As filed with the Securities and Exchange Commission on July 28, 1997
Registration No. 333-
=======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POLAROID CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-1734655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
-------------------------
549 Technology Square
Cambridge, Massachusetts
02139
(617) 386-2000
(Address, including zip code, of Registrant's principal executive office)
Polaroid Corporation
Polaroid Profit Sharing Retirement Plan
(Full title of the Plan)
Thomas M. Lemberg, Esq.
Senior Vice President,
General Counsel and Secretary
Polaroid Corporation
549 Technology Square
Cambridge, Massachusetts 02139
(617) 386-2000
(Name, address, including zip code, and telephone number, including
area code, of Registrant's agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement.
CALCULATION OF REGISTRATION FEE
=======================================================================
Title of each | Amount to be | Proposed | Proposed | Amount of
class of | registered | maximum | maximum | registration
securities to | | offering | aggregate | fee
be registered | | price per | offering |
| | unit (a) | price (a) |
- -----------------------------------------------------------------------
Common Stock, | | | |
$1.00 par value | 300,000 | | |
per share (b)(c)| shares | $57.969 | $17,390,700| $5,270
=======================================================================
(a) Only for the purpose of calculating the registration fee. In
accordance with Rule 457(c), the price shown is based on the average
of the high and low sale prices on the New York Stock Exchange, Inc.
on July 21, 1997 for securities of the same class as those to be
delivered.
(b) Represents Common Stock to be issued under the Polaroid Profit
Sharing Retirement Plan.
(c) In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
=======================================================================
<PAGE>
PART I
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed below are or have been filed by Polaroid
Corporation (the "Company"), and the Polaroid Profit Sharing
Retirement Plan (the "Plan"), with the Securities and Exchange
Commission (the "Commission") and are incorporated herein by
reference:
a) Quarterly Report on Form 10-Q for the quarter ended March 30,
1997, dated May 12, 1997.
b) Annual Report on Form 10-K for the fiscal year ended December 31,
1996, dated March 20, 1997.
c) The description of the Company's Common Stock set forth in its
Registration Statement on Form 10, and any amendment or report filed
pursuant to Section 12 of the Securities and Exchange Act of 1934 (the
"Exchange Act") for the purpose of updating that description.
d) All other reports filed by the Company pursuant to Sections 13(a)
or 15(d) of the Exchange Act since December 31, 1996.
e) The Annual Report on Form 11-K of the Plan for the year ended
December 31, 1996 (filed concurrently with this Registration
Statement).
All documents filed by the Company and the Plan pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Registration Statement and prior to the termination
of the offering of the Securities offered hereby shall be deemed to be
incorporated by reference into this Registration Statement and are a
part hereof from the respective dates of filing of such documents.
Any statement contained in a document 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 that also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Certain legal matters in connection with any original issuance of
Common Stock offered hereby are being passed upon for the Company
by Thomas M. Lemberg, Esq., Senior Vice President, General
Counsel and Secretary of the Company. As a result of Mr.
Lemberg's participation in the Polaroid 1993 Stock Incentive
Plan, he currently owns options to purchase 60,400 shares of
Common Stock. None of these options are currently exercisable.
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<PAGE>
Item 6. Indemnification of Directors and Officers
As permitted by Section 102 of the Delaware General Corporation
Law (the "DGCL"), the Company's Restated Certificate of
Incorporation eliminates a director's personal liability for
monetary damages to the Company and its stockholders arising from
a breach of a director's fiduciary duty, except for liability
with respect to an illegal dividend or stock repurchase or
liability for a breach of the director's duty of loyalty to the
Company or its stockholders, for acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law or for any transaction in which the director
derived an improper personal benefit. The effect of this
provision in the Certificate of Incorporation is to eliminate the
rights of the Company and its stockholders (through stockholders'
derivative suits on behalf of the Company) to recover monetary
damages against a director for breach of fiduciary duty as a
director (including breaches resulting from negligent or grossly
negligent behavior) except in the situations described above.
The Company's By-Laws provide that, to the extent not
inconsistent with Delaware or other applicable law in effect from
time to time, the Company shall 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 the Company) by reason of the fact that he
or she is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him or her in connection with such action, suit or proceeding if
he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best
interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
The Company's By-Laws also provide that, to the extent not
inconsistent with Delaware or other applicable law in effect from
time to time, the Company shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact
that such person acted in any of the capacities set forth above,
against expenses (including attorney's fees) actually and
reasonably incurred by him or her in connection with the defense
or settlement of such action or suit if he or she acted under
similar standards, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Company unless and
only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine that
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall
deem proper.
Generally, a director will be entitled to be indemnified against
a claim if a majority of the directors who are not parties to the
relevant legal proceedings, independent legal counsel or the
stockholders determine that the director acted under such
standards.
The Company's By-Laws further provide that to the extent that a
director, officer, employee or agent of the Company has been
successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above or in defense of any claim,
issue or matter therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith; that the
indemnification provided for by the By-Laws shall not be deemed
exclusive of any other rights to which the indemnified party may
be entitled; and that the Company is empowered to purchase and
maintain insurance on behalf of a person who is or was acting in
any of the capacities set forth above against any liability
asserted against him or her and incurred by him or her in any
such capacity, or arising out of his status as such, whether or
not the Company would have the power to indemnify him or her
against such Liabilities under the By-Laws.
Section 145 of the DGCL similarly provides for indemnification by
the Company of its directors and officers and certain other
persons.
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<PAGE>
The Company maintains policies of insurance under which
directors, officers and certain employees of the Company and its
subsidiaries are insured, subject to certain specific exclusions
and deductible maximum amounts, against loss arising from any
civil claim which may be made against them, or any of them,
arising out of any misstatement, misleading statement, omission
or other act done or alleged to have been done, or wrongfully
attempted, while acting in their representative capacities.
Item 7. Exemption from Registration Claimed
Not applicable
Item 8. Exhibits
The following exhibits are filed as part of this Registration
Statement:
4.1(a) Amendment to Polaroid Corporation Restated Certificate
of Incorporation as of June 2, 1989. (The Amendment to
the Restated Certificate of Incorporation filed as
Exhibit 3.1(d) to Polaroid Corporation Form 10-K (the
"10-K") for the year ended December 31, 1996 is hereby
incorporated herein by reference.)
4.1(b) Amendment to Polaroid Corporation Restated Certificate
of Incorporation (Certificate of Designation of Series
D Cumulative Convertible Preferred Stock) as of October
31, 1991. (The Amendment to the Restated Certificate
of Incorporation filed as Exhibit 3.1(e) to Polaroid
Corporation Form 10-K is hereby incorporated herein by
reference.)
4.1(c) Amendment to Polaroid Corporation Restated Certificate
of Incorporation (Certificates of Elimination of Series
B Cumulative Convertible Preferred Stock and Series C
Cumulative Convertible Pay-In-Kind Preferred Stock) as
of October 31, 1991. (The Amendment to the Restated
Certificate of Incorporation filed as Exhibit 3.1(f) to
Polaroid Corporation Form 10-K is hereby incorporated
herein by reference.)
4.2 By-Laws of Polaroid Corporation amended and restated as
of February 1, 1994. (The By-Laws amended and restated
filed as Exhibit 3.2 to Polaroid Corporation Form 10-K
are hereby incorporated herein by reference.)
4.3(a) Rights Agreement dated as of September 9, 1986 between
Polaroid Corporation and Morgan Shareholder Services
Trust Company, as Rights Agent. (The Rights Agreement
filed as Exhibit 4.1 to Polaroid Corporation Form 10-K
is hereby incorporated herein by reference.)
4.3(b) First Amendment dated as of August 16, 1988 to Rights
Agreement dated as of September 9, 1986 between
Polaroid Corporation and Morgan Shareholder Services
Trust Company, as Rights Agent. (The First Amendment
filed as Exhibit 4.2 to Polaroid Corporation Form 10-K
is hereby incorporated herein by reference.)
4.3(c) Second Amendment dated as of September 14, 1988 to
Rights Agreement dated as of September 9, 1986 between
Polaroid Corporation and Morgan Shareholder Services
Trust Company, as Rights Agent. (The Second Amendment
filed as Exhibit 4.3 to Polaroid Corporation Form 10-K
is hereby incorporated herein by reference.)
4.3(d) Supplemental Rights Agreement and Third Amendment dated
as of January 30, 1989 to Rights Agreement dated as of
September 9, 1986 between Polaroid Corporation and
Morgan Shareholder Services Trust Company, as Rights
Agent. (The Supplemental Rights Agreement and Third
Amendment filed as Exhibit 4.4 to Polaroid Corporation
Form 10-K is hereby incorporated herein by reference.)
4.3(e) Fourth Amendment dated as of February 21, 1989 to
Rights Agreement dated as of September 9, 1986 between
Polaroid Corporation and Morgan Shareholder Services
Trust Company, as Rights Agent. (The Fourth Amendment
filed as Exhibit 4.5 to Polaroid Corporation Form 10-K
is hereby incorporated herein by reference.)
-4-
<PAGE>
4.3(f) Supplemental Rights Agreement and Fifth Amendment
dated as of October 7, 1991 to the Rights Agreement
dated as of September 9, 1986 between Polaroid
Corporation and First Chicago Trust Company (as
successor to Morgan Shareholder Services Trust
Company), as Rights Agent. (The Supplemental Rights
Agreement and Fifth Amendment filed as Exhibit 4.6 to
Polaroid Corporation Form 10-K is hereby incorporated
herein by reference.)
4.3(g) Sixth Amendment (previously designated as the Fifth
Amendment) dated as of March 23, 1993 to the Rights
Agreement dated as of September 9, 1986 between
Polaroid Corporation and First Chicago Trust Company,
as Rights Agent. (The Sixth Amendment (previously
designated as the Fifth Amendment) filed as Exhibit 4.7
to Polaroid Corporation's Form 10-K is hereby
incorporated herein by reference.)
4.3(h) Amendment dated as of June 30, 1993 to the Fifth
Amendment dated as of March 23, 1993 to the Rights
Agreement dated as of September 9, 1986 between
Polaroid Corporation and First Chicago Trust Company,
as Rights Agent. (The Amendment to the Sixth Amendment
filed as Exhibit 4.8 to Polaroid Corporation's Form 10-
K (Supplemental to Amendment No. 5 and redesignation
thereof as Amendment No. 6 to the Form 8-A filed on
September 15, 1986) is hereby incorporated herein by
reference.)
4.4 Indenture dated as of December 15, 1991 between
Polaroid Corporation and The First National Bank of
Boston, as Trustee, including form of Note. (The
Indenture filed as Exhibit 4.9 to Polaroid Corporation
Form 10-K is hereby incorporated herein by reference.)
4.5 Indenture dated as of January 9, 1997 between Polaroid
Corporation and State Street Bank and Trust Company, as
Trustee, including Form of Note. (The Indenture filed
as Exhibit 4 to Polaroid Corporation Form 10-Q for the
quarter ended March 30, 1997, dated May 12, 1997 is
hereby incorporated herein by reference.
4.6 The Polaroid Profit Sharing Retirement Plan, effective
January 1, 1996.
5 Opinion of Thomas M. Lemberg regarding the legality of
original issuance of the Common Stock.
15 Letter from KPMG Peat Marwick LLP regarding unaudited
interim financial information.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Thomas M. Lemberg (included in Exhibit 5.)
24 Power of Attorney .
-5-
<PAGE>
Item 9. Undertakings
The undersigned Registrant hereby undertakes: (1) To file, during any
period in which offers or sales are being made, a post-effective
amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13 or 15(d)
of the Exchange Act that are incorporated by reference into this
Registration Statement).
(2) That, for the purposes 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.
(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.
(4) 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 15(d) of the Exchange Act (and each filing of the
Plans annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) 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 foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
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.
(6) The undersigned registrant 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 under Section 401 of the Internal Revenue
Code.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cambridge,
Commonwealth of Massachusetts, on this 28th day of July, 1997.
Polaroid Corporation
(Registrant)
By /s/ Gary T. DiCamillo
------------------------------
Gary T. DiCamillo
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities as indicated this 28th day of July, 1997.
Signature Title
--------- -----
/s/ Gary T. DiCamillo Chairman of the Board,
- -------------------------- Chief Executive Officer and Director
Gary T. DiCamillo (principal executive officer)
/s/ William J. O'Neill, Jr. Executive Vice President
- -------------------------- and Chief Financial Officer
*William J. O'Neill, Jr. (principal finance officer)
(Attorney in Fact)
/s/ Carl L. Lueders Vice President and
- -------------------------- Controller
Carl L. Lueders (principal accounting officer)
____________*______________ Director
Ralph Gomory
____________*______________ Director
Frank S. Jones
____________*______________ Director
John W. Loose
____________*______________ Director
Albin F. Moschner
____________*______________ Director
Kenneth H. Olsen
____________*______________ Director
Ronald F. Olsen
____________*______________ Director
Ralph Z. Sorenson
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<PAGE>
____________*______________ Director
Delbert C. Staley
____________*______________ Director
Bernee D.L. Strom
____________*______________ Director
Alfred M. Zeien
* William J. O'Neill signed as Attorney in Fact
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan)
have duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Cambridge, State of Massachusetts, on the 28th day of July, 1997.
POLAROID PROFIT SHARING RETIREMENT PLAN
/s/ Joseph G. Parham, Jr.
------------------------------------
Joseph G. Parham, Jr.
Chairman
Total Compensation Policy Committee
-8-
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
4.1(a) Amendment to Polaroid Corporation Restated
Certificate of Incorporation as of June 2,
1989. (The Amendment to the Restated
Certificate of Incorporation filed as Exhibit
3.1(d) to Polaroid Corporation Form 10-K (the
"10-K") for the year ended December 31, 1996
is hereby incorporated herein by reference.)
4.1(b) Amendment to Polaroid Corporation Restated
Certificate of Incorporation (Certificate of
Designation of Series D Cumulative
Convertible Preferred Stock) as of October
31, 1991. (The Amendment to the Restated
Certificate of Incorporation filed as Exhibit
3.1(e) to Polaroid Corporation Form 10-K is
hereby incorporated herein by reference.)
4.1(c) Amendment to Polaroid Corporation Restated
Certificate of Incorporation (Certificates of
Elimination of Series B Cumulative
Convertible Preferred Stock and Series C
Cumulative Convertible Pay-In-Kind Preferred
Stock) as of October 31, 1991. (The
Amendment to the Restated Certificate of
Incorporation filed as Exhibit 3.1(f) to
Polaroid Corporation Form 10-K is hereby
incorporated herein by reference.)
4.2 By-Laws of Polaroid Corporation amended and
restated as of February 1, 1994. (The By-
Laws amended and restated filed as Exhibit
3.2 to Polaroid Corporation Form 10-K are
hereby incorporated herein by reference.)
4.3(a) Rights Agreement dated as of September 9,
1986 between Polaroid Corporation and Morgan
Shareholder Services Trust Company, as Rights
Agent. (The Rights Agreement filed as
Exhibit 4.1 to Polaroid Corporation Form 10-K
is hereby incorporated herein by reference.)
4.3(b) First Amendment dated as of August 16, 1988
to Rights Agreement dated as of September 9,
1986 between Polaroid Corporation and Morgan
Shareholder Services Trust Company, as Rights
Agent. (The First Amendment filed as Exhibit
4.2 to Polaroid Corporation Form 10-K is
hereby incorporated herein by reference.)
4.3(c) Second Amendment dated as of September 14,
1988 to Rights Agreement dated as of
September 9, 1986 between Polaroid
Corporation and Morgan Shareholder Services
Trust Company, as Rights Agent. (The Second
Amendment filed as Exhibit 4.3 to Polaroid
Corporation Form 10-K is hereby incorporated
herein by reference.)
4.3(d) Supplemental Rights Agreement and Third
Amendment dated as of January 30, 1989 to
Rights Agreement dated as of September 9,
1986 between Polaroid Corporation and Morgan
Shareholder Services Trust Company, as Rights
Agent. (The Supplemental Rights Agreement
and Third Amendment filed as Exhibit 4.4 to
Polaroid Corporation Form 10-K is hereby
incorporated herein by reference.)
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<PAGE>
4.3(e) Fourth Amendment dated as of February 21,
1989 to Rights Agreement dated as of
September 9, 1986 between Polaroid
Corporation and Morgan Shareholder Services
Trust Company, as Rights Agent. (The Fourth
Amendment filed as Exhibit 4.5 to Polaroid
Corporation Form 10-K is hereby incorporated
herein by reference.)
4.3(f) Supplemental Rights Agreement and Fifth
Amendment dated as of October 7, 1991 to the
Rights Agreement dated as of September 9,
1986 between Polaroid Corporation and First
Chicago Trust Company (as successor to Morgan
Shareholder Services Trust Company), as
Rights Agent. (The Supplemental Rights
Agreement and Fifth Amendment filed as
Exhibit 4.6 to Polaroid Corporation Form 10-K
is hereby incorporated herein by reference.)
4.3(g) Sixth Amendment (previously designated as the
Fifth Amendment) dated as of March 23, 1993
to the Rights Agreement dated as of September
9, 1986 between Polaroid Corporation and
First Chicago Trust Company, as Rights Agent.
(The Sixth Amendment (previously designated
as the Fifth Amendment) filed as Exhibit 4.7
to Polaroid Corporation's Form 10-K is hereby
incorporated herein by reference.)
4.3(h) Amendment dated as of June 30, 1993 to the
Fifth Amendment dated as of March 23, 1993 to
the Rights Agreement dated as of September 9,
1986 between Polaroid Corporation and First
Chicago Trust Company, as Rights Agent. (The
Amendment to the Sixth Amendment filed as
Exhibit 4.8 to Polaroid Corporation's Form 10-
K (Supplemental to Amendment No. 5 and
redesignation thereof as Amendment No. 6 to
the Form 8-A filed on September 15, 1986) is
hereby incorporated herein by reference.)
4.4 Indenture dated as of December 15, 1991
between Polaroid Corporation and The First
National Bank of Boston, as Trustee,
including form of Note. (The Indenture filed
as Exhibit 4.9 to Polaroid Corporation Form
10-K is hereby incorporated herein by
reference.)
4.5 Indenture dated as of January 9, 1997 between
Polaroid Corporation and State Street Bank
and Trust Company, as Trustee, including Form
of Note. (The Indenture filed as Exhibit 4
to Polaroid Corporation Form 10-Q for the
quarter ended March 30, 1997, dated May 12,
1997 is hereby incorporated herein by
reference.
4.6 The Polaroid Profit Sharing Retirement Plan,
effective January 1, 1996.
5 Opinion of Thomas M. Lemberg regarding the
legality of original issuance of the Common
Stock.
15 Letter from KPMG Peat Marwick LLP regarding
unaudited interim financial information.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Thomas M. Lemberg (included in
Exhibit 5).
24 Power of Attorney.
-10-
Exhibit 4.6
-----------
Document Control No.: PS#16
AMENDMENT AND RESTATEMENT
OF THE
POLAROID PROFIT SHARING RETIREMENT PLAN
THIS IS THE PLAN
IN EFFECT AS OF
January 1, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.01 Accounts 1
1.02 Alternate Payee 1
1.03 Annuity Starting Date 1
1.04 Beneficiary 1
1.05 Board of Directors 1
1.06 Code 1
1.07 Company 1
1.08 Company Common Stock 1
1.09 Company Common Stock Fund 2
1.10 Company Stock Account 2
1.11 Compensation 2
1.12 Effective Date 2
1.13 Employee 2
1.14 Employer 2
1.15 Employment Commencement Date 2
1.16 Estate 2
1.17 401K Account 3
1.18 401K Contributions 3
1.19 Fund Manager 3
1.20 Funds 3
1.21 Highly Compensated Participant 3
1.22 Hour of Service 3
1.23 Leased Employee 4
1.24 Long-term Disability 4
1.25 Participant 4
1.26 Plan 4
1.27 Plan Administrator 5
1.28 Plan Manager 5
1.29 Plan Year 5
1.30 Post-1971 Company Account 5
1.31 Pre-1972 Company Account 5
1.32 Retirement 5
1.33 Rollover Account 5
1.34 Rollover Contribution 5
1.35 Spouse 5
1.36 Subsidiary 5
1.37 Termination of Service 6
1.38 Total Compensation 6
1.39 Trust 6
1.40 Trust Agreement 6
i
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ARTICLE I DEFINITIONS (Cont'd.)
1.41 Trustee 6
1.42 Voluntary Account 6
1.43 To be Vested 6
1.44 Voluntary Contributions 6
ARTICLE II PARTICIPATION BY EMPLOYEES
2.01 Participation 7
2.02 Cessation of Active Participation 7
2.03 Re-Employment and Requalification 7
2.04 Rights of Participants 7
ARTICLE III EMPLOYEE VOLUNTARY CONTRIBUTIONS
3.01 Eligibility 8
3.02 Voluntary Contributions 8
ARTICLE IV CASH OR DEFERRED
ARRANGEMENT
4.01 Eligibility 8
4.02 401K Contributions 8
ARTICLE V WITHDRAWALS AND LOANS
5.01 Withdrawals 9
5.02 Hardship and Specific Restricted Withdrawals 9
5.03 Suspension of 401K and Voluntary
Contributions in Case
of Hardship Withdrawal 10
5.04 Order and Source of Withdrawals 10
5.05 Loans 11
ARTICLE VI TRUST AND INVESTMENTS
6.01 Establishment of Trust 12
6.02 Contributions and Benefits 12
6.03 Exclusive Benefit and Reversion 12
6.04 Establishment and Selection of Funds 12
6.05 Special Provisions Regarding Company Common Stock 12
ARTICLE VII PARTICIPANT ACCOUNTS AND VALUATION
7.01 Participant Accounts 15
7.02 Valuation 15
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ARTICLE VIII BENEFITS PAYABLE TO PARTICIPANTS AND
BENEFICIARIES
8.01 Benefits to Participants in General 15
8.02 Benefits to Participants with
Accounts Not Exceeding $3,500 15
8.03 Benefits to Participants with Accounts Exceeding $3,500 15
8.04 Special Rules for Purchases of Annuities 16
8.05 Death Benefits and Identification of Beneficiary 16
8.06 Timing and Form of Death Benefit Payments 17
ARTICLE IX MISCELLANEOUS BENEFIT PAYMENT RULES
9.01 Minimum Distribution Requirements 18
9.02 Limit on Delay in Distribution 20
9.03 Medium of Payment 20
9.04 Termination of Interest 20
9.05 Adequate Delivery 20
9.06 Direct Transfer of Distribution 20
9.07 Alternate Payees - Limitations and Mandatory Payout 20
ARTICLE X LIMITATIONS ON
CONTRIBUTIONS
AND ALLOCATIONS
10.01 Introduction 21
10.02 Limitation on Elective Deferrals 21
10.03 Limitation on 401K
Contributions for Highly
Compensated Participants 22
10.04 Limitation on Voluntary
Contributions for Highly
Compensated Participants 24
10.05 Multiple Use Test and Restructuring 26
10.06 Limitation on Allocations 27
10.07 Limitation on
Compensation Taken into Account 28
10.08 Definition of Highly
Compensated Participant and Family Member. 28
ARTICLE XI ADMINISTRATION
11.01 Plan Administrator 29
11.02 Duties of the Plan Administrator 29
11.03 Decisions of the Plan Administrator 30
11.04 Fund Manager 30
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11.05 Duties of the Fund Manager 30
11.06 Decisions of the Fund Manager 31
11.07 Instructions to the Trustee 31
11.08 Plan Manager 31
11.09 Duties of the Plan Manager 31
ARTICLE XI ADMINISTRATION (Cont'd.)
11.10 Decisions of the Plan Manager 31
11.11 Member Terminations 32
11.12 No Compensation for Duties 32
11.13 Delegation of Authority 32
ARTICLE XII APPEAL PROCEDURE
12.01 Claim Denial
32
12.02 Right to have Review of Claim Denial 32
12.03 Review of Claim Denial 32
ARTICLE XIII AMENDMENT AND TERMINATION
13.01 Plan Amendments 33
13.02 Plan Termination 33
13.03 Merger of the Plan 33
13.04 Upon Merger, Consolidation,
Reorganization, Etc. of the Company 33
13.05 Effect of Termination 34
ARTICLE XIV MISCELLANEOUS PROVISIONS
14.01 Unenforceability of a Particular Provision 34
14.02 Incompetency 34
14.03 Non-Alienation of Benefits 35
14.04 Limitation of Rights 35
14.05 Rollover Contributions 35
14.06 Indemnification 35
14.07 Special Rules Regarding Affiliated Companies 36
14.08 Military Service 36
14.09 Governing Law 36
14.10 Effective Date for Restatement 36
14.11 Headings/Gender 37
14.12 Taxation 37
ARTICLE XV TOP-HEAVY PROVISIONS
15.01 Scope of Article 37
15.02 Definitions 37
15.03 Top-Heavy Status 40
15.04 Minimum Contribution 40
15.05 Ajustment to Combined Limitation 40
15.06 Termination of Top-Heavy Status 40
ADDENDUM A 42
ADDENDUM B 43
iv
<PAGE>
AMENDMENT AND RESTATEMENT
OF THE
POLAROID PROFIT SHARING RETIREMENT PLAN
The purpose of the Polaroid Profit Sharing Retirement Plan
is to enable the Participants to defer income taxes and save for
retirement.
It is intended that this restated Plan, together with the
restated Trust Agreement(s), as amended, shall meet all the
applicable conditions for qualification under Section 401(a) of
the Internal Revenue Code of 1986, as amended, and applicable
requirements of the Employee Retirement Income Security Act of
1974, as amended, and the Plan shall be interpreted and applied
accordingly.
ARTICLE I
DEFINITIONS
Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
1.01 Accounts shall mean the bookkeeping accounts maintained to
reflect a Participant's interest in the Plan. A Participant
may have one or more of the following Accounts: a Company
Stock Account, a 401K Account, a Pre-1972 Company Account, a
Post-1971 Company Account, a Rollover Account, and a
Voluntary Account.
1.02 Alternate Payee shall mean any spouse, former spouse, child,
or other dependent of a Participant who is entitled to
receive benefits under this Plan by a qualified domestic
relations order as defined in Section 414(p) of the Code.
1.03 Annuity Starting Date shall mean the first day of the first
period for which a benefit under the Plan is payable in the
form of an annuity, or, in the case of a benefit not payable
as an annuity, the first day on which all events have
occurred that entitle the Participant to such benefit.
1.04 Beneficiary shall mean the Participant's Beneficiary as
determined under Section 8.05.
1.05 Board of Directors shall mean the Board of Directors of the
Company.
1.06 Code shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations issued
thereunder.
1.07 Company shall mean Polaroid Corporation, a Delaware
corporation.
1.08 Company Common Stock shall mean the common stock of the
Company.
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1.09 Company Common Stock Fund shall have the meaning provided in
Section 6.05.
1.10 Company Stock Account shall mean the bookkeeping account
maintained to reflect a Participant's interest in the
Company Common Stock Fund.
1.11 Compensation shall mean gross pay used for the purposes of
applying the limitations in Code Section 415 and shall
include wages, salaries, fees for professional services and
other amounts for personal services actually rendered in the
course of employment with an Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums and bonuses).
Compensation shall exclude:
a) contributions made by the Employer to a plan of
deferred compensation to the extent that, before the
application of the Code Section 415 limitations to the
Plan, the contributions are not includable in the gross
income of the Employee for the taxable year in which
contributed;
b) Employer contributions made on behalf of an
Employee to a simplified employee pension plan
described in Code Section 408(k) to the extent such
contributions are deductible by the Employee under Code
Section 219(a); and,
c) other amounts which receive special tax benefits,
such as premiums for group term life insurance (but
only to the extent that the premiums are not includable
in the gross income of the Employee), or contributions
made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of any
annuity contract described in Code Section 403(b)
(whether or not the contributions are excludable from
the gross income of the Employee).
1.12 Effective Date shall mean January 1, 1996.
1.13 Employee shall mean any common law employee of an Employer.
1.14 Employer shall mean the Company.
1.15 Employment Commencement Date shall mean the date on which an
individual first completes an Hour of Service.
1.16 Estate shall mean:
a) the formal Estate of a decedent; or,
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b) such person(s) or entity, including any trust,
trustee, guardian, or other legal representative of the
decedent, as was designated by the decedent. If no
such designation is made by the decedent, the Plan
Administrator shall designate who shall receive any
benefit provided hereunder to be paid to the decedent's
Estate (for example, where the formal Estate has been
closed or where the Plan Manager has not received
notice of the appointment of a legal representative
within sixty (60) days after the death of the
decedent).
1.17 401K Account shall mean the bookkeeping account maintained
to reflect the 401K Contributions made on behalf of a
Participant, and the investment experience, expenses, and
distributions pertaining thereto.
1.18 401K Contributions shall mean the amounts contributed by the
Employer to the Trust, in accordance with and as provided in
Section 4.02.
1.19 Fund Manager shall mean the individual(s) so designated, as
provided in Article XI.
1.20 Funds shall mean the investment funds established under the
Trust, as provided under Article VI.
1.21 Highly Compensated Participant shall have the meaning
provided in Section 10.08.
1.22 Hour of Service shall mean:
a) 1) Each hour for which an Employee is
directly or indirectly paid or entitled to payment
for the performance of duties.
2) Each hour for which an Employee is
directly or indirectly paid, or entitled to be
paid, on account of a period of time during which
no duties are performed, such as vacation,
holiday, illness (including short-term disability
but not in excess of twelve months), jury duty, or
other similar reason as specified in Department of
Labor Regulation 2530.200b-2 and 2530.200b-3.
3) Each hour for which back pay,
irrespective of mitigation of damages, is either
awarded or agreed to by the Employer, subject to
the limitations of subsection (a)(2), if
applicable.
b) For purposes of subsections (a)(2) and (a)(3)
above, the calculation of Hours of Service shall be
based on such Employee's normally scheduled work hours,
but in no event shall such Hours of Service exceed 40
hours per week.
c) Hours of Service shall be credited to the Employee
for the Plan Year(s) in which such duties are performed
or would have been performed. Any Hours of Service
credited pursuant to any back pay shall be credited to
the Employee for the Plan Year(s) to which such payment
pertains rather than the Plan Year in which the payment
is made.
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d) In no event shall an Employee be credited with
duplicate Hours of Service for the same hours as
provided above.
e) For purposes of calculating Hours of Service, a
Leased Employee who subsequently becomes an Employee
shall be credited with Hours of Service for the period
while he was a Leased Employee to the extent required
under Section 414(n) of the Code; provided that in no
event shall there be credited Hours of Service that
were earned as a Leased Employee before January 1,
1984, or prior to any Plan Year in which such Employee
completed less than 501 Hours of Service.
f) Hours of service with a Subsidiary shall be
treated as Hours of Service with the Employer.
1.23 Leased Employee shall mean any person who is not a common
law employee of the Employer and who provides services to
the Employer if: (a) such services are provided pursuant to
an agreement between the Employer and any other person; (b)
such Leased Employee has performed such services for the
Employer on a substantially full-time basis for a period of
at least one year; and (c) such services are of a type
historically performed by employees in the business field of
the Employer.
1.24 Long-term Disability shall mean a physical or mental
condition arising after an Employee has become a Participant
which totally prevents, and for an indefinite period of time
continues to prevent, the Participant from engaging for
remuneration or profit in any occupation or employment other
than for the purpose of rehabilitation which is not
incompatible with a finding of total disability.
a) The determination as to whether a Participant is
so disabled shall be made by the Plan Administrator
upon: (1) medical evidence of a licensed physician
designated by the Plan Administrator; or, (2) evidence
of the Participant's eligibility for disability
benefits under any long-term disability plan sponsored
by the Employer but administered by an independent
third party.
b) A Participant's Long-term Disability shall
commence at the end of the twelve (12) month period
during which the Participant by reason of such
disability has been unable to work for the Employer or
Subsidiary employing him and shall end on the earliest
of: (1) the date of his death; (2) the date he
terminates from the Employer or Subsidiary; (3) the
date on which he ceases to be entitled to payments
under the Employer's long-term disability program; or,
(4) when the Participant is no longer disabled, as
determined by the Plan Administrator.
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1.25 Participant shall mean either (a) an Employee qualified to
participate in the Plan in accordance with Article II hereof
(an "Active Participant"), or (b) an individual who was
formerly an Active Participant and who continues to have an
interest in the Plan after ceasing to be an Employee.
1.26 Plan shall mean this Polaroid Profit Sharing Retirement
Plan, as in effect from time to time.
1.27 Plan Administrator shall mean the individual(s) so
designated, as provided in Article XI hereof.
1.28 Plan Manager shall mean the individual(s) so designated, as
provided in Article XI hereof.
1.29 Plan Year shall mean the calendar year.
1.30 Post-1971 Company Account shall mean the bookkeeping account
maintained to reflect the Company contributions made to the
Plan on behalf of the Participant for periods after 1971,
and the investment experience, expenses, and distributions
pertaining thereto.
1.31 Pre-1972 Company Account shall mean the bookkeeping account
maintained to reflect the Company contributions made to the
Plan on behalf of the Participant for periods before 1972,
and the investment experience, expenses, and distributions
pertaining thereto.
1.32 Retirement shall mean a Participant's termination of
employment with the Employer (i) on or after his sixty-fifth
(65th) birthday; or (ii) on or after his fifty-fifth (55th)
birthday, if the Participant's age plus years of service
equal at least the number sixty-five (65).
1.33 Rollover Account shall mean the bookkeeping account
maintained to reflect the Rollover Contributions made to the
Plan by the Participant, and the investment experience,
expenses, and distributions pertaining thereto.
1.34 Rollover Contributions shall mean the amounts transferred to
the Trust pursuant to Section 14.05.
1.35 Spouse shall mean the person to whom such Participant is
legally married, and with respect to a deceased Participant,
the person to whom the Participant was legally married on
the date of his death. Notwithstanding the foregoing, if
such Participant's death was due to illness, such Spouse
must have been legally married to such Participant for not
less than six (6) months immediately preceding such death
unless applicable law prohibits such restriction.
1.36 Subsidiary shall mean any corporation of which more than
fifty percent (50%) of the outstanding shares of voting
stock are beneficially owned directly or indirectly by the
Company.
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1.37 Termination of Service shall mean:
a) Retirement on or after his fifty-fifth birthday.
b) Commencement of Long-term Disability.
c) Termination of employment by the Employer or a
Subsidiary for any other reason except death provided,
however, that:
1) if a Participating Employee receives a
leave of absence from the Employer or a
Subsidiary, his employment will terminate only
upon his failure to return to the employ of an
Employer or a Subsidiary when his leave of absence
ends; or,
2) if an Employee is laid off for a period
not to exceed twelve (12) months, his employment
will terminate only upon his failure to return to
the Employer or a Subsidiary when notified to
return to work.
Transfer of employment from a Subsidiary to the
Employer and vice-versa shall not result in a
Termination of Service.
1.38 Total Compensation shall mean compensation subject to
federal income tax withholding, plus any amounts which are
not currently includable in gross income of an Employee by
reason of the application of Sections 125, 402(e)(3), or
402(h)(1)(B) of the Code.
1.39 Trust shall mean all the assets held in trust from time to
time in accordance with the Plan, including any amounts held
by an insurance company.
1.40 Trust Agreement shall mean the agreement(s) entered into
between the Company and the Trustee(s) to hold the assets of
the Trust for the purposes of the Plan, as such agreement(s)
may be amended from time to time.
1.41 Trustee shall mean the Trustee or Trustees named in the
Trust Agreement(s), or the successor or successors of such
Trustee or Trustees.
1.42 Voluntary Account shall mean the bookkeeping account
maintained to reflect the Voluntary Contributions made by a
Participant and the investment experience, expenses, and
distributions pertaining thereto.
1.43 To be Vested shall mean to have a right to a benefit that is
not subject to forfeiture.
1.44 Voluntary Contributions shall mean the amounts transferred
to the Trust pursuant to Section 3.02.
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ARTICLE II
PARTICIPATION BY EMPLOYEES
2.01 Participation. Any Employee who immediately before the
Effective Date was qualified to participate in the Plan
shall continue to qualify on the Effective Date. Any other
Employee shall be qualified to participate in the Plan on
the earliest of:
a) the date he becomes a regular full-time Employee;
b) the date he becomes a non-temporary part-time
Employee with a regular work schedule of at least
twenty (20) Hours of Service per week; and
c) the first day of the calendar quarter following
his completion of
1) the twelve (12) consecutive month period
beginning on his Employment Commencement Date,
provided that he is credited with at least 1000
Hours of Service during that period, or
2) the first Plan Year ending after the
first anniversary of his Employment Commencement
Date in which he is credited with at least 1000
Hours of Service;
provided, in either case, that he is an Employee
on the first day of such calendar quarter.
2.02 Cessation of Active Participation. A Participant shall
cease to qualify for active participation in the Plan when
the Participant is no longer an Employee.
2.03 Re-Employment and Requalification. An individual who has
satisfied the requirements of Section 2.01 but who
subsequently has ceased to qualify for active participation
shall qualify as an Active Participant in the Plan once
again on the first date on which he subsequently performs an
Hour of Service as an Employee.
2.04 Rights of Participants. All Participants shall be bound by
the terms of the Plan, including all amendments made in the
manner authorized in Article XIII. Participants shall have
all of the rights and privileges afforded by the Plan,
including those granted specifically by ERISA.
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ARTICLE III
EMPLOYEE VOLUNTARY CONTRIBUTIONS
3.01 Eligibility. An Active Participant may elect to make
Voluntary Contributions in accordance with the provisions of
this Article, subject to the uniform administrative rules
established (and consistently applied) by the Plan
Administrator.
3.02 Voluntary Contributions.
a) An Active Participant may elect to make Voluntary
Contributions only by payroll deduction, under uniform
administrative rules as adopted by the Plan
Administrator and consistently applied.
b) Voluntary Contributions may be made from the
Participant's Total Compensation.
c) An Active Participant may elect to change his rate
of Voluntary Contributions as of the beginning of any
pay period, or to discontinue his payroll deductions at
any time, by complying with the uniform administrative
rules established (and consistently applied) by the
Plan Administrator.
d) Voluntary Contributions shall be credited to the
Participant's Voluntary Account. A Participant shall
be fully Vested in his Voluntary Account.
ARTICLE IV
CASH OR DEFERRED ARRANGEMENT
4.01 Eligibility. An Active Participant may elect to make 401K
Contributions in accordance with the provisions of this
Article and the uniform administrative rules adopted (and
consistently applied) by the Plan Administrator.
4.02 401K Contributions.
a) An Active Participant may elect to make 401K
Contributions only by payroll deduction, under uniform
administrative rules as adopted by the Plan
Administrator. In electing to make a 401K
Contribution, the Active Participant shall agree to
have a portion of the Total Compensation that would
otherwise be paid directly to him transferred instead
to the Trust on his behalf. The Active Participant's
election to contribute a portion of Total Compensation
as a 401K Contribution must be made prior to the date
that the amount contributed as the 401K Contribution
would otherwise be currently available to the
Participant.
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<PAGE>
b) A Participant's Section 401K Contributions may be
made from the Participant's Total Compensation.
c) An Active Participant may elect to change his rate
of 401K Contributions as of the beginning of any pay
period, or to discontinue his payroll deductions at any
time, by complying with the uniform administrative
rules established (and consistently applied) by the
Plan Administrator.
d) 401K Contributions shall be credited to the
Participant's 401K Account. A Participant shall be
fully Vested in his 401K Account.
ARTICLE V
WITHDRAWALS AND LOANS
5.01 Withdrawals. Subject to the provisions of this Article, an
Active Participant may elect to withdraw:
a) All or any part of his Voluntary Account at any
time.
b) All or part of his 401K Account or Company Stock
Account, Post-1971 Company Account, or Rollover Account
at any time after he attains age 59-1/2.
c) All or part of his 401K Account (excluding any net
earnings credited for Plan Years ending after December
31, 1988) in the case of Hardship.
d) In the case of a Specific Restricted Withdrawal,
(i) all or any part of his Rollover Account, and (ii)
all or any part of that portion of his Company Stock
Account or Post-1971 Company Account which have been
held by the Plan for at least two years.
5.02 Hardship and Specific Restricted Withdrawals. Subject to
the provisions of this Article, an Active Participant may
make a Hardship or Specific Restricted Withdrawal no more
than two (2) times per year, upon a determination by the
Plan Administrator (or by an independent third party
designated by the Plan Administrator):
a) that the Participant has a bona fide immediate and
heavy financial need;
b) that the Participant has already withdrawn, or is
simultaneously withdrawing, his entire interest in his
Voluntary Account; and
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c) that other assets readily available to the
Participant are insufficient to meet the bona fide
immediate and heavy financial need.
The amount which may be withdrawn by means of a Hardship or
Specific Restricted Withdrawal shall not exceed the amount
which is required to meet such immediate and heavy financial
need (plus income taxes resulting from the withdrawal) and
which is not reasonably available from other resources of
the Participant.
With regard to a Hardship Withdrawal of a Participant's
interest in his 401K Account, the existence of a "bona fide
immediate and heavy financial need" shall be determined by
the Plan Administrator under standards which comply with the
safe harbor provisions of the Treasury regulation under
Section 401(k) of the Code, as set forth in an Addendum to
this Plan. With regard to a Specific Restricted Withdrawal
of a Participant's interest in his Company Stock Account,
Post-1971 Company Account, and Rollover Account, the
existence of a "bona fide immediate and heavy financial
need" shall be determined under standards established from
time to time by the Plan Administrator, in its sole
discretion, and set forth in an Addendum to this Plan.
5.03 Suspension of 401K and Voluntary Contributions in Case of
Hardship Withdrawal. If a Participant makes a Hardship
Withdrawal from his 401K Account, he shall be ineligible for
twelve (12) months thereafter to make any further 401K
Contributions or Voluntary Contributions. The Participant's
401K Contributions for the calendar year in which the
suspension ends shall not exceed the limit set forth in
Section 402(g) of the Code for such calendar year, reduced
by the 401K Contributions made by the Participant in the
calendar year in which the withdrawal occurred.
5.04 Order and Source of Withdrawals. Withdrawals from a
Participant's Accounts must be made in accordance with the
following rules.
a) Only Active Participants may make withdrawals.
b) The Participant's entire interest in his Voluntary
Account must be withdrawn before he may withdraw any
part of his 401K Account, Company Stock Account, Pre-
1972 Company Account, Post-1971 Company Account, or
Rollover Account.
c) A Participant must withdraw his entire interest in
his Company Stock Account, Post-1971 Company Account,
and Rollover Account before he may make a Hardship
Withdrawal from any part of his 401K Account.
d) The Plan Administrator may establish such
reasonable rules as it deems appropriate to govern
requests for, and administration of, withdrawals, and
the order and source of withdrawals (to the extent not
otherwise provided herein).
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5.05 Loans. Upon application of an Active Participant (or any
other Participant or Beneficiary who is a party in interest,
as defined in Section 3(14) of ERISA, or a disqualified
person, as defined in Section 4975(e) of the Code), the Plan
may lend to the Participant such amounts as the Plan Manager
may determine, subject to the provisions of this Section.
a) The aggregate amount of all outstanding loans to
the Participant from this Plan and from any other
qualified plan maintained by the Employer including
accrued interest thereon, shall not exceed the lesser
of (i) $50,000, reduced by any loan repayment made
during the one (1) year period ending on the day before
the date such loan is made and (ii) fifty percent (50%)
of such Participant's Vested account balances
determined at the time the loan is made.
Loans shall be made available on a reasonably
equivalent basis in accordance with uniform and
nondiscriminatory standards and policies, which shall
be consistently applied to each application for a loan
pursuant to this Section.
b) Each such loan shall be made at a reasonable
interest rate, shall be amortized in substantially
level payments made not less than quarterly over the
term of the loan. Each loan shall be evidenced by the
promissory note of the Participant and shall be
adequately secured. In the event of default,
foreclosure on the note and attachment of security may
be made by the Trustee. Each such loan shall be repaid
within five (5) years, unless such loan is used to
acquire a dwelling unit which is to be used as the
principal residence of the Participant, in which case
such loan shall be repaid within fifteen (15) years.
c) Each loan made hereunder shall be deemed to be a
separate investment of the borrowing Participant and
shall be credited to a separate loan account for the
benefit of the borrowing Participant. All payments of
interest and principal shall be through payroll
deduction and shall be credited to such Participant's
loan account, and such account shall be adjusted for
any applicable administrative expenses. In connection
with the loan, the borrowing Participant's investments
in the Funds shall be reduced.
d) If all or any part of the amount standing to the
Accounts of a Participant shall become distributable to
such Participant or his Beneficiary pursuant to Article
VIII while a loan to such Participant under this
Section is outstanding, the amount of such distribution
shall be applied in payment of any outstanding loan
principal, whether or not then due, and any interest
theretofore accrued, before distributing the balance,
if any, to the Participant or his Beneficiary.
e) The Plan Manager may establish such reasonable
rules and procedures as it deems appropriate with
respect to applications for, the administration of, the
repayment of, and the terms of, loans (and such rules
and procedures shall be considered a part of the Plan,
to the extent required for compliance with Department
of Labor regulation under Section 408(b)(1) of ERISA).
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ARTICLE VI
TRUST AND INVESTMENTS
6.01 Establishment of Trust. The assets in Profit Sharing
Retirement Plan shall be held in trust by one or more
Trustees appointed by the Company under one or more Trust
Agreements entered into by the Company. The Company may
from time to time appoint additional Trustees, remove and
discharge any of the Trustees, enter into additional Trust
Agreements, revise or terminate any of the Trust Agreements,
direct the transfer of all or any part of the assets in
Profit Sharing Retirement Plan from one trust or Trustee to
another and enter into, revise and terminate annuity or
insurance contracts. Each Trust Agreement and annuity or
insurance contract shall be deemed to form a part of the
Plan, and any and all rights or benefits which may accrue
under the Plan shall be subject to each said agreement or
contract.
6.02 Contributions and Benefits. All contributions under the
Plan made by an Employer shall be made into the Trust and
all benefit payments under the Plan shall be made from the
Trust.
6.03 Exclusive Benefit and Reversion. The assets of the Plan
shall be held for the exclusive benefit of Participants and
Beneficiaries and for the exclusive purpose of providing
benefits under the terms of the Plan and paying the
reasonable administrative expenses of the Plan. The
Employer shall have no right, title, or interest in the
contributions made by it under the Plan and no part of the
Trust shall revert to the Employer, except that (a) any
contribution made by mistake of fact may be returned to an
Employer within one year of the date of the contribution,
and (b) as all 401K and other contributions by the Employer
to the Plan are conditioned on their deductibility under
Section 404 of the Code, to the extent that any such
deduction is disallowed, such contribution may be returned
to the Employer within one year of the disallowance.
6.04 Establishment and Selection of Funds. The Fund Manager
shall establish a number of Funds as investment alternatives
under the Trust. Except as provided in Section 6.05 or the
Trust Agreement, and subject to such reasonable procedures
as may be established by the Plan Administrator or Fund
Manager, each Participant (and following his death, his
Beneficiary) shall have the authority to allocate the
amounts credited to the Participant's Accounts among the
Funds that are made available under the Trust.
6.05 Special Provisions Regarding Company Common Stock. Prior to
1988, the Employer made contributions to the Plan that, in
accordance with the provisions of the Plan then in effect,
were allocated to the Company Stock Accounts. In addition,
Company Common Stock that was rolled over to this Plan by
certain Participants upon the termination of the Polaroid
Employee Stock Ownership Plan was credited to the Company
Stock Accounts of such Participants.
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a) Subject to the provisions of this Section, amounts
standing to the credit of the Company Stock Accounts
shall be invested solely in the Company Common Stock
Fund, which shall be a Fund under the Trust that is
primarily invested in Company Common Stock, as provided
herein.
b) All net income of the Company Common Stock Fund
shall be used by the Trustee to acquire Company Common
Stock not later than thirty (30) days after the date of
receipt of such income by the Trustee; provided,
however, that the Trustee may retain in cash (i) an
amount equal to but not in excess of the cash
reasonably anticipated to be required to make
distribution to Participants entitled to receive an
immediate distribution of their Company Stock Accounts
and/or to invest pursuant to elections made in
accordance with subsection (d) or (f) of this Section,
and (ii) an amount to be paid as administrative
expenses in accordance with the Trust Agreement.
Company Common Stock may comprise more than 10% of the
assets of the Trust. The Trustee may purchase Company
Common Stock on the open market, or from any source
other than from the Company and such Company Common
Stock shall be outstanding shares. All such purchases
must be made at fair market value. Pending ultimate
investment in Company Common Stock, the Trustee may
temporarily retain uninvested cash or may invest all or
any part thereof in short-term investments if such
action is prudent under all the facts and circumstances
prevailing.
c) Each Participant may direct the Trustee as to the
manner in which any Company Common Stock allocated to
his Company Stock Account is to be voted. Before each
Annual or Special Meeting of Shareholders of the
Company, there shall be sent to each Participant who
has Company Common Stock credited to his Company Stock
Account a copy of the proxy solicitation material for
the Meeting, together with a form requesting
instructions to the Trustee on how to vote the Company
Common Stock allocated to such Participant's Company
Stock Account. Upon receipt of such instructions, the
Trustee shall vote such shares in accordance with such
instructions. The Trustee shall vote (A) shares of
Company Common Stock in each Participant's Company
Stock Account for which the Trustee received no valid
voting instructions; and (B) shares of Company Common
Stock which it holds that have not yet been allocated
to Participant Accounts, in the same manner and in the
same proportion as the shares of Company Common Stock
in the Participants" Company Stock Accounts, with
respect to which the Trustee received valid voting
instructions, are voted.
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d) Each Participant shall have the right to direct
the Trustee as to how to respond to a tender or
exchange offer made with respect to Company Common
Stock allocated to the Participant's Company Stock
Account. If a Participant fails to deliver timely
written instructions to the Trustee with respect to
such Company Common Stock, the Trustee shall be
prohibited from tendering or selling such stock. Each
Participant shall have the right prior to the
withdrawal date to direct the Trustee to withdraw any
Company Common Stock previously tendered for sale. In
the event of a tender or exchange offer made with
respect to Company Common Stock which is not allocated
to Accounts of Participants, the Trustee shall tender
or exchange such shares on the same basis and in the
same proportion as the shares it has tendered or
exchanged pursuant to directions it has received from
such Participants with respect to Company Common Stock
allocated to their Accounts.
e) In the event of a tender of exchange offer for
shares of Company Common Stock held by the Trustee in
the Trust Fund, neither the Company nor the Plan
Administrator shall interfere in any manner nor in any
way attempt to influence any Participant's decision
regarding the tender or exchange of such shares except
to the extent of communications directed generally to
the owners of the shares subject to the tender or
exchange offer. The Company and the Plan Administrator
shall timely communicate to all Participants the
provisions of the Plan relating to the tender of
exchange of such shares and shall timely distribute to
all such Participants all communications directed
generally to the owners of the shares subject to the
tender or exchange offer.
f) Any Participant who has attained at least the age
of fifty-five (55), or who has had a Termination of
Service, regardless of age, and any Beneficiary, may
elect, irrevocably, effective as of the first day of
January and/or the first day of July in any Plan Year
(and/or as of any additional date or dates each Plan
Year as the Plan Administrator may determine from time
to time), to have the entire amount then standing to
his credit in the Company Stock Account transferred to
his Post-1971 Company Account and invested in the Funds
made available for investment in accordance with
Section 6.04.
6.06 Payment of Administrative Expenses. All reasonable costs,
charges, and expenses incurred in connection with the
administration of the Trust and the Funds, including,
without limitation, compensation and fees to any Trustee,
insurance company, investment advisor or manager,
recordkeeper, or legal counsel, shall be paid from the Trust
unless paid or advanced by the Employer in its sole
discretion. Such costs, charges, and expenses may be
allocated among the Funds, the Trusts, and the Accounts of
Participants (and Beneficiaries) on a reasonable basis.
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ARTICLE VII
PARTICIPANT ACCOUNTS AND VALUATION
7.01 Participant Accounts. The Plan shall maintain adequate
records of each Participant's Accounts under the Plan. The
Plan Administrator may also establish such other accounts
and sub-accounts as it deems appropriate in connection with
the administration of the Plan and Trust. Notwithstanding
such separate accounting, Trust assets may be commingled for
purposes of investment.
7.02 Valuation. At the close of each calendar quarter, and on
such other dates as the Plan Administrator may designate,
the Trustee shall determine the total net worth of the Trust
and of each Fund, based on the fair market value of their
respective assets as of such day. If the total net worth of
any Fund as so determined differs from the aggregate amount
standing to the credit of all Accounts having an interest in
such Fund, the surplus or deficiency shall be allocated to
such Accounts in proportion to their interests in the Fund.
For purposes of making any benefit payment or withdrawal,
the value of a Participant's Accounts shall be the last
value determined prior to payment.
ARTICLE VIII
BENEFITS PAYABLE TO PARTICIPANTS AND BENEFICIARIES
8.01 Benefits to Participants in General. Upon a Participant's
Termination of Service, he shall be entitled to receive the
amounts standing to the credit of his Accounts.
8.02 Benefits to Participants with Accounts Not Exceeding $3,500.
If at the time of a Participant's Termination from Service,
the value of the Participant's Accounts does not exceed
$3,500, the amounts standing to the credit of his Accounts
shall be distributed to him as a single lump sum payment
within a reasonable period of time after his Termination
from Service.
8.03 Benefits to Participants with Accounts Exceeding $3,500. If
at the time of a Participant's Termination from Service, the
value of the Participant's Accounts exceeds $3,500, the
Participant shall be entitled to receive distribution of his
Accounts as follows:
a) Timing. Subject to Section 9.01, such
Participant's benefits will be paid, or will begin to
be paid following his election to receive benefits;
provided that benefits may not commence prior to the
Participant's attainment of age sixty-five (65) unless
he has consented to such distribution in writing during
the ninety (90) day period ending on his Annuity
Starting Date.
b) Form. Such Participant's benefits will be paid in
ten (10) annual installments, unless the Participant
elects one of the available forms of benefit payment in
accordance with such reasonable rules as may be
established by the Plan Administrator. All such
Participants shall have available to them the following
payment forms:
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(i) single lump sum payment;
(ii) partial lump sum payment(s) of at least
$1,000;
(iii) substantially non-increasing
payments in annual, semiannual, quarterly, or
monthly installments over a period designated by
the Participant (not exceeding the joint life
expectancy of the Participant and his designated
Beneficiary, as recalculated each year).
In addition, the following payment forms shall be
available to any Participant who has a Termination of
Service due to Retirement or commencement of Long-term
Disability on or after age fifty-five (55):
(iv) purchase from an insurance company of an
annuity contract that provides payments to such
Participant (subject to the applicable conditions
of Section 8.04); and,
(v) if a Participant is entitled to receive
a pension under the Polaroid Pension Plan,
transfer of the value of his Accounts under this
Plan to the Pension Plan for the purpose of
providing additional retirement benefits
thereunder, in accordance with the applicable
annuity option under the Pension Plan.
8.04 Special Rules for Purchases of Annuities. If a Participant
elects to have distribution of his benefits made by purchase
of a life annuity, such annuity must be a Qualified Joint
and Survivor Annuity, unless during the ninety (90) day
period ending on the Annuity Starting Date the Participant's
Spouse has consented in writing to distribution in a
different form of life annuity in a writing that is
witnessed by a Plan representative or notary public;
provided that such spousal consent shall not be required if
it cannot be obtained because there is no Spouse or the
Spouse cannot be located (or because of other reasons
provided in the applicable Treasury regulation). In any
case on which a Participant elects a life annuity, the Plan
Administrator shall provide such information to the
Participant and Spouse as is required by Section 401(a)(11)
or 417 of the Code and the regulations thereunder. A
"Qualified Joint and Survivor Annuity" is an annuity
providing periodic payments for the life of the Participant,
and providing payments after the Participant's death to the
Participant's surviving Spouse (if any), for life, each in
an amount equal to at least fifty percent (50%) of the
amount of the periodic payment made during the life of the
Participant. This Section shall apply only to Participants
who have one or more Hours of Service after August 22, 1984.
8.05 Death Benefits and Identification of Beneficiary. Upon a
Participant's death, his Beneficiary shall be entitled to
receive the amounts standing to the credit of his Accounts.
For purposes of the Plan, a Participant's Beneficiary shall
be determined as follows.
a) The Beneficiary shall be the Participant's
surviving Spouse, unless the Participant has designated
a different Beneficiary and either:
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(i) the Participant's Spouse has consented
to such designation in a writing witnessed by a
Plan representative or notary public; or,
(ii) such consent by the Spouse is not
required by law (because the Spouse cannot be
located or there is no Spouse, or because of other
reasons specified in Treasury regulations).
b) If the Spouse is not required to be the
Beneficiary, then the Beneficiary shall be the
individual or entity designated by a Participant on an
appropriate form submitted to and received by the Plan
Administrator. The Participant may change his
Beneficiary by submitting a revised designation,
subject to spousal consent requirements described above
and the other applicable requirements of this Plan.
c) In the absence of a named Beneficiary living on
the date as of which a payment is to be made hereunder,
the following shall be such Participant's Beneficiary:
(i) if payments to a Beneficiary have
commenced, the Beneficiary shall be the Estate of
the recipient of the last preceding payment;
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(ii) if the named Beneficiary survives for a
substantial period of at least thirty (30) days
after the death of the Participant, but dies prior
to the commencement of benefits, the Beneficiary
shall be the Estate of the named Beneficiary; or
(iii) if neither clause (i) nor clause
(ii) applies, the Beneficiary shall be the Estate
of the Participant.
d) Notwithstanding anything to the contrary in this
Section, no change in the designation of any person or
persons as an insured life under an annuity under the
Plan may be made after entitlement under such annuity
has commenced or after a contract has been entered into
with an insurance company respecting such annuity
unless a change is permitted under the terms of the
annuity contract.
8.06 Timing and Form of Death Benefit Payments. Death benefits
shall be paid as follows.
a) Beneficiary is Estate. If the Beneficiary is an
Estate, the death benefit shall be paid as a single
lump sum as soon as administratively feasible after the
benefit becomes payable.
b) Beneficiary is Not An Estate. If the Beneficiary
is not an Estate, the following rules shall apply.
(i) Participant Dies Before Benefit
Commencement. If the Participant's Accounts upon
his death do not exceed $3,500, the death benefit
shall be distributed as soon as administratively
feasible thereafter in a single lump sum payment.
If the Participant's Accounts exceed $3,500, his
death benefit shall (subject to Section 9.01) be
distributed in one of the following forms, as and
when elected by the Beneficiary in accordance with
such reasonable procedures as the Plan
Administrator may establish:
(A) a single lump sum payment;
(B) in partial lump sum payments
of at least $1,000;
(C) in substantially non-
increasing payments made in annual,
semiannual, quarterly, or monthly
installments over a period designated by the
Beneficiary (not exceeding the life
expectancy of the Beneficiary).
In addition, the following payment form
shall be available to a Beneficiary of such a
Participant who had a Termination of Service as a
result of Retirement or the commencement of Long-
term Disability after attainment of age fifty-five
(55), or who died after attainment of age fifty-
five (55) but prior to Termination of Service:
(D) purchase from an insurance
company of an annuity contract that provides
payments to the Beneficiary.
(ii) Participant Dies After Benefit
Commencement. If the Participant dies after
payment of benefits to the Participant has
commenced in installments, and payments remain
under the installment schedule that applied to the
Participant prior to his death, payment to the
Beneficiary shall continue under that installment
schedule unless the Beneficiary elects to receive
the amounts remaining to the credit of the
Participant's Accounts in a single lump sum.
ARTICLE IX
MISCELLANEOUS BENEFIT PAYMENT RULES
9.01 Minimum Distribution Requirements. Notwithstanding any
other provision of the Plan to the contrary, the Plan shall
comply with the requirements of Section 401(a)(9) of the
Code (which are incorporated herein by reference).
Accordingly, the following rules shall apply.
a) A Participant's entire interest in the Plan must
be distributed no later than the April 1 next following
the close of the calendar year in which occurs the
Participant's Required Beginning Date, or commence
being distributed no later than such April 1, over a
period not extending beyond the life (or life
expectancy, as recalculated annually) of the
Participant or the lives (or joint life expectancies,
recalculated annually) of the Participant and a
designated beneficiary. For this purpose,
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(i) the Required Beginning Date of any
Participant who has ever been a five percent owner
(as defined in Section 15.02(h)(iii) or any
Participant who attains age 70-1/2 after December
31, 1987, is the date he attains age 70-1/2;
(ii) the Required Beginning Date of any other
Participant is the later of the date he terminates
employment with the Employer and the date he
attains age 70-1/2.
b) The form of distribution payable to the
Participant shall comply with the minimum distribution
incidental benefit rule.
c) If a Participant dies after payment of his
benefits has begun, the remaining portion of his
interest in the Plan shall be distributed at least as
rapidly as under the method of distribution in effect
on the date of his death.
d) If a Participant dies before distribution of his
benefits has begun, such distribution must:
(i) be completed within five years of his
death; or
(ii) begin to be distributed to his
designated beneficiary within one year of his
death over a period not extending beyond the life
(or life expectancy, as recalculated annually) of
his designated beneficiary; provided that, if the
designated beneficiary is the Participant's
spouse, distribution to the spouse need not begin
prior to the date the Participant would have
attained age 70-1/2.
e) If distribution of a Participant's interest in the
Plan is made by purchase of an annuity contract, such
contract shall comply with the applicable requirements
of this Section.
f) The restrictions of this Section shall not apply
if prior to January 1, 1984, the Participant has made
an election consistent with Section 242 of the Tax
Equity and Fiscal Responsibility Act of 1982.
9.02 Limit on Delay in Distribution. Payment of benefits under
the Plan to a Participant must begin no later than the
sixtieth (60th) day following the close of the Plan Year in
which the latest of the following events occurs: (a) the
Participant's sixty-fifth (65th) birthday; (b) the
Participant's termination of employment with the Employer;
or (c) such later date as is specified by the Participant,
in his election claiming benefits.
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9.03 Medium of Payment. All distributions shall be made in cash
(via U.S. currency by check, direct deposit or other similar
means), except that distributions made from the Company
Common Stock Fund shall be made in Company Common Stock
unless the Participant has elected a distribution in cash,
in accordance with such reasonable procedures as may be
established by the Plan Administrator.
9.04 Termination of Interest. Notwithstanding anything contained
in this Plan to the contrary, the interest of a Participant,
his Beneficiary, and any person claiming an interest under
either of them in the Trust or under the Plan shall
terminate upon the purchase of an annuity contract, the
transfer of the amount of the benefits attributable to such
Participant, the full payment of such benefits in a single
sum payment, or the completion of installment payments.
9.05 Adequate Delivery. The mailing of any payment under the
Plan to a person at the address last known to the Plan
Manager or the making of a direct deposit or transfer in
accordance with instructions of the Participant or
Beneficiary shall be adequate delivery of such payment to
such person for all purposes hereunder.
9.06 Direct Transfer of Distribution. Notwithstanding anything
contained in the Plan to the contrary, effective for
distributions made after 1992 and in accordance with Section
401(a)(31) of the Code (and the regulations thereunder) and
procedures established by the Plan Administrator a
Participant, the surviving spouse of a Participant or an
Alternate Payee who is a spouse or a former spouse of a
Participant may elect to have all or any portion of an
eligible rollover distribution (as defined in Section
402(c)(4) of the Code) paid directly to an individual
retirement account, individual retirement annuity, or a
qualified trust.
9.07 Alternate Payees - Limitations and Mandatory Payout.
a) The Alternate Payee shall have the rights and
benefits of a Beneficiary in this Plan subject to the
limitations and mandatory payout requirements.
b) The only form of distribution available to an
Alternate Payee is a mandatory payout, payable in a
lump sum amount. This mandatory payout shall be made
in cash and/or in the case of benefits shares of
Company Common Stock, at the Alternate Payee's
election. If there is no election, the payout shall be
in cash. This mandatory payout shall be distributed
approximately 90 days after the Alternate Payee
receives a letter from the Plan Administrator notifying
the Alternate Payee that the qualified domestic
relations order has been approved and can be
administered consistent with Section 414(p) of the Code
and the Plan.
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ARTICLE X
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
10.01 Introduction. The contributions and allocations under
the Plan are subject to a number of limitations under the
Code. The provisions of this Article X are included in the
Plan solely to comply with the limitations of Sections
401(a)(30), 401(k), 401(m), 415, and 401(a)(17) of the Code
and are not intended to impose any limitations not required
by compliance with those Code provisions and the regulations
thereunder. The provisions of this Article X shall be
interpreted and applied in a manner consistent with this
intent.
10.02 Limitation on Elective Deferrals.
a) The 401K Contributions for any Participant for any
calendar year, when added to the "elective deferrals"
(within the meaning of Section 402(g) of the Code) of
such Participant under all other plans of the Company
shall not exceed $7,000 (or such greater dollar amount
established under Section 402(g)(5) of the Code).
b) If, during any calendar year, more than the
maximum permissible dollar amount of elective deferrals
under Section 402(g) of the Code is contributed on
behalf of a Participant under this Plan and any other
plan described in Sections 401(k), 408(k), or 403(b) of
the Code, the following provisions shall apply.
(i) No later than March 1 of the next
succeeding calendar year, the Participant may, but
is not required to, allocate all or part of such
contributions in excess of such maximum
permissible dollar amount ("Excess Elective
Deferrals") to this Plan, by submitting a written
statement to the Plan Administrator that Excess
Elective Deferrals have been made on his behalf
for the preceding calendar year and that he is
allocating all or a stated portion of such Excess
Elective Deferrals to this Plan. If a Participant
has Excess Elective Deferrals calculated by taking
into account only elective deferrals under this
Plan and other plans of the Company, the Company
may provide such written notice to the Plan
Administrator on behalf of such Participant.
(ii) To the extent a Participant's Excess
Elective Deferrals are allocated in a timely
manner to this Plan pursuant to (i) above, the
Plan Administrator shall, as soon as practicable
thereafter, direct the Trustee to return such
Excess Elective Deferrals, as adjusted for income
or losses allocable thereto in accordance with
regulations promulgated under Section 402(g) of
the Code, to the Company for distribution to the
Participant no later than the April 15 next
following the calendar year of such allocation.
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10.03 Limitation on 401K Contributions for Highly Compensated
Participants.
a) At any time during the Plan Year, the Company may
suspend or reduce the amount of 401K Contributions with
respect to any Participant if the Committee determines
that such suspension or reduction is necessary or
appropriate for the satisfaction of the test in either
(i) or (ii) below with respect to the 401K
Contributions for such Plan Year:
(i) under this test, the Actual Deferral
Percentage for Highly Compensated Participants for
the Plan Year shall not exceed the Actual Deferral
Percentage for all other Participants for the Plan
Year, multiplied by 1.25; or
(ii) the excess of the Actual Deferral
Percentage for Highly Compensated Participants for
the Plan Year over the Actual Deferral Percentage
for all other Participants for the Plan Year is
not more than two (2) percentage points, and the
Actual Deferral Percentage for the Highly
Compensated Participants does not exceed the
Actual Deferral Percentage for all other
Participants multiplied by two (2).
For purposes of this subsection (a), the
"Actual Deferral Percentage" for a specified group of
Participants for a Plan Year shall be the average of
the ratios (calculated separately for each Active
Participant in such group) of (1) the 401K
Contributions actually paid over to the Trust on behalf
of the Participant for such Plan Year to (2) the
Participant's Total Compensation for the Plan Year.
(With respect to any Active Participant, such ratio,
separately calculated, shall be such Participant's
"Deferral Percentage".) For purposes of determining
the Actual Deferral Percentage of an Active Participant
who is a Highly Compensated Participant described in
Section 414(q)(6)(A) of the Code and who has a Family
Member who is an Employee, the 401K Contributions and
Total Compensation of such Participant shall include
the 401K Contributions and Total Compensation of his
Family Member, and such Family Member shall be
disregarded in determining the Actual Deferral
Percentages for any group under the Plan.
The Deferral Percentage for any Highly
Compensated Participant for the Plan Year and who is
eligible to have contributions made on his behalf under
two or more plans or arrangements described in Section
401(k) of the Code that are maintained by the Company
shall be determined as if all such contributions were
made under a single arrangement.
The Actual Deferral Percentage shall be
calculated by taking into account only those 401K
Contributions that, but for the Participant's 401K
Agreement, would have been received as cash by such
Participant during the applicable Plan Year, or within
two and one half (2-1/2) months after the close of the
Plan Year, for services performed during the Plan Year.
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b) If, for any Plan Year, the Plan Administrator
determines that the 401K Contributions with respect to
the Highly Compensated Participants exceed the
limitation set forth in (a) above, the Plan
Administrator shall determine the amount of the 401K
Contributions for each Highly Compensated Participant
that exceed such limitation (the "Excess 401(k)
Amount"), under the following "leveling" method. The
Deferral Percentage of the Highly Compensated
Participant with the highest Deferral Percentage shall
be reduced by the amount required to cause such Highly
Compensated Participant's Deferral Percentage to equal
the Deferral Percentage of the Highly Compensated
Participants with the next highest Deferral Percentage.
If a lesser reduction would permit the Plan to satisfy
the limitation described in subsection (a), only such
lesser reduction shall be made. This process shall be
repeated until the Plan satisfies the limitation
described in subsection (a). The Excess 401(k) Amount
for each Highly Compensated Participant shall equal the
401K Contributions actually paid over to the Trust on
behalf of such Highly Compensated Participant for such
Plan Year minus the amount determined by multiplying
such Highly Compensated Participant's Deferral
Percentage (determined after application of this
subsection) by such Highly Compensated Participant's
Total Compensation for the Plan Year. In no case shall
the Excess 401(k) Amount for any Highly Compensated
Participant for such Plan Year exceed the amount of
401K Contributions made on behalf of the Highly
Compensated Participant for the Plan Year.
The Plan Administrator shall direct the
Trustee to distribute to each Highly Compensated
Participant, within twelve (12) months after the close
of such Plan Year, the amount of 401K Contributions,
equal to the Excess 401(k) Amount for such Highly
Compensated Participant under the rules of this
subsection (b) (and subsection (c), if applicable),
along with the gain or loss for the Plan Year allocable
thereto (in a manner consistent with Treasury
Regulation 1.401(k)-1(f)(4)).
The Excess 401(k) Amount for any Highly
Compensated Participant shall be reduced by any Excess
Elective Deferrals previously distributed to such
Highly Compensated Participant for the Highly
Compensated Participant's taxable year ending with or
within the Plan Year. The amount of Excess Elective
Deferrals to be distributed to a Highly Compensated
Participant for a taxable year of such Highly
Compensated Participant shall be reduced by any Excess
401(k) Amount previously distributed to such Highly
Compensated Participant for the Plan Year beginning
with or within such taxable year of the Highly
Compensated Participant.
c) In the case of a Highly Compensated Participant
whose Deferral Percentage is determined under the
family aggregation rules of Treasury Regulation
1.401(k)-1(g)(1)(ii)(C), the determination and
correction of the Excess 401(k) Amount shall be
accomplished by reducing the Deferral Percentage as
required under the leveling method described in
subsection (b) above and allocating the Excess 401(k)
Amount so determined for the family group among the
family members in proportion to the sum of the 401K
Contributions of each family member that are combined
in determining the Deferral Percentage.
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d) If this Plan is aggregated with other plans for
purposes of satisfying the requirements of Section
410(b) of the Code (other than the average benefit
percentage test), this Plan and the other plans so
aggregated shall be treated as a single plan for
purposes of this Section and Section 401(k) of the Code
(and the regulations thereunder). This Plan may be
aggregated with other plans maintained by the Company
for purposes of this Section and Section 401(k) of the
Code (and the regulations thereunder), but only if this
Plan and the other plans so aggregated, when treated as
a single plan, satisfy Sections 401(a)(4) and 410(b) of
the Code.
10.04 Limitation on Voluntary Contributions for Highly
Compensated Participants.
a) The Voluntary Contributions made on behalf of the
Highly Compensated Participants in any Plan Year shall
be limited to the extent that the Plan Administrator
determines is necessary or appropriate for the
satisfaction of the test in either (i) or, to the
extent not prohibited by regulations promulgated by the
Secretary of the Treasury, (ii) below to be met with
respect to such contributions for such Plan Year:
(i) under this test, the Actual Contribution
Percentage for Highly Compensated Participants is
not more than the Actual Contribution Percentage
for all other Participants, multiplied by 1.25; or
(ii) under this test, the excess of the
Actual Contribution Percentage for Highly
Compensated Participants over the Actual
Contribution Percentage for all other Participants
is not more than two (2) percentage points, and
the Actual Contribution Percentage for the Highly
Compensated Participants is not more than the
Actual Contribution Percentage for all other
Participants, multiplied by two (2).
For purposes of this subsection (a), the
"Actual Contribution Percentage" for a specified group
of Participants for a Plan Year shall be the average of
the ratios (calculated separately for each Participant
in such group) of (A) the Voluntary Contributions
actually paid over to the Trust on behalf of the
Participant for such Plan Year to (B) the Participant's
Total Compensation for the Plan Year. (With respect to
any Participant, such ratio, separately calculated,
shall be such Participant's "Contribution Percentage".)
To the extent required by Sections 414(q) and 401(m) of
the Code and any regulations promulgated thereunder, in
determining the Contribution Percentage of a Highly
Compensated Participant described in Section
414(q)(6)(A) of the Code, who has a Family Member who
is an Employee, the Voluntary Contributions made on
behalf of such Highly Compensated Participant and the
Total Compensation of such Highly Compensated
Participant shall include the Voluntary Contribution
and Total Compensation of his Family Member, and such
Family Member shall be disregarded in determining the
Actual Contribution Percentage for any group under the
Plan.
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b) If, for any Plan Year, the Plan Administrator
determines that the Voluntary Contributions made on
behalf of Highly Compensated Participants exceed the
limitation set forth in subsection (a) above, the Plan
Administrator shall determine the amount of the
Voluntary Contributions for each Highly Compensated
Participant that exceeds such limitation (the "Excess
Contribution"), under the following "leveling" method.
The Contribution Percentage of the Highly Compensated
Participant with the highest Contribution Percentage
shall be reduced by the amount required to cause such
Highly Compensated Participant's Contribution
Percentage to equal the Contribution Percentage of the
Highly Compensated Participants with the next highest
Contribution Percentage. If a lesser reduction would
permit the Plan to satisfy the limitation described in
subsection (a), only such lesser reduction shall be
made. This process shall be repeated until the Plan
satisfies the limitation described in subsection (a).
The Excess Contribution for each Highly Compensated
Participant shall equal the Voluntary Contributions
actually paid over to the Trust on behalf of such
Highly Compensated Participant minus the amount
determined by multiplying such Highly Compensated
Participant's Contribution Percentage (determined after
application of this subsection) by such Highly
Compensated Participant's Total Compensation for the
Plan Year, provided that in no case shall the Excess
Contribution for any Highly Compensated Participant for
such Plan Year exceed the amount of Voluntary
Contributions made on behalf of the Highly Compensated
Participant for the Plan Year.
The Plan Administrator shall direct the
Trustee to distribute to each Highly Compensated
Participant, within twelve (12) months after the close
of such Plan Year, an amount of Voluntary Contributions
equal to the Excess Contribution determined with
respect to such Highly Compensated Participant under
the rules of this subsection (b) (and subsection (c),
if applicable), along with the sum of the gain or loss
for the Plan Year allocable thereto (in a manner
consistent with Treasury Regulation 1.401(m)-
1(e)(3)(B)).
c) In the case of a Highly Compensated Participant
whose Contribution Percentage is determined under the
family aggregation rules of Treasury Regulation
1.401(m)-1(f)(1)(ii)(C), the determination and
correction of any Excess Contributions shall be
accomplished by reducing the Contribution Percentage as
required under the leveling method described in
subsection (b) and allocating the Excess Contribution
so determined for the family group among the family
members in proportion to the Voluntary Contributions of
each family member that are combined in determining the
Contribution Percentage.
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d) If this Plan is aggregated with other plans for
purposes of satisfying the requirements of Section
410(b) of the Code (other than the average benefit
percentage test), this Plan and the other plans so
aggregated shall be treated as a single plan for
purposes of this Section 401(m) of the Code (and the
regulations thereunder). This Plan may be aggregated
with other plans maintained by the Company for purposes
of this Section and Section 401(m) of the Code (and the
regulations thereunder), but only if this Plan and the
other plans so aggregated, when treated as a single
plan, satisfy Sections 401(a)(4) and 410(b) of the
Code.
e) If any Highly Compensated Participant is eligible
to participate in any other plan of the Company to
which employee after-tax or matching contributions are
made, then, with respect to such Highly Compensated
Participant, the Contribution Percentage determined
under this Section shall be calculated by treating as
one plan all such plans in which such Highly
Compensated Participant is eligible to participate
(other than plans that are not permitted to be
aggregated under Treasury Regulation 1.401(m) -
1(b)(3)(ii)).
10.05 Multiple Use Test and Restructuring. The sum of the
Actual Deferral Percentage and the Actual Contribution
Percentage for the Highly Compensated Participants shall not
exceed the combined limit determined under Department of
Treasury regulations to prevent the multiple use of the
alternative limit set forth in Sections 10.03(a)(ii) and
10.04(a)(ii). If such combined limit is exceeded in any
Plan Year, the Plan Administrator shall reduce the Voluntary
Contributions of the Highly Compensated Participants using
the leveling method described in Section 4.03(b), to the
extent necessary to satisfy the combined limit and shall
distribute no later than twelve (12) months after the close
of such Plan Year, to such Highly Compensated Participants,
the amount of Voluntary Contributions necessary to cause the
Plan to satisfy such combined limitation (along with gains
and losses for the Plan Year allocable thereto, in the same
manner as described in Section 10.04(b)). To the extent
required by regulations issued by the Department of
Treasury, one or more portions of the Plan shall be
disaggregated from the other portion or portions in applying
the limits set forth in this Section. To the extent
permitted by relations or other interpretations issued by
the Department of Treasury, the Plan may be restructured to
determine its compliance with the limits set forth in this
Section on an employee group restructuring basis.
10.06 Limitation on Allocations. Notwithstanding anything
herein to the contrary, contributions and forfeitures
allocated to a Participant's accounts (other than Rollover
Contributions) shall be limited so that the "annual
additions" (as defined in Code Section 415) to the accounts
of any Participant for any Plan Year under this Plan or any
other defined contribution plan maintained by the Employer
does not exceed the lesser of
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a) $30,000 (or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Section 415(b)
of the Code, as adjusted pursuant to Section 415(d) of
the Code), or
b) twenty-five percent (25%) of such Participant's
Compensation from the Employer for such Plan Year.
For purposes of this section, in the case of a Participant
(a) who is permanently and totally disabled (as defined in
Section 22(e)(3) of the Code) and who is not a Highly
Compensated Participant, such Participant's compensation
from the Company for such Plan Year shall be deemed to be
the compensation (within the meaning of Section 415 of the
Code and the regulations promulgated thereunder) the
Participant would have received for the Plan Year if he were
paid at his salary or wage level for his work schedule in
effect immediately before becoming permanently and totally
disabled.
In applying the foregoing limits, all Excess Elective
Deferrals, "excess contributions" (as defined in Section
401(m)(6)(B) of the Code) and all contributions allocated to
any individual medical account which is part of a defined
benefit plan, or which is established for a Key Employee
pursuant to Section 419A of the Code shall be included. Any
reductions required for a Participant pursuant to this
section shall be made first from the Participant's Voluntary
Contributions for the Plan Year and then from the
Participant's 401K Contributions, and the amount of such
reduction shall be distributed to the Participant. If the
Limitation described above is exceeded for any Plan Year
with respect to a Participant who has contributions or
forfeitures allocated to his accounts under this Plan and
any other plan maintained by the Company, the reduction in
allocations required to satisfy the requirements of this
Section shall be made first under this Plan and then, if
necessary, under such other plan.
If any reduction or adjustment is required in order to
prevent the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction (as defined
in Section 415(e) of the Code, the requirements of which are
hereby incorporated herein by reference) from exceeding one
(1.0), such reduction or adjustment shall be made under the
applicable defined benefit plan.
10.07 Limitation on Compensation Taken into Account.
Effective for Plan Years beginning after December 31, 1988,
a Participant's Compensation or Total Compensation for any
Plan Year shall not be taken into account under this Plan,
to the extent that it exceeds the limit set forth in
Section 401(a)(17) of the Code. For Plan Years beginning in
1989, 1990, 1991, 1992, and 1993, such limit was $200,000
(as adjusted pursuant to Section 401(a)(17)(B)). For Plan
Years beginning in 1994 and thereafter, such limit is
$150,000 (as adjusted pursuant to Section 401(a)(17)(B)).
For purposes of this Section, the family attribution rules
of Code Section 414(q)(6) shall apply, except that "family"
shall include only the Participant's spouse and lineal
descendants who have not attained age nineteen (19) before
the close of the Plan Year.
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10.08 Definition of Highly Compensated Participant and Family
Member. "Highly Compensated Participant," for any Plan
Year, shall mean a Participant who is, for such Plan Year, a
"Highly Compensated Employee."
a) Highly Compensated Employee shall mean any
Employee who: (i) was at any time a Five Percent Owner
during the Look-Back Year or the Determination Year; or
(ii) received Total Compensation from the Employer in
excess of $75,000 (as indexed in accordance with
Section 415(d) of the Code) during the Look-Back Year;
or (iii) received Total Compensation from the Employer
in excess of $50,000 (as indexed in accordance with
Section 415(d) of the Code) during the Look-Back Year
and was a member of the Top-Paid Group for the Look-
Back Year; or (iv) was an Officer during the Look-Back
Year and received Total Compensation in the Look-Back
Year in excess of fifty percent (50%) of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code for the calendar year in which the Look-Back Year
began; or (v) is both (A) described in clauses (i),
(ii), or (iii) above, if "Determination Year" is
substituted for "Look-Back Year" in those clauses; and
(B) one of the one hundred (100) employees who receive
the most Total Compensation from the Employer during
the Determination Year.
b) For purposes of this Section:
(i) Determination Year shall mean
the Plan Year for which the determination of
which employees are Highly Compensated
Employees is being made.
(ii) Look-Back Year shall mean the
twelve (12) consecutive month period
immediately preceding the Determination Year.
(iii) The Top-Paid Group shall
mean the top twenty percent (20%) of
employees of the Employer ranked on the basis
of Total Compensation for the relevant year.
For purposes of determining the number of
employees in the Top-Paid Group, employees
described as excludable under Section
414(q)(8) of the Code and Treasury Regulation
1.414(q)-1T(A-9) are excluded.
(iv) Officer shall mean an employee
who is an officer of the Company (within the
meaning of Section 416(i) of the Code and
Treasury Regulation 1.416-1T(A-T 13, A-T
15); provided that no more than fifty (50)
employees (or, if lesser, the greater of
three (3) employees or ten percent (10%) of
the employees) shall be treated as Officers.
For this purpose, employees include only
those individuals who perform services for
the employer during the Determination Year or
Look-Back Year and the exclusions applicable
for determining the number of employees in
the Top-Paid Group are not applicable. If no
Officer has Total Compensation in excess of
fifty percent (50%) of the dollar limitation
in effect under Section 415(b)(1)(A), the
highest paid Officer shall be treated as a
Highly Compensated Employee.
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(v) Five Percent Owner shall mean
a five percent owner as defined in Section
416(i)(B)(i) and Treasury Regulation 1.416-1
(A T-17 and 18).
A "Family Member" of a Highly Compensated Participant
is an individual described in Section 414(q)(6) of the Code.
ARTICLE XI
ADMINISTRATION
11.01 Plan Administrator. The Plan Administrator shall
consist of a Chairman and at least two other members
appointed by the Chief Executive Officer of the Company. The
Chief Executive Officer shall have the ability to appoint
members to the Plan Administrator and to remove members of
the Plan Administrator at any time with or without cause.
11.02 Duties of the Plan Administrator. The Plan
Administrator, the committee selected by the CEO, shall be
responsible for the administration and interpretation of the
Plan. Specifically, the Plan Administrator shall:
a) administer the Plan in accordance with all its
terms and shall have all the powers necessary to carry
out the provisions of the Plan;
b) have the exclusive discretionary authority to
interpret the Plan on any and all matters which it has
not delegated to the Plan Manager;
c) develop policies and procedures as may be
necessary for the proper and effective administration
of the Plan;
d) serve on a panel to make final judgment on appeals
by Employees;
e) maintain records of its actions;
f) appoint the Plan Manager;
g) engage and consult with counsel, accountants,
specialists and other persons as the Plan Administrator
deems necessary and desirable;
h) notify the Trustee in writing of all actions the
Plan Administrator desires of the Trustee; and,
i) delegate such additional duties and
responsibilities to the Plan Manager as it in its sole
discretionary authority deems appropriate.
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Any determination by the Plan Administrator shall be
conclusive and binding on all persons except as otherwise
provided in the Plan or prohibited by law.
11.03 Decisions of the Plan Administrator. Plan
Administrator decisions must be approved by a majority of
the members of the Plan Administrator and may be made by
either a vote at a meeting, or in writing (without a
meeting). Any member of the Plan Administrator who is a
Participant under the Plan shall not vote on any question
relating exclusively to himself. Any determination by the
Plan Administrator shall be conclusive and binding except as
otherwise provided in this Plan or prohibited by law.
11.04 Fund Manager. The Fund Manager shall be one or more
Employees of the Company familiar with investments
designated by the Chief Executive Officer of the Company.
The Chief Executive Officer shall have the authority to
appoint members to the Fund Manager and to remove members of
the Fund Manager at any time with or without cause.
11.05 Duties of the Fund Manager. The Fund Manager shall:
a) establish the funding policy guidelines of the
Plan and periodically issue such guidelines to the
Trustees with respect to investment alternatives
available for the Trust;
b) periodically review the valuations of the assets
of the Trust and the earnings record of investments;
c) periodically review the performance of the Trustee
and recommend to the Board of Directors changes in
Trustee or the appointment of additional Trustees;
d) appoint, remove, and periodically review the
performance of investment managers (as defined in ERISA
Section 3(38)); and,
e) submit periodic reports of Fund Manager activities
to the President of each Employer.
11.06 Decisions of the Fund Manager. Fund Manager decisions
must be approved by a majority of the members of the Fund
Manager and may be made by either a vote at a meeting, or in
writing (without a meeting). Any determination by the Fund
Manager within its authority shall be made in its exclusive
discretion and shall be conclusive and binding except as
otherwise provided in this Plan or prohibited by law.
11.07 Instructions to the Trustee. The Plan Administrator
and Fund Manager may authorize one or more of its members,
officers, or agents to sign on its behalf any instructions
to any Trustee, and such Trustee shall be fully protected in
acting on such instructions.
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11.08 Plan Manager. The Plan Manager shall be one or more
Employees of the Company. The Plan Administrator shall have
the ability to appoint members to the Plan Manager and to
remove members of the Plan Manager at any time with or
without cause. The Plan Manager shall administer the Plan
within the framework of the policies, interpretations,
rules, practices, and procedures made by the Plan
Administrator.
11.09 Duties of the Plan Manager. The Plan Manager, a
committee appointed by the Plan Administrator to handle
daily administration and oversight, shall:
a) administer the Plan in accordance with its terms;
b) develop policies and procedures as may be
necessary for the proper and effective administration
of the Plan that do not involve significant or material
costs to the Company or the Plan (including such
procedures as may be necessary for the administration
of qualified domestic relations orders as defined in
Code Section 414(p));
c) have the discretionary authority to interpret the
Plan for any questions which may arise, including
without limitation questions relating to eligibility
for or the amounts of benefits which have been
delegated by the Plan Administrator;
d) hear appeals; however, a Participant whose appeal
is denied has the right to appeal to the Plan
Administrator; and,
e) maintain records of its actions.
11.10 Decisions of the Plan Manager. Plan Manager decisions
must be approved by a majority of the members of the Plan
Manager and may be made by either a vote at a meeting, or in
writing (without a meeting). Any member of the Plan Manager
who is a Participant under the Plan shall not vote on any
question relating exclusively to himself. Any determination
by the Plan Manager for which it has the exclusive right of
review shall be conclusive and binding except as otherwise
provided in the Plan or prohibited by law.
11.11 Member Terminations. The members of the Plan
Administrator, Fund Manager, and Plan Manager may serve as
members until such time as they retire, die, resign, or are
removed. A member of the Plan Administrator or Fund Manager
may resign at any time by filing a written notice with the
secretary of the Company. A member of the Plan Manager may
resign at any time by filing a written notice with the Plan
Administrator.
11.12 No Compensation for Duties. The members of the Plan
Administrator, Fund Manager, and Plan Manager shall not be
entitled to any compensation for services hereunder.
11.13 Delegation of Authority. The Plan Administrator or
Fund Manager may from time to time delegate some or all of
its duties and authority hereunder by a written agreement,
or in accordance with such other procedures as it may adopt
for the purpose of delegation (which procedures are
incorporated herein by reference).
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ARTICLE XII
APPEAL PROCEDURE
12.01 Claim Denial. If a claim is wholly or partially
denied, the Plan Administrator shall furnish claimants with
written notice of the denial within sixty (60) days
following the date on which the original claim was filed.
This notice of denial shall provide the reason(s) for the
denial and an explanation of any additional information
needed to process the claim, if applicable.
12.02 Right to have Review of Claim Denial. If a claimant
believes he is being denied any rights or benefits under the
Plan, such claimant may file a written request for review
with the Plan Administrator within sixty (60) days following
the date the claimant receives written notification of the
denial of the claim. The claimant shall have the right:
a) To review pertinent documents; and,
b) To submit written comments.
The claimant may also request that the review be in the
nature of a hearing.
12.03 Review of Claim Denial. Within sixty (60) days of
receiving a request to review a denial of benefits under the
Plan, the Plan Administrator shall render a decision on such
request if there has been no hearing, unless special
circumstances exist which require an extension of time. If
additional time is necessary, the claimant shall be notified
of the delay and informed of the date the Plan Administrator
expects a decision which shall be no later than an
additional ninety (90) days after the initial sixty (60) day
period. If the claimant has requested a hearing, such
hearing shall be conducted and a decision rendered no later
than 120 days from the receipt of the initial request for a
review.
ARTICLE XIII
AMENDMENT AND TERMINATION
13.01 Plan Amendments.
a) The Company reserves the right to amend or modify
the Plan at any time, for any reason subject to the
exclusions set forth below. All such amendments or
modifications may be made by the Chief Executive
Officer, by execution of a written instrument, unless
they materially affect the Employer's cost of
maintaining or funding the Plan or relate exclusively
to the Chief Executive Officer. Amendments that cannot
be made by the Chief Executive Officer shall be made by
action of the Board of Directors.
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b) Notwithstanding subsection (a) above, no amendment
or modification shall:
1) increase the duties of the Trustee
without its consent;
2) cause or permit any property held in
trust in accordance with the Plan to be diverted
for purposes other than the exclusive benefit of
Participants and their Beneficiaries as set forth
herein; or,
3) violate the provisions of any applicable
law or regulation.
13.02 Plan Termination. The Company reserves the right to
terminate the Plan at any time by action of the Board of
Directors. In the event that the Company is dissolved,
liquidated, or adjudged bankrupt by such appropriate legal
proceedings, or in the event judicial proceedings of any
kind result in the involuntary dissolution of the Company,
the Plan shall be deemed terminated with respect to the
Company and all other Employers.
13.03 Merger of the Plan. In the event of the merger or
consolidation of the Plan with, or the transfer of the
assets or liabilities of the Plan to, any other plan, each
Participant shall (if the Plan is terminated) receive an
account in the Plan immediately after such merger,
consolidation, or transfer which is equal to or greater than
the account he had immediately before such merger,
consolidation, or transfer.
13.04 Upon Merger, Consolidation, Reorganization, Etc. of the
Company. The merger, consolidation, reorganization of the
Company, or the sale by it of all or substantially all of
its assets shall not terminate the Plan if there is
delivered to the Company by the successor to the Employer or
by such purchaser of all or substantially all of its assets
a written instrument requesting that it be substituted for
the Company and agreeing to perform all of the provisions
hereof which the Company is required to perform. Upon the
receipt of said instrument and the approval of the Board of
Directors, such successor or purchaser shall be substituted
for the Company under the Plan and all Trust Agreements and
annuity or insurance contracts relating thereto, and the
Company shall be relieved and released from any obligations
of any kind, character, or description under the Plan,
including all such Trust Agreements and contracts.
13.05 Effect of Termination. Upon complete or partial
termination of the Plan, after payment of all expenses and
appropriate adjustments of Accounts, each present or former
Participant and any Beneficiary thereof shall be entitled to
receive any amounts then credited to his accounts in the
Plan in accordance with the generally applicable
distribution provisions provided elsewhere herein.
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ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.01 Unenforceability of a Particular Provision. The
unenforceability of any particular provision of this
document shall not affect the other provisions, and the
document shall be construed in all respects as if such
unenforceable provision were omitted.
14.02 Incompetency. Every person receiving or claiming a
benefit under the Plan shall be conclusively presumed to be
mentally competent and of age unless and until the Plan
Manager has actual written notice to the contrary, in which
event each payment under the Plan shall be made:
a) to any guardian or legal representative of such
person or of his Estate of which the Plan Manager has
actual written notice; or,
b) if the Plan Manager has no such notice, to the
Spouse, a child, a parent, a brother, a sister or any
person having the care or control of, or any person or
institution deemed by the Plan Administrator to have
incurred expense for, such person otherwise entitled to
payment. Any payment made in accordance with this
Section shall be a complete discharge of any liability
therefore under the Plan.
14.03 Non-Alienation of Benefits.
a) Subject to the exceptions in subsection (b) below:
(i) no benefit payable at any time under the
Plan shall be subject in any manner to alienation,
sale, transfer, assignment, pledge, attachment,
garnishment or encumbrance of any kind;
(ii) any attempt to deliver, sell, transfer,
assign, pledge, attach, garnish or otherwise
encumber any such benefit, whether then or
thereafter payable, shall be void; and
(iii) no benefit payable under the Plan
shall in any manner be liable for or subject to
the debts or liabilities of any Participant or any
other person entitled to any benefit under the
Plan.
b) Subsection (a) above shall not apply to (i) a
"qualified domestic relations order" defined in Code
Section 414(p) and those other domestic relations
orders permitted to be so treated by the Plan
Administrator under the provisions of the Retirement
Equity Act of 1984, or (ii) the pledge of a
Participant's Account as collateral for a loan from the
Plan.
14.04 Limitation of Rights. Neither the adoption and
maintenance of the Plan nor anything contained herein, shall
with respect to any present or former Employee or other
officer of an Employer or any Subsidiary be deemed to:
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a) limit the right of an Employer or any Subsidiary
to discharge or discipline any such person; or,
b) create any right or interest under the Plan or in
the Trust or the Funds thereof other than as
specifically provided herein.
14.05 Rollover Contributions. A Participant may contribute
to the Plan, as a Rollover Contribution, any amount of cash
which qualifies as a "rollover amount" under
Section 402(a)(5) of the Code or a "rollover contribution"
described in Section 408(d)(3)(A)(ii) of the Code. In no
event may a Participant make a rollover contribution of
securities, fixed instruments or any other property other
than cash.
14.06 Indemnification. The Company shall indemnify the
members of the Plan Administrator, the members of the Fund
Manager, the Plan Manager and any other Employee of the
Company to the full extent of any expenses, penalties,
damages or other pecuniary loss which such Employee may
suffer as a result of his responsibilities, obligations or
duties in connection with the Plan or fiduciary activities
performed in connection with the Plan. Such indemnification
shall be paid by the Company to the Employee to the extent
that fiduciary liability insurance is not available to cover
the payment of such items, but in no event shall such
payments be made out of Plan assets. Notwithstanding the
foregoing, this indemnification shall not relieve any
Employee serving in a fiduciary capacity of his fiduciary
responsibilities and obligations.
14.07 Special Rules Regarding Affiliated Companies. For
purposes of this Section and Article XV the term "Affiliated
Company" shall mean (a) a member of a controlled group of
corporations (as determined in accordance with Section
414(b) of the Code) of which the Employer is a member, (b) a
trade or business (whether or not incorporated) which is
under common control with the Employer as determined in
accordance with Section 414(c) of the Code, (c) a member of
an "affiliated service group" (within the meaning of Section
414(m) of the Code) of which the Employer is a member, or
(d) an organization which is required to be aggregated with
the Employer under regulations issued under Section 414(o)
of the Code.
Hours of Service with an Affiliated Company of the
Employer shall be treated as Hours of Service with the
Employer. In addition, each reference to the "Employer" in
the following Sections is considered to include the
Affiliated Companies of the Employer: Section 1.10
(Compensation); Section 1.24 (Leased Employee); Section 1.35
(Termination of Service); Section 5.05 (Loans); Article X
(Limitations on Contributions and Allocations).
14.08 Military Service. An individual who is terminated from
the Employer or an Affiliated Company by reason of military
service with the Armed Forces of the United States shall be
credited Hours of Service under this Plan to the extent
required by any federal law, so long as he returns to work
prior to the end of the period in which he has veterans'
reemployment rights.
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14.09 Governing Law. The Plan shall be administered in the
United States of America, and its validity, construction and
all rights hereunder shall be governed by the laws of the
United States under ERISA. To the extent that ERISA shall
not be held to have preempted local law, the Plan shall be
administered under the laws of the Commonwealth of
Massachusetts. If any provision of the Plan shall be held
invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.
14.10 Effective Date for Restatement. Except as otherwise
provided herein, the amendments made by this restatement of
the Plan shall be effective as of January 1, 1996. The
changes to, or the adoption of, the following provisions of
this Plan have been made by this restatement (or
previously) to comply with certain changes in applicable
law, and are (or have been) made effective as of the
following dates: January 1, 1987 (Sections 10.03, 10.04,
10.05, 10.06, 10.07, 10.08); January 1, 1988 (Sections 9.01,
10.01); January 1, 1989 (Section 5.01). In addition, to the
extent that it is necessary to the continued tax
qualification of the Plan that any provision hereof be
effective as of a specific date, such provision shall be
effective as of that date.
14.11 Headings/Gender. Headings of sections and subsections
of the Plan are inserted for convenience of reference. They
constitute no part of the Plan and are not to be considered
in the construction thereof. The masculine pronoun also
means the feminine where appropriate and, when required by
the context, any word in the singular also means the plural,
or vice-versa, as the case may be.
14.12 Taxation. Any tax advantages which this plan is
intended to provide are subject to government rulings,
regulations, and the application of the tax laws by the
Internal Revenue Service and the individual states. The
Employers do not promise or represent to any person that any
particular tax consequence will result from his or her
participation in the Plan.
ARTICLE XV
TOP-HEAVY PROVISIONS
15.01 Scope of Article. Notwithstanding any provision of the
Plan to the contrary, this Article XV shall control the Plan
to the extent required to cause the Plan to comply with the
requirements of Section 416 of the Code.
15.02 Definitions. As used in this Article XV, the following
words and phrases shall have the following meanings, unless
a different meaning is plainly required by the context:
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a) Account Balance. As of any Valuation Date, the
aggregate amount credited to an individual's account or
accounts under a qualified defined contribution plan
(excluding employee contributions which were deductible
within the meaning of Section 219 of the Code, and
rollover or transfer contributions made by or on behalf
of such individual to such plan from another qualified
plan, sponsored by an entity other than the Company or
an Affiliated Company) increased by (i) the aggregate
distributions made to such individual from such plan
during a five (5) year period ending on the
Determination Date, and (ii) the amount of any
contributions due as of the Determination Date
immediately following such Valuation Date;
b) Accrued Benefit. As of any Valuation Date, the
present value (computed on the basis of the
Assumptions) of the cumulative accrued benefit
(excluding the portion thereof which is attributable to
employee contributions which were deductible pursuant
to Section 219 of the Code, to rollover or transfer
contributions made by or on behalf of such individual
to such plan from another qualified plan sponsored by
an entity other than the Company or an Affiliated
Company, to proportional subsidies, or to ancillary
benefits) of an individual under a qualified defined
benefit plan increased by (i) the aggregate
distributions made to such individual from such plan
during a five (5) year period ending on the
Determination Date and (ii) the estimated benefit
accrued by such individual between such Valuation Date
and the Determination Date immediately following such
Valuation Date.
c) Aggregation Group. The group of qualified plans
maintained by the Company and each Affiliated Company
consisting of (i) each plan in which a Key Employee
participates and each other plan which enables a plan
in which a Key Employee participates to meet the
requirements of Sections 401(a)(4) or 410 of the Code,
or (ii) each plan in which a Key Employee participates,
each other plan which enables a plan in which a Key
Employee participates to meet the requirements of
Sections 401(a)(4) or 410 of the Code, and any other
plan which the Company elects to include as a part of
such group; provided, however, that the Company may not
elect to include a plan in such a group if its
inclusion would cause the group to fail to meet the
requirements of Sections 401(a)(4) and 410 of the Code.
d) Assumptions. For purposes of this Article, the
assumptions used to determine an actuarial equivalent
benefit shall be an interest rate assumption at an
annual rate of five percent (5%) and mortality
assumptions based upon the 1984 Unisex Pension Table.
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e) Compensation. An individual's earned income,
wages, salaries, and other amounts actually paid by the
Company or an Affiliated Company to such individual
during a Plan Year for personal services actually
rendered in the course of employment with the Company
or an Affiliated Company (subject to exclusion of
amounts specified by regulations promulgated under
Section 415 of the Code). In no event shall the amount
of a Participant's Compensation that is taken into
account for any Plan Year exceed the amount specified
in Section 401(a)(17) of the Code (or such larger
amount as the Secretary of the Treasury or his delegate
may determine for such Plan Year under such section.
f) Determination Date. For the first Plan Year of
any plan, the last day of such Plan Year, and for each
subsequent Plan Year of such plan, the last day of the
preceding Plan Year.
g) Former Key Employee. With respect to any Plan
Year, any individual who was a Key Employee in a
previous Plan Year but who is not a Key Employee with
respect to such Plan Year. For purposes of this
definition, a beneficiary (who would not otherwise be a
Key Employee) of a deceased former Key Employee shall
be deemed to be a Former Key Employee in substitution
for such deceased Former Key Employee.
h) Key Employee. With respect to any Plan Year, any
individual who at any time during such Plan Year or
during any of the four (4) Plan Years immediately
preceding such Plan Year was:
(i) an officer (within the meaning of
Section 416 of the Code) of the Company or an
Affiliated Company with Compensation greater than
fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for such Plan
Year,
(ii) one of the ten (10) employees with
Compensation greater than such amount and owning
the largest interests in the Company or an
Affiliated Company,
(iii) an owner of five percent (5%) or
more of the outstanding stock of the Company or an
Affiliated Company or of stock possessing five
percent (5%) or more of the total combined voting
power of all the stock of the Company or an
Affiliated Company, or
(iv) an employee whose Compensation (during
the calendar year including the Determination
Date) exceeded $150,000 and who was an owner of
one percent (1%) or more of the outstanding stock
of the Company or an Affiliated Company or of
stock possessing one percent (1%) or more of the
total combined voting power of all of the stock of
the Company or an Affiliated Company. For
purposes of this definition, (i) an individual
shall be deemed to own stock owned by others as
provided in Section 318 of the Code, (ii) a
beneficiary (who would not otherwise be a Key
Employee) of a deceased Key Employee shall be
deemed to be a Key Employee in
-38-
<PAGE>
substitution for such deceased Key
Employee, and (iii) the total number of Key
Employees who are officers of the Company and the
Affiliated Companies shall be limited to the fifty
(50) (or, if lesser, the greater of three (3) or
ten percent (10%) of the employees) officers with
the highest Compensation.
i) Non-Key Employee. An employee who is not a Key
Employee.
j) Highest Average Compensation. The highest annual
average of the taxable Compensation paid by the Company
or an Affiliated Company to an employee during five (5)
consecutive Plan Years, or during the maximum number of
such years during which the employee received taxable
Compensation, if less than five.
k) Plan Year. With respect to any plan, the annual
accounting period used by such plan for annual
reporting purposes.
l) Valuation Date. With respect to any Plan Year of
any defined contribution plan, the most recent date
within the twelve (12) month period ending on a
Determination Date as of which the trust fund
established under such plan was valued and the net
income (or loss) thereof allocated to participants'
accounts.
15.03 Top-Heavy Status. The Plan shall be deemed to be top-
heavy if, as of any Determination Date, (i) the sum of the
Account Balances of Participants who are Key Employees
exceeds sixty percent (60%) of the sum of the Account
Balances of all Participants (excluding in both cases the
Account Balances of all Former Key Employees and of those
former employees who have not performed any services for the
Company or any Affiliated Company at any time during the
five-year period ending on the Determination Date) unless
the Plan is part of an Aggregation Group or (ii) an
Aggregation Group including the Plan is top-heavy. An
Aggregation Group shall be deemed to be top-heavy as of a
Determination Date if the sum (computed in accordance with
Section 416(g)(2)(B) of the Code and the regulations
promulgated thereunder) of (i) the Accrued Benefits of Key
Employees under all defined contribution plans included in
the Aggregation Group and (ii) the Accrued Benefits of Key
Employees under all defined benefit plans included in the
Aggregation Group, exceeds sixty percent (60%) of the sum of
the Account Balances and the Accrued Benefit of all
individuals under such plans (excluding in both cases the
Account Balances and Accrued Benefit of all Former Key
Employees and of those former employees who have not
performed any services for the Company or any Affiliated
Company at any time during the five-year period ending on
the Determination Date).
-39-
<PAGE>
15.04 Minimum Contribution. If the Plan is determined to be
top-heavy for a Plan Year, the Company shall make an
additional contribution to the Plan on behalf of each
employee who is a participant of the Plan, who is a Non-Key
Employee , and who has not terminated his employment as of
the last day of such Plan Year equal to that amount
which, when added to the aggregate amount of contributions and
forfeitures allocated to such Participant's accounts for
such Plan Year, will cause the sum of all such contributions
and forfeitures to equal at least (i) three percent (3%) of
such Participant's Compensation for such Plan Year if the
Participant does not participate in a defined benefit plan
maintained by the Company or an Affiliated Company during
such Plan Year or (ii) five percent (5%) of such
Participant's Compensation for such Plan Year if the
Participant does participate in a defined benefit plan
maintained by the Company or an Affiliated Company during
such Plan Year.
15.05 Adjustment to Combined Limitation. In each Plan Year
in which the Plan is determined to be top-heavy, the
adjustment described in Section 416(h) shall apply in
determining the limitations imposed by Section 415(e) of the
Code.
15.06 Termination of Top-Heavy Status. If the Plan has been
deemed to be top-heavy, the provisions of this Article shall
cease to apply to the Plan effective as of the day following
the Determination Date on which it is determined to no
longer be top-heavy.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed this 20th day of February 1996 to be effective as of
January 1, 1996.
Attest: POLAROID CORPORATION
/s/ Richard F. deLima By /s/ Gary T. DiCamillo
- ----------------------- ---------------------------
Secretary Chief Executive Officer
-41-
<PAGE>
ADDENDUM A
Each of the following shall be considered a bona fide immediate
and heavy financial need for purposes of Hardship Withdrawals
under Section 5.02:
(A) the securing of a primary residence for the
Participant (either by purchase or renting);
(B) extraordinary medical expenses of the Participant
or a Relative of the Participant not covered by any
employer-sponsored benefit plan;
(C) the costs of college or other post-secondary
education (for the Participant, his Spouse, or
children);
(D) the costs or expenses to avoid eviction or loss of
the Participant's primary residence.
-42-
<PAGE>
ADDENDUM B
Each of the following shall be considered a bona fide immediate
and heavy financial need for purposes of Specific Restricted
Withdrawals under Section 5.02:
(A) the securing of a primary residence for the
Participant (either by purchase or renting);
(B) extraordinary medical expenses of the Participant
or a Relative of the Participant not covered by any
employer-sponsored benefit plan;
(C) the costs of college or other post-secondary
education (for the Participant, his Spouse, or
children);
(D) the costs or expenses to avoid eviction or loss of
the Participant's primary residence;
(E) taxes for which the Participant has received an
assessment or deficiency notice;
(F) legal expenses related to the Participant's
divorce or marital settlement;
(G) the loss of utilities at the Participant's primary
residence;
(H) funeral expenses for a deceased Relative; and
(I) any other event or circumstance determined by the
Plan Administrator to be a Significant Financial Need
and added to this schedule upon approval.
-43-
Exhibit 5
[Polaroid logo]
Thomas M. Lemberg Polaroid Corporation
Senior Vice President, 549 Technology Square
General Counsel and Secretary Cambridge, MA 02139
617 386 3228
617 386 3263 / Fax
[email protected]
July 14, 1997
Polaroid Corporation
549 Technology Square
Cambridge, MA 02139
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of
Polaroid Corporation, a Delaware corporation (the "Company"), and
I have acted as counsel to the Company, in connection with its
Registration Statement on Form S-8 (the "Registration Statement")
relating to the issuance by the Company of 300,000 shares of the
Company's Common Stock, par value $1.00 per share (the "Shares").
I have examined the corporate proceedings of the Company in
connection with the Registration Statement and the transactions
contemplated thereby, as well as the Registration Statement and
the exhibits thereto. I have also examined originals or copies,
certified or otherwise identified to my satisfaction, of such
other documents, evidence of corporate action and other
instruments and have made such other investigations of law and
fact as I have deemed necessary or appropriate for the purpose of
this opinion. As to questions of fact relevant to this opinion, I
have relied upon certificates or written statements from officers
and other appropriate representatives of the Company and its
subsidiaries or public officials. In all such examinations, I
have assumed the genuineness of all signatures, the authority to
sign, and the authenticity of all documents submitted to me as
originals. I have also assumed the conformity with the originals
of all documents submitted to me as copies.
Based upon and subject to the foregoing, and to the
qualifications hereinafter specified, I am of the opinion,
assuming effectiveness of the Registration Statement under the
Securities Act of 1933, as amended, that:
The issuance of the Shares has been duly
authorized and, when issued and sold as
contemplated by the Registration Statement, such
Shares will be legally issued, fully paid and non-
assessable.
The opinion set forth herein relates solely to the laws of
the Commonwealth of Massachusetts, the General Corporation Law of
the State of Delaware and the federal laws of the United States.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
/s/ Thomas M. Lemberg
Thomas M. Lemberg
Exhibit 15
----------
The Board of Directors
Polaroid Corporation
Ladies and Gentlemen:
Re: Registration Statement on Form S-8 for The Polaroid Profit Sharing
Retirement Plan.
With respect to the subject registration statement, we acknowledge our
awareness of the use therein of our report dated April 15, 1997,
related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report
is not considered part of a registration statement prepared or
certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
July 28, 1997
Exhibit 23.1
------------
Independent Auditor's Consent
-----------------------------
The Board of Directors
Polaroid Corporation:
We consent to the use of our reports dated January 28, 1997 on the
consolidated financial statements and financial statement schedule of
Polaroid Corporation and subsidiary companies as of December 31, 1996
and 1995 and for each of the years in the three-year period ended
December 31, 1996 incorporated herein by reference, and our report
dated June 6, 1997 on the financial statements of Polaroid Profit Sharing
Retirement Plan as of December 31, 1996 and 1995 and each of the years
then included herein.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
July 28, 1997
Exhibit 24
POWER OF ATTORNEY
The person whose signature appears below hereby appoints William
J. O'Neill, Jr., Executive Vice President and Chief Financial Officer,
and Thomas M. Lemberg, Senior Vice President, General Counsel and
Secretary, his true and lawful attorney-in-fact with authority together
or individually to execute in the name of such signatory, and with
authority to file with the Securities and Exchange Commission,
Registration Statements on Form S-8 relating to the Polaroid Board of
s Stock Plan, Polaroid Elective Deferred Compensation Plan, Polaroid
Profit Sharing Retirement Plan and the Polaroid Stock Incentive Plan,
any and all amendments to the Registration Statements on Form S-8,
together with any exhibits thereto and other documents therewith,
necessary or advisable to enable Polaroid Corporation to comply with
the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission
in respect thereof, which amendments may make such other changes in the
Registration Statements on Form S-8 as the aforesaid attorney-in-fact
executing the same deems appropriate.
/s/ Ralph Gomory July 15, 1997
- --------------------------- --------------
Ralph Gomory
/s/ Frank S. Jones July 9, 1997
- --------------------------- --------------
Frank S. Jones
/s/ John W. Loose July 17, 1997
- --------------------------- --------------
John W. Loose
/s/ Albin F. Moschner July 14, 1997
- --------------------------- --------------
Albin F. Moschner
/s/ Kenneth H. Olsen July 11, 1997
- --------------------------- --------------
Kenneth H. Olsen
/s/ Ronald F. Olsen July 9, 1997
- --------------------------- --------------
Ronald F. Olsen
/s/ Ralph Z. Sorenson July 9, 1997
- --------------------------- --------------
Ralph Z. Sorenson
/s/ Delbert C. Staley July 9, 1997
- --------------------------- --------------
Delbert C. Staley
/s/ Bernee D.L. Strom July 9, 1997
- --------------------------- --------------
Bernee D.L. Strom
/s/ Alfred M. Zeien July 10, 1997
- --------------------------- --------------
Alfred M. Zeien
