<PAGE>
As filed with the Securities and Exchange Commission on May 24, 1996
Registration No. 333-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
________________
SOLA INTERNATIONAL INC.
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-3189941
- -----------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2420 Sand Hill Road, Menlo Park, California 94025
- -----------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Sola Optical 401(k) Savings Plan
- -----------------------------------------------------------------
(Full title of the plan)
John E. Heine, Sola International Inc., 2420 Sand Hill Road,
Menlo Park, California 94025
- -----------------------------------------------------------------
(Name and address of agent for service)
(415) 324-6868
- -----------------------------------------------------------------
(Telephone number, including area code of agent for service)
With copy to:
Michael E. Pietzsch
Polese, Pietzsch, Williams & Nolan, P.A.
3003 N. Central Avenue, Suite 1900
Phoenix, Arizona 85012
602-280-1500
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount To Proposed Proposed Amount of
Securities To Be Maximum Maximum Registration
Be Registered Registered Offering Price Aggregate Fee
Per Share* Offering Price*
<S> <C> <C> <C> <C>
Interests in * * * $100.00**
the 401(k)
Savings Plan
<FN>
__________________________
* Pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement covers an indeterminate amount
of interests to be offered or sold pursuant to the employee
benefit plan described herein.
** Pursuant to Section 6(b) of the Securities Act of 1933, the
amount of Registration Fee is $100.00.
</TABLE>
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part
I, Items 1 and 2, will be delivered to participants in accordance
with Rule 428 of the Securities Act of 1933.
3
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following
documents, which have been filed by the Company or the Plan with
the Commission, are incorporated in this Registration Statement
by reference:
The Company's Annual Report on Form 10-K filed
with the Commission on June 7, 1995, as amended by the
Company's Annual Report on Form 10-K/A filed with the
Commission on June 21, 1995 (the "Form 10-K");
The Company's quarterly reports on Form 10-Q for
the quarters ending June 30, 1995, September 30, 1995 and
December 31, 1995;
The Company's Report on Form 8-K dated June 7,
1995, the Company's Report on Form 8-K dated June 21, 1995
and the Company's Report on Form 8-K dated May 6, 1996;
The description of the common stock of the
Company, $.01 par value per share (the "Common Stock"),
which is registered under Section 12 of the Exchange Act, as
amended, contained in the Registration Statement on Form 8-A
filed with the Commission on January 20, 1995, as amended by
Amendment No. 1 to the Form 8-A which was filed with the
Commission on February 17, 1995.
All documents subsequently filed by the Company and the
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be part
hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES. Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company,
as a Delaware corporation, is empowered by Section 145 of the
General Corporation Law of the State of Delaware (the "DGCL"),
subject to the procedures and limitations stated therein, to
indemnify any person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with any threatened,
pending or completed action, suit or proceeding in which such
person is made or threatened to be made a party by reason of his
being or having been a director, officer, employee or agent of
the Company. The statute provides that indemnification pursuant
to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-
law, agreement, vote of stockholders or disinterested directors,
or otherwise. The Company's Amended and Restated Certificate of
Incorporation provides for indemnification by the Company of its
directors and officers to the full extent permitted by the DGCL.
Pursuant to Section 145 of the DGCL, the Company has purchased
insurance on behalf of its present
4
<PAGE>
and former directors and officers against any liability asserted
against or incurred by them in such capacity or arising out of
their status as such.
Pursuant to specific authority granted by Section 102
of the DGCL, the Company's Amended and Restated Certificate of
Incorporation contains the following provision regarding
limitation of liability of directors and officers:
"To the fullest extent permitted by the
Delaware General Corporation Law as the same
exists or may hereafter be amended, a
Director of the Corporation shall not be
liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary
duty as a Director."
In addition, the Company's Amended and Restated By-Laws
provide for indemnification of directors and officers, including
indemnification of directors and officers that are a party to a
proceeding in whole or in part attributable to (a) the fact that
he is or was a director or officer of the Company or was serving
at the request of the Company or (b) anything done or not done by
such person in any such capacity against losses if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Company, and, with respect to
any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful.
The Company has entered into agreements to provide
indemnification for its directors and executive officers in
addition to the indemnification provided for in the Company's
Amended and Restated Certificate of Incorporation and Amended and
Restated By-Laws. These agreements, among other things, indemnify
the directors, to the fullest extent provided by Delaware law,
for certain expenses (including attorneys' fees), losses, claims,
liabilities, judgments, fines and settlement amounts incurred by
such indemnitee in any action or proceeding, including any action
by or in the right of the Company, on account of services as a
director or officer of any affiliate of the Company, or as a
director or officer of any other company or enterprise that the
indemnitee provides services to at the request of the Company.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS. An Exhibit index is located at Page 9.
The undersigned Registrant hereby undertakes that it
will submit or has submitted the Plan and any amendment thereto
to the Internal Revenue Service (the "IRS") in a timely manner
and has made or will make all changes required by the IRS in
order to qualify the Plan.
Item 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of this
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
5
<PAGE>
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Company 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 Menlo Park, State of California, on May 24, 1996.
SOLA INTERNATIONAL INC.
By /s/ Ian S. Gillies
------------------------------
Ian S. Gillies
Vice President, Finance
Chief Financial Officer
Treasurer and Secretary
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:
Signature Title Date
- --------- ----- ----
* Chairman of the Board
- -------------------------
Irving S. Shapiro
* President and Chief Executive
- ------------------------- Officer (Principal Executive
John E. Heine Officer), Director
/s/ Ian S. Gillies Vice President, Finance, Chief May 24, 1996
- ------------------------- Financial Officer, Treasurer and
Ian S. Gillies Secretary (Principal Financial and
Accounting Officer)
* Director
- -------------------------
Douglas D. Danforth
* Director
- -------------------------
Hamish Maxwell
* Director
- -------------------------
Ruben F. Mettler
7
<PAGE>
* Director
- -------------------------
Lawrence Za Yu Moh
* Director
- -------------------------
Jackson L. Schultz
* By /s/ Ian S. Gillies May 24, 1996
--------------------
Ian S. Gillies
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of
1933, the Administrative Committee of the Company has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Petaluma,
State of California, on May 24, 1996.
SOLA OPTICAL 401(k) SAVINGS PLAN
By /s/ Hedley Lawson, Jr.
--------------------------------
Hedley Lawson, Jr.
Senior Vice President
Human Resources
8
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
4.1 Specimen Form of the Company's Stock Certificate (Filed
as Exhibit 4.1 to Amendment No. 3 to the Company's
Registration Statement (File No. 33-87892) on Form S-1
and incorporated herein by reference)
4.2 Amended and Restated Certificate of Incorporation of
the Company (Filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the Fiscal Year Ending
March 31, 1995 and incorporated herein by reference)
4.3 Amended and Restated By-Laws of the Company (Filed as
Exhibit 3.2 to Amendment No. 2 to the Company's
Registration Statement (File No. 33-87892) on Form S-1
and incorporated herein by reference)
4.4 Sola Optical 401(k) Savings Plan
4.5 Trust Agreement entered into as of May 15, 1996 between
Sola Optical USA, Inc. and Chase Manhattan Bank, N.A.
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Coopers & Lybrand L.L.P., independent
accountants
24.1 Power of Attorney
24.1(a) Power of Attorney
9
<PAGE>
EXHIBIT 4.4
<PAGE>
SOLA OPTICAL
401(k) SAVINGS PLAN
May 21, 1996
[Effective January 1, 1996]
Polese, Pietzsch, Williams & Nolan, A Professional Association
3003 N. Central Avenue, Suite 1900
Phoenix, Arizona 85012
<PAGE>
CERTIFICATE
Hedley Lawson, Jr., Senior Vice President of Human Resources
of SOLA Optical USA, a division of SOLA International Inc., a
Delaware corporation, hereby certifies that the attached document
is a complete and accurate copy of the SOLA Optical 401(k)
Savings Plan, to be effective January 1, 1996.
DATED: May 21, 1996.
/s/ Hedley Lawson, Jr.
--------------------------------
Hedley Lawson, Jr., Senior Vice
President of Human Resources
<PAGE>
TABLE OF CONTENTS
Page
1. NAME, DESIGNATION AND PURPOSE......................... 1-1
1.01 Name of Plan................................... 1-1
1.02 Designation of Type of Plan.................... 1-1
1.03 Purpose........................................ 1-1
2. DEFINITIONS........................................... 2-1
2.01 Accrued Benefit................................ 2-1
2.02 Administrative Committee....................... 2-1
2.03 Anniversary Date............................... 2-1
2.04 Break in Service............................... 2-1
2.05 Compensation................................... 2-1
2.06 Contribution................................... 2-3
2.07 Disability..................................... 2-3
2.08 Early Retirement Age and Early Retirement Date. 2-3
2.09 Effective Date................................. 2-3
2.10 Employee....................................... 2-3
2.11 Employer....................................... 2-3
2.12 Fiduciary...................................... 2-3
2.13 Forfeiture..................................... 2-4
2.14 Highly Compensated Employee.................... 2-4
2.15 Hour of Service................................ 2-5
2.16 Investment Manager............................. 2-6
2.17 Leased Employee................................ 2-6
2.18 Net Income..................................... 2-7
2.19 Normal Retirement Age and Normal Retirement
Date........................................... 2-7
2.20 Participant.................................... 2-7
2.21 Plan........................................... 2-7
2.22 Plan Administrator............................. 2-7
2.23 Plan Year...................................... 2-7
2.24 Related Employer............................... 2-7
2.25 Top Heavy Plan................................. 2-8
2.26 Trust Fund..................................... 2-12
2.27 Trustee........................................ 2-12
2.28 Year of Service................................ 2-12
2.29 Valuation Date and Valuation Period............ 2-12
3. ELIGIBILITY AND PARTICIPATION......................... 3-1
3.01 Eligibility to Participate..................... 3-1
3.02 Reemployment................................... 3-1
3.03 Determination of Eligibility................... 3-2
i
<PAGE>
Page
4. CONTRIBUTIONS......................................... 4-1
4.01 Participant Elective Deferrals................. 4-1
4.02 Participant Voluntary Contributions............ 4-7
4.03 Employer Contributions......................... 4-7
4.04 Limitations on Employee Contributions and
Matching Contributions......................... 4-9
4.05 Payment........................................ 4-13
4.06 No Responsibility for Collection or
Verification................................... 4-14
4.07 Rollovers and Transfers........................ 4-14
4.08 Top Heavy Minimum Contribution................. 4-15
5. ALLOCATIONS TO ACCOUNTS............................... 5-1
5.01 Participants' Accounts......................... 5-1
5.02 Crediting of Contributions..................... 5-1
5.03 Allocation of Employer Matching Contributions.. 5-2
5.04 Valuation and Adjustment of Accounts........... 5-2
5.05 Application of Forfeitures..................... 5-2
5.06 Charging of Distributions...................... 5-2
5.07 Limitations on Annual Additions and Benefits... 5-2
6. VESTING, DISTRIBUTIONS AND WITHDRAWALS................ 6-1
6.01 Vesting........................................ 6-1
6.02 Forfeitures.................................... 6-1
6.03 Payments to Participants and Beneficiaries..... 6-2
6.04 When Payments are Made......................... 6-2
6.05 Selection of Method of Payment................. 6-11
6.06 Designation of Beneficiary..................... 6-12
6.07 Withdrawal of Participant Contributions,
Rollovers and Transfers and Elective Deferrals. 6-12
6.08 Facility of Payment............................ 6-14
6.09 Segregation of Participant's Accounts.......... 6-14
6.10 Qualified Domestic Relations Orders............ 6-14
6.11 Eligible Rollover Distributions................ 6-15
7. LIFE INSURANCE........................................ 7-1
8. LOANS TO PARTICIPANTS................................. 8-1
8.01 Application to Administrative Committee........ 8-1
8.02 Required Documentation and Terms............... 8-1
8.03 Implementation and Servicing of Loan........... 8-2
8.04 Loan Fund...................................... 8-3
8.05 Charges and Fees............................... 8-3
ii
<PAGE>
Page
9. PARTICIPANT DIRECTED INVESTMENTS...................... 9-1
9.01 Direction by Participant....................... 9-1
9.02 Investment Options Limited by Administrative
Committee...................................... 9-1
9.03 Employer Stock Fund............................ 9-1
9.04 Timing of Investment Elections for Future
Contributions.................................. 9-2
9.05 Reallocation of Investment Elections........... 9-2
9.06 Investment Control Survives Death.............. 9-2
9.07 Charges and Fees............................... 9-2
10. ADMINISTRATION........................................ 10-1
10.01 Basic Responsibilities of Employer............. 10-1
10.02 Organization and Membership of Administrative
Committee...................................... 10-1
10.03 Powers and Responsibilities of the
Administrative Committee....................... 10-1
10.04 Records of Administrative Committee............ 10-2
10.05 Liability of Administrative Committee.......... 10-2
10.06 Designation of Agents and Allocation of
Responsibilities............................... 10-2
11. TRUST AND TRUSTEE..................................... 11-1
12. FIDUCIARY RESPONSIBILITIES AND LIABILITIES............ 12-1
12.01 Fiduciary Responsibility....................... 12-1
12.02 Prohibited Transactions........................ 12-1
12.03 Limitation of Liability; Indemnification....... 12-1
12.04 Benefits Payable Solely from Trust Fund........ 12-2
13. PARTICIPANTS' RIGHTS AND LIMITATIONS.................. 13-1
13.01 Dismissal...................................... 13-1
13.02 Alienation..................................... 13-1
13.03 Distributions to Persons Under Legal
Disability..................................... 13-1
13.04 Procedure When Trustee Is Unable to Locate
Distributee.................................... 13-2
13.05 Claims Procedure............................... 13-2
13.06 Portability.................................... 13-3
13.07 Employer and Trustee Only Necessary Parties to
Litigation..................................... 13-3
13.08 Execution of Receipts and Releases............. 13-3
14. AMENDMENT AND TERMINATION............................. 14-1
14.01 Amendment of Plan.............................. 14-1
14.02 Termination of the Plan........................ 14-2
14.03 Procedure upon Termination of the Plan......... 14-2
14.04 Consolidation, Merger, Division or Sale........ 14-2
14.05 Dissolution or Liquidation of Employer......... 14-3
14.06 Predecessor Plan............................... 14-3
iii
<PAGE>
Page
15. MISCELLANEOUS PROVISIONS.............................. 15-1
15.01 Reversion of Contributions..................... 15-1
15.02 Rule Against Perpetuities...................... 15-1
15.03 Notices........................................ 15-1
15.04 Text to Prevail over Headings.................. 15-1
15.05 Applicable Law................................. 15-1
15.06 Counterparts................................... 15-2
15.07 Binding upon Successors, Etc................... 15-2
15.08 Copies of Plan................................. 15-2
15.09 Gender and Number.............................. 15-2
16. RELATED OR OTHER EMPLOYERS............................ 16-1
16.01 Adoption by Related or Other Employers......... 16-1
16.02 Requirements of Adopting Employers............. 16-1
16.03 Designation of Agent........................... 16-1
16.04 Plan Administrator's Authority................. 16-1
iv
<PAGE>
AMENDED AND RESTATED
SOLA OPTICAL
401(k) SAVINGS PLAN AGREEMENT
THIS AMENDMENT, made and entered into on May 21, 1996, by
SOLA Optical USA, a division of SOLA International Inc., a
Delaware corporation (the "Employer")
W I T N E S S E T H:
WHEREAS, the Employer established the Sola Optical USA
Deferred Salary Savings Plan effective January 1, 1985, as
amended (the "Prior Plan"), and the Sola Optical USA Employees'
Savings and Investment Plan effective January 1, 1989, as
amended; and
WHEREAS, the Sola Optical USA Employees' Savings and
Investment Plan merged into the Sola Optical USA Deferred Salary
Savings Plan to form the SOLA Optical USA 401(k) Savings Plan
effective January 1, 1992; and
WHEREAS, the Employer has reserved the right to amend the
Prior Plan in whole or in part; and
WHEREAS, the Employer desires to amend and restate the Prior
Plan in its entirety, as set forth herein, to continue to qualify
under the provisions of Sections 401 et seq. and 501 et seq. of
the Internal Revenue Code of 1986, as amended (the "Code") and
the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto do hereby agree to
amend and restate the Prior Plan as follows:
<PAGE>
1. NAME, DESIGNATION AND PURPOSE
1.01 Name of Plan. This Plan shall be known as the "SOLA
Optical 401(k) Savings Plan" (the "Plan").
1.02 Designation of Type of Plan. This Plan is designated as
a profit sharing plan with a Section 401(k) cash or deferred
arrangement plan for all purposes under the Code and ERISA.
1.03 Purpose. This Plan is created for the sole purpose of
enabling Participants to accumulate funds for their retirement or
disability, and to provide benefits to Participants'
Beneficiaries in the event of death. In no event shall any part
of the principal or income of the Trust revert to the Employer,
or be used for, or diverted to, purposes other than for the
exclusive benefit of Participants and their Beneficiaries, except
as specifically provided in Section 15.01 of this Plan. This Plan
is intended to qualify as an employee pension benefit plan, under
the terms of the Code.
1-1
<PAGE>
2. DEFINITIONS
The following terms, as used in this Agreement, shall have
the definitions set forth in this Article 2, unless the context
clearly indicates that a different meaning is required:
2.01 Accrued Benefit. The term "Accrued Benefit" shall mean
the amount in a Participant's account or accounts under this or
any other defined contribution plan, or the actuarially
determined accrued benefit under a defined benefit plan, as of
any date, derived from both Employer contributions and
Participant contributions, if any.
2.02 Administrative Committee. The term "Administrative
Committee" shall refer to the committee appointed by the Employer
pursuant to Section 10.02 of this Plan.
2.03 Anniversary Date. The term "Anniversary Date" shall
mean the last day of each Plan Year ending after the Effective
Date.
2.04 Break in Service. The term "Break in Service" shall
mean any twelve (12) consecutive month period defined for
purposes of a Year of Service during which an Employee does not
complete more than five hundred (500) Hours of Service.
2.05 Compensation. The term "Compensation" shall mean
compensation actually paid to an Employee by the Employer for the
Plan Year, including regular base salary, hourly wages, shift
differentials, vacation and sick leave pay, amounts paid as
overtime, commissions or other payments made pursuant to a sales
bonus plan, amounts deferred by an Employee under the terms of
this or any other Employer-sponsored tax-qualified plan, and
amounts paid pursuant to management bonus plans or other formally
adopted incentive compensation plans, but excluding:
(a) Any amounts or shares of stock paid or issued upon
exercise of stock options or stock appreciation rights;
(b) Any amounts paid under a plan or agreement that
expressly excludes such amounts from the determination of
contributions or forfeitures;
(c) Any amounts paid as special awards, including but
not limited to suggest awards, safety awards, recruitment
bonuses and special management awards;
(d) Any amounts paid as expense allowances or in any
form other than cash;
(e) Any amounts paid as directors' fees;
(f) Any amounts paid on account of an Employee to or
from this or any other employee benefit plan;
(g) Any lump sum payment for unused vacation time;
2-1
<PAGE>
(h) Any amounts paid as severance benefits;
(i) Any amounts paid for relocation expenses (whether
reimbursement or allowance) or as relocation bonuses;
(j) Any amounts paid to an Employee because of such
Employee's assignment to foreign service, including but not
limited to expatriate or foreign service premiums,
allowances for cost of living, transportation, dislocation,
home leave, tax equalization, housing, or children's
education.
Notwithstanding the above, Compensation shall include
contributions made to a cash or deferred plan qualified under
Section 401(k) of the Code as salary reduction contributions. If
an Employee becomes a Participant in the Plan during the Plan
Year, Compensation shall be counted only from the date on which
the Employee became a Participant in the Plan. In addition to
other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary,
for any Plan Year, the annual "Compensation" of any Employee
taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit for purposes of determining
Contributions or Forfeitures under the Plan. In determining the
Compensation of a Participant for purposes of this limitation,
the Compensation of the Participant and of any family member
aggregated with the Participant under the rules of Section
414(q)(6) of the Code shall be combined, except in applying such
rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If, as a
result of the application of such rules the adjusted OBRA '93
annual compensation limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity),
the limitation shall be prorated among the affected Participants
in proportion to each such Participant's Compensation as
determined under this Section prior to the application of this
limitation.
The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living
in accordance with Section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual
2-2
<PAGE>
compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in
the current Plan Year, the Compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the
first day of the first Plan Year beginning on or after January 1,
1994, the OBRA '93 annual compensation limit is $150,000. Any
Participant who is a shareholder, officer, or a Highly
Compensated Employee may elect for any Plan Year, on a form
prescribed by the Administrative Committee, to limit his
Compensation for all purposes under this Plan.
Notwithstanding the above, for purposes of the Actual
Deferral Percentage test and the Average Contribution Percentage
test, Compensation will be the amount specified in Box 1 of IRS
Form W-2 adjusted to include pre-tax elective contributions to a
401(k) plan and/or a cafeteria plan under Section 125 of the
Internal Revenue Code.
2.06 Contribution. The term "Contribution" shall mean money
or other property paid or designated to be paid by the Employer
to the Trust Fund.
2.07 Disability. The term "Disability" shall mean any
illness or other physical or mental condition of a Participant
which renders the Participant incapable of performing his
customary and usual duties for the Employer, or any medically
determinable illness or other physical or mental condition
resulting from a bodily injury, disease, or mental disorder which
in the judgment of the Administrative Committee is permanent and
continuous in nature. The Administrative Committee may require
such medical or other evidence as it deems necessary to judge the
nature and permanency of the Participant's condition.
2.08 Early Retirement Age and Early Retirement Date. There
is no Early Retirement Age or Date under this Plan.
2.09 Effective Date. The term "Effective Date" shall mean
the effective date of this amended and restated Plan, i.e.,
January 1, 1996.
2.10 Employee. The term "Employee" shall mean any person who
is employed by the Employer maintaining the Plan or by any
Related Employer required to be aggregated with the Employer
under Sections 414(b), (c), (m), or (o) of the Code. The term
"Employee" shall also include any Leased Employee who is required
to be treated as an Employee under Sections 414(n) or (o) of the
Code.
2.11 Employer. The term "Employer" shall mean the employer
who adopts this Plan, and any Related Employer or other employer
designated by the Employer with respect to whom service is
counted for the purposes of this Plan.
2.12 Fiduciary. The term "Fiduciary" shall mean any person
who exercises any discretionary authority or control with respect
to the management of the Plan; or who exercises any authority or
control with respect to the management or disposition of its
assets; or who renders investment advice for a fee or other
compensation, directly or indirectly, with respect to any monies
or other property of the Plan, or has any authority or
responsibility to do so; or who has any discretionary authority
or discretionary responsibility in the administration of the
Plan; or who acts to carry out a fiduciary responsibility, when
designated by a named Fiduciary pursuant to authority granted by
the Plan; provided, however that the foregoing definition shall
be subject to any exception granted directly or indirectly by the
provisions of ERISA or any regulation promulgated thereunder.
2-3
<PAGE>
2.13 Forfeiture. The term "Forfeiture" shall mean that
portion of a Participant's account which is not vested in the
Participant, and which is forfeited pursuant to Section 6.02 of
the Plan.
2.14 Highly Compensated Employee. The term "Highly
Compensated Employee" means an Employee who, during the Plan Year
or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying
the constructive ownership rules of Section 318 of the Code
and applying the principles of Code Section 318, for an
unincorporated entity);
(b) has Compensation in excess of $100,000 (as
adjusted by the Commissioner of Internal Revenue for the
relevant year);
(c) has Compensation in excess of $66,000 (as adjusted
by the Commissioner of Internal Revenue for the relevant
year) and is part of the top-paid 20% group of employees
(based on Compensation for the relevant year);
(d) has Compensation in excess of 50% of the dollar
amount prescribed in Code Section 415(b)(1)(A) and is an
officer of the Employer.
If an Employee satisfies the definition in clause (b), (c)
or (d) in the Plan Year but not during the preceding 12-month
period and does not satisfy clause (a) in either period, the
Employee is a Highly Compensated Employee only if he is one of
the 100 most highly compensated Employees for the Plan Year. If
no Employee satisfies the compensation requirement in clause (d)
for the relevant year, the Administrative Committee will treat
the highest paid officer as satisfying clause (d) for that year.
The term "Highly Compensated Employee" also includes any
former Employee who separated from service (or was deemed to have
separated from service, as determined under Treasury Regulations)
prior to the Plan Year, performs no service for the Employer
during the Plan Year, and was a Highly Compensated Employee
either for the separation year or any Plan Year ending on or
after his 55th birthday.
For purposes of this Section 2.14, "Compensation" means
Compensation as defined in Section 415(c)(3) of the Code, and
Compensation must include: (i) elective deferrals under a Code
Section 401(k) arrangement or under a Simplified Employee Pension
maintained by the Employer; and (ii) amounts paid by the Employer
which are not currently includable in the Employee's gross income
because of Sections 125 (cafeteria plans) or 403(b) (tax-
sheltered annuities) of the Code.
The Administrative Committee must make the determination of
who is a Highly Compensated Employee, including the
determinations of the number and identity of the top paid 20%
group, the top 100 paid Employees, the number of officers
includable in clause (d) and the relevant compensation,
consistent with Section 414(q) of the Code and Regulations issued
thereunder. The Employer may make a calendar year election to
determine the Highly
2-4
<PAGE>
Compensated Employees for the Plan Year, as prescribed in
Treasury Regulations. A calendar year election must apply to all
plans and arrangements of the Employer.
For purposes of applying any nondiscrimination test required
under the Plan or under the Code, in a manner consistent with
applicable Treasury Regulations, the Administrative Committee
will not treat as a separate employee a family member (a spouse,
lineal ascendant or descendant, or spouse of a lineal ascendant
or descendant) of a Highly Compensated Employee described in
clause (a) of this Section, or a family member of one of the ten
Highly Compensated Employees with the greatest Compensation for
the Plan Year, but will treat the Highly Compensated Employee and
all family members as a single Highly Compensated Employee. This
aggregation rule applies to a family member even if that family
member is a Highly Compensated Employee without family
aggregation. In addition, employers aggregated under Sections
414(b), (c), (m), or (o) of the Code are treated as a single
Employer.
2.15 Hour of Service.
(a) The term "Hour of Service" shall mean:
(i) Each hour for which an Employee is paid, or
entitled to payment, for the performance of
duties for the Employer. These hours shall be
credited to the Employee for the computation
period or periods in which the duties are
performed. Each overtime hour shall be
credited as a single hour irrespective of any
increase in the rate of pay for such hour;
and
(ii) Each hour for which an Employee is paid, or
entitled to payment, by the Employer 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
(including disability), layoff, jury duty,
military duty, or leave of absence. No more
than 501 hours of service shall be credited
under this Section 2.15(a)(ii) for any single
continuous period (whether or not such period
occurs in a single computation period). Hours
under this Section 2.15(a)(ii) shall be
calculated and credited pursuant to Section
2530.200b-2 of Department of Labor
Regulations, which are incorporated herein by
this reference; and
(iii) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or
agreed to by the Employer. The same hours of
service shall not be credited both under
Section 2.15(a)(i) or Section 2.15(a)(ii), as
the case may be, and under this Section
2.15(a)(iii). These hours shall be credited
to an Employee for the computation period or
periods to which the award or agreement
pertains other than the computation period in
which the award, agreement, or payment is
made.
2-5
<PAGE>
(b) The number of Hours of Service credited to an
Employee shall be determined on the basis of the actual Hours of
Service of the Employee.
(c) Service with the Employer for purposes of
eligibility, vesting, and contributions shall include service
with any Related Employer or other employer specified by the
Employer in Sections 3.01 (eligibility), 6.01 (vesting), or 5.03
(allocations of contributions).
(d) Solely for purposes of determining whether a Break
in Service (as defined in Section 2.04) has occurred in a
computation period, for purposes of participation and vesting, an
Employee who is absent from work for purposes of maternity or
paternity shall receive credit for the Hours of Service which
would otherwise have been credited to the Employee but for such
absence, or in any case in which such hours cannot be determined,
eight (8) Hours of Service for each day of such absence. For
purposes of this paragraph, an absence from work for purposes of
maternity or paternity means an absence (i) by reason of the
Employee's pregnancy; (ii) by reason of the birth of the
Employee's child; (iii) by reason of the placement of a child
with the Employee in connection with the adoption of such child
by such Employee; or (iv) for purposes of caring for such child
for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited (i) in the computation period in which the
absence begins if the crediting is necessary to prevent a Break
in Service in that period, or (ii) in all other cases, in the
following computation period. If the elapsed time method is used,
the severance from service date of an Employee who is absent from
service beyond the first anniversary of the first day of absence
by reason of maternity or paternity absence is the second
anniversary of the first date of absence. The period between the
first and second anniversary will be treated as neither a period
of service nor a period of severance.
2.16 Investment Manager. The term "Investment Manager" shall
mean an "investment manager" as defined by Section 3(38) of
ERISA.
2.17 Leased Employee. The term "Leased Employee" means any
person (other than an employee of the Employer) who pursuant to
an agreement between the Employer and any other person ("leasing
organization") has performed services for the Employer [or for
the Employer and related persons determined in accordance with
Section 414(n)(6) of the Code] on a substantially full time basis
for a period of at least one year, and such services are of a
type historically performed by employees in the business field of
the Employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to
services performed for the Employer shall be treated as provided
by the Employer.
A Leased Employee shall not be considered an Employee of the
Employer if:
(a) such employee is covered by a money purchase
pension plan providing:
(i) a non-integrated employer contribution rate
of at least ten percent (10%) of
compensation, as defined in Section 415(c)(3)
of the Code, but including amounts
contributed pursuant to a salary reduction
agreement which are excludable from the
employee's
2-6
<PAGE>
gross income under Section 125, Section
402(a)(8), Section 402(h) or Section 403(b)
of the Code,
(ii) immediate participation, and
(iii) full and immediate vesting; and
(b) Leased Employees do not constitute more than
twenty percent (20%) of the Employer's nonhighly compensated
Employees.
2.18 Net Income. The term "Net Income" shall mean net income
of the Employer prior to income taxes (including but not limited
to federal and state income taxes) as reflected by the Employer's
federal income tax return for the period, as originally filed,
before deduction of the Employer's Contribution to the Trust Fund
(but after the deduction of any Employer Contribution to any
pension trust established by the Employer), and without giving
effect to dividends received by the Employer from stock held in
other corporations.
2.19 Normal Retirement Age and Normal Retirement Date. The
terms "Normal Retirement Age" and "Normal Retirement Date" shall
mean the date on which a Participant attains age sixty-five (65).
2.20 Participant. The term "Participant" shall mean any
Employee who becomes eligible to participate in accordance with
the provisions of Section 3.01 of the Plan.
2.21 Plan. The term "Plan" shall mean the plan embodied in
this 401(k) Savings Plan Agreement.
2.22 Plan Administrator. The term "Plan Administrator" shall
mean the Employer. The Plan Administrator shall constitute a
"named Fiduciary" for purposes of Section 402(a)(2) of ERISA.
2.23 Plan Year. The term "Plan Year" shall mean the twelve
(12) consecutive month period ending December 31. The Plan Year
shall constitute the Plan's "limitation year" for the purpose of
measuring maximum allocations to Participants under the Plan.
2.24 Related Employer. The term "Related Employer" shall
mean any corporation which is a member of a "controlled group of
corporations" [as defined in Section 414(b) of the Code] of which
the Employer is a component member, and each trade, business, or
practice (whether or not incorporated) which is under "common
control" with the Employer [as defined in Section 414(c) of the
Code]. The term "Related Employer" shall also mean any
corporation, partnership, or other organization which is a member
of an "affiliated service group" [as defined in Section 414(m) of
the Code] of which the Employer is a component member; and any
organization which is required by regulations issued under
Section 414(o) of the Code to be treated as a Related Employer.
2-7
<PAGE>
2.25 Top Heavy Plan.
(a) A plan is a "Top Heavy Plan" for a Plan Year, if
any of the following conditions exists:
(i) If the top heavy ratio for this Plan exceeds
sixty percent (60%) and this Plan is not part
of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(ii) If this Plan is 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
sixty percent (60%).
(iii) If this Plan is a part of a Required
Aggregation Group and part of a Permissive
Aggregation Group of plans and the top heavy
ratio for the Permissive Aggregation Group
exceeds sixty percent (60%).
The "top heavy ratio" for purposes of determining whether the
Plan is a Top Heavy Plan is a fraction, the numerator of which is
the sum of the Account Balances or Present Value of Accrued
Benefits of Key Employees under this Plan and any plan of an
Aggregation Group, as of the Determination Date, and the
denominator of which is a similar sum determined for all
Participants. The top heavy ratio shall be calculated without
regard to any Non-Key Employee who was formerly a Key Employee.
The top heavy ratio shall be calculated in accordance with
Section 416 of the Code and applicable Regulations.
(b) If the Employer maintains any other tax-qualified
plan (including any simplified employee pension plan), this Plan
(and any other plan with the relevant Aggregation Group) is a Top
Heavy Plan only if it is part of the Required Aggregation Group,
and the Required Aggregation Group is a Top Heavy Group. An
Aggregation Group is a "Top Heavy Group" if the top heavy ratio
(determined as of the Determination Date) for both the Required
Aggregation Group and the Permissive Aggregation Group exceeds
sixty percent (60%). The "top heavy ratio" for purposes of
determining whether an Aggregation Group is a "Top Heavy Group"
is a fraction, the numerator of which is the sum of the Present
Value of Accrued Benefits of Key Employees under all defined
benefit plans within the Aggregation Group, and the Account
Balances of Key Employees under the defined contribution plans
within the Aggregation Group, as of the Determination Date, and
the denominator of which is a similar sum determined for all
Participants. The top heavy ratio shall be calculated without
regard to any Non-Key Employee who was formerly a Key Employee.
In addition, for Plan Years beginning after December 31, 1984, if
a Participant or former Participant has not performed services
for the Employer maintaining the Plan (other than benefits
provided under the Plan) at any time during the five (5) year
period ending on the Determination Date, the Account Balances
and/or Present Value of Accrued Benefits for such Participant or
former Participant shall not be taken into account for purposes
of determining whether this Plan is a Top Heavy Plan. 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. The Accrued
Benefit of a Participant (other than a Key Employee) shall be
determined under (a) the method,
2-8
<PAGE>
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 Section 411(b)(1)(C) of the Code.
(c) For purposes of this Section 2.25:
(i) The term "Required Aggregation Group" shall
mean (A) each qualified plan of the Employer
in which a Key Employee participates or
participated at any time during the
determination period (regardless of whether
the Plan has terminated); and (B) any other
qualified plan of the Employer which enables
a plan described in (A) to meet the
requirements of Sections 401(a)(4) or 410 of
the Code.
(ii) The term "Permissive Aggregation Group" shall
mean the Required Aggregation Group plus any
other qualified plans maintained by the
Employer, but only if such group would
satisfy in the aggregate the requirements of
Sections 401(a)(4) and 410 of the Code. The
Administrative Committee shall determine
which plans to take into account in
determining the Permissive Aggregation Group.
(iii) The term "Determination Date" shall mean, for
any Plan Year, the Anniversary Date of the
preceding Plan Year or, in the case of the
first Plan Year of the Plan, the Anniversary
Date of that Plan Year.
(iv) The term "Employer" shall mean the Employer
and any Related Employer.
(v) The term "valuation date" shall mean the
Anniversary Date of this Plan, or the date
elected by an employer under any other plan
included within an Aggregation Group as of
which Account Balances or Accrued Benefits
are valued for purposes of calculating the
top heavy ratio.
(vi) The term "Key Employee" shall mean, as of any
Determination Date (as defined above), any
Employee or former Employee (and the
Beneficiary or Beneficiaries of such
Employee) who, at any time during the Plan
Year (which includes the Determination Date)
or during the preceding four Plan Years, is
an officer of the Employer who has an annual
Compensation greater than fifty percent (50%)
of the amount in effect under Section
415(b)(1)(A) of the Code for any such Plan
Year; one of the ten (10) Employees owning
the largest interests in the Employer and
having annual Compensation from the Employer
of more than the limitation in
2-9
<PAGE>
effect under Section 415(c)(1)(A) of the
Code; a more than five percent (5%) owner of
the Employer; or a more than one percent (1%)
owner of the Employer who has annual
Compensation of more than One Hundred Fifty
Thousand Dollars ($150,000). Annual
Compensation means compensation as defined in
Section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant
to a salary reduction agreement which are
excludable from the Employee's gross income
under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code. The
constructive ownership rules of Section 318
of the Code (or the principles of that
Section, in the case of an unincorporated
Employer) will apply for purposes of
determining ownership in the Employer. A
"five percent (5%) owner" or a "one percent
(1%) owner" means any person who owns (or is
considered as owning within the meaning of
Code Section 318) more than five percent (5%)
or one percent (1%), respectively, of the
outstanding stock of the Employer, or stock
possessing more than five percent (5%) or one
percent (1%), respectively, of the total
combined voting power of all stock of the
Employer or, in the case of an unincorporated
business, any person who owns more than five
percent (5%) or one percent (1%),
respectively, of the capital or profits
interest in the Employer. In determining the
percentage of ownership under this paragraph,
employers that would otherwise be aggregated
under Code Sections 414(b), (c), and (m)
shall be treated as separate employers.
However, in determining whether an individual
has annual Compensation of more than
$150,000, Compensation from each employer
required to be aggregated under Code Sections
414(b), (c), and (m) shall be taken into
account. The determination of an Employee's
status as a Key Employee shall be made by the
Administrative Committee, in accordance with
rules set forth in Section 416(i)(1) of the
Code and applicable Regulations.
(vii) The term "Non-Key Employee" shall mean, as of
any Determination Date, any Employee who is
not a Key Employee.
(d) For purposes of this Section 2.25, a Participant's
"Account Balance" as of the Determination Date is the sum of:
(i) The balance in his Employer account as of the
most recent valuation occurring within a
twelve (12) month period ending on the
Determination Date.
(ii) An adjustment for any Contributions due as of
the Determination Date. Such adjustment shall
be the amount of any Contributions actually
made after the valuation date but before the
Determination
2-10
<PAGE>
Date, except for the first Plan Year when
such adjustment shall also reflect the amount
of any Contributions made after the
Determination Date that are allocated as of a
date in that first Plan Year.
(iii) Any distributions made within the Plan Year
that includes the Determination Date or
within the four (4) preceding Plan Years.
However, in the case of distributions made
after the valuation date and prior to the
Determination Date, such distributions are
not included as distributions for top heavy
purposes to the extent that such
distributions are already included in the
Participant's Account Balance as of the
valuation date. Notwithstanding any contrary
provision to this Plan, all distributions,
including distributions made prior to
January 1, 1984, and distributions made under
a terminated plan which, but for its
termination, would have been required to be
included in an Aggregation Group, will be
counted.
(iv) Any Employee contributions, except deductible
Participant contributions.
(v) With respect to unrelated rollovers and
transfers (which are both initiated by the
Employee and made from a plan maintained by
one employer to a plan maintained by another
employer), if this Plan provides for
rollovers or transfers, it shall always
consider such rollover or transfer as a
distribution for the purposes of this Section
2.25. If this Plan is the plan accepting such
rollovers or transfers, it shall not consider
such rollovers or transfers accepted after
December 31, 1983, as part of the
Participant's Account Balance. However,
rollovers or transfers accepted prior to
January 1, 1984, shall be considered as part
of the Participant's Account Balance.
(vi) With respect to related rollovers and
transfers (either not initiated by the
Employee or made to a plan maintained by the
same employer), if this Plan provides the
rollover or transfer, it shall not be counted
as a distribution for purposes of this
Section 2.25. If this Plan is the plan
accepting such rollover or transfer, it shall
consider such rollover or transfer as part of
the Participant's Account Balance,
irrespective of the date on which such
rollover or transfer is accepted.
(e) For purposes of this Section 2.25, a Participant's
"Present Value of Accrued Benefit," in the case of any defined
benefit plan, shall be determined:
2-11
<PAGE>
(i) As of the most recent "actuarial valuation
date," which is the most recent valuation
date within a twelve (12) month period ending
on the Determination Date.
(ii) For the first Plan Year, as if (A) the
Participant terminated service as of the
Determination Date; or (B) the Participant
terminated service as of the actuarial
valuation date, but taking into account the
estimated Present Value of Accrued Benefits
as of the Determination Date.
(iii) For any other Plan Year, as if the
Participant terminated service as of the
actuarial valuation date.
(iv) The actuarial valuation date must be the same
date used for computing the defined benefit
plan minimum funding costs, regardless of
whether a valuation is performed that Plan
Year.
(f) For purposes of this Section 2.25, a Participant's
"Present Value of Accrued Benefit", in the case of a defined
benefit plan, shall be determined under the top heavy provisions
of the applicable defined benefit plan.
(g) Notwithstanding any contrary provision, the top
heavy rules described in this Section 2.25 shall be applied in
accordance with Section 416 of the Code and applicable
regulations.
2.26 Trust Fund. The term "Trust Fund" shall mean the fund
established by the Trustee under this Plan, consisting of
contributions, and any increases or decreases in the value of the
same. The Trustee may combine the trust funds created under the
plans of all employers designated by the Employer with respect to
this Plan into a single Trust Fund for investment purposes.
2.27 Trustee. The term "Trustee" shall mean the person(s)
named in a Trust Agreement, entered into between the Employer and
the Trustee, to act as Trustee or any successor.
2.28 Year of Service. The term "Year of Service" shall mean
the twelve (12) consecutive month periods specified in the Plan
for purposes of measuring eligibility for participation (Section
3.01) and vesting (Section 6.01).
2.29 Valuation Date and Valuation Period. The term
"Valuation Date" shall mean any business day of the Plan Year.
2-12
<PAGE>
3. ELIGIBILITY AND PARTICIPATION
3.01 Eligibility to Participate.
(a) Each Employee of SOLA Optical USA, a division of
SOLA International Inc., and each other U.S.-based employee of
SOLA International Inc. who (1) has completed at least one Year
of Service and (2) does not belong to a unit of employees
covered by a collective bargaining agreement between the unit's
employee representative and the Employer, pursuant to which
retirement benefits were the subject of good-faith bargaining
(for this purpose, "employee representative" does not include any
organization more than half of whose members are employees who
are owners, officers or executives of the Employer), shall become
a Participant on the first day of the calendar quarter, i.e.,
January 1, April 1, July 1 or October 1 following the date on
which the Employee completes all of the eligibility requirements
of this Plan.
(b) For purposes of eligibility, the term "Year of
Service" shall mean a twelve (12) consecutive month period during
which an Employee completes at least one thousand (1,000) Hours
of Service, measured from the date the Employee completes his
first Hour of Service. The Plan shall measure the second and any
subsequent twelve (12) month period from the first day of the
Plan Year in which the first anniversary of the Employee's first
Hour of Service occurs, regardless of whether the Employee is
entitled to be credited with one thousand (1,000) Hours of
Service during the initial eligibility computation period. An
Employee who is credited with one thousand (1,000) Hours of
Service in both the initial eligibility computation period and
the first Plan Year which commences prior to the first
anniversary of the Employee's initial eligibility computation
period will be credited with two (2) Years of Service for
purposes of eligibility. For purposes of determining eligibility,
all service with the Employer and with any other U.S. subsidiary
or division of the Employer shall be counted. In addition, all
service with American Optical Corporation shall be counted for
eligibility purposes.
(c) Any Employee who was a participant in the Prior
Plan on the day before the Effective Date of this Plan shall
continue as a Participant in the Plan.
(d) If a Participant does not terminate employment but
ceases to be a member of a class or unit of employees covered by
this Plan, as provided under Section 3.01(a), then during any
full Plan Year that such a Participant is not a member of the
covered class or unit, the Participant shall not be entitled to
make Elective Deferrals or Voluntary Contributions, or share in
the allocation of Contributions and Forfeitures except to the
extent of his Compensation paid for services rendered while he
was a member of the covered class or unit. However, if such a
Participant returns to the eligible class or unit of employees
covered by this Plan, he shall participate immediately upon
returning to the eligible class of employees. If an Employee who
is not a Participant becomes a member of a class or unit of
Employees covered by this Plan, he shall participate in the Plan
immediately if he has satisfied all of the conditions of Section
3.01 and would have been a member of the covered class or unit
during his period of service with the Employer.
3.02 Reemployment. If a Participant's employment with the
Employer terminates and he is subsequently reemployed, he will
become a Participant on his reemployment date. If an
3-1
<PAGE>
Employee who had completed the eligibility requirements was not a
Participant when he terminated employment and is subsequently
reemployed, he will become a Participant on the later of (a) the
first day of the calendar quarter next following one year from
his original employment date; or (b) his reemployment date. An
Employee who does not fall in one of the above categories will be
considered a new Employee for eligibility purposes and shall be
required to complete the requirements specified in Section 3.01
of the Plan to become a Participant.
3.03 Determination of Eligibility. The records of the
Employer as to an Employee's or Participant's employment, Hours
of Service, Years of Service, Breaks in Service, termination of
employment, reemployment, leaves of absence, and Compensation
will be conclusive on all persons unless demonstrated to the
Employer's satisfaction to be incorrect. All doubtful cases of
eligibility to participate in this Plan shall be resolved by the
Administrative Committee, whose determination in such cases shall
be conclusive and binding upon all persons, except as otherwise
provided by law.
3-2
<PAGE>
4. CONTRIBUTIONS
4.01 Participant Elective Deferrals.
(a) Election to Defer. Each Participant may elect to
defer a portion of his pre-tax Compensation for each Plan Year,
as an Elective Deferral, in an amount not greater than sixteen
percent (16%) nor less than one percent (1%) of his Compensation.
A Maximum Elective Deferral (expressed as a percentage of
Compensation) may be established by the Administrative Committee
and announced to Participants from time to time. However, a
Participant's Elective Deferrals shall, in no event, exceed Nine
Thousand Five Hundred Dollars ($9,500) for any taxable year of
the Participant (or such larger amount as may at any time be
determined under Section 402(g)(5) of the Code in effect at the
beginning of such taxable year). Notwithstanding the above, the
Administrative Committee may limit the percentage of Compensation
which may be deferred by Highly Compensated Employees in any Plan
Year in order to assure that the Plan does not discriminate in
favor of Highly Compensated Employees.
(i) The portion of Compensation which a
Participant elects to defer under this
Section 4.01 shall be transferred to the
Trustee, and credited to an Elective Deferral
account. Each Participant's Elective Deferral
account shall share in the earnings and
losses of the Trust Fund, and shall be fully
vested at all times.
(ii) Elective Deferrals shall be made in whole
percentage increments of Compensation for a
Plan Year. The Employer shall have the right
to direct that such increments of
Compensation shall be rounded to the next
lowest or highest dollar.
(iii) Under the payroll deduction method being
utilized, each new Participant shall specify
the amount of his Elective Deferral by new
designating a percentage amount, on a form
provided by and delivered to the Employer.
Such Elective Deferral shall be deducted by
withholding from a Participant's Compensation
for a payroll period, and shall be
transmitted to the Trustee within a
reasonable time after the payroll period for
which deductions are made occurs. Payment of
Elective Deferrals through payroll deduction
shall be subject to such reasonable and
nondiscriminatory restrictions regarding the
frequency of change of percentage amounts to
be withheld as the Administrative Committee
and Employer shall determine and announce in
writing to the Participants.
(iv) All designations or changes of designation of
the amount of Elective Deferrals to be
withheld by payroll deduction shall be made
and effective in accordance with the uniform
rules prescribed by the Administrative
Committee concerning elections to defer. A
payroll deduction designation shall be
effective until it is succeeded
4-1
<PAGE>
by another valid payroll deduction
designation, until the Participant ceases
participation, or until the Participant's
deferrals are otherwise suspended or
terminated.
(v) For any Plan Year, a Participant may formally
elect to suspend Elective Deferrals pursuant
to this Section 4.01. Suspension of Elective
Deferrals shall occur as soon as
administratively feasible after the election
to suspend. If notice is not timely received,
such notice shall be effective commencing
with the next succeeding payroll period. A
Participant who suspends Elective Deferrals
shall be prohibited from resuming Elective
Deferrals until the first day of the payroll
period after the first day of the next
calendar quarter following the date of such
suspension. Recommencement of Elective
Deferrals shall occur only when the
Participant subsequently makes an appropriate
election pursuant to the uniform rules
prescribed by the Administrative Committee.
While a Participant is on an authorized leave
of absence from the Employer, he shall be
deemed to have suspended Elective Deferrals,
and may recommence Elective Deferrals
following his return to active employment.
(b) Distribution Of Excess Elective Deferrals. In the
event a Participant participates in more than one plan which
permits Elective Deferrals, such Participant may assign to the
Plan any Excess Elective Deferrals made during a calendar year by
notifying the Plan Administrator on or before March 1 of the
following calendar year of the amount of the Excess Elective
Deferrals to be assigned to the Plan. Notwithstanding the
immediately preceding sentence, a Participant is deemed to have
notified the Plan Administrator of the amount of the Excess
Elective Deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plans of this
Employer. Also, notwithstanding any other provision of the Plan,
Excess Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than April 15 to
any Participant to whose account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess Elective
Deferrals for such calendar year.
(i) For purposes of this Section 4.01, the
following definitions shall apply:
(A) "Elective Deferrals" shall mean any
Employer Contributions made to the Plan
at the election of the Participant, in
lieu of cash compensation, and shall
include contributions made pursuant to a
salary reduction agreement or other
deferral mechanism. With respect to any
taxable year, a Participant's Elective
Deferral is the sum of all Employer
Contributions made on behalf of such
Participant pursuant to an election to
defer under any qualified cash or
deferred arrangement as described in
Section 401(k) of the Code, any
simplified employee
4-2
<PAGE>
pension cash or deferred arrangement as
described in Code Section 402(h)(1)(B),
any eligible deferred compensation plan
under Code Section 457, any plan as
described under Code Section 501(c)(18),
and any Employer Contributions made on
behalf of a Participant for the purchase
of an annuity contract under Section
403(b) of the Code pursuant to a salary
reduction agreement.
(B) "Excess Elective Deferrals" shall mean
those Elective Deferrals that are
includable in a Participant's gross
income under Section 402(g) of the Code
to the extent such Participant's
Elective Deferrals for a calendar year
exceed Nine Thousand Five Hundred
Dollars ($9,500) or such larger amount
as determined under Section 402(g)(5) of
the Code for the calendar year. Excess
Elective Deferrals shall be treated as
Annual Additions under the Plan.
(ii) Excess Elective Deferrals shall be adjusted
for any income or loss in accordance with
Section 5.04 of the Plan.
(iii) The distribution of Excess Elective Deferrals
shall be taken from the Investment Funds
based on rules established by the
Administrative Committee.
(c) Actual Deferral Percentage Test. The Actual
Deferral Percentage (hereinafter "ADP") for Employees who are
Highly Compensated Employees for each Plan Year and the ADP for
all other eligible Employees for the same Plan Year must satisfy
one of the following tests:
(i) The ADP for eligible Highly Compensated
Employees for the Plan Year shall not exceed
the ADP for all other eligible Employees for
the same Plan Year multiplied by 1.25, or
(ii) The ADP for eligible Highly Compensated
Employees for the Plan Year shall not exceed
the ADP for all other eligible Employees for
the same Plan Year multiplied by 2.0,
provided that the ADP for eligible Highly
Compensated Employees does not exceed the ADP
for Participants who are Non-Highly
Compensated Employees by more than two (2)
percentage points or such lesser amount as
the Secretary of the Treasury shall prescribe
to prevent the multiple use of this
alternative limitation with respect to any
Highly Compensated Employee.
(A) Special Rules:
(1) The ADP for any eligible Highly
Compensated Employee for the Plan
Year who is eligible to have
Elective Deferrals (and Qualified
Nonelective
4-3
<PAGE>
Contributions or Qualified Matching
Contributions, or both, if treated
as Employer Contributions for
purposes of the ADP test) allocated
to his or her accounts under two or
more arrangements described in
Section 401(k) of the Code, that
are maintained by the Employer,
shall be determined as if such
Elective Deferrals (and Qualified
Nonelective Contributions or
Qualified Matching Contributions,
or both, if treated as Employer
Contributions for purposes of the
ADP test) were made under a single
arrangement. If a Highly
Compensated Employee participates
in two or more cash or deferred
arrangements that have different
Plan Years, all cash or deferred
arrangements ending with or within
the same calendar year shall be
treated as a single arrangement.
(2) In the event that this Plan
satisfies the requirements of
Sections 401(k), 401(a)(4), or
410(b) of the Code only if
aggregated with one or more other
plans, or if one or more other
plans satisfy the requirements of
such Sections of the Code only if
aggregated with this Plan, then
this Section shall be applied by
determining the ADP of Employees as
if all such plans were a single
plan. For Plan Years beginning
after December 31, 1989, plans may
be aggregated in order to satisfy
Section 401(k) of the Code only if
they have the same Plan Year.
(3) For purposes of determining the ADP
of an eligible Employee who is a
five percent owner or one of the
ten most highly paid Highly
Compensated Employees, the Elective
Deferrals (and Qualified
Nonelective Contributions or
Qualified Matching Contributions,
or both, if treated as Employer
Contributions for purposes of the
ADP test) and Compensation of such
Employee shall include the Elective
Deferrals (and, if applicable, such
Qualified Nonelective Contributions
or Qualified Matching
Contributions, or both) and
Compensation for the Plan Year of
family members (as defined in Code
Section 414(q) (6)(B)). Family
members, with respect to such
Highly Compensated Employees, shall
be disregarded as separate
employees in determining the ADP
both for eligible Highly
4-4
<PAGE>
Compensated Employees and all other
eligible Employees.
(4) For purposes of determining the ADP
test, Elective Deferrals, Qualified
Nonelective Contributions and
Qualified Matching Contributions
must be made before the last day of
the twelve month period immediately
following the Plan Year to which
the contributions apply.
(5) The Employer shall maintain records
sufficient to demonstrate
satisfaction of the ADP test and
the amount of Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, used in
such test.
(6) The determination and treatment of
the ADP amounts of any Employee
shall satisfy such other
requirements as may be prescribed
by the Secretary of the Treasury.
(iii) Qualified Matching Contributions and
Qualified Nonelective Contributions may be
taken into account as Employer Contributions
for purposes of calculating the Actual
Deferral Percentage test. In determining
Employer Contributions for the purpose of the
ADP test, the Employer shall include
Qualified Matching Contributions or Qualified
Nonelective Contributions, under this Plan or
any other plan of the Employer, as provided
by regulations under the Code.
The amount of Qualified Matching
Contributions or Qualified Nonelective
Contributions (if any) made under this
Section and taken into account as Employer
Contributions for purposes of calculating the
ADP test, subject to such other requirements
as may be prescribed by the Secretary of the
Treasury, shall be the amount needed to meet
the Actual Deferral Percentage test stated in
Section 4.01(c).
(iv) For purposes of this Article 4, the following
definitions shall apply:
(A) The term "Highly Compensated Employee"
shall have the meaning set forth in
Section 2.14 of the Plan.
(B) The term "Actual Deferral Percentage"
for a specified group of eligible
Employees for a Plan Year shall mean the
4-5
<PAGE>
average of the actual deferral ratios,
calculated separately for each Employee
in the group, of (1) the amount of
Elective Deferrals (including Excess
Elective Deferrals, Qualified
Nonelective Contributions and Qualified
Matching Contributions treated as
Elective Deferrals at the Employer's
election) made on behalf of each
Employee for the Plan Year but excluding
Elective Deferrals that are taken into
account in the Contribution Percentage
test (provided the ADP test is satisfied
both with and without exclusion of these
Elective Deferrals) to (2) the
Employee's Compensation for the Plan
Year whether or not the Employee was a
Participant for the entire Plan Year.
Such actual deferral ratios and the
Actual Deferral Percentage for each
group shall be calculated to the nearest
one-hundredth of one percent of the
Employee's Compensation. The actual
deferral ratio of an eligible Employee
who makes no Elective Deferral is zero.
(C) For purposes of this Article 4,
"Qualified Matching Contributions" shall
mean Employer contributions that are
made to the Plan, pursuant to Section
401(m) of the Code, which are subject to
the distribution and nonforfeitability
requirements under Section 401(k) of the
Code when made.
(d) Distribution Of Excess Contributions.
Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2 months after the last
day of the Plan Year in which such excess amounts arose, a ten
percent (10%) excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees. The amount of Excess
Contributions to be distributed shall be reduced by Excess
Elective Deferrals previously distributed for the taxable year
ending in the same Plan Year and Excess Elective Deferrals to be
distributed for a taxable year will be reduced by Excess
Contributions previously distributed for the Plan Year beginning
in such taxable year. In addition, Excess Contributions of
Participants who are subject to the family member aggregation
rules of Section 414(q)(6) of the Code shall be allocated among
the family members in proportion to the Elective Deferrals (and
amounts treated as Elective Deferrals) of each family member that
is combined to determine the combined ADP.
(i) "Excess Contributions" shall mean, with
respect to any Plan Year, the excess of:
(A) The aggregate amount of Elective
Deferrals actually taken into account in
computing the ADP of Highly Compensated
Employees for such Plan Year, over
4-6
<PAGE>
(B) The maximum amount of such contributions
permitted by the ADP test (determined by
reducing contributions made on behalf of
Highly Compensated Employees in order of
the ADPs, beginning with the highest of
such percentages).
(ii) Excess Contributions shall be adjusted for
any income or loss in accordance with Section
5.04 of the Plan.
(iii) Amount of Excess Contributions. The amount of
Excess Contributions for a Highly Compensated
Employee for a Plan Year is to be determined
by the following leveling method, under which
the actual deferral ratio of the Highly
Compensated Employee with the highest actual
deferral ratio is reduced to the extent
required to:
(A) Enable the arrangement to satisfy the
Actual Deferral Percentage test, or
(B) Cause such Highly Compensated Employee's
actual deferral ratio to equal the ratio
of the Highly Compensated Employee with
the next highest actual deferral ratio.
This process must be repeated until the cash
or deferred arrangement satisfies the Actual
Deferral Percentage test. For each Highly
Compensated Employee, the amount of Excess
Contributions is equal to the total Elective
Deferral, plus Qualified Nonelective
Contributions and Qualified Matching
Contributions treated as elective
contributions, on behalf of the Employee
(determined prior to the application of this
Section 4.01(d)(iii)) minus the amount
determined by multiplying the Employee's
actual deferral ratio (determined after
application of this Section 4.01(d)(iii) by
his Compensation used in determining such
ratio.
(iv) The distribution of Excess Contributions
shall be taken from the Investment Funds
based on rules established by the
Administrative Committee.
4.02 Participant Voluntary Contributions. Participant
Voluntary Contributions will no longer be accepted. The
Administrative Committee will continue to maintain a
Participant's Voluntary Contribution account in accordance with
Section 5.01 of the Plan.
4.03 Employer Contributions.
(a) Matching Contribution. The Employer may make
Employer Matching Contributions with respect to Elective
Deferrals, for each Plan Year while this Plan is in effect, in an
amount up to $.50 for each dollar of Elective Deferrals made by
each respective Participant during the period, up to a maximum
Elective Deferral of six percent (6%) of the
4-7
<PAGE>
Participant's Compensation (or such greater or lesser amount as
the Administrative Committee shall, in its discretion determine
from year to year).
(b) The Employer's Contribution, if any, may consist
of cash, "qualifying employer securities" or "qualifying employer
real property" [as defined in Section 407(d) of ERISA], or of any
other property acceptable to the Trustee.
(c) The Employer shall, notwithstanding any other
provision of the Plan, make all contributions to the Plan without
regard to current or accumulated earnings and profits for the
taxable year or years ending with or within such Plan Year.
Notwithstanding the foregoing, the Plan shall continue to be
designed to qualify as a profit-sharing plan for purposes of
Sections 401(a), 402, and 417 of the Code.
(d) The Employer's total Contributions for a Plan Year
shall not exceed the maximum amount deductible on account of the
Employer's Contribution for its corresponding taxable year for
federal income tax purposes. In the event the Employer has
adopted any other employee pension benefit plan or plans
qualified under Section 401 of the Code, covering the same
Employees covered by this Plan, the total contributions made in
any Plan Year under all such plans shall not exceed the amounts
deductible by the Employer under the Code.
(e) Qualified Nonelective Contributions. In lieu of
distributing Excess Contributions as provided in Section 4.01(d)
of the Plan, or Excess Aggregate Contributions as provided in
Section 4.04(d) of the Plan, the Employer may make Qualified
Nonelective Contributions on behalf of eligible Employees who are
not Highly Compensated Employees in an amount sufficient to
satisfy either the actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to regulations
under the Code.
(i) If the Employer makes such contributions to
the Plan, then the amount of such
contributions for each Plan Year shall be an
amount determined by the Employer. Allocation
of Qualified Nonelective Contributions shall
be made to the accounts of eligible Employees
who are not Highly Compensated Employees.
Allocation of Qualified Nonelective
Contributions shall be made in the ratio in
which each Participant's Compensation for the
Plan Year bears to the total Compensation of
all Participants for such Plan Year.
(ii) For purposes of this Section 4.03(e) the term
"Qualified Nonelective Contributions" shall
mean contributions (other than Matching
Contribution) made by the Employer and
allocated to Participants' accounts that the
Participants may not elect to receive in cash
until distributed from the Plan; that are
nonforfeitable when made; and that are
distributable only in accordance with
distribution provisions that are applicable
to Elective Deferrals in accordance with Code
Section 401(k)(2)(B).
4-8
<PAGE>
(f) Qualified Matching Contributions. In lieu of
distributing Excess Contributions as provided in Section 4.01(d)
of the Plan, or Excess Aggregate Contributions as provided in
Section 4.04(d) of the Plan, the Employer may make Qualified
Matching Contributions on behalf of eligible Employees who are
not Highly Compensated Employees in an amount sufficient to
satisfy either the actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to regulations
under the Code.
(i) If the Employer makes such contributions to
the Plan, then the amount of such
contributions for each Plan Year shall be an
amount determined by the Employer. Allocation
of Qualified Matching Contributions shall be
made to the accounts of eligible Employees
who are not Highly Compensated Employees.
Allocation of Qualified Matching
Contributions shall be made in the ratio in
which each Participant's Compensation for the
Plan Year bears to the total Compensation of
all Participants for such Plan Year.
(ii) For purposes of this Section 4.03(g) the term
"Qualified Matching Contributions" shall mean
matching contributions made by the Employer
and allocated to Participants' accounts that
the Participants may not elect to receive in
cash until distributed from the Plan; that
are nonforfeitable when made; and that are
distributable only in accordance with
distribution provisions that are applicable
to Elective Deferrals as specified in Code
Section 401(k)(2)(B).
4.04 Limitations on Employee Contributions and Matching
Contributions.
(a) The Average Contribution Percentage for eligible
Employees who are Highly Compensated Employees for each Plan Year
and the Average Contribution Percentage for all other eligible
Employees for the same Plan Year must satisfy one of the
following tests:
(i) The Average Contribution Percentage for
eligible Highly Compensated Employees for the
Plan Year shall not exceed the Average
Contribution Percentage for all other
eligible Employees for the same Plan Year by
1.25; or
(ii) The Average Contribution Percentage for
eligible Highly Compensated Employees for the
Plan Year shall not exceed the Average
Contribution Percentage for all other
eligible Employees for the same Plan Year
multiplied by two (2), provided that the
Average Contribution Percentage for eligible
Highly Compensated Employees does not exceed
the Average Contribution Percentage for all
other eligible Employees by more than two (2)
percentage points or such lesser amount as
the Secretary of the Treasury shall prescribe
to prevent the multiple use of this
alternative limitation with respect to any
eligible Highly Compensated Employee.
4-9
<PAGE>
(b) Special Rules:
(i) For purposes of this Section, the
Contribution Percentage for any eligible
Highly Compensated Employee who is eligible
to have Contribution Percentage Amounts
allocated to his or her account under two or
more plans described in Section 401(a) of the
Code, or arrangements described in Section
401(k) of the Code, that are maintained by
the Employer, shall be determined as if the
total of such Contribution Percentage Amounts
was made under each plan. If a Highly
Compensated Employee participates in two or
more cash or deferred arrangements that have
different plan years, all cash or deferred
arrangements ending with or within the same
calendar year shall be treated as a single
arrangement.
(ii) In the event that this Plan satisfies the
requirements of Section 410(b) of the Code
only if aggregated with one or more other
plans, or if one or more other plans satisfy
the requirements of Section 410(b) of the
Code only if aggregated with this Plan, then
this Section shall be applied by determining
the Contribution Percentage of Employees as
if all such plans were a single Plan. For
Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy
Section 401(m) of the Code only if they have
the same Plan Year.
(iii) For purposes of determining the Contribution
Percentage of an eligible Employee who is a
five percent owner or one of the ten most
highly paid Highly Compensated Employees, the
Contribution Percentage Amounts and
Compensation of such Employee shall include
the Contribution Percentage Amounts and
Compensation of family members (as defined in
Code Section 414(q)(6)(B)). Family members,
with respect to eligible Highly Compensated
Employees, shall be disregarded as separate
Employees in determining the Contribution
Percentage both for eligible Highly
Compensated Employees and for all other
eligible Employees.
(iv) For purposes of determining the Contribution
Percentage, Employee Contributions are
considered to have been made in the Plan Year
in which contributed to the trust. Matching
Contributions will be considered made for a
Plan Year if made no later than the end of
the twelve month period beginning on the day
after the close of the Plan Year and
allocated to a Participant's account for the
Plan Year. The Employer shall maintain
records sufficient to demonstrate
satisfaction of the ADP test and the amount
of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both,
used in such test, if any.
4-10
<PAGE>
(v) The Employer shall maintain records
sufficient to demonstrate satisfaction of the
Average Contribution Percentage test and the
amount of Qualified Nonelective Contributions
or Qualified Matching Contributions, or both,
used in such test, if any.
(vi) The determination and treatment of the
Contribution Percentage of any eligible
Employee shall satisfy such other
requirements as may be prescribed by the
Secretary of the Treasury.
(vii) Multiple Use: If one or more Highly
Compensated Employees participate in both a
Cash or Deferred Arrangement ("CODA") and a
plan subject to the Average Contribution
Percentage (ACP) test maintained by the
Employer and the sum of the ADP and ACP of
those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate
Limit, then at the discretion of the
Administrative Committee, either the ACP
and/or the ADP of those Highly Compensated
Employees who also participate in a CODA will
be reduced (beginning with such Highly
Compensated Employee whose ACP or ADP is the
highest) so that the limit is not exceeded.
The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts is
reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are
determined after any corrections required to
meet the ADP and ACP tests. Multiple use does
not occur if both the ADP and ACP of the
Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the
Nonhighly Compensated Employees.
(viii) For purposes of determining the Contribution
Percentage, a Matching Contribution
(including a Qualified Matching Contribution,
if any) that is forfeited to correct Excess
Aggregate Contributions, or because the
contribution to which it relates is treated
as an Excess Contribution, Excess Deferral,
or Excess Aggregate Contribution, is not
taken into account.
(c) For purposes of this Section, the following
definitions shall apply:
(i) "Aggregate Limit" shall mean the sum of (A)
125% of the greater of the ADP of the
Nonhighly Compensated Employees for the Plan
Year or the ACP of Nonhighly Compensated
Employees under the Plan subject to the Code
Section 401(m) for the Plan Year beginning
with or within the Plan Year of the CODA and
(B) the lesser of 200% or two plus the lesser
of such ADP or ACP.
4-11
<PAGE>
(ii) "Average Contribution Percentage" shall mean
the average (expressed as a percentage) of
the Contribution Percentages of the eligible
Employees in a group.
(iii) "Contribution Percentage" shall mean the
ratio (expressed as a percentage) of the
Eligible Employee's Contribution Percentage
Amounts to the Eligible Employee's
Compensation for the Plan Year whether or not
the Employee was a Participant for the entire
Plan Year.
(iv) "Contribution Percentage Amounts" shall mean
the sum of the Employee Contributions and
Matching Contributions (to the extent not
taken into account for purposes of the ADP
test) under the Plan on behalf of the
Eligible Employee for the Plan Year. If so
elected, the Employer may include, in the
Contribution Percentage Amounts, Elective
Deferrals or Qualified Nonelective
Contributions, or both, as provided by
regulations. Elective Deferrals in the
Contribution Percentage Amounts may be used
as long as the ADP test is met before the
Elective Deferrals are used in the ACP test
and continues to be met following the
exclusion of those Elective Deferrals that
are used to meet the ACP test.
(v) "Eligible Employee" shall mean any Employee
who is eligible to make an Employee
Contribution, or an Elective Deferral (if the
Employer so takes into account in the
calculation of the Contribution Percentage),
or to receive a Matching Contribution or a
Qualified Matching Contribution. If an
Employee Contribution is required as a
condition of participation in the Plan, any
Employee who would be a Participant in the
Plan if such Employee made such a
contribution shall be treated as an Eligible
Employee on behalf of whom no Employee
Contributions are made.
(vi) "Employee Contribution" shall mean any
contribution made to the Plan by or on behalf
of a Participant that is included in the
Participant's gross income in the year in
which made and that is maintained under a
separate account to which earnings and losses
are allocated.
(vii) "Matching Contribution" shall mean an
Employer Contribution made to the Plan, or
any other defined contribution plan, on
behalf of a Participant on account of an
Employee Contribution made by such
Participant, or on account of a Participant's
Elective Deferral, under a plan maintained by
the Employer.
4-12
<PAGE>
(d) Distribution of Excess Aggregate Contributions.
Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions plus any income and minus any loss
allocable thereto shall be forfeited, if forfeitable, or if not
forfeitable (as in the case of Employee Contributions) shall be
distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions of Participants who are subject to the
family member aggregation rules of Section 414(q)(6)(B) of the
Code shall be allocated among the family members in proportion to
the Employee and Matching Contributions (or amounts treated as
Matching Contributions) of each family member that is combined to
determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2 1/2 months after the last
day of the Plan Year in which such excess amounts arose, a ten
percent (10%) excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions
under the Plan.
(i) The Excess Aggregate Contributions shall be
adjusted for income or loss in accordance
with Section 5.04 of the Plan.
(ii) Excess Aggregate Contributions shall be
distributed first from the Participant's
Employee Contribution account and next from
Matching Contribution account (and, if
applicable, the Participant's Qualified
Nonelective Contribution account). In the
last account used to correct the excess, the
distribution shall be taken from the
Investment Options based on rules established
by the Administrative Committee.
(iii) For purposes of this Section, "Excess
Aggregate Contributions" shall mean, with
respect to any Plan Year, the excess of:
(A) The aggregate Contribution Percentage
Amounts taken into account in computing
the numerator of the Contribution
Percentage actually made on behalf of
Highly Compensated Employees for such
Plan Year, over
(B) The maximum Contribution Percentage
Amounts permitted by the Average
Contribution Percentage test (determined
by reducing contributions made on behalf
of Highly Compensated Employees in order
of their Contribution Percentages
beginning with the highest of such
percentages).
Such determination shall be made after
first determining Excess Elective
Deferrals pursuant to Section 4.01(b)
and then determining Excess
Contributions pursuant to Section
4.01(d) of the Plan.
4.05 Payment. All Contributions shall be paid directly to
the Trustee and may be made on any date or dates selected by the
Employer; provided, however, that the total annual
4-13
<PAGE>
Contribution for each Plan Year shall be paid on or before the
date on which the Employer is required to file its federal income
tax return for the corresponding taxable year of the Employer,
including any extensions thereof.
4.06 No Responsibility for Collection or Verification. The
Trustee shall have no responsibility or obligation to collect any
Contribution under the Plan, or to verify the correctness of the
amount of any Contribution under the Plan.
4.07 Rollovers and Transfers.
(a) The Administrative Committee may direct the
Trustee to receive and hold, for the benefit of any Employee of
the Employer, amounts transferred from other qualified plans
provided that the trust from which such funds are transferred
permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or create adverse
tax consequences for the Employer. A transferred contribution
shall be held by the Trustee in a separate, nonforfeitable
account (a "rollover/transfer account") for the benefit of the
Participant which will be fully vested at all times and shall not
be subject to forfeitures for any reason.
(b) For the purposes of this Section 4.07, the term
"qualified plan" shall mean any tax qualified plans under Code
Section 401(a). The phrase "amounts transferred from other
qualified plans" shall mean:
(i) amounts transferred to this Plan directly
from another qualified plan;
(ii) lump-sum distributions received by an
Employee from another qualified plan which
are eligible for tax-free "rollover"
treatment under the Code and which are
transferred by the Employee to this Plan
within sixty (60) days following his receipt
thereof;
(iii) amounts transferred to this Plan from a
conduit individual retirement account,
provided that the conduit individual
retirement account has no assets other than
assets which were previously distributed to
the Employee from another qualified plan
(other than a plan for self-employed
individuals or an individual retirement
account) as a lump-sum distribution which
were eligible for tax-free rollover
treatment, and which were deposited in such
conduit individual retirement account within
sixty (60) days of receipt thereof, and
earnings on those assets;
(iv) amounts distributed to the Employee from a
conduit individual retirement account meeting
the requirements of item (iii) above, and
transferred by the Employee to this Plan
within sixty (60) days of his receipt thereof
from such conduit individual retirement
account;
4-14
<PAGE>
(v) accumulated voluntary deductible employee
contributions; and
(vi) any other amounts which may be transferred to
the Trustee as tax-qualified transfers under
the provisions of the Code.
(c) Prior to accepting any rollovers or transfers to
which this Section applies, the Administrative Committee may
require the Employee to establish that the amounts to be
transferred to this Plan meet the requirements of this Section
and may also require the Employee to provide an opinion of
counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(d) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction
of any protected benefit under Section 411(d) of the Code.
(e) Notwithstanding anything herein to the contrary, a
rollover or transfer directly to this Plan from another qualified
plan (or a transaction having the effect of such rollover or
transfer) shall only be permitted if the amounts are not subject
to the Joint and Survivor Annuity Requirements of Section
401(a)(11) and 417 of the Code.
4.08 Top Heavy Minimum Contribution.
(a) If this Plan is a Top Heavy Plan, the Employer
shall contribute an amount equal to three percent (3%) of the
Compensation for each Non-Key Employee who is a Participant
employed by the Employer on each Anniversary Date occurring
within the Plan Year. For purposes of this Section 4.08, a Non-
Key Employee Participant includes any Employee otherwise eligible
to participate in the Plan but who is not entitled to receive an
allocation of the Employer's Contribution for any Plan Year
because of (i) the Participant's failure to complete any minimum
Hours of Service, or (ii) Compensation less than a stated amount
or (iii) failure to make any Elective Deferral under Section 4.01
of the Plan.
(b) If the Employer contribution rate for the Key
Employee with the highest contribution rate is less than three
percent (3%), the guaranteed minimum contribution for Non-Key
Employees shall equal the highest contribution rate received by a
Key Employee. The contribution rate is the sum of Employer
contributions (not including Employer contributions to Social
Security) and Forfeitures allocated to the Participant's Account
for the Plan Year, divided by his Compensation for the Plan Year.
To determine the contribution rate, the Administrative Committee
shall consider all qualified defined contribution plans
maintained by the Employer as a single plan. [Notwithstanding the
preceding provisions of this Section 4.08, if a defined benefit
plan maintained by the Employer which benefits a Key Employee
depends on this Plan to satisfy the anti-discrimination rules of
Section 401(a)(4) of the Code, or the coverage rules of Section
410 (or another plan benefiting the Key Employee so depends on
such defined benefit plan), the guaranteed minimum contribution
for a Non-Key Employee is three percent (3%) of his Compensation
regardless of the contribution rate for the Key Employees.]
4-15
<PAGE>
(c) If the contribution rate of the Plan Year with
respect to a Non-Key Employee described in this Section 4.08 is
less than the minimum contribution, the Employer will increase
its contribution for such Employee to the extent necessary so his
contribution rate for the Plan Year will equal the guaranteed
minimum contribution. Any such additional contribution shall be
allocated to the accounts of the Non-Key Employees for whom the
Employer makes the additional contribution.
(d) For purposes of this Section 4.08, the term
"Compensation" shall have the meaning defined in Section 415 of
the Code and Section 2.05 of the Plan.
(e) In lieu of the above, if a Non-Key Employee
participates in this Plan and a defined benefit pension plan
included in a Required Aggregation Group which is top heavy, a
minimum allocation of five percent (5%) of Compensation shall be
provided under this Plan.
4-16
<PAGE>
5. ALLOCATIONS TO ACCOUNTS
5.01 Participants' Accounts.
The Administrative Committee shall maintain the
following accounts in the name of each Participant:
(i) Employer Matching Contribution account. This
account will reflect the Participant's share
of Employer Matching Contributions and
Forfeitures, if any, arising under the Plan,
and the earnings, losses, appreciation, and
depreciation attributable to such amounts.
(ii) Participant Elective Deferral account. This
account will reflect the Participant's
Elective Deferrals and the earnings, losses,
appreciation, depreciation, and distributions
attributable to such contributions.
(iii) Participant Voluntary Contribution account.
This account will reflect the Participant's
Voluntary Contributions, if any, and the
earnings, losses, appreciation, depreciation,
and distributions attributable to such
contributions.
(iv) Participant Rollover Contribution account.
This account will reflect the Participant's
rollover/transfer amounts and the earnings,
losses, appreciation, depreciation and
distributions attributable to such
contributions.
The Administrative Committee shall maintain subaccounts
reflecting the portion of each Participant's Employer account
(and, if applicable, Participant accounts) invested pursuant to
the direction of the Participant in accordance with Article 9 of
the Plan. The Administrative Committee may also maintain such
other accounts or subaccounts in the names of Participants or
otherwise in accordance with Article 4 of the Plan and as it
deems advisable. Unless the context indicates otherwise, the term
"accounts", as used in this Plan, shall include all accounts (and
subaccounts) maintained by the Administrative Committee for a
Participant. Each such account shall be valued and adjusted as
provided in this Article 5 to reflect any withdrawals and
distributions and any appreciation and depreciation in the value
of the assets of the Trust Fund. The maintenance and
establishment of separate accounts for each Participant shall not
be construed as giving any person an interest in any specific
assets of the Trust Fund, the whole of which, for investment
purposes, shall be administered as a single fund except to the
extent otherwise provided in this Plan.
5.02 Crediting of Contributions. For purposes of the
valuations and adjustments made pursuant to this Article 5,
Employer Matching Contributions made to the Plan for any Plan
Year shall be credited to the relevant account as of June 30 and
December 31.
5-1
<PAGE>
5.03 Allocation of Employer Matching Contributions. Employer
Matching Contributions shall be allocated to the Employer
accounts of eligible Participants who are employed by the
Employer on the dates the Matching Contributions are made (unless
they are terminated due to Normal Retirement, death or
disability), in accordance with Section 4.03 of the Plan.
5.04 Valuation and Adjustment of Accounts. Accounts may be
valued and adjusted on an annual or more frequent basis pursuant
to such rules and procedures as may be established by the
Administrative Committee, from time to time, and applied in a
uniform and nondiscriminatory manner. As soon as practicable
following the end of each period for which a valuation is to be
made (the "valuation period"), the accounts of each Participant
shall be valued and adjusted as of the last day of such period
(the "periodic valuation date"). Following the valuation and
adjustment of the Participants' accounts, and within a reasonable
time following the end of each valuation period, the
Administrative Committee shall notify each Participant with
respect to the status of his account as of the periodic valuation
date. Accounts which are invested pursuant to the direction of
Participants in accordance with Article 9 of the Plan shall be
valued and credited at fair market value on an individual basis.
All other accounts shall be adjusted on a pro rata basis to
reflect changes in the net fair market value of the Trust Fund.
5.05 Application of Forfeitures. Forfeitures shall not arise
under this Plan.
5.06 Charging of Distributions. All payments or
distributions made to a Participant or his Beneficiary shall be
charged to his accounts when made. Such payments or distributions
shall be determined at the Valuation Date coincident with or next
following the event causing the payment or distribution. The
Participant shall determine which of his accounts shall be so
charged.
5.07 Limitations on Annual Additions and Benefits.
(a) For the purposes of this Section 5.07, the
following terms shall have the definitions set forth below:
(i) Allocation Date. The term "Allocation Date"
shall mean the date with respect to which all
or a portion of the Employer's and
Participants' Contributions or Forfeitures
are allocated to Participants' accounts.
(ii) Annual Additions. The term "Annual Additions"
shall mean the sum of the following amounts,
if any, credited to a Participant's account
for the Limitation Year:
(A) Employer Contribution;
(B) Forfeitures;
5-2
<PAGE>
(C) Employee Contributions (as determined
under Section 415(c)(2) of the Code);
and
(D) Amounts allocated after March 31, 1984,
to an individual medical account, as
defined in Section 415(1)(2) of the
Code, which is part of a pension or
annuity plan maintained by the Employer,
and amounts derived from contributions
paid or accrued after December 31, 1985,
in taxable years ending after such date,
which are attributable to post-
retirement medical benefits allocated to
the separate account of a Key Employee,
as defined in Section 419A(d)(3) of the
Code, which is part of a welfare benefit
fund, as defined in Section 419(e) of
the Code, maintained by the Employer,
will be considered Annual Additions to a
Defined Contribution Plan.
For purposes of this Section 5.07, any Excess Amount
applied under this Section 5.07 in any Limitation Year to reduce
Employer Contributions will be included in Annual Additions for
such Limitation Year.
(iii) Compensation. The term "Compensation" shall
mean a Participant's earned income, wages,
salaries, fees for professional service and
other amounts received for personal services
actually rendered in the course of employment
with the Employer maintaining the Plan
(including, but not limited to, commissions,
compensation for services on the basis of a
percentage of profits, tips and bonuses). The
term "Compensation" shall not include:
(A) Employer contributions, to a plan of
deferred compensation, to the extent the
contributions are not included in the
gross income of the Employee for the
taxable year in which the contributions
are made; Employer contributions on
behalf of an Employee, through a salary
reduction arrangement, to a cash or
deferred plan described in Section
401(k) of the Code or a tax-deferred
annuity described in Section 403(b) of
the Code, or to a simplified employee
pension plan described in Section 408(k)
of the Code, to the extent such
contributions are deductible by the
Employee under Section 219(b)(7) of the
Code; and any distributions from a plan
of deferred compensation, regardless of
whether such amounts are includable in
the gross income of the Employee when
distributed;
(B) Amounts realized from the exercise of a
non-qualified stock option, or when
restricted stock (or property) held by
an
5-3
<PAGE>
Employee either becomes freely
transferable or is no longer subject to
a substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange
or other disposition of stock acquired
under a qualified stock option;
(D) Other amounts which receive special tax
benefits, such as premiums for group
term life insurance (but only to the
extent that the premiums are not
includable in the gross income of the
Employee), or contributions made by an
Employer (whether or not under a salary
reduction agreement) towards the
purchase of an annuity contract
described in Section 403(b) of the Code
(whether or not the contributions are
excludable from the gross income of the
Employee).
The provisions of this paragraph (iii) shall
apply solely to this Section 5.07. Amounts
included as Compensation under this paragraph
(iii) are those amounts actually paid to a
Participant or includable in his gross income
within the Limitation Year. Notwithstanding the
preceding sentence, Compensation for a Participant
in a Defined Contribution Plan who is permanently
and totally disabled (as defined in Section
22(e)(3) of the Internal Revenue Code) is the
Compensation such Participant would have received
for the Limitation Year if the Participant had
been paid at the rate of Compensation paid
immediately before becoming permanently and
totally disabled; such imputed Compensation for
the disabled Participant may be taken into account
only if the Participant is not a Highly
Compensated Employee (as defined in Section 414(q)
of the Code) and Contributions made on behalf of
such Participant are nonforfeitable when made.
(iv) Defined Benefit Fraction. The term "Defined
Benefit Fraction" shall mean a fraction, the
numerator of which is the sum of the
Participant's Projected Annual Benefits under
all the defined benefit plans (whether or not
terminated) maintained by the Employer, and
the denominator of which is the lesser of one
hundred twenty-five percent (125%) of the
dollar limitation determined for the
Limitation Year under Sections 415(b) and (d)
of the Code or one hundred forty percent
(140%) of the Participant's highest average
compensation, including any adjustments under
Section 415(b) of the Code. For purposes of
this Section, the term "highest average
compensation" shall mean the average
Compensation for the three consecutive Years
of Service that produces the highest average.
5-4
<PAGE>
Notwithstanding the above, if the Participant
was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986,
in one or more Defined Benefit Plans maintained by
the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be
less than one hundred twenty-five percent (125%)
of the sum of the annual benefits under such plans
which the Participant had accrued as of the close
of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the
terms and conditions of the Plan after May 5,
1986. The preceding sentence applies only if the
Defined Benefit Plans individually and in the
aggregate satisfied the requirements of Section
415 of the Code, for all Limitation Years
beginning before January 1, 1987.
(v) Defined Benefit Plan. The term "Defined
Benefit Plan" shall mean a retirement plan
which does not provide for individual
accounts for Employer contributions. All
Defined Benefit Plans (whether or not
terminated) maintained by the Employer shall
be treated as a single plan.
(vi) Defined Contribution Fraction. The term
"Defined Contribution Fraction" shall mean 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 the Employer for the current and all prior
Limitation Years (including the Annual
Additions attributable to the Participant's
nondeductible voluntary contributions to this
and all other Defined Contribution Plans and
all Defined Benefit Plans, whether or not
terminated, 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
the Employer), and the denominator of which
is the sum of the Maximum Aggregate Amounts
for the current and all prior Limitation
Years with the Employer (regardless of
whether a Defined Contribution Plan was
maintained by the Employer). The Maximum
Aggregate Amount in any Limitation Year is
the lesser of one hundred twenty-five percent
(125%) of the dollar limitation in effect
under Section 415(c)(1)(A) of the Code, or
thirty-five percent (35%) of the
Participant's Compensation for such year.
Notwithstanding the above, if the Employee
was a participant as of the end of the first day
of the first Limitation Year beginning after
December 31, 1986, in one or more Defined
Contribution Plans maintained by the Employer
which were in existence on May 5, 1986, the
numerator of this fraction will be adjusted if the
sum of this fraction and the Defined Benefit
Fraction would otherwise exceed one (1.0) under
the
5-5
<PAGE>
terms of this Plan. Under the adjustment, an
amount equal to the product of (A) the excess of
the sum of the fractions over one (1.0) times (B)
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.
(vii) Defined Contribution Plan. The term "Defined
Contribution Plan" shall mean a retirement
plan which provides for individual accounts
for employee contributions, and includes an
employee stock ownership plan that satisfies
the requirements of Section 301(d) of the Tax
Reduction Act of 1975. All Defined
Contribution Plans (whether or not
terminated) maintained by the Employer shall
be treated as a single plan. For purposes of
the limitations of this Section 5.07 only,
employee contributions made to a Defined
Benefit Plan maintained by the Employer shall
be treated as a Defined Contribution Plan.
(viii) Employer. For purposes of this Section 5.07,
the term "Employer" shall mean the Employer
that adopts this Plan, and all members of a
controlled group of corporations [as defined
in Section 414(b) of the Code, as modified by
Section 415(h)], all commonly controlled
trades or businesses [as defined in Section
414(c) of the Code, as modified by Section
415(h)] or an affiliated service group [as
defined in Section 414(m) of the Code] of
which the adopting Employer is a part, and
any other entity required to be aggregated
with the Employer pursuant to regulations
under Section 414(o) of the Code.
(ix) Excess Amount. The term "Excess Amount" shall
mean the excess of the Participant's Annual
Additions for the Limitation Year over the
Maximum Permissible Amount.
(x) Limitation Year. The term "Limitation Year"
shall mean the Plan Year or other twelve (12)
consecutive month period specified by the
Employer in Section 2.23 of the Plan. All
qualified plans maintained by the Employer
must use the same Limitation Year. If the
Limitation Year is amended, the new
Limitation Year must begin on a date within
the Limitation Year in which the amendment is
made.
5-6
<PAGE>
(xi) Maximum Permissible Amount. The term "Maximum
Permissible Amount" shall mean the maximum
annual addition that may be contributed or
allocated to a Participant's account under
the Plan for any Limitation Year and shall
not exceed the lesser of:
(A) Thirty Thousand Dollars ($30,000) [or,
if greater, one-fourth of the defined
benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in
effect for the Limitation Year], or
(B) Twenty-five percent (25%) of the
Participant's Compensation for the
Limitation Year.
The compensation limitation referred to in
(B) shall not apply for any contribution for
medical benefits (within the meaning of
Section 401(h) or Section 419A(f)(2) of the
Code) which is otherwise treated as an annual
addition under Section 415(l)(1) or Section
419A(d)(2) of the Code. If a short Limitation
Year is created because of an amendment
changing the Limitation Year to a different
Limitation Year, the Maximum Permissible
Amount will not exceed the lesser of (A)
Thirty Thousand Dollars ($30,000) multiplied
by a fraction, the numerator of which is the
number of months in the short Limitation Year
and the denominator of which is twelve (12),
or (B) Twenty-five percent (25%) of the
Participant's Compensation for the short
Limitation Year. The dollar limitations of
this Section 5.07 shall be automatically
adjusted as of the first day of the calendar
year for any year for which the Commissioner
of Internal Revenue publishes an adjustment.
The adjusted limitations, if any, shall apply
to the Limitation Year ending with or within
the calendar year for which the Commissioner
of Internal Revenue makes the adjustment.
(xii) Projected Annual Benefit. The term "Projected
Annual Benefit" shall mean the annual
retirement benefit (adjusted to an
actuarially equivalent straight life annuity,
if such benefit is expressed in a form other
than a straight life annuity or qualified
joint and survivor annuity) to which the
Participant would be entitled under the terms
of the Plan assuming:
(A) the Participant will continue employment
until the Normal Retirement Date under
the Plan (or current age, if later), and
(B) the Participant's Compensation for the
current Limitation Year and all other
relevant factors used to determine
5-7
<PAGE>
benefits under the Plan will remain
constant for all future Limitation
Years.
(b) (i) If the Participant does not participate in,
and has never participated in another
qualified plan maintained by the Employer or
a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the
Employer, or an individual medical account,
as defined in Section 415(l)(2) of the Code,
maintained by the Employer, which provides an
Annual Addition as defined in Section
5.07(a)(ii), the amount of Annual Additions
which may be credited to the Participant's
account for any Limitation Year will not
exceed the lesser of the Maximum Permissible
Amount or any other limitation contained in
this Plan. If the Employer contribution that
would otherwise be contributed or allocated
to the Participant's account would cause the
Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the
amount contributed or allocated will be
reduced so that the Annual Additions for the
Limitation Year will equal the Maximum
Permissible Amount. Prior to determining the
Participant's actual Compensation for the
Limitation Year, the Employer may determine
the Maximum Permissible Amount for a
Participant on the basis of a reasonable
estimation of the Participant's Compensation
for the Limitation Year, uniformly determined
for all Participants similarly situated. As
soon as is administratively feasible after
the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year
will be determined on the basis of the
Participant's actual Compensation for the
Limitation Year.
(ii) If pursuant to (i) above or as a result of
the allocation of Forfeitures, there is an
excess amount, the excess will be disposed of
as follows:
(A) First, any Elective Deferrals and,
second, any nondeductible voluntary
employee contributions, to the extent
they would reduce the Excess Amount,
will be returned to the Participant;
(B) If after the application of paragraph
(A) an Excess Amount still exists, and
the Participant is covered by the Plan
at the end of the Limitation Year, the
Excess Amount in the Participant's
account will be used to reduce Employer
Contributions (including any allocation
of Forfeitures) for such Participant in
the next Limitation Year, and each
succeeding Limitation Year if necessary.
5-8
<PAGE>
(C) If after the application of paragraph
(A) an Excess Amount still exists, and
the Participant is not covered by the
Plan at the end of a Limitation Year,
the Excess Amount will be held
unallocated in a suspense account. The
suspense account will be applied to
reduce future Employer Contributions
(including allocation of any
Forfeitures) for all remaining
Participants in the next Limitation
Year, and each succeeding Limitation
Year if necessary;
(D) If a suspense account is in existence at
any time during a Limitation Year
pursuant to this Section, it will
participate in the allocation of the
Trust's investment gains and losses. If
a suspense account is in existence at
any time during a particular Limitation
Year, all amounts in the suspense
account must be allocated and
reallocated to Participants' accounts
before any Employer Contributions or any
Participant contributions may be made to
the Plan for that Limitation Year.
Excess amounts may not be distributed to
Participants or former Participants.
(c) (i) This subsection applies if, in addition to
this Plan, the Participant is covered under a
qualified master or prototype Defined
Contribution Plan maintained by the Employer,
a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the
Employer, or an individual medical account,
as defined in Section 415(l)(2) of the Code
maintained by the Employer, or an individual
medical account, as defined in Section
415(l)(2) of the Code, maintained by the
Employer, which provides an Annual Addition
as defined in Section 5.07(a)(ii) during any
Limitation Year. The Annual Additions which
may be credited to a Participant's account
under this Plan for any such Limitation Year
will not exceed the Maximum Permissible
Amount reduced by the Annual Additions
credited to a Participant's account under the
other plans and welfare benefit funds for the
same Limitation Year. If the Annual Additions
with respect to the Participant under other
Defined Contribution Plans and welfare
benefit funds maintained by the Employer are
less than the Maximum Permissible Amount and
the Employer Contribution that would
otherwise be contributed or allocated to the
Participant's account under this Plan would
cause the Annual Additions for the Limitation
Year to exceed this limitation, the amount
contributed or allocated will be reduced so
that the Annual Additions under all such
plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If the
Annual Additions with respect to the
Participant under such other Defined
Contribution Plans and welfare benefit funds
in the aggregate are equal to or
5-9
<PAGE>
greater than the Maximum Permissible Amount,
no amount will be contributed or allocated to
the Participant's account under this Plan for
the Limitation Year. Prior to determining the
Participant's actual Compensation for the
Limitation Year, the Employer may determine
the Maximum Permissible Amount for a
Participant in the manner described in
Section (b)(i) above. As soon as is
administratively feasible after the end of
the Limitation Year, the Maximum Permissible
Amount for the Limitation Year will be
determined on the basis of the Participant's
actual Compensation for the Limitation Year.
(ii) If, pursuant to (i) above or as a result of
the allocation of Forfeitures, a
Participant's Annual Additions under this
Plan and such other plans would result in an
Excess Amount for a Limitation Year, the
Excess Amount will be deemed to consist of
the Annual Additions last allocated, except
that Annual Additions attributable to a
welfare benefit fund or individual medical
account will be deemed to have been allocated
first regardless of the actual Allocation
Date.
(iii) If an Excess Amount was allocated to a
Participant on an Allocation Date of this
Plan which coincides with an allocation date
of another plan, the Excess Amount attributed
to this Plan will be the product of,
(A) the total Excess Amount allocated as of
such date, times
(B) the ratio of (1) the Annual Additions
allocated to the Participant for the
Limitation Year as of such date under
this Plan to (2) the total Annual
Additions allocated to the Participant
for the Limitation Year as of such date
under this and all the other qualified
master or prototype Defined Contribution
Plans.
(iv) Any Excess Amount attributed to this Plan
will be disposed of in the manner described
in subsection (b)(ii) above.
(d) If the Participant is covered under another
qualified Defined Contribution Plan maintained by the Employer,
which is not a master or prototype plan, Annual Additions which
may be credited to the Participant's account under this Plan for
any Limitation Year will be limited in accordance with
Subsections (c)(i) through (iv) as though the other plan were a
master or prototype plan.
(e) If the Employer maintains, or at any time
maintained, a qualified Defined Benefit Plan covering any
Participant in this Plan, the sum of the Participant's Defined
Benefit Plan Fraction and Defined Contribution Plan Fraction will
not exceed one (1.0) in any
5-10
<PAGE>
Limitation Year. If, in any Limitation Year the sum of the
Defined Benefit Fraction and the Defined Contribution Fraction on
behalf of a Participant does exceed one (1.0), then the Employer
shall reduce its contribution on behalf of such Participant to
adjust the numerator of the Defined Benefit Fraction to the
extent necessary to prevent the sum of the Defined Contribution
Fraction and the Defined Benefit Fraction from exceeding one
(1.0).
(f) If, during any Limitation Year, a Participant is a
participant in both a Defined Contribution Plan and a Defined
Benefit Plan which are a part of a Top Heavy Group, the
limitations of this Section 5.07 shall be applied to such
Participant by substituting "one hundred percent (100%)" for "one
hundred twenty-five percent (125%)" each place it appears in
Subsection (a).
The above limitation shall not apply if, for any Plan
Year in which the Top Heavy ratio determined under Section 2.25
of the Plan does not exceed ninety percent (90%), the minimum Top
Heavy contribution set forth in Section 4.08 of the Plan for each
Non-Key Employee who is a Participant only in this Plan is
increased to four percent (4%) rather than three percent (3%) of
Compensation as described in Section 4.08 of the Plan, or the
minimum Top Heavy contribution for each Non-Key Employee who is a
Participant in both this Plan and the Defined Benefit Plan is
increased to seven and one-half percent (7 1/2%) rather than five
percent (5%) as described in Section 4.08.
(g) Notwithstanding anything contained in this Section
5.07 to the contrary, the limitations, adjustments and other
requirements prescribed in this Section shall at all times comply
with the provisions of Section 415 of the Code and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
5-11
<PAGE>
6. VESTING, DISTRIBUTIONS AND WITHDRAWALS
6.01 Vesting.
(a) The interest of each Participant in his Employer
Matching Contribution account shall vest and become
nonforfeitable up to a maximum of one hundred percent (100%), as
follows:
(i) One hundred percent (100%) upon the
commencement of participation under the Plan.
(ii) One hundred percent (100%) when the
Participant reaches the Normal Retirement
Age.
(iii) One hundred percent (100%) upon the
Participant's death or Disability.
(b) The interest of each Participant in his
Participant Voluntary Contribution, Participant Elective
Deferral, and Rollover or Transfer account(s), if any, shall at
all times be fully vested and nonforfeitable.
(c) If the Employer makes a permissible amendment to
the vesting schedule, each Participant having at least three (3)
Years of Service with the Employer may elect to have the vested
(nonforfeitable) percentage of his account computed under the
Plan without regard to the amendment. The Participant must file
his election with the Administrative Committee within sixty (60)
days of the latest of (i) the Employer's adoption of the
amendment; (ii) the effective date of the amendment; or (iii) his
receipt of a copy of the amendment. The Administrative Committee,
as soon as practicable, shall communicate the change to the
vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form
upon which the Participant may make an election to remain under
the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant
must make an election to remain under the prior vesting schedule.
For purposes of this Section, an amendment to the vesting
schedule includes any Plan amendment which directly or indirectly
affects the computation of the nonforfeitable percentage of an
Employee's rights to his Employer Contribution account.
Furthermore, if 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 right
to his Employer-derived Accrued Benefit will not be less than his
percentage computed under the Plan without regard to such
amendment.
(d) The vested percentage of any Participant covered
under the provisions of the Prior Plan shall not be less than the
vested percentage the Participant would have had if the
provisions of the Prior Plan had continued without change.
6.02 Forfeitures. Forfeitures shall not arise under this
Plan.
6-1
<PAGE>
6.03 Payments to Participants and Beneficiaries.
(a) Within the time periods specified in Section 6.04
of the Plan, and after a Participant's (i) retirement on or after
the Normal Retirement Date, (ii) death, (iii) termination of
employment with the Employer, or (iv) termination of employment
due to Disability, the Participant's vested interest in his
accounts shall be valued and adjusted as of the most recent
periodic valuation date (as defined in Section 5.04 of the Plan)
to reflect the changes, if any, in the net fair market value of
the Trust Fund and shall then be distributed to the Participant
or, in the event of his death, to his Beneficiary, by payment in
a lump sum.
(b) The Plan shall comply with the following
conditions:
(i) the Participant cannot elect payments in the
form of a life annuity;
(ii) on the death of the Participant, the
Participant's vested account balance (reduced
by any security interest held by the Plan for
any loan outstanding to such Participant)
will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse,
or if the Surviving Spouse has already
consented in a manner conforming to the
requirements of Section 417 of the Code, then
to the Participant's Designated Beneficiary;
and
(iii) the Plan will not accept any direct or
indirect transfer of assets from any plan
which is not exempt from the Qualified Joint
and Survivor Annuity Requirements of Section
401(a)(11) and Section 417 of the Code. For
purposes of this Section 6.03(b), the terms
"Spouse" and "Surviving Spouse" shall mean
the spouse or surviving spouse, respectively
of the Participant, provided that a former
spouse will be treated as the Spouse or
Surviving Spouse to the extent provided under
a qualified domestic relations order as
described in Section 414(p) of the Code.
6.04 When Payments are Made.
(a) In the case of a Participant who retires on or
after the Normal Retirement Date, or whose employment is
terminated by death or Disability, payment of the Participant's
Employer and Participant accounts shall be made as soon as
administratively feasible but not later than (unless the
Participant otherwise elects) sixty (60) days following the end
of the Plan Year in which the Participant terminates his
employment with the Employer. Notwithstanding any contrary
provision, a Participant may not elect to defer receipt of
benefits to an extent that he creates a death benefit that is
more than incidental.
(b) In the case of a Participant who terminates his
employment with the Employer other than for death, Disability or
retirement on or after the Normal Retirement Date:
6-2
<PAGE>
(i) Payment of the Participant's Participant
account, if any, shall be made (unless the
Participant otherwise elects) as soon as
administratively feasible following his
termination of employment with the Employer;
and
(ii) Payment of the Participant's vested interest
in his Employer account shall be made as soon
as administratively feasible following the
Participant's termination of employment, but
not (without the consent of the Participant)
later than sixty (60) days following the end
of the Plan Year in which the latest of the
following occurs: (A) the Participant reaches
the Normal Retirement Date [or, if earlier,
age sixty-five (65)]; or (B) the Participant
terminates his employment with the Employer;
or (C) the tenth (10th) anniversary of the
year in which the Participant commenced
participation in the Plan; notwithstanding
this subparagraph, the failure of a
Participant to consent to a distribution
while a benefit is immediately distributable,
within the meaning of Section 6.04(c) of the
Plan, shall be deemed to be an election to
defer commencement of payment of any benefit
sufficient to satisfy this subparagraph.
(c) Notwithstanding anything else contained in this
Section 6.04 to the contrary, if the Participant has more than
Three Thousand Five Hundred Dollars ($3,500) credited to his
account and such account is immediately distributable, then such
Participant's account may not be currently distributed to him
without the consent of the Participant. Written consent of the
Participant to the distribution must be obtained within the
ninety (90) day period ending on the annuity starting date. The
annuity starting date is the first day of the first period for
which an amount is paid as an annuity or any other form. The
Employer shall notify the Participant of the right to defer any
distribution until the Participant's account balance is no longer
immediately distributable. Such notification shall include a
general description of the material features, and an explanation
of the relative values of, the optional forms of benefit
available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code and shall be
provided no less than thirty (30) days and no more than ninety
(90) days prior to the annuity starting date.
Notwithstanding the foregoing, the consent of the
Participant shall not be required to the extent that a
distribution is required to satisfy Section 401(a)(9) or Section
415 of the Code. In addition, upon termination of this Plan if
the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's account balance may,
without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan
[other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code] within the same controlled group.
If the Participant has Three Thousand Five Hundred
Dollars ($3,500) or less credited to his vested account, then
such amount will be currently distributed to him without
6-3
<PAGE>
regard to the Participant's consent in a lump sum payment.
Notwithstanding the above, no distribution may be made after the
annuity starting date regardless of the dollar amount of the
Accrued Benefit unless the Participant consents in writing to
such distribution. For purposes of this paragraph, a
Participant's account shall include all Participant
contributions, if any. Also, a distribution of such account is
immediately or currently distributable if any part of it may be
distributed to the Participant (or Surviving Spouse) before the
Participant attains (or would have attained, if not deceased) the
later of the normal retirement age [as defined in Section
411(a)(8) of the Code], or age sixty-two (62).
If a distribution is one to which Sections 401(a)(11)
and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than thirty (30) days after the
notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Administrative Committee clearly informs the
Participant that the Participant has a right to a period of
at least thirty (30) days after receiving the notice to
consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(d) The requirements of this Section shall apply to
any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this Section apply to
calendar years beginning after December 31, 1984. All
distributions required under this Section shall be determined and
made in accordance with the Proposed Regulations under Section
401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
Proposed Regulations.
(i) Required Beginning Date. A Participant's
benefit must be distributed or begin to be
distributed no later than his Required
Beginning Date which generally is the first
day of April of the calendar year following
the calendar
6-4
<PAGE>
year in which the Participant attains age
70 1/2.
Notwithstanding the above, the following
transition rules shall apply:
(A) The Required Beginning Date of a
Participant who attains age 70 1/2 before
January 1, 1988, shall be determined in
accordance with (1) or (2) below:
(1) Non 5% owners. The Required
Beginning Date of a Participant who
is not a 5% owner is the first day
of April of the calendar year
following the calendar year in
which the later of retirement or
attainment of age 70 1/2 occurs.
(2) 5% owners. The Required Beginning
Date of a Participant who is a 5%
owner during any year beginning
after December 31, 1979, is the
first day of April following the
later of:
(a) the calendar year in which the
Participant attains age 70 1/2,
or
(b) the earlier of the calendar
year with or within which ends
the Plan Year in which the
Participant becomes a 5%
owner, or the calendar year in
which the Participant retires.
(B) The Required Beginning Date of a
Participant who is not a 5% owner, who
attains age 70 1/2 during 1988, and who has
not retired as of January 1, 1989, is
April 1, 1990.
(C) A Participant is treated as a 5% owner
for purposes of this Section if such
Participant is a 5% owner as defined in
Section 416(i) of the Code (determined
in accordance with Section 416 of the
Code but without regard to whether the
Plan is Top Heavy) at any time during
the Plan Year ending with or within the
calendar year in which such owner
attains age 66 1/2 or any subsequent Plan
Year.
(D) Once distributions have begun to a 5%
owner under this Section, they must
continue to be distributed, even if the
Participant ceases to be a 5% owner in a
subsequent year.
(ii) Determination of Amount to be Distributed
Each Year. If the Participant's benefit is to
be distributed in other than a single sum,
the following minimum distribution rules
shall apply on or after the Required
Beginning Date:
(A) If a Participant's benefit is to be
distributed over (1) a period not
extending beyond the life expectancy of
the Participant or the joint life and
last survivor expectancy of the
Participant and the Participant's
Designated Beneficiary or (2) a period
not extending beyond the life expectancy
of the Designated Beneficiary, the
amount required to be distributed for
each calendar year, beginning with
distributions for the first distribution
calendar year, must at
6-5
<PAGE>
least equal the quotient obtained by
dividing the Participant's benefit by
the applicable life expectancy.
(B) For calendar years beginning before
January 1, 1989, if the Participant's
Spouse is not the Designated
Beneficiary, the method of distribution
selected must assure that at least 50%
of the present value of the amount
available for distribution is paid
within the life expectancy of the
Participant.
(C) For calendar years beginning after
December 31, 1988, the amount to be
distributed each year, beginning with
distributions for the first distribution
calendar year shall not be less than the
quotient obtained by dividing the
Participant's benefit by the lesser of
(1) the applicable life expectancy or
(2) if the Participant's Spouse is not
the Designated Beneficiary, the
applicable divisor determined from the
table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the Proposed
Regulations. Distributions after the
death of the Participant shall be
distributed using the applicable life
expectancy in (A) above as a relevant
divisor without regard to Proposed
Regulations Section 1.401(a)(9)-2.
(D) The minimum distribution required for
the Participant's first distribution
calendar year must be made on or before
the Participant's Required Beginning
Date. The minimum distribution for other
calendar years, including the minimum
distribution for the distribution
calendar year in which the Participant's
Required Beginning Date occurs, must be
made on or before December 31 of that
distribution calendar year.
(E) As of the first distribution calendar
year, distributions, if not made in a
single sum, may only be made over one of
the following periods (or a combination
thereof):
(1) the life of the Participant,
(2) the life of the Participant and a
Designated Beneficiary,
(3) a period certain not extending
beyond the life expectancy of the
Participant, or
6-6
<PAGE>
(4) a period certain not extending
beyond the joint and last survivor
expectancy of the Participant and a
Designated Beneficiary.
(F) If the Participant's benefit is
distributed in the form of an annuity
purchased from an insurance company,
distributions thereunder shall be made
in accordance with the requirements of
Section 401(a)(9) of the Code and the
Proposed Regulations thereunder.
(iii) Death Distribution Provisions.
(A) Distribution beginning before death. If
the Participant dies after distribution
of his benefit has begun, the remaining
portion of such benefit will continue to
be distributed at least as rapidly as
under the method of distribution being
used prior to the Participant's death.
(B) Distribution beginning after death. If
the Participant dies before distribution
of his benefit begins, distribution of
the Participant's entire benefit shall
be completed by December 31 of the
calendar year containing the fifth
anniversary of the Participant's death
except to the extent that an election is
made to receive distributions in
accordance with (1) or (2) below:
(1) if any portion of the Participant's
benefit is payable to a Designated
Beneficiary, distributions may be
made over the life or over a period
certain not greater than the life
expectancy of the Designated
Beneficiary commencing on or before
December 31 of the calendar year
immediately following the calendar
year in which the Participant died;
(2) if the Designated Beneficiary is
the Participant's Surviving Spouse,
the date distributions are required
to begin in accordance with (1)
above shall not be earlier than the
later of (a) December 31 of the
calendar year immediately following
the calendar year in which the
Participant died and (b)
December 31 of the calendar year in
which the Participant would have
attained age 70 1/2.
If the Participant has not made an
election pursuant to this Section
by the time of his death, the
Participant's Designated
Beneficiary must elect the
6-7
<PAGE>
method of distribution no later
than the earlier of (a) December 31
of the calendar year in which
distributions would be required to
begin under this Section, or (b)
December 31 of the calendar year
which contains the fifth
anniversary of the date of death of
the Participant. If the Participant
has no Designated Beneficiary, or
if the Designated Beneficiary does
not elect a method of distribution,
distribution of the Participant's
entire benefit must be completed by
December 31 of the calendar year
containing the fifth anniversary of
the Participant's death.
(C) For purposes of (B) above, if the
Surviving Spouse dies after the
Participant, but before payments to such
Spouse begin, the provisions of (B)
above, with the exception of paragraph
(2) therein, shall be applied as if the
Surviving Spouse were the Participant.
(D) For purposes of this Section
6.04(d)(iii), any amount paid to a child
of the Participant will be treated as if
it had been paid to the Surviving Spouse
if the amount becomes payable to the
Surviving Spouse when the child reaches
the age of majority.
(E) For the purposes of this Section
6.04(d)(iii), distribution of a
Participant's benefit is considered to
begin on the Participant's Required
Beginning Date [or, if (C) above is
applicable, the date distribution is
required to begin to the Surviving
Spouse pursuant to (B) above]. If
distribution in the form of an annuity
irrevocably commences to the Participant
before the Required Beginning Date, the
date distribution is considered to begin
is the date distribution actually
commences.
(iv) Definitions
(A) Applicable life expectancy. The
applicable life expectancy is the life
expectancy (or joint and last survivor
expectancy) calculated using the
attained age of the Participant (or
Designated Beneficiary) as of the
Participant's (or Designated
Beneficiary's) birthday in the
applicable calendar year reduced by one
for each calendar year which has elapsed
since the date life expectancy was first
calculated. If life expectancy is being
recalculated, the applicable life
expectancy shall be the life expectancy
as so
6-8
<PAGE>
recalculated. The applicable calendar
year shall be the first distribution
calendar year, and if life expectancy is
being recalculated such succeeding
calendar year.
(B) Designated Beneficiary. The Designated
Beneficiary is the individual who is
designated as the Beneficiary under the
Plan in accordance with Section
401(a)(9) of the Code and the Proposed
Regulations thereunder.
(C) Distribution calendar year. The
distribution calendar year is a calendar
year for which a minimum distribution is
required. For distributions beginning
before the Participant's death, the
first distribution calendar year is the
calendar year immediately preceding the
calendar year which contains the
Participant's Required Beginning Date.
For distributions beginning after the
Participant's death, the first
distribution calendar year is the
calendar year in which distributions are
required to begin pursuant to Section
6.04(d)(iii) above.
(D) Life expectancy. Life expectancy and
joint and last survivor expectancy are
computed by use of the expected return
multiples in Tables V and VI of Section
1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the
Participant [or Spouse, in the case of
distributions described in Section
6.04(d)(iii) above] by the time
distributions are required to begin,
life expectancies shall be recalculated
annually. Such election shall be
irrevocable as to the Participant (or
Spouse) and shall apply to all
subsequent years. The life expectancy of
a nonspouse Beneficiary may not be
recalculated.
(E) Participant's benefit.
(1) A Participants' benefit is his
account balance as of the last
valuation date in the calendar year
immediately preceding the
distribution calendar year
(valuation calendar year) increased
by the amount of any contributions
or forfeitures allocated to the
account balance as of dates in the
valuation calendar year after the
valuation date and decreased by
distributions made in the valuation
calendar year after the valuation
date.
6-9
<PAGE>
(2) For purposes of paragraph (1)
above, if any portion of the
minimum distribution for the first
distribution calendar year is made
in the second distribution calendar
year on or before the Required
Beginning Date, the amount of the
minimum distribution made in the
second distribution calendar year
shall be treated as if it had been
made in the immediately preceding
distribution calendar year.
(v) (A) Notwithstanding the other requirements
of this Section 6.04(d) and subject to
the requirements of Section 6.03(b),
distributions on behalf of any
Participant, including a 5% owner, may
be made in accordance with all of the
following requirements (regardless of
when the distribution actually
commences):
(1) The distribution by the Trust is
one which would not have
disqualified such Trust under
Section 401(a)(9) of the Internal
Revenue Code as in effect prior to
amendment by the Deficit Reduction
Act of 1984.
(2) The distribution is in accordance
with a method of distribution
designated by the Participant whose
interest in the Trust is being
distributed or, if the Participant
is deceased, by a Beneficiary of
such Participant.
(3) Such designation was in writing,
was signed by the Participant or
the Beneficiary, and was made
before January 1, 1984, in
accordance with Section 242(b)(2)
of the Tax Equity and Fiscal
Responsibility Act of 1982 and IRS
Notice 83-23.
(4) The Participant had accrued a
benefit under the plan as of
December 31, 1983.
(5) The method of distribution
designated by the Participant or
the Beneficiary specifies the time
at which distribution will
commence, the period over which
distributions will be made, and in
the case of any distribution upon
the Participant's death, the
Beneficiaries of the Participant
listed in order of priority.
6-10
<PAGE>
(B) A distribution upon death will not be
covered by this transitional rule unless
the information in the designation
contains the required information
described above with respect to the
distributions to be made upon the death
of the Participant.
(C) For any distribution which commences
before January 1, 1984, but continues
after December 31, 1983, the
Participant, or the Beneficiary, to whom
such distribution is being made, will be
presumed to have designated the method
of distribution under which the
distribution is being made if the method
of distribution was specified in writing
and the distribution satisfies the
requirements in subsections (iv)(A)(1)
and (5).
(D) If a designation is revoked, any
subsequent distributions must satisfy
the requirements of Section 401(a)(9) of
the Code as amended and the Proposed
Regulations thereunder. If a designation
is revoked subsequent to the date
distributions are required to begin, the
Trust must distribute by the end of the
calendar year following the calendar
year in which the revocation occurs the
total amount not yet distributed which
would have been required to have been
distributed to satisfy Section 401(a)(9)
of the Code and the Proposed Regulations
thereunder, but for the Code Section
242(b)(2) election. For calendar years
beginning after December 31, 1988, such
distributions must meet the minimum
distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of
the Proposed Regulations. Any changes in
the designation will be considered to be
a revocation of the designation.
However, the mere substitution or
addition of another Beneficiary (one not
named in the designation) under the
designation will not be considered to be
a revocation of the designation, so long
as such substitution or addition does
not alter the period over which
distributions are to be made under the
designation, directly or indirectly (for
example, by altering the relevant
measuring life). In the case in which an
amount is transferred or rolled over
from one plan to another plan, the rules
in Q&A J-2 and Q&A J-3 of the Proposed
Regulations shall apply.
6.05 Selection of Method of Payment. The Participant shall
decide the manner in which the Participant's accounts will be
paid pursuant to Sections 6.03 and 6.04 of the Plan. The Trustee
shall make such distributions in cash, or at the Participant's
election with respect to any portion of the accounts which may be
invested in the Employer Stock Fund, in kind or in cash.
6-11
<PAGE>
6.06 Designation of Beneficiary.
(a) Each Participant may, from time to time, designate
the person or persons (who may be designated concurrently,
contingently, or successively) to whom his accounts are to be
paid if he should die before his accounts are fully distributed
to him. Each beneficiary designation shall cancel all prior
beneficiary designations made by the same Participant, shall be
in a written form prescribed by the Participant's Employer, and
shall be effective only when signed by the Participant and filed
with the Employer while the Participant is living. If a
Participant fails to designate a Beneficiary as provided above,
his Surviving Spouse, if any; or, if none, his surviving child or
children, in equal shares; or, if none, his surviving parent or
parents, in equal shares; or, if none, the Participant's personal
representative, executor, or administrator, as the case may be,
shall be the Beneficiary or Beneficiaries of the Participant's
accounts.
(b) A Participant may specify, in his beneficiary
designation filed with the Employer pursuant to this Section
6.06, that his accounts be paid to his Designated Beneficiary in
any method of payment described in Section 6.03 of the Plan.
(c) The term "Designated Beneficiary" shall mean the
natural or legal person or persons (including a Trustee or other
legal representative acting in a fiduciary capacity) designated
by a Participant as his beneficiary in the last effective
beneficiary designation form filed with the Employer under this
Section 6.06. The term "Beneficiary" shall mean the natural or
legal person or persons to whom a deceased Participant's benefits
are payable under this Section 6.06.
(d) Notwithstanding the above, if the Participant is
married, his Designated Beneficiary shall be his spouse, unless
the spouse consents to the designation of another beneficiary and
acknowledges that by such consent, the spouse is waiving any
rights to a benefit under the Plan. The Participant may then
designate a beneficiary which may not be changed without spousal
consent unless the spousal consent expressly permits designations
by the Participant without any requirement of further consent by
the spouse. The spouse's consent must be witnessed by the
Administrative Committee or by a notary public. Notwithstanding
this consent requirement, if the Participant establishes to the
satisfaction of the Administrative Committee that such written
consent may not be obtained because there is no spouse or the
spouse cannot be located, the consent and waiver need not be
signed by the spouse. Any consent required under this provision
will be valid only with respect to the spouse who signs the
consent.
6.07 Withdrawal of Participant Contributions, Rollovers and
Transfers and Elective Deferrals.
(a) Non-Hardship Withdrawals: A Participant may
withdraw from his Participant Voluntary Contribution account
and/or his Rollover/Transfer account, an amount not in excess of
his balance in each such account. Any withdrawal pursuant to this
Section 6.07 shall be made from and charged to his Participant
Voluntary Contribution account first, and then to his
Rollover/Transfer account.
6-12
<PAGE>
(b) Hardship Withdrawals of Elective Deferrals: No
withdrawal of Elective Deferrals shall be made prior to the
Participant's disability, retirement, or severance of employment,
except where the Participant evidences a financial hardship.
Withdrawals shall be limited solely to Elective Deferrals for all
Plan Years without regard to earnings on such Elective Deferrals
and without regard to Qualified Matching Contributions and
Qualified Nonelective Contributions. Notwithstanding the
preceding sentence, if a Participant's December 31, 1988 account
attributable to Elective Deferrals (the "frozen amount") suffers
a loss subsequent to December 31, 1988 that brings the value of
the account below the frozen amount, then the Qualified Matching
Contributions, and Qualified Nonelective Contributions and
earnings may be withdrawn due to financial hardship to the extent
necessary to reach the frozen amount. A financial hardship will
be deemed to exist if the Participant experiences an immediate
and heavy financial need and has no other resources available to
meet such need. The Administrative Committee shall determine
whether the above criteria are met by reference to the following
guidelines:
(i) The Participant will be considered to have an
immediate and heavy financial need if the
hardship withdrawal is requested for any of
the following reasons:
(A) Medical expenses as well as expenses
necessary to obtain medical care for the
Participant, his Spouse or dependents;
(B) Purchase (excluding mortgage payments)
of a principal residence for the
Participant;
(C) Payment of the next twelve months'
tuition and related expenses for a post
secondary education for the Participant,
his Spouse, or dependents;
(D) Prevention of the eviction from or
foreclosure on the Participant's
principal residence (including rent or
mortgage payment);
(ii) The Participant will be considered to have no
other resources available to meet his
immediate and heavy financial need if the
following criteria are met:
(A) The amount requested for distribution is
not in excess of the amount of the
immediate and heavy financial need of
the Participant;
(B) The Participant has obtained all
distributions, other than hardship
distributions, as well as all non-
taxable loans currently available from
any plan maintained by the Employer.
6-13
<PAGE>
If the Administrative Committee determines that a Participant's
request for a hardship distribution meets the requirements set
forth above, then the Administrative Committee shall direct the
Trustee to pay such amounts to the Participant upon receipt from
the Participant of such written request or form as may be
required by the Administrative Committee. In determining the
amount of the distribution, the Administrative Committee may
include the amount of any taxes and penalties which the
Participant must pay with respect to the distribution.
Any Participant receiving a hardship distribution shall
be subject to the following restrictions on future Elective
Deferrals under the Plan: (1) The Participant's right to make
Elective Deferrals shall be suspended for twelve (12) months
following the date of the withdrawal, and (2) the Participant may
not make Elective Deferrals for the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Section
402(g) of the Code for such next taxable year less the amount of
such Participant's Elective Deferrals for the taxable year of the
hardship distribution.
(d) The Administrative Committee shall adopt uniform,
nondiscriminatory rules regarding withdrawals, the form of
notification, and the minimum amounts (if any) which may be
withdrawn. Withdrawals made pursuant to Section 6.07 shall be
paid in cash as described in Section 6.05 of the Plan.
(e) No Forfeiture shall occur solely as a result of a
Participant's withdrawal of Participant contributions, or
rollovers and transfers.
6.08 Facility of Payment. When, in the opinion of the
Administrative Committee, a Participant or his Beneficiary is
under a legal disability or is incapacitated in any way so as to
be unable to manage his financial affairs, the Administrative
Committee may direct the Trustee to make payments to the
Participant or his Beneficiary, or his legal representative, or
to a relative or friend of the Participant or Beneficiary for his
benefit, or the Administrative Committee may direct the Trustee
to apply the payment for the benefit of the Participant or
Beneficiary in any way the Administrative Committee considers
advisable. Any payment made in accordance with this Section 6.08
shall be a full and complete discharge of any liability to any
person for such payment under the Plan.
6.09 Segregation of Participant's Accounts. After a
Participant's termination of employment with the Employer, other
than for retirement at the Normal or Early Retirement Date,
Disability, or death, the Trustee may, in its sole and complete
discretion, applied in a uniform and nondiscriminatory manner,
and in the best interest of the remaining Participants, segregate
the vested portion of the terminated Participant's accounts from
the general assets of the Trust Fund, and treat such segregated
account or accounts as a "Participant directed investment"
pursuant to Article 9 of the Plan. Such Participant (or, if
applicable, his Beneficiary) shall thereafter exercise control
over the investment of the assets of such account in the manner
described in Article 9 of the Plan, until such time as the assets
are distributed to him pursuant to this Article 6.
6.10 Qualified Domestic Relations Orders. Notwithstanding
any contrary provision of this Article 6, or otherwise in this
Plan, if the Plan Administrator receives a domestic relations
6-14
<PAGE>
order issued pursuant to state domestic relations law with
respect to a Participant, and the Plan Administrator determines
that order is a "Qualified Domestic Relations Order" ("QDRO"), as
defined under and which complies with the requirements of Section
206(d)(3) of ERISA and Section 414(p) of the Code, then a
distribution may be made to the alternate payee named in the
Qualified Domestic Relations Order at any time, and in any manner
specified or contemplated by the QDRO, and such distribution
shall not violate the prohibition against alienation provided for
in Article 13 nor any provision in this Article 6. This provision
is intended to comply with Section 414(p)(10) of the Internal
Revenue Code of 1986 and shall be interpreted by reference to
that statute, regulations promulgated thereunder and the intent
of the Congress as expressed in the Conference Report addressing
such statute.
6.11 Eligible Rollover Distributions.
(a) This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's
election under this Article, a distributee may elect, at the time
and in the manner prescribed by the Administrative Committee, to
have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) Definitions.
(i) Eligible rollover distribution. An eligible
rollover distribution is any distribution of
all or any portion of the balance to the
credit of the distributee, except that an
eligible rollover distribution does not
include: any distribution that is one of a
series of substantially equal periodic
payments (not less frequently than annually)
made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated beneficiary, or for
a specified period of ten years or more; any
distribution to the extent such distribution
is required under Section 401(a)(9) of the
Code; and the portion of any distribution
that is not includable in gross income
(determined without regard to the exclusion
for net unrealized appreciation with respect
to employer securities).
(ii) Eligible retirement plan. An eligible
retirement plan is an individual retirement
account described in Section 408(a) of the
Code, an individual retirement annuity
described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of
the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an
eligible retirement plan is an individual
retirement account or individual retirement
annuity.
6-15
<PAGE>
(iii) Distributee. A distributee includes an
Employee or former employee. In addition, the
Employee's or former employee's surviving
spouse and the Employee's or former
employee's spouse or former spouse who is the
alternate payee under a Qualified Domestic
Relations Order, as defined in Section 414(p)
of the Code, are distributees with regard to
the interest of the spouse or former spouse.
(iv) Direct rollover. A direct rollover is a
payment by the Plan to the eligible
retirement plan specified by the distributee.
6-16
<PAGE>
7. LIFE INSURANCE
No life insurance contracts shall be purchased with assets of the
Trust Fund or held by the Trustee.
7-1
<PAGE>
8. LOANS TO PARTICIPANTS
8.01 Application to Administrative Committee. The
Administrative Committee may direct the Trustee to make loans to
Participants or Beneficiaries (provided they are parties in
interest under Section 408(b)(1) of ERISA) in accordance with
this Article 8. A Participant may make a written application to
the Administrative Committee for a loan from the Trust Fund in
accordance with the Loan Policy. A loan shall be made pursuant to
this Article 8 in an amount not less than One Thousand Dollars
($1,000) and such loan shall not exceed the lesser of:
(a) One-half (1/2) of the present value of the
Participant's vested account balances under this Plan, or
(b) An amount which may be amortized by scheduled
payments of principal and interest each of which are not
greater than 10% of the Participant's gross monthly salary
which is computed by multiplying the Participant's hourly
rate by 2,080 hours and then dividing by 12.
Notwithstanding the above, no loan may exceed Fifty Thousand
Dollars ($50,000). For purposes of this limit, all plans of the
Employer shall be considered one plan.
8.02 Required Documentation and Terms.
(a) In connection with any loan made pursuant to this
Article 8, an applicant shall execute such promissory notes or
other evidences of indebtedness, security, and other instruments
as the Administrative Committee may in its discretion require.
Each loan shall be secured by adequate collateral, in the form of
an applicant's assignment to the Trustee of fifty percent (50%)
of his entire vested interest in the Trust Fund and such other
security, if any, as the Administrative Committee deems
advisable. Each loan shall bear interest at a reasonable rate
fixed by the Administrative Committee which provides the Plan
with a return commensurate with the prevailing interest rate
charged by persons in the business of lending money for loans
which would be made under similar circumstances, not in excess of
that permitted by law. Any loan shall, by its terms, provide for
level amortization with payments to be made not less frequently
than quarterly over a period not to exceed five (5) years.
However, any loan used to acquire any dwelling unit which, within
a reasonable time, is to be used (determined at the time the loan
is made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of time
that may exceed five (5) years, but may not exceed ten (10)
years.
(b) No loan shall be made available to Participants or
Beneficiaries who are not "parties in interest" to the Plan, as
defined in Section 3(14) of ERISA.
(c) No loan shall be made available to Highly
Compensated Employees [as defined in Section 414(q) of the Code]
in an amount greater than the amount made available to other
Employees.
(d) No loan shall be made to a Participant under this
Article 8, and no outstanding loan shall be renewed or extended,
on or after the date on which the Participant
8-1
<PAGE>
terminates his employment or reaches the Normal Retirement Date.
The unpaid balance of such loan shall be immediately due and
payable at its maturity date; or in the event of the
Participant's retirement, termination of employment or death,
prior to its maturity date; or in the event the Participant
revokes his payroll withholding authorization for loan payments;
or in the event of untimely loan repayments during leaves of
absence, or in the event the Participant fails to make any
repayment within 90 days after it is due; or upon other events
deemed by the Administrative Committee to be a default. In the
event the loan is not repaid upon these events, it will be deemed
a distribution to the Participant.
(e) Prior to the making of any loan to a Participant,
the Participant must consent in writing to the loan, and the
possible reduction in any accrued benefit as a result of default,
within the 90-day period before the making or renewal of such
loan. The consent must acknowledge the effect of the loan and
must be witnessed by a Plan representative or notary public. A
new consent is required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.
(f) Notwithstanding any other provision of this Plan,
the portion of the Participant's vested account balance used as a
security for the loan outstanding to the Participant shall be
taken into account for purposes of determining the amount of the
account balance payable at the time of death or distribution, but
only if the reduction is used as repayment of the loan. If less
than 100% of the Participant's vested account balance (determined
without regard to the preceding sentence) is payable to the
Surviving Spouse, then the account balance shall be adjusted by
first reducing the vested account balance by the amount of the
security used as repayment of the loan, and then determining the
benefit payable to the Surviving Spouse.
(g) Additional provisions, including provisions
inconsistent with those set forth in this Section 8.02, may be
adopted by the Administrative Committee from time to time, as set
forth in a separate Loan Policy which shall be deemed to form a
part of this Plan.
8.03 Implementation and Servicing of Loan.
(a) The Trustee, upon receipt of the written direction
of the Administrative Committee and of the appropriate notes or
other evidences of indebtedness from the Administrative
Committee, shall advance the amount of the loan to the
Participant, and shall consider such loan a directed investment
of the Participant's account.
(b) In the event that the Participant should fail to
repay any such loan (including any unpaid interest) when due, the
Trustee may exercise every creditor's right at law or equity
which may be available to the Trustee, including but not limited
to the deduction of such amount due from the Participant's
accounts or from any payment or distribution to which the
Participant or his Beneficiary would otherwise be entitled.
However, such deduction shall not take place prior to a
distributable event under the Plan.
(c) No distribution shall be made from the Plan to any
Participant, or any Beneficiary, until the entire outstanding
balance of any loan made to the Participant pursuant to
8-2
<PAGE>
this Article 8 have first been repaid, or unless the distribution
is first reduced by the amount of the outstanding loan balance.
8.04 Loan Fund. The Administrative Committee shall establish
a Participant Loan Fund, as described in Section 9.02 of the
Plan. Any Participant who requests a Participant loan shall be
deemed to have redesignated the investment of his account
balances, so that an amount equal to the initial amount of any
such Participant loan is invested in the Participant Loan Fund
immediately coincident with the effective date of such
Participant loan. Amounts redesignated in accordance with the
preceding sentence shall be taken from and paid back to the
Participant's accounts in the account sequence order determined
by the Employer. Interest will be credited back to the accounts
on a pro rata basis based upon the outstanding principal, in each
account. Payments of principal and interest on a Participant loan
shall be credited to the Investment Fund or Funds as shall be
currently applicable to the Participant in accordance with the
provisions of Article 9 of the Plan.
8.05 Charges and Fees. A reasonable charge may be imposed
with respect to the implementation of a Participant loan; such
change shall be deducted from the assets of the Participant's
accounts. Any additional charge or fee which may be imposed by
the Trustee or by any broker, investment advisor, or otherwise,
including legal fees, incurred in connection with a Participant's
loan made pursuant to this Article 8 shall be charged to and paid
from the assets of such Participant's accounts.
8-3
<PAGE>
9. PARTICIPANT DIRECTED INVESTMENTS
9.01 Direction by Participant. Participants' accounts shall
be held in the Trust Fund and invested, generally at the
direction of each Participant, in Investment Funds selected by
the Administrative Committee for this purpose which shall always
include a Participant Loan Fund as described in Section 8.04 of
the Plan. The Administrative Committee shall have the right to
determine, from time to time, the options a Participant shall
have with respect to the investment of his accounts, including
percentage increments in which such accounts may be divided among
Investment Funds, the maximum number of Investment Funds in which
accounts may be invested at one time, the times and effective
dates of elections by Participants to change investment of such
accounts applicable to both past and future contributions to such
accounts, and the Investment Fund(s) in which accounts will be
held in the event an investment election is not made by a
Participant. Alternate payees (as described in Section 6.10 of
the Plan) and Beneficiaries of deceased Participants shall have
the same rights as Participants under this Article 9.
9.02 Investment Options Limited by Administrative Committee.
Each Participant may elect to invest his account balances among
the Investment Funds in increments of one percent (1%) and, in
the event a Participant fails to make an election with respect to
the investment of his accounts, they shall, upon implementation
of investment elections, be invested in the fund the main
objective of which is the preservation of principal.
9.03 Employer Stock Fund. Among other investment options
made available to Participants, the Plan shall include an
Employer Stock Fund which shall permit the acquisition or sale of
the common capital stock of Sola International Inc. ("Employer
Stock") in the open market, and the holding of such stock in
accordance with Participants' elections. For purposes of ERISA
Section 407(d)(5), such stock constitutes "qualifying employer
securities," and for purposes of ERISA Section 407(b), the Plan
may hold up to fifty percent (50%) of its assets in the form of
such employer stock.
In addition:
(a) Information provided to shareholders of Employer
Stock will be provided to Participants and beneficiaries with
accounts holding such securities;
(b) Voting, tender and similar rights with respect to
Employer Stock will be passed through to Participants and
beneficiaries with accounts holding such securities;
(c) Information relating to the purchase, holding, and
sale of securities, and the exercise of voting, tender and
similar rights with respect to such securities by Participants
and beneficiaries, will be maintained in accordance with
procedures established by the Administrative Committee which are
designed to safeguard the confidentiality of such information,
except to the extent necessary to comply with federal laws or
state laws not preempted by ERISA;
9-1
<PAGE>
(d) An independent fiduciary will be appointed to
carry out activities relating to any situations which the
Administrative Committee determines involve a potential for undue
employer influence upon Participants and beneficiaries with
regard to the direct or indirect exercise of shareholder rights;
and
(e) The Plan's Administrative Committee is responsible
for ensuring that the procedures required under subparagraph (c)
above are sufficient to safeguard the confidentiality of the
information described in that subparagraph, such procedures are
being followed, and the independent fiduciary required by
paragraph (d) above, is appointed.
(f) Any dividends paid on Employer Stock shall be
automatically invested in additional shares of Employer Stock.
The Administrative Committee may, in its sole discretion,
impose such other conditions or restrictions on transactions in
Employer Stock (including, but not limited to, limitations on the
maximum percentage of a Participant's account balance which may
be held in the form of Employer Stock) and limitations on the
Plan's or an individual Participant's ability to purchase or sell
Employer Stock at certain times, in accordance with federal
securities or other applicable laws and other Company policies or
procedures, as it may deem necessary or appropriate and in the
best interests of the Plan's Participants and beneficiaries.
9.04 Timing of Investment Elections for Future
Contributions. A Participant shall generally be entitled to elect
among Investment Funds at the time he is entitled to make
Elective Deferrals, which election shall generally be effective
immediately as to the investment of future contributions to the
Participant's account(s). In the event that no subsequent
election is made by a Participant, his account balance(s), and
future additions to such account balance(s), shall continue to be
invested according to the Participant's most recent election. In
the event that no election has been made by a Participant, his
account(s) shall be invested in the fund the main objective of
which is the preservation of principal.
9.05 Reallocation of Investment Elections. Each Participant
shall have the opportunity to elect to reallocate his prior
account balance(s) among the available Investment Funds on any
day during the Plan Year. Such reallocation shall generally be
effective as of the day the election is received provided it is
received in a timely manner.
9.06 Investment Control Survives Death. If a Participant who
has elected to direct the investment of his account pursuant to
this Article 9 should die before his account is totally
distributed to him, his investment control shall immediately vest
in his Beneficiary as determined under Section 6.06 of this Plan.
9.07 Charges and Fees. Any charge or fee which may be
imposed by the Trustee or by any broker, investment advisor, or
otherwise, including legal fees, incurred in connection with a
Participant's direction of his accounts pursuant to this Article
9 shall either be charged to and paid from the Trust Fund or may
be paid by the Employer.
9-2
<PAGE>
10. ADMINISTRATION
10.01 Basic Responsibilities of Employer. The Employer
shall establish and carry out a funding policy and method based
upon its determination of the Plan's needs for liquidity,
appreciation, and stability. The Employer, through the
Administrative Committee, shall communicate such goals and needs
to the Trustee, who shall then coordinate such expressed goals
and needs with its investment policy.
In addition, the Employer shall have the following
categories of responsibility:
(a) To periodically review the performance of
Fiduciaries to whom any allocation or delegation of duties
has been made, whether or not involving management and
control of Plan assets;
(b) To maintain and retain records on matters on which
disclosure to the Departments of Labor and Treasury and to
Participants is required;
(c) To prepare and furnish to Participants all
information required under the provisions of this Plan or
under federal law to be furnished to them;
(d) To prepare and file or publish with the
appropriate government agencies all reports and other
information required to be filed or published under federal
or state law;
(e) To recommend a successor Trustee, if necessary.
10.02 Organization and Membership of Administrative
Committee. The Employer shall appoint one (1) or more members to
a committee to be known as the "Administrative Committee," which
shall serve subject to the Employer. The initial members
designated to serve as the Administrative Committee shall be
those specified by the Employer in writing and communicated to
the Trustee. Members of the Administrative Committee need not be
Participants, and officers and directors of the Employer shall
not be prohibited from serving as members. A member shall serve
until he tenders his resignation to the Employer or until the
Employer removes such member or appoints his successor, whichever
shall first occur. In the event of any vacancy arising by reason
of the death, removal, or resignation of a member, the Employer
may, but shall not be required to, appoint a successor to serve
in his place. The Administrative Committee shall select a
Chairman and a Secretary from among its members. The members
shall serve as such without compensation. The Administrative
Committee shall act by majority vote. The proper expenses of the
Administrative Committee, and the compensation of its agents
appointed pursuant to Section 10.06 of the Plan, if any, shall be
paid directly by the Employer.
10.03 Powers and Responsibilities of the Administrative
Committee.
(a) Except as provided in the following paragraph and
in Section 10.06 herein, and subject to the standards of conduct
described in Article 12 of the Plan, the Administrative
10-1
<PAGE>
Committee shall have complete control of the administration of
the Plan, with all powers necessary to enable it properly to
carry out its duties in such respect. Without limiting the
generality of the foregoing, the Administrative Committee shall
have the power to construe the provisions of this Plan and to
determine all questions which may arise hereunder, and shall also
have all the powers conferred upon it elsewhere in this Plan. The
Administrative Committee shall, from time to time, communicate
the funding policy and method established by the Employer to the
Trustee, and may confer with the Trustee regarding the investment
and management of the assets of the Trust Fund. The
Administrative Committee shall, according to rules and procedures
established by it, and applied in a uniform and nondiscriminatory
manner, decide all questions relating to the eligibility and
participation of Employees in the Plan, and all disbursements by
the Trustee, except for the ordinary expenses of the
administration of this Plan, shall be made upon the written
instruction of the Administrative Committee. Except as otherwise
provided in Section 13.05 of the Plan, all decisions of the
Administrative Committee made within the scope of its authority
shall be final.
(b) The Administrative Committee shall prepare (or
cause the Employer to prepare) and furnish to the Trustee a
statement of the amount of the Employer's contributions for each
Plan Year and employee data in a form sufficient to enable the
Trustee to maintain accounts for the Participants and to make
required allocations and payments of benefits in accordance with
the provisions of this Plan.
10.04 Records of Administrative Committee. All acts and
determinations of the Administrative Committee shall be duly
recorded by the Secretary thereof, or under his supervision, and
all such records, together with such other documents as may be
necessary for the administration of the Plan, shall be preserved
in the custody of the Secretary or his successor.
10.05 Liability of Administrative Committee. No member
of the Administrative Committee shall incur any liability for any
action or failure to act, excepting only liability for his
negligence in accordance with the standard of conduct described
in Article 12 of the Plan. The Employer shall and hereby does
indemnify each member of the Administrative Committee against any
and all claims, losses, damages, expenses, attorneys' fees, and
liabilities arising from any act or failure to act by the
Administrative Committee, its officers and members, except when
the same is judicially determined to be due to the gross
negligence of such person or persons. If the investment decisions
hereunder have been allocated to a professional investment
advisor pursuant to Section 10.06 of the Plan, the Administrative
Committee shall be relieved from any liability for investment
decisions made by such manager, provided that the Board of
Directors of the Employer has acted prudently in appointing such
advisor.
10.06 Designation of Agents and Allocation of
Responsibilities.
(a) The Employer or the Administrative Committee may
delegate to the Administrative Committee or to one or more
qualified "Investment Manager(s)" the responsibility and
authority to invest the assets of the Trust Fund. Such delegation
shall be in writing, and shall specify the role of the Investment
Manager in making investment decisions on behalf of the Plan. Any
named Investment Manager shall accept his or its responsibility
in
10-2
<PAGE>
writing, and shall acknowledge in writing that it is a Fiduciary
with respect to the investment of assets of the Trust Fund. If an
Investment Manager is designated pursuant to this Section 10.06,
a copy of the delegation, acceptance, and acknowledgment shall be
provided to the Trustee by the Administrative Committee, and the
Trustee is authorized and entitled to rely upon such delegation.
If an Investment Manager is designated pursuant to this Section
10.06, such Investment Manager, and not the Trustee or the
Administrative Committee, shall be the Fiduciary with respect to
the investment, management, and control of the assets of the
Trust Fund within the scope of its authority.
(b) The Employer and the Administrative Committee may
designate other persons to carry out fiduciary duties [other than
duties of an Investment Manager appointed pursuant to Subsection
(a) or the duties of the Trustee set forth in Article 11 of the
Plan], to render advice (including legal and investment advice),
and to perform other services, as the Employer or the
Administrative Committee may, in their sole discretion, deem
necessary and appropriate for the effective performance of their
duties hereunder, whether ministerial or discretionary. Such
designated persons may receive compensation fixed by the Employer
or the Administrative Committee, within limitations set by the
Employer. The allocation of such responsibilities shall be
effective upon the date specified in the delegation by the
Administrative Committee or the Employer, subject to written
acceptance by the delegate. Any such delegation shall be
communicated to the Participants or to Beneficiaries, where
required by ERISA.
10-3
<PAGE>
11. TRUST AND TRUSTEE
All contributions under the Plan will be made into a Trust
Fund held by a Trustee appointed by the Employer under a Trust
Agreement, or Master Trust Agreement, entered into between the
Employer and the Trustee. The Trustee shall invest and hold
contributions to the Trust Fund and the income and gains
therefrom in accordance with the terms of the Plan and Trust
Agreement. Distributions under the Plan will be drawn from the
Trust Fund and paid by the Trustee as directed in writing by the
Administrative Committee.
11-1
<PAGE>
12. FIDUCIARY RESPONSIBILITIES AND LIABILITIES
12.01 Fiduciary Responsibility. Every Fiduciary of the
Plan shall discharge his duties hereunder solely in the interest
of the Participants and their Beneficiaries, and:
(a) For the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and for defraying
reasonable expenses of administering the Trust; and
(b) With the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character
and with like aims; and
(c) By diversifying its investments of the Trust Fund
so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
However, if any Participant shall exercise control over his
account as provided in Article 9 of the Plan:
(d) Such Participant shall not be deemed to be a
Fiduciary of the Plan by reason of such exercise, and shall
not be subject to the standard of conduct described in this
Section 12.01; and
(e) No person who is otherwise a Fiduciary of the Plan
shall be liable for any loss, or by reason of any breach,
which results from the Participant's exercise of control.
Liability under the terms of this Plan for a breach of
fiduciary duty shall be limited to the period of time during
which the Fiduciary actually serves in such capacity with respect
to this Plan.
12.02 Prohibited Transactions. No Fiduciary with respect
to the Plan shall engage in any prohibited transaction, as
defined in Section 4975 of the Code or Section 406 of ERISA. No
investment shall be made or directed which would cause (a) a loss
of qualification of the Plan under the provisions of the Code; or
(b) a loss of the deductibility of the Employer's contributions
to the Plan under the provisions of the Code; or (c) a
Participant to become liable for income tax under the provisions
of the Code, prior to the distribution of the Participant's
interest in his account (except with respect to the purchase of
certain insurance contracts as provided by the Code); or (d) a
loss of the income tax exemption with respect to the Trust Fund
under the provisions of the Code.
12.03 Limitation of Liability; Indemnification. In
addition to and in furtherance of the limitations provided in
Section 10.06 of the Plan, and to the extent permitted by
applicable law, the Employer shall indemnify and hold harmless
its Board of Directors (and individual members), if any, the
Trustee, the Administrative Committee (and individual members),
against and with respect to any and all expenses, losses,
liabilities, costs, and claims, including legal fees to defend
against such liabilities and claims, arising out of their good-
faith discharge of responsibilities under or incident to the
Plan, excepting only expenses and liabilities resulting
12-1
<PAGE>
from willful misconduct. This indemnity shall not preclude such
further indemnities as may be available under insurance purchased
by the Employer or as may be provided by the Employer under any
by-law, agreement, vote of shareholders or disinterested
directors, or otherwise, as such indemnities are permitted under
state law. Payments with respect to any indemnity and payment of
expenses or fees under this Section 12.03 shall be made only from
assets of the Employer, and shall not be made directly or
indirectly from assets of the Trust Fund.
12.04 Benefits Payable Solely from Trust Fund. All
benefits payable under this Plan shall be paid or provided for
solely from the Trust Fund, and the Employer assumes no liability
or responsibility therefor.
12-2
<PAGE>
13. PARTICIPANTS' RIGHTS AND LIMITATIONS
13.01 Dismissal. Neither the adoption of the Plan by the
Employer, nor any action taken by the Employer, the
Administrative Committee, or the Trustee, under the provisions of
the Plan, shall be construed to give any Employee the right to be
retained in the Employer's employ or any right to any payment
whatsoever, except to the extent of the benefits to which he is
entitled under the terms of the Plan. The Employer expressly
reserves the right, at any time, to dismiss any Employee, without
any liability for any claim either against the Employer or the
Trust Fund for any payment whatsoever (except to the extent
provided for in the Plan).
13.02 Alienation.
(a) No benefit which shall be payable out of the Trust
Fund to any person (including a Participant or his Beneficiary)
shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements, or torts of any such person,
nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law. The
preceding sentence shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to
a Participant pursuant to a domestic relations order, unless such
order is determined to be a "qualified domestic relations order",
as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985.
(b) This prohibition against alienation shall not
apply to the extent a Participant or Beneficiary is indebted to
the Plan, for any reason, under any provision of this Plan, and
at the time a distribution is to be made to or for his benefit,
such proportion of the amount distributed as shall equal such
indebtedness shall be paid by the Trustee to the Trustee, to
apply against or discharge such indebtedness. Prior to making a
payment, however, the Participant or Beneficiary must be given
written notice by the Administrator that such indebtedness is to
be deducted in whole or part from his Participant's Accrued
Benefit. If the Participant or Beneficiary does not agree that
the indebtedness is a valid claim against his vested
Participant's Accrued Benefit, he shall be entitled to a review
of the validity of the claim in accordance with procedures
provided in Section 13.05 of the Plan.
(c) Notwithstanding any provision in this Section
13.02, if the Plan Administrator receives a domestic relations
order issued pursuant to State domestic relations law with
respect to a Participant; and the Plan Administrator determines
that such is a Qualified Domestic Relations Order which complies
with the requirements of Section 206(d)(3) of ERISA, then the
payment to an alternate payee named in the Qualified Domestic
Relations Order shall not violate the prohibition against
alienation provided for in this Section.
13.03 Distributions to Persons Under Legal Disability.
Distributions to minors or persons under legal disability may be
made by the Trustee either:
13-1
<PAGE>
(a) Directly to said persons, or
(b) To the legal guardians or conservators of said
persons.
The Trustee shall not be required to see to the
application of any such distributions so made to any of said
persons, but his or their receipt therefor shall fully discharge
the Trustee from any liability with respect to the same.
13.04 Procedure When Trustee Is Unable to Locate
Distributee. Any communication, statement, benefit distribution,
or notice addressed to a Participant or Beneficiary at his last
known post office address filed with the Employer and/or the
Administrative Committee shall be binding on the Participant or
Beneficiary for all purposes under the Plan. The Employer, the
Administrative Committee, and the Trustee shall not be required
to search for or locate any Participant or Beneficiary under the
Plan. If the Administrative Committee notifies a Participant or
Beneficiary that he is entitled to a distribution, and also
notifies him of the provisions of this Section 13.04, and if such
Participant or Beneficiary fails to claim his benefits under the
Plan or make his whereabouts known within five (5) calendar years
after such notification, the Participant's or Beneficiary's
benefits under the Plan shall be distributed in accordance with
the escheat laws of the State of California.
13.05 Claims Procedure. If a Participant feels he is not
receiving benefits to which he is entitled, he may file a written
claim for benefits with the Plan Administrator. The Plan
Administrator will decide, within sixty (60) days of receiving
such written claim, whether to grant or deny it. If the claim is
denied, such notice of denial shall set forth the specific
reasons for the denial, written to the best of the Plan
Administrator's ability in a manner that may be understood by the
Participant or Beneficiary without legal or actuarial counsel,
and shall also set forth procedures, if appropriate, for
resubmitting the denied claim. In the event that a Participant or
Beneficiary should wish to appeal the final decision of the Plan
Administrator, such Participant or Beneficiary shall file a
written appeal with the Administrative Committee within sixty
(60) days of such Participant's receipt of the Plan
Administrator's written decision. The Administrative Committee's
decision, in writing, shall be delivered to the Participant or
Beneficiary within sixty (60) days after the Administrative
Committee receives the Participant's or Beneficiary's written
appeal. Except as provided in this Section 13.05, and to the
extent permitted by law, the decision of the Administrative
Committee shall be final and binding upon all persons.
In the event that a Participant or Beneficiary should
desire to contest the final decision of the Advisory Committee,
the Participant or Beneficiary may file a written request for
arbitration with the Plan Administrator within fifteen (15) days
after the written decision of the Administrative Committee is
received by the Participant or Beneficiary. The Participant or
Beneficiary and the Plan Administrator shall each name an
arbitrator within twenty (20) days after the Plan Administrator
receives a request for arbitration, and the two (2) arbitrators
shall jointly name a third arbitrator. If either party fails to
select an arbitrator within the twenty (20) day period, or if the
two (2) arbitrators fail to select a third arbitrator within
fifteen (15) days after their appointment, then the Presiding
Judge of the county court (or its equivalent) in the county in
which the principal office of the Employer is located shall
appoint such other arbitrator
13-2
<PAGE>
or arbitrators. The arbitrators shall render a decision within
sixty (60) days after their appointment and shall conduct all
proceedings pursuant to the laws of the state in which the
Employer's principal place of business is located and the then
current Rules of the American Arbitration Association governing
commercial transactions, to the extent that such rules are not
inconsistent with applicable state law. The cost of the
arbitration procedure shall be borne by the losing party or, if
the decision is not clearly in favor of one party or the other,
then in the manner determined by the arbitrators. The arbitration
proceeding set forth in this Section 13.05 shall be the sole and
exclusive remedy of a Participant or Beneficiary to appeal a
decision of the Administrative Committee and the Plan
Administrator under this Plan.
13.06 Portability. If a Participant who is entitled to
receive benefits under this Plan is subsequently employed by
another employer which maintains a tax-qualified employee pension
benefit plan, the Administrative Committee may, in its sole
discretion applied in a uniform and consistent manner, direct the
Trustee to transfer the Participant's vested interest under this
Plan to the trustee of the Plan of the Participant's new
employer, if:
(a) The trustee of such other plan is authorized to
accept the transfer of benefits from this Plan;
(b) The Participant's transferred assets are to be
maintained in a separate account in the other plan;
(c) The Participant's transferred assets will not be
forfeitable or reduce in any way the obligation of the new
employer with respect to its plan, and
(d) The transfer does not violate Section 411(d)(6) of
the Code.
13.07 Employer and Trustee Only Necessary Parties to
Litigation. In any application to or proceeding or action in any
court pertaining to this Plan, only the Employer and the Trustee
shall be necessary parties, and no Participant or any other
person having or claiming an interest in the Trust Fund need be
made a party to or shall be entitled to any notice of such
application, proceeding, action, or service of process in
connection therewith. Any judgment entered into in any such
proceeding or action shall be conclusive upon all persons
claiming any rights under the Plan.
13.08 Execution of Receipts and Releases. Any payment to
any Participant or Beneficiary made, in accordance with the
provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims hereunder against the Plan, and the
Administrative Committee or Trustee may require such Participant
or Beneficiary, as a condition precedent to such payment, to
execute a receipt and release therefor in such form as the
Administrative Committee or Trustee shall determine.
13-3
<PAGE>
14. AMENDMENT AND TERMINATION
14.01 Amendment of Plan. The Employer may at any time,
and from time to time, amend the Plan in whole or in part (either
prospectively or retroactively) by delivering to the Trustee a
written copy of such amendment signed by the Employer and
approved by the Employer's Board of Directors; provided, however,
that:
(a) The Employer shall have no power to amend the Plan
in such a manner as would cause or permit any part of the
assets of the Trust Fund to be diverted to purposes other
than for the exclusive benefit of Participants or their
Beneficiaries, or as would cause or permit any portion of
such assets to revert to or become the property of the
Employer.
(b) The Employer shall not have the right to amend the
Plan retroactively in such a manner as to deprive any
Participant or Beneficiary of any benefit to which he was
entitled under the Plan by reason of contributions made by
the Employer prior to the amendment, unless such amendment
is necessary to conform the Plan to, or satisfy the
conditions of, any law, governmental regulation, or ruling,
and to permit the Plan to meet the requirements of Sections
401 and 501 of the Code.
(c) No amendment to the vesting schedule shall deprive
a Participant of his nonforfeitable rights to benefits
accrued to the date of the amendment. Further, if the
vesting schedule is amended, or if the Plan is amended in
any way that directly or indirectly affects the computation
of a Participant's nonforfeitable percentage, each
Participant with at least three (3) Years of Service may
elect, within a reasonable period after the adoption of the
amendment, to have his nonforfeitable percentage computed
under the Plan without regard to such amendment. The period
during which the election may be made shall commence with
the date the amendment is adopted and shall end on the later
of:
(i) Sixty (60) days after the amendment is
adopted;
(ii) Sixty (60) days after the amendment becomes
effective; or
(iii) Sixty (60) days after the Participant is
issued written notice of the amendment by the
Employer or Plan Administrator.
(d) No amendment shall increase the duties of the
Trustee without its written consent.
(e) The Employer shall not have the right to amend the
Plan to eliminate any optional form of distribution.
(f) No amendment to the Plan shall be effective to the
extent that it has the effect of decreasing a Participant's
Accrued Benefit. Notwithstanding the preceding sentence, a
Participant's account balance may be reduced to the extent
permitted under
14-1
<PAGE>
Section 412(c)(8) of the Code. For purposes of this
paragraph, a Plan 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.
Notwithstanding the foregoing limitations, the Plan may
be amended at any time to conform with the Internal Revenue Code
and ERISA, and applicable rules, regulations, and procedures of
federal and state law.
14.02 Termination of the Plan. The Employer has
established the Plan with the bona fide intention and expectation
that it will make Contributions to the Plan indefinitely, but the
Employer is not and shall not be under any obligation or
liability whatsoever to continue its Contributions or to maintain
the Plan for any given length of time and may, in its sole and
absolute discretion, discontinue such Contributions or terminate
the Plan at any time without any liability whatsoever for such
discontinuance or termination. In the event of any termination or
partial termination of the Plan, or of a complete discontinuance
of Contributions hereunder, all of the affected Participants or
their Beneficiaries shall be fully vested in their accounts at
the date of termination, partial termination, or discontinuance.
The Plan shall terminate upon the occurrence of any of the
following events:
(a) Delivery to the Trustee of a notice of termination
executed by the Employer, specifying the date as of which
the Plan shall terminate; or
(b) Adjudication of the Employer as a bankrupt,
general assignment by the Employer to or for the benefit of
creditors, or dissolution of the Employer, written notice of
which shall be given promptly by the Employer to the
Trustee.
14.03 Procedure upon Termination of the Plan. Unless the
Employer provides by amendment for the liquidation of the Trust
Fund and the immediate distribution of all assets, the
termination of the Plan shall in no way alter the time and manner
of payment provided under Article 6 of the Plan. The Trust shall
continue until all the assets of the Trust Fund have been
distributed pursuant to the terms of the Plan.
14.04 Consolidation, Merger, Division or Sale. Nothing
in this Plan shall prevent the consolidation, merger, division,
or sale of the Employer with, into, or to any other employer, or
prevent the sale by the Employer of any of its property. A
successor corporate employer formed and resulting from any such
consolidation, merger, division or purchase of the Employer or
its assets shall have the right to become a party to the Plan or
any successor plan, by adopting appropriate resolutions and by
executing this Plan or an appropriate amendment to this Plan. If
within ninety (90) days from the effective date of such
consolidation, merger, division or sale of the Employer or its
assets, the new employer does not become a party to the Plan, the
Plan shall automatically be deemed terminated as of the date of
such consolidation, merger, division or sale. In the case of any
merger or consolidation with, or the division or transfer of
assets and liabilities to, any other tax-qualified employee
pension benefit plan, provisions shall be made so that each
Participant in the Plan on the relevant date will receive a
benefit immediately after the merger, consolidation, division or
transfer which is equal to or greater than the benefit he would
14-2
<PAGE>
have been entitled to receive immediately prior to the merger,
consolidation, division or transfer if the Plan had then
terminated.
14.05 Dissolution or Liquidation of Employer. In the
event that the Employer is legally dissolved or liquidated by any
procedure other than a consolidation, merger, division or sale,
the Plan shall terminate as of the effective date of such
dissolution or liquidation.
14.06 Predecessor Plan. This Plan shall constitute a
continuation, and an amendment and restatement, of a plan (the
"predecessor plan") previously adopted and maintained by the
Employer, which also was a plan intended to meet the requirements
of Section 401 of the Code. Since this Plan constitutes a
continuation of a predecessor plan, each Employee who was a
Participant in the predecessor plan immediately prior to the
applicable Effective Date of this Plan will continue as a
Participant in this Plan, subject to its terms and conditions.
Furthermore, in the case of a Participant in the predecessor plan
immediately prior to the Effective Date of this Plan, the vested
or nonforfeitable percentage of such Participant's benefits under
this Plan shall in no event be less than the vested or
nonforfeitable percentage which he was entitled to receive under
such predecessor plan. Upon such Participant's termination of
employment under this Plan, he shall be entitled to receive a
vested or nonforfeitable percentage of his benefits under this
Plan which is not less than the vested or nonforfeitable
percentage he would have received under the predecessor plan had
the vested provisions of such plan continued in effect.
14-3
<PAGE>
15. MISCELLANEOUS PROVISIONS
15.01 Reversion of Contributions. While it is intended
that the assets of the Plan shall never inure to the benefit of
the Employer and shall be held for the exclusive purposes of
providing benefits to Participants and their beneficiaries and
defraying reasonable expenses of administering the Plan, the
Employer reserves the right to retrieve Contributions made under
certain conditions pursuant to Section 403(c) of ERISA, as
follows:
(a) A Contribution made by a mistake of fact shall be
returned to the Employer within one (1) year after the
payment of such Contribution.
(b) A Contribution which is conditioned on initial
qualification of the Plan under the Code shall be returned
to the Company should the Plan fail to qualify within one
(1) year after the date of denial of such qualification
provided the application for determination relating to
initial qualification is filed by the due date of the
Employer's return for the taxable year in which the Plan is
adopted. Upon the return of such Contribution to the
Employer, the Plan shall terminate and the Trustee shall be
discharged from all obligations under the Trust.
(c) A Contribution which is conditioned on the current
deductibility of the Contribution under Section 404 of the
Code shall be returned to the Employer, to the extent that
it is disallowed, within one (1) year after the disallowance
of the deduction.
Earnings attributable to such Contributions described in
subparagraphs (a) and (c) above may not be returned to the
Employer; however, losses attributable thereto must reduce the
amount to be returned.
15.02 Rule Against Perpetuities. This Plan shall
continue until terminated pursuant to Article 14 of the Plan,
unless its continuance into perpetuity violates any law of the
state in which the Employer's principal place of business is
located which limits the duration of trusts, if applicable, in
which case the Plan shall terminate upon the death of the last
survivor of the Employees of the Employer who are living as of
the date of execution of the Plan.
15.03 Notices. Any notices, documents, or forms required
to be given to or filed with the Trustee shall be delivered or
mailed by registered or certified mail, postage prepaid, to the
Trustee at its principal business office. Any notices, documents,
or forms required to be given to or filed with the Administrative
Committee or the Employer shall be delivered or shall be mailed
by registered or certified mail, postage prepaid, to the
Employer's principal business office.
15.04 Text to Prevail over Headings. The headings
appearing in the Plan are included solely for convenience of
reference, and do not constitute a part of the Plan.
15.05 Applicable Law. Except where otherwise preempted
by federal law, all legal questions pertaining to the Plan shall
be determined in accordance with the procedural and
15-1
<PAGE>
substantive laws of the state in which the Employer's principal
place of business is located and all contributions made hereunder
shall be deemed to have been made in such state.
15.06 Counterparts. This instrument may be executed in
several counterparts, each of which shall be deemed an original,
and said counterparts shall constitute but one and the same
instrument, which may be sufficiently evidenced by any one
counterpart.
15.07 Binding upon Successors, Etc. The Plan shall be
binding upon all Participants and their Beneficiaries, heirs,
executors, and administrators, upon the Employer and its
successors and assigns, and upon the Trustee and its successors.
15.08 Copies of Plan. A copy of this instrument shall be
made available for inspection by any Participant or other
interested party at the principal office of the Employer, during
its normal business hours.
15.09 Gender and Number. The masculine gender, where it
appears in the Plan, shall be deemed to include the feminine
gender, unless the context clearly indicates to the contrary. The
words "hereof", "herein", "hereunder", and other similar
compounds of the word "here" shall mean and refer to the entire
Plan, and not to any particular provision of the Plan.
15-2
<PAGE>
16. RELATED OR OTHER EMPLOYERS
16.01 Adoption by Related or Other Employers. Any other
corporation or entity, whether related or not, may adopt this
Plan with the consent of the Employer, and be known as an
Adopting Employer by properly executing an adoption agreement or
amendment and resolutions with respect to the same.
16.02 Requirements of Adopting Employers.
(a) Each such Adopting Employer shall be required to
use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all
contributions made by Adopting Employers. However, the
assets of the Plan shall, on an ongoing basis, be available
to pay benefits to all Participants and Beneficiaries under
the Plan without regard to the Employer or Adopting Employer
who contributed such assets.
(c) The transfer of any Participant from or to any
Adopting Employer, whether he be an Employee of the Employer
or an Employer, shall not affect such Participant's rights
under the Plan, and his service with and Compensation from
each Employer shall be used for purposes of determining
benefits under the Plan.
(d) Unless otherwise agreed by the parties, or
required by law, no Employer shall have any obligation to
make contributions to this Plan for or on behalf of the
Employees of any other Employer. If an Employee is employed
by more than one Employer, any contribution made to the Plan
on his behalf shall be prorated between the Employers on the
basis of his Compensation from each. Notwithstanding the
foregoing, in the event any such Employer shall be unable to
make a contribution for any Plan Year, any Related Employer
may make an additional contribution on behalf of any
Employee of a noncontributing Related Employer.
(e) Amendment of this Plan by the Employer at any time
shall be deemed accepted by the Adopting Employer.
16.03 Designation of Agent. Each Adopting Employer shall
be deemed to be a part of this Plan; provided, however, that with
respect to all of its relations with the Trustee and Plan
Administrator for the purpose of this Plan, each Adopting
Employer shall be deemed to have designated irrevocably the
Employer as its agent. Unless the context of the Plan clearly
indicates the contrary, the word "Employer" shall be deemed to
include each Adopting Employer pursuant to its adoption of the
Plan.
16.04 Plan Administrator's Authority. The Plan
Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Adopting Employers and all
Participants, to effectuate the purpose of this Article.
16-1
<PAGE>
IN WITNESS WHEREOF, SOLA OPTICAL USA, a division of SOLA
INTERNATIONAL INC., a Delaware corporation, as Employer, has
caused this Plan to be signed by its duly qualified officer
authorized to do so the day, month, and year first above written.
SOLA OPTICAL USA, a division of
SOLA International Inc., a
Delaware corporation
By /s/ Hedley Lawson, Jr.
-------------------------------
Hedley Lawson, Jr., Senior Vice
President of Human Resources
"Employer"
<PAGE>
EXHIBIT 4.5
<PAGE>
SOLA OPTICAL
401(k) SAVINGS TRUST
As Amended and Restated Effective
May 15, 1996
<PAGE>
TABLE OF CONTENTS
FIRST Acceptance of Property........................... 2
SECOND Investment Powers................................ 2
THIRD Payments......................................... 6
FOURTH Administrative Powers............................ 6
FIFTH Insurance Contracts.............................. 13
SIXTH Fiduciary Standards.............................. 14
SEVENTH Prohibition of Diversion......................... 15
EIGHTH Hold Harmless.................................... 16
NINTH Accounts......................................... 17
TENTH Committee........................................ 18
ELEVENTH Compensation and Expenses........................ 18
TWELFTH Resignation of Trustee........................... 18
THIRTEENTH Amendment........................................ 19
FOURTEENTH Termination...................................... 19
FIFTEENTH Plan-to-Plan Transfers; Rollovers................ 20
SIXTEENTH Adopting Companies............................... 20
SEVENTEENTH Alienation....................................... 21
EIGHTEENTH Bond............................................. 22
NINETEENTH Successors....................................... 22
TWENTIETH Communications................................... 22
TWENTY-FIRST Governing Law.................................... 23
<PAGE>
TRUST AGREEMENT
WHEREAS, on January 15, 1992, Sola International, Inc.,
hereinafter referred to as the "Company," adopted the amended and
restated Sola Optical 401(k) Savings Plan, hereinafter referred
to as the "Plan," for the purpose of providing retirement and
related benefits to eligible employees of the Company and their
beneficiaries; and
WHEREAS, the Company which is "named fiduciaries" as defined
in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), has appointed an Administrative Committee
(hereinafter referred to as the "Committee") which has general
responsibility for administration of the Plan and for reviewing
the investment performance of the Trustee thereunder; and
WHEREAS, the Plan calls for the establishment of a trust to
which contributions are to be made by the Company to be held by
the Trustee and to be managed, invested and reinvested for the
exclusive benefit of participants of the Plan and their
beneficiaries; and
WHEREAS, the Plan and trust are intended to qualify as a
plan and trust which meet the applicable requirements of Sections
401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended, hereinafter referred to as the "Code"; and
WHEREAS, on July 1, 1990, the Company entered into an
agreement of trust with State Street Bank and Trust Company, a
corporation organized and existing under the laws of the State of
Massachusetts, having its principal place of business at North
Quincy, Massachusetts, which has been removed or has resigned as
trustee; and
WHEREAS, effective January 1, 1996, the Company restated the
agreement of trust, hereinafter referred to as the "Trust" in its
entirety and appointed The Chase Manhattan Bank, N.A., a
corporation organized and existing under the laws of the State of
New York,
1
<PAGE>
having its principal place of business at 2 Chase Manhattan
Plaza, New York, New York 10005, hereinafter referred to as the
"Trustee"; and
WHEREAS, effective May 15, 1996, the Company wishes to amend
the Plan for the inclusion of Sola International, Inc. common
capital stock as an investment option and, at the same time, to
amend and restate in its entirety the Trust to include the
additional provisions necessary to allow for the proper
administration of the Trust;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the Company and the Trustee do
hereby covenant and agree as follows:
FIRST: Acceptance of Property. The Trustee or its agent
shall accept such cash and other property as is tendered to it as
contributions hereunder, and as is acceptable to it, hereinafter
referred to as the "Trust Fund," but shall not be under any duty
to require the Company to contribute to the Trust Fund or to
determine whether the amount of any contribution has been
correctly computed under the terms of the Plan. In no event
shall the Trustee be considered a party to the Plan. The Trustee
shall have only such duties with respect to the Plan as are set
forth in this Agreement.
SECOND: Investment Powers. (a) Subject to paragraph (b)
the Trustee shall invest and reinvest the principal and income of
the Trust Fund, without distinction between principal and income,
in such securities or other property, real or personal, within or
without the United States, as it in its sole discretion shall
deem proper including, without limitation, interests and part
interests in any bond and mortgage or note and mortgage and
interests and part interests in certificates of deposit,
commercial paper and other short-term or demand obligations,
secured or unsecured, whether issued by governmental or quasi-
governmental agencies or corporations or by any firm or
corporation, capital, common and preferred,
2
<PAGE>
voting and nonvoting stock (regardless of dividend or earnings
record), including an employer security, as such term is defined
in Section 407(d) of ERISA, and including shares of mutual funds
and to hold such securities or property in one or more funds; or
in any fund created and administered by it as the trustee thereof
for the collective investment of the assets of employee benefit
trusts, as long as such collective investment fund is a qualified
trust under the applicable provisions of the Code (and while any
portion of the Trust Fund is so invested, such collective
investment fund shall constitute part of the Plan, and the
instrument creating such fund shall constitute part of this
Agreement). The Trustee may in its sole discretion keep such
portion of the Trust Fund in cash and cash balances or hold all
or any portion of the Trust Fund in savings accounts,
certificates of deposit, and other types of time or demand
deposits with any financial institution or quasi-financial
institution, either domestic or foreign (including any such
institution operated or maintained by the Trustee in its
corporate capacity) as the Trustee may from time to time
determine to be in the best interests of the Trust Fund.
Notwithstanding the foregoing, unless otherwise authorized by
ERISA or by regulations promulgated by the Secretary of the
Department of Labor, the Trustee shall maintain the indicia of
ownership of all securities or other investments within the
jurisdiction of the District Courts of the United States.
To the maximum extent permitted by law, the Trustee shall
not be liable for the acquisition, retention or disposition of
any assets of the Trust Fund or for any loss to or diminution of
such assets unless due to the Trustee's own willful misconduct or
failure to act in good faith.
(b) The Trustee will invest the assets of the Company's
plan as directed by the Committee or Company in accordance with
the relevant provisions of the plan document or
3
<PAGE>
any applicable agreement between the Company and the Plan. In so
doing, the Trustee will be a directed trustee; the Trustee will
have no responsibility for carrying out such investment
directions and will have no liability for any loss or diminution
in value occasioned thereby.
(c) The Committee may appoint an "investment manager," as
defined in Section 3(38) of ERISA. Any investment manager so
appointed shall be (i) an investment adviser registered as such
under the Investment Advisers Act of 1940, (ii) a bank, or
(iii) an insurance company qualified to perform investment
management services under the laws of more than one state of the
United States. The Committee shall notify the Trustee of any
such appointment by delivering to the Trustee an executed copy of
the instrument under which the investment manager is appointed
and evidencing the investment manager's acceptance of such
appointment, an acknowledgment by the investment manager that it
is a fiduciary of the Plan, and a certificate evidencing the
investment manager's current registration under the Investment
Advisers Act of 1940 or other appropriate qualification. The
Committee shall specify to the Trustee the portion of the Trust
Fund which shall be subject to such investment management. The
Trustee shall invest and reinvest the portion of the Trust Fund
subject to such investment management only to the extent and in
the manner directed by the investment manager in writing. During
the term of such appointment, the Trustee shall have no liability
for the acts or omissions of such investment manager, and except
as provided in the preceding sentence, shall be under no
obligation to invest or otherwise manage the portion of the Trust
Fund subject to such investment management. The Trustee may
maintain separate accounts within the Trust Fund for the assets
of the Trust Fund subject to such investment management. The
Committee may terminate its appointment of an investment manager
at any time and shall notify the Trustee in writing of such
4
<PAGE>
termination. To the maximum extent permitted by ERISA the
Trustee shall be protected in assuming that the appointment of an
investment manager remains in effect until it is otherwise
notified in writing by the Committee.
In the event that the investment manager appointed hereunder
is a bank or a trust company, or an affiliate of a bank or a
trust company, the Trustee shall, upon the direction of the
Committee, transfer funds to such bank, trust company, or
affiliate for investment through the medium of any fund created
and administered by such bank, trust company, or affiliate,
acting as trustee therefor, for the collective investment of the
assets of employee benefit trusts, provided that such fund is
qualified under the applicable provisions of the Code and while
any portion of the assets are so invested, such fund shall
constitute part of the applicable plan or plans, and the
instrument creating such fund shall constitute part of this
Trust. In order to implement the provisions of this paragraph,
the Trustee is authorized to enter into any required ancillary
trust, agency or other type of agreement with an investment
manager, or its affiliate, as described in the preceding
sentence.
Except in the event of a tender or exchange offer as
hereinafter provided, or in the case of fractional shares
received in any stock dividend, stock split or other
recapitalization or as necessary to make any distribution or
payments from the Trust Fund or unless expressly prohibited by
ERISA the Trustee shall have no power or duty to sell, tender,
exchange or otherwise dispose of any stock acquired for the
Company Stock Fund. In the event that a tender or exchange offer
is made for all or any portion of the Company's common stock held
in the Fund, the Company shall take such action as is practicable
to provide each participant in the Plan having an interest in
such Fund with the same information that is distributed by the
Company to the stockholders of the Company owning
5
<PAGE>
the same class of common stock for which such offer is made.
Notwithstanding any other provision of the Plan or this Trust
Agreement, in the event such an offer is made, each such
participant shall have the right to direct the Trustee, by timely
notice, to tender or exchange all or any portion of the full
shares of such common stock credited to his account which is at
such time fully vested and the Trustee shall so tender or
exchange only upon receipt of such direction. All property
received in exchange for such common stock so tendered shall upon
receipt be held by the Trustee in the Company Stock Fund within
the accounts of those participants who so tendered, the
provisions of the Plan and this Trust Agreement shall hereby be
deemed amended to permit the holding of such property within said
Fund and thereafter administered, invested, reinvested and
distributed in accordance with the applicable terms of the Plan
and Trust.
THIRD: Payments. Subject to the provisions of Article
FOURTEENTH hereof, the Trustee shall from time to time transfer
cash or other property from the Trust Fund to such persons,
including an insurance company or companies or a receiving or
paying agent designated by the Committee, at such addresses, in
such amounts, for such purposes and in such manner as the
Committee may direct, provided that such transfer is
administratively feasible, and the Trustee shall incur no
liability for any such payment made at the direction of the
Committee. The Committee shall be solely responsible to insure
that any payment made at its direction conforms with the
provisions of the Plan, the provisions of this Agreement, and
ERISA, and the Trustee shall have no duty to determine the rights
or benefits of any person in the Trust Fund or under the Plan or
to inquire into the right or power of the Committee to direct any
such payment.
6
<PAGE>
FOURTH: Administrative Powers. The Trustee is authorized
to exercise from time to time in its sole discretion the
following powers in respect of any property, real or personal, of
the Trust Fund, it being intended that these powers be construed
in the broadest possible manner:
(1) power to sell at public or private sale for cash
or upon credit or partly for cash and partly upon credit and
upon such terms and conditions as it shall deem proper. No
purchaser shall be bound to see to or be liable for the
application of the proceeds of any such sale;
(2) power to vote in person or by proxy at corporate
or other meetings and to participate in or consent to any
voting trust, reorganization, dissolution, merger or other
action affecting any securities in its possession or the
issuers thereof, and to make payments in connection
therewith; provided, however, that each participant in the
Plan who has an interest in the Company Stock Fund shall be
entitled to direct the Trustee as to the manner in which the
Company's stock having voting rights which is allocated to
such participant's account is to be voted. The Trustee,
itself or by its nominee shall be entitled to vote and shall
vote said stock with voting rights allocated to the accounts
of said participants as follows: (i) The Company shall
adopt reasonable measures to notify said participants of the
date and purposes of each meeting of stockholders of the
Company at which holders of shares of stock shall be
entitled to vote, and to request instructions from such
participants to the Company, its agent or the Trustee as to
the voting at such meeting of the number of shares of common
stock (including fractional shares) in the account of each
such participant whether or not vested. (ii) In each case,
the Trustee, itself or by proxy, shall vote
7
<PAGE>
the shares of said stock (including fractional shares) in
the account of each such participant in accordance with the
directions of the participant as communicated directly to
the Trustee or to the Trustee by the Company or its agent.
(iii) If prior to the time of such meeting of stockholders
(or a date prior thereto specified by the Trustee), the
Trustee shall not have received timely directions from a
participant or the Company as to the manner of voting any
shares of allocated stock in the account of such
participant, the Trustee shall, as directed by the
participants, vote, itself or by proxy, all such shares of
common stock in all matters coming before the meeting, in
the same ratio, to the nearest whole vote, as the ratio in
which the total shares with respect to which timely
directions were received were voted in such matters;
(3) power to exchange securities or property held by
it for other securities or property, or partly for such
securities or property and partly for cash, and to exercise
conversion, subscription, option and similar rights with
respect to securities held by it, and to make payments in
connection therewith;
(4) power to write put options upon any kind of
evidences of ownership or indebtedness, or contracts for the
future delivery of evidences of ownership or indebtedness,
and to enter into closing transactions for the purpose of
terminating the same; provided that each such option shall
be of a kind traded on a national securities exchange
subject to regulation by the Securities and Exchange
Commission; and further provided that the Trustee has set
aside cash or cash equivalents in an amount equal to the
exercise price of such options or has established put or
futures contract positions offsetting such options;
8
<PAGE>
(5) power to write call options upon any kind of
evidences of ownership or indebtedness or contracts for the
future delivery of evidences of ownership or indebtedness,
or to write such call options against offsetting call
options or futures contracts held in the Trust Fund, or
cash, cash equivalents, or other readily marketable assets
equal in value, determined on a daily basis, to the
evidences of ownership or indebtedness subject thereto, and
to enter into closing transactions for the purpose of
terminating the same; provided that each such option shall
be of a kind traded on a national securities exchange
subject to regulation by the Securities and Exchange
Commission;
(6) power to invest in contracts for the future
delivery of United States Treasury Bills, other financial
instruments or securities of any kind, or indexes based on
any group of securities, provided that each such futures
contract shall be of a kind traded on a national securities
exchange subject to regulation by the Securities and
Exchange Commission;
(7) power to vote in person or by proxy at corporate
or other meetings and to participate in or consent to any
voting trust, reorganization, dissolution, merger or other
action affecting securities in its possession or the issuers
thereof;
(8) power to own or to manage, administer, operate,
lease for any number of years, regardless of any
restrictions on leases made by fiduciaries except
restrictions imposed by ERISA, develop, improve, repair,
alter, demolish, mortgage, pledge, grant options with
respect to, or otherwise deal with any real property or
interest therein at any time held in the Trust Fund, to hold
any such real property in its own name or in the name of its
nominee, with or without the addition of words indicating
9
<PAGE>
that such property is held in a fiduciary capacity, and to
cause to be formed a corporation, partnership, trust or
other entity to hold title to any such real property with
the aforesaid powers, all upon such terms and conditions as
may be deemed advisable; to renew or extend or participate
in the renewal or extension of any mortgage, and to agree to
a reduction in the rate of interest on any mortgage or to
any other modifications or change in the terms of any
mortgage or of any guarantee pertaining thereto, in any
manner and to any extent that may be deemed advisable for
the protection of the Trust Fund or the preservation of any
covenant or condition of any mortgage or in the performance
of any guarantee, or to enforce any default in such manner
and to such extent as may be deemed advisable; and to
exercise and enforce any and all rights of foreclosure, to
bid on any property in foreclosure, to take a deed in lieu
of foreclosure with or without paying a consideration
therefor and in connection therewith to release the
obligation on the bond secured by such mortgage, and to
exercise and enforce in any action, suit or proceeding at
law or in equity any rights or remedies in respect of any
such mortgage or guarantee;
(9) power to acquire, hold or dispose of property in
unregistered form, or in its name without designation of
fiduciary capacity, or in the name of its nominee or any
custodian, and to the extent permitted by ERISA, to combine
certificates representing investments with certificates
representing investments of the same issue held by the
Trustee in other fiduciary capacities, and to deposit
property in a depository or clearing corporation or with the
federal reserve bank in its district;
(10) power to compromise and adjust all debts or
claims due to or made against it, to participate in any plan
or reorganization, consolidation, merger,
10
<PAGE>
combination, liquidation or other similar plan or any action
thereunder, or any contract, lease, mortgage, purchase, sale
or other action by any corporation or other entity;
(11) power to deposit any such property with any
protective, reorganization or similar committee; to delegate
discretionary power to any such committee; and to pay part
of the expenses and compensation of any such committee and
any assessments levied with respect to any property so
deposited;
(12) power to exercise any conversion privilege or
subscription right available in connection with any such
property; to oppose or to consent to the reorganization,
consolidation, merger or readjustment of the finances of any
corporation, company or association or to the sale,
mortgage, pledge or lease of the property of any
corporation, company or association any of the securities of
which may at any time be held in the Trust Fund and to do
any act with referenced thereto, including the exercise of
options, the making of agreements or subscriptions and the
payments of expenses, assessments or subscriptions, which
may be deemed necessary or advisable in connection therewith
and to hold and retain any securities or other property
which it may so acquire;
(13) power to make distributions in cash or in
specific property, real or personal, or an undivided
interest therein, or partly in cash and partly in such
property;
(14) power to engage legal counsel, including counsel
to the Company or the Trustee in its individual capacity,
and any other suitable agents, and to consult with such
counsel or agents with respect to the construction of this
Agreement, the
11
<PAGE>
administration of the Trust Fund, and the duties of the
Trustee hereunder, and to appoint any such agents to carry
out any of the duties and responsibilities of the Trustee
hereunder;
(15) power to borrow money from any lender, in
accordance with ERISA, in any amount and upon any reasonable
terms and conditions, for purpose of this Agreement, and to
pledge or mortgage any property held in the Trust Fund to
secure the repayment of any such loan;
(16) power to commence or defend suits or legal
proceedings and to represent the Trust in all suits or legal
proceedings; to settle, compromise or submit to arbitration
any claims, debts or damages due or owing to or from the
Trust, provided that the Trustee shall notify the Committee
of all such suits, legal proceedings and claims and, except
in the case of a suit, legal proceeding or claim involving
solely the Trustee's action or omissions to act, shall
obtain the written consent of the Committee before settling,
compromising or submitting to binding arbitration any claim,
suit or legal proceeding of any nature whatsoever;
(17) power, upon the written direction of the
Committee, to enter into any contract or policy with an
insurance company or companies, for the purpose of insurance
coverage or otherwise, provided that, except as provided in
Article SECOND, the Trustee shall be the sole owner of all
such contracts or policies and all such contracts or
policies shall be held as assets of the Trust Fund;
(18) power to make, execute and deliver, as Trustee,
any and all deeds, leases, notes, bonds, guarantees,
mortgages, conveyances, contracts, waivers, releases
12
<PAGE>
or other instruments in writing necessary or proper for the
accomplishment of any of the foregoing powers;
(19) power to transfer assets of the Trust Fund to a
successor trustee as provided in Article TWELFTH; and
(20) power to exercise, generally, any of the powers
which an individual owner might exercise in connection with
the property either real, personal or mixed held by the
Trust Fund, and to do all other acts that the Trustee may
deem necessary or proper to carry out any of the powers set
forth in this Article FOURTH or otherwise in the best
interest(s) of the Trust Fund.
Notwithstanding the foregoing, in the event that an investment
manager is appointed pursuant to Article SECOND hereof, such
investment manager shall exercise such of the powers enumerated
in this Article FOURTH and otherwise contained in this Agreement
with respect to the portion of the Trust Fund subject to its
control as may be specified in the instrument under which the
investment manager was appointed; and to hold and retain any
securities or other property which it may so acquire.
FIFTH: Insurance Contracts. The Trustee may, at the
direction of the Committee, (i) enter into one or more contracts
issued by an insurance company, including such contracts
providing for investment in a separate account maintained by an
insurance company, (ii) transfer to any such insurance companies
a portion of the Trust Fund in accordance with any such
contracts, and (iii) hold any such contracts as a part of the
Trust Fund until directed otherwise by the Committee. The
Committee shall give such direction to the Trustee by delivering
to the Trustee a copy of the action of the Committee signed by at
least two members thereof, which shall specifically refer to this
Article FIFTH and direct the Trustee
13
<PAGE>
to so act. The Committee may direct the Trustee to (i) request
any information from any such insurance companies necessary or
appropriate to make an investment decision, (ii) demand or accept
withdrawals or other distributions under any such contracts,
(iii) exercise or not to exercise any rights, powers, privileges
and options under any such contracts and (iv) assign, amend,
modify or terminate any such contracts. The Trustee shall take
no action with respect to any such contracts except at the
direction of the Committee. The Trustee shall incur no liability
for complying with or failing to comply with any direction of the
Committee unless the Trustee's action is prima facie contrary to
ERISA or contrary to the Trustee's duties and responsibilities
under this Agreement. Any insurance companies issuing any
contracts as hereinabove described may deal with the Trustee as
the absolute owner of any such contracts and need not inquire as
to the authority of the Trustee to act with regard to such
contracts. Any such insurance company may accept and rely upon
any communication from the Trustee which is signed by an officer
of the Trustee. For purposes of this Agreement, any such
insurance company shall be considered to be an investment manager
with regard to the assets of the Plan subject to its control. In
no event shall the underlying assets of such insurance company in
which such contracts are invested be considered assets of the
Plan or part of the Trust Fund.
SIXTH: Fiduciary Standards. The Trustee (or any investment
manager, agent, or trustee, appointed pursuant to Article SECOND
or FOURTH hereof) shall (i) discharge its duties hereunder with
the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; (ii) subject
to the investment funds specified in the plan, if any, to the
extent required by ERISA diversify the
14
<PAGE>
investments of the Trust so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not
to do so; and (iii) discharge its duties in accordance with the
provisions of the Plan and this Agreement insofar as such
provisions are consistent with ERISA.
The Trustee (or any investment manager appointed pursuant to
Article SECOND or FOURTH hereof) shall not engage in any
transaction which it knows or should know violates Section 406 of
ERISA. Notwithstanding the foregoing, the Trustee (or any
investment manager appointed pursuant to Article SECOND hereof)
may, in accordance with any appropriate exemption provided under
ERISA or upon the approval of the Secretary of the Department of
Labor, enter into any transaction otherwise prohibited under
Section 406 of ERISA.
The Trustee shall not be responsible for the administration
of the Plan, for determining the funding policy of the Plan or
the adequacy of the Trust Fund to meet and discharge liabilities
under the Plan. The Trustee shall not be responsible for any
failure of the Committee or the Company to discharge any of their
respective responsibilities with respect to the Plan nor be
required to enforce payment of any contributions to the Trust
Fund.
SEVENTH: Prohibition of Diversion.
(a) At no time prior to the satisfaction of all liabilities
with respect to participants in the Plan and their beneficiaries
shall any part of the corpus or income of the Trust Fund be used
for, or diverted to, purposes other than for the exclusive
benefit of such participants and their beneficiaries. Except as
provided in paragraphs (b), (c) and (d) below, and Article
THIRTEENTH, the assets of the Trust Fund shall never inure to the
benefit of the Company
15
<PAGE>
and shall be held for the exclusive purpose of providing benefits
to participants in the Plan and their beneficiaries and defraying
the reasonable expenses of administering the Plan.
(b) In the case of a contribution that is made by the
Company by a mistake of fact, paragraph (a) above shall not
prohibit the return to the Company of such contribution at the
direction of the Committee within one year after the payment of
the contribution.
(c) If a contribution by the Company is expressly
conditioned on qualification of the Plan under Section 401 of the
Code, and if the Plan does not so qualify, then paragraph (a)
above shall not prohibit the return to the Company of such
contribution at the direction of the Committee within one year
after the date of denial of qualification of the Plan, to the
extent permitted by ERISA and the Code.
(d) If a contribution by the Company is expressly
conditioned upon the deductibility of the contribution under
Section 404 of the Code, then to the extent such deduction is
disallowed, paragraph (a) above shall not prohibit the return to
the Company of such contribution at the direction of the
Committee, to the extent disallowed, within one year after the
date of such disallowance.
EIGHTH: Hold Harmless. To the maximum extent permitted by
ERISA and other applicable law, the Trustee shall not be liable
for and the Company shall indemnify the Trustee against, and
agrees to hold the Trustee harmless from, all liabilities and
claims (including attorney's fees and expenses in defending
against such liabilities and claims) against the Trustee, arising
from the Trustee's performance of its duties in conformance with
the terms of the Plan and this Agreement, including any liability
and claim arising with regard to the provisions of Article
SECOND, unless such liability or claim results from reckless or
willful acts of commission or omission by the Trustee. To the
maximum extent
16
<PAGE>
permitted by ERISA and other applicable law, the Trustee shall
not be liable for acting or not acting in accordance with any
written direction of the Committee or an investment manager
designated under Article SECOND, or, where an investment manager
has been designated, failing to act in the absence of any such
direction, including, without limitation, any claim or liability
that may be asserted against the Trustee on account of failure to
receive securities purchased, or failure to deliver securities
sold pursuant to orders issued by an investment manager, and the
Company shall indemnify the Trustee against, and agrees to hold
the Trustee harmless from, all such liabilities and claims
(including attorney's fees and expenses in defending against such
liabilities and claims). The foregoing indemnifications shall
also apply to liabilities and claims against the Trustee arising
from any breach of fiduciary responsibility by a fiduciary other
than the Trustee, unless the Trustee (i) participates knowingly
in or knowingly undertakes to conceal such breach, (ii) has
enabled such fiduciary to commit such breach by its failure to
exercise its fiduciary duties under ERISA or (iii) has actual
knowledge of such breach and fails to take reasonable remedial
action to remedy such breach.
NINTH: Accounts. The Trustee or its agent shall keep
records of all transactions relating to the Trust Fund, which
shall be made available at all reasonable times to persons
designated by the Board of Directors of the Company or as may be
required by law. The Trustee or its agent shall render an
accounting to the Company and the Committee at least annually.
The Committee may approve such accounting on behalf of itself and
the Company by an instrument in writing delivered to the Trustee.
If the Committee does not file with the Trustee objections to any
such accounting within sixty (60) days after its receipt, the
Committee shall be deemed to have approved such accounting on
behalf of itself and the
17
<PAGE>
Company. In such case, or upon the written approval of the
Committee of any such accounting, the Trustee and its agent
shall, to the extent permitted by law, be discharged from all
liability to the Committee and the Company for its acts or
failures to act described in such accounting. Except to the
extent otherwise provided in ERISA, no person, other than the
Company or the Committee, may require an accounting or bring any
action against the Trustee with respect to the Trust Fund. The
Trustee or its agent shall render to the Committee, at least
quarterly, a statement of the Trust Fund assets and their values
and, whenever a contribution is made to the Trust Fund other than
in cash, a statement of the value of such property on the date it
is received by the Trustee.
Nothing contained in this Agreement or in the Plan shall
deprive the Trustee or its agent of the right to have a judicial
settlement of its accounts. In any proceeding for a judicial
settlement of the accounts of the Trustee or its agent or for
instructions with regard to the Trust, the only necessary parties
thereto in addition to the Trustee and its agent as appropriate
shall be the Committee. If the Trustee or its agent so elects,
it may join as a party or parties defendant any other person or
persons.
TENTH: Committee. The Company shall certify to the Trustee
and its agent the names of the persons from time to time
constituting the Committee. All directions to the Trustee or its
agent by the Committee shall be in writing, and shall be properly
certified by a member thereof (or two members thereof if Article
FIFTH is applicable). The Trustee and its agent shall be
entitled to rely without further inquiry upon all such written
directions received from the Committee.
ELEVENTH: Compensation and Expenses. The Trustee shall be
entitled to receive such reasonable compensation for its services
as may be agreed upon from time to time by
18
<PAGE>
the Company and the Trustee. Unless paid by the Company, such
compensation, attorneys' fees incurred in the administration of
the Trust Fund, all taxes levied or assessed against the Trust
Fund, and such other expenses as are incurred in the
administration of the Trust Fund shall be paid from the Trust
Fund.
TWELFTH: Resignation of Trustee. The Trustee may resign at
any time by giving one hundred twenty (120) days' written notice
to the Company. The Board of Directors of the Company may remove
the Trustee at any time by giving one hundred twenty (120) days'
written notice to the Trustee. In the case of the resignation or
removal of the Trustee, the Board of Directors of the Company
shall appoint a successor trustee who shall have the same powers
and duties as those conferred upon the Trustee. Upon the
resignation or removal of the Trustee and the appointment of a
successor trustee, the Trustee shall account for the
administration of the Trust Fund up to the date of its
resignation or removal in the manner provided in Article NINTH
hereof and, upon the approval or deemed approval of such
accounting, the Trustee or its agent shall transfer to the
successor trustee all of the assets then constituting the Trust
Fund and the Trustee or its agent shall to the maximum extent
permitted by ERISA be forever released and discharged from all
liability and accountability with respect to the propriety of its
acts and transactions; provided, however, that the Trustee or its
agent may, in its sole discretion, transfer such assets prior to
the completion of such accounting if the Company agrees thereto
in writing, such writing to include such limitations on the
Trustee's liability therefor as the Trustee may deem appropriate.
The term "Trustee" as used in this Agreement shall be deemed to
apply to any successor trustee acting hereunder.
19
<PAGE>
THIRTEENTH: Amendment. The Board of Directors of the
Company may amend all or any part of this Agreement at any time
provided, however, that any amendment shall not be effective
until the instrument of amendment has been agreed to and executed
by the Trustee. Any such amendment or modification of this
Agreement may be retroactive if necessary or appropriate to
qualify or maintain the Trust as a part of a plan and trust
exempt from federal income taxation under Sections 401(a) and
501(a) of the Code, the provisions of ERISA, or any other
applicable provisions of federal or state law, as now in effect
or hereafter amended or adopted, and any regulations issued
thereunder, including, without limitation, any regulations issued
by the United States Treasury Department, or the United States
Department of Labor.
Notwithstanding anything contained in this Article
THIRTEENTH to the contrary, no amendment shall divert any part of
the Trust Fund to, and no part of the Trust Fund shall be used
for, any purpose other than for the exclusive purpose of
providing benefits to participants and their beneficiaries;
provided, however, that nothing in this Article THIRTEENTH shall
be deemed to limit or otherwise prevent the payment from the
Trust Fund of expenses and other charges as provided in Article
ELEVENTH.
FOURTEENTH: Termination. This Agreement and the trust
hereby created may be terminated at any time by the Board of
Directors of the Company by written notice, executed and
acknowledged so as to authorize it to be recorded in the State of
New York and delivered to the Trustee. Upon receipt of such
notice of termination, the Trustee shall, after payment of all
expenses incurred in the administration of the Trust Fund and
such compensation as the Trustee may be entitled to, and upon
approval of the appropriate governmental or quasi-governmental
authorities (if such approval shall be required under
20
<PAGE>
applicable law or desired by the Trustee), then distribute the
Trust Fund in cash or in kind to such persons or entities,
including the Company, at such time and in such amounts as the
Committee shall direct, which direction shall be in conformity
with the provisions of the Plan and ERISA.
FIFTEENTH: Plan-to-Plan Transfers; Rollovers. The Trustee
or its agent may transfer all of the property representing a
participant's vested interest in the Plan to the trustees of any
trust qualified under Section 401(a) of the Code or to an
individual retirement account. The Trustee or its agent may make
such a transfer only at the direction of the Committee.
The Trustee or its agent may accept as part of the Trust
Fund such property as is acceptable to the Trustee which
represents a participant's retirement benefits transferred from a
trust qualified under Section 401(a) of the Code or transferred
from the participant or an individual retirement account as a
permissible rollover under Section 402(c) or 408(d)(3) of the
Code. The Trustee or its agent may accept such a transfer only
at the direction of the Committee. A participant shall at all
times be fully vested in any property so transferred as a
rollover to the Trust Fund. Such property shall be distributed
to the participant or his beneficiary at the direction of the
Committee within the time required for distribution of his
retirement benefits under the applicable provisions of the Plan.
SIXTEENTH: Adopting Companies. An affiliated corporation
of the Company which has adopted the Plan in accordance with its
terms shall become a party to this Agreement by delivering to the
Company and the Trustee a certified copy of a resolution of its
board of directors to the effect that it agrees to adopt the
Plan, to become a party to this Agreement, and to be bound by all
the terms and conditions of the Plan and this agreement.
21
<PAGE>
The Company shall have the sole authority to enforce this
Agreement on behalf of any such affiliated corporation and the
Trustee or its agent shall in no event be required to deal with
any such affiliated corporation except by dealing with the
Company as its agent. Irrespective of the number of affiliated
corporations which may become parties to this Agreement, the
Trustee or its agent shall in all respects invest and administer
the Trust Fund as a single fund for investment and accounting
purposes without allocation of any part of the Trust Fund as
between the Company and any such affiliated corporation.
An affiliated corporation which has adopted the Plan shall
cease to be a party to this Agreement upon the Company delivering
to the Trustee a certified copy of a resolution of such
affiliated corporation's board of directors terminating its
participation in the Plan. In such event, or in the event of the
merger, consolidation, sale of property or stock, separation,
reorganization or liquidation of the Company or of any such
affiliated corporation, or in the event of the establishment,
modification or continuance of any other retirement plan which
separately or in conjunction with this Plan qualified under
Section 401(a) of the Code, the Trustee or its agent shall
continue to hold the portion of the Trust Fund which is
attributable to the participation in the Plan of the employees
and their beneficiaries affected by such termination or by such
transaction, and this Agreement shall continue in force with
respect to such portion, until otherwise directed by the
Committee, in accordance with the provisions of the Plan and
ERISA.
SEVENTEENTH: Alienation. No interest in the Trust Fund
shall be assignable or subject to anticipation, sale, transfer,
mortgage, pledge, charge, garnishment, attachment, bankruptcy or
encumbrance or levy of any kind, and the Trustee or its agent
shall not recognize any attempt to assign, sell, transfer,
mortgage, pledge, charge, garnish, attach or
22
<PAGE>
otherwise encumber the same except to the extent that such
attempt is made pursuant to a court order determined by the plan
administrator to be a qualified domestic relations order, as
defined in Section 414 of the Code and Section 206 of ERISA.
EIGHTEENTH: Bond. The Trustee shall not be required to
give any bond or any other security for the faithful performance
of its duties under this Agreement except as required by law.
NINETEENTH: Successors. This Agreement shall be binding
upon the respective successors and assigns of the Company and the
Trustee. Any corporation which shall, by merger, consolidation,
purchase or otherwise, succeed to substantially all the trust
business of the Trustee shall, upon such succession, and without
any appointment or other action by any person, be and become
successor Trustee hereunder.
TWENTIETH: Communications. Communications to the Company
or the Committee shall be addressed to the Company, or to the
Committee in care of the Company, as the case may be, at 1500
Cader Lane, P.O. Box 6002, Petaluma, CA 94953-6002; provided,
however, that upon the Company's written request such
communications shall be sent to such other address as the Company
may specify. Communications to the Trustee shall be addressed
to:
The Chase Manhattan Bank, N.A.
770 Broadway
New York, New York 10003-9598
Attention: Judith M. Trepanowski, Senior Vice President
provided, however, that upon the Trustee's written request, such
communications shall be sent to such other address as the Trustee
may specify. No communication shall be binding on the Trustee
until it is received by the Trustee.
TWENTY-FIRST: Governing Law. This Agreement shall be
construed in accordance with ERISA and, to the extent not
preempted by ERISA, the laws of the State of New York.
23
<PAGE>
IN WITNESS WHEREOF the Company and the Trustee have executed
this instrument this 15th day of May, 1996.
ATTEST: SOLA INTERNATIONAL, INC.
/s/ Davida Bates By: /s/ Hedley Lawson, Jr.
- ----------------------------- ------------------------------
Title: Administrative Assistant Title: Senior Vice President
of Human Resources of Sola
Optical USA, a Division of
Sola International, Inc.,
ATTEST: THE CHASE MANHATTAN BANK, N.A.
/s/ Gerard Stafford/Smith By: /s/ Judith M. Trepanowski
- ----------------------------- ------------------------------
Title: Second Vice President Title: Senior Vice President
(Corporate Seal)
24
<PAGE>
STATE OF )
) ss.
COUNTY OF )
On the 15th day of May, 1996, before me personally came Hedley
Lawson, Jr., to me known, who, being by me duly sworn, did depose
and say that he resides at 1500 Cader Lane, Petaluma, California
84853-6002; that he is Senior Vice President of Human Resources
of SOLA OPTICAL USA, A DIVISION OF SOLA INTERNATIONAL, INC., the
corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it
was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.
/s/ Susan Heckin
------------------------------
Notary Public
(Notarial Seal)
25
<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On the ___ day of May, 1996, before me personally came
Judith M. Trepanowski, to me known, who, being by me duly sworn,
did depose and say that she resides at __________________________
______________________________________________________; that she
is Senior Vice President of THE CHASE MANHATTAN BANK, N.A., the
corporation described in and which executed the foregoing
instrument; that she knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it
was so affixed by order of the Board of Trustees of said
corporation, and that she signed her name thereto by like order.
/s/
------------------------------
Notary Public
(Notarial Seal)
26
<PAGE>
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Sola Optical 401(k) Saving
Plan of Sola International Inc. of our report dated May 5, 1995,
with respect to the consolidated financial statements and
financial statement schedule of Sola International Inc. as of
March 31, 1995 and 1994, for the year ended March 31, 1995 and
for the four months ended March 31, 1994, and the combined
financial statements of the Predecessor Business for the eight
months ended November 30, 1993, included in its Annual Report
(Form 10-K) for the year ended March 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
May 22, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated May 4, 1993, on our
audit of the financial statements and financial statement
schedule of Sola Group for the year ended March 31, 1993, which
appear in the Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
San Jose, California
May 22, 1996
<PAGE>
EXHIBIT 24.1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose
signatures appear below, constitute and appoint John E. Heine and
Ian S. Gillies and each of them as their true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for them and in their names, places and steads,
in any and all capacities, to sign the Registration Statement on
Form S-8 to be filed in connection with the Sola Optical 401(k)
Plan and any and all amendments (including post-effective
amendments) to the 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 attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as they might or could do in
person, thereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their or his or her
substitutes, may lawfully do or cause to be done by virtue
hereof.
Dated: May 24, 1996
/s/ Irving Shapiro /s/ Hamish Maxwell
- -------------------------------- -------------------------
Irving Shapiro Hamish Maxwell
/s/ John E. Heine /s/ Ruben F. Mettler
- -------------------------------- -------------------------
John E. Heine Ruben F. Mettler
/s/ Ian S. Gillies /s/ Lawrence Za Yu Moh
- -------------------------------- -------------------------
Ian S. Gillies Lawrence Za Yu Moh
/s/ Jackson L. Schultz
- -------------------------------- -------------------------
Douglas D. Danforth Jackson L. Schultz
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose
signatures appear below, constitute and appoint John E. Heine and
Ian S. Gillies and each of them as their true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for them and in their names, places and steads,
in any and all capacities, to sign the Registration Statement on
Form S-8 to be filed in connection with the Sola Optical 401(k)
Plan and any and all amendments (including post-effective
amendments) to the 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 attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as they might or could do in
person, thereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their or his or her
substitutes, may lawfully do or cause to be done by virtue
hereof.
Dated: May 15, 1996
- -------------------------------- -------------------------
Irving Shapiro Hamish Maxwell
- -------------------------------- -------------------------
John E. Heine Ruben F. Mettler
- -------------------------------- -------------------------
Ian S. Gillies Lawrence Za Yu Moh
/s/ Douglas D. Danforth
- -------------------------------- -------------------------
Douglas D. Danforth Jackson L. Schultz
