<PAGE>
As filed with the Securities and Exchange Commission on January 10, 1995
Registration No. 33-_______
========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------
FORM S-8
Registration Statement
Under
The Securities Act of 1933
----------------------------------------
SCOTSMAN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3635892
- ------------------------------ --------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
------------------------------------------------------------
(Address of principal executive offices, including zip code)
SCOTSMAN TAX REDUCTION INVESTMENT PLAN
(Full title of the plan)
Donald D. Holmes
Vice President-Finance
Scotsman Industries, Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
(Name and address of agent for service)
(708) 215-4447
(Telephone number, including area code, of agent for service)
With a copy to:
Shirley M. Lukitsch
Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
(312) 258-5602
------------------------------------------
CALCULATION OF REGISTRATION FEE
[CAPTION]
<TABLE>
======================================================================================================================
Proposed Proposed
maximum maximum Amount of
Amount to be offering price aggregate registration
registered per share offering price fee
Title of Securities to be Registered (1) (2) (2) (2)
<S> <C> <C> <S><C> <S><C>
Common Stock, par value $.10 per share
(including associated Common Stock
Purchase Rights) 300,000 $17.1875 $5,156,250 $1,778.02
Interests in the Plan (3) (3) (3) (3)
======================================================================================================================
</TABLE>
(1) Based upon the number of shares that would be purchased by the
trustee of the trust established in connection with the Scotsman
Tax Reduction Investment Plan (the "Plan") on behalf of the Plan
during the two-year period beginning with the effective date of
this Registration Statement, if the estimated aggregate employee
contributions during such period were invested in such Common
Stock at $17.1875 per share, the average of the high and low
sales prices reported on the New York Stock Exchange consolidated
reporting system on January 6, 1995. No maximum number of shares
are issuable under the Plan.
(2) Estimated on the basis of $17.1875 per share, the average of the
high and low sales prices as quoted on the New York Stock
Exchange consolidated reporting system on January 6, 1995,
pursuant to Rule 457(h) and 457(c).
(3) In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this Registration Statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the Plan
described herein for which no separate fee is required.
- 2 -<PAGE>
GENERAL INSTRUCTIONS
E. Registration of Additional Securities
The purpose of this Registration Statement on Form S-8 is to
register an additional 300,000 shares of common stock, $.10 par value
per share (the "Common Stock"), and the associated Common Stock
Purchase Rights (the "Rights") of the Registrant issuable pursuant to
the Scotsman Tax Reduction Investment Plan, as amended and restated
effective December 28, 1994 (the "Plan"), together with the
participants' interests in the Plan. The contents of the Registrant's
previously filed Registration Statement on Form S-8, File No.
33-35870, filed with the Securities and Exchange Commission on July
13, 1990 registering shares of Common Stock and the associated Rights
issuable under the Plan, together with the participants' interests in
the Plan, are hereby incorporated by reference in this Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
All information required in this Registration Statement not
included in the exhibits filed herewith or set forth on the signature
page is set forth in the Registrant's previously filed Registration
Statement on Form S-8, File No. 33-35870, which is incorporated by
reference herein.
ITEM 8. EXHIBITS.
A. Exhibits:
The exhibits filed herewith or incorporated by reference
herein are set forth in the Exhibit Index filed as part of this
registration statement on page 5 hereof.
B. Undertaking Pursuant to Item 8(b):
The undersigned registrant hereby undertakes to submit the
Plan and any amendment thereto as of the date hereof to the Internal
Revenue Service ("IRS") in a timely manner, and to make all changes
required by the IRS in order to qualify the Plan under Section 401 of
the Internal Revenue Code.
- 3 -<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Vernon Hills, State of Illinois, on
December 15, 1994.
SCOTSMAN INDUSTRIES, INC.
(Registrant)
By: /s/ Richard C. Osborne
---------------------------------
Richard C. Osborne
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints Richard
C. Osborne and Donald D. Holmes or either of them, as such person's
true and lawful attorneys to execute in the name of each such person,
and to file, any amendments to this registration statement that either
of such attorneys will deem necessary or desirable to enable the
Registrant to comply with the Securities Act of 1933, as amended, and
any rules, regulations, and requirements of the Securities and
Exchange Commission with respect thereto, in connection with the
registration of the shares of Common Stock (and the Common Stock
Purchase Rights associated therewith) and interests in the Plan that
are subject to this registration statement, which amendments may make
such changes in such registration statement as either of the above-
named attorneys deems appropriate, and to comply with the undertakings
of the Registrant made in connection with this registration statement;
and each of the undersigned hereby ratifies all that either of said
attorneys will do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons
in the capacities and on the dates indicated.
- 4 -<PAGE>
[CAPTION]
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard C. Osborne Chairman of the Board, December 15, 1994
- --------------------------- President, Chief Executive
Richard C. Osborne Officer and Director
(Principal Executive Officer)
/s/ Donald D. Holmes Vice President -- Finance December 15, 1994
- --------------------------- (Principal Financial and
Donald D. Holmes Accounting Officer)
/s/ Donald C. Clark Director December 15, 1994
- ---------------------------
Donald C. Clark
/s/ Frank W. Considine Director December 15, 1994
- ---------------------------
Frank W. Considine
/s/ Timothy C. Collins Director December 15, 1994
- ---------------------------
Timothy C. Collins
/s/ Matthew O. Diggs, Jr. Director December 15, 1994
- ---------------------------
Matthew O. Diggs, Jr.
/s/ George D. Kennedy Director December 15, 1994
- ---------------------------
George D. Kennedy
/s/ James J. O'Connor Director December 15, 1994
- ---------------------------
James J. O'Connor
/s/ Robert G. Rettig Director December 15, 1994
- ---------------------------
Robert G. Rettig
</TABLE>
- 5 -<PAGE>
THE PLAN. Pursuant to the requirements of the Securities
Act of 1933, the Plan has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized,
in the Village of Vernon Hills, State of Illinois, on December 28,
1994.
SCOTSMAN TAX REDUCTION
INVESTMENT PLAN
By: /s/ Richard M. Holden
--------------------------
Richard M. Holden
Plan Administrator
- 6 -<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page No.
- -------- ---------------------------------------- --------
4.1 Scotsman Tax Reduction Investment 8
Plan, as amended and restated
effective December 28, 1994.
4.2 Trust Agreement, dated as of December 118
29, 1994, among Putnam Fiduciary Trust
Company, Scotsman Industries, Inc.,
and The Delfield Company.
4.3 Restated Certificate of Incorporation
of the Registrant (incorporated herein
by reference to the Registrant's 10-K
for the fiscal year ended December 31,
1989, File No. 0-10182).
4.4 By-Laws of the Registrant, as amended
(incorporated herein by reference to
the Registrant's 8-K, dated June 21,
1991, File No. 0-10182).
4.5 Rights Agreement, dated as of April
14, 1989, between Scotsman Industries,
Inc. and Harris Trust & Savings Bank
(incorporated herein by reference to
the Registrant's Current Report on
8-K, dated April 25, 1989, File No.
0-10182), as amended by Amendment
No. 1 thereto, dated as of January 11,
1994 (incorporated herein by reference
to Scotsman Industries, Inc. Amendment
No. 4 to General Form for Registration
of Securities on Form 10/A, as filed
with the Commission on January 27,
1994, File No. 0-10182).
5 Opinion of Schiff Hardin & Waite. 143
23.1 Consent of Arthur Andersen LLP 144
23.2 Consent of Schiff Hardin & Waite
(contained in their opinion filed as
Exhibit 5).
24 Powers of Attorney (contained on
the signature pages hereto).
EXHIBIT 4.1
SCOTSMAN
TAX REDUCTION INVESTMENT PLAN
As Amended and Restated
Effective April 1, 1989
- 8 -<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 INTRODUCTION . . . . . . . . . . . . . . . . . . . 13
1.1 INTRODUCTION . . . . . . . . . . . . . . . . . . . 13
ARTICLE 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . 14
2.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3 PARTICIPATION AND YEARS OF SERVICE . . . . . . . . 23
3.1 ELIGIBILITY TO PARTICIPATE . . . . . . . . . . . . 23
3.2 COMMENCEMENT OF PARTICIPATION . . . . . . . . . . 23
3.3 WAIVER OF PARTICIPATION . . . . . . . . . . . . . 24
3.4 TRANSFERS FROM ELIGIBLE EMPLOYMENT . . . . . . . . 24
3.5 HOUR OF SERVICE . . . . . . . . . . . . . . . . . 26
3.6 YEAR OF SERVICE . . . . . . . . . . . . . . . . . 27
3.7 PARTICIPATION AND SERVICE UPON REEMPLOYMENT . . . 28
3.8 PREDECESSOR SERVICE . . . . . . . . . . . . . . . 29
ARTICLE 4 CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 29
4.1 TAX REDUCTION CONTRIBUTIONS . . . . . . . . . . . 29
4.2 TAX REDUCTION AGREEMENT . . . . . . . . . . . . . 30
4.3 INVESTMENT PLAN CONTRIBUTIONS . . . . . . . . . . 32
4.4 INVESTMENT PLAN AGREEMENT . . . . . . . . . . . . 33
4.5 MATCHING COMPANY CONTRIBUTIONS . . . . . . . . . . 35
ARTICLE 5 LIMITATIONS ON TAX REDUCTION CONTRIBUTIONS . . . . 36
5.1 DOLLAR LIMITATION . . . . . . . . . . . . . . . . 36
5.2 MAXIMUM DEFERRAL PERCENTAGE . . . . . . . . . . . 37
5.3 DEFINITIONS . . . . . . . . . . . . . . . . . . . 37
5.4 FAMILY MEMBERS . . . . . . . . . . . . . . . . . . 40
5.5 PROSPECTIVE REDUCTION OF TAX REDUCTION
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 40
ARTICLE 6 LIMITATION ON INVESTMENT PLAN AND MATCHING
COMPANY CONTRIBUTIONS . . . . . . . . . . . . . . 41
6.1 MAXIMUM CONTRIBUTION PERCENTAGE . . . . . . . . . 41
6.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . 42
6.3 PROSPECTIVE REDUCTION OF INVESTMENT PLAN
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 42
6.4 TESTING OF TAX REDUCTION CONTRIBUTIONS UNDER
MAXIMUM CONTRIBUTION PERCENTAGE TEST . . . . . . . 43
ARTICLE 7 MULTIPLE USE LIMITATION . . . . . . . . . . . . . 44
- 9 -<PAGE>
ARTICLE 8 CORRECTION OF TAX REDUCTION CONTRIBUTIONS IN
EXCESS OF DOLLAR LIMITATION . . . . . . . . . . . 46
8.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . 46
8.2 DESIGNATION AS EXCESS DEFERRAL . . . . . . . . . . 46
8.3 DISTRIBUTION . . . . . . . . . . . . . . . . . . . 47
8.4 COORDINATION WITH EXCESS TAX REDUCTION
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 47
ARTICLE 9 CORRECTION OF EXCESS CONTRIBUTIONS . . . . . . . . 48
9.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . 48
9.2 MAXIMUM DEFERRAL PERCENTAGE TEST -- EXCESS TAX
REDUCTION CONTRIBUTIONS . . . . . . . . . . . . . 48
9.3 RECHARACTERIZATION OF EXCESS TAX REDUCTION
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 49
9.4 DISTRIBUTION OF EXCESS TAX REDUCTION
CONTRIBUTION . . . . . . . . . . . . . . . . . . . 50
9.5 MAXIMUM CONTRIBUTION PERCENTAGE TEST -- EXCESS
AGGREGATE CONTRIBUTION . . . . . . . . . . . . . . 51
9.6 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS . . 51
9.7 FORFEITURE OF MATCHING COMPANY CONTRIBUTIONS . . . 52
9.8 ALLOCABLE INCOME . . . . . . . . . . . . . . . . . 53
9.9 TIMING OF CORRECTIONS . . . . . . . . . . . . . . 53
9.10 SPECIAL RULE FOR RECHARACTERIZED AMOUNTS . . . . . 53
9.11 ADDITIONAL COMPANY CONTRIBUTIONS . . . . . . . . . 53
9.12 HIGHLY COMPENSATED INDIVIDUAL ELECTIONS . . . . . 54
9.13 OTHER PERMISSIBLE METHODS OF TESTING AND
CORRECTION . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 10 LIMITATIONS ON ANNUAL ADDITIONS . . . . . . . . . 54
10.1 BASIC LIMITATION . . . . . . . . . . . . . . . . . 54
10.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . 55
10.3 LIMITATION ON COMBINATION OF PLANS . . . . . . . . 56
10.4 PROSPECTIVE ADJUSTMENT TO CONTRIBUTIONS . . . . . 56
10.5 DISPOSAL OF EXCESS ANNUAL ADDITIONS . . . . . . . 57
ARTICLE 11 GENERAL PROVISIONS REGARDING CONTRIBUTIONS . . . . 59
11.1 MANNER OF MAKING CONTRIBUTIONS . . . . . . . . . . 59
11.2 LIMITATION TO AMOUNT DEDUCTIBLE . . . . . . . . . 59
11.3 RETURN OF CONTRIBUTIONS . . . . . . . . . . . . . 60
ARTICLE 12 ROLLOVERS AND TRANSFERS . . . . . . . . . . . . . 61
12.1 ROLLOVERS . . . . . . . . . . . . . . . . . . . . 61
12.2 TRANSFERS FROM OTHER PLAN . . . . . . . . . . . . 62
12.3 SECTION 401(K) LIMITATIONS . . . . . . . . . . . . 63
12.4 TRANSFERS TO OTHER PLAN . . . . . . . . . . . . . 63
- 10 -<PAGE>
ARTICLE 13 ACCOUNTS AND ALLOCATION OF FUNDS . . . . . . . . . 65
13.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE . . . . . . . 65
13.2 TRUST FUND VALUATION . . . . . . . . . . . . . . . 65
13.3 ALLOCATION OF CONTRIBUTIONS TO PARTICIPANTS'
SEPARATE ACCOUNTS . . . . . . . . . . . . . . . . 65
13.4 ADJUSTMENTS TO PARTICIPANTS' ACCOUNTS . . . . . . 66
13.5 PARTICIPANT-DIRECTED INVESTMENTS FOR FUTURE
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 67
13.6 INVESTMENT OF MATCHING COMPANY CONTRIBUTIONS;
FORFEITURES . . . . . . . . . . . . . . . . . . . 68
13.7 INVESTMENT TRANSFERS . . . . . . . . . . . . . . . 68
13.8 SPECIAL INVESTMENT RULES FOR 1989 PLAN YEAR . . . 69
13.9 SPECIAL INVESTMENT ELECTION PERIODS . . . . . . . 70
ARTICLE 14 VESTING; FORFEITURES . . . . . . . . . . . . . . . 71
14.1 VESTING OF ACCOUNTS . . . . . . . . . . . . . . . 71
14.2 FORFEITURE OF NON-VESTED INTEREST . . . . . . . . 72
14.3 RESTORATION OF NON-VESTED INTEREST . . . . . . . . 73
14.4 RESTORATION OF YEARS OF MATCHING COMPANY
ACCOUNT . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 15 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . 75
15.1 TIMING OF DISTRIBUTIONS; APPLICABLE VALUATION
DATE . . . . . . . . . . . . . . . . . . . . . . . 75
15.2 METHOD OF DISTRIBUTION . . . . . . . . . . . . . . 77
15.3 DESIGNATION OF BENEFICIARY . . . . . . . . . . . . 78
15.4 ELECTION OF DISTRIBUTION . . . . . . . . . . . . . 80
15.5 CODE SECTION 401(A)(9) . . . . . . . . . . . . . . 81
ARTICLE 16 WITHDRAWALS . . . . . . . . . . . . . . . . . . . 75
16.1 WITHDRAWAL CATEGORIES . . . . . . . . . . . . . . 84
16.2 HARDSHIP WITHDRAWALS . . . . . . . . . . . . . . . 85
16.3 MANNER OF MAKING WITHDRAWALS . . . . . . . . . . . 87
16.4 WITHDRAWALS UPON ATTAINMENT OF AGE 59-1/2 . . . . 88
16.5 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . 89
ARTICLE 17 LOANS . . . . . . . . . . . . . . . . . . . . . . 90
17.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . 90
17.2 AMOUNT OF LOAN . . . . . . . . . . . . . . . . . . 90
17.3 SECURITY FOR LOAN . . . . . . . . . . . . . . . . 91
17.4 INTEREST RATE CHARGED . . . . . . . . . . . . . . 91
17.5 REPAYMENT OF LOANS . . . . . . . . . . . . . . . . 91
17.6 DEFAULT ON LOAN . . . . . . . . . . . . . . . . . 93
17.7 MANNER OF MAKING LOANS . . . . . . . . . . . . . . 94
17.8 ACCOUNTING FOR LOANS . . . . . . . . . . . . . . . 95
- 11 -<PAGE>
ARTICLE 18 ADMINISTRATION . . . . . . . . . . . . . . . . . . 95
18.1 ALLOCATION OF RESPONSIBILITIES AMONG
FIDUCIARIES . . . . . . . . . . . . . . . . . . . 95
18.2 POWERS AND RESPONSIBILITIES OF THE COMMITTEE . . . 96
18.3 CONCLUSIVENESS OF RECORDS . . . . . . . . . . . . 98
18.4 EXPENSES . . . . . . . . . . . . . . . . . . . . . 98
18.5 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . 98
ARTICLE 19 AMENDMENT, TERMINATION AND MERGER . . . . . . . . 101
19.1 AMENDMENTS . . . . . . . . . . . . . . . . . . . . 101
19.2 PLAN TERMINATION . . . . . . . . . . . . . . . . . 101
19.3 DISTRIBUTIONS UPON CERTAIN SALES . . . . . . . . . 102
19.4 SUCCESSOR EMPLOYER . . . . . . . . . . . . . . . . 103
19.5 MERGER, CONSOLIDATION OR TRANSFER . . . . . . . . 103
ARTICLE 20 MISCELLANEOUS . . . . . . . . . . . . . . . . . . 104
20.1 EXCLUSIVE BENEFIT OF PARTICIPANTS AND
BENEFICIARIES . . . . . . . . . . . . . . . . . . 104
20.2 NON-GUARANTEE OF EMPLOYMENT . . . . . . . . . . . 104
20.3 RIGHTS TO TRUST ASSETS . . . . . . . . . . . . . . 104
20.4 NON-ALIENATION OF THE RIGHT TO RECEIVE PAYMENTS . 105
20.5 CONTROLLING LAW . . . . . . . . . . . . . . . . . 106
20.6 PLAN CONTROLS . . . . . . . . . . . . . . . . . . 106
20.7 CONSTRUCTION . . . . . . . . . . . . . . . . . . . 106
20.8 EFFECT OF MISTAKE . . . . . . . . . . . . . . . . 107
20.9 UNCLAIMED FUNDS . . . . . . . . . . . . . . . . . 107
ARTICLE 21 TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . 108
21.1 TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . 108
21.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . 108
21.3 MINIMUM ALLOCATION . . . . . . . . . . . . . . . . 113
21.4 NONFORFEITABILITY OF MINIMUM ALLOCATION . . . . . 115
21.5 MINIMUM VESTING SCHEDULES . . . . . . . . . . . . 115
21.6 COLLECTIVE BARGAINING RULES . . . . . . . . . . . 116
21.7 TEMPORARY EFFECT . . . . . . . . . . . . . . . . . 116
ARTICLE 22 INTERNAL REVENUE SERVICE APPROVAL . . . . . . . . 116
- 12 -<PAGE>
ARTICLE 1
INTRODUCTION
------------
1.1 INTRODUCTION.
This plan was established by Scotsman Group Inc., effective April
1, 1989, for the benefit of its eligible employees and eligible
employees of subsidiaries thereof in order to encourage their personal
savings. The Plan is amended and restated, effective April 1, 1989
(except as otherwise indicated), as herein-after set forth, to
incorporate all amendments to the Plan since it was established, and
to comply with all applicable statutory and regulatory requirements.
The Plan is to be maintained according to the terms and conditions of
this instrument. The assets of the Plan are held, administered and
managed in accordance with the terms and conditions of the Trust
Agreement, which is considered to be an integral part of the Plan.
The Plan is intended to be a qualified profit sharing plan under
Section 401(a) of the Internal Revenue Code with a cash or deferred
arrangement that is qualified under Section 401(k) of the Code.
Except as otherwise provided in the Plan or amendments, any
amendment to the Plan, including this amendment and restatement, shall
apply solely to employees whose employment with Scotsman Group Inc.
and its subsidiaries is terminated on or after the effective date of
the applicable amendment. The rights of an employee whose employment
is terminated prior to the effective date of an applicable amendment
shall be determined solely by the provisions of the Plan as in effect
on the date of his termination of employment.
- 13 -<PAGE>
Prior to April 1, 1989, certain employees covered by this Plan
participated in the Household International Tax Reduction Investment
Plan. Such employees' account balances under such plan have been
transferred to this Plan.
ARTICLE 2
DEFINITIONS
-----------
2.1 DEFINITIONS.
Whenever used in the Plan the following terms shall have the
respective meanings set forth below unless otherwise expressly
provided in the Plan:
"Affiliate" means any company that is included as a member with a
Company in a controlled group of corporations, as described in Section
414(b) of the Code, any trade or business (whether or not
incorporated) that is under common control with a Company as described
in Section 414(c) of the Code, any trade or business that, with a
Company, is a member of an affiliated service group as described in
Section 414(m) of the Code, and any other trade or business required
to be aggregated with a Company pursuant to Section 414(o) of the
Code. Service, Compensation or their credit under the Plan shall be
given for periods of employment with an Affiliate only if such periods
occur at a time when there was an Affiliate relationship with the
Company as described herein.
"Board of Directors" means the Board of Directors of Scotsman
Group Inc., or any committee of the Board authorized to act on its
behalf.
- 14 -<PAGE>
"Break in Service" means the termination of employment of an
Employee followed by the expiration of an Employment Year in which the
Employee accumulates fewer than 501 Hours of Service. For purposes of
this paragraph:
(1) A Break in Service shall not be deemed to have occurred
if:
a) the employment of a terminated Employee is resumed
prior to the expiration of an Employment Year in which he
accumulates fewer than 501 Hours of Service;
b) the Employee is absent with the prior consent of a
Company for a period not exceeding 12 months (which consent
shall be granted under uniform rules applied to all
Employees on a nondiscriminatory basis) and he returns to
active employment with a Company or an Affiliate upon the
expiration of the period of authorized absence; or
c) he leaves a Company to serve in the armed forces
of the United States for a period during which his
reemployment rights are guaranteed by law and he returns or
offers to return to work for the Company or an Affiliate
prior to the expiration of his reemployment rights.
(2) An Employee who is absent from work with a Company
because of (i) the Employee's pregnancy, (ii) the birth of the
Employee's child, (iii) the placement of a child with the
Employee in connection with the Employee's adoption of the child,
or (iv) caring for such child immediately following such birth or
placement, shall receive credit, solely for purposes of
- 15 -<PAGE>
determining whether a Break in Service has occurred under this
paragraph, for the Hours of Service described in subsection (3)
of this paragraph; provided that the total number of hours
credited as Hours of Service under this subsection shall not
exceed 501 Hours of Service.
(3) In the event of an Employee's absence from work for any
of the reasons set forth in subsection (2) of this paragraph, the
Hours of Service that the Employee will be credited with under
subsection (2) are (i) the Hours of Service that otherwise would
normally have been credited to the Employee but for such absence,
or (ii) eight Hours of Service per day of such absence if the
Committee is unable to determine the Hours of Service described
in clause (i).
(4) An Employee who is absent from work for any of the
reasons set forth in subsection (2) of this paragraph shall be
credited with Hours of Service under subsection (2), (i) only in
the Employment Year in which the absence begins, if the Employee
would be prevented from incurring a Break in Service in that Year
solely because the period of absence is treated as credited Hours
of Service, as provided in subsections (2) and (3), or (ii) in
any other case, in the immediately following Employment Year.
(5) No credit for Hours of Service will be given pursuant
to subsections (2), (3) and (4) of this paragraph unless the
Employee furnishes to the Committee such timely information that
the Committee may reasonably require to establish (i) that the
absence from work is for one of the reasons specified in
- 16 -<PAGE>
subsection (2) and (ii) the number of days for which there was
such an absence. No credit for Hours of Service will be given
pursuant to subsections (2), (3) and (4) for any purpose of the
Plan other than the determination of whether an Employee has
incurred a Break in Service pursuant to this paragraph.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor legislation thereto, and includes any regulations
promulgated thereunder.
"Committee" means the Administrative and Investment Committee
which is a committee of at least three employees of the Company
appointed by the Chief Executive Officer of Scotsman Group Inc., and
serving at the pleasure of Scotsman Group Inc.
"Company" means Scotsman Group Inc., and any direct or indirect
U.S. subsidiary that with the consent of the Committee, adopts the
Plan for the benefit of some or all of its employees. The Committee
shall have the exclusive right to determine whether any subsidiary
shall be a Company that participates in this Plan and the employees of
such subsidiary covered hereby.
"Company Stock" means common stock par value $.10 per share of
Scotsman Industries, Inc.
"Compensation" means the total base wages or salary paid by the
Company in cash to an Employee, including bonuses, severance pay, pay
in lieu of vacation, commissions and overtime payments, prior to any
reduction for contributions that are made to the Trust on behalf of
the Employee in accordance with his tax reduction agreement under
Article 4.2 and prior to any reduction for contributions to any
- 17 -<PAGE>
cafeteria plan covered by Section 125 of the Code maintained by a
Company.
In the event that an Employee receives Company Stock as a bonus,
the stock shall be valued at the high/low average of the New York
Stock Exchange Composite as reported in the Wall Street Journal on the
date of the award and this amount shall be considered Compensation.
The maximum amount of Compensation taken into account under the
Plan in any Plan Year commencing after December 31, 1988 and prior to
January 1, 1994, for purposes of the Plan, including without
limitation, determining the amount of a Participant's Tax Reduction
Contributions, Investment Plan Contributions and Matching Company
Contributions shall be $200,000, adjusted pursuant to Section
401(a)(17) of the Code.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Participant taken into account under the
Plan shall not exceed the OBRA '93 annual compensation limit. The
OBRA '93 annual compensation limit is $150,000, as adjusted by the
Commissioner of Internal Revenue for increases in the cost of living
in accordance with Section 401(a)(17)(B) of the Code. The cost-of-
living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
- 18 -<PAGE>
numerator of which is the number of months in the determination
period, and the denominator of which is 12. For Plan Years beginning
on or after January 1, 1994, any reference in the Plan to the
limitation under Section 401(a)(17) of the Code shall mean the OBRA
'93 annual compensation limit set forth in this provision. If
Compensation for any prior determination period is taken into account
in determining a Participant's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject
to the OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
"Disability" means the physical or mental disability of an
Employee whereby such Employee is disabled by bodily injury or disease
and will be prevented thereby from engaging in any employment for the
Company.
"Effective Date" means April 1, 1989, the original effective date
of the Plan.
"Employee" means any salaried individual employed by a Company to
whom the Plan is extended when the Plan is adopted by the Company. A
person who is not an employee of a Company and who performed services
for a Company pursuant to an agreement between the Company and a
leasing organization shall be considered a "leased" employee if such
person performs such services on a substantially full-time basis for
at least twelve months and the services are of a type historically
- 19 -<PAGE>
performed by employees in the business field of the Company. A person
who is considered a leased employee of a Company shall not be
considered an Employee for purposes of the Plan other than for
purposes of determining Years of Service and Years of Matching Company
Account pursuant to Articles 3.6 and 14.1 that a person earns that
would be considered if and when he becomes an Employee other than by
reason of being a leased employee. In any event, a leased employee's
Years of Service and Years of Matching Company Account shall not be
considered if the requirements of Section 414(n)(5) of the Code are
satisfied with respect to such person.
"Employment Year" means a twelve consecutive month period
commencing with an Employee's initial date of hire (or last date of
rehire if he has incurred a Break in Service) or with any anniversary
thereof. For purposes hereof, an Employee's date of hire shall be the
first day on which he completes an Hour of Service and his date of
rehire shall be the first day on which he completes an Hour of Service
following a Break in Service.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and includes any regulations promulgated thereunder.
"Fiscal Year" means the taxable year of Scotsman Group Inc.
ending on December 31st.
"Hour of Service" has the meaning set forth in Article 3.5.
"Investment Fund" means any of the following funds of the Trust
Fund established from time to time by the Committee:
Fund A - This Fund invests entirely in the Company's stock which
is listed on the New York Stock Exchange.
- 20 -<PAGE>
Fund B - Fixed Income Fund - This Fund is a fixed income fund
investing primarily in guaranteed investment contracts and other short
term money funds.
Fund C - Bond Income Fund - This Fund invests in a variety of
bonds with an emphasis on corporate bonds from creditworthy companies.
Fund D - Balanced Fund - This Fund is a balanced fund investing
in stocks and corporate and government bonds.
Fund E - Growth and Income Fund - This Fund invests primarily in
attractively priced stocks of companies that offer long-term growth
while also providing income.
Fund F - International Equity Fund - This Fund invests primarily
in stocks of companies in the Pacific Rim, across Europe, within the
Americas, and elsewhere in the world to pursue a wide range of growth
potential.
Fund G - Aggressive Growth Fund - This Fund invests in a
combination of smaller companies expected to grow over time, as well
as in larger, more established corporations.
Fund A/Household - Household International, Inc. Common Stock
Fund. This fund shall primarily be composed of investments in
Household International, Inc. common stock and is attributable to
certain amounts transferred from the Prior Plan. All references in
the Plan to this Fund shall only apply to Plan Years ending prior to
January 1, 1995.
Any other investment fund may be established, and any
existing investment fund may be eliminated, by the Committee from time
to time.
- 21 -<PAGE>
"Investment Plan Contribution" means a contribution made to the
Plan pursuant to Article 4.3.
"Limitation Year" means the Plan Year.
"Matching Company Contribution" means a contribution made to the
Plan pursuant to Article 4.5.
"Participant" means any Employee who is participating in the Plan
in accordance with the provisions of Article 3.
"Plan" means the Scotsman Tax Reduction Investment Plan as
amended from time to time.
"Plan Year" means the twelve-month period commencing on January
1st and ending on December 31st.
"Prior Plan" means the Household International Tax Reduction
Investment Plan.
"Rollover Contribution" means a contribution made to the Plan
pursuant to Article 12.1.
"Tax Reduction Contribution" means a contribution made to the
Plan pursuant to Article 4.1.
"Trust" means the fund maintained by the Trustee for the
investment of Plan assets in accordance with the terms and conditions
of the Trust Agreement.
"Trust Agreement" means the agreement between the Company and the
Trustee under which the assets of the Plan are held, administered and
managed by the Trustee. The provisions of the Trust Agreement shall
be considered an integral part of this Plan as if set forth fully
herein.
- 22 -<PAGE>
"Trust Fund" means the assets or any part thereof of every kind
and description under the Trust.
"Trustee" means any corporation or persons acting as trustee
under the Trust at any time.
"Valuation Date" means each business day.
"Year of Matching Company Account" has the meaning set forth in
Article 14.1.
"Year of Service" has the meaning set forth in Article 3.6.
ARTICLE 3
PARTICIPATION AND YEARS OF SERVICE
----------------------------------
3.1 ELIGIBILITY TO PARTICIPATE.
(A) Prior Plan Participants. An individual who was eligible to
participate in the Prior Plan on March 31, 1989 and who is an Employee
of a Company on April 1, 1989 shall be eligible to participate in this
Plan as of April 1, 1989.
(B) Other Employees. Any other Employee shall be eligible to
participate in the Plan on the first day of the calendar quarter (any
period of three consecutive months beginning with January 1, April 1,
July 1 or October 1) next following or coinciding with the date he
completed one Year of Service.
3.2 COMMENCEMENT OF PARTICIPATION.
Any Employee eligible to participate in the Plan may elect to
become a Participant by executing either a tax reduction agreement as
described in Article 4.2 or an investment plan agreement as described
- 23 -<PAGE>
in Article 4.4, or both, and an investment direction as described in
Article 13.5. Participation in the Plan shall commence on the
effective date of his agreement under Article 4.2(B) or Article
4.4(B), whichever date is earlier, and of an investment direction
under Article 13.5, and shall continue in effect until amended or
terminated. By signing such an agreement, the Employee agrees to be
bound by all terms and conditions of the Plan as then in effect or as
thereafter amended.
3.3 WAIVER OF PARTICIPATION.
Any Employee eligible to participate in the Plan who chooses not
to participate in the Plan during the first calendar quarter in which
he becomes eligible to participate shall waive his right to
participate until the first day of any subsequent calendar quarter.
3.4 TRANSFERS FROM ELIGIBLE EMPLOYMENT.
If a Participant is transferred to a class of employment not
eligible for participation in this Plan but continues to be employed
by a Company or an Affiliate, no further contributions to the Trust
shall be made by or on behalf of the Participant under this Plan with
respect to periods on and after the transfer unless the Participant is
subsequently transferred back to eligible employment and a new tax
reduction agreement is executed in accordance with Article 4.2, or a
new investment plan agreement is executed in accordance with Article
4.4, and a new investment direction is executed in accordance with
- 24 -<PAGE>
Article 13.5. During the period of his employment in such transferred
position:
(a) Each of his sub-accounts (other than the portion of a sub-
account for Matching Company Contributions in which he is
not fully vested) shall be transferred to a corresponding
sub-account maintained under a qualified retirement plan, if
any, of a Company or an Affiliate in which he actively
participates while in such transferred position, and which
plan will accept such transferred sub-accounts. Such
transfer shall occur as soon as practicable after the date
of commencement of employment in such transferred position;
provided that the portion of a sub-account for Matching
Company Contributions in which the Participant is not then
fully vested shall be transferred as soon as practicable
after the date on which the Participant becomes fully vested
therein.
(b) Vesting shall continue in Matching Company Contributions;
(c) Any sub-accounts of such Participant that cannot be
transferred pursuant to clause (a) above shall continue to
be maintained under this Plan;
(d) Such Participant may make withdrawals, transfer Investment
Funds, and change beneficiaries, and shall receive
distributions in accordance with the provisions of the Plan
for his sub-accounts that are not transferred pursuant to
clause (a) above; and
- 25 -<PAGE>
(e) Such Participant may not be granted a loan with respect to
any sub-account that is not so transferred.
3.5 HOUR OF SERVICE.
An Hour of Service means:
(a) Performance of Duties - Each actual hour for which an
individual is paid or entitled to be paid for the
performance of duties for the Company or an Affiliate;
(b) Nonworking Paid Time - Each hour for which an individual is
paid or entitled to be paid by the Company or an Affiliate
on account of a period of time during which no duties are
performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity, disability, layoff, jury duty, military
duty or leave of absence (but not in excess of 501 hours in
any continuous period); provided, however, that no credit
shall be given for payments made or due under a plan
maintained solely for the purpose of complying with
applicable worker's or unemployment compensation or
disability insurance laws or for payments which solely
reimburse an individual for medical or medically related
expenses incurred by the individual; and
(c) Back Pay - Each hour for which back pay, irrespective of
mitigation or damages, is either awarded or agreed to by the
Company or an Affiliate.
- 26 -<PAGE>
Notwithstanding any other provision of this Plan to the contrary, an
individual shall not be credited with Hours of Service more than once
with respect to the same period of time. Hours of Service shall be
calculated in accordance with Department of Labor Regulations Section
2530.200b-2 or any future legislation or regulation that amends or
supplements said section.
3.6 YEAR OF SERVICE.
(A) A "Year of Service" means a period of time, measured in
whole Employment Years, commencing with the Employment Year in which
an Employee first completes an Hour of Service and ending with the
Employment Year in which a one year Break in Service occurs; provided,
however, that Years of Service shall not include any Employment Year
in which the Employee completes less than 1,000 Hours of Service.
Years of Service shall include an approved leave of absence granted to
an Employee on or after August 5, 1993 pursuant to the Family and
Medical Leave Act, if the Employee returns to work for a Company or an
Affiliate at the end of such leave of absence.
(B) Leaves of Absence. In accordance with uniform rules applied
on a nondiscriminatory basis, the Committee may count certain periods
of absence from active employment toward the computation of Years of
Service, even if not required pursuant to paragraph (A) hereof.
- 27 -<PAGE>
3.7 PARTICIPATION AND SERVICE UPON REEMPLOYMENT.
If an individual incurs a one year Break in Service and he
subsequently is reemployed as an Employee, the following rules shall
apply in determining his eligibility to participate in the Plan and
his Years of Service:
(a) If the reemployed Employee was a Participant in the Plan, or
had satisfied the service requirement of Article 3.1 during
his prior period of employment, he shall be entitled upon
reemployment to become a Participant in the Plan and any
full Years of Service credited before he incurred the one
year Break in Service shall automatically be reinstated as
of his date of reemployment. In order to make
contributions, he shall be required to execute a new tax
reduction agreement in accordance with Article 4.2 or a new
investment plan agreement in accordance with Article 4.4,
and a new investment direction in accordance with Article
13.5 hereof.
(b) If the reemployed Employee was not a Participant in the
Plan, or had not satisfied the service requirement of
Article 3.1 during his prior period of employment, such
service requirement shall be satisfied before he becomes a
Participant upon reemployment; provided, however, that any
full Years of Service credited before he incurred the one
year Break in Service shall be automatically reinstated as
of the date of his reemployment.
- 28 -<PAGE>
3.8 PREDECESSOR SERVICE.
Credit towards Hours and Years of Service shall be given for
periods of employment with any corporation that is a predecessor
corporation of a Company, or a corporation merged, consolidated or
liquidated into a Company or a predecessor of the Company, or a
corporation, substantially all of the assets of which have been
acquired by a Company, but only to the extent required by Section
414(a) of the Code; provided, however, that even if not required by
the Code, the Committee on a nondiscriminatory basis may grant credit
for Hours and Years of Service with a predecessor corporation.
Without limitation of the foregoing, all service credited to an
Employee as of March 31, 1989 for eligibility and vesting purposes
under the terms of the Prior Plan shall be credited as of April 1,
1989 for such purposes hereunder.
ARTICLE 4
CONTRIBUTIONS
-------------
4.1 TAX REDUCTION CONTRIBUTIONS.
Any Employee eligible to participate in the Plan may elect to
have the Company make Tax Reduction Contributions to the Trust on his
behalf by executing a tax reduction agreement as described in Article
4.2 and an investment direction as described in Article 13.5. The
amount of Tax Reduction Contributions made on behalf of a Participant
for any payday shall equal that whole percentage of his Compensation
per payday selected by the Participant, not to exceed 15% when
- 29 -<PAGE>
considered alone, or 20% when combined with the percentage elected
under Article 4.3 by such Participant.
4.2 TAX REDUCTION AGREEMENT.
(A) Nature of Agreement. The tax reduction agreement referred
to in Article 4.1 shall be a legally binding agreement (on a form
prescribed by the Committee) whereby the Participant agrees that, as
of the effective date of the agreement, the Compensation otherwise
payable to him thereafter shall be reduced by a whole percentage (as
selected by the Participant) not to exceed the maximum percentage
permitted under Article 4.1 and whereby the Company agrees to
contribute the total amount of such reduction in Compensation to the
Trust on behalf of the Participant as a Tax Reduction Contribution
under Article 4.1. Such contributions may be made by the Company to
the Trust with respect to each applicable payroll period, provided
that in no event shall the Company's aggregate contribution on behalf
of the Participant under Article 4.1 for any Plan Year be made to the
Trust later than 90 days after the date on which such amounts would
otherwise have been payable to the applicable Participant in cash, or
such date prescribed under Department of Labor regulations.
(B) Effective Date of Agreement. The effective date of a
Participant's tax reduction agreement shall be no earlier than the
first day of the calendar quarter commencing at least 30 days after
the agreement and a related investment direction are received in
executed form by the Committee (provided such effective date is no
- 30 -<PAGE>
earlier than the date the Participant first becomes eligible to
participate in the Plan).
(C) Amendment of Agreement. A Participant may amend his tax
reduction agreement with respect to Compensation not yet paid to
provide a new higher or lower whole percentage to be used to determine
his reduced Compensation amount. The amended tax reduction agreement
shall be effective no earlier than the first day of the calendar
quarter commencing at least 30 days after the amended agreement is
received in executed form by the Committee. A Participant may not
amend his tax reduction agreement to increase or lower his percentage
more than four times in any Plan Year.
(D) Termination of Agreement. A Participant may terminate his
tax reduction agreement at any time with respect to Compensation not
yet paid. The effective date of termination shall be as soon as
reasonably possible after the notice of termination is received in
executed form by the Committee. Any Participant who terminates his
tax reduction agreement shall be permitted to execute a new tax
reduction agreement and investment direction and resume having
contributions made to the Trust on his behalf under Article 4.1,
provided that the effective date of the new tax reduction agreement
shall be subject to the same rules as apply to increased Tax Reduction
Contributions under (C) hereof.
- 31 -<PAGE>
(E) TRANSFER TO INELIGIBLE EMPLOYMENT OR TERMINATION OF
EMPLOYMENT.
A Participant's tax reduction agreement shall automatically
terminate if the Participant transfers to a class of employment not
eligible for participation in this Plan or if he terminates his
employment with the Company. Upon return of the Participant to
eligible employment, the Participant shall be permitted to execute a
new tax reduction agreement and investment direction and resume having
contributions made to the Trust on his behalf under Article 4.1,
provided that the new tax reduction agreement and investment direction
shall be effective on the first day of the calendar quarter commencing
at least 30 days after the agreement and direction are received in
executed form by the Committee, and in no event earlier than the date
the Participant resumes eligible employment. Transfers to a different
payroll system shall be administered by procedures established by the
Committee.
4.3 INVESTMENT PLAN CONTRIBUTIONS.
Any Employee eligible to participate in the Plan may elect to
make Investment Plan Contributions to the Trust by executing an
investment plan agreement as described in Article 4.4 and an
investment direction as described in Article 13.5. The amount of
Investment Plan Contributions made by a Participant for any payday
shall equal that whole percentage of his Compensation per payday
selected by the Participant, not to exceed 20% when combined with the
percentage elected under Article 4.1 by such Participant.
- 32 -<PAGE>
4.4 INVESTMENT PLAN AGREEMENT.
(A) Nature of Agreement. The investment plan agreement referred
to in Article 4.3 shall be a legally binding agreement (on a form
prescribed by the Committee) whereby the Participant agrees that, as
of the effective date of the agreement, the Compensation otherwise
payable to him thereafter shall be adjusted by a whole percentage (as
selected by the Participant) not to exceed the maximum percentage
permitted under Article 4.3, and whereby the Company agrees to
contribute the total amount of said adjustment in Compensation to the
Trust on behalf of the Participant as an Investment Plan Contribution
under Article 4.3. Such contributions may be made by the Company to
the Trust with respect to each applicable payroll period, provided
that in no event shall the Company's aggregate contributions on behalf
of the Participant under Article 4.3 for any Plan Year be made to the
Trust later than 90 days after the date on which such amounts would
otherwise have been payable to the applicable Participant in cash, or
such date prescribed under Department of Labor regulations.
(B) Effective Date of Agreement. The effective date of a
Participant's investment plan agreement shall be no earlier than the
first day of the calendar quarter commencing at least 30 days after
the agreement and a related investment direction are received in
executed form by the Committee (provided such effective date is no
earlier than the date the Participant first becomes eligible to
participate in the Plan).
(C) Amendment of Agreement. A Participant may amend his
investment plan agreement at any time with respect to Compensation not
- 33 -<PAGE>
yet paid to change the whole percentage (within the limits of Article
4.3) to be used to determine his Investment Plan Contribution. The
amended investment plan agreement shall be effective no earlier than
the first day of the calendar quarter commencing at least 30 days
after the amended agreement is received in executed form by the
Committee. A Participant may not amend his investment plan agreement
under this Article 4.4(C) more than four times in a Plan Year.
(D) Termination of Agreement. A Participant may terminate his
investment plan agreement at any time with respect to Compensation not
yet paid. The effective date of termination shall be as soon as
reasonably possible after notice of termination is received in
executed form by the Committee. Any Participant who terminates his
investment plan agreement shall be permitted to execute a new
investment plan agreement and investment direction and resume making
contributions to the Trust under Article 4.3, provided that the
effective date of the new investment plan agreement shall be no
earlier than the first day of a calendar quarter in the following Plan
Year, commencing at least 30 days after the new investment plan
agreement is received in executed form by the Committee.
(E) Transfer to Ineligible Employment or Termination of
Employment. A Participant's investment plan agreement shall
automatically terminate if the Participant transfers to a class of
employment not eligible for participation in this Plan or if he
terminates his employment with the Company. Upon return of the
Participant to eligible employment, the Participant shall be permitted
to execute a new investment plan agreement and investment direction
- 34 -<PAGE>
and resume making contributions to the Trust under Article 4.3,
provided that the new investment plan agreement and investment
direction shall be effective on the first day of the calendar quarter
commencing at least 30 days after the agreement and direction are
received in executed form by the Committee, and in no event earlier
than the date the Participant resumes eligible employment. Transfers
to a different payroll system shall be administered by procedures
established by the Committee.
4.5 MATCHING COMPANY CONTRIBUTIONS.
(A) Contributions. Each Company shall make Matching Company
Contributions to the Trust on behalf of each Participant in the amount
determined by it, in its sole discretion; provided, however, that no
Matching Company Contributions will be made with respect to Tax
Reduction Contributions or Investment Plan Contributions that in total
exceed 6% of a Participant's Compensation.
(B) Timing of Contributions. The Matching Company Contributions
made to the Trust under Article 4.5(A) for any Plan Year generally
shall be made as soon as administratively practicable after the end of
each applicable payroll period, and in no event later than the date
prescribed by law for filing the Company's federal income tax return,
including extensions, for the Fiscal Year coincident with the Plan
Year with respect to which the Matching Company Contributions are
made.
(C) Order of Matching Contributions. The Matching Company
Contributions shall be made (1) first to match a Participant's Tax
- 35 -<PAGE>
Reduction Contributions, and (2) then to match a Participant's
Investment Plan Contributions made prior to January 1, 1995. No
Matching Company Contributions shall be made with respect to
Investment Plan Contributions made on or after January 1, 1995.
ARTICLE 5
LIMITATIONS ON TAX REDUCTION CONTRIBUTIONS
-------------------------------------------
5.1 DOLLAR LIMITATION.
In no event may the Tax Reduction Contributions made on behalf of
any Participant in any calendar year exceed the dollar limitation
prescribed by Section 402(g) of the Code. Such limitation was $9,240
for the 1994 calendar year and is adjusted in subsequent years in
accordance with the Code. The Committee shall establish rules
necessary for such limitation to be met with respect to any
Participant including, but not limited to, rules that require a
reduction in contributions in order to meet the limitation and rules
applicable to satisfy the appropriate limitations should a Participant
participate within the same calendar year in this Plan and another
plan (including that of another employer) subject to a similar dollar
limitation.
- 36 -<PAGE>
5.2 MAXIMUM DEFERRAL PERCENTAGE.
The Tax Reduction Contributions made on behalf of all eligible
Participants who are highly compensated individuals with respect to
any Plan Year shall not result in a deferral percentage for such group
of Participants for any Plan Year that exceeds the greater of (a) or
(b) below, where:
(a) is an amount equal to 125% of the deferral percentage
for all eligible Participants other than eligible Participants
who are highly compensated individuals; and
(b) is an amount equal to the sum of the deferral
percentage for all eligible Participants other than highly
compensated individuals and 2%, provided that such amount does
not exceed 200% of the deferral percentage for all eligible
Participants other than highly compensated individuals.
5.3 DEFINITIONS.
For purposes of this Article 5, the following terms shall have
the following meanings:
(A) "Eligible Participant" shall mean an Employee who is
eligible to make Tax Reduction Contributions to the Plan, even if he
elects not to make such contributions, he is suspended from making
such contributions for a period of time due to such events as a loan
or a withdrawal, or he is suspended from further contributions during
the Plan Year due to the limitations of Section 415 of the Code.
- 37 -<PAGE>
(B) "Highly compensated individual" shall mean:
(1) An individual in the "Lookback Year" who:
(a) was a 5% owner of a Company or an Affiliate;
(b) received Compensation from one or more Companies
or Affiliates in excess of $99,000 in 1994,
adjusted in subsequent Plan Years in accordance
with the Code; or
(c) received Compensation from one or more Companies
or Affiliates in excess of $66,000 in 1994,
adjusted in subsequent Plan Years in accordance
with the Code, and was among the top 20% of
Employees ranked by pay for such Plan Year, or
(d) was an officer of one or more Companies or
Affiliates and received Compensation from one or
more Companies or Affiliates greater than 50% of
the amount in effect under Section 415(b)(1)(A) of
the Code; provided, however, that a minimum of 3
officers or 10% of the Employees of the Company
and its Affiliates, but no more than 50
individuals shall be taken into account under this
Section 5.3(B)(1)(d)
OR
(2) Any individual in the Determination Year who:
(a) is among the top 100 paid Employees; AND satisfies
(b), (c) or (d) under Section 5.3(B)(1) in the
Determination Year; or
(b) is a 5% owner of a Company or an Affiliate.
The Determination Year is defined as the current Plan Year.
The Lookback Year is defined as the 12 months immediately preceding
the Determination Year; or, at the election of the Committee, the 12
months coinciding with the Determination Year.
The term "Compensation" for purposes of determining who is a
highly compensated individual shall have the meaning prescribed in
Section 415(c)(3) of the Code, but prior to reduction on account of a
- 38 -<PAGE>
Participant's Tax Reduction Contributions to this Plan and any other
contributions not treated as taxable income by reason of Sections 125,
402(a)(8) or 402(h)(1)(B) of the Code.
(C) "Deferral Percentage" with respect to any group of eligible
Participants for a Plan Year shall mean the average of the deferral
ratios (calculated separately for each eligible Participant in the
group and rounded to the nearest one one-hundredth of one percent) of:
(a) the amount of Tax Reduction Contributions allocated to
the account of each eligible Participant for such year, to
(b) the eligible Participant's Compensation for such year.
The term "Compensation" for purposes of this (C) has the meaning set
forth in Section 415(c)(3) of the Code but, as determined by the
Committee, prior to or after reduction on account of a Participant's
Tax Reduction Contributions to this Plan or any other contributions
not treated as taxable income by reason of Sections 125, 402(a)(8) or
402(h)(1)(B) of the Code. The dollar limitation on "Compensation" set
forth in the definition of "Compensation" in Article 2.1 of the Plan
applies for this purpose. Compensation received by a Participant for
the entire Plan Year shall be taken into account for purposes of this
paragraph (C), even if the Participant begins, resumes or ceases to be
eligible to make Tax Reduction Contributions during the Plan Year,
provided such Compensation is received from a Company or an Affiliate.
- 39 -<PAGE>
5.4 FAMILY MEMBERS.
For purposes of determining who is a highly compensated
individual and for purposes of the maximum deferral percentage
prescribed in Article 5.2 hereof and the maximum contribution
percentage prescribed in Article 6.1 hereof, a family member of a 5%
owner or of one of the highest 10 paid individuals employed by all
Companies and Affiliates shall not be considered a separate individual
and, further, any earnings paid to him or contributions made by or on
his behalf shall be attributed to the highly compensated individual
described above. The term "family" for purposes hereof includes an
individual's spouse, lineal ascendants or descendants, and the spouses
of such lineal ascendants or descendants.
5.5 PROSPECTIVE REDUCTION OF TAX REDUCTION CONTRIBUTIONS.
In the event that it is determined by the Committee at any time
prior to or within a Plan Year that the maximum deferral percentage
prescribed in Article 5.2 could be exceeded with respect to such Plan
Year, then the amount of Tax Reduction Contributions allowed to be
made on behalf of eligible Participants who are highly compensated
individuals with respect to the remainder of the Plan Year may be
reduced by the Committee. The highly compensated individuals with
respect to whom such reduction shall be made and the amount of such
reduction shall be determined in a manner comparable to the manner of
determining Excess Tax Reduction Contributions under Article 9.2;
provided, however, that for purposes of this Article 5.5 (but not for
purposes of Article 9.2), the Committee may round off or estimate the
- 40 -<PAGE>
prospective reductions hereunder. Once a reduction has been made
hereunder, it shall remain in effect unless the Committee determines
that it is no longer necessary in order for the maximum deferral
percentage to be met.
ARTICLE 6
LIMITATION ON INVESTMENT PLAN AND
MATCHING COMPANY CONTRIBUTIONS
---------------------------------
6.1 MAXIMUM CONTRIBUTION PERCENTAGE.
The sum of the Investment Plan Contributions made by all eligible
Participants who are highly compensated individuals and the Matching
Company Contributions made on such Participants' behalf shall not
result in a contribution percentage for such group of Participants for
any Plan Year that exceeds the greater of (a) or (b) below, where:
(a) is an amount equal to 125% of the contribution percentage
for all eligible Participants other than highly compensated
individuals; and
(b) is an amount equal to the sum of the contribution percentage
for all eligible Participants other than highly compensated
individuals and 2%, provided that such amount does not
exceed 200% of the contribution percentage for all eligible
Participants other than highly compensated individuals.
- 41 -<PAGE>
6.2 DEFINITIONS.
For purposes of this Article 6, the following terms shall have
the following meanings:
(A) The terms "eligible Participant" and "highly
compensated individual" shall have the meanings prescribed in
Article 5.
(B) "Contribution percentage" with respect to any group of
eligible Participants for a Plan Year shall mean the average of
the ratios (calculated separately for each eligible Participant
in the group and rounded to the nearest one one-hundredth of one
percent) of:
(a) the sum of the Investment Plan Contributions and
Matching Company Contributions allocated to the account of
each eligible Participant for such year, to
(b) the eligible Participant's Compensation (as
defined in Article 5.3(C)) for such year.
6.3 PROSPECTIVE REDUCTION OF INVESTMENT PLAN CONTRIBUTIONS.
In the event that it is determined by the Committee at any time
prior to or within a Plan Year that the maximum contribution
percentage described in Article 6.1 could be exceeded with respect to
such Plan Year, then the amount of Investment Plan Contributions
allowed to be made by eligible Participants who are highly compensated
individuals may be reduced by the Committee. The highly compensated
individuals with respect to whom such reduction shall be made and the
amount of such reduction shall be determined by (i) reducing the
- 42 -<PAGE>
maximum allowable Investment Plan Contributions under Article 4.3 to
such percentage which will, when applied to all eligible Participants
who are highly compensated individuals (and taking into account any
reduction in Matching Company Contributions as a consequence of a
reduction in Tax Reduction Contributions under Article 5.5 and a
reduction in Investment Plan Contributions hereunder) result in the
maximum contribution percentage set forth in Article 6.1 not being
exceeded, and (ii) reducing accordingly the Investment Plan
Contributions that may be made in the remainder of the Plan Year in
the case of each highly compensated individual with respect to whom
such reduced maximum percentage is exceeded. Notwithstanding the
foregoing, the Committee may round off or estimate the prospective
reductions hereunder. Once a reduction has been made hereunder, it
shall remain in effect unless the Committee determines that it is no
longer necessary in order for the maximum contribution percentage to
be met.
6.4 TESTING OF TAX REDUCTION CONTRIBUTIONS UNDER MAXIMUM CONTRIBUTION
PERCENTAGE TEST.
Notwithstanding the foregoing provisions of this Article 6 or of
Article 5, all or a portion of the Tax Reduction Contributions made on
behalf of eligible Participants who are not highly compensated
individuals may be treated as Matching Company Contributions made on
behalf of such eligible Participants for the purpose of meeting the
maximum contribution percentage test set forth in Article 6.1,
provided that the maximum deferral percentage test of Article 5.2 can
- 43 -<PAGE>
be met, both when the Tax Reduction Contributions treated as Matching
Company Contributions hereunder are included in performing such
maximum deferral percentage test and when such Tax Reduction
Contributions are excluded in performing such maximum deferral
percentage test. Except for purposes of meeting the maximum
contribution test of Article 6.1 to the extent described hereunder,
any such Tax Reduction Contributions shall continue to be treated as
Tax Reduction Contributions for all other purposes of the Plan.
ARTICLE 7
MULTIPLE USE LIMITATION
-----------------------
If a "Multiple Use of the Alternative Limitation" occurs in a
Plan Year, then, notwithstanding any other provision of Articles 5.2
or 6.1, the test in paragraph (b) of Article 5.2 shall not be used to
satisfy the requirements of Article 5.2 for Tax Reduction
Contributions in the same Plan Year that the test contained in
paragraph (b) of Article 6.1 is used to satisfy the requirements of
Article 6.1 with respect to Investment Plan Contributions and Matching
Company Contributions. If the preceding sentence shall be applicable
for a Plan Year, then the Committee shall determine whether to use the
test in paragraph (b) of Article 5.2 to satisfy the requirements of
Article 5.2, or to use the test in paragraph (b) of Article 6.1 to
satisfy the requirements of Article 6.1, for such Plan Year.
A Multiple Use of the Alternative Limitation shall occur in any
Plan Year if all of the following conditions are satisfied in the Plan
Year.
- 44 -<PAGE>
(1) At least one highly compensated individual is eligible
to authorize Tax Reduction Contributions to be made on his
behalf, and to make Investment Plan Contributions or have
Matching Company Contributions allocated to his account, pursuant
to the Plan during such Plan Year;
(2) The sum of the deferral percentage in Article 5.2 of
the entire group of highly compensated individuals and of the
contribution percentage in Article 6.1 of the entire group of
highly compensated individuals for such Plan Year exceeds the
greater of A and B below:
(A) The sum of:
(i) 125% of the greater of (I) the deferral
percentage of the group of Participants for such Plan
Year who are not highly compensated individuals, or
(II) the contribution percentage of the group of
Participants who are not highly compensated individuals
for such Plan Year, and
(ii) Two plus the lesser of (I) or (II) above. In
no event, however, shall this amount exceed 200% of the
lesser of (I) or (II) above;
(B) The sum of:
(i) 125% of the lesser of (I) the deferral
percentage of the group of Participants who are not
highly compensated individuals for such Plan Year, or
(II) the contribution percentage of the group of
- 45 -<PAGE>
Participants who are not highly compensated individuals
for such Plan Year, and
(ii) Two plus the greater of (I) or (II) above.
In no event, however, shall this amount exceed 200% of
the greater of (I) or (II) above.
(3) The deferral percentage of the entire group of highly
compensated individuals exceeds the amount described in Article
5.2(a); and
(4) The contribution percentage of the entire group of
highly compensated individuals exceeds the amount described in
Article 6.1(a).
ARTICLE 8
CORRECTION OF TAX REDUCTION CONTRIBUTIONS
IN EXCESS OF DOLLAR LIMITATION
-----------------------------------------
8.1 GENERAL RULE.
In the event that, notwithstanding Article 5.1, the dollar
limitation on Tax Reduction Contributions prescribed therein is
exceeded, the excess shall be considered an "Excess Deferral" and the
procedures set forth in this Article 8 shall be followed.
8.2 DESIGNATION AS EXCESS DEFERRAL.
A Participant may designate to the Committee the amount of any
Excess Deferral that is allocable to the Plan. Such a designation
must be made on or before March 1 of the year following the Plan Year
in which the Excess Deferral was made.
- 46 -<PAGE>
8.3 DISTRIBUTION.
Any Excess Deferral attributable to a Participant shall be
distributed to him on such date as the Committee determines but in no
event later than the April 15 following the Plan Year in which the
Excess Deferral was made. Any such distribution shall include a
distribution of income allocable to the Excess Deferral, determined by
applying methodology comparable to that described in Article 9.4(b)
and (c).
8.4 COORDINATION WITH EXCESS TAX REDUCTION CONTRIBUTIONS.
The amount of Excess Deferrals that is distributed under this
Article 8 with respect to a Participant for a Plan Year shall be
reduced by any Excess Tax Reduction Contributions previously
recharacterized or distributed with respect to such Participant for
such Plan Year. Conversely, the amount of Excess Tax Reduction
Contributions to be recharacterized or distributed under Article 9
with respect to a Participant for a Plan Year shall be reduced by any
Excess Deferrals previously distributed hereunder to such Participant
for such Plan Year.
- 47 -<PAGE>
ARTICLE 9
CORRECTION OF EXCESS CONTRIBUTIONS
----------------------------------
9.1 GENERAL RULE.
If as of the end of a Plan Year, either the maximum deferral
percentage test of Article 5.2 or the maximum contribution percentage
test of Article 6.1 is not satisfied, the Committee, after the close
of such Plan Year, shall make a determination of the Excess Tax
Reduction Contributions or Excess Aggregate Contributions and then
apply one or more of the corrective measures set forth in this Article
9 (with the applicable measures determined by the Committee, in its
sole discretion) in order that, after application of such measures,
both of such tests are satisfied.
9.2 MAXIMUM DEFERRAL PERCENTAGE TEST -- EXCESS TAX REDUCTION
CONTRIBUTIONS.
Excess Tax Reduction Contributions are determined on an
individual basis. The Committee first shall determine the deferral
percentage with respect to the group of all eligible Participants who
are highly compensated individuals that would cause the test of
Article 5.2 to be satisfied. It then shall determine with respect to
each individual within such group whether his individual deferral
ratio (determined in accordance with Article 5.3(C)) exceeds the
maximum deferral percentage allowed by Article 5.2 with respect to the
group as a whole. If so, the amount of such individual's total Tax
Reduction Contributions, minus an amount determined by multiplying the
- 48 -<PAGE>
permissible deferral ratio with respect to the group as a whole by his
compensation used in determining such ratio, shall be considered his
Excess Tax Reduction Contributions.
9.3 RECHARACTERIZATION OF EXCESS TAX REDUCTION CONTRIBUTIONS.
Excess Tax Reduction Contributions may be recharacterized as
Investment Plan Contributions as elected by a highly compensated
individual in order to meet the maximum deferral percentage test,
provided that the following conditions are met with respect thereto:
(a) The recharacterized amounts are reported to the
Internal Revenue Service and to the affected highly compensated
individual as income for the Plan Year in which the individual
would have received the recharacterized Tax Reduction
Contributions in cash, had he not elected to have such amounts
contributed to the Plan;
(b) The recharacterized amounts are treated as Investment
Plan Contributions for purposes of Sections 72, 401(a)(4) and
6047 of the Code and for purposes of the maximum contribution
test described in Article 6.1 (in the year when taken into
account as income);
(c) The recharacterized amounts continue to be treated for
all other purposes under the Plan as Tax Reduction Contributions;
and
(d) A written recharacterization election is made by an
affected highly compensated individual not later than the March
- 49 -<PAGE>
15 next following the end of the Plan Year with respect to which
recharacterization occurs.
9.4 DISTRIBUTION OF EXCESS TAX REDUCTION CONTRIBUTION.
Excess Tax Reduction Contributions (and income allocable thereto)
not recharacterized as Investment Plan Contributions pursuant to
Article 9.3 shall be distributed in order to meet the maximum deferral
percentage test of Article 5.2, provided that the following conditions
are met with respect thereto:
(a) The distributed amounts are designated as a
distribution of Excess Tax Reduction Contributions (and income
allocable thereto) and are distributed to the affected highly
compensated individuals within 12 months following the close of
the Plan Year in which the maximum deferral percentage was
exceeded; and
(b) Allocable income for the Plan Year in which the maximum
deferral percentage was exceeded is distributed. Such allocable
income shall be determined by any reasonable method consistent
with Section 401(k)(8) of the Code and regulations issued
thereunder.
The term "income" for all purposes under this Article 9
includes all earnings and appreciation, including such items as
interest, dividends, rent, royalties, gains from the sale of
property, appreciation in the value of stocks, bonds, annuity and
life insurance contracts and other property, without regard to
whether such appreciation has been realized.
- 50 -<PAGE>
9.5 MAXIMUM CONTRIBUTION PERCENTAGE TEST -- EXCESS AGGREGATE
CONTRIBUTION.
The term "Excess Aggregate Contributions" means the total dollar
amount of Investment Plan Contributions (including Tax Reduction
Contributions recharacterized as Investment Plan Contributions
pursuant to Article 9.3) and Matching Company Contributions (including
Tax Reduction Contributions treated as Matching Company Contributions
pursuant to Article 6.4) allocated to the account of any eligible
Participant who is a highly compensated individual that, in
combination with a similarly-computed amount with respect to other
such individuals, causes the maximum contribution percentage
limitation set forth in Article 6.1 to be exceeded. In order to
determine Excess Aggregate Contributions with respect to any
individual, the Committee shall apply the methodology prescribed in
Article 9.2 hereof but shall substitute the contribution percentage
tests prescribed in Article 6 for the deferral percentage tests
prescribed in Article 5 and shall substitute Investment Plan
Contributions and Matching Company Contributions for Tax Reduction
Contributions.
9.6 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
Excess Aggregate Contributions (and income allocable thereto)
shall be distributed to affected highly compensated individuals in
order to meet the maximum contribution percentage test within 12
months following the close of the Plan Year in which the maximum
contribution percentage test was exceeded. If the affected highly
- 51 -<PAGE>
compensated individual has not made any Investment Plan Contributions
to the Plan for the applicable Plan Year, then the Excess Aggregate
Contributions distributed shall be deemed to consist solely of
Matching Company Contributions. If the amount of the Excess Aggregate
Contributions is at least equal to the amount of the affected highly
compensated individual's Investment Plan Contributions that were not
matched by any Matching Company Contributions, then the Excess
Aggregate Contributions distributed shall be deemed to consist solely
of Investment Plan Contributions. In other cases, the Committee shall
apportion the Excess Aggregate Contributions between Investment Plan
Contributions and Matching Contributions on a nondiscriminatory basis;
provided, however, that Matching Company Contributions always may be
distributed prior to a distribution of Investment Plan Contributions.
9.7 FORFEITURE OF MATCHING COMPANY CONTRIBUTIONS.
If, after applying the provisions of Article 9.6, the Committee
determines that all or a portion of the Excess Aggregate Contributions
is to be treated as Matching Company Contributions and the affected
highly compensated individual is not fully vested, the non-vested
amount of the portion of the Excess Aggregate Contributions treated as
Matching Company Contributions (and income allocable thereto that is
earned prior to forfeiture) may be forfeited. The non-vested amount
of the portion of the Excess Aggregate Contributions treated as
Matching Company Contributions shall be determined by multiplying such
portion by the difference between 100% and the individuals vested
percentage under Article 14.
- 52 -<PAGE>
9.8 ALLOCABLE INCOME.
The income allocable to Excess Aggregate Contributions shall be
determined by applying a methodology comparable to that prescribed in
Article 9.4(b).
9.9 TIMING OF CORRECTIONS.
Distributions or forfeitures pursuant to Article 9.6 or 9.7 shall
be made within 12 months following the close of the Plan Year in which
the maximum contribution percentage was exceeded.
9.10 SPECIAL RULE FOR RECHARACTERIZED AMOUNTS.
The determination of the amount of Excess Aggregate Contributions
with respect to a Plan Year shall be made after determining the Excess
Tax Reduction Contributions, if any, to be treated as Investment Plan
Contributions due to recharacterization. The income allocable to
Excess Aggregate Contributions resulting from the recharacterization
of Tax Reduction Contributions shall be determined and distributed as
if such recharacterized Tax Reduction Contributions had been
distributed pursuant to Article 9.4 instead of recharacterized
pursuant to Article 9.3.
9.11 ADDITIONAL COMPANY CONTRIBUTIONS.
Notwithstanding any other provision of the Plan, the Companies
may make qualified nonelective contributions pursuant to Section
401(k) or (m) of the Code in order to satisfy the maximum deferral
percentage test or the maximum contribution percentage test.
- 53 -<PAGE>
9.12 HIGHLY COMPENSATED INDIVIDUAL ELECTIONS.
Notwithstanding Article 9.1, but solely for purposes of
satisfying the maximum deferral percentage test (and not for purposes
of satisfying the maximum contribution percentage test), a highly
compensated individual may, pursuant to Article 9.3, elect whether the
appropriate method of correcting Excess Tax Reduction Contributions
shall be recharacterization, distribution or a combination of both.
9.13 OTHER PERMISSIBLE METHODS OF TESTING AND CORRECTION.
The provisions of Article 5 through this Article 9 are intended
to conform with Sections 401(k) and (m) and 402(g) of the Code. In
the event that the Committee determines that, in accordance with the
Code, the requirements of such Code sections may be applied in a
manner different from that prescribed in Articles 5 through 9, the
Committee, in its discretion, may make appropriate adjustments.
ARTICLE 10
LIMITATIONS ON ANNUAL ADDITIONS
-------------------------------
10.1 BASIC LIMITATION.
Subject to the adjustments hereinafter set forth, the maximum
annual addition to a Participant's account in any Limitation Year
under this Plan plus the annual addition to the Participant's account
under any other qualified defined contribution plan maintained by the
Company or by an Affiliate shall not exceed the lesser of:
(a) $30,000, adjusted in accordance with the Code, or
(b) 25% of the Participant's annual compensation.
- 54 -<PAGE>
10.2 DEFINITIONS.
For purposes of Article 10.1, the following terms shall have the
following meanings:
(A) Annual Addition. The term "annual addition" shall mean the
sum of:
(a) the Company's contributions (including Tax Reduction
Contributions, Matching Company Contributions and
forfeitures treated as Matching Company Contributions)
allocated to the account of the Participant under this Plan;
(b) the employer contributions and forfeitures allocated to
the account of the Participant under any other qualified
defined contribution plan maintained by the Company or by an
Affiliate; and
(c) the Participant's Investment Plan Contributions to this
Plan and after-tax employee contributions to any other
qualified plan maintained by the Company or an Affiliate.
(B) Compensation. The term "compensation" shall mean the
Participant's wages, salary for professional services and other
amounts received for personal services actually rendered (including,
but not limited to, commissions paid to sales personnel, compensation
for services on the basis of a percentage of profits and bonuses) and
such other amounts as are treated as "compensation" under Section
415(c)(3) of the Code, but limited to $200,000 per Limitation Year, as
adjusted in accordance with the Code for Limitation Years commencing
after December 31, 1988 and prior to January 1, 1994. For Limitation
Years commencing on or after January 1, 1994 the provisions of the
- 55 -<PAGE>
last paragraph of the definition of Compensation in Article 1.1 shall
apply.
(C) Affiliate. For purposes of Article 10, the term "Affiliate"
shall mean an Affiliate as defined in Article 2.1, but modified
pursuant to Section 415(h) of the Code.
10.3 LIMITATION ON COMBINATION OF PLANS.
Notwithstanding the foregoing, in the case of a Participant who
participates in this Plan and any qualified defined benefit plan
maintained by the Company or by an Affiliate, the sum of the defined
benefit plan fraction and the defined contribution plan fraction for
any year shall not exceed 1.0. In the event the sum of such fractions
exceeds 1.0, benefits under the defined benefit plan shall be reduced
or frozen prior to making any reductions in this Plan. For purposes
of applying the limitations of this Article 10.3, the following rules
shall apply:
(a) The terms "defined benefit plan fraction" and "defined
contribution plan fraction" shall have the meanings prescribed in
Section 415(e) of the Code.
(b) The term "annual addition" shall have the meaning set forth
in Article 10.2.
10.4 PROSPECTIVE ADJUSTMENT TO CONTRIBUTIONS.
The Committee shall maintain records, showing the contributions
to be allocated to the account of each Participant in any limitation
year. In the event that it is determined prior to or within any
- 56 -<PAGE>
Limitation Year that the foregoing limitations would be exceeded if
the full amount of contributions otherwise allocable would be
allocated, the annual additions to this Plan for the remainder of the
Limitation Year shall be adjusted by reducing (i) first, unmatched
Investment Plan Contributions made prior to January 1, 1995, (ii)
second, unmatched Tax Reduction Contributions, (iii) third, matched
Investment Plan Contributions made prior to January 1, 1995 and a
corresponding share of Matching Company Contributions; (iv) fourth,
Investment Plan Contributions made from and after January 1, 1995; and
(v) fifth, matched Tax Reduction Contributions and a corresponding
share of Matching Company Contributions but, in each case, only to the
extent necessary to satisfy the limitations.
10.5 DISPOSAL OF EXCESS ANNUAL ADDITIONS.
Notwithstanding the preceding provisions of Article 10, if the
limitations set forth therein with respect to annual additions are
exceeded in any Limitation Year with respect to any Participant as a
result of (i) the allocation of forfeitures, (ii) reasonable error in
estimating a Participant's Compensation, (iii) reasonable error in
determining the amount of elective deferrals (within the meaning of
Section 402(g)(3) of the Code) that may be made with respect to a
Participant, or (iv) such other limited facts and circumstances that
the Commissioner of Internal Revenue Service, pursuant to Code
Regulation ^U 1.415-6(b)(6), finds justify the availability of this
Article 10.5, the Investment Plan Contributions and Tax Reduction
Contributions made by or with respect to such Participant shall be
- 57 -<PAGE>
distributed to him, together with earnings, gains and losses allocable
thereto. Any amount in excess of the limitations of Article 10
remaining after such distribution to such Participant shall be used to
reduce future contributions made under the Plan by or on behalf of
such Participant for the next succeeding Limitation Year, and
succeeding Limitation Years, as necessary, or, if the Participant is
no longer employed by the Company or any Affiliate in such succeeding
Limitation Year, to reduce future contributions made on behalf of
other Participants entitled to an allocation thereof. Any reduction
in the contributions and allocations under this Plan made with respect
to a Participant's accounts pursuant to this Article 10.5 and Section
415 of the Code, shall be effected, to the minimum extent necessary,
in the following manner:
(i) first Investment Plan Contributions made by such
Participant, adjusted for earnings, gains and losses allocable
thereto, shall be reduced;
(ii) next, Tax Reduction Contributions made on behalf of such
Participant, adjusted for earnings, gains and losses allocable
thereto, shall be reduced; and
(iii) finally, Matching Company Contributions made on behalf of
such Participant shall be reduced.
Any distributions to a Participant pursuant to this Article 10.5 shall
be made proportionately from the Investment Funds in which such
Participant's separate accounts are invested at the time such
distribution is made.
- 58 -<PAGE>
ARTICLE 11
GENERAL PROVISIONS REGARDING CONTRIBUTIONS
------------------------------------------
11.1 MANNER OF MAKING CONTRIBUTIONS.
All contributions to the Trust shall be paid directly to the
Trustee. Tax Reduction Contributions and Investment Plan
Contributions shall be made in cash. Matching Company Contributions
shall be made in cash or Company Stock, in the discretion of the
Company. Each contribution shall be accompanied by written
instructions from the Committee that:
(a) identify each Participant on whose behalf the
contribution is being made and the amount thereof;
(b) state whether the amount contributed on behalf of the
Participant represents a Tax Reduction Contribution, an
Investment Plan Contribution or a Matching Company
Contribution; and
(c) direct the investment of the amount contributed on
behalf of the Participant.
11.2 LIMITATION TO AMOUNT DEDUCTIBLE.
Tax Reduction Contributions and Matching Company Contributions to
the Plan, when considered with the amount contributed by a Company to
any other tax-qualified plan, shall not exceed the amount deductible
pursuant to Section 404 of the Code. In the event that the amount
that any Company would contribute but for the deductible limitation
exceeds the deductible limitation, contributions shall be reduced in
such manner as the Committee, in its sole discretion, shall prescribe.
- 59 -<PAGE>
11.3 RETURN OF CONTRIBUTIONS.
Notwithstanding the provisions of Section 20.1 below:
(a) Upon request of the Company, contributions made to the Plan
before the issuance of a favorable determination letter by the
Internal Revenue Service with respect to the initial
qualification of the Plan under Section 401(a) of the Code may be
returned to the Company, with all attributable earnings, within
one year after the Internal Revenue Service refuses in writing to
issue such a letter.
(b) Any amount contributed under the Plan by the Company by a
mistake of fact as determined by the Company may be returned to
the Company, upon its request, within one year after its payment
to the Trust.
(c) Any amount contributed under the Plan by the Company on the
condition of its deductibility under Section 404 of the Code may
be returned to the Company, upon its request, within one year
after the Internal Revenue Service disallows the deduction in
writing.
(d) Earnings attributable to contributions returnable under
paragraph (b) or (c) shall not be returned to the Company, and
any losses attributable to those contributions shall reduce the
amount returned.
- 60 -<PAGE>
ARTICLE 12
ROLLOVERS AND TRANSFERS
-----------------------
12.1 ROLLOVERS.
Rollover Contributions may be made to the Plan in accordance with
the following provisions:
(A) Amounts Eligible. Any amount eligible for a tax-free
rollover under applicable provisions of the Code may be rolled over to
the Plan.
(B) Individuals Eligible. Any Employee, including an Employee
who has not satisfied the participation requirements of Article 3 of
the Plan, may make a Rollover Contribution to the Plan. Even though
an Employee has not yet satisfied such participation requirements, the
provisions of the Plan shall be generally applicable to him and to the
Rollover Contribution, unless expressly provided otherwise.
(C) Source of Rollover. Subject to the Code, Rollover
Contributions may be made directly by the Employee or by the
retirement plan, individual retirement account or other arrangement
from which the Rollover Contribution is being made.
(D) Assets Eligible for Rollover. Rollover Contributions shall
be made in cash and not in stock or other property, unless otherwise
permitted by the Committee. A Rollover Contribution may not include
any amounts representing employee contributions, other than voluntary
deductible contributions.
(E) Timing. Any amount to be rolled over generally must be
rolled over to the Plan within 60 days of receipt by the Participant,
unless otherwise permitted by the Code and the Committee.
- 61 -<PAGE>
(F) Self-Employed Individual. A rollover to the Plan shall not
be permitted to the extent the amount proposed to be rolled over is
attributable to periods during which an Employee was a self-employed
individual, within the meaning of Section 401(c)(1) of the Code.
(G) Procedures. The Committee may adopt rollover procedures
and, before permitting a Rollover Contribution, may require an
Employee to furnish such information regarding the amount proposed to
be rolled over as the Committee determines is necessary or
appropriate.
12.2 TRANSFERS FROM OTHER PLAN.
The Committee, in its discretion, may accept a direct transfer to
the Plan from another plan qualified under Section 401(a) of the Code
of all or a portion of the amount credited under such other plan to an
Employee. The Committee may adopt rules with respect to any such
transfer including, but not limited to, rules with respect to
accounting for, and the investment of, amounts transferred.
Notwithstanding the preceding provisions of this Article, the
Committee will not accept a transfer of an Employee's interest in
another retirement plan if it is determined that such acceptance would
render this Plan a direct or indirect transferee of a defined benefit
plan, money purchase pension plan (including a target benefit plan),
stock bonus, or profit sharing plan that provides for a life annuity
form of payment to the Employee.
- 62 -<PAGE>
12.3 SECTION 401(K) LIMITATIONS.
In the event that an amount transferred to the Plan pursuant to
Article 12.2 is attributable to a cash or deferred election that was
made pursuant to Section 401(k) of the Code, such amount shall be
subject to the same rules that apply under the Plan to Tax Reduction
Contributions.
12.4 TRANSFERS TO OTHER PLAN.
12.4 Transfers to Individual Retirement Accounts and Other Plans.
(i) This Article 12.4 applies to distributions made on
or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a
Distributee's election under this paragraph, a Distributee
may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
(ii) Definitions.
(A) "Eligible Rollover Distribution" is any
distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
- 63 -<PAGE>
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(B) "Eligible Retirement Plan" is an individual
retirement account described in Section 408(a) of the Code,
an individual retirement annuity described in Section 408(b)
of the Code, an annuity plan described in Section 403(a) of
the Code, or a qualified trust described in Section 401(a)
of the Code, that accepts the Distributee's Eligible
Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse of an
Employee, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(C) "Distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse, and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(D) "Direct Rollover" is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
- 64 -<PAGE>
ARTICLE 13
ACCOUNTS AND ALLOCATION OF FUNDS
--------------------------------
13.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE.
All contributions to the Trust that are received by the Trustee,
together with any earnings thereon, shall be held, managed and
administered by the Trustee in accordance with the terms and
conditions of the Trust Agreement.
13.2 TRUST FUND VALUATION.
The value of each Investment Fund shall be determined by the
Trustee as of the close of business on each Valuation Date, and shall
be the fair market value of all property held in such Investment Fund,
plus cash and accrued income, with equitable adjustments for pending
trades less all charges, expenses, reserves and liabilities due or
accrued which are determined to be properly chargeable to such
Investment Fund.
13.3 ALLOCATION OF CONTRIBUTIONS TO PARTICIPANTS' SEPARATE ACCOUNTS.
The Trustee shall maintain a separate account for each
Participant. Within such account, one or more sub-accounts may be
maintained as the Trustee and the Committee deem appropriate to
accurately reflect a Participant's interest in the Plan. In all
events, there shall be a separate sub-account for Tax Reduction
Contributions.
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13.4 ADJUSTMENTS TO PARTICIPANTS' ACCOUNTS.
Each Investment Fund shall be valued at fair market value as of
the close of business on each Valuation Date. As of such Valuation
Date, each Participant's interest in an Investment Fund shall be
adjusted for the net earnings, losses, appreciation and depreciation
in such Investment Fund since the immediately preceding Valuation
Date. The portion of the total net earnings, losses, appreciation or
depreciation of an Investment Fund allocated to a Participant's
interest in such Fund shall be in the same ratio that the value of the
Participant's interest in such Fund as of the immediately preceding
Valuation Date bears to the total value of all Participants' interests
in such Fund as of the immediately preceding Valuation Date; provided,
however, that for this purpose, the value of a Participant's interest
as of the immediately preceding Valuation Date shall be increased by
any transfers to the Investment Fund from another Investment Fund as
of the Valuation Date for which the valuation is being made and shall
be decreased by any loans, withdrawals or other distributions paid to
the Participant as of the Valuation Date for which the valuation is
being made; provided, however, that for purposes of Article 15,
distributions other than loans and withdrawals shall not be taken into
account. All contributions and loan repayments shall be credited as
of the applicable Valuation Date and shall not be credited until the
foregoing adjustments for earnings, losses, appreciation and
depreciation have been made.
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13.5 PARTICIPANT-DIRECTED INVESTMENTS FOR FUTURE CONTRIBUTIONS.
(A) General Rule. Except as provided in Articles 13.6 and 13.8,
all contributions to the Trust that are allocated to the account of a
Participant shall be invested by the Trustee in the Investment Funds
(other than Fund A/Household) as directed in writing by the
Participant.
(B) Investment Plan and Tax Reduction Contributions; Loan
Repayments. For contributions made under investment plan agreements
or tax reduction agreements, an investment election pursuant to
procedures prescribed by the Committee shall be submitted and shall
direct that the aggregate of such contributions (without distinction)
be invested in the Investment Funds in multiples of 5%. A Participant
may change his investment directions under this Article 13.5(B) as of
any Valuation Date, pursuant to a communication delivered to an
authorized affiliate of the Trustee, and pursuant to procedures
established by the Committee on or before the close of business for
such Valuation Date. Notwithstanding the provisions of the preceding
sentence, no Participant who is subject to the provisions of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission adopted
thereunder may elect, more frequently than once in any 30-day period,
to increase or decrease the amount of the allocation of such
Participant's contributions to Fund A. Such election shall be made at
such times and pursuant to procedures prescribed by the Committee.
(C) Rollover Contributions. An investment election on a form
prescribed by the Committee shall be submitted with an Employee's
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Rollover Contribution and shall direct that such contribution be
invested in the Investment Funds in multiples of 5%.
(D) Failure to Provide Investment Instructions. If the Trustee
receives any contribution to the Trust that is not accompanied by
written instructions directing its investment, the Trustee shall
return all of such contribution uninvested to the Participant or the
Company, as applicable, as soon as practicable without liability for
loss of income or appreciation.
13.6 INVESTMENT OF MATCHING COMPANY CONTRIBUTIONS; FORFEITURES.
Matching Company Contributions and forfeitures shall be invested
in Fund A/Scotsman and allocated to the account of each Participant on
the next Valuation Date. Forfeitures shall be held by the Trustee in
Fund A until the next Valuation Date. Forfeitures shall be used to
reduce Matching Company Contributions.
13.7 INVESTMENT TRANSFERS.
A Participant shall be permitted to transfer contributions to the
Trust (other than Matching Company Contributions) previously invested
in one Investment Fund and earnings thereon to one or more other
Investment Funds; provided, however, that on or after April 1, 1989,
no transfers may be made to Fund A/Household. A transfer election
shall be made in 5% increments of the Participant's total interest in
an Investment Fund to another Investment Fund. A transfer election
may be made by a Participant as of any Valuation Date, pursuant to a
communication delivered to an authorized affiliate of the Trustee and
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pursuant to procedures established by the Committee, on or before the
close of business on such Valuation Date. Notwithstanding the
provisions of the preceding sentence, no Participant who is subject to
the provisions of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Securities and
Exchange Commission adopted thereunder, may elect, more frequently
than once in any 30-day period, to transfer amounts allocated to his
account to or from Fund A. Such election shall be made at such times
and pursuant to procedures prescribed by the Committee.
Notwithstanding the foregoing, prior to January 1, 1995, amounts
invested in Fund A/Household that are attributable to Matching Company
Contributions to the Prior Plan will be transferred to Fund A, subject
to the foregoing rules as to increments, timing and frequency.
13.8 SPECIAL INVESTMENT RULES FOR 1989 PLAN YEAR.
13.8 Special Investment Rules.
(A) Investment of Participant's Contributions.
Notwithstanding any other provision of the Plan, the
Committee shall adopt a special rule that precludes the
investment in Company Stock of a Participant's Tax Reduction
and Investment Plan Contributions and earnings thereon until
the Company Stock to be offered under the Plan is the
subject of a registration statement filed with and declared
effective by the Securities and Exchange Commission;
provided, however, that such special rule shall not apply to
shares of Company Stock and earnings thereon that were
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received in exchange for shares of Household International,
Inc. common stock that were transferred to the Plan from the
Prior Plan.
(B) Reinvestment of Eljer and Schwitzer Stock in
Company Stock. Within such time period as the Committee
deems appropriate, the Committee shall direct that shares of
stock in Eljer Industries, Inc. and Schwitzer, Inc. received
by the Plan as a consequence of the spinoff of such
companies by Household International, Inc. in April, 1989 be
sold or exchanged and that shares of Company Stock be
substituted therefor. Any such sale or exchange may be made
with the Schwitzer Tax Reduction Investment Plan or the
Eljer Tax Reduction Investment Plan or in the open market
but, in all events, shall be made at fair market value.
13.9 SPECIAL INVESTMENT ELECTION PERIODS.
The Committee may, at any time, in its discretion, permit
Participants to change their investment directions under Article
13.5(B), or to transfer contributions to the Trust (other than
Matching Company Contributions) from one Investment Fund to one or
more other Investment Funds under Article 13.7, during any period of
time and effective as of any date that the Committee shall designate,
in addition to the periods of time and effective dates set forth in
Articles 13.5(B) and 13.7.
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ARTICLE 14
VESTING; FORFEITURES
--------------------
14.1 VESTING OF ACCOUNTS.
(A) Years of Matching Company Account Test.
If a Participant's employment with the Company or an Affiliate is
terminated for any reason other than a reason described in (B) hereof,
the Participant shall:
(a) be entitled to the entire amount in his account
attributable to his Rollover Contributions, his Investment Plan
Contributions, and his Tax Reduction Contributions, including in
each case any contributions made for the year of termination of
employment but not yet allocated; and
(b) be vested in, and entitled to, an amount equal to a
percentage of the portion of his account attributable to Matching
Company Contributions. Such percentage shall be determined in
accordance with the following schedule:
Years of Matching Vested Forfeited
Company Account Percentage Percentage
------------------- ------------ ------------
less than 1 0% 100%
1 but less than 2 20% 80%
2 but less than 3 40% 60%
3 but less than 4 60% 40%
4 but less than 5 80% 20%
5 or more 100% 0%
For purposes of this Article 14.1, "Years of Matching Company
Account" will be measured in calendar quarters beginning with the
first calendar quarter coincident with or immediately following the
later to occur of April 1, 1989 or the Participant's date of hire by
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any Company or any Affiliate and ending with the calendar quarter in
which the Participant's employment with all Companies and all
Affiliates terminates, provided however that a Participant's Years of
Matching Company Account shall include such Participant's Years of
Service under the Prior Plan as of March 31, 1989. Year of Matching
Company Contributions shall include an approved leave granted to an
Employee on or after August 5, 1993 pursuant to the Family and Medical
Leave Act, if the Employee returns to work for a Company or an
Affiliate at the end of such leave of absence.
(B) Other Circumstances. A Participant shall be 100% vested
upon his attainment of age 65, his eligibility for normal or early
retirement (as defined under any tax-qualified defined benefit plan
maintained by a Company or an Affiliate in which he participates), his
death prior to termination of employment with a Company or an
Affiliate, or his Disability (as determined by the Committee). In
addition, the Committee may accelerate vesting to 100% in special
circumstances including, but not limited to, a sale of stock or assets
of an Employee's employer.
14.2 FORFEITURE OF NON-VESTED INTEREST.
The portion of a Participant's account attributable to Matching
Company Contributions in which he is not vested when his employment
with a Company or an Affiliate is terminated shall be forfeited upon
the earlier of (i) the date that he receives a distribution of his
entire vested interest (including for this purpose, an annuity
contract that represents his right to such vested interest), or (ii)
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the date upon which he incurs a one year Break in Service (as defined
in Article 1.1). A Participant who does not have any vested interest
in the portion of his account attributable to Matching Company
Contributions as of his date of termination of employment with all
Companies and all Affiliates shall be deemed to have received a
distribution for purposes of (i) hereof as of his date of termination
of employment.
14.3 RESTORATION OF NON-VESTED INTEREST.
If, following his termination of employment, a Participant
received a distribution of his entire vested interest under the Plan
and then is reemployed and performs an Hour of Service prior to the
fifth anniversary of the date on which he received a distribution, the
entire amount forfeited, unadjusted for gains and losses following the
distribution, shall be restored to his account. At any time
thereafter, the amount in which he is vested shall be determined by
applying his vested percentage against the sum of the distribution and
the amount restored; provided, however, that the amount actually
distributed to him upon his subsequent termination of employment shall
be offset by the amount previously distributed.
14.4 RESTORATION OF YEARS OF MATCHING COMPANY ACCOUNT.
If a Participant is reemployed by a Company or an Affiliate
following the date he incurs a one year Break in Service, the
following rules shall apply with respect to his Years of Matching
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Company Account completed prior to the date he incurred the one year
Break in Service:
1. If any part of the Participant's account derived from
contributions made by a Company was nonforfeitable when he
incurred such one year Break in Service, his Years of Matching
Company Account completed prior to such one year Break in Service
shall be taken into account for purposes of vesting pursuant to
paragraph (b) of Article 14.1(A) after he has completed a Year of
Matching Company Account following his return to employment.
2. If no part of the Participant's account derived from
contributions made by a Company was nonforfeitable when he
incurred such one year Break in Service, his years of Matching
Company Account completed prior to such one year Break in Service
shall be taken into account for purposes of vesting pursuant to
paragraph (b) of Article 14.1(A) after he has completed a Year of
Matching Company Account following his return to employment;
provided, however, in no event shall his Years of Matching
Company Account completed prior to such one year Break in Service
be taken into account if the number of his consecutive one year
Breaks in Service equals or exceeds the greater of (a) five, or
(b) the aggregate number of Years of Matching Company Account
completed prior to such one year Break in Service.
- 74 -<PAGE>
ARTICLE 15
DISTRIBUTIONS
-------------
15.1 TIMING OF DISTRIBUTIONS; APPLICABLE VALUATION DATE.
(A) General Rule. Normally, the vested interest of a
Participant (or beneficiary) shall become distributable to him as soon
as administratively practicable following the Valuation Date
coincident with or next following the Participant's date of
termination of employment with the Company and all Affiliates for any
reason (including death). The amount distributable shall be valued as
of such Valuation Date; provided, however, that payments from Fund
A/Scotsman that are made in cash in lieu of in shares shall have a
value equal to the proceeds obtained by the Trust in exchange for the
shares sold in order to make such payments.
(B) Consent to Immediate Distribution; Deferral if Consent Not
Obtained. If the value of a Participant's account as of the
applicable Valuation Date under (A) exceeds $3,500, distribution
thereof shall be made to the Participant (or the beneficiary of a
deceased Participant) as soon as practicable after the Participant (or
beneficiary) consents in writing to the distribution if such consent
is delivered to the Committee within 12 months after the applicable
Valuation Date. If the Participant (or beneficiary) does not consent
to the distribution within 12 months after the applicable Valuation
Date, then distribution of such account shall occur as soon as
administratively practicable after the Valuation Date coincident with
or next following the Participant's attainment of age 65 (or the date
the Participant would have attained age 65 in the case of a
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beneficiary). The amount distributable pursuant to the preceding
sentence shall be valued in the same manner as under (A) hereof, but
as of such later Valuation Date.
(C) Retirement-Eligible Deferrals. If a Participant is eligible
for normal or early retirement (as defined under any tax-qualified
defined benefit plan maintained by a Company or Affiliate in which he
participates) as of his date of termination of employment with all
Companies and all Affiliates, then, regardless of the value of his
account, he may elect to defer the receipt of his vested interest to a
date as soon as administratively practicable following a Valuation
Date specified by him, no later than December 31 of the year following
the year in which his employment terminates (or the date specified
under (B) hereof, if later). The amount distributable shall be valued
in the same manner as under (A) hereof, but as of such later Valuation
Date. A beneficiary also may elect to defer distribution hereunder
if, as of the date of the Participant's death, he was eligible for
normal or early retirement.
(D) Treatment of Accounts in the Case of Deferred Distributions.
If a Participant or beneficiary elects to defer distribution of the
Participant's vested interest pursuant to (B) or (C) hereof, the
Participant's account shall continue to share in the earnings and
losses of the Trust until the applicable Valuation Date under (B) or
(C) Transfers among Investment Funds also shall be permitted until
such Valuation Date. Loans shall be immediately due and payable upon
the Participant's date of termination of employment.
- 76 -<PAGE>
15.2 METHOD OF DISTRIBUTION.
Notwithstanding the following provisions of this Section, the
only form of distribution available to an individual who becomes a
Participant on or after July 1, 1989 shall be a single sum
distribution.
All amounts which a Participant or a beneficiary shall be
entitled to receive under the Plan shall be distributed as a single
sum distribution, unless the Participant elects an annuity as
described below. Payment from Fund B or Fund C shall be in cash.
Payments in the form of a single sum distribution from Fund A shall be
in cash or stock or a combination of both, in the discretion of the
Participant; provided, however, that no distribution of less than
twenty (20) shares will be made from either Fund A or, prior to
January 1, 1995 from Fund A/Household, and provided, further, that
partial shares will be paid in cash. Payments in the form of a single
sum distribution from Funds D, E, F and G shall be in cash, shares of
the applicable Fund, or a combination of both, in the discretion of
the Participant.
A Participant (who does not have a loan outstanding) may elect to
receive his distribution in a single sum, as an immediate annuity
purchased under the group annuity contract or contracts, or as a
combination of both, or in any other form available through a group
annuity contract issued to the Plan by a legal reserve life insurance
company authorized to do business in Illinois. The forms of immediate
annuity available under the group annuity contract or contracts shall
include the following:
- 77 -<PAGE>
(a) Qualified Joint and Survivor Annuity. An annuity for the
life of the Participant with a survivor annuity for the life of
such Participant's spouse which is not less than one-half, or
greater than, the amount of the annuity payable during the joint
lives of the participant and such Participant's spouse.
(b) Annuity Certain and Life. An annuity to the Participant for
a specified number of monthly payments. Thereafter, payments
will continue for as long as the annuitant lives.
If a married Participant who is eligible to elect to receive an
annuity elects payment in the form of a life annuity, it will be
provided in the form of a qualified joint and survivor annuity,
provided, that such Participant (i) may elect with the consent of his
spouse (given pursuant to the provisions of Article 15.3) not to take
the qualified joint and survivor annuity and (ii) may revoke an
election not to take a qualified joint and survivor annuity or choose
again to take a qualified joint and survivor annuity at any time and
any number of times prior to the commencement of benefit payments. No
annuity may be purchased unless the payments of the annuity will equal
or exceed $50 per month.
15.3 DESIGNATION OF BENEFICIARY.
A Participant may designate from time to time a beneficiary or
beneficiaries (who may be designated contingently or successively and
may be an entity other than a natural person) to be entitled under
Article 15.1 to receive any vested, undistributed amounts credited to
the Participant's account under the Plan at the time of the
- 78 -<PAGE>
Participant's death (reduced by the amount of any outstanding loan);
provided, however, that if a beneficiary other than the surviving
spouse of the Participant is named, the designation is valid only with
the consent of such spouse. The consent must acknowledge the effect
of the election not to be the sole beneficiary and must be witnessed
by a notary public or a Plan representative. Spousal consent may be
dispensed with only if it is established to the satisfaction of the
Committee that: (i) such consent is not obtainable, either because
there is no spouse, or the spouse cannot be located; or (ii) because
of such other circumstances as the Secretary of the Treasury may by
regulations prescribe. Subject to the foregoing, any such beneficiary
designation shall be made on a form prescribed by the Committee, and
shall be effective only when filed with the Committee during the
Participant's lifetime. A Participant may change or revoke his
beneficiary designation at any time by filing a new instrument with
the Committee. If the designated beneficiary (or each of the
designated beneficiaries) predeceases the Participant, the
Participant's beneficiary designation shall be ineffective. In
determining whether any person named as a beneficiary is living at the
time of a Participant's death, if such person and the Participant die
in a common accident or disaster and there is insufficient evidence to
determine which person died first, then it shall be deemed that the
beneficiary died first. If no valid beneficiary designation is in
effect at the time of the Participant's death, the amount payable will
be paid in equal shares to those person(s) then living in the first of
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the following classes of successive preference beneficiaries being the
deceased Participant's:
(a) widow or widower;
(b) descendants, per stirpes (including adopted children);
(c) parents;
(d) brothers and sisters;
(e) executors or administrators.
15.4 ELECTION OF DISTRIBUTION.
If a distribution is one to which Sections 401(a)(11) and 417 of
the Code do not apply, distribution of the Participant's accounts may,
pursuant to the preceding clauses of this paragraph, 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:
(1) the Committee 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); and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
- 80 -<PAGE>
15.5 CODE SECTION 401(A)(9).
Notwithstanding anything to the contrary contained elsewhere in
the Plan:
(A) A Participant's benefits under the Plan will:
(1) be distributed to him not later than the Required
Distribution Date (as defined in subsection (c), or
(2) be distributed commencing not later than the
Required Distribution Date in accordance with regulations
prescribed by the Secretary of Treasury over a period not
extending beyond the life expectancy of the Participant or
the life expectancy of the Participant and his beneficiary.
(B) (1) If the Participant dies after distribution has
commenced pursuant to subsection (A)(2) but before his entire
interest in the Plan has been distributed to him, then the
remaining portion of that interest will be distributed at least
as rapidly as under the method of distribution being used under
subsection (A)(2) at the date of his death.
(2) If the Participant dies before distribution has
commenced pursuant to subsection (A)(2), then, except as
provided in subsections (B)(3) and (B)(4), his entire
interest in the Plan will be distributed within five years
after his death.
(3) Notwithstanding the provisions of subsection
(B)(2), if the Participant dies before distribution has
commenced pursuant to subsection (A)(2) and if any portion
of his interest in the Plan is payable (A) to or for the
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benefit of a beneficiary, (B) in accordance with regulations
prescribed by the Secretary of the Treasury over a period
not extending beyond the life expectancy of the beneficiary,
and (C) beginning not later than one year after the date of
the Participant's death or such later date as the Secretary
of the Treasury may prescribe by regulations, then the
portion referred to in this subsection (B)(3) shall be
treated as distributed on the date on which such
distribution begins.
(4) Notwithstanding the provisions of subsections
(B)(2) and (B)(3), if the beneficiary referred to in
subsection (B)(3) is the surviving spouse of the
Participant, then
(a) the date on which the distributions are
required to begin under subsection (B)(3)(C) shall not
be earlier than the date on which the Participant would
have attained age 70-1/2, and
(b) if the surviving spouse dies before the
distributions to that spouse begin, then this
subsection (B)(4) shall be applied as if the surviving
spouse were the Participant.
(C) For purposes of this Article 15.5 the Required
Distribution Date means April 1 of the calendar year
following the calendar year in which the Participant attains
age 70-1/2, provided, however, that in the case of a
Participant who attains age 70-1/2 during calendar year 1988
- 82 -<PAGE>
or 1989, the Required Distribution Date means April, 1990,
and further provided that if the Participant attained age
70-1/2 prior to January 1, 1988, distribution shall commence
on the April 1 following the later of the calendar year in
which he: (A) attained age 70-1/2 or (B) terminated service
with the Company and all Affiliates, unless he was a five-
percent owner (as defined in Section 416 of the Code) of the
Company with respect to the Plan Year ending in the calendar
year in which he attained age 70-1/2, in which case clause
(B) shall not apply.
(D) For purposes of this Article 15.5, the life
expectancy of a Participant and his surviving spouse may be
redetermined, but not more frequently than annually. This
subsection (D) shall not apply in the case of a life
annuity.
(E) A Participant may not elect a form of distribution
providing payments to a beneficiary who is other than this
surviving spouse unless the actual value of the payments
expected to be made to the Participant is more than 50% of
the actuarial value of the total payments expected to be
made under such form of distribution.
(F) Notwithstanding the preceding provisions of this
Article 15.5, a Participant's benefit under the Plan shall
be distributed to him or his surviving spouse or beneficiary
pursuant to any valid distribution designation made by the
Participant prior to January 1, 1984 in accordance with
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Section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act of 1982 (as in effect before any
amendments made by the Tax Reform Act of 1984) unless such
designation is revoked by the Participant in writing.
ARTICLE 16
WITHDRAWALS
-----------
16.1 WITHDRAWAL CATEGORIES.
A Participant may make a withdrawal of all or part of his
account; provided, however, that a minimum of $500 or the balance of
the Participant's account must be withdrawn and only two non-hardship
withdrawals may be made in each Plan Year. Withdrawals must be made
of all amounts eligible for withdrawal in each category below (listed
in descending order) before amounts in the next lower category may be
withdrawn:
Category A: Investment Plan Contributions (excluding earnings
thereon) which were not matched by Matching Company Contributions
prior to January 1, 1995. Unmatched Investment Plan Contributions
made prior to 1987 will be withdrawn prior to subsequent unmatched
Investment Plan Contributions. Withdrawals from this category may be
made twice per Plan Year.
Category B: Investment Plan Contributions (excluding earnings
thereon) (i) which were matched by Matching Company Contributions
prior to January 1, 1995, or (ii) which were made on and after January
1, 1995, excluding the most recent 24 months of Investment Plan
Contributions; provided, however, that after five years of
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participation, 100% of the Investment Plan Contributions (including
earnings thereon) may be withdrawn. Matched Investment Plan
Contributions made prior to 1987 will be withdrawn prior to subsequent
Matched Investment Plan Contributions. Withdrawals from this category
may be made twice per Plan Year.
Category C: Matching Company Contributions (plus earnings
thereon) plus earnings on all Investment Plan Contributions after five
years of participation in the Plan. Withdrawals from this category
may be made once per Plan Year.
Category D: Rollover Contributions (plus earnings thereon).
Withdrawals from this category may be made twice per Plan Year.
Category E: Tax Reduction Contributions (but only to the extent
of the value of the Participant's Tax Reduction Contributions sub-
account in the Prior Plan as of December 31, 1988 plus earnings
thereon, plus the amount of his Tax Reduction Contributions to the
Prior Plan and to this Plan thereafter excluding earnings thereon)
upon meeting the hardship requirements set forth herein. Withdrawals
from this category may be made once per Plan Year.
16.2 HARDSHIP WITHDRAWALS.
(A) General Rule. A Participant may make a hardship withdrawal
only if the withdrawal is made on account of an immediate and heavy
financial need of the Participant and if the withdrawal is necessary
to satisfy such financial need.
(B) Immediate and Heavy Financial Need. A withdrawal will be
deemed to be made on account of an immediate and heavy financial need
- 85 -<PAGE>
of the Participant if the withdrawal is on account of one of the
following:
(1) Medical expenses described in Section 213(d) of the
Code previously incurred by the Participant, the
Participant's spouse, or any dependent of the Participant
(as defined in Section 152 of the Code) or necessary for any
of these persons to obtain medical care described in Code
Section 213(d);
(2) Purchase (excluding mortgage payments) of a principal
residence of the Participant;
(3) Payment of tuition and related educational fees for the
next twelve months of post-secondary education for the
Participant, his spouse or dependents; or
(4) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage
of the Participant's principal residence.
(C) Taxes on Distribution. The amount distributed shall not be
in excess of the immediate and heavy financial need of the Participant
which need shall be deemed to include any amounts reasonably
anticipated by the Participant to be necessary to pay federal, state
or local income taxes and penalties incurred as a result of the
distribution.
(D) Loans. The Participant shall first obtain all
distributions, other than hardship distributions, and all nontaxable
loans currently available under the Plan and all other plans
maintained by all Companies and all Affiliates.
- 86 -<PAGE>
(E) Consequences of Hardship Withdrawals. The Participant's
elective contributions and employee contributions (as defined in
Regulations ^U 1.401(k)) shall be suspended under the Plan and all
other deferred compensation plans maintained by the Company and all
Affiliates for 12 months after his receipt of the hardship
distribution (except for mandatory employee contributions to a defined
benefit plan). The Participant may not make elective contributions
(as defined in Regulations ^U 1.401(k)) under the Plan or any other
plan maintained by the Company or an Affiliate for the Participant's
taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such
Participant's elective contributions for the taxable year of the
hardship distribution.
16.3 MANNER OF MAKING WITHDRAWALS.
Any withdrawal by a Participant under this Article 16 shall be
made only after the Participant files a written request with the
Committee specifying the category of the withdrawal and the amount
requested to be withdrawn. Upon approving the amount of any
withdrawal, the Committee shall furnish the Trustee with written
instructions directing the Trustee to make a payment of the withdrawal
in accordance with this Article 16.3. Payments from Funds B and C
shall be in cash. Payments from Fund A, or from Fund A/Household
prior to January 1, 1995, shall be in cash or stock or a combination
of both in the discretion of the Participant; provided however, that
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(i) a hardship withdrawal only may be made in cash and (ii) no
distribution of less than twenty (20) shares will be made from either
Fund A/Household prior to January 1, 1995 or Fund A, and partial
shares will be paid in cash. Payments from Funds D, E, F and G shall
be in cash, shares of the applicable Fund, or a combination of both,
in the discretion of the Participant.
Payment to the Participant, determined as of the Valuation Date
immediately preceding the date of the Participant's withdrawal
request, shall be made as soon as practical following the date of the
withdrawal request. Any portion of the requested withdrawal amount
not paid to the Participant pursuant to the preceding sentence shall
be paid to him as soon as practical following the Valuation Date
coincident with or immediately succeeding the date of the withdrawal
request; provided however that, in no event shall the amount paid to
the Participant pursuant to this sentence exceed the vested balance of
the Participant's accounts from which the withdrawal is to be made,
determined as of such coincidental or succeeding Valuation Date.
16.4 WITHDRAWALS UPON ATTAINMENT OF AGE 59-1/2.
Any Participant who has attained age 59-1/2 may, in addition to
the withdrawal options provided in Article 16.1, elect once each Plan
Year to withdraw all or part of his vested accounts; provided,
however, that withdrawals must be made of all amounts eligible for
withdrawal in each classification below (listed in descending order)
before amounts in the next lower classification may be withdrawn:
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Category A: Investment Plan Contributions (excluding earnings
thereon) which were not matched by Matching Company Contributions
prior to January 1, 1995. Unmatched Investment Plan Contributions
made prior to 1987 will be withdrawn prior to subsequent Investment
Plan Contributions.
Category B: Investment Plan Contributions (excluding earnings
thereon) (i) which were matched by Matching Company Contributions
prior to January 1, 1995, or (ii) which were made on or after January
1, 1995, excluding the most recent 24 months of Investment Plan
Contributions; provided, however, that after five years of
participation, 100% of the Investment Plan Contributions (including
earnings thereon) may be withdrawn. Matched Investment Plan
Contributions made prior to 1987 will be withdrawn prior to subsequent
Investment Plan Contributions.
Category C: Matching Company Contributions (plus earnings
thereon) plus earnings on all Investment Plan Contributions after five
years of participation in the Plan.
Category D: Rollover Contributions (plus earnings thereon).
Category E: Tax Reduction Contributions (plus earnings thereon).
16.5 INVESTMENT FUNDS.
Withdrawals pursuant to this Article 16 shall be made from one or
more Investment Funds (in multiples of 5%) of the Participant as he
shall designate in his withdrawal request.
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ARTICLE 17
LOANS
----------
17.1 GENERAL RULE.
Loans are available to Participants. These loans are limited to
a minimum of $500 each, in increments of $100, and may be granted
twice per year. No more than two non-residential loans and one
residential loan may be outstanding at any time.
17.2 AMOUNT OF LOAN.
Upon receipt of a written request from an active Participant and,
to the extent not inconsistent with Section 401(a) of the Code, from a
former Participant who is a party in interest (as defined in Section
3(14) of ERISA) and who has retained an account under the Plan
("Former Participant"), the Committee may direct the Trustee to make a
loan to such requesting active or Former Participant. The total
amount of any such loan shall not cause the outstanding balance of all
loans to the Participant under all qualified plans of the Company and
its Affiliates to exceed the lesser of:
(a) $50,000, reduced by the excess (if any) of (i) the highest
outstanding loan balance applicable to the Participant during the
one year period ending on the day before the date the loan is to
be made, over (ii) the outstanding balance of all loans to the
Participant under any qualified plan of the Company or an
Affiliate on the date on which the loan is to be made; or
(b) fifty percent (50%) of the Participant's vested interest
under the Plan.
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For purposes of this Article 17.2, the Participant's vested
interest under the Plan shall be determined as of the Valuation Date
immediately preceding the date on which the proceeds of a loan made
under this Article are disbursed to a borrowing Participant.
17.3 SECURITY FOR LOAN.
Any loan to a Participant under this Article 17 shall be secured
by the pledge of 50% of the Participant's vested right, title and
interest in the Trust supported by the execution of a promissory note
for the amount of the loan, including interest, payable to the order
of the Trustee.
17.4 INTEREST RATE CHARGED.
The interest rate charged on any loan made under this Article 17
shall be determined by the Committee and shall provide a rate of
return commensurate with the interest rate charged by persons in the
business of lending money, that would be made under similar
circumstances at the time that the loan is made.
17.5 REPAYMENT OF LOANS.
(A) General. Any loan to a Participant under this Article 17
shall be repaid within five years of the date on which the loan is
made, except that loans used to acquire or construct any dwelling unit
which is within a reasonable time to be used as a principal residence
of the Participant may be repaid over a longer period of time (not
greater than 30 years) as determined by the Committee; provided,
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however, that any loan shall be repaid on or before the Participant's
final distribution date. Loans shall be amortized on a level basis
and repaid in regular, substantially equal installments which shall be
applied to reduce the principal as well as the accrued interest on the
loan. Loans made to active Participants shall be repaid by payroll
deductions on a schedule prescribed by the Committee (with payments
made at least quarterly). Loans made to Former Participants shall be
repaid by personal check on a schedule prescribed by the Committee
(with payments made at least quarterly).
(B) Payment to Trustee. Each loan repayment shall be paid to
the Trustee, and shall be accompanied by written instructions from the
Committee that:
(a) identify the Participant on whose behalf the repayment
is being made; and
(b) direct the investment of the loan repayment to the
Investment Fund account in the same proportion as elected by
the Participant in Article 13.5 as if the repayments were
future contributions.
(C) Security not to be Jeopardized. No distribution of benefits
under Article 15 or withdrawals under Article 16 which jeopardize the
security of the loan shall be made from amounts credited to a
Participant's account under the Plan unless and until all unpaid
loans, including accrued interest thereon, to the Participant have
been satisfied.
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17.6 DEFAULT ON LOAN.
In the event of a default by a Participant on a loan repayment,
all remaining repayments on the loan shall be immediately due and
payable, and the entire amount of the unpaid balance of such loan and
accrued interest thereon shall be considered and treated as having
been distributed in cash under Article 15 as of the date of default,
and an appropriate adjustment of his account shall be made therefor.
Notwithstanding the foregoing, the Committee may use alternative means
to pursue payment of a loan in default if such alternative means are
necessary to prevent a distribution from the portion of the
Participant's account that is attributable to Tax Reduction
Contributions and that would contravene Section 401(k) of the Code.
For the purposes of this Article 17.6, any of the following shall
constitute an event of default:
(i) any payments of principal or accrued interest on a
loan to a Participant remain due and unpaid for a period of
ten days after the same becomes due and payable under the
terms of the loan;
(ii) a proceeding in bankruptcy, receivership, or
insolvency is commenced by or against the borrowing
Participant;
(iii) an active Participant's employment with the
Company and all Affiliates terminates and he does not become
a Former Participant;
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(iv) the borrowing Participant becomes a Former
Participant and thereafter he receives a distribution of the
adjusted balance of his accounts; or
(v) the borrowing Participant attempts to make an
assignment, for the benefit of creditors, of any security
for the loan.
17.7 MANNER OF MAKING LOANS.
All requests by a Participant for a loan from the Trust shall be
made in writing to the Committee and a loan shall be disbursed as of
the next administratively practicable Valuation Date. The Committee
shall apply its standards for the approval of loans in a uniform and
consistent manner with respect to all Participants and shall approve a
loan if the requirements of this Article 17 are satisfied. If a
Participant's request for a loan is approved by the Committee, the
Committee shall furnish the Trustee with written instructions
directing the Trustee to make the loan in a single sum payment in cash
to the Participant. Such payment shall be made by withdrawing as of
the previous Valuation Date amounts from such of the separate
Investment Funds of the Participant under the Plan as he shall
designate (in multiples of 5%). Loans made to Former Participants
will be subject to completion of a separate loan application
containing additional financial information, including income from
subsequent employment and other sources.
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17.8 ACCOUNTING FOR LOANS.
A loan to a Participant (and interest thereon) shall be
considered a Plan investment, and repayments shall be credited to an
Investment Fund in accordance with Article 13.5 as if such repayments
were future contributions; provided, however, that repayments
attributable to money borrowed from the portion of a Participant's
account attributable to Matching Company Contributions and interest
thereon shall be credited to Fund A.
ARTICLE 18
ADMINISTRATION
--------------
18.1 ALLOCATION OF RESPONSIBILITIES AMONG FIDUCIARIES.
A fiduciary to the Plan shall have only those specific powers,
duties, responsibilities and obligations as are explicitly given him
under the Plan and the Trust Agreement. In general, Scotsman Group
Inc., shall have the sole authority to establish the Plan and Trust
and to amend or terminate, in whole or in part the Plan or the Trust
Agreement subject to the provisions of Article 19. The Chief
Executive Officer of Scotsman Group Inc. shall have the sole authority
to appoint and remove three or more members of the Committee. The
Company shall have the sole responsibility for making contributions to
the Plan. The Committee shall have the sole responsibility for the
administration of the Plan as more fully described in Article 18.2.
Subject to Participants' investment directions under Article 13, and
subject to Committee directions under Article 18.2, the Trustee shall
have the sole responsibility for the administration of the Trust and
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the management of the assets held thereunder, as provided in the Trust
Agreement. It is intended that each fiduciary shall be responsible
only for the proper exercise of his own powers, duties,
responsibilities and obligations under the Plan and the Trust
Agreement and shall not be responsible for any act or failure to act
of another fiduciary. A fiduciary may serve in more than one
fiduciary capacity with respect to the Plan.
It is expressly provided that any fiduciary to the Plan and the
Trust may also be an Employee of the Company.
No fiduciary guarantees the Trust Fund in any manner against
investment loss or depreciation in asset value or guarantees the
payment of any benefits that may be or become due to any person from
the Trust Fund. No Participant or other person shall have any
recourse against any fiduciary if the Trust Fund is insufficient to
provide Plan benefits in full.
18.2 POWERS AND RESPONSIBILITIES OF THE COMMITTEE.
The Committee as the Plan administrator and named fiduciary of
the Plan shall have all powers, duties, responsibilities and
obligations imposed by law and by the provisions of the Plan and the
Trust except those specifically granted or allocated by those
instruments to the Board of Directors, to Scotsman Group Inc., to its
Chief Executive Officer, to the Trustee or to any investment manager
appointed by the Committee, and those which the Committee has
delegated or allocated to any other person. Such powers, duties,
responsibilities and obligations of the Committee shall include, but
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shall not be limited to, excluding direct or indirect subsidiaries of
Scotsman Group Inc. from participation in the Plan, refunding
contributions, appointing and removing the Trustee, any investment
manager, and any other person appointed or employed to render advice
with regard to the Plan, including but not limited to such counsel,
accountants and other experts as it deems necessary, determining and
instructing the Trustee and any investment managers on the funding,
investment policies, methods and objectives of the Trust, designating
and rescinding the designation of Trust assets which the Trustee and
each investment manager is to control, accepting or rejecting any
tendered Rollover Contribution, refunding Rollover Contributions,
determining the form of and providing any written documents to be used
under the Plan, receiving and maintaining such documents, authorizing
or denying contributions to and withdrawals or distributions out of
the Trust and in accordance with the provisions of the Plan, providing
a full and fair review of the denial of any claimed contribution,
loan, withdrawal or distribution out of the Plan with a written notice
setting out the specific reason for the denial of his claim written in
a manner calculated to be understood by the Participant, preparing and
submitting all reports, notices, insurance premiums and applications
with respect to the Plan and the Trust required by law and for the
continual qualification of the Plan and the Trust under Sections 401
and 501 of the Code, preparing and furnishing all reports and
communications required by law or as it deems appropriate to persons
to whom benefits are being paid or may become payable under the Plan,
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and taking such further actions as may be necessary for the
administration of the Plan.
Any construction, interpretation or application of the Plan by
the Committee shall be final, conclusive and binding on the Companies,
and all Participants and their beneficiaries and other successors in
interest. Limitations and interpretations under the Plan shall be
determined to the best of the ability of the Committee based on such
information as is reasonably available at the time a decision is made.
All actions by the Committee shall be taken pursuant to uniform
standards consistently applied to all persons similarly situated.
18.3 CONCLUSIVENESS OF RECORDS.
In administering the Plan, the Committee may conclusively rely
upon each Company's and any Affiliate's payroll and personnel records
maintained in the ordinary course of business.
18.4 EXPENSES.
The expenses of administering the Plan, other than compensation
of persons on the payroll of each Company, but including fees of the
Trustee, counsel, accountants or other experts appointed under the
Plan, shall be paid out of the Trust Fund to the extent not paid by
the Companies.
18.5 CLAIMS PROCEDURE.
(A) Filing of Claim. Any claim, including but not limited to a
claim for distribution, loan or withdrawal shall be submitted to the
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Committee through the designee which it has appointed for the Company
facility where the Participant with respect to whom the payment is
claimed, is, or was last employed, or, if no such designee has been
appointed, then to the Administrative and Investment Committee,
Scotsman Group Inc., 775 Corporate Woods Parkway, Vernon Hills,
Illinois 60061. Submissions shall be made in the form and within the
time period designated by the Committee. Satisfactory proof of
eligibility and information necessary to determine the amount of such
distribution, loan, or withdrawal, including, where appropriate, age,
date of death of a Participant or a prior beneficiary, appointment as
executor, administrator or guardian and such other information as is
reasonably required in the circumstances must be submitted. The
Committee shall authorize or deny requests for a loan or payment of
any claimed amount within a reasonable period of time, but not later
than 90 days after receipt of the claim. If the claimant shall not be
notified in writing of the denial of the claim within 90 days after it
is received by the Committee, the claim shall be deemed denied.
(B) Notice of Denial of Claim. If a claim is denied, the
Committee shall notify the claimant in writing. Such written notice
shall contain:
(a) the specific reason or reasons for denial;
(b) a specific reference to the provisions of the Plan on which
such denial is based;
(c) a description of any additional material or information
necessary for such person to perfect such claim, with an
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explanation of why such additional material or information is
necessary; and
(d) an explanation of the Plan's review procedure as set forth in
Article 18.5(C). This written notice of denial of claim shall be
written in a manner calculated to be understood by the claimant.
(C) Right of Review. Each claimant whose claim has been denied
in whole or in part, and any authorized representative of such person,
may review all documents pertinent to such denial and, within 60 days
after receipt by such claimant of the notification provided for in
Article 18.5(B), may request, by written notice sent to the Committee,
a review of such denial and may submit to the Committee written issues
and comments for consideration as part of such review. No claimant or
representative shall have any right to appear personally, nor shall
the Committee be obligated to hold any meetings with any claimant or
representative, or hold any hearings, as part of such review. The
Committee shall conduct such review as expeditiously as reasonably
possible, and shall give due consideration to all written issues and
comments submitted by or on behalf of the claimant. A decision on
such review shall be made, if reasonably possible, within 60 days
after receipt of the request for such review, but in any event not
later than 120 days after receipt of such request. The decision shall
be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by the claimant, and
shall also include specific references to the pertinent Plan
provisions on which the decision is based.
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ARTICLE 19
AMENDMENT, TERMINATION AND MERGER
---------------------------------
19.1 AMENDMENTS.
Scotsman Group Inc. hopes and intends to continue the Plan
indefinitely but reserves the right to amend, suspend, or terminate
the Plan and the Trust for itself and its direct and indirect
subsidiaries and to discontinue or modify Company contributions, at
any time. Except to the extent required or permitted by the Code and
other applicable law, the accrued benefit of any Participant, former
Participant, or beneficiary shall not be adversely affected
retroactively by any such action.
19.2 PLAN TERMINATION.
In case of the termination of the Plan by Scotsman Group Inc.,
the complete discontinuance of contributions to the Plan, or a partial
termination of the Plan with respect to a group of Participants, the
account balance of each affected Participant shall become 100% vested.
In any such event, the Committee shall determine the manner and timing
of distributions, provided that such distribution of Tax Reduction
Contributions and earnings thereon shall only occur prior to the first
to occur of (a) a Participant's separation from service, death or
disability, (b) the Participant's attainment of age 59-1/2, or (c) the
Participant's hardship (as defined in Article 16.2) if none of the
Companies nor any Affiliate establishes or maintains another defined
contribution plan (other than an employee stock ownership plan as
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defined in Section 4975(e)(7) of the Code) following termination of
the Plan.
19.3 DISTRIBUTIONS UPON CERTAIN SALES.
Notwithstanding any other provisions of the Plan, there may be a
single lump sum distribution from the Plan to a Participant following:
(1) the date of sale or other disposition by a Company to an
unrelated entity of substantially all of the assets (within the
meaning of Section 409(d)(2) of the Code) used by the Company in a
trade or business of the Company where the Participant is employed by
such trade or business, if such Participant continues employment with
the entity acquiring such assets and the Company continues to maintain
the Plan after the sale or other disposition. The sale of 85% of the
assets used in a trade or business shall be deemed a sale of
"substantially all" of the assets used in such trade or business.
(2) the date of the sale or other disposition by a Company of
the Company's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) to an unrelated entity, where the Participant
is employed by such subsidiary, if such Participant continues
employment with such subsidiary following such sale or other
disposition, and the Company continues to maintain the Plan after the
sale or other disposition.
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19.4 SUCCESSOR EMPLOYER.
In the event of the dissolution, merger, consolidation or
reorganization of Scotsman Group Inc. or any participating
subsidiaries, provision may be made by the Committee by which the Plan
and the Trust shall be continued by the successor company, in which
case such successor company shall be substituted for its predecessor
under the Plan. The substitution of the successor company shall
constitute an assumption of Plan liabilities by the successor company,
and the successor company shall have all powers, duties and
responsibilities of its predecessor under the Plan.
19.5 MERGER, CONSOLIDATION OR TRANSFER.
There shall be no merger or consolidation of the Plan with, or
transfer of assets or liabilities of the Plan to, any other plan of
deferred compensation maintained or to be established for the benefit
of all or some of the Participants of the Plan, unless each
Participant would (if either this Plan or such other plan then
terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the
benefit the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan
had then terminated).
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ARTICLE 20
MISCELLANEOUS
-------------
20.1 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES.
All assets of the Trust shall be maintained for the exclusive
benefit of Participants, and their beneficiaries, and shall be used
only to pay benefits to such persons or to pay the fees and expenses
of the Trust. The assets of the Trust shall not revert to the benefit
of the Company except as provided in Article 11.3
20.2 NON-GUARANTEE OF EMPLOYMENT.
Nothing contained in this Plan shall be construed as a contract
of employment between an Employee and any Company, or as a right of
any Employee to be continued in the employment of any Company, or as a
limitation of the right of any Company to discharge any of its
Employees, with or without cause, and no Employee or any other person
shall have any right or claim to any benefit or right under the Plan
which has not arisen under the express provisions of the Plan.
20.3 RIGHTS TO TRUST ASSETS.
No Employee, Participant, or beneficiary shall have any right to,
or interest in, any assets of the Trust upon termination of employment
or otherwise, except as provided under the Plan. All payments of
benefits under the Plan shall be made solely out of the assets of the
Trust.
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20.4 NON-ALIENATION OF THE RIGHT TO RECEIVE PAYMENTS.
Except as provided under Article 17 with respect to loans, and
except as may otherwise be required by law, benefits payable under the
Plan shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary, prior
to actually being received by the person entitled to the benefit under
the terms of the Plan, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any
right to benefits payable under the Plan shall be void. The account
of any Participant, however, shall be subject to and payable in
accordance with the applicable requirements of any qualified domestic
relations order, as that term is defined in Section 414(p) of the
Code, and the Committee shall direct the Trustee to provide for
payment from a Participant's account in accordance with such order and
with the provisions of Section 414(p) of the Code and any regulations
promulgated thereunder. A payment from a Participant's account may be
made to an alternate payee (as defined in Section 414(p)(8) of the
Code) prior to the date the Participant reaches his earliest
retirement age (as defined in Section 414(p)(4)(B) of the Code) if
such payments are made pursuant to a qualified domestic relations
order. Payments shall be made to the alternate payee from one or more
of the Investment Funds in which the Participant's account is
invested, in such manner and proportion as shall be set forth in the
qualified domestic relations order. If the qualified domestic
relations order does not designate the Investment Funds from which
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payment is to be made to the alternate payee, payment shall be made in
equal amounts from all such Investment Funds. All payments pursuant
to a qualified domestic relations order shall be subject to reasonable
rules and regulations promulgated by the Committee respecting the time
of payment pursuant to such order and the valuation of the
Participant's accounts from which payment is made; provided that all
such payments are made in accordance with such order and Section
414(p) of the Code. The balance of an account that is subject to any
qualified domestic relations order shall be reduced by the amount of
any payment made pursuant to such order.
20.5 CONTROLLING LAW.
The interpretation of the Plan and other questions arising in the
administration of the Plan shall be determined by ERISA, and (to the
extent that state law is applicable) by the laws of Illinois.
20.6 PLAN CONTROLS.
The Trust Agreement is a part of the Plan. In case of any
inconsistency between their respective provisions, the Trust Agreement
shall control. In the event of any conflict between the Plan and any
summary thereof, from whatever source, the language of the Plan shall
govern.
20.7 CONSTRUCTION.
Unless the context otherwise indicates, words of the masculine
gender include the feminine, the singular shall include the plural,
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and the plural shall include the singular. Titles of articles are
inserted for convenience only and shall not affect the meaning or
construction of the Plan.
20.8 EFFECT OF MISTAKE.
In the event of a mistake or misstatement as to age or
eligibility of any person, or the amount or kind of contributions,
withdrawals or distributions made or to be made to a Participant, or
other person, the Committee shall, to the extent it deems possible,
make such adjustment as will in its judgment accord to such person the
credits or distributions to which he is properly entitled under the
Plan.
20.9 UNCLAIMED FUNDS.
Each Participant shall keep the Committee informed of his current
address and the current address of his beneficiary or beneficiaries.
None of the Companies, the Committee and the Trustee shall be
obligated to search for the whereabouts of any person. If the
location of a Participant is not made known to the Committee within
three years after the date on which distribution of the Participant's
accounts may first be made, distribution may be made as though the
Participant had died at the end of the three-year period. If, within
one additional year after such three-year period has elapsed, or,
within three years after the actual death of a Participant, the
Committee is unable to locate any individual who would receive a
distribution under the Plan upon the death of the Participant pursuant
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to Article 15.3 of the Plan, the adjusted balance in the Participant's
accounts shall be deemed a forfeiture and shall be used to reduce
Matching Company Contributions to the Plan for the Plan Year next
following the year in which the forfeiture occurs; provided, however,
that in the event that the Participant or a beneficiary makes a valid
claim for any amount that has been forfeited, the benefits which have
been forfeited shall be reinstated.
ARTICLE 21
TOP-HEAVY PROVISIONS
--------------------
21.1 TOP-HEAVY PROVISIONS.
If the Plan is or becomes top-heavy as defined below in any Plan
Year, these provisions of Article 21 will supersede any conflicting
provisions in the Plan or Company election document.
21.2 DEFINITIONS.
For purposes of this Article 21 the following terms shall have
the following meanings:
(A) "Key Employee" means any Employee (and the beneficiaries of
such Employee) under this Plan who at any time during the
determination period was: (a) An officer of a Company if such
individual's annual compensation exceeds 150 percent of the dollar
limitation under Section 415(c)(1)(A) of the Code; provided, however,
that the number of individuals treated as Key Employees by reason of
being officers shall not exceed the lesser of fifty (50) or ten
percent (10%) of all Employees and provided, further, that if the
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number of individuals treated as officers is limited to fifty (50)
hereunder, the individuals treated as Key Employees shall be those
who, while officers, received the greatest annual compensation in the
Plan Year and any of the 4 preceding Plan Years (without regard to the
limitation set forth in Section 416(d) of the Code;
(b) An individual who was one of the 10 Employees owning or
considered as owning more than one and one-half percent (1-
1/2%) interest in value and the largest interests in value
in a Company who has annual Compensation in the applicable
Plan Year in excess of the dollar limitation under Section
415(c)(1)(A) of the Code, as increased under Section 415(d)
of the Code;
(c) A five percent (5%) owner of a Company; or
(d) A one percent (1%) owner of a Company who has an annual
Compensation of more than $150,000. The determination
period is the Plan Year containing the determination date
and the 4 preceding Plan Years.
The determination of who is a key employee will be made in
accordance with section 416(i)(1) of the Code and the regulations
thereunder.
(B) "Top-heavy plan" means that for any Plan Year, any of the
following conditions exists:
(a) The top-heavy ratio for this Plan exceeds 60
percent and this Plan is not part of any required
aggregation group or permissive aggregation group of
plans.
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(b) This Plan is part of a required aggregation group
of plans but not part of a permissive aggregation group
and the top-heavy ratio for the group of plans exceeds
60 percent.
(c) This Plan is a part of a required aggregation
group and part of a permissive aggregation group of
plans and the top-heavy ratio for the permissive
aggregation group exceeds 60 percent.
(C) "Top-heavy ratio" means:
(a) If a Company maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and
the Company has not maintained any defined benefit plan
which during the 5-year period ending on the determination
date(s) has or has had accrued benefits, the top-heavy ratio
for this Plan alone or for the required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees as of the determination date(s) (including any
part of any account balance distributed in the 5-year period
ending on the determination date(s)) and the denominator of
which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period
ending on the determination date(s)), both computed in
accordance with section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the top-
heavy ratio are adjusted to reflect any contribution not
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actually made as of the determination date, but which is
required to be taken into account on that date under section
416 of the Code and the regulations thereunder.
(b) If a Company maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and
the Company maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with (a) above, and the
present value of accrued benefits under the aggregated
defined benefit plan or plans for all Key Employees as of
the determination date(s), and the denominator of which is
the sum of the account balances under the aggregated defined
contribution plan or plans for all participants, determined
in accordance with (a) above, and the present value of
accrued benefits under the defined benefit plan or plans for
all participants as of the determination date(s), all
determined in accordance with section 416 of the Code and
the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator
of the top-heavy ratio are adjusted for any distribution of
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an accrued benefit made in the five-year period ending on
the determination date.
(c) For purposes of (a) and (b) above the value of account
balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the
determination date, except as provided in section 416 of the
Code and the regulations thereunder for the first and second
Plan Years of a defined benefit plan. The account balances
and accrued benefits of a participant (1) who is not a key
employee but who was a key employee in a prior year, or (2)
who has not received any Compensation from any Company
maintaining the Plan at any time during the 5-year period
ending on the determination date will be disregarded. The
calculation of the top-heavy ratio, and the extent to which
distributions, rollovers, and transfers are taken into
account will be made in accordance with section 416 of the
Code and the regulations thereunder. Deductible employee
contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans the
value of account balances and accrued benefits will be
calculated with reference to the determination dates that
fall within the same calendar year.
(D) "Permissive aggregation group" means the required
aggregation group of plans plus any other plan or plans of the Company
which, when considered as a group with the required aggregation group,
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would continue to satisfy the requirements of sections 401(a)(4) and
410 of the Code.
(E) "Required aggregation group" means (1) each qualified plan
of the Company in which at least one key employee participates, and
(2) any other qualified plan of a Company which enables a plan
described in (1) to meet the requirements of sections 401(a)(4) or 410
of the Code.
(F) "Determination Date" means for any Plan Year the last day of
the preceding Plan Year.
(G) "Present Value" shall be based upon the interest rate and
mortality table used to determine actuarial equivalence under the
provisions of the applicable defined benefit plan or plans.
(H) "Valuation Date" means the Valuation Date on the last day of
the Plan Year as of which account balances or accrued benefits are
valued for purposes of calculating the top-heavy ratio.
21.3 MINIMUM ALLOCATION.
(A) In General. Except as otherwise provided in (C) and (D)
below, the Company contributions (other than Tax Reduction
Contributions) and forfeitures allocated on behalf of any Participant
who is not a key employee shall not be less than the lesser of three
percent of such Participant's Compensation or in the case where a
Company has no defined benefit plan which designates this Plan to
satisfy section 401 of the Code, the largest percentage of Company
contributions and forfeitures, as a percentage of the first $150,000
(as adjusted pursuant to Section 401(a)(17) of the Code) of the key
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employee's Compensation, allocated on behalf of any key employee for
that year. The minimum allocation is determined without regard to any
Social Security contribution. This minimum allocation shall be made
even though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or would have received
a lesser allocation of the year because of (i) the Participant's
failure to complete 1,000 Hours of Service (or any equivalent provided
in the Plan), or (ii) the Participant's failure to make mandatory
Employee contributions to the Plan, or (iii) Compensation less than a
stated amount.
(B) Compensation. For purposes of this Article 21, Compensation
will mean earnings for the taxable year ending with or within the Plan
Year which are subject to tax under section 3101(a) of the Code
without regard to the dollar limitation of section 3121(a). In no
event shall the Compensation of a Participant taken into account for
purposes of this Article 21 for any Plan Year commencing after
December 31, 1988 and prior to January 1, 1994 exceed $200,000 (or
such greater amount provided pursuant to Section 401(a)(17) of the
Code. For Plan Years commencing on and after January 1, 1994, the
provisions set forth in the last paragraph of the definition of
Compensation in Article 1.1 shall apply with respect to Compensation
for purposes of this Article 21.
(C) Employees Covered. The provisions in (A) above shall not
apply to any participant who was not employed by any Company on the
last day of the Plan Year.
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(D) More than one Plan. To the extent a Participant is covered
under any other plan or plans of any Company the minimum allocation or
benefit requirement applicable to top-heavy plans will be met in this
Plan. If a Participant is covered by no other plan maintained by any
Company, the minimum allocation will be met in this Plan. Whenever a
non-key employee participates in both a defined benefit plan and a
defined contribution plan maintained by the Company which are top-
heavy, the contributions and forfeitures of this Plan in which he
participates shall equal 5% of Compensation for each year the Plan is
top-heavy and no other top-heavy contributions will be made to any
other plan on his account.
21.4 NONFORFEITABILITY OF MINIMUM ALLOCATION.
The minimum allocation required (to the extent required) to be
nonforfeitable under section 416(b) may not be forfeited under section
411(a)(3)(B) or 411(a)(3)(D) of the Code.
21.5 MINIMUM VESTING SCHEDULES.
For any Plan Year in which this Plan is top-heavy, the
nonforfeitable interest of each Employee (who has completed an Hour of
Service during any Plan Year in which the Plan is top-heavy) in his
account balance attributable to Company contributions shall be 100%
vested after three Years of Service.
If the vesting schedule under the Plan shifts in or out of the
above schedule for any Plan Year because of the Plan's top-heavy
status, such shift is an amendment to the vesting schedule and any
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participant with three or more Years of Service will be given an
option to remain under the prior (i.e. topheavy) vesting schedule.
21.6 COLLECTIVE BARGAINING RULES.
The provisions of this Article do not apply with respect to any
employee included in a unit of employees covered by a collective
bargaining agreement unless the application of this Article has been
agreed upon with the collective bargaining agent.
21.7 TEMPORARY EFFECT.
This Article 21 is designed to meet the requirements of Section
416 of the Code and regulations issued pursuant thereto. If there is
any discrepancy between the provisions of this Article 21 and Section
416 of the Code, such discrepancy shall be resolved in such a way to
give full effect to the provisions of Section 416 and ERISA. However,
no benefit in excess of that required by law and regulation is
intended to be conferred by the Company. This Article 21 shall
automatically become inoperative and of no effect whenever not
required by the Code or its regulations.
ARTICLE 22
INTERNAL REVENUE SERVICE APPROVAL
---------------------------------
Adoption of the Plan as amended and restated effective January 1,
1994 is subject to the condition that an initial determination letter
is received from the Internal Revenue Service, holding that the Plan
is qualified under Section 401(a) of the Code and that the related
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Trust is exempt from tax under Section 501(a) of the Code. Until such
a determination letter is received, all rights under the Plan are
conditional. If a contribution under the Plan is conditioned on
qualification of the Plan under Section 401(a) of the Code, and the
Plan receives an adverse determination with respect to its
qualification, the Trustee shall, upon written request of a Company,
return to a Company the amount of such contribution (increased by
earnings attributable thereto and reduced by losses attributable
thereto) within one calendar year after the date that qualification of
the Plan is denied, provided that the application for the
determination is made by the time prescribed by law for filing such
Company's return for the taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may prescribe.
IN WITNESS WHEREOF, this Amendment and Restatement of the Plan
has been executed this 28th day of December, 1994, effective as of
April 1, 1989.
SCOTSMAN GROUP INC.
By: /s/ Richard M. Holden
----------------------------
Richard M. Holden
EXHIBIT 4.2
SCOTSMAN GROUP INC. PLANS
TRUST AGREEMENT
This Trust Agreement is made as of this 29th day of December,
1994, by and among each of the corporations listed in Schedule 1
attached hereto and signatories to this Agreement (the "Companies"),
and PUTNAM FIDUCIARY TRUST COMPANY, a Massachusetts trust company
having its principal office in Boston, Massachusetts (the "Trustee").
WITNESSETH:
1. ESTABLISHMENT OF PLANS. The employee pension benefit plans
listed in Schedule 1 hereto (collectively the "Plans" and
each individually a "Plan") have been adopted by the
Companies and are intended to satisfy those provisions of
the Internal Revenue Code of 1986, as the same may be
amended from time to time (the "Code"), relating to
qualified employer plans. References throughout this
document to "the Plan" shall be considered to refer to each
Plan as though the Trust were maintained with respect to it
alone. The Trustee shall maintain such records as shall be
necessary to reflect the interests of each of the Plans in
the assets of the Trust. The Companies are members of a
controlled group of corporations, within the meaning of
Section 414(b) of the Code. References throughout this
document to "the Company" shall be considered to refer to
each Company and the Plan or Plans that it maintains.
2. CREATION OF TRUST. There is hereby established a trust
which shall be known as the "Scotsman Group Inc. Plans
Trust." The provisions of this Agreement shall supersede
and take precedence over any provision of the Plan which
deals with the Trustee's responsibilities and/or which may
conflict in any way with the Plan. All money and such
property as shall be acceptable to the Trustee as shall from
time to time be paid or delivered to the Trustee in its
capacity as such, all investments made therewith and
proceeds thereof and all earnings and profits thereon, less
the payments which at the time of reference shall have been
made by the Trustee, as authorized herein, are referred to
herein as the "Trust." The Trustee hereby accepts the Trust
created hereunder and agrees to perform the provisions of
this Agreement on its part to be performed. Subject to the
conditions and limitations set forth herein, the Trustee
shall be responsible for the property received by it as
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Trustee, but shall not be responsible for the administration
of the Plan or for those assets of the Plan which have not
been delivered to and accepted by the Trustee. The Trustee
shall not have any authority or obligation to determine the
adequacy of or to enforce the collection from the Company of
any contribution to the Trust. Certain other agreements and
obligations between the Company and the Trustee or its
affiliates may be set forth from time to time in a service
agreement between such parties (the "Service Agreement").
The establishment of the Trust created by this Agreement
shall not be considered as giving any Plan member or any
other person any legal or equitable rights as against the
Company or the Trustee or the property, whether corpus or
income, of the Trust unless such right is specifically
provided for in this Agreement, the Plan, or by law, nor
shall it be considered as giving any Plan member or other
employee the right to continue in the service of the
Company.
3. PURPOSES. The Plan and the Trust have been established for
the exclusive benefit of the eligible employees and their
beneficiaries. So far as possible this Agreement shall be
interpreted in a manner consistent with the intention of the
Company that the Trust satisfy those provisions of the Code
relating to qualified employees' trusts exempt from taxation
under Section 501(a) of the Code. It is specifically
intended that the Company shall have sole responsibility for
maintaining the tax-qualified status of the Plan and Trust.
No property of the Trust or contributions made by the
Company pursuant to the terms of the Plan shall revert to
the Company or be used for any purpose other than providing
benefits to eligible employees or their beneficiaries and
defraying the expenses of the Plan and the Trust, except
that to the extent provided in the Plan:
(a) Upon request of the Company, contributions made to the
Plan before the issuance of favorable determination
letter by the Internal Revenue Service with respect to
the initial qualification of the Plan under Section
401(a) of the Code may be returned to the contributor,
with all attributable earnings, within one year after
the Internal Revenue Service refuses in writing to
issue such a letter.
(b) Any amount contributed under the Plan by the Company by
a mistake of fact as determined by the Company may be
returned to the Company, upon its request, within one
year after its payment to the Trust.
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(c) Any amount contributed under the Plan by the Company on
the condition of its deductibility under Section 404 of
the Code may be returned to the Company, upon its
request, within one year after the Internal Revenue
Service disallows the deduction in writing.
(d) Earnings attributable to contributions returnable under
paragraph (b) or (c) shall not be returned to the
Company, and any losses attributable to those
contributions shall reduce the amount returned.
4. MANAGEMENT OF TRUST. It shall be the duty of the Trustee:
(a) to hold and, subject to the provisions of this
Agreement, to invest and to reinvest the assets of the
Trust, and
(b) to make payments therefrom in accordance with the
written directions of the Plan Administrator (the
"Administrator") specified in the Plan or otherwise
appointed by the Board of Directors of the Company
pursuant to the Plan to administer the Plan. The
Administrator shall be the "plan administrator" of the
Plan as defined in Section 3(16)(A) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), and a
"named fiduciary" within the meaning of Section 402(a)
of ERISA. The Administrator may direct payments to be
made from the Trust to any person, including any member
of the Administrator, or to the Company, or to any
paying agent designated by the Administrator, and in
such amounts as the Administrator may direct. Each
such direction of the Administrator shall be in writing
and shall be deemed to include a certification that any
payment directed thereby is one which the Administrator
is authorized to direct, and the Trustee may
conclusively rely on such certification without further
investigation. Payments by the Trustee may be made by
its check to the order of the payee and mailed the
payee at the address last furnished to the Trustee by
the Administrator or by the payee, if no such address
has been furnished, to the payee in care of the
Company. The Trustee shall make disbursements in the
amounts and in the manner that the Administrator
directs from time to time in writing. The Trustee
shall have no responsibility to ascertain any
direction's compliance with the terms of the Plan or of
any applicable law or the direction's effect for tax
purposes or otherwise; nor shall the Trustee have any
responsibility to see to the application of any
disbursement. The Trustee shall not be required to
make any disbursement in excess of the net realizable
- 120 -<PAGE>
value of the assets of the Trust at the time of the
disbursement. The Trustee shall not be required to
make any disbursement in cash unless the Administrator
has provided a written direction as to the assets to be
converted to cash for the purpose of making the
disbursement.
5. INVESTMENTS. Except as otherwise provided in Sections 6, 7
and 8 below, the Trustee shall invest and reinvest the
assets of the Trust and keep the same invested, without
distinction between principal and income, in stocks, bonds,
stock options, option contract of any type, contracts for
the immediate or future delivery of financial instruments
and other property, or other securities or certificates of
participation or shares of any mutual investment company,
trust or fund (including mutual funds which are sponsored,
underwritten or managed by affiliates of the Trustee), or
deposits in the Trustee which bear a reasonable rate in
interest, or annuity or investment contracts issued by an
insurance company, or other property of any kind, real or
personal, tangible or intangible, as it may deem advisable,
provided that the Trustee may hold assets of the Trust
uninvested from time to time if and to the extent that it
may deem such to be in the best interests of the Trust, but
in no event more than 10 days without the written approval
of the Company. Notwithstanding the foregoing, unless an
investment manager is appointed in accordance with Section
8, of the Service Agreement between the Company and the
Trustee or its affiliate otherwise specifically provides,
all of the assets of the Trust shall be invested as the
Administrator directs in investment products sponsored,
underwritten or managed by affiliates of the Trustee, loans
to Plan members of securities issued by the Company
satisfying the conditions of Section 6.
6. INVESTMENT FUNDS. The Administrator from time to time may
direct the Trustee to establish one or more separate
investment accounts within the Trust, each such separate
account being hereinafter referred to as an "Investment
Fund." The Trustee shall transfer to each such Investment
Fund such portion of the assets of the Trust as the
administrator or Plan members direct in accordance with the
specific provisions of the Plan and in the manner provided
in the service agreement between the Company and the Trustee
or its affiliate. The Trustee shall invest and reinvest the
assets which have been allocated to an Investment Fund in
accordance with the investment guidelines, objectives and
restrictions which have been established by the
Administrator for that Investment Fund and, in the case of
an Investment Fund for which an Investment Manager has been
appointed, the specific investment directions of such
- 121 -<PAGE>
Investment Manager. If, and to the extent, specifically
authorized by the Plan, and provided in the service
agreement between the Company and the Trustee or its
affiliate, the Administrator may direct the Trustee to
establish an Investment Fund all of the assets of which
shall be invested in shares of stock of the Company (a
"Company Stock Fund"), subject to the terms and conditions
of Section 7.
The Trustee shall be under no duty to question or review the
investment guidelines, objectives and restrictions
established, or the specific investment directions given, by
the Administrator or the Plan members for any Investment
Fund or to make suggestions to the Administrator in
connection therewith. The Trustee shall not be liable for
any loss, or by reason of any breach, which arises from the
Administrator's or Plan members' exercise or non-exercise of
rights under this Section 6, or from any direction of the
Administrator or Plan members unless it is clear on the face
of the direction that the actions to be taken under the
direction are prohibited by the fiduciary duty rules of
Section 404(a) of ERISA. The Trustee shall incur no
liability on account of investing the assets of the Trust in
accordance with investment elections of the Administrator or
Plan members so delivered to the Trustee.
Except as otherwise provided in Section 7, all interests,
dividends and other income received with respect to, and any
proceeds received from the sale or other disposition of,
securities or other property held in an Investment Fund
shall be credited to and reinvested in such Investment Fund,
and all expenses of the Trust which are properly allocable
to a particular Investment Fund shall be so allocated and
charged. The Administrator may at any time direct the
Trustee to eliminate any Investment Fund or Funds, and the
Trustee shall thereupon dispose of the assets of such
Investment Fund and reinvest the proceeds thereof in
accordance with the directions of the Administrator.
Pending investment in the Investment Funds in accordance
with the directions of the Administrator or the Plan
members, the Trustee shall invest assets of the Trust as
provided in the service agreement between the Company and
the Trustee or its affiliate, or if there is no such
provision, the Trustee may invest assets of the Trust, in
whole or in part, at any time or from time to time, in
interest-bearing accounts or certificates of deposit
(including deposits in the Trustee which bear a reasonable
interest rate), Treasury Bills, commercial paper, money
market funds (including any such fund sponsored,
underwritten or managed by one of its affiliates), short-
- 122 -<PAGE>
term investment funds or other short-term obligations in it
discretion, and the investment return thereon shall be
allocated among the Plan members whose assets have been so
invested and added to their respective investments in the
Investment Funds.
7. TRUST INVESTMENTS IN COMPANY STOCK. Trust investments
pursuant to this Section 7 shall be made only in securities
constituting "qualifying employer securities" within the
meaning of Section 407(d)(5) of ERISA. Trust investments in
such securities of the Company ("Company Stock") shall be
subject to the following terms and conditions:
(a) Acquisition Limit. Pursuant to the Plan, the Trust may
be invested in Company Stock to the extent necessary to
comply with investment directions under Section 6 of
this Agreement.
(b) Fiduciary Duties of Named Fiduciaries. The
Administrator as named fiduciary shall continually
monitor the suitability of acquiring and holding
Company Stock under the fiduciary duty rules of Section
404(a)(1) of ERISA (as modified by Section 404(a)(2) of
ERISA). The Trustee shall not be liable for any loss,
or by reason of any breach, which arises from the
direction of the Administrator with respect to the
acquisition and holding of Company Stock, unless it is
clear on the face of the direction that the actions to
be taken under the direction would be prohibited under
ERISA. The Company hereby appoints as named
fiduciaries, solely with respect to the voting of
Company Stock held in the Trust that has been credited
to their accounts, and the tender or retention of such
Company Stock in response to a tender offer, the Plan
members to whose accounts such Company Stock has been
credited at the time in question. The Company shall be
responsible for determining whether, under the
circumstances prevailing at a given time, its fiduciary
duty to Plan members and beneficiaries under the Plan
and ERISA requires that the Company follow the advice
of independent counsel as to the voting and tender or
retention of Company Stock.
(c) Execution of Purchases and Sales. To implement the
investment of new contributions, the Trustee shall
purchase Company Stock on the open market as soon as
practicable following the date on which the Trustee
receives from the Company in good order all information
and documentation necessary to effect the purchase.
Such purchase or sale shall be for no more than
adequate consideration (within the meaning of Section
- 123 -<PAGE>
3(18) of ERISA) and the Company shall pay any related
commission. Redemptions and exchanges of Company Stock
may be netted against purchases made in accordance with
the preceding sentence, and to the extent necessary
after such netting, the Trustee shall, as soon as
practicable following the date of such purchases,
purchase or sell Company Stock on the open market to
accomplish such redemptions and exchanges.
The Trustee may purchase or sell Company Stock from or
to the Company if the purchase or sale is for no more
than adequate consideration (within the meaning of
Section 3(18) of ERISA), no commission is charged, and
such purchase or sale is permitted by the Plan,
authorized by the Board of Directors of the issuer of
the Company Stock and provided for in the applicable
registration statement covering the offer and sale of
Company Stock pursuant to the Plan. To the extent that
Company contributions under the plan are to be invested
in Company Stock, the Company may transfer Company
Stock to the Trust in lieu of cash, subject to the same
conditions set forth in the preceding sentence. The
number of shares so transferred shall be determined by
dividing the amount of the contribution by the closing
price of Company Stock on any national securities
exchange on the trading day immediately preceding the
date as of which the contribution is made.
The Trustee and the Company may, in an appendix to this
Section 7, agree upon such prescribed dates for
purchases and sale of Company Stock and such rules and
conventions in connection with such purchases and sales
as they may find mutually acceptable.
(d) Securities Law Reports. The Administrator shall be
responsible for filing all reports required under
federal or state securities laws with respect to the
Trust's ownership of Company Stock, including, without
limitation, any reports required under Section 13 or 16
of the Securities Exchange Act of 1934, and shall
immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Company Stock
pending the filing of any report. The Trustee shall
provide to the Administrator such information on the
Trust's ownership of Company Stock as the Administrator
may reasonably request in order to comply with federal
or state securities laws.
(e) Voting. Notwithstanding any other provision of this
Agreement, the provisions of this Section 7(e) shall
govern the voting of Company Stock. When the issuer of
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Company Stock files preliminary proxy solicitation
materials with the Securities and Exchange Commission,
the Company shall cause a copy of all the materials to
be simultaneously sent to the Trustee, and the Trustee
shall prepare a voting instruction form based upon
these materials. At the time of mailing of notice of
each annual or special stockholders' meeting of the
issuer of Company Stock, the Company shall cause a copy
of the notice and all proxy solicitation materials to
be sent to each Plan member, together with the
foregoing voting instruction form to be returned to the
Trustee or its designee. The form shall show the
number of full and fractional shares of Company Stock
credited to the Plan member's accounts, whether or not
vested. For purposes of this Section 7(e), the number
of shares of Company Stock deemed credited to a Plan
member's account shall be determined as of the date of
record determined by the Company for which an
allocation has been completed and Company Stock has
actually been credited to Plan members' accounts. The
Company shall provide the Trustee with a copy of any
materials provided to Plan members and shall certify to
the Trustee that the materials have been mailed or
otherwise sent to Plan members.
Each Plan member shall have the right to direct the
Trustee as to the manner in which to vote that number
of shares of Company Stock credited to his accounts.
Such directions shall be communicated by completion of
the voting instruction form (or other directions in
writing or by facsimile or similar means). Upon its
receipt of directions, the Trustee shall vote the
shares of Company Stock credited to the Plan member's
account as directed by the Plan member.
The Trustee shall vote those shares of Company Stock
not credited to Plan member's accounts, if any, and
those shares of Company Stock credited to the accounts
of Plan members for which no voting directions are
received, in the same proportion on each issue as it
votes those shares credited to Plan members' accounts
for which it received voting direction from Plan
members.
(f) Tender Offers. Upon commencement of a tender offer for
any Company Stock, the Company shall notify each Plan
member and use its best efforts to timely distribute or
cause to be distributed to Plan members the same
information that is distributed to shareholders of the
issuer of Company Stock in connection with the tender
offer, and after consulting with the Trustee shall
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provide at the Company's expense a means by which Plan
members may direct the Trustee whether or not to tender
the Company Stock credited to their accounts (whether
or not vested). The Company shall provide to the
Trustee a copy of any material provided to Plan members
and shall certify to the Trustee that the materials
have been mailed or otherwise sent to Plan members.
Each Plan member shall have the right to direct the
Trustee to tender or not to tender some or all of the
whole shares of Company Stock credited to his accounts.
Fractional shares shall be disregarded. Directions
from a Plan member to the Trustee concerning the tender
of Company Stock shall be communicated in writing or by
facsimile or such similar means as is agreed upon by
the Trustee and the Company. The Trustee shall tender
or not tender shares of Company Stock as directed by
the Plan member. The Trustee shall not tender shares
of Company Stock credited to a Plan member's accounts
for which it has received no directions from the Plan
member.
The Trustee shall tender that number of shares of
Company Stock not credited to Plan members' accounts
determined by multiplying the total number of such
shares by a fraction, of which the numerator is the
number of shares of Company Stock credited to Plan
members' accounts for which the Trustee has received
directions from Plan members to tender (which direction
have not been withdrawn as of the date of this
determination), and of which the denominator is the
total number of shares of Company Stock credited to
Plan members' accounts.
A Plan member who has directed the Trustee to tender
some or all of the shares of Company Stock credited to
his accounts may, at any time before the tender offer
withdrawal date, direct the Trustee to withdraw some or
all of the tendered shares, and the Trustee shall
withdraw the directed number of shares from the tender
offer before the tender offer withdrawal deadline. A
Plan member shall not be limited as to the number of
directions to tender or withdraw that he may give to
the Trustee.
A direction by a Plan member to the Trustee to tender
shares of Company Stock credited to his accounts shall
not be considered a written election under the Plan by
the Plan member to withdraw or to have distributed to
him any or all of such shares. The Trustee shall
credit to each account of the Plan member from which
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the tendered shares were taken the proceeds received by
the Trustee in exchange for the shares of Company Stock
tendered from that account. Pending receipt of
directions through the Administrator from the Plan
member as to the investment of the proceeds of the
tendered shares, the Trustee shall invest the proceeds
in the Investment Funds, other than the Common Stock
Fund, in the same proportions as are set forth in the
Plan member's election then in effect under the Plan,
or, if such election directs the investment of all the
Plan member's account in the Company Stock Fund,
pursuant to a new investment election made by the Plan
member under the Plan.
(g) General. With respect to all rights other than the
right to vote, the right to tender, and the right to
withdraw shares previously tendered, the Trustee shall
follow the directions of the Plan member as to Common
Stock credited to his accounts, and if no such
directions are received, the directions of the
Administrator. The Trustee shall have no duty to
solicit directions from Plan members. With respect to
all rights other than the right to vote and the right
to tender, in the case of Company Stock not credited to
Plan members' accounts, the Trustee shall follow the
directions of the Administrator. All provisions of
this Section 7 shall apply to any securities received
as a result of a conversion of Company Stock.
(h) Certain Rights of Beneficiaries of Plan Members. In
the event of the death of a Plan member, his
beneficiary shall have all the rights of the Plan
member set forth in this Section 7.
(i) Confidentiality of Instructions Received from Plan
Members. Instructions received from Plan members
pursuant to Section 7(e) and (f) shall be held in
strictest confidence by the Trustee and shall not,
except as otherwise required by law, be divulged or
released by the Trustee to any other person including
officers, directors or employees of the Company or of
the issuer of the Company Stock.
8. APPOINTMENT OF INVESTMENT MANAGERS. The Administrator from
time to time may appoint one or more Investment Managers (as
that term is defined in Section 3(38) of ERISA) to manage
(including the power to acquire and dispose of) all or any
portion or portions of the Trust. The Administrator may
enter into such agreements setting forth the terms and
conditions of any such appointment as it determines to be
appropriate. The Administrator shall retain the right to
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remove and discharge any Investment Manager. The
compensation of such Investment Managers shall be an expense
payable in accordance with Section 14. The Administrator
shall notify the Trustee of the appointment of any
Investment Manager by delivering to the Trustee an executed
copy of the agreement under which such Investment Manager
was appointed together with a written acknowledgment by such
Investment Manager that it is:
(a) a fiduciary with respect to the Plan,
(b) bonded as required by ERISA, and
(c) either
(i) registered as an investment advisor under the
Investment Advisers Act of 1940, or
(ii) a bank as defined in said Act, or
(iii) an insurance company qualified to perform
investment management services under the laws of
more than one state of the United States.
The Trustee shall be entitled to rely upon such notice until
such time as the Administrator shall notify and direct the
Trustee in writing that another Investment Manager has been
appointed in the place and stead of the first-named
Investment Manager, or in the alternative, that the
Investment Manager has been removed. In each case where an
Investment Manager is appointed, the Administrator shall
determine the assets of the Trust to be allocated to the
Investment Manager from time to time and shall issue
appropriate instructions to the Trustee with respect
thereto. The Trustee shall carry out the written
instructions of any Investment Manager with respect to the
management and investment of the assets then under control
of such Investment Manger and shall not incur any liability
on account of its compliance with such instructions.
Purchase and sale orders may be placed without the
intervention of the Trustee and, in such event, the
Trustee's sole obligation shall be to make payment for
purchased securities and deliver those that have been sold
when advised of the transaction. The Trustee shall not
incur any liability on account of its failure to exercise
any of the powers delegated to any Investment Manager
because of the failure of such Investment Manager to give
instructions for the management of the assets under the
control of such Investment Manager. The Trustee shall be
under no duty to question any Investment Manager, nor to
review any securities or other property acquired or retained
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at the direction of any Investment Manager, nor to make any
suggestions to any Investment Manager in connection
therewith. The Trustee shall have no obligation to vote
upon any securities over which the Investment manager has
investment management control unless the Trustee is
instructed in writing by the Investment Manager as to the
voting of such securities within a reasonable time before
the time for voting thereof expires.
Each Investment Manager shall have the authority to exercise
all of the powers of the Trustee hereunder with respect to
assets under its control but only to the extent that such
powers relate to the investment of such assets.
9. INSURANCE CONTRACT. If provided in the Service Agreement,
the Administrator may direct the Trustee to receive and hold
or apply assets of the Trust to the purchase of individual
or group insurance or annuity contracts ("policies" or
"contracts") issued by any insurance company and in a form
approved by the Administrator (including contracts under
which the contract holder is granted options to purchase
insurance or annuity benefits), or financial agreements
which are backed by group insurance or annuity contracts
("financial agreements"). If such investments are to be
made, the Administrator shall direct the Trustee to execute
and deliver such applications and other documents as are
necessary to establish record ownership, to value such
policies, contracts or financial agreements under the method
of valuation selected by the Administrator, and to record or
report such values to the Administrator or any investment
manager selected by the Administrator, in the form and
manner agreed to by the Administrator.
The Administrator may direct the Trustee to exercise or may
exercise directly the powers of contract holder under any
policy, contract or financial agreement, and the Trustee
shall exercise such powers only upon direction of the
Administrator. The Trustee shall have no authority to act
in its own discretion, with respect to the terms,
acquisition, valuation, continued holding and/or disposition
of any such policy, contract or financial agreement or any
asset held thereunder. The Trustee shall be under no duty
to question any direction of the Administrator or to review
the form of any such policy, contract or financial agreement
or the selection of the issuer thereof, or to make
recommendations to the Administrator or to any issuer with
respect to the form of any such policy, contract or
financial agreement.
The Trustee shall be fully protected in acting in accordance
with written directions of the Administrator, and shall be
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under no liability for any loss of any kind which may result
by reason of any action taken or omitted by it in accordance
with any direction of the Administrator, or by reason of
inaction in the absence of written directions from the
Administrator. In the event that the Administrator directs
that any monies or property be paid or delivered to the
contract holder other than for the benefit of specific
individual beneficiaries, the Trustee agrees to accept such
monies or property as assets of the Trust subject to all the
terms hereof.
10. POWERS OF TRUSTEE. Subject to the foregoing provisions and
limitations, the Trustee is authorized and empowered:
(a) to sell at public auction or by private contract,
redeem, convey, transfer, exchange, pledge, or
otherwise realize upon, any securities, investments or
other property forming a part of the Trust, and for
such purposes may execute such instruments and writings
and do such things as it shall deem proper;
(b) to keep any or all securities or other property in the
name of some other person, nominee, firm or corporation
or in its own name without disclosing its fiduciary
capacity, but the books and records of the Trustee
shall at all times show that all such securities and
other property are part of the Trust;
(c) except as otherwise provided in Sections 7 and 8, to
the extent that the Trustee receives direction from the
Administrator or the Plan members, as the case may be,
to vote upon any stock, bonds or other securities of
any corporation, association or trust at any time
comprising the Trust, or otherwise consent to or
request any action on the part of such corporation,
association or trust, and to give general or special
proxies or powers of attorney, with or without power of
substitution, and to exercise any conversion
privileges, subscription rights or other options, to
participate in reorganizations, recapitalizations,
consolidations, mergers and similar transactions with
respect to such securities; to deposit such stocks or
other securities in any voting trust, or with any
protective or like committee, or with a trustee, or
with depositories designated thereby; and generally to
exercise any of the powers of an owner with respect to
stock or other securities or property comprising the
Trust which the Trustee deems to be for the best
interests of the Trust. The Trustee will not vote such
stock or other securities as to which it receives no
written directions;
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(d) when instructed or directed by the Administrator, to
borrow money for the purposes of this Trust in such
amounts and upon such terms and conditions as the
Administrator, in its discretion, may approve, and for
any amount so borrowed to issue the promissory note of
the Trustee and to secure the repayment thereof by
pledge, mortgage, or hypothecation of all or any part
of the property of the Trust, and no person loaning
money to the Trustee shall be bound to see to the
application of the money loaned or to inquire into the
validity of any such borrowing;
(e) to make, execute, acknowledge and deliver any and all
instruments that it shall deem necessary or appropriate
to carry out the powers herein granted;
(f) to manage, administer, operate, lease for any number of
years, develop, improve, repair, alter, demolish,
mortgage, pledge, grant options with respect to, or
otherwise deal with any real property or interest
therein at any time held by it, and to cause to be
formed a corporation or trust to hold title to any such
real property with the aforesaid powers, all upon such
terms and conditions as may be deemed advisable;
(g) to renew or extend or participate in the renewal or
extension of any mortgage, upon such terms as may be
deemed advisable, and to agree to a reduction in the
rate of interest on any mortgage or to any other
modification or change in the terms of any mortgage or
of any guarantee pertaining thereto, in any manner and
to any extent that may be deemed advisable for the
protection of the Trust or the preservation of the
value of the investment, to waive any default whether
in the performance of any covenant or condition of any
mortgage or in the performance of any guarantee, or to
enforce any such default in such manner and to such
extent as may be deemed advisable, to exercise and
enforce any and all rights of foreclosure, to bid in
property on foreclosure, to take a deed in lieu of
foreclosure with or without paying a consideration
therefor and in connection therewith to release the
obligation on the bond secured by such mortgage; and to
exercise and enforce in any action, suit or proceedings
at law or in equity any rights or remedies in respect
to any such mortgage or guarantee;
(h) upon express direction by the Administrator, to
transfer assets of the Trust to itself as trustee or to
any other trustee of any trust which has been qualified
under Section 401(a) and is exempt from tax under
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Section 501(a) of the Code, and which is maintained by
it or such other trustee as a medium for the collective
investment of funds of pension, profit-sharing or other
employee benefit trusts, in which event such trust
shall be deemed to be a part of the Plan, and to
withdraw any assets of the Trust so transferred;
(i) when instructed or directed by the Administrator, to
settle, compromise or submit to arbitration any claims,
debts, or damages, due or owing to or from the Trust,
to commence or defend suits or legal proceedings and to
represent the Trust in all suits or legal proceedings
in any court of law or before any other body or
tribunal; provided, however, that the Trustee shall
have no obligation to take any legal action for the
benefit of the Trust unless it shall have been first
indemnified for all expenses in connection therewith,
including counsel fees;
(j) to lend to Plan members such amount or amounts, and
upon such terms and conditions, as the Administrator
may direct in accordance with the provisions of the
Plan, if applicable;
(k) to employ such agents, consultants, custodians,
depositories, advisors, and legal counsel as may be
reasonably necessary or desirable in the Trustee's
judgment in managing and protecting the Trust and,
subject to the provisions of Section 14, to pay them
reasonable compensation out of the Trust; however, if
the amount exceeds $10,000, the Trustee shall obtain
advance written consent of the Company;
(l) to cause any securities or other property which may at
any time form a part of the Trust to be issued, held or
registered in the individual name of the Trustee, or in
the name of its nominee (including any custodian
employed by the Trustee, any nominee of such a
custodian,and any depository, clearing corporation or
other similar system), or in such form that title will
pass by delivery;
(m) to enter into stand-by agreements for future investment
either with or without a stand-by fee;
(n) to transfer any assets of the Trust to a custodian or
sub-custodian employed by the Trustee;
(o) when directed by the Administrator, to participate in a
securities lending program sponsored and administered
by the Trustee and, in connection therewith, the
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Trustee is authorized to release and deliver securities
and return collateral received for loaned securities in
accordance with the provisions of such program; and
(p) to do all other acts in its judgment necessary or
desirable for the proper administration of the Trust,
in accordance with the provisions of the Plan and this
Agreement, although the power to do such acts is not
specifically set forth herein.
No person dealing with the Trustee shall be required to take
any notice of this Agreement, but all persons so dealing
shall be protected in treating the Trustee as the absolute
owner with full power of disposition of all the monies,
securities and other property of the Trust, and all persons
dealing with the Trustee are released from inquiry into the
decision or authority of the Trustee and from seeing to the
application of monies, securities or other property paid or
delivered to the Trustee.
11. LIQUIDATION OF ASSETS. Upon termination with respect to a
Plan, the Trustee shall distribute the assets held by the
Plan in the manner directed by the Company, in kind to the
extent of identified assets and the balance in cash or in
kind or partly in each as the Trustee and the Company shall
agree, except that unless the Company provides the Trustee
with a suitable indemnification satisfactory to the Trustee
based upon a reasonable analysis by the Trustee of the
Company's financial condition, the Trustee shall be entitled
to prior receipt of such rulings and determinations from
such administrative agencies as it may deem necessary or
advisable to assure itself that the distribution directed is
in accordance with law and will not subject the Trust Fund
or the Trustee to liability. The Trustee shall not be
required to make any payments in excess of the net
realizable value of the assets of the Trust at the time of
such payment. The Trustee shall not be required to make any
payments in cash unless there shall be in the Trust at the
time an amount of cash sufficient for the purpose. In case
of a deficiency in cash, the Trustee shall take such action
as to the disposition of securities or other property
forming a part of the Trust as will provide the amount of
cash for such payments. The Trustee shall not be required
to make any payment in cash until the Administrator has
provided direction as to the assets to be converted to cash
for the purpose of making such payment.
12. DIRECTION BY COMPANY OR ADMINISTRATOR. The Company shall
certify to the Trustee the names and specimen signatures of
the Administrator. The Company shall give prompt notice to
the Trustee of changes in the Administrator, and until such
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notice is received by the Trustee, the Trustee shall be
fully protected in assuming that the Administrator is
unchanged and in acting accordingly. The Administrator may
certify to the Trustee the names of persons authorized to
act for it in relation to the Trustee and may designate a
person, corporation or other entity, whether or not
affiliated with the Company, to so act. Whenever the
Trustee is required or authorized to take any action
hereunder pursuant to any written direction or determination
of the Company or the Administrator, such direction or
determination shall be sufficient protection to the Trustee
if contained in a writing signed by any one or more of the
persons authorized to execute documents on behalf of the
Company or the Administrator, as the case may be, pursuant
to the Plan. The Trustee shall act, and shall be fully
protected in acting, in accordance with such orders,
requests and instructions of the Company or the
Administrator. By such a writing the Company or the
Administrator, as the case may be, may ratify, approve or
confirm any action taken by the Trustee, and upon such
ratification, approval or confirmation the Trustee shall be
protected as though authorization or determination by the
Company or the Administrator had preceded such action. In
the absence of direction by the Company or the Administrator
as to any matter provided in this Agreement or the Plan, the
Trustee may in its discretion take such action as it deems
fit and proper with respect thereto after reasonable
attempts to secure Company or Administrator direction,
provided, however, that the Trustee shall not be obligated
to take any such action. The Trustee may deliver documents
to the Company or the Administrator by delivering the same,
or by mailing the same, postage prepaid, addressed to the
Company or the Administrator, as the case may be, at its
principal place of business.
13. RECORDS AND ACCOUNTING. The Trustee shall keep adequate and
accurate accounts of investments, receipts, disbursements
and other transactions hereunder, and all accounts, books
and records relating thereto shall be open at all reasonable
times to inspection and audit by the Administrator and its
authorized representatives. The Trustee shall render to the
Company and the Administrator in writing, at least once each
twelve (12) months and at such times as required by the Plan
and, in any event,within ninety (90) days after its removal
or resignation as provided in Section 15 hereof, accounts of
its transactions under this Agreement, and the Administrator
may approve such accounts of the Trustee by an instrument in
writing delivered to the Trustee. In the absence of the
filing in writing with the Trustee by the Administrator of
exceptions or objections to any such account within one year
after the receipt thereof, the Administrator shall be deemed
- 134 -<PAGE>
to have approved such account; and in such case, or upon the
written approval of the Administrator of any such account,
the Trustee, to the extent permitted by applicable law,
shall be released, relieved and discharged with respect to
all matters and things set forth in such account. The
Trustee shall from time to time make such other reports and
furnish such other information concerning the Trust
(including valuations of each Investment Fund established
pursuant to Section 6) to the Administrator as the
Administrator may reasonably request or as may be required
by the Plan. The Administrator shall arrange for each
Investment Manager appointed pursuant to Section 8, and each
insurance company issuing contracts held by the Trustee
pursuant to Section 9, to furnish the Trustee with such
valuations and reports as are necessary to enable the
Trustee to fulfill its obligations under this Section 13,
and the Trustee shall be fully protected in relying upon
such valuations and reports. In any proceeding instituted
by the Trustee, the Company or the Administrator or all of
them with respect to any account of the Trustee, only the
Company, the Administrator and the Trustee shall be
necessary parties.
14. TRUSTEE'S COMPENSATION AND EXPENSES. The Trustee shall be
paid such reasonable compensation as provided in the service
agreement between the Company and the Trustee or its
affiliate. The compensation of the Trustee and any
reasonable expenses,, including reasonable attorneys' fees,
and the cost of any bond, surety or other security which may
be required of the Trustee by ERISA, incurred by the Trustee
in the performance of its duties, and all other proper
charges and disbursements of the Trustee may be paid by the
Company within thirty (30) days after so billed, and will
automatically be deducted from the Trust if, upon the
expiration of thirty (30) days, such fees are not separately
paid by the Company. The Trustee shall obtain advance
written consent of the Company if the attorneys' fees will
exceed $10,000. All expenses (including taxes pursuant to
Section 21) of the Trust, other than those expenses which
are paid by the Company, which are allocable to an
Investment Fund established pursuant to Section 6 shall be
charged to such Investment Fund. All such expenses which
are not so allocable shall be charged against each of the
Investment Funds in the same proportion as the value of the
assets held in such Investment Fund bears to the value of
the total assets held in all of the Investment Funds. Any
account maintenance or administration fees applicable to any
Plan member's account which are not paid hereunder by the
Company shall be charged against the interest of the Plan
member and, in the case of a loan of a Plan member, if
applicable, all expenses (including taxes pursuant to
- 135 -<PAGE>
Section 21) of the Trust, other than those expenses which
are paid by the Company, which are allocable to such loan,
shall be charged against the interest of such Plan member
under the Plan.
15. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may resign
at any time upon thirty (30) days' written notice to the
Company, and the Company may remove the Trustee at any time
upon thirty (30) days' written notice to the Trustee;
provided, however, that the parties may by written
instrument waive such notice. The Trustee reserves the
right at any time to resign immediately if the Company
transfers the Plan's administration to a recordkeeper other
than the recordkeeper designated in the service agreement
between the Company and the Trustee or its affiliate, a copy
of which is attached hereto, without the Trustee's prior
written consent, by delivering to the Company a notice of
resignation certified by the Trustee. The Trustee further
reserves the right at any time to resign immediately by
delivering to the Company a notice of resignation certified
by the Trustee if the assets of the Trust are not invested
in investment products which are sponsored, underwritten or
managed by affiliates of the Trustee, or in Company Stock
unless the service agreement between the Company and the
Trustee or its affiliates otherwise specifically provides.
If the Trustee shall resign, be removed or for any other
reason cease to be Trustee, the Company shall appoint a
successor Trustee or Trustees to whom the Trustee, upon
receipt of acceptance by such successor, shall promptly
deliver all of the assets of the Trust less any unpaid fees
or expenses. Subject to the foregoing provisions, any
resignation or removal of the Trustee or appointment of a
new Trustee shall be by instrument in writing and shall
become effective on the date therein specified. Any
successor Trustee shall have the same powers and duties as
the succeeded Trustee, subject to such changes as the
Company may then determine. Upon request of such successor
Trustee or Trustees, the Company and the Trustee ceasing to
act shall execute and deliver such instruments of conveyance
and further assurance and do such things as may reasonably
be required for more fully and certainly vesting and
confirming in such successor Trustee or Trustees all the
right, title and interest of the retiring Trustee in and to
the assets of the Trust. The Trustee is authorized,
however, to reserve such sums of money as may be reasonable
for payment of its compensation and expenses (including
legal fees) in connection with the settlement of its account
or otherwise, and any balance of such reserve remaining
after payment of such compensation and expenses shall be
promptly paid over to the successor Trustee or Trustees.
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16. DUTIES OF TRUSTEE. The Trustee shall discharge its duties
with respect to the Trust solely in the interests of the
Plan members and their beneficiaries and with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of like character and with like aims. The duties
of the Trustee shall be only those specifically undertaken
by the Trustee pursuant to this Trust Agreement. The
Trustee shall have no responsibility for the administration
of the Plan (including, but not limited to, the
determination of Plan participation rights of employees of
the Company, the determination of benefits of members of the
Plan and the maintenance of individual accounts of members
of the Plan). Except as otherwise provided by ERISA, in no
event shall the Trustee be responsible for any act or
omission of any other fiduciary of the Plan. The Trustee
shall have no liability for the acts or omissions of any
predecessors and successors in office.
17. INDEMNIFICATION. The Company hereby agrees to indemnify and
hold harmless the Trustee from and against any losses,
damages, liabilities, claims, costs or expenses (including
reasonable attorneys' fees) which the Trustee may incur by
reason of this Trust Agreement, (including, without
limitation, by reason of the Trustee's making benefit
payments pursuant to fraudulent or unauthorized
instructions) excepting only losses, damages, liabilities,
claims, costs or expenses arising from the Trustee's
negligence or willful misconduct. A waiver by the Trustee
of any signature guarantee requirement relating to the
investments held hereunder shall not be construed as
negligence or willful misconduct on the part of the Trustee.
The provisions of this Section 17 shall survive the
termination of this Trust Agreement.
18. AMENDMENT OR TERMINATION. The Company reserves the right at
any time and from time to time to amend, in whole or in
part, any or all of the provisions of, or to terminate, this
Agreement by delivering to the Trustee a copy of any
amendment or a notice of termination certified by an officer
of the Company; provided, that no such amendment which
affects the rights, duties or responsibilities of the
Trustee may be made without its consent, and provided
further that no such amendment shall authorize or permit any
part of the corpus or income of the Trust to be used for or
diverted to purposes other than those set forth in Section
3. Any such amendment shall be effective upon delivery to
the Trustee unless a different effective date is
specifically stated and any such amendment may be made
retroactively as shall be permitted under applicable law.
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Upon termination of this Agreement, the Trustee, upon
direction of the Administrator shall liquidate the Trust to
the extent required for distribution and, after the final
account of the Trustee has been approved and settled, shall
distribute the balance of the Trust remaining in its hands
as directed by the Administrator or in the absence of such
direction, as may be directed by a judgment or decree of a
court of competent jurisdiction. Following any such
termination the powers of the Trustee hereunder shall
continue as long as any of the assets of the Trust remain in
its hands, but only as to those assets which during such
time remain in the Trust.
19. ADDITIONAL PARTICIPATING COMPANIES. Any affiliate or
subsidiary of the Company may, with the consent of the
Company, become a participating employer by action of the
board of directors of such affiliate or subsidiary to adopt
the Trust as a trust for the benefit of its employees. Each
such additional participating employer shall be deemed the
"Company" hereunder and shall have and exercise all the
rights, powers, and duties thereof with respect to the Trust
as applied to itself and its employees and that part of the
Trust which represents the interest of members employed by
it; provided, however, that each such additional
participating employer hereby delegates all such rights,
powers, and duties, including amendment or termination of
the Trust, to Scotsman Industries, Inc. acting alone, except
as such additional participating employer may exercise the
same for itself with the approval of Scotsman Industries,
Inc.
20. SPENDTHRIFT PROVISION. Except as provided under the Plan
with respect to loans, and except as may otherwise be
required by law, benefits payable under the Plan shall not
be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge,
garnishment, execution, or levy of any kind, either
voluntary or involuntary, prior to actually being received
by the person entitled to the benefit under the terms of the
Plan, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise
dispose of any right to benefits payable under the Plan
shall be void. The account of any Participant, however,
shall be subject to and payable in accordance with the
applicable requirements of any qualified domestic relations
order, as that term is defined in Code Section 414(p), and
the Committee shall direct the Trustee to provide for
payment from a Participant's account in accordance with such
order and with the provisions of Code Section 414(p) and any
regulations promulgated thereunder. A payment from a
Participant's account may be made to an alternate payee (as
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defined in Code Section 414(p)(8) prior to the date the
Participant reaches his earliest retirement age (as defined
in Code Section 414(p)(4)(B)) if such payments are made
pursuant to a qualified domestic relations order. Payments
shall be made to the alternate payee from one or more of the
Investment Funds in which the Participant's account is
invested, in such manner and proportion as shall be set
forth in the qualified domestic relations order. If the
qualified domestic relations order does not designate the
Investment Funds from which payment is to be made to the
alternate payee, payment shall be made in equal amounts from
all such Investment Funds. All payments pursuant to a
qualified domestic relations order shall be subject to
reasonable rules and regulations promulgated by the
Committee respecting the time of payment pursuant to such
order and the valuation of the Participant's accounts from
which payment is made; provided that all such payments are
made in accordance with such order and Code Section 414(p).
The balance of an account that is subject to any qualified
domestic relations order shall be reduced by the amount of
any payment made pursuant to such order. With respect to
all payments under this Section pursuant to a qualified
domestic relations order, the Trustee shall act only as
directed by the Committee.
21. PAYMENT OF TAXES. The Trustee may pay out of the Trust (or
the appropriate Investment Fund or Funds) any and all taxes
of any and all kinds, including without limitation property
taxes and income taxes levied or assessed under existing or
future laws upon or in respect of the Trust or any monies,
securities or other property forming a part thereof or the
income therefrom subject to the terms of any agreements or
contracts made with respect to trust investments which make
other provision for such tax payments. The Trustee may
assume that any taxes assessed on or in respect of the Trust
or its income are lawfully assessed unless the Administrator
shall in writing advise the Trustee that in the opinion of
counsel for the Company such taxes are or may be unlawfully
assessed. In the event that the Administrator shall so
advise the Trustee, the Trustee will, if so requested in
writing by the Administrator contest the validity of such
taxes in any manner deemed appropriate by the Company or its
counsel but at the expense of the Trust; or the Company may
contest the validity of any such taxes at the expense of the
Trust and in the name of the Trustee; and the Trustee agrees
to execute all documents, instruments, claims, and petitions
necessary or advisable in the opinion of the Company or its
counsel for the refund, abatement, reduction or elimination
of any such taxes. At the direction of the Administrator
the Trustee shall collect all income tax to be withheld from
any benefit payments from the Trust and shall report and pay
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over such taxes to the Internal Revenue Service, except for
payments made directly by an insurer to a Plan member or
beneficiary under an annuity or insurance contract, if
applicable.
22. SUCCESSOR TO COMPANY OR TRUSTEE. Any successor to all or a
major part of the business of the Trustee, by whatever form
or manner resulting, shall ipso facto succeed to all the
rights, powers and duties hereunder of the Trustee. Any
successor to all or a major part of the business of the
Company, by whatever form or manner resulting, may continue
the Plan and Trust be executing appropriate amendments
thereto, and thereupon such successor shall ipso facto
succeed to all the rights, powers and duties hereunder of
the Company.
23. CONSTRUCTION. In any question of interpretation or other
matter of doubt, the Trustee, the Administrator and the
Company may rely upon the opinion of counsel for the Company
or any other attorney at law designated by the Company with
the approval of the Trustee. The provisions of this
Agreement shall be construed, administered and enforced
according to the laws of the United States and, to the
extent permitted by such laws, by the laws of the
Commonwealth of Massachusetts. All contributions to the
Trust shall be deemed to be made in the Commonwealth of
Massachusetts.
24. IMPOSSIBILITY OF PERFORMANCE. In case it becomes impossible
for the Company, the Administrator or the Trustee to perform
any act under this Trust Agreement, that act shall be
performed which in the judgment of the Administrator will
most nearly carry out the intent and purpose of the Plan and
Trust. All parties to this Agreement or in any way
interested in the Trust shall be bound by any acts performed
under such condition.
25. DEFINITION OF WORDS. Feminine or neuter pronouns shall be
substituted for those of the masculine form, and the plural
shall be substituted for the singular, in any place or
places herein where the context may require such
substitution or substitutions.
26. TITLES. The titles of sections are included only for
convenience and shall not be construed as part of this
Agreement or in any respect affecting or modifying its
provisions.
27. EXECUTION OF TRUST AGREEMENT. This Trust Agreement may be
executed in any number of counterparts and each fully
executed counterpart shall be deemed an original.
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IN WITNESS WHEREOF these presents have been signed and sealed for
and in behalf of the Company and the Trustee by their duly authorized
officers as of the 29th day of December, 1995.
SCOTSMAN GROUP INC.
/s/ Caroline A. Damask By:/s/ Richard M. Holden
- ------------------------------ --------------------------------
Witness Title: Vice President
Date: 12/29/1994
THE DELFIELD COMPANY
By:/s/ W. Joseph Manifold
- ------------------------------ --------------------------------
Witness Title: Vice President
Date:
PUTNAM FIDUCIARY TRUST COMPANY
/s/ John P. Capece By:/s/ Arthur R. Abelson
- ------------------------------ --------------------------------
Witness Title: Vice President
Date: 01/06/1995
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SCHEDULE 1
Name of Company Name of Plan Maintained
----------------------- -----------------------------------
1. Scotsman Group Inc. The Scotsman Tax Reduction
Investment Plan
2. The Delfield Company The Delfield Company 401(k) Savings
and Profit Sharing Retirement Plan
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EXHIBIT 5
SCHIFF HARDIN & WAITE
7200 Sears Tower
Chicago, Illinois 60606
Mark C. Zaander
(312) 258-5520
January 10, 1994
Scotsman Industries, Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Re: Registration on Form S-8 of 300,000 shares of common stock,
$0.10 par value per share and the related common stock
purchase rights ("Stock")
Ladies and Gentlemen:
We have acted as counsel to Scotsman Industries, Inc., a
Delaware corporation (the "Company"), in connection with the Company's
filing of a Registration Statement on Form S-8 (the "Registration
Statement") covering 300,000 shares of Stock to be offered and sold
pursuant to the terms of the Scotsman Tax Reduction Investment Plan,
as amended and restated effective December 28, 1994 (the "Plan"),
together with the participants' interests in the Plan.
In this connection, we have considered such questions of law
and have examined such documents as we have deemed necessary to enable
us to render the opinions contained herein. Based upon the foregoing,
it is our opinion that those shares of the Stock that are originally
issued shares, when issued in accordance with the Plan and subject to
the terms and conditions thereof, will be legally issued, fully paid
and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Mark C. Zaander
-------------------------------
Mark C. Zaander
MCZ:rl
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8
of our reports, dated February 17, 1994, included or incorporated by
reference to the Annual Report on Form 10-K of Scotsman Industries,
Inc. for the year ended January 2, 1994, and our report, dated May 20,
1994, included in the Annual Report on Form 11-K of the Scotsman Tax
Reduction Investment Plan for the year ended December 31, 1993, and to
all references to our firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
January 10, 1995
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