<PAGE>
As filed with the Securities and Exchange Commission on September 21, 1998
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------------
SODEXHO MARRIOTT SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 52-0936594
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10400 FERNWOOD ROAD
BETHESDA, MARYLAND 20817
(Address of principal executive offices, including zip code)
-------------------------
SODEXHO SAVINGS PLUS PLAN
(Full title of the plan)
-------------------------
Robert A. Stern
Senior Vice President and General Counsel
Sodexho Marriott Services, Inc.
10400 Fernwood Road
Bethesda, Maryland 20817
(301) 380-3100
-------------------------
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
Copy to:
PETER J. ROMEO, ESQ.
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004
(202) 637-5600
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SHARE(1) PRICE(1) FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1 par 500,000 shares $28.03 $14,015,000 $4,134
value per share(2)(3)
===========================================================================================================================
</TABLE>
[FN]
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low sale
prices of the Common Stock on the New York Stock Exchange on September 15, 1998.
(2) Includes rights ("Rights") issuable pursuant to that certain Rights
Agreement between the Registrant and Bank of New York dated as of October 8,
1993, as amended, which Rights are currently carried and traded with shares of
the Registrant's Common Stock (including shares registered hereunder). The value
attributable to the Rights, if any, is reflected in the value of the
Registrant's Common Stock.
(3) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein. Pursuant
to Rule 457(h)(2) under the Securities Act of 1933, no separate registration fee
is required with respect to the plan interests being registered hereby.
</FN>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Documents containing the information required to be provided in this
Part I will be separately sent or given to employees participating in the
Sodexho Savings Plus Plan (the "Plan") as contemplated by Rule 428(b)(1) under
the Securities Act of 1933, as amended (the "Securities Act"). In accordance
with the instructions to Part I of Form S-8, such documents will not be filed
with the Securities and Exchange Commission (the "Commission") either as part of
this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424 under the Securities Act.
-2-
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
------------------------------------------------
Sodexho Marriott Services, Inc. (the "Registrant" or the "Company") hereby
incorporates by reference into this Registration Statement the following
documents:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended January 2, 1998, as amended by the Form 10-K/A
Amendment No. 1 for the fiscal year ended January 2, 1998
filed with the Commission on April 30, 1998;
(b) All reports filed by the Registrant with the Commission under
Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), since January 2, 1998;
(c) The description of the Registrant's common stock, $1.00 par
value per share ("Common Stock"), and the Rights contained in
Item 1 of the Registrant's Registration Statement on Form 8-A
filed with the Commission on September 30, 1993, as amended by
the Registrant's Registration Statement on Form 8-A/A filed
with the Commission on May 29, 1998; and
(d) All documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior
to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold.
The Plan hereby incorporates by reference into this Registration
Statement all documents subsequently filed by the Plan pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded to the
extent that a statement contained in any other subsequently filed document which
also is or deemed to be incorporated by reference herein modifies or supersedes
such prior statement. Any such statement so modified or superseded shall not be
deemed to constitute a part of this Registration Statement, except as so
modified or superseded.
To the extent that any proxy statement is incorporated by reference
herein, such incorporation shall not include any information contained in such
proxy statement which is not, pursuant to the Commission's rules, deemed to be
"filed" with the Commission or subject to the liabilities of Section 18 of the
Exchange Act.
Item 4. DESCRIPTION OF SECURITIES.
--------------------------
Not applicable.
-3-
<PAGE>
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
---------------------------------------
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
------------------------------------------
Article 8 of the Company's Amended and Restated Certificate of
Incorporation (the "Certificate") and Section 6.09 of the Company's Amended and
Restated Bylaws ("Bylaws") define the rights of individuals, including directors
and officers of the Company, to indemnification by the Company in the event of
personal liability or expenses incurred by them as a result of pending or
threatened claims against them. Article 9 of the Certificate limits the personal
liability of directors to the Company and its stockholders for monetary damages
for breach of fiduciary duty. These provisions of the Certificate and Bylaws are
collectively referred to herein as the "Director Liability and Indemnification
Provisions."
The Director Liability and Indemnification Provisions are consistent
with Section 102(b)(7) of the Delaware General Corporation Law ("Delaware Law"),
which is designed, among other things, to encourage qualified individuals to
serve as directors of Delaware corporations by permitting Delaware corporations
to include in their certificates of incorporation a provision limiting or
eliminating directors' liability for monetary damages and with other existing
Delaware Law provisions permitting indemnification of certain individuals,
including directors and officers.
In performing their duties, directors of a Delaware corporation are
obligated as fiduciaries to exercise their business judgment and act in what
they reasonably determine in good faith, after appropriate consideration, to be
the best interests of the corporation and its stockholders. Decisions made on
that basis are protected by the so-called "business judgment rule." However, the
expense of defending lawsuits means that, as a practical matter, adequate
insurance and indemnity provisions are often a condition of an individual's
willingness to serve as director of a Delaware corporation. Delaware Law has for
some time specifically permitted corporations to provide indemnity and procure
insurance for its directors and officers.
Set forth below is a description of the Director Liability and
Indemnification Provisions. Such description is intended as a summary only and
is qualified in its entirety by reference to the Certificate and the Bylaws.
Elimination of Liability in Certain Circumstances. Article 9 of the
Certificate protects each director against monetary damages for breach of
fiduciary duty, except for liability (i) for any breach of the director's duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware Law or (iv) for any transaction
from which the director derived an improper personal benefit. Under Delaware
Law, absent provisions such as are in Article 9, directors could generally be
held liable for gross negligence for decisions made in the performance of their
duty of care. Article 9 eliminates such liability. Under Section 174 of Delaware
Law, however, directors remain personally liable for unlawful dividends or
unlawful stock repurchases or redemptions and a negligence standard applies to
such liability.
-4-
<PAGE>
While the Director Liability and Indemnification Provisions provide
directors with protection from liability for monetary damages for breaches of
the duty of care, they do not eliminate a director's duty of care. Accordingly,
these provisions will have no effect on the availability of equitable remedies
such as an injunction or rescission based upon a director's breach of the duty
of care. Article 9 will apply to officers of the Company only if they are
directors of the Company and are acting in their capacity as directors, and will
not apply to officers of the Company who are not directors. The elimination of
liability of directors for monetary damages in the circumstances described above
may deter persons from bringing third-party or derivative actions against
directors to the extent such actions seek monetary damages.
Indemnification and Insurance. Under Section 145 of Delaware Law,
directors and officers as well as other employees and individuals may be
indemnified against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative, other
than an action by or in the right of the corporation (a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the company, and with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard of care is applicable in the case of the
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action, and Delaware Law requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the Company.
Section 6.09 of the Bylaws provides as follows:
(a) Each person who was or is a party or is threatened to be made a
party to, or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative, is or was a director, officer, employee or
agent of the Company or a Subsidiary, or is or was serving at the request of the
Company or a Subsidiary as a director, officer, partner, member, employee or
agent of another corporation, partnership, limited liability company, joint
venture, trust or other enterprise, shall be indemnified and held harmless by
the Company to the fullest extent permitted from time to time by Delaware Law as
the same exists or may hereafter be amended (but, if permitted by applicable
law, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment) or any other
applicable laws as presently or hereafter in effect, and such indemnification
shall continue to a person who has ceased to be such a director, officer,
employee or agent and shall inure to the benefit of his or her heirs, executors
and administrators; provided, that the Company shall indemnify any such person
seeking indemnification in connection with a Proceeding (or part thereof)
initiated by such person only if such Proceeding (or part thereof) was
authorized by the Board of Directors or is a Proceeding to enforce such person's
claim to indemnification pursuant to the rights granted by this Bylaw. The
Company shall pay the expenses incurred by such person in defending any such
Proceeding in advance of its final disposition upon receipt (unless the Company
upon authorization of the Board of Directors waives such requirement to the
extent permitted by applicable law) of an undertaking by or on behalf of such
person to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Company as authorized by this
Bylaw or otherwise.
-5-
<PAGE>
(b) The indemnification and the advancement of expenses incurred in
defending a Proceeding prior to its final disposition provided by, or granted
pursuant to this Bylaw shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, other provision of these bylaws, agreement, vote
of stockholders or Disinterested Directors or otherwise. No repeal, modification
or amendment of, or adoption of any provision inconsistent with, this Section
6.09, nor to the fullest extent permitted by applicable law, any modification of
law, shall adversely affect any right or protection of any person granted
pursuant hereto existing at or with respect to any events that occurred prior
to, the time of such repeal, amendment adoption or modification.
(c) The Company may maintain insurance, at its expense, to protect
itself and any person who is or was a director, officer, partner, member,
employee, or agent of the Company or a Subsidiary or of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Company would have the power to indemnify
such person against such expense, liability or loss under Delaware Law.
(d) If any provision or provisions of this Bylaw shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (i) the validity,
legality and enforceability of the remaining provisions of this Bylaw
(including, without limitation, each portion of any paragraph of this Bylaw
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself held to be invalid, illegal or unenforceable) shall not in any way
be affected or impaired thereby; and (ii) to the fullest extent possible, the
provisions of this Bylaw (including, without limitation, each such portion of
any paragraph of this Bylaw containing any such provision held to be invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
(e) For purposes of these Bylaws:
(i) "Disinterested Director" means a director of the Company
who is not and was not a party to the proceeding or matter in respect of which
indemnification is sought by the claimant.
(ii) "Subsidiary" means a corporation, a majority of the
capital stock of which is owned directly or indirectly by the Company.
Article 8 of the Company Certificate provides that a person who was or
is made a party to, or is involved in, any action, suit or proceeding by reason
of the fact that he or she is or was a director or officer of the Company will
be indemnified by the Company to the fullest extent provided by Delaware Law.
Article 8 also provides that the Company may enter into one or more agreements
with any person which provide for indemnification greater or different than that
provided in Article 8.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
------------------------------------
Not applicable.
-6-
<PAGE>
Item 8. EXHIBITS.
---------
EXHIBIT
NUMBER TITLE OF EXHIBIT
- ------- ----------------
4.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit No. 3(a) to Form
8-K dated April 3, 1998).
4.2 Amended and Restated By-laws of the Registrant (incorporated by
reference to Exhibit No. 3(b) to Form 8-K dated April 3, 1998).
4.3 Sodexho Savings Plus Plan.
4.4 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock (incorporated by reference
to Exhibit No. 4.1 to Form 8-K dated October 25, 1993).
4.5 Rights Agreement with the Bank of New York, as Rights Agent,
dated as of October 8, 1993 (the "Rights Agreement")
(incorporated by reference to Exhibit No. 4.2 to Form 8-K dated
October 25, 1993).
4.6 Amendment No. 1 to the Rights Agreement (incorporated by
reference to Exhibit No. 1 to Form 8-A/A filed on October 15,
1997).
4.7 Amendment No. 2 to the Rights Agreement (incorporated by
reference to Exhibit No. 1 to Form 8-A/A filed on May 29, 1998).
23.1 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page).
99.1 Trust Agreement between the Registrant and C G Trust Company, as
trustee of the Plan.
The undersigned Registrant hereby undertakes to submit the Plan and any
amendments thereto to the Internal Revenue Service in an timely manner and to
make all changes required by the Internal Revenue Service in order to qualify
the Plan under the applicable provisions of the Internal Revenue Code of 1986,
as amended.
Item 9. UNDERTAKINGS.
-------------
(a) The undersigned Registrant hereby undertakes:
-7-
<PAGE>
(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,
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; PROVIDED,
HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered 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 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-8-
<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 Bethesda, State of Maryland, on the 18th day of
September, 1998.
SODEXHO MARRIOTT SERVICES, INC.
BY: /s/ ROBERT A. STERN
----------------------------
Name: ROBERT A. STERN
Title: Senior Vice President and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, the Sodexho
Savings Plus Plan has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Hartford, State of Connecticut, on the 18th day of September, 1998.
SODEXHO SAVINGS PLUS PLAN
BY: /s/ MARY LOU FILIAULT
------------------------------
Name: Mary Lou Filiault
------------------------------
Title: Vice President, CG Trust Co.
------------------------------
as director trustee of the
Sodexho Savings Plus Plan
-9-
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Charles D. O'Dell and Robert A. Stern as his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for such person
and in his name, place and stead, in any and all capacities, to sign any or all
further amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE
/s/ CHARLES D. O'DELL
- ------------------------ President and Chief September 18, 1998
CHARLES D. O'DELL Executive Officer
(Principal Executive
Officer) and Director
/s/ LAWRENCE E. HYATT
- ------------------------ Senior Vice President and September 18, 1998
LAWRENCE E. HYATT Chief Financial Officer
(Principal Financial Officer)
/s/ LOTA ZOTH
- ------------------------ Corporate Controller and September 18, 1998
LOTA ZOTH Chief Accounting Officer
(Principal Accounting
Officer)
/s/ WILLIAM J. SHAW
- ------------------------ Chairman of the Board September 18, 1998
WILLIAM J. SHAW
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<PAGE>
/s/ PIERRE BELLON
- ------------------------ Director September 18, 1998
PIERRE BELLON
- ------------------------ Director September 18, 1998
BERNARD CARTON
- ------------------------ Director September 18, 1998
EDOUARD DE ROYERE
/s/ JOHN W. MARRIOTT III
- ------------------------ Director September 18, 1998
JOHN W. MARRIOTT III
/s/ DOCTOR R. CRANTS
- ------------------------ Director September 18, 1998
DOCTOR R. CRANTS
/s/ DANIEL J. ALTOBELLO
- ------------------------ Director September 18, 1998
DANIEL J. ALTOBELLO
-11-
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER TITLE OF EXHIBIT PAGES
4.1 Amended and Restated Certificate of Incorporation of *
the Registrant (incorporated by reference to Exhibit
No. 3(a) to Form 8-K dated April 3, 1998).
4.2 Amended and Restated By-laws of the Registrant *
(incorporated by reference to Exhibit No. 3(b) to
Form 8-K dated April 3, 1998).
4.3 Sodexho Savings Plus Plan. 1 - 56
4.4 Certificate of Designation, Preferences and Rights of *
Series A Junior Participating Preferred Stock
(incorporated by reference to Exhibit No. 4.1 to Form
8-K dated October 25, 1993).
4.5 Rights Agreement with the Bank of New York, as Rights *
Agent, dated as of October 8, 1993 (the "Rights
Agreement") (incorporated by reference to Exhibit No.
4.2 to Form 8-K dated October 25, 1993).
4.6 Amendment No. 1 to the Rights Agreement (incorporated *
by reference to Exhibit No. 1 to Form 8-A/A filed on
October 15, 1997).
4.7 Amendment No. 2 to the Rights Agreement (incorporated *
by reference to Exhibit No. 1 to Form 8-A/A filed on
May 29, 1998).
23.1 Consent of Arthur Andersen LLP. 1
24.1 Power of Attorney (included on signature page).
*incorporated by reference
-12-
<PAGE>
THE SODEXHO
SAVINGS PLUS PLAN
(Amended and Restated Effective March 1, 1996)
<PAGE>
TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION...............................................1
1.1. In general.......................................................1
1.2. Defined Terms....................................................1
ARTICLE 2. PARTICIPATION..............................................1
2.1. Date of Participation............................................1
2.2. Duration of Participation........................................2
ARTICLE 3. CONTRIBUTIONS..............................................2
3.1. Elective Contributions...........................................2
3.2. Form and Manner of Elections.....................................2
3.3. Matching Contributions...........................................3
3.4. Retirement Contributions.........................................3
3.5. Qualified Nonelective Contributions..............................5
3.6. Rollover Contributions...........................................5
3.7. Crediting of Contributions.......................................5
3.8. Time for Making Contributions....................................5
3.9. Certain Limits Apply.............................................6
3.10. Return of Contributions..........................................6
3.11. Establishment of Trust...........................................6
ARTICLE 4. PARTICIPANT ACCOUNTS.......................................6
4.1. Accounts.........................................................6
4.2. Adjustment of Accounts...........................................6
4.3. Investment of Accounts...........................................7
4.4. Appointment of Investment Manager or Named Fiduciary.............7
ARTICLE 5. VESTING OF ACCOUNTS........................................8
5.1. Immediate Vesting of Certain Accounts............................8
5.2. Deferred Vesting of Other Accounts...............................8
5.3. Special Vesting Rules............................................8
5.4. Distribution of Less Than Entire Vested Percentage...............9
5.5. Changes in Vesting Schedule......................................9
5.6. Forfeitures......................................................9
ARTICLE 6. WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE..............10
6.1. Hardship Withdrawals............................................10
6.2. Required Distributions After Age 70 1/2.........................12
6.3. Restrictions on Certain Distributions...........................12
6.4. Limitation of Withdrawable Amount...............................13
-ii-
<PAGE>
6.5. Distributions Required by a Qualified Domestic Relations Order 13
6.6. Certain Dispositions............................................13
6.7. Withdrawals from After-Tax Contribution Accounts................14
6.8. Withdrawals After Age 59 1/2....................................14
6.9. Direct Rollover of Withdrawal Distributions.....................14
ARTICLE 7. LOANS TO PARTICIPANTS.....................................14
7.1. Effective Date of Article 7.....................................14
7.2. In General......................................................14
7.3. Rules and Procedures............................................15
7.4. Maximum Amount of Loan..........................................15
7.5. Minimum Amount of Loan; Maximum Number of Loans.................15
7.6. Note; Security; Interest........................................16
7.7. Source of Funds for Loan........................................16
7.8. Repayment.......................................................16
7.9. Repayment Upon Distribution.....................................16
7.10. Default.........................................................16
7.11. Note as Trust Asset.............................................17
7.12. Nondiscrimination...............................................17
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE............17
8.1. Separation from Service for Reasons Other Than Death............17
8.2. Payment of Seiler Transfer Account..............................17
8.3. Time of Distributions...........................................19
8.4. Distributions After a Participant's Death.......................20
8.5. Designation of Beneficiary......................................21
8.6. Direct Rollovers................................................22
ARTICLE 9. ADMINISTRATION............................................23
9.1. Administrator...................................................23
9.2. Powers of Administrator.........................................23
9.3. Effect of Interpretation or Determination.......................24
9.4. Nondiscriminatory Exercise of Authority.........................24
9.5. Reliance on Tables, etc.........................................24
9.6. Claims and Review Procedures....................................24
9.7. Indemnification of Administrator and Assistants.................24
ARTICLE 10. AMENDMENT AND TERMINATION................................24
10.1. Amendment......................................................24
10.2. Termination....................................................25
10.3. Distributions upon Termination of the Plan.....................25
10.4. Merger or Consolidation of Plan; Transfer of Plan Assets.......25
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<PAGE>
ARTICLE 11. LIMITS ON CONTRIBUTIONS..................................26
11.1. Code Section 404 Limits........................................26
11.2. Code Section 415 Limits........................................26
11.3. Code Section 402(g) Limits.....................................29
11.4. Code Section 401(k)(3) Limits..................................31
11.5. Code Section 401(m) Limits.....................................35
11.6. Section 401(a)(26)/410(b) Limits...............................39
ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS.............................40
12.1. Provisions to apply............................................40
12.2. Minimum Contribution...........................................40
12.3. Special Vesting Schedule.......................................41
12.4. Adjustment to Limitation on Benefits...........................42
12.5. Definitions....................................................42
ARTICLE 13. MISCELLANEOUS............................................44
13.1. Exclusive Benefit Rule.........................................44
13.2. Limitation of Rights...........................................45
13.3. Nonalienability of Benefits....................................45
13.4. Failure to Qualify Initially...................................45
13.5. Governing law..................................................45
ARTICLE 14. DEFINITIONS..............................................45
14.1. "Accounts".....................................................45
14.2. "Administrator"................................................46
14.3. "Affiliated Employer"..........................................46
14.4. "After-Tax Contribution Account"...............................46
14.5. "Annuity Starting Date"........................................46
14.6. "Beneficiary"..................................................46
14.7. "Board of Directors"...........................................46
14.8. "Code".........................................................46
14.9. "Contribution Agreement".......................................47
14.10. "Company".....................................................47
14.11. "Compensation"................................................47
14.12. "Disabled"....................................................48
14.13. "Elective Contribution".......................................48
14.14. "Elective Contribution Account"...............................48
14.15. "Eligibility Date"............................................48
14.16. "Eligible Employee"...........................................48
14.17. "Employee"....................................................49
14.18. "Entry Date"..................................................49
14.19. "ERISA".......................................................49
14.20. "FDI Transfer Account"........................................50
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14.21. "Fiscal Year".................................................50
14.22. "Gardner Merchant Plan".......................................50
14.23. "Highly Compensated Employee".................................50
14.24. "Hour of Service".............................................51
14.25. "Investment Committee"........................................52
14.26. "Matching Contribution".......................................53
14.27. "Matching Contribution Account................................53
14.28. "Normal Retirement Age".......................................53
14.29. "Participant".................................................53
14.30. "Participating Employer"......................................53
14.31. "Period of Service"...........................................53
14.32. "Plan"........................................................54
14.33. "Plan Year"...................................................54
14.34. "Prior Plan"..................................................54
14.35. "Qualified Domestic Relations Order"..........................54
14.36. "Qualified Nonelective Contribution"..........................54
14.37. "Regulation"..................................................54
14.38. "Required Beginning Date".....................................54
14.39. "Retirement Contribution".....................................54
14.40. "Retirement Contribution Account".............................54
14.41. "Rollover Contribution".......................................55
14.42. "Rollover Contribution Account"...............................55
14.43. "Section".....................................................55
14.44. "Seiler Transfer Account".....................................55
14.45. "Substantial Severance".......................................55
14.46. "Trust".......................................................55
14.47. "Trustee".....................................................55
14.48. "Valuation Date"..............................................55
14.49. "Year of Service for Participation"...........................56
14.50. "Year of Service for Vesting".................................56
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ARTICLE 1. INTRODUCTION
1.1. IN GENERAL. This document sets forth the provisions of The Sodexho
Savings Plus Plan (the "Plan"), effective as of March 1, 1996. The Plan, as
initially adopted under the name The Seiler Retirement Income Plan, effective
September 1, 1990 and as amended and restated under the name The Sodexho USA
Retirement Income Plan, effective January 1, 1994, and its related Trust, are
intended to qualify as a profit-sharing plan and trust under Code sections
401(a) and section 501(a), and the cash or deferred arrangement forming part of
the Plan is intended to qualify under Code section 401(k). The provisions of the
Plan and Trust shall be construed and applied accordingly. The purpose of the
Plan is to provide benefits to Participants in a manner consistent and in
compliance with such Code sections and Title I of ERISA.
Effective March 1, 1996, a portion of the Gardner Merchant Food Service
401(k) Retirement Plan ("Gardner Merchant Plan") shall be merged into the Plan.
Former Participants in the Gardner Merchant Plan for whom the merger is
effective shall become Eligible Employees in the Plan as of March 1, 1996 and
shall be eligible to make Elective Contributions to the Plan with respect to any
Compensation earned thereafter.
1.2. DEFINED TERMS. All capitalized terms used in the following provisions
of the Plan have the meanings given them under the Article entitled
"Definitions".
ARTICLE 2. PARTICIPATION
2.1. DATE OF PARTICIPATION. All Eligible Employees who were Participants in
the Plan as of February 29, 1996 shall continue to be Participants on and after
March 1, 1996 if they are Eligible Employees on that date. Each other Employee
shall become eligible to participate as of the Eligibility Date coinciding with
or next following the latest of
(a) the attainment of age 21, and
(b) the day he or she completes a Year of Service for Participation,
provided that he or she is an Eligible Employee on such Date. All years of
service with an Affiliated Employer are counted toward eligibility.
For purposes of determining the date of participation for any Employee of the
Company whose immediate prior employment was with Gardner Merchant Holdings,
Inc., service with Gardner Merchant Holdings, Gardner Merchant or with the
portion of Morrison Companies that was acquired by Gardner Merchant in 1994 that
occurred before Gardner Merchant Holdings, Inc. or any predecessor company
became an Affiliated Employer shall be counted in determining a Year of Service
for Participation.
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2.2. DURATION OF PARTICIPATION. An individual who has become a Participant
under the Plan will remain a Participant for as long as an Account is maintained
under the Plan for his or her benefit, or until his or her death, if earlier.
Notwithstanding the preceding sentence and unless otherwise expressly provided
for under the Plan, no contributions shall be made, nor shall any forfeitures be
allocated with respect to a Participant who is not an Eligible Employee. In the
event a Participant remains an Employee but ceases to be an Eligible Employee
and becomes ineligible to receive contributions, such Employee will again become
eligible to receive contributions immediately upon returning to the class of
Eligible Employees. In the event an Employee who is not an Eligible Employee
becomes an Eligible Employee, such Employee will become a Participant
immediately if such Employee has otherwise satisfied the minimum age and service
requirements (described above) and would have otherwise previously become a
Participant. A Participant or former Participant who is reemployed as an
Eligible Employee and who has not had a Substantial Severance shall again become
eligible to receive contributions on the date of his or her reemployment. If a
reemployed Participant has had a Substantial Severance, he or she will be
treated as a new Employee for purposes of this Article 2.
ARTICLE 3. CONTRIBUTIONS
3.1. ELECTIVE CONTRIBUTIONS. Each Participant may enter into a Contribution
Agreement with his or her Participating Employer specifying Elective
Contributions in an amount designated in the Agreement. By agreeing to Elective
Contributions, the Participant agrees to a reduction in pay in the amount
designated and the Participating Employer agrees in consideration of such
reduction to contribute an equivalent amount to the Trust. Elective
Contributions for any pay period may be made in multiples of one percentage of
Compensation but not to exceed 16% of Compensation.
3.2. FORM AND MANNER OF ELECTIONS. Each Contribution Agreement shall be on
a form prescribed or approved by the Administrator, or in such other manner as
the Administrator approves, and may be entered into, changed or revoked by the
Participant, with such prior written notice as the Administrator may prescribe,
as of the first day of any pay period. A Contribution Agreement shall be
effective with respect to Compensation payable on and after such date as may be
specified on such form (but not earlier than the date the Agreement is entered
into).
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3.3. MATCHING CONTRIBUTIONS.
(a) For all periods prior to March 1, 1996, the Company may, in its
discretion, make Matching Contributions to the Trust for the benefit of
each Participant (i) for whom it made Elective Contributions, (ii) who is
credited with 1,000 Hours of Service during the Plan Year, and (iii) who is
employed on the last day of the Plan Year.
(b) For Calendar Quarters after February 29, 1996, the Company may, in
its discretion, make Matching Contributions for the benefit of each
Participant (i) for whom it made Elective Contributions during the Calendar
Quarter and (ii) who is employed on the last day of the Calendar Quarter.
(For purposes of the period beginning March 1, 1996 and ending December 31,
1996, the Calendar Quarters will be deemed to have ended on May 31, August
31 and December 31, 1996. Thereafter the Calendar Quarters shall end on
March 31, June 30, September 30 and December 31.)
Prior to the beginning of each Plan Year the Company will decide, in its
discretion, whether Matching Contributions will be made to the Plan for the Plan
Year and the rate of such Contributions to be made by the Participating
Employers. If the Company fails to announce a rate of Matching Contributions
prior to the beginning of the Plan Year, then each Participating Employer shall
make a Matching Contribution to the Trust following the end of the Plan Year for
the benefit of each Participant described in (a) or (b) above, on whose behalf
it made Elective Contributions for the Plan Year in an amount equal to 50% of
the aggregate Elective Contributions made on behalf of the Participant. In
determining the Matching Contribution, Elective Contributions shall be taken
into consideration only to the extent they do not exceed (A) for pay periods
prior to March 1, 1996, 2% of the Participant's Compensation for any pay period,
and (B) for pay periods after February 29, 1996, 6% of the Participant's
Compensation for any pay period. The Company may change the rate of Matching
Contributions for a subsequent Plan Year or suspend Matching Contributions for
any subsequent Plan Year.
3.4. RETIREMENT CONTRIBUTIONS. The Company, in its discretion, may
determine whether a Retirement Contribution shall be made to the Trust for a
Plan Year, and if so, the amount to be contributed by each Participating
Employer. If the Company determines that a Retirement Contribution is to be
made, each Participating Employer shall contribute its designated portion as
follows:
(a) For Plan Years prior to September 1, 1995, the Retirement
Contribution of a Participating Employer for a Plan Year shall be
allocated among and credited to the Retirement Contribution Account of
each Participant (i) who is an Eligible Employee of the Participating
Employer on the last day of the Plan Year and is credited with 1,000
or more Hours of Service during such Plan Year, or (ii) who ceases to
be a Participant during the Plan Year by reason of separation from
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service after attaining Normal Retirement Age or death, or (iii) who
becomes Disabled during the Plan Year.
(b) For the Plan Year beginning September 1, 1995, a Retirement
Contribution shall be made for the period September 1, 1995 through
February 29, 1996, and shall be allocated and credited to the
Retirement Contribution Account of each Participant (i) who is an
Eligible Employee of the Participating Employer on February 29, 1996
and who is projected to complete 1000 or more Hours of Service during
such Plan Year ending August 31, 1996, or (ii) who ceases to be a
Participant during the Plan Year and prior to March 1, 1996 by reason
of separation from service after attaining Normal Retirement Age or
death, or (iii) who becomes Disabled during the Plan Year and prior to
March 1, 1996. In determining the Retirement Contribution under this
subsection (b) only Compensation earned from September 1, 1995 through
February 29, 1996 shall be taken into account.
The amount of the Retirement Contribution described in (a) or (b) above shall
be determined under the following schedule, based on such Participant's Years
of Vesting Service:
Applicable Percentage
Years of Vesting Service of Compensation
- ------------------------ ---------------------
less than 5 2
5 but less than 10 3
10 or more 4
(c) Except as provided in paragraph (d), no Retirement
Contributions shall be made to the Plan with respect to any
Compensation earned or Service accrued after February 29, 1996.
(d) For the period March 1, 1996 through August 31, 1996 and for
Fiscal Years thereafter, the Participating Employees may, in their
discretion, make a Retirement Contribution for each Participant who
(i) is actively employed on the last day of the applicable Fiscal
Year, (ii) who ceases to be a Participant during the Fiscal Year by
reason of separation from service after attaining Normal Retirement
Age, or (iii) who becomes Disabled during the Plan Year, if (iv) the
Participant was hired by The Seiler Corporation prior to September 1,
1986 and is continuously employed by The Seiler Corporation or Sodexho
USA, Inc. or Sodexho, Inc. until the date of the Retirement
Contribution. The Retirement Contribution under this subsection (d)
shall be 2% of the eligible Participant's Compensation for the Fiscal
Year and the contribution shall be made to the Plan as of the last day
of the applicable Fiscal Year.
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No Employee of the Company whose immediate prior employment was with Gardner
Merchant Holdings, Inc. shall be considered an Eligible Employee for purposes of
the Retirement Contributions described in this Section 3.4.
3.5. QUALIFIED NONELECTIVE CONTRIBUTIONS. To the extent necessary to
satisfy the Code section 401(k)(3) limits with respect to Elective Contributions
or the Code section 401(m) limits with respect to Matching Contributions, the
Company, in its discretion, may determine whether a Qualified Nonelective
Contribution shall be made to the Trust for a Plan Year and, if so, the amount
to be contributed by each Participating Employer. If the Company determines that
a Qualified Nonelective Contribution shall be made, each Participating Employer
shall contribute its designated portion. A Qualified Nonelective Contribution
for a Plan Year shall be allocated among and credited to the Qualified
Nonelective Contribution Accounts of some or all Participants who are eligible
to receive Elective Contributions for the Plan Year who are not Highly
Compensated Employees for the Plan Year, in proportion to their relative amounts
of Compensation for the Plan Year. Qualified Nonelective Contributions shall be
fully vested as of the time such Qualified Nonelective Contributions are made to
the Plan.
3.6. ROLLOVER CONTRIBUTIONS. An Eligible Employee may make a Rollover
Contribution to the Plan upon demonstration to the Administrator that the
contribution is eligible for transfer to the Plan pursuant to the rollover
provisions of the Code, provided the amount of the Rollover Contribution is at
least $1,000.
3.7. CREDITING OF CONTRIBUTIONS. Each type of contribution for a Plan Year
shall be allocated among and credited to the respective Accounts of Participants
eligible to share in the contribution as of the Valuation Date coinciding with
or next following the date the contributions are received by the Trustee (but in
no event later than the last Valuation Date of the Plan Year).
3.8. TIME FOR MAKING CONTRIBUTIONS. Elective Contributions shall be paid in
cash to the Trust as soon as such contributions can reasonably be segregated
from the general assets of the Participating Employer, but in any event within
90 days after the date on which the Compensation to which such contributions
relate is paid. Any Matching Contributions, Retirement Contributions, or
Qualified Nonelective Contributions for a Plan Year will be contributed in cash
to the Trust at such time as the Company determines, but in any event no later
than the time prescribed by law (including extensions) for filing the
Participating Employer's federal income tax return for its taxable year in or
with which the Plan Year ends. In addition, Qualified Nonelective Contributions
and Matching Contributions for a Plan Year
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must be made no later than the last day of the 12-month period immediately
following the Plan Year.
3.9. CERTAIN LIMITS APPLY. All contributions to the Plan are subject to the
applicable limits set forth under Code sections 401(k), 402(g), 401(m), 404, and
415, as further described in Article 11. In addition, certain minimum
allocations may be required under Code sections 401(a)(26), 410(b), and 416, as
also further described in Article 11 and Article 12.
3.10. RETURN OF CONTRIBUTIONS. If any contribution by a Participating
Employer to the Trust is
(a) made by reason of a good faith mistake of fact, or
(b) believed by the Participating Employer in good faith to be
deductible under Code section 404, but the deduction is disallowed,
the Trustee shall, upon request by the Participating Employer, return
to the Participating Employer the excess of the amount contributed
over the amount, if any, that would have been contributed had there
not occurred a mistake of fact or a mistake in determining the
deduction. Such excess shall be reduced by the losses of the Trust
attributable thereto, if and to the extent such losses exceed the
gains and income attributable thereto. In no event shall the return of
a contribution hereunder cause any Participant's Accounts to be
reduced to less than they would have been had the mistaken or
nondeductible amount not been contributed. No return of a contribution
hereunder shall be made more than one year after the mistaken payment
of the contribution, or disallowance of the deduction, as the case may
be.
3.11. ESTABLISHMENT OF TRUST. The Company will establish a Trust to accept
and hold contributions made under the Plan. The Trust shall be governed by an
agreement between the Company and the Trustee the terms of which shall be
consistent with the Plan provisions and intended qualification under Code
sections 401(a) and 501(a).
ARTICLE 4. PARTICIPANT ACCOUNTS
4.1. ACCOUNTS. The Administrator will establish and maintain (or cause the
Trustee to establish and maintain) for each Participant, such Accounts and
subaccounts as are necessary to carry out the purposes of the Plan.
4.2. ADJUSTMENT OF ACCOUNTS. As of each Valuation Date, each Account will
be adjusted to reflect the fair market value of the assets allocated to the
Account. In so doing,
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(a) each Account balance will be increased by the amount of
contributions, income and gain allocable to such Account since the
prior Valuation Date; and
(b) each Account balance will be decreased by the amount of
distributions from the Account and expenses and losses allocable to
the Account since the prior Valuation Date.
Income, expense, gain and loss which is generated by a particular investment
within the Trust shall be allocated to an Account participating in such
investment in the ratio to which the portion of the Account which is invested in
the fund bears to the entire amount of Trust assets invested in the fund. Any
expenses relating to a specific Account or Accounts, including without
limitation expenses incurred or with respect to a Qualified Domestic Relations
Order, or commissions or sales charges with respect to an investment in which
the Account participates, may be charged solely to the particular Account or
Accounts.
4.3. INVESTMENT OF ACCOUNTS. A Participant's Elective Contribution Account,
Matching Contribution Account, Qualified Nonelective Contribution Account,
After-Tax Contribution Account, and Rollover Contribution Account, shall be
invested by the Trustee as the Participant directs from among such investment
options as the Company may make available from time to time. To the extent any
such account is invested in the Morrison Stock Fund as of March 1, 1996, a
Participant may elect to continue such investment or direct the Trustee to see
all or a portion of his or her interest therein, but no additional contributions
may be invested in the Morrison Stock Fund. The Administrator shall prescribe
the form and manner in which such directions shall be made, as well as the
frequency with which such directions may be made or changed, the dates as of
which they shall be effective, and the allocation of Accounts with respect to
which no directions are submitted. The Participants' Retirement Contribution
Accounts, Seiler Transfer Accounts and FDI Transfer Accounts and any other
assets of the Trust not specified above in this Section shall be invested by the
Trustee in accordance with its fiduciary duties under ERISA and pursuant to the
Trust agreement; provided, that if an investment manager or other named
fiduciary has been appointed with respect to all or a portion of such assets,
the Trustee shall invest such portion as the investment manager or other named
fiduciary directs. The investment options available to Participants under the
Plan will include those investment companies registered under the Investment
Company Act of 1940, certificates of deposit, savings accounts and other
instruments issued by a bank or similar institution, or investment contracts and
other instruments issued by an insurance company and selected by the Company.
4.4. APPOINTMENT OF INVESTMENT MANAGER OR NAMED FIDUCIARY. The Company may
appoint in writing one or more investment managers or other "named fiduciaries"
(within the meaning of ERISA section 402(a)(2)) to manage the investment of all
or designated portions of the assets held in the Trust. The appointment shall be
effective upon acknowledgment in writing by the investment manager or other
named fiduciary that it is a fiduciary with respect to the Plan. An investment
manager must be (a) registered as an investment adviser under the Investment
Advisers Act of 1940, (b) a bank as defined in that Act, or (c) an insurance
company qualified under the laws of more than one state to manage, acquire or
dispose of any assets of the Plan.
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ARTICLE 5. VESTING OF ACCOUNTS
5.1. IMMEDIATE VESTING OF CERTAIN ACCOUNTS. A Participant will at all times
be 100% vested in his or her Elective Contribution Account, Seiler Transfer
Account, FDI Transfer Account, Qualified Nonelective Contribution Account,
After-Tax Contribution Account, and Rollover Contribution Account.
5.2. DEFERRED VESTING OF OTHER ACCOUNTS. Each Participant will have a
vested interest in a percentage of his or her Matching Contribution Account and
Retirement Contribution Account determined in accordance with the following
schedules and based on his or her Years of Service for Vesting:
(a) for periods prior to March 1, 1996,
Years of Service Applicable
for Vesting Percentage
---------------- ----------
fewer than 5 0%
5 or more 100%
(b) for all periods after February 29, 1996,
Years of Service Applicable
for Vesting Percentage
---------------- ----------
fewer than 3 0%
3 but fewer than 4 60%
4 but fewer than 5 80%
5 or more 100%
5.3. SPECIAL VESTING RULES. Notwithstanding any provision of the Plan to
the contrary, a Participant will be fully vested in 100% of the value of the
Accounts maintained for his or her benefit upon the happening of any one of the
following events:
(a) the Participant's attainment of the Normal Retirement Age
while an Employee;
(b) the Participant's becoming Disabled while an Employee;
(c) the Participant's death while an Employee;
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(d) the termination or partial termination of the Plan or the
complete cessation of contributions to the Plan, to the extent that
the Participant is affected by such termination, partial termination,
or complete discontinuance.
5.4. DISTRIBUTION OF LESS THAN ENTIRE VESTED PERCENTAGE. If a distribution
has been made to a Participant from his or her Matching Contribution Account or
Retirement Contribution Account at a time when he or she has a vested percentage
in such Account equal to less than 100%, a separate subaccount will be
established, to which will be allocated assets remaining in the Account
immediately after the distribution. At any relevant time after the distribution,
the Participant's vested percentage in such subaccount will be equal to
(P*(AB+D))-D, where P is the Participant's vested percentage at the relevant
time, AB is the Account balance at the relevant time, and D is the amount of the
distribution.
5.5. CHANGES IN VESTING SCHEDULE. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of a Participant's vested percentage (or if the Plan changes to
or from a top-heavy vesting schedule), each Participant who has completed 3
Years of Service for Vesting shall have his or her vested interest in the Plan
determined under the new schedule or the existing schedule, whichever is most
advantageous to the Participant.
5.6. FORFEITURES.
(a) IN GENERAL. Any portion of a Participant's Account in which
he or she is not vested upon separation from service for any reason
will be forfeited immediately. Any Participant who separates from the
service of the Affiliated Employers prior to earning a vested interest
in any of his or her Accounts shall be deemed to have received a
complete distribution of his or her vested interest on the day he or
she separates from service.
(b) CERTAIN RESTORATIONS. Notwithstanding the preceding
paragraph, if a Participant forfeits any portion of an Account as a
result of the complete distribution of the vested portion of the
Account but thereafter returns to the employ of an Affiliated Employer
prior to incurring a Substantial Severance, the amount forfeited will
be recredited to the Participant's Account. The Participant's vested
percentage in the amount so recredited will thereafter be determined
under the terms of the Plan as if no forfeiture had occurred. The
money required to effect the restoration of a Participant's Account
shall come from other Accounts forfeited during the Plan Year of
restoration, and to the extent such funds are inadequate, from a
special contribution by the Participant's Participating Employer.
(c) APPLICATION OF FORFEITURES. Any forfeitures occurring in a
Plan Year with respect to an Employee of a Participating Employer
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(i) first, will be applied to the restoration of any
Accounts of Employees of the Participating Employer as required
for such Year;
(ii) to the extent amounts remain after the application of
(i) above, any forfeitures from Matching Contribution Accounts
will be applied against the Participating Employer's Matching
Contributions for the Plan Year in which the forfeitures
occurred, and to the extent any forfeitures remain after such
application, they will be applied against the Participating
Employer's Retirement Contributions for such Plan Year. To the
extent any forfeitures remain after all such applications, they
will be applied against any Qualified Nonelective Contributions
by the Participating Employer for the Plan Year in which the
forfeitures occurred, and to the extent any such forfeitures
remain after such application, they will be allocated among the
Retirement Contributions of the remaining Participants who are
Eligible Employees of the Participating Employer on the last day
of the Plan Year in proportion to their relative amounts of
Compensation of the Plan Year; and
(iii) to the extent amounts remain after the application of
(i) above, any forfeitures from Retirement Contributions will be
allocated among the Retirement Contribution Accounts of the
remaining Participants of the Participating Employer who have
Retirement Contribution Accounts in proportion to the relative
value of such Account as compared to all Retirement Contribution
Accounts.
ARTICLE 6. WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE
6.1. HARDSHIP WITHDRAWALS.
(a) IMMEDIATE AND HEAVY FINANCIAL NEED. A Participant may make a
withdrawal from his or her Accounts in the event of an immediate and
heavy financial need arising from
(i) expenses for medical care described in Code section
213(d) previously incurred by the Participant, his or her spouse
or any of his or her dependents (as defined in Code section 152)
or necessary care for these persons to obtain such medical care;
(ii) costs directly related to the purchase of a principal
residence of the Participant (excluding mortgage payments);
(iii) the payment of tuition and related educational fees
for the next 12-months of post-secondary education for the
Participant, his or her spouse, children or dependents (as
defined in Code section 152); or
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(iv) payments necessary to prevent the eviction of the
Participant from his or her principal residence or foreclosure on
the mortgage on that principal residence.
The Administrator's determination of whether there is an immediate and
heavy financial need as defined above shall be made solely on the basis of
written evidence furnished by the Participant. Such evidence must also
indicate the amount of such need.
(b) DISTRIBUTION OF AMOUNT NECESSARY TO MEET NEED. As soon as
practicable after the Administrator's determination that an immediate
and heavy financial need exists with respect to the Participant and
that the Participant has obtained all other distributions (other than
hardship distributions) and all nontaxable loans currently available
under the Plan and all other plans maintained by the Affiliated
Employers, the Administrator will direct the Trustee to pay to the
Participant the amount necessary to meet the need created by the
hardship (but not in excess of the value of the vested portion of the
Participant's Accounts, determined as of the Valuation Date next
following the Administrator's determination). The amount necessary to
meet the need may include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably anticipated to
result from the distribution. Distribution from the Participant's
Accounts in the event of a hardship will be made in the following
order:
(i) from his or her Rollover Account,
(ii) from his or her Matching Contribution Account, and
(iii) from his or her Elective Contribution Account (provided
that no portion of an Elective Contribution Account attributable to
income earned after December 31, 1988 may be distributed due to a
financial hardship).
In no event may a hardship withdrawal be made from a Retirement Contribution
Account, a Qualified Nonelective Contribution Account, a Seiler Transfer
Account, or an FDI Transfer Account.
(c) EFFECT OF HARDSHIP DISTRIBUTION. If a Participant receives a
hardship distribution from his or her Elective Contribution Account, then
any Elective Contribution election (or any other cash- or-deferred or
employee contribution election in effect with respect to the Participant
under the Plan or any other qualified plan maintained by an Affiliated
Employer) shall be suspended for the 12- month period beginning with the
date of the hardship distribution, and the amount of Elective Contributions
made for the benefit of the Participant, together with any elective
deferrals made on behalf of the Participant under any other plan maintained
by the Affiliated Employers for the calendar year immediately following the
calendar year of the hardship distribution must not exceed the
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applicable limit under Code 402(g) for such next calendar year, less the
amount of such contributions made on behalf of the Participant for the
calendar year of the hardship distribution.
6.2. REQUIRED DISTRIBUTIONS AFTER AGE 70 1/2. Notwithstanding any provision
of the Plan to the contrary, the Accounts of a Participant who remains an
Employee after attaining his or her Required Beginning Date shall be treated as
follows:
(a) an amount equal to the value of the vested portion of the
Participant's Accounts (other than his or her Seiler Transfer Account) as
of the last day of the calendar year prior to the Required Beginning Date
shall be distributed not later than the April 1 next following the close of
such year;
(b) an amount equal to the value of the vested portion of the
Participant's Accounts (other than his or her Seiler Transfer Account) as
of the last day of any calendar year (a "distribution year") beginning with
the year of the Required Beginning Date shall be distributed no later than
the last day of the calendar year immediately following the distribution
year; and
(c) the portion of the Participant's Account, if any, which is
attributable to his or her Seiler Transfer Account shall be paid or
commence to be paid on the Required Beginning Date.
If the value of the vested portion of a Participant's Accounts as of the date of
distribution is less than the value otherwise to be distributed as described
above, such lesser value shall instead be distributed to the Participant. The
amounts required to be distributed for a distribution year under this Section
6.2 will be offset by any amounts withdrawn by the Participant during the year
under any other provision of the Plan.
6.3. RESTRICTIONS ON CERTAIN DISTRIBUTIONS. In the case of a Participant
whose Accounts are valued in excess of $3,500 and who has not yet attained the
Normal Retirement Age, no distribution may be made to the Participant under this
Article unless
(a) between the 30th and 90th day prior to the date distribution is to
be made, the Administrator notifies the Participant in writing that he or
she may defer distribution until the Normal Retirement Age and provides the
Participant with a written description of the material features and (if
applicable) the relative values of the forms of distribution available
under the Plan; and
(b) the Participant consents to the distribution in writing after the
information described above has been provided to him or her.
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Such distribution may commence less than 30 days after the notice required under
Regulations section 1.411(a)-11(c) is given, provided that:
(1) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution,
(2) the Participant, after receiving the notice, affirmatively
elects a distribution, and
(3) with respect to the payment of his or her Seiler Transfer
Account, payment does not begin until at least seven days after the
Participant receives any notice required by Code Section 417.
For purposes of this Section, a Participant's Accounts will be considered to be
valued in excess of $3,500 if the value of his or her Accounts exceeds such
amount at the time of the distribution in question or exceeded such amount at
the time of any prior distribution to (or withdrawal by) the Participant under
the Plan.
6.4. LIMITATION OF WITHDRAWABLE AMOUNT. If a promissory note with respect
to a loan made from the Plan is allocated to a Participant's Account, the amount
that may be withdrawn from the Account prior to the Participant's separation
from service shall be limited to the amount of cash in the Account at the time
of the withdrawal.
6.5. DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS ORDER. To the
extent required by a Qualified Domestic Relations Order, the Administrator shall
make distributions from a Participant's Accounts to any alternate payee named in
such order in a manner consistent with the distribution options otherwise
available under the Plan, regardless of whether the Participant is otherwise
entitled to a distribution at such time under the Plan.
6.6. CERTAIN DISPOSITIONS. Subject to the provisions in Section 8.2, in
connection with the disposition by a Participating Employer of at least 85-
percent of the assets used by the Participating Employer in a trade or business
to an unrelated corporation, or the disposition of a Participating Employer's
interest in a subsidiary to an unrelated entity, distribution of the entire
vested Account balance of an Employee who continues employment with the acquirer
may be made to the Employee in a single sum, but only if the acquirer does not
maintain the Plan after the disposition, and only if such distribution is
otherwise made in accordance with Code section 401(k)(10).
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6.7. WITHDRAWALS FROM AFTER-TAX CONTRIBUTION ACCOUNTS. A Participant for
whom an After-Tax Contribution Account is maintained may make a withdrawal from
such Account prior to age 59 1/2, with such prior notice as the Administrator
shall prescribe. Any such withdrawal shall be in the amount specified by the
Participant, and payment to the Participant shall be made as soon as practicable
after the request for withdrawal is received by the Administrator. The
Participant may make no more than one withdrawal under this Section in any
twelve-month period.
6.8. WITHDRAWALS AFTER AGE 59 1/2. A Participant who has attained age 59
1/2 may make a withdrawal from any one or more of his or her Accounts (other
than a Seiler Transfer Account) for any reason, but with such prior notice as
the Administrator may prescribe. Any such withdrawal shall be in the amount
specified by the Participant, up to the value of the Participant's vested
portion of the particular Account determined as of the Valuation Date next
following the Administrator's receipt of notice of the withdrawal. Payment to
the Participant shall be made as soon as practicable after such Valuation Date.
The Participant may make no more than one withdrawal under this Section 6.8
within any 6-month period.
6.9. DIRECT ROLLOVER OF WITHDRAWAL DISTRIBUTIONS. Effective January 1,
1993, if a Participant, a Beneficiary who is the Participant's surviving spouse,
or an alternate payee of the Participant is entitled to receive an eligible
rollover distribution within the meaning of Code section 402(c)(4), he may elect
to have all or a portion of such distribution (but not less than the minimum
amount required to be transferred under Treasury regulations pertaining to the
treatment of eligible rollover distributions) transferred directly to an
eligible retirement plan within the meaning of Code section 402(c)(8)(B). If the
distributee is the Participant's surviving spouse or a former spouse who is the
alternate payee under a qualified domestic relations order within the meaning of
Code section 414(p), the direct rollover may be made only to an individual
retirement account or an individual retirement annuity. Such distribution may be
made in the form of a direct rollover or by any other means prescribed by
regulations which satisfies the requirements for a direct payment to the
eligible retirement plan so specified. The Plan Administrator shall not be
obliged to honor any transfer instruction under this Section 6.9 that specifies
more than one transferee.
ARTICLE 7. LOANS TO PARTICIPANTS
7.1. EFFECTIVE DATE OF ARTICLE 7. The provisions of Article 7 shall become
operative only after the Board of Directors votes to make them effective and no
loans shall be made prior to such effective date.
7.2. IN GENERAL. Upon the written request of an Eligible Borrower on a form
acceptable to the Administrator, and subject to the conditions of this Article,
the Administrator shall direct the Trustee to make a loan from the Trust to the
Eligible Borrower. For purposes of this Article, an "Eligible Borrower" is
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(a) a Participant who is an Employee or is otherwise a "party in
interest" within the meaning of ERISA section 3(14); or
(b) a deceased Participant's Beneficiary who has not yet received the
entire vested portion of the Participant's Accounts and who is a "party in
interest" as described above.
An "Eligible Borrower" shall not include, however, any owner-employee or member
of the family (as defined in Code section 267(c)(4)) of an owner employee. An
"owner employee" shall mean an owner-employee as defined in Code section
401(c)(3), and shall include an employee or officer of an electing small
business (Subchapter S) corporation which is an Affiliated Employer who owns (or
is considered as owning within the meaning of Code section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the outstanding
stock of such corporation.
7.3. RULES AND PROCEDURES. The Administrator shall promulgate such rules
and procedure as it deems necessary to carry out the purposes of this Article
(including limitations on the purposes for which loans may be made), as long as
such procedures are not inconsistent with the express provisions of this
Article. All such rules and procedures shall be deemed a part of the Plan for
purposes of the Department of Labor regulation section 2550.408b- 1(d). Loans
shall not be made available to Eligible Borrowers who are Highly Compensated
Employees in an amount (determined under Department of Labor regulation section
2550.408b-1(b)) greater than the amount made available to other Eligible
Borrowers.
7.4. MAXIMUM AMOUNT OF LOAN. The following limitations shall apply in
determining the amount of any loan to an Eligible Borrower hereunder:
(a) The amount of the loan, together with any other outstanding
indebtedness of the Eligible Borrower under the Plan or any other qualified
retirement plans of the Affiliated Employers, shall not exceed $50,000
reduced by the excess of (i) the highest outstanding loan balance of the
Eligible Borrower from such plans during the one-year period ending on the
day prior to the date on which the loan is made, over (ii) the Eligible
Borrower's outstanding loan balance from such plans immediately prior to
the loan.
(b) The amount of the loan shall not exceed the lesser of (i) 50% of
the Eligible Borrower's vested interest in his or her Accounts (other than
a Retirement Contribution Account, Seiler Transfer Account or FDI Transfer
Account), determined as of the Valuation Date immediately preceding the
date of the loan, or (ii) the value of the Eligible Borrower's Elective
Contribution Account and Rollover Account (if any).
7.5. MINIMUM AMOUNT OF LOAN; MAXIMUM NUMBER OF LOANS. The Administrator may
establish a minimum amount for any single loan under the Plan, not to exceed
$1,000. An Eligible Borrower may have no more than two loans outstanding at any
one time.
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7.6. NOTE; SECURITY; INTEREST. Each loan shall be evidenced by a note
signed by the Eligible Borrower and shall be secured by 50% of the Eligible
Borrower's vested interest in his or her Accounts, including in such security
the note evidencing the loan. The loan shall bear interest at a reasonable
annual percentage interest rate to be determined by the Administrator. In
determining the interest rate, the Administrator shall take into consideration
interest rates currently being charged by persons in the business of lending
money with respect to loans made in similar circumstances. The Administrator
shall made such determination through consultation with one or more lending
institutions, as the Administrator deems appropriate.
7.7. SOURCE OF FUNDS FOR LOAN. The loan shall be made proportionately from
all investment funds to which the Eligible Borrower's Elective Contribution
Account, After-Tax Contribution Account (if any), and Rollover Account (if any)
are allocated.
7.8. REPAYMENT. Each loan made to an Eligible Borrower who is receiving
regular payments of compensation from a Participating Employer shall be
repayable by payroll deduction. Loans made to other Eligible Borrowers (and, in
all events, where payroll deduction is no longer practicable) shall be repayable
in such manner as the Administrator may from time to time determine. The
documents evidencing a loan shall provide that payments shall be made not less
frequently than quarterly and over a specified term as determined by the
Administrator (but not to exceed three years unless the loan amount equals
$5,000 or more and not exceed five years unless the loan is being applied toward
the purchase of a principal residence for the Eligible Borrower); such documents
shall also require that the loan be amortized with level payments of principal
and interest. The Eligible Borrower may designate the investment fund or funds
in which such loan repayments shall be made. The loan repayments shall be
reinvested in accordance with the Eligible Borrower's current (or most recent)
investment directions for contributions.
7.9. REPAYMENT UPON DISTRIBUTION. If, at the time benefits are to be
distributed (or to commence being distributed) to an Eligible Borrower with
respect to a separation from service, there remains any unpaid balance of a loan
hereunder, such unpaid balance shall, to the extent consistent with Department
of Labor regulations, become immediately due and payable in full. Such unpaid
balance, together with any accrued but unpaid interest on the loan, shall be
deducted from the Eligible Borrower's Accounts, subject to the default
provisions below, before any distribution of benefits is made. Except as may be
required in order to comply (in a manner consistent with continued qualification
of the Plan under Code section 401(a)) with Department of Labor regulations, no
loan shall be made or remain outstanding with respect to a Participant under
this Article after the time distributions to the Participant with respect to a
separation from service are to be paid or commence.
7.10. DEFAULT. In the event of a default in making any payment of principal
or interest when due under the note evidencing any loan under this Article, if
such default continues for more than 14 days after written notice of the default
from the Trustee (or from the Committee on behalf of the Trustee), the unpaid
principal balance of the note shall immediately become due and payable in full.
Such unpaid principal, together with any accrued but unpaid interest, shall
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thereupon be deducted from the Eligible Borrower's Accounts, subject to the
further provisions of this Section. The amount so deducted shall be treated as
distributed to the Eligible Borrower and applied by the Eligible Borrower as a
payment of the unpaid interest and principal (in that order) under the note
evidencing such loan. In no event shall the Administrator apply the Eligible
Borrower's Accounts to satisfy the Eligible Borrower's repayment obligation,
whether or not he or she is in default, unless the amount so applied otherwise
could be distributed in accordance with the Plan.
7.11. NOTE AS TRUST ASSET. The note evidencing a loan to an Eligible
Borrower under this Article shall be an asset of the Trust which is allocated to
the Account of such Eligible Borrower, and shall for purposes of the Plan be
deemed to have a value at any given time equal to the unpaid principal balance
of the note plus the amount of any accrued but unpaid interest.
7.12. NONDISCRIMINATION. Loans shall be made available under this Article
to all Eligible Borrowers on a reasonably equivalent basis, except that the
Administrator may make reasonable distinctions based on creditworthiness.
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE
8.1. SEPARATION FROM SERVICE FOR REASONS OTHER THAN DEATH. Subject to
Section 8.2, following a Participant's separation from the service of the
Affiliated Employers for any reason other than death, the Participant will
receive the vested portion of his or her Accounts in cash in a single sum. The
amount of the distribution shall be determined as of the Valuation Date that
immediately precedes or coincides with the date distribution is to be made as
described below.
8.2. PAYMENT OF SEILER TRANSFER ACCOUNT.
(a) ANNUITY AS NORMAL FORM OF PAYMENT. If a Participant has a Seiler
Transfer Account at the time of his or her separation from service, the
value of such Seiler Transfer Account shall be used to purchase a single
premium non-transferable annuity contract providing an annuity form of
payment (described in subsection (b) or (c) below) unless (with the consent
of his or her spouse, if married) he waives his or her right to an annuity
form of payment and elects to have such benefit paid in a lump sum. Such
Participant may elect to have all or part of the balance of his Accounts
under the Plan paid in the form of an annuity (described in subsection (b)
or (c) below) with the balance, if any, paid in a lump sum.
(b) SINGLE LIFE ANNUITY FOR UNMARRIED PARTICIPANT. If the Participant
is not married, the annuity described in subsection (a) above shall be a
single life annuity with an actuarial equivalent value equal to the Seiler
Transfer Account (or such larger amount with respect to which the
Participant has elected the annuity form of payment) under which the
Participant will receive a monthly annuity for life, the first payment to
be due on
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his or her Annuity Starting Date and the last payment to be due on the
first day of the calendar month in which his or her death occurs.
(c) JOINT AND SURVIVOR ANNUITY FOR MARRIED PARTICIPANT. If the
Participant is married, the annuity described in subsection (a) above shall
be a qualified joint and 50% survivor annuity under which a reduced monthly
pension is paid to the Participant and after the Participant's death, 50%
of the amount the Participant was receiving will be paid to the
Participant's surviving spouse and shall be the actuarial equivalent of the
Seiler Transfer Account (or such larger amount with respect to which the
Participant has elected the annuity form of payment). Any Participant whose
benefit payments are governed by this paragraph, may also elect (with
spousal consent, if married) to have all or a portion of the Seiler
Transfer Account payable in (a) a contingent annuitant form with the
Beneficiary receiving 50%, 66- 2/3% or 100% of the amount payable during
the Participant's lifetime, (b) a life annuity with a 120-months guarantee,
or (c) a lump sum.
(d) ANNUITY FORM FOR SEILER TRANSFER ACCOUNT. Any annuity form of
payment described in subsection (b) or (c) above will be provided through
an annuity contract purchased by the Plan for the benefit of the
Participant with the funds in the Seiler Transfer Account (together with
such other amounts as the Participant elects to have paid in the annuity
form). This optional form of payment shall not be available to any
Participant who does not have a Seiler Transfer Account at the time his or
her benefit under the Plan is to be distributed.
(e) ELECTION NOT TO TAKE 50% JOINT AND SURVIVOR ANNUITY. A married
Participant to whom this Section 8.2 applies may elect not to take the 50%
joint and survivor annuity described in subsection (c) above, any such
election to be made in writing on a form provided by the Administrator and
during the election period described in (i) below. Notwithstanding the
foregoing, however, no such election may be made unless (1) the
Participant's spouse consents to the election and acknowledges the effect
of such election, such consent and acknowledgment to be made in writing and
witnessed by either a notary public or a duly authorized representative of
the Administrator, or (2) it is established to the satisfaction of the
Administrator that spousal consent cannot be obtained because the
Participant has no spouse, because the spouse cannot be located, or because
of such other circumstances as the Secretary of the Treasury may prescribe.
Any consent by a spouse (or establishment that the consent of a spouse
cannot be obtained, shall be effective only with respect to such spouse.
(i) ELECTION PERIOD. The election period during which the married
Participant may elect not to take the 50% joint and survivor annuity
consists solely of the 90-day period ending on the Participant's
Annuity Starting Date.
(ii) PRELIMINARY INFORMATION TO BE FURNISHED TO A PARTICIPANT. On
or about the date specified below, the Administrator shall furnish to
each such married Participant (including a married Participant no
longer in the employ of a
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Participating Employer) a written notification, in nontechnical terms,
containing a general description of explanation of (A) the 50% joint
and survivor annuity described in subsection (b) above, (B) the
circumstances in which the 50% joint and survivor annuity will be
provided (unless the Participant has elected not to have benefits
provided in that form), (C) the availability of the election described
above (and of revocation of such election pursuant to subsection (f)
below, (D) the rights (if any), of the Participant's spouse under this
Section 8.2, and (E) the relative financial effect on the
Participant's annuity of making such an election. The foregoing
information shall be furnished within a reasonable period prior to the
close of the election period, as determined by the Administrator
consistent with applicable Treasury regulations if any.
(f) REVOCATION OF ELECTION NOT TO TAKE THE 50% JOINT AND SURVIVOR
ANNUITY. A Participant may revoke any election made by him or her
under subsection (e) above by filing a written revocation with the
Administrator any time during the election period described in
subsection (e)(i) above. Such revocation shall be effective upon
receipt by the Administrator. No such revocation shall prevent the
Participant from making a subsequent election under subsection (e)
during the election period described in subsection (e)(i) above.
8.3. TIME OF DISTRIBUTIONS.
Distribution with respect to a Participant's separation from service
normally will be made as soon as practicable after such separation. In the case
of a Participant whose vested portion of Accounts is valued in excess of $3,500
and who has not yet attained the Normal Retirement Age; provided, however,
distribution may not be made under this Section unless
(a) between the 30th and 90th day prior to the date distribution is to
be made, the Administrator notifies the Participant in writing that he or
she may defer distribution until the Normal Retirement Age; and
(b) the Participant consents to the distribution in writing after the
information described above has been provided to him or her, and files such
consent with the Administrator.
Such distribution may commence less than 30 days after the notice required under
Regulations section 1.411(a)-11(c) is given, provided that:
(1) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option),
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(2) the Participant, after receiving the notice, affirmatively
elects a distribution, and
(3) payment does not begin until at least seven days after the
Participant receives any notice required by Code Section 417.
The vested portion of a Participant's Accounts will be considered to be valued
in excess of $3,500 if the value of such portion exceeds such amount at the time
of the distribution in question or exceeded such amount at the time of any prior
distribution to the Participant under the Plan. Distribution under this Section
in all events will be made no later than the 60th day after the close of the
Plan Year in which occurs the later of the Participant's separation from service
or the Participant's attainment of the Normal Retirement Age (or 65 if earlier).
8.4. DISTRIBUTIONS AFTER A PARTICIPANT'S DEATH.
(a) DEATH PRIOR TO SEPARATION FROM SERVICE. Subject to subsection (c),
if a Participant dies prior to his or her separation from the service of
the Affiliated Employers, the Participant's Beneficiary will receive the
vested portion of the Participant's Accounts in cash in a single sum as
soon as practicable following the Participant's death, but in no event
later than December 31 of the calendar year following the year of the
Participant's death.
(b) DEATH AFTER SEPARATION FROM SERVICE. If a Participant dies after
separation from service but before the complete distribution of his or her
Accounts has been made, the Participant's Beneficiary will receive the
vested portion of the Participant's Accounts. Subject to subsection (c),
distribution will be made in cash in a single sum as soon as practicable
following the Participant's death, but no later than December 31 of the
calendar year following the year of the Participant's death.
(c) PAYMENT OF DEATH BENEFIT FROM SEILER TRANSFER ACCOUNT.
(i) If a married Participant on whose behalf a Seiler Transfer
Account is maintained dies before his or her Annuity Starting Date,
then 50% of the value of such Seiler Transfer Account will be used to
purchase a single premium non-transferable annuity contract providing
an annuity for the spouse. If the Participant so elects, all or a
portion of the balance of his Accounts may be added to the value of
the Seiler Transfer Account and used to purchase the annuity for the
surviving spouse.
(ii) Even if the benefits described herein are designated, or
required by law, to be paid as an annuity, the surviving spouse may
elect, at such time and in accordance with such procedures as the
Administrator may prescribe, to receive the benefit in a lump sum
payment.
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(iii) This Section 8.4(c) will not apply if the Participant so
elects in writing at any time subsequent to the first day of the Plan
Year in which he or she attains age 35 and prior to his or her death;
provided, however, that in the case of a Participant whose employment
terminates, the applicable election period with respect to benefits
accrued prior to the date of such termination will in no event
commence later than the date of such termination of employment. Any
such election may be revoked and remade any number of times in the
election period specified above, but no such election will be
effective unless the requirements of Section 8.2(e) are satisfied with
respect to such election. Within the Plan Year in which occurs the
later of (i) the date the Participant attains age 34, or (ii) the date
the Employee becomes a Participant, the Administrator will provide to
the Participant a written explanation with respect to the
preretirement survivor annuity described in this Section comparable to
that required under Section 8.2(e)(ii) above with respect to the
distribution of a Participant's benefit in the form of an annuity. If
earlier, however, such explanation will be provided within a year
following the Participant's termination of employment.
Any distribution to a Beneficiary under this Section 8.4 in the form of a single
sum shall be determined as of the Valuation Date immediately preceding or
coinciding with the date distribution is to be made.
8.5. DESIGNATION OF BENEFICIARY. Subject to the provisions of this Section,
a Participant's Beneficiary shall be the person or persons and entity or
entities, if any, designated by the Participant from time to time on a form
approved by the Administrator to receive all death benefits payable under the
Plan. In the absence of an effective beneficiary designation, a Participant's
Beneficiary shall be his or her surviving spouse, if any, or if none, the
Participant's estate. A nonspouse beneficiary designation by a Participant who
is married at the time of his or her death shall not be effective unless,
(a) prior to the Participant's death, the Participant's surviving
spouse consented to and acknowledged the effect of the Participant's
designation of a specific non-spouse Beneficiary (including any class of
Beneficiaries or any contingent Beneficiaries) on a written form approved
by the Administrator and witnessed by a notary public or a duly authorized
Plan representative; or
(b) it is established to the satisfaction of the Administrator that
spousal consent may not be obtained because there is no spouse, because the
spouse has died (evidenced by a certificate of death), because the spouse
cannot be located (based on information supplied by a government agency or
independent investigator), or because of such other circumstances as the
Secretary of the Treasury may prescribe; or
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(c) the spouse had earlier executed a general consent form permitting
the Participant (i) to select from among certain specified beneficiaries
without any requirement of further consent by the spouse (and the
Participant designates a Beneficiary from the specified list), or (ii) to
change his or her beneficiary without any requirement of further consent by
the spouse. Any such general consent shall be on a form approved by the
Administrator, and must acknowledge that the spouse has the right to limit
consent to a specific beneficiary and that the spouse voluntarily elects to
relinquish such right.
If a spouse is legally incompetent to give consent, the spouse's legal guardian,
even if the guardian is the Participant, may give consent on behalf of the
spouse. Any consent and acknowledgment by (or on behalf of) a spouse, or the
establishment that the consent and acknowledgment cannot be obtained, shall be
effective only with respect to such spouse, but shall be irrevocable once made.
With respect to all Participants who prior to March 1, 1996 were participants in
the Gardner Merchant Plan, any beneficiary designation that was effective under
the Gardner Merchant Plan as of February 29, 1996 shall remain effective until
the Participant files a new beneficiary designation hereunder.
8.6. DIRECT ROLLOVERS. Effective January 1, 1993, if a Participant, a
Beneficiary who is the Participant's surviving spouse, or an alternate payee of
the Participant is entitled to receive an eligible rollover distribution within
the meaning of Code section 402(c)(4), he may elect to have all or a portion of
such distribution (but not less than the minimum amount required to be
transferred under Treasury regulations pertaining to the treatment of eligible
rollover distributions) transferred directly to an eligible retirement plan
within the meaning of Code section 402(c)(8)(B). If the transferee is the
Participant's surviving spouse or a former spouse who is the alternate payee
under a qualified domestic relations order within the meaning of Code section
414(p), the direct rollover may be made only to an individual retirement account
or an individual retirement annuity. Such distribution may be made in the form
of a direct rollover or by any other means prescribed by regulations which
satisfies the requirements for a direct payment to the eligible retirement plan
so specified. The Plan Administrator shall not be obliged to honor any transfer
instruction under this Section 8.6 that specifies more than one transferee.
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ARTICLE 9. ADMINISTRATION
9.1. ADMINISTRATOR. The Plan will be administered by the Company. The
Administrator will be a "named fiduciary" for purposes of Section 402(a)(1) of
ERISA with authority to control and manage the operation and administration of
the Plan, and will be responsible for complying with all of the reporting and
disclosure requirements of Part 1 of Subtitle B of Title I of ERISA. The
Administrator will not, however, have any authority over the investment of
assets of the Trust in its capacity as Administrator.
9.2. POWERS OF ADMINISTRATOR. The Administrator will have full
discretionary power to administer the Plan in all of its details, subject,
however, to the requirements of ERISA. For this purpose the Administrator's
discretionary power will include, but will not be limited to, the following
authority:
(a) to make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan or
required to comply with applicable law;
(b) to interpret the Plan;
(c) to decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan;
(d) to compute the amounts to be distributed under the Plan, and to
determine the person or persons to whom such amounts will be distributed;
(e) to authorize the payment of distributions;
(f) to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required under
the Code and applicable regulations, or under other federal, state or local
law and regulations;
(g) to allocate and delegate its ministerial duties and
responsibilities and to appoint such agents, counsel, accountants and
consultants as may be required or desired to assist in administering the
Plan;
(h) by written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with ERISA section 405; and
(i) to the extent delegated by the Board of Directors, to amend the
Plan.
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9.3. EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation of the
Plan or other determination with respect to the Plan by the Administrator shall
be final and conclusive on all persons in the absence of clear and convincing
evidence that the Administrator acted arbitrarily and capriciously.
9.4. NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.
9.5. RELIANCE ON TABLES, ETC. In administering the Plan, the Administrator
will be entitled, to the extent permitted by law, to rely conclusively on all
tables, valuations, certificates, opinions and reports which are furnished by
any accountant, trustee, counsel or other expert who is employed or engaged by
the Administrator or by the Company on the Administrator's behalf.
9.6. CLAIMS AND REVIEW PROCEDURES. The Administrator shall adopt procedures
for the filing and review of claims in accordance with ERISA section 503.
9.7. INDEMNIFICATION OF ADMINISTRATOR AND ASSISTANTS. Each Participating
Employer agrees, jointly and severally, to indemnify and defend to the fullest
extent of the law any Employee or former Employee (a) who serves or has served
as Administrator, (b) who has been appointed to assist the Administrator in
administering the Plan, or (c) to whom the Administrator has delegated any of
its duties or responsibilities against any liabilities, damages, costs and
expenses (including attorneys' fees and amounts paid in settlement of any claims
approved by the Company) occasioned by any act or omission to act in connection
with the Plan, if such act or omission to act is in good faith.
ARTICLE 10. AMENDMENT AND TERMINATION
10.1. AMENDMENT. The Company reserves the power to amend the provisions of
the Plan and Trust by action of the Board of Directors or of a duly authorized
officer. Such amendment shall be by written instrument and shall be signed by a
duly authorized officer providing for such amendment. However, the Company will
not have the power:
(a) to amend the Plan or Trust in such manner as would cause or permit
any part of the assets of the Trust to be diverted to purposes other than
for the exclusive benefit of each Participant and his or her Beneficiary
(except as permitted by the Plan with respect to Qualified Domestic
Relations Orders or the return of contributions upon nondeductibility,
mistake of fact, or the failure to qualify initially), unless such
amendment is required or permitted by law, governmental regulation or
ruling; or
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(b to amend the Plan or Trust retroactively in such a manner as would
reduce the accrued benefit of any Participant, except as otherwise
permitted or required by law. For purposes of this paragraph, an amendment
which has the effect of decreasing a Participant's Account balance or
eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be treated as reducing
an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of
the date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
Account balance will not be less than the percentage computed under the
Plan without regard to such amendment.
The Board of Directors may delegate to the Investment Committee the power to
amend the Plan and to the extent the board so delegates, the Investment
Committee shall have the power to amend the Plan subject to the limitations in
this Section 10.1.
10.2. TERMINATION. The Company has established the Plan and authorized the
establishment of the Trust with the bona fide intention and expectation that
contributions will be continued indefinitely, but may discontinue contributions
under the Plan or terminate the Plan at any time by written notice delivered to
the Trustee without liability whatsoever for any such discontinuance or
termination. In addition, the Participating Employers will have no obligation or
liability whatsoever to maintain the Plan for any given length of time and may
cease to be Participating Employers in a manner acceptable to the Company.
10.3. DISTRIBUTIONS UPON TERMINATION OF THE PLAN. Subject to Section 8.6
and to the last sentence of this Section 10.3, upon termination of the Plan by
the Company, the Trustee will distribute to each Participant (or other person
entitled to distribution) the value of the Participant's Accounts in a single
sum as soon as practicable following such termination. The amount of such
distribution shall be determined as of the Valuation Date immediately preceding
or coinciding with the date distribution is to be made. Notwithstanding the
preceding sentence, if any Affiliated Employer maintains or establishes a
defined contribution plan (other than an employee stock ownership plan or
simplified employee pension) that benefits at least 2- percent of the employees
in the terminated Plan, Accounts shall be distributed to Participants and their
Beneficiaries only in a manner consistent with Code sections 401(k)(2)(B)(i)(I),
(III) and (IV), and 401(k)(10)(A)(ii) and (iii). In such case, a Participant's
Accounts will be transferred, without the Participant's consent, to the other
plan pending distribution. Any Seiler Transfer Account shall be paid in
accordance with Section 8.2 as the Participant shall elect unless the amount in
such Account is too small to purchase an annuity under the then underwriting
standards of the insurance carrier from whom such annuities would be purchased.
10.4. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In case of
any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other plan, provision must be made so that each
Participant would, if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to or
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greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer if the Plan had then
terminated.
ARTICLE 11. LIMITS ON CONTRIBUTIONS
11.1. CODE SECTION 404 LIMITS. The sum of the contributions made by each
Participating Employer under the Plan for any Plan Year shall not exceed the
maximum amount deductible under the applicable provisions of the Code. All
contributions under the Plan made by a Participating Employer are expressly
conditioned on their deductibility under Code section 404 for the taxable year
when paid (or treated as paid under Code section 404(a)(6).
11.2. CODE SECTION 415 LIMITS.
(a Incorporation by reference. Code section 415 is hereby incorporated
by reference into the Plan.
(b Annual addition. The Administrator shall determine an "annual
addition" for each Participant for each limitation year, which shall
consist of the following amounts allocated to the Participant's Accounts
for the year:
(i Elective Contributions,
(ii Qualified Nonelective Contributions,
(iii Matching Contributions,
(iv Retirement Contributions,
(v Forfeitures,
(vi Amounts allocated to an individual medical amount (as defined
in Code section 415(l)(2)) which is part of a pension or annuity plan
maintained by an Affiliated Employer; and
(vii Amounts derived from contributions paid or accrued which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code section
419A(d)(3)) under a welfare benefit fund (as defined in Code section
419(e)) maintained by an Affiliated Employer.
(c General limitation on annual additions. The annual addition to a
Participant's Accounts under the Plan for any limitation year, when added
to the annual additions to his or her accounts for such Year under all
other defined contribution plans maintained by the Affiliated Employers,
shall not exceed the lesser of (i) $30,000 (or, if
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greater, one-fourth of the limitation in effect for the limitation year
under Code section 415(b)(1)(A)), or (ii) 25% of the Participant's
Compensation for such limitation year.
(d Combined limitations. In the case of a Participant who also
participates in a defined benefit plan maintained by an Affiliated
Employer, the annual addition for a limitation year will, if necessary, be
further limited so that the sum of the Participant's defined contribution
fraction and his or her defined benefit plan fraction for such limitation
year does not exceed 1.0.
(i A Participant's "defined contribution fraction" shall be a
fraction, the numerator of which is the sum of the annual additions to
the Participant's accounts under all the defined contribution plans
(whether or not terminated) maintained by an Affiliated Employer for
the current and all prior limitation years (including the annual
additions attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by an Affiliated Employer, and the annual additions
attributable to all welfare benefit funds, as defined in section
419(e) of the Code, and individual medical accounts, as defined in
section 415(l)(2) of the Code, maintained by an Affiliated Employer),
and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior limitation years of service with
the Affiliated Employers (regardless of whether a defined contribution
plan was maintained by an Affiliated Employer). The maximum aggregate
amount in any limitation year is the lesser of 125-percent of the
dollar limitation determined under Code sections 415(b) and (d) in
effect under Code section 415(c)(1)(A) or 35-percent of the
Participant's Compensation for such year. If the employee was a
Participant as of the end of the first day of the first limitation
year beginning after December 31, 1986, in one or more defined
contribution plans maintained by an Affiliated Employer which were in
existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this plan. Under the
adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last limitation year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the section
415 limitation applicable to the first limitation year beginning on or
after January 1, 1987. The annual addition for any limitation year
beginning before January 1, 1987, shall not be recomputed to treat all
employee contributions as annual additions.
(ii A Participant's "defined benefit fraction" shall be a
fraction, the numerator of which is the sum of the Participant's
projected annual benefits under
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all the defined benefit plans (whether or not terminated) maintained
by an Affiliated Employer, and the denominator of which is the lesser
of 125- percent of the dollar limitation determined for the limitation
year under Code sections 415(b) and (d) or 140-percent of the highest
average compensation, including any adjustments under Code section
415(b). Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by an Affiliated Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125-
percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last limitation year
beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans individually and in
the aggregate satisfied the requirements of Code section 415 for all
limitation years beginning before January 1, 1987.
(e Limitation Year. For purposes of determining the Code section 415
limits under the Plan, the "limitation year" shall be the Plan Year.
(f To the extent necessary to satisfy the limitations of Code section
415 for any Participant, the annual addition which would otherwise be made
on behalf of the Participant under the Plan shall be reduced after the
Participant's benefit is reduced under any and all defined benefit plans,
and before the Participant's annual addition is reduced under any other
defined contribution plan.
(g If, as a result of the allocation of forfeitures, a reasonable
error in estimating a Participant's compensation for a Plan Year or
limitation year, a reasonable error in determining the amount of elective
deferrals (within the meaning of Code section 402(g)(3)) that may be made
with respect to any individual under the limits of Code section 415, or
under such other facts and circumstances as may be permitted under
regulation or by the Internal Revenue Service, the annual addition under
the Plan for a Participant would cause the Code section 415 limitations for
a limitation year to be exceeded, any Elective Contributions made pursuant
to a Contribution Agreement together with earnings thereon made by or on
behalf of the Participant for the Limitation Year, to the extent necessary,
will be returned to the Participant. Any contributions so returned will be
disregarded for purposes of the limits under Code sections 402(g) and
401(k)(3). If the remaining annual addition for the Participant still
exceeds the Code section 415 limits for the limitation year, Qualified
Nonelective Contributions followed by Retirement Contributions, followed by
Matching Contributions (including forfeitures applied to reduce any such
Participating Employer contributions), together with earnings thereon, will
not be allocated to the Participant's Account to the extent necessary for
limitation year, but will be used to reduce Participating Employer
contributions for the next limitation year (and succeeding limitation
years, as necessary) for that Participant if
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the Participant is covered by the Plan as of the end of the limitation
year. However, if the Participant is not covered by the Plan as of the end
of the limitation year, the excess amounts will not be distributed to
Participants or former Participants, but will be held unallocated for that
limitation year in a suspense account. If the suspense account is in
existence at any time during any subsequent limitation year, all amounts in
the suspense account will be allocated to the Retirement Contribution
Accounts of all Participants in proportion to their relative amounts of
Compensation for the subsequent limitation year, before any other
contributions which would be part of an annual addition are made to the
Plan for the subsequent limitation year. No investment gains or losses will
be allocated to any suspense account described in this paragraph; instead,
any such gains or losses shall be allocated among the remaining Accounts in
proportion to their respective balances.
11.3. CODE SECTION 402(G) LIMITS.
(a In general. The maximum amount of Elective Contributions made on
behalf of any Participant for any calendar year, when added to the amount
of elective deferrals under all other plans, contracts and arrangements of
an Affiliated Employer with respect to the Participant for the calendar
year), shall in no event exceed the maximum applicable limit in effect for
the calendar year under Regulation section 1.402(g)-1(d). For purposes of
the Plan, an individual's elective deferrals for a taxable year are the sum
of the following:
(i Any elective contribution under a qualified cash or deferred
arrangement (as defined in Code section 401(k)) to the extent not
includable in the individual's gross income for the taxable year on
account of Code section 402(a)(8) (before applying the limits of Code
section 402(g) or this section);
(ii Any employer contribution to a simplified employee pension
(as defined in code section 408(k)) to the extent not includable in
the individual's gross income for the taxable year on account of Code
section 402(h)(1)(B) (before applying the limits of Code section
402(g));
(iii Any employer contribution to a custodial account or annuity
contract described in section 403(b) under a salary reduction
agreement (within the meaning of Code section 3121(a)(5)(D)), and any
elective contribution pursuant to an eligible deferred compensation
plan under Code section 457, to the extent not includable in the
individual's gross income for the taxable year on account of Code
section 403(b) or 457 before applying the limits of Code section
402(g); and
(iv Any employee contribution designated as deductible under a
trust described in Code section 501(c)(19) (before applying the limits
of Code section 402(g)).
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A Participant will be considered to have made "excess deferrals" for a taxable
year to the extent that the Participant's elective deferrals for the taxable
year exceed the applicable limit described above for the year.
(b DISTRIBUTION OF EXCESS DEFERRALS. In the event that an amount is
included in a Participant's gross income for a taxable year as a result of
an excess deferral under Code section 402(g), and the Participant notifies
the Administrator on or before the March 1 following the taxable year that
all or a specified part of an Elective Contribution made for his or her
benefit represents an excess deferral, the Administrator shall make every
reasonable effort to cause such excess deferral, adjusted for allocable
income, to be distributed to the Participant no later than the April 15
following the calendar year in which such excess deferral was made. The
income allocable to excess deferrals is equal to the allocable gain or loss
for the taxable year of the individual, but not the allocable gain or loss
for the period between the end of the taxable year and the date of
distribution (the "gap period"). Income allocable to excess deferrals for
the taxable year shall be determined by multiplying the gain or loss
attributable to the Participant's Elective Contribution Account for the
taxable year by a fraction, the numerator of which is the Participant's
excess deferrals for the taxable year, and the denominator of which is the
sum of the Participant's Elective Contribution Account balance as of the
beginning of the taxable year plus the Participant's Elective Contributions
for the taxable year. No distribution of an excess deferral shall be made
during the taxable year of a Participant in which the excess deferral was
made unless the correcting distribution is made after the date on which the
Plan received the excess deferral and both the Participant and the Plan
designates the distribution as a distribution of an excess deferral. The
amount of any excess deferrals that may be distributed to a Participant for
a taxable year shall be reduced by the amount of Elective Contributions
that were excess contributions and were previously distributed to the
Participant for the Plan Year beginning with or within such taxable year.
(c) TREATMENT OF EXCESS DEFERRALS. For other purposes of the Code,
including Code sections 401(a)(4), 401(k)(3), 404, 409, 411, 412, and 416),
excess deferrals must be treated as employer contributions even if they are
distributed in accordance with paragraph (b) above. However, excess
deferrals of a non-Highly Compensated Employee are not to be taken into
account for purposes of Code section 401(k)(3) (the actual deferral
percentage test) to the extent the excess deferrals are prohibited under
Code section 401(a)(30). Excess deferrals are also to be treated as
employer contributions for purposes of Code section 415 unless distributed
under paragraph (b) above.
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11.4. CODE SECTION 401(K)(3) LIMITS.
(a In general. Elective Contributions made under the Plan are subject
to the limits of Code section 401(k)(3), as more fully described below. The
Plan provisions relating to the 401(k)(3) limits are to be interpreted and
applied in accordance with Code sections 401(k)(3) and 401(a)(4), which are
hereby incorporated by reference, and in such manner as to satisfy such
other requirements relating to Code section 401(k) as may be prescribed by
the Secretary of the Treasury from time to time.
(b Actual deferral ratios. For each Plan Year, the Administrator will
determine the "actual deferral ratio" for each Participant who is eligible
for Elective Contributions. The actual deferral ratio shall be the ratio,
calculated to the nearest one-hundredth of one percent, of the Elective
Contributions (plus any Qualified Nonelective Contributions treated as
Elective Contributions) made on behalf of the Participant for the Plan Year
to the Participant's Compensation for the applicable period. For purposes
of determining a Participant's actual deferral ratio,
(i Elective Contributions will be taken into account only if each
of the following requirements are satisfied:
(A the Elective Contribution is allocated to the
Participant's Elective Contribution Account as of a date within
the Plan Year, is not contingent upon participation in the Plan
or performance of services on any date subsequent to that date,
and is actually paid to the Trust no later than the end of the
12-month period immediately following the Plan Year to which the
contribution relates; and
(B the Elective Contribution relates to Compensation that
either would have been received by the Participant in the Plan
Year but for the Participant's election to defer under the Plan,
or is attributable for services performed in the Plan Year and,
but for the Participant's election to defer, would have been
received by the Participant within 2 1/2 months after the close
of the Plan Year.
To the extent Elective Contributions which meet the requirements
of (A) and (B) above constitute excess deferrals, they will be
taken into account for each Highly Compensated Employee, but will
not be taken into account for any non-Highly Compensated
Employee;
(ii in the case of a Participant who is a Highly Compensated
Employee for the Plan Year and is eligible to have elective deferrals
(and qualified nonelective or qualified matching contributions, to the
extent treated as elective deferrals) allocated to his or her accounts
under two or more cash or deferred
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arrangements described in Code section 401(k) maintained by an
Affiliated Employer, the Participant's actual deferral ratio shall be
determined as if such elective deferrals (as well as qualified
nonelective or qualified matching contributions) are made under a
single arrangement, and if two or more of the cash or deferred
arrangements have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall be
treated as a single arrangement;
(iii for purposes of determining the actual deferral ratio of a
Participant who is a 5-percent owner or one of the 10 most highly paid
Highly Compensated Employees, the Elective Contributions (and any
Qualified Nonelective Contributions treated as Elective Contributions)
and Compensation of such Participant shall include the Elective
Contributions (and Qualified Nonelective Contributions treated as
Elective Contributions) and Compensation for the Plan Year of the
Participant's family members (as defined in Code section 414(q)(6)),
such family members shall be disregarded as separate employees for
purposes of determining the actual deferral ratio of both Highly
Compensated Employees and non- Highly Compensated Employees, and in
the event that there are excess contributions with respect to such
family members, the excess shall be allocated among such family
members in proportion to their Elective Contributions;
(iv the applicable period for determining Compensation for each
Participant for a Plan Year shall be the 12-month period ending on the
last day of such Plan Year; provided, that to the extent permitted
under Regulations, the Administrator may choose, on a uniform basis,
to treat as the applicable period only that portion of the Plan Year
during which the individual was a Participant;
(v Qualified Nonelective Contributions made on behalf of
Participants who are eligible to receive Elective Contributions shall
be treated as Elective Contributions to the extent permitted by
Regulation section 1.401(k) 1(b)(5);
(vi in the event that the Plan satisfies the requirements of Code
sections 401(k), 410(a)(4), or 410(b) only if aggregated with one or
more other plans with the same plan year, or if one or more other
plans with the same Plan Year satisfy such Code sections only if
aggregated with this Plan, this section shall be applied by
determining the actual deferral ratios as if all such plans were a
single plan;
(vii an employee who would be a Participant but for the failure
to make Elective Contributions shall be treated as a Participant on
whose behalf no Elective Contributions are made; and
(viii Elective Contributions which are made on behalf of
non-Highly Compensated Employees which could be used to satisfy the
Code section
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401(k)(3) limits but are not necessary to be taken into account in
order to satisfy such limits, may instead be taken into account for
purposes of the Code section 401(m) limits to the extent permitted by
Regulation section 1.401(m)-1(b)(5).
(c Actual deferral percentages. The actual deferral ratios for all
Highly Compensated Employees who are eligible for Elective Contributions
for a Plan Year shall be averaged to determine the actual deferral
percentage for the highly compensated group for the Plan Year, and the
actual deferral ratios for all Employees who are not Highly Compensated
Employees but are eligible for Elective Contributions for the Plan Year
shall be averaged to determine the actual deferral percentage for the
nonhighly compensated group for the Plan Year. The actual deferral
percentages for any Plan Year must satisfy at least one of the following
tests:
(i the actual deferral percentage for the highly compensated
group does not exceed 125% of the actual deferral percentage for the
nonhighly compensated group; or
(ii the excess of the actual deferral percentage for the highly
compensated group over the actual deferral percentage for the
nonhighly compensated group does not exceed two percentage points, and
the actual deferral percentage for the highly compensated group does
not exceed twice the actual deferral percentage of the nonhighly
compensated group.
(d Adjustments by Administrator. If, prior to the time all Elective
Contributions for a Plan Year have been contributed to the Trust, the
Administrator determines that Elective Contributions are being made at a
rate which will cause the Code section 401(k)(3) limits to be exceeded for
the Plan Year, the Administrator may, in its sole discretion, limit the
amount of Elective Contributions to be made with respect to one or more
Highly Compensated Employees for the balance of the Plan Year by suspending
or reducing Elective Contribution elections to the extent the Administrator
deems appropriate. Any Elective Contributions which would otherwise be made
to the Trust shall instead be paid to the affected Participant in cash.
(e Excess contributions. If the Code section 401(k)(3) limits have not
been met for a Plan Year after all contributions for the Plan Year have
been made, the Administrator will determine the amount of excess
contributions with respect to Participants who are Highly Compensated
Employees. To do so, the Administrator will reduce the actual deferral
ratio of the Highly Compensated Employee with the highest actual deferral
ratio to the extent necessary to (i) enable the Plan to satisfy the section
401(k)(3) limits or (ii) cause such employee's actual deferral ratio to
equal the actual deferral ratio of the Highly Compensated Employee with the
next highest actual deferral ratio, and will repeat this process until the
Plan satisfies the Code section 401(k)(3) limits. The amount of excess
contributions for each Highly Compensated Employee for the Plan
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Year shall equal the amount of Elective Contributions (plus Qualified
Nonelective Contributions which are treated as Elective Contributions for
purposes of the Code section 401(k)(3) limits) actually made to the Trust
for the Plan Year, less the product of the Highly Compensated Employee's
reduced actual deferral ratio as determined under the preceding sentence,
and his or her Compensation. Any excess contributions will be distributed
as provided below. In no event will excess contributions remain unallocated
or be allocated to a suspense account for allocation in a future Plan Year.
(f Distribution of excess contributions. A Participant's excess
contributions, adjusted for income, will be designated by the Participating
Employer as a distribution of excess contributions and distributed to the
Participant. The income allocable to excess contributions is equal to the
allocable gain or loss for the Plan Year, but not the allocable gain or
loss for the period between the end of the Plan Year and the date of
distribution (the "gap period"). Income allocable to excess contributions
for the Plan Year shall be determined by multiplying the gain or loss
attributable to the Participant's Elective Contribution Account and
Qualified Nonelective Contribution Account balances by a fraction, the
numerator of which is the excess contributions for the Participant for the
Plan Year, and the denominator of which is the sum of the Participant's
Elective Contribution Account and Qualified Nonelective Contribution
Account balances as of the beginning of the Plan Year plus the
Participant's Elective Contributions and Qualified Nonelective
Contributions for the Plan Year. Distribution of excess contributions will
be made after the close of the Plan Year to which the contributions relate,
but within 12 months after the close of such Plan Year. Excess
contributions shall be treated as annual additions under the Plan, even if
distributed under this paragraph.
(g Special rules. For purposes of distributing excess contributions,
(i the amount of excess contributions that may be distributed
with respect to a Highly Compensated Employee for a Plan Year shall be
reduced by the amount of excess deferrals previously distributed to
the Highly Compensated Employee for his or her taxable year ending
with or within such Plan Year.
(ii The determination and correction of excess contributions with
respect to a Highly Compensated Employee whose actual deferral ratio
is determined pursuant to the family aggregation rules will be
accomplished by reducing the actual deferral ratio as required above
and allocating the excess contributions for the family group among
family members in proportion to the Elective Contribution of each
family member that is combined to determine the actual deferral ratio.
(h Recordkeeping requirement. The Administrator, on behalf of the
Participating Employers, shall maintain such records as are necessary to
demonstrate
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compliance with the Code section 401(k)(3) limits including the extent to
which Qualified Nonelective Contributions are taken into account in
determining the actual deferral ratios.
(i Effect on Matching Contributions. A Participant's Elective
Contributions which are returned as a result of the Code section 401(k)(3)
limits for a Plan Year shall not be taken into account in determining the
amount of Matching Contributions to be made for the Participant's benefit
for the Year. To the extent Matching Contributions have already been made
with respect to the Elective Contributions at the time the Elective
Contributions are determined to be excess contributions, such Matching
Contributions shall be distributed to the Participant at the same time as
the Elective Contributions are returned or recharacterized.
(j Excise tax where failure to correct. If the excess contributions
are not corrected within 2 1/2 months after the close of the Plan Year to
which they relate, the Participating Employers will be liable for a
10-percent excise tax on the amount of excess contributions attributable to
them, to the extent provided by Code section 4979. Qualified Nonelective
Contributions properly taken into account under this Section for the Plan
Year may enable the Plan to avoid having excess contributions, even if the
contributions are made after the close of the 2 1/2-month period.
11.5. CODE SECTION 401(M) LIMITS.
(a In general. Matching Contributions made under the Plan are subject
to the limits of Code section 401(m), as more fully described below. The
Plan provisions relating to the 401(m) limits are to be interpreted and
applied in accordance with Code sections 401(m) and 401(a)(4), which are
hereby incorporated by reference, and in such manner as to satisfy such
other requirements relating to Code section 401(m) as may be prescribed by
the Secretary of the Treasury from time to time.
(b Actual contribution ratios. For each Plan Year, the Administrator
will determine the "actual contribution ratio" for each Participant who is
eligible for Matching Contributions. The actual contribution ratio shall be
the ratio, calculated to the nearest one-hundredth of one percent, of the
sum of the Matching Contributions and Qualified Nonelective Contributions
which are not treated as Elective Contributions made on behalf of the
Participant for the Plan Year, to the Participant's Compensation for the
Plan Year. For purposes of determining a Participant's actual contribution
ratio,
(i A Matching Contribution will be taken into account only if the
Contribution is allocated to a Participant's Account as of a date
within the Plan Year, is actually paid to the Trust no later than 12
months after the close of the Plan Year, and is made on behalf of a
Participant on account of the Participant's Elective Contributions for
the Plan Year;
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(ii for purposes of determining the actual contribution ratio of
a Participant who is a 5-percent owner or one of the 10 most highly
paid Highly Compensated Employees, the Matching Contributions and
Compensation of such Participant shall include the Matching
Contributions, Qualified Nonelective Contributions treated as Matching
Contributions, and Compensation for the Plan Year of the Participant's
family members (as defined in Code section 414(q)(6)), and such family
members shall be disregarded as separate employees for purposes of
determining the actual contribution ratio of both Highly Compensated
Employees and non-Highly Compensated Employees;
(iii in the case of a Participant who is a Highly Compensated
Employee for the Plan Year and is eligible to have matching
contributions or employee contributions (including amount treated as
matching contributions) allocated to his or her accounts under two or
more plans maintained by an Affiliated Employer which may be
aggregated for purposes of Code sections 410(b) and 401(a)(4), the
Participant's actual contribution ratio shall be determined as if such
contributions were made under a single plan, and if two or more of the
plans have different Plan Years, all plans ending with or within the
same calendar year shall be treated as a single plan;
(iv the applicable period for determining Compensation for each
Participant for a Plan Year shall be the 12-month period ending on the
last day of such Plan Year; provided, that to the extent permitted
under Regulations, the Administrator may choose, on a uniform basis,
to treat as the applicable period only that portion of the Plan Year
during which the individual was a Participant;
(v Elective Contributions not applied to satisfy the Code section
401(k)(3) limits and Qualified Nonelective Contributions not treated
as Elective Contributions may be treated as Matching Contributions to
the extent permitted by Regulation section 1.401(m)-1(b)(5);
(vi in the event that the Plan satisfies the requirements of Code
sections 401(k), 410(a)(4), or 410(b) only if aggregated with one or
more other plans with the same plan year, or if one or more other
plans with the same Plan Year satisfy such Code sections only if
aggregated with this Plan, then this section shall be applied by
determining the actual deferral ratios as if all such plans were a
single plan;
(c Actual contribution percentages. The actual contribution ratios for
all Highly Compensated Employees who are eligible for Matching
Contributions for a Plan Year shall be averaged to determine the actual
contribution percentage for the highly compensated group for the Plan Year,
and the actual contribution ratios for all Employees
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who are not Highly Compensated Employees but are eligible for Matching
Contributions for the Plan Year shall be averaged to determine the actual
contribution percentage for the nonhighly compensated group for the Plan
Year. The actual contribution percentages for any Plan Year must satisfy at
least one of the following tests:
(i The actual contribution percentage for the highly compensated
group does not exceed 125% of the actual contribution percentage for
the nonhighly compensated group; or
(ii The excess of the actual contribution percentage for the
highly compensated group over the actual contribution percentage for
the nonhighly compensated group does not exceed two percentage points,
and the actual contribution percentage for the highly compensated
group does not exceed twice the actual contribution percentage of the
nonhighly compensated group.
(d Multiple use test. In the event that (i) the actual deferral
percentage and actual contribution percentage for the highly compensated
group each exceed 125% of the respective actual deferral and actual
contribution percentages for the nonhighly compensated group, and (ii) the
sum of the actual deferral percentage and the actual contribution
percentage for the highly compensated group exceeds the "aggregate limit"
within the meaning of Regulation section 1.401(m)-2(b)(3), the
Administrator shall reduce the actual contribution ratios of Highly
Compensated Employees who had both an actual deferral ratio and an actual
contribution ratio for the Plan Year to the extent required by such section
and in the same manner as described in paragraph (f) below.
(e Adjustments by Administrator. If, prior to the time all Matching
Contributions for a Plan Year have been contributed to the Trust, the
Administrator determines that such Contributions are being made at a rate
which will cause the Code section 401(m) limits to be exceeded for the Plan
Year, the Administrator may, in its sole discretion, limit the amount of
such Contributions to be made with respect to one or more Highly
Compensated Employees for the balance of the Plan Year by limiting the
amount of such Contributions to the extent the Administrator deems
appropriate.
(f Excess aggregate contributions. If the Code section 401(m) limits
have not been satisfied for a Plan Year after all contributions for the
Plan Year have been made, the excess of the aggregate amount of the
Matching Contributions (and any Qualified Nonelective Contribution or
Elective Contribution taken into account in computing the actual
contribution percentages) actually made on behalf of Highly Compensated
Employees for the Plan Year over the maximum amount of such contributions
permitted under Code section 401(m)(2)(A) shall be considered to be "excess
aggregate contributions". The Administrator shall determine the amount of
excess aggregate contributions made with respect to each Participant who is
a Highly Compensated Employee. To do so, the Administrator will reduce the
actual contribution ratio of the
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Highly Compensated Employee with the highest actual contribution ratio to
the extent necessary to (i) enable the Plan to satisfy the section 401(m)
limits or (ii) cause such employee's actual contribution ratio to equal the
actual contribution ratio of the Highly Compensated Employee with the next
highest actual contribution ratio, and will repeat this process until the
Plan satisfies the Code section 401(m) limits. The amount of excess
aggregate contributions for each Highly Compensated Employee for the Plan
Year shall equal the amount of Matching Contributions (plus Elective
Contributions and Qualified Nonelective Contributions for purposes of the
Code section 401(m) limits) actually made to the Trust for the Plan Year,
less the product of the (A) Highly Compensated Employee's reduced actual
contribution ratio as determined under the preceding sentence, and (B) his
or her Compensation. Any excess aggregate contributions will be distributed
as provided below to the Highly Compensated Employee to which they are
attributable. In no event will excess aggregate contributions remain
unallocated or be allocated to a suspense account for allocation in a
future Plan Year.
(g Distribution of excess aggregate contributions. A Participant's
excess aggregate contributions, adjusted for income will be designated by
the Participating Employer as a distribution of excess aggregate
contributions, and distributed to the Participant. The income allocable to
excess aggregate contributions is equal to the allocable gain or loss for
the taxable year of the individual, but not the allocable gain or loss for
the period between the end of the taxable year and the date of distribution
(the "gap period"). Income allocable to excess aggregate contributions for
the taxable year shall be determined by multiplying the gain or loss
attributable to the Participant's Matching Contribution Account balances by
a fraction, the numerator of which is the excess aggregate contributions
for the Participant for the Plan Year, and the denominator of which is the
sum of the Participant's Matching Contribution Account balances as of the
beginning of the Plan Year plus the Participant's Matching Contributions
for the Plan Year. Distribution of excess aggregate contributions will be
made after the close of the Plan Year to which the contributions relate,
but within 12 months after the close of such Plan Year. Excess aggregate
contributions shall be treated as employer contributions for purposes of
Code sections 401(a)(4), 404, and 415 even if distributed from the Plan.
(h Special rules. For purposes of distributing excess aggregate
contributions, the determination and distribution of excess aggregate
contributions with respect to a Highly Compensated Employee whose actual
contribution ratio is determined pursuant to the family aggregation rules
will be accomplished by reducing the actual contribution ratio as required
above and allocating the excess aggregate contributions for the family
group among family members in proportion to the Matching Contributions of
each family member that is combined to determine the actual contribution
ratio.
(i Recordkeeping requirement. The Administrator, on behalf of the
Participating Employers, shall maintain such records as are necessary to
demonstrate compliance with the Code section 401(m) limits, including the
extent to which Elective
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Contributions and Qualified Nonelective Contributions are taken into
account in determining the actual contribution ratios.
(j Excise tax where failure to correct. If the excess aggregate
contributions are not corrected within 2 1/2 months after the close of the
Plan Year to which they relate, the Participating Employers will be liable
for a 10-percent excise tax on the amount of excess aggregate contributions
attributable to them, to the extent provided by Code section 4979.
Qualified Nonelective Contributions properly taken into account under this
section for the Plan Year may enable the Plan to avoid having excess
aggregate contributions, even if the contributions are made after the close
of the 2 1/2-month period.
11.6. SECTION 401(A)(26)/410(B) LIMITS.
(a Notwithstanding anything to the contrary, if the number of
Participants who are eligible to share in any contribution for a Plan Year
is such that the Plan would fail to meet the requirements of Code sections
410(a)(26), 410(b)(1), or 410(b)(2)(A)(i) because a Participating
Employer's contribution would not be allocated to a sufficient number of
Participants, then the group of Participants eligible to share in the
contribution for the Plan Year will be increased to include such minimum
number of Participants who are not in the service of the Company on the
anniversary date, as may be necessary to satisfy the applicable tests under
the above Code sections. The Participants who will become eligible to share
in the contribution will be those participants who, when compared to
Participants who are similarly situated, completed the greatest number of
hours of service in the Plan Year before the termination of their service.
(b The preceding paragraph will not be construed to permit the
reduction of any Participant's Account balance, and any amounts which were
allocated to Accounts of Participants whose eligibility to share in the
contribution did not result from the application of the preceding paragraph
will not be reallocated to satisfy such requirements. Instead, the
Participating Employer will make an additional contribution equal to the
amount which the affected Participants would have received had they been
included initially in the allocation of the Participating Employer's
Contribution, even if it would cause the contributions of the Participating
Employer for the Plan Year to exceed the amount which is deductible by the
Participating Employer for such Plan Year under Code section 404. Any
adjustments pursuant to this paragraph will be considered to be a
retroactive amendment of the Plan which was adopted by the last day of the
Plan Year.
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ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS
12.1. PROVISIONS TO APPLY. The provisions of this Article shall apply for
any top-heavy Plan Year notwithstanding anything to the contrary in the Plan.
12.2. Minimum Contribution. For any Plan Year which is a top-heavy plan
year, the Participating Employers shall contribute to the Trust a minimum
contribution on behalf of each Participant who is not a key employee for such
year and who has not separated from service from the Affiliated Employers by the
end of the Plan Year, regardless of whether or not the Participant has elected
to make Elective Contributions for the Year. The minimum contribution shall, in
general, equal 3% of each such Participant's Compensation, but shall be subject
to the following special rules:
(a If the largest contribution on behalf of a key employee for such
year, taking into account only Elective Contributions, Qualified
Nonelective Contributions, Matching Contributions, and Retirement
Contributions (including forfeitures applied to reduce any such
Participating Employer Contributions), is equal to less than 3% of the key
employee's Compensation, such lesser percentage shall be the minimum
contribution percentage for Participants who are not key employees. This
special rule shall not apply, however, if the Plan is required to be
included in an aggregation group and enables a defined benefit plan to meet
the requirements of Code section 410(a)(4) or 410.
(b No minimum contribution will be required with respect to a
Participant who is also covered by another top-heavy defined contribution
plan of an Affiliated Employer which meets the vesting requirements of Code
section 416(b) and under which the Participant receives the top-heavy
minimum contribution.
(c If a Participant is also covered by a top-heavy defined benefit
plan of an Affiliated Employer, "5%" shall be substituted for "3%" above in
determining the minimum contribution.
(d The minimum contribution with respect to any Participant who is not
a key employee for the particular year will be offset by any Retirement
Contributions and any Qualified Nonelective Contributions (including
forfeitures applied to reduce Retirement Contributions), but not any other
type of contribution, otherwise made for the Participant's benefit for such
year.
(e If additional minimum contributions are required under this
Section, the Administrator will establish (or cause the Trustee to
establish) a special Account to which such contributions will be allocated.
Distributions from such Account will be made in accordance with the rules
applicable to Retirement Contribution Accounts.
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(f A minimum contribution required under this Section shall be made
even though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation for the year because of (i)
the Participant's failure to complete 1,000 hours of service (or any
equivalent provided in the Plan), or (ii) the Participant's failure to make
mandatory contributions or Elective Contributions to the Plan, or (iii)
compensation less than a stated amount.
12.3. SPECIAL VESTING SCHEDULE. Each Employee who is a Participant at any
time during a top-heavy plan year shall be vested in not less than the
percentage of each of his or her Accounts as set forth in the following vesting
schedule (or the Plan's general vesting schedule, if faster), based on the
Participant's Years of Service for Vesting:
Years of Service Vested
for Vesting Percentage
---------------- ----------
fewer than 2 0%
2 but fewer than 3 20%
3 but fewer than 4 40%
4 but fewer than 5 60%
5 but fewer than 6 80%
6 or more 100%
Further, no decrease in a Participant's nonforfeitable percentage may occur in
the event the Plan's status as a top-heavy plan changes for any Plan Year. If
the vesting schedule under the Plan shifts in or out of the above schedule for
any Plan Year because of the Plan's top-heavy status, such shift shall be
considered to be an amendment to the vesting schedule for all purposes of the
Plan.
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12.4. ADJUSTMENT TO LIMITATION ON BENEFITS. For purposes of the Code
section 415 limits, the definitions of "defined contribution plan fraction" and
"defined benefit plan fraction" contained therein shall be modified, for any
Plan Year which is a top-heavy plan year, by substituting "1.0" for "1.25" in
Code sections 415(e)(2)(B) and 415(e)(3)(B).
12.5. DEFINITIONS. For purposes of these top-heavy provisions, the
following terms have the following meanings:
(a "key employee" means a key employee described in Code section
416(i)(l), and "non-key employee" means any employee who is not a key
employee (including employees who are former key employees);
(b "top-heavy plan year" means a Plan Year if any of the following
conditions exist:
(i the top-heavy ratio for the Plan exceeds 60- percent and the
Plan is not part of any required aggregation group or permissive
aggregation group of plans;
(ii the Plan is a part of a required aggregation group of plans
but not part of a permissive aggregation group and the top-heavy ratio
for the group of plans exceeds 60 percent; or
(iii the Plan is part of a required aggregation group and part of
a permissive aggregation group of plans and the top-heavy ratio for
the permissive aggregation group exceeds 60 percent.
(c "top-heavy ratio":
(i If the employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
employer has not maintained any defined benefit plan which during the
5-year period ending on the determination date(s) has or has had
accrued benefits, the top-heavy ratio for the Plan alone or for the
required or permissive aggregation group of plans, as appropriate, is
a fraction, the numerator of which is the sum of the account balances
of all key employees on the determination date(s) (including any part
of any account balance distributed in the 5-year period ending on the
determination date(s)), and the denominator of which is the sum of all
account balances (including any part of an account balance distributed
in the 5-year period ending on the determination date(s), both
computed in accordance with Code section 416. Both the numerator and
the denominator of the top-heavy ratio are increased to reflect any
contribution not actually made as of the determination date, but which
is required to be taken into account on that date under Code section
416.
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(ii) If the employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
employer maintains or has maintained one or more defined benefit plans
which during the 5-year period ending on the determination date(s) has
or has had any accrued benefits, the top-heavy ratio for any required
or permissive aggregation group of plans, as appropriate, is a
fraction, the numerator of which is the sum of the account balances
under the aggregated defined contribution plan or plans for all key
employees, determined in accordance with (i) above, and the present
value of accrued benefits under the aggregated defined benefit plan or
plans for all key employees as of the determination date(s), and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all participants,
determined in accordance with (i) above, and the present value of all
accrued benefits under the defined benefit plan or plans for all
participants as of the determination date(s), all determined in
accordance with Code section 416. The accrued benefits under a defined
benefit plan in both the numerator and denominator of the top-heavy
ratio are increased for any distribution of an accrued benefit made in
the 5-year period ending on the determination date.
(iii) For purposes of (i) and (ii) above the value of account
balances and the present value of accrued benefits will be determined
as of the most recent valuation date that falls within or ends with
the 12-month period ending on the determination date, except as
provided in Code section 416 for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of a
participant (A) who is not a key employee but who was a key employee
in a prior year, or (B) who has not been credited with at least one
hour of service with any employer maintaining the plan at any time
during the 5-year period ending on the determination date will be
disregarded. The calculation of the top-heavy ratio, and the extent to
which distributions, rollovers, and transfers are taken into account
will be made in accordance with Code section 416. Deductible employee
contributions will not be taken into account for purposes of computing
the top-heavy ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year.
(iv) The accrued benefit of a participant other than a key
employee shall be determined under (A) the method, if any, that
uniformly applies for accrual purposes under all defined benefit plans
maintained by the employer, or (B) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code section 411(b)(1)(C).
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(d) The "permissive aggregation group" is the required aggregation
group of plans plus any other plan or plan of the employer which, when
considered as a group with the required aggregation group, would continue
to satisfy the requirements of Code sections 401(a)(4) and 410.
(e) The "required aggregation group" is (i) each qualified plan of the
employer in which at least one key employee participates or participated at
any time during the determination period (regardless of whether the plan
has terminated), and (ii) any other qualified plan of the employer which
enables a plan described in (i) to meet the requirements of Code sections
401(a)(4) and 410(b).
(f) For purposes of computing the top-heavy ratio, the valuation date
shall be the last day of the applicable plan year.
(g) For purposes of establishing present value to compute the
top-heavy ratio, any benefit shall be discounted only for mortality and
interest based on the following:
Interest rate: 7 1/2%
Mortality table: UP-1984
(h) the term "determination date" means, with respect to the initial
plan year of a plan, the last day of such plan year and, with respect to
any other plan year of a plan, the last day of the preceding plan year of
such plan. The term "applicable determination date" means, with respect to
the Plan, the determination date for the Plan Year of reference and, with
respect to any other plan, the determination date for any plan year of such
plan which falls within the same calendar year as the applicable
determination date of the Plan.
ARTICLE 13. MISCELLANEOUS
13.1. EXCLUSIVE BENEFIT RULE. No part of the corpus or income of the Trust
forming part of the Plan will be used for or diverted to purposes other than for
the exclusive benefit of each Participant and Beneficiary, except as otherwise
provided under the provisions of the Plan relating to Qualified Domestic
Relations Orders, the payment of reasonable expenses of administering the Plan,
the return of contributions upon nondeductibility or mistake of fact.
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13.2. LIMITATION OF RIGHTS. Neither the establishment of the Plan or the
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as giving to any Participant or
other person any legal or equitable right against any Participating Employer or
Administrator or Trustee, except as provided herein, and in no event will the
terms of employment or service of any Participant be modified or in any way be
affected hereby. It is a condition of the Plan, and each Participant expressly
agrees by his or her participation herein, that each Participant will look
solely to the assets held in the Trust for the payment of any benefit to which
he or she is entitled under the Plan.
13.3. NONALIENABILITY OF BENEFITS. The benefits provided hereunder will not
be subject to the voluntary or involuntary alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
benefits to be so subjected will not be recognized, except to such extent as may
be required by law, except that if the Administrator receives any Qualified
Domestic Relations Order that requires the payment of benefits hereunder or the
segregation of any Account, such benefits shall be paid, and such Account
segregated, in accordance with the applicable requirements of such Order. In
addition, the vested portion of an Account balance may be pledged as security
for a loan from the Plan in accordance with the Plan's loan procedures.
13.4. FAILURE TO QUALIFY INITIALLY. If application for initial
qualification of the Plan is made by the time prescribed by law for filing the
Company's return for the taxable year in which the Plan is adopted (or such
later date as the Secretary of the Treasury may prescribe) and it is determined
that the Plan or the Trust does not initially qualify under Code sections 401 or
501, all assets then held under the Plan will be returned to the Participating
Employers within one year after such determination or refusal to issue a
determination. Upon such distribution the Plan will be considered to be
rescinded and to be of no force or effect.
13.5. GOVERNING LAW. The Plan and Trust will be construed, administered and
enforced according to the laws of the Commonwealth of Massachusetts to the
extent such laws are not preempted by ERISA.
ARTICLE 14. DEFINITIONS
Wherever used in the Plan, the following terms have the following meanings:
14.1. "Accounts" mean, for any Participant, the accounts established under
the Plan to which contributions made for the Participant's benefit, and any
allocable income, expense, gain and loss, are allocated. References to a
Participant's Elective Contribution Account, Matching Contribution Account, and
Rollover Contribution Account, respectively, refer to those Accounts established
for a Participant to which the respective contributions are allocated.
References to a Participant's Qualified Nonelective Contribution Account refer
to the Account to which Qualified Nonelective Contributions made on behalf of
the Participant are allocated and a Participant's
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Retirement Contribution Account refers to the Account to which the Company's
Retirement Contributions are made. References to an After-Tax Contribution
Account refers to an account to which after-tax contributions were made under a
Prior Plan and no further contributions shall be made thereto hereunder.
14.2. "Administrator" means the entity or persons appointed to administer
the Plan pursuant to its provisions.
14.3. "Affiliated Employer" means (a) the Company, (b) any corporation that
is a member of a controlled group of corporations (as defined in Code section
414(b)) of which the Company is also a member, (c) any trade or business,
whether or not incorporated, that is under common control (as defined in Code
section 414(c)) with the Company, (d) any trade or business that is a member of
an affiliated service group (as defined in Code section 414(m)) of which the
Company is also a member, or (e) to the extent required by Regulations issued
under Code section 414(o), any other organization; provided, that the term
"Affiliated Employer" shall not include any corporation or unincorporated trade
or business prior to the date on which such corporation, trade or business
satisfies the affiliation or control tests of (b), (c) (d) or (e) above. In
identifying any "Affiliated Employers" for purposes of the Code section 415
limits, the definitions in Code sections 414(b) and (c) shall be modified as
provided in Code section 415(h).
14.4. "After-Tax Contribution Account" means any Account from a Prior Plan
which holds contributions made by a Participant on an after-tax basis, and
earnings thereon.
14.5. "Annuity Starting Date" means, for any Participant,
(a) the first day of the first period for which a benefit is payable
to the Participant under the Plan as an annuity, or
(b) in the case of a benefit not payable in the form of an annuity,
the first day on which all events have occurred which entitle the
Participant to such benefit.
14.6. "Beneficiary" means any person entitled to receive benefits under the
Plan upon the death of a Participant.
14.7. "Board of Directors" means the board of directors of Sodexho, Inc.
14.8. "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection, and also includes reference
to any Regulation issued pursuant to or with respect to such section or
subsection.
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14.9. "Contribution Agreement" means an agreement entered into between a
Participant and his or her Participating Employer to reduce the Participant's
pay and have the Participating Employer make an Elective Contribution to the
Plan for the Participant's benefit.
14.10. "Company" means Sodexho, Inc., a Massachusetts corporation, and any
successor to all or a major portion of its assets or business which assumes the
obligations of the Company under the Plan. Prior to November 1, 1993, the
Company was known as The Seiler Corporation.
14.11. "Compensation" means,
(a) for purposes of determining the Code section 415 limits and the
amount of any minimum contribution under the special top-heavy provisions,
the Participant's wages, salaries, fees for professional services and other
amounts received (without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the course of employment
with the Affiliated Employers to the extent that the amounts are includable
in gross income, including but not limited to commissions paid to salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements, and expense allowances, but not including those items
excludable from the definition of compensation under Regulation section
1.415-2(d)(3);
(b) for purposes of determining the status of an individual as a
Highly Compensated Employee or a key employee, the same as described in (a)
above, but increased by any such amounts that would have been received by
the individual from the Affiliated Employers but for an election under Code
sections 125, 401(k), 402(h), or 403(b); and
(c) for all other purposes under the Plan, the amount of base salary,
commission, overtime pay and bonuses received by the Participant for any
Plan Year and with respect to services rendered by the Participant, but,
provided the nondiscrimination requirement of Regulation section
1.414(s)-1(d)(3) is met, reduced by reimbursements or other expense
allowances, fringe benefits (cash and noncash), reimbursement for moving
expenses, deferred compensation, and welfare benefits; provided further,
however, that any Elective Contributions made by the Participating Employer
that are not includable in gross income under Code sections 125, 402(a)(8),
402(h), 403(b), and any compensation deferred under Code section 457(b),
shall in all cases be includable as "Compensation" for purposes of this
paragraph (c).
(d) Compensation shall include only that Compensation which is
actually paid to the Participant during the applicable Plan Year, and for
purposes of Sections 11.4 and 11.5, Compensation paid before an individual
becomes a Participant may be excluded at the option of the Committee. For
all purposes under the Plan, Compensation for any
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individual will be limited for any Plan Year to the amount determined under
Code section 401(a)(17) (the "Section 401(a)(17) Limitation") for the Plan
Year. If the period for determining Compensation used in calculating a
Participant's allocation for a determination period is shorter than 12
months, the annual Compensation limit shall be an amount equal to the
otherwise applicable limit multiplied by a fraction, the numerator of which
is the number of months in the period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code section 414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the Plan Year. If, as a result of the
application of such rules the Section 401(a)(17) Limitation is exceeded,
then the Limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under this
Section prior to the application of this Limitation. The Section 401(a)
(17) Limitation for the Plan Year beginning in calendar year 1994 is
$150,000.
14.12. "Disabled" means the inability to engage in any substantial gainful
activity because of a medically determinable physical or mental impairment
likely to result in death or to be of long-continued and indefinite duration, as
determined by the Administrator on the basis of medical evidence satisfactory to
the Administrator.
14.13. "Elective Contribution" means a contribution made to the Plan for
the benefit of a Participant pursuant to a Contribution Agreement.
14.14. "Elective Contribution Account" means the Account to which Elective
Contributions are made under Section 3.1.
14.15. "Eligibility Date" means the date on which a newly Eligible Employee
may first begin participation in the Plan. Beginning January 1, 1997, the
Eligibility Dates shall be January 1 and July 1. For periods prior to January 1,
1997, the Eligibility Dates shall be September 1 and March 1. If an Eligible
Employee declines to begin participation in the Plan by making Elective
Contributions as of the applicable Eligibility Date, he or she may do so as of
any subsequent Entry Date if the Participant is an Eligible Employee at that
time.
14.16. "Eligible Employee" means any Employee who is employed by a
Participating Employer, other than
(a) a "casual employee" who has no regular schedule of work and who
works less than 1000 hours;
(b) any individual whose primary activity is being a student;
(c) an employee who is currently paid from the payroll of an
Affiliated Employer (other than a Participating Employer);
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(d) an employee who is paid by a Participating Employer but who is
earning benefits under a retirement plan of an Affiliated Employer which is
not a Participating Employer, but this paragraph shall not exclude from
Plan eligibility any such employee who is not covered by a stock fund or
similar profit sharing plan maintained by such Affiliated Employer;
(e) a "leased employee" within the meaning of Code section 414(n),
unless and until he or she becomes actually employed by a Participating
Employer;
(f) any Employee covered by a collective bargaining agreement, unless
such agreement specifically provides for participating in the Plan with
respect to (1) Elective Contributions and Matching Contributions, or (2)
Retirement Contributions, or (3) both. If such collective bargaining
agreement provides for Plan participation only with respect to certain
contributions, such Employee shall be an Eligible Employee only with
respect to that portion of the Plan, and
(g) any Employee of a Participating Employer who is eligible for
another qualified plan maintained by that Participating Employer.
Effective March 1, 1996, all Employees who are former participants in the
Gardner Merchant Plan shall become Eligible Employees. No Employee of the
Company whose immediate prior employment was with Gardner Merchant Holdings,
Inc. shall be considered an Eligible Employee for purposes of the Retirement
Contributions described in Section 3.4.
14.17. "Employee" means any individual employed by an Affiliated Employer,
including any leased employee and any other individual required to be treated as
an employee pursuant to Code sections 414(n) and 414(o).
14.18. "Entry Date" means, (a) with respect to a Participant's initial
eligibility to participate in the Plan, the applicable Eligibility Date, (b) for
all other purposes, the first day of any calendar month, and (c) in addition,
for purposes of Employees who initially satisfied the requirements of the first
sentence of Section 2.1 on or before August 31, 1993, January 1, 1994.
14.19. "ERISA" means the Employee Retirement Income Security Act of 1974,
as from time to time amended, and any successor statute or statutes of similar
import.
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14.20. "FDI Transfer Account" means the subaccount to which amounts
attributable to the Participant's interest in the Food Dimensions, Inc.
Profit-Sharing Retirement Plan, if any, have been transferred. All amounts held
in such subaccount shall be fully vested and nonforfeitable. Subject to Sections
6.2 and 13.4, such FDI Transfer Account shall only be distributable at the
Participant's separation from the service of the Affiliated Employers or at
death, and shall be distributed in accordance with Section 8.1 and 8.4.
14.21. "Fiscal Year" means the twelve month period beginning September 1,
and ending the following August 31.
14.22. "Gardner Merchant Plan" means the Gardner Merchant Food Service
401(k) Retirement Plan as in existence on February 29, 1996, just prior to its
merger into the Plan.
14.23. "Highly Compensated Employee" means an employee of an Affiliated
Employer who is a "highly compensated employee" within the meaning of Code
section 414(q). The term Highly Compensated Employee includes highly compensated
active Employees and highly compensated former Employees.
(a) A highly compensated active Employee includes any Employee who
performs service for an Affiliated Employer during the determination year
and who, during the look-back year (i) received Compensation from the
Affiliated Employers in excess of $75,000 (as adjusted pursuant to Code
section 415(d)); (ii) received Compensation from the Affiliated Employers
in excess of $50,000 (as adjusted pursuant to Code section 415(d)) and was
a member of the top-paid group for such year; or (iii) was an officer of
the Affiliated Employers and received Compensation during such year that is
greater than 50-percent of the dollar limitation in effect under Code
section 415(b)(1)(A).
(b) The term Highly Compensated Employee also includes (i) employees
who are both described in paragraph (a) if the term "determination year" is
substituted for the term "look-back year" and the Employee is one of the
100 Employees who received the most Compensation from the Employers during
the determination year; and (ii) Employees who are a 5-percent owners at
any time during the look- back year or determination year. If no officer
has satisfied the compensation requirement of (a)(iii) above during either
a determination year or look-back year, the highest-paid officer for such
year shall be treated as a Highly Compensated Employee. For this purpose,
the determination year shall be the Plan Year. The look-back year shall be
the 12-month period immediately preceding the determination year.
(c) A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Affiliated Employers during
the determination year, and was a
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highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
(d) If an Employee is, during a determination year or look- back year,
a family member of either a 5-percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most Highly
Compensated Employees ranked on the basis of Compensation paid by the
Affiliated Employers during such year, then the family member and the
5-percent owner or top 10 Highly Compensated Employee shall be aggregated.
In such case, the family member and 5- percent owner or top 10 Highly
Compensated Employee shall be treated as a single Employee receiving
compensation and Plan contributions equal to the sum of such compensation
and contributions of the family member and 5-percent owner or top-10 Highly
Compensated Employee. For purposes of this section, family member includes
the spouse, lineal ascendants and descendants of the employee or former
employee and the spouses of such lineal ascendants and descendants.
(e) The top paid group shall consist of the top 20-percent of active
Employees, ranked on the basis of Compensation received from the Affiliated
Employers during the year. The number of officers shall be limited to the
lesser of (i) 50 Employees or (ii) the greater of 3 Employees or 10-percent
of Employees. If there is not at least one officer whose Compensation is in
excess of 50-percent of the Code section 415(b)(i)(A) limit, then the
highest paid officer of the Affiliated Employers shall be treated as a
Highly Compensated Employee. The determination of who is a Highly
Compensated Employee, including the determinations of the number and
identity of employees in the top-paid group, the top 100 Employees, the
number of employees treated as officers and the compensation that is
considered, will be made in accordance with Code section 414(q).
14.24. "Hour of Service" means, with respect to any Employee,
(a) Each hour for which the Employee is paid or entitled to be paid
for the performance of duties for an Affiliated Employer, each such hour to
be credited to the Employee for the computation period in which the duties
were performed;
(b) Each hour for which the Employee is directly or indirectly paid or
entitled to be paid by any Affiliated Employer (including payments made or
due from a trust fund or insurer to which the Affiliated Employer
contributes or pays premiums) on account of a period of time during which
no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty, or leave of absence, each
such hour to be credited to the Employee for the computation period in
which such period of time occurs, subject to the following rules:
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(i) No more than 501 Hours of Service shall be credited under
this paragraph (b) to the Employee on account of any single continuous
period during which the Employee performs no duties;
(ii) Hours of Service shall not be credited under this paragraph
(b) to an Employee for a payment which solely reimburses the Employee
for medically related expenses incurred by the Employee, or which is
made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment
compensation or disability insurance laws; and
(iii) If the period during which the Employee performs no duties
falls within two or more computation periods, and if the payment made
on account of such period is not calculated on the basis of units of
time, the number of Hours of Service credited with respect to such
period shall be allocated between not more than the first two such
periods based on the amount of the payment divided by the Employee's
most recent hourly rate of Compensation before the period during which
no duties were performed;
(c) Each hour not counted under paragraph (a) or (b) for which back
pay, irrespective of mitigation of damages, has been either awarded or
agreed to be paid by any Affiliated Employer, each such hour to be credited
to the Employee for the computation period to which the award or agreement
for back pay pertains, provided that crediting of Hours of Service under
this paragraph (c) with respect to periods described in paragraph (b) above
shall be subject to the limitations and special rules set forth in clauses
(i), (ii) and (iii) of paragraph (b); and
(d) Each noncompensated hour while an Employee during a period of
absence from any Affiliated Employer in the armed forces of the United
States if the Employee returns to work for any Affiliated Employer at a
time when he or she has reemployment rights under federal law, and each
noncompensated hour while an Employee on an unpaid leave of absence granted
by the Employer.
Hours of Service to be credited to an Employee under (a), (b) and (c) above will
be calculated and credited pursuant to paragraphs (b) and (c) of Section
2530.200b-2 of the Department of Labor Regulations, which are incorporated
herein by reference. The Hours of Service to be credited to an Employee during a
period described in (d) above will be determined by the Administrator with
reference to the individual's most recent normal work schedule, or at the rate
of eight Hours per day in the event the Administrator is unable to establish
such schedule.
14.25. "Investment Committee" means the persons designated by the Board of
Directors of the Company to be responsible for the financial operations of the
Plan and to perform such other duties as designated by the Board of Directors.
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14.26. "Matching Contribution" means a contribution made for the benefit of
a Participant under the Plan on account of an Elective Contribution.
14.27. "Matching Contribution Account means the Account to which Matching
Contributions are made under Section 3.3.
14.28. "Normal Retirement Age" means age 65 or, if later, the fifth
anniversary of the date the Participant commences participation in the Plan.
14.29. "Participant" means each Eligible Employee who participates in the
Plan pursuant to its provisions.
14.30. "Participating Employer" means the Company and each other Affiliated
Employer that adopts the Plan with the consent of the Company. Effective March
1, 1996, Gardner Merchant shall be a Participating Employer in the Plan with
respect to its Employees who are Eligible Employees.
14.31. "Period of Service" means, with respect to any Employee, the
aggregate of all time periods commencing with the Employee's first day of
employment or reemployment and ending on the date a break in service begins. The
first day of employment or reemployment is the first day the Employee performs
an hour of service, and an "hour of service" for this purpose is an hour for
which the Employee is paid or entitled to be paid for the performance of duties
for an Affiliated Employer. An Employee will also receive credit for any period
of severance of less than 12 consecutive months. Fractional periods of a year
will be expressed in terms of days. In the case of an individual who is absent
from work for maternity or paternity reasons, the 12- consecutive month period
beginning on the first anniversary of the first day of such absence shall not
constitute a break in service. For purposes of this Section,
(a) an absence from work for maternity or paternity reasons means an
absence (i) by reason of the pregnancy of the individual, (ii) by reason of
the birth of a child of the individual, (iii) by reason of the placement of
a child with the individual in connection with the adoption of such child
by such individual, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement;
(b) a break in service is a period of severance of at least 12
consecutive months; and
(c) a period of severance is a continuous period of time during which
the Employee is not employed by an Affiliated Employer. Such period begins
on the date the Employee retires, quits or is discharged, or if earlier,
the 12-month anniversary of the date on which the Employee was otherwise
first absent from service.
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(d) In the case of a leave of absence for service in the armed forces
of the United States, no period shall be excluded under this paragraph
during which the Employee has reemployment rights with respect to the
Affiliated Employers under federal law.
14.32. "Plan" means The Sodexho Savings Plus Plan which, prior to March 1,
1996 was referred to as The Sodexho USA Retirement Income Plan and prior to
January 1, 1994, was referred to as The Seiler Corporation Retirement Income
Plan.
14.33. "Plan Year" means (a) for periods beginning prior to September 1,
1996 the 12-month period beginning each September 1, (b) the period from
September 1, 1996 through December 31, 1996, (c) the calendar year for all
periods beginning January 1, 1997 and thereafter.
14.34. "Prior Plan" means any plan, including the Gardner Merchant Plan,
that is merged into the Plan.
14.35. "Qualified Domestic Relations Order" means any judgment, decree or
order (including approval of a property settlement agreement) which constitutes
a "qualified domestic relations order" within the meaning of Code section
414(p). A judgment, decree or order shall not be considered not to be a
Qualified Domestic Relations Order merely because it requires a distribution to
an alternate payee (or the segregation of accounts pending distribution to an
alternate payee) before the Participant is otherwise entitled to a distribution
under the Plan.
14.36. "Qualified Nonelective Contribution" means a contribution made in
the discretion of the Company which is designated by the Company as a Qualified
Nonelective Contribution.
14.37. "Regulation" means a regulation issued by the Department of
Treasury, including any final regulation, proposed regulation, temporary
regulation, as well as any modification of any such regulation contained in any
notice, revenue procedure, or similar pronouncement issued by the Internal
Revenue Service.
14.38. "Required Beginning Date" means the benefits must commence as
determined under Code Section 401(a)(9) and Regulations thereunder.
14.39. "Retirement Contribution" means a contribution (other than a
Qualified Nonelective Contribution) made for the benefit of a Participant in
accordance with Section 3.4.
14.40. "Retirement Contribution Account" means the Account to which
Retirement Contributions are made under Section 3.4.
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14.41. "Rollover Contribution" means a contribution made by a Participant
which satisfies the requirements for rollover contributions as set forth in the
Plan.
14.42. "Rollover Contribution Account" means the Account to which Rollover
Contributions are made under Section 3.6.
14.43. "Section" means a section of the Plan.
14.44. "Seiler Transfer Account" means the subaccount, if any, to which
amounts attributable to the Participant's interest in The Seiler Corporation
Employees' Pension Plan have been transferred. All amounts held in such
subaccount shall be fully vested and nonforfeitable. Subject to Sections 6.2 and
13.4 such Seiler Transfer Account shall only be distributable at the
Participant's separation from the service of the Affiliated Employers or at
death, and shall be distributed in accordance with Section 8.2 and 8.4(c).
14.45. "Substantial Severance" means in the case of any individual who has
no vested right in any of his Accounts
(a) for purposes of determining the individual's Years of Service for
Participation under Section 14.39 and, a number of consecutive computation
periods, determined in accordance with Section 14.39, which equals or
exceeds the prior number of Years of Service for Participation completed by
the individual, if in each of such computation periods, the individual
completed less than 501 Hours of Service;
(b) for purposes of determining the individual's Years of Service for
Vesting under Section 14.40, a period of severance of at least twelve
consecutive months which equals or exceeds, in the number of whole months,
the Years of Service for Vesting which he completed before such period of
severance began.
Notwithstanding the foregoing, however, no individual will incur a
Substantial Severance unless the number of consecutive computation periods
in which the individual completes less than 501 Hours of Service equals or
exceeds five, or the individual's period of severance is of at least five
years' duration, as applicable.
14.46. "Trust" means The Sodexho USA Retirement Income Trust established in
conjunction with the Plan, together with any and all amendments thereto.
14.47. "Trustee" mean the person or persons who are at any time the acting
Trustee under the Trust.
14.48. "Valuation Date" means the last business day of each Plan Year and
such other day or days as specified by the Administrator. In the case of a
Valuation Date other than the last
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business day of a Plan Year, the Administrator may, in order to make
distributions, adjust only a specified Account or Accounts.
14.49. "Year of Service for Participation" means a computation period
during which the Employee completes at least 1,000 Hours of Service. For
purposes of determining a Year of Service for Participation, the initial
computation period shall be the 12-consecutive month period beginning on the
date the Employee first performs an Hour of Service (the "employment
commencement date"). The succeeding computation periods commence on the first
anniversary of the employment commencement date and on each anniversary
thereafter. All service with Gardner Merchant Holdings, Inc., Gardner Merchant
or with the portion of Morrison Companies that was acquired by Gardner Merchant
in 1994 shall be counted for purposes of determining a Year of Service for
Participation for any Employee of the Company whose immediate prior employment
was with Gardner Merchant Holdings, Inc. In addition, all Hours of Service with
any Affiliated Employer are counted for purposes of determining a Year of
Participation.
14.50. "Year of Service for Vesting" means a Period of Service of one full
year.
IN WITNESS WHEREOF, the Company has caused this instrument to be signed in
its name and on its behalf by its duly authorized officer, as of the ____ day of
__________, 1996.
SODEXHO, INC.
By:
-----------------------------
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THE SODEXHO SAVINGS PLUS PLAN
WHEREAS Sodexho USA, Inc. (the "Company") adopted the Sodexho USA
Retirement Income Plan, effective January 1, 1994 and subsequently changed the
name to The Sodexho Savings Plus Plan (the "Plan"); and
WHEREAS, by Section 10.1 of the Plan, the Company reserved the power to
amend the Plan from time to time; and
WHEREAS the Company desires to credit service with an immediate prior
employer for certain hourly employees for eligibility and vesting purposes, to
permit certain nonactive employees to continue to participate in the Plan until
termination of employment and to correct the language in the allocation of
forfeitures;
NOW, THEREFORE, the Company hereby adopts the following amendments to
the Plan:
1. Section 2.1 is amended, effective February 1, 1998, to add a
sentence at the end to read as follows: "For purposes of
determining the date of participation for any Employee of the
Company whose immediate prior employment was with a company
who becomes a client of the Company where the Company assumes
some or all of the payroll of the client, service with the
prior employer immediately prior to the assumption of the
payroll by the Company shall be counted in determining a Year
of Service for Participation, if and to the extent the Company
has so negotiated with the client."
2. Section 5.6(c) is amended in its entirety, effective March 1. 1996,
to read as follows:
"APPLICATION OF FORFEITURES. Any forfeitures
occurring in a Plan Year with respect to an
Employee of a Participating Employer
(i) first, will be applied to the restoration of any
Accounts of Employees of the Participating Employer
as required for such Year;
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(ii) to the extent amounts remain after the
application of (i) above, any forfeitures from
Matching Contribution Accounts will be applied
against the Participating Employer's Matching
Contributions for the Plan Year in which the
forfeitures occurred, and to the extent any
forfeitures remain after such application, they will
be applied against the Participating Employer's
Retirement Contributions for such Plan Year. To the
extent any forfeitures remain after all such
applications, they will be applied against any
Qualified Nonelective Contributions by the
Participating Employer for the Plan Year in which the
forfeitures occurred, and to the extent any such
forfeitures remain after such application, they will
be allocated among the Retirement Contributions
Accounts of the remaining Participants who are
Eligible Employees of the Participating Employer on
the last day of the Plan Year in proportion to their
relative amounts of Compensation of the Plan Year;
and
(iii) to the extent amounts remain after the
application of (i) above, any forfeitures from
Retirement Contributions will be allocated among the
Retirement Contribution Accounts of the remaining
Participants of the Participating Employer who have
Retirement Contribution Accounts on the last day of
the Plan Year in proportion to the relative value of
such Account as compared to all Retirement
Contribution Accounts."
3. Section 14.16 is amended, effective February 1, 1998, by adding at
the end thereof, the following sentence:
"Notwithstanding the foregoing, any Participant who ceases
active employment on or after March 27, 1998 but who continues
for other purposes to be an Employee shall continue to be an
Eligible Employee eligible to make Elective Contributions and,
if otherwise eligible, receive Matching Contributions to his
or her Account until the date of his or her official
termination of employment as set by the Company."
4. Section 14.49 is amended, effective February 1, 1998, in its
entirety to read as follows:
"YEAR OF SERVICE FOR PARTICIPATION" means a computation period
during which the Employee completes at least 1,000 Hours of
Service. For purposes of determining a Year of Service for
Participation, the initial computation period shall be the
12-consecutive month period beginning on the date the Employee
first performs an Hour of Service (the "employment
commencement date"). The succeeding computation periods
commence on the first anniversary of the employment
commencement date and on each anniversary thereafter. The
following service shall be counted in determining a Year of
Participation Service: (a) for any Employee of the Company
whose immediate prior
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employment was with Gardner Merchant
Holdings, Inc., all service with Gardner Merchant Holdings,
Inc., Gardner Merchant or with the portion of Morrison
Companies that was acquired by Gardner Merchant in 1994; (b)
for any hourly Employee of the Company whose immediate prior
employment was with an entity that becomes a client of the
Company where the Company assumes some or all of the payroll
of the entity and where the Employee had been eligible to
participate in an employer-sponsored retirement plan
maintained by the prior employer, service with the prior
employer immediately prior to the assumption of the payroll by
the Company; and (c) all Hours of Service with any Affiliated
Employer."
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
in its name and on its behalf by its duly authorized officer, as of this day of
February, 1998.
SODEXHO USA, INC.
BY:
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ARTHUR ANDERSEN LLP
[Logo]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 3, 1998
included in Marriott International, Inc.'s (subsequently renamed "Sodexho
Marriott Services, Inc.") Form 10-K for the year ended January 2, 1998
(File No. 1-12188) and to all references to our Firm included in such
registration statement.
/s/ Arthur Andersen LLP
Washington, D.C.
September 15, 1998
