<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON APRIL 28, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------------
AVERY DENNISON CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 95-1492269
(State or Other Jurisdiction (I.R.S.Employer
of Incorporation or Organization) Identification No.)
150 NORTH ORANGE GROVE BOULEVARD
PASADENA, CALIFORNIA 91103
(Address of Principal Executive Offices) (Zip Code)
------------------
AVERY DENNISON CORPORATION
EMPLOYEE SAVINGS PLAN
------------------
ROBERT G. VAN SCHOONENBERG, ESQ.
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
AVERY DENNISON CORPORATION
150 NORTH ORANGE GROVE BOULEVARD
PASADENA, CALIFORNIA 91103
(818) 304-2000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copy to:
ROBERT A. KOENIG, ESQ.
LATHAM & WATKINS
633 WEST FIFTH STREET
SUITE 4000
LOS ANGELES, CALIFORNIA 90071
(213) 485-1234
Calculation of Registration Fee
<TABLE>
<CAPTION>
Proposed
Amount Proposed Maximum
of Shares Maximu m Aggregate Amount of
Title of Each Class of to be Offering Price Offering Registration
Securities to be Registered Registered Per Share(2) Price Fee
--------------------------- ---------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Common Stock
$1.00 par value (1) 900,000 $39.25 $35,325,000 $12,181.04
Preferred Share
Purchase Rights (3) 900,000 (3) (3) $100.00
</TABLE>
(1) 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 Avery Dennison Corporation Employee Savings Plan.
$50,000,000 of such participations, and the related Common Stock and
Preferred Share Purchase Rights of the Company, have been previously
registered pursuant to Form S-8 Registration Statement Nos. 33-1132 and
33-03637.
(Cover continued on next page)
<PAGE>
(2) For purposes of computing the registration fee only. Pursuant to Rule
457(h), the Proposed Maximum Offering Price Per Share is based upon the
average of the high and low prices for the Company's Common Stock on the
composite tape for the New York Stock Exchange on April 24, 1995.
(3) Preferred Share Purchase Rights ("Rights") are attached to and trade with
Common Stock of the Company. The value attributable to such Rights, if any,
is reflected in the market price of the Common Stock. Fee paid represents
the minimum statutory fee pursuant to Section 6(b) of the Securities Act of
1933.
2
<PAGE>
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 Commission by Avery Dennison
Corporation, a Delaware corporation (the "Company"), or by the Avery Dennison
Corporation Employee Savings Plan (the "Plan"), are incorporated as of their
respective dates in this Registration Statement by reference:
A. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
B. All other reports filed by the Company pursuant to Sections 13(a) and
15(d) of the Securities Exchange Act of 1934 since December 31, 1994;
and
C. Description of the Company's Common Stock contained in the Company's
Registration Statement on Form S-4 filed with the Commission on July
25, 1990 (No. 33-35995).
D. The Plan's Annual Report on Form 11-K for the fiscal year ended
November 30, 1993.
All documents filed by the Company or the Plan pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, are
incorporated by reference in this registration statement and are 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.
The contents of the Registration Statements on Form S-8 (Registration
Nos. 33-1132 and 33-03637) of Avery Dennison Corporation (formerly Avery
International Corporation) relating to $50,000,000 of participations in the Plan
and shares of Common Stock and Preferred Share Purchase Rights which may be
purchased under the Plan are incorporated by reference herein in their entirety.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
1
<PAGE>
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides that a
corporation shall have the power, and in some cases is required, to indemnify an
agent, including an officer or director, who was or is a party or is threatened
to be made a party to any proceedings, against certain expenses, judgments,
fines, settlements and other amounts under certain circumstances. Article VI of
the Registrant's Bylaws requires indemnification of the Registrant's officers
and directors to the maximum extent permitted by the Delaware General
Corporation Law, and the Registrant maintains insurance covering certain
liabilities of the directors and officers of the Registrant and its
subsidiaries. The Registrant has also entered into contractual arrangements
with its directors and officers pursuant to which such persons may be entitled
to indemnity from the Registrant against certain liabilities arising from the
discharge of their duties in such capacities.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
3.1 Restated Articles of Incorporation. Incorporated by reference
to Exhibit B to Registrant's Proxy Statement dated February 28,
1977 for Annual Meeting of Stockholders March 30, 1977.
3.1.1 Amendment to Certificate of Incorporation, filed April 10, 1984
with Office of Delaware Secretary of State. Incorporated by
reference to Exhibit 3.1.1 to Registrant's 1983 Annual Report on
Form 10-K.
3.1.2 Amendment to Certificate of Incorporation, filed April 11, 1985
with Office of Delaware Secretary of State. Incorporated by
reference to Exhibit 3.1.2 to Registrant's 1984 Annual Report on
Form 10-K.
3.1.3 Amendment to Certificate of Incorporation, filed April 6, 1987
with Office of Delaware Secretary of State. Incorporated by
reference to Exhibit 3.1.3 to Registrant's 1986 Annual Report on
Form 10-K.
3.1.4 Amendment to Certificate of Incorporation, filed October 17,
1990 with Office of Delaware Secretary of State. Incorporated
by reference to Exhibit 3.1 to Registrant's Current Report on
Form 8-K filed October 31, 1990.
3.2 Bylaws, as amended. Incorporated by reference to Exhibit 3.2 to
Registrant's 1994 Annual Report on Form 10-K.
4.1 Eleventh Amendment to Avery Dennison Corporation Employee
Savings Plan.
4.2 Twelfth Amendment to Avery Dennison Corporation Employee Savings
Plan.
4.3 Thirteenth Amendment to Avery Dennison Corporation Employee
Savings Plan.
5.1 Internal Revenue Service determination letter dated November 6,
1990.
2
<PAGE>
23.1 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (page S-1).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(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
the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not
apply to information contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and each filing of the Plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
3
<PAGE>
(d) Pursuant to Item 8(b) of Form S-8, in lieu of an Internal Revenue
Service ("IRS") determination letter that the Plan is qualified under Section
401 of the Internal Revenue Code of 1986, as amended, the undersigned registrant
hereby undertakes to submit the Plan and any amendments thereto to the IRS in a
timely manner and will make all changes required by the IRS to qualify the Plan.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pasadena, State of California, on this 27th day of
April, 1995.
AVERY DENNISON CORPORATION
By: /s/ R. Gregory Jenkins
-------------------------------
R. Gregory Jenkins
Senior Vice President, Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes Charles D. Miller, Philip M. Neal and R. Gregory
Jenkins, or any of them, as attorney-in-fact, with full power of substitution,
to sign on his or her behalf, individually and in such capacity stated below,
and to file any amendments, including post-effective amendments or supplements,
to this Registration Statement.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Charles D. Miller Chairman and Chief April 27, 1995
- ---------------------------- Executive Officer;
Charles D. Miller Director
/s/ Philip M. Neal President; Director April 27, 1995
- ----------------------------
Philip M. Neal
/s/ R. Gregory Jenkins Senior Vice President, April 27, 1995
- ---------------------------- Finance and Chief
R. Gregory Jenkins Financial Officer
(Principal Financial
Officer)
/s/ Thomas E. Miller Vice President and April 27, 1995
- ---------------------------- Controller (Principal
Thomas E. Miller Accounting Officer)
/s/ R. Stanton Avery Founder and Chairman April 27, 1995
- ---------------------------- Emeritus; Director
R. Stanton Avery
/s/ H. Russell Smith Chairman of the Executive April 27, 1995
- ---------------------------- Committee; Director
H. Russell Smith
S-1
<PAGE>
SIGNATURES (CONTINUED)
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Dwight L. Allison, Jr. Director April 27, 1995
- ----------------------------
Dwight L. Allison, Jr.
/s/ John C. Argue Director April 27, 1995
- ----------------------------
John C. Argue
/s/ Joan T. Bok Director April 27, 1995
- ----------------------------
Joan T. Bok
/s/ Frank V. Cahouet Director April 27, 1995
- ----------------------------
Frank V. Cahouet
/s/ F. Daniel Frost Director April 27, 1995
- ----------------------------
F. Daniel Frost
/s/ Richard M. Ferry Director April 27, 1995
- ----------------------------
Richard M. Ferry
/s/ Peter W. Mullin Director April 27, 1995
- ----------------------------
Peter W. Mullin
/s/ Sidney R. Petersen Director April 27, 1995
- ----------------------------
Sidney R. Petersen
- ---------------------------- Director April __, 1995
John B. Slaughter
/s/ Lawrence R. Tollenaere Director April 27, 1995
- ----------------------------
Lawrence R. Tollenaere
S-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Avery
Dennison Corporation Employee Savings Plan has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pasadena, State of California, on this 27th of April,
1995.
AVERY DENNISON CORPORATION, Administrator
By /s/ Charles D. Miller, Chairman
---------------------------------------
Charles D. Miller, Chairman
and Chief Executive Officer
S-3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
- ---------- ----
3.1 Restated Articles of Incorporation. Incorporated by N/A
reference to Exhibit B to Registrant's Proxy Statement
dated February 28, 1977 for Annual Meeting of
Stockholders March 30, 1977.
3.1.1 Amendment to Certificate of Incorporation, filed April 10, N/A
1984 with Office of Delaware Secretary of State.
Incorporated by reference to Exhibit 3.1.1 to Registrant's
1983 Annual Report on Form 10-K.
3.1.2 Amendment to Certificate of Incorporation, filed April 11, N/A
1985 with Office of Delaware Secretary of State.
Incorporated by reference to Exhibit 3.1.2 to Registrant's
1984 Annual Report on Form 10-K.
3.1.3 Amendment to Certificate of Incorporation, filed April 6, N/A
1987 with Office of Delaware Secretary of State.
Incorporated by reference to Exhibit 3.1.3 to Registrant's
1986 Annual Report on Form 10-K.
3.1.4 Amendment to Certificate of Incorporation, filed October N/A
17, 1990 with Office of Delaware Secretary of State.
Incorporated by reference to Exhibit 3.1 to Registrant's
Current Report on Form 8-K filed October 31, 1990.
3.2 Bylaws, as amended. Incorporated by reference to Exhibit N/A
3.2 to Registrant's 1994 Annual Report on Form 10-K.
4.1 Eleventh Amendment to Avery Dennison Corporation
Employee Savings Plan.
4.2 Twelfth Amendment to Avery Dennison Corporation
Employee Savings Plan.
4.3 Thirteenth Amendment to Avery Dennison Corporation
Employee Savings Plan.
5.1 Internal Revenue Service determination letter dated
November 6, 1990.
23.1 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (page S-1). N/A
<PAGE>
EXHIBIT 4.1
ELEVENTH AMENDMENT TO
AVERY DENNISON CORPORATION
EMPLOYEE SAVINGS PLAN
<PAGE>
ELEVENTH AMENDMENT TO
AVERY DENNISON CORPORATION
EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Preamble........................................................... 1
ARTICLE I - DEFINITIONS............................................ 3
Section 1.1 - General......................................... 3
Section 1.2 - Accounts........................................ 3
Section 1.3 - Active Participant.............................. 3
Section 1.4 - Administrator................................... 3
Section 1.5 - After-Tax Savings ("ATS") Account............... 3
Section 1.6 - Annual Addition................................. 4
Section 1.7 - Bargaining Unit................................. 5
Section 1.8 - Basic ATS Account............................... 5
Section 1.9 - Basic PTS Account............................... 5
Section 1.10 - Beneficiary.................................... 5
Section 1.11 - Board.......................................... 6
Section 1.12 - Break in Service Year.......................... 6
Section 1.13 - Cash Account................................... 6
Section 1.14 - Code........................................... 6
Section 1.15 - Company; Company Affiliate..................... 7
Section 1.16 - Company Contributions Account.................. 7
Section 1.17 - Company Stock.................................. 7
Section 1.18 - Company Stock Fund............................. 7
Section 1.19 - Compensation................................... 7
Section 1.20 - Contribution Percentage........................ 8
Section 1.21 - Current Obligations............................ 9
Section 1.22 - Deferral Percentage............................ 9
Section 1.23 - Deferred Compensation.......................... 10
Section 1.24 - Direct Rollover................................ 10
Section 1.25 - Distributee.................................... 10
Section 1.26 - Disability Retirement.......................... 10
Section 1.27 - Disability Retirement Date..................... 10
Section 1.28 - Eligible Retirement Plan....................... 10
Section 1.29 - Eligible Rollover Distribution................. 11
Section 1.30 - Employee....................................... 11
Section 1.31 - ERISA.......................................... 11
Section 1.32 - ESOP Account................................... 12
Section 1.33 - ESOP Effective Date............................ 12
Section 1.34 - Freely Tradeable Stock......................... 12
Section 1.35 - Hardship....................................... 12
Section 1.36 - Highly Compensated Employee.................... 14
Section 1.37 - Hour of Service................................ 16
Section 1.38 - Included Affiliate Employee.................... 17
Section 1.39 - Investment Fund................................ 17
Section 1.40 - Leveling Method................................ 17
Section 1.41 - Leveraged Company Stock........................ 17
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1.42 - Merged Participant............................. 17
Section 1.43 - Military Leave................................. 18
Section 1.44 - Normal Retirement.............................. 18
Section 1.45 - Normal Retirement Date......................... 18
Section 1.46 - Option Stock................................... 18
Section 1.47 - Participant.................................... 18
Section 1.48 - Payday......................................... 18
Section 1.49 - Plan........................................... 19
Section 1.50 - Plan Representative............................ 19
Section 1.51 - Plan Year...................................... 19
Section 1.52 - Pretax Savings ("PTS") Account................. 19
Section 1.53 - Prior Account.................................. 19
Section 1.54 - Qualified Account.............................. 19
Section 1.55 - Qualified Company Contributions Account........ 19
Section 1.56 - Qualified Company Matching Account............. 20
Section 1.57 - Qualified Company Non-Matching Account......... 20
Section 1.58 - Qualified ESOP Account......................... 20
Section 1.59 - Qualified ESOP Matching Account................ 20
Section 1.60 - Qualified ESOP Non-Matching Account............ 20
Section 1.61 - Qualified Holder............................... 20
Section 1.62 - Rollover Account............................... 20
Section 1.63 - Rules of the Plan.............................. 20
Section 1.64 - Separation from the Service.................... 21
Section 1.65 - Service........................................ 21
Section 1.66 - Spousal Consent................................ 21
Section 1.67 - Spouse; Surviving Spouse....................... 22
Section 1.68 - Statutory Compensation......................... 22
Section 1.69 - Stock Accounts................................. 23
Section 1.70 - Subfund........................................ 23
Section 1.71 - Suspense Account............................... 23
Section 1.72 - Trust.......................................... 23
Section 1.73 - Trust Agreement................................ 23
Section 1.74 - Trust Fund..................................... 23
Section 1.75 - Trustee........................................ 23
Section 1.76 - Unmatched ATS Account.......................... 23
Section 1.77 - Unmatched PTS Account.......................... 24
Section 1.78 - Valuation Date................................. 24
Section 1.79 - Vested......................................... 24
Section 1.80 - Years of Vesting Service....................... 24
ARTICLE II - ELIGIBILITY........................................... 24
Section 2.1 - Requirements for Participation.................. 24
Section 2.2 - Notice of Participation......................... 25
Section 2.3 - Enrollment Form................................. 25
Section 2.4 - Inactive Status................................. 25
ARTICLE III - PRETAX SAVINGS CONTRIBUTIONS......................... 26
Section 3.1 - PTS Contributions............................... 26
Section 3.2 - Suspension of Deferral.......................... 26
Section 3.3 - Commencement, Resumption or
Change of Deferred Compensation................. 26
Section 3.4 - Deposit in Trust................................ 27
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 3.5 - Deferral Percentage Fail-Safe Provisions........ 27
ARTICLE IV - AFTER-TAX SAVINGS CONTRIBUTIONS....................... 30
Section 4.1 - ATS Contributions............................... 30
Section 4.2 - Change, Commencement, Discontinuance
or Resumption of ATS Contributions.............. 31
Section 4.3 - Withholding of ATS Contributions................ 31
Section 4.4 - ATS Account..................................... 31
Section 4.5 - Deposit in Trust................................ 31
ARTICLE V - CONTRIBUTIONS OF THE COMPANY........................... 31
Section 5.1 - Determination of Annual Contribution............ 31
Section 5.2 - Maximum Annual Contribution..................... 32
Section 5.3 - Contribution Date............................... 32
Section 5.4 - Form of Contributions........................... 33
ARTICLE VI - PARTICIPATION IN COMPANY CONTRIBUTIONS AND
FORFEITURES........................................... 33
Section 6.1 - PTS Account..................................... 33
Section 6.2 - Company Contributions Account; ESOP
Account; Qualified Account...................... 33
Section 6.3 - Allocation of Company Contributions and
ESOP Stock...................................... 34
Section 6.4 - Allocation of Cash Dividends.................... 34
Section 6.5 - Allocation of Stock Dividends................... 35
Section 6.6 - Allocation of Stock Rights,
Warrants and Options............................ 35
Section 6.7 - Suspense Account................................ 36
Section 6.8 - Release and Allocation of
Leveraged Company Stock Account................. 36
Section 6.9 - Application of Forfeitures...................... 37
Section 6.10 - Diversification................................ 37
Section 6.11 - Contribution Percentage Fail-Safe
Provisions..................................... 39
ARTICLE VII - INVESTMENT OF ACCOUNTS............................... 40
Section 7.1 - Subfunds........................................ 40
Section 7.2 - Investment of New Contributions................. 41
Section 7.3 - Investment Transfers............................ 41
Section 7.4 - Transfer of Assets.............................. 41
Section 7.5 - Effect of Non-Election.......................... 41
ARTICLE VIII - VALUATION OF THE TRUST FUND AND ACCOUNTS............ 41
Section 8.1 - Determination of Values......................... 41
Section 8.2 - Allocation of Values............................ 43
Section 8.3 - Applicability of Account Values................. 43
ARTICLE IX - VESTING AND WITHDRAWALS............................... 43
Section 9.1 - Vesting of Accounts............................. 43
Section 9.2 - Unrestricted Withdrawals........................ 44
Section 9.3 - Restricted Withdrawals.......................... 44
Section 9.4 - Conditions for Hardship Withdrawal.............. 44
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 9.5 - Withdrawal by Reason of Contribution
Limitations.................................... 46
Section 9.6 - Withdrawals Upon Attainment of Age
Fifty Nine and One Half......................... 47
Section 9.7 - Qualified Account and Stock Accounts............ 47
Section 9.8 - Withdrawals from Subfunds....................... 47
ARTICLE X - EMPLOYMENT AFTER NORMAL RETIREMENT DATE................ 47
Section 10.1 - Continuation of Employment..................... 47
Section 10.2 - Continuation of Participation.................. 47
Section 10.3 - Mandatory In-Service Distributions............. 47
ARTICLE XI - BENEFITS UPON RETIREMENT.............................. 48
Section 11.1 - Normal or Disability Retirement................ 48
Section 11.2 - Rights Upon Normal or Disability
Retirement..................................... 48
Section 11.3 - Distribution of Accounts....................... 48
ARTICLE XII - BENEFITS UPON DEATH.................................. 50
Section 12.1 - Designation of Beneficiary..................... 50
Section 12.2 - Distribution on Death.......................... 50
Section 12.3 - Election of Other Payment Methods.............. 51
ARTICLE XIII - BENEFITS UPON RESIGNATION OR DISCHARGE.............. 52
Section 13.1 - Distributions on Resignation or
Discharge...................................... 52
Section 13.2 - Forfeitures.................................... 53
Section 13.3 - Restoration of Forfeitures..................... 53
ARTICLE XIV - TOP HEAVY PROVISIONS................................. 54
Section 14.1 - Top Heavy Determination........................ 54
Section 14.2 - Minimum Benefits............................... 57
Section 14.3 - Vesting........................................ 57
Section 14.4 - Limitation on Benefits......................... 58
ARTICLE XV - ADMINISTRATIVE PROVISIONS............................. 58
Section 15.1 - Duties and Powers of the Administrator......... 58
Section 15.2 - Expenses of Administration..................... 59
Section 15.3 - Payments....................................... 60
Section 15.4 - Statement to Participants...................... 60
Section 15.5 - Inspection of Records.......................... 60
Section 15.6 - Claims Procedure............................... 60
Section 15.7 - Conflicting Claims............................. 62
Section 15.8 - Effect of Delay or Failure to Ascertain
Amount Distributable or to Locate Distributee.. 62
Section 15.9 - Service of Process............................. 63
Section 15.10- Limitations Upon Powers of the
Administrator.................................. 63
Section 15.11- Effect of Administrator Action................. 63
Section 15.12- Contributions to Rollover Accounts............. 63
Section 15.13- Transfers to Rollover Accounts................. 64
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 15.14 - Loans to Participants or Former
Participants.................................. 65
Section 15.15 - Distributions Pursuant to Qualified
Domestic Relations Orders..................... 67
Section 15.16 - Correction of Administrative
Error; Special Contribution................... 67
Section 15.17 - Direct Rollovers.............................. 67
ARTICLE XVI - TERMINATION, DISCONTINUANCE, AMENDMENT,
MERGER, ADOPTION OF PLAN............................. 68
Section 16.1 - Termination of Plan; Discontinuance
of Contributions.............................. 68
Section 16.2 - Amendment of Plan.............................. 69
Section 16.3 - Retroactive Effect of Plan Amendment........... 69
Section 16.4 - Consolidation or Merger; Adoption
of Plan by Other Companies.................... 70
ARTICLE XVII - SALE OF COMPANY STOCK............................... 70
Section 17.1 - Option to Sell Shares of Company Stock......... 70
ARTICLE XVIII - MISCELLANEOUS PROVISIONS........................... 73
Section 18.1 - Identification of Fiduciaries.................. 73
Section 18.2 - Allocation of Fiduciary
Responsibilities.............................. 73
Section 18.3 - Limitation on Rights of Employees.............. 74
Section 18.4 - Limitation on Annual Additions;
Treatment of Otherwise Excessive
Allocations.................................... 74
Section 18.5 - Voting Rights.................................. 76
Section 18.6 - Delays in Payment.............................. 77
Section 18.7 - Restriction on Leveraged Company Stock......... 77
Section 18.8 - Governing Law.................................. 77
Section 18.9 - Genders and Plurals............................ 78
Section 18.10- Titles......................................... 78
Section 18.11- References..................................... 78
</TABLE>
SUPPLEMENT A
SUPPLEMENT B
SUPPLEMENT C
SUPPLEMENT D
SUPPLEMENT E
EXHIBIT 1
EXHIBIT 2
v
<PAGE>
ELEVENTH AMENDMENT TO
AVERY DENNISON CORPORATION
EMPLOYEE SAVINGS PLAN
Avery International Corporation, a corporation organized under the
laws of the State of Delaware, by resolution of its Board of Directors adopted
on November 18, 1982, adopted the most recent previous restatement of Avery
International Employee Savings Plan (the "Plan") for the exclusive benefit of
its eligible Employees, effective as of January 1, 1982. The Plan was amended
in October, 1985, August 12, 1986, June 25, 1987, January 6, 1988, November 28,
1989, May 31, 1990, October 26, 1990.
On October 16, 1990, pursuant to a corporate acquisition, Avery
International Corporation changed its name to Avery Dennison Corporation. The
Plan was amended on December 20, 1990 to change the name of the Plan to reflect
this name change and subsequently on May 6, 1991, and February 16, 1993.
The Plan was originally adopted on November 30, 1953 under the name
"Stock Bonus and Retirement Plan for the Employees of Avery Adhesive Label
Corp." and amended fourteen times through January 25, 1974. Effective December
1, 1976, the Company restated the Plan and renamed it "Avery International
Employee Savings Plan". The Plan was amended on September 28, 1978 and June 28,
1979 prior to its most recent previous restatement (pursuant to which numbering
of amendments began again with the "first" amendment).
In order to (1) provide for the transfer to this Plan of accounts of
certain participants in the Avery Dennison Office Products Company Pre-Tax
Investment Plus Plan and the Dennison Manufacturing Company Pre-Tax Investment
Plus Plan; (2) provide for the merger into this Plan of the Dennison Employee
Stock Ownership Plan; and (3) comply with amendments to the Internal Revenue
Code through the Unemployment Compensation Amendments of 1992 and subsequent
regulations, this amendment to the Plan has been adopted by a resolution of the
Board of Directors of the Company on April __, 1993 effective as provided in
Exhibit 1 hereto. This amendment to the Plan constitutes a complete amendment,
restatement and continuation of the Plan.
The purposes of the Plan are:
(1) To permit Participants to share in the Company's success.
(2) To stimulate and maintain among Participants a sense of
responsibility, cooperative
<PAGE>
effort and a sincere interest in the progress and success of the Company.
(3) To increase the efficiency of Participants and to encourage
them to remain with the Company until retirement from active service.
(4) To provide security for Participants by establishing a plan
under which each Participant's share of Company contributions, his personal
contributions, his deferrals and the earnings thereon will be invested and
accumulated to create a fund to benefit him in the event of his disability
or other termination of employment.
The Plan consists of two plans, a profit-sharing plan and a leveraged
ESOP, under a single document. The document consists of Articles I-XVIII and
Supplements containing special provisions to effectuate the merger of plan
assets and liabilities with, or the transfer of accounts to, this Plan. The
provisions of a Supplement apply only to individuals with respect to whom assets
and liabilities were transferred to this Plan as described in such Supplement.
The profit-sharing portion of the Plan is intended to comply with the
provisions of Sections 401, 401(k), 402(a) and other applicable provisions of
the Code, similar provisions of the California Revenue and Taxation Code, ERISA
and Section 7(e)(4) of the Fair Labor Standards Act of 1938, as amended. Its
assets consist of all Accounts and allocations thereto with respect to all
periods prior to the ESOP Effective Date, and other assets as described in
Supplements.
The leveraged ESOP portion of the Plan is a stock bonus plan which is
intended to form an employee stock ownership plan within the meaning of Section
407(d)(6)(A) of ERISA and Section 4975(d)(3) of the Code. This portion of the
Plan is designed to invest in qualifying employer securities within the meaning
of ERISA Section 407(d)(5) and Code Section 4975(e)(8) and is intended to comply
with the provisions of Sections 401, 402(a), 404(a)(3), 404(a)(9) and 404(k) and
other applicable provisions of the Code, similar provisions of the California
Revenue and Taxation Code or other applicable state law and ERISA and Section
7(e)(4) of the Fair Labor Standards Act of 1938, as amended. Its assets consist
of all Accounts (but for Accounts described in Supplements only to the extent
there stated) and allocations thereto with respect to all periods beginning on
or after the ESOP Effective Date.
For purposes of Code Section 401(a)(28)(B) an Employee's "Years of
Participation" shall not commence before the ESOP Effective Date and any Company
Stock held by the profit-sharing portion of the Plan shall not be considered to
be held by a trust which is part of an employee stock ownership plan.
2
<PAGE>
It is also intended that disability payments received by Participants
pursuant to the Plan shall qualify for exclusion from income under Section 105
of the Internal Revenue Code.
ARTICLE I
DEFINITIONS
-----------
Section 1.1 - General
- ----------- -------
Whenever any of the following terms is used in the Plan with the first
letter or letters capitalized, it shall have the meaning specified below unless
the context clearly indicates to the contrary.
Section 1.2 - Accounts
- ----------- --------
"Account" or "Accounts" of a Participant, former Participant or Merged
Participant shall mean, as the context indicates, any one or more of his Company
Contributions Account, his Pretax Savings ("PTS") Account, his After-tax Savings
("ATS") Account, his Prior Account, his Qualified Account, his Rollover Account,
and his ESOP Account, if any, in the Trust Fund established in accordance with
Sections 6.2(a), 6.1, 4.4, 1.53, 6.2(c), 15.12, and 6.2(b), respectively.
Section 1.3 - Active Participant
- ----------- ------------------
"Active Participant" shall mean a Participant who is an Employee and
is not in a Bargaining Unit.
Section 1.4 - Administrator
- ----------- -------------
"Administrator" shall mean the Avery Dennison Corporation, acting
through its chief executive officer or his delegate.
Section 1.5 - After-Tax Savings ("ATS") Account
- ----------- ---------------------------------
"After-Tax Savings Account" ("ATS Account") of a Participant,
consisting of his Basic ATS Account and his Unmatched ATS Account, shall mean
his individual Account in the Trust Fund established in accordance with Section
4.4, each consisting of two sub-accounts, the "Pre-1987 Basic ATS Sub-Account"
and the "Pre-1987 Unmatched ATS Sub-Account" (which consist of allocations to
his Basic ATS Account and his Unmatched ATS Account, respectively, made prior to
January 1, 1987 including transfers thereto attributable to personal after-tax
contributions made prior to January 1, 1987 together with earnings thereon) and
the "Post-1986 Basic ATS Sub-Account" and "Post-1986 Unmatched ATS Sub-Account"
(which consist of allocations to his Basic ATS Account and Unmatched ATS
Account, respectively, made after December 31, 1986 including transfers
3
<PAGE>
thereto attributable to after-tax personal contributions made after December 31,
1986 together with earnings thereon).
Section 1.6 - Annual Addition
- ----------- ---------------
"Annual Addition" of a Participant for the Plan Year in question shall
mean the sum of
(a) Company contributions and forfeitures allocated to his ESOP
Account, Company Contributions Account and Qualified Account for that Plan
Year,
(b) Company contributions and forfeitures allocated to his PTS
Account for that Plan Year (excluding any excess amounts determined under
Code Section 402(g) which are distributed to him pursuant to Section
18.4(b) not later than the April 15 following the calendar year in which
such excess amounts were deferred),
(c) Company contributions and forfeitures allocated to his
accounts under all other qualified defined contribution plans, if any, of
the Company and any Company Affiliate for that Plan Year,
(d) His contributions to his ATS Account under the Plan
(excluding any excess amounts distributed to him pursuant to Section
18.4(b)) and his personal contribution under all other qualified defined
contribution plans, if any, of the Company and any Company Affiliate for
that Plan Year, and
(e) Except for purposes of Section 18.4(a)(i), the sum of
(i) Company contributions allocated after March 31, 1984 to
an individual medical account as defined in Code Section 415(l)(1), if
any, which is maintained under a qualified pension or annuity plan,
and
(ii) Company contributions paid or accrued for Plan Years
ending after December 31, 1985, if any, and allocated to the separate
account of a Key Employee (as defined in Section 14.1(b)(iv)) for the
purpose of providing post-retirement medical benefits,
whether or not such allocations or contributions have been recharacterized or
distributed pursuant to Sections 3.5, 6.11, 9.3 or 9.5.
4
<PAGE>
Provided however, that for any Plan Year for which no more than one
third of the Company contributions which are deductible under Code Section
404(a)(9) are allocated to Highly Compensated Employees, the Annual Addition of
a Participant shall not include
(a) his share of Company contributions for such Plan Year which
are deductible under Code Section 404(a)(9)(B), or
(b) his share of forfeitures of Company Stock acquired with the
proceeds of a loan or installment obligation described in Code Section
404(a)(9)(A).
Section 1.7 - Bargaining Unit
- ----------- ---------------
"Bargaining Unit" shall mean a bargaining unit covered by a
collective bargaining agreement with the Company
(a) if retirement benefits were the subject of good faith
bargaining with respect to such agreement, and
(b) if such agreement does not provide for the coverage under the
Plan of Employees in such unit.
For all purposes hereunder (except testing under Code Section 410(b)),
"Bargaining Unit" shall also include a unit of employees represented by a labor
union for purposes of collective bargaining unless covered by a collective
bargaining agreement providing for coverage under the plan of Employees in such
unit. Exhibits 2A and 2B hereto contain lists of Bargaining Units satisfying
the first and second sentences of this Section, respectively.
Section 1.8 - Basic ATS Account
- ----------- -----------------
"Basic ATS Account" of a Participant shall mean the portion of his ATS
Account so designated, as described in Section 4.4.
Section 1.9 - Basic PTS Account
- ----------- -----------------
"Basic PTS Account" of a Participant shall mean his individual Account
established in connection with Section 6.1.
Section 1.10 - Beneficiary
- ------------ -----------
"Beneficiary" shall mean a person or trust properly designated by a
Participant or former Participant to receive benefits, or such Participant's
Spouse or heirs at law, as provided in Article XII.
5
<PAGE>
Section 1.11 - Board
- ------------ -----
"Board" shall mean the board of directors of Avery Dennison
Corporation.
Section 1.12 - Break in Service Year
- ------------ ---------------------
"Break in Service Year" of an Employee or former Employee shall mean
the three hundred and sixty-five day period
(a) which begins on the later of
(i) the date of his last Separation from the Service, or
(ii) if the Employee furnishes to the Administrator such
timely information as the Administrator may reasonably require to
establish that the Employee's absence from work is for any of the
following reasons or purposes, the second anniversary of the first day
of his absence from work
a by reason of pregnancy of the Employee,
-
b by reason of the birth of a child of the Employee,
-
c by reason of the placement of a child with the
-
Employee in connection with the adoption of such child by the
Employee, or
d for purposes of caring for such child for a period
-
beginning immediately following such birth or placement, and
(b) during no part of which he was an Employee or employed by a
Company Affiliate.
Section 1.13 - Cash Account
- ------------ ------------
"Cash Account" of a Participant shall mean that portion of his
Stock Accounts which has not yet been used to purchase Company Stock.
Section 1.14 - Code
------------ ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
6
<PAGE>
Section 1.15 - Company; Company Affiliate
------------ --------------------------
(a) "Company" shall mean Avery Dennison Corporation, Dennison
Manufacturing Company, Avery Dennison Office Products Company, any other
company which subsequently adopts the Plan as a whole or as to any one or
more divisions, in accordance with Section 16.4(c), and any successor
company which continues the Plan under Section 16.4(a).
(b) "Company Affiliate" shall mean any employer which, at the
time of reference, was, with the Company, a member of a controlled group of
corporations or trades or businesses under common control, or a member of
an affiliated service group, as determined under regulations issued by the
Secretary of the Treasury or his delegate under Code Sections 414(b), (c),
(m) and 415(h) and any other entity required to be aggregated with the
Company pursuant to regulations issued under Code Section 414(o).
Section 1.16 - Company Contributions Account
------------ -----------------------------
"Company Contributions Account" of a Participant shall mean his
individual account in the Trust Fund established in accordance with Section
6.2(a).
Section 1.17 - Company Stock
------------ -------------
"Company Stock" shall mean common stock of Avery Dennison
Corporation.
Section 1.18 - Company Stock Fund
------------ ------------------
"Company Stock Fund" shall mean the Subfund invested exclusively
in Company Stock.
Section 1.19 - Compensation
------------ ------------
(a) "Compensation" of a Participant for any Plan Year shall mean
his Statutory Compensation for such Plan Year
(i) and including amounts not includable in gross income by
reason of Code Sections 125 (cafeteria plans), 402(e)(3) (401(k)
plans), 402(h) or 403(b),
(ii) and excluding all reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation, any awards pursuant to the Key Executive Long-
Term Incentive Plan, and welfare benefits (including severance
benefits) (even if includable in gross income),
but in no event greater than $200,000 (adjusted for increases in the cost of
living described in Code Section 401(a)(17) and, if the Plan Year is less than
twelve months, such limit shall be
7
<PAGE>
reduced to an amount equal to such limit multiplied by a fraction, the numerator
representing the number of months in the Plan Year and the denomination of which
is twelve).
(b) With respect to applicable family members of Participants
described in Section 1.36(b)(ii), the provisions of Code Section 414(q)(6), as
modified by Code Section 401(a)(17) shall apply.
(c) The Administrator may elect for any Plan Year and solely for the
purposes of Sections 1.20 and 1.22 to exclude from Compensation of Participants
that part thereof deferred under Article III and under cafeteria plans.
Section 1.20 - Contribution Percentage
- ------------ -----------------------
(a) "Contribution Percentage" for a Plan Year shall mean, with respect
to eligible Participants who are Highly Compensated Employees as a group and to
eligible Participants who are not Highly Compensated Employees as a group, the
average of the decimal numbers obtained, as to each such Participant, by
dividing
(i) his allocations described in subsection (b), by
(ii) his Compensation for that portion of the Plan Year during
which he was eligible to contribute to his ATS Account or to receive
allocations to his Company Contributions Account.
(b) The allocations described in this subsection are
(i) allocations to his ATS Account, excluding any excess amounts
distributed to him pursuant to Section 18.4(b),
(ii) allocations to his ESOP Account under Section 6.3(b),
(iii) allocations to his PTS Account, to the extent that the
Administrator elects to take such allocations into account under Section
6.11(b)(ii),
(iv) allocations to his Qualified Company Non-Matching Account
and his Qualified ESOP Non-Matching Account to the extent the Administrator
elects to take such allocations into account under Section 6.11(b)(iv), and
(v) allocations deemed to be personal contributions under Section
3.5(d)(v).
8
<PAGE>
(c) (i) For purposes of this Section, all plans required to be taken
into account under Code Section 401(m)(2)(B) shall be treated as a single
plan.
(ii) This Section shall be applied separately with respect to each
"plan," within the meaning of Treas. Reg. Section 1.401(m)-1(f)(14).
(d) The Administrator may elect to limit Compensation of a Participant
taken into account for purposes of subsection (a)(ii) to amounts received by him
while he is eligible to contribute to his ATS Account or receive a contribution
to his Company Contributions Account for that entire Plan Year; provided,
however, that such determination shall be applied uniformly to all Participants
for the year in question.
Section 1.21 - Current Obligations
- ------------ -------------------
"Current Obligations" shall mean obligations of the Trust arising from
extensions of credit to the Trust, in connection with the purchase by the Trust
of Leveraged Company Stock, and either
(a) payable in cash within one year from the date of reference
pursuant to the terms of the applicable credit agreement, or
(b) specified by the Administrator as subject to current payment
with Trust assets available therefor pursuant to the terms of this Plan.
Section 1.22 - Deferral Percentage
- ------------ -------------------
(a) "Deferral Percentage" for a Plan Year shall mean, with
respect to eligible Participants who are Highly Compensated Employees as a
group and to eligible Participants who are not Highly Compensated Employees
as a group, the average of the decimal numbers obtained, as to each such
Participant, by dividing
(i) the amount, if any, credited to his PTS Account for that Plan
Year in question under this Plan and any other plans which are aggregated
with this Plan under Code Section 401(k)(3)(A) (including any excess
amounts described in Code Section 402(g) if he is a Highly Compensated
Employee but excluding any excess amounts distributed to him pursuant to
Section 18.4(b)) (and, to the extent elected by the Administrator under
Section 3.5(d) amounts credited to his Qualified Account for that Plan
Year), by
(ii) his Compensation for that portion of the Plan Year during
which he was eligible to defer Compensation to his PTS Account.
9
<PAGE>
(b) The Administrator may elect to limit Compensation of a Participant
taken into account for purposes of subsection (a)(ii) to amounts received by him
while he is eligible to defer Compensation for that entire Plan Year; provided,
however, that such determination shall be applied uniformly to all Participants
for the year in question.
(c) This Section shall be applied separately with respect to each
"plan," within the meaning of Treas. Reg. Section 1.401(k)-1(g)(11).
Section 1.23 - Deferred Compensation
- ------------ ---------------------
"Deferred Compensation" of a Participant shall mean an amount
contributed by the Company to the Plan for him under Section 5.1(a).
Section 1.24 - Direct Rollover
- ------------ ---------------
"Direct Rollover" shall mean a payment by the Plan to an Eligible
Retirement Plan designated by a Distributee.
Section 1.25 - Distributee
- ------------ -----------
"Distributee" shall mean a Participant or former Participant,
Surviving Spouse of a Participant or former Participant, or a Spouse or former
Spouse of a Participant or former Participant who is an alternative payee under
a qualified domestic relations order, as defined in Code Section 414(p).
Section 1.26 - Disability Retirement
- ------------ ---------------------
"Disability Retirement" of a Participant or Merged Participant shall
mean his Separation from the Service authorized by the Administrator upon its
finding, based on competent medical evidence, that the Participant, as a result
of mental or physical disease or condition, will be permanently unable to
discharge his assigned duties.
Section 1.27 - Disability Retirement Date
- ------------ --------------------------
"Disability Retirement Date" of a Participant or Merged Participant
shall mean the date (prior to his Normal Retirement Date) fixed by the
Administrator for his Disability Retirement.
Section 1.28 - Eligible Retirement Plan
- ------------ ------------------------
"Eligible Retirement Plan" shall mean an individual retirement account
(described in Code Section 408(a)), an individual retirement annuity (described
in Code Section 408(b)), an annuity plan (described in Code Section 403(a)), or
a qualified trust (described in Code Section 401(a)), that will accept a
Distributee's Eligible Rollover Distribution; provided, however, that in the
case of an Eligible Rollover Distribution to
10
<PAGE>
a Distributee who is a Surviving Spouse of a Participant or former Participant,
an "Eligible Retirement Plan" shall mean only an individual retirement account
or an individual retirement annuity.
Section 1.29 - Eligible Rollover Distribution
- ------------ ------------------------------
(a) Except as provided in subsection (b), "Eligible Rollover
Distribution" shall mean any distribution of all or any portion of a
Participant's or former Participant's Accounts to a Distributee.
(b) "Eligible Rollover Distribution" shall not mean any distribution
(i) 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 Beneficiary,
(ii) that is paid for a specified period of ten years or more,
(iii) to the extent such distribution is required under Code
Section 401(a)(9), or
(iv) to the extent such distribution is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
Section 1.30 - Employee
- ------------ --------
"Employee" shall mean any person who renders services to the
Company in the status of an employee as the term is defined in Code Section
3121(d), including any United States citizen employed by a foreign
subsidiary of the Company to which there applies an agreement under Code
Section 3121(l) and if no contributions to a funded plan of deferred
compensation (whether or not a plan described in Code Sections 401(a),
403(a), or 405(a)) are provided by any other person with respect to the
compensation paid to such citizen by the foreign subsidiary. "Employee"
shall also include any Included Affiliate Employee, but shall not include
leased employees treated as Employees of the Company pursuant to Code
Sections 414(n) and 414(o) or employees of a Company Affiliate. See also
Section 1.36.
Section 1.31 - ERISA
------------ -----
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
11
<PAGE>
Section 1.32 - ESOP Account
------------ ------------
"ESOP Account" of a Participant shall mean his individual account
established in accordance with Section 6.2(b).
Section 1.33 - ESOP Effective Date
------------ -------------------
The "ESOP Effective Date" shall be March 1, 1989.
Section 1.34 - Freely Tradeable Stock
------------ ----------------------
"Freely Tradeable Stock" shall mean Company Stock that, at the
time of reference
(a) is "publicly traded" as that term is defined under Treasury
Regulation Section 54.4975-7(b)(1)(iv) or any successor regulation thereto,
and
(b) is not subject to a "trading limitation" as that term is
defined under Treasury Regulation Section 54.4975-7(b)(10) or any successor
regulation thereto.
Section 1.35 - Hardship
------------ --------
(a) "Hardship" of a Participant as determined by the
Administrator in its discretion on the basis of all relevant facts and
circumstances and in accordance with the following nondiscriminatory and
objective standards, uniformly interpreted and consistently applied, and
without regard to the existence of other resources which are reasonably
available to the Participant in question, shall mean any one or more of the
following:
(i) Unreimbursed expenses for medical care described in Code
Section 213(d) previously incurred by him, his spouse, or his dependent (as
described in Code Section 152) or necessary for him, his spouse or his
dependent to obtain medical care.
(ii) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence for him.
(iii) Payment of tuition and related educational fees for the
next twelve months of post-secondary education for him, his spouse,
children, or his dependents (as so described).
(iv) Payments necessary to prevent his eviction from his
principal residence, or foreclosure on the mortgage of his principal
residence.
12
<PAGE>
(v) Any other event identified by the Commissioner of Internal
Revenue in revenue rulings, notices and/or other documents of general
applicability for inclusion in the foregoing list.
(vi) Costs and expenses for any of the following which constitute
an immediate and heavy financial need of the Participant, if as to him, it
is a rare and unusual event.
a Withholding and/or payment of taxes attributable to a
-
Hardship withdrawal.
b Any of the following events if the event described in the
-
last sentence of Section 15.14(b)(viii) has occurred:
1 Funeral and/or burial of his spouse, parent,
-
brother, sister, child, dependent (as so described), or member of
his immediate household.
2 The purchase or repair of a vehicle for his
-
transportation to and from work at the Company when no other
method of such transportation (including rental or lease of a
vehicle) is reasonably available.
3 The payment of his taxes when necessary to avoid
-
penalties or seizure of his property.
4 The satisfaction of a substantial judgment, award,
-
fine, levy, garnishment or other liability of his.
5 An increase in the size of, or of living space in,
-
his principal residence, when reasonably necessary for the
housing of his immediate family and/or dependents (as so
described).
6 Repair or reconstruction of his principal residence
-
due to fire, flood, wind, earthquake, vandalism or other
casualty.
7 Any other event of equal seriousness and financial
-
impact.
13
<PAGE>
(b) A financial need shall not constitute a Hardship unless
satisfaction thereof requires at least $1,000.00 (or the entire principal amount
of the Participant's PTS Account, if less).
(c) A financial need shall not fail to qualify as immediate and heavy
merely because such need was reasonably foreseeable by the Participant or
voluntarily incurred by him.
Section 1.36 - Highly Compensated Employee
- ------------ ---------------------------
(a) For any current Plan Year, a "Highly Compensated Employee," shall
mean any Employee who
(i) in the previous Plan Year
a was a five percent owner of the Company (within the
-
meaning of Code Section 414(q)(3)),
b had Statutory Compensation from the Company in excess of
-
$75,000 (adjusted as described in Temp. Reg. (S) 1.414(q)-1T A-3(c)),
c had Statutory Compensation from the Company in excess of
-
$50,000 (adjusted as described in Temp. Reg. (S) 1.414(q)-1T A-3(c))
and was in the group consisting of the top twenty percent of Employees
(excluding for such purpose such Employees described in Code Section
414(q)(8) and Temp. Reg. (S) 1.414(q)-1T A-9(b) as are excluded under
the Rules of the Plan) when ranked by Statutory Compensation for the
Plan Year in question, or
d was an officer (within the meaning of Code Sections
-
414(q)(1)(D) and 414(q)(5)) of the Company (not more than fifty
Employees or, if lesser, the greater of three Employees or ten percent
of the Employees shall be treated as officers) and
1 had Statutory Compensation in excess of $45,000
-
(adjusted as described in Code Section 414(q)(1)(D)), or
2 had the greatest Statutory Compensation of any
-
officer, or
(ii) in the current Plan Year
14
<PAGE>
a is described in subparagraph (i)a, or
- -
b is one of the 100 Employees with the greatest Statutory
-
Compensation for such Plan Year and is described in any of
subparagraphs (i) b through d (with the appropriate adjustments to the
- -
dollar amounts as described in Temp. Reg. (S) 1.414(q)-1T A-14(b)(2)),
and any former Employee, who during the Plan Year in which he Separated from the
Service, or during any Plan Year ending on or after his fifty-fifth birthday,
was described in paragraphs (i) or (ii).
(b) (i) For purposes of Sections 1.20 and 1.22 and to the extent
required by Code Sections 401(k) and 401(m) and regulations issued
thereunder, which are incorporated herein by this reference, any Employee
who is, during the previous or current Plan Year, a Spouse, or lineal
ascendant or descendant (or Spouse thereof or other family member as
described in Temp. Reg. (S) 1.414(q)-1T A-12) of any person described in
paragraph (ii), shall not be treated as a separate Employee and any
deferrals made to his PTS Account under Article III, contributions made to
his ATS Account under Article IV, contributions made to his ESOP Account
under Section 6.2(b) and contributions made to his Qualified Account under
Sections 3.5(d) and 6.11(b) shall be treated as if paid to (or on behalf
of) the person described in paragraph (ii).
(ii) A person is described in this paragraph in a Plan Year if he
is
a an Employee or former Employee who is or was a five
-
percent owner of the Company (within the meaning of Code Section
414(q)(3)), or
b one of the ten Employees with the greatest Statutory
-
Compensation for such Plan Year. (The determination of which
Employees are among the ten with the greatest Statutory Compensation
shall be made prior to the application of this subsection (c)).
(iii) The corrections under Sections 3.5(d)(v) and (vi) and
Section 6.11(b)(v) of the contributions of a Highly Compensated Employee
described in this subsection is accomplished according to the Leveling
Method and such excess amounts shall be allocated among the family members
described herein in proportion to
15
<PAGE>
such contributions of each such family member that are combined under
paragraph (i).
(d) For purposes of this Section, "Statutory Compensation" shall
include Compensation deferral amounts and other amounts required to be taken
into account pursuant to Code Section 414(q)(7)(B), and "Employee" shall include
leased Employees treated as Employees of the Company pursuant to Code Section
414(n) or 414(o) and shall include Employees of a Company Affiliate, but shall
not include Employees on a leave of absence throughout the Plan Year, or
Employees who receive Compensation for the Plan Year in an amount less than 50%
of such Employee's average annual compensation for the three consecutive
calendar years preceding the Plan Year during which such Employee received the
greatest amount of Compensation.
Section 1.37 - Hour of Service
- ------------ ---------------
(a) "Hour of Service" of an Employee (including a leased Employee
pursuant to Code Sections 414(n) and (o)) shall mean the following:
(i) Each hour for which he is paid or entitled to payment by the
Company or a Company Affiliate for the performance of services.
(ii) Each hour in or attributable to a period of time during
which he performs no duties (irrespective of whether he has had a
Separation from the Service) due to a vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or a
leave of absence for which he is so paid or so entitled to payment by the
Company or a Company Affiliate, whether direct or indirect; provided,
however, that no such hours shall be credited to an Employee if
attributable to payments made or due under a plan maintained solely for the
purpose of complying with applicable workers' compensation, unemployment
compensation or disability insurance laws or to a payment which solely
reimburses the Employee for medical or medically related expenses incurred
by him.
(iii) Each hour for which he is entitled to back pay, irrespective
of mitigation of damages, whether awarded or agreed to by the Company or a
Company Affiliate.
(b) Hours of Service under subsections (a)(ii) and (a)(iii) shall be
calculated in accordance with 29 C.F.R. (S) 2530.200b-2(b). Each Hour of
Service shall be attributed to the Plan Year in which it occurs except to the
extent that the Company, in accordance with 29 C.F.R. (S) 2530.200b-2(c),
credits
16
<PAGE>
such Hour to another computation period under a reasonable method consistently
applied.
(c) The Hours of Service of an Employee occurring prior to December 1,
1976 shall be determined by the Administrator from reasonably accessible records
by means of appropriate calculations and approximations or, if such records are
insufficient to make an appropriate determination, by reasonable estimation.
Section 1.38 - Included Affiliate Employee
- ------------ ---------------------------
"Included Affiliate Employee" shall mean any person who is employed by
a Company Affiliate and would not be an Employee but for the fact that the Vice
President, Compensation and Benefits of Avery Dennison Corporation has
determined that he be so treated.
Section 1.39 - Investment Fund
- ------------ ---------------
"Investment Fund" shall mean one of the investment funds of the Trust
Fund which is authorized by the Administrator at the time of reference.
Section 1.40 - Leveling Method
- ------------ ---------------
"Leveling Method" shall mean the method of determining the excess
amounts under Section 3.5(a), 3.5(b) or 6.11(a) under which the actual deferral
ratio or the actual contribution ratio, as applicable, of the Highly Compensated
Employee with the highest actual deferral ratio (or actual contribution ratio)
shall be reduced to the extent required to enable the Plan to satisfy Section
3.5(a) or 3.5(b) or Section 6.11(a) or to cause such Highly Compensated
Employee's actual deferral ratio or actual contribution ratio, as applicable, to
equal the ratio of the Highly Compensated Employee with the next highest actual
deferral ratio or actual contribution ratio. This process shall be repeated
until Section 3.5(a), 3.5(b) or Section 6.11(a) is satisfied.
Section 1.41 - Leveraged Company Stock
- ------------ -----------------------
"Leveraged Company Stock" shall mean any Company Stock that is
acquired by the Trustee with the proceeds of a loan made or guaranteed by the
Company or any other party constituting a disqualified person within the meaning
of Code Section 4975(e)(2), or any successor statute, as amended from time to
time.
Section 1.42 - Merged Participant
- ------------ ------------------
"Merged Participant" shall mean any person who is not a Participant
but did participate in a plan which merged with, or
17
<PAGE>
transferred accounts to, the Plan, as described in a Supplement hereto.
Section 1.43 - Military Leave
- ------------ --------------
Any Employee who leaves the Company or a Company Affiliate directly to
perform service in the Armed Forces of the United States or in the United States
Public Health Service under conditions entitling him to reemployment rights, as
provided in the laws of the United States, shall, solely for purposes of the
Plan and irrespective of whether he is compensated by the Company or a Company
Affiliate during such period of service, be on Military Leave. An Employee's
Military Leave shall expire if such Employee voluntarily resigns from the
Company or such Company Affiliate during such period of service or if he fails
to make application for reemployment within the period specified by such laws
for the preservation of his reemployment rights. For purposes of computing an
Employee's Service, no more than 365 days of Service shall be credited for any
Military Leave except as required by Treas. Reg. (S) 1.410(a)-7(b)(6)(iii).
Section 1.44 - Normal Retirement
- ------------ -----------------
"Normal Retirement" of a Participant or Merged Participant shall mean
his Separation from the Service upon his Normal Retirement Date, or after such
date (except by death) as permitted under Article XI.
Section 1.45 - Normal Retirement Date
- ------------ ----------------------
"Normal Retirement Date" of a Participant or Merged Participant shall
mean the first day of the month coinciding with or next following his sixty-
fifth birthday.
Section 1.46 - Option Stock
- ------------ ------------
"Option Stock" shall mean Company Stock that is distributed to a
Qualified Holder if, at the time of distribution, such Company Stock is not
Freely Tradeable Stock.
Section 1.47 - Participant
- ------------ -----------
"Participant" shall mean any person included in the Plan as provided
in Article II, subject to Section 1.42.
Section 1.48 - Payday
- ------------ ------
"Payday" of a Participant shall mean the regular and recurring
established day for payment of Compensation to Employees in his classification
or position.
18
<PAGE>
Section 1.49 - Plan
- ------------ ----
"Plan" shall mean Avery Dennison Corporation Employee Savings Plan,
including, as context requires, plans merged therewith.
Section 1.50 - Plan Representative
- ------------ -------------------
"Plan Representative" shall mean any person or persons designated by
the Administrator to function in accordance with the Rules of the Plan.
Section 1.51 - Plan Year
- ------------ ---------
"Plan Year" shall mean, for the period prior to December 1, 1989,
December 1 through the last day of the following November, for the period
beginning December 1, 1989 and ending May 31, 1990, such period and for the
period beginning June 1, 1990, June 1 through the last day of the following May.
Section 1.52 - Pretax Savings ("PTS") Account
- ------------ ------------------------------
"Pretax Savings Account" ("PTS Account") of a Participant, consisting
of his Basic PTS Account and his Unmatched PTS Account together with such other
accounts, received by this Plan in a trust-to-trust transfer, as the
Administrator shall designate, shall mean his individual Account established in
accordance with Section 6.1.
Section 1.53 - Prior Account
- ------------ -------------
"Prior Account" of a Participant shall mean his account as of November
30, 1976 under the Plan as constituted on that date together with such other
accounts, received by this Plan in a trust-to-trust transfer, as the
Administrator shall designate, each as adjusted from time to time in accordance
with Section 8.2.
Section 1.54 - Qualified Account
- ------------ -----------------
"Qualified Account" of a Participant shall mean his individual account
in the Trust Fund, if any, established in accordance with Section 6.2(c),
pursuant to Sections 3.5 and 6.11.
Section 1.55 - Qualified Company Contributions Account
- ------------ ---------------------------------------
"Qualified Company Contributions Account" of a Participant shall mean
the portion of his Qualified Account established in accordance with Section
6.2(c).
19
<PAGE>
Section 1.56 - Qualified Company Matching Account
- ------------ ----------------------------------
"Qualified Company Matching Account" of a Participant shall mean the
portion of his Qualified Company Contributions Account established in accordance
with Section 6.2(c).
Section 1.57 - Qualified Company Non-Matching Account
- ------------ --------------------------------------
"Qualified Company Non-Matching Account" of a Participant shall mean
the portion of his Qualified Company Contributions Account established in
accordance with Section 6.2(c).
Section 1.58 - Qualified ESOP Account
- ------------ ----------------------
"Qualified ESOP Account" of a Participant shall mean the portion of
his Qualified Account established in accordance with Section 6.2(c).
Section 1.59 - Qualified ESOP Matching Account
- ------------ -------------------------------
"Qualified ESOP Matching Account" of a Participant shall mean the
portion of his Qualified ESOP Account established in accordance with Section
6.2(c).
Section 1.60 - Qualified ESOP Non-Matching Account
- ------------ -----------------------------------
"Qualified ESOP Non-Matching Account" of a Participant shall mean the
portion of his Qualified ESOP Account established in accordance with Section
6.2(c).
Section 1.61 - Qualified Holder
- ------------ ----------------
"Qualified Holder" shall mean the Participant or Beneficiary receiving
a distribution of Company Stock from Stock Accounts, any other party to whom
such stock is transferred by gift or by reason of death and any trustee of an
individual retirement account (as defined under Code Section 408) to which all
or any portion of such distributed Company Stock is transferred pursuant to a
tax-free "rollover" transaction satisfying the requirements of Code Section 402.
Section 1.62 - Rollover Account
- ------------ ----------------
"Rollover Account" of a Participant shall mean his individual account
in the Trust Fund established in accordance with Section 15.12.
Section 1.63 - Rules of the Plan
- ------------ -----------------
"Rules of the Plan" shall mean the rules adopted by the Administrator
pursuant to Section 15.1(a)(iii) for the administration, interpretation or
application of the Plan.
20
<PAGE>
Section 1.64 - Separation from the Service
- ------------ ---------------------------
(a) "Separation from the Service" of an Employee shall mean his
resignation from or discharge by the Company or a Company Affiliate, or his
death, Normal or Disability Retirement but not his transfer among the Company
and Company Affiliates.
(b) A leave of absence or sick leave authorized by the Company or a
Company Affiliate in accordance with established policies, a vacation period, a
temporary layoff for lack of work or a Military Leave shall not constitute a
Separation from the Service; provided, however, that
(i) continuation upon a temporary layoff for lack of work, sick
leave, vacation or leave of absence for a period in excess of twelve months
shall be considered a discharge effective as of the expiration of the
twelfth month of such period, and
(ii) failure to return to work upon expiration of any leave of
absence, sick leave, or vacation or within three days after recall from a
temporary layoff for lack of work, or before expiration of a Military Leave
shall be considered a resignation effective as of the commencement of any
such leave of absence, sick leave, vacation, temporary layoff or Military
Leave except that if the Employee fails to return to work because he has
died or attained age sixty-five, he shall be deemed to have resigned on the
date of his death or attainment of age sixty-five, as applicable.
Section 1.65 - Service
- ------------ -------
"Service" of an Employee, expressed in days, shall mean the
period of elapsed time which, or the sum of such periods each of which, is
measured from
(a) his first Hour of Service, or his first Hour of Service
following a Break in Service Year, as the case may be, to
(b) (i) the first day of his first subsequent Break in Service
Year, or
(ii) the first day of the twelve month period immediately
preceding the first day of his first subsequent Break in Service Year
if the Break in Service Year occurs for the reasons described in
Section 1.12(a)(ii).
Section 1.66 - Spousal Consent
- ------------ ---------------
"Spousal Consent" to an election, designation or other action of a
Participant or Merged Participant, shall mean the written consent thereto of the
Spouse of the Participant or
21
<PAGE>
Merged Participant, witnessed by a Plan Representative or a notary public,
which acknowledges the effect of such election on the rights of the Spouse,
and, in the case of consent to a Beneficiary designation, with such
designation not being changeable without further Spousal Consent unless the
prior Spousal Consent expressly permits such changes without the necessity
of further Consent. Spousal Consent shall be deemed to have been obtained
if it is established to the satisfaction of the Plan Representative that it
cannot actually be obtained because there is no Spouse, or because the
Spouse could not be located, or because of such other circumstances as the
Secretary of the Treasury by regulation may prescribe. Any Spousal Consent
shall be effective only with respect to the Spouse in question.
Section 1.67 - Spouse; Surviving Spouse
------------ ------------------------
"Spouse" or "Surviving Spouse" of a Participant, former
Participant or Merged Participant shall mean the spouse to whom he was
married throughout the 365-day period ending on the date of his death;
provided, however, that to the extent required by a qualified domestic
relations order issued in accordance with Code Section 414(p), a former
Spouse shall be treated as a Surviving Spouse.
Section 1.68 - Statutory Compensation
------------ ----------------------
"Statutory Compensation" of a Participant for any Plan Year shall
mean his total taxable remuneration received from the Company and all
Company Affiliates in that Plan Year for services rendered as an Employee,
exclusive of
(a) Company and Company Affiliate contributions to a
deferred compensation plan (to the extent includable in the
Participant's gross income solely by reason of Code Section 415) or to
a simplified employee pension plan (to the extent deductible by the
Participant) and any distribution from a deferred compensation plan
(other than an unfunded, non-qualified plan),
(b) amounts realized from the exercise of a non-qualified
stock option or taxable by reason of restricted property becoming
freely tradable or free of a substantial risk of forfeiture, as
described in Code Section 83,
(c) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option and
(d) other amounts which receive special tax benefits such as
Company or Company Affiliate contributions toward the purchase of an
annuity contract described in Code Section 403(b) (whether or not
excludable from the Participant's gross income).
22
<PAGE>
Section 1.69 - Stock Accounts
------------ --------------
A "Stock Account" of a Participant shall mean his ESOP Account and, as
required by context, the portion of his Accounts which is first invested in the
Company Stock Fund as of a date on or after the ESOP Effective Date.
Section 1.70 - Subfund
- ------------ -------
"Subfund" shall mean one of the investment funds of the Trust Fund
which is authorized by the Administrator at the time of reference.
Section 1.71 - Suspense Account
- ------------ ----------------
"Suspense Account" shall mean the special Trust Fund Account
established and maintained pursuant to the provisions of Sections 6.8 and 6.9
for the purpose of holding Leveraged Company Stock (until such Company Stock is
released and allocated in accordance with the applicable provisions of this
Plan) and cash.
Section 1.72 - Trust
- ------------ -----
"Trust" shall mean the trust established pursuant to the Trust
Agreement.
Section 1.73 - Trust Agreement
- ------------ ---------------
"Trust Agreement" shall mean that certain Avery Dennison Master
Defined Contribution Plan Trust Agreement providing for the investment and
administration of the Trust Fund. By this reference, the Trust Agreement is
incorporated herein.
Section 1.74 - Trust Fund
- ------------ ----------
"Trust Fund" shall mean the fund established under the Trust Agreement
by contributions made by the Company, Participants and Merged Participants
pursuant to the Plan, and from which any distributions under the Plan are to be
made. It shall be composed of separate Subfunds as described in Section 1.70.
Section 1.75 - Trustee
- ------------ -------
"Trustee" shall mean the Trustee under the Trust Agreement.
Section 1.76 - Unmatched ATS Account
- ------------ ---------------------
"Unmatched ATS Account" of a Participant shall mean the portion of his
ATS Account so designated, as described in Section 4.4.
23
<PAGE>
Section 1.77 - Unmatched PTS Account
- ------------ ---------------------
"Unmatched PTS Account" of a Participant shall mean his individual
Account established in accordance with Section 6.1.
Section 1.78 - Valuation Date
- ------------ --------------
"Valuation Date" shall mean the close of every business day.
Section 1.79 - Vested
- ------------ ------
"Vested," when used with reference to a Participant's or Merged
Participant's Accounts, shall mean non-forfeitable.
Section 1.80 - Years of Vesting Service
- ------------ ------------------------
"Years of Vesting Service" of an Employee, measured in years and
determined as of the point in time in question, shall mean 1/365th of his days
of Service (ignoring any fraction in the result).
ARTICLE II
ELIGIBILITY
-----------
Section 2.1 - Requirements for Participation
- ----------- ------------------------------
(a) Present Participants shall continue to participate in the Plan.
(b) Except as provided in subsections (c) and (d), any other person
who on the first day of any calendar month
(i) is an Employee,
(ii) has completed 365 days of Service, and
(iii) is not employed in a Bargaining Unit
shall become a Participant on such day.
(c) Any Participant whose participation terminates shall again become
a Participant effective as of his first subsequent Hour of Service as an
Employee in a position or classification which is not within a Bargaining Unit.
(d) A former Employee who was not an Employee on the first day of the
calendar month on which he first met all other eligibility requirements shall
become a Participant effective as of his first subsequent Hour of Service as an
Employee in a position or classification which is not within a Bargaining Unit.
24
<PAGE>
Section 2.2 - Notice of Participation
----------- -----------------------
On or before the date on which an Employee becomes a Participant, the
Administrator shall give him written notice thereof.
Section 2.3 - Enrollment Form
- ----------- ---------------
The Administrator shall provide an enrollment form on which the
Participant should set forth
(a) his name,
(b) his consent that he, his successors in interest and assigns
and all persons claiming under him shall, to the extent consistent with
applicable law, be bound by the statements contained therein and the
provisions of the Plan and Trust Agreement as they now exist and as they
may be amended from time to time,
(c) his statement as to whether he elects to defer Compensation
within the limits of Section 3.1, his selection of the amount of his
deferral within the limits of Section 3.1, and his authorization for the
Company to pay the same to the Trust Fund in accordance with Section 5.1,
and
(d) his statement as to whether he elects to make contributions
to his ATS Account in accordance with Section 4.1, his selection of the
amount of his contributions within the limits of Section 4.1 and, in such
case, his authorization to the Company to withhold such amounts from his
Compensation and to pay the same to the Trust Fund in accordance with
Sections 4.3 and 4.5.
Section 2.4 - Inactive Status
- ----------- ---------------
(a) A Participant who is transferred directly to a Company
Affiliate or to a position or classification which is within a Bargaining
Unit shall thereupon cease to be an Active Participant, except where after
such transfer such Participant is an Included Affiliate Employee.
(b) All provisions of the Plan shall otherwise continue to apply
to such Participant, except that he shall not make PTS contributions under
Article III or make ATS contributions under Article IV or share in
allocations under Article VI and Section 18.4 while he is not an Active
Participant.
(c) If such a Participant is retransferred to a position or
classification with the Company which is not within a Bargaining Unit, he
shall thereupon again be an Active
25
<PAGE>
Participant, may again make PTS contributions under Article III and make
ATS contributions under Article IV and shall share in allocations under
Article VI and Section 18.4.
ARTICLE III
PRETAX SAVINGS CONTRIBUTIONS
----------------------------
Section 3.1 - PTS Contributions
- ----------- -----------------
(a) Each Participant may elect, in accordance with the Rules of
the Plan, to defer the lesser of
(i) the sum of
A any whole number percentage, which is not less than one
-
nor more than sixteen percent (or such other percentage as is
established by the Administrator), of his Compensation for each Payday
in such Plan Year, and
B any excess credits permitted to be contributed hereto
-
under Avery Dennison Corporation's Flex Benefits Program, and
(ii) the excess of $7,000 (adjusted for increases in the cost of
living as described in Code Section 402(g)(5)) over any amounts described
in Code Section 402(g)(3) and not deferred hereunder.
(b) The first six percent of Compensation so deferred shall be held
for contribution to the Participant's Basic PTS Account, and the excess, if any,
for his Unmatched PTS Account.
Section 3.2 - Suspension of Deferral
- ----------- ----------------------
A Participant may, upon such prior written notice to the Administrator
as is required under the Rules of the Plan, elect to suspend deferral of his
Compensation.
Section 3.3 - Commencement, Resumption or
- -----------
Change of Deferred Compensation
-------------------------------
As permitted under the Rules of the Plan,
(a) a Participant in the Plan who previously declined to defer a
percentage of his Compensation may, upon such prior written notice to the
Administrator as is required under the Rules of the Plan, elect to commence
deferral of his Compensation under Section 3.1 within the limits thereof;
26
<PAGE>
(b) after he has suspended deferral of his Compensation under
Section 3.2, a Participant may, upon notice to the Administrator, elect to
resume deferral of his Compensation under Section 3.1 within the limits
thereof; and
(c) a Participant may, upon prior written notice to the
Administrator, elect to change his rate of deferral of his Compensation
within the limits of Section 3.1.
Section 3.4 - Deposit in Trust
- ----------- ----------------
A Participant's deferrals shall be transmitted to the Trustee in
accordance with subsections 5.1(a) and 5.3(a) and shall be invested by the
Trustee in accordance with Article VII.
Section 3.5 - Deferral Percentage Fail-Safe Provisions
- ----------- ----------------------------------------
(a) For each Plan Year, the Deferral Percentage with respect to
Participants who are Highly Compensated Employees, shall be
(i) not more than 125 percent of, or
(ii) not more than two percentage points higher than, and not
more than twice,
the Deferral Percentage for such Plan Year with respect to Participants who are
not Highly Compensated Employees or such other amount as may be required by
Treasury Regulations under Code Section 401(m)(9). To the extent necessary to
achieve such result (and notwithstanding Sections 5.1(a) and 6.3(b) as of the
end of each Plan Year, the Administrator shall take or cause to be taken one or
more of the actions listed in subsection (d).
(b) Except as provided in subsection (c), the limitations set forth in
subsection (a)(ii) and Section 6.11(a)(ii) shall not both be utilized for any
Plan Year.
(c) The limitation of subsection (b) shall not apply
(i) if after the application of subsection (d)(ii), (iii), (iv)
and (v) and Section 6.11(b)(ii) and (v) (but only to the extent necessary
to meet the requirements of Section 3.5(a)(ii) or Section 6.11(a)(ii), as
applicable) and before the application of paragraph (ii), the sum of the
Deferral Percentage and the Contribution Percentage of Participants who are
Highly Compensated Employees does not exceed the sum of the Deferral
Percentage and the Contribution Percentage of Participants who are not
Highly Compensated Employees for the Plan Year in question by more than two
percentage points, or
27
<PAGE>
(ii) if
a the limitation of paragraph (i) is exceeded, and
-
b the sum of the Deferral Percentage and the Contribution
-
Percentage of Participants who are Highly Compensated Employees for
such Plan Year does not exceed the greater of
1 the sum of
-
A 125 percent of the greater of the Deferral
-
Percentage, or the Contribution Percentage, of Participants
who are not Highly Compensated Employees for the Plan Year
in question, and
B that percentage which is not more than two
-
percentage points higher than, and not more than twice the
lesser of the Deferral Percentage, or the Contribution
Percentage, of such group of Participants for such Plan
Year, or
2 the sum of
-
A 125 percent of the lesser of the Deferral
-
Percentage, or the Contribution Percentage, of the
Participants who are not Highly Compensated Employees for
the Plan Year in question, and
B that percentage which is not more than two
-
percentage points higher than, and not more than twice the
greater of the Deferral Percentage, or the Contribution
Percentage, of such group of Participants for such Plan
Year.
(d) In order to achieve the result described in subsections (a) and
(b), the following actions shall be taken, as provided under Code Section
401(k), the regulations thereunder and the Rules of the Plan, in the order
selected by the Administrator and to the extent necessary:
28
<PAGE>
(i) The Administrator shall make the election provided in Section
1.19(c).
(ii) To the extent permitted by Code Section 401(a)(4) and Treas.
Reg. (S) 1.401(k)-1(b)(5) (which are incorporated herein by this
reference), the Company may make additional contributions
A to the Qualified Company Non-Matching Accounts, or,
-
B to be applied to payment of Current Obligations
-
with the condition that the contributions under subparagraph A, or the
-
shares of Company Stock released from the Suspense Account pursuant to
Sections 6.8 and 6.9 by reason of the contributions under subparagraph A,
-
or shall be allocated to the Qualified Company Non-Matching Accounts, or
the Qualified ESOP Non-Matching Accounts, as the case may be, of certain
Participants in inverse order of Compensation received in the Plan Year in
question (lowest compensated Participant receiving the first allocation)
with each Participant who receives an allocation receiving the maximum
allocation permitted by Code Section 415 before any Participant with
greater Compensation receives any allocation, until such contribution is
fully allocated.
(iii) Amounts otherwise to be credited under Section 6.3(b) to
Company Contributions Accounts or ESOP Accounts for such Plan Year shall be
credited instead to Qualified Company Matching Accounts or Qualified ESOP
Matching Accounts of the Participants in question.
(iv) Prior to the end of the following Plan Year, certain amounts
described in Section 1.22(a) (and any income thereon earned to the date of
distribution computed in a consistent and reasonable manner in accordance
with Section 8.2 and Code Section 401(a)(4)) for Highly Compensated
Employees shall be reduced according to the Leveling Method and distributed
to the Highly Compensated Employees with respect to whom the reduction is
made.
(v) Within two and one-half months following the end of the Plan
Year, certain amounts described in Section 1.22(a) (and any income thereon
earned to the date of recharacterization computed in a consistent and
reasonable manner in accordance with Section 8.2 and Code Section
401(a)(4)) for Highly Compensated Employees shall be reduced according to
the Leveling Method and recharacterized as personal contributions (and
allocated to their ATS Accounts established for
29
<PAGE>
such purpose which amounts shall continue to be subject to the distribution
limitations of Treas. Reg. (S) 1.401(k)-1(d)) for purposes of Code Sections
72, 401(a)(4), 401(k)(3) and 6047 only and subject to any Plan limitations
on personal contributions made by Highly Compensated Employees (in which
event the treatment of such amounts, including the Account under this Plan
to which allocated, shall be otherwise unaffected) for the Highly
Compensated Employees with respect to whom the reduction is made.
(e) The amount of any distributions under subsection (d) with respect
to a Participant for a Plan Year shall be reduced by any distributions made
pursuant to Section 9.5(a) previously distributed to such Participant for his
taxable year ending with or within such Plan Year. The amount of any
distributions under Section 9.5(a) for any taxable year of a Participant shall
be reduced by amounts distributed to such Participant pursuant to subsection (d)
for the Plan Year beginning with or within such taxable year.
ARTICLE IV
AFTER-TAX SAVINGS CONTRIBUTIONS
-------------------------------
Section 4.1 - ATS Contributions
- ----------- -----------------
(a) Subject to subsections (c), (d) and (e) each Participant may elect
(in accordance with the Rules of the Plan) to contribute any whole number
percentage, which is not less than one nor more than sixteen percent, of his
Compensation for each Payday, to his ATS Account. However, he shall not
knowingly contribute an amount which would make his Annual Addition for the Plan
Year in question exceed the limitations of Section 18.4.
(b) The excess, if any, of the first six percent of Compensation so
elected over the contributions to his Basic PTS Account shall be contributed to
the Participant's Basic ATS Account and the remainder, if any, to his Unmatched
ATS Account.
(c) Any contributions which are invested in the Company Stock Fund
pursuant to Section 7.1(a) with respect to periods on or after the ESOP
Effective Date shall be applied to pay Current Obligations such that pursuant to
Sections 5.1(c)(ii) and 7.1(b) shares of Company Stock equal in value to the
amount of such contribution shall be allocated to his ATS Account.
(d) If any amount is contributed hereunder inadvertently making the
Participant's Annual Addition exceed the maximum permissible amount for the Plan
Year in question, the provisions of Section 18.4 shall apply.
30
<PAGE>
(e) The Administrator may establish rules for making personal
contributions and may permit Active Participants to make direct contributions to
their ATS Accounts.
Section 4.2 - Change, Commencement, Discontinuance
- -----------
or Resumption of ATS Contributions
----------------------------------
A Participant may elect to change his rate of contributions within the
limits of Section 4.1, or commence, discontinue or resume contributions under
Section 4.1. Such elections shall be made in accordance with the Rules of the
Plan.
Section 4.3 - Withholding of ATS Contributions
- ----------- --------------------------------
A Participant's contributions to his ATS Account under Section 4.1(a)
shall be withheld each Payday from his Compensation.
Section 4.4 - ATS Account
- ----------- -----------
The Administrator shall maintain an ATS Account consisting of a Basic
ATS account and an Unmatched ATS Account, for each Participant contributing to
the Plan. To this Account shall be credited his contributions (as described in
Section 4.1(b)), debited his withdrawals under Section 9.2 and debited or
credited investment gains and losses and Annual Addition adjustments.
Section 4.5 - Deposit in Trust
- ----------- ----------------
A Participant's ATS contributions shall be transmitted to the Trustee
as of the earliest date on which such contributions can reasonably be segregated
from the general assets of his employer, but not later than ninety days from the
date in which withheld or received and shall be invested by the Trustee in
accordance with Article VII.
ARTICLE V
CONTRIBUTIONS OF THE COMPANY
----------------------------
Section 5.1 - Determination of Annual Contribution
- ----------- ------------------------------------
(a) (i) Subject to paragraph (ii) and Section 18.4, for each Payday,
the Company shall contribute to the Plan for each Participant an amount for
his PTS Account which is
31
<PAGE>
the amount of Deferred Compensation elected by such Participant under
Section 3.1 or 3.3.
(ii) Any contributions which are invested in the Company Stock
Fund with respect to periods on or after the ESOP Effective Date shall be
applied to pay Current Obligations such that pursuant to Sections
5.1(c)(ii) and 7.1(b) shares of Company Stock equal in value to the amount
of such contributions shall be allocated to the PTS Account of such
Participant.
(b) For each Plan Year the Company shall contribute the amounts
required by Section 6.3(b) as in effect prior to the ESOP Effective Date.
(c) (i) Subject to Section 16.1(b), the Company shall be obligated
to contribute such amounts, and at such times, as shall be necessary to
provide the Trust with funds sufficient to pay any Current Obligations
(including principal, interest and any acquisition charges) incurred for
the purpose of acquiring Company Stock to be held in the Trust Fund.
(ii) For each Plan year the Company shall make contributions in an
amount such that the number of shares of Leveraged Company Stock released
from the Suspense Account pursuant to Sections 6.8 and 6.9 is sufficient to
allow the allocations required by Sections 6.3(b) and 7.1(b).
Section 5.2 - Maximum Annual Contribution
- ----------- ---------------------------
The Company's contribution for any Plan Year shall not exceed the
maximum amount deductible by the Company for such Plan Year under Code Sections
404(a)(3)(A) and 404(a)(9) and, in any event, shall be less than that amount
which would initially result in an Annual Addition of any Participant which
exceeds the maximum permissible amount under Section 18.4(a).
Section 5.3 - Contribution Date
- ----------- -----------------
(a) The Company's contributions
(i) under Section 5.1(a) shall be made as of the earliest date on
which such contributions can reasonably be segregated from the general
assets of the Company but not later than one month after the end of the
month in which falls the Payday of the deferral under Section 3.1 or 3.3,
and
(ii) under Section 5.1(b) shall be made on or before the date
upon which the Company's federal income tax return is due (including
extensions thereof) for its taxable year in question
32
<PAGE>
and shall be transmitted to the Trustee and held in the Trust Fund.
(b) If the Company makes a contribution after the end of the Plan Year
for which the contribution is made
(i) the Company shall notify the Trustee in writing that the
contribution is made for such Plan Year,
(ii) the Company shall claim such payment as a deduction on its
federal income tax return for its taxable year, and
(iii) the Administrator and the Trustee shall treat the payment
as a contribution by the Company to the Trust actually made on the last day
of such taxable year.
Section 5.4 - Form of Contributions
----------- ---------------------
The Company's contributions to the Trust Fund shall be paid in
cash, Company Stock or such other property as the Board may from time to
time determine; provided, however, that Company contributions shall be paid
in cash to the Trust Fund to the extent necessary to discharge the Current
Obligations of the Trust.
ARTICLE VI
PARTICIPATION IN COMPANY CONTRIBUTIONS AND FORFEITURES
------------------------------------------------------
Section 6.1 - PTS Account
----------- -----------
The Administrator shall maintain for each Participant a PTS
Account, consisting of a Basic PTS Account and an Unmatched PTS Account, to
which shall be credited the amounts determined under Section 5.1(a),
debited amounts withdrawn under Section 9.3, 9.5, 9.6 and 10.3 and to which
shall be debited or credited the amounts determined under Section 8.2 and
18.4.
Section 6.2 - Company Contributions Account; ESOP Account;
----------- --------------------------------------------
Qualified Account
-----------------
(a) The Administrator shall maintain a Company Contributions
Account for each Participant, to which shall be credited the amounts
allocated thereto with respect to all periods prior to the ESOP Effective
Date and to which shall be credited or debited amounts determined under
Section 8.2.
(b) The Administrator shall maintain an ESOP Account for each
Participant to which shall be credited the amounts allocated thereto under
Sections 6.3(b) and 18.4 and to which
33
<PAGE>
shall be credited or debited amounts determined under Section 8.2.
(c) The Administrator shall maintain a Qualified Account for each
Participant consisting of a Qualified Company Contributions Account (which
shall itself consist of a Qualified Company Matching Account and a
Qualified Company Non-Matching Account) and a Qualified ESOP Account (which
shall itself consist of a Qualified ESOP Matching Account and a Qualified
ESOP Non-Matching Account) to which shall be credited the amounts allocated
thereto under Sections 6.11(b)(iii) and (iv) and 3.5(d)(ii) and (iii) and
to which shall be credited or debited amounts deferred under Section 8.2.
Section 6.3 - Allocation of Company Contributions and ESOP Stock
----------- --------------------------------------------------
(a) Except as provided in Section 18.4(a), Company contributions
under Section 5.1(a) shall be allocated as provided therein.
(b) Except as provided in Section 18.4(a), for each Plan Year,
there shall be allocated to the ESOP Account of each Participant the number
of shares (including fractional shares) of Company Stock, valued under
Section 8.1(b) as of the last day of the Plan Year, equal to the sum of
(i) fifty percent of the total of his contributions to the
Basic ATS Account and Basic PTS Account except as provided in
subsection (c), and
(ii) if the Participant has elected to have a portion of the
contributions to his Accounts for the year invested in the Company
Stock Fund pursuant to Section 7.1, a uniformly applicable amount to
be determined in the discretion of the Administrator.
(c) Paragraph (b)(i) shall not apply to any Participant who so
elects as a condition for certain participation rights in the Company's
Executive Deferred Retirement Plan.
Section 6.4 - Allocation of Cash Dividends
----------- ----------------------------
Any cash dividends received by the Trustee on Company Stock shall, at
the direction of the Administrator and in its sole discretion,
(a) with respect to cash dividends received on shares of Company
Stock allocated to Stock Accounts,
(i) be used to make payments on any installment contract or
loan used to acquire Leveraged
34
<PAGE>
Company Stock in accordance with Code Section 404(k)(2)(A)(iii); provided,
however, that such dividends shall not be so used unless the requirement of
Section 6.8(c) is satisfied,
(ii) be allocated to Participants' Cash Accounts, or
(iii) be distributed to Participants not later than ninety
days after the last day of the Plan Year in which paid in accordance
with Code Section 404(k)(2)(A)(ii), and
(b) with respect to cash dividends received on shares of Company
Stock allocated to the Suspense Account,
(i) be used to make payments on any installment contract or
loan used to acquire Leveraged Company Stock in accordance with Code
Section 404(k)(2)(A)(iii), or
(ii) be allocated to the Suspense Account.
Section 6.5 - Allocation of Stock Dividends
----------- -----------------------------
Stock dividends received by the Trustee on Company Stock shall be
credited to Stock Accounts and to the Suspense Account in proportion to the
shares of Company Stock therein. Any cash received by the Trustee (in
connection with such a stock dividend) in lieu of fractional shares shall
be allocated under Section 6.4.
Section 6.6 - Allocation of Stock Rights, Warrants and Options
----------- ------------------------------------------------
In the event any rights, warrants or options are issued with
respect to Company Stock, as directed by the Administrator
(a) the Trustee shall exercise any or all of such rights,
warrants or options received on Company Stock in the Suspense Account using
contributions, if any, made for such purpose; Company Stock so acquired
shall be credited to the Suspense Account pending release therefrom under
Section 6.8.
(b) the Trustee shall exercise such rights, warrants or options
received on Company Stock in the Stock Accounts to acquire for such Stock
Accounts whole and fractional shares of Company Stock to the extent of the
amount in the Cash Accounts of the Participants, respectively. When the
balance in a Participant's Cash Account is not sufficient for the full
exercise of such rights, warrants or options, the Administrator shall
notify the Participant, giving him a reasonable time,
35
<PAGE>
not less than five days prior to the expiration date of the rights, to pay,
at his option, to the Trustee the amount necessary to exercise the
remaining rights, warrants or options for whole shares attributable to his
Stock Account.
(c) the Trustee shall exercise in the manner set forth in
subsection (a) any or all of such rights, warrants or options received on
Company Stock in the Trust Fund which remain unexercised after completion
of the procedures required under subsection (b).
(d) any rights, warrants, or options on Company Stock which
cannot be exercised for lack of cash may, as directed by the Administrator,
be sold by the Trustee and the proceeds allocated in accordance with the
source of the Company Stock with respect to which such rights, warrants or
options were issued.
Section 6.7 - Suspense Account
----------- ----------------
At such time as any Leveraged Company Stock is acquired for the
Trust Fund, the Administrator shall open and maintain a Suspense Account
for the purpose of holding unallocated Leveraged Company Stock until such
Company Stock is released and allocated in accordance with the provisions
of Section 6.8.
Section 6.8 - Release and Allocation of Leveraged Company Stock
----------- -------------------------------------------------
(a) All Leveraged Company Stock acquired for the Trust Fund shall
be held in the Suspense Account until released and allocated in accordance
with the provisions of this Section. Leveraged Company Stock acquired in a
particular transaction shall be released from the Suspense Account as
follows:
(i) Subject to the requirements of Treasury Regulation Section
54.4975-7(b)(8)(ii) and subsection (ii) below, for each Plan Year until the
loan or installment obligation is fully repaid, the number of shares of
Leveraged Company Stock released from the Suspense Account shall equal the
number of unreleased shares immediately before such release for the then
current Plan Year multiplied by a fraction, the numerator of which is the
amount of principal paid on such loan during such current Plan Year and the
denominator of which is the sum of said numerator plus the principal to be
paid on such loan in all future years during the duration of the term of
such loan (determined without reference to any possible extensions or
renewals thereof). Notwithstanding the foregoing, in the event such loan
or obligation shall be repaid with the proceeds of a subsequent loan, such
repayment shall not operate to release all such
36
<PAGE>
Leveraged Company Stock but rather such release shall be effected pursuant
to the foregoing provisions of this Section on the basis of payments of
principal on such substitute loan.
(ii) To the extent that paragraph (i) is not applicable by its
terms by reason of Treasury Regulation Section 54.4975-7(b)(8)(ii), or if
the Administrator irrevocably so elects at the time of the first payment on
the loan, then paragraph (i) shall be applied with respect to all payments
on such loan by deeming all references to "principal" therein to be
references to "principal and interest."
(b) The Company shall specify, and advise the Trustee with respect to
(i) the amount (if any) of each Company contribution (together
with the earnings thereon) that is to be applied towards the payment of
Current Obligations,
(ii) the amount (if any) of cash dividends on Company Stock held
in the Stock Accounts that is to be applied towards the payment of Current
Obligations, and
(iii) the amount (if any) of cash dividends on Company Stock held
in the Suspense Account that is to be applied towards the payment of
Current Obligations.
(c) Cash dividends paid on Company Stock held in Stock Accounts may be
applied towards the payment of any installment contract or loan used to acquire
Leveraged Company Stock; provided, however, that such dividends shall be so
applied only if Leveraged Company Stock with an aggregate fair market value
equal to or greater than the amount of such cash dividends is allocated to
Participant's Stock Accounts; provided, further, that such allocation shall be
made with respect to the Plan Year in which such cash dividends would have been
allocated to Participants' Cash Accounts.
Section 6.9 - Application of Forfeitures
- ----------- --------------------------
Amounts forfeited in any Plan Year under Sections 12.2(a)(iii), 13.2
and 15.8 shall be applied under Section 5.1(c) to reduce the Company's
contribution for such Plan Year and shall be allocated under Section 6.3(b) as
if part of such contribution for such Plan Year.
Section 6.10 - Diversification
- ------------ ---------------
(a) During the first ninety days of each Plan Year in the Qualified
Election Period, a Qualified Participant may elect to have the following number
of shares of Diversification Stock
37
<PAGE>
either applied to investment in the Subfunds pursuant to Article VII and the
Rules of the Plan (and notwithstanding any contrary, otherwise applicable, Rules
of the Plan), or distributed to him:
(i) during the first five Plan Years of the Qualified Election
Period, an aggregate number of shares not to exceed twenty-five percent of
the number of shares of Diversification Stock, and
(ii) during the last Plan Year of the Qualified Election Period,
the excess of fifty percent of the number of shares of Diversification
Stock over the aggregate number of shares distributed under paragraph (i).
Such elections shall be made on such forms as are prescribed by the
Administrator. A Qualified Participant may revoke or make a new election at any
time during each such ninety day period.
(b) Distributions or applications pursuant to subsection (a) shall be
made within ninety days following the ninety-day period during which the
Qualified Participant makes the election.
(c) (i) For purposes of this Section, a "Qualified Participant" is a
Participant who has attained age fifty-five and completed ten years of
participation in the Plan. A Participant shall be treated as having
completed ten years of participation in the Plan upon the tenth anniversary
of the later of
A the day such Participant first became a Participant
-
pursuant to Section 2.1; or,
B the ESOP Effective Date.
-
(ii) For purposes of this Section, a Participant's "Qualified
Election Period" begins with the first Plan Year in which the Participant
becomes a Qualified Participant and ends with the sixth Plan Year in which
the Participant becomes a Qualified Participant.
(iii) For purposes of this Section, a Qualified Participant's
"Diversification Stock" shall be that Company Stock credited to his Stock
Account (or an account later merged into his Stock Account) after December
31, 1986.
(d) Notwithstanding the foregoing provisions of this Section, no
Qualified Participant shall make an election pursuant to subsection (a) if the
value of his Accounts is $500 or less.
38
<PAGE>
Section 6.11 - Contribution Percentage Fail-Safe Provisions
- ------------ --------------------------------------------
(a) For each Plan Year, the Contribution Percentage with respect to
Participants who are Highly Compensated Employees, shall be
(i) not more than 125 percent of, or
(ii) (to the extent allowed by regulations under Code Section
401(m)(9)) not more than two percentage points higher than, and not more
than twice,
the Contribution Percentage for such Plan Year with respect to Participants who
are not Highly Compensated Employees, or such other amount as may be required by
Treasury Regulations under Code Section 401(m)(9).
(b) In order to achieve the result described in subsections (a) and
(c) (and notwithstanding Sections 5.1(a) and 6.3(b), as of the end of each Plan
Year, the Administrator shall take or cause to be taken any of the following
actions, in the order selected by the Administrator, (but after application of
Section 3.5) and to the extent necessary:
(i) The Administrator shall make the election provided in Section
1.19(c).
(ii) Allocations to PTS Accounts shall be taken into account for
purposes of calculating the Contribution Percentage.
(iii) To the extent permitted by Code Section 401(a)(4) and
Treas. Reg. (S) 1.401(m)-1(b)(5) (which are incorporated herein by this
reference), the Company may make an additional contribution
A to the Qualified Company Non-Matching Accounts, or
-
B to be applied to payment of Current Obligations
-
with the condition that the contributions under subparagraph A, or the shares of
-
Company Stock released from the Suspense Account pursuant to Sections 6.8 and
6.9 by reason of the contributions under subparagraph A, shall be allocated to
-
the Qualified Company Matching Accounts, or the Qualified ESOP Non-Matching
Accounts, as the case may be, of Participants in inverse order of Compensation
received in the Plan Year in question (lowest compensated Participant receiving
the first allocation) with each Participant who receives an allocation receiving
the maximum allocation permitted by Code Section 415 before any Participant with
greater Compensation receives any allocation, until such contribution is fully
allocated.
39
<PAGE>
(iv) To the extent permitted by Code Section 401(a)(4), amounts
otherwise to be credited under Section 6.3(b) to Company Contributions
Accounts or ESOP Accounts for such Plan Year shall be credited instead to
Qualified Company Matching Accounts or Qualified ESOP Matching Accounts of
the Participants in question.
(v) Prior to the end of the following Plan Year, allocations
described in Section 1.20(b) (and any income thereon earned to the date of
distribution or forfeiture computed in a consistent and reasonable manner
in accordance with Section 8.2 and Code Section 401(a)(4)) for Highly
Compensated Employees shall be reduced according to the Leveling Method
(and, with respect to matching contributions, in conformity with Treas.
Reg. (S) 1.401(m)-1(e)(4)), and, to the extent Vested, shall be distributed
to Participants who are Highly Compensated Employees with respect to whom
the reduction is made, and to the extent not Vested shall be forfeited and
reapplied under Section 6.9 (as described in Treas. Reg. (S) 1.401(m)-1(e))
but not to Highly Compensated Employees whose allocations are reduced or
forfeited under this paragraph.
(vi) Amounts credited in accordance with paragraph (iv) to
Qualified Company Matching Accounts or Qualified ESOP Matching Accounts for
such Plan Year shall instead be allocated in disproportionately higher
amounts to Participants who are not Highly Compensated Employees and in
disproportionately lower amounts to Participants who are Highly Compensated
Employees using the same aggregate dollar amounts that would otherwise have
been allocated pursuant to Section 6.3(b).
(c) If the limitation set forth in Section 3.5(a)(ii) is utilized for
any Plan Year, the limitation of subsection (a)(ii) shall not also be used for
such Plan Year, and vice versa, except as provided in Section 3.5(c).
ARTICLE VII
INVESTMENT OF ACCOUNTS
----------------------
Section 7.1 - Subfunds
- ----------- --------
(a) As permitted under the Rules of the Plan, a Participant's or
Merged Participant's Accounts (other than his Stock Accounts) shall be invested
in any whole number percentage among the Subfunds as the Participant or Merged
Participant shall elect.
40
<PAGE>
(b) Contributions under Sections 4.1(c) and 5.1(a)(ii) invested in the
Company Stock Fund with respect to any period on or after the ESOP Effective
Date shall be invested in that number of shares of Company Stock (valued
pursuant to Section 8.1(b)(i)), released from the Suspense Account or otherwise
held by the Trust which is equal in value to the amount to such contributions.
Section 7.2 - Investment of New Contributions
- ----------- -------------------------------
Subject to Section 7.1 and in accordance with the Rules of the Plan,
each Participant may designate the proportions in which new contributions to his
Accounts (other than Stock Accounts) are to be allocated among the Subfunds.
Section 7.3 - Investment Transfers
- ----------- --------------------
Subject to the Rules of the Plan, each Participant or Merged
Participant may change the investment elections made under Sections 7.1 and 7.2
by electing to have the assets invested in any Subfund (except any investments
in the Company Stock Fund as specified in the Rules of the Plan) transferred to
any other Subfund.
Section 7.4 - Transfer of Assets
- ----------- ------------------
In accordance with the Rules of the Plan, the Administrator shall
direct the Trustee to make such transfers of money or other property among the
Subfunds as may be necessary to effect the aggregate of the transfer
transactions (after the Administrator has caused the necessary entries to be
made in the Participants' or Merged Participants' Accounts in the Subfunds and
has reconciled offsetting transfer elections).
Section 7.5 - Effect of Non-Election
- ----------- ----------------------
If a Participant or Merged Participant fails or declines to make an
election under Section 7.1, the Participant's or Merged Participant's Accounts
shall be held in one or more Investment Funds as directed by the Administrator.
ARTICLE VIII
VALUATION OF THE TRUST FUND AND ACCOUNTS
----------------------------------------
Section 8.1 - Determination of Values
- ----------- -----------------------
(a) As of each Valuation Date, the Administrator shall determine the
fair market value of each asset in each Subfund other than Company Stock in
compliance with the principles of Section 3(26) of ERISA and regulations issued
pursuant thereto, based upon information reasonably available to it including
data from, but not limited to, newspapers and financial publications
41
<PAGE>
of general circulation, statistical and valuation services, records of
securities exchanges, appraisals by qualified persons, transactions and bona
fide offers in assets of the type in question and other information customarily
used in the valuation of property for purposes of the Code. The value of any
real property held in the Trust Fund determined as of the end of any Plan year
shall be considered to remain unchanged until the end of the fourth quarter of
the following Plan Year. With respect to securities for which there is a
generally recognized market, the published selling price on or nearest to such
valuation date shall establish the fair market value of such security. Fair
market value so determined shall be conclusive for all purposes of the Plan and
Trust.
(b)(i) Subject to the special valuation rules set forth in paragraphs
(ii) and (iii), Company Stock contributed by the Company to the Trust Fund shall
be initially valued at its fair market value as of the date of contribution.
Any Company Stock acquired by the Trust Fund with cash shall be initially valued
at the purchase price paid by the Trust. Thereafter, such Company Stock shall
be valued as of each Valuation Date.
(ii) In the case of Leveraged Company Stock, the following
special valuation rules shall apply:
A For purposes of valuing such Leveraged Company Stock in
-
any transaction between the Plan and any "disqualified person" as that
term is defined in Code Section 4975(e)(2), fair market value shall be
determined in good faith by the Administrator in accordance with
Section 3(18) of ERISA.
B For purposes of a Participant's exercise of his put
-
option rights (if applicable) under Article XVII, such Leveraged
Company Stock shall be valued as of the end of the most recent Plan
Year.
(iii) Notwithstanding the foregoing provisions, in all cases the
valuation provisions of this Section, including the selection of a
valuation date for any purpose under this Plan, shall be interpreted and
applied in a manner consistent with the applicable requirements under Code
Sections 409 and 4975(e)(7), the Treasury Regulations issued thereunder,
and any related or successor statutes or regulations, that must be
satisfied in order to qualify for the prohibited transaction exemption
under Code Section 4975(d)(3). In this connection, all valuations of
Company Stock contributed to or acquired by the Plan which at the time of
such valuation is not readily tradable on an established securities market
within the meaning of Code Section 401(a)(28) shall be made by an
independent appraiser
42
<PAGE>
(within the meaning of Code Section 170(a)(1)), whose name shall be
reported to the Internal Revenue Service.
Section 8.2 - Allocation of Values
----------- --------------------
The difference between the total value of the assets of each
Subfund except the Company Stock Fund, as determined under Section 8.1, and
the total of the Accounts therein, shall be allocated by the Administrator
among such Accounts in proportion to their respective stated values as of
such Valuation Date, such values and determinations being made without
taking into account ATS, PTS or Company contributions attributable to the
Valuation Date; provided, however, that gains and losses shall not be
allocated with respect to amounts being held in suspense under Section
18.4(b).
Section 8.3 - Applicability of Account Values
----------- -------------------------------
The value of an Account, as determined as of a given date under
this Article, plus any amounts subsequently credited thereto under Sections
3.5, 4.4, 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.8, 6.11, 8.2, 15.8 and 18.4 (or
applicable Supplements) less any amounts withdrawn under Sections 9.2, 9.3,
9.5, 9.6 and 10.3 (or applicable Supplements) or transferred to suspense
under Section 18.4(b), shall remain the value thereof for all purposes of
the Plan and Trust until revalued hereunder.
ARTICLE IX
VESTING AND WITHDRAWALS
-----------------------
Section 9.1 - Vesting of Accounts
----------- -------------------
(a) Each Participant's or Merged Participant's interest in each
of his Accounts other than his ESOP Account shall be Vested at all times.
(b) Except as provided in Section 14.3(a) and subsection (c), a
Participant's or Merged Participant's ESOP Account shall not be Vested
until he completes three Years of Vesting Service at which time it shall
become fully Vested.
(c) The interest of a Participant in his ESOP Account shall
become fully Vested upon the earliest to occur of
(i) his death,
(ii) his sixty-fifth birthday, or
(iii) the termination or discontinuation of the Plan under Section
16.1,
43
<PAGE>
if he is then an affected Employee or employed by a Company Affiliate.
Section 9.2 - Unrestricted Withdrawals
- ----------- ------------------------
(a) Subject to the Rules of the Plan, once each Plan Year and, if the
Administrator determines that a Hardship (including, for this purpose, an event
described in Section 1.35 (a)(vi)b) has occurred, on one additional occasion in
-
such Plan Year, a Participant may withdraw up to one hundred percent of the
following Accounts in the following order (and subject to the following
conditions) with no amounts withdrawn from a later designated Account until all
earlier designated Accounts are exhausted:
(i) ATS Account. Withdrawals from such Account shall be at least
-----------
one thousand dollars or, if less, the amount of such Account.
(ii) Company Contributions Account.
-----------------------------
(b) A Participant who makes a withdrawal under subsection (a) shall
not be permitted to make any contributions to the Plan and shall not receive a
contribution under subsection 6.3(b) for
(i) three months for a withdrawal under paragraph (a)(i),
(ii) six months for a withdrawal under paragraph (a)(ii),
or such other periods as are specified in the Rules of the Plan.
Section 9.3 - Restricted Withdrawals
- ----------- ----------------------
(a) Any Participant shall be permitted to make a cash withdrawal, in
any whole percentage increment or dollar amount, of up to one hundred percent of
the unwithdrawn principal amount in his PTS Account, on account of Hardship,
subject to the conditions of Section 9.4.
(b) Application for withdrawals shall be made on such forms as the
Administrator prescribes and may be made at any time. A withdrawal shall become
effective in accordance with the Rules of the Plan.
Section 9.4 - Conditions for Hardship Withdrawal
- ----------- ----------------------------------
Hardship withdrawals shall be subject to the following conditions:
(a) A Participant's aggregate Hardship withdrawals shall not
exceed the lesser of
44
<PAGE>
(i) the lesser of
a the amount by which
-
1 the aggregate principal amount of his PTS
-
Account and his Qualified Account together with income
allocable thereto credited as of December 31, 1988 exceeds
2 the unpaid amount due on his outstanding loan
-
or loans, if any under subsection (c)(i), and
b the amount which is necessary to satisfy the
-
Hardship (including any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated
to result from the distribution), or
(ii) the amount which cannot be satisfied from other
resources which are reasonably available to the Participant.
(b) The conditions of subsections (c) and (d) shall be satisfied.
(c) The conditions of this subsection are:
(i) the Participant shall obtain all distributions (other
than Hardship distributions), and all nontaxable loans currently
available under all plans maintained by the Company or any Company
Affiliate;
(ii) the Participant shall not be permitted to make further
deferrals of Compensation or voluntary contributions under the Plan
(or other plan (whether or not qualified) maintained by the Company or
any Company Affiliate) for twelve months thereafter; and
(iii) the sum of the Participant's deferrals of
Compensation under this Article (and other plans maintained by the
Company or any Company Affiliate) in his taxable year in which the
Hardship distribution is received and in his next taxable year shall
not exceed $7,000 (as adjusted for increases in the cost
45
<PAGE>
of living as described in Code Section 402(g)(5)).
(d) The conditions of this subsection, if any, shall be those
prescribed by the Commissioner of Internal Revenue through the publication
of revenue rulings, notices, and/or other documents of general
applicability, as an alternate method under which a Hardship distribution
will be deemed to be necessary to satisfy an immediate and heavy financial
need.
(e) A Participant whose deferrals have been suspended under
subsection (c) nevertheless shall be included in determinations under
Sections 1.20 and 1.22 if he would otherwise be so included.
(f) Hardship withdrawals may not be made more frequently than at
twelve month intervals.
(g) A Participant shall also receive a distribution on account of
Hardship, under the terms of this Section, under the circumstances, and to
the extent, described in Section 15.14(b)(viii).
(h) The Participant's remaining PTS Account balance, or, if
none, the withdrawal itself shall be reduced by the amount of any
administrative expenses charged to the Trust Fund by reason of the
withdrawal.
Section 9.5 - Withdrawal by Reason of Contribution Limitations
----------- ------------------------------------------------
The Administrator may permit a Participant to make a lump sum
withdrawal from his PTS Account in the event of
(a) a deferral in excess of the limitation of Section 3.1(a)(ii),
in the amount of principal and interest (computed in a consistent and
reasonable manner in accordance with Section 8.2 and Code Section
401(a)(4)) allowed by Code Section 402(g)(2)(A)(ii),
(b) a deferral in excess of the limitation of Section 3.5, in the
amount of principal and interest allowed by Code Section 401(k)(8) (in
which case the Participant shall be deemed to notify the Administrator of
such excess amounts made to the Plan and any other plans of the Company or
a Company Affiliate),
(c) the circumstances specified in Code Section 401(k)(10), in
the amount of principal and interest allowed thereunder,
(d) the circumstances specified in Section 18.4(b).
46
<PAGE>
See also Section 10.3.
Section 9.6 - Withdrawals Upon Attainment of Age Fifty Nine and One Half
- ----------- -------------------------------------------------- --------
A Participant or Merged Participant who remains in the employ of the
Company after attaining age fifty nine and one half may elect in writing in
accordance with the Rules of the Plan to receive a distribution of all or any
portion of his Company Contributions Account, Qualified Account or his PTS
Account in one lump sum. Such distributions shall not be made more frequently
than at twelve month intervals.
Section 9.7 - Qualified Account and Stock Accounts
- ----------- ------------------------------------
No withdrawals from Qualified Accounts are permitted, except pursuant
to Sections 6.10 and 9.4.
Section 9.8 - Withdrawals from Subfunds
- ----------- -------------------------
The Rules of the Plan shall designate the order of withdrawal from the
available Subfunds when a Participant makes a withdrawal from his Accounts under
Sections 9.2, 9.3, 9.5 or 9.6.
ARTICLE X
EMPLOYMENT AFTER NORMAL RETIREMENT DATE
---------------------------------------
Section 10.1 - Continuation of Employment
- ------------ --------------------------
(a) A Participant or Merged Participant may, subject to subsection (b)
and Section 18.3, remain in the employ of the Company or a Company Affiliate
after attaining his Normal Retirement Date.
(b) Notwithstanding subsection (a), the Company reserves the right to
require a Participant or Merged Participant to retire in accordance with Section
12(c) of the Age Discrimination in Employment Act of 1967, as amended, Section
12942 of the California Government Code, and other applicable state law.
Section 10.2 - Continuation of Participation
- ------------ -----------------------------
A Participant or Merged Participant retained in the employ of the
Company after his Normal Retirement Date under Section 10.1 shall continue as an
Active Participant herein.
Section 10.3 - Mandatory In-Service Distributions
- ------------ ----------------------------------
A Participant or Merged Participant shall receive or commence the
receipt of the entire amount credited to his Accounts in accordance with Section
11.3(a), (b), (c) and (d)(ii)
47
<PAGE>
on the April 1 following the end of the calendar year in which he attains age
seventy and one half, except as provided in Section 11.3(e).
ARTICLE XI
BENEFITS UPON RETIREMENT
------------------------
Section 11.1 - Normal or Disability Retirement
- ------------ -------------------------------
Subject to the provisions of Section 10.1, a Participant or Merged
Participant shall retire upon his Normal or Disability Retirement Date.
Section 11.2 - Rights Upon Normal or Disability Retirement
- ------------ -------------------------------------------
Upon a Participant's or Merged Participant's Normal or Disability
Retirement, he shall be entitled to receive the entire amount credited to his
Accounts in accordance with Section 11.3.
Section 11.3 - Distribution of Accounts
- ------------ ------------------------
(a) If the entire amount credited to a Participant's or Merged
Participant's Accounts (including the value of any shares credited to his Stock
Accounts if any) does not exceed $3,500 (and did not exceed such amount at the
time of a prior distribution under Sections 9.2, 9.3, 9.5, 9.6 and 10.3 (or
applicable Supplement)), such Participant or Merged Participant shall receive
such amount in one cash lump sum (except that at the option of the Participant
or Merged Participant his Stock Accounts, if any, and the portion of his
Accounts invested in the Company Stock Fund will be paid in the form of Company
Stock).
(b) If the entire amount credited to a Participant's or Merged
Participant's Accounts (including the value of any shares credited to his Stock
Accounts, if any) exceeds $3,500 (or exceeded such amount at the time of a prior
distribution under Sections 9.2, 9.3, 9.5, 9.6 or 10.3 (or applicable
Supplements), such Participant or Merged Participant may elect to receive such
amount under one of the following options:
(i) Payment of such amount in one cash lump sum (except that at
the option of the Participant or Merged Participant his Stock Accounts, if
any, and the portion of his Accounts invested in the Company Stock Fund
will be paid in the form of Company Stock).
(ii) Payment of such amount directly from the Trust Fund (as
adjusted for gains and losses), in uniform annual or more frequent
installments of at least $100 (as to which the Participant or Merged
Participant (or his Spouse, if applicable) may elect whether the
recalculation rule of Code Section
48
<PAGE>
401(a)(9)(D) shall apply and provided, however, that the first installment
may be larger than the remaining installments) to such Participant or
Merged Participant over a period not longer than the lesser of
a the joint and last survivor expectancy of him and his
-
Spouse, if any, reasonably determined from the expected return
multiples prescribed in Treas. Reg. (S) 1.72-9, or
b the period determined under Proposed Treas. Reg.
-
(S)1.401(a)(9)-2A-4 which satisfies the minimum distribution
incidental benefit requirement of Code Section 401(a)(9)(G).
provided, however, if such Participant or Merged Participant fails to make such
an election, his Accounts shall be distributed as provided in paragraph (i).
(c) Distribution under subsection (a) or (b) shall be made or commence
not later than the earliest to occur of
(i) sixty days after the end of the Plan Year in which such
Normal Retirement occurs, or
(ii) the April 1 following the calendar year in which he attains
age seventy and one half,
except as provided in subsection (d).
(d) At any time before distribution under subsection (b) is made or
commences, the Participant or Merged Participant may elect to defer such
distribution until such later date as he shall then or subsequently specify;
provided, however,
(i) such date shall be no later than the date referred to in
subsection (c)(ii), and
(ii) if no such date is specified, such amount shall be
distributed in one lump sum on the date specified in subsection (c)(ii).
(e) Notwithstanding subsection (d)(i) and (ii), for a Participant or
Merged Participant who has made an election permitted under Section 242(b) of
the Tax Equity and Fiscal Responsibility Act of 1982 or who attained age seventy
and one half before January 1, 1988 and is not an owner (within the meaning of
Code Section 318) of five percent of the Company, the date referred to in
subsection (d)(ii) shall be the April 1 following the calendar year in which his
Separation from the Service occurs.
49
<PAGE>
(f) In any election under subsection (d), the entire amount credited
to the Participant's or Merged Participant's Accounts will be distributed in a
manner which satisfies the minimum distribution incidental death benefit
requirements of Proposed Treas. Reg. (S) 1.401(a)(9)-2 (or any successor
thereto).
ARTICLE XII
BENEFITS UPON DEATH
-------------------
Section 12.1 - Designation of Beneficiary
- ------------ --------------------------
(a) Each Participant, former Participant and Merged Participant shall
have the right to designate, revoke and redesignate Beneficiaries hereunder and
to direct payment of the Vested amount credited to his Accounts to such
Beneficiaries.
(b) Designation, revocation and redesignation of Beneficiaries must be
made in writing in accordance with the Rules of the Plan on a form provided by
the Administrator and shall be effective upon delivery to the Administrator.
(c) A married Participant or Merged Participant may not designate any
Beneficiary other than his Spouse without obtaining Spousal Consent thereto.
Section 12.2 - Distribution on Death
- ------------ ---------------------
(a) Upon the death of a Participant, former Participant or Merged
Participant, the Vested amount credited to his Accounts (including the Vested
value of shares credited to his Stock Accounts, if any) (as determined under
Section 9.1), shall be paid in one lump sum (in the form of cash or stock to the
extent permitted by Section 11.3(b)(i)) not later than ninety days following the
Participant's or Merged Participant's death (or such longer reasonable period as
is permitted under Treas. Reg. (S)1.401(a)-20 A-3(b)(1)) to his then Surviving
Spouse, if any, except to the extent to which such Surviving Spouse has
consented under Section 12.1(c) to the designation of other Beneficiaries, and
otherwise to the person or persons of highest priority who survives the
Participant or Merged Participant by at least thirty days determined as follows:
(i) First, to his then surviving highest priority Beneficiary or
Beneficiaries, if any.
(ii) Second, to his then surviving heirs at law, if any, as
determined in the reasonable judgment of the Administrator under the laws
governing succession to personal property of the last jurisdiction in which
the Participant or Merged Participant was a resident.
50
<PAGE>
(iii) Third, the Plan to be applied to reduce the Company's
contribution under Section 6.9.
(b) Members of a class shall cease to be entitled to benefits upon the
earlier of the Administrator's determination that no members of such class exist
or the Administrator's failure to locate any members of such class, after making
reasonable efforts to do so, within one year after the members of that class
became entitled to benefits hereunder had members existed.
(c) If payment has commenced prior to the Participant's or Merged
Participant's death, payment of the Participant's or Merged Participant's
Accounts shall be made in such manner that the remaining interest is distributed
at least as rapidly as under the method being used as of the date of the
Participant's or Merged Participant's death.
Section 12.3 - Election of Other Payment Methods
- ------------ ---------------------------------
(a) Subject to subsection (c), but notwithstanding any other provision
of this Article and in lieu of the lump sum payment otherwise provided for in
this Article, payments under this Article to the Spouse of a Participant, former
Participant or Merged Participant shall be made under such option available
under Section 11.3 as such Spouse shall designate.
(b) Subject to subsection (c), but notwithstanding any other provision
of this Article, a Participant, former Participant or Merged Participant may
elect on the form provided by the Administrator for Beneficiary designations
that, in lieu of the lump sum payment otherwise provided for in this Article
payments under this Article to his Beneficiary shall be made under such option
available under Section 11.3 as the Participant or Merged Participant shall
designate in such form. If a Beneficiary receiving installment payments under
this Section dies, the balance then due shall be paid in cash in one lump sum to
the then surviving person with highest priority under Section 12.2(a).
(c) If a Participant or Merged Participant dies before distribution of
his Accounts commences, then
(i) such Accounts must be distributed within five years of the
Participant's or Merged Participant's death, or
(ii) if any portion of such Accounts is payable to or for the
benefit of a Beneficiary, such portion shall be distributed over the life
or the life expectancy of such Beneficiary with distributions commencing
51
<PAGE>
a within one year of the Participant's or Merged
-
Participant's death, or,
b if the Beneficiary is the Participant's or Merged
-
Participant's Spouse, no later than the date on which the Participant
or Merged Participant would have attained age seventy and one half
(but if such Spouse dies before distributions to such Spouse commence,
then such Spouse shall be treated as the Participant or Merged
Participant for purposes of this Section 12.3(c)), or
c on such other date as is allowed by law.
-
ARTICLE XIII
BENEFITS UPON RESIGNATION OR DISCHARGE
--------------------------------------
Section 13.1 - Distributions on Resignation or Discharge
- ------------ -----------------------------------------
A Participant or Merged Participant who has a Separation from the
Service due to resignation or discharge shall receive,
(a) if the Vested amount credited to his Accounts (including the
Vested value of shares credited to his Stock Accounts, if any) does not
exceed $3,500 (and did not exceed such amount at the time of a prior
distribution under Sections 9.2, 9.3, 9.5 or 9.6 (or applicable
Supplement)), such amount in one lump sum (in the form of cash or stock to
the extent permitted by Section 11.3(b)(i)) not later than six months after
the end of the Plan Year in which such Separation from the Service occurs,
or, if earlier, within sixty days after the end of the Plan Year in which
his fifty-fifth birthday occurs, or
(b) if the Vested amount credited to his Accounts (including the
Vested value of shares credited to his Stock Accounts, if any) exceeds
$3,500 (or exceeded such amount at the time of a prior distribution under
Sections 9.2, 9.3, 9.5 or 9.6 (or applicable Supplement)), he shall receive
such amount as described in paragraph (i) or, if he has attained age 55 of
the time of his Separation from the Service and so elects, he shall receive
such amount as described in paragraph (ii):
(i) Payment of such amount in one cash lump sum (except that
at the option of the Participant or Merged Participant his Stock
Accounts, if any, and the
52
<PAGE>
portion of his Accounts invested in the Company Stock Fund will be
paid in the form of Company Stock).
(ii) Payment of such amount directly from the Trust Fund (as
adjusted for gains and losses), in uniform annual or more frequent
installments of at least $100 (as to which the Participant or Merged
Participant (or his Spouse, if applicable) may elect whether the
recalculation rule of Code Section 401(a)(9)(D) shall apply and
provided, however, that the first installment may be larger than the
remaining installments) to such Participant or Merged Participant over
a period not longer than the lesser of
a the joint and last survivor expectancy of him and
-
his Spouse, if any, reasonably determined from the expected
return multiples prescribed in Treas. Reg. (S) 1.72-9, or
b the period determined under Proposed Treas. Reg.
-
(S)1.401(a)(9)-2A-4 which satisfies the minimum distribution
incidental benefit requirement of Code Section 401(a)(9)(G).
with such distribution being made or commencing no later than April 1 following
the calendar year in which he attains age 70 1/2.
Section 13.2 - Forfeitures
- ------------ -----------
(a) If a Participant has a Separation from the Service due to
resignation or discharge, the portions of his ESOP Account which are not Vested
shall be forfeited upon his completion of five consecutive Break in Service
Years. Pending application under Section 6.9, forfeitures shall be held in
suspense and shall not be commingled with amounts held in suspense under Section
18.4.
(b) If a Participant has a Separation from the Service prior to
becoming vested in any portion of his ESOP Account under Section 9.1, a
distribution shall be deemed to have occurred upon such Separation from the
Service for purposes of subsection (a).
Section 13.3 - Restoration of Forfeitures
- ------------ --------------------------
If a Participant whose ESOP Account is not then fully Vested
(a) has a Separation from the Service,
(b) suffers a forfeiture under Section 13.2 of the portion of
such Account which is not Vested,
53
<PAGE>
(c) again becomes an Employee or employed by a Company Affiliate
before he has five consecutive Break in Service Years, and
(d) repays to the Plan the full amount, if any, distributed to
him from such Accounts before the end of his fifth consecutive Break in
Service Year or, if earlier, the fifth anniversary of his reemployment,
then the amount forfeited under Section 13.2 by such Participant and any
interest thereon shall be restored to his ESOP Account, applying forfeitures
pending reallocation and Company contributions, in that order, as necessary.
ARTICLE XIV
TOP HEAVY PROVISIONS
--------------------
Section 14.1 - Top Heavy Determination
- ------------ -----------------------
(a) Solely in the event that this Plan ever becomes Top Heavy, as
defined herein, the provisions of this Article shall apply.
(b) Solely for the purposes of this Article, the following definitions
shall be used:
(i) "Aggregation Group" shall mean
a each plan of the Company or a Company Affiliate in which
-
a Key Employee is a Participant or Merged Participant (including any
such plan which has been terminated if such plan was maintained by the
Company or Company Affiliate within the last five years ending on the
Determination Date for the Plan Year in question), and
b each other plan of the Company or a Company Affiliate
-
which enables any plan described in paragraph a to meet the
-
requirements of Code Section 401(a)(4) or 410.
(ii) "Determination Date" shall mean, with respect to any Plan
Year, the last day of the preceding Plan Year, or in the case of the first
Plan Year, the last day of such Plan Year.
(iii) "Controlled Group Employee" shall mean any person who
renders services to the Company or a Company Affiliate in the status of an
employee as the term is defined in Code Section 3121(d).
54
<PAGE>
(iv) "Key Employee" shall mean a Controlled Group Employee, a
former Controlled Group Employee or the Beneficiary of a former Controlled
Group Employee, if, in the Plan Year containing the Determination Date or
in any of the four preceding Plan Years, such Controlled Group Employee or
former Controlled Group Employee is or was
a an officer of the Company or a Company Affiliate
-
whose Statutory Compensation for the Plan Year in question exceeds
fifty percent of the amount in effect under Code Section 415(b)(1)(A)
(not more than fifty Controlled Group Employees or, if less, the
greater of three Controlled Group Employees or ten percent of the
Controlled Group Employees shall be treated as officers),
b one of the ten Controlled Group Employees owning (or
-
considered as owning within the meaning of Code Section 318) both the
largest interest in the Company or a Company Affiliate and more than
one-half of one percent interest therein and whose Statutory
Compensation for the Plan Year in question equals or exceeds the
amount in effect under Code Section 415(c)(1)(A); provided, however,
if two Controlled Group Employees have the same interest in the
Company or a Company Affiliate, the Controlled Group Employee with the
greater Statutory Compensation for such Plan Year shall be treated as
having the larger interest,
c a five percent owner (within the meaning of Code Section
-
416(i)(1)(B) and (C)) of the Company or a Company Affiliate or a one
percent owner (within the meaning of Code Section 416(i)(1)(B) and
(C)) of the Company or a Company Affiliate whose Statutory
Compensation for the Plan Year in question exceeds $150,000.
(v) "Non-Key Employee" shall mean any Controlled Group Employee
who is not a Key Employee.
(vi) The Plan shall be Top Heavy if, as of any Determination
Date, the aggregate of the Accounts of Key Employees under all plans in the
Aggregation Group (or under this Plan and such other plans as the Company
elects to take into account under Code Section 416(g)(2)(A)(ii)) exceeds
sixty percent of the
55
<PAGE>
aggregate of the Accounts for all Key Employees and Non-Key Employees. In
making this calculation as of a Determination Date,
a each Account balance as of the most recent valuation date
-
occurring within the Plan Year which includes the Determination Date
shall be determined,
b an adjustment for contributions due as of the
-
Determination Date shall be determined,
c the Account balance of any Controlled Group Employee or
-
former Controlled Group Employee shall be increased by the aggregate
distributions made during the five-year period ending on the
Determination Date with respect to such Controlled Group Employee or
former Controlled Group Employee,
d the Account balance of
-
1 any Non-Key Employee who was a Key Employee for any
-
prior Plan Year, and
2 any former Controlled Group Employee who performed
-
no services for the Company or a Company Affiliate during the
five-year period ending on the Determination Date shall be
ignored, and
e if there have been any rollovers to or from any Account,
-
the balance of such Account shall be adjusted, as required by Code
Section 416(g)(4)(A).
Notwithstanding the foregoing, this Plan shall be Top Heavy if, as of any
Determination Date, it is required by Code Section 416(g) to be included in an
Aggregation Group which is determined to be a Top Heavy Group.
(vii) "Top Heavy Group" shall mean any Aggregation Group if, as
of the Determination Date, the sum of
a the present value of the cumulative accrued benefits for
-
all Key
56
<PAGE>
Employees under all defined benefit plans in such Aggregation Group,
and
b the aggregate of the accounts of all Key Employees under
-
all defined contribution plans in such Aggregation Group
exceeds sixty percent of a similar sum determined for all Key Employees and
Non-Key Employees.
(viii) "Statutory Compensation" shall have the meaning set forth
in Section 1.36(d).
Section 14.2 - Minimum Benefits
------------ ----------------
(a) For any Plan Year in which the Plan is Top Heavy, the sum of
the allocations to the ESOP Account and the PTS Account of any Employee who
is a Non-Key Employee at the end of such Plan Year and is entitled to an
allocation to such Accounts under Section 6.3 shall not be less than that
determined under subsection (b).
(b) The allocation determined under this subsection shall be a
percentage of the Statutory Compensation of such Non-Key Employee which is
not less than the lesser of
(i) three percent, or
(ii) that percentage reflecting the ratio of
A the allocations under Section 6.3 to
-
B Statutory Compensation (not in excess of $200,000)
-
for the Key Employee with respect to whom such ratio is highest for such
Plan Year.
Section 14.3 - Vesting
------------ -------
(a) For any Plan Year in which the Plan is Top Heavy, the Vested
percentage of the ESOP Account of each Participant who completes an Hour of
Service in such Plan Year shall be the percentage of such Account shown on
the following table:
Years of Vesting Service Vested Percentage
------------------------ -----------------
1 (or less) 0%
2 20%
3 100%
(b) The Vested percentage of a Participant's ESOP Account shall be not
less than the Vested percentage determined
57
<PAGE>
as of the last day of the last Plan Year in which the Plan was Top Heavy.
(c) For any Plan Year in which the Plan is not Top Heavy which follows
one or more Plan Years for which the Plan has been Top Heavy, Section 9.1 shall
again become applicable as an amendment to the Plan; thus, each Participant or
Merged Participant who has had his Vested percentage computed under subsection
(a) and who has completed at least one Year of Vesting Service shall be
permitted to elect to have his Vested percentage computed in accordance with
subsection (a) for such Plan Year and any subsequent Plan Year in which the Plan
is no longer Top Heavy. Such Participant or Merged Participant may make such
election within an election period beginning no later than the first day of the
first Plan Year in which the Plan is no longer Top Heavy and ending no later
than the later of
(i) the sixtieth day of such Plan Year, or
(ii) a date which is sixty days after the day the Participant is
issued written notice of his right to make such election by the
Administrator.
Section 14.4 - Limitation on Benefits
- ------------ ----------------------
For any Plan Year in which the Plan is Top-Heavy,
(a) the denominator of both the defined benefit plan fraction and
the defined contribution plan fraction set forth in Code Sections
415(e)(2)(B) and 415(e)(3)(B), respectively, shall be adjusted by
substituting 1.0 for 1.25, and
(b) the numerator of the "transition fraction" described in Code
Section 415(e)(6)(B)(i) shall be calculated by substituting $41,500 for
$51,875,
but only to the extent required by Code Section 416(h).
ARTICLE XV
ADMINISTRATIVE PROVISIONS
-------------------------
Section 15.1 - Duties and Powers of the Administrator
- ------------ --------------------------------------
(a) The Administrator shall administer the Plan in accordance with the
Plan and ERISA and shall have full discretionary power and authority:
(i) To engage actuaries, attorneys, accountants, appraisers,
brokers, consultants, administrators, physicians or other firms or persons
58
<PAGE>
and (with its officers, directors and Employees) to rely upon the reports,
advice, opinions or valuations of any such persons except as required by
law;
(ii) To adopt Rules of the Plan that are not inconsistent with
the Plan or applicable law and to amend or revoke any such rules;
(iii) To construe the Plan and the Rules of the Plan;
(iv) To determine questions of eligibility of Participants and
the entitlement to distributions of Participants, former Participants,
Merged Participants, Beneficiaries and all other persons;
(v) To determine entitlement to allocations of contributions and
forfeitures of Participants, Merged Participants, former Participants,
Beneficiaries, and all other persons;
(vi) To make findings of fact as necessary to make any
determinations and decisions in the exercise of such discretionary power
and authority;
(vii) To appoint claims and review officials to conduct claims
procedures as provided in Section 15.6; and
(viii) To delegate any power or duty to any firm or person
engaged under paragraph (i) or to any other person or persons.
(b) Every finding, decision, and determination made by the
Administrator shall, to the full extent permitted by law, be final and binding
upon all parties, except to the extent found by a court of competent
jurisdiction to constitute an abuse of discretion.
Section 15.2 - Expenses of Administration
- ------------ --------------------------
(a) The Company shall pay or reimburse each Employee functioning under
Section 15.1(a) or person serving on an investment committee established in
accordance with the Trust Agreement for all expenses (including reasonable
attorneys' fees) properly incurred by him in the administration of the Plan.
(b) The Company shall indemnify and hold each such Employee and
investment committee member harmless from all claims, liabilities and costs
(including reasonable attorneys' fees) arising out of the good faith performance
of his functions hereunder.
59
<PAGE>
(c) The Company may obtain and provide for any such Employee and
investment committee member, at the Company's expense, liability insurance
against liabilities imposed on him by law.
(d) Legal fees incurred in the preparation and amendment of documents
shall be paid by the Company.
(e) Expenses referred to in subsections (a), (b) and (d) not paid by
the Company shall be paid from the Trust Fund to the extent permitted by law.
(f) Except as provided in subsection (a), fees and expenses of persons
rendering services to the Plan shall not be paid or reimbursed by the Company
except as agreed upon by the Company.
Section 15.3 - Payments
- ------------ --------
In the event any amount becomes payable under the Plan to a minor or a
person who, in the sole judgment of the Administrator, is considered by reason
of physical or mental condition to be unable to give a valid receipt therefor,
the Administrator may direct that such payment be made to any person found by
the Administrator, in its sole judgment, to have assumed the care of such minor
or other person. Any payment made pursuant to such determination shall
constitute a full release and discharge of the Trustee, the Administrator and
the Company and their officers, directors, employees, owners, agents and
representatives.
Section 15.4 - Statement to Participants
- ------------ -------------------------
Within one hundred eighty days after the end of each Plan Year, the
Administrator shall furnish to each Participant and Merged Participant a
statement setting forth the value of his Accounts and the Vested percentage
thereof and such other information as the Administrator shall deem advisable to
furnish.
Section 15.5 - Inspection of Records
- ------------ ---------------------
Copies of the Plan and any other documents and records which a
Participant or Merged Participant is entitled by law to inspect shall be open to
inspection by such Participant or Merged Participant or such Participant's or
Merged Participant's duly authorized representatives at any reasonable business
hour at the principal office of the Company, any Company work site at which at
least fifty Employees regularly perform services and such other locations as the
Secretary of Labor may require.
Section 15.6 - Claims Procedure
- ------------ ----------------
(a) A claim by a Participant, former Participant, Merged Participant,
Beneficiary or any other person shall be
60
<PAGE>
presented to the claims official appointed by the Administrator in writing
within the maximum time permitted by law or under the regulations promulgated by
the Secretary of Labor or his delegate pertaining to claims procedures.
(b) The claims official shall, within a reasonable time, consider the
claim and shall issue his determination thereon in writing.
(c) If the claim is granted, the appropriate distribution or payment
shall be made from the Trust Fund or by the Company.
(d) If the claim is wholly or partially denied, the claims official
shall, within ninety days (or such longer period as may be reasonably
necessary), provide the claimant with written notice of such denial, setting
forth, in a manner calculated to be understood by the claimant
(i) the specific reason or reasons for such denial,
(ii) specific references to pertinent Plan provisions on which
the denial is based,
(iii) 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
(iv) an explanation of the Plan's claim review procedure.
(e) The Administrator shall provide each claimant with a reasonable
opportunity to appeal the claims official's denial of a claim to a review
official (appointed by the Administrator in writing) for a full and fair review.
The claimant or his duly authorized representative
(i) may request a review upon written application to the review
official (which shall be filed with it),
(ii) may review pertinent documents, and
(iii) may submit issues and comments in writing.
(f) The review official may establish such time limits within which a
claimant may request review of a denied claim as are reasonable in relation to
the nature of the benefit which is the subject of the claim and to other
attendant circumstances but which, in no event, shall be less than sixty days
after receipt by the claimant of written notice of denial of his claim.
61
<PAGE>
(g) The decision by the review official upon review of a claim shall
be made not later than sixty days after his receipt of the request for review,
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but not later than
one hundred twenty days after receipt of such request for review.
(h) The decision on review shall be in writing and shall include
specific reasons for the decision written in a manner calculated to be
understood by the claimant with specific references to the pertinent Plan
provisions on which the decision is based.
(i) The claims official and the review official shall have full
discretionary power and authority to construe the Plan and the Rules of the
Plan, to determine questions of eligibility, vesting and entitlements and to
make findings of fact as under Section 15.1 and, to the extent permitted by law,
the decision of the claims official (if no review is properly requested) or the
decision of the review official on review, as the case may be, shall be final
and binding on all parties except to the extent found by a court of competent
jurisdiction to constitute an abuse of discretion.
Section 15.7 - Conflicting Claims
- ------------ ------------------
If the Administrator is confronted with conflicting claims concerning
a Participant's or Merged Participant's Accounts, the Administrator may
interplead the claimants in an action at law, or in an arbitration conducted in
accordance with the rules of the American Arbitration Association, as the
Administrator shall elect in its sole discretion, and in either case, the
attorneys' fees, expenses and costs reasonably incurred by the Administrator in
such proceeding shall be paid from the Participant's or Merged Participant's
Accounts.
Section 15.8 - Effect of Delay or Failure to Ascertain
- ------------
Amount Distributable or to Locate Distributee
---------------------------------------------
(a) If an amount payable under Article XI, XII or XIII cannot be
ascertained or the person to whom it is payable has not been ascertained or
located within the stated time limits and reasonable efforts to do so have been
made, then distribution shall be made not later than sixty days after such
amount is determined or such person is ascertained or located, or as prescribed
in subsection (b).
(b) If, within one year after a Participant or Merged Participant has
a Separation from the Service, the Administrator, in the exercise of due
diligence, has failed to locate him (or if such Separation from the Service is
by reason of his death, has failed to locate the person entitled to his Vested
Accounts under Section 12.2), his entire distributable interest in the Plan
shall be applied to reduce the Company's contribution under
62
<PAGE>
Section 5.1; provided, however, that if the Participant or Merged Participant
(or in the case of his death, the person entitled thereto under Section 12.2)
makes proper claim therefor under Section 15.6, the amount so forfeited shall be
restored to the Participant's or Merged Participant's Account or Accounts, as
the case may be, applying forfeitures pending application, Company contributions
and unallocated earnings and gains of the Trust Fund, in that order, as
necessary.
Section 15.9 - Service of Process
- ------------ ------------------
The Secretary of Avery Dennison Corporation is hereby designated as
agent of the Plan for the service of legal process.
Section 15.10 - Limitations Upon Powers of the Administrator
- ------------- --------------------------------------------
The Plan shall not be operated so as to discriminate in favor of
Highly Compensated Employees. The Plan shall be uniformly and consistently
interpreted and applied with regard to all Participants and Merged Participants
in similar circumstances. The Plan shall be administered, interpreted and
applied fairly and equitably and in accordance with the specified purposes of
the Plan.
Section 15.11 - Effect of Administrator Action
- ------------- ------------------------------
Except as provided in Section 15.6, all actions taken and all
determinations made by the Administrator in good faith shall be final and
binding upon all Participants, Merged Participants, the Trustee and any person
interested in the Plan or Trust Fund.
Section 15.12 - Contributions to Rollover Accounts
- ------------- ----------------------------------
(a) A Participant may make a contribution to his Rollover Account if
such contribution meets the requirements of this Section and is in accordance
with the Rules of the Plan.
(b) Such contribution will meet the requirements of this Section if
(i) it is made by the Participant to the Trust in cash in a lump
sum, and
(ii) the amount contributed by the Participant consists of
a an eligible rollover distribution, as defined in Code
-
Section 402(c)(4) and Treas. Reg. Section 1.402(c)-2T from
63
<PAGE>
1 a qualified trust (described in Code Section
-
401(a)), or
2 an annuity plan (described in Code Section 403(a)),
-
or
b a distribution from an individual retirement account
-
(described in Code Section 408(a)) or an individual retirement annuity
(described in Code Section 408(b)); provided that no amount in the
account or no part of the value of the annuity, as the case may be, is
attributable to any source other than a rollover contribution, as
defined in Code Section 402, from a qualified trust (described in Code
Section 401(a)) or an annuity plan (described in Code Section 403(a))
(and any earnings on such contribution).
(c) In addition, such contribution will meet the requirements of this
Section if
(i) the contribution is made within sixty days following the day
on which the Participant received the distribution from a qualified trust,
annuity plan or individual retirement account or annuity, and
(ii) such distribution was in the form of money.
(d) The Administrator may require the Participant to supply
information sufficient to determine if his contribution meets the requirements
of this Section. If the Administrator determines that such contribution does
not meet the requirements of this Section, the contribution shall not be
permitted.
(e) The Plan will also accept the direct transfer from a plan
qualified under Code Section 401(a) of an amount which if paid to the
Participant instead of the Plan would have constituted a lump sum distribution
within the meaning of Code Section 402(e). The transferred amount shall be
credited to the Participant's Rollover Account.
(f) If the Administrator accepts a contribution or transfer pursuant
to this Section and later determines that it was improper to do so, in whole or
in part, the Plan shall refund the necessary amount to the Participant.
Section 15.13 - Transfers to Rollover Accounts
- ------------- ------------------------------
64
<PAGE>
(a) The Administrator may, in its discretion, permit the Plan to
accept a direct transfer from a qualified trust (described in Code Section
401(a)) of a Participant's benefits under such trust. Benefits transferred on
behalf of a Participant to the Plan under this Section shall be credited to such
Participant's Rollover Account or such other Accounts of the Participant as are
designated by the Administrator.
(b) A plan-to-plan transfer under this Section shall satisfy the
requirements of Code Sections 411(d)(6) and 414(l) and the Treasury Regulations
thereunder.
(c) If the Administrator causes the Plan to accept a plan-to-plan
transfer pursuant to this Section and the Administrator later determines that
such transfer was improper, in whole or in part, the Plan shall return to the
transferor, or plan the necessary amounts.
Section 15.14 - Loans to Participants or Former Participants
- ------------- --------------------------------------------
(a) A Participant, Merged Participant, former Participant, Spouse or
Beneficiary ("Borrower") may borrow against his PTS Account, Company
Contributions Account, Qualified Account, ATS Account or Prior Account and/or
other Accounts with the approval of the Administrator in accordance with the
provisions of subsection (b).
(b) The Administrator shall establish by Rules of the Plan the
requirements for loans from the Trust Fund and conditions therefor. Such Rules
of the Plan shall be consistent with the following requirements:
(i) The Borrower must be a "party in interest" within the meaning
of ERISA Section 3(14) on the date the loan is made.
(ii) Loans shall not be made available to an individual who is an
owner-employee (as defined in Code Section 401(c)(3)) of the Company or a
Company Affiliate or a shareholder-employee (as defined in Code Section
1379(d)) of the Company or a Company Affiliate or a member of the family
(as defined in Code Section 267(c)(4)) of an owner-employee or shareholder-
employee.
(iii) The minimum amount which a Borrower may borrow at any one
time under this Section is $1,000.00.
(iv) The maximum amount which a Borrower may borrow from the
Trust Fund shall be an amount which when added to the outstanding balance
of all other loans from the Plan and from other qualified plans of the
Company or a Company Affiliate does not exceed the lesser of
65
<PAGE>
a $50,000 reduced by the excess (if any) of
-
1 the highest outstanding balance of loans from the
-
Plan during the one year period ending on the day before the date
on which the loan is made, over
2 the outstanding balance of loans from the Plan on
-
the date on which such loan was made; or
b half of his Vested interest in all of his Accounts.
-
(v) Loans shall not be made to a Borrower under this Section more
frequently than at six-month intervals. A Borrower may not have more than
two loans outstanding at any time.
(vi) Such loans must be available to all Borrowers on a
reasonably equivalent basis.
(vii) The Vested percentage of a Borrower's PTS Account, Company
Contributions Account, Qualified Account, ATS Account or Prior Account
which is made available for borrowing shall not be higher for Participants,
Merged Participants or former Participants who are Highly Compensated
Employees, officers or shareholders than for other Borrowers.
(viii) Such loans shall be made upon promissory notes providing
for substantially level amortization (with regular payments by payroll
deduction each Payday for a Participant or by direct payments if the
Participant does not have a sufficient paycheck on any Payday). A Merged
Participant, former Participant, Spouse or Beneficiary shall make
arrangements for regular direct payments on such loans with the
Administrator as provided in the Rules of the Plan. Should the
Administrator determine that any such payroll deduction or other payments
are prevented by reason of the application of any law (including bankruptcy
law) or if such other payments are not made, then, to the maximum extent
permitted by law, the promissory note (or portion thereof) shall be
distributed to the Participant on account of Hardship pursuant to Section
9.4(g).
(ix) Each such loan shall be secured by half of the Vested
interest in the Borrower's Accounts, including any such portion of a
Borrower's Accounts
66
<PAGE>
which is credited after the date of the loan. For purposes of Articles XI,
XII and XIII, the distributable balance of such Accounts shall be reduced
by the unpaid balance of the loan secured by such Accounts.
(x) Each such loan shall bear a reasonable interest rate, which
shall be commensurate with the interest rates charged by persons in the
business of lending money for loans which would be made under similar
circumstances. The Administrator may adopt a national or regional rate of
interest for this purpose.
(xi) Each such loan shall be repaid within five years unless the
loan is used to acquire any dwelling unit which within a reasonable time is
to be used as a principal residence of the Borrower.
(xii) The promissory note on any such loan shall be an
investment of the affected Accounts of the Borrower receiving such loan and
not an investment of the Trust Fund generally.
Section 15.15 - Distributions Pursuant to Qualified
------------- -----------------------------------
Domestic Relations Orders
-------------------------
Notwithstanding any other provision of the Plan to the contrary, upon
receipt by the Administrator of a domestic relations order, as defined in Code
Section 414(p), which, but for the time of required payment to the alternative
payee, would be a qualified domestic relations order as defined in Code Section
414(p), the amount awarded to the alternate payee shall promptly be paid in the
manner specified in such order; provided, however, that no such distribution
shall be made prior to the Participant's Separation from the Service if such
distribution could adversely affect the qualified status of the Plan.
Section 15.16 - Correction of Administrative Error; Special Contribution
- ------------- --------------------------------------------------------
Notwithstanding anything to the contrary herein contained, if the
Administrator determines that an error has been made in crediting contributions
or earnings to the Accounts of any Participant, Merged Participant or former
Participant, the Company may make a special contribution to the Accounts of said
Participant or Merged Participant and the Administrator may take any other
administrative action which it deems necessary or appropriate to correct such
error.
Section 15.17 - Direct Rollovers
- ------------- ----------------
Notwithstanding any provision of the Plan to the contrary, a
Distributee may elect, at the time and in the manner prescribed by the
Administrator under the Rules of the Plan, to
67
<PAGE>
have all or any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan designated by the Distributee in a Direct Rollover.
ARTICLE XVI
TERMINATION, DISCONTINUANCE,
AMENDMENT, MERGER, ADOPTION OF PLAN
-----------------------------------
Section 16.1 - Termination of Plan; Discontinuance of Contributions
- ------------ ----------------------------------------------------
(a) The Plan is intended as a permanent program but the Board shall
have the right at any time to declare the Plan terminated completely as to the
Company or as to any division, facility or other operational unit thereof.
Discharge or layoff of Employees of the Company or any unit thereof without such
a declaration shall not result in a termination or partial termination of the
Plan except to the extent required by law. In the event of any termination or
partial termination:
(i) An allocation of amounts being held under Section 18.4(b)
shall be made in accordance with Section 18.4(c).
(ii) For each Participant or Merged Participant who is then an
Employee or employed by a Company Affiliate with respect to whom the Plan
is terminated, the interest in his ESOP Account, if any, including his
interest in the forfeitures (which shall be applied under Section 6.9),
shall become fully Vested.
(iii) The Administrator shall direct the Trustee to liquidate
the necessary portion of the Trust Fund and distribute it, less a
proportionate share of the expenses of termination, to the persons entitled
thereto in proportion to their Accounts.
(iv) Provided that the Company or a Company Affiliate does not
maintain another defined contribution plan other than an employee stock
ownership plan (as defined in Code Section 4975(e)(7)), such distributions
shall be made in the manner prescribed by Section 13.1(a), assuming for
such purpose that each person entitled to a distribution under the Plan is
a Participant or Merged Participant who has had a Separation from the
Service due to resignation or discharge on the date of termination.
(b) The Board shall have the right to direct any Company:
68
<PAGE>
(i) not to make the contribution necessary to provide the Trust
with funds sufficient to pay its Current Obligations (including principal,
interest and any acquisition charges) and/or
(ii) to inform the Trustee that the Company does not intend to
make any future contributions to the Trust.
In the event that the Board has given the direction specified in subparagraph
(i) the Administrator shall direct the Trustee, pursuant to Section 1.14 of the
Trust Agreement, to sell such portion of the Company Stock held in the Suspense
Account as is necessary for the Trust to pay such Current Obligations. In the
event that the Board has given the direction specified in subparagraph (ii), the
Administrator shall direct the Trustee to sell such portion of such Company
Stock as is sufficient to pay such portion (or all) of the debt obligation of
the Trust incurred in connection with the Trust's acquisition of Leveraged
Company Stock, as the Administrator in its sole discretion deems appropriate.
If all of the Company Stock held in the Suspense Account is sold, the
Administrator shall have the option to declare that the Plan shall no longer
constitute an employee stock ownership plan. In the event of complete
discontinuance of contributions to the Plan, the Plan and Trust shall otherwise
remain in full force and effect except that all ESOP Accounts shall thereupon
become fully Vested.
Section 16.2 - Amendment of Plan
- ------------ -----------------
As limited in Section 16.1 of the Plan and Section 7.02 of the Trust
Agreement, complete or partial amendments or modifications to the Plan
(including retroactive amendments to meet governmental requirements or
prerequisites for tax qualification) may be made from time to time by the Board;
provided, however, that no amendment shall decrease the Vested percentage any
Participant or Merged Participant has in his Accounts or his accrued benefit.
Section 16.3 - Retroactive Effect of Plan Amendment
- ------------ ------------------------------------
(a) No Plan amendment, including this amendment, unless it expressly
provides otherwise, shall be applied retroactively to increase the Vested
percentage of a Participant or Merged Participant whose Separation from the
Service preceded the date such amendment became effective unless and until he
becomes or again becomes a Participant and additional contributions are
allocated to him.
(b) No Plan amendment, unless it expressly provides otherwise, shall
be applied retroactively to increase the amount of service credited to any
person for purposes of Plan participation, vesting or any other Plan purpose
with respect to
69
<PAGE>
his participation or employment before the date such amendment became effective.
(c) Except as provided in subsections (a) and (b), all rights under
the Plan shall be determined under the terms of the Plan as in effect at the
time the determination is made.
Section 16.4 - Consolidation or Merger; Adoption of Plan by Other Companies
- ------------ ------------------------------------------------------------
(a) In the event of the consolidation or merger of the Company with or
into any other business entity, or the sale by the Company or its owner of its
assets, the successor may continue the Plan by adopting the same by resolution
of its board of directors or agreement of its partners or proprietor and, if
deemed appropriate, by executing a proper supplemental agreement to the Trust
Agreement with the Trustee. If, within ninety days from the effective date of
such consolidation, merger or sale of assets, such new corporation, partnership
or proprietorship does not adopt the Plan, the Plan shall be terminated in
accordance with Section 16.1.
(b) The Plan shall not be merged or consolidated with any other plan,
nor shall its assets or liabilities be transferred to any other plan, unless
each Participant, Merged Participant or former Participant in this Plan would
have immediately after the merger, consolidation or transfer (if the plan in
question were then terminated) accounts which are equal to or greater in amount
than his corresponding Accounts under this Plan had the Plan been terminated
immediately before the merger, consolidation or transfer.
(c) Any Company Affiliate may, with the approval of the Board, adopt
the Plan as a whole company or as to any one or more divisions effective as of
the first day of any Plan Year by resolution of its own board of directors or
agreement of its partners. Such Company Affiliate shall give written notice of
such adoption to the Administrator and to the Trustee by its duly authorized
officers.
ARTICLE XVII
SALE OF COMPANY STOCK
---------------------
Section 17.1 - Option to Sell Shares of Company Stock
- ------------ --------------------------------------
Solely in the event that a Participant or Merged Participant receives
a distribution consisting in whole or in part of Company Stock that at the time
of distribution thereof is not Freely Tradeable Stock, then such distributed
Company Stock shall be made subject to a put option in the hands of a Qualified
Holder, with such put option to be subject to the following provisions:
70
<PAGE>
(a) During the sixty day period following any distribution of
such Company Stock, a Qualified Holder shall have the right to require the
Company to purchase all or any portion of said distributed Company Stock
held by said Qualified Holder. A Qualified Holder shall exercise such
right by giving written notice, within the aforesaid sixty day period, to
the Company of the number of shares of distributed Company Stock that such
Qualified Holder intends to sell to the Company. The purchase price to be
paid for any such Company Stock shall be its fair market value determined
as of the most recent valuation in accordance with the valuation rules
specified in Section 8.1.
(b) If a Qualified Holder shall fail to exercise his put option
right under subsection (a), he shall have the right to exercise such option
in the first sixty day period of the next following Plan Year. If a
Qualified Holder shall fail to exercise his put option in the next
succeeding Plan Year, such option right shall expire and the Qualified
Holder shall have no further right to require the Company to purchase such
distributed Company Stock.
(c) In the application of subsections (a) and (b), the period
during which a put option is exercisable does not include any time when a
distributee is unable to exercise it because the party bound by the put
option is prohibited from honoring it by applicable federal or state law.
(d) In the event that a Qualified Holder shall exercise a put
option under this Section, then the Company shall have the option of paying
the purchase price of the Option Stock under either of the following
methods:
(i) A lump sum payment of the purchase price within ninety
days after the date upon which such put option is exercised (the
"Exercise Date") or
(ii) A series of six or less equal installment payments, with
the first such payment to be made within thirty days after the
Exercise Date and the five or correspondingly less remaining payments
to be made on the five or less anniversary dates of the Exercise Date,
so that the full amount shall be paid as of the fifth or earlier
anniversary of such Exercise Date. If the Company elects to pay the
purchase price of the Option Stock under the installment method
provided in this paragraph (ii), then the
71
<PAGE>
Company shall, within 30 days after the Exercise Date, give the
Qualified Holder who is exercising the put option the Company's
promissory note for the full unpaid balance of the option price. Such
note shall, at a minimum, state a reasonable rate of interest and
provide that the full amount of such note shall accelerate and become
due immediately in the event that the Company defaults in the payment
of a scheduled installment payment.
(e) The protections and rights provided in this Section are
nonterminable and continue to exist notwithstanding the repayment of any
loan, the proceeds of which are used to purchase Leveraged Company Stock
and notwithstanding the cessation of the Plan's status as an employee stock
ownership plan.
(f) The foregoing put options under subsections (a) and (b) shall
be effective solely against the Company and shall not obligate the Plan in
any manner, provided, however, with the Company's consent the Plan may
elect to purchase any Company Stock that otherwise must be purchased by the
Company pursuant to a Qualified Holder's exercise of any such option.
(g) Except as is expressly provided hereinabove with respect to
any distributed Leveraged Company Stock that is not Freely Tradeable Stock,
no such Leveraged Company Stock shall be subject to a put, call, or other
option, or buy-sell or similar arrangement while held by and when
distributed from the Plan, whether or not at such time the Plan constitutes
an employee stock ownership plan and whether or not the loan used to
acquire such Leveraged Company Stock shall have been repaid.
(h) At the time of distribution of Company Stock that is not
Freely Tradeable Stock to an Employee or Beneficiary, the Company shall
furnish to such Employee or Beneficiary the most recent annual certificate
of value prepared by the Company with respect to such stock. In addition,
the Company shall furnish to such Participant, Merged Participant or
Beneficiary a copy of each subsequent annual certificate of value until the
put options provided for in this Section with respect to such distributed
Company Stock shall expire.
72
<PAGE>
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
------------------------
Section 18.1 - Identification of Fiduciaries
- ------------ -----------------------------
(a) The Administrator (with respect to control and management of Plan
assets and in general) and the Trustee shall be named fiduciaries within the
meaning of ERISA and, as permitted or required by law, shall have exclusive
authority and discretion to control and manage the operation and administration
of the Plan within the limits set forth in the Trust Agreement, subject to
proper delegation.
(b) Such named fiduciaries and every person who exercises any
discretionary authority or discretionary control respecting management of the
Trust Fund or Plan, or exercises any authority or control respecting the
management or disposition of the assets of the Trust Fund or Plan, or renders
investment advice for compensation, direct or indirect, with respect to any
moneys or other property of the Trust Fund or Plan or has authority or
responsibility to do so, or has any discretionary authority or discretionary
responsibility in the administration of the Plan, and any person designated by a
named fiduciary to carry out fiduciary responsibilities under the Plan, shall be
a fiduciary and, as such, shall be subject to provisions of the Plan, the Trust
Agreement, ERISA and other applicable laws governing fiduciaries. Any person
may act in more than one fiduciary capacity.
Section 18.2 - Allocation of Fiduciary Responsibilities
- ------------ ----------------------------------------
(a) Fiduciary responsibilities under the Plan are allocated as
follows:
(i) The sole power and discretion to manage and control the
Plan's assets including, but not limited to, the power to acquire and
dispose of Plan assets, is allocated to the Trustee, except to the extent
that another fiduciary is appointed in accordance with the Trust Agreement
with the power to control or manage (including the power to acquire and
dispose of) assets of the Plan.
(ii) The sole duties, responsibilities and powers allocated to
the Board shall be those expressly retained under Sections 16.1, 16.2 and
16.4.
(iii) The sole duties, responsibilities and powers allocated to
the Company shall be those expressly retained under the Plan or the Trust
Agreement.
73
<PAGE>
(iv) Each Participant shall be a named fiduciary for purposes of
Section 403(a) of ERISA but solely with respect to the issuance of
instructions to the Trustee
A to tender or not to tender the Company Stock representing
-
the proportionate share in the Company Stock Fund of the Participant's
Accounts, or the Company Stock credited to his Stock Accounts,
pursuant to Section 1.11 of the Trust Agreement, and
B to vote such shares, pursuant to Section 18.5
-
(v) All fiduciary responsibilities not allocated to the Trustee,
the Board, the Company or any investment manager are hereby allocated to
the Administrator, subject to delegation in accordance with Section
15.1(a)(viii).
(b) Fiduciary responsibilities under the Plan (other than the power to
manage or control the Plan's assets) may be reallocated among those fiduciaries
identified as named fiduciaries in Section 18.1 by amending the Plan in the
manner prescribed in Section 16.2 followed by such fiduciaries' acceptance of,
or operation under, such amended Plan.
Section 18.3 - Limitation on Rights of Employees
- ------------ ---------------------------------
The Plan is strictly a voluntary undertaking on the part of the
Company and shall not constitute a contract between the Company and any
Employee, or consideration for, or an inducement or condition of, the employment
of an Employee. Except as otherwise required by law, nothing contained in the
Plan shall give any Employee the right to be retained in the service of the
Company or to interfere with or restrict the right of the Company, which is
hereby expressly reserved, to discharge or retire any Employee at any time,
without notice and with or without cause. Except as otherwise required by law,
inclusion under the Plan will not give any Employee any right or claim to any
benefit hereunder except to the extent such right has specifically become fixed
under the terms of the Plan and there are funds available therefor in the hands
of the Trustee. The doctrine of substantial performance shall have no
application to Employees, Participants or Merged Participants. Each condition
and provision, including numerical items, has been carefully considered and
constitutes the minimum limit on performance which will give rise to the
applicable right.
Section 18.4 - Limitation on Annual Additions; Treatment
- ------------ -----------------------------------------
of Otherwise Excessive Allocations
----------------------------------
(a) In any Plan Year (which shall be the Plan's "limitation year"
within the meaning of Treas. Reg. (S) 1.415-
74
<PAGE>
2(b)), the Annual Addition of a Participant shall not exceed the least of
(i) twenty-five percent of such Participant's Statutory
Compensation for such Plan Year,
(ii) $30,000.00 (or, if greater, one-quarter of the dollar
limitation in effect under Code Section 415(b)(1)(A)), or
(iii) the maximum allowed under Code Section 415 (utilizing the
adjustments to the "defined contribution fraction" allowed by Section
1106(i)(4) of the Tax Reform Act of 1986 and Code Section 415(e)).
(b) If the Annual Addition of a Participant would exceed the limits of
subsection (a) as a result of an allocation of forfeitures, a reasonable error
in estimating a Participant's Statutory Compensation or under other limited
facts and circumstances found justifiable by the Commissioner of Internal
Revenue, it shall be reduced until it comes within such limits. Such reduction
shall be accomplished by debiting the necessary amount from
(i) his Unmatched ATS or PTS contributions for such Plan Year,
and
(ii) his Basic ATS or PTS contributions for such Plan Year (with
proportionate reductions in Company Contributions Accounts and ESOP
Accounts as appropriate),
in such order. The portion of such amount attributable to his ATS contributions
(but excluding any income thereon) and his Deferred Compensation first shall, to
the extent allowed by law, be refunded to him, and otherwise any necessary
remainder (including any income on his personal contributions which were
refunded to him under this paragraph) to the extent allowed by Section 403 of
ERISA, shall be returned to the Company and recontributed (either directly or
pursuant to the mechanism of Sections 5.1(c) and 6.3(b) for the applicable
Account of the Participant in the first Plan Year in which allowed under
subsection (a), or otherwise held in suspense hereunder and applied to the
applicable Account of the Participant in the first Plan Year in which allowed
under subsection (a). The balance, if any, of such reduction shall be allocated
to the Company Contributions Accounts and ESOP Accounts of persons who are
Active Participants at the end of the Plan Year in proportion to their
Compensation received while Active Participants in such Plan Year. If any
Participant's Annual Addition would, due to such special allocation, exceed the
limit of subsection (a), the excess shall be reallocated by a second special
allocation, and so on as necessary to allocate such amounts within the limits of
75
<PAGE>
subsection (a). Any amounts which cannot be so allocated because of the
limitations of subsection (a), shall be held in suspense and shall be allocated
and reallocated in succeeding Plan Years, in the order of time, prior to the
allocation of any Company or personal contributions.
(c) In the event the Plan is terminated while excess amounts are then
held in suspense under subsection (b), such excess amounts shall be allocated
and reallocated as provided in subsection (b), as of the day before the date of
the termination as if such day were the last day of such Plan Year. Any amounts
which cannot then be so allocated because of the limits of subsection (a) shall
revert to the Company, as provided in the Trust Agreement.
Section 18.5 - Voting Rights
- ------------ -------------
Except as otherwise required by ERISA, the Code and applicable
Treasury Regulations, all voting rights of shares of Company Stock held in the
Trust Fund shall be exercised by the Trustee only as directed by the
Administrator, the Participants or Merged Participants or their Beneficiaries in
accordance with the following provisions of this Section 18.5:
(a) With respect to all corporate matters submitted to the
Company's shareholders, Company Stock held by the Trust in the Company
Stock Fund or Stock Accounts shall be voted in accordance with the
directions of the Participants and Merged Participants (as communicated to
the Trustee) in proportion to the sum of the value of the investment of
their Accounts in the Company Stock Fund and the value of the shares
allocated to their Stock Accounts. If this Section 18.5(a) applies to
shares of Company Stock allocated to the account of a deceased Participant
or Merged Participant, such Participant's or Merged Participant's
Beneficiary shall be entitled to direct the voting with respect to such
shares as if such Beneficiary were the Participant or Merged Participant.
(b) At least thirty days before each annual or special
shareholders' meeting of the Company (or, if such schedule cannot be met,
as early as practicable before such meeting), the Trustee shall furnish to
each Participant or Merged Participant a copy of the proxy solicitation
material sent generally to shareholders, together with a form requesting
confidential instructions on how the Participant's or Merged Participant's
proportionate voting rights are to be exercised. Upon timely receipt of
such instructions, the Trustee (after combining votes of fractional shares
of Company stock to give effect to the greatest extent possible to
Participants' or Merged Participants' instructions) shall vote as
instructed. The
76
<PAGE>
instructions received by the Trustee from Participants or Merged
Participants shall be held by the Trustee in strict confidence and shall
not be divulged or released to any person including officers or Employees
of the Company, or of any other company. The Trustee and the Company shall
not make recommendations to Participant or Merged Participants on whether
to vote or how to vote, other than recommendations contained in proxy and
other materials that are generally distributed to all shareholders of the
Company with respect to such vote. If voting instructions for shares of
Company Stock allocated to any Participant or Merged Participant are not
timely received for a particular shareholders' meeting, such shares of
Company Stock shall not be voted.
(c) The Trustee shall vote shares of Company Stock allocated to the
Suspense Account (or held by the Trust but not otherwise described in
subsection (a)) in the same proportion as Company Stock with respect to
which voting instructions are received is voted.
Section 18.6 - Delays in Payment
- ------------ -----------------
If any Participant or Merged Participant would incur any liability pursuant
to Section 16(b) of the Securities Exchange Act of 1934 by reason of his receipt
of any distribution hereunder, then, notwithstanding any other Plan provision,
such Participant or Merged Participant shall have the option to delay such
distribution for such reasonable period of time as shall be necessary to avoid
such liability.
Section 18.7 - Restriction on Leveraged Company Stock
- ------------ --------------------------------------
Except as otherwise provided herein, no Leveraged Company Stock may be
subject to a put, call, or other option or a buy-sell or similar arrangement
while held by and when distributed from the Plan.
Section 18.8 - Governing Law
- ------------ -------------
The Plan and Trust shall be interpreted, administered and enforced in
accordance with the Code and ERISA, and the rights of Participants, former
Participants, Merged Participants, Beneficiaries and all other persons shall be
determined in accordance therewith; provided, however, that, to the extent that
state law is applicable, the laws of the state of residence of the Participant
in question, or if none, the state in which the principal office of the
Administrator is located shall apply.
77
<PAGE>
Section 18.9 - Genders and Plurals
------------ -------------------
Where the context so indicates, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
Section 18.10 - Titles
------------- ------
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan or Trust
Agreement.
Section 18.11 - References
------------- ----------
Unless the context clearly indicates to the contrary, a reference
to a statute, regulation or document shall be construed as referring to any
subsequently amended, enacted, adopted or executed statute, regulation or
document.
Executed at Pasadena, California, this ____ day of July, 1993.
AVERY DENNISON CORPORATION
By ______________________________
Officer
78
<PAGE>
SUPPLEMENT A
This Supplement contains provisions which modify and supplement the
Plan in order to effectuate the merger into the Plan of the Employee Stock
Ownership Plan of Avery International effective July 31, 1987. It shall apply
only to PAYSOP Participants and those who are not PAYSOP Participants only
because they are Participants.
The profit-sharing portion of the Plan shall include the PAYSOP
Accounts.
Section A1.1 - Accounts
- ------------ --------
"Accounts" of a Participant or PAYSOP Participant shall include his
PAYSOP Account.
Section A1.2 - Merged Participant
- ------------ ------------------
"Merged Participant" shall include a PAYSOP Participant.
Section A1.3 - PAYSOP
- ------------ ------
"PAYSOP" shall mean the Employee Stock Ownership Plan of Avery
International which was merged into the Plan effective July 31, 1987.
Section A1.4 - PAYSOP Account
- ------------ --------------
"PAYSOP Account" shall mean the individual account in the Plan
established for a Participant or PAYSOP Participant as a result of the merger of
the PAYSOP into the Plan effective July 31, 1987 which consists of the
contributions of the Company to such Participant's Stock Ownership Account
established pursuant to the PAYSOP in accordance with Section 5.1 thereof.
Section A1.5 - PAYSOP Participant
- ------------ ------------------
"PAYSOP Participant" shall mean any person who is not a Participant in
the Plan, but was a Participant in the PAYSOP, for whom the Company maintains a
PAYSOP Account.
Section A1.6 - Stock Accounts
- ------------ --------------
A "Stock Account" of a Participant or PAYSOP Participant shall include
his PAYSOP Account.
Section A6.10 - Diversification
- ------------- ---------------
(c) (i) For purposes of this Section, a "Qualified Participant" is a
Participant or PAYSOP Participant who has attained age fifty-five and
completed ten years of combined participation in the
79
<PAGE>
PAYSOP and the Plan. A Participant or PAYSOP Participant shall be treated
as having completed ten combined years of participation in the PAYSOP and
the Plan upon the tenth anniversary of the earlier of
A the day he first became a participant under the PAYSOP, and
-
B the day he first became a Participant pursuant to Section 2.1
-
or, if later, the ESOP Effective Date.
* * * * *
References in the following Sections of the Plan to "Participants"
shall be deemed to include PAYSOP Participants:
1.13 (Cash Account), 1.61 (Qualified Holder), 1.69 (Stock Account), 6.4, 6.6,
6.8, 6.10, 8.1, and 18.2.
80
<PAGE>
SUPPLEMENT B
This Supplement contains provisions which modify and supplement the
Plan in order to effectuate the merger into the Plan of the Profit-Sharing Plan
for Employees of White Graphic Systems, Inc. effective July 31, 1987. It shall
apply only to White-Graphic Participants and those who are not White-Graphic
Participants only because they are Participants.
The profit-sharing portion of the Plan shall include the White Graphic
Accounts.
Section B1.1 - Accounts
- ------------ --------
"Accounts" of a Participant or White Graphic Participant shall include
his White Graphic Account.
Section B1.2 - Hour of Service
- ------------ ---------------
For purposes of Section 1.37 any reference to the "Company" with
respect to periods prior to August 1, 1987 shall include White Graphic Systems,
Inc.
Section B1.3 - Merged Participant
- ------------ ------------------
"Merged Participant" shall include a White Graphic Participant.
Section B1.4 - White Graphic Account
- ------------ ---------------------
"White Graphic Account" shall mean the individual account in the Plan
established for a Participant or White Graphic Participant as a result of the
merger of the White Graphic Plan into the Plan effective July 31, 1987.
Section B1.5 - White Graphic Participant
- ------------ -------------------------
"White Graphic Participant" shall mean any person who is not a
Participant in the Plan, but was a Participant in the White Graphic Plan for
whom the Company maintains a White Graphic Account.
Section B1.6 - White Graphic Plan
- ------------ ------------------
"White Graphic Plan" shall mean the Profit-Sharing Plan for Employees
of White Graphic Systems, Inc.
81
<PAGE>
SUPPLEMENT C
This Supplement contains provisions which modify and supplement the
Plan in order to effectuate the merger into the Plan of the Profit-Sharing Plan
of Kingsbacher-Murphy Company effective March 1, 1993. It shall apply only to
Kingsbacher-Murphy Participants and those who are not Kingsbacher-Murphy
Participants only because they are Participants.
The profit-sharing portion of the Plan shall include the Kingsbacher-
Murphy Accounts.
Section C1.1 - Accounts
- ------------ --------
"Accounts" of a Participant or Kingsbacher-Murphy Participant shall
include his Kingsbacher-Murphy Account.
Section C1.2 - Kingsbacher-Murphy Account
- ------------ --------------------------
"Kingsbacher-Murphy Account" shall mean the individual account in the
Plan established for a Participant or Kingsbacher-Murphy Participant as a result
of the merger of the Kingsbacher-Murphy Plan into the Plan effective March 1,
1993, and shall consist of his Kingsbacher-Murphy Rollover Account, if any, and
his Kingsbacher-Murphy Profit-Sharing Account.
Section C1.3 - Kingsbacher-Murphy Participant
- ------------ ------------------------------
"Kingsbacher-Murphy Participant" shall mean any person who is not a
Participant in the Plan, but was a Participant in the Kingsbacher-Murphy Plan
for whom the Company maintains a Kingsbacher-Murphy Account.
Section C1.4 - Kingsbacher-Murphy Plan
- ------------ -----------------------
"Kingsbacher-Murphy Plan" shall mean the Profit-Sharing Plan of
Kingsbacher-Murphy Company.
Section C1.5 - Kingsbacher-Murphy Profit-Sharing Account
- ------------ -----------------------------------------
"Kingsbacher-Murphy Profit-Sharing Account" of a Participant or a
Kingsbacher-Murphy Participant shall mean that portion of his Kingsbacher-Murphy
Account consisting of contributions to his Profit-Sharing Account established
pursuant to the terms of the Kingsbacher-Murphy Plan.
Section C1.6 - Kingsbacher-Murphy Rollover Account
- ------------ -----------------------------------
"Kingsbacher-Murphy Rollover Account" of a Participant or a
Kingsbacher-Murphy Participant shall mean that portion of his Kingsbacher-Murphy
Account consisting of contributions to his Rollover Account, if any, established
pursuant to the terms of the Kingsbacher-Murphy Plan.
82
<PAGE>
Section C1.7 - Merged Participant
------------ ------------------
"Merged Participant" shall include a Kingsbacher-Murphy Participant.
83
<PAGE>
SUPPLEMENT D
This Supplement contains provisions which modify and supplement the
Plan in order to effectuate the transfer into the Plan of the accounts of
certain employees under The Dennison Manufacturing Company Pre-Tax Investment
Plus Plan and The Avery Dennison Office Products Company Pre-Tax Investment Plus
Plan, effective at the close of business May 31, 1993. It shall apply only to
Dennison 401(k) Participants and those who are not Dennison 401(k) Participants
only because they are Participants.
Pursuant to this transfer of accounts, amounts held in the "Deferred
Compensation Account," "Matching Account," "Qualified Account" and "Rollover
Account" of each Participant and Dennison 401(k) Participant under the Dennison
401(k) Plans were transferred to the Unmatched PTS Account, Company
Contributions Account, Qualified Account and Dennison 401(k) Rollover Account,
respectively, under the Plan.
The profit-sharing portion of the Plan shall include the Dennison
401(k) Rollover Accounts.
Section D1.1 - Accounts
- ------------ --------
"Accounts" of a Participant or Dennison 401(k) Participant shall
include his Dennison 401(k) Rollover Account.
Section D1.2 - Dennison 401(k) Participant
- ------------ ---------------------------
"Dennison 401(k) Participant" shall mean any person who is not a
Participant in the Plan, but one or more of whose accounts in one of the
Dennison 401(k) Plans was transferred hereto.
Section D1.3 - Dennison 401(k) Plans
- ------------ ---------------------
"Dennison 401(k) Plans" shall mean The Dennison Manufacturing Company
Pre-Tax Investment Plus Plan and The Avery Dennison Office Products Company Pre-
Tax Investment Plus Plan.
Section D1.4 - Dennison 401(k) Rollover Account
- ------------ --------------------------------
"Dennison 401(k) Rollover Account" shall mean the individual account
in the Plan established for a Participant or Dennison 401(k) Participant as a
result of the transfer of accounts from the Dennison 401(k) Plans to the Plan
effective as of May 31, 1993.
Section D1.5 - Merged Participant
- ------------ ------------------
"Merged Participant" shall include a Dennison 401(k) Participant.
84
<PAGE>
Section D9.3 - Withdrawals from Dennison 401(k) Rollover Accounts
- ------------ --------------------------------------------------
A Participant or Dennison 401(k) Participant may elect in writing in
accordance with the Rules of the Plan to make a lump sum withdrawal of all or
any portion of the amount credited to his Dennison 401(k) Rollover Account.
Section D9.6 - Withdrawals Upon Attainment of Age Fifty Nine and One Half
- ------------ ----------------------------------------------------------
A Participant or Dennison 401(k) Participant who remains in the employ
of the Company after attaining age fifty nine and one half may elect in writing
in accordance with the Rules of the Plan to receive a distribution of all or any
portion of his Dennison 401(k) Rollover Account in one lump sum. Such
distributions shall not be made more frequently than at twelve month intervals.
Section D15.14 - Loans to Participants and Dennison 401(k) Participants
- -------------- ------------------------------------------------------
A Participant or Dennison 401(k) Participant may borrow against his
Dennison 401(k) Rollover Account with the approval of the Administrator in
accordance with the provisions of subsection (b).
85
<PAGE>
SUPPLEMENT E
This Supplement contains provisions which modify and supplement the
Plan in order to effectuate the merger into the Plan of The Dennison Employee
Stock Ownership Plan, effective at the close of business May 31, 1993. It shall
apply only to Dennison ESOP Participants and those who are not Dennison ESOP
Participants only because they are Participants.
The leveraged ESOP portion of the Plan shall include the Dennison ESOP
Accounts.
Section E1.1 - Accounts
- ------------ --------
"Accounts" of a Participant or Dennison ESOP Participant shall include
his Dennison ESOP Account.
Section E1.2 - Change in Control
- ------------ -----------------
"Change in Control" shall mean,
(a) The acquisition (other than from Dennison Manufacturing
Company) by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (excluding, for this purpose, Dennison Manufacturing
Company or its subsidiaries, or any employee benefit plan of Dennison
Manufacturing Company or its subsidiaries) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either the then outstanding shares of common stock of Dennison
Manufacturing Company or the combined voting power of the then outstanding
voting securities of Dennison Manufacturing Company entitled to vote
generally in the election of directors of Dennison Manufacturing Company;
or
(b) Individuals, who as of January 1, 1990, constitute the Board
of Directors of Dennison Manufacturing Company (as of January 1, 1990, the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board of Directors of Dennison Manufacturing Company, provided that
any person becoming a director subsequent to January 1, 1990 whose
election, or nomination for election by the shareholders of Dennison
Manufacturing Company, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of Dennison Manufacturing Company, as such terms
are sued in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of the Plan, considered as though such person
were a member of the Incumbent Board; or
86
<PAGE>
(c) Consummation of a reorganization, merger or consolidation, in
each case, with respect to which persons who were the stockholders of
Dennison Manufacturing Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own, directly or
indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, or a liquidation
or dissolution of Dennison Manufacturing Company or of the sale of all or
substantially all of the assets of Dennison Manufacturing Company.
Section E1.3 - Dennison ESOP Participant
- ------------ -------------------------
"Dennison ESOP Participant" shall mean any person who is not a
Participant in the Plan, but was a Participant in the Dennison ESOP, for whom
the Company maintains a Dennison ESOP Account.
Section E1.4 - Dennison ESOP
- ------------ -------------
"Dennison ESOP" shall mean The Dennison Employee Stock Ownership Plan.
Section E1.5 - Dennison ESOP Account
- ------------ ---------------------
"Dennison ESOP Account" shall mean the individual account in the Plan
established for a Participant or Dennison ESOP Participant as a result of the
merger of the Dennison ESOP into the Plan effective May 31, 1993.
Section E1.6 - Disability Retirement Date
- ------------ --------------------------
"Disability Retirement Date" of a Participant or Dennison ESOP
Participant shall mean the date of his Separation from the Service (prior to his
Normal Retirement Date) authorized by the Administrator upon its finding, based
on competent medical evidence and determined under the Company's medical leave
policy, that he, as a result of mental or physical disease or condition, will be
unable properly to fulfill his assigned duties.
Section E1.7 - Leveraged Company Stock
- ------------ -----------------------
"Leveraged Company Stock" shall include Company Stock treated as
"Leveraged Company Stock" under the provisions of the Dennison ESOP as of its
merger into this Plan.
Section E1.8 - Merged Participant
- ------------ ------------------
"Merged Participant" shall include a Dennison ESOP Participant.
87
<PAGE>
Section E1.9 - Normal Retirement Date
- ------------ ----------------------
"Normal Retirement Date" of a Participant or Dennison ESOP
Participant, but only with respect to his Dennison ESOP Account, shall mean the
first day of the calendar month coincident with or next following the earlier of
(a) his sixty-fifth birthday, or
(b) his fifty-fifth birthday and his completion of five Years of
Vesting Service.
Section E1.10 - Stock Account
- ------------- -------------
"Stock Account" of a Participant or Dennison ESOP Participant shall
include his Dennison ESOP Account.
Section E1.11 - Years of Vesting Service
- ------------- ------------------------
"Years of Vesting Service" shall include all service treated as
"Vesting Service" under the provisions of the Dennison ESOP as of May 31, 1993,
as well as all service otherwise so treated under the provisions of the Plan.
Section E6.10 - Diversification
- ------------- ---------------
(c) (i) For purposes of this Section, a "Qualified Participant"
shall include a Participant or Dennison ESOP Participant who has attained
age fifty-five and completed ten years of combined participation in the
Dennison ESOP and the Plan. A Participant or Dennison ESOP Participant
shall be treated as having completed ten years of combined participation in
the Dennison ESOP and the Plan upon the tenth anniversary of the day he
first became a Participant pursuant to Section 2.1 or, if earlier, a
participant under the Dennison ESOP.
Section E9.1 - Vesting of Accounts
- ------------ -------------------
(a) Except as provided in Section E14.4(a) and subsection (b), a
Participant's or Dennison ESOP Participant's Dennison ESOP Account shall not be
Vested until he completes three Years of Vesting Service at which time it shall
become fully Vested.
(b) The interest of a Participant or Dennison ESOP Participant in his
Dennison ESOP Account shall become fully Vested upon the earliest to occur of
(i) it becoming fully Vested under the terms of the Dennison
ESOP,
(ii) his death,
88
<PAGE>
(iii) his Normal Retirement Date,
(iv) his Disability Retirement Date,
(v) a Change in Control, or
(vi) the termination or discontinuation of the Plan under
Section 16.1,
if he is then an affected Employee or employed by a Company Affiliate.
Section E9.6 - Withdrawal After Ten Years of Vesting Service
- ------------ ---------------------------------------------
Notwithstanding any contrary provision of the Plan, any Participant or
Dennison ESOP Participant who has accrued ten or more Years of Vesting Service
at the end of any Plan Year may, without a Separation from the Service and
during his continued participation in the Plan, elect to receive a distribution
of up to 10% (determined in increments of 1%) of the amount credited to his
Dennison ESOP Account in one lump sum distribution in the form of cash or stock
to the extent permitted by Section 11.3(b)(i) in accordance with Section
11.3(a).
Section E13.1 - Distribution on Resignation or Discharge
- ------------- ----------------------------------------
(b) if the Vested amount credited to his Dennison ESOP Account exceeds
$3,500 (or exceeded such amount at the time of a prior distribution), payment of
such amount under any installment option then available under Section 11.3;
Section E13.2 - Forfeitures
- ------------- -----------
(a) If a Participant or Dennison ESOP Participant has a Separation
from the Service due to resignation or discharge, the portions of his Dennison
ESOP Account which are not Vested shall be forfeited upon his completion of five
consecutive Break in Service Years. Pending application under Section 6.9,
forfeitures shall be held in suspense and shall not be commingled with amounts
held in suspense under Section 18.4.
(b) If a Participant or Dennison ESOP Participant has a Separation
from the Service prior to becoming Vested in any portion of his Dennison ESOP
Account, a distribution shall be deemed to have occurred upon such Separation
from the Service for purposes of subsection (a).
Section E13.3 - Restoration of Forfeitures
- ------------- --------------------------
If a Participant or Dennison ESOP Participant whose Dennison ESOP
Account is not then fully Vested
89
<PAGE>
(a) has a Separation from the Service,
(b) suffers a forfeiture under Section E13.2 of the portion of
such Account which is not Vested,
(c) again becomes an Employee or employed by a Company Affiliate
before he has five consecutive Break in Service Years, and
(d) repays to the Plan the full amount, if any, distributed to
him from such Accounts before the end of his fifth consecutive Break in
Service Year or, if earlier, the fifth anniversary of his reemployment,
then the amount forfeited under Section E13.2 by such Participant or Dennison
ESOP Participant and any interest thereon shall be restored to his Dennison ESOP
Account, applying forfeitures pending reallocation and Company contributions, in
that order, as necessary.
Section E14.3 - Vesting
- ------------- -------
(a) For any Plan Year in which the Plan is Top Heavy, the Vested
percentage of the Dennison ESOP Account of each Participant or Dennison ESOP
Participant who completes an Hour of Service in such Plan Year shall be the
percentage of such Account shown on the following table:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage
------------------------ -----------------
<S> <C>
less than 2 0%
2 20%
3 100%.
</TABLE>
(b) The Vested percentage of a Participant's or Dennison ESOP
Participant's Dennison ESOP Account shall be not less than the Vested percentage
determined as of the last day of the last Plan Year in which the Plan was Top
Heavy.
(c) For any Plan Year in which the Plan is not Top Heavy which follows
one or more Plan Years for which the Plan has been Top Heavy, Section E9.1 shall
again become applicable as an amendment to the Plan; thus, each Participant or
Dennison ESOP Participant who has had his Vested percentage computed under
subsection (a) and who has completed at least one Year of Vesting Service shall
be permitted to elect to have his Vested percentage computed in accordance with
subsection (a) for such Plan Year and any subsequent Plan Year in which the Plan
is no longer Top Heavy. Such Participant or Dennison ESOP Participant may make
such election within an election period beginning no later than the first day of
the first Plan Year in which the Plan is no longer Top Heavy and ending no later
than the later of
(i) the sixtieth day of such Plan Year, or
90
<PAGE>
(ii) a date which is sixty days after the day the Participant or
Dennison ESOP Participant is issued written notice of his right to make
such election by the Administrator.
Section E16.1 - Termination of Plan; Discontinuance of Contributions
- ------------- ----------------------------------------------------
(a) (ii) For each Participant or Dennison ESOP Participant who is
then an Employee or employed by a Company Affiliate with respect to whom
the Plan is terminated, the interest in his Dennison ESOP Account, if any,
including his interest in the forfeitures (which shall be applied under
Section 5.4), shall become fully Vested.
* * * * *
References in the following Sections of the Plan to "Participants"
shall be deemed to include Dennison ESOP Participants:
1.13 (Cash Account), 1.61 (Qualified Holder), 1.69 (Stock Account), 6.4, 6.6,
6.8, 6.9, 8.1, and 18.2.
91
<PAGE>
EXHIBIT 1
Effective Dates
The provisions of the Plan are generally effective as of June 1, 1993.
However, the provisions set forth below are effective as follows:
<TABLE>
<CAPTION>
Sections Effective Date
- -------------------------------------- --------------------------------------
<C> <S>
4.1 December 1, 1989
6.10, A6.10, E6.10 January 1, 1987
11.3(b)(ii) January 1, 1989
14.1(b)(viii) December 1, 1989
15.12 January 1, 1993 except as it relates
to the ability of Participants to
make rollover contributions to the
Plan from qualified plans other than
those maintained by the Company or a
Company Affiliate which shall be
effective December 1, 1987
15.13 Distributions made on or after
January 1, 1993
</TABLE>
Additional Effective Dates
- --------------------------
1. Supplements A and B shall be effective as of July 31, 1987.
2. Supplement C shall be effective as of March 1, 1993.
3. Supplements D and E shall be effective as of May 31, 1993.
4. For Plan Years beginning December 1, 1987 and before June 1, 1992, the
qualified cash or deferred arrangement in the Plan shall be administered so
as to operate in accordance with a reasonable interpretation of the rules
set forth in Code Section 401(k) and 401(m)(as in effect during such
years).
92
<PAGE>
EXHIBIT 2
Non-Participating Union Groups
A. The following Bargaining Units are covered by collective
bargaining agreements not providing for coverage under this Plan:
- Graphic Communications International Union, Local 600
- Graphic Communications International Union, Local 48-B
B. The following Bargaining Units are not covered by collective
bargaining agreements providing for coverage under this Plan:
- Employees of Avery Dennison Office Products Company classified as
Cylinder Handlers
93
<PAGE>
EXHIBIT 4.2
TWELFTH AMENDMENT TO
AVERY DENNISON CORPORATION
EMPLOYEE SAVINGS PLAN
Avery International Corporation, a corporation organized under the
laws of the State of Delaware, by resolution of its Board of Directors adopted
on November 18, 1982, adopted the most recent previous restatement of Avery
International Employee Savings Plan (the "Plan") for the exclusive benefit of
its eligible Employees, effective as of January 1, 1982. The Plan was amended
in October, 1985, August 12, 1986, June 25, 1987, January 6, 1988, November 28,
1989, May 31, 1990, October 26, 1990.
On October 16, 1990, pursuant to a corporate acquisition, Avery
International Corporation changed its name to Avery Dennison Corporation. The
Plan was amended on December 20, 1990 to change the name of the Plan to reflect
this name change and subsequently on May 6, 1991, February 16, 1993 and July 2,
1993.
The Plan was originally adopted on November 30, 1953 under the name
"Stock Bonus and Retirement Plan for the Employees of Avery Adhesive Label
Corp." and amended fourteen times through January 25, 1974. Effective December
1, 1976, the Company restated the Plan and renamed it "Avery International
Employee Savings Plan." The Plan was amended on September 28, 1978 and June 28,
1979 prior to its most recent previous restatement (pursuant to which numbering
of amendments began again with the "first" amendment).
In order to amend the Plan in certain respects, this amendment to the
Plan shall be effective as provided below. This amendment to the Plan, together
with the Eleventh Amendment, constitutes the entire Plan as amended to date.
1. Effective as of December 1, 1994, Section 1.19(a) of the Plan is
hereby amended to read in its entirely as follows:
(a) 'Compensation' of a Participant for any Plan Year shall mean
his Statutory Compensation for such Plan Year
(i) and including amounts not includable in gross income by
reason of Code Sections 125 (cafeteria plans), 402(e)(3) (401(k)
plans), 402(h) or 403(b),
(ii) and excluding all reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation, any awards pursuant to the Key Executive Long-
Term
<PAGE>
Incentive Plan, and welfare benefits (including severance benefits)
(even if includable in gross income),
but in no event greater than $150,000 (adjusted for increases in the cost
of living described in Code Section 401(a)(17) and, if the Plan Year is
less than twelve months, such limit shall be reduced to an amount equal to
such limit multiplied by a fraction, the numerator representing the number
of months in the Plan Year and the denominator of which is twelve).
2. Effective as of November 30, 1993, Section 1.51 of the Plan is
hereby amended to read in its entirety as follows:
Section 1.51 - Plan Year
------------ ---------
'Plan Year' shall mean, for periods beginning prior to June 1,
1993, the applicable periods set forth in previously effective amendments
to the Plan, for the period beginning June 1, 1993 and ending November 30,
1993, such period and for the period beginning December 1, 1993, December 1
through the last day of the following November.
3. Effective as of December 1, 1987, the term "Employee" shall be
substituted for the term "Participant" in Sections 1.62 and 15.12.
4. Effective as of October 18, 1989, Section 15.14(b)(ix) of the
Plan is hereby amended to read in its entirety as follows:
(ix) Each such loan shall be secured by the lesser of the amount
of the loan or half of the Vested interest in the Borrower's Accounts,
including any such portion of a Borrower's Accounts which is credited after
the date of the loan. For purposes of Articles XI, XII and XIII, the
distributable balance of such Accounts shall be reduced by the unpaid
balance of the loan secured by such Accounts.
Executed at Pasadena, California, this ___ day of ________________,
1993.
AVERY DENNISON CORPORATION
By_________________________________
Chairman and
Chief Executive Officer
2
<PAGE>
EXHIBIT 4.3
THIRTEENTH AMENDMENT TO
AVERY DENNISON CORPORATION
EMPLOYEE SAVINGS PLAN
Avery International Corporation, a corporation organized under the
laws of the State of Delaware, by resolution of its Board of Directors adopted
on November 18, 1982, adopted the most recent previous restatement of Avery
International Employee Savings Plan (the "Plan") for the exclusive benefit of
its eligible Employees, effective as of January 1, 1982. The Plan was amended
in October, 1985, August 12, 1986, June 25, 1987, January 6, 1988, November 28,
1989, May 31, 1990 and October 26, 1990.
On October 16, 1990, pursuant to a corporate acquisition, Avery
International Corporation changed its name to Avery Dennison Corporation. The
Plan was amended on December 20, 1990 to change the name of the Plan to reflect
this name change and subsequently on May 6, 1991, February 16, 1993, July 2,
1993 and October 12, 1993.
The Plan was originally adopted on November 30, 1953 under the name
"Stock Bonus and Retirement Plan for the Employees of Avery Adhesive Label
Corp." and amended fourteen times through January 25, 1974. Effective December
1, 1976, the Company restated the Plan and renamed it "Avery International
Employee Savings Plan." The Plan was amended on September 28, 1978 and June 28,
1979 prior to its most recent previous restatement (pursuant to which numbering
of amendments began again with the "first" amendment).
In order to amend the Plan in certain respects, this amendment to the
Plan shall be effective as provided below. This amendment to the Plan, together
with the Eleventh and Twelfth Amendments, constitutes the entire Plan as amended
to date.
1. Effective as of August 5, 1993, paragraph 1.37(a)(iv) is hereby
added to the Plan to read in its entirety as follows:
(iv) Each hour while on an unpaid leave pursuant to the
Family and Medical Leave Act of 1993 for which he would have been paid
or entitled to payment by the Company or a Company Affiliate had he
been performing services.
2. Effective as of March 1, 1989, subsection 6.10(a) of the Plan is
hereby amended to read in its entirety as follows:
(a) During the first ninety days following each Plan Year in the
Qualified Election Period, a Qualified Participant may elect to have the
following
<PAGE>
number of shares of Diversification Stock either applied to investment in
the Subfunds pursuant to Article VII and the Rules of the Plan (and
notwithstanding any contrary, otherwise applicable, Rules of the Plan), or
distributed to him:
(i) during the first five Plan Years of the Qualified
Election Period, an aggregate number of shares not to exceed twenty-
five percent of the number of shares of Diversification Stock, and
(ii) during the last Plan Year of the Qualified Election
Period, the excess of fifty percent of the number of shares of
Diversification Stock over the aggregate number of shares distributed
under paragraph (i).
Such elections shall be made on such forms as are prescribed by the
Administrator. A Qualified Participant may revoke or make a new election
at any time during each such ninety-day period.
3. Effective as of May 31, 1993, paragraph 6.10(c)(iii) is hereby
amended to read in its entirety as follows:
(iii) For purposes of this Section, a Qualified
Participant's "Diversification Stock" shall be that Company Stock,
which, after December 31, 1986, is credited to his Stock Account (or,
after such date, is credited to an account later merged into his Stock
Account, except as described in Section E6.10(e)).
4. Effective as of May 31, 1993, Section E6.10(e) is hereby added to
Supplement E of the Plan to read in its entirety as follows:
(e) For purposes of this Section, the portion of a Participant's
or Dennison ESOP Participant's Dennison ESOP Account which consists of
Diversification Stock shall be determined by multiplying the number of
shares of Company Stock held in such Account by a fraction, the numerator
of which is the total number of shares of Company Stock acquired by the
Dennison ESOP or the Plan after December 31, 1986 and allocated to
Participants' or Dennison ESOP Participants' Dennison ESOP Accounts (not to
exceed the number of shares of Company Stock held by the Plan in the
Dennison ESOP Accounts on the date on which the Participant or Dennison
ESOP Participant becomes a
2
<PAGE>
Qualified Participant), and the denominator of which is the total number of
shares of Company Stock held in the Dennison ESOP Accounts on the date on
which the Participant or Dennison ESOP Participant becomes a Qualified
Participant.
5. Effective as of May 31, 1993, Section E9.6 of Supplement E to the
Plan is hereby amended to read in its entirety as follows:
Section E9.6 - Withdrawal After Ten Years of Vesting Service
------------ ---------------------------------------------
Notwithstanding any contrary provision of the Plan, any
Participant or Dennison ESOP Participant who has accrued ten or more Years
of Vesting Service at the end of any Plan Year may, without a Separation
from the Service and during his continued participation in the Plan, elect
to
(a) receive a distribution in one lump sum in the form of
cash or stock of up to 10% (determined in increments of 1%) of the
amount credited to his Dennison ESOP Account as specified in the Rules
of the Plan to the extent permitted by Section 11.3(b)(i) in
accordance with Section 11.3(a), or
(b) direct the investment in any of the Subfunds (other
than the Company Stock Fund) pursuant to Article VII and the Rules of
the Plan of up to 10% (determined in increments of 1%) of the amount
credited to his Dennison ESOP Account and invested in the Company
Stock Fund.
6. Effective as of June 1, 1993, Exhibit 2 to the Plan is hereby
amended as set forth in Exhibit 2 which is attached hereto and incorporated in
the Plan by this reference.
Executed at Pasadena, California, this ___ day of ________________,
1994.
AVERY DENNISON CORPORATION
By-------------------------------
Officer
3
<PAGE>
EXHIBIT 2
Non-Participating Union Groups
A. The following Bargaining Units are covered by collective
bargaining agreements not providing for coverage under this Plan:
- Graphic Communications International Union, Local 600
- Graphic Communications International Union, Local 48-B
(through March 31, 1994 only)
B. The following Bargaining Units are not covered by collective
bargaining agreements providing for coverage under this Plan:
- Employees of Dennison Manufacturing Company classified as
Cylinder Handlers
4
<PAGE>
EXHIBIT 5.1
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2350 ROOM 5127
LOS ANGELES, CA 90053
Date: NOV 06 1990 Employer Identification Number:
95-1492269
AVERY INTERNATIONAL CORPORATION File Folder Number:
C/O JED W BRICKNER 950025106
LATHAM AND WATKINS Person to Contact:
555 SOUTH FLOWER STREET LOURDES REYES
LOS ANGELES, CA 90071-2466 Contact Telephone Number:
(213) 894-4202
Plan Name:
AVERY INTERNATIONAL CORPORATION
PROFIT SHARING PLAN 401K
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that your read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
Your plan does not provide for contributions on behalf of participants not
employed on the allocation date. In operation, the provision may discriminate in
favor of employees who are stockholders, officers or highly compensated. If this
discrimination occurs, your plan will not remain qualified. (See Rev. Rul.
76-250, 1976-2 C. B. 124.)
This determination letter is applicable for the amendment(s) adopted on
Nov. 18, 1988.
This determination letter is applicable for the plan adopted on Nov. 30,
1953.
The form of the plan satisfies those requirements of the Tax Reform Act of
1986 and the other laws, regulations, revenue rulings, and notices listed in
section 4.01 of Rev. Proc. 88-47, 1988-2 C.B. 513, that are effective for plan
years beginning before 1989.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
<PAGE>
-2-
AVERY INTERNATIONAL CORPORATION
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/S/ MICHAEL J. QUINN
Michael J. Quinn
District Director
Enclosures:
Publication 794
PWBA 515
Addendum
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report, which includes an explanatory paragraph regarding the
Company's adoption of the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards ("SFAS") No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions", SFAS
No. 109, "Accounting for Income Taxes" and SFAS No. 112, "Employers' Accounting
for Postemployment Benefits" during 1993, dated January 31, 1995, appearing on
page 49 of the Avery Dennison 1994 Annual Report to Shareholders and
incorporated by reference in the Annual Report on Form 10-K of Avery Dennison
Corporation for the year ended December 31, 1994, on our audits of the
consolidated financial statements of Avery Dennison Corporation; and of our
report dated January 31, 1995, appearing in the Annual Report on Form 10-K of
Avery Dennison Corporation for the year ended December 31, 1994, on our audits
of the financial statement schedules listed in the index on page S-1 of the Form
10-K.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
April 28, 1995
