As filed with the Securities and Exchange Commission on June 19, 1995
Registration No. 33-_______
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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)
RETIREMENT SAVINGS PLAN FOR HOURLY EMPLOYEES
OF SCOTSMAN GROUP INC. AND AFFILIATES
(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
___________________________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum Amount of
Amount to be offering price aggregate offering registration
Title of Securities to be Registered registered (1) per share (2) price (2) fee (2)
<S> <C> <C> <C> <C>
Common Stock, par value $.10 per
share (including associated Common
Stock Purchase Rights) 100,000 $17.875 $1,787,500 $616.39
Interests in the Plan (3) (3) (3) (3)
<PAGE>
</TABLE>
(1) Based upon the number of shares that would be purchased by the
trustee of the trust established in connection with the
Retirement Savings Plan for Hourly Employees of Scotsman Group
Inc. and Affiliates during the three- to five-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 $17.875 per share,
the average of the high and low sales prices reported on the New
York Stock Exchange consolidated reporting system on June 14,
1995. No maximum number of shares are issuable under the Plan.
(2) Estimated on the basis of $17.875 per share, the average of the
high and low sales prices as reported on the New York Stock
Exchange consolidated reporting system on June 14, 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.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by Scotsman
Industries, Inc. (the "Registrant") are incorporated herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended January 1, 1995;
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended April 2, 1995; and
(c) The description of the Registrant's Common Stock, par
value $.10 per share, and the Common Stock Purchase
Rights contained in the Registrant's Registration
Statement on Form 10, filed with the Securities and
Exchange Commission (the "Commission") on February 14,
1989, as amended by Amendment No. 1 on Form 8, filed
with the Commission on March 14, 1989, Amendment No. 2
on Form 8, filed with the Commission on March 23, 1989,
Amendment No. 3 on Form 8, filed with the Commission on
March 27, 1989 and Amendment No. 4 on Form 10/A, filed
with the Commission on January 27, 1994.
All documents subsequently filed by the Registrant and/or
the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-
effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining
unsold, shall be deemed incorporated by reference herein and to be a
part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under the General Corporation Law of the State of Delaware
(the "Delaware Law"), directors and officers as well as other
employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines and amounts paid in
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<PAGE>
settlement in connection with specified actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation--a "derivative
action") if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the company,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar
standard of care is applicable in the case of derivative actions,
except that indemnification only extends to expenses (including
attorney's fees) incurred in connection with the defense or settlement
of such an action, and the Delaware Law requires court approval before
there can be any indemnification where the person seeking
indemnification has been found liable to the company.
Article Ninth of the Restated Certificate of Incorporation
of the Registrant ("Article Ninth") provides that each person who was
or is made a party to, or is involved in, any action, suit or
proceeding by reason of the fact that he or she is or was a director,
officer or employee of the Registrant (or was serving at the request
of the Registrant as a director, officer, employee or agent for
another entity) will be indemnified and held harmless by the
Registrant, to the full extent authorized by the Delaware Law, as
currently in effect (or, to the extent indemnification is broadened,
as it may be amended) against all expense, liability or loss
(including attorneys' fees, judgments, fines, Employee Retirement
Income Security Act excise taxes or penalties and amounts to be paid
in settlement) reasonably incurred by such person in connection
therewith. Article Ninth provides that the rights conferred thereby
are contract rights and will include the right to be paid by the
Registrant for the expenses incurred in defending the proceedings
specified above, in advance of their final disposition, except that,
if the Delaware Law so requires, such payment will only be made upon
delivery to the Registrant by the indemnified party of an undertaking
to repay all amounts so advanced if it is ultimately determined that
the person receiving such payments is not entitled to be indemnified
under such provision or otherwise. Article Ninth provides that the
Registrant may, by action of its board of directors, provide
indemnification to its agents with the same scope and effect as the
foregoing indemnification of directors, officers and employees.
Article Ninth provides that persons indemnified thereunder
may bring suit against the Registrant to recover unpaid amounts
claimed thereunder, and that if such suit is successful, the expense
of bringing such a suit will be reimbursed by the Registrant. Article
Ninth further provides that while it is a defense to such a suit that
the person claiming indemnification has not met the applicable
standards of conduct making indemnification permissible under the
Delaware Law, the burden of proving the defense will be on the
Registrant and neither the failure of the Registrant's board of
directors to have made a determination that indemnification is proper
nor an actual determination that the claimant has not met the
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<PAGE>
applicable standard of conduct will be a defense to the action or
create a presumption that the claimant has not met the applicable
standard of conduct.
Article Ninth provides that the rights to indemnification
and the payment of expenses incurred in defending a proceeding in
advance of its final disposition conferred therein will not be
exclusive of any other right which any person may have or acquire
under any statute, provision of the Registrant's Restated Certificate
of Incorporation or By-Laws, or otherwise. Finally, Article Ninth
provides that the Registrant may maintain insurance, at its expense,
to protect itself and any of its directors, officers, employees or
agents against any expense, liability or loss, whether or not the
Registrant would have the power to indemnify such person against such
expense, liability or loss under the Delaware Law.
The Registrant has insurance which insures directors and
officers of the Registrant for acts committed in their capacity as
directors and officers or claims made against them by reason of their
status as directors or officers, except for and to the extent the
Registrant has indemnified the directors or officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. 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 11 hereof. The Registrant hereby
undertakes to submit the Plan in a timely manner to the Internal
Revenue Service for a determination that the Plan is qualified under
Section 401 of the Internal Revenue Code of 1986, as amended, and to
make all changes required by the Internal Revenue Service in order to
so qualify the Plan.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
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<PAGE>
a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
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<PAGE>
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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<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 May
18, 1995.
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 attached thereto) 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.
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<PAGE>
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard C. Osborne Chairman of the Board, May 18, 1995
- ---------------------- President, Chief Executive
Richard C. Osborne Officer and Director
(Principal Executive Officer)
/s/ Donald D. Holmes Vice President -- Finance May 18, 1995
- ---------------------- (Principal Financial and
Donald D. Holmes Accounting Officer)
/s/ Donald C. Clark Director May 18, 1995
- ----------------------
Donald C. Clark
/s/ Frank W. Considine Director May 18, 1995
- ----------------------
Frank W. Considine
/s/ Timothy C. Collins Director May 18, 1995
- ----------------------
Timothy C. Collins
/s/ Matthew O. Diggs, Jr. Director May 18, 1995
- ----------------------
Matthew O. Diggs, Jr.
/s/ George D. Kennedy Director May 18, 1995
- ----------------------
George D. Kennedy
/s/ James J. O'Connor Director May 18, 1995
- ----------------------
James J. O'Connor
/s/ Robert G. Rettig Director May 18, 1995
- ----------------------
Robert G. Rettig
</TABLE>
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<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 May 18, 1995.
RETIREMENT SAVINGS PLAN FOR HOURLY
EMPLOYEES OF SCOTSMAN GROUP INC.
AND AFFILIATES
By:/s/ Richard M. Holden
-------------------------------
Richard M. Holden
Plan Administrator
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page No.
- --------- ------------ ----------
4.1 Retirement Savings Plan for Hourly 13
Employees of Scotsman Group Inc. and
Affiliates.
4.2 Scotsman Group Inc. Plans Trust
Agreement, dated as of December 29,
1994, among Putnam Fiduciary Trust
Company, Scotsman Group Inc. and The
Delfield Company (incorporated herein
by reference to the Registrant's 10-Q
for the quarterly period ended April 2,
1995, File No. 0-10182).
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 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. 112
23.1 Consent of Arthur Andersen LLP. 113
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Exhibit
Number Description Page No.
- --------- ------------ ----------
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).
-12-
SCHIFF HARDIN & WAITE
EXHIBIT 4.1
RETIREMENT SAVINGS PLAN FOR HOURLY EMPLOYEES OF
SCOTSMAN GROUP INC. AND AFFILIATES
Effective June 1, 1995
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<PAGE>
RETIREMENT SAVINGS PLAN FOR HOURLY EMPLOYEES OF
SCOTSMAN GROUP INC. AND AFFILIATES
TABLE OF CONTENTS
---------------------
ARTICLE 1 -- INTRODUCTION . . . . . . . . . . . . . . . . . . . . 19
1.1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 2 -- DEFINITIONS . . . . . . . . . . . . . . . . . . . . 20
2.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 3 -- PARTICIPATION AND YEARS OF SERVICE . . . . . . . . . 28
3.1 ELIGIBILITY TO PARTICIPATE . . . . . . . . . . . . . . 28
3.2 COMMENCEMENT OF PARTICIPATION . . . . . . . . . . . . . 28
3.3 WAIVER OF PARTICIPATION . . . . . . . . . . . . . . . . 29
3.4 TRANSFERS FROM ELIGIBLE EMPLOYMENT . . . . . . . . . . 29
3.5 HOUR OF SERVICE . . . . . . . . . . . . . . . . . . . . 30
3.6 YEAR OF SERVICE . . . . . . . . . . . . . . . . . . . . 31
3.7 Participation Upon Reemployment . . . . . . . . . . . . 32
3.8 PREDECESSOR SERVICE . . . . . . . . . . . . . . . . . . 32
ARTICLE 4 -- CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 33
4.1 TAX REDUCTION CONTRIBUTIONS . . . . . . . . . . . . . . . . 33
4.2 TAX REDUCTION AGREEMENT . . . . . . . . . . . . . . . . 33
4.3 INVESTMENT PLAN CONTRIBUTIONS . . . . . . . . . . . . . 36
4.4 INVESTMENT PLAN AGREEMENT . . . . . . . . . . . . . . . 36
4.5 MATCHING COMPANY CONTRIBUTIONS . . . . . . . . . . . . 39
ARTICLE 5 -- IMITATIONS ON TAX REDUCTION CONTRIBUTIONS . . . . . 40
5.1 DOLLAR LIMITATION . . . . . . . . . . . . . . . . . . . 40
5.2 MAXIMUM DEFERRAL PERCENTAGE . . . . . . . . . . . . . . 40
5.3 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 41
5.4 FAMILY MEMBERS . . . . . . . . . . . . . . . . . . . . 43
5.5 PROSPECTIVE REDUCTION OF TAX REDUCTION CONTRIBUTIONS . 44
ARTICLE 6 -- LIMITATION ON INVESTMENT PLAN AND MATCHING COMPANY
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . 45
6.1 MAXIMUM CONTRIBUTION PERCENTAGE . . . . . . . . . . . . 45
6.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 45
6.3 PROSPECTIVE REDUCTION OF INVESTMENT PLAN CONTRIBUTIONS 46
6.4 TESTING OF TAX REDUCTION CONTRIBUTIONS UNDER MAXIMUM
CONTRIBUTION PERCENTAGE TEST . . . . . . . . . . . . . 47
ARTICLE 7 -- MULTIPLE USE LIMITATION . . . . . . . . . . . . . . 48
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ARTICLE 8 -- CORRECTION OF TAX REDUCTION CONTRIBUTIONS IN EXCESS
OF DOLLAR LIMITATION . . . . . . . . . . . . . . . . . . . . 50
8.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . . . 50
8.2 DESIGNATION AS EXCESS DEFERRAL . . . . . . . . . . . . 50
8.3 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . 50
8.4 COORDINATION WITH EXCESS TAX REDUCTION CONTRIBUTIONS . 51
ARTICLE 9 -- CORRECTION OF EXCESS CONTRIBUTIONS . . . . . . . . . 51
9.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . . . 51
9.2 MAXIMUM DEFERRAL PERCENTAGE TEST -- EXCESS TAX
REDUCTION CONTRIBUTIONS . . . . . . . . . . . . . . . . 52
9.3 RECHARACTERIZATION OF EXCESS TAX REDUCTION
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 52
9.4 DISTRIBUTION OF EXCESS TAX REDUCTION CONTRIBUTION . . . 53
9.5 MAXIMUM CONTRIBUTION PERCENTAGE TEST -- EXCESS
AGGREGATE CONTRIBUTION . . . . . . . . . . . . . . . . 54
9.6 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS . . . . 55
9.7 FORFEITURE OF MATCHING COMPANY CONTRIBUTIONS . . . . . 55
9.8 ALLOCABLE INCOME . . . . . . . . . . . . . . . . . . . 56
9.9 TIMING OF CORRECTIONS . . . . . . . . . . . . . . . . . 56
9.10 SPECIAL RULE FOR RECHARACTERIZED AMOUNTS . . . . . . . 56
9.11 ADDITIONAL COMPANY CONTRIBUTIONS . . . . . . . . . . . 57
9.12 Highly Compensated Individual Elections . . . . . . . . 57
9.13 Other Permissible Methods of Testing and Correction . . 57
ARTICLE 10 -- LIMITATIONS ON ANNUAL ADDITIONS . . . . . . . . . . 57
10.1 BASIC LIMITATION . . . . . . . . . . . . . . . . . . . 57
10.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 58
10.3 LIMITATION ON COMBINATION OF PLANS . . . . . . . . . . 59
10.4 PROSPECTIVE ADJUSTMENT TO CONTRIBUTIONS . . . . . . . . 59
10.5 DISPOSAL OF EXCESS ANNUAL ADDITIONS . . . . . . . . . . 60
ARTICLE 11 -- GENERAL PROVISIONS REGARDING CONTRIBUTIONS . . . . 61
11.1 MANNER OF MAKING CONTRIBUTIONS . . . . . . . . . . . . 61
11.2 LIMITATION TO AMOUNT DEDUCTIBLE . . . . . . . . . . . . 62
11.3 RETURN OF CONTRIBUTIONS . . . . . . . . . . . . . . . . 62
ARTICLE 12 -- ROLLOVERS AND TRANSFERS . . . . . . . . . . . . . . 63
12.1 ROLLOVERS . . . . . . . . . . . . . . . . . . . . . . . 63
12.2 Transfers from Other Plan . . . . . . . . . . . . . . . 64
12.3 SECTION 401(k) LIMITATIONS . . . . . . . . . . . . . . 65
12.4 TRANSFERS TO OTHER PLAN . . . . . . . . . . . . . . . . 65
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<PAGE>
ARTICLE 13 -- ACCOUNTS AND ALLOCATION OF FUNDS . . . . . . . . . 67
13.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE . . . . . . . . . . 67
13.2 TRUST FUND VALUATION . . . . . . . . . . . . . . . . . 68
13.3 ALLOCATION OF CONTRIBUTIONS TO PARTICIPANTS' SEPARATE
ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . 68
13.4 ADJUSTMENTS TO PARTICIPANTS' ACCOUNTS . . . . . . . . . 68
13.5 PARTICIPANT-DIRECTED INVESTMENTS FOR FUTURE
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 69
13.6 INVESTMENT OF MATCHING COMPANY CONTRIBUTIONS;
FORFEITURES . . . . . . . . . . . . . . . . . . . . . . 70
13.7 INVESTMENT TRANSFERS . . . . . . . . . . . . . . . . . 70
13.8 SPECIAL INVESTMENT RULE . . . . . . . . . . . . . . . . 71
13.9 SPECIAL INVESTMENT ELECTION PERIODS . . . . . . . . . 71
ARTICLE 14 -- VESTING; FORFEITURES . . . . . . . . . . . . . . . 72
14.1 VESTING OF ACCOUNTS . . . . . . . . . . . . . . . . . . 72
14.2 Forfeiture of Non-Vested Interest . . . . . . . . . . . 73
14.3 RESTORATION OF NON-VESTED INTEREST . . . . . . . . . . 73
14.4 RESTORATION OF YEARS OF SERVICE . . . . . . . . . . . . 74
ARTICLE 15 -- DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . 75
15.1 TIMING OF DISTRIBUTIONS; APPLICABLE VALUATION DATE . . 75
15.2 METHOD OF DISTRIBUTION . . . . . . . . . . . . . . . . 76
15.3 DESIGNATION OF BENEFICIARY . . . . . . . . . . . . . . 77
15.4 ELECTION OF DISTRIBUTION . . . . . . . . . . . . . . . 78
15.5 CODE SECTION 401(a)(9) . . . . . . . . . . . . . . . . 78
ARTICLE 16 -- WITHDRAWALS . . . . . . . . . . . . . . . . . . . . 80
16.1 WITHDRAWAL CATEGORIES . . . . . . . . . . . . . . . . . 80
16.2 Hardship Withdrawals . . . . . . . . . . . . . . . . . 81
16.3 MANNER OF MAKING WITHDRAWALS . . . . . . . . . . . . . 83
16.4 WITHDRAWALS UPON ATTAINMENT OF AGE 59-1/2 . . . . . . . 84
16.5 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 85
ARTICLE 17 -- LOANS . . . . . . . . . . . . . . . . . . . . . . . 85
17.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . . . 85
17.2 AMOUNT OF LOAN . . . . . . . . . . . . . . . . . . . . 85
17.3 SECURITY FOR LOAN . . . . . . . . . . . . . . . . . . . 86
17.4 INTEREST RATE CHARGED . . . . . . . . . . . . . . . . . 86
17.5 REPAYMENT OF LOANS . . . . . . . . . . . . . . . . . . 86
17.6 DEFAULT ON LOAN . . . . . . . . . . . . . . . . . . . . 88
17.7 MANNER OF MAKING LOANS . . . . . . . . . . . . . . . . 89
17.8 ACCOUNTING FOR LOANS . . . . . . . . . . . . . . . . . 89
ARTICLE 18 -- ADMINISTRATION . . . . . . . . . . . . . . . . . . 90
18.1 ALLOCATION OF RESPONSIBILITIES AMONG FIDUCIARIES . . . 90
18.2 POWERS AND RESPONSIBILITIES OF THE COMMITTEE . . . . . 91
18.3 CONCLUSIVENESS OF RECORDS . . . . . . . . . . . . . . . 93
18.4 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 93
18.5 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . 93
- 16 -
<PAGE>
ARTICLE 19 -- AMENDMENT, TERMINATION AND MERGER . . . . . . . . . 95
19.1 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . 95
19.2 PLAN TERMINATION . . . . . . . . . . . . . . . . . . . 96
19.3 DISTRIBUTIONS UPON CERTAIN SALES . . . . . . . . . . . 96
19.4 SUCCESSOR EMPLOYER . . . . . . . . . . . . . . . . . . 97
19.5 MERGER, CONSOLIDATION OR TRANSFER . . . . . . . . . . . 97
ARTICLE 20 -- MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 98
20.1 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES . . 98
20.2 NON-GUARANTEE OF EMPLOYMENT . . . . . . . . . . . . . . 98
20.3 RIGHTS TO TRUST ASSETS . . . . . . . . . . . . . . . . 98
20.4 NON-ALIENATION OF THE RIGHT TO RECEIVE PAYMENTS . . . . 99
20.5 CONTROLLING LAW . . . . . . . . . . . . . . . . . . . . 100
20.6 PLAN CONTROLS . . . . . . . . . . . . . . . . . . . . . 100
20.7 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . 100
20.8 EFFECT OF MISTAKE . . . . . . . . . . . . . . . . . . . 101
20.9 UNCLAIMED FUNDS . . . . . . . . . . . . . . . . . . . . 101
ARTICLE 21 -- TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . 102
21.1 TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . 102
21.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 102
21.3 MINIMUM ALLOCATION . . . . . . . . . . . . . . . . . . 107
21.4 NONFORFEITABILITY OF MINIMUM ALLOCATION . . . . . . . . 109
21.5 MINIMUM VESTING SCHEDULES . . . . . . . . . . . . . . . 109
21.6 COLLECTIVE BARGAINING RULES . . . . . . . . . . . . . . 109
21.7 TEMPORARY EFFECT . . . . . . . . . . . . . . . . . . . 109
ARTICLE 22 -- INTERNAL REVENUE SERVICE APPROVAL . . . . . . . . . 110
SCHEDULE A . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
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ARTICLE 1
INTRODUCTION
1.1 INTRODUCTION.
This Plan is established by Scotsman Group Inc., effective June
1, 1995, for the benefit of its eligible employees and eligible
employees of certain subsidiaries thereof in order to encourage their
personal savings. 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 any amendment to the
Plan, the Plan or any amendment thereto shall apply solely to eligible
employees whose employment with Scotsman Group Inc. and its
subsidiaries is terminated on or after the effective date of the Plan
or the applicable amendment. The rights of an eligible employee whose
employment is terminated prior to the effective date of the Plan or an
applicable amendment shall be determined solely by the provisions of
the Plan as in effect on the date of his termination of employment.
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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.
"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:
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(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;
c) the Employee is absent on an approved leave of
absence under the Family and Medical Leave Act and he
returns to work for a Company or an Affiliate at the end of
such leave of absence; or
d) 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
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
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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
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.
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<PAGE>
"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 as listed on the
attached Schedule A. 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
cafeteria plan covered by Section 125 of the Code maintained by a
Company.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, the annual Compensation of each Participant taken into
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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 numerator of which is the number of
months in the determination period, and the denominator of which is
12. 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.
"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 June 1, 1995.
"Employee" means any hourly paid individual employed by a
division or at a location of Scotsman Group Inc. or of its Affiliate,
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<PAGE>
Booth, Inc. listed on the attached Schedule A; provided, however, that
Employee shall not include any individual covered by a collective
bargaining agreement between employee representatives and a Company if
retirement benefits were the subject of good faith bargaining between
such employee representatives and such 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 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 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 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.
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<PAGE>
"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.
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.
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<PAGE>
Any other investment fund may be established, and any
existing investment fund may be eliminated, by the Committee from time
to time.
"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 Retirement Savings Plan For Hourly Employees Of
Scotsman Group Inc. and Affiliates as amended from time to time.
"Plan Year" means the twelve-month period commencing on January
1st and ending on December 31st.
"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.
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<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 Service" has the meaning set forth in Article 3.6.
ARTICLE 3
PARTICIPATION AND YEARS OF SERVICE
3.1 ELIGIBILITY TO PARTICIPATE.
Any Employee who has completed one Year of Service on the
Effective Date shall be eligible to participate in the Plan on the
Effective Date. 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
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
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<PAGE>
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
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
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<PAGE>
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
(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
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<PAGE>
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.
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 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.
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3.7 Participation 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:
(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 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.
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
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<PAGE>
the Code, the Committee on a nondiscriminatory basis may grant credit
for Hours and Years of Service with a predecessor corporation.
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
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
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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
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
of a Participant executed during the period ending 180 days after the
date of his initial election to have Tax Reduction Contributions made
on his behalf pursuant to Article 4.1 shall be effective no earlier
than the first day of the calendar month commencing as soon as
administratively practicable (but in no event more than 30 days) after
the amended agreement is received in executed form by the Committee.
The amended tax reduction agreement of a Participant not described in
the preceding sentence shall be effective no earlier than the first
day of the calendar quarter commencing at least 30 days after the
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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 Tax Reduction
Contributions under (C) hereof.
(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
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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.
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
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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
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 of a Participant executed during the
period ending 180 days after the date of his initial election to make
Investment Plan Contributions pursuant to Article 4.3 shall be
effective no earlier than the first day of the calendar month
commencing as soon as administratively practicable (but in no event
more than 30 days) after the amended agreement is received in executed
form by the Committee. The amended investment plan agreement of a
Participant not described in the preceding sentence 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
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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 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
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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 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) RELATIONSHIP OF MATCHING COMPANY CONTRIBUTIONS TO TAX
REDUCTION CONTRIBUTIONS AND INVESTMENT PLAN CONTRIBUTIONS. The
Matching Company Contributions shall be made to match a Participant's
Tax Reduction Contributions. No Matching Company Contributions shall
be made with respect to Investment Plan Contributions.
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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 1995 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.
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
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(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.
(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 $100,000 in 1995, 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 1995, 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
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(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
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
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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.
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
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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
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.
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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.
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
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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
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
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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
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.
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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.
(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
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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
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
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(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.
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).
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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.
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.
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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
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;
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(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
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
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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.
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
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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
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, 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
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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.
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.
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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.
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
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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.
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
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are treated as "compensation" under Section 415(c)(3) of the
Code, but limited in accordance with the Code.
(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
Limitation Year that the foregoing limitations would be exceeded if
the full amount of contributions otherwise allocable would be
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allocated, the annual additions to this Plan for the remainder of the
Limitation Year shall be adjusted by reducing (i) first, unmatched Tax
Reduction Contributions, (ii) second, Investment Plan Contributions;
and (iii) third, 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 Sect. 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
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
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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.
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
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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.
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
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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.
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
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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.
(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.
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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.
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) 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
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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
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)
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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.
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.
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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.
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
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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.
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
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, or loan repayments, an investment
election pursuant to procedures prescribed by the Committee shall be
submitted and shall direct that the aggregate of such contributions or
loan repayments, (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,
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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.
(C) ROLLOVER CONTRIBUTIONS. An investment election on a form
prescribed by the Committee shall be submitted with an Employee's
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 and allocated to the account of each Participant on the
Valuation Date that occurs as soon as administratively practicable
after the end of the calendar quarter to which such Matching Company
Contributions or forfeitures are applicable. Forfeitures shall be
held by the Trustee in Fund A until such 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. A transfer election shall be made in 5% increments
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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 pursuant to procedures
established by the Committee, on or before the close of business on
such Valuation Date.
13.8 SPECIAL INVESTMENT RULE.
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.
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 SERVICE 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 Vested Forfeited
Service 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%
(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
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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)
the date upon which he incurs a one year Break in Service (as defined
in Article 2.1). 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
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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 SERVICE.
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 Service
completed for purposes of Article 14.1 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 Service
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 Service
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 Service
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 Service
following his return to employment; provided, however, in no
event shall his Years of Service completed prior to such one year
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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
Service completed prior to such one year Break in Service.
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 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 the date on which the distribution is processed by the Trustee;
provided, however, that payments from Fund A 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 processing 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 date of
termination of employment. If the Participant (or beneficiary) does
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not consent to the distribution within 12 months after the date of
termination of employment, then distribution of such account shall
occur as soon as administratively practicable after the Participant's
attainment of age 65 (or the date the Participant would have attained
age 65 in the case of a 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 date on which the
distribution is processed by the Trustee.
(C) 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) hereof, the
Participant's account shall continue to share in the earnings and
losses of the Trust until the applicable processing date under (B).
Transfers among Investment Funds also shall be permitted until such
processing date. Loans shall be immediately due and payable upon the
Participant's date of termination of employment.
15.2 METHOD OF DISTRIBUTION.
Notwithstanding the following provisions of this Section, the
only form of distribution available to a Participant shall be a single
sum distribution. Payment from Fund B or Fund C shall be in cash.
Payments 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 Fund A;
and provided, further, that partial shares will be paid in cash.
Payments from Funds D, E, F and G shall be in cash, shares of the
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applicable Fund, or a combination of both, in the discretion of the
Participant.
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
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
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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
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.
15.5 CODE SECTION 401(a)(9).
Notwithstanding anything to the contrary contained elsewhere in
the Plan:
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(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 in a lump sum not later than the
Required Distribution Date in accordance with regulations
prescribed by the Secretary of Treasury.
(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
benefit of a beneficiary, (B) in accordance with regulations
prescribed by the Secretary of the Treasury, 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
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following the calendar year in which the Participant attains
age 70-1/2, 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.
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), 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. Withdrawals from this category
may be made twice per Plan Year.
Category B: 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 C: Rollover Contributions (plus earnings thereon).
Withdrawals from this category may be made twice per Plan Year.
Category D: Tax Reduction Contributions (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
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
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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.
(E) CONSEQUENCES OF HARDSHIP WITHDRAWALS. The Participant's
elective contributions and employee contributions (as defined in
Regulations Sect. 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
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benefit plan). The Participant may not make elective contributions
(as defined in Regulations Sect. 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 shall be in cash or stock or a
combination of both in the discretion of the Participant; provided
however, that (i) a hardship withdrawal only may be made in cash and
(ii) no distribution of less than twenty (20) shares will be made from
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
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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:
Category A: Investment Plan Contributions (excluding earnings
thereon) 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.
Category B: Matching Company Contributions (plus earnings
thereon) plus earnings on all Investment Plan Contributions after
five years of participation in the Plan.
Category C: Rollover Contributions (plus earnings thereon).
Category D: Tax Reduction Contributions (plus earnings thereon).
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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.
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
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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.
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
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greater than 30 years) as determined by the Committee; provided,
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.
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
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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
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,
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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
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
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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,
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
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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
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
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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
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
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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.
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
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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
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
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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.
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
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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).
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
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benefits under the Plan shall be made solely out of the assets of the
Trust.
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
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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 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,
and the plural shall include the singular. Titles of articles are
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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
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
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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 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
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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.
(b) This Plan is part of a required aggregation group
of plans but not part of a permissive aggregation group
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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
actually made as of the determination date, but which is
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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
an accrued benefit made in the five-year period ending on
the determination date.
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<PAGE>
(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,
would continue to satisfy the requirements of sections 401(a)(4) and
410 of the Code.
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<PAGE>
(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
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
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<PAGE>
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). The
provisions set forth in the last paragraph of the definition of
Compensation in Article 2.1 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.
(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
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<PAGE>
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
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
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<PAGE>
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 effective June 1, 1995 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 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
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<PAGE>
taxable year in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe.
IN WITNESS WHEREOF, this Plan has been executed this 1st day of
June, 1995, effective as of June 1, 1995.
SCOTSMAN GROUP INC.
By: /s/ Richard M. Holden
------------------------------
Richard M. Holden
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<PAGE>
SCHEDULE A
------------
Scotsman Ice Systems Division of Scotsman Group Inc. located at
Fairfax, South Carolina
Booth, Inc. located at Dallas, Texas
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SCHIFF HARDIN & WAITE
EXHIBIT 5
SCHIFF HARDIN & WAITE
- -------------------------
7300 Sears Tower
Chicago, Illinois 60606
Mark C. Zaander
(312) 258-5520
June 19, 1995
Scotsman Industries, Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Re: Scotsman Industries, Inc. - Registration of 100,000 Shares
of Common Stock, Par Value $0.10 Per Share, on Form S-8
-----------------------------------------------------------
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 100,000 shares of Common Stock, $0.10 par value per share
(the "Common Stock"), to be issued pursuant to the Retirement Savings
Plan for Hourly Employees of Scotsman Group Inc. and Affiliates (the
"Plan"). The Registration Statement also covers an indeterminate
amount of interests to be offered or sold under the Plan.
In this connection, we have made such investigation and have
examined such documents as we have deemed necessary in order to enable
us to render the opinion contained herein.
Based upon the foregoing, it is our opinion that those shares of
Common Stock covered by the Registration Statement that are originally
issued in accordance with the terms of the Plan will, when so issued,
be legally issued, fully paid and nonassessable, subject to the terms
and conditions of the Plan.
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
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SCHIFF HARDIN & WAITE
EXHIBIT 23.1
[Letterhead of Arthur Andersen LLP]
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 7, 1995, included in or incorporated by
reference to the Annual Report on Form 10-K of Scotsman Industries,
Inc. for the year ended January 1, 1995, and to all references to our
firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 14, 1995
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