<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Advantica Restaurant Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3487402
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
203 East Main Street, Spartanburg, SC 29319
(Address of Principal Executive Offices) (Zip Code)
Denny's 401(k) Plan
(Full title of the plan)
----------------------------------------
Rhonda J. Parish, Esq.
Executive Vice President, General Counsel and Secretary
Advantica Restaurant Group, Inc.
203 East Main Street
Spartanburg, South Carolina 29319
(864) 597-8000
(Name, address and telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount to be Proposed Proposed Amount of
Securities to Be Registered Maximum Maximum Registration
Registered Offering Price Aggregate Fee
Per Share Offering
Price
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 2,000,000 $10.469 (2) $20,938,000 (2) $6,177
value (1)
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered pursuant to the employee benefit plan(s)
described herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933, based upon
the average of the high and low prices of the Registrant's Common Stock
reported on the Nasdaq Stock MarketSM on June 25, 1998, which prices
were $10.688 and $10.250, respectively.
<PAGE> 2
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been filed by Advantica Restaurant Group,
Inc. ("Advantica" or the "Registrant") with the Securities and Exchange
Commission (the "Commission") and are hereby incorporated by reference in this
Registration Statement:
(1) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997, filed with the Commission pursuant to Section
13 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
including the Registrant's Amendment No. 1 to Annual Report on Form
10-K/A filed as of the date hereof pursuant to Rule 15d-21 under the
1934 Act containing information required by Form 11-K with respect to
the plan;
(2) The Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended April 1, 1998.
(3) The Registrant's current reports on Form 8-K reporting
events occurring on January 7, 1998, January 15, 1998, April 1, 1998
and June 10, 1998; and
(4) The section entitled "Description of Registrant's
Securities To Be Registered" in Registrant's Registration Statement on
Form 8-A, filed with the Commission pursuant to the 1934 Act.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14, and 15(d) of the 1934 Act, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Advantica Restaurant Group, Inc. is a Delaware corporation. Reference
is made to Section 102(b)(7) of the Delaware General Corporation Law (the
"DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions) or (iv) for any transaction from which a director
derived an improper personal benefit.
Reference is also made to Section 145 of the DGCL, which provides that
a corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was an officer,
director, employee or agent of such corporation or is or was serving at the
request of such corporation as an officer, director, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorney's fees), judgements, fines and amounts
<PAGE> 3
paid in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding, provided such officer, director, employee
or agent acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. A Delaware corporation may indemnify officers, directors,
employees and agents in an action by or in the right of the corporation under
the same conditions, except that no indemnification is permitted without
judicial approval if the officer, director, employee or agent is adjudged to be
liable to the corporation. Where an officer, director, employee or agent is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses that such
officer, director, employee or agent actually and reasonably incurs.
Advantica's Restated Certificate of Incorporation and By-Laws provide
for indemnification of its officers and directors to the full extent permitted
under Delaware law. Specifically, Articles Sixth and Seventh of the Restated
Certificate of Incorporation provide for indemnification of officers and
directors to the extent permitted by Section 145 of the DGCL and the elimination
of liability of directors to the extent permitted by Section 102(b)(7) of the
DGCL, and Article 5, Section 14 of the By-Laws provides for indemnification of
officers and directors to the extent permitted by Section 145 of the DGCL.
Consequently, the registrant maintains officers' and directors' liability
insurance for the benefit of its officers and directors. The Employment
Agreement dated as of January 7, 1998 between Advantica and James B. Adamson
also provides for indemnification by the Company to the extent permitted by
Delaware law and, in connection therewith, calls for the advancement of
attorney's fees and expenses (subject to repayment in certain circumstances).
The Registration Rights Agreement, dated as of January 7, 1998, among Advantica
and each of the holders of registrable securities named therein, provides for
indemnification by Advantica of the holder of registrable securities that is a
party thereto for control person liability, if any, in respect of certain claims
under the Securities Act.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits
(A) The following exhibits are filed as a part of this Registration
Statement:
Exhibit No. Description
- ----------- -----------
4.1 Denny's 401(k) Plan
*4.2 Specimen Certificate of Common Stock of Advantica
(incorporated by reference to Exhibit 4.1 to Amendment No. 2
to the Registration Statement (No. 333-45811) of Advantica)
23.1 Consent of Deloitte & Touche, LLP
24.1 Power of Attorney (contained on the signature page to the
Registration Statement)
* Certain of the exhibits to this Registration Statement on Form S-8,
indicated by asterisk are hereby incorporated by reference to other
documents on file with the Commission with which they are physically
filed, to be part hereof as of their respective dates.
(B) In lieu of attaching as an exhibit the Internal Revenue Service
determination letter that the Denny's 401(k) Plan is qualified under Section 401
of the Internal Revenue Code of 1986, as amended, the Registrant hereby
undertakes that it has submitted or will submit the Denny's 401(k) Plan and any
amendments thereto to the Internal Revenue Service ("IRS") in a timely manner
and has made or will make all changes required by the IRS in order to qualify
such plan, as amended.
<PAGE> 4
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
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.
(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.
(4) That for the 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.
(5) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Spartanburg, State of South Carolina, on this 26th
day of June, 1998.
ADVANTICA RESTAURANT GROUP, INC.
By: /s/ RHONDA J. PARISH
-----------------------------------
Rhonda J. Parish
Executive Vice President,
General Counsel and Secretary
Each person whose signature appears below constitutes and appoints
Rhonda J. Parish as his or her lawful attorney-in-fact and agent, acting alone,
with full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign any or all
amendments (including, post-effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto, and other documents, in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, acting alone, or his or her 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 dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director, Chairman, President and Chief June 26, 1998
/s/ JAMES B. ADAMSON Executive Officer (Principal Executive Officer)
- -----------------------------------
(James B. Adamson)
/s/ RONALD B. HUTCHISON Executive Vice President and Chief Financial June 26, 1998
- ----------------------------------- Officer (Principal Financial and Accounting Officer)
(Ronald B. Hutchison)
/s/ ROBERT H. ALLEN Director June 26, 1998
- -----------------------------------
(Robert H. Allen)
Director June 26, 1998
- -----------------------------------
(Ronald E. Blaylock)
Director June 26, 1998
- -----------------------------------
(Vera King Farris)
/s/ JAMES J. GAFFNEY Director June 26, 1998
- -----------------------------------
(James J. Gaffney)
/s/ IRWIN N. GOLD Director June 26, 1998
- -----------------------------------
(Irwin N. Gold)
/s/ ROBERT E. MARKS Director June 26, 1998
- -----------------------------------
(Robert E. Marks)
Director June 26, 1998
- -----------------------------------
(Charles F. Moran)
/s/ ELLIZABETH A. SANDERS Director June 26, 1998
- -----------------------------------
(Elizabeth A. Sanders)
/s/ DONALD R. SHEPHERD Director June 26, 1998
- -----------------------------------
(Donald R. Shepherd)
</TABLE>
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Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Spartanburg, State of
South Carolina, on June 26, 1998.
Denny's 401(k) Plan
By /s/ Stephen W. Wood
-------------------------------------
Stephen W. Wood
Executive President, Human Resources
and Corporate Affairs
Advantica Restaurant Group, Inc.
<PAGE> 1
EXHIBIT 4.1
DENNY'S INC. PROFIT SHARING RETIREMENT PLAN
AMENDED AND RESTATED
AS OF JANUARY 1, 1987
<PAGE> 2
TABLE OF CONTENTS
OF
DENNY'S INC. PROFIT SHARING RETIREMENT PLAN
<TABLE>
<S> <C> <C>
ARTICLE I. RECITALS.......................................................................................-1-
ARTICLE II. DEFINITIONS AND CONSTRUCTION...................................................................-2-
2.1 Definitions...................................................................................-2-
2.2 Construction.................................................................................-18-
2.3 Governing Law................................................................................-18-
2.4 Effect of Restatement........................................................................-18-
ARTICLE III. PARTICIPATION AND SERVICE.....................................................................-19-
3.1 Participation................................................................................-19-
3.2 Service......................................................................................-19-
3.3 Inactive Status..............................................................................-19-
3.4 Participation and Service Upon Reemployment..................................................-19-
ARTICLE IV. CONTRIBUTIONS AND FORFEITURES.................................................................-21-
4.1 Matching Contributions and Pre-Tax Deferrals.................................................-21-
4.2 Employee After-Tax Contributions by Participants Not Permitted...............................-21-
4.3 Participant's Election to Make Pre-Tax Deferrals.............................................-21-
4.4 Limitations on Pre-Tax Deferrals and on Matching Contributions and
Employee After-Tax Contributions.............................................................-22-
4.5 Rollover Contributions.......................................................................-27-
4.6 Disposition of Forfeitures...................................................................-28-
4.7 Pay Back Provision...........................................................................-29-
ARTICLE V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.........................................................-30-
5.1 Individual Accounts..........................................................................-30-
5.2 Account Adjustments..........................................................................-30-
5.3 Maximum Additions............................................................................-32-
ARTICLE VI. BENEFITS......................................................................................-39-
6.1 Retirement or Disability.....................................................................-39-
6.2 Death and Designation of Beneficiary.........................................................-39-
6.3 Termination for Other Reasons................................................................-40-
6.4 Payment of Benefits..........................................................................-42-
6.5 Withdrawals by Participants..................................................................-45-
6.6 No Loans to Participants.....................................................................-48-
6.7 Distributions Pursuant to Qualified Domestic Relations Orders................................-48-
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE VII. TRUST FUND...................................................................................-52-
7.1 Trust Fund...................................................................................-52-
7.2 Collective Investment Subaccounts............................................................-52-
7.3 Special Provisions Regarding Investment of Trust Assets in Employer Stock....................-53-
ARTICLE VIII. ADMINISTRATION..............................................................................-56-
8.1 Allocation of Responsibility Among Fiduciaries for Plan Administration.......................-56-
8.2 Appointment of Committee.....................................................................-56-
8.3 Claims Procedure.............................................................................-57-
8.4 Records and Reports..........................................................................-57-
8.5 Other Committee Powers and Duties............................................................-57-
8.6 Rules and Decisions..........................................................................-58-
8.7 Committee Procedures.........................................................................-58-
8.8 Authorization of Benefit Payments............................................................-59-
8.9 Application and Forms for Benefits...........................................................-59-
8.10 Facility of Payment..........................................................................-59-
8.11 Inability to Locate Participant, Surviving Spouse or Beneficiary.............................-59-
8.12 Omission of Eligible Employee................................................................-59-
8.13 Inclusion of Ineligible Employee.............................................................-60-
8.14 Bonding......................................................................................-60-
8.15 Indemnification..............................................................................-60-
8.16 Plan Administrator's Discretion to Interpret the Plan........................................-60-
ARTICLE IX. MISCELLANEOUS.................................................................................-61-
9.1 Nonguarantee of Employment...................................................................-61-
9.2 Rights to Trust Assets.......................................................................-61-
9.3 Nonalienation of Benefits....................................................................-61-
9.4 Discontinuance of Employer Contributions.....................................................-61-
ARTICLE X. AMENDMENTS AND ACTION BY EMPLOYER..............................................................-62-
10.1 Amendments...................................................................................-62-
10.2 Special Rules Regarding Amendments Relating to Vesting.......................................-62-
10.3 Action by Employer...........................................................................-63-
ARTICLE XI. SUCCESSOR EMPLOYER AND MERGER
OR CONSOLIDATION OF PLANS..................................................................................-64-
11.1 Successor Employer...........................................................................-64-
11.2 Plan Assets in the Event of Merger or Consolidation of Plans.................................-64-
ARTICLE XII. PLAN TERMINATION.............................................................................-65-
12.1 Right to Terminate...........................................................................-65-
12.2 Partial Termination..........................................................................-65-
12.3 Liquidation of the Trust Fund................................................................-65-
</TABLE>
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<TABLE>
<S> <C> <C>
12.4 Manner of Distribution.......................................................................-65-
ARTICLE XIII. RELATED CORPORATIONS........................................................................-66-
13.1 Joinder......................................................................................-66-
13.2 Contributions................................................................................-66-
13.3 Treatment of Employee Transfers..............................................................-66-
13.4 Commingling of Funds.........................................................................-67-
</TABLE>
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<PAGE> 5
DENNY'S INC. PROFIT SHARING RETIREMENT PLAN
AMENDED AND RESTATED
AS OF JANUARY 1, 1987
THIS PLAN, amended and restated as of January 1, 1987, by Denny's Inc.
for itself and its affiliates which have adopted this plan pursuant to its terms
as listed on Appendix A (collectively, the "Employer");
W I T N E S S E T H:
ARTICLE I. RECITALS
A. Effective as of January 1, 1973, the Employer adopted the Denny's
Inc. Profit Sharing Retirement Plan to encourage savings by eligible employees.
B. The Plan was subsequently amended and restated several times.
Effective as of January 1, 1987 (or as otherwise provided herein), the Employer
again desires to restate the Plan and has adopted the amended and restated Plan
as set forth herein.
C. The Plan and Trust are intended to meet the requirements of Sections
40l(a), 401(k) and 50l(a) of the Internal Revenue Code.
D. The provisions of this Plan shall apply only to an employee who has
an Hour of Service on or after the Effective Date. The rights and benefits, if
any, of a former employee shall be determined in accordance with the prior
provisions of the Plan in effect on the date his employment terminated.
NOW, THEREFORE, Denny's Inc. for itself and its affiliates who have
adopted this Plan hereby amends and restates the Denny's Inc. Profit Sharing
Retirement Plan in accordance with the following terms and provisions.
<PAGE> 6
ARTICLE II. DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following words and phrases, when used herein,
unless their context clearly indicates otherwise, shall have the following
respective meanings:
(1) ACTUAL CONTRIBUTION PERCENTAGE or ACP: For any Plan Year
beginning after December 31, 1986, with respect to Participants who are members
of the Highly Compensated Employee group and the Non-Highly Compensated Employee
group, the average of the ratios (expressed as a percentage and calculated
separately for each Eligible Participant in each group) of:
(a) the Matching Contributions and any Employee After-Tax
Contributions paid under the Plan on behalf of each Eligible Participant for
such Plan Year (plus, such other Pre-Tax Deferrals or qualified non-elective
contributions under this or any other plan of the Employer or Aggregated
Employer as may be permitted under the Commissioner's regulations), to
(b) each Eligible Participant's Compensation for such Plan
Year.
If other plans of the Employer or any Aggregated Employer have employee
contributions or matching contributions under Code ss.401(m), then all such
plans shall be treated as one plan for purposes of calculating the Participants'
ACP (using for this purpose each such plan's definition of ACP), but such
aggregation shall take place only to the extent that such plans are treated as
one plan for purposes of Code ss.410(b).
(2) ACTUAL DEFERRAL PERCENTAGE or ADP: For any Plan Year
beginning after December 31, 1986, with respect to the Highly Compensated
Employee group and Non-Highly Compensated Employee group, the average of the
ratios (expressed as a percentage and calculated separately for each Eligible
Participant in each group) of:
(a) the amount of Pre-Tax Deferrals paid over to the Trust
on behalf of each Eligible Participant, (plus such other Matching Contributions
and other qualified nonelective contributions allocated to the Participant's
Pre-Tax Deferrals Account, as may be permitted under the Commissioner's
regulations), to
(b) each Eligible Participant's Compensation for the Plan
Year.
If other plans of the Employer or any Aggregated Employer have cash or deferred
arrangements under Code ss.401(k), then all such plans shall be treated as one
plan for purposes of calculating Participants' ADP, but only to the extent that
such plans are treated as one plan for purposes of Code ss.410(b). Furthermore,
for the purpose of determining the ADP of any Highly Compensated Employee, all
plans of the Employer and any Aggregated Employer which have cash or deferred
arrangements under Code ss.401(k) shall be treated as one plan.
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<PAGE> 7
(3) ADDITIONS or ANNUAL ADDITIONS: With respect to each
Participant for each Limitation Year, the sum of: all Matching Contributions and
Forfeitures (if any) allocated to his Matching Account; plus all Pre-Tax
Deferrals allocated to his Pre-Tax Deferrals Account; plus all Employee
After-Tax Contributions (if any) for such Limitation Year which were allocated
to his Employee After-Tax Contribution Account (provided, that Employee
After-Tax Contributions for Plan Years beginning prior to January 1, 1987 shall
be considered to be Additions only to the extent they were considered as
Additions under the Code in existence as of that Plan Year). The term "Annual
Additions" does not include the following: amounts contributed to an account
because of an erroneous Forfeiture or an erroneous failure to allocate in a
prior Limitation Year, but such Forfeiture reinstatement or contribution (less
actual investment gains attributable to the period subsequent to the Limitation
Year to which it relates) will be considered an Annual Addition for the
Limitation Year to which it relates; the allowable restoration of accrued
benefits following either repayment of withdrawn mandatory Employee
contributions or repayments of benefits paid out; amounts distributed from the
Plan as permitted by Code ss.402(g)(2) and Treasury Regulation
ss.1.415-6(b)(6)(iv); or the transfer of funds from another qualified plan.
Furthermore, with respect to a Participant's Employee After-Tax Contributions,
the term "Annual Additions" does not include the following: rollover
contributions as permitted under ERISA; repayments of loans made to a
Participant; allowable repayments of either withdrawn mandatory Employee
contributions or benefits paid out; qualified voluntary Employee contributions
allowed under Code ss.219(e)(2); or the direct transfer of funds from another
qualified plan, if any, pursuant to Section 4.5 of this Plan. Amounts allocated
after March 31, 1984 to an individual medical account (as defined in Code
ss.415(1)(2)) which is part of a pension or annuity plan maintained by the
Employer shall be treated as Annual Additions to a defined contribution plan.
Amounts derived from contributions paid or accrued after December 31, 1985 in
taxable years ending after such date, which are attributable to post-retirement
medical benefits under a welfare benefit fund (as defined in Code ss.419(e))
maintained by the Employer which are allocated to the separate account of an
Employee who is or was a Key Employee during the Plan Year or the preceding Plan
Year, also shall be treated as Annual Additions to a defined contribution plan.
(4) AGGREGATED EMPLOYER: An employer (whether or not
considered an Employer under the Plan) required to be aggregated with the
Employer under subsection b, c, m, n or o of Code ss.4l4; provided, that another
employer shall be an Aggregated Employer for any Plan Year only to the extent
the foregoing subsections of Code ss.414 applied with respect to that Plan Year,
and only to the extent such employer is required to be aggregated
notwithstanding the separate lines of business provisions of Code ss.414(r).
(5) ALTERNATE PAYEE: A beneficiary as defined in Section 6.7.
(6) ANNIVERSARY DATE: December 31 of each year.
(7) AUTHORIZED LEAVE OF ABSENCE: Any absence authorized in
writing by the Employer under the Employer's standard personnel practices,
provided that all persons under similar circumstances must be treated alike in
the granting of such Authorized
-3-
<PAGE> 8
Leaves of Absence and provided further that the Participant returns within the
period of authorized absence. An absence due to service in the Armed Forces of
the United States shall be considered an Authorized Leave of Absence to the
extent required by applicable statutes of the United States in effect from time
to time, provided that the Employee returns to employment with the Employer
within the period provided by law.
(8) BENEFICIARY: A person or persons (natural or otherwise)
designated in accordance with the provisions of Section 6.2(b) to receive any
death benefit which shall be payable under this Plan.
(9) BREAK IN SERVICE: A Break in Service shall occur for any
consecutive twelve-month period after the Effective Date beginning on an
Employee's Severance From Service Date and ending on the first anniversary of
such date during which the Employee fails to complete one Hour of Service. A
Break in Service shall not be deemed to have occurred during any period of
Authorized Leave of Absence if the Employee returns to the employ of the
Employer within the period of authorized absence.
Solely for purposes of determining whether a Break in
Service has occurred in a computation period for participation and vesting
purposes, an individual who is absent from work beyond the first anniversary of
the first day of absence for a period by reason of Maternity Leave (as defined
in Section 2.1) shall receive credit for the period of Service from the first
anniversary of the first day of absence to the second anniversary of the first
day of absence. Such Service shall only count as Service for purposes of
determining whether a Break in Service has occurred and shall not otherwise
count as a period of Service or a Period of Severance.
(10) CHANGE DATE: The first day of any payroll period. The
Committee may designate different Change Dates for different purposes, for
example, fewer Change Dates may be designated to reduce Pre-Tax Deferrals than
to increase Pre-Tax Deferrals.
(11) CODE: The Internal Revenue Code of 1986, as amended.
(12) COMMISSIONER: The Commissioner of Internal Revenue. For
purposes of this Plan, Commissioner also refers to the Department of the
Treasury with respect to official regulations and pronouncements under the Code.
(13) COMMITTEE: The person or persons appointed under the
provisions of Article VIII to administer the Plan.
(14) COMPENSATION:
(a) The total of all amounts paid to a Participant
by the Employer within the meaning of Code ss.3401(a) and all other payments of
compensation to a Participant by the Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the Participant
a written statement under Code ss.ss.6041(d), 6051(a)(3) and
-4-
<PAGE> 9
6052 ("Box 1" compensation on 1993 Form W-2) for the Plan Year; plus any amounts
not includible by the Employer in the Participant's income for that Plan Year by
virtue of Participant salary deferrals pursuant to Code ss.ss.125, 401(k),
403(b), 408(k) or, for active Employees, payments from the Employer's vacation
trust. Compensation shall not include reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits (such exclusions to include, without
limitation, severance pay, relocation allowances, gross-up pay to compensate for
taxable reimbursements, hiring bonuses, imputed income for use of Employer
property and services, compensation resulting from participation in any stock
option plan, overseas pay, cost of living differentials and any type of non-cash
compensation).
(b) For Plan Years beginning prior to January 1, 1989
in which the Plan is a Top-Heavy Plan, and for any Plan Year beginning after
December 31, 1988 but before January 1, 1994 (regardless of whether the Plan is
a Top-Heavy Plan), the Compensation taken into account for any Employee shall
not exceed $200,000 for any Plan Year (or such greater amount as authorized by
the Commissioner). For Plan Years beginning after December 31, 1993, the
Compensation taken into account for any Employee shall not exceed $150,000 for
any Plan Year (or such greater amount as authorized by the Commissioner),
regardless of whether the Plan is a Top-Heavy Plan. In determining the
Compensation of a Participant for purposes of this adjusted $150,000 (or
$200,000) limitation, the family aggregation rules of Code 414(q)(6) shall
apply, except that in applying these rules, the term Family Member shall include
only the spouse of a Participant and any lineal descendants of a Participant who
have not attained age nineteen before the last day of the Plan Year. If the
adjusted $150,000 (or $200,000) limitation is exceeded as a result of the
application of this family aggregation rule, then the limitation shall be
prorated among the affected individuals in proportion to each such individual's
Compensation as determined under this section prior to the application of this
limitation.
(c) In the event that the definition of Compensation
as stated above is subject to the nondiscrimination requirement of Treasury
Regulation ss.1.414(s)-1(d)(3), the average percentage of total compensation for
all Highly Compensated Employees shall not exceed by more than a de minimis
amount the average percentage of total compensation for all employees who are
not Highly Compensated Employees within the meaning of Treasury Regulation
ss.1.414(s)-1(d)(3). In the event that this provision requires that Compensation
for Highly Compensated Employees be reduced, such reduction shall be made by
decreasing the Compensation for all Highly Compensated Employees by the same
percentage, such percentage to be the smallest whole percentage necessary to
satisfy Treasury Regulation ss.1.414(s)-1(d)(3).
(15) DETERMINATION DATE: The last day of the preceding
Plan Year (or, in the case of the first Plan Year of the Plan, the last day of
that first Plan Year).
(16) DIRECT ROLLOVER: A payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
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<PAGE> 10
(17) DISABILITY: Any medically determinable physical or mental
impairment resulting from sickness, accident or other injury which may be
expected to be permanent and continuous and which renders the Participant
incapable of performing the duties of his employment. The determination of the
Committee as to whether a Participant is disabled under this subsection, based
upon the certification of one or more physicians or surgeons selected by it,
shall be final and binding on all persons.
(18) DISTRIBUTEE: An Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relations Order, as defined in Code ss.414(p), are
Distributees with regard to the interest of the spouse or former spouse.
(19) DOMESTIC RELATIONS ORDER: An order as defined in Section
6.7.
(20) EARLIEST RETIREMENT AGE: The date on which a Participant
becomes eligible to elect to receive normal retirement benefits under Section
6.1.
(21) EFFECTIVE DATE: January 1, 1987, the date on which the
provisions of this amended and restated Plan became effective; provided, that
specific provisions of this Plan may be effective as of other dates to the
extent specifically stated in the Plan. The Original Effective Date of this Plan
is January 1, 1973.
(22) ELIGIBLE PARTICIPANT: With respect to any Plan Year, a
Participant who is eligible to make a Pre-Tax Deferral or Employee After-Tax
Contribution, or to receive a Matching Contribution under this Plan.
(23) ELIGIBLE RETIREMENT PLAN: An individual retirement
account described in Code ss.408(a), an individual retirement annuity described
in Code ss.408(b), an annuity plan described in Code ss.403(a), or a qualified
trust described in Code ss.401(a), that accepts the Distributee's Eligible
Rollover Distribution; provided, that in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
(24) ELIGIBLE ROLLOVER DISTRIBUTION: Any distribution of all
or any portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include (i) any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or more; (ii) any
distribution to the extent such distribution is required under Code
ss.401(a)(9); and (iii) the portion of any distribution that is not includible
in gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to Employer securities).
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<PAGE> 11
(25) EMPLOYEE:
(a) Any person, including any officer, who, on
or after the Effective Date, is receiving remuneration for personal services
rendered to the Employer (or who would be receiving such remuneration except for
an Authorized Leave of Absence).
(b) Employee shall not include independent
contractors or any individual who is included in a unit of employees covered by
a collective bargaining agreement (within the meaning of Code ss.7701(a)(46))
between an employee representative and the Employer under which retirement
benefits were the subject of good faith bargaining between the parties (unless
and only to the extent that the collective bargaining agreement expressly
provides for inclusion in this Plan).
(c) Leased employees under Code ss.414 shall not
be included in the definition of Employee for purposes of Participation or
benefit accrual under the Plan; provided, that such leased employees shall be
considered as employees for purposes of applying the various tests under Code
ss.ss.401, 404, 408(k) and 416, and Service as a leased employee shall be
counted under the Plan for vesting purposes in the event that a leased employee
changes status so as to become eligible for Participation under the Plan.
(26) EMPLOYEE AFTER-TAX CONTRIBUTIONS: Contributions made
by a Participant on an after-tax basis prior to June 30, 1984, pursuant to
Section 4.2 of the Plan.
(27) EMPLOYEE AFTER-TAX CONTRIBUTION ACCOUNT: The account
maintained to record a Participant's Employee After-Tax Contributions under
Section 4.2 made prior to June 30, 1984, and adjustments relating thereto.
(28) EMPLOYER: Denny's Inc., a corporation organized and
existing under the laws of the State of California, or its successor or
successors that assume Plan liabilities pursuant to Article XI and any related
corporation or entity which adopts this Plan with the consent of Denny's Inc.
Adopting Employers as of January 1, 1994, are listed on Appendix A.
(29) EMPLOYER STOCK: The preferred and/or common stock of
the Employer, its parent corporation (Flagstar Corporation) or any other
corporation which is a member of the same controlled group with the Employer (as
defined in Code Section 414(b)).
(30) ENTRY DATE: Any date coincidental with a Change Date.
(31) ERISA: Public Law No. 93-406, the Employee Retirement
Income Security Act of l974, as amended from time to time.
(32) EXCESS CONTRIBUTIONS: With respect to any Plan Year,
the excess of:
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<PAGE> 12
(a) The aggregate amount of Matching
Contributions and any Employee After-Tax Contributions (plus any Pre-Tax
Deferrals or qualified non-elective contributions taken into account in
computing the ACP) actually made for that Plan Year on behalf of a Highly
Compensated Employee, over
(b) the maximum amount of such contributions
permitted under the limitations of Section 4.4(b), determined by reducing such
contributions made on behalf of Highly Compensated Employees in order of their
individual Actual Contribution Percentages beginning with the highest such
percentage.
(33) EXCESS DEFERRALS: With respect to any Plan Year, the
excess of:
(a) the aggregate amount of Pre-Tax Deferrals
(plus such other Matching Contributions and other qualified non-elective
contributions taken into account under Code ss.401(k)(3)(D) in computing the
ADP) actually paid over to the Trust for that Plan Year on behalf of a Highly
Compensated Employee, over
(b) The maximum amount of such deferrals
permitted under the limitations of Section 4.4(a), determined by reducing
Pre-Tax Deferrals made on behalf of Highly Compensated Employees in order of
their individual Actual Deferral Percentages beginning with the highest such
percentage.
(34) FAMILY MEMBER: With respect to any individual, his
spouse and lineal ascendents or descendents, and the spouses of such lineal
ascendents and descendents.
(35) FIDUCIARIES OR NAMED FIDUCIARIES: The Employer, the
Committee and its members, and the Trustee, but only with respect to the
specific responsibilities of each for Plan administration, all as described in
Section 8.1. If an Investment Manager is appointed as provided in Section 8.1,
it also shall be a Fiduciary.
(36) FIVE PERCENT OWNER: With respect to a Plan Year, an
owner of more than five percent of the outstanding stock (or an owner of stock
possessing more than five percent of the total combined voting power, or an
owner of more than five percent of the capital or profits interest of an
unincorporated business) of the Employer or of any one of the Aggregated
Employers (ownership in the Employer and Aggregated Employers not being
considered together). In determining ownership, the constructive ownership rules
of Code ss.416(i)(1)(B)(iii) shall apply.
(37) FORFEITURE: The portion of a Participant's Matching
Account which is forfeited under Section 6.3 below because of termination of
employment before full vesting.
(38) FORMER PARTICIPANT: A Participant whose employment
with the Employer has terminated but who has a vested account balance under the
Plan which has not been paid in full.
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<PAGE> 13
(39) 4l5 COMPENSATION: The total of all amounts paid to a
Participant by the Employer within the meaning of Code ss.3401(a) and all other
payments of compensation to a Participant by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to furnish the
Participant a written statement under Code ss.ss.6041(d), 6051(a)(3) and 6052
("Box 1" compensation on 1993 Form W-2) for the Plan Year; provided, that for
all purposes other than determining compliance with Code ss.415 (as described in
Section 5.3) 415 Compensation also shall include elective or salary reduction
contributions to a cash or deferred arrangement, cafeteria plan, simplified
employee pension or tax-sheltered annuity pursuant to Code ss.ss.401(k), 125,
408(k) or 403(b). For purposes of computing a Participant's ACP and ADP, only
415 Compensation paid while a Participant shall be considered.
(40) HIGHLY COMPENSATED EMPLOYEE: Any Employee of the Employer
who is a "highly compensated employee" as defined in Code ss.414(q) and the
regulations thereunder. With respect to any Plan Year, such definition generally
shall include any Employee or former Employee who during the Plan Year:
(a) was at any time a Five Percent Owner;
(b) received 415 Compensation from the Employer and
all Aggregated Employers in excess of $75,000 (or greater amount authorized by
the Commissioner);
(c) both received 415 Compensation from the Employer
and all Aggregated Employers in excess of $50,000 (or greater amount authorized
by the Commissioner) and was in the Top Paid Group of employees for such Plan
Year; or
(d) was at any time both an officer (as defined and
limited in the definition of Key Employee) and had 415 Compensation in excess of
fifty percent of the amount in effect under Code ss.415(b)(1)(A) for such Plan
Year, provided that at least the one highest paid officer shall always be taken
into account for a Plan Year.
If any employee is a Family Member of (i) a Five Percent Owner or (ii) a Highly
Compensated Employee who is in the group consisting of the ten Highly
Compensated Employees receiving the most 415 Compensation during the Plan Year,
then such Employee shall not be considered a separate employee, but shall be
aggregated with all his Family Members so that any 415 Compensation and any Plan
contributions or benefits (including Pre-Tax Deferrals) are treated as if paid
to or on behalf of one single Highly Compensated Employee.
Notwithstanding the foregoing, this Plan has a calendar Plan
Year and has elected to use the "calendar year calculation election" described
in ss.1.414(q)-1T, Q&A 14(b) of the Commissioner's regulations and thus need not
consider the prior Plan Year in determining who is a Highly Compensated
Employee. In the event that this Plan ceases to have a calendar Plan Year, then
an individual also will be a Highly Compensated Employee if he met any of the
above criteria during the prior Plan Year.
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<PAGE> 14
A former employee also shall be considered a Highly
Compensated Employee if he was a Highly Compensated Employee for the year of
separation from Service or for any Plan Year ending on or after the employee
attains age fifty-five.
(41) HOUR OF SERVICE or HOUR OF CREDITED SERVICE:
(a) Each hour during the applicable computation
period when the Employee is directly or indirectly paid or entitled to payment
by the Employer for the performance of duties for the Employer. An Hour of
Service also includes each hour for which an Employee is paid or entitled to
payment by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), lay-off, jury duty, military duty or Authorized Leave of Absence.
(b) Hours of Service determined under the preceding
sentences shall include each hour for which back pay, irrespective of mitigation
of damages, has been awarded or agreed to by the Employer; provided that (i) no
more than 50l Hours of Service are required to be credited to an Employee on
account of any single continuous period during which he performs no duties
whether or not such period occurs in a single computation period, (ii) such
hours will be credited to the Employee for the computation period or periods to
which the award or agreement pertains, (iii) an hour for which an Employee is
directly or indirectly paid or entitled to payment on account of a period during
which no duties are performed will not be credited if such payment is on account
of compliance with worker's compensation or unemployment compensation or
disability insurance laws, and (iv) hours will not be credited for payments
which solely reimburse an Employee for medical or medically related expenses
incurred by him.
(c) In applying the rules of the preceding sentences,
the provisions of paragraphs (b) and (c) of Section 2530.200b-2 of the
Department of Labor regulations shall apply and are incorporated herein by
reference.
(42) INCOME: The net gain or loss of the Trust Fund from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities, other investment transactions and
expenses paid from the Trust Fund. In determining the Income of the Trust Fund
for any period, assets shall be valued on the basis of their fair market value.
Amounts which are distributed to Participants as Excess Contributions, Excess
Deferrals, or excess amounts under Code ss.402(g) shall include Income for the
Plan Year and for the period between the end of the Plan Year (or taxable year
in the case of excess amounts under Code ss.402(g)) through the date of
distribution, with such Income being calculated for the Plan Year by multiplying
the Income for the Plan Year (or taxable year) by a fraction. The numerator of
the fraction is the amount of Excess Deferrals or Excess Contributions, as the
case may be, made for the Plan Year (or taxable year). The denominator of the
fraction is the total account balance of the Employee attributable to Excess
Deferrals or Excess Contributions as of the end of the Plan Year (or taxable
year) reduced by the gain allocable to such amount for the Plan Year (or
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<PAGE> 15
taxable year) and increased by the loss allocable to such total amount for the
taxable year. Such Income shall be calculated for the period from the end of the
Plan Year (or taxable year) through the date of distribution by multiplying the
amount which is ten percent of the allocable Income for the Plan Year (or
taxable year) by the number of calendar months that have elapsed since the end
of such year. Distributions made on or before the fifteenth day of the month
shall be treated as having been made on the last day of the preceding month, and
a distribution made after the fifteenth of the month shall be treated as having
been made on the first day of the next subsequent month.
(43) INVESTMENT MANAGER: A Fiduciary (other than the Trustee
or Named Fiduciary) who:
(a) has the power to manage, acquire or dispose of any
asset(s) of the Plan;
(b) is (i) registered as an investment adviser under the
Investment Adviser Act of 1940, (ii) a bank as defined in that Act, or (iii) an
insurance company qualified to perform services described in subparagraph (a)
under the laws of more than one State; and
(c) has acknowledged that he or it is a Fiduciary with
respect to the Plan.
(44) KEY EMPLOYEE: Any employee of the Employer or any
Aggregated Employer who is at any time during the Plan Year containing the
Determination Date, or was during any of the four preceding Plan Years, any one
or more of the following:
(a) A duly authorized officer of the Employer in regular
and continued service having 415 Compensation during the Plan Year greater than
fifty percent of the maximum dollar limitation under Code ss.415(b)(1)(A) in
effect for the calendar year containing the Determination Date, provided that if
during such Plan Year the number of employees (whether or not Employees under
the Plan) of the Employer plus all other Aggregated Employers is:
(i) less than thirty, then no more than a total of
three individuals shall be considered officers for that Plan Year for the
Employer and all Aggregated Employers,
(ii) greater than thirty but less than five hundred,
then no more than a total of ten percent of the total employees shall be
considered officers for that Plan Year for the Employer and all Aggregated
Employers, or
(iii) greater than five hundred, then no more than a
total of fifty employees shall be considered officers for that Plan Year for the
Employer and all Aggregated Employers; or
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<PAGE> 16
(b) One of the ten employees (whether or not
Employees under the Plan) owning the largest interest in the Employer and
Aggregated Employers during such Plan Year (the Employer and Aggregated
Employers being considered as one unit) if he has 415 Compensation during the
Plan Year of more than the maximum dollar limitation under Code ss.415(c)(1)(A)
in effect for the calendar year containing the Determination Date; provided that
an employee need not be considered if he does not have an ownership interest of
more than one-half of one percent in value, and if two employees have the same
interest in the Employer and Aggregated Employer, then the employee having the
greater 415 Compensation from the Employer and Aggregated Employers for the
calendar year containing the Determination Date shall be treated as having a
larger interest; or
(c) A Five Percent Owner; or
(d) An owner of one percent of the outstanding
stock (or an owner of stock possessing one percent of the total combined voting
power) of the Employer or of any one of the Aggregated Employers (ownership in
the Employer and Aggregated Employers not being considered together) for such
Plan Year, if he has annual 415 Compensation during the Plan Year from the
Employer and all Aggregated Employers totalling more than $l50,000.
For purposes of determining ownership under subsections (b), (c) and (d) above,
the constructive ownership rules of Code ss.3l8 shall apply as modified by Code
ss.4l6(i). The beneficiary of a former Key Employee shall continue to be treated
as such former Key Employee. If a maximum number of employees are to be
considered officers under subsection (a) above, the officers having the largest
annual 415 Compensation during such Plan Year shall be the officers considered
under subsection (a).
(45) LIMITATION YEAR: The Limitation Year shall be the
twelve month period ending on each Anniversary Date.
(46) MATCHING ACCOUNT: The account maintained to record a
Participant's share of Matching Contributions under Section 4.1, and adjustments
relating thereto.
(47) MATCHING CONTRIBUTION: An Employer contribution made
pursuant to Section 4.1 which is allocated to the Participant's Matching Account
by reference to the Participant's Pre-Tax Deferrals for that Plan Year.
(48) MATERNITY LEAVE: Absence from work for maternity or
paternity reasons by an individual (male or female) on account of and by reason
of (a) the pregnancy of the individual, (b) the birth of a child of the
individual, (c) the placement of a child with the individual in connection with
the adoption of such child by such individual, or (d) caring for a child
referred to above for a period beginning immediately following such birth or
placement. A period of absence shall not be considered Maternity Leave for
purposes of this Plan unless both (i) such absence began on or after the first
day of the first Plan Year beginning after December 31, 1984, and (ii) the
individual furnishes the Committee such timely information as the Plan
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<PAGE> 17
reasonably may require to establish that the absence from work is for one of the
reasons referred to above and the number of days for which there was such an
absence. The determination of whether an individual has taken a Maternity Leave
for purposes of this Plan shall not have any effect upon whether such absence
from work is entitled to any other special treatment by the Employer for any
other employment purposes, and the existence of these Maternity Leave provisions
in the Plan shall not be in any way determinative of whether the Employer has
any other maternity or paternity leave policy or the terms of that policy (if
any).
(49) NON-HIGHLY COMPENSATED EMPLOYEE: Any Participant who is
neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
(50) NONKEY EMPLOYEE: Any employee (or former employee) of the
Employer or any Aggregated Employer who is not a Key Employee. The beneficiary
of a Nonkey Employee or a former Nonkey Employee shall continue to be treated as
such Nonkey Employee or former Nonkey Employee.
(51) NORMAL RETIREMENT AGE: The date a Participant attains age
sixty-five.
(52) PARTICIPANT: An Employee participating in the Plan in
accordance with the provisions of Section 3.1; provided, that for purposes only
of making or transferring a rollover contribution to the Plan under Section 4.5,
an Employee shall be considered a Participant once he has become an Employee who
would be eligible to be a Participant but for the age or Service requirements of
Section 3.1.
(53) PARTICIPATION: The period commencing on the date the
Employee becomes a Participant and ending on the date his employment with the
Employer terminates.
(54) PAYMENT STARTING DATE: The latest date until which the
Plan may delay payment of benefits to a Participant in the absence of the
Participant's consent to later payment. Such date shall be the sixtieth day
after the close of the Plan Year in which the last of the following events
occurs: (a) the Participant attains Normal Retirement Age, (b) the tenth
anniversary of the year in which the Participant commenced Participation in the
Plan, or (c) the Participant terminates his Service with the Employer; provided
further, that benefits also must commence not later than April 1 of the calendar
year following the calendar year in which a Participant attains age seventy and
one-half, even if he is still employed by the Employer, except as may otherwise
be allowable under ss.242(b)(2) of the Tax Equity and Fiscal Responsibility Act
of 1982 and ss.521 of the Deficit Reduction Act of 1984 (regarding special
designations filed before January 1, 1984), and except as may otherwise be
allowable under Section 1121(d) of the Tax Reform Act of 1986 (regarding
Participants, other than certain Five Percent Owners, who reached age seventy
and one-half before January 1, 1988 and certain collective bargaining
agreements). If the amount of payment cannot be determined or the proper
recipient located
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<PAGE> 18
before the Payment Starting Date, retroactive payment may be made to such date
in accordance with Treasury Regulation ss.1.401(a)-14(d).
(55) PERIOD OF SEVERANCE: The period of time beginning on an
Employee's Severance from Service Date and ending on the date the Employee again
performs an Hour of Service.
(56) PLAN: Denny's Inc. Profit Sharing Retirement Plan, the
Plan set forth herein, as amended from time to time.
(57) PLAN ADMINISTRATOR: The Committee appointed pursuant to
Section 8.2 or, in the absence of such appointment, the Employer.
(58) PLAN YEAR: The twelve month period commencing on January
1 and ending on the following December 31. The period June 27, 1987 to December
31, 1987 also was a Plan Year.
(59) PRESENT VALUE OF ACCRUED BENEFITS: With respect to any
individual and as of any Determination Date, the sum of (a) his Matching Account
and Pre-Tax Deferrals Account balances on the most recent Valuation Date (which
for the first Plan Year of the Plan shall include contributions made after the
Determination Date which are allocated as of a date in the first Plan Year, but
otherwise shall only include allocated contributions which actually were made
after the Valuation Date if such contributions were made on or before the
Determination Date), (b) his Employee After-Tax Contribution Account balance (if
any) on the most recent Valuation Date less any Employee After-Tax Contributions
which were deductible under Code ss.219(e)(2), and (c) his Rollover Account
balance (if any) as of the most recent Valuation Date to the extent it is
attributable to any rollover contribution from a plan of an Aggregated Employer
and/or any rollover contribution accepted on or before December 31, 1983. For
purposes of determining whether the Plan is a Top-Heavy Plan, the Present Value
of Accrued Benefits also shall include the amount of Plan distributions (whether
made on or after the Effective Date and including distributions from a
terminated plan which would have been required to be aggregated under the
definition of Top-Heavy Plan) made within the five consecutive Plan Year period
ending on the Determination Date to any Key Employee or Nonkey Employee or
Beneficiary thereof (regardless of whether such individual is employed or has an
accrued benefit as of the Determination Date); provided, that distributions of
benefits paid on account of death shall be deemed to include only the present
value of benefits existing immediately prior to death. For Plan Years beginning
after December 31, 1984, if an individual has not performed an Hour of Service
for any employer maintaining the Plan at any time during the five year period
ending on the Determination Date, any account balance or accrued benefit for
such individual shall be disregarded.
(60) PRE-TAX ACCOUNT: The account maintained to record a
Participant's Pre-Tax Deferrals and adjustments relating thereto.
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<PAGE> 19
(61) PRE-TAX DEFERRALS: Contributions made by a Participant on
a pre-tax basis pursuant to Section 4.3 of the Plan.
(62) QUALIFIED DOMESTIC RELATIONS ORDER: An order as defined
in Section 6.7.
(63) REA EFFECTIVE DATE: The first day of the first Plan Year
beginning after December 31, 1984, or January 1, 1985.
(64) ROLLOVER ACCOUNT: The account established pursuant to
Section 4.5 hereof to record permissible rollover contributions from another
qualified plan or an Individual Retirement Account and adjustments relating
thereto.
(65) SERVICE:
(a) An Employee's period of employment with the Employer.
Service shall be measured from the date an Employee first performs an Hour of
Service for the Employer until his first Severance From Service Date. If an
Employee returns to employment after his Severance From Service Date, Service
also shall include the period of employment with the Employer measured from the
date the Employee again performs an Hour of Service following re-employment and
ending on his next Severance From Service Date; provided that, certain periods
of Service may be disregarded as provided in Section 3.4.
(b) If an Employee terminates employment while an active
Employee as a result of quitting, being discharged or retiring, and then
performs an Hour of Service within twelve months from his Severance From Service
Date, the Period of Severance shall be counted as Service.
(c) If an Employee terminates employment as a result of
quitting, being discharged or retiring at a time when he was absent from Service
for any other reason (e.g., leave of absence, layoff, sickness, holiday,
vacation or disability) and then performs an Hour of Service within twelve
months of the date on which the Employee was first absent from Service (e.g.,
due to leave of absence, lay off, sickness, holiday, vacation or disability),
the Period of Severance shall be counted as Service.
(d) Service shall include all periods of Authorized Leave
of Absence provided the Employee returns to the employ of the Employer upon
expiration of the Authorized Leave of Absence.
(e) Service shall be expressed as whole years and
fractional parts of a year. Thirty days of Service shall equal one month of
Service and 12 months of Service or 365 days of Service shall equal one Year of
Service.
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<PAGE> 20
(f) Service with the Employer also shall include Service
with an Aggregated Employer for the period during which the employers are
considered aggregated. Except as specifically indicated otherwise, Service for
the purposes of vesting and eligibility shall include all Service with an
Aggregated Employer on the date the employer became an Aggregated Employer. Any
Employee of Winchell's Donut Houses, L.P., employed by the Employer prior to
July 1, 1990, will receive credit for service for eligibility and vesting
purposes with Winchell's Donut Houses, L.P., for all purposes under this Plan.
(g) Service for any Employee as of January 1, 1990 shall
not be less than Years of Service which he would have been credited on December
31, 1989 under the Plan then in effect.
(h) Periods of employment before an interruption of
full-time employment commencing before January 1, 1976 shall not be counted
unless such periods would have been counted under the rules of the Plan in
effect as of January 1, 1976.
(i) Notwithstanding the foregoing provisions, the
Committee in its discretion (but subject to any specific directions that may be
given by the Board of Directors of Denny's Inc.) may grant Service credit to any
group of persons who become Employees as a result of the acquisition of any
asset, corporation or other trade or business, for so much of their service with
a previous employer as the Committee may specify. All such decisions by the
Committee and the reasons therefor shall be recorded in writing in the minutes
of the meeting at which a decision thereon is reached.
(j) Service following re-employment shall be determined
in accordance with Section 3.4.
(66) SEVERANCE FROM SERVICE DATE: The earlier of (a) the date
an Employee quits, retires, is discharged or dies, or (b) the first anniversary
of the date an Employee separates from Service with the Employer or an
Aggregated Employer and remains absent (with or without pay) for a reason other
than quitting, retiring, being discharged or dying (e.g., leave of absence,
layoff, sickness, holiday, vacation or disability.
(67) SUPER TOP-HEAVY PLAN: The Plan will be a Super Top-Heavy
Plan with respect to any Plan Year which begins after December 31, 1983, in
which as of the Determination Date it is a Top-Heavy Plan in which the Present
Value of Accrued Benefits for Key Employees exceeds ninety percent of the
Present Value of Accrued Benefits for all Key Employees and Nonkey Employees who
are or were Plan Participants. In determining whether a Plan is a Super
Top-Heavy Plan, all the rules of determining whether the Plan is a Top-Heavy
Plan shall be applied except that "ninety percent" shall be substituted for
"sixty percent." The Plan shall not be a Super Top-Heavy Plan with respect to
any Plan Year which begins on or before December 31, 1983.
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(68) SURVIVING SPOUSE: The surviving spouse of a Participant
on the date of the Participant's death. A former spouse of a Participant will be
treated as a Surviving Spouse to the extent it specifically is provided under a
Qualified Domestic Relations Order as described in Article VI of this Plan and
Code ss.414(p).
(69) SUSPENSE ACCOUNT: The account maintained for the Trustee
to record any part of the Matching Contribution which is an excess Annual
Addition under Section 5.3 of the Plan and adjustments relating thereto.
(70) TOP-HEAVY PLAN: The Plan will be a Top-Heavy Plan with
respect to any Plan Year which begins after December 31, 1983 in which as of the
Determination Date the Present Value of Accrued Benefits under the Plan for all
Key Employees exceeds sixty percent of the Present Value of Accrued Benefits for
all Key Employees and Nonkey Employees who are or were Plan Participants;
provided, that if any individual is a Nonkey Employee with respect to any Plan
Year but was a Key Employee with respect to any prior Plan Year, the Present
Value of Accrued Benefits for such individual shall not be taken into account in
determining whether the Plan is a Top-Heavy Plan. In determining whether the
Plan is a Top-Heavy Plan, the Plan shall be aggregated with each plan of an
Employer or Aggregated Employer in which a Key Employee is a participant and
with each other plan of an Employer or Aggregated Employer which enables any
such plan to meet the requirements of Code ss.ss.401(a)(4) or 410, and may be
aggregated with any or all other plans of an Employer or Aggregated Employer if
such aggregation group would continue to meet the requirements of Code
ss.ss.401(a)(4) and 410 with such plan being taken into account. If the Plan
must or may be aggregated with any other plan, the top-heavy ratio for the
aggregated group shall be determined by adding together the numerators for each
plan, and then adding together the denominators for each plan. The Plan shall
not be a Top-Heavy Plan with respect to any Plan Year beginning on or before
December 31, 1983.
(71) TOP-HEAVY YEAR OF SERVICE: A Year of Service ending in a
Plan Year beginning on or after January 1, 1984 during which a Plan Year ends
for which the Plan is a Top-Heavy Plan.
(72) TOP PAID GROUP: For any Plan Year, the group consisting
of the top twenty percent of employees who performed services for the Employer
during the Plan Year when ranked on the basis of 415 Compensation paid during
such year, determined as provided in Code ss.414(q) and regulations issued
thereunder. All active employees and leased employees under Code ss.414(n) shall
be counted in determining the Top Paid Group, without any exclusion for age or
service or collective bargaining employees, except that employees who are
non-resident aliens with no United States source income shall be excluded.
(73) TRUST, TRUST FUND or TRUST AGREEMENT: The fund known as
the Denny's Inc. Profit Sharing Retirement Trust maintained in accordance with
the terms of the Denny's Inc. Profit Sharing Retirement Plan Trust Agreement, as
from time to time amended, which is incorporated and made a part of this Plan.
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(74) TRUSTEE: The corporation or individuals appointed under
the Trust Agreement to administer the Trust.
(75) VALUATION DATE: The Anniversary Date in each Plan Year,
December 31, plus any other interim dates during the Plan Year which the
Committee designates as Valuation Dates. The Committee may develop reasonable
rules and procedures for designating additional Valuation Dates, which rules and
procedures may include using different Valuation Dates for different purposes
under the Plan and valuing assets and allocating income to Participant accounts
as of different Valuation Dates depending on the investment vehicle in which the
assets are invested. Additional Valuation Dates may be designated by the
Committee at any time.
(76) YEAR OF SERVICE: Twelve months of Service as defined in
Section 2.1. Years of Service following re-employment shall be determined in
accordance with Section 3.4.
2.2 Construction: The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "hereof," "herein," "hereunder" and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular provision or Section.
2.3 Governing Law: This Plan and Trust shall be governed to the
maximum extent by federal law under ERISA. To the extent not so preempted or
otherwise governed by ERISA, the laws of the State of South Carolina shall
control on all other matters.
2.4 Effect of Restatement: If the Plan's restatement as of January
1, 1987 fails to qualify under the Code upon its submission to the Internal
Revenue Service, the Employer may elect to make further amendments as requested
by the Internal Revenue Service or, alternatively, to withdraw this restatement
and continue to operate the Plan under the documents in effect prior to the
restatement.
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ARTICLE III. PARTICIPATION AND SERVICE
3.1 Participation: An Employee included under the prior provisions of
the Plan as of the Effective Date shall continue to participate in accordance
with the provisions of this amended and restated Plan. Each other Employee shall
be eligible to participate as of the date following the latest of (a) the date
he becomes an Employee, (b) the date on which he attains age twenty-one (or age
eighteen for Employees hired prior to January 1, 1988), and (c) the date he
completes one Year of Service.
3.2 Service: A Participant's eligibility for benefits under the Plan
shall be based on his period of Service, determined in accordance with the
definition of Service in Section 2.1.
3.3 Inactive Status: In the event that any Participant transfers out of
employment with the Employer after the Effective Date, his Matching Contribution
Account shall be placed on inactive status and he shall not be eligible to make
Pre-Tax Deferrals, but he shall continue to receive Income allocations in
accordance with Section 5.2(a). In the event such Participant is re-employed by
the Employer in a subsequent Plan Year, his Matching Contribution Account shall
revert to active status with full rights and privileges under this Plan resuming
as of such Plan Year.
3.4 Participation and Service Upon Reemployment:
(a) Participation Ceases Upon Termination of Employment:
Participation in the Plan shall cease upon termination of employment with the
Employer. Such termination of employment may have resulted from retirement,
death or voluntary or involuntary termination of employment, unauthorized
absence, or by failure to return to active employment with the Employer by the
date on which an Authorized Leave of Absence expired.
(b) Special Rules Regarding Reemployment: Upon the reemployment of
any person after his Severance From Service Date, the following rules shall
apply in determining his Participation and vesting in the Plan and his Service:
(1) Plan Participation:
(i) Employee Who Had Not Been a Participant: If the
reemployed Employee was not a Participant in the Plan during his prior period of
employment he shall commence Participation after he has met the requirements of
Section 3.1 as if he were a new Employee; provided, that any Service
attributable to his prior period of employment shall be taken into account for
such reemployed Employee unless the number of consecutive one-year Breaks in
Service equals or exceeds the greater of (A) five or (B) the aggregate number of
Years of Service before the consecutive Breaks in Service (such aggregate number
not including Years of Service disregarded by reason of prior periods of Breaks
in Service). Notwithstanding the foregoing, if an Employee is re-employed by the
Employer after his Severance From Service Date and the Employee receives credit
for Service during his Period of Severance as provided
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<PAGE> 24
in Section 2.1(65)(b) or Section 2.1(65)(c) and the Employee satisfied the
eligibility requirements of Section 3.1 during the Period of Severance, he shall
be entitled to participate in the Plan on his date of re-employment; provided,
that in no event shall an Employee be entitled to participate in the Plan prior
to the Entry Date on which he would have participated in the Plan had he never
separated from Service.
(ii) Employee Who Had Been a Participant: If the reemployed
Employee was a Participant in the Plan during his prior period of employment or
had completed the eligibility requirements but had not become a Participant, he
shall be entitled to reparticipate in the Plan on his date of reemployment for
all purposes; provided, that his ability to elect to make Employee Pre-Tax
Contributions shall be subject to the Plan's normal rules and procedures which
may delay the election of making Employee Pre-Tax Contributions to the next
Change Date.
(2) Computation of Service for Vesting Purposes:
(i) Employee Who Previously Had Vested Interest: In
the case of a reemployed Employee whose prior employment terminated while he was
a Participant with any vested interest in his account under Article VI, any
Service attributable to his prior period of employment shall be reinstated as of
the date of his reparticipation.
(ii) Employee Without Previous Vested Interest: In the
case of a reemployed Employee who was a Participant whose prior employment
terminated without a vested interest in his account under Article VI, any
Service on or after the REA Effective Date which is attributable to his prior
period of employment shall be taken into account unless the number of
consecutive one-year Breaks in Service equals or exceeds five. Provided that,
prior to the REA Effective Date in the case of a reemployed Employee whose prior
employment terminated before he became a Participant in the Plan, or before he
acquired any vested interest in his account under Article VI, any Service
attributable to his prior period of employment shall not be taken into account
if the number of consecutive years of Break in Service equals or exceeds the
aggregate number of his pre-break Years of Service.
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ARTICLE IV. CONTRIBUTIONS AND FORFEITURES
4.1 Matching Contributions and Pre-Tax Deferrals: The Employer in
its discretion may, for each year, contribute an amount as it may determine.
Such amount shall not exceed the lesser of the following amounts:
(a) The amount which is elected to be deferred by Participants
as Pre-Tax Deferrals under Section 4.3, plus
(b) An amount equal to 100% of each Participant's Pre-Tax
Deferrals which are not in excess of 3% of that Participant's Compensation; or
(c) Fifteen percent of all 415 Compensation (which excludes
amounts deferred pursuant to Code ss.401(k)) paid or accrued in the Plan Year to
all Participants in the employ of the Employer who are eligible to receive an
allocation to their accounts in accordance with the provisions of Section 5.2,
plus any contribution carryover, pre-1987 limitation carryforward, or other
amounts permitted (even if not deductible) under Code ss.404(a), and less any
Employer contributions or Employee pre-tax contributions to any other profit
sharing plan or Code ss.401(k) plan of the Employer.
All contributions of the Employer shall be made in cash or other
property permitted by ERISA, and shall be conditioned upon their deductibility
under Code ss.404 and shall be paid to the Trustee, and payments shall be made
not later than the date prescribed by law for filing the Employer's federal
income tax returns, including extensions which have been granted for the filing
of such tax returns; provided, that Pre-Tax Deferrals made pursuant to
Participants' elections under Section 4.3 shall be paid to the Trustee on the
earliest date on which such contributions can reasonably be segregated from the
Employer's general assets but not later than ninety days after the date on which
the deferred amount otherwise would have been payable to the Participant (or
such longer period permitted by the Commissioner or under ERISA). Contributions
of the Employer which are determined to be nondeductible shall be returned to
the Employer in accordance with the provisions of the Trust Agreement.
4.2 Employee After-Tax Contributions by Participants Not
Permitted: Effective on and after June 30, 1984, Participants are not required
or permitted to make any contributions under this Plan.
4.3 Participant's Election to Make Pre-Tax Deferrals:
(a) Election: By written election, made and filed with the
Committee pursuant to the Committee's rules and regulations and prior to the
Change Date at which such election is to take effect, a Participant may elect to
have a whole percentage between one percent and fifteen percent (or such higher
or lower percentage as may be allowed by the Committee's rules or regulations)
of his Compensation contributed as a Pre-Tax Deferral to the Plan. As an
administrative matter, in calculating the amount to be withheld from a
Participant's periodic pay
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as an Pre-Tax Deferral, the Committee may adopt rules and procedures whereby the
amount of periodic withholding is determined by using a dollar figure or by
using a percentage of base pay or of some other amount which is not identical to
Compensation; provided, that for purposes of applying the various
nondiscrimination and other tests required by the Code, the definition of
Compensation will still be utilized.
(b) General $7,000 Limitation on Pre-Tax Deferrals:
Notwithstanding the foregoing, for Plan Years beginning after December 31, 1986,
no Participant's Pre-Tax Deferrals to this Plan and any other cash or deferred
arrangement of any employer may exceed $7,000 for any taxable year (i.e.,
generally the calendar year) of the Participant. The foregoing $7,000 limitation
shall be adjusted automatically each year to reflect cost-of-living adjustments
announced by the Commissioner. Amounts contributed by a Participant in excess of
such limit (plus Income attributable thereto through the most recent Valuation
Date) may be distributed by the Plan to that Participant in accordance with Code
ss.402(g)(2) on or before April 15 of the following calendar year; provided,
that the Plan need not make such distribution unless so requested in writing by
the affected Participant on or before March 1 of the following calendar year,
but if not distributed, any amount contributed in excess of the amount permitted
under Code ss.402(g) shall be considered an after-tax employee contribution,
credited to the affected Participant's Employee After-Tax Contribution Account,
and thereafter separately accounted for under the Plan. Such distributed or
redesignated amounts nevertheless shall continue to be considered for Highly
Compensated Employees (but not for Non-Highly Compensated Employees) for
purposes of the Plan's Actual Deferral Percentage.
(c) Elections and Modification or Revocation of Elections:
Elections to make, withdraw, modify, discontinue or resume Pre-Tax Deferrals
shall be in writing, signed by the Participant and on such form or forms as the
Committee shall provide. Elections to make Pre-Tax Deferrals, to change the
percentage of such payroll deductions or to discontinue such payroll deductions
must be filed with the Committee and will be effective on the next Change Date
(or later Change Date prescribed by the Participant); provided that the amount
of payroll deductions for Employee Pre-Tax Contributions may be changed no more
often than once a calendar quarter. The Committee may develop rules and
procedures regarding Change Dates and the modification or revocation of
elections, which rules and procedures may discriminate against Highly
Compensated Employees.
(d) Withdrawal and Distribution: A Participant may request to
have an in-service withdrawal from his Pre-Tax Account only in accordance with
Section 6.5. Upon termination of employment, the Pre-Tax Account shall be
distributed in accordance with Article VI.
4.4 Limitations on Pre-Tax Deferrals and on Matching Contributions
and Employee After-Tax Contributions:
(a) Special Rules Limiting Pre-Tax Deferrals under Code
ss.401(k):
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(1) Upon receipt of all Pre-Tax Deferral elections at
the adoption of the Plan, and periodically thereafter (but no less frequently
than as of the Anniversary Date each Plan Year), the Employer shall check the
Actual Deferral Percentages against the tests set forth in Subsection (4) below.
The Committee shall formulate limits and rules regarding the percentage of
Compensation which may be deferred by Participants to the extent it deems
necessary or desirable in order to meet one of the tests. Any such limits and
rules may discriminate against Participants who are Highly Compensated
Employees.
(2) In the event that neither test in Subsection (4)
is met as of the last day of any Plan Year, the Committee shall:
(i) Request that the Employer make an
additional contribution to the Plan, which contribution shall be allocated among
Pre-Tax Deferral Accounts in one of the following manners, as specified by the
Committee: (A) as if it were an additional Matching Contribution allocated based
upon some stated amount of Pre-Tax Deferrals, either among all Participants or
just among those Participants who are Non-Highly Compensated Employees; or (B)
in the proportion that each Participant's Compensation bears to the total
Compensation of all affected Participants, with such additional contribution
either being made with respect to all Participants or just among those
Participants who are Non-Highly Compensated Employees.
(ii) In addition to or as an alternative to the
foregoing, the Committee may request that the Employer designate that all or
part of the Matching Contribution which it will put into the accounts of either
all Participants or just those Participants who are Non-Highly Compensated
Employees be designated a "Qualified Non-elective Contribution" as described in
regulations under Code Section 401(k) and be allocated to such Participants'
Pre-Tax Accounts.
(iii) In addition to or as an alternative to the
foregoing, the Committee may in its discretion require that Participants who are
Highly Compensated Employees be required to amend their Pre-Tax Deferral
percentage elections and/or to elect to receive as a cash distribution under
Code ss.401(k)(8) Excess Deferrals already contributed to the Plan with respect
to the Plan Year, plus any Income attributable thereto (computed in accordance
with the Trustee's usual procedures for allocating Income to Participant's
accounts). If any Pre-Tax Deferrals are distributed pursuant to this Section,
any Matching Contributions allocated to the Participant's Employer Matching
Account by reference to those Pre-Tax Deferrals also must be distributed (if
such Matching Contributions are vested), or forfeited (if such Matching
Contributions are not vested) as required to comply with ss.401(a) of the
Commissioner's regulations. In all events, the Committee's determination as to
which Participants will be affected under this subparagraph (iii) shall be
determined by reducing the deferrals of Participants who are Highly Compensated
Employees in order of their Actual Deferral Percentages, beginning with the
highest such percentage during that Plan Year. Any cash distributions under the
foregoing sentence shall be treated as if they had never been deferred to the
Plan under Section 4.3.
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(3) The timing of any corrective measures under
Subsection (2) above should be as follows: (i) any additional amounts
contributed pursuant to Subsection (2)(i) or (ii) above shall be deposited in
the affected Participants' Pre-Tax Accounts no later than the date prescribed by
law for filing the Employer's federal income tax returns, including extensions
which have been granted for the filing of such tax return; (ii) any cash
distribution of Excess Deferrals pursuant to Subsection (2)(iii) above must be
made to the appropriate Highly Compensated Employees after the close of the Plan
Year in which the Excess Deferral arose and within twelve months after the close
of that Plan Year.
(4) As of each Anniversary Date (and more frequently
as deemed necessary by the Committee), all Participants who were directly or
indirectly eligible to make a Pre-Tax Deferral for all or a portion of the Plan
Year shall be separated into the Highly Compensated Employee group (including
Family Members of Highly Compensated Employees) and the Non-Highly Compensated
Employee group. One of the following two tests must be satisfied as of each
Anniversary Date for there not to be a further Employer Contribution and/or
amendment of salary deferral elections and/or required cash election and/or
recharacterization by Highly Compensated Employees under Subsection (2) above:
TEST I - the Actual Deferral Percentage for the
Highly Compensated Employee group is not more
than the Actual Deferral Percentage of the
Non-Highly Compensated Employee group for the
same Plan Year multiplied by 1.25.
TEST II - the excess of the Actual Deferral
Percentage for the Highly Compensated Employee
group over the Non-Highly Compensated Employee
group for the same Plan Year is not more than two
percentage points, and the Actual Deferral
Percentage for the Highly Compensated Employee
Group is not more than the Actual Deferral
Percentage of the Non-Highly Compensated Employee
group multiplied by 2.0.
Notwithstanding the foregoing, the use of Test II shall be limited to the extent
necessary in order to avoid any restrictions on the use of this "alternative
limitation" which have been promulgated by the Commissioner, as further
described in Subsection (b)(5) below.
(5) Each group's Actual Deferral Percentage and Test
I and Test II shall be determined in accordance with Code ss.401(k) and any
related rules or regulations of the Commissioner.
(b) Special Rules Limiting Matching Contributions:
(1) At the adoption of the Plan, and periodically
thereafter (but not less frequently than as of the Anniversary Date each Plan
Year), the Employer shall check the Actual Contribution Percentages against the
tests set forth in Subsection (4) below. The Committee may
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formulate limits and rules regarding the contribution and/or allocation of any
Matching Contributions to the extent it deems necessary or desirable in order to
meet one of the tests. Any such limits and rules may discriminate against
Participants who are Highly Compensated Employees.
(2) In the event that neither test in Subsection (4)
is met as of the last day of any Plan Year, the Committee shall:
(i) Request that the Employer make an
additional Matching Contribution to the Plan, which contribution shall be
allocated among Matching Accounts as an additional Matching Contribution
allocated based upon some stated amount of Pre-Tax Deferrals either among all
Participants or just among those Participants who are Non-Highly Compensated
Employees; or
(ii) In addition to or as an alternative to
the foregoing, the Committee may, in its discretion, require that Participants
who are Highly Compensated Employees be required to receive as a cash
distribution under Code ss.401(m)(6) any Excess Contributions of vested Matching
Contributions already contributed to the Plan with respect to the Plan Year,
plus any Income attributable thereto (computed in accordance with the Trustee's
usual procedures for allocating Income to Participant's accounts). In all
events, the Committee's determination as to which Participants will be affected
shall be determined under this subparagraph (ii) by reducing the Matching
Contributions by or on behalf of Participants who are Highly Compensated
Employees in order of their Actual Contribution Percentages, beginning with the
highest such percentage during that Plan Year. Any cash distributions under the
foregoing sentence shall be treated as if they had never been contributed to the
Plan under Section 4.1.
(iii) In addition to or as an alternative to
the foregoing, the Committee may require that non-vested Matching Contributions
be forfeited to correct Excess Contributions.
(3) The timing of any corrective measures under
Subsection (2) above shall be as follows: (i) any additional amount to be
contributed pursuant to Subsection (2)(i) above shall be deposited in the
affected Participants' Matching Accounts no later than the date prescribed by
law for filing the Employers' federal income tax return, including extensions
which have been granted for the filing of such tax return; and (ii) any cash
distribution of Excess Contributions of Matching Contributions pursuant to
Subsection (2)(ii) above must be made to the appropriate Highly Compensated
Employees after the close of the Plan Year in which the Excess Contribution
arose and within twelve months after the close of that Plan Year.
(4) As of each Anniversary Date (and more frequently
as deemed necessary by the Committee), all Participants shall be divided into
the Highly Compensated Employee group (including Family Members of Highly
Compensated Employees) and the Non-Highly Compensated Employee group. One of the
following two tests must be satisfied as
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of each Anniversary Date for there not to be a further Employer Matching
Contribution and/or required cash election by Highly Compensated Employees under
Subsection (2) above:
TEST I - the Actual Contribution Percentage
for the Highly Compensated Employee group is
not more than the Actual Contribution
Percentage of the Non-Highly Compensated
Employee group multiplied by 1.25.
TEST II - the excess of the Actual
Contribution Percentage for the Highly
Compensated Employee group over the
Non-Highly Compensated Employee group is not
more than two percentage points, and the
Actual Contribution Percentage for the
Highly Compensated Employee group is not
more than the Actual Contribution Percentage
of the Non-Highly Compensated Employee group
multiplied by 2.0.
Notwithstanding the foregoing, the use of Test II shall be limited to the extent
necessary in order to avoid any restrictions on the use of this "alternative
limitation" which have been promulgated by the Commissioner, as described in
Subsection (5) below.
(5) Restriction on Multiple Use of Test II: The
following restrictions shall apply in any case where the Plan is required to use
Test II for computing both the maximum ADP and ACP limitations for Highly
Compensated Employees. In such case, the sum of the ADP and ACP for Highly
Compensated Employees may not exceed the greater of (i) or (ii) below:
(i) the sum of:
(A) 1.25 times the greater of the
ADP or the ACP for Non-Highly Compensated Employees, plus
(B) 2.0 times the lesser of the ADP
or the ACP for Non-Highly Compensated Employees, provided that this figure may
not exceed the lesser of the ADP or the ACP for Non-Highly Compensated Employees
by more than two percentage points.
(ii) the sum of:
(A) 1.25 times the lesser of the
ADP or the ACP for Non-Highly Compensated Employees, plus
(B) 2.0 times the greater of the
ADP or the ACP for Non-Highly Compensated Employees, provided that this figure
may not exceed the greater of the ADP or the ACP for Non-Highly Compensated
Employees by more than two percentage points.
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<PAGE> 31
In the event that such aggregate limitation is exceeded, correction shall be
made by reducing the ACP for Highly Compensated Employees in accordance with
this Subsection (b) to the extent necessary to meet this aggregate limitation.
(6) Each group's Actual Contribution Percentage and
Test I and Test II shall be determined in accordance with Code ss.401(m) and
any related rules and regulations of the Commissioner.
4.5 Rollover Contributions:
(a) In General: Subject to all the provisions of this Plan, a
Participant, including any other Employee who is considered a Participant under
Section 2.1(52), may direct the appropriate fiduciary of any qualified
retirement plan of another employer to distribute or transfer directly to the
Trustee any portion or all of such Participant's interest in the distributing or
transferring plan, exclusive of contributions made by the Participant thereunder
except that a Participant may rollover into this Plan employee contributions
deductible under Code ss.219(e)(2) to the extent such amounts are thereafter
accounted for separately and also may rollover elective contributions considered
employer contributions under Code ss.401(k). Alternatively, the Participant may
personally present such amount to the Trustee within sixty days of receipt
thereof as a distribution from another qualified retirement plan. In addition,
an Employee who has become a Participant who has established an Individual
Retirement Account solely for the purpose of serving as a repository for
distributions from the qualified retirement plan of a former employer, and who
has not made any contributions to such Individual Retirement Account on his own
behalf also may transfer or present within sixty days of receipt part or all of
the assets of such Individual Retirement Account to the Trustee.
Upon the receipt of such a rollover contribution, the Trustee
shall establish a Rollover Account for the Participant on whose behalf the
distribution was received. The value of the Rollover Account so established
shall be fully vested and nonforfeitable at all times.
(b) Requirements and Conditions With Respect to Rollover
Contributions: Rollover contributions shall further be subject to the following
conditions:
(1) No Interim Withdrawals: No withdrawals from
Rollover Accounts shall be permitted until such time as the Participant is
otherwise eligible to receive his Pre-Tax Deferrals as provided in Section 6.5.
(2) Certification: The Participant shall at the
Committee's request present a written certification in a form acceptable to the
Committee to the effect that: The amount received as a rollover contribution is
attributable only to amounts to the Participant's credit in a qualified
retirement plan or rollover Individual Retirement Account; no portion of such
amount consists of contributions made by the Participant other than employee
contributions deductible under Code ss.219(e)(2) and elective contributions
considered employer contributions under ss.401(k); specifying any amounts
transferred which are subject to any restrictions under
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<PAGE> 32
Code ss.401(a)(9) or ss.402(c)(4) or otherwise; and if such amount is being paid
by the Participant personally, it was received within the prior sixty calendar
days.
(3) Other Limitations: No rollover contribution
shall be accepted (i) directly or indirectly from an Individual Retirement
Account to which the Participant contributed on his own behalf; or (ii) which
consists in whole or in part of insurance contract(s) with respect to which
future premium payments are or may become due, unless there are sufficient other
assets being transferred so as to make maintenance of such contract(s) feasible
without violation of any limitation on assets which may be applied for that
purpose; or (iii) which consists of amounts not eligible for rollover treatment
under Code ss.402(c)(4) because such amounts were part of a series of payments
or required to be distributed under Code ss.401(a)(9).
(4) No Transfer Allowed from Plan Subject to Code
ss.417: No direct or indirect transfer will be permitted into this Plan from (i)
a plan which is a defined benefit pension plan, (ii) a defined contribution plan
subject to the minimum funding standards of Code ss.412 (e.g., a money purchase
or target benefit pension plan), or (iii) any other defined contribution plan
that does not meet the requirements of Code ss.401(a)(11)(B)(iii)(I) and (II)
regarding all death benefits being paid to a Surviving Spouse absent spousal
consent and regarding the Participant's ability to elect a life annuity form of
payment. Rollovers into this Plan which are not direct or indirect transfers
(i.e., which have actually been distributed to the Participant by the other
plan) will be permitted with respect to benefits attributable to such a plan.
(c) Directed Rollover Option: Effective January 1, 1993, a
distribution from this Plan may be directly rolled over to another plan pursuant
to the provisions of Subsection 6.4(g).
4.6 Disposition of Forfeitures: Upon termination of employment, a
Participant's Forfeiture, if any, shall be maintained in his Matching Account
until his Forfeiture Date, which is the earlier of (A) the date on which he has
received a distribution of the entire non-forfeitable portion of his account (or
deemed distribution in the case of a Participant without any vesting, which
deemed distribution date shall be the date of his termination of employment with
the Employer) or (B) the last day of the Plan Year in which the Participant
incurs five consecutive one-year Breaks in Service, and shall continue to
receive Income allocations pursuant to Section 5.2(a) until such time. If the
terminated Participant returns to the employ of the Employer before his
Forfeiture Date, the undistributed amount in his Matching Account, including any
Forfeiture still maintained in his Matching Account, plus Income allocations,
shall upon reparticipation become the beginning balance in his new Matching
Account. If the terminated Participant does not return before his Forfeiture
Date, any vested amount remaining in the terminated Participant's accounts will
be distributed to him as hereinafter provided; and his Forfeiture, plus Income
allocations shall become available as of such Forfeiture Date for use as
provided in Section 5.2(d) as a current or subsequent Employer contribution. If
a terminated Participant who is less than one hundred percent vested in his
Matching Account is reemployed after five consecutive one-year Breaks in
Service, but before distribution of his vested account balance, any portion of
his account that has not been distributed will be segregated in the records
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of the Trust and separately accounted for until such time as the Participant is
one hundred percent vested in his Matching Account.
4.7 Pay Back Provision: If a terminated Participant who is less
than one hundred percent vested in the Plan receives a distribution of his
entire nonforfeitable benefit derived from Pre-Tax Deferrals and/or Matching
Contributions and such Former Participant returns to the employ of the Employer,
then such reemployed Participant shall be given an opportunity to repay the full
amount of any such prior distribution of amounts derived from Pre-Tax Deferrals
and Matching Contributions as provided below. If such a reemployed Employee
repays such amounts from his Pre-Tax Account and Matching Account before the
earlier of five years after the first date on which he is subsequently
reemployed by the Employer or the close of the first period of five consecutive
one-year Breaks in Service commencing after distribution (or, in the case of a
distribution from the Plan other than by reason of separation from Service, five
Years after the date of the distribution), then his prior account balance shall
be restored to the amount which was allocated to such accounts on the date of
distribution. In the case of a reemployed Former Participant who had no vested
interest in either his Pre-Tax Account or Matching Account at the time of his
previous separation from Service and who therefore was deemed to have received a
distribution, if such Former Participant is reemployed before he has incurred
five consecutive one-year Breaks in Service, then repayment of his Pre-Tax
Account and Matching Account shall be deemed to be made on the date following
the Anniversary Date following reemployment.
If the Plan is required to restore forfeited amounts by virtue
of a pay back under this Section, such restoration shall be made no later than
the end of the Plan Year following the Plan Year of repayment, and the Committee
may choose among any or a combination of the following permissible sources for
restoration: Income of the Plan, Forfeitures which become available that Plan
Year, or additional Employer contributions (which Employer contributions shall
be in addition to those required or permitted by Section 4.1 of the Plan).
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ARTICLE V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
5.1 Individual Accounts: The Committee shall create and maintain
adequate records to disclose the interest in the Trust of each Participant,
Former Participant and Beneficiary. Such records shall be in the form of
individual accounts and credits and charges shall be made to such accounts in
the manner herein described. When appropriate, a Participant shall have a
Pre-Tax Account, a Matching Account, an Employee After-Tax Contribution Account,
and a Rollover Account. Subaccounts also may be maintained pursuant to rules and
regulations of the Committee to reflect collective investment subaccounts,
segregated subaccounts and any other subaccounts deemed necessary or desirable
by the Committee. The maintenance of individual accounts is only for accounting
purposes, and a segregation of the assets of the Trust Fund to each account
shall not be required. Distributions and withdrawals made from an account shall
be charged to the account as of the date paid.
5.2 Account Adjustments: The accounts of Participants, Former
Participants and Beneficiaries and the Suspense Account shall be adjusted in
accordance with the following:
(a) Income: As of each Valuation Date, the Income of the Trust
Fund since the last Valuation Date shall be allocated among the Suspense Account
and the accounts of Participants, Former Participants and Beneficiaries who had
unpaid balances in their accounts on the Valuation Date in proportion to the
balances in such accounts immediately following the prior Valuation Date, but
after first reducing each such account balance by the amount of any
distributions, withdrawals and directed investments from the account since the
prior Valuation Date, and after increasing the balance in each Pre-Tax Account,
Matching Account and Rollover Account since the prior Valuation Date by a
weighted proportion of any Pre-Tax Deferrals, Matching Contributions and
rollover contributions since the last Valuation Date weighted in accordance with
the Trustee's customary and reasonable accounting procedures. The Income since
the prior Valuation Date attributable to any investment of any collective
investment subaccount which has been established in accordance with the Trust
Agreement also shall be allocated to such account as of each Valuation Date, or
at such other times (including any distribution date), as may be appropriate
under the Trustee's normal procedures for such accounts. All valuations shall be
based on the fair market value of assets in the Trust Fund on the Valuation Date
or other distribution date. Notwithstanding the foregoing, in the event that the
Plan's assets are invested among collective investment funds as provided in the
Trust Agreement, the foregoing allocation of Income shall be adjusted to reflect
the segregation of each such collective investment fund.
(b) Pre-Tax Deferrals: A Participant's Pre-Tax Deferrals under
Section 4.3 during the Plan Year, and other amounts contributed by the Employer
to the Pre-Tax Accounts of Participants pursuant to Section 4.4(a)(2)(i), shall
be allocated to his Pre-Tax Account when received by the Trustee (less amounts
required to be withdrawn as cash under Section 4.4).
(c) Employer Contributions: As of each Valuation Date (or more
frequently in the Committee's discretion exercised in a manner that is not
discriminatory with respect to
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different Participants), the Employer contributions (if any) for the Plan Year
shall be allocated among those Participants who were in the employ of the
Employer during the period from the last allocation date. Such allocations shall
be made in accordance with the following formula (subject to subsection (e)
below):
Each eligible Participant's Matching Account shall receive
a portion of the Employer contribution which is equal to 100% of the
Participant's total Pre-Tax Deferrals made by the Participant since the last
allocation date which are equal to or less than 3% of that Participant's
Compensation since the last allocation date.
(d) Forfeitures: Forfeitures assessed against Participants'
accounts as provided in Section 4.6 shall be retained in a Forfeitures account
and shall be available for reallocation as provided in this section. As of each
Valuation Date (or, if earlier, the Plan's termination date), Forfeitures which
have become available for reallocation since the prior Valuation Date shall be
used to reduce current or future Employer contributions to be made under
subsection (c) above.
(e) Minimum Contributions and Forfeitures for a Top-Heavy
Plan: For any Plan Year in which the Plan is a Top-Heavy Plan, the allocation
formula will be changed to the extent necessary so that each Participant who is
a Nonkey Employee and who has not separated from Service on the Anniversary Date
will receive a total allocation to his Matching Account (including both Employer
contributions and Forfeitures for that Plan Year) which is equal to the lesser
of the following percentages of his 4l5 Compensation for that Plan Year: (i)
three percent or (ii) the highest percentage provided under the Plan during that
Plan Year on behalf of a Key Employee (with the percentage being determined for
each Key Employee by using that part of his 4l5 Compensation which is not in
excess of $150,000 (or $200,000 for Plan Years beginning before January 1, 1994)
or other higher amount applicable under Code ss.401(a)(17) and, effective for
Plan Years beginning after December 31, 1988, by taking into account all Pre-Tax
Deferrals under Code ss.401(k) and matching contributions for that Key
Employee); provided, that the minimum contribution may be less than three
percent only if the Plan is not used by a defined benefit plan (whether active
or wasting) to meet the participation tests of Code ss.ss.401(a)(4) or 410.
Effective for Plan Years beginning after December 31, 1988, amounts contributed
at a Participant's election under Code ss.401(k) and any matching contributions
allocated to Nonkey Employees which are necessary in order to satisfy the
requirements of Code ss.ss.401(k) and 401(m) may not be offset against the
aforesaid minimum contribution for a Participant, but amounts contributed by the
Employer as qualified non-elective contributions under Code ss.401(m)(4)(C) and
matching contributions not necessary to satisfy Code ss.401(k) or (m) may be
offset. In all cases, Employer contributions and forfeitures allocated to a
Participant from any other tax-qualified defined contribution plan of the
Employer and any Aggregated Employer required or permitted to be aggregated as
described in the definition of Top-Heavy Plan in Section 2.1 which meet the
top-heavy minimum contribution shall be offset. In the case of a Participant
covered both by tax-qualified defined contribution plan(s) and tax-qualified
defined benefit plan(s) of the Employer and any Aggregated Employer required or
permitted to be aggregated as described in the definition of Top-Heavy Plan in
Section 2.1, each Participant shall receive an
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<PAGE> 36
aggregate minimum benefit and contribution at least equal (using a comparability
analysis) to the minimum defined benefit (as defined in the Employer's defined
benefit plan) in any Plan Year in which the Plan is a Top-Heavy Plan.
(f) Rollover Contributions: A Participant's rollover
contributions for the Plan Year shall be allocated to his Rollover Account when
received by the Trustee.
5.3 Maximum Additions:
(a) 415 Limitation: Notwithstanding anything contained herein
to the contrary, the total Additions made to the Matching Account, Pre-Tax
Account and Employee After-Tax Contribution Account (or comparable accounts) of
a Participant in the Plan and all other defined contribution plans (whether or
not terminated) of the Employer and any Aggregated Employer for any Limitation
Year shall not exceed the "4l5 Limitation" which is the lesser of (i) $30,000
(or, if greater, one-fourth of the dollar limitation in effect under Code
ss.415(b)(1)(A) for that Plan Year) or (ii) twenty-five percent of the
Participant's 4l5 Compensation for such Limitation Year. If a short Limitation
Year is created because of an amendment changing the Limitation Year to a
different consecutive twelve month period, the (a)(i) amount will be multiplied
by a fraction whose numerator is the number of months in the short Limitation
Year and whose denominator is twelve; and the (a)(ii) amount will be based upon
the Participant's 4l5 Compensation for the short Limitation Year.
(b) Return of Pre-Tax Deferrals: The Trustee will return any
Pre-Tax Deferrals (within the meaning of Code ss.402(g)) made by a Participant
(plus earnings and gains attributable thereto) to the extent necessary to reduce
the total Additions for that Plan Year so as not to exceed the 4l5 Limitation on
Annual Additions.
(c) Suspense Account: If as a result of the allocation of
Forfeitures or a reasonable error in estimating a Participant's annual
Compensation, or in determining the amount of Pre-Tax Deferrals within the
meaning of Code ss.402(g) that may be made within the limits of Code ss.415 (or
under other limited facts and circumstances which the Commissioner finds justify
the availability of the rules set forth in this Plan pursuant to Commissioner's
Regulation ss.l.4l5-6), the Annual Additions for a Participant would exceed the
4l5 Limitation, then amounts in excess of the 4l5 Limitation shall be treated in
accordance with this subparagraph. Any excess amounts in a Participant's account
shall be used to reduce Employer Contributions for the next Limitation Year (and
succeeding years, as necessary) for that Participant if that Participant is
covered by the Plan as of the end of the Limitation Year. If that Participant is
not covered by the Plan as of the end of the Limitation Year, then the excess
amounts shall be transferred to and held unallocated in a Suspense Account for
the Limitation Year and allocated and reallocated as necessary to prevent the
relevant 4l5 Limitations from being exceeded in the next Limitation Year (and
succeeding Limitation Years as necessary) to all the remaining Participants in
the Plan. Furthermore, the excess amounts in the Suspense Account must be used
to reduce Employer contributions for the next Limitation Year (and succeeding
Limitation Years as necessary) for all Participants in the Plan. In no event may
any excess amounts which are due to Employer
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contributions (other than amounts that are Pre-Tax Deferrals within the meaning
of Code ss.402(g)) be distributed out to Participants or Former Participants.
(d) Aggregate Limitations:
(1) For Plan Years beginning prior to January 1,
1983, but only if the Plan was in existence on July 1, 1982:
(i) If an Employee is a Participant in
one or more defined benefit plans and one or more defined contribution plans
ever maintained by the Employer and any Aggregated Employer, the sum of his
defined benefit plan fraction and his defined contribution plan fraction shall
not exceed 1.4 in any Limitation Year.
(ii) The term defined benefit plan fraction
in any Limitation Year shall mean a fraction the numerator of which is the sum
of the projected annual benefits (as defined below) payable to the Participant
(determined as of the last day of the current Limitation Year) under all defined
benefit plans of the Employer and any Aggregated Employer, and the denominator
of which is the projected annual benefit payable to the Participant (determined
as of the last day of the current Limitation Year) if the Plan(s) provided the
maximum annual benefit under the relevant 415 Limitation. For the purposes of
this subsection, a Participant's "projected annual benefit" is equal to the
annual benefit (i.e., the benefit payable annually in the form of a straight
life annuity, but excluding benefits attributable to Employee After-Tax
Contributions or rollover contributions, if any) to which the Participant in a
defined benefit plan would be entitled under the terms of the plan assuming that
the Participant will continue employment until reaching the later of the plan's
normal retirement age or his current age, that the Participant's 415
Compensation for the Limitation Year under consideration will remain the same
until the date the Participant attains the later of the normal retirement age or
his current age, and that all other relevant factors used to determine benefits
under the plan for the Limitation Year under consideration will remain constant
for all future Limitation Years.
(iii) The term defined contribution plan
fraction in any Limitation Year shall mean a fraction the numerator of which is
the sum of the Annual Additions made to the Participant's account(s) as of the
last day of the current Limitation Year and for all prior Limitation Years under
all defined contribution plans of the Employer and any Aggregated Employer, and
the denominator of which is the sum of the maximum Annual Additions under the
relevant 4l5 Limitations which could have been made to the Participant's
account(s) for the current Limitation Year and for each prior Limitation Year in
which the Participant was an Employee of the Employer and any Aggregated
Employer (regardless of whether a plan was in existence during the years).
(iv) Annual Additions in the numerator of
the defined contribution plan fraction shall not exceed the aggregate maximum
Annual Additions in the denominator of the defined contribution plan fraction in
any Limitation Year beginning prior to January 1, 1976.
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(2) For all Plan Years ending prior to January
1, 1987, if the Plan was adopted after July 1, 1982; and for Plan Years
beginning on or after January 1, 1983, and ending prior to January 1, 1987, if
the Plan was in existence on July 1, 1982:
(i) If an Employee is a Participant in one
or more defined benefit plans and one or more defined contribution plans ever
maintained by the Employer and any Aggregated Employer, the sum of his defined
benefit plan fraction and his defined contribution plan fraction shall not
exceed 1.0 in any Limitation Year.
(ii) The term defined benefit plan fraction
in any Limitation Year shall mean a fraction the numerator of which is the sum
of the projected annual benefits (as defined below) payable to the Participant
as of the last day of the current Limitation Year under all defined benefit
plans of the Employer and any Aggregated Employer, and the denominator of which
is the lesser of: (A) the product of 1.25 (or 1.0 in the case of a Top-Heavy
Plan which does not meet the additional benefit requirements of subsection (v)
below or in the case of any Super Top-Heavy Plan) multiplied by $90,000 (or such
greater amount as shall be authorized by the Internal Revenue Service under
cost-of-living or other statutory adjustments which shall automatically be
applied on January 1 of each year when effective, or such greater or lesser
amount as may be required to actuarially adjust such $90,000 limitation so it is
equivalent to a benefit beginning at age sixty-two in the case of a benefit
beginning before age sixty-two, or equivalent to a benefit at age sixty-five in
the case of a benefit beginning after age sixty-five), or (B) the product of 1.4
multiplied by the amount which is equal to one hundred percent of the
Participant's average 415 Compensation for the three highest consecutive
calendar years of Participation. For the purposes of this subsection, a
Participant's "Projected Annual Benefit" is equal to the annual benefit (i.e.,
the benefit payable annually in the form of an equivalent straight life annuity
beginning no earlier than age sixty-two or later than age sixty-five, but
excluding benefits attributable to Employee After-Tax Contributions or rollover
contributions, if any) to which the Participant in a defined benefit plan would
be entitled under the terms of the plan assuming that the Participant will
continue employment until reaching the later of the plan's normal retirement age
or his current age, that the Participant's 415 Compensation for the Limitation
Year under consideration will remain the same until the date the Participant
attains the later of the plan's normal retirement age or his current age, and
that all other relevant factors used to determine benefits under the plan for
the Limitation Year under consideration will remain constant for all future
years. Furthermore, actuarial adjustments for form of benefit or for benefits
beginning before age sixty-two shall use an interest rate assumption which is
not less than the greater of five percent or the rate specified by the plan, and
actuarial adjustments for benefits beginning after age sixty-five shall use an
interest rate which is not greater than the lesser of five percent or the rate
specified by the plan. None of the aforesaid actuarial adjustments shall be
taken into account before the year for which such adjustments take effect.
(iii) The term defined contribution plan
fraction in any Limitation Year shall mean a fraction the numerator of which is
the sum of the Annual Additions made to the Participant's account(s) as of the
last day of the current Limitation Year and for all prior Limitation Years under
all defined contribution plans of the Employer and any Aggregated
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<PAGE> 39
Employer (less any amount which may be subtracted therefrom by virtue of the
Commissioner's regulations adopted under the Tax Equity and Fiscal
Responsibility Act of 1982), and the denominator of which is the sum of the
lesser of the following amounts determined for each year and for each prior Year
of Service: (A) the product of 1.25 (or 1.0 in the case of a Top-Heavy Plan
which does not meet the additional minimum benefit requirements of subsection
(v) below or any Super Top-Heavy Plan) multiplied by the dollar limitation in
effect under Code ss.415(c)(1)(A) for such year determined without regard to
Code ss.415(c)(6),or (B) 1.4 multiplied by the amount which is equal to
twenty-five percent of the Participant's 415 Compensation for such Limitation
Year; provided, at the election of the Committee, in any year beginning after
December 31, 1982 where the plan was in existence on or before July 1, 1982, the
denominator of the defined contribution fraction with respect to a Participant
for all years ending before January 1, 1983, shall be an amount equal to the
product of the amount determined to be the denominator under the foregoing
sentence multiplied by a fraction the numerator of which is the lesser of
$51,875 or 1.4 multiplied by twenty-five percent of the Participant's 415
Compensation for the year ending in 1981, and the denominator of which is the
lesser of $41,500 or twenty-five percent of the Participant's 415 Compensation
for the year ending 1981.
(iv) Annual Additions in the numerator of
the defined contribution plan fraction shall not exceed the aggregate maximum
Annual Additions in the denominator of the defined contribution plan fraction in
any Limitation Year beginning prior to January 1, 1976.
(v) In computing the defined benefit
plan fraction and the defined contribution plan fraction in subsections (ii) and
(iii) above, the number 1.0 shall not be substituted for 1.25 in computing the
denominator in the case of a Top-Heavy Plan (other than a Super Top-Heavy Plan)
if each Nonkey Employee who is a Participant receives a certain minimum benefit
or contribution under a plan of the Employer or any Aggregated Employer. The
minimum benefit for these purposes in the case of a defined benefit plan shall
be the product of the Participant's high consecutive five year 415 Compensation
(not including 415 Compensation in Plan Years beginning before January 1, 1984,
or 415 Compensation for Plan Years beginning after the close of the last Plan
Year in which the Plan was not a Top-Heavy Plan) times the lesser of (A) three
percent per Top-Heavy Year of Service, or (B) the sum of twenty percent plus one
percent per each of the first ten Top-Heavy Years of Service. The minimum
contribution for these purposes in the case of a defined contribution plan shall
be a total allocation of Employer contribution and forfeitures of four percent
of the 415 Compensation for each Participant who is a Nonkey Employee (but this
four percent figure shall be reduced to the extent necessary in any Plan Year so
that it is no more than the largest percentage provided for any Key Employee
during that Plan Year, with the Key Employees' percentages being determined by
using only that part of their 415 Compensation that is not in excess of
$200,000). In the case of a Nonkey Employee covered both by defined contribution
plan(s) and defined benefit plan(s) of the Employer and any Aggregated Employer,
the Nonkey Employee must receive an aggregate benefit and contribution at least
equal to the minimum defined benefit described above.
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(3) For all Plan Years beginning after December 31,
1986:
(i) If an Employee is a Participant in one or
more defined benefit plans and one or more defined contribution plans ever
maintained by the Employer and any Aggregated Employer, the sum of his defined
benefit plan fraction and his defined contribution plan fraction shall not
exceed 1.0 in any Limitation Year.
(ii) The term defined benefit plan fraction in
any Limitation Year shall mean a fraction the numerator of which is the sum of
the projected annual benefits (as defined below) payable to the Participant as
of the last day of the current Limitation Year under all defined benefit plans
of the Employer and any Aggregated Employer, and the denominator of which is the
lesser of: (A) the product of 1.25 (or 1.0 in the case of a Top-Heavy Plan which
does not meet the additional benefit requirements of subsection (v) below or in
the case of any Super Top-Heavy Plan) multiplied by $90,000 (or such greater
amount as shall be authorized by the Internal Revenue Service under
cost-of-living or other statutory adjustments which shall automatically be
applied on January 1 of each year when effective, or such greater or lesser
amount as may be required to actuarially adjust such $90,000 limitation so it is
equivalent to a benefit beginning at the Social Security Retirement Age, as
defined below), or (B) the product of 1.4 multiplied by the amount which is
equal to one hundred percent of the Participant's average 415 Compensation for
the three highest consecutive Years of Service (or actual number of years of
employment if less than three Years of Service).
For purposes of this subsection, a Participant's
"Projected Annual Benefit" is equal to the annual benefit (i.e., the benefit
payable annually in the form of an equivalent straight life annuity beginning at
the Social Security Retirement Age, but excluding benefits attributable to
Employee After-Tax Contributions or rollover contributions, if any) to which the
Participant in a defined benefit plan would be entitled under the terms of the
plan assuming that the Participant will continue employment until reaching the
later of the plan's normal retirement age or his current age, that the
Participant's 415 Compensation for the Limitation Year under consideration will
remain the same until the date the Participant attains the later of the plan's
normal retirement age or his current age, and that all other relevant factors
used to determine benefits under the plan for the Limitation Year under
consideration will remain constant for all future years.
Actuarial adjustments for form of benefit or for
benefits beginning before the Social Security Retirement Age shall use an
interest rate assumption which is not less than the greater of five percent or
the rate specified by the plan, and otherwise shall be made in the manner
prescribed by the Commissioner to be consistent with the reduction for old-age
insurance benefits beginning prior to the Social Security Retirement Age.
Actuarial adjustments for benefits beginning after the Social Security
Retirement Age shall use an interest rate which is not greater than the lesser
of five percent or the rate specified by the plan. None of the aforesaid
actuarial adjustments shall be taken into account before the year for which such
adjustments take effect. For purposes of this subsection, "Social Security
Retirement Age" shall mean the retirement age
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under ss.216(1) of the Social Security Act, except that such ss.216(1) shall be
applied without regard to the age increase factor and as if the early retirement
age under ss.216(1)(2) were age 62.
(iii) The term defined contribution plan
fraction in any Limitation Year shall mean a fraction the numerator of which is
the sum of the Annual Additions made to the Participant's account(s) as of the
last day of the current Limitation Year and for all prior Limitation Years under
all defined contribution plans of the Employer and any Aggregated Employer (less
any amount which may be subtracted therefrom by virtue of the Commissioner's
regulations adopted under the Tax Equity and Fiscal Responsibility Act of 1982),
and the denominator of which is the sum of the lesser of the following amounts
determined for each year and for each prior Year of Service: (A) the product of
1.25 (or 1.0 in the case of a Top-Heavy Plan which does not meet the additional
minimum benefit requirements of subsection (v) below or any Super Top-Heavy
Plan) multiplied by the dollar limitation in effect under Code ss.415(c)(1)(A)
for such year determined without regard to Code ss.415(c)(6), or (B) 1.4
multiplied by the amount which is equal to twenty-five percent of the
Participant's 415 Compensation for such Limitation Year; provided, at the
election of the Committee, in any year beginning after December 31, 1982 where
the plan was in existence on or before July 1, 1982, the denominator of the
defined contribution fraction with respect to a Participant for all years ending
before January 1, 1983, shall be an amount equal to the product of the amount
determined to be the denominator under the foregoing sentence multiplied by a
fraction the numerator of which is the lesser of $51,875 or 1.4 multiplied by
twenty-five percent of the Participant's 415 Compensation for the year ending in
1981, and the denominator of which is the lesser of $41,500 or twenty-five
percent of the Participant's 415 Compensation for the year ending 1981.
(iv) Annual Additions in the numerator of
the defined contribution plan fraction shall not exceed the aggregate maximum
Annual Additions in the denominator of the defined contribution plan fraction in
any Limitation Year beginning prior to January 1, 1976.
(v) In computing the defined benefit plan
fraction and the defined contribution plan fraction in subsections (ii) and
(iii) above, the number 1.0 shall not be substituted for 1.25 in computing the
denominator in the case of a Top-Heavy Plan (other than a Super Top-Heavy Plan)
if each Nonkey Employee who is a Participant receives a certain minimum benefit
or contribution under a plan of the Employer or Aggregated Employer. The minimum
benefit for these purposes in the case of a defined benefit plan shall be the
product of the Participant's high consecutive five year 415 Compensation (not
including 415 Compensation in Plan Years beginning before January 1, 1984, or
415 Compensation for Plan Years beginning after the close of the last Plan Year
in which the Plan was not a Top-Heavy Plan) times the lesser of (A) three
percent per Top-Heavy Year of Service, or (B) the sum of twenty percent plus one
percent per each of the first ten Top-Heavy Years of Service. The minimum
contribution for these purposes in the case of a defined contribution plan shall
be a total allocation of Employer contribution and forfeitures of four percent
of the 415 Compensation for each Participant who is a Nonkey Employee (but this
four percent figure shall be reduced to the extent necessary in any Plan Year so
that it is no more than the largest percentage provided for any Key Employee
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<PAGE> 42
during that Plan Year, with the Key Employees' percentages being determined by
using only that part of their 415 Compensation that is not in excess of
$150,000, or $200,000 for Plan Years beginning prior to January 1, 1994). In the
case of a Nonkey Employee covered both by defined contribution plan(s) and
defined benefit plan(s) of the Employer and any Aggregated Employer, the Nonkey
Employee must receive an aggregate benefit and contribution at least equal to
the minimum defined benefit described above.
(vi) Notwithstanding the foregoing, in
the case of any individual who is a participant as of the first day of the first
plan year beginning after December 31, 1986 in a defined benefit plan which was
in existence on May 6, 1986, and with respect to which the requirements of Code
ss.415 have been met for all plan years, if such individual's current accrued
benefit under the plan exceeds the limitation of Code ss.415(b) as amended by
the Tax Reform Act of 1986, then for purposes of Code ss.415(b) and (e), the
limitation of Code ss.415(b)(1)(A) with respect to such individual shall be
equal to such individual's accrued benefit at the close of the last plan year
beginning prior to January 1, 1987 when expressed as an annual benefit within
the meaning of Code ss.415(b)(2) (but without taking into account any changes in
the terms or conditions of the plan after May 5, 1986 or any cost-of-living
adjustment occurring after May 5, 1986). Furthermore, in the case of a plan
which satisfied the requirements of Code ss.415 for its last plan year beginning
prior to January 1, 1987, in accordance with regulations that may be promulgated
by the Commissioner, an amount may be subtracted from the numerator of the
defined contribution plan fraction (not exceeding such numerator) so that the
sum of the defined benefit plan fraction and defined contribution plan fraction
computed under Code ss.415(e)(1) does not exceed 1.0 for such year.
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ARTICLE VI. BENEFITS
6.1 Retirement or Disability: If a Participant has attained Normal
Retirement Age or if his employment is terminated at an earlier age because of
Disability, he shall be fully vested in the amount allocated to each of his
accounts and shall be entitled to receive such amount following the termination
of his employment payable in accordance with Section 6.4. If a Participant
elects to receive full or partial payment before termination of employment but
on or after Normal Retirement Age, then any payments after termination of
employment following Normal Retirement Age shall be deemed to be on account of
the Participant's separation from Service.
6.2 Death and Designation of Beneficiary:
(a) Death Benefits: In the event that a Participant dies while
in active service with the Employer, the entire amount then allocated to each of
his accounts shall be fully vested and shall be payable to his Beneficiary after
receipt by the Committee of an acceptable proof of death in accordance with this
Section. In the event that the Participant's death occurs after his termination
of employment but before he has received all of his Plan benefits, the entire
amount then allocated to each of his accounts shall not be fully vested but the
vested amount then allocated to each of his accounts as provided in Section 6.3
shall be payable to his Beneficiary after receipt by the Committee of an
acceptable proof of death in accordance with this Section.
(b) Designation of Beneficiary: Subject to the spousal consent
requirements of Section 6.2(c), each Participant from time to time may designate
any person or persons (who may be designated contingently or successively and
who may be an entity other than a natural person) as his Beneficiary or
Beneficiaries to whom his Plan benefits are paid if he dies before receipt of
all such benefits; provided, that a Participant's or Former Participant's
Beneficiary in all cases shall be his Surviving Spouse as defined in Section
2.1, unless either (i) the present value of the Participant's nonforfeitable
account balance is not more than $3,500 as of the Payment Starting Date, or (ii)
there is no such Surviving Spouse at the time of death or (iii) the Surviving
Spouse consents to the appointment of another Beneficiary pursuant to a waiver
of spousal rights as provided in Subsection (c) below. Each beneficiary
designation shall be in a form prescribed by the Committee and will be effective
only when filed with the Committee during the Participant's lifetime, and shall
be subject to and conditioned upon any and all provisions of federal law
(including, but not limited to, the Retirement Equity Act of 1984) regarding the
choice of Beneficiary. Each beneficiary designation filed with the Committee
will cancel all beneficiary designations previously filed with the Committee. If
any Participant fails to designate a Beneficiary in the manner provided above,
or if the designated Beneficiary dies before the deceased Participant or before
complete distribution of the Participant's benefits and a contingent Beneficiary
has not been designated, then, and in any such event, the person(s) who shall
constitute the Beneficiary shall be the estate of the deceased Participant.
(c) Requirements of Surviving Spouse Consent to Alternative
Beneficiary: A Participant's or Former Participant's Surviving Spouse or spouse
may consent to the designation
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of another Beneficiary if such consent is in a writing which is signed by the
Participant's or Former Participant's Surviving Spouse or spouse, acknowledges
the effect of the consent, and is witnessed by a notary public. The spouse's
consent must acknowledge the specific non-spouse Beneficiary or explicitly
permit any non-spouse Beneficiary, and such Beneficiary may not subsequently be
changed to another non-spouse Beneficiary unless the spouse's consent again is
obtained in the form prescribed above, or unless the spouse's prior consent
expressly permitted new designations by the Participant without the requirement
of further consent by the spouse. Any consent necessary under this Section will
be valid only with respect to the spouse who signs the consent, but shall be
irrevocable by that spouse as to the specified non-spouse Beneficiary. However,
a Participant or Former Participant may revoke a spouse's waiver (and thereby
cause the spouse to become a Beneficiary) at any time before the commencement of
benefits by filing a new Beneficiary designation form, even without the consent
of the spouse or Surviving Spouse, and the number of such revocations by a
Participant or Former Participant shall not be limited. Notwithstanding the
foregoing written consent requirement, if the Participant establishes to the
satisfaction of a Plan representative that such written consent may not be
obtained because there is no spouse or the spouse cannot be located, or if a
Participant has a court order that he either is legally separated or has been
abandoned within the meaning of local law, then a valid spousal consent will be
deemed to have been made.
6.3 Termination for Other Reasons: If a Participant's employment
with the Employer is terminated before Normal Retirement Age for any reason
other than Disability or death, the Participant (or his Beneficiary under
Section 6.2 in the event of the Participant's death prior to his receipt of all
his Plan benefits) shall be entitled to the sum of the amounts determined under
(a) and (b) below:
(a) Pre-Tax Account and Other Employee Accounts: The entire
amount credited to his Pre-Tax Account, Employee After-Tax Contribution Account
and his Rollover Account, plus
(b) Vested Matching Account: An amount equal to the vested
percentage of his Matching Account balance. For each Employee who was a
Participant on or before December 31, 1987, such vested percentage shall be
determined in accordance with the following "non Top-Heavy" schedule:
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<PAGE> 45
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
- ---------------- ---------- ----------
<S> <C> <C>
Less than 1 0% 100%
1 but less than 2 10% 90%
2 but less than 3 20% 80%
3 but less than 4 30% 70%
4 but less than 5 40% 60%
5 or more 100% 0%
</TABLE>
For all other Participants who have at least one Hour of Service with the
Employer after December 31, 1987, such vested percentage shall be determined in
accordance with the following "non-Top-Heavy" schedule:
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
- ---------------- ---------- ----------
<S> <C> <C>
Less than 5 0% 100%
5 or more 100% 0%
</TABLE>
provided however, if the Plan becomes a Top-Heavy Plan, the vested percentage of
all amounts then existing in the Matching Account of any Participant who
completes at least one Hour of Service after the Plan becomes a Top-Heavy Plan
(including amounts attributable to Employer contributions and Forfeitures
allocated before the Plan became a Top-Heavy Plan) shall be determined in
accordance with the following "Top-Heavy" schedule (unless another vesting
schedule is permitted by Code ss.416 which fully vests in a less rapid manner,
in which event such other permissible vesting schedule hereby is instead
incorporated by reference):
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
- ---------------- ---------- ----------
<S> <C> <C>
Less than 1 0% 100%
1 but less than 2 10% 90%
2 but less than 3 20% 80%
3 but less than 4 40% 60%
4 but less than 5 60% 40%
5 or more 100% 0%
</TABLE>
If the Plan ceases to be a Top-Heavy Plan, the Plan's vesting schedule
automatically will be changed to the non-Top-Heavy vesting schedule.
Notwithstanding any amendment (or automatic change by virtue of the
Plan becoming or ceasing to be a Top-Heavy Plan) of the Plan's vesting schedule,
the vested percentage of the
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<PAGE> 46
amounts allocated to the Matching Account of a Participant who had been covered
under the prior provisions of the Plan (such amounts being determined as of the
later of (i) the date the amendment or change is adopted or (ii) the date it
becomes effective) shall not be less than the vested percentage of such
previously allocated amounts which the Participant would have had, had the
provisions of the Plan as in effect immediately prior to the effective date
continued without change. In addition, in the event the vesting provisions of
the Plan are amended (or are changed automatically by virtue of the Plan
becoming or ceasing to be a Top-Heavy Plan), each Participant in the Plan who
has had three (or five in the case of a Participant who does not have at least
one Hour of Service with the Employer for Plan Years beginning after December
31, 1988) or more Years of Service shall be permitted to make an election as
provided under Section 10.2 of this Plan.
The percentage of the Participant's Matching Account which is not
vested shall be a Forfeiture subject to the provisions of Section 4.6. Payment
of benefits due under this Section 6.3 shall be made in accordance with Section
6.4.
6.4 Payment of Benefits:
(a) Participant's Claim for Benefits: Upon a Participant's
entitlement to payment of benefits under Section 6.1 or 6.3, or a Beneficiary's
entitlement to payment under Section 6.2, he shall file with the Committee his
written request as to time and manner of payment on such form or forms, and
subject to such conditions, as the Committee shall provide.
(b) Committee's Determination: Subject to the provisions of
subsections (c) through (g) below, and also subject to the spousal consent
requirements of Section 6.2, the Committee shall determine when payment of a
Participant's benefits is to commence and the method by which his benefits will
be paid, and shall direct the Trustee accordingly. The Committee shall act in
accordance with this Plan in making any determinations under this section and
shall not be bound by a Participant's request under this section.
(c) When Benefit Payments Commence:
(1) Payment of a Participant's benefits must commence
no later than the Payment Starting Date (as defined in Section 2.l of the Plan),
unless the Participant elects later payment (subject to the provisions of
subsection (e) below) or is deemed to have elected to defer payment of benefits
by failing to give consent to a distribution in excess of $3,500 as provided in
the Commissioner's Regulation ss.1.411(a)-11(c)(7).
(2) Unless the Participant has consented to earlier
payment, a distribution will be deferred until Normal Retirement Age, or his
death; provided, that if the total of his vested benefits in all accounts does
not exceed $3,500 (or, prior to the REA Effective Date, $1,750) or such other
greater cash-out amount as may be provided under the Commissioner's rulings and
regulations, the Committee shall require a mandatory cash-out and provide for
distribution of vested benefits in a lump sum as of the earliest date permitted
under Section
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<PAGE> 47
6.4(c)(3) below. For purposes of this mandatory cash-out provision, if the value
of a Participant's vested account balance is zero, the Participant shall be
deemed to have received a distribution of such vested account balance on the
date of his termination of employment.
Within a period of no less than thirty days
and no more than ninety days prior to a distribution, the Committee shall
provide the Participant written notice of his rights to consent to a
distribution and the Participant must consent in writing to the distribution in
accordance with Treasury Regulation ss.1.411(a)-11(C); provided that, subject to
the rules relating to the timing of distributions in Section 6.4(c)(3) below,
such distribution may commence less than thirty days after such notice is given,
provided that (i) the Committee clearly informs the Participant that the
Participant has a right to a period of at least thirty days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (ii) the Participant,
after receiving the notice, affirmatively elects a distribution.
(3) Distributions to any Participant,
Beneficiary, or Alternate Payee may be made as soon as administratively
practicable following the next allocation date after the date of the
Participant's separation from Service and the Committee's receipt and processing
of the distribution forms, or earlier distribution date permitted to an
Alternate Payee, valued as of the Valuation Date immediately preceding the
distribution date.
Notwithstanding the foregoing, in any event where the
Trustee has determined that the value of the Trust has declined since the last
Valuation Date in a manner which would cause the distribution of Plan assets
based on the prior Valuation Date to injure other Plan Participants, then
distributions under this Plan will be delayed (except to the extent required in
Code ss.401(a)(9) and the regulations thereunder) until the next Valuation Date
as of which a distribution would not cause harm to other Plan Participants.
(4) Notwithstanding the foregoing, in all
events, the commencement of benefit payments shall be subject to Subsection (e)
below.
(d) Method of Payment: All benefits shall be distributed
as a lump sum.
(e) When Distribution Must be Completed and Minimum
Amount of Periodic Payments:
(1) Before Death of Participant: Anything to
the contrary in this Plan notwithstanding, the entire interest of a Participant
or Former Participant in the Plan must be distributed to him not later than
April 1 of the calendar year following the calendar year in which he attains age
seventy and one-half (or, in the case of a Participant or Former Participant
other than a Five Percent Owner who reached age seventy and one-half before
January 1, 1988, not later than April 1 of the calendar year following the later
of such year or the calendar year he retires).
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<PAGE> 48
(2) After Death of Participant (or Surviving
Spouse): If a Participant or Former Participant dies before distribution of his
interest has commenced, then any remaining interest of the Participant or Former
Participant must be distributed by December 31 of the calendar year containing
the fifth anniversary of the Participant's or Former Participant's death except
that if the designated beneficiary is the Participant's or Former Participant's
surviving spouse, the date distributions are required to begin shall be December
31 of the calendar year the Participant or Former Participant would have
attained age seventy and one-half, and if the surviving spouse dies before
payment to such spouse begins, subsequent distributions shall be made as if the
spouse had been the Participant or Former Participant.
(3) Forms of Benefit: Nothing in this Section
shall be construed as permitting distribution in a form other than one permitted
under the other Sections of this Article VI.
(4) Pre-TEFRA Designations: Notwithstanding
Subsections (e)(1) and (e)(2) above, distributions before and after death will
be permitted which do not satisfy the requirements of (e)(1) and/or (e)(2) if
such distributions are made pursuant to a method designated in a signed writing
by the Participant or Former Participant (or the beneficiary of a deceased
Participant or Former Participant) prior to January 1, 1984, and such
designation would not have disqualified the Plan under Code ss.401(a)(9) as in
effect prior to amendment by the Deficit Reduction Act of 1984. A designation
under this section only applies to Participants and Former Participants having
benefits accrued under the Plan as of December 31, 1983 (but also will apply to
benefits accrued after that date for such a Participant or Former Participant).
The designation by a Participant or Former Participant (or beneficiary of a
Former Participant), in order to be effective, must specify the time
distribution will commence and the period over which distributions will be made.
In the case of any distribution upon death of the Participant or Former
Participant, the designation must include the beneficiaries of the Participant
or Former Participant (listed in order of priority) in addition to the foregoing
specifications of time and period. The method of distribution selected under
this subparagraph (4) must assure that more than fifty percent of the present
value of the amount available for distribution is paid within the life
expectancy of the Participant or Former Participant. A distribution which
commenced before January 1, 1984 but continues after December 31, 1983, will be
presumed to have been designated by the Participant or Former Participant (or
beneficiary thereof) if such method of distribution was specified in writing and
otherwise satisfied the foregoing requirements. If a designation is changed in
any way (other than a mere substitution or addition of another beneficiary not
named in the designation, which substitution or addition does not alter,
directly or indirectly, the period over which distributions were to be made),
any subsequent designation must satisfy the requirements of Code ss.401(a)(9) as
then amended.
(5) Commissioner's Regulations: This subsection
(e) shall be construed in accordance with the Commissioner's Regulations
promulgated under Code ss.401(a)(9).
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<PAGE> 49
(f) Form of Payment: The amount which a Participant, Former
Participant, or Beneficiary is entitled to receive at any time and from time to
time may be paid in cash, Employer Stock or in other traded securities, or in
any combination thereof, provided no discrimination in value results therefrom.
(g) Direct Rollover Option: This Subsection applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Subsection, a Distributee who otherwise has become entitled to a
distribution under the Plan may elect, at the time and in the manner prescribed
by the Committee to have any portion of that distribution which is an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover. The Committee may establish rules whereby
rollovers are not permitted in cases where the anticipated annual distribution
is less than $200, in cases where the Participant wishes to have a portion of
the distribution paid to him but the entire distribution is $500 or less, where
the Participant seeks a rollover to more than one Eligible Retirement Plan, and
in other limited circumstances permitted by the Commissioner.
6.5 Withdrawals by Participants:
(a) Withdrawal of After-Tax Contributions: A Participant, in
the employ of the Employer may, by written application made on such form or
forms as may be prescribed by the Committee and delivered to the Committee,
elect to withdraw any Employee After-Tax Contributions held in his Employee
After-Tax Contribution Account (not including any Income thereon).
(b) Withdrawal at Age 59 1/2: A Participant in the employ of
the Employer who has reached age 59 1/2 may, by written application made on such
form or forms as may be prescribed by the Committee and delivered to the
Committee, elect to withdraw all or any part of his Pre-Tax Account, his
Rollover Account or his Employee After-Tax Contribution Account (including
Income then held in such accounts).
(c) Hardship Withdrawals: A Participant in the employ of the
Employer may, by written application made on such form or forms as may be
prescribed by the Committee and delivered to the Committee, request a withdrawal
of the value of all or a portion of his Pre-Tax Deferrals (and certain Income
thereon) then held in his Pre-Tax Account and the value of all or a portion of
his Rollover Contributions (plus Income thereon) then held in his Rollover
Account subject to the following rules and restrictions.
(1) The Participant must demonstrate to the Committee
that such withdrawal is necessary by reason of his Hardship (as defined below);
(2) Hardship withdrawals shall not be permitted with
respect to a Participant's Pre-Tax Deferrals (and Income thereon) except to the
extent that such withdrawal
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<PAGE> 50
is equal to or less than the total of (A) the value of the Pre-Tax Deferrals
made through December 31, 1988 (including Income thereon through December 31,
1988) plus (B) the amount of Pre-Tax Deferrals made following December 31, 1988
(not including Income thereon) and not including any qualified non-elective
contributions or qualified matching contributions to the extent required by the
Commissioner's regulations;
(3) Only one Hardship withdrawal shall be permitted in
any one calendar quarter;
(4) The Participant must demonstrate that the
distribution is necessary to satisfy a financial need as provided in Section
6.5(e) below;
(5) In no event may the amount distributed exceed the
amount necessary to satisfy the Hardship (as defined below); and
(6) No Hardship withdrawals may be made under the Plan
until the Participant has obtained all other distributions, withdrawals, and
nontaxable loans available under the Plan and all other plans of the Employer.
(d) Definition of Hardship: The determination of Hardship
shall be made by the Committee using uniform, non-discriminatory and objective
standards and shall be limited to genuine financial emergencies when the
Participant has an immediate and heavy financial need of the funds and the funds
are not reasonably available from other resources of the Participant. The amount
of an immediate and heavy financial need may include any amounts necessary to
pay federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution. Hardships justifying withdrawal shall be limited
solely to:
(1) the costs directly related to the purchase of a
primary home for the Participant (not including mortgage payments);
(2) the need to prevent the eviction of a
Participant from his principal residence or foreclosure on the mortgage of the
Participant's principal residence;
(3) paying tuition and related educational fees for
the next twelve months of post-secondary education of the Participant, his
spouse, children or dependents;
(4) providing income for medical expenses described
in Code ss.213(d) incurred by the Participant, his spouse, or any of his
dependents (as defined in Code ss.152) or necessary for these persons to obtain
such medical care; or
(5) other hardships deemed immediate and heavy
financial needs under IRS regulations,
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provided, that the interpretation of Hardship shall in all cases be consistent
with final regulations issued under Code ss.401(k).
(e) Distribution Necessary to Satisfy Financial Need: In order
to obtain a Hardship distribution, the Participant must submit documentation
that the financial need cannot be relieved
(1) through reimbursement or compensation by insurance
or otherwise,
(2) by reasonable liquidation of the Participant's
assets to the extent such liquidation would not itself cause an immediate and
heavy financial need,
(3) by cessation of Pre-Tax Deferrals or Employee
After-Tax Contributions under the Plan, or
(4) by other distributions or nontaxable (at the time
of the loan) loans from this Plan or other plans maintained by the Employer or
by any other employer or by borrowing from commercial sources on reasonable
commercial terms.
Prior to October 1, 1994, a Participant requesting a Hardship
withdrawal, in lieu of submitting the documentation required under subsections
(1) through (4), could agree that
(i) he shall not be eligible to make Pre-Tax
Deferrals to this Plan or employee contributions to any other plan maintained by
the Employer (including nonqualified plans, stock option or purchase plans, and
any similar plans; but not including any contribution to a health, cafeteria or
other welfare plan, or any mandatory employee contribution portion of a defined
benefit plan), for twelve months after receipt of the Hardship withdrawal, and
(ii) he may not make Pre-Tax Deferrals
during his taxable year (generally, the calendar year) immediately following the
taxable year in which he received the Hardship distribution which are in excess
of the $7,000 (as adjusted) limit under Code ss.402(g) reduced by the amount of
his Pre-Tax Deferrals for the taxable year of the Hardship distribution.
(f) Procedures for Distribution of Withdrawals: Applications
for withdrawals pursuant to Section 6.5 shall be submitted in writing on such
form or forms as may be prescribed by the Committee and delivered to the
Committee, and otherwise shall be made in accordance with the normal
administrative procedures of the Committee. Approved withdrawals shall be
distributed as soon as administratively practicable, subject to the terms of any
security or contract in which any assets are invested. The proceeds of each such
withdrawal shall be charged with any transfer taxes, postage, commissions,
Trustee transfer charges, and all other direct expenses arising from such
withdrawal.
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(g) All withdrawals shall be in the form of a lump sum payment
and shall not be available in the form of an annuity. No withdrawals are
permitted from a Participant's Matching Account prior to separation from
Service.
6.6 No Loans to Participants: No loans shall be permitted under
this Plan.
6.7 Distributions Pursuant to Qualified Domestic Relations Orders:
(a) Payments to an Alternate Payee Under a Qualified Domestic
Relations Order: On and after January 1, 1985, the Committee shall pay benefits
to the Alternate Payee(s) in accordance with the terms of this Section, any
government regulations adopted under ERISA ss.206, and the applicable provisions
of any Qualified Domestic Relations Order entered by a court of competent
jurisdiction on or after January 1, 1985. In the case of a Domestic Relations
Order entered by a court of competent jurisdiction before January 1, 1985, the
Committee (1) shall treat such order as a Qualified Domestic Relations Order
under this Section if the Committee is paying benefits pursuant to such order on
January 1, 1985 and (2) may, in its discretion, treat any other such order as a
Qualified Domestic Relations Order under this Section even if such order does
not meet the requirements therefor.
(b) Plan Procedures Relative to Qualified Domestic Relations
Orders:
(1) Notification: Following its receipt of any Domestic
Relations Order, the Committee shall promptly notify in writing the affected
Participant or Former Participants and Alternate Payee(s) of its receipt of the
order, and shall furnish such persons a copy of the order and of these Plan
procedures (and any other procedures which may have been adopted by the
Committee) for determining whether the order is a Qualified Domestic Relations
Order. This notice and all other notices pursuant to this Section will be sent
to the address included in the Domestic Relations Order (or to such other
address as is known to the Committee or as may thereafter be specified in
writing by the addressee). Any Alternate Payee shall be permitted to designate a
representative for receipt of copies of notices that are to be sent to the
Alternate Payee. Such notice shall set a time and date no less than fifteen days
nor more than thirty days from the date the notice is mailed on which the
Committee will meet to determine whether the order is a Qualified Domestic
Relations Order, and shall inform the Participant or Alternate Payee that he may
present written or oral comments at that time with regard to such determination.
(2) Determination of Committee: On the date specified in
the above notice, the Committee shall examine the Domestic Relations Order in
light of any comments received and in light of applicable law and regulations,
and shall make one of three determinations: (i) that the order is a Qualified
Domestic Relations Order; (ii) that the order is not a Qualified Domestic
Relations Order; or (iii) that the determination of whether the order is a
Qualified Domestic Relations Order should be submitted to and made by a court of
competent jurisdiction. If, within eighteen months from the date on which the
first payment of benefits would be required to be made under such order, it is
determined by the Committee or court of
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<PAGE> 53
competent jurisdiction that the order (or modification thereof) is a Qualified
Domestic Relations Order, the Committee shall pay any separately accounted for
amounts (plus adjustments required by the order) to the specified Alternate
Payee, and thereafter shall pay the Alternate Payee the amount specified by the
Qualified Domestic Relations Order. If, within the aforesaid eighteen month
period, it is determined by the Committee or a court of competent jurisdiction
that the order is not a Qualified Domestic Relations Order, or the question of
whether the order is a Qualified Domestic Relations Order is not determined by
the Committee or a court of competent jurisdiction, then the Committee shall pay
any amounts (plus any Income or allocated interest or earnings thereon)
separately accounted for below to the Participant, Former Participant or other
person or persons who would have been entitled thereto if there had been no
Domestic Relations Order. Any determination other than that an order is a
Qualified Domestic Relations Order after the close of the aforesaid eighteen
month period shall be applied prospectively only.
(3) Separate Accounting of Participant's and Alternate
Payee's Benefits: During any period in which the Participant otherwise would
have had a right to payment of Plan benefits and in which the issue of whether
an order is a Qualified Domestic Relations Order is being determined, the
Committee shall separately account for (but need not physically escrow) the
amounts as to which the Participant or Former Participant otherwise would have
had a right to payment during such period and which amounts would have been
payable to the Alternate Payee during such period if the order had been
determined to be a Qualified Domestic Relations Order. Amounts determined to be
payable to an Alternate Payee in accordance with a Qualified Domestic Relations
Order (or otherwise separately accounted for by this subsection) shall not be
considered to be part of the Participant's account with respect to any other
spouse or beneficiary of the Participant.
(4) Expenses of Domestic Relations Order: All
unreasonable or unusual fees and expenses incurred by the Plan, the Committee
and/or the Trustee in evaluating and effecting a Domestic Relations Order shall
be charged to the accounts of the Participant with respect to whom the Domestic
Relations Order was received; provided, that if a separate account is
established for an Alternate Payee pursuant to a Qualified Domestic Relations
Order, such unreasonable and unusual fees and expenses shall be charged equally
to the Participant's Plan accounts and the Alternate Payee's Plan accounts. Such
fees and expenses may include, but need not be limited to, attorneys' fees,
accountants' fees, court costs, mailing expenses and other expenses attributable
to the Domestic Relations Order.
(c) Notification of Pending Order: In the event the Committee
is notified in writing by the attorney representing a potential Alternate Payee
that the attorney has commenced legal action in a court of competent
jurisdiction and has requested a Qualified Domestic Relations Order or will
request an Order in connection with such legal action, the Committee may delay
any distribution from the Plan for which the Participant is eligible until such
time as the court makes a disposition with respect to the Order or the pending
action or such earlier time as the Participant and potential Alternate Payee
otherwise agree in writing.
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<PAGE> 54
(d) Definitions:
(1) Alternate Payee: Any spouse, former spouse, child
or other dependent of a Participant or Former Participant who is recognized by a
Domestic Relations Order as having a right to receive all, or a portion of, the
benefits payable under the Plan with respect to such Participant or Former
Participant.
(2) Domestic Relations Order: Any judgment, decree or
order (including approval of a property settlement agreement) which relates to
the provision of child support, alimony payments, or marital property rights to
a spouse, former spouse, child or other dependent of a Participant, and is made
pursuant to a State's domestic relations law or community property law.
(3) Qualified Domestic Relations Order: A Domestic
Relations Order which:
(i) Creates or recognizes the existence of an
Alternate Payee's right to, or assigns to an Alternate Payee the right to
receive all or a portion of the Plan benefits payable with respect to a
Participant or Former Participant; and
(ii) In the order clearly specifies (A) the name
and last known mailing address (if any) of the Participant or Former
Participant, and of each Alternate Payee covered by the order, (B) the amount or
percentage of the Participant's or Former Participant's benefits to be paid by
the Plan to each Alternate Payee, or the manner in which such amount or
percentage is to be determined, (C) the number of payments or period to which
such order applies, and (D) each plan to which such order applies; and
(iii) Does not require the Plan to provide any type
or form of benefit, or any option, not otherwise provided by the Plan; and
(iv) Does not require the Plan to provide increased
benefits, determined on the basis of actuarial value; and
(v) Does not require the payment of benefits to an
Alternate Payee which are required to be paid to another Alternate Payee under
another order previously determined to be a Qualified Domestic Relations Order;
and
(vi) In the case of any payment before a
Participant has separated from Service, does not require payment to the
Alternate Payee before the earlier of (A) the date the Participant or Former
Participant is entitled to a distribution under the Plan, or (B) the date the
Participant or Former Participant could begin receiving benefits if he separated
from Service; and
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(vii) In the case of an order which requires
benefits to be paid to an Alternate Payee as if the Participant had retired on
the date payment is to begin under such order, only takes into account the
present value of benefits actually accrued using, in the event the Plan is a
defined benefit plan, the interest rate specified in the Plan for determining
actuarial equivalence, (or five percent if no interest rate is specified); and
(viii) Requires payment in a form provided
by the Plan, except that in no event may payment be in the form of a joint and
survivor annuity with respect to the Alternate Payee and his subsequent spouse.
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ARTICLE VII. TRUST FUND
7.1 Trust Fund: All contributions under this Plan shall be paid to the
Trustee and deposited in the Trust Fund. The Trust Fund shall be governed by a
separate Trust document which is incorporated and made a part of this Plan.
7.2 Collective Investment Subaccounts:
(a) Collective Investment Funds: The Trustee may develop, pursuant
to any general investment guidelines or funding policy provided by the
Committee, separate Trustee-sponsored or Investment Manager-sponsored collective
investment funds (which, without limitation, may consist of pooled funds under
the Trust, a fund composed of Employer Stock or funds in which only this Trust
may invest) among which Plan Participants may direct investment of any amounts
in their accounts, pursuant to such uniform and nondiscriminatory rules as the
Committee may adopt, less loans (if permitted) under Section 6.6. The Committee
may select, replace and change the available collective investment funds
consistent with the investment guidelines and funding policy. To the extent
practicable, a Participant's directions regarding investments shall apply
uniformly to all of a Participant's accounts as of the time that the direction
is implemented so that such direction shall apply consistently both to amounts
attributable to contributions by the Participant and amounts attributable to
contributions by the Employer. Subject to the foregoing, investments of each
such collective investment fund shall be managed and otherwise shall be the
responsibility of the Trustee (or Investment Manager appointed by the Committee
to manage the fund), and separate records shall be maintained to record the
performance and Income of each such fund. The Committee shall develop guidelines
for collective investments, which guidelines may apply to all Plan Participants
or only to certain groups of Participants designated on the basis of age, years
of Participation, type of account (for example, Matching Accounts or Rollover
Accounts or accounts relating to a predecessor plan), or other basis, so long as
such different groupings do not discriminate in favor of Highly Compensated
Employees or violate regulations under Code ss.401(a)(4).
(b) Subaccounts: The Committee shall cause separate subaccounts to
be maintained to reflect each Participant's direction among each collective
investment fund, and each such subaccount shall be adjusted each Valuation Date
to reflect its share of the Income of the collective investment fund of which it
is a part. Distributions and Forfeitures from accounts of a Participant, and
contributions allocated to the accounts of a Participant shall be allocated by
the Trustee among the Participant's collective investment subaccounts pursuant
to the most recent direction of the Participant, subject to the reasonable rules
and procedures of the Committee and Trustee.
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(c) Direction: Direction among such collective investment
funds by a Participant shall be given in writing to the Committee on such forms
and pursuant to other reasonable rules and procedures of the Committee and
Trustee as to time, percentage and amount. Any such direction once made shall
remain in effect as to contributions, Forfeitures and distributions for that
Plan Year and succeeding Plan Years, unless the Participant shall file a timely
application made in accordance with applicable Committee and Trustee rules and
procedures which effectively redesignates the investment of his account. In the
event a Participant shall fail for any reason to make an effective direction of
his accounts at a time when different collective investment funds are available,
then the amounts in his accounts shall be deemed to have been designated to a
fund or funds as selected by the Trustee to apply in such instances, subject to
any funding policy statement or any other restrictions or guidelines provided by
the Committee and to the standards that would be followed by a prudent fiduciary
in similar circumstances.
7.3 Special Provisions Regarding Investment of Trust Assets in
Employer Stock:
(a) Investment in Employer Stock: Subject to Participant
direction under Section 7.2, the Trustee may invest in Employer Stock and/or
other securities of the Employer which are "qualifying employer securities"
under ss.406(d) of ERISA in that such securities are stock (or otherwise an
equity security) or bonds, debenture, notes or certificates or other evidence of
indebtedness which is described in paragraph (1), (2) or (3) of Code ss.503(e)
(the foregoing other securities hereinafter referred to as "Employer
Securities"). Notwithstanding the foregoing, a Participant may not direct the
investment of new contributions (whether Employee contributions or Employer
contributions) to his account in Employer Stock or Employer Securities to the
extent that such new investment exceeds 25% of such new contributions.
Additionally, a Participant may not transfer assets from other subaccounts to
investments in Employer Stock or Employer Securities to the extent such transfer
causes his account's total investment in Employer Stock and Employer Securities
to exceed 25% of the total value of his Account.
(b) Contribution and Purchase of Stock: The Trust may receive
Employer Stock or other Employer Securities by way of Employer contribution, or
it may purchase such Employer Stock or other Employer Securities (regardless of
whether it had been held as treasury stock, or was previously authorized but
unissued, or had been owned by individuals, including Participants).
(c) Purchase Price of Employer Stock: The Trust acquisition of
Employer Stock or other Employer Securities shall be at not more than its fair
market value, as determined by its current established market for the Employer
Stock or other Employer Security, or (if such acquisition or sale is from or to
a "disqualified person" under Code ss.4975 and there is no established market
providing a fair market value) the independently appraised value as of the date
of the transaction.
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(d) Compliance with Securities Laws: In the event the Trustee
invests any part of the Trust's assets in Employer Stock or any other Employer
Securities, and the Committee thereafter directs the Trustee to dispose of such
investment, or any part thereof, under circumstances which, in the opinion of
the counsel for the Trustee, require a notice of filing and/or registration of
the Employer Stock or other Employer Securities under the Securities Act of 1933
(or rulings and regulations thereunder) and/or qualification of the Employer
Stock or other Employer Securities under the "blue sky laws" of any state or
states, then the Employer, at its own expense, will take or cause to be taken
any and all such action as may be necessary or appropriate to effect notice
filing, registration and/or qualification. The Committee may adopt rules
limiting the ability of Participants who are directors, officers and owners
subject to the "short-swing profit" rules of Section 16(b) of the Securities
Exchange Act to invest Plan assets in Employer Stock or other Employer
Securities and also may limit such Participants' ability to elect transactions
under the Plan that will include the buying or selling of Employer Stock or
other Employer Securities consistent with the requirements for exemption from
Rule 16(b)(3).
(e) Tender Offers and Other Reorganizations: In the event the
consummation of a tender offer, merger, recapitalization, reorganization,
liquidation or exchange transaction relating to Employer Stock or other Employer
Securities and the receipt by the Plan of cash proceeds as a result of such
consummation, Participants may be solicited one or more times for a special
transfer of the cash proceeds generated from the aforementioned transactions
into other investment vehicles offered under the Plan and Trust. Participants
who fail to make a timely election regarding such a transfer shall have such
cash proceeds invested in a fund designated by the Trustee. This special
transfer may be made applicable to cash proceeds from all categories of Employer
Stock.
If at any time under applicable law or other circumstances
Employee contributions or related Employer contributions cannot be invested in
Employer Stock, the Trustee may invest the accounts in cash and such
interest-bearing securities as the Committee considers advisable, until such
funds are again permitted to be invested in Employer Stock. At such time,
Participants may be solicited one or more times to permit them to redesignate
the investment vehicle into which these funds will be invested. Those
Participants who do not respond in a timely manner to such solicitation shall
have these assets invested in a fund designated by the Committee.
Promptly at the time Employee contributions or related
Employer contributions again can be invested in Employer Stock, Participants
shall be so notified; further, to the extent required by applicable law,
Participants shall be notified that any prior election regarding investment of
funds in Employer Stock is not effective, shall be provided a prospectus or any
other required documents, and shall be asked to provide the Employer with new
instructions regarding investment of contributions in Employer Stock; provided,
however, any Participant who has previously instructed the Employer to invest
his or her contributions in Employer Stock and who does not provide the Employer
with subsequent instructions, will have such contributions invested in a fund
designated by the Committee.
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(f) Voting Rights: All voting and related stockholder rights
(including the right to tender in the event of a tender offer and any conversion
rights) shall be passed through to Participants in proportion to the relevant
Employer Stock or Employer Securities held by each Participant's account. The
Trustee shall vote Employer Stock or Employer Securities in accordance with
voting instructions solicited from Participants in whose accounts there is any
Employer Stock or other Employer Securities. Voting rights and related
stockholder rights with respect to Employer Stock and Employer Securities held
by the Plan which are not allocated to any particular Participant's account
and/or as to which the Trustee has not received any Participant direction as to
its vote shall be exercised solely by the Trustee.
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ARTICLE VIII. ADMINISTRATION
8.1 Allocation of Responsibility Among Fiduciaries for Plan
Administration: The Fiduciaries shall have only those powers, duties,
responsibilities, and obligations as are specifically given them under this Plan
and the Trust Agreement.
(a) Employer Responsibilities: In general, the Employer
shall have the sole responsibility for making the contributions provided for
under Section 4.1.
(b) Denny's Inc. Responsibility: Denny's Inc. shall have
the sole authority to appoint and remove the Trustee and members of the
Committee and to amend or terminate, in whole or in part, this Plan.
(c) Committee Responsibilities: The Committee shall have
the sole responsibility for the administration of this Plan, which
responsibility is specifically described in this Plan.
(d) Trustee Responsibilities: The Trustee (subject to
such directions as may be given by the Committee and/or any Investment Manager)
shall have the sole responsibility for the administration of the Trust and the
management of the assets held under the Trust, all as specifically provided in
the Trust.
(e) Investment Manager Responsibilities: If any
Investment Manager is appointed as described above, then it shall have the sole
responsibility for the management of the Trust assets under its control.
Each Fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the Plan
authorizing or providing for such direction, information, or action.
Furthermore, each Fiduciary may rely upon any such direction, information or
action of another Fiduciary as being proper under this Plan, and is not required
under this Plan to inquire into the propriety of any such direction,
information, or action. It is intended under this Plan that each Fiduciary shall
be responsible for the proper exercise of its own powers, duties, and
responsibilities and not for any act or failure to act of another Fiduciary. No
Fiduciary guarantees the Trust Fund in any manner against investment loss or
depreciation in asset value.
8.2 Appointment of Committee: The Plan shall be administered by a
Committee consisting of at least one person who shall be appointed by and serve
at the pleasure of the Board of Directors of Denny's Inc. All usual and
reasonable expenses of the Committee (including, without limitation, fees for
legal services, accounting services and investment related services) may be paid
in whole or in part by the Employer, and any expenses not paid by the Employer
shall be paid by the Trustee out of the principal or income of the Trust Fund.
Provided however, except as otherwise provided under ERISA and regulations
thereunder, no person who is an
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Employee of the Employer shall receive any compensation from the Trust Fund with
respect to his services for the Committee (although such compensation may be
paid to that person by the Employer), but may be reimbursed from the Trust Fund
or by the Employer for reasonable costs and expenses incurred in connection
therewith. Any administrative expenses paid to the Trust Fund shall not be
considered an Employer contribution. In the absence of the appointment of a
Committee, the Employer shall be the Plan Administrator whose duties shall
include all those duties given to the Committee under this Plan.
8.3 Claims Procedure: The Committee shall make all determinations as to
the right of any person to a benefit. All claims for benefits shall be presented
by the Participant or his Beneficiary to the Committee on application forms
provided by the Committee. Such Participant or Beneficiary will subsequently be
notified in writing of acceptance or denial in whole or in part of his claim. In
the event of denial, the notification shall specify the reason(s) for denial,
refer to Plan provisions on which the denial is based, include a description of
any additional material or information necessary and an explanation of why it is
necessary, and advise the Participant or Beneficiary of the procedure for appeal
of such denial. The Participant or Beneficiary whose claim has been denied shall
file a written notice of desire to appeal the denial within sixty days of
notification of claim denial by the Committee, including all of the facts upon
which the appeal is based. The Committee shall arrange a conference with the
claimant within thirty days after the date of the appeal; if the claim cannot be
resolved at such conference, a hearing will be held before the Committee within
sixty days of the date of appeal. At the hearing, the Participant or
Beneficiary, or his representative may present relevant evidence, written issues
and comments. Within sixty days after the hearing, the Committee shall render a
determination upon the appealed claim, accompanied by a written statement as to
the reasons therefor. The determination so rendered shall be final and binding
upon all parties.
8.4 Records and Reports: The Committee shall exercise such authority
and responsibility as it deems appropriate in order to comply with ERISA and
government regulations issued thereunder relating to records of Participants'
Service, account balances and the percentage of such account balances which are
nonforfeitable under the Plan; notifications to Participants; annual
registrations with the Internal Revenue Service; and annual reports to the
Department of Labor.
8.5 Other Committee Powers and Duties: The Committee shall have such
duties and powers as may be necessary to discharge its duties hereunder,
including, but not by way of limitation, the following:
(a) To construe and interpret the Plan (including, without
limitation, any of its terms which are uncertain, doubtful or disputed), decide
all questions of eligibility and determine the amount, manner and time of
payment of any benefits hereunder;
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(b) To prescribe requirements, guidelines and procedures to be
followed by Participants or Beneficiaries in making elective salary deferrals
and in filing applications for benefits or withdrawals;
(c) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) To receive from the Employer and from Participants such
information as shall be necessary for the proper administration of the Plan;
(e) To furnish the Employer, upon request, such annual reports
with respect to the administration of the Plan as are reasonable and
appropriate;
(f) To receive, review, and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust Fund from the Trustee;
(g) To appoint or employ individuals to assist in the
administration of the Plan and Trust, and any other agents it deems advisable,
including any Investment Manager and legal and actuarial counsel;
(h) To develop and carry out a funding and/or investment
policy in cooperation with the Trustee (and an Investment Manager, if any)
consistent with the aims and objectives of the Plan.
The Committee shall have no power to add to, subtract from, or modify
any of the explicit terms of the Plan, or to change or add to any specific
benefits provided by the Plan, or to waive or fail to apply any specific
requirements of eligibility for a benefit under the Plan. However, any
construction or interpretation of the Plan's provisions or decisions as to
benefits under this Plan which is adopted by the Committee in good faith shall
be binding upon all parties to or Beneficiaries of the Plan, subject only to any
administrative intra-Plan rights of review provided by this Plan's claim
procedure.
8.6 Rules and Decisions: The Committee may adopt such rules as it
deems necessary, desirable, or appropriate. All rules and decisions of the
Committee shall be uniformly and consistently applied to all Participants in
similar circumstances. When making a determination or calculation, the Committee
shall be entitled to rely upon information furnished by a Participant or
Beneficiary, the Employer, the legal counsel of the Employer, or the Trustee.
8.7 Committee Procedures: The Committee may act at a meeting or in
writing without a meeting. The Committee shall elect one of its members as
chairman, appoint a secretary, who may or may not be a Committee member, and
advise the Trustee of such actions in writing. The secretary shall keep a record
of all meetings and forward all necessary communications to the
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Employer or the Trustee. The Committee may adopt such by-laws and regulations as
it deems desirable for the conduct of its affairs. All decisions of the
Committee shall be made by the vote of the majority including actions in writing
taken without a meeting; provided, that the Committee may adopt rules whereby
one or more Committee members may act for the Committee either with respect to
all Committee duties or only as to specific Committee duties. A dissenting
Committee member who, within a reasonable time after he has knowledge of any
action or failure to act by the majority, registers his dissent in writing
delivered to the other Committee members, the Employer, and the Trustee, shall
not be responsible for any such action or failure to act.
8.8 Authorization of Benefit Payments: The Committee shall issue
directions to the Trustee concerning all benefits which are to be paid from the
Trust Fund pursuant to the provisions of the Plan.
8.9 Application and Forms for Benefits: The Committee may require a
Participant to complete and file with the Committee an application for a benefit
on forms approved by the Committee, and to furnish any other pertinent
information requested by the Committee. The Committee may rely upon all such
information so furnished it, including the Participant's current mailing
address.
8.10 Facility of Payment: Whenever, in the Committee's opinion, a
person entitled to receive any payment of a benefit or installment of a benefit
hereunder is under a legal disability or is incapacitated in any way so as to be
unable to manage his financial affairs, the Committee may direct the Trustee to
make payments to such person or to his legal representative or to a relative or
friend of such person for his benefit, or the Committee may direct the Trustee
to apply the payment for the benefit of such person in such manner as the
Committee considers advisable. Any payment of a benefit or installment thereof
in accordance with the provisions of this Section shall be a complete discharge
of any liability for the making of such payment under the provisions of the
Plan.
8.11 Inability to Locate Participant, Surviving Spouse or Beneficiary:
In the event that a Participant, Surviving Spouse or Beneficiary entitled to
receive Plan benefits fails to respond or cannot be located by the Committee
within six months following the sending of notice by certified mail to his last
known address, his Plan benefits shall be declared by the Committee to be
forfeited and shall be used to reduce the Employer contribution on the next
Valuation Date. If the Participant, Surviving Spouse or Beneficiary is later
located or makes a claim for benefits, any amount treated as a forfeiture by
reason of this Section shall be reinstated by the Committee from a special
Employer contribution or from Forfeitures available in the year of
reinstatement.
8.12 Omission of Eligible Employee: If, in any Plan Year, any Employee
who should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution by the
Employer for the year has been made and allocated, the Employer shall make a
subsequent contribution with respect to the omitted Employee in the
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amount which the said Employer would have contributed with respect to him had he
not been omitted. Such contribution shall be made regardless of whether or not
it is deductible in whole or in part in any taxable year under applicable
provisions of the Code by such Employer.
8.13 Inclusion of Ineligible Employee: If, in any Plan Year, any person
who should not have been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made until after a
contribution for the year has been made and allocated, the appropriate Employer
shall not be entitled to recover the contribution made with respect to the
ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture for the Plan Year in
which the discovery is made.
8.14 Bonding: Every Fiduciary (including any Committee and any employee
of the Employer who handles the Plan's contributions, distributions or assets),
except a bank or an insurance company, unless exempted by ERISA and regulations
thereunder, shall be bonded in an amount not less than ten percent of the amount
of the funds such Fiduciary handles; provided, however, that the minimum bond
shall be $1,000 and the maximum bond, $500,000. The amount of funds handled
shall be determined at the beginning of each Plan Year by the amount of funds
handled by such person, group, or class to be covered and their predecessors, if
any, during the preceding Plan Year, or if there is no preceding Plan Year, then
by the amount of the funds to be handled during the then current year. If the
amount handled cannot be determined with reasonable accuracy, then it may be
deemed to be the total amount of Plan assets at the end of the preceding Plan
Year. The bond shall provide protection to the Plan against any loss by reason
of acts of fraud or dishonesty by the Fiduciary alone or in connivance with
others. The surety shall be a corporate surety company (as such term is used in
ss.412(a)(2) of ERISA), and the bond shall be in a form approved by the
Secretary of Labor. Notwithstanding anything in the Plan to the contrary, the
cost of such bonds shall be an expense of and may, at the election of the
Committee, be paid from the Trust Fund or by the Employer.
8.15 Indemnification: The Employer shall indemnify and save harmless
the Committee members to the maximum extent permitted under ERISA against any
and all claims, losses, damages, expenses and liabilities the Committee may
incur in the exercise and performance of its duties hereunder, unless such
actions are determined to be due to gross negligence or willful misconduct.
8.16 Plan Administrator's Discretion to Interpret the Plan: It is the
Plan settlor's original intention that the Committee, as Plan Administrator
under this Plan (which term includes for these purposes all related documents,
including, but not limited to, insurance or trust documents), in addition to the
authority granted in Section 8.5 above, has discretionary authority to interpret
and construe this Plan's provisions as necessary to determine eligibility for
benefits and otherwise to construe disputed, doubtful or uncertain terms under
the Plan.
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ARTICLE IX. MISCELLANEOUS
9.1 Nonguarantee of Employment: Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any employee, or
as a right of any employee to be continued in the employment of the Employer, or
as a limitation of the right of the Employer to discharge any of its employees,
with or without cause.
9.2 Rights to Trust Assets: No Employee or Beneficiary shall have any
right to, or interest in, any assets of the Trust Fund upon termination of his
employment or otherwise, except as provided from time to time under this Plan,
and then only to the extent of the benefits payable under the Plan to such
Employee out of the assets of the Trust Fund. All payments of benefits as
provided for in this Plan shall be made solely out of the assets of the Trust
Fund and none of the Fiduciaries shall be liable therefor in any manner.
9.3 Nonalienation of Benefits: The Trust Fund shall not in any manner
be liable for, or subject to, the debts, contracts, liabilities, engagements, or
torts of any person entitled to benefits hereunder. Benefits payable under this
Plan shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or
levy of any kind, either voluntary or involuntary, including any such liability
which is for alimony or other payments for the support of a spouse or former
spouse, or for any other relative of the Employee, prior to actually being
received by the person entitled to the benefit under the terms of the Plan; and
any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or otherwise dispose of any right to benefits payable hereunder, shall be
void. The preceding sentence shall not apply to (a) the creation, assignment or
recognition of a right to any benefit payable with respect to a Participant
pursuant to an order which is determined under Section 6.8 to be a Qualified
Domestic Relations Order as defined in Code ss.414(p), which was entered into on
or after January 1, 1985 or (b) any other alienation permitted under Code
ss.401(a)(13) or rules and regulations thereunder. Provided, that a Beneficiary
who has been designated in accordance with Article VI to receive benefits in the
event of a Participant's death may elect to disclaim all or any part of such
benefits in favor of another designated Beneficiary.
9.4 Discontinuance of Employer Contributions: In the event of permanent
discontinuance of contributions to the Plan by the Employer, the accounts of all
Participants shall, as of the date of such discontinuance, become
nonforfeitable.
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ARTICLE X. AMENDMENTS AND ACTION BY EMPLOYER
10.1 Amendments: Denny's Inc. reserves the right to make from time
to time any amendment or amendments to this Plan which does not cause any part
of the Trust Fund to be used for, or diverted to, any purpose other than the
exclusive benefit of Participants, Former Participants, or their Beneficiaries;
provided, however, that Denny's Inc. may make any amendment it determines
necessary or desirable, with or without retroactive effect, to comply with
ERISA. The procedure followed for making any amendment shall consist of the
preparation of a written Plan amendment and its execution by one or more
officers of Denny's Inc. Such amendment may, but need not, be authorized (or
later ratified) by the Board of Directors of Denny's Inc. The Trustee's
signature on the Plan's documents (including any Plan amendments) shall not be
necessary and shall only indicate the Trustee's receipt of those documents.
Notwithstanding the above, no amendment made by Denny's Inc. shall:
(a) Reduce the vested percentages (determined without regard
to such amendment as of the later of the date the amendment was adopted or the
date the amendment was effective) of any Participant; or decrease the balance in
any Participant's account; or eliminate an optional form of benefit in violation
of Code ss.411(d)(6) and regulations thereunder, with respect to benefits
attributable to Service prior to the amendment;
(b) Provide for the use of any portion of the Trust Fund for
any purpose other than the exclusive benefit of Participants and Beneficiaries,
or provide that any portion of the Trust Fund shall ever revert to or be used by
the Employer, except as otherwise provided in the Trust Agreement; or
(c) Increase the duties or liabilities of the Employer, the
Committee or Trustee without its written consent.
10.2 Special Rules Regarding Amendments Relating to Vesting: In the
event the vesting provisions of the Plan are amended, each Participant in the
Plan who has three (or five in the case of a Participant who does not have at
least one Hour of Service with the Employer for Plan Years beginning after
December 31, 1988) or more Years of Service shall be given an election to have
the nonforfeitable percentage of his accounts determined without regard to such
amendment. The election period will begin the date the amendment is adopted and
will end on the last to occur of (a) sixty days after the day the amendment is
adopted, (b) sixty days after the day the amendment becomes effective, and (c)
sixty days after the date the Participant is given written notice of the
amendment and of the election by the Employer or the Committee. If the election,
as herein provided, is not given to any such Participant, his nonforfeitable
percentages under the Plan, as amended, cannot at any time be less than such
percentage determined without regard to such amendment.
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10.3 Action by Employer: Any action by Denny's Inc. or the Employer
under this Plan may be by resolution of its Board of Directors, or by any person
or persons duly authorized by said Board or having apparent authority by virtue
of his corporate office to take such action.
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ARTICLE XI. SUCCESSOR EMPLOYER AND MERGER
OR CONSOLIDATION OF PLANS
11.1 Successor Employer: In the event of the dissolution, merger,
consolidation, or reorganization of the Employer, provision may be made by which
the Plan will be continued by the successor; and, in that event, such successor
shall be substituted for the Employer under the Plan. The substitution of the
successor shall constitute an assumption of Plan liabilities by the successor
and the successor shall have all of the powers, duties, and responsibilities of
the Employer under the Plan.
11.2 Plan Assets in the Event of Merger or Consolidation of Plans: In
the event of any merger or consolidation of the Plan with (or transfer in whole
or in part of the assets and liabilities of the Trust Fund to) another trust
fund held under any other plan of deferred compensation maintained or to be
established for the benefit of all or some of the Participants of this Plan, the
assets of the Trust Fund applicable to such Participants shall be transferred to
the other trust fund only if:
(a) Each Participant would (if either this Plan or the other plan
then terminated) receive a benefit immediately after the merger, consolidation,
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if this Plan had then terminated);
(b) Resolutions of the Board of Directors of Denny's Inc. or the
Employer under this Plan, or of any new or successor employer of the affected
Participants, shall authorize such transfer of assets; and, in the case of the
new or successor employer of the affected Participants, its resolutions shall
include an assumption of liabilities with respect to such Participants'
inclusion in the new employer's plan; and
(c) Such other plan and trust are qualified under Code ss.401(a)
and ss.501(a).
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ARTICLE XII. PLAN TERMINATION
12.1 Right to Terminate: In accordance with the procedure set forth in
this Article, Denny's Inc. may terminate the Plan at any time. In the event of
the dissolution, merger, consolidation, or reorganization of Denny's Inc., the
Plan shall terminate and the Trust Fund shall be liquidated unless the Plan is
continued by a successor to the Employer in accordance with Section 11.1.
12.2 Partial Termination: Upon termination of the Plan with respect to
a group of Participants which constitutes a partial termination of the Plan, the
Trustee shall, in accordance with the directions of the Committee, allocate and
segregate for the benefit of the affected Employees then or theretofore employed
by the Employer with respect to which the Plan is being terminated the amount
necessary to pay the proportionate interest of such Employees who are
Participants in the Trust Fund. The funds so allocated and segregated shall be
used by the Trustee to pay benefits to or on behalf of all affected Employees in
accordance with Section 12.3.
12.3 Liquidation of the Trust Fund: Upon partial or complete
termination of the Plan, the accounts of all employees affected thereby shall
become fully vested and nonforfeitable, and the Committee shall direct the
Trustee to distribute (or transfer directly in accordance with Section 6.4(g))
the assets remaining in the Trust Fund, after payment of any expenses properly
chargeable thereto, to Participants, Former Participants, and Beneficiaries in
proportion to their respective account balances; provided, however, that any
amounts properly allocated to the Plan's Suspense Account, pursuant to Section
5.3 of the Plan, shall upon termination of the Plan revert to the Employer. For
purposes of calculating Forfeitures with respect to any Former Participants who
were not employed on the Plan's termination date, but who still had account
balances in the Plan immediately prior to the Plan's termination, such Former
Participants' vested percentages shall be calculated in accordance with the
Plan's vesting schedule immediately prior to the Plan's termination. Any amounts
not vested with respect to such Former Participants shall be treated as a
Forfeiture under the Plan, and such Former Participants shall be treated as if
they had incurred five consecutive Breaks in Service as of the date of Plan
termination.
12.4 Manner of Distribution: To the extent that no discrimination in
value results, any distribution after termination of the Plan may be made, in
whole or in part, in cash, in securities or other assets in kind, as the Plan
Administrator (in its discretion) may determine; provided, that if no annuity
distribution option is permitted under Article VI of the Plan, then no
distribution upon termination may include an annuity. All noncash distributions
shall be valued at fair market value at date of distribution.
-65-
<PAGE> 70
ARTICLE XIII. RELATED CORPORATIONS
13.1 Joinder: Any corporation which is related to the Employer by stock
ownership may adopt this Plan by action of its Board of Directors.
13.2 Contributions: Each corporation which joins the Plan and thereby
becomes an Employer hereunder shall make its own contributions to the Plan,
except to the extent otherwise permitted under the Code, provided that, such
contributions shall be made so as to avoid having separate benefit structures.
13.3 Treatment of Employee Transfers:
(a) Transfer to or From a Related Employer:
(1) Transfer to a Related Employer: In the event that
any individual is transferred from the employ of an Employer of the Plan to the
employ of an employer that is not an Employer of the Plan but that is a Related
Employer (as defined below), All Service with the Related Employer shall be
considered Service for eligibility and vesting purposes. The Committee may adopt
rules allowing for such an Employee's vested accounts under the Plan to be
transferred to any qualified defined contribution retirement plan maintained by
such Related Employer.
(2) Transfer From a Related Employer: In the event that
any individual is transferred from the employ of a Related Employer (as defined
below) to the employ of an Employer of the Plan, all Service with the Related
Employer shall be considered Service for eligibility and vesting for purposes
under the Plan. The Committee may adopt rules allowing such individual to
transfer to this Plan the individual's vested account balances under any
qualified defined contribution retirement plan maintained by such Related
Employer.
(3) Definition of Related Employer: For purposes of this
Section, the term Related Employer means an employer required to be aggregated
with the Employer under Subsection b, c, m. or o of Code ss.414. If at any time
a Related Employer is no longer required to be aggregated with the Employer
under Subsection b, c, m or o of Code ss.414, that employer will no longer be
considered a Related Employer for purposes of determining an employee's Service
under the Plan. In computing Service with a Related Employer, only time while
such entity is a Related Employer shall be included except to the extent
otherwise provided by the Committee.
(b) Transfer Between Employers of the Plan: In the event
that an individual is transferred from one Employer of the Plan to another
Employer of the Plan while remaining in a class of employment covered by the
definition of Employee and otherwise eligible to participate in the Plan, such
transfer will have no effect on computation of the Employee's
-66-
<PAGE> 71
Service for any purpose. All Service with any Employer while a covered
Participant shall count as Service under the Plan.
13.4 Commingling of Funds: Notwithstanding that the Plan may for some
purposes be considered the separate Plan of each Employer or that contributions
are made and forfeitures are allocated separately, the assets of the Plan may be
invested and commingled as a single fund without allocation on the books and
records of the Trustee.
-67-
<PAGE> 72
IN WITNESS WHEREOF, Denny's Inc. (for itself and the Employers who have
adopted this Plan) has caused this Plan to be properly executed on the 23 day of
December, 1994.
DENNY'S INC.
("Employer")
By: /s/ C. Burt Duren
------------------------------------------
Its: Vice President
-----------------------------------------
(Corporate Seal)
ATTEST:
/s/ Illegible Signature
- -----------------------------
Asst. Secretary
-68-
<PAGE> 73
APPENDIX A
Affiliated Employers Who Have Adopted the
Denny's Inc. Profit Sharing Retirement Plan
as of January 1, 1994
El Pollo Loco, Inc.
Proficient Food Company
Portiontrol Foods, Inc.
-69-
<PAGE> 74
EXHIBIT 4.1
AMENDMENT NO. ONE
TO THE
DENNY'S INC. PROFIT SHARING RETIREMENT PLAN
AS AMENDED AND RESTATED
JANUARY 1, 1987
THIS AMENDMENT, made and executed the 7th day of September, 1995, by
Denny's Inc. and its affiliates which have joined as participating employers
under this Plan (collectively, the "Employer");
W I T N E S S E T H:
A. The Employer has entered into the Denny's Inc. Profit Sharing
Retirement Plan (the "Plan") for the benefit of eligible employees (including
eligible employees of Denny's Inc., DFC Trucking Co., El Pollo Loco, Inc.,
Proficient Food Company and Portiontrol Foods, Inc.) and has reserved the right
to amend the same from time to time.
B. The Employer desires to amend the Plan in the manner hereinafter set
forth in connection with the sale of Proficient Food Company and its subsidiary
DFC Trucking Co. THEREFORE, the Plan is amended as follows:
1. A new Section 2.1(55A) shall be added to the Plan to read as
follows: "(55A) PFC GROUP: Proficient Food Company and its
subsidiary DFC Trucking Co."
2. A new Section 2.1(55B) shall be added to the Plan to read as
follows: "(55B) PFC GROUP EMPLOYEES: Active employees of the
PFC Group on the PFC Transition Date."
3. A new Section 2.1(55C) shall be added to the Plan to read as
follows:
"(55C) PFC TRANSITION DATE: The "Closing Date" as that term is
defined in the Stock Purchase Agreement between Denny's Holdings, Inc.,
Flagstar Corporation, Flagstar Companies, Inc., Proficient Acquisition
Corp., and Meadowbrook Meat Company, Inc. dated July 7, 1995 which
describes the sale of the PFC Group to a buyer unrelated to Flagstar
Corporation or any of its affiliates, such date to be on or about
September 1, 1995."
1
<PAGE> 75
4. Effective as of the PFC Transition Date and thereafter, the PFC
Group shall no longer be Plan sponsors or participating Employers under the Plan
and PFC Group Employees shall no longer be permitted to make pre-tax deferral
contributions under the Plan or be eligible to receive Employer contributions
under the Plan.
5. Section 3.1 shall be amended by adding a new sentence to the end
thereof to read as follows:
"Notwithstanding the foregoing, in connection with the sale of
the PFC Group, no Employee who is a PFC Group Employee and who
otherwise would become eligible to participate in the Plan on or after
the PFC Transition Date shall be eligible to participate in the Plan."
6. Section 6.3(b) shall be amended by adding a new paragraph to the
end thereof to read as follows:
"Effective as of the PFC Transition Date, a Plan Participant
who is a PFC Group Employee shall be fully vested in the amount of any
Matching Contributions attributable to his Pre-Tax Deferrals (even if
not yet allocated to such Participant's Matching Account as of the PFC
Transition Date). Notwithstanding the foregoing, the sale of the PFC
Group shall have no effect for Plan purposes on the vested percentage
of benefits for former employees of the PFC Group who were not active
employees of the PFC Group on the PFC Transition Date."
7. Effective as of the PFC Transition Date, PFC Group Employees shall
be considered terminated employees under the Plan and shall be eligible to
receive a lump sum distribution from their accounts as provided in Section 6.3
and Section 6.4 of the Plan and consistent with Internal Revenue Code
ss.401(k)(10). Notwithstanding the foregoing, the sale of the PFC Group shall
have no effect for Plan purposes on the amount of benefits, terminated status or
timing of distributions for former employees of the PFC Group who are not active
employees of the PFC Group on the PFC Transition Date.
8. The foregoing Amendments shall be effective as of the PFC
Transition Date. IN WITNESS WHEREOF, the Employer has caused the
Amendment to be properly executed
2
<PAGE> 76
on the 7th day of September, 1995.
DENNY'S INC.
("Employer")
By: /s/ Rhonda J. Parish
-----------------------------------
Title: Vice President
--------------------------------
* * * * * * * * *
The signatures of Proficient Food Company, DFC Trucking Co. and NationsBank, N.
A. (Carolinas) while not necessary under the terms of the Plan and Trust shall
indicate receipt of this Amendment and agreement with the actions taken by this
Amendment.
PROFICIENT FOOD COMPANY
By: /s/ Rhonda J. Parish
-----------------------------------
Title: Vice President
--------------------------------
DFC TRUCKING CO.
By: /s/ Rhonda J. Parish
-----------------------------------
Title: Vice President
--------------------------------
NATIONSBANK, N. A. (CAROLINAS)
By: /s/ Illegible signature
-----------------------------------
Title: Vice President
--------------------------------
3
<PAGE> 77
AMENDMENT NO. TWO
TO THE
DENNY'S INC. PROFIT SHARING RETIREMENT PLAN
AS AMENDED AND RESTATED JANUARY 1, 1987
THIS AMENDMENT, made and executed the 19th day of January, 1996, by
Denny's Inc. and its subsidiary corporations which have joined as participating
employers under this Plan (collectively, the "Employer");
W I T N E S S E T H:
A. The Employer has entered into the Denny's Inc. Profit Sharing
Retirement Plan (the "Plan") for the benefit of eligible employees and has
reserved the right to amend the same from time to time.
B. The Employer desires to amend the Plan in the manner hereinafter
set forth, as a condition of the Internal Revenue Service favorable
determination letter.
THEREFORE, the Plan is amended as follows:
1. Section 4.4(a)(2)(iii) of the Plan shall be amended to read as
follows:
"(iii) In addition to or as an alternative to the foregoing,
the Committee may in its discretion require that Participants who are
Highly Compensated Employees be required to amend their Pre-Tax
Deferral percentage elections and/or to receive as a cash distribution
under Code ss.401(k)(8) Excess Deferrals already contributed to the
Plan with respect to the Plan Year, plus any Income attributable
thereto (computed in accordance with the Trustee's usual procedures for
allocating Income to Participant's accounts). If any Pre-Tax Deferrals
are distributed pursuant to this Section, any Matching Contributions
allocated to the Participant's Employer Matching Account by reference
to those Pre-Tax Deferrals also must be distributed (if such Matching
Contributions are vested), or forfeited (if such Matching Contributions
are not vested) as required to comply with ss.401(a) of the
Commissioner's regulations. In all events, the Committee's
determination as to which Participants will be affected under this
subparagraph (iii) shall be determined by reducing the deferrals of
Participants who are Highly
<PAGE> 78
Compensated Employees in order of their Actual Deferral Percentages,
beginning with the highest such percentage during that Plan Year;
provided, that Excess Deferrals attributable to Family Members who are
subject to the family member aggregation rules of
ss.1.401(k)-l(g)(l)(ii)(C) of the Commissioner's regulations shall be
allocated among the Family Members in proportion to the Pre-Tax
Deferrals (and amounts treated as Pre-Tax Deferrals) of each Family
Member that are combined to determine the Actual Deferral Percentages.
Any cash distributions under the foregoing sentence shall be treated as
if they had never been deferred to the Plan under Section 4.3."
2. Section 4.4(b)(2) of the Plan shall be amended to read as follows:
"(2) In the event that neither test in Subsection (4) is met as of the
last day of any Plan Year:
(i) The Committee shall request that the Employer make an
additional Matching Contribution to the Plan, which contribution shall be
allocated among Matching Accounts as an additional Matching Contribution
allocated based upon some stated amount of Pre-Tax Deferrals either among all
Participants or just among those Participants who are Non-Highly Compensated
Employees. Any amount contributed pursuant to this subparagraph (i) shall be a
new Matching Contribution, and no amount previously contributed to the Plan as a
Pre-Tax Deferral or as a qualified non-elective contribution as described in
ss.1.401(m)-1(b)(5) of the Commissioner's regulations may be redesignated as a
Matching Contribution under this subparagraph.
(ii) In addition to or as an alternative to the foregoing, the
Committee may, in its discretion, require that Participants who are Highly
Compensated Employees be required to receive as a cash distribution under Code
ss.401(m)(6) any Excess Contributions of vested Matching Contributions already
contributed to the Plan with respect to the Plan Year, plus any Income
attributable thereto (computed in accordance with the Trustee's usual procedures
for allocating Income to Participant's accounts). In all events, the Committee's
determination as to which Participants will be affected shall be determined
under this subparagraph (ii) by reducing the Matching Contributions by or on
behalf of Participants who are Highly Compensated Employees in order of their
Actual Contribution Percentages, beginning with the highest such percentage
during that Plan Year; provided, that Excess Contributions attributable to
Family Members who are subject to the family member aggregation rules of
ss.1.401(m)-1(f)(1)(ii)(C) of the Commissioner's regulations shall be allocated
among the Family Members in proportion to the Matching Contributions (and
amounts treated as Matching Contributions) of each Family Member that are
combined to determine the Actual Contribution Percentages. Any cash
distributions under the foregoing sentence shall be treated as if they had never
been contributed to the Plan under Section 4.1.
(iii) In addition to or as an alternative to the foregoing, the
Committee may require that non-vested Matching Contributions be forfeited to
correct Excess Contributions. "
2
<PAGE> 79
3. The foregoing Amendments shall be effective as of the Plan's Effective
Date, which is January 1, 1987.
IN WITNESS WHEREOF, the Employer has caused the Amendment to be
properly executed on the 19th day of January, 1996.
DENNY'S INC.
("Employer")
(Corporate Seal)
By: /s/ Rhonda J. Parish
----------------------------------------
Title: Vice President, General Cousel and
-----------------------------------
Secretary
-----------------------------------
Attest:
By: /s/ J.S. Melton
-------------------------------
Title: Assistant Secretary
----------------------------
3
<PAGE> 80
AMENDMENT NO. THREE
TO THE
DENNY'S INC. PROFIT SHARING RETIREMENT PLAN
AS AMENDED AND RESTATED
JANUARY 1, 1987
THIS AMENDMENT, made and executed the _______ day of ________________,
1996, by Denny's Inc. for itself and its subsidiary corporations which have
joined as participating employers under this Plan (collectively, the
"Employer");
W I T N E S S E T H:
A. The Employer previously has entered into the Denny's Inc. Profit
Sharing Retirement Plan (the "Plan") for the benefit of eligible employees and
has reserved the right to amend the same from time to time.
B. Denny's Inc. desires to amend the Plan in the manner hereinafter
set forth in connection with a change in service providers for the Plan and a
switch to daily valuations.
THEREFORE, the Plan is amended as follows:
1. Section 2.1(56) of the Plan shall be amended to read as follows:
"(56) PLAN: Denny's 401(k) Plan (formerly called the
Denny's Inc. Profit Sharing Retirement Plan), the Plan set forth
herein, as amended from time to time."
2. Section 2.3 of the Plan shall be amended to read as follows:
"2.3 Governing Law: This Plan shall be governed to
the maximum extent by federal law under ERISA. To the extent not
so preempted or otherwise governed by ERISA, the laws of the
state of South Carolina shall control on all matters."
3. The first sentence of Section 4.3(c) shall be amended to read
as follows:
"Elections to make, withdraw, modify, discontinue or
resume Employee Pre-Tax Deferrals shall be made by any method
authorized by the Committee, including but not limited to
telephonic or electronic communication."
<PAGE> 81
4. The fourth sentence of Section 7.2(a) shall be amended to read as
follows:
"Subject to the foregoing, investments of each such collective
investment fund shall be managed and otherwise shall be the
responsibility of Denny's Inc. (or the Investment Manager
appointed by the Committee to manage the fund), and separate
records shall be maintained to record the performance and Income
of each such fund."
5. The second and third sentences of Section 7.2(c) shall be amended
to read as follows:
"Any such direction once made shall remain in effect as to
contributions, Forfeitures and distributions for that Plan Year
and succeeding Plan Years, unless the Participant shall file a
timely application made in accordance with applicable Committee
rules and procedures which effectively redesignates the
investment of his account. In the event a Participant shall fail
for any reason to make an effective direction of his accounts at
a time when different collective investment funds are available,
then the amounts in his accounts shall be deemed to have been
designated to a fund or funds as selected by the Committee to
apply in such instances, subject to any funding policy statement
or any other restrictions or guidelines provided by the Committee
and to the standards that would be followed by a prudent
fiduciary in similar circumstances."
6. The second and third sentences of Section 7.3(a) shall be deleted
in their entirety.
7. The first sentence of Section 7.3(d) shall be amended to read as
follows:
"In the event the Trustee invests any part of the Trust's assets
in Employer Stock or any other Employer Securities, and the
Committee thereafter directs the Trustee to dispose of such
investment, or any part thereof, under circumstances which
require a notice of filing and/or registration of the Employer
Stock or other Employer Securities under the Securities Act of
1933 (or rulings and regulations thereunder) and/or qualification
of the Employer Stock or other Employer Securities under the
"blue sky laws" of any state or states, then the Employer, at its
own expense, will take or cause to be taken any and all such
action as may be necessary or appropriate to effect notice
filing, registration and/or qualification."
8. The third sentence of Section 7.3(f) shall be amended to read as
follows:
"Voting rights and related stockholder rights with respect to
Employer Stock and Employer Securities held by the Plan which are
not allocated to any particular Participant's account and/or as
to which the Trustee has not received any Participant direction
as to its vote shall not be voted."
2
<PAGE> 82
9. A new Section 9.5 shall be added to the Plan to read as follows:
"9.5 Compensation and Expenses: The Trustee,
Investment Manager and recordkeeper of the Plan ("Service
Providers") will receive reasonable compensation as may be agreed
upon from time to time between Flagstar or the Committee and such
Service Providers. To the extent permitted by law, such
compensation shall be paid from the Trust Fund unless paid by the
Employer."
10. The foregoing Amendments shall be effective as of July 1, 1996.
IN WITNESS WHEREOF, the Employer has caused the Amendment to be
properly executed on the ____________ day of __________________, 1996.
DENNY'S INC.
By:
----------------------------------
Title:
-------------------------------
3
<PAGE> 83
AMENDMENT NO. FOUR
TO THE
DENNY'S 401(K) PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 1987
THIS AMENDMENT, made and executed the 29th day of December, 1997 by
DENNY'S, INC., for itself and its affiliates which have adopted the Denny's
401(k) Plan (collectively, the "Employer");
W I T N E S S E T H:
A. The Employer previously has entered into the Denny's 401(k) Plan
(the "Plan") for the benefit of eligible employees and Denny's, Inc. has
reserved the right to amend the same from time to time.
B. Denny's, Inc. desires to amend the Plan in the manner hereinafter
set forth. THEREFORE, the Plan is amended as follows:
1. Effective January 1, 1997, Section 2.1(28) of the Plan shall be
amended to read as follows:
"(28) EMPLOYER: Denny's, Inc., a corporation organized and
existing under the laws of the State of California, or its successor or
successors that assume Plan liabilities pursuant to Article XI and any
related corporation or entity which adopts this Plan with the consent
of Denny's, Inc. Adopting Employers as of January 1, 1997 are listed on
Appendix A. Appendix A may be updated from time to time by an
authorized officer of Denny's, Inc."
2. Effective January 1, 1997, Section 4.1 of the Plan shall be
amended to read as follows:
"4.1 Matching Contributions and Pre-Tax Deferrals: Each
individual Employer in its discretion may, for each year, contribute an
amount as it may determine; provided, that to the extent permitted by
the Code and regulations thereunder, an Aggregated Employer may make an
Employer's contribution and the limitations on deductibility shall be
determined on an aggregate controlled group basis. Such amount shall
not exceed the lesser of the following amounts:
<PAGE> 84
(a) The amount which is elected to be deferred by Participants
as Pre-Tax Deferrals under Section 4.3; plus any additional amount
contributed as an Employer contribution by each individual Employer in
its discretion; or
(b) Fifteen percent of all 415 Compensation paid or accrued in
the Plan Year to all Participants in the employ of the Employer who are
eligible to receive an allocation to their accounts in accordance with
the provisions of Section 5.2, plus any contribution carryover,
pre-1987 limitation carryforward, or other amounts permitted (even if
not deductible) under Code ss.404(a), and less any Employer
contributions or Employee pre-tax contributions to any other profit
sharing plan or Code ss.401(k) plan of the Employer.
"All contributions of the Employer shall be made in cash or
other property permitted by ERISA, and shall be conditioned upon their
deductibility under Code ss.404 and shall be paid to the Trustee, and
payments shall be made not later than the date prescribed by law for
filing the Employer's federal income tax returns, including extensions
which have been granted for the filing of such tax returns; provided,
that Pre-Tax Deferrals made pursuant to Participants' elections under
Section 4.3 shall be paid to the Trustee on the earliest date on which
such contributions can reasonably be segregated from the Employer's
general assets but not later than the fifteenth business day of the
month following the month in which the Pre-Tax Deferrals are received
or withheld by the Employer (or such other period permitted by the
Commissioner or under ERISA). Contributions of the Employer which are
determined to be nondeductible shall be returned to the Employer in
accordance with the provisions of the Trust Agreement."
3. Effective January 1, 1997, Section 5.2(c) of the Plan shall be
amended to read as follows:
"(c) Employer Contributions: As of each Valuation Date (or
more frequently in the Committee's discretion exercised in a manner
that is not discriminatory with respect to different Participants), the
Employer contributions (if any) for the Plan Year shall be allocated in
accordance with the formula determined in writing by each individual
Employer in its discretion among those Participants who were in the
employ of such Employer during the period from the last allocation
date."
4. Effective January 1, 1997, Section 6.3 of the Plan shall be
amended to read as follows:
2
<PAGE> 85
"6.3 Termination for Other Reasons: If a Participant's
employment with the Employer is terminated before Normal Retirement Age
for any reason other than Disability or death, the Participant (or his
Beneficiary under Section 6.2 in the event of the Participant's death
prior to his receipt of all his Plan benefits) shall be entitled to the
sum of the amounts determined under (a) and (b) below:
(a) Pre-Tax Account and Other Employee Accounts: The entire
amount credited to his Pre-Tax Account, Employee After-Tax Contribution
Account and his Rollover Account, plus
(b) Vested Matching Account: An amount equal to the vested
percentage of his Matching Account balance, with such vested percentage
to be determined in accordance with the applicable schedule provided in
Appendix B.
"The percentage of the Participant's Matching Account which is not
vested shall be a Forfeiture subject to the provisions of Section 4.6.
"Payment of benefits due under this Section 6.3 shall be made in
accordance with Section 6.4."
5. Effective as of the date specified therein, a new Section 13.5
shall be added to the Plan to read as follows:
"13.5 Special Provisions Regarding Portiontrol Foods, Inc.
Employees: Effective upon the sale of Portiontrol Foods, Inc. ("PFI")
to a buyer unrelated to Denny's, Inc. or any of its affiliates (in
accordance with the Restated Stock Purchase Agreement by and among
Flagstar Corporation, Denny's Holdings, Inc., TWS 300 Corp., Simeus
Holdings, Inc. and PFI Acquisition Corp. dated September 27, 1996) and
thereafter, PFI is no longer a Plan sponsor or participating Employer
under the Plan and PFI Employees shall no longer be permitted to make
Pre-Tax Deferrals or Employee After-Tax Contributions under the Plan or
be eligible to receive Employer contributions under the Plan.
"Effective upon the sale of PFI as described above, PFI
Employees shall be considered terminated employees under the Plan with
respect to their Employee After-Tax Contribution, Matching and Rollover
Accounts and shall be eligible for a distribution from such accounts as
provided in Section 6.3 and Section 6.4. In accordance with Code
ss.401(k)(10), PFI Employees shall be given the right to elect to
receive a lump sum distribution of their entire Pre-Tax Accounts upon
the sale of PFI. A PFI Employee is considered a terminated employee as
of the sale with respect to his Pre-Tax Account and eligible for a
distribution from such account only if the PFI Employee elects to
receive such a lump sum distribution of his Pre-Tax Account (or is
subject to the mandatory cash-out rules). A PFI Employee who does not
elect to receive a lump sum distribution of his Pre-Tax Account and
3
<PAGE> 86
who is not subject to the mandatory cash-out rules shall be considered
a terminated employee eligible for a distribution of his Pre-Tax
Account as otherwise provided in Section 6.3 and Section 6.4 when he
separates from service with PFI.
"Notwithstanding the foregoing, the sale of PFI shall have no
effect for Plan purposes on the amount of benefits, terminated status
or form or timing of distributions for former employees of PFI who are
not active employees of PFI as of the sale of PFI."
6. This Amendment shall be effective as of the dates specified herein
and each provision of this Amendment shall apply only to an employee who has an
Hour of Service on or after the effective date of such provision of this
Amendment.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
4
<PAGE> 87
IN WITNESS WHEREOF, Denny's, Inc., for itself and its affiliates which
have adopted this Plan, has caused this Amendment to be properly executed on the
29th day of December, 1997.
DENNY'S, INC.
[Corporate Seal] ("Corporation")
By: /s/ Stephen Wood
--------------------------------------
Its: Senior Vice President
--------------------------------------
ATTEST:
By: /s/ J.S. Melton
-------------------------------
Its: Assistant Secretary
-------------------------------
5
<PAGE> 88
APPENDIX A
AFFILIATED EMPLOYERS WHO HAVE
ADOPTED THE DENNY'S, INC. 401(K) PLAN
AS OF JANUARY 1, 1997
El Pollo Loco, Inc.
<PAGE> 89
APPENDIX B
VESTING SCHEDULES
VESTING SCHEDULE IN GENERAL. The vested percentage of the Matching Account of
any Participant who has at least one Hour of Service with the Employer after
December 31, 1987 shall be determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
---------------- ---------- ----------
<S> <C> <C>
Less than 5 0% 100%
5 or more 100% 0%
</TABLE>
SPECIAL VESTING SCHEDULE FOR EMPLOYEES WHO WERE PARTICIPANTS ON OR BEFORE
DECEMBER 31, 1987. For each Employee who was a Participant on or before
December 31, 1987, the vested percentage of such Participant's Matching Account
shall be determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
---------------- ---------- ----------
<S> <C> <C>
Less than 1 0% 100%
1 but less than 2 10% 90%
2 but less than 3 20% 80%
3 but less than 4 30% 70%
4 but less than 5 40% 60%
5 or more 100% 0%
</TABLE>
TOP-HEAVY RULES. If the Plan becomes a Top-Heavy Plan, the vested percentage of
all amounts then existing in the Matching Account of any Participant who
completes at least one Hour of Service after the Plan becomes a Top-Heavy Plan
(including amounts attributable to Employer contributions and Forfeitures
allocated before the Plan became a Top-Heavy Plan) shall be determined in
accordance with the following "Top-Heavy" schedule (unless another vesting
schedule is permitted by Code ss.416 which fully vests in a less rapid manner,
in which event such other permissible vesting schedule hereby is instead
incorporated by reference):
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
---------------- ---------- ----------
<S> <C> <C>
Less than 1 0% 100%
1 but less than 2 10% 90%
2 but less than 3 20% 80%
3 but less than 4 40% 60%
4 but less than 5 60% 40%
5 or more 100% 0%
</TABLE>
7
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If the Plan ceases to be a Top-Heavy Plan, the Plan's vesting schedule
automatically will be changed to the non-Top-Heavy vesting schedule.
AMENDMENTS TO VESTING SCHEDULE. Notwithstanding any amendment (or automatic
change by virtue of the Plan becoming or ceasing to be a Top-Heavy Plan) of the
Plan's vesting schedule, the vested percentage of the amounts allocated to the
Matching Account of a Participant who had been covered under the prior
provisions of the Plan (such amounts being determined as of the later of (i) the
date the amendment or change is adopted or (ii) the date it becomes effective)
shall not be less than the vested percentage of such previously allocated
amounts which the Participant would have had, had the provisions of the Plan as
in effect immediately prior to the effective date continued without change. In
addition, in the event the vesting provisions of the Plan are amended (or are
changed automatically by virtue of the Plan becoming or ceasing to be a
Top-Heavy Plan), each Participant in the Plan who has had three (or five in the
case of a Participant who does not have at least one Hour of Service with the
Employer for Plan Years beginning after December 31, 1988) or more Years of
Service shall be permitted to make an election as provided under Section 10.2 of
this Plan.
8
<PAGE> 91
DENNY'S INC. 401(k) PLAN
TRUST AGREEMENT
RESTATED EFFECTIVE
AS OF
JULY 1, 1996
<PAGE> 92
DENNY'S INC. 401(k) PLAN
TRUST AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. RECITALS..............................................................................................1
ARTICLE II. DEFINITIONS..........................................................................................1
2.1 Definitions in Plan Incorporated................................................................1
2.2 Interpretation Consistent with Plan.............................................................1
ARTICLE III. ESTABLISHMENT AND IRREVOCABILITY OF THE TRUST.......................................................1
3.1 Trust for Exclusive Benefit of Employees........................................................1
3.2 Irrevocability..................................................................................2
ARTICLE IV. GENERAL DUTIES OF EMPLOYER AND TRUSTEE...............................................................2
4.1 General Duties of Employer......................................................................2
4.2 General Duties of Trustee.......................................................................2
ARTICLE V. INVESTMENT AND ADMINISTRATIVE POWERS..................................................................4
5.1 Investment of the Trust Fund....................................................................4
5.2 Investments in Pooled Fund......................................................................4
5.3 Collective Investment Subaccounts and Investments in Employer Stock.............................5
5.4 Trustee's Powers................................................................................5
5.5 Trustee's Authority.............................................................................7
ARTICLE VI. POWERS AND DUTIES OF THE TRUSTEE
IN THE DISBURSEMENT OF THE TRUST FUND....................................................................7
ARTICLE VI-A. GENERAL POWERS AND DUTIES OF INVESTMENT MANAGERS...................................................7
ARTICLE VII. TAXES, EXPENSES AND COMPENSATION OF THE TRUSTEE.....................................................8
ARTICLE VIII. ACCOUNTS OF THE TRUSTEE............................................................................9
8.1 Records, Reports and Accounts...................................................................9
8.2 Fiscal Year.....................................................................................9
ARTICLE IX. REMOVAL, RESIGNATION AND SUBSTITUTION OF TRUSTEE.....................................................9
9.1 Resignation, Removal, and Successor Trustee.....................................................9
(a) Resignation of Trustee.................................................................9
(b) Removal of Trustee.....................................................................9
(c) Successor Trustee.....................................................................10
9.2 Acts of Multiple Trustees......................................................................10
</TABLE>
<PAGE> 93
<TABLE>
<S> <C>
ARTICLE X. FOR THE PROTECTION OF THE TRUSTEE....................................................................10
10.1 Actions by the Board and the Employer..........................................................10
10.2 Certificate of Committee as to Certain Matters.................................................10
10.3 Actions by the Committee.......................................................................11
10.4 Notice of Appointments and Terminations........................................................11
10.5 Reliance on Counsel; Delegation of Duties......................................................11
10.6 Distributions..................................................................................11
10.7. Indemnification................................................................................11
ARTICLE XI. DURATION OF THE TRUST - RIGHT TO TERMINATE..........................................................12
11.1 Duration and Termination.......................................................................12
11.2 Liquidation Upon Termination...................................................................12
ARTICLE XII. RIGHT TO AMEND.....................................................................................12
ARTICLE XIII. MISCELLANEOUS.....................................................................................12
13.1 Merger or Consolidation of the Trustee.........................................................12
13.2 Necessary Parties..............................................................................12
13.3 Participants Bound by Accountings..............................................................12
13.4 Governing Law..................................................................................13
13.5 Acceptance of Trust............................................................................13
13.6 Execution in Counterparts......................................................................13
13.7 ERISA Bonding..................................................................................13
</TABLE>
ii
<PAGE> 94
DENNY'S INC. 401(k) PLAN
TRUST AGREEMENT
THIS TRUST AGREEMENT, amended and restated as of the 1st day of July,
1996 by and between DENNY'S INC. for itself, and its affiliates which have
adopted the related Plan funded under this Trust (collectively, "Employer") and,
effective as of July 1, 1996, AMERICAN EXPRESS TRUST COMPANY ("Trustee"), for
the purpose of continuing a profit plan Trust;
W I T N E S S E T H:
ARTICLE I. RECITALS
A. The Employer previously has adopted the Denny's Inc. 401(k) Plan
(formerly called the Denny's Inc. Profit Sharing Retirement Plan, hereafter
referred to as the "Plan") to encourage savings by eligible employees, which
Plan is incorporated by reference herein.
B. The Trustee has consented to serve as Trustee and to accept and
manage the funds, securities and other properties transferred to it ("Trust
Fund(s)") for the purposes and in accordance with the terms and conditions set
forth in this restated Trust Agreement and in the Plan.
C. The Employer intends that this Trust Agreement shall constitute a
part of the Plan, and meet the requirements of Sections 401(a), 401(k) and
501(a) of the Internal Revenue Code of 1986, as amended ("Code") and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
NOW, THEREFORE, the Employer and the Trustee hereby amend and restate
this Trust Agreement, effective as of July 1, 1996 in accordance with the
following terms and provisions:
ARTICLE II. DEFINITIONS
2.1 Definitions in Plan Incorporated: Definitions in the Plan shall
have the same meaning wherever used in this Trust Agreement, unless the context
clearly indicates otherwise.
2.2 Interpretation Consistent with Plan: The terms and provisions of
this Trust Agreement shall in all instances be interpreted to be consistent with
the Plan.
ARTICLE III. ESTABLISHMENT AND IRREVOCABILITY OF THE TRUST
3.1 Trust for Exclusive Benefit of Employees: The Trustee accepts the
Trust created hereby and covenants that it will hold all property which it may
receive hereunder, in trust, for the exclusive purpose of providing benefits to
Participants, Former Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan and the Trust Agreement upon the
terms and conditions herein stated.
<PAGE> 95
3.2 Irrevocability:
(a) All contributions made by the Employer shall be irrevocable,
except as provided in Section 3.2(b) below, and, prior to the satisfaction of
all liabilities of the Plan with respect to Participants and their
Beneficiaries, no part of the corpus of the Trust Fund nor any income therefrom
shall revert to the Employer or be used for or diverted to purposes other than
for the exclusive benefit of the Participants and their Beneficiaries, or to pay
administrative expenses of the Plan and Trust fund to the extent not paid by the
Employer, except as otherwise stated in Section 11.2. All assets of the Trust
Fund including investment income, shall be paid to the Trustee.
(b) Contributions shall be returned under the following
circumstances:
(i) In the case of a contribution which is made by a mistake
of fact, such contribution shall be returned to the Employer within one year
after payment.
(ii) If the contribution is conditioned upon qualification of
the Plan or any amendment thereto, or if the contribution is conditioned upon
the deductibility of such contribution under Code ss.404, and if the Plan or
amendment does not qualify, or if the deduction is disallowed, then the
contribution shall be returned to the Employer within one year after denial of
qualification or disallowance of the deduction.
ARTICLE IV. GENERAL DUTIES OF EMPLOYER AND TRUSTEE
4.1 General Duties of Employer: The Employer shall provide the Trustee
with a certified copy of the Plan and with copies of all amendments promptly
upon their adoption and shall from time to time certify to the Trustee the names
and specimen signatures of the members of the Committee, appointed in accordance
with the Plan, who have authority to control and manage the operation and
administration of the Plan. The Employer shall make its contributions as the
same may be appropriated by due corporate action, which contributions may be in
cash or in other property acceptable to the Trustee. The Employer shall keep
accurate books and records with respect to its Employees and their compensation.
4.2 General Duties of Trustee:
(a) The Trustee shall hold all property received by it hereunder,
which, together with the income and gains therefrom and additions thereto, shall
constitute the Trust Fund. The Trustee, subject to any direction by the
Committee or an Investment Manager, shall manage, invest and reinvest the Trust
Fund, collect the income thereof, and make payments therefrom, all as
hereinafter provided. The Trustee shall be responsible only for the property
actually received by it hereunder. It shall have no duty or authority to compute
any amount to be paid to it by the Employer or to bring any action or proceeding
to enforce the collection from the Employer of any contribution to the Trust
Fund.
(b) The Trustee (subject to any direction by the Committee and/or
Investment Manager), any Investment Manager, and the Committee (to the extent it
directs the Trustee regarding Trust assets) shall discharge their duties solely
in the interest of the Participants and Beneficiaries and
2
<PAGE> 96
(i) for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying reasonable expenses of
administering the Plan and the Trust;
(ii) to the extent required by ERISA, by diversifying
the investments of the Trust so as to minimize the risk of large losses, unless
under the circumstances it is clearly prudent not to do so and/or the Trustee's
investments are subject to Participant direction; and
(iii) in accordance with the documents and instruments
governing the Trust insofar as such documents and instruments are consistent
with the provisions of ERISA and the Code.
(c) The Committee and/or any Investment Manager may direct the
Trustee as to the investment funds to be established for investment of the Trust
Funds in accordance with the provisions of the Plan. If and to the extent such
direction is given regarding the underlying investments of any investment funds,
except for those investment funds that are mutual funds, the Committee and/or
the Investment Manager shall be responsible for determining the underlying
investments of the investment funds.
The Committee also may authorize the Trustee to accept direction
from Participants. In such case, the Trustee shall invest in the investment
funds in accordance with investment directions given by the Participants and
Beneficiaries for whose accounts such assets are held, to the extent so provided
for in the Plan. All such directions by the Participants or Beneficiaries to the
Trustee will be made by either telephonic or electronic communications or in
such other manner as is acceptable to the Trustee and authorized by the
Committee.
Where the Committee, a Participant, a Beneficiary or an Investment
Manager other than the Trustee has the power and authority to direct the
investment of assets of the Trust Fund, the Trustee does not have any duty to
question any direction given in accordance with the established procedures for
direction (which for Participant direction may be telephonically or by
electronic communication, but with respect to Committee direction must be in
writing), to review any securities or other property, or to make any suggestions
in connection therewith unless upon its face such direction constitutes a
prohibited transaction as defined by Code ss.4975(b) or involves a direction in
violation of established Committee procedures. The Trustee will promptly comply
with any direction given by the Committee, a Participant, a Beneficiary or
Investment Manager. The Trustee will not be liable for failing to invest any
assets of the Trust Fund under the management and control of the Committee, a
Participant, a Beneficiary or an Investment Manager in the absence of investment
directions regarding such assets.
(d) The Trustee will determine the current fair market value of
the assets and liabilities of the Trust Fund as of the end of each Valuation
Date.
The fair market value of assets of the Trust Fund will be
determined by the Trustee on the basis of such sources of information as it may
deem reliable, including (but not limited to) information reported in (i)
newspapers of general circulation; (ii) standard financial periodicals or
publications; (iii) statistical and valuation services; (iv) records of
securities exchanges; (v) reports of any Investment Manager, insurance company
or financial institution that has issued an investment contract to the Trustee
or brokerage firm deemed reliable by the Trustee; or (vi) any combination
3
<PAGE> 97
of the foregoing. If the Trustee is unable to value assets from sources, it
shall so inform the Committee and thereafter may rely on information from the
Employer, the Committee, appraisers or other sources, and will not be liable for
inaccurate valuation based in good faith.
The Trustee may, for administrative purposes, establish unit
values for one or more investment funds (or any portion thereof) and maintain
the accounts setting forth each Participant's interest in such investment fund
(or any portion thereof) in terms of such units, all in accordance with such
rules and procedures as the Committee shall deem to be fair, equitable, and
administratively practicable. In the event that unit accounting is thus
established for any investment fund, the value of a Participant's interest in
that investment fund (or any portion thereof) at any time shall be an amount
equal to the then value of a unit in such investment fund (or any portion
thereof) multiplied by the number of units then credited to the Participant.
ARTICLE V. INVESTMENT AND ADMINISTRATIVE POWERS
OF THE TRUSTEE
5.1 Investment of the Trust Fund: Except as otherwise provided in the
Plan, the net income and profits of the Trust Fund shall be accumulated, added
to the principal of the Trust Fund and invested and reinvested therewith as a
single fund. Subject to direction by the Investment Manager or of the Committee,
the Trustee is authorized to invest the Trust Fund in such mutual funds or other
investments including: investments offered by the Trustee or its affiliates,
bonds, notes, debentures, mortgages, equipment trust certificates, investment
trust certificates, preferred or common stocks, deposit administration
contracts, fixed and variable annuity contracts, and in such other property,
real or personal, within the United States, as the Trustee (or to the extent
they direct the Trustee, the Committee or any Investment Manager) may deem
advisable, subject to the provisions of Sections 404 and 406 of ERISA.
Furthermore, subject to Section 5.4 below, the Trustee may invest in qualifying
Employer securities and any investment presently maintained in Employer's
securities and/or real property may be continued, subject to the provisions of
ERISA. The Trustee may hold in cash such portion of the Trust Fund as shall be
reasonable under the circumstances, pending investment or payment of expenses or
distribution of benefits and, further, may make temporary investments of funds
as they are received and before such funds are credited to Participants'
accounts provided such funds are credited to Participants' accounts within a
reasonable time after receipt by the Trustee.
5.2 Investments in Pooled Fund: Notwithstanding any other provision of
this Trust Agreement, all or any part of the assets may be invested in any
collective investment trust (including a collective investment trust maintained
by a bank which is the Trustee) which then provides for the pooling of the
assets of plans described in Code ss.401(a) and exempt from taxation under Code
ss.501(a) (whether or not such collective investment trust provides for the
pooling of assets of other tax-exempt trusts), provided that such collective
investment trust is exempt from tax under the Code or regulations or rulings
issued by the Internal Revenue Service. The provisions of the document governing
any such collective investment trust, as amended from time to time, shall govern
any investment therein and are hereby made a part of this Trust Agreement.
4
<PAGE> 98
5.3 Collective Investment Subaccounts and Investments in Employer
Stock:
The Trustee shall invest Participants' Accounts in blended or other
investment subaccounts and/or in Employer Stock and/or other Employer Securities
in accordance with Article VII of the Plan which is incorporated and made a part
of this Trust Agreement.
5.4 Trustee's Powers: The Trustee shall have the following powers,
rights and duties in addition to those vested in it elsewhere in the Plan or by
law; provided that, the Trustee's exercise of all the powers described in this
Section 5.4, with the exception of those described in Sections (i) and (j),
shall be subject to direction by the Committee or any appointed Investment
Manager:
(a) Control Assets: To retain, manage, improve, repair, operate
and control any assets of the Trust Fund;
(b) Dispose of Assets: To sell, convey, transfer, exchange,
partition, grant options with respect to, lease for any term (even though such
terms extend beyond the duration of this Trust Fund or commence in the future),
mortgage, pledge or otherwise deal with or dispose of any asset of the Trust
Fund in such manner, for such consideration and upon such terms and conditions
as the Trustee, in its discretion, shall determine;
(c) Bank Deposits: To invest the Trust Fund in deposits (and in
certificates of deposit) which bear a reasonable interest rate in any bank,
including a bank which is acting as Trustee;
(d) Employ Agents: With prior notice to the Committee, and subject
to the Committee's approval if compensation is to be directly or indirectly from
Trust assets, to employ such agents and counsel as may be reasonably necessary
in collecting, managing, administering, investing, distributing and protecting
the Trust Fund or the assets thereof and to pay them reasonable compensation;
(e) Settle Claims: To settle, compromise or abandon all claims and
demands in favor of or against the Trust Fund;
(f) Borrow Money: To borrow money for the Trust Fund from anyone
(other than a "party in interest" as defined in Section 3(14) of ERISA), with or
without giving security from the Trust Fund;
(g) Deal with Corporations, Proxies and Voting: The Trustee shall
deliver or cause to be executed and delivered, to the Committee or the
designated Investment Manager, all notices, prospectuses, finance statements,
proxies and proxy soliciting materials relating to any mutual fund held
hereunder. Except for those Trust Fund assets for which American Express Trust
is the Investment Manager, the Trustee shall not vote any proxy or tender offer
election, participate in any voting trust, exercise any options or subscription
right or join in, dissent from or oppose any merger, reorganization,
consolidation, liquidation or sale with respect to any asset held hereunder
except in accordance with the timely written instructions of the Committee. If
no such written
5
<PAGE> 99
instructions are received, such proxies, elections and voting trust votes shall
not be voted; such options or subscription rights shall not be exercised; and
such mergers, reorganizations, consolidations, liquidations or sales shall not
be joined, dissented from or opposed;
The Committee may assign, in whole or in part, to the Participants
the right to vote proxies or exercise other rights of ownership with respect to
any American Express Financial Advisors, Inc. Mutual Funds or other Trust assets
allocable to Participants. To the extent the right to vote or other incidents of
ownership are vested in whole or in part in the Participants, in whole or in
part, the Trustee shall act in this regard only in accordance with the timely
written instructions received from the Participants. Solely for this purpose,
each Participant shall act as the Named Fiduciary, as defined in ERISA, in
providing direction to the Trustee. To the extent practicable, all unallocated
assets or investments held hereunder, and all assets or investments for which
Trustee has not received instruction, shall, solely for the purposes of this
section, be allocated to the account of each Participant who has issued
instructions to the Trustee, in the same proportion as such Participant's
allocated proportion of assets or investments bear to the aggregate of all like
assets or investments for which instructions have been issued by the Participant
to the Trustee;
(h) Organize Corporations: To organize and incorporate (or
participate in the organization or incorporation of) under the laws of any
state, a corporation for the purpose of acquiring and holding title to any
property which the Trustee is authorized to acquire for the Trust Fund and to
exercise with respect thereto any of the powers, rights and duties it has with
respect to other assets of the Trust Fund;
(i) Facility of Title: To cause title to the assets of the Trust
Fund to be held in the name of the Trustee, in the name of a nominee, in a
broker's street name, in bearer form so that title will pass by delivery, or in
any other manner authorized by applicable law in effect from time to time,
provided the records of the Trustee shall indicate the true ownership of such
asset;
(j) General Powers: To exercise any of the powers and rights of an
individual owner with respect to any property of the Trust Fund and to do all
other acts in its judgment necessary or desirable for the proper administration
of the Trust Fund although the power to do such acts is not specifically set
forth herein;
(k) Hold Cash: Subject to any Committee guidelines, to hold a
reasonable amount of cash uninvested and unproductive of income or deposit same
with any banking or savings institution, including its own banking department or
the banking department of an affiliate;
(l) Participant Loans: To invest or reinvest a portion of the
assets in individual Participant directed loans;
(m) Transfer of Assets: Subject to Committee and its own
procedures, to accept the transfer of assets by use of electronic or telephonic
communications or any other method approved by the Committee; and
(n) Pool Assets: To pool all or any of the assets of the Trust
Fund with assets belonging to any other employee benefit trust created by the
Employer or an affiliate of the Employer, and to commingle such assets and make
joint or common investment carry joint accounts
6
<PAGE> 100
on behalf of the Trust and such other trust or trusts, and allocate undivided
shares or interest in such investments or accounts or in any pooled assets to
the two or more trusts in respect to their respective interests in the pooled
investment.
5.5 Trustee's Authority: Third parties dealing with the Trustee shall
be under no obligation to see to the proper application of any money paid or
property delivered to the Trustee or to inquire into the Trustee's authority as
to any transaction. If any instrument executed by the Trustee bears its seal,
such seal shall constitute the Trustee's certificate that it is authorized as
the Trustee hereunder to execute such instrument and to proceed as may be
provided for therein.
ARTICLE VI. POWERS AND DUTIES OF THE TRUSTEE
IN THE DISBURSEMENT OF THE TRUST FUND
Except for reasonable administrative expenses, and other reasonable
fees and charges incurred in connection with the proper administration of the
Trust Fund as are otherwise provided for herein, the Trustee shall make such
distributions in cash or property from the Trust Fund only to such person or
persons, including a paying agent or agents designated by the Committee or the
Committee as paying agent, at such time or times, and in such amounts as are
directed in writing by the Committee. Any cash or property so paid or delivered
to any paying agent shall be held in trust until disbursed in accordance with
the Plan.
ARTICLE VI-A. GENERAL POWERS AND DUTIES OF INVESTMENT MANAGERS
(a) The Committee has the power and authority to appoint one or more
Investment Mangers as defined in and subject to the requirements of Section
3(38) of ERISA. Each Investment Manger so appointed will have the following
powers with respect to investments under their control: the power and authority
to vote any corporate stock either in person or by proxy for any purpose, except
to the extent that voting rights with respect to Employer Stock and other
Employer Securities are granted to Participants under Section 7.3(f) of the
Plan; to exercise any conversion privilege, subscription right, or any other
right or option given to the Trustee as the owner of any security owned by the
Trust Fund and to make any payments incidental hereto; to consent to, take any
action in connection with, and receive and retain any securities resulting from
any reorganization, consolidation, merger, readjustment of the financial
structure, sale, lease, or other disposition of the assets of any corporation or
other organization, the securities of which may be an asset of the Trust Fund
unless the Committee expressly reserved such power in its grant of authority to
the Investment Manager.
(b) If the Committee elects to delegate investment authority for the
assets of all or any portion of the Trust Fund to an Investment Manager pursuant
to subsection (a), the Committee will inform the Trustee in writing of such
designation and such written notice shall describe the portion of the Trust Fund
affected. Upon receipt of such notice, the Trustee will be obligated to follow
the investment directions of the Investment Manager with respect to the assets
of the specified portion of the Trust Fund until the Trustee receives written
notice that such Investment Manager has resigned or has been removed or replaced
by the Committee. The Trustee will not be a party to any agreement between the
Committee and an Investment Manager, and will have no responsibility respecting
the terms and conditions of such agreement. The Trustee shall be held harmless
by the
7
<PAGE> 101
Employer for any liability due to any direction, action or non-action caused by
the Investment Manager unless such liability is exacerbated by the action or
inaction of the Trustee.
(c) In exercising its authority to delegate investment authority to an
Investment Manager, the Committee shall have the duty, responsibility and power
to (i) examine and analyze the performance of prospective Investment Managers;
(ii) select an Investment Manager or Managers; (iii) determine the portion of
the Trust Fund that will be under the management of each Investment Manager;
(iv) issue appropriate instructions to the Trustee and to each Investment
Manager regarding the allocation of investment authority; (v) review the
performance of each Investment Manager at periodic intervals; and (vi) remove
any Investment Manager when the Committee deems such removal to be necessary or
appropriate.
(d) All directions by an Investment Manager to the Trustee concerning
the investment, reinvestment, sale or management of assets of the Trust Fund
will be made, in writing or in such other manner as is acceptable to the
Trustee, by such person or persons as the Investment Manager designates in
writing to the Trustee from time to time.
(e) With advance written notice to the Committee and subject to the
Committee's approval, an Investment Manager may engage any investment adviser or
investment counselor that it deems necessary or appropriate, and may provide for
directions concerning the investment and reinvestment of the assets of the Trust
Fund under its management and control to be made directly to the Trustee by such
adviser or counselor as its agent; provided however, prior to such direction by
the investment advisor or investment counselor, the Trustee and Committee
receive written notice from the Investment Manager that the directions of such
agent will be considered the directions of the Investment Manger and that the
Investment Manager will be responsible for the directions of such agent.
(f) If an Investment Manager resigns or is removed by the Committee,
the Committee will notify the Trustee in writing of such resignation or removal.
Upon actual receipt of such notice, the power and authority to invest and
reinvest the assets of the Trust Fund formerly under the control and management
of the Investment Manager will return to the Committee unless the Committee
indicates that a successor Investment Manager has been appointed with respect to
such assets.
(g) The fees and expenses of each Investment Manager, except to the
extent paid by the Employer shall be paid from the Trust Fund. The Trustee may
request a representation from the Employer that such payments are allowed under
ERISA.
ARTICLE VII. TAXES, EXPENSES AND COMPENSATION OF THE TRUSTEE
(a) All reasonable costs, charges and expenses incurred by the record
keeper in connection with the administration of the Plan, or incurred by the
Investment Manager in connection with the exercise of its duties under this
Trust Agreement or incurred by the Trustee in connection with its administration
of the Trust Fund, including fees for legal services rendered to the Trustee and
such reasonable compensation to the Trustee as may be agreed upon from time to
time between the Employer and the Trustee, shall be paid by the Employer, but if
not paid by the Employer, shall be paid from the Trust Fund; provided, however,
a Trustee who is an Employee shall not receive any compensation from the Trust
Fund for serving as Trustee (although such compensation may be paid
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<PAGE> 102
by the Employer), but may be reimbursed from the Trust Fund or by the Employer
for reasonable costs and expenses incurred by him in connection therewith, and
provided further that all federal and state transfer taxes and other expenses
which are payable by a Participant pursuant to the terms of the Plan shall be
borne by the Participant and the Trustee is authorized to deduct the amount of
such expenses from any amounts otherwise payable or creditable to him.
(b) In the event the Employer files or declares bankruptcy, the
Employer authorizes the Trustee to make payments from the Trust Fund for any and
all reasonable fees, expenses or other forms of compensation due under this
Section whether or not the fees, expenses or other compensation were earned but
not yet paid prior to or after the bankruptcy filing.
ARTICLE VIII. ACCOUNTS OF THE TRUSTEE
8.1 Records, Reports and Accounts: The Trustee shall keep accurate and
detailed accounts of all investments, receipts and disbursements and other
transactions hereunder, and all accounts, books and records relating thereto
shall be open to inspection by any person designated by the Committee, at all
reasonable times. Within sixty (60) days after the close of each fiscal year of
the Trust, the Trustee shall file a written report with the Employer and with
the Committee. The report shall set forth all investments, receipts and
disbursements, and other transactions effected by the Trustee during such year;
it shall contain an exact description of all securities purchased and sold, the
cost or net proceeds of sale (excluding accrued interest paid or received) and
show the securities, contracts, and investments held at the end of such year and
the cost of each item thereof as carried on the books of the Trustee. It shall
also indicate the fair market value of the investments of the Trust as of the
day of the report. The Trustee also shall provide the Committee, or the record
keeper designated by the Committee, with such other information in its
possession as may be necessary for the Committee and the Employer to conform
with the requirements of Section 103 of ERISA, and such other reasonable
information and reports as may be requested by the Committee or Employer from
time to time.
8.2 Fiscal Year: The fiscal year of the Trust shall be the calendar
year.
ARTICLE IX. REMOVAL, RESIGNATION AND SUBSTITUTION OF TRUSTEE
9.1 Resignation, Removal, and Successor Trustee:
(a) Resignation of Trustee: The Trustee may resign from the
Trust at any time by giving sixty (60) days prior written notice thereof to the
Employer, and such resignation shall take effect sixty (60) days from the date
of the delivery of such written notice, or upon the appointment of a successor
Trustee pursuant to Section 9.1(c), whichever shall first occur or at such
earlier date as consented to by both Denny's Inc. and the Trustee. Within sixty
(60) days of such resignation becoming effective, the Trustee shall render to
the Employer an account of the administration of the Plan during the period
following that covered by the last annual accounting, and the Trustee shall
perform all acts necessary to transfer and deliver the assets of the Trust and
any and all information in connection therewith or the administration thereof to
its successor Trustee.
(b) Removal of Trustee: Denny's Inc. may remove the Trustee at any
time by giving sixty (60) days prior written notice thereof to the Trustee, and
such removal shall take effect
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sixty (60) days from the date of delivery of such written notice, or at such
earlier date as consented to by both Denny's Inc. and the Trustee. In the event
of such removal, the Trustee shall be under the same duties to account and to
transfer and deliver the assets of the Trust and any and all information in
connection therewith or the administration thereof to its successor Trustee as
provided hereinabove in the event of the Trustee's resignation.
(c) Successor Trustee: In the event of a vacancy in the
trusteeship of the Plan and Trust occurring at any time, the Employer shall
designate and appoint a qualified successor Trustee of the Plan. Any successor
Trustee shall have all the rights and powers and all of the duties and
responsibilities herein conferred upon the original Trustee. If a successor
Trustee is not appointed within sixty (60) days after the Trustee gives notice
of its resignation pursuant to Section 9.1(a) above, the Trustee may apply to
any court of competent jurisdiction for appointment of a successor.
The Trustee's powers, duties, rights and responsibilities under
this Trust Agreement will continue, with respect to those Trust Fund assets held
by the Trustee, until the date on which the transfer of the Trust Fund assets
and delivery of the related documents to the successor trustee is completed. The
successor trustee will neither be liable or responsible for any act or omission
to act with respect to the operation or administration of the Trust Fund under
this Trust Agreement prior to the date it receives any Trust Fund assets and
related documents, nor be under any duty or obligation to audit or otherwise
inquire into or take any action concerning the acts or omissions of the Trustee
or any predecessor trustee. The successor trustee shall be held harmless by the
Employer for any and all acts or omissions of the predecessor trustee.
9.2 Acts of Multiple Trustees: If the Trustee consists of more than
one individual or entity, all acts and decisions of the Trustee shall be by vote
of the majority of them, provided, that the signature on any document (other
than an amendment to the Plan or Trust Agreement) of any one such individual or
entity constituting the Trustee shall be sufficient evidence to any party that
such document is valid and in accordance with the terms of this Plan and Trust
Agreement.
ARTICLE X. FOR THE PROTECTION OF THE TRUSTEE
10.1 Actions by the Board and the Employer: Any action by the board of
directors of an Employer pursuant to any of the provisions of this Trust
Agreement may be evidenced by a resolution of such board of directors certified
over the signature of the Secretary or an Assistant Secretary of the Employer
and under its corporate seal, and the Trustee shall be protected to the extent
the law permits in acting in accordance with any such resolution so certified.
Any action of the Employer pursuant to any of the provisions of this Trust
Agreement may be evidenced by a letter or other communication signed by any
officer of the Employer.
10.2 Certificate of Committee as to Certain Matters: Without limiting
or restricting any other provisions of this Trust Agreement relating to the
right of the Trustee to rely upon any instruments furnished to it in any
specified form, it is hereby provided that the Trustee shall be fully protected
in relying upon a certificate of the Committee as to whether, at any time, all
liabilities with respect to the Participants of the Plan or their Beneficiaries
have been satisfied, and also as to all other matters of any nature whatsoever
which the Trustee may deem pertinent to the discharge of its duties hereunder.
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10.3 Actions by the Committee: All requests, directions, orders,
requisitions and instructions of the Committee to the Trustee shall be in
writing. They shall be signed either by the Secretary of the Committee or by any
one member of the Committee authorized by the majority to sign. The Trustee
shall act in accordance with and shall be protected to the extent the law
permits in acting in accordance with and relying upon, such requests,
directions, orders, requisitions, instructions and any other communications,
unless upon their face such communications constitute prohibited transactions as
defined by Code ss. 4975(b). The Committee shall have the discretionary
authority to interpret and construe the provisions of the Plan and Trust
Agreement as necessary to determine eligibility for benefits and otherwise to
construe disputed, doubtful or uncertain terms.
10.4 Notice of Appointments and Terminations: The Employer shall
furnish the Trustee from time to time with certified copies of the resolutions
of its Board of Directors evidencing the appointment and termination of office
of any members of the Committee and the appointment of successors thereto. The
Trustee shall be entitled to assume that the membership of the Committee is as
stated in any such certified copy of resolutions of the Board of Directors
delivered to it, and the Trustee shall not be charged with notice of any change
in the membership of a Committee until it shall have received a certified copy
of a resolution of the Board of Directors evidencing such change. If a Committee
is not appointed, the Plan Administrator shall be the Employer.
10.5 Reliance on Counsel; Delegation of Duties: The Trustee may from
time to time consult with counsel, who may be counsel to the Employer, and shall
be protected to the extent the law permits in acting upon such advice of counsel
as respects legal questions. The Trustee may also from time to time employ
agents and expert assistants and delegate to them such ministerial duties as it
sees fit, provided that such delegation is permitted by the board of directors.
In the event that the Trustee does delegate such ministerial duties, it shall
periodically review the performance of the person(s) to whom these duties have
been delegated.
10.6 Distributions: The Trustee may make any distribution or payment to
be made by it hereunder by mailing its check for the specified amount, or
delivering the specified property, to the person to whom such distribution or
payment is to be made, at such address as may have been last furnished to the
Trustee, or if no such address shall have been so furnished, to such person in
care of the Employer or the Committee, or (if so directed by the Committee) by
crediting the account of such person or by transferring funds to such person's
account by bank wire or transfer.
10.7 Indemnification: The Employer shall indemnify and save harmless
the Trustee from and against any and all claims, losses, damages, expenses
(including reasonable attorney fees) and liability to which the Trustee may be
subject by reason of any act done or omitted to be done, except where the same
is due to the negligence or willful misconduct of the Trustee.
The Employer recognizes that a burden of litigation may be imposed upon
the Trustee as a result of some transaction for which it has no responsibility
or which it has no control under this Trust Agreement. Therefore, the Employer
agrees to indemnify and hold harmless and, if requested, defend the Trustee (and
any employee of the Trustee) from any expenses (including counsel fees,
liabilities, claims, damages, actions, suits or other charges) incurred by the
Trustee (or its employees) in defending against any such litigation provided
that the Trustee uses the same counsel as the Employer (or counsel approved by
the Employer) and the Trustee is not adverse to the Employer.
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ARTICLE XI. DURATION OF THE TRUST - RIGHT TO TERMINATE
11.1 Duration and Termination: This Trust Agreement shall continue for
such time as may be necessary to accomplish the purpose for which it was created
but, subject to Title IV of ERISA, may be terminated at any time by Denny's Inc.
by action of its Board of Directors. Notice of such termination shall be given
to the Trustee by an instrument in writing executed by Denny's Inc. and
acknowledged in the same form as this Trust Agreement, together with a certified
copy of the resolutions of the Board of Directors of Denny's Inc. authorizing
such termination. Denny's Inc. shall send a copy of such notice to each member
of the Committee.
11.2 Liquidation Upon Termination: Upon termination of the Trust
Agreement, provided that the Trustee has not received instructions to the
contrary from the Committee, the Trustee shall liquidate the Trust Agreement
and, after paying the reasonable expenses of the Trust Agreement, including
expenses involved in the termination, distribute the balance thereof according
to written directions from the Committee.
ARTICLE XII. RIGHT TO AMEND
The Denny's Inc. Board of Directors may at any time alter, modify or
amend, in whole or in part, any or all of the provisions of this Trust
Agreement, provided that no such alteration, modification or amendment may
affect the rights, duties or responsibilities of the Trustee without its consent
and, provided, further, that no such alteration, modification or amendment may
permit any part of the corpus or income of the Trust Fund to be used for or
diverted for purposes other than for the exclusive benefit of the Participants
under the Plan and their Beneficiaries at any time prior to the satisfaction of
all liabilities under the Plan with respect to such persons.
ARTICLE XIII. MISCELLANEOUS
13.1 Merger or Consolidation of the Trustee: Any corporation into which
the Trustee may be merged, or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee may
be a party, or any corporation succeeding to the business of the Trustee or to
which substantially all of the assets of the Trustee may be transferred, shall
be the successor of the Trustee hereunder without the execution or filing of any
paper and without any further action on the part of the parties hereto, with
like effect as if such successor Trustee had originally been named Trustee
herein.
13.2 Necessary Parties: In any application to the courts for an
interpretation of this Trust Agreement or for an accounting by the Trustee
hereunder, only the Trustee and the Employer shall be necessary parties, and no
Participant or Former Participant or other person shall be entitled to any
notice or service of process. Any final judgment entered in such an action or
proceeding shall be conclusive upon all persons claiming under the Plan or this
Trust Agreement.
13.3 Participants Bound by Accountings: No Participant under the Plan
shall have any right to compel an accounting, judicial or otherwise, by the
Trustee, and all such persons shall be bound by all accountings by the Trustee
to the Employer and the Committee as herein provided.
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13.4 Governing Law: This Trust Agreement and the Trust hereby created
shall be deemed to be a Minnesota Trust and shall in all respects be construed
and regulated by the laws of the State of Minnesota, except where such laws are
superseded by the Code or ERISA.
13.5 Acceptance of Trust: The Trustee hereby accepts this Trust and
agrees to hold, subject to all the terms and conditions of this Trust, all the
property now or hereafter constituting the Trust Fund.
13.6 Execution in Counterparts: This Trust Agreement has been executed
in counterparts, each of which shall be deemed to be the original even though
the others are not produced.
13.7 ERISA Bonding: The Employer hereby warrants and represents that
the Employer has obtained a fidelity bond with respect to Employer's own
employees that complies with the bonding requirements of Section 412 of ERISA.
Trustee and any other Investment Manager or record keeper handling Plan assets
shall be responsible for complying with ERISA's bonding requirements with
respect to their employees.
[EXECUTIONS APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Employer and Trustee have caused this Trust
Agreement to be executed on the 28th day of June, 1996.
DENNY'S INC.
[CORPORATE SEAL]
By: /s/ Stephen Wood
--------------------------------
Its: Senior Vice President
--------------------------------
ATTEST:
/s/ J.S. Melton
- ----------------------------------
Secretary
TRUSTEE:
AMERICAN EXPRESS TRUST COMPANY
[CORPORATE SEAL]
By: /s/ Illegible Signature
--------------------------------
Its: Vice President
-------------------------------
ATTEST:
- ----------------------------------
Secretary or Assistant Secretary
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Advantica Restaurant Group, Inc. (formerly Flagstar Companies, Inc.) on Form S-8
of our report dated February 20, 1998, appearing in the Annual Report on Form
10-K of Advantica Restaurant Group, Inc., for the year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
June 30, 1998
