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As filed with the Securities and Exchange Commission on December 23, 1998
Registration No. 333-_________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ESSEF CORPORATION
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(Exact name of Registrant as specified in its charter)
Ohio 34-0777631
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 Park Drive, Chardon, Ohio 44024
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(Address of Principal Executive Offices) (Zip Code)
ESSEF Corporation Employees' Retirement Plan
--------------------------------------------
(Full title of the plans)
Stuart D. Neidus
Executive Vice President and Chief Financial Officer
ESSEF Corporation
220 Park Drive, Chardon, Ohio 44024
- --------------------------------------------------------------------------------
(Name and address of agent for service)
(440) 286-2200
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(Telephone number, including area code, of agent for service)
With copy to:
Mary Ann Jorgenson, Esq.
Squire, Sanders & Dempsey L.L.P.
4900 Key Tower, 127 Public Square
Cleveland, Ohio 44114-1304
Approximate Date of Commencement of Proposed Sale: As soon as practicable after
the Registration Statement becomes effective.
Page 1 of 9
Exhibit Index on Page 9
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================ ================ ====================== ====================== ====================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price per Aggregate Offering Amount of
to be Registered (1) Registered Share (2) Price (2) Registration Fee
================================ ================ ====================== ====================== ====================
<S> <C> <C> <C> <C>
Common Stock, no par value 1,000,000 $ 18.4375 $ 18,437,500 $ 5,125.63
================================ ================ ====================== ====================== ====================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Securities Act Rule 457(c), the proposed
maximum offering price per unit is calculated as the average of the high
and low prices for the Common Stock as quoted on the Nasdaq National Market
System as of December 22, 1998.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
------------------------------------------------
The Annual Report on Form 10-K for the fiscal year ended September
30, 1998, filed by ESSEF Corporation (the "Registrant") with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), is incorporated herein by reference
and made a part hereof.
No other reports were filed pursuant to the Exchange Act by the
Registrant since the end of the fiscal year covered by the Registrant's Annual
Report referred to above.
All documents subsequently filed by the Registrant or the ESSEF
Corporation Employees' Retirement Plan (the "ESSEF Retirement Plan") pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing such
documents.
Item 4. DESCRIPTION OF SECURITIES.
--------------------------
The holders of the common shares, without par value of the
Registrant (the "Common Shares"), are entitled to one vote for each share held
of record on all matters submitted to a vote of the shareholders. They have no
cumulative voting rights with respect to the election of directors. Holders of
Common Shares are entitled to dividends if, when and as declared by the Board of
Directors of the Registrant (the "Board of Directors") from funds legally
available therefor, after payment of dividends required to be paid on
outstanding Serial Preferred Shares, without par value of the Registrant
("Serial Preferred Shares"), if any. In the event of liquidation of the
Registrant, holders of Common Shares are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior distribution rights of
any Serial Preferred Shares then outstanding. No holders of any class of capital
shares have preemptive rights. Common Shares are neither redeemable nor
convertible into other securities. The outstanding Common Shares are duly
authorized, validly issued, fully paid and nonassessable.
The Board of Directors is authorized, without further action by the
shareholders, to issue Serial Preferred Shares in one or more series, to fix the
number of shares in such series, and to determine the designations, relative
rights (other than voting rights), preferences and limitations of such shares.
Such shares, if issued, will entitle the holder to one vote per share and may be
issued with conversion rights, which could adversely affect the voting power of
the holders of Common Shares. Furthermore, the issuance of such shares may have
the effect of making an acquisition of the Registrant more difficult or of
deterring potential tender offers.
The Registrant's Code of Regulations provides for a Board of Directors
set at seven members divided into two classes. Class A has three members and
Class B has four members. The directors of the class elected at each annual
meeting of shareholders hold office for a term of
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three years. With the resignation of one director in December 1997, the Board of
Directors has one vacancy which may be filled when a suitable candidate is
identified. Advance notice to the Registrant of shareholder resolutions and
nominations is required. The holders of 50% or more of the outstanding shares
may call a special meeting.
Under the control share acquisition provisions of the Registrant's
Articles of Incorporation, a party contemplating a "control share acquisition,"
i.e., an acquisition of (i) 20% or more but less than 33 1/3% of the
Registrant's voting power, (ii) 33 1/3% or more but less than 50% of such voting
power, or (iii) 50% or more of such voting power, must first obtain the approval
of both a majority of the voting power of the Registrant represented at the
meeting held to vote on the acquisition and a majority of that portion of such
voting power remaining after excluding shares held by any party proposing the
acquisition and by officers and director-employees of the Registrant. The
directors have the right not to submit to the shareholders proposals that could
not be consummated for legal or financial reasons. A vote of the holders of
two-thirds of the outstanding Common Shares is required to amend this provision
of the Registrant's Articles of Incorporation.
These provisions regarding classification of the Board of Directors,
advance notice of resolutions and nominations, percentage of voting power
required to call special meetings and control share acquisitions, as well as the
ability of the Board of Directors to issue Serial Preferred Shares as described
above, could have the effect of discouraging, delaying or preventing (i) tender
offers and other attempts to take control of the Registrant and (ii) changes in
management. This may be the case even though certain shareholders may deem such
actions to be in their best interests.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
------------------------------------------
Section 1701.13(E) of the Ohio General Corporation Law sets forth
the conditions and limitations governing the indemnification of officers,
directors and other person. Section 1701.13(E) provides generally that a person
sued as a director, officer, employee or agent of a corporation may be
indemnified by the corporation for reasonable expenses, including attorney's
fees if (i) in the case of other than derivative suits, he has acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful, and
(ii) in the case of a derivative suit, he has acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation. Section 1701.13(E) provides that no indemnification shall be
made in the case of a derivative suit in respect of any claim as to which a
director, officer, employee or agent has been adjudged to be liable to the
corporation, except with court approval, nor shall indemnification be made in
respect of any claim in which the only liability asserted against a director is
liability for dividends, distributions or payments to shareholders made contrary
to a law or the articles of incorporation or liability for loans to officers,
directors or shareholders. Indemnification is mandatory in the case of a
director, officer, employee or agent who is successful on the merits or
otherwise in defense of a suit against him. The determination whether to
indemnify a director, officer, employee or agent is made by a majority of
disinterested directors, by independent legal counsel, by the shareholders, or
by an Ohio Court of Common Pleas or the court in which the suit is pending.
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Article VI of the Registrant's Code of Regulations requires the
Registrant to indemnify its directors and officers to the full extent permitted
by Ohio law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, offices or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable.
Item 8. EXHIBITS.
---------
The following is a complete list of exhibits filed as a part of or
incorporated by reference in this Registration Statement.
Exhibit No: Description of Exhibit
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4.1 Third Amended Articles of Incorporation, effective
January 29, 1998. (Reference is made to Exhibit 3.1
to the report on Form 10-K for the year ended
September 30, 1998, which exhibit is herein
incorporated by reference.)
4.2 Amended Code of Regulations, dated January 30, 1992.
(Reference is made to Exhibit 3.2 to the report on
Form 10-K for the year ended September 30, 1998,
which exhibit is herein incorporated by reference.)
4.3 Credit Agreement, dated April 28, 1997, among the
Registrant, as Borrower, the Lending Institutions
named therein, as Lenders, National City Bank, as
Administrative Agent, and ABN Amro Bank N.V., as
Syndication Agent. (Reference is made to Exhibit 10
to the report on Form 10-Q for the quarter ended
March 31, 1997, which exhibit is herein incorporated
by reference.)
4.4 Amendment No. 1 to Credit Agreement, dated July 1,
1997, among the Registrant, the Lending Institutions
named therein, National City Bank, and ABN Amro Bank
N.V. (Reference is made to Exhibit 10.12 to the
report on Form 10-K for the year ended September 30,
1997, which exhibit is herein incorporated by
reference.)
4.5 Amendment No. 2 to Credit Agreement, dated May 1,
1998, among the Registrant, the Lending Institutions
named therein, National City Bank, and ABN Amro Bank
N.V. (Reference is made to Exhibit 10.2 to the report
on Form 10-Q for the quarter ended June 30, 1998,
which exhibit is herein incorporated by reference.)
23.1 Consent of Deloitte & Touche LLP
24 Powers of Attorney
4
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99 Registrant Employees' Retirement Plan (January 1,
1999 Restatement)
Item 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(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 (i) and (ii) do not apply if the Registration
Statement is on Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such
5
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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 of 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.
6
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chardon, and the State of Ohio, on December 23, 1998.
ESSEF CORPORATION
By: /s/ Stuart D. Neidus
-------------------------------
Stuart D. Neidus
Executive Vice President and
Chief Financial Officer
The undersigned directors and officers of the Registrant do hereby
constitute and appoint Stuart D. Neidus, Mary Ann Jorgenson, and Thomas B.
Waldin, and each of them, with full power of substitution and resubstitution, as
attorneys-in-fact or attorney-in-fact of the undersigned, for him/her and in
his/her name, place and stead, to execute and file with the Commission under the
Securities Act of 1933 a Registration Statement on Form S-8 relating to the
registration of 1,000,000 Common Shares issuable or saleable under the ESSEF
Retirement Plan, along with an indeterminate amount of interests to be offered
or sold pursuant to it (the "Securities"), with any and all amendments,
supplements and exhibits thereto, to execute and file any and all other
applications or other documents to be filed with the Commission and all
documents required to be filed with any state securities regulating board or
commission pertaining to such Securities registered pursuant to the Registration
Statement on Form S-8, with any and all amendments, supplements and exhibits
thereto, each such attorney to have full power to act with or without the
others, and to have full power and authority to do and perform, in the name and
on behalf of the undersigned, every act whatsoever necessary, advisable or
appropriate to be done in the premises as fully and to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and approving
the act of said attorneys and any of them and any such substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Thomas B. Waldin
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Thomas B. Waldin Director, President and Chief Executive December 23, 1998
Officer (signing as Principal Executive
Officer and a Director)
/s/ Stuart D. Neidus
- ---------------------------------
Stuart D. Neidus Executive Vice President and Chief December 23, 1998
Financial Officer (signing as Principal
Financial Officer)
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ James M. Biggar Director December 23, 1998
- ---------------------------------
James M. Biggar
/s/ Gordon D. Harnett Director December 23, 1998
- ---------------------------------
Gordon D. Harnett
/s/ George M. Humphrey, II Director December 23, 1998
- ---------------------------------
George M. Humphrey, II
/s/ Mary Ann Jorgenson Director December 23, 1998
- ---------------------------------
Mary Ann Jorgenson
/s/ Ralph T. King Director December 23, 1998
- ---------------------------------
Ralph T. King
</TABLE>
The Plan. Pursuant to the requirements of the Securities Act
of 1933, the trustee of or other persons who administer the ESSEF Retirement
Plan have duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Chardon, and the
State of Ohio on the 23rd day of December, 1998.
ESSEF CORPORATION
EMPLOYEES' RETIREMENT PLAN
By: /s/ Stuart D. Neidus
-----------------------------
Stuart D. Neidus
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT METHOD OF FILING
NUMBER DESCRIPTION
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<S> <C> <C>
4.1 Third Amended Articles of Incorporation, effective January 29, 1998. (Reference is
made to Exhibit 3.1 to the report on Form 10-K for the year ended on September 30, *
1998, which exhibit is herein incorporated by reference.)
4.2 Amended Code of Regulations, dated January 30, 1992. (Reference is made to Exhibit *
3.2 to the report on Form 10-K for the year ended September 30, 1998, which exhibit
is herein incorporated by reference.)
4.3 Credit Agreement, dated April 28, 1997, as amended by Amendment Nos. 1 and 2, among *
the Registrant, as Borrower, the Lending Institutions named therein, as Lenders,
National City Bank, as Administrative Agent, and ABN Amro Bank N.V., as Syndication
Agent. (Reference is made to Exhibit 10 to the report on Form 10-Q for the quarter
ended March 31, 1997, which exhibit is herein incorporated by reference.)
4.4 Amendment No. 1 to Credit Agreement, dated July 1, 1997, among the Registrant, the *
Lending Institutions named therein, National City Bank, and ABN Amro Bank N.V.
(Reference is made to Exhibit 10.12 to the report on Form 10-K for the year ended
September 30, 1997, which exhibit is herein incorporated by reference.)
4.5 Amendment No. 2 to Credit Agreement, dated May 1, 1998, among the Registrant, the *
Lending Institutions named therein, National City Bank, and ABN Amro Bank N.V.
(Reference is made to Exhibit 10.2 to the report on Form 10-Q for the quarter ended
June 30, 1998, which exhibit is herein incorporated by reference.)
23.1 Consent of Deloitte & Touche, LLP * *
24 Powers of Attorney See Signature Page
99 Registrant Employees' Retirement Plan (January 1, 1999 Restatement) * *
</TABLE>
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* Incorporated by reference
** Filed herewith
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Essef Corporation on Form S-8 of our report dated November 13, 1998,
incorporated by reference in the Annual Report on Form 10-K of Essef
Corporation for the year ended September 30, 1998.
/s/ Deloitte & Touche LLP
- ------------------------------
Cleveland, Ohio
December 18, 1998
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Exhibit 99
ESSEF CORPORATION
EMPLOYEES' RETIREMENT PLAN
(January 1, 1999 Restatement)
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TABLE OF CONTENTS
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<TABLE>
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ARTICLE I DEFINITIONS.............................................................................................2
ARTICLE II HOURS OF SERVICE.......................................................................................8
1. General Rule....................................................................................8
2. Limitations Applicable to Paragraph (b) of Section 1...........................................10
3. Determination of Hours of Service Under Paragraph (b) of Section 1.............................10
4. Crediting of Hours of Service to Computation Periods...........................................11
5. "Computation Period"...........................................................................12
ARTICLE III EMPLOYEE PARTICIPATION...............................................................................12
1. Participation..................................................................................12
2. Eligibility Dates..............................................................................13
3. Automatic Deferred Compensation Contributions..................................................13
4. Election Relating to Deferred Compensation Contributions.......................................14
5. Years of Service...............................................................................15
6. Reemployment After Break in Service............................................................16
7. Certification of New Participants..............................................................16
8. Changes in Employment Status; Transfers of Employment..........................................16
ARTICLE IV BENEFICIARIES.........................................................................................17
1. Designation of Beneficiary.....................................................................17
2. Beneficiary in Absence of Designation..........................................................18
ARTICLE V CONTRIBUTIONS MADE ON BEHALF OF PARTICIPANTS...........................................................19
1. Deferred Compensation Contributions............................................................19
2. Administration and Limitation..................................................................22
3. Changes in Reduction Authorizations............................................................22
4. Suspension of Contributions....................................................................23
5. Special Rule for Suspensions of Automatic Deferred Compensation Contributions..................23
6. Distribution of Excess Deferrals...............................................................23
7. Treatment of Employer Matching Contributions Relating to Excess Deferral or Contribution.......25
8. Nonforfeitability..............................................................................25
ARTICLE VI OTHER EMPLOYER CONTRIBUTIONS..........................................................................25
1. Amount of Contributions........................................................................25
2. Payment of Contributions.......................................................................26
3. Limitation on Amount...........................................................................26
4. Profit-Sharing Plan............................................................................27
5. Finality of Determination......................................................................27
6. Limitation on Matching Employer Contributions for Highly Compensated Employees.................27
7. Forfeiture or Distribution of Excess Matching Employer Contributions...........................29
8. Effect of Plan Termination.....................................................................30
</TABLE>
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<TABLE>
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ARTICLE VII ROLLOVER CONTRIBUTIONS...............................................................................30
1. Rollover Contributions.........................................................................30
2. Administration.................................................................................31
3. Rollover Contributions Not Considered for Certain Plan Purposes................................32
ARTICLE VIII DEPOSIT AND INVESTMENT OF CONTRIBUTIONS.............................................................32
1. Deposit of Contributions.......................................................................32
2. Investment Elections...........................................................................32
ARTICLE IX INVESTMENT FUNDS AND PARTICIPANTS' ACCOUNTS...........................................................33
1. Investment Funds...............................................................................33
2. Separate Accounts..............................................................................34
3. Account Balances...............................................................................35
ARTICLE X ALLOCATIONS TO ACCOUNTS AND VALUATIONS.................................................................35
1. Allocation of Retirement Contributions Among Participants......................................35
2. Allocation of Discretionary Employer Contributions and Forfeitures Among Participants..........36
3. Allocation of Matching Employer Contributions Among Participants...............................37
4. Limitation on Crediting of Contributions and Forfeitures.......................................38
5. Valuation of Participant's Interest............................................................42
6. Finality of Committee's Determination..........................................................43
7. Notification...................................................................................43
ARTICLE XI TERMINATION OF PARTICIPATION AND DISTRIBUTION.........................................................43
1. Termination of Participation...................................................................43
2. Vesting Schedule...............................................................................44
3. Distribution...................................................................................45
4. Years of Vested Service........................................................................46
5. Election of Former Schedule....................................................................46
6. Distribution...................................................................................47
7. Disposition of Non-vested Amounts..............................................................48
8. Effect of Committee's Determination............................................................49
9. Reemployment of Former Participant.............................................................49
10. Restrictions on Alienation.....................................................................50
11. Facility of Payment............................................................................50
12. Buy Back of Forfeited Amounts..................................................................51
13. Distribution Upon Certain Events...............................................................51
ARTICLE XII INSURANCE CONTRACTS..................................................................................52
1. Purchase of Contracts..........................................................................52
2. Payment of Premiums............................................................................52
3. Insurance Companies............................................................................53
4. Overriding Conditions and Limitations..........................................................53
5. Death Benefits.................................................................................54
6. Other Distributions; Vesting...................................................................54
7. Distribution, Sale and Surrender of Contracts..................................................55
</TABLE>
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<TABLE>
<S> <C>
ARTICLE XIII WITHDRAWALS.........................................................................................56
1. Withdrawal of Deferred Compensation Contributions..............................................56
2. Distribution of Deferred Compensation Contributions After Attainment of Age 59 1/2.............58
ARTICLE XIV THE COMMITTEE........................................................................................59
1. Membership.....................................................................................59
2. Rules and Regulations..........................................................................59
3. Authority of Committee and Employers...........................................................59
4. Action of Committee............................................................................60
5. Claims Review Procedure........................................................................60
6. Resignation, Removal, and Designation of Successors............................................61
7. Records........................................................................................62
8. Compensation...................................................................................62
9. Indemnification................................................................................62
10. Qualified Domestic Relations Orders............................................................63
ARTICLE XV INVESTMENT MANAGERS...................................................................................63
ARTICLE XVI AMENDMENT, TERMINATION, AND WITHDRAWAL...............................................................64
1. Amendment......................................................................................64
2. Limitation on Amendment........................................................................64
3. Termination....................................................................................64
4. Withdrawal of an Employer......................................................................65
5. Corporate Reorganization.......................................................................66
ARTICLE XVII EXTENSION OF PLAN...................................................................................66
1. Adoption by Related Corporations...............................................................66
2. Special Provisions Relating to Purex Pool Systems, Inc.........................................66
3. Special Provisions Relating to Advanced Structures, Inc........................................67
4. Special Provisions Relating to Compool, Inc....................................................67
5. Special Provisions Relating to Paragon Aquatics, National Pool Tile and
Certain Other Business Units...................................................................67
ARTICLE XVIII TOP-HEAVY PROVISIONS...............................................................................68
1. Applicability..................................................................................68
2. Top-Heavy Definitions..........................................................................69
3. Accelerated Vesting............................................................................71
4. Minimum Employer Contribution..................................................................71
5. Adjustments to Section 415 Limitations.........................................................72
6. Compensation Taken Into Account................................................................73
ARTICLE XIX MERGER OF ESSEF CORPORATION TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST.......................73
1. Merger of the Plans and Trusts.................................................................73
2. ESOP Fund......................................................................................73
3. Separate Accounts..............................................................................74
4. Administration and Valuation of ESOP Accounts..................................................74
</TABLE>
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<TABLE>
<S> <C> <C>
5. Adjustments to Tax Credit......................................................................74
6. Vested Interest of Participants................................................................75
7. ESOP Fund Dividends............................................................................75
8. Voting Shares..................................................................................75
9. Distribution...................................................................................76
10. Special Diversification Distributions..........................................................77
11. Overriding Provision...........................................................................79
12. Right of First Refusal.........................................................................80
13. "Put" Option...................................................................................81
14. Other Options..................................................................................82
15. Nonterminable Protection and Rights............................................................82
16. Expenses.......................................................................................82
17. General Provisions.............................................................................83
18. Definitions....................................................................................83
ARTICLE XX MINIMUM DISTRIBUTION REQUIREMENTS.....................................................................84
1. Overriding Provision...........................................................................84
2. Required Beginning Date........................................................................84
3. Limits on Distribution Periods.................................................................84
4. Distribution Beginning Before Death............................................................84
5. Distribution Beginning After Death.............................................................85
6. Death of Surviving Spouse......................................................................85
7. Amounts Payable to Child.......................................................................85
8. Commencement Date..............................................................................86
9. Definitions....................................................................................86
10. Transitional Rule..............................................................................88
ARTICLE XXI SPECIAL DISTRIBUTION RULES...........................................................................89
ARTICLE XXII PARTICIPANT LOANS...................................................................................92
1. Application for Loans..........................................................................92
2. Repayment of Loans.............................................................................94
3. Interest.......................................................................................94
4. Collateral.....................................................................................95
ARTICLE XXIII MISCELLANEOUS PROVISIONS...........................................................................97
1. No Commitment as to Employment.................................................................97
2. Benefits.......................................................................................98
3. No Guarantees..................................................................................98
4. Precedent......................................................................................98
5. Duty to Furnish Information....................................................................98
6. Withholding....................................................................................98
7. Merger, Consolidation, or Transfer of Plan Assets..............................................98
8. Condition on Employer Contributions............................................................99
9. Back Pay Awards................................................................................99
10. Validity of Plan..............................................................................100
11. Parties Bound.................................................................................100
12. Agents, Recordkeepers, Attorneys and Accountants..............................................101
</TABLE>
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<TABLE>
<S> <C>
ARTICLE XXIV DIRECT ROLLOVER....................................................................................101
1. Direct Rollover Election......................................................................101
2. Definitions...................................................................................101
ARTICLE XXV ....................................................................................................102
</TABLE>
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ESSEF CORPORATION
EMPLOYEES' RETIREMENT PLAN
(JANUARY 1, 1999 RESTATEMENT)
THIS AGREEMENT, made and entered into at Chardon, Ohio, this 22nd day
of December, 1998, pursuant to resolution of the Board of Directors of ESSEF
CORPORATION, an Ohio corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company currently maintains in effect the ESSEF
Corporation Employees' Retirement Plan and Trust for the exclusive benefit of
eligible employees and their beneficiaries under a trust agreement amended and
restated effective as of October 1, 1995, as amended on two subsequent
occasions; and
WHEREAS, it is deemed desirable further to amend and to restate the
terms, provisions, and conditions of said Plan, effective as of January 1, 1999,
or as otherwise earlier set forth herein, as hereinafter set forth;
WHEREAS, the Company has entered into, or shortly after the execution
date of this restatement will enter into, a separate trust agreement effective
as of January 1, 1999, with Fidelity Management Trust Company (the "Trustee");
and
WHEREAS, the Company desires to add a Company Stock Fund as an
investment option under the Plan;
NOW, THEREFORE, the parties agree that, effective as of January 1,
1999, or such other earlier date as may be expressly provided herein with
respect to a particular provision, said Plan as previously amended, is hereby
amended and restated in its entirety to provide as hereinafter set forth, and
that the Trustee shall hold all assets presently held by it and all funds and
other property
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hereafter contributed to it pursuant to the provisions hereof,
together with all the increments, proceeds, investments, and reinvestments
thereof, in trust, for the uses and purposes and upon the terms and conditions
hereinafter set forth.
ARTICLE I
DEFINITIONS
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The following words and phrases as used herein shall have the following
meanings, unless a different meaning is plainly required by the context:
1. THE "ACT" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Reference to a section of the Act shall
include such section and any comparable section or sections of any future
legislation that amends, supplements, or supersedes such section.
2. THE "AGREEMENT" shall mean this Plan, including any amendment
hereof.
3. The "AUTOMATIC DEFERRED COMPENSATION CONTRIBUTIONS" shall mean those
which are defined and provided for in Section 3 of Article III.
4. THE "BENEFICIARY" of a Participant, or of a former Participant,
shall mean the person or persons who, under the provisions of Article IV, shall
be entitled to receive distribution hereunder in the event such Participant or
former Participant dies before his interest shall have been distributed to him
in full.
5. A "BREAK IN SERVICE" shall mean any Plan year during which a
person's employment by an Employer or a related corporation results in his
completing less than 501 hours of service for such Employer or such related
corporation or during which a person completes no hours of service for such
Employer or such related corporation; provided, however, that no person shall
incur a Break in Service solely by reason of (i) temporary absence from work not
exceeding 12 months resulting from illness, layoff, or other cause if authorized
in advance by an Employer or
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a related corporation pursuant to its uniform leave policy, if his employment
shall not otherwise be terminated during the period of such absence; or (ii)
absence from work due to military service in the Armed Forces of the United
States, so long as he returns to work with an Employer or a related corporation
within the period during which he retains reemployment rights under federal law.
6. THE "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time. Reference to a section of the Code shall include such section
and any comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
7. THE "COMMITTEE" shall mean the Committee established in accordance
with the provisions of Article XIV, at the time designated, qualified, and
acting hereunder.
8. THE "COMPANY STOCK FUND" shall mean a fund that holds shares of
common stock of the Company, and/or its affiliates and an amount of short-term
investments. A Participant's ownership interest in the Company Stock Fund shall
be measured in units of the Company Stock Fund instead of shares of stock. The
amount of short-term investments held in the Company Stock Fund shall be based
on a target established by the Committee, in consultation with the Trustee, and
will fluctuate with the amount of cash awaiting investment and
Participant-directed transactions with respect to the Company Stock Fund.
9. THE "COMPENSATION" of a Participant for any Plan year shall mean the
base compensation, overtime pay, and cash bonus paid, or which would have been
paid except for the provisions of a salary reduction agreement pursuant to which
an Employer has made contributions that are not includible in gross income under
Section 125 or 402(a)(8) of the Code, during such Plan Year by an Employer for
the services of such Participant as an Employee while he is a Participant;
provided, however, that the Compensation of a Participant for a Plan Year shall
not include any amount in excess of $150,000 (subject to adjustment annually as
provided in Section
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401(a)(17)(B) and Section 415(d) of the Code.) For Plan Years beginning before
October 1, 1997, in determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the spouse
of the Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the Plan Year. If as a result of applying
the family aggregation rule described in the preceding sentence the annual
Compensation limitation would be exceeded, the limitation shall be prorated
among the affected family members in proportion to each member's Compensation
determined prior to application of the family aggregation rules. The preceding
two sentences of this Section 7 shall not apply for Plan Years beginning on or
after October 1, 1997. In addition, for the short Plan Year from October 1, 1998
through December 31, 1998, the Compensation limitation stated above shall be
$40,000.00.
10. THE "COMPANY" shall mean Essef Corporation (formerly known as Essef
Industries, Inc.), an Ohio corporation, its corporate successors and any
corporation into which it is merged or consolidated.
11. A "DEFERRED COMPENSATION CONTRIBUTION" shall mean, with respect to
a Participant, (a) the "Automatic Deferred Compensation Contributions" as
defined and provided for in Section 3 of Article III, or (b) the percentage of
Compensation which such Participant has affirmatively elected to have his
Compensation reduced in accordance with the Provisions of Section 4 of Article
III, and which shall be contributed to the Plan on the Participant's behalf by
the Participant's Employer in accordance with the provisions of Section 1 of
Article V.
12. AN "ELIGIBILITY DATE" shall mean, with respect to any Employee, the
earliest date on which he may become a Participant under Article III.
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13. AN "EMPLOYEE" shall mean any person who is employed by an Employer,
except that the term shall not include (a) any person who renders service to an
Employer solely as a director or an independent contractor, (b) any person
covered by a collective bargaining agreement unless such agreement specifically
provides for coverage under the Plan, or (c) any person who is a nonresident
alien (within the meaning of Section 7701(b)(1)(B) of the Code) and who receives
no earned income (within the meaning of Section 911(d)(2) of the Code) from the
Employer that constitutes income from sources within the United States (within
the meaning of Section 861(a)(3) of the Code).
14. AN "EMPLOYER" shall mean the enumerated divisions and business
units of the Company or a Related Corporation listed on the attached Schedule
"A" (which Schedule may be amended or modified from time to time); and any
Related Corporation which adopts the Plan, as provided in section 1 of Article
XVII, so long as such Related Corporation has not withdrawn from the Plan.
15. AN "EMPLOYER CONTRIBUTION" shall mean an amount contributed to the
Plan by an Employer in accordance with the provisions of Section 1 of Article
VI, which shall include such Employer's Matching Employer contribution,
Retirement contribution, and Discretionary Employer contribution as described
therein.
16. EFFECTIVE FOR PLAN YEARS BEGINNING ON OR AFTER OCTOBER 1, 1997, A
"HIGHLY COMPENSATED EMPLOYEE" shall mean any Employee who: (1) was a 5-percent
owner at any time during the Plan Year or the 12-month period preceding the
beginning of such Plan Year; or (2) for the 12-month period preceding the
beginning of a Plan Year had Compensation from the Employer in excess of $80,000
and, if the Employer so elects, was in the top-paid group for such preceding
12-month period. The $80,000 amount is adjusted at the same time and in the same
manner as
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under Section 415(d) of the Code, except that the base period is the
calendar quarter ending September 30, 1996. For this purpose, the applicable
Plan Year for which a determination is being made is called a "determination
year" and the preceding 12-month period is called a "look-back year." The
determination of a highly compensated former employee is based on the rules
applicable to determining highly compensated status as in effect for that
determination year, in accordance with Section 1.414(q)-1T, A-4 of the temporary
Income Tax Regulations and I.R.S. Notice 97-75. In determining whether an
employee is a highly compensated employee for Plan Years beginning in 1997, the
amendment to Section 414(q) of the Code stated above are treated as having been
in effect for Plan Years beginning in 1996.
17. AN "HOUR OF SERVICE" shall mean, with respect to any person, an
hour which is determined and credited as such in accordance with the provisions
of Article II.
18. AN "INVESTMENT FUND" shall mean any separate investment trust fund
maintained by the Trustee for the Plan and referred to in Section 1 of Article
IX.
19. A "PARTICIPANT" shall mean a person who becomes eligible to
participate in the Plan in accordance with the provisions of Article III, and
whose participation has not been terminated.
20. THE "PLAN" shall mean the profit sharing retirement plan originally
established on September 29, 1972, as currently embodied in this Agreement,
which plan is called the "Essef Corporation Employees' Retirement Plan" (known
as the "Essef Corporation Employees' Profit-Sharing Retirement Plan" for certain
periods prior to October 1, 1989, and as the "Essef Industries, Inc. Employees'
Profit-Sharing Retirement Plan" for certain periods prior to July 1, 1986.)
21. "PLAN ADMINISTRATOR," which is the administrator for purposes of
the Act and the plan administrator for purposes of the Code, shall mean the
Company.
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22. A "PLAN YEAR" shall mean the 12-month period which ends on
September 30 of each year; except that for periods beginning after September 30,
1998, "Plan Year" shall mean: (a) a short Plan Year commencing on October 1,
1998, and ending December 31, 1998; and (b) after such short Plan Year, each
succeeding 12-month period which ends on December 31 of each year.
23. A "RELATED CORPORATION" shall mean any corporation, other than an
Employer, which is a member of a controlled group of corporations of which an
Employer is a member as determined under Section 1563(a) of the Code, without
regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of the Code, any trade or
business (whether or not incorporated) which is a member of a group under common
control with the Employer as determined under Section 414(c) of the Code, any
organization, other than an Employer, which is a member of an affiliated service
group of which the Employer is also a member as determined under Section 414(m)
of the Code and any entity, other than an Employer, which is required to be
aggregated with an Employer pursuant to regulations under Section 414(o) of the
Code.
24. A "ROLLOVER CONTRIBUTION" shall mean an amount contributed to the
Plan by a Participant in accordance with the provisions of Section 1 of Article
VII.
25. A "SEPARATE ACCOUNT" shall mean any of the accounts maintained by
the Trustee in the name of a Participant in the Trust, and shall include his
Discretionary Employer account, his Employer Matching account, his Deferred
Compensation account-A, his Deferred Compensation account-B, his Rollover
account as provided in Section 2 of Article IX, and his ESOP account, as
provided in Section 4 of Article XIX.
26. A "SETTLEMENT DATE" shall mean the date upon which a Participant
ceases to be a Participant as set forth in Section 1 of Article XI.
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27. THE "TRUST" shall mean the trust originally established on
September 29, 1972, as set forth effective from October 1, 1995, through
December 31, 1998, in that certain trust agreement by and between the Company
and First National Bank of Ohio; and, for the period commencing on January 1,
1999, the "Trust" shall mean the Trust as continued pursuant to that certain
trust agreement, effective as of January 1, 1999, by and between the Company,
and Fidelity Management Trust Company, as Trustee. The Trust shall include each
Investment Fund, the ESOP Fund, and any insurance contracts held hereunder,
which trust is called the "Essef Corporation Employees' Retirement Plan Trust"
(known as the "Essef Corporation Employees' Profit-Sharing Retirement Trust" for
certain periods prior to October 1, 1989, and as the "Essef Industries, Inc.
Employees' Profit-Sharing Retirement Trust" for certain periods of time prior to
July 1, 1986).
28. THE "TRUSTEE" shall mean, Fidelity Management Trust Company, or any
predecessor or successor trustee which at the time shall be designated,
qualified, and acting under a trust agreement with the Company
29. A "VALUATION DATE" shall mean any day of the Plan Year that the New
York Stock Exchange is open. The masculine pronoun wherever used herein shall
include the feminine in any case so requiring.
ARTICLE II
HOURS OF SERVICE
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1. GENERAL RULE. An "Hour of Service" with respect to any person shall
mean:
(a) each hour for which he is paid, or entitled to payment,
for the performance of duties for an Employer or a Related Corporation
during the applicable computation period; provided, however, that hours
paid for at a premium rate shall be treated as straight-time hours;
(b) subject to the provisions of Section 2 of this Article II,
each hour for which he is paid, or entitled to payment, by an Employer
or a Related Corporation on
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account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, or leave of absence; and
(c) each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by an Employer or a Related
Corporation; provided, however, that the same Hour of Service shall not
be credited both under paragraph (a) or (b) of this Section 1, as the
case may be, and under this paragraph (c); and provided, further, that
the crediting of hours of service for back pay awarded or agreed to
with respect to periods described in such paragraph (b) shall be
subject to the limitations set forth therein and in Section 2 of this
Article II.
Notwithstanding the foregoing and solely for purposes of determining whether a
person, who is absent from employment with an Employer or a Related Corporation
beginning on or after October 1, 1985, (i) by reason of the person's pregnancy,
(ii) by reason of the birth of the person's child, (iii) by reason of the
placement of a child with the person in connection with the person's adoption of
the child, or (iv) for purposes of caring for such child during the period
immediately following birth or adoption, has incurred a Break in Service, hours
of service shall include those hours with which such person would otherwise have
been credited but for such absence, or shall include eight hours of service for
each day of absence if the actual hours to be credited cannot be determined;
except that not more than 501 hours are to be credited by reason of any such
pregnancy, birth, placement or period of such child care. Any hours included as
hours of service pursuant to the immediately preceding sentence shall be
credited to the computation period in which the absence from employment begins,
if such person otherwise would incur a Break in Service in such computation
period, or in any other case, to the immediately following computation period;
except that no such credit will be given unless the person furnishes to the Plan
Administrator such timely information as may reasonably be required to establish
that the absence from employment was for one of the reasons enumerated in the
immediately foregoing sentence, and the number of days for which there was such
an absence.
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2. LIMITATIONS APPLICABLE TO PARAGRAPH (b) OF SECTION 1. In the
application of the provisions of paragraph (b) of Section 1 of this Article II,
the following provisions shall apply:
(a) No more than 501 hours of service shall be credited under
such paragraph (b) to a person on account of any single continuous
period during which he performs no duties (whether or not such period
occurs in a single computation period).
(b) An hour for which a person is directly or indirectly paid,
or entitled to payment, on account of a period during which no duties
are performed shall not be credited to him if such payment is made or
due under a plan maintained solely for the purpose of complying with
applicable Workers' Compensation, unemployment compensation, or
disability insurance laws.
(c) Hours of service shall not be credited with respect to a
payment which solely reimburses a person for medical or medically
related expenses incurred by him.
(d) For purposes of such paragraph (b), a payment shall be
deemed to be made by or due from an Employer or a Related Corporation
(i) regardless of whether such payment is made by or due from such
employer directly or indirectly, through (among others) a trust fund or
insurer to which any such employer contributes or pays premiums, and
(ii) regardless of whether contributions made or due to such trust
fund, insurer, or other entity are for the benefit of particular
persons or are on behalf of a group of persons in the aggregate.
3. DETERMINATION OF HOURS OF SERVICE UNDER PARAGRAPH (b) OF SECTION 1.
In the case of a payment which is made or due on account of a period during
which a person performs no duties, and which results in the crediting of hours
of service under paragraph (b) of Section 1 of this Article II, or in the case
of an award or agreement for back pay, to the extent that such award or
agreement is made with respect to a period described in such paragraph (b), the
number of hours of service to be credited shall be determined in accordance with
the following provisions:
(a) Except as provided in paragraph (d) of this Section 3, in
the case of a payment made or due which is calculated on the basis of
units of time, such as hours, days, weeks, or months, the number of
hours of service to be credited shall be the number of regularly
scheduled working hours included in the units of time on the basis of
which the payment is calculated. For purposes of the preceding
sentence, in the case of a person without a regular work schedule, the
number of hours to be credited shall be calculated on the basis of a
40-hour workweek and an eight-hour workday.
(b) Except as provided in such paragraph (d), in the case of a
payment
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made or due which is not calculated on the basis of units of time, the
number of hours of service to be credited shall be equal to the amount
of the payment divided by the person's most recent hourly rate of
compensation (as determined under paragraph (c) of this Section 3)
before the period during which no duties are performed.
(c) For purposes of paragraph (b) of this Section 3 a person's
hourly rate of compensation shall be determined in accordance with the
following provisions:
(i) In the case of a person whose compensation is
determined on the basis of an hourly rate, such hourly rate
shall be such person's most recent hourly rate of
compensation.
(ii) In the case of a person whose compensation is
determined on the basis of a fixed rate for specified periods
of time (other than hours) such as days, weeks, or months,
such person's hourly rate of compensation shall be his most
recent rate of compensation for a specified period of time
(other than an hour), divided by the number of hours regularly
scheduled for the performance of duties during such period of
time. For purposes of the preceding sentence, in the case of a
person without a regular work schedule, such person's hourly
rate of compensation shall be calculated on the basis of a
40-hour workweek and an eight-hour workday.
(iii) In the case of a person whose compensation is
not determined on the basis of a fixed rate for specified
periods of time, such person's hourly rate of compensation
shall be the lowest hourly rate of compensation paid to
persons in the same job classification as that of such person
or, if no one in the same job classification has an hourly
rate, the minimum wage as established from time to time under
Section 6(a)(1) of the Fair Labor Standards Act of 1938, as
amended.
(d) Notwithstanding the provisions of paragraphs (a) and (b)
of this Section 3, a person shall not be credited on account of a
period during which no duties are performed with a number of hours of
service which is greater than the number of hours regularly scheduled
for the performance of duties during such period. For purposes of
applying the preceding sentence in the case of a person without a
regular work schedule, the number of hours of service to be credited to
such person for a period during which no duties are performed shall be
calculated on the basis of a 40-hour workweek and an eight-hour
workday.
4. CREDITING OF HOURS OF SERVICE TO COMPUTATION PERIODS. Hours of
service determined under Section 1 of this Article II shall be credited to the
appropriate computation period in accordance with the following provisions:
(a) Hours of service described in paragraph (a) of such
Section 1 shall be credited to the computation period in which the
duties are performed.
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(b) Hours of service described in paragraph (b) of such
Section 1 shall be credited as follows:
(i) hours of service credited to a person on account
of a payment which is calculated on the basis of units of
time, such as hours, days, weeks, or months, shall be credited
to the computation period or periods in which the period
during which no duties are performed occurs, beginning with
the first unit of time to which the payment relates; and
(ii) hours of service credited to a person on account
of a payment which is not calculated on the basis of units of
time shall be credited to the computation period in which the
period during which no duties are performed occurs, or, if the
period during which no duties are performed extends beyond one
computation period, such hours of service shall be allocated
equally between the first two such computation periods.
(c) Hours of service described in paragraph (c) of such
Section 1 shall be credited to the computation period or periods to
which the award or agreement for back pay pertains, rather than to the
computation period in which the award, agreement, or payment is made.
(d) Notwithstanding the provisions of this Section 4, in the
case of hours of service to be credited to a person in connection with
a period of no more than 31 days which extends beyond one computation
period, all such hours of service shall be credited to the second such
computation period.
2. "COMPUTATION PERIOD" For purposes only of this Article II, a
"computation period", with respect to the determination of an Employee's years
of vested service, shall mean a Plan Year, and, with respect to the
determination of a person's years of service, shall mean the 12-month period
commencing on the first date he completes an Hour of Service or a Plan Year
beginning after the date he completes his first Hour of Service, as the case may
be.
ARTICLE III
EMPLOYEE PARTICIPATION
----------------------
1. PARTICIPATION. Each Employee who was a Participant on December 31,
1998, shall continue as a Participant hereunder. Each other Employee shall
become a Participant on the earliest Eligibility Date occurring on or after
January 1, 1999, on which he has attained age 21 and has satisfied either of the
following eligibility requirements:
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(a) completion of six months of full-time employment with an
Employer without interruption, or
(b) completion of one year of service with an Employer.
For purposes of paragraph (a) of this Section 1, an Employee shall be deemed to
be employed on a full-time basis only if his customary employment contemplates
his completion of at least 1,000 hours of service in a Plan Year.
2. ELIGIBILITY DATES. An Employee shall become a Participant as of the
first day of any month of the Plan Year coincident with or following the first
date on which the Employee has satisfied the age and service eligibility
requirements specified in Section 1 of this Article III.
3. AUTOMATIC DEFERRED COMPENSATION CONTRIBUTIONS. The Employer shall
automatically reduce an Employee's Compensation by 2% commencing with the
Employee's Eligibility Date and contribute this 2% of Compensation amount (the
"Automatic Deferred Compensation Contributions") to the Plan on the Employee's
behalf as a Deferred Compensation Contribution, unless the Employee
affirmatively elects otherwise, subject to, and as more particularly provided
by, the following rules and procedures of this Section 3:
(a) The Automatic Deferred Compensation Contributions
established by this Section 3 shall only apply to eligible Employees of
an Employer who commence employment with the Employer on or after
January 1, 1999.
(b) Within an administratively reasonable period of time after
an eligible Employee commences employment with the Employer, the
Employer shall inform the Employee, in writing, by means of transmittal
or delivery to the Employee of an Enrollment/Change form (or such other
form as the Committee may establish) of the Automatic Deferred
Compensation Contributions feature of the Plan.
(c) No earlier than 30 days prior to the Employee's
anticipated Eligibility Date, the Employer shall re-notify the
Employee, by means of transmittal or delivery to the Employee of the
Enrollment/Change form, of the Automatic Deferred Compensation
Contributions feature of the Plan. The Enrollment/Change form shall
enable the Employee to elect affirmatively not to have the Automatic
Deferred Compensation Contributions apply to the Employee, or to change
the amount of his Deferred Compensation Contributions as permitted by
the Plan.
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(d) If the Employee wishes to be exempt from the Automatic
Deferred Compensation Contributions feature of the Plan as of his
Eligibility Date, the Employee must return the Enrollment/Change form,
indicating the Employee's election to be exempt from the Automatic
Deferred Compensation Contributions feature of the Plan, to the
Committee no later than 15 days before the Employee's anticipated
Eligibility Date.
(e) In the event the Employee does not return the
Enrollment/Change form to the Committee (electing to be exempt from the
Automatic Deferred Compensation Contributions feature of the Plan) at
least 15 days prior to the Employee's Eligibility Date, the Automatic
Deferred Compensation Contributions feature of the Plan shall be
applicable to the Employee until such time as the Employee either
elects to be exempt from Automatic Deferred Compensation Contributions,
or elects a different amount of such Deferred Compensation
Contributions, by contacting the Trustee directly, by means of
telephone or the Internet (the "Trustee Direct Contact Procedures"); or
by such other means as the Committee may prescribe from time to time.
In the event the Employee so elects to be exempt, or so elects a
different amount of such Automatic Deferred Compensation Contributions,
the changes in the Automatic Deferred Compensation Contributions
applicable to such Employee shall be effective as soon as
administratively feasible, but no earlier than 15 days after the change
is elected (or such other time period as the Committee may prescribe).
(f) At least once a year, no later than 30 days before the
commencement of the next Plan Year, the Employer shall notify all
Employees then-subject to Automatic Deferred Compensation Contributions
that all such Employees may elect to be exempt from Automatic Deferred
Compensation Contributions.
4. ELECTION RELATING TO DEFERRED COMPENSATION CONTRIBUTIONS. During the
month including or immediately following the date on which a Participant has
satisfied the eligibility requirements specified in Section 1 of this Article
III, such Participant may file with the Committee (or a local personnel office
of an Employer) a written election with respect to a Compensation reduction
authorization on a form prescribed by the Committee, which authorizes his
Employer to make Deferred Compensation Contributions on his behalf in accordance
with the provisions of Section 1 of Article V, effective for the first payroll
period ending on or after the month first following receipt of such election by
the Committee, as the case may be. After the month including or immediately
following the date on which a Participant has satisfied the eligibility
requirements specified in Section 1 of this ARTICLE III, the Participant may
authorize his Employer to make
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Deferred Compensation Contributions on his behalf by means of the Trustee's
Direct Contact Procedures, or such other methods as may be prescribed by the
Committee from time to time.
5. YEARS OF SERVICE. For the purpose only of applying the eligibility
requirements set forth in Section 1 of this Article III, years of service shall
be determined in accordance with the following provisions:
(a) An Employee will be credited with one year of service if,
as of the end of the 12-month period commencing on the first date he
completes an Hour of Service, he has completed at least 1,000 Hours of
Service. An Employee shall be credited with one year of service for
each Plan Year (beginning with the first Plan Year after he completes
his first Hour of Service) in which he completes at least 1,000 Hours
of Service, provided, however, that no Employee shall be credited with
more than one Year of Service for eligibility purposes. He shall be
credited with an additional year of service for each Plan Year,
including the Plan Year in which such 12-month period terminated, in
which he completes at least 1,000 hours of service.
(b) In the case of an Employee who has a Break in Service,
(i) if an Employee did not have a non-forfeitable
right to any portion of any Employer derived Separate Account
before his Break in Service commenced, his years of service
prior to the Break in Service shall be disregarded for
purposes of determining his eligibility if the number of his
consecutive breaks in service equals or exceeds the greater of
five or the aggregate number of years of service such Employee
had before his Break in Service commenced; and
(ii) if his years of service are not excluded under
(i) above or if he had a non-forfeitable right to any portion
of any Employer derived Separate Account before his Break in
Service commenced, his years of service before the Break in
Service commenced will be reinstated upon his again completing
an Hour of Service as an Employee.
Notwithstanding the foregoing provisions of this paragraph (b),
however, in no event shall any years of service be taken into account
for purposes of determining eligibility by reason of amendments made to
this paragraph (b) to comply with the Retirement Equity Act of 1984, if
such years of service would not have been taken into account for such
purpose on September 30, 1985, under the provisions of this paragraph
(b) in effect on such date.
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6. REEMPLOYMENT AFTER BREAK IN SERVICE. If an Employee who incurs a
Break in Service after his employment is terminated is thereafter re-employed as
an Employee and if his years of service prior to such Break in Service are
reinstated under paragraph (b)(ii) of Section 4 of this Article III, he shall
become a Participant or again become a Participant, as the case may be, on the
date such service is reinstated. If a former Employee who incurs a Break in
Service after his employment is terminated is thereafter re-employed as an
Employee and if he does not become a Participant immediately upon his completing
an Hour of Service as an Employee in accordance with the preceding provisions of
this Section 5, he shall become a Participant or again become a Participant, as
the case may be, on the earliest Eligibility Date indicated in Section 2 of this
Article III with respect to which he meets the eligibility requirements
indicated in Section 1 of this Article III based on his period of reemployment.
7. CERTIFICATION OF NEW PARTICIPANTS. As soon as practicable after each
Eligibility Date, each Employer shall transmit to the Company, the Trustee, and
the Committee a certified list of all Employees becoming Participants on such
date. Each Employee so certified shall be notified of such fact by his Employer.
Upon becoming a Participant hereunder, an Employee shall become entitled to the
benefits under the Plan and shall be bound by all provisions of this Plan.
8. CHANGES IN EMPLOYMENT STATUS; TRANSFERS OF EMPLOYMENT. If a
Participant ceases to be an Employee but continues in the employment of (i) an
Employer in some other capacity, or (ii) a Related Corporation, he shall
nevertheless continue as a Participant until his participation is otherwise
terminated in accordance with the provisions of this Plan; provided, however,
that such Participant shall share in any Employer contributions and forfeitures
for any Plan Year of such participation only to the extent and on the basis of
his Compensation for services as an Employee or on the basis of Deferred
Compensation Contributions made on his behalf during such Plan Year, as
16
<PAGE> 23
the case may be; and provided, further, that no Deferred Compensation
Contributions shall be made on behalf of such Participant in accordance with the
terms of his Compensation reduction authorization except on the basis of his
Compensation for services as an Employee during such Plan Year. Moreover, if a
person is transferred directly from employment (i) with an Employer in a
capacity other than as an Employee or (ii) with a Related Corporation, to
employment with an Employer as an Employee, his service with such Employer or
such Related Corporation shall be included in determining his eligibility under
Section 1 of this ARTICLE III.
ARTICLE IV
BENEFICIARIES
-------------
1. DESIGNATION OF BENEFICIARY. In the case of a Participant or former
Participant who is not married, the Beneficiary to whom distribution shall be
made hereunder in the event such Participant or former Participant dies before
his interest shall have been distributed to him in full shall be such person or
persons as designated by the Participant or former Participant. In the case of a
Participant or former Participant who is married, the Beneficiary to whom
distribution shall be made hereunder in the event such Participant or former
Participant dies before his interest shall have been distributed to him in full
shall be his surviving spouse, if any, or alternately such person or persons as
designated by the Participant or former Participant, provided that such
designation has been consented to in writing by the surviving spouse, if any, of
such Participant or former Participant. To be effective, any such consent must
acknowledge the effect of such action and be witnessed by a notary public or a
Plan representative, unless a Plan representative finds that such consent cannot
be obtained because the spouse cannot be located or because of other
circumstances set forth in Section 417(a)(2) of the Code and regulations issued
thereunder. A designation of Beneficiary hereunder may be changed at any time
and from time to time by the Participant or former Participant, provided that
such change of designation has been consented to in the manner
17
<PAGE> 24
described above by the surviving spouse, if any, of such Participant or former
Participant. Any such designation or change of designation, with spousal consent
when necessary, shall be made in writing in the form prescribed by the
Committee, and shall become effective only when filed by the Participant or
former Participant with the Committee; provided, however, that any such
designation or change of designation which is received by the Committee after
the death of the Participant or former Participant shall be disregarded.
2. BENEFICIARY IN ABSENCE OF DESIGNATION. If a deceased Participant or
former Participant has no surviving spouse and if either no Beneficiary for such
Participant or former Participant shall have been designated or all those
designated as his Beneficiary shall have died prior to the death of such
Participant or former Participant, then the Beneficiary shall be the estate of
such Participant or former Participant. If any Beneficiary shall die after
becoming entitled to receive distribution hereunder and before such distribution
is made in full, and if no other person or persons shall have been designated to
receive the balance of such distribution upon the happening of such contingency,
the estate of such deceased Beneficiary shall become the Beneficiary as to such
balance.
18
<PAGE> 25
ARTICLE V
CONTRIBUTIONS MADE ON BEHALF OF PARTICIPANTS
--------------------------------------------
1. DEFERRED COMPENSATION CONTRIBUTIONS.
(a) Commencing with the first payroll period with respect to which a
Participant is subject to Automatic Deferred Compensation Contributions, or has
made an election described in Section 4 of Article III, any such Participant
shall have a Deferred Compensation Contribution made to the Plan by his Employer
which shall be a percentage of his Compensation of not less than one percent nor
more than fifteen percent; provided, however, that the Deferred Compensation
Contribution to be made on behalf of a Participant shall not, when aggregated
with all other elective deferrals made on behalf of the Participant under any
other plan, contract, or arrangement of an Employer or a Related Corporation
exceed the "applicable limit" for the Participant's taxable year beginning in
the calendar year.
(b) The "applicable limit" for a Participant's taxable year beginning
the 1999 calendar year is $10,000 and for each subsequent calendar year is an
adjusted amount established by the Secretary of Treasury pursuant to Section
402(g)(5) of the Code.
(c) At all times that a Participant (i) is subject to Automatic
Deferred Compensation Contributions, and/or (ii) elects to have his Employer
make any Deferred Compensation Contributions on his behalf, the Compensation of
such Participant shall be reduced for each payroll period by the percentage of
total Deferred Compensation Contributions contributed on his behalf to the Plan
in accordance with the terms of any applicable Automatic Deferred Compensation
Contributions and/or the Compensation reduction authorization in effect for such
Participant pursuant to Sections 1, 3 and 4 of Article III or Section 3 of this
Article V, as the case may be; except that if the Committee determines that a
Participant's Deferred Compensation Contributions will result in his exceeding
the annual "applicable limit" defined above in subsection 1(b) above, the
Committee shall adjust the total Deferred Compensation Contributions of such
Participant to such smaller percentage as will result in the annual "applicable
limit" not being exceeded.
(d) Notwithstanding any other provision in this Plan to the contrary,
no Deferred Compensation Contributions made with respect to a Plan Year on
behalf of Participants who are Highly Compensated Employees shall result in an
average actual deferral percentage for such Participants which exceeds the
greater of:
(i) a percentage which is equal to 125 percent of the average
actual deferral percentage for all other Participants; or
(ii) a percentage which is not more than 200 percent of the
average actual deferral percentage for all other Participants and which
is not more than two percentage points higher than the average actual
deferral percentage for all other Participants.
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<PAGE> 26
The Committee shall adjust as required the projected actual
deferral percentages of Highly Compensated Employees by reducing such
percentages in order, beginning with the highest of such percentages,
to such smaller percentages that will result in the limits set forth
above (the "ADP test") not being exceeded. The Committee shall then
adjust the Deferred Compensation Contributions of affected Highly
Compensated Employees to reflect the adjustment made to their actual
deferral percentages.
(e) Effective on and after October 1, 1997, if the Committee
determines the Plan fails to satisfy the ADP Test for a Plan Year, the
Trustee shall be directed by the Committee to distribute the Excess
Contributions, as adjusted for allocable income, during the first
21/2months of the next Plan Year. The "Excess Contributions" are the
amount of Deferred Compensation Contributions made by the Highly
Compensated Employee(s) which cause(s) the Plan to fail to satisfy the
ADP test. The Committee shall determine the amount of the Excess
Contributions by starting with the Highly Compensated Employee(s) who
has the greatest ADP. The Committee shall determine the amount of the
Excess Contributions, beginning with the Highly Compensated Employee(s)
who has the greatest ADP, reducing his ADP (but not below the next
highest ADP), then, if necessary, reducing the ADP of the Highly
Compensated Employee(s) at the next highest ADP, including the ADP of
the Highly Compensated Employee(s) whose ADP the Committee already has
reduced (but not below the next highest ADP), and continuing in this
manner until the average ADP for the Highly Compensated Employees, as a
group, satisfies the ADP test.
(f) After the Committee has determined the Excess Contribution
amount, the Committee shall instruct the Trustee to distribute to each
Highly Compensated Employee his respective share(s) of the Excess
Contributions. The Committee shall determine the respective share(s) of
the Excess Contributions by starting with the Highly Compensated
Employee(s) who has the highest Deferred Compensation Contributions,
reducing his Deferred Compensation Contributions (but not below the
next highest level of Deferred Compensation Contributions), then, if
necessary, reducing the Deferred Compensation Contributions of the
Highly Compensated Employee(s) at the next highest level of Deferred
Compensation Contributions including the Deferred Compensation
Contributions of the Highly Compensated Employee(s) whose Deferred
Compensation Contributions the Committee already has reduced (but not
below the next highest level of Deferred Compensation Contributions),
and continuing in this manner until the Trustee has distributed all
Excess Contributions.
(g) The Excess Contributions with respect to a Highly
Compensated Employee, plus any allocable income for the Plan Year,
shall be charged against his interest in the various Investment Funds
in which such amounts are invested in accordance with procedures
adopted by the Committee and shall be distributed to the Highly
Compensated Employee prior to the end of the succeeding Plan Year. The
income allocable to Excess Contributions shall be determined by
multiplying the gain or loss allocable for the Plan Year to the
Deferred Compensation Contributions made on behalf of the Participant
(and Retirement Contributions treated as elective contributions for
purposes of Section 1 of this Article V for the Plan Year) by a
fraction the numerator
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<PAGE> 27
of which is the amount of the Participant's Excess Contributions and
the denominator of which is the sum of (a) the balance of the
Participant's Deferred Compensation Contribution Account-A (and
Deferred Compensation Contribution Account-B, to the extent such
amounts have been treated as elective contributions for purposes of
Section 1 of this Article V) as of the beginning of the Plan Year, plus
(b) the Deferred Compensation Contributions made on behalf of the
Participant and Retirement Contributions treated as elective
contributions for purposes of Section 1 of Article V for the Plan Year.
The amount of Excess Contributions for a Plan Year shall be reduced by
any excess deferrals as defined in Section 6 of this Article V
previously distributed to the Highly Compensated Employee for the
Highly Compensated Employee's taxable year ending with or within such
Plan Year
(h) For purposes of this Section 1, the following terms shall
have the following meanings, and further subject to the limitations of
Section 401(a)(17) of the Code:
(i) The term "Compensation" means Compensation as
defined in Section 414(s) of the Code, including any amount
contributed by the Employers pursuant to a salary reduction
agreement that is not includible in the gross income of an
Employee under Section 125, 402(a)(8), 402(h), or 403(b) of
the Code, and further subject to the limitations of Section
401(a)(17) of the Code.
(ii) The term "actual deferral percentage", or "ADP",
with respect to a Participant for a Plan Year means the ratio
of the Deferred Compensation Contributions made on his behalf
with respect to the Plan Year to his Compensation for such
Plan Year, except that, to the extent permitted by regulations
promulgated by the Secretary of the Treasury, the Company may
elect to take into account in computing the numerator of each
Participant's actual deferral percentage the Employer
Retirement contributions (as defined in paragraph (a) of
Section 1 of Article VI) made on his behalf for the Plan Year.
Notwithstanding the foregoing a Deferred Compensation
Contribution will be taken into account for purposes of the
actual deferral percentage of a Participant for a Plan Year
only if (A) it relates to Compensation that either would have
been received by the Participant in the Plan Year (but for the
election to defer) or is attributable to services performed by
the Participant in the Plan Year and would have been received
by him but for the election to defer, within two and one-half
months after the close of the Plan Year and (B) the Deferred
Compensation Contribution is allocated to the Participant
within the Plan Year. For purposes of the foregoing, a
Deferred Compensation Contribution shall be considered
allocated as of a date within the Plan Year if the allocation
is not contingent upon the Participant's participation in the
Plan or performance of services after such date and such
contribution is actually paid to the Trust no later than 12
months after the end of the Plan Year to which the Deferred
Compensation Contribution relates.
(iii) The term "Family Member" with respect to a
Participant means the Participant's spouse, his lineal
ascendants, his lineal descendants, and the spouses of such
lineal ascendants and descendants.
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<PAGE> 28
(i) For purposes of applying the limitation contained
in this Section 1, the Deferred Compensation Contributions,
Employer Retirement contributions, and Compensation of any
Participant who is a Family Member of a Participant who is (i)
a five percent owner or (ii) among the ten Highly Compensated
Employees receiving the greatest Compensation for the Plan
Year, shall be aggregated with the Deferred Compensation
Contributions, Employer Retirement contributions, and
Compensation of such five percent owner or Highly Compensated
Employee Participant, and such Family Member shall not be
considered a Participant for purposes of determining the
average actual deferral percentage for all other Participants.
Notwithstanding the foregoing, effective for Plan Years
beginning on and after October 1, 1997, the family aggregation
rules of this Section will not apply.
2. ADMINISTRATION AND LIMITATION. Each Employer shall cause to be
delivered to the Trustee all Deferred Compensation Contributions made in
accordance with the provisions of Section 1 of this Article V as soon as
reasonably practicable, but not later than 15 days after the last day of the
calendar month in which ends the payroll period with respect to which such
Deferred Compensation Contributions are made; provided, however, that each
Employer's contribution hereunder for any Plan Year shall not exceed the
limitation specified in Section 3 of Article VI. Subject to the provisions of
Article VIII, the Committee shall credit the amount of Deferred Compensation
Contributions made by each Employer on behalf of a Participant to such
Participant's Deferred Compensation account.
3. CHANGES IN REDUCTION AUTHORIZATIONS. During any month of the Plan
Year, a Participant may change the percentage of his Compensation which he
causes to be contributed on his behalf as Deferred Compensation Contributions,
or from that which is automatically contributed on his behalf, as Deferred
Compensation Contributions by selecting a percentage of his Compensation of not
less than one percent nor more than fifteen percent, by contacting the Trustee
directly, by means of the Trustee Direct Contact Procedures (or by such other
means as the Committee may prescribe from time to time). Any such changes shall
be effective as soon as administratively feasible, but no earlier than 15 days
after the date the Participant makes such
22
<PAGE> 29
change. If the Participant employs the Trustee Direct Contact Procedures, they
shall be subject to the Trustee's internal procedures and restrictions
(including, but not limited to, market technological and other conditions and
limitations).
4. SUSPENSION OF CONTRIBUTIONS.
(a) Any Participant for whom Deferred Compensation
Contributions are being made under this Article V may have such
contributions suspended by utilizing the Trustee's Direct Contact
Procedures.
(b) Any suspension shall take effect as soon as
administratively feasible, but no earlier than 15 days after the date
of the Participant's contact with the Trustee.
(c) Any suspension by means of the Trustee's Direct Contact
Procedures shall be governed by the Trustee's internal procedures and
restrictions (including, but not limited to, market, technological and
other conditions and limitations).
(d) Any Participant who has suspended his Deferred
Compensation Contributions in accordance with the foregoing provisions
of this Section 4 of this Article V may have such contributions resumed
by means of the Trustee's Direct Contact Procedures (or by such other
means as the Committee may designate from time to time). The
Participant's Deferred Compensation Contributions shall be resumed as
soon as administratively feasible, but no earlier than 15 days after
the Participant's initiation of contact with the Trustee (or such other
entity as the Committee may designate).
5. SPECIAL RULE FOR SUSPENSIONS OF AUTOMATIC DEFERRED COMPENSATION
CONTRIBUTIONS. Notwithstanding any other provision of the Plan to the contrary,
in the event a Participant directs the suspension of the Participant's Automatic
Deferred Compensation Contributions, the suspension of the Automatic Deferred
Compensation Contributions shall be effective no later than the first payroll
period beginning in the month following the date of the Participant's direction
of such suspension.
6. DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding anything to the
contrary contained in this Plan, in the event that a Participant notifies the
Committee in writing no later than the first March 1 following the close of his
taxable year that excess deferrals have been made on his behalf under the Plan
for such taxable year, such excess amounts, plus any income allocable for the
23
<PAGE> 30
taxable year, shall be charged against his interest in the various Investment
Funds in which such amounts are invested in accordance with procedures adopted
by the Committee and shall be distributed to the Participant no later than the
April 15 immediately following such taxable year. For purposes of this Section
6, "excess deferrals" means that portion of a Participant's Deferred
Compensation Contributions that, when added to amounts deferred under other
plans or arrangements described in Sections 401(k), 408(k) or 403(b) of the
Code, would exceed the limit imposed on the Participant under Section 402(g) of
the Code for the taxable year of the Participant in which the Deferred
Compensation Contributions were made. In the event that a Participant's
aggregate elective deferrals under all plans of the Employers and all Related
Corporations exceed the applicable limit under Section 402(g) of the Code for
the taxable year, the Participant, no later than the first March 1 following the
close of such taxable year shall be deemed to have designated the allocation of
the excess deferrals among the Plan and any other plan of an Employer or a
Related Corporation under which the elective deferrals occurred and shall be
deemed to have notified each plan of the portion allocated to it, which shall be
the excess deferrals multiplied by a fraction the numerator of which is the
Participant's elective deferrals for the taxable year under the plan and the
denominator of which is the Participant's elective deferrals for the taxable
year, and the Company, not later than the first April 15 following the close of
the taxable year, shall direct distribution to the Participant of the amount of
the excess elective deferrals allocated to the Plan and any income allocable
thereto for the taxable year; provided, however, that any such distributed
excess elective deferrals shall nevertheless be taken into account for purposes
of computing deferral percentages for the Plan Year in which made under Section
1 of this Article V, but with respect only to Highly Compensated Employees. The
income allocable to excess deferrals under the Plan shall be determined in the
manner set forth in Section 6 of this Article V, but substituting "taxable
24
<PAGE> 31
year" for Plan Year and "excess deferrals" for excess Deferred Compensation
Contributions and deleting references to amounts other than elective deferrals
which have been treated as elective contributions for purposes of Section 7 of
Article V. The amount of excess deferrals for a taxable year under this Section
6 shall be reduced by any excess Deferred Compensation Contributions as defined
in Section 5 of this Article V previously distributed with respect to the
Participant for the Plan Year beginning with or within such taxable year.
7. TREATMENT OF EMPLOYER MATCHING CONTRIBUTIONS RELATING TO EXCESS
DEFERRAL OR CONTRIBUTION. Notwithstanding anything to the contrary contained in
this Plan, if any portion of the Employer Matching contribution is allocated to
a Participant in accordance with Section 3 of Article X and if the Excess
Contributions made on behalf of such Participant to which such Employer Matching
contribution allocation relates is treated as Excess Contributions under Section
1 of this ARTICLE V, or as an excess deferral under Section 6 of this Article V,
such Employer Matching contribution allocation shall thereupon be forfeited by
such Participant and shall be applied against the Matching Employer contribution
obligation of his Employer for the Plan Year in which the forfeiture occurs, in
the manner described in Section 7 of Article XI.
8. NONFORFEITABILITY. Deferred Compensation Contributions and
Retirement Contributions (as defined in paragraph (a) of Section 1 of Article
VI) shall be fully vested at all times.
ARTICLE VI
OTHER EMPLOYER CONTRIBUTIONS
----------------------------
1. AMOUNT OF CONTRIBUTIONS.
Each Employer shall contribute for each month, beginning on or after
October 1, 1995, the amount determined with respect to Employees of such
Employer which is necessary to fund matching allocations described under Section
3 of Article X for such month; subject to reduction by
25
<PAGE> 32
any forfeitures with respect to Employees of such Employer as provided in
Section 7 of this Article VI (such amount being hereinafter referred to as such
Employer's "Matching Employer contribution"). In addition, each Employer shall
contribute for each Plan Year beginning on or after October 1, 1995, through
December 31, 1998, an amount equal to the sum of:
(a) two percent of the Compensation for such Plan Year paid by
such Employer to each Participant included on the list described in
Section 1 of Article X for such Plan Year (such amount being
hereinafter referred to as such Employer's "Retirement contribution");
and
(b) such additional amount, if any, as the Board of Directors
of the Company shall determine by action specifying the amount of such
contribution and the Plan Year for which it is being made (such amount
being hereinafter referred to as such Employer's "Discretionary
Employer contribution").
No Employer shall make any Retirement Contributions or Discretionary Employer
Contributions for any Plan Year beginning on or after January 1, 1999.
2. PAYMENT OF CONTRIBUTIONS. Each Employer contribution for any Plan
Year shall be paid in cash to the Trustee. Each Employer contribution for such
Plan Year, regardless of when actually paid, shall for purposes of Trust
accounting and reporting be deemed to have been made on the last day of such
Plan Year. Upon receipt of any such contribution, the Trustee shall deposit the
same in the Investment Funds as further described in Section 1 of Article VIII
for investment pursuant to the investment elections of the Participants whose
accounts are allocated a portion of such contribution.
3. LIMITATION ON AMOUNT. Notwithstanding anything to the contrary
contained in this Plan, the total contribution of any Employer for any Plan
Year, including Deferred Compensation Contributions made on behalf of Employees,
shall in no event exceed (i) the maximum amount which will constitute an
allowable deduction for such year to such Employer under Section 404 of the
Code, (ii) the maximum amount which may be contributed by such Employer under
Section
26
<PAGE> 33
415 of the Code, or (iii) the maximum amount which may be contributed
pursuant to any wage stabilization law, or any regulation, ruling, or order
issued pursuant to law.
4. PROFIT-SHARING PLAN. An Employer may contribute to the Plan without
regard to current or accumulated earnings and profits for the taxable year or
years ending with or within the Plan Year. Notwithstanding the foregoing, the
Plan shall continue to be designed to qualify as a profit-sharing plan under the
Code.
5. FINALITY OF DETERMINATION. The Company shall have exclusive
responsibility with respect to determining the amount of Employer contributions
and, upon determining the amount of the contribution to be made by each Employer
for a Plan Year, shall transmit to the Trustee and to the Committee a written
statement of the amount thereof, together with a certificate by an authorized
officer of the Company certifying to the correctness thereof. A determination so
made and certified shall be final and conclusive upon all Employers, the
Trustee, the Committee, and all Participants, former Participants, and
beneficiaries.
6. LIMITATION ON MATCHING EMPLOYER CONTRIBUTIONS FOR HIGHLY COMPENSATED
EMPLOYEES.
(a) Notwithstanding any other provision of this Plan to the
contrary, no Matching Employer contributions made with respect to a
Plan Year on behalf of Participants who are Highly Compensated
Employees shall result in an average contribution percentage for such
Participants which exceeds the greater of:
(i) a percentage which is equal to 125 percent of the
average contribution percentage for all other Participants; or
(ii) a percentage which is not more than 200 percent
of the average contribution percentage for all other
Participants and that is not more than two percentage points
higher than the average contribution percentage for all other
Participants; provided, however, that, to the extent required
by regulations of the Secretary of the Treasury, the
alternative limitation contained in this paragraph (b) shall
not be used for purposes of this Section 6 in any Plan Year
with respect to which the Company uses paragraph (d)(ii) of
Section 1 of Article V to meet the actual deferral percentage
limitations specified therein.
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<PAGE> 34
(b) For purposes of this Section 6, the following terms shall
have the following meanings:
(i) The term "Compensation" means Compensation as
defined in Section 414(s) of the Code, including any amount
contributed by the Employers pursuant to a salary reduction
agreement that is not includible in the gross income of an
Employee under Section 125, 402(a)(8), 402(h), or 403(b) of
the Code, and further subject to the limitations of Section
401(a)(17) of the Code.
(ii) The term "contribution percentage", or "ACP",
with respect to a Participant for a Plan Year means the ratio
of the Matching Employer contributions made on his behalf for
the Plan Year to his Compensation for such Plan Year, except
that, to the extent permitted by regulations promulgated by
the Secretary of the Treasury, the Company may elect to take
into account in computing the numerator of each Participant's
contribution percentage the Deferred Compensation
Contributions and Retirement contributions made on his behalf
for the Plan Year. Except as provided in applicable
regulations promulgated by the Secretary of the Treasury, the
contribution percentage of a Highly Compensated Employee who
is eligible to participate in more than one plan of an
Employer to which matching contributions are made will be
determined by treating all the plans of the Employer (or an
entity that is required to be aggregated with the Employer
under Sections 414(b),(c), (m) or (o) of the Code) in which
the Highly Compensated Employee is eligible to participate as
a single plan (other than those that may not be permissively
aggregated under applicable regulations promulgated by the
Secretary of the Treasury, pursuant to Section 401(m) of the
Code). If the Highly Compensated Employee participates in two
or more plans that have different plan years, all such plan
years ending with or within the same calendar year will be
treated as a single plan.
(iii) The term "Family Member" with respect to a
Participant means the Participant's spouse, his lineal
ascendants, his lineal descendants, and the spouses of such
lineal ascendants and descendants.
(c) For purposes of applying the limitations contained in this
Section 6, and only with respect to Plan Years beginning before October
1, 1997, the Matching Employer contributions and Compensation of any
Participant who is a Family Member of a Participant who is (i) a five
percent owner or (ii) among the ten Highly Compensated Employees
receiving the greatest Compensation for the Plan Year, shall be
aggregated with the Matching Employer contributions and Compensation of
such five percent owner or Highly Compensated Employee Participant, and
such Family Member shall not be considered a Participant for purposes
of determining the average contribution percentage for all other
Participants. In the event that the limitation described in paragraph
(b) of this Section 6 relating to multiple use of the alternative
limitation is applicable with respect to a Plan Year, the Company shall
determine the order in which corrective distributions are to be made
hereunder so as to distribute in the aggregate the smallest amount
necessary to eliminate excess amounts with respect to the Plan Year.
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<PAGE> 35
7. FORFEITURE OR DISTRIBUTION OF EXCESS MATCHING EMPLOYER CONTRIBUTIONS.
(a) The determination of the amount of excess Matching
Employer contributions shall be made after application of Section 1 of
Article V, if applicable, and after application of Section 6 of Article
V, if applicable.
(b) Notwithstanding any other provision of this Plan to the
contrary, in the event that the limitation contained in Section 6 of
this Article VI (the "ACP Test") is exceeded in any Plan Year, the
excess Matching Employer Contributions with respect to a Highly
Compensated Employee, plus any allocable income for the Plan Year,
shall be charged against his interest in the various Investment Funds
in which such amounts are invested in accordance with procedures
adopted by the Committee and shall be forfeited or distributed prior to
the end of the succeeding Plan Year as hereinafter provided in the same
proportion as the Highly Compensated Employee's forfeitable and vested
interest in his Employer Matching account to which such contributions
have been credited.
(c) The income allocable to excess Matching Employer
contributions shall be determined in the manner set forth in Section
1(g) of Article V, but substituting "excess Matching Employer
contributions" for excess Deferred Compensation Contributions and using
as the denominator the sum of (i) the balance of the Participant's
Employer Matching account as of the beginning of the Plan Year and (ii)
the Matching Employer Contributions made for the Participant for the
Plan Year.
(d) Any amounts forfeited with respect to a Participant
pursuant to this Section 7 shall be applied against the Matching
Employer contribution obligation of his Employer for the Plan Year in
which the forfeiture occurs.
(e) For purposes of this Section 7 of this ARTICLE VI, "excess
Matching Employer contributions" with respect to a Highly Compensated
Employee means the excess of the Matching Employer contributions made
on his behalf over the maximum amount permitted to be contributed on
his behalf under Section 6 of this Article VI, determined by reducing
the dollar amounts of Matching Employer contributions made on behalf of
Highly Compensated Employees in order of their contribution percentages
beginning with the highest of such percentages. Notwithstanding the
foregoing, for Plan Years beginning on and after October 1, 1997, the
following rules and procedures shall be applicable:
(i) The Committee will determine excess Matching
Employer contributions. If the Committee determines the Plan
fails to satisfy the ACP Test for a Plan Year, the Trustee,
shall be directed by the Committee to distribute the excess
Matching Employer contributions, as adjusted for allocable
income to the appropriate Highly Compensated Employees during
the first 2 1/2 months of the next Plan Year. The excess
Matching Employer contributions are the amount of Matching
Employer contributions allocated on behalf of the Highly
Compensated Employees which causes the Plan to fail to satisfy
the ACP Test. The Committee will determine the amount of the
excess Matching Employer contributions, beginning with
starting with the Highly Compensated Employee(s) who has the
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<PAGE> 36
greatest contribution percentage, reducing his contribution
percentage (but not below the highest contribution
percentage), then, if necessary, reducing the contribution
percentage on the Highly Compensated Employee(s) at the next
highest contribution percentage level, including the
contribution percentage the Committee already has reduced (but
not below the next highest contribution percentage), and
continuing in this manner until the ACP for the Highly
Compensated Group satisfies the ACP Test.
(ii) After the Committee has determined the excess
Matching Employer contribution amount, the Trustee shall be
directed by the Committee to distribute to each Highly
Compensated Employee his respective share of the excess
Matching Employer contributions. The Committee shall determine
the respective share(s) of excess Matching Employer
contributions by starting with the Highly Compensated
Employee(s) who has the greatest amount of Matching Employer
contributions, reducing the amount of his Matching Employer
contributions (but not below the next highest amount of
Matching Employer contributions), then, if necessary, reducing
the amount of Matching Employer contributions of the Highly
Compensated Employee(s) at the next highest level of Matching
Employer, including the Matching Employer contributions of the
Highly Compensated Employee(s) whose Matching Employer
contributions the Committee already has reduced (but not below
the next highest level of Matching Employer contributions),
and continuing in this manner until the Trustee has
distributed all excess Matching Employer contributions.
8. EFFECT OF PLAN TERMINATION. Notwithstanding anything to the contrary
contained in this Agreement, a termination of the Plan by the Company shall
operate as a termination of the liability of the Company and all other Employers
to make further contributions hereunder; and a termination of the Plan as to any
Employer shall operate as a termination of the liability of such Employer to
make further contributions hereunder; provided, however, that no such
termination shall relieve any Employer of its obligation to pay contributions
hereunder for Plan Years ended prior to the date of any such termination.
ARTICLE VII
ROLLOVER CONTRIBUTIONS
----------------------
1. ROLLOVER CONTRIBUTIONS. A Participant who prior to his employment
with an Employer was a participant in a plan maintained by a previous employer
and qualified under Section 401 of the Code and who receives a distribution from
such plan that he either elects (i) to
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roll over immediately to a qualified retirement plan or (ii) to roll over into a
conduit IRA from which he receives a later distribution, may elect to make a
Rollover Contribution to the Plan if he is entitled under Section 402(a)(5) of
the Code to roll over such distribution to another qualified retirement plan.
The Committee shall establish procedures for determining whether a particular
distribution meets the requirements to be accepted as a Rollover Contribution
hereunder, and all Rollover Contributions shall be made subject to any such
procedures. A Participant shall make a Rollover Contribution to the Plan by
delivering, or causing to be delivered, to the Trustee the Rollover Contribution
amount within 60 days of receipt of the distribution from the plan or from the
conduit IRA in such manner as shall be specified by the Committee.
2. ADMINISTRATION. Notwithstanding anything to the contrary contained
in the Plan, all Rollover Contributions received by the Trustee shall be held by
the Trustee and administered in accordance with the provisions of this Article
VII. Upon receipt of any Rollover Contribution, the Rollover account of the
Participant to whom it is attributable shall be credited with the amount of the
Rollover Contribution, and such amount shall be deposited in the Investment
Funds as further described in Section 1 of Article VIII. The Participant's
interest in his Rollover account shall at all times be fully vested.
3. ROLLOVER CONTRIBUTIONS NOT CONSIDERED FOR CERTAIN PLAN PURPOSES.
Separate Accounts to which any Rollover Contributions have been credited shall
not be aggregated with the other Separate Accounts maintained under the Plan for
purposes of determining whether the Plan is top heavy within the meaning of
paragraph (i) of Section 2 of Article XVIII, except that amounts contained in a
Separate Account that are attributable to any Rollover Contributions made from a
plan maintained by an Employer or a Related Corporation shall be aggregated with
the other
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Separate Accounts maintained under the Plan for purposes of determining whether
the Plan is top heavy.
ARTICLE VIII
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
---------------------------------------
1. DEPOSIT OF CONTRIBUTIONS. All Employer contributions, Deferred
Compensation contributions, and Rollover Contributions shall be deposited in the
Investment Funds in accordance with directions received from the Committee;
provided, however, that the Committee's directions shall be based upon the
investment election of each Participant, former Participant, or Beneficiary made
in accordance with the provisions of Section 2 of this Article VIII.
2. INVESTMENT ELECTIONS.
(a) Each Participant, upon becoming a Participant, shall make
an investment election in the manner and form prescribed or permitted
by the Committee and/or the Trustee, directing the manner in which
Employer contributions (excluding 50% of Matching Employer
contributions made with respect to such Participant's Deferred
Compensation Contributions for periods subsequent to December 31,
1998), Deferred Compensation Contributions, and Rollover Contributions
made by him or on his behalf shall be deposited and held by the
Trustee. An investment election shall specify the percentage, in one
percent increments, of such contributions that shall be invested in one
or more of the Investment Funds with the sum of such percentages
equaling 100 percent.
(b) For periods subsequent to December 31, 1998, (i) each
Participant (other than officers and directors subject to Section 16(b)
of the Securities Exchange Act of 1934) may direct that up to 25% of
his or her future Deferred Compensation Contributions and the allocable
future "Participant-Directed Employer Matching Contributions" may be
invested in the Company Stock Fund; and (ii) 50% of future Matching
Employer Contributions (the "Non-Directed Employer Matching
Contributions") shall be invested in the Company Stock Fund, and shall
not be subject to any investment election of the Participant, except as
set forth under subsection 2(f) below.
(c) Subject to the provisions of Subsection 2(b), a
Participant may make separate investment elections with respect to a
Participant's existing account balance and future contributions from
among all the Investment Funds then-available for Participant direction
of investment under the Plan. The investment election made by a
Participant, former Participant, or Beneficiary of a deceased
Participant or former Participant shall remain in effect until he
causes a change of investment election.
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(d) A Participant may request changes to an investment
election by directly contacting the Trustee by means of telephone or
the Internet, according to the internal policies and procedures as may
be established by the Trustee from time to time, and which shall be
reflected in written guides for making investments provided by the
Trustee to each Participant. An investment election or change of
investment election shall become effective as soon as is
administratively practicable following its transmission. The timing of
the effective date of any investment election, or change of investment
election, after transmittal by the Participant, shall be subject to the
internal policies and procedures of the Trustee, as well as market,
technological and other conditions or limitations that may be
applicable to the method of delivery or transmittal or the internal
policies and procedures of the Trustee. In the event a Participant,
former Participant, or Beneficiary of a deceased Participant or former
Participant changes his investment election, amounts credited to his
Separate Accounts (other than his ESOP account, if any, or any
insurance contract held for him hereunder), as the case may be, as of
the effective date of the election shall be transferred between the
Investment Funds in accordance with the percentages specified in his
election and future contributions made by him or on his behalf shall be
deposited in the Investment Funds in the manner specified in such
election.
(e) If a Participant directs that all, or any portion, of the
Participant's Deferred Compensation Contributions then-invested in the
Company Stock Fund be transferred into a different Investment Fund(s),
such Participant shall not thereafter be permitted to reinvest any such
transferred amounts in the Company Stock Fund.
(f) A Participant who attains age 55 with not less than ten
(10) years of service with an Employer shall be permitted to request
that some or all of the balance in his Non-Directed Employer Matching
Contributions account be transferred to other Investment Funds
then-available under the Plan, upon such terms, conditions and
limitations as may be established by the Committee from time-to-time
and applied on a uniform and consistent basis. If, however, a
Participant transfers some or all of the balance in his Non-Directed
Employer Matching Contributions Account to another Investment Fund,
such Participant shall not thereafter be permitted to reinvest any such
transferred amounts in the Company Stock Fund.
ARTICLE IX
INVESTMENT FUNDS AND PARTICIPANTS' ACCOUNTS
-------------------------------------------
1. INVESTMENT FUNDS. The Committee shall cause one or more trust funds
to be established, each of which is herein referred to as an Investment Fund, to
hold and administer all of the assets of the Trust, except assets held in the
ESOP Fund as provided in Section 2 of Article XIX, any insurance contracts held
by the Trustee under the provisions of Article XII, and any allocated insurance
contracts held by the Trustee under the provisions of Section 2 of Article XXI.
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The Committee shall determine the number and type of Investment Funds which are
from time to time to be maintained and shall notify the Trustee in writing
concerning the same. The interest of each Participant in any Investment Fund
shall be an undivided interest.
2. SEPARATE ACCOUNTS. With respect to each Employee who becomes a
Participant, there shall be maintained five Separate Accounts in his name, as
follows: (i) an Employer Regular account, which shall reflect his share of
Employer contributions made with respect to Plan Years ending prior to October
1, 1982, and prior to January 1, 1989, his share of Regular Employer
contributions made with respect to Plan Years ending after October 1, 1982, and
forfeitures derived from such amounts, as well as such account's share of net
increase or decrease in value of the assets of the Investment Funds; (ii) an
Employer Matching account, which shall reflect his share of the Matching
Employer contribution, as well as such account's share of net increase or
decrease in value of the assets of the Investment Funds; (iii) a Deferred
Compensation account-A, which shall reflect his Deferred Compensation
Contributions, as well as such account's share of net increase or decrease in
value of the assets of the Investment Funds; (iv) a Deferred Compensation
account-B, which shall reflect his share of Retirement contributions made with
respect to Plan Years ending after October 1, 1982, and prior to January 1,
1989, as well as such account's share of net increase or decrease in value of
the assets of the Investment Funds; and (v) a Rollover account, which shall
reflect his own Rollover Contributions, if any, as well as such account's share
of net increase or decrease in value of the assets of the Investment Funds. The
Committee shall cause such Separate Accounts to be maintained and administered
for each Participant in accordance with the provisions of this Plan.
Sub-accounts shall be maintained under each Separate Account to reflect
separately contributions allocated to each Investment Fund established hereunder
and the earnings and losses
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attributable thereto. Such other sub-accounts may be established as are
necessary or appropriate to reflect a Participant's interest in the Trust.
3. ACCOUNT BALANCES. For all purposes of this Plan, the balance of each
Separate Account of a Participant and of a former Participant or Beneficiary as
of any date shall be the balance of each such account after all credits and
charges thereto, for and as of such date, have been made as provided in this
Plan.
ARTICLE X
ALLOCATIONS TO ACCOUNTS AND VALUATIONS
1. ALLOCATION OF RETIREMENT CONTRIBUTIONS AMONG PARTICIPANTS. Within a
reasonable time after the end of each Plan Year, each Employer shall certify and
deliver to the Committee a list of all persons who were Participants during the
Plan Year, together with a statement of the Compensation of each such
Participant and a statement of the amount of Deferred Compensation
Contributions, if any, made on behalf of each such Participant for such Plan
Year. Notwithstanding the foregoing, such list shall not include any Participant
who did not complete at least 500 Hours of Service during such Plan Year, unless
such Participant was reinstated as a Participant under Section 5 of Article III
after the first day of such Plan Year; except that, for the short Plan Year
ending December 31, 1998, such list shall include any Participant employed by an
Employer on December 31, 1998, without regard to the number of Hours of Service
completed by the Participant. After delivery of such list, Retirement
contributions for such Plan Year shall thereupon be allocated among all
Participants included on such list who were paid Compensation for such Plan
Year, except that no Retirement contributions shall be made for Plan Years
beginning after December 31, 1998. Subject to the provisions of Section 4 of
this Article X, the share of each such Participant shall be in the ratio which
that portion of his Compensation for such Plan Year bears to the aggregate
Compensation of all such Participants for such Plan Year. As of the last day of
such Plan
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Year, the Deferred Compensation account-B of each Participant of each
Participant who has incurred a Settlement Date prior thereto, shall be credited
with his share of Retirement contributions as so determined. However,
notwithstanding the portions of this Section 1 which provide that Retirement
contributions are allocated as of the last day of a Plan Year, the provisions of
Section 2 of Article VI, and the provisions of paragraph (e) of Section 5 of
Article X, in the event a Participant's employment is terminated prior to the
last day of a Plan Year under any of the circumstances set forth in Section 1 of
Article XI, the amount allocable to such Participant hereunder for such Plan
Year shall be credited to his Deferred Compensation account-B as of the earlier
of the date he receives distribution of all amounts then credited to Deferred
Compensation account-B or the last day of such Plan Year, and any such
distribution occurring no later than the last day of such Plan Year shall
include such amount.
2. ALLOCATION OF DISCRETIONARY EMPLOYER CONTRIBUTIONS AND FORFEITURES
AMONG PARTICIPANTS. In connection with the preparation of the list described in
Section 1 of Article X for each Plan Year, each Employer shall also specify
which Participants were no longer employed by an Employer or a Related
Corporation on the last day of such Plan Year for reasons other than termination
of employment in accordance with paragraphs (a), (b), and (c) of Section 1 of
Article XI. After delivery of such list, Regular Employer contributions for such
Plan Year shall thereupon be allocated among the Participants included on such
list, excluding, however, those who are no longer employed by an Employer or a
Related Corporation on the last day of such Plan Year for reasons other than
termination of employment in accordance with paragraphs (a), (b), and (c) of
Section 1 of Article XI. Forfeitures occurring during such Plan Year that are
derived from Regular Employer contributions shall be used (a) to satisfy any
restoration of forfeitures required under
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<PAGE> 43
Section 13 of Article XI; (b) to reduce Plan expenses which are not paid by the
Company and (c) if any forfeitures remain, shall be allocated among the
Participants as set forth above.
Subject to the provisions of Section 4 of this Article X, the share of
each Participant eligible to share in such allocation shall be in the ratio
which his Compensation for such Plan Year bears to the aggregate Compensation
for such Plan Year of all Participants eligible to share in such allocation. As
of the last day of such Plan Year, the Regular Employer account of each
Participant eligible to share in such allocation shall be credited with his
share of Regular Employer contributions and any forfeitures, as so determined.
In the case of a Participant who has incurred a Settlement Date as provided in
paragraph (a), (b), or (c) of Section 1 of Article XI prior to the allocation of
Regular Employer contributions and forfeitures, if any, pursuant to this Section
2 for such Plan Year, his allocation shall be credited to his Regular Employer
account.
3. ALLOCATION OF MATCHING EMPLOYER CONTRIBUTIONS AMONG PARTICIPANTS.
Within a reasonable time after the end of each month, Matching Employer
contributions for such month shall thereupon be allocated among all Participants
on behalf of whom Deferred Compensation Contributions were made by an Employer
for such month. For the period up to and including the short Plan Year ending
December 31, 1998, subject to the provisions of Section 4 of this Article X, the
share of each such Participant shall be equal to the sum of the following,
determined with reference to the percentage of his Compensation for each payroll
period ending in such month which is contributed on his behalf as Deferred
Compensation Contributions:
(a) 100% of his Compensation not in excess of two percent
contributed to the Plan on his behalf as Deferred Compensation
Contributions;
(b) 40% of his Compensation in excess of two percent but not
in excess of three percent contributed to the Plan on his behalf as
Deferred Compensation Contributions; and
(c) 20% of his Compensation in excess of three percent but not
in excess of
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six percent contributed to the Plan on his behalf as Deferred
Compensation Contributions.
For the period commencing with the Plan Year beginning January 1, 1999, and
subject to the provisions of Section 4 of this Article X, the share of each such
Participant shall be equal to the following, determined with reference to the
percentage of his Compensation for each payroll period ending in such month
which is contributed on his behalf as Deferred Compensation Contributions: 100%
of his Compensation not in excess of six percent of Compensation contributed to
the Plan on his behalf as Deferred Compensation Contributions. As of the last
day of each month, the Employer Matching account of each Participant of each
Participant who has incurred a Settlement Date as provided in Section 1 of
Article XI prior thereto, shall be credited with his share of Matching Employer
contributions, as so determined.
4. LIMITATION ON CREDITING OF CONTRIBUTIONS AND FORFEITURES.
Notwithstanding anything to the contrary contained in this Plan, the amount of
Employer contributions, Deferred Compensation Contributions, and forfeitures
which may be credited to the Separate Accounts of any Participant or former
Participant, as the case may be, shall be subject to the following provisions:
(a) For purposes of this Section 4, the annual addition with
respect to a Participant or former Participant shall mean the sum for
any Plan Year of the following amounts:
(i) Deferred Compensation Contributions and Employer
contributions and forfeitures which are credited to any
Separate Account of such Participant or former Participant for
such Plan Year pursuant to Section 2 of Article V and Sections
1, 2, and 3 of this Article X;
(ii) the amount, if any, of contributions and
forfeitures as provided in (i) above and voluntary employee
contributions which are credited to the Participant or former
Participant under any other qualified defined contribution
plan (whether or not terminated) maintained by an Employer or
a Related Corporation concurrently with the Plan; and
(iii) the amount, if any, allocated to an individual
medical account, as defined in Section 415(l)(2) of the Code,
which is part of a pension or annuity
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plan maintained by an Employer or a Related Corporation and
the amount, if any, attributable to post-retirement medical
benefits allocated to the Separate Account of a key employee,
as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e) of the Code,
maintained by an Employer or a Related Corporation.
The annual addition for any limitation year beginning before October 1,
1987, shall not be recomputed to treat all Participant voluntary
contributions as annual additions.
(b) For purposes of this Section 4, the Plan Year shall be the
"limitation year" within the meaning of Section 415 of the Code, and
the "Compensation" of a Participant shall mean his wages, salaries, and
other amounts received for personal services actually rendered in the
course of employment with an Employer or a Related Corporation,
excluding, however, (i) contributions made by an Employer or a Related
Corporation to a plan of deferred Compensation to the extent that,
before the application of the limitations of Section 415 to such plan,
the contributions are not includible in the gross income of the
Participant for the taxable year in which contributed, EXCEPT THAT, for
Plan Years beginning on and after October 1, 1998, "Compensation," for
purposes of this Section 4, does include elective deferrals (as
defined in Code Section 402(g)(3)), and any amount which is
contributed or deferred by an Employer at the election of a
Participant and which is not included in the gross income of the
Participant by reason of Section 125 or Section 457) (ii)
contributions made by an Employer or a Related Corporation on his
behalf to a simplified employee pension described in Section 408(k) of
the Code, (iii) any distributions from a plan of deferred Compensation
(other than amounts received pursuant to an unfunded nonqualified plan
in the year such amounts are includible in the gross income of the
Participant), (iv) amounts received from the exercise of a nonqualified
stock option or when restricted stock or other property held by the
Participant becomes freely transferable or is no longer subject to
substantial risk of forfeiture, (v) amounts received from the sale,
exchange, or other disposition of stock acquired under a qualified
stock option, and (vi) any other amounts that receive special tax
benefits, such as premiums for group term life insurance (but only to
the extent that the premiums are not includible in the gross income of
the Participant).
(c) The annual addition with respect to a Participant or
former Participant shall not exceed the lesser of (i) $30,000 (or, if
greater, the amount as adjusted under Code Section 415(d)), or (ii) 25
percent of such Participant's Compensation for such Plan Year. For the
short Plan Year beginning October 1, 1998 and ending December 31, 1998,
the Committee will apply this paragraph (c) by using $7,500 instead of
$30,000. If the annual addition to the accounts of a Participant or
former Participant in any Plan Year would exceed the limitation
contained in this Section 4 absent such limitation, there shall first
be distributed to such Participant or former Participant the amount of
Deferred Compensation Contributions made on his behalf for such Plan
Year which is necessary to eliminate such excess (plus the earnings, if
any, attributable to such excess), but only to the extent that no
Matching Employer contributions have been allocated with respect
thereto. If the limitation contained in this Section 4 would still be
exceeded, the portion of the Regular Employer contributions and of any
forfeitures, which would be allocated
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<PAGE> 46
to such Participant or former Participant under Section 2 of this
Article X, but which would exceed the limitation herein, shall be
deemed a forfeiture for such Plan Year and shall, subject to the
provisions of this Section 4, be reallocated among and credited to the
Separate Accounts of the remaining Participants and former Participants
who are eligible to share in such contributions and forfeitures for
such Plan Year; provided, however, that if the allocation of the
Regular Employer contributions and any forfeitures in accordance with
this Section 4 would cause the limitation herein to be exceeded with
respect to each such limitation herein to be exceeded with respect to
each such Participant and former Participant in the Plan for the Plan
Year, then such excess amounts shall be held unallocated in a suspense
account established for such Plan Year. No such suspense account shall
share in any increase or decrease in the net worth of the Trust. If a
suspense account is in existence at any time during a Plan Year, other
than the Plan Year with respect to which it is established, all amounts
in such suspense account shall be allocated and reallocated among and
credited to the Separate Accounts of the eligible Participants and
former Participants who have received Compensation from the Employers
in accordance with the provisions of Section 2 of this Article X and
this Section 4, before any Employer contributions or Deferred
Compensation Contributions which would constitute annual additions to
such Participants and former Participants may be made to the Plan for
such Plan Year. The amounts so allocated shall constitute annual
additions for the Plan Year with respect to which such allocation is
made. If the limitation contained in this Section 4 would still be
exceeded, the portion of the Matching Employer contributions which
would be allocated to such Participant or former Participant under
Section 3 of this Article X, but which would exceed the limitation
herein, shall be deemed a forfeiture for such Plan Year and disposed of
in accordance with Section 7 of Article XI. If the limitation contained
in this Section 4 would still be exceeded, the portion of the
Retirement contributions which would be allocated to such Participant
or former Participant under Section 1 of this Article X, but which
would exceed the limitation herein, shall be deemed a forfeiture for
such Plan Year and shall be held unallocated in a suspense account
established for such Plan Year and shall for all Plan purposes be
applied against the Employers' Retirement contribution obligation for
the next following Plan Year (and succeeding Plan Years, as necessary).
No such suspense account shall share in any increase or decrease in the
net worth of the Trust. Finally, if the limitation contained in this
Section 4 would still be exceeded, the Deferred Compensation
Contributions to be made on behalf of such Participant or former
Participant shall, to the extent necessary to eliminate such excess
(plus the earnings, if any, attributable to such excess), be
distributed to such Participant or former Participant. For purposes of
this paragraph (c), "excess annual additions" shall result only from
the allocation of forfeitures, a reasonable error in estimating annual
Compensation, a reasonable error in determining the amount of Deferred
Compensation Contributions that may be made with respect to any
Participant under the limits of Section 415 of the Code, or other
limited facts and circumstances that the Commissioner of Internal
Revenue finds justify the availability of the provisions set forth
above.
(d) If any Participant or former Participant in the Plan also
shall be covered by a qualified defined benefit plan (whether or not
terminated) maintained by an Employer or a Related Corporation
concurrently with the Plan, the sum of the defined benefit plan
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<PAGE> 47
fraction (as defined in Section 415(e)(2) of the Code) and the defined
contribution plan fraction (as defined in Section 415(e)(3) of the
Code) shall in no event exceed 1.0 in any Plan Year. In the event the
special limitation contained in this paragraph (d) is exceeded, the
benefits otherwise payable to the Participant or former Participant
under any such qualified defined benefit plan shall be reduced to the
extent necessary to meet such limitation.
(e) In the event that a Participant or former Participant is
covered by any other qualified defined contribution plan (whether or
not terminated) maintained by an Employer or a Related Corporation
concurrently with the Plan, the procedure set forth in paragraph (c) of
this Section 4 shall be implemented first by returning the
Participant's or former Participant's own contributions for such Plan
Year under all of the defined contribution plans. If the limitation
contained in this Section 4 still is not satisfied after returning all
of the Participant's own contributions under all such plans, the
procedure set forth in paragraph (c) of this Section 4 shall be
implemented by distributing to the Participant or former Participant
the amount of Deferred Compensation Contributions and elective
deferrals under all of the defined contribution plans. If the
limitation contained in this section 4 still is not satisfied, the
amount of the Employer contribution and of any forfeitures which is
deemed a forfeiture under paragraph (c) of this Section 4 shall be
effected first under the Plan and, if the limitation still is not
satisfied, on a pro rata basis among all of such other plans, unless
the Participant is covered by a money purchase pension plan, in which
event the forfeiture shall be effected first under the defined
contribution plans which are not money purchase pension plans and, if
the limitation still is not satisfied, then under such money purchase
pension plans. In the event that a Participant is covered by a
qualified defined benefit plan, the procedure set forth in paragraph
(d) of this Section 4 shall be implemented prior to effecting any
reduction in the Participant's benefit under the defined contribution
plans.
(f) In the event that the limitations of paragraph (d) of this
Section 4 are applicable, the following adjustments shall be made for
purposes of applying such paragraph (d):
(i) If, before October 3, 1973, the Participant or
former Participant was an active participant in a qualified
defined benefit plan maintained by an Employer or a Related
Corporation and otherwise satisfies the requirements of
Section 2004(d)(2) of the Act, the defined benefit plan
fraction described in paragraph (d)(i) of this Section 4 shall
not exceed 1.0.
(ii) The sum of the annual addition to a
Participant's or former Participant's accounts for each year
of service completed in Plan Years beginning prior to October
1, 1976, which shall be included for purposes of determining
the defined contribution plan fraction described in paragraph
(d)(ii) of this Section 4 shall not exceed the sum of the
maximum permissible annual addition to such accounts under
paragraph (a) of this Section 4 for such Plan Years.
(iii) If the Plan satisfied the requirements of Code
Section 415 as in effect for all Plan Years beginning before
January 1, 1987, an amount shall be
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subtracted from the numerator of the defined contribution
fraction (not exceeding such numerator) as prescribed by
regulations promulgated by the Secretary of the Treasury, so
that the sum of the defined benefit fraction and the defined
contribution fraction computed under Code Section 415(e)(i)
does not exceed 1.0 for such Plan Years beginning after
December 31, 1986.
(g) For purposes of this Section 4, the meaning of Related Corporation"
shall be as modified by Section 415(h) of the Code.
5. VALUATION OF PARTICIPANT'S INTEREST. As of each Valuation Date the
Committee shall cause each Separate Account of each Participant to be adjusted
to reflect any increase or decrease in net worth of each Investment Fund since
the immediately preceding Valuation Date, in the following manner:
(a) The Trustee shall value all of the assets of the
Investment Fund at fair market value.
(b) On the basis of the valuation provided under paragraph (a)
of this Section 5 and after making appropriate adjustments for the
amount of any contribution made with respect to the Plan Year or month
ending on such date, for any forfeitures occurring during the Plan Year
ending on such date, for any distributions and withdrawals from the
Investment Fund since the immediately preceding Valuation Date and
prior to such date, for any transfers to or from the Investment Fund
since such preceding Valuation Date and prior to such date, the net
increase or decrease in net worth of the Investment Fund which is
attributable to net earnings and all profits and losses, realized and
unrealized, since the immediately preceding Valuation Date, shall be
determined.
(c) The net increase or decrease in the net worth of the
Investment Fund as thus determined shall be allocated among all
Participants, former Participants, and beneficiaries who have an
interest in such Fund.
(d) There shall then be credited to the Deferred Compensation
account-A and the Employer Matching account of each Participant the
portions of the Deferred Compensation Contributions and Matching
Employer contributions made by the Employers for the month ending on
such date and allocated to such Participant or former Participant
pursuant to Section 2 of Article V and Section 3 of this Article X.
(e) Finally, there shall then be credited to the Employer
Regular account and Deferred Compensation account-B of each Participant
the portions of the annual contributions made by the Employers for the
Plan Year ending on such date and any forfeitures allocated to such
Participant or former Participant pursuant to Sections 1 and 2 of this
Article X.
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6. FINALITY OF COMMITTEE'S DETERMINATION. The Trustee's determination of
the net income, liabilities, and value of the assets of the Investment Funds,
and the Committee's determination of the balance of each account maintained
hereunder shall be conclusive upon the Employers and all Participants, former
Participants, and beneficiaries hereunder.
7. NOTIFICATION. Following each calendar quarter the Trustee shall furnish
the Committee with a list showing the balances of all Investment Funds as of
such Valuation Date. As soon as reasonably possible after the end of each Plan
Year and at such additional time or times as established by the Committee, the
Committee shall notify each Participant, former Participant, or Beneficiary of
the balances of his Separate Accounts as of the last day of such Plan Year. The
notification also shall state with respect to each Separate Account the portion
of such account which is nonforfeitable as of the last day of such Plan Year.
ARTICLE XI
TERMINATION OF PARTICIPATION AND DISTRIBUTION
---------------------------------------------
1. TERMINATION OF PARTICIPATION. Each Participant shall cease to be a
Participant hereunder upon the first to occur of the following dates:
(a) on the date such Participant's employment with an Employer or a
Related Corporation is terminated after he has attained age 65, or after he
has attained age 55 and completed 10 years of vested service;
(b) on the date such Participant's employment with an Employer or a
Related Corporation is terminated because of physical or mental disability
preventing his continuing in the service of such employer, as determined by
the Committee upon the basis of a written certificate of a physician
selected by it;
(c) on the date such Participant's employment with an Employer or a
Related Corporation is terminated because of the death of such Participant;
(d) on the date such Participant's employment with an Employer or a
Related Corporation is terminated after he has completed 10 years of vested
service under Section 4 of this Article XI or, if such Participant
completes an Hour of Service on or after October 1, 1989, on the date such
employment is terminated after he has completed 7 years of vested service
under such Section 4; or
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<PAGE> 50
(e) on the date such Participant's employment with an Employer or a
Related Corporation is terminated under any other circumstances.
The date upon which a Participant ceases to be such is hereinafter referred to
as his "Settlement Date", and written notice thereof shall be given promptly by
his Employer to the Committee. Notwithstanding anything to the contrary
contained in this Plan, on his attainment of age 65 a Participant's right to
receive distribution of the balance of his Separate Accounts as of his
Settlement Date, in accordance with the provisions of this Article XI, shall be
fully vested and nonforfeitable.
2. VESTING SCHEDULE. Except as provided otherwise in the last sentence of
this Section 2, a Participant whose employment with an Employer or a Related
Corporation terminates in accordance with paragraph (e) of Section 1 of this
Article XI shall have a vested interest in his Employer Regular accounts and
Employer Matching accounts equal to a percentage determined in accordance with
the applicable schedule set forth below.
(a) If the Participant's Settlement Date under such paragraph
(e) occurred prior to October 1, 1989, or he does not complete an
Hour of Service on or after such date, the following schedule shall
apply:
<TABLE>
<CAPTION>
YEARS OF VESTED SERVICE PERCENTAGE
----------------------- ----------
<S> <C>
Less than three 0
Three but less than four 30
Four but less than five 40
Five but less than six 50
Six but less than seven 60
Seven but less than eight 70
Eight but less than nine 80
Nine but less than ten 90
Ten 100
</TABLE>
(b) Effective October 1, 1989, if the Participant completes
an Hour of Service on or after such date and his Settlement Date under
such paragraph (e) occurs on or after October 1, 1989, the Participant
shall have a 100% vested interest in his Employer Matching account and
shall have a vested interest in his Employer Regular account
determined in accordance with the following schedule:
44
<PAGE> 51
<TABLE>
<CAPTION>
YEARS OF VESTED SERVICE PERCENTAGE
----------------------- ----------
<S> <C>
Less than three 0
Three but less than four 30
Four but less than five 40
Five but less than six 60
Six but less than seven 80
Seven 100
</TABLE>
Notwithstanding the foregoing provisions of Sections 1 and 2 of this Article XI,
the vested interest of each person who was a Participant on the day immediately
prior to the effective date of this Plan shall not on such date be less than his
vested interest under the Plan as in effect on the day immediately prior to such
date. The portion of benefits of Employees of Advanced Structures, Inc., under
the Advanced Structures, Inc., 401(k) Plan which was not fully vested as of
September 30, 1995, shall thereafter be subject to the above schedule 2(b) for
all periods of service beginning October 1, 1995. Also notwithstanding the
foregoing provisions of Sections 1 and 2 of this Article XI, the vested interest
of each person who was a Participant and employed by an Employer on December 31,
1998, shall be 100% in all of his Employer Regular Accounts and Employer
Matching Accounts. In addition, effective January 1, 1999, if the Participant
completes an Hour of Service on or after such date and his Settlement Date under
Section 1 of this Article XI occurs on or after January 1, 1999, the Participant
shall have a 100% vested interest in his Employer Matching account and in his
Employer Regular Account.
3. DISTRIBUTION. As of a Participant's Settlement Date, and after notice
thereof has been given as provided in Section 1 of this Article XI, all or a
portion of the balance of each of the Participant's Separate Accounts shall
become available for distribution pursuant to Section 6 of this Article XI, as
follows:
(a) In the event such Participant's Settlement Date occurs under the
conditions specified in paragraph (a), (b), (c), or (d) of Section 1 of
this Article XI, the entire balance of each of his Separate Accounts as of
such Settlement Date shall become available for
45
<PAGE> 52
distribution.
(b) In the event such Participant's Settlement Date occurs under the
conditions stated in paragraph (e) of Section 1 of this Article XI,
(i) that portion of the balances of his Employer Regular
account and Employer Matching account which shall be determined in
accordance with the vesting schedule set forth in Section 2 of this
Article XI shall become available for distribution; and
(ii) the entire balances of his Deferred Compensation
account-A, Deferred Compensation account-B, and Rollover account as of
such Settlement Date shall become available for distribution.
4. YEARS OF VESTED SERVICE. For the purpose of applying the vesting
schedule set forth in Section 2 of this Article XI, a Participant shall be
credited with a year of vested service for each Plan Year during which he
completes at least 1,000 Hours of Service; provided, however, that service which
the Participant completed prior to a Break in Service shall not be included in
determining a Participant's years of vested service unless either (i) the
Participant had a portion of his Employer Regular account, Employer Matching
account, or Deferred Compensation account-B credited to his account as a result
of his Break in Service, or (ii) the number of consecutive Plan Years in which
he had a Break in Service is less than the greater of five or the aggregate
number of years of vested service which he had when his Break in Service
commenced. Notwithstanding the foregoing provisions of this Section 4, however,
in no event shall any years of vested service be taken into account for purposes
of determining a Participant's vested interest under the Plan by reason of
amendments made to this Section 4 to comply with the Retirement Equity Act of
1984, if such years of vested service would not have been taken into account for
such purpose on September 30, 1985, under the provisions of this Section 4 in
effect on such date.
5. ELECTION OF FORMER SCHEDULE. In the event the Company adopts an
amendment to the Plan that directly or indirectly affects the computation of a
Participant's nonforfeitable interest in his Employer Regular account, Employer
Matching account, or Deferred Compensation account-
46
<PAGE> 53
B, any Participant with three or more years of vested service shall have a right
to have his nonforfeitable interest in such Separate Accounts continue to be
determined under the vesting schedule in effect prior to such amendment rather
than under the new vesting schedule, unless the nonforfeitable interest of such
Participant in such Separate Accounts under the Plan, as amended, at any time,
is not less than such interest determined without regard to such amendment. Such
Participant shall exercise such right by. giving written notice of his exercise
thereof to the Company within 60 days after the latest of (i) the date he
received notice of such amendment from the Company, (ii) the effective date of
the amendment, or (iii) the date the amendment is adopted. Notwithstanding the
foregoing provisions of this Section 5, the vested interest of each Participant
on the effective date of such amendment shall not be less than his vested
interest under the Plan as in effect immediately prior to the effective date
thereof.
6. DISTRIBUTION. The Trustee shall be directed to make distribution to
or for the benefit of the former Participant or his Beneficiary, as the case may
be, from his interest in the Investment Funds which, on any date, shall be equal
to the vested balance in his accounts as of such date. Except as provided
otherwise in Article XXII of the Plan, distribution shall be made in the form of
a single sum cash payment; or a distribution of whole shares of common stock of
the Company, with the balance of the distribution made in a single sum, cash
payment. In addition, the former Participant or Beneficiary may elect
distribution of cash, or a combination of cash and whole shares of common stock
of the Company, in a series of installments over a period not in excess of the
normal life expectancy of the distributee, such installments to be equal in
amount except as necessary to adjust for any net earnings of and changes in the
market value of the Investment Funds. Distribution under any such method shall
be made or commenced as soon as reasonably practicable after the former
Participant's Settlement Date, but in no event later than 60 days after the
47
<PAGE> 54
latest of the close of the Plan Year in which (a) the Participant attains age
65, (b) the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan occurs, or (c) the Participant terminates
employment; provided, however, that at the election of the Participant the
Trustee shall defer making or commencing distribution until the earlier of a
specified date or the date referred to in Section 2 of Article XX. In the event
that an amount is credited to the account of a former Participant after his
Settlement Date in accordance with Section 1, 2, or 3 of Article X, the Trustee
shall make or commence distribution to the former Participant or his
Beneficiary, as the case may be, as soon as reasonably practicable after such
amount is credited, subject to the deferral provision set forth above.
Notwithstanding the foregoing, commencing with the Plan Year beginning October
1, 1997, (i) if the amount distributable to a former Participant is in excess of
$5,000 (or was at the time of any distribution after September 30, 1997; or was
in excess of $3,500 prior to October 1, 1997) and the former Participant has not
attained age 65, no distribution shall be made to such former Participant
without his written consent, and (ii) if the amount distributable to a former
Participant is $5,000 or less (and did not exceed $3,500 at the time of any
distribution prior to the Plan Year beginning October 1, 1997; or did not exceed
$5,000 for Plan Years beginning on and after October 1, 1997), such interest
shall be distributed as a lump sum as soon as reasonably practicable following
his Settlement Date. Distributions shall also be made in accordance with and
subject to Articles XX and XXII.
7. DISPOSITION OF NON-VESTED AMOUNTS. In the case of a Participant
whose Settlement Date occurs under the conditions specified in paragraph (e) of
Section 1 of this Article XI, any non-vested amounts in the Participant's
Employer Regular account that are not credited to his account following the
occurrence of his Settlement Date shall be disposed of as follows:
(a) In the event that the former Participant receives
distribution of his entire account (including a deemed distribution)
prior to the end of the second Plan Year
48
<PAGE> 55
beginning on or after his Settlement Date, the non-vested balance
remaining in the Participant's Employer Regular account will be treated
as a forfeiture as of the date such distribution is made, at which time
the Participant's Employer Regular account shall be closed. If there is
no vested amount credited to the Participant's account at the end of
the second Plan Year beginning on or after his Settlement Date, there
shall then be a deemed distribution of the Participant's balance of his
account.
(b) In the event that paragraph (a) is not applicable, the
non-vested balance remaining in the Participant's Employer Regular
account will continue to be held in such account and will not be
treated as a forfeiture until the last day of the Plan Year in which
the Participant incurs his fifth consecutive Break in Service. In the
event that such a Participant returns to employment with an Employer or
a Related Corporation prior to incurring five consecutive breaks in
service, his accounts, determined as of the Valuation Date next
following his date of rehire, shall be recredited as of such Valuation
Date to restore his Employer Regular account, Employer Matching
account, Deferred Compensation account-A, Deferred Compensation
account-B, and Rollover account to the same amounts previously existing
in such Separate Accounts, less any distributions.
Whenever the interest of a Participant or former Participant in his Employer
Regular account is either forfeited or otherwise deemed a forfeiture under the
provisions of the Plan with respect to a Plan Year, the portion of the
forfeiture attributable to the Employer Regular account, as of the last day of
such Plan Year, shall be applied as set forth in Section 2 of Article X.
8. EFFECT OF COMMITTEE'S DETERMINATION. In exercising its authority
under this Article XI, the Committee shall act in such manner as it shall in
good faith determine will most adequately and fairly meet the needs of each
former Participant or Beneficiary, as the case may be. No authority shall be
exercised in such manner as to discriminate between any class or group of
Participants. The Committee's determination of all questions which may arise
under this Article XI (if made in accordance with the standards prescribed
herein) shall be conclusive upon all persons claiming to have any interest
hereunder. In making any determinations hereunder, the Committee may rely upon
any signed statement which the Participant files with it.
9. REEMPLOYMENT OF FORMER PARTICIPANT . If a former Participant is
re-employed by an Employer or by any Related Corporation, he shall be treated as
a new employee for all purposes of
49
<PAGE> 56
this Plan, subject to the provisions hereof relating to crediting years of
service and years of vested service. All or part of any distributions which are
otherwise payable hereunder by reason of his former participation in the Plan
shall be suspended during the period of such reemployment, or until the Plan is
terminated, whichever first occurs, at which time payment shall be resumed in
accordance with any of the methods provided in Section 6 of this Article XI.
10. RESTRICTIONS ON ALIENATION. Except as provided in Section
401(a)(13)(B) of the Code relating to qualified domestic relations orders, no
right or interest under the Plan at any time shall be subject in any manner to
anticipation, alienation, assignment (either at law or in equity), encumbrance,
garnishment, levy, execution, or other legal or equitable process. No person
shall have power in any manner to anticipate, transfer, assign (either at law or
in equity), alienate, or subject to attachment, garnishment, levy, execution, or
other legal or equitable process, or in any way encumber his rights or interests
under the Plan, and any attempt to do so shall be void.
11. FACILITY OF PAYMENT. In the event that it shall be found that any
person to whom an amount is payable hereunder is incapable of attending to his
financial affairs because of any mental or physical condition, including the
infirmities of advanced age, such amount (unless prior claim therefor shall have
been made by a duly qualified guardian or other legal representative) may, in
the discretion of the Committee, be paid to another person for the use or
benefit of the person found incapable of attending to his financial affairs or
in satisfaction of legal obligations incurred by or on behalf of such person.
The Trustee shall make such payment only upon receipt of written instructions to
such effect from the Committee. Any such payment shall be charged to the account
of the person found incapable of attending to his financial affairs and shall be
a complete discharge of any liability therefor under this Plan.
50
<PAGE> 57
12. BUY BACK OF FORFEITED AMOUNTS. A Participant who receives a
distribution on account of a Settlement Date under the conditions specified in
paragraph (e) of Section 1 of this Article XI, and who, as a result thereof,
forfeits all or a portion of the amounts credited to his Employer Discretionary
account, shall have such forfeited amounts recredited to his Employer
Discretionary account upon his subsequent resumption of employment covered under
the Plan, without adjustment for interim gains or losses experienced by the
Investment Funds, provided that he repays to the Plan the full amount of the
distribution he received as a result of his prior Settlement Date, and provided,
further, that such repayment occurs no later than the earlier of five years
after the date of the Participant's resumption of employment covered under the
Plan or the time when the Participant has incurred five consecutive one year
breaks in service following the date of the distribution. Funds needed in any
Plan Year to recredit the Separate Account of a reemployed Participant with the
amount of prior forfeitures in accordance with the preceding sentence, to the
extent not provided by his Employer by way of a separate Plan contribution,
shall first come from forfeitures that arise during such Plan Year, to the
extent sufficient, and shall then come from additional Employer contributions in
such Plan Year.
13. DISTRIBUTION UPON CERTAIN EVENTS . Notwithstanding any provision to
the contrary, distribution of a Participant's interest under the Plan may be
made, in accordance with the provisions of Section 6 of Article XI, upon the
occurrence of one of the following events:
(a) The termination of the Plan without establishment or
maintenance of another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code).
(b) The disposition by an Employer of substantially all of the
assets (within the meaning of Section 409(d)(2) of the Code) used by
such Employer in a trade or business of such Employer, but only with
respect to an employee who continues employment with the corporation
acquiring such assets.
(c) The disposition by an Employer of such Employer's interest
in a
51
<PAGE> 58
subsidiary (within the meaning of Section 409(d)(3) of the Code), but
only with respect to an employee who continues employment with such
subsidiary.
An event shall not be treated as described in this Section 14 with respect to
any employee unless the employee receives a lump sum distribution by reason of
the event. For purposes of this Section 14, the term "lump sum distribution" has
the meaning given such term by Section 402(e)(4) of the Code, without regard to
clauses (i), (ii), (iii), and (iv) of subparagraph (A), subparagraph (B), or
subparagraph (H) thereof. An event shall not be treated as described in
paragraph (b) or (c) of this Section 14 unless the transferor corporation
continues to maintain the Plan after the disposition and the purchaser does not
maintain the Plan after the disposition. Moreover, a disposition may not be made
pursuant to paragraph (b) or (c) of this Section 14 except in connection with
the disposition that results in the employee's transfer to the purchaser and
generally must be made by the end of the second calendar year after the calendar
year in which the disposition occurred.
ARTICLE XII
INSURANCE CONTRACTS
-------------------
1. PURCHASE OF CONTRACTS. Effective October 1, 1995, no additional
investments shall be made in life insurance contracts hereunder.
2. PAYMENT OF PREMIUMS. The Trustee, upon written instructions from the
Committee, shall pay each premium on any such contract or contracts held for a
Participant and shall charge such premium payment to his Discretionary Regular
account. The Trustee shall be under no obligation to pay any premium, however,
unless there are sufficient funds available from the interest of such
Participant in the Investment Funds to make such payment. Each contract shall
provide that all dividends and other credits payable thereunder, if any, shall
be applied in reduction of premiums, except that any postmortem or termination
dividend shall be added to and become a part of the proceeds payable to the
Beneficiary under the contract.
52
<PAGE> 59
3. INSURANCE COMPANIES . No insurance company which shall have issued
any such contract shall be under any duty to see to the application of any sum
paid by it to the Trustee. No such insurance company shall be under any
obligation to ascertain whether any action taken or proposed to be taken by the
Trustee is authorized under the Plan or is subject to any authority, approval or
direction of an Employer or the Committee; nor shall any such insurance company
be under obligation to ascertain the reason for any action taken or proposed to
be taken by the Trustee. The certificate of the Trustee signed by any Vice
President or Trust Officer thereof and filed with the insurance company, may be
received by such insurance company as conclusive evidence of the authority of
the Trustee to act with respect to the matters therein contained.
4. OVERRIDING CONDITIONS AND LIMITATIONS. Notwithstanding anything to
the contrary contained in this Plan, the provisions of this Section 4 shall
govern:
(a) At no time shall the aggregate of the premiums paid for
any ordinary life or term life insurance contract or contracts upon the
life of any Participant hereunder equal or exceed the sum of his own
voluntary contributions, if any, under the Plan, and:
(i) if only ordinary life insurance contracts upon
the life of such Participant are held hereunder, 50% of the
contributions of the Employers theretofore allocated to him
under the Plan; or
(ii) if only term life insurance contracts upon the
life of such Participant are held hereunder, 25% of the
contributions of the Employers theretofore allocated to him
under the Plan.
If both ordinary life and term life insurance contracts upon the life
of any Participant are held hereunder, at no time shall the aggregate
of one-half of the premiums paid for any ordinary life insurance
contracts plus the premiums paid for any term life insurance contract
equal or exceed the sum of his own voluntary contributions under the
Plan, if any, and 25% of the contributions of the Employers theretofore
allocated to him under the Plan. In order to comply with these
limitations, the Committee shall in writing direct the Trustee to take
such action, with respect to any such contract or contracts held by it,
as the Committee shall deem advisable, including, but not limited to,
conversion to paid up basis or surrender of such contract or contracts
or any part or parts thereof.
(b) At all times each such contract, or evidence thereof, upon
the life of any Participant shall be held by the Trustee separate and
apart from the Investment Funds.
53
<PAGE> 60
The value of any such contract shall not be taken into account in
valuing the assets of the Investment Funds nor shall such value be
considered in determining the amount of a Participant's interest in the
Investment Funds.
(c) A Participant, upon 30 days written notice to the
Committee, may elect to have the purchase of insurance on his life
discontinued. Any such notice shall specify the date on which such
purchase is to be discontinued, but in no event shall any such notice
be effective with respect to premiums which already have been paid.
Upon receipt of such notice, the Committee shall in writing direct the
Trustee to surrender any contract or contracts held on the
Participant's life on the date specified in his notice. The cash
surrender value, if any, of any such contracts shall be added to the
Investment Funds when received by the Trustee, and, when added, an
amount equal to the cash surrender value, if any, shall be credited to
his Employer Discretionary account.
5. DEATH BENEFITS. Upon the death of any Participant on whose life any
contract is held hereunder, the proceeds of such contract shall be paid in
accordance with the provisions of Article IV.
6. OTHER DISTRIBUTIONS; VESTING . Upon a Participant's termination of
participation before attaining age 65 or before completing seven (ten, if he did
not complete an Hour of Service on or after October 1, 1989) years of vested
service, for any reason other than death or disability, as set forth in
paragraph (e) of Section 1 of Article XI, the former Participant shall have a
vested interest in the cash surrender value, if any, of each contract on his
life then held hereunder, which shall be the same percentage which is applied to
determine his vested interest in the balance of his Employer Discretionary
account under paragraph (b)(i) of Section 3 of Article XI.
(a) Upon a Participant's termination of participation under
any other circumstances, or in the event of a termination of the Plan,
the Participant shall have a fully vested interest in the cash
surrender value, if any, of each contract held on his life hereunder.
(b) Distribution of the vested interest of a former
Participant determined under this Section 6 shall be made in the form
of an insurance contract or contracts delivered to such former
Participant as soon as reasonably practicable, but in no event later
than the 60th day after the close of the Plan Year in which his
participation terminated; provided, however, that an amount equal in
value to any portion of the cash surrender value of any such contract
which is not vested in him shall be charged against his account and
disposed of in accordance with paragraph (d) of this Section 6; and
provided, further, that
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<PAGE> 61
if distribution of such former Participant's interest is to be deferred
beyond the date specified above, upon written instructions of the
Committee to the Trustee such interest shall be transferred to the
Investment Funds in cash, and the amount thereof shall be credited to
the former Participant's account to be distributed to or for the
benefit of the former Participant and, in the event of his death, to or
for the benefit of his Beneficiary, all in the manner specified in
Section 6 of Article XI.
(c) Any portion of the cash surrender value, if any, of any
contract held on the life of a Participant hereunder which is not
vested in him, shall be forfeited by the former Participant and
deposited by the Trustee in the Investment Funds, the amount thereof to
be treated in the same manner as other forfeitures, as provided in
Section 7 of Article XI.
(d) To implement the provisions of this Section 6, the
Committee shall in writing direct the Trustee to take such action with
respect to any contract or contracts held hereunder as the Committee
shall deem advisable, including, but not limited to, conversion to a
paid-up basis or surrender of the contract or contracts or any part or
parts thereof. In no event may any contract or contracts, or any
portion of the value thereof, be retained in the Trust after a former
Participant's Settlement Date, or after any termination of the Plan,
for the purpose of continuing life insurance protection for such former
Participant.
7. DISTRIBUTION, SALE AND SURRENDER OF CONTRACTS.
----------------------------------------------
(a) During the period October 1, 1995, through November 10,
1995, each Participant in the Plan on whose life a life insurance
contract has been purchased hereunder with funds for his Discretionary
Employer account and who, as of October 1, 1995, has been a Participant
for least five (5) years, may elect to have such contract distributed
to him as a taxable distribution. Each Participant making such election
shall either (i) pay to the Company an amount equal to 20% of the fair
market value of such contract, to satisfy the Company's federal income
tax withholding obligations with respect to such distribution, or (ii)
elect to have an additional sum distributed in a taxable distribution
from his Discretionary Employer account which, when added to the fair
market value of such contract, is equal to 20% of the sum, to be used
for such required withholding.
(b) During the period of October 1, 1995, through November 10,
1995, each Participant in the Plan on whose life a life insurance
contract has been purchased hereunder with funds from his Discretionary
Employer account (other than those held in a Hobson account under
Article XXI, Section 2), may elect to purchase the contract, for its
fair market value payable in cash, upon such terms and conditions as
established by the Committee necessary to assure exemption from
treatment as a prohibited transaction under federal law as set forth in
Prohibited Transaction Exemption 92-6.
(c) If a Participant elects not (or fails to elect) to have
his life insurance contract distributed to him pursuant to (a) above or
to purchase such contract pursuant to (b) above within the time
established by the Committee, such contract (other than those held in a
Hobson account under Article XXI, Section) shall be surrendered to its
issuer, effective October 31, 1995. The cash surrender value of such
contracts received by the
55
<PAGE> 62
Trustee upon surrender shall be added to the Investment Funds and an
amount equal to the cash surrender value of such Participant's contract
shall be credited to his Discretionary Employer account.
(d) In the event a life insurance contract is either purchased
by a Participant under (a) above or distributed to him under (b) above,
such Participant shall thereafter be the owner of such contract and
shall be responsible for the payment of all further premiums required
under its terms. No distributions shall be made from the Plan solely
for the purpose of payment of such premiums; provided, however, that
distributions may be made as otherwise set forth in the Plan.
ARTICLE XIII
WITHDRAWALS
-----------
1. WITHDRAWAL OF DEFERRED COMPENSATION CONTRIBUTIONS. Subject to the
provisions of this Section 1, a Participant may file a telephonic or Internet
request with the Trustee, not less than 30 days in advance of the date on which
it is requested to be effective, for a withdrawal, in an amount not less than
$500, from his Deferred Compensation account-A as of such date; provided,
however, that no such withdrawal shall be permitted by the Committee unless it
shall determine that such withdrawal is made on account of an immediate and
heavy financial need of the Participant and is necessary to satisfy such
financial need. A withdrawal is made on account of an immediate and heavy
financial need if and only if the withdrawal is made for:
(a) expenses for medical care described in Section 213(d) of
the Code previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in Section 152
of the Code) or necessary for these persons to obtain medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
(c) payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Participant, his
spouse, children or dependents (as defined in Section 152 of the Code);
or
(d) payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage
of the Participant's principal residence.
56
<PAGE> 63
A withdrawal will be treated as necessary to satisfy an immediate and heavy
financial need if and only if the requirements of either paragraph (1) or (2)
set forth below are met.
(e) The Committee reasonably relies upon the Participant's
representation that the need cannot be relieved:
(i) through reimbursement or compensation by
insurance or otherwise;
(ii) by reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself cause
an immediate and heavy financial need;
(iii) by cessation of Deferred Compensation
Contributions or Voluntary Contributions under the Plan; or
(iv) by other distributions or nontaxable (at the
time of the loan) loans from plans maintained by an Employer
or other employers, or by borrowing from commercial sources on
reasonable commercial terms.
(f) All of the following requirements are satisfied with
respect to the Participant:
(i) The withdrawal is not in excess of the amount of
the immediate and heavy financial need of the Participant,
provided that the amount of the need may include any amounts
necessary to pay any federal, state, or local taxes or
penalties reasonably anticipated to result from the
withdrawal;
(ii) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable loans
currently available under all plans maintained by an Employer
or any Related Corporation;
(iii) The Participant's Deferred Compensation
Contributions and Voluntary Contributions under the Plan and
the Participant's elective (Section 401(k) of the Code)
contributions and employee (after-tax) contributions under all
other plans maintained by an Employer or any Related
Corporation (other than mandatory employee contributions under
a defined benefit plan and contributions under a welfare plan,
including pursuant to Section 125 of the Code) are suspended
for twelve months after his receipt of the withdrawal; and
(iv) The Participant shall not have made or make
Deferred Compensation Contributions under the Plan and
elective (Section 401(k) of the Code) contributions under any
other plan(s) maintained by an Employer or any Related
Corporation for the Participant's taxable year immediately
following the taxable year of the withdrawal in excess of the
applicable limit under Section 402(g) of the Code for such
next taxable year less the amount of such Participant's
Deferred Compensation
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Contributions under the Plan and elective (Section 401(k) of
the Code) contributions for the taxable year of the
withdrawal.
The provisions of (c) and (d) of paragraph (2) above shall automatically be
effective if the requirements of such paragraph (2) are used to treat a
withdrawal as necessary to satisfy an immediate and heavy financial need.
Moreover, in the case of any Participant who has not attained age 59 1/2, no
such withdrawal shall exceed an amount equal to the Deferred Compensation
Contributions made on behalf of the Participant and income attributable to the
Deferred Compensation Contributions that is credited to the Participant's
account as of September 30, 1988. Any amount withdrawn by a Participant shall be
charged against his Deferred Compensation account-A as of the date such
withdrawal is paid, and shall be charged against his subaccounts thereunder in
accordance with procedures adopted by the Committee. Upon receipt of
instructions to such effect from the Committee, the Trustee shall pay such
amount to the Participant.
2. DISTRIBUTION OF DEFERRED COMPENSATION CONTRIBUTIONS AFTER ATTAINMENT
OF AGE 59 1/2. Subject to the provisions of this Section 2, a Participant who
has attained age 59 1/2 may file a telephonic or Internet request with the
Trustee for a distribution of the amount then credited to his Deferred
Compensation account-A. Such telephonic or Internet request with the Trustee
shall be processed as soon as is administratively feasible, according to the
internal policies and procedures of the Trustee. The amount distributed shall be
charged against his Deferred Compensation account-A as of the date such
distribution is paid, and shall be charged against his subaccounts thereunder in
accordance with such procedures as may be adopted by the Committee and the
Trustee. Upon receipt of instructions to such effect from the Committee, the
Trustee shall distribute such amount to the Participant. A Participant shall not
be permitted to receive a distribution under this Section 2 on more than two
occasions following attainment of age 59 1/2.
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ARTICLE XIV
THE COMMITTEE
-------------
1. MEMBERSHIP. The Company, by action of its Board of Directors, shall
appoint a Committee of at least three persons to administer the Plan as
hereinafter set forth. Upon his appointment to the Committee by the Company,
each such appointee shall become a member of the Committee by accepting his
appointment in a writing signed by him and delivered to the Company.
2. RULES AND REGULATIONS. The Committee may from time to time formulate
such rules and regulations for its organization and the transaction of its
business as it deems suitable and as are consistent with the provisions of this
Plan.
3. AUTHORITY OF COMMITTEE AND EMPLOYERS. Each of the Employers and the
Committee shall have the authority to perform the functions conferred upon it
herein, and shall have all the powers and authority which are required in
connection therewith, subject, however, to the limitations hereinafter set
forth. The Committee shall have all the powers and authority expressly conferred
upon it herein and further shall have the discretionary power and authority to
interpret and construe the Plan and to resolve any disputes arising thereunder,
subject, however, to the provisions of Section 5 of this Article XIV. The
Committee may employ such attorneys, recordkeepers, agents, and accountants as
it may deem necessary or advisable to assist it in carrying out its duties
hereunder. The Committee shall have no authority to allocate any of its powers,
authority, or responsibilities for the operation and administration of the Plan
to any other person; provided that it may establish an administrative committee
and designate personnel at each business unit to perform designated functions in
the administration of the Plan. Each Employer, the Committee, and the Trustee
are hereby designated as "named fiduciaries" of the Plan as such term is defined
in Section 402(a)(2) of the Act. The Company, by action of its Board of
Directors, may
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(a) allocate any of the powers, authority, or responsibilities
for the operation and administration of the Plan, which are retained by
it or granted by this Article XIV to the Committee, to itself, to one
or more other Employers, to the Committee, or to the Trustee; and
(b) designate a person other than itself or the Committee to
carry out any of such powers, authority, or responsibilities;
provided, however, that no powers, authority, or responsibilities of the Trustee
shall be subject to the provisions of paragraph (b) of this Section 3; and
provided, further, that no allocation or delegation by the Company of any of its
or of the Committee's powers, authority, or responsibilities to the Trustee
shall become effective unless such allocation or delegation shall first be
accepted by the Trustee in a writing signed by it and delivered to the Company.
4. ACTION OF COMMITTEE Any act authorized, permitted, or required to be
taken by the Committee under the Plan may be taken by a majority of the members
of the Committee at the time acting hereunder, either by vote at a meeting, or
in writing without a meeting. All notices, advices, directions, certifications,
approvals, and instructions required or authorized to be given by the Committee
under the Plan shall be in writing and signed by a majority of the members of
the Committee, or by such member or members as may be designated by an
instrument in writing, signed by all the members thereof and filed with the
Trustee, as having authority to execute such documents on its behalf. Subject to
the provisions of Section 5 of this Article XIV, any action taken by the
Committee which is authorized, permitted, or required under the Plan shall be
final and binding upon the parties to this Plan, all persons who have or who
claim an interest under the Plan, and all third parties dealing with an
Employer, the Committee, or the Trustee.
5. CLAIMS REVIEW PROCEDURE . Whenever the Committee decides for
whatever reason to deny, whether in whole or in part, a claim for benefits filed
by any person (hereinafter referred to as the "Claimant"), the Plan
Administrator shall transmit a written notice of the Committee's
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<PAGE> 67
decision to the claimant, which shall be written in a manner calculated to be
understood by the Claimant and contain a statement of the specific reasons for
the denial of the claim and a statement advising the Claimant that, within 60
days of the date on which he receives such notice, he may obtain review of the
decision of the Committee in accordance with the procedures hereinafter set
forth. Within such 60-day period, the Claimant or his authorized representative
may request that the claim denial be reviewed by filing with the Plan
Administrator a written request therefor, which request shall contain the
following information:
(a) the date on which the Claimant's request was filed with
the Plan Administrator; provided, however, that the date on which the
Claimant's request for review was in fact filed with the Plan
Administrator shall control in the event that the date of the actual
filing is later than the date stated by the Claimant pursuant to this
paragraph (a);
(b) the specific portions of the denial of his claim which the
Claimant requests the Plan Administrator to review;
(c) a statement by the Claimant setting forth the basis upon
which he believes the Plan Administrator should reverse the Committee's
previous denial of his claim for benefits and accept this claim as
made; and
(d) any written material (offered as exhibits) which the
Claimant desires the Plan Administrator to examine in its consideration
of his position as stated pursuant to paragraph (c) of this Section 5.
Within 60 days of the date determined pursuant to paragraph (a) of this Section
5, the Plan Administrator shall conduct a full and fair review of the
Committee's decision denying the Claimant's claim for benefits. Within 30 days
of the date of such review, the Plan Administrator shall render its written
decision on review, written in a manner calculated to be understood by the
Claimant, specifying the reasons and Plan provisions upon which its decision was
based.
6. RESIGNATION, REMOVAL, AND DESIGNATION OF SUCCESSORS. Any member of
the Committee may at any time resign, and any member may be removed by action of
the Board of Directors of the Company. Vacancies for these or other reasons
shall be filled by appointees of the
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Board of Directors of the Company, and any such appointee shall become a member
of the Committee by accepting his appointment as provided in Section 1 of this
Article XIV. The Committee shall promptly notify the Trustee of any change in
its membership. Nothing herein contained shall be construed to prevent any
Participant or any director, officer, employee, or shareholder of an Employer
from serving as a member of the Committee, but no member of the Committee who is
a Participant shall take any part in any action relating solely to his
participation.
7. RECORDS. The Committee shall maintain records of all meetings,
proceedings, and actions held, undertaken, or performed by it, and shall furnish
to the Company such reports as it may from time to time request. The Committee
may appoint as its Secretary, to keep a record of its meetings, proceedings, and
actions, a person who may, but need not be, a member of the Committee.
8. COMPENSATION. The members of the Committee shall receive no
compensation for their services performed as such, but any and all expenses,
including, without limitation, compensation to agents and counsel, reasonably
incurred by them in carrying out the powers and duties herein conferred, shall
be paid from the Trust property in accordance with and subject to the provisions
of Section 7 of Article XV, subject, however, to allocation among all Employers,
the share of each to be determined by the Company on a fair and equitable basis.
9. INDEMNIFICATION. In addition to whatever rights of indemnification
the members of the Committee or of the Board of Directors of an Employer, or any
other person or persons (other than the Trustee or any recordkeeper or third
party administrator) to whom any power, authority, or responsibility of the
Company or of the Committee is delegated pursuant to paragraph (b) of Section 3
of this Article XIV, may be entitled under the Articles of Incorporation,
regulations, or by-laws of an Employer, under any provision of law, or under any
other agreement, the Company
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shall satisfy, subject, however, to allocation among all Employers, the share of
each to be determined by the Company on a fair and equitable basis, any
liability actually and reasonably incurred by any such member or such other
person or persons, including expenses, attorneys' fees, judgments, fines, and
amounts paid in settlement, in connection with any threatened, pending, or
completed action, suit, or proceeding which is related to the exercise or
failure to exercise by such member or such other person or persons of any of the
powers, authority, responsibilities, or discretion provided under this Plan, or
reasonably believed by such member or such other person or persons to be
provided hereunder, and any action taken by such member or such other person or
persons in connection therewith.
10. QUALIFIED DOMESTIC RELATIONS ORDERS. The Committee shall establish
reasonable procedures to determine the status of domestic relations orders and
to administer distributions under domestic relations orders which are deemed to
be qualified orders. Such procedures shall be in writing and shall comply with
the provisions of Section 414(p) of the Code and regulations issued thereunder.
Notwithstanding anything to the contrary contained in the Plan, the Committee
shall direct the Trustee to make immediate distribution to or for the benefit of
an alternate payee under a domestic relations order that has been determined to
be a qualified order of the alternate payee's benefit under the Plan in any form
which such benefit may be paid under the Plan to the Participant or former
Participant with respect to whom such qualified order applies, but only if the
qualified order provides for the immediate distribution.
ARTICLE XV
INVESTMENT MANAGERS
-------------------
The Company at any time and from time to time, by action of its Board
of Directors, may appoint an Investment Manager to manage the investment of any
assets of the Trust. The term
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"Investment Manager" shall have the same meaning as provided in Section 3(38) of
the Act. Upon appointment of the Investment Manager in writing and the written
acknowledgment by the Investment Manager of its status as a fiduciary with
respect to the Plan and Trust, it shall have such authority as is delegated to
it by the resolution of the Board of Directors in which it is appointed,
together with such authority as thereafter from time to time may be delegated to
it by resolution of the Board of Directors. Upon the appointment of an
Investment Manager and the delegation to it of authority over investment
management as herein provided, the Trustee shall be required to follow the
written investment directions of the Investment Manager. Any such written
direction of the Investment Manager may be of a continuing nature, or otherwise,
and may be revoked or superseded by the Investment Manager at any time by notice
in writing to the Trustee.
ARTICLE XVI
AMENDMENT, TERMINATION, AND WITHDRAWAL
--------------------------------------
1. AMENDMENT. Subject to the provisions of Section 2 of this Article
XVI, the Company may at any time and from time to time, by action of its Board
of Directors, amend this Plan.
2. LIMITATION ON AMENDMENT. The Company shall make no amendment to this
Plan which shall result in the forfeiture or reduction of the interest of any
Participant, former Participant, or Beneficiary in any Investment Fund, or in
any insurance contract held hereunder; provided, however, that nothing herein
contained shall restrict the right to amend the provisions hereof relating to
the administration of the Plan and Trust. Moreover, no such amendment shall be
made hereunder which shall permit any part of the Trust property to revert to an
Employer or be used for or be diverted to purposes other than the exclusive
benefit of the Participants, former Participants, and their beneficiaries.
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<PAGE> 71
3. TERMINATION. The Company reserves the right, by action of its Board
of Directors, to terminate the Plan at any time, which termination shall become
effective upon notice in writing to the Committee and to the Trustee (the
effective date of such termination being hereinafter referred to as the
"termination date"). The Plan shall terminate automatically if there shall be a
complete discontinuance of contributions by all Employers hereunder. In the
event of the termination of the Plan by the Company, any other Employer may
continue the Plan in effect for the benefit of its own employees. In the event
of the termination of the Plan, written notice thereof shall be given to all
persons who have a vested interest hereunder and to the Trustee. Notwithstanding
anything to the contrary contained in this Plan, upon any such Plan termination,
the interest of each Participant, former Participant, and Beneficiary shall
become fully vested and nonforfeitable; and, if there is a partial termination
of the Plan, the interest of each Participant, former Participant, and
Beneficiary who is affected by such partial termination shall become fully
vested and nonforfeitable. Moreover, no such Plan termination shall affect the
continuance of distributions from any account created prior to the termination
date, in accordance with the method determined prior to such date.
Notwithstanding any termination of the Plan, the Committee shall continue in
existence for all purposes of administration until all assets of the Trust are
completely distributed by the Trustee, at which time the Trust itself shall
automatically terminate.
4. WITHDRAWAL OF AN EMPLOYER. Any Employer other than the Company may,
by action of its Board of Directors, withdraw from the Plan, such withdrawal to
be effective upon notice in writing to the Committee (the effective date of such
withdrawal being hereinafter referred to as the "withdrawal date"); and such
withdrawing Employer shall thereupon cease to be an Employer for all purposes
hereof. Moreover, a complete discontinuance by such an Employer of the
contributions otherwise required of it hereunder shall be deemed automatically
to constitute a
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withdrawal of such Employer from the Plan. Notwithstanding the foregoing
provisions of this Section 4, such withdrawing Employer may continue the Plan in
effect for the benefit of its own employees.
5. CORPORATE REORGANIZATION. The merger, consolidation, or liquidation
of the Company, any Employer, or any Related Corporation with or into the
Company, any other Employer, or any other Related Corporation shall not
constitute a termination of the Plan as to the Company or such Employer.
ARTICLE XVII
EXTENSION OF PLAN
-----------------
1. ADOPTION BY RELATED CORPORATIONS. A Related Corporation may, by
action of its Board of Directors and with the consent of the Board of Directors
of the Company, adopt the Plan as of a specified date and become an Employer
hereunder by causing an appropriate written instrument evidencing such adoption
to be executed pursuant to the authority of its Board of Directors and filed
with the Company, the Committee, and the Trustee; and notice of such adoption
shall be given by the adopting Employer to its Employees.
2. SPECIAL PROVISIONS RELATING TO PUREX POOL SYSTEMS, INC. Purex Pool
Systems, Inc., a Delaware corporation ("Purex"), became an Employer hereunder
effective upon the closing date of the transaction contemplated by the Purchase
Agreement between Purex Pool Systems, Inc. and Hydrotech Chemical Corporation
dated March 1, 1994 (the "Closing Date"). Notwithstanding any other provision of
the Plan to the contrary, for purposes of Section 1 of Article III and Section 4
of Article XI, each Employee of Purex shall receive credit for his employment
with Hydrotech Chemical Corporation prior to the Closing Date, for purposes of
determining eligibility to participate and years of vested service, as if such
employment were employment with an Employer. Moreover, notwithstanding the
provisions of Section 2 of Article III, each Employee of Purex who
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would have become a Participant as of a date no later than October 1, 1993,
based upon his service as determined under this Section 3, shall become a
Participant on the Closing Date (a "Purex Participant"). Finally,
notwithstanding the provisions of Section 3 of Article III relating to Deferred
Compensation Contribution elections, each Purex Participant may make an election
thereunder effective on the Closing Date.
3. SPECIAL PROVISIONS RELATING TO ADVANCED STRUCTURES, INC. Advanced
Structures, Inc., an Ohio corporation ("ASI"), became an Employer hereunder
effective October 1, 1995. Notwithstanding any other provision of the Plan to
the contrary, for purposes of Section 1 of Article III and Section 4 of Article
XI, each Employee of ASI shall receive credit for his employment with Advanced
Structures, Inc., a California corporation, prior to October 1, 1995, for
purposes of determining eligibility to participate and years of vested service,
as if such employment were employment with an Employer. An Employee of ASI as of
October 1, 1995 who has a benefit under the Advanced Structures, Inc. 401(k)
Plan shall be referred to herein as an "ASI Participant" and the special
distribution rules of Article XXII shall apply to such Participants.
4. SPECIAL PROVISIONS RELATING TO COMPOOL, INC. Compool, Inc., an Ohio
corporation ("Compool"), became an Employer hereunder effective October 1, 1995.
Notwithstanding any other provision of the Plan to the contrary, for purposes of
Section 1 of Article III and Section 4 of Article XI, each Employee of Compool
shall receive credit for his employment with Compool Corporation, an Ohio
corporation, prior to October 1, 1995, for purposes of determining eligibility
to participate and years of vested service, as if such employment were
employment with an Employer.
5. SPECIAL PROVISIONS RELATING TO PARAGON AQUATICS, NATIONAL POOL TILE
AND CERTAIN OTHER BUSINESS UNITS. Effective January 1, 1999, the business unit
of Pac-Fab, Inc., known as
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American Products ("American"), National Pool Tile Group, Inc. ("National
Pool"), and the Paragon Aquatics division of General Aquatics Corporation
("Paragon Aquatics") shall become Employers hereunder. Notwithstanding any other
provisions of the Plan to the contrary, for purposes of Section 1 of Article II
and Section 4 of Article XI, each Employee of Paragon Aquatics, National Pool,
and American shall receive credit for his employment with Paragon Aquatics,
National Pool, and American respectively, prior to January 1, 1999, for purposes
of determining eligibility to participate and years of vested service, as if
such employment were employment with an Employer. In addition, as of January 1,
1999, account balances of Employees of Paragon Aquatics, National Pool Tile,
American, and certain other business units (which are now divisions of the
Company) that are transferred from the General Aquatics, Inc., Employee
Retirement Benefit Plan (the "General Aquatics Plan") to the Plan shall be held
by the Trustee in separate accounts reflecting these transferred Employee
account balances (the "General Aquatics Accounts", and with respect to a
particular Participant, the "General Aquatics Benefit" (in the singular)). The
Trustee shall maintain two (2) specific sub-accounts pertaining to the General
Aquatics Accounts for each Participant with a General Aquatic Benefit, an
"Employee Post-Tax Voluntary sub-account" and an "Employee Post-Tax Matched
sub-account". Special distribution rules contained in Article XXI shall apply to
General Aquatics Accounts.
ARTICLE XVIII
TOP-HEAVY PROVISIONS
--------------------
1. APPLICABILITY. Notwithstanding any other provision to the contrary,
in the event the Plan is deemed to be a top-heavy plan for any Plan Year, the
provisions contained in this Article XVIII with respect to vesting and Employer
contributions shall be applicable with respect to such Plan Year. In the event
that the Plan is determined to be a top-heavy plan and upon a subsequent
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<PAGE> 75
determination date is determined to no longer be a top-heavy plan, the vesting
and the Employer contribution provisions in effect immediately preceding the
Plan Year in which the Plan was determined to be a top-heavy plan shall again
become applicable as of such subsequent determination date; provided, however,
that in the event such prior vesting schedule does again become applicable, the
provisions of Section 5 of Article XI and Section 2 of Article XVI shall apply
(a) to preserve the nonforfeitable accrued benefit of any Participant, former
Participant, or Beneficiary and (b) to permit any Participant with the requisite
number of years of vested service specified in Section 5 of Article XI to elect
to continue to have his nonforfeitable interest in his Employer Regular account
and his Employer Matching account determined in accordance with the vesting
schedule applicable while the Plan was a top-heavy plan.
2. TOP-HEAVY DEFINITIONS. For purposes of this Article XVIII, the
following definitions shall apply:
(a) The term "determination date" with respect to any Plan
Year shall mean the last day of the preceding Plan Year (or, in the
case of the first Plan Year of the Plan, the last day of the first Plan
Year).
(b) The term "key employee" shall mean any Participant or
former Participant who is a key employee pursuant to the provisions of
Section 416(i)(1) of the Code and any Beneficiary of such Participant
or former Participant.
(c) The term "non-key employee" shall mean any Participant who
is not a key employee.
(d) The term "permissive aggregation group" shall mean those
plans included in an Employer's required aggregation group in
conjunction with any other plan or plans of an Employer, so long as the
entire group of plans would continue to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
(e) The term "required aggregation group" shall include (i)
all plans of an Employer in which a key employee is a participant as of
the determination date or any of the four preceding Plan Years, and
(ii) all other plans of an Employer which enable a plan described in
(i) to meet the requirements of Sections 401(a)(4) or 410 of the Code.
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(f) A "super top-heavy group" with respect to a particular
Plan Year shall mean a required or permissive aggregation group that,
as of the determination date, would qualify as a top-heavy group under
the definition in paragraph (h) of this Section 2 with "90 percent"
substituted for "60 percent" each place where "60 percent" appears in
such definition.
(g) The term "super top-heavy plan" with respect to a
particular Plan Year shall mean a plan that, as of the determination
date, would qualify as a top-heavy plan under the definition in
paragraph (i) of this Section 2 with "90 percent" substituted for "60
percent" each place where "60 percent" appears in such definition. A
plan is also a "super top-heavy plan" if it is part of a super
top-heavy group.
(h) The term "top-heavy group" with respect to a particular
Plan Year shall mean a required or a permissive aggregation group if
the sum, as of the determination date, of the present value of the
cumulative accrued benefits for key employees under all defined benefit
plans included in such group and the aggregate of the account balances
of key employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all employees
covered by the plans included in such group.
(i) The term "top-heavy plan" with respect to a particular
Plan Year shall mean (i), in the case of a defined contribution plan, a
plan for which, as of the determination date, the aggregate of the
accounts (within the meaning of Section 416(g) of the Code and the
Regulations thereunder) of key employees exceeds 60 percent of the
aggregate of the accounts of all participants under the plan, with the
accounts valued as of the most recent Valuation Date under the plan
coinciding with or preceding the determination date, and (ii), in the
case of a defined benefit plan for which, as of the determination date,
the present value, as of the relevant Valuation Date, of the cumulative
accrued benefits payable under the plan (within the meaning of Section
416(g) of the Code and the Regulations thereunder) to key employees
exceeds 60 percent of the present value, as of the relevant Valuation
Date, of the cumulative accrued benefits under the plan for all
employees, with present value of accrued benefits to be determined in
accordance with the actuarial assumptions specified in such defined
benefit plan. In the case of a defined benefit plan, the accrued
benefit of a Participant other than a key employee shall be determined
under the method, if any, that uniformly applies for accrual under all
defined benefit plans maintained by the Employer or if there is no such
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code. A plan is also a "top-heavy plan" if it is
part of a top-heavy group. For purposes of this Article XVIII, the
Valuation Date" with respect to each determination date for a defined
benefit plan shall mean the most recent date on which plan costs for
minimum funding purposes have been determined. For purposes of this
paragraph (i), for any Plan Year beginning after December 31, 1984, the
accounts and accrued benefits of any employee who has not performed any
service for any Employer or a Related Corporation during the five-year
period ending on the determination date shall be disregarded.
(j) The term "Compensation" with respect to any Participant
shall mean Compensation as defined under Section 415 of the Code.
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3. ACCELERATED VESTING. In the event the Plan is determined to be a
top-heavy plan with respect to any Plan Year beginning after December 31, 1983,
a Participant shall have the nonforfeitable percentage of the balances of his
Discretionary Employer account and Employer Matching account determined no less
rapidly than by application of the following vesting schedule:
<TABLE>
<CAPTION>
YEARS OF VESTED SERVICE NONFORFEITABLE PERCENTAGE
----------------------- -------------------------
<S> <C>
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
</TABLE>
4. MINIMUM EMPLOYER CONTRIBUTION In the event the Plan is determined to
be a top-heavy plan with respect to any Plan Year beginning after December 31,
1988, the Employer contributions (other than Deferred Compensation
Contributions) and forfeitures allocated to the Separate Accounts of each
Participant who is a non-key employee who is not separated from service with the
Employers as of the end of such Plan Year shall be no less than the lesser of
(a) three percent of his Compensation or (b) the largest percentage of
Compensation that is allocated for such Plan Year to the Separate Accounts of
any key employee attributable to Employer contributions and forfeitures
(including Deferred Compensation Contributions), except that, in the event the
Plan is part of a required aggregation group, and the Plan enables a defined
benefit plan included in such group to meet the requirements of Section
401(a)(4) or 410 of the Code, the minimum allocation of Employer contributions
and forfeitures to the Separate Accounts of each nonkey employee shall be three
percent of the Compensation of such non-key employee. Any minimum allocation to
the Separate Accounts of a Participant required by this Section 4 shall be
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made without regard to the number of hours of service credited to such
Participant for the Plan Year and without regard to any social security
contribution made by an Employer on behalf of the Participant. Notwithstanding
the minimum top-heavy allocation requirements of this Section 4, in the event
that the Plan is a top-heavy plan, each non-key employee hereunder who is also
covered under a top-heavy defined benefit plan maintained by an Employer will
receive the top-heavy benefits provided for under such defined benefit plan
equal to his average Compensation during the testing period multiplied by the
lesser of two percent times years of service with the Employers or twenty
percent, all as described in such plan, in lieu of the minimum top-heavy
allocation under the Plan.
5. ADJUSTMENTS TO SECTION 415 LIMITATIONS. Notwithstanding the
provisions of paragraph (d) of Section 4 of Article X, in the event that the
Plan is a top-heavy plan and an Employer maintains a defined benefit plan
covering some or all of the employees that are covered by the Plan, the
denominators of the defined benefit and defined contribution fractions described
in paragraph (d) of Section 4 of Article X of the Plan, shall be computed by
substituting "1.0" for "1.25," and the special transition rule for the defined
contribution fraction for Plan Years ending after December 31, 1982, as
permitted by Section 415(e)(6)(B)(i) of the Code, shall be applied to the Plan
by substituting "$41,500" for "$51,875"; except that such substitutions shall
not be applied to the Plan if (a) the Plan is not a super top-heavy plan, (b)
the Employer contribution for such Plan Year allocated to a non-key employee who
participates only under one or more defined contribution plans of an Employer is
not less than four percent of such non-key employee's Compensation, and (c) the
minimum annual retirement benefit accrued by a non-key employee who participates
only under one or more defined benefit plans of an Employer or who participates
under both a defined benefit and a defined contribution plan of an Employer is
not less than the lesser of his average
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Compensation during the testing period multiplied by the lesser of three percent
times years of service with an Employer or thirty percent, all as described in
such defined benefit plans.
6. COMPENSATION TAKEN INTO ACCOUNT. The annual Compensation of any
Participant to be taken into account under the Plan during any Plan Year in
which the Plan is determined to be a top-heavy plan shall not exceed $150,000
for Plan Years beginning on or after October 1, 1994 (subject to adjustment
annually as provided in Section 401(a)(17)(B) and Section 415(d) of the Code).
ARTICLE XIX
MERGER OF ESSEF CORPORATION
TAX CREDIT EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST
1. MERGER OF THE PLANS AND TRUSTS. Effective September 30, 1987, the
ESSEF Corporation Tax Credit Employee Stock Ownership Plan (the "ESOP")
maintained under instrument made effective October 1, 1983, as amended, was
merged into and made a part of the Plan, and the trust maintained in conjunction
with the ESOP was merged into and made a part of the Trust.
2. ESOP FUND. The Trustee maintains hereunder a common trust fund known
as the ESOP Fund, which is designed to invest primarily in Shares and meet the
applicable requirements of Section 409 of the Code. The ESOP Fund shall hold and
administer such assets as were transferred from the trust maintained in
conjunction with the ESOP and the increments, proceeds, investments, and
reinvestments thereof, in accordance with the provisions of this Article XIX,
but subject to all provisions of this Plan relating to the Trust property in
general. All of the provisions of Article XV shall apply as stated therein,
except that all references to an Investment Fund shall be
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construed and applied as meaning the ESOP Fund. The interest of each Participant
in the ESOP Fund shall be an undivided interest.
3. SEPARATE ACCOUNTS. A Separate Account (hereinafter referred to as an
"ESOP account") shall be maintained in accordance with the provisions of Section
2 of Article IX in the name of each Participant who prior to September 30, 1987,
was participating in the ESOP, which shall reflect such account's pro rata share
of annual net increase or decrease in value of assets of the ESOP Fund.
4. ADMINISTRATION AND VALUATION OF ESOP ACCOUNTS. As of each Valuation
Date the Trustee shall be directed to value the assets of the ESOP Fund and
adjust all ESOP accounts in the same manner as provided in Section 5 of Article
X with respect to the Investment Funds, except that in making such valuation and
adjustment only the ESOP Fund shall be taken into consideration. Notwithstanding
the foregoing, all valuations of Shares acquired after December 31, 1986, which
are not readily tradable on an established securities market with respect to
activities carried on by the Plan shall be made by an independent appraiser
meeting requirements similar to those contained in regulations under Section
170(a)(1) of the Code. The ESOP account of a former Participant shall be charged
with the amount of any distribution made from the ESOP Fund with respect to such
former Participant as of the date of distribution. Notwithstanding the foregoing
provisions of this Section 4, Shares shall be accounted for separately from
other contributions to the Plan, and such additional sub-accounts as may be
appropriate to accomplish this purpose shall be maintained. All of the
provisions of Article XVI shall apply as stated therein, except that all
references to an Investment Fund shall be construed and applied as meaning the
ESOP Fund.
5. ADJUSTMENTS TO TAX CREDIT. Contributions under the ESOP were based
on the amount of Tax Credit. In the event that the amount of any Tax Credit
claimed by the Company on
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its consolidated federal income tax return for any taxable year under Section
41(a)(2) of the Internal Revenue Code of 1954, as amended (the "1954 Code") is
reduced as the result of a final determination of federal income tax, then the
amount of the employer contributions attributable thereto which were transferred
to the trust for the ESOP shall remain in the ESOP Fund and shall continue to be
allocated to Participants. No further contributions shall be made by the Company
pursuant to the ESOP. No allocations of contributions shall be made to ESOP
accounts, and no amendment shall be made to the Plan which changes provisions of
the Plan governing the amount, price, and timing of any grant or award of Shares
pursuant to the ESOP feature of the Plan more frequently than once every six
months, other than to comport with changes in the Code, the Act, or the rules
thereunder.
6. VESTED INTEREST OF PARTICIPANTS. Subject to the provisions of
Sections 15 and 16 of this Article XIX, the balance of each of the Participants'
ESOP accounts shall be and remain fully vested and nonforfeitable at all times.
7. ESOP FUND DIVIDENDS. All dividends earned by Shares held in the ESOP
Fund shall be reinvested by the Trustee in the ESOP Fund.
8. VOTING SHARES. Before each meeting of its shareholders and provided
that the Company does not have a registration-type class of securities, the
Company shall cause to be sent to the Trustee and to each Participant, former
Participant, and Beneficiary to whom any amount is then allocated in an ESOP
account for such person, a description of any corporate matter to be considered
at the meeting which (by law or charter) involves the voting of Shares with
respect to the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such similar transaction as
may be prescribed by federal regulations, together with a form
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requesting that each such person give to the Trustee his confidential
instructions with respect to the manner in which his proportionate interest in
the Shares held in the ESOP Fund on the relevant record date shall be voted by
the Trustee with respect to such matter. If the Company does have a
registration-type class of securities, before each meeting of its shareholders
the Company shall cause to be sent to the Trustee and to each Participant,
former Participant, and Beneficiary to whom any amount is then allocated in an
ESOP account for such person, a description of any corporate matter to be
considered at the meeting, together with a form requesting that each such person
give to the Trustee his confidential instructions with respect to the manner in
which his proportionate interest in such Shares shall be voted by the Trustee
with respect to such matter. The Trustee shall be directed to vote such Shares
as instructed upon receipt of any such instructions and be held in the strictest
confidence and shall not be divulged or released to any person, including
officers or employees of the Company, except to the extent deemed necessary by
the Trustee in order to vote such Shares. The Trustee shall be directed not to
vote any such Shares with respect to which it does not receive instructions
hereunder.
9. DISTRIBUTION. Notwithstanding the provisions of Section 3 of Article
XI, when a Participant incurs his Settlement Date, his ESOP account shall
continue to be maintained until distribution is made in accordance with the
provisions of this Plan relating to distributions generally. Distributions from
the ESOP Fund shall be made in the form of cash; provided, however, that a
former Participant or his Beneficiary shall have the right to elect, by written
notice delivered to the Committee in accordance with its rules, to receive all
or a portion of his interest in the ESOP Fund in Shares, except that an amount
equivalent in value to a fractional Share otherwise payable hereunder shall be
paid in cash. Notwithstanding anything to the contrary contained in this
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Plan, a Participant may elect to have the portion of his ESOP account
attributable to Shares acquired by the Plan after December 31, 1986, distributed
as follows:
(a) If the Participant separates from service by reason of the
attainment of age 65, death, or disability, the distribution of such
portion of the Participant's ESOP account will begin not later than one
year after the close of the Plan Year in which such event occurs,
unless the Participant otherwise elects under provisions of this Plan
other than this Section 9.
(b) If the Participant separates from service for reason other
than those enumerated in paragraph (a) above, and is not reemployed by
an Employer or a Related Corporation at the end of the fifth Plan Year
following the Plan Year of such separation from service, distribution
of such portion of the Participant's ESOP account will begin not later
than one year after the close of the fifth Plan Year following the Plan
Year in which the Participant separated from service, unless the
Participant otherwise elects under provisions of this Plan other than
this Section 9.
(c) If the Participant separates from service for a reason
other than those enumerated in paragraph (a) above, and is employed by
an Employer or a Related Corporation as of the last day of the fifth
Plan Year following the Plan Year of such separation from service,
distribution to the Participant, prior to any subsequent separation
from service, shall be only in accordance with terms of this Plan other
than this Section 9.
Distributions required under paragraphs (a), (b), and (c) of this Section 9
shall be made in substantially equal annual payments over a period of five years
unless the Participant otherwise elects under provisions of this Plan other than
this Section 9. In no event shall such distribution period exceed the period
permitted under Section 401(a)(9) of the Code. The portion of a Participant's
ESOP account attributable to Shares which were acquired by the Plan after
December 31, 1986, shall be determined in the manner described in Section 10 of
this Article XIX, unless federal regulations or administrative pronouncements of
the Internal Revenue Service otherwise require.
10. SPECIAL DIVERSIFICATION DISTRIBUTIONS. Each Qualified Participant
shall be permitted to elect distribution of 25 percent of the value of his ESOP
account attributable to Shares which were acquired by the Plan after December
31, 1986, as determined below, within 90 days after the
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last day of each Plan Year during the Participant's Qualified Election Period.
Within 90 days after the close of the last Plan Year in the Participant's
Qualified Election Period, a Qualified Participant may elect distribution of 50
percent of the value of such account. The Participant's election shall be
provided to the Company in writing and shall be effective no later than 180 days
after the close of the Plan Year to which the election applies. In the event a
Qualified Participant makes such an election, the Trustee shall be directed to
distribute (notwithstanding Section 409(d) of the Code) the portion of the
Participant's ESOP account balance that is covered by the election within 90
days after the last day of the period during which the election can be made.
Such distribution shall be subject to such requirements of Section 13 of this
Article XIX. This Section 10 shall apply notwithstanding any other provision of
this Plan other than such provisions as require the consent of the Participant
to a distribution with a present value in excess of $3,500. If the Participant
does not consent to a distribution under this Section 10, such amount shall be
retained in the Trust. Any distribution under this Section 10 shall be made
first from Shares allocated to the Participant's ESOP account at least 84 months
before the month in which the distribution occurs. For purposes of this Section
10, in determining the portion of a Participant's ESOP account attributable to
Shares which were acquired by the Plan after December 31, 1986, there shall be
disregarded the following Shares:
(a) Shares acquired by or contributed to the ESOP on or before
December 31, 1986, but allocated to Participants' accounts after that
date;
(b) Shares acquired by or contributed to the ESOP after
December 31, 1986, if with respect to such Shares a Tax Credit was
calculated with reference to Compensation paid or accrued prior to
January 1, 1987, such Shares were acquired or contributed within the
time period provided in Section 404(a)(6) of the Code plus such
additional time allowed for contributions to the ESOP under Section
41(c)(2) and 41(c)(4) of the 1954 Code, and the Shares were allocated
as of a date no later than the last day of the Plan Year ending within
the Company's first taxable year ending on or after December 31, 1986;
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(c) Shares acquired after December 31, 1986, which were
purchased with contributions made to the ESOP in cash on or before
December 31, 1986, if such contributions were used to purchase Shares
within 60 days after the date of the contribution;
(d) Shares acquired after December 31, 1986, which were
purchased with earnings or dividends paid in cash on or before December
31, 1986, if such earnings or dividends were used to purchase Shares
within 60 days from the date of payment to the ESOP; and
(e) Any other Shares permitted to be disregarded for this
purpose under federal regulations or other administrative pronouncement
of the Internal Revenue Service.
Moreover, in determining the Shares subject to the diversification election
under this Section 10, it shall be presumed that Shares allocated to Separate
Accounts after December 31, 1986, consist first of those acquired or contributed
after such date. Finally, if the fair market value, determined at the Valuation
Date immediately preceding the first day on which a Qualified Participant is
eligible to make a diversification election, of the Shares acquired or
contributed to the Plan after December 31, 1986, and allocated to a Qualified
Participant's ESOP account is $500 or less, then the foregoing provisions
permitting a diversification election shall not apply with respect to such
Qualified Participant for such year. The portion of a Qualified Participant's
ESOP account subject to the diversification election in each year in the
Qualified Election Period shall be determined by computing either 25 percent or
50 percent, as the case may be, of the Shares subject to the diversification
election that have ever been allocated to his ESOP account on or before the most
recent allocation date and reducing such amount by the number of Shares
previously distributed to him pursuant to a diversification election.
11. OVERRIDING PROVISION. Notwithstanding anything to the contrary
contained in this Plan other than Section 10 of this Article XIX, no Share which
was allocated under the ESOP to a Participant may be distributed prior to the
expiration of eighty-four (84) months following the month in which such Share
was allocated to such Participant except in the case of
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(a) the death, disability or separation from service of such
Participant;
(b) a transfer of such Participant to the employment of an
acquiring employer from the employment of his Employer in the case of a
sale to the acquiring employer of substantially all of the assets used
by such Employer in a trade or business conducted by it; or
(c) a disposition of an Employer's interest in a subsidiary
when such Participant continues employment with the subsidiary so
disposed.
In the event paragraph (b) or (c) of this Section 11 is applicable, each such
Participant shall be deemed to have incurred his Settlement Date on the date
such event occurs. For purposes of this Section 11, appropriate records showing
the dates on which allocations of Shares are made shall be maintained by the
Committee (or if the Committee so elects, by such other person or entity as the
Committee shall designate).
12. RIGHT OF FIRST REFUSAL. At any time when Shares are not publicly
traded, all Shares distributed by the Trustee may, as determined by the Company,
be subject to a "right of first refusal." Such a "right" shall provide that
prior to any subsequent transfer, the Shares must first be offered by written
offer to the Trust, and then, if refused by the Trust, to the Company. In the
event that the proposed transfer constitutes a gift or other such transfer at
less than fair market value, the price per share shall be the fair market value
determined as of the Valuation Date coinciding with or immediately preceding the
date offered to the Trust. In the event of a proposed purchase by a prospective
bona fide purchaser, the offer to the Trustee and the Company shall be at the
greater of fair market value or at the price offered to be paid by the
prospective bona fide purchaser; provided, however, that the Trust shall not
purchase any Shares when the purchase price of such Shares is in excess of fair
market value. The Trust or Company, as the case may be, may accept the offer at
any time during a period not exceeding 14 days after receipt of such offer.
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13. "PUT" OPTION. A former Participant or a Beneficiary, or a donee or
heir of a former Participant or Beneficiary, shall be granted at the time that
Shares not readily tradable on an established market are distributed to him, an
option to "put" such Shares to the Company; provided, however, that the Trust
shall have the option to assume the rights and obligations of the Company at the
time the "put" option is exercised. A "put" option shall provide that, for a
period of 60 days (excluding any period during which the Company is prohibited
from honoring the "put" option by, applicable federal or state law) after such
Shares are distributed by the Trustee to a former Participant or Beneficiary,
the former Participant or Beneficiary, or his donee or heir, shall have the
right to have the Company purchase such Shares at their fair market value, and
if the "put" option is not exercised within such sixty (60) day period, it may
be exercised during an additional period of at least sixty (60) days commencing
on the first anniversary of the date such Shares were distributed by the
Trustee. For purposes of this Section 13, fair market value shall be based on
the fair market value determined as of the Valuation Date coinciding with or
immediately preceding the date of exercise. Such "put" option shall be exercised
by notifying the company in writing. If the entire balance to the credit of the
Participant is distributed within one taxable year of the Participant or his
Beneficiary, payment of the fair market value of the Participant's ESOP account
balance shall be made no less rapidly than in five substantially equal annual
payments over a period beginning not later than 30 days after the exercise of
the "put," and adequate security shall be provided and reasonable interest paid
on amounts not paid after 30 days. If the distribution of the Participant's ESOP
account is part of an installment distribution, payment of the fair market value
of the Shares repurchased shall be made no later than 30 days after exercise of
the "put."
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14. OTHER OPTIONS. Except as otherwise provided in this Article XIX, no
person may be required to sell Shares to the Company, nor may the Trust enter
into an agreement which obligates the Trust to purchase Shares upon the death of
a shareholder.
15. NONTERMINABLE PROTECTION AND RIGHTS. Except as provided in Sections
12 and 13 of this Article XIX, or as otherwise required by applicable law, no
Share may be subject to put, call, or other option, or buy-sell or similar
arrangement while held by or when distributed from the Trust, whether or not the
Plan is an employee stock ownership plan. Moreover, if the Trustee holds or
distributes any Shares which are not publicly traded without restriction when
distributed or which cease to be so traded within the otherwise applicable "put"
option periods, and the Plan is not then an employee stock ownership plan, the
"put" option described in section 13 of this Article XIX shall be nonterminable
with respect to such Shares; provided, however, that in the case of such Shares
ceasing to be publicly traded without restriction within the otherwise
applicable "put" option periods, the Company shall notify each distributes
described in such Section 13 who is then holding any such Shares in writing on
or before the tenth day after the date the Shares cease to be so traded that for
the remainder of such period or periods such Shares are subject to a "put"
option and the terms thereof, all as set forth in such Section 13; and provided,
further, that the number of days between such tenth day and the date on which
notice is actually given, if later than on the tenth day, shall be added to the
duration of the "put" option.
16. EXPENSES. All expenses of administering the Employer Stock Fund
shall be paid by the Employer Stock Fund as a general charge thereon, as the
Committee shall from time to time direct, to the extent that such expenses do
not exceed the lesser of:
(a) the sum of
(i) ten percent of the first $100,000 of the
dividends paid to the Plan with respect to Shares during such
Plan Year, and
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(ii) five percent of the amount of such dividends in
excess of $100,000, or
(b) $100,000.
All such expenses not so paid shall be paid by the Company, subject, however, to
allocation among all Employers, the share of each to be determined by the
Company on a fair and equitable basis.
17. GENERAL PROVISIONS. All of the provisions of Article XVI shall
apply with respect to the Employer Stock Fund as stated therein, except that all
references to an Investment Fund shall be construed and applied as meaning the
Employer Stock Fund.
18. DEFINITIONS. For purposes of this Article XIX, the following words
and phrases as used herein shall have the following meanings, unless a different
meaning is plainly required by the context:
(a) The "Shares" shall mean common stock issued by the Company
which is readily tradable on an established securities market, or, if
there is no such common stock, the term shall mean common stock of the
Company with voting power and dividend rights no less favorable than
the voting power and dividend rights of other common stock of the
Company.
(b) The "Tax Credit" shall mean the employee stock ownership
tax credit that is described in Section 41(a)(2) of the 1954 Code and
that is contingent upon meeting the requirements of Section 41(c)(1) of
the 1954 Code.
(c) A "Qualified Participant" shall mean a Participant or
former Participant who has attained age 55 and who has completed at
least ten years of participation in the Plan.
(d) The "Qualified Election Period" shall mean the five Plan
Year period beginning with the later of
(i) the Plan Year after the Plan Year in which the
Participant attains age 55; or
(ii) the Plan Year after the Plan Year in which the
Participant first becomes a Qualified Participant.
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ARTICLE XX
MINIMUM DISTRIBUTION REQUIREMENTS
---------------------------------
1. OVERRIDING PROVISION. The requirements of this Article XX shall
apply to any distribution of a Participant's interest and will take precedence
over any inconsistent provisions of the Plan. Unless otherwise specified, the
provisions of this Article XX apply to calendar years beginning after December
31, 1984. All distributions required under this Article XX shall be determined
and made in accordance with the Treasury Regulations under Section 401(a)(9) of
the Code, including the minimum distribution incidental benefit requirement of
Treasury Reg. sec. 1.401(a)(9)-2.
2. REQUIRED BEGINNING DATE. The entire interest of a Participant must
be distributed or begin to be distributed no later than the Participant's
required beginning date, otherwise in accordance with the provisions of Section
6 of Article XI.
3. LIMITS ON DISTRIBUTION PERIODS. As of the first distribution
calendar year, distributions, if not made in a single lump-sum payment, may only
be made over one of the following periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a Beneficiary,
(c) a period certain not extending beyond the life expectancy
of the Participant, or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Beneficiary.
4. DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies after
distribution of his interest has begun, the remaining portion of such interest
will continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
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5. DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies before
distribution of his interest begins, distribution of the Participant's entire
interest shall be completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (a) or (b) below:
(a) if any portion of the Participant's interest is payable to
a Beneficiary, distributions may be made over a period certain not
greater than the life expectancy of the Beneficiary commencing on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died;
(b) if the Beneficiary is the Participant's surviving spouse,
the date distributions are required to begin in accordance with (a)
above shall not be earlier than the later of (1) December 31 of the
calendar year immediately following the calendar year in which the
Participant died and (2) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this Section 5 by the
time of his death, the Participant's Beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of the calendar year
in which distributions would be required to begin under this Section 5, or (2)
December 31 of the calendar year which contains the fifth anniversary of the
date of death of the Participant. If the Participant has no Beneficiary, or if
the Beneficiary does not elect a method of distribution, distribution of the
Participant's entire interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.
6. DEATH OF SURVIVING SPOUSE. For purposes of Section 5 of this Article
XX, if the surviving spouse dies after the Participant, but before payments to
such spouse begin, the provisions of Section 5 of this Article XX, with the
exception of paragraph (b), shall be applied as if the surviving spouse were the
Participant.
7. AMOUNTS PAYABLE TO CHILD. For purposes of Sections 4 and 5 of this
Article XX, any amount paid to a child of the Participant will be treated as if
it had been paid to the surviving
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spouse if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
8. COMMENCEMENT DATE. For the purposes of Sections 4, 5, 6, and 7 of
this Article XX, distribution of a Participant's interest is considered to begin
on the Participant's required beginning date (or, if Section 6 of this Article
XX is applicable, the date distribution is required to begin to the surviving
spouse pursuant to Section 5 of this Article XX).
9. DEFINITIONS. For purposes of this Article XX, the following
definitions and other provisions shall apply:
(a) APPLICABLE LIFE EXPECTANCY. The life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or Beneficiary) as of the Participant's (or Beneficiary's)
birthday in the applicable calendar year reduced by one for each
calendar year which has elapsed since the date life expectancy was
first calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
(b) BENEFICIARY. The individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of the
Code and the regulations thereunder.
(c) DISTRIBUTION CALENDAR YEAR. A calendar year for which a
minimum distribution is required. For distributions beginning before
the Participant's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which contains
the Participant's required beginning date. For distributions beginning
after the Participant's death, the first distribution calendar year is
the calendar year in which distributions are required to begin pursuant
to Sections 4, 5, 6, 7, and 8 of this Article XX.
(d) LIFE EXPECTANCY. Life expectancy and joint and last
survivor expectancy are computed by use of the expected return
multiples in Tables V and VI of Treasury Reg. ss.1.72-9.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in Section 5(b) of this Article XX) by
the time distributions are required to begin, life expectancies shall
be recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse Beneficiary may not be recalculated.
(e) REQUIRED BEGINNING DATE.
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(i) GENERAL RULE. Effective for the Plan Year
beginning October 1, 1997, the required beginning date of a
Participant is the later of the April 1 of the calendar year
following the calendar year in which the participant attains
age 70 1/2 or terminates employment except that benefit
distributions to a 5-percent owner must commence by the April
1 of the calendar year following the calendar year in which
the participant attains age 70 1/2. In addition, the
"Preretirement Age 70 1/2 Distribution Option" (as described
in Subsection (iii)(B) below) is only eliminated with respect
to employees who reach age 70 1/2 in or after a calendar year
that begins after the later of December 31, 1998, or the
adoption date of this amendment and restatement.
(ii) TRANSITIONAL RULE. The required beginning date
of a Participant who attains age 70 1/2 before January 1,
1988, shall be determined in accordance with (1) or (2) below:
(1) NON-5-PERCENT Owners. The required
beginning date of a Participant who is not a
"5-percent owner" (as defined in (iii) below) is the
first day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
(2) 5-PERCENT OWNERS. The required beginning
date of a Participant who is a 5-percent owner during
any year beginning after December 31, 1979, is the
first day of April following the later of:
(A) the calendar year in which the
Participant attains age 70 1/2,
or
(B) the earlier of the calendar year
with or within which ends the Plan Year in
which the Participant becomes a 5-percent
owner, or the calendar year in which the
Participant retires.
The required beginning date of a Participant who is
not a 5-percent owner who attains age 70 1/2 during
1988 and who has not retired as of January 1, 1989,
is April 1, 1990.
(iii) DEFINED TERMS
(A) "5-PERCENT OWNER". A Participant is
treated as a 5-percent owner for purposes of this
paragraph (e) if such Participant is a 5-percent
owner as defined in Section 416(i) of the Code
(determined in accordance with Section 416 of the
Code but without regard to whether the Plan is
top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner
attains age 66 1/2 or any subsequent Plan Year.
(B) "PRERETIREMENT AGE 70 1/2 DISTRIBUTION
OPTION" is an optional form of benefit under which
benefits payable in a particular distribution form
(including any modifications that may be elected
after
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benefit commencement) commence at a time during the
period that begins on or after January 1 of the
calendar year in which an employee attains age 70 1/2
and ends April 1 of the immediately following
calendar year.
(iv) Once distributions have begun to a 5-percent
owner under this paragraph (e) they must continue to be
distributed, even if the Participant ceases to be a 5-percent
owner in a subsequent year.
10. TRANSITIONAL RULE. Notwithstanding the other requirements of this
Article XX, distribution on behalf of any Participant, including a 5-percent
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(a) The distribution by the Trust is one which would not have
disqualified the Trust under Section 401(a)(9) of the Code as in effect
prior to amendment by the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the Participant whose interest in the Trust
is being distributed or, if the Participant is deceased, by a
Beneficiary of such Participant.
(c) Such designation was in writing, was signed by the
Participant or the Beneficiary, and was made before January 1, 1984.
(d) The Participant had accrued a benefit under the Plan as of
December 31, 1983.
(e) The method of distribution designated by the Participant
or the Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in the
case of any distribution upon the Participant's death, the
beneficiaries of the Participant listed in order of priority.
A distribution upon death will not be covered by this transitional rule unless
the information in the designation contains the required information described
above with respect to the distributions to be made upon the death of the
Participant. For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Participant or the Beneficiary to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfied the
requirements in paragraphs (a) and (e) of this Section 10 of this Article
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XX. If a designation is revoked any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and the regulations thereunder. If
a designation is revoked subsequent to the date distributions are required to
begin, the Trust must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Section 401(a)(9) of the Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution incidental benefit
requirements in Treasury Reg. ss.1.401(a)(9)-2. Any changes in the designation
will be considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a revocation of
the designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation, directly
or indirectly (for example, by altering the relevant measuring life). In the
case in which an amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 of Treasury Reg. sec. 1.401(a)(9)-1 shall
apply.
ARTICLE XXI
SPECIAL DISTRIBUTION RULES
--------------------------
Distribution of a Participant's ASI entire interest ("ASI Benefit"),
and a Participant's General Aquatics Benefit, shall commence in accordance with
the provisions of Section 6 of Article XI, except that, effective October 1,
1997, a former Participant whose amount distributable under the Plan exceeds
$5,000, may elect to defer commencement of his ASI Benefit and General Aquatics
Benefit until such time as distribution is required in accordance with Section
401(a)(9) of the Code. Notwithstanding any provision of the Plan to the
contrary, unless the amount distributable to a former Participant under the Plan
does not exceed $5,000 (and did not at the time
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of any prior distribution before October 1, 1997, exceed $3,500), distribution
of a former Participant's ASI Benefit, or General Aquatics Benefit, as the case
may be, shall be made in accordance with the following provisions:
(a) A former Participant who is not married shall receive
distribution of his ASI Benefit or General Aquatics Benefit, in the
form of an annuity for life ("Life Annuity"), which shall be provided
through the purchase with the ASI Benefit or General Aquatics Benefit
of a single premium, nontransferable annuity contract from a legal
reserve life insurance company authorized to do business in the State
of Ohio, unless another method of distribution under Section 6 of
Article XI is elected pursuant to a qualified election within the
90-day period ending on the date benefit payments would commence.
(b) A former Participant who is married shall receive
distribution of his General Aquatics Benefit or ASI Benefit in the form
of an annuity for the life of the former Participant with a survivor
annuity for the life of the former Participant's spouse that is equal
to 50% of the amount of the annuity payable during the joint lives of
the former Participant and the spouse ("50% Joint and Survivor
Annuity"), which shall be provided through the purchase with the
General Aquatics Benefit or ASI Benefit of a single premium,
nontransferable annuity contract from a legal reserve life insurance
company authorized to do business in the State of Ohio, unless another
method of distribution under Section 6 of Article XI is elected
pursuant to a qualified election within the 90-day period ending on the
date benefit payments would commence.
(c) A qualified election for purposes of paragraphs (a), (b)
and (e) of this Article XXII means a written waiver of the Life Annuity
or 50% Joint and Survivor Annuity or Pre-retirement Survivor Annuity,
if applicable, and designation of an alternative method of
distribution, which waiver has been consented to by the Participant's
spouse, if any, and the consent acknowledges the effect of the waiver,
has been witnessed by a Plan representative or Notary Public, and is
limited to a benefit for a specific alternate Beneficiary or to a
specific form of benefit. A written waiver by a Participant without
spousal consent will constitute a qualified election if the Participant
establishes to the satisfaction of a Plan representative that spousal
consent cannot be obtained either because there is no spouse or because
the spouse cannot be located. Any spousal consent to a waiver of a 50%
Joint and Survivor Annuity and Pre-retirement Survivor Annuity shall be
valid only with respect to the spouse who signs the consent or, in the
case of a deemed qualified election, with respect to the designated
spouse. A Participant may revoke a prior qualified election without
spousal consent at any time before the commencement of benefits, but
any subsequent waiver shall be valid only if it satisfies the
requirements of a qualified election.
(d) Each Participant with a General Aquatics Benefit or ASI
Benefit shall be provided by the Company no less than 30 days (unless
waived by the Participant in a manner which complies with applicable
Treasury Regulations) and no more than 90 days before the commencement
of benefits a written explanation of (i) the terms and conditions of
the Life Annuity or 50% Joint and Survivor Annuity, (ii) the
Participant's right to make
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and the effect of an election to waive the Life Annuity or 50% Joint
and Survivor Annuity, (iii) the rights of a Participant's spouse, if
applicable, and (iv) the eligibility conditions and other material
features of the other methods of distribution, including the relative
values of the distribution methods.
(e) A Participant who is and has been married throughout the
one year period ending on the date of his death and who dies prior to
the commencement of distribution of his General Aquatics Benefit or ASI
Benefit shall be deemed to have elected distribution of 50% of his
General Aquatics Benefit or ASI Benefit in the form of an annuity for
the life of the surviving spouse of the Participant ("Pre-retirement
Survivor Annuity"), which shall be provided through the purchase with
50% of the General Aquatics Benefit or ASI Benefit of a single premium,
nontransferable annuity contract from a legal reserve life insurance
company authorized to do business in the State of Ohio, unless the
Participant has filed a qualified election, as defined in paragraph (c)
of this Article XXII, with the Company during the applicable election
period that has not been withdrawn; provided, however, that any General
Aquatics Benefit or ASI Benefit under the Plan that is not distributed
in the form of a Pre-retirement Survivor Annuity shall be distributed
pursuant to the qualified election of the Participant on file with the
Company or alternatively pursuant to the provisions of Article IV. The
surviving spouse may elect to have payment commence within a reasonable
period of time following the date of the Participant's death. The
applicable election period is the period which begins on the first day
of the Plan Year in which the Participant attains age 35 and ends on
the date of the Participant's death. If a Participant separates from
service prior to the first day of the Plan Year in which age 35 is
attained, the election period with respect to a Pre-retirement Survivor
Annuity shall begin on the date of separation.
(f) Each Participant with a General Aquatics Benefit or ASI
Benefit shall be provided by the Company within the applicable period a
written explanation of (i) the terms and conditions of the
Pre-retirement Survivor Annuity, (ii) the Participant's right to make
and the effect of an election to waive the Pre-retirement Survivor
Annuity, and (iii) the rights of a Participant's spouse. The term
"applicable period" means with respect to a Participant, whichever of
the following periods ends last:
(i) the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35;
(ii) a reasonable period after the individual becomes
a Participant;
(iii) a reasonable period ending after the
Pre-retirement Survivor Annuity is no longer fully subsidized;
(iv) a reasonable period ending after Section
401(a)(11) of the Code applies to the Participant;
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(v) a reasonable period after separation from service
in the case of a Participant who separates before attaining
age 35.
(g) The provisions of this Article XXII shall be effective
with respect to distributions including benefits accrued under the
General Aquatics Plan or the ASI Plan to the extent necessary to
satisfy the requirements of the Retirement Equity Act of 1984.
(h) A Participant with a General Aquatics Benefit shall be
permitted to make withdrawals of up to 100% of the Participant's
"Employee Post-Tax Voluntary sub-account" and "Employee Post-Tax
Matched sub-account", provided that any such withdrawal(s) may only
occur every Plan Year with respect to each sub-account.
(i) Any Participant with a General Aquatics Benefit who makes
a qualified election under paragraph (c) of this Article XXI shall be
paid in one of the following forms, at the election of the Participant:
(i) in a lump sum payment in cash;
(ii) by the purchase of a nontransferable activity
contract providing for monthly guaranteed income over one of
the following terms:
(A) the life of the Participant;
(B) the life of the Participant, except that
payments are guaranteed for a period not to exceed
240 months;
(C) the joint lives of the Participant and
his Beneficiary, with contingent monthly payments to
the Beneficiary equal to at least 50 percent and at
most 100 percent of the monthly payments to the
Participant; or
(D) any other term elected by the
Participant, provided that a nontransferable annuity
contract over such term can be purchased.
(j) All other provisions of the Plan shall apply to the
distribution of the Hobson Benefit and the ASI Benefit, but only to the
extent the provisions are not contrary to the provisions of this
Article XXII.
ARTICLE XXII
PARTICIPANT LOANS
-----------------
1. LOAN PROCEDURE. This ARTICLE XXII sets forth written loan procedures
and guidelines which describe the applicable legal restrictions and the terms
and conditions under which loans may be granted. All references to
"Participants" in this ARTICLE XXII shall be
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interpreted to mean participants and beneficiaries who are "parties in interest"
as defined in Section 3(14) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
2. AVAILABILITY OF LOANS. Loans shall be made available to all
Participants on a reasonably equivalent basis. Loans shall not be made available
to Highly Compensated Employees, officers or shareholders in an amount greater
than the amount made available to other Employees.
3. ADMINISTRATION OF LOANS. The Committee is authorized to administer
the Participant loan program pursuant to these procedures. The Committee may
delegate such responsibilities to other employees or to outside administrators
to perform various functions required hereunder.
4. APPLICATION FOR LOANS. Upon the application of any Participant, the
Committee, in accordance with a uniform, nondiscriminatory policy set forth in
written procedures established by the Committee, may approve a loan to such
Participant from the Participant's accounts under the Plan. All loan
applications shall be considered by the Committee within a reasonable time after
the Participant makes formal application. Each application must be received by
the Committee at least thirty (30) days in advance of the dates as of which the
loan is requested to be disbursed.
5. TERMS OF LOANS. The following terms shall apply to Plan Loans:
(a) The maximum amount of any loan made to a given Participant
shall not exceed the lesser of:
(i) Fifty Thousand ($50,000) Dollars (reduced by the
highest outstanding balance of any other loan to the
Participant from the Plan or another plan of an Employer or a
related corporation during the preceding 12 month period); or
(ii) One-half (1/2) of the Participant's
nonforfeitable interest in the Plan and all other qualified
plans maintained by the Employer.
(b) No loan in an amount less than $1,000 shall be granted to
any Participant.
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(c) Only one loan may be outstanding at any time.
(d) All loans must have a definite repayment period, be
payable through payroll deductions, and be amortized with interest on a
level basis.
6. INTEREST. All such loans shall be investments of the Trust, interest
being charged thereon at a reasonable rate determined by the Committee based on
what is customary in similar arms-length transactions in the community,
considering the adequacy and type of collateral used to secure repayment of the
loan. As of January 1, 1999, the Committee has determined that the rate of
interest to be charged shall be the prime rate of interest which is being
charged by commercial lenders at the time of granting a loan (as determined by
the Committee), plus two percentage points. At the beginning of a year, the
Committee may establish a rate of interest to be in effect for loans granted
during such year, subject to revision if the Committee determines that such rate
no longer represents the prevailing interest rate.
7. REPAYMENT OF LOANS. Any such loan shall be repaid by the Participant
in such manner as the Committee shall determine, provided that the Committee
shall require that such loan be repaid with substantially level payments of
principal and interest being made by payroll deduction, within a specified
period of time not extending beyond the earlier of (a) the Participant's
termination of employment, (b) the revocation of his payroll deduction
authorization, or (c) the fifth (5th) anniversary of the date of the loan. The
five (5) year limitation shall not apply to any loan used to acquire any
dwelling unit which within a reasonable time is to be used (determined at the
time the loan is made) as the principal residence of the Participant. In the
event of a default by a Participant on a loan made by the Plan, the Trustee may
not attach or otherwise enforce collection against such Participant's account
until such time as he would have been entitled to a distribution under the terms
of the Plan. A Participant may prepay the entire balance of the loan in one
single
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payment without the imposition of any prepayment penalty. A suspension of
repayments may be made for a period not greater than one year only during an
approved unpaid leave of absence, in accordance with IRS Prop. Reg. 1.72(p)-1
Q&A-9. Any arrearages due to such leave of absence will be required to be made
up by either the reamortization of the balance of the loan upon the
participant's return after such leave of absence, the establishment of a balloon
payment at the end of the original maturity of the loan, or extending the
maturity of the loan to a length of time no greater than five years from the
original loan disbursement date.
8. COLLATERAL. As a condition to receiving a loan, the Participant
shall be required to execute a promissory note, collateral pledge of account as
security, and related instruments, consistent with the requirements of Section
4975(d)(1) of the Internal Revenue Code for loans exempt from treatment as
prohibited transactions. The Participant seeking a loan shall also be required
to agree, upon such forms as specified by the Committee, to make repayment
through after-tax payroll deductions by the Employer. Loans under this Article
shall not be approved unless the loan(s) can be adequately secured using the
Participant's vested account balance. No more than fifty (50%) percent of the
present value of the Participant's account balance shall be used as collateral
on all loans to the Participant. No loan shall be made pursuant to this Article
to a Participant who is an ASI Participant as defined in Section 3 of Article
XVII, or to a Participant borrowing from his General Aquatics Benefit as defined
in Section 5 of Article XVII, unless, if married at the time the loan is
granted, the Participant's spouse consents, in writing, to the use of the
Participant's account balance as security for the loan and the charging of the
Participant's accounts for unpaid principal and interest in the event the loan
is declared to be in default. Any such spousal consent shall be irrevocable,
made within ninety (90) days prior to disbursement of the loan, shall
acknowledge the effect of the consent, and shall be witnessed by a Notary
Public, unless the
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Committee finds that such consent cannot be obtained because the spouse cannot
be located or because other circumstances exist as are set forth in the Internal
Revenue Code and regulations issued thereunder.
9. DIRECTED INVESTMENT BY PARTICIPANT. Any loan granted to a
Participant shall be an earmarked investment made solely for the Participant's
benefit and shall be evidenced by a separate loan account of the borrowing
Participant. Such loan account shall be funded with the principal amount of the
loan that is transferred to it from such Participant's accounts prorated.
Amounts shall be transferred ratably from each investment fund to the loan
account. All payments of principal and interest on a loan shall be made to the
loan account, which shall be closed when the loan has been repaid in full. Upon
receipt each loan repayment shall be reinvested in other investment funds as
specified by the Participant for the investment of additional contributions to
his accounts under the Plan.
10. CHARGES FOR ADMINISTRATION OF LOAN. Any expenses of the Trustee or
loan administrator which are directly attributable to their administration of a
Participant's separate loan account shall be charged to and paid from such
Participant's accounts under the Plan in the manner established by the
Committee. As of January 1, 1999, a loan processing fee of $35 shall be payable
by the Participant at the time the loan proceeds are disbursed. In addition, an
annual loan maintenance fee of $15 shall be charged each quarter of each Plan
Year to the account of each Participant who has a loan outstanding at any time
during such calendar quarter. Loan fees shall be paid to the Plan's Trustee or
loan administrator and not to the Employer.
11. DEFAULT, ENFORCEMENT AND
TAXATION. Generally, a default shall occur upon the failure of a Participant to
make timely payments under the loan when due. In the event of the failure by a
Participant to make or cause to be made any payment required under the terms of
the
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loan within ninety (90) days following the date on which such payment shall
become due, the Committee may declare the loan to be in default, and the entire
unpaid balance of such loan, together with accrued interest, shall be
immediately due and payable. In such event, the Committee and Trustee shall take
such reasonable action which a prudent fiduciary in like circumstances would
take to protect and preserve Plan assets, including foreclosing on any
collateral and commencing any other legal action for collection which the
Committee and Trustee deem necessary and advisable. However, the Committee and
Trustee shall not be required to commence any such legal action immediately upon
a default. The Committee and Trustee may grant the Participant reasonable rights
to cure any default, provided such would constitute a prudent and reasonable
course of conduct for a professional lender in like circumstances.
Notwithstanding the foregoing, if no risk of loss of principal or income would
result to the Plan, the Committee and Trustee may choose, in their discretion,
to defer enforcement proceedings. If the qualified status of the Plan is not
jeopardized, the Committee and Trustee may treat a loan that is in default and
not cured within a reasonable period of time as a deemed distribution from the
Plan and make all tax and related governmental filings and disclosures which are
thereby required. However, if the qualified status of the Plan is jeopardized,
or if there is a risk of loss to the Plan of principal or income, the Committee
and Trustee shall commence enforcement proceedings against the Participant,
including foreclosing on the security, in the case of any default that has not
been cured within a three (3) month period after such default.
ARTICLE XXIII
MISCELLANEOUS PROVISIONS
------------------------
1. NO COMMITMENT AS TO EMPLOYMENT. Nothing herein contained shall be
construed as a commitment or agreement upon the part of any Participant
hereunder to continue his
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employment with an Employer, and nothing herein contained shall be construed as
a commitment on the part of an Employer to continue the employment or rate of
Compensation of any Participant hereunder for any period.
2. BENEFITS. Nothing in this Plan shall be construed to confer any
right or claim upon any person other than the parties hereto, Participants,
former Participants, and beneficiaries.
3. NO GUARANTEES. Neither the Company, any Employer, nor the Committee
guarantees the Trust from loss or depreciation, nor the payment of any amount
which may become due to any person hereunder.
4. PRECEDENT. Except as otherwise specifically provided, no action
taken in accordance with this Plan by the Company, any other Employer or the
Committee shall be construed or relied upon as a precedent for similar action
under similar circumstances.
5. DUTY TO FURNISH INFORMATION. Each of the Company, the other
Employers or the Committee shall furnish to any of the others any documents,
reports, returns, statements, or other information that any of the others
reasonably deems necessary to perform its duties imposed hereunder or otherwise
imposed by law.
6. WITHHOLDING. The Trustee shall be directed to withhold any tax which
by any present or future law is required to be withheld from any payment to any
Participant, former Participant, or Beneficiary hereunder, unless an Employer
shall have notified the Trustee in writing to the effect that the Employer has
withheld such tax.
7. MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS. The Plan shall
not be merged or consolidated with any other plan, nor shall any of its assets
or liabilities be transferred to another plan, unless, immediately after such
merger, consolidation, or transfer of assets or liabilities, each Participant in
the Plan would receive a benefit under the Plan which is at least equal to the
benefit
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he would have received immediately prior to such merger, consolidation, or
transfer of assets or liabilities (assuming in each instance that the Plan had
then terminated).
8. CONDITION ON EMPLOYER CONTRIBUTIONS. Notwithstanding anything to the
contrary contained in this agreement, any obligation of any Employer to make any
contribution hereunder is hereby conditioned upon (i) for periods prior to
December 22, 1987, the continued qualification of the Plan under Section 401(a)
of the Code, provided that such contribution shall be returned to such Employer
within one year after the date of denial of qualification of the Plan in
connection with an amendment to the Plan or Trust and (ii) the deductibility of
the contribution under Section 404 of the Code, provided that such contribution
shall be returned to such Employer (to the extent disallowed) within one year
after the disallowance of the deduction. Furthermore, a contribution which is
made by any Employer under a mistake of fact shall be returned to such Employer
within one year after the payment of the contribution. Except as otherwise
provided in this Section 8, however, in no event shall any portion of the Trust
property ever revert to or otherwise inure to the benefit of any Employer or a
Related Corporation.
9. BACK PAY AWARDS. The provisions of this Section 9 shall apply only
to an Employee or former Employee who becomes entitled to back pay by an award
or agreement of an Employer without regard to mitigation of damages. If a person
to whom this Section 9 applies was or would have been eligible to make an
election under Section 3 of Article III after the hours of service applicable to
such back pay award or agreement have been credited in accordance with the
provisions of Article II, and if such person shall make within 30 days of the
date he receives notice of the provisions of this Section 9 an election under
Section 3 of Article III (retroactive to any payroll period he was or has become
eligible to do so), then any Deferred Compensation Contributions which were not
previously made but which, after application of the foregoing
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provisions of this Section 9, would have been made under the provisions of
Section 1 of Article V, if such Participant so elects, shall be made out of the
proceeds of such back pay award or agreement. To the extent that any Deferred
Compensation Contributions are made in accordance with the provisions of the
foregoing sentence, his Employer shall also make a Matching Employer
contribution for such Participant, in addition to a contribution equal to any
other Employer contributions and forfeitures which would have been allocated to
the Participant as of the last day of a Plan Year under the provisions of
Article X, as in effect during the period to which the back pay award or
agreement relates. The amount of such additional contributions shall be
credited:
(a) to his Deferred Compensation account-A, Deferred
Compensation account-B, Employer Regular account, and Employer Matching
account, as appropriate, if such person is a Participant when the award
or agreement is made or becomes a Participant as a result of the
provisions of this Section 9, or
(b) to his account if such person is a former Participant
whose Settlement Date occurred under Section 1 of Article XI before the
award or agreement is made; moreover, if a portion of such former
Participant's Employer Regular account and Employer Matching account
was not credited to his account under Section 3 of Article XI as of his
Settlement Date, the amount of such additional contribution for him
shall include an amount equal to the difference, if any, between the
amount which would have been so credited after application of the
provisions of this Section 9 and the amount which was so credited.
Any additional contributions made by such Employer pursuant to this Section 9
shall be made in accordance with, and subject to the limitations of, Articles V
and VI.
10. VALIDITY OF PLAN. The validity of this Plan shall be determined and
construed and interpreted in accordance with the Act and the Code, and to the
extent not preempted thereby, by laws of the State of Ohio. The invalidity or
illegality of any provision of this Plan shall not affect the legality or
validity of any other part thereof.
11. PARTIES BOUND. This Plan shall be binding upon the parties hereto,
the Employers, the Committee, all Participants, former Participants, and
beneficiaries hereunder, and, as the case may be, the heirs, executors,
administrators, successors, and assigns of each of them.
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12. AGENTS, RECORDKEEPERS, ATTORNEYS AND ACCOUNTANTS. The Company and
Committee are empowered to employ such agents, recordkeepers, attorneys
(including attorneys who may be counsel for the Company) and accountants as
they, or either of them, may deem necessary or proper in connection with the
maintenance and administration of the Plan. Subject to the provisions of Section
16 of Article XIX, the reasonable compensation and expenses of such agents,
recordkeepers, attorneys and accountants shall be paid out of the Trust
property; provided, however, that the Company may elect to make payment of such
amounts, subject, however, to allocation among all Employers, the share of each
to be determined by the Company on a fair and equitable basis.
ARTICLE XXIV
DIRECT ROLLOVER
---------------
1. DIRECT ROLLOVER ELECTION. This Article applies to distributions made
on or after January 1, 1993. Notwithstanding any provision of the plan to the
contrary that would otherwise limit a distributee's election under this Article,
a distributee may elect, at the time and in the manner prescribed by the plan
administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
2. DEFINITIONS
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated Beneficiary, or for a specified period of ten
years or more; 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).
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(b) Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
ARTICLE XXV
Effective December 12, 1994, notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Code Section 414(u). Loan
repayments will be suspended under this Plan as permitted under Code Section
414(u)(4).
IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Plan to be executed as of the day and year first above written.
ESSEF CORPORATION
By /s/ Stuart D. Neidus
------------------------------------
Title: Executive Vice President and
Chief Financial Officer
And /s/ Mark E. Brody
------------------------------------
Title: Vice President - Finance
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SCHEDULE A
----------
PARTICIPATING EMPLOYERS AND BUSINESS UNITS
<TABLE>
<CAPTION>
PARTICIPATING EMPLOYERS BUSINESS UNITS
----------------------- --------------
<S> <C>
Essef Corporation Structural North America
Pac-Fab, Inc. Pac-Fab East Division
Pac-Fab West Division
Rainbow Plastics Division (effective April
1, 1999)
Advanced Structures, Inc. Codeline Division
Compool Corporation
National Pool Tile Group, Inc.
General Aquatics Corporation Paragon Aquatics Division
</TABLE>
103
