<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 2, 1999
REGISTRATION NO. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SAFEWAY INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 5918 Stoneridge Mall Road 94-3019135
(State or other jurisdiction of Pleasanton, California 94588 (I.R.S. Employer
incorporation or organization) (Address of principal executive offices) (Zip) Identification Number)
</TABLE>
--------------------
RANDALLS FOOD MARKETS, INC.
ESOP/401(K) SAVINGS PLAN
DOMINICK'S FINER FOODS, INC.
401(K) RETIREMENT PLAN
FOR UNION EMPLOYEES, AS AMENDED
DOMINICK'S FINER FOODS, INC.
401(K) RETIREMENT PLAN
FOR NON-UNION EMPLOYEES, AS AMENDED
(Full titles of the plans)
--------------------
Michael C. Ross, Esq.
Senior Vice President, Secretary And General Counsel
SAFEWAY INC.
5918 Stoneridge Mall Road
Pleasanton, California 94588
(925) 467-3000
(Name, address and telephone number, including area code, of agent for service)
Copies to:
Scott R. Haber, Esq.
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111
(415) 391-0600
--------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
=================================================================================================
Proposed
Proposed Maximum
Title of Amount Maximum Aggregate Amount of
Securities to to be Offering Price Offering Registration
be Registered (1) Registered Per Share Price (2) Fee
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.01 par value
- -------------------------------------------------------------------------------------------------
Randalls Food 2,500,000 (2) $93,225,000 $24,611.40
Markets, Inc.
ESOP/401(k) Savings
Plan
- -------------------------------------------------------------------------------------------------
Dominick's Finer Foods, 1,000,000 (2) $37,290,000 $9,844.56
- -------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 2
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Inc. 401(K)
Retirement Plan for
Union Employees, as
amended
- -------------------------------------------------------------------------------------------------
Dominick's Finer 500,000 (2) $18,645,000 $4,922.28
Foods, Inc. 401(K)
Retirement Plan for
Non-Union Employees,
as amended
=================================================================================================
Total 4,000,000 (2) $149,160,000 $39,378.24
=================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c), this registration statement also
covers an indeterminate amount of interests to be offered or sold
pursuant to the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan,
the Dominick's Finer Foods, Inc. 401(K) Retirement Plan for Union
Employees, as amended, and the Dominick's Finer Foods, Inc. 401(K)
Retirement Plan for Non-Union Employees, as amended, described herein.
(2) Estimated for the purpose of calculating the registration fee pursuant
to Rule 457(c) for the shares registered hereunder (the average ($37.29)
of the high ($37.94) and low ($36.63) prices for the Company's Common
Stock quoted on the New York Stock Exchange on November 23, 1999).
2
<PAGE> 3
I.
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information called for in Part I of Form S-8 is not being
filed with or included in this Form S-8 (by incorporation by reference or
otherwise) in accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission").
II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
We incorporate by reference the following documents we or the
Randalls Food Markets, Inc. ESOP/401(k) Savings Plan, the Dominick's Finer
Foods, Inc. 401(K) Retirement Plan for Union Employees, as amended, and the
Dominick's Finer Foods, Inc. 401(K) Retirement Plan for Non-Union Employees, as
amended (collectively, the "Plans") filed with the Commission pursuant to
Section 13 of the Exchange Act (Commission file number 1-41):
- Safeway's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999;
- Safeway's Quarterly Report on Form 10-Q for the period
ended March 27, 1999;
- Safeway's Quarterly Report on Form 10-Q for the period
ended June 19, 1999;
- Safeway's Quarterly Report on Form 10-Q for the period
ended September 11, 1999;
- Safeway's Current Reports on Form 8-K dated February 11,
1999, February 23, 1999, April 23, 1999, August 4, 1999
and September 14, 1999;
- Description of our common stock contained in our
registration statement on Form 8-A filed with the
Commission on February 20, 1990, including the amendment
on Form 8 dated March 26, 1990; and
- All documents filed by us or the Plans with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered
have been sold or which deregisters all securities then
remaining unsold.
Information that we or the Plans file later with the Commission
will automatically update and supersede this information.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law, the
Company's Restated Certificate of Incorporation provides that a director of the
Company will not be personally liable to the Company or its
3
<PAGE> 4
stockholders for monetary damages for any breach of fiduciary duty as a
director, except for liability (i) for breach of the duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law (governing distributions to
stockholders), or (iv) for any transaction for which a director derives an
improper personal benefit. In addition, Section 145 of the Delaware General
Corporation law and Article III, Section 13 of the Company's bylaws, under
certain circumstances, provide for the indemnification of the Company's
officers, directors, employees and agents against liabilities which they may
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but that description is
qualified in its entirety by reference to Article III, Section 13 of the
Company's bylaws.
In general, any officer, director, employee or agent will be
indemnified against expenses, including attorney's fees, fines, settlements or
judgments, which were actually and reasonably incurred, in connection with a
legal proceeding, other than one brought by or on behalf of the Company, to
which he was a party as a result of such relationship, if he acted in good
faith, and in the manner he believed to be in or not opposed to the Company's
best interest and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. If the action is brought
by or on behalf of the Company, the person to be indemnified must have acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
Company's best interest, but no indemnification will be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Company unless and only to the extent that the Court of Chancery
of Delaware, or the court in which such action was brought, determines upon
application that, despite adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expense which such Court of Chancery or such other court
shall deem proper.
Any indemnification under the previous paragraphs (unless ordered
by a court) will be made by the Company only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper under the circumstances because he has met the applicable
standard of conduct set forth above. Such determination will be made (i) by the
Company's board of directors by a majority vote of a quorum of disinterested
directors who were not parties to such actions, (ii) if such quorum is not
obtainable or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders. To the extent that a director, officer, employee or agent of the
Company is successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in the previous paragraph, he will be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
Expenses incurred by an officer or director in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it is ultimately determined that he is not entitled to be indemnified by the
Company as authorized by the Company's bylaws. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Company's board of directors deems appropriate.
The indemnification and advancement of expenses provided by, or
granted pursuant to, Section 13 of the Company's bylaws is not deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. If a claim for
indemnification or payment of expenses under Section 13 of the Company's bylaws
is not paid in full within ninety (90) days after a written claim therefor has
been received by the Company, the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part, shall be entitled
to be paid the expense of prosecuting such claim. In any such action, the
Company has the burden of proving that the claimant was not entitled to the
requested indemnification or payment of expenses under applicable law.
The Company's board of directors may authorize, by a vote of a
majority of a quorum of the Company's board of directors, the Company to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation partnership, joint venture, trust or other enterprise against
4
<PAGE> 5
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the provisions of Section 13
of the Company's bylaws. The Company's board of directors may authorize the
Company to enter into a contract with any person who is or was a director,
officer, employee or agent of the Company or is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise providing for
indemnification rights equivalent to or, if the Company's board of directors so
determines, greater than those provided for in Section 13 of the Company's
bylaws.
The Company has also purchased insurance for its directors and
officers for certain losses arising from claims or charges made against them in
their capacities as directors and officers of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<S> <C>
4.1 Randalls Food Markets, Inc. ESOP/401(k) Savings Plan (amended and
restated as of April 1, 1997).
4.2 First Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.3 Second Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.4 Third Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.5 Fourth Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.6 Dominick's Finer Foods, Inc. 401(K) Retirement Plan for Union
Employees, as amended.
4.7 Dominick's Finer Foods, Inc. 401(K) Retirement Plan for Non-Union
Employees, as amended.
5.1 Randalls Plan Internal Revenue Service Determination letter (see
Item 9(d)).
5.2 Dominick's Union Plan Internal Revenue Service Determination letter
(see Item 9(d)).
5.3 Dominick's Non-Union Plan Internal Revenue Service Determination
letter (see Item 9(d)).
23.1 Consent of Deloitte & Touche LLP.
24 Power of Attorney. (Incorporated by reference in the signature page
to the Registration Statement).
</TABLE>
- ---------------
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate,
5
<PAGE> 6
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
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 Commission such indemnification is
against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
(d) Pursuant to Item 8(b) of Form S-8, in lieu of an Internal Revenue Service
("IRS") determination letter that the Plans are qualified under Section 401 of
the Internal Revenue Code, the undersigned registrant hereby undertakes that it
has submitted the Plans and the amendments thereto, and will submit any future
amendments, to the IRS in a timely manner and will make all changes required by
the IRS to qualify the Plans.
6
<PAGE> 7
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 Pleasanton, State of California on this 2nd day of
December 1999.
SAFEWAY INC.
By: /s/ MICHAEL C. ROSS
------------------------------------
Michael C. Ross
Senior Vice President, Secretary and
General Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below does hereby constitute and appoint Michael C. Ross with
full power of substitution and full power to act without the other, such
person's true and lawful attorney-in-fact and agent to act for such person in
such person's name, place and stead, in any and all capacities, to sign any or
all amendments (including post-effective amendments) to this Registration
Statement on Form S-8, 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, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully,
to all intents and purposes, as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, 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 indicated on December 2, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Steven A. Burd Chairman, President and Chief Executive Officer
- ------------------------------------------ (Principal Executive Officer)
Steven A. Burd
/s/ David G. Weed Executive Vice President, Chief Financial Officer
- ------------------------------------------ (Principal Financial Officer and Principal
David G. Weed Accounting Officer)
/s/ James H. Greene, Jr. Director
- ------------------------------------------
James H. Greene, Jr.
/s/ Paul Hazen Director
- ------------------------------------------
Paul Hazen
/s/ Henry R. Kravis Director
- ------------------------------------------
Henry R. Kravis
/s/ Robert I. MacDonnell Director
- ------------------------------------------
Robert I. MacDonnell
/s/ Peter A. Magowan Director
- ------------------------------------------
Peter A. Magowan
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
/s/ George R. Roberts Director
- ------------------------------------------
George R. Roberts
/s/ Rebecca A. Stirn Director
- ------------------------------------------
Rebecca A. Stirn
/s/ William Y. Tauscher Director
- ------------------------------------------
William Y. Tauscher
</TABLE>
<PAGE> 9
Pursuant to the requirements of the Securities and Exchange Act
of 1933, as amended, the Benefit Plans Committee has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Houston, Texas on December 1, 1999.
RANDALLS FOOD MARKETS, INC.
ESOP/401(K) SAVINGS PLAN
By: /s/ Janice R. Schilmoeller
---------------------------------
Name: Janice R. Schilmoeller
Title: Vice President of Risk
Management
<PAGE> 10
Pursuant to the requirements of the Securities and Exchange Act
of 1933, as amended, the Benefit Plans Committee has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Hartford, Connecticut on December 1, 1999.
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT
PLAN FOR UNION EMPLOYEES, AS AMENDED
By: /s/ Dewayne Howard
---------------------------------------
Name: Dewayne Howard
Title: Director of Human Resources of
Dominick's Finer Foods, Inc.
<PAGE> 11
Pursuant to the requirements of the Securities and Exchange Act
of 1933, as amended, the Benefit Plans Committee has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Hartford, Connecticut on December 1, 1999.
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT
PLAN FOR NON-UNION EMPLOYEES, AS AMENDED
By: /s/ Dewayne Howard
---------------------------------------
Name: Dewayne Howard
Title: Director of Human Resources of
Dominick's Finer Foods, Inc.
<PAGE> 12
INDEX TO EXHIBITS
Exhibit
<TABLE>
<S> <C>
4.1 Randalls Food Markets, Inc. ESOP/401(k) Savings Plan (amended and
restated as of April 1, 1997).
4.2 First Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.3 Second Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.4 Third Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.5 Fourth Amendment to the Randalls Food Markets, Inc. ESOP/401(k)
Savings Plan.
4.6 Dominick's Finer Foods, Inc. 401(K) Retirement Plan for Union
Employees, as amended.
4.7 Dominick's Finer Foods, Inc. 401(K) Retirement Plan for Non-Union
Employees, as amended.
5.1 Randalls Plan Internal Revenue Service Determination letter (see
Item 9(d)).
5.2 Dominick's Union Plan Internal Revenue Service Determination letter
(see Item 9(d)).
5.3 Dominick's Non-Union Plan Internal Revenue Service Determination
letter (see Item 9(d)).
23.1 Consent of Deloitte & Touche LLP.
24 Power of Attorney. (Incorporated by reference in the signature page
to the Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN
(AMENDED AND RESTATED AS OF APRIL 1, 1997)
<PAGE> 2
RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN
(Amended and Restated as of April 1, 1997)
WITNESSETH:
WHEREAS, effective June 24, 1986, the Employer established the Randall's
Food Markets, Inc. Salaried Employee Stock Ownership Plan and its related trust
(collectively the "Salaried ESOP") so as to enable its eligible salaried
employees to acquire a proprietary interest in capital stock of the Employer;
and
WHEREAS, effective June 24, 1986, the Employer established the Randall's
Food Markets, Inc. Hourly Paid Employee Stock Ownership Plan and its related
trust (collectively the "Hourly ESOP") so as to enable its eligible hourly paid
employees to acquire a proprietary interest in capital stock of the Employer;
and
WHEREAS, effective January 1, 1994, the Employer merged the Hourly ESOP
into the Salaried ESOP, and the surviving plan was renamed the Randalls Food
Markets, Inc. Employee Stock Ownership Plan (the "Combined ESOP"); and
WHEREAS, in Section 9.1 of the Combined ESOP, the Employer reserved the
right to amend the Combined ESOP at any time; and
WHEREAS, the Employer desires to amend the Combined ESOP to (i) freeze
the ESOP portion of the Combined ESOP, and (ii) add a cash or deferred
arrangement feature under Code Section 401(k).
NOW, THEREFORE, effective April 1, 1997, subject to a favorable
determination from the Internal Revenue Service with respect to the
qualification hereof, the Employer hereby renames the Combined ESOP the Randalls
Food Markets, Inc. ESOP/401(k) Savings Plan (the "Plan") and amends and restates
the Plan. The terms of this amendment and restatement shall apply only to (i)
those individuals who are Former Participants with an Account balance on April
1, 1997, but only with respect to the investment and distribution of such
Accounts, and (ii) those individuals who are Participants on or after April 1,
1997. The amended and restated Plan shall read as follows:
<PAGE> 3
ARTICLE 1.
DEFINITIONS
1.1 "Account" means, with respect to each Participant, the value of
all accounts maintained on behalf of a Participant.
1.2 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.3 "Administrator" means the "Randalls Employee Benefits Committee"
designated by the Employer pursuant to Section 2.4 to administer the Plan on
behalf of the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation
which is a member of a controlled group of corporations (as defined in Code
Section 414(b)) which include the Employer; any trade or business (whether or
not incorporated) which is under common control (as defined in Code Section
414(c)) with the Employer; any organization (whether or not incorporated) which
is a member of an affiliated service group (as defined in Code Section 414(m))
which includes the Employer; and any other entity required to be aggregated with
the Employer pursuant to Regulations under Code Section 414(o).
1.5 "Anniversary Date" means the last day of the Plan Year.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
7.2 and 7.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended.
1.8 "Company Stock" shall mean common stock issued by the Employer
(or by a corporation which is a member of the controlled group of corporations
in which the Employer is a member) which is readily tradeable on an established
securities market. If there is no common stock which meets the foregoing
requirement, the term "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the same controlled group) having a
combination of voting power and dividend rights equal to or in excess of: (A)
that class of common stock of the Employer (or of any other such corporation)
having the greatest voting power, and (B) that class of stock of the Employer
(or of any other such corporation) having the greatest dividend rights.
Noncallable preferred stock shall be deemed to be "Company Stock" if such stock
is convertible at any time into stock which constitutes "Company Stock"
hereunder and if such conversion is at a conversion price which (as of the date
of the acquisition by the Trust) is reasonable.
1.9 "Company Stock Account" shall mean the account of a Participant
which is or has been credited with the shares of Company Stock purchased and
paid for by the Trust Fund or contributed to the Trust Fund, or any funds
received in exchange for tendered shares of Company Stock in accordance with
Section 8.3. Effective April 1, 1997, the balance in each Participant's Company
Stock Account shall be fully Vested at all times and shall not be subject to
forfeiture for any reason.
2
<PAGE> 4
1.10 "Compensation" shall mean a Participant's wages for the Plan
Year within the meaning of Code Section 3401(a) (for the purposes of income tax
withholding at the source) but determined without regard to any rules that limit
the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)). For purposes of this Section, the
determination of Compensation shall be made by excluding bonuses and including
amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that are treated as Employer
contributions.
Compensation shall be recognized as of an Employee's effective date of
participation pursuant to Section 3.3.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the "OBRA `93 Annual Compensation Limit." The "OBRA `93 Annual Compensation
Limit" is $150,000, as adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined ("Determination Period") beginning in such
calendar year. If a Determination Period consists of fewer than 12 months, the
"OBRA `93 Annual Compensation Limit" will be multiplied by a fraction, the
numerator of which is the number of months in the Determination Period, and the
denominator of which is 12.
Any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean the "OBRA `93 Annual Compensation Limit" set forth in this
Section.
If Compensation for any prior Determination Period is taken into account
in determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior Determination Period is subject to the "OBRA `93
Annual Compensation Limit" in effect for that prior Determination Period. For
this purpose, for Determination Periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the "OBRA `93 Annual
Compensation Limit" is $150,000.
1.11 "Contract" or "Policy" shall mean a life insurance policy or
annuity contract (group or individual) issued by the insurer as elected.
1.12 "Current Obligations" shall mean Trust obligations arising from
extension of credit to the Trust and payable in cash within (1) year from the
date an Employer contribution is due.
1.13 "Deferred Compensation" with respect to any Participant means
that portion of such Participant's total Compensation which has been contributed
to the Plan in accordance with the Participant's deferral election pursuant to
Section 4.2, excluding any such amounts distributed as excess "annual additions"
pursuant to Section 4.11(a).
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1.14 "Elective Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Elective Contributions. A separate
accounting shall be maintained with respect to that portion of the Elective
Account attributable to Elective Contributions pursuant to Section 4.2 and any
Qualified Non-Elective Contributions.
1.15 "Elective Contribution" means the contributions to the Plan that
are made pursuant to the Participant's deferral election provided in Section
4.2.
1.16 "Eligible Employee" means any Employee who has satisfied the
provisions of Section 3.1.
1.17 "Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. Employees
whose employment is governed by the terms of a collective bargaining agreement
between Employee representatives (within the meaning of Code Section 7701(a)(46)
and the Employer under which retirement benefits were the subject of good faith
bargaining between the parties, unless such agreement expressly provides for
such coverage in this Plan, will not be eligible to participate in the Plan.
The term "Employee" shall also include any leased employee which,
effective January 1, 1997, means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any leasing
organization has performed services for the recipient on a substantially
full-time basis for a period of at least one year, and such services are
performed under the primary direction or control of the Employer. Contributions
or benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient Employer shall be treated
as provided by the Employer.
A leased employee shall not be considered an Employee of the Employer
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a nonintegrated employer contribution rate of at least 10 percent of
compensation (as defined in Code Section 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under Code Section 125, 402(e)(3), 402(h) or
403(b)), (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the Employer's
nonhighly compensated workforce.
Leased employees will not be eligible to participate in the Plan.
1.18 "Employee After-Tax Account" shall mean the account which is
credited with the shares of Company Stock and Investment Funds resulting from
the Participant's Employee contributions made prior to April 1, 1997. Any
balance in the Employee After-Tax Account shall be fully Vested at all times and
shall not be subject to Forfeiture for any reason. Prior to April 1, 1997, the
Employee After-Tax Account was referred to as the "ESOP Contribution Account."
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1.19 "Employer" means Randalls Food Markets, Inc., a Texas
corporation and any Participating Employer (as defined in Section 11.1) which
shall adopt this Plan; any successor which shall maintain this Plan; and any
predecessor which has maintained this Plan.
1.20 "ESOP" means an employee stock ownership plan that meets the
requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.
1.21 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Matching Contributions and any
qualified non-elective contributions or elective deferrals taken into account
pursuant to Section 4.8(c) on behalf of Highly Compensated Participants for such
Plan Year, over the maximum amount of such contributions permitted under the
limitations of Section 4.8(a).
1.22 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such contributions
permitted under Section 4.6(a). Excess Contributions shall be treated as "annual
additions" pursuant to Section 4.10(b).
1.23 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 4.2(g) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section 4.10(b) when contributed to the Plan
unless distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year. However, Excess
Deferred Compensation of Non-Highly Compensated Participants is not taken into
account for purposes of Section 4.6(a) to the extent such Excess Deferred
Compensation occurs pursuant to Section 4.2(f).
1.24 "Exempt Loan" shall mean a loan made to the Plan by a
disqualified person or a loan to the Plan which is guaranteed by a disqualified
person and which satisfies the requirements of Section 2550.408b-3 of the
Department of Labor Regulations and Section 54.4975-7(b) of the Treasury
Regulations and Section 5.3 hereof.
1.25 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.26 "Fiscal Year" means the Employer's accounting year of not less
than fifty-two (52) nor more than fifty-three (53) weeks ending on the last
Saturday in June.
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1.27 "Forfeiture" means that portion of a Participant's Account that
is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
1.28 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.29 "414(s) Compensation" means, with respect to any Participant,
such Participant's "415 Compensation" paid during a Plan Year. The amount of
"414(s) Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve month period ending on the last day of such
Plan Year. For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h), 403(b) or 457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the "OBRA `93 Annual Compensation Limit." The "OBRA `93 Annual Compensation
Limit" is $150,000, as adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined ("Determination Period") beginning in such
calendar year. If a Determination Period consists of fewer than 12 months, the
"OBRA `93 Annual Compensation Limit" will be multiplied by a fraction, the
numerator of which is the number of months in the Determination Period, and the
denominator of which is 12.
Any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean the "OBRA `93 Annual Compensation Limit" set forth in this
Section.
If Compensation for any prior Determination Period is taken into account
in determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior Determination Period is subject to the "OBRA `93
Annual Compensation Limit" in effect for that prior Determination Period. For
this purpose, for Determination Periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the "OBRA `93 Annual
Compensation Limit" is $150,000.
1.30 "415 Compensation" means compensation as defined in Section
4.10(d) of the Plan.
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<PAGE> 8
1.31 "Highly Compensated Employee" means any Employee or former
Employee who is a highly compensated employee as defined in Code Section 414(q)
and the Regulations thereunder. Generally, any Employee or former Employee is
considered a Highly Compensated Employee if such Employee or former Employee
performed services for the Employer during the "determination year" and is one
or more of the following groups:
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners." "Five-percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent of the outstanding
stock of the Employer or stock possessing more than five percent of the
total combined voting power of all stock of the Employer or, in the case
of an unincorporated business, any person who owns more than five
percent of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers.
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000. In determining
whether an individual has "415 Compensation" of more than $75,000, "415
Compensation" from each employer required to be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be taken into account.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in the
top-paid group of Employees for the Plan Year. An Employee is in the
top-paid group of Employees for any year if such Employee is in the
group consisting of the top twenty (20) percent of the Employees when
ranked on the basis of "415 Compensation" paid during the year. For the
purpose of determining the number of Employees in the top-paid group,
(a) Employees with less than six (6) months of service; (b) Employees
who normally work less than 172 hours per week; (c) Employees who
normally work less than six (6) months during a year; (d) Employees who
have not yet attained age 21; and (e) except to the extent provided in
Regulations, Employees who are included in a unit of Employees covered
by a collective bargaining agreement between employee representatives
and the Employer shall be excluded. In determining whether an individual
has "415 Compensation" of more than $50,000, "415 Compensation" from
each employer required to be aggregated under Code Section 414(b), (c),
(m) and (o) shall be taken into account.
(d) Employees who during the "look-back year" were officers
as defined in Section 1.36(a) and received "415 Compensation" during the
"look-back year" from the Employer greater than 50 percent of the limit
in effect under Code Section 415(b)(1)(A) for any such Plan Year. The
number of officers shall be limited to the lesser of (i) 50 employees;
or (ii) the greater of 3 employees or 10 percent of all employees. For
the purpose of determining the number of officers, the Employees
excluded in paragraph (c) above for purposes of determining the top-paid
group shall be excluded. However, such Employees shall still be
considered for the purpose of identifying the particular
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<PAGE> 9
Employees who are officers. If the Employer does not have at least one
officer whose annual "415 Compensation" is in excess of 50 percent of
the Code Section 415(b)(1)(A) limit, then the highest paid officer of
the Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the "determination
year" and are also described in (b), (c) or (d) above when these
paragraphs are modified to substitute "determination year" for
"look-back year."
The "look-back year" shall be the calendar year ending with or within
the Plan Year for which testing is being performed, and the "determination year"
(if applicable) shall be the period of time, if any, which extends beyond the
"look-back year" and ends on the last day of the Plan Year for which testing is
being performed (the "lag period"). If the "lag period" is less than twelve
months long, the threshold amounts specified in (b), (c) and (d) above shall be
prorated based upon the number of months in the "lag period."
Notwithstanding the foregoing, for Plan Years beginning after December
31, 1996, "Highly Compensated Employee" shall mean any Employee who is in one or
more of the following groups:
(a) Employees who at any time during the Plan Year being
tested or the prior Plan Year were "five-percent owners."
(b) Employees who, during the prior Plan Year:
(1) received "415 Compensation" in excess of $80,000
(or such other amount as determined by the Secretary of the
Treasury which reflects cost-of-living increases in accordance
with Code Section 414(q)(1)), and
(2) if the Employer elects the application of this
clause (2) for the prior Plan Year, was in the top-paid group of
employees for the prior Plan Year.
A former Employee shall be treated as a Highly Compensated Employee if
(1) such former Employee was a Highly Compensated Employee when he separated
from Service or (2) such former Employee was a Highly Compensated Employee at
any time after attaining age fifty-five (55).
For purposes of this Section, the determination of "415 Compensation"
shall be based only on "415 Compensation" which is actually paid and shall be
made by including amounts that would otherwise be excluded from a Participant's
gross income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B) and, in the case of Employer contributions made pursuant to a
salary reduction agreement, by including amounts that would otherwise be
excluded from a participant's gross income by reason of the application of Code
Section 403(b).
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In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Employers shall be taken into account as a single
employer and leased employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such leased employees are covered
by a plan described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. The exclusion of leased employees for
this purpose shall be applied on a uniform and consistent basis for all of the
Employer's retirement plans.
1.32 "Highly Compensated Participant" shall mean any Highly
Compensated Employee who is eligible to participate in the Plan.
1.33 "Hour of Service" shall mean (1) each hour for which an Employee
is directly or indirectly compensated or entitled to compensation by the
Employer for the performance of duties during the applicable computation period;
(2) each hour for which an Employee is directly or indirectly compensated or
entitled to compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, involuntary
military duty or leave of absence) during the applicable computation period; (3)
each hour for which back pay is awarded or agreed to by the Employer without
regard to mitigation of damages.
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) 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 is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year
of Service, a year of participation for purposes of accrued benefits, a 1-Year
Break in Service, and employment commencement date (or reemployment commencement
date). The provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
1.34 "Investment Funds" means the funds into which the assets of the
Trust Fund shall be invested as set forth in Section 4.13.
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1.35 "Investment Manager" means any person, firm or corporation who
is a registered investment adviser under the Investment Advisers Act of 1940, a
bank or an insurance company, and (a) who has the power to manage, acquire, or
dispose of Plan assets, and (b) who acknowledges in writing his fiduciary
responsibility to the Plan.
1.36 "Key Employee" means those Employees defined in Code Section
416(i) and the Treasury Regulations thereunder. Generally, they shall include
any Employee or former Employee (and his Beneficiaries) who, at any time during
the Plan Year or any of the preceding four (4) Plan Years, is:
(a) an officer of the Employer (as that term is defined
within the meaning of the regulations under Code Section 416) having
annual "415 Compensation" greater than 50 percent of the amount in
effect under Code Section 415(b)(1)(A) for any such Plan Year. Whether
an individual is an officer shall be determined by the Employer on the
basis of all the facts and circumstances, such as an individual's
authority, duties, and term of office, not on the mere fact that the
individual has the title of an officer. For any such Plan Year, officers
considered to be Key Employees will be no more than the fewer of:
(1) Fifty (50) Employees; or
(2) Ten percent (10%) of the Employees or, if
greater than ten percent (10%), three (3) Employees.
For this purpose, the highest paid officers shall be selected.
For purposes of determining the number of officers taken into account,
Employees excluded for purposes of determining the top-paid group
pursuant to Section 1.31(c) shall be excluded.
(b) one of the ten Employees having annual "415
Compensation" from the Employer for a Plan Year greater than the dollar
limitation in effect under Code Section 415(c)(1)(A) for the calendar
year in which such Plan Year ends and owning (or considered as owning
within the meaning of Code Section 318) both more than one-half percent
(2%) interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer.
(d) a "one percent owner" of the Employer having annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) at least one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer.
1.37 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.
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1.38 "Matching Contribution" means the contributions to the Plan that
are made pursuant to Section 4.1(a)(2).
1.39 "Matching Contribution Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer's Matching
Contributions.
1.40 "Non-Highly Compensated Employee" means any Employee or former
Employee who is not a Highly Compensated Employee.
1.41 "Non-Highly Compensated Participant" means any Participant who
is not a Highly Compensated Employee.
1.42 "Non-Key Employee" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.
1.43 "Non-Texas Resident" means a Participant who is not a resident
of the State of Texas.
1.44 "Non-Top Heavy Plan Year" means a Plan Year which is not a Top
Heavy Plan Year.
1.45 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age (65th
birthday). A Participant shall become fully Vested in his Account upon attaining
his Normal Retirement Age.
1.46 "1-Year Break in Service" means a Plan Year during which an
Employee has not completed more than 500 Hours of Service with the Employer. An
Employee shall not incur a 1-Year Break in Service for the Plan Year in which he
becomes a Participant, dies, retires or suffers Total and Permanent Disability.
Further, solely for the purpose of determining whether a Participant has
incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" shall mean an absence from
work for any period by reason of the Employee's pregnancy, birth of the
Employee's child, placement of a child with the Employee in connection with the
adoption of such child, or any absence for the purpose of caring for such child
for a period immediately following such birth or placement. For this purpose,
Hours of Service shall be credited for the computation period in which the
absence from work begins, only if credit therefor is necessary to prevent the
Employee from incurring a 1-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited for a
"maternity or paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which the
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Administrator is unable to determine such hours normally credited, eight (8)
Hours of Service per day. The total Hours of Service required to be credited for
a "maternity or paternity leave of absence" shall not exceed 501.
1.47 "Other Investments Account" shall mean the account of a
Participant which is credited with his share of Forfeitures.
1.48 "Participant" shall mean any Eligible Employee who elects to
participate in the Plan as provided in Sections 3.2 and 3.3, and has not for any
reason become ineligible to participate further in the Plan.
1.49 "Plan" shall mean this instrument, including all amendments
thereto.
1.50 "Plan Year" means the Plan's accounting year of not less than
fifty-two (52) nor more than fifty-three (53) weeks ending on the last Saturday
in June.
1.51 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan made pursuant to Section 4.7(b). Such contributions
shall be considered an Elective Contribution for the purposes of the Plan and
used to satisfy the Actual Deferral Percentage tests of Section 4.6(a).
In addition, the Employer's contributions to the Plan that are made
pursuant to Section 4.9(f) and used to satisfy the Actual Contribution
Percentage tests of Section 4.8(a) shall be considered Qualified Non-Elective
Contributions and be subject to the provisions of Sections 4.2(d) and 4.2(e).
1.52 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to time.
1.53 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.54 "Retirement Date" means the date as of which a Participant
retires, whether such retirement occurs on a Participant's Normal Retirement
Date or Late Retirement Date (see Section 7.1).
1.55 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.56 "Suspense Account" means the total forfeitable portion of all
Former Participants' Accounts which has not yet become a Forfeiture during any
Plan Year.
1.57 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.58 "Top Heavy Plan" means a plan described in Section 2.2(a).
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1.59 "Top Heavy Plan Year" means a Plan Year during which the Plan is
a Top Heavy Plan.
1.60 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing his usual and customary
employment with the Employer. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.
1.61 "Trustee" means the person or entity named as trustee herein or
in any separate trust forming a part of this Plan, and any successors.
1.62 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.63 "Unallocated Company Stock Suspense Account" means an account
containing Company Stock acquired with the proceeds of an Exempt Loan and which
has not been released from such account and allocated to the Participants'
Company Stock Accounts.
1.64 "Vested" means the portion of a Participant's Account that is
nonforfeitable.
1.65 "Year of Service" shall mean the computation period of twelve
(12) consecutive months, herein set forth, during which an Employee has at least
1,000 Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service.
For vesting purposes, a Year of Service shall be all Years of Service in
which an Employee completes 1,000 Hours of Service with the Employer commencing
from the Employee's date of hire. Notwithstanding the foregoing, vesting service
under the Tom Thumb Food & Drugs, Inc. Profit Sharing Plan shall count for
vesting purposes under this Plan.
Years of Service with any corporation, trade or business which is a
member of a controlled group of corporations or under common control (as defined
by Code Sections 414(b) and 414(c)), is a member of an affiliated service group
(as defined by Code Section 414(m)), or with any other entity required to be
aggregated with an Employer under Code Section 414(o) shall be recognized.
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ARTICLE 2.
TOP HEAVY AND ADMINISTRATION
2.1 Top Heavy Plan Requirements
(a) For any Top Heavy Plan Year, the Plan shall provide the
following:
(1) special vesting requirements of Code Section
416(b) pursuant to Section 7.4 of the Plan;
(2) special minimum allocation requirements of Code
Section 416(c) pursuant to Section 4.5 of the Plan.
2.2 Determination of Top Heavy Status
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued Benefits and
the Aggregate Accounts of all Key and Non-Key Employees under this Plan
and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate Account
balance shall not be taken into account for purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group). If a
Participant or Former Participant has not performed any services for any
Employer maintaining the Plan at any time during the five year period
ending on the Determination Date, any Accrued Benefit for such
Participant or Former Participant (and the Aggregate Account of such
individual) shall not be taken into account for the purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds ninety percent (90%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as
of the Determination Date is the sum of:
(1) his Participant's Account balance as of the most
recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
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(2) an adjustment for any contributions due as of
the Determination Date. Such adjustment shall be the amount of
any contributions actually made after the valuation date but on
or before the Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year;
(3) any Plan distributions made within the Plan Year
that includes the Determination Date or within the four (4)
preceding Plan Years. However, in the case of distributions made
after the valuation date and prior to the Determination Date,
such distributions are not included as distributions for top
heavy purposes to the extent that such distributions are already
included in the Participant's Aggregate Account balance as of
the valuation date. Notwithstanding anything herein to the
contrary, all distributions, including distributions made prior
to January 1, 1984, and distributions under a terminated plan
which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's Account balance because
of death shall be treated as a distribution for the purposes of
this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate Account
balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one employer to a
plan maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always consider
such rollovers or plan-to-plan transfers as a distribution for
the purposes of this Section. If this Plan is the plan accepting
such rollovers or plan-to-plan transfers, it shall not consider
such rollovers or plan-to-plan transfers as part of the
Participant's Aggregate Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated by the
Employee or made to a plan maintained by the same employer), if
this Plan provides the rollover or plan-to-plan transfer, it
shall not be counted as a distribution for purposes of this
Section. If this Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate
Account balance, irrespective of the date on which such rollover
or plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in (5) and (6)
above, all employers aggregated under Code Section 414(b), (c),
(m) and (o) are treated as the same employer.
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<PAGE> 17
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of the Employer
in which a Key Employee is a participant in the Plan Year
containing the Determination Date or any of the four preceding
Plan Years, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410, will be required
to be aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy Plan if the
Required Aggregation Group is a Top Heavy Group. No plan in the
Required Aggregation Group will be considered a Top Heavy Plan
if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group, taken
as a whole, would continue to satisfy the provisions of Code
Sections 401(a)(4) and 410. Such group shall be known as a
Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is a Top Heavy Group. No plan in the Permissive Aggregation
Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top
Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the last
day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee shall be as determined using the
single accrual method used for all plans of the Employer, or if no such
single method exists, using a method which results in benefits accruing
not more rapidly than the slowest accrual rate permitted under Code
Section 411(b)(1)(C). The determination of the Present Value of Accrued
Benefit shall be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the
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<PAGE> 18
Determination Date except as provided in Code Section 416 and the
Regulations thereunder for the first and second plan years of a defined
benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in the group,
and
(2) the Aggregate Accounts of Key Employees under
all defined contribution plans included in the group, exceeds
sixty percent (60%) of a similar sum determined for all
Participants.
2.3 Powers and Responsibilities of the Employer
(a) The Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan to assure that the
Plan is being operated for the exclusive benefit of the Participants and
their Beneficiaries in accordance with the terms of the Plan, the Code,
and the Act.
(b) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short run need
for liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the Trustee, who
shall coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not, however,
constitute a directive to the Trustee as to investment of the Trust
Funds. Such "funding policy and method" shall be consistent with the
objectives of this Plan and with the requirements of Title I of the Act.
(c) The Employer may in its discretion appoint an Investment
Manager to manage all or a designated portion of the assets of the Plan.
In such event, the Trustee shall follow the written directives of the
Investment Manager in investing the assets of the Plan managed by the
Investment Manager.
(d) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct and
evaluation, or through other appropriate ways.
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<PAGE> 19
2.4 Assignment and Designation of Administrative Authority
Any person, including, but not limited to, the Employees of the
Employer, shall be eligible to serve as an Administrator. The Employer shall
notify the Trustee of the name or names of the persons authorized to act as
Administrator of the Plan. An Administrator may resign by delivering his written
resignation to the Employer or be removed by the Employer by delivery of written
notice of removal, to take effect at a date specified therein, or upon delivery
to the Administrator if no date is specified. Until notified by the Employer
that a person or persons is no longer the Administrator, the Trustee may
continue to rely on the authority of such person.
The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer does
not appoint an Administrator, the Employer will function as the Administrator.
2.5 Allocation and Delegation of Responsibilities
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. Promptly upon receipt of such written
acceptance, the Employer shall notify the Trustee of the responsibilities of
each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
2.6 Powers and Duties of the Administrator
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power to determine all
questions arising in connection with the administration, interpretation, and
application of the Plan. Any such determination by the Administrator shall be
conclusive and binding upon all persons; provided however, all determinations
with regard to the Trustee shall be made by the Employer. The Administrator may
establish procedures, correct any defect, supply any information, or reconcile
any inconsistency in such manner and to such extent as shall be deemed necessary
or advisable to carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his duties under
this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
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<PAGE> 20
(a) to determine all questions relating to the eligibility
of Employees to participate or remain a Participant hereunder;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any Participant shall be
entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration
of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with the
terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which such
Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to be
contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee regarding
the short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 Records and Reports
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 Appointment of Advisers
The Administrator or the Trustee may appoint counsel, specialists,
advisers, and other persons as the Administrator or the Trustee deems necessary
or desirable in connection with the administration of this Plan.
2.9 Information from Employer
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to
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<PAGE> 21
the Trustee's duties under the Plan. The Administrator may rely upon such
information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 Payment of Expenses
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
2.11 Majority Actions
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 Claims Procedure
Claims for benefits under the Plan may be filed with the Administrator
on forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood by
the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
2.13 Claims Review Procedure
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
20
<PAGE> 22
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE 3.
ELIGIBILITY
3.1 Conditions of Eligibility
Any Employee who has completed one (1) Year of Service and has reached
his twenty-first (21st) birthday shall be eligible to participate hereunder as
of the date he has satisfied such requirement.
3.2 Application for Participation
In order to become a Participant hereunder, each Eligible Employee must
make application to the Employer for participation in the Plan and agree to the
terms hereof and properly authorize the Employer to make payroll deductions for
Participant's contributions as provided in Section 4.1. Upon his participation
in this Plan, such Employee shall automatically be bound by the terms and
conditions of the Plan and all amendments hereto.
3.3 Effective Date of Participation
An Employee who has become eligible to be a Participant shall become a
Participant effective as of the Sunday next following the date such Employee met
the eligibility requirements of Section 3.1 and applied for participation
pursuant to Section 3.2, provided said Employee was still employed as of such
date (or if not employed on such date, as of the date of rehire if a 1-Year
Break in Service has not occurred).
3.4 Determination of Eligibility
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made in accordance with the Plan and the Act. Such determination shall
be subject to review per Section 2.13.
3.5 Termination of Eligibility
In the event a Participant shall go from a classification of an Eligible
Employee to a noneligible Employee, such Participant shall become a Former
Participant and shall continue to vest in his interest in the Plan for each Year
of Service completed while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed pursuant to the terms of
the Plan. Additionally, his interest in the Plan shall continue to share in the
earnings of the Trust Fund.
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ARTICLE 4.
CONTRIBUTION AND ALLOCATION
4.1 Employer Contribution
(a) For each Plan Year, the Employer shall contribute to the
Plan:
(1) The amount of the total salary reduction
elections of all Participants made pursuant to Section 4.2(a),
which amount shall be deemed the Elective Contributions; plus
(2) A contribution equal to 100% of each
Participant's Elective Contribution, which amount shall be
deemed the Matching Contribution. In applying the matching
percentage in the previous sentence, only Elective Contributions
up to 5% of Compensation shall be considered.
(b) The Employer Contributions for any Plan Year, subject to
the limitation provided above, shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404.
(c) To the extent necessary to provide the top heavy minimum
allocations as set forth in Section 4.5(j), the Employer shall make a
contribution even if it exceeds the amount which is deductible under
Code Section 404.
4.2 Participant's Salary Reduction Election
(a) Each Participant may elect to defer from one percent
(1%) to fifteen percent (15%) (in whole percentage points) of his
Compensation subject to the limitations of this Section. The amount by
which Compensation is reduced shall be that Participant's Deferred
Compensation and shall be allocated to the Participant's Elective
Account. Elections by Participants pursuant to this Section shall be
effective as soon as administratively possible in relation to the
payroll procedures of the Employer.
(b) At any time during the Plan Year, a Participant may
change his election as to the rate of Deferred Compensation upward or
downward within the foregoing limitations, to be effective as of the
first pay period following such change. A notice of election change
shall be made in accordance with procedures established by the
Administrator.
(c) A Participant may temporarily suspend Elective
Contributions under the Plan, as of the first day of any pay period
without terminating his participation in the Plan, in accordance with
procedures established by the Administrator. A Participant may resume
Elective Contributions, specifying the first day of the pay period in
which Elective Contributions are to resume, in accordance with
procedures established by the Administrator.
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<PAGE> 24
(d) The balance in each Participant's Elective Account shall
be fully Vested at all times and shall not be subject to forfeiture for
any reason.
(e) Amounts held in a Participant's Elective Account may not
be distributable prior to the earlier of:
(1) his separation from service, Total and Permanent
Disability, or death;
(2) his attainment of age 592;
(3) termination of the Plan without establishment of
a "successor plan," as that term is described in Regulation
1.401(k)-1(d)(3) by the Employer or an Affiliated Employer;
(4) the date of the sale by the Employer to an
entity that is not an Affiliated Employer of substantially all
of the assets of an Employer's trade or business (within the
meaning of Code Section 409(d)(2)) with respect to a Participant
who continues employment with the corporation acquiring such
assets;
(5) the date of the sale by the Employer or an
Affiliated Employer of substantially all of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to an
entity which is not an Affiliated Employer with respect to a
Participant who continues employment with such subsidiary; or
(6) proven financial hardship, subject to the
limitations of Sections 4.2(h) and 7.14.
(f) A Participant's Deferred Compensation made pursuant to
this Plan and all other plans, contracts or arrangements of the Employer
shall not exceed, during any taxable year of the Participant, the
limitation imposed by Code Section 402(g), as in effect at the beginning
of such taxable year. If such dollar limitation is exceeded, a
Participant will be deemed to have notified the Administrator of such
excess amount which shall be distributed in a manner consistent with
Section 4.2(g). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in accordance
with Regulations.
(g) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement (as
defined in Code Section 401(k)), a simplified employee pension (as
defined in Code Section 408(k)), a salary reduction arrangement (within
the meaning of Code Section 3121(a)(5)(D)), a deferred compensation plan
under Code Section 457, or a trust described in Code Section 501(c)(18)
cumulatively exceed the limitation imposed by Code Section 402(g) (as
adjusted annually in accordance with the method provided in Code Section
415(d) pursuant to Regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of his
taxable year,
23
<PAGE> 25
notify the Administrator in writing of such excess and request that his
Deferred Compensation under this Plan be reduced by an amount specified
by the Participant. In such event, the Administrator may direct the
Trustee to distribute such excess amount, and any income allocable to
such amount, to the Participant not later than the first April 15th
following the close of the Participant's taxable year. Any distribution
of less than the entire amount of Excess Deferred Compensation and
income shall be treated as a pro rata distribution of Excess Deferred
Compensation and income. The amount distributed shall not exceed the
Participant's Deferred Compensation under the Plan for the taxable year.
Any distribution on or before the last day of the Participant's taxable
year must satisfy each of the following conditions:
(1) the distribution must be made after the date on
which the Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution
as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(g) shall be
made first from unmatched Deferred Compensation and, thereafter,
simultaneously from Deferred Compensation which is matched and matching
contributions which relate to such Deferred Compensation.
(h) In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to Section
7.14, or pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any other
plan maintained by the Employer, then such Participant shall not be
permitted to elect to have Deferred Compensation contributed to the Plan
on his behalf until the first day of the calendar quarter following a
period of twelve (12) months following the receipt of distribution.
Furthermore, the dollar limitation under Code Section 402(g) shall be
reduced, with respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable
year of the hardship distribution.
(i) The Employer and/or the Administrator shall adopt any
procedures necessary to implement the salary reduction elections
provided for herein.
(j) All amounts allocated to a Participant's Elective
Account shall be invested pursuant to Section 4.13.
(k) In any case, where any of the foregoing provisions of
this Section 4.2 are not in conformity with regulations of the
Department of the Treasury that are from time
24
<PAGE> 26
to time promulgated, the nonconforming provision may be amended
retroactively to assure conformity.
4.3 Amount of Employer's Contribution
The Employer shall determine the amount of contribution to be made to
the Plan. In determining such contribution, the Employer shall be entitled to
rely upon an estimate of the total Compensation for all Participants and the
Participant's Elective Contributions. The Employer's determination of such
contribution shall be binding on all Participants, the Employer, and the
Trustee. The Trustee shall have no right or duty to inquire into the amount of
the Employer's contribution or the method used in determining the amount of the
Employer's contribution, but shall be accountable only for funds actually
received by the Trustee.
4.4 Time of Payment of Employer's Contribution
Employer contributions will be paid in cash or other property within the
time prescribed by law, including extensions of time, for the filing of the
Employer's federal income tax return for the Employer's fiscal year.
Notwithstanding the foregoing, Employer contributions with respect to Non-Texas
Residents shall be paid in cash. Property contributed to the Plan will be valued
at its then fair market value.
Employer Elective Contributions accumulated through payroll deductions
shall be paid to the Trustee as of the earliest date on which such contributions
can reasonably be segregated from the Employer's general assets, but in any
event by the fifteenth (15th) business day of the month following the month in
which such amounts would otherwise have been payable to the Participant in cash,
unless such time period may be extended pursuant to regulations promulgated by
the Department of Labor. The provisions of Department of Labor regulations
2510.3-102 are incorporated herein by reference. Furthermore, any additional
Employer contributions which are allocable to the Participant's Elective Account
for a Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.
Notwithstanding the above, to the extent that the Plan has Current
Obligations, the Employer's contribution will be paid to the Plan in cash in
sufficient timely amounts to meet the terms of Current Obligations.
4.5 Allocation of Contribution, Earnings and Forfeitures
(a) The Administrator shall establish and maintain certain
accounts in the name of each Participant to which the Administrator
shall credit all amounts allocated to each such Participant as hereafter
set forth. However, the Administrator may separately account for that
portion of each Participant's Account attributable to Top Heavy Plan
Years and Non-Top Heavy Plan Years.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of
the Elective and Matching
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<PAGE> 27
Contributions for each Plan Year. Within 45 days after the date of
receipt by the Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) With respect to the Elective Contribution made
pursuant to Section 4.2, to each Participant's Elective Account
in an amount equal to the Participant's Deferred Compensation
for the year.
(2) With respect to the Matching Contribution made
pursuant to Section 4.1(a)(2), to each Participant's Matching
Contribution Account in accordance with Section 4.1(a)(2).
Except, however, a Participant who does not perform an Hour of
Service on the last day of a calendar quarter shall not share in
the Matching Contribution for that calendar quarter, unless
required pursuant to Section 4.5(l). A Participant who is
eligible to share in the Matching Contribution shall immediately
be Vested in any such Matching Contribution allocated to his
Account.
(c) The Company Stock Account of each Participant will be
credited with his allocable share of the Investment Funds, Company Stock
(including fractional shares) purchased and paid for by the Participants
or the Plan, with Forfeitures of Company Stock and with stock dividends
on Company Stock held in his Company Stock Account.
Company Stock acquired by the Plan with the proceeds of an
Exempt Loan will only be allocated to each Participant's Company Stock
Account upon release from the Unallocated Company Stock Suspense Account
as provided in Section 4.5(g) herein. Company Stock acquired with the
proceeds of an Exempt Loan will be an asset of the Trust Fund and
maintained in the Unallocated Company Stock Suspense Account.
Notwithstanding the foregoing, no Non-Texas Resident shall maintain a
Company Stock Account.
(d) Net Income (or loss) of the Trust Fund will be
determined as of the last day of each calendar quarter. Net Income (or
loss) of the Trust Fund shall be allocated in the same proportion that
each Participant's and Former Participant's nonsegregated accounts
(other than each Participant's and Former Participant's Company Stock
Account) bear to the total of all Participants' and Former Participants'
nonsegregated accounts (other than Participants' and Former
Participants' Company Stock Account) as of such date. Each segregated
account maintained on behalf of a Participant or Former Participant
shall be credited or charged with its separate earnings and losses.
Net Income (or Loss) does not include the interest paid under
any installment contract for the purchase of Company Stock by the Trust
Fund or on any loan used by the Trust Fund to purchase Company Stock,
nor does it include income received by the Trust Fund with respect to
Company Stock acquired with the proceeds of an Exempt Loan to the extent
such income is used to repay the loan; all income received by the Trust
Fund from Company Stock acquired with the proceeds of an Exempt Loan
which have not been
26
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allocated to a Participant's Company Stock Account shall be used to
repay such loan until the loan is fully repaid.
(e) The Administrator shall establish accounting procedures
for the purpose of making the allocations, valuations and adjustments to
Participants' Accounts provided for in this Section. Should the
Administrator determine that the strict application of its accounting
procedures will not result in an equitable and nondiscriminatory
allocation among the Participants' Accounts, it may modify its
procedures for the purpose of achieving an equitable and
nondiscriminatory allocation in accordance with the general concepts of
the Plan and the provisions of this Section, provided, however, that
such adjustments to achieve equity shall not reduce the Vested portion
of a Participant's Account.
(f) Separate accounts shall be maintained for all inactive
Participants who have a Vested interest in the Plan. Such separate
accounts shall not require a segregation of the Plan assets and no
Participant shall acquire any right to or interest in any specific asset
of the Trust as a result of the allocations provided for in the Plan.
All allocations will be made as of the Anniversary Date referred to in
this Section.
(g) All Company Stock acquired by the Plan with the proceeds
of an Exempt Loan must be added to and maintained in the Unallocated
Company Stock Suspense Account. Such Company Stock shall be released and
withdrawn from that account as if all Company Stock in that account were
encumbered. For each Plan Year during the duration of the loan, the
number of shares of Company Stock released shall equal the number of
encumbered shares held immediately before release for the current Plan
Year multiplied by a fraction, the numerator of which is the amount of
principal paid for the Plan Year and the denominator of which is the sum
of the numerator plus the principal to be paid for all future Plan
Years. As of each Anniversary Date, the Plan must consistently allocate
to each Participant's Account, non-monetary units (shares and fractional
shares of Company Stock) representing each Participant's interest in
assets withdrawn from the Unallocated Company Stock Suspense Account.
Income earned with respect to Company Stock in the Unallocated Company
Stock Suspense Account shall be used to repay the Exempt Loan used to
purchase such Company Stock. Any income which is not so used must be
allocated as income of the Plan.
(h) Cash dividends on shares of Company Stock allocable to
Participants' Accounts may be paid to Participants, as determined in the
sole discretion of the Administrator, within 90 days after the close of
the Plan Year in which the dividend is paid.
(i) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 7.4(d). The remaining
Forfeitures, if any, shall be allocated among the Participants' Accounts
of those Participants who are actively contributing to this Plan as of
the Anniversary Date
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<PAGE> 29
and each other Participant who retired during the Plan Year ending on
such Anniversary Date under Section 7.1 in the same proportion that each
such Participant's Compensation for the Plan Year bears to the total
Compensation of all such Participants for the Plan Year. Provided,
however, that in the event the allocation of Forfeitures provided herein
shall cause the "annual addition" (as defined in Section 4.10) to any
Participant's Account to exceed the amount allowable by the Code, the
excess shall be reallocated in accordance with Section 4.11.
Except, however, a Participant who performs less than a Year of
Service during any Plan Year shall not share in the Plan Forfeitures for
that year, unless required pursuant to Section 4.5(l) or unless such
Participant retires during the Plan Year.
(j) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of
the Employer's contributions and Forfeitures allocated to the
Participant's Account of each Non-Key Employee shall be equal to at
least three percent (3%) of such Non-Key Employee's "415 Compensation."
However, if (i) the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Account of each Key Employee for such Top
Heavy Plan Year is less than three percent (3%) of each Key Employee's
"415 Compensation" and (ii) this Plan is not required to be included in
an Aggregation Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410, the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Account of
each Non-Key Employee shall be equal to the largest percentage allocated
to the Participant's Account of each Key Employee.
Except, however, no such minimum allocation shall be required in
this Plan for any Non-Key Employee who participates in another defined
contribution plan subject to Code Section 412 providing such benefits
included with this Plan in a Required Aggregation Group.
(k) For purposes of the minimum allocations set forth above,
the percentage allocated to the Participant's Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contribution and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(l) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Account of all
Non-Key Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Non-Key Employees
who have (1) failed to complete a Year of Service; (2) declined to make
mandatory contributions (if required) to the Plan; and (3) been excluded
from participation because of their level of Compensation.
(m) In lieu of the above, if a Non-Key Employee participates
in this Plan and a defined benefit pension plan included in a Required
Aggregation Group which is top heavy, a minimum allocation of five
percent (5%) of "415 Compensation" shall be provided under this Plan.
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<PAGE> 30
The extra minimum allocation (required by Section 4.10(n) to
provide higher limitations) will not be provided.
(n) For the purposes of this Section, "415 Compensation"
shall be as defined in Section 4.10(d).
(o) Any Participant who terminated employment during the
Plan Year for any reason including death, Total and Permanent Disability
or retirement, shall share only in the allocations of earnings or losses
as provided in this Section. However, if any non-segregated account of a
Participant has been distributed prior to the subsequent Anniversary
Date or other valuation date, no earnings and losses shall be credited.
(p) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
4.6 Actual Deferral Percentage Tests
(a) For each Plan Year, the annual allocation derived from
Elective Contributions to a Participant's Elective Account shall satisfy
one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the "Actual
Deferral Percentage" of the Non-Highly Compensated Participant
group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Participant group over the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant
group shall not be more than two percentage points.
Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant
group multiplied by 2. The provisions of Code Section 401(k)(3)
and Regulation 1.401(k)-1(b) are incorporated herein by
reference.
Notwithstanding the foregoing, for each Plan Year beginning
after December 31, 1996, the annual allocation derived from Elective
Contributions to a Participant's Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group for the Plan Year being tested
shall not be more than the "Actual
29
<PAGE> 31
Deferral Percentage" of the Non-Highly Compensated Participant
group for the previous Plan Year multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Participant group for the Plan Year
being tested over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the previous Plan
Year shall not be more than two percentage points. Additionally,
the "Actual Deferral Percentage" for the Highly Compensated
Participant group for the Plan Year being tested shall not
exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group for the previous Plan Year
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-1(b) are incorporated herein by reference.
For purposes of this Section, the individuals taken into account
in determining the Actual Deferral Percentage for the Non-Highly
Compensated Participant group for the previous Plan Year shall be those
individuals who were Non-Highly Compensated Participants during the
previous Plan Year, without regard to the individuals' status in the
current Plan Year.
For Plan Years beginning after December 31, 1996, the Employer
may elect to apply the limit under this Section based on the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant group
for the Plan Year being tested rather than the previous Plan Year, but
if the Employer so elects, such election may not be changed except as
provided by the Secretary of Treasury.
In the case of the first Plan Year beginning after December 31,
1996 for which this Plan provides for Elective Contributions, the
"Actual Deferral Percentage" for the Non-Highly Compensated Participant
group for the previous Plan Year shall be (i) three percent (3%), or
(ii) if the Employer elects, the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group determined for such Plan Year.
To prevent the multiple use of the alternate method described in
(2) above and in Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make Elective Contributions pursuant to Section
4.2 and to make Employee contributions or to receive matching
contributions under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer shall have his actual contribution
ratio reduced pursuant to Regulation 1.401(m)-2, the provisions of which
are incorporated herein by reference.
(b) For the purposes of this Section, "Actual Deferral
Percentage" means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan Year, the
average of the ratios, calculated separately for each Employee in such
group, of the amount of Elective Contributions allocated to each
Participant's Elective Account for such Plan Year, to such Employee's
"414(s) Compensation" for such Plan Year. The actual deferral ratio for
each Employee and the "Actual Deferral Percentage" for each group shall
be calculated to the nearest one-
30
<PAGE> 32
hundredth of one percent. Employer Elective Contributions allocated to
each Non-Highly Compensated Participant's Elective Account shall be
reduced by Excess Deferred Compensation to the extent such excess
amounts are made under this Plan or any other plan maintained by the
Employer.
(c) For the purposes of Sections 4.6(a) and 4.7, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was made or suspended
pursuant to Section 4.2.
(d) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans that include cash or
deferred arrangements are considered one plan for the purposes of Code
Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)),
the cash or deferred arrangements included in such plans shall be
treated as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for purposes of
determining whether or not such arrangements satisfy Code Sections
401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for
purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(k).
Plans may be aggregated under this paragraph (d) only if they have the
same plan year.
Notwithstanding the above, an ESOP or the ESOP portion of this
Plan may not be combined with the non-ESOP portion of this Plan for
purposes of determining whether the ESOP or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly
Compensated Participant is a participant under two (2) or more cash or
deferred arrangements (other than a cash or deferred arrangement that is
part of an ESOP) of the Employer or an Affiliated Employer, all such
cash or deferred arrangements shall be treated as one (1) cash or
deferred arrangement for the purpose of determining the deferral
percentage with respect to such Highly Compensated Participant. However,
if the cash or deferred arrangements have different Plan Years, this
paragraph shall be applied by treating all cash or deferred arrangements
ending with or within the same calendar year as a single arrangement.
(f) Notwithstanding the above, the determination and
treatment of Elective Contributions and the "Actual Deferral Percentage"
of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
4.7 Adjustment to Actual Deferral Percentage Tests
In the event that the initial allocations of the Elective Contributions
made pursuant to Section 4.2 do not satisfy one of the tests set forth in
Section 4.6(a), the Administrator shall adjust the Elective Contribution
pursuant to the options set forth below:
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<PAGE> 33
(1) On or before the 15th day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall have
his portion of Excess Contributions (as defined below) (and any
income allocable to such portion) distributed to him until one
of the tests set forth in Section 4.6(a) is satisfied, or until
his actual deferral ratio equals the actual deferral ratio of
the Highly Compensated Participant having the second highest
actual deferral ratio. This process continues until one of the
tests set forth in Section 4.6(a) is satisfied. For each Highly
Compensated Participant, the amount of Excess Contributions is
equal to the Elective Contributions made on behalf of such
Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual deferral
ratio (determined after application of this paragraph) by his
Compensation.
(2) For Plan Years beginning after December 31,
1996, this paragraph (2) shall apply in the place of paragraph
(1). On or before the 15th day of the third month following the
end of each Plan Year, Excess Contributions (as defined below)
shall be distributed to Highly Compensated Participants in
accordance with the following procedure:
(i) The dollar amount of Excess
Contributions for each Highly Compensated Participant
shall be calculated. For this purpose, the amount of
Excess Contributions for a Highly Compensated
Participant for a Plan Year is the amount (if any) by
which the employee's Elective Contributions must be
reduced for the employee's actual deferral ratio to
equal the highest permitted actual deferral ratio under
the Plan.
To calculate the highest permitted actual
deferral ratio under the Plan, the actual deferral ratio
of the Highly Compensated Participant with the highest
actual deferral ratio is reduced by the amount required
to cause the employee's actual deferral ratio to equal
the percentage of the Highly Compensated Participant
with the next highest actual deferral ratio. If a lesser
reduction would enable the Plan to satisfy one of the
tests under Section 4.6(a), only this lesser reduction
may be made. This process is repeated until the Plan
satisfies one of the tests under Section 4.6(a). The
highest actual deferral ratio remaining under the Plan
after the leveling is the highest permitted actual
deferral ratio.
(ii) The total dollar amounts calculated
under (i) above shall be determined. Such total amount
shall be distributed in accordance with (iii) and (iv)
below.
(iii) The Elective Contributions of the Highly
Compensated Participant with the highest dollar amount
of Elective Contributions shall be reduced by the amount
required to cause that Highly Compensated
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<PAGE> 34
Participant's Elective Contributions to equal the dollar
amount of the Elective Contributions of the Highly
Compensated Participant with the next highest dollar
amount of Elective Contributions. Such amount shall be
distributed to the Highly Compensated Participant with
the highest dollar amount of Elective Contributions. If
more than one Highly Compensated Participant has the
highest dollar amount of Elective Contributions, such
amount shall be distributed equally to such Highly
Compensated Participants. However, if a lesser
reduction, when added to the total dollar amount already
distributed under this paragraph (iii), would equal the
amount determined under paragraph (ii), only the lesser
reduction amount shall be distributed.
(iv) If the total amount distributed after
the application of paragraph (iii) is less than the
amount determined under paragraph (ii), the application
of paragraph (iii) shall be repeated.
In determining the amount of Excess Contributions to be
distributed with respect to an affected Highly Compensated Participant
as determined herein, such amount shall be reduced by any Excess
Deferred Compensation previously distributed to such affected Highly
Compensated Participant for his taxable year ending with or within such
Plan Year. If there is a loss allocable to such excess amount, the
distribution shall in no event be less than the lesser of the
Participant's Elective Account or the Participant's Deferred
Compensation for the Plan Year.
(3) With respect to the distribution of Excess
Contributions pursuant to this paragraph (a), such distribution:
(i) may be postponed, but not later than the
close of the Plan Year following the Plan Year to which
they are allocable;
(ii) shall be made simultaneously from
Deferred Compensation and matching contributions which
relate to such Deferred Compensation;
(iii) shall be adjusted for income; and
(iv) shall be designated by the Employer as a
distribution of Excess Contributions (and income).
(4) Any distribution of less than the entire amount
of Excess Contributions shall be treated as a pro rata
distribution of Excess Contributions and income.
(b) Within twelve (12) months after the end of the Plan
Year, if necessary, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.6(a). Such contribution shall be allocated to the
Participant's Elective
33
<PAGE> 35
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's Compensation
for the year bears to the total Compensation of all Non-Highly
Compensated Participants.
(c) If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth in
Section 4.6(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the order
provided in Section 4.7(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.6(a).
4.8 Maximum Contribution Percentage - Section 401(m) Test
(a) For each Plan Year, the "Actual Contribution Percentage"
for the Highly Compensated Participant group shall not exceed the
greater of:
(1) 125 percent of such percentage for the
Non-Highly Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus 2
percentage points.
Notwithstanding the foregoing, for each Plan Year beginning
after December 31, 1996, the "Actual Contribution Percentage" for the
Highly Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the
Non-Highly Compensated Participant group for the previous Plan
Year; or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group for the previous
Plan Year, or such percentage for the Non-Highly Compensated
Participant group for the previous Plan Year plus 2 percentage
points.
For purposes of this Section, the individuals taken into account
in determining the Actual Contribution Percentage for the Non-Highly
Compensated Participant group for the previous Plan Year shall be those
individuals who were Non-Highly Compensated Participants during the
previous Plan Year, without regard to the individuals' status in the
current Plan Year.
The Employer may elect to apply the limit under this Section
based on the "Actual Contribution Percentage" for the Non-Highly
Compensated Participant group for the Plan Year being tested rather than
the previous Plan Year, but if the Employer so elects, such election may
not be changed except as provided by the Secretary of Treasury.
34
<PAGE> 36
To prevent the multiple use of the alternative method described
in (2) above and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals under any cash or
deferred arrangement maintained by the Employer and to make Employee
contributions or to receive matching contributions under this Plan or
any other plan maintained by the Employer shall have his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2. The
provisions of Code Section 401(m) and Regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated herein by reference.
(b) For the purposes of this Section and Section 4.9,
"Actual Contribution Percentage" for a Plan Year means, with respect to
the Highly Compensated Participant group and Non-Highly Compensated
Participant group, the average of the ratios (calculated separately for
each Participant in each group) of:
(1) the sum of Matching Contributions made pursuant
to Section 4.1(a)(2) (and, for Plan Years beginning prior to
April 1, 1997, Employee contributions) (collectively, "Aggregate
Contributions") on behalf of each such Participant for such Plan
Year; to
(2) the Participant's "414(s) Compensation" for such
Plan Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant to
Section 4.9(d), only Matching Contributions (and, for Plan Years
beginning prior to April 1, 1997, Employee contributions) contributed to
the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Matching
Contributions pursuant to Section 4.1(a)(2) allocated to their accounts,
elective deferrals (as defined in Regulation 1.402(g)-1(b)) and
qualified non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be
treated as Employer contributions subject to Regulation 1.401(m)-1(b)(5)
which is incorporated herein by reference. However, the Plan Year must
be the same as the plan year of the plan to which the elective deferrals
and the qualified non-elective contributions are made.
(d) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the Employer to
which matching contributions, Employee contributions, or both, are made
are treated as one plan for purposes of Code Sections 401(a)(4) or
410(b) (other than the average benefits test under Code Section
410(b)(2)(A)(ii), such plans shall be treated as one plan. In addition,
two or more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as a single
plan for purposes of determining whether or not such plans satisfy Code
Sections 401(a)(4), 410(b) and 401(m). In such a case, the aggregated
plans must satisfy this Section and Code Sections 401(a)(4), 410(b) and
401(m) as though such aggregated plans were a single plan. Plans may be
aggregated under this paragraph only if they have the same plan year.
35
<PAGE> 37
Notwithstanding the above, an ESOP or the ESOP portion of this
Plan may not be combined with the non-ESOP portion of this Plan for
purposes of determining whether the ESOP or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a participant
under two or more plans which are maintained by the Employer to which
matching contributions, Employee contributions, or both, are made, all
such contributions on behalf of such Highly Compensated Participant
shall be aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans have
different plan years, this paragraph shall be applied by treating all
plans ending with or within the same calendar year as a single plan. For
purposes of this paragraph, contributions under a plan that is an ESOP
may not be aggregated with contributions under a plan that is not an
ESOP.
(f) For purposes of Sections 4.8(a) and 4.9, a Highly
Compensated Participant and Non-Highly Compensated Participant shall
include any Employee eligible to have Matching Contributions made
pursuant to Section 4.1(a)(2) allocated to his account for the Plan
Year.
4.9 Adjustment to Actual Contribution Percentage Tests
(a) In the event that the "Actual Contribution Percentage"
for the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.8(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan Year, but
in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated Participant
having the highest actual contribution ratio his Excess Aggregate
Contributions (and income allocable to such contributions) until either
one of the tests set forth in Section 4.8(a) is satisfied, or until his
actual contribution ratio equals the actual contribution ratio of the
Highly Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of the tests
set forth in Section 4.8(a) is satisfied.
In lieu of the previous paragraph, for Plan Years beginning
after December 31, 1996, in the event that the "Actual Contribution
Percentage" for the Highly Compensated Participant group exceeds the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.8(a), the Administrator (on or
before the fifteenth day of the third month following the end of the
Plan Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute Excess Aggregate
Contributions in accordance with the following procedure:
(1) The dollar amount of Excess Aggregate
Contributions for each Highly Compensated Participant shall be
calculated. For this purpose, the amount of Excess Aggregate
Contributions for a Highly Compensated Participant for a Plan
Year is the amount (if any) by which the employee's Aggregate
36
<PAGE> 38
Contributions must be reduced for the employee's actual
contribution ratio to equal the highest permitted actual
contribution ratio under the Plan.
To calculate the highest permitted actual contribution
ratio under the Plan, the actual contribution ratio of the
Highly Compensated Participant with the highest actual
contribution ratio is reduced by the amount required to cause
the employee's actual contribution ratio to equal the percentage
of the Highly Compensated Participant with the next highest
actual contribution ratio. If a lesser reduction would enable
the Plan to satisfy one of the tests under Section 4.8(a), only
this lesser reduction may be made. This process is repeated
until the Plan satisfies one of the tests under Section 4.8(a).
The highest actual contribution ratio remaining under the Plan
after the leveling is the highest permitted actual contribution
ratio.
(2) The total dollar amounts calculated under (1)
above shall be determined. Such total amount shall be
distributed in accordance with (3) and (4) below.
(3) The Aggregate Contributions of the Highly
Compensated Participant with the highest dollar amount of
Aggregate Contributions shall be reduced by the amount required
to cause that Highly Compensated Participant's Aggregate
Contributions to equal the dollar amount of the Aggregate
Contributions of the Highly Compensated Participant with the
next highest dollar amount of Aggregate Contributions. Such
amount shall be distributed to the Highly Compensated
Participant with the highest dollar amount of Aggregate
Contributions. If more than one Highly Compensated Participant
has the highest dollar amount of Aggregate Contributions, such
amount shall be distributed equally to such Highly Compensated
Participants. However, if a lesser reduction, when added to the
total dollar amount already distributed under this paragraph
(3), would equal the amount determined under paragraph (2), only
the lesser reduction amount shall be distributed.
(4) If the total amount distributed after the
application of paragraph (3) is less than the amount determined
under paragraph (2), the application of paragraph (3) shall be
repeated.
(b) Any distribution of less than the entire amount of
Excess Aggregate Contributions (and income) shall be treated as a pro
rata distribution of Excess Aggregate Contributions and income thereon.
Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and
income).
(c) Excess Aggregate Contributions shall be treated as
Employer contributions for purposes of Code Sections 404 and 415 even if
distributed from the Plan.
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<PAGE> 39
(d) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the Matching Contributions
made pursuant to Section 4.1(a)(2) (and, for Plan Years beginning prior
to April 1, 1997, Employee contributions) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to
Section 4.8(c) on behalf of the Highly Compensated Participant
(determined prior to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's actual
contribution ratio (determined after application of this paragraph) by
his "414(s) Compensation." The actual contribution ratio must be rounded
to the nearest one-hundredth of one percent. In no case shall the amount
of Excess Aggregate Contribution with respect to any Highly Compensated
Participant exceed the amount of Matching Contributions and any
qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.8(c) on behalf of the Highly Compensated
Participant for such Plan Year.
(e) If during a Plan Year the projected aggregate amount of
Matching Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth in
Section 4.8(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the order
provided in Section 4.9(a) each affected Highly Compensated
Participant's projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in Section 4.8(a).
(f) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special
Qualified Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.8(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total Compensation
of all Non-Highly Compensated Participants. A separate accounting shall
be maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 4.6(a).
4.10 Maximum Annual Additions
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any "limitation
year" shall equal the lesser of: (1) $30,000 (or, if greater, one-fourth
of the dollar limitation in effect under Code Section 415(b)(1)(A)) or
(2) twenty-five percent (25%) of the Participant's "415 Compensation"
for such "limitation year." For any short "limitation year," the dollar
limitation in (1) above shall be reduced by a fraction, the numerator of
which is the number of full months in the short "limitation year" and
the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section
415, "annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions, (2)
Employee contributions, (3) Forfeitures, (4) amounts allocated to an
individual medical account, as defined in Code Section 415(l)(2), which
is
38
<PAGE> 40
part of a pension or annuity plan maintained by the Employer and (5)
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 allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit plan (as defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation" limitation referred to
in paragraph (a)(2) above shall not apply to: (1) any contribution for
medical benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is otherwise treated as an "annual
addition," or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is not an
"annual addition." In addition, the following are not Employee
contributions for purposes of Section 4.10(b)(2): (1) rollover
contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a Participant
from the Plan; (3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee contributions
to a simplified employee pension excludable from gross income under Code
Section 408(k).
The limitations of Code Section 415 shall not apply to (1)
Forfeitures of Company Stock purchased with the proceeds of an Exempt
Loan and (2) Employer contributions which are deductible under Code
Section 404(a)(9)(B) and charged against a Participant's Account, if no
more than one-third of the Employer contributions for the year which are
deductible under Code Section 404(a)(9) are allocated to the
Participants' Accounts of Highly Compensated Employees.
(d) For purposes of applying the limitations of Code Section
415, "415 Compensation" means a Participant's wages, salaries, fees for
professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer maintaining the
Plan to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits, and reimbursements
or other expense allowances under a nonaccountable plan (as described in
Regulation 1.62-2(c)) for a Plan Year. "415 Compensation" for a
self-employed individual shall be equal to his earned income. "415
Compensation" shall exclude (1)(A) contributions made by the Employer to
a plan of deferred compensation to the extent that the contributions are
not includable in the gross income of the Participant for the taxable
year in which contributed, (B) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code
Section 408(k) to the extent such contributions are excludable from the
Employee's gross income, (C) any distributions from a plan of deferred
compensation; (2) amounts realized from the exercise of a non-qualified
stock option or when restricted stock (or property) held by an
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Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (3) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock
option; and (4) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of any annuity contract
described in Code Section 403(b) (whether or not the contributions are
actually excludable from the gross income of the Employee).
(e) For purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(f) The limitation stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section 415(d) pursuant to the
regulations prescribed by the Secretary of the Treasury. The adjusted
limitation is effective as of January 1st of each calendar year and is
applicable to "limitation years" ending with or within that calendar
year.
(g) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all qualified
defined contribution plans (whether terminated or not) ever maintained
by the Employer shall be treated as one defined contribution plan.
(h) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or businesses under
common control (as defined by Code Section 1563(a) or Code Section
414(b) and (c) as modified by Code Section 415(h)) is a member of an
affiliated service group (as defined by Code Section 414(m)), or is a
member of a group of entities required to be aggregated pursuant to
Regulations under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
(i) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, all Employers of a Participant who maintain this
Plan will be considered to be a single Employer.
(1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions"
under this Plan shall equal the maximum "annual additions" for
the "limitation year" minus any "annual additions" previously
credited to such Participant's accounts during the "limitation
year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, "annual
additions" will be credited to the Participant's accounts under
the defined contribution plan subject to Code Section 412 prior
to crediting "annual
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additions" to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one
defined contribution plan not subject to Code Section 412
maintained by the Employer which have the same Anniversary Date,
the maximum "annual additions" under this Plan shall equal the
product of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously
credited under subparagraphs (1) or (2) above, multiplied by (B)
a fraction (i) the numerator of which is the "annual additions"
which would be credited to such Participant's accounts under
this Plan without regard to the limitations of Code Section 415
and (ii) the denominator of which is such "annual additions" for
all plans described in this subparagraph.
(k) If an Employee is (or has been) a Participant in one or
more defined benefit plans and one or more defined contribution plans
maintained by the Employer, the sum of the defined benefit plan fraction
and the defined contribution plan fraction for any "limitation year" may
not exceed 1.0.
(l) The defined benefit plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the
Participant's projected annual benefits under all the defined benefit
plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar
limitation determined for the "limitation year" under Code Sections
415(b) and (d) or 140 percent of the amount which may be taken into
account under Code Section 415(b)(1)(B) with respect to the Participant
under the plan for such year, including any adjustments under Code
Section 415(b).
Notwithstanding the above, if the Participant was a participant
as of the first day of the first "limitation year" beginning after
December 31, 1986, in one or more defined benefit plans maintained by
the Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as of the
close of the last "limitation year" beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the requirements of
Section 415 for all "limitation years" beginning before January 1, 1987.
(m) The defined contribution plan fraction for any
"limitation year" is a fraction, the numerator of which is the sum of
the annual additions to the Participant's Account under all the defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior "limitation years" (including the
annual additions attributable to the Participant's nondeductible
Employee contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in Code Section
415(l)(2), maintained
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by the Employer), and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior "limitation years" of
service with the Employer (regardless of whether a defined contribution
plan was maintained by the Employer). The maximum aggregate amount in
any "limitation year" is the lesser of 125 percent of the dollar
limitation determined under Code Sections 415(b) and (d) in effect under
Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the employee was a Participant as of the end of the first day
of the first limitation year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the Employer which were
in existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed
as of the end of the last limitation year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Section 415 limitation
applicable to the first limitation year beginning on or after January 1,
1987. The annual addition for any "limitation year" beginning before
January 1, 1987 shall not be recomputed to treat all Employee
contributions as annual additions.
(n) Notwithstanding the foregoing, for any "limitation year"
in which the Plan is a Top Heavy Plan, 100 percent shall be substituted
for 125 percent in paragraph 4.10(l) and 4.10(m) unless the extra
minimum allocation is being provided pursuant to Section 4.5. However,
for any "limitation year" in which the Plan is a Super Top Heavy Plan,
100 percent shall be substituted for 125 percent in any event.
(o) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the provisions
of Code Section 415 and the Regulations thereunder, the terms of which
are specifically incorporated herein by reference.
4.11 Adjustment for Excessive Annual Additions
(a) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation or other
facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause the
maximum "annual additions" to be exceeded for any Participant, the
Administrator shall (1) distribute any elective deferrals (within the
meaning of Code Section 402(g)(3)) credited for the "limitation year" to
the extent that the return would reduce the "excess amount" in the
Participant's accounts (2) hold any "excess amount" remaining after the
return of any elective deferrals in a "Section 415 suspense account" (3)
use the "Section 415 suspense account" in the next "limitation year"
(and succeeding "limitation years" if necessary) to reduce Employer
contributions for the Participant if
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that Participant is covered by the Plan as of the end of the "limitation
year," or if the Participant is not so covered, allocate and reallocate
the "Section 415 suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to all Participants in the
Plan before any Employer or Employee contributions which would
constitute "annual additions" are made to the Plan for such "limitation
year" (4) reduce Employer contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account" allocated and
reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any, of
(1) the "annual additions" which would be credited to his account under
the terms of the Plan without regard to the limitations of Code Section
415 over (2) the maximum "annual additions" determined pursuant to
Section 4.10.
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of "excess
amounts" for all Participants in the Plan during the "limitation year."
The "Section 415 suspense account" shall not share in any earnings or
losses of the Trust Fund.
4.12 Transfers and Rollovers from Other Qualified Plans
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Participants, provided that
the trust from which such funds are transferred permits the transfer to
be made and the transfer will not jeopardize the tax exempt status of
the Plan or create adverse tax consequences for the Employer. The
amounts transferred shall be set up in a separate account herein
referred to as a "Rollover Account." Such account shall be fully Vested
at all times and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may not
be withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as defined
in Regulation 1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-1(d).
(d) Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is consistent with and
satisfies the provisions of Section 7.5, including, but not limited to,
all notice and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be considered as
part of a Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant's consent may be made.
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(e) All amounts allocated to a Participant's Rollover
Account shall be invested in Investment Funds in accordance with the
direction of the Participant pursuant to Section 4.13.
(f) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i) amounts
transferred to this Plan directly from another qualified plan; (ii)
distributions from another qualified plan which are eligible rollover
distributions and which are either transferred by the Employee to this
Plan within sixty (60) days following his receipt thereof or are
transferred pursuant to a direct rollover; (iii) amounts transferred to
this Plan from a conduit individual retirement account provided that the
conduit individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible for tax-free
rollover to a qualified plan and (C) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof
and other than earnings on said assets; and (iv) amounts distributed to
the Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee to
this Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account.
(g) Prior to accepting any rollovers to which this Section
applies, the Administrator may require the Employee to establish that
the amounts to be rolled over to this Plan meet the requirements of this
Section and may also require the Employee to provide an opinion of
counsel satisfactory to the Employer that the amounts to be rolled over
meet the requirements of this Section.
(h) A Participant's Rollover Account shall not accept any
direct or indirect transfers (as that term is defined and interpreted
under Code Section 401(a)(11) and the Regulations thereunder) from a
defined benefit plan, money purchase plan (including a target benefit
plan), stock bonus or profit sharing plan which would otherwise have
provided for a life annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall be permitted
only if it will not result in the elimination or reduction of any
protected benefits under Code Section 411(d)(6).
4.13 Directed Investment Account
(a) Participant's Accounts shall be invested at the
Participant's election in the Investment Funds as the Administrator may
approve for investment purposes. Except as provided in paragraph (c), a
Participant may not direct the investment of his Company Stock Account.
That portion of the Account of a Participant who directs the investment
thereof shall be considered a Directed Investment Account which shall
not share in Trust Fund earnings.
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(b) The Trustee shall divide the Trust Fund into the number
and types of Investment Funds as the Administrator may approve for
investment purposes. Designation by a Participant to the various
Investment Funds shall be in increments of five percent (5%). The
Administrator shall implement rules and requirements pertaining to
changes by Participants in their investment allocations among the
Investment Funds.
(c) Each Qualified Participant who has not attained age
sixty (60) may elect within ninety (90) days after the end of each
calendar quarter or within ninety (90) days after the close of each Plan
Year during the Qualified Election Period to direct the Trustee in
writing as to the investment of 25 percent of the Qualified
Participant's Company Stock Account (to the extent such portion exceeds
the amount to which a prior election under this subparagraph applies).
Each Qualified Participant who has attained age sixty (60) may elect
within ninety (90) days after the end of each calendar quarter or within
ninety (90) days after the close of each Plan Year during the Qualified
Election Period to direct the Trustee in writing as to the investment of
up to 100 percent of the Qualified Participant's Company Stock Account
(to the extent such portion exceeds the amount to which a prior election
under this subparagraph applies). If the Qualified Participant elects to
direct the Trustee as to the investment of his Company Stock Account,
such direction shall be effective no later than 180 days after the close
of the Plan Year to which such direction applies. In lieu of directing
the Trustee as to the investment of his Company Stock Account, the
Qualified Participant may elect a distribution in cash or Company Stock
of the portion of his Company Stock Account covered by the election
within ninety (90) days after the last day of the period during which
the election can be made.
(d) For the purposes of this Section the following
definitions shall apply:
(1) "Qualified Participant" means any Participant or
Former Participant who has completed ten (10) Years of Service
as a Participant and has attained age 55.
(2) "Qualified Election Period" shall mean the six
(6) Plan Year period beginning with the later of (i) the first
Plan Year in which the Participant first becomes a Qualified
Participant or (ii) the first Plan Year beginning after December
31, 1986.
(e) A separate Directed Investment Account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and his Directed
Investment Account shall be charged and credited as the case may be to
each account. The Directed Investment Account shall not share in Trust
Fund earnings, but it shall be charged or credited as appropriate with
the net earnings, gains, losses and expenses as well as any appreciation
or depreciation in market value during each Plan Year attributable to
such account. To the extent so directed, the Trustees are relieved of
their fiduciary responsibilities as provided in Section 404 of the Act.
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ARTICLE 5.
FUNDING AND INVESTMENT POLICY
5.1 Application of Cash
Employer contributions in cash and other cash received by the Trust Fund
shall first be applied to pay any Current Obligations of the Trust Fund.
5.2 Transactions Involving Company Stock
All purchases or sales of Company Stock and the price of such purchases
or sales shall be made as the Administrator instructs the Trustee. All purchases
of Company Stock shall be made at a price which, in the judgment of the
Administrator, does not exceed the fair market value thereof. All sales of
Company Stock shall be made at a price which, in the judgment of the
Administrator, is not less than the fair market value thereof. The valuation
rules set forth in Article 6 shall be applicable.
5.3 Loans to the Trust
(a) The Plan may borrow money for any lawful purpose,
provided, the proceeds of an Exempt Loan are used within a reasonable
time after receipt only for any or all of the following purposes:
(1) To acquire Company Stock.
(2) To repay such loan.
(3) To repay a prior Exempt Loan.
(b) All loans to the Trust which are made or guaranteed by a
disqualified person must satisfy all requirements applicable to Exempt
Loans including but not limited to the following:
(1) The loan must be at a reasonable rate of
interest;
(2) Any collateral pledged to the creditor by the
Plan shall consist only of the Company Stock purchased with the
borrower funds;
(3) Under the terms of the loan, any pledge of
Company Stock shall provide for the release of shares so pledged
on a pro-rata basis pursuant to Section 4.5(g);
(4) Under the terms of the loan, the creditor shall
have no recourse against the Plan except with respect to such
collateral, earnings attributable to such collateral, Employer
contributions (other than contributions of Company Stock) that
are made to meet Current Obligations and earnings attributable
to such contributions;
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(5) The loan must be for a specific term and may not
be payable at the demand of any person, except in the cause of a
default;
(6) In the event of default upon an Exempt Loan, the
value of the Trust Fund transferred in satisfaction of the
Exempt Loan shall not exceed the amount of default. If the
lender is a disqualified person, an Exempt Loan shall provide
for a transfer of Trust Funds upon default only upon and to the
extent of the failure of the Plan to meet the payment schedule
of the Exempt Loan; and
(7) Exempt Loan payments during a Plan Year must not
exceed an amount equal to: (A) the sum, over all Plan Years, of
all Employer contributions made by the Employer to the Plan with
respect to such Exempt Loan and earnings on such Employer
contributions, less (B) the sum of the Exempt Loan payments in
all preceding Plan Years. A separate accounting shall be
maintained for such Employer contributions and earnings until
the Exempt Loan is repaid.
(c) The term "disqualified person" means a person who is a
Fiduciary, a person providing services to the Plan, an Employer any of
whose Employees are covered by the Plan, an employee organization any of
whose members are covered by the Plan, an owner, direct or indirect, of
50% or more of the total combined voting power of all classes of voting
stock or of the total value of all classes of the stock, or an officer,
director, 10% or more shareholder, or a highly compensated Employee.
ARTICLE 6.
VALUATIONS
6.1 Valuation of the Trust Fund
The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date," to determine the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date" prior to taking into
consideration any contribution to be allocated for that Plan Year. In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund. The Administrator shall have the duty of
determining the fair market value (or sometimes referred to as "value") of
Company Stock.
For purposes of Section 5.2, 7.11 and this Section, valuations must be
made in good faith and based on all relevant factors for determining the fair
market value of securities. In the case of a transaction between a Plan and a
disqualified person, value must be determined as of the date of the transaction.
For all other Plan purposes, value must be determined as of the most recent
valuation date under the Plan. An independent appraisal will not in itself be a
good faith determination of value in the case of a transaction between the Plan
and a disqualified person. However, in other cases, a determination of fair
market value based on at least an annual appraisal independently arrived at by a
person who customarily makes such appraisals and who
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is independent of any party to the transaction will be deemed to be a good faith
determination of value.
6.2 Annual Statement
The Administrator shall, as soon as possible after each Anniversary
Date, but in any event no later than two hundred ten (210) days thereafter,
furnish each Participant with a written statement showing as of the Anniversary
Date and in comparative form for the prior Plan Year:
(a) The balance in each of his accounts as of the preceding
Anniversary Date.
(b) The amount of Employer contributions and Forfeitures
allocated to his accounts for the Plan Year.
(c) The adjustment to his accounts to reflect his share of
any dividends and the income and expenses of the Trust Fund for the Plan
Year.
(d) The new balances in each of his accounts, including the
number of shares of Company Stock.
(e) Such other information as may be required under the Act,
the Code and regulations thereunder.
ARTICLE 7.
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 Determination of Benefits upon Retirement
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. Upon such Normal
Retirement Date, all amounts credited to such Participant's Account shall become
distributable. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan shall continue until his Late Retirement Date.
Upon a Participant's Retirement Date, or as soon thereafter as is practicable,
the Trustee shall distribute all amounts credited to such Participant's Account
in accordance with Sections 7.5 and 7.6.
7.2 Determination of Benefits upon Death
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited to
such Participant's Account shall become fully Vested. On or before the
Anniversary Date coinciding with or next following such death, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 7.5 and 7.6, to distribute the value of the
deceased Participant's Account to the Participant's Beneficiary.
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(b) On or before the Anniversary Date coinciding with or
next following the death of a Former Participant, the Trustee, in
accordance with the provisions of Sections 7.5 and 7.6, shall distribute
any remaining amounts credited to the account of such deceased Former
Participant to such Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be taken
into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant as
the Administrator may deem desirable. The Administrator's determination
of death and of the right of any person to receive payment shall be
conclusive.
(e) The Beneficiary of the death benefit payable pursuant to
this Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived her right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant
has a court order to such effect (and there is no "qualified
domestic relations order" as defined in Code Section 414(p)
which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on
a form satisfactory to the Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by
filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again consent in
writing to any such change or revocation. In the event no valid
designation of Beneficiary exists at the time of the Participant's
death, the death benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge the
effect of such waiver, and be witnessed by a Plan representative or a
notary public. Further, the spouse's consent must be irrevocable and
must acknowledge the specific nonspouse Beneficiary.
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7.3 Determination of Benefits in Event of Disability
In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or separation from service, all amounts credited to such
Participant's Account shall become fully Vested. On or before the Anniversary
Date coinciding with or next following the event of Total and Permanent
Disability, the Trustee, in accordance with the provisions of Sections 7.5 and
7.6, shall distribute to such Participant all amounts credited to such
Participant's Account as though he had retired.
7.4 Determination of Benefits upon Termination
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any
reason other than death, Total and Permanent Disability or retirement,
the Administrator may direct the Trustee to segregate the amount of the
Vested portion of such Terminated Participant's Account and invest the
aggregate amount thereof in a separate, federally insured savings
account, certificate of deposit, common or collective trust fund of a
bank or a deferred annuity. In the event the Vested portion of a
Participant's Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and share in allocations
per Section 4.5 until such time as a distribution is made to the
Terminated Participant. The amount of the Terminated Participant's
Account which is not Vested shall be credited to the Suspense Account
(which will always share in gains and losses of the trust) and shall,
subsequently, be allocated to the accounts of the remaining Participants
in accordance with the terms of the Plan at such time as the amount
becomes a Forfeiture.
If a portion of a Participant's Account is forfeited, Company
Stock allocated to such account must be forfeited only after the Other
Investment Account has been depleted. If interest in more than one class
of Company Stock has been allocated to a Participant's Account, the
Participant must be treated as forfeiting the same proportion of each
such class.
Distribution of the funds due to a Terminated Participant shall
be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Total and Permanent
Disability, Early or Normal Retirement). However, at the discretion of
the Administrator, but subject to Section 7.5(i), the Administrator may
direct the Trustee to cause the entire Vested portion of the Terminated
Participant's Account to be payable to such Terminated Participant.
Terminated Participants who are under the age of fifty-five (55)
at the time of termination may elect distribution of all or part of the
Vested portion of their Participant's Account. The distribution will be
made as soon as administratively possible after the end of the calendar
quarter of termination. If the total amount of the vested portion of the
Participant's Account does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, distribution will
automatically be made at the time of termination.
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(b) Effective April 1, 1997, each active Participant shall
immediately become fully Vested in his Account. Each other Participant
shall become fully Vested in his Account immediately upon entry into the
Plan.
(c) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Article. In the event
that the Plan is amended to change or modify any vesting schedule, a
Participant with at least three (3) Years of Service as of the
expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice
of the amendment from the Employer or Administrator.
(1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if
such termination had not occurred.
(2) If any Former Participant shall be reemployed by
the Employer before five (5) consecutive 1-Year Breaks in
Service, and such Former Participant had received a distribution
of his entire Vested interest prior to his reemployment, his
forfeited account shall be reinstated only if he repays the full
amount distributed to him before the earlier of five (5) years
after the first date on which the Participant is subsequently
reemployed by the Employer or the close of the first period of
five (5) consecutive 1-Year Breaks in Service commencing after
the distribution. In the event the Former Participant does repay
the full amount distributed to him, the undistributed portion of
the Participant's Account must be restored in full, unadjusted
by any gains or losses occurring subsequent to the Anniversary
Date or other valuation date preceding his termination. The
source for such reinstatement shall first be any Forfeitures
occurring during the year. If such source is insufficient, then
the Employer shall contribute an amount which is sufficient to
restore any such forfeited Accounts.
(3) If any Former Participant is reemployed after a
1-Year Break in Service has occurred, Years of Service shall
include Years of Service prior to his 1-Year Break in Service
subject to the following rules:
(i) If a Former Participant has a 1-Year
Break in Service, his pre-break and post-break service
shall be used for computing Years of
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Service for eligibility and for vesting purposes only
after he has been employed for one (1) Year of Service
following the date of his reemployment with the
Employer;
(ii) Each non-vested Former Participant shall
lose credits otherwise allowable under (i) above if his
consecutive 1-Year Breaks in Service equal five (5);
(iii) After five (5) consecutive 1-Year Breaks
in Service, a Former Participant's Vested Account
balance attributable to pre-break service shall not be
increased as a result of post-break service;
(iv) If a Former Participant who has not had
his Years of Service before a 1-Year Break in Service
disregarded pursuant to (ii) above completes one (1)
Year of Service for eligibility purposes following his
reemployment with the Employer, he shall participate in
the Plan retroactively from his date of reemployment;
(v) If a Former Participant who has not had
his Years of Service before a 1-Year Break in Service
disregarded pursuant to (ii) above completes a Year of
Service (a 1-Year Break in Service previously occurred,
but employment had not terminated), he shall participate
in the Plan retroactively from the first day of the Plan
Year during which he completes one (1) Year of Service.
7.5 Distribution of Benefits
(a) The Administrator, in accordance with the Participant's
or Beneficiary's election, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is entitled under
the Plan in one or more of the following methods: (i) one lump-sum
payment in cash or in property; (ii) payments over a period certain in
monthly, quarterly, semiannual or annual cash installments after first
having (A) segregated the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate or other liquid
short-term security or (B) purchased a nontransferable annuity contract
providing for such payment. The period over which such payment is to be
made shall not extend beyond the Participant's life expectancy (or the
life expectancy of the Participant and his designated Beneficiary). If
the Participant's entire interest is to be distributed in other than a
lump sum, then the amount to be distributed each year must be at least
an amount equal to the quotient obtained by dividing the Participant's
entire interest by the life expectancy of the Participant or the joint
and last survivor expectancy of the Participant and his designated
Beneficiary.
(b) Notwithstanding anything herein to the contrary, the
Administrator may, unless the Participant elects (with the consent of
the Participant's spouse) a later distribution date, commence
distribution of the Participant's Company Stock Account
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balance not later than one year after the close of the Plan Year (i) in
which the Participant separates from service on account of retirement or
death, or (ii) which is the fifth Plan Year following the Plan Year in
which the Participant otherwise separates from service; provided,
however, any Company Stock allocated to a Participant's Company Stock
Account purchased by means of an Exempt Loan, may not be distributed
until after such Exempt Loan is repaid in full.
(c) The distribution of a Participant's benefits may not
commence prior to the later of the Participant's Normal Retirement Age
or age 62 if the Vested portion of the Participant's Account exceeds or
has ever exceeded $3,500 at the time of any prior distribution, unless
the distribution is consented to in writing by the Participant and his
spouse or, if the Participant is deceased, the Participant's surviving
spouse. With regard to this required consent:
(1) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
distribution of any benefit. However, any election to defer the
receipt of benefits shall not apply with respect to
distributions which are required under Section 7.5(e).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no more
than 90 days before the first day on which all events have
occurred which entitle the Participant to such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the Participant receives
the notice and must not be made more than 90 days before the
first day on which all events have occurred which entitle the
Participant to such benefit.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who does
not consent to the distribution.
(d) Subject to Sections 7.5(e) and 7.5(h), upon termination
of employment by retirement or otherwise, a Participant may direct that
his benefit remain in the Plan in the form of Company Stock until such
time as the Participant requests a distribution. Any part of a
Participant's benefit which is retained in the Plan after the
Anniversary Date on which his participation ends will continue to be
treated as an Elective Account, Matching Contribution Account, Employee
After-Tax Account, Company Stock Account, Rollover Account or as an
Other Investments Account, as the case may be, as provided in Article 4.
However, none of such accounts will be credited with any further
Participant or Employer contributions or Forfeitures.
(e) Notwithstanding any provision in the Plan to the
contrary, effective January 1, 1997, the distribution of a Participant's
benefits shall be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder (including Regulation Section 1.401(a)(9)-2):
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(1) A Participant's benefits shall be distributed to
him not later than April 1st of the calendar year following the
later of (i) the calendar year in which the Participant attains
age 702 or (ii) the calendar year in which the Participant
retires, provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a "five (5) percent
owner" with respect to the Plan Year ending in the calendar year
in which he attains age 702. Alternatively, distributions to a
Participant must begin no later than the applicable April 1st as
determined under the preceding sentence and must be made over
the life expectancy of the Participant (or the life expectancies
of the Participant and his designated Beneficiary) in accordance
with Regulations.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning prior to
1989, distributions may also be made under an alternative method
which provides that the then present value of the payments to be
made over the period of the Participant's life expectancy
exceeds fifty percent (50%) of the then present value of the
total payments to be made to the Participant and his
Beneficiaries.
(f) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder. If it is
determined pursuant to Regulations that the distribution of a
Participant's interest has begun and the Participant dies before his
entire interest has been distributed to him, the remaining portion of
such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 7.5 as of his date
of death. If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before distributions are
deemed to have begun pursuant to Regulations, then his death benefit
shall be distributed to his Beneficiaries by December 31st of the
calendar year in which the fifth anniversary of his date of death
occurs.
However, the 5-year distribution requirement of the preceding
paragraph shall not apply to any portion of the deceased Participant's
interest which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion may, at the election of the
Participant (or the Participant's designated Beneficiary) be distributed
over a period not extending beyond the life expectancy of such
designated Beneficiary provided such distribution begins not later than
December 31st of the calendar year immediately following the calendar
year in which the Participant died. Except, however, in the event the
Participant's spouse (determined as of the date of the Participant's
death) is his Beneficiary, the requirement that distributions commence
within one year of a Participant's death shall not apply. In lieu
thereof, distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the calendar
year in which the Participant died; or (2) December 31st of the calendar
year in
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which the Participant would have attained age 702. If the surviving
spouse dies before the distributions to such spouse begin, then the
5-year distribution requirement of this Section shall apply as if the
spouse were the Participant.
(g) For purposes of Section 7.5(f), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement must be made no later than December 31st of the calendar
year following the calendar year of the Participant's death. Except,
however, with respect to a designated Beneficiary who is the
Participant's surviving spouse, the election must be made by the earlier
of: (1) December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later, the calendar
year in which the Participant would have attained age 702; or (2)
December 31st of the calendar year which contains the fifth anniversary
of the date of the Participant's death. An election by a designated
Beneficiary must be in writing and shall be irrevocable as of the last
day of the election period stated herein. In the absence of an election
by the Participant or a designated Beneficiary, the 5-year distribution
requirement shall apply.
(h) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in accordance
with such rules as may be prescribed by Treasury regulations. The
election, once made, shall be irrevocable. If no election is made by the
time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Further, life expectancy and joint and last survivor
expectancy shall be computed using the return multiples of Regulation
1.72-9.
(i) Except as limited by Sections 7.5 and 7.6, whenever the
Trustee is to make a distribution on or as of an Anniversary Date, the
distribution may be made or begun on such date or as soon thereafter as
is practicable. However, unless a Participant elects in writing to defer
the receipt of benefits (such election may not result in a death benefit
that is more than incidental), the payment of benefits will begin not
later than the 60th day after the close of the Plan Year in which the
latest of the following events occurs:
(1) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified under
the Plan,
(2) the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the date the Participant terminates his service
with the Employer.
7.6 How Plan Benefit will be Distributed
(a) Distribution of a Participant's Company Stock Account
may be made in cash or Company Stock or both, provided, however, that if
a Participant or Beneficiary so demands, such Company Stock Account
shall be distributed only in the form of Company
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Stock. Prior to making a distribution of benefits, the Administrator shall
advise the Participant or his Beneficiary, in writing, of the right to demand
that his Company Stock Account be distributed solely in Company Stock. If the
Participant or his Beneficiary fails to make such demand in writing within 90
days after receipt of such written notice, the Administrator shall direct the
Trustee to make such distribution in such form as the Administrator, in his sole
discretion, shall determine.
(b) If a Participant or Beneficiary demands that his Company
Stock Account be distributed solely in Company Stock, distribution of a
Participant's Company Stock Account will be made entirely in whole
shares or other units of Company Stock. Any fractional unit value
unexpended will be distributed in cash. If Company Stock is not
available for purchase by the Trustee, then the Trustee shall hold such
balance until Company Stock is acquired and then make such distribution.
If the Trustee is unable to purchase the Company Stock required for
distribution, he shall make distribution in cash within one (1) year
after the date the distribution was to be made, except in the case of a
retirement distribution which shall be made within sixty (60) days after
the close of the Plan Year in which a Participant's retirement occurs.
(c) The Trustee will make distribution from the Trust only
on instructions from the Administrator.
(d) Notwithstanding anything contained herein to the
contrary, if the Employer's charter or by-laws restrict ownership of
substantially all shares of Company Stock to Employees and the Trust
Fund, as described in Code Section 409(h)(2), the distribution of a
Participant's Company Stock Account may be made entirely in cash without
granting the Participant the right to demand distribution in shares of
Company Stock.
(e) Except as otherwise provided herein, Company Stock
distributed by the Trustee may be restricted as to sale or transfer by
the by-laws or articles of incorporation of the Employer, provided
restrictions are applicable to all Company Stock of the same class. If a
Participant is required to offer the sale of his Company Stock to the
Employer before offering to sell his Company Stock to a third party, in
no event may the Employer pay a price less than that offered to the
distributed by another potential buyer making a bona fide offer and in
no event shall the Trustee pay a price less than the fair market value
of the Company Stock.
(f) Except as otherwise provided in this Plan, a Participant
is not entitled to any payment, withdrawal or distribution under the
Plan during his participation. If any such partial distribution is made,
the Participant's benefit when computed will be reduced by the amount of
any such advance.
(g) If Company Stock acquired with the proceeds of an Exempt
Loan (described in Section 5.3 hereof) is available for distribution and
consists of more than one class, a Participant or his Beneficiary to
whom a distribution of such Company Stock is being made must receive
substantially the same proportion of each class.
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7.7 Distribution for Minor Beneficiary
In the event a distribution is to be made to a minor, then the
Administrator may, in the Administrator's sole discretion, direct that such
distribution be paid to the legal guardian, or if none, to a parent of such
Beneficiary or a responsible adult with whom the Beneficiary maintains his
residence, or to the custodian for such Beneficiary under the Uniform Gift to
Minors Act or Gift to Minors Act, if such is permitted by the laws of the state
in which said Beneficiary resides. Such a payment to the legal guardian or
parent of a minor Beneficiary shall fully discharge the Trustee, Employer, and
Plan from further liability on account thereof.
7.8 Location of Participant or Beneficiary Unknown
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the expiration of five (5)
years after it shall become payable, remain unpaid solely by reason of the
inability of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further diligent effort,
to ascertain the whereabouts of such Participant or his Beneficiary, the amount
so distributable shall be reallocated in the same manner as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
7.9 Right of First Refusals
(a) If any Participant, his Beneficiary or any other person
to whom shares of Company Stock are distributed from the Plan (the
"Selling Participant") shall, at any time, desire to sell some or all of
such shares (the "Offered Shares") to a third party (the "Third Party"),
the Selling Participant shall give written notice of such desire to the
Employer and the Administrator, which notice shall contain the number of
shares offered for sale, the proposed terms of the sale and the names
and addresses of both the Selling Participant and Third Party. Both the
Trust Fund and the Employer shall each have the right of first refusal
for a period of fourteen (14) days from the date the Selling Participant
gives such written notice to the Employer and the Administrator (such
fourteen (14) day period to run concurrently against the Trust Fund and
the Employer) to acquire the Offered Shares. As between the Trust Fund
and the Employer, the Trust Fund shall have priority to acquire the
shares pursuant to the right of first refusal. The selling price and
terms shall be the same as offered by the Third Party.
(b) If the Trust Fund and the Employer do not exercise their
right of first refusal within the required fourteen (14) day period
provided above, the Selling Participant shall have the right, at any
time following the expiration of such fourteen (14) day period, to
dispose of the Offered Shares to the Third Party; provided, however,
that (i) no disposition shall be made to the Third Party on terms more
favorable to the Third Party than those set forth in the written notice
delivered by the Selling Participant above, and (ii) if such disposition
shall not be made to a third party on the terms offered to the Employer
and the Trust Fund, the offered Shares shall again be subject to the
right of first refusal set forth above.
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(c) The closing pursuant to the exercise of the right of
first refusal under Section 7.9(a) above shall take place at such place
agreed upon between the Administrator and the Selling Participant, but
not later than ten (10) days after the Employer or the Trust Fund shall
have notified the Selling Participant of the exercise of the right of
first refusal. At such closing, the Selling Participant shall deliver
certificates representing the Offered Shares duly endorsed in blank for
transfer, or with stock powers attached duly executed in blank with all
required transfer tax stamps attached or provided for, and the Employer
or the Trust Fund shall deliver the purchase price, or an appropriate
portion thereof, to the Selling Participant.
(d) Except as provided in this Paragraph (d), no Company
Stock acquired with the proceeds of an Exempt Loan complying with the
requirements of Section 5.3 hereof shall be subject to a right of first
refusal. Company Stock, which is acquired with the proceeds of an Exempt
Loan which is distributed to a Participant or Beneficiary shall be
subject to the right of first refusal, provided for in Paragraph (a) of
this Section only so long as the Company Stock is not publicly traded.
The term "publicly traded" refers to a securities exchange registered
under Section 6 of the Securities Exchange Act of 1934 (the "1934 Act")
(15 U.S.C. 78f) or that is quoted on a system sponsored by a national
securities association registered under Section l5A(b) of the 1934 Act
(15 U.S.C. 780). In addition, in the case of Company Stock which was
acquired with the proceeds of a loan described in Section 5.3, the
selling price and other terms under the right must not be less favorable
to the seller than the greater of the value of the security determined
under 26 CFR 54.4975-11(d)(5), or the purchase price and other terms
offered by a buyer (other than the Employer or the Trust Fund), making a
good faith offer to purchase the security. The right of first refusal
must lapse no later than fourteen (14) days after the security holder
gives notice to the holder of the right that an offer by a third party
to purchase the security has been made. The right of first refusal shall
comply with the provisions of Paragraphs (a), (b) and (c) of this
Section, except to the extent those provisions may conflict with the
provisions of this paragraph.
7.10 Stock Certificate Legend
Certificates for shares distributed pursuant to the Plan shall contain
the following legend:
"The shares represented by this certificate are transferable
only upon compliance with the terms of the RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN (Amended and Restated as of April 1, 1997),
which grants to Randalls Food Markets, Inc. and the Trust Fund, a right
of first refusal, a copy of said Plan being on file in the office of the
Company."
7.11 Put Option
(a) If Company Stock which was not acquired with the
proceeds of an Exempt Loan is distributed to a Participant and such
Company Stock is not readily tradable on an established securities
market, a Participant has a right to require the Employer to repurchase
the Company Stock distributed to such Participant under a fair valuation
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formula, as required by the Revenue Act of 1978. Such Stock shall be
subject to the provisions of Section 7.11(c), except to the extent the
provisions of 7.11(c) may conflict with any applicable regulations
promulgated under the Revenue Act of 1978.
(b) Company Stock which is acquired with the proceeds of an
Exempt Loan and which is not publicly traded when distributed, or if it
is subject to a trading limitation when distributed, must be subject to
a put option. For purposes of this paragraph, a "trading limitation" on
a Company Stock is a restriction under any Federal or State securities
law or any regulation thereunder, or an agreement (not prohibited by
Section 7.12) affecting the Company Stock which would make the Company
Stock not as freely tradeable as stock not subject to such restriction.
(c) The put option must be exercisable only by a
Participant, by the Participant's donees, or by a person (including an
estate or its distributee) to whom the Company Stock passes by reason of
a Participant's death. (Under this paragraph "Participant" means a
Participant and the Beneficiaries of the Participant under the Plan.)
The put option must permit a Participant to put the Company Stock to the
Employer. Under no circumstances may the put option bind the Plan. If it
is known at the time a loan is made that Federal or State law will be
violated by the Employer's honoring such put option, the put option must
permit the Company Stock to be put, in a manner consistent with such
law, to a third party (e.g., an affiliate of the Employer or a
shareholder other than the Plan) that has substantial net worth at the
time the loan is made and whose net worth is reasonably expected to
remain substantial.
The put option shall commence as of the day following the date
the Company Stock is distributed to the former Participant and end 60
days thereafter and if not exercised within such 60-day period, an
additional 60-day option shall commence on the first day of the fifth
month of the Plan Year next following the date the stock was distributed
to the former Participant (or such other 60-day period as provided in
regulations promulgated by the Secretary of the Treasury). However, in
the case of Company Stock that is publicly traded without restrictions
when distributed but ceases to be so traded within either of the 60-day
periods described herein after distribution, the Employer must notify
each holder of such Company Stock in writing on or before the tenth day
after the date the Company Stock ceases to be so traded that for the
remainder of the applicable 60-day period the Company Stock is subject
to the put option. The number of days between the tenth day and the date
on which notice is actually given, if later than the tenth day, must be
added to the duration of the put option. The notice must inform
distributees of the term of the put options that they are to hold. The
terms must satisfy the requirements of this paragraph.
The put option is exercised by the holder notifying the Employer
in writing that the put option is being exercised; the notice shall
state the name and address of the holder and the number of shares to be
sold. The period during which a put option is exercisable does not
include any time when a distributee is unable to exercise it because the
party bound by the put option is prohibited from honoring it by
applicable Federal or State law.
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The price at which a put option must be exercisable is the value of the
Company Stock determined in accordance with Paragraph (d)(5) of 26 CFR
54.4975-11. The provisions for payment under the put option shall not
exceed a 60 day period from the exercise date of the put option.
(d) An arrangement involving the Plan that creates a put
option must not provide for the issuance of put options other than as
provided under this Section. The Plan (and the Trust Fund) must not
otherwise obligate itself to acquire Company Stock from a particular
holder thereof at an indefinite time determined upon the happening of an
event such as the death of the holder.
7.12 Nonterminable Protections and Rights
Except as provided in Section 7.9 and Section 7.11, no Company Stock
acquired with the proceeds of a loan described in Section 5.3 hereof may be
subject to a put, call, or other option, or buy-sell or similar arrangement when
held by and when distributed from the Trust Fund, whether or not the Plan is
then an ESOP. The protections and rights granted in this Section and in Section
7.9 and Section 7.11 are nonterminable, and such protections and rights shall
continue to exist under the terms of this Plan so long as any Company Stock
acquired with the proceeds of a loan described in Section 5.3 hereof is held by
the Trust Fund or by any Participant or other person for whose benefit such
protections and rights have been created, and neither the repayment of such loan
nor the failure of the Plan to be an ESOP, nor an amendment of the Plan shall
cause a termination of said protections and rights.
7.13 Withdrawals from Employee After-Tax Account
During the last month of any calendar quarter of any calendar year, a
Participant may request that the Administrator distribute to him or her up to
100% of the value, determined as of the end of such calendar quarter, of the
Participant's Employee After-Tax Account. The Administrator upon receiving such
request may direct the Trustee to make the requested distribution to the
Participant. Distribution payments to a Participant will be made as soon as
administratively possible after the quarter in which the distribution request is
made.
7.14 Hardship Withdrawals
(a) A Participant may at any time file with the
Administrator an appropriate written request for a hardship withdrawal
in either a dollar amount or a percentage figure from his Elective
Account. A Participant may withdraw up to the lesser of 100% of his
Elective Account valued as of the last Anniversary Date or other
valuation date or the amount necessary to satisfy the immediate and
heavy financial need of the Participant. Notwithstanding the foregoing,
however, no Participant may withdraw any income of the Trust Fund
allocated to his Elective Account. Any distribution made pursuant to
this Section shall be deemed to be made as of the first day of the Plan
Year or, if later, the valuation date immediately preceding the date of
distribution, and the Participant's Elective Account shall be reduced
accordingly. The determination of whether an immediate and heavy
financial need exists shall be based on all relevant facts and
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circumstances including, but not limited to, any amounts necessary to
pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution. A need shall not be
disqualified because it was reasonably foreseeable or voluntarily
incurred. Withdrawal under this Section shall be authorized if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the Participant, his
spouse, or any of his dependents (as defined in Code Section
152) or necessary for these persons to obtain medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (including mortgage
payments);
(3) Funeral expenses for a member of the
Participant's immediate family;
(4) Payment of tuition and related educational fees
for the next twelve (12) months of post-secondary education for
the Participant, his spouse, children or dependents; or
(5) Payments necessary to prevent the eviction of
the Participant from his principal residence or foreclosure on
the mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section
unless the Administrator determines, based upon all relevant facts and
circumstances, that the amount to be distributed is not in excess of the
amount required to relieve the financial need and that such need cannot
be satisfied from other resources reasonably available to the
Participant. For this purpose, the Participant's resources shall be
deemed to include those assets of his spouse and minor children that are
reasonably available to the Participant. A distribution may be treated
as necessary to satisfy a financial need if the Administrator relies on
the Participant's representation that the 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 increase
the amount of such need;
(3) By cessation of elective deferrals under the
Plan; or
(4) By other distributions or loans from the Plan or
any other qualified retirement plan, or by borrowing from
commercial sources on reasonable commercial terms, to the extent
such amounts would not themselves increase the amount of the
need.
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(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be limited
solely to the Participant's total Deferred Compensation as of the date
of distribution, reduced by the amount of any previous distribution
pursuant to this Section.
(d) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the provisions
of Section 7.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and the Regulations thereunder.
7.15 Participant Loans
A Participant may make application to the Administrator to borrow from
his Account (not including his Employee After-Tax Account or his Company Stock
Account), and the Administrator in its sole discretion may permit such a loan.
Loans shall be granted in a uniform and nondiscriminatory manner on terms and
conditions determined by the Administrator which shall not result in more
favorable treatment of highly compensated employees and shall be set forth in
written procedures promulgated by the Administrator in accordance with
applicable governmental regulations. All such loans shall also be subject to the
following terms and conditions:
(a) The amount of the loan when added to the amount of any
outstanding loan or loans to the Participant from any other plan of the
Employer or an Affiliated Employer which is qualified under Code Section
401(a) shall not exceed the lesser of (i) $50,000, reduced by the
excess, if any, of the highest outstanding balance of loans from all
such plans during the one-year period ending on the day before the date
on which such loan was made over the outstanding balance of loans from
the Plan on the date on which such loan was made or (ii) fifty percent
(50%) of the present value of the Participant's Vested Account balance
under the Plan. In no event shall a loan of less than $500 or more than
$50,000 be made to a Participant. A Participant may not have more than
one (1) loan outstanding at a time under this Plan.
(b) The loan shall be for a term not to exceed five (5)
years, unless the loan is used to acquire any dwelling unit which within
a reasonable time is to be used as a principal residence of the
Participant. The loan shall be evidenced by a note signed by the
Participant. The loan shall be payable in periodic installments and
shall bear interest at a reasonable rate which shall be determined by
the Administrator on a uniform and consistent basis and set forth in the
procedures in accordance with applicable governmental regulations.
Payments by a Participant who is an Employee will be made by means of
payroll deduction from the Participant's compensation. If the
Participant is not receiving compensation from the Employer, the loan
repayment shall be made in accordance with the terms and procedures
established by the Administrator. A Participant may repay an outstanding
loan in full at any time.
(c) In the event an installment payment is not paid within
seven (7) days following the monthly due date, the Administrator shall
give written notice to the
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Participant sent to his last known address. If such installment payment
is not made within thirty (30) days thereafter, the Administrator shall
proceed with foreclosure in order to collect the full remaining loan
balance or shall make such other arrangements with the Participant as
the Administrator deems appropriate. Foreclosures need not be effected
until occurrence of a distributable event under the terms of the Plan
and no rights against the Participant or the security shall be deemed
waived by the Plan as a result of such delay.
(d) The unpaid balance of the loan, together with interest
thereon, shall become due and payable upon the date of distribution of
the Account and the Trustee shall first satisfy the indebtedness from
the amount payable to the Participant or to the Participant's
Beneficiary before making any payments to the Participant or to the
Beneficiary.
(e) Any loan to a Participant under the Plan shall be
adequately secured. Such security shall include a pledge of a portion of
the Participant's right, title and interest in the Trust Fund which
shall not exceed fifty percent (50%) of the present value of the
Participant's Vested Account balance under the Plan as determined
immediately after the loan is extended. Such pledge shall be evidenced
by the execution of a promissory note by the Participant which shall
grant the security interest and provide that, in the event of any
default by the Participant on a loan repayment, the Administrator shall
be authorized to take any and all appropriate lawful actions necessary
to enforce collection of the unpaid loan.
(f) A request by a Participant for a loan shall be made in
writing to the Administrator and shall specify the amount of the loan.
If a Participant's request for a loan is approved by the Administrator,
the Administrator shall furnish the Trustee with written instructions
directing the Trustee to make the loan in a lump-sum payment of cash to
the Participant. The cash for such payment shall be obtained by
redeeming proportionately as of the date of payment the Investment Fund
or Funds, or portions thereof, that are credited to the particular
Account of such Participant.
(g) A loan to a Participant shall be considered an
investment of the separate Account(s) of the Participant from which the
loan is made. All loan repayments shall be credited pro rata to such
separate Account(s) and reinvested exclusively in shares of one or more
of the Investment Funds in accordance with Section 4.13.
7.16 Qualified Domestic Relations Order Distribution
All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate payee"
under a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
separated from service and has not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the meaning
set forth under Code Section 414(p).
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7.17 Payment of Distribution Directly to Eligible Retirement Plan
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
(b) For purposes of this Section, the following definitions
shall apply:
(1) Eligible Rollover Distribution. An Eligible
Rollover Distribution is any distribution of all or any portion
of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(2) Eligible Retirement Plan. An Eligible Retirement
Plan is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described
in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(3) Distributee. A Distributee includes an Employee
or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(4) Direct Rollover: A Direct Rollover is a payment
by the Plan to the Eligible Retirement Plan specified by the
Distributee.
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ARTICLE 8.
TRUSTEE
8.1 Basic Responsibilities of the Trustee
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer and delivered to the Trustee, to invest,
manage, and control the Plan assets subject, however, to the direction
of the Administrator or an Investment Manager if the Employer or
Administrator should appoint such manager as to all or a portion of the
assets of the Plan in accordance with the provisions of Section 2.3(c);
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event of
their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Fiscal Year a
written annual report;
(d) If there shall be more than one Trustee, they shall act
by a majority of their number, but may authorize one or more of them to
sign papers on their behalf.
8.2 Voting Company Stock
Except as provided hereafter, the Trustee shall vote all Company Stock
held by the Trust in the sole discretion of the Trustee in accordance with the
Trustee's fiduciary duties under the Act. Notwithstanding the foregoing, if the
Employer has a "registration-type class of securities," each Participant or
Beneficiary, if applicable, shall be entitled to direct the Trustee as to the
manner in which shares of Company Stock which are entitled to vote and which are
allocated to such Participant's (or Beneficiary's, if applicable) Company Stock
Account or Employee After-Tax Account are to be voted. If the Employer does not
have a registration-type class of securities, each Participant or Beneficiary,
if applicable, shall be entitled to direct the Trustee as to the manner in which
shares of Company Stock allocated to such Participant's (or Beneficiary's, if
applicable) Company Stock Account or Employee After-Tax Account are to be voted
with respect to any corporate matter which involves the voting of such shares
with respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business, or such similar
transaction as prescribed in the Regulations. For purposes of this Section 8.2,
the term "registration-type class of securities" shall mean (i) a class of
securities required to be registered under Section 12 of the Securities Exchange
Act of 1934 (the "1934 Act") and (ii) a class of securities which would be
required to be so registered except for the exemption from registration provided
in subsection (g)(2)(H) of such Section 12. To the extent that Participants or
Beneficiaries are, in accordance with the foregoing provisions, entitled to
direct the Trustee as to the manner in which shares of Company Stock are to be
voted, such voting rights shall be exercised in accordance with the following
provisions of this Section 8.2.
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(a) As soon as practicable before each annual or special
shareholders' meeting of the Employer, the Trustee shall furnish to each
Participant a copy of the proxy solicitation material sent generally to
shareholders, together with a form requesting confidential directions on
how the shares allocated to such Participant's Company Stock Account and
Employee After-Tax Account (including fractional shares to 1/1000th of a
share) are to be voted. The materials furnished to the Participants
shall include a notice from the Trustee explaining that (i) allocated
shares of Company Stock will be voted or not voted by the Trustee in
accordance with directions of Participants, acting in their capacity as
"named fiduciaries" as such term is defined in section 402(a)(2) of the
Act (hereinafter, "Named Fiduciaries") with respect to allocated shares
to the extent permitted by applicable law, if the Trustee determines
that following such directions will not violate the Act; (ii)
unallocated shares of Company Stock will be voted at the Trustee's
discretion; (iii) by timely returning the proxy solicitation and
pursuant thereto specifically directing the Trustee how the allocated
shares subject to the decision of the Participant are to be voted, such
Participant is consenting to his appointment as Named Fiduciary
hereunder, to the extent permitted by applicable law, with respect to
allocated shares for which he is entitled to provide the Trustee with
voting directions; (iv) a Participant's consent to appointment as a
Named Fiduciary or failure to consent to such appointment shall be
binding only with respect to the specific proxy solicitations; and (v)
in the event the Participant does not timely return the form or fails to
consent to appointment as a Named Fiduciary, the allocated shares for
which he is entitled to provide the Trustee with directions will be
voted at the Trustee's discretion. The materials shall also include such
information as is reasonably determined by the Trustee to be necessary
to Participants to reach a reasonably informed decision as to (A) the
consequences of consenting to be appointed a Named Fiduciary, and (B)
how to vote the shares. The Administrator and the Trustee may also
provide Participants with such other material concerning the matters to
be voted as the Trustee or the Administrator in its discretion determine
to be appropriate, provided, however, that prior to any distribution of
materials by the Administrator, the Trustee shall be furnished with
complete copies of all such materials. The Employer and the
Administrator shall cooperate with the Trustee to ensure that
Participants receive the requisite information in a timely manner. Upon
timely receipt of such voting directions, the Trustee (after combining
votes of fractional shares to give effect to the greatest extent to
Participants' directions), shall vote the shares in accordance with
subsections (b) through (e) of this Section 8.2. The directions received
by the Trustee from Participants shall be held by the Trustee in strict
confidence and shall not be divulged or released to any person,
including directors, officers or employees of the Employer, or of any
other company, except as otherwise required by law.
(b) With respect to all corporate matters submitted to
shareholders, the Trustee shall vote shares of Company Stock allocated
to the Company Stock Account and the Employee After-Tax Account of any
Participant (including fractional shares to 1/1000th of a share) in
accordance with the directions of such Participant as a Named Fiduciary
only if the Trustee determines that the Participant directions are
proper and not contrary to the Act. For purposes of this subsection, a
Participant's directions with respect to allocated shares are proper and
not contrary to the Act if (i) the Trustee
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determines that Participants have not been subjected to coercion or
undue pressure in making their decisions and that clearly false
information or misleading information is not distributed to the
Participants (or that any false or misleading information that may have
been distributed by other parties is corrected), and (ii) the Trustee
determines that following the Participant directions would not violate
the Act.
(c) If voting directions for shares of Company Stock
allocated to the Company Stock Account and the Employee After-Tax
Account of any Participant are not timely received by the Trustee, the
Trustee shall treat the non-receipt as a refusal by the Participant to
be appointed as Named Fiduciary with respect to that proxy solicitation.
Thereafter, in connection with such proxy solicitation, such allocated
and undirected shares shall be voted in the sole discretion of the
Trustee in accordance with the Trustee's fiduciary duties under the Act.
(d) The Trustee shall vote shares of Company Stock that are
unallocated to the Company Stock Account or the Employee After-Tax
Account of any Participant in the sole discretion of the Trustee in
accordance with the Trustee's fiduciary duties under the Act.
(e) For purposes of this Section 8.2, with respect to shares
of Company Stock allocated to the Company Stock Account and the Employee
After-Tax Account of a deceased Participant, such Participant's
Beneficiary, as a Named Fiduciary, shall be entitled to direct the
Trustee how to vote such shares as if such Beneficiary were the
Participant. Such Beneficiary shall also be treated as the Participant
for all other purposes of this Section 8.2.
8.3 Tender or Exchange Offer for Company Stock
(a) In the event an offer shall be received by the Trustee
(including a tender offer for shares of Company Stock subject to Section
14(d)(1) of the 1934 Act or subject to Rule 13e-4 promulgated under the
1934 Act, as those provisions may from time to time be amended) to
purchase or exchange any shares of Company Stock held by the Trust, the
Trustee shall advise each Participant who has shares of Company Stock
credited to such Participant's Company Stock Account and Employee
After-Tax Account in writing of the terms of the offer as soon as
practicable after its commencement and shall furnish each Participant
with a form by which he may direct the Trustee confidentially whether or
not to tender or exchange shares allocated to such Participant's Company
Stock Account and Employee After-Tax Account. The materials furnished to
Participants shall include a notice from the Trustee explaining that (i)
allocated shares of Company Stock subject to the offer will be tendered
or exchanged or will not be tendered or exchanged by the Trustee in
accordance with directions of Participants, acting in their capacity as
Named Fiduciaries with respect to allocated shares to the extent
permitted by applicable law, if the Trustee determines that following
such directions will not violate the Act; (ii) unallocated shares of
Company Stock subject to the offer will be tendered or exchanged or will
not be tendered or exchanged by the Trustee at the Trustee's discretion;
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(iii) by timely returning the form and pursuant thereto specifically
directing that the allocated shares subject to the decision of the
Participant either be tendered or exchanged or not tendered or
exchanged, such Participant is consenting to his appointment as Named
Fiduciary hereunder, to the extent permitted by applicable law, with
respect to allocated shares for which he is entitled to provide the
Trustee with directions; (iv) a Participant's consent to appointment as
a Named Fiduciary or failure to consent to such appointment shall be
binding only with respect to the specific tender or exchange offer
described in the materials sent to the Participant by the Trustee; and
(v) in the event the Participant does not timely return the form or
fails to consent to appointment as a Named Fiduciary, the allocated
shares for which he is entitled to provide the Trustee with directions
will either be tendered or exchanged or not tendered or exchanged at the
Trustee's discretion. The materials shall also include such information
as is reasonably determined by the Trustee to be necessary to
Participants to reach a reasonably informed decision as to (A) the
consequences of consenting or not consenting to be appointed a Named
Fiduciary, and (B) whether to tender or exchange, including such
documents as are prepared by any person and provided to the shareholders
of the Employer pursuant to the 1934 Act. The Administrator and the
Trustee may also provide Participants with such other material
concerning the tender or exchange offer as the Trustee or the
Administrator in its discretion determine to be appropriate, provided,
however, that prior to any distribution of materials by the
Administrator, the Trustee shall be furnished with complete copies of
all such materials. The Employer and the Administrator shall cooperate
with the Trustee to ensure that Participants receive the requisite
information in a timely manner. The directions received by the Trustee
from Participants shall be held by the Trustee in strict confidence and
shall not be divulged or released to any person, including directors,
officers or employees of the Employer, or of any other company, except
as otherwise required by law.
(b) The Trustee shall tender or not tender shares or
exchange or not exchange shares of Company Stock allocated to the
Company Stock Account and the Employee After-Tax Account of any
Participant (including fractional shares to 1/1000th of a share) to the
extent directed by the Participant as a Named Fiduciary only if the
Trustee determines that the Participant directions are proper and not
contrary to the Act. For purposes of this subsection, a Participant's
directions with respect to allocated shares are proper and not contrary
to the Act if (i) the Trustee determines that Participants have not been
subjected to coercion or undue pressure in making their decisions and
that clearly false information or misleading information is not
distributed to the Participants (or that any false or misleading
information that may have been distributed by other parties is
corrected), and (ii) the Trustee determines that following the
Participant directions would not violate the Act.
(c) If tender or exchange directions for shares of Company
Stock allocated to the Company Stock Account and the Employee After-Tax
Account of any Participant are not timely received by the Trustee, the
Trustee shall treat the non-receipt as a refusal by the Participant to
be appointed as Named Fiduciary with respect to that tender or exchange
offer. Thereafter, in connection with such tender or exchange offer,
such
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allocated and undirected shares shall be tendered or exchanged or not
tendered or exchanged in the sole discretion of the Trustee in
accordance with the Trustee's fiduciary duties under the Act.
(d) The Trustee shall tender or exchange or not tender or
exchange the shares of Company Stock that are unallocated to the Company
Stock Account or the Employee After-Tax Account of any Participant in
the sole discretion of the Trustee in accordance with the Trustee's
fiduciary duties under the Act.
(e) In the event, under the terms of a tender offer or
otherwise, any shares of Company Stock tendered for sale, exchange or
transfer pursuant to such offer may be withdrawn from such offer, the
Trustee shall, in accordance with the applicable terms and conditions of
subsections (a) through (d) above, and the responsibilities and the
fiduciary duties of the Trustee as set forth in such subsections, follow
such directions which are timely received by the Trustee from the
Participants, respecting the withdrawal of such shares from such offer.
(f) In the event that an offer for fewer than all of the
shares of Company Stock held by the Trustee shall be received by the
Trustee, shares shall be tendered in accordance with subsections (a)
through (e) of this Section 8.3, and shares sold, exchanged or
transferred pursuant to such tender shall be on a pro-rata basis based
on the total number of shares tendered by the Trustee; provided,
however, that any such shares so sold, exchanged, or transferred from
any Participant's accounts shall come first from such Participant's
Employee After-Tax Account, and once all shares from such account have
been sold, exchanged or transferred, next from such Participant's
Company Stock Account.
(g) In the event an offer shall be received by the Trustee
and directions shall be solicited from Participants pursuant to
subsections (a)-(f) of this Section 8.3 regarding such offer, and prior
to the termination of such offer, another offer is received by the
Trustee for the securities subject to the first offer, the Trustee shall
treat the offer as a new offer for purposes of apprising Participants of
their rights to direct the Trustee and for purposes of providing
Participants with the opportunity to accept or reject their appointment
as Named Fiduciaries and shall use its best efforts under the
circumstances to solicit directions from Participants to the Trustee (i)
with respect to securities tendered for sale, exchange or transfer
pursuant to the first offer, whether to withdraw such tender, if
possible, and if withdrawn, whether to tender any securities so
withdrawn for sale, exchange or transfer pursuant to the second offer
and (ii) with respect to securities not tendered for sale, exchange or
transfer pursuant to the first offer, whether to tender or not to tender
such securities for sale, exchange or transfer pursuant to the second
offer. The Trustee shall follow all such directions received in a timely
manner from Participants in the same manner and in the same proportion
as provided in subsections (a)-(f) of this Section 8.3. In the event a
Participant who failed to consent to his appointment as a Named
Fiduciary so consents in response to a subsequent offer, the shares with
respect to which the Participant would have been entitled to direct the
Trustee shall once again be
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subject to that consenting Participant's direction with respect to the
new offer. In the event a Participant who directed the Trustee with
respect to an earlier offer fails to direct the Trustee in response to a
subsequent offer, the Participant shall be deemed to have refused
appointment as a Named Fiduciary and the allocated shares he would have
been entitled to direct shall be subject to the discretion of the
Trustee as provided in subsection (c) of this Section 8.3. With respect
to any further offer for any Company Stock received by the Trustee and
subject to any earlier offer (including successive offers from one or
more existing offerors), the Trustee shall act in the same manner as
described above.
(h) Neither a Participant's instructions to the Trustee to
tender or exchange shares of Company Stock pursuant to this Section 8.3
nor an actual tender or exchange of shares of Company Stock pursuant to
this Section 8.3 shall be deemed a withdrawal or suspension from the
Plan or a forfeiture of any portion of the Participant's interest in the
Plan. Funds received in exchange for tendered shares shall be credited
to the Employee After-Tax Account and/or the Company Stock Account, as
applicable in accordance with the ordering method provided in Section
8.3(f), of the Participant whose shares were tendered or the Suspense
Account for which such shares were tendered. The Trustee shall invest
such funds as permitted in accordance with the terms of the Plan and the
Trust Agreement.
(i) The Trustee shall take all steps necessary, including
the appointment of a corporate Trustee, and/or an outside independent
administrator to the extent that such action, after consultation with
the Employer and the Administrator, is found necessary to maintain the
confidentiality of Participant responses and/or adequately discharge
their obligations as Named Fiduciaries.
(j) For purposes of this Section 8.3, with respect to shares
of Company Stock allocated to the Company Stock Account and the Employee
After-Tax Account of a deceased Participant, such Participant's
Beneficiary, as a Named Fiduciary, shall be entitled to direct the
Trustee whether or not to tender or exchange such shares as if such
Beneficiary were the Participant. Such Beneficiary shall also be treated
as the Participant for all other purposes of this Section 8.3.
ARTICLE 9.
AMENDMENT, TERMINATION, AND MERGERS
9.1 Amendment
The Employer shall have the right at any time to amend the Plan.
However, no such amendment shall authorize or permit any part of the Trust Fund
(other than such part as is required to pay taxes and administration expenses)
to be used for or diverted to purposes other than for the exclusive benefit of
the Participants or their Beneficiaries or estates; no such amendment shall
cause any reduction in the amount credited to the account of any Participant or
cause or permit any portion of the Trust Fund to revert to or become the
property of the Employer; and no such amendment which affects the rights, duties
or responsibilities of the Trustee and Administrator may be made without the
Trustee's and Administrator's written
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consent. Any such amendment shall become effective as provided therein upon its
execution. The Trustee shall not be required to execute any such amendment
unless the Trust provisions contained herein are a part of the Plan and the
amendment affects the duties of the Trustee hereunder.
In addition, no such amendment shall have the effect of terminating the
protections and rights set forth in Section 7.12, unless such termination shall
then be permitted under the applicable provisions of the Code and Treasury
Regulations; such a termination is currently expressly prohibited by Section
54.4975-11(a)(3)(ii) of the Treasury Regulations.
For the purposes of this Section, a Plan amendment which has the effect
of eliminating or reducing an early retirement benefit or eliminating an
optional form of benefit (as provided in Treasury regulations) shall be treated
as reducing the amount credited to the account of a Participant.
9.2 Termination
The Employer shall have the right at any time to terminate the Plan by
delivering to the Trustee and Administrator written notice of such termination.
A complete discontinuance of the Employer's contributions to the Plan shall be
deemed to constitute a termination. Upon any termination (full or partial) or
complete discontinuance of contributions, all amounts credited to the affected
Participants' Accounts shall become 100% Vested and shall not thereafter be
subject to forfeiture and all unallocated amounts shall be allocated to the
accounts of all Participants in accordance with the provisions hereof. Upon such
termination of the Plan, the Employer, by written notice to the Trustee and
Administrator, may direct either:
(a) complete distribution of the assets in the Trust Fund to
the Participants, in cash or in kind, in one "qualified total
distribution" (as such term is defined in the Code) as soon as the
Trustee deems it to be in the best interests of the Participants; or,
(b) continuation of the Trust created by this agreement and
the distribution of benefits at such time and in such manner as though
the Plan had not been terminated.
9.3 Merger or Consolidation
This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other Plan and Trust only if the
benefits which would by a Participant of this Plan, in the event of a
termination of the Plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation.
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ARTICLE 10.
MISCELLANEOUS
10.1 Participant's Rights
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
10.2 Alienation
(a) Subject to the exceptions provided below, no benefit
which shall be payable out of the Trust Fund to any person (including a
Participant or his Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, for any reason,
under any provision of the Plan. At the time a distribution is to be
made to or for a Participant's or Beneficiary's benefit, such proportion
of the amount distributed as shall equal such indebtedness shall be paid
by the Trustee to the Trustee or the Administrator, at the direction of
the Administrator, to apply against or discharge such indebtedness.
Prior to making a payment, however, the Participant or Beneficiary must
be given written notice by the Administrator that such indebtedness is
to be so paid in whole or part from his Participant's Account. If the
Participant or Beneficiary does not agree that the indebtedness is a
valid claim against his Vested Participant's Account, he shall be
entitled to a review of the validity of the claim in accordance with
procedures provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of 1984.
The Administrator shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the extent
provided under a "qualified domestic relations order," a former spouse
of a Participant shall be treated as the spouse or surviving spouse for
all purposes under the Plan.
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<PAGE> 74
10.3 Construction of Plan
This Plan and Trust shall be construed and enforced according to the Act
and the laws of the State of Texas, other than its laws respecting choice of
law, to the extent not preempted by the Act.
10.4 Gender and Number
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
10.5 Legal Action
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they shall be entitled to be reimbursed
from the Trust Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become liable.
10.6 Prohibition Against Diversion of Funds
Except as provided below and otherwise specifically permitted by law, it
shall be impossible by operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the happening of any
contingency, by collateral arrangement or by any other means, for any part of
the corpus or income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants, or their
Beneficiaries.
10.7 Return of Funds
(a) Notwithstanding anything herein to the contrary, if,
pursuant to an application filed by or in behalf of the Plan, the
Commissioner of Internal Revenue Service or his delegate should
determine that the Plan does not initially qualify as a tax-exempt plan
and trust under Sections 401 and 501 of the Code, and such determination
is not contested, or if contested, is finally upheld, then the Plan
shall be void ab initio and all amounts contributed to the Plan by the
Employer, less expenses paid, shall be returned within one year and the
Plan shall terminate, and the Trustee shall be discharged from all
further obligations.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 4.2(c), any contribution by the Employer to the
Trust Fund is conditioned upon the deductibility of the contribution by
the Employer under the Code and, to the extent any such deduction is
disallowed, the Employer may within one (1) year following a final
determination of the disallowance, whether by agreement with the
Internal Revenue
73
<PAGE> 75
Service or by final decision of a court of competent jurisdiction,
demand repayment of such disallowed contribution and the Trustee shall
return such contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution may not be
returned to the Employer, but any losses attributable thereto must
reduce the amount so returned.
(c) In the event the Employer shall make an excessive or
erroneous contribution under a mistake of fact pursuant to Section
403(c)(2)(A) of the Act, the Employer may demand repayment of such
excessive or erroneous contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount
to the Employer within the one (1) year period. Earnings of the Plan
attributable to the excess or erroneous contributions may not be
returned to the Employer but any losses attributable thereto must reduce
the amount so returned.
10.8 Bonding
Every Fiduciary, except a bank or an insurance company, unless exempted
by the Act and regulations thereunder, shall be bonded in an amount not less
than 10% 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. 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 Section 412(a)(2) of the Act), 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 Administrator, be paid from the Trust Fund or by the Employer.
10.9 Employer's and Trustee's Protective Clause
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
10.10 Insurer's Protective Clause
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
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10.11 Receipt and Release for Payments
Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
10.12 Action by the Employer
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.13 Named Fiduciaries and Allocation of Responsibility
The "Named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee and (4) any Investment Manager appointed
hereunder. The Named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the sole authority
to appoint and remove the Trustee, the Administrator, and any Investment Manager
which may be provided for under the Plan; to formulate the Plan's "funding
policy and method"; and to amend or terminate, in whole or in part, the Plan.
The Administrator shall have the sole responsibility for the administration of
the Plan, which responsibility is specifically described in the Plan. The
Trustee shall have the sole responsibility of management of the assets held
under the Trust, except those assets, the management of which has been assigned
to an Investment Manager, who shall be solely responsible for the management of
the assets assigned to it, all as specifically provided in the Plan. Each Named
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 Named
Fiduciary may rely upon any such direction, information or action of another
Named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or action.
It is intended under the Plan that each Named Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under the Plan. No Named Fiduciary shall guarantee the Trust Fund in any manner
against investment loss or depreciation in asset value. Any person or group may
serve in more than one Fiduciary capacity.
10.14 Headings
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
75
<PAGE> 77
10.15 Uniformity
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
10.16 Securities and Exchange Commission Approval
The Company may request an interpretative letter from the Securities and
Exchange Commission stating that the transfers of Company Stock contemplated
hereunder do not involve transactions requiring a registration of such Company
Stock under the Securities Act of 1933. In the event that a favorable
interpretative letter is not obtained, the Employer reserves the right to amend
the Plan and Trust retroactively to their effective dates in order to obtain a
favorable interpretative letter or to terminate the Plan.
10.17 Indemnification
Neither the Employer, any of its officers or directors, the
Administrator nor the Trustee shall be personally liable for any action or
inaction with respect to any duty or responsibility imposed upon such person by
the terms of the Plan, unless such action or inaction is judicially determined
to be a breach of that person's fiduciary responsibility with respect to the
Plan under any applicable law. The Employer may indemnify or purchase insurance
to underwrite indemnity for the Administrator and/or the Employer's board of
directors against any personal liability or expense except for his own gross
negligence.
ARTICLE 11.
PARTICIPATING EMPLOYERS
11.1 Adoption by Other Employers
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any other corporation or entity, whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
11.2 Requirements of Participating Employers
(a) Each such Participating Employer shall be required to
use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or
a Participating Employer, shall not affect such Participant's rights
under the Plan, and all amounts credited to such
76
<PAGE> 78
Participant's Account as well as his accumulated service time with the
transferor or predecessor, and his length of participation in the Plan,
shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall insure only to the benefit of the Employee-Participants
of the Participating Employer by which the forfeiting Participant was
employed.
(e) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the
credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
11.3 Designation of Agent
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent. Unless
the context of the Plan clearly indicates the contrary, the word "Employer"
shall be deemed to include each Participating Employer as related to its
adoption of the Plan.
11.4 Employee Transfers
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
11.5 Participating Employer's Contribution
All contributions made by a Participating Employer, as provided for in
this Plan, shall be determined separately on the basis of its total Compensation
paid, and shall be paid to and held by the Trustee for the exclusive benefit of
the Employees of the Participating Employer and the Beneficiaries of such
Employees, subject to all the terms and conditions of this Plan. Any Forfeiture
by an Employee of a Participating Employer subject to allocation during each
Plan Year shall be allocated for the benefit of all Participants of the Plan in
accordance with the provisions of this Plan.
11.6 Amendment
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each and
every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
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<PAGE> 79
11.7 Discontinuance of Participation
Any Participating Employer shall be permitted to discontinue or revoke
its participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter upon
receiving written direction from the Administrator transfer, deliver and assign
Contracts and other Trust Fund assets allocable to the Participants of such
Participating Employer to such new Trustee as shall have been designated by such
Participating Employer, in the event that it has established a separate pension
plan for its Employees. If no successor is designated, the Trustee shall retain
such assets for the Employees of said Participating Employer pursuant to the
provisions of Article VII hereof. In no such event shall any part of the corpus
or income of the Trust as it relates to such Participating Employer be used for
or diverted for purposes other than for the exclusive benefit of the Employees
of such Participating Employer.
11.8 Administrator's Authority
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
11.9 Participating Employer Contribution for Affiliate
If any Participating Employer is prevented in whole or in part from
making a contribution to the Trust Fund which it would otherwise have made under
the Plan by reason of having no current or accumulated earnings or profits, or
because such earnings or profits are less than the contribution which it would
otherwise have made, then, pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented from making may
be made, for the benefit of the participating employees of such Participating
Employer, by the other Participating Employers who are members of the same
affiliated group within the meaning of Code Section 1504 to the extent of their
current or accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the proportion of its
total current and accumulated earnings or profits remaining after adjustment for
its contribution to the Plan made without regard to this paragraph which the
total prevented contribution bears to the total current and accumulated earnings
or profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not reimburse the contributing Participating
Employers.
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<PAGE> 80
IN WITNESS WHEREOF, this Plan has been executed this 1st day of April,
1997 to be effective as of the day and year first above written.
RANDALLS FOOD MARKETS, INC.
By: /s/ Janice R. Schilmoeller
-------------------------------------
Name: JANICE R. SCHILMOELLER
-----------------------------------
Title: Vice President of Risk Management
----------------------------------
Consented to:
RANDALLS FOOD MARKETS, INC.
EMPLOYEE BENEFITS COMMITTEE
By: /s/ Janice R. Schilmoeller
-------------------------------------
Name: JANICE R. SCHILMOELLER
-----------------------------------
For the Administrator
79
<PAGE> 81
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS.......................................................................2
ARTICLE 2. TOP HEAVY AND ADMINISTRATION.....................................................14
2.1 TOP HEAVY PLAN REQUIREMENTS.........................................................14
2.2 DETERMINATION OF TOP HEAVY STATUS...................................................14
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.........................................17
2.4 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY..............................18
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES.......................................18
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR..............................................18
2.7 RECORDS AND REPORTS.................................................................19
2.8 APPOINTMENT OF ADVISERS.............................................................19
2.9 INFORMATION FROM EMPLOYER...........................................................19
2.10 PAYMENT OF EXPENSES...............................................................20
2.11 MAJORITY ACTIONS..................................................................20
2.12 CLAIMS PROCEDURE..................................................................20
2.13 CLAIMS REVIEW PROCEDURE...........................................................20
ARTICLE 3. ELIGIBILITY......................................................................21
3.1 CONDITIONS OF ELIGIBILITY...........................................................21
3.2 APPLICATION FOR PARTICIPATION.......................................................21
3.3 EFFECTIVE DATE OF PARTICIPATION.....................................................21
3.4 DETERMINATION OF ELIGIBILITY........................................................21
3.5 TERMINATION OF ELIGIBILITY..........................................................21
ARTICLE 4. CONTRIBUTION AND ALLOCATION......................................................22
4.1 EMPLOYER CONTRIBUTION...............................................................22
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION.............................................22
4.3 AMOUNT OF EMPLOYER'S CONTRIBUTION...................................................25
4.4 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION..........................................25
4.5 ALLOCATION OF CONTRIBUTION, EARNINGS AND FORFEITURES................................25
4.6 ACTUAL DEFERRAL PERCENTAGE TESTS....................................................29
4.7 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS......................................31
4.8 MAXIMUM CONTRIBUTION PERCENTAGE - SECTION 401(M) TEST...............................34
4.9 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS..................................36
4.10 MAXIMUM ANNUAL ADDITIONS..........................................................38
4.11 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.........................................42
4.12 TRANSFERS AND ROLLOVERS FROM OTHER QUALIFIED PLANS................................43
4.13 DIRECTED INVESTMENT ACCOUNT.......................................................45
ARTICLE 5. FUNDING AND INVESTMENT POLICY....................................................46
5.1 APPLICATION OF CASH.................................................................46
5.2 TRANSACTIONS INVOLVING COMPANY STOCK................................................46
5.3 LOANS TO THE TRUST..................................................................46
ARTICLE 6. VALUATIONS.......................................................................47
6.1 VALUATION OF THE TRUST FUND.........................................................47
6.2 ANNUAL STATEMENT....................................................................48
</TABLE>
i
<PAGE> 82
<TABLE>
<S> <C>
ARTICLE 7. DETERMINATION AND DISTRIBUTION OF BENEFITS.......................................48
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT...........................................48
7.2 DETERMINATION OF BENEFITS UPON DEATH................................................49
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY....................................50
7.4 DETERMINATION OF BENEFITS UPON TERMINATION..........................................50
7.5 DISTRIBUTION OF BENEFITS............................................................52
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED................................................56
7.7 DISTRIBUTION FOR MINOR BENEFICIARY..................................................57
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN......................................57
7.9 RIGHT OF FIRST REFUSALS.............................................................57
7.10 STOCK CERTIFICATE LEGEND..........................................................59
7.11 PUT OPTION........................................................................59
7.12 NONTERMINABLE PROTECTIONS AND RIGHTS..............................................60
7.13 WITHDRAWALS FROM EMPLOYEE AFTER-TAX ACCOUNT.......................................60
7.14 HARDSHIP WITHDRAWALS..............................................................61
7.15 PARTICIPANT LOANS.................................................................62
7.16 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION...................................64
7.17 PAYMENT OF DISTRIBUTION DIRECTLY TO ELIGIBLE RETIREMENT PLAN......................64
ARTICLE 8. TRUSTEE..........................................................................65
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE...............................................65
8.2 VOTING COMPANY STOCK................................................................65
8.3 TENDER OR EXCHANGE OFFER FOR COMPANY STOCK..........................................67
ARTICLE 9. AMENDMENT, TERMINATION, AND MERGERS..............................................71
9.1 AMENDMENT...........................................................................71
9.2 TERMINATION.........................................................................71
9.3 MERGER OR CONSOLIDATION.............................................................72
ARTICLE 10. MISCELLANEOUS...................................................................72
10.1 PARTICIPANT'S RIGHTS..............................................................72
10.2 ALIENATION........................................................................72
10.3 CONSTRUCTION OF PLAN..............................................................73
10.4 GENDER AND NUMBER.................................................................73
10.5 LEGAL ACTION......................................................................73
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS............................................73
10.7 RETURN OF FUNDS...................................................................73
10.8 BONDING...........................................................................74
10.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE........................................74
10.10 INSURER'S PROTECTIVE CLAUSE.......................................................75
10.11 RECEIPT AND RELEASE FOR PAYMENTS..................................................75
10.12 ACTION BY THE EMPLOYER............................................................75
10.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY................................75
10.14 HEADINGS..........................................................................76
10.15 UNIFORMITY........................................................................76
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL.......................................76
10.17 INDEMNIFICATION...................................................................76
ARTICLE 11. PARTICIPATING EMPLOYERS.........................................................76
11.1 ADOPTION BY OTHER EMPLOYERS.......................................................76
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS...........................................77
11.3 DESIGNATION OF AGENT..............................................................77
11.4 EMPLOYEE TRANSFERS................................................................77
</TABLE>
ii
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<TABLE>
<S> <C>
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION.............................................77
11.6 AMENDMENT.........................................................................78
11.7 DISCONTINUANCE OF PARTICIPATION...................................................78
11.8 ADMINISTRATOR'S AUTHORITY.........................................................78
11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE.................................78
</TABLE>
iii
<PAGE> 1
EXHIBIT 4.2
FIRST AMENDMENT TO THE RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN
(AMENDED AND RESTATED AS OF APRIL 1, 1997)
W I T N E S S E T H:
WHEREAS, Randalls Food Markets, Inc. (the "Employer") presently
maintains the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan (the "Plan");
and
WHEREAS, the Employer, pursuant to Section 9.1 of the Plan, has the
right to amend the Plan from time to time subject to certain limitations.
NOW, THEREFORE, in order to make various revisions desired by the
Employer, the Plan is hereby amended in the following manner:
1. Effective April 1, 1997, Section 1.33A is hereby added to the Plan as
follows:
1.33A "Income" means the income or losses allocable to "excess
amounts" which shall equal the sum of the allocable gain or loss for the
"applicable computation period" and the allocable gain or loss for the
period between the "applicable computation period" and the date of
distribution ("gap period"). The income allocable to "excess amounts"
for the "applicable computation period" and the "gap period" is
calculated separately and is determined by multiplying the income for
the "applicable computation period" or the "gap period" by a fraction.
The numerator of the fraction is the "excess amount" for the "applicable
computation period". The denominator of the fraction is the total
"account balance" attributable to "Employer contributions" as of the end
of the "applicable computation period" or the "gap period", reduced by
the gain allocable to such total amount for the "applicable computation
period" or the "gap period" and increased by the loss allocable to such
total amount for the "applicable computation period" or the "gap
period." The provisions of this Section shall be applied:
(a) For purposes of Section 4.2(g), by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the participant" for "applicable
computation period";
(3) "Deferred Compensation" for "Employer contributions"; and
(4) "Participant's Elective Account" for "account balance."
(b) For purposes of Section 4.7(a), by substituting:
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
<PAGE> 2
(3) "Elective Contributions" for "Employer contributions"; and
(4) "Participant's Elective Account" for "account balance."
(c) For purposes of Section 4.9(a), by substituting:
(1) "Excess Aggregate Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Matching Contributions made pursuant to Section 4.1(a)(2)
and any qualified non-elective contributions or elective deferrals
taken into account pursuant to Section 4.8(c)" for "Employer
contributions"; and
(4) "Matching Contribution Account" for "account balance."
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period."
Under the "safe harbor method," allocable Income for the "gap period" shall be
deemed to equal ten percent (10%) of the Income allocable to "excess amounts"
for the "applicable computation period" multiplied by the number of calendar
months in the "gap period." For purposes of determining the number of calendar
months in the "gap period," a distribution occurring 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 occurring after such fifteenth day shall be
treated as having been made on the first day of the next subsequent month.
Effective April 1, 1997, Sections 4.2(g), 4.7(a), 4.9(a) and 4.9(b) are
hereby amended by changing all references to "income" therein to "Income."
IN WITNESS WHEREOF, the Employer has executed this First Amendment to
the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan on this 10th day of
May, 1997.
RANDALLS FOOD MARKETS, INC.
By: /s/ Janice R. Schilmoeller
_____________________________________
Name: JANICE R. SCHILMOELLER
___________________________________
Title: Vice President of Risk Management
__________________________________
2
<PAGE> 1
EXHIBIT 4.3
SECOND AMENDMENT TO THE RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN
(Amended and Restated as of April 1, 1997)
W I T N E S S E T H:
WHEREAS, Randalls Food Markets, Inc. (the "Employer") presently
maintains the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan (the "Plan");
and
WHEREAS, the Plan represents the amendment and restatement of the
Randalls Food Markets, Inc. Employee Stock Ownership Plan (the "ESOP"); and
WHEREAS, the ESOP applied for a determination from the Internal Revenue
Service ("IRS") with respect to the ESOP's qualified status prior to the
restatement of the ESOP; and
WHEREAS, after the restatement of the ESOP, the IRS issued a favorable
determination with respect to the ESOP subject to the adoption of certain
amendments to the ESOP; and
WHEREAS, the Employer adopted the amendments to the ESOP required by the
IRS; and
WHEREAS, the Employer, pursuant to Section 9.1 of the Plan, has the
right to amend the Plan from time to time subject to certain limitations.
NOW, THEREFORE, in order to incorporate the amendments required by the
IRS with respect to the ESOP into the Plan, the Plan is hereby amended in the
following manner:
1. Effective June 25, 1989, Section 1.10 is hereby amended in its
entirety to read as follows:
1.10 "Compensation" shall mean a Participant's wages for the Plan
Year within the meaning of Code Section 3401(a) (for the purposes of
income tax withholding at the source) but determined without regard to
any rules that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401(a)(2)). For
purposes of this Section, the determination of Compensation shall be
made by excluding bonuses and including amounts which are contributed by
the Employer pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code Sections
125, 402(e)(3), 402(h)(1)(B), 403(b) or 457, and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions.
Compensation shall be recognized as of an Employee's effective date
of participation pursuant to Section 3.3.
Compensation in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year and the first
<PAGE> 2
adjustment to the $200,000 limitation shall be effective on January 1,
1990. For any short Plan Year the Compensation limit shall be an amount
equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of
full months in the short Plan Year by twelve (12). For Plan Years
beginning prior to January 1, 1997, in applying this limitation, the
family group of a Highly Compensated Participant who is subject to the
Family Member aggregation rules of Code Section 414(q)(6) because such
participant is either a "five-percent owner" of the Employer or one of
the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, shall be treated as a single participant,
except that for this purpose Family Members shall include only the
affected participant's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the year. If, as a result
of the application of such rules the adjusted $200,000 limitation is
exceeded, then the limitation shall be prorated among the affected
Family Members in proportion to each such Family Member's Compensation
prior to the application of this limitation, or the limitation shall be
adjusted in accordance with any other method permitted by Regulations.
"Family Member" means, with respect to an affected Employee, such
Employee's spouse, such Employee's lineal descendants and ascendants and
their spouses, all as described in Code Section 414(q)(6)(B).
For Plan Years beginning prior to January 1, 1997, if, as a
result of such rules, the maximum "annual addition" limit of Section
4.10(a) would be exceeded for one or more of the affected Family
Members, the prorated Compensation of all affected Family Members shall
be adjusted to avoid or reduce any excess. The prorated Compensation of
any affected Family Members whose allocation would exceed the limit
shall be adjusted downward to the level needed to provide an allocation
equal to such limit. The prorated Compensation of affected Family
Members not affected by such limit shall then be adjusted upward on a
pro rata basis not to exceed each such affected Family Member's
Compensation as determined prior to application of the Family Member
rule. The resulting allocation shall not exceed such individual's
maximum "annual addition" limit. If, after these adjustments, an "excess
amount" still results, such "excess amount" shall be disposed of in the
manner described in Section 4.11(a) pro rata among all affected Family
Members.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, the annual Compensation of each Employee taken into account
under the Plan shall not exceed the "OBRA `93 Annual Compensation
Limit." The "OBRA `93 Annual Compensation Limit" is $150,000, as
adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined ("Determination Period") beginning in such
calendar year. If a Determination Period consists of fewer than 12
months, the "OBRA `93 Annual Compensation Limit" will be multiplied by a
fraction, the numerator of which is the number of months in the
Determination Period, and the denominator of which is 12.
Any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean the "OBRA `93 Annual Compensation Limit" set forth
in this Section.
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<PAGE> 3
If Compensation for any prior Determination Period is taken into
account in determining a Participant's benefits accruing in the current
Plan Year, the Compensation for that prior Determination Period is
subject to the "OBRA `93 Annual Compensation Limit" in effect for that
prior Determination Period. For this purpose, for Determination Periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the "OBRA `93 Annual Compensation Limit" is
$150,000.
2. Effective June 25, 1989, Section 1.31 is hereby amended in its
entirety to read as follows:
1.31 "Highly Compensated Employee" means any Employee or former
Employee who is a highly compensated employee as defined in Code Section
414(q) and the Regulations thereunder. Generally, any Employee or former
Employee is considered a Highly Compensated Employee if such Employee or
former Employee performed services for the Employer during the
"determination year" and is one or more of the following groups:
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners."
"Five-percent owner" means any person who owns (or is considered
as owning within the meaning of Code Section 318) more than five
percent of the outstanding stock of the Employer or stock
possessing more than five percent of the total combined voting
power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five
percent of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and
(o) shall be treated as separate employers.
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000. In
determining whether an individual has "415 Compensation" of more
than $75,000, "415 Compensation" from each employer required to
be aggregated under Code Sections 414(b), (c), (m) and (o) shall
be taken into account.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were
in the top-paid group of Employees for the Plan Year. An Employee
is in the top-paid group of Employees for any year if such
Employee is in the group consisting of the top twenty (20)
percent of the Employees when ranked on the basis of "415
Compensation" paid during the year. For the purpose of
determining the number of Employees in the top-paid group, (a)
Employees with less than six (6) months of service; (b) Employees
who normally work less than 172 hours per week; (c) Employees who
normally work less than six (6) months during a year; (d)
Employees who have not yet attained age 21; and (e) except to the
extent provided in Regulations, Employees who are included in a
unit of Employees covered by a collective bargaining agreement
between employee representatives and the Employer shall be
excluded. In determining whether an individual has
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<PAGE> 4
"415 Compensation" of more than $50,000, "415 Compensation" from
each employer required to be aggregated under Code Section
414(b), (c), (m) and (o) shall be taken into account.
(d) Employees who during the "look-back year" were
officers as defined in Section 1.36(a) and received "415
Compensation" during the "look-back year" from the Employer
greater than 50 percent of the limit in effect under Code Section
415(b)(1)(A) for any such Plan Year. The number of officers shall
be limited to the lesser of (i) 50 employees; or (ii) the greater
of 3 employees or 10 percent of all employees. For the purpose of
determining the number of officers, the Employees excluded in
paragraph (c) above for purposes of determining the top-paid
group shall be excluded. However, such Employees shall still be
considered for the purpose of identifying the particular
Employees who are officers. If the Employer does not have at
least one officer whose annual "415 Compensation" is in excess of
50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a Highly
Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d)
above when these paragraphs are modified to substitute
"determination year" for "look-back year."
The "look-back year" shall be the calendar year ending with or
within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if
any, which extends beyond the "look-back year" and ends on the last day
of the Plan Year for which testing is being performed (the "lag
period"). If the "lag period" is less than twelve months long, the
threshold amounts specified in (b), (c) and (d) above shall be prorated
based upon the number of months in the "lag period."
Notwithstanding the foregoing, for Plan Years beginning after
December 31, 1996, "Highly Compensated Employee" shall mean any Employee
who is in one or more of the following groups:
(a) Employees who at any time during the Plan Year being
tested or the prior Plan Year were "five-percent owners."
(b) Employees who, during the prior Plan Year:
(i) received "415 Compensation" in excess of
$80,000 (or such other amount as determined by the
Secretary of the Treasury which reflects cost-of-living
increases in accordance with Code Section 414(q)(1)), and
(ii) if the Employer elects the application of this
clause (2) for the prior Plan Year, was in the top-paid
group of employees for the prior Plan Year.
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<PAGE> 5
A former Employee shall be treated as a Highly Compensated
Employee if (1) such former Employee was a Highly Compensated Employee
when he separated from Service or (2) such former Employee was a Highly
Compensated Employee at any time after attaining age fifty-five (55).
For purposes of this Section, the determination of "415
Compensation" shall be based only on "415 Compensation" which is
actually paid and shall be made by including amounts that would
otherwise be excluded from a Participant's gross income by reason of the
application of Code Sections 125, 402(e)(3), 402(h)(1)(B) and, in the
case of Employer contributions made pursuant to a salary reduction
agreement, by including amounts that would otherwise be excluded from a
participant's gross income by reason of the application of Code Section
403(b). Additionally, the $75,000 and $50,000 amounts specified in (b)
and (c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the dollar
limits which shall be applied are those for the calendar year in which
the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within
the meaning of Code Section 911(d)(2)) from the Employer constituting
United States source income within the meaning of Code Section 861(a)(3)
shall not be treated as Employees. Additionally, all Employers shall be
taken into account as a single employer and leased employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such leased employees are covered by a plan described
in Code Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. The exclusion of leased employees for this
purpose shall be applied on a uniform and consistent basis for all of
the Employer's retirement plans.
For Plan Years beginning prior to January 1, 1997, if any
individual is a Family Member of a 5-percent owner or of a Highly
Compensated Employee in the group consisting of the ten (10) Highly
Compensated Employees paid the greatest compensation during the year,
then (i) such individual shall not be considered a separate employee,
and (ii) any compensation paid to such individual (and any applicable
contribution or benefit on behalf of such individual) shall be treated
as if it were paid to (or on behalf of) the 5-percent owner or Highly
Compensated Employee. Except as provided in Regulations, the rules of
this paragraph shall be applied in determining the compensation of (or
any contributions or benefits on behalf of) any employee for purposes of
any Section of this Plan with respect to which a Highly Compensated
Employee is defined by reference to this Section.
3. Effective June 24, 1986, Section 4.5(g) is hereby amended in its
entirety to read as follows:
(g) All Company Stock acquired by the Plan with the
proceeds of an Exempt Loan must be added to and maintained in the
Unallocated Company Stock Suspense Account. Such Company Stock
shall be released and withdrawn from that account as if all
Company Stock in that account were encumbered. For
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<PAGE> 6
each Plan Year during the duration of the loan, the number of
shares of Company Stock released shall equal the number of
encumbered shares held immediately before release for the current
Plan Year multiplied by a fraction, the numerator of which is the
amount of principal paid for the Plan Year and the denominator of
which is the sum of the numerator plus the principal to be paid
for all future Plan Years. The Exempt Loan must provide for
annual payments of principal and interest at a cumulative rate
that is not less rapid at any time than level annual payments of
such amounts for ten (10) years. Interest included in any payment
is disregarded for purposes of the fraction described above only
to the extent that it would be determined to be interest under
standard loan amortization tables. As of each Anniversary Date,
the Plan must consistently allocate to each Participant's Account
non-monetary units (shares and fractional shares of Company
Stock) representing each Participant's interest in assets
withdrawn from the Unallocated Company Stock Suspense Account.
Income earned with respect to Company Stock in the Unallocated
Company Stock Suspense Account shall be used to repay the Exempt
Loan used to purchase such Company Stock. Any income which is not
so used must be allocated as income of the Plan.
4. Effective June 25, 1989, Section 4.5(j) is hereby amended in its
entirety to read as follows:
(j) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the
sum of the Employer's contributions and Forfeitures allocated to
the Participant's Account of each Non-Key Employee shall be equal
to at least three percent (3%) of such Non-Key Employee's "415
Compensation." However, if (i) the sum of the Employer's
contributions and Forfeitures allocated to the Participant's
Account of each Key Employee for such Top Heavy Plan Year is less
than three percent (3%) of each Key Employee's "415 Compensation"
and (ii) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410, the sum of the
Employer's contributions and Forfeitures allocated to the
Participant's Account of each Non-Key Employee shall be equal to
the largest percentage allocated to the Participant's Account of
each Key Employee. However, for Plan Years beginning after
December 31, 1988, in determining whether a Non-Key Employee has
received the required minimum allocation, such Non-Key Employee's
deferred compensation and matching contributions needed to
satisfy the "Actual Contribution Percentage" tests pursuant to
Section 4.8 shall not be taken into account.
Except, however, no such minimum allocation shall be
required in this Plan for any Non-Key Employee who participates
in another defined contribution plan subject to Code Section 412
providing such benefits included with this Plan in a Required
Aggregation Group.
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<PAGE> 7
5. Effective June 28, 1987, Section 4.13(c) is hereby amended in its
entirety to read as follows:
(c) Each Qualified Participant who has not attained age
sixty (60) may elect within ninety (90) days after the end of
each calendar quarter or within ninety (90) days after the close
of each Plan Year during the Qualified Election Period to direct
the Trustee in writing as to the investment of 25 percent of the
Qualified Participant's Company Stock Account (to the extent such
portion exceeds the amount to which a prior election under this
subparagraph applies). Each Qualified Participant who has
attained age sixty (60) may elect within ninety (90) days after
the end of each calendar quarter or within ninety (90) days after
the close of each Plan Year during the Qualified Election Period
to direct the Trustee in writing as to the investment of up to
100 percent of the Qualified Participant's Company Stock Account
(to the extent such portion exceeds the amount to which a prior
election under this subparagraph applies). If the Qualified
Participant elects to direct the Trustee as to the investment of
his Company Stock Account, such direction shall be effective no
later than 180 days after the close of the Plan Year to which
such direction applies. In lieu of directing the Trustee as to
the investment of his Company Stock Account, the Qualified
Participant may elect a distribution in cash or Company Stock of
the portion of his Company Stock Account covered by the election
within ninety (90) days after the last day of the period during
which the election can be made. The Plan shall offer at least
three (3) investment options to each Qualified Participant making
an election under this paragraph.
6. Effective June 24, 1986, Section 7.4(a) is hereby amended in its
entirety to read as follows:
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for
any reason other than death, Total and Permanent Disability or
retirement, the Administrator may direct the Trustee to segregate
the amount of the Vested portion of such Terminated Participant's
Account and invest the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit, common
or collective trust fund of a bank or a deferred annuity. In the
event the Vested portion of a Participant's Account is not
segregated, the amount shall remain in a separate account for the
Terminated Participant and share in allocations per Section 4.5
until such time as a distribution is made to the Terminated
Participant. The amount of the Terminated Participant's Account
which is not Vested shall be credited to the Suspense Account
(which will always share in gains and losses of the trust) and
shall, subsequently, be allocated to the accounts of the
remaining Participants in accordance with the terms of the Plan
at such time as the amount becomes a Forfeiture.
If a portion of a Participant's Account is forfeited,
Company Stock allocated to such account must be forfeited only
after the Other Investment Account has been depleted. If interest
in more than one class of Company Stock
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<PAGE> 8
has been allocated to a Participant's Account, the Participant
must be treated as forfeiting the same proportion of each such
class.
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result in
the distribution had the Terminated Participant remained in the
employ of the Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement). However, if
such Terminated Participant is reemployed by the Employer before
distribution is required to be made under this paragraph, such
distribution shall be postponed. Distribution to a Participant
shall not include any Company Stock acquired after December 31,
1986 with the proceeds of an Exempt Loan until the close of the
Plan Year in which such loan is repaid in full. Any distribution
under this paragraph shall be made in a manner which is
consistent with and satisfies the provisions of Sections 7.5 and
7.6, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
If the value of a Terminated Participant's Vested benefit
derived from Employer and Employee contributions does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause
the entire Vested benefit to be paid to such Participant in a
single lump sum.
Terminated Participants who are under the age of
fifty-five (55) at the time of termination may elect distribution
of all or part of the Vested portion of their Participant's
Account. The distribution will be made as soon as
administratively possible after the end of the calendar quarter
of termination.
7. Effective June 24, 1986, Section 7.6(a) is hereby amended in its
entirety to read as follows:
(a) Distribution of a Participant's benefit may be made in
cash or Company Stock or both, provided, however, that if a
Participant or Beneficiary so demands, such benefit shall be
distributed only in the form of Company Stock. Prior to making a
distribution of benefits, the Administrator shall advise the
Participant or his Beneficiary, in writing, of the right to
demand that benefits be distributed solely in Company Stock. If
the Participant or his Beneficiary fails to make such demand in
writing within 90 days after receipt of such written notice, the
Administrator shall direct the Trustee to make such distribution
entirely in cash.
8. Effective June 24, 1986, Section 7.11(c) is hereby amended in its
entirety to read as follows:
(c) The put option must be exercisable only by a
Participant, by the Participant's donees, or by a person
(including an estate or its distributee) to whom the Company
Stock passes by reason of a Participant's death. (Under this
paragraph "Participant" means a Participant and the Beneficiaries
of the
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<PAGE> 9
Participant under the Plan.) The put option must permit a
Participant to put the Company Stock to the Employer. Under no
circumstances may the put option bind the Plan. However, it shall
grant the Plan an option to assume the rights and obligations of
the Employer at the time that the put option is exercised. If it
is known at the time a loan is made that Federal or State law
will be violated by the Employer's honoring such put option, the
put option must permit the Company Stock to be put, in a manner
consistent with such law, to a third party (e.g., an affiliate of
the Employer or a shareholder other than the Plan) that has
substantial net worth at the time the loan is made and whose net
worth is reasonably expected to remain substantial.
The put option shall commence as of the day following the
date the Company Stock is distributed to the former Participant
and end 60 days thereafter and if not exercised within such
60-day period, an additional 60-day option shall commence in the
Plan Year next following the date the stock was distributed to
the former Participant (or such other 60-day period as provided
in regulations promulgated by the Secretary of the Treasury). In
no event shall the second 60-day put option period end prior to
the date which is 15 months after the date of distribution.
However, in the case of Company Stock that is publicly traded
without restrictions when distributed but ceases to be so traded
within 15 months after distribution, the Employer must notify
each holder of such Company Stock in writing on or before the
tenth day after the date the Company Stock ceases to be so traded
that for the remainder of the 15-month period the Company Stock
is subject to the put option. The number of days between the
tenth day and the date on which notice is actually given, if
later than the tenth day, must be added to the duration of the
put option. The notice must inform distributees of the term of
the put options that they are to hold. The terms must satisfy the
requirements of this paragraph.
The put option is exercised by the holder notifying the
Employer in writing that the put option is being exercised; the
notice shall state the name and address of the holder and the
number of shares to be sold. The period during which a put option
is exercisable does not include any time when a distributee is
unable to exercise it because the party bound by the put option
is prohibited from honoring it by applicable Federal or State
law. The price at which a put option must be exercisable is the
value of the Company Stock determined in accordance with
Paragraph (d)(5) of 26 CFR 54.4975-11. The provisions for payment
under the put option shall not exceed a 60 day period from the
exercise date of the put option.
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<PAGE> 10
IN WITNESS WHEREOF, the Employer has executed this Second Amendment to
the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan on this 10th day of
May, 1997.
RANDALLS FOOD MARKETS, INC.
By: /s/ Janice R. Schilmoeller
____________________________________
Name: JANICE R. SCHILMOELLER
__________________________________
Title: Vice President of Risk Management
_________________________________
10
<PAGE> 1
EXHIBIT 4.4
THIRD AMENDMENT TO THE RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN
(Amended and Restated as of April 1, 1997)
W I T N E S S E T H:
WHEREAS, Randalls Food Markets, Inc. (the "Employer") presently
maintains the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan (the "Plan");
and
WHEREAS, the Employer, pursuant to Section 9.1 of the Plan, has the
right to amend the Plan from time to time subject to certain limitations.
NOW, THEREFORE, in order to make various revisions desired by the
Employer, the Plan is hereby amended in the following manner:
1. Effective April 1, 1997, Section 1.50 is hereby amended in its
entirety to read as follows:
1.50 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on July 1 of each year and ending on the following
June 30.
2. Effective as of the date this Amendment is executed, Section 1.65 is
hereby amended in its entirety to read as follows:
1.65 "Year of Service" shall mean the computation period of
twelve (12) consecutive months, herein set forth, during which an
Employee has at least 1,000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service. The participation computation period
beginning after a 1-Year Break in Service shall be measured from the
date on which an Employee again performs an Hour of Service. The
participation computation period shall shift to the Plan Year which
includes the anniversary of the date on which the Employee first
performed an Hour of Service.
For vesting purposes, a Year of Service shall be all Years of
Service in which an Employee completes 1,000 Hours of Service with the
Employer commencing from the Employee's date of hire. Notwithstanding
the foregoing, vesting service under the Tom Thumb Food & Drugs, Inc.
Profit Sharing Plan shall count for vesting purposes under this Plan,
but only with respect to an Employee who became an Employee as a result
of the Employer's acquisition of Thumb Food & Drugs, Inc.
Years of Service with any corporation, trade or business which is
a member of a controlled group of corporations or under common control
(as defined by Code Sections 414(b) and 414(c)), is a member of an
affiliated service group (as defined by Code Section 414(m)), or with
any other entity required to be aggregated with an Employer under Code
Section 414(o) shall be recognized.
<PAGE> 2
3. Effective as of the date this Amendment is executed, Section 4.5(i)
is hereby amended in its entirety to read as follows:
(i) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section 7.4(d).
The remaining Forfeitures, if any, shall be used to reduce the
contribution of the Employer hereunder for the Plan Year in which
such Forfeitures occur.
4. Effective April 1, 1997, Section 4.13(d)(1) is hereby amended in its
entirety to read as follows:
(1) "Qualified Participant" means any Participant
or Former Participant who has completed ten (10) Years of
Service and has attained age 55.
5. Effective April 1, 1997, Section 5.2 is hereby amended in its
entirety to read as follows:
5.2 Transactions Involving Company Stock
All purchases of Company Stock shall be made at a price which, in
the judgment of the Administrator, does not exceed the fair market value
thereof. All sales of Company Stock shall be made at a price which, in
the judgment of the Administrator, is not less than the fair market
value thereof. The valuation rules set forth in Article 6 shall be
applicable.
6. Effective April 1, 1997, Section 6.1 is hereby amended in its
entirety to read as follows:
6.1 Valuation of the Trust Fund
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by
the Administrator, herein called "valuation date," to determine the net
worth of the assets comprising the Trust Fund as it exists on the
"valuation date" prior to taking into consideration any contribution to
be allocated for that Plan Year. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair
market value as of the "valuation date" and shall deduct all expenses
for which the Trustee has not yet obtained reimbursement from the
Employer or the Trust Fund. As of the last day of each calendar quarter,
the Trustee shall determine the value of the Company Stock held by the
Trust Fund.
For purposes of Section 5.2, 7.11 and this Section, valuations
must be made in good faith and based on all relevant factors for
determining the fair market value of securities. In the case of a
transaction between a Plan and a disqualified person, value must be
determined as of the date of the transaction. For all other Plan
purposes, value must be determined as of the most recent valuation date
under the Plan. An independent appraisal will not in itself be a good
faith determination of value in the case of a transaction between the
Plan and a disqualified person. However, in other cases, a
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<PAGE> 3
determination of fair market value based on at least an annual appraisal
independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will
be deemed to be a good faith determination of value. Company Stock not
readily tradeable on an established securities market shall be valued by
an independent appraiser meeting requirements similar to the
requirements of the regulations prescribed under Code Section 170(a)(1).
The Trustee shall be responsible for employing one or more independent
appraisers for purposes of determining the value of such Company Stock.
7. Effective April 1, 1997, Section 7.4(d)(2) is hereby amended in its
entirety to read as follows:
(2) If any Former Participant shall be reemployed
by the Employer before five (5) consecutive 1-Year Breaks
in Service, and such Former Participant had received a
distribution of his entire Vested interest prior to his
reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him
before the earlier of five (5) years after the first date
on which the Participant is subsequently reemployed by the
Employer or the close of the first period of five (5)
consecutive 1-Year Breaks in Service commencing after the
distribution. In the event the Former Participant does
repay the full amount distributed to him, the
undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses
occurring subsequent to the Anniversary Date or other
valuation date preceding his termination. The source for
such reinstatement shall first be any Forfeitures
occurring during the year; provided, however, that no
Forfeiture consisting of Company Stock may be used to
restore an Account of a Former Participant who did not
have a Company Stock Account at the time of such Former
Participant's termination of employment. If the
Forfeitures occurring during the year are insufficient to
restore forfeited Accounts, then the Employer shall
contribute an amount which is sufficient to restore any
such forfeited Accounts.
8. Effective April 1, 1997, Section 7.5(b) is hereby amended in its
entirety to read as follows:
(b) If the Participant elects, the Administrator will
commence distribution of the Participant's Account balance not
later than one year after the close of the Plan Year (i) in which
the Participant separates from service by reason of the
attainment of Normal Retirement Age, disability or death, or (ii)
which is the fifth Plan Year following the Plan Year in which the
Participant otherwise separates from service, except that this
clause (ii) shall not apply if the Participant is reemployed by
the Employer before distribution is required to begin under this
clause (ii). Notwithstanding anything herein to the contrary, any
Company Stock allocated to a Participant's Company Stock Account
purchased by means of an Exempt Loan may not be distributed until
after such Exempt Loan is repaid in full.
3
<PAGE> 4
9. Effective April 1, 1997, Section 7.13 is hereby amended in its
entirety to read as follows:
7.13 Withdrawals from Employee After-Tax Account
A Participant may, at any time, request that the Administrator
distribute to him or her up to 100% of the portion of such Participant's
Employee After-Tax Account which is not invested in Company Stock. The
Administrator upon receiving such request may direct the Trustee to make
the requested distribution to the Participant. Such distribution will be
made as soon as administratively possible after the distribution request
is made.
During the last month of any calendar quarter of any calendar
year, a Participant may request that the Administrator distribute to him
or her up to 100% of the value, determined as of the end of such
calendar quarter, of the portion of such Participant's Employee
After-Tax Account which is invested in Company Stock. The Administrator
upon receiving such request may direct the Trustee to make the requested
distribution to the Participant. Such distribution will be made as soon
as administratively possible after the quarter in which the distribution
request is made.
10. Effective April 1, 1997, Section 7.14(a)(2) is hereby amended in its
entirety to read as follows:
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding
mortgage payments);
11. Effective April 1, 1997, Section 7.14(a)(4) is hereby amended in its
entirety to read as follows:
(4) Payment of tuition, related educational fees
and room and board expenses for the next twelve (12)
months of post-secondary education for the Participant,
his spouse, children or dependents; or
12. Effective April 1, 1997, Section 7.14(e) is hereby added to the Plan
as follows:
(e) A Participant's elective deferrals and voluntary
Employee contributions to this Plan and all other plans
maintained by the Employer will be suspended for twelve (12)
months after receipt of a hardship distribution, or the
Participant, pursuant to a legally enforceable agreement, will
suspend his elective deferrals and voluntary Employee
contributions to the Plan and all other plans maintained by the
Employer for twelve (12) months after receipt of the hardship
distribution.
13. Effective April 1, 1997, Section 7.14(f) is hereby added to the Plan
as follows:
(f) A Participant may not make elective deferrals to this
Plan and all other plans maintained by the Employer for the
Participant's taxable year immediately following the taxable year
of a hardship distribution in excess of the applicable limit
under Code Section 402(g) for such next taxable year less the
amount of such Participant's elective deferrals for the taxable
year of the hardship distribution.
4
<PAGE> 5
14. Effective April 1, 1997, Section 8.2 is hereby amended in its
entirety to read as follows:
8.2 Voting Company Stock
Except as provided hereafter, the Trustee shall vote all Company
Stock held by the Trust in the sole discretion of the Trustee in
accordance with the Trustee's fiduciary duties under the Act.
Notwithstanding the foregoing, if the Employer has a "registration-type
class of securities," each Participant or Beneficiary, if applicable,
shall be entitled to direct the Trustee as to the manner in which shares
of Company Stock which are entitled to vote and which are allocated to
such Participant's (or Beneficiary's, if applicable) Account are to be
voted. If the Employer does not have a registration-type class of
securities, each Participant or Beneficiary, if applicable, shall be
entitled to direct the Trustee as to the manner in which shares of
Company Stock allocated to such Participant's (or Beneficiary's, if
applicable) Account are to be voted with respect to any corporate matter
which involves the voting of such shares with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all
assets of a trade or business, or such similar transaction as prescribed
in the Regulations. For purposes of this Section 8.2, the term
"registration-type class of securities" shall mean (i) a class of
securities required to be registered under Section 12 of the Securities
Exchange Act of 1934 (the "1934 Act") and (ii) a class of securities
which would be required to be so registered except for the exemption
from registration provided in subsection (g)(2)(H) of such Section 12.
To the extent that Participants or Beneficiaries are, in accordance with
the foregoing provisions, entitled to direct the Trustee as to the
manner in which shares of Company Stock are to be voted, such voting
rights shall be exercised in accordance with the following provisions of
this Section 8.2.
(a) As soon as practicable before each annual or special
shareholders' meeting of the Employer, the Trustee shall furnish
to each Participant a copy of the proxy solicitation material
sent generally to shareholders, together with a form requesting
confidential directions on how the shares allocated to such
Participant's Account (including fractional shares to 1/1000th of
a share) are to be voted. The materials furnished to the
Participants shall include a notice from the Trustee explaining
that (i) allocated shares of Company Stock will be voted or not
voted by the Trustee in accordance with directions of
Participants, acting in their capacity as "named fiduciaries" as
such term is defined in section 402(a)(2) of the Act
(hereinafter, "Named Fiduciaries") with respect to allocated
shares to the extent permitted by applicable law, if the Trustee
determines that following such directions will not violate the
Act; (ii) unallocated shares of Company Stock will be voted at
the Trustee's discretion; (iii) by timely returning the proxy
solicitation and pursuant thereto specifically directing the
Trustee how the allocated shares subject to the decision of the
Participant are to be voted, such Participant is consenting to
his appointment as Named Fiduciary hereunder, to the extent
permitted by applicable law, with respect to allocated shares for
which he is entitled to provide the Trustee with voting
directions; (iv) a Participant's consent to appointment as a
Named Fiduciary or failure to consent to such appointment shall
be binding only with respect to the specific proxy solicitations;
and (v) in the event the Participant does not timely return the
form or fails to consent to
5
<PAGE> 6
appointment as a Named Fiduciary, the allocated shares for which
he is entitled to provide the Trustee with directions will be
voted at the Trustee's discretion. The materials shall also
include such information as is reasonably determined by the
Trustee to be necessary to Participants to reach a reasonably
informed decision as to (A) the consequences of consenting to be
appointed a Named Fiduciary, and (B) how to vote the shares. The
Administrator and the Trustee may also provide Participants with
such other material concerning the matters to be voted as the
Trustee or the Administrator in its discretion determine to be
appropriate, provided, however, that prior to any distribution of
materials by the Administrator, the Trustee shall be furnished
with complete copies of all such materials. The Employer and the
Administrator shall cooperate with the Trustee to ensure that
Participants receive the requisite information in a timely
manner. Upon timely receipt of such voting directions, the
Trustee (after combining votes of fractional shares to give
effect to the greatest extent to Participants' directions), shall
vote the shares in accordance with subsections (b) through (e) of
this Section 8.2. The directions received by the Trustee from
Participants shall be held by the Trustee in strict confidence
and shall not be divulged or released to any person, including
directors, officers or employees of the Employer, or of any other
company, except as otherwise required by law.
(b) With respect to all corporate matters submitted to
shareholders, the Trustee shall vote shares of Company Stock
allocated to the Account of any Participant (including fractional
shares to 1/1000th of a share) in accordance with the directions
of such Participant as a Named Fiduciary only if the Trustee
determines that the Participant directions are proper and not
contrary to the Act. For purposes of this subsection, a
Participant's directions with respect to allocated shares are
proper and not contrary to the Act if (i) the Trustee determines
that Participants have not been subjected to coercion or undue
pressure in making their decisions and that clearly false
information or misleading information is not distributed to the
Participants (or that any false or misleading information that
may have been distributed by other parties is corrected), and
(ii) the Trustee determines that following the Participant
directions would not violate the Act.
(c) If voting directions for shares of Company Stock
allocated to the Account of any Participant are not timely
received by the Trustee, the Trustee shall treat the non-receipt
as a refusal by the Participant to be appointed as Named
Fiduciary with respect to that proxy solicitation. Thereafter, in
connection with such proxy solicitation, such allocated and
undirected shares shall be voted in the sole discretion of the
Trustee in accordance with the Trustee's fiduciary duties under
the Act.
(d) The Trustee shall vote shares of Company Stock that
are unallocated to the Account of any Participant in the sole
discretion of the Trustee in accordance with the Trustee's
fiduciary duties under the Act.
(e) For purposes of this Section 8.2, with respect to
shares of Company Stock allocated to the Account of a deceased
Participant, such Participant's Beneficiary, as a Named
Fiduciary, shall be entitled to direct the Trustee how to vote
such shares as if such Beneficiary were the Participant. Such
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<PAGE> 7
Beneficiary shall also be treated as the Participant for all
other purposes of this Section 8.2.
15. Effective April 1, 1997, Section 8.3 is hereby amended in its
entirety to read as follows:
8.3 Tender or Exchange Offer for Company Stock
(a) In the event an offer shall be received by the Trustee
(including a tender offer for shares of Company Stock subject to
Section 14(d)(1) of the 1934 Act or subject to Rule 13e-4
promulgated under the 1934 Act, as those provisions may from time
to time be amended) to purchase or exchange any shares of Company
Stock held by the Trust, the Trustee shall advise each
Participant who has shares of Company Stock credited to such
Participant's Account in writing of the terms of the offer as
soon as practicable after its commencement and shall furnish each
Participant with a form by which he may direct the Trustee
confidentially whether or not to tender or exchange shares
allocated to such Participant's Account. The materials furnished
to Participants shall include a notice from the Trustee
explaining that (i) allocated shares of Company Stock subject to
the offer will be tendered or exchanged or will not be tendered
or exchanged by the Trustee in accordance with directions of
Participants, acting in their capacity as Named Fiduciaries with
respect to allocated shares to the extent permitted by applicable
law, if the Trustee determines that following such directions
will not violate the Act; (ii) unallocated shares of Company
Stock subject to the offer will be tendered or exchanged or will
not be tendered or exchanged by the Trustee at the Trustee's
discretion; (iii) by timely returning the form and pursuant
thereto specifically directing that the allocated shares subject
to the decision of the Participant either be tendered or
exchanged or not tendered or exchanged, such Participant is
consenting to his appointment as Named Fiduciary hereunder, to
the extent permitted by applicable law, with respect to allocated
shares for which he is entitled to provide the Trustee with
directions; (iv) a Participant's consent to appointment as a
Named Fiduciary or failure to consent to such appointment shall
be binding only with respect to the specific tender or exchange
offer described in the materials sent to the Participant by the
Trustee; and (v) in the event the Participant does not timely
return the form or fails to consent to appointment as a Named
Fiduciary, the allocated shares for which he is entitled to
provide the Trustee with directions will either be tendered or
exchanged or not tendered or exchanged at the Trustee's
discretion. The materials shall also include such information as
is reasonably determined by the Trustee to be necessary to
Participants to reach a reasonably informed decision as to (A)
the consequences of consenting or not consenting to be appointed
a Named Fiduciary, and (B) whether to tender or exchange,
including such documents as are prepared by any person and
provided to the shareholders of the Employer pursuant to the 1934
Act. The Administrator and the Trustee may also provide
Participants with such other material concerning the tender or
exchange offer as the Trustee or the Administrator in its
discretion determine to be appropriate, provided, however, that
prior to any distribution of materials by the Administrator, the
Trustee shall be furnished with complete copies of all such
materials. The Employer and the Administrator shall cooperate
with the Trustee
7
<PAGE> 8
to ensure that Participants receive the requisite information in
a timely manner. The directions received by the Trustee from
Participants shall be held by the Trustee in strict confidence
and shall not be divulged or released to any person, including
directors, officers or employees of the Employer, or of any other
company, except as otherwise required by law.
(b) The Trustee shall tender or not tender shares or
exchange or not exchange shares of Company Stock allocated to the
Account of any Participant (including fractional shares to
1/1000th of a share) to the extent directed by the Participant as
a Named Fiduciary only if the Trustee determines that the
Participant directions are proper and not contrary to the Act.
For purposes of this subsection, a Participant's directions with
respect to allocated shares are proper and not contrary to the
Act if (i) the Trustee determines that Participants have not been
subjected to coercion or undue pressure in making their decisions
and that clearly false information or misleading information is
not distributed to the Participants (or that any false or
misleading information that may have been distributed by other
parties is corrected), and (ii) the Trustee determines that
following the Participant directions would not violate the Act.
(c) If tender or exchange directions for shares of Company
Stock allocated to the Account of any Participant are not timely
received by the Trustee, the Trustee shall treat the non-receipt
as a refusal by the Participant to be appointed as Named
Fiduciary with respect to that tender or exchange offer.
Thereafter, in connection with such tender or exchange offer,
such allocated and undirected shares shall be tendered or
exchanged or not tendered or exchanged in the sole discretion of
the Trustee in accordance with the Trustee's fiduciary duties
under the Act.
(d) The Trustee shall tender or exchange or not tender or
exchange the shares of Company Stock that are unallocated to the
Account of any Participant in the sole discretion of the Trustee
in accordance with the Trustee's fiduciary duties under the Act.
(e) In the event, under the terms of a tender offer or
otherwise, any shares of Company Stock tendered for sale,
exchange or transfer pursuant to such offer may be withdrawn from
such offer, the Trustee shall, in accordance with the applicable
terms and conditions of subsections (a) through (d) above, and
the responsibilities and the fiduciary duties of the Trustee as
set forth in such subsections, follow such directions which are
timely received by the Trustee from the Participants, respecting
the withdrawal of such shares from such offer.
(f) In the event that an offer for fewer than all of the
shares of Company Stock held by the Trustee shall be received by
the Trustee, shares shall be tendered in accordance with
subsections (a) through (e) of this Section 8.3, and shares sold,
exchanged or transferred pursuant to such tender shall be on a
pro-rata basis based on the total number of shares tendered by
the Trustee; provided, however, that any such shares so sold,
exchanged, or transferred from any Participant's accounts shall
come first from such Participant's Employee After-Tax Account,
and once all shares from such account have been sold, exchanged
or
8
<PAGE> 9
transferred, next from such Participant's Company Stock Account,
and once all shares from such account have been sold, exchanged
or transferred, next from any other account which holds shares of
Company Stock on behalf of such Participant.
(g) In the event an offer shall be received by the Trustee
and directions shall be solicited from Participants pursuant to
subsections (a)-(f) of this Section 8.3 regarding such offer, and
prior to the termination of such offer, another offer is received
by the Trustee for the securities subject to the first offer, the
Trustee shall treat the offer as a new offer for purposes of
apprising Participants of their rights to direct the Trustee and
for purposes of providing Participants with the opportunity to
accept or reject their appointment as Named Fiduciaries and shall
use its best efforts under the circumstances to solicit
directions from Participants to the Trustee (i) with respect to
securities tendered for sale, exchange or transfer pursuant to
the first offer, whether to withdraw such tender, if possible,
and if withdrawn, whether to tender any securities so withdrawn
for sale, exchange or transfer pursuant to the second offer and
(ii) with respect to securities not tendered for sale, exchange
or transfer pursuant to the first offer, whether to tender or not
to tender such securities for sale, exchange or transfer pursuant
to the second offer. The Trustee shall follow all such directions
received in a timely manner from Participants in the same manner
and in the same proportion as provided in subsections (a)-(f) of
this Section 8.3. In the event a Participant who failed to
consent to his appointment as a Named Fiduciary so consents in
response to a subsequent offer, the shares with respect to which
the Participant would have been entitled to direct the Trustee
shall once again be subject to that consenting Participant's
direction with respect to the new offer. In the event a
Participant who directed the Trustee with respect to an earlier
offer fails to direct the Trustee in response to a subsequent
offer, the Participant shall be deemed to have refused
appointment as a Named Fiduciary and the allocated shares he
would have been entitled to direct shall be subject to the
discretion of the Trustee as provided in subsection (c) of this
Section 8.3. With respect to any further offer for any Company
Stock received by the Trustee and subject to any earlier offer
(including successive offers from one or more existing offerors),
the Trustee shall act in the same manner as described above.
(h) Neither a Participant's instructions to the Trustee to
tender or exchange shares of Company Stock pursuant to this
Section 8.3 nor an actual tender or exchange of shares of Company
Stock pursuant to this Section 8.3 shall be deemed a withdrawal
or suspension from the Plan or a forfeiture of any portion of the
Participant's interest in the Plan. Funds received in exchange
for tendered shares shall be credited to the Account, as
applicable in accordance with the ordering method provided in
Section 8.3(f), of the Participant whose shares were tendered or
the Suspense Account for which such shares were tendered. The
Trustee shall invest such funds as permitted in accordance with
the terms of the Plan and the Trust Agreement.
(i) The Trustee shall take all steps necessary, including
the appointment of a corporate Trustee, and/or an outside
independent administrator to the extent that such action, after
consultation with the Employer and the
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<PAGE> 10
Administrator, is found necessary to maintain the confidentiality
of Participant responses and/or adequately discharge their
obligations as Named Fiduciaries.
(j) For purposes of this Section 8.3, with respect to
shares of Company Stock allocated to the Account of a deceased
Participant, such Participant's Beneficiary, as a Named
Fiduciary, shall be entitled to direct the Trustee whether or not
to tender or exchange such shares as if such Beneficiary were the
Participant. Such Beneficiary shall also be treated as the
Participant for all other purposes of this Section 8.3.
IN WITNESS WHEREOF, the Employer has executed this Third Amendment to
the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan on this 14th day of
September, 1997.
RANDALLS FOOD MARKETS, INC.
By: /s/ Janice R. Schilmoeller
____________________________________
Name: JANICE R. SCHILMOELLER
__________________________________
Title: Vice President of Risk Management
_________________________________
10
<PAGE> 1
EXHIBIT 4.5
FOURTH AMENDMENT TO THE RANDALLS FOOD MARKETS, INC.
ESOP/401(k) SAVINGS PLAN
(Amended and Restated as of April 1, 1997)
W I T N E S S E T H:
WHEREAS, Randalls Food Markets, Inc. (the "Employer") presently
maintains the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan (the "Plan");
and
WHEREAS, the Employer, pursuant to Section 9.1 of the Plan, has the
right to amend the Plan from time to time subject to certain limitations.
NOW, THEREFORE, (a) in response to guidance issued by the Internal
Revenue Service with respect to the implementation of Section 401(a)(9) of the
Internal Revenue Code of 1986, as amended by the Small Business Job Protection
Act of 1996, (b) to implement certain provisions of the Taxpayer Relief Act of
1997, and (c) to make certain other changes desired by the Employer, the Plan is
hereby amended in the following manner:
1. Effective as of the date this Fourth Amendment is executed, Section
1.27 is hereby amended in its entirety to read as follows:
1.27 "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
In addition, the term "Forfeiture" shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
2. Effective as of the date this Fourth Amendment is executed, Section
4.2(d) is hereby amended in its entirety to read as follows:
(d) The balance in each Participant's Elective Account
shall be fully Vested at all times and shall not be subject to
forfeiture for any reason except as provided for in Sections
4.2(g) and 4.7(a)(3).
3. Effective as of the date this Fourth Amendment is executed, Section
4.2(g) is hereby amended in its entirety to read as follows:
(g) If a Participant's Deferred Compensation under this
Plan together with any elective deferrals (as defined in
Regulation 1.402(g)-1(b)) under another qualified cash or
deferred arrangement (as defined in Code Section 401(k)), a
simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code
Section 3121(a)(5)(D)), a
<PAGE> 2
deferred compensation plan under Code Section 457, or a trust
described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually
in accordance with the method provided in Code Section 415(d)
pursuant to Regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of
his taxable year, notify the Administrator in writing of such
excess and request that his Deferred Compensation under this Plan
be reduced by an amount specified by the Participant. In such
event, the Administrator may direct the Trustee to distribute
such excess amount, and any income allocable to such amount, to
the Participant not later than the first April 15th following the
close of the Participant's taxable year. Any distribution of less
than the entire amount of Excess Deferred Compensation and income
shall be treated as a pro rata distribution of Excess Deferred
Compensation and income. The amount distributed shall not exceed
the Participant's Deferred Compensation under the Plan for the
taxable year. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on
which the Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the
distribution as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(g)
shall be made first from unmatched Deferred Compensation and,
thereafter, from Deferred Compensation which is matched. Matching
contributions which relate to such Deferred Compensation shall be
forfeited.
4. Effective as of the date this Fourth Amendment is executed, Section
4.5(i) is hereby amended in its entirety to read as follows:
(i) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section 7.4(d).
The remaining Forfeitures, if any, shall be used to reduce the
contribution of the Employer hereunder for the Plan Year in which
such Forfeitures occur and/or to satisfy expenses of
administration pursuant to Section 2.10.
5. Effective as of the date this Fourth Amendment is executed, Section
4.7(a)(3)(ii) is hereby amended in its entirety to read as follows:
(ii) shall be made first from unmatched
Deferred Compensation and, thereafter, from
Deferred Compensation which
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<PAGE> 3
is matched. Matching contributions which relate to
such Deferred Compensation shall be forfeited;
6. Effective as of the date this Fourth Amendment is executed, the first
paragraph of Section 4.9(a) is hereby amended in its entirety to read as
follows:
(a) In the event that the "Actual Contribution Percentage"
for the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.8(a), the Administrator
(on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the
following Plan Year) shall direct the Trustee to distribute to
the Highly Compensated Participant having the highest actual
contribution ratio his Excess Aggregate Contributions (and income
allocable to such contributions) until either one of the tests
set forth in Section 4.8(a) is satisfied, or until his actual
contribution ratio equals the actual contribution ratio of the
Highly Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of the
tests set forth in Section 4.8(a) is satisfied. The distribution
of Excess Aggregate Contributions shall be made first from
Employee contributions and, thereafter, from Employer
contributions. Matching contributions which relate to such
Employee contributions shall be forfeited.
7. Effective as of April 1, 1997, Section 7.4(a) is hereby amended in
its entirety to read as follows:
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for
any reason other than death, Total and Permanent Disability or
retirement, the Administrator may direct the Trustee to segregate
the amount of the Vested portion of such Terminated Participant's
Account and invest the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit, common
or collective trust fund of a bank or a deferred annuity. In the
event the Vested portion of a Participant's Account is not
segregated, the amount shall remain in a separate account for the
Terminated Participant and share in allocations per Section 4.5
until such time as a distribution is made to the Terminated
Participant. The amount of the Terminated Participant's Account
which is not Vested shall be credited to the Suspense Account
(which will always share in gains and losses of the trust) and
shall, subsequently, be allocated to the accounts of the
remaining Participants in accordance with the terms of the Plan
at such time as the amount becomes a Forfeiture.
If a portion of a Participant's Account is forfeited,
Company Stock allocated to such account must be forfeited only
after the Other Investment Account has been depleted. If interest
in more than one class of Company Stock has been allocated to a
Participant's Account, the Participant must be treated as
forfeiting the same proportion of each such class.
3
<PAGE> 4
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result in
the distribution had the Terminated Participant remained in the
employ of the Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement). However, at
the election of the Participant, the Administrator shall direct
the Trustee to cause the entire Vested portion of the Terminated
Participant's Account to be payable to such Terminated
Participant. Distribution to a Participant shall not include any
Company Stock acquired after December 31, 1986 with the proceeds
of an Exempt Loan until the close of the Plan Year in which such
loan is repaid in full. Any distribution under this paragraph
shall be made in a manner which is consistent with and satisfies
the provisions of Sections 7.5 and 7.6, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's Vested benefit
derived from Employer and Employee contributions does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause
the entire Vested benefit to be paid to such Participant in a
single lump sum. Effective July 1, 1998, if the value of a
Terminated Participant's Vested benefit derived from Employer and
Employee contributions does not exceed $5,000 and has never
exceeded $5,000 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire Vested
benefit to be paid to such Participant in a single lump sum.
Terminated Participants who are under the age of
fifty-five (55) at the time of termination may elect distribution
of all or part of the Vested portion of their Participant's
Account. The distribution will be made as soon as
administratively possible after the end of the calendar quarter
of termination.
8. Effective as of July 1, 1998, Section 7.5(c) is hereby amended in its
entirety to read as follows:
(c) The distribution of a Participant's benefits may not
commence prior to the later of the Participant's Normal
Retirement Age or age 62 if the Vested portion of the
Participant's Account exceeds or has ever exceeded $5,000 at the
time of any prior distribution, unless the distribution is
consented to in writing by the Participant and his spouse or, if
the Participant is deceased, the Participant's surviving spouse.
With regard to this required consent:
(1) The Participant must be informed of his right
to defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to defer
the distribution of any benefit. However, any election to
defer the receipt of benefits shall not apply with respect
to distributions which are required under Section 7.5(e).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no
more than 90 days before the first
4
<PAGE> 5
day on which all events have occurred which entitle the
Participant to such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90 days
before the first day on which all events have occurred
which entitle the Participant to such benefit.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who
does not consent to the distribution.
9. Effective as of January 1, 1997, Section 7.5(e) is hereby amended in
its entirety to read as follows:
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder (including Regulation Section 1.401(a)(9)-2), the
provisions of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed
to him not later than April 1st of the calendar year
following the calendar year in which the Participant
attains age 702 if such Participant attains age 702 prior
to January 1, 1999. With respect to a Participant who
attains age 702 on or after January 1, 1999, such
Participant's benefits shall be distributed to him not
later than the April 1st of the calendar year following
the later of (i) the calendar year in which the
Participant attains age 702 or (ii) the calendar year in
which the Participant retires, provided, however, that
this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" with respect
to the Plan Year ending in the calendar year in which he
attains age 702. Alternatively, distributions to a
Participant must begin no later than the applicable April
1st as determined under the preceding sentences and must
be made over the life expectancy of the Participant (or
the life expectancies of the Participant and his
designated Beneficiary) in accordance with Regulations.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
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IN WITNESS WHEREOF, the Employer has executed this Fourth Amendment to
the Randalls Food Markets, Inc. ESOP/401(k) Savings Plan on this 22nd day of
June, 1998.
RANDALLS FOOD MARKETS, INC.
By: /s/ Janice R. Schilmoeller
____________________________________
Name: JANICE R. SCHILMOELLER
__________________________________
Title: Vice President of Risk Management
_________________________________
6
<PAGE> 1
EXHIBIT 4.6
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR UNION EMPLOYEES
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS.....................................................1
ARTICLE II. SERVICE .......................................................14
ARTICLE III. ELIGIBILITY, ENROLLMENT AND PARTICIPATION......................18
ARTICLE IV. CONTRIBUTIONS..................................................20
ARTICLE V. LIMITATIONS ON ALLOCATIONS.....................................28
ARTICLE VI. DISTRIBUTION OF BENEFITS.......................................36
ARTICLE VII. RETIREMENT BENEFITS............................................46
ARTICLE VIII. JOINT AND SURVIVOR ANNUITY REQUIREMENTS........................47
ARTICLE IX. TERMINATION OF EMPLOYMENT......................................53
ARTICLE X. WITHDRAWALS....................................................55
ARTICLE XI. FIDUCIARY DUTIES AND RESPONSIBILITIES..........................60
ARTICLE XII. THE ADMINISTRATOR..............................................61
ARTICLE XIII. PARTICIPANTS' RIGHTS...........................................64
ARTICLE XIV. AMENDMENT OR TERMINATION OF THE PLAN...........................67
ARTICLE XV. SUBSTITUTION OF PLANS..........................................70
ARTICLE XVI. MISCELLANEOUS..................................................71
</TABLE>
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<PAGE> 3
ARTICLE I.
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any Participant
who (a) performs duties as an Employee for the Employer, and (b) is not
an Inactive Participant.
1.3 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage means
the average of the Actual Deferral Ratios of a specified group, computed
to the nearest one-hundredth of one percent.
1.4 ACTUAL DEFERRAL PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the Actual Deferral
Percentage Test described in section 401(k)(3) and the
regulations thereunder, which are herein incorporated by
reference.
The Plan satisfies the Actual Deferral Percentage Test for a
Plan Year only if:
(1) The Actual Deferral Percentage for the group of eligible
Highly Compensated Employees is not more than the Actual
Deferral Percentage for the group of all other eligible
Employees multiplied by 1.25; or
(2) The excess of the Actual Deferral Percentage for the
group of eligible Highly Compensated Employees over the
Actual Deferral Percentage for the group of all other
eligible Employees is not more than two percentage
points, and the Actual Deferral Percentage for the group
of eligible Highly Compensated Employees is not more
than the Actual Deferral Percentage for the group of all
other eligible Employees multiplied by two.
(B) Special Rules.
(1) For purposes of determining the Actual Deferral
Percentage Test, Elective Deferral Contributions,
Qualified Nonelective Contributions, and Qualified
Matching Contributions must be allocated to the
Employee's Account as of a date within the Plan Year
being tested and must be made before the last day of the
twelve-month period immediately following the Plan Year
to which such contributions relate.
(2) The Excess Deferrals of a Highly Compensated Employee
shall be taken into account for purposes of the Actual
Deferral Percentage Test. Conversely, the Excess
Deferrals of an Employee who is a Nonhighly Compensated
Employee shall not be taken into account for purposes of
the Actual Deferral Percentage Test.
<PAGE> 4
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage
Test, including the extent to which Qualified Nonelective
Contributions and Qualified Matching Contributions are
taken into account.
1.5 ACTUAL DEFERRAL RATIO.
(A) An Employee's Actual Deferral Ratio for the Plan Year is the sum
of the Employee's Deferral Percentage Amounts allocated to the
Employee's Account for the Plan Year (including any amounts
required to be taken into account under subparagraphs (B)(1)
and (B)(2) of this section), divided by the Employee's
Compensation taken into account for the Plan Year. If an
eligible Employee makes no Elective Deferral Contributions, and
no Qualified Matching Contributions or Qualified Nonelective
Contributions are taken into account with respect to the
Employee, the Actual Deferral Ratio of the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit
percentage test), or if one or more other plans satisfy
the requirements of section 410(b) of the Code (other
than the average benefit percentage test) only if
aggregated with this Plan, then this section shall be
applied by determining the Actual Deferral Ratio of
Employees as if all such plans were a single plan. Plans
may be aggregated only if they have the same Plan Year.
(2) The Actual Deferral Ratio of a Highly Compensated
Employee who is eligible to participate in more than one
cash or deferred arrangement (as described in section
401(k) of the Code) of the same Employer shall be
calculated by treating all the cash or deferred
arrangements in which the Employee is eligible to
participate as one arrangement. If the cash or deferred
arrangements that are treated as a single arrangement
under the preceding sentence are parts of plans that
have different Plan Years, the cash or deferred
arrangements are treated as a single arrangement with
respect to the Plan Years ending with or within the same
calendar year. However, plans that are not permitted to
be aggregated under Treasury Regulation section
1.401(k)-l(b)(3)(ii)(B) are not aggregated for purposes
of this section.
(3) For purposes of determining the Actual Deferral Ratio of
a Participant who is a 5 percent owner or one of the 10
most Highly Compensated Employees, the Deferral
Percentage Amounts and Compensation of such Participant
shall include the Deferral Percentage Amounts (including
any amounts required to be taken into account under
subparagraphs (B)(1) and
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<PAGE> 5
(B)(2) of this section) and Compensation for the Plan
Year of Family Members.
If an Employee is required to be aggregated as a member
of more than one family group under the Plan, all
eligible Employees who are members of those family
groups that include that Employee are aggregated as one
family group.
Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Actual Deferral Percentage both for
Participants who are Non-highly Compensated Employees
and for Participants who are Highly Compensated
Employees.
(4) The determination and treatment of the Actual Deferral
Ratio amounts of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary
of the Treasury.
1.6 ANNUITY. The term Annuity means a series of payments made over a
specified period of time which, for a fixed annuity are, of equal,
specified amounts, and for a variable annuity increase or decrease to
reflect changes in investment performance of the underlying portfolio.
1.7 ANNUITY STARTING DATE. The term Annuity Starting Date means the first
day of the first period for which an amount is payable as an Annuity. In
the case of a benefit not payable in the form of an Annuity, the term
Annuity Starting Date means the first day on which all events have
occurred which entitle the Participant to such benefit.
1.8 BENEFICIARY. The Participant's Spouse is the designated Beneficiary of
the Participant's entire Vested Interest. However, each Participant
shall have the right to designate another Beneficiary and to specify the
form of death benefit the Beneficiary is to receive, subject to the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements. The Participant may change the
Beneficiary and/or the form of death benefit at any time, subject to the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements.
If any distribution hereunder is made to a Beneficiary in the form of an
Annuity, and if such Annuity provides for a death benefit then such
Beneficiary shall also have the right to designate a Beneficiary and to
change that Beneficiary from time to time. As an alternative to
receiving the benefit in the form of an Annuity, the Beneficiary may
elect to receive a single cash payment or any other form of payment
provided for in the Plan.
If a Beneficiary has not been designated, or if a Beneficiary
designation or change of Beneficiary designation does not meet the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements, (including any
3
<PAGE> 6
designation made prior to August 23, 1984 by a married Participant who
has an Hour of Service on or after August 23, 1984), or if no designated
Beneficiary survives the Participant, the Participant's entire Vested
Interest shall be distributed to the Participant's Spouse, if living;
otherwise in equal shares to any surviving children of the Participant.
In the event none of the above named individuals survives the
Participant, the Participant's entire Vested Interest shall be paid to
the executor or administrator of the Participant's estate.
1.9 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.10 CODE. The term Code means the Internal Revenue Code of 1986, as amended
from time to time.
1.11 COLLECTIVE BARGAINING AGREEMENT. The term Collective Bargaining
Agreement means the collective bargaining contract(s) in force and
effect between the Union and the Employer which provides for payments to
be made to this Plan, together with any modifications or amendments
thereto or extensions thereof.
1.12 COMPENSATION.
(A) Except as otherwise provided in the Plan, the term Compensation
means wages within the meaning of section 3401(a) of the Code
for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2) of the
Code).
Notwithstanding the foregoing, Compensation shall be reduced by
all of the following items (even if includible in gross income):
reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation, and
welfare benefits.
(B) Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in the Plan, the
determination period shall be the Plan Year.
(C) Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the employee under
sections 125, 402(e)(3), 402(h), or 403(b) of the Code;
Compensation deferred under an eligible deferred compensation
plan within the meaning of section 457(d) of the Code; and
employee contributions described in section 414(h)(2) of the
Code that are picked up by the employing unit and, thus, are
treated as employer contributions.
4
<PAGE> 7
(D) The annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any
determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary of the Treasury at the time
and in the same manner as under section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any
calendar year is effective for determination periods beginning
in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the period for
determining Compensation used in calculating an Employee's
allocation for a determination period is a short Plan Year
(i.e., shorter than 12 months), the annual Compensation limit is
an amount equal to the otherwise applicable annual Compensation
limit multiplied by a fraction, the numerator of which is the
number of months in the short Plan Year, and the denominator of
which is 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the application
of such rules, the adjusted $200,000 limitation is exceeded,
then either 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, or the limitation shall be allocated among the
affected individuals in an objective and nondiscriminatory
manner based on a reasonable, good faith interpretation of
section 401(a)(17) of the Code. The method chosen in the
preceding sentence shall be uniformly applied to all affected
individuals in a Plan Year and shall be applied consistently
from year to year.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for
the current determination period, the Compensation for such
prior determination period is subject to the applicable annual
Compensation limit in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000.
(E) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Employee taken into account
under the Plan shall not exceed the OBRA `93 annual Compensation
limit. The OBRA `93 annual Compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living
in accordance with section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which Compensation
is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12
months, the OBRA `93 annual Compensation limit will be
multiplied by a fraction, the
5
<PAGE> 8
numerator of which is the number of months in the determination
period, and the denominator of which is 12. For Plan Years
beginning on or after January 1, 1994, any reference in this
Plan to the limitation under section 401(a)(17) of the Code
shall mean the OBRA `93 annual Compensation limit set forth in
this provision. If Compensation for any prior determination
period is taken into account in determining an employee's
benefits accruing in the current Plan Year, the Compensation for
that prior determination period is subject to the OBRA `93
annual Compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning
before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA `93 annual Compensation limit is
$150,000.
1.13 CONSIDERED NET PROFITS. The term Considered Net Profits means the entire
amount of the accumulated or current operating profits (excluding
capital gains from the sale or involuntary conversion of capital or
business assets) of the Employer after all expenses and charges other
than (i) the contributions made by the Employer to the Plan, and (ii)
federal or state or local taxes based upon or measured by income, as
determined by the Employer, either on an estimated basis or a final
basis, in accordance with the generally accepted accounting principles
used by the Employer. When the amount of Considered Net Profits has been
determined by the Employer, and the contributions are made by the
Employer on the basis of such determination, for any Plan Year, such
determination and contribution shall be final and conclusive and shall
not be subject to change because of any adjustments in income or expense
which may be required by the Internal Revenue Service or otherwise. Such
determination and contribution shall not be open to question by any
Participant either before or after the contributions by the Employer
have been made.
1.14 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period specified by the Employer in Article IV for which contributions
shall be made.
1.15 DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts means
an Employee's Elective Deferral Contributions for the Plan Year. The
term Deferral Percentage Amounts also includes Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Elective
Deferral Contributions and taken into account in determining the
Employee's Actual Deferral Ratio for the Plan Year.
1.16 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or to be of long, continued and indefinite duration.
Such determination of Disability shall be made by the Administrator with
the advice of competent medical authority. All Participants in similar
circumstances will be treated alike.
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<PAGE> 9
1.17 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined
that a Participant's incapacity is a Disability.
1.18 EFFECTIVE DATE. The term Effective Date means January 1, 1993.
1.19 ELECTIVE DEFERRAL CONTRIBUTION. The term Elective Deferral Contribution
means any Employer Contribution made to the Plan at the election of the
Participant, in lieu of cash compensation, and includes contributions
made pursuant to a Salary Deferral Agreement or other deferral
mechanism.
Solely for purposes of the dollar limitation specified in section 402(g)
of the Code, with respect to any taxable year, a Participant's Elective
Deferral Contributions are the sum of all employer contributions made on
behalf of such Participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in section 401(k) of
the Code, any simplified employee pension cash or deferred arrangement
described in section 402(h)(1)(B) of the Code, any plan as described
under section 501(c)(18) of the Code, and any employer contributions
made on behalf of a Participant for the purchase of a tax sheltered
annuity contract under section 403(b) of the Code pursuant to a salary
reduction agreement.
The term Elective Deferral Contribution shall not include any deferrals
properly distributed as excess annual additions.
1.20 EMPLOYEE. The term Employee means an individual who performs services
for the Employer and who is either a common law employee of the Employer
or a self-employed individual/owner employee treated as an Employee
pursuant to Code section 401(c)(1). The term Employee also includes a
Leased Employee who is treated as an Employee of the Employer-recipient
pursuant to the provisions of Code section 414(n) or 414(o). For
purposes of determining the Highly Compensated Employees, the Employer
may elect, on a reasonable and consistent basis, to treat such Leased
Employees covered by a plan described in Code section 414(n)(5) as
Employees.
1.21 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means any
contributions to the Plan or any other plan that are designated or
treated at the time of contribution as after-tax Employee Contributions
and are allocated to a separate account to which the attributable
earnings and losses are allocated. Such term includes Employee
Contributions applied to the purchase of life insurance policies.
Such term does not include repayment of loans or buy-back of benefits
described in code section (411)(a)(7)(c) or employee contributions
transferred to this Plan.
1.22 EMPLOYER. The term Employer means Dominick's Finer Foods, Inc.,
Supermarket Training Systems, Inc. and any successor organization to
such Employer which elects to continue the Plan. In the case of a group
of employers which constitutes a controlled group of corporations (as
defined in Code section 414(b)), or which constitutes trades or
7
<PAGE> 10
businesses (whether or not incorporated) which are under common control
(as defined in Code section 414(c)), or which constitutes an affiliated
service group (as defined in Code section 414(m)), all such employers
shall be considered a single employer for purposes of participation,
vesting and determination of Highly Compensated Employees.
1.23 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a
Participant, other than an Employee Contribution or Rollover
Contribution.
1.24 ENTRY DATE. The term Entry Date means either the Effective Date or the
first day of the month thereafter when an Employee who has fulfilled the
eligibility requirements commences participation in the Plan.
Any Employee who has satisfied the maximum eligibility requirements
permissible under ERISA, shall be eligible to commence participation in
this Plan no later than the earlier of (A) or (B) below, as applicable,
provided that the Employee has not separated from the Service of the
Employer:
(A) The first day of the first Plan Year beginning after the date on
which the Employee satisfied such requirements; or
(B) The date six months after the date on which the Employee
satisfied such requirements.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date
shall be the applicable Entry Date as specified above when the Employee
actually enrolls as a Participant.
1.25 ERISA. The term ERISA means the Employee Retirement Income Security Act
of 1974 (PL 93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and such regulations
affect this Plan and Trust.
1.26 EXCESS CONTRIBUTION.
(A) The term Excess Contribution means, with respect to a Plan Year,
the excess of Deferral Percentage Amounts made on behalf of
eligible Highly Compensated Employees for the Plan Year
(including any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of Section 1.8 of the Plan)
over the maximum amount of such contributions permitted under
the Actual Deferral Percentage Test for the Plan Year. The
amount of Excess Contributions for each Highly Compensated
Employee is determined by using the method described in
paragraph (B) of this section.
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<PAGE> 11
(B) The amount of Excess Contributions for a Highly Compensated
Employee for a Plan Year is the amount (if any) by which the
Employee's Elective Deferral Contributions must be reduced for
the Employee's Actual Deferral Ratio to equal the highest
permitted Actual Deferral Ratio under the Plan.
To calculate the highest permitted Actual Deferral Ratio under
the Plan, the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced by
the amount required to cause the Employee's Actual Deferral
Ratio to equal the ratio of the Highly Compensated Employee with
the next highest Actual Deferral Ratio. If a lesser reduction
would enable the arrangement to satisfy the Actual Deferral
Percentage Test, only this lesser reduction shall be made. This
process shall be repeated until the cash or deferred arrangement
satisfies the Actual Deferral Percentage Test. The highest
Actual Deferral Ratio remaining under the Plan after leveling is
the highest permitted Actual Deferral Ratio.
1.27 EXCESS DEFERRALS. The term Excess Deferrals means those Elective
Deferral Contributions that are includible in a Participant's gross
income under section 402(g) of the Code to the extent such Participant's
Elective Deferral Contributions for a taxable year exceed the dollar
limitation under such Code section.
1.28 FAIL-SAFE CONTRIBUTION. The term Fail-Safe Contribution means a
Nonelective Contribution, designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution, which is
contributed to the Plan solely for the purposes of satisfying the Actual
Contribution Percentage Test and is made in accordance with the
provisions of Article IV of this Plan.
1.29 FAMILY MEMBER. The term Family Member means, with respect to any
Employee, such Employee's Spouse and lineal ascendants and descendants
and the spouses of such lineal ascendants and descendants.
1.30 FIDUCIARY. The term Fiduciary means any, or all, of the following, as
applicable:
(A) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets; or
(B) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other
property of the Plan or has authority or responsibility to do
so; or
(C) Any Person who has discretionary authority or responsibility in
the administration of the Plan; or
(D) Any Person who has been designated by a Named Fiduciary pursuant
to authority granted by the Plan, who acts to carry out a
fiduciary responsibility, subject to any exceptions granted
directly or indirectly by ERISA.
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<PAGE> 12
1.31 FORFEITURE. The term Forfeiture means the amount, if any, by which the
value of a Participant's Account exceeds his Vested Interest following
such Participant's Termination of Employment, and at the time specified
in Section 9.1.
1.32 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an Active
Participant due to a suspension of the performance of duties for the
Employer.
In addition, a Participant who ceases to meet the eligibility
requirements in accordance with Section 3.1 shall be considered an
Inactive Participant.
1.33 INSTALLMENT REFUND ANNUITY. The term Installment Refund Annuity means an
annuity which provides fixed monthly payments for a period certain of
not less than three nor more than 15 years. If the Participant dies
before the period certain expires, the annuity will be paid to the
Participant's Beneficiary for the remainder of the period certain. The
period certain shall be chosen by the Participant at the time the
annuity is purchased, and the Installment Refund Annuity will be the
amount of benefit which can be purchased with the Participant's Vested
Interest. The Installment Refund Annuity is not a life annuity and in no
event shall the period certain extend to a period which equals or
exceeds the life expectancy of the Participant.
1.34 JOINT AND SURVIVOR ANNUITY. The term Joint and Survivor Annuity means an
Annuity for the life of the Participant with a survivor Annuity for the
life of the Participant's Spouse which is not less than one-half, nor
greater than, the amount of the Annuity payable during the joint lives
of the Participant and the Participant's Spouse. The Joint and Survivor
Annuity will be the amount of benefit which can be purchased with the
Participant's vested account balance. In the case of an unmarried
Participant, Joint and Survivor Annuity means an Annuity payable over
the Participant's life.
1.35 LATE RETIREMENT DATE. The term Late Retirement Date means the first day
of the month coinciding with or next following the date a Participant is
separated from Service with the Employer after his Normal Retirement
Age, for any reason other than death.
1.36 LEASED EMPLOYEE. The term Leased Employee means any person (other than
an Employee of the recipient) who, pursuant to an agreement between the
recipient and any other person ("leasing organization"), has performed
services for the recipient (or for the Employer and related persons
determined in accordance with Code section 414(n)(6)) on a substantially
full-time basis for a period of at least one year, and such services are
of a type historically performed by employees in the business field of
the recipient Employer.
1.37 NAMED FIDUCIARY. The term Named Fiduciary means the Plan Administrator,
the Trustee and any other Fiduciary designated in writing by the
Employer, and any successor thereto.
1.38 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made by the Employer (other than Matching Contributions)
that the
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<PAGE> 13
Participant may not elect to have paid in cash or other benefits instead
of being contributed to the Plan.
1.39 NONHIGHLY COMPENSATED EMPLOYEE. The term Nonhighly Compensated Employee
means an Employee who is not a Highly Compensated Employee.
1.40 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the date the
Participant attains age 55.
1.41 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the first
day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age.
1.42 PARTICIPANT. The term Participant means any Employee of the Employer,
who is or becomes eligible to participate under this Plan in accordance
with its provisions and shall include an Active Participant and an
Inactive Participant.
1.43 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum of
the following sub-accounts held on behalf of each Participant:
- Elective Deferral Contributions, if any, and earnings thereon.
- Prior Employer Contributions, if any, and earnings thereon.
- Prior Employee Contributions, if any, and earnings thereon.
- Rollover Contributions, if any, and earnings thereon.
A Participant's Account shall be invested in accordance with the rules
established by the Plan Administrator, which shall be applied in a
consistent and nondiscriminatory manner.
1.44 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.45 PLAN. The term Plan means Dominick's Finer Foods, Inc. 401(k) Retirement
Plan for Union Employees, the terms of which are set forth herein as it
may be amended from time to time.
1.46 PLAN ADMINISTRATOR. The terms Plan Administrator and Administrator are
used interchangeably throughout the Plan and shall mean the Employer.
1.47 PLAN YEAR. The term Plan Year means the 12-month period commencing on
January 1 and ending on the following December 31.
1.48 PRIOR EMPLOYEE CONTRIBUTIONS. The term Prior Employee Contributions
means Employee Contributions that were made prior to January 1, 1993.
Prior Employee Contributions shall be considered to be Employee
Contributions for purposes of
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<PAGE> 14
determining a Participant's Vested Interest, pursuant to Article 1. In
addition, Prior Employee Contributions shall also be considered to be
Employee Contributions for the purposes of determining the Actual
Contribution Ratio pursuant to Article I and Annual Additions pursuant
to Article V.
1.49 PRIOR EMPLOYER CONTRIBUTIONS. The term Prior Employer Contributions
means employer contributions that were made prior to the Effective Date
of this Plan.
1.50 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or
profit-sharing plan meeting the requirements of Code section 401(a) that
is eligible for rollover to this Plan in accordance with the
requirements set forth in Code section 402 or Code section 408(d)(3),
whichever is applicable.
1.51 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer the
Participant's Compensation for the purpose of making Elective Deferral
Contributions to the Plan.
1.52 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Disability
or death.
1.53 TRUST. The term Trust means the trust agreement entered into by the
Employer, the Administrator and the Trustee.
1.54 TRUSTEE. The term Trustee means one or more persons collectively
appointed and acting under the trust agreement, and any successor
thereto.
1.55 UNION. The term Union means an eligible Union or Local that has
collectively bargained for participation in this plan.
1.56 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the amount
which is equal to the following:
(A) the value on that date of that portion of the Participant's
Account that is attributable to the following contributions:
- Elective Deferral Contributions, if any
- Employee Contributions, if any
- Rollover Contributions, if any
(B) plus the value on that date of that portion of the Participant's
Account that is attributable to and derived from:
- Prior Employer Contributions, if any
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<PAGE> 15
Such contributions pursuant to Subsection (B), plus the earnings
thereon, shall be, at any relevant time, a part of the
Participant's Vested Interest equal to an amount ("X")
determined by the following formula:
X = P(AB + D) - D
For the purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant time.
AB = The account balance attributable to such contributions,
plus the earnings thereon, at the relevant time.
D = The amount of the distribution.
1.57 VESTING PERCENTAGE. The term Vesting Percentage means the percentage
used to determine a Participant's Vested Interest in contributions made
by the Employer, plus the earnings thereon, credited to his
Participant's Account that are not 100% immediately vested. The Vesting
Percentage for each Participant shall be determined in accordance with
the following schedule based on Years of Service with the Employer.
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 1 0%
1 but less than 2 10%
2 but less than 3 20%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
</TABLE>
However, if an Active Participant dies prior to attaining his Normal
Retirement Age, his Vesting Percentage shall be 100%.
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<PAGE> 16
ARTICLE II.
SERVICE
2.1 SERVICE. The term Service means active employment with the Employer as
an Employee. For purposes of determining Service, employment with any
company which is under common control with the Employer as specified in
section 414 of the Internal Revenue Code shall be treated as employment
with the Employer.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the Employer
provided that such leave of absence is of not more than two years'
duration. Absence from employment on account of active duty with the
Armed Forces of the United States will be counted as employment with the
Employer. If the Employee does not return to active employment with the
Employer, his Service will be deemed to have ceased on the date the
Administrator receives notice that such Employee will not return to the
active Service of the Employer. The Employer's leave policy shall be
applied in a uniform and nondiscriminatory manner to all Participants
under similar circumstances.
FOR PURPOSES OF ELIGIBILITY, THE FOLLOWING PROVISIONS SHALL APPLY:
2.3 HOUR OF SERVICE. The term Hour of Service means a period of Service
during which an Employee shall be credited with one Hour of Service as
described in (A), (B), (C), and (D) below:
(A) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of
duties. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed;
and
(B) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for reasons (such as
vacation, sickness or Disability) other than for the performance
of duties. Hours under this Subsection shall be calculated and
credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this
reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer.
These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made; and
(D) Each hour for which an Employee is on an authorized unpaid leave
(such as service with the Armed Forces, jury duty, educational
leave). These hours shall be credited to the Employee for the
computation period or periods in which such
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<PAGE> 17
authorized leave takes place. However, no more than 501 hours
shall be credited under this subparagraph (D).
Hours of Service will be credited for employment with other members of
an affiliated service group (under Internal Revenue Code section
414(m)), a controlled group of corporations (under Internal Revenue Code
section 414(b)), or a group of trades or businesses under common control
(under Internal Revenue Code section 414(c)), of which the adopting
employer is a member. Hours of Service will also be credited for any
individual considered an Employee under Internal Revenue Code section
414(n).
Solely for purposes of determining whether a One-Year Break in Service,
as defined in Section 2.4, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but
for such absence, or in any case in which such hours cannot be
determined, eight Hours of Service per day of such absence. For purposes
of this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of a birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection
with the adoption of such child by such individual or (4) for purposes
of caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this
paragraph shall be credited (1) in the computation period in which the
absence begins if the crediting is necessary to prevent a Break in
Service in that period, or (2) in all other cases, in the following
computation period.
2.4 ONE-YEAR BREAK IN SERVICE. Except as provided below regarding
eligibility, the term One-Year Break in Service means any Plan Year
during which an Employee fails to complete more than 500 Hours of
Service.
2.5 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive-month period during which an Employee has completed at
least 1,000 Hours of Service.
For purposes of determining Years of Service and Breaks in Service for
eligibility, the twelve-consecutive-month period shall begin with the
date on which an Employee's employment commenced and, where additional
periods are necessary, on succeeding anniversaries of his employment
commencement date. The employment commencement date is the date on which
the Employee first performs an Hour of Service for the Employer
maintaining the Plan.
The eligibility requirement specified in Article III is one or more full
Years of Service. Such requirement shall be met upon completion of at
least 1,000 Hours of Service for each Year of Service specified.
FOR PURPOSES OF VESTING, THE FOLLOWING PROVISIONS SHALL APPLY:
15
<PAGE> 18
2.6 PERIOD OF SERVICE. The term Period of Service or Service means the
Employer-Employee relationship which begins on the Employee's employment
date and continues until his Severance from Service Date.
An Employee's Period of Service shall include any Period of Severance
beginning on his Severance from Service Date, which is less than 12
months.
2.7 PERIOD OF SEVERANCE. The term Period of Severance means a period of time
commencing on the Participant's Severance from Service Date and ending
on the date such individual is re-employed by the Employer.
2.8 SEVERANCE FROM SERVICE DATE. The Severance from Service Date shall be
the earliest of (A), (B), or (C) below.
(A) The date the Employee terminates employment by reason of a quit,
discharge, permanent Disability, retirement or death.
(B) The second anniversary of the first day the Employee is absent
from Service for maternity or paternity reasons, as described in
the following Section 2.6.
(C) The first anniversary of the first day the Employee separates
from Service for any other reason such as an authorized leave of
absence, sickness, vacation, etc., after which the Employee does
not return to work.
2.9 ONE-YEAR BREAK IN SERVICE. The term One-Year Break in Service shall mean
a 12-consecutive-month Period of Severance, beginning on the Employee's
Severance from Service Date.
In the case of an individual who is absent from Service for maternity or
paternity reasons, the 12-consecutive-month period beginning on the
first anniversary of the first date of such absence shall not constitute
a One-Year Break in Service. An absence from Service for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (4) for purposes
of caring for such child for a period beginning immediately following
such birth or placement.
2.10 YEAR(S) OF SERVICE. The term Year(s) of Service means a Period of
Service equaling 12 months.
Service counted in computing Years of Service need not be consecutive or
continuous, and all fractional Periods of Service shall be aggregated.
2.11 SERVICE UPON RE-EMPLOYMENT. An Employee shall be considered a
re-employed Employee when he is rehired following a One-Year Break in
Service. Upon
16
<PAGE> 19
re-employment, all Service, including Service prior to any One-Year
Break in Service, shall be aggregated in determining such re-employed
Employee's Vesting Percentage.
2.12 PREDECESSOR ORGANIZATION SERVICE. For purposes of this Article, Service
with a predecessor organization of the Employer shall be treated as
Service with the Employer in any case in which the Employer maintains
the Plan of such predecessor organization.
17
<PAGE> 20
ARTICLE III.
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee who was a Participant prior to the Effective
Date and who is in the Service of the Employer on the Effective Date
shall continue as a Participant in the Plan. Each other Employee,
excluding a Leased Employee, shall be eligible to become a Participant
as of the Effective Date or the Entry Date when he first meets the
following requirement(s):
- Age 21
- 900 Hours of Service during first six months of employment or
1,000 Hours of Service per year
- Membership in a collective bargaining unit represented by an
eligible Union or Local that has collectively bargained for
participation in this plan
- Not a non-resident alien with no U.S.-source income
- Not an Independent Contractor
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as of
his Entry Date by completing and delivering to the Administrator an
enrollment form and, if applicable, a Salary Deferral Agreement. He will
then become a Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining his eligibility to again
participate in the Plan:
(A) If the Employee had met the eligibility requirement(s) specified
in Section 3.1 prior to his separation from employment, he shall
become an Active Participant in the Plan as of the date he is
re-employed, after completing the applicable form(s), in
accordance with Section 3.2.
(B) If the Employee had not met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from
employment, he shall be eligible to participate in the Plan on
the first Entry Date following his fulfillment of such
eligibility requirement(s).
For purposes of this Subsection, all Years of Service with the Employer,
including any Years of Service prior to any Breaks in Service, shall be
taken into account.
3.4 ELIGIBLE CLASS. In the event a Participant becomes ineligible to
participate because he is no longer a member of an eligible class of
Employees, such Employee shall participate immediately upon his return
to an eligible class of Employees.
18
<PAGE> 21
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age
requirement and would have previously become a Participant had he been
in the eligible class.
19
<PAGE> 22
ARTICLE IV.
CONTRIBUTIONS
4.1 ELECTIVE DEFERRAL CONTRIBUTIONS. Each Active Participant may enter into
a written Salary Deferral Agreement with the Employer in an amount equal
to not less than 1% nor more than 15% of his Compensation for the
Contribution Period. In consideration of such agreement, the Employer
will make a contribution for each Contribution Period on behalf of the
Participant in an amount equal to the total amount by which the
Participant's Compensation from the Employer was deferred during the
Contribution Period pursuant to the Salary Deferral Agreement then in
effect. Elective Deferral Contributions shall be paid by the Employer to
the Trust not less frequently than monthly, but in no event later than
90 days following the date the amounts were deferred.
Salary Deferral Agreements shall be governed by the following
provisions:
(A) Amounts contributed pursuant to a Salary Deferral Agreement
shall be 100% vested and non-forfeitable at all times.
(B) No Participant shall be permitted to have Elective Deferral
Contributions made under this Plan, or any other qualified plan
maintained by the Employer, during any taxable year, in excess
of the dollar limitation contained in section 402(g) of the Code
in effect at the beginning of the taxable year. However, this
$7,000 limit shall not apply to certain amounts deferred in 1987
that were attributable to Service performed in 1986.
(C) Amounts contributed pursuant to a Salary Deferral Agreement,
which are not in excess of the limit described in Subsection (B)
above, shall be subject to the Limitations on Allocations in
accordance with Article V. Elective Deferral Contributions that
are in excess of the limit described in Subsection (B) shall
also be subject to the Limitations on Allocations in accordance
with Article V.
(D) A Salary Deferral Agreement may be changed by a Participant four
times during the Plan Year, on January 1, April 1, July 1 and
October 1, by filing written notice thereof with the
Administrator. Such notice shall be effective, and the Salary
Deferral Agreement shall be changed on the date specified in
such notice or as soon as administratively possible, which date
must be at least 15 days after such notice is filed.
(E) Elective Deferral Contributions shall be subject to the Actual
Deferral Percentage Test limitations.
(F) Correction of Excess Contributions.
(1) If the Employer determines prior to the end of the Plan
Year that the Actual Deferral Percentage Test may not be
satisfied, the Employer may take the corrective action
specified in Section 4.11 of the Plan.
20
<PAGE> 23
(2) If, after the end of the Plan Year, the Employer
determines that the Plan will fail the Actual Deferral
Percentage Test, the Employer shall take the corrective
action specified in Section 4.13 or Section 4.16 of the
Plan, or a combination of such corrective actions, in
order to ensure that the Plan does not fail the Actual
Deferral Percentage Test for the Plan Year being tested.
4.2 FAIL-SAFE CONTRIBUTION. The Employer reserves the right to make a
discretionary Nonelective Contribution to the Plan for any Plan Year, if
the Employer determines that such a contribution is necessary to ensure
that the Actual Deferral Percentage Test will be satisfied for that Plan
Year. Such amount shall be designated by the Employer at the time of
contribution and shall be known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible
non-Highly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage Test. This contribution
shall be allocated to the Participant's Account of each such Participant
in an amount equal to a fixed percentage of such Participant's
Compensation. The fixed percentage shall be equal to the minimum fixed
percentage necessary to be contributed by the Employer on behalf of each
eligible non-Highly Compensated Employee who is a Participant so that
the Actual Deferral Percentage Test is satisfied.
The Fail-Safe Contribution for any Plan Year as determined above shall
be paid to the Trust at the end of the Plan Year, or as soon as possible
on or after the last day of such Plan Year, but in no event later than
the date which is prescribed by law for filing the Employer's income tax
return, including any extensions thereof.
4.3 PROFITS NOT REQUIRED. Contributions to this Plan shall not be precluded
because the Employer does not have Considered Net Profits.
Notwithstanding the existence of Considered Net Profits, the Employer
may determine in its sole discretion that it will make no contributions
for such Plan Year.
4.4 PAYMENT OF EXPENSES. The Employer may contribute to the Plan the amount
necessary, to pay any applicable expense charges and administration
charges. In lieu of the Employer's contributing the amount necessary to
pay such charges, these expenses may be paid from the Trust fund.
4.5 ALLOCATION OF FORFEITURES. The contributions made by the Employer shall
be reduced by any Forfeitures available as an Employer credit in
accordance with Section 9.3.
4.6 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the Employer
shall be credited to the Participant Account of each Participant for
whom such contributions are made, in accordance with the provisions of
Article XIII.
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<PAGE> 24
4.7 ROLLOVER CONTRIBUTIONS. The Plan may receive Rollover Contributions on
behalf of an Employee. Receipt of a Rollover Contribution shall be
subject to the approval of the Plan Administrator. Before approving the
receipt of a Rollover Contribution, the Plan Administrator may request
any documents or other information from an Employee or opinions of
counsel which the Plan Administrator deems necessary to establish that
such amount is a Rollover Contribution.
A Participant's Account shall be maintained on behalf of each Employee
from whom Rollover Contributions are received, regardless of such
Employee's eligibility to participate in the Plan in accordance with the
requirements of Article III, and Rollover Contributions may be invested
in any manner authorized under the provisions of this Plan.
Rollover Contributions received from an Employee who is not otherwise
eligible to participate in the Plan may not be withdrawn in accordance
with the provisions of Article X until such Employee becomes a
Participant, except that such Employee may receive a distribution of his
Participant's Account if his Termination of Employment occurs.
Rollover Contributions shall be credited to the Participant's Account
and may be invested in any manner authorized under the provisions of
this Plan.
4.8 TRANSFERS. Without regard to the Limitations on Allocations imposed
under Article V, the Plan may receive, directly from another qualified
pension or profit sharing plan meeting the requirements of Internal
Revenue Code section 401 (a), all or part of the entire amount
distributable on behalf of a Participant from such plan. Likewise, the
Plan may receive Transfers representing the assets of any predecessor
plan.
Transfers may be invested in any manner authorized under the provisions
of this Plan.
4.9 SUSPENSION OF ELECTIVE DEFERRAL CONTRIBUTIONS. The following provisions
shall apply with respect to suspension of Elective Deferral
Contributions.
(A) Elective Suspension. An Active Participant may elect to suspend
his Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the
Administrator at any time. The Salary Deferral Agreement shall
be suspended on the date specified in such notice, which date
must be at least 15 days after such notice is filed. The notice
shall specify the period for which such suspension shall be
effective. Such period may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence or
military leave shall have his Salary Deferral Agreement
suspended during such leave. Such suspension of contributions
shall be effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until payment
of Compensation is resumed.
22
<PAGE> 25
(C) Withdrawal Suspension. An Active Participant who elects a
withdrawal in accordance with Article X may have his Salary
Deferral Agreement suspended on the date such election becomes
effective. Such suspension shall remain in effect for the number
of months specified therein.
(D) Non-Elective Suspension. An Active Participant who ceases to
meet the eligibility requirements as specified in Section 3.1
but who remains in the employ of the Employer, shall have his
Salary Deferral Agreement suspended, effective as of the date he
ceases to meet the eligibility requirements. Such suspension
shall remain in effect until he again meets such eligibility
requirements.
The Participant may elect to reactivate his Salary Deferral Agreement
for Elective Deferral Contributions by filing a written notice thereof
with the Plan Administrator. The Salary Deferral Agreement shall be
reactivated at any time following the expiration of the suspension
period described above.
4.10 LIMITATION OF ELECTIVE DEFERRAL CONTRIBUTIONS. If the Employer
determines prior to the end of the Plan Year that the Plan may not
satisfy the Actual Deferral Percentage Test for the Plan Year, the
Employer may require that the amount of Elective Deferral Contributions
being allocated to the accounts of Highly Compensated Employees be
reduced to the extent necessary to prevent Excess Contributions from
being made to the Plan.
Although the Employer may reduce the amount of Elective Deferral
Contributions that may be allocated to the Participant's Account of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the
reduction of Elective Deferral Contributions ceases to exist, the
Employer shall reinstate the amount of Elective Deferral Contributions
elected by the Participant in the Salary Deferral Agreement to the
fullest extent possible for all affected Participants in a
nondiscriminatory manner.
4.11 LIMITATION OF MATCHING CONTRIBUTIONS AND EMPLOYEE CONTRIBUTIONS. If the
Employer determines prior to the end of the Plan Year that the Plan may
not satisfy the Actual Contribution Percentage Test for the Plan Year,
the Employer may require that the amount of Matching Contributions or
Employee Contributions, or both, being allocated to the Accounts of
Highly Compensated Employees be reduced to the extent necessary to
prevent Excess Aggregate Contributions from being made to the Plan.
4.12 CORRECTIVE DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(A) The Employer may distribute Excess Contributions (and income
allocable thereto) to the appropriate Highly Compensated
Employee after the close of the Plan Year in which the Excess
Contribution arose and within 12 months after the close of that
Plan Year.
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<PAGE> 26
(B) The income allocable to Excess Contributions is equal to the sum
of the allocable gain or loss for the Plan Year and shall be
determined as follows:
(1) The income allocable to Excess Contributions is
determined by multiplying the income for the Plan Year
allocable to Deferral Percentage Amounts by a fraction.
The numerator of the fraction is the Excess
Contributions attributable to the Employee for the Plan
Year. The denominator of the fraction is equal to the
sum of (A) the total account balance of the Employee
attributable to Deferral Percentage Amounts as of the
beginning of the Plan Year, plus (B) the Employee's
Deferral Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of distribution shall
not be taken into consideration when determining the
income allocable to Excess Contributions.
(C) The amount of Excess Contributions to be distributed with
respect to an Employee for a Plan Year shall be reduced by
Excess Deferrals previously distributed to the Employee for the
Employee's taxable year ending with or within the Plan Year.
(D) The distribution of Excess Contributions made to the Family
Members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Deferral
Ratio shall be allocated among the Family Members in proportion
to the Elective Deferral Contribution (including any amounts
required to be taken into account under subparagraphs (B)(1)
and (B)(2) of Section 1.8 of the Plan) of each Family Member
that is combined to determine the Actual Deferral Ratio.
(E) A corrective distribution of Excess Contributions (and income)
shall be made without regard to any Participant or spousal
consent or any notice otherwise required under sections 411
(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Contribution being distributed shall
be forfeited. The Matching Contribution so forfeited shall be in
proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the Plan
Year in which the Excess Contribution arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions that
relate to Excess Contributions shall be applied to reduce
Employer contributions or pay Plan expenses.
(G) In no case may the amount of Excess Contributions to be
distributed for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Elective Deferral
Contributions made on behalf of the Highly Compensated Employee
for the Plan Year.
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<PAGE> 27
(H) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Contribution arose, the corrective
distribution must be made as soon as administratively feasible
after the date of the termination of the Plan, but in no event
later than 12 months after the date of termination.
(I) Any distribution of less than the entire amount of Excess
Contributions with respect to any Highly Compensated Employee
shall be treated as a pro-rata distribution of Excess
Contributions and allocable income or loss.
4.13 CORRECTIVE DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding any other
provision of the Plan, Excess Deferrals, plus any income and minus any
loss allocable thereto, may be distributed to any Participant to whose
account Excess Deferrals were allocated for the individual's taxable
year. Such a corrective distribution shall be made in accordance with
this section.
(A) Correction of Excess Deferrals After Taxable Year.
(1) Not later than the March 15 following the close of a
Participant's taxable year, the Participant may notify
the Plan of the amount of Excess Deferrals received by
the Plan during that taxable year. The notification
shall be in writing, shall specify the Participant's
Excess Deferrals, and shall be accompanied by the
Participant's written statement that if such amounts are
not distributed, these amounts, when added to all other
Elective Deferral Contributions made on behalf of the
Participant during the taxable year, shall exceed the
dollar limitation specified in section 402(g) of the
Code.
(2) The Participant is deemed to have notified the Plan of
Excess Deferrals if, not later than the March 1
following the close of a Participant's taxable year, the
Employer notifies the Plan on behalf of the Participant
of the Excess Deferrals. Such Excess Deferrals shall be
calculated by taking into account only Elective Deferral
Contributions under the Plan and any other plans of the
Employer.
(3) Not later than the April 15 following the close of the
taxable year, the Plan shall distribute to the
Participant the amount of Excess Deferrals designated
under subparagraphs (1) or (2) above.
(B) Correction of Excess Deferrals During the Taxable Year. A
Participant who has an Excess Deferral during a taxable year may
receive a corrective distribution during the same year. Such a
corrective distribution shall be made if:
(1) The Participant designates the distribution as an Excess
Deferral. The designation shall be made in the same
manner as the notification described in subparagraph
(A)(1) of this section. The Participant will be deemed
to have designated the distribution as an Excess
Deferral if the Employer
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<PAGE> 28
makes the designation on behalf of the Participant to
the extent that the Participant has Excess Deferrals for
the taxable year calculated by taking into account only
Elective Deferral Contributions to the Plan and other
plans of the Employer.
(2) The corrective distribution is made after the date on
which the Plan received the Excess Deferral.
(3) The Plan designates the distribution as a distribution
of Excess Deferrals.
(C) If the Participant provides the Employer with satisfactory
evidence and written notice to demonstrate that all Elective
Deferral Contributions by the participant in this Plan and any
other qualified plan exceed the applicable limit under section
402(g) of the Code for such individual's taxable year, then the
Plan Administrator may (but is not required to) distribute
sufficient Elective Deferral Contributions (not to exceed the
amount of Elective Deferral Contributions actually contributed
on behalf of the Participant to this Plan during the
Participant's taxable year) from this Plan to allow the
Participant to comply with the applicable limit. The evidence
provided by the Participant must establish clearly the amount of
Excess Deferrals. The Participant must present this evidence to
the Plan Administrator by the March 1 following the end of the
calendar year in which the Excess Deferrals occurred.
(D) Income Allocable to Excess Deferrals. The income allocable to
Excess Deferrals is equal to the sum of allocable gain or loss
for the taxable year of the individual and shall be determined
as follows:
(1) The gain or loss allocable to Excess Deferrals is
determined by multiplying the income for the taxable
year allocable to Elective Deferral Contributions by a
fraction. The numerator of the fraction is the Excess
Deferrals by the Employee for the taxable year. The
denominator of the fraction is equal to the sum of:
(a) The total account balance of the Employee
attributable to Elective Deferral Contributions
as of the beginning of the Plan Year, plus
(b) The Employee's Elective Deferral Contributions
for the taxable year.
(2) The income allocable to Excess Deferrals shall not
include the allocable gain or loss for the period
between the end of the taxable year and the date of
distribution.
(E) No Employee or Spousal Consent Required. A corrective
distribution of Excess Deferrals (and income) shall be made
without regard to any notice or consent otherwise required under
sections 411(a)(11) and 417 of the Code.
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(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Deferral being distributed shall be
forfeited. The Matching Contribution so forfeited shall be in
proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the Plan
Year in which the Excess Deferral arose. Forfeitures of Matching
Contributions or Qualified Matching Contributions that relate to
Excess Deferrals shall be applied to reduce Employer
contributions or pay Plan expenses.
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ARTICLE V.
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATION ON ALLOCATIONS. Definitions - The following definitions are
atypical terms which refer only to terms used in the Limitations on
Allocations Sections of this Article V.
(A) Annual Additions. The term Annual Additions shall mean the sum
of the following amounts allocated on behalf of a Participant
for a Limitation Year.
(1) all contributions made by the Employer which shall
include:
- Elective Deferral Contributions, if any;
- Nonelective Contributions, if any;
(2) all Forfeitures, if any;
(3) all Employee Contributions, if any.
For the purposes of this Article, Excess Amounts reapplied under
Section 5.2(D) shall also be included as Annual Additions.
Also, for the purposes of this Article, Employee Contributions
are determined without regard to deductible employee
contributions within the meaning of section 72(o)(5) of the
Code.
Amounts allocated after March 31, 1984, to an individual medical
account, as defined in Internal Revenue Code section 415(l)(1),
which is part of a defined benefit plan maintained by the
Employer, are treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions paid
or accrued attributable to post-retirement medical benefits
allocated to the separate account of a key employee, as defined
in Internal Revenue Code section 419A(d)(3), under a welfare
benefit fund, as defined in Internal Revenue Code section
419(e), maintained by the Employer, are treated as Annual
Additions to a defined contribution plan.
Contributions do not fail to be Annual Additions merely because
they are Excess Deferrals or Excess or merely because Excess
Contributions are corrected through distribution or
recharacterization. Excess Deferrals that are distributed in
accordance with Section 4.15 of the Plan are not Annual
Additions.
Forfeited Matching Contributions that are forfeited because the
contributions to which they relate are treated as Excess
Aggregate Contributions, Excess Contributions, or Excess
Deferrals and that are reallocated to the Participant Accounts
of other Participants for the Plan Year in which the forfeiture
occurs, are treated as Annual Additions for the Participants to
whose accounts they are reallocated and for the Participants
from whose accounts they are forfeited.
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(B) Compensation. The term Compensation means wages within the
meaning of section 3401(a) of the Code for the purposes of
income tax withholding at the source but determined without
regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor
in section 3401(a)(2) of the Code). For Limitation Years
beginning after December 31, 1991, for purposes of applying the
limitations of this article, Compensation for a Limitation Year
is the Compensation actually paid or made available during such
Limitation Year.
(C) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation shall mean $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set
forth in Internal Revenue Code section 415(b)(1) as in effect
for the Limitation Year.
(D) Employer. The term Employer shall mean the Employer that adopts
this Plan. In the case of a group of employers which constitutes
a controlled group of corporations (as defined in Internal
Revenue Code section 414(b) as modified by section 415(h)), or
which constitutes trades or business (whether or not
incorporated) which are under common control (as defined in
section 414(c) as modified by section 415(h)), or affiliated
service groups (as defined in section 414(m)) of which the
adopting Employer is a part, all such employers shall be
considered a single Employer for purposes of applying the
limitations of this Article.
(E) Excess Amount. The term Excess Amount shall mean the excess of
the Participant's Annual Additions for the Limitation Year over
the Maximum Permissible Amount.
(F) Limitation Year. The term Limitation Year shall mean the Plan
Year.
(G) Maximum Permissible Amount. The term Maximum Permissible Amount
shall mean the lesser of (1) the Defined Contribution Dollar
Limitation, or (2) 25% of the Participant's Compensation for the
Limitation Year.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12
consecutive months, the Maximum Permissible Amount for the short
Limitation Year will be the lesser of (1) the Defined
Contribution Dollar Limitation multiplied by a fraction, the
numerator of which is the number of months in the short
Limitation Year, and the denominator of which is 12, or (2) 25%
of the Participant's Compensation for the short Limitation Year.
5.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not maintain any
qualified plan in addition to this Plan:
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<PAGE> 32
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year shall not
exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan.
(B) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible
Amount may be determined on the basis of the Participant's
estimated annual Compensation. Such Compensation shall be
determined on a reasonable basis and shall be uniformly
determined for all Participants similarly situated. Any employer
contributions based on estimated annual Compensation shall be
reduced by any Excess Amounts carried over from prior years.
(C) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year. In
the event a Participant separates from the Service of the
Employer prior to the end of the Limitation Year, the Maximum
Permissible Amount for such Participant shall be determined
prior to any distribution of his Participant's Account on the
basis of his actual Compensation. Any Excess Amounts shall be
disposed of in accordance with Section 5.2(D).
(D) If there is an Excess Amount with respect to a Participant for a
Limitation Year as a result of a reasonable error in estimating
the Participant's annual compensation, an allocation of
forfeitures, a reasonable error in determining the amount of
elective deferrals (within the meaning of section 402(g)(3) of
the Code) that may be made with respect to any individual under
the limits of section 415 of the Code, or under other limited
facts and circumstances which the commissioner finds justified,
such Excess Amount shall be disposed of as follows:
(1) Any Employee Contributions (including earnings and
losses thereon) shall be returned to the Participant, to
the extent that the return would reduce the Excess
Amount. This distribution shall be made as soon as
administratively feasible after the Excess Amount is
determined. Employee Contributions so returned shall be
disregarded for purposes of the Actual Contribution
Percentage Test.
(2) If, after the application of subparagraph (1), an Excess
Amount still exists, (excluding Elective Deferral
Contributions) such Excess Amount shall be held
unallocated in a suspense account for the Limitation
Year and allocated and reallocated in the next
Limitation Year to all Participants in the Plan. The
excess amount must be used to reduce Employer
Contributions for the next Limitation Year (and
succeeding Limitation Years, as necessary) for all of
the Participants in the Plan. For purposes of this
subparagraph, the Excess Amount may not be distributed
to Participants or former Participants.
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<PAGE> 33
(3) If, after the application of subparagraph (2) an Excess
Amount still exists, then the Participant's Elective
Deferral Contributions (including earnings and losses
thereon) allocated for the Limitation Year shall be
returned to the Participant to the extent that an Excess
Amount exists. This distribution shall be made as soon
as administratively feasible after the Excess Amount is
determined. Any Elective Deferral Contributions returned
under this paragraph shall be disregarded for purposes
of the Actual Deferral Percentage Test.
(4) Alternatively, if after the application subparagraph (1)
an Excess Amount still exists, the Plan Administrator
may elect to dispose of the Excess Amount by applying
the procedure in subparagraph (3) before applying the
procedure in subparagraph (2). If the Plan Administrator
makes this election, the Plan Administrator must apply
it uniformly to all Participants in a Limitation Year.
(5) If a suspense account is in existence at any time during
a Limitation Year pursuant to this section, it will not
participate in the allocation of investment gains or
losses. If a suspense account is in existence at any
time during a particular Limitation Year, all amounts in
the suspense account must be allocated and reallocated
to Participants' Accounts before any Employer
Contributions or Employee Contributions which would
constitute Annual Additions may be made to the Plan for
that Limitation Year.
5.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one or more
defined contribution plans in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year, shall not
exceed the lesser of:
(1) The Maximum Permissible Amount, reduced by the sum of
any Annual Additions allocated to the Participant's
Account for the same Limitation Year under this Plan and
such other defined contribution plan; or
(2) Any other limitation contained in this Plan.
Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in
Subsection (1) above may be determined on the basis of the
Participant's estimated annual Compensation for such Limitation
Year. Such estimated annual Compensation shall be determined for
all Participants similarly situated.
Any contribution made by the Employer based on estimated annual
Compensation shall be reduced by any Excess Amounts carried over
from prior years, if applicable.
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<PAGE> 34
(B) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 5.3(A) shall
be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
(C) If amounts are contributed to a Participant's Account under this
Plan on an allocation date which does not coincide with the
allocation date(s) for all such other plans, and if a
Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount shall
be deemed to have derived from those contributions last
allocated.
(D) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributable to this
Plan will be the product of (1) and (2) below:
(1) The total Excess Amount allocated as of such date
(including any amount which would have been allocated
but for the limitations of Internal Revenue Code section
415).
(2) The ratio of (1) the amount allocated to the Participant
as of such date under this Plan, divided by (2) the
total amount allocated as of such date under all
qualified defined contribution plans (determined without
regard to the limitations of Internal Revenue Code
section 415).
(E) Any Excess Amounts attributed to this Plan shall be disposed of
as provided in Section 5.2(D).
5.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a defined benefit
plan in addition to this Plan:
(A) If an individual is a Participant at any time in both this Plan
and a defined benefit plan maintained by the Employer, the sum
of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for any year may not exceed 1.0. In
the event that the sum of the Defined Contribution Plan Fraction
and the Defined Benefit Plan Fraction exceeds 1.0, the Defined
Contribution Plan Fraction will be reduced until the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction does not exceed 1.0.
If an individual was a Participant in this Plan or in any other
defined contribution plan maintained by the Employer which was
in existence on July 1, 1982, the numerator of the Defined
Contribution Plan Fraction will be adjusted if the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of
(1) the excess of the sum of the Fractions over 1.0 times (2)
the denominator of the Defined Contribution Plan Fraction, will
be permanently subtracted from the numerator of the Defined
Contribution Plan Fraction. The adjustment is calculated using
the Fractions as they would be
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<PAGE> 35
computed as of the later of the end of the last Limitation Year
beginning before January 1, 1983, or June 30, 1983. This
adjustment also will be made if at the end of the last
Limitation Year beginning before January 1, 1984, the sum of the
Fractions exceeds 1.0 because of accruals or additions that were
made before the limitations of this Article became effective to
any plans of the Employer in existence on July 1, 1982.
In addition, if an individual was a Participant in this Plan or
in any other defined contribution plan maintained by the
Employer which was in existence on May 6, 1986, the numerator of
the Defined Contribution Plan Fraction will be adjusted if the
Employer's defined benefit plan was also in existence on May 6,
1986, and the sum of the Defined Contribution Plan Fraction and
the Defined Benefit Plan Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
Fractions over 1.0 times (2) the denominator of the Defined
Contribution Plan Fraction, will be permanently subtracted from
the numerator of the Defined Contribution Plan Fraction. This
adjustment is calculated using the Fractions as they would be
computed as of the end of the last Limitation Year beginning
before January 1, 1987. In the event that a Participant's
accrued benefit as of December 31, 1986, under the defined
benefit plan exceeds the defined benefit dollar limitation set
forth in Internal Revenue Code section 415(b)(1), the amount of
that accrued benefit shall be used in both the numerator and the
denominator of the Defined Benefit Plan Fraction in making this
adjustment.
For purposes of this Section 5.4, all defined benefit plans of
the Employer, whether or not terminated, will be treated as one
defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, will be treated as one
defined contribution plan.
(B) The Defined Benefit Plan Fraction for any year is a fraction,
the numerator of which is the Participant's Projected Annual
Benefit under the defined benefit plan (determined as of the
close of the Limitation Year), and the denominator of which is
the lesser of (1) or (2) below:
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(b)(1)(A) on the last
day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(b)(1)(B) with
respect to such Participant for the Limitation Year.
Notwithstanding the above, if the Participant was a participant
in one or more defined benefit plans maintained by the Employer
which were in existence on July 1, 1982, the denominator of the
Defined Benefit Plan Fraction will not be less than 125% of the
sum of the annual benefits under such plans which the
Participant had accrued as of the later of the end of the last
Limitation Year
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<PAGE> 36
beginning before January 1, 1983 or June 30, 1983. The preceding
sentence applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of Internal
Revenue Code section 415 as in effect at the end of the 1982
Limitation Year.
(C) A Participant's Projected Annual Benefit is equal to the annual
benefit to which the Participant would be entitled under the
terms of the defined benefit plan based upon the following
assumptions:
(1) The Participant will continue employment until reaching
Normal Retirement Age as determined under the terms of
the plan (or current age, if that is later);
(2) The Participant's Compensation for the Limitation Year
under consideration will remain the same until the date
the Participant attains the age described in
sub-division (1) of this subparagraph; and
(3) 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.
(D) The Defined Contribution Plan Fraction for any Limitation Year
is a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's Accounts in such Limitation Year
and for all prior Limitation Years, and the denominator of which
is the lesser of (1) or (2) below for such Limitation Year and
for all prior Limitation Years of such Participant's employment
(assuming for this purpose, that Internal Revenue Code section
415(c) had been in effect during such prior Limitation Years):
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(c)(1)(A) on the last
day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(c)(1)(B) with
respect to such Participant for the Limitation Year.
For the purposes of determining these Limitations on
Allocations, any non-deductible employee contributions made
under a defined benefit plan will be considered to be a separate
defined contribution plan and will be considered to be part of
the Annual Additions for the appropriate Limitation Year.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan
Fraction with respect to any Plan Year
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<PAGE> 37
ending after December 31, 1982, the denominator shall be an
amount equal to the product of:
(1) The denominator of the Defined Contribution Plan
Fraction, computed in accordance with the rules in
effect for the Plan Year ending in 1982; and
(2) the transition fraction, which is a fraction
(a) the numerator of which is the lesser of
(i) $51,875, or
(ii) 1.4 times 25% of the Compensation of the
Participant for the Plan Year ending in
1981, and
(b) the denominator of which is the lesser of
(i) $41,500, or
(ii) 25% of the Compensation of the
Participant for the Plan Year ending in
1981.
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ARTICLE VI.
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. Each Participant may elect, with his Spouse's
consent if required, a distribution in the form of an Annuity, a single
sum cash payment, or a combination of the above. All distributions are
subject to the provisions of Article VIII, Joint and Survivor Annuity
Requirements.
6.2 TIMING OF DISTRIBUTIONS. If the value of a Participant's Vested Interest
exceeds (or at the time of any prior distribution exceeded) $3,500 and
is immediately distributable (as defined in Section 8.5), the
Participant and his Spouse, if required, must consent to the
distribution before it is made.
Instead of consenting to a distribution, the Participant may make a
written election to defer the distribution for a specified period of
time ending no later than the Participant's attainment of age 62. A
Participant whose actual retirement date is on or after his Normal
Retirement Date may make a written election to defer the distribution
for a specified period of time subject to the requirements of Section
6.4. All such elections to defer shall be irrevocable.
If the Participant and Spouse, if applicable, do not consent to a
distribution or if no election to defer is made within 90 days after
receiving a written explanation of the optional forms of benefit
available pursuant to Income Tax Regulation 1.411(a)(11), all benefits
shall be deferred to, and distribution shall be made as of the
Participant's attainment of age 62. The distribution will be made in the
form of a single sum cash payment (in the case of a Participant's
meeting the requirements of Section 8.1 (A)) or in accordance with
Section 8.2 (in the case of a Participant's not meeting the requirements
of Section 8.1 (A)), unless the Participant elects another form of
benefit within the 90-day period prior to the date the distribution is
made.
If the value of a Participant's Vested Interest is $3,500 or less at the
time it becomes payable, the distribution shall be made in the form of a
single sum cash payment and shall be made upon such Participant's
Termination of Employment. Such a distribution may not be deferred.
Unless the Participant elects otherwise, the payment of benefits under
this Plan to the Participant shall begin not later than the 60th day
after the close of the Plan Year in which the later of (A) or (B),
below, occurs:
(A) the date on which the Participant attains his Normal Retirement
Age or age 62, if later; or
(B) the date on which the Participant terminates his Service
(including Termination of Employment, death or Disability) with
the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse,
if required, to consent to a distribution while a benefit is immediately
distributable shall be deemed to
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<PAGE> 39
be an election to defer commencement of payment of any benefit
sufficient to satisfy the above paragraph.
6.3 DISTRIBUTION LIMITATION. Elective Deferral Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions, and
income allocable to each, are not distributable to a Participant or a
Beneficiary, in accordance with such Participant's or Beneficiary's
election, earlier than upon the Participant's Termination of Employment,
death, or disability.
Such amounts may also be distributed upon:
(A) Termination of the Plan without the establishment or maintenance
of a successor plan.
For purposes of this paragraph, a successor plan is any other
defined contribution plan maintained by the same employer.
However, if fewer than two percent of the Employees who are
eligible under the Plan at the time of its termination are or
were eligible under another defined contribution plan at any
time during the 24 month period beginning 12 months before the
time of the termination, the other plan is not a successor plan.
The term "defined contribution plan" means a plan that is a
defined contribution plan as defined in section 414(i) of the
Code, but does not include an employee stock ownership plan as
defined in section 4975(e) or 409 of the Code or a simplified
employee pension as defined in section 408(k) of the Code. A
plan is a successor plan only if it exists at the time the Plan
is terminated or within the period ending 12 months after,
distribution of all assets from the Plan.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump
sum distribution" has the same meaning provided in section
402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(B) The disposition by the Employer to an unrelated corporation of
substantially all the assets (within the meaning of section
409(b)(2) of the Code) used in the trade or business of the
Employer if the Employer continues to maintain this Plan after
the disposition. However, a distribution may be made under this
paragraph only to an Employee who continues employment with the
corporation acquiring such assets.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or
otherwise becomes an employer whose employees accrue benefits
under the Plan. A purchaser also maintains the Plan if the Plan
is merged or consolidated with, or any assets or liabilities are
transferred from the Plan to a plan maintained by the purchaser
in a transaction subject to section 414(l)(1) of the Code. A
purchaser is not treated as maintaining the Plan merely because
the
37
<PAGE> 40
Plan that it maintains accepts rollover contributions of amounts
distributed by the Plan.
For purposes of this paragraph, the sale of "substantially all"
the assets used in a trade or business means the sale of at
least 85 percent of the assets.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump
sum distribution" has the same meaning provided in section
402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(C) The disposition by the Employer to an unrelated entity or
individual of the Employer's interest in a subsidiary (within
the meaning of section 409(d)(3) of the Code) if the Employer
continues to maintain this Plan. However, a distribution may be
made under this paragraph only to an Employee who continues
employment with such subsidiary.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or
otherwise becomes an employer whose employees accrue benefits
under the Plan. A purchaser also maintains the Plan if the Plan
is merged or consolidated with, or any assets or liabilities are
transferred from the Plan to a plan maintained by the purchaser
in a transaction subject to section 414(l)(1) of the Code. A
purchaser is not treated as maintaining the Plan merely because
the Plan that it maintains accepts rollover contributions of
amounts distributed by the Plan.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump
sum distribution" has the same meaning provided in section
402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(D) In the case of Elective Deferral Contributions only, the
attainment of age 59-1/2, as described in Section 10.1 of the
Plan.
(E) In the case of Elective Deferral Contributions only, the
hardship of the Participant, as described in Section 10.2 of the
Plan.
6.4 COMMENCEMENT OF DISTRIBUTIONS. Notwithstanding the provisions of the
preceding Tuning of Distributions Section, distributions to a
Participant will commence no later than the date determined in
accordance with the provisions of this Section.
Distribution to a Participant must commence no later than the required
beginning date. The first required beginning date of a Participant is
the first day of April of the calendar year following the calendar year
in which the Participant attains age 70-1/2.
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The required beginning date of a Participant who attains age 70-1/2
before January 1, 1988, shall be the first day of April of the calendar
year following the calendar year in which the later of retirement or
attainment of age 70-1/2 occurs. Distribution to such Participant must
commence no later than the first day of April following the calendar
year in which the Participant's Termination of Employment occurs.
If distribution to any Participant is made in other than a single sum
payment, the second payment shall be distributed no later than the
December 31 following the April 1 by which the first payment was
required to be distributed. Each succeeding payment shall be distributed
no later than each December 31 thereafter.
6.5 DISTRIBUTION REQUIREMENTS.
(A) Except as otherwise provided in Article VIII, the requirements
of this Section shall apply to any distribution of a
Participant's Accrued Benefit.
(B) All distributions required under this Article shall be
determined and made in accordance with the Income Tax
Regulations under section 401(a)(9), including the minimum
distribution incidental benefit requirement of section
1.401(a)(9)-2 of the regulations.
(C) Limits on Settlement Options. Distributions, if not made in a
lump sum, may only be made over one of the following periods (or
a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated
Beneficiary,
(3) a period certain not extending beyond the life
expectancy of the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(D) Minimum Amounts to be Distributed. If the Participant's entire
Vested Interest is to be distributed in other than a lump sum,
then the amount to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the
Participant's entire Vested Interest by the life expectancy of
the Participant or the joint and last survivor expectancy of the
Participant and designated Beneficiary. Life expectancy and
joint and last survivor expectancy are computed by the use of
the return multiples contained in section 1.72-9 of the Income
Tax Regulations. For purposes of this computation, a
Participant's life expectancy may be recalculated no more
frequently than annually; however, the life expectancy of a
Beneficiary other than the Participant's Spouse may not be
recalculated.
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<PAGE> 42
(1) If the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
life expectancy of the Participant.
(2) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning with
distributions for the first distribution calendar year,
shall not be less than the quotient obtained by dividing
the Participant's benefit by the lesser of (1) the
applicable life expectancy or (2) if the Participant's
Spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of
section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall
be distributed using the applicable life expectancy in
subsection (d)(1) above as the relevant divisor without
regard to regulations section 1.401(a)(9)-2.
(3) The minimum distribution required for the Participant's
first distribution calendar year must be made on or
before the Participant's required beginning date. The
minimum distribution for other calendar years, including
the minimum distribution for the distribution calendar
year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that
distribution calendar year.
6.6 NON-TRANSFERABLE. The Participant's right to any Annuity payments,
benefits, and refunds is not transferable and shall be free from the
claims of all creditors to the fullest extent permitted by law.
6.7 DEATH DISTRIBUTION PROVISIONS. If the Participant dies before
distribution of his Vested Interest commences, the following provisions
shall apply:
(A) If a distribution is to be made to a Beneficiary other than the
Surviving Spouse:
(1) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, unless the Beneficiary
elects another form of distribution, that portion of the
Participant's Vested Interest payable to the Beneficiary
will be distributed in the form of a single sum cash
payment within a reasonable period of time after the
Plan Administrator is notified of the Participant's
death.
(2) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it becomes
payable, the distribution shall always be made in the
form of a single sum cash payment and shall be paid
within a reasonable period of time after the Plan
Administrator is notified of the Participant's death.
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(B) If the distribution is to be made to a Beneficiary who is the
Surviving Spouse, such distribution will be made in accordance
with the following:
(1) If the Participant had never elected a life Annuity form
of distribution under the Plan:
(a) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, unless the
surviving spouse elects another form of
distribution, that portion of the Participant's
Vested Interest payable to the Surviving Spouse
will be distributed in the form of a single sum
cash payment within a reasonable period of time
after the Plan Administrator is notified of the
Participant's death.
(b) If the present value of the Participant's Vested
Interest payable to the Surviving Spouse is
$3,500 or less at the time it becomes payable,
the distribution shall always be made in the
form of a single sum cash payment and shall be
made within a reasonable period of time after
the Plan Administrator is notified of the
Participant's death.
(2) If the Participant had previously elected a life Annuity
form of distribution under the Plan:
(a) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500 and is immediately
distributable (as defined in Section 8.5), the
Surviving Spouse must consent to the
distribution before it is made. If the Surviving
Spouse does not consent to a distribution, all
benefits shall be deferred to a date that
complies with the terms of Section 6.8 (B).
The distribution shall be made in accordance
with the provisions of Section 8.3.
(b) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it
becomes payable, the distribution shall always
be made in the form of a single sum cash payment
and shall be paid within a reasonable period of
time after the Plan Administrator is notified
of the Participant's death.
6.8 DEATH DISTRIBUTION COMMENCEMENT DATE. Upon the death of the Participant,
the following distribution provisions shall take effect:
(A) If the Participant dies after distribution of his entire Vested
Interest has commenced, the remaining portion of such Vested
Interest will continue to be
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distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
In no event shall distribution of the Participant's remaining
Vested Interest be made in a lump sum after the Participant's
death unless such distribution is consented to, in writing, by
the Participant's Surviving Spouse, if any.
(B) If the Participant dies before distribution of his Vested
Interest commences, the Participant's entire Vested Interest
will be distributed no later than five years after the
Participant's death except to the extent that an election is
made to receive distributions in accordance with (1) or (2)
below:
(1) If any portion of the Participant's Vested Interest is
payable to a designated Beneficiary, distributions may
be made in substantially equal installments over the
life or life expectancy of the designated Beneficiary
(or over a period not extending beyond the life
expectancy of such Beneficiary), commencing no later
than one year after the Participant's death;
(2) If the designated Beneficiary is the Participant's
Surviving Spouse, the date distributions are required to
begin in accordance with (1) above shall not be earlier
than the date on which the Participant would have
attained age 70-1/2. However, the Surviving Spouse may
elect, at any time following the Participant's death, to
defer the date on which distributions will begin until
no later than the date on which the Participant would
have attained age 70-1/2 and, if the Spouse dies before
payments begin, subsequent distributions shall be made
as if the Spouse had been the Participant.
(C) For purposes of (B) above, payments will be calculated by use of
the return multiples specified in section 1.72-9 of the Income
Tax Regulations. Life expectancy of a Surviving Spouse may be
recalculated annually; however, in the case of any other
designated Beneficiary, such life expectancy will be calculated
at the time payment first commences without further
recalculation.
(D) For purposes of this Section (Death Distribution Commencement
Date) any amount paid to a child of the Participant will be
treated as if it had been paid to the Surviving Spouse if the
amount becomes payable to the Surviving Spouse when the child
reaches the age of majority.
6.9 TRANSITIONAL RULE.
(A) Notwithstanding the other requirements of this Article and
subject to the requirements of Article VIII, distribution on
behalf of any Employee may be made in accordance with all of the
following requirements (regardless of when such distribution
commences):
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(1) The distribution by the Plan is one which would not have
disqualified such Plan under Internal Revenue Code
section 401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest
in the trust is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(3) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January
1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will
be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee
listed in order of priority.
(B) A distribution upon death will not be covered by this
Transitional Rule unless the information in the designation
contains the required information described above with respect
to the distribution to be made upon the death of the Employee.
(C) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the
Beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in Subsections (A) (1) and (A) (5).
(D) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Internal Revenue Code section
401(a)(9) as amended. Any changes in the designation will be
considered to be a revocation of the designation. However, the
mere substitution or addition of another Beneficiary (one not
named in the designation) under the designation will not be
considered to be a revocation of the designation, so long as
such substitution or addition does not alter the period over
which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant
measuring life).
6.10 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to Section
16.8 may be made without regard to the age or employment status of the
Participant.
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ARTICLE VI.-A
DIRECT ROLLOVERS
6A.1 Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Article, a
Distributee may elect at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover, except as otherwise provided by
the Employer's administrative procedures as permitted by regulations. In
addition, a Distributee's election of a Direct Rollover shall be subject
to the following requirements:
(A) If the Distributee elects to have only a portion of an Eligible
Rollover Distribution paid to an Eligible Retirement Plan in a
Direct Rollover, that portion must be equal to at least $500.
(B) If the entire amount of a Distributee's Eligible Rollover
Distribution is $500 or less, the distribution may not be
divided. Instead, the entire amount must either be paid to the
Distributee or to an Eligible Retirement Plan in a Direct
Rollover.
(C) A Distributee may not elect a Direct Rollover if the
Distributee's Eligible Rollover Distributions during a year are
reasonably expected by the Plan Administrator to total less than
$200 (or any lower minimum amount specified by the Plan
Administrator).
(D) A Distributee may not elect a Direct Rollover of an Offset
Amount.
(E) A Distributee's election to make or not make a Direct Rollover
with respect to one payment in a series of periodic payments
shall apply to all subsequent payments in the series, except
that a Distributee shall be permitted at any time to change,
with respect to subsequent payments in the series of periodic
payments, a previous election to make or not make a Direct
Rollover. A change of election shall be accomplished by the
Distributee notifying the Plan Administrator of the change. Such
notice must be in the form and manner prescribed by the Plan
Administrator.
6A.2 Definitions.
(A) Direct Rollover: A Direct Rollover is a payment by the plan to
the Eligible Retirement Plan specified by the Distributee.
(B) Distributee: A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
Surviving Spouse and the Employee's or former Employee's Spouse
who is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the Spouse or former
Spouse.
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(C) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the
code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the Surviving Spouse, an Eligible Retirement
Plan is an individual retirement account or an individual
retirement annuity.
(D) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(E) Offset Amount: An Offset Amount is the amount by which a
Participant's Account is reduced to repay a loan from the Plan
(including the enforcement of the Plan's security interest in
the Participant's Account).
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ARTICLE VII.
RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement Age
shall have a Vesting Percentage of 100%. If a Participant retires from
the active Service of the Employer on his Normal Retirement Date, he
shall be entitled to receive a distribution of the entire value of his
Participant's Account as of his Normal Retirement Date.
7.2 LATE RETIREMENT. A Participant may continue in the Service of the
Employer after his Normal Retirement Age, and in such event he shall
retire on his Late Retirement Date. Such Participant shall continue as a
Participant under this Plan until such Late Retirement Date. The
Participant shall have a Vesting Percentage of 100% and shall be
entitled to receive a distribution of the entire value of his
Participant's Account as of his Late Retirement Date.
7.3 DISABILITY RETIREMENT. A Participant who retires from the Service of the
Employer on account of Disability shall have a Vesting Percentage of
100% and shall be entitled to receive a distribution of the entire value
of his Participant's Account as of his Disability Retirement Date.
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<PAGE> 49
ARTICLE VIII.
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 GENERAL. The provisions of this Article shall take precedence over any
conflicting provision in this Plan.
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or after
August 23, 1984, and such other Participants as provided in Section 8.7,
unless:
(A) upon the death of the Participant the Participant's entire
Vested Interest will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or, if the
Surviving Spouse has already consented in a manner conforming to
a Qualified Election, then to the Participant's designated
Beneficiary;
(B) the Participant does not elect payments in the form of a Life
Annuity and has not previously elected payments in the form of a
Life Annuity under the Plan, and
(C) as to the Participant, the Plan is not a direct or indirect
transferee of a defined benefit plan, money purchase pension
plan (including a target benefit plan), stock bonus, or
profit-sharing plan which would otherwise provide for a Life
Annuity form of payment to the Participant.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form
of benefit is selected pursuant to a Qualified Election within the
ninety-day period ending on the first day on which all events have
occurred which entitle the Participant to a benefit, a married
Participant's Vested Interest will be paid in the form of a Qualified
Joint and Survivor Annuity.
An unmarried Participant will be provided a single Life Annuity unless
the Participant elects another form of benefit during the applicable
Election Period.
8.3 PAYMENT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional
form of benefit has been selected within the Election Period pursuant to
a Qualified Election, if a married Participant dies before his Annuity
Starting Date, then the Participant's entire Vested Interest, less the
amount of any unpaid loan balance outstanding under the terms of Article
X-A, shall be applied toward the purchase of an immediate Annuity for
the life of the Surviving Spouse. As an alternative to receiving the
benefit in this form of an Annuity, the Surviving Spouse may elect to
receive a single cash payment or any other form of payment provided for
in the Plan within a reasonable time after the Participant's death.
8.4 DEFINITIONS.
(A) Election Period: The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on
the date of the Participant's
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death. If a Participant separates from Service prior to the
first day of the Plan Year in which age 35 is attained, with
respect to the account balance as of the date of separation, the
Election Period shall begin on the date of separation.
A Participant who has not attained age 35 as of the end of a
Plan Year, may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period
beginning on the date of such election and ending on the first
day of the Plan Year in which the Participant will attain age
35. Such election shall not be valid unless the Participant
receives a written explanation of the Qualified Preretirement
Survivor Annuity in such terms as are comparable to the
explanation required under Section 8.6 (A). Qualified
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after such date
shall be subject to the full requirements of this Article.
(B) Qualified Election: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(a) the Participant's Spouse consents in writing to the
election; (b) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal consent
(or the Spouse expressly permits designations by the Participant
without any further spousal consent); (c) the Spouse's consent
acknowledges the effect of the election; and (d) the Spouse's
consent is witnessed by a Plan representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a Plan
representative that such written consent cannot be obtained
because:
(1) there is no Spouse;
(2) the Spouse cannot be located;
(3) the Participant is legally separated or has been
abandoned within the meaning of local law, and the
Participant has a court order to such effect;
(4) of other circumstances as the Secretary of the Treasury
may by regulations prescribe,
the Participant's election to waive coverage will be considered
a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to
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<PAGE> 51
such Spouse. A consent that permits designations by the
Participant without any requirement of further consent by such
Spouse must acknowledge that the Spouse has the right to limit
consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects
to relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The
number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant has
received notice as provided in Section 8.6 below.
(C) Qualified Joint and Survivor Annuity: An immediate Annuity for
the life of the Participant with a survivor Annuity for the life
of the Spouse which is not less than 50% and not more than 100%
of the amount of the Annuity which is payable during the joint
lives of the Participant and the Spouse and which is the amount
of benefit which can be purchased with the Participant's entire
Vested Interest. If no survivor Annuity percentage has been
specified in an election, the percentage payable to the Spouse
will be 50%.
Notwithstanding the above paragraph, a Qualified Joint and
Survivor Annuity for an unmarried Participant shall mean an
Annuity for the life of the Participant.
(D) Qualified Preretirement Survivor Annuity: A survivor Annuity for
the life of the Spouse in the amount which can be purchased with
the Participant's entire Vested Interest.
(E) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the
Participant. A former Spouse may be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified
Domestic Relations Order as described in Internal Revenue Code
section 414(p).
8.5 CONSENT REQUIREMENTS. Only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is immediately distributable.
Neither the consent of the Participant nor the Participant's Spouse
shall be required to the extent that a distribution is required to
satisfy section 401(a)(9) or section 415 of the Code. An account balance
is immediately distributable if any part of the account balance could be
distributed to the Participant (or Surviving Spouse) before the
Participant attains (or would have attained if not deceased) the later
of Normal Retirement Age or age 62.
8.6 NOTICE REQUIREMENTS.
(A) In the case of a Qualified Joint and Survivor Annuity as
described in Section 8.4 (C), the Plan Administrator shall
provide each Participant within a reasonable period prior to the
commencement of benefits a written explanation of: (i) the terms
and conditions of a Qualified Joint and Survivor Annuity; (ii)
the Participant's right to make and the effect of an election to
waive the Qualified
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Joint and Survivor Annuity form of benefit; (iii) the rights of
a Participant's Spouse; (iv) the right to make, and the effect
of, a revocation of a previous election to waive the Qualified
Joint and Survivor Annuity; (v) a general description of the
eligibility conditions and other material features of the
optional forms of benefit; and (vi) sufficient additional
information to explain the relative values of the optional forms
of benefit available to them under this Plan.
(B) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 8.4 (D), the Plan Administrator shall
provide each Participant within the period beginning on the
first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age 35, a written
explanation of the Qualified Preretirement Survivor Annuity in
such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section 8.6
(A) to a Qualified Joint and Survivor Annuity.
If a Participant enters the Plan after the first day of the Plan
Year in which the Participant attained age 32, the Plan
Administrator shall provide notice no later than the close of
the second Plan Year succeeding the entry of the Participant in
the Plan.
If a Participant enters the Plan after he has attained age 35,
the Plan Administrator shall provide notice within a reasonable
period of time following the entry of the Participant in the
Plan.
If a Participant's Termination of Employment occurs before the
Participant attains age 35, the Plan Administrator shall provide
notice within one year of such Termination of Employment.
8.7 TRANSITIONAL RULES.
(A) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by
the previous Sections of this Article must be given the
opportunity to elect to have the prior Sections of this Article
relating to the Qualified Preretirement Survivor Annuity apply
if such Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had
at least 10 Years of Service for vesting purposes when he
separated from Service.
(B) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
Section 8.7 (D).
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(C) The respective opportunities to elect (as described in Sections
8.7 (A) and 8.7 (B) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise commence to said
Participants.
(D) Any Participant who has elected pursuant to Section 8.7 (B) of
this Article and any Participant who does not elect under
Section 8.7 (A) or who meets the requirements of Section 8.7 (A)
except that such Participant does not have at least 10 Years of
Service for vesting purposes when he separates from Service,
shall have his benefits distributed in accordance with all of
the following requirements if benefits would have been payable
in the form of a life annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(a) begins to receive payments under the Plan on or
after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while
still working for the Employer; or
(c) begins to receive payments on or after the
Qualified Early Retirement Age; or
(d) separates from Service on or after attaining
Normal Retirement Age (or the Qualified Early
Retirement Age) and after satisfying the
eligibility requirements for the payment of
benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in
the form of a Qualified Joint and Survivor Annuity,
unless the Participant has elected otherwise during the
election period. The election period must begin at least
six months before the Participant attains Qualified
Early Retirement Age and end not more than 90 days
before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of Early Survivor Annuity: A Participant who is
employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, during the
election period, to have a survivor annuity payable on
death. If the Participant elects the survivor annuity,
payments under such Annuity must not be less than the
payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her
death. Any election under this provision will be in
writing and may be changed by the Participant at any
time. The election period begins on the later of (1) the
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<PAGE> 54
90th day before the Participant attains the Qualified
Early Retirement Age, or (2) the date on which
participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Section 8.7 (D):
(a) Qualified Early Retirement Age is the latest of:
(i) the earliest date, under the Plan, on
which the Participant may elect to
receive retirement benefits; or
(ii) the first day of the 120th month
beginning before the Participant reaches
Normal Retirement Age; or
(iii) the date the Participant begins
participation.
(b) Qualified Joint and Survivor Annuity is an
Annuity for the life of the Participant with a
survivor annuity for the life of the Spouse as
described in Section 8.4 (C).
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ARTICLE IX.
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of Employment, he shall
be entitled to receive a distribution of his entire Vested Interest.
Such distribution shall be further subject to the terms and conditions
of Article VI.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and the Participant does not take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, the non-vested portion of his Participant's Account
will become a Forfeiture upon the date the Participant incurs five
consecutive One-Year Breaks in Service.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and such Participant does take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, or if the Participant's Vesting Percentage is 0%,
the non-vested portion of his Participant's Account will become a
Forfeiture immediately.
If the Participant, whose non-vested portion of his Participant's
Account became a Forfeiture in accordance with the terms of the
preceding paragraph, is later rehired by the Employer and re-enrolls in
the Plan, Subsection (A), (B) or (C) below, as applicable, will apply:
(A) If the Participant was 0% vested at his Termination of
Employment and did not incur five consecutive One-Year Breaks in
Service after such date, the amount which became a Forfeiture,
if any, shall be restored by the Employer at the time such
Participant re-enrolls in the Plan. The Forfeiture, so restored,
shall be included as part of that portion of his Participant's
Account subject to the Vesting Percentage.
(B) If the Participant's Vesting Percentage was not 100% at his
Termination of Employment and if the Participant did not incur
five consecutive One-Year Breaks in Service after such date, the
Participant shall be entitled to repay the portion of the
distribution made at his Termination of Employment derived from
Employer Contributions. The portion of the repayment that is
attributable to amounts that were subject to the Vesting
Percentage will no longer be considered a distribution for
purposes of determining the Participant's Vested Interest. The
repayment of such portion must be made before the Participant
has incurred five consecutive One-Year Breaks in Service
following the date he received the distribution or five years
after the Participant is rehired by the Employer, whichever is
earlier.
If the Participant elects to make such repayment, the amount
which became a Forfeiture, if any, shall be restored by the
Employer at the same time such repayment is made. The
Forfeiture, so restored, and the repayment shall be
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included as part of that portion of his Participant's Account
subject to the Vesting Percentage. However, if the Participant
does not elect to repay the distribution made in accordance with
this Article within the period of time specified above, that
Forfeiture shall remain a Forfeiture.
(C) If the Participant had incurred five consecutive One-Year Breaks
in Service after his Termination of Employment, the amount which
became a Forfeiture shall remain a Forfeiture and such
Participant shall be prohibited from repaying a distribution
made at his Termination of Employment.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once the
Participant incurs five consecutive One-Year Breaks in Service in
accordance with Article II.
9.3 APPLICATION OF FORFEITURES. Any Forfeiture arising in accordance with
the provisions of Section 9.1 shall be used by the Employer to reduce
and in lieu of the contributions made by the Employer next due under
Article IV, or to pay Plan expenses, at the earliest opportunity after
such Forfeiture becomes available.
The provisions of the preceding sentence notwithstanding, in the event
that a former Participant is rehired by the Employer and the Employer is
required by the provisions of Section 9.1 of this Plan to restore the
amount of a separate account that had been created upon such
Participant's prior Termination of Employment and later forfeited,
Forfeitures, if any, will first be used to restore such separate account
to its value as of such Participant's prior Termination of Employment
date. In the event that the available Forfeitures are not sufficient to
make such restoration, the Employer will make an additional contribution
sufficient to make such restoration.
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ARTICLE X.
WITHDRAWALS
10.1 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. Distributions of Elective Deferral Contributions may be
made to a Participant in the event of a hardship. For purposes of this
section, a distribution is made on account of hardship only if the
distribution is made both on account of an immediate and heavy financial
need of the Employee and is necessary to satisfy the financial need. In
addition, for Plan Years beginning after December 31, 1988 any
distribution on account of hardship shall be limited to the
distributable amount described in paragraph (C) of this section.
(A) The following are the only financial needs considered immediate
and heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d) of
the Code previously incurred by the Employee, the
Employee's Spouse, or any dependents of the Employee (as
defined in section 152 of the Code) or necessary for
these persons to obtain medical care described in
section 213(d) of the Code;
(2) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Employee, his Spouse, children, or dependents (as
defined in section 152 of the Code);
(3) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage
payments); or
(4) Payments necessary to prevent the eviction of the
Employee from the Employee's principal residence or
foreclosure on the mortgage on that residence.
(B) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if all
of the following requirements are satisfied:
(1) The hardship distribution is not in excess of the amount
of the immediate and heavy financial need of the
Employee. The amount of an immediate and heavy financial
need may include the amounts necessary to apply any
federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
(2) The Employee had obtained all distributions, other than
hardship distributions, and all nontaxable (at the time
of the loan) loans currently available under all plans
maintained by the Employer.
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(3) The Employee is suspended from making Elective Deferral
Contributions and Employee Contributions to the Plan for
at least 12 months after receipt of the hardship
distribution. In addition, the Employee must be
prohibited under the terms of the plan or an otherwise
enforceable agreement from making Elective Deferral
Contributions and Employee Contributions to all other
plans maintained by the Employer for at least 12 months
after receipt of the hardship distribution.
For this purpose, the phrase "all other plans of the
Employer" means all qualified and nonqualified plans of
deferred compensation maintained by the Employer. The
phrase includes a stock option, stock purchase, or
similar plan, or a cash or deferred arrangement that is
part of a cafeteria plan within the meaning of section
125 of the Code. However, it does not include the
mandatory employee contribution part of a defined
benefit plan. It also does not include a health or
welfare benefit plan, including one that is part of a
cafeteria plan within the meaning of section 125 of the
Code.
(4) The Employee may not make Elective Deferral
Contributions to the Plan for the Employee's taxable
year immediately following the taxable year of the
hardship distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable year
less the amount of such Employee's Elective Deferral
Contributions for the taxable year of the hardship
distribution. In addition, all other plans maintained by
the Employer must limit the Employee's Elective Deferral
Contributions for the next taxable year to the
applicable limit under section 402(g) of the Code for
that year minus the Employee's Elective Deferral
Contributions for the year of the hardship distribution.
(C) The distributable amount is equal to the Employee's total
Elective Deferral Contribution as of the date of distribution,
reduced by the amount of previous distributions of Elective
Deferral Contributions on account of hardship. The Employee's
total Elective Deferral Contributions shall be increased by
income allocable to Elective Deferral Contributions. In the case
of income allocable to Elective Deferral Contributions, the
distributable amount may only include amounts that were credited
to the Employee's Account as of December 31, 1988.
10.2 WITHDRAWAL OF PRIOR EMPLOYER CONTRIBUTIONS. A Participant may elect to
withdraw from his Participant's Account, at any time, an amount equal to
any whole percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account attributable to the value of his Prior Employer
Contributions, including earnings.
10.3 WITHDRAWAL OF PRIOR EMPLOYEE CONTRIBUTIONS. A Participant may elect to
withdraw from his Participant's Account, at any time, an amount equal to
any whole
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percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account attributable to the value of his Prior Employee
Contributions, including earnings.
10.4 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. At any time a Participant may
elect to withdraw from his Participant's Account an amount up to 100% of
the value of that portion of his account attributable to his Rollover
Contributions as defined in Article IV. Such an election shall become
effective in accordance with the Notification Section below.
10.5 NOTIFICATION. The Participant shall notify the Administrator in writing
of his election to make a withdrawal under the preceding provisions of
this Article X. Any such election shall be effective as of the date
specified in such notice, which date must be at least 15 days after such
notice is filed. Payment of the withdrawal shall be subject to the terms
and conditions of Article VI.
10.6 NON-REPAYMENT. Withdrawals made in accordance with this Article X may
not be repaid.
10.7 SPOUSAL CONSENT TO WITHDRAWAL. Prior to obtaining a withdrawal in
accordance with this Article X, a married Participant must obtain
spousal consent in accordance with the provisions of Article VIII unless
such Participant meets the requirements set forth in Sections 8.1(A),
(B) and (C).
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ARTICLE X.-A
LOANS
10A.1 LOANS TO PARTICIPANTS. The Plan Administrator may make a bona fide loan
to a Participant, in an amount which, when added to the outstanding
balance of all other loans to the Participant from all qualified plans
of the Employer, does not exceed the lesser of $50,000 reduced by the
excess of the Participant's highest outstanding loan balance during the
12 months preceding the date on which the loan is made over the
outstanding loan balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account. Participants
will be limited to only one outstanding loan at a time.
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided,
however, that all loans granted hereunder:
(A) are available to all Participants and Beneficiaries, who are
parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis;
(B) are not made available to Highly Compensated Employees on a
basis greater than the basis made available to other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) unless a Participant meets the requirements set forth in
Sections 8.1(A), (B) and (C), are made only after a Participant
obtains the consent of his Spouse, if any, to use his
Participant's Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be so
secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent shall thereafter
be binding with respect to the consenting Spouse or any
subsequent Spouse with respect to that loan. A new consent shall
be required if the Participant's Account is used for
renegotiation, extension, renewal or other revision of the loan.
(F) are made in accordance with and subject to all of the provisions
of this Article.
10A.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set of
procedures, set forth in the summary plan description, by which all
loans will be administered. Such rules, which are incorporated herein by
reference, will include, but not be limited to, the following:
(A) the person or persons authorized to administer the loan program,
identified by name or position;
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(B) the loan application procedure;
(C) the basis for approving or denying loans;
(D) any limits on the types of loans permitted;
(E) the procedure for determining a "reasonable" interest rate;
(F) acceptable collateral;
(G) default conditions; and
(H) steps which will be taken to preserve Plan assets in the event
of default.
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ARTICLE XI.
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan. Each Fiduciary shall act
with the care, skill, prudence, and diligence under the circumstances
that a prudent man acting in a like capacity and familiar with such
matters would use in conducting an enterprise of like character and with
like aims, in accordance with the documents and instruments governing
this Plan, insofar as such documents and instruments are consistent with
this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may serve
in more than one fiduciary capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which
he may be entitled as a Participant or Beneficiary in this Plan, so long
as the benefit is computed and paid on a basis which is consistent with,
the terms of this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to prevent any
Fiduciary from receiving any reasonable compensation for services
rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer
shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been appointed, he is
required to acknowledge in writing that he has undertaken a Fiduciary
responsibility with respect to the Plan.
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ARTICLE XII.
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or
persons to serve as Administrator under the Plan and such person, by
joining in the execution of this Plan and Trust Agreement accepts such
appointment and agrees to act in accordance with the terms of the Plan.
12.2 DUTIES AND AUTHORITY. The Administrator shall administer the Plan in a
nondiscriminatory manner for the exclusive benefit of Participants and
their Beneficiaries.
The Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof, including but not limited to the following:
(A) To determine all questions relating to a Participant's coverage
under the Plan;
(B) To maintain all necessary records for the administration of the
Plan;
(C) To compute and authorize the payment of retirement income and
other benefit payments to eligible Participants and
Beneficiaries;
(D) To interpret and construe the provisions of the Plan and to make
regulations which are not inconsistent with the terms thereof;
and
(E) To advise or assist Participants regarding any rights, benefits,
or elections available under the Plan.
The Administrator shall take all such actions as are necessary to
operate, administer, and manage the Plan as a retirement program which
is at all times in full compliance with any law or regulation affecting
this Plan.
The Administrator may allocate certain specified duties of plan
administration to an individual or group of individuals who, with
respect to such duties, shall have all reasonable powers necessary or
appropriate to accomplish them.
12.3 EXPENSES AND COMPENSATION. All expenses of administration may be paid
out of the Trust fund unless paid by the Employer. Such expenses shall
include any expenses incident to the functioning of the Administrator,
including, but not limited to, fees of accountants, counsel, and other
specialists and their agents, and other costs of administering the Plan.
Until paid, the expenses shall constitute a liability of the Trust fund.
However, the Employer may reimburse the Trust fund for any
administration expense incurred. Any administration expense paid to the
Trust fund as a reimbursement shall not be considered an Employer
Contribution. Nothing shall prevent the Administrator from receiving
reasonable compensation for services rendered in
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administering this Plan, unless the Administrator already receives
full-time pay from any Employer adopting the Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to perform his
functions, the Employer shall supply full and timely information to the
Administrator on all matters relating to this Plan as the Administrator
may require.
12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one person has been duly nominated to serve on the Administrative
Committee and has signified in writing the acceptance of such
designation, the signature(s) of one or more persons may be accepted by
an interested party as conclusive evidence that the Administrative
Committee has duly authorized the action therein set forth and as
representing the will of and binding upon the whole Administrative
Committee. No person receiving such documents or written instructions
and acting in good faith and in reliance thereon shall be obliged to
ascertain the validity of such action under the terms of this Plan. The
Administrative Committee shall act by a majority of its members at the
time in office and such action may be taken either by a vote at a
meeting or in writing without a meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Administrator, or
any member of the Administrative Committee, may resign at any time by
delivering to the Employer a written notice of resignation, to take
effect at a date specified therein, which shall not be less than 30 days
after the delivery thereof, unless such notice shall be waived.
The Administrator may be removed with or without cause by the Employer
by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than 30 days after delivery
thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Administrator, shall promptly designate a successor
Administrator who must signify acceptance of this position in writing.
In the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new
Administrator has been appointed and has accepted such appointment.
12.7 INVESTMENT MANAGER. The Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest or dispose of all or any part of the Trust
assets. With regard to the assets entrusted to his care, the Investment
Manager shall provide written instructions and directions to the
Trustee, who shall in turn be entitled to rely upon such written
direction. This appointment and delegation shall be evidenced by a
signed written agreement.
12.8 DELEGATION OF DUTIES. The Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary
and non-Fiduciary duties, responsibilities and functions as the
Administrator shall deem advisable for the
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proper management and administration of the Plan in the best interests
of the Participants and their Beneficiaries.
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ARTICLE XIII.
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the
Employer acting in his behalf, shall notify the Administrator of a claim
of benefits under the Plan. Such request shall be in writing to the
Administrator and shall set forth the basis of such claim and shall
authorize the Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take such steps
as may be necessary to facilitate the payment of any benefits to which
the Participant or Beneficiary may be entitled under the terms of the
Plan.
A decision by the Administrator shall be made promptly and not later
than 90 days after the Administrator's receipt of the claim of benefits
under the Plan, unless special circumstances require an extension of the
time for processing, in which case a decision shall be rendered as soon
as possible, but not later than 180 days after the initial receipt of
the claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant must
be provided, setting forth (1) the specific reasons for the denial; (2)
the specific reference to pertinent Plan provisions on which the denial
is based; (3) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why such material or information is necessary; and (4) an explanation of
the Plan's claim review procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary may (1)
request a review by a Named Fiduciary, other than the Administrator,
upon written application to the Plan; (2) review pertinent Plan
documents; and (3) submit issues and comments in writing to a Named
Fiduciary. A Participant or Beneficiary shall have 60 days after receipt
by the claimant of written notification of a denial of a claim to
request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for
review, unless special circumstances require an extension of the time
for processing, in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall be in writing
and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based.
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A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions or
to seek such relief as may be necessary or appropriate to compel the
disclosure of any required information, to enforce or protect his
rights, to recover present benefits due to him, or to clarify his rights
to future benefits under the Plan.
13.5 REINSTATEMENT OF BENEFIT. In the event any portion of a distribution
which is payable to a Participant or a Beneficiary shall remain unpaid
on account of the inability of the Plan Administrator, after diligent
effort, to locate such Participant or Beneficiary, the amount so
distributable shall be treated as a Forfeiture under the Plan. If a
claim is made by the Participant or Beneficiary for any benefit
forfeited under this section, such benefit shall be reinstated.
13.6 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or
any other rights or interest in the Plan or Trust fund other than those
specifically herein set forth.
13.7 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of his length of
Service with the Employer, shall be fully vested (100%) at all times in
any portion of his Participant's Account attributable to the following:
- Rollover Contributions
- Prior Employee Contributions.
13.8 MERGERS OR TRANSFERS. In the case of any merger or consolidation with or
transfer of assets or liabilities to any other qualified plan after
September 2, 1974, the following conditions must be met:
(A) The sum of the account balances in each plan shall equal the
fair market value (determined as of the date of the merger or
transfer as if the plans had then terminated) of the entire plan
assets.
(B) The assets of each plan shall be combined to form the assets of
the plan as merged (or transferred).
(C) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall have an account balance
equal to the sum of the account balances the Participant had in
the plans immediately prior to the merger (or transfer).
(D) Immediately after the merger (or transfer) each Participant in
the plan merged (or transferred) shall be entitled to the same
optional benefit forms as he was entitled to immediately prior
to the merger (or transfer).
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In the case of any merger or consolidation with or transfer of assets or
liabilities to any defined benefit plan after September 2, 1974, one of
the plans before such merger, consolidation, or transfer shall be
converted into the other type of plan and either the rules described
above, applicable to the merger of two defined contribution plans, or
the rules applicable to the merger of two defined benefit plans, as
appropriate, shall be applied.
13.9 PARTICIPANT'S ACCOUNT AND VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such account is
distributed in accordance with the terms of this Plan. At least once per
year, as of the last day of the Plan Year, each Participant's Account
shall be adjusted for any earnings, gains, losses, contributions,
withdrawals, loans, and expenses, attributable to such Plan Year, in
order to obtain a new valuation of the Participant's Account.
13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have the exclusive
authority to direct the investment of contributions made to his
Participant's Account. In accordance with the procedures established by
the Plan Administrator, the Participant shall elect to have a specified
percentage invested in one or more investment funds, as long as the
designated percentage for each fund is a whole number, and the sum of
the percentages allocated is equal to 100%. In addition, the Participant
may change such election once every month at any time. All investment
changes are subject to the rules of the investment fund(s) in which the
Participant's Account is or is to be invested.
13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate amounts
invested pursuant to the section above to be transferred between the
investment funds once every month at any time in accordance with the
procedures established by the Plan Administrator.
Notwithstanding the above, the transfer of amounts between investment
funds shall be subject to the rules of the investment funds in which the
Participant's Account is invested or is to be invested.
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ARTICLE XIV.
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF PLAN. The Employer shall have the right from time to time
to modify or amend, in whole or in part, any or all provisions of the
Plan, provided that a Board of Directors' resolution pursuant to such
modification or amendment shall first be adopted and provided further
that the modification or amendment is signed by the Employer and the
Administrator. Upon any such modification or amendment the Administrator
and the Trustee shall be furnished a copy thereof. No amendment shall
deprive any Participant or Beneficiary of any Vested Interest hereunder.
Any Participant having not less than three Years of Service shall be
permitted to elect, in writing, to have his Vesting Percentage computed
under the Plan without regard to such amendment.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan Amendment is adopted and end
no later than after the latest of the following dates:
(A) The date which is 60 days after the day the amendment is
adopted; or
(B) The date which is 60 days after the day the amendment becomes
effective; or
The date which is 60 days after the day the Participant is issued
written notice of the amendment by the Employer or Administrator.
Such written election by a Participant shall be made to the
Administrator.
No amendment to the Plan shall decrease a Participant's Account balance
or eliminate an optional form of distribution. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to
the extent permitted under Internal Revenue Code section 412(c)(8).
Furthermore, no amendment to the Plan shall have the effect of
decreasing a Participant's Vested Interest determined without regard to
such amendment as of the later of the date such amendment is adopted or
the date it becomes effective.
14.2 CONDITIONS OF AMENDMENT. The Employer shall not make any amendment which
would cause the Plan to lose its status as a qualified plan within the
meaning of section 401(a) of the Code.
14.3 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right to
terminate the Plan at any time by resolution of its Board of Directors.
Upon such termination, the liability of the Employer to make
contributions hereunder shall terminate.
14.4 FULL VESTING. Upon the termination or partial termination of the Plan,
or upon complete discontinuance of Employer contributions, the rights of
all affected Participants in and to the amounts credited to each such
Participant's Account shall be 100% vested and nonforfeitable.
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14.5 DISTRIBUTIONS UPON PLAN TERMINATION. If this Plan is terminated and the
Employer does not maintain or establish another defined contribution
plan, pursuant to Code section 401(k)(10)(A)(i), each Participant shall
receive a total distribution, in the form of a lump-sum distribution as
defined in Code section 401(k)(10)(B)(ii), of his Participant's Account
in accordance with the terms and conditions of Article VI.
However, if this Plan is terminated and the Employer does maintain or
establish another defined contribution plan as discussed in the above
paragraph, or if the Plan is only partially terminated, each Participant
shall receive a total distribution of his Participant's Account,
excluding any amounts attributable to Elective Deferral Contributions
and contributions made by the Employer designated as 401(k)
contributions in accordance with the terms and conditions of Article VI.
In such a situation, any amounts in a Participant's Account attributable
to Elective Deferral Contributions and contributions made by the
Employer designated as 401(k) contributions may be distributed only upon
the occurrence of an event described in Article VI.
No Participant and/or spousal consent will be required for a
distribution where no successor plan exists. However, if the Employer
does maintain a successor plan, Participant and/or spousal consent is
required for a distribution exceeding $3,500. The Participant's Account
will be transferred to such successor plan if the required consents are
not received.
14.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
Forfeitures which have not been applied as of such termination to reduce
the contribution made by the Employer shall be credited on a pro rata
basis to the Participant's Account of the then Active Participants in
the same manner as the last contribution made by the Employer under the
Plan.
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is subject
to the condition precedent that the Employer's Plan shall be approved
and qualified by the Internal Revenue Service as meeting the
requirements of section 401(a) of the Internal Revenue Code and that
the Trust established in connection herewith shall be entitled to
exemption under the provisions of section 501(a). In the event the Plan
initially fails to qualify and the Internal Revenue Service issues a
final ruling that the Employer's Plan or Trust fails to so qualify as of
the Effective Date, all liability of the Employer to make further
contributions hereunder shall cease. The Plan Administrator, Trustee and
any other Named Fiduciary shall be notified immediately by the Employer,
in writing, of such failure to qualify. Upon such notification, the
value of the Participants' Accounts shall be distributed in cash to the
Employer, subject to the terms and conditions of Article VI.
That portion of such distribution which is attributable to Participant
Contributions as specified in Section 13.7, if any, shall be paid to the
Participant, and the balance of such distribution shall be paid to the
Employer.
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14.8 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no longer
qualified within the meaning of section 401(a) of the Internal Revenue
Code, or that the Trust is no longer entitled to exemption under the
provisions of section 501(a), and if the Employer shall fail within a
reasonable time to make any necessary changes in order that the Plan
and/or Trust shall so qualify, the Participants' Accounts shall be fully
vested and nonforfeitable and shall be disposed of as if the Plan had
terminated, in the manner set forth in this Article XIV.
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ARTICLE XV.
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 13.8 the
Employer may substitute an individually designed plan or a master or
prototype plan for this Plan without terminating this Plan as embodied
herein and this shall be deemed to constitute an amendment and
restatement in its entirety of this Plan as heretofore adopted by the
Employer, provided, however, that the Employer shall have certified to
the Trustee that this Plan is being continued on a restated basis which
meets the requirements of section 401(a) of the Internal Revenue Code
and ERISA.
15.2 TRANSFER OF ASSETS. Upon 90 days written notification from the Employer
that a different plan meeting the requirements set forth in Section 15.1
above has been executed and entered into by the Administrator and the
Employer, and after the Trustee has been furnished the Employer's
certification in writing that the Employer intends to continue the Plan
as a qualified Plan under section 401(a) of the Internal Revenue Code
and ERISA, assets which represent the value of all Participant's
Accounts may be transferred in accordance with the instructions received
from or on behalf of the Employer. The Trustee may rely fully on the
representations or directions of the Employer with respect to any such
transfer and shall be fully protected and discharged with respect to any
such transfer made in accordance with such representations,
instructions, or directions.
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ARTICLE XVI.
MISCELLANEOUS
16.1 NON-REVERSION. This Plan has been established by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except as
otherwise provided in Sections 14.7, 16.7, and 16.8, under no
circumstances shall any funds contributed hereunder, at any time, revert
to or be used by the Employer, nor shall any such funds or assets of any
kind be used other than for the benefit of the Participants or their
Beneficiaries.
16.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except when
otherwise indicated by the context, either the masculine or the neuter
pronoun shall be deemed to include the masculine, the feminine, and the
neuter, and the singular shall be deemed to include the plural.
16.3 REFERENCE TO THE CODE AND ERISA. Any reference to any section of the
Internal Revenue Code, ERISA, or to any other statute or law shall be
deemed to include any successor law of similar import.
16.4 GOVERNING LAW. The Plan and Trust shall be governed and construed in
accordance with the laws of the state where the Trustee has its
principal office if the Trustee is a corporation or an association,
otherwise under the laws of the state where the Employer has its
principal office.
16.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply with
all requirements for qualification under the Internal Revenue Code and
ERISA, and if any provision hereof is subject to more than one
interpretation or any term used herein is subject to more than one
construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan being
so qualified. If any provision of the Plan is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provisions, and this Plan shall be construed and enforced as if
such provision had not been included.
16.6 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or
in part either directly or by operation of law or otherwise, including.
but without limitation, execution, levy, garnishment, attachment,
pledge, bankruptcy or in any other manner, and no right or interest of
any Participant in the Plan shall be liable for or subject to any
obligation or liability of such Participant. The preceding sentence
shall not preclude the enforcement of a federal tax levy made pursuant
to section 6331 of the Code or the collection by the United States on a
judgement resulting from an unpaid tax assessment.
16.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer by
a mistake of fact, Section 16.1 shall not prohibit the return of such
contribution to the Employer within one year
71
<PAGE> 74
after the payment of the contribution, and (2) if a contribution is
conditioned upon the deductibility of the contribution under section 404
of the Code, then, to the extent the deduction is disallowed, Section
16.1 shall not prohibit the return to the Employer of such contribution
(to the extent disallowed) within one year after the disallowance of the
deduction. The amount which may be returned to the Employer is the
excess of (1) the amount contributed over (2) the amount that would have
been contributed had there not occurred a mistake of fact or a mistake
in determining the deduction. Earnings attributable to the excess
contribution may not be returned to the Employer, but losses
attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to the
mistaken contribution would cause the balance of the individual account
of any Participant to be reduced to less than the balance which would
have been in the account had the mistaken amount not been contributed,
then the amount to be returned to the Employer would have to be limited
so as to avoid such reduction.
16.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any other
provisions of this Plan, the Participant's Account may be segregated and
distributed pursuant to a Qualified Domestic Relations Order within the
meaning of Internal Revenue Code section 414(p). The Plan Administrator
shall establish procedures for determining if a Domestic Relations Order
is qualified within the meaning of section 414(p).
72
<PAGE> 75
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to
as the "Employer") established the Dominick's Finer Foods, Inc. 401(k)
Retirement Plan for Union Employees (hereinafter referred to as the "Plan")
effective March 25, 1957 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under
the terms thereof, and
WHEREAS, the Employer desires to amend the Plan to provide for
its funding through a Group Annuity Contract issued by Connecticut General Life
Insurance Company and to transfer all Plan assets; and
WHEREAS, the Employer now desires to amend the Plan and restate
its provisions to comply with the requirements of the Tax Reform Act of 1986
(TRA `86), the Omnibus Budget Reconciliation Act of 1986 (OBRA `86), and the
Unemployment Compensation Amendment of 1992 (UCA `92) if applicable;
NOW THEREFORE, the Plan is hereby amended and restated in its
entirety effective January 1, 1993 except as follows:
1. Effective for calendar years beginning on January 1,
1987, the provisions regarding limits on Elective Deferral Contributions shall
be amended and governed by the terms of Article IV of the Plan attached hereto.
2. Effective on the first day of the Plan Year beginning in
1987, the provisions relating to the special nondiscrimination test for Elective
Deferral Contributions under Code section 401(k), as defined in Article I,
shall be amended and governed by the terms of the Plan attached hereto.
3. Effective on the first day of the Plan Year beginning in
1987, the provisions relating to the special nondiscrimination test for Matching
Contributions and Employee Contributions under Code section 401(m), as defined
in Article I, shall be amended and governed by the terms of the Plan attached
hereto.
4. Effective on the first day of the Plan Year beginning in
1987, the provisions defining Highly Compensated Employee shall be amended and
governed by the terms of Article I of the Plan attached hereto.
73
<PAGE> 76
5. Effective on the first day of the Plan Year beginning in
1987, the provisions regarding loans shall be amended and governed by the terms
of Article X-A of the Plan attached hereto. However, prior to October 18, 1989,
if a Participant's Vested Interest in his Participant's Account was less than
$20,000, the Participant was able to borrow up to the lesser of $10,000 or his
Vested Interest attributable to contributions which were available for loans.
6. Effective on the first day of the Plan Year beginning in
1987, the provisions regarding Limitations on Allocations shall be amended and
governed by the terms of Article V of the Plan attached hereto.
7. Effective on the first day of the Plan Year beginning in
1987, contributions made to this Plan shall no longer require Considered Net
Profits.
8. Effective on the first day of the Plan Year beginning in
1989, Compensation for purposes of the Plan shall be limited to a maximum of
$200,000.
9. Effective on January 1, 1989, the provisions relating to
required minimum distributions shall be amended and governed by the terms of the
Plan attached hereto.
10. Effective on the first day of the Plan Year beginning in
1989, the provisions relating to withdrawals for Serious Financial Hardship
shall be amended and governed by the terms of Article X of the Plan attached
hereto.
11. Effective on the first day of the 1992 Plan Year, the
provisions relating to the determination of a financial need for a Serious
Financial Hardship shall be liberalized in accordance with the rules set forth
in the final 401(k) regulations.
12. Effective on the first day of the 1992 Plan Year, the
provisions relating to the correction of excess Annual Additions shall be
amended and governed by the terms of Article V of the Plan attached hereto.
13. Effective January 1, 1993, the provisions relating to
Direct Rollovers shall be added to the Plan as governed by the terms of Article
VI-A of the Plan attached hereto.
14. Effective for Plan Years beginning in 1994, Compensation
shall be limited to a maximum of $150,000.
15. The terms of the Plan as heretofore set forth shall no
longer apply with respect to Participants under the Plan who have not terminated
employment (including terminations on account of Retirement, death or
Disability); and the terms of the Plan with respect to such Participants shall
henceforth be as set forth in the Dominick's Finer Foods, Inc. 401(k) Retirement
Plan for Union Employees, a copy of which is attached to and forms a part of
this amendment.
16. The Plan and Trust as amended and restated, shall
represent a continuation of the prior Plan and Trust as heretofore set forth and
shall not abridge or curtail any rights accorded to Participants under said
prior instrument.
74
<PAGE> 77
IN WITNESS WHEREOF, the Employer, the Administrator and the
Trustee have hereunto affixed their signatures.
Executed at on June 24, 1994
--------------------------
DOMINICK'S FINER FOODS, INC.
By /s/ Charles L.B.
- ---------------------------------- --------------------------------------
Witness
Title S.V.P. Human Resources
-----------------------------------
Accepted this 24th day of June, 1994.
By /s/ Chris Wendt
- ---------------------------------- --------------------------------------
Witness Administrator
Accepted this 21st day of July, 1994.
/s/ Maria E. Malave By /s/ J.G.S.
- ---------------------------------- --------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of
its employees can provide you with legal advice in connection with the execution
of this document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
75
<PAGE> 78
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to
as the "Employer") established the Dominick's Finer Foods, Inc. 401(k)
Retirement Plan for Union Employees (hereinafter referred to as the "Plan")
effective March 25, 1957 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in
section 14.1 thereof, and
WHEREAS, the Employer now desires to amend the Plan to reflect
that investment changes and transfers may be made at any time; and
NOW THEREFORE, the Plan is hereby amended effective June 30,
1995 as follows:
1. Section 13.10 is deleted in its entirety and replaced
with the following:
"13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have
the exclusive authority to direct the investment of
contributions made to his Participant's Account. In accordance
with the procedures established by the Plan Administrator, the
Participant shall elect to have a specified percentage invested
in one or more investment funds, as long as the designated
percentage for each fund is a whole number, and the sum of the
percentages allocated is equal to 100%. In addition, the
Participant may change such election at any time. All investment
changes are subject to the rules of the investment fund(s) in
which the Participant's Account is or is to be invested."
2. Section 13.11 is deleted in its entirety and replaced
with the following:
"13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may
designate amounts invested pursuant to the section above to be
transferred between the investment funds at any time in
accordance with the procedures established by the Plan
Administrator.
Notwithstanding the above, the transfer of amounts between
investment funds shall be subject to the rules of the investment
funds in which the Participant's Account is invested or is to be
invested."
76
<PAGE> 79
IN WITNESS WHEREOF, the Employer, the Administrator and the
Trustee have hereunto affixed their signatures.
Executed at Dominick's Finer Foods on November 15, 1995
DOMINICK'S FINER FOODS, INC.
/s/ A.S. By /s/ Robert G. M.
- ---------------------------------- --------------------------------------
Witness
Title President & C.O.O.
-----------------------------------
Accepted this 15th day of
November, 1995.
/s/ L. Alexander By /s/ L. Canter
- ---------------------------------- --------------------------------------
Witness Administrator
Accepted this ___ day of _________.
By
- ---------------------------------- --------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of
its employees can provide you with legal advice in connection with the execution
of this document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
77
<PAGE> 80
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to
as the "Employer") established the Dominick's Finer Foods, Inc. 401(k)
Retirement Plan for Union Employees (hereinafter referred to as the "Plan")
effective March 25, 1957 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in
section 14.1 thereof; and
WHEREAS, the Employer now desires to amend the Plan to reflect
that Participants may have two outstanding loans at a time; and
NOW THEREFORE, the Plan is hereby amended effective October 1,
1995 as follows:
Section 10A.1 is deleted in its entirety and replaced with the following:
"10A.1 LOANS TO PARTICIPANTS. The Plan Administrator may make a
bona fide loan to a Participant, in an amount which, when added
to the outstanding balance of all other loans to the Participant
from all qualified plans of the Employer, does not exceed the
lesser of $50,000 reduced by the excess of the Participant's
highest outstanding loan balance during the 12 months preceding
the date on which the loan is made over the outstanding loan
balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account.
Participants will be limited to only two outstanding loan at a
time.
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided, however, that
all loans granted hereunder:
(A) are available to all Participants and Beneficiaries, who
are parties-in-interest pursuant to section 3(14) of
ERISA, on a reasonably equivalent basis;
(B) are not made available to Highly Compensated Employees
on a basis greater than the basis made available to
other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) unless a Participant meets the requirements set forth in
Sections 8.1(A), (B) and (C), are made only after a
Participant obtains the consent of his
78
<PAGE> 81
Spouse, if any, to use his Participant's Account as
security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that
ends on the date on which the loan is to be so secured.
The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent shall
thereafter be binding with respect to the consenting
Spouse or any subsequent Spouse with respect to that
loan. A new consent shall be required if the
Participant's Account is used for renegotiation,
extension, renewal or other revision of the loan.
(F) are made in accordance with and subject to all of the
provisions of this Article."
IN WITNESS WHEREOF, the Employer, the Administrator and the
Trustee have hereunto affixed their signatures.
Executed at Dominick's Finer Foods on November 15, 1995
DOMINICK'S FINER FOODS, INC.
/s/ A.S. By /s/ R.G.M.
- ---------------------------------- --------------------------------------
Witness
Title President & C.O.O.
----------------------------------
Accepted this 15th day of November, 1995.
/s/ A.S. By /s/ L. Canter
- ---------------------------------- --------------------------------------
Witness Administrator
By
- ---------------------------------- --------------------------------------
Witness Trustee
Accepted this ___ day of _________.
79
<PAGE> 82
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of
its employees can provide you with legal advice in connection with the execution
of this document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
80
<PAGE> 83
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to
as the "Employer") established the Dominick's Finer Foods, Inc. 401(k)
Retirement Plan for Union Employees (hereinafter referred to as the "Plan")
effective March 25, 1957 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in
Section 14.1 thereof; and
WHEREAS, the Employer now desires to amend the Plan to define
the term Highly Compensated Employee, to permit deferral elections to be
revocable, to permit age 59-1/2 withdrawals, and to permit terminated
Participants to make withdrawals;
NOW THEREFORE, the Plan is hereby amended effective January 1,
1996 as follows:
1. Section 1.31A is added to the Plan as follows:
"HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated
Employee means any Highly Compensated Active Employee or Highly
Compensated Former Employee as further defined herein.
For purposes of the determination of Highly Compensated
Employees, the term Compensation means Compensation as defined
in Article V of the Plan, but includes the amount of any
elective contributions made by the Employer on the Employee's
behalf to a cafeteria plan established in accordance with the
provisions of Code section 125, a qualified cash or deferred
arrangement in accordance with the provisions of Code section
402(e)(3), a simplified employee pension plan in accordance with
the provisions of Code section 402(h), or a tax sheltered
annuity plan maintained in accordance with the provisions of
Code section 403(b).
A "Highly Compensated Active Employee" is any Employee who
performs services for the Employer during the current Plan Year
and who, during the current Plan Year or the 12-month period
immediately preceding such Plan Year:
(A) Owns (or is considered to own within the meaning of
section 318 of the Code, as modified by section
416(i)(1)(B)(iii) of the Code), more than 5% of the
outstanding stock of the Employer or stock possessing
more than 5% of the total combined voting power of all
stock of the Employer, or, if the Employer is other than
a corporation, owns more than 5% of the capital or
profits interest in the Employer. The determination of
5% ownership shall be made separately for each member of
a controlled group
81
<PAGE> 84
of corporations (as defined in Code section 414(b)), or
of a group of trades or businesses (whether or not
incorporated) that are under common control (as defined
in Code section 414(c)), or of an affiliated service
group (as defined in Code section 414(m)); or
(B) Receives Compensation in excess of $75,000 multiplied by
the applicable cost-of-living adjustment factor
prescribed under Code section 415(d) and then prorated
in the case of a short Plan Year; or
(C) Receives Compensation in excess of $50,000, as adjusted
for cost-of-living increases in accordance with Code
section 415(d) and then prorated in the case of a short
Plan Year, and is in the top 20% of Employees ranked by
Compensation; or
(D) Is, at any time, an officer of the Employer and receives
Compensation in excess of 50% of the amount in effect
under Code section 415(b)(1)(A) for the applicable
period.
If no officer receives Compensation in excess of the
amount specified above, the highest paid officer for the
applicable period shall be a Highly Compensated
Employee.
In no event if there are more than 500 Employees, shall
more than 50 Employees or, if there are less than 500
Employees, shall the greater of three Employees or 10%
of all Employees, be taken into account as officers.
In determining both the top 20% of Employees ranked by
Compensation for purposes of paragraph (C) above, and officers
of the Employer for purposes of paragraph (D) above, Employees
who have not completed six months of Service by the end of the
applicable period, Employees who normally work less than 17-1/2
hours per week, Employees who normally work less than six months
during a year, Employees who have not attained 21, and
nonresident aliens who receive no earned income from U.S.
sources shall be excluded.
Also excluded under the above paragraph are Employees who are
covered by an agreement which the Secretary of Labor finds to be
a collective bargaining agreement. Such Employees will be
excluded only if retirement benefits were the subject of good
faith bargaining, 90% of the Employees of the Employer are
covered by the agreement, and the Plan covers only Employees who
are not covered by the agreement.
Notwithstanding the above provisions, an Employee, other than a
5% owner as described in paragraph (A) above who was not highly
compensated during the 12-month period immediately preceding the
current Plan Year will not be considered to be a Highly
Compensated Employee in the current Plan Year unless
82
<PAGE> 85
such Employee is one of the top 100 Employees ranked by
Compensation for the current Plan Year.
A "Highly Compensated Former Employee" is any former Employee
who separated from Service with the Employer in a Plan Year
preceding the current Plan Year and was a Highly Compensated
Active Employee in either:
(A) the Plan Year in which his separation from Service
occurred; or
(B) any Plan Year ending on or after such former Employee's
55th birthday.
A former Employee is an Employee who performs no services for
the Employer during a Plan Year (for example, by reason of a
leave of absence)."
2. Section 10.9 is added to the Plan as follows:
"WITHDRAWAL AFTER AGE 59-1/2. A Participant who has attained age
59-1/2, may elect to withdraw from his Participant's Account, at
any time, an amount which is equal to any whole percentage (not
exceeding 100%) of his Vested Interest in his Participant's
Account attributable to:
- Elective Deferral Contributions, including earnings
- Prior Employer Contributions, including earnings
- Rollover Contributions, including earnings
- Prior Employee Contributions, including earnings."
NOW THEREFORE, the Plan is hereby amended effective June 1, 1996
as follows:
1. Section 6.1 is deleted in its entirety and replace with
the following:
"DISTRIBUTION IN GENERAL. Each Participant may elect, with his
Spouse's consent if required, a distribution in the form of an
Annuity, a single sum cash payment, or a combination of the
above. A Participant who is no longer an Employee of the
Employer, may elect a distribution from his Participant's
Account, at any time, an amount which is equal to any whole
percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account. All distributions are subject to the
provisions of Article VIII, Joint and Survivor Annuity
Requirements."
2. The second paragraph of Section 6.2 is deleted in its
entirety and replaced with the following:
83
<PAGE> 86
"Instead of consenting to a distribution, the Participant may
make a written election to defer the distribution for a
specified period of time ending no later than the Participant's
attainment of age 62. A Participant whose actual retirement date
is on or after his Normal Retirement Date may make a written
election to defer the distribution for a specified period of
time subject to the requirements of Section 6.4. All such
elections to defer shall be revocable."
84
<PAGE> 87
IN WITNESS WHEREOF, the Employer, the Administrator and the
Trustee have hereunto affixed their signatures.
Executed at _______________________ on _____________________, 19_____
DOMINICK'S FINER FOODS, INC.
/s/ Sonya M.B. By /s/ Robert A.M.
- ----------------------------------- --------------------------------------
Witness
Title President and C.E.O.
-----------------------------------
Accepted this 7th day of October, 1996.
/s/ Margaret S. By /s/ L.M.
- ----------------------------------- --------------------------------------
Witness Administrator
Accepted this 21st day of October, 1996.
/s/ S.A. Coelho By /s/ Robert W.S.
- ----------------------------------- --------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of
its employees can provide you with legal advice in connection with the execution
of this document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
85
<PAGE> 88
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to
as the "Employer") established the Dominick's Finer Foods, Inc. 40l(k)
Retirement Plan for Union Employees (hereinafter referred to as the "Plan")
effective March 25, 1957 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in
Section 14.1 thereof; and
WHEREAS, the Employer now desires to amend the Plan to reflect
changes in the Plan's entry dates and eligibility requirements;
NOW THEREFORE, the Plan is hereby amended effective July 1, 1997
as follows:
1. Section 1.24 is deleted in its entirety and replaced
with the following:
"ENTRY DATE. The term Entry Date means either the Effective Date
or the first scheduled payroll period thereafter when an
Employee who has fulfilled the eligibility requirements
commences participation in the Plan.
If an Employee is not in the active Service of the Employer as
of his initial Entry Date, his subsequent Entry Date shall be
the date he returns to the active Service of the Employer,
provided he still meets the eligibility requirements. If an
Employee does not enroll as a Participant as of his initial
Entry Date, his subsequent Entry Date shall be the applicable
Entry Date as specified above when the Employee actually enrolls
as a Participant."
2. Section 3.1 is deleted in its entirety and replaced with
the following:
"ELIGIBILITY. Each Employee who was a Participant prior to the
Effective Date and who is in the Service of the Employer on the
Effective Date shall continue as a Participant in the Plan. Each
other Employee, excluding a Leased Employee, shall be eligible
to become a Participant as of the Effective Date or the Entry
Date when he first meets the following requirement(s):
- Age 18
- Six months of employment
- Membership in a collective bargaining unit represented
by an eligible Union or Local that has collectively
bargained for participation in this plan
- Not a non-resident alien with no U.S.-source income
86
<PAGE> 89
- Not an Independent Contractor"
IN WITNESS WHEREOF, the Employer and the Administrator have
hereunto affixed their signatures.
Executed at ____________________ on _____________________, 19_____
DOMINICK'S FINER FOODS, INC.
/s/ Margaret S. By /s/ Robert A. M.
- ------------------------------------ --------------------------------------
Witness Title
-----------------------------------
Accepted this 21st day of July, 1997.
By /s/ Laurie M.
- ------------------------------------ --------------------------------------
Witness Administrator
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of
its employees can provide you with legal advice in connection with the execution
of this document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
87
<PAGE> 90
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to
as the "Employer") established the Dominick's Finer Foods, Inc. 401(k)
Retirement Plan for Union Employees (hereinafter referred to as the "Plan")
effective March 25,1957 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under
the terms thereof, and
WHEREAS, the Employer now desires to amend the Plan under the
Small Business Job Protection Act of 1996 ("SBJPA") as it relates to all
employees who reach age 70-1/2 in a calendar year beginning after December 31,
1998 under Section 6.4 of the Plan; and
NOW THEREFORE, the Plan is hereby amended effective December 31,
1998 as follows:
Section 6.4 of the Plan entitled "COMMENCEMENT OF
DISTRIBUTIONS" is hereby amended by deleting the last sentence of the second
paragraph and the entire third and fourth paragraphs thereof, and adding in
their place the following:
"The first required beginning date of a Participant is the first
day of April of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70-1/2, or
(ii) the calendar year in which the Participant retires."
88
<PAGE> 91
IN WITNESS WHEREOF, the Employer and the Administrator have
hereunto affixed their signatures.
Executed at 505 Railroad Ave. on December 23, 1998
DOMINICK'S FINER FOODS, INC.
/s/ Margaret S. By /s/ D.C. Howard
- ------------------------------------ --------------------------------------
Witness
Title Director Human Resources
-----------------------------------
Accepted this ___ day of _________.
By
- ------------------------------------ --------------------------------------
Witness Administrator
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of
its employees can provide you with legal advice in connection with the execution
of this document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
89
<PAGE> 1
EXHIBIT 4.7
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR NON-UNION EMPLOYEES
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
<PAGE> 2
Table Of Contents
ARTICLE I. DEFINITIONS.......................................................1
ARTICLE II. SERVICE.........................................................16
ARTICLE III. ELIGIBILITY, ENROLLMENT AND PARTICIPATION......................19
ARTICLE IV. CONTRIBUTIONS...................................................21
ARTICLE V. LIMITATIONS ON ALLOCATIONS.......................................32
ARTICLE VI. DISTRIBUTIONS OF BENEFITS.......................................39
ARTICLE VI-A. DIRECT ROLLOVERS..............................................46
ARTICLE VII. RETIREMENT BENEFITS............................................48
ARTICLE VIII. JOINT AND SURVIVOR ANNUITY REQUIREMENTS.......................49
ARTICLE IX. TERMINATION OF EMPLOYMENT.......................................54
ARTICLE X. WITHDRAWALS......................................................56
ARTICLE X-A. LOANS..........................................................58
ARTICLE XI. FIDUCIARY DUTIES AND RESPONSIBILITIES...........................60
ARTICLE XII. THE ADMINISTRATOR..............................................61
ARTICLE XIII. PARTICIPANTS' RIGHTS..........................................63
ARTICLE XIV. AMENDMENT OR TERMINATION OF THE PLAN...........................66
ARTICLE XV. SUBSTITUTION OF PLANS...........................................68
ARTICLE XVI. MISCELLANEOUS..................................................69
ARTICLE XVI-A. TOP-HEAVY PROVISIONS.........................................71
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ARTICLE I.
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any Participant
who (a) performs duties as an Employee for the Employer, and (b) is not
an Inactive Participant.
1.3 ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution Percentage
means the average of the Actual Contribution Ratios of a specified group
computed to the nearest one-hundredth of one percent.
1.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the contribution
percentage requirement described in section 401(m)(2) of the
Code and the regulations thereunder, which are incorporated
herein.
The Plan satisfies the Actual Contribution Percentage Test if:
(1) The Actual Contribution Percentage for the group of
eligible Highly Compensated Employees is not more than
the Actual Contribution Percentage for the group of all
other eligible Employees multiplied by 1.25; or
(2) The excess of the Actual Contribution Percentage for the
group of eligible Highly Compensated Employees over the
Actual Contribution Percentage for the group of all
other eligible Employees is not more than two percentage
points, and the Actual Contribution Percentage for the
group of eligible Highly Compensated Employees is not
more than the Actual Contribution Percentage for the
group of all other eligible Employees multiplied by two.
(B) Special Rules.
(1) For purposes of determining the Actual Contribution
Percentage Test, Employee Contributions are considered
to have been made in the Plan Year in which they were
contributed to the Plan. Matching Contributions and
Qualified Nonelective Contributions will be considered
for a Plan Year only if allocated to the Employee's
Account as of any date within the Plan Year being tested
and only if made before the last day of the twelve-month
period immediately following the Plan Year to which such
contributions relate.
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(2) A Matching Contribution that is forfeited to correct
Excess Aggregate Contributions, or because the
contribution to which it relates is treated as an Excess
Contribution, Excess Deferral, or Excess Aggregate
Contribution, shall not be taken into account for
purposes of the Actual Contribution Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Contribution
Percentage Test, including records showing the extent to
which Qualified Nonelective Contributions and Elective
Deferral Contributions are taken into account.
1.5 ACTUAL CONTRIBUTION RATIO.
(A) An Employee's Actual Contribution Ratio is the sum of the
Contribution Percentage Amounts allocated to the Employee's
Account for the Plan Year (including any amounts required to be
taken into account under subparagraphs (B)(1) and (B)(2) of
this section) divided by the Employee's Compensation for the
Plan Year. If no Matching Contributions, Employee Contributions,
Qualified Nonelective Contributions, or Elective Deferral
Contributions are taken into account with respect to an eligible
Employee, the Actual Contribution Ratio of the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit
percentage test), or if one or more other plans satisfy
the requirements of section 410(b) of the Code (other
than the average benefit percentage test) only if
aggregated with this Plan, then this section shall be
applied by determining the Actual Contribution Ratios of
Employees as if all such plans were a single plan. Plans
may be aggregated only if they have the same Plan Year.
(2) The Actual Contribution Ratio of a Highly Compensated
Employee who is eligible to participate in more than one
plan of the Employer to which Employee Contributions or
Matching Contributions are made shall be calculated by
treating all such plans in which the Employee is
eligible to participate as one plan. For Plan Years
beginning after December 31, 1988, if a Highly
Compensated Employee participates in two or more plans
that have different plan years, all plans ending with or
within the same calendar year shall be treated as a
single plan. However, plans that are not permitted to be
aggregated under Treasury Regulation section
1.401(m)-I(b)(3)(ii) shall not be aggregated for
purposes of this section.
(3) For purposes of determining the Actual Contribution
Ratio of a Participant who is a 5-percent owner or one
of the ten most highly-paid Highly
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Compensated Employees, the, Contribution Percentage
Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts (including
any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of this section) and
Compensation for the Plan Year of all Family Members.
If the Participant is required to be aggregated as a
member of more than one family group under the Plan, all
eligible Employees who are members of those family
groups that include that Employee are aggregated as one
family group.
Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Actual Contribution Ratio both for
Participants who are Nonhighly Compensated Employees and
for Participants who are Highly Compensated Employees.
(4) The determination and treatment of the Actual
Contribution Ratio amounts of any Participant shall
satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
1.6 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage means
the average of the Actual Deferral Ratios of a specified group, computed
to the nearest one-hundredth of one percent.
1.7 ACTUAL DEFERRAL PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the Actual Deferral
Percentage Test described in section 401(k)(3) and the
regulations thereunder, which are herein incorporated by
reference.
The Plan satisfies the Actual Deferral Percentage Test for a
Plan Year only if:
(1) The Actual Deferral Percentage for the group of eligible
Highly Compensated Employees is not more than the Actual
Deferral Percentage for the group of all other eligible
Employees multiplied by 1.25; or
(2) The excess of the Actual Deferral Percentage for the
group of eligible Highly Compensated Employees over the
Actual Deferral Percentage for the group of all other
eligible Employees is not more than two percentage
points, and the Actual Deferral Percentage for the group
of eligible Highly Compensated Employees is not more
than the Actual Deferral Percentage for the group of all
other eligible Employees multiplied by two.
(B) Special Rules.
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(1) For purposes of determining the Actual Deferral
Percentage Test, Elective Deferral Contributions,
Qualified Nonelective Contributions, and Qualified
Matching Contributions must be allocated to the
Employee's Account as of a date within the Plan Year
being tested and must be made before the last day of the
twelve-month period immediately following the Plan Year
to which such contributions relate.
(2) The Excess Deferrals of a Highly Compensated Employee
shall be taken into account for purposes of the Actual
Deferral Percentage Test. Conversely, the Excess
Deferrals of an Employee who is a Nonhighly Compensated
Employee shall not be taken into account for purposes of
the Actual Deferral Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral
Percentage Test, including the extent to which Qualified
Nonelective Contributions and Qualified Matching
Contributions are taken into account.
1.8 ACTUAL DEFERRAL RATIO.
(A) An Employee's Actual Deferral Ratio for the Plan Year is the sum
of the Employee's Deferral Percentage Amounts allocated to the
Employee's Account for the Plan Year (including any amounts
required to be taken into account under subparagraphs (B)(1)
and (B)(2) of this section), divided by the Employee's
Compensation taken into account for the Plan Year. If an
eligible Employee makes no Elective Deferral Contributions, and
no Qualified Matching Contributions or Qualified Nonelective
Contributions are taken into account with respect to the
Employee, the Actual Deferral Ratio of the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit
percentage test), or if one or more other plans satisfy
the requirements of section 410(b) of the Code (other
than the average benefit percentage test) only if
aggregated with this Plan, then this section shall be
applied by determining the Actual Deferral Ratio of
Employees as if all such plans were a single plan. Plans
may be aggregated only if they have the same Plan Year.
(2) The Actual Deferral Ratio of a Highly Compensated
Employee who is eligible to participate in more than one
cash or deferred arrangement (as described in section
401(k) of the Code) of the same Employer shall be
calculated by treating all the cash or deferred
arrangements in which the Employee is eligible to
participate as one arrangement. If the cash or deferred
arrangements that are treated as a single arrangement
under the
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preceding sentence are parts of plans that have
different Plan Years, the cash or deferred arrangements
are treated as a single arrangement with respect to the
Plan Years ending with or within the same calendar year.
However, plans that are not permitted to be aggregated
under Treasury Regulation section
1.401(k)-I(b)(3)(ii)(B) are not aggregated for purposes
of this section.
(3) For purposes of determining the Actual Deferral Ratio of
a Participant who is a 5 percent owner or one of the 10
most Highly Compensated Employees, the Deferral
Percentage Amounts and Compensation of such Participant
shall include the Deferral Percentage Amounts (including
any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of this section) and
Compensation for the Plan Year of Family Members.
If an Employee is required to be aggregated as a member
of more than one family group under the Plan, all
eligible Employees who are members of those family
groups that include that Employee are aggregated as one
family group.
Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Actual Deferral Percentage both for
Participants who are Non-highly Compensated Employees
and for Participants who are Highly Compensated
Employees.
(4) The determination and treatment of the Actual Deferral
Ratio amounts of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary
of the Treasury.
1.9 ANNUITY. The term Annuity means a series of payments made over a
specified period of time which, for a fixed annuity are, of equal,
specified amounts, and for a variable annuity increase or decrease to
reflect changes in investment performance of the underlying portfolio.
1.10 ANNUITY STARTING DATE. The term Annuity Starting Date means the first
day of the first period for which an amount is payable as an Annuity. In
the case of a benefit not payable in the form of an Annuity, the term
Annuity Starting Date means the first day on which all events have
occurred which entitle the Participant to such benefit.
1.11 BENEFICIARY. The Participant's Spouse is the designated Beneficiary of
the Participant's entire Vested Interest. However, each Participant
shall have the right to designate another Beneficiary and to specify the
form of death benefit the Beneficiary is to receive, subject to the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements. The Participant may change the
Beneficiary and/or the form of death benefit at any time, subject to the
requirements of
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the "Qualified Election" provisions of Article VIII, Joint and Survivor
Annuity Requirements.
If any distribution hereunder is made to a Beneficiary in the form of an
Annuity, and if such Annuity provides for a death benefit, then such
Beneficiary shall also have the right to designate a Beneficiary and to
change that Beneficiary from time to time. As an alternative to
receiving the benefit in the form of an Annuity, the Beneficiary may
elect to receive a single cash payment or any other form of payment
provided for in the Plan.
If a Beneficiary has not been designated, or if a Beneficiary
designation or change of Beneficiary designation does not meet the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements, (including any designation made
prior to August 23, 1984 by a married Participant who has an Hour of
Service on or after August 23, 1984), or if no designated Beneficiary
survives the Participant, the Participant's entire Vested Interest shall
be distributed to the Participant's Spouse, if living; otherwise in
equal shares to any surviving children of the Participant. In the event
none of the above named individuals survives the Participant, the
Participant's entire Vested Interest shall be paid to the executor or
administrator of the Participant's estate.
1.12 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.13 CODE. The term Code means the Internal Revenue Code of 1986, as amended
from time to time.
1.14 COMPENSATION.
(A) Except as otherwise provided in the Plan, the term Compensation
means wages within the meaning of section 3401(a) of the Code
for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2) of the
Code).
Notwithstanding the foregoing, Compensation shall be reduced by
all of the following items (even if includible in gross income):
reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation, and
welfare benefits.
(B) Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in the Plan, the
determination period shall be the Plan Year.
(C) Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which
is not includible in the gross
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income of the employee under sections 125, 402(e)(3), 402(h), or
403(b) of the Code; Compensation deferred under an eligible
deferred compensation plan within the meaning of section 457(d)
of the Code; and employee contributions described in section
414(h)(2) of the Code that are picked up by the employing unit
and, thus, are treated as employer contributions.
(D) The annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any
determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary of the Treasury at the time
and in the same manner as under section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any
calendar year is effective for determination periods beginning
in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the period for
determining Compensation used in calculating an Employee's
allocation for a determination period is a short Plan Year
(i.e., shorter than 12 months), the annual Compensation limit is
an amount equal to the otherwise applicable annual Compensation
limit multiplied by a fraction, the numerator of which is the
number of months in the short Plan Year, and the denominator of
which is 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the application
of such rules, the adjusted $200,000 limitation is exceeded,
then either 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, or the limitation shall be allocated among the
affected individuals in an objective and nondiscriminatory
manner based on a reasonable, good faith interpretation of
section 401(a)(17) of the Code. The method chosen in the
preceding sentence shall be uniformly applied to all affected
individuals in a Plan Year and shall be applied consistently
from year to year.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for
the current determination period, the Compensation for such
prior determination period is subject to the applicable annual
Compensation limit in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000.
(E) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Employee taken into account
under the Plan shall not exceed the OBRA `93 annual Compensation
limit. The OBRA `93 annual Compensation limit is
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$150,000, as adjusted by the Commissioner for increases in the
cost of living in accordance with section 401(a)(17)(B) of the
Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer
than 12 months, the OBRA `93 annual Compensation limit will be
multiplied by a fraction, the numerator of which is the number
of months in the determination period, and the denominator of
which is 12. For Plan Years beginning on or after January 1,
1994, any reference in this Plan to the limitation under section
401(a)(17) of the Code shall mean the OBRA `93 annual
Compensation limit set forth in this provision. If Compensation
for any prior determination period is taken into account in
determining an employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is
subject to the OBRA `93 annual Compensation limit in effect for
that prior determination period. For this purpose, for
determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA
`93 annual Compensation limit is $150,000.
1.15 CONSIDERED NET PROFITS. The term Considered Net Profits means the entire
amount of the accumulated or current operating profits (excluding
capital gains from the sale or involuntary conversion of capital or
business assets) of the Employer after all expenses and charges other
than (i) the contributions made by the Employer to the Plan, and (ii)
federal or state or local taxes based upon or measured by income, as
determined by the Employer, either on an estimated basis or a final
basis, in accordance with the generally accepted accounting principles
used by the Employer. When the amount of Considered Net Profits has been
determined by the Employer, and the contributions are made by the
Employer on the basis of such determination, for any Plan Year, such
determination and contribution shall be final and conclusive and shall
not be subject to change because of any adjustments in income or expense
which may be required by the Internal Revenue Service or otherwise. Such
determination and contribution shall not be open to question by any
Participant either before or after the contributions by the Employer
have been made.
1.16 CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage
Amounts means the sum of the Employee Contributions, Matching
Contributions, and Qualified Matching Contributions (to the extent not
taken into account for purposes of the Actual Deferral Percentage Test)
made under the Plan on behalf of the Employee for the Plan Year. The
term Contribution Percentage Amounts also includes Qualified Nonelective
Contributions and Elective Deferral Contributions treated as Matching
Contributions and taken into account in determining the Employee's
Actual Contribution Ratio for the Plan Year.
1.17 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period specified by the Employer in Article IV for which contributions
shall be made.
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1.18 DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts means
an Employee's Elective Deferral Contributions for the Plan Year. The
term Deferral Percentage Amounts also includes Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Elective
Deferral Contributions and taken into account in determining the
Employee's Actual Deferral Ratio for the Plan Year.
1.19 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or to be of long, continued and indefinite duration.
Such determination of Disability shall be made by the Administrator with
the advice of competent medical authority. All Participants in similar
circumstances will be treated alike.
1.20 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined
that a Participant's incapacity is a Disability.
1.21 EFFECTIVE DATE. The term Effective Date means January 1, 1993.
1.22 ELECTIVE DEFERRAL CONTRIBUTION. The term Elective Deferral Contribution
means any Employer Contribution made to the Plan at the election of the
Participant, in lieu of cash compensation, and includes contributions
made pursuant to a Salary Deferral Agreement or other deferral
mechanism.
Solely for purposes of the dollar limitation specified in section 402(g)
of the Code, with respect to any taxable year, a Participant's Elective
Deferral Contributions are the sum of all employer contributions made on
behalf of such Participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in section 401(k) of
the Code, any simplified employee pension cash or deferred arrangement
described in section 402(h)(1)(B) of the Code, any plan as described
under section 501(c)(18) of the Code, and any employer contributions
made on behalf of a Participant for the purchase of a tax sheltered
annuity contract under section 403(b) of the Code pursuant to a salary
reduction agreement.
The term Elective Deferral Contribution shall not include any deferrals
property distributed as excess annual additions.
1.23 EMPLOYEE. The term Employee means an individual who performs services
for the Employer and who is either a common law employee of the Employer
or a self-employed individual/owner employee treated as an Employee
pursuant to Code section 401(c)(1). The term Employee also includes a
Leased Employee who is treated as an Employee of the Employer-recipient
pursuant to the provisions of Code section 414(n) or 414(o). For
purposes of determining the Highly Compensated Employees, the Employer
may elect, on a reasonable and consistent basis, to treat such Leased
Employees covered by a plan described in Code section 414(n)(5) as
Employees.
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1.24 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means any
contributions to the Plan or any other plan that are designated or
treated at the time of contribution as after-tax Employee Contributions
and are allocated to a separate account to which the attributable
earnings and losses are allocated. Such term includes Employee
Contributions applied to the purchase of life insurance policies.
Such term does not include repayment of loans or buy-back of benefits
described in code section (411)(a)(7)(c) or employee contributions
transferred to this Plan.
1.25 EMPLOYER. The term Employer means Dominick's Finer Foods, Inc.,
Supermarket Training Systems, Inc. and any successor organization to
such Employer which elects to continue the Plan. In the case of a group
of employers which constitutes a controlled group of corporations (as
defined in Code section 414(b)), or which constitutes trades or
businesses (whether or not incorporated) which are under common control
(as defined in Code section 414(c)), or which constitutes an affiliated
service group (as defined in, Code section 414(m)), all such employers
shall be considered a single employer for purposes of participation,
vesting, Top-Heavy provisions and determination of Highly Compensated
Employees.
1.26 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a Participant
other than an Employee Contribution or Rollover Contribution.
1.27 ENTRY DATE. The term Entry Date means either the Effective Date or the
first day of the month thereafter when an Employee who has fulfilled the
eligibility requirements commences participation in the Plan.
Any Employee who has satisfied the maximum eligibility requirements
permissible under ERISA, shall be eligible to commence participation in
this Plan no later than the earlier of (A) or (B) below, as applicable,
provided that the Employee has not separated from the Service of the
Employer:
(A) The first day of the first Plan Year beginning after the date on
which the Employee satisfied such requirements; or
(B) The date six months after the date on which the Employee
satisfied such requirements.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date
shall be the applicable Entry Date as specified above when the Employee
actually enrolls as a Participant.
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1.28 ERISA. The term ERISA means the Employee Retirement Income Security Act
of 1974 (PL 93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and such regulations
affect this Plan and Trust.
1.29 EXCESS AGGREGATE CONTRIBUTIONS.
(A) The term Excess Aggregate Contributions means, with respect to
any Plan Year, the excess of the aggregate amount of the
Contribution Percentage Amounts actually made on behalf of
Highly Compensated Employees for the Plan Year (including any
amounts required to be taken into account under subparagraphs
(B)(1) and (B)(2) of Section 1.5 of the Plan), over the
maximum amount of contributions permitted under the Actual
Contribution Percentage Test. The amount of Excess Aggregate
Contributions for each Highly Compensated Employee is determined
by using the method described in paragraph (B) of this section.
(B) The amount of Excess Aggregate Contributions for a Highly
Compensated Employee for a Plan Year is the amount (if any) by
which the Employee's Employee Contributions and Matching
Contributions must be reduced for the Employee's Actual
Contribution Ratio to equal the highest permitted Actual
Contribution Ratio under the Plan.
To calculate the highest permitted Actual Contribution Ratio
under the Plan, the Actual Contribution Ratio of the Highly
Compensated Employee with the highest Actual Contribution Ratio
is reduced by the amount required to cause the Employee's Actual
Contribution Ratio to equal the ratio of the Highly Compensated
Employee with the next highest Actual Contribution Ratio. If a
lesser reduction would enable the Plan to satisfy the Actual
Contribution Percentage Test, only this lesser reduction may be
made. This process shall be repeated until the Plan satisfies
the Actual Contribution Percentage Test. The highest Actual
Contribution Percentage Ratio remaining under the Plan after
leveling is the highest permitted Actual Contribution Ratio.
For each Highly Compensated Employee, the amount of Excess
Aggregate Contributions for a Plan Year is equal to the total
Contribution Percentage Amounts (including any amounts required
to be taken into account under subparagraphs (B)(1) and (B)(2)
of Section 1.5 of the Plan), minus the amount determined by
multiplying the Employees's highest permitted Actual
Contribution Ratio (determined after application of this
section) by the compensation used in determining the ratio.
1.30 EXCESS CONTRIBUTION.
(A) The term Excess Contribution means, with respect to a Plan Year,
the excess of Deferral Percentage Amounts made on behalf of
eligible Highly Compensated Employees for the Plan Year
(including any amounts required to be taken into
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account under subparagraphs (B)(1) and (B)(2) of Section 1.8
of the Plan) over the maximum amount of such contributions
permitted under the Actual Deferral Percentage Test for the Plan
Year. The amount of Excess Contributions for each Highly
Compensated Employee is determined by using the method described
in paragraph (B) of this section.
(B) The amount of Excess Contributions for a Highly Compensated
Employee for a Plan Year is the amount (if any) by which the
Employee's Elective Deferral Contributions must be reduced for
the Employee's Actual Deferral Ratio to equal the highest
permitted Actual Deferral Ratio under the Plan.
To calculate the highest permitted Actual Deferral Ratio under
the Plan, the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced by
the amount required to cause the Employee's Actual Deferral
Ratio to equal the ratio of the Highly Compensated Employee with
the next highest Actual Deferral Ratio. If a lesser reduction
would enable the arrangement to satisfy the Actual Deferral
Percentage Test, only this lesser reduction shall be made. This
process shall be repeated until the cash or deferred arrangement
satisfies the Actual Deferral Percentage Test. The highest
Actual Deferral Ratio remaining under the Plan after leveling is
the highest permitted Actual Deferral Ratio.
1.31 EXCESS DEFERRALS. The term Excess Deferrals means those Elective
Deferral Contributions that are includible in a Participant's gross
income under section 402(g) of the Code to the extent such Participant's
Elective Deferral Contributions for a taxable year exceed the dollar
limitation under such Code section.
1.32 FAIL-SAFE CONTRIBUTION. The term Fail-Safe Contribution means a
Nonelective Contribution, designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution, which is
contributed to the Plan solely for the purposes of satisfying either the
Actual Deferral Percentage Test or the Actual Contribution Percentage
Test and is made in accordance with the provisions of Article IV of this
Plan.
1.33 FAMILY MEMBER. The term Family Member means, with respect to any
Employee, such Employee's Spouse and lineal ascendants and descendants
and the spouses of such lineal ascendants and descendants.
1.34 FIDUCIARY. The term Fiduciary means any, or all, of the following, as
applicable:
(A) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets; or
(B) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other
property of the Plan or has authority or responsibility to do
so; or
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(C) Any Person who has discretionary authority or responsibility in
the administration of the Plan; or
(D) Any Person who has been designated by a Named Fiduciary pursuant
to authority granted by the Plan, who acts to carry out a
fiduciary responsibility, subject to any exceptions granted
directly or indirectly by ERISA.
1.35 FORFEITURE. The term Forfeiture means the amount, if any, by which the
value of a Participant's Account exceeds his Vested Interest following
such Participant's Termination of Employment, and at the, time specified
in Section 9.1.
1.36 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee means
any Highly Compensated Active Employee or Highly Compensated Former
Employee as further defined herein.
For purposes of the determination of Highly Compensated Employees, the
term Compensation means Compensation as defined in Article V of the
Plan, but includes the amount of any elective contributions made by the
Employer on the Employee's behalf to a cafeteria plan established in
accordance with the provisions of Code section 125, a qualified cash or
deferred arrangement in accordance with the provisions of Code section
402(e)(3), a simplified employee pension plan in accordance with the
provisions of Code section 402(h), or a tax sheltered annuity plan
maintained in accordance with the provisions of Code, section 403(b).
A "Highly Compensated Active Employee" is any Employee who performs
services for the Employer during the current Plan Year and who, during
the current Plan Year or the 12-month period immediately preceding such
Plan Year:
(A) Owns (or is considered to own within the meaning of section 318
of the Code, as modified by section 416(i)(1)(B)(iii) of the
Code), more than 5% of the outstanding stock of the Employer or
stock possessing more than 5% of the total combined voting power
of all stock of the Employer, or, if the Employer is other than
a corporation, owns more than 5% of the capital or profits
interest in the Employer. The determination of 5% ownership
shall be made separately for each member of a controlled group
of corporations (as defined in Code section 414(b)), or of a
group of trades or businesses (whether or not incorporated) that
are under common control (as defined in Code section 414(c)), or
of an affiliated service group (as defined in Code section
414(m)); or
(B) Receives Compensation in excess of $75,000 multiplied by the
applicable cost-of-living adjustment factor prescribed under
Code section 415(d) and then prorated in the case of a short
Plan Year; or
(C) Receives Compensation in excess of $50,000, as adjusted for
cost-of-living increases in accordance with Code section 415(d)
and then prorated in the case of
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<PAGE> 16
a short Plan Year, and is in the top 20% of Employees ranked by
Compensation; or
(D) Is, at any time, an officer of the Employer and receives
Compensation in excess of 50% of the amount in effect under Code
section 415(b)(1)(A) for the applicable period.
If no officer receives Compensation in excess of the amount
specified above, the highest paid officer for the applicable
period shall be a Highly Compensated Employee.
In no event if there are more than 500 Employees, shall more
than 50 Employees or, if there are less than 500 Employees,
shall the greater of three Employees or 10% of all Employees, be
taken into account as officers.
In determining both the top 20% of Employees ranked by Compensation for
purposes of paragraph (C) above, and officers of the Employer for
purposes of paragraph (D) above, Employees who have not completed six
months of Service by the end of the applicable period, Employees who
normally work less than 17-1/2 hours per week, Employees who normally
work less than six months during a year, Employees who have not attained
21, and nonresident aliens who receive no earned income from U.S.
sources shall be excluded.
Also excluded under the above paragraph are Employees who are covered by
an agreement which the Secretary of Labor finds to be a collective
bargaining agreement. Such Employees will be excluded only if retirement
benefits were the subject of good faith bargaining, 90% of the Employees
of the Employer are covered by the agreement, and the Plan covers only
Employees who are not covered by the agreement.
Notwithstanding the above provisions, an Employee, other than a 5% owner
as described in paragraph (A) above who was not highly compensated
during the 12-month period immediately preceding the current Plan Year
will not be considered to be a Highly Compensated Employee in the
current Plan Year unless such Employee is one of the top 100 Employees
ranked by Compensation for the current Plan Year.
A "Highly Compensated Former Employee" is any former Employee who
separated from Service with the Employer in a Plan Year preceding the
current Plan Year and was a Highly Compensated Active Employee in
either:
(A) the Plan Year in which his separation from Service occurred; or
(B) any Plan Year ending on or after such former Employee's 55th
birthday.
A former Employee is an Employee who performs no services for the
Employer during a Plan Year (for example, by reason of a leave of
absence).
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<PAGE> 17
1.37 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an Active
Participant due to a suspension of the performance of duties for the
Employer.
In addition, a Participant who ceases to meet the eligibility
requirements in accordance with Section 3.1 shall be considered an
Inactive Participant.
1.38 INSTALLMENT REFUND ANNUITY. The term Installment Refund Annuity means an
annuity which provides fixed monthly payments for a period certain of
not less than three nor more than 15 years. If the Participant dies
before the period certain expires, the annuity will be paid to the
Participant's Beneficiary, for the remainder of the period certain. The
period certain shall be chosen by the Participant at the time the
annuity is purchased, and the Installment Refund Annuity will be the
amount of benefit which can be purchased with the Participant's Vested
Interest. The Installment Refund Annuity is not a life annuity and in no
event shall the period certain extend to a period which equals or
exceeds the life expectancy of the Participant.
1.39 JOINT AND SURVIVOR ANNUITY. The term Joint and Survivor Annuity means an
Annuity for the life of the Participant with a survivor Annuity for the
life of the Participant's Spouse which is not less than one-half, nor
greater than, the amount of the Annuity payable during the joint lives
of the Participant and the Participant's Spouse. The Joint and Survivor
Annuity will be the amount of benefit which can be purchased with the
Participant's vested account balance. In the case of an unmarried
Participant, Joint and Survivor Annuity means an Annuity payable over
the Participant's life.
1.40 LATE RETIREMENT DATE. The term Late Retirement Date means the first day
of the month coinciding with or next following the date a Participant is
separated from Service with the Employer after his Normal Retirement
Age, for any reason other than death.
1.41 LEASED EMPLOYEE. The term Leased Employee means any person (other than
an Employee of the recipient) who, pursuant to an agreement between the
recipient and any other person ("leasing organization"), has performed
services for the recipient (or for the Employer and related persons
determined in accordance with Code section 414(n)(6)) on a substantially
full-time basis for a period of at least one year, and such services are
of a type historically performed by employees in the business field of
the recipient Employer.
1.42 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan on behalf of a
Participant on account of either Elective Deferral Contributions, if
any, Employee Contributions, if any, or required contributions, if any.
1.43 NAMED FIDUCIARY. The term Named Fiduciary means the Plan Administrator,
the Trustee and any, other Fiduciary designated in writing by the
Employer, and any successor thereto.
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<PAGE> 18
1.44 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made by the Employer (other than Matching Contributions)
that the Participant may not elect to have paid in cash or other
benefits instead of being contributed to the Plan.
1.45 NONHIGHLY COMPENSATED EMPLOYEE. The term Nonhighly Compensated Employee
means an Employee who is not a Highly Compensated Employee.
1.46 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the date the
Participant attains age 55.
1.47 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the first
day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age.
1.48 PARTICIPANT. The term Participant means any Employee of the Employer,
who is or becomes eligible to participate under this Plan in accordance
with its provisions and shall include an Active Participant and an
inactive Participant.
1.49 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum of
the following sub-accounts held on behalf of each Participant:
- Elective Deferral Contributions, if any, and earnings thereon.
- Matching Contributions, if any, and earnings thereon.
- Qualified Matching Contributions, if any, and earnings thereon.
- Qualified Nonelective Contributions, if any, and earnings
thereon.
- Prior Employer Contributions, if any, and earnings thereon.
- Prior Employee Contributions, if any, and earnings thereon.
- Rollover Contributions, if any, and earnings thereon.
A Participant's Account shall be invested in accordance with the rules
established by the Plan Administrator, which shall be applied in a
consistent and nondiscriminatory manner.
1.50 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.51 PLAN. The term Plan means Dominick's Finer Foods, Inc. 401(k) Retirement
Plan for Non-Union Employees, the terms of which are set forth herein as
it may be amended from time to time.
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<PAGE> 19
1.52 PLAN ADMINISTRATOR. The terms Plan Administrator and Administrator are
used interchangeably throughout the Plan and shall mean the Employer.
1.53 PLAN YEAR. The term Plan Year means the 12-month period commencing on
January 1 and ending on the following December 31.
1.54 PRIOR EMPLOYEE CONTRIBUTIONS. The term Prior Employee Contributions
means Employee Contributions that were made prior to January 1, 1993.
Prior Employee Contributions shall be considered to be Employee
Contributions for purposes of determining a Participant's Vested
Interest, pursuant to Article I. In addition, Prior Employee
Contributions shall also be considered to be Employee Contributions for
the purposes of determining the Actual Contribution Ratio pursuant to
Article I and Annual Additions pursuant to Article V.
1.55 PRIOR EMPLOYER CONTRIBUTIONS. The term Prior Employer Contributions
means employer contributions that were made prior to the Effective Date
of this Plan.
1.56 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions shall mean Matching Contributions which are subject to the
distribution and nonforfeitability requirements under section 401(k) of
the Code when made.
1.57 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions shall mean Nonelective Contributions which are subject to
the distribution and nonforfeitability requirements under section 401(k)
of the Code when made.
1.58 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or
profit-sharing plan meeting the requirements of Code section 401(a),
that is eligible for rollover to this Plan in accordance with the
requirements set forth in Code section 402 or Code section 408(d)(3),
whichever is applicable.
1.59 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer the
Participant's Compensation for the purpose of making Elective Deferral
Contributions to the Plan.
1.60 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Disability
or death.
1.61 TRUST. The term Trust means the trust agreement entered into by the
Employer, the Administrator and the Trustee.
1.62 TRUSTEE. The term Trustee means one or more persons collectively
appointed and acting under the trust agreement, and any successor
thereto.
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<PAGE> 20
1.63 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the amount
which is equal to the following:
(A) the value on that date of that portion of the Participant's
Account that is attributable to the following contributions:
- Elective Deferral Contributions, if any
- Employee Contributions, if any
- Rollover Contributions, if any
- Matching Contributions, if any
- Qualified Matching Contributions, if any
- Qualified Nonelective Contributions, if any
(B) plus the value on that date of that portion of the Participant's
Account that is attributable to and derived from:
- Prior Employer Contributions, if any
Such contributions pursuant to Subsection (B), plus the earnings
thereon, shall be, at any relevant time, a part of the
Participant's Vested Interest equal to an amount ("X")
determined by the following formula:
X = P(AB + D) - D
For the purposes of applying this formula:
P = The Participant's Vesting Percentage at the
relevant time.
AB = The account balance attributable to such
contributions, plus the earnings thereon, at the
relevant time.
D = The amount of the distribution.
1.64 VESTING PERCENTAGE. The term Vesting Percentage means the percentage
used to determine a Participant's Vested Interest in contributions made
by the Employer, plus the earnings thereon, credited to his
Participant's Account that are not 100% immediately vested. The Vesting
Percentage for each Participant shall be determined in accordance with
the following schedule based on Years of Service with the Employer.
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 1 0%
</TABLE>
18
<PAGE> 21
<TABLE>
<S> <C>
1 but less than 2 10%
2 but less than 3 20%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
</TABLE>
However, if an Active Participant dies prior to attaining his Normal
Retirement Age, his Vesting Percentage shall be 100%.
19
<PAGE> 22
ARTICLE II.
SERVICE
2.1 SERVICE. The term Service means active employment with the Employer as
an Employee. For purposes of determining Service, employment with any
company which is under common control with the Employer as specified in
section 414 of the Internal Revenue Code shall be treated as employment
with the Employer.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted is employment with the Employer
provided that such leave of absence is of not more than two years'
duration. Absence from employment on account of active duty with the
Armed Forces of the United States will be counted as employment with the
Employer. If the Employee does not return to active employment with the
Employer, his Service will be deemed to have ceased on the date the
Administrator receives notice that such Employee will not return to the
active Service of the Employer. The Employer's leave policy shall be
applied in a uniform and nondiscriminatory manner to all Participants
under similar circumstances.
FOR PURPOSES OF ELIGIBILITY, THE FOLLOWING PROVISIONS SHALL APPLY:
2.3 HOUR OF SERVICE. The term Hour of Service means a period of Service
during which an Employee shall be credited with one Hour of Service as
described in (A), (B), (C), and (D) below:
(A) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of
duties. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed;
and
(B) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for reasons (such as
vacation, sickness or Disability) other than for the performance
of duties. Hours under this Subsection shall be calculated and
credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this
reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer.
These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made; and
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<PAGE> 23
(D) Each hour for which an Employee is on an authorized unpaid leave
(such as service with the Armed Forces, jury duty, educational
leave). These hours shall be credited to the Employee for the
computation period or periods in which such authorized leave
takes place. However, no more than 501 hours shall be credited
under this subparagraph (D).
Hours of Service will be credited for employment with other members of
an affiliated service group (under Internal Revenue Code section
414(m)), a controlled group of corporations (under Internal Revenue Code
section 414(b)), or a group of trades or businesses under common control
(under Internal Revenue Code section 414(c)), of which the adopting
employer is a member. Hours of Service will also be credited for any
individual considered an Employee under Internal Revenue Code section
414(n).
Solely for purposes of determining whether a One-Year Break in Service,
as defined in Section 2.4, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but
for such absence, or in any case in which such hours cannot be
determined, eight Hours of Service per day of such absence. For purposes
of this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of a birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (4) for purposes
of caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this
paragraph shall be credited (1) in the computation period in which the
absence begins if the crediting is. necessary to prevent a Break in
Service in that period, or (2) in all other cases, in the following
computation period.
2.4 ONE-YEAR BREAK IN SERVICE. Except as provided below regarding
eligibility, the term One-Year Break in Service means any Plan Year
during which an Employee fails to complete more than 500 Hours of
Service.
2.5 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive-month period during which an Employee has completed at
least 1,000 Hours of Service.
For purposes of determining Years of Service and Breaks in Service for
eligibility, the twelve-consecutive-month period shall begin with the
date on which an Employee's employment commenced and, where additional
periods are necessary, on succeeding anniversaries of his employment
commencement date. The employment commencement date is the date on which
the Employee first performs an Hour of Service for the Employer
maintaining the Plan.
The eligibility requirement specified in Article III is one or more full
Years of Service. Such requirement shall be met upon completion of at
least 1,000 Hours of Service for each Year of Service specified.
21
<PAGE> 24
FOR PURPOSES OF VESTING, THE FOLLOWING PROVISIONS SHALL APPLY:
2.6 PERIOD OF SERVICE. The term Period of Service or Service means the
Employer-Employee relationship which begins on the Employee's employment
date and continues until his Severance from Service Date.
An Employee's Period of Service shall include any Period of Severance
beginning on his Severance from Service Date, which is less than 12
months.
2.7 PERIOD OF SEVERANCE. The term Period of Severance means a period of time
commencing on the Participant's Severance from Service Date and ending
on the date such individual is re-employed by the Employer.
2.8 SEVERANCE FROM SERVICE DATE. The Severance from Service Date shall be
the earliest of (A), (B), or (C) below.
(A) The date the Employee terminates employment by reason of a quit,
discharge, permanent Disability, retirement or death.
(B) The second anniversary of the first day the Employee is absent
from Service for maternity or paternity reasons, as described in
the following Section 2.6.
(C) The first anniversary of the first day the Employee separates
from Service for any other reason such as an authorized leave of
absence, sickness, vacation, etc., after which the Employee does
not return to work.
2.9 ONE-YEAR BREAK IN SERVICE. The term One-Year Break in Service shall mean
a 12-consecutive-month Period of Severance, beginning on the Employee's
Severance from Service Date.
In the case of an individual who is absent from Service for maternity or
paternity reasons, the 12-consecutive-month period beginning on the
first anniversary of the first date of such absence shall not constitute
a One-Year Break in Service. An absence from Service for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (4) for purposes
of caring for such child for a period beginning immediately following
such birth or placement.
2.10 YEAR(S) OF SERVICE. The term Year(s) of Service means a Period of
Service equaling 12 months. Service counted in computing Years of
Service need not be consecutive or continuous, and all fractional
Periods of Service shall be aggregated.
2.11 SERVICE UPON RE-EMPLOYMENT. An Employee shall be considered a
re-employed Employee when he is rehired following a One-Year Break in
Service. Upon
22
<PAGE> 25
re-employment, all Service, including Service prior to any One-Year
Break in Service, shall be aggregated in determining such re-employed
Employee's Vesting Percentage.
2.12 PREDECESSOR ORGANIZATION SERVICE. For purposes of this Article, Service
with a predecessor organization of the Employer shall be treated as
Service with the Employer in any case in which the Employer maintains
the Plan of such predecessor organization.
23
<PAGE> 26
ARTICLE III.
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee who was a Participant prior to the Effective
Date and who is in the Service of the Employer on the Effective Date
shall continue as a Participant in the Plan. Each other Employee,
excluding a Leased Employee, shall be eligible to become a Participant
as of the Effective Date or the Entry Date when he first meets the
following requirement(s):
- Age 21
- 900 Hours of Service during first six months of employment or
1,000 Hours of Service per year
- Not in a unit of Employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement
between Employee representatives and the Employer, if there is
evidence that retirement benefits were the subject of good faith
bargaining between such Employee representatives and the
Employer, unless the collective bargaining agreement provides
for coverage under this Plan.
- Not a non-resident alien with no U.S.-source income
- Not an Independent Contractor
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as of
his Entry Date by completing and delivering to the Administrator an
enrollment form and, if applicable, a Salary Deferral Agreement. He will
then become a Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining his eligibility to again
participate in the Plan:
(A) If the Employee had met the eligibility requirement(s) specified
in Section 3.1 prior to his separation from employment, he shall
become an Active Participant in the Plan as of the date he is
re-employed, after completing the applicable form(s), in
accordance with Section 3.2.
(B) If the Employee had not met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from
employment, he shall be eligible to participate in the Plan on
the first Entry Date following his fulfillment of such
eligibility requirement(s).
For purposes of this Subsection, all Years of Service with the Employer,
including any Years of Service prior to any Breaks in Service, shall be
taken into account.
24
<PAGE> 27
3.4 ELIGIBLE CLASS. In the event a Participant becomes ineligible to
participate because he is no longer a member of an eligible class of
Employees, such Employee shall participate immediately upon his return
to an eligible class of Employees.
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age
requirement and would have previously become a Participant had he been
in the eligible class.
25
<PAGE> 28
ARTICLE IV.
CONTRIBUTIONS
4.1 ELECTIVE DEFERRAL CONTRIBUTIONS. Each Active Participant may enter into
a written Salary Deferral Agreement with the Employer in an amount equal
to not less than 1% nor more than 15% of his; Compensation for the
Contribution Period. In consideration of such agreement, the Employer
will make a contribution for each Contribution Period on behalf of the
Participant in an amount equal to the total amount by which the
Participant's Compensation from the Employer was deferred during the
Contribution Period pursuant to the Salary Deferral Agreement then in
effect. Elective Deferral Contributions shall be paid by the Employer to
the Trust not less frequently than monthly, but in no event later than
90 days following the date the amounts were deferred.
Salary Deferral Agreements shall be governed by the following
provisions:
(A) Amounts contributed pursuant to a Salary Deferral Agreement
shall be 100% vested and non-forfeitable at all times.
(B) No Participant shall be permitted to have Elective Deferral
Contributions made under this Plan., or any other qualified plan
maintained by the Employer, during any taxable year, in excess
of the dollar limitation contained in section 402(g) of the Code
in effect at the beginning of the taxable year. However, this
$7,000 limit shall not apply to certain amounts deferred in 1987
that were attributable to Service performed in 1986.
(C) Amounts contributed pursuant to a Salary Deferral Agreement,
which are not in excess of the limit described in Subsection (B)
above, shall be subject to the Limitations on Allocations in
accordance with Article V. Elective Deferral Contributions that
are in excess of the limit described in Subsection (B) shall
also be subject to the Limitations on Allocations in accordance
with Article V.
(D) A Salary Deferral Agreement may be changed by a Participant four
times during the Plan Year, on January 1, April 1, July I and
October 1, by filing written notice thereof with the
Administrator. Such notice shall be effective, and the Salary
Deferral Agreement shall be changed on the date specified in
such notice or as soon as administratively possible, which date
must be at least 15 days after such notice is filed.
(E) Elective Deferral Contributions shall be subject to the Actual
Deferral Percentage Test limitations.
(F) Correction of Excess Contributions.
(1) If the Employer determines prior to the end of the Plan
Year that the Actual Deferral Percentage Test may not be
satisfied, the Employer may take the corrective action
specified in Section 4.11 of the Plan.
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<PAGE> 29
(2) If, after the end of the Plan Year, the Employer
determines that the Plan will fail the Actual Deferral
Percentage Test, the Employer shall take the corrective
action specified in Section 4.13 or Section 4.16 of the
Plan, or a combination of such corrective actions, in
order to ensure that the Plan does not fail the Actual
Deferral Percentage Test for the Plan Year being tested.
4.2 MATCHING CONTRIBUTIONS. The Employer shall make a Matching Contribution
in an amount equal to a discretionary amount to be determined by the
Employer for each $1.00 by which a Participant defers his Compensation
pursuant to a Salary Deferral Agreement, subject to the Limitations on
Allocations specified in Article V.
The contribution as described above, for any Plan Year, shall be paid to
the Trust at the end of the Plan Year, or as soon as possible on or
after the last day of such Plan Year, but in any event not later than
the date which is prescribed by law for filing the Employer's income tax
return, including any extension thereof. Matching Contributions shall be
subject to the Actual Contribution Percentage Test. The Employer may
designate at the time of contribution that all or a portion of such
Matching Contributions be treated as Qualified Matching Contributions.
If the Employer determines prior to the end of the Plan Year that the
Actual Contribution Percentage Test may not be satisfied, the Employer
may take the corrective action specified in Section 4.12 of the Plan.
If, after the end of the Plan Year, the Employer determines that the
Plan will fail the Actual Contribution Percentage Test, the Employer
shall take the corrective action specified in Section 4.14 or Section
4.16 of the Plan, or a combination of such corrective actions, in order
to ensure that the Plan does not fail the Actual Contribution Percentage
Test for the Plan Year being tested.
Such Matching Contribution shall be allocated as of the last day of the
Plan Year for which such contribution is made to each Participant who:
- is an Active Participant as of the last day of the Plan Year.
Notwithstanding the above provision, an allocation will be made on
behalf of a Participant who dies, retires, or becomes disabled during
the Plan Year.
4.3 FAIL-SAFE CONTRIBUTION. The Employer reserves the right to make a
discretionary Nonelective Contribution to the Plan for any Plan Year, if
the Employer determines that such a contribution is necessary to ensure
that either the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test will be satisfied for that Plan Year. Such
amount shall be designated by the Employer at the time of contribution
as a Qualified Nonelective Contribution and shall be known as a
Fail-Safe Contribution.
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<PAGE> 30
The Fail-Safe Contribution shall be made on behalf of all eligible
non-Highly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test. This contribution shall be allocated to
the Participant's Account of each such Participant in an amount equal to
a fixed percentage of such Participant's Compensation. The fixed
percentage shall be equal to the minimum fixed percentage necessary to
be contributed by the Employer on behalf of each eligible non-Highly
Compensated Employee who is a Participant so that the Actual Deferral
Percentage Test or the Actual Contribution Percentage Test is satisfied.
The Fail-Safe Contribution for any Plan Year as determined above shall
be paid to the Trust at the end of the Plan Year, or as soon as possible
on or after the last day of such Plan Year, but in no event later than
the date which is prescribed by law for filing the Employer's income tax
return, including any extensions thereof.
4.4 PROFITS NOT REQUIRED. Contributions to this Plan shall not be precluded
because the Employer does not have Considered Net Profits.
Notwithstanding the existence of Considered Net Profits, the Employer
may determine in its sole discretion that it will make no contributions
for such Plan Year.
4.5 PAYMENT OF EXPENSES. The Employer may contribute to the Plan the amount
necessary, to pay any applicable expense charges and administration
charges. In lieu of the Employer's contributing the amount necessary to
pay such charges, these expenses may be paid from the Trust fund.
4.6 ALLOCATION OF FORFEITURES. The contributions made by the Employer shall
be reduced by any, Forfeitures available as an Employer credit in
accordance with Section 9.3.
4.7 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the Employer
shall be credited to the Participant Account of each Participant for
whom such contributions are made, in accordance with the provisions of
Article XIII.
4.8 ROLLOVER CONTRIBUTIONS. The Plan may receive Rollover Contributions on
behalf of an Employee, Receipt of a Rollover Contribution shall be
subject to the approval of the Plan Administrator. Before approving the
receipt of a Rollover Contribution, the Plan Administrator may request
any documents or other information from an Employee or opinions of
counsel which the Plan Administrator deems necessary to establish that
such amount is a Rollover Contribution.
A Participant's Account shall be maintained on behalf of each Employee
from whom Rollover Contributions are received, regardless of such
Employee's eligibility to participate in the Plan in accordance with the
requirements of Article III, and Rollover Contributions may be invested
in any manner authorized under the provisions of this Plan.
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Rollover Contributions received from an Employee who is not otherwise
eligible to participate in the Plan may not be, withdrawn in accordance
with the provisions of Article X until such Employee becomes a
Participant, except that such Employee may receive a distribution of his
Participant's Account if his Termination of Employment occurs.
Rollover Contributions shall be credited to the Participant's Account
and may be invested in any manner authorized under the provisions of
this Plan.
4.9 TRANSFERS. Without regard to the Limitations on Allocations imposed
under Article V, the Plan may receive, directly from another qualified
pension or profit sharing plan meeting the requirements of Internal
Revenue Code section 401 (a), all or part of the entire amount
distributable on behalf of a Participant from such plan. Likewise, the
Plan may receive Transfers representing the assets of any predecessor
plan.
Transfers may be invested in any manner authorized under the provisions
of this Plan.
4.10 SUSPENSION OF ELECTIVE DEFERRAL CONTRIBUTIONS. The following provisions
shall apply with respect to suspension of Elective Deferral
Contributions.
(A) Elective Suspension. An Active Participant may elect to suspend
his Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the
Administrator at any time. The Salary Deferral Agreement shall
be suspended on the date specified in such notice, which date
must be at least 15 days after such notice is filed. The notice
shall specify the period for which such suspension shall be
effective. Such period may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence or
military leave shall have his Salary Deferral Agreement
suspended during such leave. Such suspension of contributions
shall be effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until payment
of Compensation is resumed.
(C) Withdrawal Suspension. An Active Participant who elects a
withdrawal in accordance with Article X may have his Salary
Deferral Agreement suspended on the date such election becomes
effective. Such suspension shall remain in effect for the number
of months specified therein.
(D) Non-Elective Suspension. An Active Participant who ceases to
meet the eligibility requirements as specified in Section 3.1
but who remains in the employ of the Employer, shall have his
Salary Deferral Agreement suspended, effective as of the date he
ceases to meet the eligibility requirements. Such suspension
shall remain in effect until he again meets such eligibility
requirements.
The Participant may elect to reactivate his Salary Deferral Agreement
for Elective Deferral Contributions by filing a written notice thereof
with the Plan Administrator. The
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<PAGE> 32
Salary Deferral Agreement shall be reactivated at any time following the
expiration of the suspension period described above.
4.11 LIMITATION OF ELECTIVE DEFERRAL CONTRIBUTIONS. If the Employer
determines prior to the end of the Plan Year that the Plan may not
satisfy the Actual Deferral Percentage Test for the Plan Year, the
Employer may require that the amount of Elective Deferral Contributions
being allocated to the accounts of Highly Compensated Employees be
reduced to the extent necessary to prevent Excess Contributions from
being made to the Plan.
Although the Employer may reduce the amount of Elective Deferral
Contributions that may be allocated to the Participant's Account of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the
reduction of Elective Deferral Contributions ceases to exist, the
Employer shall reinstate the amount of Elective Deferral Contributions
elected by the Participant in the Salary Deferral Agreement to the
fullest extent possible for all affected Participants iii a
nondiscriminatory manner.
4.12 LIMITATION OF MATCHING CONTRIBUTIONS AND EMPLOYEE CONTRIBUTIONS. If the
Employer determines prior to the end of the Plan Year that the Plan may
not satisfy the Actual Contribution Percentage Test for the Plan Year,
the Employer may require that the amount of Matching Contributions or
Employee Contributions, or both, being allocated to the Accounts of
Highly Compensated Employees be reduced to the extent necessary to
prevent Excess Aggregate Contributions from being made to the Plan.
4.13 CORRECTIVE DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(A) The Employer may distribute Excess Contributions (and income
allocable thereto) to the appropriate Highly Compensated
Employee after the close of the Plan Year in which the Excess
Contribution arose and within 12 months after the close of that
Plan Year.
(B) The income allocable to Excess Contributions is equal to the sum
of the allocable gain or loss for the Plan Year and shall be
determined as follows:
(1) The income allocable to Excess Contributions is
determined by multiplying the income for the Plan Year
allocable to Deferral Percentage Amounts by a fraction.
The numerator of the fraction is the Excess
Contributions attributable to the Employee for the Plan
Year. The denominator of the fraction is equal to the
sum of (A) the total account balance of the Employee
attributable to Deferral Percentage Amounts as of the
beginning of the Plan Year, plus (B) the Employee's
Deferral Percentage Amounts for the Plan Year.
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<PAGE> 33
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of distribution shall
not be taken into consideration when determining the
income allocable to Excess Contributions.
(C) The amount of Excess Contributions to be distributed with
respect to an Employee for a Plan Year shall be reduced by
Excess Deferrals previously distributed to the Employee for the
Employee's taxable year ending with or within the Plan Year.
(D) The distribution of Excess Contributions made to the Family
Members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Deferral
Ratio shall be allocated among the Family Members in proportion
to the Elective Deferral Contribution (including any amounts
required to be taken into account under subparagraphs (B)(1)
and (B)(2) of Section 1.8 of the Plan) of each Family Member
that is combined to determine the Actual Deferral Ratio.
(E) A corrective distribution of Excess Contributions (and income)
shall be made without regard to any Participant or spousal
consent or any notice otherwise required under sections 411
(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Contribution being distributed shall
be forfeited. The Matching Contribution so forfeited shall be in
proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the Plan
Year in which the Excess Contribution arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions that
relate to Excess Contributions shall be applied to reduce
Employer contributions or pay Plan expenses.
(G) In no case may the amount of Excess Contributions to be
distributed for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Elective Deferral
Contributions made on behalf of the Highly Compensated Employee
for the Plan Year.
(H) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Contribution arose, the corrective
distribution must be made as soon as administratively feasible
after the date of the termination of the Plan, but in no event
later than 12 months after the date of termination.
(I) Any distribution of less than the entire amount of Excess
Contributions with respect to any Highly, Compensated Employee
shall be treated as a pro-rata distribution of Excess
Contributions and allocable income or loss.
4.14 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS.
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<PAGE> 34
(A) Excess Aggregate Contributions may be corrected using one of the
methods described in subparagraphs (1) and (2) below. The
Employer shall elect the method of correction to be used and
shall apply such method to the correction of the Excess
Aggregate Contribution for the Plan Year.
(1) Method 1:
(a) Any unmatched Employee Contributions (and
income) allocated to the Plan for the Plan Year
in which the Excess Aggregate Contribution arose
shall be distributed to the appropriate Employee
after the close of the Plan Year in which the
Excess Aggregate Contribution arose and within
12 months after the close of that Plan Year.
(b) If, after the application of subparagraph (1)(a)
above, an Excess Aggregate Contribution still
exists, the remaining Excess Aggregate
Contribution (and income) shall be forfeited, if
forfeitable, or distributed on a pro-rata basis
from the Employee's Account attributable to
Contribution Percentage Amounts. The,
distribution or forfeiture shall be made after
the close of the Plan Year in which the Excess
Aggregate Contribution arose and within 12
months after the close of that Plan Year.
Whether an amount is distributed or forfeited
under this subparagraph (b) shall be determined
based on the rules set forth in paragraph (B) of
this section.
(2) Method 2:
(a) Any Matching Contributions (and Qualified
Matching Contributions, to the extent not taken
into account for purposes of the Actual Deferral
Percentage Test), and income allocable thereto,
shall be forfeited, if forfeitable, or
distributed to the appropriate Highly
Compensated Employee. The distribution or
forfeiture shall be made after the close of the
Plan Year in which the Excess Aggregate
Contribution arose and within 12 months after
the close of that Plan Year. Whether an amount
is forfeited or distributed shall be determined
under the rules set forth in paragraph (B) of
this section.
(B) Determination of Distributable and Forfeitable Amounts. For
purposes of paragraph (A) of this section:
(1) An Excess Aggregate Contribution attributable to
Employee Contributions, vested Matching Contributions,
Qualified Matching Contributions (and, if applicable,
Qualified Nonelective Contributions and Elective
Deferral Contributions) shall be distributed to the
appropriate
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<PAGE> 35
Highly Compensated Employee in accordance with the terms
of this section.
(2) An Excess Aggregate Contribution attributable to an
Employee's nonvested Matching Contributions shall be
forfeited in accordance with the terms of this section.
(3) A Highly Compensated Employee's vested and nonvested
interest in Matching Contributions (and income allocable
thereto) attributable to Excess Aggregate Contributions
shall be based on the proportion that represents the
Employee's Vested Interest in Matching Contributions
under the Plan for the Plan Year in which the Excess
Aggregate Contribution arose.
(C) Forfeited Excess Aggregate Contributions. In accordance with
paragraph (B) of this section, the amount that represents the
Employee's nonvested interest in Matching Contributions (and
income), and is attributable to Excess Aggregate Contributions,
shall be forfeited and, as such, shall be applied to reduce
Employer contributions or pay expenses.
(D) Income Allocable to Excess Aggregate Contributions. For purposes
of this section, the income allocable to Excess Aggregate
Contributions is equal to the sum of the allocable gain or loss
for the Plan Year, and shall be determined as follows:
(1) The income allocable to Excess Aggregate Contributions
is determined by multiplying the income for the Plan
Year allocable to Contribution Percentage Amounts by a
fraction. The numerator of the fraction is the Excess
Aggregate Contributions for the Employee for the Plan
Year. The denominator of the fraction is equal to the
sum of (A) the total account balance of the Employee
attributable to Contribution Percentage Amounts as of
the beginning of the Plan Year, plus (B) the
Contribution Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of correction shall
not be taken into consideration when determining the
income allocable to Excess Aggregate Contributions.
(E) The distribution of Excess Aggregate Contributions (and income)
made to Family Members of a family group that was combined for
purposes of determining a Highly Compensated Employee's Actual
Contribution Ratio shall be allocated among Family Members in
proportion to the Contribution Percentage Amounts (including any
amounts required to be taken into account under subparagraphs
(B)(1) and (B)(2) of Section 1.5 of the Plan) of each Family
Member that are combined to determine the Actual Contribution
Ratio.
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<PAGE> 36
(F) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Aggregate Contribution arose, the
corrective distribution or forfeiture shall be made as soon as
administratively feasible after the date of termination of the
Plan, but in no event later than 12 months after the date of
termination.
(G) If the entire account balance of a Highly Compensated Employee
is distributed during the Plan Year in which the Excess
Aggregate Contribution arose, the distribution shall be deemed
to have been a corrective distribution of Excess Aggregate
Contributions (and income) to the extent that a corrective
distribution would otherwise have been required.
(H) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and income) shall be treated as a
pro-rata distribution of Excess Aggregate Contributions and
allocable income or loss.
(I) In no case may the amount of Excess Aggregate Contributions
distributed to a Highly Compensated Employee exceed the amount
of Employee Contributions and Matching Contributions made on
behalf of the Highly Compensated Employee for the Plan Year.
(J) A distribution of Excess Aggregate Contributions (and income)
shall be made under this section without regard to any notice or
consent otherwise required under sections 411(a)(11) and 417 of
the Code.
4.15 CORRECTIVE DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding any other
provision of the Plan, Excess Deferrals, plus any income and minus any
loss allocable thereto, may be distributed to any Participant to whose
account Excess Deferrals were allocated for the individual's taxable
year. Such a corrective distribution shall be made in accordance with
this section.
(A) Correction of Excess Deferrals After Taxable Year.
(1) Not later than the March 15 following the close of a
Participant's taxable year, the Participant may notify
the Plan of the amount of Excess Deferrals received by
the Plan during that taxable year. The notification
shall be in writing, shall specify the Participant's
Excess Deferrals, and shall be accompanied by the
Participant's written statement that if such amounts are
not distributed, these amounts, when added to all other
Elective Deferral Contributions made on behalf of the
Participant during the taxable year, shall exceed the
dollar limitation specified in section 402(g) of the
Code.
(2) The Participant is deemed to have notified the Plan of
Excess Deferrals if, not later than the March 1
following the close of a Participant's taxable year, the
Employer notifies the Plan on behalf of the Participant
of the Excess Deferrals. Such Excess Deferrals shall be
calculated by taking into
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<PAGE> 37
account only Elective Deferral Contributions under the
Plan and any other plans of the Employer.
(3) Not later than the April 15 following the close of the
taxable year, the Plan shall distribute to the
Participant the amount of Excess Deferrals designated
under subparagraphs (1) or (2) above.
(B) Correction of Excess Deferrals During the Taxable Year. A
Participant who has an Excess Deferral during a taxable year may
receive a corrective distribution during the same year. Such a
corrective distribution shall be made if:
(1) The Participant designates the distribution as an Excess
Deferral. The designation shall be made in the same
manner as the notification described in subparagraph
(A)(1) of this section. The Participant will be deemed
to have designated the distribution as an Excess
Deferral if the Employer makes the designation on behalf
of the Participant to the extent that the Participant
has Excess Deferrals for the taxable year calculated by
taking into account only Elective Deferral Contributions
to the Plan and other plans of the Employer.
(2) The corrective distribution is made after the date on
which the Plan received the Excess Deferral.
(3) The Plan designates the distribution as a distribution
of Excess Deferrals.
(C) If the Participant provides the Employer with satisfactory
evidence and written notice to demonstrate that all Elective
Deferral Contributions by the participant in this Plan and any
other qualified plan exceed the applicable limit under section
402(g) of the Code for such individual's taxable year, then the
Plan Administrator may (but is not required to) distribute
sufficient Elective Deferral Contributions (not to exceed the
amount of Elective Deferral Contributions actually contributed
on behalf of the Participant to this Plan during the
Participant's taxable year) from Plan to allow the Participant
to comply with the applicable limit. The evidence provided by
the Participant must establish clearly the amount of Excess
Deferrals. The Participant must present this evidence to the
Plan Administrator by the March 1 following the end of the
calendar year in which the Excess Deferrals occurred.
(D) Income Allocable to Excess Deferrals. The income allocable to
Excess Deferrals is equal to tile sum of allocable gain or loss
for the taxable year of the individual and shall be determined
as follows:
(1) The gain or loss allocable to Excess Deferrals is
determined by multiplying the income for the taxable
year allocable to Elective Deferral Contributions by a
fraction. The numerator of the fraction is the Excess
Deferrals by the Employee for the taxable year. The
denominator of the fraction is equal to the sum of:
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<PAGE> 38
(a) The total account balance of the Employee
attributable to Elective Deferral Contributions
as of the beginning of the Plan Year, plus
(b) The Employee's Elective Deferral Contributions
for the taxable year.
(2) The income allocable to Excess Deferrals shall not
include the allocable gain or loss for the period
between the end of the taxable year and the date of
distribution.
(E) No Employee or Spousal Consent Required. A corrective
distribution of Excess Deferrals (and income) shall be made
without regard to any notice or consent otherwise required under
sections 411(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Deferral being distributed shall be
forfeited. The Matching Contribution so forfeited shall be in
proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the Plan
Year in which the Excess Deferral arose. Forfeitures of Matching
Contributions or Qualified Matching Contributions that relate to
Excess Deferrals shall be applied to reduce Employer
contributions or pay Plan expenses.
4.16 QUALIFIED CONTRIBUTIONS. In lieu of distributing Excess Contributions as
provided in Section 4.13 of the Plan, or Excess Aggregate Contributions
as provided in Section 4.14 of the Plan, the Employer may take the
actions specified below in order to satisfy the Actual Deferral
Percentage Test or the Actual Contribution Percentage Test, or both,
pursuant to the regulations under the Code.
(A) At the election of the Employer, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, may
be taken into account as Elective Deferral Contributions for
purposes of calculating the Actual Deferral Ratio of a
Participant.
The amount of Qualified Nonelective Contributions or Qualified Matching
Contributions made under the terms of this Plan and taken into account
as Elective Deferral Contributions for purposes of calculating the
Actual Deferral Ratio, subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be such Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
that are needed to meet the Actual Deferral Percentage Test.
(B) At the election of the Employer, Qualified Nonelective
Contributions or Elective Deferral Contributions, or both, may
be taken into account as Matching Contributions for purposes of
calculating the Actual Contribution Ratio of a Participant.
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<PAGE> 39
(C) The amount of Qualified Nonelective Contributions or Elective
Deferral Contributions made under the terms of this Plan and
taken into account for purposes of calculating the Actual
Contribution Ratio, subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be such
Qualified Nonelective Contributions or Elective Deferral
Contributions, or both, that are needed to meet the Actual
Contribution Percentage Test.
(D) Any Qualified Nonelective Contribution, Qualified Matching
Contribution, and Elective Deferral Contribution taken into
account under paragraphs (A) or (B) must be allocated to the
Employee's Account as of a date within the Plan Year in which
the Excess Contribution or Excess Aggregate Contribution arose
and must be paid to the Plan no later than the 12-month period
immediately following the Plan Year to which the contribution
relates.
4.17 MULTIPLE USE OF ALTERNATIVE LIMITATION.
(A) Multiple use of the alternative limitation occurs if all of the
conditions of this paragraph (A) are satisfied:
(1) One or more Highly Compensated Employee of the Employer
are eligible employees in both a cash or deferred
arrangement subject to section 401(k) and a plan
maintained by the Employer subject to section 401(m).
(2) The sum of the Actual Deferral Percentage of the entire
group of eligible Highly Compensated Employees under the
arrangement subject to section 401(k) and the Actual
Contribution Percentage of the entire group of eligible
Highly Compensated Employees under the Plan subject to
section 401(m) exceeds the aggregate limit of paragraph
(C) of this section.
(3) Actual Deferral Percentage of the entire group of
eligible Highly Compensated Employees under the
arrangement subject to section 401(k) exceeds the amount
described in section 401(k)(3)(A)(ii)(I).
(4) The Actual Contribution Percentage of the entire group
of eligible Highly Compensated Employees under the
arrangement subject to section 401(m) exceeds the
amount described in section 401(m)(2)(A)(i).
(B) For purposes of this section, the aggregate limit is the greater
of:
(1) The sum of -
(a) 1.25 times the greater of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage, and
(b) Two percentage points plus the lesser of the
relevant Actual Deferral Percentage or the
relevant Actual Contribution
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<PAGE> 40
Percentage. In no event, however, may this
amount exceed twice the lesser of the relevant
Actual Deferral Percentage or the Actual
Contribution Percentage; or
(2) The sum of -
(a) 1.25 times the lesser of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage, and
(b) Two percentage points plus the greater of the
relevant Actual Deferral Percentage or the
relevant Actual Contribution Percentage. In no
event, however, may this amount exceed twice the
greater of the relevant Actual Deferral
Percentage or the relevant Actual Contribution
Percentage.
(C) For purposes of paragraph (B) of this section, the term
"relevant Actual Deferral Percentage" means the Actual Deferral
Percentage of the group of Nonhighly Compensated Employees under
the arrangement subject to section 401(k) for the Plan Year, and
the term "relevant Actual Contribution Percentage" means the
Actual Contribution Percentage of the group of Nonhighly
Compensated Employees eligible under the Plan subject to section
401(m) for the Plan Year beginning with or within the Plan Year
of the arrangement subject to section 401(k).
(D) The Actual Deferral Percentage and Actual Contribution
Percentage of the group of eligible Highly Compensated Employees
are determined after use of Qualified Nonelective Contributions
and Qualified Matching Contributions to meet the requirements of
the Actual Deferral Percentage Test and after use of Qualified
Nonelective Contributions and Elective Deferral Contributions to
meet the requirements of the Actual Contribution Percentage
Test. The Actual Deferral Percentage and Actual Contribution
Percentage of the group of Highly Compensated Employees are
determined after any corrective distribution or forfeiture of
Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions and after recharacterization of Excess
Contributions required without regard to this section. Only
plans and arrangements maintained by the Employer are taken into
account under paragraph (B). If the Employer maintains two or
more cash or deferred arrangements subject to section 401(k)
that must be mandatorily disaggregated pursuant to section
401(k)- 1 (g)(11)(iii) multiple use is tested separately with
respect to each plan.
(E) If multiple use of the alternative limit occurs with respect to
two or more plans or arrangements maintained by the Employer, it
shall be corrected by reducing the Actual Contribution
Percentage of Highly Compensated Employees in the manner
described in paragraph (F) of this section. Instead of making
this reduction, the Employer may eliminate the multiple use of
the alternative limitation by making Qualified Nonelective
Contributions to the Plan.
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<PAGE> 41
(F) The amount of the reduction by which each Highly Compensated
Employee's Actual Contribution Ratio is reduced shall be treated
as an Excess Aggregate Contribution. The Actual Contribution
Percentage of all Highly Compensated Employees under the plan
subject to reduction shall be reduced so that there is no
multiple use of the alternative limitation.
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ARTICLE V.
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following definitions are
atypical terms which refer only to terms used in the Limitations on
Allocations Sections of this Article V.
(A) Annual Additions. The term Annual Additions shall mean the sum
of the following amounts allocated on behalf of a Participant
for a Limitation Year:
(1) all contributions made by the Employer which shall
include:
- Elective Deferral Contributions, if any;
- Matching Contributions, if any;
- Qualified Matching Contributions, if any;
- Nonelective Contributions, if any;
- Qualified Nonelective Contributions, if any;
(2) all Forfeitures, if any;
(3) all Employee Contributions, if any.
For the purposes of this Article, Excess Amounts reapplied under Section
5.2 (D) shall also be included as Annual Additions. Also, for the
purposes of this Article, Employee Contributions are determined without
regard to deductible employee contributions within the meaning of
section 72(o)(5) of the Code.
Amounts allocated after March 31, 1984, to an individual medical
account, as defined in Internal Revenue Code section 415(l)(1), which is
part of a defined benefit plan maintained by the Employer, are treated
as Annual Additions to a defined contribution plan. Also, amounts
derived from contributions paid or accrued attributable to
post-retirement medical benefits allocated to the separate account of a
key employee, as defined in Internal Revenue Code section 419A(d)(3),
under a welfare benefit fund, as defined in Internal Revenue Code
section 419(e), maintained by the Employer, are treated as Annual
Additions to a defined contribution plan.
Contributions do not fail to be Annual Additions merely because they are
Excess Deferrals, Excess Contributions or Excess Aggregate Contributions
or merely because Excess Contributions or Excess Aggregate Contributions
are corrected through distribution or recharacterization. Excess
Deferrals that are distributed in accordance with Section 4.15 of the
Plan are not Annual Additions.
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<PAGE> 43
Forfeited Matching Contributions that are forfeited because the
contributions to which they relate are treated as Excess Aggregate
Contributions, Excess Contributions, or Excess Deferrals and that are
reallocated to the Participant Accounts of other Participants for the
Plan Year in which the forfeiture occurs, are treated as Annual
Additions for the Participants to whose accounts they are reallocated
and for the Participants from whose accounts they are forfeited.
(B) Compensation. The term Compensation means wages within the
meaning of section 3401(a) of the Code for the purposes of
income tax withholding at the source but determined without
regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor
in section 3401(a)(2) of the Code).
For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of this article, Compensation for a Limitation
Year is the Compensation actually paid or made available during such
Limitation Year.
(C) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation shall mean $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set
forth in Internal Revenue Code section 415(b)(1) as in effect
for the Limitation Year.
(D) Employer. The term Employer shall mean the Employer that adopts
this Plan. In the case of a group of employers which constitutes
a controlled group of corporations (as defined in Internal
Revenue Code section 414(b) as modified by section 415(h)), or
which constitutes trades or business (whether or not
incorporated) which are under common control (as defined in
section 414(c) as modified by section 415(h)), or affiliated
service groups (as defined in section 414(m)) of which the
adopting Employer is a part, all such employers shall be
considered a single Employer for purposes of applying the
limitations of this Article.
(E) Excess Amount. The term Excess Amount shall mean the excess of
the Participant's Annual Additions for the Limitation Year over
the Maximum Permissible Amount.
(F) Limitation Year. The term Limitation Year shall mean the Plan
Year.
(G) Maximum Permissible Amount. The term Maximum Permissible Amount
shall mean the lesser of (1) the Defined Contribution Dollar
Limitation, or (2) 25% of the Participant's Compensation for the
Limitation Year.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different period of 12 consecutive months, the
Maximum Permissible Amount for the short Limitation Year will be the
lesser of (1) the Defined Contribution Dollar
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Limitation multiplied by a fraction, the
numerator of which is the number of months in
the short Limitation Year, and the denominator
of which is 12, or (2) 25% of the Participant's
Compensation for the short Limitation Year.
5.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not maintain any
qualified plan in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year shall not
exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan.
(B) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible
Amount may be determined on the basis of the Participant's
estimated annual Compensation. Such Compensation shall be
determined on a reasonable basis and shall be uniformly
determined for all Participants similarly situated. Any employer
contributions based on estimated annual Compensation shall be
reduced by any Excess Amounts carried over from prior years.
(C) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year. In
the event a Participant separates from the Service of the
Employer prior to the end of the Limitation Year, the Maximum
Permissible Amount for such Participant shall be determined
prior to any distribution of his Participant's Account on the
basis of his actual Compensation. Any Excess Amounts shall be
disposed of in accordance with Section 5.2 (D).
(D) If there is an Excess Amount with respect to a Participant for a
Limitation Year as a result of a reasonable error in estimating
the Participant's annual compensation, an allocation of
forfeitures, a reasonable error in determining the amount of
elective deferrals (within the meaning of section 402(g)(3) of
the Code) that may be made with respect to any individual under
the limits of section 415 of the Code, or under other limited
facts and circumstances which the commissioner finds justified,
such Excess Amount shall be disposed of as follows:
(1) Any Employee Contributions (including earnings and
losses thereon) shall be returned to the Participant, to
the extent that the return would reduce the Excess
Amount. This distribution shall be made as soon as
administratively feasible after the Excess Amount is
determined. Employee Contributions so returned shall be
disregarded for purposes of the Actual Contribution
Percentage Test.
(2) If, after the application of subparagraph (1), an Excess
Amount still exists, (excluding Elective Deferral
Contributions) such Excess Amount shall be held
unallocated in a suspense account for the Limitation
Year and
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<PAGE> 45
allocated and reallocated in the next Limitation Year to
all Participants in the Plan. The excess amount must be
used to reduce Employer Contributions for the next
Limitation Year (and succeeding Limitation Years, as
necessary) for all of the Participants in the Plan. For
purposes of this subparagraph, the Excess Amount may not
be distributed to Participants or former Participants.
(3) If, after the application of subparagraph (2) an Excess
Amount still exists, then the Participant's Elective
Deferral Contributions (including earnings and losses
thereon) allocated for the Limitation Year shall be
returned to the Participant to the extent that. an
Excess Amount exists. This distribution shall be made as
soon as administratively feasible after the Excess
Amount is determined. Any Elective Deferral
Contributions returned under this paragraph shall be
disregarded for purposes of the Actual Deferral
Percentage Test.
(4) Alternatively, if after the application subparagraph (1)
an Excess Amount still exists, the Plan Administrator
may elect to dispose of the Excess Amount by applying
the procedure in subparagraph (3) before applying the
procedure in subparagraph (2). If the Plan Administrator
makes this election, the Plan Administrator must apply
it uniformly to all Participants in a Limitation Year.
(5) If a suspense account is in existence at any time during
a Limitation Year pursuant to this section, it will not
participate in the allocation of investment gains or
losses. If a suspense account is in existence at any
time during a particular Limitation Year, all amounts in
the suspense account must be allocated and reallocated
to Participants' Accounts before any Employer
Contributions or Employee Contributions which would
constitute Annual Additions may be made to the Plan for
that Limitation Year.
5.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one or more
defined contribution plans in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year, shall not
exceed the lesser of:
(1) The Maximum Permissible Amount, reduced by the sum of
any Annual Additions allocated to the Participant's
Account for the same Limitation Year under this Plan and
such other defined contribution plan; or
(2) Any other limitation contained in this Plan.
Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in
Subsection (1) above may be
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<PAGE> 46
determined on the basis of the Participant's estimated annual
Compensation for such Limitation Year. Such estimated annual
Compensation shall be determined for all Participants similarly
situated.
Any contribution made by the Employer based on estimated annual
Compensation shall be reduced by any Excess Amounts carried over
from prior years, if applicable.
(B) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 5.3 (A)
shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
(C) If amounts are contributed to a Participant's Account under this
Plan on an allocation date which does not coincide with the
allocation date(s) for all such other plans, and if a
Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount shall
be deemed to have derived from those contributions last
allocated.
(D) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributable to this
Plan will be the product of (1) and (2) below:
(1) The total Excess Amount allocated as of such date
(including any amount which would have been allocated
but for the limitations of Internal Revenue Code section
415).
(2) The ratio of (1) the amount allocated to the Participant
as of such date under this Plan, divided by (2) the
total amount allocated as of such date under all
qualified defined contribution plans (determined without
regard to the limitations of Internal Revenue Code
section 415).
(E) Any Excess Amounts attributed to this Plan shall be disposed of
as provided in Section 5.2 (D).
5.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a defined benefit
plan in addition to this Plan:
(A) If an individual is a Participant at any time in both this Plan
and a defined benefit plan maintained by the Employer, the sum
of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for any year may not exceed 1.0. In
the event that the sum of the Defined Contribution Plan Fraction
and the Defined Benefit Plan Fraction exceeds 1.0, the Defined
Contribution Plan Fraction will be reduced until the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction does not exceed 1.0.
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<PAGE> 47
If an individual was a Participant in this Plan or in any other
defined contribution plan maintained by the Employer which was
in existence on July 1, 1982, the numerator of the Defined
Contribution Plan Fraction will be adjusted if the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of
(1) the excess of the sum of the Fractions over 1.0 times (2)
the denominator of the Defined Contribution Plan Fraction, will
be permanently subtracted from the numerator of the Defined
Contribution Plan Fraction. The adjustment is calculated using
the Fractions as they would be computed as of the later of the
end of the last Limitation Year beginning before January 1,
1983, or June 30, 1983. This adjustment also will be made if at
the end of the last Limitation Year beginning before January 1,
1984, the sum of the Fractions exceeds 1.0 because of accruals
or additions that were made before the limitations of this
Article became effective to any plans of the Employer in
existence on July 1, 1982.
In addition, if an individual was a Participant in this Plan or
in any other defined contribution plan maintained by the
Employer which was in existence on May 6, 1986, the numerator of
the Defined Contribution Plan Fraction will be adjusted if the
Employer's defined benefit plan was also in existence on May 6,
1986, and the sum of the Defined Contribution Plan Fraction and
the Defined Benefit Plan Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
Fractions over 1.0 times (2) the denominator of the Defined
Contribution Plan Fraction, will be permanently subtracted from
the numerator of the Defined Contribution Plan Fraction. This
adjustment is calculated using the Fractions as they would be
computed as of the end of the last Limitation Year beginning
before January 1, 1987. In the event that a Participant's
accrued benefit as of December 31, 1986, under the defined
benefit plan exceeds the defined benefit dollar limitation set
forth in Internal Revenue Code section 415(b)(1), the amount of
that accrued benefit shall be used in both the numerator and the
denominator of the Defined Benefit Plan Fraction in making this
adjustment.
For purposes of this Section 5.4, all defined benefit plans of
the Employer, whether or not terminated, will be treated as one
defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, will be treated as one
defined contribution plan.
(B) The Defined Benefit Plan Fraction for any year is a fraction,
the numerator of which is the Participant's Projected Annual
Benefit under the defined benefit plan (determined as of the
close of the Limitation Year), and the denominator of which is
the lesser of (1) or (2) below:
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(b)(1)(A) on the last
day of the Limitation Year; or
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<PAGE> 48
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(b)(1)(B) with
respect to such Participant for the Limitation Year.
Notwithstanding the above, if the Participant was a participant
in one or more defined benefit plans maintained by the Employer
which were in existence on July 1, 1982, the denominator of the
Defined Benefit Plan Fraction will not be less than 125% of the
sum of the annual benefits under such plans which the
Participant had accrued as of the later of the end of the last
Limitation Year beginning before January 1, 1983 or June 30,
1983. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Internal Revenue Code section 415 as in effect
at the end of the 1982 Limitation Year.
(C) A Participant's Projected Annual Benefit is equal to the annual
benefit to which the Participant would be entitled under the
terms of the defined benefit plan based upon the following
assumptions:
(1) The Participant will continue employment until reaching
Normal Retirement Age as determined under the terms of
the plan (or current age, if that is later);
(2) The Participant's Compensation for the Limitation Year
under consideration will remain the same until the date
the Participant attains the age described in
sub-division (1) of this subparagraph; and
(3) 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.
(D) The Defined Contribution Plan Fraction for any Limitation Year
is a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's Accounts in such Limitation Year
and for all prior Limitation Years, and the denominator of which
is the lesser of (1) or (2) below for such Limitation Year and
for all prior Limitation Years of such Participant's employment
(assuming for this purpose, that Internal Revenue Code section
415(c) had been in effect during such prior Limitation Years):
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(c)(1)(A) on the last
day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(c)(1)(B) with
respect to such Participant for the Limitation Year.
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<PAGE> 49
For the purposes of determining these Limitations on
Allocations, any non-deductible employee contributions made
under a defined benefit plan will be considered to be a separate
defined contribution plan and will be considered to be part of
the Annual Additions for the appropriate Limitation Year.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan
Fraction with respect to any Plan Year ending after December 31,
1982, the denominator shall be an amount equal to the product
of:
(1) The denominator of the Defined Contribution Plan
Fraction, computed in accordance with the rules in
effect for the Plan Year ending in 1982; and
(2) the transition fraction, which is a fraction
(a) the numerator of which is the lesser of:
(i) $51,875, or
(ii) 1.4 times 25% of the Compensation of the
Participant for the Plan Year ending in
1981, and
(b) the denominator of which is the lesser of
(i) $41,500, or
(ii) 25% of the Compensation of the
Participant for the Plan Year ending in
1981.
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<PAGE> 50
ARTICLE VI.
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. Each Participant may elect, with his Spouse's
consent if required, a distribution in the form of an Annuity, a single
sum cash payment, or a combination of the above. All distributions are
subject to the provisions of Article VIII, Joint and Survivor Annuity
Requirements.
6.2 TIMING OF DISTRIBUTIONS. If the value of a Participant's Vested Interest
exceeds (or at the time of any prior distribution exceeded) $3,500 and
is immediately distributable (as defined in Section 8.5), the
Participant and his Spouse, if required, must consent to the
distribution before it is made.
Instead of consenting to a distribution, the Participant may make a
written election to defer the distribution for a specified period of
time ending no later than the Participant's attainment of age 62. A
Participant whose actual retirement date is on or after his Normal
Retirement Date may make a written election to defer the distribution
for a specified period of time subject to the requirements of Section
6.4. All such elections to defer shall be irrevocable.
If the Participant and Spouse, if applicable, do not consent to a
distribution or if no election to defer is made within 90 days after
receiving a written explanation of the optional forms of benefit
available pursuant to Income Tax Regulation 1.411 (a)(11), all benefits
shall be deferred to, and distribution shall be made as of the
Participant's attainment of age 62. The distribution will be made in the
form of a single sum cash payment (in the case of a Participant's
meeting the requirements of Section 8.1 (A)) or in accordance with
Section 8.2 (in the case of a Participant's not meeting the requirements
of Section 8.1(A)), unless the Participant elects another form of
benefit within the 90-day period prior to the date the distribution is
made.
If the value of a Participant's Vested Interest is $3,500 or less at the
time it becomes payable, the distribution shall be made in the form of a
single sum cash payment and shall be made upon such Participant's
Termination of Employment. Such a distribution may not be deferred.
Unless the Participant elects otherwise, the payment of benefits under
this Plan to the Participant shall begin not later than the 60th day
after the close of the Plan Year in which the later of (A) or (B),
below, occurs:
(A) the date on which the Participant attains his Normal Retirement
Age or age 62, if later; or
(B) the date on which the Participant terminates his Service
(including Termination of Employment, death or Disability) with
the Employer.
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<PAGE> 51
Notwithstanding the foregoing, the failure of a Participant and
Spouse, if required, to consent to a distribution while a
benefit is immediately distributable shall be deemed to be an
election to deter commencement of payment of any benefit
sufficient to satisfy the above paragraph.
6.3 DISTRIBUTION LIMITATION. Elective Deferral Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions, and
income allocable to each, are not distributable to a Participant or a
Beneficiary, in accordance with such Participant's or Beneficiary's
election, earlier than upon the Participant's Termination of Employment,
death, or disability.
Such amounts may also be distributed upon:
(A) Termination of the Plan without the establishment or maintenance
of a successor plan.
For purposes of this paragraph, a successor plan is any other
defined contribution plan maintained by the same employer.
However, if fewer than two percent of the Employees who are
eligible under the Plan at the time of its termination are or
were eligible under another defined contribution plan at any
time during the 24 month period beginning 12 months before the
time of the termination, the other plan is not a successor plan.
The term "defined contribution plan" means a plan that is a
defined contribution plan as defined in section 414(i) of the
Code, but does not include an employee stock ownership plan as
defined in section 4975(e) or 409 of the Code or a simplified
employee pension as defined in section 408(k) of the Code. A
plan is a successor plan only if it exists at the time the Plan
is terminated or within the period ending 12 months after
distribution of all assets from the Plan.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump
sum distribution" has the same meaning provided in section
402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(B) The disposition by the Employer to an unrelated corporation of
substantially all the assets (within the meaning of section
409(b)(2) of the Code) used in the trade or business of the
Employer if the Employer continues to maintain this Plan after
the disposition. However, a distribution may be made under this
paragraph only to an Employee who continues employment with the
corporation acquiring such assets.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or
otherwise becomes an employer whose employees accrue benefits
under the Plan. A purchaser also maintains the Plan if the Plan
is merged or consolidated with, or any assets or liabilities are
transferred from the Plan to a
49
<PAGE> 52
plan maintained by the purchaser in a transaction subject to
section 414(l)(1) of the Code. A purchaser is not treated as
maintaining the Plan merely because the Plan that it maintains
accepts rollover contributions of amounts distributed by the
Plan.
For purposes of this paragraph, the sale of "substantially all"
the assets used in a trade or business means the sale of at
least 85 percent of the assets.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump
sum distribution" has the same meaning provided in section
402(e)(4) of the Code, without regard to subparagraphs, (A)(i)
through (iv), (B), and (H) of that section.
(C) The disposition by the Employer to an unrelated entity or
individual of the Employer's interest in a subsidiary (within
the meaning of section 409(d)(3) of the Code) if the Employer
continues to maintain this Plan. However, a distribution may be
made under this paragraph only to an Employee who continues
employment with such subsidiary.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or
otherwise becomes an employer whose employees accrue benefits
under the Plan. A purchaser also maintains the Plan if the Plan
is merged or consolidated with, or any assets or liabilities are
transferred from the Plan to a plan maintained by the purchaser
in a transaction subject to section 414(l)(1) of the Code. A
purchaser is not treated as maintaining the Plan merely because
the Plan that it maintains accepts rollover contributions of
amounts distributed by the Plan.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump
sum distribution" has the same meaning provided in section
402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(D) In the case of Elective Deferral Contributions only, the
attainment of age 59-1/2, as described in Section 10.1 of the
Plan.
(E) In the case of Elective Deferral Contributions only, the
hardship of the Participant, as described in Section 10.3 of the
Plan.
6.4 COMMENCEMENT OF DISTRIBUTIONS. Notwithstanding the provisions of the
preceding Timing; of Distributions Section, distributions to a
Participant will commence no later than the date determined in
accordance with the provisions of this Section.
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<PAGE> 53
Distribution to a Participant must commence no later than the required
beginning date. The first required beginning date of a Participant is
the first day of April of the calendar year following the calendar year
in which the Participant attains age 70-1/2.
The required beginning date of a Participant who attains age 70-1/2
before January 1, 1988, shall be the first day of April of the calendar
year following the calendar year in which the later of retirement or
attainment of age 70-1/2 occurs, provided the Participant was not a 5%
owner in the Plan Year ending in the year in which the Participant
attained age 66-1/2 or any later Plan Year. A Participant is treated as
a 5% owner for purposes of this section if such Participant is a 5%
owner as defined in section 416(i) of the Code (determined in accordance
with section 416 but without regard to whether the Plan is Top-Heavy).
The required beginning date of a Participant who is a 5% owner during
any year beginning after December 31, 1979, is the first day of April
following the later of:
(A) the calendar year in which the Participant attained age 70-1/2,
or
(B) the earlier of the calendar year with or within which ends the
Plan Year in which the Participant becomes a 5% owner, or the
calendar year in which the Participant retires.
Once distributions have begun to a 5% owner under this section, they
must continue to be distributed, even if the Participant ceases to be a
5% owner in a subsequent year. Distribution to such Participant must
commence no later than the first day of April following the calendar
year in which the Participant's Termination of Employment occurs.
If distribution to any Participant is made in other than a single sum
payment, the second payment shall be distributed no later than the
December 31 following the April 1 by which the first payment was
required to be distributed. Each succeeding payment shall be distributed
no later than each December 31 thereafter.
6.5 DISTRIBUTION REQUIREMENTS.
(A) Except as otherwise provided in Article VIII, the requirements
of this Section shall apply to my distribution of a
Participant's Accrued Benefit.
(B) All distributions required under this Article shall be
determined and made in accordance with the Income Tax
Regulations under section 401(a)(9), including the minimum
distribution incidental benefit requirement of section
1.401(a)(9)-2 of the regulations.
(C) Limits on Settlement Options. Distributions, if not made in a
lump sum, may only be made over one of the following periods (or
a combination thereof):
(1) the life of the Participant,
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<PAGE> 54
(2) the life of the Participant and a designated
Beneficiary,
(3) a period certain not extending beyond the life
expectancy of the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of die Participant and a designated
Beneficiary.
(D) Minimum Amounts to be Distributed. If the Participant's entire
Vested Interest is to be distributed in other than a lump sum,
then the amount to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the
Participant's entire Vested Interest by the life expectancy of
the Participant or the joint and last survivor expectancy of the
Participant and designated Beneficiary. Life expectancy and
joint and last survivor expectancy are computed by the use of
the return multiples contained in section 1.72-9 of the Income
Tax Regulations. For purposes of this computation, a
Participant's life expectancy may be recalculated no more
frequently than annually; however, the life expectancy of a
Beneficiary other than the Participant's Spouse may not be
recalculated.
(1) If the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
life expectancy of the Participant.
(2) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning with
distributions for the first distribution calendar year,
shall not be less than the quotient obtained by dividing
the Participant's benefit by the lesser of (1) the
applicable life expectancy or (2) if the Participant's
Spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of
section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall
be distributed using the applicable life expectancy in
subsection (d)(1) above as the relevant divisor without
regard to regulations section 1.401(a)(9)-2.
(3) The minimum distribution required for the Participant's
first distribution calendar year must be made on or
before the Participant's required beginning date. The
minimum distribution for other calendar years, including
the minimum distribution for die distribution calendar
year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that
distribution calendar year.
6.6 NON-TRANSFERABLE. The Participant's right to any Annuity payments,
benefits, and refunds is not transferable and shall be free from the
claims of all creditors to the fullest extent permitted by law.
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<PAGE> 55
6.7 DEATH DISTRIBUTION PROVISIONS. If the Participant dies before
distribution of his Vested interest commences, the following provisions
shall apply:
(A) If a distribution is to be made to a Beneficiary other than the
Surviving Spouse:
(1) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, unless the Beneficiary
elects another form of distribution, that portion of the
Participant's Vested Interest payable to the Beneficiary
will be distributed in the form of a single sum cash
payment within a reasonable period of time after the
Plan Administrator is notified of the Participant's
death.
(2) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it becomes
payable, the distribution shall always be made in the
form of a single sum cash payment and shall be paid
within a reasonable period of time after the Plan
Administrator is notified of the Participant's death.
(B) If the distribution is to be made to a Beneficiary who is the
Surviving Spouse, such distribution will be made in accordance
with the following:
(1) If the Participant had never elected a life Annuity form
of distribution under the Plan:
(a) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, unless the
surviving spouse elects another form of
distribution, that portion of the Participant's
Vested Interest payable to the Surviving Spouse
will be distributed in the form of a single sum
cash payment within a reasonable period of time
after the Plan Administrator is notified of the
Participant's death.
(b) If the present value of the Participant's Vested
Interest payable to the Surviving Spouse is
$3,500 or less at the time it becomes payable,
the distribution shall always be made in the
form of a single sum cash payment and shall be
made within a reasonable period of time after
the Plan Administrator is notified of the
Participant's death.
(2) If the Participant had previously elected a life Annuity
form of distribution under the Plan:
(a) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500 and is immediately
distributable (as defined in Section 8.5), the
Surviving Spouse must consent to the
distribution before it is made. If the
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<PAGE> 56
Surviving Spouse does not consent to a
distribution, all benefits shall be deferred to
a date that complies with the terms of Section
6.8 (B).
The distribution shall be made in accordance
with the provisions of Section 83.
(b) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it
becomes payable, the distribution shall always
be made in the form of a single sum cash payment
and shall be paid within a reasonable period of
time after the Plan Administrator is notified of
the Participant's death.
6.8 DEATH DISTRIBUTION COMMENCEMENT DATE. Upon the death of the Participant,
the following distribution provisions shall take effect:
(A) If the Participant dies after distribution of his entire Vested
Interest has commenced, the remaining portion of such Vested
Interest will continue to be distributed at least as rapidly as
under The method of distribution being used prior to the
Participant's death.
In no event shall distribution of the Participant's remaining
Vested Interest be made in a lump sum after the Participant's
death unless such distribution is consented to, in writing, by
the Participant's Surviving Spouse, if any.
(B) If the Participant dies before distribution of his Vested
Interest commences, the Participant's entire Vested Interest
will be distributed no later than five years after the
Participant's death except to the extent that an election is
made to receive distributions in accordance with (1) or (2)
below:
(1) If any portion of the Participant's Vested Interest is
payable to a designated Beneficiary, distributions may
be made in substantially equal installments over the
life or Life expectancy of the designated Beneficiary
(or over a period not extending beyond the Life
expectancy of such Beneficiary), commencing no later
than one year after the Participant's death;
(2) If the designated Beneficiary is the Participant's
Surviving Spouse, the date distributions are required to
begin in accordance with (1) above shall not be earlier
than the date on which the Participant would have
attained age 70-1/2. However, the Surviving Spouse may
elect, at any time following the Participant's death, to
defer the date on which distributions will begin until
no later than the date on which the Participant would
have attained age 70-1/2 and, if the Spouse dies before
payments begin, subsequent distributions shall be made
as if the Spouse had been the Participant.
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(C) For purposes of (B) above, payments will be calculated by use of
the return multiples specified in section 1.72-9 of the Income
Tax Regulations. Life expectancy of a Surviving Spouse may be
recalculated annually; however, in the case of any other
designated Beneficiary, such life expectancy will be calculated
at the time payment first commences without further
recalculation.
(D) For purposes of this Section (Death Distribution Commencement
Date) any amount paid to a child of the Participant will be
treated as if it had been paid to the Surviving Spouse if the
amount becomes payable to the Surviving Spouse when the child
reaches the age of majority.
6.9 TRANSITIONAL RULE.
(A) Notwithstanding the other requirements of this Article and
subject to the requirements of Article VII, distribution on
behalf of any Employee may be made in accordance with all of the
following requirements (regardless of when such distribution
commences):
(1) The distribution by the Plan is one which would not have
disqualified such Plan under Internal Revenue Code
section 401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest
in the trust is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(3) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January
1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will
be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee
listed in order of priority.
(B) A distribution upon death will not be covered by this
Transitional Rule unless the information in the designation
contains the required information described above with respect
to the distribution to be made upon the death of the Employee.
(C) For any distribution which commences before January 1, 1984, but
continues after December :31, 1983, the Employee or the
Beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was
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specified in writing and the distribution satisfies the
requirements in Subsections (A)(1) and (A)(5).
(D) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Internal Revenue Code section
401(a)(9) as amended. Any changes in the designation will be
considered to be a revocation of the designation. However, the
mere substitution or addition of another Beneficiary (one not
named in the designation) under the designation will not be
considered to be a revocation of the designation, so long as
such substitution or addition does not alter the period over
which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant
measuring life).
6.10 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to Section
16.8 may be made without regard to the age or employment status of the
Participant.
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ARTICLE VI-A
DIRECT ROLLOVERS
6A.1 Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Article, a
Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover, except as otherwise provided by
the Employer's administrative procedures as permitted by regulations. In
addition, a Distributee's election of a Direct Rollover shall be subject
to the following requirements:
(A) If the Distributee elects to have only a portion of an Eligible
Rollover Distribution paid to an Eligible Retirement Plan in a
Direct Rollover, that portion must be equal to at least $500.
(B) If the entire amount of a Distributee's Eligible Rollover
Distribution is $500 or less, the distribution may not be
divided. Instead, the entire amount must either be paid to the
Distributee or to an Eligible Retirement Plan in a Direct
Rollover.
(C) A Distributee may not elect a Direct Rollover if the
Distributee's Eligible Rollover Distributions during a year are
reasonably expected by the Plan Administrator to total less than
$200 (or any lower minimum amount specified by the Plan
Administrator).
(D) A Distributee may not elect a Direct Rollover of an Offset
Amount.
(E) A Distributee's election to make or not make a Direct Rollover
with respect to one payment in a series of periodic payments
shall apply to all subsequent payments in the series, except
that a Distributee shall be permitted at any time to change,
with respect to subsequent payments in the series of periodic
payments, a previous election to make or not make a Direct
Rollover. A change of election shall be accomplished by the
Distributee notifying the Plan Administrator of the change. Such
notice must be in the form and manner prescribed by the Plan
Administrator.
6A.2 Definitions.
(A) Direct Rollover: A Direct Rollover is a payment by the plan to
the Eligible Retirement Plan specified by the Distributee.
(B) Distributee: A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
Surviving Spouse and the Employee's or former Employee's Spouse
who is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the Spouse or former
Spouse.
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(C) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the
code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the Surviving Spouse, an Eligible Retirement
Plan is an individual retirement account or an individual
retirement annuity.
(D) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(E) Offset Amount: An Offset Amount is the amount by which a
Participant's Account is reduced to repay a loan from the Plan
(including the enforcement of the Plan's security interest in
the Participant's Account).
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ARTICLE VII.
RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement Age
shall have a Vesting Percentage of 100%. If a Participant retires from
the active Service of the Employer on his Normal Retirement Date, he
shall be entitled to receive a distribution of the entire value of his
Participant's Account as of his Normal Retirement Date.
7.2 LATE RETIREMENT. A Participant may continue in the Service of the
Employer after his Normal Retirement Age, and in such event he shall
retire on his Late Retirement Date. Such Participant shall continue as a
Participant under this Plan until such Late Retirement Date. The
Participant shall have a Vesting Percentage of 100% and shall be
entitled to receive a distribution of the entire value of his
Participant's Account as of his Late Retirement Date.
7.3 DISABILITY RETIREMENT. A Participant who retires from the Service of the
Employer on account of Disability shall have a Vesting Percentage of
100% and shall be entitled to receive a distribution of the entire value
of his Participant's Account as of his Disability Retirement Date.
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ARTICLE VIII.
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 GENERAL. The provisions of this Article shall take precedence over any
conflicting provision in this Plan.
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or after
August 23, 1984, and such other Participants as provided in Section 8.7,
unless:
(A) upon the death of the Participant the Participant's entire
Vested Interest will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or, if the
Surviving Spouse has already consented in a manner conforming to
a Qualified Election, then to the Participant's designated
Beneficiary;
(B) the Participant does not elect payments in the form of a Life
Annuity and has not previously elected payments in the form of a
Life Annuity under the Plan, and
(C) as to the Participant, the Plan is not a direct or indirect
transferee of a defined benefit plan, money purchase pension
plan (including a target benefit plan), stock bonus, or
profit-sharing plan which would otherwise provide for a Life
Annuity form of payment to the Participant.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form
of benefit is selected pursuant to a Qualified Election within the
ninety-day period ending on the first day on which all events have
occurred which entitle the Participant to a benefit, a married
Participant's Vested Interest will be paid in the form of a Qualified
Joint and Survivor Annuity.
An unmarried Participant will be provided a single Life Annuity unless
the Participant elects another form of benefit during the applicable
Election Period.
8.3 PAYMENT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional
form of benefit has been selected within the Election Period pursuant to
a Qualified Election, if a married Participant dies before his Annuity
Starting Date, then the Participant's entire Vested Interest, less the
amount of any unpaid loan balance outstanding under the terms of Article
X-A, shall be applied toward the purchase of an immediate Annuity for
the life of the Surviving Spouse. As an alternative to receiving the
benefit in this form of an Annuity, the Surviving Spouse may elect to
receive a single cash payment or any other form of payment provided for
in the Plan within a reasonable time after the Participant's death.
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8.4 DEFINITIONS.
(A) Election Period: The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on
the date of the Participant's death. If a Participant separates
from Service prior to the first day of the Plan Year in which
age 35 is attained, with respect to the account balance as of
the date of separation, the Election Period shall begin on the
date of separation.
A Participant who has not attained age 35 as of the end of a
Plan Year, may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period
beginning on the date of such election and ending on the first
day of the Plan Year in which the Participant will attain age
35. Such election shall not be valid unless the Participant
receives a written explanation of the Qualified Preretirement
Survivor Annuity in such terms as are comparable to the
explanation required under Section 8.6 (A). Qualified
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after such date
shall be subject to the full requirements of this Article.
(B) Qualified Election: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(a) the Participant's Spouse consents in writing to the
election; (b) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal consent
(or the Spouse expressly permits designations by the Participant
without any further spousal consent); (c) the Spouse's consent
acknowledges the effect of the election; and (d) the Spouse's
consent is witnessed by a Plan representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a Plan
representative that such written consent cannot be obtained
because:
(1) there is no Spouse;
(2) the Spouse cannot be located;
(3) the Participant is legally separated or has been
abandoned within the meaning of local law, and the
Participant has a court order to such effect;
(4) of other circumstances as the Secretary of the Treasury
may by regulations prescribe,
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the Participant's election to waive coverage will be considered
a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable,
and that the Spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver may be made
by a Participant without the consent of the Spouse at any time
before the commencement of benefits. The number of revocations
shall not be limited. No consent obtained under this provision
shall be valid unless the Participant has received notice as
provided in Section 8.6 below.
(C) Qualified Joint and Survivor Annuity: An immediate Annuity for
the life of the Participant with a survivor Annuity for the life
of the Spouse which is not less than 50% and not more than 100%
of the amount of the Annuity which is payable during the joint
lives of the Participant and the Spouse and which is the amount
of benefit which can be purchased with the Participant's entire
Vested Interest. If no survivor Annuity percentage has been
specified in an election, the percentage payable to the Spouse
will be 50%.
Notwithstanding the above paragraph, a Qualified Joint and
Survivor Annuity for an unmarried Participant shall mean an
Annuity for the life of the Participant.
(D) Qualified Preretirement Survivor Annuity: A survivor Annuity for
the life of the Spouse in the amount which can be purchased with
the Participant's entire Vested Interest.
(E) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the
Participant. A former Spouse may be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified
Domestic Relations Order as described in Internal Revenue Code
section 414(p).
8.5 CONSENT REQUIREMENTS. Only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is immediately distributable.
Neither the consent of the Participant nor the Participant's Spouse
shall be required to the extent that a distribution is required to
satisfy section 401(a)(9) or section 415 of the Code. An account balance
is immediately distributable if any part of the account balance could be
distributed to the Participant (or Surviving Spouse) before the
Participant attains (or would have attained if not deceased) the later
of Normal Retirement Age or age 62.
8.6 NOTICE REQUIREMENTS.
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(A) In the case of a Qualified Joint and Survivor Annuity as
described in Section 8.4 (C), the Plan Administrator shall
provide each Participant within a reasonable period prior to the
commencement of benefits a written explanation of (i) the terms
and conditions of a Qualified Joint and Survivor Annuity; (ii)
the Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of benefit;
(iii) the rights of a Participant's Spouse; (iv) the right to
make, and the effect of, a revocation of a previous election to
waive the Qualified Joint and Survivor Annuity; (v) a general
description of the eligibility conditions and other material
features of the optional forms of benefit; and (vi) sufficient
additional information to explain the relative values of the
optional forms of benefit available to them under this Plan.
(B) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 8.4 (D), the Plan Administrator shall
provide each Participant within the period beginning on the
first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age 35, a written
explanation of the Qualified Preretirement Survivor Annuity in
such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section 8.6
(A) to a Qualified Joint and Survivor Annuity.
If a Participant enters the Plan after the first day of the Plan
Year in which the Participant attained age 32, the Plan
Administrator shall provide notice no later than the close of
the second Plan Year succeeding the entry of the Participant in
the Plan.
If a Participant enters the Plan after he has attained age 35,
the Plan Administrator shall provide notice within a reasonable
period of time following the entry of the Participant in the
Plan.
If a Participant's Termination of Employment occurs before the
Participant attains age 35, the Plan Administrator shall provide
notice within one year of such Termination of Employment.
8.7 TRANSITIONAL RULES.
(A) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by
the previous Sections of this Article must be given the
opportunity to elect to have the prior Sections of this Article
relating to the Qualified Preretirement Survivor Annuity apply
if such Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had
at least 10 Years of Service for vesting purposes when he
separated from Service.
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(B) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
Section 8.7 (D).
(C) The respective opportunities to elect (as described in Sections
8.7 (A) and 8.7 (B) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise commence to said
Participants.
(D) Any Participant who has elected pursuant to Section 8.7 (B) of
this Article and any Participant who does not elect under
Section 8.7 (A) or who meets the requirements of Section 8.7 (A)
except that such Participant does not have at least 10 Years of
Service for vesting purposes when he separates from Service,
shall have his benefits distributed in accordance with all of
the following requirements if benefits would have been payable
in the form of a life annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(a) begins to receive payments under the Plan on or
after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while
still working for the Employer; or
(c) begins to receive payments on or after the
Qualified Early Retirement Age; or
(d) separates from Service on or after attaining
Normal Retirement Age (or the Qualified Early
Retirement Age) and after satisfying the
eligibility requirements for the payment of
benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in
the form of a Qualified Joint and Survivor Annuity,
unless the Participant has elected otherwise during the
election period. The election period must begin at least
six months before the Participant attains Qualified
Early Retirement Age and end not more than 90 days
before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of Early Survivor Annuity: A Participant who is
employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, during the
election period, to have a survivor annuity payable on
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death. If the Participant elects the survivor annuity,
payments under such Annuity must not be less than the
payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her
death. Any election under this provision will be in
writing and may be changed by the Participant at any
time. The election period begins on the later of (1) the
90th day before the Participant attains the Qualified
Early Retirement Age, or (2) the date on which
participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Section 8.7 (D) :
(a) Qualified Early Retirement Age is the latest of:
(i) the earliest date, under the Plan, on
which the Participant may elect to
receive retirement benefits; or
(ii) the first day of the 120th month
beginning before the Participant reaches
Normal Retirement Age; or
(iii) the date the Participant begins
participation.
(b) Qualified Joint and Survivor Annuity is an
Annuity for the life of the Participant with a
survivor annuity for the life of the Spouse as
described in Section 8.4(C).
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ARTICLE IX.
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of Employment, he shall
be entitled to receive a distribution of his entire Vested Interest.
Such distribution shall be further subject to the terms and conditions
of Article VI.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and the Participant does not take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, the non-vested portion of his Participant's Account
will become a Forfeiture upon the date the Participant incurs five
consecutive One-Year Breaks in Service.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and such Participant does take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, or if the Participant's Vesting Percentage is 0%,
the non-vested portion of his Participant's Account will become a
Forfeiture immediately.
If the Participant, whose non-vested portion of his Participant's
Account became a Forfeiture in accordance with the terms of the
preceding paragraph, is later rehired by the Employer and re-enrolls in
the Plan, Subsection (A), (B) or (C) below, as applicable, will apply:
(A) If the Participant was 0% vested at his Termination of
Employment and did not incur five consecutive One-Year Breaks in
Service after such date, the amount which became a Forfeiture,
if any, shall be restored by the Employer at the time such
Participant re-enrolls in the Plan. The Forfeiture, so restored,
shall be included as part of that portion of his Participant's
Account subject to the Vesting Percentage.
(B) If the Participant's Vesting Percentage was not 100% at his
Termination of Employment and if the Participant did not incur
five consecutive One-Year Breaks in Service after such date, the
Participant shall be entitled to repay the portion of the
distribution made at his Termination of Employment derived from
Employer Contributions. The portion of the repayment that is
attributable to amounts that were subject to the Vesting
Percentage will no longer be considered a distribution for
purposes of determining the Participant's Vested Interest. The
repayment of such portion must be made before the Participant
has incurred five consecutive One-Year Breaks in Service
following the date he received the distribution or five years
after the Participant is rehired by the Employer, whichever is
earlier.
If the Participant elects to make such repayment, the amount
which became a Forfeiture, if any, shall be restored by the
Employer at the same time such repayment is made. The
Forfeiture, so restored, and the repayment shall be
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included as part of that portion of his Participant's
Account subject to the Vesting Percentage. However, if
the Participant does not elect to repay the distribution
made in accordance with this Article within the period
of time specified above, that Forfeiture shall remain a
Forfeiture.
(C) If the Participant had incurred five consecutive One-Year Breaks
in Service after his Termination of Employment, the amount which
became a Forfeiture shall remain a Forfeiture and such
Participant shall be prohibited from repaying a distribution
made at his Termination of Employment.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once the
Participant incurs five consecutive One-Year Breaks in Service in
accordance with Article II.
9.3 APPLICATION OF FORFEITURES. Any Forfeiture arising in accordance with
the provisions of Section 9.1 shall be used by the Employer to reduce
and in lieu of the contributions made by the Employer next due under
Article IV, or to pay Plan expenses, at the earliest opportunity after
such Forfeiture becomes available.
The provisions of the preceding sentence notwithstanding, in the event
that a former Participant is rehired by the Employer and the Employer is
required by the provisions of Section 9.1 of this Plan to restore the
amount of a separate account that had been created upon such
Participant's prior Termination of Employment and later forfeited,
Forfeitures, if any, will first be used to restore such separate account
to its value as of such Participant's prior Termination of Employment
date. In the event that the available Forfeitures are not sufficient to
make such restoration, the Employer will make an additional contribution
sufficient to make such restoration.
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ARTICLE X.
WITHDRAWALS
10.1 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. Distributions of Elective Deferral Contributions may be
made to a Participant in the event of a hardship. For purposes of this
section, a distribution is made on account of hardship only if the
distribution is made both on account of an immediate and heavy financial
need of the Employee and is necessary to satisfy the financial need. In
addition, for Plan Years beginning after December 31, 1988 any
distribution on account of hardship shall be limited to the
distributable amount described in paragraph (C) of this section.
(A) The following are the only financial needs considered immediate
and heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d) of
the Code previously incurred by the Employee, the
Employee's Spouse, or any dependents of the Employee (as
defined in section 152 of the Code) or necessary for
these persons to obtain medical care described in
section 213(d) of the Code;
(2) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Employee, his Spouse, children, or dependents (as
defined in section 1.52 of the Code);
(3) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage
payments); or
(4) Payments necessary to prevent the eviction of the
Employee from the Employee's principal residence or
foreclosure on the mortgage on that residence.
(B) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if all
of the following requirements are satisfied:
(1) The hardship distribution is not in excess of the amount
of the immediate and heavy financial need of the
Employee. The amount of an immediate and heavy financial
need may include the amounts necessary to apply any
federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
(2) The Employee had obtained all distributions, other than
hardship distributions, and all nontaxable (at the time
of the loan) loans currently available under all plans
maintained by the Employer.
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(3) The Employee is suspended from making Elective Deferral
Contributions and Employee Contributions to the Plan for
at least 12 months after receipt of the hardship
distribution. In addition, the Employee must be
prohibited under the terms of the plan or an otherwise
enforceable agreement from making Elective Deferral
Contributions and Employee Contributions to all other
plans maintained by the Employer for at least 12 months
after receipt of the hardship distribution.
For this purpose, the phrase "all other plans of the
Employer" means all qualified and nonqualified plans of
deferred compensation maintained by the Employer. The
phrase includes a stock option, stock purchase, or
similar plan, or a cash or deferred arrangement that is
part of a cafeteria plan within the meaning of section
125 of the Code. However, it does not include the
mandatory employee contribution part of a defined
benefit plan. It also does not include a health or
welfare benefit plan, including one that is part of a
cafeteria plan within the meaning of section 125 of the
Code.
(4) The Employee may not make Elective Deferral
Contributions to the Plan for the Employee's taxable
year immediately following the taxable year of the
hardship distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable year
less the amount of such Employee's Elective Deferral
Contributions for die taxable year of the hardship
distribution. In addition, all other plans maintained by
the Employer must limit the Employee's Elective Deferral
Contributions for the next taxable year to the
applicable limit under section 402(g) of the Code for
that year minus the Employee's Elective Deferral
Contributions for the year of the hardship distribution.
(C) The distributable amount is equal to the Employee's total
Elective Deferral Contribution as of the date of distribution,
reduced by the amount of previous distributions of Elective
Deferral Contributions on account of hardship. The Employee's
total Elective Deferral Contributions shall be increased by
income allocable to Elective Deferral Contributions. In the case
of income allocable to Elective Deferral Contributions, the
distributable amount may only include amounts that were credited
to the Employee's Account as of December 31, 1988.
10.2 WITHDRAWAL OF PRIOR EMPLOYER CONTRIBUTIONS. A Participant may elect to
withdraw from his Participant's Account, at any time, an amount equal to
any whole percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account attributable to the value of his Prior Employer
Contributions, including earnings.
10.3 WITHDRAWAL OF PRIOR EMPLOYEE CONTRIBUTIONS. A Participant may elect to
withdraw from his Participant's Account, at any time, an amount equal to
any whole
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percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account attributable to the value of his Prior Employee
Contributions, including earnings.
10.4 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. At any time a Participant may
elect to withdraw from his Participant's Account an amount up to 100% of
the value of that portion of his account attributable to his Rollover
Contributions as defined in Article IV. Such an election shall become
effective in accordance with the Notification Section below.
10.5 NOTIFICATION. The Participant shall notify the Administrator in writing
of his election to make a withdrawal under the preceding provisions of
this Article X. Any such election shall be effective as of the date
specified in such notice, which date must be at least 15 days after such
notice is filed. Payment of the withdrawal shall be subject to the terms
and conditions of Article VI.
10.6 NON-REPAYMENT. Withdrawals made in accordance with this Article X may
not be repaid.
10.7 SPOUSAL CONSENT TO WITHDRAWAL. Prior to obtaining a withdrawal in
accordance with this Article X, a married Participant must obtain
spousal consent in accordance with the provisions of Article VIII unless
such Participant meets the requirements set forth in Sections 8.1(A),
(B) and (C).
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ARTICLE X-A
LOANS
10A.1 LOANS TO PARTICIPANTS. The Plan Administrator may make a bona fide loan
to a Participant, in an amount which, when added to the outstanding
balance of all other loans to the Participant from all qualified plans
of the Employer, does not exceed the lesser of $50,000 reduced by the
excess of the Participant's highest outstanding loan balance during the
12 months preceding the date on which the loan is made over the
outstanding loan balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account. Participants
will be limited to only one outstanding loan at a time.
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided,
however, that all loans granted hereunder:
(A) are available to all Participants and Beneficiaries, who are
parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis;
(B) are not made available to Highly Compensated Employees on a
basis greater than the basis made available to other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) unless a Participant meets the requirements set forth in
Sections 8.1(A), (B) and (C), are made only after a Participant
obtains the consent of his Spouse, if any, to use his
Participant's Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be so
secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent shall thereafter
be binding with respect to the consenting Spouse or any
subsequent Spouse with respect to that loan. A new consent shall
be required if the Participant's Account is used for
renegotiation, extension, renewal or other revision of the loan.
(F) are made in accordance with and subject to all of the provisions
of this Article.
10A.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set of
procedures, set forth in the summary plan description, by which all
loans will be administered. Such rules, which are incorporated herein by
reference, will include, but not be limited to, the following:
(A) the person or persons authorized to administer the loan program,
identified by name or position;
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(B) the loan application procedure;
(C) the basis for approving or denying loans;
(D) any limits on the types of loans permitted;
(E) the procedure for determining a "reasonable" interest rate;
(F) acceptable collateral;
(G) default conditions; and
(H) steps which will be taken to preserve Plan assets in the event
of default.
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ARTICLE XI.
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and defraying
reasonable expenses, of administering the Plan. Each Fiduciary shall act
with the care, skill, prudence, and diligence under the circumstances
that a prudent man acting in a like capacity and familiar with such
matters would use in conducting an enterprise of like character and with
like aims, in accordance with the documents and instruments governing
this Plan, insofar as such documents and instruments are consistent with
this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may serve
in more than one fiduciary capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which
he may be entitled as a Participant or Beneficiary in this Plan, so long
as the benefit is computed and paid on a basis which is consistent with
the terms of this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to prevent any
Fiduciary from receiving any reasonable compensation for services
rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer
shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been appointed, he is
required to acknowledge in writing that he has undertaken a Fiduciary
responsibility with respect to the Plan.
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ARTICLE XII.
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or
persons to serve as Administrator under the Plan and such person, by
joining in the execution of this Plan and Trust Agreement accepts such
appointment and agrees to act in accordance with the terms of the Plan.
12.2 DUTIES AND AUTHORITY. The Administrator shall administer the Plan in a
nondiscriminatory manner for the exclusive benefit of Participants and
their Beneficiaries.
The Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof, including but not limited to the following:
(A) To determine all questions relating to a Participant's coverage
under the Plan;
(B) To maintain all necessary records for the administration of the
Plan;
(C) To compute and authorize the payment of retirement income and
other benefit payments to eligible Participants and
Beneficiaries;
(D) To interpret and construe the provisions of the Plan and to make
regulations which are not inconsistent with the terms thereof;
and
(E) To advise or assist Participants regarding any rights, benefits,
or elections available under the Plan.
The Administrator shall take all such actions as are necessary to
operate, administer, and manage the Plan as a retirement program which
is at all times in full compliance with any law or regulation affecting
this Plan.
The Administrator may allocate certain specified duties of plan
administration to an individual or group of individuals who, with
respect to such duties, shall have all reasonable powers necessary or
appropriate to accomplish them.
12.3 EXPENSES AND CONDENSATION. All expenses of administration may be paid
out of the Trust fund unless paid by the Employer. Such expenses shall
include any expenses incident to the functioning of the Administrator,
including, but not limited to, fees of accountants, counsel, and other
specialists and their agents, and other costs of administering the Plan.
Until paid, the expenses shall constitute a liability of the Trust fund.
However, the Employer may reimburse the Trust fund for any
administration expense incurred. Any administration expense paid to the
Trust fund as a reimbursement shall not be considered an Employer
Contribution. Nothing shall prevent the Administrator from receiving
reasonable compensation for services rendered in
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administering this Plan, unless the Administrator already receives
full-time pay from any Employer adopting the Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to perform his
functions, the Employer shall supply full and timely information to the
Administrator on all matters relating to this Plan as the Administrator
may require.
12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one person has been duly nominated to serve on the Administrative
Committee and has signified in writing the acceptance of such
designation, the signature(s) of one or more persons may be accepted by
an interested party as conclusive evidence that the Administrative
Committee has duly authorized the action therein set forth and as
representing the will of and binding upon the whole Administrative
Committee. No person receiving such documents or written instructions
and acting in good faith and in reliance thereon shall be obliged to
ascertain the validity of such action under the terms of this Plan. The
Administrative Committee shall act by a majority of its members at the
time in office and such action may be taken either by a vote at a
meeting or in writing without a meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Administrator, or
any member of the Administrative Committee, may resign at any time by
delivering to the Employer a written notice of resignation, to take
effect at a date specified therein, which shall not be less than 30 days
after the delivery thereof, unless such notice shall be waived.
The Administrator may be removed with or without cause by the Employer
by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than 30 days after delivery
thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Administrator, shall promptly designate a successor
Administrator who must signify acceptance of this position in writing.
In the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new
Administrator has been appointed and has accepted such appointment.
12.7 INVESTMENT MANAGER. The Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest or dispose of all or any part of the Trust
assets. With regard to the assets entrusted to his care, the Investment
Manager shall provide written instructions and directions to the
Trustee, who shall in turn be entitled to rely upon such written
direction. This appointment and delegation shall be evidenced by a
signed written agreement.
12.8 DELEGATION OF DUTIES. The Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary
and non-Fiduciary duties, responsibilities and functions as the
Administrator shall deem advisable for the
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proper management and administration of the Plan in the best interests
of the Participants and their Beneficiaries.
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ARTICLE XIII.
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the
Employer acting in his behalf, shall notify the Administrator of a claim
of benefits under the Plan. Such request shall be in writing to the
Administrator and shall set forth the basis of such claim and shall
authorize the Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take such steps
as may be necessary to facilitate the payment of any benefits to which
the Participant or Beneficiary may be entitled under the terms of the
Plan.
A decision by the Administrator shall be made promptly and not later
than 90 days after the Administrator's receipt of the claim of benefits
under the Plan, unless special circumstances require an extension of the
time for processing, in which case a decision shall be rendered as soon
as possible, but not later than 180 days after the initial receipt of
the claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant,
must be provided, setting forth (1) the specific reasons for the denial;
(2) the specific reference to pertinent Plan provisions on which the
denial is based; (3) a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and (4) an
explanation of the Plan's claim review procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary may (1)
request a review by a Named Fiduciary, other than the Administrator,
upon written application to the Plan; (2) review pertinent Plan
documents; and (3) submit issues and comments in writing to a Named
Fiduciary. A Participant or Beneficiary shall have 60 days after receipt
by the claimant of written notification of a denial of a claim to
request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for
review, unless special circumstances require an extension of the time
for processing, in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall be in writing
and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based.
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A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions or
to seek such relief as may be necessary or appropriate to compel the
disclosure of any required information, to enforce or protect his
rights, to recover present benefits due to him, or to clarify his rights
to future benefits under the Plan.
13.5 REINSTATEMENT OF BENEFIT. In the event any portion of a distribution
which is payable to a Participant or a Beneficiary shall remain unpaid
on account of the inability of the Plan Administrator, after diligent
effort, to locate such Participant or Beneficiary, the amount so
distributable shall be treated as; a Forfeiture under the Plan. If a
claim is made by the Participant or Beneficiary for any benefit
forfeited under this section, such benefit shall be reinstated.
13.6 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or
any other rights or interest in the Plan or Trust fund other than those
specifically herein set forth.
13.7 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of his length of
Service with the Employer, shall be fully vested (100%) at all times in
any portion of his Participant's Account attributable to the following:
- Rollover Contributions
- Prior Employee Contributions.
13.8 MERGERS OR TRANSFERS. In the case of any merger or consolidation with or
transfer of assets or liabilities to any other qualified plan after
September 2, 1974, the following conditions must be met:
(A) The sum of the account balances in each plan shall equal the
fair market value (determined as of the date of the merger or
transfer as if the plans had then terminated) of the entire plan
assets.
(B) The assets of each plan shall be combined to form the assets of
the plan as merged (or transferred).
(C) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall have an account balance
equal to the sum of the account balances the Participant had in
the plans immediately prior to the merger (or transfer).
(D) Immediately after the merger (or transfer) each Participant in
the plan merged (or transferred) shall be entitled to the same
optional benefit forms as he was entitled to immediately prior
to the merger (or transfer).
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In the case of any merger or consolidation with or transfer of assets or
liabilities to any defined benefit plan after September 2, 1974, one of
the plans before such merger, consolidation, or transfer shall be
converted into the other type of plan and either the rules described
above, applicable to the merger of two defined contribution plans, or
the rules applicable to the merger of two defined benefit plans, as
appropriate, shall be applied.
13.9 PARTICIPANT'S ACCOUNT AND VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such account is
distributed in accordance with the terms of this Plan. At least once per
year, as of the last day of the Plan Year, each Participant's Account
shall be adjusted for any earnings, gains, losses, contributions,
withdrawals, loans, and expenses, attributable to such Plan Year, in
order to obtain a new valuation of the Participant's Account.
13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have the exclusive
authority to direct the investment of contributions made to his
Participant's Account. In accordance with the procedures established by
the Plan Administrator, the Participant shall elect to have a specified
percentage invested in one or more investment funds, as long as the
designated percentage for each fund is a whole number, and the sum of
the percentages allocated is equal to 100%. In addition, the Participant
may change such election once a month at any time. All investment
changes are subject to the rules of the investment fund(s) in which the
Participant's Account is or is to be invested.
13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate amounts
invested pursuant to the section above to be transferred between the
investment funds once every month at any time in accordance with the
procedures established by the Plan Administrator.
Notwithstanding the above, the transfer of amounts between investment
funds shall be subject to the rules of the investment funds in which the
Participant's Account is invested or is to be invested.
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ARTICLE XIV.
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF PLAN. The Employer shall have the right from time to time
to modify or amend, in whole or in part, any or all provisions of the
Plan, provided that a Board of Directors' resolution pursuant to such
modification or amendment shall first be adopted and provided further
that the modification or amendment is signed by the Employer and the
Administrator. Upon any such modification or amendment the Administrator
and the Trustee shall be furnished a copy thereof. No amendment shall
deprive any Participant or Beneficiary of any Vested Interest hereunder.
Any Participant having not less than three Years of Service shall be
permitted to elect, in writing, to have his Vesting Percentage computed
under the Plan without regard to such amendment.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan Amendment is adopted and end
no later than after the latest of the following dates:
(A) The date which is 60 days after the day the amendment is
adopted; or
(B) The date which is 60 days after the day the amendment becomes
effective; or
(C) The date which is 60 days after the day the Participant is
issued written notice of the amendment by the Employer or
Administrator.
Such written election by a Participant shall be made to the
Administrator.
No amendment to the Plan shall decrease a Participant's Account balance
or eliminate an optional form of distribution. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to
the extent permitted under Internal Revenue Code section 412(c)(8).
Furthermore, no amendment to the Plan shall have the effect of
decreasing a Participant's Vested Interest determined without regard to
such amendment as of the later of the date such amendment is adopted or
the date it becomes effective.
14.2 CONDITIONS OF AMENDMENT. The Employer shall not make any amendment which
would cause the Plan to lose its status as a qualified plan within the
meaning of section 401(a) of the Code.
14.3 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right to
terminate the Plan at any time by resolution of its Board of Directors.
Upon such termination, the liability of the Employer to make
contributions hereunder shall terminate.
14.4 FULL VESTING. Upon the termination or partial termination of the Plan,
or upon complete discontinuance of Employer contributions, the rights of
all affected Participants in and to the amounts credited to each such
Participant's Account shall be 100% vested and nonforfeitable.
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14.5 DISTRIBUTIONS UPON PLAN TERMINATION. If this Plan is terminated and the
Employer does not maintain or establish another defined contribution
plan, pursuant to Code section 401(k)(10)(A)(i), each Participant shall
receive a total distribution, in the form of a lump-sum distribution as
defined in Code section 401(k)(10)(B)(ii), of his Participant's Account
in accordance with the terms and conditions of Article VI.
However, if this Plan is terminated and the Employer does maintain or
establish another defined contribution plan as discussed in the above
paragraph, or if the Plan is only partially terminated, each Participant
shall receive a total distribution of his Participant's Account,
excluding any amounts attributable to Elective Deferral Contributions
and contributions made by the Employer designated as 401(k)
contributions in accordance with the terms and conditions of Article VI.
In such a situation, any amounts in a Participant's Account attributable
to Elective Deferral Contributions and contributions made by the
Employer designated as 401(k) contributions may be distributed only upon
the occurrence of an event described in Article VI.
No Participant and/or spousal consent will be required for a
distribution where no successor plan exists. However, if the Employer
does maintain a successor plan, Participant and/or spousal consent is
required for a distribution exceeding $3,500. The Participant's Account
will be transferred to such successor plan if the required consents are
not received.
14.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
Forfeitures which have riot been applied as of such termination to
reduce the contribution made by the Employer shall be credited on a pro
rata basis to the Participant's Account of the then Active Participants
in the same manner as the last contribution made by the Employer under
the Plan.
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is subject
to the condition precedent that the Employer's Plan shall be approved
and qualified by the Internal Revenue Service as meeting the
requirements of section 401(a) of the Internal Revenue Code and that
the Trust established in connection herewith shall be entitled to
exemption under the provisions of section 501(a). In the event the Plan
initially fails to qualify and the Internal Revenue Service issues a
final ruling that the Employer's Plan or Trust fails to so qualify as of
the Effective Date, all liability of the Employer to make further
contributions hereunder shall cease. The Plan Administrator, Trustee and
any other Named Fiduciary shall be notified immediately by the Employer,
in writing, of such failure to qualify. Upon such notification, the
value of the Participants' Accounts shall be distributed in cash to the
Employer, subject to the terms and conditions of Article VI.
That portion of such distribution which is attributable to Participant
Contributions as specified in Section 13.7, if any, shall be paid to the
Participant, and the balance of such distribution shall be paid to the
Employer.
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14.8 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no longer
qualified within the meaning of section 401(a) of the Internal Revenue
Code, or that the Trust is no longer entitled to exemption under the
provisions of section 501(a), and if the Employer shall fail within a
reasonable time to make any necessary changes in order that the Plan
and/or Trust shall so qualify, the Participants' Accounts shall be fully
vested and nonforfeitable and shall be disposed of as if the Plan had
terminated, in the manner set forth in this Article XIV.
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ARTICLE XV.
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 13.8 the
Employer may substitute an individually designed plan or a master or
prototype plan for this Plan without terminating this Plan as embodied
herein and this shall be deemed to constitute an amendment and
restatement in its entirety of this Plan as heretofore adopted by the
Employer; provided, however, that the Employer shall have certified to
the Trustee that this Plan is being continued on a restated basis which
meets the requirements of section 401(a) of the Internal Revenue Code
and ERISA.
15.2 TRANSFER OF ASSETS. Upon 90 days written notification from the Employer
that a different plan meeting the requirements set forth in Section 15.1
above has been executed and entered into by the Administrator and the
Employer, and after the Trustee has been furnished the Employer's
certification in writing that the Employer intends to continue the Plan
as a qualified Plan under section 401(a) of the Internal Revenue Code
and ERISA, assets which represent the value of all Participant's
Accounts maybe transferred in accordance with the instructions received
from or on behalf of the Employer. The Trustee may rely fully on the
representations or directions of the Employer with respect to any such
transfer and shall be fully protected and discharged with respect to any
such transfer made in accordance with such representations,
instructions, or directions.
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ARTICLE XVI.
MISCELLANEOUS
16.1 NON-REVERSION. This Plan has been established by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except as
otherwise provided in Sections 14.7, 16.7, and 16.8, under no
circumstances shall any funds contributed hereunder, at any time, revert
to or be used by the Employer, nor shall any such funds or assets of any
kind be used other than for the benefit of the Participants or their
Beneficiaries.
16.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except when
otherwise indicated by the context, either the masculine or the neuter
pronoun shall be deemed to include the masculine, the feminine, and the
neuter, and the singular shall be deemed to include the plural.
16.3 REFERENCE TO THE CODE AND ERISA. Any reference to any section of the
Internal Revenue Code, ERISA, or to any other statute or law shall be
deemed to include any successor law of similar import.
16.4 GOVERNING LAW. The Plan and Trust shall be governed and construed in
accordance with the laws of the state where the Trustee has its
principal office if the Trustee is a corporation or an association,
otherwise under the laws of the state where the Employer has its
principal office.
16.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply with
all requirements for qualification under the Internal Revenue Code and
ERISA, and if any provision hereof is subject to more than one
interpretation or any term used herein is subject to more than one
construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan being
so qualified. If any provision of the Plan is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provisions, and this Plan shall be construed and enforced as if
such provision had not been included.
16.6 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or
in part, either directly or by operation of law or otherwise, including,
but without limitation, execution, levy, garnishment, attachment,
pledge, bankruptcy or in any other manner, and no right or interest of
any Participant in the Plan shall be liable for or subject to any
obligation or liability of such Participant. The preceding sentence
shall not preclude the enforcement of a federal tax levy made pursuant
to section 6331 of the Code or the collection by the United States on a
judgement resulting from an unpaid tax assessment.
16.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer by
a mistake of fact, Section 16.1 shall not prohibit the return of such
contribution to the Employer within one year
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after the payment of the contribution, and (2) if a contribution is
conditioned upon the deductibility of the contribution under section 404
of the Code, then, to the extent the deduction is disallowed, Section
16.1 shall not prohibit the return to the Employer of such contribution
(to the extent disallowed) within one year after the disallowance of the
deduction. The amount which may be returned to the Employer is the
excess of (1) the amount contributed over (2) the amount that would have
been contributed had there not occurred a mistake of fact or a mistake
in determining the deduction. Earnings attributable to the excess
contribution may not be returned to the Employer, but losses
attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to the
mistaken contribution would cause the balance of the individual account
of any Participant to be reduced to less than the balance which would
have been in the account had the mistaken amount not been contributed,
then the amount to be returned to the Employer would have to be limited
so as to avoid such reduction.
16.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any other
provisions of this Plan, the Participant's Account may be segregated and
distributed pursuant to a Qualified Domestic Relations Order within the
meaning of Internal Revenue Code section 414(p). The Plan Administrator
shall establish procedures for determining if a Domestic Relations Order
is qualified within the meaning of section 414(p).
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ARTICLE XVI-A
TOP-HEAVY PROVISIONS
16A.1 DEFINITIONS. The following definitions are atypical terms used only in
this Article XVI-A.
(A) Compensation. The term Compensation, whenever used in this
Article XVI-A, means Compensation as defined in Article V of the
Plan, but includes the amount of any elective contributions made
by the Employer on the Employee's behalf to a cafeteria plan
established in accordance with the provisions of Code section
125, a qualified cash or deferred arrangement in accordance with
the provisions of Code section 402(e)(3), a simplified employee
pension plan in accordance with the provisions of Code section
402(h), or a tax sheltered annuity plan maintained in accordance
with the provisions of Code section 403(b).
(B) Key Employee. The term Key Employee means any Employee or former
Employee (including deceased Employees) of the Employer who at
any time during the Plan Year or the four preceding Plan Years
was:
(1) An officer of the Employer, but in no event if there are
more than 500 Employees, shall more than 50 Employees be
considered Key Employees. If there are less than 500
Employees, in no event shall the greater of three
Employees or 10% of all Employees, be, taken into
account under this Subsection as Key Employees. If the
number of officers is limited by the terms of the
preceding sentence, the Employees with the highest
Compensation will be considered to be officers.
In no event shall an officer whose annual Compensation
is less than 50% of the dollar limitation in effect
under Code section 415(b)(1)(A) as adjusted from time to
time, be a Key Employee for any such Plan Year.
In making a determination under this Subsection,
Employees who have not completed six months of Service
by the end of the applicable Plan Year, Employees who
normally work less than 17-1/2 hours per week, Employees
who normally work less than six months during a year,
Employees who have not attained 21, and nonresident
aliens who receive no earned income from U.S. sources,
shall be excluded.
Also excluded under the above paragraph are Employees
who are covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement.
Such Employees will be excluded only if retirement
benefits were the subject of good faith bargaining, 90%
of the Employees of the Employer are covered by the
agreement, and the Plan covers only Employees who are
not covered by the agreement.
86
<PAGE> 89
(2) One of the 10 Employees who has annual Compensation
greater than the amount in effect under Internal Revenue
Code section 415(c)(1)(A) and who owns (or is considered
to own within the meaning of Internal Revenue Code
section 318, as modified by section 416(i)(1)(B)(iii))
both more than 1/2% interest and the largest interest in
the Employer. If two or more Employees own equal
interests in the Employer, the ranking of ownership
share will be in descending order of such Employees'
Compensation. If the Employer is other than a
corporation, the term "interest" as used herein shall
refer to capital or profits interest.
(3) An Employee who owns (or is considered to own within the
meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 5% of
the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting
power of all stock of the Employer. If the Employer is
other than a corporation, an Employee who owns, or is
considered to own, more than 5% of the capital or
profits interest in the Employer. The determination of
5% ownership shall be made separately for each member of
a controlled group of corporations (as defined in Code
section 414(b)), or of a group of trades or businesses
(whether or not incorporated) that are under common
control (as defined in Code section 414(c)), or of an
affiliated service group (as defined in Code section,
414(m)).
(4) An Employee who owns (or is considered to own within the
meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 1% of
the outstanding stock of the Employer or stock
possessing more than 1% of the total combined voting
power of all stock of the Employer, and whose annual
Compensation is more than $150,000. If the Employer is
other than a corporation, an Employee who owns, or is
considered to own, more than 1% of the capital or
profits interest in the Employer, and whose annual
Compensation is more than $150,000.
For the purposes of paragraphs (2), (3) and (4) above, if an
Employee's ownership interest changes during a given Plan Year,
his ownership interest for that Plan Year is the largest
interest owned at any time during the Plan Year.
The Beneficiary of any deceased Employee who was a Key Employee
shall be considered a Key Employee for the same period as the
deceased Employee would have been so considered.
(C) Non-Key Employee. The term Non-Key Employee means any Employee
or former Employee of the Employer who is not a Key Employee.
The Beneficiary of any deceased Employee who is a Non-Key
Employee shall be considered a
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<PAGE> 90
Non-Key Employee for the same period as the deceased Employee
would have been so considered.
(D) Determination Date. The term Determination Date means, with
respect to a Plan Year, the last day of the preceding Plan Year,
or, in the case of the first Plan Year of a plan, the last day
of the first Plan Year.
(E) Valuation Date. The term Valuation Date means, with respect to a
Plan Year, the last day of the preceding Plan Year and is the
date on which Account Balances are valued for the purpose of
determining the Plan's Top-Heavy status.
(F) Account Balance. The term Account Balance means the value of the
Participant's Account standing to the credit of a Participant, a
former Participant, or the Beneficiary of a former Participant,
as the case may be, as of the Valuation Date. Such Account
Balance shall include any contributions due as of the
Determination Date and all distributions made to the Participant
(or former Participant or Beneficiary, as the case may be)
during the Plan Year or the preceding four Plan Years, except
for distributions of Related Rollovers. However, the Account
Balance shall not include any deductible Employee Contributions
made pursuant to Internal Revenue Code section 219 or Unrelated
Rollovers made to the Plan after December 31, 1983.
A Related Rollover is a Rollover Contribution or Transfer that
either was not initiated by the Employee or was made to a plan
maintained by the same Employer.
An Unrelated Rollover is a Rollover Contribution or Transfer
that was initiated by the Employee and was made from a plan
maintained by one employer to a plan maintained by another
employer.
For purposes of this Subsection (F), the term Employer shall
include all employers that are required to be aggregated in
accordance with Internal Revenue Code sections 414(b), (c) or
(m).
(G) Required Aggregation Group. The term Required Aggregation Group
means all of the plans of the Employer which cover a Key
Employee, including any such plan maintained by the Employer
pursuant to the terms of a collective bargaining agreement, and
each other plan of the Employer which enables any plan in which
a Key Employee participates to satisfy the requirements of
Internal Revenue Code sections 401(a)(4) or 410.
(H) Permissive Aggregation Group. The term Permissive Aggregation
Group means all of the plans of the Employer which are included
in the Required Aggregation Group plus any plans of the Employer
which provide comparable benefits to the benefits provided by
the plans in the Required Aggregation Group and are not included
in the Required Aggregation Group, but which satisfy the
requirements
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<PAGE> 91
of Internal Revenue Code sections 401(a)(4) and 410 when
considered together with the Required Aggregation Group,
including any plan maintained by the Employer pursuant to a
collective bargaining agreement which does not include a Key
Employee.
(I) Top-Heavy Plan. The Plan is Top-Heavy if it meets the
requirements of Section 16A.2.
(J) Super Top-Heavy Plan. The Plan is Super Top-Heavy if it meets
the requirements of Section 16A.3.
(K) Terminated Plan. A plan shall be considered to be a Terminated
Plan if it:
(1) has been formally terminated;
(2) has ceased crediting service for benefit accruals and
vesting; or
(3) has been or is distributing all plan assets to
Participants (or Beneficiaries) as soon as
administratively possible.
With the exception of the Minimum Employer Contribution
Requirements and the Minimum Vesting Requirements, the Top-Heavy
provisions of this Article XVI-A will apply to any Terminated
Plan which was maintained at any time during the five years
ending on the Determination Date.
(L) Frozen Plan. A plan shall be considered to be a Frozen Plan if
all benefit accruals have ceased but all assets have not been
distributed to Participants or Beneficiaries. The Top-Heavy
provisions of this Article XVI-A will apply to any such Frozen
Plan.
16A.2 TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Top-Heavy if,
as of the Determination Date, the aggregate of the Account Balances of
Key Employees exceeds 60% of the aggregate of the Account Balances of
all Employees covered by the Plan. The determination of whether the Plan
is Top-Heavy shall be made after aggregating all plans in the Required
Aggregation Group, and after aggregating any other plans which are in
the Permissive Aggregation Group, if such permissive aggregation thereby
eliminates the Top-Heavy status of any plan within such Required
Aggregation Group.
In determining whether this Plan is Top-Heavy, the Account Balance of a
former Key Employee who is now a Non-Key Employee will be disregarded.
Likewise, for Plan Years beginning after December 31, 1984, the Account
Balance of any Employee who has not performed an Hour of Service during
the five-year period ending on the Determination Date will be excluded.
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<PAGE> 92
16A.3 SUPER TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Super
Top-Heavy if, as of the Determination Date, the Plan would meet the test
specified in Section 16A.2 above, if 90% were substituted for 60% in
each place where it appears. The Plan may be permissively aggregated in
order to avoid being Super Top-Heavy.
16A.4 TOP-HEAVY REQUIREMENTS. Notwithstanding anything in the Plan to the
contrary, if the Plan is Top-Heavy with respect to any Plan Year
beginning after December 31, 1983, then the Plan shall meet the
following requirements for such Plan Year:
(A) Compensation Limit. The annual Compensation of each Participant
taken into account under the Plan shall not exceed $150,000;
however, such dollar limitation shall be adjusted to take into
account any adjustments made by the Secretary of the Treasury or
his delegate pursuant to Internal Revenue Code section
416(d)(2).
(B) Minimum Employer Contribution Requirements. A Minimum Employer
Contribution of 3% of each Eligible Employee's Compensation will
be made on behalf of each Eligible Employee in the Plan.
If the actual Employer Contribution made or required to be made
for Key Employees is less than 3%, the Minimum Employer
Contribution required hereunder shall not exceed the percentage
contribution made for the Key Employee for whom the percentage
of Employer Contributions and Forfeitures relative to the first
$150,000 of Compensation is the highest for the Plan Year after
taking into account contributions or benefits under other
qualified plans in the Plan's Required Aggregation Group.
However, if a Participant in this Plan is also a participant in
a defined benefit plan maintained by the Employer, such
Participant shall receive the Top-Heavy minimum benefit under
the defined benefit plan in lieu of the Minimum Employer
Contribution described herein. Such minimum benefit will be
equal to the Participant's average yearly Compensation during
his five highest-paid consecutive years, multiplied by the
lesser of 2% per Year of Service or 20%. Compensation periods
and Years of Service to be taken into account in the calculation
of this benefit shall be subject to any limitations set forth in
the defined benefit plan.
For any Limitation Year in which this Plan is Top-Heavy but not
Super Top-Heavy, the Minimum Employer Contribution shall be
increased to 4% of each Eligible Employee's Compensation in
order to preserve the use of the factor 1.25 in the denominators
of the fractions described in Section 5.4 (B) (1) and Section
5.4 (D) (1). A Participant who receives the Top-Heavy minimum
benefit in lieu of the Minimum Employer Contribution shall
receive an increased minimum benefit equal to the Participant's
average yearly Compensation during his five highest-paid
consecutive years, multiplied by the lesser of 3% per Year of
Service or 20% plus one percentage point (to a maximum of 10
percentage points) for each year that this Plan is maintained.
Compensation periods and Years of
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<PAGE> 93
Service to be taken into account in the calculation of this
increased minimum benefit shall be subject to any limitations
set forth in the defined benefit plan.
For any Limitation Year in which this Plan is Super Top-Heavy,
the factor of 1.25 in the denominators of the fractions
described in Sections 5.4 (B) (1) and 5.4 (D) (1) shall be
reduced to 1.0. The Minimum Employer Contribution payable in
such years shall be 3% of each Eligible Employee's Compensation
and the defined benefit Top-Heavy minimum benefit shall be
average Compensation multiplied by the lesser of 2% per Year of
Service or 20%.
Eligible Employees are all Non-Key Employees who are
Participants in the Plan as of the last day of the Plan Year
regardless of whether they had completed 1,000 Hours of Service
during the Plan Year. Also included are Non-Key Employees who
would have been Participants as of the last day of the Plan Year
except:
- The Employee's Compensation was below a required minimum
level or
- The Employee chose not to make Elective Deferral
Contributions when he was eligible to do so.
Elective Deferral Contributions and Matching Contributions made
to Key Employees shall be taken into account as Employer
Contributions allocated to such Key Employees when determining
whether a lower Minimum Employer Contribution is permissible for
purposes of this section. However, Elective Deferral
Contributions made by Non-Key Employees shall not be used
towards satisfying the Minimum Employer Contribution required to
be allocated to Non-Key Employees pursuant to this section.
Matching Contributions made on behalf of Non-Key Employees may,
at the option of the Employer, be used to satisfy the Minimum
Employer Contribution requirement. However, for Plan Years
beginning after December 31, 1988, to the extent that Matching
Contributions are used for this purpose, they shall not be used
to satisfy the Actual Contribution Percentage Test.
(C) Minimum Vesting Requirements. Vesting shall be determined in
accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 1 0%
1 but less than 2 10%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
</TABLE>
91
<PAGE> 94
<TABLE>
<S> <C>
5 but less than 6 80%
6 or more 100%
</TABLE>
92
<PAGE> 95
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN
FOR NON-UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to as the
"Employer") established the Dominick's Finer Foods, Inc. 401 (k) Retirement Plan
for Non-Union Employees (hereinafter referred to as the "Plan") effective March
25, 1957 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof; and
WHEREAS, the Employer desires to amend the Plan to provide for its funding
through a Group Annuity Contract issued by Connecticut General Life Insurance
Company and to transfer all Plan assets; and
WHEREAS, the Employer now desires to amend the Plan and restate its provisions
to comply with the requirements of the Tax Reform Act of 1986 (TRA `86), the
Omnibus Budget Reconciliation Act of 1986 (OBRA `86), and the Unemployment
Compensation Amendment of 1992 (UCA `92) if applicable;
NOW THEREFORE, the Plan is hereby amended and restated in its entirety effective
January 1, 1993 except as follows:
1. Effective for calendar years beginning on January 1, 1987, the
provisions regarding limits on Elective Deferral Contributions shall be
amended and governed by the terms of Article IV of the Plan attached
hereto.
2. Effective on the first day of the Plan Year beginning in 1987, the
provisions relating to the special nondiscrimination test for Elective
Deferral Contributions under Code section 401(k), as defined in Article
I, shall be amended and governed by the terms of the Plan attached
hereto.
3. Effective on the first day of the Plan Year beginning in 1987, the
provisions relating to the special nondiscrimination test for Matching
Contributions and Employee Contributions under Code section 401 (m), as
defined in Article I, shall be amended and governed by the terms of the
Plan attached hereto.
4. Effective on the first day of the Plan Year beginning in 1987, the
provisions defining Highly Compensated Employee shall be amended and
governed by the terms of Article I of the Plan attached hereto.
5. Effective on the first day of the Plan Year beginning in 1987, the
provisions regarding loans shall be amended and governed by the terms of
Article X-A of the Plan attached hereto. However, prior to October 18,
1989, if a Participant's Vested Interest in his Participant's Account
was less than $20,000, the Participant was able to borrow up to the
93
<PAGE> 96
lesser of $10,000 or his Vested Interest attributable to contributions
which were available for loans.
6. Effective on the first day of the Plan Year beginning in 1987, the
provisions regarding Limitations on Allocations shall be amended and
governed by the terms of Article V of the Plan attached hereto.
7. Effective on the first day of the Plan Year beginning in 1987,
contributions made to this Plan shall no longer require Considered Net
Profits.
8. Effective on the first day of the Plan Year beginning in 1989,
Compensation for purposes of the Plan shall be limited to a maximum of
$200,000.
9. Effective on January 1, 1989, the provisions relating to required
minimum distributions shall be amended and governed by the terms of the
Plan attached hereto.
10. Effective on the first day of the Plan Year beginning in 1989, the
provisions relating to withdrawals for Serious Financial Hardship shall
be amended and governed by the terms of Article X of the Plan attached
hereto.
11. Effective on the first day of the Plan Year beginning in 1992, gap
period earnings associated with Excess Contributions shall not be
distributed.
12. Effective on the first day of the Plan Year beginning in 1992, gap
period earnings associated with Excess Aggregate Contributions shall not
be distributed.
13. Effective on the first day of the 1992 Plan Year, the provisions
relating to the determination of a financial need for a Serious
Financial Hardship shall be liberalized in accordance with the rules set
forth in the final 401(k) regulations.
14. Effective on the first day of the 1992 Plan Year, the provisions
relating to the correction of excess Annual Additions shall be amended
and governed by the terms of Article V of the Plan attached hereto.
15. Effective January 1, 1993, the provisions relating to Direct Rollovers
shall be added to the Plan as governed by the terms of Article VI-A of
the Plan attached hereto.
16. Effective for Plan Years beginning in 1994, Compensation shall be
limited to a maximum of $150,000.
17. The terms of the Plan as heretofore set forth shall no longer apply with
respect to Participants under the Plan who have not terminated
employment (including terminations on account of Retirement, death or
Disability); and the terms of the Plan with respect to such Participants
shall henceforth be as set forth in the Dominick's Finer Foods, Inc.
401(k) Retirement Plan for Non-Union Employees, a copy of which is
attached to and forms a part of this amendment.
94
<PAGE> 97
18. The Plan and Trust as amended and restated, shall represent a
continuation of the prior Plan and Trust as heretofore set forth and
shall not abridge or curtail any rights accorded to Participants under
said prior instrument.
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have
hereunto affixed their signatures.
Executed at on June 24 , 1994
- ----------------------------------- ----------------------------------------
DOMINICK'S FINER FOODS, INC.
By: /s/ Charles L. B.
- ----------------------------------- -------------------------------------
Witness Title: S.V.P. Human Resources
----------------------------------
Accepted this 24th day of June, 1994.
By: /s/ Chris Wendt.
- ----------------------------------- -------------------------------------
Witness Administrator
Accepted this 21st day of July, 1994.
/s/ Maria E. Malave By: /s/ J. G. S.
- ----------------------------------- -------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
95
<PAGE> 98
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR
NON-UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to as the
"Employer") established the Dominick's Finer Foods, Inc. 401(k) Retirement Plan
for Non-Union Employees (hereinafter referred to as the "Plan") effective March
25, 1957 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in section 14.1
thereof, and
WHEREAS, the Employer now desires to amend the Plan to reflect that investment
changes and transfers may be made at any time; and
NOW THEREFORE, the Plan is hereby amended effective June 30, 1995 as follows:
1. Section 13.10 is deleted in its entirety and replaced with the
following:
"13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have the
exclusive authority to direct the investment of contributions
made to his Participant's Account. In accordance with the
procedures established by the Plan Administrator, the
Participant shall elect to have a specified percentage invested
in one or more investment funds, as long as the designated
percentage for each fund is a whole number, and the sum of the
percentages allocated is equal to 100%. In addition,, the
Participant may change such election at any time. All investment
changes are subject to the rules of the investment fund(s) in
which the Participant's Account is or is to be invested."
2. Section 13.11 is deleted in its entirety and replaced with the
following:
"13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate
amounts invested pursuant to the section above to be transferred
between the investment funds at any time in accordance with the
procedures established by the Plan Administrator.
Notwithstanding the above, the transfer of amounts between
investment funds shall be subject to the rules of the investment
funds in which the Participant's Account is invested or is to be
invested."
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have
hereunto affixed their signatures.
Executed at Dominick's Finer Foods on November 15, 1995
DOMINICK'S FINER FOODS, INC.
96
<PAGE> 99
/s/ A. S. By /s/ Robert G. M.
- ----------------------------------- -------------------------------------
Title President and C.O.O.
----------------------------------
Accepted this 15th day of November 15, 1995.
/s/ A. S. By /s/ L. Canter
- ----------------------------------- -------------------------------------
Witness Administrator
Accepted this ______ day of ____________, ______.
By
- ----------------------------------- -------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
97
<PAGE> 100
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR
NON-UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to as the
"Employer") established the Dominick's Finer Foods, Inc. 401(k) Retirement Plan
for Non-Union Employees (hereinafter referred to as the "Plan") effective March
25, 1957 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in section 14.1
thereof; and
WHEREAS, the Employer now desires to amend the Plan to reflect that Participants
may have two outstanding loans at a time; and
NOW THEREFORE, the Plan is hereby amended effective October 1, 1995 as follows:
Section 10A.1 is deleted in its entirety and replaced with the following:
"10A.1 LOANS TO PARTICIPANTS. The Plan Administrator may make a bona
fide loan to a Participant, in an amount which, when added to
the outstanding balance of all other loans to the Participant
from all qualified plans of the Employer, does not exceed the
lesser of $50,000 reduced by the excess of the Participant's
highest outstanding loan balance during the 12 months preceding
the date on which the loan is made over the outstanding loan
balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account.
Participants will be limited to only two outstanding loan at a
time.
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate,
provided, however, that all loans granted hereunder:
(A) are available to all Participants and Beneficiaries, who are
parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis;
(B) are not made available to Highly Compensated Employees on a
basis greater than the basis made available to other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) unless a Participant meets the requirements set forth in
Sections 8.1 (A), (B) and (C), are made only after a Participant
obtains the consent of his Spouse, if any, to use his
Participant's Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be so
secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a plan
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<PAGE> 101
representative or notary public. Such consent shall thereafter
be binding with respect to the consenting Spouse or any
subsequent Spouse with respect to that loan. A new consent shall
be required if the Participant's Account is used for
renegotiation, extension, renewal or other revision of the loan.
(F) are made in accordance with and subject to all of the provisions
of this Article."
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have
hereunto affixed their signatures.
Executed at Dominick's Finer Foods on November 15, 1995.
DOMINICK'S FINER FOODS, INC.
/s/ A. S. By /s/ Robert A. M.
- ----------------------------------- -------------------------------------
Witness
Title President and C.O.O.
-----------------------------------
Accepted this 15th day of November, 1995.
/s/ A. S. By /s/ L. Canter
- ----------------------------------- -------------------------------------
Witness Administrator
Accepted this ______ day of ___________________, ________
By
- ----------------------------------- -------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
99
<PAGE> 102
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR
NON-UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to as the
"Employer") established the Dominick's Finer Foods, Inc. 401(k) Retirement Plan
for Non-Union Employees (hereinafter referred to as the "Plan") effective March
25, 1957 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in Section 14.1
thereof, and
WHEREAS, the Employer now desires to amend the Plan to permit deferral elections
to be revocable, to permit age 59-1/2 withdrawals, to permit terminated
Participants to make withdrawals and to revise the definition of Compensation
for purposes of Article 16A;
NOW THEREFORE, the Plan is hereby amended effective January 1, 1996 as follows:
1. Section 16A. 1 (A) is deleted in its entirety and replaced with the
following:
"(A) Compensation. For purpose of Section 16A.4, the term
Compensation means Compensation as defined in Article V of the
Plan. However, for purposes of Section 16A. 1 (B), the term
Compensation means Compensation as defined in Article V, but
includes the amount of any elective contributions made by the
Employer on the Employee's behalf to a cafeteria plan
established in accordance with the provisions of Code section
125, a qualified cash or deferred arrangement in accordance with
the provisions of code section 402(e)(3), a simplified employee
pension plan in accordance with the provisions of Code section
402(h)(1)(B), or a tax-sheltered annuity plan maintained in
accordance with the provisions of Code section 403(b)."
2. Section 10.8 is added to the Plan as follows:
"WITHDRAWAL AFTER AGE 59-1/2. A Participant who has attained age 59-1/2,
may elect to withdraw from his Participant's Account, at any time, an
amount which is equal to any whole percentage (not exceeding 100%) of
his Vested Interest in his Participant's Account attributable to:
- Elective Deferral Contributions, including earnings
- Matching Contributions, including earnings
- Prior Employer Contributions, including earnings
- Rollover Contributions, including earnings
- Prior Employee Contributions, including earnings."
100
<PAGE> 103
NOW THEREFORE, the Plan is hereby amended effective June 1, 1996 as follows:
1. Section 6.1 is deleted in its entirety and replace with the following:
"DISTRIBUTION IN GENERAL. Each Participant may elect, with his Spouse's
consent if required, a distribution in the form of an Annuity, a single
sum cash payment, or a combination of the above. A Participant who is no
longer an Employee of the Employer, may elect a distribution from his
Participant's Account, at any time, an amount which is equal to any
whole percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account. All distributions are subject to the provisions
of Article VIII, Joint and Survivor Annuity Requirements."
2. The second paragraph of Section 6.2 is deleted in its entirety and
replaced with the following:
"Instead of consenting to a distribution, the Participant may make a
written election to defer the distribution for a specified period of
time ending no later than the Participant's attainment of age 62. A
Participant whose actual retirement date is on or after his Normal
Retirement Date may make a written election to defer the distribution
for a specified period of time subject to the requirements of Section
6.4. All such elections to defer shall be revocable."
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have
hereunto affixed their signatures.
Executed at on
------------------------ -------------------------------------
DOMINICK'S FINER FOODS, INC.
/s/ S.M.B. By /s/ Robert C. M.
- ----------------------------------- --------------------------------------
Witness
Title President and C.E.O.
-----------------------------------
Accepted this 7th day of October, 1996.
/s/ Margeret S. By /s/ L.M.
- ----------------------------------- --------------------------------------
Witness Administrator
Accepted this 21st day of October, 1996.
/s/ S. A. Coelho By /s/ Robert S.
- ----------------------------------- --------------------------------------
Witness Trustee
101
<PAGE> 104
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
102
<PAGE> 105
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR
NON-UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to as the
"Employer") established the Dominick's Finer Foods, Inc. 401(k) Retirement Plan
for Non-Union Employees (hereinafter referred to as the "Plan") effective March
25, 1957 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan in Section 14.1
thereof; and
WHEREAS, the Employer now desires to amend the Plan to reflect changes in the
Plan's entry dates and eligibility requirements;
NOW THEREFORE, the Plan is hereby amended effective July 1, 1997 as follows:
1. Section 1.27 is deleted in its entirety and replaced with the following:
"ENTRY DATE. The term Entry Date means either the Effective Date or the
first scheduled payroll period thereafter when an Employee who has
fulfilled the eligibility requirements commences participation in the
Plan.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date
shall be the applicable Entry Date as specified above when the Employee
actually enrolls as a Participant."
2. Section 3.1 is deleted in its entirety and replaced with the following:
"ELIGIBILITY. Each Employee who was a Participant prior to the Effective
Date and who is in the Service of the Employer on the Effective Date
shall continue as a Participant in the Plan. Each other Employee,
excluding a Leased Employee, shall be eligible to become a Participant
as of the Effective Date or the Entry Date when he first meets the
following requirement(s):
- Age 18
- Six months of employment
- Not in a unit of Employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement
between Employee representative and the Employer, if there is
evidence that retirement benefits were the subject of good
103
<PAGE> 106
faith bargaining between such Employee representatives and the Employer,
unless the collective bargaining agreement provides for coverage under
this Plan.
- Not a non-resident alien with no U.S.-source income
- Not an Independent Contractor"
IN WITNESS WHEREOF, the Employer and the Administrator have hereunto
affixed their signatures.
Executed at on
------------------------ --------------------------------------
DOMINICK'S FINER FOODS, INC.
/s/ Margaret S. By /s/ Robert G. M.
- ----------------------------------- --------------------------------------
Witness
Title
-----------------------------------
Accepted this 21st day of July, 1997.
/s/ Margaret S. By /s/ L.M.
- ----------------------------------- --------------------------------------
Witness Administrator
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
104
<PAGE> 107
AMENDMENT TO
DOMINICK'S FINER FOODS, INC. 401(K) RETIREMENT PLAN FOR
NON-UNION EMPLOYEES
WHEREAS, Dominick's Finer Foods, Inc. (hereinafter referred to as the
"Employer") established the Dominick's Finer Foods, Inc. 40l(k) Retirement Plan
for Non-Union Employees (hereinafter referred to as the "Plan") effective March
25, 1957 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof:, and
WHEREAS, the Employer now desires to amend the Plan under the Small Business Job
Protection Act of 1996 ("SBJPA") as it relates to all employees who are not 5%
owners and reach age 70-1/2 in a calendar year beginning after December 31, 1998
under Section 6.4 of the Plan; and
NOW THEREFORE, the Plan is hereby amended effective December 31, 1998 as
follows:
Section 6.4 of the Plan entitled "COMMENCEMENT OF DISTRIBUTIONS" is hereby
amended by deleting the last sentence of the second paragraph and the entire
third and fourth paragraphs thereof, and adding in their place the following:
"The first required beginning date of a Participant is the first day of
April of the calendar year following the later of (i) the calendar year
in which the Participant attains age 70 1/2, or (ii) the calendar year
in which the Participant retires. Notwithstanding the foregoing, for a
Participant who is a five (50/6) owner of the Employer (as determined
under Code Section 416(i)) at any time during the Plan Year, payment of
the Participant's benefit must begin not later than April 1 of the
calendar year following the calendar year in which the Participant
attains age 70 1/2."
IN WITNESS WHEREOF, the Employer and the Administrator have hereunto affixed
their signatures.
Executed at 505 Railroad Ave. on 12-23-98
------------------------ --------------------------------------
DOMINICK'S FINER FOODS, INC.
/s/ Margaret S. By /s/ D. C. Howard
- ----------------------------------- --------------------------------------
Witness
Title Director Human Resources
-----------------------------------
Accepted this ______ day of ___________________, ________
By
- ----------------------------------- --------------------------------------
Witness Administrator
105
<PAGE> 108
Accepted this ______ day of ___________________, ________
By
- ----------------------------------- --------------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
106
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Safeway Inc. on Form S-8 of our report dated March 5, 1999, incorporated by
reference in the Annual Report on Form 10-K of Safeway Inc. for the year ended
January 2, 1999.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
November 29, 1999