Registration No.
----------
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NATIONAL SANITARY SUPPLY COMPANY
(Exact name of issuer as specified in its Charter)
Delaware 31-1079482
(State of Incorporation) (I.R.S. Employer Identification No.)
2900 Chemed Center, 255 East Fifth Street, Cincinnati, OH 45202
(Address of Principal Executive Offices) (Zip Code)
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THE NATIONAL SANITARY SUPPLY COMPANY
EMPLOYEES THRIFT AND PROFIT SHARING PLAN
(Full Title of the Plan)
---------------------------------------------------------------
Naomi C. Dallob, Esq.
Secretary and General Counsel
National Sanitary Supply Company
2900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
(513) 762-6500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
- ------------------------------------------------------------------------------
Exhibit Index at page 3
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CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities Registered Offering Price Offering Price* Registration
to be Share* Price* Fee Fee
Registered
Common Stock, 150,000 $12.375 $1,856,250 $640.09
$1.00 par value
- -------------------------------------------------------------------------------
Approximate date of proposed commencement of sales hereunder: As soon as
practicable after the effective date of this Registration Statement. 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 plan described herein.
* Estimated solely for the purpose of calculating registration fee. Based
pursuant to Rule 457(c) and 457(f)(1), on the average of the high and low
prices of the common stock of National Sanitary Supply Company on the
Nasdaq National Market on September 28, 1994, a date within 5 days of the
date on which this Registration Statement is filed.
<PAGE>
PART I
INFORMATION REQUESTED IN THE SECTION 10(a) PROSPECTUS
The information specified in Part I of Form S-8 is set forth in a single
document, entitled "Prospectus," which constitutes a part of the Section 10(a)
Prospectus to which this Registration Statement relates but which is not filed
herewith.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- -------- ----------------------------------------
National Sanitary Supply Company (the "Registrant") hereby states that the
documents listed in (a) through (e) below are incorporated by reference in this
Registration Statement, and further states that all documents subsequently filed
by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents.
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act since December 31, 1993.
(c) The Registrant's Form 11-K filed concurrently herewith.
(d) The Registrant's Proxy Statement filed pursuant to Section 14 of the
Exchange Act in connection with the Company's latest annual meeting
of stockholders.
(e) The description of the Registrant's Common Stock set forth on page
29 of the Prospectus dated June 17, 1986, filed as part of
Registration No. 33-5604.
Item 4. Description of Securities.
- -------- --------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
- ------- ---------------------------------------
Legal matters in connection with the issuance of the Company's Common Stock
offered hereby have been passed upon by Naomi C. Dallob, Esq., 2600 Chemed
Center, 255 East Fifth St., Cincinnati, Ohio 45202. Ms. Dallob is Secretary
and General Counsel, a director and a stockholder of the Company.
<PAGE>
Item 6. Indemnification of Directors and Officers.
- ------- ------------------------------------------
The Certificate of Incorporation and By-laws of the Company, and separate
Indemnity Agreements, provide for the indemnification of each director and
officer of the Company in connection with any claim, action, suit or proceeding
brought or threatened by reason of his or her position with the Company. In
addition, the General Corporation Law of the State of Delaware ("Delaware Law")
permits the Company to indemnify its directors, officers and others against
judgments, fines, amounts paid in settlement and attorneys' fees resulting from
various types of legal actions or proceedings if the actions of the party being
indemnified meet the standards of conduct specified in the Delaware Law.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or controlling persons of the
Company pursuant to the provisions referred to above or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
Item 7. Exemption From Registration Claimed.
- ------- ------------------------------------
Not Applicable.
<PAGE>
Item 8. Exhibits.
- ------- ---------
<TABLE>
<CAPTION>
Page No. or Incorporation By Reference
--------------------------------------
Exhibit No. Description File Number and Filing Date
- ----------- ----------- ---------------------------
<C> <S> <C>
3.(i)(a) Certificate of Incorporation of Chemed S-1 Registration
Supply, Inc., dated September 19, 1983 No. 33-5604, 5/12/86
3.(i)(b) Certificate of Merger of La-Ru Truck S-1 Registration
Rental Company, Inc. into Chemed Supply, No. 33-5604, 5/12/86
Inc., dated November 15, 1983.
3.(i)(c) Certificate of Amendment of the Certificate Form 10-Q
of Incorporation, as amended, of National 3/28/94
Sanitary Supply Company, dated July 13, 1987.
3.(ii) Amended and Restated By-Laws of the Company Form 10-K
as of November 3, 1993. 3/28/94
4.1 National Sanitary Supply Company Employees Filed Herewith
Thrift and Profit Sharing Plan
4.2 Trust Agreement of the Thrift and Profit Filed Herewith
Sharing Plan.
5 Opinion letter as to legality of the Filed Herewith
securities being registered.
23 Consent of Price Waterhouse, L.L.P., Filed Herewith
independent certified public accountants.
24 Powers of Attorney. Filed Herewith
- -------------------------------
Registrant undertakes to submit to the Plan and any amendment thereto to the
Internal Revenue Service in a timely manner and will make all changes it
requires in order to qualify the Plan.
</TABLE>
<PAGE>
Item 9. Undertakings.
- ------- -------------
A. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding)is asserted by such director, officer
or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<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 Cincinnati, State of Ohio on September 27, 1994.
NATIONAL SANITARY SUPPLY COMPANY
By: /s/ Paul C. Voet
--------------------------------
Paul C. Voet, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
/s/ Edward L. Hutton
- --------------------------- Chairman and a Director September 27, 1994
Edward L. Hutton (Principal Executive Officer)
/s/ Paul C. Voet
- --------------------------- President & Chief Executive September 27, 1994
Paul C. Voet Officer and a Director
(Principal Executive Officer)
/s/ Gary H. Sander
- --------------------------- Vice President, Treasurer September 27, 1994
Gary H. Sander Chief Financial Officer, and
a Director
(Principal Accounting &
Financial Officer)
DIRECTORS:
Arthur J. Bennert, Jr. *
James A. Cunningham * Thomas C. Hutton *
Naomi C. Dallob * Charles O. Lane *
Charles H. Erhart, Jr. * Sandra E. Laney *
Robert B. Garber Kevin J. McNamara *
N. Gilliatt * Timothy S. O'Toole *
J. Peter Grace * D. Walter Robbins, Jr. *
Will J. Hoekman * Jerome E. Schnee *
Anthony C. Hutton * Kenneth F. Vuylsteke *
* Naomi C. Dallob, General Counsel and Secretary of the Company, by signing
her name hereto signs this document on behalf of each of the persons indicated
above pursuant to powers of attorney duly executed by such persons and filed
with the Securities and Exchange Commission.
September 27, 1994 /s/ Naomi C. Dallob
- ------------------ -------------------------------------
Date Naomi C. Dallob
(Attorney-in-Fact and a Director)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following members of the
National Sanitary Supply Company Employees Thrift and Profit Sharing Plan
Administration Committee on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Rose Rinard
- -------------------------- Member September 27, 1994
Rose Rinard
/s/ Gary H. Sander
- ------------------------- Member September 27, 1994
Gary H. Sander
/s/ David J. Lohbeck
- ------------------------- Member September 27, 1994
David J. Lohbeck
/s/ Michael G. Moncrief
- ------------------------- Member September 27, 1994
Michael G. Moncrief
/s/ Thomas Cruz
- ------------------------ Member September 27, 1994
Thomas Cruz
<TABLE>
<CAPTION>
Index to Exhibits
Page No. or Incorporation By Reference
--------------------------------------
Exhibit No. Description File Number and Filing Date
- ----------- ----------- ---------------------------
<C> <S> <C>
3.(i)(a) Certificate of Incorporation of Chemed S-1 Registration
Supply, Inc., dated September 19, 1983 No. 33-5604, 5/12/86
3.(i)(b) Certificate of Merger of La-Ru Truck S-1 Registration
Rental Company, Inc. into Chemed Supply No. 33-5604, 5/12/86
Inc., dated November 15, 1983.
3.(i)(c) Certificate of Amendment of the Certificate Form 10-Q
of Incorporation, as amended, of National 3/28/94
Sanitary Supply Company, dated July 13, 1987.
3.(ii) Amended and Restated By-Laws of the Form 10-K
company as of November 3, 1993. 3/28/94
4.1 National Sanitary Supply Company Employees Filed Herewith
Thrift and Profit Sharing Plan
4.2 Trust Agreement of the Thrift and Profit Filed Herewith
Sharing Plan.
5 Opinion letter as to legality of the Filed Herewith
securities being registered.
23 Consent of Price Waterhouse, L.L.P., Filed Herewith
independent certified public accountants.
24 Powers of Attorney. Filed Herewith
</TABLE>
<PAGE>
JHW 9/19/94
AS FILED WITH THE IRS
ON SEPTEMBER 30, 1994
NATIONAL SANITARY SUPPLY COMPANY
________________________________________
EMPLOYEES THRIFT AND PROFIT SHARING PLAN
________________________________________
Adopted Effective July 1, 1987
Amended and Restated Effective January 1, 1989,
Including Amendments Effective Through October 1, 1994
And Representing the Merger of the
National Sanitary Supply Company Profit Sharing Plan into the
National Sanitary Supply Company Savings and Investment Plan
Effective October 1, 1994
<PAGE>
NATIONAL SANITARY SUPPLY COMPANY
EMPLOYEES THRIFT AND PROFIT SHARING PLAN
TABLE OF CONTENTS
INTRODUCTION
Article I Name of Plan
1.1 Name of Plan
1.2 Profit Sharing Plan
1.3 Qualifying Employer Securities
1.4 Securities Registration
Article II Definitions
2.1 Account or Accounts
2.2 Affiliated Company
2.3 Age
2.4 Basic Employee Contributions
2.5 Basic Employer Contributions
2.6 Beneficiary
2.7 Chemed
2.8 Compensation
2.9 Disabled Participant
2.10 Early Retirement Date
2.11 Effective Date
2.12 Elapsed Time Hours of Service
2.13 Eligibility Computation Period
2.14 Eligible Employee
2.15 Employee
2.16 Employee Contributions
2.17 Employee Contribution Account
2.18 Employer
2.19 Employer Contributions
2.20 Employer Contribution Account
2.21 Employing Unit
2.22 Employment Date
2.23 Entry Date
2.24 ERISA
2.25 401(k) Contribution
2.26 401(k) Contribution Account
2.27 Highly Compensated Employee
2.28 Hours of Service
2.29 Inactive Participant
2.30 Incentive Committee
2.31 Internal Revenue Code or Code
2.32 Investment Committee
2.33 Investment Fund
2.34 Late Retirement Date
2.35 Leased Employee
2.36 Limitation Year
<PAGE>
2.37 NSS
2.38 Net Gain and Net Loss
2.39 Net Profits
2.40 Normal Retirement Date
2.41 One Year Break in Service
2.42 Participant
2.43 Plan
2.44 Plan Administrator
2.45 Plan Quarter
2.46 Plan Year
2.47 Profit Sharing Contributions
2.48 Profit Sharing Contribution Account
2.49 Profit Sharing Plans
2.50 Related Company
2.51 Retired Participant
2.52 Spouse
2.53 Supplemental Employee Contribution
2.54 Supplemental Employer Contribution
2.55 Temporary Employee
2.56 Thrift Contribution
2.57 Thrift Contribution Account
2.58 Totally and Permanently Disabled
2.59 Trust Agreement
2.60 Trust Fund
2.61 Trustee
2.62 Union Employee
2.63 Valuation Date
2.64 Years of Service
Article III Participation
3.1 Eligibility for Participation
3.2 Participation Date; Application for Participation
3.3 Designation of Beneficiary
3.4 Resumption of Service With an Employing Unit
3.5 Change in Employment Status; Transfer to Affiliated
Company
3.6 Transfer of Employment to Related Company
3.7 Suspension of Participation
3.8 Employment by Employer: Service with Newly Acquired
Entities; Records of Employer
3.9 Plan Binding
Article IV Contributions
4.1 Establishment of Accounts
4.2 Basic Employee Contribution
4.3 Supplemental Employee Contributions
4.4 Method for Effecting Employee Contributions
4.5 Changes in Employee Contributions
4.6 Limitations on Employee Contributions
4.7 Credits to Employee Contribution Accounts
4.8 Employer Contributions
<PAGE>
4.9 Allocation of Employer Contributions
4.10 Profit Sharing Contributions
4.11 Limitations on Employer and Profit Sharing
Contributions
4.12 Compensation Limitations
Article V Trustee; Investments
5.1 Trustee Selection; Trust Agreement
5.2 Powers and Duties of the Trustee
5.3 Appointment and Powers and Duties of Investment
Committee
5.4 Valuation of Trust Fund Assets
5.5 Composition of the Trust Fund
5.6 Investment of Contributions
5.7 Change of Investment Election
5.8 Transfer of Funds
5.9 Participant NSS Stock Voting and Other Rights
5.10 Adjustment Provisions
5.11 Exchange or Tender Offers
5.12 1934 Act 516(b) Regulation Exemption
Article VI Allocation of Profit and Loss of Trust Fund to
Participant Accounts
6.1 Date of Valuation
6.2 Adjustment of Accounts as of Valuation Dates
6.3 Allocation of Profit and Loss
6.4 Statement of Account
Article VII Code Section 402(g), Section 401(k), Section 401(m)
Limitations
7.1 Definitions
7.2 Code Section 402(g) $7,000 Limit
7.3 Code Section 401(k) ADP Test
7.4 Code Section 401(a)(4) Excess Match Test
7.5 Code Section 401(m) ACP Test
7.6 Code Section 401(m) Multiple Use Test
7.7 Special Senior HCE Family Group Participant Rules
7.8 Special Rules
Article VIII Code Section 415 Contribution Limitations
8.1 Definitions
8.2 Limitation If A Participant Does Not Participant In
Any Other Plan
8.3 Limitation If A Participant Participates In Another
Defined Contribution Plan
8.4 Limitation If The Participant Participates in a
Defined Benefit Plan
8.5 Required Aggregation of Plans
<PAGE>
8.6 Disposition of Excess Amounts
8.7 Limitation on Subsequent Employer Contributions
Article IX Code Section 416 Top-Heavy Provisions
9.1 Definitions
9.2 Top-Heavy and Super-Top-Heavy Status
9.3 Minimum Contribution
9.4 Minimum Vesting
9.5 Modification of Code Section 415 Limits
Article X Loans and Withdrawals
10.1 Withdrawals from Thrift Contribution Accounts
10.2 Withdrawals from 401(k) Contribution Accounts and
Employer Contribution Accounts
10.3 Effects of Withdrawals
10.4 Withdrawals after Normal Retirement Date
10.5 Payment of Withdrawals
10.6 No Withdrawals From Profit Sharing Contribution
Accounts
10.7 Loans - General Rules
10.8 Aggregating Loans when the Employer Maintains Another
Plan
Article XI Benefit Provisions
11.1 Amount of a Participant's Interest in His Accounts
11.2 Normal Retirement
11.3 Late Retirement
11.4 Early Retirement
11.5 In-Service Requirement
11.6 Total and Permanent Disability
11.7 Death
11.8 Other Termination of Service
11.9 Forfeitures
11.10 Separate Employer Contribution Accounts for
Participants Who Incur Forfeitures
11.11 Additional Employer Contributions to Restore
Forfeited Amounts
11.12 CODA Separation From Service Distribution Limitation
Article XII Methods of Payment
12.1 Joint and Survivor Annuity; Preretirement Survivor
Annuity
12.2 Methods of Payment
12.3 Installment Distributions; Deferred Lump Sum
Distributions
12.4 Duty to Provide Forms and Proofs
12.5 Duty to Provide Mailing Address
12.6 Benefit Payments in the Event of Incapacity
<PAGE>
12.7 Distributions in Kind
12.8 Assignment of Benefits
12.9 When Benefit Payments Begin
12.10 TEFRA 242(b) Election
12.11 Participant Notice and Election Requirements
12.12 Merged Plans
Article XIII Qualified Joint and Survivor and Preretirement
Survivor Annuities
13.1 Applicability
13.2 Definitions
13.3 Qualified Joint and Survivor Annuity
13.4 Qualified Preretirement Survivor Annuity
13.5 Notice Requirements
Article XIV Portability
14.1 Transfer to Qualified Plan
14.2 Transfer to Individual Retirement Account
14.3 Transfer or Rollover from Qualified Plans
14.4 Restricted Participation
14.5 Direct Rollovers
Article XV Plan Administration
15.1 Plan Administrator
15.2 Term of Office
15.3 General Duties
15.4 Retention of Advisors
15.5 Directions to the Trustee
15.6 Limitation on Plan Administrator's Powers
15.7 Claims and Appeal Procedure
15.8 Delegation of Duties and Powers
Article XVI Amendments and Termination
16.1 Amendments to the Plan by NSS
16.2 Amendments Affecting Non-Forfeitable Interests
16.3 Change in Vesting Schedule
16.4 Complete Discontinuance of Employer Contributions
16.5 Termination of Plan; Procedure on Termination
16.6 Plan Amendment Procedures
16.7 Withdrawal by an Employer
16.8 CODA Plan Termination Distribution Limitation
Article XVII Miscellaneous
17.1 Plan Not Contract of Employment
17.2 Records of the Employer
17.3 Gender and Number
17.4 Headings
17.5 Law Governing
<PAGE>
17.6 Successor Company
17.7 Merger or Consolidation of Plan Assets
17.8 Indemnification
17.9 Expenses of Administration
17.10 Allocation of Fiduciary Responsibilities
17.11 Severability
17.12 Exclusive Benefit
SIGNATURE PAGES
Appendix A--Plan and Employer History
Appendix B--Article I Name of Plan
Appendix C--Article II Definitions
Appendix D--Article III Eligibility
Appendix E--Article IV Contributions
Appendix F--Article V Trustee; Investments
Appendix G--Article X Loans and Withdrawals
Appendix H--Article XI Benefit Provisions
Appendix I--Article XII Methods of Payment
<PAGE>
NATIONAL SANITARY SUPPLY COMPANY
EMPLOYEES THRIFT AND PROFIT SHARING PLAN
_________________________________________________________________
INTRODUCTION
The National Sanitary Supply Company Savings and Investment
Plan (the "Savings Plan") was adopted by the Board of Directors of
National Sanitary Supply Company effective July 1, 1987 and has
been amended several times since then. The most recent of these
amendments were effective October 1, 1994, which included the
merger, effective October 1, 1994, of the National Sanitary Supply
Company Profit Sharing Plan into the Savings Plan and the renaming
of the Savings Plan to be the National Sanitary Supply Company
Employees Thrift and Profit Sharing Plan (the "Plan").
The purpose of the Plan is to encourage employees of the
Plan's designated Employing Units to adopt a regular savings
program and to enable those employees to participate in the profits
of their employers. The Plan is funded through employee
contributions made by payroll deductions and through employer
contributions out of current or accumulated profits. The Plan
contains a cash or deferred arrangement, referred to in the Plan as
401(k) Contributions, described in Section 401(k) of the Internal
Revenue Code of 1986, as amended.
It is intended that this Plan, together with the Trust
Agreement entered into between National Sanitary Supply Company and
the Trustee, shall meet all of the requirements of the Internal
Revenue Code of 1986, as amended, and the Employee Retirement
Income Security Act of 1974, as amended, and all formal regulations
issued thereunder.
ARTICLE I -- NAME OF PLAN
1.1 Name of Plan. The Plan shall be known as the
"National Sanitary Supply Company Employees Thrift and Profit
Sharing Plan".
1.2 Profit Sharing Plan. The Plan is designated as a
profit sharing plan, as such designation is required under Section
401(a)(27)(B) of the Internal Revenue Code, with a cash or deferred
arrangement described in Section 401(k) of the Internal Revenue
Code.
1.3 Qualifying Employer Securities. The Plan is an
eligible individual account plan, as that term is defined in
Section 407(d)(3) of ERISA. The Trustee may invest the assets of
<PAGE>
the Trust Fund in NSS common stock as qualifying employer
securities, as defined in Section 407(d)(5) of ERISA, in accordance
with the exemptions provided in Sections 407(b) and 404(a)(2) of
ERISA. The Plan is designed and intended to permit the investment
of its assets in NSS common stock as qualifying employer
securities.
1.4 Securities Registration. The Plan is a voluntary and
contributory plan which permits employee contributions to purchase
NSS common stock as securities of the employer. The sales of both
the participation interests of the Plan and NSS common stock under
the Plan (as securities for federal securities law purposes) have
been registered under the Securities Act of 1933 (using Form S-8).
ARTICLE II -- DEFINITIONS
For purposes of this Plan, unless the context requires
otherwise, the following words and phrases shall have the meanings
indicated:
2.1 "Account" or "Accounts" shall mean any or all of the
Employer Contribution Account, the Profit Sharing Contribution
Account, the Employee Contribution Account, the 401(k) Contribution
Account or the Thrift Contribution Account, as the context
requires.
2.2 "Affiliated Company" shall mean any entity (other than
the Employer) which, when considered with the Employer,
constitutes: (a) a controlled group of corporations (within the
meaning of Section 414(b) of the Code); (b) a group of trades or
businesses under common control (within the meaning of Section
414(c) of the Code); (c) an affiliated service group (within the
meaning of Section 414(m) of the Code); or (d) an entity required
to be aggregated with the Employer under Section 414(o) of the
Code.
2.3 "Age" shall mean the age of the Employee or
Participant as of his last birthday.
2.4 "Basic Employee Contribution" shall mean the mandatory
contribution made by a Participant to his Employee Contribution
Account in an amount equal to any integral percentage up to 6% of
his Compensation.
2.5 "Basic Employer Contribution" shall mean the
contribution made by the Employer under Article IV to Participants'
Employer Contribution Accounts.
2.6 "Beneficiary" shall mean the Participant's Spouse. If
the Participant does not have a Spouse, or the Participant has
designated a non-Spouse beneficiary pursuant to a Qualified
<PAGE>
Election (as defined in Article XIII), the Participant's
"Beneficiary" shall mean any person or entity designated by the
Participant in the form and manner the Plan Administrator may
prescribe or, in the absence of such designation or an effective
designation, the Participant's estate.
2.7 "Chemed" shall mean Chemed Corporation, a Delaware
corporation with its principal place of business in Cincinnati,
Ohio.
2.8 "Compensation" shall mean the gross earnings of an
Employee from an Employing Unit for the Plan Year as set forth in
his U.S. Treasury Department Form W-2 or its equivalent.
Compensation shall not include (i) Employer Contributions, (ii) any
other contributions to, or distributions from, any employee benefit
plan, including the Plan, (iii) any program of employee benefits
payable other than in cash (including, but not limited to, income
realized by the grant or exercise of stock options), (iv) prizes or
contest awards received from or under a program sponsored by an
Employee Unit, (v) expense allowances, and (v) any expenses
reimbursed by an Employing Unit (including, but not limited to,
moving expense allowances and cost of living allowances paid to
foreign-based Employees). Compensation shall include any amount
contributed by an Employing Unit on behalf of the Employee pursuant
to a salary reduction agreement and which is not includible in the
Employee's gross income under Section 125 or 402(a)(8) of the
Internal Revenue Code. Compensation, as determined pursuant to the
preceding provisions, shall be subject to the maximum compensation
limitations of Section 4.12.
2.9 "Disabled Participant" shall mean any Participant who
is Totally and Permanently Disabled.
2.10 "Early Retirement Date" shall mean any date on which
the Participant's employment by the Employer terminates for any
reason other than death and which such date is coincident with or
next following the date (i) on which a Participant reaches Age 55
and completes ten Years of Service and (ii) before the Participant
reaches his Normal Retirement Date.
2.11 "Effective Date" shall mean July 1, 1987.
2.12 "Elapsed Time Hours of Service" shall mean for any
Employee the hours based on the following equivalency: Each
calendar month of employment for which at least one Hour of Service
is credited is treated as 190 Elapsed Time Hours of Service.
2.13 "Eligibility Computation Period" shall mean a twelve-
consecutive-month period beginning on the Employee's Employment
Date. Subsequent Eligibility Computation Periods shall begin on
the first day of the Plan Year which includes the first anniversary
date of the Employee's Employment Date. If the Employee does incur
<PAGE>
a One Year Break in Service, then subsequent Eligibility
Computation Periods shall begin on the day the Employee performs an
Hour of Service after incurring the One Year Break in Service.
2.14 "Eligible Employee" shall mean each Employee who: (i)
is employed by an Employing Unit on a regular, full-time basis; and
(ii) is not a Union Employee, Leased Employee or Temporary
Employee. For the purpose of this Section, employment by an
Employing Unit on a regular, full-time basis shall mean employment
by an Employing Unit with a scheduled work week that calls for the
performance of not less than one thousand Hours of Service during
each Eligibility Computation Period determined in accordance with
Section 2.28.
2.15 "Employee" shall mean each common law employee and
Leased Employee of an Employer or an Affiliated Company.
2.16 "Employee Contributions" shall mean the aggregate of
Basic Employee Contributions and Supplemental Employee
Contributions.
2.17 "Employee Contribution Account" shall mean either or
both of a Participant's 401(k) Contribution Account and Thrift
Contribution Account.
2.18 "Employer" shall mean NSS and any Affiliated Company
designated an Employing Unit under this Plan.
2.19 "Employer Contributions" shall mean the aggregate of
Basic Employer Contributions and Supplemental Employer
Contributions.
2.20 "Employer Contribution Account" shall mean the
separate account established for a Participant pursuant to Article
IV to receive the Participant's share of Employer Contributions.
2.21 "Employing Unit" shall mean NSS and those divisions,
subsidiaries and Affiliated Companies which shall be authorized by
the Board of Directors of NSS to participate in the Plan and, in
the case of a corporation, which shall have adopted the Plan.
2.22 "Employment Date" shall mean the date an Employee
first performs an Hour of Service.
2.23 "Entry Date" shall mean the first day of the first
payroll period coincident with or immediately following the first
day of each Plan Quarter or any other date specified by NSS with
respect to an Employing Unit.
2.24 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
<PAGE>
2.25 "401(k) Contribution" shall mean the contribution
effected pursuant to Article IV by a Participant to his 401(k)
Contribution Account.
2.26 "401(k) Contribution Account" shall mean the separate
Account established for a Participant pursuant to Article IV to
receive his 401(k) Contributions.
2.27 "Highly Compensated Employee" shall have the meaning
as so defined in Article VII.
2.28 "Hours of Service" shall mean for any Employee the
hours described in the following provisions:
(a) Paid Service. Each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for an
Employer or an Affiliated Company. These hours shall be credited
at the time the duties are performed.
(b) Paid Non-Service. Each hour for which an
Employee is paid, or entitled to payment, by an Employer or an
Affiliated Company on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty
or leave of absence. No more than 501 hours shall be credited
hereunder for any single continuous period (whether or not the
period extends occurs in a single computation period).
(c) Back Pay. Each hour for which back pay,
irrespective of mitigation of damages, is either awarded or agreed
to by an Employer or an Affiliated Company. The same hours shall
not be credited both under subsection (a) or subsection (b), as the
case may be, and under this subsection (c).
The nature and extent of such Hours of Service shall be determined
pursuant to DOL Regulation Section 2530.200b-2, which are
incorporated herein by reference.
Nothing in this subsection shall be construed to alter, amend,
modify, invalidate, impair or supersede any law of the United
States or any rule or regulation issued under any such law. The
nature and extent of any credit for Hours of Service shall be
determined under such law.
2.29 "Inactive Participant" shall mean a Participant who:
(i) ceases to be an Eligible Employee (without regard to the
service requirement thereof) but remains in the service of the
Employer or an Affiliated Company, or (ii) ceases making Employee
Contributions.
2.30 "Incentive Committee" shall mean the Committee
designated by the Board of Directors of NSS to administer the 1986
Stock Incentive Plan of NSS.
<PAGE>
2.31 "Internal Revenue Code" or "Code" shall mean the
Internal Revenue Code of 1986, as amended.
2.32 "Investment Committee" shall mean the Committee
appointed in by the Board of Directors of NSS to manage the
investment of the Trust Fund.
2.33 "Investment Fund" shall mean the NSS Stock Fund and
the Plan's various General Funds, as those terms are defined in
Article V.
2.34 "Late Retirement Date" shall mean the date of
termination of a Participant's service with the Employer for any
reason other than death where the termination occurs subsequent to
the Participant's Normal Retirement Date.
2.35 "Leased Employee" shall mean, with respect to the
recipient Employer or Affiliated Company, a person as defined in
Section 414(n) of the Code who, under an agreement between such
recipient and any other person, has performed services for the
recipient Employer or Affiliated Company (or for such recipient and
related persons determined in accordance with Section 414(n)(6) of
the Code) on a substantially full time basis for a period of at
least one year and such services are of a type historically
performed by employees in the business field of the recipient. A
Leased Employee as used for purposes of the Plan also shall include
an individual who is considered an employee for purposes of Section
414(o) of the Code. A Leased Employee shall not be considered an
employee of the recipient if: (a) the Leased Employee is covered by
a money purchase plan providing: (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as
defined in Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125,
Section 402(a)(8), Section 402(h) or Section 403(b) of the Code;
(2) immediate participation; and (3) full and immediate vesting;
and (b) Leased Employees do not constitute more than 20 percent of
the recipient's nonhighly compensated workforce.
2.36 "Limitation Year" shall mean the Plan Year.
2.37 "NSS" shall mean National Sanitary Supply Company, a
Delaware corporation with its principal place of business in
Cincinnati, Ohio.
2.38 "Net Gain" and "Net Loss" shall mean the increases
and decreases in the value of the Trust Fund and each Investment
Fund between Valuation Dates.
2.39 "Net Profits" shall mean the current and accumulated
net profits of NSS and its consolidated subsidiaries. This
calculation shall be made in accordance with NSS' regular
accounting practices by deducting from its gross income all costs,
<PAGE>
expenses and charges incurred by it, but without provision for
Federal income taxes and without deduction of its contribution to
the Plan.
2.40 "Normal Retirement Date" shall mean the first day of
the month coincident with or next following the date on which a
Participant reaches Age 65.
2.41 "One Year Break in Service" shall mean for any
Employee each Plan Year during which the Employee is not credited
with at least 501 Elapsed Time Hours of Service. Solely for
purposes of determining whether an Employee has incurred a One Year
Break in Service, additional Elapsed Time Hours of Service shall be
credited to the Employee as provided herein. In the case of an
Employee's Maternity or Paternity Absence (defined herein), the
Employee will be credited with Elapsed Time Hours of Service which
otherwise would normally have been credited to the Employee but for
the Maternity or Paternity Absence or, if the foregoing Elapsed
Time Hours of Service cannot be determined, eight Elapsed Time
Hours of Service for each normal workday of absence. These Elapsed
Time Hours of Service shall be credited for the Plan Year in which
the absence begins if the Employee would be prevented from
incurring a One Year Break In Service in that Plan Year solely
because the Maternity or Paternity Absence is treated as Elapsed
Time Hours of Service hereunder, or, in any other case, in the
immediately following Plan Year. No more than 501 Elapsed Time
Hours of Service shall be credited for this purpose. For purposes
hereof, a "Maternity or Paternity Absence" shall mean an absence
from work for any period because of the Employee's pregnancy, the
birth of the Employee's child, the placement of a child with the
Employee in connection with the adoption of the child by the
Employee or to care for such a child for a period beginning
immediately following birth or placement of a child. No absence
from work will be counted as a Maternity or Paternity Absence
unless the Employee furnishes to the Plan Administrator such timely
information the Plan Administrator may reasonably require to
establish therefor.
2.42 "Participant" shall mean any Eligible Employee who
joins the Plan as provided in Article III.
2.43 "Plan" shall mean the "National Sanitary Supply
Company Employees Thrift and Profit Sharing Plan" as set forth
herein and as may be amended from time to time.
2.44 "Plan Administrator" shall mean the Administrative
Committee provided for in Article XIV.
2.45 "Plan Quarter" shall mean the three-consecutive month
period beginning on January 1, April 1, July 1 or October 1 of each
Plan Year.
2.46 "Plan Year" shall mean the calendar year.
<PAGE>
2.47 "Profit Sharing Contributions" shall mean the
contribution made by the Employer under Article IV to Participants'
Profit Sharing Contribution Accounts.
2.48 "Profit Sharing Contribution Account" shall mean the
separate Account established for a Participant to receive his
Profit Sharing Contributions.
2.49 "Profit Sharing Plan" shall mean the National
Sanitary Supply Company Profit Sharing Plan, as merged into the
Plan effective October 1, 1994.
2.50 "Related Company" shall mean a corporation or other
business entity (i) in which the Employer (or Chemed) maintains an
ownership interest of less than 80% and at least 20%, or (ii) which
itself maintains such an ownership interest in the Employer.
2.51 "Retired Participant" shall mean any Participant who
has qualified for retirement and the receipt of benefits under the
Plan and who has separated from service with the Employer.
2.52 "Spouse" shall mean a Participant's spouse (or
surviving spouse), or a Participant's former spouse to the extent
provided by a qualified domestic relations order (as defined in
Section 414(p) of the Internal Revenue Code).
2.53 "Supplemental Employee Contribution" shall mean the
voluntary contribution made by a Participant to his Employee
Contribution Account in excess of his Basic Employee Contribution
in an amount equal to 9% or less of his Compensation.
2.54 "Supplemental Employer Contribution" shall mean the
contribution in excess of the Basic Employer Contribution made by
the Employer pursuant to Article IV to Participants' Employer
Contribution Accounts.
2.55 "Temporary Employee" shall mean an Employee
designated on the personnel records of the Employer as a temporary
employee.
2.56 "Thrift Contribution" shall mean the contribution
made by a Participant pursuant to Article IV to his Thrift
Contribution Account.
2.57 "Thrift Contribution Account" shall mean the separate
Account established for a Participant pursuant to Article IV to
receive his Thrift Contributions.
2.58 "Totally and Permanently Disabled" shall mean
suffering from a physical or mental condition which, in the opinion
of the Plan Administrator based upon appropriate medical advice and
examination and in accordance with uniform rules applied uniformly
to all Participants, totally and permanently prevents the
<PAGE>
Participant from performing the customary duties of his regular job
with an Employing Unit.
2.59 "Trust Agreement" shall mean the agreement entered
into between NSS and the Trustee, together with any amendments
thereto.
2.60 "Trust Fund" shall mean the cash, securities, life
insurance contracts, annuity contracts, real estate, shares of
common trust funds and any other property held by the Trustee
pursuant to the Trust Agreement, together with income therefrom.
2.61 "Trustee" shall mean the trustee or trustees which
may from time to time be acting as Trustee under the Trust
Agreement.
2.62 "Union Employee" shall mean an Employee: (a) with
respect to whom compensation, hours of work, or conditions of
employment are determined through collective bargaining with a
recognized bargaining agent; or (b) is otherwise considered a
unionized employee for purposes of either (1) federal or state
labor laws or (2) pension laws under ERISA or the Code.
2.63 "Valuation Date" shall mean the last day of each
month, and any other dates the Plan Administrator designates from
time to time. If a Valuation Date would otherwise occur on a
Saturday, Sunday or holiday, then the Valuation Date shall mean the
preceding business day.
2.64 "Years of Service" shall mean the years described in
subsections (a), (b), and (c), subject to subsections (d) and (e).
(a) Years Before January 1, 1989. For those periods
prior to January 1, 1989, "Years of Service" shall include an
Employee's years of service determined as of December 31, 1988
under the Plan as constituted on that date.
(b) Years After December 31, 1988. For those periods
beginning on and January 1, 1989, a "Year of Service" shall mean
each Plan Year during which an Employee has not less than 1,000
Hours of Service or Elapsed Time Hours of Service.
(c) Years Under Merged Plan. An Employee's Years of
Service shall be no less than the years of service under any plan
merged into the Plan, or any plan having transferred assets to the
Plan, as determined as of the day before such merger into or
transfer to the Plan.
(d) Years of Service Disregarded. If an Employee
who is not entitled to any vested interest in his Employer
Contribution Account incurs a One Year Break in Service and again
becomes an Employee, his aggregate One Year Breaks in Service
before he again performs an Hour of Service shall be compared to
<PAGE>
his Years of Service before the One Year Breaks in Service that are
not otherwise disregarded. If the Employee's aggregate One Year
Breaks in Service equal or exceed the greater of (i) five or (ii)
the Employee's Years of Service before the One Year Break in
Service, then his Years of Service before the One Year Break in
Service are not counted. If any Years of Service are not counted
because of the application of the preceding provisions, those Years
of Service are not counted in any subsequent application of the
preceding provisions. In addition, any Years of Service that were
previously disregarded under the Plan as in effect prior to January
1, 1989 shall not be reinstated under the Plan as a result of the
preceding provisions. In the event that an Employee's Years of
Service are disregarded hereunder, the Employee's eligibility
service necessary to become a Participant of the Plan also shall be
disregarded.
(e) Years of Service Not Counted. Years of Service
before a One Year Break in Service are not counted until the
completion of one Year of Service after returning to the service of
the Employer.
ARTICLE III -- PARTICIPATION
3.1 Eligibility for Participation. Each Eligible Employee
who completes not less than 500 Hours of Service during any six-
month-consecutive period shall be eligible to become a Participant.
3.2 Participation Date; Application for Participation.
Each Eligible Employee who was a Participant in the Plan on
December 31, 1988 shall remain a Participant effective January 1,
1989. Each Eligible Employee who completed the eligibility
requirements of Section 3.1 prior to January 1, 1989, or who
thereafter completes such eligibility requirements, may become a
Participant on any Entry Date by filing an application therefor
with the Plan Administrator. Once an Eligible Employee has become
a Participant, the Eligible Employee shall continue to be a
Participant for as long as he continues to be an Eligible Employee
(without regard to the service requirement thereof).
3.3 Designation of Beneficiary. Each Participant shall
have the right by written notice to the Plan Administrator to
designate one or more Beneficiaries to receive the sums payable
after the death of the Participant.
3.4 Resumption of Service with an Employing Unit. An
Employee who terminated service with an Employing Unit after he
became a Participant and who later resumes his service with an
Employing Unit shall again become a Participant upon his return to
the status of an Eligible Employee. An Employee who terminated
service with an Employing Unit prior to meeting the eligibility
requirements of Section 3.1 and who later resumes his service with
an Employing Unit before incurring a One Year Break in Service
<PAGE>
shall be eligible to become a Participant on the date he returns to
the status of an Eligible Employee and fulfills the requirements of
Section 3.1, taking into account his period of service prior to the
date he terminated his service and after the date he returned to
the status of an Eligible Employee.
3.5 Change in Employment Status; Transfer to Affiliated
Company. If a Participant ceases to be an Eligible Employee due to
a change in employment status or transfer of service to an
Affiliated Company while remaining employed by the Employer or an
Affiliated Company, he shall become an Inactive Participant until
he again becomes an Employee and satisfies the employment
requirements of an Eligible Employee. If an individual who is
employed by the Employer and who is not a Participant becomes an
Eligible Employee due to a change in employment status, he will be
eligible to become a Participant as of the Entry Date coincident
with or next following the date of his employment status changed,
provided he would have been eligible to become a Participant had he
met the definition of an Eligible Employee.
3.6 Transfer of Employment to Related Company. If a
Participant ceases to be an Eligible Employee by reason of his
being employed by a Related Company, the Participant shall become
an Inactive Participant, he shall thereupon be ineligible to make
further Employee Contributions and his service with the Related
Company shall be deemed service with the Employer for vesting
purposes only. At such time as such Inactive Participant's
Accounts become fully vested and nonforfeitable, the total value of
the Inactive Participant's Accounts may, at the election of the
Participant, be transferred in accordance with the provisions of
Article XIV either to the trustee of a plan maintained by the
Related Company or to an individual retirement account established
by the Inactive Participant. If the Inactive Participant's
employment with the Related Company terminates before his Accounts
fully vest, and he is not then employed by the Employer or an
Affiliated Company, he shall be deemed to be a terminated
Participant and the value of his Accounts that are fully vested as
of the date he terminated employment with the Related Company shall
be paid to him in accordance with the Plan provisions applicable to
Participants whose employment with the Employer terminates and he
shall thereupon forfeit the unvested portion of his Employer
Contribution Account.
3.7 Suspension of Participation. A Participant may
suspend his participation in the Plan and become an Inactive
Participant by suspending his Employee Contributions pursuant to
Section 4.5.
3.8 Employment by Employer: Service with Newly Acquired
Entities; Records of Employer.
(a) Service Credit. In the event the Employer has or
shall acquire the control of any organization by the purchase of
<PAGE>
assets or stock, merger, amalgamation, consolidation or any other
similar event, the Board of Directors of NSS may direct to what
extent, if any, employment such organization shall be deemed to be
employment by the Employer and, in connection therewith, may
specify a special Entry Date.
(b) Records. The personnel records of the Employer
or any Affiliated Company shall be conclusive evidence for the
purpose of determining the period of employment of any and all
Employees.
3.9 Plan Binding. Upon becoming a Participant, a
Participant shall be bound then and thereafter by the terms of the
Plan and the Trust Agreement, including all duly authorized
amendments to the Plan and the Trust Agreement.
ARTICLE IV -- CONTRIBUTIONS
4.1 Establishment of Accounts. The Plan Administrator
shall establish and maintain or cause to be maintained four
separate accounts in the name of each Participant. These accounts
shall consist of an Employer Contribution Account, a Profit Sharing
Contribution Account, a 401(k) Contribution Account and a Thrift
Contribution Account. Each such Account shall be maintained
separately and credited or debited as provided in the Plan.
4.2 Basic Employee Contributions. A Participant may elect
to contribute to his Employee Contribution Account an amount equal
to any integral percentage up to 6% of his Compensation. A
Participant electing to make such contributions shall specify
whether such contributions shall be made wholly to his 401(k)
Contribution Account or to his Thrift Contribution Account or, in
specified increments of 1% of his Compensation, to his 401(k)
Contribution Account and to his Thrift Contribution Account.
Unless a Participant specifies in writing otherwise, Basic Employee
Contributions shall be deemed to be made to a Participant's Thrift
Contribution Account.
4.3 Supplemental Employee Contributions. A Participant
who has authorized Basic Employee Contributions in an amount equal
to 6% of his Compensation may also make Supplemental Employee
Contributions in an amount equal to an integral percentage (not to
exceed 9%) of his Compensation. A Participant electing to make
Supplemental Employee Contributions shall specify whether such
contributions shall be made wholly to his 401(k) Contribution
Account or to his Thrift Contribution Account or, in specified
increments of 1% of his Compensation, to his 401(k) Contribution
Account and to his Thrift Contribution Account. Unless a
Participant specifies in writing otherwise, Supplemental Employee
Contributions shall be deemed to be made to a Participant's Thrift
Contribution Account.
<PAGE>
4.4 Method for Effecting Employee Contributions. Employee
Contributions shall be effected by payroll deduction by completing
the forms the Plan Administrator prescribes and shall be remitted
to the Trustee within five working days of the end of the calendar
month in which the deductions were made. The initial rate of
deduction the Participant authorizes and his election as to the
Accounts to which his contributions shall be credited shall become
effective on the Participant's Entry Date.
4.5 Changes in Employee Contributions. A Participant may,
by written notice to the Plan Administrator in the manner
prescribed by the Plan Administrator:
(a) Suspend either (i) Supplemental Employee
Contributions or (ii) Basic Employee Contributions and Supplemental
Employee Contributions as of the last day of the month which is at
least fifteen days after the Plan Administrator receives the
written notice. A Participant who suspends his Basic Employee
Contributions shall not be permitted to make Supplemental Employee
Contributions until he again reinstates the required amount of
Basic Employee Contributions.
(b) Reinstate suspended Basic Employee Contributions
or Supplemental Employee Contributions as of the first day of the
Plan Quarter following the date the notice of resumption is
received and which is at least three months after the effective
date of the last suspension. A Participant cannot reinstate
suspended Supplemental Employee Contributions unless he is then
making, or concurrently reinstates, the required amount of Basic
Employee Contributions.
(c) Not more frequently than once each Plan Year,
increase or decrease the rate of Basic Employee Contributions
and/or Supplemental Employee Contributions, subject to the
requirements of Sections 4.2 and 4.3. Such increase or decrease
will begin as of the first day of the Plan Quarter which is at
least fifteen days after the Plan Administrator receives the
written notice.
(d) Not more frequently than once each Plan Year,
change the percentages of Compensation to be contributed to a
Participant's 401(k) Contribution Account or Thrift Contribution
Account, in whole percentages. Such change shall be effective on
the first day of the Plan Quarter which is at least fifteen days
after the Plan Administrator receives the written notice.
4.6 Limitations on Employee Contributions.
(a) Code Section 402(g) $7,000 Limit. Effective
January 1, 1987, 401(k) Contributions for any Participant shall not
exceed $7,000 for any calendar year, or such larger amount as
designated by the Secretary of the Treasury under Section 402(g) of
the Code. If an Employer or Affiliated Company maintains a plan
<PAGE>
with a cash or deferred arrangement described in Section 401(k) of
the Code, the Code Section 402(g) $7,000 limit shall be applied as
if such plan and the Plan were one plan.
(b) Code Section 401(k) ADP and Section 401(m) ACP
Limitations. If for any Plan Year the Plan Administrator
determines on the basis of estimates during the Plan Year that the
limitations of Article VII of the Plan may be exceeded, the Plan
Administrator may in its sole discretion limit the amount of
Employee Contributions that may thereafter be made by Participants
so that the limitations of Article VII will not be exceeded.
(c) Code Section 415 Annual Addition Limitations. A
Participant's Employee Contributions may not cause the limitations
in Article VIII to be exceeded. In the event that the limitations
are expected to be exceeded for any Participant, the Plan
Administrator shall cause the Participant's following Plan
Contributions for the Plan Year to be reduced in the following
order: (1) supplemental Thrift Contributions; (2) supplemental
401(k) Contributions; (3) basic Thrift Contributions (with a
corresponding reduction or elimination of the Participant's
allocation of the Employer Contribution); and (4) basic 401(k)
Contributions (with a corresponding reduction or elimination of the
Participant's allocation of the Employer Contribution).
(d) Code Section 404 Deductibility Limit. A
Participant's Employee Contributions may not cause the Code Section
404 deductibility limitations to be exceeded. In the event such
contribution limit would be exceeded, the Employers shall not make
Plan contributions to the Plan to the extent necessary to avoid
exceeding such limit, all in a uniform, consistent and
nondiscriminatory manner. For purposes of the Plan generally,
nothing herein shall prohibit any Employer from making a Plan
contribution on behalf of another Employer consistent with the
provisions of Section 404(a)(3)(B) of the Code (concerning profit
sharing plans and stock bonus plans of an affiliated group).
(e) Contribution Suspension Upon 401(k) Hardship
Withdrawal. If the Participant received a hardship withdrawal
under Section 10.2(d) of the Plan, the Participant shall be
prohibited from resuming Employee Contributions for at least 12
months after date of receipt of the withdrawal. In such case, the
Participant's Code Section 402(g) $7,000 limit for the calendar
year following the calendar of the withdrawal shall be reduced by
the amount of the 401(k) Contributions authorized by the
Participant for the calendar year of the hardship withdrawal.
4.7 Credits to Employee Contribution Accounts.
(a) 401(k) Contributions and Thrift Contributions.
The amount of 401(k) Contributions and Thrift Contributions for
each month will be remitted to the Trustee and credited to the
appropriate Account (determined under subsection (c) below) as of
<PAGE>
the last day of the month. The Contributions shall be considered
allocated to the appropriate Account effective as of the date
prescribed in Section 7.8(e) of the Plan (for purposes of the Code
Section 402(g) $7,000 limit and the ADP and ACP Tests).
(b) Trust Contribution. For purposes of complying
with DOL Regulations Section 2510.103-3 (concerning ERISA plan
assets and transfer of participant contributions to trust), the
Employer shall pay the Employee Contributions to the Trust no later
than the date the contributions can first be segregated from the
Employer's general assets, but in any event no later than the 10th
day following the end of the month the Employee Contributions would
have been paid to the Participant.
(c) Appropriate Accounts. A Participant's Employee
Contributions shall be credited to his 401(k) Contribution Account
and his Thrift Contribution Account consistent with his elections
under Sections 4.2 and 4.3, except that, notwithstanding anything
in the Participant's election to the contrary, a Participant's
total Employee Contributions shall be first credited to his 401(k)
Contribution Account as Basic Employee Contributions, to the extent
the Participant so designated all such Employee Contributions as
401(k) Contributions, and the remainder of his Employee
Contributions shall be then credited to his Thrift Contribution
Account as either Basic Employee Contributions or Supplemental
Employee Contributions (as applicable).
4.8 Employer Contributions.
(a) Basic Employer Contributions. Subject to
authorization by NSS, simultaneously with the monthly remittance of
Employee Contributions to the Trustee pursuant to Section 4.7, the
Employer shall contribute from its current or accumulated Net
Profits to the Trust Fund, for credit to the Employer Contribution
Accounts of Participants, an amount equal to twenty-five (25)
percent of the Participant's Basic Employee Contributions.
(b) Supplemental Employer Contributions. Subject to
authorization by the Board of Directors of NSS acting only upon and
in accordance with the recommendations of its Incentive Committee,
the Employer may, once each Plan Year, in addition to Basic
Employer Contributions, contribute from its current or accumulated
Net Profits, on an Employing Unit-by-Employing Unit basis, to the
Trust Fund an amount up to seventy-five (75) percent of the Basic
Employee Contributions made during the Plan Year by, and on the
last day of the Plan Year still credited to the Accounts of, those
Employees of the Employing Units for which the Supplemental
Employer Contribution is made who are Participants, former
Participants, Inactive Participants and former Inactive
Participants described in Section 4.8(d).
(c) Application of Forfeitures. Employer
Contributions shall be reduced by any forfeitures during the Plan
<PAGE>
Year pursuant to Sections 10.3 and 11.9. Forfeitures shall be
applied to satisfy the Employer's Employer Contribution obligations
otherwise described in this Section 4.8.
(d) Supplemental Employer Contribution; Eligible
Participants. Supplemental Employer Contributions shall be
credited to the Employer Contribution Accounts of those
Participants, Inactive Participants, former Participants and former
Inactive Participants who meet the following criteria as of the
dates indicated:
(1) Participants and Inactive Participants must
have been Participants or Inactive Participants on the last day of
the Plan Year for which the Supplemental Employer Contribution is
made and, except for Participants who have made withdrawals
pursuant to Section 10.4, as of such date must not have withdrawn
any Basic Employee Contributions made during that Plan Year. If an
Employee has made a partial withdrawal of such Basic Employee
Contributions, the amount of the Supplemental Employer Contribution
made to his Employer Contribution Account shall be ratably reduced.
A Participant who has made a withdrawal pursuant to Section 10.4 or
who has effected an In-Service Retirement pursuant to Section 11.5
shall have his pro rata share of the Supplemental Employer
Contribution determined on the basis of the Basic Employee
Contributions made during the Plan Year for which the Supplemental
Employer Contribution is made without regard to any withdrawals
thereof.
(2) Former Participants or former Inactive
Participants must have been Participants or Inactive Participants
on the last day of the Plan Year for which the Supplemental
Employer Contribution is made, must not have withdrawn any Basic
Employee Contributions made during the Plan Year for which the
Supplemental Employer Contribution is made and must have terminated
participation in the Plan because of retirement, death or Total and
Permanent Disability. If a former Participant or former Inactive
Participant has made a partial withdrawal of such Basic Employer
Contributions, the amount of Supplemental Employer Contributions
made to his Employer Contributions Account shall be ratably
reduced.
4.9 Allocation of Employer Contributions.
(a) General Rules. As of the last day of each
calendar month, the Plan Administrator shall allocate or cause to
be allocated to the Employer Contribution Account of each
Participant that percentage of the Basic Employer Contribution for
the month equal to (i) the aggregate Basic Employee Contributions
for that Participant for the month, divided by (ii) the aggregate
Basic Employee Contributions for all Participants for the month.
As of the last day of each Plan Year, the Plan Administrator shall
allocate or cause to be allocated to the Employer Contribution
Account of each Participant described in Section 4.8(d) that
<PAGE>
percentage of the Supplemental Employer Contribution for the Plan
Year equal to (i) the aggregate Basic Employee Contributions for
that Participant for the Plan Year then credited to the
Participant's Accounts, divided by (ii) the aggregate Basic
Employee Contributions for all Participants described in Section
4.8(d) for the Plan Year then credited to all such Participants'
Accounts.
(b) Limitations. The Basic Employer Contributions so
allocated shall not exceed twenty-five (25) percent of the
aggregate Basic Employee Contributions of the Participant for the
Plan Year and the Supplemental Employer Contributions so allocated
shall not exceed seventy-five (75) percent of the aggregate Basic
Employee Contributions of the Participant for the Plan Year. The
aggregate Basic Employer Contributions and Supplemental Employer
Contribution so allocated shall not exceed one hundred (100)
percent of the aggregate Basic Employee Contributions of the
Participant for the Plan Year.
4.10 Profit Sharing Contributions.
(a) Discretionary Amount; By Employing Unit. Subject
to authorization by the Board of Directors of NSS acting only upon
and in accordance with the recommendations of its Incentive
Committee, the Employer may, once each Plan Year, contribute from
its current or accumulated Net Profits, on an Employing Unit-by-
Employing Unit basis, to the Trust Fund an amount to be allocated
among and credited to the Accounts of those Employees of the
Employing Units for which the Profit Sharing Contribution is made
who are Participants, former Participants, Inactive Participants
and former Inactive Participants described in Section 4.10(c).
(b) Application of Forfeitures. Profit Sharing
Contributions shall be reduced by any forfeitures during the Plan
Year pursuant to Sections 10.3 and 11.9. Forfeitures shall be
applied to satisfy the Employer's Profit Sharing Contribution
obligations otherwise described in this Section 4.10.
(c) Eligible Participants. Profit Sharing
Contributions shall be credited to the Profit Sharing Contributions
Accounts of those Participants, former Participants, Inactive
Participants and former Inactive Participants who meet the
following criteria as of the dates indicated:
(1) Participants and Inactive Participants must
have been Participants or Inactive Participants on the last day of
the Plan Year for which the Profit Sharing Contribution is made
(2) Former Participants or former Inactive
Participants must have been Participants or Inactive Participants
on the last day of the Plan Year for which the Profit Sharing
Contribution is made and must have terminated participation in the
<PAGE>
Plan because of retirement, death or Total and Permanent
Disability.
(d) Allocation. As of the last day of each Plan
Year, the Plan Administrator shall allocate or cause to be
allocated to the Profit Sharing Account of each Participant that
percentage of the Profit Sharing Contribution for the Plan Year for
the Employing Unit equal to (i) the Compensation for that
Participant for the Plan Year, divided by (ii) the aggregate
Compensation for all Participants for the Plan Year.
4.11 Limitations on Employer and Profit Sharing
Contributions.
(a) Code Section 415 Annual Addition Limitations. A
Participant's allocation of Employer Contributions and Profit
Sharing Contributions may not cause the limitations in Article VIII
to be exceeded.
(b) Code Section 404 Deductibility Limit. A
Participant's allocation of Employer Contributions and Profit
Sharing Contributions may not cause the Code Section 404
deductibility limitations to be exceeded. In the event such
contribution limit would be exceeded, the Employers shall not make
Plan contributions to the Plan to the extent necessary to avoid
exceeding such limit, all in a uniform, consistent and
nondiscriminatory manner. For purposes of the Plan generally,
nothing herein shall prohibit any Employer from making a Plan
contribution on behalf of another Employer consistent with the
provisions of Section 404(a)(3)(B) of the Code (concerning profit
sharing plans and stock bonus plans of an affiliated group).
4.12 Compensation Limitations.
(a) $200,000/$150,000 Compensation Limitation.
Effective with Plan Years beginning on and after January 1, 1989,
a Participant's Compensation considered for Plan contribution
purposes for any Plan Year shall not exceed $200,000 or, effective
for Plan Years beginning on and after January 1, 1994, $150,000, or
such greater or lesser amount in effect for such Plan Year as
permitted by the Secretary of the Treasury.
(b) Senior HCE Core Family Group. The $200,000 and
$150,000 limitations of subsection (a) above shall be applied to
the aggregate Compensation for any Plan Year of each Senior Highly
Compensated Employee and his Core Family Members who are
Participants of the Plan (the "Senior HCE Core Family Group"). If
the $200,000 limitation is exceeded for the Senior HCE Core Family
Group, the aggregate Compensation for any Plan Year for such Group,
as so limited to the applicable $200,000 amount for the Plan Year,
shall be apportioned among the Participants of such Group in
proportion to each Participant's Compensation for any Plan Year
determined without regard to the $200,000 limitation (or in such
<PAGE>
other manner provided by, or consistent with, any regulations or
other applicable guidance issued by the Secretary of the Treasury).
The foregoing special Senior HCE Core Family Group rules shall not
apply to the Code Section 402(g) $7,000 limit (contained in Section
4.6(a)), nor the Code Section 415 contribution limits (contained in
Article VIII). For purposes hereof, the terms "Senior Highly
Compensated Employee" and "Core Family Members" shall have the
meanings as set forth in Article VII of the Plan.
ARTICLE V -- TRUSTEE; INVESTMENTS
5.1 Trustee Selection; Trust Agreement. The Trustee shall
be a person or persons, bank or trust company designated by the
Board of Directors of NSS. NSS and the Trustee shall execute a
Trust Agreement providing for the investment of the Trust Fund and
prescribing the powers, duties, obligations and functions of the
Trustee with respect to the Plan.
5.2 Powers and Duties of the Trustee. The Trustee shall
invest the assets of the Trust Fund in the manner described in this
Article V and in accordance with the Trust Agreement. The Trustee
shall not be responsible for the validity of the Plan and the trust
created by the Trust Agreement but shall be accountable only for
funds paid to or received by it under the Trust Agreement.
5.3 Appointment and Powers and Duties of Investment
Committee. The Board of Directors of NSS may appoint an Investment
Committee which shall have full power to select the General Funds
and to retain and, if the Investment Committee so determines,
dismiss and replace such investment advisors and managers, counsel,
accountants and other agents as the Investment Committee shall deem
advisable.
5.4 Valuation of Trust Fund Assets. The assets of the
Trust Fund shall be valued at their fair market value by the
Trustee as of the close of business on each Valuation Date and the
values so determined shall be certified to the Employer and the
Plan Administrator together with a statement of the cost of the
assets and a statement of receipts and disbursements for the period
between Valuation Dates and for the Plan Year.
5.5 Composition of the Trust Fund. The Trust Fund shall
consist of the General Funds and the NSS Stock Fund.
(a) General Funds. The General Funds shall be
selected by the Investment Committee from time to time and for
which the Investment Committee shall direct the Trustee in writing.
The Investment Committee may select as a General Fund any of the
following: (i) any security of any issuer registered under the
Investment Company Act of 1940 (mutual fund security); (ii) any
common, collective or commingled fund, consisting of any
<PAGE>
combination of securities or investments, including but not limited
to, bonds, notes, debentures or other evidences of indebtedness,
whether or not secured; stocks, shares and other interests in
associations, firms or corporations; interests in property, real or
personal, capital, common and preferred stocks (which may include
stocks or securities of NSS, Chemed or any affiliate), personal,
corporate and governmental obligations, secured or unsecured;
mortgages, leaseholds, fees and other interest in realty; oil, gas
or mineral properties, rights, royalties, payments or other
interests in such property; contracts, conditional sale agreements,
choices in action, trust and participation certificates, or other
evidences of ownership, part ownership, interest or part interest,
and such common, collective or commingled funds may include funds
held by the Trustee subject to other trusts, including, without
limitation, any pooled investment trust maintained by the Trustee
for investment of funds of qualified employee benefit plans; (iii)
any contracts with insurance companies as may be approved by the
Investment Committee, specifically including but not limited to,
group annuity contracts. In making such investment selections, the
Investment Committee shall not be limited or restricted by any
statute or rule of law now or hereafter in effect governing trust
investments.
(b) NSS Stock Fund.
(1) The Trustee shall invest the assets of the
NSS Stock Fund in shares of the common stock, par value $1.00 per
share, of NSS ("NSS Stock"). The Trustee shall purchase NSS Stock
on the principal stock exchange on which NSS Stock is listed. If
NSS Stock is not then listed on a stock exchange, the Trustee shall
purchase NSS Stock in the over the counter market at a price not
exceeding the prevailing market "asked" price through brokers
selected by the Trustee, or at a price not greater than the then
prevailing market "asked" price through private transactions.
These purchases shall be made as soon as reasonably practicable
after receipt of funds by the Trustee. The NSS Stock purchased by
the Trustee shall be registered in its name or in the name of its
nominee, as the Trustee shall elect.
(2) In lieu of making purchases described in
Section 5.5(b)(1) and/or sales of NSS Stock in the open market, the
Trustee may, in its discretion, match purchases and sales of NSS
Stock to be made at substantially the same time. In that event,
the price at which the NSS Stock shall be considered to have been
purchased and sold shall be determined by the Trustee based upon a
price which is not less favorable to the Plan than the adequate
consideration price of NSS Stock determined under Section 3(18) of
ERISA and consistent with the exemption under Section 408(e) of
ERISA.
(3) In lieu of purchases of NSS Stock in the
open market or matched purchases and sales of NSS Stock by the
Trustee, NSS may directly sell or contribute shares of NSS Stock to
<PAGE>
the Trust. In that event, the price at which the NSS Stock shall
be purchased (if sold), or shall be considered to be purchased
(if contributed) shall be determined by the Trustee based upon a
price which is not less favorable to the Plan than the adequate
consideration price of NSS Stock determined under Section 3(18) of
ERISA and consistent with the exemption under Section 408(e) of ERISA.
5.6 Investment of Contributions.
(a) Employer Contributions. All Employer
Contributions received by the Trustee will be invested by the
Trustee in the NSS Stock Fund.
(b) Employee Contributions. At the time an Eligible
Employee enrolls in the Plan he shall elect in writing to have his
Employee Contributions invested in any 5% multiples in either (i)
any combination of General Funds or (ii) the NSS Stock Fund. If no
election is made, the Participant's Employee Contributions shall be
invested in the General Fund designated by the Plan Administrator
from time to time for that purpose.
(c) Profit Sharing Contributions.
(1) The Board of Directors of NSS shall
designate the portion (if any) of any Profit Sharing Contribution
made to the Plan for a Plan Year to be invested in the NSS Stock
Fund, and the portion so designated will be invested by the Trustee
in the NSS Stock Fund.
(2) The remaining portion of any Profit Sharing
Contribution made to the Plan for a Plan Year shall be invested as
follows: At the time an Eligible Employee enrolls in the Plan he
shall elect in writing to have his allocation of any Profit Sharing
Contribution invested in any 5% multiples in any combination of
General Funds. If no election is made, the Participant's
allocation of the Profit Sharing Contribution shall be invested in
the General Fund designated by the Plan Administrator from time to
time for that purpose.
(d) Reinvestment of Earnings. Earnings on assets of
the General Funds, the NSS Stock Fund shall be reinvested in the
Investment Fund in which the assets were held.
(e) Investment Risk. Each Participant assumes all
risks connected with any decrease in the value of any securities or
other investment in the Trust Fund.
5.7 Change of Investment Election. A Participant may
change his election of investment pursuant to Section 5.6(b) as of
the first day of any month with respect to any contributions
contributed thereafter by giving at least 15 days' prior written
notice to the Plan Administrator.
<PAGE>
5.8 Transfer of Funds. A Participant may throughout each
Plan Year effective on the first day of any month and upon at least
15 days' written notice to the Plan Administrator given prior to
such date elect to transfer funds in accordance with one or more of
the following options:
(a) Employee Contributions:
(1) All or any 5% part of any of his General
Fund account balance to any other General Fund and/or to the NSS
Stock Fund, or
(2) All or any 5% part of his NSS Stock Fund
account balance to any General Fund.
(b) Vested Employer Contributions.
(1) After attaining age 60 a Participant may
elect once each Plan Year, beginning with the Plan Year in which he
attains age 60, to transfer 20% of the value (determined as of the
Valuation Date following and which is at least 15 days after
receipt of the Participant's request) of his vested Employer
Contribution Account from the NSS Stock Fund to any General Fund.
(c) Profit Sharing Contributions.
(1) For the portion of any Profit Sharing
Contributions invested in the NSS Stock Fund, the provisions of
Section 5.8(b)(1) (applicable to vested Employer Contributions)
shall apply.
(2) For the remaining portion of any Profit
Sharing Contributions, all or any 5% part of any General Fund
account balance to any other General Fund.
(d) Interim Transfers. A Participant may, however,
change his election of investment as of any day of any month with
respect to the transfer of funds in accordance with the preceding
options by giving prior written notice to the Plan Administrator,
provided that the Participant, together with all other Participants
desiring to change on the same day, pay their proportionate share
of valuation expenses necessary to value the Trust Fund effective
as the elected day of transfer.
5.9 Participant NSS Stock Voting and Other Rights.
(a) General. Each Participant, Inactive Participant,
former Participant or Beneficiary is entitled to direct the Trustee
as to the manner in which NSS Stock allocated or allocable to the
vested portion of the Participant's Employer Contribution Account
and Profit Sharing Contribution Account and his Employee
Contribution Account is to be voted, and as to the manner in which
<PAGE>
rights other than voting rights with respect to that NSS Stock are
to be exercised.
(b) Notice. The Trustee shall notify each
Participant, Inactive Participant, former Participant and
Beneficiary of each occasion for the exercise of voting rights
within a reasonable period before the rights are to be exercised.
The notice shall include all proxy solicitation and other materials
distributed by NSS to shareholders with regard to exercise of
voting rights, together with a form requesting confidential
instructions to the Trustee on how to vote the NSS Stock described
in subsection (a) above. Instructions received from Participants,
Inactive Participants, former Participants and Beneficiaries shall
not be divulged or released to any person, including officers or
employees of the Employer.
(c) Trustee Diligence. The Trustee shall take
whatever steps are reasonably necessary to allow Participants,
Inactive Participants, former Participants and Beneficiaries to
exercise rights other than voting rights with respect to NSS Stock
allocated to the vested portion of their Employer Contribution
Account and Profit Sharing Contribution Accounts and their Employee
Contribution Accounts.
(d) Shares Allocated. The number of shares to which
any Participant, Inactive Participant, former Participant and
Beneficiary described in subsection (a) shall have the rights
described in subsection (a) and (c) shall be determined for any
record date by the number of shares allocated to the vested portion
of his Employer Contribution Account and Profit Sharing
Contribution Account and his Employee Contribution Account on the
previous Valuation Date.
(e) Fractional Shares. The Trustee shall vote
fractional shares by combining the confidential directions on
voting of all fractional shares to the extent possible.
(f) Non-Returned Instructions. The Trustee shall
vote any shares or exercise rights other than voting with respect
to (i) shares of NSS Stock allocated to the nonvested portion of
Employer Contribution Account and Profit Sharing Contribution
Accounts and Employee Contribution Accounts of Participants,
Inactive Participants, former Participants and Beneficiaries
described in subsection (a), and (ii) shares described in
subsection (a) for which no direction has been received, in the
same proportion and in the same manner as shares described in
subsection (a) are collectively voted.
5.10 Adjustment Provisions. In the event (i) any
recapitalization of NSS or reclassification, split-up, combination
or consolidation of shares of NSS Stock shall be effected, or (ii)
the outstanding shares of NSS Stock shall, in connection with a
reorganization or consolidation of NSS be exchanged for a different
<PAGE>
number or class of shares of the capital stock or other securities
of NSS, the Trustee shall take such action as shall be ordered by
the Board of Directors of NSS acting upon and in accordance with
the recommendations of the Incentive Committee of the Board of
Directors of NSS and, to the extent that NSS Stock is to be
exchanged for a different number or class of the capital stock or
other securities of NSS pursuant to such order, then such different
number or class of shares of the capital stock or other securities
of NSS shall be exchanged for NSS Stock by the Trustee and the name
and class of such shares of capital stock or other securities of
NSS received in exchange for NSS Stock shall be substituted in all
respects for all references to NSS Stock as presently stated in
this Plan.
5.11 Exchange or Tender Offers.
(a) NSS Stock Allocated to Employer and Profit
Sharing Contribution Accounts. In the event there shall be
extended to the stockholders of NSS generally an offer to exchange
or purchase all or a portion of the issued and outstanding shares
of NSS Stock for cash and/or other consideration, the Trustee shall
take action as shall be ordered by the Board of Directors of NSS
acting upon and in accordance with the Incentive Committee of the
Board of Directors of NSS.
(b) NSS Stock Allocated to Employee Contribution
Accounts. In the event there shall be extended to the stockholders
of NSS generally an offer to exchange or purchase all or a portion
of the issued and outstanding shares of NSS Stock for cash and/or
other consideration, the Trustee shall take with respect to shares
of NSS Stock allocated to Employee Contribution Accounts such
action as the Participants having shares of NSS Stock allocated to
their Employee Contribution Accounts shall specify. Instructions
received from individual Participants shall not be divulged or
released to any person, including officers or employees of the
Employer, NSS or Chemed. In the absence of instructions from
Participants, the Trustee shall take, with respect to those shares
of NSS Stock for which no Participant instructions were received,
such action as shall be ordered by the Board of Directors of NSS
acting upon and in accordance with the recommendations of the
Incentive Committee of the Board of Directors of NSS.
5.12 1934 Act Section 16(b) Regulation Exemption. Except
as otherwise noted, this Section shall become effective on the date
of execution of this restated Plan (or, if earlier, September 1,
1994) and shall supersede any conflicting provisions of the Plan.
The provisions of this Section are intended to comply with SEC
Regulation Section 240.16b-3, Employee Benefit Plan Transactions,
under which certain transactions under the Plan involving NSS Stock
by Participants who are officers and directors will not be
considered purchases and sales for purposes of Section 16(b) of the
Securities Exchange Act of 1934 (1934 Act).
<PAGE>
(a) Grant and Award Transactions. Pursuant to SEC
Regulation Section 240.16b-3(c), the grant or award of a NSS Stock
under the Plan to a Restricted Participant shall be exempt from
Section 16(b) of the 1934 Act if the Restricted Participant holds
the NSS Stock under the Plan for six months from the date of grant
or allocation under the Plan. Effective May 1, 1991, NSS shall not
amend the provisions of Article IV of the Plan, or any other
provision of the Plan or the Trust Agreement, in a manner which
affects the amount, price or timing for which Employee
Contributions are invested in NSS Stock, or for which Employer
Contributions are invested in NSS Stock, more frequently than once
every six months, except to comport with changes in the Code, ERISA
or the rules thereunder.
(b) Participant Directed Transactions. Pursuant to
SEC Regulation Section 240.16b-3(d), a participant-directed
transaction and any related employer matching contribution
concerning NSS Stock under the Plan to a Restricted Participant
shall be exempt from Section 16(b) of the 1934 Act if a participant
investment direction or distribution transaction under the Plan by
a Restricted Participant meets the conditions of either paragraph
(1) or (2), as follows:
(1) The transaction meets the requirements of
either subparagraph (A) or (B), as follows:
(A) The transaction is pursuant to an
irrevocable election made by the Restricted Participant at least
six months in advance of the effective date of the transaction; or
(B) The transaction is pursuant to an
election to receive either NSS Stock or cash, or a combination of
NSS Stock and cash, or to defer a distribution of NSS Stock or cash
in whole or in part, incident to death, retirement, disability, or
termination of employment.
(2) The transaction meets the requirements of
either subparagraph (A) or (B), as follows:
(A) For initial or periodic transactions
resulting from an election to participate or change levels of
participation with respect to NSS Stock under the Plan (as a plan
which provides for broad-based employee participation and the terms
of which do not discriminate in favor of highly compensated
employees), the following requirements are met:
(i) A Restricted Participant making
withdrawals must cease further purchases in the Plan for six
months, or the shares of NSS Stock so distributed must be held by
the Restricted Participant six months prior to disposition;
provided, however, that extraordinary distributions of all of the
NSS Stock held by the Plan and distributions in connection with
death, retirement, disability, termination of employment, or a
<PAGE>
qualified domestic relations order as defined by the Code or Title
I of ERISA, or the rules thereunder, are not subject to this
requirement; and
(ii) The Restricted Participants who
cease participation in the Plan may not participate again for at
least six months.
(B) For intra-Plan transfers between NSS
Stock and an Investment Fund, the transaction is pursuant to an
election made on a quarterly date during a Window Period at least
six months after the date of the previous intra-Plan transfer
election relating to NSS Stock.
(c) Section 16(b) Reporting. Pursuant to SEC
Regulation Section 240.16b-3, however, transactions by Restricted
Participants resulting from elections to participate or change the
level of participation are subject to Section 16 of the 1934 Act
and shall be reported on Form 4 or 5 as appropriate.
(d) Applicable Definitions. For purposes of this
Section, the following terms shall have the meanings as set forth
therein:
(1) A "Restricted Participant" is any
Participant who is, within the meaning of Section 16(a) of the 1934
Act and the rules promulgated thereunder, an officer or director of
NSS or any affiliate for purposes hereof under the 1934 Act.
(2) As used in this Section, "NSS Stock" shall
mean NSS Stock or an Investment Fund under the Plan which invests
primarily in any equity security of NSS or any affiliate which is
registered pursuant to Section 12 of the 1934 Act.
(3) A "Window Period" is the period beginning
on the third business day and ending on the twelfth business day
following the NSS' release for publication of its quarterly and
annual summary statements of income and earnings.
ARTICLE VI -- ALLOCATION OF PROFIT AND LOSS OF
TRUST FUND TO PARTICIPANT ACCOUNTS
6.1 Date of Valuation. As of the close of business on
each Valuation Date, the Trustee shall value the assets in the
Trust Fund at their then market value.
6.2 Adjustment of Accounts as of Valuation Dates. The
Employer Contribution Account, Profit Sharing Contribution Account,
401(k) Contribution Account and Thrift Contribution Account of each
Participant, Inactive Participant and former Participant as of a
Valuation Date shall be equal to the value of the Account as of the
<PAGE>
preceding Valuation Date, and adjusted in the following order and
manner:
(a) Each Account shall be reduced by the amount of
any distributions and withdrawals from the Account since the
preceding Valuation Date.
(b) Each Account shall be increased by the amount of
Employer Contributions, Profit Sharing Contributions and Employee
Contributions allocated to the Account pursuant to Article IV.
(c) Each Account shall be increased or decreased by
the Net Gain or Net Loss allocated to the Account under Section
6.3.
6.3 Allocation of Profit and Loss. As of each Valuation
Date, there shall be allocated to each Account its proportionate
share of the Net Gain or Net Loss since the last Valuation Date.
(a) For the purpose of determining the Net Gain or
Net Loss of each Investment Fund as of any current Valuation Date
for the period since the preceding Valuation Date, the Plan
Administrator shall cause a valuation to be made of the assets of
each Investment Fund as of the current Valuation Date based on the
then fair market values which shall give effect to gains, earnings,
losses and other items of income and expense as of the current
Valuation Date. The Net Gain or Net Loss of each Investment Fund
for the period shall be the amount by which the total net value of
all such assets determined as of the current Valuation Date exceeds
or is less than the total net value of all such assets determined
as of the preceding Valuation Date, reduced by the total of any
Employer Contributions, Profit Sharing Contributions and Employee
Contributions made since the next preceding Valuation Date, and
increased by the total of any withdrawals and distributions since
the preceding Valuation Date.
(b) The Net Gain or Net Loss of each Investment Fund
shall be allocated among the Accounts of all Participants invested
in each Investment Fund in the same ratio that the balance in each
such Account invested as of the preceding Valuation Date, less
withdrawals and distributions since the preceding Valuation Date,
bears to the total amount of all balances of all Accounts invested
in each Investment Fund on that date, decreased by all such
withdrawals and distributions since the preceding Valuation Date.
6.4 Statement of Account. The computations required in
this Article VI shall be made as soon as practicable following each
Valuation Date. Not less frequently than quarterly, the Plan
Administrator shall prepare and furnish, or cause to be prepared
and furnished, to each Participant a statement of the status of his
Accounts in the Trust Fund, which statement shall show the gross
amount of each Account in which each Investment Fund as of the last
day of each Plan Quarter.
<PAGE>
ARTICLE VII--CODE SECTION 402(G), SECTION 401(K) AND
SECTION 401(m) LIMITATIONS
7.1 Definitions. For purposes of this Article, the
following terms and phrases shall have the meanings as set forth
therein:
(a) "Code Section 414(q) Compensation" shall mean
for any Plan Year, Code Section 414(s) Compensation, as defined in
subsection (b) below, but adding back the elective amounts as
provided in paragraph (1) therein and without regard to the Plan
participation compensation provision in paragraph (2) therein.
(b) "Code Section 414(s) Compensation" shall mean,
for any Plan Year, any one of the permitted Code Section 415
Compensation definitions of Article VIII of the Plan, subject to
the following provisions:
(1) Inclusion of Elective Amounts. For any Plan
Year, NSS, in its discretion, may elect to include in any Code
Section 414(s) Compensation definition the Participant's: (A)
401(k) Contributions or other elective deferrals (as defined in
Section 402(a)(8) of the Code) under a plan maintained by an
Employer or Affiliated Company; and (B) elective contributions
under a cafeteria plan as described in Section 125 of the Code
maintained by an Employer or Affiliated Company; provided in each
such case such inclusion is made uniformly for all Participants of
the Plan.
(2) Plan Participation Compensation. For any
Plan Year, NSS, in its discretion, may elect to limit a
Participant's Code Section 414(s) Compensation to the portion of
the Participant's Code Section 414(s) Compensation received in the
part of the Plan Year during which the Participant was an Eligible
Employee of the Plan.
(3) $200,000/$150,000 Compensation Limitation.
Effective with Plan Years beginning on and after the January 1,
1989, a Participant's Code Section 414(s) Compensation for any Plan
Year, as determined pursuant to the foregoing provisions of this
subsection, shall not exceed $200,000 or, for Plan Years beginning
on and after January 1, 1994, $150,000, or such greater or lesser
amount as designated by the Secretary of the Treasury for the Plan
Year.
(c) "Earnings" shall mean the earnings, gain and
loss (whether realized or unrealized), net of applicable expenses,
as actually allocated to a Participant's Account under the normal
provisions of the Plan as contained in Article VI.
(d) "Gap Period Months" shall mean the number of
months which follow the end of the Plan Year (or, if applicable,
<PAGE>
the calendar year) and precede the applicable distribution, with a
distribution occurring on or before the fifteenth day of a month
being treated as having occurred on the last day of the preceding
month and a distribution occurring after the fifteenth day of a
month being treated as having been made on the first day of the
next following month.
(e) "Highly Compensated Employee" shall mean any
Employee who, during either the Plan Year or the Lookback Year (the
twelve month period immediately preceding the Plan Year) meets the
requirements of paragraph (1) below, subject to paragraphs (2), (3)
and (4) below, and a former Highly Compensated Employee under
paragraph (5) below.
(1) General Definition. A Highly Compensated
Employee is an Employee who: (A) was at any time a five percent
(5%) owner of the Employer (as defined in Section 416(i)(1)(B)(i)
of the Code); (B) received Code Section 414(q) Compensation from
the Employer or Affiliated Company in excess of $75,000 for such
Year; (C) received Code Section 414(q) Compensation from the
Employer or Affiliated Company in excess of $50,000 for such Year
and was a Participant of the top-paid group of the Employer or
Affiliated Company for such Year; or (D) was an officer of the
Employer and received Code Section 414(q) Compensation during such
Year that is greater than 50 percent (50%) of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code for such Year.
The $75,000 and $50,000 amounts shall be adjusted for inflation
pursuant to Section 415(d) of the Code.
(2) Special Top 100 Employee Rule. If an
Employee: (A) was not a Highly Compensated Employee during the
Lookback Year; (B) met any one of the requirements of paragraph (1)
for the Plan Year (other than the 5% owner requirement of
subparagraph (A) thereof); and (C) was not within the top 100
Employees ranked by Code Section 414(q) Compensation; then the
Employee shall not be considered a Highly Compensated Employee for
the Plan Year.
(3) Special Rule for Officers. If no officer
has met the applicable compensation requirement, the highest paid
officer for the Plan Year shall be treated as a Highly Compensation
Employee.
(4) Code Section 414(q) Regulations. The
determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees
treated as officers and the compensation that is considered, will
be made in accordance with Section 414(q) of the Code and any
Treasury Regulations promulgated thereunder.
(5) Former Employee. A Highly Compensated
Employee also shall include any former Employee who was a
<PAGE>
Participant of the Plan who: (A) separated from service (or was
deemed to have separated) prior to the Plan Year; (B) performs no
services for the Employer or an Affiliated Company during the Plan
Year; and (C) was a Highly Compensated Employee under the preceding
provisions for either the Plan Year of his separation or any Plan
Year ending on or after his 55th birthday.
(f) "Matching Account" shall mean a Participant's
Employer Contribution Account.
(g) "Matching Contributions" shall mean the
Participant's Employer Contributions.
(h) "Qualified Non-Elective Contributions" shall
have the meaning as so provided in Treasury Regulation Section
1.401(k)-1(g)(13).
7.2 Code Section 402(g) $7,000 Limit. Effective January
1, 1987, for each calendar year, the Plan Administrator shall
notify Participants of the Code Section 402(g) $7,000 Elective
Deferral limit contained in subsection (a) below. Upon such
notification, each Participant who has Excess Deferrals for the
calendar year shall notify the Plan Administrator of the amount of
the Excess Deferrals no later than the March 1st following the
calendar year. In such event, the Plan Administrator shall direct
the Trustee to distribute the Participant's Attributable Excess
Deferrals and Allocable Earnings thereon in the manner prescribed
by subsection (b) below.
(a) Code Section 402(g) $7,000 Elective Deferral
Limit. For any calendar year, a Participant's Elective Deferrals
shall not exceed $7,000 (as adjusted by the Secretary of the
Treasury).
(b) Corrective Distribution of Attributable Excess
Deferrals. For each calendar year a Participant's Elective
Deferrals exceed the limit contained in subsection (a) above, the
Plan Administrator shall direct the Trustee to distribute the
Participant's Attributable Excess Deferrals and Allocable Earnings
thereon to the Participant no later than the April 15th following
the calendar year. The amount of Attributable Excess Deferrals to
be distributed for a calendar year shall be reduced by the Excess
Contributions under Section 7.3 previously distributed for the Plan
Year beginning in such calendar year.
(c) Code Section 402(g) Related Definitions. For
purposes of this Section, the following terms and phrases shall
have the meanings as set forth below. These definitions shall be
modified, if applicable and to the extent provided, by the special
rules of Sections 7.7 and 7.8.
(1) "Elective Deferrals" of a Participant shall
mean the sum of: (A) his 401(k) Contributions allocated to his
<PAGE>
401(k) Contribution Account within the calendar year (as determined
pursuant to Section 7.8(e)); and (B) other elective deferrals as so
defined in Treasury Regulation Section 1.402(g)-1(b) under any
other plan of an Employer, Affiliated Company or any other employer
(whether or not related to the Employer or Affiliated Company).
(2) "Excess Deferrals" of a Participant shall
mean the amount of his Elective Deferrals for a calendar year in
excess of the Code Section 402(g) limit described in subsection (a)
above.
(3) "Attributable Excess Deferrals" of a
Participant shall be that amount of the Participant's Excess
Deferrals as designated by the Participant to be attributable to
the Plan.
(4) "Allocable Earnings" of a Participant who
has Attributable Excess Deferrals shall be equal to the sum of the
Subject Calendar Year Earnings and, through the Plan Year beginning
on January 1, 1993, the Gap Period Earnings.
(5) "Subject Calendar Year Earnings" of a
Participant shall be equal to the product of: (A) the Earnings
allocated to his 401(k) Contribution Account for the calendar year;
multiplied by (B) a fraction, with (i) the numerator being the
Participant's Attributable Excess Deferrals for the calendar year
and (ii) the denominator being the sum of (I) the balances of his
401(k) Contribution Account as of the first day of the calendar
year and (II) the 401(k) Contributions allocated to his 401(k)
Contribution Account for the calendar year.
(6) "Gap Period Earnings" of a Participant
shall be equal to the product of: (A) 10% (.10) of the Subject
Calendar Year Earnings; multiplied by (B) the number of Gap Period
Months prior to the distribution of the Participant's Attributable
Excess Deferrals.
(d) Disregarded 401(k) Contributions. 401(k)
Contributions which have been properly distributed to the
Participant as an Excess Amount pursuant to Section 8.6 (concerning
correction of Code Section 415 Excess Amounts) shall not be
considered 401(k) Contributions for purposes of this Section 7.2.
(e) Rule of Application--Next Apply Article VIII Code
Section 415 Limitations. After application of this Section 7.2,
the Plan Administrator should apply the provisions of Article VIII
(concerning the Code Section 415 limitations) for the following
reasons:
(1) Attributable Excess Deferrals, if properly
and timely distributed, are not Annual Additions for purposes of
the Code Section 415 contribution limitations; and
<PAGE>
(2) As noted in Sections 7.3 and 7.5, any Code
Section 415 Excess Amounts under Article VIII which are distributed
to the Participant pursuant to Section 8.6, and which consist of
401(k) Contributions and/or Thrift Contributions, are not
considered for purposes of the application of the Code Section
401(k) ADP and Section 401(m) ACP nondiscrimination tests of
Sections 7.3 and 7.5 below.
7.3 Code Section 401(k) ADP Test. Effective for Plan
Years beginning on and after January 1, 1987, for each Plan Year,
the Plan Administrator shall determine whether the Plan meets at
least one of the two limitations contained in subsection (a) below
for the Plan Year. In the event that neither limitation is met,
the Plan Administrator shall direct the Trustee to distribute the
Excess Contributions and Allocable Earnings thereon pursuant to
subsection (b) below.
(a) Code Section 401(k) ADP Test Limitations. The
following are the Code Section 401(k) ADP Limitations:
(1) 1.25 Limitation. The Average Deferral
Percentage for the group of ADP Participants who are Highly
Compensated Employees is not more than the Average Deferral
Percentage of the group of all other ADP Participants multiplied by
1.25.
(2) 2+2 Limitation. (A) The excess of the
Average Deferral Percentage for the group of ADP Participants who
are Highly Compensated Employees over the Average Deferral
Percentage of the group of all other ADP Participants is not more
than two percentage points; and (B) the Average Deferral Percentage
for the group of ADP Participants who are Highly Compensated
Employees is not more than the Average Deferral Percentage of the
group of all other ADP Participants multiplied by two.
(b) Corrective Distribution of Excess Contributions.
For each Plan Year the Plan fails to meet either limitation of
subsection (a) above, the Plan Administrator shall identify the
Participants who are Highly Compensated Employees who made Excess
Contributions and shall direct the Trustee to distribute the Excess
Contributions and Allocable Earnings thereon to the applicable
Participant prior to 2-1/2 months after the end of the Plan Year
(so as to avoid the employer-level 10% excise tax under Section
4979 of the Code) and in any event no later than the close of the
following Plan Year (so as to preserve the qualified status of the
Plan under Section 401(k) of the Code). The amount of Excess
Contributions to be distributed for a Plan Year shall be reduced by
the Attributable Excess Deferrals under Section 7.2 previously
distributed for the calendar year ending in the same Plan Year.
(c) ADP Related Definitions. For purposes of this
Section, the following terms and phrases shall have the meanings as
<PAGE>
set forth below. These definitions shall be modified, if
applicable and to the extent provided, by the special rules of
Sections 7.7 and 7.8.
(1) "Average Deferral Percentage" of the group
of ADP Participants who are Highly Compensated Employees and the
group all other ADP Participants shall mean the average of the
Individual Deferral Percentages of each Participant of the
respective groups.
(2) "ADP Participant" shall mean each Eligible
Employee who is either: (A) a Participant who makes or is eligible
to make 401(k) Contributions to the Plan at any time during the
Plan Year (including, if applicable, those Participants whose
401(k) Contributions are suspended by reason of or hardship
withdrawal rule of Section 10.2 of the Plan); or (B) if applicable
under the Plan, an Eligible Employee who could elect to become a
Participant at any time prior to the end of the Plan Year by
enrolling in the Plan pursuant to Article III.
(3) "Individual Deferral Percentage" of an ADP
Participant shall mean a percentage (rounded to the nearest one-
hundredth of a percent, e.g., 2.85%) which is the quotient of: (A)
the sum of the ADP Participant's 401(k) Contributions and Company
Qualified Non-Elective Contributions allocated to the Participant's
respective Account within the Plan Year (as determined pursuant to
Section 7.8(e)); divided by (B) the Participant's Code Section
414(s) Compensation for the Plan Year.
(4) "Excess Contributions" of a Participant who
is a Highly Compensated Employee shall be equal to the difference
(but no less than zero) of: (A) the sum of his 401(k) Contributions
and Company Qualified Non-Elective Contributions for the Plan Year;
less (B) the product of (i) the Participant's Code Section 414(s)
Compensation for the Plan Year multiplied by (ii) the Plan's
Nondiscriminatory Individual Deferral Percentage for the Plan Year.
(5) "Nondiscriminatory Individual Deferral
Percentage" of the Plan for the Plan Year shall be a percentage
determined by using a leveling method whereby, initially, the
Individual Deferral Percentage of the Highly Compensated Employee
with the highest Individual Deferral Percentage is reduced to the
extent necessary to either: (A) enable the Plan to meet either
limitation of subsection (a) above; or (B) cause the Participant's
Individual Deferral Percentage to be equal to the Individual
Deferral Percentage of the Participant who is a Highly Compensated
Employee with the next highest Individual Deferral Percentage and,
thereafter, with this method being repeated until the Plan meets
one of the Code Section 401(k) ADP Test limitations of subsection
(a) above.
<PAGE>
(6) "Allocable Earnings" of a Participant shall
be equal to the sum of the Subject Plan Earnings and, through the
Plan Year beginning on January 1, 1993, the Gap Period Earnings.
(7) "Subject Plan Year Earnings" of a
Participant shall be equal to the product of: (A) the Earnings
allocated to his 401(k) Contribution Account for the Plan Year;
multiplied by (B) a fraction, with (i) the numerator being the
Participant's Excess Contributions for the Plan Year and (ii) the
denominator being the sum of (I) his 401(k) Contribution Account as
of the first day of the Plan Year and (II) the 401(k) Contributions
and Company Qualified Non-Elective Contributions allocated to his
401(k) Contribution Account for the Plan Year.
(8) "Gap Period Earnings" of a Participant shall
be equal to the product of: (A) 10% (.10) of the Subject Plan Year
Earnings; multiplied by (B) the number of Gap Period Months prior
to the distribution of the Participant's Excess Contributions.
(d) Disregarded 401(k) Contributions. For purposes
of this Section 7.3, the following special rules shall apply:
(1) Distributed Code Section 415 Excess Amounts.
401(k) Contributions which have been properly distributed to the
Participant as an Excess Amount pursuant to Section 8.6 (concerning
correction of Code Section 415 Excess Amounts) shall not be
considered 401(k) Contributions for purposes of this Section 7.3.
(2) Non-HCE Attributable Excess Deferrals.
401(k) Contributions which repre-sent Attributable Excess Deferrals
of Highly Compensated Employees, but not non-Highly Compensated
Employees, shall be considered for purposes of this Section 7.3.
7.4 Code Section 401(a)(4) Excess Match Test. Effective
for Plan Years beginning on and after January 1, 1987, for each
Plan Year a Matching Contribution is made to the Plan, the Plan
Administrator shall determine whether any Participant's Matching
Contribution exceeds the limitation contained in subsection (a)
below for the Plan Year. In the event the limitation is exceeded,
the Plan Administrator shall direct the Trustee to forfeit the
Excess Matching Contributions and Allocable Earnings thereon
pursuant subsection (b) below.
(a) Code 401(a)(4) Excess Match Limitation. A
Participant's Corrective Distributions are not more than his
Supplemental Employee Contributions, so that none of his Basic
Employee Contributions, for which Matching Contributions are
allocated, have been distributed to him.
(b) Corrective Forfeiture of Excess Matching
Contributions. For each Plan Year the Plan fails to meet the
limitation in subsection (a) above, the Plan Administrator shall
identify those Participants who were allocated Excess Matching
<PAGE>
Contributions and shall direct the Trustee forfeit the Excess
Matching Contributions and Allocable Earnings thereon prior to 2-
1/2 months after the end of the Plan Year and in any event no later
than the close of the following Plan Year (so as to preserve the
qualified status of the Plan under Section 401(a) of the Code).
(c) Excess Match Related Definitions. For purposes
of this Section, the following terms and phrases shall have the
meanings as set forth below. These definitions shall be modified,
if applicable and to the extent provided, by the special rules of
Sections 7.7 and 7.8.
(1) "Corrective Distributions" of a Participant
shall mean the sum of his corrective distributions of: (A)
Attributable Excess Deferrals (under Section 7.2(b)) for the
calendar year ending with or within the Plan Year; (B) Excess
Amounts consisting of 401(k) Contributions and/or Thrift
Contributions (under Section 8.6); and (C) Excess Contributions
(under Section 7.3(b)) for the Plan Year, in each such case
exclusive of Allocable Earnings.
(2) "Excess Matching Contributions" of a
Participant shall mean the amount by which his Matching
Contributions for the Plan Year are attributable to Corrective
Distributions for the Plan Year which have exceeded his Basic
Employee Contributions for the Plan Year.
(3) "Allocable Earnings" of a Participant shall
be equal to the sum of the Subject Plan Year Earnings and, through
the Plan Year beginning on January 1, 1993, the Gap Period
Earnings.
(4) "Subject Plan Year Earnings" of a
Participant shall be equal to the product of: (A) the Earnings
allocated to the Participant's Matching Account for the Plan Year;
multiplied by (B) a fraction, with (i) the numerator being the
Participant's Excess Matching Contributions for the Plan Year and
(ii) the denominator being the sum of (I) the balance of the
Participant's Matching Account as of the first day of the Plan Year
and (II) the Matching Contributions allocated to the Participant's
Matching Account for the Plan Year.
(5) "Gap Period Earnings" of a Participant
shall be equal to the product of: (A) 10% (.10) of the Subject Plan
Year Earnings; multiplied by (B) the number of Gap Period Months
prior to the distribution of the Participant's Excess Matching
Contributions.
7.5 Code Section 401(m) ACP Test. Effective for Plan
Years beginning on and after January 1, 1987, for each Plan Year,
the Plan Administrator shall determine whether the Plan meets at
least one of the two limitations contained in subsection (a) below
for the Plan Year. In the event that neither limitation is met,
<PAGE>
the Plan Administrator shall direct the Trustee to distribute the
Excess Aggregate Contributions and Allocable Earnings thereon
pursuant to subsection (b) below.
(a) Code Section 401(m) ACP Test Limitations. The
following are the Code Section 401(m) ACP Limitations:
(1) 1.25 Limitation. The Average Contribution
Percentage for the group of ACP Participants who are Highly
Compensated Employees is not more than the Average Contribution
Percentage of the group of all other ACP Participants multiplied by
1.25.
(2) 2+2 Limitation. (A) The excess of the
Average Contribution Percentage for the group of ACP Participants
who are Highly Compensated Employees over the Average Contribution
Percentage of the group of all other ACP Participants is not more
than two percentage points; and (B) the Average Contribution
Percentage for the group of ACP Participants who are Highly
Compensated Employees is not more than the Average Contribution
Percentage of the group of all other ACP Participants multiplied by
two.
(b) Corrective Distribution of Excess Aggregate
Contributions. For each Plan Year the Plan fails to meet either
limitation contained in subsection (a) above, the Plan
Administrator shall identify the Participants who are Highly
Compensated Employees with Excess Aggregate Contributions and shall
direct the Trustee to distribute the Excess Aggregate Contributions
and Allocable Earnings thereon to the applicable Participant prior
to 2-1/2 months after the end of the Plan Year (so as to avoid the
employer-level 10% excise tax under Section 4979 of the Code) and
in any event no later than the close of the following Plan Year (so
as to preserve the qualified status of the Plan under Section
401(m) of the Code). With respect to the composition of such
Excess Aggregate Contributions, the distribution of the
Participant's Excess Aggregate Contributions shall be satisfied:
(1) first, from Thrift Contributions made during the Plan Year
until exhausted; and (2) second, from Matching Contributions made
during the Plan Year until exhausted. The Plan Administrator next
shall reapply the Section 7.4 Excess Matching Test taking into
consideration any distributions of Thrift Contributions.
(c) ACP Related Definitions. For purposes of this
Section, the following terms and phrases shall have the meanings as
set forth below. These definitions shall be modified, if
applicable and to the extent provided, by the special rules of
Sections 7.7 and 7.8.
(1) "Average Contribution Percentage" of the
group of ACP Participants who are Highly Compensated Employees and
the group of all other ACP Participants shall mean the average of
the Individual Contribution Percentages of each ACP Participant of
the respective groups.
<PAGE>
(2) "ACP Participant" shall mean each Eligible
Employee who is: (A) a Participant who receives or is eligible to
receive (if he made a Basic Employee Contribution to the Plan) a
Matching Contribution under the Plan; (B) a Participant who can
authorize a Thrift Contribution to the Plan; or (C) if applicable
under the Plan, an Eligible Employee who could elect to become a
Participant of the Plan at any time prior to the end of the Plan
Year by enrolling in the Plan pursuant to Article III.
(3) "Individual Contribution Percentage" of a
Participant shall mean a percentage (rounded to the nearest one-
hundredth of a percent, e.g., 2.85%) which is the quotient of: (A)
the sum of the ACP Participant's Matching Contributions and Thrift
Contributions allocated to the Participant's respective Accounts
within the Plan Year (as determined pursuant to Section 7.8(e));
divided by (B) the Participant's Code Section 414(s) Compensation
for the Plan Year.
(4) "Excess Aggregate Contributions" of a
Participant who is a Highly Compensated Employee shall be equal to
the difference (but not less than zero) of: (A) the Participant's
Matching Contributions and Thrift Contributions for the Plan Year;
less (B) the product of (i) the Participant's Code Section 414(s)
Compensation for the Plan Year, multiplied by (ii) the Plan's
Nondiscriminatory Individual Contribution Percentage for the Plan
Year.
(5) "Nondiscriminatory Individual Contribution
Percentage" of the Plan for the Plan Year shall be a percentage
determined by using a leveling method whereby, initially, the
Individual Contribution Percentage of the Highly Compensated
Employee with the highest Individual Contribution Percentage is
reduced to the extent necessary to either: (A) enable the Plan to
meet either Code Section 401(m) ACP Test limitation of subsection
(a) above; or (B) cause the Participant's Individual Contribution
Percentage to be equal to the Individual Contribution Percentage of
the Participant who is a Highly Compensated Employee with the next
highest Individual Contribution Percentage and, thereafter, with
this method being repeated until the Plan meets one of the Code
Section 401(m) ACP Test limitations of subsection (a) above.
(6) "Allocable Earnings" of a Participant shall
be equal to the sum of the Subject Plan Earnings and, through the
Plan Year beginning on January 1, 1993, the Gap Period Earnings.
(7) "Subject Plan Year Earnings" of a
Participant shall be equal to the product of: (A) the sum of the
Earnings allocated to the Participant's Matching Account and Thrift
Contribution Account for the Plan Year; multiplied by (B) a
fraction, with (i) the numerator being the Participant's Excess
Aggregate Contributions for the Plan Year and (ii) the denominator
being the sum of (I) the balances of the Participant's Matching
Account and Thrift Contribution Account as of the first day of the
<PAGE>
Plan Year and (II) the Matching Contributions and Thrift
Contributions allocated to the Participant's Matching Account and
Thrift Contribution Account for the Plan Year.
(8) "Gap Period Earnings" of a Participant
shall be equal to the product of: (A) 10% (.10) of the Subject Plan
Year Earnings; multiplied by (B) the number of Gap Period Months
prior to the distribution of the Participant's Excess Aggregate
Contributions.
(d) Disregarded Contributions. For purposes of this
Section, the following special rules shall apply:
(1) Distributed Code Section 415 Excess Amounts.
Thrift Contributions which have been properly distributed to the
Participant as an Excess Amount pursuant to Section 8.6 (concerning
correction of Code Section 415 Excess Amounts) shall not be
considered Thrift Contributions for purposes of this Section 7.5.
(2) Disregard Forfeited Excess Match. Any
Matching Contributions which are Excess Matching Contributions
forfeited pursuant to the provisions of Section 7.4 (concerning
Excess Matching Contributions) shall not be taken into account for
purposes of this Section 7.5.
7.6 Code Section 401(m) Multiple Use Test. Effective with
Plan Years beginning on and after January 1, 1989, if for any Plan
Year Multiple Use of the Alternative Limitation (as defined below)
has occurred for the Plan Year, the Plan Administrator shall
determine whether the Plan meets the aggregate limitation contained
in subsection (a) below for the Plan Year. In the event that the
limitation is not met, the Plan Administrator shall direct the
Trustee to take the prescribed corrective action pursuant to
subsection (b) below.
(a) IRC Section 401(m) Multiple Use/Aggregate
Limitation. The following is the Code Section 401(m) Multiple
Use/Aggregate Limitation: The Multiple Use Percentage for
Participants who are Highly Compensated Employees is not more than
the greater of following percentages:
(1) 1.25 Greater/2+2 Lesser. The sum of: (A)
125% of the greater of (i) the Average Deferral Percentage of all
other Participants or (ii) the Average Contribution Percentage of
all other Participants; and (B) two percentage points plus the
lesser of (i) the Average Deferral Percentage of all other
Participants or (ii) the Average Contribution Percentage of all
other Participants, in either case up to twice the lesser of such
Average Deferral Percentage or such Average Contribution
Percentage.
(2) 1.25 Lesser/2+2 Greater. The sum of: (A)
125% of the lesser of (i) the Average Deferral Percentage of all
<PAGE>
other Participants or (ii) the Average Contribution Percentage of
all other Participants; and (B) two percentage points plus the
greater of (i) the Average Deferral Percentage of all other
Participants or (ii) the Average Contribution Percentage of all
other Participants, in either case up to twice the greater of such
Average Deferral Percentage or such Average Contribution
Percentage.
(b) Correction of Multiple Use. For each Plan Year
the Plan fails to meet the limitation of subsection (a) above, the
Plan Administrator shall take either of the following actions:
(1) Reduce ACP To Meet Multiple Use Limitation.
The Plan Administrator may reduce the Average Contribution
Percentage of the group of Participants who are Highly Compensated
Employees, determined after application of Sections 7.4 and 7.5, to
the extent necessary to meet the limitation contained in subsection
(a). Thereafter, the Plan Administrator shall reapply the
provisions of Section 7.5 (concerning the IRC Section 401(m) ACP
Test) on the basis of the reduced Average Contribution Percentage
and thereby effect whatever distributions of Excess Aggregate
Contributions resulting therefrom.
(2) Recalculate ACP Using 1.25 Limitation. The
Plan Administrator may reduce the Average Contribution Percentage
of the group of Participants who are Highly Compensated Employees,
determined after application of Sections 7.4 and 7.5, to the extent
necessary to meet the limitation contained in Section 7.5(a)(1)
(the 1.25 limitation). Thereafter, the Plan Administrator shall
reapply the provisions of Section 7.5 (concerning the IRC Section
401(m) ACP Test) on the basis of the reduced Average Contribution
Percentage and thereby effect whatever distributions of Excess
Aggregate Contributions resulting therefrom.
(c) Multiple Use Related Definitions. For purposes
of this Section, the following terms and phrases shall have the
meanings as set forth below. These definitions shall be modified,
if applicable and to the extent provided, by the special rules of
Sections 7.7 and 7.8.
(1) "Multiple Use of the Alternative Limitation"
shall mean that both: (A) the Average Deferral Percentage,
determined after application of Sections 7.2 and 7.3 of the Plan,
exceeded the limitation contained in Section 7.3(a)(1) of the Plan
(the 1.25 limitation); and (B) the Average Contribution Percentage,
determined after application of Sections 7.4 and 7.5 of the Plan,
exceeded the limitation contained in Section 7.5(a)(1) of the Plan
(the 1.25 limitation); in each case for the group of ADP
Participants and ACP Participants who are Highly Compensated
Employees.
(2) "Multiple Use Percentage" shall mean the
sum of: (A) the Average Deferral Percentage, determined after
<PAGE>
application of Sections 7.2 and 7.3 of the Plan; and (B) the
Average Contribution Percentage, determined after application of
Sections 7.4 and 7.5, in each case of the group of ADP Participants
and ACP Participants who are Highly Compensated Employees.
7.7 Special Senior HCE Family Group Participant Rules.
For purposes of this Article, a Senior Highly Compensated Employee
and each of his Family Members who are Participants of the Plan
shall be aggregated and treated as a single Participant who is a
Highly Compensated Employee (the "Senior HCE Family Group
Participant"). With respect to overlapping family groups, if a
Participant is required to be aggregated as a Family Member of more
than one Senior HCE Family Group Participant, then all Participants
who are Family Members of these Senior HCE Family Group
Participants shall be treated as one Senior HCE Family Group
Participant.
(a) Single Individual Deferral and Contribution
Percentages. The Individual Deferral Percentage and the Individual
Contribution Percentage of the Senior HCE Family Group Participant
shall be determined in the same manner as therein prescribed,
except that the applicable Contributions of all persons of the
Senior HCE Family Group Participant shall be aggregated and divided
by the Family Group Compensation to reach one such Individual
Deferral Percentage and one such Individual Contribution Percentage
for the Senior HCE Family Group Participant.
(b) Corrective Distributions. In the case of any
required corrective distribution to the Senior HCE Family Group
Participant, the distribution shall be made in proportion to
respective contributions of the individual Participants of the
Senior HCE Family Group Participant.
(c) Senior HCE Related Definitions. For purposes of
this Section, the following terms and phrases shall have the
meanings as set forth below. These definitions shall be modified,
if applicable and to the extent provided, by the special rules of
Section 7.8.
(1) "Senior Highly Compensated Employee" shall
mean a Highly Compensated Employee who is: (A) a five percent (5%)
owner (as defined for purposes of the definition of Highly
Compensated Employee); or (B) a Highly Compensated Employee who is
one of the 10 most Highly Compensated Employees (ranked on the
basis of his Code Section 414(q) Compensation paid by the Employer
or Affiliated Company), in either foregoing case during either a
Plan Year or a Lookback Year.
(2) "Family Member" shall mean the Spouse,
lineal ascendants and descendants of the Senior Highly Compensated
Employee and the spouses of such lineal ascendants and descendants.
<PAGE>
(3) "Family Group Compensation" shall mean the
aggregate Code Section 414(s) Compensation of all persons of the
Senior HCE Family Group Participant, except that the Code Section
414(s) Compensation of the Senior Highly Compensated Employee and
his Core Family Members who are Participants of the Plan shall be
limited to $200,000 or, for Plan Years beginning on and after
January 1, 1994, $150,000, or such greater or lesser amount as may
be designated by the Secretary of the Treasury for the Plan Year.
(4) "Core Family Member" shall mean the Spouse
of the Senior Highly Compensated Employee and lineal descendants of
the Senior Highly Compensated Employee who have not yet reached
their 19th birthday by the end of the Plan Year.
7.8 Special Rules. The provisions of this Article VII
shall be subject to the following rules (as applicable):
(a) Nondiscrimination Plan Aggregation. If the Plan
satisfies the requirements of Sections 401(k), 401(a)(4) or 410(b)
of the Code (other than the average benefit percentage test under
Section 410(b)(2)(A)(ii) of the Code) only if aggregated with one
or more other plans of an Employer or an Affiliated Company, or if
one or more other such plans satisfy the requirements of Sections
401(k), 401(a)(4) or 410(b) of the Code (other than the average
benefit percentage test under Section 410(b)(2)(A)(ii) of the Code)
only if aggregated with the Plan, then the Average Deferral
Percentages and the Average Contribution Percentages shall be
calculated as if the Plan and all such plans were a single plan.
If the Plan is aggregated with one or more plans for purposes of
Sections 401(k) or 401(m) of the Code, the aggregated plans must
also satisfy Sections 401(a)(4) and 410(b) of the Code as though
they were a single plan. For Plan Years beginning on and after
January 1, 1990, plans may be aggregated in order to satisfy
Sections 401(k) and 401(m) of the Code only if they have the same
plan year.
(b) HCE Multiple Plan Participation. If during any
Plan Year a Participant who is a Highly Compensated Employee is
also a Participant in any other plan or arrangement described in
Sections 401(k) or 401(m) of the Code which is maintained by the
Employer or an Affiliated Company, then, for purposes of
determining the Individual Deferral Percentage and Individual
Contribution Percentage of the Participant, the applicable
contributions from such other plan shall be treated as made under
the Plan for the Plan Year. If the Participant participates in two
or more such plans or arrangements that have different Plan Years,
all such plans and arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, plans that are not permitted to be
aggregated under Treasury Regulation Section 1.401(k)-
1(b)(3)(ii)(B) or Section 1.401(m)-1(b)(3)(ii) (e.g., ESOPs) are
not aggregated for this purpose.
<PAGE>
(c) Separate Testing for Minimum Age and Service
Participants. If for any Plan Year the Plan satisfies Section
410(b) of the Code pursuant to the application of Treasury
Regulation Section 1.410(b)-6(b)(3) applicable to qualified
retirement plans benefiting minimum age and service employees, the
Plan shall treat the portion of the Plan benefiting minimum age and
service employees as a separate plan from the remainder of the Plan
for purposes of applying the ADP Test of Section 7.3, the ACP Test
of Section 7.5 and the Multiple Use Test of Section 7.6, pursuant
to the interpretive authority of IRS Announcement 93-105, 1993-27,
IRB 8/16/93, Part V.
(d) Contribution Deadline. For purposes of this
Article, all Contributions considered under this Article must be
made before the last day of the twelve month period immediately
following the Plan Year to which the Contributions relate.
(e) Considered Contributions. For purposes of
identifying the Contributions considered for any calendar year for
the Code Section 402(g) $7,000 limit of Sections 4.6(a) and 7.2,
and for any Plan Year for ADP and ACP nondiscrimination testing
under Sections 7.3 and 7.5, (1) the 401(k) Contributions and Thrift
Contributions shall be considered allocated to the Participants'
respective Accounts effective as of each pay day during the Plan
Year, as the date within the Plan Year on which the Participant
would have received the Contributions as compensation but for the
Participant's election to defer or contribute to the Plan and (2)
the Matching Contributions and Qualified Non-Elective Contributions
shall be considered allocated to the Participants' Matching
Accounts effective as of the last day of the Plan Year for which
the Contributions are being made to the Plan.
(f) Matching Contributions In ADP Test. NSS may
elect to treat all or a portion of the Matching Contributions
and/or Thrift Contributions made to the Plan as 401(k)
Contributions for purposes of the ADP Test of Section 7.3,
provided: (1) such Contributions when made are nonforfeitable and
subject to the same distribution restrictions applicable to 401(k)
Contributions (without regard to whether such Contributions are
actually taken into account under the ADP Test); and (2) the ACP
Test of Section 7.5 is met before the Matching Contributions and/or
Thrift Contributions are used in the ADP Test and continues to be
met following the exclusion of those Contributions are used in the
ADP Test; and (3) the conditions prescribed in Treasury Regulations
Section 1.401(k)-1(b)(5), which are incorporated herein by
reference, are satisfied.
(g) 401(k) Contributions In ACP Test. NSS may elect
to include all or a portion of 401(k) Contributions and/or
Qualified Non-Elective Contributions (if any) for purposes of
passing the ACP Test of Section 7.5, provided: (1) the ADP Test of
Section 7.3 is met before the 401(k) Contributions and/or Qualified
Non-Elective Contributions are used in the ACP Test and continues
to be met following the exclusion of those Contributions are used
<PAGE>
to meet the ACP Test; and (2) the applicable requirements of
Treasury Regulation Section 1.401(m)-1(b)(5), which are
incorporated by reference, are satisfied. The foregoing provision
shall not be interpreted to permit such use of 401(k) Contributions
in the ACP Test by the Chemed ESOP I or the Chemed ESOP II, except
as permitted by applicable Treasury Regulations.
(h) Alternative Income Determination. The Plan
Administrator may, instead of the methodology of determining
"Allocable Earnings" in this Article, use any reasonable method for
computing the income allocable to the Contributions, provided that
the method is: (1) nondiscriminatory and is used consistently for
all Participants and for all corrective distributions under the
Plan for the Plan Year; and (2) actually used by the Plan for
allocating income to Accounts.
(i) Charging Plan Accounts. The Participant's
Attributable Excess Deferrals, Excess Contributions, Excess
Matching Contributions and Excess Aggregate Contributions, and
Subject Plan Year Earnings thereon, shall be charged against the
Participant's applicable Accounts. However, the amounts of a
Participant's Gap Period Earnings shall be charged against the
Participant's applicable Accounts only to the extent such amounts
have been previously credited to these Accounts; If the
Participant's Gap Period Earnings have not yet been credited to the
Participant's Accounts, the Participant's Gap Period Earnings shall
be charged against the Plan's general earnings for the Plan Year
which includes the Gap Period Earnings.
(j) Records. The Employer shall maintain records
sufficient to demonstrate satisfaction of the limitations and
nondiscrimination tests under this Article and the amount of all
Contributions used thereunder.
(k) Treasury Regulations. The application of the
tests under this Article shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury. For periods
prior to the finalization of Treasury Regulations applicable
hereunder, NSS shall be entitled to rely, in lieu of any provision
under this Article, on any previous proposed or final such Treasury
Regulations as may be permitted under such Treasury Regulations.
ARTICLE VIII--CODE SECTION 415
CONTRIBUTION LIMITATIONS
8.1 Definitions. For the purpose of this Article, the
following terms and phrases shall have the meanings as set forth
therein:
(a) "Annual Additions" for a Limitation Year means
the sum of the 401(k) Contributions, Thrift Contributions, Employer
<PAGE>
Contributions, Profit Sharing Contributions and forfeitures
credited to a Participant's Accounts for the Limitation Year. For
purposes hereof, the following rules shall apply:
(1) The foregoing Contributions do not fail to
be Annual Additions merely because they are Attributable Excess
Deferrals, Excess Contributions or Excess Aggregate Contributions
(as such terms are defined in Article VII) or merely because such
Contributions may be corrected through distribution. However,
Attributable Excess Deferrals that are distributed in accordance
with Section 7.2(b) and Treasury Regulation Section 1.402(g)-
1(e)(2) and (3) are not Annual Additions.
(2) Any Excess Amounts applied under Section 8.6
in the Limitation Year will be considered Annual Additions for the
Limitation Year so applied.
(3) Amounts allocated to an individual medical
account, as defined in Section 415(l)(1) of the Code, which is part
of a defined benefit plan maintained by the Employer, are treated
as Annual Additions to a defined contribution plan.
(4) Amounts derived from contributions which are
attributable to post-retirement medical benefits (as described in
Section 419A(d)(2) of the Code) allocated to the separate account
of a Key Employee (as defined in Article IX) under a welfare
benefit fund (as defined in Section 419(e) of the Code) maintained
by the Employer, are treated as Annual Additions to a defined
contribution plan.
(5) For purposes of applying the limitations of
this Article, Annual Additions shall be allocated (or credited) to
the Accounts of Participants within the Limitation Year at the time
the Annual Additions are considered allocated pursuant to the
respective and applicable provisions of Article IV concerning
allocation of Plan contributions, and as otherwise consistent with
Treasury Regulation Section 1.415-6(b)(7) which is incorporated
herein by reference.
(b) "Code Section 415 Compensation" means for any
Limitation Year, at the discretion of NSS, compensation from the
Employer which meets any one of the following definitions:
(1) "Traditional Code Section 415 Compensation"
which shall mean the Participant's earned income, wages, salaries
and fees for professional services and other amounts received for
personal services actually rendered in the course of service with
the Employers (including, but not limited to, commissions paid to
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses)
actually paid or includable in gross income for the Limitation
Year, together with the special amounts of compensation described
in Treasury Regulation Section 1.415-2(d)(2)(ii)-(vi), actually
<PAGE>
paid or made available during the Limitation Year, but excluding:
(A) employer contributions to a plan of deferred compensation which
are not included in the Participant's gross income for the taxable
year in which contributed or Employer contributions to a simplified
employee pension plan to the extent those contributions are
deductible by the Participant; (B) any distributions from a plan of
deferred compensation (except as permitted by Treasury Regulation
Section 1.415-2(d)(3)(i)); (C) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified
stock option; (D) amounts realized from the exercise of a
nonqualified stock option or when restricted stock (or property)
held by the Participant either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture; and (E) amounts
which receive special tax benefits (such as premiums for group term
life insurance that are not includable in the Participant's gross
income) or contributions made by the Employer (whether or not under
a salary reduction agreement) toward the purchase of an annuity
contract described in Section 403(b) of the Internal Revenue Code
(whether or not the contributions are excludable from the
Participant's gross income).
(2) "FIT Withholding Compensation" which shall
mean the Participant's wages from the Employers within the meaning
of Section 3401(a) of the Code, within the meaning of Treasury
Regulation Section 1.415-2(d)(11)(ii).
(3) "Reported Form W-2 Compensation" which
shall mean wages from the Employers within the meaning of Section
3401(a) of the Code and all other payments of compensation to the
Participant by his Employer (in the course of the Employer's trade
or business) for which the Employer is required to furnish the
Participant a written statement under Sections 6041(d), 6051(a)(3)
and 6052 of the Code, all within the meaning of Treasury Regulation
Section 1.415-2(d)(11)(i).
Notwithstanding the foregoing, the Code Section 415 Compensation
for a Participant who is totally and permanently disabled (as
defined for purposes of Section 415 of the Code) is the Code
Section 415 Compensation the Participant would have received for
the Limitation Year if the Participant had been paid at the rate of
Code Section 415 Compensation paid immediately before becoming
totally and permanently disabled. This imputed Code Section 415
Compensation for the disabled Participant may be taken into account
only if (i) the Participant is not a Highly Compensated Employee
and (ii) Employer contributions made on behalf of the Participant
are fully vested and nonforfeitable when made.
(c) "Company Contributions" means the Employer
Contributions, Profit Sharing Contributions and the Qualified Non-
Elective Contributions under Article VII.
(d) "Defined Benefit Plan Fraction" means a
fraction, with: (1) the numerator being the Participant's Projected
<PAGE>
Annual Benefit (determined as of the close of the Limitation Year
in question) under the defined benefit plans (whether or not
terminated) maintained by the Employer; and (2) the denominator
being the lesser of (A) 125% of the dollar limitation in effect
under Sections 415(b)(1)(A) and 415(d) of the Code for the
Limitation Year or (B) 140% of the Participant's Highest Average
Code Section 415 Compensation, including any adjustments made under
Section 415(b) of the Code, for such Limitation Year.
Notwithstanding the foregoing, if the Participant participated, as
of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, then the
denominator of the Fraction will not be less than the product of
1.25 multiplied by the sum of the Projected Annual Benefit the
Participant accrued as of the end of the last Limitation Year of
the plans beginning before January 1, 1987, disregarding any
changes in the terms or conditions of the plans after May 5, 1986.
The preceding sentence applies only if each defined benefit plan,
and all defined benefit plans in the aggregate, satisfied the
requirements of Section 415 of the Code as of the last day of the
Limitation Year of each defined benefit plan that began in 1982.
(e) "Defined Contribution Plan Fraction" means a
fraction, with: (1) the numerator being the sum of the Annual
Additions to the Participant's accounts in all defined contribution
plans (whether or not terminated) maintained by the Employer for
the Limitation Year in question and for all prior Limitation Years,
including the Annual Additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans
(whether or not terminated) maintained by the Employer, and Annual
Additions attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, and individual medical accounts, as
defined in Section 415(1)(2) of the Code, maintained by the
Employer; and (2) the denominator being the sum of the lesser of
the following amounts determined for the Limitation Year in
question and for each prior Year of Service with the Employer
(regardless of whether the Employer maintained a defined
contribution plan): (A) 125% of the dollar limitation in effect
under Section 415(c)(1)(A) of the Code for the Limitation Year; or
(B) 140% of the Participant's Code Section 415 Compensation for the
Limitation Year. The determination of a Participant's Defined
Contribution Fraction shall also be subject to the following rules:
(1) If the Participant participated as of the
end of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more defined contribution plans
maintained by the Employer which were in existence on May 6, 1986,
the numerator of this Fraction will be adjusted if the sum of this
Fraction and the Defined Benefit Plan Fraction would otherwise
exceed 1.0. An amount equal to the product of (i) the excess of
the sum of those Fractions over 1.0, multiplied by (ii) the
denominator of this Fraction, will be permanently subtracted from
<PAGE>
the numerator of this Fraction. This adjustment shall be
calculated by using the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms
and conditions of the plans made after May 5, 1986, but using the
Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
(2) For the purpose of determining the Defined
Contribution Plan Fraction for any Limitation Year ending after
December 31, 1982, the Plan Administrator may elect, under Section
415 of the Code, that the denominator for each Participant for all
Limitation Years ending before January 1, 1983 shall be equal to
the product of: (A) the Defined Contribution Plan Fraction
denominator which would apply for the last Limitation Year ending
in 1982 if an election hereunder were not made: multiplied by (B)
a fraction, with (i) the numerator being the lesser of (I) $51,875
or (II) 1.04 times 25% of the Participant's Code Section 415
Compensation for the Limitation Year ending in 1981 and (ii) the
denominator being the lesser of (I) $41,500 or (II) 25% of the
Participant's Code Section 415 Compensation for the Limitation Year
ending in 1981. This election applies only if the plan
administrators of all defined contribution plans maintained by the
Employer also elect to use this modified Defined Contribution Plan
Fraction.
(3) If the Plan satisfied the applicable
requirements of Section 415 of the Code for all Limitation Years
beginning before January 1, 1987, an amount shall be subtracted
from the numerator of the Defined Contribution Plan Fraction (not
exceeding such numerator) as prescribed by the Secretary of the
Treasury so that the sum of the Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction does not exceed 1.0 for such
Limitation Year.
(f) "Employer" means: (1) the Employers; (2) any
Affiliated Company; and (3) any other entity which would become an
Affiliated Company if, for purposes of applying Sections 414(b) and
414(c) of the Code, the phrase "more than 50 percent" is
substituted for the phrase "at least 80%" each place it appears in
Section 1563(a)(1) of the Code (applicable to parent subsidiary
controlled groups).
(g) "Excess Amounts" means the excess of the
Participant's Annual Additions for the Limitation Year over the
Participant's Maximum Permissible Amount.
(h) "Highest Average Code Section 415 Compensation"
means the average Code Section 415 Compensation for the three
consecutive Years of Service with the Employer that produces the
highest average. For this purpose, a Year of Service with the
Employer is the 12-consecutive-month period used to measure Code
Section 415 Compensation designated in the Plan.
<PAGE>
(i) "Limitation Year" means the Plan Year. All
qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is changed, the new
Limitation Year must begin on a date within the Limitation Year in
which the change is made.
(j) "Maximum Permissible Amount" means the lesser
of: (1) $30,000 (or, if greater, 1/4 of the defined benefit dollar
limitation set forth in Section 415(b)(1)(A) of the Code in effect
for the Limitation Year); or (2) 25% of the Participant's Code
Section 415 Compensation for the Limitation Year. The
determination of a Participant's Maximum Permissible Amount shall
be subject to the following provisions (as applicable):
(1) If a short Limitation Year is created
because of a change in the Limitation Year, the Maximum Permissible
Amount will not exceed the $30,000 dollar amount set forth in
clause (1) above multiplied by a fraction, with: (A) the numerator
being the number of months in the short Limitation Year; and (B)
the denominator being 12.
(2) In computing the Maximum Permissible Amount
for a Participant, the Code Section 415 Compensation limitation of
clause (2) above shall not apply to: (A) any contribution for
medical benefits (within the meaning of Section 419A(f)(2) of the
Code) after separation from service which is otherwise treated as
an Annual Addition; or (B) any amount representing a contribution
to an individual medical benefit account which is otherwise treated
as an Annual Addition under Section 415(l)(1) of the Code.
(k) "Net Gain And Net Loss" means the increases and
decreases respectively in the value of the Accounts and each
Investment Fund between Valuation Dates, as defined in Article VI
and as otherwise provided in regulations prescribed by the
Secretary of the Treasury.
(l) "Permitted Excess Amount Reason" means that the
Excess Amount is attributable to: (1) the allocation of
forfeitures; (2) a reasonable error in estimating a Participant's
Compensation or his Code Section 415 Compensation; (3) a reasonable
error in determining the amount of Participant's 401(k)
Contributions or other elective deferrals (within the meaning of
Section 402(g)(3) of the Code) that may be made with respect to any
Participant under the Code Section 415 limits of this Article VIII;
or (4) under other limited facts and circumstances which the
Secretary of the Treasury finds justify the availability of the
rules set forth in this Article VIII with respect to Excess Amounts
attributable to a Permitted Excess Amount Reason.
(m) "Projected Annual Benefit" means the annual
retirement benefit (adjusted to an actuarial equivalent straight
life annuity if the benefit is expressed in a form other than a
straight life annuity or a qualified joint and survivor annuity) to
<PAGE>
which the Participant would be entitled under the terms of the
defined benefit plan (whether or not terminated) on the assumptions
that he continues his service until his normal retirement date
under the plan (or current age, if later), and that his aggregate
compensation continues at the same rate as is in effect for the
current Limitation Year and all other relevant factors used to
determine benefits under the defined benefit plan remain constant
for all future Limitation Years.
(n) "Qualified Benefit Plan" means a qualified
retirement plan under Section 401(a) of the Code, a welfare benefit
fund as defined under Section 419(e) of the Code or an individual
medical account as defined in Section 415(e)(2) of the Code which
provided an Annual Addition.
8.2 Limitation If a Participant Does Not Participate in
Any Other Plan.
(a) Limitation. If a Participant does not
participate in, and has never participated in, another Qualified
Benefit Plan maintained by the Employer, the amount of the Annual
Additions which may be allocated to the Participant's Accounts for
any Limitation Year shall not exceed the Maximum Permissible Amount
or any other limitation contained in the Plan. If the Plan
contributions that would otherwise be credited or allocated to the
Participant's Accounts would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, then, in
an uniform and nondiscriminatory manner and consistent with Section
4.6(c), the amount contributed or allocated shall be reduced so
that the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount.
(b) Correction of Excess Amounts. Otherwise, if
there is an Excess Amount, and such Excess Amount exists as a
result of a Permitted Excess Amount Reason, the Excess Amount shall
be disposed in the manner prescribed in Section 8.6 of the Plan.
8.3 Limitation If a Participant Participates in Another
Defined Contribution Plan.
(a) Limitation. This Section shall apply if, in
addition to the Plan, the Participant participates during any
Limitation Year in another Qualified Benefit Plan which is a
defined contribution plan maintained by the Employer. The Annual
Additions which may be allocated to a Participant's Account under
this Plan for any such Limitation Year shall not exceed the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under the Plan are less than the Maximum Permissible
Amount and the Plan contributions that would otherwise be allocated
to the Participant's accounts in any such other Qualified Benefit
Plan would cause the Annual Additions for the Limitation Year to
exceed this limitation, then the amount contributed or allocated
under such other Plan shall be reduced so that the Annual Additions
<PAGE>
under all the Plans for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under the Plan are equal to or greater than the Maximum
Permissible Amount, no amount will be allocated to the
Participant's accounts in such other Qualified Benefit Plan for the
Limitation Year.
(b) Order of Time for Excess Annual Additions. If a
Participant's Annual Addition under the Plan and such other
Qualified Benefit Plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions
attributable to a Qualified Benefit Plan which is a welfare benefit
fund or individual medical account will be deemed to have been
allocated first regardless of the actual allocation date.
(c) Allocation of Excess Annual Additions Among
Plans. If an Excess Amount was allocated to a Participant's
Accounts on an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount attributed to
the Plan will be the product of: (1) the total Excess Amounts
allocated as of that date; multiplied by (2) the ratio of (A) the
Annual Additions allocated to the Participant's Accounts for the
Limitation Year as of that date under the Plan, to (B) the total
Annual Additions allocated to the Participant's Accounts or the
Limitation Year as of that date under this and all the other
qualified defined contribution plans.
(d) Correction of Excess Amounts. Otherwise, if
there is an Excess Amount which is attributable to the Plan, and
such Excess Amount is the result of a Permitted Excess Amount
Reason, the Excess Amount shall be disposed in the manner
prescribed in Section 8.6 of the Plan.
8.4 Limitation if the Participant Participates in a
Defined Benefit Plan.
(a) Limitation. If a Participant also participates
in any Qualified Benefit Plan which is a defined benefit plan
maintained by the Employer, then the sum of the Defined
Contribution Plan Fraction and the Defined Benefit Plan Fraction
for any Limitation Year shall not exceed 1.0. If the sum of Plan
contributions that would otherwise be credited to the Participant's
Accounts would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, then, in an uniform and
nondiscriminatory manner and consistent with Section 4.6(c), the
amount contributed or allocated will be reduced so that the Annual
Addition for the Limitation Year will equal the Maximum Permissible
Amount.
(b) Correction of Excess Amounts. Otherwise, if
there is an Excess Amount, and such Excess Amount exists as a
<PAGE>
result of a Permitted Excess Amount Reason, the Excess Amount shall
be disposed in the manner prescribed in Section 8.6 of the Plan.
(c) Combined DB/DC 1.0 Limitation. If in any
Limitation Year, after application of paragraphs (1) and (2) above,
the sum of a Participant's Defined Contribution Plan Fraction and
Defined Benefit Plan Fraction would exceed 1.0, then the
Participant's 401(k) Contributions and Thrift Contributions shall
be returned pursuant to Section 8.6 so that the sum of the
Participant's Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction will not exceed 1.0. If the sum of the
Participant's Defined Contribution Plan Fraction and Defined
Benefit Plan Fraction exceed 1.0 after the return described in the
preceding sentence, then the rate of accrual of benefits under the
defined benefit plan will be reduced so that the sum of the
Participant's Defined Contribution Plan Fraction and Defined
Benefit Plan Fraction will not exceed 1.0.
8.5 Required Aggregation of Plans. Consistent with
Sections 8.2, 8.3 and 8.4, for purposes of applying the limitations
of this Article, and except as otherwise provided in Treasury
Regulations Section 1.415-8(d)(2) and Section 1.415-7(h)(2)
(relating to Code Section 403(b) annuity contracts), all defined
benefit plans (whether or nor terminated) of an Employer are to be
treated as one defined benefit plan and all defined contribution
plans (whether or not terminated) of an Employer are to be treated
as one defined contribution plan. For purposes hereof and wherever
used in this Article VIII, the term "defined contribution plan" or
"defined benefit plan" means a defined contribution plan (within
the meaning of Section 414(i) of the Code) or a defined benefit
plan (within the meaning of Section 414(j) of the Code, whichever
applies, which is (a) a plan described in section 401(a) which
includes a trust which is exempt from tax under Section 501(a) of
the Code, (b) an annuity plan described in Section 403(a) of the
Code, (c) an annuity contract described in Section 403(b) of the
Code, (d) an individual retirement account described in Section
408(a) of the Code, (e) an individual retirement annuity described
in Section 408(b) of the Code or (f) a simplified employee pension
described in Section 408(k) of the Code.
8.6 Disposition of Excess Amounts. If there is an Excess
Amount, it shall be disposed of in this manner:
(a) Reallocate Employer Contributions. The Excess
Amount that consists of Employer Contributions shall be held
unallocated in a suspense account until the next calendar month in
which Employer Contributions could be allocated among Participants'
Employer Contribution Accounts. The Plan Administrator in its sole
discretion may then treat the excess according to either one of the
following provisions:
(1) The Excess Amount attributable to the
affected Participant will be used to reduce Employer Contributions
<PAGE>
allocated to his Employer Contribution Account for that month (and
succeeding months, as is necessary). If the Participant is not
eligible to receive an allocation of Employer Contributions as of
the last day of the month in which the excess occurs, then the
excess will be allocated as of the last day of the month among the
Employer Contribution Accounts of all of the remaining Participants
who are otherwise eligible to receive an allocation of Employer
Contributions. The excess shall reduce Employer Contributions on
behalf of all of those remaining Participants for that month (and
succeeding months, if necessary).
(2) The Excess Amount attributable to the
affected Participant will be allocated as of the last day of the
month among the Employer Contribution Accounts of all of the
remaining Participants who are otherwise eligible to receive an
allocation of Employer Contributions. The excess shall reduce
Employer Contributions on behalf of all of those remaining
Participants for that month (and succeeding months, if necessary).
In the event of termination of the Plan, the suspense account shall
revert to the Employer to the extent it cannot be allocated among
the Employer Contribution Accounts of eligible Participants under
Section 415 of the Internal Revenue Code. If such a suspense
account exists at any time during the Limitation Year, it will not
participate in the allocation of Net Gains and Net Losses.
At the election of NSS, the provisions of this subsection (a) may
be applied first to Profit Sharing Contributions and then to
Employer Contributions, or in the reverse order.
(b) Return Supplemental Employee Contributions to
Thrift Contribution Account. If, after reallocating Employer
Contributions, an Excess Amount still exists, any Supplemental
Employee Contributions made by the Participant to his Thrift
Contribution Account that cause the Excess Amount shall be returned
to the Participant.
(c) Return Supplemental Employee Contributions to
401(k) Contribution Account. If, after returning the Supplemental
Employee Contributions to a Thrift Contribution Account, an Excess
Amount still exists, the Excess Amount consisting of Supplemental
Employee Contributions to the 401(k) Contribution Account shall be
returned to the Participant.
(d) Return Basic Employee Contributions to Thrift
Contribution Account. If, after returning the Supplemental
Employee Contributions to a 401(k) Contribution Account, an Excess
Amount still exists, the Excess Amount consisting of Basic Employee
Contributions to a Thrift Contribution Account necessary to
eliminate the Excess Amount shall be returned to the Participant.
(e) Return Basic Employee Contributions to 401(k)
Contribution Account. If, after returning the Basic Employee
<PAGE>
Contributions to a Thrift Contribution Account, an Excess Amount
still exists, the Excess Amount consisting of Basic Employee
Contributions to a 401(k) Contribution Account necessary to
eliminate the Excess Amount shall be returned to the Participant.
8.7 Limitation on Subsequent Employer Contributions.
Notwithstanding any other provision of this Article, if a suspense
account was in existence on the first day of a Limitation Year as
a result of the application of this Article, all amounts in the
suspense account must be allocated among the Accounts of
Participants in the manner prescribed in this Article before any
Employer Contributions, 401(k) Contributions or Thrift
Contributions which would constitute Annual Additions may be made
for that Limitation Year.
ARTICLE IX--CODE SECTION 416
TOP-HEAVY PROVISIONS
9.1 Definitions. For the purpose of this Article, the
following terms and phrases shall have the meanings as set forth
therein:
(a) "Aggregate Compensation" means Code Section 415
Compensation as defined in Article VIII.
(b) "Collective Bargaining Agreement" means an
agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and one or
more Employer if there is evidence that retirement benefits were
the subject of good faith bargaining between the employee
representatives and the Employer.
(c) "Determination Date" means: (1) for any Plan
Year after the first Plan Year of the Plan, the last day of the
preceding Plan Year; and (2) for the first Plan Year of the Plan,
the last day of that Plan Year.
(d) "Employer" means the Employer and each
Affiliated Company.
(e) "Employer Contributions" means the sum of the
401(k) Contributions, Employer Contributions, Profit Sharing
Contributions and Company Qualified Non-Elective Contributions.
(f) "Key Employee" means any Employee or former
Employee (and his Beneficiaries) who at any time during the Plan
Year which contains the Determination Date and any of the four
preceding Plan Years is or was: (1) an officer of the Employer
having annual Aggregate Compensation greater than 50% of the
defined benefit dollar limitation in effect for the Plan Year under
<PAGE>
Section 415(b)(l)(A) of the Code; (2) one of the ten Employees
having annual Aggregate Compensation greater than the dollar
limitation in effect under Section 415(c)(1)(A) of the Code owning
(or considered as owning under Section 318 of Code) the largest
interests in the Employer; (3) a five percent owner of the
Employer; or (4) a one percent owner of the Employer having an
annual Aggregate Compensation of more than $150,000. The
determination of who is a Key Employee shall be made in accordance
with Section 416(i)(1) of the Internal Revenue Code and the
regulations thereunder. For the purposes of computing an
individual's ownership interest in the Employer under paragraphs
(2), (3) and (4), the aggregation rules of Sections 414(b), (c) and
(m) of the Internal Revenue Code shall be disregarded.
(g) "Permissive Aggregation Group" means a group of
plans which includes: (1) all plans in the Required Aggregation
Group; and (2) any other plan or plans maintained by the Employer
which the Employer elects to aggregate and which, when considered
with the Required Aggregation Group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Internal Revenue
Code.
(h) "Required Aggregation Group" means a group of
plans which includes: (1) each plan of the Employer which is
qualified under Section 401(a) of the Code and in which at least
one Key Employee participates (including any plan terminated during
the five-year period ending on the Determination Date); and (2) any
other qualified plan of the Employer which enables a plan described
in paragraph (1) to meet the requirements of Sections 401(a)(4) or
410 of the Code.
(i) "Super Top-Heavy Plan" means the plan for any
Plan Year that it is described in Section 9.2(b).
(j) "Top-Heavy Plan" means the plan for any Plan
Year that is described in Section 9.2(a).
(k) "Top-Heavy Ratio" means a fraction, with: (1)
the numerator being the sum of (A) the account balances under the
Plan and any aggregated defined contribution plans (including any
simplified employee pension plan) of all Key Employees and (B) the
present value of accrued benefits under the aggregated defined
benefit plans for all Key Employees; and (2) the denominator being
the sum of (A) the account balances under the defined contribution
plans for all Participants and (B) the present value of accrued
benefits under the defined benefit plans for all Participants. The
determination of the Plan's Top-Heavy Ratio shall be subject to the
following rules:
(1) Both the numerator and the denominator of
the Top-Heavy Ratio shall be adjusted for any distribution of any
account balance or any accrued benefit made in the five-year period
ending on the Determination Date, including distributions under a
<PAGE>
terminated plan which, if it had not been terminated, would have
been in the Required Aggregation Group.
(2) The value of the account balances and,
except as provided in Section 416 of the Code for the first and
second years of a defined benefit plan, the present value of
accrued benefits shall be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date.
(3) The account balances and accrued benefits of
an individual who is not a Key Employee but who was a Key Employee
in a prior Plan Year shall be disregarded.
(4) The calculation of the Top-Heavy Ratio, and
the extent to which distributions, rollovers, and transfers are
taken into account, will be made in accordance with Section 416 of
the Code and regulations thereunder.
(5) Qualified Voluntary Employee Contributions
(as defined in Section 219(e) of the Code) will not be taken into
account for purposes of computing the Top-Heavy Ratio.
(6) When aggregating plans, the value of the
account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same
calendar year.
(7) The present value of accrued benefits shall
be computed as if the employee voluntarily terminated service as of
the Valuation Date. The present value shall be computed using the
interest and post-retirement mortality assumptions last used by the
actuary of the defined benefit plan to determine whether the
defined benefit plan was a Top-Heavy Plan. Assumptions as to
future withdrawal or future salary increases may not be used.
Except in the case where the defined benefit plan provides for a
non-proportional subsidy, the present value shall reflect a benefit
payable commencing at normal retirement age (or attained age, if
later). Where the plan provides for a non-proportional subsidy,
the benefit shall be assumed to commence at the age at which the
benefit is most valuable. If two or more defined benefit plans are
included in the Required Aggregation Group or Permissive
Aggregation Group, all such plans shall use the same actuarial
assumptions to determine present value.
(8) The account balances and accrued benefits of
any individual who has not performed any services for any employer
maintaining the plan at any time during the 5-year period ending on
the Determination Date shall be disregarded.
(9) If the Employer or an Affiliated Company
maintains, in addition to this Plan, a defined benefit plan or
target benefit plan in which one or more Key Employees participate,
<PAGE>
or any other plan on which such a defined or target benefit plan
depends to meet coverage and nondiscrimination requirements, then
the accrued benefit of any Employee other than a Key Employee shall
be determined under (i) the method, if any, that uniformly applies
for accrual purposes under all plans maintained by an Employer or
Affiliated Company, or (ii) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section 411(b)(l)(C)
of the Code.
(l) "Valuation Date" means the last day of the Plan
Year.
9.2 Top-Heavy and Super Top-Heavy Status. For any Plan
Year, the Plan will be a Top Heavy Plan or a Super Top Heavy Plan
determined as follows:
(a) Top-Heavy Plan. For any Plan Year the Plan will
be a "Top-Heavy Plan" if any of the following conditions exist: (1)
the Plan is not part of a Required Aggregation Group or Permissive
Aggregation Group and the Top-Heavy Ratio for the Plan exceeds 60%;
(2) the Plan is part of a Required Aggregation Group but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60%; or (3) the Plan is part of
a Required Aggregation Group and part of a Permissive Aggregation
Group and the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60%.
(b) Super Top-Heavy Plan. For any Plan Year the Plan
will be a "Super Top-Heavy Plan" if any of the following conditions
exist: (1) the Plan is not part of a Required Aggregation Group or
Permissive Aggregation Group and the Top-Heavy Ratio for the Plan
exceeds 90%; (2) the Plan is part of a Required Aggregation Group
but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the Required Aggregation Group exceeds 90%; or (3) the
Plan is part of a Required Aggregation Group and part of a
Permissive Aggregation Group and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 90%.
9.3 Minimum Contribution. The Employer Contributions and
forfeitures allocated on behalf of any Participant who is not a Key
Employee shall not be less than the lesser of: (i) three percent
(3%) of the Participant's Aggregate Compensation; or (ii) in the
case where the Employer has no defined benefit plan which
designates the Plan to satisfy Section 401 of the Code, the largest
percentage of Employer Contributions and forfeitures, as a
percentage of the Key Employee's Code Section 415 Compensation (as
defined in Article VIII), allocated on behalf of any Key Employee
for that Plan Year. This minimum allocation shall be determined
without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other Plan provisions,
the Participant would not otherwise be entitled to receive an
allocation, or would have received a smaller allocation, in the
<PAGE>
Plan Year because of the Participant's failure to: (i) complete any
service; (ii) make any mandatory contributions, or 401(k)
Contributions or Thrift Contributions, to the Plan; or (iii) earn
sufficient compensation otherwise required to receive an
allocation.
(a) Offset Other Contributions. If the Employer
Contributions and allocations otherwise provided by the Plan (other
than (i) 401(k) Contributions and (ii) Matching Contributions used
for purposes of the Code Section 401(m) ACP Test under Article VII)
are at least equal to the minimum allocation required under the
foregoing provisions of this Section 9.3, then no additional
minimum allocation will be made for Participants otherwise
described in this Section 9.3 in this Plan or in any other defined
contribution plan maintained by the Employer in which they
participate. If such Employer Contributions and allocations
otherwise provided by the Plan are less than the minimum required
allocation, then: (i) the minimum required allocation will be made
in the Plan for Participants who do not participate in any other
defined contribution plan maintained by the Employer; and (ii) for
Participants who also participate in any other defined contribution
plan maintained by the Employer, the aggregate Employer
Contributions and allocations otherwise provided by the Plan and
the other defined contribution plans will be increased so that they
are equal in the aggregate to the minimum required allocation under
this Section 9.3.
(b) Defined Benefit Plan Participation. If a
Participant who is otherwise entitled to a minimum required
allocation under this Section 9.3 also participates in a defined
benefit plan maintained by the Employer that is a Top-Heavy Plan
during that Plan Year, then the minimum benefits and minimum
allocations that would otherwise be required in each Plan will not
be duplicated. The minimum required allocation will not be
required if the defined benefit plan provides an annual benefit for
the Participant in the form of (or the actuarial equivalent of) a
single life annuity equal to the lesser of: (1) the product of (A)
two percent of the Participant's average compensation for the five
consecutive years in which the Participant had the highest
Aggregate Compensation and (B) his Years of Service during which
the plan was a Top-Heavy Plan; or (2) 20% of that average
compensation.
(c) Additional Rules. This Section 9.3 shall not
apply to any Participant who was not employed by the Employer on
the last day of the Plan Year. This Section 9.3 shall not apply to
any Employee included in a unit of employees covered by a
Collective Bargaining Agreement.
9.4 Minimum Vesting. If the Plan becomes a Top-Heavy Plan
or a Super Top-Heavy Plan, the following minimum vesting schedule
shall automatically apply to the Plan:
<PAGE>
<TABLE>
<CAPTION>
Years of Service Percentage
<S> <C>
Less than 2 0%
2 years 20%
3 Years 40%
4 Years 60%
5 Years 80%
6 Years 100%
</TABLE>
The minimum vesting schedule applies to all benefits within the
meaning of Section 411(a)(7) of the Code, including benefits
accrued before the effective date of Section 416 of the Code and
benefits accrued before the Plan became a Top-Heavy Plan. No
reduction in vested benefits may occur in the event the Plan ceases
to be a Top-Heavy Plan for any Year. This Section 9.4 shall not
apply to: (i) the Account balances of any Employee who does not
have an Hour of Service after the Plan initially becomes a Top-
Heavy Plan; this Employee's vested portion of his Account will be
determined without regard to this Section 9.4; or (ii) an Employee
who is included in a unit of employees covered by a Collective
Bargaining Agreement.
9.5 Modification of Code Section 415 Limits. If Section
8.4 applies for any Plan Year (concerning a Participant's
participation in a defined benefit plan) for which the Plan is a
Top-Heavy Plan or Super Top-Heavy Plan, then the limitations on
contributions and benefits described in Article VIII shall be
modified as follows: (a) The definitions of Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction in Article VIII are
changed by substituting "100%" for "125%"; and (b) The definition
of the numerator of the Defined Contribution Fraction set forth in
Article VIII is changed by substituting "$41,500" for "$51,875".
Notwithstanding the foregoing, if, but for this sentence, the
foregoing provisions would begin to apply, the application of the
foregoing provisions of this Section will be suspended with respect
to any Participant so long as there are no: (i) Plan contributions
or forfeitures allocated to the Participant's Accounts; or (ii)
accruals for the Participant under the defined benefit plan.
ARTICLE X -- LOANS AND WITHDRAWALS
10.1 Withdrawals from Thrift Contribution Accounts. A
Participant or Inactive Participant may apply to the Plan
Administrator for a withdrawal of amounts from his Thrift
Contribution Account. In that event, the Plan Administrator shall
direct the Trustee to make the payment requested within 60 days of
the Plan Administrator's receipt of the withdrawal request. For
purposes of Plan administration only, but not necessarily for
determining a Participant's taxable income resulting from Plan
<PAGE>
withdrawals, withdrawals from a Thrift Contribution Account shall
be made in the following manner:
(a) First, all or any part of a Participant's
Supplemental Employee Contributions credited to his Thrift
Contribution Account shall be withdrawn;
(b) After withdrawing all of his Supplemental
Employee Contributions credited to his Thrift Contribution Account,
all or any part of the earnings attributable to his Supplemental
Employee Contributions to his Thrift Contribution Account shall be
withdrawn;
(c) After withdrawing all Supplemental Employee
Contributions and earnings thereon credited to his Thrift
Contribution Account, a Participant may withdraw all or any part of
his Basic Employee Contributions credited to his Thrift
Contribution Account; and
(d) After withdrawing all Basic Employee
Contributions credited to his Thrift Contribution Account, a
Participant may withdraw all or any part of the earnings on his
Basic Employee Contributions to his Thrift Contribution Account.
10.2 Withdrawals from 401(k) Contribution Accounts and
Employer Contribution Accounts.
(a) Withdrawals. A Participant or Inactive
Participant who has first withdrawn the entire value of his Thrift
Contribution Account may apply to the Plan Administrator for these
additional withdrawals:
(1) First, all or any portion of the fully
vested Employer Contributions credited to his Employer Contribution
Account; and
(2) After withdrawing the entire value of his
vested Employer Contribution Account, then all or any portion of
his 401(k) Contribution Account.
(b) Determination Date. The amount that a
Participant may withdraw will be determined as of the Valuation
Date following the date the Plan Administrator receives the
Participant's application.
(c) Limitation on Withdrawals from 401(k)
Contribution Account.
(1) General Rule. A Participant or Inactive
Participant may not receive distributions from his 401(k)
Contribution Account prior to attaining Age 59-1/2 unless the
distribution is attributable to the Participant's hardship which
meets the requirements of subsection (d) below.
<PAGE>
(2) Approval by the Plan Administrator. A
Participant or Inactive Participant must apply for distributions
from his 401(k) Contribution Account at the times and in the manner
the Plan Administrator prescribes.
(d) Hardship Withdrawals from 401(k) Contribution
Account.
(1) In General. A Participant who requests a
distribution as a result of hardship must include with his
application the reasons for his request, and the Financial Hardship
(from paragraph (3) below). The Participant must demonstrate to
the satisfaction of the Plan Administrator that the withdrawal is
necessary to alleviate a Financial Hardship incurred by the
Participant. The Participant must have obtained all otherwise
available withdrawals or distributions from the Plan, must have no
monies available in his Thrift Contribution Account and have
obtained all non-taxable loans (as determined by the Plan
Administrator) currently available under all plans maintained by
the Employer.
(2) Participant Contribution Suspension. If the
Plan Administrator grants the Participant's hardship withdrawal,
then: (A) the Participant's authorization of Employee Contributions
automatically shall be suspended for 12 months following the date
of the receipt of the hardship withdrawal, as so provided in
Section 4.6(e), together with all elective contributions and
employee contributions under all qualified and non-qualified plans
of deferred compensation maintained by the Employer; and (2) the
Participant's Code Section 402(g) $7,000 limit for the calendar
year following the hardship withdrawal shall be reduced by the
amount of his 401(k) Contributions authorized for the calendar year
of the hardship withdrawal, as so provided in Section 4.6(e).
(3) Financial Hardship. The term "Financial
Hardship" shall mean an immediate and heavy financial need of a
Participant. A financial need will not fail to qualify merely
because it was reasonably foreseeable or voluntarily incurred. A
distribution is deemed to be on account of an immediate and heavy
financial need of the Participant if the distribution is for any of
the following reasons:
(A) Deductible Medical Care. Expenses for
medical care described in Section 213(d) of the Code previously
incurred by the Participant, the Participant's Spouse or any
dependent (as defined in Section 152 of the Code) of the
Participant or necessary for these persons to obtain medical care
described in Section 213(d) of the Code.
(B) Principal Residence. Costs directly
related to the purchase of a principal residence for the
Participant (excluding mortgage payments).
<PAGE>
(C) College Education. Payment of tuition
and related educational fees for the next twelve (12) months of
post-secondary education for the Participant, his Spouse, children
or dependents (as defined in Section 152 of the Code).
(D) Eviction/Foreclosure. Payments
necessary to prevent the eviction of the Participant from his
principal residence or the foreclosure on the mortgage on that
residence.
(E) IRS Authorized. Any other deemed
immediate and heavy financial need promulgated by the Secretary of
the Treasury pursuant to the authority granted by Treasury
Regulation Section 1.401(k)-1(d)(2).
(4) Maximum Distributable Amount. The
Participant's hardship withdrawal shall in any event not exceed
either of the following maximum amounts:
(A) Financial Hardship Itself. The amount
of the Financial Hardship itself, as increased to include any
amounts necessary to pay any federal, state or local income taxes
or penalties reasonably anticipated to result from the withdrawal.
(B) Earnings Withdrawal Limitation. The
sum (less prior withdrawals) of: (A) the total of his 401(k)
Contribution Account determined as of December 31, 1988 (inclusive
of earnings); and (B) the exact amount of the Participant's
cumulative 401(k) Contributions made to the Plan on or after
January 1, 1989 (exclusive of earnings thereon); with the result
that no earnings on 401(k) Contributions made after December 31,
1988 may be withdrawn.
10.3 Effects of Withdrawals.
(a) Forfeiture on Withdrawals. Upon any withdrawal
of Basic Employee Contributions by a Participant whose vested
interest in his Accounts is less than 50%, the Participant shall
forfeit a percentage of the unvested Employer Contributions
credited to his Employer Contribution Account equal to the
percentage of his Basic Employee Contributions so withdrawn. The
determination of a Participant's vested interest shall be made
separately with respect to each Plan Year.
(b) Allocation of Forfeitures from Withdrawals.
Amounts forfeited under Section 10.3(a) shall be allocated in
accordance with Section 11.9(e).
(c) Reinstatement of Forfeitures from Withdrawals.
In the event that a Participant forfeits a percentage of the
unvested Employer Contributions credited to his Employer
Contribution Account under Section 10.3(a), he may reinstate the
value of the Employer Contributions that were forfeited by repaying
<PAGE>
in cash the total dollar value of the actual distribution that
resulted in the forfeiture (i.e., Basic Employee Contributions and
earnings thereon) previously made to him not later than the earlier
to occur of (i) the end of the five-year period beginning on the
date of withdrawal, or (ii) the last day of the Plan Year in which
he first completes five consecutive One Year Breaks in Service. A
Participant shall not be permitted to repay Supplemental Employee
Contributions or earnings thereon which were withdrawn. The entire
amount repaid will be deemed to be Employee Contributions and will
be credited to the Participant's Thrift Contribution Account and
may not be designated a 401(k) Contribution. In the event of such
a repayment, the Participant's Accounts shall be credited as of the
Valuation Date coincident with or next following the date of
repayment with all amounts previously distributed to him
attributable to his Basic Employee Contributions (to the extent
withdrawn and repaid) plus all amounts attributable to Employer
Contributions made on his behalf prior to such withdrawal.
Repayments shall be credited in reverse order with the most recent
withdrawal being the first repaid. The amount of forfeitures
required to be reinstated pursuant to this Section 10.3 shall be
obtained first from forfeitures of other Participants or former
Participants under Sections 10.3(b) and 11.9 and, if the amount of
these forfeitures is insufficient, then from additional Employer
Contributions. However, a Participant may make such repayments
only if he is a Participant at the time of any repayment.
10.4 Withdrawals after Normal Retirement Date.
Notwithstanding the provisions of Section 10.3, after a
Participant's Normal Retirement Date, he may make a withdrawal
pursuant to Sections 10.1 and 10.2 without incurring any of the
penalties set forth in said Sections.
10.5 Payment of Withdrawals. Amounts withdrawn from a
Participant's Thrift Contribution Account and 401(k) Contribution
Account shall be paid in cash or, if the Participant so elects in
writing, in cash and whole shares of NSS Stock, within 60 days of
Valuation Date following receipt of a Participant's withdrawal
request. Amounts withdrawn from a Participant's Employer
Contribution Account shall be distributed in whole shares of NSS
Stock valued as of the applicable Valuation Date with fractional
shares to be valued as of the same Valuation Date and paid in cash;
provided, however, that if the number of shares of NSS Stock to be
distributed is 100 shares or less, then the value of the shares to
be distributed determined as of the same Valuation Date will be
paid in cash in a single payment. Effective January 1, 1993, a
Participant shall, to the extent provided in applicable Treasury
Regulations, have the right to receive his withdrawal in the form
of direct rollover, as provided in Section 14.5.
10.6 No Withdrawals From Profit Sharing Contribution
Accounts. Withdrawals shall not be permitted from a Participant's
Profit Sharing Contribution Account, except for withdrawals made on
or after a Participant's Normal Retirement Date.
<PAGE>
10.7 Loans - General Rules. If the Plan Administrator
permits Participant loans, the provisions of this Section shall
apply. A Participant may on an application furnished by and filed
with the Plan Administrator apply for a loan from his 401(k)
Contribution Account and his Thrift Contribution Account
attributable to Basic and Supplemental Employee Contributions upon
the following terms and conditions:
(a) Only one loan from the Plan may be outstanding at
any one time. A Participant may not use the proceeds of one loan
from the Plan to pay off another loan from the Plan.
(b) The minimum amount that may be borrowed is
$1,000.00.
(c) The maximum amount that may be borrowed is the
lesser of:
(i) $50,000, reduced by the excess (if any) of
(I) the highest outstanding balance of loans from the Plan during
the 1-year period ending on the day before the date on which such
loan was made, over (II) the outstanding balance of loans from the
Plan on the date on which such loan was made; or
(ii) The sum of (I) one-half (1/2) of the
Participant's Thrift Contribution Account invested in the General
Funds (not to exceed Supplemental Employee Contributions to his
Thrift Contribution Account, together with earnings thereon) plus
(II) one-half (1/2) of the Participant's 401(k) Contribution
Account invested in the General Funds.
(d) The loan shall be for a period not to exceed four
(4) years.
(e) The interest rate to be charged on the unpaid
balance of the loan shall be the interest rate(s) charged by
persons in the business of lending money for loans which would be
made under similar circumstances, within the meaning of DOL Reg.
Section 2550.408b-1(e).
(f) The principal amount of the loan shall be (i)
deducted first from the Participant's Thrift Contribution Account
and then, to the extent necessary, from his 401(k) Contribution
Account and (ii) credited to a special loan account established for
the Participant. The loan shall be taken proportionately from the
Accounts from which the loan was made. Unpaid interest on the
outstanding principal amount of the loan shall be added to the loan
account, and the loan account (i) shall not share in the Net Gain
or Net Loss of any Investment Fund and (ii) shall be debited with
repayments of principal and payments of interest. Repayments of
principal and payments of interest shall be credited first to a
Participant's 401(k) Contribution Account and then to his Thrift
Contribution Account and shall thereafter share in the Net Gain and
Net Loss of the General Fund(s) from which the loan was made.
<PAGE>
(g) The loan will be secured by a pledge of his
Accounts and evidenced by a promissory note and security agreement
executed by the Participant.
(h) If the Participant is married at the time the
loan is granted, his Spouse must have completed and furnished to
the Plan Administrator a consent meeting the requirements of
Section 13.2(c) with respect to the use of the Participant's
Accounts as security for the loan.
(i) The loan shall be repaid in equal or nearly equal
monthly or semi-monthly installments (as specified by the Plan
Administrator) by means of payroll deductions and prepayments in
full of the then outstanding balance of principal and interest
shall be permitted without penalty.
(j) The unpaid balance of any loan and interest
accrued thereon shall become immediately due and payable in the
event of the Participant's Normal, Early, Late or In-Service
Retirement, Total and Permanent Disability, death or termination of
service.
(k) Unless the unpaid balance and interest accrued
thereon is paid back within the time prescribed, the unpaid
principal balance and interest accrued thereon shall be deemed to
be an in-service withdrawal in the Plan Year in which the repayment
was otherwise due and shall be charged against the Participant's
Accounts and deducted from the amounts otherwise required to be
paid to the Participant or his Beneficiary.
(l) Notwithstanding any provision of this Section
10.6, the Plan Administrator shall take no action (e.g.,
foreclosure of Account upon default) which would violate the Code
Section 401(k) distribution limitations.
10.8 Aggregating Loans When the Employer Maintains Another
Plan. The limits in Section 10.6 are applied by aggregating all
loans to a Participant from the Plan and any other qualified plan
maintained by the Employer and any other Affiliated Company.
ARTICLE XI -- BENEFIT PROVISIONS
11.1 Amount of a Participant's Interest in His Accounts.
(a) General Rule. The interest of a Participant,
Inactive Participant, Retired Participant or Disabled Participant
in his Accounts is the vested percentage of the value of his
Accounts as of the Valuation Date coincident with or immediately
before the event that entitles the Participant to his interest in
his Accounts, adjusted for Net Gains and Net Losses until the
<PAGE>
Valuation Date coincident with or immediately before the date the
amounts in his Accounts are paid to him or his Beneficiary.
(b) Vested Percentage in Employee Contribution
Accounts. A Participant's interest in his 401(k) Contribution
Account and Thrift Contribution Account is nonforfeitable at all
times.
(c) Vested Percentage in Employer and Profit Sharing
Contribution Accounts.
(1) General Rule. Employer Contributions to a
Participant's Employer Contribution Account and Profit Sharing
Contribution Account shall become nonforfeitable pursuant to the
following vesting schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percent
<C> <C>
0 Years 0%
1 Year 0%
2 Years 0%
3 Years 20%
4 Years 40%
5 Years 60%
6 Years 80%
7 Years 100%
</TABLE>
(2) Normal Retirement Date. Notwithstanding
paragraph (1), a Participant's interest in his Employer
Contribution Account and Profit Sharing Contribution Account is
nonforfeitable on the earlier of (A) his Normal Retirement Date, or
(B) the day he reaches Age 65.
(3) Early Retirement Date. Notwithstanding
paragraph (1), a Participant's interest in his Employer
Contribution Account and Profit Sharing Contribution Account is
nonforfeitable on his Early Retirement Date.
(4) Total and Permanent Disability.
Notwithstanding paragraph (1), a Participant's interest in his
Employer Contribution Account and Profit Sharing Contribution
Account is nonforfeitable when he becomes Totally and Permanently
Disabled but only if he becomes Totally and Permanently Disabled
while in the service of the Employer.
(5) Death. Notwithstanding paragraph (1), a
Participant's interest in his Employer Contribution Account and
Profit Sharing Contribution Account is nonforfeitable if he dies
while in the service of the Employer.
11.2 Normal Retirement. A Participant may retire upon his
Normal Retirement Date. At that time, his interest in his Accounts
<PAGE>
shall be paid to him in accordance with the provisions of Article
XII.
11.3 Late Retirement. A Participant may remain in the
service of the Employer after his Normal Retirement Date. In that
event, he shall remain a Participant until his Late Retirement
Date. At that time, his interest in his Accounts shall be paid to
him in accordance with the provisions of Article XII.
11.4 Early Retirement. A Participant may retire on his
Early Retirement Date. At that time, his interest in his Accounts
shall be paid to him in accordance with the provisions of Article
XII.
11.5 In-Service Retirement. A Participant who has
attained his Normal Retirement Date may, while remaining a
Participant, elect to commence distribution of his retirement
benefits pursuant to Article XII.
11.6 Total and Permanent Disability. If a Participant
becomes Totally and Permanently Disabled while in the service of
the Employer, his interest in his Accounts shall be paid to him in
accordance with the provisions of Article XII.
11.7 Death. If a Participant should die while in the
service of the Employer, his interest in his Accounts shall be paid
to or for the benefit of his Beneficiary in accordance with the
provisions of Article XII.
11.8 Other Termination of Service. If a Participant's
service with the Employer should be terminated other than by
retirement, death or Total and Permanent Disability, then the
Participant's vested interest in his Employer Contribution Account
and Profit Sharing Contribution Account and his interest in his
401(k) Contribution Account and Thrift Contribution Account shall
be paid to him in accordance with provisions of Article XII.
11.9 Forfeitures.
(a) Five Consecutive One Year Breaks in Service While
an Employee. If a Participant or Inactive Participant incurs five
consecutive One Year Breaks in Service for any reason other than
retirement, death, termination of service or Total and Permanent
Disability, then the forfeitable portion of the Participant's
Employer Contribution Account and Profit Sharing Contribution
Account shall be forfeited and allocated in the manner described in
paragraph (e) as of the last day of the Plan Year in which the
Participant incurred the five consecutive One Year Breaks in
Service.
(b) Upon Termination of Service.
<PAGE>
(1) No Distribution Before Five Consecutive One
Year Breaks in Service. If, under Section 11.8, a Participant (i)
is not entitled to a fully vested interest in his Employer
Contribution Account and Profit Sharing Contribution Account, and
(ii) does not receive any portion of his vested interest in his
Employer Contribution Account and Profit Sharing Contribution
Account before he incurs five consecutive One Year Breaks in
Service, then the forfeitable portion of the Participant's Employer
Contribution Account and Profit Sharing Contribution Account shall
be forfeited and allocated in the manner described in paragraph (e)
as of the last day of the Plan Year in which the Participant
incurred the five consecutive One Year Breaks in Service.
(2) Distribution Before Five Consecutive One
Year Breaks in Service. If, under Section 11.8, a Participant (i)
is not entitled to a fully vested interest in his Employer
Contribution Account and Profit Sharing Contribution Account, and
(ii) receives his vested interest in his Employer Contribution
Account and Profit Sharing Contribution Account before he incurs
five consecutive One Year Breaks in Service, then the forfeitable
portion of the Participant's Employer Contribution Account and
Profit Sharing Contribution Account shall be forfeited and
allocated in the manner described in paragraph (e) as of the last
day of the Plan Year in which the Participant's termination of
service occurs. For the purposes of this paragraph, if the value
of a Participant's vested interest in his Account balance is zero,
the Participant shall be deemed to have received a distribution of
his vested interest in his Account balance upon his termination of
service.
(c) Reinstatement of Forfeitures.
(1) General Rule. If a Participant who receives
a distribution or is deemed to have received a distribution
described in subsection (b)(2) returns to the service of the
Employer and again becomes a Participant, then the Participant's
Employer Contribution Account and Profit Sharing Contribution
Account will be restored to the amount on the date of distribution
if, on or before (i) in the case of a withdrawal, the end of the
five year period beginning on the date of withdrawal, or (ii) in
the case of a distribution, the earlier to occur of five years
after the date on which the Participant is reemployed as an
Eligible Employee and otherwise becomes a Participant of the Plan,
or the last day of the Plan Year in which the Participant incurs
five consecutive One Year Breaks in Service following the date of
distribution, the Participant repays to the Plan the full amount of
the distribution he received which resulted in the forfeiture
(i.e., Basic Employee Contributions and Employer Contributions and
earnings thereon). A Participant shall not be permitted to repay
Supplemental Employee Contributions or earnings thereon. The
entire amount repaid will be deemed to be Employee Contributions
and will be credited to the Participant's Thrift Contribution
Account and may not be designated a 401(k) Contribution. Repayment
<PAGE>
shall be credited in reverse order with the most recent
distribution being the first repaid.
(2) Forfeiture Account. Until the first to
occur of the expiration of the repayment period or the repayment,
the Participant's forfeitable interest in his Employer Contribution
Account and Profit Sharing Contribution Account shall be
transferred to a forfeiture account which shall participate in the
allocation of Net Gains and Net Losses.
(d) Unclaimed Benefits. If a Participant or
Beneficiary entitled to a benefit from the Plan cannot be located
within five years from the date the payment of benefits would
otherwise have begun, then the benefit shall be forfeited and
reallocated in the manner described in paragraph (e) as of the last
day of the Plan Year in which the five year period expires. If the
Participant or Beneficiary is located after that time, then within
60 days of that date the forfeited benefit shall be reinstated; the
forfeited benefit shall equal the amount to which the Participant
or Beneficiary was originally entitled.
(e) Allocation of Forfeitures. Forfeitures shall be
applied first to restore forfeited amounts required under Section
11.11, second to reduce Employer Contributions and thereafter to
reduce Profit Sharing Contributions.
11.10 Separate Employer and Profit Sharing Contribution
Accounts For Participants Who Incur Forfeitures. If a Participant
incurs a forfeiture as a result of the operation of this Article,
then a separate Employer Contribution Account and Profit Sharing
Contribution Account will be maintained for the Participant's
post-forfeiture Employer Contributions. Each Account will
participate in the allocation of Net Gains and Net Losses. The
Participant will have a fully vested interest in his pre-forfeiture
Employer Contribution Account and Profit Sharing Contribution
Account.
11.11 Additional Employer Contributions to Restore
Forfeited Amounts. If any portion of a Participant's benefit that
was forfeited must be subsequently restored, then the Employer
shall contribute to the Plan the amount that must be restored.
This contribution shall be used to reinstate the forfeited benefit.
11.12 CODA Separation From Service Distribution
Limitation. For purposes of compliance with the distribution
limitations of Section 401(k)(2)(B) of the Code, 401(k)
Contribution Accounts shall not be distributable to a Participant
under this Article unless, in addition to terminating employment,
the Participant also has incurred a separation from service (within
the meaning of Section 401(k)(2)(B)(i)(I) of the Code).
<PAGE>
(a) Separation From Service Exceptions.
Notwithstanding the foregoing limitation, 401(k) Contribution
Accounts may be distributed even if the Participant has not
incurred a separation from service pursuant to the following
circumstances:
(1) Sale of Business Assets. Distributions may
occur upon the disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the meaning
of Section 409(d)(2) of the Code) used in a trade or business of
such corporation if such corporation continues to maintain this
Plan after the disposition, but only with respect to employees who
continue employment with the corporation acquiring such assets.
(2) Sale of Interest In Subsidiary.
Distributions may occur upon the disposition by a corporation to an
unrelated entity of such corporation's interest in a subsidiary
(within the meaning of Section 409(d)(3) of the Code) if such
corporation continues to maintain this Plan, but only with respect
to employees who continue employment with such subsidiary.
(b) Distribution Conditions. Distributions under
subsections (a)(1) or (a)(2) above shall be conditioned on the
following requirements:
(1) The Seller Must Maintain The Plan. A
distribution may be made under subsections (a)(1) or (a)(2) only
from a plan that the seller continues to maintain after the
disposition. This requirement is satisfied only if the purchaser
does not maintain the plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or otherwise
becomes an employer whose employee accrue benefits under the plan.
A purchaser also maintains the plan if the plan is merged or
consolidated with, or any assets or liabilities are transferred
from the plan to, a plan maintained by the purchaser in a
transaction subject to Section 414(l)(1) of the Code. A purchaser
is not treated as maintaining the plan merely because a plan that
it maintains accepts rollover contributions of amounts distributed
by the plan.
(2) Employee Continues Employment. A
distribution may be made under subsection (a)(1) or (a)(2) only to
an employee who continues employment with the purchaser of assets
or with the subsidiary, whichever is applicable.
(3) Distribution Connection With Disposition.
Elective contributions may not be distributed under subsection
(a)(1) or (a)(2) except in connection with the disposition that
results in the employee's transfer to the purchaser. Whether a
distribution is made in connection with the disposition of assets
or a subsidiary depends on all of the facts and circumstances.
Whether a distribution is made in connection with the disposition
of assets or a subsidiary depends on all of the facts and
circumstances. Except in unusual circumstances, however, a
<PAGE>
distribution will not be treated as having been made in connection
with a disposition unless it was made by the end of the second
calendar year after the calendar year in which the disposition
occurred.
(4) Applicable Definitions. For purposes of
subsection (a)(1), the sale of "substantially all" the assets used
in a trade or business means the sale of at least 85 percent of the
assets. For purposes of subsection (a)(1) and (a)(2), an
"unrelated" entity or individual is one that is not required to be
aggregated with the seller under Sections 414(b), (c), (m), or (o)
of the Code after the sale or other disposition.
(c) Lump Sum Requirement. After March 31, 1988, a
distribution may be made under subsection (a)(1) or (a)(2) only if
it is a lump sum distribution (as provided in Section 402(d)(4) of
the Code, without regard to subparagraphs (A)(i) through (iv), (B)
and (H) thereof).
ARTICLE XII -- METHODS OF PAYMENT
12.1 Joint and Survivor Annuity; Preretirement Survivor
Annuity. The provisions of this Article are modified by the joint
and survivor annuity and preretirement survivor annuity provisions
of Article XIII.
12.2 Methods of Payment.
(a) Methods of Payment. Based upon the following
captioned circumstances applicable to a Participant, the
Participant shall select the method of payment from among the
following methods:
Normal, Early, Late or In-Service Retirement; Total
and Permanent Disability.
(1) Single lump sum cash payment of the value of
all or any part of amount of his Accounts in the Trust Fund valued
as of the Valuation Date coincident with or next following the date
of retirement, Total and Permanent Disability; or
(2) Deferred lump sum cash payment of the value
of all or any part of the amount of his Accounts in the Trust Fund;
or
(3) A transfer to any General Fund of all or any
part of his Employer Contribution Account and Profit Sharing
Contribution Account and Employee Contribution Account invested in
the NSS Stock Fund and/or any General Fund valued as of the
Valuation Date coincident with or next following the date of
retirement, Total and Permanent Disability and thereafter to elect
<PAGE>
distribution of his Accounts (or any of them) in cash in
approximately equal annual installments over a period not exceeding
that permitted by Section 12.2(b); or
(4) The purchase from an insurance company of an
annuity providing for monthly, quarterly or annual installments
either (i) for a fixed term of no fewer than ten years, but in no
event over a period exceeding that permitted by Section 12.2(b) or
(ii) for life with payments guaranteed for ten years or (iii) for
life with a 100% or 50% joint and survivor benefit with payments
guaranteed for ten years; or
(5) Any combination of (1), (2), (3) and/or (4)
above; or
(6) Either (1), (2), (3) or (4) above, or any
combination thereof, plus a distribution of all whole shares of NSS
Stock allocated to his Employer Contribution Account and Profit
Sharing Contribution Account and/or Employee Contribution Account
as of the Valuation Date coincident with or next following the date
of retirement, Total and Permanent Disability, together with all
uninvested cash or other funds allocated or allocable to his
Employer Contribution Account and Profit Sharing Contribution
Account and/or Employee Contribution Account as of such Valuation
Date. Fractional share interests shall be paid in cash as
determined by the Trustee based upon the generally prevailing
market price of NSS Stock as of such Valuation Date; or
(7) If the Participant fails to make an election
pursuant to Sections 12.2(a)(1) through (6), his distribution will
be in form of a single lump sum cash distribution of the full value
of his Employee Contribution Account invested in the General Funds,
together with a distribution of all whole shares of NSS Stock
allocated to his Employer Contribution Account and Profit Sharing
Contribution Account and Employee Contribution Account (fractional
shares to be valued as of the applicable Valuation Date and paid in
cash).
Severance While Ineligible for Retirement.
(1) Single lump sum payment following the
Valuation Date coincident with or next following the date of his
severance of the value of his Employee Contribution Account
invested in the General Funds adjusted for his Account's share of
Net Gains and Net Losses through the Valuation Date coincident with
or immediately preceding the date of distribution, together with a
distribution of all vested whole shares of NSS Stock allocated to
his Employer Contribution Account and Profit Sharing Contribution
Account and Employee Contribution Account, fractional shares of NSS
Stock to be valued as of the applicable Valuation Date and paid in
cash. If, however, the aggregate number of shares of NSS Stock
allocated to a Participant's Employer Contribution Account and
Profit Sharing Contribution Account and Employee Contribution
<PAGE>
Account is 100 or less, then the Participant may elect in writing
to receive the value thereof (determined as of the applicable
Valuation Date) in cash; or
(2) A transfer to any General Fund of all or any
part of his Employer Contribution Account and Profit Sharing
Contribution Account and Employee Contribution Account invested in
the NSS Stock Fund and/or any General Fund valued as of the
Valuation Date coincident with or next following the date of
retirement, Total and Permanent Disability and thereafter to elect
distribution of his Accounts (or any of them) in cash in
approximately equal annual installments over a period not exceeding
that permitted by Section 12.2(b).
(b) Limitations on Method of Payment.
Notwithstanding the provisions of Section 12.2(a), the method of
payment selected under the Plan must satisfy these limitations:
(1) Unless the method of payment provides that
payments will be made to the Participant for his life and to his
Spouse for so long as the Participant's Spouse survives the
Participant, the method of payment must comply with the Minimum
Distribution Incidental Benefit (MDIB) rules of Treasury Regulation
Section 1.401(a)(9)-2, as currently proposed or hereafter finalized
by the Secretary of the Treasury.
(2) The method of payment must not defer the
beginning of benefit payments beyond April 1 of the calendar year
following the calendar year in which the Participant reaches Age
70-1/2.
(3) The method of payment must insure that
benefits will be distributed over the life of the Participant or
over the lives of the Participant and his Beneficiary, or over a
period that does not extend beyond the life expectancy of the
Participant or the life expectancy of the Participant and his
Beneficiary.
(4) If the method of payment is a method other
than a lump sum distribution, then the amount distributed each year
must be at least equal to a fraction with this numerator and
denominator:
(A) Numerator: The Participant's entire
interest in his Accounts.
(B) Denominator: The Participant's life
expectancy or the joint and last survivor expectancy of the
Participant and his Beneficiary.
Life expectancy and joint and last survivor expectancy shall be
computed by using the return multiples contained in Section 1.72-9,
Tables V and VI, of the Income Tax Regulations.
<PAGE>
(c) Required Distributions in the Event a Participant
Dies before Receiving His Entire Interest in the Plan.
Notwithstanding the provisions of Section 12.2(a):
(1) Distributions Began Before Death. If (i)
the distribution of a Participant's interest in his Accounts has
begun in accordance with subsection (b) and (ii) the Participant's
dies before his entire interest in his Accounts has been
distributed to him, then the remaining portion of his interest must
be distributed at least as rapidly as under the method of
distribution in effect on the date of the Participant's death.
(2) Distributions Did Not Begin Before Death.
If a Participant dies before payment of his interest in his
Accounts has begun in accordance with subsection (b), his entire
interest in his Accounts will be distributed within five years of
his death to his Beneficiary.
(3) Exception To Five-Year Rule. If any portion
of a Participant's interest in his Accounts is payable to (or for
the benefit of) a designated beneficiary (as defined under Treasury
Regulation Section 1.401(a)(9)-1), that portion will be distributed
(in accordance with regulations prescribed by the Secretary of
Treasury or his delegate) over the life of the Beneficiary (or over
a period not extending beyond the life expectancy of the
Beneficiary), and the distribution will begin not later than one
year after the date of the Participant's death or such later date
as the Secretary of Treasury or his delegate may by regulations
prescribe, for the purposes of paragraph (2), the portion referred
to above shall be treated as distributed on the date on which the
distributions begin.
(4) Special Rule for Participant's Spouse. If
the Beneficiary referred to in paragraph (3) is the Participant's
Spouse, then the date on which the distribution must begin under
paragraph (3) may be deferred to the date on which the Participant
would have reached Age 70-1/2, and if the Spouse dies before
distributions to the Spouse begin, this subsection shall be applied
as if the Spouse were the Participant.
(5) Calculation of Payments. Payments made
under paragraphs (3) and (4) shall be calculated by using the
return multiples contained in Section 1.72-9, Tables V and VI, of
the Income Tax Regulations.
(d) Life Expectancy. For the purpose of subsections
(b) and (c), the life expectancy of a Participant and his Spouse
will not be recalculated and, where applicable, life expectancy
will be calculated at the time distributions first begin and
distributions for any 12-consecutive-month period shall be based on
that life-expectancy minus the number of completed 12-consecutive-
month periods that have elapsed since distributions first begin.
<PAGE>
(e) Treatment of Payments to Children. Under
regulations prescribed by the Secretary of the Treasury or his
delegate, for the purpose of subsections (b) and (c), any amount
paid to a child shall be treated as if it had been paid to the
Participant's Spouse if the amount will become payable to the
Spouse when the child reaches majority (or other designated event
permitted under regulations prescribed by the Secretary of the
Treasury or his delegate).
(f) $3,500 Cashout. In the event that the value of
a Participant's Accounts do not exceed $3,500, and have never
exceeded $3,500 when at any previous time when they were
distributable under the Plan, the Participant's Accounts shall be
distributed to the Participant in the form of a lump sum payment as
soon as administratively practicable following the Valuation Date
which coincides with or immediately follows the Participant's
severance.
12.3 Installment Distributions; Deferred Lump Sum
Distributions.
(a) Installment Distributions. If the Participant
chooses an installment method of distribution, then the Participant
must select a payment period that does not extend beyond the period
permitted by Section 12.2(b). The amount of each installment shall
be determined by dividing the Retired or Disabled Participant's
Account balance as of the Valuation Date immediately preceding the
applicable distribution date by the number of installments
remaining to be paid. Installment payments will be adjusted for
the Account's share of Net Gains and Net Losses and will be paid to
or for the benefit of the Participant or Beneficiary. The Plan
Administrator has full discretion to accelerate the payment of any
unpaid installments. If a former Participant receiving installment
payments dies prior to his receipt of the balance in his Account,
the remaining installments shall be paid to his Beneficiary.
(b) Deferred Lump Sum Distributions.
(1) Retired or Disabled Participant or
Participant Terminated While Eligible for Retirement. A Retired
Participant, Disabled Participant or Participant whose employment
with the Employer terminates while eligible for retirement who
elects a deferred lump sum distribution of his Accounts (and such
Accounts being at least $3,500) pursuant to Section 12.2(a) shall
have his Account adjusted as of each Valuation Date to reflect his
Account's share of Net Gains and Net Losses from the date of his
retirement, disability or severance through the Valuation Date
coincident with or immediately preceding the date of actual
distribution.
(2) Participant Terminated While Ineligible for
Retirement. A Participant whose employment with the Employer
terminates while he is ineligible for retirement who elects a
<PAGE>
deferred lump sum distribution of his Accounts (and such Accounts
being at least $3,500) pursuant to Section 12.2(a) shall have his
Account adjusted as of each Valuation Date to reflect his Account's
share of Net Gains and Net Losses from the date of his termination
of service through the Valuation Date coincident with or
immediately preceding the date of actual distribution.
12.4 Duty to Provide Forms and Proofs. Each Participant,
Retired Participant, Disabled Participant and Inactive Participant,
each Participant whose service with the Employer terminates and the
Beneficiary of any such Participant shall be required to complete
such administrative forms and furnish such proofs as shall be
deemed necessary and appropriate by the Plan Administrator for the
purposes of administering this Plan.
12.5 Duty to Provide Mailing Address. It shall be the
duty of each Retired or Disabled Participant, each Participant
whose service with the Employer terminates and the Beneficiary of
any such Participant to keep on file with the Plan Administrator a
correct mailing address or to claim in person each payment as it
becomes due.
12.6 Benefit Payments in the Event of Incapacity. If the
Plan Administrator finds that any Retired or Disabled Participant,
any Participant whose service with the Employer terminates or any
Beneficiary of any such Participant is unable to care for his
affairs because of illness or injury or is a minor, any payment due
may be made to the Spouse, child, brother, sister or parent of such
a Participant or Beneficiary, for his benefit, unless a prior claim
shall have been made by a duly appointed guardian or other legal
representative.
12.7 Distributions in Kind. Any distribution may be made
in kind or in cash or partly in kind and partly in cash, according
to the determination of the Plan Administrator. Any annuity
contract that is distributed must be nontransferable.
12.8 Assignment of Benefits. No benefit or interest of a
Participant available under the Plan shall be subject to assignment
or alienation, either voluntarily or involuntarily. The preceding
sentence also applies to the creation, assignment or recognition of
a right to any benefit payable with respect to a Participant under
a domestic relations order, unless (i) the Plan Administrator
determines that the order is a qualified domestic relations order,
as defined in Section 414(p) of the Internal Revenue Code (a
"Qualified Domestic Relations Order"), (ii) the domestic relations
order was entered before January 1, 1985 and payments of benefits
pursuant to the order began as of that date, even though the order
is not a Qualified Domestic Relations Order, of (iii) the domestic
relations order was entered before January 1, 1985 and payments of
benefits pursuant to the order did not begin as of that date, even
though the order is not a Qualified Domestic Relations Order, but
only if permitted by the Plan Administrator. As permitted by
<PAGE>
Section 414(p)(10) of the Code, the Plan shall not be considered to
violate the distribution limitations of Sections 401(a) and 401(k)
of the Code by distribution to an alternate payee under a Qualified
Domestic Relations Order. The direct rollover requirements of
Section 14.5 shall apply to distributions under a Qualified
Domestic Relations Order to an alternate payee who is the Spouse or
former Spouse of a Participant, as provided under Section 14.5.
12.9 When Benefit Payments Begin.
(a) General Rules. Unless otherwise elected by the
Participant or Beneficiary consistent with the provisions of the
Plan, benefit payments will begin on the dates permitted by this
subsection.
(1) Retiring Participants. In the case of
benefits payable to a Participant who retires on his Early, Normal
or Late Retirement Date or effects an In-Service Retirement,
benefit payments will begin as soon as practicable after the first
day of the month that coincides with or is immediately after the
Participant's Early, Normal, Late or In-Service Retirement Date.
(2) Disabled Participants. In the case of
benefits payable to a Disabled Participant, benefit payments will
begin as soon as practicable after the date the Participant became
Totally and Permanently Disabled.
(3) Benefits Payable to Beneficiaries. In the
case of benefits payable to a Beneficiary, benefit payments will
begin as soon as practicable after the Participant's death, unless
the Beneficiary requests otherwise.
(4) Terminated Participants. In the case of
benefits payable to a Participant whose service ends under Section
11.8 after satisfying any service requirement to retire on an Early
Retirement Date, benefit payments will begin by the first day of
the month that coincides with or is immediately after (i) the date
the Participant satisfies any age requirement to retire on an Early
Retirement Date, if the Participant so requests, or (ii) the later
to occur of the Participant's Normal Retirement Date or the date he
reaches Age 62. In the case of benefits payable to any other
Participant whose service ends under Section 11.8, benefit payments
will begin by the first day of the month that coincides with or is
immediately after the later to occur of the Participant's Normal
Retirement Date or the date he reaches Age 62.
(b) Earliest Payment Date for Terminated
Participants. If a Participant's service with the Employer ends
under Section 11.8, then benefit payments may begin before the
Participant incurs five consecutive One Year Breaks in Service if
any of these conditions apply:
<PAGE>
(1) The sum of (i) the Participant's interest in
his Employee Contribution Account, plus (ii) the Participant's
vested interest in his Employer Contribution Account and Profit
Sharing Contribution Account, is not more than $3,500; or
(2) (A) The Participant requests the payment
and either the Participant has no Spouse or the pre-retirement
survivor annuity requirements of Article XIII do not apply to the
Participant; or
(B) The Participant requests the payment
and the Participant's Spouse consents to the distribution in
accordance with the Qualified Election provisions of Article XIII.
(c) Request for Deferral. A Retired Participant,
Disabled Participant or Beneficiary of either may request in
writing that benefit payments commence after the times specified in
subsection (a) above. If the Plan Administrator consents to the
request, benefit payments will begin on the date the Participant
requests. While the Participant's Accounts remain in the Plan
pursuant to a request to defer payment, the Participant may direct
that all or any part of his Accounts invested in the NSS Stock Fund
be transferred to a General Fund of the Participant's choice.
(d) Delay for Administrative Convenience. For
administrative convenience, the Plan Administrator may delay the
beginning of benefit payments as long as is reasonably necessary,
but, unless the Participant otherwise requests, in no event later
than the 60th day after the latest of the close of the Plan Year in
which (i) the Participant attains Age 65, (ii) occurs the tenth
anniversary of the Plan Year the Participant began participating in
the Plan, or (iii) the Participant terminates his service with the
Employer.
(e) Accelerated Payments. Upon written request of a
Participant receiving distribution of his Accounts under the Plan,
the Plan Administrator will accelerate the payment of the remaining
balance of the Participant's Accounts.
(f) Limitation. Benefit payments must begin not
later than the date specified in Section 12.2(b).
12.10 TEFRA 242(b) Election.
(a) General Rule. Notwithstanding the preceding
requirements of this Article, distributions on behalf of any
Participant, including a five percent owner, may be made in
accordance with these requirements (regardless of when the
distribution begins): (1) the distribution by the Plan is one which
would not have disqualified the Plan under section 401(a)(9) of the
Internal Revenue Code as in effect prior to its amendment by the
Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA"); (2) the
distribution is in accordance with a method of distribution
designated by the Participant whose interest in the Plan is being
<PAGE>
distributed or, if the Participant has died, by a beneficiary of
the Participant; (3) the designation was in writing, was signed by
the Participant or the beneficiary, and was made before January 1,
1984; (4) the Participant had accrued a benefit under the Plan as
of December 31, 1983; and (5) the method of distribution designated
by the Participant or the beneficiary specifies the time at which
distribution will begin, the period over which distributions will
be made, and in the case of any distribution upon the Participant's
death, the beneficiaries of the Participant listed in order of
priority.
(b) Death. A distribution upon death will not be
covered by this transitional rule unless the information in the
designation contains the required information described in
subsection (a) with respect to the distributions to be made upon
the death of the Participant.
(c) Distributions Beginning before January 1, 1984.
For any distribution which began before January 1, 1984, but
continues after December 31, 1983, the Participant or beneficiary
to whom the distribution is being made will be presumed to have
designated the method of distribution under which the distribution
is being made if the method of distribution was specified in
writing and the distribution satisfies the requirement in
subsections (a)(1) and (a)(5).
(d) Revocation. If a designation is revoked, any
subsequent distribution must satisfy the requirements of Section
401(a)(9) of the Internal Revenue Code, as amended by TEFRA. Any
changes in the designation will be considered to be a revocation of
the designation. However, the mere substitution or addition of
another beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the
designation, so long as the substitution or addition does not alter
the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the
relevant measuring life).
12.11 Participant Notice and Election Requirements. The
Participant's distribution of his Accounts shall be conditioned
upon the satisfaction of the following Participant notice and
election requirements (as applicable):
(a) Notice Requirements. The Plan Administrator
shall provide the following notices and disclosures to the
Participant:
(1) QJSA Written Explanation. The Plan
Administrator shall provide the Participant, no less than 30 days
and no more than 90 days before the Participant's Annuity Starting
Date, the QJSA and QPSA Notices prescribed by Section 13.5.
<PAGE>
(2) Annuity Forms Description. The Plan
Administrator shall provide the Participant, no less than 30 days
and no more than 90 days before the Participant's Annuity Starting
Date, an "Annuity Forms Description" which shall provide the
Participant with a general description of the material features,
and an explanation of the relative values of, the Qualified Joint
and Survivor Annuity, the Qualified Preretirement Survivor Annuity
and any alternate annuity forms available under the Plan.
(3) Early Commencement Notice. Upon a Plan
Administrator's receipt of a Participant's application for
distribution of his Accounts prior to his Normal Retirement Age,
the Plan Administrator shall provide the Participant, no less than
30 days and no more than 90 days before the Participant's Annuity
Starting Date, an "Early Commencement Notice" which shall notify
the Participant of his right to defer commencement or payment of
his Accounts to his Normal Retirement Age and such other
information and in the manner prescribed by Treasury Regulation
Section 1.411(a)-11(c)(2).
(4) Direct Rollover Notice. Effective January
1, 1993, either upon a Plan Administrator's receipt of a
Participant's application for distribution of his Accounts or as
soon as administratively practicable following the Participant's
termination of employment, the Plan Administrator shall provide the
Participant, no less than 30 days and no more than 90 days before
the Participant's Annuity Starting Date, a "Direct Rollover Notice"
which shall notify the Participant of his right to make a Direct
Rollover, and such notice shall contain the information as
prescribed in Section 402(f) of the Code and applicable Treasury
Regulations thereunder.
(b) Participant Election Requirements. The
Participant's election must meet the following requirements (as
applicable):
(1) Timely Receipt of Notices. The Participant
must have received, no less than 30 days and no more than 90 days
before the Participant's Annuity Starting Date, the Early
Commencement Notice (if applicable) and the Direct Rollover Notice
prescribed under subsection (a) above.
(2) Election Timing. The Participant's written
election to receive his Accounts must not be made before the
Participant receives the Early Commencement Notice (if applicable)
and the Direct Rollover Notice, nor more than 90 days before the
Participant's Annuity Starting Date.
(3) Annuity Starting Date Timing. The
Participant's Annuity Starting Date must occur no sooner than 30
days after the date the Participant received his Early Commencement
Notice (if applicable) and his Direct Rollover Notice (consistent
with paragraph (1) above).
<PAGE>
The Direct Rollover provisions of this Section also shall apply to
a Spouse Beneficiary for purposes of distributions upon the death
of a Participant.
(c) Annuity Starting Date. The term "Annuity
Starting Date" shall mean the date of payment or commencement of
payment of a Participant's Accounts under the Plan, as consistent
with the meaning of the term under Treasury Regulation Section
1.401(a)-20, Q and A 10.
12.12 Merged Plans.
(a) Applicability. The provisions of this Section
shall apply to any plan merged into the Plan or any plan having
transferred assets to the Plan.
(b) Optional Benefit Forms. All optional benefit
forms of any such merged or transferred plan shall be preserved
under this Plan and available to Participants and Beneficiaries for
purposes of the distribution of their Accounts under the Plan.
ARTICLE XIII -- QUALIFIED JOINT AND SURVIVOR AND
PRERETIREMENT SURVIVOR ANNUITIES
13.1 Applicability. This Article shall take precedence
over any conflicting provision in the Plan.
13.2 Definitions. For purposes of this Article, unless
the context otherwise requires, the following words and phrases
shall have the meanings indicated:
(a) "Election Period" shall mean the period which
begins on the first day of the Plan Year in which the Participant
reaches Age 35 and ends on the date of the Participant's death. If
a Participant's service with the Employer terminates before the
first day of the Plan Year in which he reaches Age 35, then the
Election Period shall begin on the date of termination of service.
A Participant who receives a written explanation of the Qualified
Preretirement Survivor Annuity in the manner described in Section
13.5(b)(1) and who will not reach Age 35 as of the last day of a
Plan Year, may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning
on the date of the Qualified Election and ending on the first day
of the Plan Year in which the Participant will reach Age 35. The
Qualified Election will automatically expire as of the first day of
the Plan Year in which the Participant reaches Age 35, and any
subsequent waiver of a Qualified Preretirement Survivor Annuity
must be made by another Qualified Election.
(b) "Earliest Retirement Age" shall mean the
Participant's Normal Retirement Date (or, if sooner, his Early
Retirement Date).
<PAGE>
(c) "Qualified Election" shall mean a waiver by a
Participant of a Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity, which meets the following
requirements: The waiver described in paragraph (1) will not
constitute a qualified election unless the waiver designates a form
of benefit payment which may not be changed without the consent of
the Spouse (unless the Spouse expressly permits designations by the
Participant without any further consent), and unless the
Participant's Spouse consents to the waiver in the manner described
in this paragraph. The Spouse must consent to the waiver in
writing. The waiver must designate a specific Beneficiary any
class of Beneficiaries or any contingent Beneficiaries, which may
not be changed without the Spouse's consent (unless the Spouse's
consent expressly permits designations by the Participant without
any requirement of further consent by the Spouse). The Spouse's
consent acknowledges the effect of the waiver and is witnessed by
a Plan representative or a notary public. The consent requirements
shall not apply if it is established to the satisfaction of a Plan
representative that the consent may not be obtained because (i)
there is no Spouse, (ii) the Spouse cannot be located, or (iii)
other circumstances that the Secretary or his designate may
prescribe by regulations. If a Spouse consents to a waiver in the
manner described in paragraph (2), then the Spouse may not
subsequently revoke that consent. Any consent by a Spouse (or
establishment that the consent of the Spouse cannot be obtained) is
effective only with respect to that Spouse. A consent that permits
designations by the Participant without any further consent by the
Spouse must acknowledge that Spouse has the right to limit consent
to a specific Beneficiary, and a specific form of benefit (where
applicable) and that the Spouse voluntarily elects to relinquish
either or both of those rights. A Participant may revoke his
waiver of a Qualified Preretirement Survivor Annuity or Qualified
Joint and Survivor Annuity without obtaining another consent from
his Spouse at any time before the beginning of Plan benefit
payments. The number of revocations shall not be limited.
(d) Qualified Joint and Survivor Annuity.
(1) Married Participants. For a married
Participant, "Qualified Joint and Survivor Annuity" shall mean an
immediate annuity for the life of a Participant with a survivor
annuity for the life of the Participant's Spouse equal to one-half
the amount of the annuity payable during the joint lives of the
Participant and his Spouse and which is the amount of benefit which
may be provided with the Participant's interest in his Accounts
under Article XI.
(2) Unmarried Participants. For an unmarried
Participant, "Qualified Joint and Survivor Annuity" shall mean an
annuity for the life of a Participant, ending at his death, which
is the amount of benefit which may be provided with the
Participant's interest in his Accounts under Article XI.
<PAGE>
(e) "Qualified Preretirement Survivor Annuity" shall
mean an annuity for the life of a Participant's Spouse equal to the
amount of benefit which may be provided with the Participant's
interest in his Accounts under Article XI.
13.3 Qualified Joint and Survivor Annuity. Unless (i) an
optional form of benefit is selected in accordance with a qualified
election within the 90-day period ending on the annuity starting
date, or (ii) the Participant dies before the annuity starting
date, a Participant's interest in his Accounts under Article XI
will be paid in the form of a Qualified Joint and Survivor Annuity.
The Participant may elect to have such annuity distributed upon
attainment of his Earliest Retirement Age.
13.4 Qualified Preretirement Survivor Annuity. Unless an
optional form of benefit has been selected within the Election
Period in accordance with a qualified election, if a Participant
dies before the annuity starting date, then the Participant's
interest in his Accounts under Article XI shall be applied toward
the purchase of a Qualified Preretirement Survivor Annuity. The
Participant's surviving Spouse may elect to have such annuity
distributed within a reasonable period after the Participant's
death.
13.5 Notice Requirements.
(a) Qualified Joint and Survivor Annuity. In the
case of a Qualified Joint and Survivor Annuity, the Plan
Administrator shall provide each Participant, not less than 30 days
nor more than 90 days prior to the annuity starting date, a written
explanation of: (i) the terms and conditions of a Qualified Joint
and Survivor Annuity; (ii) the Participant's right to make and the
effect of an election to waive the Qualified Joint and Survivor
Annuity form of benefit; (iii) the rights of a Participant's
Spouse; and (iv) the right to make, and the effect of, a revocation
of a previous election to waive the Qualified Joint and Survivor
Annuity.
(b) Qualified Preretirement Survivor Annuity.
(1) Notice. In the case of a Qualified
Preretirement Survivor Annuity, the Plan Administrator shall
provide each Participant, within the applicable period, a written
explanation of the Qualified Preretirement Survivor Annuity in such
terms and in the manner comparable to the explanation described in
subsection (a) above.
(2) Applicable period. For purposes of this
Section, the term "applicable period" shall mean, with respect to
a Participant, whichever of the following periods ends last: (A)
the period beginning with the first day of the Plan Year in which
the Participant attains Age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Participant attains
<PAGE>
Age 35; (B) the two year period ending on the first anniversary of
the date he becomes a Participant; (C) the two year period ending
on the first anniversary of the date subsection (c) ceases to apply
to the Participant; (D) the two year period ending on the first
anniversary of the date Section 401(a)(11) of the Internal Revenue
Code applies to the Participant; and (E) for a Participant who
separates from service with the Employer before attaining Age 35,
the two year period ending on the first anniversary of the date of
the Participant's separation from service.
(c) Special Rule. The notices prescribed by this
Section need not be given if: (A) the Plan fully subsidizes the
cost of the Qualified Joint and Survivor Annuity and Qualified
Preretirement Survivor Annuity; (B) the Qualified Joint and
Survivor Annuity and Qualified Preretirement Survivor Annuity may
not be waived; and (C) the Participant may not elect any person
other than his surviving Spouse (if any) as Beneficiary of the
Qualified Joint and Survivor Annuity and Qualified Preretirement
Survivor Annuity. For the purposes of this Section, the Plan
"fully subsidizes" the costs of a benefit if, under the Plan, the
failure to waive the benefit by a Participant would not result in
a decrease in any Plan benefits with respect to the Participant and
would not result in a an increase in costs to the Participant.
ARTICLE XIV -- PORTABILITY
14.1 Transfer to Qualified Plan. In the event that a
Participant entitled to receive benefits under this Plan separates
from the service of the Employer and subsequently is employed by
another corporation, including an Affiliated Company, which has a
pension or profit sharing plan qualified pursuant to Section 401(a)
of the Internal Revenue Code, the Plan Administrator in its
discretion may, upon the Participant's written request, direct the
Trustee to transfer said Participant's vested benefits under this
Plan directly to the Trustee of the plan of the Participant's new
employer if the following conditions are met: (a) the Trustee of
the other plan is authorized to accept the benefits under this
Plan; (b) the Participant's transferred assets shall be maintained
in a separate account in the other plan; and (c) the Participant's
transferred assets shall not be forfeitable or reduce in any way
the obligation of the new employer.
14.2 Transfer to Individual Retirement Account. In the
event a Participant who is entitled to receive benefits under this
Plan as a result of his termination of service with the Employer
has established or establishes pursuant to the applicable
provisions of the Internal Revenue Code an individual retirement
account, the Plan Administrator in its discretion may, upon the
Participant's written request, direct the Trustee to transfer all
of said Participant's vested benefits under the Plan directly to
the trustee of the Participant's individual retirement account.
<PAGE>
14.3 Transfer or Rollover from Qualified Plans. Subject
to the consent of the Plan Administrator, the Trustee of this Plan
is authorized to accept assets upon the terms and conditions
analogous to those set forth in Section 14.1 above from a trustee
of another qualified pension or profit sharing plan. The Trustee
is also authorized, subject to the consent of the Plan
Administrator, to accept a qualifying rollover contribution to the
Plan by the Employee (who will thereby become a Plan Participant if
he was not already a Participant). A "qualifying rollover
contribution" means the contribution to the Plan by an Employee of:
(a) A portion or all of a rollover amount (as defined
in Section 402(a)(5), or as referred to in Section 403(a)(4) of the
Internal Revenue Code), provided that the portion, if any, of a
rollover amount consisting of employee contributions may not be
contributed to the Plan and the portion, if any, of such
distribution consisting of property other than money (or the
proceeds thereof) must be contributed to the Plan; or
(b) A rollover contribution (as defined in Section
408(d)(3) of the Internal Revenue Code).
A qualifying rollover contribution to be made by an
Employee must be made to the Trustee, in care of the Plan
Administrator, by not later than the sixtieth (60th) day following
the day on which the Employee received the qualifying rollover
distribution or rollover contribution is to be made. The shall be
allocated to a separate account established and maintained on
behalf of a Participant making a rollover contribution.
14.4 Restricted Participation. For purposes of this Plan,
a Participant with respect to whom a transfer of benefits or a
qualifying rollover contribution is made in accordance with Section
14.3 shall not be eligible to share in the allocation of Employer
Contributions or forfeitures before becoming a Participant for all
purposes of this Plan in accordance with Sections 3.1 and 3.2.
14.5 Direct Rollovers. This Section applies to
distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this Section, a Distributee
may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified
by the Distributee in a Direct Rollover. For purposes of this
Section, the following terms shall be defined as follows:
(a) "Eligible Rollover Distribution" means any
distribution of all or any portion of the balance to the credit of
the Distributee, except that an Eligible Rollover Distribution does
not include: (1) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for life (or life expectancy) of the Distributee or
<PAGE>
the joint lives (or joint life expectancies) of the Distributee and
the Distributee's Designated Beneficiary, or for a specified period
of ten years or more; (2) any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and
(3) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(b) "Eligible Retirement Plan" means: (1) an
individual retirement account described in section 408(a) of the
Code; (2) an individual retirement annuity described in section
408(b) of the Code; (3) an annuity plan described in section 403(a)
of the Code; or (4) a qualified trust described in section 401(a)
of the Code that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving Spouse, an Eligible Retirement Plan
is an individual retirement account or individual retirement
annuity.
(c) "Distributee" includes a Participant. In
addition, the Participant's surviving Spouse and the Participant's
or Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of
the Code, are Distributees with regard to the interest of the
Spouse or former Spouse.
(d) "Direct Rollover" means a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
The Plan Administrator may establish, from time to time, default
procedures whereby, in the event a Distributee does not elect the
manner to receive his distribution, the Plan shall make his
distribution in the form of either a check (net of applicable
withholding) payable to the Distributee or a Direct Rollover to an
Eligible Retirement Plan (other than an annuity plan under Section
403(a) of the Code or a qualified trust under Section 401(a) of the
Code), provided that the Plan Administrator has complied with all
applicable notification requirements of applicable Treasury
Regulations.
ARTICLE XV -- PLAN ADMINISTRATOR
15.1 Plan Administrator. The Board of Directors of NSS
shall appoint three or more persons to be known as the
Administrative Committee to administer the Plan, keep records of
individual Participant's Accounts and notify each Participant of
the amount of his Accounts not less frequently than annually.
15.2 Term of Office. All members of the Administrative
Committee shall serve until their resignation or dismissal by the
Board of Directors of NSS and vacancies shall be filled in the same
<PAGE>
manner as the original appointments. The Board of Directors of NSS
may dismiss any member of the Administrative Committee at any time
with or without cause.
15.3 General Duties. Subject to the limitations of the
Plan, the Plan Administrator shall, from time to time, establish
rules for the administration of the Plan and the transaction of
Plan business. The Plan Administrator shall have the sole and
absolute discretionary authority to construe and interpret the Plan
and shall determine all questions arising in the administration,
interpretation and application of the Plan.
15.4 Retention of Advisors. The Plan Administrator may
retain and, if the Plan Administrator so determines, dismiss and
replace, the services of such counsel, accountants and other agents
as it shall deem advisable.
15.5 Directions to the Trustee. The Plan Administrator
shall direct the Trustee in writing to make payments from the Trust
Fund to Participants who qualify for such payments. These written
orders to the Trustee shall specify the name of the Participant,
his address and the amount and frequency of the payments.
15.6 Limitation on Plan Administrator's Powers. In
exercising any discretionary or absolute authority under the terms
of this Plan, the Plan Administrator shall act in a consistent and
nondiscriminatory manner as between Participants, treating
Participants in similar circumstances in a similar fashion. In no
event shall the Plan Administrator take any action that would
discriminate in favor of Participants who are Highly Compensated
Employees, or that would result in benefiting any such Participant
at the expense of any other Participant.
15.7 Claims and Appeal Procedure. According to procedures
established by the Plan Administrator, adequate notice in writing
shall be provided to any Participant or Beneficiary whose claim for
benefits under the Plan has been denied. The notice shall set
forth the specific reason for the denial, shall be written in a
manner calculated to be understood by the claimant and, provided
that review is requested within 60 days after receipt by the
claimant of written notification of denial of his claim, shall
afford a reasonable opportunity to any claimant whose claim for
benefits has been denied to a full and fair review by the Plan
Administrator of the decision denying the claim.
15.8 Delegation of Duties and Powers. The Plan
Administrator may, but is not obligated to, delegate all or any
portion of its duties as Plan Administrator. Notwithstanding the
foregoing, the Plan Administrator shall at all times (i) supervise
the overall administration of the Plan and (ii) determine who shall
render the services described in Section 15.4, and the terms and
conditions under which those services shall be rendered.
<PAGE>
ARTICLE XVI -- AMENDMENTS AND TERMINATION
16.1 Amendments to the Plan by NSS. NSS shall have the
right to alter or amend the Plan at any time in whole or in part,
provided that no amendment shall authorize or permit any part of
the Trust Fund to be used or diverted to any purpose other than the
exclusive benefit of the Participants or their Beneficiaries, nor
shall any such amendment deprive any Participant of his Account
vested in him as determined under the Plan.
16.2 Amendments Affecting Nonforfeitable Interests.
Except to the extent permitted under Section 412(c)(8) of the
Internal Revenue Code, no amendment to the Plan may decrease a
Participant's Account balances nor eliminate an optional form of
distribution with respect to benefits attributable to service
before the amendment. In addition, if the Plan's vesting schedule
is amended, in the case of an Employee who is a Participant as of
the later of (i) the date the amendment is adopted, or (ii) the
date the amendment becomes effective, the nonforfeitable percentage
(determined as of that date) of the Participant's Account balance
will not be less than the percentage computed under the Plan
without regard to the amendment.
16.3 Change in Vesting Schedule. In the event that an
amendment to the Plan changes the portion of a Participant's
Employer Contribution Account and Profit Sharing Contribution
Account that is nonforfeitable, or in the event the Plan is deemed
amended by an automatic change to or from the top-heavy vesting
schedule, each Participant with at least three Years of Service
prior to the expiration of the Election Period described below may
elect to have his interest in his Employer Contribution Account and
Profit Sharing Contribution Account computed under the Plan without
regard to that amendment or change if he is a Participant at the
time the election is made. For Participants who do not have at
least one Hour of Service in any Plan Year beginning after December
31, 1988, the preceding sentence shall be applied by substituting
"five Years of Service" for "three Years of Service" where such
language appears. The Election Period shall begin on the date the
amendment is adopted and shall end on the later of: (a) 60 days
after the amendment is adopted; (b) 60 days after the amendment
becomes effective; or (c) 60 days after the Participant is issued
written notice of the amendment by the Employer or the Plan
Administrator.
16.4 Complete Discontinuance of Employer Contributions.
If a complete discontinuance of contributions to the Plan by the
Employer occurs, the rights of affected Participants shall become
vested and nonforfeitable, notwithstanding any other provisions of
this Plan, but in all other respects the Plan shall continue in
effect and be administered in accordance with the provisions of
this Plan.
<PAGE>
16.5 Termination of Plan; Procedure on Termination
(a) Right to Terminate. NSS shall have the right to
terminate or partially terminate this Plan at any time by delivery
to the Trustee of written notice of the termination. Upon a
termination or partial termination, notwithstanding any other
provisions of this Plan, the rights of all affected Participants
under the Plan shall become vested and nonforfeitable.
(b) Procedure on Termination. Upon a termination or
partial termination of the Plan, NSS may authorize any of the
following procedures with respect to affected Participants whose
rights under the Plan have become fully vested and nonforfeitable:
(1) The continued administration of the Plan and
the Trust Fund in accordance with the provisions of the Plan until
the Trust Fund has been liquidated or until NSS directs (or
delegates to the Trustee the power to direct) the liquidation of
the Trust Fund as provided in paragraphs (2) or (3) of this
subsection.
(2) The liquidation of the assets held in the
Trust Fund and, after paying or providing for all expenses, the
payment, subject to the terms of Articles XII and XIII, to each
affected Participant of his interest in his Accounts.
(3) The transfer of the assets of the Plan
attributable to the affected Participants to the trustee of another
employee benefit plan or plans for the benefit of a group of
Employees of the Employer or an Affiliated Company that includes
the affected Participants.
16.6 Plan Amendment Procedures. NSS shall follow the
procedures contained in this Section in exercising its right under
this Article to amend and terminate the Plan. The Board of
Directors of NSS shall approve and adopt all amendments to the
Plan. The Board of Directors of NSS shall be permitted, however,
to delegate (by resolution) such foregoing authority to amend the
Plan to the Plan Administrator, the Benefit Committee or any
officer of the Plan Sponsor. All amendments to the Plan shall be
executed by a proper officer of NSS. The Board of Directors of NSS
shall approve and adopt the termination of the Plan.
16.7 Withdrawal by an Employer. Any Affiliated Company
may, with the consent of NSS, withdraw from the Plan at any time,
and NSS may, in its discretion, at any time withdraw the
authorization of any Affiliated Company to participate in the Plan.
In any of the foregoing events the affected Participants shall
cease to be Participants and the Plan Administrator shall arrange
for the withdrawal or segregation of the Accounts of the affected
Participants as of the date of the event, but not in excess of the
amount permitted under the applicable regulations of the Internal
Revenue Service. The Plan Administrator shall have the full
<PAGE>
discretion as to the nature of the funds to be withdrawn or
segregated, and its valuation for that purpose shall be conclusive.
Unless a retirement plan substantially similar in form to the Plan
or such other form as may be approved by the Internal Revenue
Service under Section 401(a) of the Internal Revenue Code is
continued by the withdrawing Employer or its successor for its
Employees, the Plan shall be deemed to have terminated with respect
to those Employees. The Plan Administrator shall arrange for the
disposition of such assets through transfer to a successor trust,
the purchase of annuities, or by any other means it shall
determine.
16.8 CODA Plan Termination Distribution Limitation. For
purposes of compliance with the distribution limitations of Section
401(k)(2)(B) of the Code, 401(k) Contribution Accounts shall not be
distributable to a Participant or his Beneficiary on account of
termination of the Plan unless the following provisions are
satisfied:
(a) General Rule. Distributions may occur upon the
termination of the Plan, but only without the establishment of
another defined contribution plan (as defined in Section 414(i) of
the Code), other than: (1) an employee stock ownership plan (as
defined in Section 4975(e) or Section 409 of the Code); or (2) a
simplified employee pension plan as defined in Section 408(k) of
the Code, and as otherwise permitted under the remaining provisions
of this Section.
(b) Successor Plan. For purposes of applying the
general rule above, and as provided in applicable Treasury
Regulations, a distribution of 401(k) Contribution Accounts cannot
occur on account of termination of the Plan if the employer
establishes or maintains a successor plan. For purposes of this
rule, a successor plan is any other defined contribution plan
maintained by the same employer. However, if fewer than two
percent of the employees who are eligible under the plan that
includes the cash or deferred arrangement at the time of its
termination are or were eligible under another defined contribution
plan at any time during the 24 month period beginning 12 months
before the time of the termination, the other plan is not a
successor plan. A plan is a successor plan only if its exists at
the time the plan including the cash or deferred arrangement is
terminated or within the period ending 12 months after distribution
of all assets from the plan.
(c) Lump Sum Requirement. After March 31, 1988, a
distribution may be made on account of termination of the Plan only
if it is a lump sum distribution (as provided in Section 402(d)(4)
of the Code, without regard to subparagraphs (A)(i) through (iv),
(B) and (H) thereof).
<PAGE>
ARTICLE XVII -- MISCELLANEOUS
17.1 Plan Not Contract of Employment. Participation in
the Plan shall not give any Participant any right to be retained in
the service of the Employer or an Affiliated Company. The Employer
and each Affiliated Company expressly retains the right to hire and
discharge any Employee or Participant at any time with or without
cause, as if this Plan had not been adopted. Any discharged
Participant shall have only the rights or interests in the Trust
Fund as may be specified in the Plan.
17.2 Records of the Employer. The records of the Employer
and each Affiliated Company with respect to Age, Hours of Service,
service, Years of Service, One Year Breaks in Service, service
history, Compensation, absences, illnesses and all other relevant
matters shall be conclusive for purposes of the administration of
this Plan.
17.3 Gender and Number. Pronouns and other similar words
used in the masculine gender shall be read as the feminine gender
where appropriate and the singular form of words shall be read as
the plural where appropriate.
17.4 Headings. Any headings or subheadings in the Plan
are inserted for convenience of reference only and are to be
ignored in the construction of any provision of the Plan.
17.5 Law Governing. Except as otherwise required by law,
the validity, construction and administration of this Plan shall be
determined under the laws of the State of Ohio.
17.6 Successor Company. In the event of the merger,
consolidation, sale of assets, liquidation or other reorganization
of NSS, under circumstances in which a successor shall continue and
carry on all or a substantial part of the business of NSS and shall
elect to continue this Plan, the successor shall be substituted for
NSS under the terms and provisions of this Plan upon filing its
written election to that effect with NSS, the Trustee and the Plan
Administrator.
17.7 Merger or Consolidation of Plan Assets. This Plan
shall not merge or consolidate with, or transfer its assets or
liabilities to, any other plan unless each Participant would (if
the Plan then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than
the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then
terminated).
17.8 Indemnification. The Employer may indemnify, through
insurance or otherwise, any one or more of the fiduciaries with
respect to the Plan against any claims, losses, expenses, damages
<PAGE>
or liabilities arising out of the performance (or failure of
performance) of their responsibilities under the Plan.
17.9 Expenses of Administration. The Employer may, but
does not obligate itself to, pay all or part of the expenses of
administration of the Plan, including the fees and expenses of the
Trustee, the expenses of the Plan Administrator and Investment
Committee and any other expenses incurred at the direction of the
Plan Administrator or the Investment Committee. To the extent that
any of these expenses are not paid by the Employer, these expenses
shall be paid by the Trustee out of the Trust Fund. Provided,
however, that no fees for services rendered as a fiduciary will be
paid from the Trust Fund to a fiduciary who is also a full-time
Employee of an Employer.
17.10 Allocation of Fiduciary Responsibilities. The
Employer shall be responsible for the provision of factual data
regarding Employees and Participants, and making Employer
contributions to the Plan. The Trustee shall be responsible for
the investment of the assets of the Trust Fund (except to the
extent that (i) the Plan Administrator exercises that
responsibility or delegates that responsibility to a different
person or entity under the Trust Agreement or (ii) Participants or
Beneficiaries exercise that responsibility), and for the custody
and valuation of assets of the Trust Fund. The Plan Administrator
shall have exclusive responsibility for the administration of the
Plan (except to the extent that those duties have been specifically
allocated otherwise pursuant to the Plan or this Section). Each
fiduciary shall be responsible only for the specific duties
assigned to it in the Plan and this Section and shall not be
directly or indirectly responsible for the duties assigned to
another fiduciary. The Plan Administrator shall be deemed the
administrator and the named fiduciary for purposes of ERISA;
provided, however, that in the event the Plan Administrator
delegates its responsibilities, the person, persons or entity to
whom those responsibilities are delegated shall be deemed the
administrator and the named fiduciary.
17.11 Severability. In the event any provision of the
Plan is held illegal or invalid for any reason, the illegality or
invalidity shall not affect any other Plan provision. The Plan
shall be construed and interpreted as if the illegal or invalid
provision never appeared in the Plan.
17.12 Exclusive Benefit.
(a) General Rule. All contributions made by the
Employer are made for the exclusive benefit of the Participants and
their Beneficiaries. Those contributions shall not be used for or
diverted to purposes other than for the exclusive benefit of the
Participants and their Beneficiaries (including the costs of
maintaining and administering the Plan and Trust Fund).
<PAGE>
(b) Refund to the Employer. Notwithstanding the
provisions of subsection (a), amounts contributed to the Trust Fund
by the Employer are entirely contingent upon their deductibility
and shall, if determined to be non-deductible, be refunded to the
Employer to the extent that the refunds do not, in themselves,
deprive the Plan of its qualified status, under the following
circumstances and subject to the following limitations:
(1) To the extent that a Federal income tax
deduction is disallowed for any Employer contribution (other than
any Employer contributions allocable to the purchase of life
insurance for a self-employed individual), the Trustee shall, upon
request of the Employer, refund to the Employer the amount so
disallowed within one year of the date of the disallowance. All
Employer contributions under the Plan are expressly conditioned on
their deductibility for federal income tax purposes.
(2) In the case of an Employer contribution
which is made in whole or in part by reason of a mistake of fact
(for example, incorrect information as to the eligibility or
Compensation of a Participant, or a mathematical error), so much of
the contribution as is attributable to the mistake of fact shall be
returned to the Employer on demand upon presentation of evidence of
the mistake of fact to the Trustee. Demand and repayment must be
completed within one year after the payment of the Employer
contribution to which the mistake applies.
(c) Calculation of Refund. In the event that any
refund is paid to the Employer, the refund shall be made without
interest and shall be deducted from among the Employer Contribution
Account and Profit Sharing Contribution Accounts of the
Participants as a Net Loss except to the extent that the amount of
the refund can be attributed to one or more specific Participants
(as in the case of certain mistakes of fact, etc.) in which case
the amount of the refund attributable to each Participant's
Employer Contribution Account and Profit Sharing Contribution
Account shall be deducted directly from that Account.
(d) Limitation on Refund.
(1) Notwithstanding any other provision of this
Section, no refund shall be made to the Employer which is
specifically chargeable to the Account(s) of any Participant(s) in
excess of 100% of the amount in the Account nor shall a refund be
made by the Trustee of any funds, otherwise subject to refund,
which have been distributed to Participants or Beneficiaries. If
these distributions become refundable, the Employer shall have a
claim directly against the distributee to the extent of the refund
to which the Employer is entitled.
(2) All refunds under this Section shall be
limited in amount, circumstance and timing to the provisions of
ERISA. No refund shall be made if, solely on account of the
<PAGE>
refund, the Plan would cease to be a qualified Plan under the
Internal Revenue Code.
Executed by a duly authorized representative of National
Sanitary Supply Company on September 26, 1994.
NATIONAL SANITARY SUPPLY COMPANY
By /s/ Paul C. Voet
-------------------------------------
President and Chief Executive Officer
SIGNATURE PAGE
<PAGE>
The following Affiliated Companies also participate in the
Plan and hereby consent to the adoption of the amendment and
restatement of the Plan.
A. Name: National Sanitary Supply Development, Inc.
Effective Date of Adoption: January 1, 1989
Date Signed: September 26, 1994
By /s/ Paul C. Voet
--------------------------------------
President and Chief Executive Officer
B. Name: Century Papers, Inc.
Effective Date of Adoption: January 1, 1992
Date Signed: September 26, 1994
By /s/ Paul C. Voet
---------------------------------------
Chairman
C. Name: Cardinal Papers, Inc.
Effective Date of Adoption: January 1, 1992
Date Signed: September 26, 1994
By /s/ Paul C. Voet
----------------------------------------
Chairman
SIGNATURE PAGE
<PAGE>
APPENDIX A -- PLAN AND EMPLOYER HISTORY
Effective July 1, 1987, National Sanitary Supply Company
established the National Sanitary Supply Company Savings and
Investment Plan (the "Savings Plan").
Effective February 1, 1966, National Sanitary Supply Company
established the National Sanitary Supply Company Profit Sharing
Plan (the "Profit Sharing Plan").
Effective January 1, 1992, National Sanitary Supply Company
amended and restated the Savings Plan to permit Participant 401(k)
Contributions.
Effective January 1, 1992, National Sanitary Supply Company
commenced participation in the Chemed Employee Stock Ownership Plan
II and continued participation thereunder until March 31, 1993.
Effective April 1, 1993, National Sanitary Supply Company
commenced participation in the Chemed Employee Stock Ownership Plan
I and has thereafter continued participation thereunder.
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Savings Plan and the Savings Plan was renamed to be the
National Sanitary Supply Company Employees Thrift and Profit
Sharing Plan (the "Plan").
Effective October 1, 1994, the Plan was amended to permit
Participants to use employee contributions to purchase shares of
NSS common stock and to expand the available investment options
under the Plan.
<PAGE>
APPENDIX B--ARTICLE I NAME OF PLAN
1.4 Securities Registration. Effective October 1, 1994,
the Plan was amended to permit employee contributions to purchase
NSS common stock as securities of the employer. Prior to October
1, 1994, the Plan's investment in NSS common stock was limited
solely to employer contributions under the Plan. Accordingly,
prior to October 1, 1994, the sales of both participation interests
of the Plan and NSS common stock under the Plan (securities for
federal securities laws purposes) were not registered under the
Securities Act of 1933 by reason of the Plan's qualification for
Section 3(a)(2) of the Securities Act of 1933.
<PAGE>
APPENDIX C -- ARTICLE II DEFINITIONS
1. General
2.2 Affiliated Companies. The following corporations are
(or were) Affiliated Companies of National Sanitary Supply Company:
Chemed Corporation and related corporations (Chemed Corporation
approximate 88% ownership of NSS).
The Veratex Corporation and related corporations (Chemed
Corporation 100% ownership), Effective January 1, 1993.
Patient Care, Inc. (Chemed Corporation 100% ownership), Effective
January 1, 1994.
Prior to April 2, 1991, DuBois Chemicals, Inc. (Chemed Corporation
100% ownership).
2.21 Employing Units. The following corporations and
divisions are Employing Units of the Plan:
Current Major/Sub Employing Units
NSS West, Division of NSS:
Arizona Division
La/Central California Division
Nevada Division
New Mexico Division
Northern California Division
Oregon Division
Sanichem Division
Southern California Division
Utah Division
Washington Division
West Hub Headquarters Division
NSS Midwest, Division of NSS (effective January 1, 1992):
Great Lakes Division
Indiana Division
Missouri Division
Ohio River Valley Division
Century Papers, Inc. (effective January 1, 1992):
Cardinal Division
Central Texas Division
Century Hub Headquarters Division
Colorado Division
Dallas Division
<PAGE>
East Texas Division
El Paso Division
Houston Division
Mississippi Division
South Texas Division
Tennessee Division
West Texas Division
2.50 Related Companies. The following corporations are
Related Companies of Chemed and National Sanitary Supply Company:
Roto-Rooter, Inc. (Chemed Corporation approximate 60%
ownership).
Omnicare, Inc. (Chemed Corporation approximate 30%
ownership).
2.61 Trustee. The following person is Trustee of the
Plan:
PNC Bank, Ohio, N.A. (formerly, The Central Trust
Company, N.A.), Effective July 1, 1987
2. Profit Sharing Plan Merger
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For periods beginning from October 1, 1994, the
following provisions are applicable to the Plan:
2.48 Profit Sharing Contribution Account. A Participant's
Profit Sharing Account shall also include his transferred profit
sharing account balance from the Profit Sharing Plan (if any).
2.64 Years of Service.
(c) Years Under Merged Plan. Pursuant to Section
2.64(c), an Employee's Years of Service shall be no less than his
years of service under the Profit Sharing Plan as of October 1,
1994, the effective date of the merger of the Profit Sharing Plan
into the Plan.
3. Profit Sharing Plan
Historical Provisions
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For periods from January 1, 1989, the restatement
effective date of the Plan and Profit Sharing Plan, to October 1,
1994, the merger effective date of the Profit Sharing Plan into the
<PAGE>
Plan, the following provisions were applicable to the Profit
Sharing Plan:
2.9 Disabled Participant. Under the Profit Sharing Plan,
no special provision was made for total and permanent disability.
2.10 Early Retirement Date. Under the Profit Sharing
Plan, there was no early retirement date.
2.11 Effective Date. Under the Profit Sharing Plan, the
Effective Date was February 1, 1966.
2.13 Eligibility Computation Period. Under the Profit
Sharing Plan, subsequent Eligibility Computation Periods began on
the anniversary of an Employee's Employment Date (not on a Plan
Year basis).
2.33 Investment Fund. Under the Profit Sharing Plan, the
Plan's investments consisted of the NSS Stock Fund and general
invested assets of the Trust Fund.
2.40 Normal Retirement Date. Under the Profit Sharing
Plan, for periods prior to October 1, 1994, the normal retirement
date was the anniversary of the initial entry date preceding the
65th birthday.
2.58 Totally and Permanently Disabled. Under the Profit
Sharing Plan, no special provision was made for total and permanent
disability.
2.63 Valuation Date. Under the Profit Sharing Plan, the
Valuation Date was the last day of each Plan Year and, effective
January 1, 1991, the last day of each month.
<PAGE>
APPENDIX D -- ARTICLE III ELIGIBILITY
1. Profit Sharing Plan Merger
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For periods beginning from October 1, 1994, the
following provisions are applicable to the Plan:
3.2 Participation Date; Application for Participation.
Effective October 1, 1994, each participant of the Profit Sharing
Plan on September 30, 1994 shall become a Participant of the Plan
(if not otherwise already a Participant) effective October 1, 1994,
the effective date of the merger of the Profit Sharing Plan into
the Plan.
2. Profit Sharing Plan
Historical Provisions
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For periods from January 1, 1989, the restatement
effective date of the Plan and Profit Sharing Plan, to October 1,
1994, the merger effective date of the Profit Sharing Plan into the
Plan, the following provisions were applicable to the Profit
Sharing Plan:
3.1 Eligibility for Participation. Under the Profit
Sharing Plan, eligibility to participate in the Plan was based on
the following provisions: Each Eligible Employee who completes not
less than 1,000 Hours of Service during any Eligibility Computation
Period shall become a Participant on any Entry Date.
3.8 Service With Newly Acquired Entities. Under the
Profit Sharing Plan, the Board of Directors of NSS have determined
the following service credit and/or special Entry Date with respect
to the following newly acquired entities:
<PAGE>
Grant of Past Service/Special Entry Date. For the
employees of the following acquired business assets, (i) service
with the acquired business was treated as service with an Employer
and (ii) a special Entry Date of the first day of next Plan Quarter
was extended:
<TABLE>
<CAPTION>
Acquisition
Acquisition Date
<S> <C>
Dreyfus Industries, Inc. 07/09/90
Superior Supply, Inc. 09/30/91
Time Chemical and Janitor Supply 01/13/92
Thompson's Supply Co. 02/03/92
Tiger Products, Inc. 03/30/92
Acme Pacific Paper Co. 03/31/92
Tidy Tom's, Inc. 01/26/93
</TABLE>
No Grant of Past Service/No Special Entry Date. For the
employees of the following acquired business assets, (i) no past
service credit was extended for service with the acquired business
and (ii) no special Entry Date was extended:
<TABLE>
<CAPTION>
Acquisition
Acquisition Date
<S> <C>
Hometown Supply Company 08/27/90
Southern Supply 05/29/91
Jantek, Inc. 11/04/91
East Texas Chemical 02/28/94
</TABLE>
<PAGE>
APPENDIX E - ARTICLE IV CONTRIBUTIONS
1. 401(k) Contributions
Effective January 1, 1992, the Plan was amended to permit
Participant 401(k) Contributions. Prior to such time, the various
provisions of Article IV relating to 401(k) Contributions did not
apply.
2. Profit Sharing Plan
Historical Provisions
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For periods from January 1, 1989, the restatement
effective date of the Plan and Profit Sharing Plan, to October 1,
1994, the merger effective date of the Profit Sharing Plan into the
Plan, the following provisions were applicable to the Profit
Sharing Plan:
4.10 Profit Sharing Contributions.
(b) Application of Forfeitures. Under the Profit
Sharing Plan, forfeitures during the Plan Year pursuant to Sections
10.3 and 11.9 were applied as a separate Profit Sharing
Contribution under this Section 4.10, but allocated on the basis
that forfeitures arising from Participants within the Major
Employing Units of the Plan, NSS West, NSS Midwest and Century
Papers, shall be allocated among otherwise eligible Participants
within such Major Employing Units.
3. Profit Sharing Plan Special
1994 Plan Year Forfeiture Allocation
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For period beginning from January 1, 1994 to
October 1, 1994, the following provisions are applicable to the
Plan:
4.10 Profit Sharing Contributions.
(b) Application of Forfeitures. With respect to the
Plan Year beginning on January 1, 1994, for the period from January
1, 1994 to October 1, 1994, forfeitures during such period pursuant
to Sections 10.3 and 11.9 were applied as a separate Profit Sharing
Contribution under this Section 4.10, and allocated on the basis
that forfeitures arising from Participants of a Major Employing
Unit Group were allocated among otherwise eligible Participants of
the Major Employing Group, but were allocated on the basis of
Eligible Participants under Section 4.10(c) determined as of
<PAGE>
September 30, 1994 and with respect to Compensation for the period
beginning on January 1, 1994 through September 30, 1994.
For periods beginning on and after October 1, 1994,
forfeitures shall be applied to reduce Employer Contributions and
Profit Sharing Contributions, as so provided under Section 11.9(e).
<PAGE>
APPENDIX F -- ARTICLE V TRUSTEE; INVESTMENTS
1. New Investment Options
Effective October 1, 1994, the Plan ceased to maintain the
Plan's Fixed Income Fund in favor of the following General Funds:
The Admiral Short-Term U.S. Treasury Portfolio
The Admiral Intermediate-Term U.S. Treasury Portfolio
Vanguard Asset Allocation Fund
The 500 Portfolio Index Trust
U.S Growth Portfolio
2. Savings Plan
Historical Provisions
Effective October 1, 1994, the Savings Plan was amended to
permit Participants to invest employee contributions in NSS common
stock and to expand available investment options under the Plan.
For periods from January 1, 1989, the restatement effective date of
the Plan, to October 1, 1994, the effective date of the foregoing
changes, Sections 5.3, 5.5, 5.6, 5.9 and 5.11 of Article V
(formerly Article XIII) read as follows:
5.3 Appointment and Powers and Duties of Investment
Committee. The Board of Directors of NSS may appoint an Investment
Committee which shall have full power to direct the investment of
all or any portion of the Fixed Income Fund and to retain and, if
the Investment Committee so determines, dismiss and replace such
investment advisors and managers, counsel, accountants and other
agents as the Investment Committee shall deem advisable.
5.5 Composition of the Trust Fund. The Trust Fund shall
consist of a Fixed Income Fund and a NSS Stock Fund.
(a) Fixed Income Fund. The assets of the Fixed
Income Fund shall be invested in such manner as the Investment
Committee shall direct the Trustee in writing. In the absence of
such direction, the Trustee shall invest and reinvest the monies in
the Fixed Income Fund principally in such fixed income securities
as the Trustee may in its discretion select, including but not
limited to, bonds, notes, debentures or other evidences of
indebtedness, whether or not secured; stocks, shares and other
interests in associations, firms or corporations; interests in
property, real or personal; and in contracts with insurance
companies as may be approved by the Investment Committee,
specifically including but not limited to, group annuity contracts.
In making such investments or reinvestments, the Trustee shall not
be limited or restricted by any statute or rule of law now or
<PAGE>
hereafter in effect governing trust investments; the Trustee shall
have power to invest the Fixed Income Fund, or any part thereof, in
a common, collective or commingled fund with funds held by it
subject to other trusts, including, without limitation, any pooled
investment trust maintained by the Trustee for investment of funds
of qualified employee benefit plans. The Fixed Income Fund shall
not be invested in stocks or securities of the Employer or any
Affiliated Company.
(b) NSS Stock Fund.
(1) The Trustee shall invest the assets of the
NSS Stock Fund in shares of the capital stock, par value $1.00 per
share, of NSS ("NSS Stock"). The Trustee shall purchase NSS Stock
on the principal stock exchange on which NSS Stock is listed. If
NSS Stock is not then listed on a stock exchange, the Trustee shall
purchase NSS Stock in the over the counter market at a price not
exceeding the prevailing market "asked" price through brokers
selected by the Trustee, or at a price not greater than the then
prevailing market "asked" price through private transactions.
These purchases shall be made as soon as reasonably practicable
after receipt of funds by the Trustee. The NSS Stock purchased by
the Trustee shall be registered in its name or in the name of its
nominee, as the Trustee shall elect.
(2) In lieu of making purchases described in
Section 5.5(b)(1) and/or sales of NSS Stock in the open market, the
Trustee may, in its discretion, match purchases and sales of NSS
Stock to be made at substantially the same time. In that event,
the price at which the NSS Stock shall be considered to have been
purchased and sold shall be determined by the Trustee based upon
the then prevailing market price for NSS Stock.
5.6 Investment of Contributions.
(a) Employer Contributions. All Employer
Contributions received by the Trustee will be invested by the
Trustee in the NSS Stock Fund.
(b) Employee Contributions. All Employee
Contributions received by the Trustee will be invested in the Fixed
Income Fund.
(c) Reinvestment of Earnings. Earnings on assets of
the Fixed Income Fund and the NSS Stock Fund shall be reinvested in
the Investment Fund in which the assets were held.
(d) Investment Risk. Each Participant assumes all
risks connected with any decrease in the value of any securities or
other investment in the Trust Fund.
5.7 Change of Investment Election. Not applicable prior
to October 1, 1994.
<PAGE>
5.8 Transfer of Funds. Not applicable prior to October 1,
1994.
5.9 Participant NSS Stock Voting Rights. Before each
annual or special meeting of the stockholders of NSS, the Employer
shall cause to be sent to each Participant having vested shares of
NSS Stock allocated or allocable to his Employer Contribution
Account a copy of the proxy solicitation material therefor,
together with a form requesting confidential instructions to the
Trustee on how to vote such vested shares. Upon receipt of such
instructions, the Trustee shall vote the shares of NSS Stock as
instructed. Instructions received from individual Participants
shall not be divulged or released to any person, including officers
or employees of the Employer or NSS or Chemed. The Trustee shall
have the right to vote, in person or by proxy, at its discretion
any shares of NSS Stock for which voting instructions shall not
have been received and all shares of NSS Stock in which
Participants shall not have any vested interest.
5.11 Exchange or Tender Offers. In the event there shall
be extended to the stockholders of NSS generally an offer to
exchange or purchase all or a portion of the issued and outstanding
shares of NSS Stock for cash and/or other consideration, the
Trustee shall take action as shall be ordered by the Board of
Directors of NSS acting upon and in accordance with the Incentive
Committee of the Board of Directors of NSS.
3. Profit Sharing Plan
Historical Provisions
Effective October 1, 1994, the Profit Sharing Plan was merged
into the Plan. For periods from January 1, 1989, the restatement
effective date of the Plan and Profit Sharing Plan, to October 1,
1994, the merger effective date of the Profit Sharing Plan into the
Plan, the following provisions were applicable to the Profit
Sharing Plan:
5.4 Composition of the Trust Fund. Under the Profit
Sharing Plan, the Plan's investments consisted of general invested
assets of the Trust Fund, including NSS Stock.
<PAGE>
APPENDIX G -- ARTICLE X LOANS AND WITHDRAWALS
1. 401(k) Contributions
Effective January 1, 1992, the Plan was amended to permit
Participant 401(k) Contributions. Prior to such time, the various
provisions of Article X relating to 401(k) Contributions did not
apply.
2. Savings Plan
Historical Provisions
The following Section 10.3(a) of the Plan (formerly Article
VII) was the applicable provisions prior to January 1, 1995:
10.3 Forfeiture of Withdrawals.
(a) Forfeiture on Withdrawals. Upon any withdrawal
of Basic Employee Contributions, the Participant shall forfeit a
percentage of the unvested Employer Contributions credited to his
Employer Contribution Account equal to the percentage of his Basic
Employee Contributions so withdrawn.
10.5 Payment of Withdrawals. References to NSS Stock
being paid from a Participant's Thrift Contribution Account and
401(k) Contribution Account did not apply prior to October 1, 1994,
the effective date for which Participant's employee contributions
could be invested in NSS Stock.
10.6 No Withdrawals From Profit Sharing Contribution
Account. The exception for withdrawals after Normal Retirement
Date shall be effective October 1, 1994.
<PAGE>
APPENDIX H -- ARTICLE XI BENEFIT PROVISIONS
1. 401(k) Contributions
Effective January 1, 1992, the Plan was amended to permit
Participant 401(k) Contributions. Prior to such time, the various
provisions of Article XI relating to 401(k) Contributions did not
apply.
<PAGE>
APPENDIX I -- ARTICLE XII METHODS OF PAYMENT
Savings Plan
Historical Provisions
Article XII reflected the following: (1) prior to October 1,
1994, the effective date of the Plan's new General Funds, only the
Plan's Fixed Income Fund; and (2) prior to October 1, 1994, the
effective date of the Plan's option for Participants to invest
employee contributions in NSS Stock, the investment of a
Participant's Employee Contribution Account in NSS Stock.
12.2 Methods of Payment.
(a) Methods of Payment.
Prior to October 1, 1994, the following provision
applied:
(1) If the Participant fails to make an election
pursuant to Sections 12.2(a)(1) through (6), his distribution will
be either in the form of an annuity for life with payment
guaranteed for ten years if the Participant is unmarried or, if the
Participant is married, in the form of Qualified Joint and Survivor
Annuity pursuant to the provisions of Article XIII.
Severance While Ineligible for Retirement.
(2) [Installment Payout]. Not applicable prior
to October 1, 1994.
NATIONAL SANITARY SUPPLY COMPANY
COLLECTIVE THRIFT AND PROFIT SHARING PLAN
TRUST AGREEMENT
Trust Agreement, made as of the 1st day of October, 1994, by
and between National Sanitary Supply Company, a corporation
organized under the laws of the State of Delaware, (hereinafter
referred to as the "Company"), and PNC Bank, Ohio, National
Association (fka The Central Trust Company, N.A.), incorporated
under the laws of the State of Ohio (hereinafter also referred to
as the "Trustee").
WITNESSETH
WHEREAS, the Company adopted the "National Sanitary Supply
Company Savings and Investment Plan", effective July 1, 1987
(hereinafter referred to as the "Savings Plan"), for the benefit of
eligible employees of the Company and eligible employees of its
designated participating subsidiaries (hereinafter referred to as
"participating employees"), as defined in the Savings Plan; and
WHEREAS, pursuant to resolutions of its Board of Directors,
the Company appointed the Trustee as trustee of the trust for the
Savings Plan and entered into a trust agreement with the Trustee
therefor; and
WHEREAS, the Company adopted the "National Sanitary Supply
Company Profit Sharing Plan", effective February 1, 1966 (hereinafter
referred to as the "Profit Sharing Plan"), for the benefit of
eligible employees of the Company and eligible employees of its
designated participating subsidiaries (hereinafter referred to as
"participating employees"), as defined in the Profit Sharing Plan;
and
WHEREAS, the Company adopted the "Paul Koss Supply Co. Profit
Sharing Plan", effective June 1, 1970 (hereinafter referred to as
the "Paul Koss Plan"), for the benefit of eligible employees of the
Paul Koss Supply Co. (a subsidiary of the Company) and eligible
employees of its designated participating subsidiaries (hereinafter
referred to as "participating employees"), as defined in the Paul
Koss Plan; and
WHEREAS, pursuant to resolutions of its Board of Directors,
the Company appointed the Trustee as trustee of a collective trust
for the Profit Sharing Plan and Paul Koss Plan and entered into a
trust agreement with the Trustee therefor; and
WHEREAS, pursuant to resolutions of its Board of Directors
dated as of August 3, 1994, the Company merged the Profit Sharing
Plan into the Savings Plan effective as of October 1, 1994 and
renamed the Savings Plan to be the "National Sanitary Supply
Company Employees Thrift and Profit Sharing Plan" (hereinafter
<PAGE>
referred to as the "Thrift/Profit Sharing Plan") for the benefit of
eligible employees of the Company and eligible employees of its
designated participating subsidiaries (hereinafter referred to as
"participating employees"), as defined in the Thrift/Profit Sharing
Plan; and
WHEREAS, pursuant to resolutions of its Board of Directors
dated as of August 3, 1994, the Company authorized participant
investment direction under the Thrift/Profit Sharing Plan and Paul
Koss Plan effective October 1, 1994 and the permitted investment of
employee contributions under the Thrift/Profit Sharing Plan in
shares of common stock of the Company effective October 1, 1994;
and
WHEREAS, the Thrift/Profit Sharing Plan and the Paul Koss Plan
(collectively, the "Plans") are themselves separate plans; and
WHEREAS, under the Plans, contributions will be made to the
Trustee, which contributions when received by the Trustee will
constitute a Trust Fund (hereinafter referred to as the "Trust")
for each of the Plans, to be held and applied for the benefit of
participating employees or their beneficiaries of the respective
Plans; and
WHEREAS, the Trust shall be a collective trust for the
Thrift/Profit Sharing Plan and the Paul Koss Plan, with separate
accounting of assets under each Plan as so provided under the terms
of this trust agreement,
NOW, THEREFORE, in consideration of the promises and of the
mutual covenants herein contained, the Company and the Trustee do
hereby declare and agree each with the other as follows:
SECTION 1. All sums of money and such property as shall from
time to time be paid or delivered to the Trustee pursuant to the
provisions of the Plans, all investments made therewith and
proceeds thereof and all earnings and profits thereon, less the
payments which at the time of reference shall have been made by the
Trustee as authorized herein are referred to herein as the "Trust".
No part of the corpus or income of the Trust shall be used for, or
diverted to, purposes other than (i) for the exclusive benefit of
participating employees or their beneficiaries and (ii) for the
payment of Plan administrative expenses.
SECTION 2. Subject to the conditions of Section 1 hereof, the
Trustee shall from time to time on the directions of the
Administrative Committees provided for in the Plans (hereinafter
referred to as the "Committee" or "Committees") make cash payments
and distributions of NSS Stock (as defined below) out of the Trust
to such persons, including members of the Committees, in such
manner, in such amounts, for such purposes, and from such Fund of
the Trust (as described in Section 4 hereof) as may be specified in
<PAGE>
the directions of the respective Committee.
SECTION 3. It shall be the duty of the Trustee (a) to hold,
administer and invest the Trust as hereinafter provided, and (b) to
pay moneys and to distribute shares of NSS Stock on orders
certified by the Committees as being in accordance with the Plans.
Such orders need not specify the application to be made of moneys
and NSS Stock so ordered, and the Trustee shall not be responsible
in any way respecting such application or for such administration
of the Plans.
The Trustee shall have no responsibility or authority in
connection with the determination of the amounts to be transferred
to it from time to time on behalf of participating employees, nor
shall the Trustee have any authority to bring any action or
proceeding to enforce the collection of any such amount.
SECTION 4. The Trustee shall invest and reinvest the
principal and income of the Trust, and keep the Trust invested
without distinction between principal and income, in the following
manner:
A. Investment Funds - The Trustee shall invest in the
General Funds (as such term is provided under the definition of
Investment Fund in the Plans) as selected from time to time by the
Investment Committee as provided for in the Plans. The General
Funds of the Trust held by the Trustee shall be invested, managed
and administered as directed by the Investment Committee, and any
applicable investment direction instructions of participants and
beneficiaries under the terms of the Plans, and not in conjunction
with or jointly with or requiring the approval of or acquiescence
in or any other action or inaction by the Trustee.
B. NSS Stock Fund - The NSS Stock Fund shall be invested
in the common stock, par value $1.00 per share, of the Company
("NSS Stock"). The NSS Stock Fund of the Trust held by the Trustee
shall be invested, managed and administered as directed by the
Investment Committee, and any applicable investment direction
instructions of participants and beneficiaries under the terms of
the Plans, and not in conjunction with or jointly with or requiring
the approval of or acquiescence in or any other action or inaction
by the Trustee. The NSS Stock Fund shall be allocated between the
Thrift/Profit Sharing Plan and the Paul Koss Plan as the Investment
Committees shall direct.
The Trustee shall purchase NSS Stock on the principal stock
exchange on which NSS is listed, or, if such stock is not then
listed on a stock exchange, in the over the counter market at a
price not exceeding the prevailing market "asked" price through
brokers selected by the Trustee, or, at a price not greater than
the then prevailing market "asked" price through private
transactions. Such purchase or purchases shall be made as soon as
<PAGE>
reasonably practicable after receipt of funds by the Trustee. The
NSS Stock purchased by the Trustee shall be registered in its name
or in the name of its nominee, as the Trustee shall elect.
In lieu of making purchases, as above, and/or sales of NSS
Stock in the open market, the Trustee may, in its discretion, match
purchases and sales of NSS Stock to be made at substantially the
same time. In such event, the price at which such NSS Stock shall
be considered to have been purchased and sold shall be determined
by the Trustee based upon the then prevailing market price for NSS
Stock.
In lieu of purchases of NSS Stock in the open market or
matched purchases and sales of NSS Stock by the Trustee, the
Company may directly sell or contribute shares of NSS Stock to the
Trust. In that event, the price at which the NSS Stock shall be
purchased (if sold), or shall be considered to be purchased (if
contributed), shall be determined by the Trustee based upon a price
which is not less favorable to the Plan than the Adequate
Consideration Price of NSS Stock determined under Section 3(18) of
ERISA (as provided below) and consistent with the exemption under
Section 408(e) of ERISA.
The term "Adequate Consideration Price" shall have the
following meanings (as applicable), as determined consistent with
Section 3(18) of ERISA:
(a) In the case of a security for which there is a
generally recognized market (within the meaning of Section 3(18) of
ERISA), the Adequate Consideration Price shall mean the price of
the security prevailing on a national security exchange which is
registered under Section 6 of the Securities Exchange Act of 1934.
(b) In the case of a security for which there is a
generally recognized market (within the meaning of Section 3(18) of
ERISA), but is not traded on a national security exchange which is
registered under Section 6 of the Securities Exchange Act of 1934,
the Adequate Consideration Price shall mean the price determined
pursuant and subject to the following provisions:
(1) The price shall be the weighted average of
the closing completed trade prices of the security over the 20
trading days preceding the date of the transaction, determined by
taking the sum of the closing completed trade prices in effect on
each of such 20 preceding trading days divided by 20.
(2) In no event shall the price exceed the
lesser of the following prices: (A) the lowest completed trade
price of the security on the date of the transaction; or (B) the
average of the bid and asked prices quoted for the security on the
date of the transaction.
<PAGE>
(3) The only closing completed trade prices,
lowest completed trade prices and quoted bid and asked prices to be
considered for purposes of the foregoing provisions shall be those
such prices reported by NASDAQ and by persons independent of the
issuer and of any party in interest or disqualified person with
respect to the Plans (as such terms are defined in Section 3(14) of
ERISA or Section 4975(d) of the Code, respectively).
(4) In no event shall a transaction of NSS Stock
occur, when using the foregoing methodology, unless there have been
seven completed trades between independent persons in the 20
trading days preceding the date of the transaction.
(c) In the case of an asset other than a security for
which there is a generally recognized market (within the meaning of
Section 3(18) of ERISA), the Adequate Consideration Price shall
mean the fair market value of the asset as determined in good faith
by the trustee or named fiduciary pursuant to the terms of the plan
and in accordance with the regulations promulgated by the Secretary
of Labor.
<PAGE>
Before each annual or special meeting of the stockholders of
the Company, the Company shall cause to be sent to each
participating employee having vested shares of NSS Stock allocated
or allocable to his account in this Fund a copy of the proxy
solicitation material therefor, together with a form requesting
confidential instructions to the Trustee on how to vote such vested
shares. Upon receipt of such instructions, the Trustee shall vote
the shares of NSS Stock as instructed. Instructions received from
individual participating employees shall not be divulged or
released to any person, including officers or employees of the
Company or Chemed. The Trustee shall have the right to vote, in
person or by proxy, at its discretion any shares of NSS Stock for
which voting instructions shall not have been received and all
shares of NSS Stock in which participating employees shall not have
any vested interest.
In the event (a) any recapitalization of the Company or
reclassification, split-up, combination or consolidation of shares
of NSS Stock shall be effected, or (b) the outstanding shares of
NSS Stock shall, in connection with a reorganization or
consolidation of the Company be exchanged for a different number or
class of shares of the common stock or other securities of the
Company, then upon written direction from the Secretary of the
Company pursuant to order of the Company's Board of Directors
acting upon and in accordance with the recommendations of the
Incentive Committee designated by the Board of Directors
(hereinafter referred to as the "Incentive Committee"), the Trustee
shall take such action as shall be ordered by the Company's Board
of Directors and to the extent that NSS Stock is to be exchanged
for a different number or class of the common stock or other
securities of the Company pursuant to such order, as aforesaid,
then such different number or class of shares of the common stock
or other securities of NSS shall be exchanged for NSS Stock by the
Trustee, and the name and class of such shares of common stock or
other securities of the Company received in exchange for NSS Stock
shall be substituted in all respects for all references to NSS
Stock as presently stated in this Trust Agreement.
In the event there shall be extended to the stockholders of
the Company generally an offer to exchange or purchase all or a
portion of the issued and outstanding shares of NSS Stock for cash
and/or other consideration, then upon written direction from the
Secretary of the Company pursuant to order of the Company's Board
of Directors acting upon and in accordance with the recommendations
of the Incentive Committee, the Trustee shall take such action as
shall be ordered by the Company's Board of Directors.
The Trustee will prepare and file such reports and information
with the Securities and Exchange Commission as may be required
under Section 16(a) of the Securities Exchange Act of 1934 and
Section (d) of the Securities and Exchange Commission's Rule 16A-8
<PAGE>
or which the Securities and Exchange Commission may now or
hereafter otherwise request or require be filed in connection with
the Trustee's holdings of NSS Stock or transactions in NSS Stock,
or allocations or distributions of NSS Stock to or for the accounts
of officers and directors of the Company.
The Trustee shall treat each of the General Funds and the NSS
Stock Fund separately and the income of each such Fund shall be
accumulated and invested in such Fund. The Trustee may keep any
portion of the assets of the NSS Stock Fund of the Trust in interest
bearing cash or in short term obligations of the United States
Government or agencies thereof or in other types of short term
investments, including commercial paper (other than obligations of the
Company or of Chemed and their respective subsidiaries) as the Trustee
may from time to time deem to be in the best interests of the
participating employees or other beneficiaries of the Plans.
The Trustee shall have the power and authority at any time and
from time to time to transfer such portion or all of the Trust
invested by it to another Trustee upon the direction of the
Administrative Committee acting upon and in accordance with
recommendations of, or pursuant to authority granted it by, the
Board of Directors of the Company.
SECTION 5. In accordance with and subject to the provisions
of Section 1 and Section 4 hereof, the Trustee shall have the
following powers and authority in the investment and administration
of the assets of the Trust:
(a) to sell, exchange, convey, transfer or dispose of
and also to grant options (including covered call options) with
respect to, any property, whether real or personal, at any time
held by it, and any sale may be made by private contract or by
public auction, and for cash or upon credit, or partly for cash and
partly upon credit, as the Trustee may deem best, and no person
dealing with the Trustee shall be bound to see to the application
of the purchase money or to inquire into the validity, expediency
or propriety of any such sales or other transaction;
(b) to purchase, sell, hold and generally deal in and
with contracts for the immediate or future delivery of financial
instruments, including without limitation U.S. government agency
obligations, Government National Mortgage Association certificates,
Federal National Mortgage Association certificates, United States
Treasury bills, United States Treasury bonds, United States
Treasury notes and commercial paper, and in connection therewith to
deposit any property as collateral with any agent, all on such
terms and conditions as the Trustee shall determine;
<PAGE>
(c) to retain, manage, operate, repair, improve,
develop, preserve, mortgage or lease for any period any real
property or any oil, mineral or gas properties, interests or rights
held by the Trustee or by any corporation organized by the Trustee
pursuant to this Agreement, upon such terms and conditions as the
Trustee deems proper, either alone or by joining with others, using
other trust assets for any of such purposes, if by the Trustee
deemed advisable; to modify, extend, renew or otherwise adjust any
or all of the provisions of any such mortgage or lease, including
the waiver of rentals, if by the Trustee deemed advisable; and to
make provision for the amortization of the investment in or
depreciation of the value of such property as the Trustee may deem
advisable.
(d) to compromise, compound and settle any debt or
obligations due from third persons to the Trustee or to third
persons from the Trustee, as the Trustee hereunder, and to reduce
the rate of interest on, to extend or otherwise modify, or to
foreclose upon default or otherwise enforce, any such obligation;
(e) to vote in person or by proxy on any stocks, bonds
or other securities held by the Trustee, and to appoint one or more
individuals or corporations as voting trustees under voting trust
arrangements and to delegate to such voting trustees discretion to
vote;
(f) to exercise any rights appurtenant to any stocks,
bonds or other securities held by the Trustee for the conversion
thereof into other stocks, bonds or securities, or to exercise any
rights or options held by them to subscribe for or purchase
additional stocks, bonds or other securities, and to make any and
all necessary payments with respect to any such conversion or
exercise;
(g) to join in, dissent from, or oppose, the
reorganization, recapitalization, consolidation, sale or merger of
corporations or properties of which the Trustee may hold stocks,
bonds or other securities or in which the Trustee may be
interested, upon such terms and conditions as the Trustee may deem
wise, to pay any expenses, assessments or subscriptions in
connection therewith and to accept any securities or property which
may be issued upon any such reorganization, recapitalization,
consolidation, sale or merger;
(h) to make, execute, acknowledge and deliver any and
all deeds, leases, mortgages, assignments, documents of transfer
and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(i) to enforce any right, obligation or claim in its
absolute discretion and in general to protect in any way the
interest of the Trust, either before or after default with respect
<PAGE>
to any such right, obligation or claim, and, in case the Trustee
shall consider such action for the best interests of the trust, in
its absolute discretion to abstain from the enforcement of any
right, obligation or claim and to abandon any property, whether
real or personal, which at any time may be held by the Trustee;
(j) to cause or authorize any investment in the Trust
to be registered in, or transferred into its name as Trustee, or
the name of its nominee, or in the name of any other nominee, or to
retain any such investment unregistered or in form permitting
transferability by delivery; and to deposit any investment of the
Trust in any depository, clearing corporation, or any central
system for handling of investments, or any nominee thereof;
provided that the books and records of the Trustee shall at all
times show that all such investments are part of the Trust;
(k) from time to time, to employ suitable agents and
counsel and to pay them reasonable expenses and compensation;
(l) in the acquisition, disposition and management of
investments for or under the Trust to acquire and hold any
securities or other property even though the Trustee, in its
individual or any other capacity, shall have invested or may
thereafter invest its own or other funds in the same securities or
related property or related securities or other property the
interest, principal or other avails of which may be payable at
different rates or different times or may have a different rank or
priority; and to acquire and hold any securities or other property
even though in connection therewith the Trustee, in its individual
or any other capacity, may receive compensation reasonably and
customarily due in the course of its regular activities;
(m) for the purpose of investing in and holding title
to real or personal property or part interests therein, wherever
situate, to appoint one or more individuals or corporations as a
co-trustee or sub-trustee or to join with one or more individuals
or corporations (including itself) acting as trustees of other
pension trusts, profit sharing trusts or employee benefit trusts in
the establishment of one or more sub-trusts; such co-trustees or
sub-trustees upon being appointed shall act with such one or more
than one or all of the powers, authorities, discretion, duties and
functions of the Trustee under this Section 5 as shall be
designated in the instrument establishing such sub-trust including
without limitation by the reference thereto power to receive and
hold property, real or personal, or part interest therein, oil,
mineral or gas properties, royalty interests or rights, including
equipment pertaining thereto, leaseholds, mortgages and other
interests in realty, situated in any State in which the co-trustee
or sub-trustee is authorized to act as trustee of pension trusts,
profit sharing trusts or other employee benefit trusts; and to pay
the reasonable expenses and compensation of such co-trustee or sub-
trustee;
(n) to grant options for the sale of any property
held by it;
<PAGE>
(o) to do all acts which the Trustee may deem
necessary or proper and to exercise any and all powers of the
Trustee under this Agreement under such terms and conditions as it
may deem to be for the best interests of the Trust;
(p) to invest all or any of the funds received by it
in one or more common trust or collective investment funds
maintained by the Trustee or any affiliate of the Trustee within
the meaning of Section 1504 of the Internal Revenue Code of 1986,
as amended (the "Code"), provided any collective investment fund is
limited to investment by tax qualified retirement plans. The
trustee of any such fund must acknowledge in its governing
instrument that it is a fiduciary to any plan whose assets are
invested therein; and
(q) to invest all or any portion of the Trust Fund in
interests in open-end investment management companies, including
those for which the Trustee or any affiliate of the Trustee
receives compensation for providing investment advisory, custodial,
transfer agency or other services, the Company acknowledging and
understanding that the services provided and the fees charged
therefore are set forth in the prospectuses for such registered
investment companies, and that such prospectuses have been
received, reviewed and approved by the Company prior to investment
in such shares, and hereby acknowledging that such shares are not
bank deposits and are not insured by, guaranteed by, obligation of,
or otherwise supported by the United States of America, the Federal
Deposit Insurance Corporation, PNC Bank, or any bank.
SECTION 6. The expenses incurred in administering the Plans
shall be paid out of the assets of the Trust as the Investment and
Administrative Committees shall determine appropriate. The
expenses incurred by the Trustee in the performance of its duties,
including fees for legal services rendered to the Trustee, such
compensation to the Trustee as may be agreed upon in writing from
time to time between the Trustee and an officer of the Company, and
all other proper charges and disbursements of the Trustee shall be
paid out of the assets of the Trust, but if not so paid, then by
the Company. Brokerage fees, transfer taxes and other expenses
incident to the purchase or sale of securities by the Trustee shall
be deemed to be a part of the cost of such securities, or deducted
in computing the proceeds therefrom as the case may be.
SECTION 7. The Trustee shall discharge its duties and powers
with respect to the Plan and the Trust solely in the interest of
the participants in the Plans and their beneficiaries and with the
care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of like character and with like aims. Notwithstanding
the foregoing, the Trustee shall be fully protected in acting in
accordance with written certifications, orders, requests and
instructions of the Administrative Committee or Investment
Committee signed by the Secretary of such Committee or of the
Company's Board of Directors when signed by the Secretary of the
Company.
<PAGE>
SECTION 8. The Trustee shall keep accurate and detailed
accounts of all investments, receipts, disbursements and other
transactions hereunder; and all accounts, books and records
relating thereto shall be open to inspection and audit at all
reasonable times by any person designated by either the Investment
or Administrative Committees. Within ninety days following the
close of each Plan Year, as defined in the Plans, and within ninety
days after the removal or resignation of the Trustee as provided in
Section 10 hereof, the Trustee shall file with the Investment and
Administrative Committees a written account setting forth all
investments, receipts, disbursements and other transactions
effected during such Plan Year or during the period from the close
of the last Plan Year to the date of such removal or resignation.
The Trustee shall also furnish such other reports and information
concerning the trust to either the Administrative or Investment
Committees as either such Committee may from time to time in
writing request.
SECTION 9. All certifications, orders, requests, instructions
and objections of the Administrative Committee or the Investment
Committee to the Trustee shall be in writing signed by the
Secretary of such Committee, or by such other person or persons as
may be designated from time to time by such Committee and the
Trustee shall act and shall be fully protected in acting in
accordance with such certifications, orders, requests, and
instructions. The Secretary or an Assistant Secretary of the
Company shall furnish the Trustee from time to time with certified
copies of extracts from the minutes of its Board of Directors
evidencing the appointment and termination of office of any members
of the Administrative or Investment Committees and the appointment
of successors thereto, and with certified copies of resolutions of
such Committees evidencing the appointment and termination of
office of a Secretary and the appointment of successors thereto.
Any action by the Company may be evidenced by a resolution of
its Board of Directors certified to the Trustee over the signature
of its Secretary or Assistant Secretary and the Trustee shall be
fully protected in acting in accordance with such resolution so
certified to it.
SECTION 10. The Trustee may be removed by the Company at any
time upon thirty days' notice in writing to the Trustee. The
Trustee may resign at any time upon sixty days' notice in writing
to the Company. Upon such removal or resignation of the Trustee
the Company shall appoint and designate a successor trustee who
shall have the same powers and duties under the Agreement as those
conferred upon the Trustee hereunder and, upon acceptance of such
<PAGE>
appointment by the successor trustee, the Trustee shall assign,
transfer and pay over to such successor trustee the funds and
properties then constituting the Trust or the portion thereof held
by it pursuant to this Agreement.
SECTION 11. The Company shall have authority to direct that
there shall be more than one trustee under this Agreement and to
designate such additional trustee or trustees. In the event that
there shall be two or more trustees acting hereunder, the Company
may but shall not be required to direct that a portion of the Trust
shall be held by each of said trustees. If such a direction is
given, each trustee shall individually invest and keep invested the
portion of the Trust held by or from time to time paid over to it,
all upon the conditions set forth in this Agreement, and each
trustee shall be subject to the same duties and responsibilities
and shall have the same powers and rights with respect to the
investment of the portion of the Trust held by it as a single
trustee would have with respect to the entire Trust, and each
trustee shall have no duties or responsibilities and shall have no
powers or rights with respect to the investment of the portion of
the trust held not by it but by another such trustee. When the
context so requires, the term "Trustee" shall include any such
additional trustee or trustees.
SECTION 12. Except insofar as applicable law may otherwise
require, no right or interest of any participating employee shall
be assignable or transferable as a whole or in part either directly
or by operation of law or otherwise including, but not by way of
limitation, execution, levy garnishment, attachment, pledge,
bankruptcy or in any other manner, but excluding, however,
devolution by death or mental incompetency. Except insofar as
applicable law may otherwise require, no right or interest of any
participating employee shall be liable for or subject to any
obligation or liability of such participating employee.
SECTION 13. The Company reserves the right at any time and
from time to time to modify or amend, in whole or in part, any or
all of the provisions of this Agreement by notice thereof in
writing delivered to the Trustee provided that no modification or
amendment which affects the rights, duties or responsibilities of
the Trustee shall be made without its consent and provided further
that no modification or amendment shall authorize or permit any
part of the corpus or income of the Trust to be used for, or
diverted to, purposes other than (i) for the exclusive benefit of
the participating employees or their beneficiaries and (ii) for the
payment of Plan administrative expenses. In the event of
termination of the Trust created by this Agreement, all cash,
securities and other property then constituting the Trust, less any
amounts constituting charges and expenses payable from the Trust
pursuant to the provisions of the Plans, shall be paid over or
delivered by the Trustee to or on order of the Administrative
Committee, subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended. If the Plans are amended,
the Company shall promptly furnish to the Trustee a copy of the
amendment, duly certified by its Secretary or an Assistant
Secretary, and references herein to the Plans shall thereafter mean
the Plans as so amended.
<PAGE>
SECTION 14. Any subsidiary of the Company which has been
authorized by the Board of Directors of the Company to participate
in the Plans with respect to its employees may hereafter become a
party to this Agreement by delivering to the Trustee a certified
Board of Directors resolution evidencing its acceptance and
adoption of the provisions of this Agreement and the Plans on
behalf of such subsidiary. No consent of any subsidiary of the
Company shall be necessary to the inclusion of any other
subsidiary.
In the event that any division, department or subsidiary of
the Company elects to withdraw from the Plans or to terminate the
Plans as therein provided with respect to its employees and so
notified the Trustee, the Trustee shall upon receipt of (a)
certification by the Administrative Committee setting forth the
share of the assets of the trust allocable to the covered
employees, retired employees and their beneficiaries of such
division, department or subsidiary and (b) certified copies of the
resolutions of the board of Directors of the Company approving the
withdrawal or termination of such division, department or
subsidiary and approving the instructions of the Administrative
Committee with regard to the segregation of the assets of the
Trust, segregate such assets and, on receipt of written directions
of the Administrative Committee make disposition thereof in
accordance with Section 13 hereof or hold such segregated assets in
a separate trust governed by the same provisions as this Agreement,
except that the Board of Directors of a withdrawing subsidiary
company shall thereafter have all the powers and duties theretofore
held by the Board of Directors of the Company.
SECTION 15. Any corporation into which a Trustee hereunder
may merge or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which such Trustee
may be a party, or any corporation to which all or substantially
all the trust business of such Trustee may be transferred, shall be
the successor of such trust hereunder, without the execution or
filing of any instrument, or the performance of any further act.
SECTION 16. The Trustee accepts the trust created hereunder
and agrees to be bound by the terms of this Agreement.
SECTION 17. This Agreement and the Trust created hereby shall
be construed, regulated and administered under the laws of the
State of Ohio, except as such laws are superseded by the Employee
Retirement Income Security Act of 1974, as amended, and the Trustee
shall be liable to account only in the State of Ohio. The Trustee
may at any time initiate an action or proceeding for the settlement
of its accounts or for the determination of any question of
construction which may arise or for instructions, and the only
necessary defendant to such action or proceeding shall be the
Company and the Administrative Committee, except that such Trustee
may, if it so elects, bring in as parties defendant any other
person or persons.
<PAGE>
SECTION 18. The Trust created by this Agreement shall
constitute both (i) an individual trust for the Thrift/Profit
Sharing Plan and the Paul Koss Plan, respectively, as separate
plans and (ii) a group trust described in Revenue Ruling 81-100 so
as to accommodate the commingled investment of the assets of the
Plans as separate plans of the Trust Fund. This Agreement and each
separate trust through which a Plan is funded shall individually
qualify as a tax-exempt trust under Section 501(a) of the Code
which participates in such group trust. In compliance with Revenue
Ruling 81-100, the group trust herein shall meet the following
requirements: (a) the group trust is hereby adopted as a part of
each Plan; (b) the participation in the group trust is expressly
limited to the Plans which are pension trusts exempt under Section
501(a) of the Code by qualifying under Section 401(a) of the Code;
(c) no part of the corpus or income which equitably belongs to any
Plan's trust shall be used for or diverted to any purposes other
than for the exclusive benefit for the individuals or employees,
respectively, or their beneficiaries who are entitled to benefits
under such Plan's trust; (d) no assignment shall be made by a
participating Plan's trust of any part of its equity or interest in
the group trust; and (e) the group trust is expressly created and
organized in the United States and shall at all times be maintained
as domestic trust in the United States.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized and their corporate seals to be hereunto affixed
and attested as of the day and year first above written.
NATIONAL SANITARY SUPPLY COMPANY
[Corporate Seal]
Attest:
/s/ Naomi C. Dallob /s/ Gary H. Sander
______________________________ By:___________________________
Naomi Dallob Gary H. Sander
PNC BANK, OHIO, N.A.
[Corporate Seal]
Attest:
/s/ Rebecca Bomkamp /s/ Rebecca A. Thornton
______________________________ By:____________________________
Rebecca Bomkamp Rebecca A. Thornton
<PAGE>
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )
On this 28th day of September, 1994 before me personally came
Gary H. Sander, to me known, who, being by me duly sworn, said that
he resides at [notary address]; that he is Vice President, Chief
Financial Officer and Treasurer of National Sanitary Supply
Company, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of the said
corporation; that the seal affixed to the said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of the said corporation, and that he signed his name
thereto by like authority.
/s/ Joyce A. Lawrence
______________________________
Joyce A. Lawrence
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )
On this 28th day of September, 1994 before me personally came
Rebecca A. Thornton, to me known, who, being by me duly sworn, said
that she resides at [notary address]; that she is Vice President of
PNC Bank, Ohio, N.A, one of the corporations described in and which
executed the foregoing instrument; that she knows the seal of the
said corporation; that the seal affixed to the said instrument is
such corporate seal; that it was so affixed by authority of the
Board of Directors of the said corporation, and that she signed her
name thereto by like authority.
/s/ Mary S. Dowers
______________________________
Mary S. Dowers
Exhibit 5.1
September 28, 1994
National Sanitary Supply Company
2900 Chemed Center
Cincinnati, OH 45202
Dear Sir or Madam:
In connection with the Registration Statement on Form S-8 to
be filed by National Sanitary Supply Company (the "Company") with the
Securities and Exchange Commission covering shares of the Company's
common stock, par value $1 per share (the "Common Stock"), to be issued
pursuant to the Employees Thrift and Profit Sharing Plan (the "Plan"),
and interests thereunder, you have requested me as General Counsel to
the Company to render my opinion with respect to the matters to which
reference is made herein.
I have examined and am familiar with the Certificate of
Incorporation and By-laws of the Company, the minutes of the meetings
of its directors and stockholders, the Plan, its interests, and the
stock to be covered pursuant thereto.
Based upon the foregoing, I am of the opinion that the shares
of Common Stock issued pursuant to and in accordance with the terms of
the Plan will, when issued in accordance with the terms of said Plan, be
validly issued and outstanding, fully paid and non-assessable shares of
Common Stock of the Company.
I hereby consent to the filing of this opinion as an exhibit
to said Registration Statement.
Sincerely,
Naomi C. Dallob
Secretary and General Counsel
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 1, 1994, which appears
on page 9 of the 1993 Annual Report to Stockholders of National Sanitary
Supply Company, which is incorporated by reference in National Sanitary
Supply Company's Annual Report on Form 10-K for the year ended
December 31, 1993. We also consent to the incorporation by reference of
our report on the Financial Statement Schedules, which appears on page S-2
of such Annual Report on Form 10-K. We also consent to the references to
us under the headings "Experts" in the prospectus relating to the
Registration Statement. We also consent to the incorporation by reference
in the Registration Statement of our report dated September 28, 1994
appearing on page 3 of the Annual Report of the National Sanitary Supply
Company Savings and Investment Plan on Form 11-K for the year ended
December 31, 1993.
PRICE WATERHOUSE LLP
Cincinnati, Ohio
September 28, 1994
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Arthur J. Bennert, Jr.
-----------------------------
Arthur J. Bennert, Jr.
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ James A. Cunningham
-----------------------------
James A. Cunningham
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Charles H. Erhart, Jr.
-----------------------------
Charles H. Erhart, Jr.
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ N. Gilliatt
-----------------------------
N. Gilliatt
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ J. Peter Grace
-----------------------------
J. Peter Grace
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Will J. Hoekman
-----------------------------
Will J. Hoekman
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Anthony C. Hutton
-----------------------------
Anthony C. Hutton
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Thomas C. Hutton
-----------------------------
Thomas C. Hutton
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Charles O. Lane
-----------------------------
Charles O. Lane
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Sandra E. Laney
-----------------------------
Sandra E. Laney
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Kevin J. McNamara
-----------------------------
Kevin J. McNamara
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Timothy S. O'Toole
-----------------------------
Timothy S. O'Toole
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ D. Walter Robbins, Jr.
-----------------------------
D. Walter Robbins, Jr.
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Jerome E. Schnee
-----------------------------
Jerome E. Schnee
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a
Director of National Sanitary Supply Company, hereby constitutes
and appoints Edward L. Hutton, Paul C. Voet and Naomi C. Dallob
as the true and lawful attorneys-in-fact of the undersigned, with
full power in each to act without the others, for and in the name
of the undersigned as such Director to sign any and all
Registration Statements, and amendments thereto, including Post-
Effective Amendments, filed with the Securities and Exchange
Commission relating to registration under the Securities Act of
1933 of interests in, or shares of Common Stock of National
Sanitary Supply Company to be offered and sold pursuant to its
Employees Thrift and Profit Sharing Plan.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand this 27th day of September, 1994.
/s/ Kenneth F. Vuylsteke
-----------------------------
Kenneth F. Vuylsteke
<PAGE>
