_______________________________________________________________Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8 REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
U.S. INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3369326
----------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
101 Wood Avenue South Iselin, New Jersey 08830
- ----------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
BEARING INSPECTION, INC.
RETIREMENT SAVINGS & INVESTMENT PLAN
(Full title of the plan)
GEORGE H. MACLEAN
Senior Vice President and General Counsel
U.S. Industries, Inc.
101 Wood Avenue South Iselin, New Jersey 08830
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(Name and address of agent for service)
(908) 767-0700
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of Proposed Maxi- Proposed Maxi-
Securities mum Offering mum Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (2) Price Fee
- --------------------------------------------------------------------------------
Common Stock,
par value $.01 16,134 $37.188 $600,000 $181.80
per share (1)
- --------------------------------------------------------------------------------
(1) In Addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
(2) Determined in accordance with Rule 457(c) based on the average of the high
and low sales prices on the New York Stock Exchange on
June 20, 1997.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference
- ------- ---------------------------------------
The following documents and portions of documents filed by Registrant
or by the Plan pursuant to the Securities Act of 1933 (the "Act") and the
Securities Exchange Act of 1934 (the "Exchange Act") are incorporated herein by
reference:
(a) Registrant's Annual Report in Amendment No. 1 on Form 10-K/A for
the fiscal year ended September 28, 1996.
(b) Description of the Common Stock at page 75 of Registrant's
Information Statement, dated April 21, 1995 attached as Annex A to Registrant's
Registration Statement on Form 10, effective April 21, 1995.
(c) Registrant's Current Report on Form 8-K dated December 12, 1996,
Registrant's Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act filed December 16, 1996, Registrant's Current Report on Form 8-K
dated March 19, 1997, Registrant's Current Report on Form 8-K also dated March
19, 1997, Registrant's Amended Quarterly Report on Form 10-Q/A for the quarter
ended December 28, 1996 dated April 22, 1997, Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 29, 1997 dated May 13, 1997 and all
documents filed pursuant to Section 13(a) or 15(d) of the Exchange Act by
Registrant since September 28, 1996 and by Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act on or subsequent to the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities being offered pursuant hereto have
been sold or which deregisters all such securities then remaining unsold, also
shall be deemed to be a part hereof from the date of filing of such documents.
Item 6. Indemnification of Directors and Officers.
- ------- ------------------------------------------
In accordance with Section 145 of the Delaware General Corporation Law
("DGCL"), which provides for the indemnification of directors, officers and
employees under certain circumstances, Article XIV ("Article XIV") of the
Registrant's By-Laws grants the Registrant's directors, officers and employees a
right to indemnification for all expenses, liabilities and losses relating to
civil, criminal, administrative or investigative proceedings to which they are a
party (i) by reason of the fact that they are or were directors, officers or
employees of Registrant or (ii) by reason of the fact, while they are or were
directors, officers or employees of Registrant, they are or were serving at the
request of Registrant as directors, officers, members, employees, fiduciaries or
agents of another corporation,
<PAGE>
partnership, joint venture, trust or enterprise.
Article XIV of the By-Laws further provides for the mandatory advancement of
expenses incurred by officers and directors in defending such proceedings in
advance of their final disposition upon delivery to Registrant by the indemnitee
of an undertaking to repay all amounts so advanced if it is ultimately
determined that such indemnitee is not entitled to be indemnified under Article
XIV. Registrant may not indemnify or make advance payments to any person in
connection with proceedings initiated against Registrant by such person without
the authorization of the Board of Directors, except with respect to
counterclaims, cross-claims, third-party claims or as otherwise ordered by a
court of competent jurisdiction.
In addition, Article XIV provides that directors and officers therein
described shall be indemnified to the fullest extent permitted by Section 145 of
the DGCL, or any successor provisions or amendments thereunder. In the event
that any such successor provisions or amendments provide indemnification rights
broader than permitted prior thereto, Article XIV allows such broader
indemnification rights to apply retroactively with respect to any predating
alleged action or inaction and also allows the indemnification to continue after
an indemnitee has ceased to be a director or officer of the corporation and to
inure to the benefit of the indemnitee's heirs, executors and administrators.
Article XIV further provides that the right to indemnification is not
exclusive of any other right which any indemnitee may have or thereafter acquire
under any statute, the Certificate of Incorporation or By-Laws, any agreement or
vote of stockholders or disinterested directors or otherwise, and allows
Registrant to indemnify and advance expenses to any person whom the corporation
has the power to indemnify under the DGCL or otherwise.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for directors and officers and controlling persons pursuant
to the foregoing provisions, Registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Registrant's By-Laws authorize Registrant to purchase insurance for
directors, officers and employees of Registrant, and persons who serve at the
request of Registrant as directors, officers, members, employees, fiduciaries or
agents of other enterprises against any expense, liability or loss incurred in
such capacity, whether or not Registrant would have the power to indemnify such
persons against such expense or liability under the By-Laws. Registrant intends
to maintain insurance coverage for its officers and directors as well as
insurance coverage to reimburse Registrant for potential costs of its corporate
indemnification of directors and officers.
<PAGE>
Item 8. Exhibits.
4.1 Amended and Restated Certificate of Incorporation of
Registrant (filed as Exhibit 3.1(a) of Registrant's
Form 10 dated April 21, 1995).
4.2 Amended and Restated By-Laws of Registrant (filed as Exhibit 3.2
to Registrant's Form 10, dated April 21, 1995).
4.3 Specimen form of certificate representing shares of Common Stock of
Registrant (filed as Exhibit 4.1 to Registrant's Form 10 dated
April 20, 1995).
4.4 Bearing Inspection, Inc. Retirement Savings & Investment Plan.
5.1 Registrant undertakes to submit the Plan and any amendment thereto
to the Internal Revenue Service ("IRS") in a timely manner and will
make all changes required by the IRS in order to qualify the Plan.
23.1 Consent of Ernst & Young LLP, independent auditors, New York, New
York.
23.2 Consent of Price Waterhouse, independent accountants, Morristown,
New Jersey.
23.3 Consent of Deloitte & Touche LLP, independent auditors, New York,
New York.
24.1 Power of Attorney
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933; (ii) to reflect in the prospectus any fact or event arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement:
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material
<PAGE>
change to such information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Iselin, New Jersey on June 25, 1997.
U.S. INDUSTRIES, INC.
(Registrant)
By: /s/ George H. MacLean
-------------------------
George H. MacLean, Senior
Vice President, General
Counsel and Secretary
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
* Chairman of the June 25, 1997
- ------------------------
David H. Clarke Board and Chief
Executive Officer
(Principal Executive
Officer)
* Director, President June 25, 1997
- ------------------------
John G. Raos and Chief Operating
Officer
* Director, Senior Vice June 25, 1997
- ------------------------
Frank R. Reily President and Chief
Financial Officer
(Principal Financial
Officer)
* Director June 25, 1997
- ------------------------
Brian C. Beazer
* Director June 25, 1997
- ------------------------
John J. McAtee, Jr.
* Director June 25, 1997
- ------------------------
The Hon. Charles H. Price II
* Director June 25, 1997
- ---------------------------
Sir Harry Solomon
<PAGE>
* Director June 25, 1997
- ------------------------
Royall Victor III
* Director June 25, 1997
- ------------------------
Mark Vorder Bruegge
* Vice President- June 25, 1997
- ------------------------
James O'Leary Corporate Controller
(Principal Accounting
Officer)
* By /s/ George H. MacLean June 25, 1997
-----------------------
George H. MacLean
Attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, the
Benefits Administration Committee has duly caused this Registration Statement to
be signed on behalf of the Plan by the undersigned, thereunto duly authorized,
in the City of Iselin, and State of New Jersey on June 25, 1997.
BEARING INSPECTION, INC.
RETIREMENT SAVINGS & INVESTMENT PLAN
By: /s/ Dorothy E. Sander
----------------------------
Name: Dorothy E. Sander
Title: Committee Member
<PAGE>
EXHIBIT INDEX
Exhibit
No.
4.1 Amended and Restated Certificate of Incorporation of
Registrant (filed as Exhibit 3.1(a) of Registrant's
Form 10 dated April 21, 1995).
4.2 Amended and Restated By-Laws of Registrant (filed as Exhibit 3.2
to Registrant's Form 10, dated April 21, 1995).
4.3 Specimen form of certificate representing shares of Common Stock of
Registrant (filed as Exhibit 4.1 to Registrant's Form 10 dated
April 20, 1995).
4.4 Bearing Inspection, Inc. Retirement Savings & Investment Plan.
5.1 Registrant undertakes to submit the Plan and any amendment thereto
to the Internal Revenue Service ("IRS") in a timely manner and will
make all changes required by the IRS in order to qualify the Plan.
23.1 Consent of Ernst & Young LLP, independent auditors, New York, New
York.
23.2 Consent of Price Waterhouse, independent accountants,
Morristown, New Jersey.
23.3 Consent of Deloitte & Touche LLP, independent auditors, New York,
New York.
24.1 Power of Attorney
EXHIBIT 4.4
BEARING INSPECTION, INC.
RETIREMENT SAVINGS & INVESTMENT PLAN
(Restatement Effective January 1, 1997)
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 "Account" .............................................................. 1
1.2 "Affiliate" ............................................................ 1
1.3 "Appropriate Notice" .................................................. 1
1.4 "Beneficiary" .......................................................... 1
1.5 "Board" or "Board of Directors" ....................................... 1
1.6 "Code" ................................................................. 1
1.7 "Committee" ............................................................ 1
1.8 "Company" .............................................................. 1
1.9 "Compensation" ........................................................ 1
1.10 "Compensation Deferral Contributions" ................................. 2
1.11 "Compensation Deferral Contributions Account" ......................... 2
1.12 "Effective Date" ...................................................... 2
1.13 "Eligible Employee" ................................................... 2
1.14 "Employee" ............................................................ 2
1.15 "Employee Contributions" .............................................. 2
1.16 "Employee Contributions Account" ...................................... 3
1.17 "Employer" ........................................................... 3
1.18 "Employer Matching Contributions" ..................................... 3
1.19 "Employer Matching Contributions Account" ............................. 3
1.20 "Employer Securities" ................................................. 3
1.21 "Enrollment Date" ..................................................... 3
<PAGE>
1.22 "Enrollment Period" .................................................. 3
1.23 "ERISA" ............................................................... 3
1.24 "Hour of Service" ..................................................... 3
1.25 "Initial Enrollment Date" ............................................. 4
1.26 "Investment Fund" ..................................................... 4
1.27 "Investment Manager" .................................................. 4
1.28 "Leased Employee" .................................................... 5
1.29 "Leave of Absence" .................................................... 5
1.30 "Member" .............................................................. 5
1.31 "Parental Leave" ...................................................... 5
1.32 "Plan" ................................................................ 6
1.33 "Plan Year" ........................................................... 6
1.34 "Prior Plan" .......................................................... 6
1.35 "Prior Plan Account" ................................................. 6
1.36 "Required Beginning Date" ............................................. 6
1.37 "Retirement" .......................................................... 6
1.38 "Rollover Contribution" ............................................... 6
1.39 "Rollover Contribution Account" ....................................... 6
1.40 "Service" ............................................................ 6
1.41 "Suspense Account" .................................................... 6
1.42 "Total and Permanent Disability" ...................................... 7
1.43 "Trustee" ............................................................ 7
1.44 "Trust Fund" .......................................................... 7
1.45 "Valuation Date" ...................................................... 7
<PAGE>
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. ............................................... 7
2.2 Eligible Employees on and after the Effective Date. ................... 7
2.3 Completion of Appropriate Notice. ..................................... 7
2.4 Elections Upon Becoming A Member. ..................................... 8
2.5 Beneficiary Designation. .............................................. 8
2.6 Transfers to or from Non-Covered Status. .............................. 8
2.7 Rollover Contributions From Other Plans. .............................. 9
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. ................................. 9
3.2 Changes and Suspension of Contributions. .............................. 10
3.3 Transfer of Contributions to Trustee. ................................. 10
ARTICLE IV
Limitations on, and Distribution of,
Excess Compensation Deferral
Contributions and Excess Employer Match-
ing Contributions of Highly Compensated
Employees
4.1 Limitations. ........................................................... 11
4.2 Control of Contributions and Distribution of Excess. ................... 12
4.3 Limitation of Annual Additions. ........................................ 15
<PAGE>
ARTICLE V
Employer Matching Contributions
5.1 Amount of Employer Matching Contributions.............................. 18
5.2 Treatment of Forfeitures. ............................................. 18
5.3 Transfer of Contributions to Trustee. ................................. 19
ARTICLE VI
Accounts
6.1 Maintenance of Accounts. ............................................... 19
6.2 Valuations. ........................................................... 19
ARTICLE VII
Vesting of Accounts
7.1 Employer Matching Contributions Account. ............................... 20
7.2 Other Accounts. ....................................................... 20
7.3 Earlier Vesting in Employer Matching Contributions Accounts. ........... 20
7.4 Forfeitures. ........................................................... 20
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts Other Than Employer Matching
Contributions Accounts. ................................................ 21
8.2 Redirection of Future Contributions. .................................. 22
8.3 Reinvestment of Prior Contributions. .................................. 23
8.4 Investment of Employer Matching Contributions Accounts. ............... 23
8.5 Statements of Accounts And Confirmation of Investment
Directions. ......................................................... 23
<PAGE>
8.6 Crediting of Accounts.................................................. 23
8.7 Correction of Errors. ................................................. 24
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. ................................................... 24
9.2 Hardship Withdrawals. ................................................. 25
9.3 Values. .............................................................. 26
9.5 Loans. ............................................................... 27
ARTICLE X
Distribution
10.1 Amount of Distribution. .............................................. 28
10.2 Notice of Options and Normal Form of Distribution ................... 29
10.3 Alternate Form of Distribution. ...................................... 30
10.4 Identity of Payee. .................................................. 31
10.5 Non-alienation of Benefits. .......................................... 31
10.6 Qualified Domestic Relations Order. .................................. 32
10.7 Commencement of Benefits. .......................................... 32
10.8 Annuities. .......................................................... 32
10.9 Spousal Consent. .................................................... 34
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator. .................................................. 35
11.2 Board of Directors. ................................................. 36
11.3 Appointment of the Committee. ........................................ 36
11.4 Compensation, Expenses. ............................................. 36
<PAGE>
11.5 Committee Actions, Agents. .......................................... 36
11.6 Committee Meetings. .................................................. 37
11.7 Authority and Duties of the Committee. ............................... 37
11.8 Personal Liability. .................................................. 37
11.9 Dealings Between the Committee and Individual Members. ............... 38
11.10 Information To Be Supplied by the Employer. ........................ 38
11.11 Records. ........................................................... 38
11.12 Fiduciary Capacity. ................................................. 38
11.13 Fiduciary Responsibility. ........................................... 38
11.14 Claim Procedure. .................................................... 39
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund. .......................................................... 40
12.2 Trustee. ............................................................. 41
12.3 Investment Manager. .................................................. 41
12.4 Purchase and Holding of Securities. .................................. 41
12.5 Voting of Employer Securities. ....................................... 41
12.6 Disbursement of Funds. .............................................. 42
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend. ..................................................... 42
13.2 Suspension or Termination. ........................................... 43
13.3 Merger, Consolidation of Transfer. ................................... 43
<PAGE>
ARTICLE XIV
Miscellaneous
14.1 Uniform Administration. .............................................. 43
14.2 Payment Due an Incompetent. .......................................... 44
14.3 Source of Payments. .................................................. 44
14.4 Plan Not a Contract of Employment. ................................... 44
14.5 Applicable Law. ..................................................... 44
14.6 Unclaimed Amounts. ................................................... 44
ARTICLE XV
Top Heavy Provisions
15.1 Application. ........................................................ 45
15.2 Special Top Heavy Definitions. ....................................... 45
15.3 Special Top Heavy Provisions. ....................................... 52
15.4 Effect of Change in Applicable Legislation or
Regulation. ......................................................... 55
<PAGE>
ARTICLE I
Definitions
As used herein, unless otherwise defined or required by the context,
the following words and phrases shall have the meanings indicated. Some of the
words and phrases used in the Plan are not defined in this Article I, but, for
convenience are defined as they are introduced into the text.
1.1 "Account" means a Member's Employee Contributions Account,
Compensation Deferral Contributions Account, Rollover Contribution Account,
Employer Matching Contributions Account or Prior Plan Account as the context
requires.
1.2 "Affiliate" means any company which is related to the Employer as a
member of a controlled group of corporations in accordance with Section 414(b)
of the Code, as a trade or business under common control in accordance with
Section 414(c) of the Code or members of an affiliated service group as defined
under Section 414(m) of the Code.
1.3 "Appropriate Notice" means the written form, electronic procedure
or other method prescribed by the Committee to convey information for a
particular purpose.
1.4 "Beneficiary" means the person or persons designated by the Plan or
by a Member under Section 2.5 (Beneficiary Designation) to receive benefits
payable under the Plan as a result of the Member's death.
1.5 "Board" or "Board of Directors" means the Board of Directors of
the Employer.
1.6 "Code" means the Internal Revenue Code of 1986, as amended from
time to time and references to sections thereof shall be deemed to include any
such sections as amended, modified or renumbered.
1.7 "Committee" means the Benefits Administration Committee appointed
in accordance with Section 11.3 (Appointment of Committee).
1.8 "Company" means the corporation that owns 100% of the capital stock
of the Employer or any person, firm, corporation or partnership which may
succeed to its business.
1.9 "Compensation" means with respect to a Plan Year, the sum of the
amount reported by the Employer to the Internal Revenue Service on Form W-2 as
the Member's compensation for such
<PAGE>
calendar year, the amount of any Compensation
Deferral Contributions made on such Member's behalf to the Plan and the amount,
if any, contributed to a cafeteria plan that is excluded from gross income
pursuant to Section 125 of the Code; but exclusive of termination or severance
pay, prizes, awards, grievance settlements, overseas cost of living allowances,
relocation allowances, mortgage assistance, executive perquisites, stock
options, and such other extraordinary items or remuneration as the Committee
shall determine from time to time pursuant to such uniform and nondiscriminatory
rules as it shall adopt. On and after January 1, 1989 the Compensation of each
Employee taken into account under the Plan for any Plan Year shall not exceed
$200,000 as thereafter adjusted for inflation in accordance with Section 415(d)
of the Code. For Plan Years beginning after 1993 the Compensation of each
Employee taken into account under the Plan for any such Plan Year shall not
exceed $150,000 as thereafter adjusted for inflation in accordance with Section
401(a)(17)(B) of the Code.
1.10 "Compensation Deferral Contributions" means contributions made by
the Employer pursuant to an election by the Member to reduce the cash
compensation otherwise currently payable to such Member by an equivalent amount,
in accordance with the provisions of Section 3.1 (Compensation Deferral
Contributions).
1.11 "Compensation Deferral Contributions Account" means the separate
account maintained for a Member to record such Member's share of the Trust Fund
attributable to Compensation Deferral Contributions made on such Member's
behalf.
1.12 "Effective Date" means April 1, 1991, the date that the Plan
became effective.
1.13 "Eligible Employee" means an Employee who is employed on the
Effective Date or who (i) has attained age 21 and (ii) has worked, at least
1,000 Hours of Service during a consecutive twelve-month period, excluding an
individual who is covered by a collective bargaining agreement between the
Employer and any union unless participation by such employee in the Plan has
been agreed to by the parties to such agreement.
1.14 "Employee" means a person (but not including a person acting only
as a director) who is employed by the Employer. Leased Employees shall also be
treated as Employees for purposes of this Plan unless: (i) such Leased Employees
are covered by a Plan described in Code Section 414(n)(5) and (ii) such Leased
Employees constitute less than Twenty Percent (20%) of the Employer's non-highly
compensated workforce as defined in Code Section 414(n)(5)(c).
1.15 "Employee Contributions" means after tax contributions that were
made by a Member to a Prior Plan.
<PAGE>
1.16 "Employee Contributions Account" means the separate account
maintained for a Member to record such Member's share of the Trust Fund
attributable to the Member's Employee Contributions.
1.17 "Employer" means Bearing Inspection, Inc.
1.18 "Employer Matching Contributions" means the Employer matching
contributions made to the Trust Fund pursuant to Article V (Employer Matching
Contributions).
1.19 "Employer Matching Contributions Account" means the separate
Account maintained for a Member to record such Member's share of the Trust Fund
attributable to Employer Matching Contributions made on such Member's behalf.
1.20 "Employer Securities" means the Common Stock of
U.S. Industries, Inc., a Delaware Corporation.
1.21 "Enrollment Date" means the first day of each month in the Plan
Year.
1.22 "Enrollment Period" means the period commencing on an Enrollment
Date and ending on the next following Enrollment Date.
1.23 "ERISA" means Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as amended from time to time.
1.24 "Hour of Service" means each hour for which an Employee is paid,
or entitled to payment, or receives earned income from an Employer or an
Affiliate:
(a) for performance of duties;
(b) on account of a period of time which no duties were
performed, provided that except in the case of a Leave of Absence, no
more than 501 Hours of Service shall be credited for any single
continuous period during which an Employee performs no duty, and
provided that no Hours of Service shall be credited for periods of time
in respect of which an Employee receives severance pay or for payments
made or due under a plan maintained solely for the purpose of complying
with applicable workers' compensation, unemployment compensation or
disability insurance laws, or for reimbursement of medical expenses;
and
(c) for which back pay, irrespective of mitigation of damages,
is awarded or agreed to by the Employer provided that Hours of Service
credited under (a) or (b) shall not be credited under (c).
<PAGE>
Hours of Service credited to an Employee for the performance of duties
will be credited to the computation period in which the duties are performed.
The determination of Hours of Service for reasons other than the performance of
duties shall be made in accordance with the provisions of Labor Department
Regulations Section 2530.200b-2(b), and Hours of Service shall be credited to
the computation periods to which the award or agreement pertains. Except in the
case of a Leave of Absence, not more than 501 Hours of Service shall be credited
for any continuous period during which an Employee performs no duty or, in the
case of service required to be credited for payments of back pay awarded or
agreed to, for a period during which an employee did not or would not have
performed duties.
To the extent not credited above, during a Leave of Absence an Employee
shall be credited with a number of Hours of Service for each week of such Leave
of Absence equal to the Employee's weekly average number of Hours of Service
scheduled for the six-week period immediately preceding such Leave of Absence.
In any case in which an individual becomes an Employee upon the
acquisition of all or a portion of the business of his or her former employer by
the Employer or an Affiliate, whether by merger, acquisition of assets or stock,
or otherwise, his or her service with his or her predecessor employer shall be
included in determining his or her Hours of Service if, and to the extent that,
such service is required to be credited hereunder (A) by section 414(a) of the
Code and any regulations promulgated thereunder, (B) by the terms of the
agreement pursuant to which the business of such former employer was acquired by
the Employer or an Affiliate, or (C) by vote of the Board of Directors.
1.25 "Initial Enrollment Date" means the earliest date following the
Effective Date set by the Committee for Eligible Employees to apply to become
Members of the Plan.
1.26 "Investment Fund" means the investment choices described in
Section 8.1 (Investment of Accounts Other than Employer Matching Contributions
Accounts).
1.27 "Investment Manager" means the individual and/or other entity
appointed in accordance with Section 12.3 (Investment Manager) who has
acknowledged in writing that such individual is a fiduciary with respect to the
Plan and who is:
(a) registered as an investment adviser under the Investment
Advisers Act of 1940, or
(b) a bank, as defined in such Act, or
(c) an insurance company qualified to manage, assign or
dispose of assets of pension plans.
<PAGE>
1.28 "Leased Employee" shall mean any person who pursuant to an
agreement between the Employer and any other person
has performed services for the Employer or any related person as defined in Code
Section 414(n)(6) under the primary direction and control of the Employer or
such related person on a substantially full time basis for a period of at least
one year.
1.29 "Leave of Absence" means an absence or interruption of service
approved by the Committee under uniform and nondiscriminatory rules and
procedures. Members on leave of absence for service in the Armed Forces of the
United States, however, shall be deemed to have been on Leave of Absence,
provided they return to service with an Employer within the required time
limitations set forth in the then applicable laws governing reemployment rights
of persons inducted, or who have enlisted, in the Armed Forces.
1.30 "Member" means an Eligible Employee who has become a member of the
Plan in accordance with Article II (Eligibility and Membership). Each Member
shall continue to be such until the later of the date such Member ceases to be
an Eligible Employee or such Member's Accounts have been completely distributed.
1.31 "Parental Leave" means a period not in excess of two (2) years
commencing after December 31, 1984 during which an individual is absent from
work for any period:
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the individual,
(c) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or
(d) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
An absence from work shall not be a Parental Leave unless the Employee furnishes
the Plan Administrator such timely information as may reasonably be required to
establish that the absence from work was for one of the reasons specified in
this Section 1.31 and the number of days for which there was such an absence.
Nothing contained herein shall be construed to establish an Employer policy of
treating a Parental Leave as a Leave of Absence.
<PAGE>
1.32 "Plan" means Bearing Inspection, Inc. Retirement Savings &
Investment Plan as set forth herein or as amended from time to time.
1.33 "Plan Year" means the calendar year.
1.34 "Prior Plan" means an employee benefit plan qualified under
Section 401(a) of the Code all or part of the assets of which are transferred to
the Plan in a transaction which meets the requirements of Regulation 1.414(l) of
the Code.
1.35 "Prior Plan Account" means the separate account maintained for a
Member to record such Member's share of the Trust Fund attributable to employer
contributions to the plans described herein as Prior Plans.
1.36 "Required Beginning Date" means April 1 of the year following the
Plan Year in which occurs the later of the date that the Member terminates
employment or the date on which the Member attains the age of 70-1/2 years.
1.37 "Retirement" means a Member's normal, early or deferred retirement
whichever shall apply to the Member under the provisions of the Employer's
pension plan applicable to such Member, or the termination of employment of a
Member on or after such Member's attainment of age 65.
1.38 "Rollover Contribution" means an amount which is transferred from
another plan to this Plan, in accordance with the provisions of Section 2.7
(Rollover Contribution From Other Plans).
1.39 "Rollover Contribution Account" means the separate Account
maintained for a Member to record such Member's share of the Trust Fund
attributable to any Rollover Contribution made to the Plan on his behalf.
1.40 "Service" means the period of employment beginning on the first
day the Eligible Employee performs duties for the Employer or an Affiliate and
ending on the day of quit, retirement, discharge or death, two years after the
commencement of absence on account of Parental Leave, or one year after an
absence for any other reason. All prior periods of employment with the Employer
or an Affiliate, and breaks in employment of less than one year shall be
included in Service. If a break in employment of not more than two years is on
account of Parental Leave not more than one year of Service shall be credited to
an Eligible Employee for a period of Parental Leave.
1.41 "Suspense Account" means the separate account maintained for a
Member who had monies credited to such account pursuant
<PAGE>
to Section 4.3 (Limitation of Annual Additions), reflecting the current dollar
value of such credit.
1.42 "Total and Permanent Disability" means permanent incapacity which
results in a Member being unable to engage in regular employment or occupation
by reason of any medically demonstrable physical or mental condition acceptable
to the Committee on a nondiscriminatory basis and which would entitle the Member
to benefits under the Employer's long-term disability plan, if any, or to Social
Security benefits as evidenced by a disability award letter. However, no Member
shall be deemed to be disabled if such incapacity (a) resulted from or consists
of habitual drunkenness or addiction to narcotics, or (b) was incurred, suffered
or occurred while the Member was engaged in, or resulted from having engaged in,
a criminal enterprise, or (c) was intentionally self-inflicted.
1.43 "Trustee" means the corporate trustee appointed from time to time
by the Company to administer the Trust Fund in accordance with Section 12.2
(Trustee).
1.44 "Trust Fund" means the trust fund established in accordance with
Section 12.1 (Trust Fund) from which benefits provided under this Plan will be
paid.
1.45 "Valuation Date" means the last business day of each calendar
month on which the New York Stock Exchange is open for trading.
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. Each person who was a member of a Prior
Plan shall become a member of the Plan on the effective date of the transaction
referred to in Section 1.34.
2.2 Eligible Employees on and after the Effective Date. On and after
the Effective Date an Eligible Employee may elect to become a Member on the
Initial Enrollment Date or any Enrollment Date thereafter. Notwithstanding the
foregoing, a former employee who is reemployed as an Eligible Employee following
a termination of employment and who, prior to termination, satisfied the
conditions for membership in the Plan, shall be eligible to become a Member of
the Plan immediately upon reemployment, subject to such advance notice
procedures as the Committee shall prescribe.
2.3 Completion of Appropriate Notice. In order to become a Member on
any Enrollment Date, an Eligible Employee must give the
<PAGE>
Appropriate Notice to the Committee at least 30 days (or such other period as
the Committee may prescribe) prior to that Enrollment Date.
2.4 Elections Upon Becoming A Member. An Eligible Employee, in giving
the Appropriate Notice specified in Section 2.3, shall (a) authorize the
Employer to reduce current compensation for Compensation Deferral Contributions
pursuant to Section 3.1 (Compensation Deferral Contributions ), (b) make an
investment election from among those options enumerated in Section 8.1
(Investment of Accounts other Than Employer Matching Contributions Accounts),
and (c) designate a Beneficiary in accordance with Section 2.5 (Beneficiary
Designation). Any such payroll authorization, investment election or Beneficiary
designation shall remain in effect until changed by giving the Appropriate
Notice to the Committee subject to the provisions of the Plan.
2.5 Beneficiary Designation. Each Member shall designate a Beneficiary
by giving the Appropriate Notice to the Committee. The designated Beneficiary
may be an individual, estate or trust; however, if the Member is married at the
time of such Member's death, such Member's surviving spouse shall automatically
be such Member's sole Beneficiary unless the spouse has consented in writing in
accordance with Section 10.9 (Spousal Consent) to a designation of a different
Beneficiary. If more than one individual or trust is named, the Member shall
indicate the shares and/or precedence of each individual or trust so named. Any
Beneficiary so designated may be changed by the Member at any time (subject to
his spouse's consent, if applicable) by giving the Appropriate Notice to the
Committee.
In the event that no Beneficiary has been designated or that no
designated Beneficiary survives the Member, the following Beneficiaries (if then
living) shall be deemed to have been designated in the following priority: (a)
spouse, (b) children, including adopted children, in equal shares, (c) parents,
in equal shares, or the Member's surviving parent, if only one parent survives,
and (d) Member's estate.
2.6 Transfers to or from Non-Covered Status. If a Member ceases to meet
the definition of Eligible Employee as set forth in Section 1.13 (Eligible
Employee) but continues to be an Employee or an employee of an Affiliate, such
Member's right to make or have contributions made on such Member's behalf to the
Plan shall be suspended. If during the period of suspension, a Member's
employment with the Employer or an Affiliate terminates for any reason, there
shall be a distribution of such Member's Accounts in accordance with the
provisions of Article X (Distribution).
If and when the suspended Member again becomes an Eligible Employee,
such Member may resume having Compensation Deferral
<PAGE>
Contributions made on such Member's behalf as of the second Enrollment Date
following the month in which the Appropriate Notice is given to the Committee.
2.7 Rollover Contributions From Other Plans. An Eligible Employee or an
individual who meets the definition of Eligible Employee in Section 1.13 except
for the age or service requirements, who is in receipt of a distribution which
is eligible to be "rolled over" to a qualified plan in accordance with
applicable Code sections may, in accordance with and subject to such rules and
procedures approved by the Committee, transfer all or part of such distribution
into the Plan; provided, that distributions which are so transferred to the Plan
shall consist only of cash and that such transfer shall be in conformity with
requirements set forth in the Code.
Upon approval by the Committee, the amount transferred to the Plan
shall be deposited in the Trust Fund in cash and shall be credited to a Rollover
Contribution Account.
If a Rollover Contribution is made on behalf of an individual who has
not yet become a Member, such individual shall be deemed a Member upon the
establishment of the Rollover Contribution Account; however, participation in
the Plan shall be limited to the Rollover Contribution Account until the other
requirements for membership under this Article II are fulfilled.
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. Each Member who is an Eligible
Employee may elect to have the Employer make Compensation Deferral Contributions
not to exceed $9,500 per year (subject to adjustment for inflation in accordance
with Section 415(d) of the Code) to the Plan on such Member's behalf to be
credited to such Member's Compensation Deferral Contributions Account, in which
case the cash compensation otherwise payable by the Employer to the Member shall
be reduced by an amount equal to the Compensation Deferral Contributions so
made. Subject to the limitations prescribed in Section 4.1 the amount of
Compensation Deferral Contributions in any payroll period shall be in whole
percentages from 1% to 17% of the Member's Compensation as the Member shall
designate (or such greater or lesser percentages as the Committee may from time
to time prescribe for the Plan).
The foregoing notwithstanding during the 'make up period,' as defined
below, a former Member (a 'Veteran') who is reemployed after a period of
military service may elect to have the Employer make additional Compensation
Deferral Contributions to the Plan
<PAGE>
on such Veteran's behalf, the total of which may not exceed the maximum
Compensation Deferral Contributions that the Veteran could have elected to have
made if no military leave had occurred. For the purposes of calculating the
amount of such additional Compensation Deferral Contributions the Veteran's
Compensation during such leave of absence shall be deemed to have been the
Veteran's annual rate of compensation at the time the military leave of absence
commenced (the 'Deemed Compensation Rate') and the 'make up period' during which
such additional Compensation Deferral Contributions may be elected shall be
equal to the lesser of five years or three times the period of the military
leave of absence. Such additional Compensation Deferral Contributions in any
payroll period shall be in whole percentages of the Veteran's current payroll
and shall not exceed the maximum amount that could have been deferred at the
Deemed Compensation Rate. In the event that the additional Compensation Deferral
Contributions to the Plan on a Veteran's behalf that are authorized by this
paragraph exceed the limitations set forth in Article IV of the Plan or
otherwise conflict with provisions of the Code or ERISA, such limitations or
conflicts shall be ignored to the extent permitted by Code Section 414(u).
3.2 Changes and Suspension of Contributions. Compensation Deferral
Contributions made on a Member's behalf may be increased or decreased or
suspended effective on the second Enrollment Date following the month in which
the Appropriate Notice is given to the Committee. A Member who has suspended
Compensation Deferral Contributions may resume having such contributions made on
his or her behalf commencing on the second Enrollment Date following the month
in which the Appropriate Notice is given to the Committee.
3.3 Transfer of Contributions to Trustee. Contributions made under this
Article III will be transferred to the Trustee by the 15th day of the month
following the month in which the contributions are withheld from the Member's
Compensation and/or in which the Member's cash compensation is reduced; provided
that all Compensation Deferral Contributions for a Plan Year shall be
transferred to the Trustee not later than 30 days after the end of the Plan
Year.
ARTICLE IV
Limitations on, and Distribution of, Excess Compensation Deferral
Contributions and Excess Employer Matching
Contributions of Highly Compensated Employees
<PAGE>
4.1 Limitations. The Committee in its sole discretion shall separately
limit the amount of Compensation Deferral Contributions and Employer Matching
Contributions made on behalf of each "Highly Compensated Employee" (as defined
below) for each Plan Year to insure that neither the Deferral Percentage nor the
Contributions Percentage (each as defined below and referred to herein as the
"Percentage") exceed the greater of (X) 125 percent of the Percentage in the
preceding Plan Year of all other eligible employees or, alternatively, (Y) the
Percentage in the preceding Plan Year of all other eligible employees plus 2
percentage points and the actual Percentage for the Highly Compensated Employees
is not more than two times the actual Percentage in the preceding Plan Year of
all other eligible employees.
Additionally, Employer Matching Contributions shall not in any event
discriminate in favor of Highly Compensated Employees.
For purposes of this Section, the term "Deferral Percentage" with
respect to any Plan Year means the Compensation Deferral Contributions for the
Plan Year divided by Compensation.
For purposes of this Section, the term "Contributions Percentage" with
respect to any Plan Year means the Employer Matching Contributions for the Plan
Year divided by Compensation.
For the purposes of this Section, the term "Highly Compensated
Employee" with respect to any Plan Year means an Eligible Employee or former
Eligible Employee who performed services during the Plan Year for which the
determination is being made and:
(a) at any time during such Plan Year or preceding Plan Year was a
5-percent owner of the Employer (as defined
for top-heavy plans under Code Sec. 416(1); or
(b) earned $80,000 or more in the preceding Plan Year (subject to
adjustment for inflation in accordance with Section 415(d) of the Code)
in annual Compensation from the Employer.
(1) For the purposes of this Section, the term "Compensation" means Compensation
within the meaning of Code Section 415(c)(3), including elective or salary
reduction contributions to a cafe-teria plan, cash or deferred arrangement or
tax sheltered annuity.
(2) For the purpose of this Section the term "Employer" shall also include all
other entities aggregated with the Employer under the requirements of Code
Section 414(b), (c), (m) and (o).
<PAGE>
For purposes of this Section, the Employer is permitted to determine
whether Members are in the category of Highly Compensated Employees or other
Eligible Employees based on the Member's Compensation for the immediately
preceding Plan Year or on estimated Compensation for the Current Plan Year in
accordance with uniform and nondiscriminatory rules whenever information
regarding actual Compensation for the Plan Year is not reasonably available at
the time the amount of a contribution hereunder is determined or limited.
For purposes of this Section the definition of "Compensation Deferral
Contributions" and "Employer Matching Contributions" shall include Compensation
Deferral Contributions and Employer Matching Contributions made under any other
plan that is aggregated with this Plan for purposes of Sections 401(a)(4) or
410(b) (other than Section 410(b)(2)(A)(ii)) of the Code and if any such plan is
permissively aggregated with this Plan for the purposes of Section 401(k) of the
Code, the plans so aggregated must also satisfy Section 401(a)(4) and 410(b) as
if they were a single plan. Further, for the purposes of this Section,
Compensation Deferral Contributions made on behalf of each Highly Compensated
Employee shall be determined by treating all cash or deferred arrangements under
which each such Highly Compensated Employee is eligible as a single arrangement.
4.2 Control of Contributions and Distribution of Excess.
(a) Rules For Compensation Deferral Contributions.The Committee may, in
accordance with uniform and nondiscriminatory rules it establishes from time to
time, require that Members who are among the Highly Compensated Employees for
the Plan Year make Compensation Deferral elections following and/or preceding
the completion of such elections by all other Eligible Employees and the
Committee may (X) limit the amount by which each Member who is among the Highly
Compensated Employees may elect to reduce his or her Compensation, and (Y)
subject to Section 402(g) of the Code permit each other Eligible Employee to
elect to reduce his or her Compensation within higher limits than those for
Highly Compensated Employees.
In the event that it is determined prior to the close of any Enrollment
Period that the amount of Compensation Deferral Contributions to be made with
respect to such Enrollment Period or Employer Matching Contributions in respect
thereof would cause the limitation contained in this Section to be exceeded for
the Plan Year in which such Enrollment Period occurs, the amount of Compensation
Deferral Contributions allowed to be made on behalf of Highly Compensated
Employees for such Enrollment Period shall be reduced. The Highly Compensated
Employees to whom the reduction is applicable, and the amount of the excess
Compensation Deferral Contributions, shall be determined by reducing the actual
Deferral Contributions of the Highly Compensated Employee
<PAGE>
or Employees with the highest actual Deferral Contributions to the extent
required to--
(i) enable the arrangement to satisfy the limitation set
forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or Employees'
actual Deferral Compensation to equal the Deferral Compensation of the
Highly Compensated Employee or Employees with the next highest actual
Deferral Compensation.
The "leveling" process described in paragraph (i) or (ii) shall be
repeated until the limitations set forth in this Section are satisfied.
If the Committee determines that the limitations contained in this
Section have not been met for any Plan Year, the Committee may return the excess
Compensation Deferral Contributions of Members who are Highly Compensated
Employees (calculated in the manner set forth above) to such Members within the
12-month period beginning after the last day of the Plan Year for which such
contributions were made. The amount of such excess Compensation Deferral
Contributions shall be adjusted to reflect any income or loss allocable to such
excess during the Plan Year determined in accordance with the alternative method
set forth in Reg. Section 1.401(k)-1(f)(4)(ii)(c) and also from the end of the
Plan Year to the date of distribution determined in accordance with the safe
harbor method set forth in Reg. Section 1.401(k)-1(f)(4)(2)(d).
For the purpose of this Section, if the Deferral Percentage of a Highly
Compensated Employee has been determined by combining the contributions and
compensation of only family members who are Highly Compensated Employees without
regard to family aggregation, then the excess Deferral Contributions for the
family unit shall be allocated among the family members in proportion to the
contribution of each family member that has been combined.
Alternatively, if the Deferral Percentage of a Highly Compensated
Employee has been determined by combining the contributions and compensation of
all family members, then the reduction in the Deferral Percentage of the family
group using the method described in this Section shall not be reduced below the
Deferral Percentage for the non-highly paid members of the family group and the
excess Compensation Deferral Contributions for the family unit shall be
allocated among the Highly Paid family members in proportion to their
contributions.
(b) Rules for Company Matching Contributions.
In the event that it is determined prior to the close of any Enrollment Period
that the amount of Company Matching Contributions
<PAGE>
to be made with respect to such Enrollment Period would cause the limitation
contained in this Section to be exceeded for the Plan Year in which such
Enrollment Period occurs, the amount of Company Matching Contributions allowed
to be made on behalf of Highly Compensated Employees for such Enrollment Period
shall be reduced. The Highly Compensated Employees to whom the reduction is
applicable, and the amount of the excess shall be determined by reducing the
Company Matching Contributions of the Highly Compensated Employee or Employees
with the highest actual Matching Contributions to the extent required to--
(i) enable the arrangement to satisfy the limitation set
forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or
Employees' actual Matching Contributions to equal the Matching
Contributions of the Highly Compensated Employee or Employees
with the next highest actual Matching Contributions.
The "leveling" process described in paragraph (i) or (ii) shall be
repeated until the limitations set forth in this Section are satisfied.
Excess Aggregate Contributions plus any income and minus any losses
allocable thereto, shall be forfeited, if not vested, or if not forfeitable,
distributed, no later than the last day of each Plan Year to those Participants
to whose Individual Accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Company Matching Contributions which are forfeited
shall be credited against Company Matching Contributions required to be made to
Participant's accounts in the Plan Year following the Plan Year that the excess
Company Matching contributions were allocated to Participant's accounts
provided, however, any excess which has not been so credited within two and one
half months after the end of the Plan Year shall be immediately refunded to the
Employer.
For the purposes of this Section, if the Contributions Percentage of a
Highly Compensated Employee has been determined by combining the contributions
and compensation of only family members who are Highly Compensated Employees
without regard to family aggregation, then excess Aggregate Contributions for
the family unit shall be allocated among the family members in proportion to the
share of each family member that has been combined.
Alternatively, if the Contributions Percentage of a Highly Compensated
Employee has been determined by combining the contributions and compensation of
all family members, then the reduction in the Contributions Percentage of the
family group using the method described in this Section shall not be reduced
below
<PAGE>
the Contributions Percentage for the non-highly paid members of the family
group and the excess Aggregate Contributions for the family unit shall be
allocated among the Highly Paid family members in proportion to their shares.
(c) Multiple Use Limitations. If the actual Deferral Percentage, the
actual Contribution Percentage, and the sum of the two percentages for the group
of Highly Compensated Employees in the Plan exceed the limits set forth in
Regs.1.401(m)-2(b) then in such case the required reduction of multiple use of
the alternate limitation shall be accomplished through reduction of the actual
Deferral Percentage for all Highly Compensated Employees eligible to participate
in the Plan in accordance with the procedures prescribed in Regs. 1.401(m)-2(b)
which are incorporated herein by reference.
4.3 Limitation of Annual Additions.
(a) Notwithstanding anything herein to the contrary, in no
event shall the Annual Additions (as hereinafter defined) with respect
to any Member in any Plan Year exceed the Maximum Annual Addition. A
Member's "Maximum Annual Additions" means the lesser of (i) 25% of the
Member's compensation reported on Form W-2 (after December 31, 1997,
compensation for the purposes of Annual Additions shall also include
elective or salary reduction contributions to a cafeteria plan, cash or
deferred compensation arrangement or tax sheltered annuity) or (ii) the
dollar limit in effect for such Plan Year in accordance with Section
415(c)(1)(A) of the Code ($30,000 as hereafter adjusted for inflation
in accordance with Section 415(d) of the Code),
(b) For purposes of this Section 4.3 the term "Annual
Additions" means the sum for any Plan Year of
(i) Compensation Deferral Contributions made in
accordance with Section 3.1 (Compensation Deferral
Contributions),
(ii) Employer Matching Contributions including
forfeitures as applied in accordance with Section 5.1 (Amount
of Employer Matching Contributions) and Section 5.2 (Treatment
of Forfeitures).
(iii) The amount of annual additions (within the
meaning of Section 415(c)(2) of the Code) under all other
qualified defined contribution plans of the Employer or an
Affiliate.
<PAGE>
(c) If the Member's Annual Additions exceed the Maximum Annual
Additions limitations in accordance with this Section 4.3, such amounts
shall not be contributed to the Trust or, if contributed by or on
behalf of a Member under the Plan shall be reduced in the following
order, but only to the extent necessary to meet the limitations: (i)
Compensation Deferral Contributions and (ii) Employer Matching
Contributions in respect of such reduced Compensation Deferral
Contributions.
(d) Combined Fraction.
(i) Notwithstanding the foregoing, for any Plan Year
beginning before January 1, 2000, if a Member is a participant
in any qualified defined benefit plan maintained by an
Employer or an Affiliate, the sum of the "Defined Benefit Plan
Fraction" (as defined below) and the "Defined Contribution
Plan Fraction" (as defined below) for such Member shall not
exceed 1.0 (called "Combined Fraction"). If for any Plan Year
the Combined Fraction of a Member exceeds 1.0 after
application of provisions for limitation of benefits under all
such qualified defined benefit plans, the Maximum Annual
Additions of such Member shall be reduced as provided in
Section 4.3(c) to the extent necessary to reduce the Combined
Fraction of such Member to 1.0.
(ii) The "Defined Benefit Plan Fraction" applicable
to a Member for any Plan Year is a fraction, the numerator of
which is the sum of the Projected Annual Benefit of the Member
under all of the qualified defined benefit Plans maintained by
the Employer or an Affiliate, (whether or not terminated) in
which such Member participates (determined as of the close of
the Plan Year) and the denominator of which is the lesser of
(A) the product of 1.25 multiplied by the maximum dollar
limitation on a Member's Projected Annual Benefit if the plan
provided the maximum benefit allowable under Section 415(b) of
the Code for such Plan Year, or (B) the product of 1.4
multiplied by 100% of the Member's Highest Average
Compensation.
Notwithstanding the above, if the Member was a
participant in one or more defined benefit plans maintained by
the Employer which were in existence on July 1, 1982, the
denominator of this fraction will not be less than 1.25
multiplied by the sum of the annual benefits under such plans
which the Member had accrued as of the later of September 30,
1983, or the last limitation year beginning before January 1,
1983. The preceding sentence applies only if defined benefit
plans individually and in the aggregate satisfied the
<PAGE>
requirements of Section 415 of the Code as in effect at the
end of the 1982 limitation year.
(iii) The "Defined Contribution Plan Fraction"
applicable to a Member for any Limitation Year is a fraction,
the numerator of which is the sum of the Member's Annual
Additions as of the close of such Plan Year for that Plan Year
and for all prior Plan Years under all of the defined
contribution plans maintained by an Employer or an Affiliate
in which Member participates, and the denominator of which is
the lesser of the following amounts (determined for such Plan
Year and for each prior Plan Year of service with the Employer
or any Affiliate regardless of whether a plan was in existence
during those years): (A) the product of 1.25 multiplied by the
dollar limitation in effect under Code Section 415(c)(1)(A)
for the Plan Year (determined without regard to the special
dollar limitation for employee stock ownership plans), or (B)
the product of 1.4 multiplied by twenty-five percent of the
Member's Compensation for the Plan Year.
(e) Definitions.
(i) "Highest Average Compensation" means the average
of a Member's high three consecutive Plan Years (determined as
of the close of the Plan Year) of employment with the Employer
or the actual number of years of employment for those Members
who are employed for less than three consecutive years with
the Employer.
(ii) "Projected Annual Benefit" means the annual
benefit a Member would receive from employer contributions
under a defined benefit plan, adjusted, in the case of any
benefit payable in a form other than a single life annuity or
a qualified joint and survivor annuity, to the actuarial
equivalent of a single life annuity, assuming (A) the Member
continues employment until reaching the plan's normal
retirement age (or the Member's current age, if later), (B)
compensation remains unchanged and (C) all other relevant
factors used to determine benefits under the plan remain
constant in the future.
(f) In the event that, notwithstanding the foregoing
provisions of this Section 4.3, the limitations with respect to Annual
Additions prescribed hereunder are exceeded with respect to any Member
and such excess arises as a consequence of reasonable error in
estimating a Member's compensation or such other circumstances as the
Secretary of Treasury shall permit, the Employer Matching Contributions
<PAGE>
portion of such excess shall be held in a Suspense Account and, if such
Member remains a Member, shall be used to reduce Employer Matching
Contributions for such Member for the succeeding Plan Years, and, if
such Member ceases participating in the Plan, shall be used to reduce
Employer Matching Contributions for all Members in the Plan Year of
cessation and succeeding Plan Years, as necessary. Compensation
Deferral Contributions which have been made to the Trust and are
reduced under Section 4.3(c) shall be refunded to the Member as soon as
administratively convenient. Any Employer Matching Contributions
including Forfeitures remaining upon Plan Termination which cannot be
allocated to Members in accordance with the foregoing in the Plan Year
of termination of the Plan shall be returned to the Employer.
(g) For purposes of this Section 4.3, the standard of control
for determining if a company is an Affiliate under Section 414(b) and
414(c) of the Internal Revenue Code shall be deemed to be "more than
50%" rather than "at least 80%."
ARTICLE V
Employer Matching Contributions
5.1 Amount of Employer Matching Contributions. The Employer shall make
matching contributions to the Plan, with respect to each payroll period on
behalf of each Member who is an Eligible Employee, equal to 50% (or such greater
percentage, not exceeding 100%, as the Board may from time to time authorize) of
that portion of the Member's Compensation Deferral Contributions which do not
exceed 6% (or such other percentage as the Board may from time to time permit)
of Compensation in such payroll period. The Board of Directors may, in its
discretion, discontinue Employer Matching Contributions with respect to Members'
Compensation Deferral Contributions for Compensation not yet earned on the date
such Employer Matching Contributions are discontinued.
5.2 Treatment of Forfeitures. Any amounts forfeited in accordance with
Sections 7.4 (Forfeitures) and 14.6 (Unclaimed Amounts) shall be applied as a
credit towards the amount of Employer Matching Contributions otherwise required
under Section 5.1. However, if pursuant to Section 5.1, Employer Matching
Contributions are discontinued, for Plan Years following the Plan Year in which
such discontinuance occurs, any such forfeited amounts in excess of the amounts
required to restore forfeited amounts to the Employer Matching Contributions
Accounts of Members who are reemployed in accordance with Section 7.4 shall be
allocated as of the last day of the Plan Year to the Member's Employer Matching
Contributions Accounts in an amount equal to the amount of such forfeited
amounts available for allocation
<PAGE>
multiplied by a fraction the numerator of which is the Member's Compensation
Deferral Contributions for the Plan Year not in excess of six percent of such
Member's Compensation and the denominator of which is the aggregate of all
Members' Compensation Deferral Contributions not in excess of six percent of all
such Members' Compensation.
5.3 Transfer of Contributions to Trustee. Employer Matching
Contributions under this Article V with respect to each payroll period shall be
paid to the Trustee as soon as practicable after the close of the month in which
such payroll period ends and such Employer Matching Contributions (inclusive of
the credit for forfeitures as provided in Section 5.2) shall be credited as of
the last day of such month to each Member's Employer Matching Contributions
Account.
ARTICLE VI
Accounts
6.1 Maintenance of Accounts. For each Member the Committee shall, where
applicable, cause a separate Compensation Deferral Contributions Account, an
Employer Matching Contributions Account, a Rollover Contribution Account and a
Prior Plan Account to be maintained. For Employee contributions made to a Prior
Plan which were not Compensation Deferral Contributions the Committee shall
continue to maintain a separate Employee Contributions Account.
6.2 Valuations. As of each Valuation Date, the Committee shall adjust
the Employee Contributions Account, the Compensation Deferral Contributions
Account, the Employer Matching Contributions Account, the Rollover Contribution
Account and Prior Plan Account, as applicable, for each Member to reflect his
share of contributions (including for this purpose contributions made after such
Valuation Date but credited as of such Valuation Date), amounts of interest paid
or accrued in respect of a loan made to such Member pursuant to Section 9.5,
withdrawals, distributions, forfeitures, income, expenses payable from the Trust
Fund and any increase or decrease in the value of Trust Fund assets since the
preceding Valuation Date. Each separate account maintained for each loan made to
a Member pursuant to Section 9.5 shall be valued as of each Valuation Date by
adjusting the balance of the loan for the payments of principal thereunder.
<PAGE>
ARTICLE VII
Vesting of Accounts
7.1 Employer Matching Contributions Account. A Member's interest in the
Member's Employer Matching Contributions Account shall become 100% vested after
completion of at least five years of service provided, however, that (a)
Employer Matching Contributions to accounts of Highly Compensated Employees
shall not be deemed to vest until the Deferral Percentage and Contributions
Percentage limitations set forth in Article IV have been satisfied and (b)
nothing herein shall delay vesting pursuant to the provisions of a Prior Plan.
7.2 Other Accounts. Interests in Compensation Deferral Contributions
Accounts, Prior Plan Accounts, Rollover Contribution Accounts and Employee
Contributions Accounts shall be fully vested at all times.
7.3 Earlier Vesting in Employer Matching Contributions Accounts.
Notwithstanding the foregoing, a Member's interest in his or her Employer
Matching Contributions Account shall be fully vested (a) on the date of
termination of employment by reason of death, Retirement or Total and Permanent
Disability, (b) when and if this Plan shall at any time be terminated for any
reason, (c) upon the complete discontinuance of contributions by the Employer
hereunder, or (d) upon partial termination of this Plan if such Member is a
member affected by such partial termination.
7.4 Forfeitures. A Member's Employer Matching Contributions Account
which is not vested in accordance with this Article VII at the time of such
Member's termination of employment shall be forfeited as of the last day of the
Valuation Period following the Valuation Period in which the Member has a
termination of employment. However, if a Member who has a termination of
employment is reemployed before the end of a period of five consecutive Plan
Years beginning with the Plan Year in which the Member has a termination of
employment and during which the Member is not an Employee on the last day of
each Plan Year, any forfeited amounts shall be restored to the Member's Employer
Matching Contributions Account provided, however, that any termination
distribution from the Employee's Compensation Deferral Contribution Account be
first returned to the Plan. For purposes of the preceding sentence, any Plan
Year in which a Member is absent from work on the last day of the Plan Year by
reason of a Parental Leave shall not be counted as one of the Plan Years in such
a period of five consecutive Plan Years and the Plan Year immediately preceding
the Plan Year immediately following a Plan Year in which such Member is absent
from work on the last day of the Plan Year by reason of Parental Leave shall be
deemed to be consecutive.
<PAGE>
Amounts required to be restored to the Employer Matching Contributions
Accounts of a Member shall be reinstated, to the extent not contributed by an
Employer, out of amounts forfeited under this Section 7.4 or 14.6 (Unclaimed
Amounts) for the Plan Year and, to the extent such forfeitures are not
sufficient, shall be charged ratably against income of the Trust Fund.
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts Other Than Employer Matching Contributions
Accounts. Upon becoming a Member, the Member shall direct that Compensation
Deferral Contributions and any Prior Plan Contributions, Rollover Contributions
or Employee Contributions be invested in increments of 5% in one or more of the
following Investment Funds (or such other Fund as may hereafter be approved by
the Committee) which individually and collectively are designed to conform to
DOL Regulation 2550.404c-1 for so-called Section 404(c) plans in order that
fiduciaries of the Plan may be relieved of liability for any losses which are
the direct and necessary result of a Member's investment directions:
(a) The Company Stock Fund, which is invested in Employer
Securities. Members will not be permitted to direct that an investment
be made in the Company Stock Fund unless and until the Member has
received a prospectus in respect of Employer Securities in the Company
Stock Fund which meets the requirements of the Securities Act of 1933
or in the opinion of counsel for the Company such investment may be
otherwise permitted.
(b) The Fixed Income Fund, which invests mainly in fixed
income investments that emphasize preservation of principal and seeks a
target rate of return over a period of at least six months.
(c) The Federated Bond Fund, seeks high income by investing in
a wide range of bonds, including lower-rated, high-yielding bonds.
(d) The Janus Fund, which seeks long-term growth by investing
in common stocks in companies of any size but with an emphasis on
larger companies.
(e) The Neuberger & Berman Guardian Trust Fund, which seeks
long-term growth and income by investing in stocks of established
high-quality companies considered to be undervalued in comparison with
stocks of similar companies.
<PAGE>
(f) The BT Investment International Equity Fund, which is
invested in stocks of established companies in countries with strong
economies primarily in Europe and the Pacific Basin. Investments in
companies outside the United States offer increased diversification
with broadened opportunity and potentially high returns.
(g) The Twentieth Century Ultra Fund, which seeks long-term
growth by investing in stocks of medium-size to large companies with
better than average growth potential.
(h) The BT Investment Equity Appreciation Fund, which is
invested in stocks of medium-sized companies in high-growth industries.
The Fund focuses on industries most likely to benefit from large scale
changes taking place in society. Investments in medium-sized companies
in high growth industries offers greater volatility than investments in
larger companies in mature industries.
(i) The BT Investment Small Cap Fund, which seeks long-term
growth by primarily investing in stocks of small U.S. companies with
superior growth potential. This fund may also invest up to 25% of its
assets in foreign stocks.
(j) Three BT Investment Lifecycle Funds, which are each
invested in a continuously monitored mix of stocks, bonds and money
market instruments keyed to the investor's investment term and risk
tolerance:
I. The Short Range Fund, concentrates on securities offering
high income yield with less potential for growth.
Suitable for investment terms of five or fewer years.
II. The Mid-Range Fund seeks a balance between investments
offering high income yield and those offering more growth
potential for the medium term.
III.The Long Range Fund pursues higher growth and income
investments while reducing exposure to market volatility
through the benefits of investing for longer terms.
8.2 Redirection of Future Contributions. A Member's investment
direction under Section 8.1 may be changed at any time and will be effective for
contributions received for the current month provided that the Appropriate
Notice is received by the Committee before 2 P.M. Eastern Time on the last
business day of
<PAGE>
the month. Such change in direction will not be effective as to amounts
previously contributed or invested.
8.3 Reinvestment of Prior Contributions.
(a) Effective on the Enrollment Date following the month in which
the Appropriate Notice is received by the Committee (not later than
2 P.M. Eastern Time on the last business day of the month) a Member
may direct that up to the total value in any Investment Fund holding
investments from the Member's Compensation Deferral Contributions
Account, Prior Plan Account, Rollover Contribution Account or Employee
Contributions Account be transferred from such Investment Fund to any
other Investment Fund in increments of 5%.
(b) The Committee may, in its sole discretion, impose at any
time or from time to time such restrictions on the transfers of monies
from one Investment Fund to another as it deems necessary or
appropriate.
8.4 Investment of Employer Matching Contributions Accounts. Employer
Matching Contributions shall be invested only in Employer Securities through the
Company Stock Fund.
8.5 Statements of Accounts And Confirmation of Investment
Directions.
(a) Statements of Accounts. Each Member shall be furnished a
quarterly statement of accounts. A like statement shall be
furnished to a Member upon any distribution being made under
the Plan.
(b) Confirmations of Investment Directions. All investment
directions given by Members under the Plan shall be confirmed
in writing.
8.6 Crediting of Accounts. Interests in each of the Investment Funds
shall be credited to each Member's Accounts as units of value determined
separately for each Investment Fund, as follows:
(a) the initial value of a unit in each Investment Fund shall
be one dollar,
(b) the unit of value of each Investment Fund shall be
redetermined on each Valuation Date by dividing the then fair market
value of all of the assets of such Investment Fund by the number of
units therein then outstanding. Amounts held as a result of forfeiture
shall not be included in the value of the Company Stock Fund in
determining the unit of value; and
<PAGE>
(c) current Compensation Deferral Contributions, Employer
Matching Contributions and Rollover Contributions will be credited to
the Member's Accounts as units of value, the number of which is
determined by dividing the dollar amount of the contribution by the
then current unit of value.
If a suspense account credited in accordance with Section 4.3(f) is in
existence on a Valuation Date, the number of units of value in the suspense
account shall be adjusted as of each Valuation Date so that such an account does
not participate in the Trust's investment gains or losses. To the extent a
Member's Compensation Deferral Contributions Account is invested pursuant to
Section 9.5 in a loan to a Member, the Member's Accounts shall be credited and
charged directly with income, gains, losses and expenses attributable to such
loan as of each Valuation Date and the value of the account will be adjusted
through the date of a distribution to reflect the value of such direct
investments on the distribution date. The Member's loan principal and interest
payments (i) shall be credited to the Member's Compensation Deferral
Contributions Account as units of value, the number of which is determined as of
the Valuation Date next following the date of such payment by dividing the
dollar amount of the payment by the then current unit of value and (ii) shall be
invested in accordance with the Member's investment directions for future
Compensation Deferral Contributions pursuant to Section 8.2.
8.7 Correction of Errors. In the event of an error in the adjustment of
a Member's Account, the Committee, in its sole discretion, may correct such
error by either crediting or charging the adjustment required to make such
correction to or against Forfeitures for the Plan Year or to or against income
as an expense of the Trust for the Plan Year in which the correction is made, or
if an Employer contributes an amount to correct any such error, from such
amount. Except as provided in this Section, the Accounts of other Members shall
not be readjusted on account of such error.
8.8 Investment of Deferred Distributions. Former Members of the Plan
shall have the same investment options for their Accounts as are available for
the Accounts of current Members of the Plan.
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. In any twelve-month period a Member
may make one withdrawal from the Plan that is not less than $500 or the combined
total of all of the eligible funds in
<PAGE>
the Member's Accounts from which withdrawals may be made. Eligibility includes:
(a) Hardship Eligibility. In the event of Hardship (as defined
in Section 9.2) before age 59-1/2, the entire balance in the Member's
Employee Contributions Account, Rollover Contribution Account or Prior
Plan Account, plus the sum of all contributions that have been credited
to a Member's Compensation Deferral Contributions Account to date
together with any Income allocable to such contributions as of December
31, 1988.
(b) Age 59-1/2 Eligibility. After a Member attains age 59-1/2
the vested portion of such Member's Employer Contributions Account,
plus the entire balance in all of the Member's other Accounts.
9.2 Hardship Withdrawals.
(a) Verification of Need. Each request for a hardship
withdrawal must be accompanied by a statement signed
by the Member attesting that the financial need cannot be relieved,
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of the Member's assets (including
those assets of the Member's spouse and minor children that
are reasonably available to the Member) to the extent such
liquidation will not itself cause immediate and heavy
financial need,
(iii) By ceasing Compensation Deferral Contributions
under the Plan, or
(iv) By other distributions or nontaxable (at the
time of the loan) loans from any plan maintained by the
Employer or any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
The Committee shall be entitled to rely on the Member's
statement of need without inquiry into the Member's financial
circumstances.
(b) Determination of Hardship. A withdrawal will be deemed
to be a hardship withdrawal if made on account of:
(i) Medical expenses incurred, or to be incurred, by
the Member, the Member's spouse, or any dependent,
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Member,
<PAGE>
(iii) Payment of tuition for the next year, semester
or quarter of post-secondary education for the Member, the
Member's spouse or any dependent,
(iv) The need to prevent the eviction of the Member
from the Member's principal residence or foreclosure on the
mortgage of the Member's principal residence,
(v) Such other immediate and heavy financial need as
the Commissioner of Internal Revenue may from time to time
publish by revenue rulings, notices and other documents of
general applicability, or
(vi) Any other immediate and heavy financial need as
determined on the basis of all relevant facts and
circumstances by the Committee in an objective and
nondiscriminatory manner in accordance with the requirements
of the Code and the applicable regulations and in accordance
with the following standards and principles:
(A) the need shall be due to an extra-
ordinary emergency,
(B) the need shall be heavy,
(C) the need shall be immediate,
(D) the need shall be for reasons of
hardship as commonly understood such as financial
expenses and not for entertainment or pleasure, and
(E) the need shall not fail to qualify as
immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred.
9.3 Values. All withdrawals under Sections 9.1 or 9.2 shall be based on
the values of Accounts as of the Valuation Date next following the date that the
Appropriate Notice was given to the Committee, or such other Valuation Date as
the Committee shall prescribe. Any withdrawal from any Account (or Subaccount
thereof) under Sections 9.1 and 9.2 shall be charged proportionately against
each Investment Fund described in Article VIII (Investment of Accounts) in which
such Account is invested.
9.4 Payment of Withdrawals. Any amount withdrawn under Section 9.1
shall be paid to a Member in a lump sum in cash, as soon as practicable after
the Valuation Date as of which the withdrawal election is effective provided,
however, that at the
<PAGE>
Member's request whole numbers of Employer Securities contained in the Member's
Account may be distributed in kind.
9.5 Loans. A Member who is a "party in interest" as defined in Section
3(14) of ERISA (a "Party in Interest") may borrow for any purpose from his or
her Employee Contributions Account, Compensation Deferral Contributions Account,
Prior Plan Account, if any, and Rollover Contribution Account in increments of
not less than $1,000 once in any twelve-month period an amount (inclusive of
current loans) of up to one half of the total of such accounts, but in any event
not more than $50,000 reduced by the excess (if any) of the highest balance of
existing loans during the preceding 12 months over the current loan.
For the purposes of the foregoing, any outstanding balance of
an existing loan shall be aggregated with any additional funds being borrowed in
order to calculate a Member's borrowing limit. Transactions for additional funds
shall be booked and documented at then current interest rates as a new loan.
All loans shall be made pursuant to such other procedures and terms as
shall be adopted by the Committee, subject to the following:
(a) A loan may remain outstanding so long as the borrower
remains a Party in Interest and shall be repayable within five years
from the date of borrowing upon such terms as may be determined by the
Committee; provided, however, that any loan of more than $15,000 used
to acquire the primary residence of a Member shall be repayable over a
period of up to ten years as determined by the Committee. A Member may
have no more than one primary residence loan and one loan for any other
purpose outstanding at any time.
The Committee may in its absolute discretion grant such loan
in accordance with such uniform and nondiscriminatory rules as it may
from time to time establish. Any such loan shall be made at a then
prevailing commercial rate of interest for similar credits on such
terms of repayment (in level payments not less frequent than monthly)
and subject to such rules and restrictions as the Committee shall
determine, provided that any such loans shall be available to all
Members on a reasonably equivalent basis and that any loan may be
repaid at any time without penalty.
All Member loans shall be secured on a dollar for dollar basis by up to
50% of the balance of the Accounts from which the loan is made. To the
extent a loan is unpaid, it shall be deducted from the amount payable
to such Member or such
<PAGE>
Member's beneficiary at the time of distribution of the Accounts from
which the loan was made;
(b) In the event that a Member fails to repay a loan according
to its terms and foreclosure occurs, the Plan may foreclose on the
portion of the Member's Accounts for which a distributable event has
occurred. In the event of foreclosure, a distributable event shall be
deemed to occur immediately following the next Valuation Date for any
portion of an Account with respect to which the Member or the Member's
Beneficiary would be permitted in accordance with Sections 9.1 or 10.1
to elect an immediate distribution;
(c) The receivable representing the loan (and other loans to
the same Member) will be accounted for by the Trustee as a separate
earmarked investment solely for the individual account of the Member. A
Member's payments to the Trust of principal and interest on the loan
shall be invested by the Trustee as elected by the Member in accordance
with the Member's investment directions for future contributions in
accordance with Section 8.2, as soon as reasonably practical;
(d) Loan applications may be made at any time by any Member by
giving the Appropriate Notice to the Committee or its designee at any
time.
(e) No loan shall remain outstanding after a Member is no
longer a Party in Interest. If a Member who is no longer a Party in
Interest elects under Section 10.7 not to file a claim for the
commencement of benefits when the Member's employment is terminated,
the balance of any outstanding loan must be repaid in full within sixty
(60) days.
(f) Loan Origination Fee. From time to time the Committee
may set a reasonable loan origination fee for each loan application.
Such fees shall be deducted from loan proceeds paid to loan applicants.
ARTICLE X
Distribution
10.1 Amount of Distribution. The Member or the Member's beneficiary, as
the case may be, shall not be entitled to elect to receive a distribution of the
vested value of the Member's account until:
(a) the Member's Retirement, termination of employment, death or
Permanent Disability, or
<PAGE>
(b) termination of the Plan without establishment or maintenance of a
successor plan, or
(c) the date of sale of substantially all of the assets of the Employer
to an acquiring corporation which continues the employment of the
Member without the establishment of a successor plan.
The vested value of the Member's Account shall be determined in
accordance with Article VII (Vesting of Accounts) as of the Valuation Date next
following such election except that in the case of the Member's Total and
Permanent Disability the vested value of the Member's account shall be
determined as of the Valuation Date next following the date the Committee
determines that the Member has a Total and Permanent Disability. In any event,
such Valuation Date shall be no later than the Valuation Date which immediately
precedes the Member's Required Beginning Date (or the date which would have been
the Member's Required beginning Date had the Member survived). Distributions
under the Plan to a Member's Beneficiary shall be completed not more than five
years after the Member's death.
10.2 Notice of Options and Normal Form of Distribution.
(a) Notice of Options.
(i) No less than thirty (30) nor more than ninety
(90) days prior to the date of any distribution hereunder the Plan
Administrator shall provide the Member with a general description of
the material features and an explanation of the relative values of the
optional forms of benefits available under the Plan.
(ii) If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribution may
commence less than thirty (30) days after the notice required under
Reg. Section 1.411(a)-11(c) is given, provided that:
(A) the Plan Administrator clearly informs the Member that the
Member has a right to a period of at least thirty (30) days
after receiving the notice to consider the decision of whether
or not to elect a distribution (and, if applicable, a
particular distribution option), and
(B) the Member, after receiving the notice, affirmatively
elects a distribution.
(iii) If the distribution is one to which sections 401(a)(11)
and 417 of the Code do apply such distributions
<PAGE>
may commence less than thirty (30) days after the notice required by
Section 10.8 provided that:
(A) The Plan Administrator clearly inform the Member that the
Member has a right to at least 30 days to consider whether to waive the
Qualified Joint and Survivor Annuity and consent to a form of
distribution other than a Qualified Joint and Survivor Annuity;
(B) the Member, after receiving the notice, affirmatively
elects (with spousal consent) to waive the Qualified Joint and Survivor
Annuity; and,
(C) Distribution in accordance with the affirmative election
does not commence before the expiration of the 7-day period that begins
the day after the explanation of the Qualified Joint and Survivor
Annuity is provided to the participant.
(b) Normal Form of Distribution. Unless otherwise elected in
accordance with Section 10.3 and subject to Section 10.7, distributions
shall be made by the Trustee as soon as practicable after the Valuation
Date next following the Member's (or the Member's Beneficiary's as the
case may be) election and written consent to receive a distribution of
the vested value of such Member's Account, in a single sum in cash
except that (i) at the Member's option Employer Securities held in the
Member's Account may be distributed in kind and (ii) in the discretion
of the Committee, a note with respect to a Participant's loan from such
Member's Compensation Deferral Account may be distributed in kind.
10.3 Alternate Form of Distribution. A Member may request to have the
value of such Member's Accounts distributed in a manner other than in accordance
with Section 10.2. For any portion of such Member's benefits accrued before May
1, 1995 that become distributable under the Plan after May 1, 1995 such
alternate form of payment may be an annuity contract pursuant to Section 10.8 or
periodic installments of all benefits commencing at such time as the Member
shall elect in accordance with the Plan payable over a fixed period not to
exceed the lesser of ten years or the life expectancy of the Member at the time
payments commence. Payment of any interest in the Company Stock Fund in a
Member's Accounts, if any, to which the Member has a nonforfeitable interest may
be made in cash solely for the purpose of effecting such an alternate form of
distribution.
Distributions will be made in accordance with the requirements of the
regulations under Code Section 401(a)(9), including the minimum distribution
incidental benefit requirements of Proposed Regulations Section 1.401(a)(9)-2.
Such minimum distribution
<PAGE>
requirements shall supersede any distribution options in the Plan that are
inconsistent therewith.
10.4 Identity of Payee. The determination of the Committee as to the
identity of the proper payee of any benefit under the Plan and the amount of
such benefit properly payable shall be conclusive, and payment in accordance
with such determination shall constitute a complete discharge of all obligations
on account of such benefit.
10.5 Non-alienation of Benefits.
(a) No benefit payable at any time under this Plan shall be
subject in any manner to alienation, sale, transfer, assignment,
pledge, attachment, or other legal processes, or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign pledge or
otherwise encumber any such benefits, whether currently or thereafter
payable, shall be void. No benefit, nor any fund which may be
established for the payment of such benefits, shall, in any manner, be
liable for or subject to the debts or liabilities of any person
entitled to such benefits. If any person shall attempt to, or shall
alienate, sell, transfer, assign, pledge or otherwise encumber benefits
to which such person may become entitled under this Plan, or if by
reason of such person's bankruptcy or other event happening at any
time, such benefits would devolve upon any other person or would not be
enjoyed by the person entitled thereto under the Plan, then the
Committee, in its discretion, may terminate the interest in any such
benefits of the person entitled thereto under the Plan and hold or
apply them to or for the benefit of such person entitled thereto under
the Plan or such person's spouse, children or other dependents, or any
of them, in such manner as the Committee may deem proper.
(b) Notwithstanding Section 10.5(a), the Trustee
(i) shall comply with an order entered on or after
January 1, 1985, determined by the Committee to be a Qualified
Domestic Relations Order as provided in Section 10.6 and
(ii) may treat an order entered before January 1,
1985, as a Qualified Domestic Relations Order even if it does
not meet the requirements of Section 10.6.
(iii) shall comply with a Federal tax levy made
pursuant to Code Section 6331 and with collection proceedings
by the United States on a judgment resulting from an unpaid
tax assessment.
<PAGE>
10.6 Qualified Domestic Relations Order.
(a) The Plan shall comply with the provisions of Code Section
414(p) relating to qualified domestic relations orders and all
regulations pertaining thereto.
(b) An alternate payee's interest in the Plan will be
distributed in the form of a single sum as soon as practicable after a
proposed order is determined to be a qualified domestic relations
order.
10.7 Commencement of Benefits. Unless a Member elects otherwise, the
payment of benefits under the Plan shall begin not later than the 60th day after
the latest of the close of the Plan Year in which:
(a) the Member attains age 65;
(b) the 10th anniversary of the date the Member's
participation in the Plan occurs;
(c) the Member's employment with the Employer or an Affiliate
is terminated.
provided that, except as provided in Section 10.10, no benefits shall be
distributed unless the Member has filed a claim for benefits until the Valuation
Date immediately preceding the Required Beginning Date and further provided that
benefits shall commence to be distributed to the Member not later than the
Member's Required Beginning Date.
10.8 Annuities. If the form of distribution is to be an annuity
contract, it may be in such form and with such provisions as the Member or the
Member's Beneficiary, as the case may be, may elect which are available for
purchase from an insurance company including, but not limited to, a full cash
refund life annuity, an annuity with income for life or an annuity with income
for a period certain (payable at least annually). Such distribution is to be
provided through the purchase from an insurance company and distribution from
the Trust Fund of a nontransferable annuity contract; provided the benefit under
such annuity contract cannot be paid to anyone other than the Member prior to
the Member's death, and if a joint and survivor annuity is provided, unless such
joint annuitant shall be the Member's spouse, the actuarial value of the
Member's benefits, as of the date benefit payments commence, shall be more than
50 percent (50%) of the Member's vested Accounts.
<PAGE>
(a) Limitation on Member Elections. Notwithstanding any
elections made by the Member, benefit payments shall be made over a
period not in excess of the life of the Member or the lives of the
Member and the Member's Beneficiary or the Member's life expectancy or
the joint and last survivor life expectancy of the Member and the
Member's Beneficiary. In the event the annuity benefits have commenced
to be paid to a Member before the Member's death the remaining interest
will be distributed at least as rapidly as under the election made by
the Member prior to the date of death.
(b) Qualified Joint and Survivor Annuities. Notwithstanding
the foregoing provisions of this Section 10.8, in the case of a Member
who has elected to receive an annuity form of benefit, distribution
shall be in the form of a Qualified Joint and Survivor Annuity, unless
the Member with the Member's spouse's consent as provided in Section
10.9 elects to receive a different form of annuity. The term "Qualified
Joint and Survivor Annuity" means an annuity payable to the Member for
life and, if the Member's spouse survives the Member, a survivor
annuity payable to the spouse for life in an amount equal to 50 percent
(50%) of the annuity payable to the Member. If the Member who has
elected to receive an annuity form of benefit is not married, subject
to Section 10.6 (Qualified Domestic Relations Order), the annuity shall
be paid in the form of a single life annuity unless the Member waives
the single life annuity. The amount of the benefits payable under a
Qualified Joint and Survivor Annuity shall be the amount which can be
purchased from an insurance company with the Member' Accounts.
(c) A Member who elects to receive benefits in the form of a
life annuity and to whom benefits would be payable in the form of a
Qualified Joint and Survivor Annuity pursuant to this Section 10.8
shall have the right to waive a Qualified Joint and Survivor Annuity,
such waiver shall be consented to by the Member's spouse in writing in
accordance with Section 10.9 by delivering written notice to the
Committee, at any time within the 90-day period prior to the annuity
starting date, to receive a different form of an annuity, the Committee
shall within a reasonable period of time provide the Member, by
personal delivery or first class mail, with a written explanation of:
(i) the terms and conditions of the Qualified Joint
and Survivor Annuity;
<PAGE>
(ii) the Member's right to make, and the effect of,
an election to waive the Qualified Joint and Survivor Annuity;
(iii) the rights of the Member's spouse to consent to
the Member's election to waive the Qualified Joint and
Survivor Annuity and the effect of consenting to such waiver;
and
(iv) the Member's right to make, and the effect of, a
revocation of an election to waive the Qualified Joint and
Survivor Annuity.
Any election made by a Member pursuant to Sections 10.8(b) and 10.8(c)
may be revoked by such Member by delivering written notice to the Committee at
any time prior to the Member's annuity starting date and, once revoked, may be
made again at any time by delivering written notice to the Committee prior to
the Member's annuity starting date.
10.9 Spousal Consent. A valid spousal consent to the Member's naming of
a Beneficiary other than the Member's spouse or to the Member's waiver of a
Qualified Joint and Survivor Annuity as defined in Section 10.8(b) shall be
designated:
(a) in a writing acknowledging the effect of the consent;
(b) witnessed by a notary public; and
(c) effective only for the spouse who exercises the consent;
provided that, notwithstanding the provisions of this Article X, the consent of
a Member's spouse shall not be required if it is established to the satisfaction
of the Plan Administrator that such consent 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 by regulations prescribe.
10.10 Lump Sum Payment Without Election. Notwithstanding any other
provision of this Article X, if a Member or a Beneficiary is entitled to a
distribution and if the vested value of a Member's Account or the vested value
of the Beneficiary's share of the Member's Account before benefits are paid or
commence to be paid hereunder does not exceed (and at the time of any previous
distribution did not exceed) $3,500, the Committee may in accordance with
uniform and nondiscriminatory rules direct the immediate distribution of such
benefit to the person entitled thereto regardless of any election or consent of
the Member, the Member's spouse or other Beneficiary.
<PAGE>
10.11. Trustee to Trustee Transfers.
(a) A Member who receives an Eligible Rollover
Distribution after December 31, 1992 may elect to have such
distribution paid directly to an Eligible Retirement Plan by specifying
in the Appropriate Notice the Eligible Retirement Plan to which such
distribution is to be paid in a direct trustee to trustee transfer
pursuant to such uniform rules as to the form and time of transfer as
the Committee shall prescribe.
(b)(i) "Eligible Rollover Distribution." An Eligible Rollover
Distribution is any distribution of all or a portion of the balance to
the credit of the Member distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Member
distributee or the joint lives (or joint life expectancies) of the
Member distributee and the Member's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
( determined without regard to the exclusion for net unrealized
appreciation with respect to Employer Securities).
(b)(ii) "Eligible Retirement Plan." An Eligible Retirement
Plan is an individual retirement account described in section
408(a) of the Code, an individual retirement annuity described
in section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the Member
distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
spouse of a Member, an Eligible Retirement Plan is an
individual retirement account or an individual retirement
annuity.
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator. The Committee shall be the Plan
Administrator:
<PAGE>
(a) The Committee shall administer, enforce and interpret the
Plan and the trust agreement established hereunder and shall have the
powers necessary thereto, including but not by way of limitation the
powers to exercise its responsibilities in accordance with Sections 1.3
(Appropriate Notice), 1.9 (Compensation), 1.21 (Enrollment Date), 1.29
(Leave of Absence), 1.42 (Total and Permanent Disability), Article II
(Eligibility and Membership) 3.1 (Compensation Deferral Contributions),
3.2 (Changes and Suspension of Contributions), 4.1 (Limitations), 6.1
(Maintenance of Accounts), 6.2 (Valuations), Article VIII (Investment
of Accounts), Article IX (Withdrawals and Loans During Employment),
12.6 (Disbursement of Funds), Article XIV (Miscellaneous), and the
remainder of this Article XI, and
(b) Authority to hold the funds of the Plan shall be
delegated to the Trustee in accordance with Section 12.2 (Trustee), and
(c) Authority to direct the investment of the Plan's funds
shall be delegated to an Investment Manager in accordance with Section
12.3 (Investment Manager).
With respect to all other responsibilities of the Plan Administrator
the Committee shall act through its duly authorized officers and agents.
11.2 Board of Directors. With respect to Sections 5.1 (Amount of
Employer Matching Contributions), 11.8 (Personal Liability), 13.1 (Right to
Amend) and 13.2 (Suspension or Termination) the Employer shall act only by or
pursuant to, a resolution of the Board of Directors.
11.3 Appointment of the Committee. The Committee shall be the
Benefits Administration Committee.
11.4 Compensation, Expenses. All proper expenses required for the
administration of the Plan incurred by the Committee, the Employer, an
Investment Manager or the Trustee for accounting, legal and other professional,
consulting or technical services, including fees and expenses of a recordkeeper,
the Trustee or any Investment Manager shall be paid by the Trust.
11.5 Committee Actions, Agents. The Committee may appoint such agents,
who need not be members of the Committee, as it may deem necessary for the
effective performance of its duties and may delegate to such agents such powers
and duties as the Committee may deem expedient or appropriate.
Any action of the Committee, including but not by way of limitation,
instructions to the Trustee, shall be evidenced by
<PAGE>
the signature of a member who has been so authorized by the Committee to sign
for it, and the Trustee shall be fully protected in acting thereon. A
certificate of the secretary or an assistant secretary of the Committee setting
forth the name of the members thereof shall be sufficient evidence at all times
as to the persons then constituting the Committee.
11.6 Committee Meetings. The Committee shall hold meetings upon such
notice, at such time and place as they may determine. The Committee shall act by
a majority of its members at the time in office and such action may be taken
from time to time by a vote at a meeting or in writing without a meeting. A
majority of the members of the Committee at the time in office shall constitute
a quorum for the transaction of business.
11.7 Authority and Duties of the Committee. The Committee may from time
to time establish rules for the administration of the Plan. The Committee shall
have the exclusive right to interpret the Plan and to decide any matters arising
thereunder in connection with the administration of the Plan. It shall endeavor
to act by general rules so as not to discriminate in favor of any person. Its
decisions and the records of the Committee shall be conclusive and binding upon
the Employer, Members and all other persons having an interest under the Plan.
No member of the Committee shall be disqualified from exercising the powers and
discretion herein conferred by reason of the fact that the exercise of any such
power or discretion may affect the payment of benefits to such member under the
Plan; however, no member may vote on a matter relating exclusively to such
member. To the extent that it is administratively feasible, the period of notice
required for Members' elections to commence, change or suspend contributions
hereunder or to make or change investment elections for either future
contributions or existing accounts may be relaxed, reduced or eliminated by the
Committee in accordance with uniform and non-discriminatory rules.
The Committee shall keep or cause to be kept all records and other data
as may be necessary for the administration of the Plan.
11.8 Personal Liability. To the extent not contrary to the provisions
of ERISA, no member of the Committee, officer, director or employee of an
Employer shall be personally liable for acts done in good faith hereunder unless
resulting from such member's own negligence or willful misconduct. Each such
member of the Committee, officer and director shall be indemnified by the
Employer against expenses reasonably incurred by such member in connection with
any action to which he may be a party by reason of such member's
responsibilities hereunder, except in relation to matters as to which such
member shall be adjudged in such action to be liable for negligence or
misconduct in the performance of such member's duty. However, nothing in this
Plan
<PAGE>
shall be deemed to relieve any person who is a fiduciary under the Plan for
purposes of ERISA from any responsibility or liability which such Act shall
impose upon such member.
11.9 Dealings Between the Committee and Individual Members. Any notice
required to be given to, or any document required to be filed with, the
Committee will be properly given or filed if mailed by registered or certified
mail, postage prepaid, or delivered to the Chairman of the Benefits
Administration Committee, c/o U.S. Industries, Inc. 101 Wood Avenue South,
Iselin, New Jersey 08830, or to such other place as the Committee may hereafter
from time to time designate.
The Committee shall make available to such Member for examination, such
of its records as pertain to the benefits to which such Member shall be entitled
under the Plan.
11.10 Information To Be Supplied by the Employer. The Employer shall
provide the Committee or its delegate with such information as it shall from
time to time need in the discharge of its duties.
11.11 Records. The regularly kept records of the Committee and the
Employer shall be conclusive evidence of the Credited Service and Service of an
Employee, the Employee's Compensation, age, marital status, status as an
Employee, and all other matters contained therein applicable to this Plan;
provided that an Employee may request a correction in the record of age or any
other disputed fact at any time prior to retirement. Such correction shall be
made if within 90 days after such request the Employee furnishes the Committee
in support thereof documentary proof of age or the other disputed fact
satisfactory to the Committee.
11.12 Fiduciary Capacity. Any person or group of persons may serve in
more than one fiduciary capacity with respect to the Plan.
11.13 Fiduciary Responsibility. If a Plan fiduciary acts in
accordance with ERISA, Title I, Subtitle B, Part 4,
(a) in determining that a Member's spouse has consented to the
naming of a Beneficiary other than the spouse or that the consent of
the Member's spouse may not be obtained because there is no spouse, the
spouse cannot be located or other circumstances prescribed by the
Secretary of the Treasury by regulations, then to the extent of
payments made pursuant to such consent, revocation or determination,
the Plan and its fiduciaries shall have no further liability; or
(b) in treating a domestic relations order as being (or not
being) a Qualified Domestic Relations Order, or, during any period in
<PAGE>
which the issue of whether a domestic relations order is a Qualified
Domestic Relations Order is being determined (by the Committee, by a
court of competent jurisdiction, or otherwise), in separately
accounting for the amounts which would have been payable to the
alternate payee during such period if the order had been determined to
be a Qualified Domestic Relations Order, in paying the amounts
separately accounted for to the person entitled thereto if within 18
months the domestic relations order (or a modification thereof) is
determined to be a Qualified Domestic Relations Order, in paying such
amounts to the person entitled thereto if there had been no order if
within 18 months the domestic relations order is determined not to be
qualified or if the issue is not resolved within 18 months and in
prospectively applying a domestic relations order which is determined
to be qualified after the close of the 18-month period, then the
obligation of the Plan and its fiduciaries to the Member and each
alternate payee shall be discharged to the extent of any payment made
pursuant to such acts.
11.14 Claim Procedure.
(a) Each Member or Beneficiary ("Claimant") may submit an
application for benefits ("Claims") to the Committee or to such other
person as may be designated by the Committee in writing in such form as
is provided or approved by the Committee. A Claimant shall have no
right to seek review of a denial of benefits, or to bring any action in
any court to enforce a Claim prior to filing a Claim and exhausting all
rights to review in accordance with this Section.
When a Claim has been filed properly, such Claim shall be
evaluated and the Claimant shall be notified of the approval or the
denial of the Claim within ninety (90) days after the receipt of such
Claim unless special circumstances require an extension of time for
processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial ninety (90) day
period, which notice shall specify the special circumstances requiring
an extension and the date by which a final decision will be reached
(which date shall not be later than one hundred and eighty (180) days
after the date on which the Claim was filed). A Claimant shall be given
a written notice in which the Claimant shall be advised as to whether
the Claim is granted or denied, in whole or in part. If a Claim is
denied, in whole or in part, the notice shall contain (1) the specific
reasons for the denial, (2) references to pertinent Plan provisions
upon which the denial is based, (3) a description of any additional
<PAGE>
material or information necessary to perfect the Claim and an
explanation of why such material or information is necessary, and (4)
the Claimant's rights to seek review of the denial.
(b) If a Claim is denied, in whole or in part, the Claimant
shall have the right to (i) request that the Committee (or
such other person as shall be designated in writing by the
Committee) review the denial, (ii) review pertinent documents,
and (iii) submit issues and comments in writing, provided that
the Claimant files a written request for review with the
Committee within sixty (60) days after the date on which the
Claimant received written notification of the denial. Within
sixty (60) days after a request for review is received, the
review shall be made and the Claimant shall be advised in
writing of the decision on review, unless special
circumstances require an extension of time for processing the
review, in which case the Claimant shall be given a written
notification within such initial sixty (60) day period
specifying the reasons for the extension and when such review
shall be completed within one hundred and twenty (120) days
after the date on which the request for review was filed. The
decision on review shall be forwarded to the Claimant in
writing and shall include specific reasons for the decision
and references to Plan provisions upon which the decision is
based. A decision on review shall be final and binding on all
persons for all purposes. If a Claimant shall fail to file a
request for review in accordance with the procedures herein
outlined, such Claimant shall have no rights to review and
shall have no right to bring action in any court and the
denial of the Claim shall become final and binding on all
persons for all purposes.
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund. All assets of the Plan shall be held in trust as a
Trust Fund for the exclusive benefit of Members and their Beneficiaries, and no
part of the corpus or income shall be used for or diverted to any other purpose.
No person shall have any interest in or right to any part of the Trust Fund,
except to the extent provided in the Plan.
<PAGE>
12.2 Trustee. All contributions to the Plan shall be paid to a Trustee
or Trustees which shall be appointed from time to time by the Company by
appropriate instrument with such powers in the Trustee as to control and
disbursement of the funds as the Company shall approve and as shall be in
accordance with the Plan. The Company may remove any Trustee at any time, upon
reasonable notice and upon such removal or upon the resignation of any Trustee
the Company shall designate a successor Trustee.
12.3 Investment Manager. In accordance with the terms of the trust
agreement, the Company may appoint one or more Investment Managers (individuals
and/or other entities), who may include the Trustee and who are collectively
referred to herein as the Investment Manager, to direct the investment and
reinvestment of part or all of the Plan's funds that are not invested in
Employer Securities. The Company may change the appointment of the Investment
Manager from time to time.
12.4 Purchase and Holding of Securities. As soon as convenient after
receiving contributions, the Trustee shall:
(a) in the case of contributions which are to be invested in
Employer Securities purchase Employer Securities in the open market,
and register and hold such securities in the name of the Trustee or its
nominee;
(b) in the case of contributions which are to be invested in
the Fixed Income Fund, purchase group annuity contracts or make other
investment arrangements that in the aggregate will provide the target
rate of return; and,
(c) In the case of any of the managed funds listed in Section
8.1 (c) through (j), purchase and hold shares in such funds in
accordance with the directions of Plan Members.
12.5 Voting of Employer Securities. For shareholders' meetings Members
shall be furnished proxy material and a form for instructing the Trustee how to
vote the Employer Securities represented by units credited to their Accounts,
and the Trustee shall vote or otherwise exercise shareholder rights with respect
to such Employer Securities as instructed. The Trustee shall hold such
instructions in confidence and shall not divulge them to anyone, including, but
not limited to, the Employer, its officers or employees.
Shares for which no instructions are received shall be voted by the
Trustee in the same proportion as those shares for which instructions have been
received. With respect to the exercise of shareholder's rights to sell or retain
the Employer Securities represented by units credited to a Member's Accounts in
extraordinary instances involving an unusual price and terms
<PAGE>
and conditions for such securities such as a tender offer, the Trustee shall act
in accordance with the Committee's instructions.
12.6 Disbursement of Funds. The funds held by the Trustee shall be
applied, in the manner determined by the Committee, to the payment of benefits
to such persons as are entitled thereto in accordance with the Plan.
The Committee shall determine the manner in which the funds of the Plan
shall be disbursed in accordance with the Plan, including the form of voucher or
warrant to be used in authorizing disbursements and the qualification of persons
authorized to approve and sign the same and any other matters incident to the
disbursement of such funds.
12.7 Exclusive Benefit of Members. All contributions under the Plan
shall be paid to the Trustee and deposited in the Trust Fund and shall be held,
managed and distributed solely in the interest of the Members and beneficiaries
for the exclusive purpose of (1) providing benefits to Members and beneficiaries
and (2) defraying reasonable administrative expenses of the Plan and the Trust,
to the extent such expenses are not paid by the Company or an Affiliate provided
that:
(a) if a timely determination letter request is filed and the Plan is
denied initial qualification under Section 401(a) of the Code,
contributions conditioned upon such qualification shall be returned to
the Company or the Affiliate making such contributions within one year
of the denial of qualification;
(b) if, and to the extent, a deduction for a contribution under Section
404 of the Code is disallowed, contributions conditioned upon
deductibility shall be returned to the Company or the Affiliate making
such contribution within one year after the disallowance of the
deduction; and
(c) if, and to the extent, a contribution is made through a good faith
mistake of fact, such contribution shall be returned to the Company or
the Affiliate making such contribution within one year.
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend. The right to modify or amend the provisions of the
Plan in whole or in part at any time or from time to time is reserved to the
Company, but no such amendment
<PAGE>
shall divest any Member of any amount previously credited to a Member's Accounts
or, except to the extent permitted by the Secretary of the Treasury by
regulation, shall eliminate with respect to a Member's Account balance at the
time of such amendment an optional form of benefit, and further provided that no
part of the assets of the Trust Fund shall, by reason of any modification or
amendment, be used for or diverted to, purposes other than for the exclusive
benefit of Members and their Beneficiaries, under the Plan.
13.2 Suspension or Termination. The Employer may at any time suspend
Employer Matching Contributions and Compensation Deferral Contributions in whole
or in part. The suspension of Employer Matching Contributions and Compensation
Deferral Contributions shall not in itself constitute a termination of the Plan.
The Employer may at any time terminate or discontinue the Plan by filing with
the Committee a certified copy of the resolution of its board of directors
authorizing the termination or discontinuance.
If the Plan is terminated, no further contributions shall be made by
the Employer and the Account of each Member shall be applied for the Member's
(or the Member's Beneficiary's) benefit either by payment in cash or in kind, or
by the continuation of the Trust Fund in accordance with the trust instrument
and the provisions of the Plan as though the Plan were otherwise in full force
and effect.
13.3 Merger, Consolidation of Transfer. In the case of any merger, or
consolidation with, or transfer of assets or liabilities to any other plan, each
Member in the Plan 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 such Member would have been entitled to receive
immediately before the merger consolidation, or transfer (if the Plan had then
terminated).
ARTICLE XIV
Miscellaneous
14.1 Uniform Administration. Whenever, in the administration of the
Plan, any action is required by the Employer or the Committee, including, but
not by way of limitation, action with respect to eligibility or classification
of employees, contributions or benefits, such action shall be uniform in nature
as applied to all persons similarly situated and no such action shall be taken
which will discriminate in favor of Members who are officers or significant
shareholders of the Employer or persons whose principal duties consist of
supervising the work of other employees or highly compensated Members.
<PAGE>
14.2 Payment Due an Incompetent. If the Committee determines that any
person to whom a payment is due hereunder is incompetent by reason of physical
or mental disability, the Committee shall have power to cause the payments
becoming due to such person to be made to another for the benefit of the
incompetent, without responsibility of the Committee or the Trustee to see to
the application of such payment. Payments made in accordance with such power
shall operate as a complete discharge of all obligations on account of such
payment of the Committee, the Trustee and the Trust Fund.
14.3 Source of Payments. All benefits under the Plan shall be paid or
provided solely from the Trust Fund and the Employer assumes no liability or
responsibility therefor, except to the extent required by law.
14.4 Plan Not a Contract of Employment. Nothing herein contained shall
be deemed to give any Eligible Employee or Member the right to be retained in
the employ of the Employer or to interfere with the right of the Employer to
discharge any Eligible Employee or Member at any time.
14.5 Applicable Law. Except to the extent governed by Federal law the
Plan shall be administered and interpreted in accordance with the laws of the
State of New York.
14.6 Unclaimed Amounts. It shall be the duty and responsibility of a
Member or a Beneficiary to keep the Committee apprised of such Member's
whereabouts and of such Member's current mailing address. Unclaimed amounts
shall consist of the amounts of the Accounts of a retired, deceased or
terminated Member which cannot be distributed because of the Committee's
inability, after a reasonable search, to locate a Member or a Member's
Beneficiary within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts for a Plan Year shall be Forfeitures for the Plan
Year in which such two-year period shall end. Such Forfeitures shall be treated
as provided in Section 5.2.
If an unclaimed amount is subsequently properly claimed by the Member
or the Member's Beneficiary ("Reclaimed Amount") and unless an Employer in its
discretion makes a contribution to the Plan for such year in an amount
sufficient to pay such Reclaimed Amount to the extent that the Reclaimed Amount
originated as an unclaimed amount, it shall be charged against Forfeitures for
the Plan Year and, to the extent such Forfeitures are not sufficient, shall be
treated as an expense of the Trust Fund.
<PAGE>
ARTICLE XV
Top Heavy Provisions
15.1 Application. The definitions in Section 15.2 shall apply under
this Article XV and the special rules in Section 15.3 shall apply in accordance
with Code Section 416, notwithstanding any other provisions of the Plan, for any
Plan Year in which the Plan is a Top Heavy Plan and for such other Plan Years as
may be specified herein. This Article XV shall have no effect on the amount of
or eligibility for benefits under the Plan of a Member unless and until the Plan
becomes a Top Heavy Plan.
15.2 Special Top Heavy Definitions. The following special definitions
shall apply under this Article XV.
(a) "Aggregate Employer Matching Contributions" means the sum
of all Employer Matching Contributions including amounts contributed as
a result of a salary reduction agreement and Forfeitures under this
Plan allocated for a Member to the Plan and employer contributions and
forfeitures allocated for the Member to all Related Defined
Contribution Plans in the Aggregation Group; provided, however, that
for Plan Years beginning before January 1, 1985, Compensation Reduction
Contributions under this Plan and employer contributions attributable
to compensation reduction or similar arrangement under Related Defined
Contribution Plans shall not be included in Aggregate Employer Matching
Contributions.
(b) "Aggregation Group" means the group of plans in a
Mandatory Aggregation Group, if any, that includes the Plan, unless
inclusion of Related Plans in the Permissive Aggregation Group in the
Aggregation Group would prevent the Plan from being a Top Heavy Plan,
in which case "Aggregation Group" means the group of plans consisting
of the Plan and each other Related Plan in a Permissive Aggregation
Group with the Plan.
(i) "Mandatory Aggregation Group" means each plan
(considering the Plan and Related Plans) that, during the Plan
Year that contains the Determination Date or any of the four
preceding Plan Years,
(A) had a Member who was a Key Employee, or
(B) was necessary to be considered with a
plan in which a Key Employee participated in order to
enable the plan in which the Key Employee
participated to meet the requirements of Section
401(a)(4) and Section 410 of the Internal Revenue
Code.
<PAGE>
If the Plan is not described in (A) or (B) above, it
shall not be part of a Mandatory Aggregation Group.
(ii) "Permissive Aggregation Group" means the group
of plans consisting of (A) the plans, if any, in a Mandatory
Aggregation Group with the Plan, and (B) any other Related
Plan, that when considered as a part of the Aggregation Group,
does not cause the Aggregation Group to fail to satisfy the
requirements of Section 401(a) and Section 410 of the Code. A
Related Plan in (B) of the preceding sentence may include a
simplified employee pension plan, as defined in Code Section
408(k), and a collectively bargained plan, if when considered
as a part of the Aggregation Group such plan does not cause
the Aggregation Group to fail to satisfy the requirements of
Section 401(a)(4) and Section 410 of the Code considering, if
the plan is a multi-employer plan as described in Code Section
414(f) or a multiple employer plan as described in Code
Section 413(c), benefits under the plan only to the extent
provided to employees of the employer because of service with
the employer, and, if the plan is a simplified employee
pension plan, only the employer's contribution to the plan.
(c) "Determination Date" means, with respect to a Plan Year,
the last day of the preceding Plan Year or, in the case of the first
Plan Year, the last day of such Plan Year. If the Plan is aggregated
with other plans in the Aggregation Group, the Determination Date for
each other plan shall be, with respect to any Plan Year, the
Determination Date for each such other plan which falls in the same
calendar year as the Determination Date for the Plan.
(d) "Key Employee" means, for the Plan Year containing the
Determination Date, any person or the beneficiary of any person who is
an employee or former employee of an Employer or an Affiliate as
determined under Code Section 416(i) and who, at any time during the
Plan Year containing the Determination Date or any of the four (4)
preceding Plan Years (the "Measurement Period"), is a person described
in paragraph (i), (ii), (iii) or (iv), subject to paragraph (v):
(i) An officer of the Employer or an officer of an
Affiliate who:
(A) In any Measurement Period, in the case
of Plan Years beginning after December 31, 1983, is
an officer during the Plan Year and has annual
Compensation for the Plan Year in an amount greater
than one hundred and fifty percent (150%) of the
amount in effect under Section 415(c)(1)(A) of the
<PAGE>
Code for the calendar year in which such Plan Year
ends ($30,000 in 1984, adjusted in subsequent years
as determined in accordance with regulations
prescribed by the Secretary of the Treasury or his
delegate pursuant to the provisions of Section 415(d)
of the Code): and
(B) In any Measurement Period, in the case
of a Plan Year beginning on or before January 1,
1984, is a officer during the Plan Year, regardless
of his Compensation (except to the extent that
applicable law, regulations and rulings indicate that
the one hundred and fifty percent (150%) requirement
set forth in subparagraph (A) above is applicable).
No more than a total of fifty (50) persons (or, if
lesser, the greater of three (3) persons or ten percent (10%)
of all persons or beneficiaries of persons who are employees
or former employees) shall be treated as Key Employees under
this paragraph (i) for any Measurement Period. In the case of
an Employer or an Affiliate which is not a corporation (I) in
any Measurement Period, in the case of a Plan Year beginning
on or before February 28, 1985, no persons shall be treated as
Key Employees under this paragraph (i); and (II) in any
Measurement Period, in the case of a Plan Year beginning after
February 28, 1985, the term "officer" as used in this
subsection (d) shall include administrative executives as
described in Section 1.416-1(T-13) of the Treasury
Regulations.
(ii) One (1) of the ten (10) persons who, during a
Plan Year in the Measurement Period:
(A) have annual compensation from the
Employer or Affiliate for such Plan Year greater than
the amount in effect under Section 415(c)(1)(A) of
the Code for the calendar year in which such Plan
Year ends $30,000 in 1984, adjusted in subsequent
years as determined in accordance with regulations
prescribed by the Secretary of the Treasury or his
delegate pursuant to the provision of Section 415(d)
of the Code; and
(B) own (or are considered as owning within
the meaning of Code Section 318) in such Plan Year,
the largest percentage interests in the Employer or a
Corporate Group, in such Plan Year, provided that no
person shall be treated as a Key Employee under this
paragraph unless he owns more than one-half of one
<PAGE>
percent (0.5%) interest in the Employer or Corporate
Group.
No more than a total of ten (10) persons or
beneficiaries of persons who are employees or former employees
shall be treated as Key Employees under this paragraph (2) for
any Measurement Period.
(iii) A person who, for a Plan Year in the
Measurement Period, is a more than five percent (5%) owner (or
is considered as owning more than five percent (5%) within the
meaning of Code Section 318) of the Employer or Affiliate.
(iv) A person who, for a Plan Year in the Measurement
Period, is a more than one percent (1%) owner (or is
considered as owning more than one percent (1%) within the
meaning of Code Section 318) of the Employer or Affiliate and
has an annual Compensation for such Plan Year of more than
$150,000.
(v) If the number of persons who meet the
requirements to be treated as Key Employees under paragraph
(i) or (ii) exceed the limitation on the number of Key
Employees to be counted under paragraph (i) or (ii), those
persons with the highest annual Compensation in a Plan Year in
the Measurement Period for which the requirements are met and
who are within the limitation on the number of Key Employees
will be treated as Key Employees.
If the requirements of paragraph (i) or (ii) are met
by a person in more than one (i) Plan Year in the Measurement
Period, each person will be counted only once under paragraph
(i) or (ii). For the purposes of the preceding sentence under
paragraph (i), the Plan Year in the Measurement Period in
which a person who was an officer and had the highest annual
Compensation shall be used to determine whether the person
will be treated as a Key Employee and under paragraph (i), the
Plan Year in the Measurement Period in which the ownership
percentage interest is the greatest shall be used to determine
whether the person will be treated as a Key Employee.
Notwithstanding the above provisions of paragraph
(v), a person may be counted in determining the limitation
under both paragraphs (i) and (ii). In determining the sum of
the Present Value of Accrued Benefits for Key Employees under
subsection (f) of this Section, the Present Value of Accrued
Benefits for any person shall be counted only once.
<PAGE>
(e) "Non-Key Employee" means for the Plan Year containing the
Determination Date a person or the beneficiary of a person who had an
account balance in the Plan or an account balance in any Related Plan
in the Aggregation Group during the Plan Year containing the
Determination Date or any of the four (4) preceding Plan Years and who
is not a Key Employee.
(f) "Present Value of Accrued Benefits" means, for any Plan
Year, an amount equal to the sum of (i), (ii) and (iii) for each
person, who in the Plan Year containing the Determination Date, was a
Key Employee or a Non-Key Employee:
(i) Subject to (iv) below, the value of a Member's
Accounts under the Plan and each Related Defined Contribution
Plan in the Aggregation Group, determined as of the Valuation
Date coincident with or immediately preceding the
Determination Date, adjusted for contributions due as of the
Determination Date, as follows:
(A) in the case of a plan not subject to the
minimum funding requirements of Section 412 of the
Code, by including the amount of any contributions
actually made after the valuation date but on or
before the Determination Date, and, in the first plan
year of a plan, by including contributions made after
the Determination Date that are allocated as of a
date in that first plan year; and
(B) in the case of a plan that is subject to
the minimum funding requirements, by including the
amount of any contributions that would be allocated
as of a date not later than the Determination Date,
plus adjustments to those amounts as required under
applicable rulings, even though those amounts are not
yet required to be contributed or allocated (e.g.,
because they have been waived) and by including the
amount of any contributions actually made (or due to
be made) after the valuation date but before the
expiration of the extended payment period in Section
412(c)(10) of the Code.
(ii) Subject to (iv) below, the sum of the actuarial
present values of a person's accrued benefits under each
Related Defined Benefit Plan in the Aggregation Group,
expressed as a benefit commencing at normal retirement date
(or the person's attained age, if later) determined in
accordance with Code Section 416(g) based on the following
actuarial assumptions:
(A) Interest rate 5% compounded; and
<PAGE>
(B) 80% of the rates underlying the 1984
Unisex Pension Mortality Table, adjusted by applying
a 3-year age setback for the Member's spouse, where
applicable;
The present value of an accrued
benefit for any person who is employed by an Employer
maintaining a plan on the Determination Date is
determined as of the most recent valuation date which
is within a 12-month period ending on the
Determination Date, provided however that
(C) for the first plan year of the plan, the
present value for an employee is determined as if the
employee had a termination of employment (1) on the
Determination Date or (2) on such valuation date but
taking into account the estimated accrued benefits as
of the Determination Date, and
(D) for the second and subsequent plan years
of the plan, the accrued benefit taken into account
for an employee is not less than the accrued benefit
taken into account for the first plan year unless the
difference is attributable to using an estimate of
the accrued benefit as of the Determination Date for
the first plan year and using the actual accrued
benefit as of the Determination for the second plan
year.
For purposes of this paragraph (ii), the valuation date is the
valuation date used by the plan for computing plan costs for
minimum funding, regardless of whether a valuation is
performed that year.
If the plan provides for a nonproportional subsidy as
described in Treasury Regulations Section 1.416-1(T-26), the
present value of accrued benefits shall be determined taking
into account the value of nonproportional subsidized early
retirement benefits and nonproportional subsidized benefit
options.
(iii) Subject to (iv) below, the aggregate value of
amounts distributed from the Plan and each Related Plan in the
Aggregation Group during the plan year that includes the
Determination Date or any of the four preceding plan years
including amounts distributed under a termination plan which,
if it had not been terminated, would have been in the
Aggregation Group.
(iv) The following rules shall apply in determining
the Present Value of Accrued Benefits:
<PAGE>
(A) Amounts attributable to qualified
voluntary employee contributions, as defined in
Section 219(e) of the Internal Revenue Code, shall be
excluded;
(B) In computing the Present Value of
Accrued Benefits with respect to rollovers or
plan-to-plan transfers, the following rules shall be
applied to determine whether amounts which have been
distributed during the five (5) year period ending on
the Determination Date from or accepted into this
Plan or any plan in the Aggregation Group shall be
included in determining the Present Value of Accrued
Benefits:
(I) Unrelated Transfers accepted
into the Plan or any plan in the Aggregation
Group after December 31, 1983 shall not be
included.
(II) Unrelated Transfers accepted on
or before December 31, 1983 and all Related
Transfers accepted at any time into the Plan
or any plan in the Aggregation Group shall
be included.
(III) Unrelated Transfers made from
the Plan or any plan in the Aggregation
Group shall be included.
(IV) Related Transfers made from the
Plan or any plan in the Aggregation Group
shall be included by the transferor plan
(but shall be counted by the accepting
plan).
The accrued benefit of any individual who has not
received any Compensation from an Employer
maintaining the Plan (or a business which with the
Employer is an Affiliate) at any time during the five
(5) year period ending on the Determination Date
shall be excluded in computing the Present Value of
Accrued Benefits.
(g) "Related Plan" means any other defined benefit plan or a
defined contribution plan (as defined in Section 415(k) of the Code)
maintained by an Employer or other Affiliate, respectively called a
"Related Defined Benefit Plan" and a "Related Defined Contribution
Plan".
(h) "Related Transfer" means a rollover or a plan-to plan
transfer which is either not initiated by the Employee or is made
<PAGE>
between plans each of which is maintained by an Employer or an
Affiliate.
(i) A "Top Heavy Aggregation Group" means the Aggregation
Group in any Plan Year for which, as of the Deter-mination Date, the
sum of the present Values of Accrued Benefits for Key Employees under
all plans in the Aggregation Group exceeds sixty percent (60%) of the
sum of the Present Values of Accrued Benefits for all employees under
all plans in the Aggregation Group; provided that, for purposes of
determining the sum of Present Values of Accrued Benefits for all
employees, there shall be excluded the Present Values of Accrued
Benefits of any Non-Key Employee who was a Key Employee for any Plan
Year preceding the Plan Year that contains the Determination Date. For
purposes of applying the special rules herein with respect to a Super
Top Heavy Plan, a Top Heavy Aggregation Group will also constitute a
"Super Top Heavy Aggregation Group" if in any Plan Year as of the
Determination Date, the sum of the Present Values of Accrued or Key
Employees under all plans in the Aggregation Group exceeds ninety
percent (90%) of the sum of the Present Values of Accrued Benefits for
all employees under all plans in the Aggregation Group.
(j) "Top Heavy Plan" means the Plan in any Plan Year which it
is a member of a Top Heavy Aggregation Group, including a Top Heavy
Aggregation Group consisting solely of the Plan. For purposes of
applying the rules herein with respect to a Super Top Heavy Plan, a Top
Heavy Plan will also constitute a "Super Top Heavy Plan" if the Plan in
any Plan Year is a member of a Super Top Heavy Aggregation Group
consisting solely of the Plan.
(k) "Unrelated Transfer" means a rollover or a plan-to-plan
transfer which is both initiated by the Employee and (a) made from a
plan maintained by an Affiliate to a plan maintained by an Employer
which is not an Affiliate or (b) made to a plan maintained by an
Affiliate from a plan maintained by an Employer which is not an
Affiliate.
15.3 Special Top Heavy Provisions. For each Plan Year in which the Plan
is a Top Heavy Plan, the following rules shall apply, except that the special
provisions of this Section 15.3 shall not apply with respect to any employee who
is covered by a collective bargaining agreement between employee representatives
and one or more Employers unless participation by such employee in the Plan has
been agreed to by the parties to such agreement.
(a) Minimum Employer Matching Contributions.
(i) In any Plan Year in which the Plan is a Top Heavy
Plan, the Employers shall make additional Employer
<PAGE>
Contributions to the Plan as necessary for each Member who is
employed on the last day of the Plan Year and who is a Non-Key
Employee to bring the amount of each Member's Aggregate
Employer Matching Contributions for the Plan Year up to at
least three percent (3%) of each Member's Compensation, or if
the Plan is not required to be included in an aggregation
group in order to permit a defined benefit plan in the
Aggregation Group to satisfy the requirements of Section
401(a)(4) or Section 410 of the Internal Revenue Code, such
lesser amount as is equal to the largest percentage of a Key
Employee's Compensation (as limited in accordance with Section
15.3(c)) allocated to the Key Employee as Aggregate Employer
Contributions.
(ii) Notwithstanding Section 15.3(a)(1), if there is
a Related Defined Benefit Plan in the Aggregation Group, if a
Non-Key Employee participates in both the Plan and a Related
Defined Benefit Plan and
(A) if the Related Defined Benefit Plan
provides the minimum benefit required under Code
Section 416(c)(1) for the Non-Key Employee, then no
minimum Employer Contribution shall be required under
this Section 15.3(a).
(B) if the Related Defined Benefit Plan does
not provide the minimum benefit required under Code
Section 416(c)(1) for the Non-Key Employee, then the
minimum Aggregate Employer Contribution under this
Section 15.3(a) shall be five percent (5%) of such
Non-Key Employee's Compensation.
(iii) For purposes of determining whether a Non-Key
Employee is a Member entitled to have minimum Employer
Contributions made for such Member, a Non-Key Employee will be
treated as a Member even if he is not otherwise a Member (or
accrues no benefit) under the Plan because:
(A) such Member has failed to complete the
requisite number of Hours of Service (if any) after
becoming a Member in the Plan,
(B) such Member is excluded from
participation in the Plan (or accrues no benefit)
merely because his compensation is less than a stated
amount, or
(C) such Member is excluded from
participation in the Plan (or accrues no benefit)
merely because of a failure to make mandatory
<PAGE>
employee contributions or, if the Plan is a Plan
described in Section 401(k) of the Code, because of a
failure to make elective 401(k) contributions.
(b) Vesting. For each Plan Year in which the Plan is a Top
Heavy Plan and for each Plan Year thereafter, the vesting schedule
under the Plan shall be not less favorable than three (3) year cliff
vesting under which each Member shall be zero percent vested in the
Employer Contributions Account until such Member has three (3) years of
Service after which a Member shall be 100% vested in such Account;
provided that this vesting schedule shall not apply to the Accrued
Benefit of any Member who does not have an Hour of Service in or after
a Plan Year in which the Plan is Top Heavy.
(c) Compensation. For each Plan Year in which the Plan is a
Top Heavy Plan, Compensation taken into account under the Plan shall
not exceed $200,000 (as at 1984, adjusted in subsequent years for the
cost of living adjustments determined in accordance with regulations
prescribed by the Secretary of the Treasury or his delegate pursuant to
the provisions of Section 416(d)(2) of the Code); provided that the
$200,000 limitation of Compensation shall not apply for purposes of
Section 4.3 and the limitations on Employee Contributions in Section
3.1(b). Notwithstanding the preceding sentence, Compensation in excess
of $200,000 (adjusted as provided in the preceding sentence) for years
before the Plan became a Top Heavy Plan shall be taken into account (to
the extent otherwise provided in the Plan) in determining a person's
Accrued Benefit accrued in such years, and Compensation in excess of
$200,000 (adjusted as provided in the preceding sentence) for years
after the Plan ceases to be a Top Heavy Plan shall be taken into
account (to the extent otherwise provided in the Plan) in determining a
person's Accrued Benefit for all years, including years in which the
Plan was a Top Heavy Plan.
(d) Top Heavy Limitations.
(i) In computing the limitations under Section 4.3
hereof, if the Plan is a Top Heavy Plan and is not a Super Top
Heavy Plan, the special rules of Section 416(h) of the
Internal Revenue Code shall be applied in accordance with
applicable regulations and rulings so that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which "1.25"
would have been used, "1.00" shall be substituted and
<PAGE>
(B) in determining the numerator of the
transition fraction described in Section 415(e)(6)(B)
of the Internal Revenue Code by substituting $41,500
for $51,875 unless the special requirements of
Section 416(h)(2) of the Internal Revenue Code have
been satisfied.
(ii) In computing the limitations under Section 4.3
hereof, if the Plan is a Super Top Heavy Plan, the special
rules of Section 416(h) of the Code shall be applied in
accordance with applicable regulations and rulings so that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which "1.25"
would have been used, "1.00" shall be substituted and
(B) in determining the numerator of the
transitional fraction described in Section
415(e)(6)(B) of the Internal Revenue Code, $41,500
shall be substituted for $51,875.
(e) Terminated Plan. If the Plan becomes a Top Heavy Plan
after it has formally been terminated, has ceased crediting for benefit
accruals and vesting and has been or is distributing all plan assets to
Members and their beneficiaries as soon as administratively feasible or
if a terminated plan has distributed all benefits of Members and their
beneficiaries, the provisions of Section 15.3 shall not apply to the
Plan.
(f) Frozen Plans. If the Plan becomes a Top Heavy Plan after
contributions have ceased under the Plan but all assets have not been
distributed to Members or their beneficiaries, the provisions of
Section 15.3 shall apply to the Plan.
15.4 Effect of Change in Applicable Legislation or Regulation. In the
event that Congress should provide by statute or the Secretary of the Treasury
should provide by regulation a ruling, that the provisions of this Article XV
are no longer necessary for the Plan to meet the requirements of Section 401(a)
or other applicable provisions of the Code, such limitations shall become void
and shall no longer apply, without the necessity of further amendment to the
Plan.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8, pertaining to the Bearing Inspection, Inc. Retirement
Savings & Investment Plan, of our report dated November 11, 1996, except for
Note 18, as to which the date is December 12, 1996, with respect to the
consolidated financial statements and schedule of U.S. Industries, Inc. included
in its Annual Report in Amendment No.1 on Form 10-K/A for the year ended
September 30, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
June 23, 1997
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated November 11, 1996, which
appears on page 26 of the U.S. Industries, Inc. Annual Report on Form 10-K/A for
the year ended September 30, 1996.
PRICE WATERHOUSE LLP
Morristown, New Jersey
June 23, 1997
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 21, 1995 with respect to the
combined financial statements and schedule of the U.S. Industries Automotive
Group companies (not presented separately) appearing in U.S. Industries, Inc.'s
Annual Report on Form 10-K/A Amendment No. 1 for the fiscal year ended
September 28, 1996.
DELOITTE & TOUCHE LLP
New York, New York
June 23, 1997
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes GEORGE H. MacLean his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement on Form S-8 of U.S. Industries, Inc. with respect to the BEARING
INSPECTION, INC. RETIREMENT SAVINGS & INVESTMENT PLAN and to sign and file any
other documents in connection therewith, including amendments thereto, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each act and thing requisite
and necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney as of the 25th day of June 1997.
David H. Clarke John G. Raos
- ------------------------ -----------------------
David H. Clarke John G. Raos
Frank R. Reilly Brian C. Beazer
- ----------------------- -----------------------
Frank R. Reilly Brian C. Beazer
John J. McAtee, Jr. Charles H. Price II
- ----------------------- ------------------------
John J. McAtee, Jr. The Hon. Charles H. Price II
Harry Solomon Royall Victor III
- ----------------------- -------------------------
Sir Harry Solomon Royall Victor III
Mark Vorder Bruegge James O'Leary
---------------------- --------------------------
Mark Vorder Bruegge James O'Leary
