Article 1. Definitions
1.01 "Accounts" means a Participant's Before-Tax Savings
Account, Company Matching Savings Account, Company Savings
Account, Company Supplemental Savings Account and Rollover
Account.
1.02 "Actual Contribution Percentage" means, with respect
to a specified group of Eligible Employees, the average of
the ratios, calculated separately for each Eligible Employee
in that group, of:
(a) the amount of Company Matching Contributions made
pursuant to Section 3.04(a) for a Plan Year, to
(b) Statutory Compensation for that Plan Year,
provided that upon direction of the Committee, Statutory
Compensation for a Plan Year shall only be counted if
received during the period an Employee is, or is eligible to
become, a Participant.
1.03 "Actual Deferral Percentage" means, with respect to a
specified group of Eligible Employees, the average of the
ratios, calculated separately for each Eligible Employee in
that group, of:
(a) the amount of Before-Tax Contributions made
pursuant to Section 3.01 for a Plan Year (whether or not such
contributions are returned to the Participant pursuant to
Sections 3.01(d) and 3.01(e)) and Company Contributions made
pursuant to Section 3.04(b) for a Plan Year, to
(b) Statutory Compensation for that Plan Year,
provided that upon direction of the Committee, Statutory
Compensation for a Plan Year shall only be counted if
received during the period an Employee is, or is eligible to
become, a Participant.
1.04 "Adjustment Factor" means the cost-of-living
adjustment factor prescribed by the Secretary of the Treasury
under Code Section 415(d) applied to such items and in such
manner as the Secretary shall provide.
1.05 "Affiliated Employer" means any company not
participating in the Plan which is a member of a controlled
group of corporations (determined under Code Section 414(b))
which also includes the Company as a member, or any trade or
business under common control (as defined in Code Section
414(c)) with the Company, or a member of an affiliated
service group (as defined in Code Section 414(m)) which
includes the Company, and any other entity required to be
aggregated with the Company pursuant to regulations under
Code Section 414(o). Notwithstanding the foregoing, for the
purposes of Section 3.08, the definition in Code Sections
414(b) and 414(c) shall be modified as provided in Code
Section 415(h).
1.06 "Annual Dollar Limit" means $150,000, except that if
for any calendar year after 1994 the Cost-of-Living
Adjustment as hereafter defined is equal to or greater than
$10,000, then the Annual Dollar Limit (as previously adjusted
under this Section 1.06) for any Plan Year beginning in any
subsequent calendar year shall be increased by the amount of
such Cost-of-Living Adjustment, rounded to the next lowest
multiple of $10,000. The Cost-of-Living Adjustment shall
equal the excess of (i) $150,000 increased by the adjustment
made under Code Section 415(d) for the calendar year except
that the base period for purposes Code Section 415(d)(1)(A)
shall be the calendar quarter beginning October 1, 1993 over
(ii) the Annual Dollar Limit in effect for the Plan Year
beginning in the calendar year. In determining the
compensation of a Participant for purposes of the Annual
Dollar Limit, the rules of Code Section 414(q)(6) shall
apply, except in applying such rules the term "family" shall
include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the
application of such rules the adjusted Annual Dollar Limit is
exceeded, then the Annual Dollar Limit shall be prorated
among the affected individuals in proportion to each such
individual's compensation, as determined under Section 1.21
or Section 1.49(b), whichever is applicable, prior to the
application of such limit.
1.07 "Before-Tax Contributions" means any amounts
contributed by the Partici-pant on a before-tax basis to the
Plan pursuant to Section 3.01. Before-Tax Contribu-tions
shall consist of the following two components:
(a) Before-Tax Contributions as described in Section
3.01(a) and which are matched by Company Matching
Contributions; and
(b) Before-Tax Contributions as described in Section
3.01(b) and which are not matched by Company Matching
Contributions.
1.08 "Before-Tax Savings Account" means a Participant's
Account into which shall be credited Before-Tax Contributions
and investment earnings and losses thereon.
1.09 "Beneficiary" means any person, persons, entity or
entities named by a Participant by written designation filed
with the Company to receive benefits payable in the event of
the Participant's death, provided that if the Participant is
married and designates other than his spouse as the
Beneficiary, he obtains Spousal Consent.
1.10 "Board of Directors" means the Board of Directors of
the Company.
1.11 "Break in Service" means a 12-month period described
in Section 1.54 in which an Employee completes less than 501
Hours of Service.
Solely for the purpose of determining when a Break in
Service occurs, an Employee shall be credited with up to 501
Hours of Service during a period of absence by reason of:
(a) The Employee's pregnancy;
(b) The birth of a child of the Employee;
(c) Placement of a child with the Employee in
connection with the Employee's adoption of such child; or
(d) Caring for such child for a period beginning
immediately following such birth or placement.
Hours of Service credited by reason of the above
period of absence shall be credited in the Plan Year in which
the absence occurs if those Hours of Service are needed to
prevent a Break in Service in that year; otherwise, they
shall be credited in the immediately following Plan Year.
Such Hours of Service shall be equal to the normal
number of Hours of Service which would have been credited to
the Employee but for the above period of absence; however, in
no event shall more than 501 Hours of Service be credited.
1.12 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
1.13 "Committee" means the Administrative Committee as
provided for in Article 9.
1.14 "Company" means Caesars World, Inc. and Subsidiaries.
1.15 "Company Contributions" means contributions made by
the Company in accordance with Section 3.04(b). Such
contributions shall be "qualified nonelective contributions"
as defined under IRS regulation 1.401(k)-1(g)(13)(ii).
1.16 "Company Matching Contributions" means contributions
made by the Company to the Plan on behalf of Participants
pursuant to Section 3.04(a).
1.17 "Company Matching Savings Account" means a
Participant's account into which shall be credited Company
Matching Contributions and investment earnings and losses
thereon.
1.18 "Company Savings Account" means a Participant's
account into which shall be credited Company Contributions
and investment earnings and losses thereon.
1.19 "Company Supplemental Savings Account" means a
Participant's account into which shall be credited Company
Supplemental Contributions and investment earnings and losses
thereon.
1.20 "Company Supplemental Contributions" means
contributions made by the Company to the Plan on behalf of
Participants pursuant to Section 3.04(c).
1.21 "Compensation" means earnings (including overtime pay,
vacation pay, holiday pay, sick pay, jury duty pay, birthday
pay and shift differentials), plus tips and commissions paid
to an Employee during a Plan Year for services rendered to
the Company. Compensation shall include Before-Tax
Contributions made pursuant to Section 3.01 and before-tax
contributions made pursuant to a cafeteria plan as described
in Code Section 125. Compensation shall not, for Plan
purposes, exceed the Annual Dollar Limit for the Plan Year.
1.22 "Disability" means a disability resulting from a
bodily or mental injury or disease, either occupational or
non-occupational in cause (but excluding disabilities
resulting from service in the Armed Forces of any country),
which would prevent a Participant from engaging in any
occupation or performing any work for compensa-tion or profit
for the remainder of the Participant's life, as confirmed by
medical evidence satisfactory to the Company.
1.23 "Effective Date" of the Plan means January 1, 1994.
1.24 "Eligible Employee" means an Employee of the Company
who is not included in a group of Employees covered by a
collective bargaining agreement if there is evidence that
retirement benefits were the subject of good-faith bargaining
and the collective bargaining agreement does not provide for
such individual's participation in the Plan. An Eligible
Employee shall not include any Leased Employee or any
Seconded Employee.
1.25 "Employee" means any person receiving compensation for
services rendered to the Company or an Affiliated Employer
whose compensation is subject to income tax withholding
and/or for whom Social Security contributions are made by the
Company or an Affiliated Employer, including any Leased
Employee and any Seconded Employee but excluding any person
who serves solely as a director or independent contractor.
1.26 "Employment Commencement Date" means the first date as
of which an Employee is credited with an Hour of Service with
the Company or an Affiliated Employer.
1.27 "Enrollment Date" means the effective date of a
Participant's enrollment in the Plan in accordance with
Section 2.02. Such date shall mean the first day of the
first payroll cycle which coincides with or which follows the
date an Eligible Employee meets the requirements of Section
2.01.
1.28 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.29 "Fund" means the fund consisting of all Before-Tax
Contributions, Company Contributions, Company Matching
Contributions, Company Supplemental Contributions, rollovers
and all investment earnings and losses thereon.
The Fund shall be divided into four subfunds:
o Fund A -- Money Market Fund.
o Fund B -- Fixed Income Fund.
o Fund C -- Indexed Equity Fund.
o Fund D -- Growth Equity Fund.
The Company may change or add other Funds to the Plan
from time to time to increase the investment options
available to Participants.
1.30 "Highly Compensated Employee" means any Employee of
the Company or an Affiliated Employer (whether or not
eligible for participation in the Plan) who satisfies one or
more of the following criteria:
(a) During the current Plan Year or the preceding
Plan Year, the Employee:
(i) Was at any time a 5% owner of the Company or
an Affiliated Employer;
(ii) Received Statutory Compensation in excess of
$75,000 multiplied by the Adjustment Factor;
(iii)Received Statutory Compensation in excess of
$50,000 mul-tiplied by the Adjustment Factor and was among
the highest 20% of Employees for that year when ranked by
Statutory Compensation paid for that year, excluding, for
purposes of determining the number of such Employees, such
Employees as the Company may determine on a consistent basis
pursuant to Code Section 414(q)(8); or
(iv) Was at any time an officer of the Company or
an Affiliated Employer (subject to the limitations of Code
Section 414(q)(5)) and received Statutory Compensation
greater than 50% of the dollar limitation on maximum benefits
under Code Section 415(b)(1)(A) for such Plan Year.
(b) Notwithstanding the foregoing, an Employee who
meets the criteria under Section 1.30(a)(ii), 1.30(a)(iii) or
1.30(a)(iv) for the current Plan Year but not for the
preceding Plan Year shall not be considered a Highly
Compensated Employee for the current Plan Year unless the
Employee is one of the 100 highest-paid Employees of all
Affiliated Employers.
(c) Notwithstanding the foregoing, Employees who are
nonresident aliens and who receive no earned income from the
Company or an Affiliated Employer which constitutes income
from sources within the United States shall be disregarded
for all purposes of this Section 1.30.
(d) To the extent permitted under regulations, the
Company may elect to determine the status of Highly
Compensated Employees on a current calendar-year basis.
(e) The provisions of this Section 1.30 shall be
further subject to such additional requirements as are
described in Code Section 414(q) and its applicable
regulations, which shall override any aspects of this Section
1.30 inconsistent therewith.
1.31 "Hour of Service" means:
(a) For the purposes of Sections 1.38 and 1.46, each
hour for which an Employee is paid or entitled to be paid for
the performance of duties for the Company or an Affiliated
Employer.
(b) For the purposes of Sections 1.11, 1.26, 1.42 and
1.54, with respect to any applicable computation period:
(i) Each hour for which an Employee is paid or
entitled to be paid for the performance of duties for the
Company or an Affiliated Employer;
(ii) Each hour for which an Employee is paid or
entitled to be paid by the Company or an Affiliated Employer,
whether or not the employment relationship has terminated, on
account of a period during which no duties were performed due
to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or Leave of
Absence, but not more than 501 hours for any single
continuous period; and
(iii)Each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by
the Company or an Affiliated Employer, excluding any hour
credited under Sections 1.31(b)(i) or 1.31(b)(ii), which
shall be credited to the computation period or periods to
which the award, agreement or payment pertains rather than to
the computation period in which the award, agreement or
payment is made.
No hours shall be credited on account of any period
during which the Employee performs no duties and receives
payment solely for the purpose of complying with unemployment
compensation, workers' compensation or disability insurance
laws. The Hours of Service credited shall be determined as
required by Title 29 of the Code of Federal Regulations,
Section 2530.200b-2(b) and (c).
1.32 "Income" means the amount of income to be returned
with any excess deferrals, excess contributions or excess
aggregate contributions under Section 3.01 or Section 3.06 as
determined in accordance with regulations prescribed by the
Secretary of the Treasury under the provisions of Code
Sections 402(g), 401(k) and 401(m).
1.33 "Leased Employee" means any person as so defined in
Code Section 414(n).
1.34 "Leave of Absence" means an absence authorized by the
Company under its standard personnel practices as applied in
a uniform and nondiscriminatory manner to all persons
similarly situated.
1.35 "Non-Highly Compensated Employee" means an individual
who is not a Highly Compensated Employee.
1.36 "Normal Retirement Age" means age 65.
1.37 "Participant" means any person included for
participation in the Plan as provided in Article 2 and any
person who continues to have rights or continued rights under
the Plan.
1.38 "Period of Severance" means, for any Employee, the
period beginning on the Employee's Severance from Service
Date and ending on the date the Employee next completes an
Hour of Service.
A one-year Period of Severance is a period of 12
consecutive months beginning on the Employee's Severance from
Service Date and during which the Employee does not perform
an Hour of Service.
Subject to verification by the Company, for the
purposes of Sections 1.44 and 6.03, an Employee shall be
deemed not to have incurred a Period of Severance during the
period of 24 consecutive months that the Employee is first
absent from employment by reason of:
(a) the Employee's pregnancy;
(b) birth of a child of the Employee;
(c) placement of a child with the Employee in
connection with the Employee's adoption of the child; or
(d) caring for such child for a period beginning
immediately after the birth or placement for adoption.
1.39 "Plan" means the Caesars 401(k) Retirement Savings
Plan as set forth in this document or as amended from time to
time.
1.40 "Plan Administrator" means the Company.
1.41 "Plan Year" means a 12-month period beginning each
January 1 and ending each December 31.
1.42 "Reemployment Commencement Date" means the date an
Employee is first credited with an Hour of Service following
a prior one-year Break in Service.
1.43 "Rollover Account" means a Participant's Account into
which shall be credited rollovers made to the Plan in
accordance with Section 3.07 and investment earnings and
losses thereon.
1.44 "Rule of Parity" means a rule pursuant to which a
rehired Participant who incurs a one-year Period of Severance
shall have his years of Service which occur prior to such
one-year Period of Severance ignored or restored. (a)
If an Employee or Participant incurs a one-year Period of
Severance and has no nonforfeitable right to his Company
Matching Savings Account and, if applicable, his Company
Supplemental Savings Account at the time of his one-year
Period of Severance, his years of Service prior to such one-
year Period of Severance shall not be taken into account if
the number of consecutive one-year Periods of Severance
equals or exceeds the greater of (i) five, or (ii) his years
of Service prior to the one-year Period of Severance.
(b) If an Employee or Participant incurs a one-year
Period of Severance and (i) he has a nonforfeitable right to
his Company Matching Savings Account and, if applicable, his
Company Supplemental Savings Account, or (ii) the number of
consecutive one-year Periods of Severance is less than the
greater of (A) five, or (B) his total years of Service prior
to the one-year Period of Severance, his years of Service
prior to such one-year Period of Severance shall be restored
to him.
1.45 "Seconded Employee" means an Employee who is a non-
U.S. Citizen working abroad and who is on the U.S. payroll of
the Company or an Affiliated Employer.
1.46 "Service" means, with respect to any Employee, his
period or periods of employment with the Company or an
Affiliated Employer which are counted as "Service" in
accordance with the following rules:
(a) Each Employee shall be credited with Service
under the Plan for the period or periods during which such
Employee maintains an employment relationship with the
Company or an Affiliated Employer. An Employee's employment
relationship shall begin on the date the Employee first
renders one Hour of Service and shall end on his Severance
from Service Date. Service also shall include a Period of
Severance between an Employee's Severance from Service Date
and the first anniversary of the date on which the Employee
was first absent if the Employee completes an Hour of Service
on or before such first anniversary date.
(b) If an Employee is absent from work because of
service in the Armed Forces of the United States and returns
to work with the Company or an Affiliated Employer, having
applied to return while his reemployment rights were
protected by law, the absence shall be included in his
Service.
(c) All periods of an Employee's Service, whether or
not consecutive, shall be aggregated. Service shall be
measured in elapsed years and fractions of years whereby each
12 calendar months shall constitute one year and each 30 days
shall constitute one-twelfth of a year.
1.47 "Severance from Service Date" means the earlier of:
(a) the date as of which an Employee's employment
with the Company or an Affiliated Employer is terminated,
whether due to voluntary termination, dismissal, retirement
or death; or
(b) the first anniversary of the first date of a
period in which an Employee remains absent from work (with or
without pay) with the Company or an Affiliated Employer for
any reason (other than resignation, retirement, discharge or
death), such as vacation, holiday, sickness, Disability,
Leave of Absence or layoff.
1.48 "Spousal Consent" means written consent given by a
Participant's spouse to the Participant's election specifying
a form of benefit and designating the Participant's
Beneficiary. The specified form or designated Beneficiary
shall not be changed unless further Spousal Consent is given
or unless the spouse expressly waives the right to consent to
any future changes. Spousal Consent shall be duly witnessed
by a Plan representative or notary public and shall
acknowledge the effect of the Participant's election on the
spouse. The requirement for Spousal Consent may be waived by
the Company if it establishes to its satisfaction that there
is no spouse or that the spouse cannot be located, or because
of such other circumstances as may be established in
accordance with applicable law. Spousal Consent shall be
applicable only to the particular spouse who provides such
consent.
1.49 "Statutory Compensation" means:
(a) for the purposes of Section 1.30, compensation as
defined under Section 1.414(s)-1(c)(2) of the Income Tax
Regulations, plus amounts contributed in accordance with Code
Sections 125, 402(e)(3) and 402(h)1(B); and
(b) for the purposes of Sections 1.02, 1.03 and 3.06,
compensation as defined under Sections 1.414(s)-1(c)(2) or
1.414(s)-1(c)(3) of the Income Tax Regulations. As permitted
under such regulations, compensation under this Section
1.49(b) may or may not include amounts contributed in
accordance with Code Sections 125, 402(e)(3) and 402(h)1(B).
However, in no event may compensation under this Section
1.49(b) exceed the Annual Dollar Limit for the Plan Year.
1.50 "Subsidiary" means an entity more than 50% owned by
Caesars World, Inc. which is included in the Plan by the
Board of Directors of Caesars World, Inc. and by its own
Board of Directors or other governing body if not a
corporation. Subsidiaries are listed in Appendix A.
1.51 "Trustee" means the trustee that holds the funds of
the Plan, as provided in Article 10.
1.52 "Valuation Date" means the date or dates in each
calendar month on which any valuation is made. Procedures
shall be established for determining Valuation Dates, which
shall apply for allocations, withdrawals, distributions or
other relevant purposes. Valuation Dates need not be the
same for all purposes.
1.53 "Vested Portion" means the portion of the Accounts in
which the Participant has a nonforfeitable interest, as
provided in Article 6.
1.54 "Year of Eligibility Service" means the first 12-month
period (measured initially from the Participant's Employment
Commencement Date to the first anniversary of his Employment
Commencement Date and thereafter from the January 1 that next
follows his Employment Commencement Date) during which the
Participant earns at least 1,000 Hours of Service.
Article 2. Eligibility and Participation
2.01 Eligibility
(a) Each Eligible Employee who has completed a Year
of Eligibility Service on the Effective Date shall
automatically become a Participant in the Plan on January 1,
1994.
(b) Each other Employee shall become eligible to
participate in the Plan on any Enrollment Date that coincides
with or next follows (i) the date he completes a Year of
Eligibility Service, or (ii) the date he becomes an Eligible
Employee, whichever occurs later.
(c) If a Participant incurs a one-year Break in
Service, he shall be eligible to recommence participation in
the Plan on his Reemployment Commencement Date, if he is an
Eligible Employee at that time.
(d) If an Employee incurs a one-year Break in Service
prior to becoming a Participant in the Plan and his
Reemployment Date occurs before he accrues five consecutive
one-year Breaks in Service, he shall be eligible to
participate in the Plan on any Enrollment Date that coincides
with or next follows (i) the date on which he completes a
Year of Eligibility Service, (ii) his Reemployment
Commencement Date, or (iii) the date he becomes an Eligible
Employee, whichever occurs last.
(e) If an Employee incurs a one-year Break in Service
prior to becoming a Participant in the Plan and his
Reemployment Date occurs after he accrues five or more
consecutive one-year Breaks in Service, he shall be
considered to be a new Employee for all purposes of the Plan
and he must satisfy the conditions described in Section
2.01(b) based on his Reemployment Commencement Date.
2.02 Participation
An Employee shall become a Participant as of the first
Enrollment Date after he satisfies the requirements of
Section 2.01 and he shall be eligible to contribute to the
Plan as of the first day of any payroll cycle after the date
he files an enrollment form with the Company authorizing the
Company to make Before-Tax Contributions on his behalf
through payroll deductions.
2.03 Transferred Participants
(a) A Participant who remains in the employ of the
Company or an Affiliated Employer but who ceases to be an
Eligible Employee shall continue to be a Participant in the
Plan but shall not be eligible to make Before-Tax
Contributions or receive Company Contributions while his
employment status is other than that of an Eligible Employee.
(b) An Employee who transfers from an Affiliated
Employer and becomes an Eligible Employee shall become
eligible to participate in the Plan on any Enroll-ment Date
that coincides with or next follows (i) the date he completes
a Year of Eligibility Service, or (ii) the date he becomes an
Eligible Employee, whichever occurs later.
2.04 Termination of Participation
An Eligible Employee's participation in the Plan shall
terminate on the date he terminates employment with the
Company or an Affiliated Employer unless the Participant is
entitled to benefits under the Plan, in which event his
participation shall terminate when all those benefits have
been distributed to him.
Article 3. Contributions
3.01 Before-Tax Contributions
(a) Commencing with the first (second for Caesars
Palace) payroll cycle, which includes pay for services
rendered in 1994, a Participant shall be permitted to
contribute to the Plan 2% to 4% of his Compensation per
payroll cycle (in whole percentages) on a before-tax basis.
Such contributions shall be matched by the Company in
accordance with Section 3.04(a).
(b) A Participant who contributes the maximum
permitted under Section 3.01(a) shall be permitted to
contribute an additional 1% to 8% of his Compensation per
payroll cycle (in whole percentages) on a before-tax basis.
Such contributions shall not be matched by the Company.
(c) Notwithstanding the foregoing, in no event shall
a Participant's Before-Tax Contributions in a calendar year
to the Plan and any other plan maintained by the Company or
an Affiliated Employer exceed $7,000 multiplied by the
Adjustment Factor. If a Participant's Before-Tax
Contributions in a calendar year reach that dollar
limitation, his election of Before-Tax Contributions for the
remainder of the calendar year shall be suspended. As of the
first day of the first payroll cycle of the following
calendar year, the Participant's election of Before-Tax
Contributions shall again become effective in accordance with
his previous election.
(d) If the sum of the Participant's Before-Tax
Contributions and before-tax contributions to any other
qualified defined contribution plan maintained by the Company
exceeds the dollar limitation described in Section 3.01(c),
the excess ("excess deferrals") over such dollar limitation,
together with Income thereon, shall be returned to the
Participant no later than the April 15 following the end of
the calendar year in which the excess deferrals were made;
and the Participant shall be deemed to have elected to
receive such return of his excess deferrals.
(e) If a Participant makes before-tax contributions
under another qualified defined contribution plan or
simplified employee pension plan for any calendar year and
those contributions, when added to his Before-Tax
Contributions under the Plan, exceed the dollar limitation
described in Section 3.01(c) for that calendar year, the
Participant may determine that such excess deferrals shall
apply to the Plan. In that event, the excess deferrals,
together with Income thereon, shall be returned to the
Participant no later than the April 15 following the end of
the calendar year in which the excess deferrals were made.
However, the Plan shall not return such excess deferrals
unless the Participant notifies the Company in writing, by
March 1 of that following calendar year, of the amount of
excess deferrals allocated to the Plan.
(f) In the event that any Before-Tax Contributions
returned under Sections 3.01(d) and 3.01(e) were matched by
Company Matching Contributions, those Company Matching
Contributions shall be forfeited and used to reduce future
Company Matching Contributions.
3.02 Change in Contributions
A Participant may change the rate of his Before-Tax
Contributions as of the first day of the first payroll cycle
of any calendar quarter by giving the Company at least 15
days' prior written notice. Such change shall take effect on
the first day of the first payroll cycle of any calendar
quarter that follows the Company's receipt of the 15-day
written notice.
3.03 Suspension of Contributions
(a) A Participant may suspend his Before-Tax
Contributions while he is actively employed by providing the
Company with written notice thereof. Suspensions shall
become effective as of the first day of the payroll cycle
that follows the Company's receipt of the 15-day written
notice. The Participant may resume making Before-Tax
Contributions by giving the Company 15 days' prior written
notice. Such resumption shall be effective as of the first
day of the first payroll cycle of any calendar quarter that
follows the Company's receipt of the 15-day written notice.
(b) No makeup of Before-Tax Contributions is
permitted during any period of suspension.
3.04 Company Contributions
(a) Each payroll cycle the Company shall contribute
Company Matching Contributions to the Plan on behalf of each
Participant in an amount equal to 50% of the Participant's
Before-Tax Contributions made in accordance with Section
3.01(a).
(b) As of the end of each Plan Year, the Company
shall contribute to the Plan on behalf of each Participant
who is on the payroll of the Company on December 1 an amount
equal to 1% of his Compensation earned during the Plan Year.
Notwithstanding the foregoing, in the event an Employee
becomes a Participant during the Plan Year, only Compensation
he earns subsequent to the time he satisfies the requirements
of Sections 2.01(b), 2.01(c), 2.01(d), or 2.03(b), whichever
is applicable, shall be considered for the purposes of this
Section 3.04(b).
(c) At the discretion of the Board of Directors, the
Company may contribute an additional amount to the Plan on
behalf of each Participant who is on the payroll of the
Company on December 31. The amount of such contributions, if
any, shall be determined by the Board of Directors on an
annual basis.
3.05 Timing of Contributions
Contributions made in accordance with Sections 3.01
and 3.04(a) shall be forwarded to the Trustee as soon as
practicable after the end of each payroll cycle and
contributions made in accordance with Sections 3.04(b) and
3.04(c) shall be forwarded to the Trustee as soon as
practical after the end of the Plan Year.
3.06 Limitations Affecting Highly Compensated Employees
(a) Limitation Based on Actual Deferred Percentage:
The Actual Deferral Percentage for Highly Compensated
Employees who are Participants or who are eligible to become
Participants shall not exceed the Actual Deferral Percentage
for all Non-Highly Compensated Employees who are Participants
or who are eligible to become Participants, multiplied by
1.25. If the Actual Deferral Percentage does not meet the
foregoing test, an "alternative test" shall be applied.
Under the alternative test, the Actual Deferral Percentage
for Highly Compensated Employees may not exceed the lesser of
(i) the Actual Deferral Percentage for all Non-Highly
Compensated Employees who are Participants or who are
eligible to become Participants plus two percentage points,
or (ii) such Actual Deferral Percentage multi-plied by 2.0
(or such lesser amount as the Company determines satisfies
the provi-sions of Section 3.06(c)). The Company may
implement rules limiting the Before-Tax Contributions that
may be made by some or all Highly Compensated Employees so
that this limitation is satisfied. If the Company determines
that the limitation under this Section 3.06(a) has been
exceeded in any Plan Year, the following provisions shall
apply:
(i) The amount of Before-Tax Contributions
and/or Company Contributions made on behalf of some or all
Highly Compensated Employees shall be reduced by leveling the
highest percentage rates made on behalf of the Highly Com-
pensated Employees until the provisions of this Section
3.06(a) are satisfied. Such percentage rates shall be
rounded to the nearest one-hundredth of 1% of the
Participant's Statutory Compensation.
(ii) Before-Tax Contributions and/or Company
Contributions subject to reduction under this Section 3.06(a)
("excess contributions"), together with Income thereon, shall
be paid to the Participant before the close of the Plan Year
following the Plan Year in which the excess contributions
were made and, to the extent practicable, within 2 1/2 months of
the close of the Plan Year in which the excess con-tributions
were made. However, any excess contributions for any Plan
Year shall be reduced by any Before-Tax Contributions
previously returned to the Participant under Section 3.01(d)
or 3.01(e) for that Plan Year. In the event that any Before-
Tax Con-tributions returned under this Section 3.06(a) were
matched by Company Matching Contributions, such corresponding
Company Matching Contributions, together with Income thereon,
shall be forfeited and used to reduce future Company Matching
Contributions.
(b) Limitation Based on Actual Contribution
Percentage: The Actual Contribution Percentage for Highly
Compensated Employees who are Participants or who are
eligible to become Participants shall not exceed the Actual
Contribution Percentage for all Non-Highly Compensated
Employees who are Participants or who are eligible to become
Participants, multiplied by 1.25. If the Actual Contribution
Percentage does not meet the foregoing test, an "alternative
test" shall be applied. Under the alternative test, the
Actual Contribution Percentage for Highly Compensated
Employees may not exceed the lesser of (i) the Actual
Contribution Percentage for all Non-Highly Compensated
Employees who are Participants or who are eligible to become
Participants plus two percentage points, or (ii) such Actual
Contribution Percentage multiplied by 2.0 (or such lesser
amount as the Company determines satisfies the provisions of
Section 3.06(c)). If the Company determines that the
limitation under this Section 3.06(b) has been exceeded in
any Plan Year, the following provisions shall apply:
(i) The amount of Company Matching Contributions
made on behalf of some or all Highly Compensated Employees in
the Plan Year shall be reduced, to the extent necessary to
ensure that the provisions of this Section 3.06(b) are
satisfied, by leveling the highest percentage rates of the
Highly Compensated Employees. Such percentage rates shall be
rounded to the nearest one-hundredth of 1% of a Participant's
Statutory Compensation.
(ii) Any Company Matching Contributions subject
to reduction under this Section 3.06(b) ("excess aggregate
contributions"), together with Income thereon, shall be
reduced and the amount of vested Company Matching
Contributions together with Income thereon shall be paid to
the Participant and the amount of nonvested Company Matching
Contributions together with Income thereon shall be forfeited
and used to reduce future Company Matching Contributions.
(iii)Any repayment or forfeiture of excess
aggregate contributions shall be made before the close of the
Plan Year following the Plan Year for which the excess
aggregate contributions were made and, to the extent
practicable, any repayment shall be made within 2 1/2 months of
the close of the Plan Year in which the excess aggregate
contributions were made.
(c) If after applying the provisions of Sections
3.06(a) and 3.06(b) multiple use of the alternative test is
necessary, in no event shall the sum of the Actual Deferral
Percentage of the group of eligible Highly Compensated
Employees and the Actual Contribution Percentage of such
group exceed the "aggregate limit," as such term is defined
under regulations to Code Section 401(m). In the event the
aggregate limit is exceeded for any Plan Year, the Actual
Contribution Percentage for the Highly Compensated Employees
shall be reduced to the extent necessary to satisfy the
aggregate limit in accordance with the procedure set forth in
Section 3.06(b).
(d) The Company may elect to use Before-Tax
Contributions or Company Contributions to satisfy the tests
described in Sections 3.06(b) and 3.06(c) provided that at
least one of the tests described in Section 3.06(a) is met
prior to such election and continues to be met following the
Company's election to shift the application of those Before-
Tax Contributions or Company Contributions from the tests
described in Section 3.06(a) to the tests described in
Section 3.06(b)
(e) If any Highly Compensated Employee is either (i)
a 5% owner, or (ii) one of the 10 highest-paid Highly
Compensated Employees, then any benefit or con-tribution paid
to or made on behalf of any member of his "family" (as
defined under Code Section 414(q)(6)(B)) shall be deemed paid
to or made on behalf of such Highly Compensated Employee for
purposes of Sections 3.06(a), 3.06(b) and 3.06(c) to the
extent required under regulations prescribed by the Secretary
of the Treasury or his delegate under Code Sections 401(k)
and 401(m). Any return of excess contributions or excess
aggregate contributions required under Section 3.06(a),
3.06(b) or 3.06(c) with respect to the family group shall be
made in accordance with such regulations. The total benefit
shall be apportioned among the Highly Compensated Employee
and the members of his "family" (as defined under Code
Section 414(q)(6)(B)) in a manner determined by the Company
and shall be uniformly applicable to all Employees similarly
situated. Furthermore, in the determination of the
Compensation and Statutory Compensation of such Highly
Compensated Employee, the rules of Code Section 414(q)(6)
shall apply, except that the term "family" shall include only
the spouse of the Employee and any lineal descendants of the
Employee who have not attained age 19 before the close of the
calendar year.
(f) If any Highly Compensated Employee is a
participant of another qualified plan of the Company or an
Affiliated Employer, other than an employee stock ownership
plan described in Code Section 4975(e)(7), under which
deferred cash contributions or matching contributions are
made on behalf of the Highly Compensated Employee or under
which the Highly Compensated Employee makes after-tax
contributions, the Company shall implement rules to take into
account all such contributions for the Highly Compensated
Employee under all such plans in applying the limitations of
this Section 3.06. Such rules shall be uniformly applicable
to all Employees similarly situated.
(g) In the event that the Plan is aggregated with one
or more other plans to satisfy the requirements of Code
Sections 401(a)(4) and 410(b) (other than for purposes of the
average benefit percentage test) or if one or more other
plans is aggregated with the Plan to satisfy the requirements
of such sections of the Code, then the provisions of Sections
3.06(a), 3.06(b) and 3.06(c) shall be applied by determining
the Actual Deferral Percentage and Actual Contribution
Percentage of employees as if all such plans were a single
plan. If this Plan is permissively aggregated with any other
plan or plans for purposes of satisfying the provisions of
Code Section 401(k)(3), the aggregated plans also must
satisfy the provisions of Code Sections 401(a)(4) and 410(b)
as though they were a single plan. Plans may be aggregated
under this Section 3.06(g) only if they have the same plan
year.
3.07 Rollovers
With the Company's permission and without regard to
any limitations on contributions set forth in this Article 3,
the Plan may receive from an Eligible Employee, in cash, any
amount previously received by him from an "eligible
retirement plan" as defined in Code Section 402(c)(8) and its
applicable regulations, provided that (i) such amount is an
"eligible rollover" as defined in Code Section 402(c)(4) and
its applicable regulations, and (ii) the Eligible Employee
provides evidence satisfactory to the Company that such
amount qualifies for rollover treatment. The rollover must
either be (i) paid to the Trustee on or before the 60th day
after the day it was received by the Eligible Employee, or
(ii) transferred directly to the Trustee from an eligible
retirement plan. Any rollovers shall be credited to an
Eligible Employee's Rollover Account.
3.08 Maximum Annual Additions
(a) The annual addition to a Participant's Accounts
for any Plan Year, which shall be considered the "limitation
year" for purposes of Code Section 415, when added to the
Participant's annual addition for that Plan Year under any
other qualified plan of the Company or an Affiliated
Employer, shall not exceed an amount that is equal to the
lesser of (i) 25% of the Participant's aggregate remuneration
for that Plan Year, or (ii) the greater of $30,000 or 25% of
the dollar limitation in effect under Code Section
415(b)(1)(A).
(b) For purposes of this Section 3.08, the "annual
addition" to a Participant's Accounts under the Plan or any
other qualified plan maintained by the Company or an
Affiliated Employer for the Plan Year shall include:
(i) Total contributions, including Before-Tax
Contributions, Company Contributions, Company Matching
Contributions and Company Supplemental Contributions made on
the Participant's behalf by the Company or any Affiliated
Employer to the Plan or any other qualified defined
contribution plan;
(ii) Forfeitures, if applicable, that have been
allocated to the Participant's accounts under any other
qualified defined contribution plan maintained by the Company
or any Affiliated Employer;
(iii)Voluntary or mandatory contributions made by
the Participant under any qualified defined benefit plan
maintained by the Company or any Affiliated Employer; and
(iv) Contributions made on a Participant's behalf
to an "individual medical benefit account" under a qualified
pension or annuity plan maintained by the Company or any
Affiliated Employer, as described and to the extent required
under Code Section 415(l).
(c) For purposes of this Section 3.08, the term
"remuneration" with respect to any Participant shall mean the
wages, salaries and other amounts paid with respect to that
Participant by the Company or any Affiliated Employer for
personal services actually rendered, determined after any
Before-Tax Contributions are made pursuant to Section 3.01 or
pursuant to a cafeteria plan as described in Code Section
125, including, but not limited to, bonuses, overtime
payments and commissions, but excluding:
(i) Company contributions to the Plan or to any
other deferred compensation plan maintained by the Company or
any Affiliated Employer;
(ii) Amounts realized from the exercise of a non-
qualified stock option;
(iii)Amounts realized when restricted stock is no
longer subject to substantial risk of forfeiture;
(iv) Amounts realized from the disposition of a
qualified stock option; or
(v) Other amounts that receive special tax
benefits.
(d) If the annual addition to a Participant's
Accounts for any Plan Year would otherwise exceed the
limitation set forth in Section 3.08(a), the excess annual
additions to such Participant's Accounts for such Plan Year
shall be reduced to the extent necessary in the following
order:
(i) The Participant's unmatched Before-Tax
Contributions shall be reduced to the extent necessary. The
amount of the reduction shall be returned to the Participant,
together with any earnings on the contributions to be
returned.
(ii) The Participant's Company Supplemental
Contributions, if any, shall be reduced to the extent
necessary. The amount of the reduction shall be forfeited
and used to reduce future Company Supplemental Contributions.
(iii)The Participant's matched Before-Tax
Contributions and corre-sponding Company Matching
Contributions shall be reduced to the extent necessary. The
amount of the reduction attributable to the Participant's
matched Before-Tax Contributions shall be returned to the
Participant, together with any earnings on those
contributions to be returned, and the amount attributable to
the Company Matching Contributions shall be forfeited and
used to reduce future Company Matching Contributions.
(iv) The Participant's Company Contributions
shall be reduced to the extent necessary. The amount of the
reduction shall be forfeited and used to reduce future
Company Contributions.
(e) If a Participant has at any time participated in
both a qualified defined benefit plan and a qualified defined
contribution plan maintained by the Company or an Affiliated
Employer for a Plan Year, the sum of the Participant's
defined benefit plan fraction and defined contribution plan
fraction for such Plan Year shall not exceed 1.0.
The terms "defined benefit plan fraction" and
"defined contribution plan fraction" shall mean the
following:
(i) "Defined benefit plan fraction" for any
calendar year is a fraction --
(A) the numerator of which is the projected
annual benefit of the Participant (determined as of the close
of the calendar year) under all qualified defined benefit
plans maintained by the Company or an Affiliated Employer;
and
(B) the denominator of which is the lesser
of (1) or (2) below:
(1) the product of 1.25 multiplied by
the defined benefit plan dollar limitation under Code Section
415(b)(1)(A) (as multiplied by the Adjustment Factor) in
effect for such calendar year; or
(2) the product of 1.4 multiplied by
an amount that is 100% of the Participant's average
remuneration for the three consecutive years in which his
compensation was the highest.
(ii) "Defined contribution plan fraction" for any
calendar year is a fraction --
(A) the numerator of which is the sum of
the annual additions made on behalf of a Participant for such
calendar year and all prior calendar years; and
(B) the denominator of which is the sum of
the lesser of (1) or (2) below determined for such calendar
year and for each prior year of service with the Company or
an Affiliated Employer:
(1) the product of 1.25 multiplied by
the defined con-tribution plan dollar limitation under Code
Section 415(c)(1)(A) (as multiplied by the Adjustment Factor)
in effect for such calendar year; or
(2) the product of 1.4 multiplied by
an amount equal to 25% of the Participant's remuneration for
such year.
In the event the sum of a Participant's defined
benefit fraction and defined contribution fraction exceeds
1.0, his benefit under any defined benefit plan maintained by
the Company shall be decreased until such sum equals 1.0.
3.09 Return of Contributions
Except as provided below, at no time shall any
contributions (or portions thereof) revert to the Company
prior to the discharge of all liabilities under the Plan.
(a) If a contribution is conditioned on initial
qualification of the Plan under Code Section 401(a) and if
the Commissioner of Internal Revenue, on timely application
made after the establishment of the Plan, determines that the
Plan is not initially so qualified, or refuses, in writing,
to issue a determination as to whether the Plan is so
qualified, said contribution shall be returned to the Company
without interest. The return shall be make within one year
after the date of the final determination of the denial of
qualification. The provisions of this Section 3.09(a) shall
apply only if the application for the determination is made
by the time prescribed by law for filing the Company's return
for the taxable year in which the Plan was adopted, or such
later date as the Secretary of the Treasury may prescribe.
(b) If all or part of the Company's deductions under
Code Section 404 for contributions to the Plan are disallowed
by the Internal Revenue Service, the portion of the
contributions to which that disallowance applies shall be
returned to the Com-pany without interest but reduced by any
investment loss attributable to those contributions. The
return shall be made within one year after the disallowance
of the deduction.
(c) A Company may recover without interest the amount
of its contribu-tions to the Plan made on account of a
mistake of fact, reduced by any investment loss attributable
to those contributions, if recovery is made within one year
after the date of those contributions.
(d) In the event that Before-Tax Contributions made
under Section 3.01 are returned to the Company in accordance
with the provisions of this Section 3.09, the elections to
reduce compensation which were made by Participants on whose
behalf those contributions were made shall be void
retroactively to the beginning of the period for which those
contributions were made. The Before-Tax Contributions so
returned shall be distributed in cash to those Participants
for whom those contributions were made.
Article 4. Investment of Contributions
4.01 Funds
Contributions to the Plan shall be invested in one or
more of the Funds described in Section 1.29.
4.02 Investment of Participant's Accounts
(a) A Participant shall direct that the total of his
Before-Tax Contributions made pursuant to Section 3.01 shall
be invested in 10% increments in one or more of the Funds
described in Section 1.29.
(b) A Participant's Company Contributions, Company
Matching Contributions and Company Supplemental Contributions
shall be invested in accordance with the election made under
Section 4.02(a).
(c) An Eligible Employee who makes a rollover in
accordance with Section 3.07, shall direct that the total of
such rollover shall be invested in 10% increments in one or
more of the funds described in Section 1.29.
(d) In the event that the Participant or, if
applicable, an Eligible Employee makes no investment
election, his Accounts shall be invested in Fund A.
4.03 Responsibility for Investments
Each Participant is solely responsible for the
selection of his investment options. The Trustee, the
Company and the officers, supervisors and other Employees of
the Company are not empowered to advise a Participant as to
the manner in which his Accounts shall be invested. The fact
that a Fund is available to Participants for investment under
the Plan shall not be construed as a recommendation for
investment in that Fund.
4.04 Change of Election
A Participant may change his future investment
election in 10% increments as of any business day.
4.05 Reallocation of Accounts Among Funds
A Participant may elect to reallocate his Accounts
among the investment Funds, in multiples of 10%, as of any
business day; however, he may not reallocate his Accounts
among the investment Funds more than four times in each
calendar quarter.
4.06 Administrative Fees
As of the beginning of each Plan Year, the Company
shall determine the per capita amount that shall be deducted
from Participants' Accounts to share the cost of providing
for individual investment directions. Notwithstanding the
foregoing, the Company shall pay all administrative expenses
for any Participant who is actively employed. In the event
a Participant is not employed for the entire Plan Year, he
shall pay a pro rata share of the administrative expenses for
such Plan Year.
Article 5. Valuation of Accounts
5.01 Valuation of the Funds
As of each Valuation Date, the Trustee shall allocate
the amount of income or loss of each Fund since the last
Valuation Date (which shall mean the net income or net loss
of each Fund, including the net appreciation or net
depreciation in the value of each Fund).
5.02 Account Adjustments
Each Participant's proportionate share of each of the
Funds shall be determined as of each Valuation Date.
Whenever an event requires a determination of the value of a
Participant's Accounts, the value shall be computed as of the
Valuation Date coincident with or immediately following the
date of determination. However, the Company reserves the
right to change from time to time the procedures used in
valuing the Account or crediting (or debiting) the Accounts
if it concludes that such action is justified in that it
results in a more accurate reflection of the fair market
value of assets. In the event of a conflict between the
provisions of this Article 5 and such new administrative
procedures, those new administrative procedures shall
prevail.
5.03 Statement of Accounts
Not less frequently than quarterly, each Participant
shall be furnished with a statement setting forth the value
of his Accounts.
Article 6. Vested Portion of Accounts
6.0\ Before-Tax Savings Account, Company Savings Account
and Rollover Account
A Participant shall at all times be 100% vested in and
have a nonforfeitable right to the value of his Before-Tax
Savings Account, Company Savings Account and Rollover
Account.
6.02 Company Matching Savings Account and Company
Supplemental Savings Account
A Participant shall be vested in and have a
nonforfeitable right to the value of his Company Matching
Savings Account and his Company Supplemental Savings Account
in accordance with the following schedule:
Completed Years
Nonforfeitable of Service
Percentage
0 but less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
In the event that the vesting schedule changes in the
future, in the case of a Participant who had completed at
least three years of Service as of that date, the vesting
provisions in effect prior to that date shall continue to
apply to the extent that they provide the Participant with a
greater Vested Portion of his Company Matching Savings
Account and, if applicable, his Company Supplemental Savings
Account than that provided under the new vesting provisions.
Notwithstanding the foregoing, a Participant shall be
100% vested in and have a nonforfeitable right to the value
of his Company Matching Savings Account and his Company
Supplemental Savings Account upon (i) termination of
employment from the Company or an Affiliated Employer due to
death or Disability, (ii) termination of employment on or
after attainment of age 55, or (iii) attainment of age 65,
whichever occurs first.
6.03 Disposition of Forfeitures
(a) Upon termination of employment, a Participant who
is not fully vested in his Company Matching Savings Account
and, if applicable, his Company Supplemental Savings Account
shall forfeit the nonvested portion of his Company Matching
Savings Account and his Company Supplemental Savings Account.
(b) Forfeitures shall be used (i) first, to restore
Participants' Accounts in accordance with Section 6.03(c)
below, and (ii) then, to reduce future Company Matching
Contributions or, if applicable, Company Supplemental
Contributions. Forfeitures also may be used to pay expenses
that arise in connection with the administration of the Plan.
(c) If an Employee is rehired after incurring a one-
year Period of Severance which does not cause him to lose his
prior Service in accordance with the Rule of Parity, the
Service he had earned prior to his termination shall be added
to the Service he earns after his Reemployment Commencement
Date. (i) In the event that an Employee incurs
fewer than five consecu-tive one-year Periods of Severance
between his date of termination and his Reemployment
Commencement Date and he has received a distribution in
accordance with Section 8.04, the amount of his Company
Matching Savings Account and Company Supplemental Savings
Account, which he forfeited upon termination shall be
restored to his Company Matching Savings Account and Company
Supplemental Savings Account without taking into account any
gains or losses of the Fund which have occurred since the
effective date of the forfeiture, provided that, the Employee
repays to the Plan his total distribution attributable to
Company Matching Contributions and, if applicable, Company
Supplemental Contributions prior to (i) the date he incurs
five one-year Periods of Severance, or (ii) five years after
his Reemployment Commencement Date, whichever occurs earlier.
(ii) In the event that an Employee incurs fewer
than five consecutive one-year Periods of Severance between
his date of termination and his Reemployment Commencement
Date and he has not received a distribution in accordance
with Section 8.04, the amount of his Company Matching Savings
Account and his Company Supplemental Savings Account, which
he forfeited upon termination shall be restored to his
Company Matching Savings Account and his Company Supplemental
Savings Account plus any gains or losses of the Fund which
have occurred since the effective date of the forfeiture.
(iii)In the event an Employee incurs five or more
consecutive one-year Periods of Severance between his
termination date and his Reemployment Com-mencement Date or
he fails to repay to the Plan his total distribution
attributable to Company Matching Contributions and Company
Supplemental Contributions in accordance with Section
6.03(c)(i), the amount of his Company Matching Savings
Account and Company Supplemental Savings Account which he
forfeited shall not be restored.
Article 7. In-Service Withdrawals
7.01 Withdrawals On or After Attainment of Age 59 1/2
A Participant who has attained at least age 59 1/2 may
withdraw all or a portion of the value of his Before-Tax
Contribution Account and all or a portion of the Vested
Portion of the value of his Company Matching Savings Account.
In no event, however, can a Participant withdraw less than
$500.
7.02 Rollover Withdrawals
A Participant may withdraw all or a portion of the
value of his Rollover Account. In no event, however, can a
Participant withdraw less than $500.
7.03 Hardship Withdrawals
(a) A Participant may withdraw all or a portion of
his Before-Tax Contributions (subject to the restrictions
described in Section 7.03(b)(ii)), and the Vested Portion of
the value of his Company Matching Savings Account by giving
notice in the manner prescribed by the Company, provided that
he needs such withdrawal to cover any of the following
financial emergencies:
(i) Medical expenses, as
defined in Code Section 213(d), for the Participant, his
spouse and/or dependents;
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii)Tuition payments and related educational
fees for the next 12 months of post-secondary education for
the Participant, his spouse and/or dependents; and
(iv) Amounts necessary to prevent the eviction of
the Participant from his principal residence or foreclosure
on the mortgage of the Participant's principal residence.
(b) The minimum amount that can be withdrawn is $500
and the maximum amount that can be withdrawn is the amount
necessary to cover the financial emergency, plus the amount
necessary to pay any taxes or penalties due on the amount
withdrawn. To the extent necessary, withdrawals shall be
taken in the following order:
(i) The Vested Portion of the value of the
Participant's Company Matching Savings Account; and
(ii) The Participant's Before-Tax Contributions
(or the value of his Before-Tax Savings Account if less).
(c) The distribution must be necessary to satisfy the
Participant's immediate and heavy financial need. A
distribution shall be deemed to satisfy this requirement if:
(i) The distribution is not in excess of the
amount of the Participant's immediate and heavy financial
need;
(ii) The Participant has obtained all
distributions, other than hardship distributions subject to
these same requirements, and all non-taxable loans which are
currently available under the Plan and all qualified plans
maintained by the Company or an Affiliated Employer;
(iii)The Participant makes no contributions to
any qualified plan (except to a defined benefit plan that
requires mandatory employee contributions) maintained by the
Company or an Affiliated Employer for at least 12 months; and
(iv) Any amounts contributed by the Participant
on a before-tax basis to any qualified plan maintained by the
Company or an Affiliated Employer in the taxable year
following the year of distribution under this Section 7.03
shall be restricted to the limitation applicable to such
year, reduced by any contributions made on a before-tax basis
to any qualified plan in the year the distribution is made.
7.04 Timing and Procedures and Form of Payment
To make a withdrawal under Sections 7.01, 7.02 or
7.03, a Participant shall give 15 days' written notice to the
Company on the appropriate form provided by the Company. The
Participant shall also provide any supporting data that shall
be requested by the Company.
(a) In service withdrawals shall be determined as of
the Valuation Date that follows the receipt of the written
notice and shall be paid as soon as administratively feasible
after such date.
(b) Withdrawals shall be made pro-rata across the
Funds within each money type withdrawn.
(c) A withdrawal described in Sections 7.01, 7.02 or
7.03 shall be made in cash in the form of a single lump-sum
distribution and, according to the election of the
Participant, shall be made in accordance with one of the
methods of payment described in Section 8.03.
7.05 Participant Loans
A Participant may borrow from the Plan up to 50% of
the Vested Portion of his Account balances, subject to the
following (and subject to the Plan's loan rules, which are
considered to be part of the Plan and which may be changed
from time to time):
(a) A Participant's loan shall be in $1.00
increments, shall not be for less than $1,000 and shall not
exceed the lesser of:
(i) $50,000 reduced by the highest loan balance
of the Participant's loan outstanding during the immediately
prior 12-month period (ending the day before the new loan is
granted); or
(ii) 50% of the Participant's Vested Portion of
his Accounts.
For purposes of the Plan's loan provisions, all
qualified plans maintained by the Company and any Affiliated
Employer shall be treated as a single plan.
(b) The Participant may have no more than one loan
outstanding at any time and may not request more than one
loan in each Plan Year.
(c) The period of repayment for any loan, which must
be in whole months only, shall be arrived at by mutual
agreement between the Company and the Participant, but all
loans shall become due and payable following termination of
employment. Upon such termination, loans may be paid back by
a distribution, to the extent necessary, of the Participant's
Vested Portion of his Accounts, whether or not he elects to
defer payment of the remainder of such Accounts in accordance
with Article 8. The period of maturity for a loan shall not
exceed five years and shall not be for less than six months.
(d) Each loan shall bear a reasonable rate of
interest, which shall be specified in the Plan's loan rules.
The Company shall determine the appropriate rate of interest
for each loan in a uniform manner for all Participants.
(e) Each loan shall be evidenced by a promissory note
payable to the Plan.
(f) Payments of principal and interest shall be made
in accordance with the Plan's loan rules.
(g) No new loans can be taken out after termination
or retirement.
(h) Loans shall be paid in accordance with the Plan's
loan rules.
Article 8. Distribution of Accounts Upon Termination of
Employment
8.0N Eligibility
Upon a Participant's retirement, termination or death,
the Vested Portion of his Accounts, as determined under
Article 6, shall be distributed as provided in this Article
8.
8.02 Form of Distribution
Distribution of the Vested Portion of a Participant's
Accounts shall be made in cash in the form of a single lump-
sum distribution.
8.03 Method of Payment
(a) According to the Participant's election, his
taxable distribution under this Article 8 or under Sections
7.01, 7.02, or 7.03, shall be paid in accordance with one of
the following methods:
(i) The total distribution shall be paid
directly to the Participant; or
(ii) If the distribution exceeds $200:
(A) All of the distribution (or,
alternatively, a portion of the distribution if such
distribution exceeds $500), which is an eligible rollover
distribution shall be transferred directly to an eligible
retirement plan that accepts eligible rollovers; and
(B) The balance of the distribution, if
any, shall be paid directly to the Participant.
(b) Not less than 30 days or more than 90 days prior
to the date benefits are to commence, the Company shall
provide the Participant with an election form and a notice
that satisfies the requirements of 1.411(a)-11(c) of the
Income Tax Regulations and Code Section 402(f). In the event
the Participant does not return the signed election form by
the date benefits are to commence, he shall be deemed to have
elected the option described in Section 8.03(a)(i).
(c) Notwithstanding the foregoing, distributions may
commence less than 30 days after the material described in
Section 8.03(b) is given to the Participant provided that:
(i) the Participant is notified that he has the
right to a period of at least 30 days after receipt of the
material to consider whether or not to elect a distribution;
and
(ii) he affirmatively elects to receive a
distribution.
For the purposes of this Section 8.03, "eligible
rollover distribution" and "eligible retirement plan" are
defined in Section 11.05.
8.04 Distribution Upon Retirement or Termination
Except as provided for in Section 8.06, upon
retirement, termination or Disability, a Participant may
elect to receive his distribution as soon as administratively
feasible after the Valuation Date that follows either:
(a) The date he retires, terminates or incurs a Disability;
or
(b) The date he makes a written election to take his
distribution but in no event later than the date specified in
Section 8.07; or
(c) Attainment of Normal Retirement Age.
Notwithstanding the foregoing, in no event can a
distribution be made under this Section 8.04 prior to the
Participant's attainment of Normal Retirement Age, unless he
elects in writing to receive such distribution.
8.05 Distribution Upon Death
(a) Except as provided for in Section 8.05(b), upon
the death of a Participant, his Beneficiary shall receive a
full distribution as soon as administratively feasible after
the Valuation Date that follows the Participant's date of
death.
(b) Notwithstanding the foregoing, if the Beneficiary
is the Participant's spouse, she may elect to defer receipt
of her distribution until as soon as administra-tively
feasible after the Valuation Date that follows the
Participant's date of death but in no event later than (i)
the December 31 of the calendar year in which the Participant
would have attained age 70 1/2, or (ii) the December 31 of the
calendar year that follows the calendar year in which the
Participant dies, whichever occurs last.
(c) A spouse Beneficiary may elect to be paid in
accordance with either of the methods of payment described in
Section 8.03, except that in the event the spouse elects the
method described in Section 8.03(a)(ii), the distribution can
only be transferred directly to an individual retirement
account or an individual retirement annuity. A non-spouse
Beneficiary shall be paid in accordance with the method of
payment described in Section 8.03(a)(i). For the purposes of
this Section 8.05(c), "Beneficiary" shall replace
"Participant" in each place that "Participant" appears in
Section 8.03.
8.06 Small Payments
Notwithstanding the provisions of Sections 8.04 and
8.05, whichever is applicable, in the event that the total
Vested Portion of a Participant's Accounts amounts to $3,500
or less, distribution of such Accounts shall be made as soon
as administratively feasible after the Valuation Date that
follows the date an event in Section 8.04 or 8.05 occurs.
8.07 Minimum Required Distributions
(a) Notwithstanding anything to the contrary
contained in this Article 8, unless the Participant elects
otherwise, in no event can distribution of the Vested Portion
of a Participant's Accounts occur later than 60 days after
the close of the Plan Year in which (i) the Participant
terminates employment, or (ii) the Participant attains Normal
Retirement Age, whichever occurs last.
(b) In no event, however, shall the provisions of
this Article 8 operate so as to allow the distribution of a
Participant's Accounts to begin later than the April 1
following the calendar year in which the Participant attains
age 70 1/2. Notwithstanding the foregoing, distributions to a
Participant shall not be required until the April 1 following
the calendar year in which he retires if (i) he does not own
more than 5% of the outstanding stock of the Company (or
stock possessing more than 5% of the total combined voting
power of all Company stock, a "5% owner"), and (ii) he
attained age 70 1/2 prior to January 1, 1988.
(c) In the event that a Participant is required to
begin receiving payments while employed under the provisions
of Section 8.07(b), the Participant may elect to receive
payments while in service in accordance with options under
clause (i) or (ii) as follows:
(i) A Participant may receive one lump-sum
payment on or before the Participant's required beginning
date equal to his entire Account balances and annual lump-sum
payments thereafter of amounts accrued during each calendar
year; or
(ii) A Participant may receive annual payments of
the minimum amount necessary to satisfy the minimum
distribution requirements of Code Section 401(a)(9). Such
minimum amount shall be determined on the basis of the joint
life expectancy of the Participant and his Beneficiary. Such
life expectancy shall not be recalculated. The minimum
distribution amount shall be allocated among the Funds in
proportion to the value of the Participant's Accounts as of
the date of each withdrawal.
A Participant shall make an election under this
Section 8.07(c) by giving written notice to the Company
within the 90-day period prior to his required beginning
date. Upon the Participant's subsequent termination of
employment, payment of the Participant's Accounts shall be
made in accordance with the provi-sions of Section 8.02. In
the event that a Participant fails to make an election under
this Section 8.07(c), payment shall be made in accordance
with clause (ii) above.
8.08 Status of Accounts Pending Distribution
Until distributed, the Accounts of a Participant who
is entitled to a distribu-tion shall continue to be invested
as provided under Article 4. A terminated Participant shall
continue to have the opportunity to make investment
reallocations in accordance with Section 4.05.
8.09 Proof of Death and Right of Beneficiary or Other
Person The Company may require and rely upon such
proof of death and such evidence of the right of any
Beneficiary or other person to receive the value of the
Accounts of a deceased Participant as the Company may deem
proper, and its deter-mination of death and of the right of
that Beneficiary or other person to receive payment shall be
made in accordance with Section 9.09.
8.10 Failure to Locate Recipient
In the event that the Company is unable to locate a
Participant or Beneficiary who is entitled to payment under
the Plan within five years from the date such payment was to
have been made, the amount to which such Participant or
Beneficiary was entitled shall be declared a forfeiture and
shall be used to reduce future Company Matching
Contributions, Company Contributions and Company Supplemental
Contributions to the Plan. If the Participant or Beneficiary
is later located, the benefit that was previously forfeited
hereunder shall be restored by means of additional Company
contributions to the Plan or, in the event of prior
termination of the Plan, by the Company.
8.11 Distribution Limitation
Notwithstanding any other provision of this Article 8,
all distributions from the Plan shall conform to the
regulations issued under Code Section 401(a)(9), including
the incidental death benefit provisions of Code Section
401(a)(9)(G). Further, such regulations shall override any
Plan provision that is inconsistent with Code Section
401(a)(9).
Article 9. Administration of the Plan
9.01 Administration
(a) The Plan shall be administered by the
Administrative Committee (the "Committee") consisting of at
least three members.
(b) The Committee, in its sole and absolute
discretion, shall resolve questions relating to the
interpretation of the Plan, the eligibility of Employees to
participate and the amount of benefits payable in each
individual case, as well as questions relating to the
financial aspects of the Plan.
(c) The Committee shall have the power, duty and
responsibility to direct the administration of the Plan in
accordance with the provisions herein. The Committee shall
have the authority to appoint recordkeepers, Certified Public
Accoun-tants, investment counsellors, trustees, attorneys and
other experts, and may delegate responsibility to these
experts whenever necessary to enable the Committee to carry
out its assigned duties under the Plan.
(d) All decisions of the Committee as to the facts of
any case or the meaning and intent of any of the provisions
of the Plan or of any ruling or regulation and its
application to any case shall be final, subject to any appeal
in accordance with Section 9.09.
9.02 Individual Accounts
The Committee shall maintain, or cause to be
maintained, records showing the individual balances in each
Participant's Accounts. However, maintenance of those
records and Accounts shall not require any segregation of the
Funds.
9.03 Action of Majority
Any act that the Company authorizes or requires the
Committee to do may be done by a majority of its members.
The action of that majority expressed from time to time by a
vote at a meeting, whether in person or by conference call,
or in writing without a meeting, shall constitute the action
of the Committee and shall have the same effect for all
purposes as if agreed to by all Committee members.
9.04 Compensation and Bonding
No Employee or Committee member shall receive any
compensation from the Plan for his services as such. The
Committee shall purchase such bonds as may be required under
ERISA.
9.05 Prudent Conduct
The Committee shall use that degree of care, skill,
prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in his conduct of a
similar situation.
9.06 Service in More Than One Fiduciary Capacity
Any individual, entity or group of persons may serve
in more than one fiduciary capacity with respect to the Plan
and/or the Funds.
9.07 Indemnification
The Committee, the Board of Directors and the
officers, Employees and agents of the Company and any
Affiliated Employer shall be indemnified against any and all
liabilities arising by reason of any act or failure to act in
relation to the Plan or the Funds, including, without
limitation, expenses reasonably incurred in the defense of
any claim relating to the Plan or the Funds, and reasonable
amounts paid in any compromise or settlement relating to the
Plan or the Funds, except for actions or failures to act made
in bad faith.
9.08 Expenses of Administration
All expenses that arise in connection with the
administration of the Plan, including, but not limited to,
the compensation of the Trustee, administrative expenses,
proper charges and disbursements of the Trustee, and
compensation and other expenses and charges of any counsel,
recordkeeper, accountant, specialist or other person employed
by the Company in connection with the administration of the
Plan shall be paid from the Fund to the extent not paid by
the Company.
9.09 Claims Procedures
(a) If any Participant or Beneficiary makes a written
claim for benefits under the Plan and such benefits are
denied, the Committee, within 90 days of the date the claim
is filed (or, if special circumstances require an extension
of time for processing the claim and written notice is given
to the claimant of such extension, and such notice describes
the circumstances requiring the extension and the date the
Committee expects to render a final decision, up to 180 days
after the original claim is filed), shall give the claimant
written notice of the denial of claimed benefits, setting
forth specific reasons for the denial, references to
pertinent Plan provisions, the reason for and description of
any additional material or information needed to perfect the
claim and an explanation of the review procedure.
(b) The decision of the Committee shall be final
unless the claimant, within 60 days after receipt of notice
of the Committee's decision, submits a written request to the
Committee for review of the decision. The claimant or his
authorized repre-sentative shall have 30 days after
submitting a written request for review during which Plan
documents may be reviewed and written issues and comments may
be submitted. Within 60 days after receipt of the written
request for review, the Com-mittee shall issue a written
decision, including reasons for the decision and references
to controlling Plan provisions. Such decision shall be
final.
Article 10. Management of the Funds
10.01 Trust Agreement
The Funds shall be held by a Trustee appointed from
time to time by the Company under a trust agreement adopted,
or as amended, by the Company for use in providing the
benefits of the Plan and paying its expenses not paid
directly by the Company. The Company shall have no liability
for the administration of the Funds held by the Trustee.
10.02 Exclusive Benefit Rule
Except as otherwise provided in the Plan, no part of
the corpus or income of the Funds shall be used for or
diverted to purposes other than for the exclusive benefit of
Participants and other persons entitled to benefits under the
Plan. No person shall have any interest in or right to any
part of the earnings of the Funds, or any right in or to any
part of the assets held under the Plan, except as and to the
extent expressly provided for in the Plan.
Article 11. General Provisions
11.01 Nonalienation
Except as required by any applicable law, no benefit
under the Plan shall in any manner be anticipated, assigned
or alienated, and any attempt to do so shall be void.
However, payment shall be made in accordance with the
provisions of any judgment, decree or order which:
(a) Creates for, or assigns to, a spouse, former
spouse, child or other dependent of a Participant the right
to receive all or a portion of the Participant's benefits
under the Plan for the purpose of providing child support,
alimony payments or marital property rights to that spouse,
child or dependent;
(b) Is made pursuant to a state domestic relations
law;
(c) Does not require the Plan to provide any type of
benefit, or any option, not otherwise provided under the
Plan; and
(d) Otherwise meets the requirements of Section
206(d) of ERISA or Code Section 414(p), as amended, as a
"qualified domestic relations order," as determined by the
Company.
Any distribution due an alternate payee under a
qualified domestic relations order may be made as soon as
practicable following the earliest date specified in such
order, or as otherwise permitted under such order pursuant to
an agreement between the Plan and the alternate payee;
however, if the amount of the distribution exceeds $3,500,
the alternate payee must consent to the distribution. At the
time benefits become payable to the alternate payee, such
alternate payee shall have the right to be make a direct
rollover in accordance with Section 11.05 provided the
alternate payee is the Participant's current or former
spouse.
11.02 Conditions of Employment Not Affected by the Plan
The establishment of the Plan shall not confer any
legal rights upon any Employee or other person for a
continuation of employment, nor shall it interfere with the
rights of the Company to discharge any Employee and to treat
him without regard to the effect which that treatment might
have upon him as a Participant or potential Participant in
the Plan.
11.03 Facility of Payment
If the Company finds that a Participant or other
person entitled to a benefit is unable to care for his
affairs because of illness or accident or is a minor, the
Company may direct that any benefit due him, unless a claim
shall have been made for the benefit by a duly appointed
legal representative, be paid to his spouse, a child, a
parent or other blood relative, or to a person with whom he
resides. Any payment so made shall be a complete discharge
of the liabilities of the Plan for that benefit.
11.04 Information
Each Participant, Beneficiary or other person entitled
to a benefit, before any benefit is payable to him or on his
account under the Plan, shall file with the Company the
information that it requires to establish his rights and
benefits under the Plan.
11.05 Eligible Rollover Distributions
Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election
under this Section 11.05, a distributee may elect, at the
time and in the manner prescribed by the Company, and in
accordance with Section 8.03, to have an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover. The
following definitions apply to the terms used in this Section
11.05 and, where applicable, to the terms used in Section
8.03:
(a) "Eligible rollover distribution" means any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9) 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) "Eligible retirement plan" means an individual
retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or
a qualified trust described in Code Section 401(a), that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(c) "Distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under
qualified domestic relations order, as defined in Code
Section 414(p), are distributees with regard to the interest
of the spouse or former spouse.
(d) "Direct rollover" means a payment by the plan to
the eligible retirement plan specified by the distributee.
11.06 Top-Heavy Provisions
(a) For purposes of this Section 11.06, the Plan
shall be "top-heavy" with respect to any Plan Year if, as of
the applicable determination date, the top-heavy ratio
exceeds 60%. The top-heavy ratio shall be determined as of
the applicable Valuation Date in accordance with Code
Sections 416(g)(3) and 416(g)(4) and Article 5 of the Plan.
For purposes of determining whether the Plan is top-heavy,
the Account balances under the Plan shall be combined with
the account balances or the present value of accrued benefits
under each other qualified plan in the required aggregation
group and, at the Company's discretion, may be combined with
the account balances or the present value of accrued benefits
under any other qualified plan in the permissive aggregation
group.
(b) The following provisions shall be applicable to
Participants for any Plan Year with respect to which the Plan
is top-heavy:
(i) An additional Company contribution shall
be allocated on behalf of each Participant (and each Employee
eligible to become a Participant) who is a non-key employee
and who has not separated from service as of the last day of
the Plan Year, to the extent that the contributions made on
his behalf under Sections 3.01 and 3.04 for the Plan Year
would otherwise be less than 3% of his remuneration.
However, if the greatest percentage of remuneration
contributed on behalf of a key employee under Sections 3.01
and 3.04 for the Plan Year would be less than 3%, that lesser
percentage shall be substituted for "3%" in the preceding
sentence. Notwith-standing the foregoing provisions of this
Section 11.06(b)(i), no minimum contribution shall be made
under the Plan with respect to a Participant (or an Employee
eligible to become a Participant) if the required minimum
benefit under Code Section 416(c)(1) is provided to him by
any other qualified pension plan of the Company or an
Affiliated Employer. For the purposes of this Section
11.06(b)(i), "remuneration" has the same meaning as set forth
in Section 3.08(c) and shall not exceed the Annual Dollar
Limit.
(ii) The multiplier "1.25" in Sections
3.08(e)(i)(B)(1) and 3.08(e)(ii)(B)(1) shall be reduced to
"1.0."
(c) The following definitions apply to the terms
used in this Section 11.06:
(i) "Applicable determination date" means the
last day of (A) the first Plan Year, or (B) the preceding
Plan Year, whichever occurs last.
(ii) "Applicable Valuation Date" means the
Valuation Date coincident with the last day of the preceding
Plan Year. Where two or more plans are aggregated and do not
have the same Plan Year, the applicable Valuation Date for
each plan shall be such date for each plan which falls within
the same calendar year.
(iii) "Key employee" means an employee who is in
a category of employees determined in accordance with the
provisions of Code Sections 416(i)(1) and 416(i)(5) and any
regulations thereunder, and, where applicable, on the basis
of the Employee's remuneration (as defined in Section
3.08(c)) from the Company or an Affiliated Employer.
(iv) "Non-key employee" means any Employee who
is not a key employee.
(v) "Permissive aggregation group" means each
qualified plan in the required aggregation group and any
other qualified plan(s) of the Company or an Affiliated
Employer in which all members are non-key employees if the
resulting aggregation group continues to meet the
requirements of Code Sections 401(a)(4) and 410.
(vi) "Required aggregation group" means each
qualified plan of the Company or an Affiliated Employer in
which there are participants who are key employees or which
enables the Plan or any other such plan to meet the
requirements of Code Sections 401(a)(4) or 410.
(vii) "Top-heavy ratio" means the ratio of (A)
the value of the aggregate of the Accounts under the Plan for
key employees to (B) the value of the aggregate of the
Accounts under the Plan for all key employees and non-key
employees. (Where the "top-heavy ratio" is being determined
for a defined benefit plan that is part of the required or
permissive aggregation group, "present value of accrued
benefits" shall be substituted for "Accounts" in this
definition.) In the determination of the top-heavy ratio for
a Plan Year, distributions made during the five-year period
ending on the determination date shall be taken into account,
and the Account balance(s) of Participants who have not
performed services for the Company or an Affiliated Employer
during the five-year period ending on the determination date
shall not be taken into account.
11.07 Construction
(a) The Plan shall be construed, regulated and
administered under ERISA, the Code and the laws of the State
of California to the extent not preempted by ERISA and the
Code.
(b) The masculine pronoun shall mean the feminine
wherever appropriate, and the feminine pronoun shall mean the
masculine whenever appropriate.
(c) The titles and headings of the articles and
sections in the Plan are for convenience only. In the case
of ambiguity or inconsistency, the text rather than the
titles or headings shall control.
Article 12. Amendment, Merger and Termination
12.01 Amendment of the Plan
The Company reserves the right at any time and from
time to time, and retroactively if deemed necessary or
appropriate, to amend in whole or in part any or all of the
provisions of the Plan, except as otherwise provided by law.
However, no amendment shall make it possible for any of the
Funds to be used for or diverted to purposes other than for
the exclusive benefit of persons entitled to benefits under
the Plan, except as otherwise provided by law. No amendment
shall be made which has the effect of decreasing the balance
of the Accounts of any Participant or of reducing the
nonforfeitable percentage of the balance of the Accounts of
a Participant below the nonforfeitable percentage computed
under the Plan as in effect on the date on which the
amendment is adopted or, if later, the date on which the
amendment becomes effective.
12.02 Merger or Consolidation
The Plan may be merged with another qualified plan at
the discretion of the Company and subject to any applicable
legal requirements. However, the Plan may not be merged or
consolidated with, and its assets or liabilities may not be
transferred to, any other plan unless each person entitled to
benefits under the Plan would, if the resulting plan were
then terminated, receive a benefit immediately after the
merger, consolidation or transfer which is equal to or
greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.
12.03 Acquisitions and Additional Participating Companies
If any company is or becomes a subsidiary of or
associated with the Company, the Company may include the
employees of that subsidiary or associated company as
Participants in the Plan upon appropriate action by the Board
of Directors and by that subsidiary or company. In that
event, or if any persons become Employees as the result of
merger or consolidation or as the result of acquisition of
all or part of the assets or business of another company, the
Company shall determine to what extent, if any, previous
service with the subsidiary, associated company or prior
company shall be recognized under the Plan, but subject to
the continued qualification of the Trust for the Plan as tax-
exempt under the Code. Notwithstanding the foregoing,
nothing in the Plan shall require any credit to be given for
such prior service.
12.04 Termination of the Plan
The Company may terminate the Plan or completely
discontinue contribu-tions under the Plan for any reason and
at any time. In case of termination or partial termination
of the Plan, or complete discontinuance of Company
contributions to the Plan, the rights of affected Employees
to their Accounts under the Plan as of the date of the
termination or discontinuance shall be nonforfeitable. The
total amount in each Employee's Accounts shall be
distributed, as the Company directs, to him or for his
benefit or continued in trust for his benefit.
IN WITNESS WHEREOF, Caesars World, Inc. and Subsidiaries has
adopted the Plan to be effective January 1, 1994
Caesars World, Inc. and Subsidiaries
By:
Title:
By:
Title:
APPENDIX A TO
CAESARS 401(k)
RETIREMENT SAVINGS PLAN
PARTICIPATING SUBSIDIARIES
Boardwalk Regency Corporation
Brookdale on the Lake
Caesars World Entertainment
Caesars World Gaming Development Corporation
Caesars World Marketing Corporation
Caesars World Merchandising, Inc.
Caesars World Resorts, Inc.
Cove Haven, Inc.
Desert Palace, Inc. dba Caesars Palace
Desert Palace, Inc. dba Caesars Tahoe
Paradise Stream, Inc.
Pocono Palace, Inc.
CAESARS 401(k)
RETIREMENT SAVINGS PLAN
Effective January 1, 1994
TABLE OF CONTENTS Page
Preamble . . . . . . . . . . . . . . . . . . . . . . . . (v)
Article 1. Definitions. . . . . . . . . . . . . . . . . . 1
1.01 Accounts . . . . . . . . . . . . . . . . . . 1
1.02 Actual Contribution Percentage . . . . . . . 1
1.03 Actual Deferral Percentage . . . . . . . . . 1
1.04 Adjustment Factor. . . . . . . . . . . . . . 2
1.05 Affiliated Employer. . . . . . . . . . . . . 2
1.06 Annual Dollar Limit. . . . . . . . . . . . . 3
1.07 Before-Tax Contributions . . . . . . . . . . 3
1.08 Before-Tax Savings Account . . . . . . . . . 4
1.09 Beneficiary. . . . . . . . . . . . . . . . . 4
1.10 Board of Directors . . . . . . . . . . . . . 4
1.11 Break in Service . . . . . . . . . . . . . . 4
1.12 Code . . . . . . . . . . . . . . . . . . . . 5
1.13 Committee. . . . . . . . . . . . . . . . . . 5
1.14 Company. . . . . . . . . . . . . . . . . . . 5
1.15 Company Contributions. . . . . . . . . . . . 6
1.16 Company Matching Contributions . . . . . . . 6
1.17 Company Matching Savings Account . . . . . . 6
1.18 Company Savings Account. . . . . . . . . . . 6
1.19 Company Supplemental Savings Account . . . . 6
1.20 Company Supplemental Contributions . . . . . 6
1.21 Compensation . . . . . . . . . . . . . . . . 6
1.22 Disability . . . . . . . . . . . . . . . . . 7
1.23 Effective Date . . . . . . . . . . . . . . . 7
1.24 Eligible Employee. . . . . . . . . . . . . . 7
1.25 Employee . . . . . . . . . . . . . . . . . . 8
1.26 Employment Commencement Date . . . . . . . . 8
1.27 Enrollment Date. . . . . . . . . . . . . . . 8
1.28 ERISA. . . . . . . . . . . . . . . . . . . . 8
1.29 Fund . . . . . . . . . . . . . . . . . . . . 8
1.30 Highly Compensated Employee. . . . . . . . . 9
1.31 Hour of Service. . . . . . . . . . . . . . .11
1.32 Income . . . . . . . . . . . . . . . . . . .12
1.33 Leased Employee. . . . . . . . . . . . . . .13
1.34 Leave of Absence . . . . . . . . . . . . . .13
1.35 Non-Highly Compensated Employee. . . . . . .13
1.36 Normal Retirement Age. . . . . . . . . . . .13
1.37 Participant. . . . . . . . . . . . . . . . .13
1.38 Period of Severance. . . . . . . . . . . . .13
1.39 Plan . . . . . . . . . . . . . . . . . . . .14
1.40 Plan Administrator . . . . . . . . . . . . .14
1.41 Plan Year. . . . . . . . . . . . . . . . . .14
1.42 Reemployment Commencement Date . . . . . . .15
1.43 Rollover Account . . . . . . . . . . . . . .15
1.44 Rule of Parity . . . . . . . . . . . . . . .15
1.45 Seconded Employee. . . . . . . . . . . . . .16
1.46 Service. . . . . . . . . . . . . . . . . . .16
1.47 Severance from Service Date. . . . . . . . .17
1.48 Spousal Consent. . . . . . . . . . . . . . .17
1.49 Statutory Compensation . . . . . . . . . . .18
1.50 Subsidiary . . . . . . . . . . . . . . . . .18
1.51 Trustee. . . . . . . . . . . . . . . . . . .19
1.52 Valuation Date . . . . . . . . . . . . . . .19
1.53 Vested Portion . . . . . . . . . . . . . . .19
1.54 Year of Eligibility Service. . . . . . . . .19
Article 2. Eligibility and Participation. . . . . . . . .20
2.01 Eligibility. . . . . . . . . . . . . . . . .20
2.02 Participation. . . . . . . . . . . . . . . .21
2.03 Transferred Participants . . . . . . . . . .21
2.04 Termination of Participation . 22
Article 3. Contributions. . . . . . . . . . . . . . . . .23
3.01 Before-Tax Contributions . . . . . . . . . .23
3.02 Change in Contributions. . . . . . . . . . .25
3.03 Suspension of Contributions. . . . . . . . .25
3.04 Company Contributions. . . . . . . . . . . .26
3.05 Timing of Contributions. . . . . . . . . . .27
3.06 Limitations Affecting Highly Compensated
Employees. . . . . . . . . . . . . . . . . .27
3.07 Rollovers. . . . . . . . . . . . . . . . . .33
3.08 Maximum Annual Additions . . . . . . . . . .34
3.09 Return of Contributions. . . . . . . . . . .39
Article 4. Investment of Contributions. . . . . . . . . .41
4.01 Funds. . . . . . . . . . . . . . . . . . . .41
4.02 Investment of Participant's Accounts . . . .41
4.03 Responsibility for Investments . . . . . . .42
4.04 Change of Election . . . . . . . . . . . . .42
4.05 Reallocation of Accounts Among Funds . . . .42
4.06 Administrative Fees. . . . . . . . . . . . .42
Article 5. Valuation of Accounts. . . . . . . . . . . . .44
5.01 Valuation of the Funds . . . . . . . . . . .44
5.02 Account Adjustments. . . . . . . . . . . . .44
5.03 Statement of Accounts. . . . . . . . . . . .44
Article 6. Vested Portion of Accounts . . . . . . . . . .45
6.01 Before-Tax Savings Account, Company
Savings Account and Rollover Account . . . .45
6.02 Company Matching Savings Account and Company
Supplemental Savings Account . . . . . . . .45
6.03 Disposition of Forfeitures . . . . . . . . .46
Article 7. In-Service Withdrawals . . . . . . . . . . . .49
7.01 Withdrawals On or After Attainment of
Age 59 1/2 . . . . . . . . . . . . . . . . .49
7.02 Rollover Withdrawals . . . . . . . . . . . .49
7.03 Hardship Withdrawals . . . . . . . . . . . .49
7.04 Timing and Procedures and Form of Payment. .51
7.05 Participant Loans. . . . . . . . . . . . . .52
Article 8. Distribution of Accounts Upon Termination of
Employment . . . . . . . . . . . . . . . . . .55
8.01 Eligibility. . . . . . . . . . . . . . . . .55
8.02 Form of Distribution . . . . . . . . . . . .55
8.03 Method of Payment. . . . . . . . . . . . . .55
8.04 Distribution Upon Retirement or
Termination. . . . . . . . . . . . . . . . .57
8.05 Distribution Upon Death. . . . . . . . . . .57
8.06 Small Payments . . . . . . . . . . . . . . .58
8.07 Minimum Required Distributions . . . . . . .59
8.08 Status of Accounts Pending Distribution. . .60
8.09 Proof of Death and Right of Beneficiary
or Other Person. . . . . . . . . . . . . . .61
8.10 Failure to Locate Recipient. . . . . . . . .62
8.11 Distribution Limitation. . . . . . . . . . .62
Article 9. Administration of the Plan . . . . . . . . . .63
9.01 Administration . . . . . . . . . . . . . . .63
9.02 Individual Accounts. . . . . . . . . . . . .64
9.03 Action of Majority . . . . . . . . . . . . .64
9.04 Compensation and Bonding . . . . . . . . . .64
9.05 Prudent Conduct. . . . . . . . . . . . . . .64
9.06 Service in More Than One Fiduciary Capacity.65
9.07 Indemnification. . . . . . . . . . . . . . .65
9.08 Expenses of Administration . . . . . . . . .65
9.09 Claims Procedures. . . . . . . . . . . . . .66
Article 10. Management of the Funds . . . . . . . . . . .67
10.01 Trust Agreement. . . . . . . . . . . . . . .67
10.02 Exclusive Benefit Rule . . . . . . . . . . .67
Article 11. General Provisions. . . . . . . . . . . . . .68
11.01 Nonalienation. . . . . . . . . . . . . . . .68
11.02 Conditions of Employment Not Affected
by the Plan. . . . . . . . . . . . . . . . .69
11.03 Facility of Payment. . . . . . . . . . . . .69
11.04 Information. . . . . . . . . . . . . . . . .70
11.05 Eligible Rollover Distributions. . . . . . .70
11.06 Top-Heavy Provisions . . . . . . . . . . . .71
11.07 Construction . . . . . . . . . . . . . . . .75
Article 12. Amendment, Merger and Termination . . . . . .76
12.01 Amendment of the Plan. . . . . . . . . . . .76
12.02 Merger or Consolidation. . . . . . . . . . .76
12.03 Acquisitions and Additional Participating
Companies. . . . . . . . . . . . . . . . . .77
12.04 Termination of the Plan. . . . . . . . . . .77
APPENDIX A TO CAESARS 401(k) . . . . . . . . . . . . . . .80
PREAMBLE
This document sets forth the provisions of the Caesars 401(k)
Retirement Savings Plan (the "Plan").
The Plan has been established for domestic non-union
employees of Caesars World, Inc. and Subsidiaries (the
"Company"). It is intended that (i) the Plan will be a
qualified plan that meets the requirements of Section 401(a)
of the Internal Revenue Code of 1986 (the "Code"), (ii)
Company contributions that are made to the Plan be allowable
as deductions from income in accordance with Code Section
404, and (iii) the funds established hereunder are entitled
to exemption from income tax under the provisions of Code
Section 501. It is further intended that the provisions of
the Plan that pertain to Before-Tax Contributions constitute
a cash or deferred arrangement under Code Section 401(k).