leased Employee if he: (i) is
covered by a money purchase pension plan maintained
by the leasing organization providing (A) a
non-integrated employer contribution of at least
ten (10%) of Compensation, (B) immediate participation
as required under Code Section 414(n), and (C) full
and immediate vesting and (ii) is not covered under
a qualified retirement plan maintained by an
Affiliated Company.
1.39 Highly Compensated Participant:
(a) Effective for each Plan Year beginning on or after
January 1, 1987, for the purpose of computing the Actual
Contribution Ratios, "Highly Compensated Participant"
means a Participant (i) who is a Highly Compensated
Employee for such Plan Year and (ii) who, for any portion
of such Plan Year, either: (A) is an Eligible
Participant as described in Section 1.29 or (B) is
directly or indirectly eligible to receive a matching
contribution in a plan that is aggregated with the Plan
in calculating the Actual Contribution Ratios.
(b) Effective for each Plan Year beginning on or after
January 1, 1987, for the purpose of computing the Actual
Deferral Ratios, "Highly Compensated Participant" means
(i) a Participant who is a Highly Compensated Employee
for such Plan Year and (ii) who, for any portion of such
Plan Year, either: (A) is an Eligible Employee as
described in Section 1.27 or (B) is directly or
indirectly eligible to make salary deferrals to a plan
that is aggregated with the Plan in calculating the
Actual Deferral Ratios.
1.40 Hour of Service:
"Hour of Service" means:
(a) For each Employee for whom an Affiliated Company
maintains an hourly service record:
(1) Each hour for which an Employee is directly or
indirectly paid by, or entitled to payment from, an
Affiliated Company for the performance of duties.
Such hours shall be credited to the Employee for
the computation period or periods in which the
Employee performs the duties for which he is paid;
(2) To the extent not included in paragraph (1), each
hour for which an Employee is directly or
indirectly paid by, or entitled to payment from, an
Affiliated Company for a period of time in which no
duties are performed due to vacation, holiday,
sickness, incapacity (including Disability),
layoff, jury duty or leave of absence, provided
that no more than 501 hours shall be credited on
account of any single continuous period during
which the Employee performs no services. These
hours shall be credited to the Employee for the
computation period or periods in which such hours
accrued; and
(3) To the extent not included in paragraphs (1) or
(2), each hour for which back pay, irrespective of
mitigation of damages, is awarded or agreed to by
an Affiliated Company. These hours shall be
credited to the Employee in accordance with the
provisions of paragraphs (1) or (2) for the
computation period or periods to which the award or
agreement pertains rather than the computation
period in which the award, agreement or payment was
made.
(b) Each Employee for whom an Affiliated Company does not
maintain an hourly service record shall be credited with
forty-five (45) Hours of Service for each week during
which the Employee would have otherwise been credited
with at least one (1) Hour of Service under paragraph
(a).
(c) To the extent required by law, each Employee in the
compulsory or wartime military service of the United
States shall be credited with normally scheduled Hours of
Service for each week of such military service, provided
that the Employee returns to the employ of an Affiliated
Company within the period provided by law after
completing such compulsory or wartime service (unless
failure to return is caused by death or Disability).
Should such Employee fail to return to work because of
death or Disability, his service and participation shall
be deemed to have continued until the date of his death
or Disability.
(d) The number of an Employee's Hours of Service and the Plan
Year or other computation period to which they are to be
credited will be determined in accordance with Section
2530.200b-2 of the Rules and Regulations for Minimum
Standards for Employee Benefit Pension Plans, which
section is hereby incorporated by reference into this
Plan.
1.41 Inactive Participant:
"Inactive Participant" means a Participant who loses his
status as an Eligible Individual but remains employed by an
Affiliated Company.
1.42 Investment Fund or Fund:
"Investment Fund" or "Fund" means an Investment Fund
authorized by the Company to be offered to Participants and
Beneficiaries for investment of their Account Balances under
the Plan.
1.43 Leased Employee:
"Leased Employee" generally means any person who, pursuant to
an agreement between an Affiliated Company and a leasing
organization, has performed services for any Affiliated
Company on a substantially full-time basis for a period of at
least one (1) year, if such services are of a type
historically performed by employees of an Affiliated
Company. Effective for each Plan Year beginning on or
after January 1, 1987, except for the purposes of
determining Highly Compensated Employee under paragraph
(d) of Section 1.38, no individual shall be treated as a
Leased Employee if (i) he is covered by a money purchase
pension plan maintained by the leasing organization
providing (A) a non-integrated employer contribution
rate of at least (10%) of compensation, (B) immediate
participation as required under Code Section 414(n),
and (C) full and immediate vesting and (ii) Leased
Employees (determined without regard to clause (i)) do
not constitute more than twenty percent (20%) of all
Employees who are not Highly Compensated Employees.
1.44 Limitation Year:
"Limitation Year" means the Plan Year.
1.45 Net Compensation:
"Net Compensation" means, for any Limitation Year, a
Participant's Compensation as defined in paragraph (a) of
Section 1.23, but shall be determined (i) excluding any Salary
Deferrals or other Salary Reduction Contributions made to any
plan of an Affiliated Company and (ii) without regard to the
limitation of Compensation in paragraph (e) of Section 1.23.
1.46 Non-Highly Compensated Participant:
(a) Effective for each Plan Year beginning on or after
January 1, 1987, for the purpose of computing the Actual
Contribution Ratios, "Non-Highly Compensated Participant"
means a Participant (i) who is not a Highly Compensated
Employee for such Plan Year and (ii) who, for any portion
of such Plan Year, either: (A) is an Eligible
Participant as described in Section 1.29 or (B) is
directly or indirectly eligible to receive a matching
contribution in a plan that is aggregated with the
Plan in calculating Actual Contribution Ratios.
(b) Effective for each Plan Year beginning on or after
January 1, 1987, for the purpose of computing the Actual
Deferral Ratios, "Non-Highly Compensated Participant"
means (i) a Participant who is not a Highly Compensated
Employee for such Plan Year and (ii) who, for any portion
of such Plan Year, either: (A) is an Eligible Employee
as described in Section 1.27 or (B) is directly or
indirectly eligible to make salary deferrals to a plan
that is aggregated with the Plan in calculating the
Actual Deferral Ratios.
1.47 Normal Retirement Age:
"Normal Retirement Age" means age 65.
1.48 Officer:
Effective for each Plan Year beginning on or after January 1,
1987, "Officer" means, for any period:
(a) An administrative executive who provides regular and
continued service for any Affiliated Company and whose
annual Compensation (determined under Section 1.23(a)
during the applicable period is in excess of fifty
percent (50%) of the amount in effect under Code Section
415(b)(1)(A) for such period; provided that if no officer
receives such amount of Compensation, the executive who
receives the highest Compensation shall be an Officer.
(b) Notwithstanding the above, the number of Officers shall
not exceed the lesser of:
(1) Fifty (50) Employees, or
(2) The greater of three (3) Employees or ten percent
(10%) of Employees.
(c) In determining the number of Officers, Employees excluded
in determining the Top Paid Group shall be excluded.
1.49 Owner:
Effective for each Plan Year beginning on or after January 1,
1987, "Owner" means, with respect to a corporation, a person
who owns, directly or indirectly, an interest in the stock of
the corporation. Percentage ownership shall be determined
using the greater of the percentage of outstanding stock owned
based upon value or upon voting rights. With respect to a
non-corporate entity, "Owner" means a person who owns,
directly or indirectly, an interest in the capital or profits
of that entity. In determining the percentage of ownership in
either a corporation or non-corporate entity, the attribution
rules described in Code Section 416(i)(1) shall apply.
1.50 Participant:
"Participant" means any Employee or former Employee who has an
Account Balance or who is an Eligible Employee. "Participant"
includes Former Participants and Inactive Participants.
1.51 Participating Company:
"Participating Company" means the Company and each other
Affiliated Company that adopts this Plan.
1.52 Plan:
"Plan" means the Gottschalks Inc. Retirement Savings Plan,
solely as set forth in this document, and all subsequent
amendments thereto.
1.53 Plan Year:
"Plan Year" means the calendar year.
1.54 Reemployment Commencement Date:
"Reemployment Commencement Date" means the date an Employee is
first credited with an Hour of Service following a Break in
Service.
1.55 Restatement Date:
"Restatement Date" means January 1, 1996.
1.56 Retirement Date:
"Retirement Date" means a Participant's Separation from
Service Date occurring on or after attainment of Normal
Retirement Age.
1.57 Rollover Account:
"Rollover Account" means the Account established for each
Participant who makes a rollover contribution in accordance
with Section 4.1(c).
1.58 Salary Deferral:
"Salary Deferral" means an amount which a Participant elects
to defer from his current Compensation under Section 3.3.
1.59 Salary Deferral Account:
"Salary Deferral Account" means the Account established to
record a Participant's Salary Deferrals and any subaccounts
that may be added hereunder.
1.60 Salary Reduction Contribution:
"Salary Reduction Contribution" means any amount contributed
by or on behalf of an Employee to a plan of an Affiliated
Company under Code Sections 125, 401(k), 402(h) or 403(b).
1.61 Separate from Service:
"Separate from Service" means to permanently terminate
employment with all Affiliated Companies.
1.62 Separation from Service Date:
"Separation from Service Date" means the date on which a
Participant Separates from Service.
1.63 Spouse:
"Spouse" means the Participant's legally married wife or
husband at the earlier of the Participant's Benefit
Commencement Date or date of death.
1.64 Top Paid Group:
Effective for each Plan Year beginning on or after January 1,
1987, "Top Paid Group" means the top twenty percent (20%) of
Employees of all Affiliated Companies for any applicable
period when ranked in order of Compensation as defined in
Section 1.23(a). In determining the number of Employees to be
included in the Top Paid Group, the following Employees shall
be excluded:
(a) Employees employed for less than a total of six (6)
months in the tested year or the preceding year;
(b) Employees who normally work less than seventeen and
one-half (17-1/2) hours per week;
(c) Employees who normally work less than six (6) months per
year;
(d) Employees who have not yet attained age twenty-one (21);
(e) Employees covered by a collective bargaining agreement,
except to the extent provided by regulation; and
(f) Employees who are classified as nonresident aliens and
who have no United States source earned income.
Notwithstanding anything to the contrary in this Section, the
Committee may elect, on a consistent and uniform basis, to
apply paragraphs (a), (b), (c) and/or (d) above on the basis
of a shorter period of service, smaller number of hours or
months, or lower age than specified above and may apply
paragraphs (b) and/or (c) on an individual or group basis.
1.65 Trust:
"Trust" means the legal entity created under the Trust
Agreement to hold the Trust Fund.
1.66 Trust Agreement:
"Trust Agreement" means the agreement between the Company and
the Trustee of the Trust Fund, as amended.
1.67 Trust Fund:
"Trust Fund" means the assets held by the Trustee under the
Trust Agreement for the benefit of Participants, Beneficiaries
and Alternate Payees.
1.68 Trustee:
"Trustee" means the Trustee chosen by the Board, and any
successor(s).
1.69 Valuation Date:
"Valuation Date" means such dates as may be designated by the
Committee.
1.70 Year of Service:
"Year of Service" means, for each Employee, a Plan Year (or
other applicable Eligibility Computation Period) in which such
Employee is credited with one thousand (1,000) or more Hours
of Service with an Affiliated Company, provided that, for
purposes of calculating a Participant's vested percentage in
benefits accrued before a Break in Service, the provisions of
Section 5.2 shall apply.
SECTION 2
Participation
2.1 Initial Participation:
Each person who is an Eligible Employee on the Effective Date
shall become an Eligible Employee on such date.
2.2 Subsequent Qualification Requirements for Plan Participation:
Each remaining Employee shall become an Eligible Employee as
of the later of: (a) the Entry Date coinciding with or next
following the date on which such individual completes a Year
of Service (disregarding any service earned before a Break in
Service) in an Eligibility Computation Period, provided he is
an Eligible Individual on such Entry Date; or (b) the date on
which he becomes an Eligible Individual.
2.3 Loss of Active Status:
(a) No Inactive Participant will receive any Company
Contributions or be eligible to make any Salary
Deferrals. However, his Account(s) shall continue to
share in Trust Fund gains and losses until the Valuation
Date immediately preceding his Benefit Commencement Date
and he shall continue to vest in his Company Matching
Contribution Account in accordance with Section
5.1(b)(2).
(b) No Former Participant shall receive any Company
Contributions or be eligible to make any Salary
Deferrals. In addition, no Former Participant shall
continue to vest in his Company Account following the
date he Separates from Service. However, such Account(s)
shall continue to share in Trust Fund gains and losses
until the Valuation Date immediately preceding such
individual's Benefit Commencement Date.
2.4 Restoration of Active Participant Status:
Each Participant who loses his status as an Eligible
Individual (including an individual who Separates from
Service) shall again become an active Participant as of the
date he again becomes an Eligible Individual.
SECTION 3
Contributions
3.1 Amount and Allocation of Company Contributions:
(a) Company Matching Contributions:
For each Plan Year, each Participating Company may
contribute Company Matching Contributions to the Trust
Fund in such amount as may be determined by the Board.
(b) Nondiscrimination Testing Allocations:
Alternatively, the Committee may direct that some or all
of the contributions to Employees that are described
under paragraph (a) above be credited to a subaccount of
their Salary Deferral Accounts to enable the Plan to meet
the qualification requirements of the Code; provided
that, to the extent required by law, such contributions
must be fully vested and not subject to withdrawal prior
to age fifty-nine and one-half (59-1/2) at the time such
contributions are made to the Plan.
(c) Limitation on Contributions:
In no event shall aggregate Company Contributions and
Salary Deferrals exceed the maximum amount deductible
under the provisions of Code Section 404(a).
(d) Forfeitures:
Forfeitures shall be applied to reduce each Participating
Company's obligation to make Company Matching
Contributions and shall thereby reduce the amount
delivered to the Trustee as described in paragraph (a)
above.
3.2 Timing of Company Contributions:
Company Contributions for each Plan Year shall be made in one
or more cash installments by the Participating Companies, but
the total amount to be contributed for any Plan Year shall be
paid by the Participating Companies to the Trustee on or
before the date the Company is required to file its Federal
Corporate Income Tax Return (including extensions) with
respect to such year.
3.3 Salary Deferrals:
Each Eligible Employee may elect to have a portion of his
Compensation (determined under Section 1.23(e)) allocated to
his Salary Deferral Account, in accordance with the following:
(a) Regular Salary Deferral:
On or before the date that an individual becomes an
Eligible Employee and is first eligible to elect to make
Salary Deferrals under this Section 3.3, each such
individual may make a written election to defer a
percentage of his Compensation, subject to the
limitations described in (c). All Salary Deferrals shall
be set forth in a written agreement authorizing regular
payroll withholdings by the Participating Company.
(b) Cessation of Salary Deferrals or Change in Contribution
Percentage Election:
Notwithstanding the provisions of paragraph (a) above, an
Eligible Employee may direct his Participating Company to
cease withholding Salary Deferrals, or to change the
contribution percentage elected. The Employee must file
a Contribution Change Form with the Human Resources
Department of the Participating Company for processing at
least seven days before the pay date as of which Salary
Deferrals are to cease or the change in contribution
percentage is to take effect.
(c) Amount of Salary Deferrals:
An Eligible Employee may defer up to fifteen percent
(15%) of his Compensation. For each Plan Year beginning
on or after January 1, 1987, the sum of Salary Deferrals
plus any other elective deferrals (within the meaning
Code Section 402(g)(3)) made to any plan maintained by an
Affiliated Company by a Participant shall not exceed
seven thousand dollars ($7,000), or such greater amount
as adjusted for cost-of-living increases in accordance
with Code Section 402(g)(5). For each Plan Year
beginning on or after January 1, 1989, to the
extent allowed by law, any Salary Deferrals
exceeding such amount plus income allocable thereto
in accordance with regulations prescribed by the
Secretary of the Treasury and less the amount of
any Excess Contributions previously returned shall
be returned to the Participant.
(d) Manner of Election:
The Committee shall establish uniform and non-
discriminatory rules governing the manner and method by
which Salary Deferrals are made and, from time to time,
may modify or change such rules.
3.4 Timing of Salary Deferrals:
Each Participating Company shall transmit Salary Deferrals to
the Trust as soon as such contributions can reasonably be
paid, but in no event later than ninety (90) days after
receipt of such contributions by the Participating Company.
For purposes of calculating Actual Deferral Ratios, Salary
Deferrals are considered contributed to the Trust by a
Participant on the date as of which they are received by his
Participating Company (i.e., on a cash basis under the Code).
3.5 Return of Company Contributions and Salary
Deferrals to the Company:
(a) Return of Contributions:
Company Contributions and Salary Deferrals are made to
the Trust contingent upon their deductibility by an
Affiliated Company under Code Section 404. Any such
contribution shall be returned by the Trustee to the
Participating Companies if:
(1) Such contribution exceeded the amount deductible by
an Affiliated Company for the taxable year, or
(2) Such contribution was made because of a reasonable
mistake as to the facts and circumstances existing
at such time, or
(3) Such contribution was conditioned on the initial
qualification of the Plan under Code Section 401(a)
and the Plan does not so qualify.
As soon as practicable following the return of funds to
the Participating Companies under this paragraph (a), the
portion of such funds attributable to Salary Deferrals
(plus earnings and minus losses thereon) shall be paid to
the individuals who made such Salary Deferrals.
(b) Limitation:
Any return of Company Contributions or Salary Deferrals
under paragraph (a) shall be limited, as applicable, to:
(1) That portion in excess of the amount deductible by
an Affiliated Company for the taxable year, or
(2) That portion attributable to a reasonable mistake
of fact, or
(3) The total amount of such contributions if the Plan
fails to qualify.
Any such return must be made within one year of the date
such contributions were made.
3.6 Discrimination Test Requirements:
(a) Average Deferral Percentage Test:
(1) Effective for Plan Years beginning January 1, 1987,
and January 1, 1988, in no event shall the Average
Deferral Percentage for Highly Compensated
Participants exceed the greater of:
(A) 1.25 Test:
The Average Deferral Percentage for Non-Highly
Compensated Participants times 1.25; or
(B) 2.0 Test:
The Average Deferral Percentage for Non-Highly
Compensated Participants times 2.0, provided
that the Average Deferral Percentage for
Highly Compensated Participants does not
exceed the Average Deferral Percentage for
Non-Highly Compensated Participants by more
than two (2) percentage points.
(2) Effective for each Plan Year beginning on or after
January 1, 1989, in no event shall the Average
Deferral Percentage for Highly Compensated
Participants exceed the greatest of:
(A) 1.25 Test:
The Average Deferral Percentage for Non-Highly
Compensated Participants for such Plan Year,
times 1.25;
(B) 2.0 Test:
The Average Deferral Percentage for Non-Highly
Compensated Participants times 2.0, provided
that the Average Deferral Percentage for
Highly Compensated Participants does not
exceed the Average Deferral Percentage for
Non-Highly Compensated Participants by more
than two (2) percentage points.
In no event shall the amount above exceed the multiple
use limitation imposed under regulations prescribed from
time to time by the Secretary of the Treasury.
(b) Average Contribution Percentage Test:
(1) Effective for Plan Years beginning January 1, 1987
and January 1, 1988, in no event shall the Average
Contribution Percentage for Highly Compensated
Participants exceed the greater of:
(A) 1.25 Test:
The Average Contribution Percentage for Non-
Highly Compensated Participants times 1.25; or
(B) 2.0 Test:
The Average Contribution Percentage for Non-
Highly Compensated Participants times 2.0,
provided that the Average Contribution
Percentage for Highly Compensated Participants
does not exceed the Average Contribution
Percentage for Non-Highly Compensated
Participants by more than two (2) percentage
points.
(2) Effective for each Plan Year beginning on or after
January 1, 1989, in no event shall the Average
Contribution Percentage for Highly Compensated
Participants exceed the greatest of:
(A) 1.25 Test:
The Average Contribution Percentage for Non-
Highly Compensated Participants times 1.25;
(B) 2.0 Test:
The Average Contribution Percentage for Non-
Highly Compensated Participants times 2.0,
provided that the Average Contribution
Percentage for Highly Compensated Participants
does not exceed the Average Contribution
Percentage for Non-Highly Compensated
Participants by more than two (2) percentage
points.
In no event shall the amount above exceed the
multiple use limitation imposed under regulations
prescribed from time to time by the Secretary of
the Treasury.
3.7 Adjustment of Salary Deferrals and/or Company Matching
Contributions:
Effective for each Plan Year beginning on or after January 1,
1987:
(a) If the Plan fails or is projected to fail the Average
Deferral Percentage Test, then the Committee shall take
one or more of the following steps:
(1) Limit Future Salary Deferrals:
The Committee may limit future Salary Deferrals for
some or all Highly Compensated Participants (or
those individuals projected to be Highly
Compensated Participants) to the extent it deems
such action advisable to meet such test.
(2) Return Excess Contributions:
The Committee may return Excess Contributions (with
income allocable thereto in accordance the method
in which income shall be allocated pursuant to
Section 4.4) to Highly Compensated Participants.
Such reductions shall be made in the following
order: (i) first, any amounts previously returned
under Section 3.3(c) for the Plan Year shall be
subtracted; (ii) any Company Matching Contributions
included in calculating the Actual Deferral Ratio
shall be returned; (iii) if necessary, unmatched
Salary Deferrals shall be returned, and (v) if
necessary, matched Salary Deferrals (and the
Company Matching Contributions made with respect to
such Salary Deferrals) shall be returned until such
test is met.
(3) Allocate Company Contributions:
Pursuant to paragraph (c) of Section 3.1, the
Committee may allocate, to the extent necessary, a
portion or all of the Company Contributions for the
Plan Year to separate subaccounts of the Salary
Deferral Accounts for Non-Highly Compensated
Participants provided that such allocation is not
made in a manner that would cause the contributions
to be matching contributions within the meaning of
Code Section 401(m)(4), provided further that, to
the extent required by law, such contributions must
be fully vested and not subject to withdrawal prior
to age fifty-nine and one-half (59-1/2) at the time
such contributions are made to the Plan.
The above actions shall be taken prior to testing the
multiple use limitation under set forth in Paragraphs
(a)(2) and (b)(2) of Section 3.6. In the event that the
Plan fails or is projected to fail the multiple use
limitation for a Plan Year after the above steps have
been taken, the Committee shall take further corrective
steps set forth under Paragraph (b) below.
(b) If the Plan fails or is projected to fail the Average
Contribution Percentage Test, the Committee shall take
one or more of the following steps:
(1) Limit Future Salary Deferrals or
Matching Contributions:
The Committee may limit future Salary Deferrals or
Company Matching Contributions for some or all
Highly Compensated Participants (or those
individuals projected to be Highly Compensated
Participants) to the extent it deems such action
advisable to meet such test.
(2) Return Excess Aggregate Contributions:
The Committee may return Excess Aggregate
Contributions (with income allocable thereto in
accordance the method in which income is a
allocated pursuant to Section 4.4) to some or all
Highly Compensated Participants.
(3) Forfeit Excess Aggregate Contributions:
To the extent allowable under the Code (as, for
example, if the Participant has any nonvested
Company Matching Contributions or if the
Participant has vested Company Matching
Contributions made with respect to Salary Deferrals
returned under paragraph (a)(2) above), the
Committee may forfeit Company Matching
Contributions made to a Highly Compensated
Participant. After all other Forfeitures are
allocated under the Plan, the Committee shall
allocate such forfeited Excess Aggregate
Contributions to other Participants (but in no
event to any Highly Compensated Participant if such
allocation would cause the Plan to fail the Average
Deferral Percentage Test or the Average
Contribution Percentage Test) or solely to Non-
Highly Compensated Participants as a Company
Matching Contribution. Any such forfeited amounts
shall be included (i) in the calculation of the
Actual Contribution Ratio (or, if applicable,
the Actual Deferral Ratio) and (ii) as an
Annual Addition for those Participants who
receive such allocations.
The above actions shall be taken prior to testing the
multiple use limitation set forth in paragraphs (a)(2)
and (b)(2) of Section 3.6. In the event that the Plan
fails or is projected to fail the multiple use limitation
for a Plan Year after the above steps have been taken,
the Committee shall take one or more of the corrective
steps under this paragraph with respect to those Highly
Compensated Participants who were included in both the
Average Deferral Percentage Test and the Average
Contribution Percentage Test for such Plan Year.
(c) Timing of Correction of Excess Contributions and Excess
Aggregate Contributions:
To the extent practicable, any correction of Excess
Contributions or Excess Aggregate Contributions in
accordance with paragraphs (a) and (b) (other than
limitations on future Salary Deferrals and future Company
Matching Contributions in accordance with paragraphs
(a)(1) and (b)(1)) shall be made within the two and one-
half (2-1/2) month period following the end of Plan Year
in which the Excess Contribution or Excess Aggregate
Contribution was made; provided that such correction
shall not be made later than the last day of the Plan
Year following such Plan Year, or such later date as may
be allowed by law. In the event of a complete
termination of the Plan during the Plan Year in which
such Excess Contribution or Excess Aggregate Contribution
was made, such correction shall be made as soon as
practicable after the date the Plan terminates, but in no
event later than the close of the twelve-month period
immediately following such termination.
3.8 Rollovers from Other Qualified Plans:
(a) Each Employee who, as a result of the termination of
another qualified plan, termination of employment,
Disability or attainment of age fifty-nine and one-half
(59-1/2) has received a distribution of his entire
interest in a plan that meets the requirements of Code
Section 401(a) (the "Other Plan") may, in accordance with
procedures approved by the Committee, roll over the
distribution from the Other Plan to a Rollover Account
if:
(1) The distribution from the Other Plan is a "qualified
total distribution" as defined in Code Section
401(a)(5)(E)(i);
(2) The rollover occurs on or before the sixtieth (60th)
day following the individual's receipt of such
distribution from the Other Plan (or from an
individual retirement account that consisted solely
of prior distributions from the Other Plan(s), plus
earnings thereon); and
(3) The amount rolled over is not in excess of such
distribution from the Other Plan (plus earnings
thereon accrued in an interim individual retirement
account as described above) less the amount, if
any, considered contributed under Code Section
402(d)(4)(D)(i).
(b) Effective January 1, 1993, each Employee who has
received (or is entitled to receive) a distribution of
all or a part of his interest in a plan that meets the
requirements of Code section 401(a) (the "Other Plan")
(or an Employee who is not yet an Eligible Employee or a
Participant who, as a result of termination of
employment, has received a distribution of all or a part
of his or her entire interest in such a plan that meets
the requirements of Code Section 401(a)) may, in
accordance with procedures approved by the Company, roll
over the distribution from the Other Plan to a
Rollover Account if:
(1) The distribution from the Other Plan is an "eligible
rollover distribution" as defined in Treasury
Regulation section 1.402(c)-2T, Q&A3;
(2) The rollover occurs on or before the sixtieth
(60th) day following the individual's receipt of
such distribution from the Other Plan (or from a
conduit individual retirement account that
consisted solely of prior distributions from the
Other Plan(s), plus earnings thereon); or the
rollover takes the form of a direct transfer from
the Other Plan to the Plan after the date the
individual becomes entitled to receive such
distribution;
(3) The amount rolled over is not in excess of such
distribution from the Other Plan (plus earnings
thereon accrued in an interim individual retirement
account as described above) less the amount, if
any, considered contributed under Code section
402(d)(4)(D)(i).
(c) Effective January 1, 1993, the Plan is amended to include
Revenue Procedure 93-12 model language, which provides
for the requirement of section 401(a)(31) of the Code
that qualified plans permit the direct rollover of
eligible rollover distributions as follows:
(1) This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any
provision of the plan to the contrary that would
otherwise limit a distributee's election under this
Article, a distributee may elect, at the time and
in the manner prescribed by the plan administrator,
to have any portion of an eligible rollover
distribution paid directly to an eligible
retirement plan specified by the distributee in a
direct rollover.
(2) Definitions
(i) Eligible rollover distribution: An
eligible rollover distribution is any
distribution of all or any portion of the
balance to the credit of the distributee,
except that an eligible rollover distribution
does not include: any distribution that is
one of a series of substantially equal
periodic payments (not less frequently than
annually) made for the life (or life
expectancy) of the distributee or the joint
lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten
years or more; any distribution to the extent
such distribution is required under section
401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross
income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities).
(ii) Eligible retirement plan: An eligible
retirement plan is an individual retirement
account described in section 408(a) of the
Code, an individual retirement annuity
described in section 408(b) of the Code, an
annuity plan described in section 403(a) of
the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an
eligible retirement plan is an individual
retirement account or individual retirement
annuity.
(iii) Distributee: A distributee includes an
employee or former employee. In addition, the
employee's or former employee's surviving
spouse and the employee's or former employee's
spouse or former spouse who is the alternate
payee under a qualified domestic relations
order, as defined in section 414(p) of the
Code, are distributees with regard to the
interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a
payment by the plan to the eligible retirement
plan specified by the distributee.
3.9 Transfer of Assets of Other Plans:
Notwithstanding any other provision hereof, there may be
transferred to the Plan all or any of the assets held (whether
by a trustee, custodian or otherwise) on behalf of any other
plan that has satisfied the applicable requirements of Code
Section 401(a) and that is maintained for the benefit of any
Employee. No direct transfer to this Plan from another
qualified plan may be made without specific prior approval of
the Committee to such transfer. The Committee shall have full
responsibility for determining whether or not the requirements
of the Code have been met with respect to each such transfer,
including: (1) the requirement that any direct transfer will
not cause the Plan to become a direct or indirect transferee
of a plan subject to Code Section 401(a)(11) (within the
meaning of Code Section 401(a)(11)(B)(iii)(III)), and (2) all
the requirements of Code Section 411(d)(6), including, if
applicable, the requirement that the Plan, at the time of any
direct transfer, provides all the optional forms of benefit
required with respect to the transfer.
SECTION 4
Participant's Credit in the Trust Fund
4.1 Accounts:
(a) Salary Deferral Account:
A Salary Deferral Account shall be opened and maintained
for each individual who makes Salary Deferrals to record:
(1) the amounts of the Participant's Salary Deferrals; (2)
allocations of income; (3) distributions; (4) withdrawals
and (5) all other adjustments affecting the value of such
Account. The Account may include subaccounts established
to record (a) the amount of a Participant's post-1988
Salary Deferrals and (b) the amount of a Participant's
pre-1989 Salary Deferrals plus all income and earnings
thereon to facilitate hardship withdrawals under Section
5.6.
(b) Company Matching Contribution Account:
A Company Matching Contribution Account shall be opened
and maintained for each individual who receives a Company
Matching Contribution to record: (1) the amount of Company
Matching Contributions made on such individual's behalf;
(2) allocations of income or loss; (3) distributions; (4)
withdrawals; and all other adjustments affecting the value
of such Account.
(c) Rollover Account:
A Rollover Account shall be opened and maintained for each
individual who makes a rollover contribution to record:
(1) the amount of such individual's rollover
contributions; (2) allocations of income or loss; (3)
distributions; (4) withdrawals; and all other adjustments
affecting the value of such Account.
4.2 Maximum Annual Addition:
(a) Maximum Annual Addition:
Subject to the cost of living adjustments provided under
paragraph (d), the maximum Annual Addition to a
Participant's Accounts for any Limitation Year shall
never exceed the lesser of:
(1) $30,000 or, if greater, twenty-five percent (25%) of
the dollar limitation in effect under Code Section
415(b)(1)(A), or
(2) Twenty-five percent (25%) of the Participant's Net
Compensation.
(b) Excess Annual Addition:
If, for any Limitation Year, a Participant's Annual
Addition exceeds the amount described in paragraph (a) and
such Participant made Salary Deferrals for such Limitation
Year, Salary Deferrals equal to the amount of the excess
(and income allocable thereto) shall be distributed to
such Participant within twelve (12) months following the
end of each Limitation Year in which such excess Annual
Additions were made. Any excess Annual Addition remaining
after such allocation shall be held in a suspense account
and shall be allocated on behalf of Eligible Participants
in subsequent Limitation Years in the same manner as
Company Matching Contributions under Section 3.1(a).
During any period that such a suspense account is
maintained:
(1) No Company Contributions or Salary Deferrals may be
made;
(2) Investment gains and losses or other income shall
not be allocated to the suspense account; and
(3) The suspense account shall continue to be allocated
on behalf of applicable Eligible Participants as of
each last day of each Limitation Year until the
suspense account is exhausted.
(c) Multiple Defined Contribution Plans:
If an Affiliated Company is contributing to another
defined contribution plan (as that term is defined in Code
Section 414(i)) on behalf of any Participant, such
Participant's Annual Additions in such other plan shall be
aggregated with annual addition made to this Plan for
purposes of applying the limitations under paragraph
(a) above.
(d) Adjustment of Limitation:
The limitation imposed by paragraph (a)(1) shall be
adjusted annually (or when allowable) for increases in the
cost of living, in accordance with regulations issued by
the Secretary of the Treasury pursuant to Code Section
415(d). Each adjustment (when allowable) shall be limited
to the scheduled annual increase determined by the
Commissioner of Internal Revenue. Such cost of living
adjustment shall be effective not earlier than January 1,
of the year in which it is made.
(e) Limitation for Multiple Plans:
If a Participant is also a participant in a defined
benefit plan maintained by an Affiliated Company, the sum
of the defined benefit plan fraction and the defined
contribution plan fraction for such Participant for any
Limitation Year shall not exceed 1.0.
(1) The defined benefit plan fraction for any Limitation
Year is a fraction:
(A) The numerator of which is the projected annual
benefit of the Participant in the plan(s),
determined as of the close of the Limitation
Year, and
(B) The denominator of which is the lesser of:
(i) 1.25 multiplied by the defined benefit plan
dollar limitation in effect for such year
under Code Section 415(b), or
(ii) 1.4 multiplied by one hundred percent (100%)
of the Participant's average Net
Compensation for the three (3) consecutive
Limitation Years during which he was a
Participant and had the greatest aggregate
Net Compensation, determined as of the close
of the Limitation Year.
(2) The defined contribution plan fraction for any
Limitation Year is a fraction:
(A) The numerator of which is the sum of the Annual
Additions (adjusted under paragraph (c), if
applicable) made on behalf of a Participant as
of the close of the Limitation Year, and
(B) The denominator of which is the sum of the
lesser of (i) or (ii) for such year and each
prior year of service with an Affiliated
Company:
(i) 1.25 multiplied by the defined contribution
plan dollar limitation under paragraph
(a)(1) in effect for such Limitation Year,
or
(ii) 1.4 multiplied by twenty-five percent (25%)
of the Participant's Net Compensation for
such year.
In determining the limitation for multiple plans under
this paragraph (e), the defined contribution plan
fraction for the Limitation Year shall be calculated
first and then the defined benefit plan fraction shall be
calculated, such that the benefit provided under the
defined benefit plan(s) shall be reduced, as necessary,
to comply with the requirements of this paragraph (e).
4.3 Investment Funds:
(a) General:
Unless the Committee elects otherwise, the Trustee shall
invest the Trust Fund solely in the Investment Funds
selected by the Committee for this purpose as directed by
Participants, Beneficiaries or Alternate Payees. The
Committee shall have the right to determine, from time to
time, the options that shall be offered with respect to
the investment of such Accounts, including percentage
increments in which such Accounts may be divided among
Investment Funds, the maximum number of Investment Funds
in which they may invest their Accounts at one time, the
times and effective dates of elections to change
investment of such Accounts, the Investment Fund(s)
in which such Accounts will be held in the event
an investment election in the event an investment
election is not made, the administrative costs to be
charged to individuals for processing of investment
election changes and any other elements affecting
the investment of Accounts.
(b) Amount and Timing of Election:
Each individual shall have the opportunity to direct the
investment of his Salary Deferral Account, his Company
Matching Account, and his Rollover Account among the
Funds. Effective as of each January 1, April 1, July 1,
and October 1, each individual may make an investment
election, or change a prior election. An election will be
applicable to the investment of future contributions to
such individual's Account(s) and to the transfer of his
prior Account Balance(s) among the Funds.
(c) No Investment Change or Election:
In the event that no subsequent election is made by a
individual, his Account Balances and future additions to
his Accounts shall continue to be invested according to
the his most recent election.
4.4 Allocation of Fund Earnings:
As of each Valuation Date, the net earnings and gains or losses
of the assets invested in each Investment Funds since the
preceding Valuation Date shall be allocated among the Accounts
of Participants, Beneficiaries and Alternate Payees in the
proportion that the value of the Accounts of each such
individual bears to the value of the Account Balance(s) of all
such Participants, Beneficiaries and Alternate Payees invested
in such Investment Fund eligible to share in the allocation.
An individual's rollover contribution from another qualified
plan will be credited to such individual's Rollover Account as
soon as feasibly possible after such rollover is received, and
the individual's Account Balances, net earnings, and gains
and losses shall be adjusted accordingly.
4.5 Plan Accounting:
All accounting for the Plan shall be rendered on an accrual
basis.
4.6 Accounting:
All accounting for the Trust, other than adjustment of the
Accounts to reflect the market value of Trust assets, shall be
rendered on a cash basis, except that all Company Contributions
shall be credited to the Trust as of no later than the last day
of the Plan Year for which such contributions are made. Salary
Deferrals shall be credited as of the applicable Valuation Date
for which such deferrals are made.
4.7 Valuation:
The Trust Fund shall be valued on the basis of the fair market
value of the assets held by the Trustee as of each Valuation
Date.
SECTION 5
Benefit Payments
5.1 Benefit Amount:
An individual shall be entitled to the following benefits:
(a) Salary Deferral Account:
A Participant shall be entitled to one hundred percent
(100%) of his Salary Deferral Account Balance upon the
date he Separates from Service. Such Account Balance
shall be determined as of the Valuation Date coincident
with or immediately preceding the Benefit Commencement
Date. Such Salary Deferral Account Balance shall then be
increased by any Salary Deferrals made after such date.
(b) Company Matching Contribution Account:
(1) Retirement, Disability or Death:
A Participant who attains his Normal Retirement Age,
dies or is deemed to have suffered a Disability
shall be entitled to one hundred percent (100%) of
his Company Matching Contribution Account Balance
upon the date he Separates from Service. Such
Account Balance shall be determined as of the
Valuation Date coincident with or immediately
preceding the Benefit Commencement Date, less any
withdrawals made after such Valuation Date.
(2) Other Termination of Service:
A Participant who Separates from Service prior to
his Normal Retirement Age (and other than by reason
of death or Disability), and who has completed at
least two (2) Years of Service shall be entitled to
his Company Matching Contribution Account Balance
determined as of the Valuation Date coincident with
or immediately preceding the Benefit Commencement
Date, less any withdrawals made after such Valuation
Date, and multiplied by the following vesting
percentage:
Years of Service Vesting Percentage
Less than 2 0%
2 but less than 3 34%
3 but less than 4 67%
4 or more 100%
(c) Rollover Accounts:
A Participant shall be entitled to one hundred percent
(100%) of his Rollover Account Balance upon the date he
Separates from Service. Such Account Balance shall be
determined as of the Valuation Date coincident with or
immediately preceding the Benefit Commencement Date, less
any withdrawals made after such Valuation Date.
(d) Deemed Distribution:
If a Participant who Separates from Service is nonvested
in his Company Contribution Account, such Participant will
be deemed to have received a distribution of zero dollars
($0.00) for purposes of Section 5.2(a).
(e) Death:
If a Participant who is entitled to a benefit under this
Section 5.1 dies, any amount due such Participant shall be
paid to his Beneficiary.
5.2 Forfeiture:
The Company Contribution Account Balance of a Participant who
Separates from Service shall be forfeited as follows:
(a) Timing:
If a Participant is entitled to less than one hundred
percent (100%) of his Company Contribution Account Balance
and receives a distribution of his vested benefit
(including a deemed distribution under Section 5.1(d)
above), the nonvested portion shall be forfeited as of the
last day of the Plan Year occurring on or after the
earlier of his Benefit Commencement Date or the
Participant's fifth (5th) consecutive one-year Break in
Service (sixth (6th) consecutive one-year Break in Service
if absence from employment was due to a Parental Leave,
defined as the period of absence from work by reason
of pregnancy, the birth of an Employee's child,
the placement of a child with the Employee in connection
with the child's adoption, or caring for such child
immediately after birth or placement as described in
Code section 410(a)(5)(E).
(b) Participant's Return to Service:
(1) Special Account:
If a Participant forfeits any part of his Account
Balance under paragraph (a) and is rehired by an
Affiliated Company prior to incurring five (5)
consecutive one-year Breaks in Service, (or six (6)
consecutive one-year Breaks in Service as described
in paragraph (a) above), the Participant's
Forfeiture (plus earnings thereon) will be
recredited to a special account ("Special Account"),
as of the first day of the Plan Year coinciding with
or preceding the Participant's date of rehire. The
sources for recrediting a prior Forfeiture in a
subsequent Plan Year will be, in order of priority:
(A) Forfeitures occurring in the Plan Year in which
the Special Account is created; if
insufficient, then
(B) Contributions made by a Participating Company
for the Plan Year in which the Special Account
is created.
(2) Subsequent Separation from Service:
When the Participant subsequently Separates from
Service, the vested portion of his Special Account
shall equal P[AB + (R x D)] - (R x D) where:
(A) P = the Participant's vested percentage on the
date he later Separates from Service,
(B) AB = the Participant's Special Account Balance
on the date he later Separates from
Service,
(C) R = the ratio of the Participant's Special
Account Balance (as described in (B)
above) to his Special Account Balance as
of the date it was created as described
under Section 5.2(b)(1) (prior to updating
for income or loss), and
(D) D = the aggregate amount which the Participant
previously received.
(c) Rehire After Incurring Five or Six One-Year Breaks In
Service:
If the Former Participant is not rehired by an Affiliated
Company before incurring five (5) or six (6) consecutive
one-year Breaks in Service, the Forfeiture shall be
permanent.
5.3 Form of Distribution:
The Trustee shall distribute all benefits in a single lump sum.
5.4 Timing of Distributions:
(a) In general:
All distributions shall comply with Code Section 401(a)(9)
and regulations promulgated thereunder.
(b) Distributions to a Participant:
Except as provided in paragraph (c), the Trustee shall
distribute benefits as soon as practicable following the
date a Participant Separates from Service, provided that
if the Participant's vested Account Balance in all
Accounts exceeds $3,500 (or exceeded $3,500 at the time of
any prior installment payment, hardship distribution or
loan) and the Participant has neither attained Normal
Retirement Age nor commenced receiving benefits, the
Participant must consent in writing to any distribution.
The Participant's consent must be obtained after the Plan
has provided any written notice that may be required by
Treasury Regulation Section 1.411(a)-11(c) no less than 30
days and no more than (90) days prior to the Participant's
Benefit Commencement Date. Unless the Participant consents
to an earlier distribution, the Trustee shall distribute
benefits following the Participant's attainment of Normal
Retirement Age, but in no event later than sixty (60) days
after the end of the Plan Year in which he attains Normal
Retirement Age.
If a distribution is one to which Code Sections 401(a)(11)
and 417 do not apply, such distribution may commence less
than 30 days after the notice required under Treasury
Regulation Section 1.411(a)-11(c) is given, provided:
(1) The Committee clearly informs the Participant that
the Participant has a right to a period of at least
30 days after receiving the notice to consider the
decision of whether or not to elect a distribution
(and, if applicable, a particular distribution
option) and
(2) The Participant, after receiving the notice,
affirmatively elects a distribution.
(c) Participant's Latest Benefit Commencement Date:
Generally, the Trustee shall distribute benefits to a
Participant no later than April 1 following the calendar
year in which the Participant attains age seventy and one-
half (70-1/2). However, a Participant who attained age
seventy and one-half (70-1/2) before January 1, 1988 and
was not at any time after attaining age sixty-six and one-
half (66-1/2) a five percent (5%) or more Owner of any
Affiliated Company may delay distribution of benefits
until he Separates from Service. Such benefits shall be
distributed as soon as practicable following the date such
Participant Separates from Service, but in no event later
than the April 1 following the calendar year in which such
date occurred.
(d) Distributions to a Beneficiary:
If the Participant dies before Plan benefits are required
to be paid under paragraph (c), the Trustee shall pay
benefits to the Participant's Beneficiary as soon as
practicable following the Participant's death, but in
no event later than December 31 of the calendar year
in which the fifth (5th) anniversary of the
Participant's death occurs.
5.5 Rehire of Former Participant:
Subject to the provisions of Section 5.4(c), if an Affiliated
Company rehires a Former Participant, that Participant's
distribution shall be delayed until he again Separates from
Service.
5.6 Hardship Withdrawals of Salary Deferrals:
(a) General Requirements:
Subject to the approval of the Committee, a Participant
may make hardship withdrawals from his Salary Deferral
Accounts if necessary to meet an immediate and heavy
financial need, in accordance with the following:
(1) Maximum/Minimum Amount Available for Withdrawal:
A Participant may withdraw from his Salary Deferral
Account the lesser of (i) the sum of his December
31, 1988 Salary Deferral Account Balance (including
income allocable thereto) plus Salary Deferrals made
after December 31, 1988 (excluding income allocable
thereto) or (ii) the amount necessary to satisfy the
immediate and heavy financial need.
(2) Withdrawal Must be Necessary:
Hardship withdrawals from a Participant's Salary
Deferral Account shall granted only if necessary to
meet an immediate and heavy financial need. A
withdrawal will automatically be considered
necessary if it meets all the requirements set forth
below:
(A) The Participant has withdrawn the maximum
allowable amount from his Rollover Account
under Section 5.7;
(B) The Participant has obtained all loans
available under Section 14 of the Plan;
(C) The Participant has obtained any other in-
service distributions available under the Plan;
and
(D) The Participant has received all withdrawals,
distributions or loans for which he is eligible
from all other plans maintained by any
Affiliated Company.
(E) The Participant's Salary Deferrals and Salary
Reduction Contributions (excluding any amount
contributed by or on behalf of an Employee to a
plan of an Affiliated Company under Code
Section 125) under each plan of each Affiliated
Company shall be suspended for a period of
twelve (12) months after receipt of the
hardship distribution; and
(F) The maximum amount the Participant can defer on
an elective basis in the calendar year
following the hardship withdrawal is the
applicable annual dollar limit reduced by total
of the Participant's Salary Reduction
Contributions made in the calendar year of the
hardship withdrawal.
(3) What Constitutes an Immediate and Heavy Financial
Need:
A Participant will be granted a hardship withdrawal
only if such withdrawal is necessary to meet one or
more of the following financial needs, which are
deemed to be immediate and heavy:
(A) The payment of unreimbursed medical expenses
described in Code Section 213(d) incurred by
the Participant, his spouse, or any dependent
(as defined in Code Section 152) or obtaining
medical care within the Code Section 213(d) for
such individuals;
(B) The purchase (excluding mortgage payments) of
the Participant's principal residence;
(C) The payment of tuition and related educational
fees (excluding living expenses) for post-
secondary education for the next twelve (12)
months for the Participant, his spouse,
children or dependents (as defined in Code
Section 152);
(D) The payment of debts necessary to prevent
eviction or foreclosure on the Participant's
principal residence;
(E) Such other circumstances as may be recognized
by the Internal Revenue Service as constituting
an immediate and heavy financial need; or
(F) Such other objective criteria as may be
developed by the Committee from time to time.
(4) If requested by the Participant, the amount of such
withdrawal may include any anticipated additional
amounts necessary to compensate for federal, state
or local income taxes and any penalties associated
with the amount described in paragraph (3).
(b) Timing of Withdrawals:
Any hardship withdrawal pursuant to this Section will be
paid at a time determined by the Committee, which shall
generally be as soon as practicable after receipt by the
Committee of the withdrawal request and any required
supporting documentation.
5.7 Withdrawals of Rollover or Company Matching Contribution
Accounts for any Substantive Financial Need:
(a) General Requirements:
Withdrawals from a Participant's Rollover Account or
Company Matching Contribution Account (in such order)
shall be granted by the Committee for any substantive
financial need described in Section 5.6(a)(3). The
Committee shall require proof of a Participant's
substantive financial need. The Committee may rely on
information provided to it by a Participant without the
need for independent investigation if such reliance is
reasonable under the circumstances.
(b) Timing of Withdrawals:
Any withdrawal pursuant to this Section 5.7 will be paid
at a time determined by the Committee, which shall
generally be as soon as practicable after the Committee
receives of the withdrawal request and any required
supporting documentation.
5.8 Withdrawals After Age Fifty Nine and One-Half (59-1/2):
Any Participant who has attained age fifty nine and one-half
(59-1/2) may elect to have the Committee direct the Trustee to
distribute all or a part of the Account Balances in which the
Participant is fully vested. The withdrawal amount shall come
from the Participant's Accounts in the following order:
Rollover Account, Salary Deferral Account, Company Matching
Contribution Account. Such Participant's eligibility for
continued participation in the Plan shall be unaffected by such
distribution and shall continue to be determined on the same
basis as any other Participant. The maximum number of
withdrawals a Participant may make on or after age 59-1/2 is
one.
5.9 Values and Allocation Among Investment Funds:
No withdrawals pursuant to this Section 5 shall exceed an
individual's applicable vested Account Balance. Such Account
Balance shall be determined as of the Valuation Date
immediately preceding the date of the withdrawal, less any
distributions made since such date. If the individual's
Account Balance is invested in more than one Investment Fund,
the withdrawal shall be allocated pro-rata among the Funds.
5.10 Forfeiture of Benefits Where Recipient Cannot Be Located:
(a) Except as provided in paragraph (b), if an individual is
entitled to receive a benefit under this Plan cannot be
located, the Committee shall take the following steps
to locate such individual:
(1) Attempt to contact the former Participant through
the U.S. Postal Service, including a "Mail
Forwarding Request."
(2) Contact the Social Security Administration informing
them of the former Participant's entitlement to a
distribution and instructions on what he must do to
receive the distribution.
(3) Contact the Internal Revenue Service informing them
of the former Participant's entitlement to a
distribution and instructions on what he must do to
receive the distribution.
If the individual cannot be found and such benefit has not
been paid by two (2) years after such benefit was to
commence because the Company has been unable to locate
such individual, the benefit may be forfeited and
allocated as a Forfeiture.
(b) If an individual whose benefit was forfeited under
paragraph (a) is subsequently located, the Forfeiture
shall be reinstated, together with earnings during the
period of Forfeiture based on the investment elections
made by such individual prior to the Forfeiture. The
Committee shall immediately direct the Trustee to pay
benefits to such individual under the terms of the Plan.
5.11 Incompetency:
If an individual has been declared legally incompetent, the
Committee shall pay such individual's Plan benefits to his
legal guardian.
SECTION 6
Designation of Beneficiary
6.1 General:
Subject to Section 6.4 below, each Participant may designate in
writing, in a form and manner designated by the Committee, a
Beneficiary or Beneficiaries to receive the benefits payable
under the Plan by reason of the Participant's death. A change
in Beneficiary designation may be made by the Participant at
any time by filing such written notice with the Committee,
provided that such notice is filed before the Participant's
death.
6.2 Absence of Proper Designation:
Only Beneficiaries designated under Section 6.1 above will be
recognized by the Committee as entitled to the benefits
distributable under the Plan, except that in the absence of any
such designation, the Committee shall pay such benefit to the
following:
(a) The Participant's surviving Spouse; if none, then
(b) The executor or administrator of the Participant's estate.
6.3 Rights of Beneficiaries:
Limitations on a Participant's rights shall apply to and bind
such Participant's Beneficiaries, and no Beneficiary shall have
any greater right or interest hereunder than the Participant
through whom the Beneficiary claims.
6.4 Spouse as Beneficiary:
(a) Notwithstanding any provision of the Plan to the contrary,
a Participant's vested benefits under the Plan shall be
payable in full upon the Participant's death to the
Participant's surviving Spouse. If there is no surviving
Spouse or the surviving Spouse consents in the manner
specified in below, such benefits shall be payable to the
Participant's designated Beneficiary.
(b) Effective for each Plan Year beginning on or after January
1, 1987, the Participant's Spouse may consent, in writing,
to the designation of a specific nonspouse Beneficiary.
Such designation may not be changed without further
spousal consent. The Spouse's consent shall be witnessed
by a Plan representative or a notary public, but shall not
be required if it is established to the satisfaction of a
Plan representative that such consent cannot be obtained
because there is no Spouse, or the Spouse cannot be
located, or such other circumstances exist as may be
prescribed by applicable regulations. The Spouse's
consent shall be irrevocable unless the Participant
changes his beneficiary designation, in which case the
Spouse's consent shall be deemed to be revoked and the
Spouse shall once more become the Participant's designated
Beneficiary. Any spousal consent, or establishment that
such consent cannot be obtained because the Spouse cannot
be located, shall be effective only with respect to that
Spouse.
SECTION 7
Committee
7.1 Members:
The Plan shall be administered by a Committee who shall be
appointed by, and who shall serve at the pleasure of, the
Board.
7.2 Responsibilities:
The Committee shall appoint one of its members to be Chairman
of the Committee. The Committee shall have complete control
of the administration of the Plan, with all powers necessary
to enable it to carry out its duties in that respect. The
Committee shall determine any question arising in connection
with the interpretation, application or administration of the
Plan (including any question of fact relating to age,
employment, compensation or eligibility of employees) and its
decisions or actions in respect thereof shall be conclusive
and binding upon any and all persons and parties. The
Committee's interpretations, determinations and actions taken
under the Plan shall in all cases result in like treatment for
employees who are similarly situated.
7.3 Action by the Committee:
A majority of the Committee shall constitute a quorum for the
transaction of business. All Committee actions shall be
decided by a vote of not less than a majority of the
Committee. Resolutions may be adopted or any other action
taken at a meeting in person, at a meeting by telephone, by
written consent signed by a majority of the Committee members,
or by any other reasonable means. No Committee member shall
vote or act on any matter that relates solely to such member
or such member's interest as a Participant. The Committee may
act notwithstanding the existence of a vacancy in the
Committee so long as there are at least two (2) Committee
members.
7.4 Records:
The Committee shall keep a complete record of all its
proceedings and all data necessary for the administration of
the Plan.
7.5 Compensation and Expenses:
The Committee members shall serve without compensation for
their services as such, but shall be reimbursed all necessary
expenses incurred in the discharge of their duties by the
Trust, to the extent allowed by ERISA, or, to the extent not
reimbursed by the Trust, by the Company for, including without
limitation the cost of the bond required under Section 412 of
ERISA and the fees and expenses of such agents as may be hired
or appointed by the Committee pursuant to Section 7.6.
7.6 Agents:
The Committee may allocate to one or more of its members and
may delegate to any other person or persons any of its rights,
powers, duties and responsibilities with respect to the
operation and administration of the Plan. The Committee shall
review any such allocation or delegation at least annually and
such allocation or delegation shall be terminable upon such
notice as the Committee, in its sole discretion, deems
reasonable and prudent under the circumstances. Without
limiting the scope of the foregoing, the Committee may (i)
employ such persons as the Committee, in its sole discretion,
determines to be appropriate to render advice or perform
services with respect to the responsibilities of the
Committee, including, without limitation, accountants,
attorneys, financial consultants and employee benefit
consultants, and (ii) authorize one or more of its members to
execute documents on its behalf and to direct the Trustee in
the performance of the Trustee's duties, in which case the
Trustee, upon written notification of such authorization,
shall accept and rely upon such documents until notified in
writing that the Committee has revoked such authorization.
7.7 Reports:
The Committee shall cause such reports and other documents and
data as are required under ERISA and the Code and any
regulations or rules promulgated under such laws to be timely
filed with the proper governmental authority and/or furnished
to all persons receiving benefits under the Plan.
7.8 Fiduciaries:
Each Committee member shall act as a fiduciary on behalf of
Participants, Beneficiaries and Alternate Payees. The
Committee is the Plan Administrator within the meaning of
Section 3(16) of ERISA.
7.9 Indemnification:
(a) The Company shall indemnify each member of the Board,
each member of the Committee and any other Employee to
whom fiduciary duties with respect to the Plan are
delegated against all claims, losses, damages, expenses,
and liabilities, including attorneys' fees, from any
alleged action or alleged failure to act in connection
with such individual's duties with respect to the Plan,
except when the same is judicially determined to be due
to the gross negligence or willful misconduct of such
member.
(b) The Company shall have the right, but not the obligation,
to conduct the defense of such persons in any proceeding
to which this Section applies. The Company may satisfy
its obligation under this Section, in whole or in part,
through the purchase of a policy or policies of insurance
providing equivalent protection.
SECTION 8
The Trust Agreement
8.1 General Responsibilities of the Trustee:
All contributions under the Plan shall be paid into a Trust
Fund. The Trustee shall invest and hold contributions to the
Trust Fund and the income and gains thereon in accordance with
the terms of the Plan and Trust Agreement. The Trustee shall
pay all distributions as directed in writing by the Committee.
In the case of any inconsistency between the Plan and the
Trust Agreement with respect to the rights of Participants,
Beneficiaries and Alternate Payees, the Plan shall control.
8.2 Appointment of Investment Manager:
The Board may appoint an investment manager, as defined in
Section 3(38) of ERISA, to direct the investment and
management of any Plan assets. The Board shall give the
Trustee a certified copy of such resolution. The investment
manager shall then become the fiduciary with respect to such
assets. To the extent allowed by law, the Trustee shall have
no further responsibility for such assets.
8.3 Right to Invest in Company Stock:
The Trustee may invest up to one hundred percent (100%) of the
Plan's assets to acquire and hold qualifying employer
securities and/or qualifying employer real property (as
defined under Sections 407(d) and 407(e) of ERISA).
SECTION 9
Rights under the Plan
9.1 No Employment Rights under the Plan:
Neither the establishment of this Plan nor any modification
thereof, nor the creation of any fund or account, nor the
distribution of any benefit shall be construed as giving a
Participant or any other person any legal or equitable rights
against an Affiliated Company with respect to employment or
otherwise, and Participants and other persons shall have only
such rights as shall be specifically provided for in this Plan
or conferred by affirmative action of the Company in
accordance with the terms and provisions of the Plan.
9.2 No Rights to Specific Assets:
No Participant, Beneficiary or Alternate Payee shall have any
right, title or interest in any specific property or asset of
the Trust Fund, and shall have only the right to receive
payment as expressly set forth in the Plan.
9.3 No Liability of Participating Companies:
All benefits payable under the Plan shall be paid or provided
for solely as provided in the Plan and Trust Agreement and no
Participating Company assumes any liability or responsibility
therefor.
9.4 No Right to Assign:
No Participant, Beneficiary or Alternate Payee shall have any
right to assign, alienate, encumber, or hypothecate any part
of his interest in the Plan, in the Trust Fund, or in any
benefit distributable in accordance with the terms hereof, nor
shall any such interest be subject to the claims of creditors
or be liable to attachment, execution, or other process of
law. The preceding sentence shall also apply to the creation,
assignment or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations
order unless such order is determined to be a "qualified
domestic relations order," as defined in Code Section 414(p)
and described in Section 9.6 below.
9.5 Claims Procedure:
(a) Filing of Claim:
A Participant or Beneficiary (the "Claimant") may file a
claim for a Plan benefit. The claim shall be deemed
filed when a written, signed communication is delivered
by the Claimant or the Claimant's authorized
representative to the Human Resources Department of the
Company. The claim must state the name of the Claimant
and the basis on which the claim is made.
(b) Action on Claim:
Each claim must be acted upon and approved or disapproved
by the Committee in writing within 90 days of the date on
which the Committee received the claim, unless special
circumstances require further time for processing and the
Claimant is advised of the extension. In no event shall
the Committee act more than one hundred eighty (180) days
after the Committee receives the claim. If the Claimant
does not receive such written notice within such 180-day
period, the claim shall be deemed to be denied. If the
claim is denied, in whole or in part, the written notice
shall set forth, in a manner calculated to be understood
by the Claimant, the following matters:
(1) the specific reason or reasons for the denial;
(2) specific reference to pertinent Plan provisions on
which the denial is based;
(3) a description of any additional material or
information necessary for the Claimant to perfect
the claim and an explanation of why such material
or information is necessary; and
(4) an explanation of the Plan's claim review
procedure.
(c) Claim Review Procedure:
If a claim is denied in whole or in part, the Claimant or
his authorized representative may file a request for
review of the decision of denial within 60 days after
receipt by the Claimant of the written notice of denial.
The request for review shall be in writing and shall be
delivered to the Committee. The request must set forth
all grounds upon which it is based, any fact in support
thereof, and any other issues or comments which the
Claimant deems pertinent to the Claim. The Claimant or
his authorized representative may review pertinent Plan
documents, other than legally privileged documents, in
preparing the request for review.
(d) Committee Review:
A decision by the Committee on the request for review
shall be made promptly, but not later than 60 days after
the Committee receives the Claimant's request for review
(however, if special circumstances require an extension
of time for processing, the Committee's decision on
review shall be rendered as soon as possible, but not
later than 120 days after receipt of the Claimant's
request for review). The Committee's decision on review
will be in writing and will include specific reasons for
the Committee's decision written in a manner calculated
to be understood by the Claimant, and specific reference
will be made to the pertinent Plan provisions on which
the decision is based.
9.6 Procedure for Qualified Domestic Relations Orders:
(a) Upon receipt of a domestic relations order related to a
Participant's benefit, the Committee shall promptly
notify the parties affected thereby of its receipt of the
order. In addition, the Committee shall adopt
nondiscriminatory procedures, in accordance with the
requirements of ERISA, to determine whether such domestic
relations order is a "qualified domestic relations order"
as defined in Section 206(d)(3)(B)(i) of ERISA, and
to administer distributions pursuant to such order.
A "qualified domestic relations order" shall specify:
(1) The name and last known mailing address (if any) of
the Participant and each Alternate Payee covered by
the order;
(2) The amount or percentage of the Participant's
benefits to be paid by the Plan to each Alternate
Payee, or the manner in which such amount or
percentage is to be determined;
(3) The number of payments or period to which such
order applies; and
(4) The full name of each plan to which such order
applies.
The qualified domestic relations order shall not require
the Plan to provide any type or form of benefits or any
option not otherwise provided under the Plan, nor require
the payment of benefits to an Alternate Payee which are
required to be paid to another Alternate Payee under
another order previously determined to be a "qualified
domestic relations order."
(b) If the Committee determines that the order is a
"qualified domestic relations order", it shall segregate
those assets payable to the Alternate Payee from the
assets in the Participant's Accounts. The Alternate
Payee shall be deemed to be a Beneficiary for the
purposes of directing investment of his portion of the
Participant's Account and shall have the same rights
under the Plan that otherwise apply to Beneficiaries,
except to the extent that such characterization is
inconsistent with the terms of the qualified domestic
relations order.
(c) Distribution of benefits to an Alternate Payee pursuant
to a "qualified domestic relations order" may commence
prior to the date the Participant terminates employment
if the order specifies such earlier distribution.
SECTION 10
Amendment of the Plan
10.1 Right to Amend Plan:
This Plan may be amended from time to time by a written
instrument executed by the Company and delivered to the
Trustee. However, no amendment:
(a) Shall cause or permit any part of the principal or income
of the Trust Fund to revert to an Affiliated Company or
to be used for, or be diverted to, any purpose other than
the exclusive benefit of Participants, Beneficiaries or
Alternate Payees at any time prior to the satisfaction of
all Plan liabilities;
(b) Shall change the duties or liabilities of the Trustee
without its written consent to such amendment;
(c) Shall decrease the vested percentage of any Participant's
Account Balance. If the Plan is amended to change its
vesting schedule, any Participant with at least three (3)
Years of Service (including Years of Service that may be
disregarded) may elect to have his vested percentage
computed under the Plan without regard to such amendment;
provided however, that no election shall be required if
the Participant's vested percentage under the amendment
will always be equal to or greater than his vested
percentage determined prior to application of the
amendment. Any such election must be made within sixty
(60) days after the latest of the following:
(1) The date the Plan amendment is adopted,
(2) The date the Plan amendment becomes effective, or
(3) The date the Participant is issued written notice
of the Plan amendment by the Company or Committee.
In the event that a Participant's vested percentage is
determined under Section 13.4 and the Plan subsequently
ceases to be a Top Heavy Plan, the use of the vesting
provision described in Section 5.1(b)(2) to determine the
Participant's vested percentage is considered to be an
amendment for the purpose of this Section; or
(d) Shall reduce or eliminate any right protected under Code
Section 411(d)(6).
10.2 Mergers, Consolidations and Transfers:
In the event that the Plan and the Trust are merged or
consolidated with, or the assets or liabilities thereof are
transferred to, any other plan, each Participant, Beneficiary
and Alternate Payee shall be entitled to receive benefits
under the Plan immediately after the merger, consolidation, or
transfer, (if the Plan were then terminated) equal to or
greater than the benefits he would have been entitled to
receive under the Plan immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
SECTION 11
Termination of Plan
11.1 Discontinuance of Contributions:
The Company has established the Plan with the intention to
continue the Plan indefinitely, but no Affiliated Company
shall be under any obligation to continue contributions or to
maintain the Plan for any given length of time. A
Participating Company may, in its sole and absolute
discretion, completely discontinue its contributions to the
Plan. The Company may, in its sole and absolute discretion,
terminate the Plan at any time.
11.2 Termination:
The Plan shall terminate upon the dissolution of the Company
unless, upon such dissolution, a successor to the Company
elects to continue the Plan.
The Plan will terminate:
(a) Upon the date specified in a written notice of the
termination of the Plan, executed by the Company and
delivered to the Trustee; or
(b) Upon the adjudication of the Company as a bankrupt, or
the execution of a general assignment by the Company to
or for the benefit of creditors, or dissolution of the
Company; provided, however, that such bankruptcy,
assignment or dissolution proceedings shall not terminate
the Plan or Trust if there exists a reorganized or
successor organization which expressly adopts this Plan
and agrees, in writing, to continue the Plan and Trust;
or
(c) Upon the payment of all benefits.
11.3 Distribution:
Upon a complete termination of the Plan, a partial termination
of the Plan with respect to the Employees of one (1) or more
Participating Companies or a complete discontinuance of
contributions under the Plan, the Accounts of each Participant,
Beneficiary and Alternate Payee affected thereby shall immediately
vest in full. The Trustee shall revalue the assets of the
Trust and pay all expenses of the Plan and Trust. The Committee
shall calculate the Account Balances of all affected individuals
as of the date of termination or discontinuance of contributions.
After satisfying all obligations of the Plan and Trust, the
Trustee shall allocate all unallocated assets held in the Funds
to the Accounts of all affected individuals as of the date of
termination or discontinuance of contributions, in the proportion
that the value of the Fund balances held in each Account bears
to the aggregate value of the entire Fund balances held by
all Accounts as of such date. Provided no successor Plan has
been established, the Trustee shall pay each affected individual
his Account Balance(s) in accordance with the instructions of the
Committee.
SECTION 12
Construction and Enforcement of Plan
12.1 Governing Legal Entity:
The Plan shall be construed, administered and enforced in
accordance with the Code and ERISA, and to the extent not
preempted, the laws of the State of California.
12.2 Text to Control:
The title headings used herein are for convenience of
reference only and shall not be used in the interpretation of
the Plan as herein set forth.
12.3 Construction:
Wherever appropriate herein, words used in the singular may
include the plural, the plural may include the singular, the
feminine may include the masculine and the masculine may
include the feminine.
12.4 Severability:
In the event any provision of this Plan shall be considered
illegal or invalid for any reason, such provision shall be
fully severable, and the Plan shall be construed and enforced
as such provision had never been included therein.
SECTION 13
Top Heavy Plan
13.1 Precedence of Section:
If the Plan is or becomes a Top-Heavy Plan (as defined in
Section 13.3 below) in any Plan Year beginning after the
Restatement Date, the following provisions will apply:
(a) the vesting schedule described in Section 13.4;
(b) the minimum benefit provisions of Section 13.5; and
(c) the limitation on benefits described in Section 13.6.
13.2 Definitions:
For purposes of determining whether the Plan is a Top Heavy
Plan for any Plan Year commencing on or after January 1, 1996,
the following terms, wherever capitalized, shall have the
following meaning:
(a) "Determination Date" means the last day of the Plan Year
preceding the year for which a top heavy determination is
made.
(b) "Key Employee" means an Employee or former Employee (or
Beneficiary of such individual) who, at any time during
a Plan Year or any of the four (4) preceding Plan Years,
is or was:
(1) One (1) of the ten (10) Employees who is an Owner
of both one of the largest interests in an
Affiliated Company and at least one-half of one
percent (0.5%) interest of such Affiliated Company,
provided that his annual Compensation during the
Plan Year of such Ownership is greater than the
limitation specified in Code Section 415(c)(1)(A)
(thirty thousand dollars ($30,000) or such greater
amount as may be recognized for increases in the
cost of living in accordance with Code Section
416(i)(1)(A)(ii)). (For purposes of this
paragraph, if two (2) Employees have the same
ownership interests, the Employee with the greater
annual Compensation shall be treated as having a
larger interest);
(2) An Employee who is a five percent (5%) or more
Owner of an Affiliated Company;
(3) An Employee who is a one percent (1%) or more Owner
of an Affiliated Company and who has annual
Compensation in excess of one hundred fifty
thousand dollars ($150,000); or
(4) An Officer.
(c) "Former Key Employee" means a Participant in the Plan
who, at any time during the four (4) preceding Plan
Years, was a Key Employee but who is not a Key Employee
in the current Plan Year or who terminated his service
with an Affiliated Company in one of the four (4)
preceding Plan Years and was not a Key Employee in the
Plan Year in which he terminated.
(d) "Non-Key Employee" means an Employee or Former Key
Employee (or the Beneficiary of either) who is not a Key
Employee.
13.3 Determination of Top Heavy Plan:
(a) With respect to any Plan Year commencing on or after the
Restatement Date, the Plan shall be a Top Heavy Plan if,
as of the Determination Date, the aggregate Account
Balances of Key Employees (excluding Former Key
Employees) under the Plan exceeds sixty percent (60%) of
the aggregate Account Balances of all Employees
(excluding Former Key Employees). In making such
determination, distributions made during the five (5)
year period ending on the Determination Date shall be
included and the Account Balances of all individuals who
were not employed by an Affiliated Company during the
five (5) year period ending on the Determination Date
shall be excluded. The Plan shall be aggregated with
each other plan of an Affiliated Company in the required
aggregation group (as described below) and may be
aggregated with any other plan of an Affiliated
Company in the permissive aggregation group (as
described below).
(b) "Required aggregation group" means (1) each qualified
plan of an Affiliated Company in which at least one Key
Employee participates, and (2) any other qualified plan
of an Affiliated Company which enables a plan described
in (1) to meet the requirements of Code Section 401(a)(4)
or 410.
(c) "Permissive aggregation group" means the required
aggregation group of plans plus any other plan or plans
of an Affiliated Company which, when considered as a
group with the required aggregation group, would continue
to satisfy the requirements of Code Sections 401(a)(4)
and 410.
13.4 Vesting in Top Heavy Plan Year:
With respect to any Plan Year in which the Plan is a Top Heavy
Plan, each Participant's Company Contribution Account shall
vest in accordance with the following vesting schedule, to the
extent it is faster than the schedule that would otherwise
apply under Section 5.1(b)(2):
Vesting
Years of Service Percentage
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%
13.5 Minimum Benefit Under Top Heavy Plan:
For any Plan Year in which the Plan is a Top Heavy Plan, the
Company Contributions allocated to the Accounts of a
Participant who is a Non-Key Employee and who is employed by
an Participating Company on the last day of the Plan Year
(regardless of the number of Hours of Service earned by such
Non-Key Employee for such Plan Year or whether he has made
Salary Deferrals for such Plan Year) shall be at least:
(a) Three percent (3%) of each such Participant's
Compensation, or
(b) If the Plan does not enable any defined benefit plan to
meet Code Section 401(a)(4) or 410, the highest
percentage of Compensation contributed on behalf of any
Key Employee (including Salary Deferrals), if less than
3%.
For Plan Years beginning before January 1, 1989, Salary
Deferrals and Company Contributions shall be aggregated to
determine the amount contributed for any Employee. For Plan
Years beginning on or after January 1, 1989, Company
Contributions allocated to the accounts of Non-Key Employees
shall not include: (a) Company Matching Contributions (or any
other contributions allocated on the basis of Salary
Deferrals to the extent used to meet the Average Deferral
Percentage Test or the Average Contribution Percentage Test
or (b) any salary deferral or other Salary Reduction
Contribution to any qualified plan of an Affiliated Company.
In computing the amount contributed on behalf of any Non-Key
Employee, all contributions made to any defined contribution
plan of an Affiliated Company that meets the vesting
requirement of Code Section 416(b) and that limits
compensation as described in Code Section 416(d) shall be
aggregated with the Plan.
13.6 Maximum Limitation Under Top Heavy Plan:
A 1.0 limitation shall be substituted for the 1.25 limitation
in Section 4.2(e) for any Plan Year for which the Plan is
determined to be a Top Heavy Plan.
SECTION 14
Loans
14.1 General:
(a) General:
Any Participant, Beneficiary or Alternate Payee shall be
eligible to borrow from his Accounts in accordance with
the provisions of this Section.
(b) Procedure:
Each loan shall evidenced by a promissory note executed
by the borrower. The making of such loan shall be
approved by the Committee and shall be subject to the
following terms, conditions and provisions:
(1) The interest rate on the loan shall be one (1)
percentage point over the Prime Rate in effect on
the first day of the month during which the loan
is funded.
(2) All loans shall be secured by the borrower's
vested interest in the Plan.
(3) All loans shall call for periodic payments of
principal and interest in amounts sufficient to
fully amortize the loan over its stated terms.
Loan repayment terms may not be changed, provided
that loans may be prepaid without penalty.
(4) The interest rate shall be established at the time
the loan is made and will not thereafter fluctuate
over the term of the loan.
(5) The term of the loan may not exceed 5 years,
provided that a loan used to purchase the
borrower's principal residence may be for a period
of up to fifteen (15) years.
(6) The borrower must pay a loan origination fee of
$50 for each loan.
(7) No more than one loan may be outstanding to a
borrower at any one time.
(8) The minimum loan amount shall be $500.
(9) Loan repayments shall be made by automatic payroll
deductions from the wages paid to the borrower.
(10) The Committee shall have the right to call any
Participant loan once a Participant's employment
with the Company has terminated, or if the Plan is
terminated.
(11) Loan repayments will be allocated to the
investment funds in accordance with the borrower's
then current investment instructions.
14.2 Amount of Loan:
An individual's outstanding loan balance shall not exceed the
lesser of the following:
(a) One-half the borrower's vested Account Balances (as of
the preceding Valuation Date); or
(b) $50,000 (as adjusted in paragraph (c) below).
(c) Adjustment to $50,000 Limit:
The $50,000 limit in paragraph (b) shall be further
reduced by the excess (if any) of:
(1) the highest outstanding loan balance from the Plan
to the borrower during the one-year period ending
on the day before such loan was made, minus
(2) the outstanding loan balance from the Plan on the
date of the loan.
14.3 Default:
In the event that a borrower does not repay a loan in
accordance with the terms of the promissory note, the
Committee shall give a written notice of default to such
borrower; in the event that the borrower does not cure said
default within thirty (30) days of his receipt of such
notice, the Committee may direct the Trustee to report the
default as a taxable distribution. The amount in default
shall be deducted from the benefits otherwise distributable
to such borrower or his Beneficiaries at such time such
amount first become payable under the terms of the Plan.
<PAGE>
Execution of Plan
IN WITNESS WHEREOF, Gottschalks, Inc. has caused the Gottschalks
Inc. Retirement Savings Plan to be executed by its duly authorized
officer(s) this 28 day of December, 1995.
GOTTSCHALKS INC. RETIREMENT SAVINGS PLAN
By __/s/ Kristen R. Xavier___
V.P. Finance/Controller
By ______________________________________
<PAGE>
Exhibit 5
GOTTSCHALKS EXECUTIVE OFFICES
__________________________________________________________
7 River Park Place East
P.O. Box 28920
Fresno, CA 93729
209-434-8000
FAX 434-4804
November 30, 1995
Gottschalks Inc.
7 River Park Place East
Fresno, CA 93720
RE: Registration on Form S-8 of Gottschalks Inc. (the "Company")
Ladies and Gentlemen:
At your request, I have examined the Registration Statement on Form
S-8 relating to the Gottschalks Inc. Retirement Savings Plan (the
"Plan") to be filed with the Securities and Exchange Commission for
the registration under the Securities Act of 1933, as amended, of
500,000 shares of Common Stock, $.01 par value per share of the
Company (the "Shares") and of interests in the Plan (together with
the Shares, the "Securities"). At your request, I have examined
the proceedings heretofore taken and to be taken in connection with
the authorization of the Plan and the Common Stock that may be sold
to the Plan.
Based upon such examination and upon such matters of fact and law
as I have deemed relevant, I am of the opinion that the Securities
have been duly authorized by all necessary corporate action on the
part of the Company and, when issued in accordance with such
authorization and appropriate action as contemplated thereby and by
the Plan and related agreements, the Securities will be validly
issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the above-
referenced Registration Statement.
Respectfully submitted,
__/s/ Warren L. Williams__
Warren L. Williams
General Counsel
WLW:sf
<PAGE>
Exhibit 23.1
Independent Auditors' Consent
We consent to the incorporation by reference in this Registration
Statement of Gottschalks Inc. on Form S-8 of our report dated
February 28, 1995 (March 31, 1995 as to Note 4), appearing in the
Annual Report on Form 10-K of Gottschalks Inc. for the year ended
January 28, 1995 and our report dated September 25, 1995 appearing
in the Annual Report on Form 11-K of Gottschalks Inc. Retirement
Savings Plan and Trust for the year ended January 31, 1995.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Fresno, California
January 4, 1996
