As filed with the Securities and Exchange Commission
on May 23, 1997
Registration No.
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Form S-8
Registration Statement
Under
The Securities Act of 1933
Proffitt's, Inc.
Tennessee 62-0331040
(State of Incorporation) (IRS Employer Identification No.)
3455 Highway 80 West
Jackson, Mississippi 39209
(423) 983-7000
(Address of Principal Executive Offices)
G.R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan
(Full title of the plan)
R. Brad Martin
Chairman of the Board and Chief Executive Officer
Proffitt's, Inc.
5810 Shelby Oaks Drive
Memphis, Tennessee 38134
(901) 372-4300
(Name, address and telephone number of agent for service)
Copies to:
Philip L. McCool, Esq. Brian J. Martin, Esq.
Sommer & Barnard, PC Proffitt's, Inc.
4000 Bank One Tower 750 Lakeshore Parkway
Indianapolis, Indiana 46204 Birmingham, Alabama 35211
(317) 630-4000 (205) 940-4980
______________________
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
securities Amount offering aggregate Amount
to be to be per offering registration
registered regiserted (1) share price fee
---------- ----------- -------- -------- ----------
Common Stock,
$ .10 par value ... 50,000 $39.25 (2) $1,962,500.00(2) $594.70
Preferred Stock
Purchase Rights 50,000 0 (3) 0 (3) 0 (3)
(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 plans described above.
(2) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) under the Securities
Act of 1933 on the basis of the average of the high and low
prices of the Common Shares reported on the Nasdaq National
Market on May 20, 1997.
(3) No additional consideration will be paid for the Preferred
Stock Purchase Rights.
===================================================================
Part II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference.
The documents listed below, and all documents filed by
Registrant pursuant to Sections 13(a), 13(c) 14 and 15(d) of the
Securities Exchange Act of 1934 subsequent to the filing of this
Registration Statement and 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, are
deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of this
Registration Statement:
(a) The Registrant's Annual Report filed with the Securities
Exchange Commission ("SEC") on April 29, 1997 on Form
10-K for the fiscal year ended February 1, 1997;
(b) The Plan's Annual Report on Form 11-K for the Plan Year
ended December 31, 1996, filed concurrently with this
Registration Statement.
(c) The information contained in "Description of Proffitt's Capital
Stock" in the Registrant's Registration Statement on Post-Effective
Amendment No. 1 to Form S-4 (Reg. No. 333-17059) filed with the
Securities and Exchange Commission on January 14, 1997.
Item 4. Description of Securities.
On March 28,1995, the Board of Directors of Registrant
declared a dividend distribution of one right (a "Right") for each
share of Registrant's Common Stock. Each Right entitles the holder
to purchase from Registrant one one-hundredth (1/100) of a share of
Series C Preferred Stock at a price of $85 per one one-hundredth
(1/100) of a share. Such Rights will attach to shares of
Registrant's Common Stock issued stockholders until such Rights
become exercisable. The Rights will become exercisable upon the
acquisition by any person of, or the announcement of the intention
of any person to commence a tender or exchange offer upon the
successful consummation of which such person would be the
beneficial owner of, 20% or more of the shares of Registrant's
Common Stock then outstanding, without the prior approval of the
Registrant's Board of Directors. The Rights are generally designed
to deter coercive takeover tactics and to encourage all persons
interested in potentially acquiring control of Registrant to treat
each stockholder on a fair and equal basis.
Item 5. Interest of Named Experts and Counsel.
Note applicable.
Item 6. Indemnification of Directors and Officers.
The By-Laws of Registrant provide that Registrant shall
indemnify to the full extent authorized or permitted by the
Tennessee Business Corporation Act any person made, or threatened
to be made, a party to any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that such person, or such
person's testate or intestate, is or was an officer or director of
Registrant or serves or served as an officer or director of any
other enterprise at the request of Registrant.
Section 48-18-503 of the Tennessee Business Corporation Act
provides for "mandatory indemnification," unless limited by the
charter, by a corporation against reasonable expenses incurred by
a director who is wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party by
reason of the director being or having been a director of the
corporation. Section 48-18-504 of the Tennessee Business
Corporation Act states that a corporation may, in advance of the
final disposition of a proceeding, reimburse reasonable expenses
incurred by a director who is a party to a proceeding if the
director furnishes the corporation with a written affirmation of
the director's good faith belief that the director has met the
standard of conduct required by Section 48-18-502 of the Tennessee
Business Corporation Act, that the director will repay the advance
if it is ultimately determined that such director did not meet the
standard of conduct required by Section 48-18-502 of the Tennessee
Business Corporation Act, and that those making the decision to
reimburse the director determine that the facts then known would
not preclude indemnification under the Tennessee Business
Corporation Act. Section 48-18-507 of the Tennessee Business
Corporation Act provides for mandatory indemnification, unless
limited by the charter, of officers pursuant to the provisions of
Section 48-18-503 of the Tennessee Business Corporation Act
applicable to mandatory indemnification of directors.
Registrant's By-Laws further provide that Registrant may
purchase and maintain insurance on behalf of any person who is or
was or has agreed to become a director or officer of Registrant, or
is or was serving at the request of Registrant as a director or
officer of another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against such
person and incurred by such person or on such person's behalf in
any such capacity, or arising out of such person's status as such,
whether or not Registrant would have the power to indemnify such
person against such liability under the By-Laws, provided that such
insurance is available on acceptable terms as determined by a
majority of Registrant's Board of Directors.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
5.1 Opinion re: Legality (Since the shares are not
original issuance securities, no Opinion re:
Legality is required)
5.2 Undertaking by the Registrant to ensure the
timely request of a Determination Letter from
the Internal Revenue Service for the Plan.
23.1 Consent of Coopers & Lybrand L.L.P. (Re:
Proffitt's, Inc.)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Coopers & Lybrand L.L.P. (Re:
Parisian, Inc.)
23.4 Consent of Coopers & Lybrand L.L.P. (Re: Form
11-K)
24 Power of Attorney (included at page II-5)
99 G.R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership
Plan
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(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;
Provided, however, that paragraphs (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.
(4) If the Registrant is a foreign private issuer, to
file a post-effective amendment to the Registration Statement
to include any financial statements required by Section 210.3-19 of
this chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act
need not be furnished, provided that the Registrant includes
in the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph
(a)(4) and other information necessary to ensure that all
other information in the prospectus is at least as current as
the date of those financial statements.
(5) For the 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 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.
(6) 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 described in Item 15, 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.
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirement
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 Jackson, State of Mississippi, on
the 21 day of May, 1997.
Proffitt's, Inc.
/s/ R. Brad Martin
By: ________________________________
R. Brad Martin
Chief Executive Officer and
Chairman of the Board
The Plan. Pursuant to the requirements of the Securities Act,
the Plan Trustee has duly caused this registration statement to be
signed on its behalf by the Undersigned, thereunto duly authorized,
in the City of Minneapolis, State of Minnesota, on the 21 day of May, 1997.
G.R. Herberger's, Inc. 401(k)
Employee Stock Purchase Plan and
Employee Stock Ownership Plan
/s/ Karl O. Sharp
By: ________________________________
Karl O. Sharp
Norwest Bank Minnesota N.A.
Plan Trustee
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Brian J. Martin,
his true and lawful attorney-in-fact and agent with full power of
substitution for him in his name, place and stead, in any and all
capacities to sign any and all amendments (including pre-effective
and post effective amendments) to this Registration Statement, and
to file the same with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission,
grants unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully as to
all intents and purposes as he might or could do in person, and
hereby ratifies and confirms all that said attorney-in-fact and
agents or their or his substitute or substitutes any lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/ R. Brad Martin Chief Executive Officer and May 21, 1997
________________________ Chairman of the Board
R. Brad Martin Principal Executive Officer
/s/ Douglas Coltharp Executive Vice President and May 21, 1997
________________________ Chief Financial Officer
Douglas Coltharp Principal Financial Officer and
Principal Accounting Officer
/s/ Bernard E. Bernstien Director May 21, 1997
_______________________
Bernard E. Bernstein
/s/ Edmond D Cicala
_______________________ Director May 21, 1997
Edmond D. Cicala
/s/ Gerard K. Donnelly
_______________________ Director May 21, 1997
Gerard K. Donnelly
/s/ Donald F. Dunn
_______________________ Director May 21, 1997
Donald F. Dunn
_______________________ Director
Michael S. Gross
_______________________ Director
Donald E. Hess
/s/ David Hurd
_______________________ Director May 21, 1997
G. David Hurd
/s/ Richard D. McRae
_________________________ Director May 21, 1997
Richard D. McRae
/s/ C. Warren Neel
_________________________ Director May 21, 1997
C. Warren Neel
_________________________ Director
Harwell W. Proffitt
_________________________ Director
Marguerite W. Sallee
_________________________ Director
Gerald Tsai, Jr.
/s/ Donald de Waal
_________________________ Director May 21, 1997
Ronald de Waal
INDEX TO EXHIBITS FILED
TO REGISTRATION STATEMENT ON
FORM S-8 OF PROFFITT'S, INC.
Sequentially
Exhibit Numbered
No. Description Page
5.1 Opinion re: Legality (Since the shares
are not original issuance securities,
no Opinion re: Legality is required)
5.2 Undertaking by the Registrant to ensure
the timely request of a Determination
Letter from the Internal Revenue Service
for the Plan.
23.1 Consent of Coopers & Lybrand L.L.P.
(Re: Proffitt's, Inc.)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Coopers & Lybrand L.L.P.
(Re: Parisian, Inc.)
24 Power of Attorney (included at page II-4)
99 G.R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report, dated March 20, 1997, on our
audits of the consolidated financial statements of Proffitt's, Inc.
as of February 1, 1997 and February 3, 1996, and for each of the
three years in the period ended February 1, 1997.
/s/ Coopers & Lybrand
L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
May 23, 1997
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration
Statement of Proffitt's, Inc. on Form S-8 of our report dated March
3, 1995, with respect to the consolidated financial statements of
Younkers, Inc. and subsidiary for the year ended January 28, 1995
not separately presented, incorporated by reference in the Annual
Report on Form 10-K of Proffitt's, Inc. for the year ended February
1, 1997.
/s/ Deloitte & Touche LLP
Des Moines, Iowa
May 22, 1997
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report, dated March 22, 1996, on our
audits of the consolidated financial statements of Parisian, Inc.
as of January 28, 1995 and February 3, 1996, and for the years
ended January 29, 1994, January 28, 1995, and February 3, 1996.
/s/ Coopers & Lybrand
L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
May 23, 1997
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Proffitt's, Inc. on Form S-8 of our report dated April
17, 1997, on our audits of the financial statements and financial
statement schedules of G. R. Herberger's, Inc. 401(k) Employee
Stock Purchase Plan and Employee Stock Ownership Plan as of
December 31, 1996 and 1995, and for the year ended December 31,
1996, which report is included in this Annual Report on Form 11-K.
/s/ Coopers & Lybrand
L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
May 23, 1997
EXHIBIT 99
G.R. HERBERGER'S, INC.
401(K) EMPLOYEE STOCK PURCHASE PLAN
AND EMPLOYEE STOCK OWNERSHIP PLAN
This instrument drafted by:
Briggs and Morgan
2400 IDS Center
Minneapolis, Minnesota 55402
TABLE OF CONTENTS
ARTICLE I - INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1 Name of Plan and Trust . . . . . . . . . . . . . .1
Section 1.2 Purpose. . . . . . . . . . . . . . . . . . . . . .1
Section 1.3 Application to Employees Terminating After
Effective Date . . . . . . . . . . . . . . . . . . . . .1
Section 1.4 Plan Maintained by More Than One Employer. . . . .1
Section 1.5 Background . . . . . . . . . . . . . . . . . . . .1
ARTICLE 11 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . .3
Section 2.1 Account. . . . . . . . . . . . . . . . . . . . . .3
Section 2.2 Acquisition Loan . . . . . . . . . . . . . . . . .3
Section 2.2A Actual Deferral Percentage ("ADP"). . . . . . . .3
Section 2.3 Beneficiary. . . . . . . . . . . . . . . . . . . .3
Section 2.4 Board of Directors . . . . . . . . . . . . . . . .3
Section 2.5 Break in Service . . . . . . . . . . . . . . . . .3
Section 2.6 Code . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7 Compensation . . . . . . . . . . . . . . . . . . 4
Section 2.8 Controlled Group . . . . . . . . . . . . . . . . .5
Section 2.9 Effective Date . . . . . . . . . . . . . . . . . .5
Section 2.9A Elective Deferrals or Elective Deferral
Contributions. . . . . . . . . . . . . . . . . . . . . .5
Section 2.10 Employee. . . . . . . . . . . . . . . . . . . . .6
Section 2.11 Employer . . . . . . . . . . . . . . . . . . . .6
Section 2.12 Employer Stock. . . . . . . . . . . . . . . . . .6
Section 2.13 Employment Year . . . . . . . . . . . . . . . . .6
Section 2.14 ERISA . . . . . . . . . . . . . . . . . . . . . .6
Section 2.14A Excess Contributions. . . . . . . . . . . . . . .6
Section 2.14B Excess Elective Deferrals . . . . . . . . . . . .6
Section 2.15 Fair Market Value Per Share . . . . . . . . . . .7
Section 2.16 Fiduciary . . . . . . . . . . . . . . . . . . . .7
Section 2.17 Financed Shares . . . . . . . . . . . . . . . . .7
Section 2.18 Forfeitures . . . . . . . . . . . . . . . . . . .7
Section 2.19 Highly Compensated Employee . . . . . . . . . . .7
Section 2.20 Hour of Service . . . . . . . . . . . . . . . . 10
Section 2.21 Limitation Year . . . . . . . . . . . . . . . . 10
Section 2.22 Non-Highly Compensated Employee . . . . . . . . 11
Section 2.23 Normal Retirement Age . . . . . . . . . . . . . 11
Section 2.24 Parental Absence. . . . . . . . . . . . . . . . 11
Section 2.25 Participant . . . . . . . . . . . . . . . . . . 11
Section 2.26 Plan. . . . . . . . . . . . . . . . . . . . . . 12
Section 2.27 Plan Administrator. . . . . . . . . . . . . . . 12
Section 2.28 Plan Year . . . . . . . . . . . . . . . . . . . 12
Section 2.29 Sponsor . . . . . . . . . . . . . . . . . . . . 12
Section 2.30 Trust . . . . . . . . . . . . . . . . . . . . . 12
Section 2.31 Trust Fund. . . . . . . . . . . . . . . . . . . 12
Section 2.32 Trustee . . . . . . . . . . . . . . . . . . . . 12
Section 2.33 Valuation Date. . . . . . . . . . . . . . . . . 12
Section 2.34 Year of Service . . . . . . . . . . . . . . . . 12
Section 2.35 Year of Service for Participation . . . . . . . 12
Section 2.36 Year of Service for Vesting . . . . . . . . . . 13
ARTICLE III - ELIGIBILITY AND PARTICIPATION. . . . . . . 14
Section 3.1 Eligibility for Participation. . . . . . . . . . 14
Section 3.2 Eligibility Computation Periods. . . . . . . . . 14
Section 3.3 Participation Upon Reemployment. . . . . . . . . 14
Section 3.4 Participation After Normal Retirement Age. . . . 15
Section 3.5 Collective Bargaining Agreement. . . . . . . . . 15
ARTICLE IV - CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 16
Section 4.1 Employer ESOP Contribution . . . . . . . . . . . 16
Section 4.1A Employer Contributions Pursuant to
Participant Elective Deferral Agreement . . . . . . . . 16
Section 4.2 Time of Payment and Form of Contribution . . . . 18
Section 4.3 Allocation of Employer ESOP Contribution . . . . 18
Section 4.4 Allocation of Forfeitures. . . . . . . . . . . . 20
Section 4.5 Advance Employer Contributions . . . . . . . . . 20
Section 4.6 Limitations on Allocations . . . . . . . . . . . 20
Section 4.7 Defined Benefit and Defined Contribution
Plans . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.8 No Contributions by Participants . . . . . . . . 23
Section 4.9 Make-Up Contributions for Omitted
Participants. . . . . . . . . . . . . . . . . . . . . . 23
Section 4.10 Exclusive Benefit; Refund of Employer
Contribution. . . . . . . . . . . . . . . . . . . . . . 24
Section 4.11 Dividends . . . . . . . . . . . . . . . . . . . 25
Section 4.12 Rollover Contributions. . . . . . . . . . . . . 26
Section 4.13 Non-Discrimination Requirements . . . . . . . . 26
Section 4.14 Elective Deferral Accounts. . . . . . . . . . . 29
ARTICLE V - DETERMINATION OF VALUE OF PARTICIPANT'S ACCOUNTS . 30
Section 5.1 Trust Fund and Allocation of Earnings. . . . . . 30
Section 5.2 Determination of Market Value. . . . . . . . . . 30
Section 5.3 Diversification of Investments . . . . . . . . . 30
ARTICLE VI - RETIREMENT AND OTHER TERMINATION OF
PARTICIPATION; VESTING. . . . . . . . . . . . . . . . . . . . 32
Section 6.1 Full Vesting: Retirement, Death or Disability. . 32
Section 6.2 Other Termination of Employment:
Participant's Vested Percentage . . . . . . . . . . . . 32
Section 6.3 Vesting Upon Termination of the Plan . . . . . . 33
Section 6.4 Forfeiture of Nonvested Benefit. . . . . . . . . 33
Section 6.5 Computation of Years of Service and Breaks
in Service. . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.6 Years of Service . . . . . . . . . . . . . . . . 35
Section 6.7 Forfeiture Due to Discharge of Employment
for Cause . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII - PARENTAL ABSENCE PROVISIONS. . . . . . . . . . . . . . 37
Section 7.1 Effective Date of Article VII. . . . . . . . . . 37
Section 7.2 Hours of Service Credited for Parental
Absence . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.3 Plan Years to Which Hours of Service are
Credited. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.4 Information to Plan Administrator. . . . . . . . 37
ARTICLE VIII - DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 38
Section 8.1 Time of Distribution . . . . . . . . . . . . . . 38
Section 8.2 Manner of Distribution . . . . . . . . . . . . . 40
Section 8.3 Form of Distribution . . . . . . . . . . . . . . 41
Section 8.4 Required Distribution After Death. . . . . . . . 41
Section 8.5 Put Option . . . . . . . . . . . . . . . . . . . 42
Section 8.6 Right of First Refusal . . . . . . . . . . . . . 43
Section 8.7 Distribution Prior to a Five Consecutive
Breaks in Service; Restoration of Forfeited Account . . 45
Section 8.8 Reemployment After Distribution Has Been
Made or Commenced . . . . . . . . . . . . . . . . . . . 46
Section 8.9 Designation of Beneficiaries . . . . . . . . . . 46
Section 8.10 Minors and Persons Under Legal Disability . . . 47
Section 8.11 Interest of Persons Who Cannot Be Located . . . 47
Section 8.12 Non-alienation of Benefits. . . . . . . . . . . 48
Section 8.13 Distribution Upon Attaining Age 59. . . . . . . 48
Section 8.14 Distribution Due to Hardship. . . . . . . . . . 48
Section 8.15 Direct Rollovers. . . . . . . . . . . . . . . . 51
ARTICLE IX - TOP-HEAVY PLAN PROVISIONS . . . . . . . . . . . . . . . 53
Section 9.1 Definitions. . . . . . . . . . . . . . . . . . . 53
Section 9.2 Determination of Top-Heavy . . . . . . . . . . . 55
Section 9.3 Minimum Contribution . . . . . . . . . . . . . . 56
Section 9.4 Limitation on Compensation Taken Into
Account . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.5 Vesting for Top-Heavy Plan . . . . . . . . . . . 57
Section 9.6 Combined Plan Limitations. . . . . . . . . . . . 57
ARTICLE X - PLAN ADMINISTRATION. . . . . . . . . . . . . . . . . . . 58
Section 10.1 Employer Responsibility . . . . . . . . . . . . 58
Section 10.2 Powers and Duties of the Plan Administrator . . 58
Section 10.3 Records and Reports of the Plan Administrator . 59
Section 10.4 Plan Administrative Committee . . . . . . . . . 59
Section 10.5 Organization and Operation of the Plan
Administrative Committee. . . . . . . . . . . . . . . . 59
Section 10.6 Compensation and Responsibility for
Payment of Expenses of the Plan Administrator . . . . . 60
Section 10.7 Indemnity of Plan Administrator or Plan
Administrative Committee Members. . . . . . . . . . . . 60
Section 10.8 Claims Procedure. . . . . . . . . . . . . . . . 60
Section 10.9 Voting Rights . . . . . . . . . . . . . . . . . 61
Section 10.10 Bonding. . . . . . . . . . . . . . . . . . . . 62
ARTICLE XI - PLAN LOANS. . . . . . . . . . . . . . . . . . . . . . . 63
Section 11.1 Plan Loans. . . . . . . . . . . . . . . . . . . 63
ARTICLE XII - QUALIFIED DOMESTIC RELATIONS ORDERS. . . . . . . . . . 64
Section 12.1 Permissible Assignment. . . . . . . . . . . . . 64
Section 12.2 Definitions . . . . . . . . . . . . . . . . . . 64
Section 12.3 Notification. . . . . . . . . . . . . . . . . . 65
Section 12.4 Disposition of Disputed Funds . . . . . . . . . 66
Section 12.5 Payment of Benefits . . . . . . . . . . . . . . 66
Section 12.6 Form of Payment . . . . . . . . . . . . . . . . 66
ARTICLE XIII - AMENDMENTS AND ACTION BY SPONSOR/EMPLOYER . . . . . . 67
Section 13.1 Amendments. . . . . . . . . . . . . . . . . . . 67
Section 13.2 Action by Sponsor/Employer. . . . . . . . . . . 67
Section 13.3 Plan Ceases to Constitute an ESOP . . . . . . . 67
ARTICLE XIV - SUCCESSOR SPONSOR AND MERGER OR
CONSOLIDATION OF PLANS . . . . . . . . . . . . . . . . . . . . . . 68
Section 14.1 Successor Sponsor . . . . . . . . . . . . . . . 68
Section 14.2 Plan Assets . . . . . . . . . . . . . . . . . . 68
ARTICLE XV - PLAN TERMINATION. . . . . . . . . . . . . . . . . . . . 69
Section 15.1 Termination of Plan and Trust . . . . . . . . . 69
Section 15.2 Full Vesting. . . . . . . . . . . . . . . . . . 69
Section 15.3 Distribution of Trust Fund. . . . . . . . . . . 69
ARTICLE XVI - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 70
Section 16.1 Nonguaranty of Employment . . . . . . . . . . . 70
Section 16.2 Rights to Trust Assets. . . . . . . . . . . . . 70
Section 16.3 Word Usage. . . . . . . . . . . . . . . . . . . 70
ARTICLE I - INTRODUCTION
Section 1.1 Name of Plan and Trust
(a) The name of this Plan is the G. R. Herberger's, Inc.
401(k) Employee Stock Purchase Plan and Employee Stock Ownership
Plan.
(b) The name of the Trust for the Plan is the G. R.
Herberger's, Inc. Employee Stock Ownership Trust.
Section 1.2 Purpose
This Plan is intended to be a qualified stock bonus plan including
a qualified 401(k) plan within the meaning of Code Section 401(k) and a
qualified employee stock ownership plan within the meaning of Code
Section 4975(e)(7). This Plan was established and is maintained for the
exclusive purpose of providing benefits for the Employees of the
Employer and their Beneficiaries, and to enable eligible Employees to
acquire a proprietary interest in common stock of the Employer. This
Plan is designed to invest primarily in Employer securities. The terms
and provisions of this Plan and Trust are intended to conform to the
requirements of Sections 401(a), 401(k) and 501(a) of the Internal
Revenue Code of 1986, as amended, and the Employee Retirement Income
Security Act of 1974 (ERISA).
Section 1.3 Application to Employees Terminating After Effective Date
The provisions of this Plan as amended and restated shall apply
only to an Employee who terminates employment on or after the Effective
Date unless otherwise provided herein. The rights and benefits, if any,
of an Employee who terminated prior to the Effective Date shall be
determined in accordance with the prior provisions of the Plan in effect
on the date such Employee terminated employment.
Section 1.4 Plan Maintained by More Than One Employer
Upon written consent by the Board of Directors more than one
Employer may adopt this Plan.
Section 1.5 Background
This Plan was first adopted effective January 1, 1967 as a profit
sharing plan. The Plan was amended and restated, effective January 1,
1976, to conform to the requirements of ERISA. Such Plan and Trust were
amended and restated, effective January 1, 1984, to conform to the
requirements of the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA), the Retirement Equity Act of 1984 (REA), and the Tax Reform Act
of 1984 (TRA).
Under the terms of the Profit Sharing Plan, the Employer has the
ability to amend the Plan. Effective January 1, 1989, the Profit
Sharing Plan was modified, amended and restated in its entirety to
conform to the Tax Reform Act of 1986 (TRA '86), the Revenue Act of
1987, and the Tax and Miscellaneous Revenue Act of 1988. It is intended
that the Plan be converted to an Employee Stock Ownership Plan effective
December 31, 1989.
ARTICLE II - DEFINITIONS
Section 2.1 Account shall mean the entire interest of each
Participant in the Trust.' The Trustee shall create and maintain a
separate account for each Participant and shall credit thereto the
amount of contributions to the Plan and all gains and losses allocable
thereto. Within each Participant's Account, separate accountings shall
be maintained for: (i) Elective Deferral Contributions, and (ii)
Employer ESOP Contributions, if any, and all gains and losses thereon.
That portion of a Participant's Account attributable to Elective
Deferral Contributions shall be referred to as the Participant's
Elective Deferral Account.
Section 2.2 Acquisition Loan shall mean a loan (or other
extension of credit) used by the Trust to finance the acquisition of
Employer Stock, which loan may constitute an extension of credit to the
Trust from a "party in interest" (as defined in ERISA Section 3(14)).
Section 2.2A Actual Deferral Percentage ("ADP") shall mean, for
a specified group of Participants for a Plan Year, the average of the
ratios (calculated separately for each Participant in such group to the
nearest one-hundredth of one percent) of the amount of Employer
contributions actually paid over to the Trust on behalf of such
Participant for the Plan Year to the Participant's Compensation, as
defined under Section 2.7, for such Plan Year. Employer contributions
on behalf of any Participant shall include: (i) any Elective Deferrals
made pursuant to the Participant's Elective Deferral Agreement,
including Excess Elective Deferrals of Highly-Compensated Employees, but
excluding Excess Elective Deferrals of Non-Highly Compensated Employees
that arise solely from Elective Deferrals made under the Plan or plans
of this Employer. The actual deferral ratio for a Participant who fails
to make Elective Deferrals is zero. For purposes of determining the
deferral ratio of a Participant who is a five percent (5%) owner or one
of the ten (10) most highly-paid Highly Compensated Employees, the
deferral ratio and the Compensation of such Participant shall include
the deferral ratio and the Compensation for the Plan Year of Family
Members (as defined in Code Section 414(q)(6)). Family Members, with
respect to Highly Compensated Employees, shall be disregarded as
separate Employees in determining the deferral ratio both for
Participants who are Non-Highly Compensated -and for Participants who
are Highly Compensated Employees.
Section 2.3 Beneficiary shall mean the person, persons or entity
designated in accordance with the Plan to receive payments in the event
of a Participant's death.
Section 2.4 Board of Directors shall mean the Board of Directors
of the Sponsor.
Section 2.5 Break in Service shall mean a Plan Year in which an
Employee or a Participant is credited with fewer than 501 Hours of
Service with the Employer or a member of the Employer's Controlled
Group.
Section 2.6 Code shall mean the Internal Revenue Code of 1986,
as amended.
Section 2.7 Compensation shall mean a Participant's total
earnings, wages, salaries, and fees for services and other amounts
(without regard to whether or not the amount is paid in cash) received
for services actually rendered in the course of employment with the
Employer maintaining this Plan to the extent such amounts are includable
in gross income.
Compensation shall not include the following:
(a) Reimbursements or other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred
compensation and welfare benefits.
(b) Employer contributions to a deferred compensation
plan to the extent that, before the application of the limitation
under Code Section 415 to that plan, the contributions are not
includable in the Employee's gross income for the taxable year in
which contributed; Employer contributions under a SEP to the
extent such contributions are deductible by the Employee are not
includable in the Employee's gross income for the taxable year in
which contributed; or any distribution from a deferred
compensation plan, regardless of whether such amounts are
includable in the gross income of the Employee when distributed.
Notwithstanding the foregoing, Compensation shall include any
amount that is deferred by a Participant pursuant to a salary
deferral agreement with respect to which the Employer makes a
contribution on behalf of a Participant and which is not
includable in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h) or 403(b).
(c) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by an Employee either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture.
(d) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
Compensation shall include only that compensation which is
actually paid or made available to the Participant during the Plan Year.
Compensation shall not be limited to the period of time during the Plan
Year that an Employee is treated as a Participant.
For Plan Years beginning after December 31, 1988, the Plan shall
not take into account Compensation for any Participant in excess of
$200,000. This limitation shall be adjusted by the Secretary of the
Treasury at the same time and in the same manner as prescribed under
Code Section 415(d) for cost of living increases, except that the dollar
increase in effect on January 1 of any calendar year shall be effective
for the Plan Year beginning in such calendar year and the first
adjustment to the $200,000 limitation shall become effective on January
1, 1990. If Compensation for any prior Plan Year is taken into account
in determining a Participant's allocations or benefits for the current
Plan Year, the Compensation for such prior Plan Year is subject to the
applicable Compensation in effect for that prior Plan Year. For this
purpose, for Plan Years beginning before January 1, 1990, the applicable
Compensation Limitation is $200,00. If the period for determining
Compensation used in calculating a Participant's allocation for a Plan
Year which is a short Plan Year (i.e., fewer than 12 months), the
Compensation limitation shall be an amount equal to the $200,000
limitation (as adjusted for cost of living increases) multiplied by the
fraction, the numerator of which is the number of months in the short
Plan Year, and the denominator of which is 12 months.
In determining the Compensation of a Participant, the family
aggregation rules of Code Section 414(q)(6) shall apply, except that in
applying such rules, the term "family" shall include only the spouse of
the Participant and any lineal descendants of the Participant who have
not attained age 19 before the close of the Plan Year. If the aggregate
Compensation for the family group exceeds $200,000 (as indexed), then
the Compensation of each family member shall be proportionately reduced
so the total equals $200,000 (as indexed)."
Section 2.8 Controlled Group shall mean those entities which
constitute a controlled group of corporations as defined in Code Section
414(b), trades or business under common control as defined in Code
Section (c), or an affiliated service group as defined in Code Section
414(m), and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
Section 2.9 Effective Date shall mean January 1, 1989, the date
on which the provisions of this amended and restated Plan became
effective, unless noted elsewhere; provided however, it is intended that
the provision relating strictly to the operation of this plan as an ESOP
are effective December 31, 1989 and the provisions relating to its
operation as a 401(k) plan are effective April 15, 1993.
Section 2.9A Elective Deferrals or Elective Deferral
Contributions shall mean any Employer contributions made to the Plan at
the election of the Participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary deferral agreement or
other written deferral election. With respect to any taxable year of a
Participant, a Participant's Elective Deferral is the sum of all
Employer contributions made on behalf of such Participant pursuant to an
election to defer under any qualified cash or deferred arrangement as
described in Code Section 401(k), any simplified employee pension cash
or deferred arrangement as described in Code Section 402(h)(1)(B), any
eligible deferred compensation plan under Code Section 457, any plan as
described under Code Section 501(c)(18), and any employer contributions
made on the behalf of a Participant for the purchase of any annuity
contract under Code Section 403(b) pursuant to a salary deferral
agreement. Elective Deferrals shall not include any deferrals properly
distributed as excess annual additions. Elective Deferrals made under
this Plan, or any other qualified plan, shall be limited to the dollar
amount in Code Section 402(g) as in effect at the beginning of such
taxable year.
Section 2.10 Employees shall mean any person employed by the
Employer other than independent contractors. Employee shall include
leased employees within the meaning of Code Section 414(n)(2) unless
such leased employees constitute less than 20 percent of the Employer's
nonhighly compensated Employees within the meaning of Code Section
414(n)(1)(C)(ii) and such leased employees are covered by a plan
described in section 414(n)(5) of the Code.
Section 2.11 Employer shall mean G.R. Herberger's, Inc., Fandel
Company (a wholly-owned subsidiary of G. R. Herberger's, Inc.) and any
successor entity thereto which adopts this Plan. Employer shall also
include any other employer who, with the written consent of the Board of
Directors, adopts this Plan.
Section 2.12 Employer Stock shall mean shares of common stock of
G.R. Herberger's, Inc. (or of a Controlled Group member) having, a
combination of voting power and dividend rights equal to or in excess of
any other class of common stock of G.R. Herberger's, Inc. (or of a
Controlled Group member). Employer stock shall also include noncallable
preferred stock if such stock is convertible at any time into common
stock meeting the foregoing requirements.
Section 2.13 Employment Year shall mean a consecutive twelve
month period measured from an Employee's initial date of hire (or latest
date of rehire if the Employee has terminated employment) or from any
anniversary thereof An Employee's initial date of hire shall be the date
on which the Employee first is credited with an Hour of Service.
Section 2.14 ERISA shall mean the Employee Retirement Income
Security Act of -1974 as enacted in P.L 93-406, including any amendments
thereto.
Section 2.14A Excess Contributions shall mean with respect to any
Plan Year, the excess of:
(a) The aggregate amount of Employer contributions
actually taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
(b) The maximum amount of such contributions for the
Highly Compensated Employees permitted by the ADP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADP, beginning with the
highest of such percentages).
Section 2.14B Excess Elective Deferrals shall mean those Elective
Deferrals that are includable in a Participant's gross income under Code
Section 402(g) to the extent such Participant's Elective Deferrals for
a taxable year exceed the dollar limitation under such Code Section.
Determination of such Excess Elective Deferrals shall be made pursuant
to Section 4.lA(f) of the Plan. Excess Elective Deferrals shall be
treated as annual additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the close of the
Participant's taxable year.
Section 2.15 Fair Market Value Per Share shall mean that value
per share as determined by the Board of Directors, provided that in
determining Fair Market Value Per Share the Board of Directors shall
obtain and rely upon a valuation made by an independent appraiser,
provided such appraiser satisfies requirements similar to those
contained in the Regulations prescribed under Section 170(a)(1) of the
Code.
Section 2.16 Fiduciary shall mean the Employer, the Plan
Administrator and the Trustee, or any other person who exercises any
discretionary authority or discretionary control respecting the Plan or
Trust, but only with respect to the specific responsibilities of each
for the administration of the Plan and Trust. For the purposes of
ERISA, the Sponsor shall be a Named Fiduciary and the Sponsor may from
time to time appoint one or more additional named Fiduciaries.
Section 2.17 Financed Shares shall mean shares of Employer Stock
acquired by the Trust with the proceeds of an Acquisition Loan.
(a) Allocated Financed Shares shall mean Financed Shares
that have been released from the Shares Suspense Account and
allocated to Participant Accounts.
(b) Unallocated Financed Shares shall mean Financed
Shares that are being held in the Shares Suspense Account.
(c) Shares Suspense Account shall mean an account
maintained by the Trustee wherein the Financed Shares are held
until they are allocated to Participant Accounts.
Section 2.18 Forfeitures shall mean the nonvested portion of a
Participant's Account which may be reallocated to other Participants in
accordance with Sections 4.4 and 6.4 hereof
Section 2.19 Highly Compensated Employee shall mean:
(a) Any Employee who at any time during such Plan Year
or the preceding Plan Year,
(1) Was a five percent (5%) owner of the Employer (as
defined in Code Section 416(i)(1));
(2) Received more than $75,000 (or such greater amount
as announced by the Secretary of Treasury to reflect
cost of living increases), in annual compensation
(as defined in Code Section 414(q)(7)) from the
Employer;
(3) Earned more than $50,000 (or such greater amount as
announced by the Secretary of Treasury to reflect
cost of living increases), in annual compensation
from the Employer and was a member of the "top paid
group" (as defined in Code Section 414(q)(4)) for
such Plan Year; or
(4) Was an officer of the Employer (within the meaning
of Code Section 416(i)) and received compensation in
excess of 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for the Plan Year.
(i) If an Employer has no officers who meet the
requirements of (4) above; the top paid
officer will be treated as Highly
Compensated, regardless of the level of
compensation.
(ii) In addition, in no event will an Employer
have more than 50 officers (or, if less, the
greater of three Employees or ten percent of
the Employees) who are considered to be
Highly Compensated Employees merely by reason
of their status as officers. Only those 50
officers with the highest compensation will
be affected.
(iii) An Employee who was not Highly Compensated
for the prior Plan Year will not be treated
as Highly Compensated for the current Plan
Year as a result of officer status, or of
earning more than $50,000 or $75,000 (as
adjusted for cost of living increases) unless
the Employee is one of the top 100 Employees
by compensation.
(b) The definition of Highly Compensated Employee is
made by taking into account total compensation as defined in
Section 415 of the Code, and including elective deferrals and
salary reduction contributions to a cafeteria arrangement.
(c) The "top paid group" includes all active Employees
who are in the top 20 percent of the Employer's workforce on the
basis of compensation.
(1) In determining the size of the top paid group (but
not for identifying those Employees who may be part
of the group), the following Employees shall be
excluded:
(i) Employees who have not completed six months
of service;
(ii) Employees who normally work less than 17 1/2
hours per week;
(iii) Employees who normally work not more than six
months a year;
(iv) Employees who have not attained age 21;
(v) Except to the extent provided in regulations,
Employees who are covered in a unit of
Employees covered by a collective bargaining
agreement; and
(vi) Employees who, are nonresident aliens with no
U.S. source of income.
(d) If an individual is a member of the family of a five
percent (5%) owner or of a Highly Compensated Employee in the
group consisting of the ten (10) Highly Compensated Employees
paid the greatest compensation from the Employer during the Plan
Year, then:
(1) Such individual shall not be considered a separate
Employee, and
(2) Any compensation paid to such individual (and any
applicable contribution on behalf of such
individual) shall be treated as if it were paid to
(or on behalf of) the five (5%) percent owner or the
Highly Compensated Employee. Family means, with
respect to an Employee, such Employee's spouse and
lineal ascendants or descendants.
(e) A former Employee shall be treated as a Highly
Compensated Employee if such Employee was a Highly Compensated
Employee when he separated from service, or such Employee was a
Highly Compensated Employee at any time after attaining age 55.
(f) For purposes of determining the Employees who are
Highly Compensated Employees, the Employer shall include the
Employer's Controlled Group.
Section 2.20 Hour of Service shall mean:
(a) Each hour for which an Employee is paid, or entitled
to payment, by the Employer for the performance of duties;
(b) Each hour for which an Employee is paid, or entitled
to payment by the Employer for a period of time during which no
duties are performed (whether or not the employment relationship
has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or leave
of absence (but not in excess of 501 hours in any continuous
period during which no duties are performed). A payment shall be
deemed to be made by or due from the 'Employer regardless of
whether such payment is made by or due from the""Employer
directly, or indirectly, through a trust fund, insurer or other
entity to which the Employer contributes or pays premiums;
provided, however, that no such Hours of Service shall be
credited to the Employee if such direct or indirect & payment is
made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment
compensation or disability insurance laws, or only reimburses the
Employee for medical or medically related expenses incurred by
the Employee;
(c) Each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by
the Employer;
(d) Hours of Service, for purposes of determining
whether a Break in Service has occurred, shall include each hour
credited for a Parental Absence pursuant to Article VII hereof;
(e) Each hour for which an Employee could have worked
during a period of time in which he performs no duties and for
which he is neither paid nor entitled to payment while absent on
an approved leave of absence.
(1) No more than 501 Hours of Service shall be credited
with respect to a single computation period during
which the Employee performs no duties, and crediting
for Hours of Service during an approved Leave of
Absence shall not be permitted to cause an
Employee's total Hours of Service for any Plan Year
to equal or exceed 1,000 or more Hours, unless such
Employee was entitled to 1,000 or more Hours for
actual service or performance of duties as an
Employee.
(2) Approved leave of absence shall mean any absence
authorized by the Employer under the Employer's
standard personnel practices, provided that all
persons in similar circumstances must be treated
alike in the granting of such approved leaves of
absence, and provided further that the Participant
returns at the end of the authorized absence. An
absence due to service in the Armed Forces of the
United States shall be considered an approved leave
of absence, provided that the absence is caused by
war or other emergency, or provided that the
Employee is required to serve under the laws of
conscription in time of peace, and further provided
that the Employee returns to employment with the
Employer within the period provided by law.
Hours of Service shall be determined and applied to the appropriate
computation periods in accordance with Department of Labor Regulations,
Section 2530.200b-2(b) and (c) from the Employer's records of hours
worked and hours for which payment is made or due. Hours of Service
equivalencies shall be in accordance with Department of Labor
Regulations Section 2530-200b-3 and for each pay period in which a
salaried Employee is paid, such Employee shall be credited with the
number of Hours which correspond to his pay period under the following
equivalencies:
Pay Period Hours of Service
------------ ----------------
Weekly 45
Biweekly 90
Semimonthly 95
Monthly 190
Section 2.21 Limitation Year shall mean the Plan Year or such
other twelve consecutive month period designated by the Board of
Directors.
Section 2.22 Non-Highly Compensated Employee shall mean any
Employee who is neither a Highly Compensated Employee nor a family
member of a Highly Compensated Employee.
Section 2.23 Normal Retirement Age shall mean age 65.
Section 2.24 Parental Absence shall mean, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason
of the Participant's pregnancy, birth of the Participant's child,
placement of a child with the Participant in connection with the
adoption of such child, or any absence for the purpose of caring for
such child for a period immediately following such birth or placement.
Section 2.25 Participant shall mean an Employee or former Employee
of the Employer participating in this Plan pursuant to the provisions of
Article III hereof.
Section 2.26 Plan shall mean the G. R. Herberger's, Inc. 401(k)
Employee Stock Purchase Plan and Employee Stock Ownership Plan as
amended and continued by this instrument.
Section 2.27 Plan Administrator shall mean the Sponsor or such
other person or committee as the Employer may designate pursuant to the
provisions of this Plan to act on behalf of the Employer.
Section 2.28 Plan Year shall mean a consecutive twelve month
period beginning each January 1 and ending on the subsequent December
31.
Section 2.29 Sponsor shall mean G.R. Herberger's, Inc.
Section 2.30 Trust shall mean the Trust created under the
Agreement and Declaration of Trust entered into by the Employer and
Trustee pursuant to this Plan.
Section 2.31 Trust Fund shall mean all of the assets of the Plan
held by the Trustee at any time under the Trust Agreement.
Section 2.32 Trustee shall mean the person, persons or entity
appointed by the Board of Directors to administer the Trust or any duly
appointed and qualified successor Trustee.
Section 2.33 Valuation Date shall mean the last day of each Plan
Year, and each interim date, if any, as selected by the Plan
Administrator, upon which the Trust Fund is valued.
Section 2.34 Year of Service shall mean (for purposes other than
vesting) a consecutive twelve month computation period during which an
Employee has completed at least one thousand (1,000) Hours of Service
with the Employer or predecessor employer if the Employer maintains the
plan of such employer. An Employee shall be credited with all Hours of
Service completed with any Employer, as defined in Section 2.11, or any
other member of the Employer's Controlled Group.
Section 2.35 Year of Service for Participation shall mean the
completion of 1,000 Hours of Service during an eligibility computation
period as defined in Section 3.2 and shall include all Years of Service
prior to the Effective Date of this Plan.
Section 2.36 Year of Service for Vesting shall mean the completion
of any vesting computation period as defined in Section 6.5, and shall
include the completion of all computation periods prior to the Effective
Date of this amended and restated Plan.
ARTICLE III - ELIGIBILITY AND PARTICIPATION
Section 3.1 Eligibility for Participation
(a) Each Employee who was a Participant in the G.R.
Herberger's, Inc. Profit Sharing Plan the day before the Effective
Date shall become a Participant in the Plan as of the Effective
Date.
(b) Thereafter, except for any leased Employee or any
Employee who is covered by a collective bargaining agreement which
does not provide for inclusion in this Plan, an Employee shall
become a Participant in this Plan as of the first day of January
or July next following the date on which the Employee has completed
a Year of Service and attained age 21.
(c) An Employee shall become a Participant only if he is an
Employee on the date on which he would otherwise, be, entitled to
commence participation.
(d) Effective as of the Plan Year, commencing January 1,
1990, an Employee may, subject to the approval of the Employer,
elect not to participate in the Plan for any Plan Year by executing
an "Election Not to Participate" form effective upon execution by
the employee and acceptance by the Employer. Such election shall
be a one time election and shall be irrevocable.
Section 3.2 Eligibility Computation Periods
The initial eligibility computation period shall coincide with an
Employee's first Employment Year. If an Employee does not complete a
Year of Service during such period, then subsequent eligibility
computation periods shall be Plan Years beginning with the Plan Year
which includes the last day of the Employee's first Employment Year.
Section 3.3 Participation Upon Reemployment
(a) A Participant or former Participant who returns to the
employment of the Employer after a termination of employment may
resume participation on the Participant's reemployment commencement
date (the date on which the Employee is first credited with an Hour
of Service upon reemployment).
(b) Any other Employee whose employment terminates prior to
becoming a Participant, shall enter the Plan in accordance with the
provisions of Section 3.1 hereof.
(c) For purposes of this Section 3.3, the Plan shall take
into account all of an Employee's Years of Service.
Section 3.4 Participation After Normal Retirement Age
Any Participant who remains in the employ of the Employer after
Normal Retirement Age shall continue as a Participant and shall be
entitled to share in the Employer contributions, if any, pursuant to
Article IV until such time as such Participant terminates employment
with the Employer.
Section 3.5 Collective Bargaining Agreement
An Employee who is excluded from participation in the Plan under
Section 3.1 solely by reason of being covered by a collective bargaining
agreement which does not provide for inclusion in this Plan shall be
eligible to commence participation in the Plan as of the date such
Employee is no longer covered by such a collective bargaining agreement.
A Participant who becomes covered by a collective bargaining agreement
which does not provide for inclusion in this Plan will not be eligible
to share in and will not receive Employer contributions or allocations
of Forfeitures for the Plan Years during which he is covered for the
entire Plan Year by such a collective bargaining agreement. A
Participant who is covered by such a collective bargaining agreement for
part of a Plan Year and is otherwise eligible to share in Employer
contributions under Section 4.3 will be eligible to share in Employer
contributions or allocations of Forfeitures for such Plan Year, but only
with respect to Compensation received while the Participant was not
covered by such a collective bargaining agreement.
ARTICLE IV - CONTRIBUTIONS
Section 4.1 Employer ESOP Contribution
With respect to each Plan Year, the Employer shall contribute an
amount or amounts, if any, as the Board of Directors of the Employer
shall determine in its absolute discretion. The Employer will make
sufficient contributions to provide for the payment of the principal of
and interest on an Acquisition Loan used to purchase Financed Shares.
The amount contributed by the Employer shall not exceed the maximum
amount deductible by it for federal income tax purposes under section
404(a)(3) of the Code.
Section 4.lA Employer Contributions Pursuant to Participation Elective
Deferral Agreement
During each Plan Year, a Participant may elect to enter into a
written agreement with the Employer (the "Agreement"), the terms of
which shall provide that the Participant agrees to defer a portion of
such Participant's Compensation from the Employer equal to any dollar
amount of Compensation per payroll period, but not. less than twenty-five
dollars ($25.00) per biweekly payroll period and not to exceed
eleven percent (11%) of such Compensation or such other maximum
percentage announced from time to time by the Employer. In
consideration of the Agreement the Employer will make an Elective
Deferral Contribution to the Participant's Elective Deferral Account for
such Plan Year in an amount equal to the total amount by which the
Participant's Compensation was deferred during the Plan Year pursuant to
the Agreement.
The Agreements shall be governed by the following rules:
(a) Agreements and amendments thereto shall be effective as
of the Payroll period next following the date the Agreement or
amendment is executed by the Participant and the Employer, and
shall apply to each Payroll Period thereafter until amended or
revoked in accordance with the Plan. An Agreement will continue
in effect from Plan Year to Plan Year unless and until amended or
revoked in accordance with the Plan. For purposes of this Section,
the Participant's Payroll Period is the period for which a
Participant is paid regular periodic Compensation by the Employer.
(b) For the 1993 Plan Year, all Employees who have met the
eligibility and participation requirements for the Plan as of April
1, 1993, shall be eligible to enter into an Agreement effective as
of the Payroll Period commencing after April 15, 1993. Otherwise,
a Participant's initial Agreement shall be effective as of the
first day of the Plan Year or the first day of the seventh month
of the Plan Year most immediately following the date the Employee
becomes a Participant and the Agreement is submitted to the Plan
Administrator.
(c) The Agreement may be amended by a Participant during the
Plan Year, but only to reduce prospectively the amount of such
Participant's Elective Deferral. The Agreement may be revoked by
a Participant at any time. If a Participant revokes an Agreement
or fails to enter into an Agreement upon becoming eligible to
participate, such Participant shall be precluded from entering into
a new Agreement until the Payroll Period commencing after the next
April 15.
(d) Any Participant whose Elective Deferral Agreement has
been suspended pursuant to Section 8.14(c)(3) relating to hardship
distributions, may enter into a new Agreement first as of the
Payroll Period following the date on which the Participant's
Elective Deferral Agreement has been suspended for twelve (12)
months. Such new Agreement shall be effective as of the Payroll
Period next following the execution of the new Agreement.
(e) The Employer may prospectively revoke or amend any
Agreement if the Employer determines such revocation or amendment
is necessary to insure that a Participant's Annual Addition does
not exceed the maximum permissible amount under Section 4.6 hereof,
or to satisfy the nondiscrimination tests of Code Section 401(k),
as set forth in Section 4.13 of the Plan for such Plan Year, but
in the latter case, amendments of the amounts deferred shall be
made by a pro rata decrease in the percentage of Elective Deferral
among highly Compensated Employees.
(f) Elective Deferral Contributions made by a Participant
under this Plan or any other qualified plan maintained by the
Employer for any taxable year shall not exceed the limitation set
out in Code Section 402(g) in effect at the beginning of such
taxable year, or such higher amount as adjusted pursuant to Code
Section 402(g)(5) for cost-of-living increases, which for the
calendar year 1993 is $8,994. If a Participant participates in
more than one salary deferral arrangement and the total of such
Elective Deferrals for the taxable year exceed the amount
excludable from gross income, the Excess Elective Deferrals and
earnings thereon shall be returned to the Participant if, by the
following March 1, the Participant notifies the Plan Administrator
in writing of the Excess Elective Deferrals he allocates to this
Plan. A Participant is deemed to notify the Plan Administrator of
Excess Elective Deferrals if such arise solely by taking into
account only those Elective Deferrals made to this Plan, and any
other plans of the Employer.
(g) Notwithstanding any other provision of the Plan, any
Excess Elective Deferrals, plus income and minus any loss allocable
thereto, shall be returned to the Participant by April 15 following
the taxable year such Excess Elective Deferrals were made. The
amount of income or loss allocable to such Excess Elective
Deferrals shall be equal to the sum of income or loss allocable to
the Participant's Elective Deferral Account for the taxable year
multiplied by a fraction, the numerator of which is such
Participant's Excess Elective Deferrals for the taxable year and
the denominator which is the Participant's account balance
attributable to Elective Deferrals without regard to any income or
loss occurring during such taxable year.
(h) Notwithstanding anything contained in this Section to
the contrary, a Participant's Elective Deferral Contributions will
be suspended for a Payroll Period in which a Participant's
Compensation is insufficient, after any statutory deductions and
deductions authorized by the Participant or any other deductions
made and required by operation of law, to permit deducting a
Participant's Elective Deferral Contribution for that Payroll
Period.
Section 4.2 Time of Payment and Form of Contribution
The Employer contributions, if any, shall be paid to the Trustee
either in cash or Employer Stock as the Board of Directors may from time
to time determine. In determining the amount of the Employer
contributions, shares of Employer Stock will be valued at their then
Fair Market Value Per Share. The Employer contributions shall be paid
to the Trustee on or before the due date for filing its federal income
tax return including extensions, for the fiscal year of the Employer
with respect to which the contributions were made.
Elective Deferral Contributions shall be paid to the Trustee as
soon as the amount can be reasonably identified and separated from the
Employer's other assets. Payment shall in any event be made within 30
days after the Participant would otherwise have received the amount
withheld from Compensation on account of the Elective Deferral.
Section 4.3 Allocation of Employer ESOP Contribution
(a) If at the time of such Employer ESOP contribution,
principal and interest is unpaid on any Acquisition Loan and is
then due, then so much of the Employer ESOP contribution as is
required shall be applied to the payment of interest or principal
on the Acquisition Loan which is then due and Financed Shares shall
be released in accordance with Section 4.3(b). The Employer ESOP
contribution with respect to a Plan Year along with any Forfeitures
for such Plan Year shall be allocated by the Plan Administrator to
the Accounts of eligible Participants as of the last day of the
Plan Year in the same proportion that the Compensation of each
Participant for the Plan Year bears to the Compensation of all
Participants for such Plan Year, provided, however, that
Compensation of any Employee who becomes a Participant during a
Plan Year shall be limited to Compensation paid after commencement
of participation.
(1) No allocation of the Employer's ESOP contribution for
a Plan Year shall be made to a Participant unless such
Participant is credited with 1,000 Hours of Service
during the Plan Year and is in the employ of the
Employer on the last day of the Plan Year.
(2) Any Participant who is not in the employ of the
Employer on the last day of the Plan Year due to
retirement on or after such Employee's Normal
Retirement Age, death or Disability, shall nonetheless
receive an allocation of the Employer's ESOP
contribution for such Plan Year, regardless of whether
such Participant was credited with 1,000 Hours of
Service prior to such retirement, Disability or death.
Allocations shall be made on the basis of actual
Compensation received during such Plan Year.
(b) Financed Shares acquired with the proceeds of an
Acquisition' Loan under Section 4.3 of the Trust shall be added to
and maintained in a Shares Suspense Account. As the Employer makes
ESOP contributions to the Plan for a Plan Year and the Trustee
makes payments of principal and interest on the Acquisition Loan,
such Financed Shares shall be released from the Shares Suspense
Account and allocated as of the last day of the Plan Year for which
the contribution was made to the Accounts of the Participants in
the manner provided in paragraph (a) above. The number of Financed
Shares to be released from the Shares Suspense Account for each
Plan Year shall be based upon the ratio that the payment of
principal and interest on the Acquisition Loan for that Plan Year
bears to the total projected payments of principal and interest
over the duration of the Acquisition Loan repayment period.
(c) If Financed Shares acquired with the proceeds of an
Acquisition Loan are sold before being released from the Shares
Suspense Account, the proceeds from such sale shall be applied to
the payment of principal and interest on the Acquisition Loan. Any
sale proceeds remaining after payment of all principal and interest
on the Acquisition Loan shall be treated as a general investment
gain and allocated to the Accounts of Participants under Section
5.1.
(d) If the Plan has acquired Employer Stock and the seller
has elected to qualify for nonrecognition of gain on the sale of
such securities under Section 1042 or Section 2057 of the Code,
then no portion of the assets of the Trust Fund attributable to (or
allocable in lieu of) such Employer Stock shall be allocated for
the benefit of such seller, any person related to such seller under
section 267(b) of the Code (except as excluded by Section
409(n)(3)(A) of the Code) or any other person who owns (after
application of Section 318(a) of the Code, -but without regard to
the employee trust exception in paragraph (2)(B)(i)), more than 25%
(by value) of the Employer or members of the Controlled Group (all
within the meaning of Code Section 409(n)).
(e) With respect to certain dividends used to make payments
on an Acquisition Loan, the special allocation rules of Section
4.11 of this Plan shall apply.
(f) If the Financed Shares acquired with the proceeds of an
Acquisition Loan are sold or redeemed prior to being released from
the Shares Suspense Account and the Acquisition Loan is not
prepaid, then the sale or redemption proceeds, or investments
acquired with such proceeds, shall continue to be held in the
Shares Suspense Account as collateral for the Acquisition Loan and
shall continue to be subject to the release requirements of Section
4.3(b). Any proceeds remaining after repayment of the Acquisition
Loan shall be treated as a general investment gain and allocated
to the Accounts of Participants under Section 5.1.
Section 4.4 Allocation of Forfeitures
Forfeitures shall, as of the last day of each Plan Year, be
allocated among the Accounts of all Participants as a part of and on the
same basis as the Employer contribution is allocated among such
Participants pursuant to Section 4.3. No portion of Employer Stock
shall be forfeited until any other assets allocated to his Account are
first forfeited.
Section 4.5 Advance Employer Contributions
In the event that a part or all of an Employer's contribution for
a Plan Year is paid before the last day of a Plan Year, such advance
contribution shall be held by the Trustee as a separate fund, and along
with the net income and any change in value of such separate fund,
allocated among the Accounts of the Participants as of the last day of
the Plan Year pursuant to Section 4.3. In the event that the Plan is
terminated before the last day of the Plan Year, all such advance
contributions, including any amount treated as an advance contribution
under Section 4.6, shall be returned to the Employer.
Section 4.6 Limitations on Allocations
(a) No Annual Addition shall be allocated to the Account of
any Participant with respect to any Limitation Year which exceeds
the lesser of:
(1) Thirty Thousand Dollars ($30,000.00), (or if greater,
one-fourth of the defined benefit dollar limitation set
forth in Code Section 415(b)(1) as in effect for the
Limitation Year), or,
(2) Twenty-five percent (25%) of the compensation received
by such Participant from the Employer for such
Limitation Year.
(b) For purposes of this Section 4.6, Compensation shall
have the same meaning as defined under Section 2.7, except as
follows:
(1) Compensation shall include reimbursements or other
expense allowances, taxable filing benefits, moving
expenses, deferred compensation, or taxable welfare
benefits.
(2) Compensation shall not include any amount that is
deferred by a Participant pursuant to a salary deferral
agreement with respect to which the Employer makes a
contribution on behalf -of the Participant and which is
not includable in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h) or 403(b).
(c) For purposes of this Section, Annual Addition means the
sum of:
(1) All Employer contributions allocable to the Participant
for a Limitation Year under this Plan and under all
other defined contribution plans maintained by the
Employer or any member of the Controlled Group;
(2) All Employee contributions to such plans allocable to
the Participant for a Limitation Year;
(3) Forfeitures (based upon the Fair Market Value Per Share
of Employer Stock as of the end of the Plan Year)
allocable to the Participant under such plans;
(4) Amounts allocated to an individual medical account, as
defined in Code Section 415(l)(1), which is part of a
defined benefit or annuity plan maintained by the
Employer or a Controlled Group member; and
(5) Amounts allocated, after December 31, 1985, to a
separate account of a Key Employee under an Employer or
Controlled Group Member sponsored welfare benefit fund,
as defined in Code Section 419(e), which will provide
post-retirement health or life insurance benefits.
(d) For any Plan Year in which any Employer contributions
are applied by the Trustee (not later than the due date, including
extensions, for filing the Employer's federal income tax return for
that Plan Year) to pay principal or interest on an Acquisition Loan
and not more than one-third (1/3) of the Employer Contributions are
allocated to Highly Compensated Employees, Annual Additions shall
not include any Financed Shares which are allocated as Forfeitures
or Employer contributions used to pa y interest on an Acquisition
Loan. The Trustee may reallocate such Employer contributions in
order to satisfy this special limitation.
(e) The limitation contained in Section 4.6(a) shall be
determined by aggregating the contributions made by the Employer
to all defined contribution plans maintained by it or any members
of the Controlled Group during the Plan Year.
(f) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of Elective Deferrals
that may be made with respect to the Participant under the limits
of Code Section 415, or other facts and circumstances to which
Treas. Reg. Section 1.415-6(b)(6) shall be applicable, the Annual Addition
with respect to any Participant exceeds the limitation contained
in this Section, the Trustee shall, at the direction of the Plan
Administrator, in the following order and in an amount sufficient
to meet the limitations of Code Section 415:
(1) Return or refuse to accept all or a portion of any
Elective Deferral Contribution made by any such
Participant. Such returned amounts shall be
disregarded for purposes of the ADP test and the Code
Section 402(g) limit.
(2) Reallocate pursuant to Section 4.4 (disregarding such
Participant's Compensation), all or a portion of any
Forfeitures in an amount up to any remaining excess.
(3) Reallocate pursuant to Section 4.3 (disregarding such
Participant's Compensation), a portion of the Employer
ESOP Contribution in an amount up to any remaining
excess.
(4) As an alternative to (3) and at the direction of the
Plan Administrator, treat any remaining excess amount
as an Advance Employer Contribution for the succeeding
Plan Year to be held in a suspense account in
accordance with Section 4.5 hereof. Such excess amount
shall be allocated to reduce the Employer ESOP
contribution, including any allocation of Forfeitures,
for such Participant in the next Limitation Year and
subsequent Limitation Years, if necessary, unless such
excess amount was attributable to a Participant who is
no longer covered by the Plan. In such event, the
excess amount shall be held unallocated in a suspense
account and be used to reduce the Employer ESOP
contribution for all remaining Participants in the next
Limitation Year and subsequent Limitation Years, if
necessary.
Section 4.7 Defined Benefit and Defined Contribution Plans
In the event that a Participant also participates in a defined
benefit plan maintained by the Employer, there shall not be allocated to
the Account of such Participant an Annual Addition that will cause the
sum of such Participants defined benefit plan fraction and his defined
contribution plan fraction, as such terms are defined herein and in
section 415(e) of the Internal Revenue Code, to exceed 1.
Section 4.8 No Contributions by Participants
Employee contributions are neither required nor permitted under
this Plan.
Section 4.9 Make-Up Contributions for Omitted Participants
If, after the Employer's annual contribution for a Plan Year has
been made and allocated it should appear that, through oversight or a
mistake of fact or law, a Participant (or an Employee who should have
been considered a Participant) who should have been entitled to share in
such contribution received no allocation or received an allocation-which
was less than he should have received, the Employer may, at its
election, and in lieu of reallocating such contribution, make a special
make-up contribution for the Account of such Participant in an amount
adequate to provide for him the same percentage of his Compensation for
such Plan Year as was allocated to the Accounts of other Participants
for such omitted Plan Year and earnings attributable thereto.
Section 4.10 Exclusive Benefit; Refund of Employer Contribution
(a) All contributions made by the Employer are made for the
exclusive benefit of the Participants and their Beneficiaries, and
such contributions shall not be used or diverted to purposes other
than for the exclusive benefit of the Participants and their
Beneficiaries.
(b) Notwithstanding the foregoing, amounts contributed to
the Trust by the Employer may be refunded to the Employer only
under the following circumstances:
(i) Disallowance of Deduction. To the extent that an
income tax deduction is disallowed for the contribution
made by the Employer, the Trustee shall immediately
refund to the Employer the amount so disallowed upon
presentation, within one (1) year of the date of such
disallowance, of evidence thereof and a demand by the
Employer for such refund.
(ii) Denial of Qualified Status. If it is determined that
the Plan does not initially constitute a qualified
plan, there shall be returned to the Employer, upon
demand, any contribution made by the Employer with
respect to any Plan year in which qualified status is
denied, provided that demand is made by the Employer
and refund is made by the Trustee within one (1) year
of the date of denial of qualification of the Plan.
(iii) Mistake of Fact. In the case of a contribution
which is made in whole or in part by reason of a
mistake of fact, so much of such contribution as
is attributable to the mistake of fact shall be
returned to the Employer on demand. The Employer
shall present evidence of the mistake of fact to
the Trustee as well as calculations as to the
impact of such mistake. Demand and repayment
must be effectuated within one (1) year after the
payment of the contribution to which the mistake
applies.
(c) In the event that any refund is paid to the Employer
hereunder, such refund shall be made without interest and shall be
apportioned among the Accounts of the Participants as an investment
loss except to the extent that the amount of the refund can be
attributed to one or more specific Participants (such as in the
case of mistakes of fact, disallowances of compensation resulting
in reduction of deductible contribution) in which case the amount
of the refund attributable to each Participant's Account shall be
debited directly against such Account.
(d) Notwithstanding any other provision of this Section, no
refund shall be made to the Employer which is specifically
chargeable to the Account of any Participant in excess of 100% of
the amount of such Account which is derived from the Employer's
contributions, nor shall a refund be made by the Trustee of any
funds, otherwise subject to refund hereunder, which have been
distributed to Participants and/or Beneficiaries. In the case that
such distributions become refundable, the Employer shall have a
claim directly against the distributees to the extent of the refund
to which it is entitled. All refunds pursuant to this Section
shall be limited in amount, circumstances and timing to the
provisions of Section 403(c) of the ERISA.
Section 4.11 Dividends
(a) Any cash dividends received by the Trustee on Employer
Stock allocated to the Accounts of Participants (or former
Participants -or Beneficiaries) may be: (i) retained in the
Participants' applicable Accounts; (ii) used to make payments on
an Acquisition Loan the proceeds of which were used to acquire the
Employer Stock with respect to which the dividend is paid; or (iii)
paid to such Participants, former Participants or Beneficiaries;
(in a nondiscriminatory manner) at the sole discretion of the
Employer. Any current payment in cash to the Participants, former
Participants or Beneficiaries must be made within 90 days of the
end of the Plan Year in which the dividends are received by the
Trustee. The Employer may elect to pay any cash dividend directly
to the Participants or Beneficiaries. Any such payment of cash
dividend on shares of Employer Stock shall not be treated as a
distribution under the Plan.
(b) In the event a dividend on Employer Stock used to make
payments on an Acquisition Loan, then released Employer Stock
shall be allocated in accordance with the following:
(1) A portion (or all) of the Employer Stock released from
the Shares Suspense Account pursuant to Section 4.3(b)
as a result of the use of the cash dividend on Employer
Stock acquired with the proceeds of the Acquisition
Loan (whether such Employer Stock is allocated or
unallocated) to pay principal on the Acquisition Loan
shall first be allocated to Participants' Accounts in
accordance with this Section 4.1 1 (b)(1). That
portion of the released Employer Stock having a Fair
Market Value per Share equal to the dividends paid on
shares of Employer Stock which have been allocated to
Participants' Accounts on or before the date such
dividends are paid shall be allocated to each Account
pro rata based on the amount of the dividends
attributable to Employer Stock held in such Account.
If the dividends paid on allocated Employer Stock
exceeds the fair market value of the Employer Stock
released in accordance with Section 4.3(b), then the
Sponsor shall contribute to the Plan such additional
amounts of Employer Stock to the Trust necessary to
cause the fair market value of the total amount of
Employer Stock allocated under this Section 4.4(b)(1)
to equal the value of the cash dividends attributable
to the Employer Stock held in Participants' Accounts.
(2) If there remains any released and unallocated shares of
Employer Stock after the allocation under Section
4.11(b)(1), above, then such Employer Stock shall be
allocated in the same manner as an Employer
Contribution under Section 4.3(a).
(c) Any cash dividend received by the Trustee on Employer
Stock allocated to a Participant's Elective Deferral Account shall
be paid to Participants, former Participants or Beneficiaries in
cash if and only if the Plan Administrator has determined that such
dividends will be deductible by the Employer under Code Section
404(k).
Section 4.12 Rollover Contributions
Rollover contributions are not permitted under this Plan.
Section 4.13 Non-Discrimination Requirements
(a) In General. For each Plan Year, the Plan shall satisfy
the non-discrimination test in Code Section 401(k) in accordance
with Final Treasury Regulation Section 1.401(k)-l. The Code and
Regulation Sections are incorporated herein by this reference.
(b) The ADP Test. In accordance with Code Section
401(k)(3), the ADP for the group of eligible Participants for any
Plan Year who are Highly Compensated Employees must satisfy one of
the following tests:
(1) The ADP for the Highly Compensated Employees may not be
more than the ADP for all Non-Highly Compensated
Employees multiplied by 1.25; or
(2) The ADP for the group of Highly Compensated Employees
is not more than the ADP for all Non-Highly Compensated
Employees multiplied by two (2) and the difference
between the ADP is not more than two (2) percentage
points.
(c) Special Rules. For purposes of 4.13(b):
(1) If two or more plans which include cash or deferred
arrangements (as defined under Treas. Reg. Section
1.401(k)-l(a)(2) and referred to for purposes of
this Section as "Arrangements") are considered one
plan for the purposes of Code Section 401(a)(4) or
410(b), and to satisfy Code Section 401(k), the
Arrangements included in such plans shall be treated
as one Arrangement provided the Arrangements have the
same Plan Year.
(2) If a Highly Compensated Employee is a Participant under
two (2) or more Arrangements of the Employer or a
member of the Employer's Controlled Group, all such
Arrangements shall be treated as one Arrangement for
the purpose of determining the ADP with, respect to
such Highly Compensated Employee. Any Arrangement
ending with or within the same calendar year shall be
aggregated for purposes of determining the ADP with
respect to such Highly Compensated Employee. However,
plans required to be disaggregated under 401(k)
regulations shall be treated as separate plans.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test.
(4) The determination and treatment of the ADP amounts of
any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
(d) Correcting Excess Contributions. If the ADP of the
Highly Compensated Employees would exceed the limits in 4.13(b),
the Plan Administrator shall correct the ADP and determine the
amount of Excess Contributions by reducing Elective Deferral
Contributions of the Highly Compensated Employees and distributing
such Excess Contributions as follows:
(1) The ADP of the Highly Compensated Employee with the
highest ADP shall be reduced first to the level of the
ADP of the Highly Compensated Employee with the next
highest ADP, or if a lesser reduction will permit, to
the level of the ADP at which the ADP test is
satisfied.
(2) If the ADP test of the Highly Compensated Employees
continues to exceed the limits in Section 4.13(b) after
reducing the ADP of the Highly Compensated Employee
with the highest ADP, then the Plan Administrator will
continue to reduce the ADP similarly by this method of
leveling to the ADP of the Highly Compensated Employee
with the next highest ADP until such ADP test is
satisfied.
(3) The amount of Excess Contributions determined above
shall be distributed to the Highly 'Compensated
Employees on the basis of their relative portions of
the Excess Contributions attributable to each of them.
The amount to be distributed as Excess Contributions
pursuant to this Section 4.13(d) shall be reduced by
any Excess Elective Deferrals which may be distributed
for such taxable year -ending in the same Plan Year in
which the Excess Contributions apply. In addition,
Excess Elective Deferrals which may be distributed for
such taxable year shall be reduced by any Excess
Contributions previously distributed with respect to
the Employee for the Plan Year beginning in such
taxable year. Excess Contributions shall be
distributed from the Participant's Elective Deferral
Account.
(4) Under no circumstances shall the amount of a Highly
Compensated Employee's Elective Deferral Contributions
distributed to correct Excess Contributions exceed the
amount of the Highly Compensated Employee's Elective
Deferral Contributions.
(e) When to Distribute Excess Amounts. Distribution of such
Excess Contributions shall be made no later than the last day of
the Plan Year after the Plan Year in which such excess amounts
apply. If such excess amounts are distributed more than 2-1/2
months after the last day of the Plan Year in which the excess
occurred, a ten percent (10%) excise tax is imposed on the Employer
with respect to such amounts.
(f) Correction of Excess Contributions for "Family Members".
Excess Contributions of Participants who are subject to the "family
member" aggregation rules shall be allocated among the "family
members" in proportion to the Elective Deferrals (and amounts
treated as Elective Deferrals) of each family member that is
combined to determine the combined ADP.
(g) Income Allocable to Excess Contributions. Any income
allocable to Excess Contributions for the Plan Year in which such
excess amounts apply shall be distributed along with distributions
designated as Excess Contributions for the Plan Year. Income
allocable to such Excess Contributions shall be equal to allocable
gains and income, less allocable losses and expenses for such Plan
Year. The Plan shall allocate income for this Section in the same
manner as set forth in Section 5.1 of the Plan. No income shall
be allocated to Excess Contributions for the period between the end
of the Plan Year and the date of distribution (the "gap period").
(h) When to Distribute Excess Amounts. Distribution of such
Excess Contributions shall be made no later than the last day of
the Plan Year immediately following the last day of the Plan Year
in which such excess amounts apply. If such excess amounts are
distributed more than 2-1/2 months after the last day of the Plan
Year in which such excess amounts arose, the Code imposes a ten
percent (10%) excise tax on the Employer with respect to such
amounts.
Section 4.14 Elective Deferral Accounts
(a) All Elective Deferrals made pursuant to a Participant's
Elective Deferral Agreement shall be deposited in the Participant's
Elective Deferral Account. A separate subaccount will be
maintained for each type of contribution included in the
Participant's Elective Deferral Account. Each such account shall
be credited with income applicable to such contribution. Elective
Deferral Accounts shall be subject to the following special rules:
(1) A Participant's Elective Deferral Account shall at all
times be 100% nonforfeitable.
(2) Except in the case of hardship, as defined in Section
8.14, a Participant's Elective Deferral Account may not
be distributed to a Participant (or Beneficiary) before
the earliest of the Participant's death, disability,
separation from service or attainment of age 59-1/2.
ARTICLE V - DETERMINATION OF VALUE
OF PARTICIPANT'S ACCOUNTS
Section 5.1 Trust Fund and Allocation of Earnings
The Trustee shall maintain or cause to be maintained Accounts which
shall reflect, from time to time, the value of the interest of each
Participant in the resulting from the contributions of the Employer
allocated to each Participant. In this condition the Accounts shall
reflect each Participant's share of interest, dividends, realized and
unrealized gains and income from all sources, less realized and
unrealized losses and expenses (other than those to be borne by the
Employer in accordance with this Plan). Such sum shall be determined as
of the Valuation Date of each Plan Year and, after allocating the (i)
Employer ESOP Contributions, and (ii) Elective Deferral Contributions
for such Plan Year, allocated as a credit or charge to the Account of
each Participant in the same proportion that the balance of the Account
of each Participant as of the date following the last Valuation Date
bears to the total of the balances of the Accounts of all Participants
as of such date; provided, however, that distribution payments made
during, but prior to the Valuation Date shall first be deducted from
such balances.
Section 5.2 Determination of Market Value
The Trustee shall, as provided in the Agreement and Declaration of
Trust, ascertain and certify the fair market value of the Trust Fund as
of the Valuation Date. Such valuation shall include the Employer's
contribution with respect to such Plan Year. Similar valuations shall
be made at such other times as necessary for the purpose of determining
the value of a Participant's Account. In determining the fair market
value of the Fund, the Trustee shall use the Fair Market Value Per Share
of the Employer Stock.
Section 5.3 Diversification of Investments
(a) Each Participant who has attained age 55 and completed
10 Years of Service for participation under the Plan (including
Years of Service under the Plan prior to its conversion to an ESOP)
shall be permitted to direct the Plan Administrator as to the
investment of 25 percent of the value of the Participant's Account
balance but only to the extent such portion exceeds the amount to
which a prior election under this Section 5.3 applied. Such
direction shall be permitted within 90 days after the last day of
each Plan Year during the Participant's Qualified Election Period.
Within 90 days after the close of the last Plan Year in the
Participant's Qualified Election Period, a Participant may direct
the Plan Administrator as to the investment of 50 percent of the
value of his Account balance. Such direction as to the investment
of the Participant's Account balance shall constitute a request to
distribute that portion of the Participant's Account covered by the
election.
(b) A participant's Qualified Election Period shall be the
six Plan Year period beginning on the later of (i) the Plan Year
in which the Participant attains age 55; or (ii) the Plan Year in
which the Participant first becomes qualified under subparagraph
(a) above.
(c) The Participant's direction shall be provided to the
Plan Administrator in writing and shall be effective no later than
180 days after the close of the Plan Year to which the direction
applies to the Participant.
(d) This Section 5.3 shall apply to all Employer Stock,
whenever acquired under the Trust.
Section 5.4. Investment Selection by Participants
(a) Elective Deferral Contributions to the Plan together
with any earnings thereon shall be deposited in the Trust Fund and
held temporarily in a stable income or similar fund designed to
protect principal at a rate of return competitive with money market
funds (the 'Fund") until such monies are used to acquire Employer
Stock.
(b) Once each Plan Year on or about April 15, each
Participant shall be given the right to direct the Trustee in
writing on forms provided by the Plan Administrator not to acquire
Employer Stock with the monies held in the Fund. Such written
direction shall be submitted to the Plan Administrator not less
than fifteen (15) days before the date of purchase of Employer
Stock, unless the Plan Administrator provides otherwise.
(c) The Plan Administrator, in its discretion, may offer to
all Participants additional or different investment categories than
the Fund and may at any time cease to offer such investment
categories as it sees fit.
(d) The Participant's Elective Deferral Account which is
invested in the Fund at the annual purchase date shall be used to
purchase Employer Stock unless otherwise directed by the
Participant, in which case such monies shall continue to be
invested in accordance with paragraph (a), above, until the next
annual purchase of Employer stock.
(e) In the absence of a written direction by a Participant
not to invest such Participant's interest in the Fund in Employer
Stock, the Trustee shall invest such funds in Employer Stock.
ARTICLE VI - RETIREMENT AND OTHER TERMINATION
OF PARTICIPATION; VESTING
Section 6.1 Full Vesting; Retirement, Death or Disability
(a) A Participant shall be one hundred percent (100%) vested
in the portion of his Account attributable to Employer
Contributions upon:
(1) Attaining Normal Retirement Age;
(2) Death; or
(3) Total and Permanent Disability. For this purpose,
Total and Permanent Disability shall mean a physical or
mental condition which totally and permanently prevents
a Participant from rendering further service in a job
classification that is satisfactory to the Employer.
Total and Permanent Disability shall be established by
a medical opinion rendered by a doctor approved by the
Plan Administrator."
(b) A Participant shall at all times be one hundred percent
(100%) vested in the portion of such Participant's Account
attributable to Elective Deferral Contributions.
Section 6.2 Other Termination of Employment; Participant's Vested
Percentage
(a) A Participant who terminates employment on or after
January 1, 1989, with the Employer and with all members of the
Employer's Controlled Group, prior to attaining Normal Retirement
Age (other than by reason of Total and Permanent Disability or
death), shall have his interest in Account in accordance with the
following schedule:
Years of Service Vested Percentage
------------------ ---------------------
Fewer than three years None
3 years but fewer than 4 20%
4 years but fewer than 5 40%
5 years but fewer than 6 60%
6 years but fewer than 7 80%
7 years or more 100%
(b) A Participant who terminated employment prior to January
1, 1989, with the Employer and with all members of the Employer's
Controlled Group, prior to attaining Normal Retirement Age (other
than by reason of total and permanent Disability or death), shall
have his interest in Account determined in accordance with the
following schedule:
Years of Service Vested Percentage
------------------ ---------------------
Fewer than 4 years None
4 years but fewer than 5 40%
5 years but fewer than 6 45%
6 years but fewer than 7 50%
7 years but fewer than 8 60%
8 years but fewer than 9 70%
9 years but fewer than 10 80%
10 years but fewer than 11 90%
11 years or more 100%
(c) Notwithstanding the foregoing, the vested percentage of
a Participant's Account who had been covered under the provisions
of the Plan before the Effective Date, shall not be less than the
vested percentage the Participant would have had if the provisions
of the Plan as in effect immediately prior to the Effective Date
had continued without change.
Section 6.3 Vesting Upon Termination of the Plan
A Participant shall become 100 percent vested in that portion of
his Account attributable to Employer contributions upon termination of
the Plan pursuant to Article XV.
Section 6.4 Forfeiture of Nonvested Benefit
A Forfeiture of a Participant's nonvested benefit shall occur under
the Plan:
(a) As of the last day of the Plan Year in which occurs the
fifth consecutive break in Service for the Participant due to the
termination of employment; or
(b) If earlier than (a), and if applicable; "on the date the
Participant receives a lump sum distribution of the nonforfeitable
percentage of his Account as a result of the Participant's
termination of participation in the Plan, subject to restoration
under Section 8.6. A distribution is deemed to be made due to the
termination of participation in the Plan if it is made no later
than the close of the second Plan Year following the Plan Year in
which such termination of participation occurs.
A Participant who has incurred a Break in Service and who resumes
participation as described in Section 3.3 hereof shall forfeit the
amount of any contribution made on his behalf for the Plan Year which
includes his date of reemployment if he terminates employment prior to
the first anniversary of such date of reemployment.
Section 6.5 Computation of Years of Service and Breaks in Service
For purposes of determining Years of Service and Breaks in Service
under this Article VI, the definitions and rules of this Section 6.5 and
of Sections 6.6 through 6.7 shall be applied.
(a) "Employment Commencement Date" means the date on which
an Employee first performs an Hour of Service as defined in Section
2.20(a).
(b) "Severance from Service Date" means the date on which-
the earlier of the following occurs:
(1) The date the Employee quits, retires, is discharged or
dies; or
(2) The date 12 months after an Employee remains absent
from service with an Employer (with or without
receiving his regular Compensation) for any reason
other than a quit, retirement, discharge or death.
(c) "Period of Service" means a period of time commencing
on an Employee's Employment Commencement Date or Reemployment
Commencement Date, as the case may be, and ending on the Employee's
Severance from Service Date, and shall include past service with
an Employer's predecessor employer if the Employer maintains the
plan of such employer. Period of Service shall include a Period
of Severance of less than one year's duration.
(d) "Period of Severance" means a period of time commencing
on an Employee's Severance from Service Date and ending on the date
on which such Employee again performs an Hour of Service within the
meaning of Section 2.20(a).
(e) "Reemployment Commencement Date" means the date on which
the Employee performs his first Hour of Service (within the meaning
of Section 2.20(a)) after a Period of Severance of at least one
year's duration.
(f) "Year of Service" means the aggregate number of 365-day
periods within an Employee's applicable Period(s) of Service. For
this purpose, and except as provided in Section 6.6 all of an
Employee's nonsuccessive Periods of Service shall be aggregated.
(g) "Break in Service" means a twelve (12) consecutive month
period during which an Employee does not perform an Hour of Service
(as defined in Section 2.20(a) hereof) with an Employer. Breaks
in Service are measured from the Employee's Severance from Service
Date and subsequent anniversaries thereof until the Employee again
performs an Hour of Service (as defined in Section 2.20(a) hereof).
However, see the provisions of Article VII relating to Parental
Absences and their effect on Breaks in Service.
Section 6.6 Years of Service
A Participant shall be credited with all Years of Service except
the following:
(a) Years of Service prior to the Participant incurring five
consecutive Breaks in Service unless:
(1) at the time of the Breaks in Service the Participant
was vested under Section 6.2; or
(2) for nonvested Participants, the aggregate number of
Years of Service prior to the consecutive Breaks in
Service exceeds the Period of Severance; and
(b) Years of Service after five consecutive Breaks in
Service shall not be taken into account for purposes of determining
a Participant's vested percentage in his Account prior to the
consecutive Breaks in Service. Any years prior to the five
consecutive Breaks in Service shall not be counted until the
Participant completes a Year of Service after his date of
reemployment.
Section 6.7 Forfeiture Due to Discharge of Employment for Cause
(a) Notwithstanding anything herein to the contrary, in the
event a Participant terminates employment with the Employer prior
to his completion of seven (7) Years of Service for Employee
misconduct, such Participant shall have his interest in Account
determined in accordance with the following schedule:
Years of Service Vested Percentage
------------------ ---------------------
Fewer than 6 years 0%
6 years but fewer than 7 80%
7 years or more 100%
Such vesting shall be applicable for Plan Years beginning on or
after January 1, 1989 but only with respect to Participants terminating
employment on or after January 1, 1989.
(b) A Participant who, prior to January 1, 1989, terminated
his employment with the Employer due to Employee misconduct, shall
have his vested interest in Account, determined in accordance with
the following schedule:
Years of Service Vested Percentage
------------------ ---------------------
10 years but fewer than 11 0%
11 years or more 100%
(c) For purposes of this Section, Employee misconduct is any
misdemeanor, felony or any other act evidencing fraud or dishonesty
on the part of the Employee. Any portion of a Participant's
Account forfeited for cause shall be available for reallocation to
the Accounts of the remaining Participants pursuant to Section 4.4
as of the close of the Plan Year in which such Forfeiture occurs.
(d) This Section 6.7 shall not apply to a Participant if (i)
such Participant has attained Normal Retirement Age; (H) the Top-Heavy
Plan vesting provisions of Section 9.5 of this Plan apply to
such Participant; (iii) the Plan has been totally or partially
terminated; or (iv) there has been a complete discontinuance of
contributions under the Plan.
ARTICLE VII - PARENTAL ABSENCE PROVISIONS
Section 7.1 Effective Date of Article VII
The provisions of this Article VII shall be effective with respect
to any Parental Absence which commences on or after January 1, 1985.
Section 7.2 Hours of Service Credited for Parental Absence
Solely for the purposes of determining whether a Break in Service
has occurred, the Plan Administrator shall credit to an Employee on
Parental Absence:
(a) the Hours of Service which otherwise would normally have
been credited to such individual but for such absence; or
(b) if the Plan Administrator is unable to determine the
Hours of Service pursuant to paragraph (a), eight Hours of Service
per normal work day.
The total number of Hours of Service credited under this Section 7.2 by
reason of any Parental Absence shall not exceed 501.
Section 7.3 Plan Years to Which Hours of Service are Credited
The Hours of Service credited under Section 7.2 shall be treated
as Hours of Service in the Plan Year:
(a) in which the Parental Absence begins, if a Participant
would be prevented from incurring a Break in Service in such year
solely because of the Hours of Service credited under Section 7.2;
or
(b) in any other case, in the Plan Year immediately
following the Plan Year in which the Parental Absence began.
A Participant shall be credited with Hours of Service in only one
of the Plan Years noted above.
Section 7.4 - Information to Plan Administrator
No Hours of Service credit shall be given under Section 7.2 unless
the Employee furnishes to the Plan Administrator such timely information
as the Plan Administrator may reasonably require in order to establish
that the absence from work was a Parental Absence as defined in Section
2.24, and the number of days for which there was such an absence.
ARTICLE VIII - DISTRIBUTIONS
Section 8.1 Time of Distribution
(a) Normal Time for Distribution. Upon a Participant's
retirement or other termination of employment and upon the
direction of the Plan Administrator, the Trustee shall, after the
value of the Participant's Account has been determined in
accordance with Article V, make or commence distribution of such
Account. Upon the request of a Participant (which shall be treated
as consent under Section 8.1(b)) distribution of a Participant's
Account attributable to Employer Stock acquired on or after January
1, 1987, shall be commenced as follows:
(i) If the Participant separates from service by reason of
the attainment of Normal Retirement Age, death, or
disability, the distribution of the Participant's
Account balance will begin not later than one year
after the end of the Plan Year in which such event
occurs.
(ii) If the Participant separates from service for any
reason other than those enumerated in paragraph (i)
above, and is not reemployed by the Employer at the end
of the fifth Plan Year following the Plan Year of such
separation from service, distribution of the
Participant's Account balance will begin not later than
one year after the end of the fifth Plan Year following
the Plan Year in which the Participant separated from
service.
Notwithstanding anything contained in this Article VIII
to the contrary, any Participant who is eligible to
receive a distribution and who requests an immediate
distribution of such Participant's Elective Deferral
Account in the form of cash, shall receive a
distribution of such Elective Deferral Account in cash
as soon as practicable following such request.
Amounts to be distributed under this Section 8.1(a)(ii)
prior to the end of the fifth Plan Year following the
Plan Year in which the Participant separated from
service may only be distributed in the form of cash.
Any request by a Participant that such distribution be
made in the form of Employer Stock will be treated as
an election to have such distribution made at the
latest date permitted under this Section 8.1(a)(ii).
The Plan Administrator shall make distributions prior
to such fifth Plan Year if a written request for an
earlier distribution is made by a Participant. Such
distribution of the Participant's vested Account
balance shall be made following the end of each or any
of the five Plan Years next following the Plan Year
during which the Participant's employment with the
Employer terminates.
The amount of any such earlier distribution shall be
made in an amount up to the full amount of the
Participant's vested Account balance but not in excess
of a maximum distribution amount as determined by the
Plan Administrator for the Plan Year in which the
request is made. The amount determined by the Plan
Administrator shall be determined for each Plan Year as
of the last day of the Plan Year, and may be changed
from year to year.
(iii) If any portion of a Participant's Account balance
includes Employer Stock which was acquired with
the proceeds of an Acquisition Loan that has not
been repaid in full, then distribution of such
Employer Stock need not commence until the close
of the Plan Year following the Plan, Year in
which the Acquisition Loan is fully repaid.
(b) Consent to Distribution Prior to Normal Retirement Age
(1) If a Participant terminates his employment with the
Employer and the value of his vested Account balance is
not greater than $3,500, the Plan Administrator shall
direct the distribution of such vested Account balance
in a lump sum without the Participant's consent.
(2) If the value of the Participant's vested Account
balance is greater than $3,500, the Plan Administrator
may direct the distribution of such vested Account
balance only with the written consent of the
Participant. In the event of the Participant's death,
the Participant's surviving spouse, if a Beneficiary,
must consent in writing to such distribution.
(c) Required Distributions Before Death
(1) General Rule. Effective January 1, 1989, distribution
of Account balances must be made or commenced to the
Participant not later than April 1 of the calendar year
following the calendar year in which the Participant
attains age 70 1/2, regardless of whether the Participant
has actually retired.
(2) 1988 Terminations. Distributions to Participants who
were not five percent (5%) owners, had not retired by
January 1, 1989, and who attained age 70 1/2 during 1988
must be made or commenced by April 1, 1990.
(3) Transition Rule. Distributions to Participants who
were not five percent (5%) owners as defined in Code
Section 416(i)(1)(B) and have attained age 70 1/2 before
January 1, 1988, must be made or commenced by April 1
of the calendar year following the calendar year in
which the Participant attains age 70 1/2, or the calendar
year in which the Participant retires, if later.
(d) Except as limited by Section 8.1(a) and in the absence
of a request for distribution, the Plan Administrator shall direct
the Trustee to make or commence distribution on or before the 60th
day following the end of the Plan Year in which occurs the latest
of the following events:
(1) the date on which the Participant attains Normal
Retirement Age; or
(2) the date on which the Participant terminates his
employment with the Employer.
Section 8.2 Manner of Distribution
(a) The Plan Administrator, pursuant to any election made
by a Participant (or Beneficiary) shall direct the Trustee to make
distribution of the Participant's Account to him or to his
Beneficiary or Beneficiaries, as the case may be, in one or more
of the following methods:
(i) In one (1) lump sum; or
(ii) In periodic payments of substantially equal amounts,
payable not less frequently than annually for a period
not extending beyond the life expectancy of the
Participant or the joint life expectancies of the
Participant and a Designated Beneficiary. (Designated
Beneficiary shall mean any individual designated as a
Beneficiary by a Participant.)
(b) Notwithstanding the above, the Plan Administrator may
direct the Trustee to distribute to a Participant or his
Beneficiary, Employer Stock in substantially equal monthly,
quarterly, semiannual, or annual installments over a period of not
longer than five (5) years. In the case of a Participant with an
account balance in the Plan in excess of $500,000, the five (5)
year period shall be extended one (1) additional year (but not more
than five (5) additional years) for each $100,000 or fraction
thereof by which such balance exceeds $500,000. The foregoing
dollar limits shall be adjusted to reflect cost of living increases
as announced by the Secretary of Treasury.
(c) In no event shall the amount paid to the Participant and
his Designated Beneficiary exceed the amount of his Account.
(d) Periodic distributions to a Participant who has attained
age 70-1/2, must equal or exceed an amount determined in accordance
with the rules provided in Prop. Treas. Reg. Section 1.401(a)(9)-l,
whether in proposed or final form.
Section 8.3 Form of Distribution
(a) Distribution of a Participant's Account shall be made
in whole shares of Employer Stock valued at their Fair Market Value
Per Share as of the date set forth in Section 5.2, cash, or a
combination of both Balances representing fractional shares will
be distributed in cash. In the event Employer Stock is not
available for distribution on the date a distribution is due
hereunder, the Trustee shall hold such amount until Employer Stock
is acquired. Notwithstanding the preceding, the Plan Administrator
may distribute the amount of the Participant's Account in cash,
provided that, in such case, the Participant shall have the right
to demand in writing that such distribution be in the form of
Employer Stock.
(b) If the Employer's articles or bylaws restrict ownership
of substantially all shares of Employer Stock to Employees and the
Trust, the distribution of a Participant's Account may be made
entirely in cash without granting the Participant the right to
demand distribution in shares of Employer Stock.
Section 8.4 Required Distribution After Death
If a Participant dies prior to distribution of his entire vested
Account balance, then distribution thereof after the death of the
Participant must be made no later than and in accordance with the
following:
(a) If, prior to the death of the Participant, the
distribution has commenced, the remaining portion of the Account
balance shall be distributed at least as rapidly as under the
method of distribution being used as of the date of death.
(b) If, prior to the death of the Participant, the
distribution has not commenced, the entire Account balance of the
Participant must be distributed by December 31 of the fifth
calendar year after the death of the Participant, except as
provided in subparagraph (c) hereinbelow.
(c) Restrictions of subparagraph (b) shall not apply to any
portion of a Participant's Account balance which is payable to or
for the benefit of a designated Beneficiary if:
(1) Such a portion will be distributed over the life of
such designated Beneficiary or over a period certain
not extending beyond the Beneficiary's life expectancy,
and the distribution commences on or before December 31
of the calendar year immediately following the calendar
year of the date of the Participant's death; or
(2) If the Beneficiary is the spouse of the Participant,
distributions are not required to begin earlier than
the later of (i) December 31 of the calendar year
immediately following the calendar year in which the
Participant died, or (ii) December 31 of the calendar
year in which the Participant would have attained age
70-1/2. If the surviving spouse dies before the
distributions to such spouse begin, then the 5-year
distribution requirement of subparagraph (b) shall
apply as if the spouse were the Participant.
Section 8.5 Put Option
(a) Employer Stock distributed pursuant to Section 8.3
hereof, shall be subject to a Put Option for two separate periods
of time permitting the Participant, his donees or beneficiaries to
sell such stock to the Employer. The first option period shall be
a period of sixty days commencing on the date the stock subject to
the option is distributed. The second option period shall be a
period of sky days beginning on the date a Participant is notified
of the Fair Market Value Per Share in the next Plan Year. The
Participant shall be given written notice of the new Fair Market
Value Per Share and of his option to have the Employer repurchase
his stock at the new Fair Market Value Per Share.
(b) The selling price of Employer Stock sold pursuant to
such Put Option shall be the Fair Market Value as of the last
valuation under Section 5.2.
(c) If the Employer Stock was distributed to the Participant
as part of a lump sum distribution, then payment of the purchase
price under the Put Option may be deferred if the following
conditions are satisfied:
(1) The amount deferred is adequately secured;
(2) A reasonable rate of interest is charged on the unpaid
principal balance; and
(3) Periodic payments are made at least annually in
substantially equal installments over a period not to
exceed 5 years from the date the Put Option is
exercised, provided, the first such installment is paid
within 30 days of said exercise date.
In all other events the Employer Stock shall be repurchased no
later than 30 days after the Participant exercises the Put Option.
(d) In the event that the Employer Stock subject to the Put
Option was purchased by the Trustee with the proceeds of a loan,
the period specified in subparagraph (c)(3) above may be extended
to a date no later than the earlier of 10 years from the date the
Put Option is exercised or the date the proceeds of the loan used
by the Trust to acquire the stock subject to the Put Option are
entirely repaid
(e) Notwithstanding the preceding, the Trustee may, but
shall not be required to, assume the rights and obligations of the
Employer under the Put Option.
Section 8.6 Right of First Refusal
(a) If any Participant, his Beneficiary or any other person
to whom shares of employer Stock are distributed from the Plan
(the "Selling Participant") shall, at any time, desire to sell
some or all of such shares (the "Offered Shares") to a third party
(the "Third Party"), the Selling Participant shall give written
notice of such desire to the Employer and the Administrator, which
notice shall contain the number of shares offered for sale, the
proposed terms of the sale and the names and addresses of both the
Selling Participant and Third party. Both the Trust Fund and the
Employer shall each have the right of first refusal for a period
of fourteen (14) days from the date the Selling Participant gives
such written notice to the Employer and the Administrator (such
fourteen (14) day period to run concurrently against the Trust Fund
and the Employer) to acquire the Offered Shares. As between the
Trust Fund and the Employer, the Trust Fund shall have priority to
acquire the shares pursuant to the right of first refusal. The
selling price and terms shall be the same as offered by the Third
Party.
(b) If the Trust Fund and the Employer do not exercise their
right of first refusal within the required fourteen (14) day period
provided above, the Selling Participant shall have the right, at
any time following the expiration of such fourteen (14) day period,
to dispose of the Offered Shares to the Third party; provided,
however, that (i) no disposition shall be made to the Third Party
on terms more favorable to the Third Party than those set forth in
the written notice delivered by the Selling Participant above, and
(ii) if such disposition shall not be made to a third party on the
terms offered to the Employer and the Trust Fund, the offered
Shares shall again be subject to the right of first refusal set
forth above.
(c) The closing pursuant to the exercise of the right of
first refusal under Section 8.6(a) above shall take place at such
place agreed upon between the Administrator and the Selling
Participant, but not later than ten (10) days after the Employer
or the Trust Fund shall have notified the Selling Participant of
the exercise of the right of first refusal. At such closing, the
Selling Participant shall deliver certificates representing the
Offered Shares duly endorsed in blank for transfer, or with stock
powers attached duly executed in blank with all required transfer
tax stamps attached or provided for, and the Employer or the Trust
Fund shall deliver the purchase price, or an appropriate portion
thereof to the Selling Participant.
(d) Except as provided in this paragraph (d), no Employer
Stock acquired with the proceeds of an Acquisition Loan shall be
subject to a right of first refusal. Employer Stock, which is
acquired with the proceeds of any Acquisition Loan which is
distributed to a Participant or Beneficiary shall be subject to the
right of first refusal, provided for in paragraph (a) of this
Section only so long as the Employer Stock is not publicly traded.
In addition, in the case of Employer Stock which was acquired with
the proceeds of an Acquisition Loan, the selling price and other
terms under the right must not be less favorable to the seller than
the greater of the value of the security determined under
Regulation 54.4975-11(d)(5), or the purchase price and other terms
offered by a buyer (other than the Employer or the Trust Fund),
making a good faith offer to purchase the security. The right of
first refusal must lapse no later than fourteen (14) days after the
security holder gives notice to the holder of the right that an
offer by a third party to purchase the security has been made. The
right of first refusal shall comply with the provisions of
paragraphs (a), (b) and (c) of this Section, except to the extent
those provisions may conflict with the provisions of this
paragraph.
(e) Certificates for shares distributed pursuant to the Plan
shall contain the following legend:
"The shares represented by this certificate are
transferable only upon compliance with the terms of The
G. R. HERBERGER'S, INC. EMPLOYEE STOCK OWNERSHIP PLAN
(the "Plan") effective as of December 31, 1989, which
grants to G. R. Herberger's, Inc. and the Plan a right
of first refusal, a copy of said Plan being on file in
the office of G. R. Herberger's, Inc."
Section 8.7 Distribution Prior to a Five Consecutive Breaks in
Service, Restoration of Forfeited Account
(a) Conditions for Restoration. If a terminated Participant
who incurred a Forfeiture under Section 6.4(b) is reemployed by the
Employer prior to incurring five (5) consecutive one-year Breaks
in Service and the reemployed Participant repays within five (5)
years of his date of reemployment the amount of the distribution,
if any, he received at his previous termination of employment, then
the Plan Administrator shall restore the Participant's Account with
the amount of the Forfeiture and the repaid amount.
(b) Time and Method of Restoration. If the Participant has
the right to make a repayment of his lump sum distribution under
Section 8.7(a), then the Plan Administrator shall restore the
Participant's Account as of the last day of the Plan Year in which
the repayment is made. To restore the Participant's Account, the
Plan Administrator, to the extent necessary, shalt allocate to the
Participant's Account first, the amount, if any of Participant
Forfeitures for the Plan Year; second, the amount of any special
Employer contribution made for the purpose of restoring a
Participant's Account; and third, the amount, if any of the Trust
Fund net income or gain for the Plan Year. To the extent the
amounts available for restoration under the immediately preceding
sentence are insufficient to make the required restoration, the
Employer shall contribute, without regard to any requirement or
condition of Sections 4.1 or 4.8, such additional amount as is
necessary to enable the Plan Administrator to make the required
restoration.
(c) Segregated Account for Repaid Amount. Until the Plan
Administrator restores the Participant's Account balance under
Section 8.7(b), the Trustee shall invest the amount the Participant
has repaid in a segregated account maintained solely for that
Participant. Until commingled with the balance of the Trust Fund
on the date the Plan Administrator restores the Participant's
Account, the Participant's segregated account shall remain a part
of the Trust, but it alone shall share in any income it earns and
it alone shall bear any expense or loss it incurs. Unless the
repayment qualifies as a Rollover contribution, the Plan
Administrator shall direct the Trustee to repay to the Participant
as soon as is administratively practicable, the fun amount of the
Participant's segregated account if the Plan Administrator
determines that one or more of the conditions preventing repayment
and restoration under Section 8.7(a) is applicable.
Section 8.8 Reemployment After Distribution Has Been Made or Commenced
In the event that a former Participant is reemployed by the
Employer after distribution to him has been made or commenced, the
following rules shall apply:
(a) Further distribution of his Account shall be suspended
and the undistributed remainder shall continue to be held in, the
Trust Fund, it being the intent hereof that no distribution shall
be made while a Participant is employed with the Employer.
(b) Such former Participant shall again become a Participant
in the Plan upon satisfaction of the requirements set forth in
Section 3.3.
Section 8.9 Designation of Beneficiaries
(a) Each Participant may designate on forms to be furnished
by the Plan Administrator, a Beneficiary or Beneficiaries to
receive his Account in the event of his death and may change or
revoke any such designation from time to time. No such
designation, change or revocation shall be effective unless
executed by the Participant and delivered to the Plan Administrator
during the Participant's lifetime. In the event that a Participant
shall have failed to designate a Beneficiary, or Beneficiaries, or
the Beneficiary or Beneficiaries, as the case may be, shall have
failed to survive the Participant, the Participant's Account shall
be payable to the first class of the following classes of
Beneficiaries then surviving and, except in the case of his
surviving issue, in equal shares if there are then more than one
in each class:
(1) Participant's surviving spouse,
(2) Participant's surviving issue per stirpes and not per
capita,
(3) Participant's surviving parents,
(4) Participant's surviving brothers and sisters,
(5) Representatives of the Participant's estate.
For this purpose, "per stirpes" means in equal shares among living
children and the issue of deceased children, the latter taking by
right of representation, and "issue" means all persons who are
descended from the person referred to, either by legitimate birth
or legal adoption.
(b) If a Participant designates a Beneficiary other than
such Participant's spouse to receive his Account in the event of
his death, such designation shall not take effect unless:
(1) The Participant's spouse consents in writing to the
election, and such consent acknowledges the effect of
such election and is witnessed by a Plan representative
or a Notary Public; or
(2) It is established by the Participant in writing to the
satisfaction of the Plan Administrator that the consent
required under subparagraph (1) may not be obtained
because there is no spouse; because the spouse cannot
be located; or because of such other circumstances
provided by regulations issued under the Code.
Any consent by a spouse (or establishment that the consent of a
spouse may not be obtained) under subparagraph (2) above shall be
effective only with respect to such spouse.
Section 8.10 Minors and Persons Under Intel Disability
If any person to whom a benefit is, payable hereunder is a minor,
or if the Plan Administrator determines that any person to whom such
benefit is payable is incompetent by reason of physical or mental
disability, the Trustee shall have power to cause the payment becoming
due to such person to be made to another for his benefit. Any payment
made pursuant to such power shall, as to such payment operate as a
complete discharge of the Trustee, provided that due care is exercised
in selecting the recipient.
Section 8.11 Interest of Persons Who Cannot Be Located
In the event that a Participant or Beneficiary who has been
determined to be entitled to a distribution hereunder cannot be located
by the Trustee after reasonable, good faith effort, said funds shall be
reallocated among the Participants as a Forfeiture. Thereafter if the
Participant or Beneficiary entitled to the vested Account balance is
located or claims the vested Account balance, such vested Account
balance shall be reinstated from Forfeitures for such Plan Year or from
any special Employer contributions made for the purpose of restoring a
Participant's Account. Such Account balance shall then be distributed
to the Participant or Beneficiary in accordance with this Article VIII.
Section 8.12 Non-alienation of Benefits
Except in the case of Qualified Domestic Relations Orders, pursuant
to Article XII hereof, benefits payable under the provisions of this
Plan shall not be subject, in any manner, to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution or levy of any kind either voluntary or involuntary, prior to
actually being received by the person entitled to the benefit under the
terms of the Plan and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any
right to benefits payable hereunder shall be void. The Trust shall not
in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to benefits
hereunder.
Section 8.13 Distribution Upon Attaining Age 59-1/2
(a) A Participant who has not terminated employment but who
has attained age 59-1/2 may elect to withdraw all or any portion
of his vested account balance as of the end of a Plan Year.
(b) If a Participant elects to withdraw all or part of his
vested Account balance by making a written request for a
distribution, then a distribution of the Participants' vested
Account balance shall be made within one year after the end of the
Plan Year to which the election applies. The amount of such
distribution shall be equal to the requested amount, but not more
than the greater of (i) an amount determined by the Plan
Administrator or (ii) the maximum annual distribution allowed under
Section 498OA(c)(1) for non-lump sum distributions without
incurring an excise tax, for the Plan Year in which the request is
made. The amount to be determined by the Plan Administrator shall
be determined for each Plan Year as of the last day of the Plan
Year, and may be changed from year to year.
Section 8.14 Distribution Due to Hardship
(a) At any time, the Plan Administrator, in accordance with
regulations and/or rules adopted and implemented by it in a
uniform, nondiscriminatory manner, may allow a Participant to
withdraw all or a portion of the Participant's Elective Deferral
Account attributable solely to the Participant's Elective Deferral
Contributions (without any income attributable thereto) after
receiving a written request from a Participant, but only if such
withdrawal is made necessary by reason of a Participant's financial
hardship.
(b) For this purpose, "financial hardship" shall mean such
circumstances of a Participant which create an immediate and heavy
financial need for which funds are not reasonably available from
other resources of the Participant. The Plan Administrator shall,
in its sole discretion, determine all requests for a hardship
distribution hereunder in a uniform and nondiscriminatory manner.
A distribution under this Section 8.14 shall be permitted only if
the distributions is on account of any of the following
circumstances:
(1) Accident or illness of the Participant, the
Participant's spouse or any dependents of the
Participant (as defined in Code Section 152), but only
to the extent necessary to defray expenses of medical
and/or hospital care, described in Code Section 213(d),
reasonably attributable to such accident or illness or
M health or to preserve the health of such Participant
or such dependent;
(2) The payment of tuition and related educational fees for
the next twelve (12) months of post-secondary education
for the Participant, the Participant's spouse or
children, or any dependent of the Participant (as
defined in Code Section 152);
(3) The cost of purchase or construction of the principal
residence of the Participant, not including making
mortgage payments;
(4) The cost of preventing eviction or mortgage foreclosure
on the principal residence of the Participant;
(5) Such distributions as specifically permitted under
regulations issued by the IRS; or
(6) Funeral expenses for a member of the Participant's
family.
(c) No more shall be distributed than is actually required
to meet the hardship, plus the amount necessary to pay any federal,
state or local income taxes or penalties resulting from the
distribution. For purposes of this requirement, no distribution
shall be made under this Section 8.14, unless the Plan
Administrator determines, upon the Participant's representation and
such other facts as are known to the Administrator, that all of the
following conditions are satisfied:
(1) The distribution does not exceed the amount of the
need, plus the "gross up" for federal, state or local
taxes and penalties anticipated on the distribution;
(2) Hardship distribution aside, the Employee has obtained
all distributions and all nontaxable loans currently
available under all plans maintained by the Employer;
(3) Any elective deferral agreement(s), whether under this
Plan or any other plan maintained by the Employer, of
any Participant who obtains a hardship distribution,
shall be suspended for at least twelve (12) months
after receipt of the hardship distribution; and
(4) Elective Deferral Contributions of such Participant for
the taxable year immediately following the taxable year
of the hardship distribution may not exceed the
applicable limit on elective deferrals under Code
Section 402(g), minus the Participant's Elective
Deferral Contributions for the taxable year of the
hardship distribution. (For purposes of this rule,
Elective Deferral Contributions shall include such
elective deferrals under all plans maintained by the
Employer.)
Notwithstanding the suspension from participation as set out above,
an Employee will still be considered an eligible Employee for
purposes of Section 4.13.
(d) The Plan Administrator may rely upon a notarized
affidavit of a Participant which states that he has a financial
need (specific as to the nature and amount) and that he has no
other funds which are reasonably suitable from other sources,
except to the extent that the persons to whom the Plan
Administrator has designated the responsibility administering the
provision have knowledge that such representations are not true.
(e) Hardship distributions shall be treated and reported as
taxable distributions for the Participant's taxable year during
which the withdrawal occurs.
(f) Except as otherwise provided in this Section 8.14,
Elective Deferrals shall be distributed in accordance with the
other provisions of Article VIII hereof.
Section 8.15 Direct Rollovers
(a) Election. This Section 8.15 applies to distributions
made on or after January 1, 1993. Notwithstanding any provision
of this Plan to the contrary that would otherwise limit a
"distributee's" election under this Section, a "distributes" 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 "distributes" in a "direct rollover."
(b) Administration. The election in Section 8.15(a) shall
be subject to such reasonable procedures and requirements as may
be prescribed by the Plan Administrator.
(c) Definitions. For purposes of this Section 8.15, the
following terms are defined as follows:
(1) "Eligible rollover distribution:" An eligible rollover
distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except
that an eligible rollover distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributes or the joint lives (or
joint life expectancies) of the distributes and the
distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution
to the extent such distribution is required under Code
Section 401(a)(9); and 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).
(2) "Eligible retirement plan:" An eligible retirement
plan is an individual retirement account described in
Code Section 408(a); an individual retirement annuity
described in Code Section 408(b); an annuity plan
described in Section 403(a) of the Code; or a qualified
trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.
(3) "Distributee:" A distributee includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are
distributees with regard to the interest of the spouse
or former spouse.
(4) "Direct rollover:" A direct rollover is a payment by
the Plan to the eligible retirement plan specified by
the distributee.
ARTICLE IX - TOP-HEAVY PLAN PROVISIONS
Section 9.1 Definitions
As used in this Article IX the following terms shall mean:
(a) "Top-heavy" Plan. The Plan will be Top-Heavy if, as of
the Determination Date for such Plan Year:
(1) The aggregate of the Account(s) of Key Employees under
the Plan exceeds sixty percent (60%) of the aggregate
of the Accounts of all Participants under the Plan,
unless the Plan is part of an Aggregation Group which
is not Top-Heavy; or
(2) the Plan is part of an Aggregation Group which is Top-Heavy.
For purposes of determining whether on each Determination Date the
Plan is a Top-Heavy Plan, the Accounts of Non-Key Employees who
during any prior Plan Year were Key Employees shall be disregarded.
If an Employee has not performed any services for the
Employer at any time during the five year period ending on the
Determination Date, the Account balance of such Employee shall be
disregarded.
(b) "Aggregation Group"
(1) A required Aggregation Group consists of the following
plans:
(i) Each plan of an Employer in which a Key Employee
is a participant in the plan year containing the
Determination Date, or any of the four preceding
plan years; and
(ii) Each plan of an Employer which enables a plan
described in clause (i) to meet the requirements
of Code Sections 401(a)(4) or 410.
(2) A permissive Aggregation Group consists of the
following plans:
(i) Any plan included in (b)(1), and
(ii) Any other plan designated by an Employer provided
that by including such plan, the Aggregation
Group would continue to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
(c) Top-heavy Aggregation Group. An Aggregation Group is
Top-Heavy if the sum of:
(1) the present value of the cumulative accrued benefits
for Key Employees under all defined, benefit plans
included in such group, and
(2) the aggregate of the accounts of Key Employees under
all defined contribution plans included, in such group,
exceeds sixty percent (60%) of a similar sum determined for all
Employees.
(d) A "Key Employee" is any Employee or former Employee
(including a Beneficiary of such Employee) who at any time during
the Plan Year or any of the four preceding Plan Years is:
(1) an officer of the Employer with annual compensation
greater than fifty percent (50%) of the dollar limit in
effect under Section 415(b)(1)(A) of the Code for such
Plan year (as adjusted for cost of living increases),
provided that no more than fifty employees, (or if
less, the greater of three Employees) or ten percent of
all Employees shall be treated as officers;
(2) one of the ten Employees who have annual compensation
from the Employer greater than the limitation in effect
under Section 415(c)(1)(A) of the Code for such Plan
Year (as adjusted for cost of living increases) and who
owns one of the largest interests (which interest is
more than a one-half percent (.05%) interest) in the
Employer;
(3) a five percent (5%) owner of the Employer; or
(4) a one percent (1%) owner of the Employer who has an
annual compensation of more than $150,000.00;
The constructive ownership rules of Section 318 of the Code
(substituting "5 percent" for "50 percent" in subparagraph (C) of
Section 318(a)(2)), shall be applicable to (2), (3) and (4) above. For
purposes of subparagraph (2), if two Employees have the same interest in
the Employer, the Employee having greater annual compensation from the
Employer shall be treated as having a larger interest.
The Plan Administrator will make the determination of who is a Key
Employee in accordance with Section 416(i)(1) of the Code and the
regulations issued thereunder, which this Plan hereby incorporates by
reference.
(e) A "Non-Key Employee" is an Employee who is not a Key
Employee, and includes the Beneficiary of such Employee.
(f) The "Determination Date," with respect to any Plan Year
commencing on or after January 1, 1984, means the last day of the
preceding Plan Year. In the case of a new Plan, the Determination
Date shall be the last day of the first Plan Year.
(g) The "Valuation Date" is the Determination Date as of
which account balances are valued for purposes of calculating the
top-heavy ratio.
(h) "Account" of a Participant, with respect to the Plan,
or (if applicable) the Aggregation Group of which the Plan is a
part, means as of any Determination Date:
(1) the Account balance(s) of such Participant; plus
(2) the contributions due as of the Determination Date;
plus
(3) the aggregate distributions made from the plan(s) to
such Participant within five (5) years thereof; less
(4) any rollover amount contributed to this Plan by a
Participant after December 31, 1983, but only to the
extent permitted by regulations issued under Section
416(i)(4)(A) of the Code.
Section 9.2 Determination of Top-Heavy
The Plan Administrator shall determine on each Determination Date
whether the Plan is Top-Heavy. In making its determination, the Plan
Administrator shall include all plans of a required Aggregation Group
and any plans of the permissive Aggregation Group it determines to be
appropriate for inclusion. The Determination of Account balances and
the present value of accrued benefits is made separately for each plan
and then the results of these determinations are aggregated by adding
together the results for each plan as of the Determination Date for such
plans that fall within the same calendar years. For purposes of
determining whether the Plan is Top Heavy, if the Employer is a member
of a Controlled Group, then all employees of the Controlled Group shall
be treated as Employees of the Employer and all qualified plans
maintained by the Controlled Group shall be treated as maintained by the
Employer.
Section 9.3 Minimum Contribution
For Plan Years during which the Plan is determined to be Top-Heavy,
allocation of the Employer contributions, if any, shall be subject to
the following rules:
(a) Each Participant employed on the last day of the Plan
Year shall receive a minimum allocation of the Employer
contributions to his Account of not less than three percent (3%)
of the Participant's compensation (within the meaning of Section
415 of the Code and regulations issued thereunder), whether or not
such Participant had sufficient Hours of Service to entitle such
Participant to any allocation provided, however, that such minimum
allocation shall not exceed the highest percentage of Employer
contributions allocated to any Key Employee for such Plan Year.
(b) Any allocation made hereunder shall be offset by any
Employer contribution allocation made to the Participant's account
in another qualified plan maintained by the Employer which is in
an Aggregation Group with this Plan.
(c) After the satisfaction of the minimum allocation rule
of subsection (a), any remaining Employer contributions shall be
allocated to Participants' Accounts in accordance with Section 4.3.
Section 9.4 Limitation on Compensation Taken Into Account
Prior to January 1, 1989, for any Plan Year during which the Plan
is Top-Heavy, the Plan shall not for any purposes take into account
Compensation for any Participant in excess of $200,000 or such greater
amount announced by the Secretary of the Treasury to reflect cost-of-living
increases.
Section 9.5 Vesting for Top-Heavy Plan
(a) Commencing on the first day of any Plan Year for which
the Plan is determined to be Top-Heavy, the following vesting
schedule shall be substituted for the vesting schedule of Section
6.2 and Section 6.7 of this Plan:
Years of Service
with Employer Vested Percentage
------------------ ---------------------
Fewer than 2 years None
2 years but fewer than 3 20%
3 years but fewer than 4 40%
4 years but fewer than 5 60%
5 years but fewer than 6 80%
6 years or more 100%
(b) All Years of Service shall be calculated without regard
to whether the Plan was Top-Heavy during the applicable Plan Year.
(c) If the Plan becomes Top-Heavy and thereafter ceases to
be Top-Heavy, the foregoing vesting schedule shall continue to
apply in determining the nonforfeitable interest of any Participant
who had at least three (3) Years of Service of the last day of the
Plan Year in which the Plan was Top-Heavy. For other Participants,
the above schedule shall apply only to their Account as of the last
day of the last Plan Year in which the Plan was Top-Heavy.
Section 9.6 Combined Plan Limitations
For any Plan Year during which the Plan is Top-Heavy, the dollar
limitation percentages in the Defined Benefit Plan fraction and Defined
Contribution Plan fraction of Section 4.7 shall be one hundred percent
(100%) rather than one hundred twenty-five percent (125%).
This Section 9.6 shall not be effective and the limitation
percentages shall remain at 125% if the Plan would satisfy Section 9.3
if "four percent (4%)" were substituted for "three percent (3%)"
therein, and the Plan, or Aggregation Group of which the Plan is a part,
would not be Top-Heavy under Section 9.1(a) or 9.1(c), as applicable, if
"ninety percent (90%)" were substituted for "sixty percent (60%)"
therein.
ARTICLE X - PLAN ADMINISTRATION
Section 10.1 Employer Responsibility
The Employer, or if there is more than one Employer, the Sponsor
shall be the Plan Administrator.
Section 10.2 Powers and Duties of the Plan Administrator
(a) The Plan Administrator shall be responsible for and
shall control and manage the operation and administration of the
Plan.
(b) The Plan Administrator shall administer the Plan in
accordance with its terms and shall have all powers necessary to
carry out the provisions of the Plan.
(c) The Plan Administrator shall direct-the Trustee
concerning all payments which shall be made out of the Trust
pursuant to the Plan.
(d) At the end of each Plan Year the Employer shall submit
to the Plan Administrator the names of all Participants and the
amount of contribution to be made by the Employer. The Plan
Administrator shall then allocate the Employer contribution to all
eligible Participants and shall transmit this information to the
Trustee.
(e) The Plan Administrator shall interpret the Plan and
shall determine all questions arising in the administration,
interpretation, and application of the Plan, including but not
limited to questions of eligibility and the status and rights of
Participants, Beneficiaries and other persons. Any such
determination by the Plan Administrator shall be made in its sole
discretion and shall be presumptively conclusive and binding on any
persons. The regularly kept records of the Employer shall be
conclusive and binding upon all persons with respect to an
Employee's Hours of Service, date and length of employment, time
and amount of Compensation and the manner of payment thereof, type
and length of any absence from work and all other matters contained
therein relating to Employees.
(f) The Plan Administrator may require each Participant and
each Beneficiary of a deceased Participant to furnish evidence,
data or information as the Plan Administrator considers necessary
or desirable for purposes of administering the Plan, including his
post office address and any change in post office address.
(g) AU rules and determinations of the Plan Administrator
shall be uniformly and consistently applied to all persons in
similar circumstances.
(h) The Plan Administrator may appoint accountants, counsel,
specialists, and other persons as it deems necessary or desirable
in connection with the administration of this Plan. The Plan
Administrator shall be entitled to rely conclusively upon, and
shall be fully protected in any action taken by it in good faith
in relying upon, any opinions or reports which shall be furnished
to it by any such accountant, counsel, specialist or other person.
Section 10.3 Records and Reports of the Plan Administrator
The Plan Administrator shall keep a record of all its proceedings
and acts and shall keep all such books of account, records, and other
data as may be necessary for proper administration of the Plan. The
Plan Administrator shall notify the Trustee and the Employer of any
action taken by it and, when required, shall notify any other interested
person or persons. The Plan Administrator shall have a copy, of this
Plan and a copy of the Trust Agreement available at the principal office
of the Employer during business hours. Such of its records as may
pertain solely to a particular Participant shall be made available to
such Participant, either by periodic reports of presentation for
examination by such Participant during business hours.
Section 10.4 Plan Administrative Committee
The Board of Directors of the Sponsor may, in its discretion,
appoint a committee of one or more persons, to be known as the Plan
Administrative Committee (Committee) to act as the agent of the Sponsor
in performing the duties of the Sponsor. The members of the Committee
shall serve at the pleasure of the Board of Directors; they may be
officers, directors, or Employees of the Employer or any other
individuals. Any member may resign by delivering his written
resignation to the Board of Directors and to the Committee. Vacancies
in the Committee arising by resignation, death, removal or otherwise,
shall be filled by the Board of Directors. The Sponsor shall advise the
Trustee in writing of the names of the members of the Committee and of
changes in membership from time to time.
Section 10.5 Organization and Operation of the Plan Administrative
Committee
(a) If the Board of Directors of the Sponsor appoints a
Committee, the Committee shall act by majority vote of its members
at the time in office, and such action may be taken either by a
vote at a meeting or in writing without a meeting. The signatures
of a majority of the members will be sufficient to authorize
Committee action. A Committee member shall not participate in
discussions of or vote upon matters pertaining to his own
participation in the Plan.
(b) The Committee may authorize any of its members or any
other person to execute any document or documents on behalf of it,
in which event the Committee shall notify the Trustee in writing
of such action and the name or names of such member or person. The
Trustee thereafter shall accept and rely upon any document executed
by such members or persons as representing action by the Plan
Administrator, until the Committee shall file with the Trustee a
written revocation of such designation.
(c) The Committee may adopt such bylaws and regulations as
it deems desirable for the conduct of its affairs. These rules may
be made available to the Employer and the Participants as
determined by the Committee.
Section 10.6 Compensation and Responsibility for Payment of Expenses of
the Plan Administrator
The Plan Administrator or members of the Committee who are
Employees of the Employer shall serve without compensation for services,
as such, but all proper expenses incurred by the Plan Administrator
incident to the ' functioning of the Plan may be paid in whole or in
part by the Employer and any expenses not paid by the Employer shall be
paid by the Trustee out of - the principal or income of the Trust Fund;
provided, however, that unusual costs and expenses of litigation
involving the Plan and losses, if any, of the Plan of any kind or
character, shall be deemed expenses of the Plan and shall be borne by,
and paid out of the Plan assets, except to the extent the Board of
Directors elects to have such expenses paid directly by the Employer.
Section 10.7 Indemnity of Plan Administrator or Plan Administrative
Committee Members
The Sponsor shall indemnify and defend the Plan Administrator or,
if the Board of Directors of the Sponsor has appointed a Committee each
member of the Committee and each of its other Employees against any and
all claims, loss, damages, expenses (including reasonable attorneys
fees), and liability arising in connection with the administration of
the Plan, except when the same is judicially determined to be due to the
gross negligence or willful misconduct of such member or other Employee.
The Employer may purchase liability insurance to cover the Plan
Administrator or members of the Committee against loss, claims, damages
or expense.
Section 10.8 Claims Procedure
Claims for benefits under the Plan shall be made in writing to the
Plan Administrator. Within 30 days after the filing of such a claim,
the Plan Administrator shall, notify the claimant in writing whether his
claim is upheld or denied. A notice of denial shall be written in a
manner calculated to be understood by the claimant, and shall contain
(i) the specific reason or reasons for denial of the claim, (ii) a
specific reference to the pertinent Plan provisions upon which the
denial is based, (iii) a description of any additional material or
information necessary for the claimant to perfect the claim, together
with an explanation of why such material or information is necessary,
and (iv) an explanation of the Plan's review procedure. Within sixty
(60) days of the receipt by the claimant of the written notice of denial
of the claim, the claimant or his duly authorized agent may file a
written request with the Plan Administrator that it conduct a full and
fair review hearing of the denial of the claimant's claim for benefits.
In connection with the claimant's appeal of the denial of his benefit,
the claimant or his duly authorized representative may review pertinent
documents and may submit issues and comments in writing within 30 days
of filing such request for review. The Plan Administrator shall render
a decision on the claim appeal promptly, but not later than sixty (60)
days after the receipt of the claimant's request for review, unless
special circumstances (such as the need to hold a hearing, if necessary)
require an extension of time for processing, in which case the sixty
(60) day period may be extended to one hundred and twenty (120) days.
The Plan Administrator shall notify the claimant in writing of any such
extension. The decision upon review shall be communicated to the
claimant within thirty days of the hearing and shall (i) include
specific reasons for the decision, (ii) be written in a manner
calculated to be understood by the ' claimant and (iii) contain specific
references to the pertinent Plan provisions upon which the decision is
based.
Section 10.9 Voting Right
(a) In accordance with the requirements of Code Section
409(e), a Participant shall be entitled to direct the Trustee as
to the manner in which voting rights of Employer Stock which is
acquired by the Trust and allocated to his Account are to be
exercised only with respect to any corporate matters which involve
the voting of such shares with respect to the approval or
disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale
of substantially all assets of a trade or business, or such similar
transaction as may be prescribed by regulations.
(b) A Participant shall be entitled to direct the Trustee
as to the manner in which voting rights of the Employer Stock which
was acquired with the proceeds of an Acquisition Loan entitled to
the interest exclusion under Section 133 of the Code and allocated
to his Account are to be exercised with respect, to all corporate
matters subject to shareholder vote.
(c) On matters subject to vote by shareholders, the Trustee
shall vote the shares of (i) Employer Stock in the Account of a
Participant to which no voting instructions have been received
(whether or not the Participant has voting rights with respect to
such matter), and (ii) unallocated Employer Stock held in the
Shares Suspense Account, held as an advance Employer Contribution
or held pending reallocation as a Forfeiture. The Trustee shall
vote the shares of such Employer Stock in the manner directed by
the Board of Directors of the Sponsor.
(d) Before each meeting of shareholders which involves
matters that Participants have the right to direct the Trustee as
to the manner of voting allocated shares, the Committee shall,
within a reasonable time before such meeting, provide each
Participant or Beneficiary entitled under this section to direct
the voting of Employer Stock with notice of such meeting, together
with an appropriate form requesting directions on how such shares
of Employer Stock allocated to such Participant's Account shall be
voted on each such matter subject to direction.
Section 10.10 Bonding
Every Fiduciary, except a bank or an insurance company, unless
exempted by ERISA, shall be bonded in an amount not less than 10% of the
amount of the Trust funds such Fiduciary handles with a minimum bond of
$1,000 and a maximum bond of $500,000. The cost of such bond(s), shall
be an expense of and may, at, the election of the Employer, be paid from
the Trust Fund or by the Employer.
ARTICLE XI - PLAN LOANS
Section 11.1 Plan Loans
Loans to Participants are not permitted under this Plan.
ARTICLE XII - QUALIFIED DOMESTIC RELATIONS ORDERS
Section 12.1 Permissible Assignment
Notwithstanding any provision to the contrary herein, the Plan
Administrator may assign the interest of a Participant in the Plan (or
in a succeeding plan of the Employer or in the plan of a successor
Employer) to an Alternate Payee pursuant to a Qualified Domestic
Relations Order. The provisions of this Article shall control in the
event the Plan receives a Qualified Domestic Relations Order with
respect to a Participant's interest in the Trust Fund.
Section 12.2 Definitions
(a) Alternate Payee shall mean a
(1) spouse,
(2) former spouse,
(3) child, or
(4) other dependent
of a Participant who is recognized by a Qualified Domestic
Relations Order as having a right to receive all, or a portion of,
a Participant's benefits under the Plan. An Alternate Payee is
treated as a Beneficiary for all purposes under the Plan.
(b) Earliest Retirement Date under this Plan for purposes
of this Article XII shall mean the earliest of (1) the date on
which the Participant is entitled to a distribution under the Plan;
or (2) the earliest date on which the Participant could begin
receiving benefits under the Plan if the Participant had separated
from service, as provided under Article VIII of the Plan.
(c) Qualification Procedures shall mean written procedures
adopted by the Plan Administrator to determine whether domestic
relations orders meet the requirements set out in paragraph (d),
below, and to administer distributions under such orders. The
procedures shall be implemented within a reasonable time after
receipt of a domestic relations order by the Plan Administrator.
Qualification Procedures must permit an Alternate Payee to
designate a representative for receipt of copies of notices sent
to the Alternate Payee with respect to a Qualified Domestic
Relations Order.
(d) Qualified Domestic Relations Order shall mean a
judgment, decree or order, including approval of a property
settlement agreement, that relates to provision of child support,
alimony payments, or marital property rights to an Alternate Payee,
is made pursuant to state domestic relations law, including a state
community property law, and creates an Alternate Payee's right to
all or a portion of the benefits payable to a Participant under the
Plan. A Qualified Domestic Relations Order must specify:
(1) the name and last known mailing address of each
Alternate Payee,
(2) the amount or percentage of the Participant's benefits
to be paid to the Alternate Payee or the manner in
which the amount is to be determined,
(3) the number of payments or period for which payments are
required, and
(4) each plan to which the order relates. An order does
not qualify under this definition if it:
(i) requires the Plan Administrator to provide a
benefit or option not available under the Plan,
(ii) requires the Plan to provide increased benefits
or
(iii) requires payment of benefits to an Alternate
Payee that are required to be paid to
another Alternate Payee under a previously
existing Qualified Domestic Relations Order.
Section 12.3 Notification
The Plan Administrator shall promptly give written notification to
the Participant and to the Alternate Payee of receipt of a domestic
relations order and of Plan Qualification Procedures. The Plan
Administrator shall then proceed with Qualification Procedures to
determine whether the order is a Qualified Domestic Relations Order and
shall notify the Participant and Alternate (or the Alternate Payee's
designated representative) of its determination.
Section 12.4 Disposition of Disputed Funds
(a) During the period in which the Plan Administrator is
making its determination of the qualified status of the Domestic
Relations Order, a separate accounting shall be maintained for any
amounts which would be payable to the Participant.
(b) if the order is determined to be a Qualified Domestic
Relations Order within the 18-month period beginning on the date
on which the first payment would be required to be made under the
order, the Plan Administrator shall direct the Trustee to
distribute the amounts in accordance with the order.
(c) if the Plan Administrator determines that the order is
not a Qualified Domestic Relations Order, or has not made a
determination within the 18-month period described in (b) the Plan
Administrator shall direct the Trustee to pay such amounts to the
persons who would have received the amounts if the order had not
been issued.
(d) If an order is qualified after expiration of the 18-month
period described in (b), payment-of benefits to an Alternate
Payee shall proceed prospectively and the Plan shall not be liable
to an Alternate Payee for benefits attributable to the period prior
to qualification.
Section 12.5 Payment of Benefits
The Plan Administrator shall comply with any Qualified Domestic
Relations Order requiring that benefits be paid to an Alternative Payee
beginning not earlier than the Participant's Earliest Retirement Date,
provided, however, that in determining the time, manner and form of
distribution under Article VIII, the Alternate Payee shall be treated in
the same manner as a Participant who has separated from service.
Section 12.6 Form of Payment
Payment of benefits pursuant to a Qualified Domestic Relations
Order shall be made only as permitted under the Plan.
ARTICLE XIII - AMENDMENTS AND ACTION BY SPONSOR/EMPLOYER
Section 13.1 Amendments
The Sponsor reserves the right to make from time to time any
amendment or amendments to this Plan in any manner it deems necessary or
advisable. However, no amendment shall be made which authorizes or
permits any of the Trust Fund, other than the part which is required to
pay taxes and administration expenses, to be used for or diverted to
purposes other than for the exclusive benefit of the Participants or
Beneficiaries. No amendment shall cause or permit any portion of the
Trust Fund to revert to or become a property of the Employer, and no
amendment which affects the rights, duties or responsibilities of the
Trustee, Plan Administrator, or an Employer may be made without the
written consent of the affected party.
Section 13.2 Action by Sponsor/Employer
Any action by the Sponsor or an Employer under this Plan may be by
resolution of its Board of Directors or by any person or persons, duly
authorized by resolution of the Board of Directors to take action.
However, neither the Trustee nor the Plan Administrator (if other than
the Sponsor) shall have any obligation or responsibility with respect to
any action required by the Plan to be taken by the Sponsor or the
Employer, any Participant or eligible Employee, nor for the failure of
any of those period to act or make any payment or contribution, or to
otherwise provide any benefit contemplated under this Plan. The Trustee
or the Plan Administrator (if other than the Sponsor or the Employer)
shall not be required to collect any contribution required under the
Plan, or determine the correctness of the amount of the Employer
contribution.
Section 13.3 Plan Ceases to Constitute an ESOP
In the event that the Plan is terminated pursuant to Section 15.1
hereof, or is amended in a manner which causes the Plan to cease being
an ESOP, any Employer Stock distributed to the Participants in
liquidation of the Trust Fund, or held by the Trustee if the Trust Fund
is not liquidated, which was acquired with Acquisition Loan proceeds
shall continue to be subject to the provisions of Section 8.5, relating
to the Put Option requirement, and the Trust Agreement.
ARTICLE- XIV - SUCCESSOR SPONSOR AND MERGER
OR CONSOLIDATION OF PLANS
Section 14.1 Successor Sponsor
In the event of the dissolution, merger, consolidation or
reorganization of the Sponsor, provisions may be made by which the Plan
and Trust will be continued by the successor. In that event, such
successor shall be substituted for the Sponsor under the Plan. The
substitution of the successor shall constitute an assumption of the Plan
liabilities by the successor and the successor shall have all the
powers, duties and responsibilities of the Employer under the Plan.
Section 14.2 Plan Assets
In the event of the merger or consolidation of this Plan with, or
transfer of assets and liabilities of this Plan to, any other Plan, each
Participant shall be entitled (if such other Plan had then terminated)
to receive a benefit immediately after the merger, consolidation or
transfer which is not less than the benefit he would have been entitled
to receive immediately before the merger, consolidation or transfer (if
this Plan had then terminated).
ARTICLE XV - PLAN TERMINATION
Section 15.1 Termination of Plan and Trust
The Employer shall have the right, at any time, to suspend or
discontinue its contributions under the Plan, and to terminate, at any
time, this Plan and the Trust created thereunder. The Plan shall
terminate (as to any Employer) upon the first to occur of the following:
(a) The date terminated by action of the Board of Directors,
provided the Board gives the Trustee thirty (30) days' prior
written notice of the termination;
(b) The date the Employer shall be judicially declared
bankrupt or insolvent;
(c) The dissolution, merger, consolidation or reorganization
of the Employer, or the sale by such Employer of all or
substantially all of its assets,
unless the successor or purchaser makes provision to continue the Plan,
in which event the successor or purchaser shall substitute itself as
such Employer.
Section 15.2 Full Vesting
Notwithstanding any other provision in this Plan to the contrary,
upon a full or partial termination of the Plan, or upon complete
discontinuance of contributions, an affected Participant's right to his
Account shall be one hundred percent (100%) nonforfeitable.
Section 15.3 Distribution of Trust Fund
Upon a termination of the Plan, the Employer at its option may
direct and require the Trustee to liquidate the Trust Fund or the
applicable portion thereof, and distribute the same to interested
Participants. If the Employer does not direct the Trustee to liquidate
the Trust Fund upon a termination of the Plan, then the provisions of
Article VIII shall remain operative, and the Trust shall continue until
the Trustee has distributed all of the benefits under the Plan. On each
Valuation Date, the Plan Administrator shall credit any part of a
Participant's Account retained in the Trust Fund with its proportionate
share of the Trust Fund's income, expenses, gains and losses, both
realized and unrealized, until such Account has been fully distributed.
ARTICLE XVI - MISCELLANEOUS
Section 16.1 Non-Guaranty of Employment
Nothing contained in this Plan shall be construed as a contract of
employment between the Employer and any Employee or as a right of any
Employee to be continued in the employment of the Employer or as a
limitation of the right of the Employer to discharge any of its
Employees with or without cause.
Section 16.2 Rights to Trust Assets
No Employee shall have any right to or interest in any assets of
the Trust Fund upon termination of his employment or otherwise, except
as provided from time to time under this Plan and then only to the
extent of the benefits payable under the Plan to such Employee out of
the assets of the Trust Fund. Except as otherwise may be provided under
Title IV of ERISA, all payments of benefits as provided for in this.
Plan shall be made solely out of the assets of the Trust Fund and none
of the Fiduciaries shall be liable therefor in any manner.
Section 16.3 Word Usage
Words used in the masculine shall apply to the feminine where
applicable; and wherever the context of the Plan dictates, the plural
shall be read as the singular and the singular as the plural.
G.R. HERBERGER'S, INC
EMPLOYEE STOCK OWNERSHIP TRUST
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
PAGE
ARTICLE I - ESTABLISHMENT OF TRUST FUND. . . . . . . . . . . . . . . .1
Section 1.1 Establishment of Trust Fund. . . . . . . . . . .1
Section 1.2 Other Trusts . . . . . . . . . . . . . . . . . .1
ARTICLE II - COMPOSITION OF TRUST FUND . . . . . . . . . . . . . . . .1
ARTICLE III - TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . .2
Section 3.1 Appointment and Resignation of Trustees. . . . .2
Section 3.2 Change of Trustees . . . . . . . . . . . . . . .2
Section 3.3 Final Accounting . . . . . . . . . . . . . . . .2
ARTICLE IV - MANAGEMENT AND INVESTMENT OF THE FUND . . . . . . . . . .3
Section 4.1 Duties of Trustee. . . . . . . . . . . . . . . .3
Section 4.2 Trustee Investment Responsibility. . . . . . . .3
Section 4.3 Loans by Trustee . . . . . . . . . . . . . . . .3
Section 4.4. Collective Investment Trust. . . . . . . . . . .4
Section 4.5 Insurance. . . . . . . . . . . . . . . . . . . .4
Section 4.6 Other Powers . . . . . . . . . . . . . . . . . .4
Section 4.7 Loans to Participants. . . . . . . . . . . . . .5
Section 4.8 Voting of Employer Stock . . . . . . . . . . . .6
ARTICLE V - VALUATION OF PLAN ASSETS . . . . . . . . . . . . . . . . .6
ARTICLE VI - RECORDKEEPING AND ACCOUNTINGS BY TRUSTEE. . . . . . . . .6
ARTICLE VII - REQUIREMENT OF WRITTEN REQUESTS AND
INSTRUCTIONS TO TRUSTEE. . . . . . . . . . . . . . . . . . . . .6
ARTICLE VIII - STANDARD OF CONDUCT . . . . . . . . . . . . . . . . . .7
ARTICLE IX - TERMINATION OF THE PLAN . . . . . . . . . . . . . . . . .7
ARTICLE X - AMENDMENT OF TRUST AGREEMENT . . . . . . . . . . . . . . .7
ARTICLE XI - ADMINISTRATIVE EXPENSES AND COMPENSATION OF
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE XII - SITUS. . . . . . . . . . . . . . . . . . . . . . . . . .8
AGREEMENT AND DECLARATION OF TRUST
This Agreement and Declaration of Trust, is made by and between the
undersigned, hereinafter referred to respectively as the "Employer" and
the "Trustee".
WHEREAS, the Employer has adopted an employee stock ownership plan
and amended it to include a Section 401(k) plan to be known as the G.R.
Herberger's, Inc. 401(k) Employee Stock Purchase Plan and Employee Stock
Ownership Plan ("Plan"), the provisions of which are incorporated herein
by reference and a copy of which is annexed hereto, for the benefit of
the Participants as therein defined and their Beneficiaries; and
WHEREAS, the Employer deems it to be appropriate to amend the
Agreement and Declaration of Trust;
NOW, THEREFORE, the Employer and Trustee do hereby agree and
declare each with the other as follows:
ARTICLE I - ESTABLISHMENT OF TRUST FUND
Section 1.1 Establishment of Trust Fund
The Employer hereby establishes with the Trustee, pursuant to the
Plan, a trust comprised of contributions by the Employer and
Participants and earnings and profits thereon, together with such other
payments acceptable to the Trustee as shall from time to time be paid or
delivered to the Trustee by or on behalf of the Employer or any other
employer authorized to maintain the Plan and the earnings and profits
thereon. AR such money and property, all investments made therewith and
proceeds thereof and all earnings and profits thereon, less payments
which at the time of reference shall have been made by he Trustee, as
authorized herein, are referred to herein as the 'Trust Fund!'. ne Trust
Fund shall be held by the Trustee in trust and dealt with in accordance
with the provisions of this Agreement and Declaration of Trust.
Section 1.2 Other Trusts
Nothing contained in this Agreement and Declaration of Trust shall
be construed to prevent the same Trustee named herein from acting as
Trustee for plans of other employers.
ARTICLE II - COMPOSITION OF TRUST FUND
The Trust Fund shall be composed of all sums of money and of all
property acceptable to the Trustee, and received by the Trustee to be
held in trust hereunder as evidenced by its receipts, from whatever
source received together with all investments made therewith, the
proceeds thereof, and all earnings and accumulations thereon, or the
part thereof from time to time remaining.
ARTICLE- III - TRUSTEES
Section 3.1 Appointment and Resignation of Trustees
Appointment of Trustees shall be the responsibility of the Board
of Directors of the Sponsor. Any Trustee may resign at any time on
giving sixty days notice in writing to the Sponsor or the Sponsor may
discharge any Trustee on similar notice, unless the Sponsor and Trustee
agree in writing to forego such notification period. In the event of
the resignation, discharge, death, refusal to act, or inability to act
of any Trustee, the Board of Directors of the Sponsor shall select a
successor Trustee who shall have the same powers and duties as those
conferred upon the Trustee in this Agreement. Any Trustee appointed
hereunder shall signify his acceptance in writing to the Board of
Directors.
Section 3.2 Change of Trustees
All power and authority of a Trustee who resigns or is removed
shall be terminated at the end of the sixty-day period, at which time
all"such power and authority shall be vested in the successor Trustee
without any further act or deed; provided, however, that if a successor
Trustee will not have been appointed and qualified at the end of such
period the power and authority of the former Trustee shall continue
until the later appointment and qualification of a successor Trustee at
which time said power and authority shall be so vested in such successor
Trustee. The former Trustee shall, as of the time the successor Trustee
assumes office, assign, transfer, and set over to the successor Trustee
the funds and property then constituting the Trust Fund; provided,
however, that the former Trustee may retain in reserve such sums of
money, or may liquidate assets and from the proceeds thereof reserve
such funds, as they may deem to be sufficient for the payment of their
expenses in connection with the settlement of their accounts or
otherwise, and, after the payment of such expenses, they shall pay the
balance of such reserved funds then remaining to the successor Trustee
then qualified and acting.
Section 3.3 Final Accounting
Within sixty days after a change of Trustee has become effective,
the former Trustee shall file with the Employer an accounting of the
administration of the Trust for the period subsequent to their latest
accounting, containing the same information required to be contained in
their annual accounts. No successor Trustee shall be liable or
responsible in any way for anything done or omitted prior to the date as
of which he becomes a Trustee.
ARTICLE IV - MANAGEMENT AND INVESTMENT OF THE FUND
Section 4.1 Duties of Trustee
It shall be the duty of the Trustee (a) to hold the Trust Fund, (b)
to invest and reinvest the Trust Fund, (c) to keep accurate and detailed
accounts of all investments, receipts, disbursements and other
transactions hereunder, and (d) to pay monies to or on the order of the
Plan Administrator provided for under the Plan, including, when the Plan
Administrator shall so order, payments to the Participants or their
Beneficiaries under the Plan. Such order need not specify the purpose
of such payments so ordered and the Trustee shall not be responsible in
any way respecting the purposes of such payments or for the general
administration of the Plan by the Plan Administrator. The Trustee shall
be under no duty to enforce payment of any contribution.
Section 4.2 Trustee Investment Responsibility
Employer contributions made in cash, and other cash received by the
Trustee, shall first be applied to pay for Employer Stock acquired
pursuant to Section 8.5 or 8.6 of the Plan and after such application
may be applied to acquire additional shares of Employer stock from the
shareholders of the Employer or from the Employer as directed by the
Plan Administrator. The investment policy of the Plan shall be to
invest primarily in Employer Stock, including up to 100% of the Trust.
To the extent funds are available thereafter the Trustees may invest
funds temporarily in savings accounts, certificates of deposit, stocks,
bonds, or other investments deemed desirable for the Trust, or such
funds may be held in cash or cash equivalents. In addition, at the
direction of the Plan Administrator, the Trustee may borrow funds
pursuant to Section 4.3 of the Trust to purchase Employer Stock from the
Employer or its shareholders.
The Board of Directors of the Sponsor shall have the fiduciary
responsibility for decisions regarding the acquisition, holding,
disposition and voting (subject to Section 4.8 of the Agreement) of
Employer Stock and shall have the exclusive power, authority and
responsibility to determine whether to sell, purchase or hold Employer
stock.
Section 4.3 Loans by Trustee
In the event the Trustee borrows funds as provided under Section
4.2 of the Trust, the proceeds of such loan shall be used within a
reasonable time only for the following purposes:
(a) To acquire Employer Stock;
(b) To repay such loan; and
(c) To repay a prior loan made under this Section 4.3.
Except as provided in Section 8.5 and 8.6 of the Plan, no Employer Stock
acquired with the proceeds of a loan may be subject to a put, call,
other option, or a buy-sell or similar arrangement while held by the
Trustee, or when distributed from the Plan, whether or not that Plan is
then an ESOP. The Trustee and the Plan Administrator shall take all
action necessary to insure that any loan made under this Section 4.3
constitutes an "exempt loan" as defined in Section 4975(d)(3) of the
Code.
Section 4.4. Collective Investment Trust
The Declaration of Trust executed by Norwest Bank Minnesota,
National Association, on April 3. 1989, establishing Norwest Bank
Collective Funds for Employee Benefit Plans is hereby incorporated by
reference into this agreement, and, notwithstanding any other provision
of this trust agreement to the contrary, the Trustee may cause part or
all of the money of this Trust, without limitation as to amount, to be
invested in and commingled with the money of trusts created by others
and invested and reinvested as a part of any one or more of the Funds
heretofore or hereafter created by said Declaration of Trust, and money
of this Trust so added to any of the said Funds heretofore or hereafter
created by said Declaration of Trust shall be subject to all of the
provisions of said Declaration of Trust as it is amended from time to
time.
Section 4.5 Insurance
The Trustee shall not invest any of the assets of the Trust Fund
in annuity or insurance contracts.
Section 4.6 Other Powers
In addition to the powers conferred upon them elsewhere in this
instrument, the Trustees shall be authorized and empowered:
(a) To purchase and subscribe for any securities or other
property and to retain such securities or other property in the Trust
Fund.
(b) To sell, exchange, convey, transfer or otherwise dispose of
any property held by it, by private contract or at public auction, 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 sale or other disposition.
(c) To adjust, settle, contest, compromise and arbitrate any
claims, debts, or damages due or owing to or from the Trust Fund, and to
sue, commence or defend any legal proceedings in reference thereto.
(d) To vote upon any stocks, bonds, or other securities, to give
general or special proxies or powers of attorney with or without power
of substitution, to exercise any conversion privileges, subscription
rights, or other options and to make any payments, incidental thereto,
to consent to or otherwise participate in corporate securities and to
delegate discretionary powers and to pay assessments or charges in
connection therewith, and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other property held
in the Trust Fund.
(e) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted.
(f) To register any investments held in the Trust Fund in its own
name or in the name of a nominee and to hold any investment in bearer
form, but the books and records of the Trustee shall at all times show
that all such investments are part of the Fund.
(g) To manage, administer, operate, lease for any number of
years, regardless of any restrictions on leases made by fiduciaries,
develop, improve, repair, alter, demolish, mortgage, pledge, grant
options with respect to, or otherwise deal with any real property or
interest therein at any time held by it.
(h) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation.
(i) To borrow or raise monies for the purpose of the Trust from
any source and for any sum so borrowed to issue its promissory notes as
Trustee and to secure the repayment thereof by pledging all or any part
of the Trust Fund. No person loaning money to the Trustee shall be
bound to see to the application of the money loaned or to inquire into
the validity, expediency, or propriety of any such borrowing.
(j) To deposit any portion of the Trust fund in bank accounts,
certificates of deposit, time deposit open accounts and other similar
investments which bear a reasonable rate of interest, in the banking
department of any bank or trust company, including the banking
department of the Trustee or any affiliate or affiliates of the Trustee.
Section 4.7 Loans to Participants
Loans to Participants shall not be permitted.
Section 4.8 Voting of Employer Stock
The Trustee shall vote the Employer Stock held in the Trust Fund
as provided in Section 10.9 of the Plan and subject to Fiduciary duties
set forth in Section 404 of ERISA.
ARTICLE V - VALUATION OF PLAN ASSETS
Within sixty days after the receipt of the Employers' contribution
for a Plan Year, the Trustee shall ascertain and certify to the Employer
the market values of the assets of the Trust Fund, as of the last day of
the Plan Year. Such market values may be determined either by the
Trustee itself or by such person or persons believed by the Trustee to
be competent to make such determination as the Trustee may select. Any
determination of values so made shall, for all purposes of the Plan,
conclusively establish such values.
ARTICLE VI - RECORDKEEPING AND ACCOUNTINGS BY TRUSTEE
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
the Board of Directors. Within sixty days following receipt of
Employer's contributions for each Plan Year, and within sixty days after
the removal or resignation of a Trustee as provided in Article III
hereof, the Trustee shall file with the Board of Directors a written
account setting forth all investments, receipts, disbursements, and
other transactions effected by it during such Plan Year or during the
period from the close of the last Plan Year to the date of such removal
or resignation, which account so filed shall be open to inspection
during business hours by the Employer, the Plan Administrator and by
Participants and their Beneficiaries.
ARTICLE VII - REQUIREMENT OF WRITTEN REQUESTS
AND INSTRUCTIONS TO TRUSTEE
Any action by the Board of Directors of the Sponsor pursuant to any
of the provisions of this Plan and Trust shall be evidenced by a
resolution of the Board of Directors certified to the Trustee over the
signature of the Secretary or Assistant Secretary with the corporate
seal, if any, affixed, and the Trustee shall be fully protected in
acting in accordance with such resolution so certified to it. All
orders, requests, and instructions of the Plan Administrator to the
Trustee shall be in writing and the Trustee shall act and shall be fully
protected in acting in accordance with such orders, requests, and
instructions. The Sponsor shall furnish the Trustee from time to time
with certified copies of resolutions of its Board of Directors
evidencing the appointment and termination of office of the Plan
Administrator or any members of the Plan Administrative Committee and
the appointment of successors thereto.
ARTICLE VIII - STANDARD OF CONDUCT
The Trustee shall be bound to perform his duties for the purpose
of providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Trust. He shall act
in accordance with the care, skill, prudence and diligence that would
characterize the actions of a prudent man, knowledgeable in the
performance of such duties in similar circumstances with similar
objectives. Unless under the circumstances it is clearly imprudent, he
shall diversify the investments of the Plan so as to minimize the risk
of large losses.
If according to the provisions of the Plan and Trust, the Trustee
shall be subject in the management and control of the Fund to the
directions of the Plan Administrator or Sponsor, the Trustees in acting
pursuant to and in reliance on, such directions shall be fully and
completely indemnified and held harmless by the Employer from any
liability, loss or expense (including legal fees) arising out of its
actions so directed. The Trustee shall be indemnified under these
circumstances notwithstanding that such directions, and the Trustee's
conduct pursuant thereto, may constitute a breach of fiduciary
obligations to the Plan, the Participants and Beneficiaries.
ARTICLE IX - TERMINATION OF THE PLAN
The Plan may be terminated at any time by the Board of Directors
of the Sponsor, in which event the Trust Fund shall be liquidated by the
Trustee in accordance with the written directions of the Sponsor
pursuant to the Plan. However, in no event, may the Trust Fund revert
to the Employer except as specifically provided by the Plan.
ARTICLE X - AMENDMENT OF TRUST AGREEMENT
The Sponsor reserves the right at any time and from time to time,
by action of its Board of Directors, to modify or amend, in whole or in
part, any or all of the provisions of this Agreement and Declaration of
Trust, and provided that no modification or amendment which affects the
rights, duties or responsibilities of the Trustee may be made without
its consent in writing and further provided that no such modification or
amendment shall authorize or permit, at any time, any part of the corpus
or income of the Trust Fund to be used for or diverted to purposes other
than for the exclusive benefit of Participants and their Beneficiaries
under the Plan.
ARTICLE XI - ADMINISTRATIVE EXPENSES AND
COMPENSATION OF TRUSTEE
The Trust Fund shall bear all brokerage costs and transfer taxes
incurred in connection with the investment and reinvestment of the Trust
Fund and all income taxes or other taxes of any kind whatsoever which
may be levied or assessed under existing or future laws upon or in
respect of the Trust Fund, all expenses incurred in connection with the
acquisition or holdings of real property, any interest therein or
mortgage thereon, and all interest which may be payable or money
borrowed by the Trustee for the purposes of the Trust. All other
administrative 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 Employer and the Trustee, and all other proper
charges and disbursements of the Trustee, shall be paid by the Employer
and, in the event not paid by the Employer, shall be paid by the Trust
Fund; provided, however, no person serving as Trustee who is also an
Employee of the Employer shall receive any compensation from the Trust
Fund, except for reimbursement of expenses properly and actually
incurred.
ARTICLE XII - SITUS
This Agreement and Declaration of Trust shall be administered,
construed and enforced according to the laws of the State of Minnesota
when not superseded by federal law.
WITNESS WHEREOF, the parties have executed this Agreement this 26th
day of May 1993.
EMPLOYER:
G. R. HERBERGER'S, INC.
By: ____________________________
Its: President
By: _____________________________
Its: Vice President
FANDEL COMPANY
By: _____________________________
Its: President
By: _____________________________
Its: Vice President
TRUSTEE:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: ___________________________
Its: Asst. Vice President
By: ___________________________
Its: Asst. Vice President
AMENDMENT NO. 1
TO
G. R. HERBERGER'S, INC.
401(K) EMPLOYEE STOCK PURCHASE PLAN
AND EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, G. R. Herberger's, Inc. (the "Employer") has adopted and
currently maintains the G. R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan (the "ESOP") and has
established the related Employee Stock Ownership Trust (the "Trust");
WHEREAS, the Employer wishes to amend the ESOP as requested by the
IRS in determining the Plan's status as a qualified plan;
NOW, THEREFORE, the Employer hereby amends the ESOP as follows:
1. Section 6.5 Computation of Years of Service and Breaks in
Service shall be amended by adding the following to the end of the first
paragraph of Section 6.5:
"Hours of Service for purposes of determining Years of Service and
Breaks in Service under this Section 6.5 shall include Hours of
Service with any member of the Employer's Controlled Group."
2. Section 6.5(g) shall be amended by deleting the last sentence
of Section 6.5(g) and replacing it with the following sentence:
"In the case of a Participant's absence from service for a Parental
Absence as provided under Article VII, the twelve (12) consecutive
month period beginning on the Employee's Severance from Service
Date shall not constitute a Break in Service."
3. Section 8.1(b) Consent to Distribution Prior to Normal
Retirement Age shall be amended by restating Section 6.l(b)(1) in its
entirety to read as follows:
"(1) If a Participant terminates his employment with
the Employer and the value of his vested Account balance is
not and never was greater than $3,500, the Plan Administrator
shall direct the distribution of such vested Account balance
in a lump sum without the Participant's consent."
4. Section 9.3 Minimum Contribution, shall be amended by adding
a new Section 9.3(d) to read as follows:
"(d) For purposes of determining whether or to what
extent a minimum contribution is required, there shall be
treated as an Employer Contribution any Elective Deferral
Contribution made on behalf of a Participant who is a Key
Employee for the Plan Year. Any Elective Deferral
Contribution made on behalf of any Participant who is a Non--
key Employee for the Plan Year shall not, however, be treated
as an Employer's contribution for purposes of satisfying the
minimum contribution requirement of Section 9.3(a)."
5. Section 9.5(c) shall be amended replacing the phrase "five
(5) Years of Service" with the phrase "three (3) Years of Service" where
it appears in such Section 9.5(c).
6. The foregoing provisions shall be effective as of the
Effective Date of the restatement of the Plan, namely January 1, 1989.
IN WITNESS WHEREOF, the parties have executed this Amendment No.
1 as of the dates indicated below.
G. R. HERBERGER'S, INC.,
Employer,
Dated: ________________ By ___________________________
Its: President
Dated: ________________ By _____________________________
Its Vice President of
Operations
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
Dated: ________________ By _____________________________
Its Asst. Vice President
IN WITNESS WHEREOF, the parties have executed this Amendment No.
2 as of the date indicated below.
Dated: ____________________ G. R. HERBERGER'S, INC., Sponsor
By _____________________________
Its Vice President - Finance and
Operations
By _____________________________
Its President
Dated: ____________________ NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By _____________________________
Its Asst. Vice President
By _____________________________
Its Vice President
AMENDMENT NO. 2
TO
G.R. HERBERGER'S, INC.
401(k) EMPLOYEE STOCK PURCHASE PLAN
AND
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, G.R. Herberger's, Inc. (the "Sponsor") has adopted and
currently maintains the G.R. Herberger's Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan (the "Plan") and has
established the related Employee Stock Ownership Trust (the "rust"); and
WHEREAS, the Omnibus Budget Reconciliation Act of 1993 ("OBRA '93")
requires that beginning in 1994 a qualified plan such as the Plan may
not take into account compensation in excess of $150,000, indexed for
cost-of-living adjustments in increments of $10,000;
WHEREAS, the Sponsor wishes to amend the Plan to comply with the
requirements of OBRA '93;
WHEREAS, the Sponsor wishes to amend the Plan to clarify the
treatment of forfeitures of terminated participants who are 0% vested in
their Account balance; and
WHEREAS, the Plan needs to be amended, to correctly reflect the
diversification requirements applicable to the Plan.
NOW, THEREFORE, the Sponsor hereby amends the Plan as follows:
1. Section 2.7 Compensation shall be amended by deleting the
last paragraph of such Section 2.7 and adding the following language to
the end of Section 2.7:
"In addition to other applicable limitations set forth
in the Plan, and notwithstanding any other provision of the
Plan to the contrary, for Plan Years beginning on or after
January 1, 1994, the annual compensation of each Employee
taken into account under the Plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which compensation
is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will
be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Code
Section 401(a)(17) shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If Compensation for any prior determination period is
taken into account in determining an Employee's benefits
accruing in the current Plan Year, the Compensation for that
prior determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination
period. For this purpose, for determination periods
beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000
In determining the Compensation of a Participant, the
family aggregation rules of Code Section 414(q)(6) shall
apply, except that in applying such rules, the term "family"
shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the Plan Year. If the aggregate
Compensation for the family group exceeds the limitation
under Code Section 401(a)(17), then the Compensation of the
family member shall be proportionately reduced so the total
equals the compensation limit set forth in Code Section
401(a)(17)."
2. Section 6.4 of the Plan shall be amended by adding the
following unnumbered paragraph to the end of Section 6.4:
"For purposes of this Section 6.4 and subject to
Section 8.1(b), if upon termination of employment, a
Participant is 0% vested in his Account balance, such
Participant shall be deemed to have received a lump sum
distribution of such vested Account balance and shall
immediately forfeit the nonvested portion of his Account
balance, subject to restoration under Section 8.4."
3. Section 5.3(b) of the Plan shall be amended effective as of
January 1, 1989 to read as follows:
(b) A participant's Qualified Election Period shall be the six
Plan Year period beginning on the latter of (i) the Plan Year in which
the Participant attains age 55; or (ii) the Plan Year in which the
Participant first becomes qualified under subparagraph (a) above.
4. Unless specifically provided otherwise, this Amendment No. 2
shall be effective January 1, 1994.
AMENDMENT NO. 3
TO
G.R. HERBERGER'S, INC.
401(k) EMPLOYEE STOCK PURCHASE PLAN
AND
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, G.R. Herberger's, Inc. (the "Sponsor") has adopted and
currently maintains the G.R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan (the "Plan") and has
established the related Employee Stock Ownership Trust (the "Trust");
and
WHEREAS, the Sponsor wishes to amend the Plan to allow for employer
matching contributions to be made with respect to certain Elective
Deferrals made by Participants to the Plan; and
WHEREAS, the Sponsor wishes to make several additional modifications to
the Plan.
NOW, THEREFORE, the Sponsor hereby amends the Plan as follows:
1. Section 2.1 shall be amended and restated as follows:
Section 2. 1 Account shall mean the entire interest of each
Participant in the Trust. The Trustee shall create and maintain
a separate account for each Participant and shall credit thereto
the amount of contributions to the Plan and all gains and losses
allowable thereto. Within each Participant's Account, separate
accountings shall be maintained for: (i) Elective Deferral
Contributions, (ii) Matching Contributions, and (iii) Employer
Discretionary Contributions, if any, and all gains and losses
thereon. That portion of a Participant's Account attributable to
Elective Deferral Contributions, if any, shall be referred to as
the Participant's Elective Deferral Account, and that portion of
a Participant's Account attributable to Matching Contributions, if
any, shall be referred to as the Participant's Matching Account.
2. There shall be added to the Plan a new Section 2.2A to read as
follows:
Section 2.2A Actual Contribution Percentage ("ACP") shall mean for
a specified group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant in such
group to the nearest one-hundredth of one percent) of the amount
of Matching Contributions made under the Plan on behalf of the
Participant for the Plan Year to the Participant's Compensation,
as defined under Section 2.7, for the Plan Year. Such ACP shall
not include Matching Contributions that a-re for-felted either to
correct Excess Aggregate Contributions or because the contributions
to which they relate are Excess Deferrals, Excess Contributions,
or Excess Aggregate Contributions. Compensation shall include
Compensation for the entire Plan Year, even if the Employee is not
a Participant for the entire Plan Year, unless a different result
is required by regulation or statute. For purposes of determining
the ratio, of a Participant who is a five percent (5%) owner or one
of the ten (10) most highly paid Highly Compensated Employees, the
ratio and the Compensation of such Participant shall include the
ratio and the Compensation for the Plan Year of Family Members (as
defined in Code Section 414(q)(6). Family Members, with respect
to Highly Compensated Employees, shall be disregarded as separate
Employees in determining the ratio both for Participants who are
Non-Highly Compensated and for Participants who are Highly
Compensated Employees.
3. Section 2.2A shall be renumbered 2.2B and amended and restated as
follows:
Section 2.2B. Actual Deferral Percentage ("ADP") shall mean, for
a specified group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant in such
group to the nearest one-hundredth of one percent) of the amount
of Employer Contributions actually paid over to the Trust on behalf
of such Participant for the Plan Year to the Participant's
Compensation, as defined under Section 2.7, for such Plan Year.
Compensation shall include Compensation for the entire Plan Year
even if the Employee is not a Participant for the entire Plan Year
unless a different result is required by regulation or statute.
Employer contribution on behalf of any Participant shall include:
(i) any Elective Deferrals made pursuant to the Participant's
Elective Deferral Agreement, including Excess Elective Deferrals
of Highly-Compensated Employees, but excluding Excess Elective
Deferrals of Non-Highly Compensated Employees that arise solely
from Elective Deferrals made under the Plan or plans of this
Employer; and (ii) at the election of the Employer, Matching
Contributions. The actual deferral ratio for a Participant who
fails to make Elective Deferrals is zero. For purposes of
determining the deferral ratio of a Participant who is a five
percent (5 %) owner or one of the ten (10) most highly-paid Highly
Compensated Employees, the deferral ratio and the Compensation of
such Participant shall include the deferral ratio and the
Compensation for the Plan Year of Family Members (as defined in
Code Section 414(q)(6)). Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate Employees
in determining the deferral ratio both for Participants who are
Non-Highly Compensated and for Participants who are Highly
Compensated Employees.
4. There shall be added to the Plan a new Section 2.14A to read as
follows:
Section 2.14A Excess Aggregate Contribution shall mean with respect
to any Plan Year, the excess of:
(a) The aggregate amount of Matching Contributions actually taken
into account in computing, the ACP of Highly Compensated Employees
for such Plan Year over,
(b) The maximum amount of such Matching Contributions for the
Highly Compensated Employees permitted by the ACP test (determined
by reducing Matching Contributions made on behalf of Highly
Compensated Employees in order of the ACP beginning with the
highest of such percentages). Such determination shall be made
after first determining Excess Elective Deferrals pursuant to
Section 2.14C and then determining Excess Contributions pursuant
to Section 2.14B.
5. Section 2.14A shall be renumbered 2.14B.
6. Section 2.14B shall be renumbered 2.14C.
7. There shall be added to the Plan a new Section 2.21A to read as
follows:
Section 2.21A Matching Contribution shall mean an Employer
contribution made to this Plan or any other defined contribution
plan on behalf of a Participant on account of a Participant's
Elective Deferral, under a plan maintained by the Employer.
8. There shall be added to the Plan a new Section 4. 1 B to read as
follows:
Section 4.1B Employer Matching Contributions
For each Plan Year, the Employer may contribute. on behalf of each
Participant who has made Elective Deferral Contributions for the
Plan Year, pursuant to an Agreement under Section 4.1A of the Plan,
and has elected to invest such Elective Deferral Contributions in
Employer Stock, pursuant to Section 5.4 of the Plan, a
discretionary Matching Contribution of an amount equal to a
percentage of' the Participant's Compensation contributed as an
Elective Deferral Contribution and invested in Employer Stock
(which is not subsequently returned to the Participant as a
corrective distribution, pursuant to Section 4.13), the exact
percentage of which is to be determined each year by the Employer.
9. Section 4.2 shall be amended and restated as follows:
Section 4.2 Time of Payment and Form of Contribution
The Employer contributions, if any, shall be paid to the Trustee
either in cash or Employer Stock as the Board of Directors may from
time to time determine. In determining the amount of the Employer
contributions, shares of Employer Stock will be valued at their
then Fair Market Value Per Share. The Employer contributions shall
be paid to the Trustee on or before the due date for filing its
federal income tax return including extensions, for the fiscal year
of the Employer with respect to which the contributions were made.
Elective Deferral Contributions shall be paid to the Trustee as
soon as the amount can be reasonably identified and separated from
the Employer's other assets. Payment shall in any event be made
within 30 days after the Participant would otherwise have received
the amount withheld from Compensation on account of the Elective
Deferral.
The Employer Matching Contributions, if any, shall be paid to the
Trustee as soon as the amount can be reasonably computed and
identified and separated from the Employer's other assets. The
Employer Matching Contributions shall be paid to the Trustee on or
before the due date for filing its federal income tax return,
including extensions, for the fiscal year of the Employer with
respect to which the contributions were made.
10. Paragraph (b) of Section 4.3 of the Plan shall be amended and
restated to read as follows:
(b) Financed Shares acquired with the proceeds of an Acquisition
Loan under Section 4.3 of the Trust shall be added to and
maintained in a Shares Suspense Account. As the Employer makes
ESOP contributions to the Plan for a Plan Year and the Trustee
makes payments on the Acquisition Loan, such Financed Shares shall
be released from the Shares Suspense Account and allocated as of
the last day of the Plan Year for which the contribution was made
to the Accounts of the Participants in the manner provided in
paragraph (a) above. The Number of Financed Shares to be released
from the Shares Suspense Account for each Plan Year shall be in an
amount equal to the number of currently encumbered Financed Shares
multiplied by one of the two fractions provided in subparagraphs
(1) and (2) below. The Plan Administrator shall deter-mine which
fraction to use at the time of each such loan, provided, however,
that the Plan Administrator may use the fraction in subparagraph
(2) only if the following rules apply: (i) the loan must provide
for annual payments of ' principal and interest at a cumulative
rate that is not less rapid at any time than level annual payments
of such amounts for 10 years; and (ii) interest included in any
payment is disregarded only to the extent that it would be deter-mined
to be interest under standard loan amortization tables. In
addition, subparagraph (2) is not applicable from such time . that,
by reason of a renewal, extension, or refinancing, the sum of the
expired duration of the loan, the renewal period, the extension
period, and the duration of a new loan exceeds 10 years. If such
loan fails to comply with these rules, the Plan Administrator shall
use the method set forth in subparagraph (1).
(1) The numerator of the fraction is the total payments of
principal and interest made during the Plan Year, and the
denominator of the fraction is the total payments of
principal and interest made during the Plan Year plus the
total payments of principal and interest due under the loan
for all future Plan Years.
(2) Thee numerator of the fraction is the total payments of
principal made during the Plan Year, and the denominator of
the fraction is the total payments of principal made during
the Plan Year plus the total payments of principal due under
the loan for all future Plan Years.
If the interest rate under the loan is variable the above
calculation must be made using the interest rate which is
applicable as of the end of the Plan Year in which such calculation
is made. Financed Shares of different classes must be released
from encumbrance in equal percentages.
11. There shall be added to the Plan a new Section 4.3A to read as
follows:
Section 4.3A Allocation of Matching Contributions
Any Matching Contributions made to the Plan with respect to the
Plan year shall be allocated to the Account of each eligible
Participant who made an Elective Deferral and invested such
Elective Deferral in Employer Stock, as of the last day of the Plan
Year on the same basis as the Employer makes the Matching
Contributions under Section 4.1B of the Plan.
12. Section 4.5 of the Plan shall be amended and restated to read as
follows:
Section 4.5 Advance Employer Contributions
In the event that a part or all of an Employer's contribution
(other than pursuant to Participant's Elective Deferral
Contributions or Matching Contributions) for a Plan Year is paid
before the last day of a Plan Year, such advance contribution shall
be held by the Trustee as a separate fund, and, along with the net
income and any change in value of such separate fund, allocated
among the Accounts of the Participants as of the last day of the
Plan Year pursuant to Section 4.3. In the event that the Plan is
terminated before the last day of the Plan Year, all such advance
contributions, including any amount treated as an advance
contribution under Section 4.6, shall be returned to the Employer
to the extent provided in Section 4.10.
13. Paragraph (a) of Section 4. 1 1 shall be amended and restated to
read as follows:
(a) Any cash dividends received by the Trustee on Employer Stock
allocated to the Accounts of Participants (or former Participants
or Beneficiaries) may be: (i) retained in the Participants'
applicable Accounts (and invested by the Trustee under the same
rules as for the other assets of such Accounts); (ii) used to make
payments on an Acquisition Loan the proceeds of which were used to
acquire the Employer Stock with respect to which the dividend is
paid (provided that the applicable requirements of Code Section
404(k)(2) are satisfied); and/or (iii) paid to such Participants
(or former Participants or Beneficiaries), all at the sole
discretion of the Employer (to be applied in a nondiscriminatory
manner). If the dividends are to be paid to the Participants (or
former Participants or Beneficiaries) the dividends may, at the
election of such Participants (or former Participants or
Beneficiaries), be paid to the applicable Participants (or former
Participants or Beneficiaries) in a current payment in cash or be
retained in the Trust. Any such dividends for which a current cash
payment is to be made must be made within 90 days of the end of the
Plan Year in which the dividends are received by the Trustee. The
Employer may elect to pay any such cash dividend directly to the
Participants or Beneficiaries. Any such payment of cash dividends
on shares of Employer Stock shall not be treated as a distribution
under the Plan.
14. The first sentence of subparagraph (b)(1) of Section 4. 1 1 shall
be amended and restated to read as follows:
A portion (or all) of the Employer Stock released from the Shares
Suspense Account pursuant to Section 4.3(b) as a result of the use
of the cash dividend on Employer Stock acquired with the proceeds
of the Acquisition Loan (whether such Employer Stock is allocated
or unallocated) to make payments on the Acquisition Loan shall
first be allocated to Participants' Accounts in accordance with
this Section 4. 1 1 (b)(1).
15. Paragraph (a) of Section 4.13 shall be amended and restated to read
as follows:
(a) In General. For each Plan Year, the Plan shall satisfy the
non-discrimination test in Code Section 40 1 (k) and 40 1 (m) in
accordance with Final Treasury Regulation Section 1.401(k)-l and
Final Treasury Regulation Sections 1.401(m)-l and -2. The Code and
Regulation Sections are incorporated herein by this reference.
16. Paragraph (h) of Section 4.13 shall be revoked.
17. Section 4.13 shall be amended to add to the end thereto new
Paragraphs (h) through (o) which shall read as follows:
(h) The ACP Test. In accordance with Code Section 401(m), the
ACP for the group of eligible Participants for any Plan Year who
are Highly Compensated Employees must satisfy one of the following
tests:
(1) The ACP for the Highly Compensated Employees may not be
more than the ACP for all Non-Highly Compensated Employees
multiplied by 1.25; or
(2) The ACP for the group of Highly Compensated Employees
is not more than the ACP for all Non-Highly Compensated
Employees multiplied by two (2) and the difference between
the ACP is not more than two (2) percentage points.
(i) Special Rules. For purposes of Section 4.13(b):
(1) Matching Contributions will be considered made for a
Plan Year if made no later than the end of the twelve month
period beginning on the day after the close of the Plan Year.
(2) If two or more plans which include cash or defer-red
arrangements (as defined under Treas. Reg. Section 1.401(k)-I(a)(2)
and referred to for purposes of this Section as
"Arrangements") are considered one plan for the purposes of
Code Section 401(a)(4) or 401(b), and to satisfy Code Section
401(m), the Arrangements included in such plans shall be
treated as one Arrangement provided the Arrangements have the
same Plan Year.
(3) If a Highly Compensated Employee is a Participant under
two (2) or more Arrangements of the Employer or a member of
the Employer's Controlled Group and such Arrangements are
aggregated on a mandatory or permissive basis to satisfy the
requirements Of Code Sections 401(m), 401(a)(4) or 410(b),
all such Arrangements shall be treated as one Arrangement for
the purpose of determining the ACP with respect to such
Highly Compensated Employee. Any Arrangement ending with or
within the same calendar year shall be aggregated for
purposes of determining the ACP with respect to such Highly
Compensated Employee and the aggregate ACP shall be treated
as if made under each Arrangement. However, plans required
to be disaggregated under Code Section 401(m) regulations
shall be treated as separate plans.
(4) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test.
(5) The determination and treatment of the ACP amounts of
any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
(j) Correction Excess Aggregate Contributions. If the ACP of the
Highly Compensated Employees would exceed the limits in 4.13(h),
the Plan Administrator shall correct the ACP, determine the amount
of Excess Aggregate Contributions and reduce such Excess Aggregate
Contributions as follows:
(1) The ACP of the Highly Compensated Employee with the
highest ACP shall be reduced by having his/her Excess
Aggregate Contributions under 4.13(h) be forfeited, if
forfeitable, or distributed to the Highly Compensated
Employee to whom they apply on a pro rata basis from the
Highly Compensated Employee's Matching Contribution Account.
(2) If the ACP test of the Highly Compensated Employees
continues to exceed the limits in Section 4.13(h) after
reducing the ACP of the Highly Compensated Employee with the
highest ACP, then the Plan Administrator will continue to
reduce the ACP similarly by this method of leveling to the
ACP of the Highly Compensated Employee with the next highest
ACP until such ACP test is satisfied.
(3) Forfeitures of Excess Aggregate Contributions shall be
reallocated to the Accounts of Non-Highly Compensated
Employees. After the allocation of all other Forfeitures of
the Plan, Forfeitures of Excess Aggregate Contributions shall
be reallocated to the Matching Contribution Account of each
Non-Highly Compensated Employee, who made Elective Deferral
Contributions to the Plan for the Plan Year during which such
Excess Aggregate Contributions are attributable, in the ratio
which each of such Non-Highly Compensated Employee's
Compensation bears to the Compensation of all such Non-Highly
Compensated Employees' Compensation for the Plan Year.
(k) Multiple Use of Alternative Limitation. To satisfy the ADP
test and the ACP test, both tests may not rely on the alternative
method, namely Section 4.13(b)(2) and Section 4.13(h)(2) above.
The ADP test and the ACP test must satisfy the following "aggregate
limit", which is the sum of:
(1) 125 percent of the greater of (1) the ADP for the Non-Highly
Compensated Employees for the Plan Year, or (ii) the
ACP of the Non-Highly Compensated Employees, and
(2) Two (2) plus the lesser of the ADP or ACP for the Non-Highly
Compensated Employees, but not more than 200% of the
lesser of such ADP or ACP.
"Lesser" shall be substituted for "greater" in (1) above,
and,"greater" shall be substituted for "lesser" after "Two (2) plus
the" in (2) above, if a larger "aggregate limit" results.
The Plan Administrator will correct multiple use of the alternative
limitation by first reducing the ACP of Highly Compensated
Employees in order of their contribution percentages beginning with
the highest of such percentages and as further specified in Section
4.130) above.
(l) When to Distribute Excess Amounts. Distribution of such
Excess Contributions and Excess Aggregate Contributions shall be
made no later than the last day of the Plan Year immediately
following the last day of the Plan Year in which such excess
amounts apply. If such excess amounts are distributed more than
2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, the Code imposes a ten percent (10%) excise tax on
the Employer with respect to such amounts.
(m) Correction of Excess Aggregate Contributions for "Family
Members". Excess Aggregate Contributions of Participants who are
subject to "family member" aggregation rules shall be allocated
among the "family members" in proportion to the Matching
Contributions (or amounts treated as Matching Contributions) of
each "family member" that is combined to determine the combined
ACP.
(n) Income Allocable to Excess Aggregate Contributions. The
income allocable to Excess Aggregate Contributions for the Plan
Year in which such excess amounts apply shall be distributed along
with distributions designated as Excess Aggregate Contributions for
the Plan Year. Income allocable to such Excess Aggregate
Contributions shall be equal to allocable gains and income, less
allocable losses and expenses for such Plan Year. The Plan shall
allocate income for this section in the same manner as set forth
in Section 5. 1 of the Plan.
No income shall be allocated to Excess Aggregate Contributions for
the period between the end of the Plan Year and the date of
distribution (the "gap period").
(o) Excess Aggregate Contributions as Annual Additions. Any
Excess Aggregate Contributions made pursuant to this Section shall
be treated as an Annual Addition under Section 4.6 of the Plan.
18. There shall be added to the Plan a new Section 4.15:
Section 4.15. Matching Contribution
(1) All Matching Contributions made by the Employer shall
be deposited in the appropriate Participant's Account. Each
such Matching Contribution Account shall be credited with
income applicable to such Matching Contribution.
19. Section 5.1 of the Plan shall be amended and restated as follows:
Section 5. 1. Trust Fund and Allocation of Ear
The Trustee shall maintain or cause to be maintained Accounts which
shall accurately reflect, from time to time, the value of the
interest of each Participant in the Trust Fund resulting from the
contributions of the Employer allocated to each Participant. In
this condition the Accounts shall reflect each Participant's share
of interest, dividends, realized and unrealized gains and income
from all source ' s, less realized and unrealized losses and
expenses (other than those to be borne by the Employer in
accordance with this Plan). Such sum shall be determined as of the
Valuation Date of each Plan Year and, after allocating the (i)
Employer ESOP Contributions, (ii) Elective Deferral Contributions,
and (iii) Matching Contributions for such Plan Year, allocated as
a credit or charge to the Account of each Participant in the same
proportion that the balance of the Account of each Participant as
of the date following the last Valuation Date bears to the total
of the balances of the Accounts of all Participants as of such
date; provided, however, that distribution payments made during the
Plan Year, but prior to the Valuation Date shall first be deducted
from such balances.
20. Section 5.4 of the Plan shall be amended and restated as follows:
(a) Elective Deferral Contributions and Matching Contributions to
the Plan together with any earnings thereon shall be deposited in
the Trust Fund and held temporarily in a stable income or similar
fund designed to protect principal at a rate of return competitive
with money market funds (the "Fund") until such monies are used to
acquire Employer Stock.
(d) The Participant's Elective Deferral Account and Matching
Contribution Account which is invested in the Fund at the annual
purchase date shall be used to purchase Employer Stock unless
other-wise directed by the Participant as to the Participant's
Elective Deferral Contributions, in which case such monies shall
continue to be invested in accordance with paragraph (a) above,
until the next annual purchase of Employer stock.
21. The vesting schedule contained in Paragraph (a) of Section 6.7 of
the Plan shall be amended and restated to provide as follows:
Fewer than 5 years 0%
5 years but fewer than 6 60%
6 years but fewer than 7 80%
7 years of more 100%
22. Subparagraph (c)(1) of Section 8.5 of the Plan shall be amended in
its entirety to provide as follows:
(1) The amount deferred is adequately secured in the following
manner: a promissory note shall be given to the Participant, the
full payment of which could be required by the holder if the
repurchaser defaults in the payment of a scheduled installment
payment, together with a pledge of the Employer Stock being
repurchased as adequate security for the outstanding amount of the
note. In addition, if the term of the installment obligation
exceeds five (5) years, the repurchaser must give the holder
additional adequate security for the outstanding amount of the
note.
23. Paragraph (b) of Section 8.13 shall be amended and restated to read
as follows:
(b) If a Participant elects to withdraw all or part of his vested
Account balance by making a written request for a distribution,
then the distribution of the Participant's vested Account balance
for which an election is made shall be made as follows: A
distribution shall be made within one year after the end of the
Plan Year to which the election applies in an amount equal to the
requested amount, but not more than the greater of (i) an amount
determined by the Plan Administrator for such Plan Year or (ii) the
maximum annual distribution allowed under Section 498OA(c)(1) for
non-lump sum distributions without incurring an excise tax, for the
Plan Year in which the request is made. The amount to be
determined by the Plan Administrator shall be determined for each
Plan Year as of the last day of the Plan Year, and may be changed
from year to year. Any requested amount which exceeds the amount
to be distributed in the first year shall be distributed in
substantially equal installments over a period not to exceed ten
(10) years, commencing with the year following the year in which
the initial distribution is made.
24. Paragraph (a) of Section 8.15 shall be amended to add to the end
thereto the following language:
The Plan Administrator shall provide a Distributee with notice of
this right not less than 30 days or more than 90 days before the
distribution, provided that distributions may commence less than 30
days after notice is given if:
The Plan Administrator clearly informs the Distributee that
the Distributee has a right to a period of at least 30 days
after receiving- the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
The Distributee after receiving the notice, affirmatively elects a
distribution.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates indicated below.
G.R. HERBERGER'S, INC., Employer
Dated: ________________________ By: ____________________________
Its: President
By: ____________________________
Its: Vice President
NORWEST BANK MINNEAPOLIS, NATIONAL
ASSOCIATION, as Trustee
Dated: _________________________ By: _____________________________
Its: Asst. Vice President
By: _____________________________
Vice President
NO. 4
TO
G.R. HERBERGER'S, INC.
401(k) EMPLOYEE STOCK PURCHASE PLAN
AND
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, G.R. Herberger's, Inc. (the "Sponsor") has adopted and
currently maintains the G.R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan (the "Plan") and has
established the related Employee Stock Ownership Trust (the "Trust");
and
WHEREAS, the Sponsor wishes to amend the Plan to clarify certain
provisions of the Plan; NOW, THEREFORE, the Sponsor hereby amends the
Plan as follows:
1. Section 2.15 shall be amended and restated as follows:
Section 2.15 Fair Market Value Per Share shall mean that value per
share as determined by the Plan Administrative Committee, provided
that in determining Fair Market Value Per Share the Plan
Administrative Committee shall obtain and rely upon a valuation
made by an independent appraiser, who satisfies the requirements
contained in Section 170(a)(1) of the Code and the Regulations
prescribed thereunder.
2. Section 5.2 shall be amended and restated as follows:
Section 5.2 Determination of Market Value
The Trustee shall, as provided in the Agreement and Declaration of
Trust, ascertain and certify the fair market value of the Trust
Fund as of the Valuation Date. Such valuation shall include the
Employer's contribution with respect to such Plan Year. Similar
valuations shall be made at such other times as necessary for the
purpose of determining the value of a Participant's Account. In
determining the fair market value of the Fund, the Trustee shall
use the Fair Market Value Per Share of the Employer Stock.
3. The fifth paragraph of Paragraph (a)(ii) of Section 8.1 shall be
amended and restated as follows:
The amount of any such earlier distribution shall be made in an
amount up to the full amount of the Participant's vested Account
balance but not in excess of a maximum distribution amount as
determined by the Plan Administrator for the Plan Year in which the
request is made. The amount determined by the Plan Administrator
shall be determined for each Plan Year as of the last day of the
Plan Year, and may be changed from year to year. Any requested
amount which exceeds the amount to be distributed in the first year
shall be distributed in substantially equal installments over a
period not to exceed ten (10) years, commencing with the year
following the year in which the initial distribution is made;
provided, however, that each subsequent installment will be subject
to the maximum amount for such Plan Year, as determined pursuant to
this Section 8. 1 (a)(ii).
4. Paragraph (b) of Section 8.13 shall be amended and restated as
follows:
(b) If a Participant elects to withdraw all or part of his vested
Account balance by making a written request for a distribution,
then the distribution of the Participant's vested Account balance
for which an election is made shall be made as follows: A
distribution shall be made within one year after the end of the
Plan Year to which the election applies in an amount equal to the
requested amount, but not more than the greater of (i) an amount
determined by the Plan Administrator for such Plan Year or (ii) the
maximum annual distribution allowed under Section 498OA(c)(1) for
non-lump sum distributions without incurring an excise tax, for the
Plan Year in which the request is made. The amount to be
determined by the Plan Administrator shall be determined for each
Plan Year as of the last day of the Plan Year, and may be changed
from year to year. Any requested amount which exceeds the amount
to be distributed in the first year shall be distributed in
substantially equal installments over a period not to exceed ten
(10) years, commencing with the year following the year in which
the initial distribution is made; provided, however, that each
subsequent installment will be subject to the maximum amount for
such Plan Year, as determined pursuant to this Section 8.13(b).
5. Section 10.4 shall be amended and restated as follows:
Section 10.4 Plan Administrative Committee
The Board of Directors of the Sponsor may, in its discretion,
appoint a committee of one or more persons, to be known as the Plan
Administrative Committee (Committee) to act as the Plan
Administrator in performing the duties of the Sponsor; provided,
however, that in determining the Fair Market Value Per Share
pursuant to Section 2.15, the Committee shall act as agents of the
Trustee and not as Plan Administrator. The members of the
Committee shall serve at the pleasure of the Board of Directors;
they may be officers, directors, or Employees of the Employer or
any other individuals. Any member may resign by delivering his
written resignation to the Board of Directors and to the Committee.
Vacancies in the Committee arising by resignation, death, removal
or otherwise, shall be filled by the Board of Directors. The
Sponsor shall advise the Trustee in writing of the names of the
members of the Committee and of changes in membership from time to
time.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates indicated below.
G.R. HERBERGER'S, INC., Employer
Dated: ________________________ By: ____________________________
Its: President
By: ____________________________
Its: Vice President
NORWEST BANK MINNEAPOLIS, NATIONAL
ASSOCIATION, as Trustee
Dated: _________________________ By: _____________________________
Its: Asst. Vice President
By: _____________________________
Vice President
AMENDMENT NO. 5 TO
G.R. HERBERGER'S, INC.
401 (k) EMPLOYEE STOCK PURCHASE PLAN AND
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, G.R. Herberger's, Inc. (the "Sponsor") has adopted and
currently maintains the G. R. Herberger's, Inc. 401 (k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan (the "Plan") and has
established the related Employee Stock Ownership Trust (the "Trust");
and
WHEREAS, the Sponsor has retained the right to amend. the Plan
under Section 13.1 of the Plan; and
WHEREAS, due to the changing nature of the Employer Stock it may
hold in the future, when such Employer Stock is publicly traded;
NOW, THEREFORE, the Sponsor hereby amends the Plan in the following
respects:
1. Section 2.15, "Fair Market Value Per Share" shall mean that
value per share determined as follows:
(a) If the Employer Stock is traded on a national securities
exchange or admitted to unlisted trading privileges on such
exchange, the fair market value on any given day shall be the
closing sales price for the Employer Stock on such day, as reported
in the Wall Street Journal or other newspaper of general
circulation;
(b) If the Employer Stock is not listed on a national securities
exchange, the fair market value on any given day shall be the
closing sale price for the Employer Stock on the NASDAQ National
Market System on such date, as reported in the Wall Street Journal
or other newspaper of general circulation;
(c) If the Employer Stock is not listed on a national securities
exchange, is not admitted to unlisted trading privileges on any
such exchange, and is not eligible for inclusion on the NASDAQ
National Market System, the fair market value on any given day
shall be the average of the closing representative's bid and asked
prices on such day, as reported on the NASDAQ National Market
System, and if not reported on such system, then as reported by the
National Quotation Bureau, Inc. or such other publicly available
compilation of the bid and asked prices of such common stock in any
over-the-counter market on which the Employer Stock is traded;
(d) If no public trading market for the Employer Stock exists, the
fair market value on any given day shall be an amount determined by
the Plan Administrator provided that in determining Fair Market
Value Per Share, the Plan Administrator shall obtain and rely upon
an evaluation made by an independent appraiser, provided such
appraiser satisfies requirements similar contained in the
Regulations prescribed under Section 170(a)(i) of the Code.
2. Subsection 2.19(d) shall be deleted in its entirety.
3. Section 2.33, "Valuation Date" shall be amended by deleting
the section and replacing it with the following language:
"Valuation Date" shall mean the last day of each Plan Year and, in
addition, any day of the Plan Year upon which the Fair Market Value
Per Share of Employer Stock and the fair market value of all other
investments can be determined in accordance with Sections 2.15 and
5.2."
4. Subsection 4.13(m) shall be deleted in its entirety.
5. A new subsection (f) shall be added to Section 5.4 to read as
follows:
"The Trustee shall purchase Employer Stock required for employee
investment under the 401 (k) Employee Stock Purchase Plan on the
open market or otherwise, with no obligation being imposed on the
Plan Sponsor or any member of its Controlled Group to sell Employer
Stock to the Trustee."
6. Subsection 6.2(a) shall be amended by deleting the text in the
third line which immediately follows the parenthetical, and replacing it
with the following:
"shall have his interest in that portion of this Account
attributable to Employer and Matching Contributions determined in
accordance with the following schedule:"
7. Subsection 6.2(b) shall be amended by deleting the text in the
third line which immediately follows the parenthetical, and replacing it
with the following:
"shall have his interest in that portion of this Account
attributable to Employer and Matching Contributions determined in
accordance with the following schedule:"
8. Subsection 6.7(a) shall be amended by deleting the third line,
and replacing it with the following:
"his interest in that portion of this Account attributable to
Employer and Matching Contributions determined in accordance with
the following schedule:"
9. Subsection 6.7(b) shall be amended by deleting the second line
and replacing it with the following:
"Employee misconduct shall have his vested interest in that portion
of this Account attributable to Employer and Matching Contributions
determined in accordance with the following schedule:"
10. Section 8.1, subsection (a)(ii) shall be amended by deleting
the second paragraph of subsection (a)(ii) and replacing it with the
following language:
"Notwithstanding anything contained in this Article VIII to the
contrary, any Participant who is eligible to receive a distribution
and who requests an immediate distribution of such Participant's
Elective Deferral Account shall receive a distribution of such
Elective Deferral Account in Employer Stock as soon as practicable
following such request unless the Participant has directed that his
Elective Deferral Account be held in cash, in which case, the
Elective Deferral Account shall be distributed in cash."
11. Section 8.1, subsection (a)(ii) Small be amended by deleting
the third paragraph of that Section and replacing it with the following
language:
"Amounts to be distributed under this Section 8.'l (a) (ii) prior
to the end of the fifth Plan Year following the Plan Year in which
Participant separated from service shall be distributed in the form
of Employer Stock except that partial shares, any Participant
Elective Deferral Account assets held in cash subject to the
Participant's direction and any dividends shall be paid in cash."
The remainder of Section 8.1 (a) (ii) shall remain in its current form.
12. Section 8.1, subsection (c)(i) shall be deleted and replaced
with the following language:
"(c) Required Distributions Before Death
(i) General Rule. Effective January 1, 1997, distribution of a
Participant's Account must be made or commenced to the Participant
not later than April 1 of the calendar year following the calendar
year in which the later of two events occurs: (A) the Participant
attains age 70@; or (B) the Participant retires from active
employment. Between January 1, 1989 and January 1, 1997,
distribution of a Participant's Account must be made or commenced
to the Participant not later than April 1 of the calendar year
following the calendar year in which the Participant attains age
70%, regardless of whether the Participant is actually retired from
active employment."
13. Section 8.3 "Form of Distribution" shall be amended by
deleting subparagraph (a) and replacing it with the following language:
"(a) Distribution of a Participant's Account shall be made in whole
shares of Employer Stock valued at its Fair Market Value Per Share
as of the date set forth in Section 5.2. Balances representing
fractional shares, dividends and Elective Deferral Account assets
held in cash at the Participant's direction will be distributed in
cash. In the event Employer Stock is not available for
distribution on the date a distribution is due hereunder, the
trustee shall hold such amount until Employer Stock is acquired."
14. Section 8.5 "Put Option" shall be amended by adding the
following sentence at the beginning of the Section:
"(a) This Section 8.5 shall only apply if the Employer Stock is not
publicly traded at the time of distribution."
The remaining subsections of Section 8.5 shall be redesignated (b)
through (f).
15. Section 8.6 "Right of First Refusal" shall be amended by
adding the following sentence at the beginning of the Section:
"(a) This Section 8.6 shall only apply if the Employer Stock is not
publicly traded at the time of distribution."
The remaining subsections of Section 8.6 shall be renumbered (b) through
(f).
16. Section 8.13 "Distribution Upon Attaining Age 59@" shall be
amended by adding a new subsection (c) to read as follows:
"(c) Any distributions under this Section shall be made in Employer
Stock with respect to whole shares, valued at their Fair Market
Value Per Share as of the date set forth in Section 5.2 hereof.
Balances representing fractional shares, dividends and Elective
Deferral Account assets held in cash at the direction of the
Participant will be distributed in cash."
17. Section 8.14 shall be amended by adding a new subsection (g)
to read as
follows:
"(g) Any distributions under this Section shall be made in Employer
Stock with respect to whole shares, valued at their Fair Market
Value Per Share as of the date set forth in Section 5.2 hereof.
Balances representing fractional shares, dividends and account
assets held in cash at the direction of the Participant will be
distributed in cash."
18. Subsection 10.2(a) shall be deleted and replaced with the
following:
"The Plan Administrator shall be responsible for, and shall have
the discretionary authority to control and manage, the operation
and administration of the Plan."
19. The first sentence of Subsection 10.2(b) shall be deleted and
replaced with the following:
"The Plan Administrator shall have the discretionary authority to
interpret the Plan and shall determine all questions arising in the
administration, interpretation, and application of the Plan,
including but not limited to questions of eligibility and the
status and rights of Participants, Beneficiaries and other
persons."
20. Section 10.4 shall be deleted in its entirety and replaced
with the following:
"10.4 Plan Administrative Committee. The Board of Directors of the
Sponsor may, in its discretion, appoint a committee of one or more
persons, to be known as the Plan Administrative Committee
("Committee") to act as the Plan Administrator. The members of the
Committee shall serve at the pleasure of the Board of Directors,
they may be officers, directors, or Employees of the Employer or
any other individuals. Any member may resign by delivering his
written resignation to the Board of Directors and to the Committee.
Vacancies in the Committee arising by resignation, death, removal
or otherwise, shall be filled by the Board of Directors. The
Sponsor shall advise the Trustee in writing of the names of the
members of the Committee and of changes in membership from time to
time."
21. Section 10.9 shall be amended by adding a new subsection (c)
to read as
follows:
" (c) If the Employer Stock is publicly traded, a Participant shall
be entitled to direct the Trustee as to the manner in which voting
rights of the Employer Stock allocated to his Account are to be
exercised with respect to all corporate matters subject to
shareholder vote."
Subsections (c) and (d) shall be redesignated (d) and (e).
22. The first sentence of Section 13.1 shall be amended by
inserting a period immediately following "advisable" and deleting the
remainder of the sentence.
23. Article XIII shall be amended by adding the following Section
13.4:
"13.4 Amendment of Vesting Schedule. At any time that the vesting
schedule of the Plan is amended, or the Plan is amended in any way
that directly or indirectly affects the computation of the
Participant's nonforfeitable interest in his Account, each
Participant who has completed at least three Years of Service,
whether or not consecutive, may elect to have his vested interest
in his Employer and Matching Contributions Accounts determined
under the vesting schedule in effect prior to such amendment. A
Participant shall deliver such written election to the Plan
Administrator at any time within 60 days after the later of the
date: (a) the amendment is adopted; (b) the amendment becomes
effective; or (c) the Participant is issued written notice of the
amendment.
"An election under this Section shall be irrevocable. For purposes
of this Section, a Participant shall be considered to have
completed three Years of Service if he shall have completed such
years prior to the end of the period during which he could make an
election hereunder."
Except as where otherwise noted, this Amendment shall be effective
January 1, 1997.
IN WITNESS WHEREOF, the parties have executes this Agreement as of
the dates indicated below:
G.R. HERBERGER'S, INC., Sponsor
Dated: ________________________ By: ____________________________
Its: President
By: ____________________________
Its: Vice President
NORWEST BANK MINNEAPOLIS, NATIONAL
ASSOCIATION, as Trustee
Dated: _________________________ By: _____________________________
Its: Asst. Vice President
By: _____________________________
Vice President
PROFFITT'S, INC.
750 Lakeshore Parkway
Birmingham, AL 35211
Brian J. Martin
Senior Vice President of
Human Resources and Law
General Counsel
May 2, 1997
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: G.R. Herberger's, Inc. 401(k) Employee Stock
Purchase Plan and Employee Stock Ownership Plan
The registrant, Proffitt's, Inc., has undertaken to submit the
above referenced plan and any amendments thereto (the "Plan") to
the Internal Revenue Service. The Registrant will make all changes
required by the IRS in order to qualify the Plan under the Internal
Revenue Code.
Sincerely,
By: /s/ Brian J. Martin
---------------------------------
Brian J. Martin
Executive Vice President of
Law and
General Counsel
