As filed with the Securities and Exchange Commission
on November 3, 1998
Registration No.333-
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
Form S-8
Registration Statement
Under
The Securities Act of 1933
SAKS INCORPORATED
(Formerly Proffitt's, Inc.)
Tennessee 62-0331040
(State of Incorporation)(IRS Employer Identification No.)
750 Lakeshore Parkway
B irmingham, Alabama 35211
(205) 940-4000
(Address of Principal Executive Office)
Saks Fifth Avenue Retirement Savings Plan
(Full title of the plan)
R. Brad Martin
Chairman of the Board and Chief Executive Officer
Saks Incorporated
750 Lakeshore Parkway
Birmingham, AL 35211
205-940-4000
(Name, address and telephone number of agent for service)
Copies to:
Philip L. McCool, Esq. Brian J. Martin, Esq.
Sommer & Barnard, PC Saks Incorporated
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
class of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate registration
registered registered(1) per share offering price fee
----------- ----------- ----------- ------------ -----------
Common Stock,
$ .10 par value .... 733,977 $20.4366(2)$14,999,99.36 (2)$4,170.00
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit
plan described 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 New York Stock Exchange on October 28, 1998.
(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 for the Saks Fifth Avenue Retirement Savings Plan (the
"Plan") 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 May 1, 1998 on Form 10-K for
the fiscal year ended January 31, 1998;
(b) The Plan's Annual Report on Form 11-K/A filed with the SEC on
June 30, 1998.
(c) The Registrant's Quarterly Reports filed with the SEC on June
8, 1998 and September 14, 1998 for the fiscal quarters ended
May 2, 1998 and August 1, 1998, respectively;
(d) The Registrant's Current Reports on Form 8-K filed with the
SEC on February 11, February 17, March 26, April 13, July 8,
July 14 (as amended), August 4, August 20, August 31,
September 11, and two filings on September 23, 1998;
(e) The Registrant's Registration Statement on Form 8-A filed
March 26, 1998 in respect of the Proffitt's Rights Agreement;
and
(f) The information contained in "Description of Proffitt's
Capital Stock" in the Registrant's Registration Statement on
Form S-4 (Reg. No. 333-17059) filed with the Securities and
Exchange Commission on July 29, 1998.
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 two-hundredth (one/200) of a share of Series C
Preferred Stock at a price of $85 per one one-hundredth (one/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.
Not 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
4.1 Saks Fifth Avenue Retirement Savings Plan
5.1 Opinion of Counsel (since the shares are not
original issue securities, no opinion re: legality
is required)
5.2 Determination Letter for the Saks Fifth Avenue
Retirement Savings Plan
23.1 Consent of PricewaterhouseCoopers LLP (Form 11-K/A
for the Saks Fifth Avenue Retirement Savings Plan)
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of PricewaterhouseCoopers LLP
24.0* Power of Attorney
_________________________________
*Previously filed
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 requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf
by the Undersigned, thereunto duly authorized, in the city of
Birmingham, State of Alabama, on the 3rd day of November, 1998.
Saks Incorporated
By: /s/ Brian J. Martin
________________________________
Brian J. Martin
Executive Vice President of Law
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Brian J. Martin and Julia A.
Bentley, and each of them, his or her true and lawful attorney-in-fact
and agent with full power of substitution for him or her in his or her
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, including any
Registration Statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, 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 or she might or could do in person, and hereby ratifies
and confirms all that said attorneys-in-fact and agents or their or his
or her substitute or substitutes may 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 on November 3, 1998 by the
following persons in the capacities indicated.
/s/ R. Brad Martin
___________________________
R. Brad Martin Chairman of the Board and Chief
Executive Officer (Principal
Executive Officer)
/s/ Ronald deWaal
___________________________
Ronald deWaal Vice Chairman and Director
/s/ Douglas E. Coltharp
___________________________
Douglas E. Coltharp Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
/s/ Donald E. Wright
___________________________
Donald E. Wright Senior Vice President of Finance and
Chief Accounting Officer (Principal
Accounting Officer)
___________________________
Bernard E. Bernstein Director
/s/ Stanton J. Bluestone
___________________________
Stanton J. Bluestone Director
/s/ John E. Burden, III
___________________________
John W. Burden, III Director
___________________________
Edmond D. Cicala Director
/s/ James A. Coggin
___________________________
James A. Coggin Director
___________________________
Julius Erving Director
/s/ Michael S. Gross
___________________________
Michael S. Gross Director
/s/ Donald E. Hess
___________________________
Donald E. Hess Director
/s/ G. David Hurd
___________________________
G. David Hurd Director
/s/ Philip B. Miller
___________________________
Philip B. Miller Director
/s/ Robert M. Mosco
___________________________
Robert M. Mosco Director
/s/ C. Warren Neel
___________________________
C. Warren Neel Director
/s/ Charles J. Philippin
___________________________
Charles J. Philippin Director
/s/ Stephen I. Sadove
___________________________
Stephen I. Sadove Director
___________________________
Marguerite W. Sallee Director
/s/ Gerald Tsai, Jr.
___________________________
Gerald Tsai, Jr. Director
The Plan. Pursuant to the requirements of the Securities Act,
the Trustee for the Saks Fifth Avenue Retirement Savings Plan has
duly caused this registration statement to be signed on its behalf by
the Undersigned, thereunto duly authorized, in the City of New York,
State of New York, on the 3rd day of November, 1998.
Saks Fifth Avenue Retirement Savings
Plan
By: /s/ Brian J. Martin
___________________________________
Name: Brian J. Martin
Title: Plan Administrator
INDEX TO EXHIBITS FILED
TO REGISTRATION STATEMENT ON
FORM S-8 OF SAKS INCORPORATED
Exhibit
Number Description
4.1 Saks Fifth Avenue Retirement Savings Plan
5.1 Opinion of Counsel (since the shares are not
original issue securities, no opinion re: legality
is required)
5.2 Determination Letter for the Saks Fifth Avenue
Retirement Savings Plan
23.1 Consent of PricewaterhouseCoopers LLP (Form 11-K/A
for the Saks Fifth Avenue Retirement Savings
Plan)
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of PricewaterhouseCoopers LLP
24.0* Power of Attorney
_________________________________
*Previously filed
Exhibit 4.1
SAKS FIFTH AVENUE
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE 1.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. Active Participant . . . . . . . . . . . . . . . . . .1
1.2. Actual Contribution Percentage . . . . . . . . . . . .1
1.3. Actual Deferral Percentage . . . . . . . . . . . . . .1
1.4. Additional Company Contribution. . . . . . . . . . . .2
1.5. Additional Company Contributions Account . . . . . . .2
1.6. Adjustment Factor. . . . . . . . . . . . . . . . . . .2
1.7. Affiliated Company . . . . . . . . . . . . . . . . . .2
1.8. After-Tax Contributions. . . . . . . . . . . . . . . .2
1.9. After-Tax Contributions Account. . . . . . . . . . . .3
1.10. Annual Addition . . . . . . . . . . . . . . . . .3
1.11. Before-Tax Contributions. . . . . . . . . . . . .3
1.12. Before-Tax Contributions Account. . . . . . . . .3
1.13. Beneficiary . . . . . . . . . . . . . . . . . . .3
1.14. Board of Directors. . . . . . . . . . . . . . . .3
1.15. Cash or Deferred Contributions. . . . . . . . . .4
1.16. Code. . . . . . . . . . . . . . . . . . . . . . .4
1.17. Company . . . . . . . . . . . . . . . . . . . . .4
1.18. Compensation. . . . . . . . . . . . . . . . . . .4
1.19. Compensation Deferral Agreement . . . . . . . . .4
1.20. Continued Employee. . . . . . . . . . . . . . . .4
1.21. Date of Hire. . . . . . . . . . . . . . . . . . .4
1.22. Date of Rehire. . . . . . . . . . . . . . . . . .4
1.23. Date of Severance . . . . . . . . . . . . . . . .4
1.24. Defined Benefit Plan Fraction . . . . . . . . . .4
1.25. Defined Contribution Plan Fraction. . . . . . . .5
1.26. Determination Date. . . . . . . . . . . . . . . .5
1.27. Disability. . . . . . . . . . . . . . . . . . . .5
1.28. Effective Date. . . . . . . . . . . . . . . . . .6
1.29. Eligibility Service . . . . . . . . . . . . . . .6
1.30. Eligible Employee . . . . . . . . . . . . . . . .6
1.31. Employee. . . . . . . . . . . . . . . . . . . . .6
1.32. Entry Date. . . . . . . . . . . . . . . . . . . .6
1.33. ERISA . . . . . . . . . . . . . . . . . . . . . .6
1.34. Family Member . . . . . . . . . . . . . . . . . .6
1.35. Forfeiture. . . . . . . . . . . . . . . . . . . .7
1.36. Forfeiture Event. . . . . . . . . . . . . . . . .7
1.37. '415' Compensation. . . . . . . . . . . . . . . .7
1.38. '414(s)' Compensation . . . . . . . . . . . . . .7
1.39. Highly Compensated Employee . . . . . . . . . . .8
1.40. Hour of Service . . . . . . . . . . . . . . . . .9
1.41. Inactive Participant. . . . . . . . . . . . . . .9
1.42. Investment Fund . . . . . . . . . . . . . . . . .9
1.43. Investment Manager. . . . . . . . . . . . . . . .9
1.44. Key Employee. . . . . . . . . . . . . . . . . . .9
1.45. Limitation Year . . . . . . . . . . . . . . . . 10
1.46. Loan. . . . . . . . . . . . . . . . . . . . . . 10
1.47. Loan Fund . . . . . . . . . . . . . . . . . . . 10
1.48. Matching Contributions. . . . . . . . . . . . . 10
1.49. Matching Contributions Account. . . . . . . . . 10
1.50. Maternity or Paternity Leave. . . . . . . . . . 10
1.51. Named Fiduciary . . . . . . . . . . . . . . . . 11
1.52. Normal Retirement Act . . . . . . . . . . . . . 11
1.53. Participant . . . . . . . . . . . . . . . . . . 11
1.54. Pay Date. . . . . . . . . . . . . . . . . . . . 11
1.55. Pay Period. . . . . . . . . . . . . . . . . . . 11
1.56. Payroll Deduction Agreement . . . . . . . . . . 11
1.57. Period of Service . . . . . . . . . . . . . . . 11
1.58. Period of Severance . . . . . . . . . . . . . . 11
1.59. Plan. . . . . . . . . . . . . . . . . . . . . . 11
1.60. Plan Administrator. . . . . . . . . . . . . . . 11
1.61. Plan Asset Committee. . . . . . . . . . . . . . 11
1.62. Plan Year . . . . . . . . . . . . . . . . . . . 11
1.63. Prior Plan. . . . . . . . . . . . . . . . . . . 12
1.64. Qualified Domestic Relations Order. . . . . . . 12
1.65. Quarterly Date. . . . . . . . . . . . . . . . . 12
1.66. Restricted Additional Company Contributions . . 12
1.67. Restricted Additional Company Contributions
Account. . . . . . . . . . . . . . . . . . . . . . . 12
1.68. Restricted After-Tax Contributions. . . . . . . 12
1.69. Restricted After-Tax Contributions Account. . . 12
1.70. Restricted Matching Contributions . . . . . . . 12
1.71. Restricted Matching Contributions Account . . . 12
1.72. Rollover Account. . . . . . . . . . . . . . . . 12
1.73. Rollover Contributions. . . . . . . . . . . . . 12
1.74. Service . . . . . . . . . . . . . . . . . . . . 13
1.75. Spouse. . . . . . . . . . . . . . . . . . . . . 13
1.76. Top Heavy Year. . . . . . . . . . . . . . . . . 13
1.77. Trust Agreement . . . . . . . . . . . . . . . . 14
1.78. Trust Fund. . . . . . . . . . . . . . . . . . . 14
1.79. Trustee . . . . . . . . . . . . . . . . . . . . 14
1.80. Valuation Date. . . . . . . . . . . . . . . . . 14
1.81. Vesting Service . . . . . . . . . . . . . . . . 14
1.82. Year of Service . . . . . . . . . . . . . . . . 14
ARTICLE 2.
SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1. Eligibility Service. . . . . . . . . . . . . . . . . 15
2.2. Vesting Service. . . . . . . . . . . . . . . . . . . 16
ARTICLE 3.
PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . 19
3.1. Commencement of Active Participation . . . . . . . . 19
3.2. Commencement of Inactive Participation . . . . . . . 19
3.3. Termination of Participation . . . . . . . . . . . . 19
ARTICLE 4.
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 20
4.1. Before-Tax Contributions . . . . . . . . . . . . . . 20
4.2. After-Tax Contributions. . . . . . . . . . . . . . . 21
4.3. Matching Contributions and Restricted Matching
Contributions. . . . . . . . . . . . . . . . . . . . 22
4.4. Additional Company Contributions and Restricted
Additional Company Contributions . . . . . . . . . . 23
4.5. Rollover Contributions . . . . . . . . . . . . . . . 24
ARTICLE 5.LIMITATIONS ON CONTRIBUTIONS . . . . . . . . . . . . 26
5.1. $7.000 (As Indexed) Limit on Before-Tax Contributions26
5.2. Average Deferral Percentage Test . . . . . . . . . . 26
5.3. Average Contribution Percentage Test . . . . . . . . 29
5.4. Combined Average Deferral Percentage and Average
Contribution Percentage Test . . . . . . . . . . . . 31
5.5. Maximum Limit on Contributions . . . . . . . . . . . 33
5.6. Deductibility of Contributions by Companies. . . . . 35
ARTICLE 6.INVESTMENT OF FUNDS. . . . . . . . . . . . . . . . . 36
6.1. Investment Funds . . . . . . . . . . . . . . . . . . 36
6.2. Participant Selection of Investments . . . . . . . . 36
6.3. Loan Fund. . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 7.PLAN ACCOUNTS. . . . . . . . . . . . . . . . . . . . 37
7.1. Accounts . . . . . . . . . . . . . . . . . . . . . . 37
7.2. Crediting Investment Earnings. . . . . . . . . . . . 37
7.3. Accounting . . . . . . . . . . . . . . . . . . . . . 37
7.4. Risk of Loss . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 8.
VESTING . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1. Vested Interest. . . . . . . . . . . . . . . . . . . 39
ARTICLE 9.HARDSHIP AND OTHER WITHDRAWAL RIGHTS . . . . . . . . 40
9.1. Hardship Withdrawals of Before-Tax Contributions . . 40
9.2. Withdrawals of After-Tax and Rollover Contributions. 41
9.3. Withdrawals After Attainment of Age 59 1/2 . . . . . 42
9.4. Withdrawals Upon Plan Termination, Sale of Assets. or
Sale of Subsidiary . . . . . . . . . . . . . . . . . 42
9.5. Repayment of Withdrawals . . . . . . . . . . . . . . 42
ARTICLE 10.FORFEITURES . . . . . . . . . . . . . . . . . . . . 43
10.1. Forfeitures . . . . . . . . . . . . . . . . . . 43
10.2. Allocation of Forfeitures . . . . . . . . . . . 43
10.3. Restoration of Forfeitures. . . . . . . . . . . 43
ARTICLE 11.PARTICIPANT'S BENEFITS UPON SEPARATION FROM EMPLOYMENT44
11.1. Participant's Benefits. . . . . . . . . . . . . 44
11.2. Form of Benefits. . . . . . . . . . . . . . . . 44
11.3. Commencement of Benefits. . . . . . . . . . . . 44
11.4. Distributions . . . . . . . . . . . . . . . . . 46
11.5. Participant Directed Rollovers. . . . . . . . . 46
<PAGE>
ARTICLE 12.BENEFICIARY'S BENEFITS UPON PARTICIPANT'S DEATH . . 48
12.1. Beneficiary's Benefits. . . . . . . . . . . . . 48
12.2. Form of Benefits. . . . . . . . . . . . . . . . 48
12.3. Commencement of Benefits. . . . . . . . . . . . 48
12.4. Designation of Beneficiary. . . . . . . . . . . 48
12.5. Distributions . . . . . . . . . . . . . . . . . 49
ARTICLE 13.
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.1. Loan Amount, Term and Interest Rate . . . . . . 50
13.2. Frequency of Loans. . . . . . . . . . . . . . . 51
13.3. Security for Loans. . . . . . . . . . . . . . . 51
13.4. Repayment . . . . . . . . . . . . . . . . . . . 52
13.5. Further Limitations on Loans. . . . . . . . . . 53
13.6. Certain Beneficiaries and Inactive Participants 53
13.7. Loans from Prior Plan . . . . . . . . . . . . . 53
ARTICLE 14.ADMINISTRATION OF PLAN . . . . . . . . . . . . 54
14.1. Appointment of Plan Administrator . . . . . . . 54
14.2. Resignation and Removal of Plan Administrator . 54
14.3. Appointment of Successor. . . . . . . . . . . . 54
14.4. Power and Duties of the Plan Administrator. . . 54
14.5. Delegation of Duties. . . . . . . . . . . . . . 55
14.6. Plan Administrator's Account. . . . . . . . . . 55
14.7. Compensation of Plan Administrator. . . . . . . 55
14.8. Expenses. . . . . . . . . . . . . . . . . . . . 55
14.9. Information Required From Participants. . . . . 56
14.10. Records . . . . . . . . . . . . . . . . . . . . 56
14.11. Reports to Participant. . . . . . . . . . . . . 56
14.12. Multiple Fiduciary Capacity . . . . . . . . . . 56
ARTICLE 15.PLAN ASSET COMMITTEE. . . . . . . . . . . . . . . . 57
15.1. Appointment of Plan Asset Committee . . . . . . 57
15.2. Resignation and Removal of Members. . . . . . . 57
15.3. Appointment of Successors . . . . . . . . . . . 57
15.4. Committee Powers. . . . . . . . . . . . . . . . 57
15.5. Allocation and Delegation of Duties . . . . . . 58
15.6. Investment Manager. . . . . . . . . . . . . . . 58
15.7. Committee Procedure . . . . . . . . . . . . . . 59
15.8. Compensation and Expenses of Committee. . . . . 59
15.9. Records . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 16.
CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . 60
16.1. Claims for Benefits . . . . . . . . . . . . . . 60
16.2. Appeals Procedure . . . . . . . . . . . . . . . 60
ARTICLE 17.AMENDMENT AND TERMINATION . . . . . . . . . . . . . 61
17.1. Amendment . . . . . . . . . . . . . . . . . . . 61
17.2. Termination or Partial Termination. . . . . . . 61
17.3. Merger or Consolidation of Plan Assets; Mergers
into the Plan; Transfers of Plan Assets. . . . . . . 61
ARTICLE 18.MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . 63
18.1. No Contract of Employment . . . . . . . . . . . 63
18.2. No Liability for Benefits . . . . . . . . . . . 63
18.3. Exclusive Benefit of Trust Fund . . . . . . . . 63
18.4. Nonalienation . . . . . . . . . . . . . . . . . 64
18.5. Common Trust Fund . . . . . . . . . . . . . . . 65
18.6. Responsibility of Fiduciaries . . . . . . . . . 65
18.7. Indemnity by Companies. . . . . . . . . . . . . 66
18.8. Address for Notification: Inability to Locate
Participants or Beneficiaries . . . . . . . . . 66
18.9. Payment in Case of Incapacity . . . . . . . . . 66
18.10. Headings. . . . . . . . . . . . . . . . . . . . 67
18.11. Applicable Law. . . . . . . . . . . . . . . . . 67
18.12. Agent for Service . . . . . . . . . . . . . . . 67
SAKS FIFTH AVENUE
RETIREMENT SAVINGS PLAN
PREAMBLE
This instrument sets forth the terms and conditions of the
401(k) savings plan adopted by Saks & Company effective as of July
1, 1990, as thereafter amended, and as in effect as of the date of
execution of this instrument. Amendments to this Plan are
effective as of such dates as are set forth in such amendments and
instruments setting forth the terms of such amendments. Saks &
Company is a New York corporation with offices headquartered in New
York, New York.
The Plan and the trust established under the Trust Agreement
to implement the Plan are intended to constitute a profit-sharing
plan under Section 401(a) of the Internal Revenue Code of 1986 and
are intended to comply with the provisions of Section 401,
including Section 401(k), and Section 501 of the Internal Revenue
Code of 1986 and the requirements of ERISA, and the corresponding
provisions of any subsequent laws, and the provisions of the Plan
and Trust Agreement shall be construed to effectuate such
intention.
ARTICLE 1.
DEFINITIONS
For all terms used in this Plan, whether or not defined in
this Article 1., the masculine gender shall include the feminine
and the feminine gender shall include the masculine and the
singular shall include the plural and the plural shall include the
singular unless the context clearly indicates otherwise. The
following terms used in this Plan shall have the meanings set forth
in this Article 1.
1.1. Active Participant. "Active Participant" means a person
who has commenced, and remains in, active participation in the Plan
pursuant to Article 3.
1.2. Actual Contribution Percentage. "Actual Contribution
Percentage" means, with respect to a group of persons for a Plan
Year, the average of the ratios (expressed as a percent to the
nearest 0.01%), calculated separately (to the nearest 0.01%) for
each person in such group, of 1.2.1. to 1.2.2., where 1.2.1. and
1.2.2. are as follows:
1.2.1. After-Tax Contributions, Restricted After-Tax
Contributions, Matching Contributions (including Forfeitures,
if any, allocated as such to the person's accounts on the
basis of Before-Tax Contributions or After-Tax Contributions),
and Restricted Matching Contributions not treated as Before-Tax
Contributions in calculating the Actual Deferral Percentage for
such Plan Year;
1.2.2. the person's '414(s)' Compensation for such
Plan Year;
provided that, in accordance with such rules as shall be
promulgated by the Secretary of the Treasury, all or a part of
the Restricted Additional Company Contributions not treated as
Before-Tax Contributions in calculating the Actual Deferral
Percentage, and all or a part of the Before-Tax Contributions,
made to the Plan on behalf of the person for such Plan Year
may be treated by the Plan Administrator as Matching
Contributions for purposes of such calculation.
1.3. Actual Deferral Percentage. "Actual Deferral Percentage"
means, with respect to a group of persons for a Plan Year, the
average of the ratios (expressed as a percent to the nearest 0.01
%), calculated separately (to the nearest 0.01 %) for each person
in such group, of 1.3.1. to 1.3.2., where 1.3.1. and 1.3.2. are as
follows:
1.3.1. Before-Tax Contributions made to the Plan on
behalf of the person for such Plan Year;
1.3.2. the person's '414(s)' Compensation for such
Plan Year;
provided that in accordance with such rules as shall be
promulgated by the Secretary of the Treasury, all or a part of
the Restricted Additional Company Contributions and Restricted
Matching Contributions made to the Plan on behalf of the
person for such Plan Year may be treated by the Plan
Administrator as Before-Tax Contributions for purposes of such
calculation.
1.4. Additional Company Contribution. "Additional Company
Contributions" means amounts contributed to the Plan by the
Companies pursuant to Section 4.4.1.
1.5. Additional Company Contributions Account. "Additional
Company Contributions Account" means the account of a Participant
maintained pursuant to Section 4.4.1. and containing amounts
attributable to Additional Company Contributions.
1.6. Adjustment Factor. "Adjustment Factor" means the cost of
living adjustment factor prescribed by the Secretary of the
Treasury under Section 415(d) of the Code.
1.7. Affiliated Company. "Affiliated Company" means:
1.7.1. each Company;
1.7.2. any corporation which is a member of a
controlled group of corporations with a Company within the meaning
of Section 414(b) of the Code as of or after the Effective Date;
1.7.3. any trade or business (including a sole
proprietorship, partnership, trust, estate or corporation) which is
under common control with a Company within the meaning of Section
414(c) of the Code as of or after the Effective Date;
1.7.4. any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in
Section 414(m) of the Code) which includes a Company as of or after
the Effective Date;
1.7.5. any other entity required to be aggregated with
the Companies pursuant to regulations under Section 414(o) of the
Code as of or after the Effective Date; and
1.7.6. any other entity deemed to be an Affiliated
Company by the Board of Directors;
provided that an entity identified in subsection 1.7.2.,
1.7.3., 1.7.4. or 1.7.5. shall constitute an "Affiliated
Company" only for the period of time during which its
relationship to the Company satisfies the requirements of
subsection 1.7.2., 1.7.3., 1.7.4. or 1.7.5.
1.8. After-Tax Contributions. "After-Tax Contributions" means
amounts contributed to the Plan by a Participant out of his own
assets pursuant to Section 4.2. and "Participant Contributions"
under the Prior Plan.
1.9. After-Tax Contributions Account. "After-Tax
Contributions Account" means the account of a Participant
maintained pursuant to Section 4.2. and containing amounts
attributable to After-Tax Contributions.
1.10. Annual Addition. "Annual Addition" means the sum,
in any Limitation Year, of:
1.10.1. Before-Tax Contributions on behalf of a
Participant (before any reduction made pursuant to Sections
5.1.2., 5.2., and 5.4.);
1.10.2. the Participant's After-Tax Contributions
(before any reduction made pursuant to Sections 5.3. and
5.4.);
1.10.3. Matching Contributions and Restricted Matching
Contributions (the latter before any reduction made pursuant
to Section 5.2., and both before any reduction made pursuant
to Sections 5.3. and 5.4.) on behalf of the Participant;
1.10.4. Additional Company Contributions and Restricted
Additional Company Contributions on behalf of the Participant
(the latter before any reduction made pursuant to Sections
5.2., 5.3. and 5.4.;
1.10.5. Forfeitures, if any, allocated as such to the
Participant's accounts, but reduced by any amount permitted by
regulations promulgated by the Secretary of the Treasury; and
1.10.6. the Participant's annual additions (as defined
in Section 415(c)(2) of the Code) to all other defined
contribution plans of the Affiliated Companies, including any
amount allocated to an individual medical account of the
Participant as described in Section 415(1) of the Code, and
(if the Participant is a Key Employee) any amount allocated to
his post-retirement medical benefit account as described in
Section 419A(d) of the Code.
1.11. Before-Tax Contributions. "Before-Tax
Contributions" means amounts contributed to the Plan by the
Companies pursuant to Section 4.1. and "Elective Contributions"
under the Prior Plan.
1.12. Before-Tax Contributions Account. "Before-Tax
Contributions Account" means the account of a Participant
maintained pursuant to Section 4.l. and containing amounts
attributable to Before-Tax Contributions.
1.13. Beneficiary. "Beneficiary" means the one or more
persons or trusts designated or deemed as such pursuant to Article
1 2.
1.14. Board of Directors. "Board of Directors" means the
board of directors of Saks & Company or any officer or officers of
Saks & Company authorized by the Board of Directors to take action
on its behalf.
1.15. Cash or Deferred Contributions. "Cash or Deferred
Contributions" means any amounts that would qualify as compensation
but for the Participant's agreement to forego receipt thereof
pursuant to a cash or deferred arrangement under Section 401(k)(2)
of the Code (including a Compensation Deferral Agreement), a
cafeteria plan under Section 125 of the Code, a simplified employee
pension under Section 402(h) of the Code, or an annuity contract
under Section 403(b) of the Code.
1.16. Code. "Code" means the Internal Revenue Code of
1986, as amended from time to time.
1.17. Company. "Company" means Saks & Company or any
other company, or division or department of a company, having
employees to whom the Board of Directors has extended the benefits
of the Plan, or any successor entities (collectively, the
"Companies"). Any action by a Company provided for under the Plan
may be taken by the board of directors of that Company or by an
officer or officers of that Company authorized by such board of
directors to take such action. Any reference to the board of
directors or officers of a Company shall, with respect to a Company
which is a division or department of a company, be deemed to refer
to the board of directors or officers of the company of which such
Company is a division or department.
1.18. Compensation. "Compensation" means '414(s)'
Compensation.
1.19. Compensation Deferral Agreement. "Compensation
Deferral Agreement" means an agreement on a form provided by the
Plan Administrator by which a Participant agrees to forego receipt
of compensation in consideration for the Company's agreement to
make Before-Tax Contributions equal to such foregone compensation
in accordance with the terms of the Plan.
1.20. Continued Employee. "Continued Employee" means an
Eligible Employee employed by the Companies as of July 1, 1990.
1.21. Date of Hire. "Date of Hire" means the date so
defined in Section 2.2.l.
1.22. Date of Rehire. "Date of Rehire" means the date so
defined in Section 2.2.2.
1.23. Date of Severance. Date of Severance" means the
date so defined in Section 2.2.3.
1.24. Defined Benefit Plan Fraction. "Defined Benefit
Plan Fraction" means for any Limitation Year a fraction, the
numerator of which is the Participant's projected annual benefit
under all defined benefit plans (within the meaning of Section
414(j) of the Code) of the Affiliated Companies, which are
qualified under Sections 401 and 501 of the Code, determined as of
the close of the Limitation Year, and the denominator of which is
the lesser of:
1.24.1. 1.25 (1.0 for any Limitation Year beginning in
a Top Heavy Year) multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for that
Limitation Year, or
1.24.2. 1.4 multiplied by the amount that may be taken
into account under Section 415(b)(1)(B) of the Code with
respect to the Participant for that Limitation Year,
provided that if such defined benefit plan(s) (or prior plan(s)
from which assets and liabilities have been transferred to such
defined benefit plan(s)) satisfied the applicable requirements of
Section 415 of the Code as in effect for all limitation years
beginning before January 1, 1987, the denominator of the Defined
Benefit Fraction shall be determined in accordance with the rules
prescribed by the Secretary of the Treasury.
1.25. Defined Contribution Plan Fraction. "Defined
Contribution Plan Fraction" means for any Limitation Year a
fraction, the numerator of which is the sum of the Participant's
Annual Additions for all Limitation Years as of the close of such
Limitation Year and the denominator of which is the sum of the
lesser of the following amounts for such Limitation Year and for
each prior Limitation Year of service with the Affiliated
Companies:
1.25.1. 1.25 (1.0 for any Limitation Year beginning in
a Top Heavy Year) multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for that
Limitation Year (determined without regard to Section
415(c)(6) of the Code), or
1.25.2. 1.4 multiplied by the amount that may be taken
into account under Section 415(c)(1)(B) of the Code with
respect to the Participant for that Limitation Year.
1.26. Determination Date. "Determination Date" means,
with respect to any Plan Year, the last day of the immediately
preceding Plan Year or, with respect to the first Plan Year of the
Plan, the last day of such Plan Year.
1.27. Disability. "Disability" means a total and
permanent disability which is:
1.27.1. evidenced by receipt of a Social Security
disability pension;
1.27.2. evidenced by receipt of disability payments
under the Company's long-term disability program; or
1.27.3. certified by a qualified physician or
physicians approved by the Plan Administrator as preventing a
Participant by bodily injury or disease or mental disease from
engaging in any substantially similar occupation or employment
with an Affiliated Company and as likely to continue for the
rest of his life. Upon the consideration of the opinion of
such physician and the opinion(s) of such additional
physicians, if any, as the Plan Administrator in his
discretion may consider appropriate, the determination by the
Plan Administrator shall be final and binding on all persons.
The Plan Administrator shall not discriminate in any way
between Participants in applying the provisions of this
Section.
1.28. Effective Date. "Effective Date" means July 1,
1990.
1.29. Eligibility Service. "Eligibility Service" means
Service used to determine an Eligible Employee's eligibility to
become a Participant under the Plan, as the term is defined in
Section 2.1.4.
1.30. Eligible Employee. "Eligible Employee" means any
Employee (including any officer) employed (whether or not such
person is an exempt employee under Section 13(a)(1) of the Fair
Labor Standards Act) in a Company. Eligible Employee shall not
include, however, any nonresident alien with no U.S. source income,
any person covered by a collective bargaining agreement which does
not provide for participation in the Plan, nor any leased employee
within the meaning of Section 414(n)(2) of the Code included within
the definition of "Employee" in this Article 1., unless such leased
employee's participation in the Plan is necessary for the Plan to
be or remain qualified under Section 401(a) of the Code.
1.31. Employee. "Employee" means any person employed by
an Affiliated Company (but only while the Affiliated Company is, or
was, an Affiliated Company), including an Eligible Employee.
Employee shall, to the extent permitted by Section 406 of the Code,
be deemed to include any United States citizen employed by a
foreign subsidiary or affiliate of an Affiliated Company. Employee
shall not include, however, any director of a company not otherwise
employed as an Employee.
For purposes of determining the number or identity of Highly
Compensated Employees or for purposes of the pension requirements
of Section 414(n)(3) of the Code, Employee shall also include,
effective for services performed after December 31, 1986, leased
employees within the meaning of Section 414(n)(2) of the Code,
provided that if such leased employees constitute less than 20% of
the combined nonhighly compensated work force of the Affiliated
Companies within the meaning of Section 414(n)(5)(C)(ii) of the
Code, Employee shall not include those leased employees covered by
a plan described in Section 414(n)(5) of the Code.
1.32. Entry Date. "Entry Date" means the first day of
each month.
1.33. ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.34. Family Member. "Family Member" means, with respect
to an Employee, the Employee, the Employee's spouse and lineal
ascendants or descendants and the spouse of such lineal ascendants
or descendants; provided that at least one of said persons is a
"5-percent owner" or within the 10 most highly compensated Employees
(as described in subsections 1.44.2. and 1.44.3. of the definition
of Key Employee in this Article 1.); and provided further that for
purposes of determining Compensation and '414(s)' Compensation,
Family Member shall include only the Employee's spouse and lineal
descendants who have not attained age 1 9 before the close of the
Plan Year.
1.35. Forfeiture. "Forfeiture" means the value of the
nonvested portion of a Participant's Matching Contributions Account
and Additional Company Contributions Account upon the occurrence of
a Forfeiture Event.
1.36. Forfeiture Event. "Forfeiture Event" means with
respect to a Participant who is not 100% vested in all amounts
allocated to his Matching Contributions Account and Additional
Company Contributions Account, the occurrence of the earlier of:
1.36.1. the distribution of the entire nonforfeitable
portion of the Participant's accounts; or
1.36.2. a five (5) year Period oil Severance.
1.37. '415' Compensation. "'415' Compensation" means a
Participant's wages as defined in Section 3401 (a) of the Code for
purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed, for a Plan Year, Limitation Year or other
period, as applicable, from the Affiliated Companies. '415'
Compensation does not include Cash or Deferred Contributions.
'415' Compensation shall include only those amounts required to be
included in compensation for purposes of Section 415 of the Code.
1.38. '414(s)' Compensation. '414(s)' Compensation" means
'415' Compensation plus Cash or Deferred Contributions minus the
following:
1.38.1. any allowances, reimbursements and other
similar benefits;
1.38.2. severance pay;
1.38.3. non-qualified deferred compensation and other
payments that receive special tax benefits; and
1.38.4. bonuses and executive incentive payments;
provided that '414(s)' Compensation shall not include unpaid
accrued compensation or, except for purposes of Sections 5.2., 5.3.
and 5.4., compensation received while not an Active Participant.
Notwithstanding the above, '414(s)' Compensation of any
Employee taken into account for any Plan Year that begins on or
after January 1, 1 994 shall not exceed $150,000, as that amount is
adjusted in accordance with Section 401(a)(17)(B) of the Code. If
414(s) Compensation for a period of less than twelve (12) months is
used for any Plan Year, then the otherwise applicable annual limit
provided under this Section is reduced in the same proportion as
the reduction in the twelve-month period. If the annual limit is
exceeded as a result of the aggregation of 414(s) Compensation in
the case of certain Participants and Family Members, then the limit
shall be prorated among the affected individuals in proportion to
each such individual's 414(s) Compensation as determined under this
Subsection prior to the application of the limit.
1.39. Highly Compensated Employee. "Highly Compensated
Employee" means, except as provided in Section 414(q)(6) of the
Code relating to certain Family Members, any Employee who performed
services for an Affiliated Company at any time during the Plan Year
and who:
1.39.1. was at any time during the Plan Year or the
immediately preceding Plan Year a "5-percent owner" within the
meaning of Section 414(q)(3) of the Code; or
1.39.2. received during the immediately preceding Plan
Year '415' Compensation plus Cash or Deferred Contributions
exceeding:
1.39.2.1. $75,000 multiplied by the Adjustment
Factor; or
1.39.2.2 $50,000 multiplied by the Adjustment
Factor, if the Employee also was one of the too 20% of
Employees of the Affiliated Companies (other than
Employees described in paragraphs (8) and (11) of Section
414(q) of the Code (relating to exclusions for age,
service, membership in a collective bargaining unit, or
status as a nonresident alien without U.S. source
income)) when ranked on the basis of '41 5' Compensation
plus Cash or Deferred Contributions received during such
Plan Year; or
1.39.2.3. $45,000 multiplied by the Adjustment
Factor, if the Employee also was at any time during such
Plan Year an "officer" of an Affiliated Company within
the meaning of Section 414(q)(5) of the Code;
provided that, subject to any additional requirements as may
be prescribed by the Secretary of the Treasury, for any Plan
Year in which the Affiliated Companies separately or in
combination maintained significant business activities as
employers in at least two significantly separate geographic
areas at all times during such Plan Year, the Plan
Administrator may elect to apply this subsection 1.39.2. by
inserting "$50,000" in lieu of "$75,000" in paragraph 1.39.2.
and deleting the requirement of paragraph 1.39.2.2.; or
1.39.3. is the Employee who was at any time during the
immediately preceding Plan Year an "officer" of a Company
within the meaning of Section 414(q)(5) of the Code and who
also received the highest '415' Compensation plus Cash or
Deferred Contributions of all such "officers" during such
immediately preceding Plan Year; or
1.39.4. was at any time during the Plan Year one of the
top 100 Employees of the Affiliated Companies when ranked on
the basis of '415' Compensation plus Cash or Deferred
Contributions received during such Plan Year and who also met
the requirements of subsections 1.39.2. or 1.39.3. for the
Plan Year rather than for the immediately preceding Plan Year.
A former Employee shall be treated as a Highly Compensated Employee
if he was Highly Compensated Employee either:
for the last Plan Year during which he performed
services for an Affiliated Company; or
for any Plan Year ended after he attained age 55;
or
for any Plan Year ending before he attained age 55
in which his '415' Compensation plus Cash or
Deferred Contributions was less than 50% of his
average annual '415' Compensation plus Cash or
Deferred Contributions for any one period (but not
necessarily all periods) of three consecutive
calendar years (or, if less, his total period of
employment as an Employee) preceding such Plan
Year.
The provisions of this Section shall be interpreted in a manner
consistent with, and so as not to treat any person as a Highly
Compensated Employee except to the extent required by, Section
414(q) of the Code.
1.40. Hour of Service. "Hour of Service" means each hour
so defined in Section 2. 1.1.
1.41. Inactive Participant. "Inactive Participant" means
a person who has commenced, and remains in, inactive participation
in the Plan pursuant to Section 3.2.
1.42. Investment Fund. "Investment Fund" means each
investment vehicle into which amounts attributable to contributions
under the Plan may be directed pursuant to Article 6.
(collectively, "Investment Funds").
1.43. Investment Manager. "Investment Manager" means the
one or more investment managers within the meaning of ERISA Section
3(38) appointed pursuant to Section 15.6.
1.44. Key Employee. "Key Employee" means any Employee who
was at any time during the Plan Year ending on the Determination
Date or during any one of the four Plan Years immediately preceding
such Plan Year, any one or more of the following, interpreted in
accordance with Section 416(i)(1) of the Code:
1.44.1. an officer of any Affiliated Company whose '415'
Compensation plus Cash or Deferred Contributions for the Plan
Year exceeded 50% of the amount in effect under Section
415(b)(1)(A) of the Code on December 31 in the Plan Year;
1.44.2. one of the 10 Employees whose '415' Compensation
plus Cash or Deferred Contributions for the Plan Year exceeded
the amount in effect under Section 415(c)(1)(A) of the Code on
December 31 in the Plan Year and who owned (or are considered
to have owned) the largest interests, exceeding one-half of
one percent (1/2%), in the Affiliated Companies;
1.44.3. a "5-percent owner" of any Company of which he
is an Employee; or
1.44.4. a "l-percent owner" of any Company of which he
is an Employee and whose '415' Compensation plus Cash or
Deferred Contributions for the Plan Year exceeded $150,000.
1.45. Limitation Year. "Limitation Year" means the Plan
Year; provided that for the short Plan Year commencing on the
Effective Date and ending January 31, 1991, Limitation Year shall
mean the twelve (12) month period ending January 31, 1991. If a
short Limitation Year is created because of an amendment changing
the Plan Year to a different twelve (12) month period, a
Participant's Annual Addition for the short Limitation Year may not
exceed the defined contribution dollar limitation under Section
5.5.1.1 multiplied by a fraction, the numerator of which is the
number of months (including any fractional parts of a month) in the
short Limitation Year and denominator of which is twelve (12).
1.46. Loan. "Loan" means a loan granted from the Loan
Fund in accordance with Article 13.
1.47. Loan Fund. "Loan Fund" means the Investment Fund
described in Section 6.3.
1.48. Matching Contributions. "Matching Contributions"
means amounts contributed to the Plan by the Companies pursuant to
Section 4.3.l. and "Matching Contributions" under the Prior Plan .
1.49. Matching Contributions Account. "Matching
Contributions Account" means the account of a Participant
maintained pursuant to Section 4.3.1. and containing amounts
attributable to Matching Contributions.
1.50. Maternity or Paternity Leave. "Maternity or
Paternity Leave" means any period of absence from employment
beginning in any Plan Year commencing after December 31, 1984 by
reason of the pregnancy of a Participant or the birth of a child of
a Participant, or by reason of the placement of a child with a
Participant in connection with its adoption by the Participant, or
for the purpose of caring for such child during the period
immediately following such birth or placement. Notwithstanding the
foregoing, a period of absence from employment shall not be
regarded as a Maternity or Paternity Leave if the Participant shall
fail to comply with a request by the Company to furnish the Plan
Administrator such timely information as may be reasonably required
to establish that the absence from employment was for a reason set
forth above and the number of days for which there was such an
absence.
1.51. Named Fiduciary. "Named Fiduciary" means the Plan
Administrator, the Plan Asset Committee, the Trustee and the
Investment Manager(s). Each such Named Fiduciary shall constitute
a named fiduciary within the meaning of ERISA Section 402(a)(2).
1.52. Normal Retirement Act. "Normal Retirement Act"
means (a) age sixty-five (65) for each Participant whose Date of
Hire occurs prior to February 1, 1991, and (b) the later of age
sixty-five (65) or the fifth anniversary of the date the Employee
first becomes a Participant herein for each Participant whose Date
of Hire occurs on or after February 1, 1991.
1.53. Participant. "Participant" means an Active
Participant or an Inactive Participant. A Participant shall be
deemed to be a Participant in respect of the Company in which he
is, or was most recently, an Eligible Employee.
1.54. Pay Date. "Pay Date" means the last day of a Pay
Period.
1.55. Pay Period. "Pay Period" means the applicable
period for which '414(s)' Compensation is paid.
1.56. Payroll Deduction Agreement. "Payroll Deduction
Agreement" means an agreement on a form provided by the Plan
Administrator by which a Participant agrees to contribute After-Tax
Contributions to his After-Tax Contributions Account by regular
payroll deduction in accordance with the terms of the Plan.
1.57. Period of Service. "Period of Service" means each
period so defined in Section 2.2.4.
1.58. Period of Severance. "Period of Severance" means
each period so defined in Section 2.2.5.
1.59. Plan. "Plan" means the Saks Fifth Avenue Retirement
Savings Plan, effective as of July 1, 1990, as amended from time to
time.
1.60. Plan Administrator. "Plan Administrator" means the
officer appointed pursuant to Section 14.1., who shall constitute
the administrator of the Plan within the meaning of ERISA Section
3(16).
1.61. Plan Asset Committee. "Plan Asset Committee" means
the committee appointed pursuant to Section 1 5. 1.
1.62. Plan Year. "Plan Year" means the one-year period
starting January 1, 1995 and ending December 31, 1995 and each
successive one-year period ending on any December 31. For periods
prior to January 1, 1995, "Plan Year" means as follows: the eleven
(11) month short period commencing February 1, 1994 and ending
December 31, 1994, the one-year periods ending January 31, 1992 and
1993, and the seven (7) month initial short period commencing on
the July 1, 1990 Effective Date and ending January 31, 1991.
1.63. Prior Plan. "Prior Plan" means the BATUS Retail
Retirement Savings Plan.
1.64. Qualified Domestic Relations Order. "Qualified
Domestic Relations Order" means a "qualified domestic relations
order" within the meaning of Section 206(d) of ERISA and Section
414(p) of the Code.
1.65. Quarterly Date. "Quarterly Date" means March 31,
June 30, September 30 or December 31.
1.66. Restricted Additional Company Contributions.
"Restricted Additional Company Contributions" means amounts
contributed to the Plan by the Companies pursuant to Section 4.4.2.
1.67. Restricted Additional Company Contributions Account.
"Restricted Additional Company Contributions Account" means the
account of a Participant maintained pursuant to Section 4.4.2. and
containing amounts attributable to Restricted Additional Company
Contributions.
1.68. Restricted After-Tax Contributions. "Restricted
After-Tax Contributions" means amounts originally contributed to
the Plan by the Companies as Before-Tax Contributions but, in order
to preserve the qualification of the Plan under Sections 401(a) and
401(k) of the Code, recharacterized by the Plan Administrator
pursuant to Section 5.2.3.2. as amounts contributed to the Plan by
Participants out of their own assets.
1.69. Restricted After-Tax Contributions Account.
"Restricted After-Tax Contributions Account" means the account of
a Participant maintained pursuant to Section 5.2.3.2. and
containing amounts attributable to Restricted After-Tax
Contributions.
1.70. Restricted Matching Contributions. "Restricted
Matching Contributions" means amounts contributed to the Plan by
the Companies pursuant to Section 4.3.2.
1.71. Restricted Matching Contributions Account.
"Restricted Matching Contributions Account" means the account of a
participant maintained pursuant to Section 4.3.2. and containing
amounts attributable to Restricted Matching Contributions.
1.72. Rollover Account. "Rollover Account" means the
account of a Participant maintained pursuant to Section 4.5. and
containing amounts attributable to Rollover Contributions.
1.73. Rollover Contributions. "Rollover Contributions"
means amounts contributed to the Plan by an Eligible Employee
pursuant to Section 4.5.
1.74. Service. "Service" means a sum of computation
periods so defined in either Section 2.1.3. or Section 2.2.6., as
applicable.
1.75. Spouse. "Spouse" means the person to whom a
Participant is lawfully married as of his death, provided that
Spouse shall instead mean another spouse of a Participant to the
extent required by a Qualified Domestic Relations Order.
1.76. Top Heavy Year. "Top Heavy Year" means a Plan Year
for which the Plan is Top Heavy, as defined below and interpreted
in accordance with Section 416 of the Code and applicable
regulations thereunder:
1.76.l. The Plan shall be Top Heavy for any Plan Year
if it is included in, or it alone constitutes, an Aggregation
Group (defined below) under which, as of the Determination
Date, the sum of the present value of the cumulative accrued
benefits for all Key Employees (and their beneficiaries) under
all defined benefit plans included in such group plus the
aggregate of the accounts of all Key Employees (and their
beneficiaries) under all defined contribution plans included
in such group (after including any Additional Company
Contributions and Restricted Additional Company Contributions
timely made for the preceding Plan Year under Section 4.4.l.
exceeds 60% of the analogous sum for all participants (and
their beneficiaries) under such plans. For purposes of
this subsection 1.76.1.:
1.76.1.1. the foregoing sums shall not include any
amounts in respect of participants who have performed no
service for any Affiliated Company during the five (5)
year period ending with the Determination Date, but they
otherwise shall include distributions made during the
five (5) year period ending with the Determination Date,
and
1.76.1.2. the accrued benefits of an Employee other
than a Key Employee shall be determined
1.76.1.2.1. under the method that uniformly
applies for accrual purposes under all defined
benefit plans maintained by the Affiliated
Companies, or
1.76.1.2.2. if there is no such method, as if
such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional
accrual rate of Section 411(b)(1)(C) of the Code.
1.76.2. "Aggregation Group" means all existing and
terminated plans (even if only one plan) maintained by all
Affiliated Companies in which, during the Plan Year containing
the Determination Date or any of the preceding four (4) Plan
Years, a Key Employee was a participant or which, during the
Plan Year containing the Determination Date or any of the
preceding four (4) Plan Years, was combined with any of such
plans in order to meet the coverage or nondiscrimination
requirements of Sections 410 or 401(a)(4) of the Code. The
Aggregation Group shall also include those additional plans,
if any, which are selected from time to time by the Board of
Directors to be included in the Aggregation Group if their
inclusion would not prevent the Aggregation Group from meeting
the requirements of Sections 410 and 401(a)(4) as of the
particular Determination Date.
1.77. Trust Agreement. "Trust Agreement" means the trust
agreement established to implement the Plan, as amended from time
to time.
1.78. Trust Fund. "Trust Fund" means the fund, including
the earnings thereon, held by the Trustee into which all
contributions of the Participant and the Company are deposited
pursuant to the Plan. The Trust Fund shall be divided into such
Investment Funds as are designated in or under Article 6.
1.79. Trustee. "Trustee" means the trustee or trustees,
from time to time, of the trust established under the Trust
Agreement.
1.80. Valuation Date. "Valuation Date" means each
business day or such other dates as the Investment Manager values
the assets of the Investment Fund.
1.81. Vesting Service. "Vesting Service" means Service
used to determine the extent to which the balances of a
Participant's accounts are nonforfeitable, as the term is defined
in Section 2.2.7.
1.82. Year of Service. "Year of Service" means each one-year
computation period so defined in Section 2.1.2.
ARTICLE 2.
SERVICE
The following terms used in this Plan shall have the meanings
set forth in this Article 2.
2.1. Eligibility Service.
2.1.1. "Hour of Service" means:
2.1.1.1. each hour for which an Employee is
directly or indirectly paid or entitled to payment as an
Employee for the performance of duties;
2.1.1.2. each hour for which an Employee is
directly or indirectly paid or entitled to payment as an
Employee for reasons other than the performance of
duties; and
2.1.1.3. each hour for which back pay to an
Employee, irrespective of mitigation of damage, has been
either awarded or agreed to by the Company or any
Affiliated Company;
provided that an Employee employed on a salaried basis shall
be credited with 190 Hours of Service for each calendar month
in which the Employee would be required to be credited with at
least 1 Hour of Service hereunder.
Hours shall be credited under paragraphs 2.1.1.2. and 2.1.1.3.
above in accordance with Section 2530.200b-2(b) and (c) of
Title 29 of the Code of Federal Regulations, as amended from
time to time. However, not more than 501 Hours of Service
shall be credited to any Employee or Participant during any
computation period for any single, continuous period during
which the Employee or Participant performs no duties.
2.1.2. "Year of Service" means each one-year
computation period, described herein, during which an Employee
is credited with at least 1000 Hours of Service. In
determining Years of Service for purposes of Eligibility
Service, the computation periods shall be the one-year period
commencing on the date the individual became an Employee and
each one-year period ending on the last day of each Plan Year
ending after the end of that first computation period.
Notwithstanding the above, if any Employee completes not less
than 750 Hours of Service within the nine-month period
commencing on the date the individual became an Employee (or,
if applicable, commencing on the first day of any Plan Year
thereafter), he shall be deemed to have satisfied the 1000
Hours of Service rule set forth above as of the last day of
the applicable computation period. If the Plan is amended to
change the Plan Year, an Employee shall be deemed to have
satisfied the 1000 Hours of Service requirement with respect
to a Plan Year if he satisfies the 1000 Hours of Service
requirement in the one-year period that begins on the first
day of the short Plan Year or the first day of any Plan Year
thereafter.
2.1.3. "Service" means, for purposes of determining
Eligibility Service, the sum (expressed as an integer) of all
Years of Service, provided that Years of Service prior to the
Effective Date shall be disregarded. Notwithstanding the
preceding proviso, in determining Years of Service with
respect to a Continued Employee following the transfer to the
Plan of assets and liabilities attributable to Continued
Employees from the Prior Plan, all years of service recognized
under the terms of the Prior Plan with respect to such
Continued Employee as of June 30, 1990, to the extent not
otherwise credited under the preceding subsections of this
Section 2.1., shall be credited to such Continued Employee
under this Plan as of the Effective Date.
2.1.4. "Eligibility Service" means Service used to
determine an Eligible Employee's eligibility to become a
Participant.
2.2. Vesting Service.
2.2.1. "Date of Hire" means the date on which a person
first performs an hour of duties for which he is paid, or
entitled to pay, as an Employee.
2.2.2. "Date of Rehire" means the date following a
Date of Severance on which a person next performs an hour of
duties for which he is paid, or entitled to pay, as an
Employee.
2.2.3. "Date of Severance" means the earlier of:
2.2.3.l. the date on which an Employee is absent as
an Employee because he quits, retires, is discharged
or dies; or
2.2.3.2. the first anniversary of an Employee's
absence as an Employee for any other reason;
provided that if the Employee incurs a Date of Severance
pursuant to the foregoing upon his quit, retirement or
discharge (regardless of whether such event caused, or
occurred during, his absence as an Employee) and has a Date of
Rehire as an Employee within one (1) year following the
commencement of his absence as an Employee, the Date of
Severance shall be removed and treated for all purposes of
measuring Periods of Service or Periods of Severance as if it
had not occurred. For purposes of this subsection, an
Employee is absent as an Employee on any day during which he
does not perform an hour of duties for which he is paid or
entitled to pay, as an Employee. In the event that an
Employee is absent on approved leave of absence for military
service in the Armed Forces of the United States (or such
other alternative service as may be required under the terms
of the Military Selective Service Act), the period of said
Employee's leave of absence shall be deemed an absence under
2.2.3.2. above to the extent required and under the conditions
specified by 38 U.S.C. Section 2021 et seq., and the regulations
promulgated thereunder, all as from time to time amended.
2.2.4. "Period of Service" means; each period of time
commencing on a Date of Hire or Date of Rehire and ending on
the next Date of Severance.
2.2.5. "Period of Severance" means each period of time
commencing on a Date of Severance and ending on the next Date
of Rehire, provided that if the Date of Severance occurs at
the outset of or during a Maternity or Paternity Leave, the
Period of Severance shall commence, if at all, on the first
anniversary of such Date of Severance.
2.2.6. "Service" means, for purposes of determining
Vesting Service, the sum (rounded to the next highest one-twelfth
(1/12) year) of all Periods of Service, provided that
no person shall accrue more than one (1) full year of Service
with respect to any Plan Year, and provided further that
Periods of Service shall be disregarded to the extent required
by one or more of the following rules:
2.2.6.1. If a person incurs a one-year Period of
Severance, all Periods of Service prior to the Period of
Severance shall be disregarded in determining Vesting
Service with respect to contributions following the
Period of Severance unless and until the person completes
a one-year Period of Service after the Period of
Severance;
2.2.6.2. If a person incurs a five-year Period of
Severance, all Periods of Service following the Period of
Severance shall be disregarded in determining Vesting
Service with respect to contributions for service prior
to -the Period of Severance;
2.2.6.3. If a Participant who has only a nonvested
interest in his Matching Contributions Account and his
Additional Company Contributions Account incurs a five-year
Period of Severance, all Periods of Service prior to
the Period of Severance shall be disregarded;
2.2.6.4. No Periods of Service, or portions
thereof, prior to the effective Date shall be
included;
provided that, in determining Periods of Service with respect
to a Continued Employee following the transfer to the Plan of
assets and liabilities attributable to Continued Employees
from the Prior Plan, all periods of service recognized under
the terms of the Prior Plan with respect to such Continued
Employee as of June 30, 1990, shall be credited to such
Continued Employee under this Plan as of the Effective Date.
2.2.7. "Vesting Service" means Service used to
determine the extent to which the balances of a Participant's
accounts are nonforfeitable.
ARTICLE 3.
PARTICIPATION
3.1. Commencement of Active Participation. A person shall
commence or recommence active participation in the Plan in
accordance with the following rules:
3.1.1. A Continued Employee who was a participant in
the Prior Plan, or who satisfied the eligibility
requirements of the Prior Plan, as of June 30,
1990, shall become an Active Participant as of
the Effective Date.
3.1.2. A person who does not become a Participant
under Section 3.1.1. shall become an Active Participant as of
the first Entry Date following the end of the applicable
computation period on which he is an Eligible Employee who has
attained age twenty-one (21) and is credited with a year of
Eligibility Service.
3.1.3. An Inactive Participant under Section 3.2.2. or
a former Participant shall become an Active Participant as
soon as practicable following the date on which he again
becomes an Eligible Employee.
3.2. Commencement of Inactive Participation. A person shall
commence or recommence inactive participation in the Plan in
accordance with the following rules:
3.2.1. An Eligible Employee not eligible to be an
Active Participant under Section 3.1. shall become an Inactive
Participant upon receipt of Rollover Contributions on his
behalf by the Trustee.
3.2.2. An Active Participant shall become an Inactive
Participant as of the date he ceases to be an Eligible
Employee.
3.3. Termination of Participation. An Active Participant or
an Inactive Participant shall cease to be a Participant as of the
date he no longer has, under the provisions of the Plan, an
interest in an account.
ARTICLE 4.
CONTRIBUTIONS
4.1. Before-Tax Contributions.
4.1.1. General. Subject to the limitations on
contributions under Article 5., the Companies, with respect to
each Pay Period, shall contribute to the Before-Tax
Contributions Account of each Active Participant who has a
Compensation Deferral Agreement in effect for such Pay Period
(other than a Participant who has made a hardship withdrawal
under Section 9.1. within the preceding twelve (12) months)
Before-Tax Contributions in an amount equal to the reduction
in the Participant's compensation specified in his
Compensation Deferral Agreement; provided that no Before-Tax
Contributions shall be made to a Participant's Before-Tax
Contributions Account for any Pay Period in which his
compensation is insufficient to permit the agreed-upon Before-Tax
Contributions after all statutory withholdings and
deductions, deductions authorized by the Participant and any
other deductions, are made.
4.1.2. Compensation Deferral Agreements. A
Compensation Deferral Agreement shall not be valid unless the
Participant specifies therein the amount of compensation which
he agrees to forego pursuant to the Compensation Deferral
Agreement. Such amount shall be in increments of one percent
(1%), but shall not be, when combined with the percentage
contributed under Section 4.2.2., greater than sixteen percent
(16%) of the Participant's '414(s)' Compensation. An Active
Participant's Compensation Deferral Agreement shall be
effective, until changed or revoked, for each Pay Date on or
after the first day of the month coincident with or next
following thirty (30) days (or such other, period as the Plan
Administrator may prescribe) after the date upon which the
executed Compensation Deferral Agreement is received by the
Plan Administrator. Effective with the first Pay Date in any
month, an Active Participant may change the percentage of
'414(s)' Compensation which he agrees to forego pursuant to a
Compensation Deferral Agreement by executing a new
Compensation Deferral Agreement which is received by the Plan
Administrator at least thirty (30) days (or such other period
as the Plan Administrator may prescribe) before the first day
of such month.
4.1.3. Suspension of Before-Tax Contributions. A
Participant may at any time, by written notice at least thirty
(30) days prior to the first day of the month (or such other
period as the Plan Administrator may prescribe) to the Plan
Administrator, direct the discontinuance of all Before-Tax
Contributions on his behalf, effective as of the first Pay
Date in such month. An Active Participant may thereafter
resume Before-Tax Contributions to the Plan as of the first
Pay Date in such month by giving written notice to the Plan
Administrator at least thirty (30) days (or such other period
as the Plan Administrator may prescribe) before the first day
of such month.
4.1.4. Payment to Trustee. Before-Tax Contributions
for any Plan Year shall be paid to the Trustee as soon as
practicable after the Pay Period with respect to which they
are made, but in no event later than the earlier of:
4.1.4.1. the time prescribed by law for filing the
contributing Company's consolidated Federal income tax
return for its fiscal year commencing in such Plan Year
(including extensions thereof); and
4.1.4.2. twelve (12) months following the end of
such Plan Year.
4.2. After-Tax Contributions.
4.2.1. General. Subject to the limitations on
contributions under Article 5., each Active Participant (other
than a Participant who has made a hardship withdrawal under
Section 9. 1. within the preceding twelve (12) months) shall
be eligible to make After-Tax Contributions to his After-Tax
Contributions Account through regular payroll deductions;
provided that no After-Tax Contributions shall be made by
payroll deduction to a Participant's After-Tax Contributions
Account for any Pay Period in which his compensation is
insufficient to permit the agreed-upon After-Tax Contributions
after all statutory withholdings and deductions, deductions
authorized by the Participant and any other deductions, are
made.
4.2.2. Payroll Deduction Agreements. No After-Tax
Contributions shall be made by payroll deduction with respect
to any Pay Period unless the Participant has a Payroll
Deduction Agreement in effect for such Pay Period. A Payroll
Deduction Agreement shall not be valid unless the Participant
specifies therein the amount of compensation which he agrees
to contribute to the Plan through regular payroll deduction.
Such amount shall be in increments of one percent (1%), but
shall not be, when combined with the percentage contributed
under Section 4.1.2., greater than sixteen percent (16%) of
the Participant's '414(s)' Compensation. An Active
Participant's Payroll Deduction Agreement shall be effective,
until changed or revoked, for each Pay Date on or after the
first day of the month coincident with or next following
thirty (30) days (or such other period as the Plan
Administrator may prescribe) after the date upon which the
executed Payroll Deduction Agreement is received by the Plan
Administrator. Effective with the first Pay Date in any
month, an Active Participant may change the percentage of
'414(s)' Compensation which he agrees to contribute pursuant
to a Payroll Deduction Agreement by executing a new Payroll
Deduction Agreement which is received by the Plan
Administrator at least thirty (30) days (or such other period
as the Plan Administrator may prescribe) before the first day
of such month.
4.2.3. Suspension of After-Tax Contributions by
Payroll Deduction. A Participant may at any time, by prior
written notice of at least thirty (30) days (or such other
period as the Plan Administrator may prescribe) to the Plan
Administrator, direct the discontinuance of all After-Tax
Contributions by regular payroll deduction on his behalf,
effective as of the first Pay Date in any month. An Active
Participant may thereafter resume After-Tax Contributions by
regular payroll deduction to the Plan as of the first Pay Date
in any month by giving written notice to the Plan
Administrator at least thirty (30) days (or such other period
as the Plan Administrator may prescribe) before the first day
of such month.
4.2.4. Payment to Trustee. After-Tax Contributions
for any Plan Year shall be paid to the Trustee as soon as
practicable after the Pay Period with respect to which they
are made, but in no event later than the earlier of:
4.2.4.1. the time prescribed by law for filing the
contributing Company's consolidated Federal income tax
return for its fiscal year commencing in such Plan Year
(including extensions thereof); and
4.2.4.2. twelve (12) months following the end of
such Plan Year.
4.3. Matching Contributions and Restricted Matching
Contributions.
4.3.1. Matching Contributions--General.
4.3.1.1. Regular Matching Contribution. Subject to
the limitations on contributions under Article 5., on or
as of each Pay Date on which an Eligible Employee is an
Active Participant, the Companies shall contribute to his
Matching Contributions Account Matching Contributions in
an amount equal in value to twenty-five percent (25%) (or
such other percentage as the Board of Directors may
determine for all such Participants for such Plan Year)
of his Before-Tax or After-Tax Contributions (or both);
provided that no amounts in excess of six percent (6%) of
the Participant's '414(s)' Compensation shall be matched.
4.3.1.2. Supplemental Matching Contribution.
Subject to the limitations on contributions under Article
5., for each Plan Year the Companies shall contribute to
the Matching Contributions Account of each Participant
who was an Active Participant on the last day of such
Plan Year Matching Contributions in an amount equal in
value to a percentage of the Before-Tax Contributions or
After-Tax Contributions (or both) up to six percent (6%)
of the Participant's '414(s)' Compensation credited to
the Participant's Before-Tax Contributions Account or
After-Tax Contributions Account (or both) for such Plan.
Year (after application of the limitations of Sections
5.1., 5.2. and 5.4.) that were not withdrawn, or
distributed in that Plan Year, as determined by the Board
of Directors as applicable for this purpose to all such
Participants for such Plan Year, or, if no such
percentage is so determined, the percentage shall be
zero.
4.3.2. Restricted Matching Contributions--General.
Subject to the limitations on contributions under Article 5.,
for each Plan Year the Companies shall contribute to the
Restricted Matching Contributions Account of each Participant
who was an Active Participant on the last day of such Plan
Year and who was not a Highly Compensated Employee for such
Plan Year Restricted Matching Contributions in an amount equal
in value to the product of:
4.3.2.1. the amount of Before-Tax Contributions and
After-Tax Contributions credited to the Participant's
Before-Tax Contributions Account and After-Tax
Contributions Account for such Plan Year (after
application of the limitations of Sections 5.1., 5.2.,
5.3. and 5.4.) that were not withdrawn, borrowed or
distributed in that Plan Year, and
4.3.2.2. the fraction determined by the Board
of Directors as applicable for this purpose to all such
Participants for such Plan Year, or, if no such fraction
is so determined, zero.
4.3.3. Special Rule Concerning Withdrawals, and
Distributions. For purposes of Sections 4.3.1. and 4.3.2,
withdrawals and distributions of Before-Tax Contributions and
After-Tax Contributions pursuant to the Plan shall be deemed,
insofar as possible, to derive from Before-Tax Contributions
and After-Tax Contributions made in the Plan Year under
consideration.
4.3.4. Payment to Trustee. Matching Contributions and
Restricted Matching Contributions for any Plan Year shall be
paid to the Trustee as soon as practicable before or after the
end of the Plan Year but in no event later than the earlier
of:
4.3.4.1. the time prescribed by law for filing the
contributing Company's consolidated Federal income tax
return for its fiscal year commencing in such Plan Year
(including extensions thereof); and
4.3.4.2. twelve (12) months following the end of
such Plan Year.
4.4. Additional Company Contributions and Restricted
Additional Company Contributions.
4.4.1. Additional Company Contributions--General.
Except as provided in this subsection 4.4.1., for any Top
Heavy Year the Companies shall make such Additional Company
Contributions (if any), calculated separately with respect to
each Participant other than a Key Employee, who is an Employee
on the last day of such Top Heavy Year, as shall be necessary
to cause the ratio of (1) to (2) for each such Participant to
equal at least the lesser of three percent (3%) or the highest
such ratio for the Plan Year for any Key Employee, where
(1) and (2) are as follows:
4.4.1.1. the aggregate contributions by Affiliated
Companies (including Forfeitures, if any, allocated as
such to Participant's accounts, but excluding Before-Tax
Contributions or other Cash or Deferred Contributions if
the Participant is not a Key Employee, Matching
Contributions and Restricted Matching Contributions) to
this Plan and all other defined contribution plans
maintained by the Affiliated Companies on behalf of the
Participant (or on behalf of the beneficiaries of such
Participant);
4.4.1.2. the lesser of (A) $200,000 multiplied by
the ratio of the Adjustment Factor in effect for the Plan
Year to the Adjustment Factor in effect for the Plan Year
beginning in 1989, and (B) the Participant's '415'
Compensation.
Contributions shall not be required under this subsection
4.4.1. to the extent lesser contributions are permitted in
regulations promulgated by the Secretary of the Treasury under
Section 416(f) of the Code pertaining to Participants who also
are participants in any defined benefit pension plan sponsored
by an Affiliated Company.
4.4.2. Restricted Additional Company Contributions--General.
Subject to the limitations on contributions under
Article 5., for each Plan Year the Companies shall contribute
to the Restricted Additional Company Contributions Account of
each Participant who was an Active Participant on the last day
of such Plan Year and who was not a Highly Compensated
Employee for such Plan Year Restricted Additional Company
Contributions in an amount equal in value to the product of:
4.4.2.1. the Participant's '414(s)' Compensation
for such Plan Year, and
4.4.2.2. the fraction determined by the Board of
Directors as applicable for this purpose to all such
Participants for such Plan Year, or, if no such fraction
is so determined, zero.
4.4.3. Payment to Trustee. Additional Company
Contributions and Restricted Additional Company Contributions
for any Plan Year shall be paid to the Trustee as soon as
practicable before or after the end of the Plan Year but in no
event later than the earlier of:
4.4.3.1. with respect to Additional Company
Contributions and Restricted Additional Company
Contributions, the time prescribed by law for filing the
contributing Company's consolidated Federal income tax
return for its fiscal year commencing in such Plan Year
(including extensions thereof); and
4.4.3.2. only with respect to Restricted Additional
Company Contributions, twelve (12) months following the
end of such Plan Year.
4.5. Rollover Contributions.
4.5.1. An Eligible Employee, regardless of whether he
has satisfied the participation requirements of Section 3.1,
may transfer to the Trust Fund an "eligible rollover
distribution," as defined in Section 402(c)(4) of the Code,
provided that such distribution is from a plan which meets the
requirements of Section 401(a) of the Code (the "other plan").
4.5.2. The procedures approved by the Plan
Administrator shall provide that such a transfer may be made
only if the following conditions are met:
4.5.2.1. the transfer occurs on or before the
sixtieth (60th) day following the Eligible Employee's
receipt of the distribution from the other plan; and
4.5.2.2. the amount transferred is equal to any
portion of the distribution the Eligible Employee
received from the other plan, subject to the maximum
rollover provision of Section 402 of the Code; and
4.5.2.3. the amount transferred consists entirely
of cash.
4.5.3. Notwithstanding the foregoing, if an Eligible
Employee had deposited a distribution previously received from
another plan into an individual retirement account ("IRA"), as
defined in Section 408 of the Code, he may transfer the amount
of such distribution plus earnings thereon from the IRA to
this Plan, provided such rollover amount is deposited with the
Trustee on or before the sixtieth (60th) day following receipt
thereof from the IRA, and provided such rollover meets all the
requirements of Code Section 408(d)(3).
4.5.4. The Plan Administrator shall develop such
procedures, and may require such information (including,
without limitation, opinions of law, proof of the qualified
status of the predecessor plan, and proof of the timeliness of
the contribution) from an Eligible Employee desiring to make
such a transfer, as it deems necessary or desirable, to
determine that the proposed transfer will meet the
requirements of this Section. Upon approval by the Committee,
the amount transferred shall be deposited in the Trust Fund
and shall be credited to a Rollover Account. Such account
shall be one hundred percent (100%) vested in the Eligible
Employee and shall share in income allocations in accordance
with Section 7.2. Upon termination of employment, the total
amount of the Rollover Account shall be distributed in
accordance with Article 1 1.
4.5.5. Upon such a transfer by an Eligible Employee
who is otherwise eligible to participate in the Plan but who
has not yet completed the participation requirements of 3.1,
his Rollover Account shall represent his sole interest in the
Plan until he becomes a Participant.
ARTICLE 5.
LIMITATIONS ON CONTRIBUTIONS
5.1. $7.000 (As Indexed) Limit on Before-Tax Contributions.
5.1.1. Plans of Affiliated Companies Only.
Notwithstanding anything to the contrary in Article 4., the
amount of Before-Tax Contributions on behalf of a Participant
for any calendar year, prior to any reduction thereof under
Section 5.2.2., shall not exceed $7,000 multiplied by the
Adjustment Factor; provided that if the Participant made a
hardship withdrawal under Section 9.1. any time during the
immediately preceding calendar year, such amount shall be
reduced by the amount of the Participant's Before-Tax
Contributions in the previous calendar Year.
5.1.2. Plans of Affiliated Companies and Other Plans
or Arrangements. If the Plan Administrator receives a written
notice from a Participant not later than March 1 of any
calendar year:
5.1.2.1. which states that the Participant's
"elective deferrals," within the meaning of Section
402(g) of the Code, for the immediately preceding
calendar year, exceed the limit prescribed by Section
402(g) of the Code by an amount specified in the notice,
and
5.1.2.2. which specifies the amount of such excess
allocated by the Participant to the Plan,
the amount of such allocated excess (and any income allocable
to such amount, calculated in such manner as may be prescribed
by the Secretary of the Treasury), less any excess Before-Tax
Contributions previously returned to or recharacterized in
respect of the Participant for the Plan Year beginning with or
within such calendar year under Section 5.2.3., may be
distributed to the Participant not later than the April 15
following receipt of the notice (without regard to other
provisions of the Plan with respect to distributions).
5.2. Average Deferral Percentage Test.
5.2.1. Notwithstanding anything to the contrary in
Article 4. and except as may be required or otherwise
permitted by rules prescribed by the Secretary of the
Treasury, the Plan Administrator shall take such action as he
deems appropriate to insure that the amount of Before-Tax
Contributions on behalf of Highly Compensated Employees for
any Plan Year satisfies the following requirement:
If (DN)Is: Then (DH) May Not Exceed:
2 Or Less 2 Times (DN)
Greater Than 2 But Less Than 8 2 Percentage Points
Plus (DN)
8 Or More 1.25 Times (DN)
where:
"(DN)" is the Actual Deferral Percentage for the Plan
Year for all Active Participants who were not Highly
Compensated Employees (nor certain Family Members described in
Section 414(q)(6) of the Code) for the Plan Year (even if no
contributions were made to the Plan on behalf of one or more
of such persons); and
"(DH)" is the Actual Deferral Percentage for the Plan
Year for all Active Participants who were Highly Compensated
Employees for the Plan Year (even if no contributions were
made to the Plan on behalf of one or more of such persons).
For purposes of the foregoing requirement:
5.2.1.1. deferrals in excess of the limits of
Section 5.1.2. made under a plan or plans not sponsored
by any Affiliated Company, and any excess deferrals
distributed to Highly Compensated Employees under Section
5.1.2., shall nevertheless be treated as Before-Tax
Contributions for the Plan Year(s) for which such
distributed excess deferrals originally were made;
5.2.1.2. Cash or Deferred Contributions on behalf
of participants under all other plans (if any) of the
Affiliated Companies (except as may otherwise be
prescribed by the Secretary of the Treasury as to
employee stock ownership plans) which were considered as
one plan for purposes of satisfying the nondiscrimination
requirements of Section 401 (a)(4) of the Code or the
coverage requirements of Section 410(b) of the Code shall
be treated as Before-Tax Contributions of such
participants under the Plan, except to the extent that
such other plans do not have the same plan year as this
Plan; and
5.2.1.3. with respect to a Participant under the
Plan, Cash or Deferred Contributions in respect of such
Participant under all other plans (if any) of the
Affiliated Companies which are intended to satisfy the
requirements of Section 401(a) of the Code (except as may
otherwise be prescribed by the Secretary of the Treasury
as to employee stock ownership plans) shall be treated as
Before-Tax Contributions of such Participant under the
Plan, provided that this paragraph 5.2.1.3. shall not
apply unless the Participant is a Highly Compensated
Employee.
5.2.2. Reduction of Before-Tax Contributions. If for
any Plan Year it is determined that the discrimination
requirements under Section 5.2.1. are not and will not be
satisfied, the Participants who are Highly Compensated
Employees shall have their Before-Tax Contributions reduced
retroactively as follows:
5.2.2.1. The Participant or Participants with the
highest individual Actual Deferral Percentage shall have
his or their Before-Tax Contributions reduced so that his
or their Actual Deferral Percentage is reduced by one-hundredth
of one percentage point (0.01%).
5.2.2.2. If the discrimination requirements set
forth in Section 5.2.1. still are not satisfied after
the reduction under Section 5.2.2.1. is made, the
Participant or Participants with the highest individual
Actual Deferral Percentage after the reduction under
Section 5.2.2.1. is made (including any Participant whose
Before-Tax Contributions are reduced under Section
5.2.2.1.) shall have his or their Before-Tax
Contributions reduced, or further reduced, so that his or
their Actual Deferral Percentage is further reduced by
one-hundredth of one percentage point (0.01%). This
process shall continue until the discrimination
requirements under Section 5.2.1. are satisfied.
5.2.3. Disposition of Reduced Amounts. At the Plan
Administrator's discretion, a Participant whose Before-Tax
Contributions have been reduced in accordance with Section
5.2.2. shall have the amount of such reduction (less any
excess deferrals previously distributed to the Participant for
the calendar year ending with or within the Plan Year under
Section 5.1.2.),
5.2.3.1. returned to him (without regard to other
provisions of this Plan with respect to distributions)
along with any income (including gains and losses)
attributable thereto under the Plan (calculated in such
manner as may be provided in rules prescribed by the
Secretary of the Treasury) or,
5.2.3.2. to the extent provided in regulations
prescribed by the Secretary of the Treasury, added no
later than 2 1/2 months after the close of the Plan Year to
his Restricted After-Tax Contributions Account as
Restricted After-Tax Contributions for the Plan Year.
To the extent any such return of such contributions was not
already made within 2 1/2 months following the Plan Year for
which such contributions were made (so as to avoid any
applicable 10% excise tax on the Companies under Section 4979
of the Code), such return of Before-Tax Contributions shall be
made no later than the last day of the Plan Year immediately
following the Plan Year for which such contributions were
made. For purposes of inclusion in the Participant's gross
income, such amounts returned within 2 1/2 months after the end
of the Plan Year and such recharacterized amounts shall be
deemed received by the Participant on the dates the amounts
would have been received as income, determined on a first-deferred-
first-returned-or-recharacterized basis, had they not
originally been deferred; and amounts returned more than 2 1/2
months after the end of the Plan Year shall be deemed received
by the Participant when actually returned.
5.3. Average Contribution Percentage Test.
5.3.1. Test. Notwithstanding anything to the contrary
in Article 4. and except as may be required or otherwise
permitted by rules prescribed by the Secretary of the
Treasury, the Plan Administrator shall take such action as he
deems appropriate to insure that the amount of After-Tax
Contributions, Restricted After-Tax Contributions, Matching
Contributions, and Restricted Matching Contributions on behalf
of Highly Compensated Employees for any Plan Year satisfies
the following requirement:
If (CN) Is: Then (CH) May Not Exceed:
2 Or Less 2 Times (CN)
Greater Than 2 But Less Than 8 2 Percentage Points
Plus (CN)
8 Or More 1.25 Times (CN)
where:
"(CN)" is the Actual Contribution Percentage for the Plan
Year for all Active Participants who were not Highly
Compensated Employees (nor certain Family Members described in
Section 414(q)(6) of the Code) for the Plan Year (even if no
contributions were made to the Plan on behalf of one or more
of such persons); and
"(CH)" is the Actual Contribution Percentage for the Plan
Year for all Active Participants who were Highly Compensated
Employees for the Plan Year (even if no contributions were
made to the Plan on behalf of one or more of such persons).
For purposes of the foregoing requirement:
5.3.1.1. employee contributions and matching
contributions on behalf of participants under all other
plans (if any) of the Affiliated Companies (except as may
otherwise be prescribed by the Secretary of the Treasury
as to employee stock ownership plans) which were
considered as one plan for purposes of satisfying the
nondiscrimination requirements of Section 401(a)(4) of
the Code or the coverage requirements of Section 410(b)
of the Code shall be treated as After-Tax Contributions
and Matching Contributions, respectively, of such
participants under the Plan, except to the extent that
such other plans do not have the same plan year as this
Plan; and
5.3.1.2. with respect to a Participant who is a
Highly Compensated Employee, employee contributions and
matching contributions under all other plans, (if any) of
the Affiliated Companies (except as may otherwise be
prescribed by the Secretary of the Treasury as to
employee stock ownership plans) shall be treated as
After-Tax Contributions and Matching Contributions,
respectively, of such Participant under the Plan.
5.3.2. Reduction of After-Tax Contributions,
Restricted After-Tax Contributions, Matching Contributions and
Restricted Matching Contributions. If for any Plan Year it is
determined that the discrimination requirements under Section
5.3.1. are not and will not be satisfied, the Participants who
are Highly Compensated Employees shall have their After-Tax
Contributions, Restricted After-Tax Contributions, Matching
Contributions, and/or Restricted Matching Contributions
(including Forfeitures, if any, allocated as such to the
person's accounts on the basis of Before-Tax Contributions or
After-Tax Contributions) reduced (in a manner determined by
the Plan Administrator consistent for all such Highly
Compensated Employees and in accordance with rules prescribed
by the Secretary of the Treasury) retroactively as follows:
5.3.2.1. The Participant or Participants with the
highest individual Actual Contribution Percentage shall
have such contributions to their accounts reduced so that
his or their Actual Contribution Percentage is reduced by
one-hundredth of one percentage point (0.01%).
5.3.2.2. If the discrimination requirements set
forth in Section 5.3.1. still are not satisfied after the
reduction under Section 5.3.2.1. is made, such
contributions for the Participant or Participants with
the highest Actual Contribution Percentage after the
reduction under Section 5.3.2.1. is made (including any
Participant for whom contributions are reduced under
Section 5.3.2.1.) shall be reduced, or further reduced,
so that his or their Actual Contribution Percentage is
reduced by one-hundredth of one percentage point (0.01%).
This process shall continue until the discrimination
requirements under Section 5.3.1. are satisfied.
5.3.3. Disposition of Reduced Amounts. A Participant
whose After-Tax Contributions, Restricted After-Tax
Contributions, Matching Contributions, and/or Restricted
Matching Contributions have been reduced in accordance with
Section 5.3.2. shall have the amount of such reduction, along
with any income (including gains and losses) attributable
thereto under the Plan (calculated in such manner as may be
provided in rules prescribed by the Secretary of the
Treasury),
5.3.3.1. returned or distributed to him, to the
extent such amount consists of, or is derived from, his
After-Tax Contributions, Restricted After-Tax
Contributions, Restricted Matching Contributions and, to
the extent already nonforfeitable under Article 8.,
Matching Contributions (without regard to other
provisions of this Plan with respect to distributions) or
5.3.3.2. added to, and treated thereafter the same
as Forfeitures under, the Plan to the extent such amount
consists of, or is derived from, Matching Contributions
which shall not already have become nonforfeitable under
Article 8., provided that no such amounts may be
allocated to the accounts of Highly-Compensated Employees
whose contributions were reduced under Section 5.3.2. To
the extent any such return or forfeiture of such
following the Plan Year for which such contributions were
made (so as to avoid any applicable 10% excise tax on the
Companies under Section 4979 of the Code), such return or
forfeiture of such contributions shall be made no later
than the last day of the Plan Year immediately following
the Plan Year for which such contributions were made.
For purposes of inclusion in the Participant's gross
income, such amounts (in excess of returned After-Tax
Contributions and returned Restricted After-Tax
Contributions) returned within 2 1/2 months after the end of
the Plan Year shall be deemed received by the Participant
in the calendar year ending with or within such Plan
Year; and amounts returned more than 2 1/2 months after the
end of the Plan Year shall be deemed received by the
Participant when actually returned.
5.4. Combined Average Deferral Percentage and Average
Contribution Percentage Test.
5.4.1. Test. Notwithstanding anything to the contrary
in Article 4. and except as may be required or otherwise
permitted by rules prescribed by the Secretary of the
Treasury, if (DH) exceeds 1.25 times (DN), and (CH) exceeds
1.25 times (CN), the Plan Administrator shall take such action
as he deems appropriate to insure that the amount of Before-Tax
Contributions, After-Tax Contributions, Restricted After-Tax
Contributions, Matching Contributions, and Restricted
Matching Contributions on behalf of Highly Compensated
Employees for any Plan Year satisfies the following
requirement:
The sum of (DH) plus (CH) shall not exceed the greater
of:
5.4.1.1. the sum of
5.4.1.1.1. 1.25 times (G), plus
5.4.1.1.2. the lesser of 2 percentage
points plus (L) and 2 times (L); or
5.4.1.2. the sum of
5.4.1.2.1. 1.25 times (L), plus
5.4.1.2.2. the lesser of 2 percentage
points plus (G) and 2 times (G);
where:
"G" is the greater of (DN) and (CN);
"L" is the lesser of (DN) and (CN);
"(DN)" and "(DH)" have the same meanings as under
Section 5.2.1., including paragraphs 5.2.1.1.,
5.2.1.2. and 5.2.1.3. thereof; and
"(CN)" and "(CH)" have the same meanings as under
Section 5.3.1., including paragraphs 5.3.1.1. and
5.3.1.2. thereof.
5.4.2. Reduction of Contributions. If for any Plan
Year it is determined that the discrimination requirements
under Section 5.4.1. are not and will not be satisfied, the
Participants who are Highly Compensated Employees shall have
their:
5.4.2.1. Before-Tax Contributions, or
5.4.2.2. After-Tax Contributions, Restricted After-Tax
Contributions, Matching Contributions, and/or
Restricted Matching Contributions (including Forfeitures,
if any, allocated as such to the person's accounts on the
basis of Before-Tax Contributions or After-Tax
Contributions), or
5.4.2.3. both of the foregoing
reduced (in a manner determined by the Plan Administrator
consistent for all such Highly Compensated Employees)
retroactively in the manner specified in paragraphs 5.2.2.1.
and 5.2.2.2. of Section 5.2.2. or of Section 5.3.2., as
applicable, where the references therein to Sections 5.2.1. or
5.3.1. shall be deemed to be references to Section 5.4.1.;
provided that such reductions shall apply only for purposes of
the calculations under this subsection 5.4.2. and not for
purposes of the disposition of such reduced amounts under
subsection 5.4.3. below.
5.4.3. Disposition of Reduced Amounts. A Participant
whose contributions have been reduced in accordance with
Section 5.4.2. and who was eligible during the Plan Year for
both
5.4.3.1. Cash or Deferred Contributions, and
5.4.3.2. either matching Contributions or employee
contributions, or both,
under one or more plans sponsored by one or more Affiliated
Companies whether or not both such types of contributions were
in fact made by or on behalf of such Participant for the Plan
Year, shall have the amount of such reduction:
5.4.3.3. in the case of Before-Tax Contributions,
returned to him (along with any attributable income) or
recharacterized as Restricted After-Tax Contributions, as
if such contributions were subject to Section 5.2.3., and
5.4.3.4. in the case of contributions other than
Before-Tax Contributions, returned to him or forfeited
(in either case along with any attributable income), as
if such contributions were subject to Section 5.3.3.
All other Participants whose contributions have been reduced
in accordance with Section 5.4.2. shall have their
contributions restored to their accounts as if no reductions
under Section 5.4.2. had been made.
5.5. Maximum Limit on Contributions.
5.5.1. All Defined Contribution Plans.
Notwithstanding anything to the contrary in Article 4. and
subject to the requirements of subsection 5.5.4. below, a
Participant's Annual Addition in any Limitation Year may not
exceed the lesser of:
5.5.1.1. the greater of $22,500 multiplied by the
Adjustment Factor, or $30,000; or
5.5.1.2. 25% of the Participant's '415'
Compensation (excluding from the Annual Addition any
amounts allocated to the Participant's individual medical
account as described in Section 415(l) of the Code or to
his post-retirement medical benefit account under Section
419A(d) of the Code).
5.5.2. All Defined Contribution and Defined Benefit
Plans. Subject to the requirements of subsection 5.5.4.
below, in any case in which a Participant is a participant in
both a defined benefit plan maintained by any Affiliated
Company (as described in subsection 5.5.4.) and a defined
contribution plan maintained by that or any other Affiliated
Company (as described in subsection 5.5.4.), the sum of the
Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction for any Limitation Year may not exceed one
(1.0); provided that if the Prior Plan satisfied the
applicable requirements of Section 415 of the Code as in
effect for all Limitation Years beginning before January 1,
1987, the numerator of the Defined Contribution Plan Fraction
shall be reduced (but not below zero) by an amount, prescribed
by the Secretary of the Treasury, in determining whether this
requirement is satisfied.
5.5.3. Contribution Reductions If Necessary. If the
limitation imposed by this Section 5.5. otherwise would be
exceeded in respect of a Participant in a Limitation Year, the
Participant's annual benefit under the defined benefit
plan(s), if any, in which he participates shall be reduced to
the extent required (in accordance with the terms of such
plan) to permit compliance with such limitation. If such
action is not sufficient to permit such compliance,
contributions to the Participant's accounts for that
Limitation Year shall be reduced to the extent necessary to
reduce the Participant's Annual Addition to the extent
required to permit such compliance. Such reduction, plus any
gains or losses attributable thereto under the Plan, shall be
made in the following order:
5.5.3.1. After-Tax Contributions (with the
reductions, including gains or losses, returned to the
Participant);
5.5.3.2. Other contributions (with the reductions
applied as follows):
5.5.3.2.1. if the Participant remains an
Active Participant at the end of the Limitation
Year, to reduce employer contributions for the
Participant, beginning with Before-Tax
Contributions, for the following Limitation Year
(and succeeding Limitation Years, as necessary);
5.5.3.2.2. if the Participant is not an
Active Participant at the end of the Limitation
Year, to be held unallocated in a suspense account
(without allocation thereto of gains or losses) for
the Limitation Year and then allocated and
reallocated under the terms of the Plan to the
accounts of the remaining Active Participants in
subsequent Limitation Years (subject to the
limitations of this Section 5.5.) before any
contributions which would constitute Annual
Additions may be made to the Plan for such
Limitation Years, with a reversion to the Company
of any unallocable amounts remaining in the
suspense account upon the termination of the Plan.
5.5.4. Special Definition of "Affiliated Companies."
For purposes of this Section 5.5., all defined benefit plans
(whether or not terminated) of the Affiliated Companies shall
be treated as one defined benefit plan, and all defined
contribution plans (whether or not terminated) of the
Affiliated Companies shall be treated as one defined
contributions plan; provided that in applying the definition
of "Affiliated Company" in Article 1. of the Plan to determine
those companies that are an "Affiliated Company" for the
purposes of this Section 5.5., the phrase "more than 50
percent" shall be substituted for the phrase "at least 80
percent" each time it appears in Section 1563(a) of the Code.
5.5.5. Construction Consistent With Code. This
Section 5.5. is intended to satisfy the requirements imposed
by Section 415 of the Code and shall be construed in a manner
that will effectuate this intent, without imposing limitations
that are more stringent than those required by Section 415 of
the Code.
5.6. Deductibility of Contributions by Companies.
Notwithstanding anything to the contrary in Article 4., no Company
shall be required to make any contribution to the Plan which, when
considered with the other contributions of the Companies to this or
any other plans, exceeds the maximum deductible contributions under
Section 404(a) of the Code.
ARTICLE 6.
INVESTMENT OF FUNDS
6.1. Investment Funds. The Plan Asset Committee shall
designate from time to time various investment vehicles which shall
comprise the Investment Funds into which Participants' accounts may
be invested.
6.2. Participant Selection of Investments.
6.2.1. Future Contributions and Existing Account
Balances Except as provided in Subsection 6.2.3. for certain
Inactive Participants and subject to any restrictions on
transferring funds applicable to any Investment Fund, a
Participant may from time to time designate that future
contributions to his accounts and his existing account
balances be reinvested in whole percentages among one or more
Investments Funds which have been designated by the Plan Asset
Committee as available for this purpose. Such designation by
a Participant shall be in writing on such form provided by the
Plan Administrator (or in any other recorded form acceptable
to, and announced by, the Plan Administrator) and shall be
effective daily in such manner as the Investment Manager
shall, pursuant to its policies and procedures, provide.
Investment elections as to future contributions to his
accounts and his existing account balances shall be the same.
6.2.2. Participant's Failure to Select. Amounts with
respect to which a Participant has made no investment choice
shall be invested in the Investment Fund which will best serve
the objective of preserving the principal with generation of
income.
6.2.3. Participants Who Are No Longer Employees. If
a Participant ceases to be an Employee, his interest, reduced
by any security interest held by the Plan by reason of a Loan
outstanding to the Participant unless such Loan is timely
repaid in accordance with Section 13.4.3. shall, after the
Valuation Date coincident with or next following the date on
which he ceases to be an Employee, be invested by the Trustee
in the Investment Fund which will best serve the objective of
preserving the principal with generation of income.
6.3. Loan Fund. The Plan Asset Committee shall establish, or
direct the Trustee to establish, a Loan Fund which shall consist of
notes executed by Participants evidencing Loans made in accordance
with provisions of Article 13.
ARTICLE 7.
PLAN ACCOUNTS
7.1. Accounts. Separate accounts shall be established for
each Participant, known collectively as such Participant's
accounts, which shall be maintained on behalf of such Participant
until he has terminated his participation or, with respect to a
former Participant, until the funds in his accounts have been paid
out entirely to the former Participant or his Beneficiary in
accordance with the provisions of the Plan. The accounts, to the
extent applicable, shall consist of the Participant's:
7.1.1. Before-Tax Contributions Account;
7.1.2. After-Tax Contributions Account;
7.1.3. Matching Contributions Account;
7.1.4. Additional Company Contributions Account;
7.1.5. Restricted After-Tax Contributions Account;
7.1.6. Restricted Matching Contributions Account;
7.1.7. Restricted Additional Company Contributions
Account; and
7.1.8. Rollover Account.
The Plan Asset Committee may establish such other accounts,
and may subdivide any accounts or subdivided accounts, as it may
deem necessary for the proper administration of the Plan.
7.2. Crediting Investment Earnings.
7.2.1. General. As of each Valuation Date, the
investment earnings and losses from each Investment Fund,
other than the Loan Fund, shall be allocated to the accounts
of each Participant and invested in the respective Investment
Fund in such reasonable and consistently applied manner as the
Investment Manager shall determine, provided that the
allocation is based on the relative market values of the
portion of the Participant's accounts invested in the
respective Investment Fund.
7.2.2. Loan Fund. Principal and interest attributable
to any note in the Loan Fund shall be allocated entirely to
the account of the Participant who is obligated on the note.
7.3. Accounting. Separate accounting shall be maintained of
the investment in, and the gains or losses with respect to, each
Investment Fund for the vested and, where applicable, the nonvested
portion(s) of each of the Participant's accounts. Gains or losses
for this purpose shall be deemed to include, as applicable,
contributions, withdrawals, distributions, Forfeitures, investment
earnings (whether gains or losses) and any other credits and
charges allocable under the Plan.
7.4. Risk of Loss. The Companies do not guarantee that the
market value of any Investment Fund will be equal in value to the
purchase price of the assets of the Investment Fund or that the
total amount distributable or withdrawable with respect to any
period will be equal to or greater than the amount of the
contributions for such period. Each Participant assumes all risk
of any decrease in the value of each of the Investment Funds in
which his accounts are invested.
ARTICLE 8.
VESTING
8.1. Vested Interest.
8.1.1. Immediate Vesting. All amounts, if any,
credited to a Participant's Before-Tax Contributions Account,
After-Tax Contributions Account, Restricted After-Tax
Contributions Account, Restricted Matching Contributions
Account, Restricted Additional Company Contributions Account,
and Rollover Account shall at all times be fully vested and
nonforfeitable.
8.1.2. Death, Disability and Age Vesting. All
amounts, if any, credited to a Participant's Matching
Contributions Account and all amounts, if any, credited to a
Participant's Additional Company Contributions Account shall,
to the extent not already fully vested and nonforfeitable,
become fully vested and nonforfeitable upon his
8.1.2.1. death prior to a Forfeiture Event,
8.1.2.2. termination of employment as an Employee
due to his Disability,
8.1.2.3. attainment of Normal Retirement Age while
an Employee, or
8.1.2.4. retirement under the Saks Fifth Avenue
Pension Plan.
8.1.3. Service Vesting. Subject to Section 8.1.2., a
Participant shall be vested to the following extent with
respect to amounts, if any, credited to his Matching
Contributions Account and Additional Company Contributions
Account, upon the basis of his Vesting Service:
Years of Vesting Service Vested Percentage
Less than 2 years 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
ARTICLE 9.
HARDSHIP AND OTHER WITHDRAWAL RIGHTS
9.1. Hardship Withdrawals of Before-Tax Contributions.
9.1.1. General. Except as otherwise provided in this
Section 9.1., a Participant who is an Employee may elect to
withdraw all or a portion of his interest in his Before-Tax
Contributions Account (except for amounts credited thereto as
of any date after December 31, 1988 as income) or of the
nonforfeitable portion of his Matching Contributions Account
(but not any amount invested in the Loan Fund), but not more
than once in any three-month period, if the Plan Administrator
determines, on the basis of all relevant facts and
circumstances, that:
9.1.1.1. the withdrawal is on account of:
9.1.1.1.1. medical expenses described in
Section 213(d) of the Code incurred by the
Participant, his spouse or dependents (as defined
in Section 152 of the Code);
9.1.1.1.2. the purchase (excluding mortgage
payments) of a principal residence for the
Participant;
9.1.1.1.3. the payment of tuition for the
next semester or quarter of post-secondary
education for the Participant, his spouse, children
or dependents;
9.1.1.1.4. the need to prevent the
Participant's eviction from his principal residence
or the foreclosure on the mortgage thereon; or
9.1.1.1.5. any other needs determined to be
sufficient for this purpose by the Commissioner of
Internal Revenue and published in revenue rulings,
notices or other documents of general
applicability;
and
9.1.1.2. either:
all requirements prescribed for this purpose
by the Commissioner of Internal Revenue in
revenue rulings, notices or other documents of
general applicability as adequate to
constitute immediate and heavy financial need
are satisfied, or
all of the following requirements are
satisfied:
9.1.1.2.l. the amount to be withdrawn does
not exceed the need under paragraph
9.1.1.2.2. the Participant has obtained all
distributions, other than hardship distributions,
and all nontaxable (at the time of the loan) loans
currently available under a I p ans maintained by
any Affiliated Company; and
9.1.1.2.3. all other plans maintained by any
Affiliated Company provide (as does this Plan):
that the Participant's "elective
deferrals" within the meaning of Section
402(g) of the Code and employee
contributions will be suspended for at
least twelve (12) months following
receipt of the withdrawal; and
that the Participant may not make any
such "elective deferrals" for his taxable
year next beginning after the withdrawal
in excess of $7,000 multiplied by the
Adjustment Factor less the amount of the
Participant's "elective deferrals" for
his taxable year in which the withdrawal
was made.
provided that with respect to the portion, if any, of his
Before-Tax Contributions Account or of the nonforfeitable
portion of his Matching Contributions Account that is invested
in a fund consisting of equity investments, the Participant
shall not be permitted to withdraw pursuant to this Section
9.1.1. more than seventy percent (70%) of such portion of his
Before-Tax Contributions Account or the nonforfeitable portion
of his Matching Contributions Account, as applicable, as
determined under the most recent valuation of such Account
available to the Plan Administrator.
9.1.2. Additional Provisions. The minimum amount a
Participant shall be permitted to withdraw under this Section
9.1. is the lesser of $500 or the sum of the balances of the
accounts eligible for withdrawal. A written application for
a withdrawal pursuant to this Section 9.l. shall be submitted
to the Plan Administrator. The Plan Administrator shall
require the submission of such supporting documentation as he
deems necessary, and he shall render his decisions on such
applications on a uniform and nondiscriminatory basis.
Payment of a withdrawal made pursuant to this Section 9.1.
shall be made as of and as soon as practicable following the
Plan Administrator's determination under Section 9.1.1.
9.2. Withdrawals of After-Tax and Rollover Contributions. A
Participant who is an Employee shall be entitled to withdraw all or
a portion of his After-Tax Contributions Account and Rollover
Account (exclusive of amounts invested in the Loan Fund) upon
giving notice in such manner and at such time as the Plan
Administrator shall, by uniformly applicable procedures, provide.
No more than one withdrawal pursuant to this Section shall be made
in any three-month period. Payment of a withdrawal made pursuant
to this Section shall be made as of and in such manner as the Plan
Administrator shall, by uniformly applicable procedures, provide.
9.3. Withdrawals After Attainment of Age 59 1/2. A Participant
who is an Employee and has attained age 59 1/2 may elect to withdraw
all or a portion of the nonforfeitable portion of his Account
(exclusive of amounts in the Loan Fund) by giving notice in such
manner and at such time as the Plan Administrator shall, by
uniformly applicable procedures, provide. No more than one
withdrawal pursuant to this Section shall be made in any three (3)
month period. Payment of a withdrawal made pursuant to this
Section shall be made as of and in such manner as the Plan
Administrator shall, by uniformly applicable procedures, provide.
9.4. Withdrawals Upon Plan Termination, Sale of Assets. or
Sale of Subsidiary. A Participant may elect, by written notice
received by the Plan Administrator, to withdraw his entire Before-Tax
Contributions Account, After-Tax Contributions Account,
Restricted After-Tax Contributions Account, Restricted Matching
Contributions Account, Restricted Additional Company Contributions
Account, and Rollover Account and the nonforfeitable portions of
his Additional Company Contributions Account and his Matching
Contributions Account (exclusive of amounts invested in the Loan
Fund) upon:
9.4.1. the termination of the Plan without the
establishment or maintenance of another defined contribution
plan (other than an employee stock ownership plan defined in
Section 4975(e)(7) of the Code);
9.4.2. the disposition, to an entity which is not an
Affiliated Company, of substantially all of the assets used by
the Company in the trade or business in which the Participant
continues employment, following which the Company continues to
maintain the Plan; or
9.4.3. the disposition, to an entity which is not an
Affiliated Company, of a corporate Affiliated Company's
interest in a subsidiary Company in which the Participant
continues employment, following which the Company continues to
maintain the Plan;
provided that any such withdrawal must constitute a lump sum
distribution of the balance to the Participant's credit in his
aforesaid accounts under Section 402(e)(4) of the Code
(without regard to clauses (i)-(iv) of Section 402(e)(4)(A) of
the Code or to Sections 402(e)(4)(B) and (H) of the Code).
9.5. Repayment of Withdrawals. No amounts withdrawn pursuant
to this Article 9. may be repaid except as may be permitted
expressly by the Plan to cure a Forfeiture.
ARTICLE 10.
FORFEITURES
10.1. Forfeitures. Upon the occurrence of a Forfeiture
Event in respect of a Participant, his Matching Contributions
Account and Additional Company Contributions Account shall
immediately be reduced by the amount of the Forfeiture
corresponding to each such account.
10.2. Allocation of Forfeitures. Any Forfeitures shall be
applied to reduce contributions of the Companies to the Plan and
shall be allocated, as Company contributions and not as Forfeitures
as such, in the manner provided for the contributions which the
Forfeitures replace. In the event the Plan is terminated, any such
Forfeitures not yet applied to reduce Company contributions shall
be allocated to the Matching Contributions Accounts on the basis of
'414(s)' Compensation.
10.3. Restoration of Forfeitures. If a Participant who
has incurred one or more Forfeiture Events, but has not incurred i
Forfeiture Event due to a five (5) year Period of Severance timely
repays to the Plan in one lump sum the entire amount of all
distributions, withdrawals or both, which occasioned such
Forfeiture Events, then:
10.3.1. the repaid distributions and withdrawals shall
be credited to the Participant's After-Tax Contributions
Account; and
10.3.2. the Company in respect of the Participant shall
contribute to the Plan the amount of the Forfeiture(s)
resulting from such Forfeiture Event(s), and such amount shall
be credited to each account of the Participant in the amount
of the corresponding Forfeiture by which it had been reduced.
A Participant's repayment to the Plan under this Section 10.3.
is timely only if the repayment is received by the Plan
Administrator while the Participant is an Eligible Employee and
before the earlier of (1) the termination of the Plan and (2) five
(5) years after the first date on which the Participant thereafter
becomes an Eligible Employee.
ARTICLE 11.
PARTICIPANT'S BENEFITS UPON SEPARATION FROM EMPLOYMENT
11.1. Participant's Benefits. Except as may be provided
by a Qualified Domestic Relations Order, a Participant who ceases
to be an Employee for any reason other than his death shall be
entitled to receive his entire nonforfeitable interest in his
accounts valued as of the Valuation Date next following the date on
which the request was made (or if payment is made immediately, by
reference to the last available Valuation Date), or if later the
second-to-last Valuation Date preceding the date of distribution,
reduced by any security interest held by the Plan by reason of a
Loan outstanding to the Participant unless such outstanding Loan is
timely repaid in accordance with Section 13.4.3.
11.2. Form of Benefits.
11.2.l. Retirement or Disability. A Participant who
retires under the terms of the Saks Fifth Avenue Pension Plan,
or otherwise ceases to be an Employee after attainment of
Normal Retirement Age or by reason of Disability, will receive
his benefits in a single lump sum, in cash, payable as soon as
practicable after such retirement or separation, unless his
entire benefits payable exceed $3,500 at the time they are
payable and prior to the commencement of distribution and he
elects one of the following optional forms or a combination of
the available forms:
11.2.1.1. Deferred payment of a lump sum not later
than April 1 of the calendar year following the calendar
year in which he attains age 70 1/2; or
11.2.1.2. Payment in annual installments commencing
not later than April 1 of the calendar year following the
calendar year in which he attains age 70 1/2 and continuing
over a period not to exceed ten (10) years.
An election to defer payment of a lump sum or to receive
a distribution in installments may be commuted into a single
lump sum payment at any time upon written notice to the Plan
Administrator.
11.2.2. Other Termination of Employment. A Participant
who ceases to be an Employee for any reason other than
retirement, Disability or death, will receive the
nonforfeitable portion of his Accounts in a single lump sum,
in cash.
11.3. Commencement of Benefits. Subject to a Participant
s election otherwise pursuant to Section 11.2.1., a Participant's
benefits shall commence (or, if none, shall be deemed to commence)
as of and as soon as practicable after the Valuation Date
coincident with or next following the date on which he ceases to be
an Employee; provided that to the extent required by the following
rules, a Participant's benefits shall commence as of and as soon as
practicable after any other Valuation Date:
11.3.1. in satisfaction of Section 411(a)(11) of the
Code, if the Participant's entire benefits payable exceed
$3,500 at the time they are payable and prior to the
commencement of distribution, no portion thereof shall be paid
during the Participant's life before he reaches his Normal
Retirement Age without his written consent given no more than
90 days prior to such payment;
11.3.2. in satisfaction of Section 401(a)(14) of the
Code, unless the Participant otherwise elects, payment of the
Participant's benefits shall begin not later than the 60th day
after the close of the Plan Year in which the last of the
following occurs:
11.3.2.1. the Participant attains his Normal
Retirement Age;
11.3.2.2. the tenth anniversary of the
Participant's commencement of participation in the Plan;
or
11.3.2.3. the Participant ceases to be an Employee:
and
11.3.3. in satisfaction of Section 401 (a)(9) of the
Code and subject to any additional requirements or exceptions
set forth in regulations promulgated under that Section by the
Secretary of the Treasury, including Proposed Treas. Reg. Section
1.401(a)(9)-2 (but not by way of providing any form or delay
in commencement of benefit not otherwise provided under this
Plan),
11.3.3.1. payment of the Participant's benefits
shall commence not later than April 1 of the calendar
year following the later of (A) the calendar year in
which the Participant attains age 70 1/2, or (B) in the case
of a Participant who attained age 70 1/2 before January 1,
1988 and who was not a 5% owner as that term is defined
in Section 416(i)(1)(B)(i) of the Code and the
regulations thereunder with respect to the calendar year
in which he attained age 70 1/2, the calendar year in which
the Participant retires under the terms of any pension
plan maintained by an Affiliated Company;
11.3.3.2. the Participant's entire interest shall
be distributed either (A) over his life or over his and
his Beneficiary's joint lives, or (B) over a period not
extending beyond his life expectancy or his and his
Beneficiary's joint life expectancies; and
11.3.3.3. if the Participant dies after benefit
payments begin and before his entire interest has been
distributed, the form of distribution in effect before
his death shall not be changed unless his remaining
interest shall be distributed at least as rapidly as
under the form of distribution in effect before he died.
11.4. Distributions. All distributions hereunder shall be
made by the Trustee as of the date(s) specified in this Article 11.
The Trustee shall be entitled to receive written instructions and
proper notice from the Plan Administrator with respect to any
distribution and shall not be required to make such distributions
until such instructions have been received in a form which in the
opinion of the Trustee is sufficiently clear with respect to the
distributions required.
11.5. Participant Directed Rollovers.
11.5. 1. To the extent required by Section 401(a)(31) of
the Code, a Participant whose Accounts become payable in an
"eligible rollover distribution," as defined in 11.5.2.1.
below, shall be entitled to make an election for a direct
rollover of all or a portion of such eligible rollover
distribution to an "eligible retirement plan," as defined in
11.5.2.2. below. Any non-taxable portion of the value of a
Participant's Accounts shall be payable to the Participant as
otherwise provided elsewhere in the Plan.
11.5.2. For purposes of this Section,
11.5.2. 1. an "eligible rollover distribution"
shall mean any distribution of all or any portion of the
value of a Participant's Accounts, except that an
eligible rollover distribution shall 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
Participant or the joint lives (or joint life
expectancies) of the Participant and the Participant's
designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code, and the portion of any distribution that is not
includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with
respect to employer securities); and
11.5.2.2. an "eligible retirement plan" shall mean
any plan described in Code Section 402(c)(8)(B), the
terms of which permit the acceptance of a direct rollover
from a qualified plan.
11.5.3. A Participant's direct rollover election under
this Section shall be made in accordance with rules and
procedures established by the Plan Administrator and shall
specify the dollar or percentage amount of the direct
rollover, the name and address of the eligible retirement plan
selected by the Participant and such additional information as
the Plan Administrator deems necessary or appropriate in order
to implement the Participant's election. It shall be the
Participant's responsibility to confirm that the eligible
retirement plan designated in the direct rollover election
will accept the eligible rollover distribution. The Plan
Administrator shall be entitled to effect the direct rollover
based on its reasonable reliance on information provided by
the Participant, and shall not be required to independently
verify such information, unless it is clearly unreasonable not
to do so.
11.5.4. At least thirty (30) days, but not more than
ninety (90) days, prior to the date the value of a
Participant's Accounts becomes payable, the Participant shall
be given written notice of any right he may have to elect a
direct rollover of his eligible rollover distribution;
provided, however, a Participant who has received the direct
rollover notice may waive the thirty (30)day advance notice
requirement by making an affirmative election to make or not
to make a direct rollover of all or a portion of his Accounts.
11.5.5. If a Participant whose Accounts become payable
in an eligible rollover distribution fails to file a direct
rollover election with the Plan Administrator within ninety
(90) days after receipt of the direct rollover notice, or if
the Plan Administrator is unable to effect the rollover within
a reasonable time after the election is filed with the Plan
Administrator due to the failure of the Participant to take
such actions as may be required by the eligible retirement
plan before it will accept the rollover, the value of the
eligible rollover distribution shall be paid to him in
accordance with the applicable provisions of this Plan, after
Withholding any applicable income taxes.
11.5.6. To the extent required by Section 401(a)(31) of
the Code, if all or a portion of the value of a Participant's
Accounts is payable to his surviving spouse in an eligible
rollover distribution, or to a former spouse in accordance
with a "qualified domestic relations order," such surviving
spouse or former spouse shall be entitled to elect a direct
rollover of all or a portion of such distribution to an
individual retirement account or an individual retirement
annuity in accordance with the provisions of this Section.
ARTICLE 12.
BENEFICIARY'S BENEFITS UPON PARTICIPANT'S DEATH
12.1. Beneficiary's Benefits. Upon the death of a
Participant prior to complete distribution of his account, his
Beneficiary shall be entitled to receive the entire interest in the
Participant's accounts valued as of the Valuation Date next
following the date on which the request was made (or if payment is
made immediately by reference to the last available Valuation
Date), or if later the second-to-last Valuation Date preceding the
date of distribution, reduced by any security interest held by the
Plan by reason of a Loan outstanding to the Participant unless such
outstanding Loan is timely repaid in accordance with Section
13.4.3.
12.2. Form of Benefits. The Beneficiary's benefits shall
be paid in a single lump sum, in cash, unless the Participant had
commenced installment payments prior to his death, in which case
installments shall continue to the Beneficiary. The Beneficiary
may commute such installments into a single lump sum payment upon
written notice to the Plan Administrator.
12.3. Commencement of Benefits. The Beneficiary's
benefits shall commence as of and as soon as practicable after the
Participant's death; provided that in satisfaction of Section
401(a)(9) of the Code and subject to any additional requirements or
exceptions set forth in regulations promulgated under that Section
by the Secretary of the Treasury (but not by way of providing any
form or delay in commencement of benefit not otherwise provided
under this Plan), payment of the Beneficiary's benefits shall be
completed not later than the last day of the calendar year
containing the fifth anniversary of the Participant's death, except
that if the Participant's Beneficiary is his Spouse:
12.3.1. payment of the Spouse's benefits shall commence
not later than the later of (1) the last day of the calendar
year next following the calendar year in which the Participant
died and (2) the last day of the calendar year in which the
Participant, if he had not died, would have reached age 70 1/2
and
12.3.2. if the Spouse dies before the commencement of
payment of her benefits, payment of the contingent
Beneficiary's benefits shall be completed not later than the
last day of the calendar year containing the fifth anniversary
of the Spouse's death.
12.4. Designation of Beneficiary. Except as may be
provided by a Qualified Domestic Relations Order, a Participant's
Beneficiary shall be the one or more persons (which can include the
Participant's Spouse and can include primary and contingent
Beneficiaries) or trusts designated in writing on a form provided
by the Plan Administrator and signed by the Participant; provided
that the Participant's Beneficiary shall be his Spouse unless:
12.4.1. the Spouse consents, or has consented, in
writing to such designation (which consent shall be
irrevocable with respect to the designation to which it was
given), and
12.4.1.1. such consent is witnessed by a notary
public who is not in the employ of an Affiliated Company;
12.4.1.2. the Beneficiary may not be changed (other
than revoked) without the Spouse's similarly notarized
written consent (except to the extent, if any, that the
Spouse's consent expressly permits further Beneficiary
designations by the Participant without the Spouse's
further consent); and
12.4.1.3. the Spouse's consent acknowledges the
effect of such designation;
or
12.4.2. it is established to the satisfaction of the
Plan Administrator that such consent cannot be obtained
12.4.2.1. because the Participant has no Spouse;
12.4.2.2. because the Spouse cannot be located; or
12.4.2.3. because of such other circumstances as
the Secretary of the Treasury may by regulations
prescribe.
If no Beneficiary is validly designated or if no such validly
designated Beneficiary survives the Participant, the
Participant's Beneficiary shall be his Spouse, or, if there is
no Spouse, the Participant's children per stirpes, or, if
there is no Spouse or surviving child or lineal descendant of
a child, the Participant's estate.
12.5. Distributions. All distributions hereunder shall be
made by the Trustee as of the date(s) specified in this Article 12.
The Trustee shall be entitled to receive written instructions and
proper notice from the Plan Administrator with respect to any
distribution and shall not be required to make such distributions
until such instructions have been received in a form which in the
opinion of the Trustee is sufficiently clear with respect to the
distributions required.
ARTICLE 13.
LOANS
13.1. Loan Amount, Term and Interest Rate.
13.1.1. Amount. Any Active Participant may borrow from
the Plan an amount that (when added to the balance of all
other outstanding Loans to the Participant under this Plan)
does not exceed the smallest of:
13.1.1.1. 50% of the value of the Participant's
entire nonforfeitable interest in his accounts under this
Plan;
13.1.1.2. the lesser of the following two amounts,
in either case reduced by the balance of loans
outstanding to the Participant under all other tax-qualified
defined benefit and defined contribution plans
of the Affiliated Companies:
13.1.1.2.1. $50,000 less the excess (if any)
of (i) the highest outstanding balance of loans to
the Participant under all tax-qualified defined
benefit and defined contribution plans of the
Affiliated Companies, including this Plan, during
the one-year period ending on the day immediately
preceding the date of the Loan over (ii) the
outstanding balance of all such loans to the
Participant on the date of the Loan, or
13.1.1.2.2. 50% of the present value of the
Participant's nonforfeitable accrued benefits
(determined without regard to any deductible
employee contributions as defined in Section
72(o)(5)(B) of the Code) under all tax qualified
defined benefit and defined contribution plans of
the Affiliated Companies, including this Plan, as
determined by the Plan Administrator (but not less
than $1 0,000), or
13.1.1.3. such lesser maximum amount as the Plan
Administrator may from time to time establish and apply
uniformly to all Loans made pursuant to the terms of the
Plan.
Loans shall be granted in $100.00 increments. The minimum
amount of any Loan shall be $1,000. For purposes of this
Section 13.1., the value of a Participant's accounts shall be
determined as of such date as the Plan Administrator shall
determine.
13.1.2. Term. Loans shall be granted for a minimum term
of six (6) months, or for a term that is an integral multiple
of one (1) month up to a maximum term of five (5) years;
provided that the term of the Loan may not result in payments
per Pay Period of less than $5.00, or such greater amount as
the Plan Administrator may from time to time determine; and
provided further that a Loan used solely to acquire the
principal residence of the Participant may have a term
exceeding five (5) years.
13.1.3. Interest Rate. Loans shall bear such rate of
interest as the Plan Administrator determines, under a written
procedure established by him (which shall constitute a part of
the Plan), will provide a return commensurate with the
interest rates charged by persons in the business of lending
money for loans which would be made under similar
circumstances.
13.1.4. Level Amortization. Except as provided in
regulations prescribed by the Secretary of the Treasury, Loans
shall require substantially level amortization (with payments
not less frequently than quarterly) over the term of the Loan.
13.1.5. Monthly Approval. Loans shall be approved by
the Plan Administrator effective on the first day of a month;
provided, however, that in the sole discretion of the Plan
Administrator, a Loan may be approved effective on a date
other than the first day of a month if emergency circumstances
exist for a Participant.
13.1.6. Administration Charge. For each Loan, the
Participant's accounts may be charged a one-time loan
administration fee in a flat dollar amount as the Plan
Administrator determines on a uniform and nondiscriminatory
basis to be appropriate to defray, but not to exceed, the
Plan's average per Loan administration costs or incurred
expenses.
13.2. Frequency of Loans. No more than two Loans to any
Participant shall be outstanding at any time.
13.3. Security for Loans.
13.3.1. No Loan shall be made to any Participant prior
to the execution and delivery by the Participant of an
application therefor, a note payable to the Trustee on which
the Participant shall be personally liable for the amount of
the Loan and in a form prescribed by the Plan Administrator,
an authorization for payroll deductions for repayment of the
Loan and the written consent of the Participant to the making
of the Loan and to the possible reduction of the Participant's
accounts under the terms of the Plan to satisfy the Loan
obligation, provided further that such consent shall be given
within ninety (90) days prior to the making of the Loan.
13.3.2. Cash equal to the value of any Loan granted
shall be transferred to the Participant from the Investment
Fund or Investment Funds in which the nonforfeitable portion
of the Participant's accounts are invested in the following
order: (1) Matching Contributions Account; (2) Before-Tax
Contributions Account; (3) Rollover Account; and (4) After-Tax
Contributions Account (unless otherwise designated by the Plan
Administrator pursuant to uniform rules), in proportion to the
nonforfeitable amount of such accounts invested in such
Investment Fund or Investment Funds; however, the grant of a
Participant's application for a Loan shall not be deemed a
change of investment designation with respect to his existing
account balances. Upon such transfer of cash to the
Participant, the note evidencing the Participant's Loan
obligation to the Trust Fund shall be transferred to the Loan
Fund. The Participant's note shall be held as an investment
of the Participant's account in the Loan Fund, provided that,
notwithstanding the nonalienation rule of Section 18.4., the
Loan Fund shall have a first lien on said note.
13.4. Repayment.
13.4.1. General. Repayment shall be accomplished
through regular payroll deductions which shall be deemed
"deductions authorized by the Participant" for purposes of
Sections 4.1.1. and 4.2.1. Payments by a Participant shall be
applied first to outstanding interest and then to reduce the
outstanding principal balance of the Loan and shall be
allocated to the Participant's accounts in the following
order: (1) After-Tax Contributions Account; (2) Rollover
Account; (3) Before-Tax Contributions Account; and (4)
Matching Contributions Account (unless otherwise designated by
the Plan Administrator pursuant to uniform rules), in
accordance with his election under Section 6.2.1. as to the
investment of his future contributions, or if none, then his
most recent election under Section 6.2.1. as to his existing
account balances. A Participant shall be entitled to prepay
without penalty the total outstanding principal amount of and
interest accrued on any Loan under the Plan.
13.4.2. Layoff or Authorized Leave of Absence. A
Participant with an outstanding Loan who is placed on layoff
or authorized leave of absence status for any reason or is
absent from work due to any Disability shall, in addition, be
entitled to select one of the following modes of repayment:
13.4.2.1. installment payments equivalent in value
to the payments deducted from his paycheck, or
13.4.2.2. deferred payment of all principal and
interest for the duration of the absence (but not to
exceed one year), followed by the reamortization on the
date on which the Participant returns to active
employment and at the then-current interest rate
determined under Section 13.1.3., of the then-outstanding
principal and interest (including interest accrued during
the absence) in substantially equal installments over the
remaining Loan term, extended by the period of absence;
provided that in no event shall any such Loan become due and
payable later than the expiration of the five-year limitation
prescribed by Section 13.1.2., unless otherwise permitted by
that Section.
13.4.3. Death or Benefit Commencement. If
13.4.3.1. a Participant or his Beneficiary becomes
entitled to an imminent benefit under Articles 11. or 12.
prior to repayment of the total principal amount of and
accrued interest on a note held by the Loan Fund, and
13.4.3.2. the outstanding principal amount of and
accrued interest on such note is not repaid within ten
(10) days of such entitlement,
the Participant's applicable nonforfeitable account balances
shall be reduced, in proportion to their investment in the
Loan Fund, by the amount of said total outstanding principal
amount and accrued interest prior to the payment of any
benefits to the Participant or his Beneficiary, and the amount
of such reduction shall be applied to satisfy the note held by
the Loan Fund.
13.5. Further Limitations on Loans. Notwithstanding
anything to the contrary contained in this Article 13., the Plan
Administrator reserves the right to further limit the amount that
may be borrowed hereunder, to further limit the terms and
conditions under which Loans will be made, or to declare a
moratorium on the granting of Loans to Participants on the basis of
uniform and nondiscriminatory rules.
13.6. Certain Beneficiaries and Inactive Participants.
Any person who is a "party in interest" to the Plan within the
meaning of Section 3(14) of ERISA and who is either a Beneficiary
having an account under the Plan or an Inactive Participant shall
be entitled to borrow from the Plan on the same terms and
conditions as an Active Participant, provided that:
13.6.1. the principal residence exception under Section
13.1.2. shall apply only with respect to the principal
residence of a Participant, and
13.6.2. the requirement under Section 13.4.1. for
repayment through regular payroll deductions shall not apply
unless the Inactive Participant is an employee of a Company.
13.7. Loans from Prior Plan. Any note representing a
Participant loan that is transferred to the Plan from the Prior
Plan shall be held in the Loan Fund and shall be administered and
repaid in accordance with the terms of the note.
ARTICLE 14.
ADMINISTRATION OF PLAN
14.1. Appointment of Plan Administrator. There shall be
a Plan Administrator who shall be an officer of the Company
appointed by the Board of Directors and identified in Appendix A
hereto. The Plan Administrator shall hold office until his death,
resignation, disqualification or removal.
14.2. Resignation and Removal of Plan Administrator. The
Plan Administrator may resign at any time by giving written notice
to the Board of Directors, effective as therein stated. The Plan
Administrator may, at any time, be removed by the Board of
Directors.
14.3. Appointment of Successor. Upon the death,
resignation, disqualification or removal of the Plan Administrator,
the Board of Directors may appoint a successor. Notice of
appointment of a successor shall be given by the Board of Directors
in writing to the Plan Administrator and to the Trustee.
14.4. Power and Duties of the Plan Administrator. The
Plan Administrator shall have full power and authority to control
and manage the operation and administration of the Plan and to
construe and apply all of its provisions, provided that the Plan
Administrator shall have no power, authority, or responsibility
with respect to those matters which are the responsibility of the
Trustee. Any action taken in good faith by the Plan Administrator
in the exercise of authority conferred upon him by this Plan shall
be conclusive and binding upon Participants, their Beneficiaries
and all other persons. All discretionary powers conferred upon the
Plan Administrator shall be absolute, provided that no
discretionary power shall be exercised in such manner as to cause
or create discrimination in favor of Employees who are officers or
shareholders of any Company or Highly Compensated Employees. The
authority of the Plan Administrator shall include, but not by way
of limitation, the following:
14.4.1. Authority to interpret the provisions of the
Plan and to determine any questions arising under -the Plan or
in connection with the administration or operation thereof;
14.4.2. Authority to determine all questions affecting
the eligibility of any person to be, become or remain a
Participant in the Plan;
14.4.3. Authority to determine the Service of any person
and to compute the amount of benefit or other sum payable
under the Plan to any person;
14.4.4. Authority to determine all questions regarding
the status of any person as a Participant;
14.4.5. Authority to authorize and direct all
disbursements of benefits and other sums under the Plan and to
determine the manner in which benefits shall be payable to
Participants;
14.4.6. Authority to adopt such rules as he may deem
desirable for the purpose of regulating the conduct and
discharge of his business and duties in the administration of
the provisions of the Plan, provided that such rules shall not
be inconsistent with the provisions of the Plan;
14.4.7. Authority to employ such counsel and agents, and
to obtain such clerical, administrative, accounting, medical,
legal, insurance and actuarial services as he may deem
necessary or appropriate in carrying out the provisions of the
Plan, including authority to employ one or more persons to
render advice with regard to any responsibility which any
person may have under the Plan; and
14.4.8. Authority to purchase such liability insurance
and bonds as he may deem appropriate in connection with the
operation and administration of the Plan.
14.5. Delegation of Duties. The Plan Administrator may
designate other persons (or committee(s) of persons) to carry out
fiduciary or other responsibilities (other than responsibilities
for the management or control of Plan assets) under the Plan. The
Plan Administrator, and any person delegated under the provisions
hereof to carry out any responsibilities under the Plan, shall be
entitled to rely upon information, data, and documentation
furnished by any Company; tables, valuations, certificates, and
reports furnished by actuaries, and upon certificates, reports, and
opinions made or given by any accountant, legal counsel or other
expert or advisor (who may be employed or retained by one or more
Affiliated Companies) selected or approved by the Plan
Administrator; and the Plan Administrator and any delegate thereof
shall not be liable, except to the extent provided by law, for any
action taken, suffered or omitted by them in good faith or for any
such action in reliance upon any such actuary, accountant, legal
counsel or other expert or advisor, or upon any information, data,
documentation, report, or opinion furnished by the same or by any
Company.
14.6. Plan Administrator's Account. A Plan Administrator
who is also a Participant hereunder shall not rule on any question
involving his own interest under the Plan, as distinguished from
interests of others similarly situated. In such event, the
determination shall be made by a person appointed by the majority
of the Plan Asset Committee (excluding the Plan Administrator if he
is a member of the Plan Asset Committee).
14.7. Compensation of Plan Administrator. The Plan
Administrator shall serve as such without compensation from the
Plan, but may receive compensation from an Affiliated Company for
so serving.
14.8. Expenses. Ordinary and necessary expenses incurred
in connection with the establishment or termination of the Plan may
be paid from the Trust Fund to the extent allowed under Section
403(c)(1) of ERISA. Ordinary and necessary expenses incurred for
any Plan Year in connection with administering the Plan (including
the cost of any bond required under Section 412 of ERISA), other
than establishment or termination expenses, may tie paid from the
Trust Fund. To the extent expenses incurred in establishing,
administering or terminating the Plan are not paid from the Trust
Fund they shall be paid by the Affiliated Companies.
14.9. Information Required From Participants. Each
Participant or Beneficiary will furnish to the Plan Administrator
such information in writing as the Plan Administrator considers
necessary or desirable for purposes of administering the Plan, and
the provisions of the Plan respecting any payments thereunder are
conditional upon the Participant's or Beneficiary's furnishing
promptly such true, full and complete information as the Plan
Administrator may request. Any notice or information which,
according to the terms of the Plan or the rules of the Plan
Administrator, must be filed with the Plan Administrator shall be
deemed so filed at the time that it is actually received by the
Plan Administrator.
14.10. Records. The Plan Administrator shall keep, or
cause to be kept, all such books, accounts, records or other data
as may be necessary or advisable in his judgment for the
administration of the Plan and properly to reflect the affairs
thereof.
14.11. Reports to Participant. The Plan Administrator
shall notify each Participant quarterly, within a reasonable time
after each Quarterly Date, of the balances of such Participant's
accounts as of that Quarterly Date, unless the Plan Administrator
determines to make such reports annually. In the case of a
Participant who is no longer an Employee, a mailing of his
statement of accounts to his last known home address by first class
mail shall be sufficient.
14.12. Multiple Fiduciary Capacity. Nothing in this Plan
shall be deemed to prohibit any person or group of persons from
serving in more than one fiduciary capacity with respect to the
Plan.
ARTICLE 15.
PLAN ASSET COMMITTEE
15.1. Appointment of Plan Asset Committee. There shall be
a Plan Asset Committee which shall consist of not fewer than three
(3) members appointed by the Board of Directors. Members of the
Plan Asset Committee may, but need not, include the Plan
Administrator. Members of the Plan Asset Committee shall hold
office until their death, resignation, disqualification or removal.
The Plan Asset Committee shall constitute the Named Fiduciary with
respect to the responsibilities allocated to it by the provisions
of this Plan.
15.2. Resignation and Removal of Members. Any member of
the Plan Asset Committee may resign at any time by giving written
notice to the other members and to the Board of Directors,
effective as therein stated. Any member of the Plan Asset
Committee may, at any time, be removed by the Board of Directors.
15.3. Appointment of Successors. Upon the death,
resignation, disqualification or removal of any member of -the Plan
Asset Committee, the Board of Directors may appoint a successor.
Notice of appointment of a successor member shall be given by the
Board of Directors in writing to the Trustee and to the Plan Asset
Committee.
15.4. Committee Powers. The Plan Asset Committee shall
have full power and authority to discharge the responsibilities
allocated to it pursuant to the Plan. The Plan Asset Committee
shall have no power, authority or responsibility with respect to
those matters which are the responsibility of the Plan
Administrator. Any action taken in good faith by the Plan Asset
Committee in the exercise of authority conferred upon it by this
Plan shall be conclusive and binding upon Participants, their
Beneficiaries and all other persons. All discretionary powers
conferred upon the Plan Asset Committee shall be absolute, provided
that no discretionary power shall be exercised in such manner as to
cause or create discrimination in favor of Employees who are
officers or shareholders of any Company or Highly Compensated
Employees. Except to the extent delegated to the Trustee under, or
pursuant to, the Trust Agreement, the authority of the Plan Asset
Committee shall include, but not by way of limitation, the
following:
15.4.1. Authority to control, invest, reinvest, manage
and dispose of all assets of the Trust Fund;
15.4.2. Authority to select and to direct the Trustee
with respect to investment and reinvestment of the assets of
the Plan and authority to make any decision respecting assets
of the Plan;
15.4.3. Authority to direct the Trustee to undertake and
assume the authority and responsibility to invest and reinvest
the assets of the Plan and to make any decision respecting
assets of the Plan, provided that any such direction shall be
in writing;
15.4.4. Authority to make or provide for the making of
any audit or examination of the investment affairs of the
Plan;
15.4.5. Authority to engage such legal, actuarial,
accounting and other professional services as it may deem
proper, including authority to employ one or more persons to
render advice with regard to any responsibility which the Plan
Asset Committee, any member thereof or any other person
designated under Section 15.5. may have under the Plan;
15.4.6. Authority to designate Investment Funds
available to Participants for the investment of the amounts
credited to their accounts, and to specify the terms upon
which such selections may be made; and
15.4.7. Authority to perform or cause to be performed
such further acts as it may deem to be necessary, appropriate
or convenient in the exercise of its power and authority under
the Plan.
15.5. Allocation and Delegation of Duties. By action of
the Plan Asset Committee, duly reflected in its minutes, the Plan
Asset Committee may allocate its fiduciary responsibilities among
its members and may designate other persons to carry out fiduciary
or other responsibilities under the Plan. Pursuant to this Section
15.5., the Plan Asset Committee may appoint from among its members
a chairman and may appoint a secretary who need not otherwise be a
member of the Committee, each of whom shall have such powers as the
Plan Asset Committee may provide from time to time. The foregoing
provisions of this Section 15.5. shall not limit the authority of
the Plan Asset Committee to appoint one or more Investment Managers
in accordance with Section 15.6.. The Plan Asset Committee, and any
person delegated under the provisions hereof to carry out any
responsibilities under the Plan, shall be entitled to rely upon
information, data, and documentation furnished by any Company;
tables, valuations, certificates, and reports furnished by
actuaries; and upon certificates, reports, and opinions made or
given by any accountant, legal counsel or other expert or advisor
(who may be employed or retained by one or more Affiliated
Companies) selected or approved by the Plan Asset Committee; and
the members of the Plan Asset Committee and any delegate thereof
shall not be liable, except to the extent provided by law, for any
action taken, suffered or omitted by them in good faith or for any
such action in reliance upon any such actuary, accountant, legal
counsel or other expert or advisor, or upon any information, data,
documentation, report or opinion furnished by the same or by any
Company.
15.6. Investment Manager. The Plan Asset Committee may
appoint one or more Investment Managers (as defined in Section
3(38) of ERISA) to manage all or any part of the assets of the
Plan. Such appointment shall be reflected in the minutes of the
Plan Asset Committee. The Investment Manager(s) shall discharge
its duties in accordance with applicable law and in particular in
accordance with Section 404(a)(1) of ERISA. The Investment
Manager(s), when appointed, shall have such responsibility to
manage the assets of the Plan as the Plan Asset Committee shall
designate, and the Plan Asset Committee shall thereafter have no
responsibility for the management of such assets to the extent that
responsibilities are designated to be the responsibilities of the
Investment Manager(s).
15.7. Committee Procedure. A majority of the members of
the Plan Asset Committee at any time shall constitute a quorum, and
any action by a majority of the members present at any meeting, or
authorized by a majority of the members in writing without a
meeting, shall constitute the action of the Plan Asset Committee.
A member of the Plan Asset Committee who is also a Participant
hereunder shall not vote on any question involving his own interest
under the Plan, as distinguished from interests of others similarly
situated. The Plan Asset Committee may authorize each or any one
or more of its members to execute any document or documents on
behalf of the Plan Asset Committee, in which event it shall notify
the Trustee in writing of such action and the name or names of its
members so designated, and the Trustee may thereafter accept and
rely upon any document executed by such member or members as
representing action by the Plan Asset Committee until the Plan
Asset Committee shall file with the Trustee a written revocation of
such designation.
15.8. Compensation and Expenses of Committee. Members of
the Plan Asset Committee shall serve as such without compensation
from the Plan, but may receive compensation from an Affiliated
Company for so serving. The compensation, or fees, as the case may
be, of all officers, agents, counsel, the Trustee, the Investment
Manager(s), or other persons retained or employed by the Plan Asset
Committee shall be fixed by the Plan Asset Committee. Expenses
other than the compensation of members of the Plan Asset Committee
shall be paid in accordance with Section 14.8.
15.9. Records. The Plan Asset Committee shall keep a
record of all its proceedings and shall keep, or cause to be kept,
all such books, accounts, records or other data as may be necessary
or advisable in its judgment to carry out its responsibilities
hereunder and properly to reflect its affairs, provided that
nothing in this Section 15.9. shall require the Plan Asset
Committee or any member thereof to perform any act which, pursuant
to law or the provisions of this Plan, is the responsibility of the
Plan Administrator, nor shall this Section 15.9. relieve the Plan
Administrator of such responsibility.
ARTICLE 16.
CLAIMS
16.1. Claims for Benefits. Any claim for benefits by a
Participant or anyone claiming through a Participant under the Plan
shall be delivered in writing by the claimant to the Plan
Administrator. The claim shall identify the benefits being
requested and shall include a statement of the reasons why the
benefits should be granted. The Plan Administrator shall grant or
deny the claim. If the claim is denied in whole or in part, the
Plan Administrator shall give written notice to the claimant
setting forth: (a) the reasons for the denial, (b) specific
reference to pertinent Plan provisions on which the denial is
based, (c) a description of any additional material or information
necessary to request a review of the claim and an explanation of
why such material or information is necessary, and (d) an
explanation of the Plan's claim review procedure. The notice shall
be furnished to the claimant within a period of time not exceeding
90 days after receipt of the claim, except that such period of time
may be extended, if special circumstances should require, for an
additional 90 days commencing at the end of the initial 90-day
period. Written notice of any such extension shall be given to the
claimant before the expiration of the initial 90-day period and
shall indicate the special circumstances requiring the extension
and the date by which the final decision is expected to be
rendered.
16.2. Appeals Procedure. A claimant who has been denied
a claim for benefits, in whole or in part, may, within a period of
60 days following his receipt of the denial, request a review of
such denial by filing a written notice of appeal with the Plan
Administrator. In connection with an appeal, the claimant (or his
authorized representative) may review pertinent documents and may
submit evidence and arguments in writing to the Plan Administrator.
The Plan Administrator shall decide the questions presented by the
appeal, either with or without holding a hearing, and shall issue
to the claimant a written notice setting forth: (a) the specific
reasons for the decision and (b) specific reference to the
pertinent Plan provisions on which the decision is based. The
notice shall be issued within a period of time not exceeding 60
days after receipt of the request for review; except that such
period of time may be extended, if special circumstances
(including, but not limited to, the need to hold a hearing) should
require, for an additional 60 days commencing at the end of the
initial 60-day period. Written notice of any such extension shall
be provided to the claimant prior to the expiration of the initial
60-day period. The decision of the Plan Administrator shall be
final, binding, and conclusive.
ARTICLE 17.
AMENDMENT AND TERMINATION
17.1. Amendment. The Board of Directors shall have the
right at any time, and from time to time, to modify or amend in
whole or in part, any or all of the provisions of the Plan, but,
except as otherwise provided in this Article 17. or Section 18.3.,
or as otherwise permitted by Section 411 (d)(6) of the Code, no
such amendment or modification shall have the effect of revesting
in the Companies any part of the Trust Fund or reducing the accrued
benefits of Participants or of diverting any part of the Trust Fund
to any purpose other than for the exclusive benefit of Participants
and their Beneficiaries and the payment of reasonable Plan
administration expenses.
17.2. Termination or Partial Termination. The Board of
Directors shall have the right to terminate or partially terminate
the Plan at any time. Upon the termination or partial termination
of the Plan, or upon the complete discontinuance of contributions
under the Plan, the accounts of Participants affected by the
termination, partial termination, or complete discontinuance of
contributions, as the case may be, shall be nonforfeitable.
Any Company may, by action of its board of directors, withdraw
at any time from participation in the Plan, at which point the
Participants who are its Eligible Employees shall become Inactive
Participants.
17.3. Merger or Consolidation of Plan Assets; Mergers into
the Plan; Transfers of Plan Assets. Subject to satisfying the
requirements of this Section and Section 411(d)(6) of the Code:
17.3.1. Upon the approval of the Board of Directors and
the new or successor employer of the affected Participants,
the Plan may be merged into or consolidated with another
defined contribution plan, and all or a portion of its assets
or liabilities may be transferred to another plan; provided
that such other plan and its related trust (1) are qualified
within the meaning of Sections 401(a) and 501(a) of the Code
("tax-qualified "), and (2) assume the Plan liabilities of all
affected Participants.
17.3.2. Upon the approval of the Board of Directors and
the employer of the affected Participants, any other tax-qualified
defined contribution plan sponsored by an Affiliated
Company may be merged into this Plan, with this Plan as the
surviving instrument. Thereupon:
17.3.2.1. the Affiliated Company shall become a co-sponsor
of the Plan, included in the definition of
Company hereunder. In any such case, the Plan shall
remain a single plan with any and all of its assets
(regardless of the entity to whose contributions such
assets can be traced) available to pay the benefits of
each Participant and Beneficiary hereunder and any other
liabilities of the Plan.
17.3.2.2. The assets of the merged plan shall be
transferred to the Trustee and be assets of the Plan, and
the liabilities of the merged plan shall be liabilities
of the Plan.
17.3.2.3. Each participant in the merged plan shall
become a Participant in the Plan on the merger date, with
accrued or vested benefits under the Plan equal to his
accrued or vested benefits under the merged plan, and
thereafter shall continue to participate in the Plan in
accordance with its terms.
17.3.2.4. If so directed by the Board of Directors,
there shall be a separate accounting of the benefits of
a Participant transferred from the merged plan and any
other benefits of the Participant under the Plan, such
that contributions, gains, losses, withdrawals,
forfeitures, and other credits or charges are allocated
between the transferred benefits and any other benefits
on a reasonable and consistent basis.
17.3.3. Upon the approval of the Plan Asset Committee,
the assets and liabilities of the Prior Plan with respect to
Continued Employees as of June 30, 1990 may be transferred to
this Plan. Upon the approval of the Board of Directors and
the employer of the affected Participants, the assets and
liabilities of any other tax-qualified defined contribution
plan may be transferred to this Plan.
To the extent that Section 401(a)(12) or 414(l) of the Code is
applicable and in accordance therewith, no merger, consolidation,
or transfer pursuant to this Section 17.3. shall be consummated
unless each Participant and Beneficiary under the Plan (or, in the
case of subsection 17.3.1., each participant in the merged,
transferee, or successor plan) would, if the resulting plan (or, in
the case of subsections 17.3.2. or 17.3.3., the Plan) then
terminated, receive a benefit immediately after the merger,
consolidation, or transfer that is equal to or greater than the
benefit he would have been entitled to receive immediately before
the merger, consolidation, or transfer, if the Plan (or, in the
case of subsections 1 7.3.2. and 1 7.3.3., the transferor or
predecessor plan) had then terminated; provided that the foregoing
provisions of this Section shall not apply if such alternative
requirements that may be imposed by the regulations under Section
414(l) of the Code are satisfied.
ARTICLE 18.
MISCELLANEOUS PROVISIONS
18.1. No Contract of Employment. The adoption and
maintenance of this Plan shall not be deemed to constitute a
contract of employment or otherwise between any Affiliated Company
and any Employee, former Employee or Participant, or to be a
consideration for, or an inducement or condition of, any
employment. Nothing contained herein shall be deemed to give to
any Employee, former Employee or Participant the right to be
retained in the service of any Affiliated Company or to interfere
with the right of any Affiliated Company employing such person to
discharge, with or without cause, any Employee, former Employee or
Participant at any time.
18.2. No Liability for Benefits. Any benefits payable
under this Plan shall be paid or provided for solely from the Trust
Fund, and the Affiliated Companies assume no liability or
responsibility therefor. The obligations of the Companies
hereunder are limited solely to the making of contributions to the
Trust Fund as provided for in this Plan.
18.3. Exclusive Benefit of Trust Fund. Except as
otherwise provided in Article 5., and subject to the rules below,
the assets of the Trust Fund shall be held for the exclusive
purposes of providing benefits to Participants and their
Beneficiaries and defraying reasonable expenses of administering
the Plan and shall not inure to the benefit of any Company or
Affiliated Company.
18.3.1. Mistake of Fact. In the case of a contribution
which is made by a Company by a mistake of fact, such
contribution shall be returned to the contributing Company as
promptly as practicable after the discovery of such mistake,
but in no event later than one year after the date such
contribution was made. Earnings attributable to a mistaken
contribution shall not be returned to the Company, but losses
attributable thereto shall reduce the amount of such
contributions to be returned.
18.3.2. Failure of Qualification of Plan and Trust. All
contributions of the Companies to the Plan, including Before-Tax
Contributions, are conditioned upon the qualification of
the Plan under Section 401 of the Code. If the Plan receives
an adverse determination as to its qualification in respect of
a Company the Trustee shall, after paying any applicable
expenses, return to such Company any remaining contributions
made by such Company. Such remaining contributions shall be
returned as promptly as practicable, but in no event later
than one year after the date of the final denial of
qualification of the Plan as to such Company, including the
final resolution of any appeals before the Internal Revenue
Service or the courts. This subsection 18.3.2. shall apply
only to applications for determination as to initial
qualification which are made within the time prescribed by law
for filing the Company's return for the tax year in which the
Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
18.3.3. Disallowance of Deduction. All contributions by
the Companies to the Plan, including Before-Tax Contributions,
are conditioned upon the deductibility thereof under Section
404 of the Code. If and to the extent the deduction for any
contribution of a Company is disallowed by the Internal
Revenue Service, the Trustee shall, after deducting
attributable losses but not including any attributable
earnings, return the disallowed portion of the contribution as
soon as practicable, but in no event later than one year after
the date of the final disallowance of the contribution,
including the final resolution of any appeals before the
Internal Revenue Service or the courts.
18.4. Nonalienation.
18.4.1. General. None of the benefits, payments,
proceeds, claims or rights of any Participant or Beneficiary
hereunder shall be subject to any claims of any creditor of
such person, nor shall any such Participant or Beneficiary
have any right to alienate, anticipate, commute, pledge,
encumber or assign any claim or right hereunder or any of the
benefits or payments of proceeds which he may expect to
receive, contingent or otherwise, under the provisions hereof.
In the event any person attempts to take any action contrary
to this Section 18.4., such action shall be null and void and
of no effect, and the Companies, the Plan Administrator, the
Plan Asset Committee, the Trustee, the Investment Manager(s)
and all persons having any interest in the Trust Fund and
their Beneficiaries shall disregard such action and are not in
any manner bound thereby, and they, and each of them, shall
suffer no liability for any such disregard thereof, and shall
be reimbursed on demand out of the Trust Fund or by the
responsible Participant or Beneficiary for the amount of any
loss, cost or expense incurred as a result of disregarding or
of acting in disregard of such action. The preceding
provisions of this Section 18.4. shall not apply to situations
where a Participant is indebted to the Trust Fund. In cases
where a Participant is indebted to the Trust Fund, the Trustee
is permitted to levy against the accounts of the Participant
to the extent necessary to collect indebtedness owing from the
Participant to the Trust Fund and any unpaid interest, late
charges, or other amounts.
18.4.2. Exception for Qualified Domestic Relations
Orders.
18.4.2.1. The nonalienation rule of Section 18.4.1.
shall apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order,
except that Section 18.4.l. shall not apply if the Plan
Administrator or his delegate determines that such order
is a Qualified Domestic Relations Order.
18.4.2.2. Upon receipt of a domestic relations
order, the Plan Administrator or his delegate shall
promptly notify the Participant and any other alternative
payee of the receipt of such order and the Plan's
procedures for determining the qualified status of
domestic relations orders.
18.4.2.3. Within a reasonable period after the
receipt of a domestic relations order, the Plan
Administrator or his delegate shall determine the
qualified status of such order, and thereafter notify the
Participant and each alternate payee of such
determination. During any period in which the issue of
whether a domestic relations order is a Qualified
Domestic Relations Order is being determined by the Plan
Administrator or his delegate, or if the Plan
Administrator or his delegate has notice that the parties
are attempting to rectify any deficiencies in the order,
the Plan Administrator or his delegate shall segregate in
a separate account in the Plan or in an escrow account
the amounts which would have been payable to the
alternate payee during such period if the order had been
determined to be a Qualified Domestic Relations Order.
18.4.2.4. If within 18 months after the date on
which the first payment would be required to bE made
under an order, the order is determined to be a Qualified
Domestic Relations Order, the Plan Administrator or his
delegate shall pay the segregated amounts (plus interest
thereon, if any) to the person or persons entitled
thereto. If within such 18 month period (A) it is
determined that the order is not a Qualified Domestic
Relations Order or (B) the issue as to whether such order
is a Qualified Domestic Relations Order is not resolved,
the Plan Administrator or his delegate (unless under a
restraining order prohibiting the disposition of benefits
pending resolutions of a suit) shall pay the segregated
amounts (plus interest thereon, if any) to the person or
persons who would have been entitled to such amounts if
there had been no order. Any determination that an order
is a Qualified Domestic Relations Order which is made
after the close of the 18 month period shall be applied
prospectively only from the date of such determination.
18.4.2.5. For purposes of Section 414(p)(4)(A)(ii)
of the Internal Revenue Code, the interest rate for
determining the present value of any accrued benefit
shall be the interest rate then in effect for determining
the amount of contributions under the Plan.
18.5. Common Trust Fund. The fact that for administrative
purposes the Plan Administrator or Trustee maintains separate
accounts for each Participant shall not be deemed to segregate for
such Participant, or to give such Participant any direct interest
in, any specific assets in the Trust Fund held by the Trustee.
Except as provided herein, all such assets may be held and
administered by the Trustee as a commingled fund, subject to the
provisions of the Plan for the investment thereof in one or more
Investment Funds.
18.6. Responsibility of Fiduciaries. The Plan
Administrator and the members of the Plan Asset Committee, together
with their assistants and representatives who are Employees, shall
be free from all liability for their acts and conduct in the
administration of the Plan and trust under the Trust Agreement,
except for acts of willful misconduct or gross negligence; provided
that the foregoing shall not relieve any of them from any
responsibility or liability for any responsibility, obligation or
duty that they may have under ERISA.
18.7. Indemnity by Companies. In the event and to the
extent not insured against by any insurance company under the
provisions of any applicable insurance policy, the Companies shall
indemnify, hold harmless and, if requested, defend the members of
the boards of directors and the officers of the Companies and other
persons who are Employees, from and against any and all claims,
demands, suits or proceedings in connection with the Plan or Trust
under the Trust Agreement that may be brought by Employees,
Participants or Beneficiaries or their legal representatives, or by
any other person, corporation, entity, government or agency thereof
and from and against any and all costs or other expenses, including
but not limited to attorneys' fees incurred by such individuals in
connection with such claims, demands, suits or proceedings;
provided that such indemnification shall not apply to any such
person for such person's acts of willful misconduct or gross
negligence, as determined by a no longer appealable final judgment
of a court of competent jurisdiction.
18.8. Address for Notification: Inability to Locate
Participants or Beneficiaries.
18.8.1. Each Participant shall keep the Plan
Administrator advised of his current address and the current
address of each of his potential Beneficiaries. Any payment,
distribution or communication hereunder addressed to a
Participant or Beneficiary, at the last address filed with the
Plan Administrator or, if no such address has been filed, then
the last address indicated on the records of the Company in
respect of the Participant, shall be deemed to have been
delivered to the Participant or Beneficiary three (3) days
after such distribution or communication is deposited in the
United States mail, postage prepaid.
18.8.2. If the Plan Administrator cannot, by making a
reasonably diligent attempt by mail, locate either the
Participant, his Beneficiary or contingent Beneficiary, as the
case may be, within three (3) years following the date as of
which the person's benefits become payable under the Plan, the
total amount shall be forfeited and shall be used to reduce
Company contributions under the Plan; provided, that if such
person to whom a benefit is payable makes a claim in writing
for such benefit after the expiration of the three (3) year
period, the benefit shall be reinstated. In the event of such
reinstatement, payment shall commence to such person in the
same form and amount as initially applicable, commencing as
soon as practicable after the Valuation Date coincident with
or next following the date on which the Plan Administrator
receives his written claim.
18.9. Payment in Case of Incapacity. In the event that
the Plan Administrator shall find that any Participant or
Beneficiary to whom a benefit is payable under this Plan is unable
to manage his own affairs because of illness, accident, or other
mental or physical incompetence, or is unable to give a valid
receipt, the Plan Administrator may cause the payment becoming due
to such Participant or Beneficiary to be paid to another person
selected by the Plan Administrator in his sole discretion for the
benefit of the Participant or Beneficiary without responsibility on
the part of the Plan Administrator, the Plan Asset Committee, any
Affiliated Company or the Trustee to follow the application of such
payment; provided that if claim shall have been made therefor by an
existing and duly appointed guardian, conservator, committee or
other duly appointed legal representative, payment shall be made to
such representative. Any such payment shall be a payment for the
account of the Participant or Beneficiary and shall operate as a
complete discharge of all liability therefor under this Plan.
18.10. Headings. Article, Section and subsection headings
are for convenient reference only and shall not be deemed to be a
part of the substance of this instrument or in any way to enlarge
or limit the contents of any Article.
18.11. Applicable Law. Except as may otherwise
specifically be required by the Trust Agreement, all legal
questions pertaining to the Plan shall be determined in accordance
with ERISA and, to the extent not preempted by federal law, the
laws of the State of New York. All contributions made hereunder
shall be deemed to have been made in New York.
18.12. Agent for Service. The General Counsel of Saks &
Company shall be the agent for service of any legal process upon
this Plan.
EXECUTED on January 31, 1995, in New York, New York.
SAKS & COMPANY
By: _________________________________
Title: ______________________________
EXHIBIT 5.2
District Director Department of the Treasury
G.P.O. Box 1680
Brooklyn, NY 11202
Employer Identification Number:
Date: Sept. 22, 1995 13-1256625
File Folder Number:
133002993
SAKS & COMPANY Person to Contact:
611 FIFTH AVENUE SANDRA JORDAN
NEW YORK, NY 10022 Contact Telephone Number:
(617) 565-7808
Plan Name:
SAKS FIFTH AVENUE
RETIREMENT SAVINGS PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan,
identified above, based on the information supplied. Please keep
this letter in your permanent records.
Continued qualification of the plan under its present form
will depend on its effect in operation. (See section 1.401-1(b)(3)
of the Income Tax Regulations). We will review the status of the
plan in operation periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that may
affect the qualified status of your employee retirement plan, and
provides information on the reporting requirements for your plan.
It also describes some events that automatically nullify it. It is
very important that you read the publication.
This letter relates only to the status of your plan under the
Internal Revenue Code. It is not a determination regarding the
effect of other federal or local statutes.
This determination letter is applicable for the amendment(s)
adopted on January 31, 1995.
This plan has been mandatorily disaggregated, permissively
aggregated, or restructured to satisfy the nondiscrimination
requirements.
This plan satisfies the nondiscrimination in amount
requirement of section 1.401(a)(4)-1(b)(2) of the regulations on
the basis of a design-based safe harbor described in the
regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as
otherwise specified in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with
respect to those benefits, rights, and features that are currently
available to all employees in the plan's coverage group. For this
purpose, the plan's coverage group consists of those employees
treated as currently benefiting for purposes of demonstrating that
the plan satisfies the minimum coverage requirements of section
410(b) of the Code.
This letter may not be relied upon with respect to whether the
plan satisfies the qualification requirements as amended by the
Uruguay Round Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to your representative as
indicated in the power of attorney.
If you have questions concerning this matter, please contact
the person whose name and telephone number are shown above.
Sincerely yours,
/s/ Herbert J. Huff
Herbert J. Huff
District Director
Enclosures:
Publication 794
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Saks Incorporated (formerly Proffitt's, Inc.) on Form
S-8 of our report dated June 12, 1998, on our audit of the
financial statements of the Saks Fifth Avenue Retirement Savings
Plan (the "Plan") as of December 31, 1997 and for the year then
ended, which report is included in the Plan's Annual Report on Form
11-K/A.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
November 2, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-8 of
our report, dated March 19, 1998, except for Note 12 as to which
the date is March 26, 1998, on our audits of the supplemental
consolidated financial statements of Proffitt's, Inc. and
Subsidiaries as of January 31, 1998 and February 1, 1997, and for
each of the three years in the period ended January 31, 1998 which
report is included in the Company's Annual Report on Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
November 2, 1998
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 19, 1998, except
for Notes 1, 3, 4, 9, 11, and 13 as to which the date is September
17, 1998, on our audits of the supplemental consolidated financial
statements of Saks Incorporated and Subsidiaries (formerly
Proffitt's, Inc.) as of January 31, 1998 and February 1, 1997, and
for each of the three years in the period ended January 31, 1998
which report is included in the Company's Current Report on Form 8-K
dated September 23, 1998.
Our report includes an explanatory paragraph which states that the
supplemental consolidated financial statements give retroactive
effect to the merger of Proffitt's, Inc. with Saks Holdings, Inc.
The combination occurred on September 17, 1998, and has been
accounted for as a pooling-of-interests as described in Notes 1 and
3 to the supplemental consolidated financial statements. Generally
accepted accounting principles proscribe giving effect to a
consummated business combination accounted for by the pooling-of-
interests method in financial statements that do not include the
date of consummation; however, they will become the historical
consolidated financial statements of Saks Incorporated and
Subsidiaries after financial statements covering the date of
consummation of the business combination are issued.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
November 2, 1998
