As filed with the Securities and Exchange Commission
on December ___, 1998
-------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------
Form S-8
Registration Statement
Under the
Securities Act of 1933
ENESCO GROUP, INC.
------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)
04-1864170
------------------------------------------------------------------------
(I.R.S. Employer Identification No.)
333 Western Avenue, Westfield, Massachusetts 01085
------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Stanhome Investment Savings Plan
(Enesco Group, Inc. Retirement Plan, effective January 1, 1999)
------------------------------------------------------------------------
(Full Title of Plan)
Peter R. Johnson, Secretary
Enesco Group, Inc.
333 Western Avenue
Westfield, Massachusetts 01085
------------------------------------------------------------------------
(Name and Address of Agent for Service)
(413) 562-3631
------------------------------------------------------------------------
(Telephone Number, Including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Title of Proposed Maximum Proposed Maximum Amount of
Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered(1) Per Share(2) Price(2) Fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.125 Par Value 1,000,000 $23.75 $23,750,000 $6,602.50
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) 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 and sold pursuant to the Stanhome Investment
Savings Plan. This registration statement also covers an additional and
indeterminate number of shares as may become issuable because of
adjustments for changes resulting from stock dividends, stock splits and
similar changes.
(2) Estimated solely for the purpose of calculating the registration fee
and, pursuant to Rules 457(h)(1) and 457(c) under the Securities Act of
1933 (the "Securities Act"), based on the average of the high and low sale
prices of the Common Stock on the New York Stock Exchange on December 11,
1998.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Enesco Group, Inc. (the
"Company") (File No. 0-1349) or the Stanhome Investment Savings Plan (the
Enesco Group, Inc. Retirement Plan, effective January 1, 1999) (the "Plan")
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), are incorporated by reference
herein:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(2) all other reports filed by the Company pursuant to Section
13(a) or 15(b) of the Exchange Act since December 31, 1997;
(3) the Plan's Annual Report on Form 11-K for the fiscal year
ended December 31, 1997; and
(4) the description of the Company's Common Stock contained in
its (a) Registration Statement on Form 10, dated May 28, 1965, as amended
on Form 8 Amendment No. 1, dated December 9, 1965, and Form 8 Amendment No.
2, dated September 5, 1986; (b) Registration Statements on Form 8-A, dated
September 8, 1986 and October 30, 1987, both as amended on Form 8 Amendment
No. 1, dated May 6, 1988; (c) Registration Statement on Form 8-A, dated
September 9, 1998; and (d) any other registration statement relating to the
Company's Common Stock under Section 12 of the Exchange Act, including any
amendments or reports filed for the purpose of updating the description of
such class of securities.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date
hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such reports and other 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 13 of Chapter 156B of the Massachusetts General Laws
permits corporations organized under the laws of the Commonwealth to
eliminate or limit personal liability of their directors to the corporation
or its stockholders for monetary damages resulting from any breach of
fiduciary duty as a director, except under certain circumstances. Article
6E of the Company's Restated Articles of Organization, as amended,
eliminates the personal liability of directors of the Company to the
Company or its stockholders for monetary damages to the full extent
permitted under Section 13 of Chapter 156B of the Massachusetts General
Laws. Section 67 of Chapter 156B of the Massachusetts General Laws permits
corporations organized under the laws of the Commonwealth to indemnify
directors and officers under certain circumstances. Article V of the
By-Laws of the Company provides for the indemnification of any director,
officer and specified key employees of the Company against all expenses, as
defined therein, actually or reasonably incurred by any of them in
connection with any claim asserted against him or her, or in connection
with any action, suit or proceeding, civil or Criminal, in which any of
them may be involved as a party, by reason of his or her having been such a
director, officer or specified key employee, provided he or she has acted
in good faith in the reasonable belief that his or her action was in the
best interest of the Company. The Company has director and officer
liability insurance covering certain expenditures which might arise in
connection with such indemnification.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4.1(1) Restated Articles of Organization, as amended
4.2(2) By-Laws, as amended
4.3(3) Renewed Rights Agreement dated as of July 22, 1998 between
Enesco Group, Inc. and ChaseMellon Shareholder Services, L.L.C.
23 Consent of Arthur Andersen LLP
24 Powers of Attorney (included on the signature page hereof)
99 Stanhome Investment Savings Plan (Enesco Group, Inc. Retirement
Plan, effective January 1, 1999)
- -------------------------
(1) Filed as Exhibit 3(a) to Form 10-Q for Enesco Group, Inc. for the
quarter ended March 31, 1998, incorporated by reference herein
(File No. 0-1349).
(2) Filed as Exhibit 3(b) to Form 10-Q for Enesco Group, Inc. for the
quarter ended March 31, 1998, incorporated by reference herein
(File No. 0-1349).
(3) Filed as Exhibit 4 to Form 8-K for Enesco Group, Inc. on July 23, 1998,
incorporated by reference herein (File No. 0-1349).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information set forth in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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.
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 this 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.
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 provisions described
under Item 6 above, 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.
SIGNATURES
The Registrant. 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 Itasca, State of
Illinois, on December 16, 1998.
ENESCO GROUP, INC.
By: /s/ Jeffrey A. Hutsell
---------------------------
Jeffrey A. Hutsell
President and 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 indicated as of December 16, 1998. Each person whose signature
appears below hereby authorizes Jeffrey A. Hutsell, Allan G. Keirstead and
Peter R. Johnson and each of them, with full power of substitution, to
execute in the name and on behalf of such person any amendment (including
any post-effective amendment) to this Registration Statement and to file
the same, with exhibits thereto, and other documents in connection
therewith, making such changes in this Registration Statement as the
person(s) so acting deems appropriate, and appoints each of such persons,
each with full power of substitution, attorney-in-fact to sign any
amendment (including any post-effective amendment) to this Registration
Statement and to file same, with exhibits thereto, and other documents in
connection therewith.
Signature Title
--------- -----
/s/ John Cauley Chairman of the Board and Director
- ------------------------------
John F. Cauley
/s/ Jeffrey A. Hutsell President, Chief Executive Officer and
- ------------------------------ Director (Principal Executive Officer)
Jeffrey A. Hutsell
/s/ Allan G. Keirstead Executive Vice President, Chief
- ------------------------------- Administrative and Financial Officer
Allan G. Keirstead and Director (Principal Financial
and Accounting Officer)
/s/ H. L. Tower Director
- -------------------------------
H. L. Tower
/s/ Charles W. Elliott Director
- -------------------------------
Charles W. Elliott
/s/ Eugene Freedman Founding Chairman and Director
- -------------------------------
Eugene Freedman
/s/ Judith R. Haberkorn Director
- -------------------------------
Judith R. Haberkorn
/s/ Thomas R. Horton Director
- -------------------------------
Thomas R. Horton
/s/ Homer G. Perkins Director
- -------------------------------
Homer G. Perkins
/s/ Anne-Lee Verville Director
- -------------------------------
Anne-Lee Verville
The Plan. Pursuant to the requirements of the Securities Act of
1933, Enesco Group, Inc., as Plan administrator, has duly caused this
Registration Statement to be signed in its behalf by the undersigned,
thereunto duly authorized, in the City of Itasca, State of Illinois, on
December 16, 1998.
STANHOME INVESTMENT SAVINGS PLAN
(Enesco Group, Inc. Retirement Plan,
effective January 1, 1999)
By: Enesco Group, Inc.
as Plan administrator
By: /s/ Jeffrey A. Hutsell
-------------------------------
Jeffrey A. Hutsell
President and Chief
Executive Officer
EXHIBIT INDEX
ENESCO GROUP, INC.
Registration Statement on Form S-8
for the Stanhome Investment Savings Plan
(Enesco Group, Inc. Retirement Plan, effective January 1, 1999)
Exhibit
Number Description
- -------- -----------
4.1(1) Restated Articles of Organization, as amended
4.2(2) By-Laws, as amended
4.3(3) Renewed Rights Agreement dated as of July 22, 1998 between
Enesco Group, Inc. and ChaseMellon Shareholder Services, L.L.C.
23 Consent of Arthur Andersen LLP
24 Powers of Attorney (included on the signature page hereof)
99 Stanhome Investment Savings Plan (Enesco Group, Inc.
Retirement Plan, effective January 1, 1999)
- --------------
(1) Filed as Exhibit 3(a) to Form 10-Q for Enesco Group, Inc. for the
quarter ended March 31, 1998, incorporated by reference herein
(File No. 0-1349).
(2) Filed as Exhibit 3(b) to Form 10-Q for Enesco Group, Inc. for the
quarter ended March 31, 1998, incorporated by reference herein
(File No. 0-1349).
(3) Filed as Exhibit 4 to Form 8-K for Enesco Group, Inc. on July 23, 1998,
incorporated by reference herein (File No. 0-1349).
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February
23, 1998 included in Enesco Group, Inc.'s Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Chicago, Illinois
December 16, 1998
EXHIBIT 99
ENESCO GROUP, INC. RETIREMENT PLAN
As Amended and Restated
Effective as of January 1, 1999
ENESCO GROUP, INC. RETIREMENT PLAN
TABLE OF CONTENTS
Page
Article 1 Title and Purpose............................................. 1
Article 2 Definitions ................................................. 3
Article 3 Participation................................................. 8
Article 4 Employer Contributions........................................ 9
Section 4.1 Salary Reduction Contributions................... 9
Section 4.2 Supplemental Salary Reduction Contributions...... 11
Section 4.3 Employer Matching Contributions.................. 12
Section 4.4 Profit Sharing Contributions..................... 13
Section 4.5 Money Purchase Contributions..................... 14
Article 5 Rollover Contributions........................................ 15
Section 5.1 Requirements for Rollover Contributions.......... 15
Section 5.2 Delivery of Rollover Contributions............... 15
Article 6 Limitations on Contributions.................................. 16
Section 6.1 Annual Limit on Salary Reduction Contributions... 16
Section 6.2 Maximum Annual Additions Under Section 415
of the Code...................................... 17
Section 6.3 Limits on Contributions for Highly Compensated
Employees....................................... 20
Section 6.4 Other Limitations on Employer Contributions...... 27
Article 7 Trust and Investment Funds.................................... 28
Section 7.1 Trust............................................ 28
Section 7.2 Investment Funds................................. 29
Article 8 Participant Accounts and Investment Elections................. 30
Section 8.1 Participant Accounts and Investment Elections .. 30
Section 8.2 Allocation of Fluctuation in Value of
Investment Fund Assets........................... 34
Section 8.3 Determination of Net Worth of Investment Funds... 34
Section 8.4 Allocations of Contributions Among Participants'
Accounts......................................... 35
Section 8.5 Correction of Error.............................. 38
Article 9 Withdrawals, Loans and Distributions.......................... 38
Section 9.1 Withdrawals Prior to Termination of Employment... 38
Section 9.2 Loans to Participants............................ 42
Section 9.3 Distribution upon Termination of Employment...... 46
Section 9.4 Payment of Small Account Balances................ 51
Section 9.5 Direct Rollover Option........................... 51
Section 9.6 Designation of Beneficiary....................... 52
Section 9.7 Special Rules Relating to Election of Annuity
Form of Benefit for Money Purchase Account....... 53
Section 9.8 Missing Persons.................................. 55
Section 9.9 Distributions to Minor and Disabled Distributees. 56
Article 10 Special Participation and Distribution Rules Relating to
Reemployment of Terminated Employees and Employment by
Related Entities.............................................. 56
Section 10.1 Change of Employment Status...................... 56
Section 10.2 Reemployment of an Eligible Employee Whose
Employment Terminated Prior to His Becoming
a Participant.................................... 57
Section 10.3 Reemployment of a Terminated Participant......... 57
Section 10.4 Employment by Related Entities................... 59
Section 10.5 Leased Employees................................. 59
Section 10.6 Reemployment of Veterans......................... 60
Article 11 Shareholder Rights With Respect to Company Stock.............. 62
Section 11.1 Voting Shares of Company Stock................... 62
Section 11.2 Tender Offers.................................... 63
Article 12 Administration................................................ 65
Section 12.1 The Committee.................................... 65
Section 12.2 Claims Procedure................................. 69
Section 12.3 Procedures for Domestic Relations Orders......... 70
Section 12.4 Information from Participants and Beneficiaries.. 71
Section 12.5 Notices to Participants, Etc..................... 71
Section 12.6 Notices to Committee............................. 72
Section 12.7 Records.......................................... 72
Section 12.8 Reports of Trustee and Accounting to
Participants..................................... 72
Article 13 Participation By Other Employers.............................. 73
Section 13.1 Adoption of Plan................................. 73
Section 13.2 Exclusion from Participation..................... 73
Section 13.3 Company as Agent for Employers................... 73
Section 13.4 Successor Employer............................... 74
Article 14 Miscellaneous ................................................ 74
Section 14.1 Expenses......................................... 74
Section 14.2 Non-Assignability................................ 75
Section 14.3 Employment Non-Contractual....................... 76
Section 14.4 Limitation of Rights............................. 76
Section 14.5 Merger or Consolidation with Another Plan........ 76
Section 14.6 Gender and Plurals............................... 77
Section 14.7 Applicable Law................................... 77
Section 14.8 Severability..................................... 77
Section 14.9 No Guarantee..................................... 77
Section 14.10 Plan Voluntary................................... 78
Article 15 Top-Heavy Plan Requirements................................... 78
Section 15.1 Top-Heavy Plan Determination..................... 78
Section 15.2 Definitions and Special Rules.................... 78
Section 15.3 Minimum Contribution for Top-Heavy Years......... 80
Section 15.4 Special Rules for Applying Statutory
Limitations on Benefits.......................... 81
Article 16 Amendment, Establishment of Separate Plan and Termination..... 82
Section 16.1 Amendment........................................ 82
Section 16.2 Establishment of Separate Plan................... 82
Section 16.3 Full Vesting upon Termination of Participation
or Partial Termination of the Plan............... 83
Section 16.4 Distribution upon Termination of the Plan........ 83
Section 16.5 Trust Fund to Be Applied Exclusively for
Participants and Their Beneficiaries............. 84
ARTICLE 1
TITLE AND PURPOSE
The title of the Plan shall be the "Enesco Group, Inc.
Retirement Plan." This document constitutes an amendment and restatement of
the Stanhome Investment Savings Plan as in effect on December 31, 1998.
This document also reflects the merger of the Enesco Profit Sharing Plan
into this Plan effective as of the close of business on December 31, 1998.
This amendment and restatement generally shall be effective January 1,
1999, except:
(i) the deletion of the penultimate sentence of subdivision
(13) of Article 2 of the Plan as in effect prior to the Effective
Date (now appearing at subdivision (9) of this Plan), and the
deletion of the last sentence of subdivision (17) of Article 2 of the
Enesco Profit Sharing Plan (as in effect prior to merger into this
Plan) (relating to the family aggregation rules of section 414(q)(6)
of the Code as in effect prior to enactment of the Small Business Job
Protection Act of 1996 ("SBJPA")), shall be effective January 1,
1997;
(ii) Clause (i)(I) of the first paragraph of Section 6.2 of the
Plan (relating to the manner in which the $30,000 limitation under
section 415(c) of the Code is adjusted for increases in the cost of
living, as modified by the Retirement Protection Act of 1994) shall
be effective January 1, 1995;
(iii) Section 6.3 of the Plan (relating to the
nondiscrimination rules of sections 401(k)(3), 401(m) and 414(q) of
the Code, as modified by SBJPA) shall be effective January 1, 1997;
(iv) Section 9.4 (relating to the cash-out of small benefits in
accordance with section 411(a)(11) of the Code, as modified by the
Taxpayer Relief Act of 1997), shall be effective January 1, 1998;
(v) Section 10.6 of the Plan of the Plan (relating to certain
requirements required by Uniformed Services Employment and
Reemployment Rights Act of 1994) shall be effective December 12,
1994;
(vi) any other provision of the Plan that specifies a different
effective date shall be effective such specified date.
The rights and benefits of Participants who terminate their employment with
any Employer (or any Affiliate thereof) on or after January 1, 1999, and
the rights and benefits of Beneficiaries of such Participants, shall be
determined solely by reference to the terms of this amendment and
restatement, as amended from time to time. The rights and benefits of
Participants who terminate their employment with any Employer (or any
Affiliate thereof) prior to January 1, 1999, and the rights and benefits of
Beneficiaries of such Participants, shall be determined solely by reference
to the terms of the prior Plan document or the Enesco Profit Sharing Plan,
as the case may be, as in effect on the date of such termination. The
provision contained in the Plan as in effect prior to January 1, 1999
suspending active participation herein by highly compensated employees
shall cease to be effective on January 1, 1999. This Plan is designated as
a "profit sharing plan" within the meaning of section 1.401-1(a)(2)(ii) of
the Regulations under which contributions are made without regard to
current or accumulated profits of any Employer, except that the portion of
the Plan that provides for a fixed employer money purchase contribution is
designated as a "pension plan" within the meaning of section
1.401-1(a)(2)(i) of the Regulations.
ARTICLE 2
DEFINITIONS
As used herein, the following words and phrases shall have the
following respective meanings when capitalized:
(1) Account. A Participant's total account under the Plan,
comprised of a Salary Reduction Account, Matching Account, Profit
Sharing Account, Money Purchase Account, Voluntary Account, Rollover
Account, QNEC Account and loan subaccount (established pursuant to
Section 9.2).
(2) Affiliate. (a) A corporation that is a member of the same
controlled group of corporations (within the meaning of section
414(b) of the Code) as an Employer, (b) a trade or business (whether
or not incorporated) under common control (within the meaning of
section 414(c) of the Code) with an Employer, (c) any organization
(whether or not incorporated) that is a member of an affiliated
service group (within the meaning of section 414(m) of the Code) that
includes an Employer, a corporation described in clause (a) of this
subdivision or a trade or business described in clause (b) of this
subdivision, or (d) any other entity that is required to be
aggregated with the Employer pursuant to Regulations promulgated
under section 414(o) of the Code.
(3) Beneficiary. The person or persons entitled under Section
9.6 to receive benefits in the event of the death of a Participant.
(4) Break in Service Year. Each Plan Year during which an
Employee does not complete at least 501 Hours of Employment. For
purposes of determining whether an Employee has incurred a Break in
Service Year, the Employee shall be credited with Hours of Employment
for any period during which he (a) is in Military Service, provided
that such Military Service does not extend beyond the date on which
he could have been discharged (with or without application therefor)
and after such discharge the Employee returns to the employ of an
Employer within the period prescribed by the laws governing
reemployment rights of military veterans, (b) is on an uncompensated
leave of absence duly granted by an Employer in accordance with the
Family and Medical Leave Act of 1994 or otherwise or (c) is absent
from work for any period because of (i) the Employee's pregnancy,
(ii) the birth of the Employee's child, (iii) the placement of a
child with the Employee in connection with the Employee's adoption of
such child or (iv) the need to care for any such child for a period
beginning immediately following such birth or placement. The number
of hours to be so credited shall be determined under uniform rules
adopted by the Committee in accordance with Regulations, except that
for purposes of clause (c) of this subdivision, the Employee shall be
credited with the number of Hours of Employment for which the
Employee would receive credit but for such absence (or, if unknown,
eight hours for each business day of such absence), (A) in the case
of an Employee who would have incurred a Break in Service Year during
the Plan Year in which a period of absence commenced but for the
application of such clause (c) only for such Plan Year, or (B) in the
case of any other Employee, only for the Plan Year immediately
following the Plan Year in which such period of absence commenced.
Notwithstanding the foregoing, clause (c) of the first sentence of
this subdivision shall not be applicable unless the Employee timely
furnishes to the Committee such information as it may reasonably
require to establish to the satisfaction of the Committee the reason
for such absence and its duration.
(5) Class 1 Participant. For any Plan Year, a Participant who
is not a Class 2 Participant for the Plan Year.
(6) Class 2 Participant. For any Plan Year, a Participant who:
(i) prior to the commencement of the Plan Year, is
designated by the Committee as a "Key Associate" under the
Enesco Group, Inc. Supplemental Retirement Plan for the Plan
Year, and
(ii) is a "highly compensated employee" under this Plan
for the Plan Year (as determined under Section 6.3(d)(8)
hereof).
(7) Code. The Internal Revenue Code of 1986, as amended.
(8) Committee. The Committee that is appointed by the Company
pursuant to Section 12.1 to administer the Plan.
(9) Company. Enesco Group, Inc., a Massachusetts corporation,
and any successor to such corporation that adopts the Plan pursuant
to Section 13.4.
(10) Company Stock. Common stock of the Company.
(11) Compensation. The total earnings paid in cash to an
Employee by an Employer while such person is an Eligible Employee and
properly reportable on Form W-2 for a Plan Year including bonuses and
overtime, increased by amounts that would have been so paid and
reported but for the Employee's election to have his compensation
reduced pursuant to a qualified cash or deferred arrangement
described in section 401(k) of the Code or a cafeteria plan as
defined in section 125 of the Code and by non-cash earnings described
in section 1.415-2(d)(2) of the Regulations, but excluding fringe
benefits (both cash and noncash), reimbursements and other expense
allowances, moving expenses, welfare benefits and any amounts
excluded from "compensation" by section 1.415-2(d)(3) of the
Regulations. The foregoing definition is intended to qualify as that
described in sections 1.415-2(d) and 1.414(s)-1(c)(3) of the
Regulations, and shall be interpreted in a manner consistent with
such intention. An Employee's Compensation in excess of (i) for the
Plan Year commencing January 1, 1999, $160,000 and (ii) for all
subsequent Plan Years, the amount prescribed by section 401(a)(17) of
the Code (as adjusted for increases in the cost of living in
accordance with section 401(a)(17)(B) of the Code), shall not be
taken into account for any purposes under the Plan.
(12) Effective Date. Except as provided elsewhere, the
effective date of this amendment and restatement of the Plan with
respect to the Company shall be January 1, 1999, and in the case of
any other Employer shall be the effective date as of which the Plan
is adopted by such Employer.
(13) Eligible Employee. Except as provided below, an Employee
(i) who is not employed at the Company's Westfield, Massachusetts
location, (ii) the terms of whose employment are not subject to a
collective bargaining agreement and (iii) who is not a nonresident
alien (within the meaning of section 7701(b)(1)(B) of the Code). An
individual who performs services for an Employer pursuant to an
agreement (written or oral) that classifies such individual as an
independent contractor or as an employee of another entity, or that
otherwise contains a waiver of participation in this Plan, shall not
be an Eligible Employee regardless of such individual's employment
status under common law or statute.
(14) Employee. An individual whose relationship with an
Employer is, under common law, that of an employee.
(15) Employer. The Company and any other entity that, with the
consent of the Company, elects to participate in the Plan in the
manner described in Section 13.1 and any successor entity that adopts
the Plan pursuant to Section 13.4. If any such entity withdraws or is
excluded from participation in the Plan pursuant to Section 13.2, or
terminates its participation in the Plan pursuant to Section 16.4,
such entity shall thereupon cease to be an Employer.
(16) Enesco Profit Sharing Plan. The Enesco Corporation Profit
Sharing Plan, as in effect immediately prior to merger into this
Plan.
(17) Entry Date. The first day of each calendar month.
(18) ERISA. The Employee Retirement Income Security Act of
1974, as amended
(19) Forfeiture Account. The account established pursuant to
Section 8.1 of the Plan to hold forfeitures pending the application
of such forfeiture to pay Plan expenses in accordance with Section
14.1, to restore forfeited balances of Participants' Accounts as
described in Sections 9.8 and 10.3 or the allocation of such
forfeitures to Participants' Accounts pursuant to Section 8.4(g).
(20) Hour of Employment. Each hour for which an Employee is
directly or indirectly compensated by, or entitled to receive
compensation from, an Employer, including hours for any period during
which the Employee receives compensation without rendering services
such as paid holidays, vacations, sick leave, disability leave,
layoff, jury duty, or leave of absence, but not exceeding 501 hours
for any one period of consecutive such days. In addition, an Employee
shall be credited with the number of Hours of Employment that the
Committee determines he would have completed during any period of
Military Service but for such Military Service, provided that such
Employee returns to active employment with his Employer within the
period prescribed by the laws governing the reemployment rights of
persons in Military Service. For purposes of determining the number
of hours of employment to be credited to an Employee, "compensation"
shall include any back pay, irrespective of mitigation of damages,
either awarded to the Employee or agreed to by an Employer. The
computation of Hours of Employment and the periods to which Hours of
Employment are to be credited shall be determined under uniform rules
adopted by the Committee in accordance with Department of Labor
Regulations section 2530.200b-2(b), (c) and (f).
(21) Matching Account. The account established pursuant to
Section 8.1 to which any employer matching contributions made on
behalf of a Participant pursuant to Section 4.3 and earnings (or
losses) thereon are credited.
(22) Military Service. (a) Service on active duty, in time of
national or local emergency, in the armed forces of the United States
or of any State thereof; (b) service in the armed forces of the
United States or of any State thereof under any compulsory service
law; or (c) service in the armed forces of the United States or any
of its allies in time of war in which the United States is engaged.
(23) Money Purchase Account. The account established pursuant
to Section 8.1 to which any money purchase contributions made on
behalf of a Participant pursuant to Section 4.5, if any, and any
earnings (or losses) thereon are credited.
(24) Participant. An Eligible Employee who has satisfied the
requirements set forth in Article 3. An individual shall cease to be
a Participant upon the complete distribution of the Participant's
Account under the Plan.
(25) Plan. The plan herein set forth, as from time to time
amended.
(26) Plan Year. The calendar year.
(27) Profit Sharing Account. The account established pursuant
to Section 8.1 to which any profit sharing contributions made on
behalf of a Participant pursuant to Section 4.4, if any, as well as
amounts transferred to this Plan from the Enesco Profit Sharing Plan
in connection with the merger thereof, if any, and any earnings (or
losses) thereon are credited.
(28) QNEC Account. The account established pursuant to Section
8.1 to which any employer qualified non-elective contributions made
on behalf of a Participant pursuant to Section 6.3(f), if any, and
any earnings (or losses) thereon are credited.
(29) Qualified Annuity. An annuity provided through the
purchase of a single premium annuity contract from an insurance
company selected by the Committee containing the following features:
(i) with respect to distribution of a Participant's
Account to the Participant if the Participant is not married on
his annuity starting date, a single life annuity providing
substantially equal monthly payments for the Participant's
lifetime;
(ii) with respect to distribution of a Participant's
Account to the Participant if the Participant is married on his
annuity starting date, a reduced annuity providing
substantially equal monthly payments to the Participant during
his lifetime and upon the Participant's death continuing to his
spouse, if such spouse survives him, for the remainder of such
spouse's lifetime in an amount equal to 50% of the amount
payable to the Participant; or
(iii) with respect to distribution of the Participant's
Money Purchase Account to his spouse upon the Participant's
death prior to his annuity starting date, a single life annuity
providing substantially equal monthly payments to the spouse
for the spouse's lifetime.
(30) Regulations. Written promulgations of the Department of
Labor construing Title I of ERISA or the Internal Revenue Service
construing the Code.
(31) Rollover Account. The account established pursuant to
Section 8.1 to which a Participant's rollover contributions pursuant
to Section 5.1, if any, and any earnings (or losses) thereon are
credited.
(32) Salary Reduction Account. The account established pursuant
to Section 8.1 to which a Participant's salary reduction
contributions pursuant to Section 4.1 and supplemental salary
reduction contributions pursuant to Section 4.2, if any, and any
earnings (or losses) thereon are credited.
(33) Trust. The Trust created by agreement between the Company
and the Trustee, as from time to time amended.
(34) Trust Fund. All money and property of every kind of the
Trust held by the Trustee pursuant to the terms of the agreement
governing the Trust.
(35) Trustee. The trustee provided for in Article 6, or any
successor trustee or, if there is more than one trustee acting at any
time, all of such trustees collectively.
(36) Valuation Date. Each day on which the New York Stock
Exchange is open for trading.
(37) Voluntary Account. The account established pursuant to
Section 8.1 to which a Participant's after-tax voluntary employee
contributions made under the Plan as in effect prior to the Effective
Date, if any, and any earnings (or losses) thereon are credited.
(38) Year of Vesting Service. Each Plan Year during which an
Employee is credited with at least 1,000 Hours of Employment.
ARTICLE 3
PARTICIPATION
Each individual who was a Participant in the Plan immediately
prior to the Effective Date shall continue to be a Participant in the Plan
as of the Effective Date. In addition, each individual who was a
Participant in the Enesco Profit Sharing Plan immediately prior to the
effectiveness of its merger with this Plan shall become a Participant in
the Plan as of the Effective Date. An Eligible Employee who is not
described in the preceding sentences shall become a Participant in the Plan
as of the first Entry Date next following the date on which the Eligible
Employee completes the eligibility service requirement described below.
An Eligible Employee shall satisfy the eligibility service
requirement on the date during the 12-month period beginning on his date of
employment on which he completes 1,000 Hours of Employment, or if he fails
to complete 1,000 Hours of Employment during such 12- month period, the
Eligible Employee shall satisfy the eligibility service requirement on the
date on which he completes 1,000 Hours of Employment during any Plan Year
that begins subsequent to his date of employment.
ARTICLE 4
EMPLOYER CONTRIBUTIONS
Section 4.1. Salary Reduction Contributions. (a) Initial
Election. If a Participant who is an Eligible Employee desires to have
salary reduction contributions made under the Plan on his behalf, the
Participant shall make an election specifying his chosen rate of such
contributions. Any such election shall be made by filing a written
application with the Participant's Employer, or by enrolling through such
other means as the Committee may prescribe. The Committee shall prescribe
rules regarding the date and time by which any such election must
be made in order to be applicable for a particular payroll period. Such
election shall authorize the Participant's Employer to reduce the
Participant's Compensation by a whole percentage not less than 1% and not
more than 6%. Such election also shall specify the Participant's investment
elections as described in Section 8.1(b).
(b) Changes in the Rate or Suspension of Salary Reduction
Contributions. A Participant's salary reduction contributions shall
continue in effect at the rate designated by a Participant pursuant to
subsection (a) until the Participant changes such designation or suspends
such contributions. A Participant may elect to change such designation or
suspend contributions as of any month (or at such other frequency
prescribed by the Committee) by giving written direction to the
Participant's Employer or by making an election through such other means as
may be prescribed by the Committee. The Committee shall prescribe rules
regarding the date and time by which any such election to change or suspend
must be made in order to be applicable for a particular payroll period. A
Participant who has ceased salary reduction contributions pursuant to this
subsection may resume salary reduction contributions by making an election
in the time and manner prescribed by the Committee.
With respect to a Participant who is an Eligible Employee and
who participated in the Plan immediately prior to the Effective Date and
whose elected rate of salary reduction contributions as of such date was in
excess of 6%, such Participant shall be deemed to have elected to change
his rate of salary reduction contributions hereunder to 6% effective for
the payroll period that contains the Effective Date.
(c) Employer Contributions. Subject to the limitations set
forth in Article 6, each Employer shall contribute on behalf of each
Participant who is an Employee of such Employer and who has elected to have
salary reduction contributions made hereunder an amount equal to the
percentage of such Participant's Compensation for each payroll period as
designated by the Participant in accordance with his election made pursuant
to subsection (a) or (b) of this Section. Salary reduction contributions
pursuant to this Section shall be delivered to the Trustee during the
month, or as soon as practicable after the end of the month, in which such
contribution would otherwise have been paid to the Participant as cash
compensation.
Section 4.2. Supplemental Salary Reduction Contributions. (a)
Election. During a period each December as prescribed by the Committee, a
Participant who is an Eligible Employee (whether or not he has elected to
make salary reduction contributions pursuant to Section 4.1) may elect to
have a supplemental salary reduction contribution made on his behalf by
making an election to have his Compensation for one or more payroll periods
(as prescribed by the Committee) reduced by a specified dollar amount or by
a specified percentage. A Participant may elect to have a supplemental
salary reduction contribution made on his behalf by his Employer by giving
written direction to his Employer or by making an election through such
other means as may be prescribed by the Committee. The Committee shall
prescribe rules limiting the amount or percentage that a Participant can
elect hereunder so that the Participant's total estimated salary reduction
contributions under this Section and Section 4.1 for a Plan Year shall not
exceed 6% of the Participant's Compensation for such Plan Year (excluding
any Compensation paid prior to the date on which he became a Participant).
(b) Employer Contributions. Subject to the limitations set
forth in Article 6, each Employer shall contribute on behalf of each
Participant who is an Employee of such Employer and who has elected to have
a supplemental salary reduction contribution made pursuant to this Section
an amount equal to the amount elected by the Participant hereunder. Any
supplemental salary reduction contribution made on a Participant's behalf
shall be delivered by the Committee to the Trustee as soon as reasonably
practicable after the date on which the contribution would have otherwise
been paid to the Participant as cash compensation.
Section 4.3. Employer Matching Contributions. Subject to the
limitations set forth in Article 6, each Employer shall contribute for each
Plan Year on behalf of each Participant who made salary reduction
contributions or supplemental salary reduction contributions for the Plan
Year an amount equal to 50 percent of the salary reduction contributions
and supplemental salary reduction contributions made on behalf of the
Participant pursuant to Sections 4.1 and 4.2 for such Plan Year.
Employer matching contributions shall be invested exclusively
in the Company Stock Fund. Such contributions may be made in the form of
shares of Company Stock, or in the form of cash which shall be applied by
the Trustee to purchase shares of Company Stock. If any such Employer
matching contributions are made by the delivery of certificates of shares
of Company Stock, such stock shall be valued as of the day preceding the
day on which such Employer matching contributions are delivered to the
Trustee at the closing sales price of the Company Stock as reflected on the
consolidated tape of the principal exchange on which such stock is traded,
or, if there are no sales on such date, the closing sales price on the most
recent trading day prior thereto.
Employer matching contributions for any Plan Year shall be
delivered to the Trustee concurrently or as soon as practicable after the
date on which the corresponding salary reduction contributions are
delivered to the Trustee.
Section 4.4. Profit Sharing Contributions. Subject to the
limitations set forth in Article 6, each Employer shall contribute for each
Plan Year such amount as the Company may determine. The amount contributed
by the Employers hereunder shall be based on a target percentage of
Compensation established by the Company that would be allocable to all
eligible Participants pursuant to Section 8.4(c) if the limitation on
deductibility of Employer contributions set forth in Section 6.4 did not
apply, less the amount (if any) that cannot be contributed to the Plan for
the Plan Year as a result of such limitation.
Employer profit sharing contributions for any Plan Year may be
delivered to the Trustee in one or more installments, and shall be
delivered to the Trustee prior to the due date, including extensions
thereof, of the Employer's federal income tax return for the fiscal year of
the Employer that ends with or within such Plan Year.
Section 4.5. Money Purchase Contributions. Subject to the
limitations set forth in Article 6, each Employer shall contribute for each
Plan Year on behalf of each Participant who (i) completes at least 1,000
Hours of Employment during such Plan Year and (ii) who is employed by an
Employer as an Eligible Employee on the last day of the Plan Year, a
contribution in an amount equal to 3% of the portion of such Participant's
Compensation for such year paid by such Employer.
Employer money purchase contributions for any Plan Year may be
delivered to the Trustee in one or more installments, and shall be
delivered to the Trustee prior to the due date, including extensions
thereof, of the Employer's federal income tax return for the fiscal year of
the Employer that ends with or within such Plan Year.
ARTICLE 5
ROLLOVER CONTRIBUTIONS
Section 5.1. Requirements for Rollover Contributions. If a
Participant receives an eligible rollover distribution (within the meaning
of section 402(c)(4) of the Code) from a qualified trust (within the
meaning of section 402(c)(8)(A) of the Code, but excluding a trust which
forms part of a plan maintained by an entity with respect to which the
Participant is a 5%- owner (within the meaning of section 416(i) of the
Code) at the time such distribution is made or at any time during the five
Plan Years preceding the Plan Year in which the distribution is made), then
such Participant may contribute to this Plan an amount which does not
exceed the amount of such eligible rollover distribution. If a Participant
receives a distribution or distributions from an individual retirement
account (within the meaning of section 408 of the Code) and the amount
received represents the entire amount in such account and no amount in such
account is attributable to any source other than an eligible rollover
distribution and any earnings on such a rollover contribution, then such
Participant may contribute to this Plan such distribution or distributions.
Section 5.2. Delivery of Rollover Contributions. Any rollover
contribution pursuant to this Section shall be delivered by the Participant
to the Committee and by the Committee to the Trustee on or before the 60th
day after the day on which the Participant receives the distribution, or on
or before such later date as may be prescribed by law. Any such
contribution must be accompanied by such information and certifications
that the Committee may require. Notwithstanding the foregoing, the
Committee shall not accept a rollover contribution if in its judgment
accepting such contribution would cause the plan to violate any provision
of the Code or Regulations.
ARTICLE 6
LIMITATIONS ON CONTRIBUTIONS
Section 6.1. Annual Limit on Salary Reduction Contributions.
(a) General Rule. Notwithstanding the provisions of Sections 4.1 and 4.2, a
Participant's salary reduction contributions made pursuant to Sections 4.1
and 4.2 for any calendar year shall not exceed (i) for the Plan Year
commencing January 1, 1999, $10,000 or (ii) for each subsequent Plan Year,
the dollar limit prescribed by section 402(g) of the Code (as adjusted for
increases in the cost-of-living in accordance with section 402(g)(5) of the
Code).
(b) Distribution of Excess Salary Reduction Contributions. With
respect to any Participant, if for any calendar year the salary reduction
contributions to this Plan or the aggregate of salary reduction
contributions to this Plan plus amounts contributed under other plans or
arrangements described in sections 401(k), 403(b), 408(k) or 408(p) of the
Code will exceed the limit imposed by subsection (a) of this Section for
the calendar year in which such contributions were made ("excess
deferrals"), such Participant shall, pursuant to such rules and at such
time following such calendar year as determined by the Committee, be
allowed to submit a written request that the excess deferrals, plus any
income and minus any loss allocable thereto, be distributed to the
Participant. The amount of any income or loss allocable to such excess
deferrals shall be determined pursuant to Regulations. Such amount of
excess deferrals, as adjusted for income or loss, shall be distributed to
the Participant no later than April 15 following the calendar year for
which such contributions were made. Notwithstanding the provisions of this
paragraph, any such excess deferrals shall be treated as "annual additions"
for purposes of Section 6.2 for the limitation year in which such
contributions were made.
Section 6.2. Maximum Annual Additions Under Section 415 of the
Code. Notwithstanding any other provision of the Plan, the amounts
allocated to the Accounts of each Participant for any limitation year shall
be limited so that--
(i) the aggregate annual additions for such Plan Year to the
Participant's Account in this Plan and in all other defined
contribution plans in which he is a participant shall not exceed the
lesser of
(I) $30,000 (as adjusted for increases in the
cost-of-living pursuant to section 415(d) of the Code) and
(II) 25% of the Participant's compensation for such
limitation year, and
(ii) for limitation years commencing prior to January 1, 2000,
the sum of (A) and (B) below shall not exceed 1.
(A) The annual additions to the Participant's Account in
the Plan and the aggregate annual additions to the eligible
Employee's accounts in all other defined contribution plans
maintained by his Employer (determined as of the close of the
Plan Year) divided by the sum of the lesser of--
(I) 125% of the maximum dollar amount which under
section 415(c)(1)(A) of the Code could have been
contributed on behalf of the Participant to a defined
contribution plan, and
(II) 35% of the Participant' annual compensation,
as determined separately for each of the Participant's
years of service.
(B) The aggregate projected annual benefit of the
Participant under all defined benefit plans maintained by his
Employer (determined as of the close of the limitation year),
divided by the lesser of--
(I) 125% of the maximum dollar limitation contained
in section 415(b)(1)(A) of the Code as adjusted for
increases in the cost of living as set forth in
Regulations, and
(II) 140% of the average of the Participant's
compensation for the three consecutive calendar years
during which his compensation was the highest.
If the annual additions to a Participant's Account exceed the limitations
set forth in clause (i) above for any limitation year (I) as a result of a
reasonable error in estimating a Participant's annual compensation, (II) as
a result of a reasonable error in determining the amount of elective
deferrals that may be made by a Participant under section 415 of the Code
or (III) under other limited facts and circumstances as determined by the
Commissioner of Internal Revenue, the Company shall cause to be reduced the
amounts to be allocated to such Participant's Account for such year to the
extent of the excess in the manner described below:
(a) first, by reducing the amount of the Participant's salary
reduction contributions and corresponding matching contributions
allocated to his Account, plus earnings on such contributions;
(b) second, by reducing the profit sharing contribution
allocated to his Account, plus earnings on such contribution; and
(c) third, by reducing the money purchase contribution
allocated to his Account, plus earnings on such contribution.
Any salary reduction contributions so reduced, plus earnings thereon, shall
be distributed to the Participant. Any matching contributions, profit
sharing contributions and money purchase contributions so reduced shall be
held in a segregated suspense account and shall be treated in the next
limitation year as Employer matching contributions, profit sharing
contributions or money purchase contributions, as the case may be, thereby
reducing amounts actually contributed by the Employers for such year. Upon
termination of the Plan, any balance in such suspense account shall be
returned to each Employer in the amount determined by the Committee, but
only if the allocation upon Plan termination of such amount to Participants
would cause all Participants to receive annual additions in excess of the
limitations of section 415 of the Code.
If the combined annual benefit payable to a Participant would
exceed the limitation of paragraph (ii)(B) above, then the benefit payable
under the defined benefit plan shall be reduced in order to meet such
limitation in the manner provided in such defined benefit plan.
The "annual additions" for a Plan Year to a Participant's
Account in this Plan and in any other defined contribution plan is the sum
for such limitation year of--
(i) the amount of Employer contributions (including salary
reduction contributions) allocated to such Participant's accounts,
(ii) the amount of forfeitures allocated to such Participant's
accounts,
(iii) the amount allocated to any individual medical benefit
account (as defined in section 415(l) of the Code) maintained on
behalf of the Participant, and
(iv) the amount of contributions by the Participant to any such
plan, but excluding any rollover contribution made thereto.
For purposes of this Section, the "limitation year" shall be
the Plan Year, the terms "compensation," "defined contribution plan,"
"defined benefit plan" and "year of service" shall have the meanings set
forth in section 415 of the Code and the Regulations promulgated
thereunder, and a Participant's Employer shall include entities that are
members of the same controlled group (within the meaning of section 414(b)
of the Code as modified by section 415(h) of the Code) or affiliated
service group (within the meaning of section 414(m) of the Code) as his
Employer or under common control (within the meaning of section 414(c) of
the Code as modified by section 415(h) of the Code) with his Employer or
such entities.
Section 6.3. Limits on Contributions for Highly Compensated
Employees. (a) Actual Deferral Percentage Test Imposed by Section 401(k)(3)
of the Code. Notwithstanding the provisions of Sections 4.1 and 4.2, if the
salary reduction contributions (including supplemental salary reduction
contributions) made pursuant to such Sections for a Plan Year fail to
satisfy both of the tests set forth in paragraphs (1) and (2) of this
subsection, the adjustments prescribed in paragraph (1) of subsection (e)
of this Section shall be made.
(1) The HCE average deferral percentage does not exceed the
product of the NHCE average deferral percentage multiplied by 1.25.
(2) The HCE average deferral percentage (i) does not exceed the
NHCE average deferral percentage by more than two percentage points
and (ii) does not exceed two times the NHCE average deferral
percentage.
(b) Actual Contribution Percentage Test Imposed by Section
401(m) of the Code. Notwithstanding the provisions of Section 4.3, if the
matching contributions pursuant to Section 4.3 fail to satisfy both of the
tests set forth in paragraphs (1) and (2) of this subsection, the
adjustments prescribed in paragraph (2) of subsection (e) of this Section
shall be made.
(1) The HCE average contribution percentage does not exceed the
product of the NHCE average contribution percentage multiplied by
1.25.
(2) The HCE average contribution percentage (i) does not exceed
the NHCE average contribution percentage by more than two percentage
points and (ii) does not exceed two times the NHCE average
contribution percentage.
(c) Aggregate Limit on Contributions. Notwithstanding anything
herein to the contrary, if the sum of the HCE average deferral percentage
(as determined under paragraph (1) of subsection (e) of this Section after
making the adjustments required by such paragraph for the Plan Year) and
the HCE average contribution percentage (as determined under paragraph (2)
of subsection (e) of this Section after making the adjustments required by
such paragraph for the Plan Year) exceeds, or in the judgment of the
Company is likely to exceed, the aggregate limit for such Plan Year, the
adjustments prescribed in paragraph (3) of subsection (e) of this Section
shall be made.
(d) Definitions and Special Rules. For purposes of this
Section, the following definitions and special rules shall apply:
(1) The "actual deferral percentage test" refers collectively
to the tests set forth in paragraphs (1) and (2) of subsection (a) of
this Section relating to salary reduction contributions (including
supplemental salary reduction contributions). The actual deferral
percentage test shall be satisfied if either of such tests are
satisfied.
(2) The "HCE average deferral percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who are
eligible to make salary reduction contributions for the current Plan
Year and who are highly compensated employees for the current Plan
Year. Such percentage shall be equal to the average of the ratios,
calculated separately for each such Eligible Employee to the nearest
one-hundredth of one percent, of the salary reduction contributions
(including supplemental salary reduction contributions) for the
benefit of such Eligible Employee for the current Plan Year (if any)
to the total compensation for the current Plan Year paid to such
Eligible Employee.
(3) The "NHCE average deferral percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who are
eligible to make salary reduction contributions for the prior Plan
Year and who were not highly compensated employees for the prior Plan
Year. Such percentage shall be equal to the average of the ratios,
calculated separately for each such Eligible Employee to the nearest
one-hundredth of one percent, of the salary reduction contributions
(including supplemental salary reduction contributions) for the
benefit of such Eligible Employee for the prior Plan Year (if any) to
the total compensation for the prior Plan Year paid to such Eligible
Employee.
(4) The "actual contribution percentage test" refers
collectively to the tests set forth in paragraphs (1) and (2) of
subsection (b) of this Section relating to matching contributions.
The actual contribution percentage test shall be satisfied if either
of such tests are satisfied.
(5) The "HCE average contribution percentage" for a Plan Year
is a percentage determined for the group of Eligible Employees who
are eligible to share in an allocation of matching contributions for
the current Plan Year, and who are highly compensated employees for
the current Plan Year. Such percentage shall be equal to the average
of the ratios, calculated separately for each such Employee to the
nearest one-hundredth of one percent, of the sum of the matching
contributions made for the benefit of such Eligible Employee for the
current Plan Year and, in the Company's sole discretion, to the
extent permitted by Regulations, some or all of the salary reduction
contributions (including supplemental salary reduction contributions)
made during the current Plan Year for the benefit of such Eligible
Employee (if any), to the total compensation for the current Plan
Year paid to such Eligible Employee.
(6) The "NHCE average contribution percentage" for a Plan Year
is a percentage determined for the group of Eligible Employees who
are eligible to share in an allocation of matching contributions for
the prior Plan Year, and who were not highly compensated employees
for the prior Plan Year. Such percentage shall be equal to the
average of the ratios, calculated separately for each such Eligible
Employee to the nearest one-hundredth of one percent, of the matching
contributions made for the benefit of such Eligible Employee for the
prior Plan Year and, in the Company's sole discretion, to the extent
permitted by Regulations, some or all of the salary reduction
contributions (including supplemental salary reduction contributions)
made during the prior Plan Year for the benefit of such Eligible
Employee (if any), to the total compensation for the prior Plan Year
paid to such Eligible Employee.
(7) The "aggregate limit" shall equal the greater of (A) the
sum of (i) 1.25 times the greater of the NHCE average deferral
percentage or the NHCE average contribution percentage plus (ii) the
lesser of (a) the sum of two percentage points and the lesser of the
NHCE average deferral percentage or the NHCE average contribution
percentage and (b) 200% of the lesser of the NHCE average deferral
percentage or the NHCE average contribution percentage; or (B) the
sum of (i) 1.25 times the lesser of the NHCE average deferral
percentage or the NHCE average contribution percentage plus (ii) two
percentage points plus the greater of (a) the NHCE average deferral
percentage or (b) the NHCE average contribution percentage, but not
greater than 200% of the greater of (a) and (b) above.
(8) A "highly compensated employee" is, for a Plan Year, any
Employee who is (a) a 5%-owner (as determined under section 416(i) of
the Code) at any time during the current Plan Year or the prior Plan
Year or (b) was paid compensation in excess of $80,000 (as adjusted
for increases in the cost of living in accordance with section
414(q)(1)(B)(ii) of the Code) from an Employer for the prior Plan
Year. The Employees taken into account under clause (b) above shall
be limited to those Employees who were members of the "top-paid
group" (as defined in section 414(q)(3) of the Code) for the prior
Plan Year.
(9) The term "compensation" shall have the meaning set forth in
section 414(s) of the Code or, in the discretion of the Company, any
other meaning in accordance with the Code for these purposes.
(10) If the Plan and one or more other plans of the Employer to
which elective deferrals or qualified nonelective contributions (as
such term is defined in section 401(m)(4)(C) of the Code) are made
are treated as one plan for purposes of section 410(b) of the Code,
such plans shall be treated as one plan for purposes of this Section.
(e) Adjustments to Comply with Limits. This subsection sets
forth the adjustments and correction methods which shall be used to comply
with the actual deferral percentage test under section 401(k)(3) of the
Code, and the actual contribution percentage test under section 401(m) of
the Code.
(1) Adjustments to Comply with Actual Deferral Percentage
Test. (A) Adjustment to Deferred Compensation Contributions of Highly
Compensated Employees. The Company shall cause to be made such
periodic computations as it shall deem necessary or appropriate to
determine whether the actual deferral percentage test is satisfied
during a Plan Year, and, if it appears to the Company that such test
will not be satisfied, the Company shall take such steps as it deems
necessary or appropriate to adjust the salary reduction contributions
made pursuant to Sections 4.1 and 4.2 for all or a portion of such
Plan Year on behalf of each Participant who is a highly compensated
employee to the extent necessary in order for the actual deferral
percentage test to be satisfied. If, as of the end of the Plan Year,
the Company determines that, notwithstanding any adjustments made
pursuant to the preceding sentence, the actual deferral percentage
test was not satisfied, the Company shall calculate a total amount by
which salary reduction contributions must be reduced in order to
satisfy either such test, in the manner prescribed by section
401(k)(8)(B) of the Code (the "excess contributions amount"). The
amount to be returned to each Participant who is a highly compensated
employee shall be determined by first reducing the salary reduction
contributions of each Participant whose actual dollar amount of
salary reduction contributions for such Plan Year is highest until
such reduced dollar amount equals the next highest actual dollar
amount of salary reduction contributions made for such Plan Year on
behalf of any highly compensated employee, or until the total
reduction equals the excess contributions amount. If further
reductions are necessary, then the salary reduction contributions on
behalf of each Participant who is a highly compensated employee and
whose actual dollar amount of salary reduction contributions made for
such Plan Year is the highest (determined after the reduction
described in the preceding sentence) shall be reduced in accordance
with the preceding sentence. Such reductions shall continue to be
made to the extent necessary so that the total reduction equals the
excess contributions amount. For purpose of this paragraph, the term
"salary reduction contributions" shall include supplemental salary
reduction contributions.
(B) Corrective Distributions and Forfeitures. No later
than 2 1/2 months after the end of the Plan Year (or if correction by
such date is administratively impracticable, no later than the last
day of the subsequent Plan Year), the Company shall cause to be
distributed to each affected Participant (i) the amount of salary
reduction contributions to be returned to such Participant pursuant
to subparagraph (A) above, plus any income and minus any loss
allocable thereto, and (ii) any corresponding matching contributions
in which the Participant would be vested if the Participant
terminated employment as of the last day of such Plan Year (or upon
the date of the Participant's actual termination of employment, if
earlier), plus any income and minus any loss allocable thereto. Any
corresponding matching contributions in which the Participant would
not have been vested shall be forfeited and credited to the
Forfeiture Account. The amount of any income or loss allocable to any
such reductions to be so distributed or forfeited, including income
or loss attributable to the gap period (as defined in Regulations),
shall be determined pursuant to applicable Regulations. The amount of
salary reduction contributions to be distributed to a Participant
hereunder shall be reduced by any excess deferrals previously
distributed to such Participant pursuant to Section 6.1 in order to
comply with the limitations of section 402(g) of the Code. The
unadjusted amount of any such reductions so distributed shall be
treated as "annual additions" for purposes of Section 6.2 relating to
the limitations under section 415 of the Code.
(2) Adjustments to Comply with Actual Contribution
Percentage Test. (A) Adjustment to Matching Contributions of Highly
Compensated Employees. If, as of the end of the Plan Year, after
taking into account the distribution and forfeiture of matching
contributions made on behalf of highly compensated employees pursuant
to subparagraph (1)(B) above, the Company determines that the actual
contribution percentage test was not satisfied, the Company shall
calculate a total amount by which matching contributions made
pursuant to Section 4.3 must be reduced in order to satisfy such
test, in the manner prescribed by section 401(m)(6)(B) of the Code
(the "excess aggregate contributions amount"). The amount to be
reduced with respect to each Participant who is a highly compensated
employee shall be determined by first reducing the matching
contributions for each Participant whose actual dollar amount of
matching contributions for such Plan Year is highest until the such
reduced dollar amount equals the next highest actual dollar amount of
matching contributions made for such Plan Year on behalf of any
highly compensated employee, or until the total reduction equals the
excess aggregate contributions amount. If further reductions are
necessary, then such matching contributions on behalf of each
Participant who is a highly compensated employee and whose actual
dollar amount of matching contributions made for such Plan Year is
the highest (determined after the reduction described in the
preceding sentence) shall be reduced in accordance with the preceding
sentence. Such reductions shall continue to be made to the extent
necessary so that the total reduction equals the excess aggregate
contributions amount.
(B) Corrective Distributions and Forfeitures. No later
than 2 1/2 months after the end of the Plan Year (or if correction by
such date is administratively impracticable, no later than the last
day of the subsequent Plan Year), the Company shall cause to be
distributed to the Participant such matching contributions in which
the Participant would have been vested had the Participant terminated
employment as of the last day of such Plan Year (or on the date of
the Participant's actual termination of employment, if earlier), plus
any income and minus any loss allocable thereto. Any such matching
contributions in which the Participant would not have been vested
shall be forfeited and credited to the Forfeiture Account. The amount
of any income or loss allocable to any such reductions to be so
distributed or forfeited, including income or loss attributable to
the gap period (as defined in Regulations), shall be determined
pursuant to applicable Regulations. The unadjusted amount of any such
reductions so distributed or forfeited shall be treated as "annual
additions" for purposes of Section 6.2 relating to the limitations
under section 415 of the Code.
(3) Adjustments to Comply with the Aggregate Limit. If,
after making the adjustments required by paragraphs (1) and (2) of
this subsection for a Plan Year, the Company determines that the sum
of the HCE average deferral percentage and the HCE average
contribution percentage exceeds the aggregate limit for such Plan
Year, the Company shall within 2 1/2 months after the close of such
Plan Year (or if correction by such date is administratively
impracticable, no later than the last day of the subsequent Plan
Year) adjust the salary reduction contributions made pursuant to
Sections 4.1 and 4.2 for such Plan Year on behalf of each Participant
who is a highly compensated employee to the extent necessary to
eliminate such excess. For purposes of the preceding sentence, the
HCE average deferral percentage and HCE average contribution
percentage shall be equal to the highest deferral percentage and
contribution percentage permissible in determining the excess
contributions amount under section 401(k)(8)(B) of the Code pursuant
to paragraph (1) above, and the excess aggregate contributions amount
under section 401(m)(6)(B) of the Code pursuant to paragraph (2)
above, respectively. Such adjustment shall be effected in the same
manner described in paragraph (1) of this subsection relating to
reductions made to satisfy the actual deferral percentage test. In
the event that further reductions are necessary, the Company shall
adjust the matching contributions made pursuant to Section 4.3 for
such Plan Year on behalf of each Participant who is a highly
compensated employee to the extent necessary to eliminate such
excess. Such adjustment shall be effected in the same manner
described in paragraph (2) of this subsection relating to reductions
made to satisfy the actual contribution percentage test.
(f) Qualified Nonelective Contributions. Each Plan Year, the
Company may require some or all of the Employers to make, to the extent
permitted by Regulations, additional contributions which shall be treated
as "qualified nonelective contributions" within the meaning of Section
401(m)(4)(C) of the Code, for purposes of applying the actual deferral
percentage test or the actual contribution percentage test or both. Such
contributions shall be allocated to the class or group of Participants
specified by the Company in the manner prescribed by the Company, in
accordance with Regulations. Any such Employer contributions designated as
qualified nonelective contributions and earnings related thereto shall be
accounted for separately by the Trustee and shall be distributable pursuant
to the provisions of the Plan concerning distributions of matching
contributions (but no earlier than the Participant's separation from
service or death).
Section 6.4. Other Limitations on Employer Contributions. The
contributions of an Employer for any Plan Year shall not exceed the maximum
amount for which a deduction is allowable to such Employer for federal
income tax purposes for the fiscal year of such Employer that ends with or
within such Plan Year.
Any contribution made by an Employer by reason of a good faith
mistake of fact, or the portion of any contribution made by an Employer
that exceeds the maximum amount for which a deduction is allowable to such
Employer for federal income tax purposes by reason of a good faith mistake
in determining the maximum allowable deduction, shall upon the request of
such Employer be returned by the Trustee to the Employer. An Employer's
request and the return of any such contribution must be made within one
year after such contribution was mistakenly made or after the deduction of
such excess portion of such contribution was disallowed, as the case may
be. The amount to be returned to an Employer pursuant to this paragraph
shall be the excess of (i) the amount contributed over (ii) the amount that
would have been contributed had there not been a mistake of fact or a
mistake in determining the maximum allowable deduction. Earnings
attributable to the mistaken contribution shall not be returned to the
Employer, but losses attributable thereto shall reduce the amount to be so
returned. If the return to the Employer of the amount attributable to the
mistaken contribution would cause the balance of any Participant's account
as of the date such amount is to be returned (determined as if such date
coincided with the close of a Plan Year) to be reduced to less than what
would have been the balance of such account as of such date had the
mistaken amount not been contributed, the amount to be returned to the
Employer shall be limited so as to avoid such reduction.
ARTICLE 7
TRUST AND INVESTMENT FUNDS
Section 7.1. Trust. A Trust shall be created by the execution
of a trust agreement between the Company (acting on behalf of the
Employers) and the Trustee. All contributions under the Plan shall be paid
to the Trustee. The Trustee shall hold all monies and other property
received by it and invest and reinvest the same, together with the income
therefrom, on behalf of the Participants collectively in accordance with
the provisions of the trust agreement. The Trustee shall make distributions
from the Trust Fund at such time or times to such person or persons and in
such amounts as the Committee directs in accordance with the Plan.
Section 7.2. Investment Funds. (a) In General. The Committee
shall cause the Trustee to establish and maintain two or more separate
investment funds exclusively for the collective investment and reinvestment
of amounts credited to Participants' Accounts, as directed by the
Participants. Additional investment funds may be established as determined
by the Committee from time to time, in its sole discretion.
(b) Company Stock Fund. In addition to the investment funds
established pursuant to subsection (a), the Committee shall cause the
Trustee to establish, operate and maintain a Company Stock Fund. The assets
of the Company Stock Fund shall be invested primarily in shares of Company
Stock and short-term liquid investments in a commingled money market fund
maintained by the Trustee, to the extent determined by the Trustee to be
necessary to satisfy such fund's cash needs. Each Participant's
proportional interest in the Company Stock Fund shall be represented by
units of participation, each such unit representing a proportionate
interest in all the assets of such fund.
ARTICLE 8
PARTICIPANT ACCOUNTS
AND INVESTMENT ELECTIONS
Section 8.1. Participant Accounts and Investment Elections. (a)
Separate Accounts. The Company shall establish and maintain, or cause the
Trustee or such other agent as the Company may select to establish and
maintain, a separate Account for each Participant. Such Accounts shall be
solely for accounting purposes, and no segregation of assets of the Trust
among the separate Accounts shall be required. Each Account shall consist
of the following:
(i) if salary reduction contributions or supplemental salary
reduction contributions are being made or have been made for a
Participant, a Salary Reduction Account,
(ii) if matching contributions are made or have been made for a
Participant, a Matching Account,
(iii) if profit sharing contributions are made or have been
made for a Participant, or if any portion of the Participant's
account balance was transferred to this Plan from the Enesco Profit
Sharing Plan in connection with the merger thereof, a Profit Sharing
Account,
(iv) if money purchase contributions are made or have been made
for a Participant, a Money Purchase Account,
(v) if a Participant makes a rollover contribution to the Plan,
a Rollover Account,
(vi) if a Participant previously made after-tax voluntary
employee contributions to the Plan, a Voluntary Account, and
(vii) if qualified non-elective contributions are made or have
been made for a Participant as described in Section 6.3(f), a QNEC
Account.
The Company shall establish and maintain, or cause the Trustee
or such other agent as the Company may select to establish and maintain,
investment subaccounts with respect to each such investment fund to which
amounts contributed under the Plan shall be credited according to each
Participant's investment elections pursuant to subsections (b) and (c) of
this Section. All such subaccounts shall be for accounting purposes only,
and there shall be no segregation of assets within the investment funds
among the separate subaccounts.
In addition to Participants' Accounts, the Company shall
establish and maintain, or cause the Trustee or such other agent as the
Company may select to establish and maintain, a Forfeiture Account. The
Forfeiture Account shall be subdivided into a matching forfeiture
subaccount, a profit sharing forfeiture subaccount and a money purchase
forfeiture subaccount to which shall be credited amounts forfeited from
Participants' Matching Accounts, Profit Sharing Accounts and Money Purchase
Accounts, respectively, as described in Section 9.3(a).
(b) Investment Election. Each Participant shall make an
investment election that shall apply to the investment of contributions to
be made on his behalf or by him pursuant to Article 4 or 5 and any earnings
on such contributions. Such election shall specify that such contributions
be invested either (i) wholly in one of the funds maintained or employed by
the Trustee pursuant to subsection (a) or (ii) divided among such funds in
multiples established by the Committee from time to time. Separate
investment elections with respect to different types of contributions may
not be made. During any period in which no direction as to the investment
of a Participant's account is on file with the Committee, contributions made
by him or on his behalf to the Plan shall be invested in such manner as the
Committee shall determine.
To the extent necessary to comply with federal securities laws
and Company policies regarding ownership of Company Stock as in effect from
time to time, the Committee shall prescribe rules limiting Participants'
rights to direct investment of their Plan Accounts in the Company Stock
Fund.
(c) Change of Investment Election. A Participant may elect to
change his investment election at such intervals as may be determined by
the Committee, but not less frequently than once during each calendar
quarter. Such change shall be limited to the investment choices then
maintained or employed by the Trustee pursuant to Section 8.1(a). A change
in investment election made pursuant to this Section shall apply to
contributions and earnings thereon made on behalf of or by the Participant
under Article 4 or Article 5 prior to such change, to future contributions
made pursuant to such Articles, or both. Any such change shall specify that
such contributions be invested either (i) wholly in one of the funds
maintained pursuant to subsection (a) or (ii) divided among such funds in
multiples established by the Committee from time to time. A Participant's
change of investment election must be made by providing a written direction
to the Committee or through such other means prescribed by the Committee.
The Committee shall prescribe rules regarding the time by which such an
election must be made in order to be effective for a particular Valuation
Date.
(d) Matching Account. Notwithstanding any provision of this
Section to the contrary, all or substantially all of a Participant's
Matching Account shall be invested in the Company Stock Fund. A Participant
shall not have the right to direct that any portion of his Matching Account
be invested in any fund other than the Company Stock Fund.
Section 8.2. Allocation of Fluctuation in Value of Investment
Fund Assets. In the event that contributions, income and losses are not
otherwise specifically allocated to Participant accounts by the Trustee or
at its direction as soon as practicable after each Valuation Date, the net
worth of each investment fund as of such Valuation Date shall be
determined. If the net worth of such investment fund so determined is more
or less than the total of (a) all balances credited as of such Valuation
Date to the subaccounts of Participants invested in the investment fund as
of such Valuation Date who are Participants as of such Valuation Date, and
(b) the balances of the subaccounts of persons invested in the investment
fund as of such Valuation Date whose service has terminated prior to the
Valuation Date for which the allocation is being made, the amount of any
excess or deficiency shall be prorated and credited or charged to such
subaccounts proportionally to the balances of such subaccounts as of the
preceding Valuation Date after making all allocations for such preceding
Valuation Date prescribed by this Article and increasing each subaccount by
a percentage of the contributions made after such preceding Valuation Date
and allocable to such subaccount pursuant to this Section and decreasing
each such subaccount by a percentage of any distributions from such
subaccount during such period (but not less than zero), all of such
increases and decreases to be made in such manner as the Committee
determines in its discretion to be necessary to provide an equitable
allocation of any change in the value of the adjusted net worth of the
Trust Fund with respect to the period subsequent to such preceding
Valuation Date for which such contributions and distributions were credited
or debited to each such subaccount. Such allocations shall be made as of
each Valuation Date.
Section 8.3. Determination of Net Worth of Investment Funds.
(a) In General. The net worth of an investment fund as of any Valuation
Date shall be the fair market value of all assets (including any uninvested
cash) held by such investment fund, as determined by the Trustee on the
basis of such evidence and information as it may deem pertinent and
reliable, reduced by any liabilities other than Participants' Accounts.
(b) Company Stock Fund. As soon as practicable after the close
of business on each Valuation Date, the Company shall cause the Trustee to
determine the value of the Company Stock Fund on such Valuation Date in the
manner prescribed in subsection (a) of this Section, and the value so
determined shall be divided by the total number of participating units
allocated to the investment fund subaccounts of each Participant. The
resulting quotient shall be the value of a participating unit in the
Company Stock Fund as of such Valuation Date and shall constitute the
"price" of a participating unit as of such Valuation Date. Participating
units shall be credited, at the price so determined, to the investment fund
subaccounts of Participants with respect to moneys contributed or
transferred to such subaccounts on their behalf on such Valuation Date.
The value of all participating units credited to Participants' investment
fund subaccounts shall be redetermined in a similar manner as of each
Valuation Date.
Section 8.4. Allocations of Contributions Among Participants'
Accounts. (a) Allocation of Salary Reduction Contributions. Salary
reduction contributions and supplemental salary reduction contributions
made pursuant to Sections 4.1 and 4.2 shall be allocated to the Salary
Reduction Account of each Participant for whom such contributions are made
as soon as practicable after the Valuation Date coinciding with or next
following the date on which such contribution is delivered to the Trustee
and shall be credited to such Participant's account as of such Valuation
Date.
(b) Allocation of Matching Contributions. Employer matching
contributions made pursuant to Section 4.3 shall be allocated to the
Matching Account of each Participant for whom such contributions are made
as soon as practicable after the Valuation Date on which such contribution
is delivered to the Trustee and shall be credited to such Participant's
account as of such Valuation Date.
(c) Allocation of Profit Sharing Contributions. Employer profit
sharing contributions made pursuant to Section 4.4 for a Plan Year shall be
allocated first to the Profit Sharing Account of each Class 1 Participant
who (i) completed at least 1,000 Hours of Employment during such Plan Year
and (ii) is employed as an Eligible Employee on the last day of the Plan
Year, in proportion to the Participant's Compensation paid by such Employer
for the Plan Year compared to the Compensation of all such Class 1
Participants employed by such Employer, until each Class 1 Participant is
allocated an amount equal to the target percentage of such Participant's
Compensation (as determined pursuant to Section 4.4). Any remaining amounts
shall be allocated to the Profit Sharing Account of each Class 2
Participant who (i) competed at least 1,000 Hours of Employment during such
Plan Year and (ii) is employed as an Eligible Employee on the last day of
the Plan Year, in proportion to the Participant's Compensation paid by such
Employer for the Plan Year compared to the Compensation of all such Class 2
Participants employed by such Employer. In no event shall the amount
allocated to the Profit Sharing Account of any Class 2 Participant,
expressed as a percentage of such Participant's Compensation for the Plan
Year, exceed the amount allocated to the Profit Sharing Account of any
Class 1 Participant, also expressed as a percentage of such Participant's
Compensation for the Plan Year. Such allocations shall be made as soon as
practicable after the close of the Plan Year for which the contribution is
made and shall be credited to Participants' Profit Sharing Accounts as of
the Valuation Date coinciding with or next following the date on which such
contribution is delivered to the Trustee.
(d) Allocation of Money Purchase Contributions. Employer money
purchase contributions made pursuant to Section 4.5 for a Plan Year shall
be allocated to the Money Purchase Account of each Participant who (i)
completed at least 1,000 Hours of Employment during such Plan Year and (ii)
is employed as an Eligible Employee on the last day of the Plan Year. Such
allocation shall be made as soon as practicable after the close of the Plan
Year for which the contribution is made and shall be credited to
Participants' Money Purchase Accounts as of the Valuation Date coinciding
with or next following the date on which such contribution is delivered to
the Trustee.
(e) Allocation of Rollover Contributions. Rollover
contributions made pursuant to Article 5 shall be allocated to the Rollover
Account of each Participant who makes such a contribution as soon as
practicable after the Valuation Date coinciding with or next following the
date on which such contribution is delivered to the Trustee and shall be
credited to such Participant's account as of such Valuation Date.
(f) QNEC Account. Qualified nonelective contributions made
pursuant to Section 6.3(f) shall be allocated to Participants' QNEC
Accounts in the manner prescribed by the Company, in accordance with
Regulations.
(g) Allocation of Forfeitures. With respect to amounts
allocated to the money purchase forfeiture subaccount of the Forfeiture
Account in a Plan Year, the balance of such subaccount shall be applied to
reduce the Employers' money purchase contribution in the subsequent Plan
Year. With respect to amounts allocated to the match subaccount and profit
sharing subaccount of the Forfeiture Account in a Plan Year, the excess, if
any, of the balance of such subaccounts less any portion of such
subaccounts that is applied to restore forfeitures as provided in Sections
9.8 and 10.3 or is applied to pay Plan expenses in accordance with Section
14.1, shall be allocated to the Profit Sharing Account of each Participant
who (i) completed at least 1,000 Hours of Employment during such Plan Year
and (ii) is employed on the last day of the Plan Year in proportion to the
Compensation paid by such Employer to each such Participant during such
Plan Year bears to the total Compensation paid by such Employer to all such
Participants during such Plan Year.
Section 8.5. Correction of Error. If it comes to the attention
of the Committee that an error has been made in any of the allocations
prescribed by this Article 8, appropriate adjustment shall be made to the
accounts of all Participants and designated Beneficiaries that are affected
by such error, except that no adjustment need be made with respect to any
Participant or Beneficiary whose account has been distributed in full prior
to the discovery of such error.
ARTICLE 9
WITHDRAWALS, LOANS AND DISTRIBUTIONS
Section 9.1. Withdrawals Prior to Termination of Employment.
(a) Withdrawals After Age 59 1/2. A Participant who has attained age 59 1/2
may request the Committee to distribute all or any portion of his Salary
Reduction Account and the vested portion of his Matching Account as of any
Valuation Date. The minimum amount of any withdrawal pursuant to this
subsection shall be $500.
(b) Hardship Withdrawals. The provisions of this subsection
shall apply only to each Participant who had an account balance in this
Plan on December 31, 1998 (prior to the merger of the Enesco Profit Sharing
Plan into this Plan).
A Participant who is an Employee may withdraw as of any
Valuation Date all or a portion of the balance of his Salary Reduction
Account and vested Matching Account only if the Participant has incurred a
financial hardship. The determination of the existence of financial
hardship and the amount required to be distributed to satisfy the need
created by the hardship will be made by the Committee in a uniform and
non-discriminatory manner according to the following rules:
(1) A financial hardship shall be deemed to exist if the
Participant certifies to the Committee that the financial need is on
account of:
(A) expenses for medical care described in section 213(d)
of the Code previously incurred by the Participant, the
Participant's spouse, or any dependents of the Participant (as
defined in section 152 of the Code) or necessary for these
persons to obtain medical care described in section 213(d) of
the Code;
(B) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(C) payment of tuition, room and board and related
educational fees for the next 12 months of post-secondary
education for the Participant, the Participant's spouse, the
Participant's children, or any dependents of the Participant
(as so defined);
(D) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure of the mortgage on that residence; or
(E) the payment of funeral expenses incurred in respect
of the Participant or the Participant's spouse or any
dependents of the Participant
(as so defined).
(2) A Participant shall be required to certify to the Committee
on a form prescribed by the Committee both the reason for the
financial need and that such need cannot be satisfied from sources
other than a withdrawal from the Participant's accounts. The
Participant shall be required to submit any additional supporting
documentation as may be requested by the Committee.
(3) A distribution shall be treated as necessary to satisfy a
financial need if the Participant certifies to the Committee (and if
the Committee has no reason to believe that such certification is
inaccurate) that such hardship cannot be relieved by or through:
(A) reimbursement or compensation by insurance or
otherwise, or
(B) reasonable liquidation of the Participant's assets
(including for this purpose assets of the Participant's spouse
and minor children that are reasonably available to the
Participant), to the extent such liquidation would not itself
cause an immediate and heavy financial need, or
(C) other distributions or nontaxable (at the time of the
loan) loans from plans maintained by an Employer or by another
employer, or by borrowing from commercial sources on reasonable
commercial terms.
(4) Notwithstanding anything to the contrary, earnings credited
to a Participant's Salary Reduction Account attributable to periods
after 1988 shall not be available for withdrawal pursuant to this
subsection, and, the minimum amount of any hardship withdrawal made
pursuant to this subsection shall be $500. Furthermore, the amount
available for withdrawal pursuant to this subsection shall be reduced
by the amount of any loan outstanding made pursuant to Section 9.2,
and no withdrawal pursuant to this subsection shall be permitted to
the extent that such withdrawal would cause the aggregate amount of
such loan outstanding to exceed the limits described in Section 9.2.
(c) Other Withdrawals. The provisions of this subsection shall
apply only to each Participant who had an account balance in this Plan on
December 31, 1998 (prior to the effectiveness of the merger of the Enesco
Profit Sharing Plan into this Plan).
A Participant may withdraw as of any Valuation Date an amount
from his Voluntary Account and his Rollover Account and an amount from his
vested Matching Account that is not greater than the balance of such
account as of the date of such withdrawal less the amount of contributions
allocated to such account within the twenty-four month period preceding the
date of such withdrawal. The minimum amount of any withdrawal pursuant to
this subsection shall be $500.
(d) Distributions After Age 70 1/2. A Participant who has
attained age 70 1/2 may elect to withdraw all or any portion of the vested
portion of his Account as of any Valuation Date. With respect to any
Participant who is a 5%-owner (within the meaning of section 416(i) of the
Code) in the calendar year in which the Participant attains age 70 1/2,
distributions shall commence no later than April 1 of the calendar year
following the calendar year in which the Participant attains age 70 1/2.
Such distributions shall be in the time, and in the minimum amount,
prescribed by section 401(a)(9) of the Code and Regulations.
(e) Miscellaneous Rules. Any amounts withdrawn pursuant to this
Section shall be charged to the Participant's Accounts in the following
order, as applicable:
(i) Voluntary Account,
(ii) Rollover Account,
(iii) Salary Reduction Account,
(iv) Matching Account,
(v) QNEC Account,
(vi) Profit Sharing Account and
(vii) Money Purchase Account.
A Participant may request a withdrawal pursuant to this Section
in the manner prescribed by the Committee, subject to such uniform
limitation as may be prescribed by the Committee on the frequency of
withdrawals. The Committee shall prescribe uniform rules which shall govern
the manner pursuant to which such withdrawals are processed, the manner in
which withdrawals are charged to a Participant's investment subaccounts,
and the Valuation Date on which a Participant's Account shall be valued for
purposes of calculating such a withdrawal. All withdrawals made pursuant to
this Section shall be paid in cash; provided that, with respect to the
portion of any such withdrawal from the Participant's Account that is
credited to the Company Stock Fund, the Participant shall be provided with
the opportunity to elect to receive such portion in the form of shares of
Company Stock (with cash in lieu of any fractional shares).
Section 9.2. Loans to Participants. (a) Making of Loans.
Subject to the restrictions set forth in this Section any Participant who
is an Employee may request, in the manner prescribed by the Committee, to
borrow funds from the Plan. The principal balance of such loan shall be not
less than $500 and shall not exceed the lesser of (i) 50% of the balance of
the Participant's Salary Reduction Account, Voluntary Account, Rollover
Account and the vested portion of his Matching Account as of the Valuation
Date coinciding with or immediately preceding the day on which the loan is
made, and (ii) $50,000, reduced by the excess, if any, of the highest
outstanding loan balance of the Participant under all plans maintained by
the Employer during the period of time beginning one year and one day prior
to the date such loan is to be made and ending on the date such loan is to
be made over the outstanding balance of loans from all such plans on the
date on which such loan was made.
(b) Conditions for Loans. No Participant may have more than one
loan outstanding at any time. Amounts equal to any loan made pursuant to
this Section shall be transferred first from the Participant's Salary
Reduction Account to the extent thereof, then from his Voluntary Account,
if any, to the extent thereof, then from his Rollover Account, if any, to
the extent thereof and then from his Matching Account. Amounts so
transferred from a Participant's Account shall be debited pro rata from the
investment subaccounts of such account. Any loan approved by the Committee
pursuant to the preceding paragraph (a) shall be made only upon the
following terms and conditions:
(1) The period for repayment of the loan shall be determined by
the Participant within guidelines prescribed by the Committee, but
such period shall not exceed five years from the date of the loan;
provided, however, that if the purpose of the loan as determined by
the Committee is to acquire any dwelling unit that within a
reasonable time is to be used as the principal residence of the
Participant, then such period for repayment shall not exceed 20
years. Any loan may be prepaid, without penalty, by delivery to the
Committee of cash in an amount equal to the entire unpaid balance of
such loan. Any loan shall be due in full upon termination of
employment.
(2) No loan shall be made unless the Participant consents to
have such loan repaid in substantially equal installments deducted
from the regular payments of the Participant's
compensation during the term of the loan.
(3) Each loan shall be evidenced by the Participant's
collateral promissory note for the amount of the loan, with interest,
payable to the order of the Trustee, and shall be secured by an
assignment of a portion of the Participant's account balances under
the Plan equal to the initial principal amount of such loan and such
other collateral as required by the Committee.
(4) Each loan shall bear a fixed interest rate equal to the
prime rate as published in the Wall Street Journal on the first
business day of the calendar quarter during which the Participant
initiates the loan, plus 1% (or such other rate prescribed by the
Committee commensurate with the interest rate then being charged by
persons in the business of lending money in the area for loans made
under similar circumstances).
(5) If a Participant has a loan outstanding and repays the
entire amount thereof, the Participant shall be required to wait at
least 30 days prior to obtaining another loan from the Plan.
(6) No withdrawal (other than a hardship withdrawal described
in Section 9.1(b)) or distribution shall be made to any Participant
who has borrowed from the Trust unless and until the loan, including
interest, has been repaid.
(7) The Committee may, in its sole discretion, restrict the
amount to be disbursed pursuant to any loan request to the extent it
deems necessary to take into account any fluctuations in the value of
a Participant's accounts since the Valuation Date immediately
preceding the date on which such loan is to be made.
(8) The Committee shall, in its discretion, cause a charge as
an expense to the accounts of any Participant receiving a loan any
reasonable administrative fee for processing or annual maintenance of
such loan.
If any loan or portion of a loan made to a Participant under
the Plan, together with the accrued interest thereon, is in default, the
Trustees shall take appropriate steps to collect on the note and foreclose
on the security. The Committee shall prescribe uniform rules regarding the
circumstances under which a Participant's loan will be considered in
"default" for this purpose, in a manner consistent with Regulations. If, on
a Participant's termination of employment, any loan or portion of a loan
made to him under the Plan, together with the accrued interest thereon,
remains unpaid, then an amount equal to such loan or any part thereof,
together with the accrued interest thereof, shall be charged to the
Participant's accounts after all other adjustments required under the Plan,
but before any distribution pursuant to Section 9.3.
(c) Applicability. The provisions of this Section shall apply
to any person who is a Participant but who is not an Employee and any
Beneficiary of a deceased Participant if such Participant or Beneficiary is
a "party in interest" as defined in section 3(14) of ERISA. The grant of a
loan pursuant to this Section and the terms and conditions thereof shall
apply to any such Participant or Beneficiary in the same manner as to a
Participant who is an Employee, except that the requirements of Section
9.2(b)(2) shall be met with respect to each such Participant and
Beneficiary if such Participant or Beneficiary consents to have such loan
repaid in substantially equal installments as determined by the Committee,
but not less frequently than quarterly.
(d) Loan Subaccount. The Committee shall cause to be
established and maintained a loan subaccount for the receipt of amounts
transferred from a Participant's Accounts pursuant to this Section.
Appropriate accounting entries reflecting such transfers shall be
concurrent with the disbursement to the Participant of amounts borrowed. A
repayment of interest or principal received in respect of amounts borrowed
by a Participant shall be credited to the loan subaccount of such
Participant as soon as practicable after such repayment is delivered to the
Trustee. The Committee shall then cause to be credited such repayments to
the Participant's Salary Reduction Account, Voluntary Account, Rollover
Account and Matching Account in the same proportion as such accounts were
charged with the loan. Repayments so allocated to a Participant shall then
be allocated among such Participant's investment fund subaccounts in
accordance with such Participant's investment direction in effect at the
time that such repayments are credited to the Participant's accounts.
Section 9.3. Distribution upon Termination of Employment. (a)
Vesting. (1) Termination of Employment Entitling Participant to Full
Vesting. A Participant's entire Account shall be fully vested if the
Participant's employment terminates:
(i) on account of the Participant's retirement on or after age 65,
(ii) on account of the Participant's total and permanent
disability of a character which prevents the Participant, in the
judgment of the Committee corroborated in writing by a licensed
physician, from performing his usual duties for his Employer,
(iii) on account of the Participant's death, or
(iv) after completion of at least five Years of Vesting
Service.
If a Participant's employment terminates under any circumstance other than
those listed above, vesting of the Participant's Account shall be
determined pursuant to paragraph (2) or (3) below, as the case may be;
provided, however, that a Participant shall at all times be fully vested in
his Account if an Account was maintained under the Plan for the Participant
on December 31, 1998 (prior to the merger of the Enesco Profit Sharing Plan
into this Plan).
(2) Termination for Cause. If a Participant terminates
employment under circumstances other than those described in paragraph (1)
above, and the Participant's employment with his Employer is terminated
because of his fraud, embezzlement or dishonesty, the Participant shall be
fully vested in his Salary Reduction Account, Rollover Account, Voluntary
Account and QNEC Account, and the entire balance of the Participant's
Matching Account, Profit Sharing Account and Money Purchase Account shall
be forfeited.
(3) Other Termination of Employment. If a Participant's
employment terminates under circumstances other than those described in
paragraphs (1) or (2) above, the Participant shall be fully vested in the
entire balance of the Participant's Salary Reduction Account, Rollover
Account, Voluntary Account and QNEC Account, and shall be vested in a
percentage of the value of his Matching Account, Profit Sharing Account and
Money Purchase Account determined by reference to the number of the
Participant's Years of Vesting Service, in accordance with the following
schedule:
Percentage of Value of
Matching, Profit Sharing
Years of Vesting Service and Money Purchase Accounts
------------------------ ---------------------------
less than 1 0%
at least 1, but less than 2 10%
at least 2, but less than 3 20%
at least 3, but less than 4 40%
at least 4, but less than 5 70%
5 or more 100%.
(4) Time of Forfeiture. Upon the earlier of (i) the date on
which a Participant receives a distribution of his vested Account balance
pursuant to this Section and (ii) the date on which the Participant incurs
five consecutive Break in Service Years, the portion of the Participant's
Matching Account, Profit Sharing Account and Money Purchase Account that is
not vested (if any) shall be forfeited and credited to matching subaccount,
profit sharing subaccount and money purchase subaccount of the Forfeiture
Account, respectively.
(b) Time of Distribution. A Participant or Beneficiary shall be
entitled to a distribution of his vested Account as soon as
administratively practicable after the date of the Participant's
termination of employment, or, subject to Section 9.4, may defer
distribution to a later date; provided, however, that:
(i) in the case of a distribution to the Participant,
distribution shall be made or shall commence no later than the 60th
day after the calendar year that contains the later of the
Participant's 65th birthday and the date of the Participant's
termination of employment, unless the Participant makes an
affirmative election to defer commencement of distribution to a later
date which in no event shall be later than April 1 of the calendar
year following the calendar year in which the Participant attains age
70 1/2;
(ii) in the case of a distribution to a Beneficiary who is a
person or entity other than the Participant's spouse, distribution
shall be made in a lump sum no later than December 31 of the calendar
year that contains the fifth anniversary of the Participant's death,
or shall be paid in installments commencing no later than December 31
of the calendar year containing the first anniversary of the date of
the Participant's death;
(iii) in the case of a distribution to a Beneficiary who is the
Participant's spouse, distribution shall made or shall commence no
later than December 31 of the calendar year in which the Participant
would have attained age 70 1/2 (or, if later, December 31 of the
calendar year containing the first anniversary of the Participant's
death).
Within the above limitations, a Participant shall be entitled to commence
distribution of his Money Purchase Account on a date later than the date on
which distribution of his other Accounts commences.
(c) Form of Distribution. (1) Distribution to Participant. In
the case of distribution to the Participant, distribution of the
Participant's Account shall be in one of the following forms, as elected by
the Participant, subject to Section 9.7:
(i) Lump Sum. A single sum payment of the Participant's entire
Account.
(ii) Installments. Payment of the Account in a series of
monthly, quarterly or annual installments, as elected by the
distributee, over a period elected by the distributee not longer than
the joint life expectancy of the Participant and his Beneficiary or,
in the case of a distributee other than the Participant, the life
expectancy of the distributee. If the Participant's Beneficiary is an
individual or entity other than the Participant's spouse, the present
value (as determined by the Committee) of the installments expected
to be paid to the Participant shall not be less than 50% of the
balance of his Account at the time distributions hereunder shall
commence, and, to the extent required by law, shall comply with the
incidental benefit requirement of section 401(a)(9) of the Code. The
amount of the installment payments made to a distributee shall be
adjusted on a regular periodic basis by the Committee to take into
account the investment performance of the Participant's Account. The
Committee shall prescribe rules regarding the manner in which each
payment is charged against the Participant's investment subaccounts.
A distributee who is receiving installments under the Plan may elect,
at the time and in the manner prescribed by the Committee, to
discontinue installment payments and receive the remaining account
balance in the form of a single lump sum payment.
(iii) Annuity for Money Purchase Account. Distribution of the
Participant's Money Purchase Account in the form of a Qualified
Annuity, and distribution of the other accounts in either a lump sum
or installments, as described in clauses (i) and (ii) above, as
elected by the Participant.
A Participant's election from among the foregoing forms of benefit shall be
subject to the election procedures described in Section 9.7.
(2) Distribution to Beneficiary. In the case of distribution to
a Participant's Beneficiary after the Participant's death, the Beneficiary
shall be entitled to elect either the lump sum or installment options
described in clauses (i) and (ii) of the preceding paragraph. In the event
payments had commenced to the Participant under this Section prior to the
date of his death, payments must continue to be paid at least as rapidly as
the method in which payments were being made as of the date of the
Participant's death. In the event payments had not commenced to the
Participant under this Section as of the date of his death, and the
Participant is married on the date of his death, payment of the
Participant's Money Purchase Account will be made to his spouse in the form
of a Qualified Annuity unless (i) the spouse elects to receive payment in
the form of a lump sum or installments as described above or (ii) the
Participant has designated a person other than his spouse to be his
Beneficiary for his entire Account in accordance with the rules set forth
in Section 9.6.
(d) Medium of Distribution. All distributions made under this
Section shall be made in cash; provided that, in the case of a Participant
who elects a lump sum distribution under this Section, the Participant can
elect to have the portion of his Account invested in the Company Stock Fund
distributed in the form of shares of Company Stock (with cash in lieu of
fractional shares).
(e) Default. If Participant fails to make an election with
respect to distribution of his account balance, distribution shall commence
as soon as practicable after the end of the Plan Year in which the
Participant attains age 65 (or the Plan Year in which the Participant
terminates employment, if later). Distribution of the Participant's Money
Purchase Account shall be paid in the form of a Qualified Annuity.
Distribution of the remainder of the Participant's Account shall be paid in
the form of a single cash lump sum payment.
Section 9.4. Payment of Small Account Balances. Notwithstanding
any provision of Section 9.3 to the contrary, if the balance of the
Participant's Account to be distributed upon the Participant's termination
of employment or death does not exceed $5,000 (or such other amount
prescribed by section 411(a)(11) of the Code) (the "small benefit amount"),
such amount shall be distributed as soon as practicable after the
Participant's termination of employment or death in the form of a single
lump sum cash payment to the Participant or his Beneficiary, as the case
may be. For purposes of the foregoing sentence, if at the time of any
distribution the value of a Participant's Account exceeds the small benefit
amount, the value of the Participant's benefit at the time of any
subsequent distribution will be deemed to exceed the small benefit amount.
Section 9.5. Direct Rollover Option. In the case of a
distribution that is an "eligible rollover distribution" within the meaning
of section 402(c)(4) of the Code, a Participant (or a surviving spouse of a
Participant) may elect that all or any portion of such distribution to
which he is entitled shall be directly transferred from the Plan to an
individual retirement account or annuity described in section 408 of the
Code, to another retirement plan qualified under section 401(a) of the Code
(the terms of which permit the acceptance of rollover distributions) or to
an annuity plan described in section 403(a) of the Code; provided, however,
that a surviving spouse of a Participant may not elect to have such
distribution so transferred to another such retirement plan or annuity
plan. Notwithstanding the foregoing, a Participant (or his surviving
spouse) shall not be entitled to elect to have an eligible rollover
distribution transferred pursuant to this Section if (i) the total of all
eligible rollover distributions with respect to such Participant for the
Plan Year is not reasonably expected to equal at least $200 or (ii) the
amount to be so transferred is less than the total of any such distribution
unless such amount equals at least $500.
Section 9.6. Designation of Beneficiary. Each Participant shall
have the right to designate a Beneficiary or Beneficiaries (who may be
designated contingently or successively and that may be an entity other
than a natural person) to receive any distribution to be made under this
Article upon the death of such Participant or, in the case of a Participant
who dies subsequent to termination of his employment but prior to the
distribution of the entire amount to which he is entitled under the Plan,
any undistributed balance to which such Participant would have been
entitled; provided, however, that no such designation (or change thereof)
shall be effective if the Participant was married through the one-year
period ending on the date of the Participant's death unless such
designation (or change thereof) was consented to at the time of such
designation (or change thereof) by the person who was the Participant's
spouse during such period, in writing, acknowledging the effect of such
consent (including the spouse's waiver of the right to receive payment of
the Participant's Money Purchase Account in the form of a Qualified
Annuity) and witnessed by a notary public or a Plan representative, or it
is established to the satisfaction of the Committee that such consent could
not be obtained because the Participant's spouse cannot be located or such
other circumstances as may be prescribed in Regulations. Subject to the
preceding sentence, a Participant may from time to time, without the
consent of any Beneficiary, change or cancel any such designation. Such
designation and each change therein shall be made in the form prescribed by
the Committee and shall be filed with the Committee. If (i) no Beneficiary
has been named by a deceased Participant, (ii) such designation is not
effective pursuant to the proviso contained in the first sentence of this
section, or (iii) the designated Beneficiary has predeceased the
Participant, any undistributed balance of the deceased Participant shall be
distributed by the Trustee at the direction of the Committee (a) to the
surviving spouse of such deceased Participant, if any, or (b) if there is
no surviving spouse, to the executor or administrator of the estate of such
deceased Participant. The marriage of a Participant shall be deemed to
revoke any prior designation of a Beneficiary made by him effective upon
the first anniversary of such marriage and a divorce shall be deemed to
revoke any prior designation of the Participant's divorced spouse if
written evidence of such marriage or divorce shall be received by the
Committee before distribution shall have been made in accordance with such
designation.
Section 9.7. Special Rules Relating to Election of Annuity Form
of Benefit for Money Purchase Account. This Section shall not apply to
distribution of a Participant's Account to his Beneficiary after the
Participant's death.
(a) Qualified Annuity Notice. No less than 30 days (or such
shorter period as may be permitted by section 417(a)(7) of the Code) and no
more than 90 days before the date of distribution, the Committee shall give
the Participant by mail or personal delivery written notice a general
description of the Qualified Annuity, including a general description of
the circumstances under which the single premium annuity contract will be
purchased and general information on the amount of each payment under a
typical single premium annuity contract. Such notice also shall advise the
Participant that, upon written request to the Committee prior to the end of
his election period, he shall be given a written explanation in
nontechnical language of the terms and conditions of the single premium
annuity contract, of the other methods of distribution available pursuant
to Section 9.3 with respect to his Money Purchase Account and of the
estimated amount of each payment that he would be entitled to receive under
such a contract or under the other methods of distribution. Such
explanation shall be mailed or personally delivered to the Participant
within 30 days from the date the Participant's written request is received
by the Committee and the Participant's election period shall end no earlier
than 90 days after such explanation is so mailed or delivered.
(b) Election and Waiver Procedures. A Participant may, subject
to the last sentence of this paragraph, revoke the annuity form of
distribution provided under the Plan with respect to his Money Purchase
Account at any time during the 90-day period ending on the Participant's
annuity commencement date (or such other period permitted under section
417(a)(7) of the Code) (the "election period"). Such a revocation shall be
made by delivering a written notice describing the election, change or
revocation to the Committee on a form provided by the Committee for this
purpose; provided, however, that if the Participant has been married for
the one-year period ending on his annuity starting date, and as a result of
such revocation, the Participant's spouse would not be entitled to receive
a survivor's benefit at least equal to that provided by the Qualified
Annuity form of benefit, such election shall not be effective unless it
shall have been consented to, at the time of such election, revocation or
change, in writing by the Participant's spouse and such consent
acknowledges the effect of such revocation and is witnessed by either a
Plan representative or a notary public, or it is established to the
satisfaction of the Committee that such consent cannot be obtained because
the Participant's spouse cannot be located or such other circumstances as
may be prescribed in Regulations.
Section 9.8. Missing Persons. If within a period of three years
following the death or other termination of employment of any Participant
the Committee in the exercise of reasonable diligence has been unable to
locate the person or persons entitled to benefits under this Article, the
rights of such person or persons shall be forfeited, and, subject to the
following sentence, the balance of the Participant's Account shall be
credited to the Forfeiture Account; provided, however, that the Plan shall
reinstate and pay to such person or persons the amount so forfeited upon a
claim for such amount made by such person or persons. The amounts necessary
to reinstate such Account balance shall be derived from the available
balance of the matching subaccount and profit sharing subaccount of the
Forfeiture Account, or if the combined balance of such subaccounts is not
sufficient for this purpose, then the person's Employer shall make a
special contribution which shall be utilized solely for such purpose. Any
such contribution shall be made without regard to whether or not the
limitations set forth in Section 6.4 will be exceeded by such contribution.
Section 9.9. Distributions to Minor and Disabled Distributees.
Any distribution under this Article that is payable to a distributee who is
a minor or to a distributee who has been legally determined to be unable to
manage his affairs by reason of illness or mental incompetency may be made
to, or for the benefit of, any such distributee at such time consistent
with the provisions of Section 9.3 and in such of the following ways as the
legal representative of such distributee shall direct: (a) directly to any
such minor distributee if, in the opinion of such legal representative, he
is able to manage his affairs, (b) to such legal representative, (c) to a
custodian under a Uniform Gifts to Minors Act for any such minor
distributee, or (d) as otherwise directed by such legal determination.
Neither the Committee nor the Trustee shall be required to oversee the
application by any third party other than the legal representative of a
distributee of any distribution made to or for the benefit of such
distributee pursuant to this Section.
ARTICLE 10
SPECIAL PARTICIPATION AND DISTRIBUTION
RULES RELATING TO REEMPLOYMENT OF
TERMINATED EMPLOYEES AND
EMPLOYMENT BY RELATED ENTITIES
Section 10.1. Change of Employment Status. If an Employee who
is not a Participant becomes eligible to participate because of a change in
his employment status to that of an Eligible Employee, and the Employee has
otherwise satisfied the eligibility service requirement set forth in
Article 3, such Employee shall become a Participant as of the first Entry
Date next following the date of such change. Otherwise the Employee shall
become a Participant in accordance with Article 3 following satisfaction of
the eligibility service requirement.
Section 10.2. Reemployment of an Eligible Employee Whose
Employment Terminated Prior to His Becoming a Participant. (a) If an
Eligible Employee whose employment terminated before the Employee had
satisfied the eligibility service requirement set forth in Article 3 is
reemployed by an Employer, such Employee shall be eligible to become a
Participant in accordance with Article 3.
(b) If an Eligible Employee whose employment terminated after
he had satisfied the eligibility service requirement set forth in Article 3
but prior to becoming a Participant is reemployed by an Employer, he shall
not be required to satisfy again such requirement and shall be eligible to
become a Participant upon the first Entry Date next following the date of
his reemployment.
Section 10.3. Reemployment of a Terminated Participant. If a
terminated Participant is reemployed, the Participant shall not be required
to satisfy again the eligibility service requirement set forth in Article 3
and shall again become a Participant upon the first Entry Date next
following the date of his reemployment; provided that, if the Participant
terminates and is reemployed in the same Plan Year, the Participant's
Compensation earned during the previous period of employment shall be
disregarded in determining the allocation of contributions to which
he is entitled for the Plan Year, if any, under the profit sharing and
money purchase features of the Plan under Sections 4.4 and 4.5. If such a
terminated Participant is entitled to receive installment payments pursuant
to Section 9.3, such payments shall be suspended.
If a terminated Participant is reemployed prior to incurring
five consecutive Break in Service Years, thereafter completes a Year of
Vesting Service before incurring five Break in Service Years and, at or
after his termination of employment, any portion of his Account was
forfeited pursuant to Section 9.3(a) but such Participant did not receive a
lump sum distribution pursuant to Article 9, then an amount equal to the
portion of his Account that was forfeited shall be credited to his Account
as of the close of the Plan Year in which he completes such Year of Vesting
Service. If upon his termination of employment any such Participant
received a lump sum distribution and a portion of the Participant's Account
was forfeited pursuant to Section 9.3(a), then he shall have the right to
pay an amount equal to such lump sum distribution to the Trust. If the
Participant makes such a payment, then an amount equal to the portion of
his Account that was forfeited pursuant to Section 9.3(a) shall be credited
along with the amount of such payment to his Account as of the close of the
Plan Year in which such payment is made. Any such payment must be made by
the earlier of the close of the Plan Year in which falls the fifth
anniversary of the Participant's date of reemployment. If pursuant to this
paragraph the forfeited portion of a Participant's accounts is to be
restored, the amount restored shall be obtained from the available balances
of the matching subaccount and the profit sharing subaccount of the
Forfeiture Account. If the aggregate amount to be so restored to accounts
of Participants exceeds the available combined balances of such
subaccounts, the amount of such excess shall be obtained by the Employee's
Employer making a contribution in an amount equal to such excess. Any such
contribution shall be made without regard to whether or not the limitations
set forth in Section 6.4 will be exceeded by such contribution.
Section 10.4. Employment by Related Entities. If an individual
is employed by an Affiliate, then any period of such employment shall be
taken into account solely for the purposes of (i) determining whether such
individual has satisfied the eligibility service requirement set forth in
Article 3, (ii) determining the individual's Years of Vesting Service and
(iii) determining when such individual has terminated his employment for
purposes of Article 9, to the same extent it would have been had such
period of employment been as an Employee of an Employer. An individual
shall not be permitted to make contributions or share in allocations of
Employer contributions for any period of employment with an entity other
than an Employer.
Section 10.5. Leased Employees. If an individual who performed
services as a leased employee (within the meaning of section 414(n)(2) of
the Code) of an Employer or an Affiliate becomes an Employee, or if an
Employee becomes such a leased employee, then any period during which such
services were so performed shall be taken into account solely for the
purposes of (i) determining whether and when such individual satisfied the
eligibility service requirement set forth in Article 3, (ii) determining
the individual's Years of Vesting Service and (iii) determining when such
individual has terminated his employment for purposes of Article 9, to the
same extent it would have been had such period of employment been as an
Employee. This Section shall not apply to any period of service during
which such a leased employee was covered by a plan described in section
414(n)(5) of the Code.
Section 10.6. Reemployment of Veterans. The provisions of this
Section shall apply in the case of the reemployment by an Employer of an
Eligible Employee, within the period prescribed by laws relating to the
rights of reemployed veterans, after the Employee's completion of a period
of qualified military service (as defined in section 414(u)(5) of the
Code). The provisions of this Section are intended to provide such
Employees with the rights required by section 414(u) of the Code, and shall
be interpreted in accordance with such intent.
(a) Make Up of Salary Deferral Contributions. Such Employee
shall be entitled to make contributions under the Plan ("make up
deferrals"), in addition to any salary reduction contributions which
the Employee elects to have made under the Plan pursuant to Sections
4.1 and 4.2. From time to time while employed by an Employer, such
Employee may elect to contribute such make up deferrals during the
period beginning on the date of such Employee's reemployment and
ending on the earlier of:
(i) the end of the period equal to the product of three
and such Employee's period of qualified military service, and
(ii) the fifth anniversary of the date of such
reemployment.
Such Employee shall not be permitted to contribute make up deferrals
to the Plan in excess of the amount which the Employee could have
elected to have made under the Plan in the form of salary reduction
contributions if the Employee had continued in employment with his
Employer during such period of qualified military service. The manner
in which an Eligible Employee may elect to contribute make up
deferrals pursuant to this subsection (a) shall be prescribed by the
Committee.
(b) Make Up of Matching Contributions. An Eligible Employee who
contributes make up deferrals as described in subsection (a) shall be
entitled to an allocation of matching contributions ("make up
matching contributions") in an amount equal to the amount of matching
contributions that would have been allocated to the Matching Account
of such Eligible Employee under the Plan if such make up deferrals
had been made in the form of salary reduction contributions during
the period of such Employee's qualified military service (as
determined pursuant to section 414(u) of the Code). The amounts
necessary to make such allocation of make up matching contributions
shall be derived from the available balance of the Forfeiture
Account, or if the balance of such account is not sufficient for this
purpose, then the Eligible Employee's Employer shall make a special
contribution which shall be utilized solely for purposes of such
allocation.
(c) Make Up Profit Sharing and Money Purchase Contributions. An
Eligible Employee shall be entitled to an allocation of profit
sharing and money purchase contributions for any Plan Year during
which he is in qualified military service if the Eligible Employee
would have satisfied the service requirements entitling him to share
in an allocation, but for the qualified military service (based on
the Eligible Employee's work schedule as in effect on the date such
military service began, as determined by the Committee). The amounts
necessary to make such allocation of such make up contributions shall
be derived from the available balance of the Forfeiture Account, or
if the balance of such account is not sufficient for this purpose,
then the Eligible Employee's Employer shall make a special
contribution which shall be utilized solely for purposes of such
allocation.
For purposes of determining the amount of contributions to be made under
this Section, an Eligible Employee's "Compensation" during any period of
qualified military service shall be determined in accordance with section
414(u) of the Code. Any contributions made by an Eligible Employee or an
Employer pursuant to this Section on account of a period of qualified
military service in a prior Plan Year shall not be subject to the
limitations prescribed by Section 6.1, 6.2 and 6.4 of the Plan (relating to
sections 402(g), 415, and 404 of the Code) for the Plan Year in which such
contributions are made. The Plan shall not be treated as failing to satisfy
the nondiscrimination rules of Section 6.3 of the Plan (relating to
sections 401(k)(3) and 401(m) of the Code) for any Plan Year solely on
account of any make up contributions made by an Eligible Employee or an
Employer pursuant to this Section.
ARTICLE 11
SHAREHOLDER RIGHTS WITH RESPECT TO COMPANY STOCK
Section 11.1. Voting Shares of Company Stock. Each Participant
(or Beneficiary) shall be entitled to give voting instructions, in the time
and manner prescribed by the Trustee, with respect to the number of shares
of Company Stock represented by the units allocated to his Account
representing the proportional interest in the Company Stock Fund of such
Participant (or Beneficiary), if any. The Trustee shall vote, in person or
by proxy, such shares according to the voting instructions of Participants
(or Beneficiaries) which have been timely submitted to the Trustee. To the
extent permitted by law, the Trustee shall vote the shares of Company Stock
credited to Participants' (or Beneficiaries') accounts with respect to
which the Trustee does not timely receive voting instructions and shares of
Company Stock that are not allocated to Participants' (or Beneficiaries')
accounts (if any), in the same proportion by which the Trustee votes shares
of Company Stock for which instructions are timely received.
Written notice of any meeting of shareholders of the Company
and a request for voting instructions shall be given by the Trustee, at
such time and in such manner as the Trustee shall determine to each
Participant (or Beneficiary) entitled to give instructions for voting
shares of Company Stock at such meeting. The Company shall establish and
pay for a means by which such voting instructions can expeditiously be
delivered to the Trustee. All such individual instructions shall be
confidential and shall not be disclosed to any person, including any
Employer.
Section 11.2. Tender Offers. (a) Rights of Participants. In the
event a tender offer is made generally to the shareholders of the Company
to transfer all or a portion of their shares of Company Stock in return for
valuable consideration, including, but not limited to, offers regulated by
section 14(d) of the Securities Exchange Act of 1934, as amended, the
Trustee shall respond to such tender offer in respect of shares of Company
Stock held by the Trustee in the Company Stock Fund in accordance with
instructions obtained from Participants (or Beneficiaries). Each
Participant (or Beneficiary) shall be entitled to instruct the Trustee
regarding how to respond to any such tender offer with respect to the
number of shares of Company Stock represented by the units of interest in
the Company Stock Fund then allocated to his Account. Each Participant (or
Beneficiary) who does not provide timely instructions to the Trustee shall
be presumed to have directed the Trustee not to tender shares of Company
Stock allocated to his Account. A Participant (or Beneficiary) shall not be
limited in the number of instructions to tender or withdraw from tender
which he can give, but a Participant (or Beneficiary) shall not have the
right to give instructions to tender or withdraw from tender after a
reasonable time established by the Trustee pursuant to subsection (c)
below.
(b) Duties of the Company. Within a reasonable time after the
commencement of a tender offer, the Company shall cause the Trustee to
provide to each Participant or Beneficiary, as the case may be:
(i) the offer to purchase as distributed by the offeror to the
shareholders of the Company,
(ii) a statement of the shares of Company Stock represented by
the units of interest in the Company Stock Fund allocated to his
Account, and
(iii) directions as to the means by which instructions with
respect to the tender offer can be given.
The Company shall establish and pay for a means by which
instructions with respect to a tender offer can expeditiously be delivered
to the Trustee. All such individual instructions shall be confidential and
shall not be disclosed to any person, including any Employer. The Company
at its election may engage an agent to receive such instructions and
transmit them to the Trustee.
For purposes of allocating the proceeds of any sale or exchange
pursuant to a tender offer, the Trustee shall then treat as having been
sold or exchanged from each of the individual accounts of Participants (and
Beneficiaries) who provided timely directions to the Trustee under this
Section that number of shares of Company Stock represented by units in the
Company Stock Fund (if any) subject to such directions and the proceeds of
such sale or exchange shall be allocated accordingly. Any proceeds from the
sale or exchange of shares of Company Stock credited to Participants' (or
Beneficiaries') Accounts shall be invested in a commingled fund maintained
by the Trustee designated to hold such amounts pending investment
instructions from the Participants (and Beneficiaries) or the Committee, as
the case may be.
(c) Duties of the Trustee. The Trustee shall follow the
instructions of the Participants (and Beneficiaries) with respect to the
tender offer as transmitted to the Trustee. The Trustee may establish a
reasonable time, taking into account the time restrictions of the tender
offer, after which it shall not accept instructions of Participants (or
Beneficiaries).
ARTICLE 12
ADMINISTRATION
Section 12.1. The Committee. (a) The Company shall appoint a
committee consisting of three or more members that shall be known as the
Committee. The Committee shall be the "administrator" of the Plan within
the meaning of such term as used in ERISA and, except for duties
specifically vested in the Trustee, shall be responsible for the
administration of the provisions of the Plan. The Company and the Committee
shall each be a "named fiduciary" within the meaning of such term as used
in ERISA. The Company shall have the right at any time, with or without
cause, to remove the members of the Committee. In addition, any member of
the Committee may resign and such resignation shall be effective upon
delivery of the written resignation to the Company. Upon the resignation,
removal or failure or inability for any reason of any member of the
Committee to act hereunder, the Company shall appoint a successor member of
the Committee to the extent necessary to satisfy the minimum number of
Committee members. Any successor members of the Committee shall have all
the rights, privileges and duties of the predecessor, but shall not be held
accountable for the acts of the predecessor.
(b) Any member of the Committee may, but need not, be an
employee, director, officer or shareholder of an Employer and such status
shall not disqualify him from taking any action hereunder or render him
accountable for any distribution or other material advantage received by
him under the Plan, provided that no member of the Committee who is a
Participant shall take part in any action of the Committee or any matter
involving solely his rights under the Plan.
(c) Promptly after the appointment of the members of the
Committee and from time to time thereafter, and promptly after the
appointment of any successor member of the Committee, the Trustee shall be
notified as to the names of the persons appointed initially and as
successor members of the Committee by delivery to the Trustee of a written
notice of such appointment.
(d) The Committee shall have the duty and authority to, in its
sole discretion, interpret and construe the Plan in regard to all questions
of eligibility, the status and rights of Participants, distributees and
other persons under the Plan, and the manner, time, and amount of payment
of any distribution under the Plan. Each Employer shall, from time to time,
upon request of the Committee, furnish to the Committee such data and
information as the Committee shall require in the performance of its
duties. All determinations and actions of the Committee shall be inclusive
and binding upon all affected parties, except that the Committee may revoke
or modify a determination or action that the Committee determines to have
been made in error.
(e) The Committee shall direct the Trustee to make payments of
amounts to be distributed from the Trust under Article 9.
(f) The Committee shall supervise the collection of
Participants' contributions made pursuant to Article 5 and the delivery of
such contributions to the Trustee.
(g) The members of the Committee may allocate their
responsibilities and may designate any person, partnership or corporation
to carry out any of their responsibilities with respect to administration
of the Plan. Any such allocation or designation shall be reduced to writing
and such writing shall be kept with the records of the Plan.
(h) The Committee may act at a meeting, or by writing without a
meeting, by the vote or written assent of a majority of its members. The
Committee shall elect one of its members as secretary and keep the Trustee
advised of the identity of the member holding that office. The secretary
shall be the Plan's agent for service of legal process, keep records of all
meetings of the Committee, and forward all necessary communications to the
Trustee. The secretary, or an officer of the Company so designated by the
Committee, shall have the authority to execute all instruments or documents
necessary or appropriate to carry out the actions and decisions of the
Committee, and any person may rely upon any such instrument or document so
executed as such evidence. The Committee may adopt such rules and
procedures as it deems desirable for the conduct of its affairs and the
administration of the Plan, provided that any such rules and procedures
shall be consistent with the provisions of the Plan and ERISA.
(i) The members of the Committee shall discharge their duties
with respect to the Plan (A) solely in the interest of the Participants and
Beneficiaries, (B) for the exclusive purpose of providing benefits to
Employees participating in the Plan and their Beneficiaries and of
defraying reasonable expenses of administering the Plan and (C) with the
care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character
and with like aims. The Employers hereby jointly and severally indemnify
the members of the Committee and each of them, from the effects and
consequences of their acts, omissions and conduct in their official
capacity, except to the extent that such effects and consequences result
from their own willful misconduct.
(j) The members of the Committee may not receive any
compensation or fee for services as members of the Committee unless
otherwise agreed between the members of the Committee and the Employers.
The Employers shall reimburse the members of the Committee for any
necessary expenditures incurred in the discharge of their duties as members
of the Committee.
(k) The Committee may employ such counsel (who may be counsel
for an Employer) and agents and may arrange for such clerical and other
services as it may require in carrying out the provisions of the Plan.
Section 12.2. Claims Procedure. If any Participant or
distributee believes he is entitled to benefits in an amount greater than
those which he is receiving or has received, he may file a claim with the
Committee. Such a claim shall be in writing and state the nature of the
claim, the facts supporting the claim, the amount claimed, and the address
of the claimant. The Committee shall review the claim and, unless special
circumstances require an extension of time, within 90 days after receipt of
the claim, give written notice by registered or certified mail to the
claimant of its decision with respect to the claim. If special
circumstances require an extension of time, the claimant shall be so
advised in writing within the initial 90-day period and in no event shall
such an extension exceed 90 days. The notice of the decision of the
Committee with respect to the claim shall be written in a manner calculated
to be understood by the claimant and, if the claim is wholly or partially
denied, set forth the specific reasons for the denial, specific references
to the pertinent Plan provisions on which the denial is based, a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary, and an explanation of the claim review procedure
under the Plan. The Committee shall also advise the claimant that he or his
duly authorized representative may request a review by the Review Committee
of the Enesco Group, Inc. Retirement Plans (the "Review Committee") of the
denial by filing with the Review Committee within 60 days after notice of
the denial has been received by claimant, a written request for such
review. The claimant shall be informed that he may have reasonable access
to pertinent documents and submit comments in writing to the Review
Committee within the same 60-day period. If a request is so filed, review
of the denial shall be made by the Review Committee within, unless special
circumstances require an extension of time, 60 days after receipt of such
request, and the claimant shall be given written notice of the Review
Committee's final decision. If special circumstances require an extension
of time, the claimant shall be so advised in writing within the initial
60-day period and in no event shall such an extension exceed 60 days. The
notice of the Review Committee's final decision shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based and shall be written in a manner
calculated to be understood by the claimant.
The Review Committee shall be established by the Company, which
shall have the power, in its discretion, to modify membership of the Review
Committee from time to time.
Section 12.3. Procedures for Domestic Relations Orders. If the
Committee receives any written judgment, decree or order (including
approval of a property settlement agreement) pursuant to the domestic
relations or community property laws of any state relating to the provision
of child support, alimony or marital property rights of a spouse, former
spouse, child or other dependent of a Participant and purporting to provide
for the payment of all or a portion of the Participant's benefit under the
Plan to or on behalf of one or more of such persons (such judgment, decree
or order being hereinafter called a "domestic relations order"), the
Committee shall determine whether such order constitutes a "qualified
domestic relations order," as defined in Section 14.2(b), and shall notify
the Participant and each payee named in such order in writing of its
determination. The Committee shall adopt procedures relating to its review
of any such domestic relations order, in accordance with section 414(p) of
the Code and section 206(d)(3) of ERISA.
Section 12.4. Information from Participants and Beneficiaries.
Each Participant and Beneficiary shall furnish to the Committee, in the
form prescribed by it, such personal data, affidavits, authorization to
obtain information, and other information as the Committee may deem
appropriate for the proper administration of the Plan.
Section 12.5. Notices to Participants, Etc. All notices,
reports and statements given, made, delivered or transmitted to a
Participant or distributee or any other person entitled to or claiming
benefits under the Plan shall be deemed to have been duly given, made or
transmitted when mailed by first class mail with postage prepaid and
addressed to the Participant or distributee or such other person at the
address last appearing on the records of the Committee. A Participant or
distributee or other person may record any change of his address from time
to time by written notice filed with the Committee.
Section 12.6. Notices to Committee. Written directions, notices
and other written or electronic communications from Participants or
distributees or any other person entitled to or claiming benefits under the
Plan to the Committee shall be deemed to have been duly given, made or
transmitted either when delivered to such location as shall be prescribed
by the Committee for the giving of such directions, notices and other
communications or, in the case of written directions, when mailed by first
class mail with postage prepaid and addressed to the addressee at the
address specified upon such forms.
Section 12.7. Records. The Committee shall keep a record of all
of its proceedings and shall keep or cause to be kept all books of account,
records and other data as may be necessary or advisable in its judgment for
the administration of the Plan.
Section 12.8. Reports of Trustee and Accounting to
Participants. The Committee shall keep on file, in such form as it shall
deem convenient and proper, all reports concerning the Trust Fund received
by it from the Trustee, and the Committee shall, as soon as possible after
the close of each Plan Year, advise each Participant and Beneficiary of the
balance credited to any Account for his benefit as of the close of such
Plan Year pursuant to Article 7 hereof.
ARTICLE 13
PARTICIPATION BY OTHER EMPLOYERS
Section 13.1. Adoption of Plan. With the consent of the
Company, any entity may become a participating Employer under the Plan by
(a) taking such action as shall be necessary to adopt the Plan and (b)
executing and delivering such instruments and taking such other action as
may be necessary or desirable to put the Plan and Trust into effect with
respect to such entity, as prescribed by the Company.
Section 13.2. Exclusion from Participation. The Company may, by
written instrument, exclude an Employer from continued participation in the
Plan. An entity that is an Employer may withdraw from participation in the
Plan at any time by taking appropriate action as prescribed by the Company.
Upon the effective date of an entity's exclusion or withdrawal from
participation in the Plan pursuant to this Section, such entity shall
thereupon cease to be an Employer.
Section 13.3. Company as Agent for Employers. Each entity which
becomes a participating Employer pursuant to Section 13.1 or Section 13.4
by so doing shall be deemed to have appointed the Company its agent to
exercise on its behalf all of the powers and authorities hereby conferred
upon the Company by the terms of the Plan, including, but not by way of
limitation, the power to amend and terminate the Plan. The authority of the
Company to act as such agent shall continue until such Employer is excluded
or withdraws from the Plan.
Section 13.4. Successor Employer. In the event that any
Employer is reorganized by way of merger, consolidation, transfer of assets
or otherwise, so that another corporation other than an Employer succeeds
to all or substantially all of such Employer's business, and such successor
corporation is an Affiliate, such successor corporation automatically shall
be substituted for such Employer under the Plan, unless such Employer or
successor corporation is removed by the Company or withdraws from
participation in the Plan as an Employer.
ARTICLE 14
MISCELLANEOUS
Section 14.1. Expenses. All costs and expenses incurred in
administering the Plan and the Trust, including the expenses of the
Committee, the fees of counsel and any agents for the Committee, the fees
and expenses of the Trustee, the fees of counsel for the Trustee and other
administrative expenses shall be paid under the direction of the Committee
from the matching and profit sharing subaccounts of the Forfeiture Account
(or such other assets of the Trust Fund specified by the Committee) to the
extent such expenses are not paid by the Employers. The Company, in its
sole discretion, having regard to the nature of a particular expense, shall
determine the portion of such expense that is to be borne by the Employer.
Section 14.2. Non-Assignability. (a) In general. It is a
condition of the Plan, and all rights of each Participant and Beneficiary
shall be subject thereto, that no right or interest of any Participant or
Beneficiary in the Plan shall be assignable or transferable in whole or in
part, either directly or by operation of law or otherwise, including, but
not by way of limitation, execution, levy, garnishment, attachment, pledge
or bankruptcy, but excluding devolution by death or mental incompetency,
and any attempt to do so shall be void, and no right or interest of any
Participant or Beneficiary in the Plan shall be liable for, or subject to,
any obligation or liability of such Participant or Beneficiary, including
claims for alimony or the support of any spouse, except as provided below
or as otherwise required by law.
(b) Exception for Qualified Domestic Relations Orders.
Notwithstanding any provision of the Plan to the contrary, if a
Participant's Account under the Plan, or any portion thereof, is the
subject of one or more qualified domestic relations orders, as defined
below, such account balance or portion thereof shall be paid to the person
and at the time and in the manner specified in any such order. For purposes
of this subsection, "qualified domestic relations order" shall have the
meaning set forth in section 414(p) of the Code and section 206(d)(3) of
ERISA. The Committee may adopt rules and procedures for purposes of
determining whether an order is a "qualified domestic relations order"
under the Code and ERISA, and is consistent with the terms of the Plan and
the administration thereof. For purposes of this Plan, payment of an
assigned benefit pursuant to a domestic relations order may commence as
soon as administratively practicable after such order is determined by the
Committee to constitute a "qualified domestic relations order" under
section 414(p) of the Code and section 206(d)(3) of ERISA, if the terms of
the order so provide.
Section 14.3. Employment Non-Contractual. The Plan confers no
right upon an Employee to continue in employment.
Section 14.4. Limitation of Rights. The Employers do not
guarantee or promise to pay or to cause to be paid any of the benefits
provided by the Plan. A Participant or distributee shall have no right,
title or claim in or to any specific asset of the Trust Fund, but shall
have the right only to distributions from the Trust Fund on the terms and
conditions herein provided.
Section 14.5. Merger or Consolidation with Another Plan. A
merger or consolidation with, or transfer of assets or liabilities to, any
other plan shall not be effected unless the terms of such merger,
consolidation or transfer are such that each Participant, distributee,
Beneficiary or other person entitled to receive benefits from the Plan
would, if the Plan were to terminate immediately after the merger,
consolidation or transfer, receive a benefit equal to or greater than the
benefit such person would be entitled to receive if the Plan were to
terminate immediately before the merger, consolidation, or transfer.
Section 14.6. Gender and Plurals. Wherever used in the Plan,
words in the masculine gender shall include masculine or feminine gender,
and, unless the context otherwise requires, words in the singular shall
include the plural, and words in the plural shall include the singular.
Section 14.7. Applicable Law. The Plan and all rights hereunder
shall be governed by and construed in accordance with the laws of the State
of Illinois to the extent such laws have not been preempted by applicable
federal law.
Section 14.8. Severability. If a provision of the Plan shall be
held illegal or invalid, the illegality or invalidity shall not affect the
remaining parts of the Plan and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included in the Plan.
Section 14.9. No Guarantee. Neither the Committee, the
Employers, nor the Trustee in any way guarantees the Trust from loss or
depreciation nor the payment of any money that may be or become due to any
person from the Trust Fund. Nothing herein contained shall be deemed to
give any Participant, distributee, or Beneficiary an interest in any
specific part of the Trust Fund or any other interest except the right to
receive benefits out of the Trust Fund in accordance with the provisions of
the Plan and the Trust agreement.
Section 14.10. Plan Voluntary. Although it is intended that the
Plan shall be continued and that contributions shall be made as herein
provided, the Plan is entirely voluntary on the part of the Employers and
the continuance of the Plan and the payment of contributions hereunder are
not to be regarded as contractual obligations of the Employers.
ARTICLE 15
TOP-HEAVY PLAN REQUIREMENTS
Section 15.1. Top-Heavy Plan Determination. If as of the
determination date (as hereinafter defined) for any Plan Year (a) the sum
of the account balances under the Plan and all other defined contribution
plans in the aggregation group (as defined below) and (b) the present value
of accrued benefits under all defined benefit plans in such aggregation
group of all Participants in such plans who are key employees (as defined
below) for such Plan Year exceeds 60% of the aggregate of the account
balances and present value of accrued benefits of all Participants in such
plans as of the determination date (as hereinafter defined), then the Plan
shall be a top-heavy plan for such Plan Year, and the requirements of
Sections 15.3 and 15.4 shall be applicable for such Plan Year as of the
first day thereof. If the Plan is a top-heavy plan for any Plan Year and is
not a top-heavy plan for any subsequent Plan Year, the requirements of this
Article 15 shall not be applicable for such subsequent Plan Year except to
the extent provided in Section 15.4.
Section 15.2. Definitions and Special Rules. (a) Definitions.
For purposes of this Article 15, the following definitions shall apply:
(1) Determination Date. The determination date for all plans
in the aggregation group shall be the last day of the preceding Plan
Year, and the valuation date applicable to a determination date shall
be (i) in the case of a defined contribution plan, the date as of
which account balances are determined that coincides with or
immediately precedes the determination date, and (ii) in the case of
a defined benefit plan, the date as of which the most recent
actuarial valuation for the Plan Year that includes the determination
date is prepared, except that if any such plan specifies a different
determination or valuation date, such different date shall be used
with respect to such plan.
(2) Aggregation Group. The aggregation group shall consist of
(a) each plan of an Employer in which a key Employee is a
Participant, (b) each other plan that enables such a plan to be
qualified under section 401(a) of the Code, and (c) any other plans
of an Employer that the Company designates as part of the aggregation
group.
(3) Key Employee. Key employee shall have the meaning set forth
in section 416(i) of the Code.
(4) Compensation. Compensation shall have the meaning set forth
in section 1.415-2(d) of the Regulations.
(b) Special Rules. For the purpose of determining the accrued
benefit or account balance of a Participant, the accrued benefit or account
balance of any person who has not performed services for an Employer at any
time during the five-year period ending on the determination date shall not
be taken into account pursuant to this Section, and any person who received
a distribution from a plan (including a plan that has terminated) in the
aggregation group during the five-year period ending on the last day of the
preceding Plan Year shall be treated as a participant in such plan, and any
such distribution shall be included in such Participant's account balance
or accrued benefit, as the case may be.
Section 15.3. Minimum Contribution for Top-Heavy Years.
Notwithstanding any provision of the Plan to the contrary, the sum of the
Employer contributions under Article 4 (other than salary reduction
contributions) allocated during any Plan Year to the accounts of each
Participant (other than a key employee) during any Plan Year for which the
Plan is a top-heavy plan shall in no event be less than the lesser of (i)
3% of such Participant's Compensation during such Plan Year and (ii) the
highest percentage at which Employer contributions are made on behalf of
any key employee for such Plan Year. Such minimum contribution shall be
made even if, under other provisions of the Plan, the Participant would not
otherwise be entitled to receive an allocation or would receive a lesser
allocation for the year because of the Participant's failure to complete a
specified service requirement. If during any Plan Year for which this
Section is applicable a defined benefit plan is included in the aggregation
group and such defined benefit plan is a top-heavy plan for such Plan Year,
the percentage set forth in clause (i) of the first sentence of this
Section shall be 5%. The percentage referred to in clause (ii) of the first
sentence of this Section shall be obtained by dividing the aggregate of
Employer contributions made pursuant to Article 4 and pursuant to any other
defined contribution plan that is required to be included in the
aggregation group (other than a defined contribution plan that enables a
defined benefit plan that is required to be included in such group to be
qualified under section 401(a) of the Code) during the Plan Year on behalf
of such key employee by such key employee's compensation for the Plan Year.
Section 15.4. Special Rules for Applying Statutory Limitations
on Benefits. The provisions of this Section shall apply only to limitation
years commencing prior to January 1, 2000.
(a) In any Plan Year for which the Plan is a top-heavy plan,
clause (ii)(A)(I) of Section 6.2 shall be applied by substituting
"100%" for "125%" appearing therein, unless, for such Plan Year, (i)
the percentage of account balances of Participants who are key
employees does not excess 90% and (ii) employer contributions and
forfeitures allocated to the accounts of Participants who are not key
employees equals at least 4% of the Compensation of each such
Participant.
(b) In any Plan Year for which the Plan is a top-heavy plan,
clause (ii)(B)(I) of Section 6.2 shall be applied by substituting
"100%" for "125%" appearing therein unless for any such Plan Year (i)
the percentage of accrued benefits of Participants who are key
employees does not exceed 90% and (ii) the minimum accrued benefit of
each Participant under all defined benefit plans in the aggregate
group is at least 3% of his average compensation (determined under
Section 416(d) of the Code) multiplied by each year of Service after
1983, not in excess of 10, for which such plans are top-heavy plans.
ARTICLE 16
AMENDMENT, ESTABLISHMENT OF SEPARATE PLAN AND TERMINATION
Section 16.1. Amendment. The Company may, at any time and from
time to time, amend, suspend or modify the Plan by written instrument duly
adopted by the Company, or, in the case of an amendment that does not have
a material impact on benefits to Participants and costs to the Employers,
by written instrument or resolution duly adopted by the Committee. Any such
amendment, suspension or modification shall become effective as of the date
the Company or the Committee, as the case may be, shall determine and may
apply to Participants in the Plan at the time thereof as well as to future
Participants.
Section 16.2. Establishment of Separate Plan. If an Employer
withdraws or is excluded from the Plan under Section 13.2, the Committee
shall determine the portion of each investment fund held by the Trustee
that is applicable to the Participants of such Employer and their
Beneficiaries and direct the Trustee to segregate such portion in separate
investment funds. Such separate investment funds shall thereafter be held
and administered as a part of the separate plan of such Employer.
The portion of each investment fund applicable to the
Participants (and Beneficiaries) of a particular Employer shall be:
(a) the total amount credited to all subaccounts invested in
such investment fund that are applicable to the Participants (and
Beneficiaries) of such Employer, increased or decreased, as the case
may be, by
(b) an amount that bears the same ratio to the difference, if
any, between
(i) the total value of such investment fund, and
(ii) the total amount credited to all subaccounts
invested in such investment fund
as the total amount credited to the subaccounts invested in such
investment fund that are applicable to the Participants (and
Beneficiaries) of such Employer bears to the total amount credited to
such subaccounts of all Participants (and Beneficiaries).
Section 16.3. Full Vesting upon Termination of Participation or
Partial Termination of the Plan. In the event that any Employer terminates
its participation in the Plan, or in the event of the partial termination
of the Plan, the accounts of all Participants of such Employer, or of those
Participants who are affected by the partial termination of the Plan, as
the case may be, shall become fully vested and shall not thereafter be
subject to forfeiture.
Section 16.4. Distribution upon Termination of the Plan. Any
Employer may at any time terminate its participation in the Plan by written
instrument executed on behalf of the Employer and duly adopted. In the
event of any such termination, the Committee shall determine the portion of
each investment fund held by the Trustee that is applicable to the
Participants of such Employer and their Beneficiaries and direct the
Trustee to distribute such portion of each investment fund to Participants
(and Beneficiaries) ratably in proportion to the balances of their
respective subaccounts invested in such investment fund. The portion of
each investment fund applicable to the Participants (and Beneficiaries) of
such Employer shall be:
(a) the total amount credited to all subaccounts invested in
such investment fund that are applicable to the Participants (and
Beneficiaries) of such Employer, increased or decreased, as the case
may be, by
(b) an amount that bears the same ratio to the difference, if
any, between
(i) the total value of such investment fund, and
(ii) the total amount credited to all subaccounts
invested in such investment fund
as the total amount credited to the subaccounts invested in such
investment fund that are applicable to the Participants (and
Beneficiaries) of such Employer bears to the total amount credited to
such subaccounts of all Participants (and Beneficiaries).
A complete discontinuance of contributions by an Employer shall be deemed a
termination of such Employer's participation in the Plan for purposes of
this Section.
Section 16.5. Trust Fund to Be Applied Exclusively for
Participants and Their Beneficiaries. Subject only to the provisions of
Article 6 and Section 16.4, and any other provision of the Plan to the
contrary notwithstanding, it shall be impossible for any part of the Trust
Fund to be used for or diverted to any purpose not for the exclusive
benefit of Participants and their beneficiaries or the payment of
reasonable administrative expenses either by operation or termination of
the Plan, power of amendment or other means.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed by its duly authorized officers this ______ day of
__________________, 1998.
ENESCO GROUP, INC.
By: ___________________________________
Title: _________________________________
ATTEST:
_______________________________________
Title: ________________________________
