<PAGE>
As filed with the Securities and Exchange Commission on May 8, 1997
Registration No. 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MAIL-WELL, INC.
---------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 84-1250533
---------- ------------
(State or Other (IRS Employer
Jurisdiction of Identification
Incorporation or Organization) Number)
23 Inverness Way East, Suite 160, Englewood, Colorado 80112
-----------------------------------------------------------
(Address of Principal Executive Offices)
MAIL-WELL, INC. 1996 DIRECTORS STOCK OPTION PLAN
------------------------------------------------
MAIL-WELL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
---------------------------------------------------
MAIL-WELL CORPORATION 401(K) SAVINGS RETIREMENT PLAN
----------------------------------------------------
SHEPARD POORMAN COMMUNICATIONS CORPORATION STOCK BONUS PLAN
-----------------------------------------------------------
(Full Title of the Plans)
<TABLE>
<S> <C>
Copies to:
Roger Wertheimer ---------------------------------------
Mail-Well, Inc. Herbert H. Davis III, Esq.
23 Inverness Way East, Suite 160 Rothgerber, Appel, Powers & Johnson LLP
Englewood, Colorado 80112 1200 17th Street, Suite 3000
- --------------------------------------- Denver, Colorado 80202
(Name and Address of Agent for Service) (303) 623-9000
(303) 790-8023
- ----------------------------------------
(Telephone Number of Agent for Service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered Per Share Offering Price Fee
<S> <C> <C> <C> <C>
Common Stock 1,590,000/(1)/ $29.159/(2)/ $46,363,485/(2)/ $14,049.54/(2)/
==========================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of securities to
be offered or sold pursuant to the employee benefit plan described herein.
(2) Pursuant to Rule 457(c), (h) under the Securities Act of 1933, as
amended, the proposed maximum offering price per share and the proposed maximum
aggregate offering price are estimated solely for purposes of calculating the
registration fee and are based upon the following: options for 140,000 shares at
an estimated exercise price of $27.574 a share under the Directors' Plan; and
1,450,000 shares issuable under the ESOP, the SBP and KSRP at $29.3125 a share,
the average of the high and low prices of the Company Stock on the NASDAQ
National Market on May 7, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT..........................II-1
Item 3. Incorporation of Documents by Reference.......................II-1
---------------------------------------
Item 5. Interests of Named Experts and Counsel........................II-1
--------------------------------------
Item 6. Indemnification of Directors and Officers.....................II-1
-----------------------------------------
Item 8. Exhibits......................................................II-3
--------
Item 9. Undertakings..................................................II-3
------------
SIGNATURES..................................................................II-5
EXHIBIT INDEX...............................................................II-7
</TABLE>
- ii -
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
The following documents of Mail-Well, Inc. (the "Company") and
information are incorporated in this Registration Statement by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) The Mail-Well Corporation 401(k) Savings Retirement Plan's Annual
Report on Form 11-K for the fiscal year ended December 31, 1995,
filed concurrently herewith.
(c) The Shepard Poorman Communications Corporation Stock Bonus Plan's
Annual Report on Form 11-K for the fiscal year ended February 29,
1996, filed concurrently herewith.
(d) The description of the common stock of the Company, par value $0.01
(the "Company Stock"), contained in the Company's Registration
Statement on Form 8-A, File No. 001-12551, filed by the Company under
Section 12 of the Exchange Act.
All documents subsequently filed by the Company and the Shepard Poorman
Communications Corporation Stock Bonus Plan and the Mail-Well Corporation 401(k)
Savings Retirement Plan (the "Plans") with the Securities and Exchange
Commission (the "Commission") pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, as amended, 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 in this Registration Statement by reference and to be a part hereof
from the date of filing such documents. Any statement contained herein or in a
document, all or a portion of which is 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 in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or replaces such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
The legality of the Company Stock registered pursuant to this Form S-8
Registration Statement will be passed upon for the Company by the law firm of
Rothgerber, Appel, Powers & Johnson LLP, One Tabor Center, Suite 3000, 1200 17th
Street, Denver, Colorado 80202, which has served as special counsel to the
Company in the preparation of the Form S-8 Registration Statement. No members
of this law firm have a substantial interest in the Company or are employed on a
contingent basis by the Company.
- II-1 -
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Article VIII of the Company's Bylaws authorize the Company to indemnify
any person entitled to indemnity under the Delaware General Corporation Law as
such law exists or may be amended to the fullest extent permitted by such law.
Indemnification is not permitted, however, in connection with any proceeding
initiated by the person to be indemnified, unless such proceeding is authorized
by a majority of the directors of the Company.
With respect to indemnification, Section 145 of the Delaware General
Corporation Law provides, among other things, that a corporation shall have
power to indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in an manner which the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the person's
conduct was unlawful.
Section 145 of the Delaware General Corporation Law also provides that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by the person in connection with the
defense or settlement of such action or suit if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
The Company maintains directors' and officers' liability insurance which
covers certain liabilities and expenses of officers and directors of the Company
- II-2 -
<PAGE>
and covers the Company for reimbursement of payments to directors and officers
in respect of such liabilities and expenses.
ITEM 8. EXHIBITS
--------
The Company hereby undertakes that it will submit or has submitted any of
the plans intended to be qualified under Section 401 of the Internal Revenue
Code 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.
The following exhibits are attached to this registration statement:
4.1 Mail-Well, Inc. 1996 Directors Stock Option Plan
4.2 Mail-Well Corporation Employee Stock Ownership Plan
4.3 Mail-Well Corporation 401(k) Savings Retirement Plan
4.4 Shepard Poorman Communications Corporation Stock Bonus Plan
5 Opinion of Rothgerber, Appel, Powers & Johnson LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Rothgerber, Appel, Powers & Johnson LLP
24 Power of Attorney
ITEM 9. UNDERTAKINGS
------------
(a) Rule 415 Offering
-----------------
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference
--------------------------------------------------------------------
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
- II-3 -
<PAGE>
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.
(h) Filing of Registration Statement on Form S-8
--------------------------------------------
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
- II-4 -
<PAGE>
SIGNATURES
The Company. 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 Englewood and the State of Colorado, on this 7th
day of May, 1997.
MAIL-WELL, INC.
By: /s/ Gerald F. Mahoney
------------------------------------------
Gerald F. Mahoney, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Gerald F. Mahoney
______________________________ Director, Chairman May 7, 1997
Gerald F. Mahoney of the Board and CEO
/s/ Robert J. Terry
______________________________ Director, President May 7, 1997
Robert J. Terry and CEO
/s/ Paul V. Reilly
______________________________ Vice President, Chief May 7, 1997
Paul V. Reilly Financial Officer
(Principal Financial Officer)
/s/ Jana L. Brown
______________________________ Vice President, May 7, 1997
Jana L. Brown Controller (Principal
Accounting Officer)
/s/ Frank J. Hevrdejs
______________________________ Director May 7, 1997
Frank J. Hevrdejs
/s/ Susan O. Rheney
______________________________ Director May 7, 1997
Susan O. Rheney
/s/ Frank P. Diassi
______________________________ Director May 7, 1997
Frank P. Diassi
/s/ J. Bruce Duty
______________________________ Director May 7, 1997
J. Bruce Duty
/s/ Jerome W. Pickholz
______________________________ Director May 7, 1997
Jerome W. Pickholz
/s/ W. Thomas Stephens
______________________________ Director May 7, 1997
W. Thomas Stephens
- II-5 -
<PAGE>
The Plans. Pursuant to the requirements of the Securities Act of 1933, the
---------
trustees (or other persons who administer the employee benefit plans) have duly
caused this registration statement to be signed on their behalf by the
undersigned, thereunto duly authorized, in the City of Englewood and the State
of Colorado, on this 8th day of May, 1997.
SHEPARD POORMAN COMMUNICATIONS CORPORATION
STOCK BONUS PLAN
By: /s/ Melissa Shettsline
-------------------------------------
Melissa Shettsline
Member of the Benefits Administration
Committee (the Plan Administrator)
MAIL-WELL CORPORATION 401(k) SAVINGS RETIREMENT
PLAN
By: /s/ Melissa Shettsline
-------------------------------------
Melissa Shettsline
Member of the Benefits Administration
Committee (the Plan Administrator)
- II-6 -
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
4.1 Mail-Well, Inc. 1996 Directors Stock Option Plan
4.2 Mail-Well Corporation Employee Stock Ownership Plan
4.3 Mail-Well Corporation 401(k) Savings Retirement Plan
4.4 Shepard Poorman Communications Corporation Stock Bonus Plan
5 Opinion of Rothgerber, Appel, Powers & Johnson LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Rothgerber, Appel, Powers & Johnson LLP
24 Power of Attorney
- II-7 -
<PAGE>
EXHIBIT 4.1
MAIL-WELL, INC. 1996 DIRECTORS STOCK OPTION PLAN
1. PURPOSE.
The purpose of the Mail-Well, Inc. 1996 Directors Stock Option Plan (the
"Plan") is to provide a means by which Mail-Well, Inc. (the "Corporation"),
through the grant of stock options to eligible directors, may attract and retain
persons of ability as directors, and motivate such directors to exert their best
efforts on behalf of the Corporation and its shareholders. It is not intended
that the options issued under this Plan will qualify as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended.
2. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of Section 5(g) of this Plan, 140,000 shares
of the common stock, $0.01 par value per share, of the Corporation (the "Common
Stock") shall be reserved and optioned under this Plan at the time specified in
Section 4. The reserved shares may be authorized and unissued shares or
treasury shares of the Corporation or any combination of both as determined by
the Board of Directors of the Corporation. If an option granted under this Plan
ceases to be exercisable in whole or in part, the shares representing such
option shall be available under this Plan for the grant of options in the
future.
3. ADMINISTRATION OF THE PLAN.
This Plan shall be administered by the Board of Directors of the
Corporation or the Compensation Committee of the Board of Directors (the
"Committee").
All actions of the Committee under the Plan shall be taken by a majority of
its members. Any act approved in writing by a majority of the Committee members
shall be fully effective as it had been taken by a vote of a majority of the
members at a meeting duly called and held.
The Board of Directors or the Committee shall have complete authority in
its discretion to interpret all provisions of this Plan consistently with the
law, to prescribe the form of the instrument evidencing any option granted under
this Plan, to adopt, amend and rescind general and special rules and regulations
for the administration of this Plan and to make all other determinations
necessary or advisable for the administration of this Plan.
4. GRANT OF OPTIONS UNDER THE PLAN.
Each director of the Corporation, except for directors who are employees of
the Corporation,elected or reelected at the 1996 Annual Meeting of Shareholders
shall be granted options for 2,000 shares of Common Stock. Annually thereafter,
each director of the Corporation, except for directors who are employees of the
Corporation, shall be granted options for 2,000 shares of the Company's Common
Stock immediately upon the election or reelection of such person to the Board of
Directors of the Corporation by shareholders at their annual
- 1 -
<PAGE>
meeting or at a special meeting in lieu of an annual meeting called for such
purpose. Such grants shall be automatic and shall occur until options have been
granted for all shares reserved for such purpose under Section 2 hereof or until
this Plan is discontinued in accordance with Section 7.
5. TERMS AND CONDITIONS OF OPTIONS GRANTED UNDER THE PLAN.
Each option granted under this Plan shall be evidenced by an agreement in a
form determined by the Board of Directors or the Committee. Such agreement
shall be subject to the following express terms and conditions, and such other
terms and conditions as the Board of Directors or the Committee may deem
appropriate.
(a) VESTING. Options granted under this Plan shall vest immediately
upon grant. Options may not be exercised until the Plan has been approved by a
majority of the shareholders present, or represented, and entitled to vote, at a
meeting duly held. Thereafter, options may be exercised at any time after six
months from the date of grant and prior to the tenth anniversary of the date of
grant.
(b) TERM OF OPTIONS. All unexercised options shall expire on the tenth
anniversary of the date of their grant.
(c) OPTION PRICE. The purchase price for shares subject to options
shall be the average closing price of the Corporation's stock as reported in the
Wall Street Journal for the five trading days immediately preceding the date of
grant. If there is no reported closing price for the Corporation's Common Stock,
the purchase price shall be the last reported sale price prior to the date of
grant.
(d) PAYMENT OF PURCHASE PRICE UPON EXERCISE. The purchase price of the
shares shall be paid to the Corporation at the time of exercise, in cash, or
stock of the Corporation having a fair market value equal to the purchase price,
and held six months or more, or a combination of the foregoing, in an amount
equal to the full exercise price of the shares being purchased.
(e) NONTRANSFERABILITY. No option granted under this Plan shall be
transferable other than by a will of an Optionee or by the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code of 1986, as amended ("Internal Revenue Code") or Title
I of the Employee Retirement Income Security Act, or the rules thereunder.
During his or her lifetime, an option shall be exercisable only by an Optionee
or by the Optionee's attorney-in-fact or conservator.
(f) INVESTMENT REPRESENTATION. The shares of stock to be issued upon
the exercise of all or any portion of any option granted under this Plan shall
be issued on the condition that the Optionee represents that the purchase of
stock upon such exercise shall be for investment purposes and not with a view to
resale, distribution, offering, transferring, mortgaging, pledging,
hypothecating or otherwise disposing of any such stock under the circumstances
which would constitute a public offering or distribution under the Securities
Act of 1933 or the securities laws of any state. No shares of stock shall be
issued upon the exercise of any option unless the Corporation shall have
received from
- 2 -
<PAGE>
the Optionee a written statement satisfactory to legal counsel for the
Corporation containing the above representations, stating that certificates
representing such shares may bear a legend restricting their transfer and
stating that the Corporation's transfer agent or agents may be given
instructions to stop transfer of any certificate bearing such legend. Such
representation and restrictions provided for herein shall not be required if (1)
an effective registration statement for such shares under the Securities Act of
1933 and any applicable state laws has been filed with the Securities and
Exchange Commission and with the appropriate agency or commission of any state
whose laws apply to the transaction, or (2) an opinion of counsel satisfactory
to the Corporation has been delivered to the Corporation to the effect that
registration is not required under the Securities Act of 1933 or under the
applicable securities laws of any state.
(g) ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. Notwithstanding any
other provision of this Plan, in the event of any change in the outstanding
common stock of the Corporation by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or of any similar change affecting the common stock, the
number and kind of shares which thereafter may be optioned and sold under this
Plan and the number and kind of shares subject to option in outstanding option
agreements and the purchase price per share thereof shall be appropriately
adjusted consistent with such change in such manner as the Board of Directors or
the Committee may deem equitable to prevent substantial dilution or enlargement
of the rights granted to, or available for, an Optionee under this Plan.
(h) NO RIGHTS AS A SHAREHOLDER. No Optionee shall have any rights as a
shareholder with respect to any shares subject to his option prior to the date
of issuance to him or her of a certificate or certificates for such shares.
6. COMPLIANCE WITH OTHER LAWS AND REGULATIONS.
This Plan, the grant and exercise of options under this Plan, and the
obligation of the Corporation to sell and deliver shares under such options,
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Corporation shall not be required to issue or deliver any certificates for
shares of common stock prior to the completion of any registration or
qualification of such shares under any federal or state law, or any ruling or
regulation of any government body which the Corporation shall, in its sole
discretion, determine to be necessary or advisable.
7. AMENDMENT AND DISCONTINUANCE.
The Board of Directors of the Corporation may amend, suspend or discontinue
this Plan; provided, however, that, subject to the provisions of Section 5(g)
no action of the Board of Directors of the Corporation or the Committee may (i)
increase the number of shares reserved for options pursuant to Section 2, (ii)
amend the provisions of Section 4 or 5; or (iii) modify the requirements as to
eligibility for participation in this Plan. This Plan may be amended, suspended
or discontinued at any time by the vote of a majority of the Shareholders of the
Corporation present or voting by proxy at a meeting of shareholders called for
such purpose and at which a quorum of shareholders is present. This Plan may be
- 3 -
<PAGE>
amended no more frequently than every six months. Without the written consent of
an Optionee, no amendment or suspension of this Plan shall alter or impair any
option previously granted to him under this Plan.
8. NAME OF THE PLAN.
This Plan shall be known as the Mail-Well, Inc. 1996 Directors Stock Option
Plan.
9. EFFECT OF THE PLAN ON OTHER STOCK PLANS.
The adoption of this Plan shall have no effect on awards made or to be made
pursuant to other stock plans covering employees and/or directors of the
Corporation, a subsidiary corporation of the Corporation, a parent corporation
or any predecessors or successors thereto.
10. APPROVAL BY SHAREHOLDERS.
This Plan and the grant of any options hereunder shall be void unless this
Plan is approved by a majority of the Corporation's shareholders present, or
represented and entitled to vote at the 1997 Annual Meeting of Shareholders or
at a special meeting held prior thereto.
- 4 -
<PAGE>
EXHIBIT 4.2
MAIL-WELL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
Amended and Restated, Effective January 1, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
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ARTICLE 1. DEFINITIONS........................................................ 1
ARTICLE 2. ADMINISTRATION..................................................... 11
2.1 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY............. 11
2.2 ALLOCATION AND DELEGATION OF RESPONSIBILITIES...................... 12
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR............................. 12
2.4 RECORDS AND REPORTS................................................ 13
2.5 AUDIT.............................................................. 13
2.6 APPOINTMENT OF ADVISORS............................................ 14
2.7 INFORMATION FROM EMPLOYER.......................................... 14
2.8 PAYMENT OF EXPENSES................................................ 14
2.9 ACTIONS BY ADMINISTRATOR........................................... 15
2.10 CLAIMS PROCEDURE................................................... 15
2.11 CLAIMS REVIEW PROCEDURE............................................ 15
ARTICLE 3. ELIGIBILITY........................................................ 16
3.1 CONDITIONS OF ELIGIBILITY.......................................... 16
3.2 EFFECT OF PARTICIPATION UPON THE ACCEPTANCE OF ANY BENEFITS UNDER
THIS PLAN.......................................................... 16
3.3 DETERMINATION OF ELIGIBILITY....................................... 16
3.4 TERMINATION OF ELIGIBILITY......................................... 16
3.5 OMISSION OF ELIGIBLE EMPLOYEE...................................... 16
3.6 INCLUSION OF INELIGIBLE EMPLOYEE................................... 17
ARTICLE 4. CONTRIBUTION AND ALLOCATION........................................ 17
4.1 EMPLOYER'S CONTRIBUTION............................................ 17
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION......................... 17
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS............... 17
4.4 MAXIMUM ANNUAL ADDITIONS........................................... 21
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.......................... 25
4.6 DIRECTED INVESTMENT ACCOUNT........................................ 26
4.7 SUSPENSE ACCOUNT................................................... 27
ARTICLE 5. FUNDING AND INVESTMENT POLICY....................................... 27
5.1 INVESTMENT POLICY.................................................. 27
5.2 APPLICATION OF CASH................................................ 28
5.3 TRANSACTIONS INVOLVING COMPANY STOCK............................... 28
5.4 LOANS TO THE TRUST................................................. 29
ARTICLE 6. VALUATIONS.......................................................... 30
6.1 VALUATION OF THE TRUST FUND........................................ 30
6.2 METHOD OF VALUATION................................................ 30
ARTICLE 7. DETERMINATION AND DISTRIBUTION OF BENEFITS......................... 31
7.1 BENEFITS UPON RETIREMENT........................................... 31
7.2 BENEFITS UPON EARLY RETIREMENT..................................... 31
7.3 BENEFITS UPON DEATH................................................ 31
7.4 BENEFITS UPON DISABILITY........................................... 32
7.5 BENEFITS UPON TERMINATION.......................................... 32
7.6 DISTRIBUTION OF BENEFITS........................................... 34
</TABLE>
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<TABLE>
<CAPTION>
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7.7 HOW PLAN BENEFITS WILL BE DISTRIBUTED.............................. 37
7.8 DISTRIBUTION FOR MINOR BENEFICIARY................................. 39
7.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN..................... 40
7.10 RIGHT OF FIRST REFUSAL............................................. 40
7.11 STOCK CERTIFICATE LEGEND........................................... 41
7.12 PUT OPTION......................................................... 41
7.13 NONTERMINABLE PROTECTIONS AND RIGHTS............................... 43
7.14 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS.......................... 43
7.15 PAYMENT OF DISTRIBUTION DIRECTLY TO ELIGIBLE RETIREMENT PLAN....... 43
ARTICLE 8. TRUSTEE............................................................ 44
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.............................. 44
8.2 VOTING COMPANY STOCK............................................... 45
ARTICLE 9. AMENDMENT, TERMINATIONS, AND MERGERS............................... 46
9.1 AMENDMENT.......................................................... 46
9.2 TERMINATION........................................................ 47
9.3 MERGER OR CONSOLIDATION............................................ 47
ARTICLE 10. MISCELLANEOUS...................................................... 48
10.1 PARTICIPANT'S RIGHTS............................................... 48
10.2 ALIENATION......................................................... 48
10.3 CONSTRUCTION OF PLAN............................................... 48
10.4 GENDER AND NUMBER.................................................. 48
10.5 LEGAL ACTION....................................................... 49
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS............................. 49
10.7 BONDING............................................................ 49
10.8 RECEIPT AND RELEASE FOR PAYMENTS................................... 49
10.9 ACTION BY THE EMPLOYER............................................. 50
10.10 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY................. 50
10.11 HEADINGS........................................................... 50
10.12 APPROVAL BY INTERNAL REVENUE SERVICE............................... 50
10.13 UNIFORMITY......................................................... 51
10.14 SECURITIES AND EXCHANGE COMMISSION APPROVAL........................ 51
10.15 INDEMNIFICATION.................................................... 51
10.16 CONTROLLING LAW.................................................... 51
ARTICLE 11. PARTICIPATING EMPLOYERS............................................ 51
11.1 ADOPTION BY OTHER EMPLOYERS........................................ 51
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS............................ 52
11.3 DESIGNATION OF AGENT............................................... 52
11.4 EMPLOYEE TRANSFERS................................................. 53
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION.............................. 53
11.6 AMENDMENT.......................................................... 53
11.7 DISCONTINUANCE OF PARTICIPATION.................................... 53
11.8 ADMINISTRATOR'S AUTHORITY.......................................... 53
11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE.................. 54
ARTICLE 12. TOP-HEAVY STATUS................................................... 54
12.1 ARTICLE CONTROLS................................................... 54
12.2 DEFINITIONS........................................................ 54
12.3 TOP-HEAVY STATUS................................................... 56
12.4 TERMINATION OF TOP-HEAVY STATUS.................................... 56
12.5 EFFECT OF ARTICLE.................................................. 56
</TABLE>
- ii -
<PAGE>
MAIL-WELL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
Amended and Restated, Effective January 1, 1995
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Mail-Well Corporation (the "Employer") established the Mail-Well
Corporation Employee Stock Ownership Plan (the "Plan") effective February 23,
1994 (the "Effective Date"), which was intended to be an ESOP.
NOW, THEREFORE, effective as of January 1, 1995, except as otherwise
indicated in specific provisions of the Plan, the Employer hereby amends and
restates the Plan in its entirety to read as follows:
ARTICLE
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
---
may be amended from time to time.
1.2 "Acquisition Date" means the date on which Mail-Well Corporation
----------------
acquires substantially all of the envelope manufacturing assets of G-P Envelope
Holdings, Inc. and the outstanding capital stock of Pavey Envelope and Tag Corp.
1.3 "Administrator" means the person designated by the Employer pursuant
-------------
to Section II.1 to administer the Plan on behalf of the Employer.
1.4 "Affiliated Employer" means the Employer and any Corporation which is
-------------------
a member of a controlled group of corporations (as defined in Code Section
414(b)) which include the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.5 "Anniversary Date" means December 31.
----------------
1.6 "Beneficiary" means the person to whom the share of a deceased
-----------
Participant's total account is payable, subject to the restrictions of Sections
VII.3 and VII.7.
1.7 "Benefit Commencement Date" means with respect to each Participant or
-------------------------
Beneficiary, the date such Participant's or Beneficiary's benefit is paid to him
from the Trust Fund.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or replaced
----
from time to time.
1.9 "Company Stock" means common stock issued by the Employer (or by a
-------------
corporation which is a member of the controlled group of corporations of which
the Employer is a member) which is readily tradeable on an established
securities market. If there is no common stock which meets the foregoing
requirement, the term "Common Stock" means common stock issued by the Employer
(or by a corporation which is a member of the same controlled group) having a
combination
<PAGE>
of voting power and dividend rights equal to or in excess of: (A) that class of
common stock of the Employer (or of any other such corporation) having the
greatest voting power, and (B) that class of stock of the Employer (or of any
other such corporation) having the greatest dividend rights. Preferred Stock
shall be deemed to be "Company Stock" if such stock is convertible at any time
into stock which constitutes "Company Stock" hereunder and if such conversion is
at a conversion price which (as of the date of the acquisition by the Trust) is
reasonable.
1.10 "Company Stock Account" means the account of a Participant which is
---------------------
credited with the shares of Company Stock purchased and paid for by the Trust
Fund or contributed to the Trust Fund.
1.11 "Compensation" with respect to any Participant means such
------------
Participant's "415 Compensation" paid during a Plan Year. The amount of
Compensation with respect to any Participant shall include Compensation for the
entire twelve month period ending on the last day of such Plan Year, except that
Compensation shall be recognized only for that portion of the Plan Year during
which an Employee was a Participant in the Plan. Amounts contributed pursuant
to a salary reduction agreement that are not includable in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions shall also be considered as Compensation. Compensation
shall not include tuition assistance, special awards or any amounts received or
to be received under the Mail-Well Corporation Profit Sharing Plan. With
respect to an Employee who is a sales representative, Compensation shall mean
100% of such Employee's prior year earnings (including only draw and
commissions).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the "OBRA '93 Annual Compensation Limit." The "OBRA '93 Annual Compensation
Limit" is $150,000, as adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). 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 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.
Any reference in this Plan to the limitation under Code Section 401(a)(17)
shall mean the "OBRA '93 Annual Compensation Limit" set forth in this Section.
If Compensation for any prior Determination Period is taken into account in
determining a Participant'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.
- 2 -
<PAGE>
For a Participant's initial year of participation, Compensation shall be
recognized for the entire Plan Year.
1.12 "Current Obligations" means Trust obligations arising from extension
-------------------
of credit to the Trust and payable in cash within (1) year from the date an
Employer contribution is due. Trust obligations shall include the liability for
payment of taxes imposed by Code Section 2001 which liability is incurred
pursuant to Code Section 2210(b).
1.13 "Disability Retirement Date" means the date approval by the Social
--------------------------
Security Administration for disability benefits is received by a Participant.
Notwithstanding the foregoing, the Disability Retirement Date shall occur prior
to such date if a Participant has had a Total and Permanent Disability for a
period of six (6) continuous months and such Total and Permanent Disability
commenced prior to the Participant's termination of employment or within six (6)
months following a 1-Year Break in Service.
1.14 "Early Retirement Date" means the first day of the month coinciding
---------------------
with or next following the Participant's attainment of age 55 and completion of
ten (10) Years of Service.
1.15 "Effective Date" means February 23, 1994.
--------------
1.16 "Eligible Employee" means any Employee who is not a Leased Employee
-----------------
and who has satisfied the provisions of Section III.1.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits were
the subject of good faith bargaining between the parties, unless such agreement
expressly provides for such coverage in this Plan, will not be eligible to
participate in this Plan.
1.17 "Employee" means any person who is employed by the Employer, but
--------
excludes any person who is employed as an independent contractor. Employee
shall include Leased Employees.
1.18 "Employer" means Mail-Well Corporation and any Participating Employer
--------
(as defined in Section XI.1) which shall adopt this Plan; and any successor
which shall maintain this Plan.
1.19 "Employer Contributions" means the Employer's contributions to the
----------------------
Plan pursuant to Section IV.1.(a).
1.20 "ESOP" means an employee stock ownership plan that meets the
----
requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.
1.21 "Exempt Loan" means a loan made to the Plan by a disqualified person
-----------
or a loan to the Plan which is guaranteed by a disqualified person and which
satisfies the requirements of Section 2550.408b-3 of the Department of Labor
Regu lations, Section 54.4975-7(b) of the Treasury regulations and Section V.4
hereof.
- 3 -
<PAGE>
1.22 "Family Member" means an individual described in Code Section
-------------
414(q)(6)(B).
1.23 "Fiduciary" means any person who exercises any discretionary
---------
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or has any discretionary authority or
discretionary responsibility in the administration of the Plan.
1.24 "Fiscal Year" means the Employer's accounting year of 12 months
-----------
commencing on January 1 of each year and ending the following December 31.
1.25 "Forfeiture" means that portion of a Participant's Account that is not
----------
Vested in accordance with the provisions of Section VII.5, on account of the
Participant's termination of employment before full vesting.
1.26 "Former Participant" means a person who has been a Participant, but
------------------
who has ceased to be a Participant for any reason. For purposes of Section I.30,
a "Former Participant" shall be treated as a Highly Compensated Participant if
such "Former Participant" was a Highly Compensated Participant when he separated
from service with the Employer or was a Highly Compensated Participant at any
time after attaining age 55.
1.27 "415 Compensation" means compensation as defined in Section IV.4.(e).
----------------
1.28 "Highly Compensated Employee" means any Employee or former Employee
---------------------------
who is a highly compensated employee as defined in Code Section 414(q) and the
Regulations thereunder. Generally, any Employee or former Employee is
considered a Highly Compensated Employee if such Employee or former Employee
performed services for the Employer during the "determination year" and is one
or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section I.32.(c).
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000. In determining whether an
individual has "415 Compensation" of more than $75,000, "415 Compensation"
from each employer required to be aggregated under Code Sections 414(b),
(c), (m) and (o) shall be taken into account.
(c) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $50,000 and were in the top-paid group
of Employees for the Plan Year. An Employee is in the top-paid group of
Employees for any Plan Year if such Employee is in the group consisting of
the top twenty (20%) percent of the Employees when ranked on the basis of
"415 Compensation" paid during the Plan Year. In determining whether an
individual has "415 Compensation" of more than $50,000, "415 Compensation"
from each employer required to be aggregated under Code Section 414(b),
(c), (m) and (o) shall be taken into account.
- 4 -
<PAGE>
(d) Employees who during the "look-back year" were officers as
defined in Section I.32.(a) and received "415 Compensation" during the
"look-back year" from the Employer greater than 50 percent of the limit in
effect under Code Section 415(b)(1)(A) for any such Plan Year. The number
of officers shall be limited to the lesser of (i) 50 employees; or (ii) the
greater of 3 employees or 10 percent of all employees. For the purpose of
determining the number of officers, the following Employees shall be
excluded:
(1) Employees with less than six (6) months of service;
(2) Employees who normally work less than 17 1/2 hours per week;
(3) Employees who normally work less than six (6) months during
a year; and
(4) Employees who have not yet attained age 21.
However, such Employees shall still be considered for the purpose of
identifying the particular Employees who are officers. If the Employer
does not have at least one officer whose annual "415 Compensation" is in
excess of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a Highly
Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination year" and
are also described in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-back year."
The "look-back year" shall be the calendar year ending with or within the
Plan Year for which testing is being performed, and the "determination year" (if
applicable) shall be the period of time, if any, that extends beyond the "look-
back year" and ends on the last day of the Plan Year for which testing is being
performed (the "lag period"). If the "lag period" is less than twelve months
long, the threshold amounts specified in (b), (c), and (d) above shall be
prorated based upon the number of months in the "lag period."
For purposes of this Section, the determination of "415 Compensation" shall
be based only on "415 Compensation" which is actually paid and shall be made by
including amounts which are contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions. Additionally, the dollar threshold amounts specified in
(b) and (c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of Code
- 5 -
<PAGE>
Section 911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are covered
by a plan described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. The exclusion of Leased Employees
for this purpose shall be applied on a uniform and consistent basis for all of
the Employer's retirement plans
1.29 "Highly Compensated Participant" means any Highly Compensated Employee
------------------------------
who is eligible to participate in the Plan.
1.30 "Hour of Service" means (1) each hour for which an Employee is
---------------
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty,
or leave of absence) during the applicable computation period; and (3) each hour
for which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
The same Hours of Service shall not be credited both under (1) and (2), as the
case may be, and under (3).
Notwithstanding the above, for purposes of eligibility to participate, (i)
no more than 501 Hours of Service are required to be credited to an Employee on
account of any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
an hour for which an Employee is directly or indirectly paid, or entitled to
payment, on account of a period during which no duties are performed is not
required to be credited to the Employee if such payment is made or due under a
plan maintained solely for the purpose of complying with applicable worker's
compensation, or unemployment compensation or disability insurance laws; and
(iii) Hours of Service are not required to be credited for a payment which
solely reimburses an Employee for medical or medically related expenses incurred
by the Employee. Each Employee shall receive credit for forty-five (45) Hours
of Service for each week of a period during which he is credited with Hours of
Service pursuant to this Section for reasons other than performance of duties.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service for eligibility to participate and employment commencement date (or
- 6 -
<PAGE>
reemployment commencement date). The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.31 "Investment Manager" means an entity that has the power to manage,
------------------
acquire, or dispose of Plan assets and acknowledges fiduciary responsibility to
the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code Section 416(i) and
------------
the Regulations thereunder. Generally, any Employee or Former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for any such Plan Year;
(b) one of the ten Employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar limitation in effect
under Code Section 415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within the meaning of Code
Section 318) both more than one-half percent interest and the largest
interests in the Employer;
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than five percent (5%) of the outstanding stock of
the Employer or stock possessing more than five percent (5%) 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%) of
the capital or profits interest in the Employer. In determining percentage
ownership hereunder, Employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as separate
employers; or
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than one percent (1%) of the outstanding stock of
the Employer or stock possessing more than one percent (1%) 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 one percent (1%) of
the capital or profits interest in the Employer. In determining percentage
ownership hereunder, Employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as separate
Employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each employer
required to be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be taken into account.
- 7 -
<PAGE>
For purposes of this Section, the determination of "415 Compensation" shall
be based only on "415 Compensation" which is actually paid and shall be made by
including amounts which are contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
1.33 "Late Retirement Date" means the first day of the month coinciding
--------------------
with or next following a Participant's actual Retirement date after having
reached his Normal Retirement Date.
1.34 "Leased Employee" means any Employee who would be within the meaning
---------------
of Code Section 414(n)(2) unless such Leased Employee is covered by a plan
described in Code Section 414(n)(5) and such Leased Employee does not constitute
more than 20% of the recipient's nonhighly compensated work force.
1.35 "Month of Service" means a calendar month during any part of which an
----------------
Employee completed an Hour of Service. Except, however, a Participant shall be
credited with a Month of Service for each month during the 12 month computation
period during which he has not incurred a 1-Year Break in Service.
1.36 "Non-Highly Compensated Employee" means any Employee or former
-------------------------------
Employee who is not a Highly Compensated Employee nor a Family Member.
1.37 "Non-Highly Compensated Participant" means any Participant or Former
----------------------------------
Participant who is neither a Highly Compensated Participant nor a Family Member.
1.38 "Non-Key Employee" means any Employee or former Employee (and his
----------------
Beneficiaries) who is not a Key Employee.
1.39 "Normal Retirement Date" means the first day of the month coinciding
----------------------
with or next following the Participant's Normal Retirement Age (65th birthday).
A Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.40 "1-Year Break in Service" means the applicable computation period of
-----------------------
12 consecutive months during which an Employee fails to accrue a Month of
Service. Further, solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
Years of Service and 1-Year Breaks in Service shall be measured on the same
computation period.
An Employee shall not be deemed to have incurred a 1-Year Break in Service
if he completes an Hour of Service within 12 months following the last day of
the month during which his employment terminated.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
- 8 -
<PAGE>
A "maternity or paternity leave of absence" means an absence from work for
any period by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of such
child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence from
work begins, only if credit therefore is necessary to prevent the Employees from
incurring a 1-Year Break in Service, or, in any other case, in the immediately
following computation period.
1.41 "Other Investments Account" means the account of a Participant which
-------------------------
is credited with his share of the net gain (or loss) of the Plan, Forfeitures
and Employer Contributions in other than Company Stock and which is debited with
payments made to pay for Company Stock. No Company Stock shall be allocated to
or held in the Other Investments Account.
1.42 "Participant" means any Eligible Employee who participants in the Plan
-----------
pursuant to Section III.1.
1.43 "Participant's Accounts" means the accounts established and maintained
----------------------
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from Employer Contributions, which shall include
but not be limited to the Company Stock Account, the Other Investment Account
and the Directed Investment Account.
1.44 "Plan" means this instrument, including all amendments thereto.
----
1.45 "Plan Year" means the Plan's accounting year of twelve (12) months
---------
commencing on January 1 of each year and ending the following December 31,
except for the first Plan Year which commenced on the Effective Date.
1.46 "Regulation" means the Income Tax Regulations as promulgated by the
----------
Secretary of the Treasury or his delegate, and as amended from time to time.
1.47 "Retired Participant" means a person who has been a Participant, but
-------------------
who has become entitled to retirement benefits under the Plan.
1.48 "Retirement" means the termination of service by a Participant on or
----------
after the attainment of his Early Retirement Date or Normal Retirement Date.
1.49 "Retirement Date" means the date as of which a Participant's
---------------
Retirement occurs, whether such Retirement occurs on the Participant's Early
Retirement Date or Normal Retirement Date.
1.50 "Terminated Participant" means a person who has been a Participant,
----------------------
but whose employment has been terminated other than by death, Total and
Permanent Disability or Retirement.
1.51 "Top Heavy Plan" means a plan described in Article XII.
--------------
1.52 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
-------------------
Heavy Plan.
- 9 -
<PAGE>
1.53 "Total and Permanent Disability" means the complete inability to work
------------------------------
in any position for which the Employee is reasonably fit by education, training
or experience, which condition continues for an extended period of time.
1.54 "Trust" means the trust established under the Trust Agreement to hold
-----
and invest contributions made under the Plan and from which the Plan benefits
will be distributed.
1.55 "Trust Agreement" means the agreement entered into between the
---------------
Employer and the Trustee establishing a trust to hold and invest contributions
made under the Plan and from which benefits will be distributed.
1.56 "Trust Fund" means the assets of the Plan and Trust as the same shall
----------
exist from time to time.
1.57 "Trustee" means the person or entity named as trustee herein or in any
-------
separate trust forming a part of this Plan, and any successors.
1.58 "Unallocated Company Stock Suspense Account" means an account
------------------------------------------
containing Company Stock acquired with the proceeds of an Exempt Loan and which
has not been released from such account and allocated to the Participants'
Company Stock Accounts.
1.59 "Valuation Date" means the last day of the Plan Year or any other date
--------------
as determined by the Administrator.
1.60 "Vested" means the portion of a Participant's Account that is
------
nonforfeitable.
1.61 "Year of Service" means, for purposes of eligibility for
---------------
participation, the computation period of twelve (12) consecutive months, during
which an Employee has at least 1,000 Hours of Service. For all other purposes,
Year of Service means twelve (12) consecutive Months of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service.
For vesting and all other purposes, the computation period shall be the
Plan Year. For purposes of vesting under this Plan, an Employee shall receive
credit for service recognized on his or her behalf under the Georgia-Pacific
Corporation Salaried Employees Retirement Plan, the Georgia-Pacific Corporation
Pension Plan for Hourly-Rated Employees or the Pavey Envelope and Tag
Corporation Employees' Retirement Plan prior to the Effective Date of this Plan,
up to a maximum of two (2) Years of Service. The vesting computation period
beginning after a 1-year Break in Service shall be the Plan Year. Years of
Service with any Affiliated Employer shall be recognized.
- 10 -
<PAGE>
For purposes of vesting under this Plan, an Employee shall receive credit
for service performed as an employee of American Envelope Company prior to
January 1, 1995, up to a maximum of two (2) Years of Service.
For purposes of eligibility to participate in the Plan, Years of Service
prior to the Acquisition date attributable to an Employee in connection with
Hours of Service rendered for and related to the envelope manufacturing assets
of G-P Envelope Holding, Inc. and rendered for Pavey Envelope and Tag
Corporation shall be recognized under this Plan.
For purposes of eligibility to participate in the Plan, Years of Service
prior to January 1, 1995 attributable to an Employee in connection with Hours of
Service rendered for and related to American Envelope Company shall be
recognized under this Plan. Notwithstanding the foregoing, such an Employee may
begin participation in the Plan no earlier than January 1, 1995.
ARTICLE 2.
ADMINISTRATION
2.1 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY
(a) The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall
be eligible to serve as an Administrator. Any person so appointed shall
signify his acceptance by filing written acceptance with the Employer. An
Administrator may resign by delivering his written resignation to the
Employer or be removed by the Employer by delivery of written notice of
removal, to take effect at a date specified therein, or upon delivery to
the Administrator if no date is specified.
(b) The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this
position. If the Employer does not appoint an Administrator, the Employer
will function as the Administrator.
(c) The Employer shall be empowered to appoint and remove the
Administrator from time to time as it deems necessary for the proper
administration of the Plan to assure that the Plan is being operated for
the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act.
(d) The Employer shall periodically review the performance of any the
Administrator or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal
periodic review by the Employer or by a qualified person specifically
designated by the Employer, through day-to-day conduct and evaluation, or
through any other appropriate method.
(e) The Employer will furnish Plan Fiduciaries and Participants with
notices and information statements when voting rights must be exercised
pursuant to Section VIII.2.
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2.2 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the Employer may
designate the responsibilities of each Administrator as may be specified by the
Employer and accepted in writing by each Administrator. In the event that no
such delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
respon sibilities of each Administrator. The Trustee thereafter shall accept
and rely upon any documents executed by the appropriate Administrator until such
time as the Employer or the Administrators file with the Trustee a written
revocation of such designation.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive
and binding upon all persons. The Administrator may establish procedures,
correct any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his duties under
this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) to determine all questions relating to the eligibility of
Employees to participate or remain a Participant hereunder;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
disbursements from the Trust;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
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(f) to determine the size and type of any contract to be purchased
from any insurer, and to designate the insurer from which such contract
shall be purchased;
(g) to compute and certify to the Employer from time to time the sums
of money necessary or desirable to be contributed to the Trust Fund;
(h) to establish a "funding policy and method", i.e., it shall
consult with the Employer, and it shall determine whether the Plan has a
short range need for liquidity (e.g., to pay benefits) or whether liquidity
is a long range goal and investment growth (and stability of same) is a
more current need, or shall appoint a qualified person to do so. Such
"funding policy and method" shall be consistent with the objectives of this
Plan and with the requirements of Title I of the Act;
(i) to establish and communicate to Participants a procedure and
method to insure that each Participant will vote Company Stock allocated to
such Participant's Company Stock Account pursuant to Section VIII.2;
(j) to enter into a written agreement with regard to the payment of
federal estate tax pursuant to Code Section 2210(b);
(k) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.5 AUDIT
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator shall
appoint an independent qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of the Plan in
accordance with generally accepted auditing standards, within a reasonable
period after the close of the Plan Year, furnish to the Administrator and
the Trustee a report of his audit setting forth his opinion as to whether
each of the following statements, schedules or lists, or any others that
are required by Section 103 of the Act or the Secretary of Labor to be
filed with the Plan's annual report, are presented fairly and in conformity
with generally accepted accounting principles applied consistently:
(1) statement of the assets and liabilities of the Plan;
(2) statement of changes in net assets available to the Plan;
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(3) statement of receipts and disbursements, a schedule of all
assets held for investment purposes, a schedule of all loans or fixed
income obligations in default at the close of the Plan Year;
(4) a list of all leases in default or uncollectible during the
Plan Year;
(5) the most recent annual statement of assets and liabilities
of any bank common or collective trust fund in which Plan assets are
invested or such information regarding separate accounts or trusts
with a bank or insurance company as the Administrator deems necessary;
and
(6) a schedule of each transaction or series of transactions
involving an amount in excess of five percent (5%) of Plan assets.
All auditing and accounting fees shall be an expense of and may, at
the election of the Administrator, be paid from the Trust Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Section 103 of the Act is maintained by a
bank, insurance company, or similar institution, regulated and supervised
and sub ject to periodic examination by a state or federal agency, it
shall transmit and certify the accuracy of that information to the
Administrator as provided in Section 103(b) of the Act within one hundred
twenty (120) days after the end of the Plan Year or such other date as may
be prescribed under regulations of the Secretary of Labor.
2.6 APPOINTMENT OF ADVISORS
The Administrator may appoint counsel, specialists, advisors, and other
persons as the Administrator deems necessary or desirable in connection with the
administration of this Plan.
2.7 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.8 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of accoun
tants, counsel, the Trustee and other specialists and their agents, and other
costs of administering the Plan and/or the Trust. Until paid, the expenses
shall
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constitute a liability of the Trust Fund. However, the Employer may reimburse
the Trust Fund for any administration expense incurred. Any administration
expense paid to the Trust Fund as a reimbursement shall not be considered an
Employer contribution.
2.9 ACTIONS BY ADMINISTRATOR
The Administrator shall hold meetings upon such notice and at such time and
places as it may from time to time determine. Notice to a member shall not be
required if waived in writing by that member. A majority of the members of the
Administrator duly appointed shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Administrator at any
meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
Administrators.
2.10 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with the Administrator on
forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood by
the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished an explanation of the
Plan's claims review procedure.
2.11 CLAIMS REVIEW PROCEDURE
Any Employee, Former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section II.10
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section II.10. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the
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special circumstances occasioning it are communicated to the claimant within the
60 day period). Such communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on which the decision
is based.
ARTICLE 3.
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed a Year of Service as of the
Acquisition Date and has attained the age of twenty-one (21) years shall
participate in the Plan commencing on the Acquisition Date. All other Eligible
Employees shall become Participants as of the January 1 or July 1 coincident
with or next following their completion of one (1) Year of Service or their
attaining the age of twenty-one (21) years, whichever is later.
3.2 EFFECT OF PARTICIPATION UPON THE ACCEPTANCE OF ANY BENEFITS UNDER THIS
PLAN
An Eligible Employee shall automatically be bound by the terms and
conditions of the Plan and all amendments hereto.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review as provided for in Section II.8 and II.9.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to a noneligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Fiscal Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the Employer would have contributed with respect to
him had he not been omitted. Such contribution shall be made regardless of
whether or not it is deductible in whole or in part in any taxable year under
applicable provisions of the Code.
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3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Fiscal Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with
respect to the ineligible person shall constitute a Forfeiture for the Fiscal
Year in which the discovery is made.
ARTICLE 4.
CONTRIBUTION AND ALLOCATION
4.1 EMPLOYER'S CONTRIBUTION
(a) For each Plan Year, the Employer shall contribute to the Plan an
amount as may be determined by its Board of Directors or its delegatees.
(b) The Employer Contribution for any Plan Year shall not exceed the
maximum amount allowable as a deduction to the Employer under the
provisions of Code Section 404.
(c) However, to the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds the
amount which is deductible under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
Employer Contributions will be paid in cash, Company Stock or other
property as the Employer's Board of Directors or its delegatees may from time to
time determine. Company Stock and other property will be valued at their then
fair market value. The Employer Contribution will be paid to the Plan on or
before the date required to make such contribution a deduction on the Employer's
federal income tax return for the year.
Notwithstanding the above, to the extent that the Plan has Current
Obligations, the Employer Contribution will be paid to the Plan in cash.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date all amounts allocated to each such Participant as set
forth herein. However, the Administrator may separately account for that
portion of each Participant's Account attributable to Top Heavy Plan Years.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer
Contribution for each Plan Year. Within 45 days after the date of receipt
by the Administrator for such information, the
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Administrator shall, with respect to the Employer Contribution pursuant to
IV.1(a), allocate such Contribution to each Participant's Account in the
same proportion that each such Participant's Compensation for the year
bears to the total Compensation of all Participants for such year.
A Participant who is not an Employee on the last day of the Plan Year
shall not share in the Employer Contribution for that year, unless required
pursuant to Section IV.3.(i) or IV.3.(n). A Participant who performs less
than a Year of Service shall not share in the Employer Contribution for
that year, unless required pursuant to Section IV.3(i) or IV.3.(n).
(c) The Company Stock Account of each Participant shall be credited
as of each Anniversary Date with Forfeitures of Company Stock and his
allocable share of Company Stock (including fractional shares) purchased
and paid for by the Plan or contributed in kind by the Employer. Stock
dividends on Company Stock held in his Company Stock Account shall be
credited to his Company Stock Account when paid. Cash dividends on Company
Stock held in his Company Stock Account shall be used to repay an Exempt
Loan, so long as one exists and may then, in the sole discretion of the
Administrator, be credited to his Participants Other Investments Account.
Company Stock acquired by the Plan with the proceeds of an Exempt Loan
shall only be allocated to each Participant's Company Stock Account upon
release from the Unallocated Company Stock Suspense Account as provided in
Section IV.3 herein. Company Stock acquired with the proceeds of an Exempt
Loan shall be an asset of the Trust Fund and maintained in the Unallocated
Company Stock Suspense Account.
Company Stock received by the Trust during a Plan Year with respect to
a contribution by the Employer for the preceding Plan Year shall be
allocated to the accounts of Participants as of the Anniversary Date at the
end of such preceding Plan Year.
(d) As of each Anniversary Date or as of the Valuation Date, before
allocation of Employer Contributions and Forfeitures, any earnings or
losses (net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's Other Investment Accounts (other than each Participant's
Company Stock Account) bear to the total of all Participants' and Former
Participants' Other Investment Accounts (other than participants' Company
Stock Accounts) as of such date. Cash dividends on Company Stock allocated
to each Participant's or Former Participant's Other Investment Accounts
after the first month of the Plan Year shall not share in any earnings or
losses of the Trust Fund for such year. Earnings or losses include the
increase (or decrease) in the fair market value of assets of the Trust Fund
(other than Company Stock in the participants' Company Stock Accounts)
since the preceding Anniversary Date.
Earnings or losses do not include the interest paid under any
installment contract for the purchase of Company Stock by the Trust Fund or
on any loan used by the Trust Fund to purchase Company Stock, nor does
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it include income received by the Trust Fund with respect to Company Stock
acquired with the proceeds of an Exempt Loan to the extent such income is
used to repay the loan; all income received by the Trust Fund from Company
Stock acquired with the proceeds of an Exempt Loan shall be used to repay
such loan.
(e) The Administrator shall establish accounting procedures for the
purpose of making the allocations, valuations and adjustments to
Participants' Accounts provided for in this Section. Should the
Administrator determine that the strict application of its accounting
procedures shall not result in an equitable and nondiscriminatory
allocation among the Participants' Accounts, it may modify its procedures
for the purpose of achieving an equitable and nondiscriminatory allocation
in accor dance with the general concepts of the Plan and the provisions of
this Section, provided, however, that such adjustments to achieve equity
shall not reduce the Vested portion of a Participant's Account.
(f) Separate accounts shall be maintained for all inactive
Participants who have a Vested interest in the Plan. Such separate
accounts shall not require a segregation of the Plan assets and no
Participant shall acquire any right to or interest in any specific asset of
the Trust as a result of the allocations provided for in the Plan. All
allocations shall be made as of the Anniversary Date referred to in this
Section.
(g) All Company Stock acquired by the Plan with the proceeds of an
Exempt Loan must be added to and maintained in the Unallocated Company
Stock Suspense Account. Such Company Stock shall be released and withdrawn
from that account as if all Company Stock in that account were encumbered.
For each Plan Year during the duration of the loan, the number of shares of
Company Stock released shall equal the number of encumbered shares held
immediately before release for the current Plan Year multiplied by a
fraction, the numerator of which is the amount of principal paid for the
Plan Year and the denominator of which is the sum of the numerator plus the
principal to be paid for all future Plan Years. As of each Anniversary
Date, the Plan must consistently allocate to each Participant's Account
pursuant to Section IV.3.(b), non-monetary units (shares and fractional
shares of Company Stock) representing each Participant's interest in assets
withdrawn from the Unallocated Company Stock Suspense Account. Income
earned with respect to Company Stock in the Unallocated Company Stock
Suspense Account shall be used to repay the Exempt Loan or used to purchase
such Company Stock. Any income which is not so used must be allocated as
income of the Plan.
(h) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any. The
remaining Forfeitures, if any, shall be allocated among the Participants'
Accounts in the same proportion that each such Participant's Compensation
for the year bears to the total Compensation of all Participants for the
year. In the event the allocation of Forfeitures provided herein shall
cause the "annual addition" (as defined in Section IV.4) to any
Participant's Account to exceed the amount allowable by
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the Code, the excess shall be reallocated in accordance with Section IV.5.
However, a Participant who performs less than a Year of Service during any
Plan Year shall not share in the Plan Forfeitures for that year, unless
required pursuant to Section IV.3.(i).
(i) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer Contributions and Forfeitures allocated to the Participant's
Account for each Non-Key Employee shall be equal to at least three percent
(3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in a Required
Aggregation Group). However, if (i) the sum of the Employer Contributions
and Forfeitures allocated to the Participant's Account of each Key Employee
for such Top Heavy Plan Year is less than three percent (3%) of each Key
Employee's "415 Compensation" and (ii) this Plan is not required to be
included in an Aggregation Group to enable a defined benefit plan to meet
the requirements of Code Section 401(a)(4) of 410, the sum of the Employer
Contributions and Forfeitures allocated to the Participant's Account of
each Non-Key Employee shall be equal to the largest percentage allocated to
the Participant's Account of any Key Employee.
Except, however, no such minimum allocation shall be required in this
Plan for any Non-Key Employee who participates in another defined
contribution plan subject to Code Section 412 providing such benefits
included with this Plan in a Required Aggregation Group.
(j) For purposes of the minimum allocations set forth above the
percentage allocated to the Participant's Account of any Key Employee shall
be equal to the ratio of the sum of the Employer Contributions and
Forfeitures allocated on behalf of such Key Employee divided by the "415
Compensation" for such Key Employee.
(k) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Account of all Non-Key
Employees who are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who have (1) failed
to complete a Year of Service; (2) declined to make mandatory contributions
(if required) or elective deferrals to the Plan; and (3) been excluded from
participation because of their level of Compensation.
(l) In lieu of the above, in any Plan Year in which a Non-Key
Employee is a Participant in both this Plan and a defined benefit pension
plan included in a Required Aggregation Group which is top heavy, the
Employer shall not be required to provide such Non-Key Employee with both
the full separate defined benefit plan minimum benefit and the full
separate defined contribution plan minimum allocation.
Therefore, for any Plan Year when the Plan is a Top Heavy Plan, Non-
Key Employees who are participating in this Plan and a defined benefit plan
maintained by the Employer shall receive a minimum monthly accrued benefit
in the defined benefit plan equal to the product of (1) one-
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twelfth (1/12th) of "415 Compensation" averaged over a five (5) consecutive
"limitation years" (or actual "limitation years" if less) which produce the
highest average and (2) the lesser of (i) two percent (2%) multiplied by
Years of Service when the plan is top heavy or (ii) twenty percent (20%).
(m) For the purposes of this Section, "415 Compensation" shall be as
defined in Section IV.4.(3), and shall be limited to $150,000 in all Plan
Years (unless adjusted in such manner as permitted under Code Section
401(a)(17).
(n) Notwithstanding anything herein to the contrary, a Participant
terminating for reasons of death, Total and Permanent Disability or
Retirement shall share in the allocations of contributions and Forfeitures
provided for in this Section regardless of whether he completed a Year of
Service during the Plan Year or was an Employee on the last day of the Plan
Year.
(o) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as
follows:
(1) one account for nonforfeitable benefits attributable to pre-
break service; and
(2) one account representing his status in the Plan attributable
to post-break service.
4.4 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall equal
the lesser of: (1) $30,000 or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year".
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts for
any "limitation year" of (1) Employer Contributions, (2) Employee
contributions, (3) Forfeitures, (4) amounts allocated, after March 31,
1984, to an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan maintained by the
Employer and (5) 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 Code Section 419A(d)(3)) under a
welfare benefit plan (as defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation" percentage limitation
referred to in paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code Section
419A(f)(2)) after separation from service which is otherwise treated as an
"annual addition", or (2) any amount otherwise treated as an "annual
addition" under Code Section 415(l)(1).
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(c) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition." In addition, the following are not Employee contributions for
the purposes of Section IV.4.(b)(2): (1) rollover contributions (as defined
in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2)
repayments of loans made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(7)(B)
(cash-outs); (4) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(3)(D) (mandatory contributions); and (5)
Employee contributions to a simplified employee pension excludable from
gross income under Code Section 408(k)(6).
(d) If no more than one-third of the Employer Contributions to this
Plan for a Plan Year which are deductible under Code Section 404(a)(9) are
allocated to Highly Compensated Employees, the limitations of paragraph (a)
shall not apply to:
(1) Forfeitures of Company Stock which were acquired with the
proceeds of an Exempt Loan, or
(2) Employer Contributions to this Plan which are deductible
under Code Section 404(a)(9)(B) and charged against the Participant's
accounts.
(e) For purposes of applying the limitations of Code Section 415,
"415 Compensation" shall include the Participant's wages, salaries, fees
for professional services, and other amounts received for personal services
ac tually rendered in the course of employment with an Employer
maintaining the Plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
and reimbursements or other expense allowances under a nonaccountable plan
(as described in Regulation 1.62-2(c)) for a Plan Year.
"415 Compensation" shall exclude (1)(A) contributions made by the
Employer to a plan of deferred compensation to the extent that, before the
application of the Code Section 415 limitations to the Plan, the contribu
tions are not includable in the gross income of the Employee for the
taxable year in which contributed, (B) Employer contributions made on
behalf of an Employee to a simplified employee pension plan described in
Code Section 408(k) to the extent such contributions are excludable from
the Employee's gross income, (C) any distributions from a plan of deferred
compensation; (2) amounts realized from the exercise of a non-qualified
stock option or when restricted stock (or property) held by an Employee
either becomes freely transferable or is no longer subject to a substantial
risk of forfeiture; (3) amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option; and (4) other
amounts that 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 the Employer
(whether or not under a salary reduction agreement) towards the purchase of
any annuity contract described in Code
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Section 403(b) (whether or not the contributions are excludable from the
gross income of the Employee). "415 Compensation" shall be limited to
$150,000 (unless adjusted in the same manner as permitted under Code
Section 415(d)).
(f) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Plan Year.
(g) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code
Section 415(d) pursuant to the Regulations. The adjusted limitation is
effective as of January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(h) For the purpose of this Section, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(i) For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control
(as defined by Code Section 1563(a) or Code Section 414(b) and (c) as
modified by Code Section 415(h)), is a member of an affiliated service
group (as defined by Code Section 414(m)), or is a member of a group of
entities required to be aggregated pursuant to Regulations under Code
Section 414(o), all Employees of such Employers shall be considered to be
employed by a single Employer.
(j) For the purpose of this Section, if this Plan is a Code Section
413(c) plan, all Employers of a Participant who maintain this Plan will be
considered to be a single Employer.
(k) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited to such Participant's
accounts during the "limitation year."
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan not
subject to Code Section 412 maintained by the Employer which have the
same Anniversary Date, "annual additions" will be credited to the
Participant's accounts under the defined contribution plan subject to
Code Section 412 prior to crediting "annual additions" to the
Participant's accounts under the defined contribution plan not subject
to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product of (A) the
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maximum "annual additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs (1) or (2) above,
multiplied by (B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's accounts
under this Plan without regard to the limitations of Code Section 415
and (ii) the denominator of which is such "annual additions" for all
plans described in this subparagraph.
(l) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans maintained
by the Employer, the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any "limitation year" may not exceed
1.0.
(m) The defined benefit plan fraction for any "limitation year" is 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 125 percent of the dollar limitation determined for the
"limitation year" under Code Sections 415(b) and (d) or 140 percent of the
highest average compensation, including any adjustments under Code Section
415(b).
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first "limitation year" beginning after December 31,
1986, in one or more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction will not
be less than 125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the close of the last "limitation
year" beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section 415 for all "limitation years"
beginning before January 1, 1987.
(n) The defined contribution plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the annual additions to
the Participant's Account 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 Employee contributions to all defined benefit
plans, whether or not terminated, maintained by the Employer, and the
annual additions attributable to all welfare benefit funds, as defined in
Code Section 419(e), and individual medical accounts, as defined in Code
Section 415(l)(2), 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" of service 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 125
percent of the dollar limitation determined under Code Sections 415(b) and
(d) in effect under Code Section 415(c)(1)(A) or 35 percent of the
Participant's Compensation for such year.
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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 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of the end
of the last "limitation year" beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Code 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.
(o) Notwithstanding the foregoing, for any "limitation year" in which
the Plan is a Top Heavy Plan, 100 percent shall be substituted for 125
percent in paragraph (l) and (m) unless the extra minimum allocation is
being provided pursuant to Section IV.3.(i). However, for any "limitation
year" in which the Plan is a Super Top Heavy Plan, 100 percent shall be
substituted for 125 percent in any event.
(p) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall exceed 1.0 in any "limitation year" for
any Participant in this Plan, the Administrator shall limit, to the extent
necessary, the "annual additions" to such Participant's accounts for such
"limitation year." If, after limiting the "annual additions" to such
Participant's accounts for the "limitation year," the sum of the defined
benefit plan fraction and the defined contribution plan fraction still
exceed 1.0, the Administrator shall then adjust the numerator of the
defined benefit plan fraction so that the sum of both fractions shall not
exceed 1.0 in any "limitation year" for such Participant.
(q) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in
this Section shall at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures a reasonable
error in estimating a Participant's Compensation or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the
"annual additions" under this Plan would cause the maximum "annual
additions" to be exceeded for any Participant, the Administrator shall (1)
hold any "excess amount" remaining after the return of any voluntary
Employee contributions in a "Section 415 suspense account" (2) allocate and
reallocate the "Section 415 suspense account" in the next "limitation
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year" (and succeeding "limitation years" if necessary) to all Participants
in the Plan before any Employer or Employee contributions which would
constitute "annual additions" are made to the Plan for such "limitation
year" or (3) reduce Employer Contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account" allocated and
reallocated during such "limitation year".
(b) For purposes of this Article, "excess amount" for any Participant
for a "limitation year" shall mean the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the
Plan without regard to the limitations of Code Section 415 over (2) the
maximum "annual additions" determined pursuant to Section 415.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts" for
all Participants in the Plan during the "limitation year". The "Section
415 suspense account" shall not share in any earnings or losses of the
Trust Fund.
(d) The Plan may not distribute "excess amounts" to Participants or
Former Participants.
4.6 DIRECTED INVESTMENT ACCOUNT
(a) Each "Qualified Participant" may elect within ninety (90) days
after the close of each Plan Year during the "Qualified Election Period" to
direct the Administrator in writing as to the investment of at least 25
percent of the Participant's Company Stock Account (to the extent such
portion exceeds the amount to which a prior election under this
subparagraph applies). In the case of the election year in which the
Participant can make his last election, the preceding sentence shall be
applied by substituting "50 percent" for "25 percent". If the "Qualified
Participant" elects to direct the Administrator as to the investment of his
Company Stock Account, such direction shall be effective no later than 180
days after the close of the Plan Year to which such direction applies. In
lieu of directing the Administrator as to the investment of his Company
Stock Account, the "Qualified Participant" may elect a distribution in cash
or Company Stock of the portion of his Company Stock Account covered by the
election within ninety (90) days after the last day of the period during
which the election can be made. Any such distribution of Company Stock
shall be subject to Section VII.12.
(b) For the purposes of this Section the following definitions shall
apply:
(1) "Qualified Participant" means any Participant or Former
Participant who has completed ten (10) Plan Years of Service as a
Participant and has attained age 55.
(2) "Qualified Election Period" means the five (5) Plan Year
period beginning with the Plan Year after the Plan Year in which the
Participant attains age 55 (or, if later, beginning with the Plan
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Year after the first Plan Year in which the Participant first became a
"Qualified Participant").
(c) A separate Directed Investment Account shall be established for
each Participant who has directed an investment. Transfers between the
Participant's regular account and his Directed Investment Account shall be
charged and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund earnings, but it shall be
charged or credited as appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in market value during
each Plan Year attributable to such account. To the extent so directed,
the Administrators are relieved of their fiduciary responsibilities as
provided in Section 404 of the Act.
(d) Each Qualified Participant may direct the Administrator to
separate and keep separate all or a portion of his share of his Company
Stock Account; and further each Qualified Participant is authorized and
empowered, in his sole and absolute discretion, to give directions to the
Administrator in such form as the Administrator may require concerning the
investment of the Participant's Directed Investment Account, which direc
tions must be followed by the Administrator. The Administrator shall be
under any duty to question any such direction of the Participant or to
review any securities or other property, real or personal, or to make any
suggestions to the Participant in connection therewith, and the Trustee
shall comply as promptly as practicable with directions given by the
Qualified Participant hereunder. Any such direction may be of a continuing
nature or otherwise and may be revoked by the Participant at any time in
such form as the Administrator may require. The Administrator shall not be
responsible or liable for any loss or expense which may arise from or
result from compliance with any directions from the Participant nor shall
the Administrator be responsible for, or liable for any loss or expense
which may result from the Administrator's refusal or failure to comply with
any directions from the Participant. Any costs and expenses related to
compliance with the Qualified Participant's directions shall be borne by
the Participant's Directed Investment Account.
4.7 SUSPENSE ACCOUNT
All Employer Contributions, Forfeitures and net income (or net loss) of the
Trust Fund shall be held in a suspense account until allocated to the applicable
Participants' Accounts.
ARTICLE 5.
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY
(a) The Plan is designed to invest primarily in Company Stock.
(b) With due regard to subparagraph (a) above, the Administrator may
direct the Trustee to invest funds under the Plan in other property as
described in the Trust Agreement or direct the Trustee to hold such funds
in cash or cash equivalents.
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(c) The Plan may not obligate itself to acquire Company Stock from a
particular holder thereof at an indefinite time determined upon the
happening of an event such as the death of the holder.
(d) The Plan may not obligate itself to acquire Company Stock under a
put option binding upon the Plan. However, at the time a put option is
exercised, the Plan may be given an option to assume the rights and obliga
tions of the Employer under a put option binding upon the Employer.
(e) All purchases or sales of Company Stock and the price of such
purchases or sales shall be made as the Administrator instructs the
Trustee. All purchases of Company Stock shall be made at a price which, in
the judgment of the Administrator, does not exceed the fair market value
thereof. All sales of Company Stock shall be made at a price which, in the
judgment of the Administrator, is not less than the fair market value
thereof. The valuation rules set forth in Article VI shall be applicable.
5.2 APPLICATION OF CASH
Employer Contributions received by the Trust Fund shall first be applied to
pay any Current Obligations of the Trust Fund.
5.3 TRANSACTIONS INVOLVING COMPANY STOCK
(a) No portion of the Trust Fund attributable to (or allocable in
lieu of) Company Stock acquired by the Plan in a sale to which Code Section
1042 or Code Section 2057 applies may accrue or be allocated directly or
indirectly under any plan maintained by the Employer meeting the
requirements of Code Section 401(a):
(1) during the "Nonallocation Period", for the benefit of;
(i) any taxpayer who makes an election under Code Section
1042(a) with respect to Company Stock or any decedent if the
executor of the estate of the decedent makes a qualified sale to
which Code Section 2057 applies,
(ii) any individual who is related to the taxpayer or the
decedent (within the meaning of Code Section 267(b)), or
(2) for the benefit of any other person who owns (after
application of Code Section 318(a)) more than 25 percent of;
(i) any class of outstanding stock of the Employer which
issued such Company Stock, or
(ii) the total value of any class of outstanding stock of
the Employer.
(b) Except, however, subparagraph (a)(1)(ii) above shall not apply to
lineal descendants of the taxpayer, provided that, the aggregate amount
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allocated to the benefit of all such lineal descendants during the
"Nonallocation Period" does not exceed more than five (5) percent of the
Company Stock (or amounts allocated in lieu thereof) held by the Plan which
are attributable to a sale to the Plan by any person related to such
descendants (within the meaning of Code Section 267(c)(4)) in a transaction
to which Code Section 1042 applied.
(c) A person shall be treated as failing to meet the stock ownership
limitation under paragraph (a)(2) above if such person fails such
limitation:
(1) at any time during the one (1) year period ending on the date
of sale of Company Stock to the Plan, or
(2) on the date as of which Company Stock is allocated to
Participants in the Plan.
(d) For purposes of this Section, "Nonallocation Period" means the
ten (10) year period beginning on the later of:
(1) the date of the sale of the Company Stock, or
(2) the date of the Plan allocation attributable to the final
payment of the Exempt Loan incurred in connection with such sale.
5.4 LOANS TO THE TRUST
(a) The Plan may, but only upon the direction of the Administrator,
borrow money for any lawful purpose, provided, the proceeds of an Exempt
Loan are used within a reasonable time after receipt only for any or all of
the following purposes:
(1) To acquire Company Stock.
(2) To repay such loan.
(3) To repay a prior Exempt Loan.
(b) All loans to the Trust which are made or guaranteed by a
disqualified person must satisfy all requirements applicable to Exempt
Loans including but not limited to the following:
(1) The loan must be at a reasonable rate of interest;
(2) Any collateral pledged to the creditor by the Plan shall
consist only of the Company Stock purchased with the borrower funds;
(3) Under the terms of the loan, any pledge of Company Stock
shall provide for the release of shares so pledged on a pro-rata
basis pursuant to Section IV.3.(g);
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(4) Under the terms of the loan, the creditor shall have no recourse
against the Plan except with respect to such collateral, earnings
attributable to such collateral, Employer Contributions (other than
contributions of Company Stock) that are made to meet Current Obligations
and earnings attributable to such contributions;
(5) The loan must be for a specific term and may not be payable at
the demand of any person, except in the cause of a default.
(6) In the event of default upon an Exempt Loan, the value of the
Trust Fund transferred in satisfaction of the Exempt Loan shall not exceed
the amount of default. If the lender is a disqualified person, an Exempt
Loan shall provide for a transfer of Trust Funds upon default only upon and
to the extent of the failure of the Plan to meet the payment schedule of
the Exempt Loan;
(7) Exempt Loan payments during a Plan Year must not exceed an amount
equal to: (A) the sum, over all Plan Years, of all Employer Contributions
made by the Employer to the Plan with respect to such Exempt Loan and
earnings on such Employer Contributions, less (B) the sum of the Exempt
Loan payments in all preceding Plan Years. A separate accounting shall be
maintained for such Employer Contributions and earnings until the Exempt
Loan is repaid.
(c) For purposes of this Section, the term "disqualified person" means a
person who is a Fiduciary, a person providing services to the Plan, an
Employer, any of whose Employees are covered by the Plan, an employee
organization any of whose members are covered by the Plan, an owner, direct
or indirect, of 50% or more of the total combined voting power of all classes
of voting stock, or an officer, director, 10% or more shareholder, or a
Highly Compensated Employee.
ARTICLE 6.
VALUATIONS
6.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date", to determine the net worth of the assets comprising the
Trust Fund, other than Company Stock, as it exists on the "valuation date" prior
to taking into consideration any contribution to be allocated for that Plan
Year. In determining such net worth, the Trustee shall value the assets
comprising the Trust Fund, other than Company Stock, at their fair market value
as of the "valuation date" and shall deduct all expenses for which the Trustee
has not yet obtained reimbursement from the Employer or the Trust Fund. The
Administrator shall have the duty of determining the fair market value of
Company Stock.
6.2 METHOD OF VALUATION
Valuations must be made in good faith and based on all relevant factors for
determining the fair market value of securities. In the case of a transaction
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between a Plan and a disqualified person, value must be determined as of the
date of the transaction. For all other Plan purposes, value must be determined
as of the most recent valuation date under the Plan. An independent appraisal
will not in itself be a good faith determination of value in the case of a
transaction between the Plan and a disqualified person. However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will be deemed
to be a good faith determination of value. Company Stock not readily tradeable
on an established securities market shall be valued by an independent appraiser
appointed by the Administrator meeting requirements similar to the requirements
of the Regulations prescribed under Code Section 170(a)(1).
ARTICLE 7.
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 BENEFITS UPON RETIREMENT
A Participant who terminates his employment on or after his Normal
Retirement Date shall be distributed a benefit in accordance with Section VII.6
equal in value to the balance in the Participant's Accounts as of his Benefit
Commencement Date, such balance to be determined as of the Valuation Date
immediately preceding the Participant's Benefit Commencement Date.
7.2 BENEFITS UPON EARLY RETIREMENT
A Participant who terminates his employment on or after his Early
Retirement Date but prior to his Normal Retirement Date shall be distributed a
benefit in accordance with Section VII.6 equal in value to the sum of his Vested
interest in his Participant's Accounts as of his Benefit Commencement Date, such
balance to be determined as of the Valuation Date immediately preceding the
Participant's Benefit Commencement Date.
7.3 BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, the Participant's Beneficiary shall be
distributed a benefit in accordance with Section VII.6 equal in value to
the balance in the Participant's Accounts as of the Benefit Commencement
Date to the Beneficiary, such balance to be determined as of the Valuation
Date immediately preceding such Benefit Commencement Date.
(b) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant as the Administrator may deem desirable.
The Administrator's determination of death and of the right of any person
to receive payment shall be conclusive.
(c) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse; provided, however, the
Participant may designate a Beneficiary other than his spouse if:
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(1) the spouse has waived her right to be the Participant's
Beneficiary, or
(2) the Participant has no spouse, or
(3) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a
form satisfactory to the Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any such
change or revocation unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elected to relinquish such right. In the event
no valid designation of Beneficiary exists at the time of the Participant's
death, the death benefit shall be payable to his estate.
(d) Any consent by the Participant's spouse to waive any rights to
the death benefit must be in writing, must acknowledge the effect of such
waiver, and be witnessed by a Plan representative or a notary public.
Further, the spouse's consent must be irrevocable and must acknowledge the
specific nonspouse Beneficiary.
7.4 BENEFITS UPON DISABILITY
In the event a Participant's employment is terminated due to a Total and
Permanent Disability prior to his Retirement Date or other termination of his
employment, such Participant shall be distributed a benefit in accordance with
Section VII.6 equal in value to the balance in the Participant's Accounts as of
his Benefit Commencement Date, such balance to be determined as of the Valuation
Date immediately preceding his Benefit Commencement Date.
7.5 BENEFITS UPON TERMINATION
(a) Each Participant whose employment is terminated for any reason
other than Total and Permanent Disability, Retirement or death shall be
distributed a benefit in accordance with Section VII.6 equal in value to
the sum of his Vested interest in the balance of his Participant's Accounts
as of his Benefit Commencement Date, such balance to be determined as of
the Valuation Date immediately preceding his Benefit Commencement Date.
(b) For purposes of this Section, a Participant's Vested interest in
Participant's Accounts shall be determined by such Participant's years of
Vesting Service in accordance with the following schedule:
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Years of Vesting Service Vested Interest
------------------------ ---------------
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
If a portion of a Participant's Account is forfeited, Company Stock
allocated to the Participant's Company Stock Account must be forfeited only
after the Participant's Other Investments Account has been depleted. If
interest in more than one class of Company Stock has been allocated to a
Participant's Account, the Participant must be treated as forfeiting the
same proportion of each such class.
(c) The computation of a Participant's nonforfeitable percentage of
his interest in the Plan shall not be reduced as the result of any direct
or indirect amendment to this Article. In the event that the Plan is
amended to change or modify any vesting schedule, a Participant with a
least three (3) Years of Service as of the expiration date of the election
period may elect to have his nonforfeitable percentage computed under the
Plan without regard to such amendment. If a Participant fails to make such
election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the adoption
date of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(d) Paragraph (b) above not withstanding, a Participant shall have a
100% Vested interest in his Participant's Accounts upon attainment of
his Normal Retirement Date.
(e) (1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of 5 consecutive 1-Year Breaks in Service commencing
after the distribution. In the event the Former Participant does repay
the full amount distributed to him, the
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undistributed portion of the Participant's Account must be restored in full,
unadjusted by any gains or losses occurring subsequent to the Anniversary
Date or other valuation date preceding his termination.
(3) If any Former Participant is reemployed after a 1-Year Break in
Service has occurred, Years of Service shall include Years of Service prior
to his 1-Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in Service, his
pre-break and post-break service shall be used for computing Years of
Service for eligibility and for vesting purposes only after he has
been employed for one (1) Year of Service following the date of his
reemployment with the Employer;
(ii) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer Contributions shall lose credits otherwise allowable under
(i) above if his consecutive 1-Year Breaks in Service equal or exceed
the greater of (A) five (5) or (B) the aggregate number of his pre-
break Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in Service, a Former
Participant's Vested Account balance attributable to pre-break service
shall not be increased as a result of post-break service;
(iv) If a Former Participant who has not had his Years of Service
before a 1-Year Break in Service disregarded pursuant to (ii) above
completes one (1) Year of Service for eligibility purposes following
his reemployment with the Employer, he shall participate in the Plan
retroactively from his date of reemployment;
(v) If a Former Participant who has not had his Years of Service
before a 1-Year Break in Service disregarded pursuant to (ii) above
completes one (1) Year of Service for eligibility purposes following
his reemployment with the Employer (a 1-Year Break in Service
previously occurred, but employment had not terminated), he shall
participate in the Plan retroactively from his reemployment
commencement date.
7.6 DISTRIBUTION OF BENEFITS
(a) Except as provided in paragraph (c) below, payment of Participant's
benefit hereunder shall be made as soon as administratively feasible after the
Valuation Date coincident or next succeeding the date the Participant or his
Beneficiary becomes entitled to a benefit pursuant to Sections VII.1, VII.2,
VII.3, VII.4, or VII.5.
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(b) With respect to benefits that have accrued under the Plan prior
to the date on which this amendment and restatement is approved by the
Board of Directors of the Employer, the Administrator, pursuant to the
election of the Participant (or if no election has been made prior to the
Participant's death, by his Beneficiary), shall direct the Trustee to
distribute to a Participant or his Beneficiary any amount to which he is
entitled under the Plan in one or more of the following methods:
(1) One lump-sum payment;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual installments. The period over which such
payment is to be made shall not extend beyond the earlier of the
Participant's life expectancy (or the life expectancy of the
Participant and his designated Beneficiary) or the limited
distribution period provided for in Section VII.6.(c).
With respect to benefits that accrue on or after the date on which
this amendment and restatement is approved by the Board of Directors of the
Employer, the Administrator shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is entitled under the
Plan in one lump-sum payment.
(c) Notwithstanding the above, the Administrator may, unless the
Participant elects (with the consent of the Participant's spouse) in
writing a longer distribution period, distribute to a Participant or his
Beneficiary Company Stock in substantially equal monthly, quarterly,
semiannual, or annual installments over a period not longer than five (5)
years. In the case of a Participant with an account balance in the Plan in
excess of $500,000, the five (5) year period shall be extended one (1)
additional year (but not more than five (5) additional years) for each
$100,000 or fraction thereof by which such balance exceeds $500,000. The
dollar limits shall be adjusted at the same time and in the same manner as
provided in Code Section 415(d). Notwithstanding the above, the
Administrator may, unless Participant elects (with the consent of the
Participant's spouse) a later distribution date, commence distribution of
the Participant's Company Stock Account balance not later than one year
after the close of the Plan Year (i) in which the Participant separates
from service on account of Retirement, Total and Permanent Disability or
death, or (ii) which is the fifth Plan Year following the Plan Year in
which the Participant otherwise separates from service; provided, however,
any Company Stock allocated to a Participant's Company Stock Account
purchased by means of an Exempt Loan, may not be distributed until after
such Exempt Loan is repaid in full.
(d) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, $3,500 at the time of any prior distribution
shall require such Participant's consent if such distribution commences
prior to the later of his Normal Retirement Age or age 62. With regard to
this required consent:
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent, it
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shall be deemed an election to defer the commencement of payment of
any benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required under
Section VII.6.(h).
(2) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
first day on which all events have occurred which entitle the
Participant to such benefit.
(3) Written consent of the Participant to the distribution must
not be made before the Participant receives the notice and must not be
made more than 90 days before the first day on which all events have
occurred which entitle the Participant to such benefit.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to the
distribution.
If the value of a Participant's benefit does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution, the
Administrator may direct the Trustee to cause the entire benefit to be paid
to such Participant without regard to Participant's election or the consent
of the spouse.
(e) Notwithstanding anything herein to the contrary, cash dividends
on shares of Company Stock allocated to Participants' Accounts may be paid
to Participants or their Beneficiaries, as determined in the sole
discretion of the Administrator, within 90 days after the close of the Plan
Year in which the dividend is paid.
(f) Except as limited by Sections VII.6 and VII.7, whenever the
Trustee is to make a distribution or to commence a series of payments on or
before an Anniversary Date, the distribution or series of payments may be
made or begun on such date or as soon thereafter as is practicable, but in
no event later than 180 days after the Anniversary Date. Except, however,
unless a Former Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the 60th
day after the close of the Plan Year in which the latest of the following
events occurs:
(1) the date on which the Participant attains the Normal
Retirement Age specified herein,
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or
(3) the date the Participant terminates his service with the
Employer.
(g) Any part of a Participant's benefit which is retained in the
Plan after the Anniversary Date on which his participation ends will
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continue to be treated as a Company Stock Account or as an Other
Investments Account as provided in Article IV However, neither account will
be credited with any further Employer Contributions or Forfeitures.
(h) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits shall be made in accordance with
the following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder (including Regulation Section
1.401(a)(9)-2), the provisions of which are incorporated herein by
reference:
(1) A Participant's benefits shall be distributed to him not
later than April 1st of the calendar year following the later of (i)
the calendar year in which the Participant attains age 70 1/2 or (ii)
the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during the
five (5) Plan Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant who becomes a
"five (5) percent owner" during any subsequent Plan Year, clause (ii)
shall no longer apply and the required beginning date shall be the
April 1st of the calendar year following the calendar year in which
such subsequent Plan Year ends. Alternatively, distributions to a
Participant must begin no later than the applicable April 1st as
determined under the preceding sentence and must be made over a
period certain measured by the life expectancy of the Participant (or
the life expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations. Notwithstanding the
foregoing, clause (ii) above shall not apply to any Participant
unless the Participant had attained age 70 1/2 before January 1, 1988
and was not a "five (5) percent owner" at any time during the Plan
Year ending with or within the calendar year in which the Participant
attained age 66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
(i) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in accordance with
Regulations. The election, once made, shall be irrevocable. If no
election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI
of Regulation 1.72-9.
7.7 HOW PLAN BENEFITS WILL BE DISTRIBUTED
(a) Distribution of a Participant's benefit may be made in cash or
Company Stock or both, provided, however, that if a Participant or
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Beneficiary so demands, such benefit shall be distributed only in the form
of Company Stock. Prior to making a distribution of benefits, the
Administrator shall advise the Participant or his Beneficiary, in writing,
of the right to demand that benefits be distributed solely in Company
Stock. If the Participant or his Beneficiary fails to make such demand in
writing within 90 days after receipt of such written notice, the
Administrator shall direct the Trustee to make such distribution in such
form as the Administrator, in his sole discretion, shall determine.
Any distributions of cash hereunder shall be equal to Company Stock
held in the Participant's Company Stock Account on the Anniversary Date
subsequent to the event triggering a distribution, valued at the fair
market price per share of Company Stock as determined in accordance with
Article VI as of the Anniversary Date immediately prior to the
distribution. For purposes of this Section, an "event triggering a
distribution" shall include but not be limited to Retirement, death,
disability, termination of service and the election to commence receiving
benefits hereunder pursuant to Section VII.6.
(b) If a Participant or Beneficiary demands that benefits be
distributed solely in Company Stock, distribution of a Participant's
benefit will be made entirely in whole shares or other units of Company
Stock. Any balance in a Participant's Other Investments Account will be
applied to acquire for distribution the maximum number of whole shares or
other units of Company Stock at the then fair market value. Any fractional
unit value unexpended will be distributed in cash. If Company Stock is not
available for purchase by the Trustee, then the Trustee shall hold such
balance until Company Stock is acquired and then make such distribution,
subject to Section VII.6.
(c) The Trustee will make distribution from the Trust only on
instructions from the Administrator.
(d) Notwithstanding anything contained herein to the contrary, if the
Employer's charter or by-laws restrict ownership of substantially all
shares of Company Stock to Employees and the Trust Fund, as described in
Code Section 409(h)(2), the Administrator, in his sole discretion, may
distribute a Participant's Account entirely in cash without granting the
Participant the right to demand distribution in shares of Company Stock or
distribute entirely in Company Stock subject to a requirement that such
Company Stock may be resold to the Employer pursuant to Section VII.12.
(e) Except as otherwise provided herein, Company Stock distributed by
the Trustee may be restricted as to sale or transfer by the by-laws or
articles of incorporation of the Employer, provided restrictions are appli
cable to all Company Stock of the same class. If a Participant is required
to offer the sale of his Company Stock to the Employer before offering to
sell his Company Stock to a third party, in no event may the Employer pay a
price less than that offered to the distributee by another potential buyer
making a bona fide offer and in no event shall the Trustee pay a price less
than the fair market value of the Company Stock.
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(f) Except as otherwise provided in this Article, a Participant is
not entitled to any payment, withdrawal or distribution under the Plan
during his participation. If any such partial distribution is made, the
Participant's benefit when computed will be reduced by the amount of any
such advance.
(g) If Company Stock acquired with the proceeds of an Exempt Loan
(described in Section V.4 hereof) is available for distribution and
consists of more than one class, a Participant or his Beneficiary must
receive substantially the same proportion of each such class.
(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance
with the following requirements and shall otherwise comply with Code
Section 401(a)(9) and the Regulations thereunder. If it is determined,
pursuant to Regulations, that the distribution of a Participant's interest
has begun and the Participant dies before his entire interest has been
distributed to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of distribution
selected pursuant to Section VII.6 as of his date of death. If a
Participant dies before he has begun to receive any distributions of his
interest under the Plan or before distributions are deemed to have begun
pursuant to Regulations, then his death benefit shall be distributed to his
Beneficiaries by December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
However, in the event that the Participant's spouse (determined as of
the date of the Participant's death) is his Beneficiary, then in lieu of
the preceding rules, distributions must be made over a period not extending
beyond the life expectancy of the spouse and must commence on or before the
later of: December 31st of the calendar year immediately following the
calendar year in which the Participant died; or December 31st of the
calendar year in which the Participant would have attained 70 1/2. If the
surviving spouse dies before distributions to such spouse begin, then the
5-year distribution requirement of this section shall apply as if the
spouse was the Participant.
(i) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in accordance with
Regulations. The election, once made, shall be irrevocable. If no
election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI
of Regulation 1.72-9.
7.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors act, if such
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is permitted by the laws of the state in which said Beneficiary resides. Such a
payment to the legal guardian, custodian or parent of a minor Beneficiary shall
fully discharge the Trustee, Employer, and Plan from further liability on
account thereof.
7.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the expiration of five (5)
years after it shall become payable, remain unpaid solely by reason of the
inability of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further diligent effort,
to ascertain the whereabouts of such Participant or his Beneficiary, the amount
so distributable shall be treated as a Forfeiture pursuant to the Plan. In the
event a Participant or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored.
7.10 RIGHT OF FIRST REFUSAL
(a) If any Participant, his Beneficiary or any other person to whom
shares of Company Stock are distributed from the Plan (the "Selling
Participant") shall, at any time, desire to sell some or all of such shares
(the "Offered Shares") to a third party (the "Third Party"), the Selling
Participant shall give written notice of such desire to the Administrator
and the Employer, which notice shall contain the number of shares offered
for sale, the proposed terms of the sale and the names and addresses of
both the Selling Participant and Third Party. Both the Trust Fund and the
Employer shall each have the right of first refusal for a period of
fourteen (14) days from the date the Selling Participant gives such written
notice to the Employer and the Administrator (such fourteen (14) day period
to run concurrently against the Trust Fund and the Employer) to acquire the
Offered Shares. As between the Trust Fund and the Employer, the Trust Fund
shall have priority to acquire the shares pursuant to the right of first
refusal. The selling price and terms shall be the same as offered by the
Third Party.
(b) If the Trust Fund and the Employer do not exercise their right of
first refusal within the required fourteen (14) day period provided above,
the Selling Participant shall have the right, at any time following the
expiration of such fourteen (14) day period, to dispose of the Offered
Shares to the third Party' provided, however, that (i) no disposition shall
be made to the Third Party on terms more favorable to the Third Party than
those set forth in the written notice delivered by the Selling Participant
above, and (ii) if such disposition shall not be made to a third party on
the terms offered to the Employer and the Trust Fund, the offered Shares
shall again be subject to the right of first refusal set forth above.
(c) The closing pursuant to the exercise of the right of first
refusal under Section VII.10.(a) above shall take place at such place
agreed upon between the Administrator and the Selling Participant, but not
later than ten (10) days after the Employer or the Trust Fund shall have
notified the Selling Participant of the exercise of the right of first
refusal. At such closing, the Selling Participant shall deliver
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certificates representing the Offered Shares duly endorsed in blank for
transfer, or with stock powers attached duly executed in blank with all
required transfer tax stamps attached or provided for, and the Employer or
the Trust Fund shall deliver the purchase price, or an appropriate portion
thereof, to the Selling Participant.
(d) Except as provided in this Paragraph (d), no Company Stock
acquired with the proceeds of an Exempt Loan complying with the
requirements of Section V.4 hereof shall be subject to a right of first
refusal. Company Stock, which is acquired with the proceeds of an Exempt
Loan which is distributed to a Participant or Beneficiary shall be subject
to the right of first refusal, provided for in Paragraph (a) of this
Section only so long as the Company Stock is not publicly traded. The term
"publicly traded" refers to a securities exchange registered under section
6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) or that is quoted
on a system sponsored by a national securities association registered under
Section 15A(b) of the Securities Exchange Act (15 U.S.C. 780). In
addition, in the case of Company Stock which was acquired with the proceeds
of a loan described in Section V.4, the selling price and other terms under
the right must not be less favorable to the seller than the greater of the
value of the security determined under Regulation 54.4975-11(d)(5), or the
purchase price and other terms offered by a buyer (other than the Employer
or the Trust Fund), making a good faith offer to purchase the security. The
right of first refusal must lapse no later than fourteen (14) days after
the security holder gives notice to the holder of the right that an offer
by a third party to purchase the security has been made. The right of first
refusal shall comply with the provisions of Paragraphs (a), (b) and (c) of
this Section, except to the extent those provisions may conflict with the
provisions of this paragraph.
7.11 STOCK CERTIFICATE LEGEND
Certificates for shares distributed pursuant to the Plan shall contain the
following legend:
"The shares represented by this certificate are transferable only upon
compliance with the terms of the MAIL-WELL CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST originally effective as of February 23, 1994,
a copy of said Plan being on file in the office of the Company."
7.12 PUT OPTION
(a) If Company Stock which was not acquired with the proceeds of an
Exempt Loan is distributed to a Participant and such Company Stock is not
readily tradeable on an established securities market, a Participant has a
right to require the Employer to repurchase the Company Stock distributed
to such Participant under a fair valuation formula. Such Stock shall be
subject to the provisions of Section VII.12.(c).
(b) Company Stock which is acquired with the proceeds of an Exempt
Loan and which is not publicly traded when distributed, or if it is subject
to a trading limitation when distributed, must be subject to a put option.
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For purposes of this paragraph, a "trading limitation" on a Company Stock
is a restriction under any Federal or State securities law or any
regulation thereunder, or an agreement (not prohibited by Section VII.13)
affecting the Company Stock which would make the Company Stock not as
freely tradeable as stock not subject to such restriction.
(c) The put option must be exercisable only by a Participant, by the
Participant's donees, or by a person (including an estate or its
distributee) to whom the Company Stock passes by reason of a Participant's
death. (Under this paragraph Participant or Former Participant means a
Participant or Former Participant and the beneficiaries of the Participant
or Former Participant under the Plan.) The put option must permit a
Participant to put the Company Stock to the Employer. Under no
circumstances may the put option bind the Plan. However, it shall grant
the Plan an option to assume the rights and obligations of the Employer at
the time that the put option is exercised. If it is known at the time a
loan is made that Federal or state law will be violated by the Employer's
honoring such put option, the put option must permit the Company Stock to
be put, in a manner consistent with such law, to a third party (e.g., an
- -
affiliate of the Employer or a shareholder other than the Plan) that has
substantial net worth at the time the loan is made and whose net worth is
reasonably expected to remain substantial.
The put option shall commence as of the day following the date the
Company Stock is distributed to the former Participant and end 60 days
thereafter and if not exercised within such 60-day period, an additional
60-day option shall commence on the first day of the fifth month of the
Plan Year next following the date the stock was distributed to the Former
Participant (or such other 60-day period as provided in regulations
promulgated by the Secretary of the Treasury). However, in the case of
Company Stock that is publicly traded without restrictions when distributed
but ceases to be so traded within either of the 60-day periods described
herein after distribution, the Employer must notify each holder of such
Company Stock in writing on or before the tenth day after the date the
Company Stock ceases to be so traded that for the remainder of the
applicable 60-day period the Company Stock is subject to the put option.
The number of days between the tenth day and the date on which notice is
actually given, if later than the tenth day, must be added to the duration
of the put option. The notice must inform distributees of the terms of the
put options that they are to hold. The terms must satisfy the requirements
of this paragraph.
The put option is exercised by the holder notifying the Employer in
writing that the put option is being exercised; the notice shall state the
name and address of the holder and the number of shares to be sold. The
period during which a put option is exercisable does not include any time
when a distributee is unable to exercise it because the party bound by the
put option is prohibited from honoring it by applicable Federal or state
law. The price at which a put option must be exercisable is the value of
the Company Stock determined in accordance with Section VI.2. Payment under
the put option involving a "Total Distribution" shall be paid in
substantially equal monthly, quarterly, semiannual or annual installments
over a period certain beginning not later than thirty (30) days after the
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exercise of the put option and not extending beyond (5) years. The
deferral of payment is reasonable if adequate security and a reasonable
interest rate on the unpaid amounts are provided. The amount to be paid
under the put option involving installment distributions must be paid not
later than thirty (30) days after the exercise of the put option. Payment
under a put option must not be restricted by the provisions of a loan or
any other arrangement, including the terms of the employer's articles of
incorporation, unless so required by applicable state law.
For purposes of this Section, "Total Distribution" means a
distribution to a Participant or Former Participant within one taxable year
of the entire Vested Participant's Account.
(d) An arrangement involving the Plan that creates a put option must
not provide for the issuance of put options other than as provided under
this Section. The Plan (and the Trust Fund) must not otherwise obligate
itself to acquire Company Stock from a particular holder thereof at an
indefinite time determined upon the happening of an event such as the death
of the holder.
7.13 NONTERMINABLE PROTECTIONS AND RIGHTS
No Company Stock, except as provided in Section VII.10.(d) and Section
VII.12.(b), acquired with the proceeds of a loan described in Section V.4 hereof
may be subject to a put, call, or other option, or buy-sell or similar
arrangement when held by and when distributed from the Trust Fund, whether or
not the Plan is then an ESOP. The protections and rights granted in this Section
are nonterminable, and such protections and rights shall continue to exist under
the terms of this Plan so long as any Company Stock acquired with the proceeds
of a loan described in Section V.4 hereof is held by the Trust Fund or by a
Participant or other person for whose benefit such protections and rights have
been created, and neither the repayment of such loan nor the failure of the Plan
to be an ESOP, nor an amendment of the Plan shall cause a termination of said
protections and rights.
7.14 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant in
this plan shall be subject to the rights afforded to any "alternate payee" under
a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
separated from service and has not reached the "earliest retirement age" under
the Plan. For purposes of this Section, "alternate payee," "qualified domestic
relations order" and "earliest retirement age" shall have the meaning set forth
under Code Section 414(p).
7.15 PAYMENT OF DISTRIBUTION DIRECTLY TO ELIGIBLE RETIREMENT PLAN
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an Eligible Rollover Distribution
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paid directly to an Eligible Retirement Plan specified by the Distributee
in a Direct Rollover.
(b) For purposes of this Section the following definitions shall
apply:
(1) "Eligible Rollover Distribution": An Eligible Rollover
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) "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.
(3) "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.
(4) "Direct Rollover": A Direct Rollover is a payment by the
Plan to the Eligible Retirement Plan specified by the Distributee.
ARTICLE 8.
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) With respect to Company Stock, the Company Stock Account, or an
Exempt Loan, except as directed solely by the Administrator,
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(1) the Trustee shall not sell, acquire or dispose of Company
Stock or
(2) enter into any Exempt Loan.
Upon direction of the Administrator, up to one hundred percent (100%)
of the Trust Fund may be invested in Company Stock.
(b) With respect to the Other Investments Account and Directed
Investment Account, the Trustee shall invest such Participant's Accounts as
directed by the Administrator.
(c) At the direction of the Administrator, the Trustee shall pay
benefits required under the Plan to be paid to Participants, or, in the
event of their death, to their Beneficiaries.
(d) The Trustee shall maintain records of receipts and disburse
ments, and furnish to the Employer and/or Administrator for each Plan Year
a written annual report according to Section 3.2 of the Trust Agreement.
(e) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign
papers on their behalf.
8.2 VOTING COMPANY STOCK
The Trustee shall vote all Company Stock held by it as part of the Plan
assets at such time and in such manner as the Administrator shall direct.
Provided, however, that if any agreement entered into by the Trustee, upon the
direction of the Administrator, provides for voting of any shares of Company
Stock pledged as security for any obligation of the Plan, then such shares of
Company Stock shall be voted in accordance with such agreement. If the
Administrator fails or refuses to give the Trustee timely instructions as to how
to vote any Company Stock held by the Trustee and which the Administrator
otherwise has the right to vote, the Trustee shall not vote such Company Stock
and shall consider the Administrator's failure or refusal to give timely
instructions as an exercise of the Administrator's rights and a directive to the
Trustee not to vote said Company Stock. The Trustee shall not vote Company
Stock when a Participant or Beneficiary, pursuant to this Section, fails to
exercise a right to vote Company Stock.
Notwithstanding the foregoing, if the Employer has a registration-type
class of securities, each Participant or Beneficiary shall be entitled, in lieu
of the Administrator, to direct the Trustee as to the manner in which the
Company Stock allocated to the Company Stock Account of such Participant or
Beneficiary is to be voted. If the Employer does not have a registration-type
class of securities, each Participant or Beneficiary in the Plan shall be
entitled, in lieu of the Administrator, to direct the Trustee as to the manner
in which voting rights on shares of Company Stock which are allocated to the
Company Stock Account of such Participant or Beneficiary are to be exercised
with respect to any corporate matter which involves the voting of such shares
with respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all
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assets of a trade or business, or such similar transaction as prescribed in
Regulations. For purposes of this Section the term "registration-type class of
securities" means (A) a class of securities required to be registered under
Section 12 of the Securities Exchange Act of 1934; and (B) a class of securities
which would be required to be so registered except for the exemption from
registration provided in subsection (g)(2)(H) of such Section 12.
The Trustee shall notify each Participant or Beneficiary of each tender or
exchange offer and utilize its best efforts to distribute or cause to be
distributed to such Participant or Beneficiary in a timely manner all
information received by the Trustee as a recordholder of shares of Company Stock
in connection with any such tender or exchange offer. Each Participant or
Beneficiary shall have the right from time to time with respect to the shares of
Company stock allocated to his account, to instruct the Trustee in writing as to
the manner in which to respond to any tender or exchange offer which shall be
pending or which may be made in the future for all shares of Company Stock or
any portion thereof. A Participant's or Beneficiary's instructions shall remain
in force until superseded in writing by the Participant or Beneficiary. The
Trustee shall tender or exchange such shares of Company Stock as and to the
extent so instructed. Unless and until shares of Company Stock are tendered or
exchanged, the individual instructions received by the Trustee from Participant
or Beneficiaries shall be held in strict confidence by the Trustee and shall not
be divulged or released to any person, including, but not limited to officers or
Employees of the Employer, or of any other Participating Employer; provided,
however, that the Trustee shall advise the Employer, at any time upon request,
of the total number of shares not subject to instructions to tender or exchange.
The Trustee shall not make recommendations to Participants or Beneficiaries on
whether to instruct the Trustee to tender or exchange.
The Trustee shall not vote, sell, convey or transfer any allocated shares
of Company Stock for which no directions are timely received from Participants
or Beneficiaries pursuant to the immediately preceding paragraph, and shares of
Company Stock held by the Trustee which are not allocated to Participants'
Company Stock Accounts shall be voted by the Trustee only in the manner directed
by the Administrator.
ARTICLE 9.
AMENDMENT, TERMINATIONS, AND MERGERS
9.1 AMENDMENT
The Employer shall have the right at any time to amend the Plan. However,
no such amendment shall authorize or permit any part of the Trust Fund (other
than such part as is required to pay taxes and administration expenses) to be
used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; no such amendment shall cause
any reduction in the amount credited to the account of any Participant or cause
or permit any portion of the Trust Fund to revert to or become the property of
the Employer; and no such amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may be made without the
Trustee's and Administrator's written consent. The Trustee shall not be
required to execute any such amendment unless the Trust provisions contained
herein are
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as part of the Plan and the amendment affects the duties of the
Trustee hereunder.
In addition, no such amendment shall have the effect of terminating the
protections and rights set forth in Section VII.13, unless such termination
shall then be permitted under the applicable provisions of the Code and
Regulations; such a termination is currently expressly prohibited by Regulation
54.4975-11(a)(3)(ii).
For the purposes of this Section, a Plan amendment which has the effect of
(1) eliminating or reducing an early retirement benefit or a retirement-type
subsidy, (2) eliminating an optional form of benefit (as provided in
Regulations) or (3) restricting, directly or indirectly, the benefit provided to
any Participant prior to the amendment shall be treated as reducing the amount
credited to the account of a Participant except that an amendment described in
clause (2) above (other than an amendment having an effect described in clause
(1) above) shall not be treated as reducing the amount credited to the account
of a Participant to the extent so provided in Regulations. Any Plan amendment
which modifies distribution options in a nondiscriminatory manner shall not be
treated as reducing the amount credited to the account of a Participant.
9.2 TERMINATION
The Employer shall have the right at any time to terminate the Plan by
delivering to the Trustee and Administrator written notice of such termination.
A complete discontinuance of the Employer Contributions to the Plan shall be
deemed to constitute a termination. Upon any termination (full or partial) or
complete discontinuance of contributions, all amounts credited to the affected
Participants' Accounts shall become 100% Vested and shall not thereafter be
subject to forfeiture and all unallocated amounts shall be allocated to the
accounts of all Participants in accordance with the provisions hereof. Upon
such termination of the Plan, the Employer, by written notice to the Trustee and
Administrator, may direct either:
(a) complete distribution of the assets in the Trust Fund to the
Participants, in cash or in kind, in a manner consistent with the
requirements of Sections VII.6 and VII.7; or
(b) continuation of the Trust created by this agreement and the
distribution of benefits at such time and in such manner as though the Plan
had not been terminated.
9.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities maybe transferred to any other Plan and Trust only if the benefits
which would be received by a Participant of this Plan, in the event of a
termination of the Plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation.
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ARTICLE 10.
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer
and any participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, 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 be 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.
(b) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator under the provisions
of the Retirement Equity Act of 1984. The Administrator shall establish a
written procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders.
Further, to the extent provided under a "qualified domestic relations
order", a Former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
10.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act and the laws
of the State of Delaware, other than its laws respecting choice of law, to the
extent not preempted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
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<PAGE>
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power or revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any trust fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants,
Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive contribution
under a mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the
Employer may demand repayment of such excessive contribution at any time
within one (1) year following the time of payment and the Trustees shall
return such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the excess contributions may not be
returned to the Employer but any losses attributable thereto must reduce
the amount so returned.
10.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predeces sors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Section 412(a)(2) of the Act), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
10.8 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
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either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
10.9 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
10.10 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are the Employer and the
Administrator. The named Fiduciaries shall have only those specific powers,
duties, responsibilities, and obligations as are specifically given them under
the Plan. In general, the Employer shall have the sole responsibility for making
the contributions provided for under Section IV.1; and shall have the sole
authority to appoint and remove the Trustee and the Administrator; to formulate
the Plan's "funding policy and method"; and to amend or terminate, in whole or
in part, the Plan. The Administrator shall have the sole responsibility for the
administration of the Plan, which responsibility is specifically described in
the Plan, including the acquisition, holding and/or disposition of Company Stock
and the entering into any Exempt Loans. The Administrator shall also have the
sole responsibility of management of the assets of the Other Investments Account
and Directed Investment Account held under the Trust, except those assets in
such accounts, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan.
10.11 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.12 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, contributions to
this Plan are conditioned upon the initial qualification of the Plan under
Code Section 401. If the Plan receives an adverse determination with
respect to its initial qualification, then the Plan may return such
contributions to the Employer within one year after such determination,
provided the application for the determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in
which the Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except Sections
III.6 and IV.3.(d), any contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by the Employer
under the Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the
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disallowance of the deduction, demand repayment of such disallowed
contribution and the trustee shall return such contribution within one (1)
year following the disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of the Plan
attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount so
returned.
10.13 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
10.14 SECURITIES AND EXCHANGE COMMISSION APPROVAL
The Company may request an interpretative letter from the Securities and
Exchange Commission stating that the transfer of Company Stock contemplated
hereunder does not involve transactions requiring a registration of such Company
Stock under the Securities Act of 1933. In the event that a favorable
interpretative letter is not obtained, the Employer reserves the right to amend
the Plan and Trust retroactively to their Effective Dates in order to obtain a
favorable interpretative letter or to terminate the Plan.
10.15 INDEMNIFICATION
Neither the Employer, any of its officers or directors, nor the
Administrator shall be personally liable for any action or inaction with respect
to any duty or responsibility imposed upon such person by the terms of the Plan,
unless such action or inaction is judicially determined to be a breach of that
person's fiduciary responsibility with respect to the Plan under any applicable
law. The Employer may indemnify or purchase insurance to underwrite indemnity
for the Administrator and/or the Employer's board of directors against any
personal liability or expense except for their own gross negligence.
10.16 CONTROLLING LAW
All legal questions pertaining to the Plan, all construction and all
Regulations shall be determined in accordance with the laws of the State of
Delaware and the United States. All contributions shall be deemed to have been
made under such laws. Notwithstanding anything in this Agreement to the
contrary, the effective dates provided for herein for the application of any
Code Section to this Plan shall be extended in accordance with any act of
Congress or any effective Regulation, Ruling or other measure of like import.
ARTICLE 11.
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any other corporation or entity, whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions hereof, and
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participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(b) The Trustee, unless directed otherwise by the Administrator, shall
commingle and hold as one Trust Fund all contributions made by
Participating Employers.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under
the Plan, and all amounts credited to such Participant's Account as well as
his accumulated service time with the transferor or predecessor, and his
length of participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of employment shall
inure only to the benefit of the Employee-Participants of the Partici
pating Employer by which the forfeiting Participant was employed, except if
the Forfeiture is for an Employee whose Employer is a member of an
affiliated or controlled group, then said Forfeiture shall be allocated,
based on Compensation to all Participant Accounts of Participating
Employers who are members of the affiliated or controlled group. Should an
Employee of one ("First") Employer be transferred to an associated
("Second") Employer (the Employer, an affiliate or subsidiary), such
transfer shall not cause his Account balance (generated while an Employee
of "First" Employer) in any manner or by any amount to be forfeited. Such
Employee's Participant Account balance for all purposes of the Plan,
including length of service, shall be considered as though he had always
been employed by the "Second" Employer and as such had received
contributions, forfeitures, earnings of losses, and appreciation or
depreciation in value of assets totaling amount so transferred.
(e) Any expenses of the Trust which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the
credit of all Participants.
11.3 DESIGNATION OF AGENT
Each Participating 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 Administrator for the purpose of this Plan, each Participating 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 Participating Employer as related to
its adoption of the Plan.
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11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
Any contribution or Forfeiture subject to allocation during each Plan Year
shall be allocated among all Participants of all Participating Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer.
The Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each and
every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
11.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or revoke its
participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Trust Fund assets allocable to the Participants of
such Participating Employer or to such new Trustee as shall have been designated
by such Participating Employer, in the event that it has established a separate
pension plan for its Employees. If no successor is designated, the Trustee shall
retain such assets for the Employees of said Participating Employer pursuant to
the provisions of Article VII hereof. In no such event shall any part of the
corpus or income of the Trust as it relates to such Participating Employer be
used for or diverted for purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary rules
or regulations, binding upon all Participating Employers and all Participants,
to effectuate the purpose of this Article.
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11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from making
a contribution to the Trust Fund which it would otherwise have made under the
Plan by reason of having no current or accumulated earnings or profits, or
because such earnings or profits are less than the contribution which it would
otherwise have made, then, pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented from making may
be made, for the benefit of the participating employees of such Participating
Employer, by the other Participating Employers who are members of the same
affiliated group within the meaning of Code Section 1504 to the extent of their
current or accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the proportion of its
total current and accumulated earnings or profits remaining after adjustment for
its contribution to the Plan made without regard to this paragraph which the
total prevented contribution bears to the total current and accumulated earnings
or profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not reimburse the contributing Participating
Employers.
This Agreement may be executed in two or more counterparts which together
shall constitute a single agreement.
ARTICLE 12.
TOP-HEAVY STATUS
12.1 ARTICLE CONTROLS
Any Plan provisions to the contrary notwithstanding, the provisions of this
Article shall control to the extent required to cause the Plan to comply with
the requirements imposed under Code Section 416.
12.2 DEFINITIONS
For purposes of this Article, the following terms and phrases shall have
these respective meanings:
(a) Account Balance: As of any Valuation Date, the aggregate amount
---------------
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Employer or an Affiliated Employer
(excluding employee contributions which were deductible within the meaning
of section 219 of the Code and rollover or transfer contributions made
after December 31, 1983 by or on behalf of such individual to such plan
from another qualified plan sponsored by an entity other than the Employer
or an Affiliated Employer), increased by (1) the aggregate distributions
made to such individual from such plan during a five-year period ending on
the Determination Date and (2) the amount of any contributions due as of
the Determination Date immediately following such Valuation Date.
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(b) Accrued Benefit: As of any Valuation Date, the present value
---------------
(computed on the basis of the Assumptions) of the cumulative accrued
benefit (excluding the portion thereof which is attributable to employee
contributions which were deductible pursuant to section 219 of the Code, to
rollover or transfer contributions made after December 31, 1983 by or on
behalf of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or an Affiliated Employer,
to proportional subsidies or to ancillary benefits) of an individual under
a qualified defined benefit plan maintained by the Employer or an
Affiliated Employer increased by (1) the aggregate distributions made to
such individual from such plan during a five-year period ending on the
Determination Date and (2) the estimated benefit accrued by such individual
between such Valuation Date and the Determination Date immediately
following such Valuation Date. Solely for the purpose of determining top-
heavy status, the Accrued Benefit of an individual shall be determined
under (1) the method, if any, that uniformly applies for accrual purposes
under all qualified defined benefit plans maintained by the Employer or an
Affiliated Employer, or (2) if there is no such method, as if such benefit
accrued not more rapidly than under the slowest accrual rate permitted
under section 411(b)(1)(C) of the Code.
(c) Aggregation Group: The group of qualified plans maintained by
-----------------
the Employer and each Affiliated Employer consisting of (1) each plan in
which a Key Employee participates and each other plan which enables a plan
in which a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, or (2) each plan in which a Key Employee
participates, each other plan which enables a plan in which a Key Employee
participates to meet the requirements of Code Sections 401(a)(4) or 410 and
any other plan which the Employer elects to include as a part of such
group; provided, however, that the Employer may not elect to include a plan
in such group if its inclusion would cause the group to fail to meet the
requirements of Code Sections 401(a)(4) or 410.
(d) Assumptions: The interest rate and mortality assumptions
-----------
specified for top-heavy status determination purposes in any defined
benefit plan included in the Aggregation Group including the Plan.
(e) Determination Date: For the first Plan Year of any plan, the
------------------
last day of such Plan Year and for each subsequent Plan Year of such plan,
the last day of the preceding Plan Year.
(f) Key Employee: A "key employee" as defined in section 416(i) of
------------
the Code and the Treasury Regulations thereunder.
(g) Plan Year: With respect to any plan, the annual accounting
---------
period used by such plan for annual reporting purposes.
(h) Remuneration: Compensation within the meaning of section
------------
415(c)(3) of the Code, as limited by section 401(a)(17) of the Code for
Plan Years beginning after December 31, 1988.
(i) Valuation Date: With respect to any Plan Year of any defined
--------------
contribution plan, the most recent date within the twelve-month period
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ending on a Determination Date as of which the trust fund established under
such plan was valued and the net income (or loss) thereof allocated to
participants' accounts. With respect to any Plan Year of any defined
benefit plan, the most recent date within a twelve-month period ending on a
Determination Date as of which the plan assets were valued for purposes of
computing plan costs for purposes of the requirements imposed under section
412 of the Code.
12.3 TOP-HEAVY STATUS
(a) The Plan shall be deemed to be top-heavy for a Plan Year, if, as
of the Determination Date for such Plan Year, (1) the sum of Account
Balances of Participants who are Key Employees exceeds 60% of the sum of
Account Balances of all Participants unless an Aggregation Group including
the Plan is not top-heavy or (2) an Aggregation Group including the Plan is
top-heavy. An Aggregation Group shall be deemed to be top-heavy as of a
Determination Date if the sum (computed in accordance with section
416(g)(2)(B) of the Code and the Treasury Regulations promulgated
thereunder) of (1) the Account Balances of Key Employees under all defined
contribution plans included in the Aggregation Group and (2) the Accrued
Benefits of Key Employees under all defined benefit plans included in the
Aggregation Group exceeds 60% of the sum of the Account Balances and the
Accrued Benefits of all individuals under such plans. Notwithstanding the
foregoing, the Account Balances and Accrued Benefits of individuals who are
not Key Employees in any Plan Year but who were Key Employees in any prior
Plan Year shall not be considered in determining the top-heavy status of
the Plan for such Plan Year. Further, notwithstanding the foregoing, the
Account Balances and Accrued Benefits of individuals who have not performed
services for the Employer at any time during the five-year period ending on
the applicable Determination Date shall not be considered.
12.4 TERMINATION OF TOP-HEAVY STATUS
If the Plan has been deemed to be top-heavy for one or more Plan Years and
thereafter ceases to be top-heavy, the provisions of this Article shall cease to
apply to the Plan effective as of the Determination Date on which it is
determined to no longer be top-heavy.
12.5 EFFECT OF ARTICLE
Notwithstanding anything contained herein to the contrary, the provisions
of this Article shall automatically become inoperative and of no effect to the
extent not required by the Code or the Act.
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IN WITNESS WHEREOF, this Plan has been executed this ______ day of
_________________, 1995 effective as of the day and year first above written.
"EMPLOYER"
MAIL-WELL CORPORATION
By: __________________________________
Name:
__________________________________
Title:
__________________________________
ATTEST:______________________
EXECUTION PAGE TO THE
MAIL-WELL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
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<PAGE>
FIRST AMENDMENT TO THE MAIL-WELL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
Amended and Restated, Effective January 1, 1995
W I T N E S S E T H:
-------------------
WHEREAS, Mail-Well I Corporation (the "Employer") maintains the Mail-Well
Corporation Employee Stock Ownership Plan (the "Plan"); and
WHEREAS, the Employer, pursuant to Section 9.1 of the Plan, has the right
to amend the Plan from time to time subject to certain limitations.
NOW, THEREFORE, in order to make various revisions desired by the Employer,
some of which are to conform the language of the Plan to the intent of the
Employer at the time the Plan was implemented and to the manner in which the
Plan has been administered since its inception, the Plan is hereby amended in
the following manner:
a. In accordance with the change in the Employer's name from Mail-Well
Corporation to Mail-Well I Corporation, the Plan is renamed the Mail-Well I
Corporation Employee Stock Ownership Plan, and any and all references in
the Plan to "Mail-Well Corporation" or "Employer" are references to Mail-
Well I Corporation.
b. Effective as of the date this Amendment is executed, Section 1.11 is hereby
amended in its entirety to read as follows:
1.11 "Compensation" with respect to any Participant means such
------------
Participant's "415 Compensation" paid during a Plan Year. The amount of
Compensation with respect to any Participant shall include Compensation for
the entire twelve month period ending on the last day of such Plan Year,
except that Compensation shall be recognized only for that portion of the
Plan Year during which an Employee was a Participant in the Plan. Amounts
contributed pursuant to a salary reduction agreement that are not
includable in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h), 403(b) or 457, and Employee contributions described in
Code Section 414(h)(2) that are treated as Employer contributions shall
also be considered as Compensation. Compensation shall not include tuition
assistance, special awards or any amounts received or to be received under
the Mail-Well Corporation Profit Sharing Plan. With respect to an Employee
who is a sales representative, Compensation shall mean 100% of such
Employee's prior year earnings (including only draw and commissions).
Notwithstanding the foregoing, with respect to an Employee who is a sales
representative and who becomes a Participant on July 1 of a Plan Year,
Compensation shall mean six-twelfths (6/12) of 100% of such Employee's
prior year earnings (including only draw and commissions).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not
exceed the "OBRA '93 Annual Compensation Limit." The "OBRA '93 Annual
Compensation Limit" is $150,000, as adjusted for increases in the cost of
living in accordance with Code Section 401(a)(17)(B). 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 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.
Any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean the "OBRA '93 Annual Compensation Limit" set forth in
this Section.
If Compensation for any prior Determination Period is taken into
account in determining a Participant'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.
<PAGE>
c. Effective as of the date this Amendment is executed, Section 4.3(h) is
hereby amended in its entirety to read as follows:
(h) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of Former
Participants, if any. The remaining Forfeitures, if any, shall be
allocated among the Participants' Accounts in the same proportion that
each such Participant's Compensation for the year bears to the total
Compensation of all Participants for the year. In the event the
allocation of Forfeitures provided herein shall cause the "annual
addition" (as defined in Section 4.4) to any Participant's Account to
exceed the amount allowable by the Code, the excess shall be
reallocated in accordance with Section 4.5. However, a Participant
who performs less than a Year of Service during any Plan Year or is
not an Employee on the last day of the Plan Year shall not share in
the Plan Forfeitures for that year, unless required pursuant to
Section 4.3(i).
d. Effective as of the date this Amendment is executed, Section 7.7(a) is
hereby amended in its entirety to read as follows:
(a) Distribution of a Participant's benefit may be made in cash
or Company Stock or both, provided, however, that if a Participant or
Beneficiary so demands, such benefit shall be distributed only in the
form of Company Stock. Prior to making a distribution of benefits,
the Administrator shall advise the Participant or his Beneficiary, in
writing, of the right to demand that benefits be distributed solely in
Company Stock. If the Participant or his Beneficiary fails to make
such demand in writing within 90 days after receipt of such written
notice, the Administrator shall direct the Trustee to make such
distribution in such form as the Administrator, in his sole
discretion, shall determine.
Any distributions of cash hereunder shall be equal to Company
Stock held in the Participant's Company Stock Account on the
Anniversary Date subsequent to the event triggering a distribution,
valued at the fair market price per share of Company Stock as
determined in accordance with Article 6. For purposes of this
Section, an "event triggering a distribution" shall include but not be
limited to Retirement, death, disability, termination of service and
the election to commence receiving benefits hereunder pursuant to
Section 7.6.
e. Effective as of the date this Amendment is executed, Section 9.1 is hereby
amended in its entirety to read as follows:
9.1 AMENDMENT
The Employer shall have the right at any time to amend the Plan.
However, no such amendment shall authorize or permit any part of the Trust
Fund (other than such part as is required to pay taxes and administration
expenses) to be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries or estates;
and no such amendment shall cause any reduction in the amount credited to
the account of any Participant or cause or permit any portion of the Trust
Fund to revert to or become the property of the Employer. The Trustee
shall not be required to execute any such amendment unless the Trust
provisions contained herein are as part of the Plan and the amendment
affects the duties of the Trustee hereunder.
In addition, no such amendment shall have the effect of terminating
the protections and rights set forth in Section 7.13, unless such
termination shall then be permitted under the applicable provisions of the
Code and Regulations; such a termination is currently expressly prohibited
by Regulation 54.4975-11(a)(3)(ii).
For the purposes of this Section, a Plan amendment which has the
effect of (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy, (2) eliminating an optional form of benefit (as
provided in Regulations) or (3) restricting, directly or indirectly, the
benefit provided to any Participant prior to the amendment shall be treated
as reducing the amount credited to the account of a Participant except that
an amendment described in clause (2) above (other than an amendment having
an effect described in clause (1) above)
- 2 -
<PAGE>
shall not be treated as reducing the amount credited to the account
of a Participant to the extent so provided in Regulations. Any Plan
amendment which modifies distribution options in a nondiscriminatory manner
shall not be treated as reducing the amount credited to the account of a
Participant.
f. Effective as of the date this Amendment is executed, Section 11.1 is hereby
amended in its entirety to read as follows:
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer, any other corporation or entity, whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions hereof,
and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such
Participating Employer.
g. Effective as of the date this Amendment is executed, Section 11.6 is hereby
amended in its entirety to read as follows:
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall not require the written action of
each and every Participating Employer. Amendment of this Plan shall be
made with the consent of the Trustee where such consent is necessary in
accordance with the terms of this Plan.
IN WITNESS WHEREOF, the Employer has executed this First Amendment to the
Mail-Well Corporation Employee Stock Ownership Plan on this ___________ day of
______________________________________, 1996.
MAIL-WELL I CORPORATION
By:
_______________________________
Name:
_______________________________
Title:
______________________________
CONSENTED TO:
BANK ONE, TEXAS, N.A.
Trustee
By: ___________________________
- 3 -
<PAGE>
EXHIBIT 4.3
MAIL-WELL CORPORATION 401(K) SAVINGS RETIREMENT PLAN
AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS........................................................ 1
ARTICLE 2 ADMINISTRATION....................................................... 9
2.1 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY............. 9
------------------------------------------------------
2.2 ALLOCATION AND DELEGATION OF RESPONSIBILITIES...................... 9
---------------------------------------------
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR............................. 10
--------------------------------------
2.4 RECORDS AND REPORTS................................................ 11
-------------------
2.5 AUDIT.............................................................. 11
-----
2.6 APPOINTMENT OF ADVISERS............................................ 11
-----------------------
2.7 INFORMATION FROM EMPLOYER.......................................... 11
-------------------------
2.8 PAYMENT OF EXPENSES................................................ 12
-------------------
2.9 ACTIONS BY ADMINISTRATOR........................................... 12
------------------------
2.10 CLAIMS PROCEDURE................................................... 12
----------------
2.11 CLAIMS REVIEW PROCEDURE............................................ 12
-----------------------
ARTICLE 3 ELIGIBILITY........................................................ 12
3.1 CONDITIONS AND EFFECTIVE DATE OF PARTICIPATION..................... 12
----------------------------------------------
3.2 EFFECT OF PARTICIPATION............................................ 13
-----------------------
3.3 DETERMINATION OF ELIGIBILITY....................................... 13
----------------------------
3.4 TERMINATION OF ELIGIBILITY......................................... 13
--------------------------
3.5 OMISSION OF ELIGIBLE EMPLOYEE...................................... 13
-----------------------------
3.6 INCLUSION OF INELIGIBLE EMPLOYEE................................... 13
--------------------------------
ARTICLE 4 CONTRIBUTION AND ALLOCATION........................................ 13
4.1 EMPLOYER CONTRIBUTION.............................................. 13
---------------------
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION............................ 14
---------------------------------------
4.3 TIME OF PAYMENT OF ELECTIVE CONTRIBUTIONS.......................... 15
-----------------------------------------
4.4 ALLOCATION OF CONTRIBUTIONS, EARNINGS AND FORFEITURES.............. 16
-----------------------------------------------------
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS................................... 18
--------------------------------
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS..................... 19
----------------------------------------------
4.7 MAXIMUM CONTRIBUTION PERCENTAGE.................................... 20
-------------------------------
4.8 ADJUSTMENT FOR EXCESSIVE CONTRIBUTION PERCENTAGE................... 22
------------------------------------------------
4.9 MAXIMUM ANNUAL ADDITIONS........................................... 23
------------------------
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.......................... 26
-----------------------------------------
4.11 TRANSFERS FROM QUALIFIED PLANS..................................... 26
------------------------------
4.12 TRANSFERS FROM OTHER PLANS......................................... 27
--------------------------
4.13 SUSPENSE ACCOUNT................................................... 27
----------------
ARTICLE 5 VALUATIONS......................................................... 27
5.1 VALUATION OF THE TRUST FUND........................................ 27
---------------------------
5.2 METHOD OF VALUATION................................................ 28
-------------------
ARTICLE 6 DETERMINATION AND DISTRIBUTION OF BENEFITS......................... 28
6.1 BENEFITS UPON RETIREMENT........................................... 28
------------------------
6.2 BENEFITS UPON DEATH................................................ 28
-------------------
6.3 BENEFITS UPON DISABILITY........................................... 29
------------------------
6.4 BENEFITS UPON TERMINATION.......................................... 29
-------------------------
6.5 DISTRIBUTION OF BENEFITS........................................... 30
------------------------
6.6 DISTRIBUTION OF BENEFITS UPON DEATH................................ 31
-----------------------------------
6.7 TIME OF SEGREGATION OR DISTRIBUTION................................ 32
-----------------------------------
6.8 DISTRIBUTION FOR MINOR BENEFICIARY................................. 32
----------------------------------
6.9 UNCLAIMED BENEFITS................................................. 32
------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
6.10 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS.......................... 32
-----------------------------------------
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP.................................. 33
---------------------------------
6.12 PAYMENT OF DISTRIBUTION DIRECTLY TO ELIGIBLE RETIREMENT PLAN....... 34
------------------------------------------------------------
ARTICLE 7 TRUSTEE............................................................ 34
7.1 TRUST AGREEMENT.................................................... 34
---------------
7.2 INVESTMENT FUNDS................................................... 34
----------------
7.3 BENEFITS PAID SOLELY FROM TRUST FUND............................... 35
------------------------------------
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS........................... 35
----------------------------------------
7.5 LOANS TO PARTICIPANTS.............................................. 35
---------------------
ARTICLE 8 AMENDMENT, TERMINATION, AND MERGERS................................ 37
8.1 AMENDMENT.......................................................... 37
---------
8.2 TERMINATION........................................................ 37
-----------
8.3 MERGER OR CONSOLIDATION............................................ 37
-----------------------
ARTICLE 9 MISCELLANEOUS...................................................... 38
9.1 PARTICIPANT'S RIGHTS............................................... 38
--------------------
9.2 ALIENATION......................................................... 38
----------
9.3 CONSTRUCTION OF PLAN............................................... 38
--------------------
9.4 GENDER AND NUMBER.................................................. 38
-----------------
9.5 LEGAL ACTION....................................................... 38
------------
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS............................. 39
--------------------------------------
9.7 BONDING............................................................ 39
-------
9.8 RECEIPT AND RELEASE FOR PAYMENTS................................... 39
--------------------------------
9.9 ACTION BY THE EMPLOYER............................................. 39
----------------------
9.10 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY................. 39
--------------------------------------------------
9.11 HEADINGS........................................................... 40
--------
9.12 APPROVAL BY INTERNAL REVENUE SERVICE............................... 40
------------------------------------
9.13 UNIFORMITY......................................................... 40
----------
ARTICLE 10 PARTICIPATING EMPLOYERS............................................ 40
10.1 ADOPTION BY OTHER EMPLOYERS........................................ 40
---------------------------
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS............................ 40
---------------------------------------
10.3 DESIGNATION OF AGENT............................................... 41
--------------------
10.4 EMPLOYEE TRANSFERS................................................. 41
------------------
10.5 PARTICIPATING EMPLOYERS CONTRIBUTION............................... 41
------------------------------------
10.6 AMENDMENT.......................................................... 41
---------
10.7 DISCONTINUANCE OF PARTICIPATION.................................... 41
-------------------------------
10.8 ADMINISTRATOR'S AUTHORITY.......................................... 42
-------------------------
ARTICLE 11 TOP-HEAVY STATUS................................................... 42
11.1 ARTICLE CONTROLS................................................... 42
----------------
11.2 DEFINITIONS........................................................ 42
-----------
11.3 TOP-HEAVY STATUS................................................... 43
----------------
11.4 TERMINATION OF TOP-HEAVY STATUS.................................... 43
-------------------------------
11.5 EFFECT OF ARTICLE.................................................. 43
-----------------
</TABLE>
<PAGE>
MAIL-WELL CORPORATION
401(K) SAVINGS RETIREMENT PLAN
AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 1995
W I T N E S S E T H:
WHEREAS, effective as of March 1, 1994, (the "Effective Date"), the
Employer established a salary deferral plan known as the Mail-Well Corporation
401(k) Savings Retirement Plan (the "Plan") for the exclusive benefit of its
participants and their beneficiaries; and
NOW, THEREFORE, effective as of January 1, 1995, except as otherwise
indicated in specific provisions of the Plan, the Employer hereby amends and
restates the Plan in its entirety to read as follows:
ARTICLE 1
DEFINITIONS
1.1 "Acquisition" means the acquisition by Mail-Well Corporation of
-----------
substantially all of the envelope manufacturing assets of G-P Envelope Holdings,
Inc. and the outstanding capital stock of Pavey Envelope and Tag Corp.
1.2 "Acquisition Date" means the date on which the Acquisition occurs.
----------------
1.3 "Act" means the Employee Retirement Income Security Act of 1974, as
---
amended.
1.4 "Administrator" means the person designated by the Employer pursuant
-------------
to Section II.1 to administer the Plan on behalf of the Employer.
1.5 "Affiliated Employer" means the Employer and any corporation that is
-------------------
a member of a controlled group of corporations (as defined in Code Section
414(b)) that include the Employer; any trade or business (whether or not
incorporated) that is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) that is a
member of an affiliated service group (as defined in Code Section 414(m)) that
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.6 "Anniversary Date" means December 31.
----------------
1.7 "Beneficiary" means the person (or the trustee of a trust for the
-----------
benefit of natural persons) to whom the share of a deceased Participant's
Accounts is payable, subject to the restrictions of Sections VI.2 and VI.6.
1.8 "Benefit Commencement Date" means with respect to each Participant or
-------------------------
Beneficiary, the date all or a portion of such Participant's or Beneficiary's
benefit is paid to him from the Trust Fund.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
----
1.10 "Compensation" with respect to any Participant means such
------------
Participant's "415 Compensation" (as defined in Section IV.9(d))) paid during a
Plan Year. The amount of Compensation with respect to any Participant shall
include Compensation for the entire twelve month period ending on the last day
of such Plan Year. The determination of Compensation shall be made by including
amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that are treated as Employer
contributions. Notwithstanding the foregoing, the following amounts shall not be
considered as Compensation:
(a) amounts received as reimbursements by the Employer of any
expenses;
(b) amounts received under any bonus or other incentive programs
maintained by the Employer;
<PAGE>
(c) amounts received as an automobile allowance;
(d) amounts received as a relocation allowance;
(e) amounts received as severance pay;
(f) amounts received as tuition assistance, special awards or any
amounts received or to be received under the Mail-Well Corporation Profit
Sharing Plan;
(g) amounts received as a stock option; and
(h) any other amounts received which are eligible for special tax
treatment.
With respect to a Participant who is a sales representative, Compensation
shall mean such Participant's wages as defined in Code Section 3401(a) and all
other payments of compensation by the Employer (in the course of the Employer's
trade or business) for the calendar year preceding the Plan Year, for which the
Employer is required to furnish the Participant a written statement under Code
Section 6041(d), 6051(a)(3) and 6052. Compensation must be determined without
regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Code Section
3401(a)(2)). If such Participant does not receive a Form W-2 for a calendar
year, Compensation shall mean such Participant's average monthly earnings
annualized for the period of employment including (i) wages, (ii) tips, (iii)
amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that are treated as Employer
contributions, and (iv) other compensation, and excluding bonuses, imputed
income and any other allowances for incentives.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the "OBRA '93 Annual Compensation Limit." The "OBRA '93 Annual Compensation
Limit" is $150,000, as adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). 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 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.
Any reference in this Plan to the limitation under Code Section 401(a)(17)
shall mean the "OBRA '93 Annual Compensation Limit" set forth in this Section.
If Compensation for any prior Determination Period is taken into account in
determining a Participant'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.
1.11 "Deferred Compensation" with respect to any Participant means that
---------------------
portion of such Participant's total Compensation paid by the Employer for a Plan
Year that such Participant has elected to defer pursuant to Section IV.2.
1.12 "Effective Date" means March 1, 1994.
--------------
1.13 "Elective Contribution" means the contributions to the Plan that are
---------------------
made pursuant to the Participant's deferral election provided in Section IV.2.
1.14 "Eligible Employee" means any Employee who is not a Leased Employee
-----------------
and who has satisfied the provisions of Section III.1.
- 2 -
<PAGE>
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits were
the subject of good faith bargaining between the parties, unless such agreement
expressly provides for such coverage in this Plan, will not be eligible to
participate in this Plan.
1.15 "Employee" means any person who is employed by the Employer, but
--------
excludes any person who is employed as an independent contractor. "Employee"
shall include Leased Employees.
1.16 "Employer" means Mail-Well Corporation, a Delaware corporation, and
--------
any Participating Employer (as defined in Section X.1) which shall adopt this
Plan; and any successor which shall maintain this Plan.
1.17 "Employer Contributions" means the Employer's contributions to the
----------------------
Plan pursuant to Section IV.1.
1.18 "Excess Aggregate Contributions" means, with respect to any Plan
------------------------------
Year, the excess of the aggregate amount of Matching Contributions and any
qualified non-elective contributions or Elective Contributions taken into
account pursuant to Section IV.7(c) on behalf of Highly Compensated Participants
for such Plan Year, over the maximum amount of such contributions permitted
under the limitations of Section IV.7.(a).
1.19 "Family Member" means an individual described in Code Section
-------------
414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
---------
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
-----------
commencing January 1 of each year and ending the following December 31.
1.22 "Forfeiture" means that portion of a Participant's Accounts that is
----------
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
1.23 "Former Participant" means a person who has been a Participant, but
------------------
who has ceased to be a Participant for any reason. For purposes of Section I.25,
a Former Participant shall be treated as a Highly Compensated Employee if such
Former Participant was a Highly Compensated Employee when he separated from
service with the Employer or was a Highly Compensated Employee at any time after
attaining age 55.
1.24 "415 Compensation" means compensation as defined in Section IV.9(d)
----------------
of the Plan.
1.25 "Highly Compensated Employee" means any Employee or former Employee
---------------------------
who is a highly compensated employee as defined in Code Section 414(q) and the
Regulations thereunder. Generally, any Employee or former Employee is
considered a Highly Compensated Employee if such Employee or former Employee
performed services for the Employer during the "determination year" and is one
or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section I.30(c).
- 3 -
<PAGE>
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000. In determining whether an
individual has "415 Compensation" of more than $75,000, "415 Compensation"
from each employer required to be aggregated under Code Sections 414(b),
(c), (m) and (o) shall be taken into account.
(c) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $50,000 and were in the top-paid group
of Employees for the Plan Year. An Employee is in the top-paid group of
Employees for any Plan Year if such Employee is in the group consisting of
the top twenty (20%) percent of the Employees when ranked on the basis of
"415 Compensation" paid during the Plan Year. In determining whether an
individual has "415 Compensation" of more than $50,000, "415 Compensation"
from each employer required to be aggregated under Code Section 414(b),
(c), (m) and (o) shall be taken into account.
(d) Employees who during the "look-back year" were officers as
defined in Section I.30.(a) and received "415 Compensation" during the
"look-back year" from the Employer greater than 50 percent of the limit in
effect under Code Section 415(b)(1)(A) for any such Plan Year. The number
of officers shall be limited to the lesser of (i) 50 employees; or (ii) the
greater of 3 employees or 10 percent of all employees. For the purpose of
determining the number of officers, the following Employees shall be
excluded:
(1) Employees with less than six (6) months of service;
(2) Employees who normally work less than 17 1/2 hours per week;
(3) Employees who normally work less than six (6) months during
a year; and
(4) Employees who have not yet attained age 21.
However, such Employees shall still be considered for the purpose of
identifying the particular Employees who are officers. If the Employer
does not have at least one officer whose annual "415 Compensation" is in
excess of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a Highly
Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination year" and
are also described in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-back year."
The "look-back year" shall be the calendar year ending with or within the
Plan Year for which testing is being performed, and the "determination year" (if
applicable) shall be the period of time, if any, that extends beyond the "look-
back year" and ends on the last day of the Plan Year for which testing is being
performed (the "lag period"). If the "lag period" is less than twelve months
long, the threshold amounts specified in (b), (c), and (d) above shall be
prorated based upon the number of months in the "lag period."
For purposes of this Section, the determination of "415 Compensation" shall
be based only on "415 Compensation" which is actually paid and shall be made by
including amounts which are contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions. Additionally, the dollar threshold amounts specified in
(b) and (c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all
- 4 -
<PAGE>
Affiliated Employers shall be taken into account as a single employer and Leased
Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. The exclusion of Leased Employees for this purpose
shall be applied on a uniform and consistent basis for all of the Employer's
retirement plans.
1.26 "Highly Compensated Participant" means any Highly Compensated
------------------------------
Employee who is eligible to participate in the Plan.
1.27 "Hour of Service" means (1) each hour for which an Employee is
---------------
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty,
or leave of absence) during the applicable computation period; and (3) each hour
for which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
The same Hours of Service shall not be credited both under (1) and (2), as the
case may be, and under (3).
Notwithstanding the above, for purposes of eligibility to participate, (i)
no more than 501 Hours of Service are required to be credited to an Employee on
account of any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
an hour for which an Employee is directly or indirectly paid, or entitled to
payment, on account of a period during which no duties are performed is not
required to be credited to the Employee if such payment is made or due under a
plan maintained solely for the purpose of complying with applicable worker's
compensation, or unemployment compensation or disability insurance laws; and
(iii) Hours of Service are not required to be credited for a payment which
solely reimburses an Employee for medical or medically related expenses incurred
by the Employee. Each Employee shall receive credit for forty-five (45) Hours
of Service for each week of a period during which he is credited with Hours of
Service pursuant to this Section for reasons other than performance of duties.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service for eligibility to participate and employment commencement date (or
reemployment commencement date). The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.28 "Investment Funds" means the funds into which the assets of the Trust
----------------
Fund shall be invested as set forth in Section VII.2. The Plan shall offer a
range of Investment Funds which is sufficient to provide a Participant or
Beneficiary with a reasonable opportunity to:
(a) materially affect the potential return on amounts in his Account
with respect to which he is permitted to exercise control and the degree of
risk to which such amounts are subject;
(b) choose from at least three investment alternatives:
(1) each of which is diversified;
(2) each of which has materially different risk and return
characteristics;
- 5 -
<PAGE>
(3) which in the aggregate enable the Participant or Beneficiary
by choosing among them to achieve a portfolio with aggregate risk and
return characteristics at any point within the range normally
appropriate for the Participant or Beneficiary; and
(4) each of which when combined with investments in the other
alternatives tends to minimize through diversification the overall
risk of a Participant's or Beneficiary's portfolio;
(c) diversify the investment of that portion of his Account with
respect to which he is permitted to exercise control so as to minimize the
risk of large losses, taking into account the nature of the Plan and the
size of Participants' or Beneficiaries' Accounts.
1.29 "Investment Manager" means any person, firm, or corporation who is a
------------------
registered investment adviser under the Investment Advisers Act of 1940, a bank,
or an insurance company, and (a) who has the power to manage, acquire, or
dispose of Plan assets, and (b) who acknowledges in writing his fiduciary
responsibility to the Plan.
1.30 "Key Employee" means those Employees defined in Code Section 416(i)
------------
and the Regulations thereunder. Generally, they shall include any Employee or
former Employee (and his Beneficiaries) who, at any time during the Plan Year or
any of the preceding four (4) Plan Years, is:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for any such Plan Year;
(b) one of the ten Employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar limitation in effect
under Code Section 415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within the meaning of Code
Section 318) both more than one-half percent interest and the largest
interests in the Employer;
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than five percent (5%) of the outstanding stock of
the Employer or stock possessing more than five percent (5%) 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%) of
the capital or profits interest in the Employer. In determining percentage
ownership hereunder, Employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate employers; or
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%) 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 one percent (1%) of
the capital or profits interest in the Employer. In determining percentage
ownership hereunder, Employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate Employers.
However, in determining whether an individual has "415 Compensation" of more
than $150,000, "415 Compensation" from each employer required to be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken into
account.
For purposes of this Section, the determination of "415 Compensation" shall
be based only on "415 Compensation" which is actually paid and shall be made by
including amounts which are contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
- 6 -
<PAGE>
1.31 "Leased Employee" means any Employee who would be within the meaning
---------------
of Code Section 414(n)(2) unless such Leased Employee is covered by a plan
described in Code Section 414(n)(5) and such Leased Employee does not constitute
more than 20% of the recipient's nonhighly compensated work force.
1.32 "Matching Contribution" means the contributions to the Plan that are
---------------------
made pursuant to Section IV.1.(b).
1.33 "Month of Service" means a calendar month during any part of which an
----------------
Employee completed an Hour of Service. Except, however, a Participant shall be
credited with a Month of Service for each month during the 12 month computation
period in which he has not incurred a 1-Year Break in Service.
1.34 "Non-Elective Contribution" means contributions to the Plan that are
-------------------------
made pursuant to Section IV.1.(c).
1.35 "Non-Highly Compensated Employee" means any Employee or former
-------------------------------
Employee who is not a Highly Compensated Employee nor a Family Member.
1.36 "Non-Highly Compensated Participant" means any Participant who is
----------------------------------
neither a Highly Compensated Employee nor a Family Member.
1.37 "Non-Key Employee" means any Employee or former Employee (and his
----------------
Beneficiaries) who is not a Key Employee.
1.38 "Normal Retirement Date" means the first day of the month coinciding
----------------------
with or next following the Participant's Normal Retirement Age (65th birthday).
A Participant continues to be fully vested in his Participant's Accounts upon
attaining his Normal Retirement Age.
1.39 "1-Year Break in Service" means the applicable computation period of
-----------------------
12 consecutive months during which an Employee fails to accrue a Month of
Service. Further, solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
Years of Service and 1-Year Breaks in Service shall be measured on the same
computation period.
An Employee shall not be deemed to have incurred a 1-Year Break in Service
if he completes an Hour of Service within 12 months following the last day of
the month during which his employment terminated.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" shall mean an absence from work
for any period by reason of the Employee's pregnancy, birth of the Employee's
child, placement of a child with the Employee in connection with the adoption of
such child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence from
work begins, only if credit therefor is necessary to prevent the Employee from
incurring a 1-Year Break in Service, or, in any other case, in the immediately
following computation period.
1.40 "Participant" means any Eligible Employee who participates in the
-----------
Plan pursuant to Section III.1, and has not become ineligible to participate
further in the Plan.
1.41 "Participant's Accounts" means, with respect to each Participant, the
----------------------
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions which shall include but not
be limited to a Participant's Elective Account, a Participant's Matching
Account, a Participant's Non-Elective Account, a Participant's Plan Transfer
Account and a Participant's Rollover Account.
- 7 -
<PAGE>
1.42 "Participant's Elective Account" means the account established and
------------------------------
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from Elective Contributions made
pursuant to Section IV.1.(a).
1.43 "Participant's Matching Account" means the account established and
------------------------------
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from Employer's Matching Contributions
IV.1.(b).
1.44 "Participant's Non-Elective Account" means the account established
----------------------------------
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from Employer's Non-Elective
Contributions made pursuant to Section IV.1.(c).
1.45 "Participant's Plan Transfer Account" means the account established
-----------------------------------
and maintained by the Administrator for each Participant with respect to his
interest in the Plan and Trust resulting from contributions made pursuant to
Section IV.12.
1.46 "Participant's Rollover Account" means the account established and
------------------------------
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from contributions made pursuant to
Section IV.11.
1.47 "Plan" means this instrument, including all amendments.
----
1.48 "Plan Quarter" means the three-month period ending each March 1, June
------------
30, September 30, and December 31.
1.49 "Plan Year" means the Plan's accounting year of twelve (12) months
---------
commencing on January 1st of each year and ending the following December 31st,
except for the first Plan Year which commenced on the Effective Date.
1.50 "Regulation" means the Income Tax Regulations as promulgated by the
----------
Secretary of the Treasury or his delegate, and as amended.
1.51 "Retired Participant" means a person who has been a Participant, but
-------------------
who has become entitled to retirement benefits under the Plan due to retirement.
1.52 "Retirement Date" means the date as of which a Participant retires
---------------
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date.
1.53 "Terminated Participant" means a person who has been a Participant,
----------------------
but whose employment has been terminated other than by death, Total and
Permanent Disability, or retirement.
1.54 "Top Heavy Plan" means a plan described in Section Article XI.
--------------
1.55 "Top Heavy Plan Year" means that, for a particular Plan Year, the
-------------------
Plan is a Top Heavy Plan.
1.56 "Total and Permanent Disability" means the complete inability to work
------------------------------
in any position for which the Employee is reasonably fit by education, training
or experience, which condition continues for an extended period of time, and
which condition constitutes total disability under the federal Social Security
Acts.
1.57 "Trust" means the trust established under the Trust Agreement to hold
-----
and invest contributions made under the Plan and from which the Plan benefits
will be distributed.
1.58 "Trust Agreement" means the agreement entered into between the
---------------
Employer and the Trustee establishing a trust to hold and invest contributions
made under the Plan and from which benefits will be distributed.
- 8 -
<PAGE>
1.59 "Trust Fund" means the assets of the Plan and Trust as the same shall
----------
exist from time to time.
1.60 "Trustee" means the person or entity named as trustee under the trust
-------
agreement forming a part of this Plan, and any successors.
1.61 "Valuation Date" means the last business day of each calendar quarter
--------------
during the Plan Year, and the last business day of December shall be the "Annual
Valuation Date."
1.62 "Vested" means that portion of a Participant's Accounts that is
------
nonforfeitable.
1.63 "Year of Service" means, for purposes of eligibility for
---------------
participation, the computation period of twelve (12) consecutive months, during
which an Employee has at least 1,000 Hours of Service. For all other purposes,
Year of Service means twelve (12) consecutive Months of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service.
For vesting and all other purposes, the computation period shall be the
Plan Year. For purposes of (i) vesting and (ii) eligibility to participate in
the Plan, years of service prior to the Effective Date of this Plan attributable
to an Employee in connection with Hours of Service rendered for and related to
the envelope manufacturing assets of G-P Envelope Holdings, Inc. acquired in the
Acquisition shall be considered under this Plan. In addition, an Employee shall
receive vesting credit for service recognized on his or her behalf under the
Pavey Envelope and Tag Corporation Employees' Retirement Plan prior to the
Effective Date of this Plan. The vesting computation period beginning after a
1-year Break in Service shall be the Plan Year. Years of Service with any
Affiliated Employer shall be recognized.
For purposes of vesting and eligibility to participate in the Plan, Years
of Service prior to January 1, 1995 attributable to an Employee in connection
with Hours of Service rendered for and related to American Envelope Company
shall be recognized under this Plan. Notwithstanding the foregoing, such an
Employee may begin participation in the Plan no earlier than January 1, 1995.
ARTICLE 2
ADMINISTRATION
2.1 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY
------------------------------------------------------
(a) The Plan is administered by a committee known as the Benefits
Administration Committee (the "Administrator" or "Committee"). The Employer
shall appoint the members of the Committee. Any person, including, but not
limited to, the Employees of the Employer, shall be eligible to serve as a
member of the Committee. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator
may resign by delivering his written resignation to the Employer or be
removed by the Employer by delivery of written notice of removal, to take
effect at a date specified therein, or upon delivery to the Administrator if
no date is specified.
(b) The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this
position. If the Employer does not appoint an Administrator, the Employer
will function as the Administrator.
(c) The Employer shall be empowered to appoint and remove the
Administrator from time to time as it deems necessary for the proper
administration of the Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their Beneficiaries in accordance
with the terms of the Plan, the Code, and the Act.
- 9 -
<PAGE>
(d) The Employer shall periodically review the performance of the
Administrator or any other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal periodic
review by the Employer or by a qualified person specifically designated by
the Employer, through day-to-day conduct and evaluation, or through other
appropriate ways.
2.2 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
---------------------------------------------
If more than one person is appointed as Administrator, the Employer may
designate the responsibilities of each Administrator as may be specified by the
Employer and accepted in writing by each Administrator. In the event that no
such delegation is made by the Employer, the Administrators may allocate the
responsibilities among them selves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
responsibilities of each Administrator. The Trustee thereafter shall accept and
rely upon any documents executed by the appropriate Administrator until such
time as the Employer or the Administrators file with the Trustee a written
revocation of such designation.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
--------------------------------------
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive
and binding upon all persons. The Administrator may establish procedures,
correct any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation, or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Admini
strator shall have all powers necessary or appropriate to accomplish its duties
under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) to determine all questions relating to the eligibility of
Employees to participate or remain a Participant hereunder;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(g) the Administrator shall establish a "funding policy and
method," i.e., it shall consult with the Employer and Trustee, and it shall
determine whether the Plan has a short-run need for liquidity (e.g., to pay
benefits) or whether liquidity is a long-run goal and investment growth (and
stability of same) is a more current need, or shall appoint a qualified
person to do so. The Administrator shall communicate such needs and goals
- 10 -
<PAGE>
to the appropriate person, which includes the Trustee, who shall coordinate
such Plan needs with the Plan's investment policy. The communication of such
a "funding policy and method" shall not, however, constitute a directive to
the Trustee as to investment of the Trust Funds. Such "funding policy and
method" shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(h) to assist any Participant regarding his rights, benefits, or
elections available under the Plan;
(i) to establish and communicate to Participants a procedure for
allowing each Participant to direct the Trustee as to the investment of his
individual account balances pursuant to Section VII.2.
2.4 RECORDS AND REPORTS
-------------------
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries, and others as required by law.
2.5 AUDIT
-----
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator shall
appoint an independent qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of the Plan in
accordance with generally accepted auditing standards, within a reasonable
period after the close of the Plan Year, furnish to the Administrator and
the Trustee a report of his audit setting forth his opinion as to whether
each of the following statements, schedules or lists, or any others that are
required by Section 103 of the Act or the Secretary of Labor to be filed
with the Plan's annual report, are presented fairly and in conformity with
generally accepted accounting principles applied consistently:
(1) statement of the assets and liabilities of the Plan;
(2) statement of changes in net assets available to the Plan;
(3) statement of receipts and disbursements, a schedule of all
assets held for investment purposes, a schedule of all loans or fixed
income obligations in default at the close of the Plan Year;
(4) a list of all leases in default or uncollectible during the
Plan Year;
(5) the most recent annual statement of assets and liabilities
of any bank common or collective trust fund in which Plan assets are
invested or such information regarding separate accounts or trusts
with a bank or insurance company as the Trustee and Administrator
deem necessary; and
(6) a schedule of each transaction or series of transactions
involving an amount in excess of five percent (5%) of Plan assets.
All auditing and accounting fees shall be an expense of the Employer.
(b) If some or all of the information necessary to enable the
Administrator to comply with Section 103 of the Act is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the Administrator
as provided in Section 103(b) of the Act within one hundred twenty (120)
days after the end of the Plan Year or such other date as may be prescribed
under regulations of the Secretary of Labor.
- 11 -
<PAGE>
2.6 APPOINTMENT OF ADVISERS
-----------------------
The Administrator may appoint counsel, specialists, advisers, and other
persons as the Administrator deems necessary or desirable in connection with the
administration of this Plan.
2.7 INFORMATION FROM EMPLOYER
-------------------------
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.8 PAYMENT OF EXPENSES
-------------------
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability
of the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
2.9 ACTIONS BY ADMINISTRATOR
------------------------
The Administrator shall hold meetings upon such notice and at such time and
places as it may from time to time determine. Notice to a member shall not be
required if waived in writing by that member. A majority of the members of the
Administrator duly appointed shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Administrator at any
meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
Members of the Administrator.
2.10 CLAIMS PROCEDURE
----------------
Claims for benefits under the Plan may be filed with the Administrator on
forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood by
the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
2.11 CLAIMS REVIEW PROCEDURE
-----------------------
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section II.10
shall be entitled to request the Administrator to give further consideration to
his claim by filing a written request for a hearing with the Administrator.
Such request, including a written state ment of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section II.10. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of his
claim. At the hearing (or prior thereto upon 5 business days written notice to
the Administrator) the claimant or his representative shall have an opportunity
to review all documents in the possession of the Administrator that are
pertinent to the claim at issue and its disallowance. Either the claimant or the
Administrator may cause a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the proceed-
- 12 -
<PAGE>
ings shall be furnished to both parties by the court reporter. The full expense
of any such court reporter and such transcripts shall be borne by the party
causing the court reporter to attend the hearing. A final decision as to the
allowance of the claim shall be made by the Administrator within 60 days of
receipt of the appeal (unless there has been an extension of 60 days due to
special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60-day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
ARTICLE 3
ELIGIBILITY
3.1 CONDITIONS AND EFFECTIVE DATE OF PARTICIPATION
----------------------------------------------
An Eligible Employee shall be eligible to become a Participant as of the
later of: (i) the Effective Date or (ii) the first day of the month coincident
with or next following his completion of one (1) Year of Service. An Eligible
Employee may become a Participant as of the date on which he is eligible to
participate by completing an enrollment form supplied by the Administrator.
3.2 EFFECT OF PARTICIPATION
-----------------------
Upon the acceptance of any benefits under this Plan, such Employee shall
automatically be bound by the terms and conditions of the Plan and all
amendments hereto.
3.3 DETERMINATION OF ELIGIBILITY
----------------------------
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review pursuant to Section II.10.
3.4 TERMINATION OF ELIGIBILITY
--------------------------
In the event a Participant shall change from a classification of an
Eligible Employee to a noneligible Employee, his interest in the Plan shall
continue to share in the earnings of the Trust Fund until such time as his Par
ticipant's Account shall be distributed pursuant to the terms of the Plan.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
-----------------------------
If, in any Fiscal Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made
and allocated, the Employer shall make a subsequent contribution with respect to
the omitted Employee in the amount which said Employer would have contributed
with respect to such Employee had he not been omitted. Such contribution shall
be made regardless of whether it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
--------------------------------
If, in any Fiscal Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made and
allocated, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall be restored to him.
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<PAGE>
ARTICLE 4
CONTRIBUTION AND ALLOCATION
41. EMPLOYER CONTRIBUTION
---------------------
For each Plan Year, the Employer shall contribute to the Plan in cash or in
such property as is acceptable to the Trustee:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section IV.2.(a), which amount shall be deemed
the Elective Contributions; plus
(b) A contribution, if any, equal to 50% of each Participant's
Elective Contribution, which amount shall be deemed the Matching
Contribution. In applying the matching percentage in the previous sentence,
only Elective Contributions up to 6% of Compensation shall be considered.
Notwithstanding the foregoing, with respect to a Participant whose
employment is governed by the terms of a collective bargaining agreement (as
described in Section I.14), the Matching Contribution shall be determined
under the terms of such collective bargaining agreement; plus
(c) A discretionary amount, if any, as may be determined by the
Employer's Board of Directors or its delegatees, which amount shall be
deemed the Employer's Non-Elective Contribution.
(d) The Employer Contributions for any Plan Year, subject to the
limitation provided above, shall not exceed the maximum amount allowable as
a deduction to the Employer under the provisions of Code Section 404.
(e) To the extent necessary to provide the top heavy minimum
allocations as set forth in Section IV.4.(f), the Employer shall make a
contribution even if it exceeds the amount which is deductible under Code
Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
---------------------------------------
(a) Each Participant may elect to defer from one percent (1%) to ten
percent (10%) (in whole percentage points) of his Compensation subject to
the limitations of this Section. The amount by which Compensation is
reduced shall be that Participant's Deferred Compensation. It shall be
allocated to the Participant's Elective Account.
(b) A salary reduction election shall apply to each payroll period
during which an effective salary reduction election is on file with the
Employer. A salary reduction election shall be effective, upon a fifteen
(15) days prior written notice, as of the first day of the next Plan
Quarter. A salary reduction election may be amended by a Participant at
any time up to four (4) times during the Plan Year for purposes of
increasing or decreasing the amount of the Participant's Deferred
Compensation.
(c) The balance in each Participant's Elective Account shall be fully
vested at all times and shall not be subject to forfeiture for any reason.
(d) Amounts held in the Participant's Elective Account may not be
distributable prior to the earlier of:
(1) his termination of employment, Total and Permanent
Disability, or death;
(2) his attainment of age 59 1/2;
(3) termination of the Plan without establishment of a "successor
plan," as that term is described in Regulation 1.401(k)-1(d)(3) by
the Employer or an Affiliated Employer;
- 14 -
<PAGE>
(4) the date of the sale by the Employer to an entity that is not
an Affiliated Employer of substantially all of the assets of an
Employer's trade or business (within the meaning of Code Section
409(d)(2)) with respect to a Participant who continues employment
with the corporation acquiring such assets;
(5) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an Affiliated Employer
with respect to a Participant who continues employment with such
subsidiary; or
(6) proven financial hardship, subject to the limitations of
Section IV.2.(g).
(e) A Participant's Deferred Compensation made pursuant to this Plan
and all other plans, contracts or arrangements of the Employer shall not
exceed, during any taxable year of the Participant, the limitation imposed
by Code Section 402(g), as in effect at the beginning of such taxable year.
The dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1 following the close of his taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator may direct the Trustee to
distribute such excess amount, and any income allocable to such amount, to
the Participant not later than the first April 15th following the close of
the Participant's taxable year. Any distribution of less than the entire
amount of Excess Deferred Compensation and income shall be treated as a pro
rata distribution of Excess Deferred Compensation and income. The amount
distributed shall not exceed the Participant's Deferred Compensation under
the Plan for the taxable year. Any distribution on or before the last day of
the Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
Any distribution made pursuant to this Section IV.2.(f) shall be made
first from unmatched Deferred Compensation and, thereafter, simultaneously
from Deferred Compensation which is matched and matching contributions which
relate to such Deferred Compensation. However, any such matching
contributions which are not Vested shall be forfeited in lieu of being
distributed.
(g) In the event a Participant has received a hardship distribution
from his Participant's Elective Account pursuant to Section VI.11, or
pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any other plan
maintained by the Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
until the first day of the calendar quarter following a period of twelve
(12) months following the receipt of distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which the hardship
distribution was made, by the amount of such Participant's Deferred
Compensation, if any,
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<PAGE>
pursuant to this Plan (and any other plan maintained by the Employer)
for the taxable year of the hardship distribution.
(h) The Employer and/or the Administrator shall adopt any procedures
necessary to implement the salary reduction elections provided for herein.
(i) All amounts allocated to a Participant's Elective Account shall
be invested pursuant to Section VII.2.
(j) In any case, where any of the foregoing provisions of this
Section IV.2 are not in conformity with regulations of the Department of the
Treasury that are from time to time promulgated, the nonconforming provision
may be amended retroactively to assure conformity.
4.3 TIME OF PAYMENT OF ELECTIVE CONTRIBUTIONS
-----------------------------------------
The Employer shall pay to the Trustee Elective Contributions accumulated
through payroll deductions to the Trustee with reasonable promptness, and in any
event will be paid by the end of the succeeding month following such payroll
deductions.
4.4 ALLOCATION OF CONTRIBUTIONS, EARNINGS AND FORFEITURES
-----------------------------------------------------
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Valuation Date all amounts allocated to each such Participant as hereafter
set forth. However, the Administrator may separately account for that
portion of each Participant's Account attributable to Top Heavy Plan Years
and Non-Top Heavy Plan Years.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Elective
Contributions for each Plan Quarter. Within 45 days after the date of
receipt by the Administrator of such information, the Administrator shall
allocate such contribution as follows:
(1) With respect to the Elective Contribution made pursuant to
Section IV.2, to each Participant's Elective Account in an amount
equal to the Participant's Deferred Compensation for the Plan
Quarter.
(2) With respect to the Matching Contribution pursuant to Section
IV.1.(b), to each Participant's Matching Account in the same
proportion that each such Participant's Deferred Compensation for the
year bears to the total Deferred Compensation of all Participants for
such year.
(3) With respect to the Non-Elective Contributions pursuant to
Section IV.1.(c), to each Participant's Non-Elective Account in the
same proportion that each such Participant's Compensation for the
year bears to the total Compensation of all Participants for such
year.
A Participant who is not an Employee on the last day of the Plan Year
shall not share in the Employer's Non-Elective contribution for that year,
unless required pursuant to Section IV.4.(f) or IV.4.(k). Except for the
first Plan Year ending December 31, a Participant who performs less than a
Year of Service shall not share in the Employer's Non-Elective contribution
for that year, unless required pursuant to Section IV.4.(f) or IV.4.(k).
(c) As of each Anniversary Date or other valuation date before
allocation of Employer Contributions and Forfeitures, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall be allocated
in the same proportion that each Participant's and Former Participant's
Accounts bears to the total of all Participants' and Former Participants'
Accounts as of such date. Earnings or losses include the increase or
decrease in the fair market value of assets of the Trust Fund since the
preceding Valuation Date.
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<PAGE>
(d) The Administrator shall establish accounting procedures for the
purpose of making the allocations, valuations and adjustments to
Participants' Accounts provided for in this Section. Should the
Administrator determine that the strict application of its accounting
procedures shall not result in an equitable and nondiscriminatory allocation
among the Participants' Accounts, it may modify its procedures for the
purpose of achieving an equitable and nondiscriminatory allocation in
accordance with the general concepts of the Plan and the provisions of this
Section, provided, however, that such adjustments to achieve equity shall
not reduce the Vested portion of a Participant's Accounts.
(e) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any. The
remaining Forfeitures, if any, shall be allocated among the Participants'
Accounts in the following manner:
(1) Forfeitures attributable to Matching Contributions made
pursuant to Section IV.1.(b) shall be allocated among the
Participants' Accounts in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for the year. Except, however,
Participants who are not eligible to share in Matching Contributions
(whether or not a deferral election was made or suspended) for a Plan
Year shall not share in Forfeitures attributable to Matching
Contributions for that year.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section IV.1.(c) shall be allocated
among the Participants' Accounts of Participants otherwise eligible
to share in the allocation of discretionary contributions for the
year in the same proportion that each such Participant's Compensation
for the year bears to the total Compensation of all such Participants
for the year.
In the event the allocation of Forfeitures provided herein shall
cause the "annual addition" (as defined in Section IV.9) to any
Participant's Accounts to exceed the amount allowable by the Code, the
excess shall be reallocated in accordance with Section IV.4. However, a
Participant who (i) performs less than a Year of Service during any Plan
Year or (ii) is not an Employee on the last day of the Plan Year shall not
share in the Plan Forfeitures for that year, unless required pursuant to
Section IV.4.(f).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the Employer's
contributions allocated to the Participant's Accounts of each Non-Key
Employee shall be equal to at least three percent (3%) of such Non-Key
Employee's "415 Compensation" (reduced by Employer Contributions and
Forfeitures, if any, allocated to each Non-Key Employee in any defined
contribution plan included with this plan in a Required Aggregation Group
(as defined in Article XI). However, if (i) the Employer's contributions
allocated to the Participant's Accounts of each Key Employee for such Top
Heavy Plan Year is less than three percent (3%) of each Key Employee's "415
Compensation" and (ii) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet the requirements
of Code Sections 401(a)(4) or 410, the Employer's Contributions allocated
to the Participant's Accounts of each Non-Key Employee shall be equal to the
largest per centage allocated to the Participant's Accounts of each Key
Employee.
However, in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's Deferred Compensation
shall not be taken into account.
No such minimum allocation shall be required in this Plan for any
Non-Key Employee who participates in another defined contribution plan
subject to Code Section 412 providing such benefits included with this Plan
in a Required Aggregation Group as defined in Article XI.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Accounts of any Key Employee shall
be equal to the ratio of the Employer's contribution allo cated on behalf of
such Key Employee divided by the "415 Compensation" for such Key Employee.
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<PAGE>
(h) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Accounts of all Non-Key
Employees who are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who have (1) failed
to complete a Year of Service; (2) declined to make mandatory contributions
(if required) or salary reduction contributions to the Plan; and (3) been
excluded from participation because of their level of Compensation.
(i) In lieu of the above, in any Plan Year in which a Non-Key
Employee is a Participant in both this Plan and a defined benefit plan
included in a Required Aggregation Group (as defined in Article XI) that is
top heavy, the Employer shall not be required to provide such Non-Key
Employee with both the full separate defined benefit plan minimum benefit
and the full separate defined contribution plan minimum allocation.
Therefore, for any Plan Year when the Plan is a Top Heavy Plan, Non-
Key Employees who are participating in this Plan and a defined benefit plan
maintained by the Employer shall receive a minimum monthly accrued benefit
in the defined benefit plan equal to the product of (1) one-twelfth (1/12th)
of "415 Compensation" averaged over five (5) consecutive "limitation years"
(or actual "limitation years" if less) that produce the highest average and
(2) the lesser of (i) two percent (2%) multiplied by Years of Service when
the plan is top heavy or (ii) twenty percent (20%).
(j) For the purposes of this Section, "415 Compensation" shall be as
defined in Section IV.9.(d), and shall be limited to $150,000 in all Plan
Years (unless adjusted in such manner as permitted under Code Section
401(a)(17).
(k) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability or
retirement shall share in the allocations of contributions provided for in
this Section regardless of whether they completed a Year of Service during
the Plan Year.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
--------------------------------
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Elective Contributions to a Participant's Elective
Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The provisions of Code
Section 401(k)(3) and Regulation 1.401(k)-1(b) are incorporated
herein by reference.
To prevent the multiple use of the alternate method described in (2)
above and in Code Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make Elective Contributions pursuant to Section IV.2 and to make
Employee contributions or to receive matching contributions under this Plan
or under any other plan maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced pursuant to Regulation
1.401(m)-2, the provisions of which are incorporated herein by reference.
(b) For the purposes of this Section, "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-
Highly Compensated Participant group for a Plan Year, the average of the
ratios, calculated separately for each Employee in such group, of the amount
of Elective Contributions allocated to each Participant's Elective Account
(unreduced by distributions made pursuant to Sections 4.2(f) and 4.2(g))
for such Plan Year, to such Employee's Compensation for such Plan Year. The
actual
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<PAGE>
deferral ratio for each Employee and the "Actual Deferral Percentage" for
each group shall be calculated to the nearest one-hundredth of one percent.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be determined by aggregating Elective Contributions and Compensation
of all eligible Family Members (including Highly Compensated
Participants). However, in applying the $150,000 limit to
Compensation, Family Members shall include only the affected
Employee's spouse and any lineal descendants who have not attained
age 19 before the close of the Plan Year.
(2) The Elective Contributions and Compensation of all Family
Members shall be disregarded for purposes of determining the "Actual
Deferral Percentage" of the Non-Highly Compensated Participant group
except to the extent taken into account in paragraph (1) above.
(3) If an Employee is required to be aggregated as a member of
more than one family group in a Plan, all Employees who are members
of those family groups that include the Employee are aggregated as
one family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of Sections IV.5.(a) and IV.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall include
any Employee eligible to make a deferral election pursuant to Section IV.2,
whether or not such deferral election was made or suspended pursuant to Section
IV.2.
(e) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans that include cash or deferred
arrangements are considered one plan for the purposes of Code Section 401(a)(4)
or 410(b) (other than Code Section 410(b)(2)(A)(ii)), the cash or deferred
arrangements included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be considered as a
single arrangement for purposes of determining whether or not such arrangements
satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for purposes of
this Section and Code Sections 401(a)(4), 410(b) and 401(k). Plans may be
aggregated under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan described
in Code Section 4975(e)(7) or 409 may not be combined with this Plan for
purposes of determining whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly Compensated
Participant is a participant under two (2) or more cash or deferred arrangements
(other than a cash or deferred arrangement that is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) or 409) of the Employer or
an Affiliated Employer, all such cash or deferred arrangements shall be treated
as one (1) cash or deferred arrangement for the purpose of determining the
deferral percentage with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different Plan Years, this
paragraph shall be applied by treating all cash or deferred arrangements ending
with or within the same calendar year as a single arrangement.
(g) Notwithstanding the above, the determination and treatment of
Elective Contributions and the "Actual Deferral Percentage" of any Participant
shall satisfy such other requirements as may be pre scribed by the Secretary of
the Treasury.
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<PAGE>
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
----------------------------------------------
In the event that the initial allocations of the Elective Contributions made
pursuant to Section IV.2 do not satisfy one of the tests set forth in Section
IV.5.(a), the Administrator shall adjust the Elective Contribution pursuant to
the options set forth below:
(a) On or before the 15th day of the third month following the end of
each Plan Year, the Highly Compensated Participant having the highest actual
deferral ratio shall have his portion of Excess Contributions (as defined
below) (and any income allocable to such portion) distributed to him until
one of the tests set forth in Section IV.5.(a) is satisfied, or until his
actual deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual deferral ratio.
This process continues until one of the tests set forth in Section IV.5.(a)
is satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions made on behalf of such
Highly Compensated Participant (determined prior to the application of this
paragraph) minus the amount determined by multiplying the Highly Compensated
Participant's actual deferral ratio (determined after application of this
paragraph) by his Compensation. However, in determining the amount of Excess
Contributions to be distributed with respect to an affected Highly
Compensated Participant as determined herein, such amount shall be reduced
by any Excess Deferred Compensation previously distributed to such affected
Highly Compensated Participant for his taxable year ending with or within
such Plan Year. If there is a loss allocable to such excess amount, the
distribution shall in no event be less than the lesser of the Parti cipant's
Elective Account or the Participant's Deferred Compensation for the Plan
Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(A) may be postponed, but not later than the close of the
Plan Year following the Plan Year to which they are allocable;
(B) shall be made first from unmatched Deferred Compensation
and, thereafter, simultaneously from Deferred Compensation which
is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed;
(C) shall be adjusted for income; and
(D) shall be designated by the Employer as a distribution of
Excess Contributions (and income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess
Contributions and income.
(3) The determination and correction of Excess Contributions of
a Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be accomplished
by reducing the actual deferral ratio as required herein, and the
Excess Contributions for the family unit shall be allocated among the
Family Members in proportion to the Elective Contributions of each
Family Member that were combined to determine the group actual
deferral ratio.
(b) Within twelve (12) months after the end of the Plan Year, if
necessary, the Employer may make a contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of the tests
set forth in Section IV.5.(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated Participant in
the same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all Non-Highly
Compensated Participants.
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<PAGE>
4.7 MAXIMUM CONTRIBUTION PERCENTAGE
-------------------------------
(a) The "Contribution Percentage" for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-
Highly Compensated Participant group, or such percentage for the Non-
Highly Compensated Participant group plus 2 percentage points.
However, to prevent the multiple use of the alternative method
described in this paragraph and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals pursuant
to Section IV.2 or any other cash or deferred arrangement maintained
by the Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under this Plan or
any other plan maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2. The provisions of Code Section 401(m) and
Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated herein by
reference.
(b) For the purposes of this Section and Section 4.9, "Contribution
Percentage" for a Plan Year means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group, the average
of the ratios (calculated separately for each Employee in each group) of:
(1) the sum of Matching Contributions contributed under the Plan
on behalf of each such Participant for such Plan Year; to
(2) the Participant's Compensation for such Plan Year.
(c) For purposes of determining the "Contribution Percentage" and the
amount of Excess Aggregate Contributions pursuant to Section IV.8.(d), only
Matching Contributions (excluding Matching Contributions forfeited or
distributed pursuant to Sections IV.2.(f) and IV.6.(a)(i) or forfeited
pursuant to Section IV.8.(a)) contributed to the Plan prior to the end of
the succeeding Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Participants eligible to
have Matching Contributions pursuant to Section IV.1.(b) allocated to their
account, elective contributions (as defined in Regulation 1.402(g)-1(b)),
and qualified non-elective contributions (as defined in Code Sec tion
401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective contributions and qualified non-elective contributions shall be
treated as Matching Contributions subject to Regulation 1.401(m)-1(b)(5),
which is incorporated herein by reference. However, the Plan Year must be
the same as the plan year of the plan to which elective contributions and
the qualified non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be determined by aggregating Matching Contributions made pursuant to
Section IV.1.(b) and Compensation of all eligible Family Members
(including Highly Compensated Participants). However, in applying the
$150,000 limit to Compensation, Family Members shall include only the
affected Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
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<PAGE>
(2) The Matching Contributions and Compensation of all Family
Members shall be disregarded for purposes of determining the "Actual
Contribution Percentage" of the Non-Highly Compensated Participant
group except to the extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are
members of those family groups that include the Participant are
aggregated as one family group in accordance with paragraphs (1) and
(2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one
plan for purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)), such plans shall
be treated as one plan. In addition, two or more plans of the Employer to
which matching contributions, Employee contributions, or both, are made may
be considered as a single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a
case, the aggregated plans must satisfy this Section and Code Sections
401(a)(4), 410(b) and 401(m) as though such aggregated plans were a single
plan. Plans may be aggregated under this paragraph (e) only if they have the
same plan year.
Notwithstanding the above, an employee stock ownership plan described
in Code Section 4975(e)(7) or 409 may not be aggregated with this Plan for
purposes of determining whether the employee stock ownership plan or this
Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) which are maintained by the Employer or an
Affiliated Employer to which matching contributions, Employee contributions,
or both, are made, all such contributions on behalf of such Highly
Compensated Participant shall be aggregated for purposes of determining such
Highly Compensated Participant's actual contribution ratio. However, if the
plans have different plan years, this paragraph shall be applied by treating
all plans ending with or within the same calendar year as a single plan.
(g) For purposes of Sections IV.7.(a) and IV.8, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Matching Contributions pursuant to Section
IV.1.(b) (whether or not a deferral election was made or suspended pursuant
to Section IV.2) allocated to his account for the Plan Year.
4.8 ADJUSTMENT FOR EXCESSIVE CONTRIBUTION PERCENTAGE
------------------------------------------------
(a) In the event that the "Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section IV.7.(a), the
Administrator, on or before the fifteenth day of the third month following
the end of the Plan Year, but in no event later than the close of the
following Plan Year, shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual contribution ratio his
Vested portion of Excess Aggregate Contributions (and any income allocable
to such contributions) and, if forfeitable, forfeit such non-Vested Excess
Aggregate Contributions attributable to Matching Contributions (and income
allocable to such forfeitures) until either one of the tests set forth in
Section IV.7.(a) is satisfied, or until his actual contribution ratio equals
the actual contribution ratio of the Highly Compensated Participant having
the second highest actual contribution ratio. This process shall continue
until one of the tests set forth in Section IV.7.(a) is satisfied.
(b) Any distribution and/or forfeiture of less than the entire amount
of Excess Aggregate Contributions (and income) shall be treated as a pro
rata distribution and/or forfeiture of Excess Aggregate Contributions and
income. Distribution of Excess Aggregate Contributions shall be designated
by the Employer as a distribution of Excess Aggregate Contributions (and
income). Forfeitures of Excess Aggregate
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<PAGE>
Contributions shall be treated in accordance with Section IV.4. However, no
such forfeiture may by allocated to a Highly Compensated Participant whose
contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions, including forfeited Matching
Contributions, shall be treated as Employer contributions for purposes of
Code Sections 404 and 415 even if distributed from the Plan.
Forfeited Matching Contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture occurs
shall be treated as an "annual addition" pursuant to Section IV.9.(b) for
the Participants to whose Accounts they are reallocated and for the
Participants from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Matching Contributions and any
qualified non-elective contributions or elective contributions taken into
account pursuant to Section IV.7.(c) on behalf of the Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual contribution ratio (determined after application of this paragraph)
by his Compensation. The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent. In no case shall the amount of Excess
Aggregate Contribution with respect to any Highly Compensated Participant
exceed the amount of Matching Contributions and any qualified non-elec tive
contributions or elective contributions taken into account pursuant to
Section IV.7.(c) on behalf of such Highly Compensated Participant for such
Plan Year.
(e) The determination of the amount of Excess Aggregate Contributions
with respect to any Plan Year shall be made after first determining the
Excess Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the Plan Year.
(f) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual contribution
ratio is determined under the family aggregation rules shall be accomplished
by reducing the actual contribution ratio as required herein, and allocating
the Excess Aggregate Contributions for the family unit among the Family
Members in proportion to the sum of Matching Contributions and any qualified
non-elective contributions or elective contributions taken into account
pursuant to Section IV.7.(c) of each Family Member that were combined to
determined the group actual contribution ratio.
(g) If during a Plan Year the projected aggregate amount of Matching
Contributions to be allocated to all Highly Compensated Participants under
this Plan would, by virtue of the tests set forth in Section IV.7.(a), cause
the Plan to fail such tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section IV.8.(a) each affected
Highly Compensated Participant's projected share of such contributions by an
amount necessary to satisfy one of the tests set forth in Section IV.7.(a).
(h) Notwithstanding the above, if necessary, within twelve (12)
months after the end of the Plan Year, the Employer may make a special
qualified non-elective contribution (as defined in Code Sec tion
401(m)(4)(C) on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section IV.7.(a) Such
contribution shall be allocated to the Participant's Elective Account of
each Non-Highly Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants. A separate
accounting shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests pursuant to
Section IV.5.(a).
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<PAGE>
4.9 MAXIMUM ANNUAL ADDITIONS
------------------------
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall equal
the lesser of: (1) $30,000 (or, if greater, one-fourth of the dollar
limitation in effect under Code Section 415(b)(1)(A)) or (2) twenty-five
percent (25%) of the Participant's "415 Compensation" for such "limitation
year."
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts for
any "limitation year" of (1) Employer Contributions, (2) Employee
contributions, (3) forfeitures, (4) amounts allocated, after March 31, 1984,
to an individual medical account, as defined in Code Section 415(l)(2) that
is part of a pension or annuity plan maintained by the Employer and (5)
amounts derived from contributions paid or accrued in taxable years ending
after December 31, 1985, that are attributable to post-retirement medical
benefits allocated to the separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. The "415 Compensation"
percentage limitation referred to in paragraph (a)(2) above shall not apply
to: (1) any contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service that is otherwise treated
as an "annual addition," or (2) any amount otherwise treated as an "annual
addition" under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition." In addition, the following are not Employee contributions for the
purposes of Section IV.9(b)(2): (1) rollover contributions (as defined in
Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments
of loans made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(7)(B)
(cash-outs); (4) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(3)(D) (mandatory contributions); and (5)
Employee contributions to a simplified employee pension excludable from
gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415,
"415 Compensation" shall include the Participant's wages, salaries, fees
for professional services, and other amounts received for personal services
actually rendered in the course of employment with an Employer maintaining
the Plan (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as
described in Regulation 1.62-2(c)) for a Plan Year.
"415 Compensation" shall exclude (1)(A) contributions made by the
Employer to a plan of deferred compensation to the extent that, before the
application of the Code Section 415 limitations to the Plan, the
contributions are not includable in the gross income of the Employee for the
taxable year in which contributed, (B) Employer contributions made on behalf
of an Employee to a simplified employee pension plan described in Code
Section 408(k) to the extent such contributions are excludable from the
Employee's gross income, (C) any distributions from a plan of deferred
compensation; (2) amounts realized from the exercise of a non-qualified
stock option or when restricted stock (or property) held by an Employee
either becomes freely transferable or is no longer subject to a substantial
risk of forfeiture; (3) amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option; and (4) other
amounts that 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 the Employer
(whether or not under a salary reduction agreement) towards the purchase of
any annuity contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee). "415
Compensation" shall be limited to $150,000 (unless adjusted in the same
manner as permitted under Code Section 415(d)).
(e) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Plan Year.
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<PAGE>
(f) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code
Section 415(d) pursuant to the Regulations. The adjusted limitation is
effective as of January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(g) For the purpose of this Section, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(h) For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control
(as defined by Code Section 1563(a) or Code Section 414(b) and (c) as
modified by Code Section 415(h)), is a member of an affiliated service group
(as defined by Code Section 414(m)), or is a member of a group of entities
required to be aggregated pursuant to Regulations under Code Section 414(o),
all Employees of such Employers shall be considered to be employed by a
single Employer.
(i) For the purpose of this Section, if this Plan is a Code Section
413(c) plan, all Employers of a Participant who maintain this Plan will be
considered to be a single Employer.
(j) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan not
subject to Code Section 412 maintained by the Employer which have the
same Anniversary Date, "annual additions" will be credited to the
Participant's accounts under the defined contribution plan subject to
Code Section 412 prior to crediting "annual additions" to the
Participant's accounts under the defined contribution plan not
subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product of (A) the maximum
"annual additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs (1) or (2) above,
multiplied by (B) a fraction (i) the numerator of which is the
"annual additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations of Code
Section 415 and (ii) the denominator of which is such "annual
additions" for all plans described in this subparagraph.
(k) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans maintained
by the Employer, the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any "limitation year" may not exceed
1.0.
(l) The defined benefit plan fraction for any "limitation year" is 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 125 percent of the dollar limitation determined for the
"limitation year" under Code Sections 415(b) and (d) or 140 percent of the
highest average compensation, including any adjustments under Code Section
415(b).
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first "limitation year" beginning after December 31,
1986, in one or more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction will not
be less than 125 percent of
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<PAGE>
the sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last "limitation year" beginning before
January 1, 1987, disregarding any changes in the terms and conditions of the
plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements
of Code Section 415 for all "limitation years" beginning before January 1,
1987.
(m) The defined contribution plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the annual additions to
the Participant's Account 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 Employee contributions to all defined benefit
plans, whether or not terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as defined in Code
Section 419(e), and individual medical accounts, as defined in Code Section
415(l)(2), 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" of service 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 125 percent of
the dollar limitation determined under Code Sections 415(b) and (d) in
effect under Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first day of
the first "limitation year" beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if
the sum of this fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last "limitation
year" beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but using the Code
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.
(n) Notwithstanding the foregoing, for any "limitation year" in which
percent in paragraph (l) and (m) unless the extra minimum allocation is
being provided pursuant to Section IV.4. However, for any "limitation year"
in which the Plan is a Super Top Heavy Plan, 100 percent shall be
substituted for 125 percent in any event.
(o) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall exceed 1.0 in any "limitation year" for any
Participant in this Plan, the Administrator shall limit, to the extent
necessary, the "annual additions" to such Participant's accounts for such
"limitation year." If, after limiting the "annual additions" to such
Participant's accounts for the "limitation year," the sum of the defined
benefit plan fraction and the defined contribution plan fraction still
exceed 1.0, the Administrator shall then adjust the numerator of the defined
benefit plan fraction so that the sum of both fractions shall not exceed 1.0
in any "limitation year" for such Participant.
(p) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in
this Section shall at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
-----------------------------------------
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code
Section 402(g)(3)) that may be made with respect to any Participant under
the limits of Section IV.9 or other
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<PAGE>
facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause the maximum
"annual additions" to be exceeded for any Participant, the Administrator
shall (1) distribute any elective deferrals (within the meaning of Code
Section 402(g)(3)) or return any voluntary Employee contributions credited
for the "limitation year" to the extent that the return would reduce the
"excess amount" in the Participant's accounts (2) hold any "excess amount"
remaining after the return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) allocate and
reallocate the "Section 415 suspense account" in the next "limitation year"
(and succeeding "limitation years" if necessary) to all Participants in the
Plan before any Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation year," or (4)
reduce Employer contributions to the Plan for such "limitation year" by the
amount of the "Section 415 suspense account" allocated and reallocated
during such "limitation year."
(b) For purposes of this Article, "excess amount" for any Participant
for a "limitation year" shall mean the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the
Plan without regard to the limitations of Code Section 415 over (2) the
maximum "annual additions" determined pursuant to Section IV.9.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts" for
all Participants in the Plan during the "limitation year." The "Section 415
suspense account" shall not share in any earnings or losses of the Trust
Fund .
4.11 TRANSFERS FROM QUALIFIED PLANS
------------------------------
(a) With the consent of the Administrator, amounts may be 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 Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be set up in a
separate account herein referred to as a "Participant's Rollover Account."
Such account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan, and such amounts may not be
withdrawn by, or distributed to the Participant, in whole or in part, except
as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation 1.411
(d)-4), amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a plan-
to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Participant's Rollover Account shall be used to
provide benefits to the Participant or his Beneficiary. Any distributions of
amounts held in a Participant's Rollover Account shall be made in a manner
that is consistent with and satisfies the provisions of Section VI.5.
Further, such amounts shall be considered as part of a Participant's benefit
in determining whether an involuntary cash-out of benefits without
Participant consent may be made.
(e) All amounts allocated to a Participant's Rollover Account shall
be invested pursuant to Section VII.2.
(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i) amounts transferred
to this Plan directly from another qualified plan; (ii) distributions from
another qualified plan which are eligible rollover distributions and which
are either transferred by the Employee to this Plan within sixty (60) days
following his receipt thereof or are transferred pursuant to a direct
rollover; (iii) amounts
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<PAGE>
transferred to this Plan from a conduit individual retirement account
provided that the conduit individual retirement account has no assets other
than assets which (A) were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible for tax-free
rollover to a qualified plan and (C) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof and
other than earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee to this
Plan within sixty (60) days of his receipt thereof from such conduit
individual retirement account.
(g) Prior to accepting any transfers to which this Section applies,
the Administrator 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.
(h) Notwithstanding anything herein to the contrary, this Plan shall
not accept any direct or indirect transfers (as that term is defined and
interpreted under Code Section 401(a)(11) and the Regulations thereunder)
from a defined benefit plan, money purchase plan (including a target benefit
plan), stock bonus or profit sharing plan that would otherwise have provided
for a life annuity form of payment to the Participant.
(i) 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 be permitted only if it will not result
in the elimination or reduction of any benefit in violation of Code Section
411(d)(6).
4.12 TRANSFERS FROM OTHER PLANS
--------------------------
With the consent of the Administrator, lump sum distribution amounts may be
transferred from any other qualified plan to this Plan. The amounts transferred
shall be set up in a separate account to be held by the Trustee referred to as a
"Plan Transfer Account." Such account shall be fully Vested at all times and
shall not be subject to Forfeiture for any reason. For purposes of this
Section, a Plan Transfer Account shall mean an Account that complies with Code
Section 402. Any distributions of amounts held in a Participant's Plan Transfer
Account shall be made in accordance with Section VI.5. With respect to amounts
attributable to after-tax employee contributions, including amounts treated as
after-tax employee contributions, which are transferred from another qualified
plan in a plan-to-plan transfer, and subject to such uniform and
nondiscriminatory rules as the Administrator may establish, a Participant may
elect to withdraw all or part of such amounts once each Plan Year. Such request
shall be made in accordance with the procedure established by the Administrator.
4.13 SUSPENSE ACCOUNT
----------------
All Employer Contributions, Forfeitures and net income (or net loss) of the
Trust Fund shall be held in a suspense account until allocated to the applicable
Participants' Accounts.
ARTICLE 5
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
---------------------------
The Administrator shall direct the Trustee, as of each Valuation Date, and
at such other date or dates deemed necessary by the Administrator, to determine
the net worth of the assets comprising the Trust Fund as it exists on the
Valuation Date. In determining such net worth, the Trustee shall value the
assets comprising the Trust Fund at their fair market value as of the Valuation
Date and shall deduct all expenses for which the Trustee has not yet obtained
reimbursement from the Employer or the Trust Fund.
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<PAGE>
5.2 METHOD OF VALUATION
-------------------
Valuations must be made in good faith and based on all relevant factors for
determining the fair market value of securities. In the case of a transaction
between a Plan and a disqualified person, value must be determined as of the
date of the transaction. For all other Plan purposes, value must be determined
as of the most recent valuation date under the Plan. An independent appraisal
will not in itself be a good faith determination of value in the case of a
transaction between the Plan and a disqualified person. However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will be deemed
to be a good faith determination of value.
ARTICLE 6
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 BENEFITS UPON RETIREMENT
------------------------
A Participant who terminates his employment on or after his Normal
Retirement Date shall be distributed a benefit in accordance with Section VI.5
equal in value to the balance in the Participant's Accounts as of his Benefit
Commencement Date, such balance to be determined as of the Valuation Date
immediately preceding the Participant's Benefit Commencement Date.
6.2 BENEFITS UPON DEATH
-------------------
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Account shall become fully Vested. The Participant's
Beneficiary shall be distributed a benefit in accordance with Section VI.7
equal in value to the balance in the Participant's Accounts as of the
Benefit Commencement Date to the Beneficiary, such balance to be determined
as of the Valuation Date immediately preceding such Benefit Commencement
Date.
(b) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant as the Administrator may deem desirable.
The Administrator's determination of death and of the right of any person to
receive payment shall be conclusive.
(c) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse; provided, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived her right to be the Participant's
Beneficiary, or
(2) the Participant has no spouse, or
(3) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a
form satisfactory to the Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator. However,
the Participant's spouse must again consent in writing to any such change or
revocation unless the original consent acknowledged that the spouse had the
right to limit consent only to a specific Beneficiary and that the spouse
voluntarily elected to relinquish such right. In the event no valid
designation of Beneficiary exists at the time of the Participant's death,
the death benefit shall be payable to his estate.
(d) Any consent by the Participant's spouse to waive any rights to
the death benefit must be in writing, must acknowledge the effect of such
waiver, and be witnessed by a Plan representative or a notary public.
Further, the spouse's consent must be irrevocable and must acknowledge the
specific nonspouse Beneficiary.
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<PAGE>
6.3 BENEFITS UPON DISABILITY
------------------------
In the event a Participant's employment is terminated due to a Total and
Permanent Disability prior to his Retirement Date or other termination of his
employment, all amounts credited to such Participant's Account shall become
fully Vested. In the event of a Participant's Total and Permanent Disability,
such Participant shall be distributed a benefit in accordance with Section VI.5
equal in value to the balance in the Participant's Accounts as of his Benefit
Commencement Date, such balance to be determined as of the Valuation Date
immediately preceding his Benefit Commencement Date.
6.4 BENEFITS UPON TERMINATION
-------------------------
(a) Each Participant whose employment is terminated for any reason
other than Total and Permanent Disability, retirement or death shall be
distributed a benefit in accordance with Section VI.5 equal in value to the
sum of his Vested interest in the balance of his Participant's Accounts as
of his Benefit Commencement Date, such balance to be determined as of the
Valuation Date immediately preceding his Benefit Commencement Date.
(b) For purposes of this Section, a Participant's Vested interest in
Participant's Matching Account and Participant's Non-Elective Account shall
be determined by such Participant's years of Vesting Service in accordance
with the following schedule:
Years of Vesting Service Vested Interest
------------------------ ---------------
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
(c) The computation of a Participant's nonforfeitable percentage of
his interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Article. In the event that the Plan is amended to
change or modify any vesting schedule, a Participant with a least three (3)
Years of Service as of the expiration date of the election period may elect
to have his nonforfeitable percentage computed under the Plan without regard
to such amendment. If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the amendment and
shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(d) Paragraph (b) above not withstanding, a Participant shall have a
100% Vested interest in his Participant's Matching Account and his
Participant's Non-Elective Account upon attainment of his Normal Retirement
Date.
(e) A Participant shall have a 100% Vested interest in his
Participant Elective Account, his Participant's Plan Transfer Account, and
his Participant's Rollover Account at all times.
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<PAGE>
(f) (1) If any Former Participant shall be reemployed by the Employer
before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close
of the first period of 5 consecutive 1-Year Break in Service
commencing after the distribution. In the event the Former
Participant does repay the full amount distributed to him, the
undistributed portion of the Partici pant's Account must be restored
in full, unadjusted by any gains or losses occurring subsequent to
the Anniversary Date or other valuation date preceding his
termination.
(3) If any Former Participant is reemployed after a 1-Year Break
in Service has occurred, Years of Service shall include Years of
Service prior to his 1-Year Break in Service subject to the following
rules:
(A) If a Former Participant has a 1-Year Break in Service,
his pre-break and post-break service shall be used for computing
Years of Service for eligibility and for vesting purposes only
after he has been employed for one (1) Year of Service following
the date of his reemployment with the Employer;
(B) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer Contributions shall lose credits otherwise allowable
under (i) above if his consecutive 1-Year Breaks in Service equal
or exceed the greater of (A) five (5) or (B) the aggregate number
of his pre-break Years of Service;
(C) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to pre-
break service shall not be increased as a result of post-break
service;
(D) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded pursuant to
(ii) above completes one (1) Year of Service for eligibility
purposes following his reemployment with the Employer, he shall
participate in the Plan retroactively from his date of
reemployment;
(E) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded pursuant to
(ii) above completes one (1) Year of Service for eligibility
purposes following his reemployment with the Employer (a 1-Year
Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively from
his reemployment commencement date.
6.5 DISTRIBUTION OF BENEFITS
------------------------
(a) Payment of Participant's benefit hereunder shall be made as soon
as administratively feasible after the Valuation Date coincident or next
succeeding the date the Participant or his Beneficiary becomes entitled to a
benefit pursuant to Sections VI.1, VI.2, VI.3 or VI.4.
(b) The Administrator shall direct the Trustee to distribute to the
Participant or his Beneficiary any amount to which he is entitled under the
Plan in one lump-sum payment.
(c) A Participant's benefit may not be paid without the Participant's
written consent or, if the Participant is deceased, the Participant's
surviving spouse's written consent, if the value exceeds or has ever
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<PAGE>
exceeded $3,500 at the time of any prior distribution. Written consent of
the Participant or the Participant's spouse to the distribution must be
obtained not more than 90 days before commencement of the distribution. The
foregoing shall not apply with respect to distributions that are required
under Section VI.5.(d).
If the value of a Participant's benefit does not exceed and has never
exceeded $3,500 at the time of any prior distribution, the Administrator may
direct the Trustee to cause the entire benefit to be paid to such
Participant without regard to Participant's election or the consent of the
spouse .
(d) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits shall be made in accordance with
the following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder (including Regulation Section
1.401(a)(9)-2):
(1) A Participant's benefits shall be distributed to him not
later than April 1st of the calendar year following the later of (i)
the calendar year in which the Participant attains age 70 1/2 or (ii)
the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during the
5-plan-year period ending in the calendar year in which he attains
age 70 1/2 or, in the case of a Participant who becomes a "five (5)
percent owner" during any subsequent Plan Year, clause (ii) shall no
longer apply and the required beginning date shall be the April 1st
of the calendar year following the calendar year in which such
subsequent Plan Year ends. Alternatively, distributions to a
Participant must begin no later than the applicable April 1st as
determined under the preceding sentence and must be made over the
life expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with
Regulations. For Plan Years begin ning after December 31, 1988,
clause (ii) above shall not apply to a Participant unless the Partici
pant had attained age 70 1/2 before January 1, 1988, and was not a
"five (5) percent owner" at any time during the Plan Year ending with
or within the calendar year in which the Participant attained age 66
1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
-----------------------------------
(a) The death benefit payable pursuant to Section VI.2 shall be paid
to the Participant's Beneficiary as soon as administratively feasible after
the Valuation Date coincident with or next succeeding the date of the
Participant's death by one lump-sum payment in cash.
(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance
with the following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest has begun in
accordance with a method selected in Section VI.5 and the Participant dies
before his entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as rapidly as under
the method of distribution selected pursuant to Section VI.5 as of his date
of death.
(c) If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before distributions are
deemed to have begun pursuant to Regulations, then his death benefit shall
be distributed to his Beneficiaries by December 31 of the calendar year in
which the fifth anniversary of his date of death occurs.
(d) The 5-year distribution requirement of Section VI.6.(c) shall not
apply to any portion of the deceased Participant's interest which is payable
to or for the benefit of a designated
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<PAGE>
Beneficiary. In such event, such portion may be distributed over a period
not extending beyond the life expectancy of such designated Beneficiary
provided such distribution begins not later than December 31 of the calendar
year immediately following the calendar year in which the Participant died.
In the event the Participant's spouse is his Beneficiary, the
requirement that distributions commence within one year of a Participant's
death shall not apply. In lieu thereof, such distribution must commence on
or before the later of: (1) December 31 of the calendar year immediately
following the calendar year in which the Participant died; or (2) December
31 of the calendar year in which the Participant would have attained age
seventy and one-half (70 1/2). If the surviving spouse dies before the
distributions to such spouse begin, then the 5-year distribution requirement
of Section VI.6.(c) shall apply as if the spouse were the Participant.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
-----------------------------------
Except as limited by Sections VI.5 and VI.6, whenever the Trustee is to make
a distribution or to commence a series of payments on a Benefit Commencement
Date, the distribution or series of payments may be made or begun on such date
or as soon thereafter as is practicable, but in no event later than 180 days
after a Valuation Date. Unless a Participant elects in writing to defer the
receipt of benefits, (such election may not result in a death benefit that is
more than incidental), the payment of benefits shall begin not later than the
60th day after the close of the Plan Year in which the latest of the following
events occurs:
(a) the date on which the Participant attains the earlier of age 65
or the Normal Retirement Age specified herein,
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or
(c) the date the Participant terminates his service with the
Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
----------------------------------
In the event a distribution is to be made to a minor, then the
Administrator may, in the Administrator's sole discretion, direct that such
distribution be paid to the legal guardian, or if none, to a parent of such
Beneficiary or a responsible adult with whom the Beneficiary maintains his
residence, or to the custodian for such Beneficiary under the Uniform Gift to
Minors Act or Gift to Minors Act, if such is permitted by the laws of the state
in which said Beneficiary resides. A payment to such legal guardian, parent or
responsible adult shall fully discharge the Trustee, Employer, and Plan from
further liability on account thereof.
6.9 UNCLAIMED BENEFITS
------------------
In the case of a benefit payable on behalf of a Participant, if the
Administrator is unable to locate the Participant or beneficiary to whom such
benefit is payable within two years of the date on which such benefit first
became payable, upon the Administrator's determination thereof, such benefit
shall be forfeited, held in a suspense account and applied to reduce Employer
Contributions next coming due or, pending resumption of Employer Matching
Contributions, available for allocation to the Participants' Accounts as of the
end of the Plan Year in which the Forfeiture occurred. For all Valuation Dates
prior to such application or allocation, forfeited amounts held in the suspense
account shall participate in allocations of the net income (or net loss) of the
Trust Fund. Notwithstanding the foregoing, if subsequent to any such forfeiture
the Participant or Beneficiary to whom such benefit is payable makes a valid
claim for such benefit, such forfeited benefit shall be restored to the Plan in
the manner provided in Section IV.4.(c).
6.10 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
-----------------------------------------
(a) All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore,
a distribution to an "alternate payee" shall be permitted if such
distribution is authorized by a "qualified domestic relations order," even
if the affected Participant has not reached the "earliest retirement
- 33 -
<PAGE>
age" under the Plan. For the purposes of this Section, "alternate payee,"
"qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
(b) In accordance with uniform and nondiscriminatory procedures
established by the Administrator from time to time, the Administrator upon
the receipt of a domestic relations order which seeks to require the
distribution of a Participant's Account in whole or in part to an "alternate
payee" shall:
(1) promptly notify the Participant and such "alternate payee" of
the receipt of such order and of the procedure which the
Administrator will follow to determine whether such order constitutes
a "qualified domestic relations order"; and
(2) determine whether such order constitutes a "qualified
domestic relations order," notify the Participant and such "alternate
payee" of the results of that determination and, if the Administrator
determines that such order constitutes a "qualified domestic
relations order":
(A) transfer such amounts, if any, as the Administrator
determines necessary or appropriate from the Participant's
Account to a special Account for such "alternate payee" which
shall be invested in accordance with Section VII.2 as if the
"alternate payee" were a Participant with respect to the special
Account; and
(B) make such distributions to such "alternate payee" as
the Administrator deems appropriate under the terms of such order
in accordance with Code Section 414(p).
The determinations and distributions made by, or at the discretion
of, the Administrator under this Section VI.10.(b) shall be final and
binding on the Participant and on all other persons interested in such
order.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
---------------------------------
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan Year up
to 100% of his Participant's Elective Account valued as of the last
Valuation Date or other valuation date the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Withdrawal under this
Section shall be authorized only if the distribution is on account of:
(1) Medical expenses described in Code Section 213(d) incurred by
the Participant, his spouse, or any of his dependents (as defined in
Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next semester or quarter of post-
secondary education for the Participant, his spouse, children, or
dependents; or
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such other
facts as are known to the Administrator, determines that all of the
following conditions are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Employer;
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<PAGE>
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's Elective Contributions and any
voluntary contributions will be suspended for at least twelve (12)
months after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer,
provide that the Participant may not make Elective Contributions for
the Participant's taxable year immediately following the taxable year
of the hardship distribution in excess of the applicable limit under
Code Section 402(g) for such next taxable year less the amount of
such Participant's Elective Contributions for the taxable year as of
the hardship distribution.
6.12 PAYMENT OF DISTRIBUTION DIRECTLY TO ELIGIBLE RETIREMENT PLAN
------------------------------------------------------------
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the
Administrator, 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) For purposes of this Section the following definitions shall
apply:
(1) "Eligible Rollover Distribution": An Eligible Rollover
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) "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.
(3) "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.
(4) "Direct Rollover": A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
(c) In the event that a Distributee, within thirty (30) days after
receiving the explanation required by Section 402(f) of the Code, does not
affirmatively elect a Direct Rollover under paragraph (a) above, the
Distributee shall be deemed to have elected not to have any portion of the
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan.
- 35 -
<PAGE>
ARTICLE 7
TRUSTEE
7.1 TRUST AGREEMENT
---------------
The Company has entered into a Trust Agreement governing the administration
of the Trust, the provisions of which are herein incorporated by reference as
fully as if set out herein.
7.2 INVESTMENT FUNDS
----------------
The Trustee (or the Investment Manager if so directed) shall divide the
Trust Fund into Investment Funds as the Administrator may approve for investment
purposes.
Designation to each Investment Fund by the Participant shall be in 10%
increments. At any time, up to four (4) times during any Plan Year, a
Participant may change his designated Investment Fund for future contributions
and change the balance from one Investment Fund to another Investment Fund. The
Administrator shall make necessary rules and regulations to implement such
change of Investment Fund directions pursuant to this paragraph.
7.3 BENEFITS PAID SOLELY FROM TRUST FUND
------------------------------------
All of the benefits to be paid under Article VI shall be paid by the Trustee
out of the Trust Fund to be ad ministered under the Trust Agreement. No
Fiduciary shall be responsible or liable in any manner for payment of any such
benefits, and all Participants hereunder shall look solely to such Trust Fund
and to the adequacy thereof for the payment of any such benefits of any nature
or kind which may at any time be payable hereunder.
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
----------------------------------------
(a) At the direction of the Administrator, the Trustee shall, from
time to time, in accordance with the terms of the Plan, make payments out of
the Trust Fund. The Trustee shall not be responsible in any way for the
application of such payments.
(b) In the event that any distribution or payment directed by the
Administrator shall be mailed by the Trustee to the person specified in such
direction at the latest address of such person filed with the Administrator,
and shall be returned to the Trustee because such person cannot be located
at such address, the Trustee shall promptly notify the Administrator of such
return. Upon the expiration of sixty (60) days after such notification, such
direction shall become void and unless and until a further direction by the
Ad ministrator is received by the Trustee with respect to such distribution
or payment, the Trustee shall there after continue to administer the Trust
as if such direction had not been made by the Administrator. The Trustee
shall not be obligated to search for or ascertain the whereabouts of any
such person.
7.5 LOANS TO PARTICIPANTS
---------------------
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries under the following circumstances:
(1) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis;
(2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to
other Participant and Beneficiaries;
(3) loans shall bear a reasonable rate of interest;
(4) loans shall be secured by fifty percent (50%) of the
Participant's nonforfeitable interest in his accounts under the Plan;
- 36 -
<PAGE>
(5) the principal amount of a loan shall not be less than
$1,000;
(6) a loan shall become due and payable in full in the event
that the Participant's employment as an Employee terminates for any
reason, unless such Participant remains a "party-in-interest" (as
defined in Section 3(14) of the Act) with respect to the Plan
following his termination of employment; or, in lieu of such
acceleration, the loan, at the discretion of the Administrator, shall
be cancelled and the amount otherwise distributable to such
Participant under the Plan shall be reduced by the amount of the then
outstanding principal balance of the loan and accrued interest;
(7) prepayment of a loan is permitted as of the last day of any
month (the "payment month"), provided that prepayments must be for
the entire outstanding balance of the loan plus accrued interest to
the date of prepayment;
(8) a loan initiation fee shall be deducted from the proceeds of
a loan;
(9) an annual loan maintenance fee, if assessed by the
Administrator, shall be deducted from the Participant's account;
(10) loans shall provide for repayment over a reasonable period
of time; and
(11) no more than one loan shall be made under this Plan to a
Participant or Beneficiary at any one time, and a subsequent loan
shall not be made until the end of the one-year period following the
date the Participant or Beneficiary repays his immediately preceding
loan.
(b) Loans made pursuant to this Section (when added to the highest
outstanding balance, during the one-year period prior to the date of the
loan, of all other loans made by the Plan to the Participant) shall be
limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant during
the one year period ending on the day before the date on which such
loan is made, over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan.
(c) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to exceed five (5)
years. However, loans 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.
(d) Default under a loan shall occur if a payment specified in the
promissory note executed in connection with the loan is not made within the
period specified for such payment in the note and if any other of the terms
and conditions of the loan and in the accompanying promissory note are
breached. Upon default, the loan shall become due and payable in full, and
the terms of paragraph (a)(6) shall apply as if the Participant terminated
employment and did not remain a "party-in-interest" with respect to the
Plan.
(e) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such program shall be established in writing and
must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
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<PAGE>
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will
be taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated by
reference and made a part of the Plan. Furthermore, such Participant loan
program may be modified or amended in writing from time to time without the
necessity of amending this Section.
ARTICLE 8
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
---------
The Employer shall have the right at any time to amend the Plan. No
amendment shall authorize or permit any part of the Trust Fund (other than such
part as is required to pay taxes and administration expenses) to be used for or
diverted to purposes other than for the exclusive benefit of the Participants or
their Beneficiaries or estates; no such amendment shall cause any reduction in
the amount credited to the account of any Participant or cause or permit any
portion of the Trust Fund to revert to or become the property of the Employer;
and no such amendment that affects the rights, duties, or responsibilities of
the Administrator may be made without the Administrator's written consent. Any
such amendment shall become effective as provided therein upon its execution.
The Trustee shall not be required to execute any such amendment unless the
amendment affects the duties of the Trustee hereunder.
For the purposes of this Section, a Plan amendment which has the effect of
(1) eliminating or reducing an early retirement benefit or a retirement-type
subsidy, (2) eliminating an optional form of benefit (as provided in
Regulations), or (3) restricting, directly or indirectly, the benefit provided
to any Participant prior to the amendment shall be treated as reducing the
amount credited to the account of a Participant except that an amendment
described in clause (2) (other than an amendment having an effect described in
clause (1)) shall not be treated as reducing the amount credited to the account
of a Participant to the extent so provided in the Regulations. Any plan
amendment that modifies distribution options in a non-discriminatory manner
shall not be treated as reducing the amount credited to the account of a
Participant.
8.2 TERMINATION
-----------
The Employer shall have the right at any time to terminate the Plan by
delivering to the Trustee and Ad ministrator written notice of such
termination. A complete discontinuance of the Employer's contributions to the
Plan shall be deemed to constitute a termination. Upon any termination (full or
partial) or complete discontinuance of contributions, all amounts credited to
the affected Participants' Accounts shall continue to be 100% vested and all
unallocated amounts shall be allocated to the accounts of all Participants in
accordance with the provisions hereof. Upon such termination of the Plan, the
Employer, by written notice to the Trustee and Administrator, may direct either:
(a) complete distribution of the assets in the Trust Fund to the
Participants, in cash or in kind, in a manner consistent with the
requirements of Sections VI.5 and VI.6; or
- 38 -
<PAGE>
(b) continuation of the Trust created by this agreement and the
distribution of benefits at such time and in such manner as though the Plan
had not been terminated;
further provided that any distribution from the Participant's Elective
Account shall be subject to the restrictions imposed by Section 4.2(d).
8.3 MERGER OR CONSOLIDATION
-----------------------
This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to, any other Plan and Trust only if the
benefits that would be received by a Participant of this Plan, in the event of a
termination of the Plan immediately after such transfer, merger, or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger, or
consolidation.
ARTICLE 9
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
--------------------
This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
9.2 ALIENATION
----------
(a) Subject to the exceptions provided below, no benefit that 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.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of
the Plan. At the time a distribution is to be made to or for a Participant's
or Beneficiary's benefit, such proportion of the amount distributed as shall
equal such indebted ness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, 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 so paid in whole or part from his
Participant's Account. If the Participant or Beneficiary does not agree that
the indebtedness is a valid claim against his Participant's Account, he
shall be entitled to a review of the validity of the claim in accordance
with procedures provided in Sections II.9 and II.10.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator under the provisions
of the Retirement Equity Act of 1984. The Administrator shall establish a
written procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders. Further,
to the extent provided under a "qualified domestic relations order," a
former spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
- 39 -
<PAGE>
9.3 CONSTRUCTION OF PLAN
--------------------
This Plan and Trust shall be construed and enforced according to the Act
and the laws of the State of Delaware, other than its laws respecting choice of
law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
-----------------
Wherever any words are used herein in the masculine, feminine, or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.5 LEGAL ACTION
------------
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
--------------------------------------
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement or by any other means, for any
part of the corpus or income of any trust fund maintained pursuant to the
Plan or any funds contributed thereto to be used for, or diverted to,
purposes other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive contribution
under a mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the
Employer may demand repayment of such excessive contribution at any time
within one (1) year following the time of payment and the Trustees shall
return such amount to the Employer within the one (1) year period. Earnings
of the Plan attributable to the excess contributions may not be returned to
the Employer but any losses attributable thereto must reduce the amount so
returned.
9.7 BONDING
-------
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Section 412(a)(2) of the Act), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.8 RECEIPT AND RELEASE FOR PAYMENTS
--------------------------------
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such
- 40 -
<PAGE>
Participant, legal representative, Beneficiary, guardian, or committee, as a
condition precedent to such payment, to execute a receipt and release thereof in
such form as shall be determined by the Trustee or Employer.
9.9 ACTION BY THE EMPLOYER
----------------------
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.10 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
--------------------------------------------------
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the sole authority
to appoint and remove the Trustee and the Administrator, which may be provided
for under the Plan; to formulate the Plan's "funding policy and method"; and to
amend or terminate, in whole or in part, the Plan. The Administrator shall have
the sole responsibility for the administration of the Plan, which responsibility
is specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan. Each named Fiduciary warrants that
any directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information, or action. Furthermore, each named Fiduciary may rely
upon any such direction, information, or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information, or action. It is intended
under the Plan that each named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities, and obligations under the
Plan. No named Fiduciary shall guarantee the Trust Fund in any manner against
investment loss or depreciation in asset value. Any person or group may serve
in more than one Fiduciary capacity.
9.11 HEADINGS
--------
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.12 APPROVAL BY INTERNAL REVENUE SERVICE
------------------------------------
(a) Notwithstanding anything herein to the contrary, contributions to
this Plan are conditioned upon the initial qualification of the Plan under
Code Section 401(a). If the Plan receives an adverse determination with
respect to its initial qualification, then the Plan may return such
contributions to the Employer within one year after such determination,
provided the application for the determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in
which the Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, any contribution
by the Employer to the Trust Fund is conditioned upon the deductibility of
the contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1) year following a
final determination of the disallowance, whether by agreement with the
Internal Revenue Service or by final decision of a court of competent
jurisdiction, demand repayment of such disallowed contribution and the
Trustee shall return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
9.13 UNIFORMITY
----------
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
- 41 -
<PAGE>
ARTICLE 10
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
---------------------------
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any other corporation or entity, whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
---------------------------------------
(a) Each such Participating 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 Participating
Employers, as well as all increments thereof.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under
the Plan, and all amounts credited to such Participant's Account as well as
his accumulated service time with the transferor or predecessor, and his
length of participation in the Plan, shall continue to his credit.
(d) Should an Employee of one ("First") Employer be transferred to an
associated ("Second") Employer (the Employer, an affiliate or subsidiary),
such transfer shall not cause his Account balance (generated while an
Employee of "First" Employer) in any manner or by any amount to be
forfeited. Such Employee's Participant Account balance for all purposes of
the Plan, including length of service, shall be considered as though he had
always been employed by the "Second" Employer and as such had received
contributions, earnings or losses, and appreciation or depreciation in value
of assets totalling the amount so transferred.
(e) Any expenses of the Trust which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the
credit of all Participants.
10.3 DESIGNATION OF AGENT
--------------------
Each Participating 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 Administrator for the purpose of this Plan, each Participating 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 Participating Employer as related to
its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
------------------
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
- 42 -
<PAGE>
10.5 PARTICIPATING EMPLOYERS CONTRIBUTION
------------------------------------
All contributions made by a Participating Employer, as provided for in this
Plan, shall be determined separately and shall be paid to and held by the
Trustee for the exclusive benefit of the Employees of such Participating
Employer and the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. On the basis of the information furnished by the
Administrator, the Trustee shall keep separate books and records concerning the
affairs of each Participating Employer hereunder and as to the accounts and
credits of the Employees of each Partic ipating Employer. The Trustee may, but
need not, register Contracts so as to evidence that a particular Participating
Employer is the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing Employer
shall immediately notify the Trustee thereof.
10.6 AMENDMENT
---------
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall require written notice to each and every
Participating Employer and with the consent of the Trustee where such consent is
necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
-------------------------------
Any Participating Employer shall be permitted to discontinue or revoke its
participation in the Plan. At the time of any such discontinuance or revocation,
satisfactory evidence thereof and of any applicable conditions imposed shall be
delivered to the Trustee. The Trustee shall thereafter transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the Participants of
such Participating Employer to such new Trustee as shall have been designated by
such Participating Employer, in the event that it has established a separate
qualified plan for its Employees. If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating Employer
pursuant to the provisions of the Trust Agreement. In no such event shall any
part of the corpus or income of the Trust as it relates to such Participating
Employer be used for or diverted for purposes other than for the exclusive
benefit of the Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
-------------------------
The Administrator shall have authority to make any and all necessary rules
or regulations, binding upon all Participating Employers and all Participants,
to effectuate the purpose of this Article.
ARTICLE 11
TOP-HEAVY STATUS
11.1 ARTICLE CONTROLS
----------------
Any Plan provisions to the contrary notwithstanding, the provisions of this
Article shall control to the extent required to cause the Plan to comply with
the requirements imposed under Code Section 416.
11.2 DEFINITIONS
-----------
For purposes of this Article, the following terms and phrases shall have
these respective meanings:
(a) Account Balance: As of any Valuation Date, the aggregate amount
---------------
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Employer or an Affiliated Employer
(excluding employee contributions which were deductible within the meaning
of section 219 of the Code and rollover or transfer contributions made after
December 31, 1983 by or on behalf of such individual to such plan from
another qualified plan sponsored by an entity other than the Employer or an
Affiliated Employer), increased by (1) the aggregate distributions made to
such individual from such plan during a five-year period ending on the
Determination Date and (2) the amount of any contributions due as of the
Determination Date immediately following such Valuation Date.
- 43 -
<PAGE>
(b) Accrued Benefit: As of any Valuation Date, the present value
---------------
(computed on the basis of the Assumptions) of the cumulative accrued benefit
(excluding the portion thereof which is attributable to employee
contributions which were deductible pursuant to section 219 of the Code, to
rollover or transfer contributions made after December 31, 1983 by or on
behalf of such individual to such plan from another qualified plan sponsored
by an entity other than the Employer or an Affiliated Employer, to
proportional subsidies or to ancillary benefits) of an individual under a
qualified defined benefit plan maintained by the Employer or an Affiliated
Employer increased by (1) the aggregate distributions made to such
individual from such plan during a five-year period ending on the
Determination Date and (2) the estimated benefit accrued by such individual
between such Valuation Date and the Determination Date immediately following
such Valuation Date. Solely for the purpose of determining top-heavy status,
the Accrued Benefit of an individual shall be determined under (1) the
method, if any, that uniformly applies for accrual purposes under all
qualified defined benefit plans maintained by the Employer or an Affiliated
Employer, or (2) if there is no such method, as if such benefit accrued not
more rapidly than under the slowest accrual rate permitted under section
411(b)(1)(C) of the Code.
(c) Aggregation Group: The group of qualified plans maintained by
-----------------
the Employer and each Affiliated Employer consisting of (1) each plan in
which a Key Employee participates and each other plan which enables a plan
in which a Key Employee participates to meet the requirements of sections
401(a)(4) or 410 of the Code, or (2) each plan in which a Key Employee
participates, each other plan which enables a plan in which a Key Employee
participates to meet the requirements of sections 401(a)(4) or 410 of the
Code and any other plan which the Employer elects to include as a part of
such group; provided, however, that the Employer may not elect to include a
plan in such group if its inclusion would cause the group to fail to meet
the requirements of sections 401(a)(4) or 410 of the Code.
(d) Assumptions: The interest rate and mortality assumptions
-----------
specified for top-heavy status determination purposes in any defined
benefit plan included in the Aggregation Group including the Plan.
(e) Determination Date: For the first Plan Year of any plan, the
------------------
last day of such Plan Year and for each subsequent Plan Year of such plan,
the last day of the preceding Plan Year.
(f) Key Employee: A "key employee" as defined in section 416(i) of
------------
the Code and the Treasury Regulations thereunder.
(g) Plan Year: With respect to any plan, the annual accounting
---------
period used by such plan for annual reporting purposes.
(h) Remuneration: Compensation within the meaning of section
------------
415(c)(3) of the Code, as limited by section 401(a)(17) of the Code for
Plan Years beginning after December 31, 1988.
(i) Valuation Date: With respect to any Plan Year of any defined
--------------
contribution plan, the most recent date within the twelve-month period
ending on a Determination Date as of which the trust fund established under
such plan was valued and the net income (or loss) thereof allocated to
participants' accounts. With respect to any Plan Year of any defined
benefit plan, the most recent date within a twelve-month period ending on a
Determination Date as of which the plan assets were valued for purposes of
computing plan costs for purposes of the requirements imposed under section
412 of the Code.
11.3 TOP-HEAVY STATUS
----------------
The Plan shall be deemed to be top-heavy for a Plan Year, if, as of the
Determination Date for such Plan Year, (1) the sum of Account Balances of
Participants who are Key Employees exceeds 60% of the sum of Account Balances of
all Participants unless an Aggregation Group including the Plan is not top-heavy
or (2) an Aggregation Group including the Plan is top-heavy. An Aggregation
Group shall be deemed to be top-heavy as of a Determination Date if the sum
(computed in accordance with section 416(g)(2)(B) of the Code and the Treasury
Regulations promulgated thereunder) of (1) the Account Balances of Key Employees
under all defined contribution plans included in the
- 44 -
<PAGE>
Aggregation Group and (2) the Accrued Benefits of Key Employees under all
defined benefit plans included in the Aggregation Group exceeds 60% of the sum
of the Account Balances and the Accrued Benefits of all individuals under such
plans. Notwithstanding the foregoing, the Account Balances and Accrued Benefits
of individuals who are not Key Employees in any Plan Year but who were Key
Employees in any prior Plan Year shall not be considered in determining the top-
heavy status of the Plan for such Plan Year. Further, notwithstanding the
foregoing, the Account Balances and Accrued Benefits of individuals who have not
performed services for the Employer at any time during the five-year period
ending on the applicable Determination Date shall not be considered.
11.4 TERMINATION OF TOP-HEAVY STATUS
-------------------------------
If the Plan has been deemed to be top-heavy for one or more Plan Years and
thereafter ceases to be top-heavy, the provisions of this Article shall cease to
apply to the Plan effective as of the Determination Date on which it is
determined to no longer be top-heavy.
11.5 EFFECT OF ARTICLE
-----------------
Notwithstanding anything contained herein to the contrary, the provisions
of this Article shall automatically become inoperative and of no effect to the
extent not required by the Code or the Act.
IN WITNESS WHEREOF, this Plan has been executed this ___ day of __________,
1995 effective as of the day and year first above written.
"EMPLOYER"
MAIL-WELL CORPORATION
By: _________________________
Name: _________________________
Title:_________________________
ATTEST:____________________________________
EXECUTION PAGE TO THE
MAIL-WELL CORPORATION
401(k) SAVINGS RETIREMENT PLAN
Amended and Restated, Effective January 1, 1995
- 45 -
<PAGE>
FIRST AMENDMENT TO THE MAIL-WELL CORPORATION
401(k) SAVINGS RETIREMENT PLAN
Amended and Restated, Effective January 1, 1995
W I T N E S S E T H:
-------------------
WHEREAS, Mail-Well I Corporation (the "Employer") maintains the Mail-Well
Corporation 401(k) Savings Retirement Plan (the "Plan"); and
WHEREAS, the Employer, pursuant to Section 8.1 of the Plan, has the right
to amend the Plan from time to time subject to certain limitations.
NOW, THEREFORE, in order to make various revisions desired by the Employer,
the Plan is hereby amended in the following manner:
a. In accordance with the change in the Employer's name from Mail-Well
Corporation to Mail-Well I Corporation, the Plan is renamed the Mail-Well I
Corporation 401(k) Savings Retirement Plan, and any and all references in
the Plan to "Mail-Well Corporation" or "Employer" are references to Mail-
Well I Corporation.
b. Effective as of the date this Amendment is executed, Section 1.63 is hereby
amended in its entirety to read as follows:
1.63 "Year of Service" means, for purposes of eligibility for
---------------
participation, the computation period of twelve (12) consecutive months,
during which an Employee has at least 1,000 Hours of Service. For all
other purposes, Year of Service means twelve (12) consecutive Months of
Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an
Hour of Service. The participation computation period beginning after a 1-
Year Break in Service shall be measured from the date on which an Employee
again performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of the date on
which the Employee first performed an Hour of Service.
For vesting and all other purposes, the computation period shall be
the twelve month period ending on the anniversary of the date on which the
Employee first performed an Hour of Service. For purposes of (i) vesting
and (ii) eligibility to participate in the Plan, years of service prior to
the Effective Date of this Plan attributable to an Employee in connection
with Hours of Service rendered for and related to the envelope
manufacturing assets of G-P Envelope Holdings, Inc. acquired in the
Acquisition shall be considered under this Plan. In addition, an Employee
shall receive vesting credit for service recognized on his or her behalf
under the Pavey Envelope and Tag Corporation Employees' Retirement Plan
prior to the Effective Date of this Plan. The vesting computation period
beginning after a 1-year Break in Service shall be measured from the date
on which an Employee again performs an Hour of Service. Years of Service
with any Affiliated Employer shall be recognized.
For purposes of vesting and eligibility to participate in the Plan,
Years of Service prior to January 1, 1995 attributable to an Employee in
connection with Hours of Service rendered for and related to American
Envelope Company shall be recognized under this Plan. Notwithstanding the
foregoing, such an Employee may begin participation in the Plan no earlier
than January 1, 1995.
c. Effective as of June 1, 1996, Section 4.1 is hereby amended in its entirety
to read as follows:
4.1 EMPLOYER CONTRIBUTION
---------------------
For each Plan Year, the Employer shall contribute to the Plan in cash
or in such property as is acceptable to the Trustee:
<PAGE>
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed the Elective Contributions; plus
(b) A contribution, if any, equal to 50% of each Participant's
Elective Contribution, which amount shall be deemed the Matching
Contribution. In applying the matching percentage in the previous
sentence, only Elective Contributions up to 6% of Compensation shall
be considered. Notwithstanding the foregoing, with respect to a
Participant whose employment is governed by the terms of a collective
bargaining agreement (as described in Section 1.14), the Matching
Contribution shall be determined under the terms of such collective
bargaining agreement; plus
(c) A discretionary amount, if any, as may be determined by the
Employer's Board of Directors or its delegatees, which amount shall be
deemed the Employer's Non-Elective Contribution.
(d) For each month during the Plan Year, the Employer shall
contribute $68 on behalf of each employee of Quality Park Products,
Inc. who is a member of the Graphic Communications International
Union, Local 527-S ("Quality Park Union Employee") and who has been an
employee of Quality Park Products, Inc. for at least ninety days,
which amount shall be allocated to each such Quality Park Union
Employee's Account. This contribution shall be made whether or not a
Quality Park Union Employee has elected to defer any amounts pursuant
to Section 4.2(a).
(e) The Employer Contributions for any Plan Year, subject to the
limitation provided above, shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404.
(f) To the extent necessary to provide the top heavy minimum
allocations as set forth in Section 4.4(f), the Employer shall make a
contribution even if it exceeds the amount which is deductible under
Code Section 404.
d. Effective as of the date this Amendment is executed, Section 6.4(a) is
hereby amended in its entirety to read as follows:
(a) Each Participant whose employment is terminated for any
reason other than Total and Permanent Disability pursuant to Section
6.3, retirement pursuant to Section 6.1, or death pursuant to Section
6.2 shall be distributed a benefit in accordance with Section 6.5
equal in value to the sum of his Vested interest in the balance of his
Participant's Accounts as of his Benefit Commencement Date, such
balance to be determined as of the Valuation Date immediately
preceding his Benefit Commencement Date.
e. Effective as of the date this Amendment is executed, Section 6.11(c) is
hereby added to the Plan as follows:
(c) Notwithstanding the above, distributions from the
Participant's Elective Account shall be limited solely to the
Participant's total Deferred Compensation as of the date of
distribution, reduced by the amount of any previous distributions
pursuant to this Section.
f. Effective as of the date this Amendment is executed, Section 8.1 is hereby
amended in its entirety to read as follows:
8.1 AMENDMENT
The Employer shall have the right at any time to amend the Plan. No
amendment shall authorize or permit any part of the Trust Fund (other than
such part as is required to pay taxes and administration expenses) to be
used for or diverted to purposes other than for the exclusive benefit of
the Participants or their Beneficiaries or estates; and no such amendment
shall cause any reduction in the amount credited to the account of any
Participant or cause or permit any portion of the Trust Fund to revert to
or become the property
- 2 -
<PAGE>
of the Employer. Any such amendment shall become effective as
provided therein upon its execu tion. The Trustee shall not be required
to execute any such amendment unless the amendment affects the duties of
the Trustee hereunder.
For the purposes of this Section, a Plan amendment which has the
effect of (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy, (2) eliminating an optional form of benefit (as
provided in Regulations), or (3) restricting, directly or indirectly, the
benefit provided to any Participant prior to the amendment shall be treated
as reducing the amount credited to the account of a Participant except that
an amendment described in clause (2) (other than an amendment having an
effect described in clause (1)) shall not be treated as reducing the amount
credited to the account of a Participant to the extent so provided in the
Regulations. Any plan amendment that modifies distribution options in a
non-discriminatory manner shall not be treated as reducing the amount
credited to the account of a Participant.
g. Effective as of the date this Amendment is executed, Section 10.1 is hereby
amended in its entirety to read as follows:
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer, any other corporation or entity, whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions hereof,
and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such
Participating Employer.
h. Effective as of the date this Amendment is executed, Section 10.6 is hereby
amended in its entirety to read as follows:
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall not require the written action of
each and every Participating Employer. Amendment of this Plan shall be
made with the consent of the Trustee where such consent is necessary in
accordance with the terms of this Plan.
IN WITNESS WHEREOF, the Employer has executed this First Amendment to the
Mail-Well Corporation 401(k) Savings Retirement Plan on this ___________ day of
_________________, 1996.
MAIL-WELL I CORPORATION
By:
_____________________________
Name:
____________________________
Title:
___________________________
CONSENTED TO:
BENEFITS ADMINISTRATION COMMITTEE
OF MAIL-WELL I CORPORATION
Trustee
By: ____________________________
- 3 -
<PAGE>
EXHIBIT 4.4
Shepard Poorman Communications Corporation Stock Bonus Plan
<PAGE>
SHEPARD POORMAN
COMMUNICATIONS CORPORATION
STOCK BONUS PLAN
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I GENERAL PROVISIONS............................................................................... 1
Section 1.01. Designation and Purpose......................................................... 1
-----------------------
Section 1.02. Trust Agreement................................................................. 1
---------------
ARTICLE II DEFINITIONS...................................................................................... 1
Section 2.01. Terms Defined................................................................... 1
-------------
Section 2.02. Rules of Construction........................................................... 10
---------------------
ARTICLE III ELIGIBILITY AND PARTICIPATION.................................................................... 11
Section 3.01. Date of Participation........................................................... 11
---------------------
Section 3.02. Notification of Eligibility..................................................... 11
---------------------------
Section 3.03. Completion of Forms by Participants and Beneficiaries........................... 11
-----------------------------------------------------
Section 3.04. Cessation of Participation...................................................... 11
--------------------------
ARTICLE IV CONTRIBUTIONS.................................................................................... 11
Section 4.01. Trust Assets.................................................................... 11
------------
Section 4.02. Salary Reduction Contributions.................................................. 12
------------------------------
Section 4.03. Limitation on Salary Reduction Contributions.................................... 12
--------------------------------------------
Section 4.04. Matching Contributions.......................................................... 14
----------------------
Section 4.05. Limitation on Matching Contributions............................................ 14
------------------------------------
Section 4.06. Basic Contributions............................................................. 15
-------------------
Section 4.07. Bonus Contributions............................................................. 15
-------------------
Section 4.08. Rollover Contributions.......................................................... 16
----------------------
Section 4.09. Minimum Contribution Requirement................................................ 16
--------------------------------
Section 4.10. Nondiversion and Exclusive Benefits............................................. 16
-----------------------------------
ARTICLE V INVESTMENTS AND ACCOUNTS......................................................................... 16
Section 5.01. Participants' Accounts.......................................................... 16
----------------------
Section 5.02. Investment of Salary Reduction Accounts and Rollover Accounts................... 17
-------------------------------------------------------------
Section 5.03. Investment of Matching Accounts, Basic Accounts and Bonus Accounts.............. 17
------------------------------------------------------------------
Section 5.04. Acquisition and Disposition of Company Stock.................................... 17
--------------------------------------------
Section 5.05. Acquisition Loans............................................................... 18
-----------------
Section 5.06. Sale of Company Stock under Section 1042........................................ 20
----------------------------------------
ARTICLE VI VALUATION AND ACCOUNTING......................................................................... 21
Section 6.01. Valuation Dates................................................................. 21
---------------
Section 6.02. Valuation Standards............................................................. 21
-------------------
Section 6.03. General Method of Determining Values of Participants' Accounts.................. 22
--------------------------------------------------------------
Section 6.04. Allocation of Earnings.......................................................... 22
----------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
Section 6.05. Allocation of Dividends on Company Stock.......................................................... 23
----------------------------------------
Section 6.06. Leveraged Shares.................................................................................. 23
----------------
Section 6.07. Allocation of Leveraged Shares to Participants' Accounts.......................................... 23
--------------------------------------------------------
ARTICLE VII VESTING AND FORFEITURES..................................................................................... 24
Section 7.01. Nonforfeitability................................................................................. 24
-----------------
Section 7.02. Vesting of Accounts............................................................................... 24
-------------------
Section 7.03. Forfeitures....................................................................................... 25
-----------
ARTICLE VIII BENEFITS.................................................................................................... 26
Section 8.01. General........................................................................................... 26
-------
Section 8.02. Retirement Benefits............................................................................... 26
-------------------
Section 8.03. Disability Benefits............................................................................... 26
-------------------
Section 8.04. Termination Benefits.............................................................................. 27
--------------------
Section 8.05. Death Benefits.................................................................................... 28
--------------
Section 8.06. Beneficiaries..................................................................................... 28
-------------
Section 8.07. Permitted Withdrawals from Matching, Basic, Accounts Bonus and Rollover Accounts.................. 29
--------------------------------------------------------------------------------
Section 8.08. Permitted Withdrawals from Salary Reduction Account............................................... 29
---------------------------------------------------
Section 8.09. Loans to Participants............................................................................. 30
---------------------
Section 8.10. Other Distribution Rules Imposed by Federal Law................................................... 31
-----------------------------------------------
Section 8.11. Diversification................................................................................... 33
---------------
Section 8.12. Stock Rights and Protections...................................................................... 33
----------------------------
Section 8.13. Voting With Respect to Company Stock.............................................................. 34
------------------------------------
Section 8.14. Effect of Government Regulation on Payment of Benefits............................................ 35
------------------------------------------------------
Section 8.15. Inalienability of Benefits........................................................................ 35
--------------------------
Section 8.16. Payments for Benefit of Incompetents.............................................................. 35
------------------------------------
Section 8.17. Distribution of Leveraged Shares.................................................................. 35
--------------------------------
Section 8.18. Right of First Refusal............................................................................ 35
----------------------
Section 8.19. Direct Transfers.................................................................................. 36
----------------
ARTICLE IX ADMINISTRATION.............................................................................................. 36
Section 9.01. Administrator..................................................................................... 36
-------------
Section 9.02. Removal and Replacement of Committee Members...................................................... 36
--------------------------------------------
Section 9.03. Disqualification and Resignation.................................................................. 36
--------------------------------
Section 9.04. Chairman, Services, and Counsel................................................................... 36
-------------------------------
Section 9.05. Meetings.......................................................................................... 36
--------
Section 9.06. Quorum............................................................................................ 36
------
Section 9.07. Action Without Meeting............................................................................ 36
----------------------
Section 9.08. Notice to Trustee of Changes in Membership........................................................ 37
------------------------------------------
Section 9.09. Correction of Defects............................................................................. 37
---------------------
Section 9.10. Reliance Upon Legal Counsel....................................................................... 37
---------------------------
Section 9.11. Expenses.......................................................................................... 37
--------
Section 9.12. Indemnification................................................................................... 37
---------------
Section 9.13. Powers and Duties of Committee.................................................................... 37
------------------------------
Section 9.14. Matters Specifically Excluded from Jurisdiction................................................... 38
-----------------------------------------------
Section 9.15. Investment Manager................................................................................ 38
------------------
ARTICLE X CLAIMS PROCEDURES........................................................................................... 39
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
Section 10.01. Presentation of Claims........................................................................... 39
----------------------
Section 10.02. Denial of Claims................................................................................. 39
----------------
Section 10.03. Claimant's Right to Appeal Denial of Claim....................................................... 39
------------------------------------------
ARTICLE XI LIMITATIONS ON RIGHTS OF EMPLOYEES AND OTHER PERSONS....................................................... 40
Section 11.01. In General....................................................................................... 40
----------
Section 11.02. No Increase or Impairment of Other Rights........................................................ 40
-----------------------------------------
Section 11.03. Trust Sole Source of Benefits.................................................................... 40
-----------------------------
Section 11.04. Other Limitations of Liability................................................................... 40
------------------------------
ARTICLE XII PROVISIONS DESIGNED TO COMPLY WITH LIMITATIONS............................................................. 40
Section 12.01. Purpose and Construction of This Article......................................................... 40
----------------------------------------
Section 12.02. General Statement of Limitation.................................................................. 41
-------------------------------
Section 12.03. Special Limitation Pursuant to Code Section 415(e)............................................... 41
--------------------------------------------------
Section 12.04. Adjustments to Allocation of Contributions....................................................... 41
------------------------------------------
ARTICLE XIII AMENDMENT AND TERMINATION OF PLAN.......................................................................... 41
Section 13.01. Amendments in General............................................................................ 41
---------------------
Section 13.02. Amendments Necessary to Bring Plan into Compliance with the Code and ERISA....................... 42
--------------------------------------------------------------------------
Section 13.03. Amendments to Vesting Provisions................................................................. 42
--------------------------------
Section 13.04. Termination of Plan.............................................................................. 42
-------------------
Section 13.05. Effect of Termination on Trust................................................................... 43
------------------------------
Section 13.06. Payment of Benefits Upon Termination............................................................. 43
------------------------------------
Section 13.07. Post-Termination Powers of Trustee, Committee, Company, and Employer............................. 43
--------------------------------------------------------------------
ARTICLE XIV PROVISIONS RELATING TO TOP-HEAVY PLAN...................................................................... 43
Section 14.01. Construction of this Article..................................................................... 43
----------------------------
Section 14.02. Top-Heavy Determination.......................................................................... 43
-----------------------
Section 14.03. Special Rules Relating to Determination of Top-Heavy Status...................................... 44
-----------------------------------------------------------
ARTICLE XV MISCELLANEOUS PROVISIONS................................................................................... 45
Section 15.01. Merger, Consolidation, or Transfer of Assets or Liabilities...................................... 45
-----------------------------------------------------------
Section 15.02. No Duplication of Benefits....................................................................... 45
--------------------------
Section 15.03. Named Fiduciaries................................................................................ 45
-----------------
Section 15.04. Bonding.......................................................................................... 45
-------
Section 15.05. Prohibition Against Receipt of Transfers From Certain Qualified Plans............................ 45
---------------------------------------------------------------------
ARTICLE XVI OTHER EFFECTIVE DATES...................................................................................... 45
</TABLE>
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<PAGE>
SHEPARD POORMAN
COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
ARTICLE I
GENERAL PROVISIONS
Section 1.01. Designation and Purpose. This Plan is a continuation and
-----------------------
complete restatement of the Shepard Poorman Communications Corporation Employee
Stock Ownership Plan, originally effective March 1, 1987. Except as otherwise
specifically provided in the Plan, the effective date of this Plan, as restated,
is March 1, 1992. The purposes of the Plan are to assist Employees of the
Employer in the accumulation of funds for retirement and to enhance the interest
of Employees in the efficient and successful operation of the Employer. The
Plan consists of two portions. The portion of Plan assets invested in the Non-
ESOP Funds is intended to qualify as a profit sharing plan under Code
subsections 401(a), 401(k), and 501(a). The portion of Plan assets invested in
the ESOP Funds is intended to qualify as a stock bonus plan and an employee
stock ownership plan under the provisions of Code subsection 40 1 (a) and Code
paragraph 4975(e)(7).
Section 1.02. Trust Agreement. Effective as of the date of its execution,
---------------
the Company entered into a Trust Agreement providing for a Trust to support and
implement the operation of the Plan. The Trust Agreement, as amended from time
to time, is part of this Plan.
ARTICLE II
DEFINITIONS
Section 2.01. Terms Defined. As used in the Plan, the following words and
-------------
phrases, when capitalized, have the following meanings except when used in a
context that plainly requires a different meaning:
(a) "Account" means the record of a Participant's interest in the
Trust Assets.
(b) "Acquisition Loan" means a loan to the Trust that is made or
guaranteed by an Interested Party and is used to finance the purchase of
Company Stock by the Trustee. Where the context requires, the term
"Acquisition Loan" also refers to the agreement pursuant to which the
Acquisition Loan is made.
(c) "Active Participant" means a Participant who is an Eligible
Employee.
(d) "Aggregation Group" means a Required Aggregation Group or a
Permissive Aggregation Group.
(e) "Annual Addition" means, with respect to a Participant for a
Plan Year, the sum of the contributions and forfeitures allocated to a
Participant's Accounts for a Plan Year under the Plan and any other defined
contribution plan of the Employer (other than rollover contributions);
amounts allocated after March 31, 1984, to an individual medical account as
- 1 -
<PAGE>
defined in Code paragraph 415(l)(2) which is part of a pension or annuity
plan maintained by the Employer; and amounts derived from contributions
paid or accrued after March 31, 1984, which were attributable to post-
retirement medical benefits, allocated to the separate account of a Key
Employee under a welfare benefit fund, as defined in Code subsection
419(e), maintained by the Employer, except that:
(i) To the extent that Basic Contributions are used to repay an
Acquisition Loan, the amount of the Basic Contributions and
not the value of Leveraged Shares allocated to Participants'
Accounts as a result of the repayment shall be considered
Annual Additions.
(ii) For Plan Years with respect to which not more than one-third
of the Basic Contributions used to repay an Acquisition Loan
are allocated to Highly Compensated Participants,
forfeitures of Leveraged Shares and Basic Contributions used
to make interest payments on Acquisition Loans shall not
constitute Annual Additions.
(f) "Basic Account" means a Participant's Account attributable to
Basic Contributions.
(g) "Basic Contribution" means a contribution made to the Plan by the
Employer pursuant to Section 4.06.
(h) "Beneficiary" means the person or persons designated pursuant to
Section 8.06 to receive benefits under the Plan after a Participant's
death.
(i) "Board of Directors" means the Company's Board of Directors.
(j) "Bonus Account" means a Participant's Account attributable to
Bonus Contributions.
(k) "Bonus Contribution" means a contribution made to the Plan by the
Employer pursuant to Section 4.07.
(l) "Break in Service" means a Plan Year during which an Employee
completes 500 or fewer Hours of Service.
(m) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and interpretive rules and regulations.
(n) "Committee" means the Employee Benefits Committee established
pursuant to Article IX.
(o) "Company" means Shepard Poorman Communications Corporation.
(p) "Company Stock" means stock described in one of the following
Paragraphs:
(i) common stock issued by the Company that is readily tradable
on an established securities market;
- 2 -
<PAGE>
(ii) if there is no stock described in Paragraph (1), common
stock issued by the Company having a combination of voting
power and dividend rights equal to or in excess of (A) that
class of common stock of the Company having the greatest
voting power and (B) that class of common stock of the
Company having the greatest dividend rights; or
(iii) noncallable preferred stock that is convertible at any time
into stock that meets the requirements of Paragraph (1) or
(2), whichever is applicable, if the conversion is at a
conversion price that is reasonable as of the date the
preferred stock is acquired by the Plan. For purposes of
this Paragraph (3), preferred stock shall be treated as
noncallable if after the call there will be a reasonable
opportunity for a conversion that satisfies the requirements
of this Paragraph (3).
For purposes of this Subsection, the term "Company" includes any
corporation that is a member or a controlled group of corporations (within the
meaning of Code Paragraph 469,(1)(4) of which the Company is a member.
(q) "Company Stock Suspense Account" means the bookkeeping account to
which Leveraged Shares are allocated before allocation to Participants'
Accounts. A separate Company Stock Suspense Account shall be established
with respect to each Acquisition Loan.
(r) "Contribution Percentage" means, with respect to a specified
group of Participants for a Plan Year, the average of the Contribution
Ratios for the Participants in that group, calculated Lo the nearest one-
hundredth of one percent.
(s) "Contribution Ratio" means, with respect to a Participant for a
Plan Year, the ratio of (1) to (2), calculated to the nearest one-hundredth
of one percent, where (1) is the amount of (A) Matching Contributions and
(2) is the Participant's Plan Compensation for the Plan Year.
(t) "Deferral Percentage" means, with respect to a specified group of
Participants, the average of the Deferral Ratios for the Participants in
that group, calculated to the nearest one-hundredth of one percent.
(u) "Deferral Ratio" means, with respect to a Participant for a Plan
Year, the ratio of (1) to (2), calculated to the nearest one-hundredth of
one percent, where (1) is the Salary Reduction Contributions paid to the
Trust on behalf of the Participant and (2) is the Participant's Plan
Compensation.
(v) "Determination Date" means, for purposes of determining whether a
Plan is a Top-Heavy Plan for any Plan Year, the last day of the preceding
Plan Year; for the first Plan Year, the last day of the Plan Year.
(w) "Disability" means a mental or physical inability of a
Participant to perform his normal job, as evidenced by a certificate of a
medical examiner certifying that the condition is likely to be permanent.
The Committee shall have the right to have a Participant examined by a
qualified physician of its own choosing. In the event of a conflict of
opinion between the
- 3 -
<PAGE>
Participant's physician and the Committee's physician, the decision of the
Committee's physician shall be conclusive and binding on all parties.
(x) "Effective Date" means March 1, 1987.
(y) "Elective Deferrals" has the meaning given to that term by Code
paragraph 402(g)(3).
(z) "Eligible Employee" means any Employee who is not a member of a
collective bargaining unit.
(aa) "Employee" means any person employed by the Employer. For
purposes of crediting service for eligibility to participate and vesting
and, except as otherwise provided, for purposes of the rules set out in
Articles XII and XIV, the term "Employee" includes a "leased employee;"
provided, however, that an individual shall not become a Participant unless
he is an Employee without regard to this sentence. For purposes of this
Subsection, a "leased employee" is any person who performs services for
another person, the "recipient," but who is not an employee of the
recipient, if (1) the services are provided pursuant to an agreement
between the recipient and any other person, (2) the person has performed
services for the recipient (or for the recipient and related persons) on a
substantially full-time basis for a period of at least one year, and (3)
the services are of a type historically performed in the business field of
the recipient by employees.
(bb) "Employer" means the Company and any Related Employer that adopts
the Plan. For purposes of crediting service for eligibility to participate
and vesting, and, except as otherwise provided, for purposes of the rules
set out in Articles XII and XIV, the term "Employer" includes any Related
Employer.
(cc) "Entry Date" means each March 1, June 1, September 1, and
December 1.
(dd) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and interpretive rules and regulations.
(ee) "ESOP Funds" means the "leveraged fund" and the "non-leveraged
fund" in which Matching Accounts, Basic Accounts and Bonus Accounts are
invested. The leveraged fund means the ESOP Fund established to invest
primarily in Leveraged Shares. The ESOP Funds and the Accounts invested in
the ESOP Funds constitute the portion of the Plan intended to qualify as a
stock bonus plan and employee stock ownership plan under the provisions of
Code Subsection 401 (a) and Code paragraph 4975(e)(7).
(ff) "Fund" means any of the ESOP Funds or Non-ESOP Funds in which
Plan Accounts are invested.
(gg) "Highly Compensated Participant" means a Participant who is a
"highly compensated employee" within the meaning of Code subsection 414(q)
and who is an "eligible employee" within the meaning of paragraph 1.401(k)-
1(g)(3) of the proposed federal income tax regulations.
- 4 -
<PAGE>
(hh) "Hour of Service" means each hour for which an Employee is
entitled to credit under this Subsection.
(i) An Employee is entitled to credit for each hour for which
he is paid, or entitled to payment, for the performance of
duties for the Employer. Subject to the provisions of
Paragraph (6), an Hour of Service described in this
Paragraph shall be credited to an Employee for the
computation period in which the duties are performed.
(ii) An Employee is entitled to credit for each hour for which
he is paid, or entitled to payment, by the Employer on
account of a period 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; provided, however, that no Hours of
Service shall be credited under this Paragraph if such
payment is made or due solely to reimburse an Employee for
medical or medically related expenses or solely for the
purpose of complying with applicable workers'
compensation, unemployment compensation, or disability
insurance laws. Not more than 501 Hours of Service shall
be credited to an Employee on account of any single
continuous period during which the Employee performs no
duties (whether or not this period occurs in the single
Plan Year) unless the Hours of Service are credited
pursuant to Paragraph (4). Subject to the provisions of
Paragraph (6), an Hour of Service credited to an Employee
pursuant to this Paragraph shall be credited to the
computation period or periods during which no duties are
performed.
(iii) An Employee is entitled to credit for each hour for which
back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. The same Hour of
Service shall not be credited under Paragraph (1) or
Paragraph (2), as the case may be, and under this
Paragraph. An flour of Service described in this Paragraph
shall be credited to the computation period or periods to
which the award or agreement for back pay pertains, rather
than to the computation period in which the award,
agreement, or payment is made.
(iv) "Hours of Service" shall be credited for military leave
for training or service, or both, with the Armed Forces of
the United States under any form of law requiring military
training or service, provided that the Employee applies
for reemployment within 90 days after discharge or release
(A) from the Armed Forces or (B) from hospitalization
continuing for not more than one year after discharge or
release from the Armed Forces. An Employee shall be
credited with 190 Hours of Service for each month of
military leave
(v) Solely for purposes of determining whether a Break in
Service has occurred in a computation period after 1984
for eligibility and vesting purposes, an Employee who is
absent from work for maternity or
- 5 -
<PAGE>
paternity reasons shall receive credit for the Hours of
Service that would otherwise have been credited to the
individual but for the absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per
day of the absence. For purposes of this Paragraph, an
absence from work for maternity or paternity reasons means
an absence (A) by reason of the pregnancy of the
individual, (B) by reason of a birth of a child of the
individual, (C) by reason of the placement of a child with
the individual in connection with the adoption of the
child by the individual, or (D) for purposes of caring for
the child for a period beginning immediately following its
birth or placement. The total number of hours treated as
Hours of Service under this Paragraph by reason of any
absence shall not exceed 501. The Hours of Service
credited under this Paragraph shall be credited (A) to the
computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in
that period, or (B) in all other cases, to the following
computation period. No Hours of Service shall be credited
pursuant to this Paragraph unless the individual furnishes
to the Committee such timely information as the Committee
may reasonably require to establish (A) that the absence
from work is for reasons referred to in this Paragraph and
(B) the number of days of the absence.
(vi) All regulations promulgated by the U.S. Secretary of Labor
or his delegate applicable to the computation and
crediting of flours of Service under ERISA, including 29
C.F.R. (S) 2530.200b-2, are hereby incorporated as part of
the Plan. The provisions of the Plan are intended to
comply with the regulations and shall be construed and
applied to effect compliance.
(ii) "Interested Party" means a party in interest within the meaning
of section 3(14) of ERISA.
(jj) "Key Employee" means the following:
(i) Any Employee or former Employee (including a Beneficiary
of the Employee or former Employee) who at any time during
the Plan Year or any of the 4 preceding Plan Years is
included in a classification described in Paragraph (2),
determined in accordance with the rules of Code paragraph
4160)(1).
(ii) The following are Key Employee classifications:
(A) an officer of the Employer having an annual Top-Heavy
Compensation greater than 50% of the amount in effect
under Code subparagraph 415(b)(1)(A) for the Plan
Year;
(B) one of the 10 Employees having an annual Top-Heavy
Compensation from the Employer of more than the
limitation in effect under Code subparagraph
415(c)(1)(A) and owning (or
- 6 -
<PAGE>
considered as owning within the meaning of Code section
318) the largest interests of the Employer;
(C) a person owning (or considered as owning within the
meaning of Code section 318) more than 5% of the
outstanding stock of the Employer or stock possessing
more than 5% of the total combined voting power of all
stock of the Employer, or
(D) a person who has an annual Top-Heavy Compensation from
the Employer of more than $150,000 and who would be
described in Paragraph (C) if I% were substituted for
5%.
(kk) "Leveraged Shares" means shares of Company Stock purchased with
an Acquisition Loan.
(ll) "Matching Account" means a Participant's Account attributable to
Matching Contributions.
(mm) "Matching Contribution" means the contribution made to the Plan
by the Employer pursuant to Section 4.04.
(nn) "Non-ESOP Funds" means the fund or funds described in or
established pursuant to Section 5.02 in which Salary Reduction Accounts and
Rollover Accounts are invested. The Non-ESOP Funds and the Accounts
invested in the Non-ESOP Funds constitute the portion of the Plan intended
to qualify as a profit sharing plan under Code subsections 401(a), 401(k),
and 501(a).
(oo) "Non-Key Employee" means any Employee (including a Beneficiary
of the Employee) who is not a Key Employee.
(pp) "Normal Retirement Age" means age 65.
(qq) "Participant" means an Employee or former Employee who has
satisfied the participation requirements of Section 3.01 and has not ceased
to be a Participant pursuant to Section 3.04.
(rr) "Permissive Aggregation Group" is any group of Retirement Plans
selected by the Employer that includes those Retirement Plans in the
Required Aggregation Group if the group meets the requirements of Code
paragraph 401(a)(4) and Code section 41 0.
(ss) "Plan" means this instrument, as amended from time to time, and
the employee benefit plan so established.
(tt) "Plan Compensation" means, with respect to an Employee for a
Plan Year, the Employee's wages, salaries, fees for professional services,
and other amounts received for personal services actually rendered in the
course of employment with the Employer to the extent that amounts are
includable in gross income, including commissions, bonuses, and overtime
compensation, plus salary reduction contributions made on behalf of the
Employee for the Plan Year; provided, however, that Plan Compensation shall
not include any
- 7 -
<PAGE>
reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation, and welfare benefits. In
no event shall a Participant's Plan Compensation for a Plan Year exceed
$200,000, as adjusted to reflect increases in the limitation pursuant to
Code paragraph 401(a)(17). In determining an Employee's Plan Compensation,
the rules of Code paragraph 414(q)(6) shall apply, except that in applying
those rules, the term "family" shall include only the Employee's Spouse and
the Employee's lineal descendants who have not attained age 19 before the
close of the Plan Year. If as a result of the application of the rules of
Code paragraph 414(q)(6) the adjusted $200,000 limitation is exceeded, the
limitation shall be prorated among the affected individuals in proportion
to each individual's Plan Compensation as determined under this Section
prior to the application of the limitation.
(uu) "Plan Year" means the period beginning March 1 and ending on the
last day of February.
(vv) "Qualified Domestic Relations Order" means a qualified domestic
relations order within the meaning of Code subsection 414(p).
(ww) "Qualified Election Period" means the 6 consecutive year period
beginning with the Plan Year in which the Participant first becomes a
Qualified Participant.
(xx) "Qualified Nonelective Contribution" means a discretionary
employee contribution made pursuant to Section 4.03.
(yy) "Qualified Participant" means any Participant who has completed
at least 10 years of participation in the Plan and has reached age 55.
(zz) "Related Employer" means any employer that together with the
Employer is under common control or a member of an affiliated service
group, as determined under Code subsections 414(b), (c), (m), and (o). In
determining whether an Employer is a member of a controlled group for
purposes of Article XII, the rules of Code subsections 414(b) and W shall
be applied as modified by Code subsection 415(h).
(aaa) "Required Aggregation Group" is a group of Retirement Plans
comprising:
(i) each Retirement Plan of the Employer, including any
terminated Retirement Plan, in which a Key Employee has
been a Participant in the Plan Year containing the
Determination Date or any of the 4 preceding Plan Years;
(ii) each other Retirement Plan of the Employer that has
enabled a Retirement Plan described in Paragraph (1) to
meet the requirements or Code paragraph 401 (a)(4) or
Code section 410 during the period described in Paragraph
(1).
(bbb) "Retirement Plan" means a retirement program of the Employer
intended to qualify under Code subsection 401 (a).
- 8 -
<PAGE>
(ccc) "Rollover Account" means a Participant's Account attributable
to Rollover Contributions.
(ddd) "Rollover Contribution" means a contribution made by an
Eligible Employee pursuant to Section 4.08.
(eee) "Salary Reduction Account" means a Participant's Account
attributable to Salary Reduction Contributions.
(fff) "Salary Reduction Contribution" means a contribution made on
behalf of an Active Participant pursuant to Section 4.02.
(ggg) "Secretary"means the U.S. Secretary of Treasury or his
delegate.
(hhh) "Separates from Service" or "Separation from Service" means any
termination of the employment relationship between an Employee and the
Employer; provided, however, that it does not mean:
(i) temporary absence of an Employee due to vacation,
sickness, strike, seasonal layoff, or similar cause,
(ii) a leave of absence for any reason approved by the
Employer on a nondiscriminatory basis, or military leave
to the extent that an Employee is credited with Hours of
Service for the leave.
For purposes of this Subsection, the term Employer "includes all Related
Employers, and an Employee or former Employee shall not be treated as having
incurred a Separation from Service until the employment relationship between the
Employee and all Related Employers is terminated.
(iii) "Spouse" means a person legally married to a Participant.
Except as otherwise required by ERISA or the Code, neither common law
marriage nor any similar relationship shall be recognized as marriage for
purposes of the Plan. A former Spouse shall also be considered a Spouse to
the extent provided under a Qualified Domestic Relations Order.
(jjj) "Taxable Compensation" means, with respect to an Employee for a
Plan Year, the compensation as defined in Code paragraph 415(c)(3) received
by the Employee from the Employer.
(kkk) "Top-Heavy Compensation" means compensation within the meaning
of Code paragraph 414(q)(7).
(lll) "Top-Heavy Group" means an Aggregation Group described in
Subsection 14.02(b).
(mmm) "Top-Heavy Plan" means a Retirement Plan described in
Subsection 14.02(a).
(nnn) "Trust" means the trust established by the Employer under the
Plan.
- 9 -
<PAGE>
(ooo) "Trust Agreement" means the agreement between the Employer
and the Trustee establishing the Trust to implement and support the
operation of the Plan.
(ppp) "Trust Assets" means the assets of the Trust.
(qqq) "Trustee" means the original trustee of the Trust and any
person becoming successor trustee of the Trust.
(rrr) "Valuation Date" means the last day of the Plan Year and each
special valuation date declared by the Committee pursuant to Section 6.01.
(sss) "Year of Eligibility Service" means an eligibility
computation period during which an Employee completes not fewer than 1,000
Hours of Service. The first eligibility computation period of an Employee
is the 12-month period beginning on the day he first completes an flour of
Service. Thereafter, the Employee's eligibility computation period is the
Plan Year beginning with the first Plan Year that begins after the date on
which the Employee's employment began. If an Employee Separates from
Service before completing a Year of Service, thereafter incurs a Break in
Service, and is later reemployed, his eligibility computation period for
the period after his reemployment shall be calculated as if he had not
previously been employed.
(ttt) "Year of Vesting Service" means for any Employee, a Plan
Year during which the Employee has completed not fewer than 1,000 Hours of
Service; provided, however, that the following shall not be considered
Years of Vesting Service:
(i) For purposes of determining the vested percentage of
a Participant's Account that accrued before 5 or more
consecutive Breaks in Service, Years of Vesting
Service occurring after the Breaks in Service;
(ii) For purposes of determining the vested percentage of
a Participant's Accounts, Years of Vesting Service
before 5 or more consecutive Breaks in Service, if
the number of consecutive Breaks in Service equals or
exceeds the Years of Vesting Service credited to the
Employee before the Breaks in Service occurred, and
the Participant was not vested in any portion of his
Accounts at the time the Breaks in Service occurred.
Section 2.02. Rules of Construction. The following rules of construction
---------------------
shall govern in interpreting the Plan:
(a) In resolving any conflict between provisions of the Plan
and in resolving any other uncertainty as to the meaning or intention of
any provision of the Plan, the interpretation that shall prevail is the
interpretation that (1) causes the Plan to constitute a qualified plan
under the provisions of Code section 401, with the contributions of the
Employer to the Trust as items deductible by the Employer from net income
for federal income tax purposes, (2) causes the Plan to contain a qualified
cash or deferred arrangement described in Code subsection 401(k), (3)
causes the Plan to constitute an employee stock ownership plan within the
meaning of Code paragraph 4975(e)(7), and (4) causes the Plan to comply
with all applicable requirements of ERISA.
- 10 -
<PAGE>
(b) Other than as specified in Subsection (a), the provisions of
the Plan shall be construed and governed in all respects under and by the
internal laws of the State of Indiana.
(c) Words used in the masculine gender shall be construed to
include the feminine gender, where appropriate.
(d) Words used in the singular shall be construed to include the
plural, where appropriate, and vice versa.
(e) The headings and subheadings in the Plan are inserted for
convenience of reference only and are not to be considered in the
construction of any provision of the Plan.
(f) If any provision of this Plan shall be held to violate the
Code or ERISA or be illegal or invalid for any other reason, that provision
shall be deemed to be null and void, but the invalidation of that provision
shall not otherwise impair or affect the Plan.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
Section 3.01. Date of Participation.
---------------------
(a) Except as provided in Subsection (b), an Eligible Employee
shall become a Participant as of the first Entry Date after he has reached
age 18.
(b) Effective December 1, 1992, an Eligible Employee shall become
a Participant as of the first Entry Date after he has reached age 18 and
completed one Year of Eligibility Service.
Section 3.02. Notification of Eligibility. Within a reasonable time before
---------------------------
each Entry Date, the Committee shall give notice to Eligible Employees expected
to become Participants as of that Entry Date informing them of their status.
Section 3.03. Completion of Forms by Participants and Beneficiaries. Each
-----------------------------------------------------
Participant and Beneficiary shall complete any forms and furnish any proofs or
information required by the Committee.
Section 3.04. Cessation of Participation. A Participant shall cease to be a
--------------------------
Participant on the date as of which (a) he is no longer an Eligible Employee and
(b) the value of his entire vested Accounts has been distributed.
ARTICLE IV
CONTRIBUTIONS
Section 4.01. Trust Assets. All contributions under the Plan shall be paid
------------
or transferred to the Trustee to be held, managed, invested, and distributed in
accordance with the provisions of the
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<PAGE>
Plan and Trust Agreement. All benefits under the Plan shall be distributed
solely from the Trust Assets, and the Employer shall have no liability for those
benefits.
Section 4.02. Salary Reduction Contributions. An Active Participant may
------------------------------
elect to have Salary Reduction Contributions made to the Plan as follows:
(a) An Active Participant may elect to have Salary Reduction
Contributions made on his behalf by entering into a written salary
reduction agreement with the Employer that authorizes payroll deductions
equal to a selected whole percentage of up to 15% of his Plan Compensation,
but not more than the excess deferral limitation set forth in Code
paragraph 402(g)(1) (as adjusted from time to time pursuant to Code
paragraph 402(g)(5)) for a Plan Year; provided, however, that any election
shall be subject to reduction by the Committee in accordance with Section
4.03.
(b) As a general rule, an Active Participant's election to make,
discontinue, or change the rate of Salary Reduction Contributions will
become effective as of the first full payroll period beginning after the
first Entry Date occurring at least 15 days after the date on which a
completed salary reduction agreement is received by the Committee,
provided, however, that the Committee shall accept late elections whenever
the lack of adequate notice to the Active Participant of his eligibility to
make Salary Reduction Contributions or other unusual circumstances make it
reasonable to do so. No election to make, discontinue, or change the rate
of Salary Reduction Contributions shall be given retroactive effect.
(c) A former Eligible Employee who is or becomes an Active
Participant upon reemployment may elect to have Salary Reduction
Contributions made on his behalf by signing and delivering to the Committee
a salary reduction agreement within 10 days of his reemployment date, in
which case the election shall be given effect as of the next payroll
period.
(d) Salary Reduction Contributions shall be paid in cash to the
Trustee by the Employer within a reasonable period after they are withheld
from an Active Participant's pay and in no event later than 30 days after
the end of the Plan Year in which they were withheld.
(e) Salary Reduction Contributions made on behalf of an Active
Participant with respect to a Plan Year shall be allocated to the
Participant's Salary Reduction Account as of the earlier of the date on
which they are contributed to the Trust or the last day of the Plan Year.
(f) The Committee may establish additional nondiscriminatory
rules and procedures governing the manner and timing of an Active
Participant's elections to make, change, or discontinue Salary Reduction
Contributions, provided that the rules and procedures are consistent with
the Plan.
Section 4.03. Limitation on Salary Reduction Contributions. The amount of
--------------------------------------------
Salary Deduction Contributions made on behalf of Participants shall be subject
to the following limitations:
(a) Salary Reduction Contributions made on behalf of Highly
Compensated Participants for a Plan Year shall not result in a Deferral
Percentage for Highly Compensated Participants that exceeds both:
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<PAGE>
(i) 1.25 times the Deferral Percentage for all other Active
Participants; and
(ii) the lesser of (A) two times the Deferral Percentage for all
other Active Participants or (B) two percentage points more
than the Deferral Percentage for all other Active
Participants.
In determining the Deferral Percentage for both groups of Participants, the
Deferral Ratios of all "eligible employees" shall be taken into account.
For this purpose, an "eligible employee" is any Employee who is directly or
indirectly eligible to make a Salary Reduction Contribution for all or a
portion of the Plan Year and includes an Employee who would be eligible to
make a Salary Reduction Contribution but for his failure to make an
election pursuant to Section 4.02, or because the Salary Reduction
Contribution would cause the limitation of Article XII to be exceeded.
(b) Before each Entry Date and at such other times as it deems
advisable, the Committee shall evaluate the Plan's operation to assure that
Salary Reduction Contributions elected by Highly Compensated Participants
do not cause the limitations of Subsection (a) to be exceeded. The
Employer, in its sole discretion, may make a Qualified Nonelective
Contribution to the Salary Reduction Accounts of Benefit Participants who
are not Highly Compensated Participants, allocated among those Accounts in
proportion to those Participants' relative Plan Compensation, to assist the
Plan in satisfying the limitations of Subsection (a). To the extent that
Highly Compensated Participants' salary reduction elections would, if
carried out, cause the limitations of Subsection (a) to be exceeded, the
elections shall be adjusted as follows:
(i) The Deferral Ratio of the Highly Compensated Participant
with the highest Deferral Ratio shall be reduced to the
higher of (A) the Deferral Ratio necessary to enable the
Plan to satisfy the limitations of Subsection (a) or (B) the
Deferral Ratio of the Highly Compensated Participant with
the next highest Deferral Ratio. The foregoing process
shall be repeated until the limitations of Subsection (a)
are satisfied.
(ii) The portion of any Salary Reduction Contribution that has
been contributed to the Plan and is attributable to a
reduction in a Participant's Deferral Ratio pursuant to
Paragraph (1) shall be regarded as an excess Salary
Reduction Contribution. To the extent necessary to ensure
compliance with the limitations of Subsection (a), the
Trustee shall return all excess Salary Reduction
Contributions, together with all income allocable thereto,
to the Participant on whose behalf the contributions were
made within one year after the end of the Plan Year for
which the contributions were made.
(c) If Elective Deferrals with respect to a Participant for a
calendar year exceed the limitation of Code paragraph 402(g)(1) (as
adjusted from time to time pursuant to Code paragraph 402(g)(5)), the
Participant shall notify the Committee not later than March I of the
following year of the portion of the excess Elective Deferrals allocable to
the Plan. If the Committee receives notice from a Participant pursuant to
the preceding sentence, the
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Committee shall cause the Trustee to distribute to the Participant not
later than the following April 15 the portion of the excess Elective
Deferrals allocable to the Plan and any income attributable to that
portion.
Section 4.04. Matching Contributions. For each Plan Year, the Employer may
----------------------
contribute to the Plan a Matching Contribution in cash, Company Stock, or a
combination of cash and Company Stock, in an amount, if any, determined by the
Board of Directors. Matching Contributions shall be allocated to the Matching
Accounts of Participants who made Salary Reduction Contributions in an amount
equal to a designated percentage of each Participant's Salary Reduction
Contribution for the Plan Year. The percentage referred to in the preceding
sentence shall be uniform with respect to all Participants entitled to a
Matching Contribution. Notwithstanding the foregoing, the Employer shall not
make a Matching Contribution on behalf of a Highly Compensated Participant for a
Plan Year to the extent that it would cause the limitations of Section 4.05 to
be exceeded for the Plan Year. Matching Contributions for a Plan Year shall be
paid to the Trustee not later than the tax return due date for the Employer's
tax year beginning with or during the Plan Year and shall be allocated as of the
last day of the Plan Year.
Section 4.05. Limitation on Matching Contributions. The amount of Matching
------------------------------------
Contributions that may be allocated to the Matching Accounts of Highly
Compensated Participants shall be subject to the following limitations:
(a) Matching Contributions allocated to the Matching Accounts of
flighty Compensated Participants for a Plan Year shall not result in a
Contribution Percentage for flighty Compensated Participants that exceeds
both:
(i) 1.25 times the Contribution Percentage for all other
Active Participants; and
(ii) the lesser of (A) two times the Contribution Percentage
for all other Active Participants or (B) two percentage
points more than the Contribution Percentage for all
other Active Participants.
(b) Matching Contributions allocated to the Accounts of Highly
Compensated Participants for a Plan Year shall not cause the sum of the
Deferral Percentage and the Contribution Percentage for flighty Compensated
Participants to exceed the sum of the following:
(i) 1.25 times the lesser of (A) the Deferral Percentage for
all other Active Participants or (B) the Contribution
Percentage for all other Active Participants; and
(ii) the lesser of (A) two times the greater of (i) the
Deferral Percentage for all other Active Participants or
(ii) the Contribution Percentage for all other Active
Participants or (B) two percentage points more than the
greater of (i) the Deferral Percentage for till other
Active Participants or (B) the Contribution Percentage
for all other Active Participants.
The foregoing provisions of this Subsection (b) shall apply in a Plan Year
only if the Deferral Percentage for Highly Compensated Participants exceeds
1.25 times the
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<PAGE>
Deferral Percentage for all other Active Participants and the Contribution
Percentage for Highly Compensated Participants exceeds 1.25 times the
Contribution Percentage for all other Active Participants.
(c) To the extent that, due to an error, the limitations of
Subsections (a) or (b) are exceeded for a Plan Year, the following
provisions shall apply:
(i) The Contribution Ratio of the Highly Compensated
Participant with the highest Contribution Ratio shall
be reduced to the higher of (A) the Contribution Ratio
necessary to enable the Plan to satisfy the limitations
of Subsections (a) and (b) or (B) the Contribution
Ratio of the Highly Compensated Participant with the
next highest Contribution Ratio. The foregoing process
shall be repeated until the limitations of Subsections
(a) and (b) are satisfied.
(ii) That portion of any Matching Contribution attributable
to a reduction in a Participant's Contribution Ratio
pursuant to Paragraph (1) shall be regarded as an
excess Matching Contribution. The Trustee shall
distribute any vested excess Matching Contribution,
together with all income allocable thereto, to the
Participant to whose Matching Account it was allocated
within one year after the end of the Plan Year for
which the Matching Contribution was made.
(d) In determining the Contribution Percentage for both groups
of Participants, the Contribution Ratios of all "eligible employers" shall
be taken into account. For this purpose, an "eligible employee" is any
Employee who is directly or indirectly eligible to receive a Matching
Contribution and includes an Employee who would be eligible to receive a
Matching Contribution but for his failure to make an election pursuant to
Section 4.02 or the Matching Contribution causing the limitation of Article
XII to be exceeded.
Section 4.06. Basic Contributions. For each Plan Year, the Employer may
-------------------
contribute to the Plan a Basic Contribution in cash, Company Stock, or a
combination of cash and Company Stock in an amount, if any, determined by the
Board of Directors, provided that the amount of the Basic Contribution shall not
exceed the amount allowable as a deduction from the Employer's income for
federal income tax purposes. A Basic Contribution for a Plan Year shall be paid
to the Trustee not later than the tax return due date for the Employer's tax
year ending with or during the Plan Year. To the extent a Basic Contribution is
not used to repay an Acquisition Loan, it shall be allocated as of the last day
of the Plan Year to the Basic Accounts of Participants in proportion to their
Plan Compensation. Notwithstanding the foregoing provisions of this Section,
the Employer shall not make a Basic Contribution on behalf of a Participant to
the extent that it would cause the limitations of Article XII to be exceeded
with respect to that Participant for the Plan Year.
Section 4.07. Bonus Contributions. For each Plan Year, the Employer may
-------------------
contribute to the Plan a Bonus Contribution in cash, Company stock, or a
combination of cash and Company Stock, in an amount, if any, determined by the
Board of Directors; provided that the amount of the Bonus Contribution shall not
exceed the amount allowable as a deduction from the Employer's income for
federal tax purposes. A Bonus Contribution for a Plan Year shall be paid to the
Trustee no later than the tax return due date for the Employer's tax year ending
with or during the Plan Year. A Bonus Contribution shall be allocated as of the
last day of the Plan Year to the Bonus Accounts of
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<PAGE>
Participants in proportion to their Years of Vesting Service. Notwithstanding
the foregoing provisions of this Section, the Employer shall not make a Bonus
Contribution to the extent that it would cause the limitations of Article XII to
be exceeded with respect to a Participant for a Plan Year.
Section 4.08. Rollover Contributions. At any time during a Plan Year, an
----------------------
Eligible Employee may make a cash Rollover Contribution to the Trust, provided
that the Eligible Employee establishes to the satisfaction of the Committee that
the contribution satisfies all applicable requirements of Code sections 402 and
408 and any other criteria that the Committee may establish from time to time to
assure that the Rollover Contribution will not adversely affect the Plan's
qualified status. Amounts shall be allocated to the Rollover Account of the
Participant who made the contribution as of the date it is received by the
Trustee.
Section 4.09. Minimum Contribution Requirement. If the Plan is a Top-Heavy
--------------------------------
Plan for a Plan Year, the minimum benefit requirements of Code subsection 416(c)
shall be satisfied by the Employer contributing on behalf of each Non-Key
Employee who is both a Participant and an Employee on the last day of the Plan
Year (regardless of the Participant's Hours of Service during the Plan Year) a
contribution that, together with any contribution otherwise made on behalf of
the Employee Lo the Plan or another defined contribution plan of the Employer,
is not less than the lesser of (a) 3% of the Employee's Plan Compensation for
the Plan Year or (b) the percentage at which contributions are made (or required
to be made) under the Plan and under any other defined contribution plan for the
Plan Year for the Key Employee for whom the percentage is the highest for the
Plan Year. That percentage shall be determined for each Key Employee by
dividing the contributions for that Employee by so much of his Plan Compensation
for the Plan Year. In determining the amount of contributions that must be made
on behalf of Non-Key Employees, salary reduction contributions shall be taken
into account.
Section 4.10. Nondiversion and Exclusive Benefits. Except as expressly
-----------------------------------
provided in Subsection (a) or (b), the Trust Assets shall not revert to the
Employer and shall be devoted exclusively to the payment of benefits to
Participants, Beneficiaries, and other persons as provided in the Plan and Trust
Agreement, and, to the extent provided in the Plan, the defraying of reasonable
expenses of administering the Plan.
(a) If any contribution is made to the Plan by mistake of fact
and the Employer requests in writing that the contribution be returned, the
Trustee shall comply with the Employer's request; provided, however, that
no contribution may be returned to the Employer pursuant to this Subsection
more than one year after the date on which the contribution is made; and
(b) To the extent that the deduction for a contribution made by
the Employer is disallowed, the contribution shall be returned to the
Employer (to the extent disallowed) within one year after the disallowance
of the deduction, if the Employer so requests in writing.
ARTICLE V
INVESTMENTS AND ACCOUNTS
Section 5.01. Participants' Accounts. The Committee shall create and
----------------------
maintain adequate records to disclose the interest in the Plan of each
Participant and Beneficiary. Records shall be in the form of individual
bookkeeping accounts, and credits and charges shall be made to those accounts
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<PAGE>
pursuant to Article IV and Article VI. Each Participant shall have a separate
Salary Reduction Account, Matching Account, Basic Account, and Bonus Account.
Each Eligible Employee who makes a Rollover Contribution shall also have a
separate Rollover Account. The maintenance of individual Accounts is for
accounting purposes only, and a segregation of Trust Assets to each Account
shall not be required. The Committee shall also maintain records to indicate the
amount of each Participant's Accounts invested in the ESOP Funds and the Non-
ESOP Funds.
Section 5.02. Investment of Salary Reduction Accounts and Rollover
----------------------------------------------------
Accounts.
- --------
(a) The Trust Assets attributable to Salary Reduction Accounts
and Rollover Accounts shall be invested in t he Non-ESOP Funds that the
Company may designate from time to time by written addendum to this Plan.
The respective assets of each Non-ESOP Fund will be accounted for
separately from those of each other Fund and will be invested in the manner
prescribed in the addendum. The Trustee's discretion in investing the
assets of the Non-ESOP Funds will be subject only to the foregoing
provisions of this Subsection, the Trust Agreement, and ERISA. The Trustee
may invest the assets of any Non-ESOP Fund and commingle funds to the
extent that the investment is consistent with the purposes of the Non-ESOP
Fund. The adoption of all addendum establishing a Non-ESOP Fund will be an
amendment of the Plan.
(b) Subject to any rules the Committee may reasonably establish,
a Participant's Salary Reduction Account and Rollover Account will be
invested in any combination of the Non-ESOP Funds according to his written
designation. If the Participant does not designate a particular Non-ESOP
Fund, contributions will be invested in the Non-ESOP Fund designated by
addendum to the Plan as the Non-ESOP Fund to receive such allocations.
(c) To the extent permitted by the Committee, a Participant may
cause a transfer of all or a part of his Accounts invested in a Non-ESOP
Fund to be transferred to another Non-ESOP Fund. A Participant who desires
such a transfer shall execute a written form provided by the Committee and
shall rile it with the Committee within the time limits specified by the
Committee. Every transfer election shall be irrevocable and shall specify
the Non-ESOP Fund from which the transfer is to be made and the Non-ESOP
Fund into which the transfer is to be made.
Section 5.03. Investment of Matching Accounts, Basic Accounts and Bonus
---------------------------------------------------------
Accounts. The Trust Assets attributable to Matching Accounts, Basic Accounts
- --------
and Bonus Accounts shall be invested in the ESOP Funds. The respective amounts
of each ESOP Fund will be accounted for separately from those of each other
Fund. The Trustee shall retain a portion of the ESOP Funds in liquid assets,
which shall be used to pay the Plan's administrative expenses (including
Trustee's fees) and to make any required distributions under the Plan.
Section 5.04. Acquisition and Disposition of Company Stock. Subject to the
--------------------------------------------
following provisions, a Trustee may purchase Company Stock from, or sell Company
Stock to, any person.
(a) The purchase price paid by the Trust fur Company Stock shall
not exceed fair market value (as determined pursuant to Section 6.02), and
the sales price received by the Trust for Company Stock shall not be less
than fair market value (as determined pursuant to Section 6.02).
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<PAGE>
(b) No commission shall be charged with respect to a transaction
between the Trust and an Interested Party or any other transaction to which
section 406 or 407 of ERISA applies.
(c) In making purchases of Company Stock, the Trustee shall
comply with Rule 10b-18 as promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended from time
to time.
Section 5.05. Acquisition Loans. The Company may direct the Trustee to
-----------------
incur Acquisition Loans from time to time. Each Acquisition Loan shall satisfy
the following requirements:
(a) The Acquisition Loan shall be primarily for the benefit of
Participants and Beneficiaries.
(b) The Acquisition Loan shall be for a specific term.
(c) At the time the Acquisition Loan is made, the interest rate
for the Acquisition Loan shall not exceed a reasonable rate of interest,
taking into account the amount and duration of the Acquisition Loan, the
security and guarantee (if any) involved, and the interest rates prevailing
for comparable loans.
(d) The Company may guaranty repayment of the Acquisition Loan,
but no payments shall be made by the Company to a lender pursuant to a
guarantee until all Leveraged Shares held in the Company Stock Suspense
Account have been sold by the Trustee, and the proceeds of the sale have
been paid to the lender in satisfaction of the indebtedness under the
Acquisition Loan.
(e) The proceeds of an Acquisition Loan must be used within a
reasonable time after their receipt by the Trustee fur one or more of the
following purposes: (1) to acquire Company Stock, (2) to repay the
Acquisition Loan, or (3) to repay a prior Acquisition Loan.
(f) All Leveraged Shares acquired by the Trust with the proceeds
of an Acquisition Loan shall be added to and maintained in the Company
Stock Suspense Account (whether or not used as collateral for the
Acquisition Loan). Leveraged Shares shall be withdrawn from the Company
Stock Suspense Account pursuant to the provisions of Subsection W as though
all securities in the Company Stock Suspense Account were encumbered.
(g) An Acquisition Loan must be without recourse against the
Plan. The only assets of the Plan that may be used as collateral on an
Acquisition Loan are the leveraged Shares acquired with the proceeds of the
Acquisition Loan and Leveraged Shares used as collateral on a prior
Acquisition Loan repaid with the proceeds of the current Acquisition Loan.
No person entitled to payment under an Acquisition Loan shall I have any
right to Trust Assets other than (1) collateral given for the Acquisition
Loan, (2) Basic Contributions (other than contributions of Company Stock)
made to the Trust to meet its obligations under the Acquisition Loan, and
(3) earnings attributable to collateral and the investment of
contributions.
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<PAGE>
(h) Each Acquisition Loan shall provide for the release from
encumbrance of Company Stock used as collateral for the Acquisition Loan
pursuant to a definite schedule established at the time the Acquisition
Loan is made that satisfies the requirements of either Paragraph (i) or
(ii) below:
(i) To satisfy this Paragraph, for each Plan Year during
which the Acquisition Loan is outstanding, the number of
shares of Company Stock released must equal the number
of encumbered shares held immediately before release for
the current Plan Year multiplied by a fraction with a
numerator equal to the amount of principal and interest
paid for the Plan Year and a denominator equal to the
sum of the numerator and the principal and interest to
be paid for all future Plan Years without regard to
possible extension or renewal periods. If the interest
rate is variable, the interest to be paid in future Plan
Years shall be computed by using the interest rate
applicable as of the end of the Plan Year. If the
collateral includes more than one class of Company
Stock, the number of shares of each class to be released
for a Plan Year shall be determined by applying the same
fraction to each class. Amounts released from the
Company Stock Suspense Account shall be allocated to the
Accounts of Participants pursuant to Section 6.07 as of
the last day of the Plan Year.
(ii) To satisfy this Paragraph (2), for each Plan Year during
which the Acquisition Loan is outstanding, the number of
shares of Company Stock released must be determined
solely with reference to principal payments on the
Acquisition Loan, and the following additional rules
must be satisfied:
(A) The Acquisition Loan must provide for annual
payments of principal and interest at a cumulative
rate that is not less rapid at any time than level
annual payments of those amounts for 10 years.
(B) The interest included in any payment may be
disregarded only to the extent that it would be
determined to be interest under standard loan
amortization tables.
(C) The term of the Acquisition Loan, including any
renewal, extension, or refinancing period, shall
not exceed 10 years.
(i) Payments of principal and interest on an Acquisition Loan
shall be made by the Trustee (as directed by the Committee) from (1) Basic
Contributions to the Trust and the earnings on those contributions, (2)
Leveraged Shares held as collateral for an Acquisition Loan and earnings
attributable to those Leveraged Shares, and (3) the proceeds of any
subsequent Acquisition Loan made to repay a prior Acquisition Loan.
Payments made with
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<PAGE>
respect to an Acquisition Loan during a Plan Year shall not exceed an
amount equal to the sum of such contributions, proceeds, and earnings
received during or prior to the Plan Year less payments in prior Plan
Years. Such contributions and earnings shall be accounted for separately
until the Acquisition Loan is repaid. In the absence of Committee direction
with respect to the payments of principal and interest on an Acquisition
Loan, and to the extent funds are available, the Trustee shall apply all
earnings attributable to Leveraged Shares first to the payment of principal
on the Acquisition Loan and all Basic Contributions in cash to the Trust
first to the payment of interest on an Acquisition Loan.
(j) An Acquisition Loan shall not be payable upon demand except
in the case of default. If a default occurs, the value of the Trust Assets
transferred in satisfaction of the Acquisition Loan shall not exceed the
amount of the default. If the lender is an Interested Party, an Acquisition
Loan shall provide for a transfer of Trust Assets upon default only upon
and to the extent of the failure of the Trust to meet the payment schedule
of the Acquisition Loan. For purposes of this Subsection, the making of a
guarantee does not make a person a lender.
Section 5.06. Sale of Company Stock under Section 1042. If an owner of
----------------------------------------
Company Stock sells it to the Plan pursuant to Code Section 1042, the following
restrictions shall apply:
(a) No portion of the Company Stock (or income attributable to
it) shall be allocated under the Plan or any other plan of an Employer that
satisfies the requirements of Code Subsection 401 (a):
(i) during the nonallocation period to the selling
shareholder or to any person who is related (within the
meaning of Code subsection 267(b)) to the selling
shareholder;
(ii) to any other person who owns (after application of Code
subsection 318(a) without regard to the trust exception
in paragraph (2)(B)(i)) more than 25% of (1) any class
of outstanding stock of an Employer or (2) the total
value of any class of outstanding stock of an Employer.
(b) For purposes of Paragraph (a)(i), the following rules shall
apply:
(i) The term "nonallocation period" means the period
beginning on the date of the sale of the Company Stock
and ending on the later of (A) the date that is 10
years after the date of the sale or (B) the date of the
Plan allocation attributable to the final payment of
the Acquisition Loan incurred in connection with the
sale.
(ii) A lineal descendent of the selling shareholder shall
not be taken into account if the aggregate amount
allocated to all such lineal descendants during the
nonallocation period does not exceed more than 5% of
the Company Stock (or amounts allocated in lieu
thereof) held by the Plan that are attributable to a
sale to the Plan by any person related to such
descendants (within the meaning of Code paragraph
267(c)(4)) in a transaction to which Code Section 1042
applied.
(c) For purposes of paragraph (a)(2), a person shall be deemed a
25% shareholder if he is a 25% shareholder (1) at any time during the one-
year period ending on the date of the sale of the Company Stock to the Plan
or (2) on the date as of which Company Stock is allocated to Participants
in the Plan.
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<PAGE>
ARTICLE VI
VALUATION AND ACCOUNTING
Section 6.01. Valuation Dates. In addition to regular Valuation Dates, the
---------------
Committee shall have the discretion to declare special Valuation Dates by giving
the Trustee not fewer than 15 days' written notice. As of each Valuation Date,
the Trustee shall determine the fair market value of the Trust Assets. Based on
the Trustee's valuation, the Committee shall determine the value of each
Participant's Accounts.
Section 6.02. Valuation Standards. The following standards shall apply in
-------------------
valuing the Trust Assets:
(a) Except as provided in Subsection(b), if the value of the
Trust Assets is not readily ascertainable from the transactions of a
securities exchange, the Trust Assets shall be valued in accordance with
the best judgment of the Trustee. In determining the value of the Trust
Assets, the Trustee shall exercise its best judgment, using generally
accepted trust and accounting principles, and all determinations of value
shall be binding on all persons claiming benefits under the Plan.
(b) Company Stock shall be valued as follows:
(i) During any period in which Company Stock is quoted on
the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the value per
share shall equal the last sale price, if reported,
or, if the last sale price is not reported, the
average of the closing bid and asked prices per share
as reported by NASDAQ for the 20 consecutive trading
days immediately preceding the date as of which the
value is determined.
(ii) During any period in which Company Stock is not quoted
on NASDAQ but is quoted on a similar system, the value
per share shall equal the last sale price, if
reported, or, if the last sale price is not reported,
the average of the closing bid and asked price per
share as reported by the quotation system for the 20
consecutive trading days immediately preceding the
date as of which the value is determined.
(iii) During any period in which Company Stock is listed on
a national securities exchange, the value shall be the
average of the closing prices per share as reported by
the principal exchange on which the Company Stock is
listed for the 20 consecutive trading days immediately
preceding the date as of which the value is
determined. For purposes of the preceding sentence,
the principal exchange on which the Company Stock is
listed is the national securities exchange on which
the greatest number of shares of Company Stock has
been traded during the preceding 20 consecutive
trading days.
(iv) During any period in which Company Stock is neither
quoted on a quotation system as described in Paragraph
(i) or (ii) nor listed on a
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<PAGE>
national securities exchange, the value shall be fair market
value as determined by an independent appraiser selected by
the Trustee.
Section 6.03. General Method of Determining Values of Participants'
-----------------------------------------------------
Accounts. The value of each Account or a Participant shall be the value of the
- --------
Account as of the preceding Valuation Date, increased by the dollar amount of
any contributions and forfeitures allocated to the Account after the preceding
Valuation Date and decreased by the amount of any payments made from the Account
after the preceding Valuation Date. On each Valuation Date, each Account will be
adjusted by the dollar amount of any earnings or losses, loan interest accruals,
and contributions allocated to that Account as of that Valuation Date.
Section 6.04. Allocation of Earnings. Except as provided in Section 6.05,
----------------------
on each Valuation Date, earnings of the Funds shall be allocated to Accounts as
follows:
(a) The earnings of a Fund, whether positive or negative, shall
be allocated among all Accounts in proportion to the relative value of
those Accounts invested in the Fund as of the preceding Valuation Date (as
adjusted pursuant to Subsection (b)). Accounts terminated since the
preceding Valuation Date shall be disregarded for purposes of this
Subsection.
(b) For purposes of determining the allocation of investment
earnings pursuant Lo Subsection (a), the value of a Participant's Accounts
as of the preceding Valuation Date shall be adjusted as follows:
(i) The value of a Participant's Salary Reduction Account
invested in a Fund as of the preceding Valuation Date
shall be increased by one-half of the Salary Reduction
Contributions made on behalf of that Participant and
invested in that Fund since the preceding Valuation
Date.
(ii) The value of a Participant's Accounts invested in a
Fund as of the preceding Valuation Date shall be
decreased by any amounts distributed or loaned from
those Accounts invested in that Fund since the
preceding Valuation Date (excluding any amounts
distributed as of the date on which the investment
earnings are allocated).
(iii) The value of a Participant's Rollover Account invested
in a Fund as of the preceding Valuation Date shall be
increased by the amount of any Rollover Contributions
allocated to the Participant's Rollover Account
invested in that Fund since the preceding Valuation
Date multiplied by a fraction, the numerator of which
is the number of days occurring after the Rollover
Contribution is made and before the day after the
current Valuation Date and the denominator of which is
the number of days from the preceding Valuation Date
to the current Valuation Date.
(c) The investment earnings of each Fund between Valuation Dates
shall be equal to the difference between the fair market value of the Fund
as of the preceding Valuation Date and the current Valuation Date; plus (1)
the amount of benefits and loans paid from the Fund and (2) amounts
transferred from the Fund to another Fund since the preceding Valuation
Date; and less (1) any contributions and loan principal and interest
repayments made to the
- 22 -
<PAGE>
Fund and (2) any amounts transferred to the Fund from another Fund since
the preceding Valuation Date.
Section 6.05. Allocation of Dividends on Company Stock.
----------------------------------------
(a) Dividends paid during a Plan Year on Company Stock allocated
to an Account (whether cash or stock dividends) shall be allocated to that
Account as of the date of payment, unless used to make payments on an
Acquisition Loan or distributed to the Participant or his Beneficiary
pursuant to Subsection (b). Except as provided in Subsection (b), cash
dividends shall be used as follows:
(i) If an Acquisition Loan is outstanding, cash dividends
on Leveraged Shares shall be used to repay the
Acquisition Loan through which the purchase of the
Leveraged Shares was financed.
(ii) If cash dividends are paid on allocated Company Stock,
other than Leveraged Shares purchased with an
outstanding Acquisition Loan, they shall be used to
purchase additional shares of Company Stock.
(b) Notwithstanding the provisions Of Subsection (a), the Company
may direct that cash dividends on Company Stock maintained in the ESOP
Funds allocated to Participants' Accounts be distributed to the
Participants, in which case the dividends shall be distributed as provided
in this Section. The dividends may be paid directly by the Company to
Participants (or to Beneficiaries of deceased Participants). If the
dividends are paid to the Trustee, they shall be distributed by the Trustee
to Participants (or to Beneficiaries of deceased Participants) as soon as
administratively feasible after payment to the 'Trustee but in no case
later than 90 days after the end of the Plan Year in which the dividends
are paid.
Section 6.60. Leveraged Shares. Leveraged Shares acquired by the Trust
----------------
shall be allocated to Participants' Basic Accounts as provided in Section 6.07,
as they are released from the Company Stock Suspense Account pursuant to Section
6.07. If Leveraged Shares released from the Company Stock Suspense Account
consist of more than one class, allocations shall consist of substantially the
same relative proportions of each class.
Section 6.07. Allocation of Leveraged Shares to Participants' Accounts.
--------------------------------------------------------
(a) As soon as practicable following the release of Leveraged
Shares from the Company Stock Suspense Account as a result of a loan
amortization payment made in whole or in part with dividends on Leveraged
Shares, a portion of the total number of Leveraged Shares so released,
calculated separately with respect to each class of Leveraged Shares, shall
be released for allocation to Participants' Basic Accounts based on the
amount of such dividends used to make the loan amortization payment. The
portion of Leverages Shares released shall be separately calculated with
respect to (1) cash dividends on Leveraged Shares acquired with the
proceeds of an Acquisition Loan and held in Participants' Accounts
("allocated dividends") and (2) dividends on Leveraged Shares held in the
Company Stock Suspense Account ("unallocated dividends"), as follows:
(i) The number of released Leveraged Shares with respect to
allocated dividends shall be the total number of shares
released on account of the
- 23 -
<PAGE>
loan amortization payment multiplied by a fraction. The
numerator of the fraction shall be the amount of the
allocated dividends used to make the loan amortization
payment. The denominator of the fraction shall be the
fair market value of the total number of shares
released as a result of the Acquisition Loan
amortization payment. The number of released shares
with respect to allocated dividends shall be allocated
among Participants' Accounts in the same portion that
each Participant's allocated dividends used to make the
Acquisition Loan amortization payments bears to the
total amount of such allocated dividends. If the fair
market value of shares allocated to a Participant's
Accounts pursuant to this Paragraph is less than the
Participant's allocated dividends, the Employer shall
make additional contributions in an amount sufficient
to assure that the fair market value of the shares
allocated to the Participant's Accounts pursuant to
this Paragraph equals the Participant's allocated
dividends.
(ii) The number of released Leveraged Shares with respect to
unallocated dividends shall be the balance (after
application of the preceding Paragraph) of the shares
released on account of the Acquisition Loan
amortization payment, multiplied by a fraction. The
numerator of the fraction shall be the amount of
unallocated dividends used to make the loan
amortization payment. The denominator of the fraction
shall be the amount of the loan amortization payment
reduced by the amount of allocated dividends used to
make the loan amortization payment, if any. The number
of released shares with respect to unallocated
dividends shall be allocated among Participants'
Accounts pursuant to Paragraph (b) below.
(b) As of the last day of each Plan Year, all Leveraged Shares
that have been released from the Company Stock Suspense Account as a result
of loan amortization payments made during the Plan Year shall be allocated
to Participants' Accounts as provided in Section 4.06.
ARTICLE VII
VESTING AND FORFEITURES
Section 7.01. Nonforfeitability. For all purposes of the Plan, a "vested"
-----------------
interest is an interest that is nonforfeitable in the sense that it constitutes
a claim that is unconditional and legally enforceable against the Plan.
Section 7.02. Vesting of Accounts. A Participant's interest in his Salary
-------------------
Reduction Account, Rollover Account and Bonus Account shall be 100% vested at
all times. A Participant's interest in all of his other Accounts shall be
forfeitable, except as that interest becomes vested under the following
provisions:
(a) A Participant's interest in his Matching Account and Basic
Account shall be 100% vested upon the occurrence of any of the following
events:
(i) his attainment of Normal Retirement Age;
- 24 -
<PAGE>
(ii) his death or Disability while an Employee;
(iii) a complete discontinuance of contributions under the
Plan;
(iv) partial termination of the Plan (within the meaning of
the Code) with respect to the Participant; or
(v) termination of the Plan.
(b) Except as otherwise provided in this Section, a Participant's
interest in his Matching Account and Basic Account shall become vested in
accordance with the following schedule:
<TABLE>
<CAPTION>
Number of Years Vested
of Vesting Service Percentage
------------------ ----------
<S> <C>
Fewer than 3 0
3 20%
4 40%
5 60%
6 80%
7 or more 100%
</TABLE>
(c) If the Plan is a Top-Heavy Plan for a Plan Year, the vesting
schedule in Subsection (b) shall not apply and the following vesting
schedule shall apply:
<TABLE>
<CAPTION>
Number of Years Vested
of Vesting Service Percentage
------------------ ----------
<S> <C>
Fewer than 2 0
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
The vesting schedule in this Subsection shall not apply with respect to any
Employee who does not have an Hour of Service after the Plan becomes a Top-Heavy
Plan. If the Plan ceases to be Top-Heavy Plan, the vesting schedule of
Subsection (b) shall again apply, subject to the rules of Section 13.03
regarding amendment to the vesting schedule.
Section 7.03. Forfeitures. Except upon distribution pursuant to Subsection
-----------
8.04(d), no amount credited to a Participant shall be forfeited upon Separation
from Service until he incurs 5 consecutive Breaks in Service or dies while not
an Employee. When a Participant incurs 5 consecutive Breaks in Service or dies
while not an Employee, the nonvested portion of his Accounts shall be
- 25 -
<PAGE>
forfeited; provided, however, that shall be forfeited only after all other
assets allocated to the Participant's Accounts have been forfeited. The total
dollar amount of all interests forfeited during a Plan Year shall be held in a
separate suspense account until the last day of the Plan Year. The forfeited
amounts shall be allocated as of the last day of the Plan Year among the Basic
Accounts and Matching Accounts of Participants as provided in Sections 4.04 and
4.06.
ARTICLE VIII
BENEFITS
Section 8.01. General. A Participant shall not be entitled to receive
-------
any benefit from this Plan while employed by the Employer. A Participant's
Accounts shall be distributed in the following forms:
(a) A Participant's Accounts invested in Company Stock shall be
distributed in the form of cash or Company Stock, as elected by the
Participant or Beneficiary, except that the value of any fractional shares
of Company Stock shall be distributed as cash. Any distribution of Company
Stock shall comply with federal and state securities laws.
(b) Except as provided in Subsection (a), Participant's Accounts
shall be distributed in the form of cash.
Section 8.02. Retirement Benefits. If a Participant Separates from Service
-------------------
on or after his Normal Retirement Age and the value of his Accounts does not
exceed $3,500, his Accounts shall be distributed to him in a Jump sum as soon as
administratively feasible after the Participant Separates from Service. If the
value of the Participant's Accounts exceeds, or at the time of any prior
distribution ever exceeded, $3,500, the Participant may elect to receive his
Accounts as follows:
(a) A Participant's Accounts invested in Company Stock shall be
distributed in a lump sum or in equal annual installments extending over a
period not exceeding the maximum period permitted by Section 8.10, as
elected by the Participant. Distribution shall be made as soon as
administratively feasible after the end of the Plan Year in which the
Participant Separates from Service; provided, however, that if the
Participant notifies the Company of his retirement prior to the beginning
of a Plan Year, distribution shall be made as soon as administratively
feasible after the Participant Separates from Service.
(b) Except as provided in Subsection (a), a Participant's
Accounts shall be distributed in a lump sum as soon as administratively
feasible after the Participant Separates from Service.
Section 8.03. Disability Benefits. If a Participant Separates from Service
-------------------
before his Normal Retirement Age for reason of Disability, his Accounts shall be
distributed as provided in this Section:
(a) Except as provided in Subsection (b) or (c), distribution of
a Participant's Accounts shall begin as soon as administratively feasible
following his Normal Retirement Age as provided in Section 8.02.
- 26 -
<PAGE>
(b) If the value of a Participant's Accounts dues not exceed
$3,500, his Accounts shall be distributed to him in a lump sum as soon as
administratively feasible after he Separates from Service.
(c) If the value of a Participant's Accounts exceeds, or at the
time of any prior distribution ever exceeded, $3,500, the Participant may
elect at any time within 6 months after he Separates from Service to
receive his Accounts as follows:
(i) A Participant's Accounts invested in Company Stock
shall be distributed in a lump sum or in equal annual
installments extending over a period not exceeding the
maximum period permitted by Section 8. 1 0, as elected
by the Participant. Distribution shall be made as soon
as administratively feasible after the Plan Year in
which the Committee receives tile Participant's written
election.
(ii) Except as provided in Paragraph (1), a Participant's
Accounts shall be distributed in a lump sum as soon as
administratively feasible after the Committee receives
the Participant's written election.
Section 8.04. Termination Benefits. Subject to the provisions of Section
--------------------
8.17, if a Participant Separates from Service before his Normal Retirement Age
for any reason other than Disability or death, his Accounts shall be distributed
as provided in this Section.
(a) Except as provided in Subsection (b) or (c), distribution of
a Participant's Accounts shall begin as soon as administratively feasible
following his Normal Retirement Age as provided in Section 8.02.
(b) If the value of a Participant's vested Accounts does not
exceed $3,500, his Accounts shall be distributed Lo him in a lump sum as
soon as administratively feasible after the end of the Plan Year in which
he Separates from Service. If the Participant Separates from Service and is
0% vested in his Accounts, the vested portion of his Accounts shall be
deemed distributed to him as of the date he Separates from Service.
(c) If the value of a Participant's vested Accounts exceeds, or
at the time of any prior distribution ever exceeded, $3,500, the
Participant may elect at any time within 6 months after he Separates from
Service to receive his vested Accounts as follows:
(i) A Participant's Accounts invested in Company Stock
shall be distributed in a lump sum or in equal annual
installments extending over a period not exceeding the
maximum period permitted by Section 8.10, as elected by
the Participant. Distribution shall be made as soon as
administratively feasible after the end of the Plan
Year in which the Participant Separates from Service.
(ii) Except as provided in Paragraph (1), a Participant's
Accounts shall be distributed in a lump sum as soon as
administratively feasible after the Committee receives
the Participant's written election.
- 27 -
<PAGE>
(d) Upon distribution of a Participant's vested Accounts pursuant
to Subsection (b) or (c) by the end of the Plan Year following the Plan
Year in which the Participant Separates from Service, the nonvested portion
of the Participant's Accounts shall be forfeited and shall be reallocated
as of the last day of the Plan Year in which the forfeiture occurs, as
provided in Section 7.03. If a former Participant is reemployed by the
Employer, the amount forfeited pursuant to the preceding sentence shall be
restored if the Participant repays to the Trust the full amount distributed
to him before the date on which he incurs 5 consecutive Breaks in Service
after the date of the distribution. Amounts restored shall come from Trust
income and, to the extent necessary, forfeitures. If Trust income and
forfeitures are insufficient to restore the forfeited amounts, the Employer
shall make an additional contribution sufficient to restore the forfeited
amount. The additional Employer contribution shall not constitute an Annual
Addition.
Section 8.05. Death Benefits. If a Participant dies before his Accounts
--------------
have been completely distributed, the Accounts shall be distributed as follows:
(a) If a Participant dies before distribution of his Accounts has
begun, his Accounts shall be distributed to his Beneficiary in a lump sum
as soon as administratively feasible after the Participant's death.
(b) If the Participant dies after the distribution of his
Accounts has begun, his remaining Accounts, if any, shall be distributed to
his Beneficiary under the method of distribution in effect as of the date
of the Participant's death.
Section 8.06. Beneficiaries. A Participant's Beneficiary shall be
-------------
determined pursuant Lo this Section.
(a) A Participant's Spouse shall be his Beneficiary, unless the
Spouse has consented to the appointment of another Beneficiary in
accordance with Subsection (c). Except as provided in the preceding
sentence, "Beneficiary" means the person or persons, including a trustee,
designated in writing by a Participant pursuant to practices of, or rules
prescribed by, the Committee, as the recipient of a benefit payable under
the Plan following the Participant's death. To be effective, a Beneficiary
designation must be filed with the Committee during the Participant's life
and acknowledged by the Committee in writing.
(b) If no person has been designated as the Beneficiary of a
Participant, or if no person so designated survives the Participant, then
the Beneficiary shall be determined as follows:
(i) If the Participant is survived by a Spouse, the Spouse
shall be the Participant's Beneficiary.
(ii) If the Participant is not survived by a Spouse, the
Participant's estate shall be the Participant's
Beneficiary.
If any amount becomes payable under the Plan to a Beneficiary who Survives
the Participant but dies before receiving the benefit due him, and if the
Participant has not named a contingent Beneficiary who survives the
Participant, the Participant's remaining vested Accounts shall be
- 28 -
<PAGE>
paid in a Jump sum as soon as administratively feasible following the
Beneficiary's death to the Beneficiary's estate.
(c) A Participant's designation of someone other than his Spouse
as his Beneficiary shall not be given effect unless the Participant's
Spouse consents to the designation in writing, her consent acknowledges the
effect of the Participant's designation and her consent, and the consent is
witnessed by a Plan representative or a notary public. Notwithstanding this
consent requirement, if the Participant establishes to the Committee's
satisfaction that the written consent cannot be obtained because there is
no Spouse or the Spouse cannot be located, the designation shall be deemed
to have the Spouse's consent. If a Participant is legally separated from
his Spouse or has been abandoned by his Spouse (within the meaning of local
law) and the Participant has a court order to that effect, the Spouse's
consent shall not be required unless a Qualified Domestic Relations Order
provides otherwise. Any spousal consent shall be valid only with respect to
the Spouse who signs the consent, or in the case of a deemed consent, the
designated Spouse. If a Participant's Spouse is legally incompetent to give
consent, the Spouse's legal guardian (even if the guardian is the
Participant) may give consent. A Participant may revoke a prior designation
of a non-Spouse Beneficiary without his Spouse's consent at any time before
the distribution of his Accounts begins.
Section 8.07. Permitted Withdrawals from Matching, Basic, Bonus and
-----------------------------------------------------
Rollover Accounts. Subject to any rules and procedures the Committee may
- -----------------
reasonably establish, a Participant may withdraw assets in his Matching, Basic,
Bonus and Rollover Accounts upon a showing of hardship as provided in Section
8.08.
Section 8.08. Permitted Withdrawals from Salary Reduction Account. A
---------------------------------------------------
Participant may withdraw some or all of the balance of his Salary Reduction
Account upon the showing, satisfactory to the Committee, that the requested
withdrawal is on account of an immediate and heavy financial need of the
Participant and is necessary to satisfy such Financial need; provided, however,
that the amount withdrawn by the Participant shall not exceed the amount of the
Participant's Salary Reduction Contributions that have not been previously
withdrawn. A withdrawal shall be permitted only if it satisfies the
requirements of the following Subsections:
(a) The requested withdrawal must be on account of (1) expenses
fur medical care described in Code subsection 213(d) previously incurred by
the Participant, the Participant's Spouse, or any of the Participant's
dependents (as defined in Code section 152) or necessary for these persons
to obtain the medical care; (2) costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the Participant;
(3) payment of tuition and related educational fees for the next 12 months
of post-secondary education for the Participant, his Spouse, children, or
dependents; or (4) the need to prevent the Participant's eviction from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence.
(b) A distribution satisfies the requirements of this Paragraph
(b) only if it is necessary to satisfy an immediate and heavy financial
need (as defined under Paragraph (a) above). A distribution is necessary to
satisfy an immediate and heavy Financial need if the Committee determines,
on the basis of all relevant facts and circumstances, that the need cannot
be relieved:
(i) through reimbursement or compensation by insurance or
otherwise;
- 29 -
<PAGE>
(ii) by reasonable liquidation of the Participant's assets
(including those assets of the Participant's Spouse and
minor children that are reasonably available to the
Participant), to the extent that such liquidation would
not itself cause an immediate and heavy financial need;
(iii) by cessation of the Participant's Salary Reduction
Contributions under the Plan; or
(iv) by other distributions or nontaxable loans from plans
maintained by the Employer to the extent the Committee
determines that the Participant is able to repay those
loans) or by any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
To the extent permitted by the applicable regulations, the Committee, in
determining whether the relevant facts and circumstances are present, shall
rely on the representations of the Participant made under the penalties for
perjury.
In granting or refusing any request for withdrawal under this Section, the
Committee shall apply the standards set forth in this Section consistently, and
the Committee's discretion shall not be exercised so as to discriminate in favor
of officers, shareholders, or Highly Compensated Participants.
Section 8.09. Loans to Participants. A Participant may obtain a loan from
---------------------
the Plan as provided in this Section.
(a) To obtain a loan, a Participant must submit a written
application for the loan to the Committee. The Committee will have the sole
responsibility for determining whether or not to grant a Plan loan. The
Committee will establish written guidelines with respect to minimum amounts
of loans, frequency of loans, and other conditions, limitations, and
procedures.
(b) The amount of a loan to a Participant, when added to the
outstanding balance of all other loans to that Participant from the Plan,
will not exceed the lesser of:
(i) $50,000, reduced by the excess, if any, of
(A) the highest outstanding balance of loans from the
Plan to the Participant during the one-year period
ending on the day before the date on which the
loan is made, over
(B) the outstanding balance of loans from the Plan to
the Participant on the date on which the loan is
made; or
(ii) one-half (1/2) of the value of the Participant's vested
Accounts.
For purposes of the limitations imposed by this Subsection, loans from any
other plan of the Employer will be treated as a loan from the Plan.
- 30 -
<PAGE>
(c) Each loan will provide for a definite term and repayment
schedule. The maximum period of repayment for a loan will not exceed 5
years; provided, however, that if the loan is used to acquire a dwelling
unit that will be used as the Participant's principal residence within a
reasonable time, the Committee may establish a longer reasonable repayment
period, which will not exceed 10 years.
(d) The outstanding balance of a loan must be repaid by level
payments from each paycheck through payroll deduction, by a single payment
of the entire balance, or according to other procedures established by the
Committee in written guidelines. Except as otherwise permitted by the
Secretary, the written guidelines will require that a loan must be repaid
no less frequently than in substantially equal quarterly payments over the
term of the loan.
(e) A Plan loan will be in default upon the failure by the
Participant to repay the loan in accordance with the provisions of
subsections (c) and (d). If default occurs, the Committee will foreclose
on, sell, or otherwise dispose of the security for the loan at the time and
in the manner determined by the Committee.
(f) A loan will be evidenced by a promissory note and will bear
interest at a reasonable rate determined by the Committee. The rate will
be commensurate with the prevailing interest rate charged on similar
commercial loans under similar circumstances.
(g) A loan will be adequately secured as determined by the
Committee. In determining the adequacy of the security of a Plan loan, the
Committee will consider the type and amount of security which would be
required for an otherwise identical transaction in a normal commercial
setting between unrelated parties on arm's-length terms. The Committee may
require, as collateral for a Plan loan, a security interest in up to 50% of
the value of the vested Accounts of the Participant.
(h) The Committee will make its determination under this Section
such that (1) loans are available to all Participants on a reasonably
equivalent basis; and (2) the loan program does not discriminate in favor
of Highly Compensated Participants.
(i) For purposes of crediting earnings to Participants' Accounts,
a loan will be deemed a distribution from an Account. That Account will
share in applicable earnings at a proportionately reduced rate and will be
credited with accrued interest and principal repayments on the loan. The
Participant may designate the Accounts affected by the loan, but if he does
not do so, the loan will be allocated proportionately to his interests in
all Accounts.
Section 8.10. Other Distribution Rules Imposed by Federal Law. This Section
-----------------------------------------------
has been included in the Plan to comply with the limitations imposed by Code
subsection 409(o) and Code paragraphs 401(a)(9) and 401(a)(14), and it shall not
be construed as providing for a form of benefit not otherwise provided for under
the Plan. Notwithstanding any provision of this Plan to the contrary, any
distribution under the Plan shall be made in accordance with regulations under
Code paragraph 401(a)(9), including proposed federal income tax regulation
1.401(a)(9)-2, and shall comply with the following rules:
(a) Subject to the provisions of Section 8.17, distribution of a
Participant's Accounts invested in ESOP Funds must begin not later than one
year after the close of the Plan Year:
- 31 -
<PAGE>
(i) in which the Participant Separates from Service by
reason of attainment of age 65, disability, or death;
or
(ii) that is the 5th Plan Year following the Plan Year in
which the Participant Separates from Service for a
reason not listed in Paragraph (1), except that this
Paragraph shall not apply if the Participant is
reemployed by the Employer before the 5th Plan Year.
(b) Unless a Participant elects otherwise, the payment of his
benefits under the Plan must begin not later than the 60th day after the
end of the Plan Year in which occurs the latest of (l) the Participant's
65th birthday, (2) the 10th anniversary of the Plan Year in which tile
Participant began participation in the Plan, or (3) termination of the
Participant's employment with the Employer.
(c) For purposes of this Section, "required beginning date" means
April 1 of the calendar year following the calendar year in which the
Participant reaches age 70-1/2.
(d) Notwithstanding any other provision of this Plan, the entire
interest of each Participant shall be distributed either (1) in a single,
lump sum payment not later than the required beginning date, or (2) in a
series of payments beginning not later than the required beginning date
over the life of the Participant or over the lives of the Participant and a
designated Beneficiary (or over a period not extending beyond the life
expectancy of the Participant or the life expectancy of the Participant and
a designated Beneficiary). If a Participant's entire interest is to be
distributed in other than a lump sum, then the amount to be distributed
each year must be at least an amount equal to the quotient obtained by
dividing the Participant's entire interest by the life expectancy of the
Participant or joint and last survivor expectancy of the Participant and
designated Beneficiary. Life expectancy and joint and last survivor
expectancy are computed by the use of the expected return multiples
contained in Tables V and VI of 26 C.F.R. (S) 1.72-9. For purposes of this
computation, life expectancies shall not be recalculated.
(e) If (1) the distribution of a Participant's interest has begun
in accordance with Subsection (d) and (2) the Participant dies before his
entire interest has been distributed to him, the remaining portion of his
interest shall be distributed at least as rapidly as under the method of
distribution being used under Subsection (d) as of the date of his death.
(f) Except as provided in Subsection (g), if a Participant dies
before the distribution of his interest has begun in accordance with
Subsection (d), the entire interest of the Participant shall be distributed
within 5 years after his death.
(g) For purposes of Subsection (f), any portion of a distribution
that is payable to (or for the benefit of) a designated Beneficiary shall
be treated as completely distributed on the date the distributions begin
if.
(i) that portion is to be distributed (in accordance with
regulations prescribed by the Secretary) over the life
of the designated Beneficiary (or over a period not
extending beyond the life expectancy of the
Beneficiary), and
- 32 -
<PAGE>
(ii) those distributions begin by the latest of (i) one year
after the date of the Participant's death, (ii) any
later date that the Secretary may establish by
regulations, or (iii) if the Beneficiary is the
Participant's surviving Spouse, the date that the
Participant would have reached age 70-1/2.
(h) If the designated Beneficiary is the surviving Spouse. of the
Participant, and ir the surviving Spouse dies before the distributions to
the Spouse begin, Subsections (e), M, and (g) shall be applied as if the
surviving Spouse were the Participant.
(i) For purposes of Subsection (g), payments shall be calculated
by use of the expected return multiples specified in Tables V and VI of 26
C.F.R. (S) 1.72-9. Life expectancies of Beneficiaries shall be calculated
at the time payment first commences without further recalculation.
(j) For purposes of Subsections (d), (e), (f), and (g), if any
amount paid to a child of the Participant becomes payable to the surviving
Spouse when the child reaches the age of majority, that amount shall be
treated as if it had been paid to the surviving Spouse.
(k) 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.
Section 8.11. Diversification. Notwithstanding any other provision of this
---------------
Plan, within 90 days after the end or each Plan Year in a Qualified Election
Period, a Qualified Participant may elect in writing to require the Trustee to
distribute at least 25% of his Accounts invested in Company Stock (to the extent
that 25% of his Accounts in Company Stock exceeds the amount Lo which a prior
election under this Subsection applies). In the case of the last year in the
Qualified Election Period, the preceding sentence shall be applied by
substituting 50% for 25%.
Section 8.12. Stock Rights and Protections. Company Stock in a
----------------------------
Participant's Accounts shall nut be subject to a put, call, or other option, or
buy-sell or similar arrangement while held by and when distributed from the
Plan. The protections and rights of this Section shall be nonterminable. If the
Plan holds or has distributed Company Stock, the protections and rights shall
continue to apply whether or not the Plan continues to be an employee stock
ownership plan.
(a) If a Participant receives a distribution of Company Stock and
either (1) the Company Stock is not publicly-traded (within the meaning of
29 C.F.R. (S) 54.4975-7(b)(1)(iv) or (2) the Company Stock is subject to a
trading limitation under federal or state securities law or regulations or
an agreement that would make the Company Stock not as freely tradable as
stock not subject to the limitation, then the Company Stock distributed to
the Participant or his Beneficiary shall be subject to a put option as
described in this Section. The Committee shall inform the Trustee if
Company Stock to be distributed is subject to a restriction or limitation
described in the preceding sentence.
(b) The put option shall be exercisable by the Participant or his
Beneficiary, by the donees of either, or by a person (including an estate
or its distributes) to whom the Company Stock passes by reason of the death
of the Participant or his Beneficiary.
- 33 -
<PAGE>
(c) The holder of the put option shall be entitled to put the
Company Stock to the Employer. The Committee, however, shall have the
authority to assume the rights and obligations of the Employer at the time
the put option is exercised by directing the Trustee to repurchase the
Company Stock. Under no circumstances may the put option bind the Plan.
(d) The holder of the put option shall be entitled to exercise
the option at any time during two option periods. The first option period
shall be the 60-day period beginning on the date of the distribution of the
Company Stock, and if the option is not exercised during that period, a
second 60-day period shall begin in the following Plan Year pursuant to
federal tax regulations. The period during which a put option is
exercisable does not include any time when a holder of the option is unable
to exercise it because the party bound by the put option is prohibited from
honoring it by applicable federal or state law.
(e) A put option is exercised by the holder notifying the
Employer in writing that the option is being exercised.
(f) The exercise price for a put option shall be the value of the
Company Stock (as determined pursuant to 26 C.F.R. (S) 54.4975-1 1(d)(5))
based on all relevant factors for determining the fair market value of the
Company Stock and shall be made in good faith by an independent appraiser
(within the meaning of Code paragraph 401(a)(28)). In the case of a
transaction between the Plan and a Party in Interest with respect to the
Plan, value shall be determined as of the date of the transaction. For all
other purposes. value may be determined as of the most recent Valuation
Date.
(g) The terms of payment for the sale of Company Stock pursuant
to a put option shall be as provided in the put and may be paid either in a
lump sum or in substantially equal periodic installments (not less
frequently than annually) as provided by the Committee. An agreement to pay
through installments shall be permissible if the following requirements are
satisfied:
(i) the agreement is adequately secured, as determined by
the Committee,
(ii) a reasonable rate of interest is charged, as determined
by the Committee,
(iii) installment payments begin not later than 30 days after
the date the put option is exercised, and
(iv) the term of payment does not extend beyond 5 years from
the date the put option is exercised.
Section 8.13. Voting With Respect to Company Stock. Each Participant (or
------------------------------------
Beneficiary of a deceased Participant) shall have the right to direct the
Trustee with respect to the vote of the shares of Company Stock allocated to his
Accounts with respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business, or similar transaction
as the Secretary may prescribe by regulation. With respect to unallocated
shares held in the Company Stock Suspense Account, allocated shares for
- 34 -
<PAGE>
which the Trustee does not receive timely direction, and all other corporate
matters, the Trustee shall vote Company Stock as directed by the Committee.
Section 8.14. Effect of Government Regulation on Payment of Benefits. If
------------------------------------------------------
any regulation of the federal government or a federal agency prohibits or
prevents the payment or distribution of benefits in the manner provided in the
Plan, the Committee shall conform to the regulation without amendment of the
Plan.
Section 8.15. Inalienability of Benefits. Except as provided in this
--------------------------
Section, no Plan benefit shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, whether
voluntary or involuntary, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge a Plan benefit shall be void. The
prohibition set out in the preceding sentence shall not apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a Qualified Domestic Relations Order.
Section 8.16. Payments for Benefit of Incompetents. If any benefit is
------------------------------------
payable to a minor or other person under legal disability and the Committee is
aware of that person's status, the Committee shall direct that payments be made
to the legal guardian of that person or to such other person or organization as
a court of competent jurisdiction may direct.
Section 8.17. Distribution of Leveraged Shares. Notwithstanding any of the
--------------------------------
provisions of Sections 8.04, the distribution of a Participant's Accounts
invested in the Leveraged Fund shall not include Leveraged Shares until the
close of the Plan Year in which the Acquisition Loan is repaid in full.
Section 8.18. Right of First Refusal. If a Participant receives a
----------------------
distribution of Company Stock that is not readily tradable on an established
market (within the meaning of Code subsection 409(h)) at the time of
distribution, then the Company Stock distributed to the Participant shall be
subject to a right of first refusal as described in this Section.
(a) With respect to Company Stock subject to this Section and
distributed by the Trustee, the Participant, the Trustee, and the Company
shall enter into an agreement that, prior to any subsequent transfer, the
Company Stock shall first be offered in writing to the Trust, and then, if
refused by the Trust, to the Company.
(b) The offering price and other terms to the Trust or the
Company (whichever is applicable) shall be at a price equal to the greater
of (1) the fair market value of the Company Stuck as determined pursuant to
Section 6.02 or (2) the purchase price offered by a prospective buyer,
other than the Company or the Trustee, making a good faith (as determined
by the Committee) offer to purchase the Company Stock. Other conditions and
terms of the sale shall not be less favorable to the shareholder than those
offered by the prospective independent third party buyer.
(c) The Trust or the Company (whichever is applicable) may accept
the offer as to part or all of the Company Stock during a period not
exceeding 14 days after receipt of written notification to the Trust that
an offer by a third party to purchase the Company Stock lids been received
by the shareholder.
- 35 -
<PAGE>
(d) If the offer is not accepted by the Trust or the Company, or
both, the proposed transfer must be completed within 30 days following the
end of the 14-day period described in Subsection (c). The sale must be
completed on terms and conditions not less favorable to the shareholder
than the terms and conditions of the third party buyer's prior offer.
Section 8.19. Direct Transfers. A Participant or Beneficiary may elect that
----------------
his Plan benefits be distributed in the form of a direct trustee-to-trustee
transfer as provided in Code Section 401(a)(31).
ARTICLE IX
ADMINISTRATION
Section 9.01. Administrator. The Employee Benefits Committee shall be the
-------------
administrator of the Plan. The Committee shall consist of the number of
members, not fewer than 3, that is specified from time to time by the Board of
Directors. All members of the Committee shall be officers or Employees of the
Employer. All members of the Committee shall serve without compensation.
Section 9.02. Removal and Replacement of Committee Members. The members of
--------------------------------------------
the Committee shall hold membership at the pleasure of the Board of Directors
and may be removed by the Board of Directors with or without cause. Any vacancy
among the members shall be filled by the Board of Directors.
Section 9.03. Disqualification and Resignation. On the date when a
--------------------------------
Committee member is no longer an officer or Employee of the Employer, he shall
be disqualified from membership on the Committee. A member of the Committee may
resign by delivering his written resignation to the Company. A resignation shall
become effective on the date specified in the instrument of resignation.
Section 9.04. Chairman, Services, and Counsel. The members of the Committee
-------------------------------
shall elect one of their members as Chairman and shall elect a secretary, who
may be, but need not be, one of the members of the Committee. The Employer shall
provide the Committee, at the Employer's expense, with such clerical,
accounting, actuarial, and other services as the Committee may reasonably
require in carrying out its responsibilities. The Committee may employ counsel,
who may be, but need not be, counsel to the Employer.
Section 9.05. Meetings. The Committee shall hold meetings upon such notice,
--------
at such places, and at such times as the Committee may from time to time
determine.
Section 9.06. Quorum. A majority of the members of the Committee at the
------
time holding office shall constitute a quorum for the transaction of business.
All resolutions and other actions taken by tile Committee at any meeting shall
be by the vote of the majority of the members of the Committee present at the
meeting.
Section 9.07. Action Without Meeting. Any decision, order, direction, or
----------------------
other action, including orders and directions to the Trustee, made in writing
signed by a majority of the members of tile Committee at the time holding office
shall constitute valid and effective action of the Committee, whether or not the
matter to which that decision, order, direction, or other action pertains has
already been acted upon at a duly called and held meeting of the Committee.
- 36 -
<PAGE>
Section 9.08. Notice to Trustee of Changes in Membership. The Trustee shall
------------------------------------------
not be charged with notice of any change in the membership of the Committee
unless and until it has received a certified copy of the resolution or vote of
the Board of Directors effecting the change.
Section 9.09. Correction of Defects. The Committee may correct any defect
---------------------
or supply any emission or reconcile any error or inconsistency in its previous
proceedings, decisions, orders, directions, or other actions in such manner and
to such extent as it shall deem advisable to carry out the purposes of the Plan.
Section 9.10. Reliance Upon Legal Counsel. The members of the Committee,
---------------------------
and the Employer and its officers and directors, shall be entitled to rely upon
all opinions given by legal counsel selected by the Committee.
Section 9.11. Expenses. In the performance of its duties, the Committee is
--------
authorized to incur reasonable expenses, including counsel fees, which shall, to
the extent permitted by ERISA, be chargeable against the funds of the Trust if
the expenses are not paid by the Employer.
Section 9.12. Indemnification. The Employer agrees to indemnify and hold
---------------
harmless each member of the Committee against any cost, expense, or liability
(including any sum paid in settlement of any claim with the approval of the
Board of Directors) arising out of any act or omission to act as a member of the
Committee, except only acts and emissions representing willful misconduct,
fraud, or lack of good faith.
Section 9.13. Powers and Duties of Committee. Subject to the specific
------------------------------
limitations stated in the Plan, the Committee shall have the following powers,
duties, and responsibilities:
(a) To carry out the general administration of the Plan;
(b) To cause to be prepared all forms necessary or appropriate
for the administration of the Plan;
(c) To keep appropriate books and records, including minutes of
the meetings of the Committee;
(d) To determine, consistent with the provisions of the Plan, the
manner in which the Trust Assets shall be allocated and disbursed;
(e) To give directions to the Trustee as to the amounts to be
disbursed to Participants and others under the provisions of the Plan;
(f) To establish written procedures for determining, and to
determine in accordance with those procedures, whether a domestic relations
order is a Qualified Domestic Relations Order;
(g) To exercise all other powers and duties specifically
conferred upon the Committee elsewhere in the Plan and the Trust Agreement;
(h) To exercise all duties and responsibilities imposed by ERISA
upon the Committee as administrator of the Plan;
- 37 -
<PAGE>
(i) To interpret, with discretionary authority, the provisions of
the Plan and to resolve, with discretionary authority, all disputed
questions of Plan interpretation, including eligibility, rights, and status
of Participants and others under the Plan; and
(j) To employ agents to assist it in performing its
administrative duties.
The Committee shall at all times make similar decisions on similar questions
involving similar circumstances. Subject to the provisions of ERISA and to the
provisions of Article X relating to claims, all decisions of the Committee made
in good faith on all matters within the scope of its authority under the
provisions of this instrument shall be final and binding upon all persons.
Section 9.14. Matters Specifically Excluded from Jurisdiction.
-----------------------------------------------
Notwithstanding any other provision of the Plan, the Committee shall have no
power, duty, or authority with respect to determination of the amounts to be
contributed by the Employer to the Trust.
Section 9.15. Investment Manager. The Committee may appoint an investment
------------------
manager or managers to manage (including the power to acquire and dispose of any
Trust Assets) those Trust Assets specified by the Committee, subject to the
conditions of this Section.
(a) An appointed investment manager must (1) be registered as an
investment adviser under the Investment Advisers Act of 1940; (2) be a bank
as defined in that Act; or (3) be an insurance company qualified to perform
investment management services in more than one state.
(b) An appointed investment manager must, prior to acting with
respect to the Trust Assets acknowledge in writing that he accepts the
duties given him under the Plan and that he is a fiduciary with respect to
the Plan.
(c) Upon the appointment of an investment manager, the Committee
shall notify the Trustee of such appointment in writing, and shall deliver
to the Trustee a copy of the instruments evidencing the appointment, copies
of the written acknowledgment referred to in Subsection (b), and written
directions concerning the proper segregation of the Trust Assets into
separate investment accounts, if appropriate. The Committee's written
notification shall constitute a warranty as to the investment manager's
qualifications under section 3(38) of ERISA, and the Trustee shall be fully
protected in relying on the investment manager's continued qualification
and authority until otherwise notified in writing by the Committee. The
Trustee shall follow the directions of an appointed investment manager
regarding investment and reinvestment of Trust Assets. The Trustee shall
be under no obligation to review or give advice with respect to the
investment manager's directions.
(d) The Trustee shall not be liable for the acts or omissions of
the investment manager or be under an obligation to invest or otherwise
manage any Trust Assets that are subject to management by the investment
manager. The Trustee shall have no liability arising out of following the
directions of the investment manager.
(e) The Committee may remove an investment manager upon written
notice to the Trustee, in which case the Trustee shall, until notified of
the appointment of a successor
- 38 -
<PAGE>
investment manager, accept and manage the Trust Assets previously managed
by the investment manager.
ARTICLE X
CLAIMS PROCEDURES
Section 10.01. Presentation of Claims. Any person believing himself to be
----------------------
entitled to a benefit under the Plan may rile an application or claim fur the
benefit with the Committee. The Committee may adopt and supply forms for
benefit applications, but no claim shall be adversely affected because the
claimant has not used the form adopted by the Committee. A claim for a benefit
shall be deemed to have been made upon receipt by any member of the Committee of
a written request for the benefit, signed by the claimant or his representative.
Section 10.02. Denial of Claims. Failure of a majority of the members of
----------------
the Committee to agree as to the allowance of a claim or any part of it within
90 days after receipt of the claim by the Committee shall be considered to be a
denial of the claim or the part of it as to which an agreement has not been
reached. If a claim is denied in whole or in part, the Committee, within 90 days
after receipt of the claim, shall give the claimant written notice of the
denial. If special circumstances require extension of the 90-day response
period, the Committee may extend the period for up to 90 additional days by
notifying the claimant, within the original 90-day period, of the extension, the
reason for it, and when a decision can be expected. The notice of a claim denial
shall state, in a manner calculated to be understood by the claimant, the
following:
(a) The specific reason or reasons for the denial;
(b) Specific reference to the Plan provision or provisions on
which the denial is based;
(c) A description of any additional material or information that
the claimant may need to perfect the claim, with an explanation of why the
material or information is necessary; and
(d) An explanation of the appeal right and procedure described
in the next Section.
Section 10.03. Claimant's Right to Appeal Denial of Claim. A claimant whose
------------------------------------------
claim is denied, wholly or in part, shall have the right of an appeal to the
Committee for review of the denial. The following provisions shall apply to such
right of appeal:
(a) The request for review must be filed with the Committee
within 90 days after written notice of denial of the claim.
(b) The request shall be in writing signed by the claimant or
his authorized representative.
(c) The claimant shall have the right, upon request, to review
records and documents in the possession of the Committee relating to the
claim.
- 39 -
<PAGE>
(d) The claimant may submit issues, arguments, and other
documents in writing to the Committee, with any documentary evidence in
support of his claim.
(e) The decision by the Committee shall be given to the claimant
in writing within 60 days after receipt by the Committee of the claimant's
request for review. If special circumstances require extension of the 60-
day period, the Committee may extend the 60-day period for up to 60
additional days by notifying the claimant, within the original 60-day
period, of the extension, the reason for it, and when a decision can be
expected. If the decision denies the claim, in whole or in part, the
decision shall state the specific reasons for the denial, including
specific references to the Plan provision or provisions on which the denial
is based, all stated in language calculated to be understood by the
claimant.
ARTICLE XI
LIMITATIONS ON RIGHTS OF EMPLOYEES AND OTHER PERSONS
Section 11.01. In General. The Plan is strictly a voluntary obligation on
----------
the part of the Employer and shall not be deemed to constitute a contract
between the Employer and any Employee or to be a consideration for, an
inducement to, or a condition of the employment of any Employee. Neither the
Employer, the Committee, nor the Trustee in any way guarantees against loss or
depreciation of any Trust Assets or guarantees the payment of any benefit or
amount that may become due under the Plan to any Participant, his Beneficiaries,
or to any creditor of the Trust. Except as may be otherwise provided by ERISA,
neither the Employer nor the Committee shall be liable to any person for any act
or emission of the Trustee, nor shall the Trustee be liable to any person for
any act or omission of the Employer or the Committee.
Section 11.02. No Increase or Impairment of Other Rights. Nothing contained
-----------------------------------------
in the Plan shall be deemed to give any Employee the right to be retained in the
Employer's service or shall interfere with the Employer's right to discharge or
otherwise terminate any Employee's employment.
Section 11.03. Trust Sole Source of Benefits. Except as may be otherwise
-----------------------------
provided by ERISA, no person shall be entitled to any right or claim to benefits
except to the extent that the right is specifically fixed under the terms or the
Plan and there are Trust Assets available for payment of the benefits.
Section 11.04. Other Limitations of Liability. Except as may be otherwise
------------------------------
provided by ERISA, neither the Employer, the Committee, nor the Trustee shall be
under any liability or responsibility for the validity or effectiveness of the
Plan or the Trust Agreement, or for any failure of this Plan or the Trust to
qualify at any time or for any period as a tax-exempt plan or trust under the
provisions of the Code or any applicable law or for any tax or increase in tax
on a Participant or Beneficiary because of any benefits.
ARTICLE XII
PROVISIONS DESIGNED TO COMPLY WITH LIMITATIONS
ON CONTRIBUTIONS AND OTHER ADDITIONS
Section 12.01. Purpose and Construction of This Article. This Article is
----------------------------------------
included in the Plan to comply with limitations imposed by Code section 415, and
all provisions of this Article shall be construed and applied accordingly.
- 40 -
<PAGE>
Section 12.02. General Statement of Limitation. Notwithstanding any other
-------------------------------
provision of the Plan, a Participant's Annual Addition shall not exceed the
lesser of (a) $30,000 (or, if greater, one quarter of the dollar limitation in
effect under Code subparagraph 415(b)(1)(A)) or (b) 25% of the Participant's
Taxable Compensation for that Plan Year.
Section 12.03. Special Limitation Pursuant to Code Section 415(e).
--------------------------------------------------
Notwithstanding any other provision of the Plan, for any Participant who is a
Participant in this Plan and has been a participant in a defined benefit plan of
the Employer, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Plan Year shall not exceed one. The defined
benefit plan fraction for any year is a fraction with a numerator that is the
projected annual benefit of the individual under all defined benefit plans of
the Employer and with a denominator that is the lesser of (a) the product of
1.25 multiplied by the dollar limitation in effect under Code subparagraph
415(b)(1)(A) for that year or (b) the product of 1.4 multiplied by the amount of
the limitation in effect under Code subparagraph 415(b)(1)(B) with respect to
that individual for that year. The defined contribution plan fraction for any
year is a fraction with a numerator that is the sum of the Annual Additions for
all years to the individual's accounts in all defined contribution plans of the
Employer and with a denominator that is the sum of the lesser of the following
amounts determined for that year and for each prior year of service with the
Employer: (a) the product of l.25 multiplied by the dollar limitation in effect
under Code subparagraph 415(c)(1)(A) for that year (determined without regard to
Code paragraph 415(c)(6)), or (b) the product of 1.4 multiplied by the amount of
the limitation in effect under Code subparagraph 415(c)(1)(B) with respect to
the individual for that year. Notwithstanding the foregoing provisions, for any
Plan Year for which the Plan is a Top-Heavy Plan, 1.0 shall be substituted for
1.25. To the extent that the limitations of this Section are exceeded, the
appropriate adjustments shall be made under the defined benefit plan first.
Section 12.04. Adjustments to Allocation of Contributions. If a
------------------------------------------
Participant's Annual Addition would exceed the limitations of this Article for a
Plan Year as a result of a reasonable error in estimating a Participant's
Taxable Compensation, or under other limited facts and circumstances that the
Commissioner of Internal Revenue rinds justify the availability of' the rules
set forth in this Section, then the Participant's Annual Addition shall be
adjusted to the extent necessary to comply with the applicable limitation. Any
excess contribution adjusted pursuant to this Section shall be reallocated as
provided in the Section of the Plan relating to the contribution being
reallocated. If the reallocation required by the preceding sentence would cause
the amounts allocated to the Accounts of all Participants to exceed the
limitation set out in Section 12.02 for a Plan Year, then the excess amounts
shall be held unallocated in a suspense account in the Trust and allocated in
succeeding Plan Years, in order of time, to the maximum extent permitted by
Section 12.02, until the account is exhausted. If a suspense account is in
existence at any time during a Plan Year, other than the Plan Year described in
the preceding sentence, all amounts in the suspense account must be allocated
and reallocated to Participants' Accounts (subject to the limitations of this
Article) before any contributions that would constitute Annual Additions may be
made for the Plan Year.
ARTICLE XIII
AMENDMENT AND TERMINATION OF PLAN
Section 13.01. Amendments in General. The Company reserves the right to
---------------------
modify or amend the Plan in whole or in part at any time or from time to time by
action of its Board of Directors. The Company may not, however, make any
modification or amendment that materially
- 41 -
<PAGE>
affects the rights, duties, or responsibilities of the Trustee, unless the
Trustee consents in writing to the modification or amendment. Moreover, except
as otherwise permitted by the Code and ERISA, the Company may not make a
modification or amendment that:
(a) will reduce the Accounts of any Participant;
(b) will eliminate an optional form of distribution with respect
to benefits accrued before the amendment;
(c) will make it possible for any part of the principal or
income of the Trust to be used for, or diverted to, purposes other than the
exclusive benefit of Participants, Beneficiaries, and other persons
entitled to benefits under the Plan; or
(d) will permit any part of the principal or income of the Trust
to revert to the Employer.
Section 13.02. Amendments Necessary to Bring Plan into Compliance with the
-----------------------------------------------------------
Code and ERISA. Notwithstanding any other provision of the Plan, any
- --------------
modification or amendment of the Plan may be made, retroactively if necessary,
that may be required to cause the Trust to constitute a qualified trust under
the applicable provisions of Code and ERISA.
Section 13.03. Amendments to Vesting Provisions. No amendment to the
--------------------------------
vesting provisions of the Plan shall deprive a Participant of his nonforfeitable
rights to benefits accrued before the date of the amendment. Further, if the
Plan's vesting provisions are amended, each Participant with at least 3 Years of
Vesting Service may elect, within the period specified in the following
sentence, to have his nonforfeitable percentage computed under the Plan without
regard to the amendment. The period during which the election may be made shall
begin with the date the amendment is adopted and shall end 60 days after the
latest of the following events occurs: (a) the amendment is adopted, (b) the
amendment becomes effective, or (c) the Participant is issued written notice of
the amendment by the Employer.
Section 13.04. Termination of Plan. The Plan is intended to be permanent,
-------------------
and the Trust created in support of the Plan is intended to be irrevocable,
except in the manner and to the extent otherwise provided in the Plan or in the
Trust Agreement. The Employer hopes to maintain the Plan indefinitely and to
continue contributions to the Trust under the Plan, but the Employer has no
obligation or liability whatsoever to maintain the Plan or to continue
contributions to the Trust for any given length of time. The Plan shall
terminate upon the occurrence of any of the following circumstances:
(a) termination of the business of the Employer without
provision for continuing the Plan, except that provision may be made by
which the Plan will be continued by the successor to the Employer or any
transferee of all or substantially all of its assets and business, and, in
the event that an election is made to continue the Plan, the successor or
purchaser shall automatically become substituted for the Employer
hereunder;
(b) legal adjudication of the Employer its a bankrupt; a general
assignment by the Employer to or for the benefit of its creditors; or the
voluntary or involuntary dissolution of the Employer; or
- 42 -
<PAGE>
(c) termination of the Plan by the Employer upon notice
delivered to the Trustee.
Section 13.05. Effect of Termination on Trust. Upon termination of the
------------------------------
Plan, no further contributions to the Trust shall be made, except that the
Employer shall thereupon promptly pay Lo the Trust the unpaid balance, if any,
of any contribution required of the Employer with respect to tile last completed
Plan Year preceding the date of termination. If the Plan is terminated by fewer
than all Employers, it will continue in effect for Participants employed by the
remaining Employers.
Section 13.06. Payment of Benefits Upon Termination. Upon termination of
------------------------------------
the Plan, the Trustee shall use any shares of Company Stock held in the Company
Stock Suspense Account to satisfy any outstanding Acquisition Loan, and the
balance of any proceeds remaining shall be allocated among Participants'
Accounts invested in the Leveraged Fund in proportion to their Plan
Compensation. Upon termination of the Plan, the Trust shall continue in
existence for the purpose of administering the Trust Assets and the payment in
full of all benefits pursuant to the provisions of Article VIII.
Section 13.07. Post-Termination Powers of Trustee, Committee, Company, and
-----------------------------------------------------------
Employer. Notwithstanding the termination of the Plan, the Trustee, the
- --------
Committee, and the Employer shall have and retain thereafter all requisite power
and authority to take every step and Lo do all acts and things necessary,
requisite, or appropriate to complete distribution of the Trust Assets as
provided herein, including, but not limited to, the power of the Trustee to sell
or transfer the Trust Assets in the process of liquidation.
ARTICLE XIV
PROVISIONS RELATING TO TOP-HEAVY PLAN
Section 14.01. Construction of this Article. This Article shall be
----------------------------
construed in accordance with Code section 416 and the regulations thereunder.
Section 14.02. Top-Heavy Determination. For each Plan Year, the Committee
-----------------------
shall determine whether the Plan is a Top-Heavy Plan.
(a) The Plan shall be determined to be a Top-Heavy Plan if it
satisfies either Paragraph (1) or Paragraph (2).
(i) Except as provided in Paragraph (3), the Plan shall be
a Top-Heavy Plan for a Plan Year if, as of the
Determination Date, the aggregate of the Accounts of
Key Employees exceeds 60% of the aggregate of all the
Accounts of all Employees.
(ii) Except as provided in Paragraph(3), the Plan shall be
a Top-Heavy Plan for a Plan Year if it is included in
a Required Aggregation Group that is a Top-Heavy Group
for the Plan Year.
(iii) The Plan shall not be a Top-Heavy Plan for a Plan Year
if it is included in an Aggregation Group (whether a
Required Aggregation Group or a Permissive Aggregation
Group) that is not a Top-Heavy Group for the Plan
Year.
- 43 -
<PAGE>
(b) An Aggregation Group shall be a Top-Heavy Group for the Plan
Year if (as of the respective Determination Dates that occur in the same
calendar year for each of the plans in the Aggregation Group) the sum of:
(i) the present value of the cumulative accrued benefits
for Key Employees under all defined benefit Retirement
Plans included in the Aggregation Group, and
(ii) the aggregate balances of the accounts of Key
Employees under all defined contribution Retirement
Plans included in the Aggregation Group,
exceeds 60% of a similar sum determined for all Employees.
(c) In making the determinations required by this Section, the
rules of Section 14.03 shall apply.
Section 14.03. Special Rules Relating to Determination of Top-Heavy Status.
-----------------------------------------------------------
In making the determinations required by this Article, the following rules shall
apply:
(a) In determining the present value of an Employee's accrued
benefits under any defined benefit Retirement Plan, the mortality table and
interest rate set out in that Retirement Plan shall be used.
(b) For purposes of determining the present value of an
Employee's accrued benefit and accounts under this Article, distributions
made with respect to the Employee during the 5-year period ending on the
Determination Date shall be taken into account. The preceding sentence
shall also apply Lo distributions under a terminated Retirement Plan that
would have been required to be included in the Aggregation Group if the
Retirement Plan had not been terminated.
(c) All Retirement Plans included in the Required Aggregation
Group must be aggregated to determine whether they constitute a Top-Heavy
Group.
(d) If an individual is a Non-Key Employee with respect to any
Retirement Plan for a Plan Year, but the individual was a Key Employee with
respect to the Retirement Plan for any prior Plan Year, no accrued benefit
or account of the Employee shall be taken into account in determining top-
heavy status.
(e) If an individual has not performed any service for the
Employer at any time during the 5-year period ending on the Determination
Date, the accrued benefits and accounts of that individual shall not be
taken into account.
(f) For purposes of determining the present value of the accrued
benefit of an Employee other than a Key Employee, the accrued benefit shall
be determined (1) under the method used for accrual purposes for all
Retirement Plans of the Employer, or (2) if there is no method described in
Clause (1), as if the benefit accrued not more rapidly than the slowest
accrual rate permitted under Code subparagraph 41 1(b)(1)(C).
- 44 -
<PAGE>
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.01. Merger, Consolidation, or Transfer of Assets or Liabilities.
-----------------------------------------------------------
The Plan shall not merge with, consolidate with, or transfer any of its assets
or liabilities to any other plan unless each Participant in the Plan would (if
the Plan then terminated) receive a benefit immediately after the merger,
consolidation, or transfer that is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated).
Section 15.02. No Duplication of Benefits. Nothing in this Plan shall be
--------------------------
construed to permit any duplication of the benefits of a former Participant upon
his re-entry into the Plan as a Participant after retirement or Separation from
Service. Any such duplication of benefits is specifically prohibited.
Section 15.03. Named Fiduciaries. The Company and the Committee are hereby
-----------------
designated as named fiduciaries with respect to the Plan. Each named fiduciary
shall have only such authority as to the control and management of the operation
and administration of the Plan as is specifically given to it by the provisions
of the Plan. No named fiduciary shall be subject to the direction or control of
another named fiduciary except to the extent, and in the manner, specifically
provided herein or in the Trust Agreement. Each named fiduciary shall discharge
his duties with respect to the Plan in accordance with the applicable provisions
of ERISA.
Section 15.04. Bonding. Each fiduciary of the Plan and Trust and each
-------
person who handles funds of the Plan and Trust shall be bonded, except a
corporate Trustee who is exempt from the ERISA bonding requirements.
Section 15.05. Prohibition Against Receipt of Transfers From Certain
-----------------------------------------------------
Qualified Plans. No transfer of funds with respect to a Participant shall be
- ---------------
accepted by the Plan if the transfer would cause the Plan to be a direct or
indirect transferee (within the meaning of Code clause 401(a)(11)(13)(111)) of a
Plan to which Code paragraph 401(a)(11) applies. This Section shall not be
construed to authorize the acceptance by the Plan of a transfer not otherwise
authorized under the terms of the Plan.
ARTICLE XVI
OTHER EFFECTIVE DATES
Except as otherwise provided, all amendments reflected in this restatement are
effective March 1, 1992. Because of certain earlier amendments required by the
Tax Reform Act of 1986 and other federal law, Sections 8-11 (diversification),
8.12 (put option), 4.05 (limitation on Matching Contributions) and Subsection
2.01 (e) (definition of "Annual Addition") are effective March 1, 1987; and
Sections 8.01 through 8.06 (to the extent any Employer discretion with respect
to distributions is deleted) are effective March 1, 1989. Section 8.19 (direct
transfers of distributions) is effective January 1, 1993.
Shepard Poorman Communications Corporation has caused this Shepard Poorman
Communications Corporation Employee Stock Ownership Plan to be signed by its
duly authorized officers this _____ day of _______________, 1992.
- 45 -
<PAGE>
SHEPARD POORMAN COMMUNICATIONS
CORPORATION
By: _____________________________________
(Signature)
_________________________________________
(Printed)
_________________________________________
(Office)
ATTEST:
______________________________________
(Signature)
______________________________________
(Printed)
______________________________________
(Office)
Effective January 1, 1992, Shepard Poorman Graphics, Inc., has adopted this
amendment and complete restatement of Shepard Poorman Communications corporation
Employee Stock Ownership Plan on this _____ day of _______________, 1994.
SHEPARD POORMAN GRAPHICS, INC.
By: _____________________________________
(Signature)
_________________________________________
(Printed)
_________________________________________
(Office)
ATTEST:
______________________________________
(Signature)
______________________________________
(Printed)
______________________________________
(Office)
- 46 -
<PAGE>
Effective January 1, 1993, Weimer Graphics, Inc., has adopted this Shepard
Poorman Communications Corporation Employee Stock Ownership Plan on this _____
day of ________________, 1994.
WEIMER GRAPHICS, INC.
By: _____________________________________
(Signature)
_________________________________________
(Printed)
_________________________________________
(Office)
ATTEST:
_______________________________________
(Signature)
_______________________________________
(Printed)
_______________________________________
(Office)
- 47 -
<PAGE>
ADDENDUM TO ARTICLE V
Pursuant to Section 5.02 of the Plan, Salary Reduction Accounts and Rollover
Accounts shall be invested in the following Non-ESOP Funds:
Equity Index Fund -- INB's Equity Index Fund replicates the performance of the
Standard and Poor's 500 Index, a widely accepted benchmark for equity
performance comparisons. Comprised of industrial, utility, financial and
transportation stocks, the Equity Index Fund is designed to reflect the
Industrial composition of the U.S. economy. The companies represented in the
Fund account for approximately 70% of the value of all publicly traded U.S.
common stocks.
Pooled Fixed Income Fund -- This Fund is characterized by fixed income
investments principally in the short to intermediate maturity range of three to
seven years. The Fund is made up of U.S. Treasury issues, other Government
obligations and very high quality corporate bonds. The investment objective of
the Fund is to earn a consistent, above-average total rate of return without
taking excessive risk.
Principal Stability Fund -- The Principal Stability Fund is a Pooled fund
containing fixed and variable rate guaranteed investment contracts (GICs) issued
by insurance companies. This fund has as its investment objectives: (1) safety
of principal, (2) diversification of issuer and maturity, and (3) competitive
rate of return
Company Stock Fund -- The Company Stock Fund is a fund containing Shepard
Poorman Communications Corporation common stock as well as cash.
Pursuant to Subsection 5.02(b), the Principal Stability Fund is designated as
the Fund in which accounts will be invested in the absence of Participation
direction.
<PAGE>
FIRST AMENDMENT TO
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
This First Amendment to the Shepard Poorman communications Corporation
Employee Stock Ownership Plan (the "Plan") is adopted by Shepard Poorman
Communications Corporation (the "Company").
BACKGROUND
----------
A. Effective March 1, 1987, the Company adopted the Plan.
B. Effective March 1, 1992, the Plan was restated in its entirety.
C. The Company now wishes to amend the Plan further.
AMENDMENT
---------
The Plan is hereby amended as follows:
1. Effective March 1, 1993, Section 2.01(bb) of the Plan is amended to read as
follows:
(bb) "Employer" means the Company and any Related Employer that adopts the
Plan. For purposes of crediting service for eligibility to participate, the
term "Employer" includes Weimer, Incorporated. For purposes of crediting
service for eligibility to participate and vesting, and except as otherwise
provided, for purposes of the rules set out in Articles XII and XIV, the term
"Employer" includes any Related Employer.
2. Effective March 1, 1993, a new sentence is added to Subparagraph
8.04(c)(ii) to read as follows:
Notwithstanding the preceding sentence, Participants who Separate from
Service during the first quarter of the 1993 Plan Year as a result of the
Company's reduction in force shall be entitled to receive their
distributions as soon as administratively feasible after Separation from
Service.
3. Effective January 1, 1993, a new Article XVII is added to the Plan to read
as follows:
ARTICLE XVII
DIRECT ROLLOVERS
Section 17.01. Election. 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 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.
<PAGE>
Section 17.02. Definitions.
-----------
(a) "Eligible Rollover Distribution" means 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 Beneficiary, or for a specified period of 10 years or more; any
distribution to the extent the distribution is required under Code section
401(a)(9); 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 Company Stock).
(b) "Eligible Retirement Plan" means an individual retirement account
described in Code section 408(a), an individual retirement annuity described
in Code section 408(b), an annuity plan described in Code section 403(a), or
a qualified trust described in Code section 401(a), that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving Spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
(c) "Distributee" 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 are Distributees with regard to the
interest of the Spouse or former Spouse.
(d) "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
Shepard Poorman Communications Corporation has caused this First Amendment to
Shepard Poorman Communications Corporation Employee Stock Ownership Plan to be
signed by its duly authorized officer this ______ day of ______________, 1993.
SHEPARD POORMAN COMMUNICATIONS CORPORATION
(Signature)
_____________________________
(Printed)
_____________________________
(Office)
-2-
<PAGE>
SECOND AMENDMENT TO
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
This Second Amendment to Shepard Poorman Communications Corporation
Employee Stock ownership Plan (the "Plan") is adopted by Shepard Poorman
Communications Corporation (the "Company").
BACKGROUND
----------
A. Effective March 1, 1987, the Company adopted the Plan.
B. Effective March 1, 1992, the Plan was restated in its entirety.
C. The Plan has been amended by a First Amendment.
D. The Company now wishes to amend the Plan further.
AMENDMENT
---------
The Plan is hereby amended as follows:
1. Effective March 1, 1994, Section 2.01(tt) of the Plan is amended
to read as follows:
(tt) "Plan Compensation" means, with respect to an Employee for
a Plan Year, the Employee's wages, salaries, fees for professional
services, and other amounts received for personal services actually
rendered in the course of employment with the Employer to the extent
that amounts are includable in gross income, including commissions,
bonuses, and overtime compensation, plus salary reduction contributions
made on behalf of the Employee for the Plan Year; provided, however,
that Plan Compensation shall not include any reimbursements or other
expense allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation, and welfare benefits. In no event shall a
Participant's Plan Compensation for a Plan Year exceed $150,000 as
adjusted to reflect increases in the limitation pursuant to Code
paragraph 4 01(a)(17). In determining an Employee I s Plan Compensation,
the rules of Code paragraph 414(q)(6) shall apply, except that in
applying those rules, the term "family" shall include only the
Employee's Spouse and the Employee's lineal descendants who have not
attained age 19 before the close of the Plan Year. If as a result of the
application of the rules of Code paragraph 414(q)(6) the adjusted
$150,000 limitation is exceeded, the limitation shall be prorated among
the affected individuals in proportion to each individual's Plan
Compensation as determined under this Section prior to the application
of the limitation.
2. Effective September 1, 1994, the Addendum to Article V of the
Plan is amended to read as follows:
Pursuant to Section 5.02 of the Plan, Salary Reduction Accounts
and Rollover Accounts shall be invested in the following Non-ESOP Funds:
-1-
<PAGE>
FIDELITY MAGELLAN FUND - Fidelity Magellan Fund seeks capital
appreciation. It invests primarily in common stocks and convertible securities,
with up to 20% of its assets invested in debt securities of all types and
qualities. It features domestic corporations operating primarily in the United
States, domestic corporations that have significant activities and interests
outside the U.S., and foreign companies. No limitations are placed on total
foreign investment, but no more than 40% of its assets will be invested in
companies operating exclusively in one foreign country. The Fund may be
appropriate for investors seeking long-term growth who do not require a steady
flow of income.
BERGER 100 FUND - Berger 100 Fund seeks long-term capital appreciation
and income is incidental. It invests primarily in common stocks of established
companies. It may also purchase other types of securities, such as convertibles,
government issues, senior debt, and preferred stocks. The Fund may purchase put
and call options on stock indices with up to 1% of Fund assets. Foreign issues
may be purchased by the Fund without a specified limit. The Fund may invest in
zero coupon bonds and "strips." The Fund may be appropriate for investors
seeking long-term capital appreciation who are comfortable assuming the risks
and volatility of an aggressive growth fund, and do not require a steady flow of
income. It may be best viewed as a long-term investment, because the return may
be volatile over the short term.
OPPENHEIMER MAIN STREET INCOME AND GROWTH FUND CLASS A - Oppenheimer
Main Street Income and Growth Fund Class A seeks total return. it invests in
income-producing common stocks, preferred stocks, convertible securities, bonds,
debentures, and notes. The percentage of the Fund's portfolio invested in the
different types of permitted investments and the maturities of debt instruments
vary from time to time. The Fund may purchase convertible securities rated as
low as D. The Fund may be appropriate for investors seeking appreciation and
quarterly dividends. It may be best viewed as a long-term investment, because
the return may be volatile over a short-term period. Coupling this growth
potential with income investing, the Fund offers investors participation in
rising markets and valuable downside protection.
STRONG GOVERNMENT SECURITIES FUND - Strong Government Securities Fund
seeks current income with capital appreciation as a secondary objective. The
Fund normally invests at least 80% of its assets in government securities. The
balance of assets may be invested in other investment-grade fixed-income
securities. The Fund may engage in hedging activities through the use of futures
and options contracts. It expects a relatively high turnover rate, but intends
to limit turnover so that realized gains on securities held for less than three
months do not exceed 30% of its gross income. The average-weighted portfolio
maturity varies in response to changing interest rates. The Fund may be
appropriate for investors seeking a higher level of income and who are willing
to accept a higher degree of interest rate risk.
SPARTAN MONEY MARKET FUND - Spartan Money Market Fund invests in U.S.
Government obligations, certificates of deposit, banker acceptance, commercial
paper, and repurchase agreements.
COMPANY STOCK FUND - The Company Stock Fund contains Shepard Poorman
Communications Corporation common stock and cash.
-2-
<PAGE>
Pursuant to Subsection 5.02(b), the Spartan Money Market Fund is
designated as the Fund in which accounts will be invested in the absence of
Participant direction.
Shepard Poorman Communications corporation has caused this Second Amendment to
Shepard Poorman communications Corporation Employee Stock Ownership Plan to be
signed by its duly authorized officer this ______ day of _____________, 1994.
SHEPARD POORMAN COMMUNICATIONS CORPORATION
(Signature)
_____________________________________
(Printed)
_____________________________________
(Office)
ATTEST:
By:_____________________________________
Printed: _______________________________
Title: _________________________________
-3-
<PAGE>
THIRD AMENDMENT TO THE
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
WHEREAS, Shepard Poorman Communications Corporation (hereafter the "Company")
is the sponsoring employer of an employee pension benefit plan known as the
Shepard Poorman Communications Corporation Employee Stock Ownership Plan
(hereafter the "Plan"); and
WHEREAS, in connection with the Plan the Company has entered into an employee
benefit trust agreement (hereafter the "Trust Agreement") with Peoples Bank and
Trust Company, Indianapolis, Indiana (hereafter the "Trustee"), effective
October 24, 1994; and
WHEREAS, the Company has reserved in Section 13.01 of the Plan the right to
amend the Plan in whole or in part at any time or from time to time by action of
its Board of Directors, except that the Company may not make a modification or
amendment that materially affects the rights, duties or responsibilities of the
Trustee without the written consent of the Trustee to such modification or
amendment; and
WHEREAS, the directors of the Company have adopted an amendment to the Plan to
enable the Company to direct the Trustee with respect to the purchase, sale,
retention or distribution of stock which at any time constitutes stock of Day
Dream Publishing, Inc.; and
WHEREAS, the directors of the Company have authorized and directed the Chief
Executive officer of the Company to prepare a third amendment to the Plan and to
execute same on behalf of the Company; and
WHEREAS, the Trustee desires to consent to such amendment;
NOW, THEREFORE, the Plan is hereby amended, effective February 1, 1995, by the
following Third Amendment:
1. Section 5.03 ("Investment of Matching Accounts, Basic Accounts and Bonus
Accounts"), the first sentence thereof, is hereby amended in its entirety to
read as follows:
"The Trust Assets attributable to Matching Accounts Basic Accounts and
Bonus Accounts shall be invested in the ESOP Funds or in such other
instruments as are directed by the Company pursuant to Section 5.07."
2. Article V ("Investments and Accounts") is hereby amended by the addition
of the following new section 5.07:
"Section 5.07 Directed Investments.
---------------------------------
Any provision of this Plan or the Trust Agreement to the contrary
notwithstanding, the Trustee shall as directed by- the Company in a writing
executed by the Chief Executive officer of the Company, from time to time,
and upon such terms and conditions as so directed by the Company, purchase,
sell, retain, distribute or otherwise act with respect to any stock which
constitutes stock of Day Dream Publishing, Inc. The Trustee's duties and
responsibilities with respect to the purchase,
-4-
<PAGE>
sale, retention, distribution or other action with respect to such stock shall
be limited to effecting the written direction of the Company, discretionary,
fiduciary responsibility with respect to such matters being hereby allocated
to the Company."
In Witness Of the adoption of the Third Amendment to the Plan, this amendment
is hereby executed by the Chief Executive Officer of the Company on the _____
day of February, 1995.
SHEPARD POORMAN COMMUNICATIONS CORPORATION
___________________________________________
(Signature)
___________________________________________
(Printed)
___________________________________________
(Office)
ATTEST:
By: ________________________________
Printed: ___________________________
Title: _____________________________
CONSENT OF TRUSTEE
Peoples Bank and Trust Company hereby consents to the foregoing Third
Amendment to the Shepard Poorman Communications Corporation Employee Stock
Ownership Plan effective February 1, 1995.
PEOPLES BANK AND TRUST COMPANY
By: ___________________________________
Printed: ______________________________
Title: ________________________________
-5-
<PAGE>
FOURTH AMENDMENT TO
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
This Fourth Amendment to Shepard Poorman Communications Corporation Employee
Stock Ownership Plan (the "Plan") is adopted by Shepard Poorman Communications
Corporation (the "Company").
BACKGROUND
----------
A. Effective March 1, 1987, the Company adopted the Plan.
B. Effective March 1, 1992, the Plan was restated in its entirety.
C. The Plan has been amended by a First, Second and Third Amendment.
D. The Company now wishes to amend the Plan further.
AMENDMENT
---------
The Plan is hereby amended as follows:
1. Effective March 1, 1989, section 1.01 is amended to read as follows:
Section 1.01. Designation and Purpose. This Plan is a continuation and
-----------------------
complete restatement of the Shepard Poorman Communications Corporation
Employee Stock Ownership Plan, originally effective March 1, 1987. Except as
otherwise specifically provided in the Plan, the effective date of this Plan,
as restated, is March 1, 1989. The purposes of the Plan are to assist
Employees of the Employer in the accumulation of funds for retirement and to
enhance the interest of Employees in the efficient and successful operation of
the Employer. The Plan consists of two portions. The portion of Plan assets
invested in the Non-ESOP Funds is intended to qualify as a profit sharing plan
under Code subsections 401(a), 401(k), and 501(a). The portion of Plan assets
invested in the ESOP Funds is intended to qualify as a stock bonus plan and an
employee stock ownership plan under the provisions of Code subsection 401(a)
and Code paragraph 4975(e)(7).
2. Effective March 1, 1989, section 2.01(aa) is amended to read as follows:
(aa) "Employee" means any person employed by the Employer. For purposes
of crediting service for eligibility to participate and vesting and, except,
as otherwise provided, for purposes of the rules set out in Articles XII and
XIV, the term "Employee" includes a "leased employee;" provided, however, that
an individual shall not become a Participant unless he is an Employee without
regard to this sentence. For purposes of this Subsection, a "leased employee"
is any person who performs services for another person, the "recipient," but
who is not an employee of the recipient, if (1) the services are provided
pursuant to an agreement between the recipient and any other person, (2) the
person has performed services for the recipient (or for the recipient and
related persons) on a substantially full-time basis for a period
-6-
<PAGE>
of at least one year, and (3) the services are of a type historically performed
in the business field of the recipient by employees. Notwithstanding the
preceding sentence, a leased employee shall not include a person who is covered
by a money purchase pension plan providing (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined in Code
paragraph 415 (c) (3) , but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross income under
Code section 125, 402(e)(3), 402(h)(1)(B) or 403(b), (2) immediate
participation, and (3) full and immediate vesting, provided the leased employees
do not constitute more than 20% of the recipient's nonhighly compensated work
force.
3. Effective March 1, 1989, section 2. 01 (gg) is amended to read as
follows:
(gg) "Highly Compensated Participant" means a Participant who is a highly
compensated active Employee or highly compensated former Employee. A highly
compensated active Employee includes any Employee who performs service for the
Employer during the determination year and who, during the look-back year (1)
received compensation from the Employer in excess of $75,000 (as adjusted
pursuant to Code subsection 415(d) ) ; (2) received compensation from the
Employer in excess of $50, 000 (as adjusted pursuant to Code subsection 415(d))
and was a member of the top-paid group of the year; or (3) was an officer of the
Employer and received compensation during the year that is greater than 50
percent of the dollar limitation in effect under Code subparagraph 415(b)(1)(A).
The term highly compensated Employee also includes (1) an Employee who is both
described in the preceding sentence if the term "determination year" is
substituted for the term "lookback year', and is one of the 100 Employees who
received the most compensation from the Employer during the determination year;
and (2) an Employee who is a 5 percent owner at any time during the look-back
year or determination year. If no officer has satisfied the compensation
requirement of (3) above during either a determination year or look-back year,
the highest paid officer for the year shall be treated as a highly compensated
Employee. For purposes of this Subsection, the determination year shall be the
Plan Year. The lookback year shall be the twelve-month period immediately
preceding the determination year.
A highly compensated former Employee includes any Employee who terminated
employment (or was deemed to have terminated employment) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for either the
Plan Year during which he terminated employment or any determination year ending
on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former Employee or
a highly compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during the
year, then the family member and the 5 percent owner or top-10 highly
compensated Employee shall be treated as a single Employee receiving
compensation and Plan contributions or benefits equal to the sum of the
compensation and contributions or benefits of the family member and 5 percent
owner or top-10 highly compensated Employee. For
-7-
<PAGE>
purposes of this section, family member includes the spouse, lineal ascendants
and descendants or the Employee or former Employee, and the spouses of those
lineal ascendants and descendants.
The determination of who is a Highly Compensated Participant, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers, and
the compensation that is considered, will be made in accordance with Code
subsection 414(q).
4. Effective March 1, 1989, section 2.01(s) is amended to read as follows:
(s) "Contribution Ratio" means, with respect to a Participant for a Plan
Year, the ratio of (1) to (2), calculated to the nearest one-hundredth of one
percent, where (1) is the Matching Contributions paid to the Trust on the
Participant's behalf and (2) is the Participant's Plan Compensation for the Plan
Year. In determining Contribution Ratios, the following rules shall apply:
(1) Matching Contributions and any matching and employee
contributions made under any other plans that are aggregated
with the Plan for purposes of Code paragraph 401 (a) (4) and
subsection 410 (b) (other than Code clause 410(b)(2)(A)(ii))
are treated as made under a single plan, and if the Plan and
any other plans are permissively aggregated for purposes of
Code subsection 401(m), the aggregated plans must also
satisfy Code paragraph 401(a)(4) and subsection 410(b) as
though they were a single plan.
(2) The Contribution Ratio of a Highly Compensated Participant
will be determined by treating all plans subject to Code
subsection 401(m) under which the Highly Compensated
Participant is eligible (other than those that may not be
permissively aggregated) as a single plan.
(3) In the case of a Highly Compensated Participant who is
subject to the family aggregation rules of Code paragraph
414(q)(6) because the Participant is either a 5% owner or one
of the 10 most highly compensated employees, the Contribution
Ratio for the family group (which is treated as one Highly
Compensated Participant) is the Contribution Ratio determined
by combining the Matching Contributions, Plan Compensation,
and amounts treated as Matching Contributions of all eligible
family members. In the case of all other Highly Compensated
Participants and non-Highly Compensated Participants, the
Contribution Ratio is determined without regard to the
Matching Contributions, Plan Compensation, and amounts
treated as Matching Contributions of all family members.
5. Effective March 1, 1989, section 2.01(u) is amended to read as follows:
(u) "Deferral Ratio" means, with respect to a Participant for a Plan
Year, the ratio of (1) to (2), calculated to the nearest one-hundredth of one
percent, where (1) is the Salary Reduction Contributions paid to the Trust on
the Participant's behalf and
-8-
<PAGE>
(2) is the Participant's Plan Compensation for the Plan Year. In determining
Deferral Ratios, the following rules shall apply:
(1) Salary Reduction Contributions and any salary redirection
contributions made under any other plans that are aggregated
with the Plan for purpose of Code paragraph 401 (a) (4) and
subsection 410 (b) (other than Code clause 410(b)(2)(A)(ii))
are treated as made under a single plan, and if this Plan and
any other plans are permissively aggregated for purposes of
Code subsection 401(k) , the aggregated plans must also
satisfy Code paragraph 401 (a) (4) and subsection 410 (b) as
though they were a single plan.
(2) The Deferral Ratio of a Highly Compensated Participant will
be determined by treating all plans subject to Code
subsection 401 (k) under which the Highly Compensated
Participant is eligible (other than those that may not be
permissively aggregated) as a single plan.
(3) In the case of a Highly Compensated Participant who is
subject to the family aggregation rules of Code paragraph
414(q)(6) because the Participant is either a 5-'6 owner or
one of the 10 most highly compensated employees, the Deferral
Ratio for the family group (which is treated as one Highly
Compensated Participant) is the Deferral Ratio determined by
combining the Salary Reduction Contributions, Plan
Compensation, and amounts treated as Salary Reduction
Contributions of all eligible family members. In the case of
all other Highly Compensated Participants and non-Highly
Compensated Participants, the Deferral Ratio is determined
without regard to the Salary Reduction Contributions, Plan
Compensation, and amounts treated as Salary Reduction
Contributions of all family members.
6. Effective March 1, 1989, section 4.03(b) (2) is amended to read as
follows:
(2) The portion of any Salary Reduction Contribution that has been
contributed to the Plan and is attributable to a reduction in a Participant's
Deferral Ratio pursuant to Paragraph (1) shall be regarded as an excess Salary
Reduction Contribution. To the extent necessary to ensure compliance with the
limitations of Subsection (a), the Trustee shall return all excess Salary
Reduction Contributions, together with all income allocable thereto, to the
Participant on whose behalf the Contributions were made within one year after
the end of the Plan Year for which the Contributions were made. In the case of
a family group treated as one Highly Compensated Participant pursuant to
Paragraph 2.01(u)(3), the Trustee shall allocate the excess Salary Reduction
Contributions of the family group among the family members in proportion to the
Salary Reduction Contributions of each family member and return all excess
Salary Reduction Contributions, together with all income allocable thereto, in
accordance with the preceding sentence.
7. Effective March 1, 1989, a new section 4.03(d) is added to read as
follows:
-9-
<PAGE>
(d) For purposes of subsections (b) (2) and (c) , the income allocable
to excess Salary Reduction Contributions or excess Elective Deferrals, whichever
is applicable, shall be equal to the income allocable to the Participant's
Salary Reduction Account for the Plan Year [determined in accordance with
Section 6.04] multiplied by the ratio of the Participant Is excess Salary
Reduction Contributions or excess Elective Deferrals, whichever is applicable,
for the Plan Year, to the sum of the balance of the Salary Reduction Account at
the beginning of the Plan Year and all Salary Reduction Contributions for the
Plan Year.
8. Effective March 1, 1989, a new section 4.03(e) is added to read as
follows:
(e) For purposes of subsections (b) and (c), the excess Salary Reduction
Contributions to be returned will be reduced by any excess Elective Deferrals
previously distributed for the taxable year ending in the same Plan Year, and
the excess Elective Deferrals to be distributed for a taxable year will be
reduced by any excess Salary Reduction Contributions previously returned for the
Plan Year beginning in the taxable years.
9. Effective March 1, 1989, section 4.05(c) (2) is amended to read as
follows:
(2) That portion of any Matching Contribution attributable to a
reduction in a Participant's Contribution Ratio pursuant to Paragraph (1) shall
be regarded as an excess Matching Contribution. The Trustee shall distribute any
vested excess Matching Contribution, together with all income allocable thereto,
to the Participant to whose Matching Account it was allocated within one year
after the end of the Plan Year for which the Matching Contribution was made. In
the case of a family group treated as one Highly Compensated Participant
pursuant to Paragraph 2.01(s)(3) , the Trustee shall allocate the excess
Matching Contributions of the family group among the family members in
proportion to the Matching Contributions of each family member, and distribute
any vested excess Matching Contribution, together with all income allocable
thereto, in accordance with the preceding sentence. For purposes of this
paragraph, the income allocable to a Participant Is excess Matching
Contributions shall be equal to the income allocable to the Participant's
Matching Account for the Plan Year [determined in accordance with Section 6.04]
multiplied by the ratio of the Participant's excess Matching Contributions for
the Plan Year to the sum of the balance of the Matching Account at the beginning
of the Plan Year and all Matching Contributions for the Plan Year.
10. Effective March 1, 1989, section 4.07 is amended to read as follows:
Section 4.07. Bonus Contributions. For each Plan Year, the Employer may
-------------------
contribute to the Plan a Bonus Contribution in cash, Company stock, or a
combination of cash and Company Stock, in an amount, if any, determined by the
Board of Directors; provided that the amount of the Bonus Contribution shall not
exceed the amount allowable as a deduction from the Employer's income for
federal tax purposes. A Bonus Contribution for a Plan Year shall be paid to the
Trustee no later than the tax return due date for the Employer's tax year ending
with or during the Plan Year. A Bonus Contribution shall be allocated as of the
last day of the Plan Year to the Bonus Accounts of Participants in proportion to
their Years of Vesting Service.
-10-
<PAGE>
Notwithstanding the foregoing provisions of this Section, the Employer
shall not make a Bonus Contribution to the extent that it would cause
the limitations of Article XII 'to be exceeded with respect to a
Participant for a Plan Year. Effective for Plan Years beginning after
February 29, 1992, contributions will not be made pursuant to this
Section.
11. Effective March 1, 1989, Article XVI is amended to read as
follows:
Except as otherwise provided, all amendments reflected in this
restatement are effective March 1, 1989. Because of certain earlier
amendments required by the Tax Reform Act of 1986 and other federal law,
Sections 8.11 (diversification), 8.12 (put option), 4.05 (limitation on
Matching Contributions) and Subsection 2.01(e) (definition of "Annual
Addition") are effective March 1, 1987. Section 8.19 (direct transfers
of distributions) is effective January 1, 1993@.
Shepard Poorman Communications Corporation has caused this Fourth
Amendment to Shepard Poorman Communications Corporation Employee Stock Ownership
Plan to be signed by its duly authorized officer this ______ day of
__________________, 1995.
SHEPARD POORMAN COMMUNICATIONS CORPORATION
By: ___________________________________________
Printed: ______________________________________
Title: ________________________________________
ATTEST:
By: _________________________________
Printed: ____________________________
Title: ______________________________
-11-
<PAGE>
FIFTH AMENDMENT TO
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
This Fifth Amendment to the Shepard Poorman Communications Corporation
Employee Stock Ownership Plan (the "Plan") is adopted by Shepard Poorman
Communications Corporation (the "Company").
BACKGROUND
----------
A. Effective March 1, 1987, the Company adopted the Plan.
B. Effective March 1, 1992, the Plan was restated in its entirety.
C. The Plan was subsequently amended by the First, Second, Third and
Fourth Amendments.
D. The Company now wishes to amend the Plan further:
AMENDMENT
---------
The Plan is hereby amended as follows:
1. Effective March 1, 1994, Section 12.04 of the Plan is amended in its
entirety to read as follows:
Section 12.04. Adjustments to Allocation of Contributions. If a
------------------------------------------
Participant's Annual Addition would exceed the limitations of this Article
for a Plan Year as a result of the allocation of forfeitures, a reasonable
error in estimating a Participant's Taxable Compensation, a reasonable
error in determining the amount of Salary Reduction Contributions that may
be made within the limitations of this Article, or under other
circumstances that the Commissioner of Internal Revenue finds justify
adjustment, then the Participant's Annual Addition shall be adjusted as
follows:
(a) With respect to Participants who Separate from Service during
the Plan Year, Salary Reduction Contributions shall be distributed to
those Participants on whose behalf they were made pursuant to section
1.415-6(b)(6)(iv) of the federal income tax regulations to the extent
necessary to reduce the excess contributions. Any remaining excess
with respect to Participants who have Separated from Service shall be
reallocated to remaining Participants covered by the Plan at the end
of the Plan Year, to the extent permitted by Section 12.02. After the
application of the preceding sentence, any remaining excess with
respect to Participants who have Separated from Service shall be held
unallocated in a suspense account and allocated in succeeding Plan
Years, in order of time, to Participants covered by the Plan at the
end of the Plan Year, to the extent permitted by Section 12.02, until
the excess is exhausted.
(b) Except as provided in Subsection (a), excess amounts in a
Participant's Accounts shall be held unallocated in a suspense account
and allocated in succeeding Plan Years to the Participant, in order of
time,
-1-
<PAGE>
provided he is covered by the Plan at the end of the Plan Year, to the
extent permitted by Section 12.02, until the excess is exhausted. If a
suspense account is in existence pursuant to this Subsection at any time
during a Plan Year, other than the Plan Year in which the excess
contribution is made, all amounts in the suspense account must be allocated
and reallocated to a Participant's Accounts, to the extent permitted by
Section 12.02, before any contribution that would constitute an Annual
Addition may be made on behalf of the Participant for that Plan Year. If
the Participant is, not covered by the Plan at the end of the Plan Year,
the excess amounts remaining in the suspense account shall be allocated in
that Plan Year and in succeeding Plan Years, in order of time, to
Participants who are covered by the Plan at the end of the Plan Year, to
the extent permitted by Section 12.02, until the excess is exhausted.
Shepard Poorman Communications Corporation has caused this Fifth Amendment
to Shepard Poorman Communications Corporation Employee Stock Ownership Plan
to be signed by its duly authorized officer this ______ day of
_________________, 1995.
SHEPARD POORMAN COMMUNICATIONS CORPORATION
By: ___________________________________________
Printed: ______________________________________
Title: ________________________________________
ATTEST:
By: _____________________________________
Printed: ________________________________
Title: __________________________________
-2-
<PAGE>
AMENDMENT
TO THE
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, effective March 1, 1987, Shepard Poorman Communications
Corporation (the "Company") adopted the Shepard Poorman Communications
Corporation Employee Stock Ownership Plan (the "Plan");
WHEREAS, effective March 1, 1992, the Plan was amended and restated and has
been subsequently amended;
WHEREAS, Plan Section 13.01 provides for the amendment of the Plan by the
Company; and
WHEREAS, the Company desires to amend the Plan.
NOW THEREFORE, in consideration of these premises, the Plan is amended as
follows effective April 1, 1997, unless otherwise provided:
1. The Name of the Plan is changed to the "Shepard Poorman Communications
Corporation Stock Bonus Plan".
2. Plan Section 1.01 is deleted entirely and new Plan Section 1.01 is
added to read as follows:
Section 1.01. Designation and Purpose. This Plan is a
------------ -----------------------
continuation and complete restatement of the Shepard Poorman
Communications Corporation Employee Stock Ownership Plan, originally
effective March 1, 1987. Except as otherwise specifically provided in
the Plan, the effective date of this Plan is March 1, 1992. The
purposes of the Plan are to assist Employees of the Employer in the
accumulation of funds for retirement and to enhance the interest of
Employees in the efficient and successful operation of the Employer.
The Plan is intended to qualify as a stock bonus plan under the
provisions of Code Section 401(a) and 409.
3. Plan Section 2.01(b) is deleted entirely and new Plan Section 2.01(b)
is added to read as follows:
(b) "Acquisition Loan". Reserved.
- 1 -
<PAGE>
4. Plan Section 2.01(e) is deleted entirely and the following new Plan
Section 2.01(e) is added to read as follows:
(e) "Annual Addition" means, with respect to a Participant for a
Plan Year, the sum of the contributions and forfeitures allocated to a
Participant's Accounts for a Plan year under the Plan and any other
defined contribution plan of the Employer (other than rollover
contributions); amounts allocated after March 31, 1984, to an
individual medical account as defined in Code paragraph 415(l)(2) which
is part of a pension or annuity plan maintained by the Employer; and
amounts derived from contributions paid or accrued after March 31,
1984, which were attributable to post-retirement medical benefits,
allocated to the separate account of a Key Employee under a welfare
benefit fund, as defined in Code subsection 419(e), maintained by the
Employer.
5. Plan Section 2.01(q) is deleted entirely and new Plan Section 2.01(q)
is added to read as follows:
(q) "Company Stock Suspense Account". Reserved.
6. Plan Section 2.01(x) is deleted entirely and new Plan Section 2.01(x)
is added to read as follows:
(x) "Effective Date" means March 1, 1992, unless otherwise
provided specifically in the Plan.
7. Plan Section 2.01(ee) is deleted entirely and new Plan Section 2.01(ee)
is added to read as follows:
(ee) "ESOP Funds". Reserved.
8. Plan Section 2.01(ff) is deleted entirely and new Plan Section 2.01(ff)
is added to read as follows:
(ff) "Fund" means any of the Funds in which Plan Accounts are
invested.
- 2 -
<PAGE>
9. Plan Section 2.01(kk) is deleted entirely and new Plan Section 2.01(kk)
is added to read as follows:
(kk) "Leveraged Shares". Reserved.
10. Plan Section 2.01(nn) is deleted entirely and new Plan Section 2.01(nn)
is added to read as follows:
(nn) "Non-ESOP Funds". Reserved.
11. Plan Section 2.02(a) is deleted entirely and new Plan Section 2.02(a)
is added to read as follows:
(a) In resolving any conflict between provisions of the Plan and
in resolving any other uncertainty as to the meaning or intention of
any provision of the Plan, the interpretation that shall prevail is the
interpretation that (1) causes the Plan to constitute a qualified plan
under the provisions of Code section 401, with the contributions of the
Employer to the Trust as items deductible by the Employer from net
income for federal income tax purposes, (2) causes the Plan to contain
a qualified cash or deferred arrangement described in Code subsection
410(k), and (3) causes the Plan to comply with all applicable
requirements of ERISA.
12. New Plan Section 3.05 is added to read as follows:
Section 3.05. Cessation of Future Participation.
------------ ---------------------------------
Notwithstanding any provision of the Plan to the contrary, no Eligible
Employee shall become a Participant after March 31, 1997.
13. New Plan Section 4.11 is added to read as follows:
Section 4.11. Cessation of Contributions and Accruals.
------------ ---------------------------------------
Notwithstanding any provision of the Plan to the contrary, no
contributions shall be made to the Plan for any period after March 31,
1997, and no Participant shall accrue any benefit for any period after
March 31, 1997. Plan contributions and accruals shall be permanently
frozen on and after April 1, 1997.
- 3 -
<PAGE>
14. Plan Section 5.01 is deleted entirely and new Plan Section 5.01 is
added to read as follows:
Section 5.01. Participants' Accounts. The Committee shall
------------ ----------------------
create and maintain adequate records to disclose the interest in the
Plan of each Participant and Beneficiary. Records shall be in the form
of individual bookkeeping accounts, and credits and charges shall be
made to those accounts pursuant to Article IV and Article VI. Each
Participant shall have a separate Salary Reduction Account, Matching
Account, Basic Account, and Bonus Account. Each Eligible Employee who
makes a Rollover Contribution shall also have a separate Rollover
Account. The maintenance of individual Accounts is for accounting
purposes only, and a segregation of Trust Assets to each Account shall
not be required. The Committee shall also maintain records to indicate
the amount of each Participant's Accounts invested in Company Stock.
15. Plan Section 5.02 is deleted entirely and new Plan Section 5.02 is
added to read as follows:
Section 5.02. Investment of Salary Reduction Accounts and
------------ -------------------------------------------
Rollover Accounts.
-----------------
(a) The Trust Assets attributable to Salary Reduction Accounts
and Rollover Accounts shall be invested in the Funds that the Company
may designate from time to time by written addendum to this Plan. The
respective assets of each Fund will be accounted for separately from
those of each other Fund and will be invested in the manner prescribed
in the addendum. The Trustee's discretion in investing the assets of
the Funds will be subject only to the foregoing provisions of this
Subsection, the Trust Agreement, and ERISA. The Trustee may invest the
assets of any Fund and commingle funds to the extent that the
investment is consistent with the purposes of the Fund. The adoption of
an addendum establishing Fund will be an amendment of the Plan.
(b) Subject to any rules the Committee may reasonably establish,
a Participant's Salary Reduction Account and Rollover Account will be
invested in any combination of the Funds according to his written
designation. If the Participant does not designate a particular a Fund,
contributions will be invested in the Fund
- 4 -
<PAGE>
designated by addendum to Plan as the Fund to receive such allocations.
(c) To extent permitted by the Committee, a Participant may
cause a transfer of all or a part of his Accounts invested in a Fund to
be transferred to another Fund. A Participant who desires such a
transfer shall execute a written form provided by the Committee and
shall file it with the Committee within the time limits specified by
the Committee. Every transfer election shall be irrevocable and shall
specify the Fund from which the transfer is to be made and the Fund to
which the transfer is to be made.
16. Plan Section 5.03 is deleted entirely and the following new Plan
Section 5.02 is added to read as follows:
Section 5.03. Investment of Matching Accounts, Basic Accounts
------------ -----------------------------------------------
and Bonus Accounts.
------------------
(a) The Trust Assets attributable to Matching Accounts, Basic
Accounts and Bonus Accounts shall be invested in the Funds that the
Company may designate from time to time by written addendum to this
Plan. The respective assets of each Fund will be accounted for
separately from those of each other Fund and will be invested in the
manner prescribed in the addendum. The Trustee's discretion in
investing the assets of the Funds will be subject only to the foregoing
provisions of this Subsection, the Trust Agreement, and ERISA. The
Trustee may invest the assets of any Fund and commingle funds to the
extent that the investment is consistent with the purposes of the Fund.
The adoption of an addendum establishing Fund will be an amendment of
the Plan.
(b) Subject to any rules the Committee may reasonably establish,
a Participant's Matching Accounts, Basic Accounts and Bonus Accounts
will be invested in any combination of the Funds according to his
written designation. If the Participant does not designate a particular
a Fund, contributions will be invested in the Fund designated by
addendum to Plan as the Fund to receive such allocations.
(c) To extent permitted by the Committee, a Participant may
cause a transfer of all or a part of his Accounts invested in a Fund to
- 5 -
<PAGE>
be transferred to another Fund. A Participant who desires such a
transfer shall execute a written form provided by the Committee and
shall file it with the Committee within the time limits specified by
the Committee. Every transfer election shall be irrevocable and shall
specify the Fund from which the transfer is to be made and the Fund to
which the transfer is to be made.
17. Plan Section 5.05 is deleted in its entirety and new Section 5.05 is
added to read as follows:
5.05. Acquisition Loans. Reserved.
---- -----------------
18. Plan Section 5.06 is deleted in its entirety and new Section 5.06 is
added to read as follows:
5.06. Sale of Company Stock under Section 1042. Reserved.
---- ----------------------------------------
19. Plan Section 6.05 is deleted in its entirety and new Section 6.05 is
added to read as follows:
6.05. Allocation of Dividends on Company Stock. Dividends paid
---- ----------------------------------------
during a Plan Year on Company Stock allocated to an Account (whether
cash or stock dividends) shall be allocated to that Account as of the
date of payment.
20. Plan Section 6.06 is deleted in its entirety and new Section 6.06 is
added to read as follows:
6.06. Leveraged Shares. Reserved.
---- ----------------
21. Plan Section 6.07 is deleted in its entirety and new Section 6.07 is
added to read as follows:
6.07. Allocation of Leveraged Shares to Participant's Accounts.
---- --------------------------------------------------------
Reserved.
22. Plan Section 8.01(a) is deleted in its entirety and new Section 8.01(a)
is added to read as follows:
(a) A Participant's Accounts shall be distributed in the form of
cash or Company Stock, as elected by the Participant or Beneficiary,
- 6 -
<PAGE>
except that the value of any fractional shares of Company Stock shall
be distributed as cash. Any distribution of Company Stock shall comply
with federal and state securities laws.
23. Plan Section 8.01(b) is deleted in its entirety and new Section 8.01(b)
is added to read as follows:
(b) Reserved.
24. Plan Section 8.02(a) is deleted entirely and new Plan Section 8.02(a)
is added to read as follows:
(a) A Participant's Accounts invested in Company Stock shall be
distributed in a lump sum or in equal installments extending over a
period not exceeding the maximum period permitted by Section 8.10, as
elected by the Participant. Distribution shall be made as soon as
administratively feasible after the Participant Separates from Service.
25. Plan Section 8.02(b) is deleted entirely and new Plan Section 8.02(b)
is added to read as follows:
(b) A Participant's Accounts not invested in Company Stock shall
be distributed in a lump sum or in equal installments extending over a
period not exceeding the maximum period permitted by Section 8.10, as
elected by the Participant. Distribution shall be made as soon as
administratively feasible after the Participant Separates from Service.
26. Plan Section 8.03(c)(1) is deleted entirely and new Plan Section
8.01(c)(1) is added to read as follows:
(1) A Participant's Accounts invested in Company Stock shall be
distributed in a lump sum or in equal annual installments extending
over a period not exceeding the maximum period permitted by Section
8.10, as elected by the Participant. Distribution shall be made as
soon as administratively feasible after the Committee receives the
Participant's written election.
- 7 -
<PAGE>
27. Plan Section 8.03(c)(2) is deleted entirely and new Plan Section
8.01(c)(2) is added to read as follows:
(2) A Participant's Accounts not invested in Company Stock shall
be distributed in a lump sum or in equal annual installments
extending over a period not exceeding the maximum period permitted
by Section 8.10, as elected by the Participant. Distribution shall
be made as soon as administratively feasible after the Committee
receives the Participant's written election.
28. Plan Section 8.04(c)(1) is deleted entirely and new Plan Section
8.01(c)(1) is added to read as follows:
(1) A Participant's Accounts invested in Company Stock shall be
distributed in a lump sum or in equal annual installments extending
over a period not exceeding the maximum period permitted by Section
8.10, as elected by the Participant. Distribution shall be made as
soon as administratively feasible after the Committee receives the
Participant's written election.
29. Plan Section 8.04(c)(2) is deleted entirely and new Plan Section
8.01(c)(2) is added to read as follows:
(2) A Participant's Accounts not invested in Company Stock shall
be distributed in a lump sum or in equal annual installments
extending over a period not exceeding the maximum period permitted
by Section 8.10, as elected by the Participant. Distribution shall
be made as soon as administratively feasible after the Committee
receives the Participant's written election.
30. Plan Section 8.07 is deleted entirely and new Plan Section 8.07 is
added to read as follows:
Section 8.07. Permitted Withdrawals from Matching, Basic,
------------ -------------------------------------------
Bonus and Rollover Accounts. A Participant may withdraw assets in
---------------------------
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<PAGE>
his Matching, Basic, Bonus and Rollover Accounts only as provided in
Section 8.08 with respect to permitted withdrawals from Salary
Reduction Accounts.
31. New Plan Section 8.09(j) is added to read as follows:
(j) Notwithstanding any provision of the Plan to the contrary, a
Participant may not obtain a loan from the Plan after March 31, 1997. A
Participant who obtained a loan from the Plan prior to April 1, 1997,
shall repay the outstanding balance of any such loan according to the
provisions of this Section 8.09 and the written guidelines established
by the Committee.
32. Plan Section 8.10(a) is deleted entirely and new Plan Section 8.10(a)
is added to read as follows:
(a) Subject to the provisions of Section 8.17, distribution of a
Participant's Accounts must begin not later than one year after the
close of the Plan Year:
(1) in which the Participant Separates from Service by
reason of attainment of age 65, disability, or death; or
(2) that is the 5th Plan Year following the Plan Year
in which the Participant Separates from Service for a reason not
listed in paragraph (1), except that this Paragraph shall not
apply if the Participant is reemployed by the Employer before
the 5th Plan Year.
33. Plan Section 8.13 is deleted entirely and new Plan Section 8.13 is
added to read as follows:
Section 8.13. Voting With Respect to Company Stock. The
------------ ------------------------------------
Trustee shall vote all Company Stock held by it as part of the Plan
assets at such time and in such manner as the Administrator shall
direct. Provided, however, that if any agreement entered into by the
Trustee, upon the direction of the Administrator, provides for voting
of any shares of Company Stock pledged as security for any obligation
of the Plan, then such shares of Company Stock shall be voted in
accordance with such agreement. If the Administrator fails or refuses
- 9 -
<PAGE>
to give the Trustee timely instructions as to how to vote any Company
Stock held by the Trustee and which the Administrator otherwise has the
right to vote, the Trustee shall not vote such Company Stock and shall
consider the Administrator's failure or refusal to give timely
instructions as an exercise of the Administrator's rights and a
directive to the Trustee not to vote said Company Stock. The Trustee
shall not vote Company Stock when a Participant or Beneficiary,
pursuant to this Section, fails to exercise a right to vote Company
Stock.
Notwithstanding the foregoing, if the Employer has a registration-
type class of securities, each Participant or Beneficiary shall be
entitled, in lieu of the Administrator, to direct the Trustee as to the
manner in which the Company Stock allocated to the Account of such
Participant or Beneficiary is to be voted. If the Employer does not
have the registration-type class of securities, each Participant or
Beneficiary in the Plan shall be entitled, in lieu of the
Administrator, to direct the Trustee as to the manner in which voting
rights on shares of Company Stock which are allocated to the Account of
such Participant or Beneficiary are to be exercised with respect to any
corporate matter which involves the voting of such shares with respect
to any corporate matter which involves the voting of such shares with
respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation,
dissolution, sale of substantially all assets of a trade or business,
or such similar transaction as prescribed in Regulations. For purposes
of this Section the term "registration-type class of securities" means
(A) a class of securities required to be registered under Section 12 of
the Securities Exchange Act of 1934; and (B) a class of securities
which would be required to be so registered except for the exemption
from registration provided in subsection (g)(2)(H) of such Section 12.
The Trustee shall notify each Participant or Beneficiary of each
tender or exchange offer and utilize its best efforts to distribute or
cause to be distributed to such Participant or Beneficiary in a timely
manner all information received by the Trustee as a recordholder of
shares of Company Stock in connection with any such tender or exchange
offer. Each Participant or Beneficiary shall have the right from time
to time with respect to the shares of Company stock allocated to his
Account, to instruct the Trustee in writing as to the manner in which
to response to any tender or exchange offer which shall be pending or
which may be made in the future for all shares of
- 10 -
<PAGE>
Company Stock or any portion thereof. A Participant's or Beneficiary's
instructions shall remain in force until superseded in writing by the
Participant or Beneficiary. The Trustee shall tender or exchange such
shares of Company Stock as and to the extent so instructed. Unless and
until shares of Company Stock are tendered or exchanged, the individual
instructions received by the Trustee from Participant or Beneficiaries
shall be held in strict confidence by the Trustee and shall not be
divulged or released to any person, including, but not limited to
officers or Employees or the Employer, or of any other related
Employer; provided, however, that the Trustee shall advise the
Employer, at any time upon request, of the total number of shares not
subject to instructions to tender or exchange. The Trustee shall not
make recommendations to Participants or Beneficiaries on whether to
instruct the Trustee to tender or exchange.
The Trustee shall not vote, sell, convey or transfer any allocated
shares of Company Stock for which no directions are timely received
from Participants or Beneficiaries pursuant to the immediately
preceding paragraph.
34. Plan Section 13.06 is deleted in its entirety and new Section 13.06 is
added to read as follows:
13.06. Payment of Benefits Upon Termination. Upon
----- ------------------------------------
termination of the Plan, the Trust shall continue in existence for the
purpose of administering the Trust Assets and the payment in full of
all benefits pursuant to the provisions of Article VIII as Participants
become entitled to payments thereunder as if the Plan were ongoing.
35. The Addendum to Article V of the Plan is amended to read as follows:
Pursuant to Sections 5.02 and 5.03 of the Plan, Salary
Reduction, Rollover, Matching, Basic and Bonus Accounts shall be
invested in the following Funds:
FIDELITY MAGELLAN FUND - Fidelity Magellan Fund seeks capital
appreciation. It invests primarily in common stocks and convertible
securities, with up to 20% of its assets invested in debt securities of
all types and qualities. It features domestic corporations operating
primarily in the United States, domestic corporations that have
significant activities and interests outside the U.S., and foreign
- 11 -
<PAGE>
companies. No limitations are placed on total foreign investment, but
no more than 40% of its assets will be invested in companies operating
exclusively in one foreign country. The Fund may be appropriate for
investors seeking long-term growth who do not require a steady flow of
income.
BERGER 100 FUND - Berger 100 Fund seeks long-term capital appreciation
and income is incidental. It invest primarily in common stocks of
established companies. It may also purchase other types of securities,
such as convertibles, government issues, senior debt, and preferred
stocks. The Fund may purchase put and call options on stock indices
with up to 1% of Fund assets. Foreign issues may be purchased by the
Fund without a specified limit. The Fund may invest in zero coupon
bonds and "strips." The Fund may be appropriate for investors seeking
long-term capital appreciation who are comfortable assuming the risks
and volatility of an aggressive growth fund, and do not require a
steady flow of income. It may be best viewed as a long-term investment,
because the return may be volatile over the short term.
OPPENHEIMER MAIN STREET INCOME AND GROWTH FUND CLASS A -Oppenheimer
Main Street Income and Growth Fund Class A seeks total return. It
invests in income-producing common stocks, preferred stocks,
convertible securities, bonds, debentures, and notes. The percentage of
the Fund's portfolio invested in the different types of permitted
investments and the maturities of debt instruments vary from time to
time. The Fund may purchase convertible securities rated as low as D.
The Fund may be appropriate or investors seeking appreciation and
quarterly dividends. It may be best viewed as a long-term investment,
because the return may be volatile over a short-term period. Coupling
this growth potential with income investing, the Fund offers investors
participation in rising markets and valuable downside protection.
STRONG GOVERNMENT SECURITIES FUND - Strong Government Securities Fund
seeks current income with capital appreciation as a secondary
objective. The Fund normally invests at least 80% of its assets in
government securities. The balance of assets may be invested in other
investment-grade fixed-income securities. The Fund may engage in
hedging activities through the use of futures and options contracts. It
expects a relatively high turnover rate, but intends to
- 12 -
<PAGE>
limit turnover so that realized gains on securities held for less than
three months do not exceed 30% of its gross income. The average-
weighted portfolio maturity varies in response to changing interest
rates. The Fund may be appropriate for investors seeking a higher level
of income and who are willing to accept a higher degree of interest
rate risk.
SPARTAN MONEY MARKET FUND - Spartan Money Market Fund invests in U.S.
Government obligations, certificates of deposit, banker acceptance,
commercial paper, and repurchase agreements.
COMPANY STOCK FUND - The Company Stock fund contains Mail-Well, Inc.
common stock and cash.
Pursuant to Subsections 5.02(b) and 5.03(b), the Spartan Money
Market Fund is designated as the Fund in which accounts will be
invested in the absence of Participant direction.
This Plan amendment and the related consent of the Trustee may be executed
in any number of counterparts, each of which shall be considered an original.
IN WITNESS WHEREOF, the Company has executed this Amendment to the Plan on
this ______ day of ______________ 1997, to be effective as provided herein.
SHEPARD POORMAN COMMUNICATIONS CORPORATION:
By:_________________________________________________________
Title:______________________________________________________
CONSENT OF TRUSTEE
Peoples Bank and Trust Company hereby consents to the foregoing amendment
to the Shepard Poorman Communications Corporation Employee Stock Ownership Plan.
PEOPLES BANK AND TRUST COMPANY
By:_________________________________________________________
Title:______________________________________________________
Date:_______________________________________________________
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<PAGE>
EXHIBIT 5
May 8, 1997
Mail-Well, Inc.
23 Inverness Way East, Suite 160
Englewood, Colorado 80112
Ladies and Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") which is expected to be
filed by Mail-Well, Inc. (the "Company") on or about May 8, 1997, with respect
to the offer and sale of 1,590,000 additional shares of the Company's common
stock, $.01 par value ("Company Stock"), issuable under the Mail-Well
Corporation 401(K) Savings Retirement Plan, the Shepard Poorman Communications
Corporation Employee Stock Ownership Plan, the 1996 Directors Stock Option Plan
and the Mail-Well Corporation Employee Stock Ownership Plan (the "Plans") as
described in the Registration Statement.
We have examined such records and documents and have made such
investigations of law as we have deemed necessary under the circumstances.
Based on that examination and investigation, it is our opinion that the shares
of Company Stock referred to above will be, when sold in accordance with the
Plan and in the manner described in the Registration Statement, validly issued,
fully paid and non-assessable.
Sincerely yours,
ROTHGERBER, APPEL, POWERS & JOHNSON LLP
/s/ Rothgerber, Appel, Powers & Johnson LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Mail-Well, Inc. on Form S-8 of our reports dated February 10, 1997, appearing in
the Annual Report on Form 10-K of Mail-Well, Inc. for the year ended December
31, 1996.
DELOITTE & TOUCHE LLP
/s/ Deloitte & Touche LLP
Denver, Colorado
May 6, 1997
<PAGE>
EXHIBIT 23.2
May 8, 1997
CONSENT OF LEGAL COUNSEL
Mail-Well, Inc.
23 Inverness Way East, Suite 160
Englewood, Colorado 80112
Ladies and Gentlemen:
We consent to the use in the Form S-8 Registration Statement of Mail-Well,
Inc. (the "Company"), to be filed on or about May 8, 1997, relating to the
registration of shares under the Mail-Well Corporation 401(K) Savings Retirement
Plan, the Shepard Poorman Communications Corporation Employee Stock Ownership
Plan, the 1996 Directors Stock Option Plan and the Mail-Well Corporation
Employee Stock Ownership Plan, of our name and the statement with respect to our
firm under the heading of "Interests of Named Experts and Counsel" in the
Registration Statement.
Sincerely yours,
ROTHGERBER, APPEL, POWERS & JOHNSON LLP
/s/ Rothgerber, Appel, Powers & Johnson LLP
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
Each person executing this Power of Attorney hereby appoints Roger
Wertheimer and Paul V. Reilly, or either of them, as his attorney-in-fact to
execute and to file such amendments to this Form S-8 Registration Statement as
such attorneys-in-fact, or either of them, may deem appropriate or withdraw from
the registration process this Registration Statement.
MAIL-WELL, INC.
By:/s/ Gerald F. Mahoney
---------------------
Gerald F. Mahoney, Chief Executive Officer
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Gerald F. Mahoney Director, Chairman May 7, 1997
- ------------------------------------
Gerald F. Mahoney of the Board and CEO
/s/ Robert J. Terry Director, President May 7, 1997
- ------------------------------------
Robert J. Terry and CEO
/s/ Paul V. Reilly Vice President, Chief May 7, 1997
- ------------------------------------
Paul V. Reilly Financial Officer
(Principal Financial Officer)
/s/ Jana L. Brown Vice President, May 7, 1997
- ------------------------------------
Jana L. Brown Controller (Principal
Accounting Officer)
/s/ Frank J. Hevrdejs Director May 7, 1997
- ------------------------------------
Frank J. Hevrdejs
/s/ Susan O. Rheney Director May 7, 1997
- ------------------------------------
Susan O. Rheney
/s/ Frank P. Diassi Director May 7, 1997
- ------------------------------------
Frank P. Diassi
/s/ J. Bruce Duty Director May 7, 1997
- ------------------------------------
J. Bruce Duty
/s/ Jerome W. Pickholz Director May 7, 1997
- ------------------------------------
Jerome W. Pickholz
/s/ W. Thomas Stephens Director May 7, 1997
- ------------------------------------
W. Thomas Stephens
</TABLE>
<PAGE>
SHEPARD POORMAN COMMUNICATIONS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
By: /s/ Melissa Shettsline
-------------------------------------------------
Melissa Shettsline
Member of the Benefits Administration Committee
(the Plan Administrator)
MAIL-WELL CORPORATION 401(k) SAVINGS RETIREMENT PLAN
By: /s/ Melissa Shettsline
-------------------------------------------------
Melissa Shettsline
Member of the Benefits Administration Committee
(the Plan Administrator)
- 2 -
