As filed with the Securities and Exchange Commission on November 24, 1997
REGISTRATION NO. 333 - ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RIVIANA FOODS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0177572
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2777 Allen Parkway, Houston, Texas 77019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
1997 STOCK OPTION PLAN
RIVIANA FOODS INC. SAVINGS PLAN
(INCLUDING THE RIVIANA FOODS INC. STOCK FUND)
(FULL TITLE OF THE PLANS)
W. David Hanks
2777 Allen Parkway
Houston, Texas 77019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(713) 529-3251
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Amount to Proposed maximum Proposed
Title of securities to be be registered offering price maximum aggregate Amount of
registered (1) per share (2) offering price (2) registration fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00
per share par value 1,200,000 $19.50 $23,400,000 $7,091
("Common Stock") shares
=========================================================================================================================
</TABLE>
(1) Represents the maximum number of shares which could be purchased (i) upon
the exercise of all stock options which may be granted under the 1997
Stock Option Plan, and (ii) pursuant to the Savings Plan. In addition,
pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan(s) described
herein.
<PAGE>
(2) Estimated solely for purposes of calculating the registration fee,
pursuant to Rule 457(c) and (h), based on the average of the high and low
prices reported by the Nasdaq National Market on November 20, 1997 with
respect to 1,200,000 shares of Common Stock.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission by Riviana Foods Inc. (the "Company"), are incorporated
herein by reference and made a part hereof: (a) Annual Report on Form 10-K for
the year ended June 29, 1997; (b) Quarterly Report on Form 10-Q for the quarter
ended September 28, 1997; and (c) description of the Common Stock contained in
the Form 8-A filed on December 21, 1994, as amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, subsequent to the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the DGCL provides that a corporation may 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 he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request for 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 him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or such action, suit or proceeding if he acted in
good faith and in a manner he 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 his conduct was unlawful. The
termination of any action, suit or proceeding by judgement, order, settlement,
conviction or upon a plea of NOLO CONTENDREER or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he 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 his conduct was unlawful.
Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made 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 he 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, join venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he 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
1
<PAGE>
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 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.
Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in subsection
(a) and (b) of Section 145, or in defense of any claim, issue or matter therein,
he shall be in indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith; provided, however, that
with respect to acts or omission occurring after July 1, 1997, indemnification
is not mandatory.
Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in subsections (a) and (b) of Section 145. Such determination shall be
made (i) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even thought less than a quorum; (ii) by a committee of
directors who are not parties to such action, if the committee is designated by
a majority of such directors, even though less than a quorum; (iii) if there are
no such directors, by independent legal counsel in a written opinion or (iv) by
the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action ,suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in Section 145. Such
expenses (including attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
Section 145(f) of the DGCL states that the indemnification and advancement
of expense provided by, or granted pursuant to, the other subsections of Section
145 shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the
power to purchase and maintain insurance on behalf of any person who 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 the enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of Section 145.
Section 145(j) of the DGCL states that the indemnification and advancement
of expenses provided by or granted pursuant to, Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be director, officer, employee or agent and shall inure to the benefit
of the heirs, executors and administrators of such a person.
The Company's Bylaws require the Company to indemnify and advance expenses
to the Company's directors and officers to the maximum extent allowed by the
Delaware General Corporation Law and other applicable law, and expressly
authorize the Company to purchase directors and officers liability insurance.
The Company has purchased a directors and officers liability insurance policy
which provides for insurance of the directors and officers of the Company
against certain liabilities they may incur in their capacity as such.
2
<PAGE>
The Restated Certificate of Incorporation of the Company expressly
provides that no director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director, provided that such provisions do not eliminate or limit any
liability of a director (a) for any breach of the director's duty of loyalty to
the Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the Delaware General Corporation Law, as the same exists or
hereafter may be amended, or (d) for any transaction from which the director
derives an improper personal benefit.
Reference is made to the form of the 1997 Stock Option Plan, filed as
Exhibit 99.1 which contains provisions for indemnification and limitations on
the liability of the committee administering such Plan for actions taken in
connection with the administration of such Plan.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. EXHIBIT
4.1 Restated Certificate of Incorporation of the
Company dated December 28, 1994 as amended to
date. Incorporated by reference to Amendment No. 2
to the Company's Registration Statement on Form
S-1 dated March 2, 1995, Exhibit 3.01.
4.2 Bylaws of the Company. Incorporated by reference
to the Company's Registration Statement on Form
S-1 dated December 22, 1994, Exhibit 3.02.
4.3 Specimen Common Stock certificate of the Company.
Incorporated by reference to Amendment No. 1 to
the Company's Registration Statement on Form S-1
dated February 1, 1995, Exhibit 4.01.
5 Opinion and Consent of Liddell, Sapp, Zivley, Hill
& LaBoon, L.L.P.
15 Letter from Arthur Andersen LLP regarding
unaudited interim financial information.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P. (included in Exhibit 5 to this registration
statement).
24 Powers of Attorney
99.1 1997 Stock Option Plan
99.2 Riviana Foods Inc. Savings Plan (including the
Riviana Foods Inc. Stock Fund)
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement 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.
3
<PAGE>
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, 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 incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The undersigned registrant will submit or has submitted the plan and
any amendment thereto to the Internal Revenue Service ("IRS") in a timely manner
and has made or will make all changes required by the IRS in order to qualify
the plan.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on this 24th day of
November, 1997.
RIVIANA FOODS INC.
By: /s/ JOSEPH A. HAFNER, JR.
(JOSEPH A. HAFNER, JR.,
CHIEF EXECUTIVE OFFICER)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
THE REGISTRANT
SIGNATURES TITLE DATE
---------- ----- ----
/s/ JOSEPH A. HAFNER, JR. President, Chief Executive November 24, 1997
(JOSEPH A. HAFNER, JR.) Officer and Director
(Principal executive officer)
/s/ FRANK A. GODCHAUX III* Chairman of the Board of November 24, 1997
(FRANK A. GODCHAUX III) Directors
/s/ CHARLES R. GODCHAUX* Vice Chairman of the Board November 24, 1997
(CHARLES R. GODCHAUX) of Directors
/s/ W. DAVID HANKS* Executive Vice President November 24, 1997
(W. DAVID HANKS) and Director
/s/ E. WAYNE RAY, JR.* Vice President, Chief Financial November 24, 1997
(E. WAYNE RAY, JR.) Officer, Treasurer and Director
(Principal financial and
accounting officer)
/s/ THERESA G. PAYNE* Director November 24, 1997
(THERESA G. PAYNE)
/s/ W. ELTON KENNEDY* Director November 24, 1997
(W. ELTON KENNEDY)
/s/ E. JAMES LOWREY* Director November 24, 1997
(E. JAMES LOWREY)
/s/ PATRICK W. ROSE* Director November 24, 1997
(PATRICK W. ROSE)
/s/ THOMAS B. WALKER, JR.* Director November 24, 1997
(THOMAS B. WALKER, JR.)
/s/ MARY G. WIECK* Director November 24, 1997
(MARY G. WIECK)
<PAGE>
*By his signature below, Joseph A. Hafner, Jr., pursuant to duly executed powers
of attorney filed with the Securities and Exchange Commission, has signed this
registration statement on the date indicated on behalf of the persons listed
above, designated by asterisks, in the capacities set forth opposite their
respective names.
THE PLAN
Pursuant to the requirements of the Securities Act of 1933, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on November 24, 1997.
RIVIANA FOODS, INC. SAVINGS PLAN
By: /s/ JACK M. NOLINGBERG, VICE PRESIDENT
Signature and Title
*By: /s/ JOSEPH A. HAFNER, JR.
(JOSEPH A. HAFNER, JR.,
ATTORNEY-IN-FACT)
EXHIBIT INDEX
4.1 Restated Certificate of Incorporation of the
Company dated December 28, 1994 as amended to
date. Incorporated by reference to Amendment No. 2
to the Company's Registration Statement on Form
S-1 dated March 2, 1995, Exhibit 3.01.
4.2 Bylaws of the Company. Incorporated by reference
to the Company's Registration Statement on Form
S-1 dated December 22, 1994, Exhibit 3.02.
4.3 Specimen Common Stock certificate of the Company.
Incorporated by reference to Amendment No. 1 to
the Company's Registration Statement on Form S-1
dated February 1, 1995, Exhibit 4.01.
5 Opinion and Consent of Liddell, Sapp, Zivley, Hill
& LaBoon, L.L.P.
15 Letter from Arthur Andersen LLP regarding
unaudited interim financial information.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P. (included in Exhibit 5 to this registration
statement).
24 Powers of Attorney
99.1 1997 Stock Option Plan
99.2 Riviana Foods Inc. Savings Plan (including the
Riviana Foods Inc. Stock Fund)
EXHIBIT 5
November 24, 1997
Riviana Foods Inc.
2777 Allen Parkway
Houston, Texas 77019
Gentlemen:
We have acted as counsel for Riviana Foods Inc., a Texas corporation (the
"Company"), in connection with the registration, pursuant to a Registration
Statement on Form S-8 to be filed with the Securities and Exchange Commission
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), of the offering and sale to certain employees and directors of the
Company of up to 1,200,000 shares of the Company's common stock, $1.00 par value
("Common Stock"), which may be issued (i) upon the exercise of certain options
granted under the 1997 Stock Option Plan (the "Stock Option Plan"), and (ii)
pursuant to the Riviana Foods Inc. Savings Plan (including the Riviana Foods
Inc. Stock Fund) (the "Savings Plan").
In rendering this opinion, we have examined the corporate records of the
Company, including its amended and restated articles of incorporation, amended
and restated bylaws and minutes of meetings of its directors and shareholders.
We have also examined the Registration Statement, together with the exhibits
thereto, and such other documents as we have deemed necessary for the purposes
of expressing the opinions contained herein. With respect to certain factual
matters we have relied on statements of officers of the Company.
<PAGE>
Riviana Foods Inc.
November 24, 1997
Page 2
Based upon the foregoing, we are of the opinion that (i) when the stock
options granted under the Stock Option Plan have been exercised in accordance
with the terms of the Stock Option Plan, the Common Stock issued thereupon will
be validly issued, fully paid and nonassessable, and (ii) the shares of Common
Stock issued pursuant to the Savings Plan will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as EXHIBIT 5 to the Registration Statement. In giving this
consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act and the rules and
regulations thereunder.
Very truly yours,
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
November 20, 1997
Riviana Foods Inc:
We are aware that Riviana Foods Inc. has incorporated by reference in its
Form S-8 Registration Statement covering the 1997 Stock Option Plan its Forms
10-Q for the quarter ended September 28, 1997, which include our report dated
October 15, 1997, respectively, covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities
Act of 1933, this report is not considered a part of the registration
statement prepared or certified by our firm or a report prepared or certified
by our firm within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 12, 1997
included in Riviana Foods Inc.'s Form 10-K for the year ended June 29, 1997 and
to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
November 20, 1997
EXHIBIT 24
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ PATRICK W. ROSE
Patrick W. Rose
Director
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ FRANK A. GODCHAUX III
Frank A. Godchaux III
Chairman of the Board of Directors
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ CHARLES R. GODCHAUX
Charles R. Godchaux
Vice Chairman of the Board of Directors
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ W. DAVID HANKS
W. David Hanks
Executive Vice President and Director
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ E. WAYNE RAY, JR.
E. Wayne Ray, Jr., Vice President,
Treasurer & Chief Financial Officer
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ W. ELTON KENNEDY
W. Elton Kennedy
Director
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ E. JAMES LOWREY
E. James Lowrey
Director
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ THERESA G. PAYNE
Theresa G. Payne
Director
<PAGE>
SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ THOMAS B. WALKER, JR.
Thomas B. Walker, Jr.
Director
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SPECIAL POWER OF ATTORNEY
The undersigned, being a director of Riviana Foods Inc., a Delaware
corporation hereinafter referred to as the "Company," does hereby constitute and
appoint Joseph A. Hafner, Jr. of Harris County, Texas, as attorney-in-fact for
the undersigned with full power of substitution, and in the name, place and
stead of the undersigned, to execute, deliver, record and file the Registration
Statement on Form S-8 registering shares of the Company's common stock, par
value $1.00 per share, issuable pursuant to the 1997 Stock Option Plan, and the
Riviana Foods Inc. Savings Plan (which will include the Riviana Foods Inc. Stock
Fund), and the plan interests therein, including all amendments and exhibits to
the Registration Statement, and all other documents in connection therewith,
with the Securities and Exchange Commission, and to perform each and every other
act requisite and necessary to be done to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission.
November 21, 1997 /s/ MARY G. WIECK
Mary G. Wieck
Director
EXHIBIT 99.1
RIVIANA FOODS INC.
1997 STOCK OPTION PLAN
1. PURPOSE
This 1997 Stock Option Plan (the "Plan") is intended as an incentive and
to encourage stock ownership by certain officers and other eligible employees of
Riviana Foods Inc. (the "Corporation"), or of its subsidiary corporations (the
"Subsidiary" or "Subsidiaries") as that term is defined in Section 424(f) of the
Internal Revenue Code of 1986 (the "Code"), or of its affiliates and joint
ventures of which the Corporation is an equal partner or majority owner (the
"Affiliate" or "Affiliates"), so that they may acquire or increase their
proprietary interest in the Corporation and to reward them for services to the
Corporation, the Subsidiaries or the Affiliates in a manner that creates an
incentive to increase the value of the stock of the Corporation and also to
strengthen the Corporation's ability to attract and retain officers and key
employees in the employ of the Corporation. Options granted pursuant to the Plan
shall be either Incentive Stock Options ("ISO's") meeting the requirements of
Section 422 of the Code, or any succeeding provisions, or Nonqualified Stock
Options ("NQSO's") (collectively an "Option" or the "Options").
2. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date the Plan is adopted or the date the
Stockholders approve the Plan, whichever is earlier.
3. ADMINISTRATION
The Plan shall be administered by a committee appointed by the Board of
Directors of the Corporation (the "Committee"). The Committee shall consist of
not less than two members of the Corporation's Board of Directors. The Board of
Directors may from time to time remove members from or add members to the
Committee. Vacancies on the Committee, however, caused, shall be filled by the
Board of Directors. The Committee shall select one of its members as Chairman
and shall hold meetings at such times and places as it may determine. The action
of a majority of the Committee at which a quorum is present, or acts reduced to
or approved in writing by a majority of the members of the Committee, shall be
valid acts of the Committee. Each director, while a member of the Committee,
shall meet the definition of "Non-Employee Director" contained in Rule 16b-3
("Rule 16b-3") promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act").
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a. AUTHORITY. The Committee shall periodically in its discretion have
the authority to designate the eligible employees who shall be
granted Options, the number of shares to be optioned to each
optionee, and to establish any other Option terms and
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conditions consistent with provisions of the Plan. The
interpretation and construction by the Committee of any provisions
of the Plan or of any Option granted under it shall be final. No
member of the Board of Directors or the Committee shall be liable
for any action or determination made in good faith with respect to
the Plan or any Option granted under it.
b. DELEGATION OF AUTHORITY. The Committee may delegate some or all of
its authority to the Chief Executive Officer or other senior member
of management as it may determine in its discretion; provided,
however, that any such delegation shall be in writing and that the
Committee may not delegate its authority with regard to any matter
or action affecting an officer subject to Section 16 of the 1934
Act.
c. SECTION 162(M) OF THE CODE. With regards to all eligible employees,
the Plan shall for all purposes, be interpreted and construed in
accordance with Section 162(m) of the Code.
4. ELIGIBILITY
Full time employees (an "Optionee" or collectively, "Optionees") of the
Corporation or its Subsidiaries or its Affiliates (including officers, whether
or not they are directors) shall be able to participate in the Plan if
designated by the Committee and who in the opinion of the Committee, can further
the Plan's purpose.
5. STOCK
a. SOURCES OF SHARES. The stock subject to the Options shall be shares of
the Corporation's authorized and unissued or reacquired $1 par value Common
Stock (the term "shares" as used herein shall refer to shares of said $1 par
value Common Stock of the Corporation, and the term "Shares" shall refer to
shares that are subject to an Option granted under the Plan). The shares
available for granting Options under the Plan shall be increased by any Options
which terminate by expiration, forfeiture, cancellation or otherwise without the
issuance of such shares. In addition, any shares reserved for issuance under the
Corporation's 1994 Stock Option Plan ("the 1994 Plan") in excess of the number
of shares as to which options have been granted thereunder, plus any shares to
which options granted under the 1994 Plan may terminate, expire, forfeit or
cancel, shall also be reserved and available for issuance or re-issuance under
the Plan. Shares under the Plan may be delivered by the Corporation from its
authorized but un-issued shares of Common Stock or from Common Stock held in the
Corporation's Treasury.
b. MAXIMUM SHARES. The aggregate number of shares that may be issued under
Options pursuant to the Plan shall not exceed 1,000,000 shares. The limitations
established in Section 7 of the Plan shall be subject to adjustment as provided
in Section 9 of the Plan.
6. FORM OF OPTIONS
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Options granted pursuant to the Plan need not be uniform and may be made
selectively among eligible employees who received, or who are eligible to
receive Options, whether or not such eligible employees are similarly situated.
7. LIMITATIONS
(a) The aggregate fair market value (determined at the date of grant of an
ISO in accordance with Section 8(c) of the Plan) of shares with respect to which
Options first become exercisable by an Optionee in any calendar year shall not
exceed $100,000, plus any carryover amount permitted under the Code.
(b) No Options shall be granted to any person who, on the date of the
grant, is the owner of more than 10% of the total combined voting power of the
Corporation, the Subsidiaries or the Affiliates.
8. TERMS AND CONDITIONS
(a) INDIVIDUAL STOCK OPTION AGREEMENTS. Each Option granted pursuant to
the Plan shall be evidenced by a written agreement, specifying the number of
shares of Stock covered thereby, in such form as the Committee shall from time
to time approve.
(b) TERM OF OPTIONS. All Stock Options shall not expire later than ten
(10) years from the effective date of the Option's grant.
(c) OPTION PRICE. Each Option shall state the Option price, which shall
not be less than 100% of the fair market value of the Shares subject to the
Option. Fair market value shall be determined as the last closing price of the
shares on the NASDAQ National Market System on the date that the Option is
granted by the Committee. Subject to the foregoing, the Committee, in fixing the
Option price, shall have full authority and discretion and be fully protected in
doing so.
(d) METHOD AND TIME OF PAYMENT. The Option price shall be payable on the
exercise of the Option and may be paid (i) in United States Dollars in cash or
by check, or (ii) by transferring a number of shares, previously owned for a
period of at least six months, valued as provided in Section (c) above, as of
the date of transfer having a value equal to the Option price, or (iii) by any
combination thereof.
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(e) VESTING. The shares covered by an Option may be purchased in such
installments and on such exercise dates as the Committee may determine.
(f) TRANSFERABILITY AND NON-ASSIGNABILITY. Notwithstanding any other
provision of this Plan to the contrary, no Option granted under this Plan shall
be transferable or assignable by the Optionee otherwise than by will or under
the laws of descent and distribution of the state or country in which the
Optionee resided on the date of Optionee's death or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act or the rules thereunder and allowed by Section
424(c)(4) of the Code, nor shall any Option be granted to or exercisable, during
the Optionee's lifetime, by anyone other than the Optionee.
(g) CONDITIONS TO EXERCISE OF OPTIONS. In order to exercise an Option
granted hereunder, in whole or in part, the Optionee must meet any additional
specific conditions imposed by the Committee at the time of the granting of the
Option. Such conditions, which is achieved, and in the discretion of the
Committee, may result in exercisability or early exercisability of the Option
provided that no Option granted under this Plan (or any portion thereof) shall
be exercisable within one (1) year after the date of grant. Such specific
conditions may be in the form of achievement goals for the individual Optionee
based upon predetermined minimum increases over a specified period or periods of
time, in sales, gross profits, pre-tax earnings, productivity, or other goals or
standards. The imposition of such achievement goals and conditions shall be in
the sole discretion of the Committee. Such goals and conditions may differ
between individual employees of the Corporation or of its Subsidiaries,
affiliates and joint ventures, between classes of employees of the Corporation
or any Subsidiary, or Affiliate, and separately as a class between the employees
of the Corporation, and the employees of the Subsidiaries or the Affiliates.
(h) DEATH OF OPTIONEE AND TRANSFER OF OPTION. If the Optionee shall die
while in the employ of the Corporation, the Subsidiary, or the Affiliate and
shall not have fully exercised the Option, the Option may be exercised, subject
to the condition that no Option shall be exercisable after the expiration of ten
years from the date it is granted, to the extent that Optionee's right to
exercise such Option had accrued pursuant to this Section 8 of the Plan at the
time of the Optionee's death and had not previously been exercised, at any time
within one (1) year after the Optionee's death, by the executors or
administrators of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.
(i) TERMINATION OF EMPLOYMENT. (i) Upon termination of the Optionee's
employment by reason of permanent and total disability as defined under Section
22(e)(3) of the Code, an Option may be exercised, but only to the extent
exercisable on the date of such permanent and total disability, within one (1)
year from and after the date of such termination of employment. (ii) Upon
termination of the Optionee's employment by reason of retirement, an Option may
be exercised, but only to the extent exercisable on the date of such retirement,
[within (1) year] from and after the date of such termination of employment.
(iii) Upon termination of the Optionee's employment by reason of termination,
other than retirement or disability as defined by clause (i) or (ii) of this
Section 8(i), an Option may be exercised, but only to the extent exercisable on
the date of such termination,
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within three (3) months from and after the date of such termination of
employment. (iv) A transfer of the Optionee's employment from one Subsidiary or
Affiliate to another shall not be deemed to be a termination of the Optionee's
employment.
(j) LEAVE OF ABSENCE. The Committee shall be entitled to make such rules,
regulations and determination as it deems appropriate under the Plan in respect
of any leave of absence taken by an Optionee. Without limiting the generality of
the foregoing, the Committee shall be entitled to determine (i) whether or not
any such leave of absence shall constitute a termination of employment within
the meaning of the Plan and (ii) the impact, if any, of any such leave of
absence on Options granted under the Plan theretofore made to any Optionee who
takes such leave of absence.
9. CHANGES IN CAPITALIZATION
Subject to any required action by the stockholders, the number of shares
covered by each outstanding Option and the price per share of each such Option
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of the Corporation resulting from a subdivision or consolidation
of shares or the payment of a stock dividend (but only on the shares) or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Corporation.
If the Corporation merges or consolidates with another corporation,
whether or not the Corporation is a surviving corporation, or if the Corporation
is liquidated or sells or otherwise disposes of substantially all of its assets
while unexercised Options remain outstanding under the Plan, (i) subject to the
provisions of clause (iii) of this Section 9 below, after the effective date of
the merger, consolidation, liquidation, sale or other disposition, as the case
may be, each holder of an outstanding Option shall be entitled, upon exercise of
that Option, to receive, in lieu of shares, the number and class or classes of
shares of stock or other securities or property to which the holder would have
been entitled if, immediately prior to the merger, consolidation, liquidation,
sale or other disposition, the holder had been the holer of record of a number
of shares equal to the number of shares as to which that Option may be
exercised; (ii) the Board of Directors may waive any limitations set forth in or
imposed pursuant to this Plan so that all Options, from and after a date prior
to the effective date of such merger, consolidation, liquidation, sale or other
disposition, as the case may be, specified by the board of Directors, shall be
exercisable in full; and (iii) all outstanding Options may be canceled by the
Board of Directors as of the effective date of any merger, consolidation,
liquidation, sale or other disposition, provided that any Optionee shall have
the right immediately prior to such event to exercise his Option to the extent
such Optionee is otherwise able to do so in accordance with this Plan and his
individual stock option agreement.
In the event of a change in the shares of the Corporation as presently
constituted that is limited to a change of all of its authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the
shares within the meaning of the Plan.
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To the extent that the foregoing adjustments relate to stock or securities
of the Corporation, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive; provided
that the character of an Option shall be not adjusted in a manner that causes
the Option to not qualify under the terms and conditions of that Option or the
meaning of the Plan.
Except as hereinbefore expressly provided in this Section 9, the Optionee
shall have no rights (i) by reason of any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class, or (ii) by reason of
any dissolution, liquidation, merger, or consolidation, spin-off of assets or
stock of another corporation, or any issue by the Corporation of shares of stock
of any class, nor shall any of these actions affect or cause an adjustment to be
made with respect to, the number or price of shares subject to an Option.
The grant of any Option pursuant to the Plan shall not affect in any way
the right or power of the Corporation (i) to make adjustments, reclassification,
reorganization or changes of its capital or business structure, (ii) to merge or
consolidate, (iii) to dissolve, liquidate or sell or transfer all or any part of
its business or assets, or (iv) to issue any bonds, debentures, preferred or
other preference stock ahead of or affecting the shares. If any action described
in the preceding sentence results in a fractional share for any Optionee under
any Option hereunder, such fraction shall be disregarded and Optionee shall only
be entitled to the whole number of shares resulting from such adjustment.
10. RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any Shares covered by his Option until the date of
the issuance of a stock certificate to him for such shares. no adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 8 and Section 9 hereof.
11. INVESTMENT PURPOSE
The Company shall not be obligated to sell or issue any shares pursuant to
any Option unless the shares with respect to which the Option is being exercised
are at the time effectively registered or exempt from registration under the
Securities Act of 1933, as amended.
Notwithstanding anything in the Plan to the contrary, each Option under
the Plan shall be granted on the condition that the purchase of shares
thereunder shall be for investment purposes, and not with a view to resale or
distribution. However, if the shares subject to such Option are registered under
the Securities Act of 1933, as amended, or if a resale of such shares without
such registration otherwise would be permissible, such condition shall be
inoperative if in the opinion of counsel for the Corporation such condition is
not required under the Securities Act of 1933, as amended, or any other
applicable law, regulation, or rule of any governmental agency.
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12. OTHER PROVISIONS
Options granted under the Plan shall also contain such other provisions as
the Committee or the Board of Directors of the Corporation shall deem advisable
subject to any limitation in the discretion of the Board of Directors required
by Rule 16b-3 under the 1934 Act.
13. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by the independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding (except in relation to matters as to which it shall adjudged
in such action, suit or proceeding that such Committee member is liable for
willful misconduct in the performance of his duties) if within sixty (60) days
after institution of any such action, suit or proceeding a Committee member
shall in writing offer the Corporation the opportunity, at its own expense, to
handle and defend the same.
14. FORFEITURE
Notwithstanding any other provision of this Plan, if the Committee finds
that (i) the Optionee, before or after termination of his employment with the
Corporation, Subsidiary, affiliate or joint venture (as used in this Section 14,
an "Employer"), committed fraud, embezzlement, theft, a felony, or proven
dishonesty in the course of his employment by Employer that damaged Employer, or
disclosed trade secrets of Employer, or (ii) the Optionee, before or after
termination of employment with the Employer for any reason, participated,
engaged in or had a financial or other interest as an employee, officer,
shareholder, owner or otherwise (except as the owner of less than 1% of the
common stock of a corporation whose stock is registered under the 1934 Act), in
any commercial endeavor that is competitive with the business of Employer, then
any outstanding Options that have not been exercised by the Optionee will be
forfeited. The decision of the Committee as to the nature of an Optionee's
conduct, the damage done to Employer and the extent of the Optionee's
competitive activity will be final. No decision of the Committee, however, will
affect the finality of the termination of the Optionee by Employer in any
manner.
15. MISCELLANEOUS
(a) AMENDMENT OF THE PLAN. The Board of Directors of the Corporation may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to Options, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever except that, without
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approval of the stockholders, no such revision or amendment shall change the
number of shares subject to the Plan, change the designation of the class of
employees eligible to receive Options, decrease the price at which Options may
be granted or remove the administration of the Plan from the Committee.
(b) FOREIGN JURISDICTIONS. Options may be granted, without amending the
Plan, to participants who are foreign nationals or employed outside the United
States or both, on such terms and conditions different from those specified in
that Plan as may, in the judgment of the Committee, be necessary or desirable to
further the purpose of the Plan or to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to or
alternative versions of the Plan as it may consider necessary or appropriate for
such purposes without thereby affecting the terms of the Plan as in effect for
any other purpose; provided, however, no such supplement or alternative version
shall (i) increase the number of available shares under Section 5(b) of the
Plan; or (ii) cause the Plan to cease to satisfy any considerations of Rule
16b-3 under the 1934 Act or with respect to employees subject to Section 162(m)
of the Code.
(c) WITHHOLDING TAX REQUIREMENT. Whenever the Corporation proposes or is
required to issue or transfer shares under the Plan, the Corporation shall have
the right to require the Optionee to remit to the Corporation an amount
sufficient to satisfy any federal, state, or local withholding tax requirements
prior to the delivery of any certificate or certificates for such shares.
Alternatively, the Corporation may issue or transfer such shares net of the
number of shares sufficient to satisfy the withholding tax requirements. For
withholding tax purposes, the shares shall be valued on the date the withholding
obligation is incurred.
(d) NO RIGHTS OF EMPLOYMENT. Neither the granting of Options or the
exercise of the same shall be construed as granting the Optionee any right with
respect to continuance of employment with the Corporation, the Subsidiary or the
Affiliate. Except as may otherwise be limited by a written agreement between the
Corporation and the Optionee, the right of the Corporation, the Subsidiary or
the Affiliate to terminate at will the Optionee's employment with it at any time
(whether by dismissal, discharge, retirement or otherwise) is specifically
reserved by the Corporation, the Subsidiary or the Affiliate.
(e) GOVERNING LAWS. The validity, construction, interpretation and effect
of this Plan and instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Delaware, except to the extent
preempted by Federal law, which shall to that extent govern.
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ADOPTED BY THE BOARD OF DIRECTORS
DATE:
APPROVED BY THE STOCKHOLDERS
DATE:
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EXHIBIT 99.2
BARCLAYS
GLOBAL
INVESTORS
Riviana Foods Inc.
Savings Plan and
Trust Agreement
Amended and Restated
Generally Effective January 1, 1997
<PAGE>
Riviana Foods Inc. Savings Plan and Trust
As Amended and Restated Effective January 1, 1997
Riviana Foods Inc. (the "Company"), previously established the Riviana Foods
Inc. Thrift Plan, as renamed the Riviana Foods Inc. Savings Plan (the "Plan"),
effective January 1, 1992, for the exclusive benefit of eligible employees of
the Company and its participating affiliates. The Plan is intended to constitute
a qualified profit sharing plan, as described in Code section 401(a), which
includes a qualified cash or deferred arrangement, as described in Code section
401(k).
The provisions of the Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between Riviana Foods Inc. and
Barclays Global Investors, National Association. The Trust is intended to be tax
exempt, as described in Code section 501(a).
The Plan is intended to comply with the qualification requirements of the Small
Business Job Protection Act of 1996 (the "SBJPA") and is intended to comply in
operation therewith. To the extent that the Plan, as set forth below, is
subsequently determined to be insufficient to comply with such requirements and
any regulations issued under the SBJPA, the Plan shall later be amended to so
comply.
The Plan constitutes an amendment and restatement of the Riviana Foods Inc.
Savings Plan which was originally established effective as of June 20, 1947, as
then named the Riviana Foods Inc. Thrift Plan, and its related trust agreement.
The Plan was last restated effective January 1, 1992 and amended two times
thereafter.
The Riviana Foods Inc. Savings Plan and Trust, as set forth in this document, is
hereby amended and restated effective as of January 1, 1997.
Date: 10/22, 1997 Riviana Foods Inc.
By:/s/ JACK M. NOLINGBERG
Title: VICE PRESIDENT
The trust agreement set forth in those provisions of the Plan and Trust which
relate to the Trustee is hereby executed.
Date: 10/30, 1997 Barclays Global Investors, National Association
by Merrill Lynch, Pierce, Fenner & Smith Inc.
By:/s/ PETER H. SORENSEN
Title: VICE PRESIDENT
Date: 10/30, 1997 Barclays Global Investors, National Association
By Merrill Lynch, Pierce, Fenner & Smith Inc.
By:/s/ DOLORES UPTON
Title:ASST. VICE PRESIDENT
09/15/97
<PAGE>
TABLE OF CONTENTS
1 DEFINITIONS.......................................................... 1
2 ELIGIBILITY.......................................................... 9
2.1 Eligibility................................................... 9
2.2 Ineligible Employees.......................................... 9
2.3 Ineligible, Terminated or Former Participants................. 9
3 PARTICIPANT CONTRIBUTIONS............................................ 10
3.1 401(k) Contribution Election.................................. 10
3.2 After-Tax Contribution Election............................... 10
3.3 Changing a Contribution Election.............................. 10
3.4 Revoking and Resuming a Contribution Election................. 10
3.5 Contribution Percentage Limits................................ 11
3.6 Refunds When Contribution Dollar Limit Exceeded............... 11
3.7 Timing, Posting and Tax Considerations........................ 12
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER
QUALIFIED PLANS...................................................... 13
4.1 Rollover Contributions........................................ 13
4.2 Transfers From and To Other Qualified Plans................... 13
5 EMPLOYER CONTRIBUTIONS............................................... 14
5.1 Company Match Contributions................................... 14
6 ACCOUNTING........................................................... 15
6.1 Individual Participant Accounting............................. 15
6.2 Sweep Account is Transaction Account.......................... 15
6.3 Trade Date Accounting and Investment Cycle.................... 15
6.4 Accounting for Investment Funds............................... 15
6.5 Payment of Fees and Expenses.................................. 15
6.6 Accounting for Participant Loans.............................. 16
6.7 Error Correction.............................................. 16
6.8 Participant Statements........................................ 17
6.9 Special Accounting During Conversion Period................... 17
6.10 Accounts for Alternate Payees................................. 17
7 INVESTMENT FUNDS AND ELECTIONS....................................... 18
7.1 Investment Funds.............................................. 18
7.2 Responsibility for Investment Choice.......................... 18
7.3 Investment Fund Elections..................................... 18
7.4 Default if No Valid Investment Election....................... 19
7.5 Investment Fund Election Change Fees.......................... 19
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8 VESTING.............................................................. 20
8.1 Fully Vested Accounts......................................... 20
9 PARTICIPANT LOANS.................................................... 21
9.1 Participant Loans Permitted................................... 21
9.2 Loan Application, Note and Security........................... 21
9.3 Spousal Consent............................................... 21
9.4 Loan Approval................................................. 21
9.5 Loan Funding Limits, Account Sources and Funding Order........ 21
9.6 Maximum Number of Loans....................................... 22
9.7 Source and Timing of Loan Funding............................. 22
9.8 Interest Rate................................................. 22
9.9 Loan Payment.................................................. 22
9.10 Loan Payment Hierarchy........................................ 23
9.11 Repayment Suspension.......................................... 23
9.12 Loan Default.................................................. 23
9.13 Call Feature.................................................. 23
10 IN-SERVICE WITHDRAWALS............................................... 24
10.1 In-Service Withdrawals Permitted.............................. 24
10.2 In-Service Withdrawal Application and Notice.................. 24
10.3 Spousal Consent............................................... 24
10.4 In-Service Withdrawal Approval................................ 24
10.5 Payment Form and Medium....................................... 24
10.6 Source and Timing of In-Service Withdrawal Funding............ 25
10.7 Hardship Withdrawals.......................................... 25
10.8 After-Tax Account Withdrawals................................. 28
10.9 Rollover Account Withdrawals.................................. 28
10.11 Over Age 59 1/2Withdrawals.................................... 29
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A
PARTICIPANT'S REQUIRED BEGINNING DATE................................ 30
11.1 Benefit Information, Notices and Election..................... 30
11.2 Spousal Consent............................................... 31
11.3 Payment Form and Medium....................................... 31
11.4 Distribution of Small Amounts................................. 31
11.5 Source and Timing of Distribution Funding..................... 31
11.6 Latest Commencement Permitted................................. 32
11.7 Payment Within Life Expectancy................................ 32
11.8 Incidental Benefit Rule....................................... 32
11.9 Payment to Beneficiary........................................ 33
11.10 Beneficiary Designation....................................... 33
12 ADP AND ACP TESTS.................................................... 34
12.1 Contribution Limitation Definitions........................... 34
12.2 ADP and ACP Tests............................................. 36
12.3 Correction of ADP and ACP Tests............................... 37
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12.4 Multiple Use Test............................................. 38
12.5 Correction of Multiple Use Test............................... 38
12.6 Adjustment for Investment Gain or Loss........................ 39
12.7 Testing Responsibilities and Required Records................. 39
12.8 Separate Testing.............................................. 39
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS......................... 40
13.1 "Annual Addition" Defined..................................... 40
13.2 Maximum Annual Addition....................................... 40
13.3 Avoiding an Excess Annual Addition............................ 40
13.4 Correcting an Excess Annual Addition.......................... 40
13.5 Correcting a Multiple Plan Excess............................. 41
13.6 "Defined Benefit Fraction" Defined............................ 41
13.7 "Defined Contribution Fraction" Defined....................... 41
13.8 Combined Plan Limits and Correction........................... 42
14 TOP HEAVY RULES...................................................... 43
14.1 Top Heavy Definitions......................................... 43
14.2 Special Contributions......................................... 44
14.3 Adjustment to Combined Limits for Different Plans............. 45
15 PLAN ADMINISTRATION.................................................. 46
15.1 Plan Delineates Authority and Responsibility.................. 46
15.2 Fiduciary Standards........................................... 46
15.3 Company is ERISA Plan Administrator........................... 46
15.4 Administrator Duties.......................................... 47
15.5 Advisors May be Retained...................................... 47
15.6 Delegation of Administrator Duties............................ 48
15.7 Committee Operating Rules..................................... 48
16 MANAGEMENT OF INVESTMENTS............................................ 49
16.1 Trust Agreement............................................... 49
16.2 Investment Funds.............................................. 49
16.3 Authority to Hold Cash........................................ 50
16.4 Trustee to Act Upon Instructions.............................. 50
16.5 Administrator Has Right
to Vote Registered Investment Company Shares.................. 50
16.6 Custom Fund Investment Management ............................ 50
16.7 Master Custom Fund............................................ 51
16.8 Authority to Segregate Assets................................. 51
16.9 Maximum Permitted Investment in Company Stock................. 52
16.10 Participants Have Right to Vote and Tender Company Stock...... 52
16.11 Registration and Disclosure for Company Stock................. 52
17 TRUST ADMINISTRATION................................................. 53
17.1 Trustee to Construe Trust..................................... 53
17.2 Trustee To Act As Owner of Trust Assets....................... 53
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17.3 United States Indicia of Ownership............................ 53
17.4 Tax Withholding and Payment................................... 54
17.5 Trust Accounting.............................................. 54
17.6 Valuation of Certain Assets................................... 54
17.7 Legal Counsel................................................. 55
17.8 Fees and Expenses............................................. 55
17.9 Trustee Duties and Limitations................................ 55
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION.................... 56
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights........................ 56
18.2 Compliance With USERRA........................................ 56
18.3 Limited Return of Contributions............................... 56
18.4 Assignment and Alienation..................................... 57
18.5 Facility of Payment........................................... 57
18.6 Reallocation of Lost Participant's Accounts................... 57
18.7 Action in the Event of a Chapter 13 Bankruptcy Filing or
a Federal Tax Levy............................................ 57
18.8 Suspension of Certain Plan Provisions During Conversion Period 58
18.9 Suspension of Certain Plan Provisions During Other Periods.... 58
18.10 Claims Procedure.............................................. 59
18.11 Construction.................................................. 60
18.12 Jurisdiction and Severability................................. 60
18.13 Indemnification by Employer................................... 60
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION...................... 61
19.1 Amendment..................................................... 61
19.2 Merger........................................................ 61
19.3 Divestitures.................................................. 61
19.4 Plan Termination and Complete Discontinuance of Contributions. 62
19.5 Amendment and Termination Procedures.......................... 62
19.6 Termination of Employer's Participation....................... 63
19.7 Replacement of the Trustee.................................... 63
19.8 Final Settlement and Accounting of Trustee.................... 63
APPENDIX A - INVESTMENT FUNDS.............................................. 65
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES............................. 66
APPENDIX C - LOAN INTEREST RATE............................................ 67
APPENDIX D - SPECIAL PROVISIONS
APPLICABLE TO RESIDENTS OF THE COMMONWEALTH OF PUERTO RICO................. 68
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1 DEFINITIONS
When capitalized, the words and phrases below have the following meanings
unless different meanings are clearly required by the context:
1.1 "Account". The records maintained by the Administrator for purposes
of accounting for a Participant's interest in the Plan. "Account"
may refer to one or all of the following accounts which have been
created on behalf of a Participant to hold amounts attributable to
specific types of Contributions under the Plan and contributions
previously permitted under the Plan:
(a) "401(k) Account". An account created to hold amounts
attributable to 401(k) Contributions.
(b) "After-Tax Account". An account created to hold amounts
attributable to After-Tax Contributions.
(c) "Rollover Account". An account created to hold amounts
attributable to Rollover Contributions.
(d) "401(k) Company Match Account". An account created to hold
amounts attributable to Company Match Contributions.
(e) "After-Tax Company Match Account". An account created to hold
amounts attributable to Company Match Contributions.
(f) "Pre 1992 Company Match Account". An account created to hold
amounts attributable to amounts previously contributed by the
Employer on an eligible Participant's behalf based upon the
amount contributed by the Participant under former Plan
provisions in effect prior to January 1, 1992.
(g) "Lastarmco Account". An account created to hold amounts
attributable to amounts previously contributed by the
Employer on an eligible Participant's behalf and allocated on
a pay based formula under former Plan provisions.
1.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
1.3 "Administrator". The Company, which may delegate all or a portion
of the duties of the Administrator under the Plan to a Committee in
accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage calculated
in accordance with Section 12.1.
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1.5 "Alternate Payee". Any spouse, former spouse, child or other
dependent (as defined in Code section 152) of a Participant who is
recognized by a domestic relations order as having a right to
receive all, or a portion, of the Participant's Account under the
Plan.
1.6 "Beneficiary". The person or persons who is to receive benefits
under the Plan after the death of the Participant pursuant to the
"Beneficiary Designation" paragraph in Section 11.
1.7 "Code". The Internal Revenue Code of 1986, as amended. Reference to
any specific Code section shall include such section, any valid
regulation promulgated thereunder, and any comparable provision of
any future legislation amending, supplementing or superseding such
section.
1.8 "Committee". If applicable, the committee which has been appointed
by the Administrator to administer the Plan in accordance with
Section 15.6.
1.9 "Company". Riviana Foods Inc. or any successor by merger, purchase
or otherwise.
1.10 "Company Stock". Shares of common stock of the Company, its
predecessor(s), or its successors or assigns, or any corporation
with or into which said corporation may be merged, consolidated or
reorganized, or to which a majority of its assets may be sold.
1.11 "Compensation". The sum of a Participant's Taxable Income and
salary reductions, if any, pursuant to Code section 125, 402(e)(3),
402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or 457.
For purposes of determining benefits under the Plan, Compensation
is limited to $150,000 per Plan Year (as adjusted for cost of
living increases pursuant to Code sections 401(a)(17) and 415(d)).
For purposes of determining HCEs and key employees and for Plan
Years commencing after December 31, 1997, for purposes of Section
13.2, Compensation for the entire Plan Year shall be used. For
purposes of determining ADP and ACP, Compensation shall be limited
to amounts paid to an Eligible Employee while a Participant.
1.12 "Contribution". An amount contributed to the Plan by the Employer
or an Eligible Employee, and allocated by contribution type to
Participants' Accounts, as described in Section 1.1. Specific types
of contribution include:
(a) "401(k) Contribution". An amount contributed by an eligible
Participant in conjunction with his or her Code section
401(k) salary deferral election which shall be treated as
made by the Employer on the eligible Participant's behalf.
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(b) "After-Tax Contribution". An amount contributed by an
eligible Participant on an after-tax basis.
(c) "Rollover Contribution". An amount contributed by an Eligible
Employee which originated from another employer's or an
Employer's qualified plan.
(d) "Company Match Contribution". An amount contributed by the
Employer on an eligible Participant's behalf based upon the
amount contributed by the eligible Participant.
1.13 "Contribution Dollar Limit". The annual limit placed on each
Participant's 401(k) Contributions, which shall be $7,000 per
calendar year (as adjusted for cost of living increases pursuant to
Code sections 402(g)(5) and 415(d)). For purposes of this Section,
a Participant's 401(k) Contributions shall include (i) any employer
contribution under a qualified cash or deferred arrangement (as
defined in Code section 401(k)) to the extent not includible in
gross income for the taxable year under Code section 402(e)(3)
(determined without regard to Code section 402(g)), (ii) any
employer contribution to the extent not includible in gross income
for the taxable year under Code section 402(h)(1)(B) (determined
without regard to Code section 402(g)), (iii) any employer
contribution to purchase an annuity contract under Code section
403(b) under a salary reduction agreement (within the meaning of
Code section 3121(a)(5)(D)) and (iv) any elective employer
contribution under Code section 408(p)(2)(A)(i).
1.14 "Conversion Period". The period of converting the prior accounting
system of any plan and trust which is merged, in whole or in part,
into the Plan and Trust, to the accounting system described in
Section 6.
1.15 "Direct Rollover". An Eligible Rollover Distribution that is paid
by the Plan directly to an Eligible Retirement Plan for the benefit
of a Distributee.
1.16 "Disability". A Participant's total and permanent, mental or
physical disability resulting in termination of employment as
evidenced by presentation of medical evidence satisfactory to the
Administrator.
1.17 "Distributee". A Participant, a Beneficiary (if he or she is the
surviving spouse of a Participant) or an Alternate Payee under a
QDRO (if he or she is the spouse or former spouse of a
Participant).
1.18 "Effective Date". The date upon which the provisions of this
document become effective. This date is January 1, 1997, unless
stated otherwise and specifically except that provisions related to
Company Stock and the Company Stock Fund are instead effective
January 1, 1998 or, if later, as soon as administratively feasible
after the Administrator has complied with the filing requirements
of the Securities Act of 1933. In general, the provisions of this
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document only apply to Participants who are Employees on or after
the Effective Date. However, investment and distribution provisions
apply to all Participants with Account balances to be invested or
distributed after the Effective Date.
1.19 "Eligible Employee". An Employee of an Employer, except any
Employee:
(a) whose compensation and conditions of employment are covered
by a collective bargaining agreement to which the Employer is
a party unless the agreement calls for the Employee's
participation in the Plan; or
(b) who is treated as an Employee because he or she is a Leased
Employee.
1.20 "Eligible Retirement Plan". 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 a Distributee's Eligible Rollover
Distribution, except that, if the Distributee is the surviving
spouse of a Participant, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
1.21 "Eligible Rollover Distribution". A distribution of all or any
portion of the balance to the credit of a Distributee, excluding
(i) a 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; (ii) a distribution to the extent such distribution is
required under Code section 401(a)(9); and (iii) the portion of a
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to Employer securities).
1.22 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom any
income for such employment is subject to withholding of
income or social security taxes, or
(b) a Leased Employee.
1.23 "Employer". The Company and any other Related Company which adopts
the Plan with the approval of the Company.
1.24 "ERISA". The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific ERISA section shall include such
section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending,
supplementing or superseding such section.
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1.25 "Former Participant". The Plan status of an individual after he or
she is determined to be a Terminated Participant and his or her
Account is distributed or forfeited.
1.26 "HCE" or "Highly Compensated Employee". An Employee described as a
Highly Compensated Employee in Section 12.
1.27 "Hour of Service". Each hour for which an Employee is entitled to:
(a) payment for the performance of duties for any Related
Company;
(b) payment from any Related Company on account of a period of
time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence;
(c) back pay, irrespective of mitigation of damages, by award or
agreement with any Related Company (and these hours shall be
credited to the period to which the award or agreement
pertains); or
(d) no payment, but is on a Leave of Absence (and these hours
shall be based upon his or her normally scheduled hours per
week or a 40 hour week if there is no regular schedule).
The crediting of Hours of Service for which no duties are performed
shall be in accordance with the U.S. Department of Labor regulation
sections 2530.200b- 2(b) and (c). Actual hours shall be used
whenever an accurate record of hours are maintained for an
Employee. Otherwise, an equivalent number of hours shall be
credited for each payroll period in which the Employee would be
credited with at least 1 Hour of Service. The payroll period
equivalencies are 45 hours weekly, 90 hours biweekly, 95 hours
semimonthly and 190 hours monthly.
An Employee's service with a predecessor or acquired company shall
only be counted in the determination of his or her Hours of Service
for eligibility and/or vesting purposes if (1) the Company directs
that credit for such service be granted, or (2) a qualified plan of
the predecessor or acquired company is subsequently maintained by
any Related Company.
1.28 "Ineligible". The Plan status of an individual who is (1) an
Employee of a Related Company which is not then an Employer, (2) an
Employee of an Employer, but not an Eligible Employee, or (3) not
an Employee.
1.29 "Ineligible Participant". The Plan status of a Participant who is
(1) an Employee of a Related Company which is not then an Employer,
or (2) an Employee of an Employer, but not an Eligible Employee.
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1.30 "Investment Fund". An investment fund as described in Section 16.2.
The Investment Funds authorized by the Administrator to be offered
under the Plan as of the Effective Date are set forth in Appendix
A.
1.31 "Leased Employee". An individual, not otherwise an Employee, who,
pursuant to an agreement between a Related Company and a leasing
organization, has performed, on a substantially full-time basis,
for a period of at least 12 months, services under the primary
direction or control of the Related Company, unless:
(a) the individual is covered by a money purchase pension plan
maintained by the leasing organization and meeting the
requirements of Code section 414(n)(5)(B), and
(b) such individuals do not constitute more than 20% of all
Non-Highly Compensated Employees of all Related Companies
(within the meaning of Code section 414(n)(5)(C)(ii)).
1.32 "Leave of Absence". A period during which an individual is deemed
to be an Employee, but is absent from active employment, provided
that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed forces
and the individual returns to active employment within the
period during which he or she retains employment rights under
federal law.
1.33 "Loan Account". The record maintained for purposes of accounting
for a Participant's loan and payments of principal and interest
thereon.
1.34 "NHCE" or "Non-Highly Compensated Employee". An Employee described
as a Non-Highly Compensated Employee in Section 12.
1.35 "Normal Retirement Date". The date of a Participant's 65th
birthday.
1.36 "Owner". A person with an ownership interest in the capital,
profits, outstanding stock or voting power of a Related Company
within the meaning of Code section 318 or 416 (which exclude
indirect ownership through a qualified plan).
1.37 "Participant". The Plan status of an Eligible Employee after he or
she completes the eligibility requirements and enters the Plan as
described in Section 2.1 and any individual for whom assets have
been transferred from a predecessor plan merged, in whole or in
part, with the Plan. An Eligible Employee who makes a Rollover
Contribution prior to completing the eligibility requirements as
described in Section 2.1 shall also be considered a Participant,
except that he or she shall not be considered a Participant for
purposes of Plan provisions related to Contributions, other than a
Rollover Contribution, until he
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or she completes the eligibility requirements and enters the Plan
as described in Section 2.1. A Participant's participation
continues until his or her employment with all Related Companies
ends and his or her Account is distributed or forfeited.
1.38 "Pay". All cash compensation paid to an Eligible Employee by an
Employer while he or she is a Participant during the current
period. Pay excludes overtime premium payments, bonuses,
reimbursements or other expense allowances, cash and non-cash
fringe benefits, moving expenses, deferred compensation and welfare
benefits.
Pay is neither increased by any salary credit or decreased by any
salary reduction pursuant to Code sections 125 or 402(e)(3). Pay is
limited to $150,000 per Plan Year (as adjusted for cost of living
increases pursuant to Code sections 401(a)(17) and 415(d)).
1.39 "Plan". The Riviana Foods Inc. Savings Plan set forth in this
document, as from time to time amended.
1.40 "Plan Year". The annual accounting period of the Plan and Trust
which ends on each December 31.
1.41 "QDRO". A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within the
meaning of Code section 414(p).
1.42 "Related Company". With respect to any Employer, that Employer and
any corporation, trade or business which is, together with that
Employer, a member of the same controlled group of corporations, a
trade or business under common control, or an affiliated service
group within the meaning of Code sections 414(b), (c), (m) or (o),
except that for purposes of Section 13 "within the meaning of Code
sections 414(b), (c), (m) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to "within
the meaning of Code section 414(b), (c), (m) or (o)".
1.43 "Required Beginning Date". The latest date benefit payments shall
commence to a Participant. Such date shall mean the April 1 that
next follows the calendar year in which the Participant attains age
70 1/2.
1.44 "Retiree Status". The Plan status of a Participant who has
satisfied the normal retirement or early retirement requirements of
the Riviana Foods Inc. Retirement Plan.
1.45 "Settlement Date". For each Trade Date, the Trustee's next business
day.
1.46 "Spousal Consent". The written consent given by a spouse to a
Participant's Beneficiary designation. The spouse's consent must
acknowledge the effect
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on the spouse of the Participant's designation, and be duly
witnessed by a notary public. Spousal Consent shall be valid only
with respect to the spouse who signs the Spousal Consent and only
for the particular choice made by the Participant which requires
Spousal Consent. A Participant may revoke (without Spousal Consent)
a prior designation that required Spousal Consent at any time
before payments begin. Spousal Consent also means a determination
by the Administrator that there is no spouse, the spouse cannot be
located, or such other circumstances as may be established under
Code section 417(a)(2)(B).
1.47 "Sweep Account". The subsidiary Account for each Participant
through which all transactions are processed, which is invested in
interest bearing deposits (which may include interest bearing
deposits of the Trustee) and/or money market type assets or funds.
1.48 "Sweep Date". The cut off date and time for receiving instructions
for transactions to be processed on the next Trade Date.
1.49 "Taxable Income". Compensation in the amount reported by the
Employer or a Related Company as "Wages, tips, other compensation"
on Form W-2, or any successor method of reporting under Code
section 6041(d).
1.50 "Terminated Participant". The Plan status of a Participant who is
not an Employee and with respect to whom the Administrator has
reported to the Trustee that the Participant's employment has
terminated with all Related Companies.
1.51 "Trade Date". Each day the Investment Funds are valued, which is
normally every day the assets of such Investment Funds are traded.
1.52 "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. The Trust is part of the Plan
and holds the Plan assets which are comprised of the aggregate of
Participants' Accounts, and any unallocated funds invested in
interest bearing deposits (which may include interest bearing
deposits of the Trustee) and/or money market type assets or funds,
pending allocation to Participants' Accounts or disbursement to pay
Plan fees and expenses.
1.53 "Trustee". Barclays Global Investors, National Association.
1.54 "USERRA". The Uniformed Services Employment and Reemployment Rights
Act of 1994, as amended.
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2 ELIGIBILITY
2.1 Eligibility
All Participants as of January 1, 1997 shall continue their
eligibility to participate. Each other Eligible Employee shall
become a Participant on the first day of the next month after the
date he or she completes a 12-month eligibility period for which he
or she is credited with at least 1,000 Hours of Service. The
initial eligibility period begins on the date an Employee first
performs an Hour of Service. Subsequent eligibility periods begin
with the start of each Plan Year beginning after the first Hour of
Service is performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements, but is
Ineligible at the time participation would otherwise begin (if he
or she were not Ineligible), he or she shall become a Participant
on the first subsequent date on which he or she is an Eligible
Employee.
2.3 Ineligible, Terminated or Former Participants
An Ineligible, Terminated or Former Participant may not make or
share in any Contributions, other than such Contributions due to be
made on his or her behalf after the date he or she became an
Ineligible, Terminated or Former Participant for periods prior to
such date, nor may an Ineligible or Terminated Participant be
eligible for a new Plan loan (except as described in Section 9.1),
during the period he or she is an Ineligible or Terminated
Participant, but he or she shall continue to participate for all
other purposes. An Ineligible, Terminated or Former Participant
shall automatically become an active Participant on the date he or
she again becomes an Eligible Employee.
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3 PARTICIPANT CONTRIBUTIONS
3.1 401(k) Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to
reduce his or her Pay by an amount which does not exceed the
Contribution Dollar Limit or the limits described in the
Contribution Percentage Limits paragraph of this Section 3, and
have such amount contributed to the Plan by the Employer as a
401(k) Contribution. The election shall be made in such manner and
with such advance notice as prescribed by the Administrator and may
be limited to a whole percentage of Pay. In no event shall an
Employee's 401(k) Contributions under the Plan and comparable
contributions to all other plans, contracts or arrangements of all
Related Companies exceed the Contribution Dollar Limit for the
Employee's taxable year beginning in the Plan Year.
3.2 After-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to make
After-Tax Contributions to the Plan in an amount which does not
exceed the limits described in the Contribution Percentage Limits
paragraph of this Section 3. The election shall be made in such
manner and with such advance notice as prescribed by the
Administrator and may be limited to a whole percentage of Pay.
3.3 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or her
401(k) and/or After-Tax Contribution election at any time in such
manner and with such advance notice as prescribed by the
Administrator, and such election change shall be effective with the
first payroll paid after such date. A Participant's Contribution
election made as a percentage of Pay shall automatically apply to
Pay increases or decreases.
3.4 Revoking and Resuming a Contribution Election
A Participant may revoke his or her 401(k) and/or After-Tax
Contribution election at the same time in which a Participant may
change his or her election in such manner and with such advance
notice as prescribed by the Administrator, and such revocation
shall be effective with the first payroll paid after such date.
A Participant who is an Eligible Employee may resume 401(k) and/or
After-Tax Contributions by making a new election at the same time
in which a Participant may change his or her election in such
manner and with such advance notice as prescribed by the
Administrator, and such election shall be effective with the first
payroll paid after such date.
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3.5 Contribution Percentage Limits
The Administrator may establish and change from time to time, in
writing, without the necessity of amending the Plan and Trust, the
separate minimum, if applicable, and maximum 401(k) and After-Tax
Contribution percentages, and/or a maximum combined 401(k) and
After-Tax Contribution percentage, prospectively or retrospectively
(for the current Plan Year), for all Participants. In addition, the
Administrator may establish any lower percentage limits for Highly
Compensated Employees as it deems necessary to satisfy the tests
described in Section 12. As of the Effective Date, the minimum
401(k) and After-Tax Contribution percentages are 1% and the
maximum Contribution percentages are:
HIGHLY
CONTRIBUTION COMPENSATED ALL OTHER
TYPE EMPLOYEES PARTICIPANTS
401(k) 16% 16%
After-Tax 16% 16%
Sum of Both 16% 16%
Irrespective of the limits that may be established by the
Administrator in accordance with the paragraph above, in no event
shall the Contributions made by or on behalf of a Participant for a
Plan Year exceed the maximum allowable under Code section 415.
3.6 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes 401(k) Contributions for a calendar year to
the Plan and comparable contributions to any other qualified
defined contribution plan in excess of the Contribution Dollar
Limit may notify the Administrator in writing by the following
March 1 (or as late as April 14 if allowed by the Administrator)
that an excess has occurred. In this event, the amount of the
excess specified by the Participant, adjusted for investment gain
or loss, shall be refunded to him or her by the April 15 following
the year of deferral and shall not be included as an Annual
Addition (as defined in Section 13.1) under Code section 415 for
the year contributed. The excess amounts shall first be taken from
unmatched 401(k) Contributions and then from matched 401(k)
Contributions. Any Company Match Contributions attributable to
refunded excess 401(k) Contributions as described in this Section,
adjusted for investment gain or loss, shall be forfeited and used
to reduce future Contributions to be made by an Employer as soon as
administratively feasible. Refunds and forfeitures shall not
include investment gain or loss for the period between the end of
the applicable calendar year and the date of distribution.
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3.7 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover Contributions, may
only be made through payroll deduction. Such amounts shall be paid
to the Trustee in cash and posted to each Participant's Account(s)
as soon as such amounts can reasonably be separated from the
Employer's general assets and balanced against the specific amount
made on behalf of each Participant. In no event, however, shall
such amounts be paid to the Trustee more than 90 days after the
date amounts are deducted from a Participant's Pay, except that
effective February 3, 1997, "15 business days following the end of
the month that includes the date amounts are deducted from a
Participant's Pay (or as that maximum period may be otherwise
extended by ERISA)" shall be substituted for the preceding
reference to "90 days after the date amounts are deducted from a
Participant's Pay". 401(k) Contributions shall be treated as
Contributions made by an Employer in determining tax deductions
under Code section 404(a).
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4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED
PLANS
4.1 Rollover Contributions
The Administrator may authorize the Trustee to accept a Rollover
Contribution in cash, directly from an Eligible Employee or as a
Direct Rollover from another qualified plan on behalf of the
Eligible Employee, even if he or she is not yet a Participant. The
Employee shall be responsible for providing satisfactory evidence,
in such manner as prescribed by the Administrator, that such
Rollover Contribution qualifies as a rollover contribution, within
the meaning of Code section 402(c) or 408(d)(3)(A)(ii). Such
amounts received directly from an Eligible Employee must be paid to
the Trustee in cash within 60 days after the date received by the
Eligible Employee from a qualified plan or conduit individual
retirement account. Rollover Contributions shall be posted to the
Eligible Employee's Rollover Account as of the date received by the
Trustee.
If the Administrator later determines that an amount contributed
pursuant to the above paragraph did not in fact qualify as a
rollover contribution, within the meaning of Code section 402(c) or
408(d)(3)(A)(ii), the balance credited to the Participant's
Rollover Account shall immediately be (1) segregated from all other
Plan assets, (2) treated as a nonqualified trust established by and
for the benefit of the Participant, and (3) distributed to the
Participant. Any such amount shall be deemed never to have been a
part of the Plan.
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets in
cash or in kind directly from another qualified plan or to transfer
assets in cash or in kind directly to another qualified plan;
provided that receipt of a transfer shall not be directed if:
(a) any amounts are not exempted by Code section 401(a)(11)(B)
from the annuity requirements of Code section 417 unless the
Plan complies with such requirements; or
(b) any amounts include benefits protected by Code section
411(d)(6) which would not be preserved under applicable Plan
provisions.
The Trustee may refuse to receive any such transfer if:
(a) the Trustee finds the in kind assets unacceptable; or
(b) instructions for posting amounts to Participants' Accounts
are incomplete.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee. To the extent
a receipt of a transfer includes Participant loans, such loans
shall continue in effect subject to the terms and conditions in
effect as of the date of the transfer.
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5 EMPLOYER CONTRIBUTIONS
5.1 Company Match Contributions
(a) Frequency and Eligibility. For each quarter of the Plan Year,
the Employer shall make Company Match Contributions, as
described in the following Allocation Method paragraph, on
behalf of each Participant who contributed during the period,
was an Eligible Employee on the last day of the period, did
not withdraw from his or her Account by reason of hardship
pursuant to Section 10.7 during the period and, solely for
purposes of determining eligibility for Company Match
Contributions to be made with regard to a Participant's
After-Tax Contributions, did not otherwise withdraw from his
or her After-Tax Account during the period.
Such Company Match Contributions shall also be made on behalf
of each Participant who is otherwise eligible as described
above but who ceased being an Employee during the period
after having attained Retiree Status or by reason of his or
her Disability or death.
(b) Allocation Method. The Company Match Contributions for each
period shall total 55% of each eligible Participant's 401(k)
Contributions for the period and 50% of each eligible
Participant's After-Tax Contributions for the period,
provided that no Company Match Contributions shall be made
based upon the sum of a Participant's 401(k) and After-Tax
Contributions in excess of 6% of his or her Pay and a
Participant's 401(k) Contributions shall be matched first.
The Employer may change the matching rates or the percentage
of considered Pay to any other percentages, including 0%,
generally by notifying eligible Participants in sufficient
time to adjust their Contribution elections prior to the
start of the period for which the new percentages apply.
(c) Timing, Medium and Posting. The Employer shall make each
period's Company Match Contribution in cash as soon as
administratively feasible, and for purposes of deducting such
Contribution, not later than the Employer's federal tax
filing date, including extensions, for the Employer's taxable
year that ends with or within the Plan Year for which the
Company Match Contribution is made. Such amounts shall be
paid to the Trustee and posted to each Participant's 401(k)
Company Match Account and After-Tax Company Match Account
once the total Company Match Contribution received has been
balanced against the specific amount to be credited to each
Participant's 401(k) Company Match Account and After-Tax
Company Match Account.
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6 ACCOUNTING
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of Accounts for
each Participant in order to reflect transactions both by type of
Account and investment medium. Financial transactions shall be
accounted for at the individual Account level by posting each
transaction to the appropriate Account of each affected
Participant. Participant Account values shall be maintained in
shares for the Investment Funds and in dollars for the Sweep and
Loan Accounts. At any point in time, the Account value shall be
determined using the most recent Trade Date values provided by the
Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep Account
shall be credited with interest up until the date on which it is
removed from the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each Trade
Date. For any transaction to be processed as of a Trade Date, the
Trustee must receive instructions for the transaction by the Sweep
Date. Such instructions shall apply to amounts held in the Account
on that Sweep Date. Financial transactions of the Investment Funds
shall be posted to Participants' Accounts as of the Trade Date,
based upon the Trade Date values provided by the Trustee, and
settled on the Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in shares.
The Trustee is responsible for determining the share values of each
Investment Fund as of each Trade Date. To the extent an Investment
Fund is comprised of collective investment funds offered by the
Trustee or any other entity authorized to offer collective
investment funds, the share values shall be determined in
accordance with the rules governing such collective investment
funds, which are incorporated herein by reference. All other share
values shall be determined by the Trustee. The share value of each
Investment Fund shall be based on the fair market value of its
underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to Account
maintenance, transaction and Investment Fund management and
maintenance, set forth below, are paid by the Employer directly, or
indirectly, through the Forfeiture Account as directed by the
Administrator, such fees and expenses shall be paid as set forth
below.
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(a) Account Maintenance: Account maintenance fees and expenses,
may include but are not limited to, administrative, Trustee,
government annual report preparation, audit, legal,
nondiscrimination testing and fees for any other special
services. Account maintenance fees shall be charged to
Participants on a per Participant basis provided that no fee
shall reduce a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may include but
are not limited to, periodic installment payment, Investment
Fund election change and loan fees. Transaction fees shall be
charged to the Participant's Account involved in the
transaction provided that no fee shall reduce a Participant's
Account balance below zero.
(c) Investment Fund Management and Maintenance: Management and
maintenance fees and expenses related to the Investment Funds
shall be charged at the Investment Fund level and reflected
in the net gain or loss of each Investment Fund.
The Company may determine that the Employers pay a lower portion of
the fees and expenses allocable to the Accounts of Participants who
are no longer Employees or who are not Beneficiaries, unless doing
so would result in discrimination prohibited under Code section
401(a)(4) or a significant detriment prohibited by Code section
411(a)(11). As of the Effective Date, a breakdown of which Plan
fees and expenses shall generally be borne by the Trust (and
charged to individual Participants' Accounts or charged at the
Investment Fund level and reflected in the net gain or loss of each
Investment Fund) and those that shall be paid by the Employer is
set forth in Appendix B, which may be changed from time to time by
the Company, in writing, without the necessity of amending the Plan
and Trust.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days, from the
Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account of the
Participant and accounted for in dollars as an earmarked asset of
the borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's Account
balance with the amount that would be credited to the Account had
no error or omission been made. Funds necessary for any such
restoration shall be provided through payment made by the Employer,
or by the Trustee to the extent the error or omission is
attributable to actions or inactions of the Trustee.
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6.8 Participant Statements
The Administrator shall provide Participants with statements of
their Accounts as soon after the end of each quarter of the Plan
Year as administratively feasible.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable accounting
methods in performing their respective duties during any Conversion
Period. This includes, but is not limited to, the method for
allocating net investment gains or losses and the extent, if any,
to which contributions received by and distributions paid from the
Trust during this period share in such allocation.
6.10 Accounts for Alternate Payees
A separate Account shall be established for an Alternate Payee
entitled to any portion of a Participant's Account under a QDRO as
of the date and in accordance with the directions specified in the
QDRO. In addition, a separate Account may be established during the
period of time the Administrator, a court of competent jurisdiction
or other appropriate person is determining whether a domestic
relations order qualifies as a QDRO. Such a separate Account shall
be valued and accounted for in the same manner as any other
Account.
(a) Distributions Pursuant to QDROs. If a QDRO so provides, the
portion of a Participant's Account payable to an Alternate
Payee may be distributed, in a form permissible under Section
11, to the Alternate Payee at any time beginning as soon as
practicable after the QDRO determination is made, regardless
of whether the Participant is entitled to a distribution from
the Plan at such time. The Alternate Payee shall be provided
the notice prescribed by Code section 402(f).
(b) Participant Loans. Except to the extent required by law, an
Alternate Payee, on whose behalf a separate Account has been
established, shall not be entitled to borrow from such
Account. If a QDRO specifies that the Alternate Payee is
entitled to any portion of the Account of a Participant who
has an outstanding loan balance, all outstanding loans shall
generally continue to be held in the Participant's Account
and shall not be divided between the Participant's and
Alternate Payee's Accounts.
(c) Investment Direction. Where a separate Account has been
established on behalf of an Alternate Payee and has not yet
been distributed, the Alternate Payee may direct the
investment of such Account in the same manner as if he or she
were a Participant.
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7 INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
Except for Participants' Sweep and Loan Accounts and any
unallocated funds invested in interest bearing deposits (which may
include interest bearing deposits of the Trustee) and/or money
market type assets or funds, pending allocation to Participants'
Accounts or disbursement to pay Plan fees and expenses, the Trust
shall be maintained in various Investment Funds. The Administrator
shall select the Investment Funds offered to Participants and may
change the number or composition of the Investment Funds, subject
to the terms and conditions agreed to with the Trustee. As of the
Effective Date, a list of the Investment Funds offered under the
Plan is set forth in Appendix A, which may be changed from time to
time by the Administrator, in writing, and as agreed to by the
Trustee, without the necessity of amending the Plan and Trust.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific Investment
Fund, which maximum, if any, as of the Effective Date is set forth
in Appendix A, which may be changed from time to time by the
Administrator, in writing, without the necessity of amending the
Plan and Trust.
7.2 Responsibility for Investment Choice
Each Participant shall direct the investment of all of his or her
Accounts.
Each Participant shall be solely responsible for the selection of
his or her Investment Fund choices. No fiduciary with respect to
the Plan is empowered to advise a Participant as to the manner in
which his or her Accounts are to be invested, and the fact that an
Investment Fund is offered shall not be construed to be a
recommendation for investment.
During any Conversion Period, Trust assets may be held in any
investment vehicle permitted by the Plan, as directed by the
Administrator, irrespective of prior Participant investment
elections.
7.3 Investment Fund Elections
A Participant shall provide his or her initial investment election
upon becoming a Participant and may change his or her investment
election at any time in accordance with procedures established by
the Administrator and the Trustee. A Participant shall make his or
her investment election in any combination of one or any number of
the Investment Funds offered in accordance with the procedures
established by the Administrator and Trustee. Investment elections
received by the Trustee by the Sweep Date shall be effective on the
following Trade Date.
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7.4 Default if No Valid Investment Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which is not
yet held in an Investment Fund and for which no valid investment
election is on file. The Investment Fund specified as of the
Effective Date is set forth in Appendix A, which may be changed
from time to time by the Administrator, in writing, without the
necessity of amending the Plan and Trust.
7.5 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes in
excess of a specified number per year as determined by the
Administrator.
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8 VESTING
8.1 Fully Vested Accounts
A Participant shall be fully vested in all Accounts at all times.
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9 PARTICIPANT LOANS
9.1 Participant Loans Permitted
Loans to Participants and Beneficiaries are permitted pursuant to
the terms and conditions set forth in this Section, except that a
loan shall not be permitted to a Participant who is no longer an
Employee or to a Beneficiary, unless such Participant or
Beneficiary is otherwise a party in interest (as defined in ERISA
section 3(14)).
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and with such
advance notice as prescribed by the Administrator. Each loan shall
be evidenced by a promissory note, secured only by the portion of
the Participant's Account from which the loan is made, and the Plan
shall have a lien on this portion of his or her Account.
9.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
borrow from his or her Account under the Plan.
9.4 Loan Approval
The Administrator, or the Trustee, if otherwise authorized by the
Administrator and agreed to by the Trustee, is responsible for
determining that a loan request conforms to the requirements
described in this Section and granting such request.
9.5 Loan Funding Limits, Account Sources and Funding Order
The loan amount must meet all of the following limits as determined
as of the Sweep Date the loan is processed and shall be funded from
the Participant's Accounts as follows:
(a) Plan Minimum Limit. The minimum amount for any loan is $300.
(b) Plan Maximum Limit, Account Sources and Funding Order.
Subject to the legal limit described in (c) below, the
maximum a Participant may borrow, including the aggregate
outstanding balances of existing Plan loans, is 100% of the
following of the Participant's Accounts which are fully
vested in the priority order as follows:
401(k) Account
Lastarmco Account
401(k) Company Match Account
After-Tax Company Match Account
Pre 1992 Company Match Account
Rollover Account
After-Tax Account
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(c) Legal Maximum Limit. The maximum a Participant may borrow,
including the aggregate outstanding balances of existing Plan
loans, is 50% of his or her vested Account balance, not to
exceed $50,000. However, the $50,000 maximum is reduced by
the Participant's highest aggregate outstanding Plan loan
balance during the 12-month period ending on the day before
the Sweep Date as of which the loan is made. For purposes of
this paragraph, the qualified plans of all Related Companies
shall be treated as though they are part of the Plan to the
extent it would decrease the maximum loan amount.
9.6 Maximum Number of Loans
A Participant may have a maximum of two loans outstanding at any
given time.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets of his
or her own Account. The available assets shall be determined first
by Account and then within each Account used for funding a loan,
amounts shall first be taken from the Sweep Account and then taken
by Investment Fund in direct proportion to the market value of the
Participant's interest in each Investment Fund as of the Trade Date
on which the loan is processed.
The loan shall be funded on the Settlement Date following the Trade
Date as of which the loan is processed. The Trustee shall make
payment to the Participant as soon thereafter as administratively
feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall be a fixed
reasonable rate of interest, determined from time to time by the
Administrator, which provides the Plan with a return commensurate
with the prevailing interest rate charged by persons in the
business of lending money for loans which would be made under
similar circumstances. As of the Effective Date, the interest rate
is determined as set forth in Appendix C, which may be changed from
time to time by the Administrator, in writing, without the
necessity of amending the Plan and Trust.
9.9 Loan Payment
Substantially level amortization shall be required of each loan
with payments made at least monthly, through payroll deduction,
provided that payment may be made by check for advance payments or
when a Participant is not otherwise eligible to make payment by
payroll deduction. Loans may be prepaid in full or in part at any
time. The Participant may choose the loan repayment period, not to
exceed five years, except that the repayment period may be for any
period
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not to exceed 10 years if the purpose of the loan is to acquire the
Participant's principal residence.
9.10 Loan Payment Hierarchy
Loan principal payments shall be credited to the Participant's
Accounts in the inverse of the order used to fund the loan. Loan
interest shall be credited to the Participant's Accounts in direct
proportion to the principal payment. Loan payments are credited to
the Investment Funds based upon the Participant's current
investment election for new Contributions.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan payments for up
to three months for a Participant who is on a Leave of Absence
without pay. During the suspension period, interest shall continue
to accrue on the outstanding loan balance. At the expiration of the
suspension period all outstanding loan payments and accrued
interest thereon shall be due unless otherwise agreed upon by the
Administrator.
9.12 Loan Default
A loan is treated as in default if a scheduled loan payment is not
made at the time required. A Participant shall then have a grace
period to cure the default before it becomes final. Such grace
period shall be for a period that does not extend beyond the last
day of the calendar quarter following the calendar quarter in which
the scheduled loan payment was due or such lesser or greater
maximum period as may later be authorized by Code section 72(p).
In the event a default is not cured within the grace period, the
Administrator may direct the Trustee to report the outstanding
principal balance of the loan and accrued interest thereon as a
taxable distribution to the Participant. As soon as a Plan
withdrawal or distribution to such Participant would otherwise be
permitted, the Administrator may instruct the Trustee to execute
upon its security interest in the Participant's Account by
distributing the note to the Participant.
9.13 Call Feature
The Administrator shall have the right to call any Participant loan
once a Participant's employment with all Related Companies has
terminated, unless he or she is otherwise a party in interest (as
defined in ERISA section 3(14)), or if the Plan is terminated.
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10 IN-SERVICE WITHDRAWALS
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee are
permitted pursuant to the terms and conditions set forth in this
Section and pursuant to the terms and conditions set forth in
Section 11 with regard to an in-service withdrawal made in
accordance with a Participant's Required Beginning Date.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in such
manner and with such advance notice as prescribed by the
Administrator. The Participant shall be provided the notice
prescribed by Code section 402(f).
Code sections 401(a)(11) and 417 do not apply to in-service
withdrawals under the Plan. An in-service withdrawal may commence
less than 30 days after the aforementioned notice is provided, if:
(a) the Participant is clearly informed that he or she has the
right to a period of at least 30 days after receipt of such
notice to consider his or her option to elect or not elect a
Direct Rollover for all or a portion, if any, of his or her
in-service withdrawal which constitutes an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notice, affirmatively
elects a Direct Rollover for all or a portion, if any, of his
or her in-service withdrawal which constitutes an Eligible
Rollover Distribution or alternatively elects to have all or
a portion made payable directly to him or her, thereby not
electing a Direct Rollover for all or a portion thereof.
10.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
receive an in-service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee, if otherwise authorized by the
Administrator and agreed to by the Trustee, is responsible for
determining whether an in-service withdrawal request conforms to
the requirements described in this Section and granting such
request.
10.5 Payment Form and Medium
The form of payment for an in-service withdrawal shall be a single
lump sum and payment shall be made in cash. With regard to the
portion of an in-service withdrawal representing an Eligible
Rollover Distribution, a Participant may elect a Direct Rollover
for all or a portion of such amount.
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10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made solely from
the assets of his or her own Account and shall be based on the
Account values as of the Trade Date the in-service withdrawal is
processed. The available assets shall be determined first by
Account and then within each Account used for funding an in-service
withdrawal, amounts shall first be taken from the Sweep Account and
then taken by Investment Fund in direct proportion to the market
value of the Participant's interest in each Investment Fund (which
excludes his or her Loan Account balance) as of the Trade Date on
which the in-service withdrawal is processed.
The in-service withdrawal shall be funded on the Settlement Date
following the Trade Date as of which the in-service withdrawal is
processed. The Trustee shall make payment to the Participant or on
behalf of the Participant as soon thereafter as administratively
feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may request
the withdrawal of up to the amount necessary to satisfy a
financial need including amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the withdrawal. Only requests for
withdrawals (1) on account of a Participant's "Deemed
Financial Need" or "Demonstrated Financial Need" and (2)
which are "Deemed Necessary" or "Demonstrated as Necessary"
to satisfy the financial need shall be approved.
(b) "Deemed Financial Need". An immediate and heavy financial
need relating to:
(1) the payment of unreimbursed medical care expenses
(described under Code section 213(d)) incurred (or to
be incurred) by the Employee, his or her spouse or
dependents (as defined in Code section 152);
(2) the purchase (excluding mortgage payments) of the
Employee's principal residence;
(3) the payment of unreimbursed tuition, related
educational fees and room and board for up to the next
12 months of post-secondary education for the
Employee, his or her spouse or dependents (as defined
in Code section 152);
(4) the payment of funeral expenses of an Employee's
family member;
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(5) the payment of amounts necessary for the Employee to
prevent losing his or her principal residence through
eviction or foreclosure on the mortgage; or
(6) any other circumstance specifically permitted under
Code section 401(k)(2)(B)(i)(IV).
(c) "Demonstrated Financial Need". A determination by the
Administrator that an immediate and heavy financial need
exists relating to:
(1) a sudden and unexpected illness or accident to the
Employee or his or her spouse or dependents;
(2) the loss, due to casualty, of the Employee's property
other than nonessential property (such as a boat or a
television); or
(3) some other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the
control of the Employee.
(d) "Deemed Necessary". A withdrawal is "Deemed Necessary" to
satisfy the financial need only if the withdrawal amount does
not exceed the financial need and all of these conditions are
met:
(1) the Employee has obtained all possible withdrawals
(other than hardship withdrawals) and nontaxable loans
available from the Plan and all other plans maintained
by Related Companies;
(2) the Administrator shall suspend the Employee from
making any contributions to the Plan and all other
qualified and nonqualified plans of deferred
compensation and all stock option or stock purchase
plans maintained by Related Companies for 12 months
from the date the withdrawal payment is made; and
(3) the Administrator shall reduce the Contribution Dollar
Limit for the Employee with regard to the Plan and all
other plans maintained by Related Companies, for the
calendar year next following the calendar year of the
withdrawal by the amount of the Employee's 401(k)
Contributions for the calendar year of the withdrawal.
(e) "Demonstrated as Necessary". A withdrawal is "Demonstrated as
Necessary" to satisfy the financial need only if the
withdrawal amount does not exceed the financial need, the
Employee represents that he or she is unable to relieve the
financial need (without causing further hardship) by doing
any or all of the following and the Administrator does not
have actual knowledge to the contrary:
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(1) receiving any reimbursement or compensation from
insurance or otherwise;
(2) reasonably liquidating his or her assets and the
assets of his or her spouse or minor children that are
reasonably available to the Employee;
(3) ceasing his or her contributions to the Plan;
(4) obtaining other withdrawals and nontaxable loans
available from the Plan, plans maintained by Related
Companies and plans maintained by any other employer;
and
(5) obtaining loans from commercial sources on reasonable
commercial terms.
(f) Account Sources and Funding Order. All available amounts must
first be withdrawn from a Participant's After-Tax Account.
The remaining withdrawal amount shall come from the following
of the Participant's fully vested Accounts, in the priority
order as follows:
Rollover Account
Lastarmco Account
401(k) Company Match Account
After-Tax Company Match Account
Pre 1992 Company Match Account
401(k) Account
The amount that may be withdrawn from a Participant's 401(k)
Account shall not include any earnings credited to his or her
401(k) Account after the start of the first Plan Year
beginning after December 31, 1988.
(g) Minimum Amount. The minimum amount for a hardship withdrawal
is $100.
(h) Permitted Frequency. There is no restriction on the number of
hardship withdrawals permitted to a Participant.
(i) Suspension from Further Contributions. Upon making a hardship
withdrawal, a Participant may not make additional 401(k) or
After-Tax Contributions (or additional contributions to all
other qualified and nonqualified plans of deferred
compensation and all stock option or stock purchase plans
maintained by Related Companies, if his or her hardship
withdrawal was "Deemed Necessary"), for a period of 12 months
from the date the withdrawal payment is made and shall not be
eligible to receive Company Match Contributions for the
quarter of the Plan Year in which the withdrawal payment is
made.
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10.8 After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may make an
After-Tax Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall come
from a Participant's After-Tax Account.
(c) Minimum Amount. The minimum amount for an After-Tax Account
withdrawal is $100.
(d) Permitted Frequency. The maximum number of After-Tax Account
withdrawals permitted to a Participant in any 12-month period
is one.
(e) Suspension from Further Contributions. Upon making an
After-Tax Account withdrawal, a Participant shall not be
eligible to receive Company Match Contributions on his or her
After-Tax Contributions for the quarter of the Plan Year in
which the withdrawal payment is made.
10.9 Rollover Account Withdrawals
(a) Requirements. A Participant who is an Employee may make a
Rollover Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall come
from a Participant's Rollover Account.
(c) Minimum Amount. The minimum amount for a Rollover Account
withdrawal is $100.
(d) Permitted Frequency. The maximum number of Rollover Account
withdrawals permitted to a Participant in any 12-month period
is one.
(e) Suspension from Further Contributions. A Rollover Account
withdrawal shall not affect a Participant's ability to make
or be eligible to receive further Contributions.
10.10 Company Contribution Accounts Withdrawals
(a) Requirements. A Participant who is an Employee may make a
Company Contribution Accounts withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall come
from the following of the Participant's fully vested
Accounts, in the priority order as follows:
After-Tax Account
401(k) Company Match Account
Pre 1992 Company Match Account
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The withdrawal may not include any amounts from a
Participant's 401(k) Company Match Account representing
Company Match Contributions that have been on deposit for
less than 24 months.
(c) Minimum Amount. The minimum amount for a Company Contribution
Accounts withdrawal is $100.
(d) Permitted Frequency. The maximum number of Company
Contribution Accounts withdrawals permitted to a Participant
in any 12-month period is one.
(e) Suspension from Further Contributions. Upon making a Company
Contribution Accounts withdrawal, a Participant shall not be
eligible to receive Company Match Contributions on his or her
After-Tax Contributions for the quarter of the Plan Year in
which the withdrawal payment is made if any amounts
attributable to his or her After-Tax Account are withdrawn.
10.11 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and over age
59 1/2 may make an Over Age 59 1/2 withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall come
from the following of the Participant's fully vested
Accounts, in the priority order as follows, except that the
Participant may instead choose to have amounts taken from his
or her After-Tax Account first:
Rollover Account
401(k) Account
Lastarmco Account
401(k) Company Match Account
After-Tax Company Match Account
Pre 1992 Company Match Account
After-Tax Account
(c) Minimum Amount. The minimum amount for an Over Age 59 1/2
withdrawal is $100.
(d) Permitted Frequency. The maximum number of Over Age 59 1/2
withdrawals permitted to a Participant in any 12-month period
is one.
(e) Suspension from Further Contributions. Upon making an Over
Age 59 1/2 withdrawal, a Participant shall not be eligible to
receive Company Match Contributions on his or her After-Tax
Contributions for the quarter of the Plan Year in which the
withdrawal payment is made if any amounts attributable to his
or her After-Tax Account are withdrawn.
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11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S
REQUIRED BEGINNING DATE
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his or her
death, shall be provided with information regarding all optional
times and forms of distribution available under the Plan, including
the notices prescribed by Code sections 402(f) and 411(a)(11).
Subject to the other requirements of this Section, a Participant,
or his or her Beneficiary in the case of his or her death, may
elect, in such manner and with such advance notice as prescribed by
the Administrator, to have his or her vested Account balance paid
to him or her beginning upon any Settlement Date following the
Participant's termination of employment with all Related Companies
and a reasonable period of time during which the Administrator
shall process, and inform the Trustee of, the Participant's
termination or, if earlier, at the time of the Participant's
Required Beginning Date.
Notwithstanding, if a Participant's termination of employment with
all Related Companies does not constitute a separation from service
for purposes of Code section 401(k)(2)(B)(i)(I) or otherwise
constitute an event set forth under Code section 401(k)(10)(A)(ii)
or (iii) as described in Section 19.3, the portion of a
Participant's Account subject to the distribution rules of Code
section 401(k) may not be distributed until such time as he or she
separates from service for purposes of Code section
401(k)(2)(B)(i)(I) or, if earlier, upon such other event as
described in Code section 401(k)(2)(B) and as provided for in the
Plan.
Code sections 401(a)(11) and 417 do not apply to distributions
under the Plan. A distribution may commence less than 30 days after
the aforementioned notices are provided, if:
(a) the Participant is clearly informed that he or she has the
right to a period of at least 30 days after receipt of such
notices to consider the decision as to whether to elect a
distribution and if so to elect a particular form of
distribution and to elect or not elect a Direct Rollover for
all or a portion, if any, of his or her distribution which
constitutes an Eligible Rollover Distribution; and
(b) the Participant after receiving such notices, affirmatively
elects a distribution and a Direct Rollover for all or a
portion, if any, of his or her distribution which constitutes
an Eligible Rollover Distribution or alternatively elects to
have all or a portion made payable directly to him or her,
thereby not electing a Direct Rollover for all or a portion
thereof.
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11.2 Spousal Consent
A Participant is not required to obtain Spousal Consent in order to
receive a distribution under the Plan.
11.3 Payment Form and Medium
Except to the extent otherwise provided by Section 11.4, a
Participant may elect to be paid in any of these forms:
(a) a single lump sum;
(b) a portion paid in a lump sum, and the remainder paid later
(partial payment); or
(c) periodic installments over a period not to exceed the life
expectancy of the Participant and his or her Beneficiary.
Distributions shall be made in cash, except to the extent a
distribution consists of a loan call as described in Section 9.
Alternatively, a Participant may elect that a distribution in the
form of a lump sum or a partial payment be made in the form of
whole shares of Company Stock and cash in lieu of fractional shares
to the extent the distribution consists of amounts from the Company
Stock Fund. With regard to the portion of a distribution
representing an Eligible Rollover Distribution, a Distributee may
elect a Direct Rollover for all or a portion of such amount.
11.4 Distribution of Small Amounts
If after a Participant's employment with all Related Companies
ends, the Participant's vested Account balance is $3,500 or less,
and if at the time of any prior in-service withdrawal or
distribution the Participant's vested Account balance did not
exceed $3,500, the Participant's benefit shall be paid as a single
lump sum as soon as administratively feasible in accordance with
procedures prescribed by the Administrator. Effective January 1,
1998, "$5,000" shall be substituted for each reference to "$3,500"
in the preceding sentence.
11.5 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from the
assets of his or her own Account and shall be based on the Account
values as of the Trade Date the distribution is processed. The
available assets shall be determined first by Account and then
within each Account used for funding a distribution, amounts shall
first be taken from the Sweep Account and then taken by Investment
Fund in direct proportion to the market value of the Participant's
interest in each Investment Fund as of the Trade Date on which the
distribution is processed.
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The distribution shall be funded on the Settlement Date following
the Trade Date as of which the distribution is processed. The
Trustee shall make payment to the Participant or on behalf of the
Participant as soon thereafter as administratively feasible.
11.6 Latest Commencement Permitted
In addition to any other Plan requirements and unless a Participant
elects otherwise, his or her benefit payments shall begin not later
than 60 days after the end of the Plan Year in which he or she
attains his or her Normal Retirement Date or retires, whichever is
later. However, if the amount of the payment or the location of the
Participant (after a reasonable search) cannot be ascertained by
that deadline, payment shall be made no later than 60 days after
the earliest date on which such amount or location is ascertained
but in no event later than the Participant's Required Beginning
Date. A Participant's failure to elect in such manner as prescribed
by the Administrator to have his or her vested Account balance paid
to him or her, shall be deemed an election by the Participant to
defer his or her distribution but in no event shall his or her
benefit payments commence later than his or her Required Beginning
Date.
If benefit payments cannot begin at the time required because the
location of the Participant cannot be ascertained (after a
reasonable search), the Administrator may, at any time thereafter,
treat such person's Account as forfeited subject to the provisions
of Section 18.6.
11.7 Payment Within Life Expectancy
The Participant's payment election must be consistent with the
requirement of Code section 401(a)(9) that all payments are to be
completed within a period not to exceed the lives or the joint and
last survivor life expectancy of the Participant and his or her
Beneficiary. The life expectancies of a Participant and his or her
Beneficiary may not be recomputed annually.
11.8 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or her
sole primary Beneficiary, the minimum annual distribution for each
calendar year, beginning with the calendar year preceding the
calendar year that includes the Participant's Required Beginning
Date, shall not be less than the quotient obtained by dividing (a)
the Participant's vested Account balance as of the last Trade Date
of the preceding year by (b) the applicable divisor as determined
under the incidental benefit requirements of Code section
401(a)(9).
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11.9 Payment to Beneficiary
Payment to a Beneficiary must either (i) be completed by the end of
the calendar year that contains the fifth anniversary of the
Participant's death or (ii) begin by the end of the calendar year
that contains the first anniversary of the Participant's death and
be completed within the period of the Beneficiary's life or life
expectancy, except that:
(a) If the Participant dies after his or her Required Beginning
Date, payment to his or her Beneficiary must be made at least
as rapidly as provided in the Participant's distribution
election;
(b) If the surviving spouse is the Beneficiary, payments need not
begin until the later of (i) the end of the calendar year
that includes the first anniversary of the Participant's
death, or (ii) the end of the calendar year in which the
Participant would have attained age 70 1/2 and must be
completed within the spouse's life or life expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (i) before the Participant's Required
Beginning Date and (ii) before payments have begun to the
spouse, the spouse shall be treated as the Participant in
applying these rules.
11.10 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the Participant's
remaining Plan interest at the time of his or her death. The
designation may be changed at any time. However, a Participant's
spouse shall be the sole primary Beneficiary unless the designation
includes Spousal Consent for another Beneficiary. If no proper
designation is in effect at the time of a Participant's death or if
the Beneficiary does not survive the Participant, the Beneficiary
shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, (or if a child does
not survive the Participant, and that child leaves issue, the
issue shall be entitled to that child's share, by right of
representation) or
(c) Participant's estate.
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12 ADP AND ACP TESTS
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12 (where
a definition is contained in both Sections 1 and 12, for purposes
of Section 12 the Section 12 definition shall be controlling):
(a) "ACP" or "Average Contribution Percentage". The Average
Percentage calculated using Contributions allocated to
Participants as of a date within the Plan Year.
(b) "ACP Test". The determination of whether the ACP is in
compliance with the Basic or Alternative Limitation for a
Plan Year (as defined in Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The Average
Percentage calculated using Deferrals allocated to
Participants as of a date within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is in
compliance with the Basic or Alternative Limitation for a
Plan Year (as defined in Section 12.2).
(e) "Average Percentage". The average of the calculated
percentages for Participants within the specified group. The
calculated percentage refers to either the "Deferrals" or
"Contributions" (as defined in this Section) made on each
Participant's behalf for the Plan Year, divided by his or her
Compensation for the portion of the Plan Year in which he or
she was an Eligible Employee while a Participant. (401(k)
Contributions to the Plan or comparable contributions to
plans of Related Companies which must be refunded solely
because they exceed the Contribution Dollar Limit are
included in the percentage for the HCE Group but not for the
NHCE Group.)
(f) "Contributions" shall include Company Match and After-Tax
Contributions. In addition, Contributions may include 401(k)
Contributions, but only to the extent that (1) the
Administrator elects to use them, (2) they are not used or
counted in the ADP Test, and (3) they otherwise satisfy the
requirements as prescribed under Code section 401(m)
permitting treatment as Contributions for purposes of the ACP
Test.
(g) "Deferrals" shall include 401(k) Contributions.
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(h) "HCE" or "Highly Compensated Employee". With respect to all
Related Companies, an Employee who (in accordance with Code
section 414(q)):
(1) Was a more than 5% Owner (within the meaning of Code
section 414(q)(2)) at any time during the Plan Year or
the preceding Plan Year; or
(2) Received Compensation during the preceding Plan Year
in excess of $80,000 (as adjusted for such Year
pursuant to Code sections 414(q)(1) and 415(d)) or, if
the Company elects for such preceding Plan Year, "in
excess of $80,000 (as adjusted for such Year pursuant
to Code sections 414(q)(1) and 415(d)) and was a
member of the "top-paid group" (within the meaning of
Code section 414(q)(3)) for such preceding Plan Year"
shall be substituted for the preceding reference to
"in excess of $80,000 (as adjusted for such Year
pursuant to Code sections 414(q)(1) and 415(d))".
A former Employee shall be treated as an HCE if (1) such
former Employee was an HCE when he or she separated from
service, or (2) such former Employee was an HCE in service at
any time after attaining age 55.
The determination of who is an HCE and the determination of
the number and identity of Employees in the top-paid group
shall be made in accordance with Code section 414(q).
(i) "HCE Group" and "NHCE Group". With respect to all Related
Companies, the respective group of HCEs and NHCEs who are
eligible to have amounts contributed on their behalf for the
Plan Year, including Employees who would be eligible but for
their election not to participate or to contribute, or
because their Pay is greater than zero but does not exceed a
stated minimum. For Plan Years commencing after December 31,
1998, with respect to all Related Companies, if the Plan
permits participation prior to an Eligible Employee's
satisfaction of the minimum age and service requirements of
Code section 410(a)(1)(A), Eligible Employees who have not
met the minimum age and service requirements of Code section
410(a)(1)(A) may be excluded in the determination of the NHCE
Group, but not in the determination of the HCE Group, for
purposes of (i) the ADP Test, if Code section 410(b)(4)(B) is
applied in determining whether the 401(k) portion of the Plan
meets the requirements of Code section 410(b), or (ii) the
ACP Test, if Code 410(b)(4)(B) is applied in determining
whether the 401(m) portion of the Plan meets the requirements
of Code section 410(b).
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(1) If the Related Companies maintain two or more plans
which are subject to the ADP or ACP Test and are
considered as one plan for purposes of Code sections
401(a)(4) or 410(b), all such plans shall be
aggregated and treated as one plan for purposes of
meeting the ADP and ACP Tests, provided that the plans
may only be aggregated if they have the same plan
year.
(2) If an HCE is covered by more than one cash or deferred
arrangement, or more than one arrangement permitting
employee or matching contributions, maintained by the
Related Companies, all such plans shall be aggregated
and treated as one plan (other than those plans that
may not be permissively aggregated) for purposes of
calculating the separate percentage for the HCE which
is used in the determination of the Average
Percentage. For purposes of the preceding sentence, if
such plans have different plan years, the plans are
aggregated with respect to the plan years ending with
or within the same calendar year.
(j) "Multiple Use Test". The test described in Section 12.4 which
a Plan must meet where the Alternative Limitation (described
in Section 12.2) is used to meet both the ADP and ACP Tests.
(k) "NHCE" or "Non-Highly Compensated Employee". An Employee who
is not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must meet
either the Basic or Alternative Limitation when compared to the
respective preceding Plan Year's ADP and ACP for the preceding Plan
Year's NHCE Group, defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may not
exceed 1.25 times the NHCE Group Average Percentage.
(b) Alternative Limitation. The HCE Group Average Percentage is
limited by reference to the NHCE Group Average Percentage as
follows:
IF THE NHCE GROUP THEN THE MAXIMUM HCE
AVERAGE PERCENTAGE IS: GROUP AVERAGE PERCENTAGE IS:
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
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Alternatively, the Company may elect to use the Plan Year's ADP for
the NHCE Group for the Plan Year and/or the Plan Year's ACP for the
NHCE Group for the Plan Year. If such election is made, such
election may not be changed except as provided by the Code.
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a maximum
percentage to be used in place of the calculated percentage for all
HCEs that would reduce the ADP and/or ACP for the HCE Group by a
sufficient amount to meet the ADP and ACP Tests.
With regard to each HCE whose Deferral percentage and/or
Contribution percentage is in excess of the maximum percentage, a
dollar amount of excess Deferrals and/or excess Contributions shall
then be determined by (i) subtracting the product of such maximum
percentage for the ADP and the HCE's Compensation from the HCE's
actual Deferrals and (ii) subtracting the product of such maximum
percentage for the ACP and the HCE's Compensation from the HCE's
actual Contributions. Such amounts shall then be aggregated to
determine the total dollar amount of excess Deferrals and/or excess
Contributions. ADP and/or ACP corrections shall be made in
accordance with the leveling method as described below.
(a) ADP Correction. The HCE with the highest Deferral dollar
amount shall have his or her Deferral dollar amount reduced
in an amount equal to the lesser of the dollar amount of
excess Deferrals for all HCEs or the dollar amount that would
cause his or her Deferral dollar amount to equal that of the
HCE with the next highest Deferral dollar amount. The process
shall be repeated until the total of the Deferral dollar
amount reductions equals the dollar amount of excess
Deferrals for all HCEs.
To the extent an HCE's Deferrals were determined to be
reduced as described in the paragraph above, 401(k)
Contributions shall, by the end of the next Plan Year, be
refunded to the HCE, except that such amount to be refunded
shall be reduced by 401(k) Contributions previously refunded
because they exceeded the Contribution Dollar Limit. The
excess amounts shall first be taken from unmatched 401(k)
Contributions and then from matched 401(k) Contributions. Any
Company Match Contributions attributable to refunded excess
401(k) Contributions as described in this Section, adjusted
for investment gain or loss for the Plan Year to which the
excess 401(k) Contributions relate, shall be forfeited and
used to reduce future Contributions to be made by an Employer
as soon as administratively feasible.
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<PAGE>
(b) ACP Correction. The HCE with the highest Contribution dollar
amount shall have his or her Contribution dollar amount
reduced in an amount equal to the lesser of the dollar amount
of excess Contributions for all HCEs or the dollar amount
that would cause his or her Contribution dollar amount to
equal that of the HCE with the next highest Contribution
dollar amount. The process shall be repeated until the total
of the Contribution dollar amount reductions equals the
dollar amount of excess Contributions for all HCEs.
To the extent an HCE's Contributions were determined to be
reduced as described in the paragraph above, Contributions
shall, by the end of the next Plan Year, be refunded to the
HCE. The excess amounts shall first be taken from unmatched
After-Tax Contributions and then as a proportional
combination of matched After-Tax and Company Match
Contributions.
(c) Investment Fund Sources. Once the amount of excess Deferrals
and/or Contributions is determined, and with regard to excess
Contributions, allocated by type of Contribution, within each
Account from which amounts are refunded amounts shall first
be taken from the Sweep Account and then taken by Investment
Fund in direct proportion to the market value of the
Participant's interest in each Investment Fund (which
excludes his or her Loan Account balance) as of the Trade
Date on which the correction is processed.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is used to
meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group
must also comply with the requirements of Code section 401(m)(9).
Such Code section requires that the sum of the ADP and ACP for the
HCE Group (as determined after any corrections needed to meet the
ADP and ACP Tests have been made) not exceed the sum (which
produces the most favorable result) of:
(a) the Basic Limitation (defined in Section 12.2) applied to
either the ADP or ACP for the NHCE Group, and
(b) the Alternative Limitation applied to the other NHCE Group
percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator shall
determine a maximum percentage to be used in place of the
calculated percentage for all HCEs that would reduce either or both
the ADP or ACP for the HCE Group by a sufficient amount to meet the
multiple use limit. Any excess shall be corrected in the same
manner that excess Deferrals or Contributions are corrected.
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12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a
Participant in accordance with this Section 12 shall be adjusted
for investment gain or loss. Refunds shall not include investment
gain or loss for the period between the end of the applicable Plan
Year and the date of distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the Plan
meets the ADP Test, the ACP Test and the Multiple Use Test, and
that the Contribution Dollar Limit is not exceeded. The
Administrator shall maintain records which are sufficient to
demonstrate that the ADP Test, the ACP Test and the Multiple Use
Test, have been met for each Plan Year for at least as long as the
Employer's corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs, NHCEs, and the
performance of the ADP Test, the ACP Test and the Multiple
Use Test, and any corrective action resulting therefrom,
shall be conducted separately with regard to the Employees of
each Employer (and its Related Companies) that is not a
Related Company with respect to the other Employer(s).
(b) Collective Bargaining Units: The performance of the ADP Test,
and if applicable, the ACP Test and the Multiple Use Test,
and any corrective action resulting therefrom, shall be
conducted separately with regard to Employees who are
eligible to participate in the Plan as a result of a
collective bargaining agreement.
In addition, testing may be conducted separately, at the discretion
of the Administrator and to the extent permitted under Treasury
regulations, with regard to any group of Employees for whom
separate testing is permissible under such regulations.
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13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
13.1 "Annual Addition" Defined
The sum for a Plan Year of all (i) contributions (excluding
rollover contributions) and forfeitures allocated to the
Participant's Account and his or her account in all other defined
contribution plans maintained by any Related Company, (ii) amounts
allocated to the Participant's individual medical account (within
the meaning of Code section 415(l)(2)) which is part of a defined
benefit plan maintained by any Related Company, and (iii) if the
Participant is a key employee (within the meaning of Code section
419A(d)(3)) for the applicable or any prior Plan Year, amounts
attributable to post-retirement medical benefits allocated to his
or her separate account under a welfare benefit fund (within the
meaning of Code section 419(e)) maintained by any Related Company.
The Plan Year refers to the year to which the allocation pertains,
regardless of when it was allocated. The Plan Year shall be the
Code section 415 limitation year.
13.2 Maximum Annual Addition
A Participant's Annual Addition for any Plan Year shall not exceed
the lesser of (i) 25% of his or her Taxable Income or (ii) $30,000
(as adjusted for cost of living increases pursuant to Code section
415(d)); provided, however, that clause (i) shall not apply to
Annual Additions described in clauses (ii) and (iii) of Section
13.1 and except that for Plan Years commencing after December 31,
1997, "Compensation" shall be substituted for the preceding
reference to "Taxable Income".
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual Addition
for such year, Contributions to be made for the remainder of the
Plan Year shall be limited to the amount needed for each affected
Participant to receive the maximum Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a Participant's
Account (resulting from a reasonable error in determining a
Participant's compensation or the maximum permissible amount of his
or her elective deferrals (within the meaning of Code section
402(g)(3)), or other facts and circumstances acceptable to the
Internal Revenue Service), the excess amount (adjusted to reflect
investment gains) shall first be returned to the Participant to the
extent of his or her After-Tax Contributions, and then to the
extent of his or her 401(k) Contributions (however to the extent
After-Tax and/or 401(k) Contributions were matched, the applicable
Company Match Contributions shall be forfeited in proportion to the
returned matched After-Tax and/or 401(k) Contributions) and the
remaining excess, if any, shall be forfeited by the
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Participant and together used to reduce future Contributions to be
made by an Employer as soon as administratively feasible.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess Annual
Addition, received allocations to more than one defined
contribution plan, the excess shall be corrected by reducing the
Annual Addition to the Plan only after all possible reductions have
been made to the other defined contribution plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the greater of
125% of the "protected current accrued benefit" or the normal limit
which is the lesser of (i) 125% of the dollar limitation in effect
under Code section 415(b)(1)(A) for the Plan Year or (ii) 140% of
the amount which may be taken into account under Code section
415(b)(1)(B) for the Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit provided by
the plan determined pursuant to Code section 415(e)(2)(A),
and
(b) "protected current accrued benefit" in a defined benefit plan
in existence (1) on July 1, 1982, shall be the accrued annual
benefit provided for under Public Law 97-248, section
235(g)(4), as amended, or (2) on May 6, 1986, shall be the
accrued annual benefit provided for under Public Law 99-514,
section 1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the Participant's
Annual Addition for each Plan Year to date and the denominator is
the sum of the "annual amounts" for each year in which the
Participant has performed service with a Related Company. The
"annual amount" for any Plan Year is the lesser of (i) 125% of the
dollar limitation in effect under Code section 415(c)(1)(A)
(determined without regard to subsection (c)(6)) for the Plan Year
or (ii) 140% of the amount which may be taken into account under
Code section 415(c)(1)(B) for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code
section 415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-248,
section 235(g)(3), as amended, or Public Law 99-514, section
1106(i)(4).
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13.8 Combined Plan Limits and Correction
The sum of a Participant's Defined Benefit Fraction and Defined
Contribution Fraction for any Plan Year may not exceed 1.0. If the
combined fraction exceeds 1.0 for any Plan Year, the Participant's
benefit under any defined benefit plan (to the extent it has not
been distributed or used to purchase an annuity contract) shall be
limited so that the combined fraction does not exceed 1.0 before
any defined contribution limits shall be enforced.
For Plan Years commencing after December 31, 1999, the provisions
of the preceding paragraph shall no longer be effective.
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14 TOP HEAVY RULES
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each qualified
plan of the Related Companies (1) in which a Key Employee is
a participant or was a participant during the determination
period (regardless of whether such plan has terminated), or
(2) which enables another plan in the group to meet the
requirements of Code sections 401(a)(4) or 410(b). The
Administrator may also treat any other qualified plan of the
Related Companies as part of the group if the resulting group
would continue to meet the requirements of Code sections
401(a)(4) and 410(b) with such plan being taken into account.
(b) "Determination Date". For any Plan Year, the last Trade Date
of the preceding Plan Year or, in the case of the Plan's
first Plan Year, the last Trade Date of that Plan Year.
(c) "Key Employee". A current or former Employee (or his or her
Beneficiary) who at any time during the five year period
ending on the Determination Date was:
(1) an officer of a Related Company whose Compensation (i)
exceeds 50% of the amount in effect under Code section
415(b)(1)(A) and (ii) places him or her within the
following highest paid group of officers:
NUMBER OF EMPLOYEES NUMBER OF
NOT EXCLUDED UNDER CODE HIGHEST PAID
SECTION 414(Q)(5) OFFICERS INCLUDED
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation exceeds
$150,000, or
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(4) a more than 0.5% Owner who is among the 10 Employees
owning the largest interest in a Related Company and
whose Compensation exceeds the amount in effect under
Code section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date of (1)
an Employee's Account, (2) the present value of his or her
other accrued benefits provided by all qualified plans within
the Aggregation Group, and (3) the aggregate distributions
made within the five year period ending on such Date. For
this purpose, the present value of the Employee's accrued
benefit in a defined benefit plan shall be determined by the
method that is used for benefit accrual purposes under all
such plans maintained by the Related Companies or, if there
is no such single method used under all such plans, as if the
benefit accrues no more rapidly than the slowest rate
permitted by the fractional accrual rule in Code section
411(b)(1)(C). Plan Benefits shall exclude rollover
contributions and similar transfers made after December 31,
1983 as provided in Code section 416(g)(4)(A).
(e) "Top Heavy". The Plan's status when the Plan Benefits of Key
Employees account for more than 60% of the Plan Benefits of
all Employees who have performed services at any time during
the five year period ending on the Determination Date. The
Plan Benefits of Employees who were, but are no longer, Key
Employees (because they have not been an officer or Owner
during the five year period), are excluded in the
determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in which
the Plan is Top Heavy, the Employer shall not allow any
contributions (other than a Rollover Contribution from a plan
maintained by a non Related Company) to be made by or on
behalf of any Key Employee unless the Employer makes a
contribution (other than contributions made by an Employer in
accordance with a Participant's salary deferral election or
contributions made by an Employer based upon the amount
contributed by a Participant) on behalf of all Participants
who were Eligible Employees as of the last day of the Plan
Year in an amount equal to at least 3% of each such
Participant's Taxable Income.
(b) Overriding Minimum Benefit. Notwithstanding, contributions
shall be permitted on behalf of Key Employees if the Employer
also maintains a defined benefit plan which automatically
provides a benefit which satisfies the Code section 416(c)(1)
minimum benefit requirements, including the adjustment
provided in Code section 416(h)(2)(A), if applicable. If the
Plan is part of an Aggregation Group under which a Key
Employee is receiving a benefit and no minimum contribution
is
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provided under any other plan, a minimum contribution of at
least 3% of Taxable Income shall be provided to the
Participants specified in the preceding paragraph. In
addition, the Employer may offset a defined benefit minimum
by contributions (other than contributions made by an
Employer in accordance with a Participant's salary deferral
election or contributions made by an Employer based upon the
amount contributed by a Participant) made to the Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall be
substituted for 125% in determining the Defined Benefit Fraction
and the Defined Contribution Fraction. For Plan Years commencing
after December 31, 1999, the provisions of the preceding sentence
shall no longer be effective.
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15 PLAN ADMINISTRATION
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator, the
Committee and/or the Trustee, as applicable, whose specific duties
are delineated in the Plan and Trust. In addition, Plan fiduciaries
also include any other person to whom fiduciary duties or
responsibilities are delegated with respect to the Plan. Any person
or group may serve in more than one fiduciary capacity with respect
to the Plan. To the extent permitted under ERISA section 405, no
fiduciary shall be liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with the Plan and
Trust to the extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence that a
prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a
like character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying
reasonable expenses of administering the Plan;
(d) diversify Plan investments, to the extent such fiduciary is
responsible for directing the investment of Plan assets, so
as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(e) treat similarly situated Participants and Beneficiaries in a
uniform and nondiscriminatory manner.
15.3 Company is ERISA Plan Administrator
The Company is the administrator of the Plan (within the meaning of
ERISA section 3(16)) and is responsible for compliance with all
reporting and disclosure requirements, except those that are
explicitly the responsibility of the Trustee under applicable law.
The Administrator and/or Committee shall have any necessary
authority to carry out such functions through the actions of the
Administrator, duly appointed officers of the Company and/or the
Committee.
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15.4 Administrator Duties
The Administrator shall have the discretionary authority to
construe the Plan and Trust, other than the provisions which relate
to the Trustee, and to do all things necessary or convenient to
effect the intent and purposes thereof, whether or not such powers
are specifically set forth in the Plan and Trust. Actions taken in
good faith by the Administrator shall be conclusive and binding on
all interested parties, and shall be given the maximum possible
deference allowed by law. In addition to the duties listed
elsewhere in the Plan and Trust, the Administrator's authority
shall include, but not be limited to, the discretionary authority
to:
(a) determine who is eligible to participate, if a contribution
qualifies as a rollover contribution, the allocation of
Contributions, and the eligibility for loans, in-service
withdrawals and distributions;
(b) provide each Participant with a summary plan description no
later than 90 days after he or she has become a Participant
(or such other period permitted under ERISA section
104(b)(1)), as well as informing each Participant of any
material modification to the Plan in a timely manner;
(c) make a copy of the following documents available to
Participants during normal work hours: the Plan and Trust
(including subsequent amendments), all annual and interim
reports of the Trustee related to the entire Plan, the latest
annual report and the summary plan description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased Participant's
interest based upon such proof and evidence as it deems
necessary;
(e) establish and review at least annually a funding policy
bearing in mind both the short-run and long-run needs and
goals of the Plan and to the extent Participants may direct
their own investments, the funding policy shall focus on
which Investment Funds are available for Participants to use;
and
(f) adjudicate claims pursuant to the claims procedure described
in Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors (including
attorneys, accountants, actuaries, consultants, record keepers,
investment counsel and administrative assistants) as it considers
necessary to assist it in the performance of its duties. The
Administrator shall also comply with the bonding requirements of
ERISA section 412.
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15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, has appointed a
Committee to administer the Plan on its behalf. The Company shall
provide the Trustee with the names and specimen signatures of any
persons authorized to serve as Committee members and act as or on
its behalf. Any Committee member appointed by the Company shall
serve at the pleasure of the Company, but may resign by written
notice to the Company. Committee members shall serve without
compensation from the Plan for such services. Except to the extent
that the Company otherwise provides, any delegation of duties to
the Committee shall carry with it the full discretionary authority
of the Administrator to complete such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company to the
Committee may be done by a majority of its members. The
majority may be expressed by a vote at a meeting or in
writing without a meeting, and a majority action shall be
equivalent to an action of all Committee members.
(b) Meetings. The Committee shall hold meetings upon such notice,
place and times as it determines necessary to conduct its
functions properly.
(c) Reliance by Trustee. The Committee may authorize one or more
of its members to execute documents on its behalf and may
authorize one or more of its members or other individuals who
are not members to give written direction to the Trustee in
the performance of its duties. The Committee shall provide
such authorization in writing to the Trustee with the name
and specimen signatures of any person authorized to act on
its behalf. The Trustee shall accept such direction and rely
upon it until notified in writing that the Committee has
revoked the authorization to give such direction. The Trustee
shall not be deemed to be on notice of any change in the
membership of the Committee, parties authorized to direct the
Trustee in the performance of its duties, or the duties
delegated to and by the Committee until notified in writing.
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16 MANAGEMENT OF INVESTMENTS
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of the Plan and Trust which relate
to the Trustee, for use in providing Plan benefits and paying Plan
fees and expenses not paid directly by the Employer. Plan benefits
shall be drawn solely from the Trust and paid by the Trustee as
directed by the Administrator. Notwithstanding, the Company may
appoint, with the approval of the Trustee, another trustee to hold
and administer Plan assets which do not meet the requirements of
Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the Trustee
to invest Trust assets in one or more Investment Funds. The number
and composition of Investment Funds may be changed from time to
time, without the necessity of amending the Plan and Trust. The
Trustee may establish reasonable limits on the number of Investment
Funds as well as the acceptable assets for any such Investment
Fund. Each of the Investment Funds may be comprised of any of the
following:
(a) shares of a registered investment company, whether or not the
Trustee or any of its affiliates is an advisor to, or other
service provider to, such company;
(b) collective investment funds maintained by the Trustee, or any
other fiduciary to the Plan, which are available for
investment by trusts which are qualified under Code sections
401(a) and 501(a);
(c) individual equity and fixed income securities which are
readily tradable on the open market;
(d) synthetic guaranteed investment contracts and guaranteed
investment contracts issued by an insurance company and/or
synthetic guaranteed investment contracts and bank investment
contracts issued by a bank;
(e) interest bearing deposits (which may include interest bearing
deposits of the Trustee); and
(f) Company Stock.
Any Investment Fund assets invested in a collective investment
fund, shall be subject to all the provisions of the instruments
establishing and governing such fund. These instruments, including
any subsequent amendments, are incorporated herein by reference.
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16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient deposit or
money market type assets in each Investment Fund to handle the
Investment Fund's liquidity and disbursement needs. Each
Participant's and Beneficiary's Sweep Account, which is used to
hold assets pending investment or disbursement, shall consist of
interest bearing deposits (which may include interest bearing
deposits of the Trustee) and/or money market type assets or funds.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in the
Investment Funds as soon as practicable after such instructions are
received from the Administrator, Participants or Beneficiaries.
Such instructions shall remain in effect until changed by the
Administrator, Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company
Shares
The Administrator shall be entitled to vote proxies or exercise any
shareholder rights relating to shares held on behalf of the Plan in
a registered investment company. Notwithstanding, the authority to
vote proxies and exercise shareholder rights related to such shares
held in a Custom Fund is vested as provided otherwise in Section
16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the Trustee,
an investment manager for any Investment Fund established by the
Trustee solely for Participants of the Plan and, subject to this
Section 16.7, any other qualified plan of the Company or a Related
Company (a "Custom Fund"). The investment manager may be the
Administrator, Trustee or an investment manager pursuant to ERISA
section 3(38). The Administrator shall advise the Trustee in
writing of the appointment of an investment manager and shall cause
the investment manager to acknowledge to the Trustee in writing
that the investment manager is a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the Trustee,
shall be established for a Custom Fund. If a Custom Fund
consists solely of collective investment funds or shares of a
registered investment company (and sufficient deposit or
money market type assets to handle the Custom Fund's
liquidity and disbursement needs), its underlying instruments
shall constitute the guidelines.
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(b) Authority of Investment Manager. The investment manager of a
Custom Fund shall have the authority to vote or execute
proxies, exercise shareholder rights, manage, acquire, and
dispose of Trust assets. Notwithstanding, if the Company
provides for a Company Stock Fund, the authority to vote
proxies and exercise shareholder rights related to shares of
Company Stock held in the Company Stock Fund is vested as
provided otherwise in Section 16.
(c) Custody and Trade Settlement. Unless otherwise agreed to by
the Trustee, the Trustee shall maintain custody of all Custom
Fund assets and be responsible for the settlement of all
Custom Fund trades. For purposes of this Section, shares of a
collective investment fund, shares of a registered investment
company and synthetic guaranteed investment contracts and
guaranteed investment contracts issued by an insurance
company and/or synthetic guaranteed investment contracts and
bank investment contracts issued by a bank, shall be regarded
as the Custom Fund assets instead of the underlying assets of
such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated to invest or
otherwise manage any Custom Fund assets for which the Trustee
or Administrator is not the investment manager nor shall the
Administrator or Trustee be liable for acts or omissions with
regard to the investment of such assets except to the extent
required by ERISA.
16.7 Master Custom Fund
The Trustee may establish, at the direction of the Administrator, a
single Custom Fund (the "Master Custom Fund"), for the benefit of
the Plan and any other qualified plan of the Company or a Related
Company for which the Trustee acts as trustee pursuant to a plan
and trust document that contains a provision substantially
identical to this provision. The assets of the Plan, to the extent
invested in the Master Custom Fund, shall consist only of that
percentage of the assets of the Master Custom Fund represented by
the shares held by the Plan.
16.8 Authority to Segregate Assets
The Administrator may direct the Trustee to split an Investment
Fund into two or more funds in the event any assets in the
Investment Fund are illiquid or the value is not readily
determinable. In the event of such segregation, the Administrator
shall give instructions to the Trustee on what value to use for the
split-off assets, and the Trustee shall not be responsible for
confirming such value.
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16.9 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund, directly or
through a Master Custom Fund, the Company Stock Fund shall be
comprised of Company Stock and sufficient deposit or money market
type assets to handle the Company Stock Fund's liquidity and
disbursement needs. The Company Stock Fund may be as large as
necessary to comply with Participants' and Beneficiaries'
investment elections.
16.10 Participants Have Right to Vote and Tender Company Stock
Each Participant or Beneficiary shall be entitled to instruct the
Trustee as to the voting or tendering of any full or partial shares
of Company Stock held on his or her behalf in the Company Stock
Fund. Prior to such voting or tendering of Company Stock, each
Participant or Beneficiary shall receive a copy of the proxy
solicitation or other material relating to such vote or tender
decision and a form for the Participant or Beneficiary to complete
which confidentially instructs the Trustee to vote or tender such
shares in the manner indicated by the Participant or Beneficiary.
Upon receipt of such instructions, the Trustee shall act with
respect to such shares as instructed.
With regard to shares for which the Trustee receives no voting or
tendering instructions from Participants or Beneficiaries, the
Administrator shall instruct the Trustee with respect to how to
vote or tender such shares and the Trustee shall act with respect
to such shares as instructed.
16.11 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining the
applicability (and, if applicable, complying with) the requirements
of the Securities Act of 1933, as amended, the California Corporate
Securities Law of 1968, as amended, and any other applicable blue
sky law. The Administrator shall also specify what restrictive
legend or transfer restriction, if any, is required to be set forth
on the certificates for the securities and the procedure to be
followed by the Trustee to effectuate a resale of such securities.
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17 TRUST ADMINISTRATION
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe
those provisions of the Plan and Trust which relate to the Trustee
and to do all things necessary or convenient to the administration
of the Trust, whether or not such powers are specifically set forth
in the Plan and Trust. Actions taken in good faith by the Trustee
shall be conclusive and binding on all interested parties, and
shall be given the maximum possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth in the
Plan and Trust, the Trustee shall have all the power, authority,
rights and privileges of an absolute owner of the Trust assets and,
not in limitation but in amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell, tender,
exchange, dispose of, encumber, hypothecate, pledge,
mortgage, lease, grant options respecting, repair, alter,
insure, or distribute any and all property in the Trust;
(b) borrow money, participate in reorganizations, pay calls and
assessments, vote or execute proxies, exercise subscription
or conversion privileges, exercise options and register any
securities in the Trust in the name of the nominee, in
federal book entry form or in any other form as shall permit
title thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate, adjust,
settle, enforce or foreclose, by judicial proceedings or
otherwise, or defend against the same, any obligations or
claims in favor of or against the Trust; and
(d) lend, through a collective investment fund, any securities
held in such collective investment fund to brokers, dealers
or other borrowers and to permit such securities to be
transferred into the name and custody and be voted by the
borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any
Trust assets outside the jurisdiction of the United States, except
as authorized under ERISA section 404(b).
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17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold federal
(and, if applicable, state) income taxes with regard to any
Eligible Rollover Distribution that is not paid as a Direct
Rollover in accordance with the Participant's withholding
election or as required by law if no election is made or the
election is less than the amount required by law. With regard
to any taxable distribution that is not an Eligible Rollover
Distribution, the Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes in
accordance with the Participant's withholding election or as
required by law if no election is made.
(b) Taxes Due From Investment Funds. The Trustee shall pay from
the Investment Fund any taxes or assessments imposed by any
taxing or governmental authority on such Investment Fund or
its income, including related interest and penalties.
17.5 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable period)
following the close of the Plan Year, the Trustee shall
provide the Administrator with an annual accounting of Trust
assets and information to assist the Administrator in meeting
ERISA's annual reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records and
provide sufficient reporting to allow the Administrator to
properly monitor the Trust's assets and activity.
(c) Administrator Approval. Approval of any Trustee accounting
shall automatically occur 90 days after such accounting has
been received by the Administrator, unless the Administrator
files a written objection with the Trustee within such time
period. Such approval shall be final as to all matters and
transactions stated or shown therein and binding upon the
Administrator.
17.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is not
readily tradable and listed on a national securities exchange
registered under the Securities Exchange Act of 1934, as amended,
the Trustee may engage a qualified independent appraiser to
determine the fair market value of such property, and the appraisal
fees shall be paid from the Investment Fund containing the asset.
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17.7 Legal Counsel
The Trustee may consult with legal counsel of its choice, including
counsel for the Employer or counsel of the Trustee, upon any
question or matter arising under the Plan and Trust. When relied
upon by the Trustee, the opinion of such counsel shall be evidence
that the Trustee has acted in good faith.
17.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such as may
be mutually agreed upon by the Company and the Trustee. Trustee
fees and all reasonable expenses of counsel and advisors retained
by the Trustee shall be paid in accordance with Section 6.
17.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the Trustee,
shall be confined to construing the terms of the Plan and Trust as
they relate to the Trustee, receiving funds on behalf of and making
payments from the Trust, safeguarding and valuing Trust assets,
investing and reinvesting Trust assets in the Investment Funds as
directed by the Administrator, Participants or Beneficiaries, and
those duties as described in this Section 17.
The Trustee shall have no duty or authority to ascertain whether
Contributions are in compliance with the Plan, to enforce
collection or to compute or verify the accuracy or adequacy of any
amount to be paid to it by the Employer. The Trustee shall not be
liable for the proper application of any part of the Trust with
respect to any disbursement made at the direction of the
Administrator.
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18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any Employee.
The Employer expressly reserves the right to discharge an Employee
at any time, with or without cause, without regard to the effect
such discharge would have upon the Employee's interest in the Plan.
18.2 Compliance With USERRA
Notwithstanding any provision of the Plan to the contrary, with
regard to an Employee who after serving in the uniformed services
is reemployed on or after December 12, 1994, within the time
required by USERRA, contributions shall be made and benefits and
service credit shall be provided under the Plan with respect to his
or her qualified military service (as defined in Code section
414(u)(5)) in accordance with Code section 414(u). Furthermore,
notwithstanding any provision of the Plan to the contrary,
Participant loan payments may be suspended during a period of
qualified military service.
18.3 Limited Return of Contributions
Except as provided in this Section 18.3, (i) Plan assets shall not
revert to the Employer nor be diverted for any purpose other than
the exclusive benefit of Participants and Beneficiaries and
defraying reasonable expenses of administering the Plan; and (ii) a
Participant's vested interest shall not be subject to divestment.
As provided in ERISA section 403(c)(2), the actual amount of a
Contribution or portion thereof made by the Employer (or the
current value of such if a net loss has occurred) may revert to the
Employer if:
(a) such Contribution or portion thereof is made by reason of a
mistake of fact;
(b) a determination with respect to the initial qualification of
the Plan under Code section 401(a) is not received and a
request for such determination is made within the time
prescribed under Code section 401(b) (the existence of and
Contributions under the Plan are hereby conditioned upon such
initial qualification); or
(c) such Contribution or portion thereof is not deductible under
Code section 404 (such Contributions are hereby conditioned
upon such deductibility) in the taxable year of the Employer
for which the Contribution is made.
The reversion to the Employer must be made (if at all) within one
year of the mistaken payment, the date of denial of qualification,
or the date of disallowance of deduction, as the case may be. A
Participant shall have no rights under the Plan with respect to any
such reversion.
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18.4 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan may be
anticipated, assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit with
respect to a Participant pursuant to a QDRO; or
(b) to use a Participant's vested Account balance as security for
a loan from the Plan which is permitted pursuant to Code
section 4975.
18.5 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the
Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any payment
due him or her, the Administrator shall have the payment of the
benefit, or any part thereof, made to the person (or persons or
institution) whom it reasonably believes is caring for or
supporting the payee, unless it has received due notice of claim
therefor from a duly appointed guardian or conservator of the
payee. Any payment shall to the extent thereof, be a complete
discharge of any liability under the Plan to the payee.
18.6 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to payment of
a Plan benefit after a reasonable search, the Administrator may at
any time thereafter treat such person's Account as forfeited and
use such amount to reduce future Contributions to be made by an
Employer as soon as administratively feasible. If such person
subsequently presents the Administrator with a valid claim for the
benefit, such person shall be paid the amount treated as forfeited,
plus the interest that would have been earned in the Sweep Account
to the date of determination. The Administrator shall pay the
amount through an additional amount contributed by the Employer.
18.7 Action in the Event of a Chapter 13 Bankruptcy Filing or a Federal
Tax Levy
(a) Chapter 13 Bankruptcy Filing by a Participant. In accordance
with procedures prescribed by the Administrator, during the
period commencing immediately after the Administrator
receives notification that a Participant has filed bankruptcy
under Chapter 13 of the Bankruptcy Code and ending
immediately after the earlier of (i) the date the
Administrator receives notification that the Chapter 13 plan
has been completed; (ii) the date the Administrator receives
notification that a discharge in bankruptcy has been granted;
or (iii) the date the Administrator receives notification
that the Chapter 13 bankruptcy case has been dismissed, and
unless the terms of the Chapter 13 plan permit
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otherwise, a loan request made by the Participant shall be
denied and no payroll deductions representing 401(k)
Contributions, After-Tax Contributions or loan payments shall
be made on behalf of the Participant.
(b) Federal Tax Levy Against a Participant's Wages. In accordance
with procedures prescribed by the Administrator, during the
period commencing immediately after the Administrator
receives notification of a federal tax levy against a
Participant's wages and ending immediately after the date the
Administrator receives notification that the levy is
released, no payroll deductions representing 401(k)
Contributions, After-Tax Contributions or loan payments shall
be made on behalf of the Participant.
(c) Federal Tax Levy Against a Participant's Account. In
accordance with procedures prescribed by the Administrator,
immediately after the Administrator receives notification of
a federal tax levy against a Participant's Account, the
Administrator shall determine as of the date of notification
the amount of the Participant's Account that the Participant
otherwise has a present right to receive in accordance with
Sections 10 or 11 and shall disburse such amount or, if less,
the amount necessary to satisfy the levy, less applicable tax
withholding, to the IRS or, if the Participant has no present
right to receive any amount from his or her Account, the
Administrator shall provide such notification to the IRS.
18.8 Suspension of Certain Plan Provisions During Conversion Period
Notwithstanding any provision of the Plan to the contrary, during
any Conversion Period, in accordance with procedures established by
the Administrator and the Trustee, the Administrator may
temporarily suspend, in whole or in part, certain provisions under
the Plan, which may include, but are not limited to, a
Participant's right to change his or her Contribution election, a
Participant's right to change his or her investment election and a
Participant's right to borrow or withdraw from his or her Account
or obtain a distribution from his or her Account.
18.9 Suspension of Certain Plan Provisions During Other Periods
Notwithstanding any provision of the Plan to the contrary, in
accordance with procedures established by the Administrator and the
Trustee, the Administrator may temporarily suspend a Participant's
right to borrow or withdraw from his or her Account or obtain a
distribution from his or her Account, if (i) the Administrator
receives a domestic relations order and the Participant's Account
is a source of the payment for such domestic relations order, or
(ii) if the Administrator receives notice that a domestic relations
order is being sought by the Participant, his or her spouse, former
spouse, child or other dependent (as
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defined in Code section 152) and the Participant's Account is a
source of the payment for such domestic relations order. Such
suspension may continue for a reasonable period of time (as
determined by the Administrator) which may include the period of
time the Administrator, a court of competent jurisdiction or other
appropriate person is determining whether the domestic relations
order qualifies as a QDRO.
18.10 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees with
the Administrator's determination of his or her right to Plan
benefits must submit a written claim and exhaust this claim
procedure before legal recourse of any type is sought. The
claim must include the important issues the interested party
believes support the claim. The Administrator, pursuant to
the authority provided in the Plan, shall either approve or
deny the claim.
(b) Process for Denying a Claim. The Administrator's partial or
complete denial of an initial claim must include an
understandable, written response covering (1) the specific
reasons why the claim is being denied (with reference to the
pertinent Plan provisions) and (2) the steps necessary to
perfect the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested party may
make a written appeal of the Administrator's initial
decision, and the Administrator shall respond in the same
manner and form as prescribed for denying a claim initially.
(d) Time Frame. The initial claim, its review, appeal and final
review shall be made in a timely fashion, subject to the
following time table:
Days to Respond
ACTION FROM LAST ACTION
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the maximum
response time for its initial and final review if it provides
an explanation within the normal period of why an extension
is needed and when its decision shall be forthcoming.
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18.11 Construction
Headings are included for reading convenience. The text shall
control if any ambiguity or inconsistency exists between the
headings and the text. The singular and plural shall be
interchanged wherever appropriate. References to Participant shall
include Alternate Payee and/or Beneficiary when appropriate and
even if not otherwise already expressly stated.
18.12 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and administered
under ERISA and other applicable federal laws and, where not
otherwise preempted, by the laws of the State of California. If any
provision of the Plan and Trust is or becomes invalid or otherwise
unenforceable, that fact shall not affect the validity or
enforceability of any other provision of the Plan and Trust. All
provisions of the Plan and Trust shall be so construed as to render
them valid and enforceable in accordance with their intent.
18.13 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or
inaction, (including a Plan termination in which the Company fails
to apply for a favorable determination from the Internal Revenue
Service with respect to the qualification of the Plan upon its
termination), in relation to the Plan or Trust (i) including
(without limitation) expenses reasonably incurred in the defense of
any claim relating to the Plan or its assets, and amounts paid in
any settlement relating to the Plan or its assets, but (ii)
excluding liability resulting from actions or inactions made in bad
faith, or resulting from the negligence or willful misconduct of
the Trustee. The Company shall have the right, but not the
obligation, to conduct the defense of any action to which this
Section applies. The Plan fiduciaries are not entitled to indemnity
from the Plan assets relating to any such action.
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19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
19.1 Amendment
The Company reserves the right to amend the Plan and Trust at any
time, to any extent and in any manner it may deem necessary or
appropriate. The Company (and not the Trustee) shall be responsible
for adopting any amendments necessary to maintain the qualified
status of the Plan and Trust under Code sections 401(a) and 501(a).
If the Committee is acting as the Administrator in accordance with
Section 15.6, it shall have the authority to adopt Plan and Trust
amendments which have no substantial adverse financial impact upon
any Employer or the Plan. All interested parties shall be bound by
any amendment, provided that no amendment shall:
(a) become effective unless it has been adopted in accordance
with the procedures set forth in Section 19.5;
(b) except to the extent permissible under ERISA and the Code,
make it possible for any portion of the Trust assets to
revert to an Employer or to be used for, or diverted to, any
purpose other than for the exclusive benefit of Participants
and Beneficiaries entitled to Plan benefits and to defray
reasonable expenses of administering the Plan;
(c) decrease the rights of any Participant to benefits accrued
(including the elimination of optional forms of benefits) to
the date on which the amendment is adopted, or if later, the
date upon which the amendment becomes effective, except to
the extent permitted under ERISA and the Code; nor
(d) permit a Participant to be paid any portion of his or her
Account subject to the distribution rules of Code section
401(k) unless the payment would otherwise be permitted under
Code section 401(k).
19.2 Merger
The Plan and Trust may not be merged or consolidated with, nor may
its assets or liabilities be transferred to, another plan unless
each Participant and Beneficiary would, if the resulting plan were
then terminated, receive a benefit just after the merger,
consolidation or transfer which is at least equal to the benefit
which would be received if either plan had terminated just before
such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation of:
(i) substantially all of the Employer's assets used in a trade or
business to an unrelated corporation, or (ii) a sale of such
Employer's interest in a subsidiary to an
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unrelated entity or individual, lump sum distributions shall be
permitted from the Plan, except as provided below, to Participants
with respect to Employees who continue employment with the
corporation acquiring such assets or who continue employment with
such subsidiary, as applicable.
Notwithstanding, distributions shall not be permitted if the
purchaser agrees, in connection with the sale, to be substituted as
the Company as the sponsor of the Plan or to accept a transfer in a
transaction subject to Code section 414(l)(1) of the assets and
liabilities representing the Participants' benefits into a plan of
the purchaser or a plan to be established by the purchaser.
19.4 Plan Termination and Complete Discontinuance of Contributions
The Company may, at any time and for any reason, terminate the Plan
in accordance with the procedures set forth in Section 19.5, or
completely discontinue contributions.
In the event of the Plan's termination, if no successor plan is
established or maintained, lump sum distributions shall be made in
accordance with the terms of the Plan as in effect at the time of
the Plan's termination or as thereafter amended, provided that a
post-termination amendment shall not be effective to the extent
that it violates Section 19.1 unless it is required in order to
maintain the qualified status of the Plan upon its termination. The
Trustee's and Employer's authority shall continue beyond the Plan's
termination date until all Trust assets have been liquidated and
distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the adoption of
any amendment or termination (a "Change") of the Plan and Trust:
(a) The Company may adopt any Change by action of its board of
directors in accordance with its normal procedures.
(b) The Committee, if acting as Administrator in accordance with
Section 15.6, may adopt any amendment within the scope of its
authority provided under Section 19.1 and in the manner
specified in Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and (2) signed
and dated by an executive officer of the Company or, in the
case of an amendment adopted by the Committee, at least one
of its members.
(d) If the effective date of any Change is not specified in the
document setting forth the Change, it shall be effective as
of the date it is signed by the last person whose signature
is required under clause (2) above,
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except to the extent that another effective date is necessary
to maintain the qualified status of the Plan and Trust under
Code sections 401(a) and 501(a).
(e) No Change shall become effective until it is accepted and
signed by the Trustee (which acceptance shall not
unreasonably be withheld).
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate its
Plan participation by action of its board of directors in
accordance with its normal procedures. Written notice of such
action shall be signed and dated by an executive officer of the
Employer and delivered to the Company. If the effective date of
such action is not specified, it shall be effective on, or as soon
as reasonably practicable after, the date of delivery. Upon the
Employer's request, the Company may instruct the Trustee and
Administrator to spin off all affected Accounts and underlying
assets into a separate qualified plan under which the Employer
shall assume the powers and duties of the Company. Alternatively,
the Company may continue to maintain the Accounts under the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under the Plan and Trust or may
be removed by the Company at any time upon at least 90 days written
notice (or less if agreed to by both parties). In such event, the
Company shall appoint a successor trustee by the end of the notice
period. The successor trustee shall then succeed to all the powers
and duties of the Trustee under the Plan and Trust. If no successor
trustee has been named by the end of the notice period, the
Company's chief executive officer shall become the trustee, or if
he or she declines, the Trustee may petition the court for the
appointment of a successor trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively feasible after
its resignation or removal as Trustee, the Trustee shall
transfer to the successor trustee all property currently held
by the Trust. However, the Trustee is authorized to reserve
such sum of money as it may deem advisable for payment of its
accounts and expenses in connection with the settlement of
its accounts or other fees or expenses payable by the Trust.
Any balance remaining after payment of such fees and expenses
shall be paid to the successor trustee.
(b) Final Accounting. The Trustee shall provide a final
accounting to the Administrator within 90 days of the date
Trust assets are transferred to the successor trustee.
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(c) Administrator Approval. Approval of the final accounting
shall automatically occur 90 days after such accounting has
been received by the Administrator, unless the Administrator
files a written objection with the Trustee within such time
period. Such approval shall be final as to all matters and
transactions stated or shown therein and binding upon the
Administrator.
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APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan as of the Effective Date
include this set of daily valued funds, except that the Company Stock Fund
shall not be offered under the Plan until January 1, 1998 or, if later, as
soon as administratively feasible after the Administrator has complied
with the filing requirements of the Securities Act of 1933:
CATEGORY FUNDS
INCOME Bond Index
Income Accumulation
BALANCED Asset Allocation
EQUITY Company Stock
S&P 500 Stock
COMBINATION LifePath Series
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the Income
Accumulation Fund.
III. Maximum Percentage Restrictions Applicable to Certain Investment Funds
As of the Effective Date, there are no maximum percentage restrictions
applicable to any Investment Funds.
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APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
I. Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants.
II. Special Custom Fund Fees: These fees are paid by the Employer with
regard to the Company Stock Fund.
III. Recordkeeping Fees: These are paid by the Employer on a quarterly basis.
IV. Loan Fees: These are paid by the Employer on a quarterly basis.
V. Investment Fund Election Changes: For each Investment Fund election
change by a Participant, in excess of four changes per year, a $10 fee
shall be assessed and billed/collected quarterly from the Participant's
Account.
VI. Periodic Installment Payment Fees: These are paid by the Employer on a
quarterly basis.
VII. Additional Fees Paid by Employer: All other Plan related fees and
expenses shall be paid by the Employer. To the extent that the
Administrator later elects that any such fees shall be borne by
Participants, estimates of the fees shall be determined and reconciled,
at least annually, and the fees shall be assessed monthly and
billed/collected from Accounts quarterly.
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APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant loans shall
be equal to the prime rate published in The Wall Street Journal at the time the
loan is processed, plus 1%. If multiple prime rates are published in The Wall
Street Journal, the prime rate selected shall be the rate closest to the last
prime rate used for this purpose.
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APPENDIX D - SPECIAL PROVISIONS
APPLICABLE TO RESIDENTS OF THE COMMONWEALTH OF PUERTO RICO
D-1 Purpose and Effect
The purpose of this Appendix D is to amend the Plan in order to comply
with the requirements of the Puerto Rico Income Tax Act of 1954 (the
"PRITA") sections 165(a) and 165(e) and for taxable years beginning
after June 30, 1995, to comply with the requirements of the Puerto Rico
Internal Revenue Code of 1994 (the "PR-Code") sections 1165(a) and
1165(e). The provisions of this Appendix D shall only apply to any
Participant who is a resident of the Commonwealth of Puerto Rico
("Appendix D Participant").
D-2 Type of Plan
The Plan is intended to constitute a profit sharing plan, as defined in
article 165-1 of the Puerto Rico Income Tax Regulations, which includes
a qualified cash or deferred arrangement, as described in PRITA section
165(e) and PR-Code section 1165(e).
D-3 Taxable Income
Compensation received from sources in Puerto Rico and which is
excludable from the gross income of an Appendix D Participant under Code
section 933 shall be considered Taxable Income for purposes under the
Plan.
D-4 Contribution Dollar Limit
An Appendix D Participant's 401(k) Contributions under the Plan may not
exceed in any event the limitations of PRITA section 165(e)(7) and
PR-Code section 1165(e)(7)(A).
D-5 Rollover Contributions
Contributions by an Appendix D Participant under Section 4.1 are limited
to amounts distributed from an employee retirement plan that also
qualifies under PRITA section 165(a) and PR-Code section 1165(a).
D-6 Plan to Plan Transfers
Transfers from other plans to the Plan under Section 4.2 for the benefit
of Appendix D Participants are limited to plans qualified under the
Code, PRITA and PR-Code.
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APPENDIX D - SPECIAL PROVISIONS
APPLICABLE TO RESIDENTS OF THE COMMONWEALTH OF PUERTO RICO
(continued)
D-7 Payment of Contributions
Contributions to the Plan by an Employer engaged in business in Puerto
Rico shall be paid to the Trustee not later than the due date for filing
its Puerto Rico Income Tax Return for the taxable year in which such
payroll period falls, including any extension thereof.
D-8 Withdrawals for Hardship
Withdrawals for hardship from an Appendix D Participant's 401(k) Account
shall comply with any regulations adopted under PRITA section 165(e) and
PR-Code section 1165(e).
D-9 Average Deferral Percentage Limits
In addition to the limitation contained in Section 12.2, the "Average
Deferral Percentage" (as defined in Section 12.1) for "Highly
Compensated Appendix D Participants", as defined herein, for each Plan
Year must meet either the Basic or Alternative Limitation of Section
12.2 when compared to the respective Average Deferral Percentage for
"Non-Highly Compensated Appendix D Participants", as defined herein. For
purposes of this Section D-9 and Section 12.2, (i) the term "Highly
Compensated Appendix D Participant" means any Appendix D Participant who
is eligible to participate in the Plan and is more highly compensated
than two-thirds of all other Appendix D Participants eligible to
participate in the Plan and employed by the same legal entity, (ii) any
other Appendix D Participant employed by each legal entity is a
"Non-Highly Compensated Appendix D Participant", and (iii) the HCE Group
and NHCE Group, with respect to each legal entity that has adopted the
Plan, shall be the respective group of Highly Compensated Appendix D
Participants and Non-Highly Compensated Appendix D Participants.
For purposes of this Section D-9, if more than one plan providing a cash
or deferred arrangement (within the meaning of PRITA section 165(e) and
PR-Code section 1165(e)) is maintained by a Related Company, the
"Average Deferral Percentage" as defined in Section 12.1, of any Highly
Compensated Appendix D Participant who participates in more than one
such plan or arrangement shall be determined as if all such arrangements
were a single plan or arrangement. In addition, if two or more plans
which are subject to the Deferral Percentage Limits of PRITA section
165(e) and PR-Code section 1165(e) are considered as one plan for
purposes of PRITA sections 165(a)(3) or 165(a)(4) and PR-Code Section
1165(a)(3) or 1165(a)(4), respectively, all such plans shall be
aggregated and treated as one plan for purposes of the Average Deferral
Percentage Tests of PRITA section 165(e) and PR-Code section 1165(e),
respectively.
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APPENDIX D - SPECIAL PROVISIONS
APPLICABLE TO RESIDENTS OF THE COMMONWEALTH OF PUERTO RICO
(continued)
D-10 Correction of Puerto Rico ADP Tests
To the extent permitted under applicable laws and regulations, Puerto
Rico Excess Contributions for a Plan Year, adjusted for investment gain
or loss thereto for the Plan Year, shall be refunded to the Participant
no later than the close of the following Plan Year. For purposes of this
Section D-10, the term "Puerto Rico Excess Contributions" means 401(k)
Contributions by Highly Compensated Appendix D Participants in excess of
the limitations of Section D-9 and Section 12.2.
D-11 Contributions Conditioned on Deductibility and Plan Qualification
Each contribution by an Employer under Section 5 is conditioned on the
initial qualification of the Plan under PRITA section 165(a) and PR-Code
section 1165(a) and on the deductibility of such contribution under
PRITA section 23(p) and PR-Code section 1023(n) for the taxable year for
which contributed.
D-12 Use of Terms
All terms and provisions of the Plan shall apply to Appendix D, except
where the terms and provisions of the Plan and Appendix D conflict, the
terms and provisions of Appendix D shall govern.
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