<PAGE> 1
Registration No. 333-_____
As filed with the Securities and Exchange Commission on April 24, 1998
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
PULTE CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2766606
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
33 BLOOMFIELD HILLS PARKWAY, SUITE 200 48304
BLOOMFIELD HILLS, MICHIGAN (Zip Code)
(Address of Principal Executive Offices)
PULTE HOME CORPORATION INVESTMENT SAVINGS PLUS
(Full title of the plan)
JOHN R. STOLLER, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
PULTE CORPORATION
33 BLOOMFIELD HILLS PARKWAY, SUITE 200
BLOOMFIELD HILLS, MI 48304
(Name and address of agent for service)
(248) 647-2750
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate registration
registered registered per share offering price fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (1)(2) 500,000 shares $ 49.5313 (3) $ 24,765,650.00 (3) $ 7,305.87
================================================================================================================
</TABLE>
(1) $.01 par value per share (the "Common Stock").
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein. This Registration Statement shall
also cover any additional shares of Common Stock which become available for
grant under the Plan by reason of any stock dividend, stock split,
recapitalization or similar transaction effected without receipt of
consideration which results in an increase in the number of outstanding
shares of Common Stock.
(3) Calculated pursuant to Rule 457(c) and (h)(1) and (2) under the Securities
Act, solely for the purpose of computing the registration fee and, based on
the average of the high and low prices of the Common Stock as traded on The
New York Stock Exchange on April 17, 1998.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in this
registration statement:
1. Annual Report of Pulte Corporation (the "Registrant") on Form 10-K
for the fiscal year ended December 31, 1997, filed with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
2. The description of the Registrant's Common Stock contained in Item 1
of the Registrant's Registration Statement on Form 8-A filed with the
Commission on May 17, 1983, Item 4 of the Registrant's Registration
Statement on Form 8-B filed with the Commission on May 16, 1985 and
Item 4 of the Registrant's Registration Statement on Form 8-B filed
with the Commission on December 18, 1987, each pursuant to Section 12
of the Exchange Act.
All documents subsequently filed by the Registrant or Pulte Home
Corporation Investment Savings Plus (the "Plan") pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein by reference modifies or supersedes such prior statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Sections 561-571 of the Michigan Business Corporation Act,
directors and officers of a Michigan corporation may be entitled to
indemnification by the corporation against judgments, expenses, fines and
amounts paid by the director or officer in settlement of claims brought against
them by third persons or by or in the right of the corporation if those
directors and officers acted in good faith and in a manner reasonably believed
to be in, or not opposed to, the best interests of the corporation or its
shareholders.
The Articles of Incorporation of the Registrant provide that a director
of the Registrant shall not be personally liable to the Registrant or its
shareholders for monetary damages for breach of the director's fiduciary duty.
However, these Articles do not eliminate or limit the liability of a director
for any of the following: (i) a breach of the director's duty of loyalty to the
corporation or its shareholders; (ii) acts or omissions not in good faith or
that involve intentional misconduct or knowing violation of law; (iii) a
violation of Section 551(1) of the Michigan Business Corporation Act; (iv) a
transaction from which the director derived an improper personal benefit; or (v)
an act or omission occurring before the effective date of the Article. In
addition, the Bylaws of the Registrant generally provide that, to the fullest
extent permitted by applicable law, the Registrant shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (whether or not by or in the right of the
corporation), including a shareholders' derivative action, by reason of the fact
that he is or was a director, officer, employee or agent of the Registrant or is
or was serving at the request of the Registrant as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise.
The Registrant has obtained Directors' and Officers' liability
insurance. The policy provides for $25 million in coverage including prior acts
dating to the Registrant's inception and liabilities under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
4.1 Articles of Incorporation of Pulte Corporation, as amended,
incorporated by reference to Exhibit 19(a) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1988
4.2 Bylaws of Pulte Corporation incorporated by reference to
Exhibit 3(b) to the Registrant's Registration Statement on
Form S-4, Registration No. 33-17223
4.3 Pulte Home Corporation Investment Savings Plus
23.1 Consent of Ernst & Young L.L.P.
3
<PAGE> 4
24 Power of Attorney (included after the signature of the
Registrant contained on page 6 of this Registration Statement)
The undersigned Registrant hereby undertakes that it has submitted or will
submit the Plan and any amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and has made or will make all changes required by the
IRS in order to qualify the Plan.
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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the Registration Statement or
any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement is on
Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
4
<PAGE> 5
(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 liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
5
<PAGE> 6
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 Bloomfield Hills, State of Michigan, on April 24,
1998.
PULTE CORPORATION
By: /s/ John R. Stoller
------------------------------------------
John R. Stoller
Vice President and General Counsel
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of PULTE CORPORATION, a Michigan corporation (the "Company"),
hereby constitutes and appoints Roger A. Cregg, Vincent J. Frees and John R.
Stoller, and each of them, the true and lawful attorneys-in-fact and agents of
the undersigned, each with the power of substitution for him in any and all
capacities, with full power and authority in said attorneys-in-fact and agents
and in any one or more of them, to sign, execute and affix his seal thereto and
file the proposed registration statement on Form S-8 to be filed by the Company
under the Securities Act of 1933, as amended, which registration statement
relates to the registration and issuance of the Company's Common Stock, pursuant
to the Pulte Home Corporation Investment Savings Plus and any of the documents
relating to such registration statement, any and all amendments to such
registration statement, including any amendment thereto changing the amount of
securities for which registration is being sought, and any post-effective
amendment, with all exhibits and any and all documents required to be filed with
respect thereto with any regulatory authority; granting unto said attorneys, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or cause to be
done by virtue hereof.
6
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ William J. Pulte Chairman of the Board April 15, 1998
- ---------------------------------------- of Directors
William J. Pulte
/s/ Robert K. Burgess President, Chief Executive April 17, 1998
- ---------------------------------------- Officer and Director
Robert K. Burgess (Principal Executive Officer)
/s/ Roger A. Cregg Senior Vice President and April 15, 1998
- ---------------------------------------- Chief Financial Officer
Roger A. Cregg (Principal Financial Officer)
/s/ Vincent J. Frees Vice President and Controller April 15, 1998
- ---------------------------------------- (Principal Accounting Officer)
Vincent J. Frees
/s/ Debra Kelly-Ennis Director April 10, 1998
- ----------------------------------------
Debra Kelly-Ennis
/s/ David N. McCammon Director April 8, 1998
- ----------------------------------------
David N. McCammon
/s/ Ralph L. Schlosstein Director April 15, 1998
- ----------------------------------------
Ralph L. Schlosstein
/s/ Alan E. Schwartz Director April 10, 1998
- ----------------------------------------
Alan E. Schwartz
/s/ Francis J. Sehn Director April 9, 1998
- ----------------------------------------
Francis J. Sehn
Director
- ----------------------------------------
John J. Shea
</TABLE>
7
<PAGE> 8
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bloomfield Hills, State
of Michigan, on April 24, 1998.
PULTE HOME CORPORATION
INVESTMENT SAVINGS PLUS
By: /s/ Michael O'Brien
------------------------
Michael O'Brien
Plan Administrator
8
<PAGE> 9
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
4.1 Articles of Incorporation of Pulte Corporation, as amended,
incorporated by reference to Exhibit 19(a) Registrant's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1988
4.2 Bylaws of Pulte Corporation, incorporated by reference to
Exhibit 3(b) to the Company's Registration Statement on
Form S-4, Registration No. 33-17223
4.3 Pulte Home Corporation Investment Savings Plus
23.1 Consent of Ernst & Young L.L.P.
24 Powers of Attorney (included after the signature of the
Registrant contained on page 6 of this Registration
Statement)
9
<PAGE> 1
Exhibit 4.3
PULTE HOME CORPORATION INVESTMENT SAVINGS PLUS
As Amended and Restated Effective as of January 1, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PREAMBLE ....................................................................................................... 1
ARTICLE I
DEFINITIONS; INTERPRETATION..................................................................................... 2
1.1 Definitions................................................................................... 2
1.2 Compliance with the Act and the Code.......................................................... 20
1.3 Governing Law and Rules of Construction....................................................... 20
1.4 Power to Interpret............................................................................ 21
1.5 Profit Sharing Plan........................................................................... 21
ARTICLE II
PARTICIPATION................................................................................................... 22
2.1 Eligibility For Participation................................................................. 22
(a) General Rule......................................................................... 22
(b) No Application Required.............................................................. 22
2.2 Participation Agreements...................................................................... 22
(a) Description.......................................................................... 22
(b) Limits on Compensation Reduction Elections........................................... 23
2.3 Duration of Participation; Participation After Termination of
Employment.................................................................................... 23
(a) General Rule......................................................................... 23
(b) Transfer to Noncovered Status........................................................ 24
(c) Participation After Termination of Employment........................................ 24
(d) Treatment of Account................................................................. 24
(e) Effect of Military Service........................................................... 24
ARTICLE III
CONTRIBUTIONS................................................................................................... 25
3.1 Time and Amount of Company Contributions.......................................................... 25
(a) Types and Amounts of Company Contributions........................................... 25
(i) Top Heavy Contributions..................................................... 25
(ii) Company Contributions....................................................... 25
(iii) Elective Deferrals.......................................................... 25
(iv) Regular Matching Contributions.............................................. 26
(v) Discretionary Matching Contributions........................................ 27
(b) Time for Contributing Elective Deferrals............................................. 27
(c) Time for Making Company Contributions (Other Than Elective
Deferrals)........................................................................... 27
(d) Form of Contributions................................................................ 27
(e) No Employee Contributions............................................................ 28
3.2 Contributions Conditioned Upon Deductibility.................................................. 28
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(a) Treatment of Nondeductible Contributions............................................. 28
(b) Mistake of Fact...................................................................... 28
3.3 Contributions to One or More Qualified Pension or Annuity Plans............................... 29
ARTICLE IV
ALLOCATIONS AND ACCOUNTS........................................................................................ 30
4.1 Participants' Shares of Contributions......................................................... 30
(a) Allocation of Elective Deferrals..................................................... 30
(b) Allocation of Regular Matching Contributions......................................... 30
(d) Allocation of Company Contributions.................................................. 31
(i) Top Heavy Contributions..................................................... 31
(ii) Company Contributions....................................................... 31
(d) Compensation Considered.............................................................. 32
4.2 Limitations on Allocation..................................................................... 32
(a) Limitations on Allocation of Elective Deferrals...................................... 32
(i) Limit for Highly Compensated Employees...................................... 32
(ii) Average Deferral Percentage................................................. 32
(iii) Aggregation of Deferrals.................................................... 33
(iv) Treatment of Excess Elective Deferrals...................................... 34
(A) Determination of Excess............................................. 34
(B) Determination of Income............................................. 36
(b) Limitations on Allocations of Matching Contributions................................. 36
(i) Limit for Highly Compensated Employees...................................... 36
(ii) Average Contribution Percentage............................................. 37
(iii) Aggregation of Contribution................................................. 38
(iv) Treatment of Excess Contributions........................................... 38
(c) Order of Applying Limits............................................................. 41
4.3 Limitations on Annual Contributions and Additions............................................. 41
(a) Maximum Annual Addition.............................................................. 41
(b) Treatment of Excess.................................................................. 41
(c) Coordination with Other Defined Contribution Plans................................... 42
(d) Coordination with Defined Benefit Plans.............................................. 43
(e) Compliance with Applicable Law....................................................... 43
4.4 Periodic Adjustments to Accounts.............................................................. 43
(a) Distributions and Expenses........................................................... 43
(b) Gains and Losses..................................................................... 43
4.5 Expenses and Remuneration..................................................................... 44
(a) Remuneration......................................................................... 44
(b) Expenses............................................................................. 44
4.6 Distributable Accounts........................................................................ 45
(a) Adjustments to Distributable Account................................................. 45
(b) Investment........................................................................... 45
4.7 Separate Accounting........................................................................... 46
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE V
BENEFITS AND DISTRIBUTIONS...................................................................................... 47
5.1 Vesting....................................................................................... 47
5.2 Distributions Upon Termination of Employment or Death......................................... 47
(a) Termination of Employment............................................................ 47
(b) Death................................................................................ 47
5.3 Other Distributions and Payments.............................................................. 47
(a) Attainment of Age 59-1/2............................................................. 47
(b) Hardship............................................................................. 48
(i) Amount...................................................................... 48
(ii) Alternate Fund Sources Exhausted............................................ 48
(iii) Financial Hardship.......................................................... 48
(iv) Limitation on Future Deferrals.............................................. 49
(c) Occurrence of Certain Events......................................................... 50
5.4 Loans to Participants......................................................................... 50
(a) General Rules........................................................................ 50
(b) Requirements......................................................................... 51
(i) Maximum Amount.............................................................. 51
(ii) Number of Loans............................................................. 51
(iii) Minimum Loan Amount......................................................... 52
(iv) Term........................................................................ 52
(v) Interest; Security.......................................................... 52
(vi) Amortization................................................................ 53
(vii) Repayment................................................................... 53
(viii) Loan Processing Fee......................................................... 53
(ix) Loan Statement.............................................................. 53
(x) Effect on Investment Funds.................................................. 53
(xi) Allocation of Interest...................................................... 54
(xii) Effect on Distributions..................................................... 54
5.5 Payment of Benefits........................................................................... 54
(a) Application.......................................................................... 54
(b) Payment of Benefits Other Than Death Benefits........................................ 56
(c) Payment of Death Benefits............................................................ 56
(i) Form for Payment............................................................ 56
(ii) Time for Payment............................................................ 56
(iii) Designation of Beneficiary.................................................. 56
(d) Spouse Consent....................................................................... 58
(e) Required Distributions............................................................... 59
(i) Rule for Participants Who Reach Age Seventy and One-
Half (70-1/2) Before January 1, 1999........................................ 59
(ii) Rule for Participants Who Reach Age Seventy and One-
Half (70-1/2) After December 31, 1998....................................... 59
(iii) Form of Payment............................................................. 60
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
(iv) Duration of Benefits and Life Expectancy Determinations..................... 60
(f) Permanent Elections.................................................................. 61
(g) Unclaimed Benefits................................................................... 61
(h) Small Benefits....................................................................... 62
(i) Deadline for Benefits................................................................ 62
(j) Direct Rollovers..................................................................... 63
5.6 Benefit Recipients............................................................................ 63
(a) Distributions to Participants........................................................ 63
(b) Distributions to Minors and Incompetent Individuals.................................. 64
5.7 Payment Medium................................................................................ 64
5.8 Distribution of Excess Deferrals.............................................................. 64
(a) Notification to Committee............................................................ 64
(b) Timing of Distribution............................................................... 65
5.9 Payments Pursuant to a Qualified Domestic Relations Order..................................... 65
ARTICLE VI
TOP HEAVY REQUIREMENTS.......................................................................................... 66
6.1 Applicability................................................................................. 66
6.2 Determination of Top Heavy Status............................................................. 66
(a) General Rule......................................................................... 66
(b) Required Aggregation................................................................. 66
(c) Optional Aggregation................................................................. 66
(d) Aggregation Rule..................................................................... 67
(e) Special Computation Rules............................................................ 67
6.3 Top Heavy Restrictions........................................................................ 69
(a) Minimum Required Allocation For Non-Key Employees.................................... 69
(i) General..................................................................... 69
(ii) Adjustment for Small Contributions.......................................... 70
(iii) Alternative Method for Satisfying the Minimum Allocation
Requirement................................................................. 70
(b) Adjustments to Limitations on Annual Additions and Benefits.......................... 71
ARTICLE VII
TERMINATION OF EMPLOYMENT....................................................................................... 72
7.1 Dissolution................................................................................... 72
7.2 Termination in Other Circumstances............................................................ 72
7.3 Temporary Absence and Military Service........................................................ 72
(a) Leaves, Illness, Layoffs............................................................. 72
(b) Armed Forces......................................................................... 73
(c) Inactive Status...................................................................... 73
(d) Short Absences....................................................................... 73
(e) Corrective Actions................................................................... 73
(f) Mutual Agreement..................................................................... 74
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
7.4 No Longer Covered Employee.................................................................... 74
ARTICLE VIII
COMMITTEE AND COMPANY........................................................................................... 75
8.1 Composition of Committee...................................................................... 75
(a) Appointment of Members............................................................... 75
(b) Plan Administrator................................................................... 75
8.2 Removal and Resignation....................................................................... 75
8.3 Actions....................................................................................... 75
8.4 Officers...................................................................................... 75
8.5 Duties of Employer............................................................................ 76
(a) Provide Notification................................................................. 76
(b) Maintain Records..................................................................... 76
(c) Furnish Information.................................................................. 76
(d) Furnish Lists and Data............................................................... 76
(e) Make Available Materials............................................................. 77
8.6 Duties of Committee........................................................................... 77
(a) Maintain Data........................................................................ 77
(b) Make Records Available............................................................... 77
(c) Provide Forms........................................................................ 77
(d) Accept/Reject Forms.................................................................. 77
(e) Furnish Allocation Information....................................................... 77
(f) Furnish Participant Information...................................................... 78
(g) Establish and Administer Investment Funds............................................ 78
8.7 Duties of the Plan Administrator.............................................................. 78
(a) Establish Procedures for Benefit Claims.............................................. 78
(b) Establish Rules for Participation Agreements......................................... 78
(c) Establish Procedures for Domestic Relations Orders................................... 78
8.8 Claims Procedure.............................................................................. 79
(a) Written Notice....................................................................... 79
(b) Appeals.............................................................................. 79
8.9 Powers........................................................................................ 80
8.10 Discretion; Nondiscrimination................................................................. 81
8.11 No Separate Committee......................................................................... 81
8.12 Fiduciaries and Named Fiduciaries............................................................. 81
(a) Identity............................................................................. 81
(b) Responsibility....................................................................... 82
(c) Prior Actions........................................................................ 82
(d) Allocation of Responsibility......................................................... 82
(e) Multiple Capacities.................................................................. 83
(f) No Relief for Fraud.................................................................. 83
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
ARTICLE IX
THE TRUSTEE AND TRUST AGREEMENT; INVESTMENTS.................................................................... 84
9.1 The Trustee................................................................................... 84
9.2 Form and Terms of the Trust Agreement......................................................... 84
9.3 Fiduciary of Trust Fund....................................................................... 84
9.4 Transfer of Investment Authority.............................................................. 85
9.5 Bonding....................................................................................... 85
9.6 Investment in Employer Securities; Voting..................................................... 85
9.7 Funding Policy................................................................................ 86
9.8 Investment Funds.............................................................................. 86
(a) Participants' Interests in Investment Funds.......................................... 86
(b) Addition or Deletion of Funds........................................................ 87
(c) Participant Elections................................................................ 87
(d) Implementation....................................................................... 87
ARTICLE X
TERMINATION AND AMENDMENT....................................................................................... 88
10.1 Termination of Plan........................................................................... 88
10.2 Liquidation of Trust.......................................................................... 89
10.3 Termination of Trust.......................................................................... 89
10.4 Amendment..................................................................................... 89
ARTICLE XI
MISCELLANEOUS................................................................................................... 92
11.1 No Reversions................................................................................. 92
11.2 Nonforfeitability............................................................................. 92
11.3 Merger, Consolidation, Etc.................................................................... 92
11.4 Spendthrift Provision......................................................................... 92
(a) No Assignment Permitted.............................................................. 92
(b) Qualified Domestic Relations Orders.................................................. 93
11.5 Execution of Instruments...................................................................... 93
11.6 Company Actions............................................................................... 94
11.7 Successors, Etc............................................................................... 94
11.8 Miscellaneous Protective Provisions........................................................... 94
11.9 Common Control and Successorship Situations................................................... 95
11.10 Indemnification by Company.................................................................... 96
11.11 Employment Rights Not Enlarged................................................................ 96
11.12 Correction of Errors and Recoupment........................................................... 96
11.13 Effect of Participant's Acceptance of Payments................................................ 97
11.14 Notification of Address....................................................................... 97
11.15 Source of Benefit Payments.................................................................... 97
</TABLE>
vi
<PAGE> 8
<TABLE>
<S> <C> <C>
ARTICLE XII
TRANSFERRED ASSETS.............................................................................................. 98
12.1 Right to Transfer............................................................................. 98
12.2 Accounting for Transferred Assets............................................................. 98
12.3 Nonforfeitability of Transferred Assets....................................................... 98
12.4 Distribution of Transferred Assets............................................................ 98
ARTICLE XIII
EXECUTION....................................................................................................... 99
</TABLE>
vii
<PAGE> 9
PREAMBLE
Pulte Home Corporation adopted and maintains the Pulte Home Corporation
Investment Savings Plus, originally effective as of April 1, 1984, as thereafter
amended and restated effective as of January 1, 1989, and as thereafter amended
from time to time (the "Plan"). The Champion Savings Association Profits Sharing
Plan, the Gulf Coast Investment Corporation Profit Sharing and Investment Plan,
and the National Title Company Profit Sharing and Investment Plan sponsored by
Heights of Texas, FSB, an affiliate of Pulte Home Corporation, were merged with
the Plan approximately March 6, 1989.
The provisions of this restated Plan are effective January 1, 1997,
unless otherwise provided elsewhere in this document. Employees who terminated
their employment before the effective date of this amendment and restatement
shall, unless otherwise specified in this document, be subject to the terms of
the Plan as in effect on the date of their termination of employment.
<PAGE> 10
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Definitions. The following words and phrases, wherever capitalized, shall
have the following respective meanings, unless the context otherwise requires:
(a) "ACCOUNT" means one (1) or more accounts maintained to record the
interest of a Participant in the Plan, including the aggregate of the
Participant's Company Contribution Account, Elective Deferral Account, Matching
Contribution Account, and Transferred Assets Account, if any, and any earnings
thereon.
(b) "ACT" means those provisions of the Employee Retirement Income
Security Act of 1974, as amended, not included within the Code, and any
successor laws.
(c) "ADMINISTRATIVE PARTIES" means and includes the Employer, the
Trustee, and the Committee.
(d) "ANNIVERSARY DATE" means the last day of December of each year.
(e) "ANNUAL ADDITION" means, with respect to any Participant (for any
Limitation Year), the sum of:
(i) That part of any Company Contributions, Elective
Deferrals or Matching Contributions allocated to the
Participant's Account with respect to that Limitation
Year.
(ii) The forfeitures, if any, allocated to the
Participant's Account with respect to that Limitation
Year.
2
<PAGE> 11
(iii) Amounts allocated after March 31, 1984, on behalf of
the Participant during the Limitation Year to an
individual medical account, within the meaning of
Section 415(l)(2) of the Code, which is part of a
pension or annuity plan of the Employer Group.
(iv) If the Participant is or ever has been a Key
Employee, amounts allocated after December 31, 1985,
to any separate account (within the meaning of
Section 419A(d)(3) of the Code) in a welfare benefit
fund (within the meaning of Section 419(e) of the
Code) during the Limitation Year for provision of
post-retirement medical benefits for the Participant.
(f) "ANNUITY STARTING DATE" means the first day of the first period for
which an amount is payable as an annuity, or, in the case of a benefit not
payable in the form of an annuity, the first day on which all events have
occurred which entitle the Participant to that benefit.
(g) "ATTAINED AGE" means a Participant's chronological age (not his
age on his nearest birthday).
(h) "BENEFICIARY" means the person or persons designated by a
Participant in accordance with Section 5.5(c)(iii) (Designation of Beneficiary)
to receive payments under the Plan in the event of the Participant's death.
(i) "CODE" means the Internal Revenue Code of 1986, as amended, and
any successor laws.
(j) "COMMITTEE" means the administrative committee appointed pursuant
to Section 8.1 (Composition of Committee).
3
<PAGE> 12
(k) "COMPANY" means the Employer and any of its subsidiaries or
affiliates, if any, which, with the approval of the Board of Directors of the
Employer, adopt the Plan.
(l) "COMPANY CONTRIBUTIONS" means the amounts contributed to the Plan
by the Company pursuant to Section 3.1(a)(ii) (Company Contributions). As the
context may require, the term Company Contributions may also refer to any
contributions made to the Plan by the Company.
(m) "COMPANY CONTRIBUTION ACCOUNT" means the account established for a
Participant pursuant to Section 4.1(c) (Allocation of Company Contributions) to
hold Company Contributions allocable to the Participant, and any earnings
thereon.
(n) "COVERED EMPLOYEE" means any Employee other than:
(i) An Employee who is laid off, on leave of absence or
on active duty in the armed forces of any nation or
international body (other than as a member of the
Armed Forces of the United States of America).
(ii) An Employee who is covered by a collective bargaining
agreement entered into by the Company unless the
agreement, by specific reference to the Plan,
provides for coverage under the Plan, if there is
evidence that retirement benefits were the subject of
good faith bargaining.
(iii) A Leased Employee.
(iv) An hourly Employee.
(v) An Employee of a subsidiary or affiliate of the
Company which has not adopted the Plan.
4
<PAGE> 13
(vi) Any person whose status as an Employee is the result
of a judicial or administrative determination.
(o) "CREDITABLE COMPENSATION" means amounts paid to a Participant or
Covered Employee by the Company in the Plan Year in question for services
performed and which includes all wages, salaries, fees for professional services
and other amounts for personal services actually rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salesmen, commissions, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Treas.
Reg. Section 1.62-2(c)) plus amounts described in Sections 104(a)(3), 105(a) and
105(h) of the Code, to the extent includible in gross income, amounts paid or
reimbursed by the Employer for moving expenses (to the extent not deductible by
the Employee under Section 217 of the Code), the value of any non-qualified
stock option to the extent includible in gross income, and amounts includible in
gross income as a result of making an election under Section 83(b) of the Code,
plus elective contributions to any Qualified plan, cafeteria plan, 403(b)
annuity plan or other plan of the Employer Group on behalf of the Participant
which are not includable in income under Sections 125, 402(e)(3), 403(b),
457(b), or 414(h)(2) of the Code, and excluding all of the following, even if
includible in gross income:
(i) Compensation paid in kind.
(ii) Amounts paid to or in respect of such person after
his employment shall have terminated.
(iii) Reimbursements or other expense allowances
(including, for example, but not by way of
limitation, travel and entertainment).
(iv) Fringe benefits (cash and noncash).
5
<PAGE> 14
(v) Moving expenses.
(vi) Deferred compensation.
(vii) Welfare benefits, including employee-paid long term
disability premiums.
(viii) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee becomes freely transferable or
is no longer subject to a substantial risk of
forfeiture.
(ix) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option.
(x) Amounts which receive special tax benefits, such as
premiums for group term life insurance (to the extent
not includible in gross income) or contributions made
toward the purchase of an annuity contract described
in Section 403(b) of the Code.
(xi) The Company's contributions to any pension, profit
sharing or other plan of deferred compensation (as
described in Treas. Reg. Section 1.415-2(d)(3)(i)) to
the extent such contributions are not includible in
the Employee's gross income for the taxable year in
which contributed.
Creditable Compensation taken into account for any Plan Year shall be limited to
the amount set forth in Section 401(a)(17) of the Code (One Hundred Sixty
Thousand Dollars ($160,000)), as adjusted by the Commissioner of Internal
Revenue for increases in the cost of living in accordance with Code Section
401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding twelve (12) months, over which Creditable
Compensation is determined (the "Determination Period") beginning in such
calendar year. If
6
<PAGE> 15
a Determination Period consists of fewer than twelve (12) months, the limit will
be multiplied by a fraction, the numerator of which is the number of months in
the Determination Period, and the denominator of which is twelve (12).
(p) "DEATH BENEFIT" means the benefit payable on the death of the
Participant pursuant to Section 5.2(b) (Death).
(q) "DEFINED BENEFIT PLAN FRACTION" means, with respect to a
Participant, the following fraction. The numerator of the fraction is the
Participant's projected annual benefit under all defined benefit plans
maintained by the Employer Group (determined as of the close of the Limitation
Year). The denominator of the fraction is the lesser of the following amounts
determined for such Limitation Year: (i) 1.25 times the dollar limitation in
effect under Code Section 415(b)(1)(A) for the Limitation Year, or (ii) 1.4
times the amount which can be taken into account for the Participant under Code
Section 415(b)(1)(B) for the Limitation Year.
(r) "DEFINED CONTRIBUTION PLAN FRACTION" means, with respect to a
Participant, the following fraction. The numerator of the fraction is the sum of
the Annual Additions allocated to the accounts of the Participant under all
defined contribution plans (including the Plan) maintained by the Employer
Group, determined as of the close of the Limitation Year. The denominator of the
fraction is the sum, as of the end of the Limitation Year, of the lesser of (i)
or (ii) for each of the Participant's years of service, where (i) is 1.25 times
the dollar limitation in effect under Code Section 415(c)(1)(A) (determined
without regard to transition rules otherwise available under Code Section 415),
and (ii) is 1.4 times the amount which may be taken into account with respect to
the Participant under Code Section 415(c)(1)(B).
(s) "DETERMINATION DATE" means, for any Plan Year, the last day of the
preceding Plan Year; provided, however, that the first Determination Date shall
be the last day of the Plan's first Plan Year.
7
<PAGE> 16
(t) "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(u) "DISCRETION" means sole, absolute and uncontrolled discretion.
(v) "DISCRETIONARY MATCHING CONTRIBUTIONS" means the contributions
made by the Company pursuant to Section 3.1(a)(v) (Discretionary Matching
Contributions) which are based on the Participant's Elective Deferrals.
(w) "DISTRIBUTABLE ACCOUNT" means an Account which has become fixed
and set apart pursuant to Section 4.6 (Distributable Accounts), regardless of
whether the assets of the Account are commingled with any other Account.
(x) "DISTRIBUTEE" means a Participant or former Participant, a
Surviving Spouse, or a Spouse or former Spouse who is an alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of the Code.
(y) "EFFECTIVE DATE" means January 1, 1997.
(z) "ELECTIVE DEFERRALS" means Company Contributions described in
Section 3.1(a)(iii) (Elective Deferrals) made to the Plan pursuant to a
Participant's Participation Agreement.
(aa) "ELECTIVE DEFERRAL ACCOUNT" means the account established for a
Participant pursuant to Section 4.1(a) (Allocation of Elective Deferrals) to
hold Elective Deferrals made to the Plan on his behalf and any earnings thereon.
(bb) "ELIGIBLE RETIREMENT PLAN" means, in the case of a Distributee
other than a Surviving Spouse, 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
8
<PAGE> 17
in Section 403(a) of the Code, or a Qualified plan that accepts the
Distributee's Eligible Rollover Distribution. In the case of a Distributee who
is a Surviving Spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
(cc) "ELIGIBLE ROLLOVER DISTRIBUTION" means any distribution of all or
any portion of the balance to the credit of a Distributee, except:
(i) any distribution that is one of a series of
substantially equal periodic payments (paid 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,
(ii) any distribution that is one of a series of
distributions paid to the Distributee and his
designated Beneficiary over a specified period of ten
years or more,
(iii) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code, and
(iv) 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).
(dd) "EMPLOYEE" means a person who receives Total Compensation, within
the meaning of Section 1.1(jjj) (Total Compensation), including any person who
is a Leased Employee.
(ee) "EMPLOYER" means Pulte Home Corporation.
9
<PAGE> 18
(ff) "EMPLOYER GROUP" means the Employer and any subsidiary or
affiliated entity which, with the Employer, constitutes a controlled group of
corporations or other entities or an affiliated service group within the meaning
of subsections (b), (c), (m) or (o) of Section 414 of the Code. For purposes of
Section 4.3 (Limitations on Annual Contributions and Additions), the definition
of Employer Group shall be modified as required by Section 415(h) of the Code.
(gg) "ENTRY DATE" means the first day of each month occurring on or
after the Effective Date.
(hh) "EXCESS DEFERRALS" means any elective contributions made by a
Participant during a calendar year in excess of Nine Thousand Five Hundred
Dollars ($9,500), as adjusted for cost of living by the Secretary of the
Treasury pursuant to Section 402(g) of the Code (which constitute excess
deferrals within the meaning of Section 402(g)(2) of the Code).
(ii) "FMLA" means the Family and Medical Leave Act of 1993, as
amended.
(jj) "HARDSHIP DISTRIBUTION" means an amount payable from the Plan
under Section 5.3(c) (Hardship) on account of a Financial Hardship, as defined
in Section 5.3(c)(iii) (Financial Hardship).
(kk) "HIGHLY COMPENSATED EMPLOYEE" means any Employee who:
(i) Owned at any time in the calendar year ending with or
within the current Plan Year or the next preceding
calendar year more than five percent (5%) of the
outstanding stock of the Company or stock which has
more than five percent (5%) of the total combined
voting power of all stock of the Company; or
10
<PAGE> 19
(ii) Received Total Compensation for the calendar year
ending with or within the current Plan Year in excess
of Eighty Thousand Dollars ($80,000) and who, for
such preceding calendar year, were in the top
one-fifth (1/5) of all Employees, when ranked on the
basis of Total Compensation.
The following additional rules shall apply:
(iii) The dollar threshold set forth in subparagraph (ii)
shall be increased to reflect any cost of living
adjustments implemented by the Secretary of the
Treasury pursuant to Section 415(d) of the Code. The
applicable dollar amount shall be the dollar amount
for the calendar year in which the relevant Plan Year
begins.
(iv) Former Employees who were Highly Compensated
Employees either when they separated from service (or
have a deemed separation within the meaning of
regulations promulgated under Section 414(q) of the
Code) or at any time after reaching an Attained Age
of fifty-five (55) shall always be considered Highly
Compensated Employees ("Highly Compensated Former
Employees"). Highly Compensated Former Employees who
terminated employment with the Employer Group before
January 1, 1987, will be identified using the special
election provided in regulations under Code Section
414(q). Highly Compensated Former Employees shall not
be included for the purpose of determining the number
of Employees in the top one-fifth (1/5) group,
pursuant to subparagraph (ii).
(v) For purposes of determining the number of Employees
in the top one-fifth (1/5) of all Employees under
subparagraph (ii), the following Employees shall not
be considered:
11
<PAGE> 20
(A) Non-resident aliens with no United States
source income.
(B) Employees who have not completed six (6)
months of service by the end of the Plan
Year.
These Employees shall nevertheless be considered in
determining the identity of the Highly Compensated
Employees.
(vi) Leased Employees who are covered by a "safe harbor"
plan and who are not participants in any Qualified
plan of the Employer Group shall be included as
Employees for purposes of subparagraph (ii).
(ll) "HOURS OF SERVICE" means each hour for which an Employee is paid,
or entitled to payment, by the Company for the performance of duties. Service
with any member of the Employer Group shall be treated as Hours of Service to
the extent provided in Section 11.9(b) (Transfers Within Employer Group).
(mm) "INVESTMENT FUND" means one or more funds, comprising the Trust
Fund, in which Plan assets may be invested. Investment Funds may include such
funds as may be established from time to time by the Committee in its
Discretion.
(nn) "INVESTMENT MANAGER" means a person, firm or entity which:
(i) Is either (A) registered as an investment adviser
under the Investment Advisers Act of 1940, (B) a
bank, as defined in the Investment Advisers Act of
1940, or (C) an insurance company qualified to
manage, acquire and dispose of the assets of
Qualified plans under the laws of more than one (1)
state,
12
<PAGE> 21
(ii) Has acknowledged in writing that it is a fiduciary
with respect to the Plan, and
(iii) Has been granted the authority and duty to direct the
investment of all or part of the Trust Fund pursuant
to Section 9.4 (Transfer of Investment Authority).
(oo) "KEY EMPLOYEE" means any individual described in (i) or (ii)
below:
(i) Any Employee or former Employee who, at any time
during the Plan Year containing the Determination
Date or during any of the four (4) preceding Plan
Years, is or was:
(A) An officer of the Company or of any member
of the Employer Group whose annual Total
Compensation is more than fifty percent
(50%) of the dollar limit under Section
415(b)(1)(A) of the Code in effect on the
first day of the calendar year in which
falls the Determination Date; provided,
however, that no more than fifty (50)
Employees, or if less, the greater of three
(3) or ten percent (10%) of all Employees,
shall be considered to be Key Employees
under this paragraph 1.1(oo)(i)(A); or
(B) One of the ten (10) Employees owning the
largest interests in the Company whose
annual Total Compensation is more than the
limitation in Section 415(c)(1)(A) of the
Code in effect on the first day of the
calendar year in which falls the
Determination Date; provided, however, that
if two (2) or more Employees have the same
interest in the Company, the Employee having
the greater
13
<PAGE> 22
annual Total Compensation shall be treated
as having the larger interest; or
(C) A person owning more than five percent (5%)
of the outstanding stock of the Company or
stock which has more than five percent (5%)
of the combined voting power of all stock of
the Company; or
(D) A person whose annual Total Compensation
from the Employer Group is more than One
Hundred Fifty Thousand Dollars ($150,000)
and who owns more than one percent (1%) of
the outstanding stock of the Company or
stock which has more than one percent (1%)
of the combined voting power of all stock of
the Company.
For purposes of determining ownership under
paragraphs (B), (C), and (D) above, the constructive
ownership provisions of Section 318 of the Code shall
apply, except that (I) five percent (5%) or one
percent (1%), as the case may be, shall be
substituted for fifty percent (50%) in Section
318(a)(2), and (II) the rules of subsections (b), (c)
and (m) of Code Section 414 shall not apply. The
dollar amounts referred to in paragraphs (A), (B),
and (D) above shall be adjusted as described in
Section 415(d) of the Code.
(ii) The Beneficiary of a person described in (i).
(pp) "LEASED EMPLOYEE" means a person who is not an Employee, but who
provides services to the Employer Group which are pursuant to an agreement
between a member of the Employer Group and a leasing organization or between a
member of the Employer Group and
14
<PAGE> 23
another person, the services are performed under the primary direction or
control of a member of the Employer Group, and the person has performed the
services for the Employer Group on a substantially full-time basis for a period
of at least one (1) year. A person who would otherwise be treated as a Leased
Employee pursuant to this Section 1.1(pp) shall not be so treated if the person
is covered by a Qualified plan maintained by the leasing organization which is a
nonintegrated money purchase pension plan with at least a ten percent (10%)
employer contribution rate, and which provides for full and immediate vesting
and immediate participation; provided, however, that this sentence shall not
apply if Leased Employees comprise more than twenty percent (20%) of the
Employer Group's Employees who are not Highly Compensated Employees.
(qq) "LIMITATION YEAR" means the Plan Year.
(rr) "MATCHING CONTRIBUTION ACCOUNT" means the account established for
a Participant pursuant to Section 4.1(b) (Allocation of Matching Contributions)
to hold Regular Matching Contributions and Discretionary Matching Contributions
made to the Plan on behalf of the Participant, and any earnings thereon.
(ss) "NONFORFEITABLE," when used with respect to a benefit or right
under this Plan, means vested and unconditional.
(tt) "NON-KEY EMPLOYEE" means:
(i) a Participant or former Participant who is not and
has never been a Key Employee; and
(ii) the Beneficiary of a person described in (i).
15
<PAGE> 24
(uu) "NORMAL RETIREMENT AGE" means the date a Participant reaches an
Attained Age of sixty-five (65).
(vv) "PARTICIPANT" means a Covered Employee who is eligible, and has
qualified, to participate in the Plan in accordance with Article II
(Participation).
(ww) "PARTICIPATION AGREEMENT" means the document by which a
Participant agrees to reduce his Creditable Compensation as described in Section
2.2 (Participation Agreements).
(xx) "PLAN" means the Pulte Home Corporation Investment Savings Plus
as herein set forth or as from time to time amended.
(yy) "PLAN ADMINISTRATOR" means the Committee or such other person as
may be designated in Section 8.1(b) (Plan Administrator) to perform the
functions of a plan administrator as described in Section 3(14) of the Act.
(zz) "PLAN YEAR" means the twelve (12) consecutive month period
beginning on each January 1 and ending on the following December 31.
(aaa) "PROPER" means necessary, advisable, desirable, expedient or
convenient.
(bbb) "QUALIFIED," where used with reference to a plan or trust, has
the same meaning as in Section 401(a) of the Code, and when used with reference
to an annuity plan, means a plan which meets the requirements of Section
404(a)(2) of the Code.
(ccc) "REGULAR MATCHING CONTRIBUTIONS" means Company contributions
described in Section 3.1(a)(iv) (Regular Matching Contributions) which are based
on a Participant's Elective Deferrals.
16
<PAGE> 25
(ddd) "SPOUSE" or "SURVIVING SPOUSE" means the person legally married
to the Participant. The Spouse shall be the person to whom the Participant is
legally married on the Annuity Starting Date. For purposes of determining
benefit recipients upon the death of the Participant, the Surviving Spouse shall
be the person to whom the Participant is legally married the date of the
Participant's death.
(eee) "SUPER TOP HEAVY" describes the Plan if it would be Top Heavy
under Section 6.2 (Determination of Top Heavy Status) if ninety percent (90%)
were substituted for sixty percent (60%) in each place where sixty percent (60%)
appears in that Section.
(fff) "TERMINATION BENEFIT" means the benefit payable to a Participant
as a result of his termination of employment with the Company, as described in
Section 5.2(a) (Termination of Employment).
(ggg) "TESTING COMPENSATION" means compensation, as defined in any
manner permitted by Section 414(s) of the Code and regulations promulgated
thereunder, including Treas. Reg. Section 1.414(s)-1T, paid during the Plan Year
by the Employer or by any member of the Employer Group to a Participant, while
he is a Participant, for services actually performed. Compensation taken into
account shall be limited as described in Code Section 401(a)(17), as adjusted
for cost of living by the Secretary of the Treasury.
(hhh) "TOP HEAVY" describes the Plan if it meets the conditions
described in Section 6.2 (Determination of Top Heavy Status).
(iii) "TOP HEAVY CONTRIBUTIONS" means those contributions required to
be made to the Plan by the Company pursuant to Section 6.3(a) (Minimum Required
Allocation for Non-Key Employees), if any.
17
<PAGE> 26
(jjj) "TOTAL COMPENSATION" means all amounts paid during the Limitation
Year or other relevant period to an individual by any member of the Employer
Group for services actually performed which includes all wages, salaries, fees
for professional services and other amounts for personal services actually
rendered in the course of employment with the Employer (including, but not
limited to, commissions paid salesmen, commissions, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a nonaccountable
plan (as described in Treas. Reg. Section 1.62-2(c)) plus amounts described in
Sections 104(a)(3), 105(a) and 105(h) of the Code, to the extent includible in
gross income, amounts paid or reimbursed by the Employer for moving expenses (to
the extent not deductible by the individual under Section 217 of the Code), the
value of any non-qualified stock option to the extent includible in gross
income, and amounts includible in gross income as a result of making an election
under Section 83(b) of the Code, but excluding:
(i) contributions made by the Employer to a plan of
deferred compensation to the extent that, before the
application of the limits of Section 415 of the Code,
the contributions are not includable in the gross
income of the individual for the taxable year in
which contributed,
(ii) contributions made by the Employer to a plan of
deferred compensation to the extent that all or a
portion of them are recharacterized as voluntary
employee contributions,
(iii) contributions made on behalf of the individual to a
simplified employee pension plan described in Section
408(k) of the Code to the extent the contributions
are excludable from the individual's gross income,
(iv) distributions from a plan of deferred compensation
regardless of whether the amounts are includable in
the gross income of the individual when distributed
(except amounts received pursuant to an unfunded
18
<PAGE> 27
non-Qualified plan to the extent the amounts are
includable in the gross income of the individual),
(v) amounts realized from the exercise of a non-qualified
stock option or when restricted stock (or property)
held by the individual either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture,
(vi) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option, and
(vii) other amounts which receive special tax benefits,
such as premiums for group term life insurance (but
only to the extent that the premiums are not
includable in the gross income of the individual), or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of any annuity contract described in Section
403(b) of the Code (whether or not the contributions
are excludable from the gross income of the
individual).
For Limitation Years beginning before January 1, 1998, there shall be excluded
from Total Compensation any amounts that would otherwise be excluded from gross
income by reason of the application of Sections 125, 402(e)(3), 402(h)(1)(B),
and 403(b) of the Code, except that for purposes of Section 1.1(kk) (Highly
Compensated Employee) and Section 1.1(oo) (Key Employee) such amounts shall be
included.
(kkk) "TRANSFERRED ASSETS" means those funds which constitute rollover
amounts within the meaning of Section 402(a)(5) of the Code transferred from a
Qualified trust to the Trust Fund by the trustee of that Qualified trust on
behalf of a Participant; or distributed from a Qualified trust to a Participant
and transferred by the Participant to the Trust Fund; or distributed from a
Qualified trust to a Participant and transferred by the Participant to an
individual retirement account (within the meaning of Section 408 of the Code)
and then to the Trust Fund.
19
<PAGE> 28
(lll) "TRANSFERRED ASSETS ACCOUNT" means the account established for a
Participant pursuant to Section 12.1 (Right to Transfer) to hold Transferred
Assets received by the Plan on his behalf, and any earnings thereon.
(mmm) "TRUST" and "TRUST FUND" mean the trust and trust fund
established pursuant to the Plan as a medium for funding the Plan.
(nnn) "TRUST AGREEMENT" means the agreement entered into between the
Employer and the Trustee which governs the management and control of Plan
assets.
(ooo) "TRUSTEE" means one (1) or more individuals or corporations
(including banks or trust companies) designated by the Employer to be the
trustee for the Trust and Trust Fund. Currently, the Trustee is First Trust
National Association.
(ppp) "VALUATION DATE" means the date on which the value of the Trust
Fund is determined and includes each Anniversary Date and any other appraisal
dates that may be designated by the Committee.
1.2 Compliance with the Act and the Code. This Plan shall be interpreted and
effectuated to comply with the applicable requirements of the Act and the Code.
Accordingly, the Plan shall be operated so as not to discriminate in favor of
Highly Compensated Employees in the provision of benefits or contributions.
1.3 Governing Law and Rules of Construction. This Plan shall be governed in
all respects, whether as to construction, capacity, validity, performance or
otherwise, by the laws of the United States and, to the extent not superseded by
the laws of the United States, by the laws of the State of Michigan. Wherever
reasonably necessary, pronouns of any gender shall be deemed synonymous, as
shall singular and plural pronouns. The Table of Contents of the Plan and the
headings to the Articles and Sections of the Plan are included solely for
convenience and shall
20
<PAGE> 29
in no event affect, or be used in connection with, the interpretation of the
Plan. Each provision of the Plan shall be treated as severable and if any
provision is declared illegal, invalid or unenforceable, the Plan shall be
interpreted, and shall remain in full force and effect, as though that provision
had never been contained in this Plan.
1.4 Power to Interpret. Subject to Section 1.2 (Compliance with the Act and
the Code) and in addition to the obligations imposed on it under Section 8.10
(Discretion; Nondiscrimination) and elsewhere in the Plan, the Committee shall
have the power and Discretion to construe this Plan, to determine entitlement to
benefits, to correct any defect, supply any omission, or reconcile any
inconsistencies in the manner and to the extent the Committee considers Proper
to carry the Plan into effect.
1.5 Profit Sharing Plan. This Plan is intended to be a profit sharing plan
and, specifically, not a plan to which Section 412 of the Code applies. This
Plan also contains cash or deferred features and is intended to comply with the
provisions of Section 401(k) of the Code.
21
<PAGE> 30
ARTICLE II
PARTICIPATION
2.1 Eligibility For Participation.
(a) General Rule. Any Covered Employee who has completed at least six
(6) months of service following the date on which he first performed an Hour of
Service (determined without regard to any interruptions in the employment of the
Covered Employee by the Company occurring during the twelve (12) month period
beginning with the date on which he first performed an Hour of Service) shall be
eligible to become a Participant as of the Entry Date coincident with or next
succeeding the date on which the condition is fulfilled, if he is a Covered
Employee on that Entry Date. An Employee who has fulfilled the eligibility
conditions of this Section 2.1(a), but who is not a Covered Employee on the date
he would otherwise become a Participant, shall become a Participant on the date
he becomes a Covered Employee.
(b) No Application Required. An eligible Covered Employee shall
automatically become a Participant without filing an application or notice with
the Committee.
2.2 Participation Agreements. A Participant shall not be entitled to receive
an allocation of Elective Deferrals until and unless he shall have filed with
the Committee a Participation Agreement.
(a) Description. The term "Participation Agreement" means the document
by which a Participant elects to reduce his Creditable Compensation by a
designated amount. A Participant's initial Participation Agreement shall be
effective on his initial date of participation or, if later, the first day of
the Plan Year or next quarterly anniversary thereof (or such other date or dates
as the Committee in its Discretion may determine) on or after thirty (30) days
(or such other period as the Committee in its Discretion may determine) after a
signed Participation Agreement is received by the Committee. An amendment of a
Participation Agreement shall be
22
<PAGE> 31
effective on the quarterly date on or after thirty (30) days (or such other
period as the Committee in its Discretion may determine) after a signed copy is
received by the Committee. A Participation Agreement may be revoked at any time,
effective as of the beginning of the payroll period after the Committee receives
a signed revocation. After a revocation, a new Participation Agreement shall be
effective no earlier than the quarterly date after the date on which the
revocation is effective (or such other date as the Committee in its Discretion
may determine). A Participation Agreement shall apply to all amounts received
each pay period and shall remain in effect until revoked or amended, except that
the Committee may temporarily suspend a Participation Agreement to the extent
necessary to limit a Participant's Elective Deferrals as provided in Section
4.2(a) (Limitations on Allocations of Elective Deferrals) or Section 5.3(c)(iv)
(Limitation on Future Deferrals).
(b) Limits on Compensation Reduction Elections. A Participant's
election to reduce his Creditable Compensation pursuant to a Participation
Agreement may be made in amounts up to a maximum of twenty percent (20%) of
Creditable Compensation, but not to exceed Nine Thousand Five Hundred Dollars
($9,500) (or such greater amount as may be permitted under Section 402(g) of the
Code as a result of adjustments made by the Secretary of the Treasury for the
cost of living) in any calendar year. The limitation set forth in the preceding
sentence shall apply to all elective deferrals, within the meaning of Section
402(g)(3) of the Code, made to all plans of the Employer in which such elective
deferrals are permitted. An election must be made before the beginning of the
period to which it relates.
2.3 Duration of Participation; Participation After Termination of
Employment.
(a) General Rule. A Covered Employee who becomes a Participant shall
continue to be a Participant through the date on which his employment with the
Employer Group terminates for any reason; provided, however, that, to the extent
required by the Code or the Act, he shall be considered a Participant until the
date he is no longer entitled to receive any benefits from the Plan.
23
<PAGE> 32
(b) Transfer to Noncovered Status. A Participant who is transferred to
employment with the Employer Group such that he is no longer a Covered Employee
shall not, for such period that he is not a Covered Employee, be entitled to
reduce his Creditable Compensation pursuant to Section 2.2 (Participation
Agreements), shall not be considered for purposes of performing the testing
described in Section 4.2 (Limitations on Allocations), and shall not be entitled
to an allocation under Section 4.1 (Participants' Shares of Contributions).
(c) Participation After Termination of Employment. A former Participant
whose employment with the Company has terminated or whose employment is deemed
to have terminated, and who is later reemployed by the Company, shall again
become eligible to participate in the Plan as of the date on which he again
performs an Hour of Service as a Covered Employee.
(d) Treatment of Account. If a former Participant whose Fixed Account
has not been fully distributed to him again becomes a Participant, his Account
shall be restored and shall no longer be subject to the requirements of Section
4.6(b) (Investment).
(e) Effect of Military Service. 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 Section 414(u) of
the Code.
24
<PAGE> 33
ARTICLE III
CONTRIBUTIONS
3.1 Time and Amount of Company Contributions.
(a) Types and Amounts of Company Contributions. So long as the Plan is
in effect but subject to Article X (Termination and Amendment) the Company
shall, for each Plan Year, contribute to the Plan as follows:
(i) Top Heavy Contributions. The Company shall contribute
to the Plan all required Top Heavy Contributions.
(ii) Company Contributions. In addition, the Company may
contribute to the Plan such amount, if any,
(determined without regard to the Company's actual
profits), as may be determined in the Discretion of
the Company. Notwithstanding the foregoing, the
Company Contributions, when combined with the Top
Heavy Contributions, Elective Deferrals, Regular
Matching Contributions, and Discretionary Matching
Contributions made by the Company for its taxable
year ending with or within the Plan Year, shall not
exceed fifteen percent (15%) of the aggregate
compensation (within the meaning of Section 404(a)(3)
of the Code) paid to or accrued for persons who were
or became Participants in that taxable year, plus the
amount of any so called "credit carry-over" available
for the taxable year under Section 404(a)(3)(A) of
the Code.
(iii) Elective Deferrals. The Company shall contribute to
the Plan an amount equal to the aggregate Elective
Deferrals of Participants for the Plan Year.
25
<PAGE> 34
(iv) Regular Matching Contributions. The Company shall
contribute to the Plan an amount, based on the
Elective Deferrals of each Participant who remains
actively employed by the Company on the last day of
the relevant Plan Year. The amount of the Company's
Regular Matching Contributions for a Participant
shall be based upon the length of the Participant's
service with the Company, determined as of December
31 of each year, counting the period elapsed from the
date on which he first performed an Hour of Service,
in accordance with the following schedule:
(A) Less than one (1) year, one hundred percent
(100%) of the first Three Hundred Dollars
($300) of the Participant's Elective
Deferrals for the relevant Plan Year.
(B) At least one (1) year but less than two (2)
years, one hundred percent (100%) of the
first Six Hundred Dollars ($600) of the
Participant's Elective Deferrals for the
relevant Plan Year.
(C) At least two (2) years but less than three
(3) years, one hundred percent (100% of the
first Nine Hundred Dollars ($900) of the
Participant's Elective Deferrals for the
relevant Plan Year.
(D) At least three (3) years but less than four
(4) years, one hundred percent (100%) of the
first One Thousand Two Hundred Dollars
($1,200) of the Participant's Elective
Deferrals for the relevant Plan Year.
(E) Four (4) or more years, one hundred percent
(100%) of the first One Thousand Five
Hundred Dollars ($1,500) of the
Participant's Elective Deferrals for the
relevant Plan Year.
26
<PAGE> 35
Effective prior to January 1, 1996, for
purposes of this Section 3.1(a)(iv) service
shall include service performed for any
member of the Employer Group or for any
entity acquired by a member of the Employer
Group prior to the date the entity was
acquired.
(v) Discretionary Matching Contributions. The Company
may, in its Discretion, contribute to the Plan for a
Plan Year Discretionary Matching Contributions in
such amount, if any, as may be determined by the
Company; provided, however, that, when allocated as
specified in Section 4.1(d) (Allocation of
Discretionary Matching Contributions) the aggregate
amount of any Discretionary Matching Contributions
may not exceed the amount necessary to enable the
Plan to comply with the Average Deferral Percentage
Limit of Section 4.2(a) (Limitations on Allocation of
Elective Deferrals) and the Actual Contribution
Percentage Limit of Section 4.2(b) (Limitation on
Allocations of Matching Contributions).
(b) Time for Contributing Elective Deferrals. All Elective Deferrals
shall be contributed to the Plan by the Company as soon as administratively
possible following the payroll period to which a salary reduction pursuant to a
Participation Agreement applies, but not later than the fifteenth (15th)
business day following the end of the month in which such contributions are
required to be paid to the Participant or were withheld by the Company.
(c) Time for Making Company Contributions (Other Than Elective
Deferrals). All contributions to the Plan for a taxable year of the Company
shall be made within the time prescribed by law for the filing of the Company's
federal income tax return (including extensions) for that taxable year.
(d) Form of Contributions. All contributions made to the Plan shall
be in cash.
27
<PAGE> 36
(e) No Employee Contributions. All contributions under the Plan shall
be made by the Company and no contributions shall be required or permitted by a
Participant.
3.2 Contributions Conditioned Upon Deductibility.
(a) Treatment of Nondeductible Contributions. All Company Contributions
are conditioned on their being deductible under Section 404 of the Code. If the
deduction for any Company Contribution for any taxable year shall be disallowed,
the contribution (to the extent of the disallowance) shall be returned to the
Company within one (1) year following the date of the disallowance. Amounts to
be returned to the Company shall not exceed the excess of the amount contributed
over the amount that would have been contributed had the contribution been
limited to the amount deductible after any disallowance by the Internal Revenue
Service. Earnings attributable to the excess contribution may not be returned to
the Company, but losses attributable thereto must reduce the amount to be so
returned. In addition, the amount returned to the Company must be limited so as
to ensure that no Participant's Account balance will be reduced below the
balance which would have been in his Account had the nondeductible amount not
been contributed.
(b) Mistake of Fact. If and to the extent that a Company Contribution
to the Trust is made by or under a mistake of fact, it shall be repaid to the
Company upon demand, to the extent of the mistake, within one (1) year after the
contribution was paid, pursuant to rules and regulations promulgated by the
Internal Revenue Service and the Department of Labor. Amounts returned to the
Company shall not exceed the excess of the amount contributed over the amount
that would have been contributed had no mistake of fact occurred. Earnings
attributable to the excess contribution may not be returned to the Company, but
losses attributable thereto must reduce the amount to be so returned. In
addition, the amount returned to the Company must be limited so as to ensure
that no Participant's Account balance will be reduced below the balance which
would have been in his Account had the mistaken amount not been contributed.
28
<PAGE> 37
3.3 Contributions to One or More Qualified Pension or Annuity Plans. If the
Company makes contributions for a taxable year to one or more Qualified plans
(within the meaning of Section 404(a)(7) of the Code) whose participants include
one or more Participants in this Plan, the total amount contributed by the
Company to those Qualified plans for the taxable year, together with its
contribution for the taxable year under Section 3.1 (Time and Amount of Company
Contributions), shall not exceed the greater of:
(a) Twenty-five percent (25%) of the compensation otherwise paid during
the taxable year to the participants in the Qualified pension or annuity plans
and the Participants in this Plan, and
(b) The amount of Company Contributions necessary to avoid an
accumulated funding deficiency (within the meaning of Section 402(a) of the
Code) with respect to the plan years of those Qualified pension or annuity plans
which end with or within the taxable year;
provided, however, that if this limitation would otherwise be exceeded, the
Company Contributions under the Plan for the taxable year shall be reduced by an
amount equal to the excess.
29
<PAGE> 38
ARTICLE IV
ALLOCATIONS AND ACCOUNTS
4.1 Participants' Shares of Contributions. The Committee shall establish and
maintain records of an "Elective Deferral Account", a "Matching Contribution
Account" and a "Company Contribution Account" for each Participant. After taking
into account amounts, if any, treated as forfeited pursuant to Section 5.5(g)
(Unclaimed Benefits), the Company's contributions for a Plan Year shall be
allocated to Participants' Accounts as follows:
(a) Allocation of Elective Deferrals. Elective Deferrals shall be
allocated as of the date of receipt by the Trustee to the Elective Deferral
Accounts of the Participants on behalf of whom the Elective Deferrals were made.
(b) Allocation of Regular Matching Contributions. Regular Matching
Contributions shall be allocated as of the last day of the Plan Year to the
Matching Contribution Accounts of the Participants on behalf of whom Regular
Matching Contributions were made.
(c) Allocation of Discretionary Matching Contributions. Discretionary
Matching Contributions shall be allocated as of the last day of the Plan Year to
the Matching Contribution Accounts of Participants on behalf of whom Elective
Deferrals were made during the Plan Year and who are not Highly Compensated
Employees. Discretionary Matching Contributions shall be allocated first to the
Participant meeting such conditions, who has the lowest Creditable Compensation
for the Plan Year, until that Participant receives the maximum amount of
Discretionary Matching Contributions allowed under Section 4.2(b) (Limitations
on Allocations of Matching Contributions) and continuing with the Participant
with the next lowest Creditable Compensation for the Plan Year, and so on, until
all of the Discretionary Matching Contributions contributed by the Company, if
any, have been allocated.
30
<PAGE> 39
(d) Allocation of Company Contributions. Company Contributions
shall be allocated as follows.
(i) Top Heavy Contributions. Top Heavy Contributions
shall be allocated as of the last day of the Plan
Year among the Company Contribution Accounts of all
Participants who are Non-Key Employees and who are
Employees at the end of that Plan Year in the ratio
which the Creditable Compensation of each such
Participant bears to the Creditable Compensation of
all such Participants.
(ii) Company Contributions. Company Contributions made
pursuant to Section 3.1(a)(ii) (Company
Contributions) shall be allocated as of the last day
of the Plan Year among the Company Contribution
Accounts of the Participants who were not Highly
Compensated Employees for the Plan Year and who are
then actively employed by the Company ("Eligible
Participants"). The Committee shall allocate to the
Company Contribution Account of each Eligible
Participant that portion of the Company Contributions
which bears the same ratio to the total of the
Company Contributions that each Eligible
Participant's Creditable Compensation for the Plan
Year bears to the total Creditable Compensation of
all Eligible Participants for the Plan Year. For
purposes of this Section 4.1(c)(ii), any Participant
who is absent on the last day of the Plan Year for
reasons which qualify under FMLA (if FMLA applies to
such Participant) shall be treated as if he were
actively employed provided that he returns to
employment with the Company for at least thirty (30)
days of the expiration of such leave.
31
<PAGE> 40
(d) Compensation Considered. For purposes of this Section 4.1, there
shall be taken into account Creditable Compensation paid to a Participant during
the entire Plan Year, regardless of whether he was a Participant during the
entire Plan Year.
4.2 Limitations on Allocations. The following allocation limitations
shall apply.
(a) Limitations on Allocation of Elective Deferrals. For purposes of
this Section 4.2(a), Regular Matching Contributions and Discretionary Matching
Contributions may be treated as Elective Deferrals.
(i) Limit for Highly Compensated Employees. Allocations
of Elective Deferrals to the Accounts of Participants
who are Highly Compensated Employees shall be limited
to an Average Deferral Percentage (as defined in
Section 4.2(a)(ii) (Average Deferral Percentage)) for
the current Plan Year which does not exceed the
greater of:
(A) The Average Deferral Percentage for the
preceding Plan Year for Participants who are
not Highly Compensated Employees times 1.25,
or
(B) The lesser of (I) the Average Deferral
Percentage for the preceding Plan Year for
Participants who are not Highly Compensated
Employees multiplied by 2.00, or (II) the
Average Deferral Percentage for the
preceding Plan Year for Participants who are
not Highly Compensated Employees plus two
(2) percentage points.
(ii) Average Deferral Percentage. The "Average Deferral
Percentage" for the group of Participants who are
Highly Compensated Employees and the group of
Participants who are not Highly Compensated
Employees, for a
32
<PAGE> 41
Plan Year, shall be the average of the "Actual
Deferral Ratios" of the members in the applicable
group. The "Actual Deferral Ratio" of a Participant
shall mean the amount of Elective Deferrals actually
made to the Plan on behalf of that Participant for
the Plan Year, expressed as a percentage of his
Testing Compensation for that Plan Year.
(iii) Aggregation of Deferrals. For purposes of Section
4.2(a)(ii) (Average Deferral Percentage), the
following salary deferrals made by a Participant to
another plan of the Employer Group shall be
aggregated with his Elective Deferrals.
(A) If the Plan and one or more other plans
maintained by any member of the Employer
Group which include cash or deferred
arrangements (as defined in Section
401(k)(2) of the Code) are considered as one
plan for purposes of Sections 401(a)(4) and
410(b) of the Code, all salary deferrals by
the Participant under such other plan or
plans, if any, during the Plan Year shall be
aggregated with his Elective Deferrals.
(B) If a Participant who is a Highly Compensated
Employee is also a participant in one or
more plans maintained by any member of the
Employer Group, other than the Plan, which
contain cash or deferred arrangements (as
defined in Section 401(k)(2) of the Code),
all salary deferrals by the Participant
under such other plan or plans, if any,
during the Plan Year shall be aggregated
with his Elective Deferrals.
33
<PAGE> 42
(iv) Treatment of Excess Elective Deferrals. The aggregate
amount by which the limit set forth in Section
4.2(a)(i) (Limit for Highly Compensated Employees) is
exceeded shall be referred to as "Excess Elective
Deferrals". Excess Elective Deferrals, and income
attributable thereto, shall be returned to the
relevant Highly Compensated Employees and related
Matching Contributions shall be distributed not later
than the end of the Plan Year immediately following
the Plan Year in which the Excess Elective Deferrals
are made. The amount of any Excess Elective Deferrals
to be distributed shall be reduced by the amount of
any Excess Deferrals previously distributed to the
Employee for the Employee's taxable year ending with
or within the Plan Year, in accordance with Code
Section 402(g)(2), and Excess Deferrals to be
distributed for a taxable year shall be reduced by
Excess Elective Deferrals previously distributed for
the Plan Year beginning in such taxable year.
(A) Determination of Excess. Excess Elective
Deferrals, with respect to a Highly
Compensated Employee, shall be determined as
follows:
(1) Highly Compensated Employees shall
be ranked in descending order
according to the dollar amount of
their Elective Deferrals.
(2) The Elective Deferrals of the Highly
Compensated Employee(s) with the
highest dollar amount of Elective
Deferrals shall be reduced by the
lesser of the aggregate amount of
Excess Elective Deferrals or the
amount necessary to cause the dollar
amount of those Highly Compensated
Employees' Elective Deferrals to
equal the
34
<PAGE> 43
dollar amount of the Elective
Deferrals of the Highly Compensated
Employee(s) with the next highest
dollar amount of Elective Deferrals.
This amount shall be distributed to
those Highly Compensated Employees.
(3) If, after completing the process
described in paragraph (2), the
total amount distributed is less
than the aggregate Excess Elective
Deferrals, the remaining dollar
amount of the Excess Elective
Deferrals shall be divided equally
to reduce the dollar amount of the
Elective Deferrals of the Highly
Compensated Employee(s) with the
next highest dollar amount of
Elective Deferrals by the lesser of
the aggregate amount of Excess
Elective Deferrals or the amount
necessary to cause those Highly
Compensated Employees' Elective
Deferrals to equal the amount of the
Elective Deferrals of the Highly
Compensated Employee(s) with the
next highest dollar amount of
Elective Deferrals. Those amounts
shall be distributed to the relevant
Highly Compensated Employees. This
procedure shall be repeated to the
extent necessary to eliminate the
remaining Excess Elective Deferrals.
(4) The amount by which a Highly
Compensated Employee's Elective
Deferrals is reduced under this
Section 4.2(a)(iv), if any, shall
constitute that Highly Compensated
Employee's Excess Elective
Deferrals.
35
<PAGE> 44
(B) Determination of Income. Income allocable to
Excess Elective Deferrals required to be
returned to the Participant under this
Section 4.2(a)(iv) may be calculated as
follows (or under any other permissible
method):
(1) General Rule. The income allocable
to Excess Elective Deferrals is
equal to the allocable gain or loss
for the Plan Year in which the
Excess Elective Deferrals were made.
Income includes all earnings and
appreciation, including such items
as interest, dividends, gains from
the sale of property, and
appreciation in the value of stock
and life insurance contracts,
without regard to whether such
appreciation has been realized.
(2) For the Plan Year. The income
allocable to Excess Elective
Deferrals for the Plan Year in which
the Excess Elective Deferrals were
made is determined by multiplying
the income for that Plan Year by a
fraction, the numerator of which is
the Participant's Excess Elective
Deferrals and the denominator of
which is the Participant's Account
balance, reduced by the gain for the
Plan Year and increased by the loss
for the Plan Year.
(b) Limitations on Allocations of Matching Contributions.
(i) Limit for Highly Compensated Employees. Allocations
of Regular Matching Contributions to the Accounts of
Participants who are Highly Compensated Employees
shall be limited to an Average Contribution
Percentage (as defined in Section 4.2(b)(ii) (Average
Contribution Percentage)) for the current Plan Year
which does not exceed the greater of:
36
<PAGE> 45
(A) The Average Contribution Percentage for the
preceding Plan Year for Participants who are
not Highly Compensated Employees, times
1.25, or
(B) The lesser of (I) the Average Contribution
Percentage for the preceding Plan Year for
Participants who are not Highly Compensated
Employees multiplied by 2.00, or (II) the
Average Contribution Percentage for the
preceding Plan Year for Participants who are
not Highly Compensated Employees plus two
(2) percentage points.
Provided, however, that if the Average Deferral
Percentage is determined by using the test described
in Section 4.2(a)(i)(B), then the Average
Contribution Percentage determined under this Section
4.2(b)(i) shall be determined in accordance with the
multiple use test described in regulations issued
under Section 401(m) of the Code.
(ii) Average Contribution Percentage. The "Average
Contribution Percentage" for a Plan Year for the
group of Participants consisting of Highly
Compensated Employees and for the group consisting of
Participants who are not Highly Compensated Employees
shall be the average of the "Actual Contribution
Ratios" of the members in the applicable group. The
"Actual Contribution Ratio" of a Participant shall
mean the amount of Regular Matching Contributions
actually paid to the Plan on behalf of the
Participant for the Plan Year expressed as a
percentage of his Testing Compensation for such Plan
Year.
37
<PAGE> 46
(iii) Aggregation of Contributions. For purposes of Section
4.2(b)(ii) (Average Contribution Percentage), the
following amounts contributed on behalf of a
Participant under one or more other plans maintained
by any member of the Employer Group shall be
aggregated with his Regular Matching Contributions
under this Plan.
(A) If the Plan, and any other plan maintained
by any member of the Employer Group to which
"matching contributions," "employee
contributions," or "elective deferrals" (as
those terms are defined in Code Section
401(m)(4)) are made, are considered as one
plan for purposes of Sections 401(a)(4) and
410(b) of the Code, then such other plan or
plans shall be treated with this Plan as a
single plan.
(B) If one or more other plans maintained by any
member of the Employer Group permit
"matching contributions" or "employee
contributions" (as those terms are defined
in Code Section 401(m)(4)) to be allocated
to the account of any Highly Compensated
Employee who is a Participant in this Plan,
then such contributions under that other
plan or plans shall be aggregated with his
Regular Matching Contributions.
(iv) Treatment of Excess Contributions. The amount by
which the limit set forth in Section 4.2(b)(i) (Limit
for Highly Compensated Employees) is exceeded shall
be referred to as "Excess Contributions". Excess
Contributions and income attributable thereto
(determined in the manner described in Section
4.2(a)(iv)(B)) shall be removed from the relevant
Highly Compensated Employees' Accounts not later than
the end of the Plan Year immediately following the
Plan Year in which the Excess Contributions are made.
38
<PAGE> 47
(A) Determination of Excess. Excess
Contributions, with respect to a Highly
Compensated Employee, shall be determined as
follows:
(1) Highly Compensated Employees shall
be ranked in descending order
according to the dollar amount of
their Regular Matching
Contributions.
(2) The Regular Matching Contributions
of the Highly Compensated
Employee(s) with the highest dollar
amount of Excess Contributions shall
be reduced by the lesser of the
aggregate amount of Excess
Contributions or the amount
necessary to cause the dollar amount
of those Highly Compensated
Employees' Regular Matching
Contributions to equal the amount of
the Regular Matching Contributions
of the Highly Compensated
Employee(s) with the next highest
dollar amount of Excess
Contributions.
(3) If, after completing the process
described in paragraph (2), the
total amount distributed is less
than the aggregate Excess
Contributions, the remaining dollar
amount of the Excess Contributions
shall be divided equally to reduce
the dollar amount of the Regular
Matching Contributions of the Highly
Compensated Employee(s) with the
next highest dollar amount of Excess
Contributions by the lesser of the
aggregate amount of Excess
Contributions or the amount
necessary to cause those Highly
Compensated Employees' Regular
Matching Contributions to equal the
amount of the Excess Contributions
of the Highly Compensated
Employee(s) with the next highest
dollar amount of Excess
39
<PAGE> 48
Contributions. This procedure shall
be repeated to the extent necessary
to eliminate the remaining Excess
Contributions.
(4) The amount by which a Highly
Compensated Employee's Regular
Matching Contributions is reduced
under this Section 4.2(b)(iv), if
any, shall constitute that Highly
Compensated Employees' Excess
Contributions.
(B) Correction of Excess Contributions. Excess
Contributions required to be removed from
the Participant's Account under this Section
4.2(b)(iv) and income allocable to such
amounts shall be removed in the following
order, to the extent necessary to ensure
compliance with the limits described in this
Section 4.2(b).
(1) Amounts which are not Nonforfeitable
shall be forfeited.
(2) Amounts which are Nonforfeitable
shall be either forfeited or
distributed to the affected
Participants, as the Committee shall
determine.
To the extent Excess Contributions are
generated by failure of the multiple use
test under Section 401(m)(2) of the Code,
adjustments shall be made with respect to
only those Highly Compensated Employees who
participate in the multiple features with
respect to which the failure occurred. The
multiple use test of Section 401(m)(9) shall
be applied after reduction of Excess
Contributions pursuant to this Section
4.2(b)(iv).
40
<PAGE> 49
(c) Order of Applying Limits. Notwithstanding anything in this Section
4.2 or Section 2.2(b) (Limits on Compensation Reduction Elections) to the
contrary, the provisions of Section 4.3 (Limitations on Annual Contributions and
Additions) shall be applied before application of the provisions of either this
Section 4.2 or Section 2.2(b) (Limits on Compensation Reduction Elections).
4.3 Limitations on Annual Contributions and Additions.
(a) Maximum Annual Addition. The Annual Additions to a Participant's
Account for any Limitation Year shall in no event exceed the lesser of:
(i) Thirty Thousand Dollars ($30,000), or, if greater,
one fourth (1/4) of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code, or
(ii) Twenty-five percent (25%) of the Participant's Total
Compensation received from the Employer Group for
that Limitation Year.
(b) Treatment of Excess. If, because of allocation of forfeitures or a
reasonable error in estimating a Participant's Creditable Compensation, or under
other circumstances which may be permitted under Section 415 of the Code, the
limitation set forth in Section 4.3(a) (Maximum Annual Addition) would otherwise
be exceeded with respect to a Participant for a Limitation Year, the
Participant's Elective Deferrals for the Limitation Year shall be distributed to
such Participant to the extent that the distribution reduces the excess amounts
in the Participant's Account; provided, however, that any Regular Matching
Contributions or Discretionary Matching Contributions attributable to Elective
Deferrals distributed in accordance with the Section 4.3(b) shall be forfeited
or held for the Participant in accordance with the remaining provisions of this
Section; provided, further, that the Employer may choose to use any combination
of distributions of Elective Deferrals and forfeitures of Regular Matching
Contributions or Discretionary Matching Contributions which will eliminate the
excess Annual Addition but does not result in
41
<PAGE> 50
discrimination within the meaning of Section 401(a)(4) of the Code. Any
remaining excess shall be held unallocated in a separate suspense account, which
shall not share in the allocation of income or losses of the Trust Fund. If the
Participant is an Employee at the end of the Plan Year next following the
Limitation Year with respect to which the limitation set forth in Section 4.3(a)
(Maximum Annual Addition) would otherwise be exceeded, the amount in the
suspense account shall be used to reduce Company Contributions for such
Participant for that next Plan Year. This process shall be repeated for
succeeding Plan Years, as necessary to exhaust the suspense account, so long as
the Participant is an Employee at the end of such succeeding Plan Year. If the
Participant is not an Employee at the end of such succeeding Plan Year, the
amount in the suspense account shall be allocated and reallocated in that Plan
Year (and succeeding Plan Years, as necessary to exhaust the suspense account)
to all of the remaining Participants' Company Contribution Accounts, as a
Company Contribution, pursuant to Section 4.1 (Participants' Shares of
Contributions), before the Company may make contributions under Section 3.1
(Time and Amount of Company Contributions) for such next following Plan Year (or
such succeeding Plan Year) and shall reduce the Company Contributions in such
year accordingly. If, before the suspense account has been exhausted, the Plan
is terminated, amounts remaining in the suspense account shall be returned to
the Company.
(c) Coordination with Other Defined Contribution Plans. If a
Participant also participates in a defined contribution plan (within the meaning
of Section 415(k) of the Code) maintained by any member of the Employer Group,
other than the Plan, the limitation set forth in Section 4.3(a) (Maximum Annual
Addition) shall apply to the aggregate of the Annual Additions to the Plan and
to such other plan. If the limitation set forth in Section 4.3(a) (Maximum
Annual Addition) would otherwise be exceeded when taking into account such
combination of plans the amount to be allocated to such Participant under this
Plan shall be reduced or eliminated pursuant to Section 4.3(b) (Treatment of
Excess) prior to making any adjustments under the other plan.
42
<PAGE> 51
(d) Coordination with Defined Benefit Plans. For Limitation Years
beginning prior to January 1, 2000, if the Participant also participates in a
defined benefit plan (within the meaning of Section 415(k) of the Code)
maintained by any member of the Employer Group, the sum of his Defined Benefit
Plan Fraction and his Defined Contribution Plan Fraction shall not exceed 1.0
for any Limitation Year. If the limitation set forth in this Section 4.3(d)
would otherwise be exceeded, the amount to be allocated to such Participant's
Account under the Plan or to his account under any other defined contribution
plan maintained by any member of the Employer Group shall be reduced or
eliminated (in accordance with the provisions of Section 4.3(b) (Treatment of
Excess)) to the extent necessary to eliminate such excess.
(e) Compliance with Applicable Law. The limitations described in this
Section 4.3 shall be determined and applied in accordance with the provisions of
Section 415 of the Code and regulations promulgated thereunder, which are
incorporated herein by this reference.
4.4 Periodic Adjustments to Accounts. Adjustments shall from time to time be
made to each Participant's Account as follows:
(a) Distributions and Expenses. The Committee shall direct the Trustee
to debit each Account currently in respect of any distributions of benefits
therefrom and any special expenses chargeable thereto under Section 4.5
(Expenses and Remuneration).
(b) Gains and Losses. As of each Valuation Date, the Trustee shall
compute the profit or loss of the Trust Fund and each Investment Fund since the
last Valuation Date, using a method of accounting selected by the Trustee, after
giving recognition to the appreciation or depreciation of assets as determined
pursuant to the terms of the Trust Agreement. The profit or loss so computed
shall be credited or debited to the Participants' Accounts (other than
Distributable Accounts) invested in each Investment Fund in the ratio which each
portion of an Account invested in each Investment Fund on the prior Valuation
Date bears to the aggregate of all portions of Participants' Accounts invested
in that Investment Fund on that Valuation Date. In
43
<PAGE> 52
determining the Account balances on any Valuation Date, there shall be included
any Company Contributions allocable thereto as of that Valuation Date. Upon
agreement between the Trustee and the Committee, any other reasonable method for
allocating profits and losses among Participants' Accounts may be used.
4.5 Expenses and Remuneration.
(a) Remuneration. Members of the Committee shall serve without
remuneration but the Trustee shall be paid fees in an amount and manner mutually
agreed upon in writing between the Trustee and the Employer; provided, however,
that no fees (except for reimbursement of expenses Properly and actually
incurred) shall be paid to a Trustee for any period during which that person
received full time pay from any member of the Employer Group and also served as
Trustee.
(b) Expenses. The expenses of the Trustee and Committee, including but
not limited to the Trustee's fees, shall (unless the Company shall in its
Discretion elect to pay them) be paid and accounted for as follows:
(i) All such expenses shall be debited to the several
Participants' Accounts (other than Distributable
Accounts) as part of, or in conjunction with, the
posting of profits and losses under Section 4.4(b)
(Gains and Losses).
(ii) Any expenses which the Trustee or Committee may incur
with special reference to any Participant or his
Account (including any Distributable Account) shall
first be charged against his Account to the extent
that the Account is sufficient for that purpose. The
remaining balance of the special expenses, if any,
shall then be charged among the other Accounts
pursuant to paragraph (i) above, but shall if
possible be later reimbursed to the other Accounts
out of future credits to the relevant Participant's
Account.
44
<PAGE> 53
4.6 Distributable Accounts. After a Participant's employment with the Employer
Group terminates, whether due to his retirement, death, or any other cause, he
shall cease to be a Participant as of the date his employment with the Employer
Group ends and, except for benefits payable or distributable under this Plan,
shall cease to have any further right, title or interest in the Plan or Trust
Fund. The Participant's Account shall thereafter be known as his Distributable
Account and shall be subject to the following rules.
(a) Adjustments to Distributable Account. His Distributable Account
shall become fixed at its balance as of the Valuation Date coincident with or
next succeeding the date on which his participation ceases. Thereafter no
further credits or debits shall be made to his Distributable Account, except
for:
(i) Distributions therefrom.
(ii) Special expenses chargeable thereto under Section
4.5(b)(ii).
(iii) Matters mentioned in Section 4.6(b) (Investment).
(b) Investment. The Trustee shall promptly segregate and set apart cash
and other assets of the Trust Fund having an aggregate fair market value on the
relevant Valuation Date equal to the balance of the Distributable Account in
question, determined as described in this Section 4.6. Thereafter, unless that
Distributable Account shall have been distributed in full, the Trustee shall
maintain it as a fixed and segregated account but may commingle the assets
thereof with any one or more other Distributable Accounts and shall continue to
invest such accounts; provided, however, that the Participant shall be entitled
to continue to direct the investment of his Distributable Account to the same
extent that any other Participant is entitled to direct the investment of his
Account.
45
<PAGE> 54
4.7 Separate Accounting. The provisions of this Article IV shall be so applied
and interpreted as to provide separate accounting within the meaning of Section
204(b)(3)(B) of the Act for each Participant's interest under the Plan. The fact
that an individual account is established for each Participant shall not be
construed to give such Participant any interest in such account except as
provided in Article V (Benefits and Distributions) and elsewhere in the Plan.
46
<PAGE> 55
ARTICLE V
BENEFITS AND DISTRIBUTIONS
5.1 Vesting. A Participant's interest in his Plan Account shall at all times
be one hundred percent (100%) vested and Nonforfeitable.
5.2 Distributions Upon Termination of Employment or Death.
(a) Termination of Employment. A Participant becomes eligible for
benefits from the Plan when his employment with the Employer Group terminations.
The benefit payable shall be the entire Nonforfeitable balance of the
Participant's Distributable Account.
(b) Death. A Participant who dies prior to the date his Account is
distributed, whether or not his employment with the Company or Employer Group
has theretofore terminated, shall be eligible for a death benefit. The benefit
payable shall be the entire Nonforfeitable balance of the Participant's
Distributable Account.
5.3 Other Distributions and Payments. In addition to distributions described
in Section 5.2 (Distributions Upon Termination of Employment or Death) or
withdrawals that may be available to a Participant with respect to his
Transferred Assets under Section 12.4 (Distribution of Transferred Assets),
distributions or payments shall be available in the following circumstances.
(a) Attainment of Age 59-1/2. A Participant who reaches an Attained Age
of fifty-nine and one-half (59-1/2) shall be entitled to elect to receive a
single sum distribution of all or part of the Nonforfeitable portion of his
Account, whether or not his Company employment shall have terminated. A
Participant shall be permitted to make such an election only once after becoming
eligible to do so. Amounts distributed pursuant to this Section 5.3(a) shall be
based upon the Participant's Nonforfeitable Account balance as of the Valuation
Date immediately
47
<PAGE> 56
preceding the date of election and shall be taken from the Investment Funds as
directed by the Participant or, if no direction is given, pro rata.
(b) Hardship. A Participant who experiences a Financial Hardship, as
defined in paragraph (iii) below, shall be eligible to receive a distribution
from his Account (taken from the Investment Funds pro rata), to the extent
necessary to relieve that Financial Hardship (which may include amounts
necessary to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution), subject to the
restrictions set forth below.
(i) Amount. The amount available for distribution to a
Participant as a Hardship Distribution under this
Section 5.3(b) shall be limited to the amount of the
Participant's Elective Deferrals, plus earnings on
Elective Deferrals credited prior to January 1, 1989.
(ii) Alternate Fund Sources Exhausted. A Participant may
request a Hardship Distribution only if he has
obtained all distributions, other than hardship
distributions, and all nontaxable loans available to
him as of the date of his request under this Plan and
all Qualified plans maintained by the Employer Group.
(iii) Financial Hardship. For purposes of this Section
5.3(b), a Financial Hardship shall be deemed to exist
if the Participant represents to the Committee that
the proposed distribution is necessary because the
Participant has experienced one (1) or more of the
following circumstances:
(A) Unreimbursed expenses for medical care (as
defined in Code Section 213(d)) incurred by
the Participant or by the Participant's
Spouse or dependents (as defined in Code
Section 152) or necessary for these persons
to obtain medical care described in Code
Section 213(d);
48
<PAGE> 57
(B) Costs directly related to the purchase
(excluding mortgage payments) of the
Participant's principal residence;
(C) Payment of tuition related educational fees
or room and board for the next twelve (12)
months of post-secondary education for the
Participant or for the Participant's Spouse,
children or dependents (as defined in Code
Section 152);
(D) Payments necessary to prevent the
Participant's eviction from his principal
residence or foreclosure of the mortgage on
that residence;
(E) Such other circumstances as may from time to
time be deemed to constitute financial
hardship by the Commissioner of the Internal
Revenue Service.
(iv) Limitation on Future Deferrals. A Participant who
receives a distribution under this Section 5.3(b)
shall be subject to the following restrictions
concerning future salary deferrals.
(A) He shall be prohibited from reducing his
Creditable Compensation pursuant to a
Participation Agreement and from making
elective contributions to any Qualified or
nonqualified plan or 403(b) annuity program
of the Employer Group for the period
beginning on the date of the distribution
and ending on the first Entry Date
coincident with or next following the first
anniversary of the distribution.
49
<PAGE> 58
(B) Any Creditable Compensation reductions
pursuant to a Participation Agreement during
the Participant's taxable year immediately
following the taxable year in which he
received the distribution shall be limited
to Nine Thousand Five Hundred Dollars
($9,500), as adjusted for such next taxable
year, less the amount by which the
Participant reduced his Creditable
Compensation during his taxable year in
which he received the distribution.
(c) Occurrence of Certain Events. In the event the Company disposes of
substantially all of the assets of a trade or business or disposes of its
interest in a former subsidiary, then any Participant who continues employment
with the corporation or other entity acquiring such assets or who continues
employment with the subsidiary shall be entitled to receive a lump sum
distribution of his interest in his Plan Account by reason of such event. In the
event the Company terminates the Plan without establishing a successor defined
contribution plan (within the meaning of Section 401(k)(10) of the Code), then
Participants shall be entitled to receive lump sum distributions of the
interests in their Nonforfeitable Plan Accounts on account of such termination.
The provisions of this Section 5.3(c) shall supersede all other provisions of
the Plan with respect to benefit payment methods and timing.
5.4 Loans to Participants.
(a) General Rules. Pursuant to uniform rules consistently applied, the
Corporate Office may, upon the written request of a Participant who is an active
Employee or who is a former Employee who is a "party-in-interest" within the
meaning of Section 3(14) of the Act and who is not an owner-employee described
in Section 4975(d) of the Code, direct the Trustee to make a loan or loans to
such Participant. The Corporate Office is responsible for administering all
loans and shall make available to Participants written information describing
the rules and procedures for applying for loans. The procedures shall be in
written form and shall comprise the written document forming part of the Plan
within the meaning of Department of Labor
50
<PAGE> 59
Regulations Section 2550.408b-1. The procedures set forth in that document may
be revised at any time by the Company, without requiring an amendment to this
Plan document, even if the procedures, as revised, differ in certain respects
from the specifications set forth below.
(b) Requirements. The Corporate Office shall in its Discretion
determine the amount, terms and conditions of any loan. All loans to
Participants shall be subject to the following limitations:
(i) Maximum Amount. Any loan to a Participant, when added
to the unpaid balance of any outstanding loans, if
any, made to him pursuant to this Section 5.4, shall
not exceed the lesser of:
(A) Fifty Thousand Dollars ($50,000) reduced by
the excess (if any) of the Participant's
highest outstanding balance of loans from
the Plan during the one-year period ending
on the day before the date on which the loan
was made, over the outstanding balance of
his loans from the Plan on the date on which
the new loan is to be made; or
(B) One-half (1/2) of the balance of the
Nonforfeitable portion of the Participant's
Account as of the Valuation Date immediately
preceding the date of the loan, less the
unpaid balance of any loans made under this
Section 5.4;
provided, however, that in determining the maximum
amount of any loan to be made under this Section 5.4,
all Qualified plans maintained by any member of the
Employer Group shall be treated as one plan.
(ii) Number of Loans. No more than two (2) loans shall be
outstanding at any time for any Participant;
provided, however, that any loans transferred
51
<PAGE> 60
directly to the Plan from another Qualified plan may,
if the Plan's loan procedures so provide, remain
outstanding until repaid in accordance with the terms
of the note evidencing its existence.
(iii) Minimum Loan Amount. The minimum loan amount shall be
One Thousand Dollars ($1,000).
(iv) Term. Any loan must have a specified repayment date,
which may in no event extend or be extended beyond
five (5) years from the date the loan is made;
provided, however, if the proceeds of the loan are to
be used to acquire a dwelling unit which within a
reasonable time (determined by the Corporate Office
in its Discretion) is to be used (determined by the
Corporate Office at the time the loan is made) as the
principal residence of the Participant, the repayment
date of the loan may extend beyond five (5) years
from the date the loan is made but not beyond the
date which is fifteen (15) years after the date the
loan is made. The minimum loan repayment period is
one (1) year, and the term of any loan shall be in a
multiple of one (1) year.
(v) Interest; Security. Each loan shall bear interest at
such reasonable rate as may be in effect at the time
the loan is made, as determined by the Corporate
Office in the manner described in written rules
established by the Corporate Office and which are
made available to Participants. All loans shall be
adequately secured. The Corporate Office shall
require the Participant to assign to the Trustee that
portion of the Nonforfeitable balance of his Account,
but not more than fifty percent (50%) of the
Nonforfeitable portion of his Account, necessary to
secure the loan.
52
<PAGE> 61
(vi) Amortization. Except as determined by the Corporate
Office in accordance with regulations promulgated by
the Secretary of Treasury pursuant to Section 72(p)
of the Code, any loan granted hereunder shall be
amortized on a substantially level basis over its
term and payments shall be required to be made not
less frequently than quarterly.
(vii) Repayment. Repayment of a loan made pursuant to this
Section 5.4(a) shall be by payroll deduction wherever
possible. Repayment of a loan by a Participant who is
not actively employed shall be by bi-weekly check
sent to the Trustee. Loan repayments will be
suspended under this Plan as permitted under Section
414(u)(4) of the Code.
(viii) Loan Processing Fee. The Plan may impose a one-time
loan processing fee and/or other reasonable fee to
each Participant who is granted a loan. The Corporate
Office shall inform the Participant of the amount of
any fees at the time his loan is made.
(ix) Loan Statement. Each Participant who receives a loan
shall also receive a clear statement of the charges
involved in such loan transaction, including the
dollar amount and annual rate of finance charge.
(x) Effect on Investment Funds. The amount of any loan
made pursuant to this Section 5.4(a) shall reduce the
Participant's interest in the Investment Funds pro
rata. Notwithstanding the preceding rule, Investment
Funds may be reduced in such other manner as the
Corporate Office, in its Discretion, may determine
and make part of the written procedures governing
loans to Participants.
53
<PAGE> 62
(xi) Allocation of Interest. The unpaid balance of any
loan, whether or not yet due, shall be deducted from
the amount standing to the credit of the Participant
in his Account for purposes of Section 4.4 (Periodic
Adjustments to Accounts); provided, however, that
interest paid by the Participant into the Trust Fund
with respect to any such loan shall be allocated
directly to the Participant's Account.
(xii) Effect on Distributions. No payment out of the Trust
Fund shall be made to or in respect of a Participant
or his Beneficiary (except under this Section 5.4 or
Section 5.3(b) (Hardship)) unless and until all
unpaid loans to such Participant have been satisfied
in full. Loans in default under a note executed by a
Participant pursuant to the rules and procedures
governing Participant loans will be satisfied on the
date the Trustee forecloses upon that portion of the
Participant's Account which is used as security for
the loan. The Trustee will foreclose upon that
portion of the Participant's Account which is used as
security for the loan when both the loan is in
default and the Participant incurs an event which
would permit him to receive a distribution under
another provision of the Plan (other than Section
5.3(b) (Hardship)). The foregoing provisions shall
not prevent the Trustee from reporting a loan in
default as income to the Participant at any time
permitted or required by Section 72(p) of the Code.
5.5 Payment of Benefits.
(a) Application. Except as provided in Section 5.5(e) (Required
Distributions) and Section 5.5(h) (Small Benefits), Participants, Beneficiaries
and other persons eligible for benefits under the Plan shall make application
for benefits on forms provided by the Committee and must consent, in writing, to
a distribution from the Plan of benefits to which he is entitled.
Notwithstanding anything herein to the contrary, no benefits shall be payable
under the Plan with
54
<PAGE> 63
respect to any period which is before the date on which application for those
benefits is received by the Committee in accordance with procedures established
by it, unless the Committee determines that the delay was not due to negligence
on the part of the Participant, Beneficiary or other person applying for
benefits hereunder. The Committee may require any Participant, Beneficiary or
other person applying for benefits to furnish to it any information reasonably
necessary for the Proper administration of the Plan and if the applicant shall
fail to furnish that information, the Committee may compute his benefits, if
any, on any basis it deems reasonable. No benefits shall be paid unless proof
satisfactory to the Committee evidencing entitlement to those benefits is
presented to the Committee by the person or persons claiming the benefits.
At least thirty (30), but not more than ninety (90) days before the
Participant's Annuity Starting Date, the Plan Administrator shall notify the
Participant of the benefits available to him, the optional forms for payment, if
any, and, if the benefit is immediately distributable, his right, if any, to
defer receipt of the distribution. Such notice shall be given in accordance with
Section 1.411(a)-11(c) of the Income Tax Regulations. The Participant's consent
to the distribution may not be made before the Participant receives the notice
and may not be made more than ninety (90) days before his Annuity Starting Date.
Such distribution may commence less than thirty (30) days after the notice
required under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(i) the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least thirty (30) days after receiving
the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a
particular distribution option),
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution, and
(iii) the distribution is made at least seven (7) days
after the notice is given.
55
<PAGE> 64
(b) Payment of Benefits Other Than Death Benefits. Subject to Sections
5.5(a) (Application), 5.5(e) (Required Distributions), and 5.5(i) (Deadline for
Benefits), the Committee shall direct the Trustee to pay or arrange for payment
of the benefits for which a Participant is eligible (except death benefits),
using the Participant's entire Distributable Account (reduced by any prior
distributions), as promptly as possible after the Valuation Date coincident with
or next following the date the Participant becomes eligible for a benefit under
Section 5.2 (Distributions Upon Termination of Employment or Death), to him in a
single lump sum.
(c) Payment of Death Benefits. Upon the death of a Participant, the
Committee shall (except as otherwise provided in Section 5.5(a) (Application))
direct the Trustee to pay or arrange as promptly as possible to pay, in the
manner described below, the balance of such Participant's Distributable Account
(reduced by any prior distributions) to his Surviving Spouse or, if there is no
Surviving Spouse or if the Surviving Spouse has consented in the manner
described in Section 5.5(d) (Spouse Consent), to his Beneficiary.
(i) Form for Payment. Death benefits shall be paid in a
single lump sum payment.
(ii) Time for Payment. Payments under this Section 5.5(c)
shall be made (or begin) within one (1) year
following the date of the Participant's death, except
that a Surviving Spouse may elect to delay receipt of
such payment until the date on which the Participant
would have reached an Attained Age of seventy and
one-half (70-1/2).
(iii) Designation of Beneficiary. A Participant shall have
the right to file with the Committee, at any time
after his Plan participation commences, a written
designation of Beneficiary, which designation may at
any time be amended or revoked; provided, however,
that:
56
<PAGE> 65
(A) No designation, and no amendment or
revocation thereof, shall become effective
if filed after such Participant's death.
(B) In the case of a married Participant, his
designation of any Beneficiary other than
his Spouse must be consented to by such
Spouse in writing in accordance with the
requirements of Section 5.5(d) (Spouse
Consent).
(C) In the absence of an effective designation
of Beneficiary, or if the Beneficiary shall
not survive the Participant, then his death
benefits shall be paid to the individual (or
to the individuals in equal shares, per
capita) in the first of the following
classes of successive preference
Beneficiaries in which there shall be any
individual surviving such Participant:
(1) His Spouse,
(2) His children (or children of
deceased children, per stirpes),
(3) His parents, or
(4) His brothers and sisters (or
children of deceased brothers and
sisters, per stirpes).
In the event of the failure of all of the
above categories, then said death benefits
shall be paid to such Participant's estate.
57
<PAGE> 66
(D) In determining who are "children" for the
purposes of paragraph (C) above, adopted
persons shall be treated as if they were the
natural offspring of their adoptive parents.
(E) Any designation of the Participant's Spouse
as a Beneficiary shall automatically
immediately be revoked in the event of the
Participant's divorce from his Spouse.
(F) In the event the Participant's Beneficiary
disclaims his interest in any payments from
the Plan, amounts payable as a result of the
Participant's death shall thereafter be
payable from the Plan as if the Beneficiary
had predeceased the Participant. The Plan
Administrator shall have no obligation to
establish the validity of any disclaimer
presented to it.
(d) Spouse Consent. Whenever the consent of a Spouse is required with
respect to any election, revocation of election, or designation of Beneficiary
under Section 5.5(b) (Payment of Benefits Other Than Death Benefits) or 5.5(c)
(Payment of Death Benefits), such consent shall be in writing, shall acknowledge
the effect of the election, revocation or designation, and shall be witnessed by
a notary public or by a Plan representative. There shall be no need to obtain
the Spouse consent described in this Section 5.5(d), however, if the Participant
establishes to the satisfaction of the Committee that the required consent may
not be obtained because there is no Spouse, or because the Spouse cannot be
located, or because of such other reasons as may be permitted by regulations
promulgated by the Secretary of the Treasury. For purposes of this paragraph and
Section 5.5(b) (Payment of Benefits Other Than Death Benefits) and Section
5.5(c) (Payment of Death Benefits), a former Spouse shall be treated as a Spouse
to the extent specified in a "qualified domestic relations order" within the
meaning of Section 414(p) of the Code. A Spouse's consent hereunder is
irrevocable unless the Participant changes his election and shall be limited to
the Beneficiary and form of payment designated. The Spouse may, nevertheless,
58
<PAGE> 67
be permitted to consent generally to future Beneficiary changes by the
Participant and alternate selections of forms of payment by the Participant
without the need to obtain additional consent from the Spouse, provided that the
general consent acknowledges that the Spouse has the right to limit consent to a
specific Beneficiary and specific form of benefit, where applicable, and that
the Spouse voluntarily relinquishes both rights. A Spouse's general consent is
irrevocable, except that it must be given whenever a Participant's election is
required to be given in order to be or to continue to be effective.
(e) Required Distributions.
(i) Rule for Participants Who Reach Age Seventy and
One-Half (70-1/2) Before January 1, 1999.
Notwithstanding any other provisions of the Plan to
the contrary, payment of the Plan benefits of any
Participant shall commence not later than the April 1
following the calendar year in which he reaches an
Attained Age of seventy and one-half (70-1/2), for
any Participant who is a person described in
1.1(oo)(i)(C), and, for Plan Years beginning on or
after January 1, 1989, for any Participant.
(ii) Rule for Participants Who Reach Age Seventy and
One-Half (70-1/2) After December 31, 1998.
Notwithstanding any other provisions of the Plan to
the contrary, payment of the Plan benefits of any
Participant who is a person described in Section
1.1(oo)(i)(C) shall commence not later than the April
1 following the calendar year in which he reaches an
Attained Age of seventy and one-half (70-1/2), and
for any Participant who is not a person described in
Section 1.1(oo)(i)(C), not later than the later of
the April 1 following the calendar year in which he
reaches an Attained Age of seventy and one-half
(70-1/2) or in which his Company employment
terminates.
59
<PAGE> 68
(iii) Form of Payment. Payments required to be made
pursuant to this Section 5.5(e) may be made in any
form permitted under Section 5.5(b) (Payment of
Benefits Other Than Death Benefits), as elected by
the Participant, but shall not be in an amount less
than the amount required to be distributed to such
Participant pursuant to Section 401(a)(9) of the Code
and regulations promulgated thereunder. All
distributions under this Section 5.5(e) shall be
determined and made in accordance with such
regulations, including the incidental benefit
requirements of Prop. Treas. Reg. Section
1.401(a)(9)-2.
(iv) Duration of Benefits and Life Expectancy
Determinations. Notwithstanding any election to the
contrary, benefits payable under this Section 5.5(e)
shall continue for a period not exceeding the life
or, if applicable, the joint lives of the Participant
and his Beneficiary, or over the life expectancy of
the Participant and his Beneficiary. In determining
the duration of payments and thus the amount which
must be distributed under this Section 5.5(e), unless
otherwise elected by the Participant by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Any
election by the Participant to the contrary shall be
irrevocable and shall apply to all subsequent years.
In the event of the Participant's death, the life
expectancy of a Surviving Spouse designated as his
Beneficiary may be substituted for that of the
Participant and the Surviving Spouse shall have the
right to elect not to have her life expectancy
recalculated annually. Any such election by a
Surviving Spouse shall be irrevocable and shall apply
to all subsequent years. The life expectancy of a
non-Spouse Beneficiary may not be recalculated. "Life
expectancy" shall mean the life expectancy (or joint
and last survivor expectancy) calculated using the
Attained Age of the Participant (or designated
Beneficiary) as of the Participant's (or designated
Beneficiary's) birthday in the applicable
60
<PAGE> 69
calendar year. The applicable calendar year shall be
the first distribution calendar year. If annuity
payments commence before the required beginning date,
the applicable calendar year is the year such
payments commence. Life expectancy and joint and last
survivor expectancy are computed by use of the
expected return multiples in Tables V and VI of
Section 1.72-9 of the Treasury Regulations.
(f) Permanent Elections. Once benefit payments have commenced under any
provision of this Plan, neither the Participant nor his Beneficiary may change
his election of payment method, except to the extent specifically permitted
under the particular payment method selected. If the Participant dies after his
Annuity Starting Date, the benefit shall be paid as elected by the Participant
in accordance with Section 5.5(b) (Payment of Benefits Other Than Death
Benefits). In any other case, the benefit payable with respect to a deceased
Participant shall be a death benefit, subject to the provisions of Section
5.5(c) (Payment of Death Benefits).
(g) Unclaimed Benefits. To the extent not inconsistent with applicable
state law, in the event any benefit payment is unclaimed and the Committee is
unable to determine the whereabouts of a Participant, Beneficiary or other
person whose benefits from the Plan are due and owing within three (3) years
from the date the benefit would otherwise be payable (which date shall be
determined, in the event an application for benefits pursuant to Section 5.5(a)
(Application) shall not have been filed, as if such application had been filed
on the date the Participant's benefits under the Plan would have been required
to commence pursuant to Section 5.5(e) (Required Distributions)), the right to
the benefit shall be forfeited and revert to and become a part of the Trust Fund
(to be used to reduce any Company Contribution which coincides with or follows
the date such amount is treated as forfeited); provided, however, that the
amount forfeited pursuant to this Section 5.5(g) shall be reinstated (initially
from current contributions and forfeitures) if the person to whom the benefit is
due and owing subsequently makes written application therefor to the Committee.
The effective date for reinstatement of the benefit shall be the date that the
written application for benefits is received by the Committee.
61
<PAGE> 70
(h) Small Benefits. Notwithstanding anything herein to the contrary,
if the aggregate balance in a Participant's Distributable Account has at no time
exceeded One Thousand Dollars ($1,000), upon the Participant's becoming entitled
to payment of his benefits as a result of his death, retirement, or termination
of employment, the Committee shall direct the Trustee to pay his benefit to him,
or his Beneficiary, as the case may be, in a single lump sum payment as soon as
administratively feasible following the event which entitles him to payment of
benefits. If the aggregate balance in the Participant's Distributable Account
does not at the time of any distribution (including at the time of any previous
distribution) exceed Three Thousand Five Hundred Dollars ($3,500) (or, effective
for Plan Years beginning after August 5, 1997, Five Thousand Dollars ($5,000)),
then upon the Participant's becoming entitled to payment of his benefits as a
result of his death, retirement, or termination of employment, the Committee
shall direct the Trustee to pay his benefit to him or to his Beneficiary, as the
case may be, in a single lump sum payment as soon as administratively feasible
thereafter but not later than the end of the second Plan Year following the
termination of the Participant's employment with the Employer Group, regardless
of whether the Participant or Beneficiary has applied therefor in accordance
with Section 5.5(a) (Application) or whether the Participant's Spouse has
consented thereto. In determining the balance of a Participant's Distributable
Account for purposes of this Section 5.5(h) only, there shall be aggregated with
the final balance all in-service distributions previously made from the Plan to
the Participant.
(i) Deadline for Benefits. Except as provided in Sections 5.5(a)
(Application) and 5.5(e) (Required Distributions), which may require payments to
begin earlier than required by this Section 5.5(i), or unless the Participant
elects otherwise (which election shall be presumed absent an application for
benefit commencement submitted by the Participant in accordance with Section
5.5(a) (Application)), the payment of benefits under the Plan to such
Participant shall begin not later than the sixtieth (60th) day after the close
of the Plan Year in which occurs the latest of the following:
(i) His reaching his Normal Retirement Age.
62
<PAGE> 71
(ii) The tenth (10th) anniversary of the date he commenced
participation in the Plan.
(iii) The termination of his employment with the Employer
Group.
Notwithstanding the foregoing, if the amount of the payment required to commence
on the date determined pursuant to this Section 5.5(i) cannot be ascertained by
such date or if the Committee has been unable to locate the Participant after
making reasonable efforts to do so, a payment retroactive to such date may be
made no later than sixty (60) days after the earliest date on which the amount
of such payment can be ascertained under the Plan or the date on which the
Participant is located (whichever is applicable).
(j) Direct Rollovers. 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.
5.6 Benefit Recipients.
(a) Distributions to Participants. Payment of Plan benefits shall be
made only to the Participant or, if applicable, to his Beneficiary; provided,
however, that the entire balance of a Participant's Account may, at the election
of the Participant, be transferred directly to the trustee of another Qualified
plan if the other plan provides for receipt of such transfers and advises the
Committee in writing that it will accept the transfer or to the trustee or
custodian of an Individual Retirement Account (as described in Section 219 of
the Code). A Participant's Account for purposes of such transfer shall be valued
as of the Valuation Date on or immediately preceding the date of such transfer,
and shall include any Elective Deferrals made subsequent to that Valuation Date.
63
<PAGE> 72
(b) Distributions to Minors and Incompetent Individuals. If an
individual to whom benefits shall be distributable hereunder shall be a minor or
adjudged mentally incompetent, the Committee may in its Discretion direct the
Trustee to distribute all or part of such benefits by one or more of the
following methods:
(i) Directly to such minor or incompetent individual;
(ii) To the legal guardian of such individual; or
(iii) To another person for the use or benefit of such
individual, but only if pursuant to an order of a
court of competent jurisdiction.
Neither the Committee nor the Trustee shall be required to see to the
application of any such distributions. Distributions made pursuant to this
Section 5.6 shall operate as a complete discharge of the Committee, Trustee, the
Company and the Trust Fund.
5.7 Payment Medium. Benefits payable pursuant to the Plan shall be paid in
cash except that Pulte Corporation stock may be distributed in kind.
5.8 Distribution of Excess Deferrals. A Participant who determines that he has
made Excess Deferrals under this Plan or a combination of this Plan and other
retirement plans in which he may participate shall have the right to notify the
Committee of the Excess Deferrals and receive a distribution of those Excess
Deferrals attributable to the Plan in accordance with this Section 5.8.
(a) Notification to Committee. The Participant may notify the Committee
in writing not later than the March 1st next following the calendar year in
which such Excess Deferrals were made that he has allocated all or a portion of
his Excess Deferrals to the Plan; provided, however,
64
<PAGE> 73
that a Participant is deemed to have notified the Plan of Excess Deferrals to
the extent that the Excess Deferrals arise by taking into account only his
Elective Deferrals to this Plan.
(b) Timing of Distribution. If a Participant notifies the Committee of
Excess Deferrals allocable to the Plan in accordance with Section 5.8(a)
(Notification to Committee), the Committee shall distribute the portion of the
Excess Deferrals which the Participant has allocated to the Plan, along with any
income attributable to such amount, to that Participant not later than the April
15th next following the calendar year in which such Excess Deferrals were made.
Income attributable to Excess Deferrals shall be calculated under any method
permitted under Section 4.2(a)(iv)(B) (Determination of Income).
5.9 Payments Pursuant to a Qualified Domestic Relations Order. Notwithstanding
any other provision of the Plan to the contrary, the Committee may instruct the
Trustee/Insurer to make payments to an alternate payee, pursuant to the terms of
a qualified domestic relations order (within the meaning of Section 414(p) of
the Code), at a time when distributions may not otherwise be permitted under the
Plan.
65
<PAGE> 74
ARTICLE VI
TOP HEAVY REQUIREMENTS
6.1 Applicability. For each Plan Year in which the Plan is Top Heavy within
the meaning of Section 6.2 (Determination of Top Heavy Status), the restrictions
set forth in Section 6.3 (Top Heavy Restrictions) shall apply.
6.2 Determination of Top Heavy Status. For any Plan Year, the determination as
to whether the Plan is Top Heavy shall be made in accordance with the following
rules:
(a) General Rule. The Plan shall be determined to be Top Heavy if, as
of the Determination Date, the sum of the Account balances of all Participants
who are Key Employees exceeds sixty percent (60%) of the sum of the Account
balances of all Key Employees and Non-Key Employees.
(b) Required Aggregation. Notwithstanding Section 6.2(a) (General
Rule), however, there shall be aggregated with the Plan, for purposes of
determining the Plan's Top Heavy status, each other plan of the Company (and of
any member of the Employer Group):
(i) in which a Key Employee is a participant, or
(ii) which enables either the Plan or any plan described
in (i) above to meet the requirements of Section
401(a)(4) or 410(b) of the Code.
(c) Optional Aggregation. Notwithstanding Section 6.2(a) (General Rule)
or Section 6.2(b) (Required Aggregation), any plan of the Company or of any
member of the Employer Group, other than those which are described in Section
6.2(b) (Required Aggregation), may, at the election of the Plan Administrator,
be considered with the Plan for the purpose of determining the existence of Top
Heavy status, so long as the aggregated plans, considered as a group, would
satisfy the requirements of Sections 401(a)(4) and 410(b) of the Code.
66
<PAGE> 75
(d) Aggregation Rule. In the event any other plan is considered with
the Plan for purposes of determining the existence of Top Heavy status whether
pursuant to Section 6.2(b) (Required Aggregation) or 6.2(c) (Optional
Aggregation), the Plan shall be considered Top Heavy only if the sum of (i) and
(ii) below exceeds sixty percent (60%) of (iii), where
(i) is the sum of the account balances (within the
meaning of Section 416(g) of the Code) of all Key
Employees under all of the defined contribution plans
which are being aggregated;
(ii) is the sum of the present values of the accrued
benefits (within the meaning of Section 416(g)(4)(F)
of the Code) for Key Employees under all of the
defined benefit plans which are being aggregated; and
(iii) is the sum of the account balances and present values
of accrued benefits (within the meaning of Section
416(g) of the Code) for all Key Employees and Non-Key
Employees under all plans which are being aggregated.
For purposes of this Section 6.2(d), the values of account balances and present
values of accrued benefits for plans being aggregated with the Plan shall be
determined as of the determination date of such plan(s) which falls within the
same calendar year as the Determination Date for the Plan.
(e) Special Computation Rules. The following rules shall be applied
in determining the Top Heavy status of the Plan under this Section 6.2 and for
purposes of aggregating the Plan with another plan of the Company (or Employer
Group) in order to evaluate the Top Heavy status of such other plan.
(i) The value of an Account for purposes of this Section
6.2 shall mean its balance as of the Valuation Date
coincident with or next preceding the Determination
Date, including Company contributions, if any,
actually made after the Valuation Date but on or
before the Determination Date.
67
<PAGE> 76
(ii) The value of an Employee's (or former Employee's)
Account shall be increased by the value of all
distributions to that Employee (or former Employee)
from the Plan, and from any terminated plan which,
had it not been terminated, would have been required
to be aggregated with the Plan under Section 6.2(b)
(Required Aggregation), including any direct
transfers to the trustee of another plan, but
excluding distributions which are rolled over or
transferred by the Employee to another plan
maintained by a member of the Employer Group,
occurring during the five (5) year period ending on
the Determination Date unless already included in the
value of the Account under (i).
(iii) If an Employee has not performed any services for the
Employer Group during the five (5) year period ending
on the Determination Date, his Account shall not be
considered.
(iv) The value of an Account shall include the allocable
portion of any contribution which is required to be
made under Code Section 412 to any plan which is
aggregated with the Plan pursuant to Section 6.2(b)
(Required Aggregation) or Section 6.2(c) (Optional
Aggregation), and which would be allocated as of any
date not later than the Determination Date, whether
or not such contribution has been made or is due as
of the date of computation.
(v) Transferred Assets shall be excluded in determining
the value of an Employee's (or former Employee's)
Account for purposes of this Section 6.2 if the
transfer occurred at the initiation of the Employee
(or former Employee) and did not include funds
distributed from a plan maintained by any member of
the Employer Group.
68
<PAGE> 77
(vi) The Account of any individual who is a Non-Key
Employee, but who was a Key Employee for any prior
Plan Year, shall not be taken into account.
(vii) The accrued benefit of a Participant (other than a
Key Employee) shall be determined under the method,
if any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the
Employer Group, or, if there is no such uniform
method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the
fractional rule of Code Section 411(b)(1)(C).
6.3 Top Heavy Restrictions. For each Plan Year in which the Plan is determined
to be Top Heavy, the following requirements shall become effective, superseding,
for that Plan Year, any other provisions of the Plan to the contrary.
(a) Minimum Required Allocation For Non-Key Employees.
(i) General. Prior to performing an allocation of Company
Contributions (and forfeitures, if applicable) for
the Plan Year pursuant to Section 4.1 (Participants'
Shares of Contributions), the Committee shall
allocate to the Account of each Participant who is a
Non-Key Employee, and who, as of the last day of the
Plan Year, has not terminated his Company employment,
whether or not that Participant is otherwise entitled
to an allocation pursuant to Section 4.1
(Participants' Shares of Contributions), an amount
from Company Contributions and forfeitures equal to
three percent (3%) of such Participant's Total
Compensation. The balance, if any, of Company
Contributions and forfeitures for the Plan Year shall
then continue to be allocated in accordance with the
provisions of Section 4.1 (Participants' Shares of
Contributions).
69
<PAGE> 78
(ii) Adjustment for Small Contributions. Notwithstanding
the provisions of Section 6.3(a)(i) (General), the
amount which is required to be allocated to the
Accounts of Participants who are Non-Key Employees
need not be greater than the largest allocation to
the Account of a Key Employee Participant, expressed
as a percentage of that Key Employee's Total
Compensation, as limited by Code Section 401(a)(17).
For purposes of determining the largest allocation to
the Account of a Key Employee Participant, Elective
Deferrals shall be included.
(iii) Alternative Method for Satisfying the Minimum
Allocation Requirement. In the event a Participant
who is a Non-Key Employee (who is entitled to a
minimum allocation pursuant to Section 6.3(a)(i)
(General)) participates both in this Plan and another
Qualified plan of the Employer Group, then:
(A) If the other plan is a defined contribution
plan, any Company contributions made for the
Participant to the other plan may be
considered contributions made toward the
minimum required allocation for the
Participant under this Plan.
(B) In the event the other plan is a defined
benefit plan, such Participant shall receive
a minimum annual benefit under the defined
benefit plan equal to the lesser of twenty
percent (20%) of the Participant's average
Total Compensation (as described in (1),
below) or two percent (2%) of the product of
(1) and (2), where
(1) is the Participant's average Total
Compensation for the five (5)
consecutive calendar years which are
included in the Participant's Years
of Service, which begin after
70
<PAGE> 79
December 31, 1983, during which the
Plan was Top Heavy, and which
produce the highest average, and
(2) is the number of the Participant's
Years of Service (but not more than
ten (10)) completed in Plan Years
which begin after December 31, 1983,
during which the Plan was Top Heavy.
(b) Adjustments to Limitations on Annual Additions and Benefits. For
Limitation Years beginning prior to January 1, 2000, the formulas set forth in
Section 1.1(r) (Defined Contribution Plan Fraction) and Section 1.1(q) (Defined
Benefit Plan Fraction) shall be modified by the substitution of 1.00 in place of
1.25 wherever 1.25 appears in those formulas; provided, however, that 1.0 shall
not be substituted in place of 1.25 in the formulas if the Plan is not Super Top
Heavy and if a minimum allocation in an amount equal to that determined by
substituting four percent (4%) for three percent (3%) in each place where three
percent (3%) appears in Section 6.3(a)(i) (General) is provided or is satisfied
by provision of benefits as described in Section 6.3(a)(iii) (Alternative Method
for Satisfying the Minimum Allocation Requirement) (in an amount determined by
substituting three percent (3%) for two percent (2%) wherever two percent (2%)
appears in Section 6.3(a)(iii)(B)).
71
<PAGE> 80
ARTICLE VII
TERMINATION OF EMPLOYMENT
7.1 Dissolution. If a Participant's employment with the Company terminates by
reason of complete or partial liquidation or dissolution of the Company, then
the Participant's employment shall be deemed to have terminated under Section
5.2 (Distributions Upon Termination of Employment or Death), as the case may be,
as of the effective date of the liquidation or dissolution.
7.2 Termination in Other Circumstances. If a Participant's employment
terminates for any reason other than the liquidation or dissolution of the
Company under Section 7.1 (Dissolution), he shall be entitled to only such
benefits as are provided by Article V (Benefits and Distributions).
7.3 Temporary Absence and Military Service. Any absence from active
employment, other than during vacations, holidays and nonbusiness hours,
constitutes the termination of employment, except as follows:
(a) Leaves, Illness, Layoffs. Absence for less than one (1) year
on account of
(i) illness,
(ii) mental or physical disability,
(iii) an occurrence for which leave is taken which
qualifies under FMLA (if the provisions of FMLA apply
to the Company),
(iv) leave of absence granted in accordance with uniform
rules so that all Employees in similar circumstances
are treated alike, or temporary layoff
72
<PAGE> 81
(whether or not of indefinite duration). If, however,
a Participant does not resume active employment
within thirty (30) days from the expiration of the
illness, disability or non-FMLA leave of absence, or
if he fails to resume and maintain active employment
for thirty (30) calendar days after the expiration of
a FMLA-qualified leave, or if he fails promptly to
report for work upon being recalled from the layoff,
his employment or participation, as the case may be,
shall terminate upon his recovery from illness or
disability or the expiration of his leave of absence
or his being recalled from temporary layoff, as the
case may be.
(b) Armed Forces. Absence for the purpose of becoming a member of the
Armed Forces of the United States; provided, however, that if he does not resume
active employment within the period during which he has reemployment rights
under the Uniformed Services Employment and Re-employment Readjustment Act, as
amended or superseded, his employment shall be deemed to have terminated on the
date his absence began.
(c) Inactive Status. During any period when a Participant or other
Employee is not in fact actively employed by the Company, he shall not be
regarded as receiving any Creditable Compensation except that which the Company
actually pays to him during the period.
(d) Short Absences. An absence not exceeding twenty (20) working days
shall not constitute a termination of employment if employment is immediately
thereafter resumed and the Committee shall determine in its Discretion that the
Participant in question had a satisfactory excuse for the absence.
(e) Corrective Actions. If contributions or other credit or debit items
are allocated to a Participant's Account due to the provisions of Section 7.3(a)
(Leaves, Illness, Layoffs) or 7.3(b) (Armed Forces), and it is later determined
that the Participant's employment should have
73
<PAGE> 82
terminated, then the Trustee upon notification thereof shall treat such
allocations as erroneous and shall, within the limits of practicality, endeavor
to undo the effects of the allocation.
(f) Mutual Agreement. The foregoing provisions of this Section 7.3 shall
not prevent the Company and the Participant or other Employee in question from
mutually determining that his status as an Employee shall terminate at any
designated time, either with or without cause.
7.4 No Longer Covered Employee. During any Plan Year in which a Participant
has at no time been a Covered Employee, he shall not be deemed a Participant for
purposes of allocations under Section 4.1 (Participants' Shares of
Contributions) even though he may for other purposes still be a Participant;
provided, however, that if such failure is due to absences which are counted as
periods of employment under Section 7.3 (Temporary Absence and Military
Service), then Section 7.3 (Temporary Absence and Military Service) shall be
controlling rather than this Section 7.4.
74
<PAGE> 83
ARTICLE VIII
COMMITTEE AND COMPANY
8.1 Composition of Committee.
(a) Appointment of Members. The Plan shall be administered by a
Committee of three (3) or more Employees (or other individuals familiar with the
affairs and personnel of the Company) who shall be appointed by, and hold office
at the pleasure of, the Board of Directors of Pulte Home Corporation. Vacancies
in the Committee resulting from death, resignation, removal or otherwise shall
be promptly filled by the Board of Directors of Pulte Home Corporation, but the
Committee may exercise its powers and authority notwithstanding the existence of
vacancies. At any time that there are no current members of the Committee, Pulte
Home Corporation shall perform the functions of the Committee.
(b) Plan Administrator. Whosoever performs the functions of the Committee
shall be the Plan Administrator as defined in the Act.
8.2 Removal and Resignation. A member of the Committee may resign at any time
upon not less than ten (10) days' written notice to the Board of Directors of
Pulte Home Corporation specifying the effective date of the resignation. A
member may be removed or appointed by such Board for any reason or for no reason
and at any meeting of the Board, whether or not called for that purpose.
8.3 Actions. The Committee shall act by a majority of its members at the time
in office, and such action may be taken either by vote at a meeting or in
writing without a meeting. A member of the Committee shall not vote or act on
any matter relating solely to himself.
8.4 Officers. The Committee may appoint from among its number a Chairman to
preside at its meetings and a Secretary, who need not be a member, to keep
records of its meetings and
75
<PAGE> 84
activities and to perform other duties and functions that the Committee may
prescribe. It may in like manner designate any one or more of its members or its
Secretary to execute any instrument or document upon its behalf, and the action
of that person shall have the same force and effect as if taken by the entire
Committee. In the event of such authorization, the Committee shall in writing
notify the other Administrative Parties of the action, and those parties shall
be entitled to rely upon such notification until the Committee gives written
notification to the contrary.
8.5 Duties of Employer. In addition to its other duties and responsibilities
set forth in this Plan, the Employer shall:
(a) Provide Notification. Notify Covered Employees of the Plan and
Trust, including the basic provisions thereof, and keep them and the other
Administrative Parties advised from time to time of any contributions thereto,
any substantial changes therein, and any discontinuance, suspension or
termination thereof, as well as the identities of, and any changes in, the
Committee members and the Trustee.
(b) Maintain Records. Maintain records with respect to each Employee
sufficient to determine the benefits due, or which may become due, to such
Employee under the Plan.
(c) Furnish Information. Furnish the Committee with all information
necessary for the performance of the Committee's duties under this Plan.
(d) Furnish Lists and Data. Promptly after each Anniversary Date, or
such other date or dates as may be necessary to the Proper administration of the
Plan, furnish the Committee and the Trustee with a reasonably detailed list of
all Participants, and of all Covered Employees who are eligible to become
Participants, as of such Anniversary Date (or other date).
76
<PAGE> 85
(e) Make Available Materials. Make available to the Committee for its
inspection, at all reasonable times, all such books and records of the Company
as may be reasonably necessary for the Committee's performance of its duties
under this Plan, including but not limited to the Company's personnel records,
annual reports and financial statements; provided, however, that the Committee
shall not be required to make such inspection but may in good faith rely upon
any statement or information furnished by or on behalf of the Company.
8.6 Duties of Committee. In addition to its other duties and responsibilities
set forth in this Plan, the Committee shall:
(a) Maintain Data. Maintain or cause to be maintained the data and
information necessary for the administration of the Plan, including all
statements, reports and other information furnished to it by the other
Administrative Parties.
(b) Make Records Available. Make available to each Participant, at all
reasonable times during business hours, a copy of this Plan and such of the
Committee's records as pertain to such Participant or his Account.
(c) Provide Forms. Furnish Participants at appropriate times, or upon
request, with forms for designations of Beneficiary and methods of settlement,
as provided in Section 5.5(c) (Payment of Death Benefits) and for election of
distribution options, obtaining Spouse consent, if necessary, explanations of
retirement benefit options and any other form or notice required for the Proper
operation of the Plan.
(d) Accept/Reject Forms. Indicate acceptance or rejection of
designations of Beneficiaries or methods of settlement.
(e) Furnish Allocation Information. Promptly furnish to the Trustee the
information necessary to determine the amount allocable to each Participant's
Account.
77
<PAGE> 86
(f) Furnish Participant Information. Furnish to the Trustee such other
certificates, information and documents as the Trustee may reasonably require,
relating (but not limited) to such matters as: the identities and addresses of
all Participants and Beneficiaries; the age, compensation, and employment record
of every Participant; and the date of, and reasons for, termination of a
Participant's employment.
(g) Establish and Administer Investment Funds. Establish, from time to
time, Investment Funds consistent with the Plan's funding policy, and establish
procedures by which Participants can elect to invest their Accounts in the
Investment Funds pursuant to Section 9.7 (Investment Funds).
8.7 Duties of the Plan Administrator. In addition to those duties imposed upon
the Plan Administrator by the Act or by other provisions of this Plan, the Plan
Administrator shall:
(a) Establish Procedures for Benefit Claims. Adopt and notify all
Participants of the terms of a uniform claims procedure which provides (i) a
procedure for claiming benefits under the Plan; (ii) adequate written notice to
any Participant or Beneficiary whose claim for benefits under the Plan is
denied, setting forth the reasons for such denial; and (iii) a reasonable
opportunity to any Participant or Beneficiary whose claim for benefits is denied
to obtain full and fair review of the decision of the Plan Administrator denying
such claim.
(b) Establish Rules for Participation Agreements. Establish and
communicate to Covered Employees a procedure for execution and delivery of
Participation Agreements and develop and communicate to Covered Employees
administrative rules concerning designation of participation levels, timing of
designations, and related matters.
(c) Establish Procedures for Domestic Relations Orders. Establish
reasonable procedures for determining the existence of a "qualified domestic
relations order" within the meaning of Section 414(p) of the Code and notify
affected persons of such procedures.
78
<PAGE> 87
8.8 Claims Procedure.
(a) Written Notice. If a claim for benefits under the Plan is denied,
in whole or in part, the claimant shall be notified in writing of the denial,
the specific reason for the denial and the Plan provisions on which the denial
is based, within ninety (90) days after the claim has been filed with the
Committee. Such claimant shall also be advised whether any additional material
or information is necessary to perfect the claim and shall be provided with an
explanation of the reasons why such material is necessary and with an
explanation of the Plan's claim review procedure under Section 8.8(b) (Appeals).
(b) Appeals. In the event a claim for benefits under the Plan is denied,
in whole or in part:
(i) The claimant (or his duly authorized representative)
shall be entitled to request in writing a review of
the denial of his claim by the Committee within sixty
(60) days after the claimant receives notice of the
denial of his claim.
(ii) The claimant (or his duly authorized representative)
may review pertinent Plan documents and submit issues
and comments to the Committee in writing.
(iii) All written claims that are neither granted nor
denied in accordance with Section 8.8(a) (Written
Notice) shall be deemed denied and the claimant shall
be deemed to have filed a written request for review.
(iv) The decision of the Committee on review shall be
rendered within sixty (60) days after the request for
review is received by the Committee unless special
circumstances require an extension of time for
processing the claim,
79
<PAGE> 88
in which case a decision shall be rendered not later
than one hundred twenty (120) days after receipt of a
request for review by the Committee.
(v) The claimant shall be furnished with written notice
of any such extension of time prior to the
commencement of the extension.
(vi) If the decision of the Committee on review is not
furnished within the time specified in paragraph (iv)
above, the claim shall be deemed denied on review.
(vii) The decision of the Committee on review shall be in
writing and shall include specific reasons for the
decision and specific references to the pertinent
Plan provisions on which the decision is based.
(viii) The decision of the Committee on review is final.
8.9 Powers. The Committee shall have any and all powers and authority which
shall be Proper to enable it to carry out its duties under this Plan, including
by way of illustration and not limitation (i) the powers and authority
contemplated by the Act and by the Code with respect to Qualified plans and (ii)
the powers and authority to make rules and regulations in respect of the Plan
not inconsistent with this Plan, the Code or the Act and to determine,
consistently therewith, all questions that may arise as to the status and rights
of Participants and Beneficiaries and any other persons. The Employer shall
likewise have any and all powers and authority which shall be Proper to enable
it to carry out its duties under this Plan. The Committee may retain such
consultants, attorneys, or advisors as it may deem Proper in order to carry out
its duties under the Plan and the fees and expenses for retaining such
attorneys, consultants, or advisors may be charged as an expense of the Plan.
80
<PAGE> 89
8.10 Discretion; Nondiscrimination. Wherever it is provided in this Plan that
the Committee or its delegee may perform or not perform any act, or permit or
consent to any action, nonaction or procedure, or wherever the Committee is
given discretionary power or authority, the Committee shall have exclusive
Discretion in the premises; provided, however, that the Committee shall not
exercise its Discretion in such a manner as to violate the Code or the Act or
knowingly to discriminate either for or against any Participant, Covered
Employee or Beneficiary or any group of such persons.
8.11 No Separate Committee. Notwithstanding the foregoing provisions of
this Article VIII:
(a) If and while there are one (1) or more persons comprising the
Committee and the Trustee who are identical, the separation in this Plan of the
responsibilities, rights, powers, authority, and functions of the Committee and
Trustee respectively shall be disregarded; said persons shall act and serve in
both said capacities combined; and they need not furnish information,
directions, instructions or notices, or make reports or demands, by themselves
in one such capacity to themselves in the other such capacity.
(b) If and while there is no Committee, either because none is
designated or no one (1) or more persons are at the time in question actively
serving as members thereof, the responsibilities, rights, powers, authority, and
functions of the Committee shall be vested in the Employer; and the Employer and
Committee need not furnish information, directions, instructions or notices, or
make reports or demands, one to the other.
8.12 Fiduciaries and Named Fiduciaries.
(a) Identity. The Employer, the Committee and the Trustee shall be
named fiduciaries under the Plan, within the meaning of Section 402(a) of the
Act, solely to the extent of their respective responsibilities specified in the
Plan and the Trust. The Committee shall exercise all
81
<PAGE> 90
discretionary authority and control which is not specifically granted to the
Employer or the Trustee with respect to management of the Plan.
(b) Responsibility. Each fiduciary (including named fiduciaries) under
this Plan shall be solely responsible for its own acts or omissions. Except to
the extent required by the Act, no fiduciary shall have the duty to question
whether any other fiduciary is fulfilling all of the responsibilities imposed
upon such other fiduciary by Federal or State law. No fiduciary shall have any
liability for a breach of fiduciary responsibility of another fiduciary with
respect to this Plan unless it participates knowingly in such breach, knowingly
undertakes to conceal such breach, has actual knowledge of such breach and fails
to take reasonable remedial action to remedy said breach or, through its
negligence in performing its own specific fiduciary responsibilities which give
rise to its status as a fiduciary, it enables such other fiduciary to commit a
breach of the latter's fiduciary responsibility.
(c) Prior Actions. No fiduciary shall be liable with respect to a
breach of fiduciary duty if such breach is committed before it became a
fiduciary or after it ceased to be a fiduciary.
(d) Allocation of Responsibility. The named fiduciaries may allocate
their fiduciary responsibilities (other than trustee responsibility within the
meaning of Section 405(c)(3) of the Act) among themselves and may make provision
for the delegation of fiduciary responsibility (other than trustee
responsibility within the meaning of Section 405(c)(3) of the Act) under the
Plan to persons who are not named fiduciaries of the Plan. Such allocation or
delegation shall be accomplished by a written instrument executed by the named
fiduciary or fiduciaries in question, which instrument may be revoked at any
time by the named fiduciary. If the fiduciary responsibilities (other than
trustee responsibility within the meaning of Section 405(c)(3) of the Act) of a
named fiduciary are allocated or delegated to any other person, the named
fiduciary shall not be liable for the acts or omissions of such person, except
to the extent that the named fiduciary violated Section 404(a)(1) of the Act:
82
<PAGE> 91
(i) With respect to such allocation or delegation, or
(ii) With respect to the establishment or implementation
of the method for accomplishing such allocation or
delegation specified above, or
(iii) By continuing such allocation or delegation.
(e) Multiple Capacities. Any person or entity may serve in more than
one (1) fiduciary capacity under the Plan, as, for example, serving on the
Committee and as Trustee.
(f) No Relief for Fraud. Nothing in this section shall be deemed to
relieve any person from liability for his own willful misconduct or fraud.
83
<PAGE> 92
ARTICLE IX
THE TRUSTEE AND TRUST AGREEMENT; INVESTMENTS
9.1 The Trustee. The Employer has entered into a Trust Agreement with First
Trust National Association, under the terms of which a Trust Fund has been
established to receive and hold contributions payable by the Company pursuant to
the Plan. The Trustee may be removed and replaced by any successor Trustee, from
time to time by action of Pulte Home Corporation.
9.2 Form and Terms of the Trust Agreement. The Employer may from time to time
modify the form and terms of the Trust Agreement to accomplish the purposes of
the Plan.
9.3 Fiduciary of Trust Fund. Except to the extent that such authority and duty
are transferred to the Employer, the Committee, Participants, within the meaning
of Section 404(c) of the Act, or an Investment Manager pursuant to the Plan or
the Trust Agreement, the Trustee shall be the fiduciary with respect to the
investment, management and control of the Trust Fund with full Discretion,
management and control thereof. The Employer may transfer to itself, the
Committee, an Investment Manager or Participants the authority and duty to
direct the investment of all or part of the Trust Fund. Such transfer shall be
made by written instrument executed on behalf of the Employer and by the party
so appointed (if other than Participants), who shall thereby acknowledge that he
is a fiduciary under the Plan with respect to investments of the Plan's assets.
If such authority and duty have been transferred to the Committee, the Committee
may appoint an Investment Manager in the same manner as provided for above to
direct the investment and management of the assets of the Trust Fund. Upon any
such transfer of authority and duty, the Company, the Committee or the
Investment Manager, as the case may be, shall be the fiduciary with respect to
the investment and management of such assets of the Trust Fund, and the Trustee
shall be relieved of all responsibility with respect to the investment and
management thereof.
84
<PAGE> 93
9.4 Transfer of Investment Authority. In the event that the authority and duty
to direct the investment of all or part of the Trust Fund are transferred to a
party other than the Trustee, the following rules shall apply.
(a) Transfer to Employer. If investment direction is transferred to the
Employer or the Committee, the Trustee shall not be liable or responsible for
the consequences arising from the Trustee's compliance with the directions of
the Employer or the Committee which are made in accordance with the terms of the
Trust and which are not contrary to the provisions of applicable law regulating
such investment and management of the assets of an employee benefit trust.
(b) Transfer to Investment Manager. If investment direction is
transferred to an Investment Manager, the Trustee shall not be liable or
responsible for any consequences arising from the Trustee's compliance with
investment or management directions received by the Trustee from the Investment
Manager. The Trustee shall be under no duty to question any directions of the
Investment Manager, nor to review in any respect the manner in which the
Investment Manager exercises its authority and discharges its duties with
respect to the assets of the Trust Fund as to which it has been so appointed.
(c) Transfer to Participants. In the event investment authority has
been transferred to Participants, within the meaning of Section 404(c) of the
Act, the Trustee shall not be liable or responsible for any consequences arising
from the Trustee's compliance with investment instructions received by the
Trustee from the Participants.
9.5 Bonding. Except as otherwise exempted by Section 412 of the Act, every
fiduciary of the Plan, within the meaning of the Act, and every person who
handles funds or other property of the Plan shall be bonded in accordance with
Section 412 of the Act.
9.6 Investment in Employer Securities; Voting. Notwithstanding any other
provisions of the Plan or the Trust Agreement to the contrary, the Trustee
shall be authorized to invest an amount
85
<PAGE> 94
not in excess of one hundred percent (100%) of the fair market value of the
assets of the Trust Fund, determined as of the date such investment is made, in
qualifying employer securities (as defined in Section 407(d)(5) of the Act)
("Company Stock"). Company Stock, including fractional shares, allocated to a
Participant's Account shall be voted by the Trustee upon written direction given
to the Trustee by the Participant (or his Beneficiary, if applicable). In the
absence of direction from a Participant with respect to the voting of Company
Stock allocated to his Account, the Trustee shall not vote such Company Stock.
9.7 Funding Policy. The Committee shall from time to time establish a funding
policy and method consistent with the objectives of the Plan and the
requirements of Title I of the Act. The funding policy and method so established
shall be reviewed by the Committee at least annually. In establishing and
reviewing such funding policy and method, the Committee shall consider the
short-term and long-term investment objectives and financial needs of the Plan,
taking into account the need for liquidity to pay for benefits and the need for
investment growth. All actions of the Committee in accordance with this Section
9.6 shall be communicated to the Trustee and to the Employer.
9.8 Investment Funds.
(a) Participants' Interests in Investment Funds. The Trust Fund shall
consist of one or more Investment Funds in which each Participant with any
interest therein shall have an undivided proportionate interest. Each
Participant's undivided proportionate interest in each Investment Fund shall be
determined according to the ratio that the value of the portion of such
Participant's Account which is invested in that Investment Fund bears to the
total value of all Participants' Accounts (or portions of them) invested in that
Investment Fund on the date of determination.
86
<PAGE> 95
(b) Addition or Deletion of Funds. The Committee shall have the right
to establish additional Investment Funds and abolish Investment Funds at any
time, in its Discretion, in furtherance of the funding policy and investment
objectives established by the Committee.
(c) Participant Elections. Whenever there shall exist two (2) or more
Investment Funds, each Participant may elect the portion of his Account which is
to be invested in each Investment Fund (or change an existing election). The
election (or change of an existing election) may apply both to the existing
Account balance and to future contributions and earnings thereon or, in the
Committee's Discretion, a Participant may elect to apply his investment election
separately to the Account and to future contributions and earnings thereon. Such
election (or change in an existing election) shall be accomplished by filing
election forms with the Committee at least thirty (30) days (or such other
period as the Committee, in its Discretion may determine) in advance of the
effective date for a change and the election (or change in an existing election)
shall be effective on such date. The Committee shall establish procedures
governing the percentage increments in which elections may be made, the portion
of each Participant's Account which will be subject to investment by the
Participant and the manner in which such elections can be made.
(d) Implementation. The Committee may instruct the Trustee to transfer
amounts among the Investment Funds in order to implement the instructions of
Participants concerning investment of their Accounts.
87
<PAGE> 96
ARTICLE X
TERMINATION AND AMENDMENT
10.1 Termination of Plan. It is the present intention of the Company
permanently to maintain the Plan and continue to make contributions under
Section 3.1 (Time and Amount of Company Contributions); provided, however, that
subject to the provisions of Section 11.2 (Nonforfeitability) and the
requirements of the Act and the Code:
(a) Pulte Home Corporation, acting through its Board of Directors,
reserves the right at any time to revoke or terminate the Plan in its entirety
or to partially terminate the Plan, or to terminate or temporarily or
permanently suspend its liability to make contributions to the Trust. Each
Company, acting through its Board of Directors, retains the right to terminate
the Plan to the extent that it relates to that Company and its Employees.
(b) In the event of any termination, partial termination or suspension
under paragraph (a) above, the Company shall give such timely notice thereof to
the Internal Revenue Service and the Department of Labor as may be required by
provisions of the Act or Code.
(c) In the event of any termination, partial termination or suspension
under paragraph (a) above, and subject to Section 11.2 (Nonforfeitability), the
right of each affected Participant (as to whom the Plan has terminated or with
respect to whom a suspension has occurred) to the amount credited to his Account
at the time of termination, suspension, or partial termination shall immediately
be Nonforfeitable.
(d) Termination of the Plan shall not have the effect of reducing or
eliminating any protected benefit, within the meaning of Section 411(d)(6) of
the Code and regulations promulgated thereunder.
88
<PAGE> 97
10.2 Liquidation of Trust. In the event of termination of the Plan without
establishment of a successor plan, the Trustee shall proceed as promptly as
possible, subject to any directions from the Committee, to liquidate all
investments, and shall thereupon determine the value of each Participant's
Account under Section 4.6 (Distributable Accounts) as of the date of
termination. After each such Account has been appropriately adjusted to cover
any expenses of distribution and final liquidation costs, the Trustee shall pay
the balance of such Account to the Participant (or, if deceased, his
Beneficiary) in a lump sum. For purposes of this Section 10.2, the term
"successor plan" means any other defined contribution plan (other than an
employee stock ownership plan) maintained by the Employer that exists at the
time the Plan is terminated or within the period ending twelve (12) months after
distribution of all assets from the Plan. Such other plan shall not be treated
as a successor plan, however, if fewer than two percent (2%) of the employees
who are eligible under this Plan at the time of its termination are or were
eligible under the other plan at any time during the twenty-four (24) month
period beginning twelve (12) months before the time of the termination.
10.3 Termination of Trust. Notwithstanding termination of the Plan, the Trust
shall terminate when the Trust Fund is entirely paid out and distributed in
accordance with its terms and the terms of this Plan.
10.4 Amendment. Pulte Home Corporation, acting through its Board of Directors
or its delegee, reserves the right at any time and from time to time, to amend
the Plan, without the consent of any Participant or Beneficiary, or any other
Company in any manner which it deems to be Proper, whether or not (i) for
reasons of business necessity or (ii) for the purpose of causing the Plan and
Trust to be Qualified or to continue to be Qualified.
(a) No Increase in Liabilities. No such amendment, except upon written
consent of the affected person, shall increase the duties or liabilities of the
Trustee or the Committee, or diminish their remuneration.
89
<PAGE> 98
(b) Retroactivity Allowed. Any modification, alteration or amendment
may be made effective retroactively within the limits satisfactory to the
Internal Revenue Service and the Department of Labor.
(c) Benefits Preserved. Notwithstanding anything contained in this
Section 10.4 to the contrary, no amendment to the Plan shall decrease the
Account balance of any Participant or have the effect of eliminating or reducing
any protected benefit within the meaning of Section 411(d)(6) of the Code or any
early retirement benefit or retirement-type subsidy or eliminating an optional
form for payment of benefits with respect to benefits attributable to service
accumulated prior to the amendment.
(d) Vesting Changes. In the event the Employer adopts an amendment to
the Plan which changes the Plan's vesting provisions such that the
Nonforfeitable percentage of any Participant, when determined under the Plan as
so amended, would at any time be less than would have been the case absent such
amendment, then the following rules shall apply.
(i) Election. Each Participant who has completed at least
three (3) years of service (within the meaning of
Treas. Reg. Section 1.411(a)-8T(b)(3)) shall be
permitted to elect, during the election period
described in (ii), to have his Nonforfeitable
percentage determined without regard to such
amendment.
(ii) Election Period. The election described in paragraph
(i) may be made during the period which begins not
later than the date on which the Plan amendment is
adopted and which ends no earlier than the latest of
the following dates:
(A) The date which is sixty (60) days after the
day the Plan amendment is adopted.
90
<PAGE> 99
(B) The date which is sixty (60) days after the
day the Plan amendment becomes effective.
(C) The date which is sixty (60) days after the
day the Participant is issued written notice
of the Plan amendment by the Employer or
Plan Administrator.
91
<PAGE> 100
ARTICLE XI
MISCELLANEOUS
11.1 No Reversions. Except as otherwise provided by Section 3.2 (Contributions
Conditioned Upon Deductibility) or Section 4.3 (Limitations on Annual
Contributions and Additions), the assets of the Trust shall never inure to the
benefit of the Company and shall be held for the exclusive purposes of providing
benefits to Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan; and the Company shall not be entitled to
receive or recover any part of its contributions to the Trust or the earnings
thereon.
11.2 Nonforfeitability. A Participant's right to his benefits under the Plan
shall be one hundred percent (100%) Nonforfeitable upon his reaching his Normal
Retirement Age (if that right had not previously become one hundred percent
(100%) Nonforfeitable); provided, however, that he is then employed by a member
of the Employer Group.
11.3 Merger, Consolidation, Etc. In no event may the Plan be merged or
consolidated with, or the assets or liabilities of the Trust Fund transferred
to, any other Qualified plan, unless each Participant would (if such other
Qualified plan were terminated after such merger, consolidation or transfer of
assets or liabilities) receive a benefit immediately after such merger,
consolidation or transfer which is not less than the benefit he would have been
entitled to receive (including protected benefits within the meaning of Section
411(d)(6) of the Code and regulations promulgated thereunder) had the Plan been
terminated immediately before such merger, consolidation or transfer.
11.4 Spendthrift Provision.
(a) No Assignment Permitted. To the extent permitted by law, no benefits,
payments, proceeds, claims, rights or interest of any Participant or
Beneficiary in, to or under the Plan, the Trust or any part of the Trust Fund,
shall be liable or subject to the debts, contracts, liabilities,
92
<PAGE> 101
engagements or torts of any such person, directly or indirectly, or subject to
any claim of any creditor of such person, through legal process or otherwise;
nor shall any such Participant or Beneficiary be able or permitted, voluntarily
or involuntarily, to transfer, encumber, pledge, anticipate, alienate or assign
any such benefits, payments, proceeds, claims, rights or interest, contingent or
otherwise, except as provided in Section 5.3(a) (Loans to Participants) and
Section 11.4(b) (Qualified Domestic Relations Orders). It is the intention and
purpose of the parties to this Plan to place the absolute title to the Trust
Fund in the Trustee alone, with power and authority to pay out the same only as
provided in this Plan.
(b) Qualified Domestic Relations Orders. Notwithstanding Section 11.4(a)
(No Assignment Permitted), the Trustee shall honor an assignment to, or
an order to segregate assets for, or instructions to make benefit payments to a
person other than a Participant or Beneficiary if the Committee so directs and
the Committee has determined that there exists either (i) a domestic relations
order entered before January 1, 1985 under which payments are being made or
which the Committee determines should be honored or (ii) a "qualified domestic
relations order", within the meaning of Section 414(p) of the Code, pursuant to
which such assignment, segregation, or payment is required. The Committee shall
establish written procedures for determining the existence of a "qualified
domestic relations order" and for compliance by the Plan with the applicable
provisions thereof.
11.5 Execution of Instruments. Except as otherwise expressly provided in this
Plan, any instrument or document to be delivered or furnished by the Company
shall be sufficiently executed if executed in the name of the Company by any of
its officers; or, where furnished or delivered by the Committee, if executed in
the name of the Committee by any member thereof; or where furnished or delivered
by the Trustee, if executed as follows:
(a) If the Trustee consists of two (2) or more persons, if executed in
the Trustee's name by any such person, and
93
<PAGE> 102
(b) In the case of any corporate Trustee (whether or not the sole
Trustee), if executed as Trustee in the name of such corporation by any of its
officers;
provided, further, that any Administrative Party shall be fully protected in
relying upon any instrument or document so executed; and such execution shall be
conclusive proof that any signature is duly authorized and that any information
contained in the instrument or document is true and correct.
11.6 Company Actions. Whenever the Company under this Plan is permitted or
required to do or perform any act or execute any paper or document, it shall be
performed or executed at the direction of the Board of Directors of the Company,
or by duly authorized officers or agents of the Company, and may be evidenced by
resolutions certified by the Secretary of the Company.
11.7 Successors, Etc. This Agreement shall be binding upon, and inure to the
benefit of, the Company and subject to Sections 10.1 (Termination of Plan) and
10.4 (Amendment), its successors, the Trustee and its successors, the Committee
as from time to time constituted, and the Participants and Beneficiaries, their
heirs, personal representatives, successors, and assigns, all in accordance with
and subject to the terms of this Plan.
11.8 Miscellaneous Protective Provisions. Except as otherwise provided in this
Plan or the Act:
(a) Any Administrative Party may request and rely upon an opinion of
counsel, who may or may not be counsel for the Company, and shall be fully
protected for any action taken, suffered or omitted in good faith reliance upon
such opinion.
(b) No recourse under this Plan, or for any action or nonaction
hereunder or for any loss or diminution of the Trust Fund, or for any payment or
nonpayment of benefits, or for any other reason whatsoever relating to the Plan,
shall be had by any person whomsoever against any stockholder, officer, director
or Employee of the Company as such, past, present or future.
94
<PAGE> 103
(c) Where the establishment of any fact is in question, any
Administrative Party may in its Discretion accept as evidence thereof any
properly executed instrument or document furnished by any other Administrative
Party or such other evidence as may seem reasonable in the circumstances.
11.9 Common Control and Successorship Situations. To the extent required by
Section 414 of the Code, the following rules shall apply.
(a) Predecessor Employers. Service with a predecessor employer shall be
treated as service with the Company, and service with the Company shall be
treated as service with a successor employer, if the Plan was taken over from
such predecessor or is taken over by such successor, as the case may be.
(b) Transfers Within Employer Group. For purposes of the participation
and vesting provisions of the Plan, in the event that an employee of a
corporation or other trade or business, whether or not incorporated, which is a
member of the Employer Group is transferred to employment with the Company (or
from employment with the Company to employment with a member of the Employer
Group which has not adopted the Plan), his service with such member or members
of the Employer Group shall be treated as service with the Company. In the event
a Participant is transferred to employment by an employer which is a member of
such Employer Group, the transferred Participant's employment by the Company and
participation in the Plan shall not be deemed terminated by reason of such
transfer, except that such transferred Participant's Account shall not be
credited with any portion of the Company Contributions, Elective Deferrals,
Regular Matching Contributions, Discretionary Matching Contributions or
forfeitures arising with respect to a Plan Year ending within a taxable year of
the Company after the taxable year in which such transfer occurred. For purposes
of eligibility for benefits hereunder, a Participant so transferred shall be
deemed to have severed employment with the Company at the time he is no longer
employed by an employer which is a member of the Employer Group.
95
<PAGE> 104
(c) Multiple Employers. If and while the Plan is maintained by more
than one employer, the participation provisions of the Plan shall be applied as
if all employees of each of the employers were employed by a single employer,
and the vesting provisions of the Plan shall be applied as if all such employers
constituted a single employer.
11.10 Indemnification by Company. To the extent permitted by the Act, the
Company shall indemnify and save harmless the Committee members and other
fiduciaries of the Plan (other than the Trustee) who are officers, directors,
shareholders or Employees of the Company against any liabilities incurred by
them in the exercise and performance of their powers and duties under the Plan
to the extent that such protection would be afforded by insurance coverage under
Section 410(b)(3) of the Act.
11.11 Employment Rights Not Enlarged. The Plan as now or may hereafter exist,
shall not be construed as giving any Participant or any other person whomsoever
any legal or equitable right against the Company, or as giving any Participant
the right to be continued in the employ of the Company, and all Employees and
all Participants shall remain subject to discharge to the same extent as if this
Plan had not been adopted.
11.12 Correction of Errors and Recoupment. If any error or change in records
results in any Participant or Beneficiary receiving from the Plan more or less
than the amount to which he would have been entitled to receive had the records
been correct or had the error not been made, the Committee shall correct the
error by adjusting, as far as practicable, the future payments in such a manner
that the benefits to which such person was correctly entitled shall be paid. The
Committee shall be entitled to recoup amounts which are overpaid to a
Participant or Beneficiary and may choose to recoup by requesting repayment from
such person either in addition to or instead of adjusting future benefit
payments to such person.
96
<PAGE> 105
11.13 Effect of Participant's Acceptance of Payments. Acceptance by any
Participant or Beneficiary of benefit payments from the Plan shall, to the
extent of such payment, constitute a release of the Plan from liability in
connection with such payment.
11.14 Notification of Address. Each Participant, former Participant and
Beneficiary shall furnish the Committee with such information as the Committee
may reasonably require. This information shall include written notice of his
current post office address and any change in that address. The Company,
Committee and Trustee shall be entitled to rely upon the last post office
address furnished to the Committee by such person for purposes of providing
notice to such person, payment of benefits or any other purpose.
11.15 Source of Benefit Payments. A Participant, Beneficiary or other person
claiming benefits under the Plan shall be required to look only to the Trust for
payment of his benefits and benefits are payable from the Trust only to the
extent funded through the Trust. Neither the Trustee nor the Company shall have
any liability to provide benefits which cannot be provided with amounts held in
the Trust.
97
<PAGE> 106
ARTICLE XII
TRANSFERRED ASSETS
12.1 Right to Transfer. The Committee may, in its Discretion, direct the
Trustee to accept Transferred Assets on behalf of a Participant or Covered
Employee (who, for purposes of this Article XII shall be treated as if he is a
Participant); provided, however, that the Transferred Assets shall be credited
to the account established for the Participant to receive the Transferred Assets
(his "Transferred Assets Account"). Notwithstanding the provisions of this
Article XII to the contrary, the Plan shall not accept a transfer of assets with
respect to a Participant or Covered Employee directly from any plan if the
transfer would cause this Plan to be a direct or indirect transferee of a plan
to which Section 401(a)(11)(B) of the Code applies.
12.2 Accounting for Transferred Assets. Transferred Assets shall be credited
to the Participant's Transferred Assets Account within thirty (30) days after
the date they are paid to and accepted by the Trustee and shall be adjusted for
distributions, loans, expenses, profits and losses (but not forfeitures) in the
manner described in Section 4.4 (Periodic Adjustments to Accounts) as if such
transferred portion of the Account in question were, in fact, a separate
account.
12.3 Nonforfeitability of Transferred Assets. Transferred Assets shall at all
times be Nonforfeitable. In the event of any circumstances giving rise to
forfeiture of all or part of a Participant's Company Contribution Account, then
(notwithstanding such forfeiture) he shall be entitled to receive the full
amount of his Transferred Assets Account.
12.4 Distribution of Transferred Assets. Any balance in a Participant's
Transferred Assets Account shall be distributed to the Participant (or his
Beneficiary) either at the time and in the manner as other benefits payable to
him under the Plan.
98
<PAGE> 107
ARTICLE XIII
EXECUTION
IN WITNESS WHEREOF, Pulte Home Corporation has caused this Plan,
captioned "Pulte Home Corporation Investment Savings Plus," as amended and
restated effective as of January 1, 1997, to be executed by its duly authorized
officer this 31st day of March, 1998.
PULTE HOME CORPORATION
By: /s/ Michael O'Brien
----------------------------
Its: Sr. V.P.
------------------
99
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to Pulte Home Corporation Investment Savings Plus Plan of
Pulte Corporation of our report dated January 21, 1998, except for the last
paragraph of Note 10 as to which the date is March 5, 1998, with respect to the
consolidated financial statements and schedule of Pulte Corporation included in
its Annual Report on Form 10-K for the year ended December 31, 1997, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Detroit, Michigan
April 24, 1998
