AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 3, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADVO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-0885252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
ONE UNIVAC LANE
P.O. BOX 755
WINDSOR, CONNECTICUT 06095-0755
(Address, including zip code, and telephone number,
including area code, of registrant*s principal executive offices)
ADVO, INC. 401(K) SAVINGS PLAN
(Full Title of the Plan)
DAVID M. STIGLER
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ADVO, INC.
ONE UNIVAC LANE
P.O. BOX 755
WINDSOR, CONNECTICUT 06095-0755
(860) 285-6120
(Telephone number, including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement
when warranted by market conditions and other factors.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to be |Amount to be |Proposed Maximum Offering |Proposed Maximum Aggregate Amount of
Registered(1) |Registered(2) | Price Per Unit(2) | Offering Price(2) Registration Fee
<S> <C> <C> <C> <C>
Common Stock, without par |200,000 shares | $10.00 | $2,000,000 | $689.65
|value | | | |
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated pursuant to subsections (c) and (h) of Rule 457 under the
Securities Act of 1933 as the estimated number of shares of Common
Stock without par value of ADVO, Inc. to be purchased by the ADVO, Inc.
401(k) Savings Plan (the "Plan") over a five-year period with employee
and employer contributions, which shares may be acquired by
participants in the Plan. For purposes of Rule 457(c), the date
specified for determining the average of the high and low prices
reported in the consolidated reporting system is August 26, 1996.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement relates to participation interests in the
ADVO, Inc. 401(k) Savings Plan (the "Plan") and to shares of common stock, $.01
par value ("Common Stock") of ADVO, Inc. (the "Company") offered pursuant to
the Plan.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
are incorporated herein by reference:
(a) The Company*s Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act");
(b) The Company*s Quarterly Reports on Form 10-Q for the fiscal
quarters ended December 30, 1995, March 30, 1996, and June 29, 1996;
(c) Current Reports on Form 8-K dated January 26, 1996, March 5, 1996
and May 2, 1996; and
(d) The description of the Company*s Common Stock which is contained in
its registration statements filed under the 1934 Act, and any amendment or
report filed under the 1934 Act for the purpose of updating such
description.
All documents subsequently filed by the Company and the Plan pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
This Item is not applicable to the securities to be registered hereby.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The consolidated financial statements of ADVO, Inc. incorporated by
reference in ADVO, Inc.'s Annual Report (Form 10-K) for the year ended
September 30, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The information required by this item is contained in Part II, Item 15 of
the Company*s Statement on Form S-8 (No. 33-19045) and is incorporated herein
by reference and made a part hereof.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
This Item is not applicable to the securities to be registered hereby.
<PAGE>
ITEM 8. EXHIBITS
Incorporation
by Reference
Exhibit No. Description (see Legend)
4(a) ADVO, Inc. 401(k) Savings Plan Filed herewith
4(b) Restated Certificate of Incorporation Incorporated by
of ADVO reference to Exhibit
3(a) to the Company's
Form 10 filed on
September 15, 1986
(No. 1-11720)
4(c) Restated By-laws of ADVO Incorporated by
reference to Exhibit
3(b) to the Company's
Report on Form 10-K
for fiscal year ended
September 30, 1989
(No. 1-11720)
4(d) Stockholder Protection Rights Incorporated by
Agreement, dated as of February 5, 1993, reference to Exhibit
between the Company and Mellon 4.1 of the Company*s
Securities Trust Company, as Rights Form 8-K dated
Agent, including Exhibit A and Exhibit B February 5, 1993
23 Consent of Independent Auditors Filed herewith
24 Powers of Attorney (See Signature Page) Filed herewith
Neither an opinion of counsel concerning compliance with ERISA nor an Internal
Revenue Service ("IRS") determination letter is required because the Company
has submitted the Plan to the IRS in a timely manner and has made all changes
required by the IRS to qualify the Plan.
ITEM 9. UNDERTAKINGS
A. Undertaking to Update Annually.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement;
<PAGE>
provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference 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. Undertaking With Respect to Incorporating Subsequent Exchange Act
Documents By Reference.
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 each filing of the Plan*s annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Undertaking With Respect to Indemnification of Directors, Officers or
Controlling Persons.
Insofar as indemnification for liability 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, as amended,
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 Town of Windsor, State of Connecticut, on
September 3,1996.
ADVO, INC.
By: /s/ Robert Kamerschen
Name: Robert Kamerschen
Title: Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated. Each person whose signature appears below hereby
constitutes David M. Stigler and William E. Crowley, and each of them singly,
such person's true and lawful attorneys, with full power to them and each of
them, to sign for such person and in such persons' name and capacity as
indicated below, any and all amendments to this Registration Statement, hereby
ratifying and confirming such person's signature as it may be signed by said
attorneys to any and all amendments.
<TABLE>
<CAPTION>
|Name |Title |Date |
<S> <C> <C>
|/s/ Robert Kamerschen |Chairman, Chief Executive |September 3, 1996 |
|Robert Kamerschen |Officer And Director | |
| |(Principal Executive Officer) | |
|/s/ Lowell W. Robinson |Executive Vice President and Chief |September 3, 1996 |
|Lowell W. Robinson |Financial Officer | |
| |(Principal Financial Officer) | |
|/s/ Robert S. Hirst |Vice President and Controller |September 3, 1996 |
|Robert S. Hirst |(Principal Accounting Officer) | |
|/s/ Jack W. Fritz |Director |September 3, 1996 |
|Jack W. Fritz | | |
|/s/ Lawrence Lachman |Director |September 3, 1996 |
|Lawrence Lachman | | |
|/s/ Howard H. Newman |Director |September 3, 1996 |
|Howard H. Newman | | |
|/s/ John R. Rockwell |Director |September 3, 1996 |
|John R. Rockwell | | |
|/s/ John L. Vogelstein |Director |September 3, 1996 |
|John L. Vogelstein | | |
|__________________________ |Director | |
|James A. Eskridge | | |
</TABLE>
(A majority of the Board of Directors)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the trustees
have duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Windsor, State of
Connecticut on September 3, 1996.
ADVO, INC. 401(K) SAVINGS PLAN
By: /s/ William E. Crowley
Name: William E. Crowley
Title: Vice President - Human Resources
<PAGE>
EXHIBIT INDEX
Incorporation
by Reference
Exhibit No. Description (see Legend)
4(a) ADVO, Inc. 401(k) Savings Plan Filed herewith
4(b) Restated Certificate of Incorporation Incorporated by
of ADVO reference to Exhibit
3(a) to the Company's
Form 10 filed on
September 15, 1986
(No. 1-11720)
4(c) Restated By-laws of ADVO Incorporated by
reference to Exhibit
3(b) to the Company's
Report on Form 10-K
for fiscal year ended
September 30, 1989
(No. 1-11720)
4(d) Stockholder Protection Rights Incorporated by
Agreement, dated as of February 5, 1993, reference to Exhibit
between the Company and Mellon 4.1 of the Company*s
Securities Trust Company, as Rights Form 8-K dated
Agent, including Exhibit A and Exhibit B February 5, 1993
23 Consent of Independent Auditors Filed herewith
24 Powers of Attorney (See Signature Page) Filed herewith
ADVO 401(k) Savings Plan and Trust
As Amended and Restated Effective October 1, 1992
ADVO, Inc. previously established the ADVO-System Inc. Advantage 1 Savings Plan
as renamed effective October 1, 1992, ADVO 401(k) Savings Plan for the benefit
of eligible employees of the Company and its participating affiliates. The
Plan is intended to constitute a qualified profit sharing plan, as described in
Code section 401(a), which includes a qualified cash or deferred arrangement,
as described in Code section 401(k).
The provisions of this Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between ADVO, Inc. and Wells Fargo
Bank, National Association. The Trust is intended to be tax exempt as
described under Code section 501(a).
The Plan constitutes an amendment and restatement of the ADVO-System, Inc.
Advantage 1 Savings Plan, as renamed the ADVO 401(k) Savings Plan effective
October 1, 1992, which was originally established effective as of January 1,
1988, and its related trust agreement.
The ADVO 401(k) Savings Plan and Trust, as set forth in this document, is
hereby amended and restated effective as of October 1, 1992.
Date: , 19 ADVO, Inc.
By:
Title:
The trust agreement set forth in those provisions of this Plan and Trust which
relate to the Trustee is hereby executed.
Date: , 19 Wells Fargo Bank, National Association
By:
Title:
Date: , 19 Wells Fargo Bank, National Association
By:
Title:
02/14/94
<PAGE>
TABLE OF CONTENTS
1 DEFINITIONS .......................1
2 ELIGIBILITY .......................7
2.1 Eligibility .......................7
2.2 Ineligible Associates .......................7
2.3 Ineligible or Former Participants .......................7
3 PARTICIPANT CONTRIBUTIONS .......................8
3.1 Associate Pre-Tax Contribution Election .......................8
3.2 Changes .......................8
3.3 Stopping Contributions .......................8
3.4 Contribution Percentage Limits .......................8
3.5 Refunds When Contribution Dollar Limit Exceeded..................8
3.6 Timing, Posting and Tax Considerations .......................9
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS .......................10
4.1 Rollovers .......................10
4.2 Transfers From Other Qualified Plans .......................10
5 EMPLOYER CONTRIBUTIONS .......................11
5.1 ADVO Matching Contributions .......................11
6 ACCOUNTING .......................12
6.1 Individual Participant Accounting .......................12
6.2 Sweep Account is Transaction Account .......................12
6.3 Trade Date Accounting and Investment Cycle......................12
6.4 Accounting for Investment Funds .......................12
6.5 Payment of Fees and Expenses .......................12
6.6 How Fees and Expenses are Charged to Participants...............13
6.7 Accounting for Participant Loans .......................13
6.8 Error Correction .......................13
6.9 Participant Statements .......................13
6.10 Special Accounting During Conversion Period....................13
6.11 Accounts for QDRO Beneficiaries .......................14
7 INVESTMENT FUNDS AND ELECTIONS .......................15
7.1 Investment Funds .......................15
7.2 Investment Fund Elections .......................15
7.3 Responsibility for Investment Choice .......................15
7.4 Default if No Election .......................15
7.5 Timing .......................15
7.6 Switching Fees .......................15
02/14/94
<PAGE>
8 VESTING & FORFEITURES .......................16
8.1 Fully Vested Contribution Accounts .......................16
9 PARTICIPANT LOANS .......................17
9.1 Participant Loans Permitted .......................17
9.2 Loan Funding Limits .......................17
9.3 Maximum Number of Loans .......................17
9.4 Source of Loan Funding .......................17
9.5 Interest Rate .......................18
9.6 Repayment .......................18
9.7 Repayment Hierarchy .......................18
9.8 Loan Application, Note and Security .......................18
9.9 Default, Suspension and Call Feature .......................18
9.10 Spousal Consent .......................19
10 IN-SERVICE WITHDRAWALS .......................20
10.1 Withdrawals for Hardship .......................20
10.2 Rollover Account Withdrawals .......................21
10.3 Withdrawals for Participants over Age 70*......................21
10.4 Withdrawal Processing .......................22
10.5 Spousal Consent .......................23
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW.........24
11.1 Benefit Information, Notices and Election......................24
11.2 Payment Form and Medium .......................24
11.3 Small Amounts Paid Immediately .......................25
11.4 Distributions After December 31, 1992 .......................25
11.5 Latest Commencement Permitted .......................26
11.6 Payment Within Life Expectancy .......................26
11.7 Incidental Benefit Rule .......................26
11.8 Payment to Beneficiary .......................26
11.9 Beneficiary Designation .......................27
11.10 Spousal Consent .......................27
12 ADP AND ACP TESTS .......................28
12.1 Contribution Limitation Definitions .......................28
12.2 ADP and ACP Tests .......................30
12.3 Correction of ADP and ACP Tests .......................31
12.4 Multiple Use Test .......................32
12.5 Adjustment for Investment Gain or Loss .......................32
12.6 Testing Responsibilities and Required Records..................32
12.7 Separate Testing for Multiple Employers .......................32
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS.....................33
13.1 "Annual Addition" Defined .......................33
13.2 Maximum Annual Addition .......................33
13.3 Avoiding an Excess Annual Addition .......................33
13.4 Correcting an Excess Annual Addition .......................33
13.5 Correcting a Multiple Plan Excess .......................34
13.6 "Defined Benefit Fraction" Defined .......................34
13.7 "Defined Contribution Fraction" Defined .......................34
13.8 Combined Plan Limits and Correction .......................34
14 TOP HEAVY RULES .......................35
14.1 Top Heavy Definitions .......................35
14.2 Special Contributions .......................36
14.3 Adjustment to Combined Limits for Different Plans..............37
15 PLAN ADMINISTRATION .......................38
15.1 Plan Delineates Authority and Responsibility...................38
15.2 Fiduciary Standards .......................38
15.3 Company is ERISA Plan Administrator .......................38
15.4 Administrator Duties .......................38
15.5 Advisors May be Retained .......................39
15.6 Delegation of Administrator Duties .......................39
15.7 Committee Operating Rules .......................40
16 MANAGEMENT OF INVESTMENTS .......................41
16.1 Trust Agreement .......................41
16.2 Investment Funds .......................41
16.3 Authority to Hold Cash .......................42
16.4 Trustee to Act Upon Instructions .......................42
16.5 Administrator Has Right to Vote Registered Investment Company
Shares .......................42
16.6 Custom Fund Investment Management .......................42
16.7 Authority to Segregate Assets .......................43
16.8 Maximum Permitted Investment in Company Stock..................43
16.9 Participants Have Right to Vote and Tender Company Stock.......43
16.10 Registration and Disclosure for Company Stock.................44
17 TRUST ADMINISTRATION .......................45
17.1 Trustee to Construe Trust .......................45
17.2 Trustee To Act As Owner of Trust Assets .......................45
17.3 United States Indicia of Ownership .......................45
17.4 Tax Withholding and Payment .......................46
17.5 Trustee Duties and Limitations .......................46
17.6 Trust Accounting .......................46
17.7 Valuation of Certain Assets .......................47
17.8 Legal Counsel .......................47
17.9 Fees and Expenses .......................47
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION................48
18.1 Plan Does Not Affect Employment Rights .......................48
18.2 Limited Return of Contributions .......................48
18.3 Assignment and Alienation .......................48
18.4 Facility of Payment .......................49
18.5 Reallocation of Lost Participant's Accounts....................49
18.6 Claims Procedure .......................49
18.7 Construction .......................50
18.8 Jurisdiction and Severability .......................50
18.9 Indemnification by Employer .......................50
19 AMENDMENT, MERGER AND TERMINATION .......................51
19.1 Amendment .......................51
19.2 Merger .......................51
19.3 Plan Termination .......................51
19.4 Termination of Employer's Participation .......................52
19.5 Replacement of the Trustee .......................52
19.6 Final Settlement and Accounting of Trustee.....................52
APPENDIX A - INVESTMENT FUNDS .......................54
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES .......................55
APPENDIX C - LOAN INTEREST RATE .......................56
02/14/94
<PAGE>
1 DEFINITIONS
When capitalized, the words and phrases below have the following meanings
unless different meanings are clearly required by the context:
1.11833 "Account". The records maintained for purposes of accounting for a
Participant's interest in the Plan. "Account" may refer to one or
all of the following accounts which have been created on behalf of a
Participant to hold specific types of Contributions under the Plan:
(a) "Associate Pre-Tax Account". An account created to hold
Associate Pre-Tax Contributions.
(b) "Rollover Account". An account created to hold Rollover
Contributions.
(c) "ADVO Matching Account". An account created to hold ADVO
Matching Contributions.
2.c "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
3.c "Administrator". The Company, which may delegate all or a portion of
the duties of the Administrator under the Plan to a Committee in
accordance with Section 15.6.
4.c "ADP" or "Average Deferral Percentage". The percentage calculated in
accordance with Section 12.1.
5.c "Associate". An individual who is:
(a) directly employed by any Related Company and for whom any
income for such employment is subject to withholding of
income or social security taxes, or
(b) a Leased associate.
6.c "Beneficiary". The person or persons who is to receive benefits
after the death of the Participant pursuant to the "Beneficiary
Designation" paragraph in Section 11, or as a result of a QDRO.
7.c "Code". The Internal Revenue Code of 1986, as amended. Reference to
any specific Code section shall include such section, any valid
regulation promulgated thereunder, and any comparable provision of
any future legislation amending, supplementing or superseding such
section.
8.c "Committee". If applicable, the committee which has been appointed
by the Company to administer the Plan in accordance with Section
15.6.
9.c "Company". ADVO, Inc. or any successor by merger, purchase or
otherwise.
02/14/94
<PAGE>
10.c "Company Stock". Shares of common stock of the Company, its
predecessor(s), or its successors or assigns, or any corporation with
or into which said corporation may be merged, consolidated or
reorganized, or to which a majority of its assets may be sold.
11.c "Compensation". The sum of a Participant's Taxable Income and salary
reductions, if any, pursuant to Code sections 125, 402(e)(3), 402(h),
403(b), 414(h)(2) or 457.
For purposes of determining benefits under this Plan, Compensation is
limited to $200,000 (as indexed for the cost of living pursuant to
Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of
determining benefits under this Plan for Plan Years beginning after
December 31, 1993, Compensation is limited to $150,000 (as
indexed for the cost of living pursuant to Code sections 401(a)(17)
and 415(d)) per Plan Year.
For purposes of the preceding sentences, in the case of an HCE who is
a 5% Owner or one of the 10 most highly compensated Associates, (i)
such HCE and such HCE's family group (as defined below) shall be
treated as a single employee and the Compensation of each family
group member shall be aggregated with the Compensation of such HCE,
and (ii) the limitation on Compensation shall be allocated
among such HCE and his or her family group members in proportion to
each individual's Compensation before the application of this
sentence. For purposes of this Section, the term "family group"
shall mean an Associate's spouse and lineal descendants who have not
attained age 19 before the close of the year in question.
For the purpose of determining HCEs and key employees, Compensation
for the entire Plan Year shall be used. For the purpose of
determining ADP and ACP, Compensation shall be limited to amounts
paid to an Associate while a Participant.
12.c "Contribution". An amount contributed to the Plan by the Employer or
an Eligible Associate, and allocated by contribution type to
Participants' Accounts, as described in Section 1.1. Specific types
of contribution include:
(a) "Associate Pre-Tax Contribution". An amount contributed on a
pre-tax basis in conjunction with a Participant's Code
section 401(k) salary deferral election.
(b) "Rollover Contribution". An amount contributed by an
Eligible Associate which originated from another employer's
qualified plan.
(c) "ADVO Matching Contribution". An amount contributed by the
Employer based upon the amount contributed by the eligible
Participant.
13.c "Contribution Dollar Limit". The annual limit placed on each
Participant's Associate Pre-Tax Contributions, which shall be $7,000
per calendar year (as indexed for the cost of living pursuant to Code
section 402(g)(5) and 415(d)). For purposes of this Section, a
Participant's Associate Pre-Tax Contributions shall include (i) any
Employer contribution made under any qualified cash or deferred
arrangement as defined in Code section 401(k) to the extent not
includible in gross income for the taxable year under Code section
402(e)(3) or 402(h)(1)(B) (determined without regard to Code section
402(g)), and (ii) any Employer contribution to purchase an annuity
contract under Code section 403(b) under a salary reduction agreement
(within the meaning of Code section 3121(a)(5)(D)).
14.c "Disability". A Participant's total and permanent, mental or
physical disability resulting in termination of employment as
evidenced by presentation of medical evidence satisfactory to the
Administrator.
15.c "Effective Date". October 1, 1992, unless stated otherwise. The
date upon which the provisions of this document become effective. In
general, the provisions of this document only apply to Participants
who are Associates on or after the Effective Date. However,
investment and distribution provisions apply to all Participants with
Account balances to be invested or distributed after the Effective
Date.
16.c "Eligible Associate". A salaried Associate of an Employer, or a
sales Associate of an Employer employed prior to July 1, 1988
provided he or she is not and has never been a Highly Compensated
Employee, except any Associate:
(a) whose compensation and conditions of employment are covered
by a collective bargaining agreement to which an Employer is
a party unless the agreement calls for the Associate's
participation in the Plan; or
(b) who is treated as an Associate because he or she is a Leased
Associate.
17.b "Employer". The Company and any Subsidiary or other Related Company
of either the Company or a Subsidiary which adopts this Plan with the
approval of the Company.
18.b "ERISA". The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific section shall include such
section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending,
supplementing or superseding such section.
19.b "HCE" or "Highly Compensated Employee". An Associate described as a
Highly Compensated Employee in Section 12.
20.b "Hour of Service". Each hour for which an Associate is entitled to:
(a) payment for the performance of duties for any Related
Company;
(b) payment from any Related Company for any period during which
no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, sickness, incapacity (including disability),
layoff, leave of absence, jury duty or military service;
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(c) back pay, irrespective of mitigation of damages, by award or
agreement with any Related Company (and these hours shall be
credited to the period to which the agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these hours
shall be based upon his or her normally scheduled hours per
week or a 40 hour week if there is no regular schedule).
The crediting of hours for which no duties are performed shall be in
accordance with Department of Labor regulation sections 2530.200b-
2(b) and (c). Actual hours shall be used whenever an accurate record
of hours are maintained for an Associate. Otherwise, an equivalent
number of hours shall be credited for each payroll period in
which the Associate would be credited with at least 1 hour. The
payroll period equivalencies are 45 hours weekly, 90 hours biweekly,
95 hours semimonthly and 190 hours monthly.
An Associate's service with a predecessor or acquired company shall
only be counted in the determination of his or her Hours of Service
for eligibility and/or vesting purposes if (1) the Company directs
that credit for such service be granted, or (2) a qualified plan of
the predecessor or acquired company is subsequently maintained by
any Employer or Related Company.
21.d "Ineligible". An individual during the period in which he or she is
(1) an Associate of a Related Company which is not then an Employer,
(2) an Associate, but not an Eligible Associate, or (3) not an
Associate.
22.d "Investment Fund" or "Fund". An investment fund as described in
Section 16.2. The Investment Funds authorized by the Administrator as
of the Effective Date are listed in Appendix A.
23.d "Leased Associate". An individual who is deemed to be an employee of
any Related Company as provided in Code section 414(n) or (o).
24.d "Leave of Absence". A period during which an individual is deemed to
be an Associate, but is absent from active employment, provided that
the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed forces
and the individual returns to active employment within the
period during which he or she retains employment rights under
federal law.
25.b "NHCE" or "Non-Highly Compensated Employee". An Associate described
as a Non-Highly Compensated Employee in Section 12.
26.b "Normal Retirement Date". The date of a Participant's 65th birthday.
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27.b "Owner". A person with an ownership interest in the capital,
profits, outstanding stock or voting power of a Related Company
within the meaning of Code section 318 or 416 (which exclude indirect
ownership through a qualified plan).
28.b "Participant". An Eligible Associate who begins to participate in
the Plan after completing the eligibility requirements as described
in Section 2.1. An Eligible Employee who makes a Rollover
Contribution prior to completing the eligibility requirements as
described in Section 2.1 shall also be considered a Participant
except for purposes of provisions related to Contributions (other
than a Rollover Contribution). A Participant's participation
continues until his or her employment with all Related Companies ends
and his or her Account is distributed or forfeited.
29.b "Pay". The base pay, overtime, bonus and commissions paid to an
Eligible Associate by an Employer while a Participant during the
current period.
Pay is neither increased nor decreased by any salary credit or
reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited
to $200,000 (as indexed for the cost of living pursuant to Code
sections 401(a)(17) and 415(d)) per Plan Year. Pay is limited to
$150,000 (as indexed for the cost of living pursuant to Code sections
401(a)(17) and 415(d)) per Plan Year effective for Plan Years
beginning after December 31, 1993.
30.b "Plan". The ADVO 401(k) Savings Plan set forth in this document, as
from time to time amended.
31.b "Plan Year". The annual accounting period of the Plan and Trust
which ends on each December 31.
32.b "QDRO". A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within the
meaning of Code section 414(p).
33.b "Related Company". With respect to any Employer, that Employer and
any corporation, trade or business which is, together with that
Employer, a member of the same controlled group of corporations, a
trade or business under common control, or an affiliated service
group within the meaning of Code section 414(b), (c), (m) or (o).
34.b "Settlement Date". The date on which the transactions from the most
recent Trade Date are settled.
35.b "Spousal Consent". The written consent given by a spouse to a
Participant's election (or waiver) of a specified form of benefit,
including a loan or in-service withdrawal, or Beneficiary
designation. The spouse's consent must acknowledge the effect on the
spouse of the Participant's election, waiver or designation and be
duly witnessed by a Plan representative or notary public. Spousal
Consent shall be valid only with respect to the spouse who signs the
Spousal Consent and only for the particular choice made by the
Participant which requires Spousal Consent. A Participant may
revoke (without Spousal Consent) a prior election, waiver or
designation that required Spousal Consent at any time before payments
begin. Spousal Consent also means a determination by the
Administrator that there is no spouse, the spouse cannot be
located, or such other circumstances as may be established by
applicable law.
36.b "Subsidiary". A company which is 50% or more owned, directly or
indirectly, by the Company.
37.b "Sweep Account". The subsidiary Account for each Participant through
which all transactions are processed, which is invested in interest
bearing deposits of the Trustee.
38.b "Sweep Date". The cut off date and time for receiving instructions
for transactions to be processed on the next Trade Date.
39.b "Taxable Income". Compensation in the amount reported by the
Employer as "Wages, tips, other compensation" on Form W-2, or any
successor method of reporting under Code section 6041(d).
40.b "Trade Date". Each day the Investment Funds are valued, which is
normally every day the assets of such Funds are traded.
41.b "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. The Trust is part of the Plan
and holds the Plan assets which are comprised of the aggregate of
Participants' Accounts.
42.b "Trustee". Wells Fargo Bank, National Association.
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2 ELIGIBILITY
1.b Eligibility
All Participants as of October 1, 1992 shall continue their
eligibility to participate. Each other Eligible Associate shall
become a Participant on the first day of the next month after the
date he or she completes a 12 month eligibility period in which he or
she is credited with at least 1,000 Hours of Service. The initial
eligibility period begins on the date an Associate first performs an
Hour of Service. Subsequent eligibility periods begin with the start
of each Plan Year beginning after the first Hour of Service
is performed.
2.b Ineligible Associates
If an Associate completes the above eligibility requirements, but is
Ineligible at the time participation would otherwise begin (if he or
she were not Ineligible), he or she shall become a Participant on the
first subsequent date on which he or she is an Eligible Associate.
3.b Ineligible or Former Participants
A Participant may not make or share in Plan Contributions, nor
generally be eligible for a new Plan loan, during the period he or
she is Ineligible, but he or she shall continue to participate for
all other purposes. An Ineligible Participant or former Participant
shall automatically become an active Participant on the date he or
she again becomes an Eligible Associate.
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3 PARTICIPANT CONTRIBUTIONS
1.b Associate Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Associate may elect to
reduce his or her Pay by an amount which does not exceed the
Contribution Dollar Limit, within the limits described in the
Contribution Percentage Limits paragraph of this Section 3, and have
such amount contributed to the Plan by the Employer as an Associate
Pre-Tax Contribution. The election shall be made in advance as a
whole percentage of Pay on such form and with such advance notice as
may be prescribed by the Administrator. In no event shall an
Associate's Associate Pre-Tax Contributions under the Plan and
all other plans, contracts or arrangements of all Related Companies
exceed the Contribution Dollar Limit for the Associate's taxable year
beginning in the Plan Year.
2.b Changes
A Participant who is an Eligible Associate may change his or her
Associate Pre-Tax Contribution election at any time by giving the
Administrator such advance notice as it requires. The changed
percentage shall become effective with the first payroll of the
month paid after such date. Participants' Contribution election
percentages shall automatically apply to Pay increases or decreases.
3.b Stopping Contributions
A Participant may revoke his or her Contribution election at any time
by giving written notice to the Administrator, and such election
shall be effective with the first payroll paid after such date. A
Participant may contribute again by making a new Contribution
election at the same time and in the same manner in which a
Participant may change his or her election.
4.b Contribution Percentage Limits
The Administrator may establish (and subsequently change) the maximum
Associate Pre-Tax Contribution percentage, prospectively or
retrospectively (for the current Plan Year), for all Participants.
In addition, the Administrator may establish any lower percentage
limits for Highly Compensated Associates as it deems necessary. As
of the Effective Date, the Associate Pre-Tax Contribution maximum
percentage is 10%.
Irrespective of the limits that may be established by the
Administrator in accordance with this paragraph, in no event shall
the contributions made by or on behalf of a Participant for a Plan
Year exceed the maximum allowable under Code section 415.
5.b Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Associate Pre-Tax Contributions for a
calendar year to this and any other qualified defined contribution
plan in excess of the Contribution Dollar Limit may notify the
Administrator in writing by the following March 1 (or as late as
April 14 if allowed by the Administrator) that an excess has
occurred. In this event, the amount of the excess specified by the
Participant, adjusted for investment gain or loss, shall be refunded
to him or her by April 15 and shall not be included as an Annual
Addition under Code section 415 for the year contributed. Refunds
shall not include investment gain or loss for the period between the
end of the applicable Plan Year and the date of distribution.
However, for Plan Years ending before December 31, 1993, refunds
shall include investment gain or loss for the period between the end
of the applicable Plan Year and the date of distribution. Any Advo
Matching Contributions attributable to refunded excess Associate Pre-
Tax Contributions as described in this Section shall be deemed a
Contribution made by reason of a mistake of fact and removed from the
Participant's Account.
6.b Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover Contributions, may
only be made through payroll deduction. Such amounts shall be paid
to the Trustee in cash and posted to each Participant's Account(s) as
soon as such amounts can reasonably be separated from the Employer's
general assets and balanced against the specific amount made on
behalf of each Participant. In no event, however, shall such amounts
be paid to the Trustee more than 90 days after the date amounts are
deducted from a Participant's Pay or 30 days after the end of the
Plan Year in which deducted. Associate Pre-Tax Contributions shall
be treated as employer contributions in determining tax deductions
under Code section 404(a).
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4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS
1.b Rollovers
The Administrator may authorize the Trustee to accept a rollover
contribution, within the meaning of Code section 402(c) or
408(d)(3)(A)(ii), either from an Eligible Associate in cash or
effective January 1, 1993, as a Direct Rollover, as such term is
defined in Section 11, from another qualified plan on behalf of the
Eligible Employee, even if he or she is not yet a Participant. The
Associate shall be responsible for furnishing satisfactory evidence
to the Administrator that the amount is eligible for rollover
treatment. A rollover contribution received directly from an
Eligible Associate must be paid to the Trustee in cash within 60 days
after the date received by the Eligible Associate from a qualified
plan or conduit individual retirement account. Contributions
described in this paragraph shall be posted to the applicable
Associate's Rollover Account as of the date received by the Trustee.
If it is later determined that an amount transferred pursuant to the
above paragraph did not in fact qualify as a rollover contribution
under Code section 402(c) or 408(d)(3)(A)(ii), the balance credited
to the Associate's Rollover Account shall immediately be (1)
segregated from all other Plan assets, (2) treated as a nonqualified
trust established by and for the benefit of the Associate, and (3)
distributed to the Associate. Any such nonqualifying rollover shall
be deemed never to have been a part of the Plan.
2.b Transfers From Other Qualified Plans
The Administrator may instruct the Trustee to receive assets in cash
or in kind directly from another qualified plan. The Trustee may
refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable,
(b) instructions for posting amounts to Participants' Accounts
are incomplete,
(c) any amounts are not exempted by Code section 401(a)(11)(B)
from the annuity requirements of Code section 417, or
(d) any amounts include benefits protected by Code section
411(d)(6) which would not be preserved under applicable Plan
provisions.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee.
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5 EMPLOYER CONTRIBUTIONS
1.d ADVO Matching Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer shall make
ADVO Matching Contributions as described in the following
Allocation Method paragraph on behalf of each Participant who
contributed during the period.
(b) Allocation Method. The ADVO Matching Contributions for each
period shall total 100% of each eligible Participant's
Associate Pre-Tax Contributions for the period, provided that
no ADVO Matching Contributions shall be made based upon a
Participant's Contributions in excess of 6% of his or her
Pay.
(c) Timing, Medium and Posting. The Employer shall make each
period's ADVO Matching Contribution in cash as soon as is
feasible, and not later than the Employer's federal tax
filing date, including extensions, for deducting such
Contribution. The Trustee shall post such amount to each
Participant's ADVO Matching Account once the total
Contribution received has been balanced against the specific
amount to be credited to each Participant's ADVO Matching
Account.
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6 ACCOUNTING
1.c Individual Participant Accounting
The Administrator shall maintain an individual set of Accounts for
each Participant in order to reflect transactions both by type of
Contribution and investment medium. Financial transactions shall be
accounted for at the individual Account level by "posting" each
transaction to the appropriate Account of each affected Participant.
Participants' Account values shall be maintained in shares for the
Investment Funds and in dollars for their Sweep and Participant loan
Accounts. At any point in time, the Account value shall be
determined using the most recent Trade Date values provided
by the Trustee.
2.c Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep Account
will be credited with interest up until the Settlement Date or the
later date on which it is removed from the Sweep Account.
3.c Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each Trade Date.
For any transaction to be processed as of a Trade Date, the Trustee
must receive all transaction instructions by the Sweep Date. Such
instructions shall apply to amounts held in the Account on that Sweep
Date. Financial transactions of the Investment Funds shall be posted
to Participants' Accounts as of the Trade Date and based upon
the Trade Date values provided by the Trustee. All Trade Date
transactions shall be effected on the Settlement Date relating to
that Trade Date (or as soon thereafter as is administratively
feasible).
4.c Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in shares.
The Trustee is responsible for determining the share values of each
Investment Fund as of each Trade Date. To the extent an Investment
Fund is comprised of collective investment funds of the Trustee, the
net asset and share values shall be determined in accordance with
the rules governing such collective investment funds, which are
incorporated herein by reference. All other net asset and share
values shall be determined by the Trustee. The net asset value of
each Investment Fund shall be based on the fair market value
of its underlying assets.
5.c Payment of Fees and Expenses
Plan fees and expenses including administrative fees, Trustee fees,
fees for government annual report preparation, audit and legal fees,
and fees for nondiscrimination testing and any other special services
shall be paid from the Trust, and charged to Participants in the form
of an Account maintenance fee to the extent that such fees and
expenses are not paid by the Employer directly. See Appendix B
for a breakdown of which fees and expenses shall generally be borne
by the Trust (and charged to individual Participants' Accounts) and
those that shall be paid by the Employer. The Trustee shall have the
authority to pay any such fees and expenses, which remain unpaid by
the Employer for 60 days, from the Trust.
6.c How Fees and Expenses are Charged to Participants
Account maintenance fees which are not paid by the Employer shall be
charged to each Participant's Account on a per Participant basis,
provided that no fee shall reduce a Participant's Account balance
below zero. Transaction type fees (such as investment election
change fees, loan fees, etc.) shall be charged to the Participant's
Account involved in the transaction. Fees and expenses incurred for
the management and maintenance of Investment Funds shall be charged
at the Investment Fund level and reflected in the net gain or loss of
each Fund (unless the Employer makes such payment directly). The
Employer may pay a lower portion of the fees and expenses allocable
to the Accounts of Participants who are no longer Associates or
Beneficiaries than for active Associates.
7.c Accounting for Participant Loans
Participant loans shall be held in a separate Account of the
Participant and accounted for in dollars as an earmarked asset of the
borrowing Participant's Account.
8.c Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's Account
balance with the amount that would be credited to the Account had no
error or omission been made. Funds necessary for any such
restoration shall be provided through payment made by the Employer.
9.c Participant Statements
The Administrator shall provide Participants with statements of their
Accounts as soon after the end of each quarter of the Plan Year as is
administratively feasible.
10.c Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable accounting
methods in performing their respective duties during the period of
converting the prior accounting system of the Plan and Trust to
conform to the individual Participant accounting system described in
this Section. This includes, but is not limited to, the method for
allocating net investment gains or losses and the extent, if any, to
which contributions received by and distributions paid from the Trust
during this period share in such allocation. Trust assets may be
held, during the conversion period, in any investment vehicle
permitted by the Plan, as directed by the Administrator, irrespective
of Participant investment elections.
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<PAGE>
11.c Accounts for QDRO Beneficiaries
A separate Account shall be established for an alternate payee
entitled to any portion of a Participant's Account under a QDRO as of
the date and in accordance with the directions specified in the QDRO.
In addition, a separate Account may be established during the period
of time the Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic relations order
qualifies as a QDRO. Such a separate Account shall be valued and
accounted for in the same manner as any other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so provides, the
portion of a Participant's Account payable to an alternate
payee may be distributed, in a form as permissible under the
Distribution Once Employment Ends Section, to the alternate
payee at the time specified in the QDRO, regardless of
whether the Participant is entitled to a distribution from
the Plan at such time.
(b) Participant Loans. To the extent permitted by law, an
alternate payee, on whose behalf a separate Account has been
established, shall not be entitled to borrow from such
Account. If a QDRO specifies that the alternate payee is
entitled to any portion of the Account of a Participant who
has an outstanding loan balance, all outstanding loans shall
generally continue to be held in the Participant's Account
and shall not be divided between the Participant's and
alternate payee's Accounts.
(c) Investment Direction. Where a separate Account has been
established on behalf of an alternate payee and has not yet
been distributed, the alternate payee may direct the
investment of such Account in the same manner as if he
or she were a Participant.
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7 INVESTMENT FUNDS AND ELECTIONS
1.c Investment Funds
Except for Participants' Sweep and loan Accounts, the Trust shall be
maintained in various Investment Funds. The Administrator shall
select the Investment Funds available to Participants and may change
the number or composition of the Investment Funds, subject to the
terms and conditions agreed to with the Trustee. A list of the
Investment Funds available as of the Effective Date is contained in
Appendix A.
2.c Investment Fund Elections
Each Participant (or Beneficiary) shall make a single election
covering all of his or her Contribution Accounts. A Participant (or
Beneficiary) shall make his or her investment election in any
combination of whole percentage increments of one or any number of
the Investment Funds offered. Each election shall specify whether it
applies only to the amounts not yet received by the Trustee or to
both such future amounts and the current Account balance. The
Administrator may set a maximum percentage of the total election that
a Participant may direct into any specific Investment Fund, which
maximum is described in Appendix A.
3.c Responsibility for Investment Choice
Each Participant shall be solely responsible for the selection of his
or her Investment Fund choices. No fiduciary with respect to the
Plan is empowered to advise a Participant as to the manner in which
his or her Accounts are to be invested, and the fact that an
Investment Fund is offered shall not be construed to be a
recommendation for investment.
4.c Default if No Election
The Administrator shall specify an Investment Fund for the investment
of that portion of a Participant's Account which is not yet held in
an Investment Fund and for which no valid investment election is on
file.
5.c Timing
A Participant shall make his or her initial investment election upon
becoming a Participant and may change his or her election at any time
in accordance with the procedures established by the Administrator
and Trustee. Investment elections received by the Trustee by the
Sweep Date deadline will be effective on the next following Trade
Date.
6.c Switching Fees
A reasonable processing fee may be charged directly to a
Participant's Account for investment election changes in excess of a
specified number per Plan Year as determined by the Administrator.
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<PAGE>
8 VESTING & FORFEITURES
1.c Fully Vested Contribution Accounts
A Participant shall be fully vested in all Accounts at all times.
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9 PARTICIPANT LOANS
1.c Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms and
conditions set forth in this Section. All loan limits are determined
as of the date the Trustee reserves funds for the loan. The funds
will be disbursed to the Participant as soon as is administratively
feasible after the next following Settlement Date.
2.c Loan Funding Limits
The loan amount must meet all of the following limits:
(a) Plan Minimum Limit. The minimum amount for any loan is
$1,000.
(b) Plan Maximum Limit. Subject to the legal limit described in
(c) below, the maximum a Participant may borrow, including
the outstanding balance of existing Plan loans, is 100% of
the following Accounts which are fully vested:
Associate Pre-Tax Account
ADVO Matching Account
Rollover Account
(c) Legal Maximum Limit. The maximum a Participant may borrow,
including the outstanding balance of existing Plan loans, is
50% of his or her vested Account balance, not to exceed
$50,000. However, the $50,000 maximum is reduced by the
Participant's highest outstanding loan balance during the 12
month period ending on the day before the Sweep Date on which
the loan is made. For purposes of this paragraph, the
qualified plans of all Related Companies shall be treated as
though they are part of this Plan to the extent it would
decrease the maximum loan amount.
3.c Maximum Number of Loans
A Participant may have only one loan outstanding at any given time.
4.c Source of Loan Funding
A loan to a Participant shall be made solely from the assets of his
or her own Accounts. The available assets shall be determined first
by Account type and then by investment type within each type of
Account. The hierarchy for loan funding by type of Account shall be
the order listed in the preceding Plan Maximum Limit paragraph.
Within each Account used for funding, amounts shall first be taken
from the Sweep Account and then taken by type of investment in direct
proportion to the market value of the Participant's interest in each
Investment Fund as of the Sweep Date on which the loan is made.
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<PAGE>
5.c Interest Rate
The interest rate charged on Participant loans shall be a fixed
reasonable rate of interest, determined from time to time by the
Administrator, which provides the Plan with a return commensurate
with the prevailing interest rate charged by persons in the
business of lending money for loans which would be made under similar
circumstances. As of the Effective Date the interest rate is
determined as set forth in Appendix C.
6.c Repayment
Substantially level amortization shall be required of each loan with
payments made at least monthly, generally through payroll deduction.
Loans may be prepaid in full or in part at any time. The loan
repayment period shall be as mutually agreed upon by the Participant
and Administrator, not to exceed 5 years. However, the term may be
for any period not to exceed 15 years if the purpose of the loan is
to acquire the Participant's principal residence.
7.c Repayment Hierarchy
Loan principal repayments shall be credited to the Participant's
Accounts in the inverse of the order used to fund the loan. Loan
interest shall be credited to the Participant's Accounts in direct
proportion to the principal repayment. Loan payments are credited
by investment type based upon the Participant's current investment
election for new Contributions.
8.c Loan Application, Note and Security
A Participant shall apply for any loan in such manner and with such
advance notice as prescribed by the Administrator. All loans shall
be evidenced by a promissory note, secured only by the portion of the
Participant's Account from which the loan is made, and the Plan shall
have a lien on this portion of his or her Account.
9.c Default, Suspension and Call Feature
(a) Default. A loan is treated as a default if scheduled loan
payments are more than 90 days late, provided that the
Administrator may agree to a suspension of loan payments for
up to 6 months for a Participant who is on a Leave of
Absence. A Participant shall then have 30 days from the time
he or she receives written notice of the default and a demand
for past due amounts to cure the default before it becomes
final.
(b) Actions upon Default. In the event of default, the
Administrator may direct the Trustee to report the default as
a taxable distribution. As soon as a Plan withdrawal or
distribution to such Participant would otherwise be
permitted, the Administrator may instruct the Trustee to
execute upon its security interest in the Participant's
Account by distributing the note to the Participant.
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<PAGE>
(c) Call Feature. The Administrator shall have the right to call
any Participant loan once employment with all Related
Companies has terminated or if the Plan is terminated.
10.c Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
take out a loan under the Plan.
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<PAGE>
10 IN-SERVICE WITHDRAWALS
1.c Withdrawals for Hardship
(a) Requirements. A Participant who is an Associate may request
the withdrawal of any amount necessary to satisfy a financial
need including amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to
result from the distribution, by submitting a completed
withdrawal request form to the Administrator. The
Administrator shall only approve those requests for
withdrawals (1) on account of a Participant's "Deemed
Financial Need", and (2) which are "Deemed Necessary"
to satisfy the financial need.
(b) "Deemed Financial Need". Financial commitments relating to:
(1) unreimbursable medical expenses described under Code
section 213(d) incurred (or to be incurred) by the
Associate, his or her spouse or his or her
dependents;
(2) the purchase (excluding mortgage payments) of the
Associate's principal residence;
(3) the payment of unreimbursable tuition and related
educational fees for up to the next 12 months of
post-secondary education for the Associate, his or
her spouse or dependents;
(4) the need to pay for the funeral expenses of a family
member;
(5) the need for the Associate to prevent losing his or
her principal residence through eviction or
foreclosure on the mortgage; or
(6) any other circumstance specifically permitted under
Code section 401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "deemed necessary" to
satisfy the financial need only if all of these conditions
are met:
(1) the withdrawal amount does not exceed the financial
need;
(2) the Associate has obtained all other possible
withdrawals and nontaxable loans available from all
plans maintained by Related Companies;
(3) the Administrator shall suspend the Associate from
making any contributions to this Plan, all other
qualified and nonqualified plans of deferred
compensation and all stock option or stock purchase
plans maintained by any Related Company for 12
months from the date the withdrawal payment is
processed; and
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<PAGE>
(4) the Administrator shall reduce the Contribution
Dollar Limit for the calendar year next following the
calendar year of the hardship withdrawal by the
amount of the Associate's Associate Pre-Tax
Contributions for the calendar year of the hardship
withdrawal.
(d) Account Sources for Withdrawal. The withdrawal amount shall
come only from the Participant's fully vested Accounts, in
the following priority order:
Rollover Account
Associate Pre-Tax Account
The amount that may be withdrawn from a Participant's
Associate Pre-Tax Account shall not include any earnings
credited to his or her Associate Pre-Tax Contribution
Account.
(e) Permitted Frequency. There is no restriction on the number
of times a Participant may withdraw from these Accounts on
account of hardship.
2.e Rollover Account Withdrawals
(a) Amount Permitted. A Participant who is an Associate may
withdraw up to the entire balance from his or her Rollover
Account.
(b) Permitted Frequency. There is no restriction on the number
of times a Participant may withdraw from this Account.
(c) Suspension from Further Contributions. A withdrawal from a
Participant's Rollover Account shall not affect his or her
ability to make further Contributions.
3.c Withdrawals for Participants over Age 70*
AMENDMENT NO. 1
TO THE
ADVO 401(K) SAVINGS PLAN AND TRUST
WHEREAS, ADVO, Inc. (the "Company"), approved and adopted the ADVO-
System Inc. Advantage 1 Savings Plan as renamed effective October 1, 1992, the
ADVO 401(k) Savings Plan (the "Plan") and Trust Agreement (the "Trust") which
were originally effective January 1, 1988 and most recently restated effective
October 1, 1992;
WHEREAS, Section 19.1 of the Plan and Trust provides that the Company
reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that Sections 1, 13 and 14 are amended
effective October 1, 1992, Section 13 is amended effective January 1, 1995 and
Section 11 is amended effective as of the execution date of this Amendment as
follows:
Effective October 1, 1992:
1. Section 1 is amended to restate the first full paragraph of Subsection
1.20 in its entirety as follows:
1.20 "Hour of Service".
The crediting of hours for which no duties are performed shall
be in accordance with Department of Labor regulation sections
2530.200b-2(b) and (c). Actual hours shall be used whenever an
accurate record of hours are maintained for an Employee.
Otherwise, an equivalent number of hours shall be credited for
each payroll period in which the Employee would be credited with
at least 1 hour. An Employee will be credited with the payroll
period equivalency that corresponds to the frequency with which
he or she is paid as follows; an Employee paid on a weekly basis
shall be credited with 45 hours weekly, an Employee paid on a
biweekly basis shall be credited with 90 hours biweekly, an
Employee paid on a semimonthly basis shall be credited with 95
hours semimonthly and an Employee paid on a monthly basis shall
be credited with 190 hours monthly.
2. Section 13 is amended to restate Subsections 13.6 and 13.7 each in its
entirety as follows:
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the greater of
125% of the "protected current accrued benefit" or the normal
limit which is the lesser of (1) 125% of the maximum dollar
limitation provided under Code section 415(b)(1)(A) for the Plan
Year or (2) 140% of the amount which may be taken into account
under Code section 415(b)(1)(B) for the Plan Year, where a
Participant's:
<PAGE>
ADVO AMENDMENT NO. 1
401(K) SAVINGS PLAN AND TRUST
(a) "projected annual benefit" is the sum of the annual
retirement benefits (adjusted to an actuarially
equivalent straight life annuity if such benefit
is expressed in a form other than a straight life or
qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of all
defined benefit plans of all Related Companies, as
calculated assuming that (1) the Participant will
continue in employment until normal retirement age under
such plans (or his or her current age, if later) and (2)
the Participant's Taxable Income for the current Plan
Year and all other relevant factors used to determine
benefits under such plans will remain constant for all
future Plan Years.
(b) "projected current accrued benefit" is the projected
annual benefit, as calculated assuming that such plans
provided the Participant the maximum annual retirement
benefits permitted under Code section 415(b); provided,
however, that:
(1) if the Participant was a participant as of the
first Plan Year beginning after December 31, 1986
in one or more defined benefit plans maintained
by any Related Company which were in existence on
May 6, 1986, the denominator of the Defined
Benefit Fraction will not be less than 125% of
the sum of the annual benefits under such plans
which the Participant had accrued as of the close
of the last Plan Year beginning before
January 1, 1987, disregarding any changes in the
terms and conditions of such plans after May 5,
1986; and
(2) if the Participant was a participant as of the
first day of the first Plan Year beginning after
December 31, 1982 in one or more defined benefit
plans maintained by any Related Company which
were in existence on July 1, 1982, the
denominator of the Defined Benefit Fraction will
not be less than the sum of the annual benefits
under such plans which the Participant had
accrued as of the close of the last Plan Year
beginning before January 1, 1983, disregarding
any changes in the terms and conditions of such
plans after June 30, 1982.
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the Participant's
Annual Addition for each Plan Year to date and the denominator
is the sum of the "annual amounts" for each year in which the
Participant has performed service with a Related Company. The
"annual amount" for any Plan Year is the lesser of (1) 125% of
the Code section 415(c)(1)(A) dollar limitation (determined
without regard to subsection (c)(6)) in effect for the Plan Year
and (2) 140% of the Code section 415(c)(1)(B) amount in effect
for the Plan Year, where:
<PAGE>
ADVO AMENDMENT NO. 1
401(K) SAVINGS PLAN AND TRUST
(a) each Annual Addition is determined pursuant to the Code
section 415(c) rules in effect for such Plan Year;
(b) if the Participant was a participant as of the first day
of the first Plan Year beginning after December 31,
1986, in one or more defined contribution plans
maintained by any Related Company which were in
existence on May 6, 1986, the numerator of the Defined
Contribution Fraction will be adjusted if the sum of
such fraction and the Defined Benefit Fraction would
otherwise exceed 1.0. Under the adjustment, an
amount equal to the product of (1) the excess of the sum
of the two Fractions over 1.0, times (2) the denominator
of the Defined Contribution Fraction, will be
permanently subtracted from the numerator of the
Defined Contribution Fraction. The adjustment is
calculated using such fractions as they would be
computed as of the end of the last Plan Year beginning
before January 1, 1987 and disregarding any changes in
the terms and conditions of such plans after May 5,
1986, but using the Code section 415(c) limitation
applicable to the first Plan Year beginning on or after
January 1, 1987; provided, however, that the Annual
Additions for any Plan Year beginning before January 1,
1987 shall not be recomputed to treat all voluntary
contributions as Annual Additions; and
(c) if the Participant was a participant as of the first day
of the first Plan Year beginning after December 31,
1982, in one or more defined contribution plans
maintained by any Related Company which were in
existence on July 1, 1982, the numerator of the Defined
Contribution Fraction will be adjusted if the sum of
such fraction and the Defined Benefit Fraction would
otherwise exceed 1.0. Under the adjustment, an
amount equal to the product of (1) the excess of the sum
of the two Fractions over 1.0, times (2) the denominator
of the Defined Contribution Fraction, will be
permanently subtracted from the numerator of the
Defined Contribution Fraction. The adjustment is
calculated using such fractions as they would be
computed as of the end of the last Plan Year beginning
before January 1, 1983 and disregarding any changes in
the terms and conditions of such plans after June 30,
1982, but using the Code section 415(c) limitation
applicable to the first Plan Year beginning on or after
January 1, 1983.
3. Section 14 is amended to restate Subsections 14.1(b), 14.2(a) and (b)
each in its entirety as follows:
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(b) "Determination Date". The last day of the preceding
Plan Year, or with regard to the Plan's initial Plan
Year, the last day of that Plan Year.
<PAGE>
ADVO AMENDMENT NO. 1
401(K) SAVINGS PLAN AND TRUST
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in
which the Plan is Top Heavy, the Employer shall not
allow any contributions (other than a Rollover
Contribution) to be made by or on behalf of any Key
Employee unless the Employer makes a contribution (other
than Associate Pre-Tax and ADVO Matching Contributions)
on behalf of all Participants who were Eligible
Employees as of the last day of the Plan Year in an
amount equal to at least 3% of each such Participant's
Taxable Income.
(b) Overriding Minimum Benefit. Notwithstanding,
contributions shall be permitted on behalf of Key
Employees if the Employer also maintains a defined
benefit plan which automatically provides a benefit
which satisfies the Code section 416(c)(1) minimum
benefit requirements, as modified by substituting "3
percent" for "2 percent" and by increasing (but not by
more than 10 percentage points) 20 percent by 1
percentage point for each year for which such plan was
taken into account, if applicable. If this Plan is part
of an aggregation group in which a Key Employee is
receiving a benefit and no minimum is provided in any
other plan, a minimum contribution of at least 3% of
Taxable Income shall be provided to the Employees
specified in the preceding paragraph of this plan. In
addition, the Employer may offset a defined benefit
minimum by contributions (other than Pre-Tax and ADVO
Matching Contributions) made to this Plan.
Effective January 1, 1995:
1. Section 13 is amended to restate Subsection 13.2 in its entirety as
follows:
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this Plan
and any other defined contribution plan maintained by any
Related Company for any Plan Year shall not exceed the lesser of
(1) 25% of his or her Taxable Income or (2) $30,000 (as adjusted
for the cost of living pursuant to Code section 415(d)).
Effective The Execution Date Of This Amendment:
1. Section 11 is amended to restate Subsection 11.3 in its entirety as
follows:
11.3 Distribution of Small Amounts
If, after a Participant's employment with all Related Companies
ends, the Participant's vested Account balance is $3,500 or
less, and if at the time of any prior withdrawal or distribution
the Participant's vested Account balance did not exceed $3,500,
the Participant's benefit shall be paid as a single lump sum as
soon as administratively feasible in accordance with procedures
prescribed by the Administrator.
Date: ,19 ADVO, INC.
By:
Title:
The provisions of the above amendment which relate to the Trustee are hereby
approved and executed.
Date: ,19 WELLS FARGO BANK, NATIONAL ASSOCIATION
By:
Title:
Date: ,19 WELLS FARGO BANK, NATIONAL ASSOCIATION
By:
Title:
EXHIBIT 23
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Interests of Named
Experts and Counsel" in the Registration Statement (Form S-8 number not yet
assigned) pertaining to the ADVO, Inc. 401(k) Savings Plan and to the
incorporation by reference therein of our report dated October 24, 1995, with
respect to the consolidated financial statements and schedules of ADVO, Inc.
incorporated by reference and included in its Annual Report (Form 10-K) for the
year ended September 30, 1995, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Hartford, Connecticut
August 29, 1996
