FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COLLINS & AIKMAN CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
Delaware 13-3489233
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
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701 McCullough Drive, Charlotte, North Carolina 28262
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(Address of Principal Executive Offices) (Zip Code)
Collins & Aikman Products Co.(formerly Collins & Aikman Corporation)
Employees' Profit Sharing and Personal Savings Plan
(Full title of the plan)
Elizabeth R. Philipp, Executive Vice President, Secretary and General Counsel;
200 Madison Avenue, Sixth Floor, New York, New York 10016
(Name and address of agent for service)
(212) 578-1336
Telephone number, including area code, of agent for service
Calculation of Registration Fee
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Proposed Maximum Proposed Maximum
Title Amount to be Offering Aggregate Amount of
Securities Registered (1) Price Per Share Offering Price Registration
to be Registered (2) (2) Fee
- ------------------------ ---------------------- ----------------------- ----------------------- ----------------------
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Common Stock, par
value $.01 per 3,000,000 $10.625 $31,875,000 $9,659.00
share.
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NOTES:
(1) Based upon the maximum number of shares of Common Stock, par value $.01
per share (the "Common Stock"), that will be subject to purchase upon
the direction of participants in the Collins & Aikman Products Co.
(formerly Collins & Aikman Corporation) Employees' Profit Sharing and
Personal Savings Plan (the "Plan") described herein. In addition,
pursuant to Rule 416(c) under the Securities Act of 1933, as amended,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the Plan.
(2) Estimated solely for the purpose of calculating the registration fee
and based, pursuant to Rule 457(h) under the Securities Act of 1933, as
amended, upon the average of the high and low prices of the Common
Stock on the New York Stock Exchange on August 22 , 1997.
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PART I
Information Required in the Section 10(a) Prospectus
The documents containing the information specified in this Part I will
be sent or given to plan participants as specified by Rule 428 of the Securities
Act of 1933.
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents By Reference.
Collins & Aikman Corporation (the "Corporation") and the Collins &
Aikman Products Co. (formerly Collins & Aikman Corporation) Employees' Profit
Sharing and Personal Savings Plan (the "Plan") hereby incorporate by reference
the following documents into this registration statement:
(a) (i) Collins & Aikman Corporation's Transition Report on Form 10-K
for the Transition Period from January 28,1996 to December 28, 1996.
(ii) Annual Report on Form 11-K of the Plan for the Fiscal Year
ended December 31, 1996.
(b) (i) Collins & Aikman Corporation's Quarterly Report on Form 10-Q
for the Fiscal Quarter ended March 29, 1997.
(ii) Collins & Aikman Corporation's Quarterly Report on Form 10-Q
for the Fiscal Quarter ended June 28, 1997.
(iii) Collins & Aikman Corporation's Current Report on Form 8-K
dated February 6, 1997.
(iv) Collins & Aikman Corporation's Current Report on Form 8-K
dated February 20, 1997.
(v) Collins & Aikman Corporation's Current Report on Form 8-K/A
dated February 24, 1997 (amending the Current Report on Form 8-K dated December
10, 1996).
(vi) Collins & Aikman Corporation's Current Report on Form 8-K
dated July 16, 1997.
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(c) The description of the Common Stock contained in the Registration
Statement on Form 8-A of Collins & Aikman Holdings Corporation dated June 20,
1994 (including the information set forth in the Preliminary Prospectus dated
June 2, 1994 (subject to completion) forming a part of Amendment No. 2 to the
Registration Statement on Form S-2, Registration No. 33-53179, filed on June 3,
1994, by the Corporation under the captions "PROSPECTUS SUMMARY" and
"DESCRIPTION OF THE CAPITAL STOCK" and on the outside front cover page of such
Prospectus, which information is incorporated into the Form 8-A by reference).
The Corporation and the Plan further state that all documents
subsequently filed by the Corporation 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 have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this registration statement and to be
part thereof 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 Officers and Directors.
Reference is made to the provisions of Article Eighth of the Restated
Certificate of Incorporation of the Corporation (the "Certificate"), of Article
VIII of the Bylaws of the Corporation (the "Bylaws") and of Section 145 of the
Delaware General Corporation Law ("DGCL"), which contain provisions relating to
indemnification of officers, directors, employees and agents of the Corporation.
Article Eighth of the Certificate provides as follows:
EIGHTH: To the fullest extent that the General Corporation Law
of the State of Delaware as it exists on the date hereof or as it may
hereafter be amended permits the limitation or elimination of the
liability of directors, no director of the Corporation shall be liable
to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director. No amendment to or repeal of this
Article EIGHTH shall apply to or have any effect on the liability or
alleged liability of any director of the
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Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
Article VIII of the Bylaws provides as follows:
Indemnification of Directors and Officers
SECTION 1. Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is otherwise
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason
of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide prior to such amendment), against
all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection
therewith; provided, however, that, except as provided in Section 3 of
this ARTICLE VIII with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation.
SECTION 2. Right to Advancement of Expenses. The right to
indemnification conferred in Section 1 of this ARTICLE VIII shall
include the right to be paid by the Corporation the expenses (including
attorneys' fees) incurred in defending any such proceeding in advance
of its final disposition (hereinafter an "advancement of expenses");
provided, however, that, if the Delaware General Corporation Law
requires, an advancement of expenses incurred by an indemnitee in his
or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including,
without limitation, service to an employee
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benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further
right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under
this Section 2 or otherwise. The rights to indemnification and to the
advancement of expenses conferred in Sections 1 and 2 of this ARTICLE
VIII shall be contract rights and such rights shall continue as to an
indemnitee who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators.
SECTION 3. Right of Indemnitee to Bring Suit. If a claim under
Section 1 or 2 of this ARTICLE VIII is not paid in full by the
Corporation within sixty (60) days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be
twenty (20) days, the indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought
by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i) any
suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a
right to an advancement of expenses) it shall be a defense that, and
(ii) in any suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final adjudication
that, the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law.
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made
a determination prior to the commencement of such suit that
indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the indemnitee has
not met such applicable standard of conduct, shall create a presumption
that the indemnitee has not met the applicable standard of conduct or,
in the case of such a suit brought by the indemnitee, be a defense to
such suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or brought
by the Corporation to recover an
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advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this ARTICLE
VIII or otherwise shall be on the Corporation.
SECTION 4. Non-Exclusivity of Rights. The rights to
indemnification and to the advancement of expenses conferred in this
ARTICLE VIII shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, By-laws, agreement, vote of stockholders
or disinterested directors or otherwise.
SECTION 5. Insurance. The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer, employee
or agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or
loss, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the Delaware
General Corporation Law.
SECTION 6. Indemnification of Employees and Agents of the
Corporation. The Corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification and to
the advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Article with respect to
the indemnification and advancement of expenses of directors and
officers of the Corporation.
Section 145 of the DGCL provides as follows:
(a) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if the person acted in good faith and
in a manner the person reasonably believed
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to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable
cause to believe the person's conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the person did not act in
good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that the person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of
such action or suit if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director or officer of a corporation
has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of
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this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the present or former director,
officer, employee or agent is proper in the circumstances because the
person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be
made, with respect to a person who is a director or officer at the time
of such determination, (1) by a majority vote of the directors who were
not parties to such action, suit or proceeding, even though less than a
quorum, or (2) by a committee of such directors designated by a
majority vote of such directors, even though less than a quorum or (3)
if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees)
incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such
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person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as such person would
have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries;
and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(k) The Court of Chancery is hereby vested with exclusive
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jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligation to advance expenses (including attorneys'
fees).
The Corporation has insurance coverage under a policy issued to the
Corporation for losses by any person who is or hereafter may be a director or
officer of the Corporation arising from claims against that person for any
wrongful act (subject to certain exceptions) in his capacity as a director or
officer of the Corporation or any of its subsidiaries. The policy also provides
for reimbursement to the Corporation for indemnification given by the
Corporation pursuant to common or statutory law or the Certificate of
Incorporation or the By-Laws to any such person arising from any such claims.
The policy's present coverage is limited to a maximum of $50 million for claims
made in a single year and there is a deductible of $500,000 for reimbursement to
the Corporation.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
Exhibit
Number Description
4.1 Restated Certificate of Incorporation of Collins & Aikman
Corporation is hereby incorporated by reference to Exhibit 4.1 of
Collins & Aikman Corporation's Report on Form 10-Q for the fiscal
quarter ended July 30,1994.
4.2 Bylaws of Collins & Aikman Corporation, as amended, are hereby
incorporated by reference to Exhibit 3.2 of Collins & Aikman
Corporation's Report on Form 10-K for the Fiscal Year ended
January 27, 1996.
4.3 Certificate of Elimination of Cumulative Exchangeable
Redeemable Preferred Stock of Collins & Aikman Corporation is
hereby incorporated by reference to Exhibit 3.3 of Collins &
Aikman Corporation's Report on Form 10-Q for the fiscal quarter
ended October 28, 1995.
4.4 Collins & Aikman Products Co.(formerly Collins & Aikman
Corporation) Employees' Profit Sharing and Personal Savings Plan,
as amended.
5.1 Determination Letter, dated September 7, 1995, from the
Internal Revenue Service ("IRS") relating to the Plan.
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Exhibit
Number Description
The Corporation hereby undertakes that it will submit
the Plan, as amended through the date hereof, to the IRS in a
timely manner and will make all changes required by the IRS in
order to qualify the Plan, as so amended.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Coopers and Lybrand LLP.
24. Power of Attorney (contained in the signature section of this
Registration Statement).
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
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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 Corporation pursuant to the foregoing provisions, or otherwise, the
Corporation 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 Corporation of expenses
incurred or paid by a director, officer or controlling person of the Corporation
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 Corporation will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
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meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Charlotte, State of North Carolina, on August
25, 1997.
(Registrant) Collins & Aikman Corporation
By:/s/ J. Michael Stepp
J. Michael Stepp
Executive Vice President &
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below on this Registration
Statement hereby constitutes and appoints David A. Stockman and Randall J.
Weisenburger, and each of them, with full power to act without the other, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments (including
post-effective amendments and amendments thereto) to this Registration Statement
on Form S-8 of Collins & Aikman Corporation, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he might or could do in person thereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature Title Date
/s/ David A. Stockman Co-Chairman of the Board of August 25, 1997
- ----------------------------- Directors
David A. Stockman
/s/Randall J. Weisenburger
- ----------------------------- Co-Chairman of the Board of August 25,1997
Randall J. Weisenburger Directors
/s/ Thomas E. Hannah Director (Principal Executive August 25, 1997
- ----------------------------- Officer)
Thomas E. Hannah
/s/ J. Michael Stepp Executive Vice President & Chief August 25, 1997
- ----------------------------- Financial Officer (Principal
J. Michael Stepp Financial & Accounting Officer)
/s/ Robert C. Clark Director August 25, 1997
- -----------------------------
Robert C. Clark
/s/ George L. Majoros, Jr.
- ----------------------------- Director August 25,1997
George L. Majoros, Jr.
/s/ James J. Mossman Director August 25, 1997
- -----------------------------
James J. Mossman
/s/ Warren B. Rudman Director August 25, 1997
- -----------------------------
Warren B. Rudman
/s/ Stephen A. Schwarzman August 25,1997
- ----------------------------- Director
Stephen A. Schwarzman
/s/ W. Townsend Ziebold, Jr.
- ----------------------------- Director August 25, 1997
W. Townsend Ziebold, Jr.
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Administrative Committee of the Plan has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Charlotte, State of North Carolina, on August 25, 1997.
Collins & Aikman Products Co.(formerly
Collins & Aikman Corporation) Employees'
Profit Sharing and Personal Savings Plan
By: /s/ J. Michael Stepp
J. Michael Stepp
Executive Vice President &
Chief Financial Officer
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COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
(as amended and restated effective March 1, 1991)
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C> <C>
ARTICLE I NAME AND PURPOSE
SECTION 1.1. NAME........................................ 1
SECTION 1.2. PURPOSE..................................... 1
ARTICLE II CONSTRUCTION AND DEFINITIONS
SECTION 2.1. GENERAL..................................... 2
SECTION 2.2. APPLICABLE LAW.............................. 21
ARTICLE III PARTICIPATION
SECTION 3.1. GENERAL..................................... 21
SECTION 3.2. ELIGIBILITY................................. 21
SECTION 3.3. ELIGIBILITY OF FORMER PARTICIPANTS.......... 22
SECTION 3.4. EXCLUDED EMPLOYEES.......................... 23
ARTICLE IV SAVINGS CONTRIBUTIONS AND COMPANY MATCHES
SECTION 4.1. REDUCTION OF PARTICIPANT COMPENSATION....... 23
SECTION 4.2. BEFORE-TAX SAVINGS CONTRIBUTIONS............ 26
SECTION 4.3. COMPANY MATCH............................... 26
SECTION 4.4. AFTER-TAX SAVINGS CONTRIBUTIONS............. 27
ARTICLE V PROFIT-SHARING CONTRIBUTIONS
SECTION 5.1. AMOUNT OF PROFIT-SHARING CONTRIBUTION....... 28
SECTION 5.2. PARTICIPANTS ELIGIBLE FOR ALLOCATION........ 28
SECTION 5.3. ALLOCATION OF PROFIT-SHARING
CONTRIBUTION AND FORFEITURES................ 29
ARTICLE VI CONTRIBUTION SOURCES, LIMITATIONS AND
RESTRICTIONS
SECTION 6.1. SOURCE, ALLOCATION AND DEDUCTIBILITY OF
PARTICIPATING EMPLOYER CONTRIBUTIONS........ 30
i
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SECTION 6.2. LIMITATIONS ON BEFORE-TAX SAVINGS
CONTRIBUTIONS, AFTER-TAX SAVINGS
CONTRIBUTIONS AND COMPANY MATCHES........... 30
SECTION 6.3. LIMITATION ON ANNUAL ADDITION............... 34
SECTION 6.4. COMPENSATION LIMITATION..................... 35
ARTICLE VII BENEFITS AND VESTING
SECTION 7.1. BENEFITS.................................... 35
SECTION 7.2. VESTING IN BEFORE-TAX AND AFTER-TAX
SAVINGS ACCOUNTS............................ 36
SECTION 7.3. VESTING IN COMPANY MATCH AND PROFIT-
SHARING ACCOUNTS............................ 36
ARTICLE VIII DISTRIBUTION OF BENEFITS
SECTION 8.1. GENERAL: RECIPIENT AND BENEFIT
COMMENCEMENT DATE........................... 39
SECTION 8.2. IN-SERVICE DISTRIBUTIONS FOR FINANCIAL
HARDSHIP.................................... 42
SECTION 8.3 IN-SERVICE DISTRIBUTIONS OF BEFORE-TAX
SAVINGS CONTRIBUTIONS AFTER AGE FIFTY-
NINE AND ONE-HALF (59 1/2).................. 44
SECTION 8.4. IN-SERVICE DISTRIBUTIONS OF AFTER-TAX
SAVINGS CONTRIBUTIONS....................... 45
SECTION 8.5. METHOD OF DISTRIBUTION OF A
PARTICIPANT'S ACCOUNTS FOLLOWING
SEPARATION FROM SERVICE..................... 45
SECTION 8.6. MAXIMUM PERIOD OF DISTRIBUTIONS............. 46
SECTION 8.7. FACILITY OF PAYMENT......................... 46
SECTION 8.8. SPENDTHRIFT CLAUSE.......................... 47
SECTION 8.9. BENEFICIARY OR BENEFICIARIES................ 48
ARTICLE IX FIDUCIARIES
SECTION 9.1. GENERAL..................................... 49
SECTION 9.2. ALLOCATION OF RESPONSIBILITIES.............. 49
SECTION 9.3. RESTRICTIONS................................ 51
ARTICLE X COMMITTEES
SECTION 10.1. ORGANIZATION OF THE COMMITTEES.............. 52
SECTION 10.2. POWERS OF BENEFITS COMMITTEE................ 53
ii
<PAGE>
SECTION 10.3. POWERS OF INVESTMENT COMMITTEE.............. 54
SECTION 10.4. POWERS OF ADMINISTRATION COMMITTEE.......... 55
SECTION 10.5. RECORDS OF COMMITTEES....................... 56
SECTION 10.6. EXPENSES OF COMMITTEES...................... 56
ARTICLE XI TRUST AND TRUSTEE
SECTION 11.1. TRUST....................................... 57
SECTION 11.2. INVESTMENT DESIGNATIONS..................... 59
ARTICLE XII AMENDMENT AND TERMINATION; OTHER MATTERS
SECTION 12.1. AMENDMENT OF PLAN........................... 60
SECTION 12.2. TERMINATION OF PLAN......................... 61
SECTION 12.3. PLAN MERGER, CONSOLIDATION OR TRANSFER...... 62
SECTION 12.4. CONTINUATION OF PLAN BY SUCCESSOR........... 62
SECTION 12.5. ADOPTION BY OTHER AFFILIATED GROUP
MEMBERS..................................... 63
SECTION 12.6. EFFECT OF ACQUISITIONS...................... 63
SECTION 12.7. TERMINATION OF A PARTICIPATING
EMPLOYER'S PARTICIPATION; OTHER MATTERS..... 63
SECTION 12.8. AUTHORIZATION AND DELEGATION TO THE
BOARD OF DIRECTORS.......................... 65
ARTICLE XIII CLAIMS AND INFORMATION
SECTION 13.1. CLAIMS PROCEDURE............................ 65
SECTION 13.2. AGENT FOR SERVICE OF PROCESS................ 68
SECTION 13.3. COMMUNICATIONS AND REPORTS.................. 68
ARTICLE XIV TOP-HEAVY PROVISIONS
SECTION 14.1. CONSTRUCTION AND DEFINITIONS................ 69
SECTION 14.2. DETERMINATION WHETHER PLAN IS
TOP-HEAVY................................... 71
SECTION 14.3. TOP-HEAVY REQUIREMENTS: CONTRIBUTIONS...... 73
SECTION 14.4. TOP-HEAVY REQUIREMENTS: VESTING............ 75
SECTION 14.5. TOP-HEAVY REQUIREMENTS: SECTION 415
LIMITATIONS ON BENEFITS..................... 76
ARTICLE XV MISCELLANEOUS
SECTION 15.1. LEASED EMPLOYEES............................ 77
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SECTION 15.2. PARTICIPANT LOANS........................... 77
SECTION 15.3. INDEMNIFICATION............................. 78
SECTION 15.4. BENEFITS LIMITED TO PLAN.................... 78
SECTION 15.5. LIMITED EFFECT OF RESTATEMENT............... 78
SECTION 15.6. INSTRUMENT BINDING.......................... 78
</TABLE>
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COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
(as amended and restated effective March 1, 1991)
Statement of Purpose
Collins & Aikman Corporation (the "Company") maintains a profit-sharing
plan known as the Employees' Profit-Sharing Plan of Collins & Aikman Corporation
(the "Plan"). The Company desires to amend the Plan to (i) add a "qualified cash
or deferred arrangement" feature under Section 401(k) of the Internal Revenue
Code of 1986 and related matching employer contributions for certain
participants, (ii) include hourly employees as participants, (iii) change the
name of the Plan to the "Collins & Aikman Corporation Employees' Profit-Sharing
and Personal Savings Plan" and (iv) meet other current needs. The amendments can
best be made by amending and restating the Plan and its accompanying Trust
Agreement with Bankers Trust Company effective March 1, 1991. This instrument
sets forth the amended and restated Plan.
NOW, THEREFORE, the Plan, as heretofore amended, is hereby amended and
restated in its entirety effective March 1, 1991 to consist of the following
Articles I through XV:
1
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ARTICLE I
NAME AND PURPOSE
SECTION 1.1. NAME. The Plan shall be known as the "Collins & Aikman
Corporation Employees' Profit-Sharing and Personal Savings Plan." Prior to March
1, 1991, the Plan was called the "Employees' Profit-Sharing Plan of Collins &
Aikman Corporation."
SECTION 1.2. PURPOSE. The purpose of the Plan is to provide a program
through which Participants may achieve additional financial security during
their working years and in retirement through contributions made on an after-tax
basis, through contributions made on a pre-tax basis pursuant to a "qualified
cash or deferred arrangement" within the meaning of Section 401(k) of the Code,
and through matching and discretionary profit-sharing contributions made by the
Participating Employers. In no event shall the principal or income of the Trust
be used for or diverted to any purpose whatsoever other than the exclusive
benefit of the Participants and their Beneficiaries except as and to the limited
extent otherwise specifically permitted qualified plans and trusts under the Act
and the Code.
ARTICLE II
CONSTRUCTION AND DEFINITIONS
SECTION 2.1. GENERAL.
(a) Construction. Whenever used herein, unless the context clearly
indicates otherwise, a pronoun in the masculine gender
2
<PAGE>
shall include the feminine gender, and the singular shall include the plural and
the plural the singular. The conjunction "or" shall include both the conjunctive
and disjunctive, and the adjective "any" shall mean one or more or all. Article,
section and paragraph headings in the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of the provisions
hereof. If any provision of the Plan shall for any reason be invalid or
unenforceable, the remaining provisions shall nevertheless be valid, enforceable
and fully effective.
(b) Intent. It is the intent that the Plan shall at all
times be a qualified profit-sharing plan under Section 401(a) of the Code and
that the Trust shall at all times be exempt from taxation under Section 501(a)
of the Code, and this instrument shall be construed and interpreted so that the
Plan shall be a qualified plan and the Trust shall be a tax-exempt trust unless
the terms and provisions of this instrument clearly and unequivocally require a
contrary interpretation or construction.
(c) Definitions. Whenever used herein,
unless the context clearly indicates otherwise, the following terms shall have
the following meanings:
(1) Account(s) means such of the following accounts as are maintained
under the Plan for a Participant:
(A) After-Tax Savings Account;
(B) Before-Tax Savings Account;
(C) Company Match Account; and
(D) Profit-Sharing Account.
3
<PAGE>
(2) Act means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and references thereto shall include the valid rules
and regulations issued thereunder.
(3) Adjustment, with respect to an Account, means the debits and/or
credits made from time to time to the Account pursuant to the Plan to reflect
the Account's allocable share of Trust investment gains and losses (realized and
unrealized), investment income and administration expenses, if any. The
Adjustment shall include all "Fund Adjustments" allocated to the Account
pursuant to the Trust Agreement for the Trust.
(4) Administration Committee means the Administration
Committee described in the applicable provisions of Articles
IX and X.
(5) Affiliated Group means the Participating
Employer(s) and each of the following:
(A) a corporation which is a member of the same controlled group of
corporations [within the meaning of Section 1563(a) of the Code, determined
without regard to Section 1563(a)(4) and (e)(3)(C) of the Code] as a
Participating Employer;
(B) a trade or business (whether or not incorporated) controlled by a
Participating Employer or under common control with a Participating
Employer as required by Section 414(c) of the Code;
(C) an organization which is a member of the same affiliated service
group [as defined in Sec tion 414(m) of the Code] as a Participating Em
ployer as required by Section 414(m) of the Code; and
4
<PAGE>
(D) any other entity required to be aggre gated with a Participating
Employer pursuant to Section 414(o) of the Code.
Solely for purposes of applying the Annual Addition limita tions of Section 6.3,
the "Affiliated Group" shall also include any other company which would be
included therein if the phrase "more than 50 percent" were substituted for the
phrase "at least 80 percent" each place it appears in Section 1563(a)(1) of the
Code.
(6) Affiliated Group Compensation of a person for a Plan Year means:
(A) the total "wages" within the meaning of Section 3401(a) of the Code
(for purposes of income tax withholding at the source) paid by the members
of the Affiliated Group to such person during the Plan Year, but determined
without regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed; plus
(B) any amounts that would be included in subparagraph (A) above but
for the application of Section 125, 402(a)(8), 402(h) or 403(b) of the Code
(including Before-Tax Savings Contributions under the Plan).
(7) After-Tax Savings Contribution means a Participant's contribution
to the Plan pursuant to Section 4.4.
(8) After-Tax Savings Account means the account maintained under the
Plan for a Participant representing:
(A) any after-tax voluntary contributions made by the Participant to
his "Participant Contribution Account" under the Prior Plan; and
5
<PAGE>
(B) his After-Tax Savings Contributions from and after March 1, 1991.
(9) Annual Addition, with respect to a Participant for a Plan Year,
means the total of employer contributions, forfeitures and employee
contributions credited for the Plan Year to the Participant's accounts under the
Plan and any other defined contribution plans maintained by any member of the
Affiliated Group. The Annual Addition, however, shall not include any
contribution or forfeiture that may be disregarded under Section 415(c) of the
Code for purposes of determining the "annual addition" thereunder.
(10) Before-Tax Savings Contribution means a Participating Employer
contribution to the Plan for a Participant pursuant to Section 4.2.
(11) Before-Tax Savings Account means the account maintained under the
Plan for a Participant representing his Before-Tax Savings Contributions.
(12) Beneficiary of a Participant means the person(s) or entity(ies)
designated by the Participant pursuant to Section 8.9(a) [or, if applicable,
designated by the Plan pursuant to Section 8.9(b)] to receive such benefits from
an Account of the Participant after the Participant's death as may become
payable to such person(s) or entity(ies) in accordance with the provisions of
the Plan.
(13) Benefits Committee means the Collins & Aikman Benefits Committee
as described in the applicable provisions of Articles IX and X.
(14) Board or Board of Directors means:
6
<PAGE>
(A) the Board of Directors of the Company; and
(B) any committee or committees of the Company's Board of Directors to
which, and to the extent, the Company's Board of Directors has delegated
some or all of its power, authority, duties or responsibilities with
respect to the Plan.
(15) Child Absence of an Affiliated Group employee means the employee's
absence from work with a member of the Affiliated Group (i) which begins after
February 1985 and (ii) which is by reason of the pregnancy of the employee, the
birth of a child of the employee or the placement of a child with the employee
in connection with the employee's adoption of the child or is for purposes of
caring for the child over a period beginning immediately following such birth or
placement of the child. In order for an absence to qualify as a Child Absence,
the reasons therefor and the length thereof must be established by the employee
to the reasonable satisfaction of the Administration Committee at such time and
pursuant to such procedures as the Administration Committee shall establish for
such purpose. While an employee's Child Absence shall entitle the employee to be
credited with Service to the limited extent specifically provided in the Plan,
such Child Absence shall not constitute an authorized leave of absence for any
non- Plan purposes, or entitle the employee to any non-Plan benefits or
reemployment following such Child Absence, except to the extent, if any,
provided under the employment practices and policies of the Affiliated Group
member who
7
<PAGE>
employed the employee when the Child Absence began, applied without regard to
the Plan.
(16) Code means the Internal Revenue Code of 1986, as amended from time
to time, and references thereto shall include the valid rules and regulations
issued thereunder.
(17) Committee means the Administration Committee, the Benefits
Committee or the Investment Committee, as the case may be.
(18) Company means Collins & Aikman Corporation, a Delaware
corporation.
(19) Company Match means a Participating Employer contribution to the
Plan for a Participant pursuant to Section 4.3.
(20) Company Match Account means the account maintained under the Plan
for a Participant representing the Company Matches credited to such account in
accordance with the provisions of the Plan.
(21) Compensation of a Participant for a particular period of time
means:
(i) the total remuneration paid in cash to the Participant during such
period by the Participating Employers for employment with the Participating
Employers, including without limitation base salary and wages, overtime
pay, annual bonuses (contractual, discretionary or otherwise) and
commissions; plus
(ii) any remuneration of the type described in subparagraph (i) above
that would have been paid in cash to the Participant during such period by
the Participating Employers but for a reduction in compensation pursuant to
Article IV or pursuant to Section 125 of the Code.
8
<PAGE>
Compensation, however, shall not include:
(A) any compensation excluded by Section 6.4;
(B) any compensation received for employment as an Excluded Employee;
(C) any compensation paid from the Plan or paid pursuant to any other
qualified employee benefit plan;
(D) any expense allowances or reimbursements, whether or not included
in the taxable income of the Participant and whether or not job-related,
including without limitation expenses and reimbursements with respect to
tuition, moving expenses, automobiles, amounts paid to or on behalf of the
Participant for personal tax and financial planning services and other
similar expense allowances or reimbursements;
(E) any payments or remuneration pursuant to any nonqualified employee
benefit plan, including without limitation any health, welfare or group
insurance benefits, including without limitation worker's compensation
payments; and
(F) any amounts realized from the grant or exercise of any qualified or
nonqualified stock option or stock appreciation right, any other cash
remuneration attributable to the sale, exchange or other disposition of
stock, and any cash remuneration under any phantom or shadow stock plan or
similar arrangement which bases benefits primarily on stock appreciation or
per share earnings or performance.
(22) Contribution Percentage for Before-Tax Savings Contributions, or
for Company Matches and After-Tax Savings Contributions, means, with respect to
a particular group of Participants for a Plan Year, the average of the ratios
9
<PAGE>
(calculated separately for each Participant in the group)
of:
(A) the amount of such contributions actually paid to the Trust on
behalf of such Participants for the Plan Year; to
(B) the Compensation of such Participants for the Plan Year.
Compensation Percentages shall be determined in accordance with Sections 401(k)
and 401(m) of the Code. In such regard (and solely for purposes of determining
Contribution Percentages), a Participant's Compensation shall include any other
Affiliated Group Compensation required to enable the ratios to be calculated on
the basis of "compensation" within the meaning of Section 414(s) of the Code,
and the Administration Committee may modify the definition of "Compensation" in
any manner permitted by Sections 401(k), 401(m) and 414(s) of the Code.
If during the Plan Year or the preceding Plan Year, a Participant is a
"family member" of a Highly Compensated Participant who is a five percent (5%)
owner described in Section 14.1(b)(5)(C) or who is one of the ten (10) Highly
Compensated Participants paid the greatest Affiliated Group Compensation during
such Plan Year, then the Compensation and contributions made to the Plan on
behalf of such Participant and such Highly Compensated Participant shall be
aggregated and treated as if received by a single Highly Compensated Participant
for purposes of calculating Contribution Percentages. As used above, the term
"family member" means the spouse, lineal ancestors and lineal
10
<PAGE>
descendants of a Participant and the spouses of such lineal ancestors and lineal
descendants.
(23) Defined Benefit Plan Fraction, with respect to a Participant for a
Plan Year, means a fraction:
(A) the numerator of which is the Projected Annual Benefit of the
Participant under any defined benefit plans, whether or not terminated,
maintained by any member of the Affiliated Group (determined as of the
close of the Plan Year), and
(B) the denominator of which is the lesser of Amount A or Amount B,
where
Amount A is the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for the Plan Year, and
Amount B is the product of 1.4 multiplied by the amount that may be
taken into account under Section 415(b)(1)(B) of the Code with respect to
the Participant under such defined benefit plans for the Plan Year.
(24) Defined Contribution Plan Fraction, with respect to a Participant
for a Plan Year, means a fraction:
(A) the numerator of which is the sum of the Annual Additions of the
Participant as of the close of the Plan Year, and
(B) the denominator of which is the sum of the lesser of Amount A or
Amount B for the Plan Year and for each prior year of service with the
Affiliated Group, where
Amount A is the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for the Plan Year or prior
year of service [determined without regard to Section 415(c)(6) of the
Code]; and
11
<PAGE>
Amount B is the product of 1.4 multiplied by the amount provided in
Section 6.3(a)(ii) with respect to the Participant for the Plan Year or
prior year of service.
Defined Contribution Plan Fractions shall be determined in accordance with the
transitional rules (to the extent applicable) in (i) Section 415(e)(6) of the
Code (if the Administration Committee elects its application) and (ii) Section
1106(i)(4) of the Tax Reform Act of 1986.
(25) Disability means the permanent and complete inability of a
Participant to engage in any occupation or perform any work for compensation or
profit. Disability shall be determined by the Administration Committee in its
sole discretion on the basis of such medical reports as the Administration
Committee shall deem necessary or desirable using guidelines and standards
similar to those used to determine eligibility for disability insurance payments
under the Social Security Act. Such determination shall be made by the
Administration Committee, however, without regard to any waiting period for
benefits imposed under the Social Security Act or any actual determination
regarding the Participant's disability by the Social Security Administration.
The determination shall be made at the end of any authorized medical leave of
absence, based on the Participant's condition at that time.
(26) Distribution means the payment or distribution to or on behalf of
a Participant or the Participant's Beneficiary of an amount credited to an
Account of the
12
<PAGE>
Participant that may be due in accordance with the provisions of the Plan.
(27) Employee means an individual employed by any
Participating Employer.
(28) Employment Commencement Date means the date on which an individual
first performs an Hour of Service.
(29) Entry Date means January 1, 1992 and each
subsequent January 1.
(30) Excluded Employee means:
(A) any Employee employed on a temporary basis (including without
limitation an Employee hired to perform a job for a short period of time or
on a seasonal basis);
(B) any Employee employed on a permanent basis at a customary work rate
of less than thirty (30) hours per week;
(C) any Employee accruing benefits for current Service under another
tax qualified defined contribution pension or profit sharing plan
maintained by a member of the Affiliated Group;
(D) any Employee employed under an employment agreement or condition of
employment specifically precluding participation in the Plan;
(E) any Employee who is included in a unit of employees covered by a
collective bargaining agreement unless such collective bargaining agreement
provides for the Employee's participation in the Plan; and
(F) any Employee employed by a division or other organizational unit of
a Participating Employer to which the Plan has not been extended.
13
<PAGE>
(31) Forfeiture means any amount credited to a Participant's
Profit-Sharing Account or Company Match Account which is forfeited by
application of the vesting provisions
of the Plan.
(32) Forfeiture Period of Severance means a Period of Severance of
sixty (60) or more months in duration. A Period of Severance that begins with a
Child Absence, however, must be at least seventy-two (72) rather than sixty (60)
months in duration in order to constitute a Forfeiture Period of Severance.
(33) Fund(s) means the separate investment funds of the Trust provided
for in Section 11.1(b).
(34) Highly Compensated Participant, with respect to a Plan Year, means
any Participant who:
(A) was at any time during the Plan Year or the preceding Plan Year a
five percent (5%) owner described in Section 14.1(b)(5)(C);
(B) received Affiliated Group Compensation during the preceding Plan
Year in excess of seventy-five thousand dollars ($75,000) [adjusted for any
cost-of-living increase as permitted by Section 414(q) of the Code];
(C) received Affiliated Group Compensation during the preceding Plan
Year in excess of fifty thousand dollars ($50,000) [adjusted for any
cost-of-living increase as permitted by Section 414(q) of the Code] and was
in the group consisting of the top twenty percent (20%) of employees of the
Affiliated Group when ranked on the basis of Affiliated Group Compensation
paid during the preceding Plan Year;
(D) was at any time during the preceding Plan Year an officer of an
Affiliated Group member
14
<PAGE>
and received Affiliated Group Compensation during the preceding Plan Year
greater than fifty percent (50%) of the amount in effect under Section
415(b)(1)(A) of the Code for the preceding Plan Year, unless fifty (50)
other such officers [or, if less, the number of officers equal to the
greater of three (3) or ten percent (10%) of all employees] have higher
Affiliated Group Compensation; provided, however, if no officer is
described in this subparagraph (D), the officer who received the greatest
Affiliated Group Compensation during the preceding Plan Year shall be a
Highly Compensated Participant; or
(E) would be described in subparagraph (B), (C) or (D) above if the
phrase "during the Plan Year" were substituted for the phrase "during the
preceding Plan Year" each place it appears in said subparagraphs and is one
of the one hundred (100) Affiliated Group employees who received the
greatest Affiliated Group Compensation during the Plan Year.
The determination of which Participants are Highly Compensated Participants
shall be made in accordance with the
provisions of Section 414(q) of the Code. In such regard, the Administration
Committee may in its discretion modify the above definition of Highly
Compensated Participants in any manner permitted by Section 414(q).
(35) Hours of Service means:
(A) each hour for which an Affiliated Group employee is paid, or
entitled to payment, by a member of the Affiliated Group for the
performance of duties;
(B) each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by a member of the Affiliated
Group, such hours to be credited to the employee
15
<PAGE>
for the period of time to which the award or agreement pertains rather than
the period of time in which the award, agreement or payment is made; and
(C) each hour for which credit is required by federal law, including
without limitation federal law governing veterans' reemployment rights, the
nature and extent of any such credit being determined under such law.
In determining an employee's Hours of Service, in no event shall the same hour
be counted more than once. In determining Hours of Service, persons similarly
situated shall be treated alike. For purposes of this Section 2.1(c)(35), the
term "Participating Employer" shall include and refer to any "predecessor
employer" as used in, and to the extent required by, Section 414(a) of the Code,
and solely for purposes of determining an individual's Hours of Service,
employees of such "predecessor employers" shall be credited with Hours of
Service as provided herein with respect to their employment by such "predecessor
employers." To the extent provided in Section 15.1, Leased Employees shall be
credited with Hours of Service with respect to services rendered for members of
the Affiliated Group.
(36) Ineligible Highly Compensated Participant means a
Highly Compensated Participant whose eligibility for Company
Matches could result in the Plan's failure to make Company Matches available to
Salaried Employees on a basis that satisfies the nondiscrimination requirements
of Section 401(a)(4) of the Code for the Plan Year. The Administration Committee
shall determine the number and identity of the
16
<PAGE>
Ineligible Highly Compensated Participants for the Plan Year in its discretion
based on (i) its interpretation and application of the requirements of Section
401(a)(4) of the Code and such other Code provisions as it deems relevant and
(ii) such other factors as it deems appropriate, including convenience and
practicality of administration and compliance with pertinent Code requirements.
To the extent administratively practicable, Participants shall be categorized as
Ineligible Highly Compensated Participants in inverse order of compensation. The
Administration Committee's determination of which Participants are Ineligible
Highly Compensated Participants shall be binding on the affected Participants.
(37) Investment Committee means the Investment Committee described in
the applicable provisions of Articles IX and X.
(38) Investment Manager means any person, firm or corporation (other
than a Trustee or a named fiduciary hereunder):
(A) who has been appointed by the Investment Committee and has been
delegated the power to manage, acquire or dispose of any asset of the Plan;
(B) who is either
(i) a registered investment adviser under the Investment Advisers
Act of 1940,
(ii) a bank, as defined in the Investment Advisers Act of 1940, or
17
<PAGE>
(iii) an insurance company qualified to perform such delegated
services under the laws of more than one (1) state; and
(C) who has acknowledged in writing that said Investment Manager is a
fiduciary with respect to the Plan.
(39) Leased Employee means any individual who is not an employee of any
member of the Affiliated Group but who performs services for an Affiliated Group
member, where:
(A) such services are provided pursuant to an agreement between the
member and any other person (the "leasing organization");
(B) the individual has performed such services for the member, or for
the member and any "related persons" determined under Section 414(n)(6) of
the Code, on a substantially full-time basis for a period of at least one
(1) year; and
(C) such services are of a type historically performed, in the business
field of the member, by employees.
(40) Participant means:
(A) an Employee who has become a Participant pursuant to Article III of
the Plan; or
(B) a former Employee who has an amount credited to any Account of the
former Employee.
(41) Participating Employer(s) mean:
(A) the Company;
(B) those subsidiary, affiliate or associated corporations which adopt
the Plan pursuant to Section 12.5; and
18
<PAGE>
(C) those successor corporations which, pursuant to Section 12.4,
continue the Plan as provided in Section 12.4.
(42) Period of Service means the period beginning on an individual's
Employment Commencement Date or ReEmployment Commencement Date and ending on his
next succeeding Severance from Service Date.
(43) Period of Severance means the period beginning
immediately following an individual's Severance from Service Date and ending
immediately prior to his next Re-Employment Commencement Date (if any).
(44) Permanent Reduction in Force as to a Participant means the
termination of the Participant's employment with a Participating Employer
directly and solely because of:
(A) the sale or permanent shutdown of the Participating Employer's
plant, division or other operating business unit in which he is employed;
or
(B) the permanent elimination of the job he is performing for the
Participating Employer.
There will not be a Permanent Reduction in Force as to a Participant, however,
if:
(i) the Participant remains employed in any capacity by, or otherwise
continues in Service with, any Participating Employer or any other member
of the Affiliated Group;
(ii) the Participant refuses an offer of continued employment with the
Participating Employer, or with any other member of the Affiliated Group,
in a job reasonably comparable in compensation, skill and location to his
existing employment;
19
<PAGE>
(iii) his Accounts are transferred to another qualified plan pursuant
to Section 12.7; or
(iv) his employment terminates because of unsatisfactory job
performance or voluntary resignation.
The Administration Committee shall determine in its sole discretion whether a
Participant's employment terminates because of a Permanent Reduction in Force.
(45) Plan means the Collins & Aikman Corporation
Employees' Profit-Sharing and Personal Savings Plan, as
amended from time to time.
(46) Plan Quarter means the calendar quarters ending on the last day of
March, June, September and December.
(47) Plan Year means:
(A) prior to March 1, 1991, the "plan year" as in effect from time to
time for the Plan;
(B) the Short Plan Year (March 1, 1991 through December 31, 1991); and
(C) thereafter, the twelve (12) consecutive month period ending each
December 31.
(48) Prior Plan means the Plan as in effect on
February 28, 1991.
(49) Profit-Sharing Account means the account maintained under the Plan
for a Participant representing:
(A) the "Company Contributions" credited to the Participant's "Company
Contribution Account" under the Prior Plan; and
(B) the Profit-Sharing Contributions credited to such account from the
after March 1, 1991.
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(50) Profit-Sharing Contribution for a Plan Year means the
Participating Employer contribution to the Plan for the Plan Year pursuant to
Section 5.1.
(51) Projected Annual Benefit of a Participant for a Plan Year means
the Participant's annual benefit (adjusted to the actuarial equivalent of a
straight life annuity if expressed in a form other than a straight life annuity
or a qualified joint and survivor annuity) under a qualified defined benefit
plan, assuming that (i) the Participant will continue employment until the later
of the Participant's current age or normal retirement age under such plan and
(ii) the Participant's compensation for the Plan Year and all other relevant
factors used to determine benefits under such plan will remain constant for all
future Plan Years.
(52) Qualifying Period of Severance of an individual
means a Period of Severance of less than twelve (12)
consecutive months. If, however, an individual has a Child
Absence which is more than twelve (12) months in duration and has a
Re-Employment Commencement Date within twenty-four (24) months of the date the
Child Absence began, the Qualifying Period of Severance shall be equal in length
to the duration of the Period of Severance minus twelve (12) months.
(53) Re-Employment Commencement Date of an individual means the date on
which the individual first performs an Hour of Service following a Period of
Severance.
(54) Retirement means "Retirement" under the Collins & Aikman
Corporation Salaried Employees' Pension Account Plan
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or the Collins & Aikman Corporation Hourly Employees' Pension Account Plan.
(55) Salaried Employee means an Employee who is compensated on the
basis of an agreed amount for each week or month of employment or on the basis
of commissions.
(56) Section 415 Compensation of a person for a Plan Year means the
person's wages, salaries, fees for professional services, and other amounts
received (without regard to whether or not an amount is paid in cash) during the
Plan Year for personal services actually rendered in the course of employment
with any member of the Affiliated Group to the extent that the amounts are
includible in gross income (including, but not limited to, commissions paid
salespersons, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements and other expense allowances under a nonaccountable plan as
described in Treasury Regulation ss.1.62-2(c)). Section 415 Compensation,
however, shall not include:
(A) any amount excluded by Section 6.4;
(B) contributions of any Affiliated Group member to a plan of deferred
compensation (including without limitation the Plan) to the extent that,
before the application of the Code Section 415 limitations to that plan,
the contributions are not included in gross income of the person for the
taxable year in which contributed, or on behalf of the person to a
simplified employee pension described in Section 408(k) of the Code, or any
distributions from a plan of deferred compensation;
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(C) amounts realized (i) from the exercise of a non-qualified stock
option or (ii) when restricted stock (or property) held by the person
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(D) amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; or
(E) other amounts which receive special tax benefits, such as premiums
for group life insurance (to the extent not includible in the person's
gross income), or contributions made by any Affiliated Group member
(whether or not under a salary reduction agreement) towards the purchase of
a Code Section 403(b) annuity contract (whether or not the contributions
are excludable from the person's gross income).
(57) Service means employment by any member of the Affiliated Group and
all other time included in a Period of Service.
(58) Severance from Service Date means the last day of the calendar
month in which an individual's employment with all members of the Affiliated
Group terminates. For such purpose, an individual's employment terminates on the
earlier of:
(A) the date on which the individual quits, retires, is discharged or
dies; or
(B) the first anniversary of the date on which the individual is first
absent from employment (with or without pay) for any other reason (for
example, vacation, holiday, sickness, dis ability, leave of absence or
layoff).
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Notwithstanding the foregoing, an individual who terminates employment with a
member of the Affiliated Group to enter the military service of the United
States shall not experience a Severance from Service Date if (i) the
individual's right to re-employment by the member of the Affiliated Group is
protected by Federal law and (ii) the individual returns to employment with the
member of the Affiliated Group within the period required by law to preserve the
individual's right to re-employment.
(59) Short Plan Year means the period March 1, 1991 through December
31, 1991.
(60) Trust means the trust(s) established and maintained pursuant to
and as a part of the Plan.
(61) Trustee means the trustee(s) of the Trust Agreement(s) maintained
as a part of the Plan.
(62) Valuation Date means (i) the last day of each month and (ii) any
other date that the Investment Committee shall from time to time designate as a
Valuation Date.
(63) Vested means nonforfeitable.
(64) Vesting Service of a Participant means the sum of the
Participant's Periods of Service and Qualifying Periods of Severance. The
determination of Vesting Service shall be subject to the following rules:
(A) Vesting Service shall be expressed as years. In such regard, to
determine Vesting Service, the Participant's Period(s) of Service and
Qualifying Period(s) of Severance (if any) shall be totalled and converted
to years without rounding any fractional months or years up or down. In
determining Vesting Service, in no event shall the same time be counted
more than once. (A
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similar procedure shall be followed for the purposes of determining whether
a Period of Severance is a Qualifying Period of Severance or a Forfeiture
Period of Severance.)
(B) If a Participant has a Forfeiture Period of Severance and
subsequently returns to Service, any Vesting Service after the Forfeiture
Period of Severance shall not be taken into account for purposes of
determining the Vested percentage of the amount credited to the
Participant's Profit- Sharing Account or Company Match Account at the time
of the Forfeiture Period of Severance (or at any time before the Forfeiture
Period of Severance).
(C) If a Participant has a Forfeiture Period of Severance and has no
Vested interest in his Profit-Sharing Account, Company Match Account and
Before-Tax Savings Account, any Vesting Service prior to the Forfeiture
Period of Severance shall be disregarded if the period during which the
Forfeiture Period of Severance continues either equals or exceeds the
Participant's Vesting Service prior to the Forfeiture Period of Severance.
For this purpose, any prior Vesting Service eliminated by a prior
application of this subparagraph or similar provision in the Prior Plan
shall be disregarded.
(D) In no event will a Prior Plan Participant's Vesting Service for
time prior to March 1, 1991 be less than his vesting service determined as
of February 28, 1991 under the terms and provisions of the Prior Plan.
SECTION 2.2. APPLICABLE LAW. The Plan shall be construed, administered,
regulated and governed in all respects under and by the laws of the United
States to the extent applicable and, to the extent such laws are not applicable,
by the laws of the State of North Carolina.
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ARTICLE III
PARTICIPATION
SECTION 3.1. GENERAL. No person shall become a Partici pant unless or
until such person is or becomes an Employee and upon or following satisfaction
of the eligibility requirements set forth in the Plan.
SECTION 3.2. ELIGIBILITY AND COMMENCEMENT OF PARTICIPATION.
(a) Eligibility. All Employees except Excluded Employees are eligible
to participate in the Plan when and as provided in the Plan.
(b) Commencement of Participation: General Rule. An Employee shall
become a Participant on the Entry Date following his Employment Commencement
Date. If on that Entry Date, however, he is not an Employee or he is an Excluded
Employee, he shall become a Participant on the first day thereafter on which he
is an Employee and not excluded under Section 3.4.
(c) Commencement of Participation: Transitional Rules regarding Prior
Plan Participants and Certain Other Employees. Notwithstanding the provisions of
Section 3.2(b), the following rules shall apply:
(i) Participants under Prior Plan. Each Participant in the Prior Plan
shall continue to participate in the Plan from and after March 1, 1991 to
the extent provided in the Plan. Each person who had not become a
Participant in the Prior Plan by February 28, 1991 but had satisfied the
Prior Plan's service requirement for participation (generally, a one year
period of service) by that date shall become a Participant on the first day
on or after March 1, 1991
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on which he is an Employee and not excluded under Section 3.4.
(ii) Employees hired in 1990. A person who did not participate in the
Prior Plan but had an Employment Commencement Date or a Re-Employment
Commencement Date in 1990 shall become a Participant on the first day on or
after March 1, 1991 on which he is an Employee and not excluded under
Section 3.4.
(iii) Special Commencement Date for Hourly Employees. Only Salaried
Employees could participate in the Prior Plan, and no Employee can become a
Participant in the Plan between March 1, 1991 and June 30, 1991 unless and
until he is a Salaried Employee. Effective July 1, 1991, other Employees
may become Participants as well. Therefore, any Employee who would have
become a Participant between March 1, 1991 and June 30, 1991 had he been a
Salaried Employee shall become a Participant on the first day on or after
July 1, 1991 on which he is an Employee and not excluded from participation
under Section 3.4.
SECTION 3.3. ELIGIBILITY OF FORMER PARTICIPANTS. If a person terminates
employment with the Participating Employers after becoming a Participant and
subsequently resumes employment with the Participating Employers as an Employee,
then subject to Section 3.4, the person shall again become a Participant on the
date of such resumption of employment with the Participating Employers as an
Employee.
SECTION 3.4. EXCLUDED EMPLOYEES. An Employee may not become a
Participant while an Excluded Employee. If an Employee becomes an Excluded
Employee after becoming a Participant, no Participant or Participating Employer
contributions shall be made to the Plan with respect to his compensation or
remuneration from the Participating Employers for employment as an Excluded
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Employee, but he shall otherwise continue to participate in the Plan in
accordance with its terms and provisions. In such regard:
(i) His becoming an Excluded Employee shall not constitute a separation
from Service, and he shall continue to be credited with Vesting Service for
his employment as an Excluded Employee as provided in the Plan; and
(ii) His Accounts shall continue to be held, invested and administered
in the Trust (including periodic allocations of the Adjustment) until
Distributed and/or Forfeited following separation from Service when and as
provided in the Plan, and pending distribution or forfeiture he shall have
the Beneficiary and investment designation rights of other Participants.
If his status as an Excluded Employee subsequently ends but he remains an
Employee, he shall resume full participation in the Plan but shall not be
entitled to make or receive any contributions with respect to his compensation
and remuneration as an Excluded Employee.
ARTICLE IV
SAVINGS CONTRIBUTIONS AND COMPANY MATCHES
SECTION 4.1. REDUCTION OF PARTICIPANT COMPENSATION.
(a) General. A Participant may elect to have the Compensation payable
to the Participant for a payroll period reduced and contributed to the Plan as a
Before-Tax Savings Contribution in accordance with the provisions of this
Section. The minimum percentage of reduction that may be elected shall be one
percent (1%), and the maximum percentage of reduction that
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may be elected shall be ten percent (10%). Percentage reductions must be in
whole multiples of one percent (1%). If a Participant elects to reduce
Compensation for a payroll period under this Section, then the Participating
Employers shall make a Before-Tax Savings Contribution to the Plan pursuant to
Section 4.2 for the Participant equal to the amount by which the Participant's
Compensation for the payroll period is reduced. It is intended that the
Compensation reductions and corresponding Before-Tax Savings Contributions shall
be made pursuant to a "qualified cash or deferred arrangement" within the
meaning of Section 401(k) of the Code.
(b) Election by New Participants to Reduce Compensation. An Employee
who is about to become a Participant pursuant to Section 3.2 and who wishes to
elect to have Compensation reduced may make the election by delivering to the
Administration Committee on or before the Employee becomes a Participant a
written direction to make the reduction. The election shall become effective as
soon as administratively feasible after (i) the Employee becomes a Participant
and (ii) the Administration Committee receives the written direction.
(c) Election to Change Compensation Reduction. Subject to applicable
Plan limitations and the rules established by the Benefits Committee from time
to time governing the frequency and effectiveness of changes in Compensation
reduction elections, a Participant may elect to increase [including an increase
from zero (0)] or decrease [including a decrease to zero (0)] prospec tively the
percentage by which the Participant's Compensation is being reduced by
delivering to the Administration Committee a written direction to make such
change.
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<PAGE>
(d) Termination of Election Upon Separation From Service. The
separation from Service of a Participant shall automatically terminate the
Participant's election (if any) to have Compensation reduced pursuant to this
Section that is then in effect, and such termination shall become effective
immediately following the payroll period during which such separation from
Service occurs. A Participant who has separated from Service after having become
a Participant and who has resumed Service as provided in Section 3.3 may make an
election to reduce Compensation pursuant to this Section upon such resumption of
Service and such election shall become effective as soon as administratively
feasible after the Administration Committee receives such written direction.
(e) Transfers Among Participating Employers. If a Participant's
employment is transferred directly from one Participating Employer to another
Participating Employer, the transfer shall not in and of itself change or
terminate any election to reduce Compensation that is then in effect under this
Section with respect to the Participant. The Compensation otherwise payable to
the Participant by the Participant's new Participating Employer shall be reduced
by the same percentage (including zero (0)) as was in effect at the time of such
transfer with respect to the Participant's Compensation from the prior
Participating Employer, unless and until the Participant makes a different
election in accordance with Plan provisions.
(f) Continuation of Election; Change or Termination not Retroactively
Effective. Any Participant election to reduce Compensation, once effective,
shall continue in effect until changed or terminated pursuant to this Section or
by the
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Administration Committee to ensure compliance with Section 6.2 or Section
6.3. Except as required by Section 6.2 to satisfy the limitations on
contributions under Sections 401(k), 401(m) and 402(g) of the Code, no change or
termination of any election to reduce a Participant's Compensation under this
Section shall increase, decrease or otherwise affect any reduction in the
Compensation that became payable to the Participant on or before the date on
which such change or termination becomes effective.
(g) Form and Frequency of Election. Any written directions by a person
to the Administration Committee with respect to any reduction in Compensation
pursuant to this Section shall be on a form approved by the Benefits Committee
for such purpose and shall be made by the person's completing, signing and
filing such form with the Administration Committee in the manner prescribed from
time to time by the Benefits Committee. The Benefits Committee shall establish
rules regarding the frequency with which Participants shall be permitted to
change their elections under this Section and the dates as of which such
elections may become effective, and such rules and related procedures shall be
binding upon the Participants.
(h) Effective Date of this Section. The contribution provisions of this
Section shall become effective July 1, 1991. Consequently, Compensation
reductions and corresponding Before-Tax Savings Contributions for Compensation
payable before that date are not permitted, and the Benefits Committee shall
prescribe the rules and procedures whereby existing and new Participants may
begin Compensation reductions effective July 1, 1991.
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SECTION 4.2. BEFORE-TAX SAVINGS CONTRIBUTIONS. The Participating
Employers shall make a Before-Tax Savings Contribution to the Trust for each
Participant whose Compensation for a payroll period is reduced pursuant to
Section 4.1. The Before-Tax Savings Contribution shall be in an amount equal to
the amount by which the Participant's Compensation for the pay period is so
reduced. The Before-Tax Savings Contribution shall be paid to the Trust no later
than thirty (30) days after the calendar month in which the payroll period ends
and shall be credited to the Before-Tax Savings Account of the Participant.
SECTION 4.3. COMPANY MATCHES.
(a) General. The Participating Employers shall make a Company Match
contribution to the Trust for each Participant for whom a Before-Tax Savings
Contribution is made, if the Participant is eligible for a Company Match
pursuant to Section 4.3(b). The amount of the Company Match shall be fifty
percent (50%) of the Before-Tax Savings Contribution, but disregarding for such
purpose the amount (if any) by which the Before-Tax Savings Contribution exceeds
three percent (3%) of the Participant's Compensation for the payroll period to
which the Before-Tax Savings Contribution relates. The Company Match shall be
credited to the Participant's Company Match Account.
(b) Participants Eligible for Company Match. A Participant shall be
eligible for a Company Match with respect to a Before-Tax Savings Contribution
only if the following conditions are satisfied:
(i) the Participant is a Salaried Employee for the payroll period to
which the Before-Tax Savings Contribution relates; and
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(ii) the Participant is not an Ineligible Highly Compensated
Participant for the Plan Year that includes that payroll period.
(c) Deemed Company Match for March through June 1991. The Participating
Employer shall make the contributions described below to the Trust for each
Participant between March 31, 1991 and June 30, 1991 who would have been
eligible under Section 4.3(b) for Company Matches had Before-Tax Savings
Contributions been permitted under the Plan during that time:
(i) a contribution equal to four and one-half percent (4 1/2%) of the
Participant's Compensation for the month of March 1991; and
(ii) contributions equal to one and one-half percent (1 1/2%) of the
Participant's Compensation for the months of April, May and June 1991,
respectively.
Such contributions shall be credited to the Participant's Company Match Account.
SECTION 4.4. AFTER-TAX SAVINGS CONTRIBUTIONS.
(a) General. A Participant may elect to make After-Tax Savings
Contributions to the Trust for a payroll period in accordance with the
provisions of this Section. The minimum percentage that may be elected shall be
one percent (1%), and the maximum percentage of reduction that may be elected
shall be ten percent (10%). Percentage reductions must be in whole multiples of
one percent (1%). All After-Tax Savings Contributions shall be credited to the
contributing Participant's After-Tax Savings Account, must be made out of his
own funds (and not by a reduction in Compensation pursuant to Section 401(k) of
the Code), and shall be made only by payroll deduction.
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(b) Form and Frequency of Elections. Any written direc tions by a
person to the Administration Committee with respect to any After-Tax Savings
Contributions pursuant to this Section shall be on a form approved by the
Benefits Committee for such purpose and shall be made by the person's
completing, signing and filing such form with the Administration Committee in
the manner prescribed from time to time by the Benefits Committee. The Benefits
Committee shall establish rules regarding elections under this Section, and such
rules and related procedures shall be binding on the Participants.
ARTICLE V
PROFIT-SHARING CONTRIBUTIONS
SECTION 5.1. AMOUNT OF PROFIT-SHARING CONTRIBUTION. The Participating
Employers, in addition to their other contributions to the Plan, may make a
Profit-Sharing Contribution to the Trust for the Plan Year in such amount (if
any) as shall be determined by the Board of Directors in its sole discretion.
The Profit- Sharing Contribution shall be paid to the Trust by such date after
the end of the Plan Year as the Board of Directors shall determine, so that the
Profit-Sharing Contribution may be deducted in timely fashion on the Federal
income tax return(s) of the Participating Employers.
SECTION 5.2. PARTICIPANTS ELIGIBLE FOR ALLOCATION. The Participants
whose Profit-Sharing Accounts shall share in the allocation of the
Profit-Sharing Contribution (if any) for the Plan Year pursuant to Section 5.3
shall be:
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(a) each Participant who is actively employed by
a Participating Employer on the last day of the Plan
Year;
(b) each Participant who on the last day of the Plan Year is
on an authorized (paid or unpaid) leave of absence or lay-off from
active employment with a Participating Employer that began during the
Plan Year; and
(c) each Participant whose separation from Ser-
vice occurred during the Plan Year as a result of
Retirement, Disability, death or a Permanent Reduction
in Force.
SECTION 5.3. ALLOCATION OF PROFIT-SHARING CONTRIBUTION AND FORFEITURES.
(a) General. The Profit-Sharing Contribution (if any) for the Plan Year
and any Forfeitures allocable under this Section for the Plan Year (that is,
certain Forfeitures arising from Profit-Sharing Accounts) shall be allocated to
the Profit-Sharing Accounts of the Participants who are eligible to share in
such allocation pursuant to Section 5.2. Each such Participant's Profit-Sharing
Account shall be credited with that portion of the Profit-Sharing Contribution
and Forfeitures as shall bear the same ratio to the Profit-Sharing Contribution
and Forfeitures as the Compensation of the Participant for the Plan Year bears
to the aggregate Compensation for the Plan Year of all such Participants. The
allocation provisions of this Section 5.3(a) shall apply irrespective of the
number of Participating Employers, and therefore if there are multiple
Participating Employers, the Profit-Sharing Contribution and Forfeitures shall
be allocated as a whole among all the Participants eligible to share in such
allocation.
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(b) Short Plan Year. In applying the provisions of Section 5.3(a) to
the Profit-Sharing Contribution and Forfeiture allocation for the Short Plan
Year, each Participant's Compensation shall mean his Compensation for the
calendar year January 1, 1991 through December 31, 1991 (irrespective of whether
he was a Participant throughout that entire calendar year).
ARTICLE VI
CONTRIBUTION SOURCES, LIMITATIONS AND RESTRICTIONS
SECTION 6.1. SOURCE, ALLOCATION AND DEDUCTIBILITY OF PARTICIPATING
EMPLOYER CONTRIBUTIONS. While the Plan is a "profit-sharing plan" for purposes
of Section 401 of the Code, each Participating Employer's contributions to the
Plan for any Plan Year, including their contributions under Articles IV and V,
are not contingent upon its having current or accumulated net income or net
profits. The Company in its sole discretion may make all such contributions on
behalf of the Participating Employers. In that event, each other Participating
Employer shall appropriately reimburse the Company for its proportionate share
of such contributions on a regular and periodic basis. In no event shall the
Participating Employers' contributions to the Plan under Articles IV and V for
any Plan Year exceed the amount which can be properly deducted under the Code by
the Participating Employers in computing taxable income under the Code.
SECTION 6.2. LIMITATIONS ON BEFORE-TAX SAVINGS CONTRIBU TIONS,
AFTER-TAX SAVINGS CONTRIBUTIONS AND COMPANY MATCHES.
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(a) Limitations. Notwithstanding anything to the contrary contained in
the Plan, Before-Tax Savings Contributions, After-Tax Savings Contributions and
Company Matches shall be subject to the following limitations:
(i) The Before-Tax Savings Contributions paid to the Trust for
a Participant for any taxable year of the Participant shall not exceed
seven thousand dollars ($7,000) (or such greater amount as may be
permitted for the taxable year pursuant to cost-of-living adjust ments
under Section 402(g) of the Code). For such purpose, a Before-Tax
Savings Contribution shall be deemed to be for a Participant's taxable
year if made on account of a reduction in Compensation pursuant to
Article IV that would otherwise have been includable in the
Participant's gross taxable income for the taxable year.
(ii) For each Plan Year the Contribution Percentage for Before-Tax
Savings Contributions shall satisfy either the Primary Test or the
Alternative Test below.
(iii) For each Plan Year the Contribution Percentage for After-Tax
Savings Contributions and Company Matches shall satisfy either the
Primary Test or the Alternative Test below.
The "Primary Test" is satisfied if the Contribution Percentage for the
contributions being tested (that is, for Before-Tax Savings Contributions or for
After-Tax Savings Contributions and Company Matches, as the case may be) of the
group of Highly Compensated Participants is not more than the Contribution
Percentage for such contributions of all other Participants multiplied by 1.25.
The "Alternative Test" is satisfied if the Contribution Percentage for the
contributions being tested of the group of Highly Compensated Participants (A)
does not exceed the Contribution Percentage for such contributions of all other
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Participants by more than two (2) percentage points and (B) is not more than the
Contribution Percentage for such contributions of all other Participants
multiplied by two (2). If in addition to the Plan any Highly Compensated
Participant participates in any other qualified plan to which contributions of
the same type as those being tested are made, all such contributions shall be
aggregated as required by the Code for purposes of applying the above
limitations. The limitations of subparagraphs (i), (ii) and (iii) above shall be
coordinated with one another and with any other plans maintained by any member
of the Affiliated Group that are subject to such limitations as required or
permitted by the Code to restrict multiple use of the Alternative Test, permit
appropriate aggregation of plans and contributions and otherwise appropriately
limit contributions.
(b) Implementation of Limitations. The Administration Committee from
time to time shall review the elections of Participants under Section 4.1 and
Section 4.4 to ensure compliance with the limitations of Section 6.2(a). To
ensure compliance, the Administration Committee may require Highly Compensated
Participants to reduce prospectively the amount by which their Compensation is
being reduced pursuant to Section 4.1 and/or their After-Tax Savings
Contributions under Section 4.4 in such portions, and with respect to such
payroll periods, as the Administration Committee shall specify. In addition, if
on account of administrative error or otherwise any limitation of Section 6.2(a)
may be exceeded because of Before-Tax Savings Contributions, After-Tax Savings
Contributions or Company Matches already paid or payable to the Trust, the
Administration Committee shall cause to be taken such of the following actions
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as and to the extent it determines necessary so that the limitation shall be
satisfied:
(i) As to the Section 6.2(a)(i) ($7,000) limitation on Before-Tax
Savings Contributions:
distribute to the Participant the Before-Tax Savings Contributions for
the Participant's taxable year that exceed the limitation of Section
6.2(a)(i) no later than the April 15 following the close of such
taxable year.
(ii) As to the Section 6.2(a)(ii) (Contribution Percentage) limitation
on Before-Tax Savings Contributions:
permit Highly Compensated Participants to elect to have their
Before-Tax Savings Contributions for the Plan Year that exceed the
limitation of Section 6.2(a)(ii) treated as distributed and then
recontributed to the Plan as After-Tax Savings Contributions; and
distribute to Highly Compensated Participants their respective portions
of the excess Before-Tax Savings Contributions within two and one-half
(2 1/2) months after the close of such Plan Year, if practical, and in
no event later than by the end of the next Plan Year.
(iii) As to the Section 6.2(a)(iii) (Contribution Percentage)
limitation on After-Tax Savings Contributions and Company Matches:
distribute to Highly Compensated Participants their respective portions
of the After-Tax Savings Contributions and Company Matches for the Plan
Year that exceed the limitation of Section 6.2(a)(iii) within two and
one-half (2 1/2) months after the close of such Plan Year, if
practical, and in no event later than by the end of the next Plan Year.
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To the extent permitted or required by the Code, the Administration Committee
may cause to be forfeited, or distributed to Highly Compensated Participants,
any Company Matches attributable to any Before-Tax Savings Contributions that
are distributed or recharacterized as provided in subparagraph
(ii) above.
For purposes of subparagraphs (ii) and (iii) above, excess
contributions are the amount by which (1) the aggregate Before- Tax Savings
Contributions or the aggregate Company Matches and After-Tax Savings
Contributions (as the case may be) actually paid to the Trust on behalf of the
Highly Compensated Participants for the Plan Year exceed (2) the maximum amount
of such contributions permitted under the applicable limitation of Section
6.2(a) (determined by reducing contributions made on their behalf in order of
the actual individual contribution percentages, beginning with the highest of
such percentages). Any Distribution of an excess contribution shall include any
Trust gains or other income allocable to the distributed con tribution while
held in the Trust (but need not include Trust gains and income for the Plan Year
in which distributed except to the extent required by the Code). The
determinations and actions of the Administration Committee under this Section
6.2, including without limitation the identification and disposition of excess
contributions, shall be consistent with the requirements of Sections 401(k),
401(m) and 402(g) of the Code and shall be binding and conclusive on the
affected Participants in all respects. No decrease pursuant to this Section 6.2
in the amount by which Compensation is being or has otherwise been reduced by a
Participant shall entitle the Participant to elect to reduce
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Compensation other than on a prospective basis in accordance with
all of the restrictions, limitations and other terms and condi
tions of the Plan.
SECTION 6.3. LIMITATION ON ANNUAL ADDITION.
(a) Limitation. Notwithstanding anything to the contrary contained in
the Plan, in no event shall the Annual Addition with respect to a Participant
for a Plan Year exceed the least of:
(i) thirty thousand dollars ($30,000) (or, if greater, one-fourth (1/4)
of the dollar limitation in effect for the Plan Year under Section
415(b)(1)(A) of the Code);
(ii) twenty-five percent (25%) of the Participant's Section 415
Compensation for the Plan Year; or
(iii) the maximum amount which will not cause the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction for the Plan Year to exceed 1.0.
The amount provided in subparagraph (i) above for the Short Plan Year, however,
shall be twenty-five thousand dollars ($25,000).
(b) Effect on Participation. In the event that the provisions of the
Plan would otherwise cause the Annual Addition with respect to a Participant for
a Plan Year to exceed the limitation provided in Section 6.3(a), then the Annual
Addition shall be reduced to the maximum amount permitted by Section 6.3(a) by:
(i) returning to the Participant as soon as practicable any After-Tax
Savings Contributions and to the extent permitted by the Code any
Before-Tax Savings Contributions with respect to a Plan Year, adjusted for
earnings and losses;
(ii) limiting the Participant's benefits under any defined benefit plan
maintained by any member of the Affiliated Group in accordance with the
terms thereof;
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(iii) limiting the Participant's contributions or benefits under any
other defined contribution plan maintained by any member of the Affiliated
Group in accordance with the terms thereof; and
(iv) reducing the Company Matches, Before-Tax Savings Contributions and
Profit-Sharing Contributions otherwise allocable to the Participant's
Accounts for the Plan Year.
Any contribution that is not allocated to a Participant's Account by reason of
subparagraph (iv) above shall be held in the Trust in a suspense account and be
used as soon as practicable to reduce future Participating Employer
contributions during the next Plan Year (and succeeding Plan Years, as
necessary).
SECTION 6.4. COMPENSATION LIMITATION. Notwithstanding any contrary
provision of the Plan, in no event shall the amount of a Participant's
compensation taken into account under the Plan for any Plan Year exceed two
hundred thousand dollars ($200,000) [or such greater amount as may be permitted
for such Plan Year pursuant to cost-of-living adjustments under Section
401(a)(17) of the Code]. In the event a Participant is (i) a five percent (5%)
owner described in Section 14.1(b)(5)(C) or (ii) one of the ten (10) Highly
Compensated Participants paid the greatest Affiliated Group Compensation during
the Plan Year, then this limitation shall apply to the combined compensation of
the Participant and any of his "family members" who are participating in the
Plan, and shall be prorated among them in proportion to their respective
compensation determined without regard to this limitation. As used in this
Section, a "family member" means a Participant's (i) spouse and (ii) lineal
descendants who have not
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attained nineteen (19) years of age before the end of the Plan Year.
ARTICLE VII
BENEFITS AND VESTING
SECTION 7.1. BENEFITS. The benefits to be provided by the Plan are not
fixed or determinable. Instead, each Participant's benefits are based solely on
the Vested amounts (if any) credited to the Participant's Accounts, as adjusted
from time to time to reflect the Adjustment and other debits and credits
pursuant to the Plan.
SECTION 7.2. VESTING IN BEFORE-TAX AND AFTER-TAX SAVINGS ACCOUNTS. The
amounts to the credit of a Participant in the Participant's Before-Tax Savings
Account and After-Tax Savings Contribution Account, as revalued to reflect the
Adjustment, shall at all times be fully Vested.
SECTION 7.3. VESTING IN COMPANY MATCH AND PROFIT-SHARING ACCOUNTS.
(a) Vesting on Account of Death, Retirement, Disability or Permanent
Reduction in Force. Upon the first to occur of a Participant's death while in
Service, attainment of age sixty-five (65) while in Service, Retirement, or
separation from Service by reason of Disability or a Permanent Reduction in
Force, the amounts to the credit of the Participant in the Participant's Company
Match Account and Profit-Sharing Account shall become fully Vested.
(b) Vesting in Other Situations. If a Participant separates from
Service other than by reason of the Participant's
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death, Retirement, Disability or a Permanent Reduction in Force, only the Vested
portion of the Participant's Company Match Account and Profit-Sharing Account,
determined under the applicable vesting schedule below, will be available for
Distribution to the Participant (or, if deceased, the Participant's
Beneficiary). The portion of the Accounts that are not Vested shall become
Forfeitures as hereinafter provided.
The following vesting schedule applies to the Company Match Accounts
and the Profit-Sharing Accounts of Participants who have any Hours of Service
before July 1, 1991:
Years of
Vesting Service Vested Percentage
less than 2 ............ 0%
2 ............ 40%
3 ............ 60%
4 ............ 80%
5 or more ............ 100%
The following vesting schedule applies to the Company Match Accounts
and the Profit-Sharing Accounts of Participants who have no Hours of Service
before July 1, 1991:
Years of
Vesting Service Vested Percentage
less than 5 ............ 0%
5 or more .............. 100%
(c) Time of Vesting Schedule Application and Forfeiture Determination.
In any application of the applicable vesting schedule under Section 7.3(b) to a
Participant's Company Match Account or Profit-Sharing Account (as the case may
be), the Vesting Service of the Participant shall be determined as of the date
of such application of the vesting schedule. The Vested
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portion of such Account as of any date shall be the amount determined by
applying the Vested percentage determined from the applicable vesting schedule
to the amount credited to such Account. If the Participant's Vested percentage
is one hundred percent (100%) in his Company Match Account and Profit-Sharing
Account at the time the Participant separates from Service, the Participant
shall be fully Vested in the total amount credited to the Accounts. If such
Participant's Vested percentage is less than one hundred percent (100%) at the
time the Participant separates from Service, the following rules shall apply:
(i) Forfeiture of Non-Vested Portion. The non- Vested portion of the
amounts to the credit of the Participant's Accounts as of the Valuation
Date coinciding with or next following the first anniversary of the date of
his separation from Service shall become a Forfeiture on that Valuation
Date and shall be reallocated as of the end of the Plan Year that contains
that Valuation Date as provided in subparagraph (ii) below. Pending
reallocation, the Forfeiture shall be held in an unallocated suspense
account and periodically revalued to reflect the Adjustment.
(ii) Reallocation of Forfeitures. The Forfeitures arising during a Plan
Year pursuant to subparagraph (i) above (as revalued as therein provided)
shall be (a) reallocated under Section 7.3(d), to the extent required by
Section 7.3(d), and (b) to the extent determined by the Administration
Committee applied to the payment of Plan administrative expenses. To the
extent not so used:
Forfeitures arising from Profit-Sharing Accounts shall be reallocated
under Section 5.3; and
Forfeitures arising from Company Match Accounts shall be reallocated to
the Company Match Accounts of the following described Participants in
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proportion to the total Company Matches allocated to their respective
Company Match Accounts for the Plan Year under Section 4.3. The
Participants whose Company Match Accounts share in this reallocation
shall be the Participants whose Company Match Account balances remain
in the Trust at the end of the Plan Year, and the Participants whose
Company Match Accounts were paid out during the Plan Year because of
death, Disability, Retirement, Permanent Reduction in Force or
Financial Hardship (under Section 8.2).
(d) Restoration of Forfeitures in Certain Cases. If a Participant
separates from Service and prior to experiencing a Forfeiture Period of
Severance forfeits all or a portion of the Participant's Company Match Account
or Profit-Sharing Account pursuant to Section 7.3(c), the amount credited to the
Accounts that became a Forfeiture pursuant to Section 7.3(c) together with
interest as provided in subparagraph (iii) below (collectively, the "Forfeited
Amount") shall be recredited to the Accounts only if the Participant resumes
Service prior to experiencing a Forfeiture Period of Severance and only as
hereinafter provided:
(i) Forfeiture Restoration. The Forfeited Amount shall be recredited to
the appropriate Accounts as of the Valuation Date on the last day of the
Plan Year in which such resumption of Service occurs (unless the
Participant has again separated from Service and without any additional
Vested interest).
(ii) Source of Restored Forfeitures. Any Forfeited Amount recredited
to a Participant's Profit-Sharing Account or Company Match Account as of a
Valuation Date pursuant to subparagraph (i) above shall be made from the
Forfeitures of such type of Account allocable as of such Valuation Date or
from a contribution by the Participating Employers for such purpose, as
determined by the Administration Committee.
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(iii) Forfeited Amount Includes Interest. A Forfeited Amount recredited
to a Participant's Profit-Sharing Account or Company Match Account as
hereinabove provided shall include interest, credited at such rate(s) and
in such manner as the Administration Committee shall from time to time
determine in its discretion, for the period of time that elapsed between
the date of Forfeiture and the date of recrediting.
(e) Accounting Following Forfeiture. The Administration Committee and
the Trustee shall cause to be kept such sub-accounts and other records with
respect to the Participant's Accounts as are required by this Section to
properly account for forfeitures of, and the restoration of prior forfeitures
to, the Accounts of Participants, including appropriate usage of the methods set
forth in Treasury Regulation ss.1.411(a)-7(d)(5) (or its successor) for
distributions from Accounts that are not fully (100%) Vested and subsequent
increases in the Vested percentages therein.
ARTICLE VIII
DISTRIBUTION OF BENEFITS
SECTION 8.1. GENERAL: RECIPIENT AND BENEFIT COMMENCEMENT DATE.
(a) Recipient of Distribution. Distribution during the lifetime of a
Participant shall be made only to or for the Participant. If the Participant
dies before Distribution of the entire Vested amounts credited to his Accounts,
Distribution of any remaining Vested amounts shall be made only to the deceased
Participant's Beneficiary. If the Beneficiary survives the Participant but dies
before Distribution has been made, then
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Distribution shall be made to the deceased Beneficiary's estate. Notwithstanding
the foregoing, Distribution may be made to others on behalf of a minor or
incompetent Participant or Beneficiary as provided in Section 8.7 and shall be
made in accordance with Qualified Domestic Relations Orders as provided in
Section 8.8.
(b) Benefit Commencement Date: Participant in Service. While a
Participant is in Service, Distributions from the Participant's Accounts may be
made only:
(A) pursuant to Section 6.2 or Section 6.3 to comply with contribution
limitations;
(B) pursuant to Section 8.1(c)(ii) for a Participant over age seventy
and one-half (70 1/2);
(C) pursuant to Section 8.2 or Section 8.3 from the Before-Tax Savings
Account for Financial Hardship or after age fifty-nine and one-half (59
1/2); or
(D) pursuant to Section 8.4 from the After-Tax Savings Account.
(c) Benefit Commencement Date: Participant not in Service. The
commencement of Distribution to a Participant who is not in Service or (if the
Participant is deceased) to the Participant's Beneficiary shall be subject to
the requirements of Section 8.1(d) and (subject to those requirements) to the
following rules:
(i) Benefit Commencement Date following Retirement, Disability or
Permanent Reduction in Force. Distribution to a Participant who separates
from Service on account of Retirement, Disability or a Permanent Reduction
in Force may be made during such month that begins after the separation
from Service as the Participant specifies to the Administration Committee.
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(ii) Benefit Commencement Date following other Separation from Service:
Pre-July 1991 Participants. If a person who had become a Participant by
June 30, 1991 separates from Service for a reason other than Retirement,
Disability or a Permanent Reduction in Force, Distribution to the
Participant may be made during such month that begins after the separation
from Service as the Participant specifies to the Administration Committee.
(iii) Benefit Commencement Date following other Separation from
Service: Other Participants. If a person who had not become a Participant
by June 30, 1991 separates from Service for a reason other than Retirement,
Disability or a Permanent Reduction in Force, Distribution to the
Participant may be made during such month as the Participant specifies to
the Committee that begins after the the earlier of (A) the first
anniversary of the separation from Service or (B) the date the Participant
attains age fifty-five (55).
(iv) Benefit Commencement Date for Beneficiaries. Distribution to the
Beneficiary of a deceased Participant may be made during such month that
begins after the Participant's death as the Beneficiary specifies to the
Administration Committee.
(v) Mandatory Benefit Commencement Date for Certain Small Accounts.
Notwithstanding subparagraphs (i) through (iv) above, to the extent
permitted by the Act and the Code, if the Participant's total Vested
interest in the Plan does not exceed three thousand five hundred dollars
($3,500), Distribution to the Participant or (if the Participant is
deceased) to the Participant's Beneficiary shall be made in a single cash
payment during or as soon as administratively practicable after the
earliest month during which Distribution could commence under subparagraph
(i), (ii), (iii) or (iv) (whichever shall apply).
All communications with the Administration Committee regarding the timing and
method of Distribution shall be in
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writing and in accordance with such
procedures as the Benefits Committee shall establish. Distribution shall in no
event be made prior to such date as is administratively practicable.
(d) Latest Benefit Commencement Date.
(i) Latest Benefit Commencement Date for Participants: Age 65 Rule.
Distribution to a Participant who separates from Service on or before age
sixty-five (65) shall be made no later than the sixtieth (60th) day after
the close of the Plan Year in which the Participant attains age sixty-five
(65). Distribution to a Participant who separates from Service after age
sixty-five (65) shall be made as soon as administratively practicable after
separation from Service (and in no event later than the sixtieth (60th) day
after the end of the Plan Year in which the separation from Service
occurred), unless the Participant can and does elect such later payment
date as may be permitted by the rules and procedures established by the
Benefits Committee for such Participants.
(ii) Latest Benefit Commencement Date for Participants: Age 70 1/2
Rule. Distribution to a Participant shall be made no later than the April 1
of the calendar year following the calendar year in which the Participant
attains age seventy and one-half (70 1/2). For a Participant attaining that
age before January 1, 1988, however, Distributions to the Participant shall
be made no later than the April 1 following the calendar year in which the
Participant separates from Service with the Participating Employers (if
later than the date provided by the preceding sentence), if the Participant
has not been a Key Employee within the meaning of Section 14.1(b)(5)(C) at
any time during the Plan Year ending in the calendar year in which such
Participant attained age sixty-six and one-half (66 1/2) or during any
subsequent Plan Year.
(iii) Latest Benefit Commencement Date for Beneficiaries. Distribution
to a Participant's Beneficiary shall be made as soon as administratively
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practicable following the death of the Participant (and in no event later
than five (5) years after the death of the Participant). If the Participant
dies before attaining sixty-five (65) years of age and the Participant's
spouse is the Participant's Beneficiary, however, then at the election of
such spouse the Distribution may be deferred until the date on which the
Participant would have attained age sixty-five (65).
SECTION 8.2. IN-SERVICE DISTRIBUTIONS FOR FINANCIAL HARDSHIP.
(a) General. A Distribution may be made to a Participant who is in
Service to the extent necessary to satisfy a Financial Hardship (as hereinafter
defined). A Distribution pursuant to this Section may be made only from the
Participant's Before-Tax Savings Account but may include no portion thereof
attributable to the Adjustment. To receive a Financial Hardship Distribution the
Participant must establish to the Administration Committee's satisfaction (i)
the existence of the Financial Hardship and (ii) the necessity of a Distribution
to satisfy the Financial Hardship, and in such regard the Participant shall
provide the Administration Committee with such pertinent information as the
Administration Committee may request. For purposes of this Section, a
Participant's "Financial Hardship" means
(A) expenses for medical care described in Section 213(d) of the Code
incurred by the Participant or the Participant's spouse or dependents (as
defined in Section 152 of the Code);
(B) the payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Participant or the
Participant's spouse, children or dependents;
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(C) costs directly related to the purchase of a principal residence for
the Participant (excluding mortgage payments);
(D) payments needed to prevent the Participant's eviction from the
Participant's principal residence or the foreclosure on the mortgage on
that principal residence; or
(E) an immediate and heavy financial need of the Participant caused by
or resulting from an extraordinary, unforseen or catastrophic event
affecting the Participant or the Participant's family that the
Administration Committee determines to be a "Financial Hardship."
To establish that the Distribution is necessary to satisfy the Financial
Hardship, the Participant must demonstrate to the Administration Committee's
satisfaction that the amount of the requested Distribution will not exceed the
amount necessary to satisfy the Financial Hardship. A Distribution to a
Participant under this Section shall not be permitted to the extent the
Participant may receive (i) a Distribution pursuant to Section 8.3 or Section
8.4 or (ii) any (non-hardship) distributions or nontaxable loans under any plan
maintained by any Affiliated Group member. All Distributions from a
Participant's Before-Tax Savings Account under this Section shall comply with
the provisions of Section 401(k) of the Code regarding distributions on account
of "hardship." Any Distribution under this Section shall be made in a single
cash payment as soon as administratively feasible after the Administration
Committee's determination of the existence of a Financial Hardship and the
necessity of a Distribution to satisfy the Financial Hardship. Any request for
Distribution under this Section must be made in
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writing and in accordance with such rules and procedures as the Benefits
Committee shall establish for such purpose.
(b) Penalty for Financial Hardship Distributions. The following
restrictions shall apply to a Participant who receives a Financial Hardship
Distribution from the Participant's Before- Tax Savings Account pursuant to this
Section:
(i) Before-Tax Savings Contributions for the Participant shall be
suspended for the twelve (12) month period following receipt of the
Distribution, and the Participant's After-Tax Savings Contributions to the
Plan and elective and employee contributions to any other qualified and
non-qualified plans (other than health or welfare plans) maintained by any
Affiliated Group member shall also be suspended for such period; and
(ii) the maximum amount of Before-Tax Savings Contributions permitted
by Section 6.2(a)(i) for the Participant's taxable year that follows the
taxable year of the Distribution shall be reduced by the amount of the
Participant's Before-Tax Savings Contributions (if any) for the taxable
year of the Distribution.
SECTION 8.3 IN-SERVICE DISTRIBUTIONS OF BEFORE-TAX SAVINGS
CONTRIBUTIONS AFTER AGE FIFTY-NINE AND ONE-HALF (59 1/2).
(a) General. A Participant who has attained age fifty-nine and one-half
(59 1/2) may receive while in Service a Distribution of all or any part of the
amount to the credit of the Participant in the Participant's Before-Tax Savings
Account. Any request for Distribution under this Section must be made in writing
and in accordance with such rules and procedures as the Benefits Committee shall
establish for such purpose.
(b) Method of Distribution. Any Distribution pursuant to this Section
shall be made in a single cash payment.
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SECTION 8.4. IN-SERVICE DISTRIBUTIONS OF AFTER-TAX SAVINGS
CONTRIBUTIONS.
(a) General. A Participant may receive while in Service a Distribution
of all or any part of the amount to the credit of the Participant as of such
Valuation Date in the Participant's After-Tax Savings Contribution Account. Any
request for Distribution under this Section must be made in writing and in
accordance with such rules and procedures as the Benefits Committee shall
establish for such purpose.
(b) Method of Distribution. Any Distribution pursuant to this Section
shall be made in a single cash payment.
SECTION 8.5. METHOD OF DISTRIBUTION OF A PARTICIPANT'S ACCOUNTS
FOLLOWING SEPARATION FROM SERVICE.
(a) Method of Distribution to Participant. Subject to the provisions of
Section 8.1 regarding commencement of Distributions, Distribution of the Vested
amounts credited to a Participant's Accounts, as revalued to reflect the
Adjustment, shall be made to the Participant as follows:
(i) Normal method. Except as provided in subparagraph (ii) below, the
Distribution shall be made in a single cash payment.
(ii) Certain mandatory payments after age 70 1/2. If Distribution must
commence to a Participant who is in Service because of the requirements of
Section 8.1(c)(ii) (regarding Participants who have attained age 70 1/2),
Distribution shall be made to the Participant as long as he is in Service
in installments as described in Section 8.6. Once the Participant separates
from Service, the remaining amounts credited to his Accounts shall be paid
to him as soon as practicable in a single cash payment. If the Participant
dies before Distribution is completed,
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Distribution shall be made to his Beneficiary when and as provided in this
Article.
(b) Method of Distribution to Beneficiary. If a Participant dies before
Distribution has been made of the entire Vested amounts credited to the
Participant's Accounts, then subject to the provisions of Section 8.1 and
Section 8.6 regarding the commencement and duration of Distributions,
Distribution of the remaining Vested amounts, as revalued to reflect the
Adjustment, shall be made to the Beneficiary of the deceased Participant in a
single cash payment.
SECTION 8.6. MAXIMUM PERIOD OF DISTRIBUTIONS. The installment method of
Distribution to a Participant under Section 8.5(a) shall provide for
Distribution over a period of time that is either (at the Participant's
election) the life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and the Participant's Beneficiary. If the
Beneficiary is not the Participant's spouse, however, payments shall satisfy the
minimum distribution incidental benefit requirement of Section 401(a)(9)(G) of
the Code and Proposed Treasury Regulationss.1.409(a)(9)-2 (or its successors).
For purposes of this Section, the Administration Committee shall use the unisex
life expectancy multiples in Treasury Regulation ss.1.72-9 and life
expectancy(ies) shall not be redetermined.
SECTION 8.7. FACILITY OF PAYMENT.
(a) Payments to or for the Benefit of Minors or Incom petents. In the
event that any amount becomes payable under the provisions of the Plan to a
Participant, Beneficiary or other person who is a minor or an incompetent,
whether or not declared incompetent by a court, such amount may be paid by the
Trustee to
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such minor or incompetent person or to such person's fiduciary (or
attorney-in-fact in the case of an incompetent) as the Administration Committee,
in its sole discretion, may decide, and neither the Administration Committee nor
the Trustee shall be liable to any person for any such decision or any payment
pursuant thereto.
(b) Unclaimed Accounts. If the Administration Committee is unable after
a reasonable period of time, as determined by the Administration Committee, to
locate the Participant or Beneficiary to whom an Account is distributable, the
Administration Committee may direct that such Account shall be forfeited and all
liability for the payment thereof shall terminate. In the event that a valid
claim is made by or on behalf of a Participant or Beneficiary for the forfeited
Account, the liability for the payment of the Account shall be reinstated
subject to any adjustment which shall be appropriate.
SECTION 8.8. SPENDTHRIFT CLAUSE.
(a) General. Except to the extent required by law, none of the
benefits, payments, proceeds or Distributions under the Plan shall be subject to
the claim of any creditor of any Participant, Beneficiary or other person or
entity entitled to receive the payment(s) of benefits hereunder or to any legal
process by any creditor of any Participant, Beneficiary or such other person or
entity. No Participant, Beneficiary or other person or entity entitled to
benefits hereunder shall have any right to alienate, commute, anticipate or
assign any of the benefits, payments, proceeds, or Distributions under the Plan.
(b) Qualified Domestic Relations Order. The restrictions of Section
8.8(a) shall apply to the creation, assignment or
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recognition of the right to any benefit payable with respect to a Participant
pursuant to a domestic relations order unless the order is a qualified domestic
relations order within the meaning of Section 206(d) of the Act and Section
414(p) of the Code ("Qualified Domestic Relations Order"). Distributions from
the Trust shall be made in accordance with Qualified Domestic Relations Orders,
and the Administration Committee shall establish reasonable procedures to
determine whether domestic relations orders are Qualified Domestic Relations
Orders and to administer distributions from the Trust under Qualified Domestic
Relations Orders in accordance with the Act and the Code. Distribution from the
Trust to an alternate payee under a Qualified Domestic Relations Order may be
made before the Participant has separated from Service or attained the "earliest
retirement age" (within the meaning of Section 414(p) of the Code) if the
Qualified Domestic Relations Order so requires or permits.
SECTION 8.9. BENEFICIARY OR BENEFICIARIES.
(a) Designation of Beneficiary by Participant. Each Participant may
from time to time designate the person(s) or entity(ies) who shall be the
Participant's Beneficiary. A Participant may from time to time change the
Participant's said designation of Beneficiary, and upon any change, any
previously designated Beneficiary's right to receive any benefit under the Plan
shall terminate. In order to be effective, any designation or change of
designation of a Beneficiary by a Participant must be made on a form furnished
by the Administration Committee, signed by such Participant and received by the
Administration Committee while such Participant is alive. Notwithstanding the
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foregoing, in the case of a Participant who has at least one Hour of Service on
or after August 23, 1984, if the Participant is married at the time of the
Participant's death and is survived by the spouse of that marriage, then such
spouse shall be the Participant's Beneficiary notwithstanding any other
designation by such Participant unless:
(i) such spouse (or such spouse's legal guardian, if such spouse is
incompetent) consents in writing to the designation of person(s) or
entity(ies) other than such spouse as the Beneficiary and such spouse's
consent acknowledges the effect of such designation and is witnessed by a
notary public; or
(ii) it is established to the satisfaction of the Administration
Committee or other Plan representative that such consent cannot be obtained
because such spouse cannot be located or because of such other
circumstances as may be prescribed by applicable Code regulations.
The consent of a spouse, or establishment that the consent of the spouse may not
be obtained, shall be irrevocable and shall be effective only with respect to
that spouse.
(b) Other Designated Beneficiaries. In the event that a Participant
shall die without having designated a Beneficiary, or in the event that a
Participant shall die having revoked an earlier Beneficiary designation without
having effectively designated another Beneficiary, or in the event that a
Participant shall die but the Beneficiary designated by such Participant shall
fail to survive such Participant, then and in any such event, the person(s) who
shall constitute the Beneficiary of such deceased Participant shall be
determined as follows:
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(i) in the event the deceased Participant is survived by the
Participant's spouse, then such surviving spouse shall be the Beneficiary;
and
(ii) in the event the deceased Participant is not survived by such
Participant's spouse, then the deceased Participant's estate shall be the
deceased Participant's Beneficiary.
ARTICLE IX
FIDUCIARIES
SECTION 9.1. GENERAL. The Company, acting through the Administration
Committee and the Board of Directors, shall be the Administrator of the Plan
within the meaning of said term as used in the Act. The following named
fiduciaries shall have the authority to control and manage the operation of the
Plan and the Trust thereunder within their designated areas of responsibility:
The Board of Directors, the Administration Committee, the Benefits Committee,
the Investment Committee and the Trustee.
SECTION 9.2. ALLOCATION OF RESPONSIBILITIES.
(a) The Board of Directors. The Board of Directors shall have
responsibility for:
(i) determining the amount (if any) of the Profit-Sharing Contribution
for each Plan Year;
(ii) appointing the members of the Benefits Committee and the
Investment Committee and designating the officers of these Committees,
(iii) amending and terminating the Plan to the extent provided in
Article XII, and
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(iv) performing such other duties specifically or by necessary
implication allocated to the Board of Directors in the Plan.
(b) The Benefits Committee. The Benefits Committee shall have
responsibility for making policy decisions and establishing procedures having
continued or broad effect on the operation and administration of the Plan,
including those powers and duties set forth in Section 10.2, but excluding those
areas of responsibility specifically or by necessary implication allocated in
the Plan to other named fiduciaries.
(c) The Investment Committee. The Investment Committee shall have
primary responsibility and authority as to investment decisions involving assets
of the Plan, including those powers and duties set forth in Section 10.3.
(d) The Administration Committee. The Administration Committee shall be
the general administrator of the Plan and shall have complete responsibility for
the regular, day-to-day operation and administration of the Plan, including
those powers and duties set forth in Section 10.4, but excluding those areas of
responsibility specifically or by necessary implication allocated in the Plan to
the other named fiduciaries.
(e) The Trustee. The Trustee shall have responsibility for the
management and control of the assets of the Trust and for the financial
information regarding the assets held by the Trustee (including the valuations
thereof) requested by, or required to be furnished to, any Committee, the Board
of Directors, any Participant or Beneficiary or any regulatory authority. No
Trustee shall be responsible for information with respect to the age,
employment, compensation or eligibility for participation or
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benefits of Employees or their Beneficiaries. The Trustee shall be responsible
for the performance of such other duties that are specifically or by necessary
implication allocated to the Trustee in the Plan or in the separate Trust
Agreement between the Company and the Trustee.
(f) Agents. Except as otherwise provided under the Act, any fiduciary
hereunder may delegate to one or more agents its power, authority and
responsibility with respect to the performance of one or more of the duties
specifically or by necessary implication allocated to such fiduciary in the
Plan; provided, however, no fiduciary hereunder may designate an agent to carry
out its duties with respect to the management and control of the assets of the
Trust. Designation by a fiduciary hereunder of such an agent (including an
Investment Manager) shall be by written instrument stating that such person has
fiduciary responsibility with respect to the specified duties entrusted to him,
which written instrument shall be delivered to such agent and returned to such
fiduciary bearing the written acknowledgment by such agent that such agent is a
fiduciary with respect to the Plan. Any person may serve in more than one agency
capacity hereunder if so appointed.
(g) Limitation of Liability. No fiduciary hereunder shall be liable for
any act or omission of any other fiduciary hereunder (including the agent of a
named fiduciary) in connection with the performance of the duties specifically
or by necessary implication allocated to such other fiduciary (or such agent) in
(or pursuant to) the Plan and Trust except to the extent that such fiduciary
cannot be relieved of such liability under the Act. Without limiting the
generality of the foregoing, if an
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Investment Manager is appointed by the Investment Committee pursuant to the
provisions of the Plan, then to the extent permitted by applicable law, the
Trustee shall not be liable for the acts or omissions of such Investment Manager
and the Trustee shall be relieved of the Trustee's obligation to invest or
otherwise manage any asset of the Trust which is subject to the management of
such Investment Manager.
SECTION 9.3. RESTRICTIONS. No fiduciary hereunder shall exercise any
power, make any investment, engage in any act or transaction or take any other
action whatever which shall cause or result in the Plan's losing its status as a
qualified plan under the Code, the Trust's losing its status as a trust exempt
from taxation under the Code, or the Plan's engaging in any transaction
prohibited by the Act.
ARTICLE X
COMMITTEES
SECTION 10.1. ORGANIZATION OF THE COMMITTEES.
(a) Benefits Committee. The Benefits Committee is the Company-appointed
committee known as the "Collins & Aikman Benefits Committee," which has general
oversight, planning and design authority with respect to employee benefit
matters, including its responsibilities and authority with respect to the Plan
set forth herein.
(b) Investment Committee. The Investment Committee shall consist of
three (3) or more individuals appointed by the Board of Directors. Investment
Committee members may, but need not be, Employees, Participants or members of
more than one Committee.
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The members of the Investment Committee shall serve until death, resignation or
removal from office. The Board of Directors shall have the right to remove any
member of the Investment Committee at any time. If a vacancy in the Investment
Committee should occur from death, resignation, removal or otherwise, a
successor member shall be appointed by the Board of Directors.
(c) Administration Committee. The Administration Committee shall
consist of three (3) or more individuals appointed by the Benefits Committee.
Administration Committee members may, but need not be, Employees, Participants
or members of more than one Committee. The members of the Administration
Committee shall serve until death, resignation or removal from office. The
Benefits Committee shall have the right to remove any member of the
Administration Committee at any time. If a vacancy in the Administration
Committee should occur from death, resignation, removal or otherwise, a
successor member shall be appointed by the Benefits Committee.
(d) Organization of Committees. The Board of Directors shall designate
the Chairman, Vice Chairman and Secretary of the Investment Committee, and the
Benefits Committee shall designate the Chairman, Vice Chairman and Secretary of
the Administration Committee. Each Committee may appoint such agents, who need
not be members of the Committee, as they may deem necessary for the effective
performance of its duties, and may delegate to such agents such powers and
duties (except in the case of the Investment Committee its powers and authority
to appoint Investment Managers or to direct Trust investments), whether
ministerial or discretionary, as the Committee may deem expedient or
appropriate. The compensation of such agents shall be fixed
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by each Committee within limits set by the Board of Directors. Each Committee
shall act by majority vote and may adopt such Bylaws as it deems desirable for
the conduct of its affairs. The members of each Committee shall serve as such
without compensation. The Secretary or an Assistant Secretary of the Benefits
Committee shall keep the Trustee notified by written notice of the current
membership of each Committee, its officers and agents, and shall also furnish
the Trustee a certified signature card for the Secretary of each Committee, and
for all purposes hereunder, the Trustee shall be conclusively entitled to rely
on such certified signature. Any document required to be filed with, or any
notice required to be given to, each Committee will be properly filed or given
if mailed or delivered to the Secretary of the Committee in care of a
Participating Employer. Notwithstanding anything to the contrary contained
herein, no member of a Committee shall have any right to vote upon or decide any
matter relating solely to himself or to any of his rights or benefits under the
Plan and Trust; provided, however, such member may sign unanimous written
consent to resolutions adopted or other action taken without a meeting.
SECTION 10.2. POWERS OF BENEFITS COMMITTEE.
(a) Plan Oversight. The Benefits Committee shall have all powers
necessary to enable it to properly carry out its duties under the Plan as to the
oversight and design of the operation and administration of the Plan.
(b) Specific Powers. Not in limitation of the foregoing, the Benefits
Committee shall have the duty and power to:
(i) establish the rules and procedures being used from time to time
under the Plan for Participant
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Compensation reductions and After-Tax Savings Contributions, including
rules and procedures regarding the timing, form and frequency of
contribution-related Participant elections;
(ii) provide for the proper coordination of contribution-related
limitations and restrictions that involve contributions or benefits under
the Plan and any other plans of Affiliated Group members;
(iii) establish the rules and procedures being used from time to time
under the Plan for the distribution of benefits, including rules and
procedures for in- Service Distribution under Sections 8.2, 8.3 and 8.4;
(iv) formulate proposals for contributions to the Plan and recommend
appropriate action to the Board of Directors with respect thereto; and
(v) carry out such other and further specific duties, and exercise such
other and further specific powers, authority and discretion, as are
elsewhere in the Plan either expressly or by necessary implication
conferred upon the Benefits Committee.
SECTION 10.3. POWERS OF INVESTMENT COMMITTEE.
(a) Investment Decisions. The Investment Committee shall have all
powers necessary to enable it to properly carry out its duties under the Plan
and the Trust as to investment decisions involving assets of the Plan.
(b) Specific Powers. Not in limitation of the foregoing, the Investment
Committee shall have the duty and power to:
(i) maintain familiarity with financial, economic and investment trends
and practices relating to the Company's responsibilities with respect to
assets of the Plan;
(ii) determine investment policies and objectives, including the number
and permissible kinds of
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investments of the separate investment Funds in use from time to time
pursuant to Section 11.1(b);
(iii) monitor the investment performance of the Trustee and any
Investment Manager;
(iv) determine the allocation of the Plan's assets among the Trustee
and any Investment Manager;
(v) recommend to the Board of Directors the appointment or termination
of the Trustee and Investment Managers;
(vi) receive and review reports of the Trustee and Investment Managers
of the financial condition, receipts and disbursements of the Plan;
(vii) prepare and submit to the Board of Directors such reports as to
the Investment Committee's operations as are reasonable and appropriate;
and
(viii) carry out such other and further specific duties, and exercise
such other and further specific powers, authority and discretion, as are
elsewhere in the Plan either expressly or by necessary implication
conferred upon the Investment Committee.
SECTION 10.4. POWERS OF ADMINISTRATION COMMITTEE.
(a) Plan Administration. The Administration Committee shall have all
powers necessary to enable it to properly carry out its duties under the Plan
and Trust as to the day-to-day operation and administration of the Plan.
(b) Specific Powers. Not in limitation of the foregoing, the
Administration Committee shall have the duty and power to:
(i) construe and interpret the Plan and determine questions that shall
arise thereunder;
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(ii) decide questions relating to the eligibility of Employees to
participate in the Plan as well as to receive benefits under the Plan;
(iii) ensure that contributions (and the alloca tions thereof) do not
exceed the limitations thereon set forth in the Plan;
(iv) authorize all disbursements by the Trustee except for the ordinary
expenses of administration of the Trust by written instructions signed by
the Secretary of the Administration Committee, which such written
directions shall give full details as to amount and manner of the
disbursement;
(v) ensure that Distributions comply with the provisions of Article
VIII of the Plan;
(vi) determine whether the Plan is Top-Heavy and, if so, ensure that
the resulting requirements of Article XIV are satisfied; and
(vii) carry out such other and further specific duties, and exercise
such other and further specific powers, authority and discretion, as are
elsewhere in the Plan either expressly or by necessary implication
conferred upon it.
SECTION 10.5. RECORDS OF COMMITTEES. All proceedings, acts and
determinations of each Committee shall be duly recorded (in a minute book or
other appropriate record) by the Secretary thereof, or under such Secretary's
supervision, and all such records, together with such other documents and data
as may be necessary for the administration of the Plan, shall be preserved in
the custody of the Secretary.
SECTION 10.6. EXPENSES OF COMMITTEES AND OTHERS. The Committees shall
be reimbursed for all expenses, including reasonable counsel fees and other
expenses of other agents,
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incurred by the Committees in the performance of their duties under the Plan and
Trust. Also from time to time in connection with the administration of the Plan,
it may be necessary or advisable for the Participating Employers, the Board of
Directors, or any Committee to authorize the incurrence of fees of legal counsel
or accounting, actuarial, investment or other consultants in connection with the
administration and continuance of the Plan.
At the option of the Benefits Committee, any such expenses may be paid
in whole or in part from the assets of the Trust or directly by the
Participating Employers. Expenses paid directly by the Participating Employers
shall be borne by the Participating Employers substantially in the same
proportion that the Compensation paid by each Participating Employer is of the
total Compensation paid by all Participating Employers for the Plan Year in
which such expense is incurred.
ARTICLE XI
TRUST AND TRUSTEE
SECTION 11.1. TRUST.
(a) Trust Assets. All of the assets of the Plan shall be held in the
Trust. In no event shall the assets of the Trust be paid to, used for, or
revested in the Participating Employers or used for or diverted to any purpose
whatsoever other than the exclusive benefit of the Participants or their
Beneficiaries and defraying the reasonable expenses of administering the Plan
and the Trust except as follows:
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(i) In the case of a contribution under the Plan made by the
Participating Employers by a mistake of fact, such contribution shall be
returned to the Participating Employers, reduced by any losses attribut-
able thereto but without any interest or other increment thereon, as soon
as practicable but not later than one (1) year after payment thereof.
(ii) Each contribution that is made under the Plan by the Participating
Employers is hereby conditioned upon its deductibility by the Participating
Employers under Section 404 of the Code. If a Participating Employer
contribution is not so deductible, then to the extent such deduction is
disallowed such contribution, reduced by any losses attributable thereto
but without interest or other increment thereon, shall at the Participating
Employers' election be returned to the Participating Employers as soon as
practicable but not later than one (1) year after the disallowance of the
deduction.
(b) Funds under Trust. At the direction of the Investment Committee,
the Trustee from time to time shall establish and maintain two (2) or more
separate funds (the "Funds") for the investment of the Trust assets. The
Investment Committee shall specify in pertinent detail the type(s) of
investments permitted for each such Fund. Any such Fund, once established, shall
continue until such time as the Investment Committee in its discretion
determines that the Fund should terminate, in which case the Trustee shall
terminate the Fund and transfer its assets to the other Fund(s) in such
proportions as the Investment Committee shall determine. In determining the
type(s) of investments permitted for a particular Fund established pursuant to
this Section 11.1(b), the Investment Committee may require that all or a
specified portion of such Fund be invested in one or more of the following:
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(i) common stocks or preferred stocks;
(ii) other equity interests, including interests in real estate;
(iii) direct obligations of the United States government or other
obligations fully guaranteed by the United States as to payment of
principal and interest, including United States treasury bills or related
investments;
(iv) obligations of the United States governmental agencies whether or
not guaranteed by the United States government;
(v) notes (including revolving type notes), debentures, bonds,
dollar-denominated commercial paper or certificates of deposit, including
certificates of deposit issued by, or accounts or other deposits in, the
Trustee or an affiliate thereof;
(vi) guaranteed investment contracts and similar policies and contracts
issued by insurance companies that provide for fixed or minimum rates of
return during stated periods of time; and
(vii) other debt obligations and other investments of the type and
character as more specially enumerated in sub-paragraphs (ii) through (vi)
above.
Fund investments may be made directly, or indirectly, such as through the
purchase of shares, units or other participation interests in a mutual fund or a
common, collective or pooled trust or investment funds.
(c) Authorization to Enter into Trust Agreements. The Company shall
enter into one or more Trust Agreements with one or more Trustees, and the
assets of the Plan may be held in one or more separate Trusts with one or more
different Trustees, all of which Trusts and Trust Agreements providing for such
Trusts shall
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be a part of the Plan. Such Trust Agreements shall provide for the
administration of the Trusts under this Plan. Each such Trust Agreement shall
contain such powers and reservations as to investment, reinvestment, control,
transfer and disbursement of assets and funds of the respective Trust and such
other terms and provisions not inconsistent with the provisions of this Plan,
its nature and purposes, as shall be agreed upon by the Company and each such
Trustee and set forth in each such Trust Agreement. Each such Trust Agreement
shall provide that the Board of Directors may remove the Trustee at any time
upon reasonable notice, that the Trustee therein may resign at any time upon
reasonable notice, and that upon the removal or resignation of any such Trustee,
the Board of Directors shall designate and appoint a successor Trustee. Upon the
direction of the Board of Directors, the Trustee of any such Trust shall
transfer, deliver and pay over such part or all of the assets thereof to any
other Trust or Trustee(s) of any other Trust or Trusts created under and forming
a part of the Plan.
SECTION 11.2. INVESTMENT DESIGNATIONS.
(a) Participant's Election. In accordance with procedures established
by the Benefits Committee, each Participant may instruct the Trustee as to the
investment in the Fund(s) of the Participant's Accounts. Such procedures may
require (i) that a Participant with multiple Accounts invest each Account
identically to his other Accounts, and (ii) that if a Participant instructs the
Trustee to invest an Account in more than one (1) Fund, the Account must be
divided among the Funds in increments or multiples of a specific percentage. The
Trustee shall invest each such Account and contribution in accordance with the
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Participant's instructions. Investment designations may become effective at such
earlier times as the Benefits Committee prescribes in the case of Participants
(such as new Participants) who have no Account balances but are anticipated to
have Account balances during the Plan Year. The Trustee shall continue to follow
any Participant instructions under this Section 11.2(a) until such Participant
modifies the same. Investments may be shifted between or among Trust Funds at
such times specified by the Benefits Committee.
(b) Failure of Participant to Designate Investments. If a Participant
fails initially to designate the manner of investment of the Participant's
Accounts, then until such time (if any) as an investment designation by the
Participant becomes effective, the Trustee shall invest such Accounts one
hundred percent (100%) in the Fund that the Investment Committee determines has
the least risk of principal.
(c) Partial Distributions from Accounts Invested in More Than One Fund.
If a Distribution is made of less than all of the amount credited to an Account
at a time when the Account is invested in more than one (1) Fund, such
Distribution shall be charged to the portions of the Account that are invested
in such Funds in the same proportions or percentages as are then in effect under
Section 11.2(a) or Section 11.2(b) (as the case may be) with respect to the
investment of such Account.
(d) Form of Election. Any written investment instructions by a
Participant under Section 11.2(a) shall be made on a form furnished by the
Administration Committee and approved by the Trustee for such purpose and shall
be made by the Participant's completing, signing and filing such instruction
form with the
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Administration Committee in the manner prescribed from time to time by the
Administration Committee.
ARTICLE XII
AMENDMENT AND TERMINATION; OTHER MATTERS
SECTION 12.1. AMENDMENT OF PLAN.
(a) Reservation of Right to Amend and Restrictions Thereon. The
Participating Employers, acting through the Board of Directors, reserve and
shall have the right at any time and from time to time to amend, modify or alter
("amend"), in whole or in part, any of the terms and provisions of the Plan and
any such amendment may be retroactive to the extent not prohibited by applicable
law; provided, however:
(i) No amendment shall authorize or permit any part of the Trust to be
used for or diverted to purposes other than the exclusive benefit of the
Participants and their Beneficiaries and defraying the reasonable
expenses of administering the Plan and the Trust or shall have the effect
of revesting in the Participating Employers any part of the principal or
income of the Trust unless such amendment is permitted or required by laws
governing qualified plans and such amendment does not affect the status of
the Plan as a qualified plan under the Code or the status of the Trust as a
tax-exempt trust under the Code.
(ii) No amendment shall be made which changes the nonforfeitable
percentage interest of a Participant in the amount to the credit of the
Participant in an Account of the Participant if such nonforfeitable
percentage determined as of the later of the date such amendment is adopted
or the date such amendment becomes effective is less than such
nonforfeitable percentage interest computed under the Plan without regard
to such amendment.
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(iii) An amendment changing the vesting provisions of the Plan
(including an amendment that directly or indirectly affects the computation
of a Participant's Vested percentage) shall provide that each Participant
having not less than three (3) years of Vesting Service may elect within a
reasonable period after the adoption of such amendment, to have the
nonforfeitable percentage interest in the amount to such Participant's
credit in such Participant's Accounts computed under the Plan without
regard to such amendment.
(iv) No amendment, other than an amendment described in Section
412(c)(8) of the Code, shall reduce the amounts credited to a Participant's
Accounts, and no amendment shall eliminate an optional form of payment of
benefits attributable to Service before such amendment except as permitted
under Section 411(d)(6) of the Code.
(b) Amendment Procedure. Any amendment to the Plan shall be effected by
an instrument in writing executed by the Company.
SECTION 12.2. TERMINATION OF PLAN. It is the intention of the
Participating Employers to continue the Plan indefinitely and to make
contributions as herein provided. The Participating Employers, nevertheless,
through action of the Board of Directors, expressly reserve the right to
terminate the Plan at any time and for any reason whatsoever. If the
Participating Employers completely terminate the Plan, completely discontinue
contributions under the Plan or suspend contributions under the Plan amounting
to a complete discontinuance of contributions under the Plan (a "termination of
the Plan"), then the Trustee, upon instructions from the Benefits Committee,
shall continue to administer the Trust as provided in the Plan, and the total
amounts credited to the Accounts of each Participant shall be fully Vested and
nonforfeitable. If the Participating Employers
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partially terminate the Plan, then the Trustee shall, upon instructions from the
Benefits Committee, continue to administer the Accounts of the Participants as
to whom the Plan is terminated as provided in the Plan, and the total amounts
credited to each such Participant's Accounts shall be fully Vested and
nonforfeitable.
SECTION 12.3. PLAN MERGER, CONSOLIDATION OR TRANSFER. The Plan and
Trust shall not be merged or consolidated with any other plan and trust, nor
shall the assets or liabilities of the Plan and Trust be transferred to any
other plan and trust, unless the benefit which each Participant would receive
immediately after such merger, consolidation or transfer if the Plan and Trust
had then terminated is equal to or greater than the benefit such Participant
would have been entitled to receive immediately before such merger,
consolidation or transfer if the Plan and Trust had then terminated.
SECTION 12.4. CONTINUATION OF PLAN BY SUCCESSOR. Unless the Plan is
terminated, a successor to the Company or a successor to substantially all of
the business and assets of a Participating Employer and which successor is also
a member of the Affiliated Group, by whatever form or manner resulting, may
elect to continue to participate in the Plan by executing an appropriate
adoption agreement. A successor to any Participating Employer other than the
Company, however, may continue to participate in the Plan only with the consent
of the Benefits Committee. If such successor continues to participate in the
Plan, it shall succeed to all of the rights, powers, duties and obligations
hereunder of the Participating Employer to which it is a successor, and the
employment of any Employee who was
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continued in the employ of such successor shall not be deemed to have been
interrupted or severed for any purpose hereunder by such successor, and all
employment with the former Participating Employer shall be deemed to be
employment by said successor.
SECTION 12.5. ADOPTION BY OTHER AFFILIATED GROUP MEMBERS. With the
consent of the Benefits Committee, a member of the Affiliated Group which is not
a Participating Employer may adopt the Plan and thereby become a Participating
Employer in such manner as shall be mutually agreeable between the Benefits
Committee and such Affiliated Group member.
SECTION 12.6. EFFECT OF ACQUISITIONS. If a Participating Employer
acquires any business or operations of another enterprise (whether by merger,
asset acquisition or otherwise), the persons who became Employees of the
Participating Employer as a result of the acquisition, or a specified group or
division of them, may be credited with Service for all or a portion of their
pre-acquisition employment for specified purposes under the Plan. Any such
Service-crediting, however, must be approved by the Benefits Committee in order
to become effective, and if approved by the Benefits Committee, the pertinent
details of the Service- crediting shall be maintained with the written records
of the Benefits Committee and communicated in pertinent detail to the
Administration Committee, the Trustee and the affected Participants.
SECTION 12.7. TERMINATION OF A PARTICIPATING EMPLOYER'S PARTICIPATION;
OTHER MATTERS.
(a) Termination of Participation. The Benefits Committee may terminate
any Participating Employer's participation in the Plan at such time as the
Benefits Committee in its discretion
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deems appropriate. Any Participating Employer may terminate its participation in
the Plan by giving sixty (60) days advance written notice thereof to the
Benefits Committee (unless such written notice is expressly waived by the
Benefits Committee). Upon any termination of a Participating Employer's
participation in the Plan, the Employees of the Participating Employer shall
accrue no further benefits under the Plan on account of their service with, or
compensation from, the Participating Employer, but except to the extent required
by the Act or the Code or expressly provided in an amendment to the Plan or
written directions of the Benefits Committee:
(i) there shall be no accelerated vesting in, or payment of, any Plan
benefits of any current or former Employees of the Participating Employer;
(ii) the Participating Employer shall remain obligated to contribute to
the Plan; and
(iii) the Participating Employer shall have no right, power,
discretion, control or authority whatsoever over the Plan, any provisions
of the Plan, the Trust or any assets of the Trust, and not in limitation of
the foregoing the Participating Employer shall have no right or authority
to have any assets of the Trust segregated on behalf of its Employees or
transferred to any trustee or custodian of any successor or other qualified
plan in which its Employees may participate.
(b) Transfers to or from another Plan. The Benefits Committee, by
written notice to the Trustee, may direct the Trustee to transfer all or a
portion of the assets of the Trust to the trustee or custodian of another plan
meeting the requirements of the Code relating to qualified plans and trusts. The
Participants whose Accounts are represented by the
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transferred assets shall not be entitled to any Distribution under the Plan, and
instead their payment rights shall be determined under the terms and provisions
of the transferee successor plan, which shall preserve their optional benefit
payment rights with respect to the transferred Accounts as required by Section
204(g) of the Act and Section 411(d)(6) of the Code.
The Trustee, upon written notice from the Benefits Committee, shall
receive and hold, as a part of the assets of the Trust, any assets transferred
directly to the Trustee from the trustee or custodian under another plan meeting
the requirements of the Code relating to qualified plans and trusts. Any such
assets transferred to the Trust shall become subject to the terms and conditions
of the Plan upon transfer and in such regard may be commingled with the other
assets of the Trust for investment purposes. Appropriate amendments shall be
made to the Plan (if necessary) to preserve any optional benefit payment rights
with respect to the transferred assets as may be required by Section 204(g) of
the Act and Section 411(d)(6) of the Code.
Any such transfers to or from the Trust shall be subject to the
restrictions of Section 12.3 to the extent applicable.
SECTION 12.8. AUTHORIZATION AND DELEGATION TO THE BOARD OF DIRECTORS.
Each entity which is or hereafter becomes a Participating Employer authorizes
and empowers the Board of Directors:
(a) to amend, modify or alter the Plan without further action by said
corporation as provided in Section 12.1; and
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(b) to perform such other acts and to do such other things as the Board
of Directors is expressly directed, authorized or permitted to perform or
do as provided herein.
ARTICLE XIII
CLAIMS AND INFORMATION
SECTION 13.1. CLAIMS PROCEDURE.
(a) General. In the event that a person (a "Claimant") makes a claim
for benefits under the Plan (a "Claim"), such Claim shall be made by the
Claimant's filing a notice thereof with the Administration Committee in care of
a Participating Employer. Each Claimant who has submitted a Claim to the
Administration Committee shall be afforded a reasonable opportunity to state
such Claimant's position and to present evidence and other material relevant to
the Claim to the Administration Committee for its consideration in rendering its
decision with respect thereto. The Administration Committee shall render its
decision in writing within ninety (90) days after the Claim is referred to it.
If the Administration Committee determines that special circumstances require an
extension of time within which to render its decision, however, the
Administration Committee may extend the period within which to render its
decision by up to an additional ninety (90) days, in which case the Committee
shall give the Claimant written notification of the extension period prior to
its commencement. A copy of such written decision shall be furnished to the
Claimant.
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(b) Notice of Decision of Committee. Each Claimant whose Claim has been
denied by the Administration Committee shall be provided written notice thereof,
which notice shall set forth:
(i) the specific reason(s) for the denial;
(ii) specific reference to pertinent provision(s) of the Plan and
Trust upon which such denial is based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect such Claim and an explanation of
why such material or information is necessary; and
(iv) an explanation of the procedure hereunder for review of such
Claim;
all in a manner calculated to be understood by such Claimant.
(c) Review of Decision of Administration Committee. Each such Claimant
shall be afforded a reasonable opportunity for a full and fair review of the
decision of the Administration Committee denying the Claim. Such review shall be
by the Administration Committee. Such appeal shall be made within ninety (90)
days after the Claimant received the written decision of the Administration
Committee and shall be made by the written request of the Claimant or the
Claimant's duly authorized representative to the Administration Committee. In
the event of appeal, the Claimant or the Claimant's duly authorized represen-
tative may review pertinent documents and submit issues and comments in writing
to the Administration Committee. The Administration Committee shall review:
(i) the initial proceedings of the Administration Committee with
respect to such Claim;
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(ii) such issues and comments as were submitted in writing by the
Claimant or the Claimant's duly authorized representative; and
(iii) such other material and information as the Administration
Committee, in its sole discretion, deems advisable for a full and fair
review of the initial decision of the Administration Committee.
The Administration Committee may approve, disapprove or modify its initial
decision in whole or in part, or may take such other action with respect to such
appeal as it deems appropriate. The decision of the Administration Committee
with respect to such appeal shall be made promptly, and in no event later than
sixty (60) days after receipt of such appeal, unless special circumstances
require an extension of such time within which to render such decision, in which
event such decision shall be rendered as soon as possible and in no event later
than one hundred twenty (120) days following receipt of such appeal. The
decision of the Administration Committee shall be in writing and in a manner
calculated to be understood by the Claimant and shall include specific reasons
for such decision and set forth specific references to the pertinent provisions
of the Plan and Trust upon which such decision is based. The Claimant shall be
furnished a copy of the written decision of the Administration Committee. To the
maximum extent permitted by law, the Administration Committee's decision shall
be final and conclusive upon all persons interested therein. Not in limitation
of the foregoing, the Administration Committee shall have the discretion to
decide any factual or interpretative issues in its determination of
Claims, and the Administration Committee's exercise of such
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discretion shall be conclusive and binding as long as it is not arbitrary or
capricious.
SECTION 13.2. AGENT FOR SERVICE OF PROCESS. The Company shall be the
agent for service of legal process upon this Plan, and its address for such
purpose shall be the address of its principal place of business in Charlotte,
North Carolina.
SECTION 13.3. COMMUNICATIONS AND REPORTS.
(a) General. The Administration Committee shall furnish all Employees,
Participants or Beneficiaries all information with respect to the Plan and their
interest therein as may be required by the Act or the Code, and the
Administration Committee shall keep such books of account, records and other
data as may be necessary for the proper administration of the Trust and the
compilation and furnishing of the information required in this Section 13.3. In
addition, the Administration Committee shall cause to be prepared and delivered
to the Secretary of Treasury, the Secretary of the United States Department of
Labor or other appropriate regulatory authorities such reports or information
regarding the Plan and Trust or the benefits hereunder as may be required by the
Act or the Code within the time so prescribed by applicable laws.
(b) Periodic Statements to Participants. Following the end of each Plan
Quarter, the Administration Committee shall cause to be prepared and delivered
to each Participant (and Beneficiary receiving benefits hereunder) one or more
statements setting forth the pertinent facts relating to the Participant's
Accounts for such Plan Quarter. In addition, the Administration Committee shall
cause to be prepared and delivered to each Participant and Beneficiary receiving
benefits hereunder or appropriate
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regulatory authorities such additional reports or information regarding the Plan
or the benefits hereunder as may be required by applicable law within the time
period required by such law.
(c) Plan Availability. The Administration Committee shall make copies
of the Plan and each amendment thereto as well as copies of the then current
Plan description and the latest annual report required to be filed with the
Secretary of Labor, available for examination by any Participant or Beneficiary
in the principal offices of the Participating Employers and in such other places
as may be necessary to make such information available to all Participants.
ARTICLE XIV
TOP-HEAVY PROVISIONS
SECTION 14.1. CONSTRUCTION AND DEFINITIONS.
(a) Construction and Application. It is the intent that the provisions
of this Article shall enable the Plan to conform to the requirements of Section
416 of the Code as the same may apply to the Plan from time to time, and the
provisions of this Article shall be construed and interpreted to effectuate such
intent.
(b) Definitions. Whenever used in this Article, the following terms
shall have the following meanings:
(1) Aggregation Group means a group of Employer Plans constituting a
Permissive Aggregation Group or a Required Aggregation Group.
(2) Determination Date means, with respect to a Plan Year, the last
day of the immediately preceding Plan Year.
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(3) Eligible Non-Key Employee means, with respect to a Plan Year, a
person who (i) is a Participant in Service on the last day of the Plan
Year (irrespective of whether the person reduced Compensation under
Article IV or completed a particular length of Service during the Plan
Year) and (ii) is not a Key Employee.
(4) Employer Plan means any qualified defined benefit plan or
defined contribution plan (including this Plan) maintained by any
member of the Affiliated Group. A simplified employee pension shall be
considered to be a qualified defined contribution plan.
(5) Key Employee means a Section 416 Employee who, at any time
during the Plan Year containing the Determination Date or any of the
four (4) immediately preceding Plan Years, is:
(A) an officer of an Affiliated Group member having Affiliated
Group Compensation greater than fifty percent (50%) of the amount in
effect under Section 415(b)(1)(A) for any such Plan Year, unless
fifty (50) other such officers [or, if lesser, the number of
officers equal to the greater of three (3) or ten percent (10%) of
all Section 416 Employees] have higher Affiliated Group
Compensation;
(B) one (1) of the ten (10) Section 416 Employees having
Affiliated Group Compensation of more than the dollar limitation in
effect under Section 415(c)(l)(A) of the Code and owning (or
considered as owning within the meaning of Section 318 of the Code)
the largest interests in an Affiliated Group member;
(C) a person owning (or considered as owning within the meaning
of Section 318 of the Code) (i) in the case of an Affiliated Group
member that is a corporation, more than five percent (5%) of the
outstanding stock of the corporation or stock possessing more than
five percent (5%) of the total combined voting power of all stock of
the
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corporation or (ii) in the case of an Affiliated Group member
that is not a corporation, more than five percent (5%) of the
capital or profits interest therein; or
(D) a person having Affiliated Group Compensation of more than
one hundred fifty thousand dollars ($150,000) and who would be
described in subparagraph (C) above if "one percent (1%)" were
substituted for "five percent (5%)" each place it appears therein.
The determination of which persons are Key Employees shall be made in
accordance with the applicable provisions of Section 416(i) of the
Code. Not in limitation of the foregoing, for purposes of subparagraphs
(B), (C) and (D) above, Section 318(a)(2)(C) of the Code shall be
applied by substituting "5 percent" for "50 percent" therein.
(6) Permissive Aggregation Group means a group of two (2) or more
Employer Plans that consists of:
(A) the Plan and each other Employer Plan (if any) in a Required
Aggregation Group with the Plan; and
(B) at least one (1) other Employer Plan selected by the
Participating Employers to be a part of such group, the inclusion of
which in such group would not prevent such group from continuing to
meet the requirements of Section 401(a)(4) and Section 410 of the
Code.
(7) Required Aggregation Group means a group of two (2) or
more Employer Plans that consists of the Plan and each other Employer
Plan (i) in which a Key Employee is a participant or (ii) which enables
any Employer Plan in which a Key Employee is a participant to meet the
requirements of Section 401(a)(4) or Section 410 of the Code.
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(8) Section 416 Employee means a person currently or formerly
employed by an Affiliated Group member and to the extent required by
Section 416 of the Code the beneficiary(ies) of such person.
(9) Top-Heavy Valuation Date of a defined benefit plan for a
Determination Date means such plan's most recent valuation date for
computing plan costs for minimum funding purposes that occurs during
the twelve-month period ending on such Determination Date.
SECTION 14.2. DETERMINATION WHETHER PLAN IS TOP-HEAVY.
(a) Top-Heavy Determination: Plan Not Aggregated. If the Plan is not
part of an Aggregation Group, the Plan is "Top-Heavy" for a Plan Year if, as of
the Determination Date, the sum of the amounts credited to the Accounts of all
Key Employees exceeds sixty percent (60%) of the sum of the amounts credited to
the Accounts of all Section 416 Employees.
(b) Top-Heavy Determination: Plan Aggregated. If the Plan is part of an
Aggregation Group, the Plan is "Top-Heavy" for a Plan Year if the Aggregation
Group is "Top-Heavy" for the Plan Year. If the Plan is part of both a Permissive
Aggregation Group and a Required Aggregation Group, however, the Plan is "Top-
Heavy" only if the Permissive Aggregation Group is "Top-Heavy". An Aggregation
Group is "Top-Heavy" for a Plan Year if as of the Determination Date, the sum of
the Cumulative Accrued Benefits and Cumulative Accounts of all Key Employees
exceeds sixty percent (60%) of the sum of the Cumulative Accrued Benefits and
Cumulative Accounts of all Section 416 Employees. For purposes of determining
whether an Aggregation Group is "Top-Heavy":
(A) the "Cumulative Account" of any Section 416 Employee as of
the Determination Date means (i) the aggregate amounts, if any, to the
credit as of the Determination
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Date in the Section 416 Employee's Accounts under the Plan plus (ii) if
the Aggregation Group includes any other defined contribution plans,
the aggregate amount(s), if any, to the credit as of the Determination
Date in the Section 416 Employee's account(s) under such other defined
contribution plan(s); and
(B) the "Cumulative Accrued Benefit" for any Section 416
Employee as of the Determination Date means the sum of the present
values of the Section 416 Employee's accrued benefits, if any, under
each defined benefit plan in the Aggregation Group, determined (i)
under the actuarial assumptions used under the defined benefit plans
for purposes of determining top-heaviness under Section 416 of the
Code and (ii) as of the defined benefit plans' respective Top-Heavy
Valuation Dates for the Determination Date.
(c) Rules for Testing for Top-Heaviness. The determination of whether
the Plan is Top-Heavy for any Plan Year shall be made in accordance with the
provisions of Section 416(g) of the Code.
Not in limitation of the foregoing:
(1) Account balances and accrued benefits shall not include
amounts or accrued benefits attributable to "deductible employee
contributions" within the meaning of Section 72(o)(5) of the Code.
(2) To the extent required by Section 416(g) of the Code,
account balances and accrued benefits shall be increased, without
duplication, by distributions made to Section 416 Employees during the
five-year period ending on the Determination Date (i) under the Plan,
(ii) if the Plan is part of an Aggregation Group, under any other plan
included in the Aggregation Group, and (iii) under any terminated plan
which, if it had not been terminated, would have been required to be
included in an Aggregation Group with the Plan.
(3) Account balances and accrued benefits attributable to
rollover contributions and similar transfers shall be taken into
account or disregarded as required by Section 416(g)(4)(A) of the Code.
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(4) Account balances and accrued benefits of former Key
Employees shall not be taken into account as required by Section
416(g)(4)(B) of the Code.
(5) Account balances shall reflect contributions made after
the Determination Date but allocable to accounts as of the
Determination Date to the extent permitted under Section 416(i) of the
Code.
(6) Account balances and accrued benefits of any individual
who has not performed any services for any employer maintaining an
Employer Plan during the five-year period ending on the Determination
Date shall not be taken into account as required by Section
416(g)(4)(E) of the Code.
(7) If the Plan is part of an Aggregation Group whose
constituent Employer Plans do not all have the same plan year, or if
the determination of whether the Plan is Top-Heavy is otherwise to be
on the basis of a period other than the Plan Year, such determination
shall be made as provided for in Section 416(g)(4)(D) of the Code.
(8) The accrued benefit of any individual (other than a Key
Employee) shall be determined (i) under the method which is used for
accrual purposes under all Employer Plans or (ii) if there is no such
method, then as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Section 411(b)(1)(C) of the Code.
SECTION 14.3. TOP-HEAVY REQUIREMENTS: CONTRIBUTIONS.
(a) Minimum Allocations for Non-Key Employee Participants. If the Plan
is Top-Heavy for a Plan Year, then except as provided in Section 14.3(d), the
total Participating Employer contributions and Forfeitures allocated to the
Accounts of each Eligible Non-Key Employee for the Plan Year, excluding
Before-Tax Savings Contributions and (if required by the Code) Company Match,
shall
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not be less than the product of (i) the Eligible Non-Key Employee's Affiliated
Group Compensation for the Plan Year multi plied by (ii) the Minimum
Compensation Percentage for the Plan Year.
(b) Determination of Minimum Compensation Percentage. The "Minimum
Compensation Percentage" for a Plan Year shall be determined as follows:
(1) The Minimum Compensation Percentage shall be three percent (3%)
unless decreased pursuant to subparagraph (2) below.
(2) In no event shall the Minimum Compensation Percentage exceed the
highest percentage at which contributions and forfeitures are allocated
for such Plan Year on behalf of any Key Employee. Such percentage
shall be determined by dividing the employer contributions and
forfeitures for such Key Employee (including contributions subject to
Sections 401(k) and 401(m) of the Code) by the Key Employee's
Affiliated Group Compensation for the Plan Year. If the Plan is part of
a Required Aggregation Group, the Plan and any other defined
contribution plan(s) in such Aggregation Group shall be treated as one
(1) plan. This sub-paragraph (2) shall not apply if the Plan is part of
a Required Aggregation Group and enables a defined benefit plan that is
a part of the Required Aggregation Group to meet the requirements of
Section 401(a)(4) or Section 410 of the Code.
(c) Implementation of Minimum Allocation. If the Plan is Top-Heavy for
a Plan Year, the minimum allocation provided in subsection (a) above for each
Eligible Non-Key Employee shall be implemented as hereinafter provided. If the
total Participating Employer contributions and Forfeitures otherwise allocated
to the Accounts of the Participant for the Plan Year, excluding Before-Tax
Savings Contributions and (if required by the Code) Company
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Match, equals or exceeds the minimum allocation, the minimum allocation shall
have been satisfied and there shall be no additional contribution for the
Participant pursuant to this Article. If such total Participating Employer
contributions and Forfeitures is less than the minimum allocation, the
Participating Employers shall make an additional contribution to the Plan. The
amount of the additional contribution shall equal the excess of (i) the minimum
allocation over (ii) such total Participating Employer contributions and
Forfeitures. The additional contribution shall be credited to the Participant's
Company Match Account as of the Valuation Date on the last day of the Plan Year.
(d) Reduction for Contributions or Benefits under Other Plans and
Statutory Minimum. To the extent permitted under the Code, no minimum allocation
for a Plan Year shall be required under Section 14.3(a) for any Participant if
Section 416 of the Code does not require a minimum contribution for the
Participant or to the extent that any such required minimum contribution under
Section 416 of the Code is satisfied without regard to the provisions of this
Article. Not in limitation of the foregoing, no minimum allocation for a Plan
Year shall be required under Section 14.3(a) (or such minimum allocation shall
be appropriately reduced) for any Participant who is also a participant in any
other Employer Plan(s), to the extent that the minimum contribu tion or benefit
requirements of Section 416(c) of the Code are being provided for such
Participant under such other Employer Plan(s).
SECTION 14.4. TOP-HEAVY REQUIREMENTS: VESTING. If the Plan is Top-Heavy
for a Plan Year, the Vesting Schedule applicable for such Plan Year for
purposes of determining the Vested
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portion of the Company Match Account and Profit-Sharing Account of each
Participant who completes at least one (1) Hour of Service during such Plan Year
(and is not subject to the first listed vesting schedule of Section 7.2(b))
shall be as follows (the "Top-Heavy Vesting Schedule"):
Years of
Vesting Service Vested Percentage
less than 2 .......................... 0%
2 .......................... 20%
3 .......................... 40%
4 .......................... 60%
5 or more .......................... 100%
The Top-Heavy Vesting Schedule shall only be applicable for Plan Years for which
the Plan is Top-Heavy, and the Vesting Schedule that shall be applicable for any
Plan Year for which the Plan is not Top-Heavy shall be determined without regard
to this Section 14.4 irrespective of whether the Plan was Top-Heavy for any
prior Plan Year. Once the Top-Heavy Vesting Schedule has become applicable for a
Plan Year, any change pursuant to the preceding sentence from the Top-Heavy
Vesting Schedule to another Vesting Schedule shall be subject to the
restrictions and conditions on Vesting Schedule amendments or changes as
required by the Code.
SECTION 14.5. TOP-HEAVY REQUIREMENTS: SECTION 415 LIMITATIONS ON
BENEFITS. If the Plan is Top-Heavy for a Plan Year, then:
(a) for purposes of determining the Defined Benefit Plan Fractions
and the Defined Contribution Plan Fractions of Participants for the
Plan Year, "1.0" shall be substituted for "1.25" in Amount A of each
Fraction; and
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(b) if the transitional rule set forth in Section 415(e)(6) of the
Code can be and has been elected under the Plan, such transitional rule
shall be applied by substituting "$41,500" for "$51,875" in Section
415(e)(6)(B)(i) of the Code.
If the application of the modifications set forth in subparagraph (a) above
would cause the limitations of Section 6.3(a) to be exceeded with respect to any
Participant, then the application of subparagraph (a) shall be suspended with
respect to the Participant until such time as such application will no longer
cause such limitations to be exceeded. During the period that the application of
such modifications is suspended, there shall be no employer contributions,
forfeitures or voluntary contributions allocated to the account of the
Participant under any defined contribution plan maintained by any Affiliated
Group member, and there shall be no further accrual of benefits for the
Participant under any defined benefit plan maintained by any Affiliated Group
member.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. LEASED EMPLOYEES. Notwithstanding any provisions of the
Plan to the contrary and except as hereinafter provided, a Leased Employee shall
be credited with Hours of Service under the Plan to the extent required by
Section 414(n) of the Code with respect to services performed for an Affiliated
Group member as a Leased Employee. The Service crediting requirement of the
preceding sentence, however, shall not apply to any Leased Employee to the
extent provided in Section
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414(n)(5) of the Code, and in such regard shall not apply with respect to such
Leased Employee if such Leased Employee is covered by a leasing organization's
money purchase pension plan that meets the participation, contribution and
vesting requirements of Section 414(n) of the Code and the safe harbor
requirements of Section 414(n) are otherwise satisfied. The Service crediting
requirement of this Section 15.1, if applicable to a Leased Employee, shall only
entitle such person to be credited with Hours of Service as hereinabove provided
and shall not in and of itself entitle such person to become a Participant in
the Plan or to contributions under, or otherwise participate in, the Plan, and
such person shall not become a Participant or participate in the Plan unless and
until such person becomes an Employee and otherwise satisfied the requirements
of the Plan for participation.
SECTION 15.2. PARTICIPANT LOANS. Prior to July 1, 1991, Participants
were permitted to make loans pursuant to Section 7.11 of the Prior Plan.
Effective July 1, 1991, Participants shall not be permitted to obtain a loan
from the Plan. Loans that remain outstanding as of July 1, 1991 shall be
administered in accordance with Section 7.11 of the Prior Plan. Each loan
repayment (principal and interest) credited to Participant's Account shall be
invested in accordance with the Participant's investment designation in effect
at the time of repayment.
SECTION 15.3. INDEMNIFICATION. To the extent permitted by applicable
state law and to the extent not in contravention of the Act, the Participating
Employers shall indemnify and hold harmless each of the members of the
Committees and each employee of the Participating Employers acting pursuant to
the direction
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of each Committee from and against any and all liability claims, demands, costs
and expenses (including the costs and expenses of attorneys incurred in
connection with the investigation or defense of claims) in any manner connected
with or arising out of any actions or inactions in connection with the
administration of the Plan except for any such actions or inactions which are
not in good faith or which constitute willful misconduct.
SECTION 15.4. BENEFITS LIMITED TO PLAN. Participation in the Plan shall
not give any Employee any right to be retained in the employ of any one or more
of the Participating Employers nor, upon dismissal, any right or interest in the
Trust except as expressly provided herein.
SECTION 15.5. LIMITED EFFECT OF RESTATEMENT. Notwithstanding anything
to the contrary contained in the Plan, to the extent permitted by the Act and
the Code, this Instrument shall not affect or in any way change the amount of
any contribution or forfeiture allocation or any other adjustment to any Account
for any Plan Year that began prior to March 1, 1991, or affect the time or
amount of any Plan benefit payment or other distribution during any prior Plan
Year, and all allocations, adjustments, payments, distributions and other
matters of Plan or Trust operation and administration that were made or taken
during or for any prior Plan Year shall not be altered or in any manner
adversely affected by the amendment and restatement of the Plan by this
Instrument.
SECTION 15.6. INSTRUMENT BINDING. The Plan (including any and all
amendments thereto) shall be binding upon the Participat ing Employers, their
respective
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successors and assigns, and upon the Participants and their Beneficiaries and
their respective heirs, executors, administrators, personal representatives and
all other persons claiming by, under or through any of them.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed as of the 1st day of March, 1991.
COLLINS & AIKMAN CORPORATION
By: /s/ Harold R. Sunday
Harold R. Sunday
Vice President, Human Resources
By: /s/ Ronald T. Lindsay
Ronald T. Lindsay
Vice President, General Counsel
and Secretary
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COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
(as amended and restated effective March 1, 1991)
INSTRUMENT OF AMENDMENT
Statement of Purpose
Collins & Aikman Products Co. (formerly named Collins & Aikman
Corporation) (the "Company") sponsors the Collins & Aikman Corporation
Employees' Profit-Sharing and Personal Savings Plan (the "Plan"). The provisions
of the Plan are currently set forth in an Instrument of the Company dated March
1, 1991, which amended and restated the Plan as of that date. By this Instrument
of Amendment, the Company is amending the Plan to reflect recent regulatory
developments and otherwise meet current needs.
NOW, THEREFORE, the Plan, as set forth in said Instrument dated March
1, 1991, is amended as follows:
1. Section 6.4 of the Plan is amended effective as of March 1, 1991 to
read as follows:
"SECTION 6.4. COMPENSATION LIMITATION. In no event shall the amount of
the Participant's compensation taken into account under the Plan for
any Plan Year exceed the limitation of Section 401(a)(17) of the Code.
That limitation is two hundred thousand dollars ($200,000) for Plan
Years beginning before 1994 and one hundred fifty thousand dollars
($150,000) for Plan Years beginning after 1993. In applying the
limitation of this Section 6.4, the following rules apply:
(i) The limitation shall be adjusted for cost-of-living
adjustments under Section 401(a)(17) when and as provided by Section
401(a)(17). In such regard, a Section 401(a)(17) cost-of-living
adjustment that is in effect for a calendar year applies to the Plan
Year that begins during such calendar year.
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<PAGE>
(ii) If the Plan Year is changed, then to the extent required by
Section 401(a)(17) the limitation for any resulting Plan Year that
is shorter than twelve (12) months shall be the product obtained by
multiplying the limitation that would otherwise apply by a fraction,
the numerator of which is the number of months in the short Plan
Year and the denominator of which is twelve (12).
(iii) the following rule applies to a Highly Compensated
Participant who is a five percent (5%) owner described in Section
4.14(q)(1) of the Code or is among the ten (10) Highly Compensated
Participant's receiving the greatest Affiliated Group Compensation
during the Plan Year: if any family members of the Highly
Compensated Participant also participate in the Plan, the limitation
shall be prorated among the Highly Compensated Participant and
participating family members in proportion to their respective
compensation determined without regard to the limitation. A "family
member" means the Highly Compensated Participant's spouse or any
lineal descendant of the Highly Compensated Participant who has not
attained nineteen (19) years of age before the end of the Plan
Year."
2. Section 8.4(a) of the Plan is amended effective as of March 1, 1991
by deleting the phrase "as of such Valuation Date" in the first sentence
thereof.
3. The following Section 8.10 is added to the Plan
effective as of January 1, 1993:
"SECTION 8.10. OPTIONAL TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
This Section 8.10 applies to Distributions made on or after January 1, 1993. If
a Participant, a Beneficiary who is a the surviving spouse of a deceased
Participant, or a Participant's current or former spouse who is an alternate
payee under a Qualified Domestic Relations Order (each a "distributee") is to
receive a Distribution that is an "eligible rollover distribution," the
distributee may
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<PAGE>
elect to have the Distribution paid directly to an "eligible retirement plan"
specified by the distributee rather than paid directly to the distributee. The
election may be made with respect to all or any portion of the Distribution,
other than the portion that would not be includable in the distributee's gross
income if not so transferred (for example, the portion representing a return of
after-tax employee contributions).
For purposes of this Section 8.10:
(i) The term "eligible rollover distribution" is as defined in
Section 401(a)(31)(C) of the Code.
(ii) The term "eligible retirement plan" is as defined in Section
401(a)(31)(D) of the Code. In the case of a distributee who is the
surviving spouse of a deceased Participant, however, "eligible
retirement plan" refers only to an individual retirement account
described in Section 408(a) of the Code or an individual retirement
annuity described in Section 408(b) of the Code.
The preceding provisions of this Section 8.10 shall apply only to the extent
required by Section 401(a)(31) of the Code. The Benefits Committee shall
establish the rules and procedures (i) by which Participants and other
distributees make their elections under this Section 8.10 and (ii) pursuant to
which the requirements and provisions of this Section 8.10 and Section
401(a)(31) of the Code, and any related income tax withholding rules of the
Code, are otherwise implemented. In such regard, to the extent permitted by the
Code, the Benefits Committee's rules and procedures may include rules limiting
or eliminating elections for small amounts, and may provide that a Distribution
shall be paid to a distributee's individual retirement account or other eligible
retirement plan only upon the distributee's timely election, and that if there
is no such election, the Distribution shall be paid directly to the distributee
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<PAGE>
and shall reflect any income tax withholding required by the Code."
4. The following Section 12.9 is added to the Plan effective as of
March 1, 1991:
"SECTION 12.9. RESTRICTIONS ON PLAN PARTICIPATION. The participation
in the Plan by the Participants who are
(i) included in a unit of employees covered by a collective
bargaining agreement that provides for their participation in the
Plan, or
(ii) employed by a particular Participating Employer or by a
particular division or other organizational unit of a Participating
Employer,
may be restricted by limiting their eligibility for contributions to
one or more, but less than all, of the contribution features of the
Plan (Before-Tax Savings Contributions, Company Matches, After-Tax
Savings Contributions, Profit-Sharing Contributions and related
Forfeiture allocations). The restriction, however, shall not make the
affected Participants ineligible for any minimum contribution required
by Section 14.3 should the Plan be Top-Heavy.
In the case of restricted Participants described in subparagraph (i)
above, the restriction shall be as provided for in the collective
bargaining agreement that provides for their Plan participation. In the
case of restricted Participants described in subparagraph (ii) above,
the restriction shall be as authorized by the Participating Employer
that employs the Participants. In either case, the restriction must be
consented to by the Benefits Committee. The pertinent details of any
such restriction shall be maintained with the written records of the
Benefits Committee and the restriction shall be communicated in
pertinent detail to the Administration Committee, the Trustee and the
affected Participants."
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Instrument of Amendment
to be executed as of the 14th day of November, 1994.
COLLINS & AIKMAN PRODUCTS CO.
By: /s/ Harold R. Sunday
Harold R. Sunday
Vice President, Human Resources
By: /s/ Ronald T. Lindsay
Ronald T. Lindsay
Vice President, General Counsel
and Secretary
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COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
(as amended and restated effective March 1, 1991)
AMENDMENT NO. 2
Statement of Purpose
Collins & Aikman Products Co. (formerly named Collins & Aikman
Corporation) (the "Company") sponsors the Collins & Aikman Corporation
Employees' Profit-Sharing and Personal Savings Plan (the "Plan"). The provisions
of the Plan are currently set forth in Instruments of the Company dated March 1,
1991 and November 14, 1994. By this Amendment No. 2, the Company is amending the
Plan to accelerate the benefit commencement date for all or a portion of a
participant's accounts in certain circumstances.
NOW, THEREFORE, the Plan, as set forth in said Instruments dated March
1, 1991 and November 14, 1994, is further amended as follows:
1. Section 8.1(c)(iii) of the Plan is amended effective as of January
1, 1995 to read as follows:
(iii) Benefit Commencement Date following other Separation from
Service: Other Participants. If a person who had not become a
Participant by June 30, 1991 separates from Service for a reason other
than Retirement, Disability or a Permanent Reduction in Force,
Distribution to the Participant may be made during such month as the
Participant specifies to the Administration Committee that begins after
the earlier of (A) the first anniversary of the separation from Service
or (B) the date the Participant attains age fifty-five (55); provided,
however, in the event a Participant described in this Section
8.1(c)(iii) separates from Service after December 31, 1994, the
Participant may elect an immediate single cash distribution from the
Vested amounts credited to the Participant's Accounts, subject to the
following terms and conditions:
<PAGE>
(1) The payment shall be made only if the Participant has entered
into a settlement with a Participating Employer relating to the
Participant's alleged negligent act or omission or his or her
misconduct as an Employee, and the settlement includes an
arrangement pursuant to Treasury Regulation ss.1.401(a)-13(e)
directing the Plan and the Trustee to pay such payment (less
withholding required under the Code) to the Participating Employer.
(2) The payment shall be paid only to the applicable
Participating Employer pursuant to such settlement and arrangement,
and if the settlement or arrangement is revoked prior to receipt of
the payment by the Participating Employer, payment of the
Participant's Accounts shall be subject to the otherwise applicable
terms of the Plan. If only a portion of the Participant's Accounts
are paid to a Participating Employer, the remaining portion shall be
subject to the otherwise applicable terms of the Plan.
(3) The Administration Committee shall comply with all notice and
consent provisions of the Plan which may apply to the payment."
2. Except as expressly or by necessary implication amended hereby, the
Plan shall continue in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Instrument of Amendment
to be executed as of the 1st day of November, 1995.
COLLINS & AIKMAN PRODUCTS CO.
By: /s/ Harold R. Sunday
Harold R. Sunday
Vice President, Human Resources
By:/s/ Ronald T. Lindsay
Ronald T. Lindsay
Vice President, General Counsel
and Secretary
2
<PAGE>
COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
AMENDMENT NO. 3
Statement of Purpose
Collins & Aikman Products Co. (the "Company") sponsors the Collins &
Aikman Corporation Employees' Profit-Sharing and Personal Savings Plan (the
"Plan"). The provisions of the Plan are currently set forth in Instruments of
the Company dated March 1, 1991, November 14, 1994 and November 1, 1995. By this
Amendment No. 3, the Company is amending the Plan (i) to permit rollover
contributions to the Plan and loans from the Plan to Participants, (ii) to
provide for the termination of participation in the Plan by employees of
Imperial Wallcoverings, Inc., Collins & Aikman Floorcoverings, Inc. and the
Mastercraft Fabrics division of the Company and (iii) to provide for the merger
of the Dura Gold Plan with and into the Plan.
NOW, THEREFORE, the Plan, as set forth in said Instruments dated March
1, 1991, November 14, 1994 and November 1, 1995, is further
amended as follows:
Section 2.1(c)(1) of the Plan is amended effective as of July 1, 1996
to read as follows:
"(1) Accounts(s) means such of the following accounts as are
maintained under the Plan for a Participant:
(A) After-Tax Savings Account;
(B) Before-Tax Savings Account;
(C) Company Match Account;
(D) Profit-Sharing Account; and
(E) Rollover Contribution Account."
The following new Sections 2.1(c)(54-A) and (54-B) are added
immediately following Section 2.1(c)(54) of the Plan effective as of July 1,
1996:
"(54-A) Rollover Contribution means an Employee's contribution to
the Plan pursuant to Section 4.5 of the Plan which satisfies the
requirements of Section 402 or Section 408(d)(3) of the Code for a
tax-free transfer to the Plan of a distribution (i) from a qualified
plan or (ii) from an
<PAGE>
individual retirement account holding a distribution from a qualified
plan.
(54-B) Rollover Contribution Account means the Account maintained
under the Plan for a Participant representing the Rollover
Contributions credited to the Account."
The title to Article IV of the Plan is changed to "SAVINGS
CONTRIBUTIONS, COMPANY MATCHES AND ROLLOVER CONTRIBUTIONS" and the following new
Section 4.5 is added to the end of Article IV of the Plan, all effective as of
July 1, 1996:
"SECTION 4.5. ROLLOVER CONTRIBUTIONS. Employees other than Excluded
Employees (whether or not yet Participants) may make Rollover
Contributions to the Plan as hereinafter provided. Subject to the
requirements and conditions of this Section, a Rollover Contribution
may be made to the Plan (i) by a direct contribution by the Employee or
(ii) by a direct transfer on behalf of the Employee from the trustee
(or other custodian) of another tax-qualified plan pursuant to Section
401(a)(31) of the Code. An Employee who wishes to make a Rollover
Contribution shall, in accordance with such procedures as the
Administration Committee shall establish for such purpose, so advise
the Administration Committee and furnish the Administration Committee
with such information with respect to the proposed Rollover
Contribution as the Administration Committee shall require. The
information that the Administration Committee may require may include,
without limitation, information regarding the amount, source and time
of payment to or on behalf of the Employee of the amount giving rise to
the Rollover Contribution and directions as to investment of the
Rollover Contribution in the Funds. The Administration Committee shall
advise the Trustee of the anticipated Rollover Contribution and the
Employee's instructions as to the Fund(s) in which the Rollover
Contribution is to be initially invested. A Rollover Contribution must
be made in cash (including a check or other acceptable draft). The
Rollover Contribution shall be credited to a separate Rollover
Contribution Account for the contributing Employee. If it is
subsequently determined that the contribution does not in fact meet the
requirements of a Rollover Contribution, then the contribution, as
revalued to reflect the Adjustment or other applicable Trust
adjustments, shall be distributed to the Employee (or, if the Employee
is deceased, to the Employee's Beneficiary) as soon as
<PAGE>
practicable. Any Employee who is not a Participant, but for whom a
Rollover Contribution Account is being maintained, shall be accorded
all the rights and privileges of a Participant under the Plan except
that no other contributions shall be made for or allocated to the
credit of the Employee until the person becomes a Participant pursuant
to Article III of the Plan."
Section 7.2 of the Plan is amended effective as of July 1, 1996 to
read as follows:
"SECTION 7.2. VESTING IN BEFORE-TAX SAVINGS, AFTER-TAX SAVINGS AND
ROLLOVER CONTRIBUTION ACCOUNTS. The amounts to the credit of a
Participant in the Participant's Before-Tax Savings Account, After-Tax
Savings Account and Rollover Contribution Account, as revalued to
reflect the Adjustment, shall at all times be fully Vested."
Section 8.1(b)(D) of the Plan is amended effective as of July 1, 1996
to read as follows:
"(D) pursuant to Section 8.4 from the After-Tax Savings Account and
Rollover Contribution Account."
Section 8.4 of the Plan is amended effective as of July 1, 1996 to
read as follows:
"SECTION 8.4. IN-SERVICE DISTRIBUTIONS OF AFTER-TAX SAVINGS AND
ROLLOVER CONTRIBUTIONS.
(a) General. A Participant may receive while in Service a
Distribution of all or any part of the amount to the credit of the
Participant as of such Valuation Date in the Participant's After-Tax
Savings Contribution Account or Rollover Contribution Account. Any
request for Distribution under this Section must be made in writing and
in accordance with such rules and procedures as the Benefits Committee
shall establish for such purpose.
(b) Method of Distribution. Any Distribution pursuant to this
Section shall be made in a single cash payment."
The following new Section 9.4 is added to the end of Article IX of
the Plan effective as of July 1, 1996:
"SECTION 9.4. PARTICIPANT LOANS.
<PAGE>
(a) General. Participants may borrow from the Plan in accordance
with the loan program established by the Benefits Committee and
administered by the Administration Committee. A Participant who wishes
to borrow from the Plan shall complete, sign and deliver to the
Administration Committee a loan request form furnished by the
Administration Committee for such purpose. The Participant shall
provide in detail satisfactory to the Administration Committee all
information requested on said loan request form, including without
limitation information with respect to the amount and purpose of the
requested loan. Thereafter, and in accordance with such procedures as
the Administration Committee shall establish, the Participant shall
furnish the Administration Committee such other information with
respect to the requested loan as the Administration Committee shall
request. The Administration Committee, in its sole discretion, shall
determine whether a Participant's loan request shall be granted. The
Administration Committee shall exercise its discretion in a uniform and
non-discriminatory manner.
If the Administration Committee grants a Participant's request for a
loan, the Administration Committee shall direct the Trustee in writing
to make said loan, and such written direction shall set forth the
amount, term and other pertinent terms and conditions of the loan. The
Administration Committee shall thereafter promptly provide the Trustee
with such additional documentation and information regarding the loan
as the Trustee shall request. Following the Trustee's receipt of such
written directions of the Administration Committee and any such
additional documentation and information from the Administration
Committee, the Trustee shall make said loan to the Participant out of
the assets of the Trust.
Any loan must comply with the Participant loan program established
by the Benefits Committee pursuant to this Section. In no event shall
the amount of any loan exceed (i) fifty percent (50%) of the vested
amounts to the credit of the borrowing Participant's Accounts at the
time of the loan minus the then outstanding balance of any other loans
from the Plan or (ii) if less, fifty thousand dollars ($50,000), minus
the highest outstanding balance during the year and one day period
ending on the date of the loan, of any other loan to the Participant
from the Plan or other plan of any Affiliated Group member. Repayment
of the loan shall be secured by such
<PAGE>
percentage or amount of the Participant's Accounts as is permissible
under the Act and the Code. The loan shall be held by the Trust as a
segregated, earmarked investment of the borrowing Participant's
Accounts and not as an asset of any of the Trust's Funds.
(b) Details of Participant Loan Program. The Benefits Committee
shall have the power and authority (i) to establish, and from time to
time change and amend, the specific provisions of the loan program
authorized by this Section and (ii) to suspend or eliminate the loan
program in its entirety. Not in limitation of the foregoing, the
Benefits Committee shall prescribe the conditions, restrictions and
other pertinent details of the loan program, including without
limitation rules and restrictions as to (i) the reasons for which
Participants may borrow, (ii) the types of sub-accounts for Accounts
with respect to which loans may be made, (iii) the identification and
relative priorities of the sub-account(s) and Account investment(s)
that shall fund the loans, (iv) the number of loans that may be made to
any Participant at any one time or during any particular period of
time, (v) any minimum or maximum amount of a loan, (vi) all pertinent
terms and provisions of a loan, including without limitation the
interest rate, term and default provisions thereof, and (vii) any
necessary coordination the Benefits Committee deems appropriate
regarding Distributions to Participants with outstanding loans. The
loan program shall be administered in accordance with applicable
requirements and restrictions of the Act and the Code. Not in
limitation of the foregoing:
(i) A defaulted loan shall not be charged against the borrowing
Participant's Accounts that secure the repayment of the loan while
the Participant is in Service unless and until such time as the
Participant could receive a Distribution from the Accounts
(determined as if the Plan provided for all in-Service Distributions
from the Accounts that are permitted by the Code).
(ii) The Administration Committee and Trustee shall cause to be
kept such sub-accounts and other records with respect to the
Participant's Accounts as are required by the Act or the Code to
properly account for any defaulted loan amount that is charged
against a Participant's Accounts."
<PAGE>
The following new Sections 15.7 through 15.9 are added to the end of
Article XV of the Plan effective as of July 1, 1996:
"SECTION 15.7. SPIN-OFF OF IMPERIAL WALLCOVERINGS, INC.
(a) General. Imperial Wallcoverings, Inc., a Delaware corporation
("Imperial"), is currently a Participating Employer and a member of the
Affiliated Group. The board of directors of Collins & Aikman Corporation,
the parent corporation of the Company, has approved the "spin-off" of
Imperial through a stock dividend distribution of all of the capital stock
of Imperial to the stockholders of Collins & Aikman Corporation. It is
anticipated that the stock dividend transaction will be completed during
1996. From and after the effective date of the stock dividend transaction
(the "Imperial Spin-Off Date"), Imperial will not be a member of the
Affiliated Group and may not continue as a Participating Employer as
required by Section 12.5.
(b) Termination of Imperial as a Participating Employer. Effective as
of the Imperial Spin-Off Date, Imperial shall cease to be a Participating
Employer other than for purposes of effecting the payment of benefits to
Imperial Affected Participants as contemplated by this Section 15.7.
(c) Full Vesting of Imperial Affected Participants. The amounts to the
credit of the Accounts of each Participant who is employed by Imperial on
the Imperial Spin-Off Date (an "Imperial Affected Participant") shall be
fully Vested and nonforfeitable.
(d) Payment of Benefits of Imperial Affected Participants. Each
Imperial Affected Participant shall be deemed to have separated from
Service as of the Imperial Spin- Off Date, and the benefit commencement
date of such Imperial Affected Participant may be the first day of any
calendar month following the Imperial Spin-Off Date elected by such
Imperial Affected Participant pursuant to Section 6.3(c); provided,
however, if the total Vested interest of an Imperial Affected Participant
in the Plan does not exceed three thousand five hundred dollars ($3,500),
Distribution to such Participant shall be made in a single cash payment as
soon as practicable after the Imperial Spin-Off Date.
<PAGE>
(e) Provisions Controlling. Notwithstanding any provisions of the Plan
to the contrary, the provisions of this Section 15.7 shall control with
respect to the benefits of and the timing of benefit payments to Imperial
Affected Participants.
SECTION 15.8. MERGER OF THE WICKES MANUFACTURING AND AUTOMOTIVE
AFTERMARKET DISTRIBUTION GROUP GOLD PLAN.
(a) Merger of the Gold Plan. The Wickes Manufacturing and Automotive
Aftermarket Distribution Group Gold Plan (the "Gold Plan") shall merge with
and into the Plan effective as of July 1, 1996. In connection therewith and
effective as of that date, the trust under the Gold Plan shall merge with
and into the Trust for the Plan, and the assets of the trust under the Gold
Plan shall become assets of the Plan. The Administration Committee shall
have the duty and authority to direct the Trustee with respect to the
merger and consolidation of the assets of trust of the Gold Plan on June
30, 1996 with and into the Funds being maintained by the Trustee under the
Trust on or after July 1, 1996 pursuant to Section 11.1(b).
(b) Accounts Related to Participation in the Gold Plan.
(1) Establishment of Accounts. Effective as of July 1, 1996, the
accounts being maintained for participants in the Gold Plan on June 30,
1996 shall be combined with other accounts, or maintained as separate
accounts, under the Plan as follows:
(i) Deferral Contributions Accounts. The account maintained under the
Gold Plan for a Participant who participated in the Gold Plan representing
the Participant's interest in the Participant's "elective deferral
contributions" thereunder shall become the Participant's Before-Tax Savings
Account under the Plan.
(ii) Creation of Former Gold Plan Accounts. An Account shall be
established under the Plan for each of the accounts maintained under the
Gold Plan for a Participant who participated in the Gold Plan other than
the account described in Section 15.8(b)(1)(i) of the Plan. These Accounts,
which are referred to in this Plan as "Former Gold Plan Accounts,"
correspond to the accounts maintained under the Gold Plan representing the
Participant's
<PAGE>
interest (if any) in "matching contributions," "after-tax contributions,"
"old company contributions'" and "rollover contributions" thereunder.
The Administration Committee may from time to time after July 1, 1996
combine a Participant's Former Gold Plan Accounts with other Accounts of
the Participant to the extent that the Committee determines that the
combination of Accounts is administratively feasible and permitted by the
Act and the Code.
(2) Investment of Accounts. The Accounts representing a Participant's
interest in the Gold Plan shall be held and invested from time to time in
the Funds in accordance with Participant investment designations pursuant
to Section 11.2.
(3) Investment in Participant Loans. If a loan made under the Gold Plan
to a Participant who participated in the Gold Plan is outstanding on July
1, 1996, the promissory note evidencing such loan shall be held by the
Trustee as a segregated investment allocated to and made solely for the
benefit of the Participant's Account(s) that correspond to the
Participant's account(s) under the Gold Plan that were invested in such
note. The Trustee shall become the successor lender of all such "earmarked"
loans outstanding on July 1, 1996 for all purposes, and the merger of the
Gold Plan into the Plan shall not affect the terms of the promissory note
or the security for the repayment of the promissory note evidencing such
loan.
(c) Active Participation in the Plan. The following rules shall apply
for the purpose of determining when persons with "Hours of Service" under the
Gold Plan before July 1, 1996 for employment with any participating employer in
the Gold Plan become Participants in the Plan on or after July 1, 1996:
(1) Prior Participants. With respect to persons who had become
"Participants" in the Gold Plan by June 30, 1996:
If the person is not an Excluded Employee on July 1, 1996, the person shall
become a Participant on that date.
If the person is an Excluded Employee on July 1, 1996 but one or more Accounts
are established for the person pursuant to Section 15.8(b)(1) of the Plan
because of the person's prior Gold Plan participation, the person shall become a
Participant on that date for
<PAGE>
purposes of the investment, administration and distribution of the Account(s) in
accordance with the provisions of the Plan, but the person shall not be entitled
to otherwise participate in the Plan unless and until the person's status as an
Excluded Employee ends but he remains an Employee.
(2) Other Employees. A person who had not become a "Participant" in the
Gold Plan by June 30, 1996 shall become a Participant on the earlier of (A) the
date the person would have become a "Participant" in the Gold Plan of (B) the
date the person becomes a Participant as provided in Section 3.2(b) of the Plan.
(d) Vesting. This Section 15.8(d) shall apply for purposes of
determining the Vested percentage of a Participant who earned an "Hour of
Service" under the Gold Plan by June 30, 1996. Such a Participant's Former Gold
Plan Account representing the Participant's "rollover contributions" and
"after-tax contributions" to the Gold Plan shall be fully Vested and
nonforfeitable. Such a Participant's Former Gold Plan Accounts that correspond
to the accounts that were maintained under the Gold Plan to represent the
Participant's interest in "matching contributions" and "old company
contributions" thereunder and such a Participant's Company Match Account and
Profit- Sharing Account under this Plan shall be subject to the following
vesting schedule:
Years of
Vesting Service Vested Percentage
less than 3 0%
3 33-1/3%
4 66-2/3%
5 or more 100%
(e) Distribution of Former Gold Plan Accounts.
(1) General. While a Participant is in Service, Distributions to a
Participant from the Participant's Former Gold Plan Accounts shall be
determined, to the extent required by the Act and the Code, as if the Gold Plan
had remained in effect.
Following the separation from Service of a Participant who earned an
"Hour of Service" under the Gold Plan by June 30, 1996, Distributions from the
Participant's Accounts and Former Gold Plan Accounts shall be made when and as
provided in Section 8.1(c) of the Plan, except the one year waiting period
described in Section
<PAGE>
8.1(c)(iii) applicable to Participants who separate from Service for a reason
other than Retirement, Disability or a Permanent Reduction in Force shall not
apply to such Participant.
(2) Benefit Payments in Progress. The merger of the Gold Plan into the
Plan shall not revoke or suspend any Gold Plan methods of payment elected before
or in progress on July 1, 1996, and any method of payment in progress under the
Gold Plan on July 1, 1996 with respect to a Participant's accounts thereunder
shall continue in effect with respect to the Participant's interest under the
Plan in such accounts.
(f) Beneficiary Designations. Any Participant's written beneficiary
designation in effect under the Gold Plan with respect to the Participant's
accounts thereunder shall not be revoked by reason of the merger of the Gold
Plan into the Plan. Such designation shall be effective under the Plan from and
after July 1, 1996 as designating the Beneficiary of all of the Participant's
Accounts, including any resulting Former Gold Plan Accounts, unless and until
the Participant revokes or changes the designation or the designation otherwise
becomes ineffective, in accordance with the terms and provisions of the Plan.
SECTION 15.9. SALE OF COLLINS & AIKMAN FLOORCOVERINGS, INC.
AND MASTERCRAFT FABRICS DIVISION
(a) General. Employees of Collins & Aikman Floorcoverings, Inc., a
Delaware corporation ("Floorcoverings") and the Mastercraft Fabrics Division of
the Company ("Mastercraft"), are currently eligible to participate in the Plan.
The board of directors of Collins & Aikman Corporation, the parent corporation
of the Company, has approved the disposition of Floorcoverings and Mastercraft
by means of a sale of the stock of Floorcoverings and a sale of the assets of
Mastercraft to one or more unrelated purchasers. From and after the effective
date of the stock sale transactions (the "Floorcoverings Sale Date" and the
"Mastercraft Sale Date," respectively), Floorcoverings and Mastercraft will no
longer be employed by a Participating Employer and their active participation in
the Plan shall terminate.
(b) Termination of Floorcoverings as a Participating Employer.
Effective as of the Floorcoverings Sale Date, Floorcoverings shall cease to be a
Participating Employer other than for purposes of effecting the payment of
benefits to Floorcoverings Affected Participants as contemplated by this Section
15.9.
<PAGE>
(c) Full Vesting of Affected Participants. The amounts to the credit of
the Accounts of each Participant who is employed by Floorcoverings on the
Floorcoverings Sale Date (a "Floorcoverings Affected Participant") shall be
fully Vested and nonforfeitable. The amounts to the credit of the Accounts of
each Participant who is employed by Mastercraft on the Mastercraft Sale Date (a
"Mastercraft Affected Participant") shall be fully Vested and nonforfeitable.
(d) Payment of Benefits of Affected Participants. Each Floorcoverings
Affected Participant shall be deemed to have separated from Service as of the
Floorcoverings Sale Date, and the benefit commencement date of such
Floorcoverings Affected Participant may be the first day of any calendar month
following the Floorcoverings Sale Date elected by such Floorcoverings Affected
Participant pursuant to Section 6.3(c); provided, however, if the total Vested
interest of a Floorcoverings Affected Participant's in the Plan does not exceed
three thousand five hundred dollars ($3,500), Distribution to such Participant
shall be made in a single cash distribution as soon as practicable after the
Floorcoverings Spin-Off Date. Each Mastercraft Affected Participant shall be
deemed to have separated from Service as of the Mastercraft Sale Date, and the
Benefit Commencement Date of such Mastercraft Affected Participant may be the
first day of any calendar month following the Mastercraft Sale Date elected by
such Mastercraft Affected Participant pursuant to Section 6.2; provided,
however, if the total Vested interest of a Mastercraft Affected Participant in
the Plan does not exceed three thousand five hundred dollars ($3,500),
Distribution to such Participant shall be made in a single cash distribution as
soon as practicable after the Mastercraft Spin-Off Date.
(e) Provisions Controlling. Notwithstanding any provisions of
the Plan to the contrary, the provisions of this Section 15.9 shall
control with respect to the benefits of and the timing of benefit
payments to Floorcoverings and Mastercraft Affected Participants."
Except as expressly or by necessary implication amended hereby, the
Plan shall continue in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Instrument of Amendment
to be executed as of the 8th day of November, 1996.
<PAGE>
COLLINS & AIKMAN PRODUCTS CO.
By:/s/ Harold R. Sunday
Harold R. Sunday
Vice President, Human Resources
By:/s/ Ronald T. Lindsay
Ronald T. Lindsay
Vice President, General Counsel
and Secretary
<PAGE>
COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
AMENDMENT NO. 4
Statement of Purpose
Collins & Aikman Products Co. (the "Company") sponsors the Collins &
Aikman Corporation Employees' Profit-Sharing and Personal Savings Plan (the
"Plan"). The provisions of the Plan are currently set forth in Instruments of
the Company dated March 1, 1991, November 14, 1994, November 1, 1995 and
November 8, 1996. By this Amendment No. 4, the Company is amending the Plan to
give the Plan's Administration Committee more flexibility in determining the
number and identity of "Ineligible Highly Compensated Participants."
NOW, THEREFORE, the Plan, as set forth in said Instruments dated March
1, 1991, November 14, 1994, November 1, 1995 and November 8, 1996, is further
amended as follows:
1. The third sentence of Section 2.1(c)(36) of the Plan ["To the extent
administratively . . . in inverse order of compensation."] is deleted in its
entirety effective as of January 1, 1997.
2. Except as expressly or by necessary implication amended hereby, the
Plan shall continue in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed as of the 13th day of January, 1997.
COLLINS & AIKMAN PRODUCTS CO.
By:/s/ Harold R. Sunday
Harold R. Sunday
Vice President, Human Resources
By:/s/ Ronald T. Lindsay
Ronald T. Lindsay
Vice President, General Counsel
and Secretary
<PAGE>
COLLINS & AIKMAN CORPORATION
EMPLOYEES' PROFIT-SHARING AND PERSONAL SAVINGS PLAN
AMENDMENT NO. 5
Statement of Purpose
Collins & Aikman Products Co. (the "Company") sponsors the Collins &
Aikman Corporation Employees' Profit-Sharing and Personal Savings Plan (the
"Plan"). The provisions of the Plan are currently set forth in Instruments of
the Company dated March 1, 1991, November 14, 1994, November 1, 1995, November
8, 1996 and January 13, 1997. By this Amendment No. 5, the Company is amending
the Plan to permit the transfer of the Plan accounts of participants affected by
the sale of Collins & Aikman Floorcoverings, Inc. or the Mastercraft Fabrics
division of the Company to a successor tax-qualified plan sponsored by the
purchaser in such sale transaction.
NOW, THEREFORE, the Plan, as set forth in said Instruments dated March
1, 1991, November 14, 1994, November 1, 1995, November 8, 1996 and January 13,
1997, is further amended as follows:
1. Section 15.9(e) of the Plan is redesignated Section 15.9(f), and the
following new Section 15.9(e) is inserted immediately after Section 15.9(d) of
the Plan, all effective as of January 15, 1997:
"(e) Optional Transfer of Accounts. Notwithstanding the
foregoing provisions of this Section 15.9, the Company and the
purchaser of Floorcoverings or the Company and the purchaser of
Mastercraft may agree, prior to the Floorcoverings Sale Date or the
Mastercraft Sale Date (as the case may be), that the Accounts of
Floorcoverings Affected Participants or the Accounts of Mastercraft
Affected Participants, respectively, will be transferred to a successor
tax-qualified plan maintained by such purchaser in lieu of the
distribution of such Accounts as provided in Section 15.9(d). In such
event, Section 15.9(d) shall not apply, and the Company and the
purchaser shall enter into a separate benefit transfer agreement to
provide for the transfer of the Accounts of Floorcoverings Affected
Participants or the Accounts of Mastercraft Affected Participants (as
the case may be) to the purchaser's plan. Such agreement shall include
a commitment by the purchaser to preserve under the purchaser's plan
all Code Section 411(d)(6) protected benefits earned by Participants
earned under this Plan."
2. Except as expressly or by necessary implication amended hereby, the
Plan shall continue in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Instrument of Amendment
to be executed as of the _____ day of __________, 1997.
COLLINS & AIKMAN PRODUCTS CO.
By:/s/ Harold R. Sunday
Harold R. Sunday
Vice President, Human Resources
By:/s/ Ronald T. Lindsay
Ronald T. Lindsay
Vice President, General Counsel
and Secretary
EXHIBIT 5.1
INTERNAL REVENUE SERVICE
DISTRICT DIRECTOR
P. O. BOX 1055
ATLANTA, GA 30370 Employer Identification Numbers
13-0588710
Date: September 7, 1995 File Folder Number:
566000019
COLLINS & AIKMAN PRODUCTS CO. Person to Contact:
701 McCullough Drive CATHY GREENWOOD
Charlotte, NC 28262 Contact Telephone Number:
(404) 331-0936
Plan Name:
COLLINS & AIKMAN CORP. EES
PROFIT SHARING & PRSNL SAV PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on you plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed
amendments submitted in your letter dated 09/05/95. The proposed amendments
should be adopted on or before the date prescribed by the regulations under Code
Section 401(b).
This determination letter is applicable for the amendment(s) adopted on
03/01/91 & 11/14/94.
This plan satisfies the minimum coverage requirements on the basis of
the average benefit test in section 410(b)(2) of the Code.
<PAGE>
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a) (4)-1(b)(2) of the regulations on the basis of a design-based
safe harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise specified
in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Nelson A. Brooke
Nelson A. Brooke
District Director
Enclosures:
Publication 794
Addendum
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 19, 1997
included in Collins & Aikman Corporation's Transition Report on Form 10-K for
the Transition Period from January 28, 1996 to December 31, 1996, our report
dated July 17, 1997 included in the annual report on Form 11-K of the Collins &
Aikman Corporation Employees' Profit Sharing and Personal Savings Plan for the
fiscal year ended December 31, 1996, and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
Charlotte, North Carolina
August 22, 1997
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-8 of our
report dated February 9, 1996, on our audits of the financial statements of
JPS Automotive L.P. and subsidiaries as of December 31, 1995 and January 1, 1995
and for the year ended December 31, 1995 and the period June 29, 1994 to
January 1, 1995.
Coopers & Lybrand L.L.P.
Spartanburg, South Carolina
August 27, 1997
