<PAGE> 1
As filed with the Securities and Exchange Commission on August 18, 1999
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
THE SEAGRAM COMPANY LTD.-- LA COMPAGNIE SEAGRAM LTEE
(Exact name of Registrant as
specified in its charter)
CANADA
(State or other jurisdiction of
incorporation or organization)
NONE
(I.R.S. Employer
Identification Number)
1430 PEEL STREET
MONTREAL, QUEBEC, CANADA H3A 1S9
(Address, including zip code, of Registrant's principal executive office)
POLYGRAM HOLDING, INC. DEFERRED SAVINGS AND INVESTMENT PLAN FOR EMPLOYEES
THE SEAGRAM COMPANY LTD. 1996 STOCK INCENTIVE PLAN
(Full title of the Plans)
------------------
ROBERT W. MATSCHULLAT
JOSEPH E. SEAGRAM & SONS, INC.
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(212) 572-7000
(Name, address, including zip code, and telephone number,
including area code, of Registrant's agent for service
and authorized representative of Registrant in the United
States)
------------------
COPIES TO:
GEORGE R. KROUSE, JR, ESQ.
SARAH E. COGAN, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
------------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE FEE(1)
<S> <C> <C> <C> <C>
Common shares without
nominal or par value(2)(3).......... 25,200,000 $49.80 $1,254,960,000 $348,879
=============================================================================================================================
</TABLE>
(1) Pursuant to Rule 457 under the Securities Act of 1933 the proposed maximum
offering price per share and the registration fee relating to the common
shares being registered have been based on the average of the high and low
prices of the common shares reported on the New York Stock Exchange
Composite Tape on August 13, 1999.
(2) The shares are issuable pursuant to the respective plans as follows:
PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees
- 200,000 shares; The Seagram Company Ltd. 1996 Stock Incentive Plan -
25,000,000 shares.
(3) There is also being registered hereunder such additional undetermined
amount of common shares as may be needed as a result of stock dividends,
stock splits or other similar adjustments of the outstanding common
shares.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plans described herein.
<PAGE> 3
PART I
ITEM 1. PLAN INFORMATION.
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with this Registration Statement.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
by the Company are hereby incorporated in this Registration Statement by
reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998, as amended.
(2) The Company's Quarterly Report on Form 10-Q for the quarterly
periods ended September 30, 1998, December 31, 1998 and March
31, 1999.
(3) The Company's Current Reports on Form 8-K dated July 20, 1998,
August 4, 1998, August 25, 1998, as amended, September 1,
1998, as amended, November 10, 1998, November 16,1998,
November 24, 1998, December 6, 1998, December 9, 1998,
December 10, 1998, as amended, December 14, 1998, April 7,
1999 and May 13, 1999.
(4) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act, since June 30, 1998.
(5) The PolyGram Holding, Inc. Deferred Savings and Investment
Plan for Employees Annual Report on Form 11-K for the fiscal
year ended December 31, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 124, Subsections (1) through (4), of the Canada Business
Corporations Act (the "Act") provides as follows:
"124. Indemnification.--(1) Except in respect of an action by or on
behalf of the corporation or body corporate to procure a judgment in
its favour, a corporation may indemnify a director or officer of the
corporation, a former director or officer of the corporation or a
person who acts or acted at the corporation's request as a director or
officer of a body corporate of which the corporation is or was a
shareholder or creditor, and his heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been a
director or officer of such corporation or body corporate, if
(a) he acted honestly and in good faith with a view to
the best interests of the corporation; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing that his conduct
was lawful.
(2) Indemnification in derivative actions.--A corporation may with the
approval of a court indemnify a person referred to in subsection (1) in
respect of an action by or on behalf of the corporation or body
corporate to procure a judgment in its favour, to which he is made a
party by reason of being or having been a director or an officer of the
corporation or body corporate, against all costs, charges and expenses
reasonably incurred by him in connection with such action if he
fulfills the conditions set out in paragraphs (1)(a) and (b).
(3) Indemnity as of right.--Notwithstanding anything in this section, a
person referred to in subsection (1) is entitled to indemnity from the
corporation in respect of all costs, charges and expenses reasonably
incurred by him in connection with the defence of any civil, criminal
or administrative action or proceeding to which he is made a party by
reason of being or having been a director or officer of the corporation
or body corporate, if the person seeking indemnity
(a) was substantially successful on the merits in his
defence of the action or proceeding; and
(b) fulfills the conditions set out in paragraphs (1)(a)
and (b).
(4) Directors' and officers' insurance.--A corporation may purchase and
maintain insurance for the benefit of any person referred to in
subsection (1) against any liability incurred by him
(a) in his capacity as a director or officer of the
corporation, except where the liability relates to
his failure to act honestly and in good faith with a
view to the best interests of the corporation, or
(b) in his capacity as director or officer of another
body corporate where he acts or acted in that
capacity at the corporation's request, except where
the liability relates to his failure to act honestly
and in good faith with a view to the best interests
of the body corporate."
Sections 7.02 and 7.03 of the General By-Laws of the Company provide as
follows:
"Section 7.02--Indemnity. Without in any manner derogating from or
limiting the mandatory provisions of the Act but subject to the
conditions contained therein, the Corporation shall indemnify a
director or officer of the Corporation, a former director or officer of
the Corporation, or a person who acts or acted at the Corporation's
request as a director or officer of a body corporate of which the
Corporation is or was a shareholder or creditor, and his heirs and
legal representatives, against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment,
reasonably incurred by him in respect of any civil, criminal or
administrative action or proceeding to which he is made a party by
reason of being or having been a director or officer of the Corporation
or such body corporate, if
(a) he acted honestly and in good faith with a view to
the best interests of the Corporation; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he
has reasonable grounds for believing that his conduct
was lawful.
Section 7.03--Insurance. Subject to the limitations contained in the
Act, the Corporation may purchase and maintain such insurance for the
benefit of the persons mentioned in Section 7.02, as the board may from
time to time determine."
<PAGE> 5
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The directors and officers of the Registrant are covered by insurance
policies indemnifying against certain liabilities, including liabilities arising
under the Securities Act, which might be incurred by them in such capacities and
against which they cannot be indemnified by the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4(a) Articles of Amalgamation dated February 1, 1995 between the
Company and Centenary Distillers Ltd. (incorporated by
reference to Exhibit 3(a) of the Company's Annual Report on
Form 10-K for the fiscal year ended January 31, 1995), as
amended by Certificate and Articles of Amendment dated May 31,
1995 (incorporated by reference to Exhibit 3(a) of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 30, 1995)
4(b) General By-Laws of the Company, as amended (incorporated by
reference to Exhibit 3(b) to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 1996)
4(c) PolyGram Holding, Inc. Deferred Savings and Investment Plan
for Employees
4(d) The Seagram Company Ltd. 1996 Stock Incentive Plan
5 Opinion of Goodman Phillips & Vineberg
23(a) Consent of PricewaterhouseCoopers LLP, independent
accountants, with respect to the financial statements of The
Seagram Company Ltd.
23(b) Consent of KPMG Accountants N.V., independent accountants,
with respect to the financial statements of PolyGram N.V.
23(c) Consent of Guttierrez & Co., independent accountants, with
respect to the financial statements of the PolyGram Holding,
Inc. Deferred Savings and Investment Plan for Employees
23(d) Consent of Goodman Phillips & Vineberg (included in Exhibit 5)
24 Power of Attorney
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
<PAGE> 6
(iii)To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information set forth in this
Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and each filing of
each plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
(6) To submit the PolyGram Holding, Inc. Deferred Savings and
Investment Plan for Employees, and any amendment thereto, to the Internal
Revenue Service (the "IRS") in a timely manner and will make all changes
required by the IRS in order to qualify such Plan under Section 401 of the
Internal Revenue Code.
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Seagram
Company Ltd. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on the 18th day of
August, 1999.
THE SEAGRAM COMPANY LTD.
(Registrant)
By *
-------------------------------------
Edgar Bronfman, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities at The Seagram Company Ltd. indicated on the 18th day of August,
1999.
PRINCIPAL EXECUTIVE OFFICER:
*
- -------------------------------------------------
(Edgar Bronfman, Jr.) Director, President and
Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER AND AGENT FOR SERVICE:
/s/ Robert W. Matschullat
- -------------------------------------------------
(Robert W. Matschullat) Director, Vice Chairman
and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Robert W. Matschullat
- -------------------------------------------------
(Robert W. Matschullat) Director, Vice Chairman
and Chief Financial Officer
DIRECTORS:
Edgar M. Bronfman*
Charles R. Bronfman*
Samuel Bronfman II*
Matthew W. Barrett*
Laurent Beaudoin*
Cornelis Boonstra*
Richard H. Brown*
William G. Davis*
Andre Desmarais*
Barry Diller*
Michele J. Hooper*
David L. Johnston*
E. Leo Kolber*
Marie-Josee Kravis*
Samuel Minzberg*
John S. Weinberg*
<PAGE> 8
* By signing his name hereto, Daniel R. Paladino signs this Registration
Statement on behalf of each of the persons indicated above pursuant to a power
of attorney duly executed by such persons and filed with the Securities and
Exchange Commission.
By /s/ Daniel R. Paladino
--------------------------------------
(Daniel R. Paladino, Attorney-in-fact)
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 18th day of August, 1999.
POLYGRAM HOLDING, INC. DEFERRED SAVINGS
AND INVESTMENT PLAN FOR EMPLOYEES
By /s/ Kelly DeMasi
---------------------------------------------
Kelly DeMasi
Member of Administrative Committee
By /s/ Eric Scoones
---------------------------------------------
Eric Scoones
Member of Administrative Committee
By /s/ John R. Toren
---------------------------------------------
John R.Toren
Member of Administrative Committee
<PAGE> 10
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
4(a) Articles of Amalgamation dated February 1, 1995 between the
Company and Centenary Distillers Ltd. (incorporated by
reference to Exhibit 3(a) of the Company's Annual Report on
Form 10-K for the fiscal year ended January 31, 1995), as
amended by Certificate and Articles of Amendment dated May 31,
1995 (incorporated by reference to Exhibit 3(a) of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 30, 1995)
4(b) General By-Laws of the Company, as amended (incorporated by
reference to Exhibit 3(b) to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 1996)
4(c)* PolyGram Holding, Inc. Deferred Savings and Investment Plan
for Employees
4(d)* The Seagram Company Ltd. 1996 Stock Incentive Plan
5* Opinion of Goodman Phillips & Vineberg
23(a)* Consent of PricewaterhouseCoopers LLP, independent
accountants, with respect to the financial statements of The
Seagram Company Ltd.
23(b)* Consent of KPMG Accountants N.V., independent accountants,
with respect to the financial statements of PolyGram N.V.
23(c)* Consent of Guttierrez & Co., independent accountants, with
respect to the financial statements of the PolyGram Holding,
Inc. Deferred Savings and Investment Plan for Employees
23(d)* Consent of Goodman Phillips & Vineberg (included in Exhibit 5)
24* Power of Attorney
____________________
*Filed herewith
<PAGE> 1
EXHIBIT 4(c)
POLYGRAM HOLDING, INC.
DEFERRED SAVINGS AND INVESTMENT PLAN
FOR EMPLOYEES
AS AMENDED AND RESTATED
EFFECTIVE AS OF AUGUST 23, 1999
<PAGE> 2
POLYGRAM HOLDING, INC.
DEFERRED SAVINGS AND INVESTMENT PLAN
FOR EMPLOYEES
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................................................................. 1
ARTICLE I - DEFINITIONS.................................................................................... 2
ARTICLE II - ELIGIBILITY, ENROLLMENT AND PARTICIPATION..................................................... 12
2.1 Eligibility........................................................................................ 12
2.2 Enrollment and Participation....................................................................... 12
2.3 Reemployed Employee................................................................................ 12
2.4 Change in Status................................................................................... 12
2.5 Special Rules of Administration.................................................................... 13
ARTICLE III - CONTRIBUTIONS................................................................................ 14
3.1 Pre-Tax Contributions.............................................................................. 14
3.2 Matching Contributions............................................................................. 15
3.3 Post-Tax Contributions............................................................................. 16
3.4 Tax-Free Rollovers................................................................................. 17
3.5 Profits Not Required............................................................................... 17
3.6 Military Leave..................................................................................... 17
ARTICLE IV - ABATEMENT AND ALLOCATION LIMITATIONS.......................................................... 18
4.1 Superseding Provisions............................................................................. 18
4.2 Limitation on Dollar Amount of Pre-Tax Contributions............................................... 18
4.3 Abatement of Pre-Tax Contributions................................................................. 20
4.4 Abatement of Matching and Post-Tax Contributions................................................... 21
4.5 Multiple Use Limitation............................................................................ 22
4.6 Section 415 Abatement.............................................................................. 22
ARTICLE V - PARTICIPANT'S ACCOUNT.......................................................................... 24
5.1 Participant's Account.............................................................................. 24
5.2 Investment of Accounts............................................................................. 24
5.3 Special Investment Restriction..................................................................... 26
5.4 Management and Expenses of Investment Funds........................................................ 26
ARTICLE VI - DISTRIBUTION OF BENEFITS...................................................................... 27
6.1 Commencement of Distributions...................................................................... 27
6.2 Form of Distribution............................................................................... 28
6.3 Distribution Limitation............................................................................ 31
6.4 Waiver of Notice Period............................................................................ 31
6.5 Small Benefits..................................................................................... 32
6.6 Status of Accounts Pending Distribution............................................................ 33
</TABLE>
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<TABLE>
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ARTICLE VII - RETIREMENT BENEFITS.......................................................................... 34
7.1 Normal Retirement.................................................................................. 34
7.2 Late Retirement.................................................................................... 34
7.3 Disability Retirement.............................................................................. 34
7.4 Retirement Distributions........................................................................... 34
ARTICLE VIII - DEATH BENEFITS.............................................................................. 35
8.1 Payment to Beneficiary............................................................................. 35
8.2 Beneficiary Designation............................................................................ 36
ARTICLE IX - VESTING....................................................................................... 38
9.1 Distribution....................................................................................... 38
9.2 No Further Rights or Interest...................................................................... 38
9.3 Forfeiture......................................................................................... 39
ARTICLE X - WITHDRAWALS DURING SERVICE..................................................................... 40
10.1 Withdrawals - Post-Tax Contributions............................................................... 40
10.2 Withdrawals - Tax - Free Rollovers................................................................. 40
10.3 Withdrawals - Matching Contributions............................................................... 40
10.4 Withdrawals After Age 59-1/2....................................................................... 40
10.5 Withdrawals During Employment on Account of Hardship............................................... 41
10.6 Rules Governing Withdrawals........................................................................ 43
10.7 Non-Repayment...................................................................................... 44
10.8 Withdrawals When Not Fully Vested.................................................................. 44
ARTICLE XI - TOP-HEAVY REQUIREMENTS........................................................................ 45
11.1 Definitions........................................................................................ 45
11.2 Minimum Employer Contributions..................................................................... 48
11.3 Effect on Allocation Limitations................................................................... 49
ARTICLE XII - FIDUCIARY DUTIES AND RESPONSIBILITIES........................................................ 50
12.1 General Fiduciary Standard of Conduct.............................................................. 50
12.2 Plan Participation and Compensation of Fiduciaries................................................. 50
12.3 Trust Agreement.................................................................................... 51
12.4 Appointment of Investment Managers................................................................. 52
12.5 Investment Manager Powers.......................................................................... 52
12.6 Power to Direct Investments........................................................................ 52
12.7 Return of Employer Contributions................................................................... 52
ARTICLE XIII - PLAN ADMINISTRATION......................................................................... 54
13.1 Appointment of Administrative Committee............................................................ 54
13.2 Action by Administrative Committee................................................................. 54
13.3 Powers and Duties of the Administrative Committee.................................................. 55
13.4 Appointment of Investment Committee................................................................ 56
13.5 Action by the Investment Committee................................................................. 57
13.6 Investment Committee Powers and Duties............................................................. 57
</TABLE>
<PAGE> 4
<TABLE>
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13.7 Powers and Duties of Seagram....................................................................... 59
13.8 Action by Seagram.................................................................................. 59
13.9 Designation of Fiduciary Authority................................................................. 59
13.10 Reliance on Advisors............................................................................... 60
13.11 Indemnification of Fiduciaries..................................................................... 60
ARTICLE XIV - PARTICIPANTS' RIGHTS......................................................................... 61
14.1 General Rights of Participants and Beneficiaries................................................... 61
14.2 Filing a Claim for Benefits........................................................................ 61
14.3 Denial of Claim.................................................................................... 61
14.4 Remedies Available to Participants................................................................. 62
14.5 Limitation of Rights............................................................................... 62
14.6 Mergers or Transfers............................................................................... 62
ARTICLE XV - AMENDMENT OR TERMINATION OF THE PLAN.......................................................... 64
15.1 Amendment of Plan.................................................................................. 64
15.2 Termination of the Plan............................................................................ 64
15.3 Full Vesting....................................................................................... 65
15.4 Application of Forfeitures......................................................................... 65
15.5 Subsequent Unfavorable Determination by the Internal Revenue Service............................... 65
ARTICLE XVI - MISCELLANEOUS................................................................................ 66
16.1 Non-Reversion...................................................................................... 66
16.2 Gender and Number.................................................................................. 66
16.3 Governing Law...................................................................................... 66
16.4 Compliance with the Code and ERISA................................................................. 66
16.5 Non-Alienation..................................................................................... 67
16.6 Action by the Employer or Seagram.................................................................. 67
APPENDIX A................................................................................................... i
APPENDIX B................................................................................................... iv
APPENDIX C................................................................................................... vi
APPENDIX D................................................................................................... viii
APPENDIX E................................................................................................... x
APPENDIX F................................................................................................... xii
APPENDIX G................................................................................................... xiii
APPENDIX H................................................................................................... xv
APPENDIX I................................................................................................... xvi
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
APPENDIX J................................................................................................... xvii
APPENDIX K................................................................................................... xviii
APPENDIX L................................................................................................... xix
</TABLE>
<PAGE> 6
Page 1
INTRODUCTION
PolyGram Records, Inc. adopted this Deferred Savings and Investment Plan for
Employees on January 1, 1987 as a profit sharing plan to provide retirement
benefits to Participants. Effective January 1, 1991, this Plan (as defined in
Section 1.35) was amended and restated to change the sponsorship of the Plan to
PolyGram Holding, Inc. and to make certain design changes as well as to make
certain changes required by the Tax Reform Act of 1986, as amended, and
subsequent regulations and legislation ("TRA 86"). Effective as of January 1,
1991, the Island Entertainment Group, Inc. ("Island") Retirement Plan was merged
with and into this Plan and employees of A&M Records, Inc. ("A&M") became
eligible to participate in this Plan. Effective January 1, 1994, Motown Record
Company, L.P. became a participating employer in the Plan and the employees
thereof became eligible to participate in the Plan. Effective as of August 23,
1999, this Plan is being amended and restated to reflect certain Plan design
changes, including, but not limited to, daily valuations, the use of voice
response technology and increased contribution rates. The Plan also is being
amended to reflect current law and regulations. The design changes are effective
as of August 23, 1999. The changes required by law are effective as of the date
specified in Appendix L or other provisions of the Plan. The provisions of this
Plan shall apply to all active Participants on and after August 23, 1999 as well
as to all Participants who terminated employment prior to that date who have an
Account under the Plan as of August 23, 1999.
<PAGE> 7
Page 2
ARTICLE I - DEFINITIONS
1.1 "ACCOUNT" means the value of a Participant's accrued benefit under the
Plan.
1.2 "ADMINISTRATIVE COMMITTEE" means the committee appointed in accordance
with Section 13.1.
1.3 "AFFILIATED EMPLOYER" means (a) any trade or business (whether or not
incorporated) whose employees are treated as employed by the Company,
pursuant to Section 414(b), (c), (m) or (o) of the Code, and (b) any
other affiliated employer designated by the Company.
1.4 "ANNUITY STARTING DATE" means the first day of the first period for
which an amount is payable as an annuity or in any other form.
1.5 "BASIC CONTRIBUTIONS" means that portion of the contributions made
pursuant to Section 3.1 not in excess of six percent (6%) of a
Participant's Compensation for a given month.
1.6 "BENEFICIARY" means the beneficiary or beneficiaries designated by the
Participant under Section 8.2 who are entitled to any benefits upon the
death of such Participant.
1.7 "CODE" means the Internal Revenue Code of 1986, as amended, and the
rulings and regulations promulgated thereunder.
1.8 "COMMON SHARES" means the common shares of The Seagram Company Ltd.,
without nominal or par value.
1.9 "COMPANY" means PolyGram Holding, Inc. and any successor thereto.
<PAGE> 8
Page 3
1.10 "COMPENSATION" means the total annual wages, as defined in Section
3401(a) of the Code for purposes of income tax withholding at the
source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed, including any elective
contributions made by an Employer on behalf of the Participant under
Section 401(k) or 125 of the Code but excluding all of the following
items: reimbursements or other expense allowances (including car
allowances), fringe benefits (cash and noncash, including stock
options), moving expenses, deferred compensation, severance pay paid in
a lump sum and welfare benefits. In no event will the amount of
Compensation taken into account exceed the limitation of the "Section
401(a)(17) Limit."
For purposes of this definition, the "Section 401(a)(17) Limit" means
(a) for each Plan Year starting after 1988 and before 1994,
Compensation for each such Plan Year excluding any portion of a
Participant's Compensation which is in excess of $200,000 as adjusted
by the cost of living factor in accordance with Section 415(d) of the
Code; and (b) for each Plan Year starting in 1994 and later,
Compensation for each such Plan Year excluding any portion of a
Participant's Compensation which is in excess of $150,000, as adjusted
for the cost of living factor in accordance with Section
401(a)(17)(B)(ii) of the Code.
1.11 "DISABILITY" means the definition of a "Disability" in the Company's
Long-Term Disability Plan; provided that such disability shall have
continued for a period of at least six (6) consecutive months, and, in
the opinion of a qualified physician acceptable to the Administrative
Committee, such disability will be permanent and continuous during the
remainder of the Participant's life.
1.12 "DISABILITY RETIREMENT DATE" means the first day of the month after the
Administrative Committee has determined that a Participant's incapacity
is a Disability.
<PAGE> 9
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1.13 "EFFECTIVE DATE" of this restatement is August 23, 1999.
1.14 "ELIGIBILITY COMPUTATION PERIOD" means the twelve (12) consecutive
month period beginning on the Employee's Employment Commencement Date
or Reemployment Commencement Date, whichever is applicable, and each
anniversary thereof.
1.15 "EMPLOYEE" means an individual who either (i) on December 9, 1998 was
on the payroll of the Company, or any company which qualified as an
Affiliated Company on December 9, 1998, and is performing services in
the employ of the Employer, or (ii) is hired on or after December 10,
1998 and who is performing services for PolyGram Group Distribution,
Inc. - Indiana location, or any successor thereto, but shall not
include any individual who (a) is a leased employee of the Employer
within the meaning of Section 414(n) of the Code, (b) performs services
as a consultant as determined by the Administrative Committee
regardless of the manner in which the individual is paid, (c) is
employed on a "freelance" basis and whose employment is not intended to
be permanent but is intended to relate solely to one or more specific
projects or time periods, (d) is covered by a collective bargaining
agreement unless such agreement provides for participation in the Plan,
and (e) is covered during the period of his employment with an
Employer, and continues to accrue benefits under, a foreign plan
sponsored by PolyGram N.V. or any foreign affiliate thereof.
1.16 "EMPLOYER" means the Company and any Affiliated Employers who have
adopted this Plan with the approval of the Company.
1.17 "EMPLOYMENT COMMENCEMENT DATE" means, upon employment, the first date
on which an Employee completes an Hour of Service.
1.18 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations promulgated thereunder.
1.19 "FIDUCIARY" means any person classified in accordance with Section
3(21) of ERISA.
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1.20 "FIVE-PERCENT OWNER" means with respect to a corporation, any person
who owns (or is considered as owning within the meaning of Section 318
of the Code) more than 5% of the outstanding stock of the corporation,
or stock possessing more than 5% of the total voting power of the
corporation.
1.21 "FORFEITURE" means the amount, if any, by which the value of a
Participant's Account exceeds his Vested Interest as determined in
accordance with Article IX.
1.22 "HIGHLY COMPENSATED EMPLOYEE" means for a Plan Year commencing on or
after January 1, 1997, any employee of the Company or an Affiliated
Employer (whether or not eligible for membership in the Plan) who:
(i) was a Five-percent Owner for such Plan Year or the prior Plan
Year, or
(ii) for the preceding Plan Year received statutory compensation in
excess of $80,000. The $80,000 amount in the preceding
sentence shall be adjusted from time to time for cost of
living in accordance with Section 414(q) of the Code.
Notwithstanding the foregoing, employees who are nonresident aliens and
who receive no earned income from the Company or an Affiliated Employer
which constitutes income from sources within the United States shall be
disregarded for all purposes of this Section.
For purposes of this Section, statutory compensation shall mean an
Employee's W-2 wages as reported or reportable (or which would be
reportable as W-2 wages if the Employee's wages were subject to U.S.
income tax), and elective contributions that are made by the Company
and any Affiliated Employer that are not includible in gross income
under Sections 125 and 402(e)(3) of the Code.
The provisions of this Section shall be further subject to such
additional requirements as shall be described in Section 414(q) of the
Code and its applicable regulations, which shall override any aspects
of this Section inconsistent therewith.
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1.23 "HOUR OF SERVICE" means each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by the Company or an
Affiliated Employer for the performance of services.
1.24 "INVESTMENT COMMITTEE" means the committee appointed in accordance with
Section 13.4.
1.25 "INVESTMENT FUNDS" means the investment options made available to
Participants as may be established BY the Investment Committee from
time to time.
1.26 "LATE RETIREMENT AGE" means the first day of the month coincident with
or next following a Participant's Severance from Service Date after his
Normal Retirement Age, for any reason other than death.
1.27 "MATCHING CONTRIBUTIONS" means the amounts contributed pursuant to
Section 3.2.
1.28 "NON-HIGHLY COMPENSATED EMPLOYEE" means for any Plan Year an employee
of the Company or an Affiliated Employer who is not a Highly
Compensated Employee for that Plan Year.
1.29 "NORMAL RETIREMENT AGE" means the date the Participant attains age
sixty-five (65).
1.30 "NORMAL RETIREMENT DATE" means the first day of the month coinciding
with or next following the date a Participant attains his Normal
Retirement Age.
1.31 "PARENTAL LEAVE" means an absence (a) by reason of the pregnancy of the
individual, (b) by reason of the birth of a child of the individual,
(c) by reason of the placement of a child with the individual in
connection with the adoption of such child by the individual or (d) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.
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1.32 "PARTICIPANT" means any Employee of the Employer who is or becomes
eligible to participate under this Plan in accordance with its
provisions.
1.33 "PERIOD OF SERVICE" means a period of employment commencing on the
Employee's Employment Commencement Date or Reemployment Commencement
Date and ending on the Employee's Severance from Service Date. In the
case of an Employee who is absent from service for Parental Leave, the
period commencing after the first anniversary of the first date of such
absence shall not be included as a Period of Service.
Employment for any period of time with any Affiliated Employer after
such Affiliated Employer became an Affiliated Employer shall be
credited in determining an Employee's Period of Service. A
Participant's Period of Service shall also include any Period of
Service recognized under the Prior Plans (or that would have been
recognized under the Prior Plans if the Participant had joined the
applicable Prior Plan when first eligible). In addition, if an Employee
is absent from the service of the Company or any Affiliated Employer
because of service in the Uniformed Services of the United States and
he returns to service with the Company or an Affiliated Employer having
applied to return while his reemployment rights were protected by law,
the absence shall be included as a Period of Service. If an Employee
terminates employment and is subsequently reemployed within one year of
the earlier of (i) his date of termination or (ii) the first day of an
absence immediately preceding his date of termination, the period
between his Severance from Service Date and his date of reemployment
shall be included as a Period of Service. In the case of any person who
is a leased employee (as defined in Section 414(n) of the Code) of the
Company or an Affiliated Employer before or after a period of service
as an Employee, the entire period during which he has performed
services as a leased employee shall be counted as a Period of Service
as an Employee, except that he shall not, by reason of that status,
become a Participant in the Plan.
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1.34 "PERIOD OF SEVERANCE" means the period of time commencing on the
Employee's Severance from Service Date and ending on the Employee's
Reemployment Commencement Date.
1.35 "PLAN" means the PolyGram Holding, Inc. Deferred Savings and Investment
Plan for Employees. The Plan is intended to be a profit-sharing plan
for purposes of Section 401(a) of the Code.
1.36 "PLAN YEAR" means the twelve-consecutive month period beginning each
January 1.
1.37 "POST-TAX CONTRIBUTIONS" means a Participant's contributions made
pursuant to Section 3.3.
1.38 "PRE-TAX CONTRIBUTIONS" means the sum of the Basic Contributions and
the Supplementary Contributions, if any, made by the Employer on behalf
of a Participant for a Plan Year.
1.39 "PRIOR PLANS" means either the Island Entertainment Group, Inc.
Retirement Plan or the A&M Records Profit Sharing Plan and Trust.
1.40 "REEMPLOYMENT COMMENCEMENT DATE" means the first date on which an
Employee completes an Hour of Service following a Period of Severance.
1.41 "SAVINGS LINE" means the interactive telephone system established by
the Employer that permits Participants to manage their Account,
including, but not limited to, commence participation in the Plan (in
accordance with Section 2.2), change their contribution elections (in
accordance with Sections 3.1 and 3.3) and investment elections (in
accordance with Section 5.2), apply for a loan (in accordance with
Appendix C), apply for an in-service withdrawal (in accordance with
Article X), and request a distribution (in accordance with Article VI).
1.42 "SEAGRAM" means Joseph E. Seagram & Sons, Inc. and any successor
thereto.
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1.43 "SEAGRAM STOCK FUND" means the investment option, if any, offered under
the Plan which is invested primarily in Common Shares.
1.44 "SEVERANCE FROM SERVICE DATE" means the earlier of:
(a) The date on which occurs the termination of the Employee's
relationship with the Company or an Affiliated Employer; or
(b) The first anniversary of the first date of a period in which
the Employee remains absent from service (with or without pay)
with the Company or an Affiliated Employer for any reason
other than the termination of the Employee's relationship with
the Company or an Affiliated Employer, such as vacation,
holiday, sickness, disability, leave of absence, or temporary
layoff;
or
(c) The second anniversary of the first date of a period in which
the Employee is absent from service (with or without pay) with
the Company or an Affiliated Employer for Parental Leave.
1.45 "SPOUSE" means the lawful spouse of the Participant, provided that a
former spouse will be treated as a Spouse to the extent provided under
a qualified domestic relations order described in Section 414(p) of the
Code.
1.46 "SUPPLEMENTARY CONTRIBUTIONS" means that portion, if any, of the
contributions made pursuant to Section 3.1 in excess of six percent
(6%) of a Participant's Compensation for a given month.
1.47 "TAX-FREE ROLLOVER" means the contribution made by a Participant
pursuant to Section 3.4.
1.48 "TRUST" means the trust formed pursuant to the trust agreement entered
into by the Employer and the Trustees which trust agreement forms a
part of, and implements the provisions of, this Plan.
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1.49 "TRUSTEE" means the person(s) designated as such under the Trust.
1.50 "VESTED INTEREST" means, as of a given date, the nonforfeitable right
to an immediate or deferred benefit in the amount which is equal to the
sum of (a), (b) and (c) below:
(a) The value on that date of that portion of the Participant's
Account that is attributable to, and derived from, a
Participant's Pre-Tax Contributions, Post-Tax Contributions,
Tax-Free Rollovers;
(b) In the case of a Participant on the payroll of the Company or
an Affiliated Employer on December 9, 1998, or a Participant
who terminated employment on or after January 1, 1998 and
prior to December 9, 1998, or any Participant who had
terminated employment within the 60 month period ending on
December 9, 1998 and who did not receive a distribution of his
vested Account following his termination of employment, the
value of that portion of the Participant's Account that is
attributable to and derived from Matching Contributions as of
December 31, 1998, including gains and losses thereon; and
(c) The value on that date of the remaining portion of the
Participant's Account that is attributable to and derived from
Matching Contributions and not otherwise included under
paragraph (b) above multiplied by the Participant's Vesting
Percentage on that date.
1.51 "VESTING PERCENTAGE" means the Participant's nonforfeitable interest in
Matching Contributions credited to his Account plus the earnings
thereon computed as of the date of determining such percentage in
accordance with the following schedule based on Vesting Service:
<PAGE> 16
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<TABLE>
<CAPTION>
Years of Vesting Service Vesting Percentage
------------------------ ------------------
<S> <C>
Less than 1 0%
1 and less than 2 20%
2 and less than 3 40%
3 and less than 4 60%
4 and less than 5 80%
5 or more 100%
</TABLE>
The Participant's Vesting Percentage shall be 100% upon attaining age
60 while an employee of the Company or an Affiliated Employer, upon
termination of employment as a result of death or Disability, upon
termination of the Plan, or upon a partial termination of the Plan
applicable to the affected Participant.
1.52 "VESTING SERVICE" means the number of whole years of an Employee's
aggregate Periods of Service whether or not such Periods of Service are
completed consecutively. For purposes of determining the number of
whole years in accordance with this Section, all portions of
non-successive Periods of Service that are less than whole years shall
be aggregated on the basis that twelve (12) months of service equal a
whole year of service (thirty (30) days are deemed to be a month in the
case of the aggregation of fractional months) or three hundred
sixty-five (365) days of service equal a whole year of service. All
Periods of Service shall be taken into account for determining Vesting
Service.
<PAGE> 17
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ARTICLE II - ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2.1 ELIGIBILITY
Each Employee who was a Participant in the Plan on August 22, 1999
shall remain a Participant on August 23, 1999. Each other employee
shall be eligible to Participate in the Plan on the date he becomes an
Employee or on August 23, 1999, if later.
2.2 ENROLLMENT AND PARTICIPATION
An eligible Employee will become a Participant as soon as
administratively practicable following the date on which he contacts
the Savings Line and authorizes Pre-Tax Contributions and/or Post-Tax
Contributions. In the event a Participant is unable to use the Savings
Line to make a contribution election, the Administrative Committee
shall permit the Participant to make such election in writing on a form
prescribed by the Administrative Committee for such purpose.
2.3 REEMPLOYED EMPLOYEE
An individual who ceases to be an Employee and is subsequently rehired
as an Employee shall become eligible to participate in the Plan upon
his Reemployment Commencement Date in accordance with the provisions of
Section 2.2.
2.4 CHANGE IN STATUS
In the event a Participant becomes ineligible to participate because he
is no longer a member of an eligible class of Employees, such Employee
shall participate immediately upon his return to an eligible class of
Employees. In the event an Employee who is not a member of the eligible
class of Employees becomes a member of such eligible class, such
Employee shall participate in accordance with the provisions of Section
2.2.
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2.5 SPECIAL RULES OF ADMINISTRATION
Notwithstanding any provision of the Plan to the contrary, due to the
change in recordkeeper effective as of July 1, 1999, the following
rules of administration shall apply during the period July 1, 1999
through August 22, 1999 (or such other date as the Administrative
Committee deems appropriate to effectuate an orderly implementation)
(the "Suspension Period"). Contribution rate elections, investment
election changes, investment reallocation elections, withdrawals, loan
applications and distributions will be suspended during the Suspension
Period. Any distributions or loan approvals which would have been made
during the Suspension Period will be made as soon as practicable
following the Suspension Period and any contribution and investment
changes shall be implemented as soon as practicable following the
Suspension Period.
<PAGE> 19
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ARTICLE III - CONTRIBUTIONS
3.1 PRE-TAX CONTRIBUTIONS
(a) Each Participant who wishes to make a contribution election shall
contact the Savings Line and specify, in the case of Pre-Tax
Contributions, the percentage of Compensation to be reduced. Subject to
the limitations of the Plan, each Participant who is both an Employee
and a Highly Compensated Employee may elect to reduce his Compensation
by at least 1% and not more than 12% (in whole percentages) and have
that amount contributed to the Plan by the Employer as Pre-Tax
Contributions, and each Participant who is an Employee and a Non-highly
Compensated Employee may elect to reduce his Compensation by at least
1% and not more than 17% (in whole percentages) and have that amount
contributed to the Plan by the Employer as Pre-Tax Contributions.
However, in no event may the aggregate percentage of Compensation
reduced pursuant to this Section, when added to the percentage of
Compensation contributed by the Employer pursuant to Section 3.3,
exceed 17% of Compensation. The Pre-Tax Contributions shall be paid to
the Trustee as soon as practicable, but in no event later than the 15th
business day of the month following the month in which such amounts
otherwise would have been payable to the Participant in cash.
(b) A Participant's contribution election shall be effective as soon as
administratively practicable following the date the Plan receives the
Participant's contribution election; provided, however, that no
contribution election shall be effective prior to the date the Employee
becomes a Participant (or in the case of a Participant who ceases to be
an Employee and then again becomes an Employee, the first date such
employee again becomes an Employee). A Participant may only make a
contribution election with respect to Compensation that becomes
currently available after the date of such contribution election.
<PAGE> 20
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(c) A Participant may amend (to either increase or decrease the percentage
of his Compensation contributed to the Plan) or revoke his contribution
election on a prospective basis by contacting the Savings Line. Changes
in a Participant's contribution election shall be effective as soon as
administratively practicable following the date the Plan receives the
Participant's revised contribution election.
(d) A Participant's contribution election shall automatically apply to any
increases or decreases in the Participant's Compensation.
(e) Notwithstanding anything in this Section 3.1 to the contrary, in the
event that a Participant is unable to use the Savings Line to make or
change a contribution election, the Administrative Committee shall
permit the Participant to make or change such election in writing on a
form prescribed by the Administrative Committee for such purpose.
(f) Notwithstanding the foregoing, the Administrative Committee may, under
administrative rules, restrict the right of some or all Highly
Compensated Employees to increase, reduce or suspend their Pre-Tax
Contributions during a Plan Year.
3.2 MATCHING CONTRIBUTIONS
Each month, the Employer shall pay to the Trustee as a Matching
Contribution to the Plan an amount which shall be allocated to each
Participant's Account equal to fifty percent (50%) of the dollar amount
of the Participant's Basic Contributions for the preceding month.
<PAGE> 21
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3.3 POST-TAX CONTRIBUTIONS
Each Participant may make contributions to his Account which are
includable as gross income for federal income tax purposes subject to
the following rules:
(a) Each Participant who wishes to make a contribution election
relating to Post-Tax Contributions shall contact the Savings
Line and specify the percentage of Compensation to be
contributed to the Plan. Subject to the limitations of the
Plan, each Participant who is an Employee may elect to
contribute from 1% to 17% (in whole percentages) of his
Compensation; provided, however, that in no event may the
aggregate percentage of Compensation contributed pursuant to
this Section when added to the percentage of Compensation
reduced pursuant to Section 3.1 exceed 17% of Compensation.
Post-Tax Contributions may only be contributed by payroll
deduction and shall be paid to the Trustee as soon as
practicable, but in no event later than the 15th business day
of the month following the month in which such amounts would
otherwise have been payable to the Participant in cash.
(b) A Participant's contribution election shall be effective as
soon as administratively practicable following the date the
Plan receives the Participant's contribution election;
provided, however, that no contribution election shall be
effective prior to the date the Employee becomes a Participant
(or in the case of a Participant who ceases to be an Employee
and then again becomes an Employee, the first date such
employee again becomes an Employee). A Participant may only
make a contribution election with respect to Compensation that
becomes currently available after the date of such
contribution election.
(c) A Participant may amend (to either increase or decrease the
percentage of his annual Compensation contributed to the Plan)
or revoke his contribution election on a prospective basis by
contacting the Savings Line. Changes in a
<PAGE> 22
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Participant's contribution election shall be effective as soon
as administratively practicable following the date the Plan
receives the Participant's revised contribution election.
(d) A Participant's contribution election shall automatically
apply to any increases or decreases in the Participant's
Compensation.
(e) Notwithstanding anything in this Section 3.3 to the contrary,
in the event that a Participant is unable to use the Savings
Line to make or change a contribution election, the
Administrative Committee shall permit the Participant to make
or change such election in writing on a form prescribed by the
Administrative Committee for such purpose.
3.4 TAX-FREE ROLLOVERS
An Employee may transfer to his Account some or all of the amount of
any eligible rollover distribution (as defined in Appendix E) received
from a qualified plan. The amount transferred to this Plan cannot
include any voluntary nondeductible contributions made by the Employee
to the other plan.
3.5 PROFITS NOT REQUIRED
Pre-Tax Contributions and Matching Contributions may be made by the
Employer without regard to current or accumulated profits.
3.6 MILITARY LEAVE
Notwithstanding any provision of the Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Code.
<PAGE> 23
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ARTICLE IV - ABATEMENT AND ALLOCATION LIMITATIONS
4.1 SUPERSEDING PROVISIONS
The limitations of this Article shall supersede any provisions of the
Plan to the contrary.
4.2 LIMITATION ON DOLLAR AMOUNT OF PRE-TAX CONTRIBUTIONS
(a) In no event shall the Participant's Pre-Tax Contributions and similar
contributions made on his behalf by the Company and all Affiliated
Employers to all plans, contracts or arrangements subject to the
provisions of Section 401(a)(30) of the Code in any calendar year
exceed $10,000, as adjusted from time to time for cost of living
pursuant to Section 402(g)(5) of the Code. If a Participant's Pre-Tax
Contributions in a calendar year reach that dollar limitation, his
election of Pre-Tax Contributions for the remainder of the calendar
year will be canceled.
(b) In the event that the sum of the Pre-Tax Contributions and similar
contributions to any other qualified defined contribution plan
maintained by the Company or an Affiliated Employer exceeds the dollar
limitation in paragraph (a) above for any calendar year, the
Participant shall be deemed to have elected a return of Pre-Tax
Contributions in excess of such limit ("excess deferrals") from this
Plan. The excess deferrals (adjusted for allocable income or loss)
shall be returned to the Participant no later than the April 15
following the end of the calendar year in which the excess deferrals
were made. The amount of excess deferrals to be returned for any
calendar year shall be reduced by any Pre-Tax Contributions previously
returned to the Participant under Section 4.3 for that calendar year.
In the event any Pre-Tax Contributions returned under this paragraph
(b) were matched by Matching Contributions under Section 3.2, those
Matching Contributions (adjusted for allocable income or loss) shall be
forfeited and used to reduce Employer contributions. In the event those
Matching Contributions subject to forfeiture have been
<PAGE> 24
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distributed to the Participant, the Employer shall make reasonable
efforts to recover the contributions from the Participant.
(c) If a Participant makes tax-deferred contributions under another
qualified defined contribution plan maintained by an employer other
than the Company or an Affiliated Employer for any calendar year and
those contributions when added to his Pre-Tax Contributions exceed the
dollar limitation under paragraph (b) for that calendar year, the
Participant may allocate all or a portion of such excess deferrals to
this Plan. In that event, such excess deferrals (adjusted for allocable
income or loss) shall be returned to the Participant no later than the
April 15 following the end of the calendar year in which such excess
deferrals were made. However, the Plan shall not be required to return
excess deferrals unless the Participant notifies the Administrative
Committee, in writing, by March 1 of that following calendar year of
the amount of the excess deferrals allocated to this Plan. The amount
of any such excess deferrals to be returned for any calendar year shall
be reduced by any Pre-Tax Contributions previously returned to the
Participant under Section 4.3 for that calendar year. In the event any
Pre-Tax Contributions returned under this paragraph (c) were matched by
Matching Contributions under Section 4.2, those Matching Contributions
(adjusted for allocable income or loss) shall be forfeited and used to
reduce Employer contributions. In the event those Matching
Contributions subject to forfeiture have been distributed to the
Participant, the Employer shall make reasonable efforts to recover the
contributions from the Participant.
(d) The income (or loss) allocable to excess deferrals (and Matching
Contributions, if applicable) shall be determined by using a uniform
and nondiscriminatory method which reasonably reflects the manner used
by the Plan to allocate income to Participants' Accounts.
4.3 ABATEMENT OF PRE-TAX CONTRIBUTIONS
In no event shall the amount of Pre-Tax Contributions made on behalf of
a Highly Compensated Employee equal or exceed an amount that would
cause the Plan to fail
<PAGE> 25
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to satisfy the limitations of Section 401(k)(3) of the Code and Section
1.401(k)-(l)(b) of the Treasury Regulations, each of which are
incorporated herein by reference. For purposes of determining the
Plan's compliance with the foregoing, the prior year testing method (as
described in Section 401(k)(3) of the code) shall be used. If the
Administrative Committee determines that the test described above has
been exceeded, the excess Pre-Tax Contributions shall be allocated to
some or all Highly Compensated Employees in accordance with the
provisions of Section 401(k)(8) of the Code.
Any excess Pre-Tax Contributions by a Highly Compensated Employee
(adjusted for allocable income or loss) shall be distributed to the
Participant not later than the end of the Plan Year following the Plan
Year in which the excess contributions were made, provided that the
Administrative Committee may recharacterize the excess Pre-Tax
Contributions (adjusted for allocable income or loss), as Post-Tax
Contributions and income (subject to abatement under Section 4.4 and
only to the extent it does not force abatement of any other
Participant's Post-Tax and Matching Contributions pursuant to Section
4.4), and provided such recharacterization occurs within 2-1/2 months
of the Plan Year being tested. Such recharacterized Pre-Tax
Contributions (adjusted for allocable income or loss) shall be deemed
contributed with respect to the Plan Year in which the excess
contributions were made. Any Matching Contribution (adjusted for
allocable income or loss) made with respect to any excess Pre-Tax
Contribution that is distributed to the Participant or is
recharacterized as a Post-Tax Contribution shall be forfeited and shall
be applied as provided in Section 9.3. In the event any Matching
Contributions subject to forfeiture under this Section have been
distributed to the Participant, the Employer shall make reasonable
efforts to recover the contributions from the Participant.
The income or loss allocated to excess Pre-Tax Contributions (and
Matching Contributions, if applicable) shall be determined by using a
uniform and
<PAGE> 26
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nondiscriminatory method which reasonably reflects the manner used by
the Plan to allocate income to Participants' Accounts.
4.4 ABATEMENT OF MATCHING AND POST-TAX CONTRIBUTIONS
In no event shall the amount of Matching Contributions and Post-Tax
Contributions to the account of a Highly Compensated Employee equal or
exceed an amount that would cause the Plan to fail to satisfy the
requirements of Section 401(m) of the Code and Section 1.401(m)-2 of
the Treasury Regulations, each of which is incorporated herein by
reference. For purposes of determining the Plan's compliance with the
foregoing, the prior year testing method (as described in Section
401(m)(2) of the code) shall be used.
If such Matching Contributions and Post-Tax Contributions by or on
behalf of a Highly Compensated Employee must be reduced to enable the
Plan to satisfy the requirements of Section 401(m) of the Code, then,
to the extent necessary to eliminate such excess Matching Contributions
and Post-Tax Contributions made by, or on behalf of, Highly Compensated
Employees shall be reduced (in order of the Contribution Percentages
beginning with the highest of such percentages) to the extent necessary
to meet such tests and such excess contributions (adjusted for
allocable income or loss) shall be distributed to Highly Compensated
Employees on the basis of the respective portions of the excess
contributions allocable to each Participant determined in accordance
with Section 401(m)(6)(C) of the Code. Such reduction shall be made by
first distributing any Post-Tax Contributions and then forfeiting any
Matching Contributions. A Participant who receives a distribution of
his Account balance during the Plan Year shall be obligated to return
the amount of any Matching Contributions that are otherwise forfeitable
pursuant to the terms of this Section.
The income or loss allocable to Matching Contributions and Post-Tax
Contributions shall be determined by using a uniform and
nondiscriminatory method which
<PAGE> 27
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reasonably reflects the manner used by the Plan to allocate income to
Participants' Accounts.
4.5 MULTIPLE USE LIMITATION
Notwithstanding any provision of the Plan, in no event shall the sum of
the actual deferral percentage of the group of eligible Highly
Compensated Employees and the contribution percentage of such group,
after applying the provisions of Sections 4.3 and 4.4, exceed the
"aggregate limit" as provided in Section 401(m)(9) of the Code and the
regulations issued thereunder. In the event the aggregate limit is
exceeded for any Plan Year, the contribution percentages of the
Highly-Compensated Employees shall be reduced to the extent necessary
to satisfy the aggregate limit in accordance with the procedure set
forth in Section 4.4.
4.6 SECTION 415 ABATEMENT
Notwithstanding any other provision of the Plan to the contrary, no
allocation shall be made to a Participant's Account in excess of the
maximum amount permitted under Section 415 of the Code which is hereby
incorporated by reference. If, after the end of a Plan Year, the
Administrative Committee determines that the annual additions credited
under the Plan with respect to a Participant for any Plan Year exceed
the limitations of Section 415 of the Code as a result of (i) the
allocation of forfeitures, (ii) a reasonable error in estimating the
Participant's 415 Compensation for the Plan Year, (iii) a reasonable
error in determining the amount of Pre-Tax Contributions that the
Participant may contribute, or (iv) any other circumstance permitted
pursuant to the regulations and rulings promulgated under Section 415
of the Code, then the amount of contributions credited to the
Participant's Account in that Plan Year shall be adjusted to the extent
necessary to satisfy that limitation in accordance with the following
order of priority:
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(a) First, the Participant's Post-Tax Contribution for such Plan
Year shall be reduced and returned to the Participant as soon
as administratively feasible.
(b) Second, Supplementary Contributions for such Plan Year shall
be reduced and returned to the Participant as soon as
administratively feasible.
(c) Third, Basic Contributions and corresponding Matching
Contributions made on behalf of a Participant shall be abated
and the Basic Contributions shall be used to reduce the amount
of contributions to be made by the Employer on behalf of the
Participant under Section 3.1 in the following Plan Year or
succeeding Plan Years, if necessary, and Matching
Contributions shall be used to reduce Matching Contributions
to be made on behalf of all Participants in the following Plan
Year.
(d) In the event that a Participant ceases to be covered by the
Plan before the Basic Contribution amounts abated pursuant to
(c) have been allocated to his Account, then such abated
amounts shall be credited and allocated to reduce Employer
contributions for the following Plan Year.
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ARTICLE V - PARTICIPANT'S ACCOUNT
5.1 PARTICIPANT'S ACCOUNT
A Participant's Account shall be maintained by the Trustee on behalf of
each Participant until such Account is distributed in accordance with
the terms of this Plan. The records for a Participant's Account shall
show (a) the Pre-Tax Contributions, Matching Contributions, Post-Tax
Contributions and Tax-Free Rollovers made to such Account, (b) the
investment gains and losses, withdrawals, distributions and charges
attributable to such contributions, and (c) such other information as
the Administrative Committee or the Trustee may deem appropriate.
Participants' Accounts shall be valued, and earnings and losses
allocated, daily except that loans, in-service withdrawals,
distributions, and certain repayments shall not be valued until
processed.
5.2 INVESTMENT OF ACCOUNTS
Each Participant shall be entitled at the time of enrollment in the
Plan to make an election to direct how contributions made to his
Account shall be invested in and among the Investment Funds. A
Participant's investment election shall be effective as soon as
administratively practicable following the date the Plan receives the
Participant's investment election. Tax-Free Rollovers made by a
Participant may be invested in the same manner as other contributions.
An investment election shall specify the percentage of contributions to
be invested in the Investment Funds in multiples of 1%.
Participants may make or change their investment elections by calling
the Savings Line. A Participant's change in investment election shall
be effective with respect to new contributions only, unless the
Participant also makes a new investment election with respect to
amounts in his existing Account. Changes in a Participant's
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investment election shall be effective as soon as administratively
practicable after the date the Plan receives the Participant's revised
investment election.
Notwithstanding anything in this Section 5.2 to the contrary, in the
event that a Participant is unable to use the Savings Line to make or
change an investment election, the Administrative Committee shall
permit the Participant to make or change such election in writing on a
form prescribed by the Administrative Committee for such purpose.
In the event the Participant does not direct the Trustee regarding the
investment or re-investment of the Participant's Account, the Trustee
shall invest any new contributions made to the Participant's Account in
accordance with the Participant's most recently submitted investment
election; provided, however, that if it is not possible to continue to
invest in accordance with the Participant's investment election (for
example, because the Investment Committee has ceased to offer the
investment), the Investment Committee shall determine the manner in
which the Participant's Account shall be invested.
Each Participant is solely responsible for his selection of Investment
Funds. None of the Trustee, the Administrative Committee, the
Investment Committee, Seagram, the Employer or any other of the
employees, officers or supervisors of the Company is empowered or
authorized to advise a Participant regarding the Participant's
investment election. The Investment Committee's selection of the
Investment Funds offered under this Plan shall not be construed as a
recommendation that Participants invest in any particular Investment
Fund. The Plan is primarily intended to constitute a plan described in
ERISA Section 404(c) and Title 29 of the Code of Federal Regulations
2550.404c-1, and, to the extent it does, the fiduciaries of the Plan
are relieved of liability for any losses which are the direct result of
investment elections made by Participants and Beneficiaries.
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Pending ultimate investment in accordance with the Participant's
directions, the Trustee temporarily may hold contributions to the
Participant's Account as cash or in short-term investments if the
Trustee determines that it is inappropriate to make an immediate
investment in accordance with the Participant's directions.
5.3 SPECIAL INVESTMENT RESTRICTION
Any Participant who is an insider, as defined for the purposes of
Section 16 of the Securities Exchange Act of 1934, as amended, is
prohibited from directing investments of contributions or existing
Account balances into or out of the Seagram Stock Fund.
5.4 MANAGEMENT AND EXPENSES OF INVESTMENT FUNDS
(a) The Investment Committee shall select Investment Funds from time to
time in accordance with the investment policies and objectives
established by Seagram. Subject to such policies and objectives, the
Investment Committee shall have the right to cease offering any
Investment Fund or to add any Investment Fund at any time.
(b) Expenses directly attributable to the investment in, and the management
of, a particular Investment Fund (including, but not limited to,
brokers' commissions, investment fees, and other similar expenses)
shall be treated as charges against amounts invested in that Investment
Fund. Such charges shall be reflected in the Accounts of Participants
whose contributions are invested in such Investment Fund in a uniform
and nondiscriminatory manner. However, the Company may at its
discretion elect to pay, or cause to be paid by the Employer, any such
costs, fees and expenses.
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5.5 INVESTMENT OF LOAN REPAYMENTS AND RESTORATION OF FORFEITURES
Any loan repayments and repayments in connection with forfeiture restorations in
accordance with Section 9.2 shall be invested in the Investment Funds that have
been selected by the Participant for new contributions as in effect on the date
such repayments or contributions are received.
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ARTICLE VI - DISTRIBUTION OF BENEFITS
6.1 COMMENCEMENT OF DISTRIBUTIONS
(a) Distribution of the Vested Interest in a Participant's Account shall
commence as soon as practicable following the Participant's Severance
from Service Date. Notwithstanding the foregoing, if the total value of
a Participant's Account exceeds $5,000, payment shall be made no
earlier than the Participant's Normal Retirement Age or the
Participant's death, whichever occurs first, unless the Participant
consents in writing to an earlier distribution of his Account. A
Participant may elect to defer the commencement of the distribution of
his Account, but in no event later than the April 1 following the
calendar year in which he attains age 70-1/2 or retires, if later. Such
election shall be made in accordance with the rules established by the
Administrative Committee. A Participant who elects to defer the receipt
of a distribution may revoke such election at any time and elect an
earlier distribution date. However, notwithstanding the foregoing or
any other provision of this Plan, a Participant who is a Five-percent
Owner must begin receiving distributions from his Account no later than
the April 1st following the calendar year in which the Participant
attains age 70-1/2 under one of the forms of payment described in
Section 6.2. If a Participant who has attained age 70-1/2 elects to
commence receipt of his Account in installments, the Administrative
Committee shall direct the Trustee to distribute to the Participant the
greater of: (i) the amount determined using the methodology set forth
in Section 6.2(b), or (ii) the amount required to be distributed under
Section 401(a)(9) of the Code.
In the event a Participant, other than a Five-percent Owner, was
receiving payments while in service (in accordance with the provisions
of Section 401(a)(9) of the Code) as of December 31, 1999, the
Participant shall continue to receive payment on and after January 1,
2000, unless the Participant elects to suspend payments while he
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remains in service in accordance with such uniform rules as the
Administrative Committee shall adopt.
(b) Unless the Participant otherwise elects by filing the required notice
with the Administrative Committee and in accordance with rules
prescribed by the Administrative Committee, the payment of benefits
under the Plan shall not commence later than the sixtieth (60th) day
after the end of the Plan Year (i) in which the Participant attains
Normal Retirement Age, (ii) in which the tenth (10th) anniversary of
the date on which the Participant commenced participation in the Plan
occurs, or (iii) in which the Participant terminates service with the
Company and all Affiliated Employers, whichever of (i), (ii) or (iii)
is the latest to occur.
(c) If the value of a Participant's Account cannot be ascertained by the
date of the scheduled payment or, if it is not possible to make payment
on such date because the Administrative Committee has been unable to
locate the Participant (or Beneficiary) after making reasonable efforts
to do so, a payment may be made no later than sixty (60) days after the
earliest date on which the Participant's Account can be ascertained, or
the date on which the Participant (or Beneficiary) is located.
6.2 FORM OF DISTRIBUTION
A Participant may elect, in such manner as the Administrative Committee
may prescribe, to receive payment in one of the forms of payment
described below or in a combination of the forms described in
paragraphs (a) and (b), as follows:
(a) Lump Sum Payment. By payment in a lump sum of the value of his
Vested Interest in his Account determined on the date on which
the distribution is made.
(b) Installments. By payments in a series of substantially equal
monthly, quarterly, semi-annual or annual installments over a
period not to exceed the
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greater of (i) the Participant's life expectancy, or (ii) the
joint and last survivor life expectancy of the Participant and
his Beneficiary (if the designated Beneficiary is an
individual). If the Participant's Beneficiary is not his
Spouse, the present value of payments made to the Participant
over his life expectancy, must exceed fifty percent (50%) of
his Vested Interest at the time benefits first became
distributable. A Participant who elects to receive
installments may revoke such election at any time and in lieu
thereof elect to receive a lump sum distribution of the
balance of his Account. Notwithstanding the foregoing, an
installment period in excess of 15 years may only be elected
by a Participant who had an Account under the Plan on August
23, 1999.
(c) Annuity. By purchase of an annuity. An election by a
Participant of payment of benefits in the form of an annuity
shall be subject to the following terms and conditions:
(i) The election shall be made in writing on a form filed
with the Administrative Committee at any time during
the ninety (90) day period ending on the Annuity
Starting Date.
(ii) If the Participant is married on the Annuity Starting
Date, then his benefits shall be paid in the form of
a joint and fifty percent (50%) survivor annuity (for
the life of the Participant and, after his death, for
the life of the surviving Spouse) unless the
Participant's Spouse consents (in the manner
described in Section 8.2) to payment in another form
or to another Beneficiary and does not withdraw such
consent before the end of the ninety (90)-day period
ending on the Annuity Starting Date. A Participant
who elects an annuity option shall be subject to the
following rules. A Participant may revoke his
election and make a new election from time to time
and at any time during the applicable election
period. If the annuity form selected is not a 50%
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joint and survivor annuity with the Participant's
spouse as the Beneficiary, the annuity payable to the
Participant and thereafter to his Beneficiary shall
be subject to the incidental death benefit rule as
described in Section 401(a)(9)(G) of the Code and its
applicable regulations. The Administrative Committee
shall furnish each Participant no less than 30 days
nor more than 90 days before his Annuity Starting
Date a written explanation of the 50% joint and
survivor annuity in accordance with applicable law. A
Participant's Annuity Starting Date may not occur
less than 30 days after receipt of the notice.
Notwithstanding the foregoing, a Participant may,
after having received the notice, affirmatively elect
to have his benefit commence sooner than 30 days
following his receipt of the notice, provided all of
the waiver requirements set forth in Section 6.4
relating to a distribution subject to Sections
401(a)(11) and 417 are met.
(iii) Any election made in accordance with this Section
6.2(c) shall be null and void if the Participant dies
before the Annuity Starting Date.
(iv) The election of an annuity form of payment may only
be made by a Participant with an Account under the
Plan on August 23, 1999.
Participants may request a distribution form by contacting the Savings
Line (or the Administrative Committee).
If a Participant fails to elect a form of payment, distribution of the
Vested Interest of his Account will be made in a cash lump sum.
Notwithstanding the foregoing, if a Participant who has an Account
under the Plan as of August 23, 1999 is required to commence payment
under Section 401(a)(9) of the Code and fails to elect a form of
payment upon his required commencement date, payment shall be made in
annual installments in the amount necessary to satisfy the provisions
of Section 401(a)(9) of
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the Code until such time as the Participant files an election of a
payment method with the Administrative Committee in accordance with
such rules as the Administrative Committee shall prescribe. Such
minimum amount will be determined on the basis of the Participant's
life expectancy. Such life expectancy will not be recalculated.
6.3 DISTRIBUTION LIMITATION
Notwithstanding any other provision of the Plan to the contrary, all
distributions from the Plan shall conform to the regulations issued
under Section 401(a)(9) of the Code, including the incidental death
benefit provison of Section 401(a)(9) of the Code. Further, such
regulations shall override any Plan provision that is inconsistent with
Section 401(a)(9) of the Code.
6.4 WAIVER OF NOTICE PERIOD
Except as provided in the following sentence, if the value of the
vested portion of a Participant's Account exceeds $5,000, an election
by the Participant to receive a distribution prior to age 65 shall not
be valid unless the written election is made (a) after the Participant
has received the notice required under Section 1.411(a)-11(c) of the
Treasury Regulations and (b) within a reasonable time before the
effective date of the commencement of the distribution as prescribed by
said regulations. If such distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribution may
commence less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided that:
(a) the Administrative Committee clearly informs the
Participant that he 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 under
Sections 411 and 417, affirmatively elects a
distribution.
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If such distribution is one to which Sections 401(a)(11) and 417 of the
Code do apply, a Participant may, after receiving the notice required
under Sections 411 and 417 of the Code, affirmatively elect to have his
benefit commence sooner than 30 days following his receipt of the
required notice, provided all of the following requirements are met:
(i) the Administrative Committee clearly informs the Participant
that he has a period of at least 30 days after receiving the
notice to decide when to have his benefit begin, and if
applicable, to choose a particular optional form of payment;
(ii) the Participant affirmatively elects a date for benefits to
begin, and if applicable, an optional form of payment, after
receiving the notice;
(iii) the Participant is permitted to revoke his election until the
later of his Annuity Starting Date or seven days following the
day he received the notice;
(iv) the Participant's Annuity Starting Date is after the date the
notice is provided; and
(v) payment does not commence less than seven days following the
day after the notice is received by the Participant.
6.5 SMALL BENEFITS
Notwithstanding any provision of the Plan to the contrary, a lump sum
payment shall be made in lieu of all vested benefits if the value of
the Vested Interest of the Participant's Account as of his termination
of employment amounts to $5,000 or less. The lump sum payment shall
automatically be made as soon as administratively practicable following
the Participant's termination of employment.
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6.6 STATUS OF ACCOUNTS PENDING DISTRIBUTION
Until completely distributed under the Plan, the Account of a
Participant who is entitled to a distribution shall continue to be
invested as part of the funds of the Plan and the Participant shall
retain investment transfer rights as described in Section 5.2 during
the deferral period. However, loans or withdrawals shall not be
permitted during the deferral period except to the extent required by
law.
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ARTICLE VII - RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT
If a Participant retires from the service of the Company and all
Affiliated Employers on his Normal Retirement Date, he shall be
entitled to receive distribution of his Account commencing in
accordance with the provisions of Section 6.1.
7.2 LATE RETIREMENT
A Participant may continue in the service of the Employer after his
Normal Retirement Date, and in such event he shall retire on his Late
Retirement Date. Such Participant shall continue as a Participant under
this Plan until such Late Retirement Date. The Participant shall be
entitled to receive a distribution of his Account commencing in
accordance with Section 6.1.
7.3 DISABILITY RETIREMENT
A Participant who retires from the service of the Company and all
Affiliated Employers on account of Disability shall be entitled to
receive distribution of his Account commencing in accordance with the
provisions of Section 6.1.
7.4 RETIREMENT DISTRIBUTIONS
All distributions on account of retirement described in this Article
shall be made pursuant to the terms and conditions of Article VI.
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ARTICLE VIII - DEATH BENEFITS
8.1 PAYMENT TO BENEFICIARY
(a) Except as otherwise provided in Section 8.1(b), upon the death of any
Participant prior to the date of distribution on account of his
retirement or his termination of employment, the Participant's
Beneficiary shall receive a distribution of the entire value of the
Participant's Account in one lump sum payment (or, if applicable and to
the extent required by law, in the form of a survivor annuity pursuant
to Section 6.2(c) with respect to a Participant who had an Account on
August 23, 1999) commencing in accordance with Section 6.1.
(b) If, at the time of a Participant's death, the Participant was an
employee of the Company or an Affiliated Employer and the value of the
Participant's Account exceeds $5,000, the Participant's Beneficiary may
elect within 30 days after the Participant's death (or such later time
as the Administrative Committee shall prescribe) to either defer
receipt of a lump sum distribution until the fifth anniversary of the
Participant's death or to receive a distribution either (i) in the form
of variable monthly, quarterly, semi-annual or annual payments, over a
period ranging from one year to fifteen years (in whole years), the
amount of which payments shall be determined in the same manner as
described in Section 6.2(b) or (ii) in a combination of a lump sum and
installments; provided, however, that if a Beneficiary is the
Participant's surviving Spouse, the Beneficiary may elect to defer
receipt of the distribution until the April 1st following the date the
Participant would have attained age 70-1/2. Notwithstanding the
foregoing, a Beneficiary may not elect to receive payments over a
period which exceeds the Beneficiary's life expectancy. In addition, a
Beneficiary's election under this paragraph (b) shall be subject to and
paid in accordance with the applicable provisions of Section 401(a)(9)
of the Code. A Beneficiary who elects to receive installments may
revoke such election at any time and in lieu thereof elect to receive a
lump sum distribution of the balance of his or her
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Account. In addition, a Beneficiary who elects to defer receipt of a
distribution may revoke such election at any time and elect an earlier
distribution date.
(c) If a Participant dies after distribution of his Account has commenced,
the remaining portion of such Participant's Account shall be
distributed to the Participant's Beneficiary no less rapidly than under
the form of distribution elected by the Participant; provided, however,
that, if the Participant was receiving payment in installments, the
Beneficiary may, by written notice to the Administrative Committee,
elect to receive all or a portion of the distribution or the remainder
thereof in a lump sum.
(d) The Administrative Committee may require and rely upon such proof of
death and such evidence of the right of any Beneficiary or other person
to receive the value of a deceased Participant's Account as the
Administrative Committee may deem proper and its determination of death
and of the right of that Beneficiary or other person to receive payment
shall be conclusive.
8.2 BENEFICIARY DESIGNATION
(a) A Participant may from time to time designate a Beneficiary to receive
the value of his Account following the Participant's death by filing a
beneficiary designation form with the Administrative Committee.
Notwithstanding the preceding sentence, if a Participant dies leaving a
surviving Spouse before complete distribution of his Account, the
Participant's Beneficiary shall be the Participant's surviving Spouse,
unless such surviving Spouse has consented to the designation of
another Beneficiary, in a writing witnessed by a notary public, a Plan
representative or as otherwise provided by applicable law; provided,
however, the Spouse's consent shall not be required if:
(i) The Participant and his or her Spouse were not married
throughout the one year period ending on the date of the
Participant's death;
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(ii) The Administrative Committee is unable to locate the
Participant's Spouse;
(iii) The Participant is legally separated or the spouse has
abandoned the Participant and the Participant has a court
order to that effect; or
(iv) Other circumstances exist under which the Secretary of the
Treasury will excuse the consent requirement.
If the Participant's Spouse is legally incompetent to give consent, the
Spouse's legal guardian may give consent (even if the Participant is
the legal guardian).
(b) If a Participant fails to name a Beneficiary or if the Beneficiary
named by a Participant predeceases him, then the Administrative
Committee shall direct the Trustee to pay the Participant's Account to
the Participant's estate.
(c) If the Beneficiary does not predecease the Participant, but dies prior
to complete distribution of the Participant's Account, the
Administrative Committee shall direct the Trustee to pay the amounts
remaining in the Participant's Account to the Beneficiary's estate.
(d) If the Administrative Committee, after reasonable inquiry, is unable
within one year to determine whether or not any designated Beneficiary
survived the event that entitled him or her to receive a distribution
of any benefit under the Plan, the Administrative Committee shall
conclusively presume that such Beneficiary died prior to the date he or
she was entitled to a distribution.
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ARTICLE IX - VESTING
9.1 DISTRIBUTION
As of a Participant's Severance from Service Date, he shall be entitled
to receive a distribution of his entire Vested Interest. Such
distribution shall commence in accordance with the provisions of
Section 6.1(a). If, at the Severance from Service Date, the Participant
is not 100% vested, the non-vested portion of his Account will become a
Forfeiture upon the earlier to occur of (i) the date of distribution of
the Participant's Vested Interest in accordance with Section 6.1(a),
and (ii) the end of a Period of Severance applicable to the Participant
extending for sixty (60) consecutive months, and shall thereupon be
applied in accordance with Section 9.3. If less than the full amount of
a Participant's Vested Interest is distributed in accordance with
Section 6.1(a), the amount of the Forfeiture determined at the time
specified in clause (i) of the previous sentence shall be determined in
accordance with the formula [A x B/C] where "A" is the amount of the
Participant's non-vested Account balance, "B" is the portion of the
Vested Interest distributed to the Participant and "C" is the
Participant's total Vested Interest immediately prior to such
distribution.
If the amount of the vested portion of a Participant's Account at the
time of his termination of employment is zero, the Participant shall be
deemed to have received a distribution of such zero vested benefit upon
his termination of employment.
9.2 NO FURTHER RIGHTS OR INTEREST
If a Participant who has forfeited a portion of his Account has a
Reemployment Commencement Date, he may elect to repay to the Plan the
full amount of the distribution (excluding amounts attributable to the
Participant's Post-Tax Contributions and Tax-Free Rollovers, except
that the Participant may elect to repay the Plan all or part of these
amounts as well) he previously received (unadjusted by
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any subsequent gains or losses). Such right of repayment shall be
deemed waived unless repayment is made before the date that is sixty
(60) consecutive months from date of rehire. On the date on which
repayment is made, the previously forfeited amount (unadjusted by any
subsequent gains or losses) shall be restored by the Employer with
which the Participant is employed as an additional contribution. The
restored amount shall be allocated to the Participant's Account and the
repaid amount shall be invested in accordance with the provisions of
Article V. A Participant shall have no further interest in, or any
rights to, any portion of his Participant's Account that becomes a
Forfeiture due to his incurrence of a Severance from Service Date once
the Participant incurs a Period of Severance of five consecutive years.
9.3 FORFEITURE
Any Forfeiture shall be credited and allocated to reduce Matching
Contributions in the manner set forth in Section 3.2.
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ARTICLE X - WITHDRAWALS DURING SERVICE
10.1 WITHDRAWALS - POST-TAX CONTRIBUTIONS
A Participant may withdraw all or a portion of his Account which is
attributable to Post-Tax Contributions at any time, subject to the
requirements of Section 10.6.
10.2 WITHDRAWALS - TAX - FREE ROLLOVERS
A Participant who has withdrawn the entire amount available under
Section 10.1 may withdraw all or a portion of the Participant's Account
attributable to Tax-Free Rollovers at any time, subject to the
requirements of Section 10.6.
10.3 WITHDRAWALS - MATCHING CONTRIBUTIONS
A Participant who (i) is an employee of the Company or an Affiliated
Employer, (ii) is vested in all or a portion of his Account
attributable to Matching Contributions under Section 3.2, and (iii) has
withdrawn the entire amount available under Sections 10.1 and 10.2, may
withdraw all or a portion of the vested portion of his Account
attributable to his Matching Contributions, including any earnings,
contributed at least two years immediately preceding the date of
withdrawal, subject to the requirements of Section 10.6.
10.4 WITHDRAWALS AFTER AGE 59-1/2
Subject to the requirements of Section 10.6, if a Participant attains
age 59-1/2 while he is an employee of the Company or an Affiliated
Employer, a Participant may elect to withdraw all or a portion of the
following portions of his Account in the following order of priority:
(a) The portion of the Participant's Account attributable to
Post-Tax Contributions;
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(b) The portion of the Participant's Account attributable to
Tax-Free Rollovers;
(c) The vested portion of the Participant's Account attributable
to Matching Contributions;
(d) The portion of the Participant's Account attributable to
Pre-Tax Contributions.
10.5 WITHDRAWALS DURING EMPLOYMENT ON ACCOUNT OF HARDSHIP
Subject to the requirements of Section 10.6, a Participant may withdraw
on account of hardship (i) all or a portion of his Account attributable
to Pre-Tax Contributions other than the portion of his Pre-Tax
Contribution Account attributable to income on such amounts earned
after December 31, 1988, and (ii) the vested portion of his Account
attributable to Matching Contributions contributed within two years
preceding the date of the withdrawal.
Hardship withdrawals are permitted only for one of the following
immediate and heavy financial needs:
(a) Expenses for medical care described in Section 213(d) of the
Code incurred by the Participant, the Participant's Spouse, or
any dependent of the Participant or necessary for such persons
to obtain the medical care described in Section 213(d) of the
Code;
(b) Purchase (excluding mortgage payments) of a principal place of
residence of the Participant;
(c) Payment of tuition and related educational fees, and room and
board expenses, for the next 12 months of post-secondary
education for the Participant, his or her Spouse, children, or
dependents; or
(d) The need to prevent (i) the eviction of the Participant from
his principal residence or (ii) foreclosure on the mortgage of
the Participant's principal residence.
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If the Commissioner of Internal Revenue expands the list of deemed,
immediate and heavy financial needs as provided above through
publication of revenue rulings, notices or other documents of general
applicability, then such deemed immediate and heavy financial needs may
be included at the direction of the Administrative Committee in the
list for which hardship withdrawals may be made.
In order to obtain a hardship withdrawal, a Participant must satisfy
the following requirements which are deemed to be necessary to satisfy
an immediate and heavy financial need:
(1) The distribution must not be in excess of the amount of the
immediate and heavy financial need of the Participant;
(2) The Participant must have obtained all distributions other
than hardship distributions and all non-taxable loans
currently available under all tax-qualified retirement plans
maintained by the Company or all Affiliated Employers;
however, in accordance with regulations under Section (401)(k)
of the Code, taking any such action will not be required if it
is reasonably believed that the effect of taking such action
will increase the amount of the need;
(3) A Participant's Pre-Tax Contributions and Post-Tax
Contributions under this Plan and elective deferrals and
after-tax contributions under all other plans maintained by
the Company and all Affiliated Employers will be suspended for
twelve (12) months after receipt of the hardship distribution;
and
(4) The Participant's Pre-Tax Contributions (and all elective
deferrals under any other tax-qualified plan of the Company
and all Affiliated Employers) for the taxable year immediately
following the taxable year during which the hardship
distribution is received will not be allowed to be in excess
of the applicable limit under Section 402(g) of the Code for
such next taxable year less the
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amount of such Participant's Pre-Tax Contributions (and all
elective deferrals under any other tax-qualified plan) for the
taxable year during which the hardship distribution was
received.
For purposes of paragraph (3) above, "all other plans maintained by the
Company and all Affiliated Employers" shall include stock option plans,
stock purchase plans, qualified and nonqualified deferred compensation
plans and such other plans as may be designated under regulations
issued under Section 401(k) of the Code, but shall not include health
and welfare benefit plans on the mandatory employee contribution
portion of a defined benefit plan.
10.6 RULES GOVERNING WITHDRAWALS
Withdrawals under this Article X shall be subject to the following
requirements:
(a) Participants shall request an in-service withdrawal from the
Plan by contacting the Savings Line or the Administrative
Committee). A completed in-service withdrawal form must be
filed with the Administrative Committee in the case of a
hardship withdrawal under Section 10.3.
(b) In-service withdrawals shall be distributed as soon as
administratively practicable following the date the request is
received by the Plan, or if later in the case of a hardship
withdrawal, when the Administrative Committee determines the
requirements of Section 10.3 have been met.
(c) In-service withdrawals shall be taken from the Investment
Funds in which the Participant's Account is invested on a pro
rata basis. All withdrawals shall be paid in cash in a lump
sum.
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(d) The minimum amount or value of an in-service withdrawal is
$100 or, if less, the total amount or value available for
withdrawal.
10.7 NON-REPAYMENT
Withdrawals made in accordance with this Article X may not be repaid.
10.8 WITHDRAWALS WHEN NOT FULLY VESTED
If any portion of a withdrawal from a Participant's Account is
attributable to Matching Contributions and the earnings thereon and
such withdrawal is made when the Participant's Vesting Percentage is
less than one hundred percent (100%), then at any subsequent time the
Participant's Vested Interest in Matching Contributions and the
earnings thereon shall be determined in accordance with the following
formula:
Vested Interest = VP(AB + W) - W
For purposes of applying this formula: VP is the Participant's Vesting
Percentage at the relevant time; AB is the portion of the Participant's
Account attributable to Matching Contributions and the earnings
thereon, if any, at the relevant time; and W is the amount of
withdrawals made by the Participant attributable to Matching
Contributions.
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ARTICLE XI - TOP-HEAVY REQUIREMENTS
If the Plan is or becomes a Top-Heavy Plan in any Plan Year, the provisions of
this Article XI will supersede any conflicting provisions in the Plan.
11.1 DEFINITIONS
The terms used in this Article XI shall be defined as follows:
(a) Key Employee means any Participant or former Participant who
is a "key employee" as defined by Section 416(i) of the Code
and the regulations thereunder.
(b) Top-Heavy Plan means this Plan if any of the following
conditions exists:
(i) If the Top-Heavy Ratio of this Plan exceeds sixty
percent (60%) and this Plan is not part of any
Required Aggregation Group or Permissive Aggregation
Group of Plans.
(ii) If this Plan is part of a Required Aggregation Group
of plans but not part of a Permissive Aggregation
Group and the Top-Heavy Ratio for the Required
Aggregation Group exceeds sixty percent (60%).
(iii) If this Plan is part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans
and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds sixty percent (60%).
(c) Top-Heavy Ratio means:
(i) A fraction, the numerator of which is the sum of the
account balances of all Key Employees as of the
Determination Date, as defined in Section 11.1(f),
(including part of any account balance distributed in
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the five (5)-year period ending on the Determination
Date) under the aggregated defined contribution plan
or plans, and the present value of accrued benefits
under the aggregated defined benefit plan or plans
for all Key Employees as of the Determination Date,
and the denominator of which is the sum of the
account balances (including any part of any account
balance distributed in the five (5) year period
ending on the Determination Date) under the
aggregated defined contribution plan or plans for all
Participants and the present value of accrued
benefits under the defined benefit plan or plans for
all Participants as of the Determination Date, all
determined in accordance with Section 416 of the Code
and the regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator
and denominator of the Top-Heavy Ratio are adjusted
for any distribution of an accrued benefit made in
the five (5) year period ending on the Determination
Date.
(ii) For purposes of (i) above, (A) the value of account
balances will be determined as of the most recent
Determination Date, and (B) the present value of
accrued benefits will be determined as of the most
recent valuation date used for computing minimum
funding costs, that falls within or ends with the
twelve (12) month period ending on the Determination
Date. The account balances and accrued benefits of a
Participant (A) who is not a Key Employee but who was
a Key Employee in a prior year, or (B) who has not
performed services for the Employer at any time
during the five (5) year period ending on the
Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are
taken into account will be made in accordance with
Section 416 of the Code and the regulations
thereunder and for such purpose the value of account
balances shall not include amounts attributable to
employee contributions.
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(iii) Solely for the purpose of determining if the Plan, or
any other plan included in a Required Aggregation
Group of which this Plan is a part, is top-heavy, the
accrued benefit of an Employee other than a Key
Employee shall be determined under (A) the method, if
any, that uniformly applies for accrual purposes
under all plans maintained by the Company and all
Affiliated Employers, or (B) if there is no such
method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the
fractional accrual rule of Section 411(b)(1)(C) of
the Code.
(d) Required Aggregation Group means (i) each qualified plan of
the Company and the Affiliated Employers in which at least one
Key Employee participates, and (ii) any other qualified plan
of the Company and the Affiliated Employers which enables a
plan described in (i) to meet the requirements of Section
401(a)(4) or 410 of the Code.
(e) Permissive Aggregation Group means the Required Aggregation
Group of plans plus any other plan or plans of the Company and
the Affiliated Employers which, when considered as a group with
the Required Aggregation Group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
(f) Determination Date means, with respect to any Plan Year
subsequent to the first Plan Year, the last day of the
preceding Plan Year and, with respect to the first Plan Year,
the last day of such Plan Year.
(g) Participant includes, for purposes of this Article XI, former
Participants and any Beneficiary of such Participants.
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11.2 MINIMUM EMPLOYER CONTRIBUTIONS
For any Plan Year in which the Plan is Top-Heavy, the Employer shall
make contributions for a Participant who is not a Key Employee in an
amount equal to (a) where the Plan is not part of a Required
Aggregation Group which includes a defined benefit plan the lesser of
(i) three percent (3%) of such Participant's Compensation for such Plan
Year, or (ii) the largest percentage of Employer contributions (stated
as a percentage of the Key Employee's maximum compensation) allocated
on behalf of any Key Employee for that year. However, if a defined
benefit plan which benefits a Key Employee depends on this Plan to
satisfy the nondiscrimination rules of Section 401(a)(4) of the Code or
the coverage rules of Section 410 of the Code (or another plan
benefiting the Key Employee so depends on such defined benefit plan),
the allocation shall be three percent (3%) of Compensation for the
Participants who are not Key Employees for the Plan Year regardless of
the contribution rate for the Key Employees.
Notwithstanding the preceding paragraph, for a Plan Year, a Participant
covered under this Plan, which is determined to be Top Heavy, and a Top
Heavy defined benefit plan, shall receive the defined benefit minimum
from the Top Heavy defined benefit plan. Further, for a Plan Year, a
Participant covered under this Plan, which is determined to be Top
Heavy, and another Top Heavy defined contribution plan, shall receive
the defined contribution minimum from this Plan.
For purposes of determining the amount of the Employer's minimum
required contribution under this Section 11.2, Pre-Tax Contributions to
Highly Compensated Employees shall be treated as contributions made by
the Employer; however, Pre-Tax Contributions shall not be treated as
Employer contributions for purposes of satisfying the Employer's
minimum contribution obligation. The contribution required by this
Section shall be allocated to Participants who have not separated from
service at the end of the Plan Year including, without limitation,
individuals who declined to elect or make Pre-Tax Contributions.
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11.3 EFFECT ON ALLOCATION LIMITATIONS
In any Plan Year prior to January 1, 2000 in which the Top-Heavy Ratio
exceeds sixty percent (60%), the dollar limitations set forth in
Section 415(e)(2)(B) and 415(e)(3)(B) shall be multiplied by 1.0 rather
than 1.25.
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ARTICLE XII - FIDUCIARY DUTIES AND RESPONSIBILITIES
12.1 GENERAL FIDUCIARY STANDARD OF CONDUCT
Each Fiduciary of the Plan shall discharge his duties hereunder solely
in the interest of the Participants and their Beneficiaries and for the
exclusive purpose of providing benefits to Participants and their
Beneficiaries and defraying reasonable expenses of administering the
Plan. Each Fiduciary shall act with the care, skill, prudence and
diligence under the circumstances that a prudent man acting in a like
capacity and familiar with such matters would use in conducting an
enterprise of like character and with like aims, in accordance with the
documents and instruments governing this Plan, insofar as such
documents and instruments are consistent with this standard.
To the extent permitted by ERISA, each Fiduciary of the Plan shall be
solely responsible for such person's own acts or omissions. Except as
otherwise provided in ERISA, no Fiduciary shall have the duty to
question whether any other Fiduciary is fulfilling all the
responsibilities imposed upon such other Fiduciary by ERISA. No
Fiduciary shall have any liability for a breach of fiduciary
responsibility of another Fiduciary with respect to the Plan unless
such person (a) knowingly participates in, or knowingly undertakes to
conceal, an act or omission of such other Fiduciary, knowing such act
or omission is a breach, (b) has actual knowledge of a breach by such
other Fiduciary and fails to take reasonable remedial action to remedy
such breach, or (c) through such person's negligence in performing his
own fiduciary responsibilities which gave rise to his status as a
Fiduciary, has enabled such other Fiduciary to commit a breach of the
latter's fiduciary responsibilities.
12.2 PLAN PARTICIPATION AND COMPENSATION OF FIDUCIARIES
Nothing in this Plan shall be construed to prevent any Fiduciary from
receiving any benefit to which he may be entitled as a Participant or
Beneficiary in this Plan, so
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long as the benefit is computed and paid on a basis which is consistent
with the terms of this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to prevent any
Fiduciary from receiving any reasonable compensation for services
rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan; except that no
person so serving who already receives full-time pay from an Employer
shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
12.3 TRUST AGREEMENT
The assets of the Plan shall be held in the Trust by one or more
Trustees selected by Seagram and pursuant to the terms of a trust
agreement. The trust agreement shall provide that:
(a) Subject to Participants' investment elections, the assets of
the Trust shall be invested and reinvested in such investments
as either the Trustee or investment managers appointed by
Seagram deem advisable from time to time;
(b) The Investment Committee has concurrent authority, exercisable
at its sole discretion, to direct the Trustee as to the sale
or purchase of particular assets;
(c) The Trustee has the authority to vote the Common Shares,
either in person or by proxy, in accordance with the
Investment Committee's instructions;
(d) The Trustee has the authority to sell all or a portion of the
Common Shares held by the Trust in accordance with the
Investment Committee's instructions; and
(e) The Trustee has the authority to acquire Common Shares through
purchases on the open market, and, if Seagram so provides in
writing, to acquire Common Shares in such other manner as
Seagram shall authorize.
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12.4 APPOINTMENT OF INVESTMENT MANAGERS
Seagram shall have authority to appoint investment managers to manage
all or a portion of the Trust. In the event an investment manager is
appointed, the Trustee shall not have discretionary authority over the
Trust assets managed by the investment manager.
12.5 INVESTMENT MANAGER POWERS
Subject to the investment elections made by Participants and to the
investment management agreement, an investment manager shall have the
power to invest and reinvest the Trust assets (including the authority
to acquire and dispose of Plan assets) for which it has been given
discretionary authority, as it deems advisable.
12.6 POWER TO DIRECT INVESTMENTS
Seagram retains no authority or responsibility over the management,
acquisition or disposition of Plan assets except with respect to
Seagram's power to select, retain and replace Trustees, investment
managers and members of the Investment Committee and in the
determination of the Plan's investment policies and objectives.
12.7 RETURN OF EMPLOYER CONTRIBUTIONS
Except as otherwise provided in the Plan in accordance with applicable
law, in the case of an Employer contribution which is made by virtue of
a mistake of fact, nothing in the Plan shall prohibit the return of
such contributions to the Employer within one (1) year after the
payment of the contribution. If an Employer contribution is conditioned
upon the deductibility of the contribution under Code Section 404 or
any successor provision thereto, then, to the extent such contribution
is disallowed, nothing in the Plan shall prohibit the return to an
Employer of such contribution (to the extent disallowed) within one (1)
year after such disallowance of
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the deduction. For this purpose, all contributions made by the Employer
on expressly declared to be conditioned upon their deductibility under
Section 404 of the Code.
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ARTICLE XIII - PLAN ADMINISTRATION
13.1 APPOINTMENT OF ADMINISTRATIVE COMMITTEE
The Plan shall be administered by Seagram through an Administrative
Committee which shall be appointed by Seagram and may be removed by
Seagram, for any reason, at its discretion. The Administrative
Committee shall consist of not less than three (3) members, except that
the Administrative Committee may temporarily function with less than
three (3) members due to the resignation or removal of one or more of
its Administrative Committee members provided all actions not
previously allocated to any of the Administrative Committee members who
have not resigned or been removed are taken unanimously. Unless Seagram
otherwise provides, any member of the Administrative Committee who is
an employee of Seagram, the Company or an Affiliate at the time of his
or her appointment shall be deemed to have resigned from the
Administrative Committee when no longer an Employee. employees of
Seagram, the Company or an Affiliated Employer shall receive no
compensation for their services rendered to or as members of the
Administrative Committee but the Employer shall pay all direct expenses
of the Administrative Committee, except to the extent paid by the Trust
(as permitted by ERISA).
13.2 ACTION BY ADMINISTRATIVE COMMITTEE
(a) The Administrative Committee shall act by a majority of its members,
except that the Administrative Committee may allocate its rights and/or
responsibilities among one or more of its members and may delegate any
of its rights and/or responsibilities to any person or persons selected
by it. Administrative Committee action may be taken either by vote at a
meeting (including a meeting by telephone conference) or in writing
without a meeting and shall be evidenced by a written resolution or
memorandum signed by at least two members or by one member and the
Secretary of the Administrative Committee.
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(b) The Administrative Committee may authorize in writing any person to
execute any document or documents on its behalf, and any interested
person, upon receipt of notice of such authorization directed to it,
may thereafter accept and rely upon any document executed by such
authorized person until the Administrative Committee shall deliver to
such interested person a written revocation of such authorization.
(c) A member of the Administrative Committee who is also a Participant
shall not vote or act upon any matter relating to himself or herself
(except for matters that relate to Participants generally).
13.3 POWERS AND DUTIES OF THE ADMINISTRATIVE COMMITTEE
The Administrative Committee shall have full discretion to construe the
terms of the Plan and interpret its provisions and shall also have the
right, power, duty and responsibility to perform all administrative
functions and make all administrative decisions with respect to the
Plan including, the right, power, duty and responsibility to:
(i) Determine all questions of fact or interpretations that may
arise under the Plan with any such determination to be
conclusively binding upon all interested parties;
(ii) Direct the Trustee to pay benefits under the Plan and to
withhold appropriate amounts in accordance with applicable
law;
(iii) Promulgate rules as it shall deem necessary and proper for the
administration of the Plan;
(iv) Determine the rights of eligibility of an Employee to
participate in the Plan;
(v) Direct the Trustee regarding the establishment and maintenance
of Participants' Accounts;
(vi) Establish a claims procedure;
(vii) Review and render decisions regarding claims for benefits
under the Plan;
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(viii) Cause the Plan to comply with the reporting and disclosure
requirements of ERISA;
(ix) Recommend Plan amendments it deems appropriate; and
(x) Engage the service of agents, independent counsel, consultants
and advisers which it deems advisable to assist it with the
performance of its duties, and, to the extent not paid by the
Employer, to compensate them out of Plan assets.
In addition to the foregoing, the Administrative Committee shall have
all the rights, powers, duties and responsibilities granted or imposed
upon it elsewhere in the Plan or by applicable law.
13.4 APPOINTMENT OF INVESTMENT COMMITTEE
Seagram may appoint, and shall have the power to remove, for any
reason, an Investment Committee to administer the investment functions
of the Plan. The Investment Committee shall consist of not less than
three (3) nor more than five (5) members, except that the Investment
Committee may temporarily function with less than three (3) members due
to the resignation or removal of one or more of its members, provided
all actions not previously allocated to any of the Investment Committee
members who have not resigned or been removed are taken unanimously.
Unless Seagram otherwise provides, any member of the Investment
Committee who is an employee of Seagram, the Company or an Affiliated
Employer at the time of his appointment shall be considered to have
resigned from the Investment Committee when no longer an employee.
Employees of Seagram, the Company or an Affiliated Employer shall
receive no compensation for their services rendered to or as members of
the Investment Committee but the Employer shall pay all direct expenses
of the Investment Committee, except to the extent paid by the Trust (as
permitted by ERISA). If Seagram does not appoint an Investment
Committee or if an Investment Committee has been removed by Seagram and
no other Investment Committee
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appointed, the Administrative Committee shall assume the powers,
duties, and responsibilities of the Investment Committee hereunder.
13.5 ACTION BY THE INVESTMENT COMMITTEE
(a) The Investment Committee shall act by a majority of its members,
except that the Investment Committee may allocate its responsibilities
among one or more of its members and may delegate its responsibilities
to any person or persons selected by it. Investment Committee action
may be taken either by vote at a meeting (including a meeting by
telephone conference) or in writing without a meeting and shall be
evidenced by a written resolution or memorandum signed by at least two
members or by one member and the Secretary of the Investment
Committee.
(b) The Investment Committee may authorize in writing any person to execute
any document or documents on its behalf, and any interested person,
upon receipt of notice of such authorization directed to it, may
thereafter accept and rely upon any document executed by such
authorized person until the Investment Committee shall deliver to such
interested person a written revocation of such authorization.
(c) A member of the Investment Committee who is also a Participant shall
not vote or act upon any matter relating to himself or herself (except
for matters that relate to Participants generally).
13.6 INVESTMENT COMMITTEE POWERS AND DUTIES
The Investment Committee shall have the exclusive responsibility for
implementing the Plan's investment and funding policies and objectives
by communicating them to the Plan's Trustee and investment managers. In
addition, subject to the investment polices and objectives established
by Seagram, the Investment Committee shall have the right, power, duty,
and responsibility to:
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(i) Recommend changes to the Plan's investment and funding
policies and objectives to Seagram, from time to time, as it
deems appropriate;
(ii) Monitor and evaluate the performance of the Trustee and
investment managers and report regularly, at least annually,
to Seagram with respect to the Investment Committee's findings
and recommendations;
(iii) Subject to Participants' investment elections, direct an
investment manager or a Trustee with respect to the sale or
purchase of particular assets, provided, that the Investment
Committee shall only have the power to direct an investment
manager to the extent permitted by Seagram's agreement with
such investment managers;
(iv) Direct the Trustee regarding the voting and tendering of
Common Shares, except that if Seagram determines that a
conflict of interest exists (including a tender offer (as such
term is used in Section 14(d) of the Securities Exchange Act
of 1934) by a person or entity which is not an Employer)
between the Investment Committee's fiduciary duties to the
Plan and the Committee member's individual responsibilities to
the Employer, the Participants, rather than the Investment
Committee, shall direct the Trustee, on a form prescribed by
the Investment Committee, as to the voting and tendering of
the Common Shares which are credited to their Account and the
Trustee shall vote or tender the Common Shares for which no
instructions have been received in the same manner on a
proportionate basis, as the Common Shares for which
instructions have been received; and
(v) Engage the service of agents, independent counsel, consultants
and advisers which it deems advisable to assist it with the
performance of its duties, and, to the extent not paid by the
Employer, to compensate them out of Plan assets.
In addition to the foregoing, the Investment Committee shall have all
the rights, powers, duties and responsibilities granted or imposed upon
it elsewhere in the Plan.
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13.7 POWERS AND DUTIES OF SEAGRAM
Seagram shall have the exclusive responsibility for:
(i) The selection and retention of the Plan's Trustee;
(ii) The selection and retention of the Plan's investment managers;
(iii) The determination of the Plan's investment and funding
policies and objectives;
(iv) The selection and retention of members of the Administrative
Committee and Investment Committee;
(v) The determination that a conflict of interest exists,
requiring that voting of Common Shares held in the Plan be
passed through to Participants whose Accounts are invested, in
whole or in part, in Common Shares;
(vi) The determination that a tender offer (as such term is defined
in Section 14(d) of the Securities Exchange Act of 1934)
exists, requiring the pass through to Participants whose
Accounts are invested, in whole or in part, in Common Shares
of certain investment decisions; and
(v) The authorization of the Trustee to acquire Common Shares in a
manner other than through the purchase of shares on the open
market.
In addition to the foregoing, Seagram shall have all the rights,
powers, duties and responsibilities granted or imposed upon it
elsewhere in the Plan.
13.8 ACTION BY SEAGRAM
Seagram shall act by resolution of the Board.
13.9 DESIGNATION OF FIDUCIARY AUTHORITY
The Administrative Committee, Investment Committee and Seagram may
designate persons, including persons other than "named fiduciaries" as
defined in ERISA Section402(a)(2), to carry out its rights, powers,
duties and responsibilities. Any person,
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corporation or other entity may serve in more than one fiduciary
capacity under the Plan.
13.10 RELIANCE ON ADVISORS
The Administrative Committee, Investment Committee and Seagram shall be
entitled to rely upon the advice, opinions, reports, statements and
certificates of counsel, consultants, accountants and other experts
retained by them.
13.11 INDEMNIFICATION OF FIDUCIARIES
(a) The Employer shall indemnify and save harmless each member of the
Administrative Committee and the Investment Committee, and each
officer, employee and agent of Seagram or the Employer from and against
any and all loss resulting from liability to which he or she may be
subject by reason of any act or conduct (except actions taken in bad
faith) or negligence (except for gross negligence) taken in his
official capacity in the administration of the Plan or Trust. This
indemnification shall include all expenses reasonably incurred in
defending a fiduciary. This indemnification is not intended to relieve
any member of the Administrative Committee or the Investment Committee
from any liability he may have under ERISA for breach of a fiduciary
duty or otherwise under part 4 of Title I of ERISA.
(b) This Section shall not extend to the Trustee unless it is specifically
extended to the Trustee by separate written agreement executed by the
Trustee and Seagram.
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ARTICLE XIV - PARTICIPANTS' RIGHTS
14.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES
The Plan is established and the Plan assets are held for the exclusive
purpose of providing benefits for Participants and their Beneficiaries.
14.2 FILING A CLAIM FOR BENEFITS
A Participant or Beneficiary or the Employer acting in his behalf,
shall notify the Administrative Committee of a claim of benefits under
the Plan. Such request shall be in writing to the Administrative
Committee and shall set forth the basis of such claim and shall
authorize the Administrative Committee to conduct such examinations as
may be necessary to determine the validity of the claim and to take
such steps as may be necessary to facilitate the payment of any
benefits to which the Participant or Beneficiary may be entitled under
the terms of the Plan.
14.3 DENIAL OF CLAIM
Whenever a claim for benefits by any Participant or Beneficiary has
been denied by the Administrative Committee, a written notice, prepared
in a manner calculated to be understood by the Participant, must be
provided, setting forth (a) the specific reasons for the denial; (b)
the specific reference to pertinent Plan provisions on which the denial
is based; (c) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why such material or information is necessary, and (d) an explanation
of the Plan's claim review procedure.
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14.4 REMEDIES AVAILABLE TO PARTICIPANTS
A Participant or Beneficiary may (a) request a review by the
Administrative Committee, upon written application, (b) review
pertinent Plan documents, and (c) submit issues and comments in writing
to the Administrative Committee. A Participant or Beneficiary shall
have sixty (60) days after receipt by the claimant of written
notification of a denial of a claim to request a review of a denied
claim.
A decision by the Administrative Committee shall be made promptly and
not later than sixty (60) days after the Administrative Committee's
receipt of a request for review, unless special circumstances require
an extension of the time for processing, in which case a decision shall
be rendered as soon as possible, but not later than one hundred twenty
(120) days after receipt of a request for review. The decision on
review by the Administrative Committee shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based.
14.5 LIMITATION OF RIGHTS
Participation hereunder shall not grant any Participant the right to be
retained in the service of the Employer or any other rights or interest
in the Plan other than those specifically herein set forth.
14.6 MERGERS OR TRANSFERS
In the case of any merger with or transfer of assets or liabilities to
any other defined contribution plan, the following conditions must be
met:
(a) The sum of the Account balances in each plan shall equal the
fair market value (determined as of the date of the merger or
transfer) of the entire plan assets.
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(b) The assets of each plan shall be combined to form the assets
of the plan as merged (or transferee).
(c) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferee) shall have an Account balance
equal to the sum of the Account balances the Participant had in
the plans immediately prior to the merger (or transfer).
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ARTICLE XV - AMENDMENT OR TERMINATION OF THE PLAN
15.1 AMENDMENT OF PLAN
Seagram shall have the right from time to time to modify or amend, in
whole or in part, any or all provisions of the Plan. The authority of
Seagram to act in accordance with the previous sentence may be
delegated by the Board to one or more committees thereof or to one or
more officers of Seagram. Any action by Seagram or such committee shall
be undertaken either by resolution duly adopted at a meeting or by
written consent in lieu of a meeting, in either case in accordance with
the By-Laws of Seagram and applicable state law.
No amendment shall deprive any Participant or Beneficiary of any Vested
Interest hereunder. Any Participant having a Period of Service of not
less than three (3) years shall be permitted to elect, in writing, to
have his Vesting Percentage computed under the Plan without regard to
such. The period during which the election must be made by the
Participant shall begin no later than the date the Plan amendment is
adopted and end no later than after the latest of the following dates:
(a) The date which is sixty (60) days after the day the amendment
is adopted;
(b) The date which is sixty (60) days after the day the amendment
becomes effective;
(c) The date which is sixty (60) days after the day the
Participant is issued written notice of the amendment by the
Company or the Administrative Committee.
15.2 TERMINATION OF THE PLAN
The Company intends to continue the Plan indefinitely for the benefit
of its Employees, but Seagram reserves the right to terminate the Plan
at any time by action of its board of directors. Any such action of the
board shall be undertaken in the
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manner described in Section 15.1. Upon such termination, the liability
of the Employer to make contributions hereunder shall terminate. The
Plan shall terminate automatically upon complete discontinuance of
contributions hereunder.
15.3 FULL VESTING
Upon the termination or partial termination of the Plan, or upon
complete discontinuance of Matching Contributions, the rights of all
affected Participants in and to the amounts credited to each such
Participant's Account shall be one hundred percent (100%) vested and
nonforfeitable. Thereupon, each Participant shall receive a total
distribution of his Participant's Account (including any amounts in the
Forfeiture account allocated in accordance with Section 15.4) in
accordance with the terms and conditions of Article VI.
15.4 APPLICATION OF FORFEITURES
Upon the termination of the Plan, any amount in the Forfeiture account
which has not been allocated as of such termination shall be allocated
and credited to each Participant's Account of the then Participants in
the same manner as the last Matching Contribution made under the Plan.
15.5 SUBSEQUENT UNFAVORABLE DETERMINATION BY THE INTERNAL REVENUE SERVICE
If the Company is notified subsequent to initial favorable
qualification that the Plan is no longer qualified within the meaning
of Section 401(a) of the Code, or that the Trust is no longer entitled
to exemption under the provisions of Section 501(a), and if the
Employer shall fail within a reasonable time to make any necessary
changes in order that the Plan and/or Trust shall so qualify, the
Participants' Accounts shall be fully vested and nonforfeitable and
shall be disposed of in the manner set forth in Sections 15.3 and 15.4
above.
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Page 67
ARTICLE XVL - MISCELLANEOUS
16.1 NON-REVERSION
This Plan has been established by the Employer for the exclusive
benefit of the Participants and their Beneficiaries. Except as provided
under Section 12.7, under no circumstances shall any funds contributed
hereunder at any time revert to or be used by the Employer, nor shall
any such funds or assets of any kind be used other than for the benefit
of the Participants or their Beneficiaries.
16.2 GENDER AND NUMBER
When necessary to the meaning hereof, and except when otherwise
indicated by the context, either the masculine or the neuter pronoun
shall be deemed to include the masculine, the feminine, and the neuter,
and the singular shall be deemed to include the plural.
16.3 GOVERNING LAW
The Plan and Trust shall be governed and construed in accordance with
the laws of the State of New York except to the extent preempted by
federal law.
16.4 COMPLIANCE WITH THE CODE AND ERISA
This Plan is intended to comply with all requirements for qualification
under the Code and ERISA, and if any provision hereof is subject to
more than one interpretation or any term used herein is subject to more
than one construction, such ambiguity shall be resolved in favor of
that interpretation or construction which is consistent with the Plan
being so qualified. If any provision of the Plan is held invalid or
unenforceable,
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such invalidity or unenforceability shall not affect any other
provision, and this Plan shall be construed and enforced as if such
provision had not been included.
16.5 NON-ALIENATION
It is a condition of the Plan, and all rights of each Participant shall
be subject thereto, that no right or interest of any Participant in the
Plan shall be assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including, but without
limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy, or in any other manner, and no right or interest of any
Participant in the Plan shall be liable for or subject to any
obligation or liability of such Participant. The preceding sentence
also shall apply to the creation, assignment or recognition of a right
to any benefit payable to a Participant pursuant to a domestic
relations order, unless such order is determined to be a qualified
domestic relations order (as defined in Section 414(p) of the Code).
The Administrative Committee shall establish reasonable procedures to
determine the qualified status of a domestic relations order in
accordance with the requirements of Section 414(p) of the Code and
Section 206(d) of ERISA. An alternate payee under a qualified domestic
relations order may receive a distribution from this Plan at any time,
including prior to the date the Participant to whom the order relates
attains the earliest retirement age under the Plan.
16.6 ACTION BY THE EMPLOYER OR SEAGRAM
Except as otherwise provided herein, any action required to be taken by
an Employer or Seagram pursuant to the terms of the Plan shall be taken
by its board of directors or a committee thereof or any person or
persons duly empowered to exercise the powers of the Employer or
Seagram, as the case may be, with respect to the Plan.
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APPENDIX A
VOLUNTARY INVESTMENT PROGRAM
Effective as of January 1, 1991, the assets and liabilities of the Pension Plan
for Employees of PolyGram Records, Inc. and Affiliated Companies attributable to
the Voluntary Investment Program ("VIP") account balances of certain employees
were transferred to this Plan. The provisions of this Appendix A shall be
applicable to such account balances.
1. INVESTMENT
The Participant's VIP account balance shall be invested at the
discretion of the Trustee in one of the Investment Funds or in one or
more separate investments; provided, however, that the Investment
Committee may elect to direct the Trustee as to the investment of the
VIP account balance or to permit the Participant to elect to invest the
VIP account balance in one or more Investment Funds. Any such election
by the Participant shall be in accordance with Section 5.2 of the Plan.
2. VESTING
A Participant at all times shall be 100% vested in his VIP account
balance.
3. FUTURE CONTRIBUTIONS
No future contributions to the VIP shall be permitted.
4. WITHDRAWAL
While in the employ of the Company or an Affiliated Employer, a
Participant may elect to withdraw all or any portion of the lesser of
the aggregate deposits made to the Participant's VIP account; or the
fair market value of his VIP account. Thereafter, a
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Participant may withdraw the excess, if any, of the fair market value
of his VIP account balance over the aggregate deposits made to his VIP
account (i) upon a determination by the Administrative Committee that
the Participant intends to use the money for necessary personal
expenses, such as the purchase or renovation of a home, education of
children, or an unusual financial emergency, or (ii) upon at least
thirteen (13) months' advance notice to the Administrative Committee.
5. PAYMENT OF ACCOUNT BALANCE
Upon termination of a Participant's employment for any reason,
including death, a Participant's VIP account balance shall be
distributed to him in the manner chosen by the Participant from among
the following:
(a) a lump sum payment;
(b) installments over a period of time, including, if applicable,
installments under options provided by an automatic withdrawal
plan under the contract of a mutual fund comprising part of
the Participant's VIP account, or
(c) purchase of an immediate or deferred nontransferable annuity.
The manner of such distribution for any married Participant who chooses
payment in the form of an annuity shall be pursuant to the qualified
joint and survivor annuity requirements of Section 6.2(c).
Any distribution in installments or annuity contract payments shall not
be for a period in excess of the Participant's life expectancy, except
in the case of a qualified joint and survivor annuity for the
Participant and his spouse.
ii
<PAGE> 76
Upon the discontinuance of this Appendix A, the Account of each
Participant hereunder shall be distributed in a manner as described in
Section 5 above.
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<PAGE> 77
APPENDIX B
PROVISIONS RELATING TO PARTICIPANTS WHO
WERE FORMERLY PARTICIPANTS IN THE ISLAND
ENTERTAINMENT GROUP, INC. RETIREMENT PLAN
1. EFFECTIVE DATE
Effective as of January, 1, 1991, the Island Entertainment Group, Inc.
became a participating employer in the Plan and the Island
Entertainment Group, Inc. Retirement Plan (the "Island Plan") was
merged with and into the Plan.
2. ELIGIBILITY
Employees of the Island Entertainment Group, Inc. who were participants
in the Island Plan on January 1, 1991, or who were eligible to become
participants in the Island Plan as of January 1, 1991, shall be
eligible to participate in the Plan as of January 1, 1991. Each other
Island Entertainment Group, Inc. employee (other than an employee who
is covered by a collective bargaining agreement) shall be eligible to
participate in the Plan upon satisfaction of the eligibility
requirements.
3. ADMINISTRATION OF CONTRIBUTIONS TO THE ISLAND PLAN
The portion of a Participant's Account attributable to the
Participant's contributions to the Island Plan shall be administered as
follows:
(a) pay conversion contributions shall be administered as Pre-Tax
Contributions;
(b) matching and regular contributions shall be administered as
Matching Contributions; and
(c) voluntary contributions shall be administered as Post-Tax
Contributions.
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<PAGE> 78
4. LOANS
Loans outstanding under the Island Plan on January 1, 1991 will
continue to be administered according to their terms and will be held
as an investment of the Plan. No further loans shall be available
except in accordance with the terms of the Plan.
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<PAGE> 79
APPENDIX C
LOANS
1.01 A Participant shall be entitled to a loan from his Account subject to
the following terms and conditions:
(a) Loans shall be made available to all Participants on an equal basis in
accordance with the written procedure established by the Administrative
Committee and communicated to Participants. Loans shall be available by
contacting the Savings Line (or, if unable to use the Savings line, in
writing, on a form prescribed the Administrative Committee for such
purpose) and shall be based solely upon the Participant's vested
balances in his Account and conditioned upon the repayment of any
existing Plan loan. In particular, loans shall not be made available to
Participants who are Highly Compensated Employees, officers, or
shareholders in percentage amounts greater than the percentage amounts
of the values described in paragraph (b) below made available to other
Participants;
(b) The principal amount of a loan to a Participant may not exceed the
lesser of (i) $50,000 (reduced by the highest outstanding balance of
Plan loans during the twelve (12) month period ending on the day before
the date on which the loan was made), or (ii) fifty percent (50%) of
the Participant's vested interest in his Account which includes any
outstanding loan balance as of the last date for which data are
available, but which shall in no event be more than twelve (12) months
prior to such loan. For purposes of clause (i), the Plan and all other
"qualified retirement plans" (as defined in Section 72(p)(4)of the
Code) maintained by the Company and all Affiliated Employers shall be
treated as a single plan.
(c) Loans shall be made at the prime rate as of the first day of the month
in which such loan is made (or the first business day immediately
following such date), as
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<PAGE> 80
announced in the Wall Street Journal (or to the extent the Wall Street
Journal ceases to be published, such other newspaper selected by the
Administrative Committee) plus one percentage point, or such other
interest rate as may later be designated by the Administrative
Committee for subsequent loans.
(d) Loans shall be amortized in substantially level payments, made not less
frequently than quarterly, for a period of not less than twelve months
and not more than five (5) years according to nondiscriminatory rules
established by the Administrative Committee, provided, however, that
(i) the principal and interest on a loan which is to be used to acquire
a principal residence of the Participant may be amortized over a period
of fifteen years; (ii) loan repayments will be suspended under the Plan
as permitted under Section 414(u) of the Code, (iii) prepayment in
whole at any time shall be permitted; and (iii) loans shall be repaid
through payroll deduction. Loans shall be repaid in full upon
termination of employment;
(e) The loan obligation of the Participant shall be evidenced by a
promissory note which shall contain the terms of repayment and such
other terms and provisions as may be necessary or advisable;
(f) The obligation of the Participant shall be secured by up to fifty
percent (50%) of the vested balance of the Account maintained for the
Participant in the Plan;
(g) The portion of any such repayment of principal or payment of interest
credited to an Account shall be invested in and credited to the
investment funds in accordance with such Participant's current
investment direction pursuant to Article V; and
(h) Only one loan may be outstanding at any time and the minimum loan shall
be $ l,000. The Administrative Committee may prescribe such additional
rules and procedures as it may deem appropriate, including, without
limitation, rules and procedures by which the making of loans to
Participants or to any class of Participants may be terminated,
suspended, or restricted, if and to the extent deemed by the
Administrative Committee
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to be necessary or desirable in order to effect compliance with
applicable laws and regulations.
APPENDIX D
PROVISIONS RELATING TO EMPLOYEES OF MOTOWN
1. EFFECTIVE DATE
Prior to January 1, 1994 (the "Motown Effective Date"), Motown Record
Company, L.P. and its participating affiliates (collectively, "Motown")
sponsored The Golden Savings Plan (the "Golden Plan"). Effective as of
the Motown Effective Date, each such company became an Employer under
the Plan and the Golden Plan was merged with and into the Plan. As of
the Motown Effective Date, the provisions of the Plan (including,
without limitation, the provisions of this Appendix D) shall govern the
benefits available to Motown employees who were in the employ of Motown
on or after the Motown Effective Date.
2. ELIGIBILITY AND VESTING
Employees of Motown who were participants in the Golden Plan or
eligible to participate in the Golden Plan immediately prior to the
Motown Effective Date shall be eligible to participate in the Plan as
of the Motown Effective Date. Each other Motown employee (other than an
employee who would otherwise be excluded from participation in the Plan
under Section 1.15 of the Plan) shall be eligible to participate in the
Plan upon satisfaction of the eligibility requirements set forth in
Article II of the Plan. For purposes of calculating a Motown employee's
Vesting Service, such employee's Employment Commencement Date shall be
deemed to be the later of (i) January 1, 1993 and (ii) the date of such
employee's employment with Motown.
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3. CONTRIBUTIONS
"Deferrals" under the Golden Plan shall be administered as Pre-Tax
Contributions.
4. ACCOUNT TRANSFERS
Unless a participant in the Golden Plan elects a different account
allocation in the manner prescribed by the Administrative Committee for
this purpose, on or as soon as practicable after the Motown Effective
Date, amounts held in the Golden Plan shall be transferred to the
Investment Accumulation Fund of the Plan.
5. LOANS
Loans outstanding under the Golden Plan on the Motown Effective Date
will continue to be administered in accordance with their terms and
will be held as an investment of the Plan. No further loans shall be
available except in accordance with the terms of the Plan.
Except as otherwise amended hereby, the Plan shall remain in full force
and effect.
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APPENDIX E
PROVISIONS RELATING TO ELIGIBLE ROLLOVER DISTRIBUTIONS
This Appendix E 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 Appendix, a distributee may elect, at
any time and in the manner prescribed by the Administrative 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.
1. DEFINITIONS
(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: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities); and any hardship distribution described
in Section 401(k)(2)(B)(i)(IV) of the Code.
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However,
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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 Section
414(p) of the Code, 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.
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APPENDIX F
PROVISIONS RELATING TO EMPLOYEES OF ISLAND L.A., INC.
1. ELIGIBILITY AND VESTING
Employees of Island L.A., Inc. and its participating affiliates
(collectively, "Island") who were participants in the Island L.A., Inc.
Retirement Plan immediately prior to January 1, 1995 (the "Island
Effective Date") shall be eligible to participate in the Plan as of the
Island Effective Date. Each other Island employee (other than an
employee who would otherwise be excluded from participation in the Plan
under Section 1.15 of the Plan) shall be eligible to participate in the
Plan upon satisfaction of the eligibility requirements set forth in
Article II of the Plan. For purposes of calculating an Island
employee's Vesting Service, such employee's Employment Commencement
Date shall be deemed to be the date of such employee's employment with
Island.
Except as otherwise amended hereby, the Plan shall remain in full force
and effect.
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APPENDIX G
PROVISIONS RELATING TO EMPLOYEES OF ITC ENTERTAINMENT GROUP, INC.
1. EFFECTIVE DATE
Prior to January 1, 1996 (the "ITC Effective Date"), ITC Entertainment
Group, Inc. and its participating affiliates (collectively, "ITC")
sponsored the ITC Entertainment Group. Inc. Retirement Plan (the "ITC
Plan"). Effective as of the ITC Effective Date, each such company
became an Employer in the Plan and the ITC Plan was frozen such that no
ITC employee hired after the ITC Effective Date could participate in
the ITC Plan, and the ITC Plan was subsequently terminated effective
June 30, 1996. As of the ITC Effective Date, the provisions of the Plan
(including, without limitation, the provisions of this Appendix G)
shall apply to and govern the benefits available to ITC employees in
the employ of ITC on or after the ITC Effective Date.
2. ELIGIBILITY
All ITC employees employed by ITC immediately prior to the ITC
Effective Date ("Transferred ITC Employees") shall be eligible to
participate in the Plan as of the ITC Effective Date. Each other ITC
employee (other than an employee who would otherwise be excluded from
participation in the Plan under Section 1.15 of the Plan) shall be
eligible to participate in the Plan upon satisfaction of the
eligibility requirements set forth in Article II of the Plan.
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<PAGE> 87
3. VESTING
For purposes of calculating a transferred ITC Employee's Vesting
Service, such employee's Employment Commencement Date shall be deemed
to be January 1, 1991 and as of the ITC Effective Date, such employee
will be fully (100%) vested in all benefits earned under the Plan.
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APPENDIX H
PROVISIONS RELATING TO EMPLOYEES OF INTERSCOPE COMMUNICATIONS, INC.
1. ELIGIBILITY
Employees of Interscope Communications, Inc. and its participating
affiliates (collectively, "Interscope") who were participants in or
eligible to participate in the Interscope Communications, Inc. 401(k)
Plan (the "Interscope Plan") immediately prior to January 1, 1996 (the
"Interscope Effective Date") shall be eligible to participate in the
Plan as of the Interscope Effective Date. Each other Interscope
employee (other than an employee who would otherwise be excluded from
participation in the Plan under Section 1.15 of the Plan) shall be
eligible to participate in the Plan upon satisfaction of the
eligibility requirements set forth in Article II of the Plan.
2. VESTING
For purposes of calculating an Interscope employee's Vesting Service,
an Interscope Employee with three (3) or more years of employment at
Interscope as of the Interscope Effective Date will be fully (100%)
vested in all benefits earned under the Plan; an Interscope Employee
who does not have three (3) years of service with Interscope as of
January 1, 1996 shall be deemed to have an Employment Commencement Date
that is the date such employee's employment with Interscope commenced.
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APPENDIX I
PROVISIONS RELATING TO EMPLOYEES OF WORKING TITLE, INC.
ELIGIBILITY
As of January 1, 1996, each employee of Working Title, Inc. ("Working
Title") (other than an employee who would otherwise be excluded from
participation in the Plan under Section 1.15 of the Plan) shall be
eligible to participate in the Plan upon satisfaction of the
eligibility requirements set forth in Article II of the Plan. For
purposes of calculating a Working Title employee's Vesting Service,
such employee's Employment Commencement Date shall be deemed to be the
date such employee's employment with Working Title commenced.
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APPENDIX J
PROVISIONS RELATING TO EMPLOYEES OF GRAMERCY PICTURES, INC.
ELIGIBILITY
As of April 1, 1996, each employee of Gramercy Pictures, Inc.
("Gramercy") (other than an employee who would otherwise be excluded
from participation in the Plan under Section 1.15 of the Plan) shall be
eligible to participate in the Plan upon satisfaction of the
eligibility requirements set forth in Article II of the Plan. For
purposes of calculating a Gramercy employee's Vesting Service, such
employee's Employment Commencement Date shall be deemed to be the date
such employee's employment with Gramercy commenced.
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APPENDIX K
SPECIAL CONTRIBUTION
Notwithstanding any limitation set forth in the Plan, including, without
limitation, Article IV hereof, and in reliance on the private letter ruling
issued by the IRS to the Company on November 18, 1997, the Company shall
contribute to the Plan an amount (the "Special Contribution") equal to
$2,085,231.88, plus Earnings (as defined below). The Special Contribution shall
be allocated among all Participants (the "Affected Participants") whose Accounts
were invested in the Intermediate Fixed Income Fund at any time during the
period beginning on July 1, 1996 and ending on November 30, 1996 (the
"Five-Month Period"). The portion of the Special Contribution allocated to the
Account of each Affected Participant shall equal the principal net loss incurred
by such Affected Participant in the Intermediate Fixed Income Fund during the
Five-Month Period (or portion thereof). The portion of the Special Contribution
to be made to each Affected Participant's Account shall be allocated among the
various categories (e.g., Pre-Tax Contributions, Post-Tax Contributions,
Matching Contributions and Rollover Amounts) of such Account in the same manner
as the losses incurred by the Intermediate Fixed Income Fund had been allocated
in such Account by the recordkeeper. For purposes of this Appendix K, "Earnings"
shall mean the rate of return of the Intermediate Fixed Income Fund during the
period from January 1, 1997 through December 31, 1997.
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APPENDIX L
REVISION OF THE PLAN AND APPLICABILITY OF PLAN PROVISIONS
The provisions of the Plan as set forth herein are effective as of August 23,
1999, except that certain provisions shall have an earlier or later effective
date as specifically set forth in the Plan or as follows:
1. The deletion of the family aggregation provision from the definition of
Compensation in Section 1.10 shall be effective as of January 1, 1997.
2. The definition of Highly Compensated Employee set forth in Section 1.22
shall be effective as of January 1, 1997.
3. The provision addressing military service in Section 3.6 and Appendix C
shall be effective as of December 12, 1994.
4. The revised methods of allocating excess contributions to Highly
Compensated Employees in Sections 4.3 and 4.4 shall be effective as of
January 1, 1997.
5. The revision to Appendix E relating to the exclusion of hardship
distributions from the definition of eligible rollover distribution
shall be effective as of January 1, 1999.
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<PAGE> 1
EXHIBIT 4(d)
THE SEAGRAM COMPANY LTD.
1996 STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE
The purpose of The Seagram Company Ltd. 1996 Stock Incentive Plan is to
provide selected key employees of The Seagram Company Ltd. and its subsidiaries
an opportunity to benefit from the appreciation in the value of the common
shares of The Seagram Company Ltd., thus providing an increased incentive for
such employees to contribute to the future success and prosperity of The Seagram
Company Ltd., enhancing the value of the common shares for the benefit of the
shareholders and increasing the ability of The Seagram Company Ltd.
and its subsidiaries to attract and retain individuals of exceptional skill.
ARTICLE II
DEFINITIONS
The following capitalized terms used in the Plan have the respective
meanings set forth in this Article:
2.1 Act: The United States Securities Exchange Act of 1934, as
amended.
2.2 Affiliate: A person or entity controlling, controlled by, or
under common control with The Seagram Company Ltd.
2.3 Approval Date: The later of the date of approval of the Plan
(a) by the shareholders of The Seagram Company Ltd. and (b) by
the applicable regulatory authorities and stock exchanges.
each as contemplated by Article XVIII of the Plan.
2.4 Award: An Option, Stock Appreciation Right or other award
granted under the Plan.
2.5 Board: The Board of Directors of The Seagram Company Ltd.
2.6 Code: The United States Internal Revenue Code of 1986, as
amended.
2.7 Committee: The Seagram Company Ltd. Human Resources Committee
or such other persons designated by the Board.
2.8 Common Shares: The common shares without nominal or par value
of The Seagram Company, Ltd.
2.9 Company: The Seagram Company Ltd., any of its Subsidiaries or
any other Affiliate designated by the Board.
2.10 Disability: Inability to engage in any substantial gainful
activity by reason of a medically determinable physical or
mental impairment which constitutes a permanent and total
<PAGE> 2
2
disability, as defined in Section 22 (e) (3) of the Code. The
determination whether a Participant has suffered a Disability
shall be made by the Committee based upon such evidence as it
deems necessary and appropriate.
2.11 Disinterested Persons: Members of the Board who are not full
time employees of the Company and who are eligible to serve as
Plan administrators or to approve Awards under the provisions
of Rule 16b-3 promulgated under the Act. The preceding
sentence shall have no effect if any specification of such
persons is eliminated from the rules promulgated under Section
16 of the Act. This Section 2.11 shall apply only to the Plan
and not to any other employee benefit plan of the Company.
2.12 Employer: The Company that employs the employee or
Participant.
2.13 Fair Market Value: The mean between high and low prices of the
Common Shares as reported on the composite tape for securities
traded on the New York Stock Exchange (or, if such exchange is
not open on such date, the immediately preceding date on which
such exchange is open), or, if the Common Shares are not so
listed or traded, the mean between high and low prices of the
Common Shares as reported on the principal United States
national securities exchange on which such shares are listed
or admitted to trading (or, if such exchange is not open on
such date, the immediately preceding date on which such
exchange is open), or, if the Common Shares are not so listed
or traded, the mean between the closing bid price and the
closing asked price as quoted on the National Association of
Securities Dealers Automated Quotation System, or such other
market in which such prices are regularly quoted, or, if there
have been no published bid or asked quotations with respect to
the Common Shares, the Fair Market Value shall be the value
established by the Committee in good faith and, in the case of
an ISO, in accordance with Section 422 of the Code.
2.14 ISO: An incentive stock option within the meaning of Section
422 of the Code.
2.15 Non-ISO: A stock option that is not an ISO.
2.16 Option: A stock option (whether ISO or Non-ISO) granted under
the Plan.
2.17 Option Price: The purchase price of one Common Share under an
Option.
2.18 Participant: A key employee of the Company who have been
selected by the Committee to receive an Award under the Plan.
2.19 Parent Corporation: A parent corporation, as defined in
Section 424(e) of the Code.
2.20 Plan: The Seagram Company Ltd. 1996 Stock Incentive Plan, as
from time to time amended.
2.21 Retirement: Separation from service with the Company on or
after attainment of age 65 or, with the prior written consent
of the Company, retirement at an earlier age.
2.22 Stock Appreciation Right: A stock appreciation right granted
under the Plan.
<PAGE> 3
3
2.23 Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code.
2.24 Termination Date: With respect to each Award, a date fixed by
the Committee; provided that with respect to an Option, such
date shall not be later than the day preceding the tenth
anniversary of its date of grant.
2.25 Termination For Cause: A Participant's termination of
employment with the Company due to insubordination, willful
misconduct, willful failure to implement corrective actions,
misappropriation of any funds or property of the Company,
unreasonable neglect or refusal to perform duties assigned
during employment or the conviction of a felony.
ARTICLE III
ADMINISTRATION
3.1 Except as otherwise provided in the Plan, the Committee (or any
subcommittee thereof) shall administer the Plan and shall have full power to
grant Awards, construe and interpret the Plan, establish and amend rules and
regulations for its administration and perform all other acts relating to the
Plan, including the delegation of administrative responsibilities, that it
believes reasonable and proper.
3.2 The Committee shall consist of not less than three persons, (a) all
of whom shall be (1) Disinterested Persons or (ii) if applicable, "non-employee
directors" as defined in the rules promulgated under Section 16 of the Act and
(b) at least two of whom shall be "outside directors" as defined in Section 162
(m) of the Code and the regulations promulgated thereunder.
3.3 Subject to the provisions of the Plan, the Committee (or any
Subcommittee thereof) or the Board shall, in its discretion, determine which
employees shall be granted Awards and the terms and conditions of Awards.
3.4 Any decision made, or action taken, by the Committee, any
Subcommittee thereof or the Board arising out of or in connection with, the
interpretation and administration of the Plan shall be final and conclusive.
ARTICLE IV
LIMITATION ON THE AMOUNT OF AWARD GRANTS
4.1 Common Shares Subject to the Plan: The total number of Common
Shares upon which Awards may be based shall be 45,000,000, subject to adjustment
in accordance with Article XIV of the Plan. These Common Shares shall be
authorized but unissued Common Shares. For purposes of this Section, a Stock
Appreciation Right granted pursuant to clause (b) of Section 7.1 shall not be
deemed to be an Award separate from the Option, or portion thereof, to which it
relates. For purposes of this Section, an Option, or portion thereof, exercised
through the exercise of such a Stock Appreciation Right shall be treated, to the
extent settled in Common Shares, as though the Option, or portion thereof, had
been exercised through the purchase of Common Shares, with the result that the
Common Shares subject to the Option, or portion thereof, that was so exercised
shall not be available for future grants of Awards.
<PAGE> 4
4
4.2 Common Shares to be Granted to a Participant: During the period
from the Approval Date through the sixth anniversary of the Approval Date, the
total number of Common Shares available for grants to any one Participant of (a)
Awards under the Plan and (b) awards under any other plan of the Company which
provides for the grant of Common Shares shall not exceed the lesser of (i) 5% of
the then outstanding Common Shares on the date when the Plan is adopted by the
Board and (ii) 5% of the outstanding Common Shares.
4.3 Cash-Only Awards: With respect to any fiscal year of the Company,
the aggregate value (as determined by the Committee) of Awards granted which are
exercisable solely for cash, or which upon maturity are payable solely in cash,
shall not exceed the aggregate salaries paid or accrued with respect to such
fiscal year to all Participants who receive grants of any Awards with respect to
such fiscal year; provided, however, that any such, Award which may or be
redeemed or exercised only upon a fixed date or dates at least at least six
months after grant, or incident to death, Retirement, Disability or cessation of
employment shall not be included in the foregoing calculation of the aggregate
value of Awards granted with respect to any fiscal year. This Section 4.3 (or
any part thereof) shall be effective only to the extent that it required under
the rules promulgated under Section 16 of the Act or any other law, rule or
regulation applicable to the Company.
4.4 Common Shares to be Granted to Insiders: Under the Plan and any
other plan of the Company which provides for the issuance of Common Shares, (i)
the total number of Common Shares reserved for issuance to all Insiders (as
defined below) shall not exceed 10% of the then outstanding Common Shares; (ii)
the total number of Common Shares issued to Insiders, within a one-year period,
shall not exceed 5% of the then outstanding Common Shares. For purposes hereof,
"Insider" means an insider as defined by applicable laws, rules, by-laws or
policies of regulatory authorities or stock exchanges.
ARTICLE V
ELIGIBILITY
5.1 Awards may be granted to selected key employees of the Company.
ARTICLE VI
Terms of Options
6.1 Option Price: Except as provided in Section 6.3 of the Plan, the
Option Price shall be no less than the Fair Market Value of a Common Share on
the date the Option is granted, but in no event shall the Option Price be less
than that permitted applicable laws, rules, by-laws or policies of regulatory
authorities or stock exchanges.
6.2 Period of Exercise: The Committee shall determine the dates after
which Options may be exercised in whole or in part; provided, however, that an
Option shall not be exercised prior to the Approval Date nor later than its
Termination Date. The Committee may amend an Option to accelerate the date after
which such Option may be exercised in whole or in part, provided that the
Company has obtained all applicable approvals, if any, of regulatory authorities
and stock exchanges. An Option which has not been exercised on or prior to its
Termination Date shall be canceled.
6.3 Special Rules Regarding ISO Granted to Certain Employees:
Notwithstanding any contrary provisions of Sections 6.1 and 6.2 of the Plan, no
ISO shall be granted to any employee who, at the time the Option is
<PAGE> 5
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granted, owns (directly or within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of stock of the
Employer or of any Subsidiary or Parent Corporation thereof, unless (a) the
Option Price under such Option is at least 110% of the Fair Market Value of a
Common Share on the date the Option is granted and (b) the Termination Dare of
such Option is a date not later than the day preceding the fifth anniversary of
the date on which the Option is granted.
6.4 Manner of Exercise and Payment: Subject to Section 6.2 of the Plan,
an Option, or portion thereof, shall be exercised by delivery of a written
notice of exercise to the Company and payment of the full price of the Common
Shares being purchased pursuant to the Option. A Participant or his or her legal
representative may exercise an Option with respect to less than the full number
of Common Shares for which the Option may then be exercised, but a Participant
must exercise the Option in full Common Shares. The price of Common Shares
purchased pursuant to an Option, or portion thereof, may be paid:
a) in United States dollars in cash or by check, bank draft or
money order payable to the order of the Company;
b) through the delivery of Common Shares with an aggregate Fair
Market Value on the date of exercise equal to the Option
Price;
c) with the consent of the Committee, through the withholding of
Common Shares issuable upon exercise with an aggregate Fair
Market Value on the date of exercise equal to the Option
Price;
d) through the delivery of irrevocable instructions to a broker
to deliver promptly to the Company an amount equal to the
Option Price; or
e) by any combination of the above methods of payment;
provided, however, that the Company shall not be obligated to purchase or accept
the surrender in payment of any such Common Shares if any such action would be
prohibited by the applicable laws governing the Company or the Committee shall
determine that such action is not in the best interests of the Company. The
Committee shall determine acceptable methods for providing notice of exercise,
for tendering Common Shares or for delivering irrevocable instructions to a
broker and may impose such limitations and prohibitions on the use of Common
Shares or irrevocable instructions to a broker to exercise an Option as it deems
appropriate.
6.5 Notification of Sales of Common Shares: Any Participant who
disposes of Common Shares acquired upon the exercise of an ISO either (a) within
two years after the date of the grant of the ISO under which the Common Shares
were acquired or (b) within one year after the transfer of such Common Shares to
the Participant, shall notify the Company of such disposition and of the amount
realized upon such disposition.
ARTICLE VII
TERMS OF STOCK APPRECIATION RIGHTS
7.1 Grants of Stock Appreciation Rights: A Stock Appreciation Right may
be granted (a) independent of an Option or (b) in conjunction with an Option, or
portion thereof. A Stock Appreciation Right granted pursuant
<PAGE> 6
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to clause (b) of the preceding sentence may be granted at the time the related
Option is granted or at any time prior to the exercise or cancellation of the
related Option.
7.2 Exercise Price: The exercise price per Common Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than the greater of (a) the Fair Market Value of
a Common Share on the date the Stock Appreciation Right is granted or, in the
case of a Stock Appreciation Right granted in conjunction with an Option, or
portion thereof, the Option Price of the related Option and (b) an amount
permitted by applicable laws, rules, by-laws or policies of regulatory
authorities or stock exchanges.
7.3 Period of Exercise: The Committee shall determine the dates after
which Stock Appreciation Rights may be exercised in whole or in part; provided.
however, that a Stock Appreciation Right shall not be exercised prior to the
Approval Date nor later than its Termination Date. The Committee may amend a
Stock Appreciation Right to accelerate the date after which it may be exercised
in whole or in part, provided that the Company has obtained all applicable
approvals, if any, of regulatory authorities and stock exchanges. A Stock
Appreciation Right which has not been exercised on or prior to its Termination
Date shall be canceled. A Stock Appreciation Right granted in conjunction with
an Option, or portion thereof, shall not be exercised unless such Option, or
portion thereof, is otherwise exercisable, and such a Stock Appreciation Right
shall be canceled to the extent the Option to which it relates has been
exercised, or has expired, been terminated or been canceled for any reason.
7.4 Exercise of Stock Appreciation Rights: A Stock Appreciation Right,
or portion thereof, shall be exercised in accordance with such procedures as may
be established by the Committee. Upon the exercise of a Stock Appreciation
Right, the Participant or his or her legal representative shall be entitled to
receive from the Company with respect to each Common Share to which such Stock
Appreciation Right relates an amount equal to the excess of (a) the Fair Market
Value of a Common Share on the date of exercise over (b) the exercise price of
the Stock Appreciation Right. Such amount shall be paid in cash and/or Common
Shares at the discretion of the Committee. The number of Common Shares, if any,
issued as a result of the exercise of a Stock Appreciation Right shall be based
on the Fair Marker Value of such Common Shares on the date of exercise. Upon the
exercise of a Stock Appreciation Right, or portion thereof, granted in
conjunction with an Option, or portion thereof, the Option or portion thereof,
to which such Stock Appreciation Right relates shall be deemed in case of a cash
payment to have been canceled and in the case of a payment in Common Shares to
have been exercised.
ARTICLE VIII
OTHER SHARE-BASED AWARDS
8.1 Other Awards of Common Shares and Awards that are valued in whole
or in part by reference to, or are otherwise based on the Fair Market Value of,
Common Shares may be granted under the Plan in the discretion of the Committee.
Such Awards shall be in such form, and dependent on such conditions, as the
Committee shall determine. including, without limitation, the right to receive
one or more Common Shares, or the equivalent cash value of such Common Shares,
upon the completion of a specified period of service, the occurrence of an event
and/or the attainment of performance objectives. Such Awards may be granted
alone or in addition to any other Awards granted under the Plan. Subject to the
provisions of the Plan, the Committee shall determine to whom and when such
Awards will be made, the number of Common Shares to be awarded under (or
otherwise related to) such Awards, whether such Awards shall be settled in cash,
Common Shares or a combination of cash and Common Shares, and all other terms
and conditions of such Awards. Notwithstanding the foregoing, certain Awards
granted under this Section 8.1 of the Plan may be granted in a manner which is
deductible by the
<PAGE> 7
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Company under Section 162(m) of the Code. Such Awards (the "Performance-Based
Awards") shall be based upon stock price, market share, sales. earnings per
share, return on equity or costs.
ARTICLE IX
DIVIDEND EQUIVALENTS
9.1 At or after the grant of an Award, the Committee, in its
discretion, may provide the Participant with dividend equivalents with respect
to such Award.
ARTICLE X
AWARD AGREEMENTS
10.1 All Awards shall be evidenced by written agreements executed by
the Company and the Participant. Such agreements shall be subject to the
applicable provisions of the Plan, and shall contain such provisions as are
required by the Plan and any other provisions the Committee may prescribe;
provided that with respect to Options, those Options that are intended to be ISO
shall be so designated and all other Options shall be designated Non-ISO.
Notwithstanding Section 2.13, an Award agreement may provide that Fair Market
Value shall be determined based on the monetary currency of a Participant's
country of residence. Notwithstanding Section 6.4, an Award agreement may
require that payment of the Option Price shall be made in such currency and may
otherwise restrict the manner of exercise and payment of an Option.
ARTICLE XI
NONTRANSFERABILITY OF AWARDS
11.1 Each Award shall, during the Participant's lifetime, be
exercisable only by the Participant, and neither it nor any right hereunder
shall be transferable otherwise than by will, the laws of descent and
distribution or be subject to attachment, execution or other similar process;
provided, however, that to the extent permitted by applicable law, with respect
to any Award, a Participant may designate a beneficiary pursuant to procedures
which may be established by the Committee. In the event of any attempt by the
Participant to alienate, assign, pledge, hypothecate or otherwise dispose of an
Award or of any right hereunder, except as provided for herein, or in the event
of any other or any attachment, execution or similar process upon the rights or
interest hereby conferred, the Company may terminate the Award by notice to the
Participant and the Award shall thereupon be canceled. This Section 11.1 (or any
part thereof) may be altered by the Committee to the extent that it is no longer
required under the rules promulgated under Section 16 of the Act or any other
law, rule or regulation applicable to the Company.
ARTICLE XII
CESSATION OF EMPLOYMENT OF PARTICIPANT
12.1 Cessation of Employment other than by Reason of Retirement,
Disability, Death or Termination For Cause: If a Participant shall cease to be
employed by the Company other than by reason of Retirement, Disability, death or
Termination For Cause. each Award held by the Participant shall be canceled to
the extent not
<PAGE> 8
8
previously exercised and all rights hereunder shall terminate at the end of the
three-month period commencing on the last day of the month in which the
cessation of employment occurred.
12.2 Cessation of Employment by Reason of Termination For Cause: If a
Participant shall cease to be employed by the Company by reason of Termination
For Cause, each Award held by the Participant shall be canceled to the extent
not previously exercised and all rights hereunder shall terminate on the date of
cessation of employment.
12.3 Cessation of Employment by Reason of Retirement or Disability: If
a Participant shall cease to be employed by the Company by reason of Retirement
or Disability, each Award held by the Participant shall be exercisable until the
Termination Date set forth in the Award. Notwithstanding the foregoing, an
Award, other than, to the extent provided by the Committee, an Award granted
under Article VIII of the Plan, shall be canceled if, after Retirement, in the
sole determination of the Committee, the Participant (i) engages in activity
which is competitive with that of the Company or its Affiliates or (ii) at any
time, divulges to any person or entity (other than the Company or any of its
Affiliates) any of the trade secrets, methods, processes or other proprietary or
confidential information of the Company or any of its Affiliates.
12.4 Cessation Employment by Reason of Death: If a Participant shall
die while employed by the Company, or at any time after cessation of employment
by reason of Retirement or Disability, an Award may be exercised at any time or
from time to time prior to the Termination Date set forth in the Award, by the
person or persons to whom the Participant's rights under each Award shall pass
by will or by the applicable laws of descent and distribution. Any person or
persons to whom a Participant's rights under an Award have passed by will or by
the applicable laws of descent and distribution shall be subject to all terms
and conditions of the Plan and the Award applicable to the Participant.
ARTICLE XIII
WITHHOLDING TAXES
13.1 The Company may, in its discretion, require a Participant to pay
to the Company the amount, or make other arrangements (including, without
limitation, the withholding of Common Shares which would otherwise be delivered
as part of or upon exercise of an Award), at the time of exercise or thereafter,
that the Company deems necessary to satisfy its obligation to withhold federal,
provincial, state or local income or other taxes.
ARTICLE XIV
ADJUSTMENTS
14.1 If (a) the Company shall at any time be involved in a transaction
to which Section 424(a) of the Code is applicable, (b) the Company shall declare
a dividend payable in, or shall subdivide or combine, its Common Shares or (c)
any other event shall occur which in the judgment of the Committee necessitates
action by way of adjusting the terms of the outstanding Awards, the Committee
may take any such action as in its judgment shall be necessary to preserve the
Participant's rights substantially proportionate to the rights existing prior to
such event and, to the extent that such action shall include an increase or
decrease in the number of Awards and/or Common Shares subject to outstanding
Awards, the number of Awards and/or Common Shares available under Article IV
above may be increased or decreased, as the case may be, proportionately. The
judgment of the
<PAGE> 9
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Committee with respect to any matters referred to in this Article shall be
conclusive and binding upon each Participant. The exercise by the Committee of
its authority under this Article is subject to the approval of the Board as and
when required by applicable laws, rules, by-laws or policies of regulatory
authorities or stock exchanges.
ARTICLE XV
AMENDMENT AND TERMINATION OF THE PLAN
15.1 The Board may at any time, or from time to time, suspend or
terminate the Plan in whole or in part or amend it in such respects as the Board
may deem appropriate; provided, however, that no such amendment shall be made
without approval of the shareholders if such approval is required by Rule 16b-3
under the Act or by any regulatory authorities or stock exchanges.
15.2 No amendment, suspension or termination of the Plan shall, without
the Participant's consent, impair any of the rights or obligations under any
Award theretofore granted to a Participant under the Plan.
15.3 The Committee may amend the Plan, subject to the limitations cited
above, in such manner as it deems necessary to permit the granting of Awards
meeting the requirements of future amendments or issued regulations, if any, to
the Code, the Act or other applicable laws, rules, by-laws or policies of
regulatory authorities or stock exchanges.
15.4 No amendment shall be effective until all applicable approvals, if
any, of regulatory authorities and stock exchanges have been obtained.
ARTICLE XVI
GOVERNMENT AND OTHER REGULATIONS
16.1 The obligation of the Company to issue, or transfer and deliver,
Common Shares for Awards exercised under the Plan shall be subject to all
applicable laws, regulations, rules, orders and approvals which shall then be in
effect and required by regulatory authorities and any stock exchanges on which
Common Shares are traded.
16.2 Notwithstanding any other provision of the Plan, (a) during any
period in which a Participant is subject to Section 16 of the Act, if the
Participant shall exercise any Award or engage in any other transaction
involving an Award or Common Shares received upon the exercise of an Award, the
Participant shall comply with the rules promulgated under Section 16 of the Act
(and any comparable rules of any other U.S. and non-U.S. regulatory authority),
including, without limitation, rules which restrict the exercise of Awards,
which limit the resale of Common Shares obtained upon exercise of Awards and
which require the reporting of transactions and (b) the Committee may impose any
conditions on an Award necessary to render any transaction involving such Award
exempt under the rules promulgated under Section 16 of the Act.
<PAGE> 10
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ARTICLE XVII
MISCELLANEOUS PROVISIONS
17.1 The Plan Does Not Confer Employment or Shareholder Rights: The
right of the Company to terminate at will (whether by dismissal, discharge or
otherwise) the Participant's employment with it at anytime is specifically
reserved. Neither the Participant nor any person entitled to exercise the
Participant's rights in the event of the Participant's death shall have any
rights of a shareholder with respect to the Common Shares subject to each Award,
except to the extent that, and until, such Common Shares shall have been issued
upon the exercise or maturity of each Award.
17.2 The Plan Does Not Confer Rights to Assets: Neither the Participant
nor any person entitled to exercise the Participant's rights in the event of the
Participant's death shall have any rights to or interest in any specific asset
of the Company.
17.3 Plan Expenses: Any expenses of administering the Plan shall be
borne by the Company.
17.4 Use of Exercise Proceeds: Cash payment from Participants upon the
exercise of Options shall be used for the general corporate purposes of the
Company.
17.5 Indemnification: In addition to such other rights of
indemnification as they may have as members of the Board or the Committee, the
members of the Board and the Committee shall be indemnified by the Company
against all costs and expenses reasonably incurred by them in connection with
any action, suit or proceeding to which they or any of them may be party by
reason of any action taken or failure to act under or in connection with the
Plan or any Award granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except a judgment based upon a finding
of bad faith; provided that upon the institution of any such action, suit or
proceeding, a Committee or Board member shall, in writing, give the Company
notice thereof and an opportunity, at its own expense, to handle and defend the
same before such Committee or Board member undertakes to handle and defend it on
such member's own behalf.
17.6 Governing Law: The Plan shall be construed and interpreted, and
the rights of the Company and Participants (and all other parties) determined,
in accordance with the internal laws of the State of New York without regard to
the conflict of law principles thereof.
ARTICLE XVIII
SHAREHOLDER APPROVAL AND EFFECTIVE DATES
18.1 The Plan shall become effective when it is adopted by the Board.
However, if (a) the Plan is not approved by the affirmative vote of the holders
of a majority of the Common Shares present, or represented by proxy, and
entitled to vote at the Annual Meeting of Shareholders of The Seagram Company
Ltd. to be held on May 29, 1996, or at any adjournment thereof or (b) the
necessary regulatory and stock exchange approvals are not obtained within one
year after the date the Plan is adopted by the Board, the Plan and all Awards
shall terminate. Awards may not be granted under the Plan after the sixth
anniversary of the Approval Date.
<PAGE> 11
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APPENDIX A
TO
THE SEAGRAM COMPANY LTD.
1996 STOCK INCENTIVE PLAN
ADDITIONAL ARTICLES FOR THE GRANT OF APPROVED OPTIONS TO
UNITED KINGDOM PARTICIPANTS
ARTICLE XIX
PURPOSE
19.1 The purpose of these additional articles ("Additional Articles")
for UK Participants is to obtain Approved Option status in respect of Options
granted up to the Limit under the Plan to UK Participants. These Additional
Articles are to be read as a continuation of the Plan and only modify the Plan
in respect of the grant of Approved Options under the Plan to UK Participants.
These additional Articles do not add to or modify the Plan in respect of any
other category of Participant.
19.2 The Committee has adopted these Additional Articles in accordance
with Section 15.3.
ARTICLE XX
DEFINITIONS
20.1 The definition of Award contained in Article II of the Plan shall
be modified to include Options only and shall be so construed throughout the
Plan.
22.2 The definition of Fair Market Value contained in Article II of the
Plan shall be modified so that if the Common Shares are not listed or traded on
the New York Stock Exchange, the Fair Market Value of a Common Share shall be
its market value as determined in accordance with Part VIII of the UK Chargeable
Gains Act 1992 and agreed in advance with the Shares Valuation Division of the
UK Board of Inland Revenue.
22.3 The definition of Option shall include "Approved Option" unless
the context otherwise requires.
22.4 The following additional capitalized terms used in the Plan shall
have the respective meanings set forth in this Section:
a) Approved Option: An Option granted under the Plan up to the
Limit to a UK Participant while the Plan is approved by the UK
Board of Inland Revenue under Schedule 9 to the UK Act.
b) Limit: The Limit set out in paragraph 28(1) of Schedule 9 to
the UK Act, which, at the time these Additional Articles were
adopted, was L.30,000, and for purposes of that paragraph,
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"market value" shall be construed in accordance with paragraph
28(3) of Schedule 9 to the UK Act.
c) UK Act: The United Kingdom Income and Corporation Taxes Act
1988.
d) UK Participant: A key employee of the Company who has been
selected by the Committee to receive an Award under the Plan
and who is:
(i) resident in the UK for UK income tax purposes; and
(ii) is not ineligible to participate in the Plan by
virtue of paragraph 8 of Schedule 9 to the UK Act
(material interest provisions); and
(iii) if he is a director of the Company, is required to
work, under the terms of his employment with the
Company as at the date of grant of the Option, for at
least 25 hours per week (excluding meal breaks).
e) Shares: Common Shares which satisfy the provisions of
paragraphs 10 to 14 inclusive of Schedule 9 to the UK Act.
ARTICLE XXI
FURTHER LIMITATION ON THE AMOUNT OF AWARD GRANTS
21.1 No Approved Option shall be granted to a UK Participant in
excess of the Limit.
ARTICLE XXII
ELIGIBILITY
22.1 Section 5.1 shall be modified by inserting "who satisfy the
definition of UK Participant" at the end of that Section.
ARTICLE XXIII
TERMS OF OPTIONS
23.1 The first sentence of Section 6.2 shall be deleted and
replaced with the following: "The Committee shall determine,
as at the date of grant of approved Options, the date after
which such Options may be exercised in whole or in part;
provided, however, that an Approved Option shall not be
exercised prior to the Approval Date nor later than its
Termination Date."
23.2 The second sentence of Section 6.2 shall not apply to Approved
Options.
23.3 An Approved Option may not be exercised by any person who is
precluded from participation in the Plan by virtue of
paragraph 8 of Schedule 9 to the UK Act (material interest
provisions).
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23.4 The provisions of Sections 6.4(b), (c) and (e) of the Plan
shall not apply to Approved Options.
23.5 The provisions of Section 6.4 shall read as follows:
"provided, however, that the Committee shall determine
acceptable methods for providing notice of exercise or for
delivering irrevocable instructions to a broker and may impose
such limitations on instructions to a broker as it deems
appropriate."
23.6 The terms of an Approved Option shall not be amended without
the prior approval of the UK Board of Inland Revenue.
23.7 The appropriate number of Common Shares shall be allotted or
transferred (as the case may be) within 30 days following the
exercise of an Approved Option.
ARTICLE XXIV
TERMS OF STOCK APPRECIATION
24.1 The provisions of Article VII shall not apply to Approved
Options.
ARTICLE XXV
OTHER SHARE-BASED AWARDS
25.1 The provisions of Article VIII shall not apply to Approved
Options.
ARTICLE XXVI
DIVIDEND EQUIVALENTS
26.1 The provisions of Article IX shall not apply to Approved
Options.
ARTICLE XXVII
AWARD AGREEMENTS
27.1 The provisions of Section 10.1 shall be modified in relation
to Approved Options as follows:
(i) the word "objective" shall be inserted before
"provisions" in the third line; and
(ii) the last sentence thereof commencing with the words
"Notwithstanding Section 6.4" shall be omitted
therefrom.
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ARTICLE XXVIII
NONTRANSFERABILITY OF AWARDS
28.1 Section 11.1 shall be modified by inserting at the end of that
Section: "provided, that in respect of Approved Options, no
such alternation shall be effective unless and until it is
approved by the UK Board of Inland Revenue."
ARTICLE XXIX
CESSATION OF EMPLOYMENT OF PARTICIPANT
29.1 The provisions of Section 12.4 shall be modified so that upon
the death of a UK Participant, Approved Options will be
exercisable until the earlier of:
(i) the expiry of a period of 12 months following such
death; and
(ii) the Termination Date.
ARTICLE XXX
ADJUSTMENTS
30.1 Section 14.1 shall be modified so that in respect of Approved
Options:
(i) any adjustments made by the Committee pursuant to
this Section 14.1 shall be made only to the Option
Price and/or to the number of Common Shares subject
to Approved Options and only in the event of a
variation in the Common Stock; and
(ii) any adjustment to be made under this Section 14.1
shall be subject to prior approval of the UK Board of
Inland Revenue.
ARTICLE XXXI
AMENDMENT AND TERMINATION OF THE PLAN
31.1 Subject to the provisions of Article XV of the Plan, the Board
and the Committee may amend the Plan but no such amendments
shall become effective with respect to Approved Options unless
and until they are approved by the UK Board of Inland Revenue.
<PAGE> 1
Exhibit 5
August 18, 1999
The Seagram Company Ltd.
1430 Peel Street
Montreal, Quebec
H3A 1S9
Re: THE SEAGRAM COMPANY LTD.
1996 Stock Incentive Plan
PolyGram Holding, Inc. Deferred Savings
and Investment Plan for Employees
Dear Sirs:
We are acting as Canadian counsel to The Seagram Company Ltd. (the "Company")
in connection with the Registration Statement on Form S-8 (the "Registration
Statement") of the Company which the Company intends to file with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the 1996 Stock Incentive Plan and the PolyGram
Holding, Inc. Deferred Savings and Investment Plan for Employees (collectively
the "Plans").
We have examined such corporate records, documents and other instruments and
have made such other examinations and inquiries as we have deemed necessary to
enable us to express the opinions set forth herein.
Based on the foregoing, we are of the opinion, assuming the effectiveness of
the Registration Statement under the Act and that all authorizations, consents
and approvals of and all filings, registrations, qualifications and recordings
with all governmental authorities of Canada and any applicable Province thereof
are obtained and made, that:
The Common Shares authorized for original issuance under any of the Plans,
when duly issued and sold as contemplated by the Registration Statement
and the applicable Plan, will be legally issued as fully paid and
non-assessable Common Shares.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Yours truly,
/s/ Goodman Phillips & Vineberg
Goodman Phillips & Vineberg
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
OF THE SEAGRAM COMPANY LTD.
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 12, 1998, except as to Note 1
which is as of August 25, 1998, relating to the financial statements, which
appears in The Seagram Company Ltd.'s Annual Report on Form 10-K for the year
ended June 30, 1998, as amended. We also consent to the incorporation by
reference of our report dated August 12, 1998 relating to the financial
statement schedule, which appears in such Annual Report on Form 10-K, as
amended.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
August 18, 1999
<PAGE> 1
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS OF POLYGRAM N.V.
We hereby consent to incorporation by reference in this Registration Statement
on Form S-8 of PolyGram Holding, Inc. Deferred Savings and Investment Plan for
Employees/The Seagram Company Ltd. 1996 Stock Incentive Plan of our Report dated
February 11, 1998, relating to the Consolidated Balance Sheets of PolyGram N.V.
as of December 31, 1996 and 1997, and the related Consolidated Statements of
Income, Consolidated Statements of Cash Flows and Consolidated Statements of
Changes in Shareholders' Equity for each of the years in the three-year period
ended December 31, 1997 of PolyGram N.V., incorporated by reference in The
Seagram Company Ltd.'s Form 8-K dated August 25, 1998, as amended.
/s/ KPMG Accountants N.V.
KPMG Accountants N.V.
Amsterdam, The Netherlands
August 18, 1999
<PAGE> 1
EXHIBIT 23(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
The Seagram Company Ltd.
PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 filed by The Seagram Company Ltd. on August 18, 1999 of
our Report dated August 16, 1999 which appears in the Annual Report on Form 11-K
of the PolyGram Holding, Inc. Deferred Savings and Investment Plan for Employees
for the fiscal year ended December 31, 1998.
/s/ Gutierrez & Co.
- -------------------
Gutierrez & Co.
Flushing, New York
August 18, 1999
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
THE SEAGRAM COMPANY LTD.
KNOW ALL MEN BY THESE PRESENTS that the undersigned, THE
SEAGRAM COMPANY LTD., a Canadian corporation (the "Corporation"), and each of
the undersigned directors and officers of the Corporation, hereby constitute and
appoint EDGAR M. BRONFMAN, CHARLES R. BRONFMAN, EDGAR BRONFMAN, JR., ROBERT W.
MATSCHULLAT, JOHN R. PRESTON, DANIEL R. PALADINO, and MICHAEL C.L. HALLOWS, and
each of them severally, his or her true and lawful attorneys and agents, with
power to act with or without the others and with full power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents and each of them may deem necessary
or desirable to enable the Corporation to comply with the United States
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the United States Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under such Act of common shares,
without nominal or par value, of the Corporation, to be offered or sold pursuant
to the employee benefit plans referenced in the Form S-8 of the Corporation to
which this Power of Attorney is an exhibit, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of the Corporation and the name of the undersigned, individually and in his or
her capacity as a director or officer of the Corporation, to a Registration
Statement on Form S-8 (the "Registration Statement") to be filed with the
Securities and Exchange Commission with respect to said common shares, to any
and all amendments, including post-effective amendments, to the Registration
Statement, and to any and all instruments or documents filed as a part of or in
connection with the Registration Statement and/or any such amendments; and to
file with the Commission the Registration Statement, any and all amendments
thereto, and any and all instruments or documents filed as a part of or in
connection with the Registration Statement and/or any such amendments; and each
of the undersigned hereby ratifies and confirms all that said attorneys and
agents and each of them shall do or cause to be done by virtue hereof.
This Power of Attorney may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed one and the same instrument.
<PAGE> 2
2
IN WITNESS WHEREOF each of the undersigned has subscribed
these presents as of this 18th day of August, 1999.
THE SEAGRAM COMPANY LTD.
By: /s/ Edgar Bronfman, Jr.
--------------------------------------
Edgar Bronfman, Jr.
President and Chief Executive Officer
/s/ Edgar M. Bronfman
--------------------------------------
Edgar M. Bronfman
/s/ Charles R. Bronfman
--------------------------------------
Charles R. Bronfman
/s/ Edgar Bronfman, Jr.
--------------------------------------
Edgar Bronfman, Jr.
/s/ Samuel Bronfman II
--------------------------------------
Samuel Bronfman II
/s/ Matthew W. Barrett
--------------------------------------
Matthew W. Barrett
/s/ Laurent Beaudoin
--------------------------------------
Laurent Beaudoin
/s/ Cornelis Boonstra
--------------------------------------
Cornelis Boonstra
/s/ Richard H. Brown
--------------------------------------
Richard H. Brown
/s/ William G. Davis
--------------------------------------
William G. Davis
<PAGE> 3
3
/s/ Andre Desmarais
--------------------------------------
Andre Desmarais
/s/ Barry Diller
--------------------------------------
Barry Diller
/s/ Michele J. Hooper
--------------------------------------
Michele J. Hooper
/s/ David L. Johnston
--------------------------------------
David L. Johnston
/s/ E. Leo Kolber
--------------------------------------
E. Leo Kolber
/s/ Marie-Josee Kravis
--------------------------------------
Marie-Josee Kravis
/s/ Robert W. Matschullat
--------------------------------------
Robert W. Matschullat
Vice Chairman and Chief Financial Officer
/s/ Samuel Minzberg
--------------------------------------
Samuel Minzberg
/s/ John S. Weinberg
--------------------------------------
John S. Weinberg