EXHIBIT NO. 10.5
SCOTT'S LIQUID GOLD-INC.
EMPLOYEE STOCK OWNERSHIP PLAN
AND
TRUST AGREEMENT
AS AMENDED THROUGH JUNE 20, 2000
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 Account 1
1.2 Anniversary Date 1
1.3 Beneficiary 1
1.4 Break in Service 1
1.5 Code 1
1.6 Committee 1
1.7 Compensation 1
1.8 Defined Benefit Plan 2
1.9 Defined Contribution Plan 2
1.10 Disability 3
1.11 Effective Date 3
1.12 Employee 3
1.13 Employer 3
1.14 Employment Commencement Date 3
1.15 ERISA 3
1.16 Highly Compensated Employee 3
1.17 Hours of Service 5
1.18 Key Employee 6
1.19 Limitation Year 6
1.20 Non-Key Employee 6
1.21 Normal Retirement Date 6
1.22 Participant 7
1.23 Participating Employer 7
1.24 Plan 7
1.25 Plan Entry Date 7
1.26 Plan Sponsor 7
1.27 Plan Year 7
1.28 Reemployment Commencement Date 7
1.29 Related Group 7
1.30 Required Aggregation Group 7
1.31 Service 7
1.32 Stock 7
1.33 Top Heavy Plan 7
1.34 Trust 8
1.35 Trustee 8
1.36 Trust Fund 8
1.37 Valuation Date 9
1.38 Year of Service - Participation 9
1.39 Year of Service - Vesting 9
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility 10
2.2 Years of Service - Participation 10
2.3 Participation Upon Reemployment 10
2.4 Change in Employee Status 10
ARTICLE 3
CONTRIBUTIONS
3.1 Amount of Contribution 12
3.2 Carry Over Contributions 12
3.3 Minimum Employer Contribution 12
3.4 Return of Employer Contributions 13
3.5 Participant Contributions 13
ARTICLE 4
ALLOCATIONS TO ACCOUNTS
4.1 Participant's Account 14
4.2 Allocation of Contributions and Forfeitures 14
4.3 Allocation of Minimum Contribution 14
4.4 Limitations on Allocations to Participants' Accounts 14
4.5 Code 415 Definitions 16
4.6 Allocation of Earnings, Losses and
Changes in Fair Market Value
of the Net Assets of the Trust Fund 19
4.7 Accounting 19
4.8 Methods of Valuation 19
4.9 Stock Dividends, Splits, Rights, Warrants, Options and Other
Reorganizations 20
ARTICLE 5
VESTING OF PARTICIPANT'S ACCOUNT
5.1 Vesting 21
5.2 Vesting Schedule 21
5.3 Full Vesting Upon Termination or Partial
Termination of Plan or
Upon Complete Discontinuance of Contributions 21
5.4 Service Included in Determination of Vested Accounts 22
5.5 Break in Service - Vesting 22
5.6 Forfeiture Occurs 22
5.7 Amendment to Vesting Schedule 22
5.8 Special Accounting After Distribution to
Reemployed Participants 23
ARTICLE 6
DISTRIBUTIONS
6.1 Distributions Not Exceeding $3,500 24
6.2 Distributions Exceeding $3,500 24
6.3 Distributions on Account of Attaining
Age 70 and one/half 25
6.4 Distributions Under Domestic Relations Order 26
6.5 Diversification Distributions 27
6.6 Distribution Methods, Consents and Election 28
6.7 Annuity Distributions to Participants
and Surviving Spouses 29
6.8 Destination of Beneficiary 29
6.9 Direct Rollover/Transfer Provisions 30
ARTICLE 7
EMPLOYER STOCK
7.1 Registration of Distributed Shares of Employer Stock 32
7.2 Put Option 32
7.3 Right of First Refusal 33
7.4 Sale of Stock 33
7.5 Notice 33
7.6 Legend 33
ARTICLE 8
ADMINISTRATION
8.1 Appointments of Committee 34
8.2 Organization and Operation of Committee 34
8.3 Information to be Made Available to Committee 34
8.4 Resignation and Removal of Committee Member;
Appointment of Successors 35
8.5 Duties and Powers of Committee 35
8.6 Advice to Designated Fiduciaries 38
8.7 Majority Control 38
ARTICLE 9
POWERS AND DUTIES OF THE TRUSTEE
9.1 Establishment and Acceptance of Trust 39
9.2 Investments of Trust Funds 39
9.3 Powers of Trustee 39
9.4 Diversification and Prudence Requirements 41
9.5 Payment of Compensation, Expenses and Taxes 41
9.6 Appointment, Resignation, Removal and
Substitution of Trustee 41
9.7 Appointment of Trustee--Acceptance In Writing 42
9.8 Receipt of Contributions 42
9.9 Returns and Reports 42
ARTICLE 10
CONTINUANCE, TERMINATION AND
AMENDMENT OF PLAN AND TRUST
10.1 Termination of Plan 43
10.2 Termination of Trust 43
10.3 Continuance of Plan and Trust by Successor Business 43
10.4 Merger, Consolidation or Transfer of Assets or
Liabilities of the Plan 43
10.5 Distribution of Trust Fund on Termination of Trust 44
10.6 Suspension of Contributions 44
10.7 Amendments to Plan and Trust 44
ARTICLE 11
RELATED GROUP
11.1 Adoption of the Plan 45
11.2 Withdrawal From Plan 45
11.3 Termination of Participation by the Plan Sponsor 45
ARTICLE 12
MISCELLANEOUS
12.1 Participant's Rights 47
12.2 Employer's Obligations 47
12.3 Benefits to be Provided Solely from the Trust Fund 47
12.4 Receipt of Benefits by Fiduciaries 47
12.5 Service by Fiduciaries and Disqualified Persons 47
12.6 Assignment or Alienation 47
12.7 Delegation of Authority by Employer 48
12.8 Notices from Participants to be Filed with Committee 48
12.9 Construction of Agreement 48
12.10Titles 48
12.11Severability 48
12.12Counterparts 48
12.13Plan for Exclusive Benefit of Participants;
Reversion Prohibited 48
12.14Gender, Singular and Plural 49
SCOTT'S LIQUID GOLD-INC.
EMPLOYEE STOCK OWNERSHIP PLAN
AND TRUST AGREEMENT
This Plan is designed to qualify as a stock bonus plan for the primary
purpose of enabling Employees to obtain a proprietary interest in the Employer
by the acquisition of Stock. The Plan is designed to invest primarily in Stock.
The Plan and Trust are created for the exclusive benefit of Participants and
Beneficiaries. The Plan is intended to conform to and qualify under Code 401
and 501.
The Employer adopts this Plan as a restated Plan in substitution for, and
in amendment of, the existing Plan. The provisions of this Plan, as a restated
Plan, shall apply solely to an Employee who performs one Hour of Service for the
Employer on or after the restated Effective Date of the Employer's Plan. If an
earlier effective date for a provision in this restated Plan applies, the
provision shall be effective as of the earlier effective date notwithstanding
the later general Effective Date of the restated Plan.
1
ARTICLE 1
DEFINITIONS
1.1 Account shall mean the separate account or one of the separate accounts
which the Trustee shall maintain for a Participant under the Plan.
1.2 Anniversary Date shall mean the last day of each Plan Year.
1.3 Beneficiary shall mean a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan shall remain a Beneficiary under the Plan until the
Trustee has fully distributed the Participant's benefit to such Beneficiary.
1.4 Break in Service shall have the meaning assigned to it by Section 5.5.
1.5 Code means the Internal Revenue Code of 1986, as amended.
1.6 Committee shall mean the committee appointed pursuant to Article 8.
1.7 Compensation shall mean, for Plan Years beginning on or after January 1,
1994, the Employee's earned income and wages within the meaning of Code
3401(a) and all other payments of remuneration to the Employee by the Employer
(in the course of the Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement under Code 6041(d),
6051(a)(3) and 6052, determined without regard to any rules under Code 3401(a)
that limit the remuneration included in wages based on the nature or location
of the employment or the services performed. Compensation shall include
Employer contributions which are not includable in the gross income of the
Employee under Code 125, 402(a)(8), 402(h), or 403(b) for purposes of Code
401(m), 401(k), 401(a)(4), and 401(l). For purposes of the Key Employee
determination and the Highly Compensated Employee detemination, the Plan
Administrator shall apply the Compensation definition by including Employer
contributions which are not includable in the gross income of the Employee
under Code 125, 402(a)(8), 402(h), or 403(b) and by disregarding the Code
401(a)(17) limitation. For purposes of the Code 415 limitations, the Plan
Administrator shall apply the Compensation definition by including Employer
contributions which are not includable in the gross income of the Employee
under Code 125, 402(a)(8), 402(h), or 403(b).
For Plan Years beginning before January 1, 1994, Compensation shall mean
the total amount of remuneration paid by the Employer to a Participant during a
Plan Year that would be subject to tax under Code 3101(a), without reference
to the limitations imposed by Code 3121(a)(1). However, such term shall
exclude director's fees, travel allowances, expense allowances, office
allowances, relinquished vacation pay, unused sick pay, insurance premiums,
pension and retirement benefits, other allowances, and all contributions by the
Employer to this Plan, to any other tax qualified plan or to any health,
accident, or welfare fund or plan, or similar benefits. For purposes of a
contribution or an allocation under the Plan based on Compensation, Compensation
shall only include amounts actually paid to an Employee during the period he or
she is a Participant in the Plan.
Compensation shall not include amounts in excess of $200,000 (or such
larger amount as the Commissioner of Internal Revenue may prescribe) and
effective for Plan Years beginning after December 31, 1993, Compensation shall
not exceed the $150,000 limitation. The $150,000 limitation is the $150,000
limitation under Code 401 (a)(17), as adjusted by the Commissioner for
increases in the cost of living in accordance with Code 401(a)(17). If a
determination period consists of fewer than 12 months, the $150,000 limitation
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. In determining
the Compensation of a Participant for purposes of the $200,000 limitation or the
$150,000 limitation, the Committee shall increase a Participant's Compensation
by the Compensation of the Participant's spouse and any lineal descendants of
the Participant who have not attained age 19 before the close of the Plan Year
if the Participant is a more than 5% owner of the Employer or a Highly
Compensated Employee in the group of the top 10 Employees ranked by
Compensation. If the application of the immediately preceding sentence causes
the $200,000 limitation or the $150,000 limitation to be exceeded, then the
$200,000 limitation or the $150,000 limitation shall be prorated among the
family members in proportion to each family member's Compensation as determined
under this Section prior to the application of the $200,000 limitation or the
$150,000 limitation.
1.8 Defined Benefit Plan shall have the meaning assigned to it by Section 4.5.
1.9 Defined Contribution Plan shall have the meaning assigned to it by Section
4.5.
1.10 Disability shall mean a disability which permanently renders a Participant
unable to perform satisfactorily the usual duties of his or her employment with
the Employer, as determined by a physician selected by the Committee, and which
results in his or her termination of employment with the Employer.
1.11 Effective Date of the Plan shall mean January 1, 1989. The Employer is
adopting this Plan in substitution for and as an amendment of an existing plan,
the original plan being adopted on October 3, 1978.
1.12 Employee shall mean any individual employed by the Employer; however,
Employee shall not include leased employees within the meaning of Code
414(n)(2), individuals classified by the Employer as independent contractors,
and self-employed persons.
1.13 Employer shall mean Scott's Liquid Gold-Inc. and any member of the Related
Group which adopts the Plan and Trust with the consent of Scott's Liquid
Gold-Inc.
1.14 Employment Commencement Date shall mean the date on which an employee first
performs an Hour of Service for the Employer.
1.15 ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.
1.16 Highly Compensated Employee shall mean any Employee who performs service
for the Employer during the Plan Year who:
(1) owned more than 5% of the Employer;
(2) received Compensation from the Employer in excess of $75,000 (as adjusted
pursuant to Code 414(q)(1)) and is one of the 100 Employees who received the
most Compensation from the Employer during the Plan Year;
(3) received Compensation from the Employer in excess of $50,000 (as adjusted
pursuant to Code 414(q)(1)), was a member of the top-paid group for the Plan
Year, and is one of the 100 Employees who received the most Compensation from
the Employer during the Plan Year; or
(4) was an officer of the Employer, received Compensation from the Employer
that was greater than 50% of the dollar limitation in effect under Code
415(b)(1)(A), and is one of the 100 Employees who received the most
Compensation from the Employer during the Plan Year.
Highly Compensated Employee also shall mean any Employee who performs
Service for the Employer during the preceding Plan Year (or 12-month period
preceding the Plan Year) who:
(1) owned more than 5% of the Employer;
(2) received Compensation from the Employer in excess of $75,000 (as adjusted
pursuant to Code 414(q)(1));
(3) received Compensation from the Employer in excess of $50,000 (as adjusted
pursuant to Code 414(q)(1)) and was a member of the top-paid group for such
Plan Year; or
(4) was an officer of the Employer and received Compensation from the Employer
that was greater than 50% of the dollar limitation in effect under Code
415(b)(1)(A).
An Employee is a member of the top-paid group for any Plan Year if the
Employee is in the group consisting of the top 20% of the Employees when ranked
on the basis of Compensation paid during the Plan Year.
If no officer received Compensation from the Employer that was greater than
50% of the dollar limitation in effect under Code 415(b)(1)(A) for the Plan
Year or the preceding 12-month period, the Committee shall treat the highest
paid officer as a Highly Compensated Employee. The number of officers taken into
account shall not exceed the greater of three or 10% of the total number of
Employees (after application of the Code 414(q) exclusions), but no more than
50 officers.
Highly Compensated Employee shall also mean a highly compensated former
Employee. A highly compensated former Employee includes any Employee who
separated or was deemed to have separated from Service prior to the Plan Year,
performs no Service for the Employer during the Plan Year, and was a Highly
Compensated Employee for either the Plan Year in which he or she separated from
Service or any Plan Year ending on or after the Employee's 55th birthday.
If the spouse, lineal ascendant, lineal descendant, or the spouse of a
lineal ascendant or descendent of a more than 5% owner (who is either an
Employee or a former Employee) or one of the 10 most Highly Compensated
Employees (ranked on the basis of Compensation paid during a Plan Year) is an
Employee, the Committee shall aggregate the Highly Compensated Employee and the
Highly Compensated Employee's family members treating them as a single Employee
receiving Compensation and Plan contributions equal to the sum of the
Compensation and Plan contributions for all such family members.
The Committee shall administer the requirements of this Section in
accordance with Code 414(q) and the Treasury regulations thereunder.
1.17 Hours of Service shall mean:
(a) Each hour for which the Employer, either directly or indirectly, pays an
Employee, or for which the Employee is entitled to payment, for the performance
of duties during the Plan Year. The Committee shall credit Hours of Service
under this paragraph (a) to the Employee for the Plan Year in which the Employee
performs the duties, irrespective of when paid.
(b) Each hour for which the Employer, either directly or indirectly, pays an
Employee, or for which the Employee is entitled to payment (irrespective of
whether the employment relationship is terminated), for reasons other than for
the performance of duties during a Plan Year, such as leave of absence,
vacation, holiday, sick leave, illness, incapacity (including Disability),
layoff, jury duty, or military duty. The Committee shall not credit more than
501 Hours of Service under this paragraph (b) to an Employee on account of any
single continuous period during which the Employee does not perform any duties
(whether or not such period occurs during a single Plan Year). The Committee
shall credit Hours of Service under this paragraph (b) in accordance with the
rules of paragraphs (b) and (c) of Labor Reg. 2530.200b-2, which is
incorporated herein by this reference.
(c) Each hour for back pay, irrespective of mitigation of damages, to which the
Employer has agreed or for which the Employee has received an award. The
Committee shall credit Hours of Service under this paragraph (c) to the Employee
for the Plan Years to which the award or the agreement pertains rather than for
the Plan Year in which the award, agreement, or payment is made.
The Committee shall not credit an Hour of Service under more than one of
the above paragraphs. The Committee shall credit Hours of Service the Employee
completes for members of any Related Group and shall credit Hours of Service the
Employee completes as a leased employee within the meaning of Code 414(n)(2).
If the Committee is to credit Hours of Service to an Employee for the 12 month
period beginning with the Employee's Employment Commencement Date or with an
anniversary of such date, then that 12 month period shall be substituted for the
term "Plan Year" wherever the term "Plan Year" appears in this Section.
Solely for purposes of determining whether the Employee incurs a Break in
Service under any provision of this Plan, the Committee shall credit Hours of
Service during an Employee's unpaid absence due to maternity or paternity leave
on the basis of the number of Hours of Service the Employee would receive if the
Employee were paid during the absence or, if the Committee cannot determine the
number of Hours of Service the Employee would receive, on the basis of eight
hours per day during the absence. The Committee shall consider an Employee on
maternity or paternity leave if the Employee's absence is due to the Employee's
pregnancy, the birth of the Employee's child, the placement with the Employee of
an adopted child, or the care of the Employee's child immediately following the
child's birth or placement. The Committee shall credit only the number of Hours
of Service (up to 501 Hours of Service) necessary to prevent the Employee's
Break in Service. The Committee shall credit all Hours of Service described in
this paragraph to the Plan Year in which the absence begins or, if the Employee
does not need these Hours of Service to prevent a Break in Service in the Plan
Year in which the absence begins, the Committee shall credit these Hours of
Service to the immediately following Plan Year.
1.18 Key Employee shall mean any Employee, former Employee, or the Beneficiary
of an Employee or former Employee, if the Employee or former Employee at any
time during the Plan Year which includes the Anniversary Date or any of the four
preceding Plan Years:
(a) is an officer of the Employer earning Compensation greater than 50% of the
limitation under Code 415(b)(1)(A) in effect for such Plan Years. No more than
50 Employees, or if lesser, the greater of three Employees or 10% of the
Employees shall be treated as officers;
(b) is one of the Employees earning Compensation of more than the dollar
limitation under Code 415(c)(1)(A) and owns one of the 10 largest interests in
the Employer;
(c) owns more than 5% of the Employer; or
(d) owns more than 1% of the Employer and earns Compensation in excess of
$150,000.
The constructive ownership rules of Code 318 (or the principles of that
section, in the case of an unincorporated Employer) shall apply to determine
ownership in the Employer. The Committee shall determine who is a Key Employee
in accordance with Code 416(i)(1) and the Treasury regulations thereunder.
1.19 Limitation Year shall mean the Plan Year.
1.20 Non-Key Employee shall mean a Participant who is not a Key Employee and who
is employed by the Employer on the Anniversary Date of the Plan Year, regardless
of whether the Participant satisfies the requirements of Section 4.2 during the
Plan Year.
1.21 Normal Retirement Date shall mean the later of (i) the date on which a
Participant attains age 65, or (ii) the 5th anniversary of the first Plan Year
in which the Participant entered the Plan.
1.22 Participant shall mean any Employee who has entered the Plan on a Plan
Entry Date.
1.23 Participating Employer shall mean any member of the Related Group which has
adopted this Plan.
1.24 Plan shall mean the Scott's Liquid Gold-Inc. Employee Stock Ownership Plan.
1.25 Plan Entry Date shall mean January 1 and July 1 of each Plan Year.
1.26 Plan Sponsor shall mean Scott's Liquid Gold-Inc.
1.27 Plan Year shall mean the 12 month period ending each December 31.
1.28 Reemployment Commencement Date shall mean the first day after a Break in
Service on which an Employee performs an Hour of Service for the Employer.
1.29 Related Group shall mean a controlled group of corporations (as defined in
Code 414(b)), trades or businesses (whether or not incorporated) which are
under common control (as defined in Code 414(c)), an affiliated service group
(as defined in Code 414(m)), and any other entity required to be aggregated
with the Employer pursuant to Code 414(o) and the Treasury regulations
thereunder. If the Employer is a member of a Related Group, the Plan shall treat
all Employees of the members of such Related Group as if employed by a single
employer. Solely for purposes of applying the Code 415 limitations of Article
4, the Committee shall determine any Related Group by modifying Code 414(b)
and (c) in accordance with Code 415(h).
1.30 Required Aggregation Group shall mean (a) each qualified plan of the
Employer in which at least one Key Employee participates at any time during the
five Plan Year period ending on the Anniversary Date (regardless of whether the
Plan has terminated); and (b) any other qualified plan of the Employer which
enables a plan described in (a) to meet the requirements of Code 401(a)(4) or
Code 410.
1.31 Service shall mean any period of time the Employee is in the employ of the
Employer, including any period the Employee is on leave of absence authorized by
the Employer under a uniform, nondiscriminatory policy applicable to all
Employees.
1.32 Stock shall mean the common stock of Scott's Liquid Gold-Inc.
1.33 Top Heavy Plan shall mean that the top heavy ratio for the Plan as of the
Anniversary Date exceeds 60% for a Plan Year if this Plan is the only qualified
plan maintained by the Employer. The top heavy ratio is a fraction. The
numerator of the fraction is the sum of the present value of Accounts of all Key
Employees as of the Anniversary Date (including any contribution not made as of
the Anniversary Date but which Code 416 and the Treasury regulations
thereunder require the Committee to take into account), and distributions made
within the five Plan Year period immediately preceding the Anniversary Date. The
denominator of the fraction is a similar sum determined for all Employees. The
Committee shall calculate the top heavy ratio by disregarding the Accounts
attributable to voluntary deductible Employee contributions, if any, and by
disregarding the Accounts of any Non-Key Employee who was formerly a Key
Employee. The Committee shall calculate the top heavy ratio by disregarding the
Accounts (including distributions, if any, of the Accounts) of an individual who
has not received credit for at least one Hour of Service with the Employer
during the five Plan Year period ending on the Anniversary Date. The Committee
shall calculate the top heavy ratio, including the extent to which it shall take
into account distributions, rollovers, and transfers, in accordance with Code
416 and the Treasury regulations thereunder.
If the Employer maintains other qualified plans, this Plan is a Top Heavy
Plan only if it is part of a Required Aggregation Group, and the top heavy ratio
for both the Required Aggregation Group and the Permissive Aggregation Group
exceeds 60%. The Committee shall calculate the top heavy ratio in the same
manner as required by the first paragraph of this Section, taking into account
all plans within the Required Aggregation Group and the Permissive Aggregation
Group. To the extent the Committee must take into account distributions to an
Employee, the Committee shall include distributions from a terminated plan which
would have been part of the Required Aggregation Group if it were in existence
on the Anniversary Date. The Committee shell calculate the present value of
accrued benefits and any other amounts necessary for this calculation under
Defined Benefit Plans included within the group in accordance with the terms of
those plans, Code 416, and the Treasury regulations thereunder. The accrued
benefit under a Defined Benefit Plan of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans maintained by the Employer, or, if
there is no uniform method, as if the Employee's benefit accrued not more
rapidly than the slowest accrual rate permitted under the fractional rule of
accrual of Code 411(b)(1)(C). If an aggregated plan does not have a valuation
date coinciding with the Anniversary Date, the Committee shall value the
Accounts in the aggregated plan as of the most recent valuation date falling
within the 12 month period ending on the Anniversary Date, except as Code 416
and the Treasury regulations thereunder require for the first and second plan
year of a Defined Benefit Plan. The Committee shall calculate the top heavy
ratio with reference to the Anniversary Dates that fall within the same calendar
year.
1.34 Trust shall mean the separate trust created by the Employer under the Plan
in Article 9.
1.35 Trustee shall mean the person or persons appointed by the Plan Sponsor as
Trustee of the Trust Fund established by this Plan and Trust and any duly
appointed or qualified successor trustee.
1.36 Trust Fund shall mean all property of every kind held or acquired by the
Trustee under the Plan.
1.37 Valuation Date shall mean December 31 of each Plan Year and
each date on which the Trustee values the Trust Fund.
1.38 Year of Service - Participation shall have the meaning described in Section
2.2.
1.39 Year of Service - Vesting shall mean each Plan Year in which an Employee
completes not less than 1,000 Hours of Service.
***End of Article 1***
2
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility. Each Employee who was a Participant in the Plan on the day
before the Effective Date shall continue as a Participant in the Plan. For
purposes of eligibility to participate, the Plan shall count all of an
Employee's Years of Service with the Employer and the Related Group. Unless the
Employee elects otherwise, each Employee shall become a Participant in the Plan
on the Plan Entry Date (if employed on that date) coincident with or immediately
following the later of the date on which the Employee completes one Year of
Service or attains age 21. An Employee shall be permitted to irrevocably elect
not to participate prior to or at the time the Employee has first met the
requirements of this Section or of any other plan of the Employer meeting the
requirements of Code 401. A Participant shall not be permitted to elect not to
participate. The Employee shall file the election in writing with the Committee
not later than 60 days prior to completion of the eligibility requirements of
any plan of the Employer meeting the requirements of Code 401. The Employer
shall not make a contribution under the Plan for the Employee making such an
election for any Plan Year.
2.2 Years of Service - Participation. For purposes of eligibility to
participate, Year of Service shall mean a 12 consecutive month period during
which the Employee completes not less than 1,000 Hours of Service, measuring the
beginning of the first 12 month period from the Employment Commencement Date,
and measuring succeeding 12 month periods from each anniversary of the first day
of the Plan Year which includes the first anniversary of the Employee's
Employment Commencement Date, regardless of whether the Employee is entitled to
be credited with 1,000 Hours of Service during the 12 consecutive month period
which commenced with the Employee's Employment Commencement Date. An Employee
who receiver credit for 1,000 Hours of Service during the 12 consecutive month
period which commenced with the Employee's Employment Commencement Date and
during the Plan Year which includes the first anniversary of the Employee's
Employment Commencement Date shall receive credit for two Years of Service for
purposes of eligibility to participate in the Plan.
2.3 Participation Upon Reemployment. A Participant whose employment terminates
shall reenter the Plan as a Participant on the Participant's Reemployment
Commencement Date. An Employee who satisfies the Plan's eligibility conditions
but who terminates employment prior to becoming a Participant shall become a
Participant on the later of the Plan Entry Date on which the Employee would have
entered the Plan had he or she not terminated employment or the Participant's
Reemployment Commencement Date. An Employee who terminates employment prior to
satisfying the Plan's eligibility conditions shall become a Participant in
accordance with the Plan's eligibility conditions of Section 2.1.
2.4 Change in Employee Status. If a Participant does not terminate employment,
but is not an Employee or ceases to be an Employee by reason of employment
within an employment classification, then during the period such Participant is
not an Employee, the Committee shall not allocate any Employer contributions or
forfeitures to the Participant's Accounts except to the extent the Participant
rendered services for the Employer as an Employee. However, during such period,
the Participant, without regard to employment classification, shall continue to
receive credit for vesting under Article 5 for each included Year of Service and
the Participant's Accounts shall continue to share fully in Trust Fund
allocations under Section 4.6. A Participant who is no longer an Employee will
participate immediately upon becoming an Employee. An Employee who is not an
Employee shall participate immediately upon becoming an Employee if the Employee
has satisfied the requirements of Section 2.1 other than being an Employee.
***End of Article 2***
3
ARTICLE 3
CONTRIBUTIONS
3.1 Amount of Contribution. Within the time permitted for the filing of the
Employer's federal income tax return for a Plan Year, including extensions
thereof, the Plan Sponsor shall contribute to the Trust an annual sum in cash or
in Stock as determined by the Employer. The Employer shall contribute to the
Trust for each Plan Year the amount required to enable the Trust to pay
principal and interest due during the Plan Year of the Trust's outstanding debt
obligations. In no event shall the amount of the Employer's contribution exceed
the maximum deductible contribution pursuant to Code 404 for the Plan Year in
which the contribution is being determined.
3.2 Carry Over Contributions. In any year ending before January 1, 1987, if the
Employer's contribution is less than 15% of all Participants' Compensation for
that year, then in the next succeeding year or years, the Employer may make an
additional contribution in an amount equal to the difference between the
contribution previously made in the year ending before January 1, 1987 and 15%
of all Participants' Compensation in such preceding year. In such succeeding
year, if the Employer does not make up such difference between the amount
contributed in the year ending before January 1, 1987 and 15% of all
Participants' Compensation in that year, then the Employer may do so in the
second succeeding year in the same manner, and in the next succeeding years
follow the second succeeding year until such contribution for the year ending
before January 1, 1987 has been made in full. The total amount of contributions,
including carryovers from pre-1987 years, that is deductible in any one taxable
year is limited to 25% of all Participants' Compensation during such year.
3.3 Minimum Employer Contribution. If this Plan is a Top Heavy Plan in any Plan
Year, the contribution for each Non-Key Employee shall be at least equal to a
minimum contribution. The Employer shall provide the top heavy minimum
contribution under this Plan.
If the contribution rate for the Key Employee with the highest contribution
rate is greater than or equal to 3%, the minimum contribution shall be 3% of
Compensation for each Non-Key Employee. If the contribution rate for the Key
Employee with the highest contribution rate is less than 3%, the minimum
contribution for each Non-Key Employee shall equal the highest contribution rate
for a Key Employee.
The contribution rate is the sum of Employer contributions (not including
Employer contributions to Social Security) and forfeitures allocated to the Key
Employee's Account for the Plan Year divided by the Key Employee's Compensation
for the Plan Year. To determine the contribution rate, the Committee shall treat
all qualified top heavy defined contribution plans maintained by the Employer as
a single plan. For Plan Years beginning after December 31, 1988, the Committee
shall not treat Elective Deferrals made to any plan pursuant to a Cash or
Deferred Arrangement as Employer contributions for any Non-Key Employee;
however, the Committee shall treat Elective Deferrals made to any plan pursuant
to a Cash or Deferred Arrangement as Employer contributions for all Key
Employees.
Notwithstanding the preceding provisions of this Section, if a Defined
Benefit Plan maintained by the Employer which benefits a Key Employee depends on
this Plan to satisfy the nondiscrimination rules of Code 401(a)(4) or the
coverage rules of Code 410 (or another plan benefiting the Key Employee so
depends on such Defined Benefit Plan), the minimum contribution for a Non-Key
Employee shall be 3% of the Non-Key Employee's Compensation regardless of the
highest contribution rate for any Key Employee.
If the contribution rate for the Plan Year with respect to a Non-Key
Employee is less than the minimum contribution, the Employer shall increase its
contribution for such Non-Key Employee to the extent necessary so that the
contribution rate for the Plan Year shall equal the minimum contribution. If
more than one entity maintains this Plan, each entity shall make the additional
contribution attributable to the Compensation it pays the Non-Key Employee,
unless the members enter into a separate written agreement allocating the
responsibility for the additional contribution in another manner.
3.4 Return of Employer Contributions. Except as provided in this Section, any
Employer contributions to the Trust shall be irrevocable and neither such
contributions nor any income therefrom shall be used for, nor diverted to,
purposes other than for the exclusive benefit of Participants or their
Beneficiaries under the Plan; however, upon written request from the Employer,
the Trustee shall return to the Employer the amount of the Employer's
contribution made by mistake of fact. Any contribution made by the Employer
because of a mistake of fact must be returned to the Employer within one year
after the date when the contribution was made. The Trustee shall not increase
the amount of the Employer contribution to be returned for any earnings
attributable to the contribution, but the Trustee shall decrease the Employer
contribution to be returned for any losses attributable to the contribution.
3.5 Participant Contributions. Participants shall not be required nor shall
they be permitted to make any contributions to the Trust nor shall the Trust
accept any rollover contributions from any Participant.
***End of Article 3***
4
ARTICLE 4
ALLOCATIONS TO ACCOUNTS
4.1 Participant's Account. The Committee shall establish and maintain an
Account in the name of each Participant to reflect the Participant's benefit
derived from amounts contributed by the Employer and net earnings (or losses) of
the Trust Fund. The Committee shall subtract all distributions made to a
Participant's or a Participant's Beneficiary from the Participant's Account when
the distribution is made. The Committee shall subtract all forfeitures when they
occur from the Participants' Accounts which incurred the forfeitures.
4.2 Allocation of Contributions and Forfeitures. The Committee, as of the
Anniversary Date of each Plan Year, shall allocate each Employer contribution
and forfeitures if any to the Account of each Participant of the Employer in the
same proportion that each such Participant's Compensation for the Plan Year
bears to the Compensation of all Participants of the Employer for the Plan Year.
A Participant who remains in the employ of the Employer after attaining the
Normal Retirement Date shall continue to participate in Employer contributions.
Forfeitures shall be allocated in the Plan Year in which the forfeiture occurs.
If more than one entity maintains the Plan, the Committee shall allocate all
Employer contributions and forfeitures to each Participant in the Plan in
accordance with this Article, without regard to which contributing Employer
employs the Participant. A Participant's Compensation includes Compensation from
all participating Employers, irrespective of which Employers are contributing to
the Plan.
A Participant shall share in the allocation of any Employer contribution
and forfeitures only if he or she has completed 1,000 Hours of Service during
such Plan Year. In addition, a Participant must be an Employee of the Employer
on the last day of the Plan Year in order to share in the contribution for such
Plan Year. However, a Participant shall share in Employer contributions and
forfeitures for the Plan Year in which the Participant retires, dies, or
becomes Disabled, regardless of whether he or she is an Employee of the Employer
on the last day of the Plan Year. The Participant must complete 1,000 Hours
of Service in the Plan Year in which the Participant retires, dies or becomes
Disabled to share in the allocation.
4.3 Allocation of Minimum Contribution. The Committee shall allocate any
additional contribution to the Account of the Non-Key Employee for whom the
Employer makes the contribution in accordance with Section 3.3.
4.4 Limitations on Allocations to Participants' Accounts. The amount of Annual
Additions which the Committee may allocate under this Plan on a Participant's
behalf for a Limitation Year may not exceed the Maximum Permissible Amount. If
the amount the Employer otherwise would contribute to the Participant's Accounts
would cause the Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the Employer shall reduce the amount of its contribution so
that the Annual Additions for the Limitation Year shall equal the Maximum
Permissible Amount. The Excess Amount will be deemed to consist of the Annual
Additions last allocated. The Committee shall determine the Excess Amount by
treating the Annual Additions attributable to a welfare benefit fund or an
individual medical account, if any, as allocated first, irrespective of the
actual allocation date.
Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of the Participant's
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated. As soon as is administratively feasible after the end of the
Limitation Year, the Committee shall determine the Maximum Permissible Amount
for the Limitation Year based on the Participant's actual Compensation for the
Limitation Year.
Disposition of Excess Amount. If there is an Excess Amount with respect to
a Participant for a Limitation Year because of contributions based on estimated
Compensation or because of the allocation of forfeitures, the Committee shall
dispose of such Excess Amount as follows:
(a) If the Plan covers the Participant at the end of the Limitation Year, then
the Committee shall use the Excess Amount to reduce future Employer
contributions (including any allocation of forfeitures) under the Plan for the
next Limitation Year and for each succeeding Limitation Year, as is necessary,
for the Participant.
(b) If, after the application of paragraph (a) of this Section, as Excess
Amount still exists, and the Plan does not cover the Participant at the end of a
Limitation Year, then the Committee shall hold the Excess Amount unallocated in
a suspense account. The Committee shall apply the suspense account to reduce
Employer contributions for all remaining Participants in the next Limitation
Year, and in each succeeding Limitation Year if necessary. If a suspense account
is in existence at any time during a Limitation Year, all amounts in the
suspense account must be allocated to Participant's Accounts before any Employer
or Employee contributions may be made to the Plan for the Limitation Year.
(c) The Committee shall not distribute any Excess Amounts to Participants,
former Participants, or Beneficiaries.
If there is an Excess Amount with respect to a Participant for a Limitation
Year for any reason other than forfeitures or the estimation of Compensation,
the Committee shall dispose of such Excess Amount by reallocating the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Committee shall make this reallocation on the basis of the allocation method
under the Plan as if the Participant whose Accounts otherwise would receive the
Excess Amount is not eligible for an allocation of Employer contributions.
More than One Plan. The Committee shall attribute the total Excess Amount
allocated as of the Anniversary Date to the Scott's Liquid Gold-Inc. 401(k)
Plan.
4.5 Code 415 Definitions. For purposes of this Article, the following terms
shall have the meaning described in the paragraphs below:
(a) Annual Additions shall mean the sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (1) all Employer
contributions; (2) all forfeitures; and (3) all Employee contributions effective
for Plan Years beginning after December 31, 1986. Annual Additions shall also
include Excess Amounts reapplied to reduce Employer contributions under Section
4.4. Amounts allocated after March 31, 1984 to an individual medical account (as
defined in Code 415(l)(2)) and included as part of a pension and annuity plan
maintained by the Employer shall be Annual Additions. Furthermore, Annual
Additions shall include contributions paid or accrued after December 31, 1985
for taxable years ending after December 31, 1985 attributable to post-retirement
medical benefits allocated to the separate account of a key employee (as defined
in Code 419A(d)(3)) under a welfare benefit fund (as defined in Code 419(e))
maintained by the Employer, but only for purposes of the dollar limitation
applicable to the Maximum Permissible Amount.
(b) Defined Benefit Plan shall mean a retirement plan which does not provide
for individual accounts for Employer contributions. The Committee shall treat
all Defined Benefit Plans (whether or not terminated) maintained by the Employer
as a single plan.
(c) Defined Benefit Plan Fraction shall mean the fraction described below:
Projected annual benefit of the Participant
under all Defined Benefit Plans of the Employer
The lesser of (1) 125% (subject to the 100%
Limitation described in paragraph (h)
of this Section) of the dollar
limitation in effect under Code 415(b)(1)(A)
for the Limitation Year, or (2) 140% of the
Participant's average Compensation for the
Participant's highest three consecutive Years of Service
To determine the denominator of this fraction, the Committee shall
make any adjustment required under Code 415(b) and shall determine a
Year of Service in accordance with Section 1.39. The "projected annual
benefit" is the annual retirement benefit (adjusted to an actuarially
equivalent straight life annuity if the plan expresses such benefit in
a form other than a straight life annuity or qualified joint and
survivor annuity) of the Participant under the terms of the Defined
Benefit Plan with the assumptions that the Participant continues
employment until the normal retirement age as stated in the Defined
Benefit Plan (or current age, if later), that the Participant's
Compensation continues at the same rate as in effect in the Limitation
Year under consideration, and that all other relevant factors used to
determine benefits under the Defined Benefit Plan remain constant as
of the current Limitation Year for all future Limitation Years.
Current Accrued Benefit. If the Participant accrued benefits in one or
more Defined Benefit Plans maintained by the Employer which were in
existence on May 5, 1986, the dollar limitation used in the
denominator of this fraction shall not be less than the Participant's
current accrued benefit. A Participant's current accrued benefit is
the sum of the annual benefits under such defined benefit plans which
the Participant had accrued as of the end of the 1986 Limitation Year
(the last Limitation Year beginning before January 1, 1987),
determined without regard to any change in the terms or conditions of
the Plan made after May 5, 1986 and without regard to any cost of
living adjustment occurring after May 5, 1986. This current accrued
benefit rule applies only if the Defined Benefit Plans individually
and in the aggregate satisfied the requirements of Code 415 as in
effect at the end of the 1986 Limitation Year.
(d) Defined Contribution Plan shall mean a retirement plan which provides for
an individual account for each Participant and for benefits based solely on the
amount contributed to the Participant's Account, and any income, expenses,
gains, losses, and forfeitures of Accounts of other Participants which the plan
may allocate to such Participant's Account. The Committee shall treat all
Defined Contribution Plans (whether or not terminated) maintained by the
Employer as a single plan. For purposes of the limitations of this Article, the
Committee shall treat employee contributions made to a Defined Benefit Plan
maintained by the Employer as a separate Defined Contribution Plan. The
Committee shall also treat as a Defined Contribution Plan an individual medical
account (as defined in Code 415(l)(2)) included as part of a Defined Benefit
Plan maintained by the Employer and, for taxable years ending after December 31,
1985, a welfare benefit fund under Code 419(e) maintained by the Employer to
the extent there are post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code 419A(d)(3)).
(e) Defined Contribution Plan Fraction shall mean the fraction described below:
The sum as of the close of the Limitation Year of the
Annual Additions to the Participant's Accounts under all
Defined Contribution Plans of the Employer
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service
with the Employer: (1) 125% (subject to the 100%
Limitation in paragraph (h) of this
Section) of the dollar limitation in
effect under Code 415(c)(1)(A) for the Limitation Year
(determined without regard to the special dollar
limitations for employee stock ownership plans), or
(2) 35% of the Participant's Compensation
for the Limitation Year
For purposes of determining the Defined Contribution Plan fraction,
the Committee shall not recompute Annual Additions in Limitation Years
beginning prior to January 1, 1987 to treat all Employee contributions
as Annual Additions. If the Plan satisfied Code 415 for Limitation
Years beginning prior to January 1, 1987, the Committee shall
redetermine the Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction as of the end of the 1986 Limitation Year in
accordance with this paragraph. If the sum of the redetermined
fractions exceeds 1.0, the Committee shall subtract permanently from
the numerator of the Defined Contribution Plan Fraction 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. In making the adjustment, the Committee shall disregard any
accrued benefit under the Defined Benefit Plan which is in excess of
the current accrued benefit (as determined in Section 4.5(c)). This
Plan continues any transitional rules applicable to the determination
of the Defined Contribution Plan Fraction under the Employer's Plan as
of the end of the 1986 Limitation Year.
(f) Excess Amount shall mean the excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(g) Maximum Permissible Amount shall mean the lesser of (1) $30,000 (or, if
greater, 25% of the defined benefit dollar limitation under Code
415(b)(1)(A)), or (2) 25% of the Participant's Compensation for the Limitation
Year. If there is a short Limitation Year because of a change in Limitation
Year, the Committee shall multiply the $30,000 (or adjusted) limitation by the
following fraction:
Number of months in the short Limitation Year
12
(h) 100% Limitation shall mean, if it applies, that the Committee shall
determine the denominator of the Defined Benefit Plan Fraction and the
denominator of the Defined Contribution Plan Fraction by substituting 100% for
125% each place 125% appears in the definition of Defined Benefit Plan Fraction
and Defined Contribution Plan Fraction under this Section. The 100% Limitation
applies during any Limitation Year this Plan is a Top Heavy Plan only if (1) the
Plan's top heavy ratio exceeds 90%, or (2) the Plan's top heavy ratio is greater
than 60%, and the Employer does not provide extra minimum benefits which satisfy
Code 416(h)(2).
4.6 Allocation of Earnings, Losses and Changes in Fair Market Value of the Net
Assets of the Trust Fund. Earnings and losses of the Trust Fund and changes in
the fair market value of the net assets of the Trust Fund (including dividends
other than dividends on Stock, interest and other income, expenses, losses, and
changes in the fair market value of Stock) shall be computed by the Trustee and
allocated to the Participants in the ratio which the total dollar value of the
Account (whether or not vested) of each Participant in the Trust Fund bears to
the aggregate dollar value of the Accounts of all Participants as of the last
Valuation Date. An Excess Amount or suspense account (as described in Section
4.4) shall not share in the allocation of net income, gain or loss described in
this Section.
When the Employer declares a cash dividend with respect to Stock, the
provisions of this paragraph shall apply. The Employer may, in its sole
discretion, pay the cash dividend with respect to Stock held by the Trust either
directly to Participants or to the Trustee. If paid to the Trustee, the Trustee
shall allocate the dividend to the Participant's Account. The dividend shall be
allocated among Participants in the ratio that the total dollar value of the
Participant's Account (whether or not vested) in the Trust Fund bears to the
aggregate dollar value of the Accounts of all Participants as of the last
Valuation Date.
4.7 Accounting. The Account for each Participant maintained by the Committee
shall indicate the dollar value of his or her current Account in the Trust Fund
as of the last previous Valuation Date. The Committee shall provide to each
Participant at least annually, a written statement setting forth the current
value of the Participant's Account.
4.8 Methods of Valuation. All assets of the Trust Fund shall be
valued at fair market value. The fair market value of Stock shall be
the market price for the Stock as established by the closing price
quoted on the New York Stock Exchange on the Valuation Date or, in the
event the Stock is not traded on the New York Stock Exchange or any
national or regional stock exchange, then as determined by an
independent appraisal by a person who customarily makes such
appraisals.
4.9 Stock Dividends, Splits, Rights, Warrants, Options and Other
Reorganizations. Any securities received by the Trustee as a stock split or
dividend or as a result of a reorganization or the recapitalization of the
Employer shall be allocated as of each Anniversary Date in the same manner as
the Stock to which it is attributable has been allocated. If any rights,
warrants, or options are issued on Stock held in the Trust, the Trustee may in
its sole discretion exercise them for the acquisition of additional Stock to the
extent that cash is then available. Any rights, warrants or options on Stock
that cannot be exercised for lack of cash may be sold by the Trustee and the
proceeds allocated as current income received on Stock.
***End of Article 4***
5
ARTICLE 5
VESTING OF PARTICIPANT'S ACCOUNT
5.1 Vesting. If any Participant reaches his or her Normal Retirement Date,
dies, or suffers Disability while an Employee, his or her entire Account shall
be 100% vested. Vested shall mean a Participant or Beneficiary has an
unconditional claim, legally enforceable against the Plan to the Participant's
Account.
5.2 Vesting Schedule. Upon separation from service for reasons other than
Retirement of the Normal Retirement Date, Disability, or death, the vested
percentage of a Participant's Account shall equal the Participant's Account
multiplied by the percentage corresponding to the Participant's Years of Service
with the Employer under the following vesting schedule, such vesting schedule to
be effective with respect to a Participant who earns one Hour of Service in a
Plan Year beginning after December 31, 1988.
Percentage of
Years of Service Account
Which is
Vested
Less than 5 0%
5 or more 100%
When the Committee determines this Plan is a Top Heavy Plan, the Committee
shall calculate a Participant's vesting percentage in accordance with the
following top heavy vesting schedule:
Percentage of
Years of Service Account
Which is
Vested
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan, the
Committee shall revert to the vesting schedule in effect before this Plan became
a Top Heavy Plan. Any such reversion shall be treated as a Plan amendment
pursuant to the terms of this Article.
5.3 Full Vesting Upon Termination or Partial Termination of Plan or Upon
Complete Discontinuance of Contributions. Upon the termination or partial
termination of this Plan or upon complete discontinuance of contributions, the
Accounts of all Participants as of the date of such termination, partial
termination, or complete discontinuance of contributions occurred, shall be
fully vested. The temporary suspension of Employer contributions shall not
constitute a termination or partial termination of this Plan and shall not
require full vesting.
5.4 Service Included in Determination of Vested Accounts. All Years of Service
with the Employer shall be included for the purpose of determining a
Participant's vested percentage, except the following service shall be excluded:
(a) Years of Service excluded by reason of a Break in Service under Section
5.5; and
(b) Years of Service with any of the subsidiaries of the Plan Sponsor prior to
the date the subsidiary became a member of the Related Group.
5.5 Break in Service - Vesting. For purposes of determining Years of Service
under this Article, a Participant incurs a Break in Service if during any Plan
Year the Participant does not complete more than 500 Hours of Service with the
Employer. Forfeiture Break in Service shall mean five consecutive Breaks in
Service.
For the sole purpose of determining the vested percentage of a
Participant's Account which accrued for the Participant's benefit prior to a
Forfeiture Break in Service, the Committee shall disregard any Year of Service
after the Participant first incurs a Forfeiture Break in Service. The Committee
shall exclude Plan Years prior to a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of five or the
aggregate number of the Years of Service prior to the Break provided the
Participant is 0% vested in his or her Accounts derived from Employer
contributions at the time the Participant has a Break in Service. The aggregate
number of Years of Service before a Break in Service does not include any Years
of Service not required to be taken into account under this exception by reason
of any prior Break in Service.
5.6 Forfeiture Occurs. The nonvested portion of a Participant's Account shall
be forfeited on the last day of the Plan Year when the Participant incurs five
consecutive one-year Breaks in Service.
5.7 Amendment to Vesting Schedule. Though the Employer reserves the right to
amend the vesting schedule at any time, the Committee shall not apply the
amended vesting schedule to reduce the vested percentage of any Participant's
Account (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less
than the vested percentage computed under the Plan without regard to the
amendment.
If the Employer makes a permissible amendment to the vesting schedule, each
Participant who has performed at least one Hour of Service in any Plan Year
beginning after December 31, 1988 and who has at least three Years of Service
with the Employer may elect to have the vested percentage of his or her Account
computed under the Plan without regard to the vesting schedule amendment. For
Participants who do not have at least one Hour of Service in any Plan Year
beginning after December 31, 1988, the election described in the preceding
sentence applies only to Participants having at least five Years of Service with
the Employer. The Participant shall file the election with the Committee within
60 days after the latest of the following three dates: (a) the date the
Employer adopts the amendment; (b) the date the amendment is effective; or
(c) the date the Participant receives written notice of the amendment. The
Committee, as soon as administratively feasible, shall forward a copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Participant shall make an election to remain under the prior vesting schedule.
For purposes of this Section, an -amendment to the vesting schedule includes any
Plan amendment which directly or indirectly affects the computation of the
vested percentage of a Participant's Account.
5.8 Special Accounting After Distribution to Reemployed Participants. When any
Participant (whose Account was not 100% vested upon termination of employment
and who received a distribution) becomes reemployed prior to incurring a
Forfeiture Break in Service, the Account shall continue to be maintained with
respect to that portion of his or her interest, if any, which is not
distributed. The interest of such Participant in such Account shall continue to
vest pursuant to Section 5.2.
***End of Article 5***
6
ARTICLE 6
DISTRIBUTIONS
6.1 Distributions Not Exceeding $5,000. The Committee shall direct the Trustee
to distribute the Participant's Account in the form of a lump sum, not later
than 60 days after the close of the Plan Year in which the Participant's
employment terminates for any reason, including death, disability, or attainment
of the Normal Retirement Date, if the Participant's vested Account (at the time
of the distribution) does not exceed $5,000. If the Participant's vested
Account, at the time of any distribution, exceeds $5,000, the Committee shall
treat a distribution as exceeding $5,000 for purposes of all subsequent Plan
distributions to the Participant.
6.2 Distributions Exceeding $5,000. The Trustee shall distribute the
Participant's Account in the form and at the time elected by the Participant,
pursuant to Section 6.6. If the Participant or the Beneficiary does not elect in
writing to a time or method of payment in accordance with Section 6.6, the
Committee shall direct the Trustee to commence distribution of a Participant's
vested Account in accordance with this Section, not later than 60 days after the
close of the Plan Year in which the Participant's employment terminates for any
reason, including death, disability, or attainment of the Normal Retirement
Date. Notwithstanding the immediately preceding sentence, a Participant (or the
Participant's Beneficiary, if the Participant is deceased) shall consent, in
writing, within the 90 day period ending on the annuity starting date (see
Section 6.6), to any distribution if the Participant's vested Account, at the
time of the distribution exceeds $5,000, and the Participant has not attained
the later of Normal Retirement Date or age 62. The failure of a Participant to
consent to a distribution of any part of his or her vested Account which could
be distributed under the Plan before attaining the later of Normal Retirement
Date or age 62 shall be deemed to be an election to defer distribution of the
Participant's vested Account until the time for distribution specified in the
immediately following paragraph.
Unless the participant elects otherwise, the Committee shall direct the
Trustee to distribute the Participant's vested Account in a lump sum not later
than the 60th day after the close of the Plan Year in which occurs the latest of
the following events:
(a) the Participant attains age 65 (or Normal Retirement Date, if earlier);
(b) the 10th anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan; or,
(c) the Participant terminates service with the Employer.
Notwithstanding the preceding provisions of this Section, the Committee shall
direct the Trustee to distribute any amount required to be distributed under
Section 6.3 (or under Code 415) prior to the time described in this Section.
Distributions Upon Death Which Exceed $5,000. Upon the death of the
Participant, the Committee shall direct the Trustee to distribute the
Participant's vested Account remaining in the Trust at the time of the
Participant's death to the Participant's Beneficiary in the form and at the time
elected by the Beneficiary in accordance with Section 6.6. The Beneficiary's
election is subject to any restrictions designated in writing by the Participant
and not revoked as of the date of the Participant's death. In the absence of an
election by the Beneficiary, the Committee shall direct the Trustee to
distribute the Participant's Account in a lump sum, as soon as administratively
practicable following the Participant's death (or the date on which the
Committee receives notification of, or otherwise confirms the Participant's
death), but not later than 60 days after the close of the Plan Year in which the
Participant's death or notification occurred.
6.3 Distributions on Account of Attaining Age 70 and one half. The provisions
in this Section take precedence over all other provisions in this Article. The
Committee shall direct the Trustee to distribute under this Section not later
than the Participant's Required Beginning Date. Notwithstanding the immediately
preceding sentence, the Committee shall direct the Trustee to distribute a
Participant's vested Account in accordance with a properly executed transitional
election (as provided in the last paragraph of this Section).
Required Beginning Date. Required Beginning Date shall mean the April 1
following the close of the calendar year in which the Participant attains age
70-1/2, if the Participant is a more than 5% owner with respect to the Plan Year
ending in that calendar year. For any other Participant, his Required Beginning
Date is the April 1 following the close of the calendar year in which the
Participant separates from Service or, if later, the April 1 following the close
of the calendar year in which the Participant attains age 702. A mandatory
distribution at the Participant's Required Beginning Date shall be in lump sum
unless the Participant makes a valid election to receive an alternative form of
distribution.
Minimum Distribution Requirements for Participants. The Trustee shall not
distribute the Participant's vested Account under a method of distribution
which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code 401(a)(9) and the applicable Treasury
regulations.
Minimum Distribution Requirements for Beneficiaries. The method of
distribution to the Participant's Beneficiary shall satisfy Code 401(a)(9) and
the applicable Treasury regulations. If the Participant's death occurs after his
or her Required Beginning Date (or if earlier, the date an irrevocable annuity
commences to the Participant), the distribution period to the Beneficiary shall
not exceed the distribution period which had commenced for the Participant. If
the Participant's death occurs prior to his or her Required Beginning Date, the
method of distribution to the Beneficiary shall provide for distribution to the
Beneficiary over a period not exceeding 5 years after the date of the
Participant's death.
If the designated Beneficiary is the Participant's surviving spouse, the
Trustee may delay distribution until December 31 of the calendar year in which
the Participant would have attained age 70 and one half, if later. If the
surviving spouse dies after the Participant but before distributions commence
to the surviving spouse, the provisions of this Section (other than the
immediately preceding sentence) shall be applied as if the surviving spouse
were the Participant.
Transitional Elections. If the Participant (or Beneficiary) signed a
written distribution designation prior to January 1, 1984, the Committee shall
distribute the Participant's vested Account in accordance with that designation.
The Committee shall not comply with a pre-1984 distribution designation if any
of the following applies: (a) the method of distribution would have disqualified
the Plan under Code 401(a)(9) as in effect on December 31, 1983; (b) the
Participant did not have an Account as of December 31, 1983; (c) the
distribution designation does not specify the timing and form of the
distribution and the death Beneficiaries (in order of priority); (d) the
substitution of a Beneficiary modifies the distribution period; or (e) the
Participant (or Beneficiary) modifies or revokes the distribution designation.
In the event of a revocation, the Plan shall distribute, not later than December
31 of the calendar year following the year of revocation, the amount which the
Participant would have received under this Section if the election had not been
in effect or, if the Beneficiary revokes the election, the amount which the
Beneficiary would have received under this Section if the election had not been
in effect. The Committee shall apply this Section to rollovers and transfers in
accordance with the Code 401(a)(9) regulations.
6.4 Distributions Under Domestic Relations Order. Nothing contained in this
Plan shall prevent the Trustee, in accordance with the direction of the
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Code 414(p)). Prior to January 1, 1994, an alternate
payee under a qualified domestic relations order was not entitled to a
distribution prior to the time the Participant attained the earliest retirement
age (as defined under Code 414(p)) under the Plan. Effective January 1, 1994,
the Plan permits distribution to an alternate payee under a qualified domestic
relations order at any time, irrespective of whether the Participant has
attained the earliest retirement age under the Plan. A distribution to an
alternate payee prior to the Participant's attainment of the earliest retirement
age is available only if (a) the order specifies distribution at that time or
permits an agreement between the Plan and the alternate payee to authorize an
earlier distribution; and (b) if the present value of the alternate payee's
benefits under the Plan exceeds $5,000 and the order requires, the alternate
payee consents to any distribution occurring prior to the Participant's
attainment of the earliest retirement age. Nothing in this Section shall be
construed to permit a Participant to receive a distribution at a time otherwise
not permitted under the Plan, nor does it permit the alternate payee to receive
a form of distribution not permitted under the Plan.
The Committee shall establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Committee promptly shall notify the Participant and any
alternate payee named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the order. Within
a reasonable period of time after receiving the domestic relations order, the
Committee shall determine the qualified status of the order and shall notify the
Participant and each alternate payee, in writing, of its determination. The
Committee shall provide notice under this paragraph by mailing to the
individual's address specified in the domestic relations order, or in a manner
consistent with Department of Labor regulations.
If any portion of the Participant's vested Account is distributable during
the period the Committee is making its determination of the qualified status of
the domestic relations order, the Committee shall make a separate accounting of
the amounts distributable. If the Committee determines the order is a qualified
domestic relations order within 18 months following receipt of the order, the
Committee shall direct the Trustee to distribute the distributable amounts in
accordance with the order. If the Committee does not make its determination of
the qualified status of the order within the 18 months following receipt of the
order, the Committee shall direct the Trustee to distribute the distributable
amounts in the manner the Plan would distribute if the order did not exist and
shall apply the order prospectively if the Committee later determines the order
is a qualified domestic relations order.
If not prohibited by the provisions of the qualified domestic relations
order, the Committee may direct the Trustee to invest any partitioned amount in
a segregated Account and to invest the account in federally insured, interest-
bearing savings accounts or time deposits (or a combination of both), or in
other fixed income investments. The Trustee shall make any distributions
required under this Section by separate benefit checks or other separate
distribution to the alternate payees.
6.5 Diversification Distributions. A Participant shall make an election under
this Section on a form prescribed by the Committee at any time during the Plan
Year for which the election is to be effective. In the written election, the
Participant shall specify the dollar amount desired to be distributed. The
Trustee shall distribute to a Participant in accordance with such an election
under this Section within the 90 day period (or as soon as administratively
practicable) after the Participant files the written election with the Trustee.
Notwithstanding any other provision of this Plan, any Participant who has
attained age 55 and who has completed at least 10 years of participation in the
Plan (hereinafter referred to as a "Qualified Participant") shall be entitled to
elect, within 90 days after the end of any Plan Year in the Participant's
Qualified Election Period, to receive a distribution of up to 25% of the total
number of shares of Stock that were allocated to the Participant's Account after
December 31, 1986 and prior to July 1, 1994, less any shares of such Stock that
have previously been distributed to the Participant. With respect to the last
Plan Year in a Participant's Qualified Election Period, the preceding sentence
shall be applied by substituting "50%" for "25%." An election to receive a
distribution of Stock under this Subsection may not be made by a Qualified
Participant unless the fair market value (as of any valuation date during the
Participant's Qualified Election Period) of the Stock that has been allocated to
the Participant's Account and that was acquired by or contributed to the Plan
after December 31, 1986 and prior to July 1, 1994, exceeds $500.
(a) The "Qualified Election Period" for a Qualified Participant is the period
consisting of the six-consecutive Plan Years beginning with the Plan Year in
which the Participant first becomes a Qualified Participant. However, if a
Participant became a Qualified Participant prior to January 1, 1987, such
Participant's Qualified Election Period is the period consisting of the five-
consecutive Plan Years beginning with the Plan Year that ended on December 31,
1987, and such Participant shall be entitled to make his or her first election
under this Section (relating to the Plan Year that ended on December 31, 1987)
by September 6, 1988.
(b) Any distribution of Stock pursuant to a Qualified Participant's election
under this Section shall be made within 90 days after the end of the period
during which the Qualified Participant was entitled to make the election under
this Section. Any Stock so distributed shall be subject to the put option.
6.6 Distribution Methods, Consents and Election. Subject to any
restrictions prescribed by Section 6.3, a Participant or Beneficiary
may elect a lump sum distribution in Stock at any time after the
Participant terminates employment with the Employer. Distribution
shall commence to the Participant or Beneficiary within a reasonable
period of time following the request for distribution. Fractional
shares shall be paid in cash. For purposes of a distribution under the
Plan, the value of a Participant's Account shall be its value as of
the Valuation Date immediately preceding the date of the distribution.
Not earlier than 90 and not later than 30 days before the Participant's
annuity starting date, the Committee shall provide a benefit notice to a
Participant who is eligible to make an election or required to consent
under this Article. For purposes of this Article, the term "annuity
starting date" means the first day of the first period for which the
Plan pays an amount as an annuity or in any other form. The benefit notice
shall explain the optional methods of distribution from the Plan, including
the material features and relative values of those methods, and the
Participant's right to defer distribution until his or her Required Beginning
Date, as defined in Section 6.3. If a distribution is one to which Code
401(a)(11) and 417 do not apply, such distribution may commence less than 30
days after the notice required under Treas. Reg. 1.411(a)-11(c) is given,
provided that:
(a) the Committee clearly informs the Participant that the Participant has a
right to a period of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively elects a
distribution.
If a Participant or Beneficiary makes an election under this Section, the
Committee shall direct the Trustee to distribute the Participant's vested
Account in accordance with that election. The Participant or Beneficiary shall
make an election under this Section by filing his or her election form with the
Committee at any time before the Trustee otherwise would distribute a
Participant's Account in accordance with the requirements of this Article.
6.7 Annuity Distributions to Participants and Surviving Spouses. The annuity
distribution provisions of Code 417 shall not apply to any Participant in the
Plan except to:
(a) a Participant with respect to whom the Plan is a direct or indirect
transferee from a plan subject to the Code 417 requirements, and the Plan
received the transfer after December 31, 1984, unless the transfer is an
elective transfer;
(b) a Participant who elects a life annuity distribution; and
(c) a Participant whose benefits under a defined benefit plan maintained by the
Employer are offset by benefits provided under this Plan.
6.8 Destination of Beneficiary. For all purposes of this Plan, the
Participant's Beneficiary shall be the Participant's surviving spouse, if any,
and the surviving spouse shall receive the Participant's Accounts in the Trust
Fund upon the death of the Participant. However, if there is no surviving
spouse, or if the spouse has previously consented to the designation of another
Beneficiary, a Participant's Beneficiary shall be the person designated by the
Participant on a written form prescribed by and delivered to the Committee. Any
consent by a spouse to the designation of a Beneficiary other than the spouse
must be in writing, must acknowledge the effect of such consent, must be
witnessed by a Plan Representative or notarized by a notary public, and must
meet one of the following three requirements:
(a) The consent must designate a specific Beneficiary that cannot be changed
without the additional consent of the spouse in a form meeting the requirements
of this Section;
(b) The consent must specifically provide that the Participant may change the
designation of a Beneficiary without any further consent by the spouse, and the
spouse must acknowledge in the consent that he or she is giving up the right to
limit his or her consent to a specific Beneficiary; or
(c) The consent must meet the requirement of clause (b) of this sentence,
except that the Participant's right to change a Beneficiary without any further
consent by the spouse may be limited to a change among certain Beneficiaries.
If a Participant dies without leaving a surviving spouse, the
Participant's Accounts shall be distributed to the Beneficiary
designated by the Participant.
If a Participant, who does not have a spouse, fails to designate a
Beneficiary before his or her death, or if no designated Beneficiary survives
the Participant, the Committee shall direct the Trustee to pay his or her
account in the Trust Fund first to his or her surviving spouse, if any, next to
his or her descendents by right of representation, if any, or if none, then to
his or her personal representative. If no personal representative has been
appointed, if actual notice of such is given to the Committee within 60 days
after the Participant's death, and if his or her Account does not exceed $5,000,
the Committee may direct the Trustee to pay his or her Account to such person as
may be entitled to it under the laws of descent of the state where such
Participant resided at the date of his or her death. In such case, the Committee
may require such proof in writing or identity from such person as the Committee
may deem necessary.
6.9 Direct Rollover/Transfer Provisions. This Section applies to distributions
made on or after January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. The following definitions shall apply for purposes of this Section:
(a) 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:
(1) 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, for a specified
period of ten years or more;
(2) any distribution to the extent the distribution is required under Code
401 (a)(9); and
(3) the portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(b) Eligible Retirement Plan: An Eligible Retirement Plan is an individual
retirement account described in Code 408(a); an individual retirement annuity
described in Code 408(b); an annuity plan described in Code 403(a); or a
qualified trust described in Code 401(a), 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.
(c) 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 Code 414(p),
are Distributees with regard to the interest of the spouse or former spouse.
(d) Direct Rollover: A Direct Rollover is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
***End of Article 6***
7
ARTICLE 7
EMPLOYER STOCK
7.1 Registration of Distributed Shares of Employer Stock. Although the Employer
expects to register the Stock, Stock distributed by the Trustee may be
restricted as to sale or transfer of such shares or other securities under
federal and state securities laws, which restrictions would be similarly
applicable to all Stock of the same class. This Section shall not require the
Participant to sell the Stock to the Employer or Trustee, but is imposed to
comply with the rules and regulations of the United States Securities and
Exchange Commission.
7.2 Put Option. If all or a portion of the Stock held in a Participant's
Account is subject at the time of distribution by the Trustee to restrictions
under any federal or state securities laws, any regulations thereunder, or any
agreement, such that the Stock distributed to the Participant cannot be freely
traded or is not readily tradeable within the meaning of 409(l)(1) and any
Treasury Regulations promulgated thereunder, the Employer shall issue a "put
option" to any Participant who receives a distribution of Stock. The put option
must permit the Participant to sell the distributed Stock to the Employer at any
time during two option periods, at the fair market value of the shares. The
first put option period is for at least sixty days beginning on the date of
distribution. The second put option period is for at least sixty days beginning
after the new determination of the fair market value of Stock by the Committee
(and notice to the Participant) in the following Plan Year. The put option must
provide that if the Participant exercises the put option, the Employer, or the
Plan if the Plan so elects, shall repurchase the Stock as follows:
(a) If the distribution is a total distribution, payment of the fair market
value of a Participant's distributed Stock shall be made either in a single sum
or substantially equal annual installments over a period of time not longer than
five years at the discretion of the Committee. The first installment shall be
paid not later than 30 days after the Participant exercises the put option. The
Plan shall pay a reasonable rate of interest and provide adequate security on
amounts not paid after 30 days.
(b) If the distribution is not a total distribution, the Plan shall pay the
Participant an amount equal to the fair market value of the Stock repurchased no
later than 30 days after the Participant exercises the put option.
(c) The Employer shall be required to purchase the Stock at the fair market
price established by the current bid and asked closing prices quoted by persons
independent of the Employer, (i) determined on the date the put option is
exercised if the exercise is by a disqualified person, as defined in Code
4975(e)(2), or (ii) in all other cases, determined as of the most recent
Valuation Date.
(d) The closing for purposes of consummating the transaction under this Section
shall be held at the place, on the date and at the time to which the selling
Participant and the Employer may agree, provided that the closing shall be held
not later than 30 days after the exercise of the put option by the selling
Participant.
7.3 Right of First Refusal and Voting Rights. Stock that is not
readily tradable on an established public market is subject to the
following rights:
(a) If Stock is distributed to a Participant from his or her
Account at a time when it is not readily tradable on an
established public market, the Stock is subject to a "right
of first refusal." The right of first refusal must provide
that, before any subsequent transfer, the shares must first
be offered for purchase in writing to the Employer, and then
to the Trust, at the then fair market value. A bona fide
written offer from an independent prospective buyer is
deemed to be the fair market value of the Stock for this
purpose. The Employer and the Committee (on behalf of the
Trust) have a total of 14 days to exercise the right of
first refusal on the same terms offered by a prospective
buyer. The Employer may require that a Participant entitled
to a distribution of Stock execute an appropriate stock
restriction agreement (evidencing the right of first
refusal) before receiving a certificate for Stock.
(b) Stock that is not readily tradable on an established public
market allocated to a Participant's Account will be voted by
the Trustee, according to the Participant's instructions
with respect to any corporate matter that involves the
voting of such shares. The Trustee will not vote shares of
Stock allocated to Participants' Accounts for which
instructions are not received from Participants. Stock
contributed to or acquired by the Plan that is not yet
allocated (including Stock held in a suspense account) will
be voted by the Trustee according to the Committee's
instructions with respect to any corporate matter that
involves the voting of such shares.
If the Employer and the Trustee agree, the Trustee may deal
directly with Participants on the pass-through of voting
rights. Otherwise, the Employer may do so and then transmit
to the Trustee the results of the voting instructions
received from Participants. In either case, management and
others may solicit and exercise Participants' voting rights
under the same proxy rules applicable to all stockholders.
The Employer will ensure that forms for voting instructions,
together with all information distributed to shareholders
regarding the exercise of voting rights, are furnished to
the Trustee and to Participants within a reasonable time
before the voting rights are to be exercised.
Shareholder rights, other than voting rights, which can be
exercised by Participants may be passed through to
Participants and exercised in a similar manner to voting
rights or will be exercised in such other manner as is
legally required. However, where the circumstances (such as
the lack of time or the lack of liquid funds to satisfy a
requirement to pay for additional shares of Stock) make it
impractical to pass such rights through to Participants and
no other specific legal requirement exists, the rights will
be exercised (or sold), unless otherwise directed by the
Committee, by the Trustee in a manner that the Trustee deems
prudent under the circumstances and otherwise consistent
with the fiduciary standards of ERISA.
7.4 Sale of Stock. The Participant may elect to sell, subject, however, to any
limitations discussed in this Article, all or any part of any securities
distributed.
7.5 Notice. Any offer, acceptance of an offer, or any other communication
required or permitted to be given to any Participant or the Trustee under this
Article shall be deemed to have been given if and when such notice, payment or
other communication is deposited in the United States Mail, first class, postage
prepaid, addressed to such person as is addressed currently in the records of
the Committee, and it shall be the obligation of each parson to notify the
Committee of any change of address.
7.6 Legend. The Committee shall have the right to require an appropriate legend
referring to the terms and conditions of this Article be placed on the
certificate representing the outstanding Stock.
***End of Article 7***
8
ARTICLE 8
ADMINISTRATION
8.1 Appointments of Committee. The Plan Sponsor shall appoint the Committee.
The Committee shall be the plan administrator. At least one member of the
Committee shall be a Director of the Plan Sponsor. The members of the Committee
shall be the named fiduciary of the Plan. Each such member of the Committee
shall serve at the pleasure of the Plan Sponsor and may resign at any time upon
written notice to the Plan Sponsor. The Committee may appoint any person or
entity to serve in more than one fiduciary capacity. The Plan Sponsor may
specify a period of time before such resignation can become effective. The Plan
Sponsor shall have the power to fill vacancies among the foregoing fiduciaries.
8.2 Organization and Operation of Committee. The Committee shall have at least
two members. The Committee may adopt such procedures as each deems desirable for
the conduct of its respective affairs and may appoint or employ a secretary or
other agents, any of whom may be, but need not be, an officer or employee of the
Employer. Any agent may be removed at any time by the person appointing or
employing him.
8.3 Information to be Made Available to Committee. To enable the Committee to
perform all of its respective duties under the Plan, the Employer shall provide
the Committee with access to the following information for each Employee:
(a) Name and Address,
(b) Social Security Number,
(c) Birth Date,
(d) Dates of commencement and termination of employment,
(e) Reason for termination of employment,
(f) Hours worked during each year,
(g) Annual Compensation, and
(h) Employer contributions and such other information as the Committee may
require.
To the extent the information is available in Employer records, the
Employer shall provide the Committee with access to information relating to any
contributions made to each Participant and any benefits received on behalf of
each Participant under the Plan. If such information is not available from the
Employer's records, the Committee shall obtain such information from the
Participants. The Committee and the Employer may rely on and shall not be liable
because of any information which an Employee provides, either directly or
indirectly. As soon as possible following any Participant's death, Disability,
retirement or other termination of employment, the Employer shall certify in
writing to the Committee such Participant's name and the date and reason for
such Participant's termination of employment.
8.4 Resignation and Removal of Committee Member; Appointment of Successors. Any
Committee member may resign at any time by giving written notice to the Plan
Sponsor, effective upon receipt of such notice. At any time any Committee member
may be removed from the Plan Sponsor without cause. As soon as practicable,
following the death, resignation or removal of any Committee member, the Plan
Sponsor shall appoint a successor by resolution. Written notice of the
appointment of a successor Committee member shall be given by the Employer to
the Trustee. Until receipt by the Trustee of such written notice, the Trustee
shall not be charged with knowledge or notice of such change.
8.5 Duties and Powers of Committee.
(a) In General. The Committee shall decide all questions arising in the
administration, interpretation and application of the Plan and Trust, including
all questions relating to eligibility, vesting, and distribution, except as may
be reserved under this Plan to the Employer or its Plan Sponsor. The Committee
may designate any person (other than Trustee) to discharge any of the
Committee's fiduciary responsibilities under the Plan (other than a Trustee
responsibility) and may employ one or more persons to render advice with regard
to any responsibility the Committee has under the Plan. The Committee from time
to time shall direct the Trustee concerning the payments to be made out of the
Trust Fund pursuant to this Plan. All notices, directions, information and other
communications to and from the Committee shall be in writing.
(b) Record Keeping. The Committee shall keep a record of all of the Committee's
proceedings and shall keep all such books of account, records, and other data as
may be necessary or advisable in its judgment for the administration of this
Plan and Trust, including records to reflect the affairs of this Plan, to
determine the amount of vested and/or forfeitable interest of the respective
Participants in the Trust Fund, and to determine the amount of all benefits
payable under this Plan. The Committee shall maintain separate Accounts for each
Participant. Subject to the requirements of law, any person dealing with the
Committee may rely on, and shall incur no liability in relying on, a certificate
or memorandum in writing signed by the Committee as evidence of any action taken
or resolution adopted by the Committee.
(c) Reporting and Disclosure. The Committee shall be responsible for all
applicable reporting and disclosure requirements. The Committee shall prepare,
file with the United States Secretary of Labor, the United States Secretary of
the Treasury, or the Pension Benefit Guaranty Corporation, when applicable, and
furnish to Participants and Beneficiaries, when applicable, the following:
(i) Summary plan description;
(ii) Plan description;
(iii) Description of modifications and changes;
(iv) Annual Report:
(v) Terminal and supplementary reports;
(vi) Registration Statement; and
(vii) Any other return, report or document required by law.
(d) Statement of Benefits Accrued and Vested. The Committee shall furnish any
Participant or Beneficiary who so requests in writing a statement indicating, on
the basis of the latest available information, such Participant's total Account
and the vested portion thereof, if any, and shall furnish such a written
statement to any Participant who terminates employment with the Employer during
the Plan Year and who is entitled to the vested portion of his or her Accounts
under the Plan as of the end of the Plan Year, taking into consideration any
benefits which have been paid with respect to such Participant during the Plan
Year. The statement shall be an individual statement and shall contain the
information required in the Annual Registration Statement which the Committee is
required to file with the Secretary of the Treasury.
(e) Inspection of Documents. The Committee is to make available for inspection
copies of the Plan description in the latest Annual Report and the agreements
under which the Plan was established or operated. In addition, the Committee is
to comply with every other requirement imposed on him or her by law.
(f) Claims Procedure.
(i) Filing and Initial Determination of Claim. Any Participant or Beneficiary
may file a claim for a plan benefit to which such Participant believes such
Participant is entitled. Such a claim must be in writing and delivered to the
Committee in person or by certified mail, postage prepaid. Within 60 days after
receipt of such claim, the Committee shall deliver personally or send to the
claimant by certified mail, postage prepaid, notice of the granting or denying,
in whole or in part, of such claim. The Committee shall have full discretion to
deny or grant a claim in whole or in part.
(ii) Duty of Committee Upon Denial of Claim. The Committee shall provide to
every claimant who is denied a claim for benefits written notice setting forth
in a manner calculated to be understood by the claimant:
(1) The specific reason or reasons for the denial;
(2) 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 is
necessary; and
(4) An explanation of the Plan's claim review procedure.
(iii) Request for Review of Claim Denial. Within 60 days after receipt by
the claimant of written notification of the denial in whole or in part of his or
her claim, the claimant, upon written application to the Committee in person or
by certified mail, postage prepaid, may request a review of such denial, may
review pertinent documents, and may submit issues and comments in writing. Upon
its receipt of the request for review, the Committee shall notify the Plan
Sponsor of the request.
(iv) Claims Reviewer. Upon its receipt of notice of a request for review, the
Plan Sponsor shall appoint a person other than a Committee member to be the
claims reviewer. The Committee shall deliver to the claims reviewer all
documents submitted by the claimant and all other documents pertinent to the
review. The claims reviewer shall make a prompt decision on the review. The
decision on review 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. The
decision on review shall be made no later than 60 days after the Committee's
receipt of a request for review, unless special circumstances require an
extension of time for processing, in which case a decision shall be rendered not
later than 120 days after receipt of the request for review.
(v) Legal Remedy. After exhaustion of the claims procedures provided under this
Plan, nothing shall prevent any person from pursuing any other legal remedy.
(g) Funding Policy. The policy of the Employer is that this Plan shall be
funded with Employer contributions. The Committee shall determine the Plan's
short-term and long-term financial needs and regularly communicate these
requirements to the appropriate persons. To the extent that Stock are purchased
with proceeds of an exempt loan as provided under Section 9.3(g), the policy of
the Committee shall require that the Employer contribute sufficient funds to
enable the Trustee to pay the principal and interest then due on such loan. The
Committee will determine whether the Plan has a short-term need for liquidity,
(for example, to purchase Stock or repay the amount due and owing on an exempt
loan) or whether liquidity is a long-term goal and investment goal is a more
current need. The Committee shall communicate such information to the Trustee so
that investment policy can be coordinated with the Plan's needs.
(h) Bonding of Fiduciaries and Plan Officials. The Committee shall procure
bonds for every fiduciary of the Plan and every plan official who handles funds
of the Plan, in an amount not less than 10% of the amount of funds handled and
in no event less than $ 1,000, except the Committee shall not be required to
procure such bonds if:
(1) The person is excepted from the bonding requirement by law, or
(2) The Secretary of Labor exempts the Plan from the bonding requirements.
The bonds shall conform to the requirements of law.
8.6 Advice to Designated Fiduciaries. Any fiduciary designated by the Committee
may employ with the consent of the Committee one or more persons to render
advice as regards any responsibility of such designated fiduciary under the
Plan.
8.7 Majority Control. The Committee shall act by a majority of its members then
in office, either at a meeting or by written consent without a meeting.
***End of Article 8***
9
ARTICLE 9
POWERS AND DUTIES OF THE TRUSTEE
9.1 Establishment and Acceptance of Trust. The Trustee shall receive any
contributions paid to it in cash or in Stock. All contributions so received
together with the income therefrom shall be held, managed, and administered in
trust pursuant to the terms of this Plan. The Trustee hereby accepts the Trust
created hereunder and agrees to perform the duties under this Plan on its part
to be performed.
9.2 Investments of Trust Funds. Any cash received by the Trustee for the
Account of any Participant or credited to the Account of any Participant shall
be invested primarily in Stock. Subject to the direction of the Committee, the
Trustee is authorized to invest and hold up to 100% of the Trust assets in
Stock. The Trust may purchase Stock from the Employer or from any other source,
and such Stock may be outstanding, newly issued or treasury securities. All such
purchases must be made at fair market value. The determination of fair market
value shall be in accordance with Section 4.9, unless regulations subsequently
promulgated by the Secretary of Labor with respect to ERISA 3(18) provide
otherwise, in which case a determination of fair market value shall be made in
accordance with such regulations.
Any cash received by the Trustee shall be applied first to meet any current
obligation of the Trust Fund incurred for purchase of Stock (i.e., an exempt
loan as provided in Section 9.3(g)) and if the Committee so directs may
thereafter be applied to purchase Stock. If the Committee fails to instruct the
Trustee as to the manner in which the funds held in the Trust Fund should be
invested, then the Trustee may invest the entire Trust Fund in a savings
account, certificates of deposit, money market funds or any other similar
investment, including depositing such cash with the Trustee bank if a bank
serves as Trustee hereunder, or any other investment permitted under Section
9.3(a), other than Stock, provided such investment or the retention of such
investment is prudent under all the facts and circumstances then prevailing.
9.3 Powers of Trustee. The Trustee shall have the following powers and
authority in the administration of the Trust to be exercised in accordance with
and subject to the provisions of Sections 9.2 and 9.4.
(a) Purchase of Property. To invest as directed by the Committee all or any
portion of the Trust Fund in Stock and, unless otherwise directed by the
Committee to invest in Stock, to invest the balance, if any, of the Trust Fund
in any common or preferred stock, including shares or certificates of
participation issued by regulated investment companies or trusts, shares or
units in qualified common trust funds, pooled funds, or pooled investment funds
of an insurance Employer qualified to do business in a state, bonds (including
United States Retirement Plan Bonds), insurance contracts, mortgages, notes or
other property of any kind, real or personal, or in the absence of any direction
from the Committee concerning the method of investing Trust Funds, to invest the
entire Trust Fund as a prudent man would do under like circumstances, taking
into account the special purposes of the Plan.
(b) Retention and Deposit of Funds. To retain in cash so much of the Trust Fund
as the Committee directs to satisfy liquidity needs of the Plan; to deposit any
cash held in the Trust Fund in a bank account without liability for the highest
rate of interest available, including a bank acting as Trustee.
(c) General Authority. To manage, sell, contract to sell, grant options to
purchase, convey, exchange, transfer, abandon, improve, repair, insure, lease
for any time even though commencing in the future, or extending beyond the term
of the Trust, and otherwise deal with all property, real or personal, in such
manner, for such consideration, and on such terms and conditions as the Trustee
shall decide.
(d) Hold Title. To cause any securities or other property to be registered and
held in its name as Trustee, or in the name of one or more of its nominees,
without disclosing the fiduciary capacity, or to keep the same in unregistered
form payable to bearer.
(e) Settle Disputes. To abandon, compromise, contest and arbitrate claims and
demands; to institute, compromise and defend actions at law (but without
obligation to do so); in connection with such powers, to employ counsel as the
Trustee shall deem advisable; and to exercise such powers all at the risk and
expense of the Trust Fund.
(f) Distribute Trust Property. To credit and distribute the Trust as directed
by the Committee. The Trustee shall not be obliged to inquire as to whether any
payee or distributes is entitled to any payment or whether the distribution is
proper within the terms of the Plan, or as to the manner of making any payment
or distribution. The Trustee shall be accountable only to the Committee for any
distribution made by it in good faith on the order or direction of the
Committee.
(g) Incur Indebtedness. To borrow money in such amounts as directed by the
Committee, to assume indebtedness, extend mortgages and encumber by mortgage or
pledge, all as directed by the Committee.
(h) Vote Stock. To vote in person or by proxy in the manner
directed by the Committee (or the Participants at a time when
the Stock is not readily tradable on an established public
market) any shares of stock or rights held by the Trust Fund;
to participate in any voting trusts; to participate in and to
exchange securities or other property in reorganization,
liquidation, or dissolution of any corporation, the
securities of which are held in the Trust Fund, and to
exercise the sale of stock subscriptions or conversions
rights.
(i) Withhold Distribution. To retain (except as provided in Section 9.3(i)) any
funds or properties subject to any dispute without liability for the payment of
interest, and to decline to make payment or delivery of the funds or property
until final adjudication is made by a court of competent jurisdiction.
(j) Pay Obligations. To pay any amount due on any loan or advance made to the
Trust Fund, to charge against and pay from the Trust Fund all taxes of any
nature levied, assessed, or imposed upon the Trust Fund, and to pay all
reasonable expenses and attorney fees necessarily incurred by the Trustee with
respect to any of the foregoing matters.
(k) File Tax Returns. To file any tax return required of the Trustee.
(l) Prepare Reports and Statements. To furnish to the Employer and the
Committee an annual statement of account showing the conditions of the Trust
Fund and all investments, receipts, disbursements and other transactions
effected by the Trustee during the Plan Year covered by the statement and also
stating the asset, of the Trust Fund held at the end of the Plan Year, which
amount shall be conclusive on all persons, including the Employer and the
Committee, except as to any act or transactions which the Employer or Committee
takes exception or makes objections to in writing 90 days after the receipt of
the account, or for which ERISA authorizes a longer period of time within which
to object.
9.4 Diversification and Prudence Requirements. Except in making investments or
reinvestments in Stock of the Employer, the Trustee shall diversify the
investments of the Plan to minimize the risk of large losses, unless under the
circumstances, it is clearly prudent not to do so. The Trustee shall act with
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims. The prudence requirement of the preceding sentence to the extent it
requires diversification shall not be violated by the acquisition or holding of
Stock.
9.5 Payment of Compensation, Expenses and Taxes. A fiduciary shall be paid such
reasonable compensation as shall from time to time be agreed upon in writing;
however, a fiduciary who already receives full-time pay from the Employer shall
receive no compensation from the Plan. A fiduciary shall be reimbursed for any
reasonable expenses, including reasonable counsel fees, incurred by it in the
administration of the Trust. Such compensation and expenses shall be charged
against and paid from the Trust Fund, if not paid by the Employer.
9.6 Appointment, Resignation, Removal and Substitution of Trustee. The Plan
Sponsor by resolution shall appoint a Trustee or Trustees, each of which shall
hold office until resignation or removal by the Plan Sponsor. The Trustee may
resign at any time upon 30 days written notice to the Employer. The Trustee may
be removed at any time by the Employer upon 60 days written notice to the
Trustee with or without cause. Upon resignation or removal of the Trustee, the
Employer, by action of its Plan Sponsor, shall appoint a successor Trustee which
shall have the same powers and duties as are conferred upon the Trustee
appointed under this Plan. Upon acceptance of such appointment by the successor
Trustee, the Trustee shall assign, transfer. and pay over to such successor
Trustee the funds and properties then constituting the Trust Fund. If the
Trustee is an individual, death shall be treated as a resignation, effective
immediately. If any corporate Trustee at any time shall be merged, or
consolidated with, or shall sell or transfer substantially all of its assets and
business to another corporation, whether organized under federal or state laws,
or shall be reorganized or reincorporated in any manner, then the resulting or
acquiring corporation shall be substituted for such corporate Trustee without
the execution of any instrument and without any action upon the part of the
Employer, any Participant or Beneficiary, or any other person having or claiming
to have an interest in the Trust Fund or under the Plan.
9.7 Appointment of Trustee--Acceptance In Writing. The Trustee shall accept its
appointment as soon as practicable by executing this Plan or by delivering a
signed document to the Employer which shall incorporate by reference all of the
terms and conditions of this Plan, a copy of which shall be sent to the
Committee by the Trustee. The Plan Sponsor shall appoint a new Trustee if the
Trustee fails to accept its appointment in writing.
9.8 Receipt of Contributions. The Trustee shall not be responsible in any way
for the collection of contributions provided for under the Trust. The Trustee
shall be responsible only for such sums that it actually receives as Trustee.
The Trustee shall accept and hold under the Trust such contributions of money on
behalf of the Employer and Participants as it may receive from time to time from
the Employer. All such contributions shall be accompanied by written
instructions from the Employer accounting for the manner in which they are to be
credited.
9.9 Returns and Reports. The Employer shall furnish to the Trustee, and the
Trustee shall furnish to the Employer, such information relevant to the Trust as
may be required under the Code and ERISA. The Trustee shall keep such records,
make such identification, and file with the Internal Revenue Service and the
Secretary of Labor such returns and other information concerning the Trust as
may be required of it under the Code and ERISA.
***End of Article 9***
10
ARTICLE 10
CONTINUANCE, TERMINATION AND
AMENDMENT OF PLAN AND TRUST
10.1 Termination of Plan. The expectation of the Employer is to continue this
Plan indefinitely, but the continuance of the Plan is not assumed as a
contractual obligation by the Employer, and the right is reserved to the
Employer, by proper action of its Plan Sponsor, to terminate this Plan in whole
or part at any time. The termination of this Plan by the Employer in no event
shall have the effect of revesting any part of the Trust Fund in the Employer,
except within the limitations of Section 3.4 and except as to the unallocated
balance held in the suspense account under Section 4.4 if permitted under the
Code and ERISA. If the Plan is terminated, Stock acquired with the proceeds of
an exempt loan, as provided in Section 9.3(g), shall after the Trustee repays
the loan continue to be subject to the provisions of Treasury Regulation
54.4975-7(b)(4), (10), (11) and (12) relating to any put, call or other
options and to buy-sell or similar arrangements. The Plan shall be terminated
automatically in the event of the dissolution, consolidation, or merger of the
Employer, or the sale by the Employer of substantially all of its assets, if the
resulting successor corporation or business entity shall fail to adopt the Plan
and Trust under Section 10.3.
10.2 Termination of Trust. The Trust created by execution of this Agreement
shall continue in full force and effect for such time as may be necessary to
accomplish the purposes for which it is created, unless sooner terminated and
discontinued by the Plan Sponsor. Notice of such termination shall be given to
the Trustee by the Committee in the form of an instrument in writing executed by
the Employer pursuant to the action of the Plan Sponsor, together with a
certified copy of the resolution of the Plan Sponsor to that effect.
10.3 Continuance of Plan and Trust by Successor Business. A successor business
may continue this Plan and Trust by proper action of the proprietor or partners,
if not a corporation, and, if a corporation, by resolution of its Plan Sponsor
and by appointing a trustee (which may be the Trustee), plan administrator, or
committee as though the former Trustee or Committee had resigned, and by
executing a proper supplemental agreement to this Plan and Trust with the
Trustee. Within 90 days from the effective date of such dissolution,
consolidation, merger, or sale of assets of the Employer, if such successor
business does not adopt and continue this Plan and Trust, this Plan shall be
terminated automatically as of the end of such 90-day period.
10.4 Merger, Consolidation or Transfer of Assets or Liabilities of the Plan. The
Plan Sponsor may merge or consolidate this Plan with any other Plan and may
transfer the assets or liabilities of the Plan to any other Plan if such
Participant in the Plan (if the Plan then terminated) would receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or
greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan then had
terminated). However, this Plan shall not merge or consolidate with, and assets
will not be transferred from this Plan to any other Plan which provides for
distributions of accrued benefits in the form of a life annuity, a qualified
joint survivor annuity ("QJSA") or a preretirement survivor annuity ("QPSA"),
unless this Plan is amended at or prior to such merger, consolidation or
transfer to permit a life annuity, a QJSA and/or a QPSA pursuant to the then
applicable requirements under the Code.
10.5 Distribution of Trust Fund on Termination of Trust. If the Trust is
terminated under this Article, the Trustee shall determine the value of the
Trust Fund and of the respective interests of the Participants and Beneficiaries
as of the business day next following the date of such termination. The value of
the Account of each respective Participant or Beneficiary in the Trust Fund
shall be vested in its entirety as of the date of the termination of the Plan.
The Trustee then shall transfer to each Participant or Beneficiary the net
balance of the Participant's Account; however, if the Employer maintains another
defined contribution plan at the time of the termination, the Trustee shall
transfer the Participant's Accounts to an account of the Participant under the
other defined contribution plan of the Employer if the Participant does not
consent in writing to an immediate distribution.
10.6 Suspension of Contributions. If the Plan Sponsor decides it is impossible
or inadvisable to continue to make contributions, it shall have the power by
appropriate resolution or decision to suspend contributions to the Plan.
Suspension shall be a temporary cessation of contributions which shall not
constitute or require a formal termination of the Plan and shall not preclude
contributions. After the date of suspension of contributions, the Plan and Trust
shall remain in force. The Committee shall deliver to the Trustee a copy of the
Plan Sponsor's resolution to suspend contributions.
10.7 Amendments to Plan and Trust. At any time the Employer may amend this Plan
and Trust by action of its Plan Sponsor, provided that no amendment shall cause
the Trust Fund to be diverted to purposes other than for the exclusive benefit
of the Participants and their Beneficiaries; and provided further that no
amendment shall: (a) decrease the percentage of the interest of any Participant
which has become vested, (b) affect the schedule of vesting with respect to any
Participant who has at least three Years of Service as determined under Section
1.39, without such Participant's written consent, (c) discriminate in favor of
employees who are officers, shareholders or Highly Compensated Employees, or
(d) amend provisions applicable to the allocation of any Stock to a
Participant's Account, including without limitation, certain provisions of
Article 4 "Allocations to Accounts," and Section 1.7 "Compensation," more
frequently than once every six months, other than to comport with changes in the
Code, ERISA, or the rules thereunder. Except as restricted under (d) of this
Section, the Plan and Trust may be amended at any time to conform to the
provisions and requirements of federal and state law with respect to employees'
trusts or any amendments to such laws or regulations or rulings issued pursuant
to such laws.
***End of Article 10***
11
ARTICLE 11
RELATED GROUP
11.1 Adoption of the Plan. Any member of the Related Group which the Plan
Sponsor shall designate and declare eligible to adopt and participate in the
Plan may adopt and become a party to this Plan and Trust, subject to and upon
such terms and conditions as the Plan Sponsor may prescribe, including but not
limited to:
(a) The instruments to be executed and delivered by such member of the Related
Group to the Trustee and to the Plan Sponsor;
(b) The extent to which the Plan Sponsor shall act as agent or representative
of such member of the Related Group under the Plan; and
(c) Authorization to the Committee to act for such member of the Related Group
and its employees who will become Participants under the Plan.
The Plan shall be effective with respect to each such adopting member of the
Related Group and its employees on such date as shall be approved by the Plan
Sponsor and specified in the instruments executed by such member of the Related
Group adopting the Plan. Any such member of the Related Group need not sign or
execute the original or the amended Plan and Trust documents. If any such member
of the Related Group adopts the- Plan under this Section, such member and its
employees shall be governed and bound by all the terms and provisions of the
Plan, subject to the terms and conditions upon which such member of the Related
Group adopted the Plan.
11.2 Withdrawal From Plan. Any Employer (other than the Plan Sponsor) may
withdraw from the Plan effective at the end of any calendar quarter by giving at
least 60 days prior written notice to the Plan Sponsor and the Trustee. Upon any
such withdrawal the Trustee shall value the assets of the Trust Fund as of the
date of such withdrawal, and the Trustee shall set apart that portion of the
Trust Fund which, as certified by the Committee, is attributable to such
withdrawing Employer. That portion of the Trust Fund so set apart shall continue
to be held by the Trustee in trust under the terms and provisions of the Plan
and Trust as though such withdrawing Employer had entered into its own separate
trust agreement with the Trustee. Such withdrawing Employer shall be deemed to
have adopted the Plan as its own separate plan and shall have and may exercise
all of the rights, powers, and authorities of the Plan Sponsor under the Plan
and Trust with respect to its separate plan and trust. Upon withdrawal of a
Employer from the Plan, it shall cease to be a Employer under this Plan and
shall not be eligible again to adopt and participate in this Plan unless it
again is designated as eligible under Section 11.1.
11.3 Termination of Participation by the Plan Sponsor. The Plan Sponsor, in its
absolute discretion, may terminate the participation of any member of the
Related Group in the Plan, effective at the end of any calendar quarter, by
giving at least 60 days written notice to such member of the Related Group, the
Committee, and the Trustee. Any such termination of participation by the Plan
Sponsor shall have the same effect as a voluntary withdrawal by an Employer
under Section 11.2 and the procedures set forth in and the provisions of such
Section shall be applicable.
***End of Article 11***
12
ARTICLE 12
MISCELLANEOUS
12.1 Participant's Rights. Except as may be specifically provided for by law,
neither the establishment of the Trust hereby created, nor any modification
thereof, nor the creation of any fund or Account, nor the payment of any
benefits, shall be construed as giving to any Participant or other person any
legal or equitable right against the Employer, or any officer or employee
thereof, or the Trustee, except as herein provided.
12.2 Employer's Obligations. The adoption and continuance of the Plan shall not
be deemed to constitute a contract between the Employer and any Employee or
Participant, nor to be a consideration for, or an inducement or condition of,
the employment of any person. Nothing in this Plan shall be deemed to give any
Employee or Participant the right to be retained in the employ of the Employer,
or to interfere with the right of the Employer to discharge any Employee or
Participant at any time, nor shall it be deemed to give the Employer the right
to require the Employee or Participant to remain in its employ, nor shall it
interfere with the right of any Employee or Participant to terminate his or her
employment at any time.
12.3 Benefits to be Provided Solely from the Trust Fund. All benefits payable
under this Plan shall be paid or provided solely from the Trust Fund, and the
Employer assumes no liability or responsibility for payment of benefits.
12.4 Receipt of Benefits by Fiduciaries. Nothing shall prohibit any fiduciary
from receiving any benefit to which he may be entitled as a Participant or
Beneficiary in the Plan, if such benefit is computed and paid on a basis which
is consistent with the terms of the Plan as applied to all other Participants
and Beneficiaries. The determination of any matters affecting the payment of
benefits to any fiduciary other than a Committee member shall be made by the
Committee. If the Committee is an individual, the determination of any matters
affecting the payment of benefits to the Committee shall be made by a temporary
Committee who shall be appointed by the Board for such purpose. If the Committee
is a group of individuals, the determination of the matters affecting the
payment of benefits to any individual Committee member shall be made by the
remaining Committee members without the vote of such individual Committee
member. If the remaining Committee members are unable to agree on any matters
affecting the payment of such benefits, the Board shall appoint a temporary
Committee to decide the matter.
12.5 Service by Fiduciaries and Disqualified Persons. Nothing in this Plan shall
prohibit anyone from serving as a fiduciary in addition to being an officer,
employee, agent, or other representative of a disqualified person, as defined in
Code 4975(e).
12.6 Assignment or Alienation. Subject to Code 414(p) (relating to qualified
domestic relations orders), neither a Participant nor a Beneficiary may
voluntarily or involuntarily anticipate, assign, or alienate (either at law or
in equity) any benefit provided under the Plan, and the Trustee shall not
recognize any such anticipation, assignment, or alienation. Furthermore, a
benefit under the Plan shall not be subject to attachment, garnishment, levy,
execution, or other legal or equitable process.
12.7 Delegation of Authority by Employer. Whenever the Employer under the terms
of this Agreement is permitted or required to do or perform any act or matter or
thing, the same shall be done and performed only by an officer duly authorized
by its Board of Directors.
12.8 Notices from Participants to be Filed with Committee. Whenever a provision
is made in the Plan that a Participant may exercise any option or election or
designate any Beneficiary, the action of each Participant shall be evidenced by
a written notice signed by the Participant and delivered to the Committee in
person or by certified mail. If a form is furnished by the Committee for such
purpose, a Participant shall give written notice of his or her exercise of any
option or election or of his or her designation of any Beneficiary on a form
provided for such purpose. Written notice shall not be effective until received
by the Committee.
12.9 Construction of Agreement. This Plan and Trust shall be construed, whenever
possible, to be in conformity with the requirements of the Code and ERISA. With
respect to persons subject to Section 16 of the 1934 Act, transactions under
this Plan and Trust are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the 1934 Act. To the extent any provision of
the Plan and Trust or action by the Committee, Committee or Trustee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee. To the extent not in conflict with the
preceding sentences, the construction and administration of the Plan and Trust
shall be governed by, and its validity determined under, the laws of the state
of Colorado.
12.10 Titles. The titles of paragraphs are included for convenience and not
to be considered in the construction of the provisions hereof.
12.11 Severability. If any provision of this Plan and Trust is illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions. On the contrary, such remaining provisions shall be fully
severable, and this Plan and Trust shall be construed and enforced as if such
illegal or invalid provisions never have been inserted in this Plan and Trust.
12.12 Counterparts. This Plan and Trust may be executed in any number of
counterparts, each of which shall be deemed an original, and such counterparts
shall constitute one instrument which may be sufficiently evidenced by one
counterpart.
12.13 Plan for Exclusive Benefit of Participants; Reversion Prohibited. This
Plan and Trust has been established for the exclusive benefit of the
Participants and their Beneficiaries. Under no circumstances shall any funds
contributed to or held by the Trustee at any time revert to or be used or
enjoyed by the Employer except as set forth in Section 3.4 and otherwise to the
extent permitted by law.
12.14 Gender, Singular and Plural. Unless the context requires otherwise,
words denoting the singular may be construed as denoting the plural, and words
of the plural may be construed as denoting the singular, and the masculine
gender shall include the feminine.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
document by their duly authorized officers as of this 29th day of January, 1994.
Attest: SCOTT'S LIQUID GOLD-INC.
EMPLOYER
/s/ Carolyn J. Anderson By:
/s/ Barry Shepard
Carolyn J. Anderson Barry Shepard
Executive Vice President, Treasurer & Assistant
Chief Operating Officer, Secretary
& Corporate Secretary
Date:
6/29/94
Attest: SLG CHEMICALS, INC.
/s/ Carolyn J. Anderson By:
/s/ Barry Shepard
Title:
Treasurer
Date:
6/29/94
Attest: SLG PLASTICS, INC.
/s/ Carolyn J. Anderson By: /s/ Barry Shepard
Title:
Treasurer
Date:
6/29/94
Attest: SLG TOUCH-A-LITE, INC.
/s/ Carolyn J. Anderson By:
/s/ Barry Shepard
Title:
Treasurer
Date:
6/29/94
Attest: AQUAFILTER CORPORATION
/s/ Carolyn J. Anderson By:
/s/ Barry Shepard
Title:
Treasurer
Date:
6/29/94
Attest: ADVERTISING PROMOTIONS
INCORPORATED
/s/ Carolyn J. Anderson By:
/s/ Barry Shepard
Title:
Treasurer
Date:
6/29/94
Attest: NEOTERIC COSMETICS, INC.
/s/ Carolyn J. Anderson By: /s/ Barry Shepard
Title:
Treasurer
Date:
6/29/94
BARRY SHEPARD
CAROLYN J. ANDERSON
MARK E. GOLDSTEIN
TRUSTEE
By: /s/ Barry Shepard
Barry Shepard
Date:
6/29/94
By: /s/ Carolyn J. Anderson
Carolyn J. Anderson
Date:
29 June 1994
By: /s/ Mark E. Goldstein
Mark E. Goldstein
Date:
6/29/94
