Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
LIBERTY FINANCIAL COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-3260640
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
600 Atlantic Avenue, Boston, MA 02210-2214
(Address of principal executive offices) (Zip Code)
Liberty Financial Companies, Inc. Savings and Investment Plan
(full title of the Plan)
John A. Benning, Esq.
Senior Vice President and General Counsel
Liberty Financial Companies, Inc.
600 Atlantic Avenue
Boston, MA 02210-2214
(Name and address of agent for service)
(617) 722-6000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================
Proposed Proposed
Title of securities Amount to be Maximum Maximum Amount of
to be registered Registered (1) Offering Price Aggregate Registration
Per Share (2) Offering Price (2) Fee
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value (3)... 25,000 shares $33.4375(3) $835,937.50(3) $254
=============================================================================================
</TABLE>
(1) Plus such additional number of shares as may be required pursuant
to the plans in the event of a stock dividend, split-up of shares,
recapitalization or other similar change in the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee, in
accordance with Rule 457(h)(1), on the basis of the last reported sale
price of the Registrants Common Stock on August 7, 1998, as reported by the
New York Stock Exchange, Inc.
<PAGE>
(3) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE>
EXPLANATORY NOTE
The Registration Statement has been prepared in accordance with the
requirements of Form S-8, as amended, and relates to 25,000 shares of Common
Stock, $.01 par value per share, of Liberty Financial Companies, Inc. (the
"Company") that have been reserved for issuance under the Company's Savings and
Investment Plan. In addition, pursuant to Rule 416(c) under the Securities Act
of 1933, as amended, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to such plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(b) The Company's Report on Form 10-Q for the fiscal quarter ended March
31, 1998.
(c) The description of the Company's Common Stock incorporated by
reference into the Company's registration statement on Form 8-A filed with the
Commission on March 24, 1995 from the Company's registration statement on Form
S-4 (SEC File No. 33-88824) initially filed with the Commission on January27,
1995.
In addition, all documents filed by the Company or the Company's Savings
and Investment Plan after the initial filing date of this Registration Statement
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and prior to the filing of a
post-effective amendment which indicates that all shares registered hereunder
have been sold or which de-registers all shares 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 documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Officers and Directors
The Restated Articles of Organization of Liberty Financial Companies,
Inc. (the "Company") provide that no director of the Company shall be liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (ii) for approving a dividend, stock repurchases or other distributions
to stockholders that would result in personal liability to the directors under
Section 61 or Section 62 of Chapter 156B of the General Laws of Massachusetts or
(iv) for any transaction in which the director derived an improper personal
benefit.
II-1
<PAGE>
Section 67 of Chapter 156B of the General Laws of Massachusetts provides
that to the extent specified in or authorized by the articles of organization, a
by-law adopted by shareholders or a resolution adopted by the holders of the
majority of shares of stock entitled to vote on the election of directors, a
corporation can indemnify directors, officers and other employees or agents of
the corporation except as to any matter as to which such person shall have been
adjudicated in any proceeding not to have acted in good faith in the reasonable
belief that the action was in the best interests of the corporation. The
Company's Restated Articles of Organization generally require the Company to
indemnify directors and officers to the fullest extent permissible under
Massachusetts law. The Registration Rights Agreement dated as of March24, 1995
between the Company and Liberty Mutual Insurance Company ("Liberty Mutual")
provides for indemnification of Liberty Mutual and its directors, officers and
affiliates in certain circumstances. The Intercompany Agreement dated as of
March 24, 1995 between the Company and Liberty Mutual provides for
indemnification of Liberty Mutual against certain civil liabilities, including
liabilities under the Securities Act, relating to misstatements in or omissions
from this Registration Statement.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Specimen Stock Certificate*
5.1 Opinion of John A. Benning, Esquire as to the legality
of the shares being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney.**
99.1 The Registrant's Savings and Investment Plan
- ------------------
*Incorporated by reference from the Registrant's Registration Statement on Form
S-4 (SEC File No.33-88824), initially filed with the Commission on January27,
1995.
**Incorporated by reference from the Registrant's Registration Statement on Form
S-3 (SEC File No. 333-20067), filed with the Commission dated January 21, 1997.
II-2
<PAGE>
Item 9. Undertakings
(a) The Company hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, The Commonwealth of Massachusetts on August
12, 1998.
Liberty Financial Companies, Inc.
(Registrant)
By: /s/ Kenneth R. Leibler*
-----------------------------
Kenneth R. Leibler
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on August 12, 1998 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
Name Capacity
- ---- --------
<S> <C>
/s/ Kenneth R. Leibler* Chief Executive Officer, President (Principal
- --------------------------- Executive Officer) and Director
Kenneth R. Leibler
/s/ J. Andrew Hilbert Senior Vice President and Chief Financial Officer
- ---------------------------
J. Andrew Hilbert
/s/ Gregory H. Adamian* Director
- ---------------------------
Gregory H. Adamian
/s/ Gerald E. Anderson* Director
- ---------------------------
Gerald E. Anderson
/s/ Michael J. Babcock* Director
- ---------------------------
Michael J. Babcock
/s/ Gary L. Countryman* Chairman and Director
- ---------------------------
Gary L. Countryman
/s/ Paul J. Darling, II* Director
- ---------------------------
Paul J. Darling, II
II-4
<PAGE>
/s/ David F. Figgins* Director
- ---------------------------
David F. Figgins
/s/ John B. Gray* Director
- ---------------------------
John B. Gray
Director
- ---------------------------
John P. Hamill
/s/ Marian L. Heard* Director
- ---------------------------
Marian L. Heard
/s/ Raymond H. Hefner, Jr.* Director
- ---------------------------
Raymond H. Hefner, Jr.
/s/ Edmund F. Kelly* Director
- ---------------------------
Edmund F. Kelly
/s/ Sabino Marinella* Director
- ---------------------------
Sabino Marinella
/s/ Ray B. Mundt* Director
- ---------------------------
Ray B. Mundt
/s/ Glenn P. Strehle* Director
- ---------------------------
Glenn P. Strehle
/s/ Stephen J. Sweeney* Director
- ---------------------------
Stephen J. Sweeney
</TABLE>
*By /s/ John A. Benning
-----------------------------
John A. Benning
Attorney-in-Fact
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Number
5.1 Opinion of John A. Benning, Esquire as to the legality of the shares
being registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Ernst & Young LLP
99.1 The Registrant's Savings and Investment Plan
August 12, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
This opinion is delivered to you in connection with the Registration
Statement (the "Registration Statement") on Form S-8 of Liberty Financial
Companies, Inc. (the "Company") being filed with the Securities and Exchange
Commission by the Company under the Securities Act of 1933, as amended (the
"Act"), for registration under the Act of 25,000 shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), in connection with the
Company's Savings and Investment Plan (the "Plan"). I am Senior Vice President,
General Counsel and Clerk of the Company, and have acted as such General Counsel
in rendering this opinion to you. I have made such examination of law and have
examined such certificates (including certificates of public officials and of
officers of the Company) as I have deemed necessary for purposes of rendering
this opinion.
Based upon and subject to the foregoing, I am of the opinion that the
shares of Common Stock to be issued by the Company pursuant to the Registration
Statement under the Plan have been validly authorized for issuance and will,
when issued in accordance with the terms of the Plan, as in effect on the date
hereof, against receipt of the specified purchase price therefor, be legally
issued, fully paid and non-assessable.
I understand that this opinion is to be used in connection with the
Registration Statement.
Very truly yours,
/s/ John A. Benning
---------------------------
John A. Benning
Senior Vice President
and General Counsel
JAB/mr
Enc
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Liberty Financial Companies, Inc.
We consent to the use of our report, incorporated herein by reference in the
registration statement on Form S-8 of Liberty Financial Companies, Inc.,
pertaining to its Savings and Investment Plan, dated February 16, 1996, relating
to the consolidated statements of income, stockholders' equity and cash flows of
Liberty Financial Companies, Inc. and subsidiaries for the year ended December
31, 1995 which report appears in the December 31, 1995 annual report on Form
10-K of Liberty Financial Companies, Inc.
KPMG Peat Marwick LLP
Boston, Massachusetts
August 12, 1998
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Liberty Financial Companies, Inc. Savings and
Investment Plan of our report dated February 3, 1998 with respect to the 1996
and 1997 consolidated financial statements incorporated by reference in the
Annual Report (Form 10-K) of Liberty Financial Companies, Inc. for the year
ended December 31, 1997 and the related schedules included therein, filed with
the Securities and Exchange Commission.
Ernst & Young LLP
Boston, Massachusetts
August 11, 1998
LIBERTY FINANCIAL COMPANIES, INC.
SAVINGS AND INVESTMENT PLAN
Restated Effective July 1, 1998
August, 1998
EXECUTION COPY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE 1 -- INTRODUCTION
1.1 Amendment of Plan 1
1.2 Plan 1
1.2.A Plan Mergers 1
1.3 Purpose of Plan 2
1.4 Application of Prior Provisions of Plan 2
ARTICLE 2 -- DEFINITIONS
2.1 "Account" 3
2.2 "Affiliated Company" 3
2.2.A "After Tax Contribution Account" 3
2.3 "Annual Addition" 4
2.4 "Armed Forces Leave of Absence" 4
2.5 "Beneficiary" 4
2.6 "Board of Directors" 4
2.7 "Break in Service 4
2.8 "Code" 5
2.9 "Company" 5
2.10 "Discretionary Contribution" 5
2.11 "Discretionary Contribution Account" 5
2.12 "Effective Date" 5
2.13 "Elective Contribution" 5
2.14 "Elective Contribution Account" 5
2.15 "Eligible Employee" 6
2.16 "Employee" 6
2.17 "Employer" 6
2.18 "Employment Commencement Date" 6
2.19 "Entry Date" 6
2.20 "ERISA" 6
2.21 "Fiduciaries" 6
(i)
<PAGE>
Page
----
2.22 "Highly Compensated Participant" 7
2.23 "Highly Compensated Employee" 7
2.24 "Hour of Service" 7
2.25 "Limitation Year" 7
2.26 "Matching Contribution" 7
2.27 "Matching Contribution Account" 7
2.28 "Maternity/Paternity Leave of Absence" 7
2.29 "Named Fiduciaries" 8
2.30 "Normal Retirement Date" 8
2.31 "Participant" 8
2.32 "Participating Employer" 8
2.33 "Plan" 9
2.34 "Plan Administrator" 9
2.35 "Plan Year" 9
2.36 "Qualified Domestic Relations Order" 9
2.37 "Rollover Account" 9
2.38 "Share of the Trust Fund" 10
2.38A "Service Termination Date" 10
2.39 "Total Compensation" 10
2.40 "Trust" 11
2.41 "Trust Fund" 11
2.42 "Trustee" or "Trustees" 11
2.43 "Valuation Date" 12
2.44 "Year of Service for Vesting" 12
ARTICLE 3 -- ADMINISTRATION
3.1 Allocation of Responsibility Among
Fiduciaries for Plan and Trust
Administration 13
3.2 Administration 14
(ii)
<PAGE>
Page
----
3.3 Claims Procedure 14
3.4 Records and Reports 15
3.5 Other Administrative Powers and Duties 15
3.6 Rules and Decisions 17
3.7 Reliance on Tables, etc. 17
3.8 Procedures 17
3.9 Authorization of Withdrawals and
Distributions 17
3.10 Rules and Procedures for Withdrawals
and Distributions 17
3.11 Indemnification of Plan Administrator 18
ARTICLE 4 -- PARTICIPATION
4.1 Participation 19
4.2 Cessation of Participation 19
4.3 Breaks in Service 19
ARTICLE 5 -- CONTRIBUTIONS
5.1 Elective Contributions 20
5.2 Compensation Reduction Authorizations 20
5.3 Revocation or Change of Compensation
Deductions 20
5.4 Matching Contributions 21
5.5 Discretionary Contributions 21
5.6 Treatment of Forfeitures 21
5.7 Maximum Amount of Contributions 22
5.8 Return of Contributions 22
5.9 Nondiscrimination Requirements 23
5.10 Adjustments by Plan Administrator 23
(iii)
<PAGE>
Page
----
5.11 Distribution of Excess Contributions 24
5.12 Distribution of Excess Deferrals 25
ARTICLE 6 -- TRUST FUND AND INVESTMENTS
6.1 Investment Funds Within the Trust Fund 26
6.2 Selection of Investment Funds 26
6.2.A Certain Self-Managed Accounts 27
ARTICLE 7 -- PARTICIPANT ACCOUNTS AND LIMITATIONS
ON ANNUAL ADDITIONS
7.1 Accounts 28
7.2 Adjustment of Accounts 28
7.3 Limitations 28
ARTICLE 8 -- RIGHTS TO BENEFITS
8.1 Normal Retirement 31
8.2 Disability Retirement 31
8.3 Death 31
8.4 Other Termination of Employment 34
8.5 Election of Former Vesting Schedule 35
8.6 Forfeitures 36
(iv)
<PAGE>
ARTICLE 9 -- DISTRIBUTION OF BENEFITS
Page
----
9.1 Payment Upon Retirement, Disability,
or Termination of Employment 38
9.2 Payment Upon Death 38
9.3 Amount of Distribution 38
9.4 Consent to Distributions Before Age 70-1/2 38
9.5 Latest Commencement of Benefits 39
9.6 Forms of Distribution 41
9.7 Notice to Trustee 42
9.8 Direct Rollovers 43
ARTICLE 10 -- IN-SERVICE WITHDRAWALS
10.1 Hardship Withdrawals 45
10.1A Age 59-1/2 Withdrawals 47
10.2 Subsequent Distributions 48
ARTICLE 11 -- LOANS
11.1 Requests for Loans 49
11.2 Rules and Procedures 49
11.3 Maximum Amount of Loan 49
11.4 Note; Security; Interest 50
11.5 Repayment 51
11.6 Repayment Upon Distribution 51
11.7 Note as Trust Asset 52
11.8 Adjustment of Accounts 52
11.9 Nondiscrimination 52
(v)
<PAGE>
ARTICLE 12 -- TOP HEAVY PROVISIONS
Page
----
12.1 Special Contribution for Top Heavy Plan Years 54
12.2 Adjustment to Limitation on Annual Additions 54
12.3 Definitions 55
ARTICLE 13 -- AMENDMENT AND TERMINATION
13.1 Amendment 58
13.1A Certain Amendments Regarding Acquisitions
and Administrative Matters 59
13.2 Termination 59
13.3 Distributions Upon Termination of the Plan 60
13.4 Merger or Consolidation of Plan;
Transfer of Plan Assets 60
13.5 Participating Employer Ceasing to be
Affiliated With The Company 60
ARTICLE 14 -- ROLLOVER CONTRIBUTIONS
14.1 Transfer of Amount Distributed from
Another Qualified Plan 62
14.2 Transfer of Amount Distributed from
a Rollover IRA 63
14.3 Monitoring of Rollovers 64
14.4 Treatment of Transferred Amount Under the Plan 65
(vi)
<PAGE>
ARTICLE 15 -- MISCELLANEOUS
Page
----
15.1 Limitation of Rights 65
15.2 Nonalienability of Benefits 65
15.3 Information Between Plan Administrator
and Trustee 66
15.4 Payment Under Qualified Domestic
Relations Order 66
15.5 Payment of Benefit for Disabled or
Incapacitated Person 67
15.6 Telephonic and/or Electronic Transactions 68
15.7 Temporary Suspensions of Transactions 68
15.8 Governing Law 68
15.9 Acquisitions 68
</TABLE>
(vii)
<PAGE>
ARTICLE 1
INTRODUCTION
1.1 Amendment of Plan. Pursuant to the provisions of Article 13 of the
Liberty Financial Companies, Inc. Savings and Investment Plan and
Trust, Liberty Financial Companies, Inc., hereby amends, restates and
continues said Plan and Trust by striking out the present provisions
thereof and by substituting therefore the provisions of the Plan
hereinafter set forth. Except as otherwise specifically provided, the
changes contained herein are effective as of July 1, 1998; provided,
however, any changes required by the Tax Reform Act of 1986 or any
other applicable law are effective as of the dates required under
said laws.
1.2 Plan. This Plan is intended to qualify as a profit-sharing plan and
trust under Section 401(a) of the Internal Revenue Code of 1986
(without regard to current or accumulated profits pursuant to Section
401(a)(27) of the Code), and the cash or deferred arrangement and the
matching contribution features of the Plan are intended to qualify
under Sections 401(k) and 401(m), respectively, of the Code. Subject
to the provisions of Sections 5.8, no part of the corpus or income of
the Trust will be used for or diverted to purposes other than for the
exclusive benefit of each Participant and Beneficiary.
1.2.A. Plan Mergers. Effective July 1, 1998, the Stein, Roe & Farnham
Retirement Plan and the Keyport Life Insurance Company Savings and
Investment Plan are merged into and become a part of this Plan.
Effective September 1, 1998, the Colonial Profit Sharing Plan is
merged into and becomes a part of this Plan. Upon such merger the
accounts and investments maintained under such prior plans shall be
transferred to and held pursuant to the provisions of this Plan.
-1-
<PAGE>
1.3 Purpose of Plan. The purpose of the Plan is to provide retirement
income to Eligible Employees through a program of voluntary
tax-deferred contributions matched in part by supplemental
Participating Employer contributions, as well as discretionary
contributions made by Participating Employers.
1.4 Application of Prior Provisions of Plan. Except as otherwise
explicitly provided herein, the rights to benefits of persons who
were participants in the Plan before July 1, 1998 (September 1, 1998
in the case of the Colonial Profit Sharing Plan) and who are not
employed by the Employer on or after that date will be determined in
accordance with the provisions of the Plan as in effect from time to
time prior to that date.
-2-
<PAGE>
ARTICLE 2
DEFINITIONS
Whenever used herein, a pronoun or adjective in the masculine gender includes
the feminine gender, the singular includes the plural, and the following terms
have the following meanings unless a different meaning is clearly required by
context:
2.1 "Account" means, for each Participant, his After-Tax Contribution
Account, his Elective Contribution Account, his Matching Contribution
Account, his Discretionary Contribution Account, his Rollover
Account, and any other account the Plan Administrator determines is
necessary for the proper administration of the Plan.
2.2 "Affiliated Company" means any corporation, trust, association or
enterprise (other than the Company) which is:
(a) required to be considered, together with the Company, as one
employer pursuant to the provisions of Sections 414(b), 414(c),
414(m) or 414(o) of the Code; or
(b) which is designated an Affiliated Employer by the Company.
The term "Affiliated Company" shall not include any corporation or
unincorporated trade or business prior to the date on which such
corporation, trade or business satisfies the affiliation or control
tests of (a) above. In identifying "Affiliated Companies" for
purposes of Section 7.3, the definitions in Sections 414(b) and (c)
of the Code shall be modified as provided in Section 415(h) of the
Code.
-3-
<PAGE>
2.2.A. "After-Tax Contribution Account" means for any Participant the
Account maintained for a Participant with respect to any after-tax
contributions he may have made to the Plan (or a plan which has been
merged with this Plan) prior to July 1, 1998. After-tax contributions
are no longer permitted under this Plan.
2.3 "Annual Addition" means, in the case of any Participant, the sum for
any Limitation Year of all Elective Contributions, Matching
Contributions and Discretionary Contributions, and forfeitures
credited to the Participant's Account for such year.
2.4 "Armed Forces Leave of Absence" means for the purpose of the Plan,
service in the Armed Forces of the United States for any period
prescribed under any applicable federal or state law during which the
Participant has reemployment rights with the Employer, provided that
the Participant shall have returned to the service of the Employer
within 90 days after final release from active duty or within such
longer period as may be prescribed by federal or state law then in
force.
2.5 "Beneficiary" means the person or persons entitled under Section 8.3
to receive benefits under the Plan upon the death of the Participant.
2.6 "Board of Directors" means the Board of Directors of the Company. The
Board of Directors may allocate and delegate its fiduciary
responsibilities, or may designate others to carry out its fiduciary
responsibilities, in accordance with Section 405 of ERISA.
2.7 "Break in Service" means a 12-consecutive-month period commencing on
an Employee's Service Termination Date (or anniversary thereof)
during which such individual does not complete an Hour of Service.
-4-
<PAGE>
2.8 "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section or subsection of the Code includes
reference to any comparable or succeeding provisions of any
legislation which amends, supplements or replaces such section or
subsection.
2.9 "Company" means Liberty Financial Companies, Inc., a Delaware
corporation, and any successor to all or a major portion of its
assets or business which assumes the obligations of the Company under
the Plan.
2.10 "Discretionary Contribution" means the contribution made by a
Participating Employer on behalf of a Participant under Section 5.5.
2.11 "Discretionary Contribution Account" means, for any Participant, the
account described in Section 7.1 to which Discretionary Contributions
for the Participant's benefit (and earnings attributable thereto) are
credited.
2.12 "Effective Date" means July 1, 1998, with respect to this amended and
restated Plan.
2.13 "Elective Contribution" means, in the case of any Participant, a
contribution made for the benefit of the Participant under Section
5.1.
2.14 "Elective Contribution Account" means, for any Participant, the
account described in Section 7.1 to which Elective Contributions for
the Participant's benefit (and earnings attributable thereto) are
credited.
-5-
<PAGE>
2.15 "Eligible Employee" means any Employee employed by a Participating
Employer except for a temporary employee (an employee hired to work
on a project or other matter for a period which is expected to last
less than 6 months), an intern, a co-op employee or an employee
residing in Puerto Rico.
2.16 "Employee" means any individual employed by the Employer. "Employee"
also includes any leased employee (as defined in Section 414(n) of
the Code) of the Employer, but solely for purposes of determining his
service for eligibility and vesting purposes and in applying the
limitations of Section 7.3. No leased employee may become a
Participant hereunder unless he becomes an Eligible Employee.
2.17 "Employer" means the Company and all Affiliated Companies.
2.18 "Employment Commencement Date" means the first date on which an
Employee performs an Hour of Service.
2.19 "Entry Date" means, with respect to each Employee each January 1 and
July 1.
2.20 "ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended and any successor statute or statutes of
similar import.
2.21 "Fiduciaries" means the Named Fiduciaries and any other party
designated as Fiduciaries by the Named Fiduciaries in accordance with
the powers described herein, but only with respect to the specific
responsibilities of each in connection with the Plan and Trust.
-6-
<PAGE>
2.22 "Highly Compensated Participant" means a Participant who is a Highly
Compensated Employee.
2.23 "Highly Compensated Employee" means an Employee who, for a Plan Year,
is a highly compensated employee within the meaning of Section 414(q)
of the Code.
2.24 "Hour of Service" means each hour for which the Employee is directly
or indirectly paid, or entitled to payment, for the performance of
duties for the Employer, each such hour to be credited to the
Employee for the Computation Period in which the duties were
performed. In any event, Hours of Service shall be credited hereunder
in accordance with Section 2530.200(b)-2 of the Department of Labor
Regulations which are incorporated herein by reference.
2.25 "Limitation Year" means the calendar year.
2.26 "Matching Contribution" means, in the case of any Participant, any
contribution made for the benefit of the Participant under Section
5.4.
2.27 "Matching Contribution Account" means, for any Participant, the
account described in Section 7.1 to which Matching Contributions for
the Participant's benefit (and earnings attributable thereto) are
credited.
2.28 "Maternity/Paternity Leave of Absence" means a period of absence from
an Employer that begins for any of the following reasons:
(a) the Employee's pregnancy;
(b) birth of the Employee's child;
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(c) placement of a child with the Employee in connection with the
adoption of such child by the Employee; or
(d) the caring for such child for a period beginning immediately
following such birth or placement; provided, however, that in
order for an Employee's absence to qualify as a Maternity/
Paternity Leave of Absence, the Plan Administrator may require
the Employee to furnish such information (in such form and at
such time as it may reasonably require) establishing that the
absence from work is an absence described hereunder.
2.29 "Named Fiduciaries" means the Plan Administrator, Trustee, and the
investment committee if appointed pursuant to Section 6.1.
2.30 "Normal Retirement Date" means the date on which the Participant
attains age 65.
2.31 "Participant" means each Eligible Employee who participates in the
Plan in accordance with Article 4 hereof.
2.32 "Participating Employer" means the Company and any other Affiliated
Company which adopts the Plan with the approval of the Company. The
Participating Employers as of July 1, 1998 are identified as
signatories of this document at the end hereof.
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<PAGE>
2.33 "Plan" means the Liberty Financial Companies, Inc. Savings and
Investment Plan set forth herein, together with any and all
amendments and supplements hereto.
2.34 "Plan Administrator" means the committee appointed by the Board of
Directors to administer the Plans maintained hereunder, and shall
have the authority provided in Article 3.
2.35 "Plan Year" shall mean the calendar year.
2.36 "Qualified Domestic Relations Order" means any judgment, decree or
order (including approval of a property settlement agreement) which
(a) relates to the provision of child support, alimony payments, or
marital property rights to a spouse, former spouse, child or
other dependent of a Participant;
(b) is made pursuant to a state domestic relations law (including a
community property law); and
(c) constitutes a "qualified domestic relations order" within the
meaning of Section 414(p) of the Code.
2.37 "Rollover Account" means, for any Employee, an account to which cash
is transferred pursuant to Section 14.1 or 14.2.
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<PAGE>
2.38 "Share of the Trust Fund" means, in the case of each Participant,
that portion of the Trust's assets which is allocated to the Accounts
of the Participant in accordance with Article 7 of the Plan.
2.38A "Service Termination Date" means the earliest of the following:
(a) the date on which the Employee resigns, is discharged or is
terminated, or retires from employment with the Employer;
(b) the date the Employee dies;
(c) the first anniversary of the date on which the Employee starts
an authorized leave of absence or is absent for any other reason
other than a Maternity/Paternity Leave of Absence; and
(d) the second anniversary of the date on which the Employee
commenced a Maternity/Paternity Leave of Absence, if such
Employee has not yet returned to work with the Employer.
2.39 "Total Compensation" means, in the case of each Employee and for each
Plan Year, base pay, performance-based bonuses and incentives,
commissions, overrides, overtime pay, vacation pay, and sick pay
(i.e., salary continuation) received by the Employee from the
Employer during the Plan Year for services rendered during such Year,
plus any amounts that would have been received by the Employee from
the Employer during the Plan Year except for any compensation
reduction authorization described in Section 5.2 or any other
election under Section 125, 401(k), 402(h), or 403(b) of the Code.
"Total Compensation" does not include any other form of cash,
property or "imputed" income provided by the Employer to the
Employee, including without limitation the following: Employer
contribu-
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tions under this Plan or any other employee benefit plan, fund,
program or arrangement, whether now or hereafter established; moving,
automobile or other expense reimbursements or allowances; severance
pay; trip awards, personal use of company car, group term life
insurance, or other imputed compensation; sign on or stay bonuses;
long term incentive bonuses; employee referral fees or other cash
awards; tuition aid; outplacement services or other layoff benefits;
employee gifts or other property; generally, any amounts received
after termination of employment which the plan administrator
determines are not payment for the performance of services; and other
items not includable as compensation under Treasury Regulation
Section 1.415-2(d)(2). In no event shall an Employee's Total
Compensation in any Plan Year exceed, for purposes of this Plan,
$160,000 or such larger amount as the Secretary of the Treasury may
determine for such Plan Year under Section 401(a)(17) of the Code.
2.40 "Trust" means the trust established between the Company and Trustees.
2.41 "Trust Fund" means the property held in trust by the Trustee for the
benefit of Participants, former Participants and their Beneficiaries.
2.42 "Trustee" or "Trustees" means the persons who have executed this
Trust as Trustee and any successor trustee or trustees, and any
additional trustee or trustees.
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2.43 "Valuation Date" means the last business day of each Plan Year and
such other day or days as may be specified by the Plan Administrator.
2.44 "Year of Service for Vesting" means with respect to any Employee, all
periods of employment with the Employer, whether or not consecutive,
measured from the Employee's Employment Commencement Date and ending
on his Service Termination Date. Years of Service for Vesting shall
also include the period following his Service Termination Date,
provided he is reemployed by the Employer prior to incurring a Break
in Service.
This Section shall be subject to the reinstatement of service
provision of Section 8.6(b).
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ARTICLE 3
ADMINISTRATION
3.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration. The Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically
given or delegated to them under the Plan or the Trust. The
Participating Employers shall have the sole responsibility for making
the contributions under the Plan as specified in Article 5, and the
Company shall have the sole authority to appoint and remove the Plan
Administrator, any Trustee or Trustees, and any investment manager
which may be provided for under the Trust, and to amend or terminate,
in whole or in part, the Plan or the Trust. The Plan Administrator
shall have the sole responsibility for the administration of the
Plan, which responsibility is specifically described in the Plan and
the Trust. The Trustee shall have the responsibilities as
specifically provided in the Trust. Each Fiduciary warrants that any
directions given, information furnished, or action taken by it shall
be in accordance with the provisions of the Plan or the Trust, as the
case may be, authorizing or providing for such direction, information
or action. Furthermore, each Fiduciary may rely upon any direction,
information or action of another Fiduciary as being proper under the
Plan or the Trust, and is not required under the Plan or the Trust to
inquire into the propriety of any direction, information or action.
It is intended under the Plan and the Trust that each Fiduciary shall
be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan and the Trust and
shall not be responsible for any act or failure to act of another
Fiduciary. No Fiduciary guarantees the Trust in any manner against
investment loss or depreciation in asset value.
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<PAGE>
3.2 Administration. The Plan shall be administered by the Plan
Administrator, which may appoint or employ persons to assist in the
administration of the Plan and may appoint or employ any other agents
it deems advisable, including legal counsel, actuaries, auditors,
bookkeepers and recordkeepers to serve at the Plan Administrator's
direction. All usual and reasonable expenses of the Plan and the Plan
Administrator may be paid in whole or in part by the Company, and any
expenses not paid by the Company shall be paid by the Trustee out of
the Trust Fund.
3.3 Claims Procedure. The Plan Administrator, or a party designated by
the Plan Administrator, shall make all determinations as to the right
of any person to a distribution under the Plan. If a request for a
Plan distribution by a Participant or Beneficiary is wholly or
partially denied, the Plan Administrator, or the designated party,
will provide such claimant a comprehensible written notice setting
forth:
(a) the specific reason or reasons for such denial;
(b) specific reference to pertinent Plan provisions on which the
denial is based;
(c) a description of any additional material or information
necessary for the claimant to submit to perfect the claim and an
explanation of why such material or information is necessary;
and
(d) a description of the Plan's claim review procedure and the fact
that the review procedure is available upon written request by
the claimant to the Plan Administrator, or the designated party,
within 60 days after receipt by the claimant of written notice
of the denial of the claim, and includes the right to examine
pertinent documents and submit issues and comments in writing to
the Plan Administrator or the designated party.
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<PAGE>
Such written notice will be given within 90 days after the claim is
received by the Plan Administrator (or within 180 days, if special
circumstances require an extension of time for processing the claim,
and if written notice of such extension and circumstances is given to
the claimant within the initial 90-day period). If such notification
is not given within such period, the claim will be considered denied
as of the first day of such period and such person may request a
review of his claim. The decision on review will be made within 60
days after receipt of the request for review, unless circumstances
warrant an extension of time not to exceed an additional 60 days (and
unless written notice of such extension and circumstances is given to
the claimant within the initial 60-day period), and shall be in
writing and drafted in a manner calculated to be understood by the
claimant, and include specific reasons for the decision with
references to the specific Plan provisions on which the decision is
based.
3.4 Records and Reports. The Plan Administrator shall exercise such
authority and responsibility as it deems appropriate in order to
comply with ERISA and government regulations issued thereunder
relating to records of Participants' service and benefits;
notifications to Participants; reports to, or registration with, the
Internal Revenue Service; reports to the Department of Labor; and
such other documents and reports as may be required by ERISA.
3.5 Other Administrative Powers and Duties. The Plan Administrator shall
have such powers and duties, in addition to those powers and duties
set forth elsewhere herein, as may be necessary to discharge its
functions hereunder, including the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment
of any distributions
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<PAGE>
hereunder to the fullest extent provided by law; any
interpretations or decisions so made will be conclusive and
binding on all persons having an interest in the Plan;
(b) to prescribe procedures to be followed by Participants or
Beneficiaries requesting distributions or withdrawals;
(c) to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information
explaining the Plan, which shall include providing Participants
not less frequently than annually with periodic statements of
their accounts;
(d) to receive from Employees and agents such information as shall
be necessary for the proper administration of the Plan;
(e) to receive, review and keep on file (as it deems convenient or
proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust from the Trustee; and
(f) to designate or employ persons to carry out any of the Plan
Administrator's fiduciary duties or responsibilities under the
Plan.
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<PAGE>
3.6 Rules and Decisions. The Plan Administrator may adopt such rules,
regulations and procedures as it deems necessary, desirable or
appropriate. All decisions of the Plan Administrator shall be
uniformly and consistently applied to all Participants in similar
circumstances. When making a determination or calculation, the Plan
Administrator shall be entitled to rely upon information furnished by
a Participant or Beneficiary, the legal counsel of the Plan
Administrator, an Employer or the Trustee.
3.7 Reliance on Tables, etc. In administering the Plan, the Plan
Administrator will be entitled, to the extent permitted by law, to
rely conclusively on all tables, valuations, certificates, opinions
and reports which are furnished by any accountant, trustee, counsel
or other expert who is employed or engaged by the Plan Administrator
or by the Company on the Plan Administrator's behalf.
3.8 Procedures. The Plan Administrator shall keep all necessary records
and forward all necessary communications to the Trustee.
3.9 Authorization of Withdrawals and Distributions. The Plan
Administrator or its agent shall issue and/or approve directions,
instructions and/or procedures to the Trustee concerning all
withdrawals and distributions which are to be made from the Trust
pursuant to the provisions of the Plan, and shall warrant that all
such directions are in accordance with the Plan.
3.10 Rules and Procedures for Withdrawals and Distributions. The Plan
Administrator may require a Participant request a withdrawal or
distribution pursuant to rules and procedures it may establish from
time to time. The Plan Administrator may rely upon all such
information so furnished it, including the Participant's current
mailing address.
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3.11 Indemnification of Plan Administrator. The Company agrees to
indemnify and to defend to the fullest extent permitted by law any
Employee serving as Plan Administrator (including any Employee who
formerly served as a Plan Administrator) against all liabilities,
damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claims approved by the Company) occasioned
by an act or omission to act in connection with the Plan, if such act
or omission is in good faith.
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ARTICLE 4
PARTICIPATION
4.1 Participation. Each person who was a Participant in the Liberty
Financial Companies, Inc. or the Keyport Life Insurance Company
Savings Plan and Trust as of June 30, 1998, will continue to be a
Participant on July 1, 1998. Any other Employee will become a
Participant on the Entry Date next following his date of hire
provided that he is an Eligible Employee on such Entry Date.
4.2 Cessation of Participation. A Participant will cease to be a
Participant as of the earlier of
(a) the date on which he ceases to be an Eligible Employee; or
(b) the date on which the Plan terminates.
4.3 Breaks in Service.
(a) If an Employee who has ceased to be a Participant pursuant to
Section 4.2 again becomes an Eligible Employee, he will
immediately become a Participant in the Plan.
(b) If an Employee who was not a Participant and who terminates
employment with the Company and all Affiliated Companies again
becomes an Employee, he shall become a Participant on the Entry
Date next following his Date of Hire.
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ARTICLE 5
CONTRIBUTIONS
5.1 Elective Contributions. On behalf of each Participant for whom there
is in effect, for any pay period, a compensation reduction
authorization described in Section 5.2, and who is receiving Total
Compensation from a Participating Employer during such pay period,
such Participating Employer will contribute to the Trust, as an
Elective Contribution, an amount equal to the amount by which such
Total Compensation was reduced pursuant to the compensation reduction
authorization.
5.2 Compensation Reduction Authorizations. For purposes of Section 5.1, a
"compensation reduction authorization" is an authorization from an
Eligible Employee to a Participating Employer which satisfies the
requirements of this Section 5.2. Each such authorization shall
provide that the Participant's Total Compensation from the
Participating Employer will be reduced by a number of whole
percentage points between 1% and 19%, inclusive, elected by the
Participant, and that the Participating Employer will contribute such
amount to the Trust as an Elective Contribution on behalf of such
Participant. Each such authorization shall be made pursuant to
procedures prescribed or approved by the Plan Administrator and shall
be irrevocable while the authorization is in effect.
5.3 Revocation or Change of Compensation Deductions. A Participant may
change or revoke his compensation reduction authorization effective
as of any pay period. A Participant who has revoked his compensation
reduction authorization may reinstate his prior reduction
authorization as of any subsequent pay period. Any such revocation,
change or reinstatement shall be made pursuant to procedures
prescribed or approved by the Plan Administrator.
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5.4 Matching Contributions. For each pay period, each Participating
Employer will contribute to the Trust, for the benefit of each
Participant employed by the Participating Employer (including a
former Participant who ceased to be a Participant during the month),
a Matching Contribution equal to 75 percent of such portion of the
Participant's Elective Contributions for the pay period as does not
exceed six percent of the Participant's Total Compensation for the
pay period from the Participating Employer.
5.5 Discretionary Contributions. For each Plan Year each Participating
Employer will contribute to the Trust such amount of Discretionary
Contributions, if any, as it determines. Except as hereafter
provided, as of the last business day of each Plan Year, each
Participating Employer's Discretionary Contribution for such year
will be allocated among and credited to the Discretionary
Contribution Accounts of Participants who are employed by such
Participating Employer on the last day of such year in proportion to
their respective amounts of Total Compensation (only Total
Compensation while an Employee is a Participant and employed by a
Participating Employer shall be counted for this purpose) paid by
such Participating Employer for such Plan Year. A Participant who
retires on or after age 65, becomes disabled, or dies while employed
during a Plan Year shall be considered as if still employed on the
last day of the Plan Year.
5.6 Treatment of Forfeitures. If a Participant forfeits any part of his
interest in the Trust Fund under Section 8.6, the amount of the
forfeiture will be applied as soon as reasonably practical (at least
annually) to reduce the Matching Contributions required to be made to
the Plan under Section 5.4. Forfeitures shall be maintained and
applied separately with respect to each Participating Employer
pursuant to procedures established by the Plan Administrator.
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<PAGE>
5.7 Maximum Amount of Contributions. In no event will the sum of the
contributions under Sections 5.1, 5.4 and 5.5 for any Plan Year be in
an amount which would cause the Annual Addition for any Participant
to exceed the amount permitted under Section 415 of the Code, nor
will the sum of the contributions under Sections 5.1, 5.4 and 5.5
exceed the maximum amount deductible under Section 404 of the Code.
Participating Employer contributions under the Plan are hereby
conditioned on their deductibility under Section 404 of the Code. The
Elective Contributions made for a Participant for any Plan Year may
not exceed the limit as may be in effect for the Plan Year under
Section 402(g)(1) of the Code, reduced by any other elective
deferrals (as defined in Section 402(g)(3) of the Code) of the
Participant through the Employer for the Plan Year.
5.8 Return of Contributions. If a contribution by a Participating
Employer to the Trust is
(a) made by reason of a good faith mistake of fact, or
(b) is conditioned upon its deductibility under Section 404 of the
Code, and the deduction is disallowed,
the Trustee shall, upon request by the Participating Employer, return
to the Participating Employer the excess of the amount contributed
over the amount, if any, that would have been contributed had there
not occurred a mistake of fact or a mistake in determining the
deduction. In no event shall the return of a contribution hereunder
cause any Participant's Share of the Trust Fund to be reduced to less
than it would have been had the mistaken or nondeductible amount not
been
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contributed. No return of a contribution hereunder shall be made more
than one year after the mistaken payment of the contribution, or
disallowance of the deduction, as the case may be.
5.9 Nondiscrimination Requirements.
Elective Contributions, Matching Contributions, and QNECs for any
Plan Year must satisfy the nondiscrimination requirements set forth
in Sections 401(k)(3) and 401(m)(9) of the Code, Treasury Regulations
1.401(k)-1(b) and 1.401(m)-2, and any applicable successor to such
Sections and/or Regulations. For this purpose the so-called prior
year/look back year method shall be used.
5.10 Adjustments by Plan Administrator.
(a) Notwithstanding any provision of the Plan to the contrary, the
Plan Administrator may, in its sole discretion, decrease the
amount of the future Elective Contributions to be made for the
benefit of any Highly Compensated Employee, and pay the amount
of the decrease to the Employee in cash, if the Plan
Administrator deems such a decrease to be necessary in order to
satisfy either the nondiscrimination requirements of Section 5.9
or the limitations described in Section 5.7, or both. If the
Plan Administrator decreases any Elective Contributions in order
to meet the nondiscrimination requirement of Section 5.9, such
decrease shall be made first in the Elective Contributions for
the Highly Compensated Employees whose Elective Contributions
are expected to be the highest dollar amount for the Plan Year
so that no reduction is made in the Elective Contributions for
any Highly Compensated Employee as long as any other Highly
Compensated Employee is expected to make a higher dollar
contribution for the Plan Year. Any decrease in the Elective
Contributions for a Participant will also be effective for
purposes of
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determining the amount of the Matching Contributions to be made
for the Participant's benefit under Section 5.4.
(b) Notwithstanding any provision of the Plan to the contrary, the
Plan Administrator may, in its sole discretion, decrease the
amount of Matching Contributions to be made for the benefit of
Highly Compensated Employees if the Plan Administrator deems
such decrease to be necessary in order to satisfy the
nondiscrimination requirements of Section 5.9. Any decrease in
Matching Contributions in order to satisfy Section 5.9 shall be
made first in the Matching Contributions for the Highly
Compensated Employees whose Matching Contributions for the Plan
Year are expected to be the highest dollar amounts, so that no
reduction is made in the Matching Contributions for any Highly
Compensated Employee as long as any other Highly Compensated
Employee is expected to have a higher dollar contribution for
the Plan Year.
5.11 Distribution of Excess Contributions. If, after all contributions for
a Plan Year have been made, the nondiscrimination requirements of
Section 5.9 have not been satisfied for the Plan Year, the Plan
Administrator shall, as soon as practicable (but in no event later
than the close of the following Plan Year), distribute the excess
contributions (adjusted for income or loss allocable to such excess)
to Highly Compensated Participants, in accordance with Sections
401(k)(8) and 401(m)(6) of the Code, to the extent necessary to
satisfy Section 5.9. If distributions must be made under this Section
5.11 in order to satisfy a nondiscrimination test in Section 5.9,
there shall be distributed first Elective Contributions together with
any Matching Contributions attributable to them (adjusted for income
or loss), and then Matching Contributions (adjusted for income or
loss).
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<PAGE>
5.12 Distribution of Excess Deferrals. If, on or before March 1 of any
year, a Participant notifies the Plan Administrator, in accordance
with Section 402(g)(2)(A) of the Code and regulations thereunder,
that all or part of the Elective Contributions made for his benefit
represent an excess deferral for the preceding taxable year of the
Participant, the Plan Administrator shall make every reasonable
effort to cause such excess deferral (adjusted for income or loss
allocable to such excess) to be distributed to the Participant no
later than the April 15 following such notification. Except to the
extent otherwise provided in regulations, any amount distributed
under this Section 5.12 shall be taken into account in applying
Sections 5.9, 5.10 and 5.11 as if it had not been distributed, except
that any distribution of excess Elective Contributions to a
Participant under Section 5.11 shall be reduced by the amount of any
distribution to the Participant under this Section 5.12.
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ARTICLE 6
TRUST FUND AND INVESTMENTS
6.1 Investment Funds Within the Trust Fund. All contributions to the
Trust and all investments thereunder shall be held by the Trustee in
the Trust Fund. The Trust Fund shall consist of such investment funds
as the Company, or investment advisor or manager appointed by the
Company, shall select, including, without limitation, fixed income
contracts with one or more insurance companies, shares of one or more
mutual funds, and common stock of the Company. The Company may name
an investment or similar committee which shall be responsible for
selecting the investment funds which will be offered hereunder from
time to time.
The separate investment funds made available within the Trust Fund
may be changed or modified from time to time by the Company, or by an
investment advisor or manager or investment committee appointed by
the Company. It is expressly permissible under the Plan for Trust
assets to be invested in "qualifying employer securities" as that
term is defined in Section 407(d)(5) of ERISA.
The Plan and Trust are intended to comply with Section 404(c) of
ERISA.
6.2 Selection of Investment Funds. Each Participant may select the
investment fund or funds for his future Contributions and Accounts
among the funds described in Section 6.1. Each such investment
election shall be made pursuant to investment election rules and
procedures established by the Plan Administrator.
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<PAGE>
Notwithstanding any provision of the Plan to the contrary, to the
extent permitted according to rules and procedures adopted by the
Plan Administrator, an investment election or change in investment
direction may be made by the telephone or other electronic means.
6.2.A. Certain Self-Managed Accounts. In conjunction with certain corporate
restructuring and acquisitions, the Company has agreed to permit
certain Participants to invest a portion of their Accounts in various
securities that are not generally offered under the Plan
(self-managed accounts). A Participant who is investing in a
self-managed account may continue to utilize such self-managed
account with respect to amounts held in such self-managed account but
may not add any other amounts to such account. If a Participant
transfers an amount from such account to one of the investment funds
offered under the Plan, such amount may not be transferred back to
the self-managed account.
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ARTICLE 7
PARTICIPANT ACCOUNTS AND LIMITATIONS ON ANNUAL ADDITIONS
7.1 Accounts. The Plan Administrator shall maintain or cause to be
maintained on its books for each Participant an Elective Contribution
Account, a Matching Contribution Account, a Discretionary
Contribution Account, and a Rollover Account as appropriate to
correspond to the types of contributions made by or on his behalf to
the Plan. The Plan Administrator shall also establish and maintain
such other accounts or subaccounts as it deems necessary or desirable
to carry out the provisions of the Plan, for example, to reflect any
amount which is repaid to the Plan on an after-tax basis pursuant to
Section 8.6(a).
7.2 Adjustment of Accounts. The Plan Administrator shall, as of each
Valuation Date, adjust or cause to be adjusted each Participant's
Account to reflect contributions, distributions, withdrawals,
investment transfers, participant loans and repayments on any such
loans, investment earnings, expenses, and any other debits or credits
to such Account since the last Valuation Date, including realized and
unrealized gains and losses determined on the basis of fair market
value.
7.3 Limitations. Notwithstanding any other provisions of the Plan:
(a) The Annual Addition to a Participant's accounts under the Plan
for any Limitation year, when added to the annual additions to
his accounts for such year under all other defined contribution
plans (if any) maintained by the Employer, shall not exceed the
lesser of (1) the maximum dollar limitation or (2) 25 percent of
the Participant's Taxable Compensation for such Limitation
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Year. For purposes of this Section, "maximum dollar limitation"
means $30,000 (or, if greater, one-fourth of the limitation in
effect for the Limitation Year under Section 414(b)(1)(A) of the
Code).
(b) In the case of a Participant who also participates in a defined
benefit plan maintained by the Employer, the Annual Addition for
a Limitation Year will, if necessary, be further limited so that
the sum of the Participant's "defined contribution plan
fraction" (as determined under Section 414(e) of the Code and
the regulations promulgated thereunder) and his "defined benefit
plan fraction" (as determined under Section 415(e) of the Code
and the regulations promulgated thereunder) for such Limitation
Year does not exceed 1.0.
(c) To the extent necessary to satisfy the limitations of this
Section 7.3 for any Participant, the Participant's benefit under
any and all defined benefit plans shall be reduced before his
Annual Addition under this Plan, and his Annual Addition under
this Plan shall be reduced before his Annual Addition under any
other defined contribution plan. The Plan Administrator may
limit the amount of Elective Contributions a Participant may
make hereunder during a Limitation Year so that his Annual
Addition for the Year shall not exceed the limit set forth in
(a) above. In the event a Participant's Annual Addition for a
Limitation Year exceeds the limit set forth in (a) above, the
Plan Administrator may establish a suspense account on behalf of
the Participant in an amount equal to such excess and the amount
in the suspense account shall be applied as a contribution due
on behalf of the Participant for the succeeding Limitation year.
In the event no contributions are due on behalf of the
Participant for the succeeding Limitation Year, or if the amount
in the
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suspense account exceeds the contributions which are due, the
balance in the suspense account shall be applied to reduce the
contributions due on behalf of other Participants and no
contributions shall be made to the Plan until the suspense
account is so applied. In lieu of establishing a suspense
account and applying it as above described, the Plan
Administrator may correct an excess Annual Addition on behalf of
a Participant for a Limitation year by distributing to such
Participant all or a portion of such Participant's Elective
Contribution for the Plan Year as necessary to correct such
excess.
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ARTICLE 8
RIGHTS TO BENEFITS
8.1 Normal Retirement. A Participant who attains his Normal Retirement
Date while an Employee, will have a fully vested and nonforfeitable
interest in his Share of the Trust Fund. Upon his retirement on or
after his Normal Retirement Date, the Participant's Share of the
Trust Fund will be distributed in accordance with Article 9 below.
8.2 Disability Retirement. A Participant may retire before his Normal
Retirement Date if he becomes eligible for disability benefits under
the Employer's long term disability plan. In the event of such a
disability retirement, the Participant will have a fully vested and
nonforfeitable interest in, and will be entitled to receive, his
Share of the Trust Fund. Distribution will be made in accordance with
Article 9 below.
8.3 Death.
(a) If a Participant or former Participant dies while employed by
the Company or an Affiliated Company before the distribution of
his Share of the Trust Fund has been made under Article 9, upon
his death his designated Beneficiary will have a fully vested
and nonforfeitable interest in, and will be entitled to receive,
the value of his Share of the Trust Fund. Distribution to the
Beneficiary will be made in accordance with Article 9.
(b) If the Participant was married at the time of death, he shall be
deemed to have designated his surviving spouse as his
Beneficiary unless:
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(1) prior to his death, he designated as his Beneficiary a
person other than his surviving spouse, such designation to
be made in writing at such time and in such manner as the
Plan Administrator shall approve or prescribe; and
(2) either
(A) his surviving spouse consents in writing to the
designation described in (1) above, such consent
acknowledges the effect of such designation and the
specific non-spouse Beneficiary (including any class
of Beneficiaries or any contingent Beneficiaries) or
authorizes the Participant to designate Beneficiaries
without further consent, and such consent is witnessed
by a Plan representative or a notary public, or
(B) it is established to the satisfaction of the Plan
Administrator that the consent required under (A)
above may not be obtained because there is no spouse,
because the spouse cannot be located, or because of
such other circumstances as the Secretary of the
Treasury may prescribe; and
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(3) the non-spouse Beneficiary designated in accordance with
the provisions of this Section survives the Participant.
Any consent by a spouse under (2)(A) above, or a determination
by the Plan Administrator with respect to such spouse under
(2)(B) above, shall be effective only with respect to such
spouse. Any such consent shall be irrevocable, but shall be
effective only with respect to the specific Beneficiary
designation unless the consent expressly permits designations by
the Participant without any requirement of further consent. Any
consent that permits Beneficiary designati ons by the
Participant without any requirement of further consent must
acknowledge the spouse's right to limit consent to a specific
Beneficiary and the spouse's voluntary election to relinquish
such right.
(c) A Participant who is not married may designate a Beneficiary
in writing at such time and in such manner as the Plan
Administrator shall approve or prescribe.
(d) A Participant who has designated a Beneficiary in accordance
with this Section 8.3 may change such designation at any time by
giving written notice to the Plan Administrator, subject to the
conditions of this Section 8.3 and such additional conditions
and requirements as the Plan Administrator may prescribe in
accordance with applicable law.
(e) If a Participant dies without a surviving Beneficiary, the full
amount payable upon his death will be paid to his issue per
stirpes. If any of such issue is a minor, at the direction of
the Plan Administrator, the Trustee may deposit his share in a
savings account to his credit in a savings bank or other
financial
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institution for the benefit of such issue. If there are no
surviving issue, then the amount may be paid to his executor or
administrator or applied to the payment of his debts and funeral
expenses, all as the Plan Administrator shall determine.
8.4 Other Termination of Employment. If a Participant separates from the
service (within the meaning of Code Section 401(k)(2)(B)(i)(I)) of
the Employer for any reason other than retirement, disability or
death described in Section 8.1, 8.2 or 8.3, he will be entitled under
this Section 8.4 to a benefit equal to the sum of
(a) the balances of his Elective Contribution Account, that porion,
if any, of his Discretionary Contribution Account attributable
to qualified non-elective contributions which may have been made
under a predecessor to this Plan (QNEC) and Rollover Account, if
any, plus
(b) his vested portion, determined under the vesting schedule below,
of his Matching Contribution Account and his Discretionary
Contribution Account (other than that portion, if any,
attributable QNECs) determined as of the same Valuation Date.
The vested portion of a Participant's Matching Contribution
Account and Discretionary Contribution Account (other than
amounts attributable to QNECs) will be determined by multiplying
the balance of each such Account by the following percentage,
based upon the number of the Participant's Years of Service for
Vesting on the date his employment terminates:
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<PAGE>
<TABLE>
<CAPTION>
Years of Service for Vesting Percentage
- ---------------------------- ----------
<S> <C>
less than 2 0
2 25
3 50
4 75
5 or more 100
</TABLE>
Distribution of a benefit under this Section 8.4 will be made in
accordance with Article 9. A Participant shall be treated as having
separated from the service of the Employer if the Participant ceases
to be an Employee because of the disposition by a Participating
Employer of a subsidiary, or of substantially all the assets of a
trade or business, unless the organization acquiring the subsidiary
or trade or business maintains the Plan, as determined under Treasury
Regulation 1.401(k)-1(d)(4).
8.5 Election of Former Vesting Schedule. If the Plan is amended, and if
such amendment directly or indirectly affects the computation of the
nonforfeitable percentage of a Participant's right to his Account,
each Participant who has completed three Years of Service for Vesting
as of the end of the election period described below and whose
nonforfeitable percentage at any time after such amendment could be
less than such percentage determined without regard to such
amendment, may elect during such election period to have the
nonforfeitable percentage of his Account determined without regard to
such amendment. The election period referred to in the preceding
sentence will begin on the date such amendment is adopted and will
end on the latest of the following dates:
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(a) the date which is 60 days after the date on which such amendment
is adopted;
(b) the date which is 60 days after the date on which such amendment
becomes effective; or
(c) the date which is 60 days after the date on which the
Participant is issued written notice of such amendment by the
Plan Administrator.
An election under this Section 8.5 may be made only by an individual
who is a Participant at the time such election is made and once made
shall be irrevocable.
8.6 Forfeitures.
(a) If a Participant separates from the service of the Employer at a
time when he has less than a 100 percent nonforfeitable interest
in his Matching Contribution Account or his Discretionary
Contribution Account, any portion of his Matching Contribution
Account or Discretionary Contribution Account not payable to him
under Section 8.4 will be forfeited on the date the Participant
receives a distribution of the vested portion of his Account or
the date the Participant incurs a Break in Service. Any such
forfeitures shall be applied as described in Section 5.6. If a
Participant who has incurred such a forfeiture resumes
employment with an Employer prior to incurring five consecutive
Breaks in Service, the Company shall contribute to the Trust and
credit to the Participant's Matching Contribution Account and/or
Discretionary Contribution Account an amount equal to the amount
previously forfeited if, within 5 years after the date on which
the Participant resumes employment, he repays to the Plan the
amount previously distributed to him, without interest.
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(b) In the event a Participant terminates employment with the
Company or an Affiliated Company, his years of Service for
Vesting shall be reinstated if, and only if, (i) he was fully or
partially vested in Employer Contributions when he terminated
employment, or (ii) if he was not fully or partially vested in
Employer Contributions, he returns to employment before he
incurs five consecutive Breaks in Service.
(c) In the event a Participant makes a withdrawal from his Account
attributable to Employer Contributions before he is fully vested
in such Contributions, his vested interest in his remaining
Account at any time before he is 100% vested in such Account
shall be determined according to the following formula:
X = P (AB + D) - D
where P is the Participant's vesting percentage at the time his
vested interest is being determined, AB is the balance of his
Account attributable to Employer Contributions, and D is the
amount of the withdrawal.
(d) For the purpose of determining an Employee's vesting percentage,
years of employment with the Company and any Affiliated Company
will be taken into consideration.
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ARTICLE 9
DISTRIBUTION OF BENEFITS
9.1 Payment Upon Retirement, Disability, or Termination of Employment. If
a Participant's Share of the Trust Fund becomes payable under Section
8.1, 8.2, or 8.4, distribution of such Share will be made in a form
determined under Section 9.6, as soon as reasonably practicable after
retirement, disability, or termination of employment, subject in each
case to Sections 9.4, 9.5, and 9.6 below.
9.2 Payment Upon Death. If a Participant's Share of the Trust Fund
becomes payable under Section 8.3, distribution of such Share will be
made in a single payment as soon as reasonably practicable after the
date of the Participant's death, and in no event later than the end
of the calendar year in which occurs the fifth anniversary of the
Participant's death.
9.3 Amount of Distribution. The amount of any distribution will not be
more than the amount of the Participant's vested Account as of the
most recent Valuation Date preceding the date of the distribution, or
such other Valuation Date that conforms to the Plan's regular
distribution practices.
9.4 Consent to Distributions Before Age 70-1/2. No distribution shall be
made to any Participant before he reaches age 70-1/2 unless:
(a) the Participant's prior written consent to the distribution has
been obtained by the Plan Administrator, or
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(b) the value of the vested and nonforfeitable portion of the
Participant's Share of the Trust Fund, determined as of the
Valuation Date coinciding with or next preceding the date of the
distribution, does not exceed $5,000.
If the Participant's consent is required under this Section 9.4 but
is not provided prior to the time distribution is to be made or
commence under Section 9.1, distribution shall be made the earliest
of: (1) the April 1 following the year the Participant attains age
70-1/2, (2) as soon as practicable after the Plan Administrator is
notified of the Participant's death, or (3) as soon as practicable
after the date the Plan Administrator receives from the Participant
and records a request for distribution.
9.5 Latest Commencement of Benefits.
(a) Unless otherwise elected in accordance with the following
paragraph, in no case will distributions of any Participant's
Share of the Trust Fund commence later than the 60th day after
the latest of the following:
(i) the close of the Plan Year in which occurs the date on
which the Participant attains age 65;
(ii) the close of the Plan Year in which occurs the tenth
anniversary of the year in which the Participant
commenced participation in the Plan; or
(iii) the close of the Plan Year in which the Participant's
service with the Employer terminates.
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Subject to Section 401(a)(9) of the Code, a Participant who is
entitled to a distribution of his Share pursuant to the
provisions of this Article may elect, in accordance with
procedures adopted by the Plan Administrator, to defer payment
of such Share but not beyond the April 1 following the Plan Year
in which he attains age 70-1/2. The distribution of such Share
for any Participant who makes such an election will be made in a
single lump sum payment (unless otherwise provided under Section
9.6) as soon as reasonably practicable after the Valuation Date
coinciding with or immediately following the commencement date
elected by such Participant.
(b) In any event, and notwithstanding any election or provision of
this Plan to the contrary, distribution of a Participant's
Account shall be made not later than the April 1 following the
close of the calendar year in which he attains age 70-1/2,
provided that if a Participant is still an Employee at the time
distributions are required to commence under this Section
9.5(b), and the Participant is not a 5% or more owner of the
Company, distributions shall be made as soon as practicable
after the Participant terminates employment.
(c) If a Participant dies on or after the applicable date described
in (b) above and before distribution of his benefit has been
completed, the remaining portion of his benefit will be
distributed to his Beneficiary at least as rapidly as under the
method of distribution under which the Participant was receiving
his benefit as of the date of his death.
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(d) All distributions under the Plan shall be made in a manner
consistent with Section 401(a)(9) of the Code and regulations
thereunder.
(e) For purposes of this Section 9.5, life expectancies shall not be
recalculated under Section 401(a)(9)(D) of the Code.
9.6 Forms of Distribution.
(a) In General. Subject to Sections 9.6(b) and (c) below, and the
minimum distribution rules under Code Section 401(a)(9), a
Participant or Beneficiary may elect to receive the amounts
payable to him under the Plan in the following form or forms:
(i) a single payment in cash or in kind or a combination
thereof;
(ii) in the case of a Participant who became a Participant in
the Plan prior to January 1, 1989, by the purchase and
distribution of a non-transferable annuity contract
providing for payments (A) as a single life annuity or
(B) in the case of a married Participant only, as a 50
percent joint and survivor annuity providing for payments
to the Participant for the remainder of his life and
thereafter to his spouse for the spouse's life in an
amount equal to 50 percent of the amount of the benefit
then being paid to the Participant determined as of the
first of the month in which the Participant dies; or
(iii) A combination of (i) and (ii).
A Participant may elect a partial rather than a full
distribution provided that no more than one partial
distribution may be made in a
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calendar year and any such partial distribution shall not
be less than $1,000. In any event, a terminated
Participant's Account shall be distributed no later than
the April 1 following the close of the calendar year in
which he attains age 70-1/2.
(b) Special Rule for Certain Married Participants. If a married
Participant at any time elects the purchase and distribution of
an annuity contract, the survivor annuity requirements of Code
Sections 401(a)(11) and 417 will always thereafter apply to all
of the Participant's benefits under this Plan, and the Plan
shall satisfy the applicable written explanation, consent,
election and withdrawal rules of such Code sections and the
regulations thereunder, including payment of benefits in the
form of a qualified joint and survivor annuity unless such
annuity is waived and such waiver is properly consented to by
the Participant's spouse within 90 days of the Participant's
annuity starting date.
(c) Special Rule for Certain Small Benefits. If the total amount
payable before any distribution has commenced with respect to a
Participant (whether or not he is a married Participant) does
not exceed $5,000, such amount will be paid in a single payment
in cash.
(d) A Participant (with his spouse's consent if married) may waive
the 30-day pre-notification requirement as described in Section
417 of the Code.
9.7 Notice to Trustee. The Plan Administrator will notify the Trustee, or
its delegate, whenever any Participant or Beneficiary is entitled to
receive a distribution under the Plan. In giving such notice, the
Plan Administrator will specify the name and last known address of
the person receiving such distribution. Upon receipt of such
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notice from the Plan Administrator, the Trustee, or its delegate,
will, as soon as is reasonably practicable, distribute such amount.
9.8 Direct Rollovers. Notwithstanding any provision of the Plan to the
contrary, a `distributee' may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
`eligible rollover distribution' paid directly to an `eligible
retirement plan' specified by the distributee as a `direct rollover'.
The Administrator may require evidence that the Plan to which the
rollover is intended to be made is, in fact an `eligible retirement
plan'. The Plan Administrator is not required to make wire transfers
nor to make direct rollovers to more than one eligible retirement
plan on behalf of a distributee.
The following definitions shall apply for purposes of this Section
9.8:
(a) an `eligible rollover distribution' is any distribution of all
or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life expectancy (or life expectancies) of the distributee or
the joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined with regard to the exclusion for net
unrealized appreciation with respect to employer securities);
(b) an `eligible retirement plan' is an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
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accepts that distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity;
(c) a `distributee' includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the spouse
or former spouse.
(d) a `direct rollover' is a payment by the Plan to the eligible
retirement plan specified by the distributee.
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ARTICLE 10
IN-SERVICE WITHDRAWALS
10.1 Hardship Withdrawals. A Participant who suffers a financial hardship,
as defined in this Section, may request a withdrawal from (1) the
vested portion of his Matching Contribution Account, (2) the vested
portion of his Discretionary Contribution Account, (3) his Rollover
Account, if any, and (4) his Elective Contribution Account (other
than that portion of his Elective Contribution Account which is
attributable to income credited after December 31, 1988). Such a
request shall be made by written notice to the Plan Administrator
setting forth the nature and amount of the hardship need and
documentary evidence thereof. Upon receipt and recording of such a
request, the Plan Administrator shall determine whether a financial
hardship exists; if the Plan Administrator determines that such a
hardship does exist, it shall further determine what portion of the
amount requested by the Participant is required to meet the need
created by the hardship, and shall direct the Trustee to distribute
to the Participant in a single lump sum payment the amount so
determined. A hardship withdrawal shall be permitted under this
Section only in the event of a financial need arising from
(I) unreimbursed major medical expenses (described in Section 213(d)
of the Code) for which payment is necessary in advance in order
to obtain medical services for the Participant or his spouse or
dependent or for such medical expenses already incurred by the
Participant or his spouse or dependent,
(II) the purchase of a principal residence for the Participant
(excluding mortgage payments),
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(III) payment of tuition and related educational fees for the next 12
months, semester or quarter of post-secondary education for the
Participant or his spouse, children, or dependents, or
(IV) the need to prevent eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
For purposes of this Section, the term "dependent" shall have the
meaning assigned to it by Section 152 of the Code.
No distribution shall be made under this Section in excess of the
amount of the Participant's immediate and heavy financial need plus
any amounts necessary to pay any income taxes or penalties reasonably
expected to result from the distribution. In addition, no such
distribution shall be made unless the Participant has obtained all
distributions (other than hardship distributions) and all loans
currently available under all plans maintained by the Employer. In
the event a Participant receives a distribution under this Section,
(A) No Elective Contributions shall be made for the Participant's
benefit for the 12 calendar months following the Valuation Date
coinciding with or next following the hardship withdrawal;
(B) No elective contributions or employee contributions shall be
made for such 12 month period to any other qualified or
nonqualified plan of deferred compensation maintained by the
Employer, including stock option or stock purchase plans; and
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(C) The Elective Contributions for the Participant's benefit
(together with any elective contributions under other qualified
retirement plans maintained by the Employer) for the calendar
year following the year of the hardship withdrawal may not
exceed the limit of Section 402(g)(1) of the Code applicable to
the such following calendar year reduced by the amount of the
Participant's Elective Contributions made during the year of the
hardship withdrawal. In the event any Account from which a
Participant's hardship withdrawal is made is invested in more
than one of the separate investment funds maintained under the
Plan, a withdrawal of less than the complete balance of the
Account shall be withdrawn proportionately from each applicable
investment fund. Any withdrawal hereunder shall not exceed the
vested balance of the relevant Account or Accounts determined as
of the Valuation Date next following receipt from the
Participant and recording by the Plan Administrator of the
Participant's withdrawal request, reduced by the amount of any
indebtedness of the Participant to the Plan attributable to any
such Account, and shall be made to the Participant as soon as
practicable after such Valuation Date.
10.1A Age 59-1/2 Withdrawals. Notwithstanding Section 10.1, a Participant
who has attained age 59-1/2 may request a withdrawal (minimum $1,000)
from his vested Account for any reason in accordance with procedures
adopted by the Plan Administrator, but no more frequently than once
each calendar year. In the event any Account from which a
Participant's withdrawal is made is invested in more than one of the
separate investment funds maintained under the Plan, a withdrawal of
less than the complete balance of the Account shall be withdrawn
proportionately from each applicable investment fund.
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10.2 Subsequent Distributions. A withdrawal pursuant to this Article 10
will not affect the Participant's right to receive distribution of
the remaining portion of his Share of the Trust Fund pursuant to
Articles 8 and 9.
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ARTICLE 11
LOANS
11.1 Requests for Loans. Each Participant, and such other persons to whom
the opportunity to borrow from the Trust must be extended under
applicable law, may request a loan from the Trust, subject to the
conditions prescribed in this Article 11.
11.2 Rules and Procedures. The Plan Administrator shall determine the time
or times when loans shall be made available, and shall formulate such
rules and procedures as it deems appropriate relating to such loans.
Such rules and procedures shall be set forth in the summary plan
description in such detail as may be required under applicable
regulations. Such rules and procedures shall form part of the Plan.
No request for a loan will be accepted if the Participant then has
two loans outstanding. The Plan Administrator may charge a reasonable
loan fee for all loans taken under the Plan in accordance with such
uniform and nondiscriminatory procedures as it shall establish. Such
fee shall be deducted from the Participant's Account or loan proceeds
pursuant to uniform rules established by the Plan Administrator.
11.3 Maximum Amount of Loan. The amount of any loan, together with the
aggregate amount of principal and accrued interest owed by the
borrower with respect to any prior loans from qualified retirement
plans of the Employer, shall not exceed the lesser of:
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(a) $50,000, reduced by the excess of (1) the highest outstanding
loan balance of the borrower from such plans during the one year
period ending on the day before the loan is made, over (2) the
borrower's outstanding loan balance from such plans immediately
prior to the loan; or
(b) one-half of the borrower's nonforfeitable portion (determined
under Article 8) of the borrower's Share of the Trust Fund.
For purposes of this Section 11.3, the value of a borrower's Share of
the Trust Fund shall be determined as of the Valuation Date
coinciding with or next following receipt of the borrower's request
for a loan. The present value of the borrower's nonforfeitable
accrued benefit under any other plan shall be determined by the Plan
Administrator in such manner and as of such time as the Plan
Administrator decides. Notwithstanding the foregoing, no loan shall
be made hereunder for less than $1,000.
11.4 Note; Security; Interest. Each loan shall be evidenced by a note and
shall bear interest at a reasonable rate determined by the Plan
Administrator. The rate of interest shall be the prime rate of
interest of as published in the Wall Street Journal as of the first
day of the calendar quarter preceding the effective date of the loan.
The Committee shall review the rate of interest to determine if it is
consistent with commercial rates for similar loans, and if not, the
Committee shall have the authority to modify such rate of interest
for new loans to be consistent with such commercial rates. Each loan
must be secured by one-half of the borrower's Share of the Trust Fund
and by such other security, if any, as the Plan Administrator may
require. In no event, however, shall the Plan Administrator apply the
borrower's Share of the Trust Fund to satisfy the borrower's loan
obligation, whether or not
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the borrower is in default, unless and until that amount so applied
could be distributed or withdrawn in accordance with Article 8 or 9
of the Plan.
11.5 Repayment. Each such loan shall be repayable to the extent reasonably
possible by payroll deduction over a specified period of time, as
determined by the Plan Administrator, and on the basis of
substantially level payments made no less frequently than quarterly.
Such period of time shall not exceed five years (20 years if the loan
is used to acquire a dwelling unit which is to be used within a
reasonable time as a principal residence of the Participant). A
borrower may prepay all, but not less than all, of his loan at any
time, without penalty, by paying the loan principal then outstanding
together with interest accrued and unpaid to the date of payment.
11.6 Repayment Upon Distribution. If, as of the earlier of (i) 60 days
after termination of a borrower's employment with the Employer (or,
if later, 30 days after written demand for repayment) or (ii) the
time benefits are to be distributed to a borrower or his Beneficiary
under Article 9 of the Plan, there remains any unpaid balance of a
loan hereunder, such unpaid balance shall become immediately due and
payable in full. Such unpaid balance, together with any accrued but
unpaid interest on the loan, shall be deducted from the borrower's
Share of the Trust Fund before any such distribution of benefits is
made.
11.7 Note as Trust Asset. A note evidencing a loan to a Participant under
this Article 11 shall be an asset of the Trust which is allocated to
the account of the borrower, and shall for purposes of the Plan be
deemed to have a fair market value at any given time equal to the
unpaid balance of the note plus the amount of any accrued but unpaid
interest.
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11.8 Adjustment of Accounts. Loans will be made from the borrower's
Rollover Account (if any), Elective Contribution Account,
Discretionary Contribution Account (to the extent vested), and
Matching Contribution Account (to the extent vested), in that order,
the funds to be removed from the borrower's investment funds in
proportion to the vested balances therein. Repayments of loan
principal will be credited to the borrower's Accounts in the same
order as originally withdrawn. Payments of loan interest will be
prorated to such Accounts based on the relative loan principal
balances outstanding at the time of each such payment. Each payment
of principal and interest will be deposited into the various
investment funds according to the Participant's investment elections
respecting future contributions as soon as reasonably practicable
after such payment is made.
11.9 Nondiscrimination. Loans shall be made available to all Participants
and such other persons to whom the opportunity to borrow from the
Trust Fund must be extended under applicable law on a reasonably
equivalent basis, except that the Plan Administrator may make
reasonable distinctions based upon creditworthiness, other
obligations of the borrower, state law restrictions affecting payroll
deductions and other factors that may adversely affect the ability to
assure repayment through payroll deduction. The Plan Administrator
may reduce or refuse a requested loan where it determines that timely
repayment of the loan through payroll deduction is not assured.
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ARTICLE 12
TOP HEAVY PROVISIONS
12.1 Special Contribution for Top Heavy Plan Years.
(a) If for any top heavy plan year the sum of the Elective
Contributions, Matching Contributions and Discretionary
Contributions (if any) made for the benefit of any eligible
employee who is not a key employee for such year is exceeded by
three percent of such eligible employee's Taxable Compensation
for such year, the eligible employee's Participating Employer
shall contribute to the Trust, for his benefit, an additional
amount equal to such excess. However, if for such top heavy plan
year the highest percentage obtained by dividing the sum of the
Elective, Matching and Discretionary Contributions made for the
benefit of each key employee by the key employee's Taxable
Compensation is less than three percent, such percentage shall
be substituted for "three percent" in the preceding sentence.
Any additional contribution made for the benefit of an eligible
employee under this Section 12.1 shall be credited to his
Discretionary Contribution Account as soon as practicable after
the close of the Plan Year for which the contribution is made.
12.2 Adjustment to Limitation on Annual Additions. For any Limitation Year
which is a top heavy plan year, the adjustment described in Section
416(h) of the Code shall apply for purposes of determining a
Participant's "defined contribution plan fraction" and "defined
benefit plan fraction" under Section 7.3(b) unless:
(a) the Plan and each plan with which the Plan is required to be
aggregated pursuant to the first sentence of Section 12.4(c)(4)
satisfies the requirements of Section 416(h)(2)(A) of the Code;
and
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(b) the Plan Year would not be a top heavy plan year if "ninety
percent" were substituted for "sixty percent" in the first
paragraph of Section 12.4(c).
12.3 Definitions. For purposes of this Article,
(a) "eligible employee" means an Eligible Employee who has satisfied
the participation requirements of Section 4.1;
(b) "key employee" means a key employee described in Section
416(i)(1) of the Code, determined on the basis of Taxable
Compensation; and
(c) "top heavy plan year" means a Plan Year if the sum of the
present value of the total accrued benefits of all key employees
under each defined benefit plan (as of the applicable
determination date of each such plan) which is aggregated with
this Plan and the sum of the account balances of all key
employees under the Plan and under each other defined
contribution plan (as of the applicable determination date of
each such plan) which is aggregated with this Plan exceeds 60
percent of the sum of such amounts for all Employees or former
Employees (other than former key employees but including
beneficiaries of deceased former Employees) under such plans.
The following rules shall apply for purposes of this definition:
(1) The foregoing determination will be made in accordance with
the provisions of Section 416 of the Code, and the
regulations promulgated thereunder, which are specifically
incorporated herein by reference.
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<PAGE>
(2) "Determination date" means, with respect to the initial
plan year of a plan, the last day of such plan year and,
with respect to any other plan year of a plan, the last day
of the preceding plan year of such plan. The "applicable
determination date" means, with respect to the Plan, the
determination date for the Plan Year of reference and, with
respect to any other plan, the determination date for any
plan year of such plan which falls within the same calendar
year as the applicable determination date of the Plan.
(3) Accrued benefits or account balances under a plan will
include all such amounts other than deductible employee
contributions and will be determined as of the most recent
valuation date in the 12-month period ending on the
applicable determination date of the plan; provided,
however, that in the case of a defined benefit plan such
valuation date must be the same date as employed for
minimum funding purposes, and in the case of a defined
contribution plan the value so determined will be adjusted
for contributions made after the valuation date to the
extent required by applicable Treasury regulations.
(4) Each plan of the Company or any Affiliated Company in which
a key employee participates, and any other plan of the
Company or any Affiliated Company which enables a plan
referred to in the preceding clause to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code,
shall be aggregated with the Plan. Any plan of the Company
or any Affiliated Company not required to be aggregated
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<PAGE>
with the Plan may nevertheless, at the discretion of the
Plan Administrator, be aggregated with the Plan if the
benefits and coverage of all aggregated plans would
continue to satisfy the requirements of Sections 401(a)(4)
and 410 of the Code.
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ARTICLE 13
AMENDMENT AND TERMINATION
13.1 Amendment. The Company reserves the right at any time or times to
amend the provisions of the Plan and Trust, by resolution of the
Board of Directors, to any extent and in any manner that it may deem
advisable by delivery to the Trustee of a written instrument executed
by the Company providing for such amendment. Upon the delivery of
such instrument to the Trustee, such instrument will become effective
in accordance with its terms as to all Participants and all persons
having or claiming any interest hereunder; provided, however, that
the Company will not have the power:
(a) to amend the Plan and Trust in such manner as would cause or
permit any part of the assets of the Trust to be diverted to
purposes other than for the exclusive benefit of each
Participant and his Beneficiary (except as permitted by Sections
5.8 and 15.4), unless such amendment is permitted by law,
governmental regulation or ruling;
(b) to amend the Plan or Trust retroactively in such a manner as
would deprive any Participant of any benefit to which he was
entitled under the Plan by reason of contributions made prior to
the amendment, unless such amendment is necessary to conform the
Plan or Trust to, or satisfy the conditions of, any law,
governmental regulation or ruling, or to permit the Trust and
the Plan to meet the requirements of Sections 401(a) and 501(a)
of the Code; or
(c) to amend the Plan or Trust in such manner as would increase the
duties or liabilities of the Trustee or affect its fee for
services hereunder, unless the Trustee consents thereto in
writing.
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13.1A Certain Amendments Regarding Acquisitions and Administrative Matters.
In the event the Company or a Participating Employer acquires another
corporation, a division of another corporation, or hires en masse a
group of employees previously employed by another employer, the Plan
Administrator may amend the participation requirements as set forth
in Section 4.1 as they apply with respect to the employees of the
acquired corporation or division or the employees hired en masse, for
example by waiving the service requirements for one or more purposes
of the Plan. In addition, the Plan Administrator may amend the Plan
with respect to administrative matters and/or to comply with
applicable IRS requirements, provided that in each case such
amendment does not affect the Company's obligation to make
contributions or the Company's fiduciary responsibilities under the
Plan.
13.2 Termination. The Company has established the Plan and the Trust with
the bona fide intention and expectation that contributions will be
continued indefinitely, but the Company will have no obligation or
liability whatsoever to maintain the Plan for any given length of
time and may discontinue contributions under the Plan or terminate
the Plan at any time by action of its Board without any liability
whatsoever for any such discontinuance or termination. The Plan will
be deemed terminated
(a) if and when the Company is judicially declared bankrupt,
(b) if and when the Company is a party to a merger in which it is
not the surviving corporation or sells all or substantially all
of its assets, unless the surviving corporation or the purchaser
maintains any other defined contribution plan or adopts the Plan
by an instrument in writing delivered to the Trustee within 60
days after the merger or sale, or
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(c) upon dissolution of the Company.
13.3 Distributions Upon Termination of the Plan. Upon termination or
partial termination of the Plan or complete discontinuance of
contributions thereunder, each affected Participant (including a
terminated Participant in respect of amounts not previously forfeited
by him) will have a fully vested and nonforfeitable interest in his
Share of the Trust Fund, and the Trustee will distribute to each such
Participant (or other person entitled to distribution) the value of
the Participant's Share of the Trust Fund in a single lump sum
payment. However, if a successor plan is established within the
meaning of Section 401(k)(2)(B)(i)(II) of the Code and Treasury
Regulation 1.401(k)-1(d)(3), distributions shall be made to
Participants and their beneficiaries only in accordance with Articles
8 and 9. Upon the completion of distributions to all Participants,
the Trust will terminate, the Trustee will be relived from all
liability under the Trust, and no Participant or other person will
have any claims thereunder, except as required by applicable law.
13.4 Merger or Consolidation of Plan; Transfer of Plan Assets. In case of
any merger or consolidation of the Plan with, or transfer of assets
and liabilities of the Plan to, any other plan, provisions must be
made so that each Participant would, if the Plan then terminated,
receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation
or transfer if the Plan had then terminated.
13.5 Participating Employer Ceasing to be Affiliated With The Company. In
the event a Participating Employer ceases to be an Affiliated Company
for any reason, including a merger, reorganization, or sale or other
transfer of stock, the following provisions shall apply:
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(a) Such Participating Employer shall thereupon cease to be a
Participating Employer under this Plan.
(b) The Plan shall not terminate with respect to the Participants
employed by such former Participating Employer solely because it
ceased to be a Participating Employer.
(c) The Company may agree with such former Participating Employer
(or with an organization acquiring the former Participating
Employer) that the assets of the Trust properly allocable to
Participants employed by the former Participating Employer be
transferred to another plan maintained by the former
Participating Employer (or by such other organization), provided
that the requirements of Section 13.4 are satisfied and such
other plan assumes all liabilities of this Plan with respect to
such Participants. The Plan Administrator shall direct the
Trustee to carry out such transfer in accordance with the terms
of such agreement.
(d) In the absence of any agreement described in paragraph (c) above
and if the former Participating Employer does not maintain the
Plan, as determined under Treasury Regulation 1.401(k)-1(d)(4),
each Participant employed by the former Participating Employer
shall be treated as having ceased employment with the Employer
for purposes of the Plan at the time the former Participating
Employer ceased to be an Employer (unless the Participant was
employed immediately thereafter by the Company or another
Affiliated Company), and shall be entitled to benefits as a
result of such cessation of employment to the extent provided by
Article 8.
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ARTICLE 14
ROLLOVER CONTRIBUTIONS
14.1 Transfer of Amount Distributed from Another Qualified Plan. An
Eligible Employee who was formerly a participant in a plan described
in Section 401(a) of the Code (the "distributing plan") and who has
received an eligible rollover distribution (within the meaning of
Section 402 of the Code) from the distributing plan (the
"distribution") may contribute to the Trust an amount determined
under (c) below (the "transferred amount") provided the conditions
set forth in (a) and (b) below are satisfied.
(a) The transferred amount must be contributed to the Trust on or
before the 60th day following the Eligible Employee's receipt of
the distribution from the distributing plan.
(b) The transferred amount:
(1) must not exceed the fair market value of the distribution,
reduced by the amount contributed to the distributing plan
by the Eligible Employee, as determined in accordance with
Section 72(f) of the Code and the Treasury regulations
thereunder, such amount to be reduced by any amounts
theretofore distributed to the Eligible Employee which were
not includible in his gross income for Federal income tax
purposes, and
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<PAGE>
(2) must include no property other than (A) money received in
the distribution, and (B) money attributable to other
property received in the distribution which is sold and the
proceeds of which are transferred pursuant to Section
402(a)(6)(D) of the Code.
(c) A rollover contribution may also be made by means of a direct
transfer from a distributing plan qualified under Section 401(a)
of the Code to the extent permitted under Section 401(a)(31) and
402 of the Code.
14.2 Transfer of Amount Distributed from a Rollover IRA.
(a) An Eligible Employee who has received a distribution meeting the
requirements of Section 14.1(a), and who subsequently deposited
such distribution in an individual retirement account, as
defined in Section 408 of the Code, in accordance with Section
408(d)(3)(A)(ii) of the Code, may contribute a portion or all of
a distribution from such account (the "transferred amount") to
the trust provided the conditions set forth in (b) and (c) are
satisfied.
(b) The transferred amount must be contributed to the Trust on or
before the 60th day following the Eligible Employee's receipt of
the amount from the individual retirement account.
(c) The distribution from the individual retirement account must
consist of the entire amount in the account, and must include no
amount attributable to any source other than a qualified plan
described in Section 401(a) of the Code.
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14.3 Monitoring of Rollovers.
(a) The Plan Administrator shall establish such procedures and
require such information from transferring employees as it deems
necessary to insure that amounts transferred under this Article
14 satisfy the requirements for tax-free rollovers established
by conditions of this Article 14 and the Code and Treasury
regulations.
(b) No amount may be transferred under this Article 14 until
approved by the Plan Administrator.
14.4 Treatment of Transferred Amount Under the Plan.
(a) The Plan Administrator will establish a Rollover Account for
each Eligible Employee making a contribution described in
Section 14.1 or 14.2 above.
(b) Upon retirement, death, or other termination of employment, the
Eligible Employee's Rollover Account shall be distributed to him
in accordance with Articles 8 and 9.
(c) The Eligible Employee will at all times have a fully vested and
nonforfeitable interest in the amount credited to his Rollover
Account.
(d) An Eligible Employee who contributes an amount to the Plan in
accordance with this Article 14 will not become a Participant
until he has satisfied the requirements of Article 4. However,
such an Eligible Employee will be treated as a Participant, with
respect to his interest in his Rollover Account, for purposes of
Articles 3, 6, 7, 8, 9, 11, 13 and 15 of the Plan and, so long
as he is an Employee, Articles 10 and 11.
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ARTICLE 15
MISCELLANEOUS
15.1 Limitation of Rights. Neither the establishment of the Plan and the
Trust, nor any amendment thereof, nor the creation of any fund or
account, nor the payment of any benefits, will be construed as giving
to any Participant or other person any legal or equitable right
against any Participating Employer or the Plan Administrator or
Trustee, except as provided herein, and in no event will the terms of
employment or service of any Participant be modified or in any way be
affected hereby. It is a condition of the Plan, and each Participant
expressly agrees by his participation herein, that each Participant
will look solely to the assets held in the Trust for the payment of
any benefit to which he is entitled under the Plan.
15.2 Nonalienability of Benefits. The benefits provided hereunder will not
be subject to alienation, assignment, garnishment, attachment,
execution or levy of any kind, and any attempt to cause such benefits
to be so subjected will not be recognized, except to such extent as
may be required by law. The provisions of the preceding sentence
shall apply in general to the creation, assignment or recognition of
a right to any benefit payable with respect to a Participant pursuant
to a domestic relations order, except that if such order is a
Qualified Domestic Relations Order, the provisions of the preceding
sentence shall not apply.
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15.3 Information Between Plan Administrator and Trustee. The Plan
Administrator will furnish to the Trustee, and the Trustee will
furnish to the Plan Administrator, such information relating to the
Plan and Trust as may be required under the Code and any regulations
issued or forms adopted by the Treasury Department thereunder or
under the provisions of ERISA and any regulations issued or forms
adopted by the Labor Department thereunder.
15.4 Payment Under Qualified Domestic Relations Order. Notwithstanding any
provisions of the Plan to the contrary, if there is entered any
Qualified Domestic Relations Order that affects the payment of
benefits hereunder, such benefits shall be paid in accordance with
the applicable requirements of such Order.
The Committee shall establish a procedure to determine the status of
a judgement, decree or order as a Qualified Domestic Relations Order
and to administer Plan distributions in accordance with Qualified
Domestic Relations Orders. Such procedure shall be in writing, shall
include a provision specifying the notification requirements
enumerated in the preceding paragraph, shall permit an alternate
payee to designate a representative for receipt of communications
from the Committee and shall include such other provisions as the
Committee shall determine, including provisions describing the
interest rate to be used in making present value determinations as
well as provisions required under regulations promulgated by the
Secretary of the Treasury.
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Notwithstanding any Plan provision to the contrary, as permitted
under Section 414(p)(10) of the Code, a payment may be made to an
alternate payee in accordance with the provisions of a Qualified
Domestic Relations Order before the Participant to whom the order
relates separates from service with the Employer and before such
Participant attains his earliest retirement age (as defined in
Section 414(p)(4) of the Code). Furthermore, unless otherwise
provided under a Qualified Domestic Relations Order, payment shall be
made to an alternate payee in a single payment in cash or in kind as
soon as practicable following the determination that such order is
qualified.
15.5 Payment of Benefit for Disabled or Incapacitated Person. Whenever, in
the opinion of the Plan Administrator or its agent, a person entitled
to receive any payment of a benefit hereunder is under a legal
disability or is incapacitated in any way so as to be unable to
manage his financial affairs, the Plan Administrator or its agent may
direct the Trustee to make payments to such person or to his legal
representative or to a relative or friend of such its agent may
direct the Trustee to apply the payment for the benefit of such
person in such manner as the Plan Administrator or its agent
considers advisable. Any payment under Section 15.5 shall be a
complete discharge of any liability for the making of such payment
under the provisions of the Plan. Nothing contained in this Section
15.5, however, should be deemed to impose upon the Plan Administrator
any liability for paying a benefit to any person who is under such a
legal disability or is so incapacitated unless it has received notice
of such disability or incapacity from a competent source.
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15.6 Telephonic and/or Electronic Transactions. The Plan Administrator may
authorize the use of telephonic and/or electronic means and
procedures for effecting one or more transactions or Participant
requests hereunder, for example, enrolling in the Plan, requesting
loans and/or withdrawals, electing investments, and commencing,
changing, and/or suspending contributions.
15.7 Temporary Suspensions of Transactions. The Plan Administrator may
temporarily suspend certain transactions hereunder as may be
necessary to accommodate a change in Trustee, Plan recordkeeper,
and/or investment funds. Any such suspension shall be communicated to
Participants in advance.
15.8 Governing Law. The Plan will be construed, administered and enforced
according to the laws of the Commonwealth of Massachusetts to the
extent such laws are not inconsistent with and preempted by ERISA.
15.9 Acquisitions. Notwithstanding any Plan provision to the contrary, in
no event shall the employees of an entity which is acquired by the
Company or any Affiliated Company be eligible to participate under
the Plan unless and until the Company approves and agrees to such
participation.
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IN WITNESS WHEREOF, Liberty Financial Companies, Inc. and each other
Participating Employer listed below has caused this instrument to be executed by
its respective duly authorized officer this ____________________ day of
_______________________, 19___.
LIBERTY FINANCIAL COMPANIES, INC.
By: _____________________________________
KEYPORT LIFE INSURANCE COMPANY
By: _____________________________________
THE COLONIAL GROUP, INC.
By: _____________________________________
STEIN, ROE & FARNHAM INCORPORATED
By: _____________________________________
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INDEPENDENT FINANCIAL MARKETING GROUP, INC.
By: _____________________________________
NEWPORT PACIFIC MANAGEMENT, INC.
By: _____________________________________
LIBERTY ASSET MANAGEMENT COMPANY
By: _____________________________________
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APPENDIX A
SPECIAL RULES FOR IFMG
1.1.A Introduction. Effective March 7, 1996, the Company acquired the
Independent Financial Marketing Group, Inc. and its wholly owned
subsidiary IFS Agencies, Inc. (IFMG) and effective May 1, 1996, IFMG
became a Participating Employer under the Liberty Financial
Companies, Inc. Savings and Investment Plan and Trust (LFC Plan). The
IFMG 401(k) Plan was subsequently merged into the LFC Plan. This
Appendix sets forth certain rules which apply to former IFMG
employees and certain employees who transferred to IFMG after it was
acquired.
1.2.A Years of Service. Employment with IFMG both prior and subsequent to
March 7, 1996 will be counted as employment with the Company or an
Affiliate for all purposes of the Plan except to the extent such
employment may be disregarded under the break in service rules of the
IFMG 401(k) Plan.
1.3.A Matching Contributions. Certain Employees transferred their
employment from the Liberty Financial Bank Group, Keyport Life
Insurance Company, or Liberty Financial Companies, Inc. to IFMG. The
Matching Contribution for such Employees shall be increased to 100%
for 60 months beginning April 1, 1997.
1.4.A Vesting. A Participant who was a participant in the IFMG Plan will
become 100% vested at age 55 provided he is still employed by the
Company or an affiliate.
1.5.A Spousal Consent for Distributions and Withdrawals. A married
Participant who was previously a participant in the IFMG 401(k) Plan
must obtain his spouse's consent in order to make a distribution or
withdrawal.
1.6.A Annuity Options. In the case of a Participant who was previously a
Participant in the IFMG 401(k) Plan, in addition to the other forms
of payment available hereunder for a final distribution annuity
options shall be available in the form of a life annuity, 50%,
66-2/3%, and 100% contingent annuitant annuity, a 5-, 10-, or 15-year
certain and continuous annuity, and a cash refund annuity. A 50%
contingent annuitant annuity with his spouse as designated
beneficiary shall be automatically payable if the Participant is
married unless the spouse consents to another form of distribution,
and a life annuity shall be the automatic form of distribution if the
Participant is not married unless he consents to another form of
distribution.
<PAGE>
APPENDIX B
SPECIAL RULES FOR STEIN, ROE & FARNHAM EMPLOYEES
1.1.B Introduction. The special rules set forth in this Appendix B shall
apply to Participants who are Employees of Stein, Roe & Farnham.
1.2.B Definition of Compensation. The definition of compensation as set
forth in the Stein, Roe & Farnham Retirement Plan as it existed on
June 30, 1998 shall continue to apply through December 31, 1998.
Thereafter, the definition set forth in this Plan shall apply.
1.3.B Maximum Employee Contribution. The maximum Elective Employee
Contribution shall be 14% unless a greater contribution is approved
by the Plan Administrator in accordance with IRS rules.
1.4.B Matching Contribution. The Company matching contribution shall be 50%
of the first 6% of Employee Elective Contributions and shall be made
only with respect to the first $66,000 of Compensation. Effective
January 1, 1999, the Matching Contribution shall be increased to 75%
of the first 6% of Employee Elective Contributions and shall be made
with respect to the first $80,000 of Compensation.
1.5.B Discretionary Contribution. This Discretionary Contribution shall be
7.5% of Compensation unless changed by Stein, Roe & Farnham.
Notwithstanding the eligibility provisions of the Plan, an Employee
hired during 1998 will not be eligible for a Discretionary
Contribution until the Plan year ending December 31, 1999.
1.6.B Vesting.
(a) A Participant hired before July 2, 1987 shall be 100% vested in
his Discretionary Contribution Account.
(b) A Participant hired before July 1, 1998 shall be 100% vested in
his Company Matching Contribution Account.
(c) A Participant who was previously a Participant in the KJMM Money
Purchase Plan shall be vested in his transferred Money Purchase
Plan Account and his Discretionary Contribution Account pursuant
to the following schedule:
<PAGE>
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
- ---------------- ------------------
<S> <C>
Less than 2 0%
2 33%
3 67%
4 100%
</TABLE>
1.7.B Forms of Payment for Former KJMM Employees. The spousal consent and
forms of payment rules described in Appendix A for IFMG shall also
apply to Participants who were previously Participants in the KJMM
Money Purchase Plan or 401(k) Plan.
1.8.B Withdrawals. No hardship withdrawals shall be permitted from a
Participant's Discretionary Contribution Account, including any
Profit Sharing Accounts transferred from the Stein, Roe & Farnham
Retirement Plan. Any After-Tax Contributions made under the Stein,
Roe & Farnham Retirement Plan, and related investment earnings, may
be with drawn for any reason at any time, provided that any such
withdrawal shall consist of the Participant's entire After-Tax
Contribution Account.
1.9.B Loans. In the event a Stein, Roe & Farnham Participant has more than
2 outstanding loans as of June 30, 1998, he may continue to repay the
loans according to their original terms. However, no new loan will be
permitted which will cause his outstanding loans to exceed 2.
1.10.B Transfer of Accounts. Accounts held on behalf of a Participant under
the Stein, Roe & Farnham Retirement Plan shall be transferred to this
Plan and held under corresponding accounts maintained under this
Plan. 2.
<PAGE>
APPENDIX C
SPECIAL RULES FOR COLONIAL EMPLOYEES
1.1.C Introduction. Effective September 1, 1998, the Colonial Group, Inc.
Profit Sharing Plan (the Colonial Plan) is merged into and becomes a
part of this Plan and the Accounts under such plan are transferred to
this Plan. The special rules set forth in this Appendix C shall apply
to Participants who are Employees of Colonial.
1.2.C Rules from September 1 through December 31, 1998. For the period
September 1 through December 31, 1998, the rules of the Colonial Plan
as in effect on August 31, 1998 shall continue to apply except that
the investment funds offered under the Plan shall replace the funds
previously offered under the Colonial Plan. For this purpose, the
terms of the Colonial Plan are hereby incorporated by reference,
except that the terms of this plan relating to investments shall
apply instead of the corresponding provisions of the Colonial Plan.
1.3.C Rules on and after January 1, 1999. Effective January 1, 1999, the
rules of this Plan shall entirely replace the rules of the Colonial
Plan for Colonial Employees, subject to the special rules described
below.
1.4.C Maximum Employee Contribution. The maximum Elective Employee
Contribution shall be 12% unless a greater contribution is approved
by the Plan Administrator in accordance with IRS rules.
1.5.C Withdrawals. In addition to the withdrawal rules set forth in the
Plan, the following special rules apply to Colonial Employees for
whom Accounts have been transferred to this Plan from the Colonial
Plan.
(a) After-Tax Contributions made under the Colonial Plan, and
related investment earnings, may be withdrawn for any reason at
any time, provided that any such withdrawal shall consist of the
Participant's entire After-Tax Contribution Account;
(b) Before-Tax Contributions made under the Colonial Plan shall be
subject to the same withdrawal rules as apply to Elective
Employee Contributions under this Plan;
(c) One half of the Participant's Profit Sharing Account (as defined
under the Colonial Plan) value under the Colonial Plan
determined as of January 1, 1987 (not including the value of any
Before-Tax Contributions) shall be subject to the same
withdrawal rules as apply to Elective Employee Contributions;
<PAGE>
(d) Except as provided in (b) and (c) above, no hardship withdrawals
shall be permitted from a Participant's Profit Sharing Account,
his ESOP Account (in each case as defined under the Colonial
Plan), or his Discretionary Contribution Account.
1.6.C Vesting. In the case of a Colonial Employee hired prior to January 1,
1999, the following vesting rules shall apply to the extent they
provide for earlier vesting than the terms of the Plan:
(a) Any Before-Tax Contributions (as defined under the Colonial
Plan), made under the Colonial Plan for Plan Years commencing
before January 1, 1999 shall be 100% vested;
(b) The following vesting schedule shall apply to both Matching
Contributions and Discretionary Contributions, and related
investment earnings, including any Profit Sharing Contributions
under the Colonial Plan which were not Before-Tax Contributions;
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
- ---------------- ------------------
<S> <C>
Less than 1 0%
1 33%
2 67%
3 100%
</TABLE>
(c) The Employee shall become 100% vested at age 55 regardless of
his Years of Service.
