CHOCK FULL O'NUTS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
AS AMENDED AND RESTATED
THROUGH JUNE 30, 1994
CHOCK FULL O'NUTS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
ARTICLE CONTENTS PAGE
PREAMBLE
I DEFINITIONS 1
II ELIGIBILITY AND SERVICE
2.1 Conditions of Eligibility 8
2.2 Termination of Eligibility 8
2.3 Crediting Service on
Reemployment 8
2.4 Status of Reemployed
Participants 8
III CONTRIBUTION AND ALLOCATION
3.1 Formula for Determining Employer's
Contribution 10
3.2 Time of Payment of Employer's
Contribution 10
3.3 Allocation of Contribution, Forfeitures
and Earnings 10
3.4 Maximum Annual Additions 13
3.5 Adjustment for Excessive
Additions 16
IV INVESTMENT POLICY
4.1 Investment Policy 18
4.2 Application of Cash 18
4.3 Loans to the Trust 18
V VALUATIONS
5.1 Valuation of the Trust Fund 20
5.2 Method of Valuation 20
VI DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 Determination of Benefits Upon
Retirement 21
6.2 Determination of Benefits Upon
Death 21
6.3 Disability Retirement Benefits 22
6.4 Determination of Benefits Upon
Termination 22
6.5 Distribution of Benefits 24
6.6 How Plan Benefits Will be
Distributed 25
6.7 Distributions For Minor
Beneficiaries 25
6.8 Location of Participant or
Beneficiary Unknown 26
6.9 Limitations on Benefits and
Distributions 26
6.10 Direct Rollovers 26
6.11 Directed Investment Account 28
VII AMENDMENT, TERMINATION, AND MERGERS
7.1 Amendments 29
7.2 Termination 29
7.3 Merger or Consolidation 30
VIII ADMINISTRATION
8.1 Powers and Responsibilities of
the Employer 31
8.2 Assignment and Designation of
Administrative Authority 31
8.3 Allocation and Delegation of
Responsibilities 31
8.4 Powers and Duties of the
Administrator 32
8.5 Records and Reports 33
8.6 Appointment of Advisors 33
8.7 Information from Employer 33
8.8 Payment of Expenses 34
8.9 Majority Actions 34
8.10 Claims Procedure 34
8.11 Claims Review Procedure 34
IX MISCELLANEOUS
9.1 Participant's Rights 36
9.2 Alienation 36
9.3 Construction of Plan 37
9.4 Gender and Number 37
9.5 Legal Action 37
9.6 Prohibition Against Diversion
of Funds 37
9.7 Bonding 38
9.8 Receipt and Release for
Payments 38
9.9 Action by the Employer 38
9.10 Named Fiduciaries and
Allocation of Responsibility 39
9.11 Headings 39
9.12 Notices and Deliveries 39
9.13 Uniformity 40
9.14 Indemnification 40
9.15 Voting Passthroughs, Tender
Offers; Rights 40
X PARTICIPATING EMPLOYERS
10.1 Adoption by Other Employers 42
10.2 Requirements of Participating
Employers 42
10.3 Designation of Agent 42
10.4 Employee Transfers 43
10.5 Participating Employer's
Contribution 43
10.6 Discontinuance of
Participation 43
10.7 Administrator's Authority 43
CHOCK FULL O'NUTS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
PREAMBLE
The purpose of this Plan is to enable
Participants to acquire stock ownership interests in
the Employer and thereby share in the growth and
prosperity of the Employer and accumulate capital for
their future economic security. Therefore, it is
intended that the assets of the Trust established under
the Plan be invested primarily in Company Stock.
The Plan, adopted effective as of January 1,
1988 and hereby amended and restated effective as of
January 1, 1992 (except for those provisions which
contain a different effective date), is a stock bonus
plan constituting an employee stock ownership plan
under Section 4975(e)(7) of the Code intended to
qualify under Section 401(a) of the Code.
The Plan is administered by the Administrator
for the exclusive benefit of Participants (and their
Beneficiaries), and all assets held under the Plan are
administered, distributed, forfeited and otherwise
governed by the provisions of this Plan and the related
Trust.
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income
Security Act of 1974, as amended from time to
time.
1.2 "Administrator" means the person or persons
designated by the Employer pursuant to
Section 8.1 to administer the Plan on behalf
of the Employer.
1.3 "Affiliated Employer" means the Employer and
any corporation which is a member of a
controlled group of corporations (as defined
in Code Section 414(b)) which includes the
Employer; any trade or business (whether or
not incorporated) which is under common
control (as defined in Code Section 414(c))
with the Employer; any organization (whether
or not incorporated) which is a member of an
affiliated service group (as defined in Code
Section 414(m)) which includes the Employer;
and any other entity required to be
aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to
each Participant, the value of all accounts
maintained on behalf of a Participant.
1.5 "Anniversary Date" means January 1.
1.6 "Beneficiary" means the Participant's spouse
unless the Participant designate another
person to whom the share of a deceased
Participant's total account is payable.
1.7 "Code" means the Internal Revenue Code of
1986, as amended from time to time.
1.8 "Company Stock" means common stock issued by
the Employer which is readily tradeable on an
established securities market.
1.9 "Company Stock Account" means the account of
a Participant which is credited with the
shares of Company Stock purchased and paid
for by the Trust Fund or contributed to the
Trust Fund.
1.10 "Compensation" means a Participant's total
remuneration paid by the Employer as wages
and salary for a calendar year, including
incentive pay, bonuses, overtime pay, and
amounts from the exercise of non-qualified
stock options, but specifically excluding
employer contributions to a plan of deferred
compensation which are not includable in the
Employee's gross income for the taxable year
in which contributed. For all Plan Years
beginning on or after January 1, 1989 and
ending on or before December 31, 1993,
Compensation in excess of $200,000 (as
adjusted at the same time and in such manner
as permitted under Code Section 415(d)) shall
be disregarded.
For all Plan Years beginning on or after
January 1, 1994, the annual Compensation of
each Employee taken into account under the
Plan for a Plan Year shall not exceed
$150,000, as adjusted for increases in the
cost of living in accordance with
Section 401(a)(17)(B) of the Code. In
determining the Compensation of a Participant
for purposes of these limitations, Section
414(q)(6) of the Code shall apply, except
that the term "family" shall include only the
spouse of a Participant and any lineal
descendants of the Participant who have not
attained the age of 19 before the close of
the year.
1.11 "Credited Service" means Periods of Service
credited to a Participant for all purposes
according to the provisions of Article 2
herein. For vesting purposes hereunder
Service prior to January 1, 1988 shall be
excluded. Service with any Affiliated
Employer shall be recognized for eligibility
and vesting purposes of this Plan. Service
rendered prior to the date on which a
subsidiary or division becomes affiliated
with the Employer, shall not be recognized
for any Plan purposes, unless expressly
provided for in an appendix hereunder.
1.12 "Current Obligations" means Trust obligations
arising from extension of credit to the Trust
and payable in cash within one (1) year from
the date an Employer contribution is due.
1.13 "Eligible Employee" means any Employee other
than (a) an Employee whose employment is
governed by the terms of a collective
bargaining agreement between Employee
representatives and the Employer under which
retirement benefits were the subject of good
faith bargaining between the parties, unless
such agreement expressly provides for such
coverage in this Plan, (b) any person who is
a "leased employee" within the meaning of
Section 414(n) of the Code and (c) any
Employee who is employed at a rate of less
than 1,000 Hours of Service per year and who
does not complete 1,000 Hours of Service with
the Employer in a Plan Year.
1.14 "Employee" means any person who is employed
by the Employer, including any person who is
a "leased employee" within the meaning of
Section 414(n) of the Code, or who is
employed as an independent contractor.
1.15 "Employer" means Chock Full O'Nuts
Corporation and any Participating Employer
(as defined in Section 10.1) with the
approval of the Board of Directors of Chock
Full O'Nuts Corporation pursuant to Section
10.1 herein which shall adopt this Plan.
1.16 "Employment Commencement Date" or
"Reemployment Commencement Date" means the
date on which an Employee first performs, or
again performs (after a Period of Severance)
an Hour of Service with respect to the
Employer.
1.17 "ESOP" means an employee stock ownership plan
that meets the requirements of Code Section
4975(e)(7) and Regulation Section 54.4975-11.
1.18 "Exempt Loan" means a loan made to the Plan
by a disqualified person or a loan to the
Plan which is guaranteed by a disqualified
person and which satisfies the requirements
of Section 2550.408b-3 of the Department of
Labor Regulations, Section 54.4975-7(b) of
the Treasury Regulations and Section 4.3
hereof.
1.19 "Family Member" means an individual described
in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a)
exercises any discretionary authority or
discretionary control respecting management
of the Plan or exercises any authority or
control respecting management or disposition
of its assets, (b) renders investment advice
for a fee or other compensation, direct or
indirect, with respect to any monies or other
property of the Plan or has any authority or
responsibility to do so, or (c) has any
discretionary authority or discretionary
responsibility in the administration of the
Plan, including, but not limited to, the
Trustee, the Employer and its representative
body, and the Administrator.
1.21 "Fiscal Year" means the Employer's accounting
year of 12 months commencing on August 1 of
each year and ending the following July 31.
1.22 "Forfeiture" means that portion of a
Participant's Account that is not Vested.
1.23 "Former Participant" means a person who has
been a Participant, but who has ceased to be
a Participant for any reason. For purposes
of this Section 1.23, a "Former Participant"
shall be treated as a Highly Compensated
Participant if such "Former Participant" was
a Highly Compensated Participant when he
separated from service with the Employer or
was a Highly Compensated Participant at any
time after attaining age 55.
1.24 "415 Compensation" means compensation as
defined in Section 4.4(d).
1.25 "Highly Compensated Participant" means any
Participant or Former Participant who is a
highly compensated employee as defined in
Code Section 414(q). Generally, any
Participant or Former Participant is
considered a Highly Compensated Participant
if during the Plan Year or the preceding Plan
Year such Participant or Former Participant:
(a) was at any time a "five percent owner"
as defined in Code Section 414(q)(3);
(b) received "415 Compensation" from the
Employer in excess of $75,000. In
determining whether an individual has
"415 Compensation" of more than $75,000,
"415 Compensation" from each employer
required to be aggregated under Code
Sections 414(b), (c), and (m) shall be
taken into account; or
(c) received "415 Compensation" from the
Employer in excess of $50,000 and was in
the top-paid group of Employees for the
Plan Year. An Employee is in the top-paid
group of Employees for any Plan
Year if such Employee is in the group
consisting of the top twenty (20)
percent of the Employees when ranked on
the basis of "415 Compensation" paid
during the Plan Year. In determining
whether an individual has "415
Compensation" of more than $50,000, "415
Compensation" from each employer
required to be aggregated under Code
Sections 414(b), (c), and (m) shall be
taken into account.
1.26 "Hour of Service" means (1) each hour for
which an Employee is directly or indirectly
compensated or entitled to compensation by
the Employer for the performance of duties
during the applicable computation period; (2)
each hour for which an Employee is directly
or indirectly compensated or entitled to
compensation by the Employer (irrespective of
whether the employment elationship has
terminated) for reasons other than
performance of duties (such as vacation,
holidays, sickness, jury duty, disability,
lay-off, military duty or leave of absence)
during the applicable computation period; (3)
each hour for which back pay is awarded or
agreed to by the Employer without regard to
mitigation of damages. All Hours of Service
hereunder shall be counted for the purpose of
determining a Month of Service, a year of
Audited Service, a one year Period of
Severance, and employment commencement date
(or reemployment commencement date). The
provisions of Department of Labor Regulations
Sections 2530.200b-2(b) and (c) are
incorporated herein by reference.
1.27 "Late Retirement Date" means a Participant's
actual Retirement Date after having reached
his Normal Retirement Date.
1.28 "Maternity or Paternity Leave of Absence"
means an Employee's absence from work by
reason of pregnancy of the Employee, by
reason of birth of a child of the Employee,
by reason of the placement of a child with
the Employee in connection with adoption of
such child by such Employee, or for purposes
of caring for such child for a period
beginning immediately following such birth or
placement.
1.29 "Month of Service" means a calendar month
during any part of which an Employee
completed an Hour of Service.
1.30 "Non-Highly Compensated Participant" means
any Participant or Former Participant who is
neither a Highly Compensated Participant nor
a Family Member.
1.31 "Normal Retirement Date" means the later of
the date on which a Participant attains the
age of 65 years, or the fifth anniversary of
the Participant's Employment Commencement
Date.
A Participant shall become fully Vested in
his Account upon attaining his Normal
Retirement Date.
1.32 "One Year Period of Severance" means a twelve
(12) consecutive month period following an
Employee's Severance From Service Date during
which an Employee does not perform an Hour of
Service.
1.33 "Other Investment Account" means the account
of a Participant which is credited with his
share of the net gain (or loss) of the Plan,
Forfeitures and Employer contributions in
other than Company Stock and which is debited
with payments made to pay for Company Stock.
1.34 "Participant" means any Eligible Employee who
has become a Participant pursuant to Section
3.1 and where participation has not
terminated pursuant to Section 3.2.
1.35 "Participant's Account" means the Company
Stock Account and the Other Investments
Account established and maintained by the
Administrator for each Participant with
respect to his total interest in the Plan and
Trust resulting from the Employer's
contributions.
1.36 "Period of Service" or "Service" means a
period of service commencing on the
Employee's Employment Commencement Date or
Reemployment Commencement Date, whichever is
applicable, and ending on the Severance From
Service Date.
1.37 "Period of Severance" shall mean the period
of time commencing on the Severance From
Service Date and ending on the date on which
the Employee again performs an Hour of
Service.
1.38 "Plan" means this instrument, including all
amendments thereto.
1.39 "Plan Year" means the Plan's accounting year
of twelve (12) months commencing on January 1
of each year and ending the following
December 31.
1.40 "Regulation" means the Income Tax Regulations
as promulgated by the Secretary of the
Treasury or his delegate, and as amended from
time to time.
1.41 "Retired Participant" means a person who has
been a Participant, but who has become
entitled to retirement benefits under the
Plan.
1.42 "Retirement Date" means the date as of which
a Participant retires whether retirement
occurs on a Participant's Normal Retirement
Date or Late Retirement Date.
1.43 "Severance from Service Date" shall mean the
earlier of:
(a) the date on which an Employee's Service
is terminated by reason of his resignation,
retirement, discharge or death; or
(b) the first anniversary of the first date
of a period in which an Employee remains
absent from Service (with or without
Compensation) with the Employer for reasons
other than those listed in (a) above, such as
vacation, holiday, sickness, layoff,
disability or an authorized leave of absence;
or
(c) in the case of a Maternity or Paternity
Leave of Absence, the second anniversary of
the first date of such absence. The period
between the first and second anniversaries is
neither a Period of Service nor a Period of
Severance.
1.44 "Suspense Account" means a Former
Participant's Account which has not Vested.
1.45 "Terminated Participant" means a person who
has been a Participant, but whose employment
has been terminated other than by retirement.
1.46 "Trust" means the legal entity resulting from
the Trust Agreement between the Company and
the Trustee who receives the Company's
contributions to the Plan and holds, invests,
and disburses funds to or for the benefit of
Participants and their Beneficiaries.
1.47 "Trust Fund" means the assets of the Plan and
Trust as the same shall exist from time to
time.
1.48 "Unallocated Company Stock Suspense Account"
means an account containing Company Stock
acquired with the proceeds of an Exempt Loan
and which has not been released from such
account and allocated to the Participants'
Company Stock Accounts.
1.49 "Vested" means the portion of a Participant's
Account that is nonforfeitable.
ARTICLE II
ELIGIBILITY AND SERVICE
2.1 Conditions of Eligibility
Each Eligible Employee shall become a
Participant in the Plan as of the Anniversary
Date next following the date he shall have
completed six Months of Service, provided
that he had (a) attained age 20-1/2 on or
prior to such Anniversary Date, and (b) is
still employed as an Eligible Employee on
such Anniversary Date.
2.2 Termination of Eligibility
In the event that the classification of a
Participant shall change from that of an
Eligible Employee to a ineligible Employee,
such Former Participant shall continue to
accrue Service under the Plan while an
ineligible Employee. Additionally, his
Participant's Account under the Plan shall
continue to share in the earnings of the
Trust Fund.
2.3 Crediting Service on Reemployment
(a) If an Employee severs from Service by
reason of a quit, discharge, disability or
retirement, and performs an Hour of Service
within twelve months after the Severance from
Service Date, such Period of Severance shall
be considered a Period of Service.
(b) If a Participant who is granted an
authorized leave of absence, incurred a
Severance from Service Date within twelve
months of the date of such authorized leave
of absence, by reason of a quit, discharge,
retirement or death, and again performs an
Hour of Service within twelve months of the
date on which the Employee was first absent
from service, such Period of Severance shall
be considered a Period of Service.
2.4 Status of Reemployed Participants
In the event that a Participant has a one
year Period of Severance and is subsequently
reemployed by the Employer his status in the
Plan shall be determined as follows:
(a) If such Participant was Vested in
his Account at the time he incurred such One
Year Period of Severance, he shall resume
participation in the Plan effective as of his
Reemployment Commencement Date.
(b) If such Participant was not Vested
in his Account at the time he incurred such
One Year Period of Severance and his Period
of Severance exceeds his prior Period of
Service, he shall be treated as a new
Employee as of his Reemployment Commencement
Date.
ARTICLE III
CONTRIBUTION AND ALLOCATION
3.1 Formula for Determining Employer's
Contribution
(a) For each Plan Year, the Employer shall
contribute to the Plan such amount as may be
determined by its board of directors.
(b) Employer contributions for each Plan
Year shall never be less than the amount
required to enable the Plan to discharge its
Current Obligations, notwithstanding whether
some or all of such contributions may fail to
qualify for income tax deductions by the
Employer.
(c) The Employer's contribution for any Plan
Year, subject to the limitation provided
above, shall not exceed the maximum amount
allowable as a deduction to the Employer
under the provisions of Code Section 404.
3.2 Time of Payment of Employer's Contribution
Employer contributions will be paid in cash,
Company Stock or other property as the
Employer's board of directors may from time
to time determine. Company Stock and other
property will be valued at their then fair
market value. The Employer's contribution
will be paid to the Plan on or before the
date required to make such contribution a
deduction on the Employer's federal income
tax return for the year.
3.3 Allocation of Contribution, Forfeitures and
Earnings
(a) The Administrator shall establish and
maintain a Participant's Account in the name
of each Participant to which the
Administrator shall credit as of the last day
of each Plan Year all amounts allocated to
each such Participant as set forth herein.
(b) The Employer shall provide the
Administrator with all information required
by the Administrator to make a proper
allocation of the Employer's contribution for
each Plan Year and following the receipt by
the Administrator of such information, the
Administrator shall allocate such
contribution to the Participant's Account of
each Participant in the employ of the
Employer on the last day of the Plan Year
with respect to which such contribution
pertains in the same proportion that each
such Participant's Compensation for such year
bears to the total Compensation of all
Participants for such year.
(c) The Company Stock Account of each
Participant shall be credited as of the last
day of each Plan Year with his allocable
share of Forfeitures of Company Stock and of
Company Stock (including fractional shares)
purchased and paid for by the Plan or
contributed in kind by the Employer. Stock
dividends on Company Stock held in his
Company Stock Account shall be credited to
his Company Stock Account when paid.
Company Stock acquired with the proceeds
of any Exempt Loan shall be an asset of the
Trust Fund and maintained in the Unallocated
Company Stock Suspense Account, and shall
only be allocated to each Participant's
Company Stock Account upon release from the
Unallocated Company Stock Suspense Account as
provided in Section 4.3(e) herein.
Company Stock received by the Trust
during a Plan Year with respect to a
contribution by the Employer for the
preceding Plan Year shall be allocated to the
accounts of Participants as of the end of
such preceding Plan Year.
(d) As of each June 30 and December 31,
before allocation of Employer contributions
and Forfeitures, any earnings or losses of
the Trust Fund shall be allocated in the same
proportion that each Participant's and Former
Participant's nonsegregated accounts (other
than each Participant's Company Stock
Account) bear to the total of all
Participants' and Former Participants'
nonsegregated accounts (other than
Participants' Company Stock Accounts) as of
such date. Cash dividends on Company Stock
allocated to each Participant's or Former
Participant's nonsegregated accounts after
the first month of the Plan Year shall not
share in any earnings or losses of the Trust
Fund for such year.
Earnings or losses include the increase
(or decrease) in the fair market value of
assets of the Trust Fund (other than Company
Stock in the Participants' Company Stock
Accounts) since the preceding Valuation Date
(as defined in Section 6.1 hereof). Earnings
or losses do not include the interest paid
under any installment contract for the
purchase of Company Stock by the Trust Fund
or on any loan used by the Trust Fund to
purchase Company Stock, nor does it include
income received by the Trust Fund with
respect to Company Stock acquired with the
proceeds of an Exempt Loan to the extent such
income is used to repay the loan.
(e) All Company Stock acquired by the Plan
with the proceeds of an Exempt Loan must be
added to and maintained in the Unallocated
Company Stock Suspense Account. For each
Plan Year during the duration of the loan,
the number of shares of Company Stock
released shall equal the number of shares
held immediately before release for the
current Plan Year multiplied by a fraction,
the numerator of which is the amount of
principal and interest paid for the Plan Year
and the denominator of which is the sum of
the numerator plus the principal and interest
to be paid for all future Plan Years
(assuming level interest payments in the case
of a varying rate loan, for purposes of the
foregoing computations). As of each December
31, the Plan must consistently allocate to
each Participant's Account in the same manner
as Employer discretionary contributions are
allocated shares and fractional shares of
Company Stock representing each Participant's
interest in assets withdrawn from the
Unallocated Company Stock Suspense Account.
Income earned with respect to Company Stock
in the Unallocated Company Stock Suspense
Account shall be used to repay the Exempt
Loan used to purchase such Company Stock.
Any income which is not so used must be
allocated as income of the Plan.
(f) As of the last day of each Plan Year,
any amounts which became Forfeitures within
that Plan Year shall be allocated among the
Participants' Accounts in the same proportion
that each such Participant's Compensation for
the year bears to the total Compensation of
all Participants for the year. In the event
the allocation of Forfeitures provided herein
shall cause the "annual addition" (as defined
in Section 3.4) to any Participant's Account
to exceed the amount allowable by the Code,
the excess shall be reallocated in accordance
with Section 3.4. However, a Participant
shall not share in the Plan Forfeitures for a
Plan Year unless employed by the Employer on
the last day of such Plan Year.
(g) Notwithstanding the foregoing, the terms
set forth in Appendix 3.3(g) attached hereto
and incorporated herein shall govern the
minimum allocations required for all Plan
Years in which the Plan is "Top Heavy" or
"Super Top Heavy", as such terms are defined
therein.
(h) For the purposes of this Section, "415
Compensation", as defined in Section 3.4(d),
shall be limited in accordance with the
provisions of Section 1.10 hereof.
(i) Any Participant who terminated
employment during the Plan Year for reasons
other than retirement shall share only in the
allocations of earnings or losses as provided
in this Section.
3.4 Maximum Annual Additions
(a) Notwithstanding the foregoing, the
maximum "annual additions" credited to a
Participant's Account for any "limitation
year" shall equal the lesser of: (1) $30,000
(or, if greater, one-fourth of the dollar
limitation in effect under Code Section
415(b)(1)(A)) or (2) twenty-five percent
(25%) of the Participant's "415 Compensation"
for such "limitation year".
(b) The dollar amount provided above shall
be increased by the lesser of the dollar
amount determined above or the amount of
Company Stock contributed, or purchased with
cash contributed. The dollar amount shall be
increased provided no more than one-third of
the Employer's contributions for the year are
allocated to Highly Compensated Participants.
(c) For purposes of applying the limitations
of Code Section 415, "annual additions" means
the sum credited to a Participant's Account
for any "limitation year" of Employer
contributions and Forfeitures, and the
following shall not be deemed "annual
additions": (1) transfer of funds from one
qualified plan to another; (2) Forfeitures of
Company Stock purchased with the proceeds of
an Exempt Loan; and (3) Employer
contributions applied to the payment of
interest on an Exempt Loan if no more than
one-third of the Employer contributions for
the year are allocated to Highly Compensated
Participants.
(d) For purposes of applying the limitations
of Code Section 415, "415 Compensation" shall
include Participant's wages, salaries, fees
for professional service and other amounts
for personal services actually rendered in
the course of employment with an Employer
maintaining the Plan paid during the
"limitation year", but shall exclude (1)(A)
contributions made by the Employer to a plan
of deferred compensation to the extent that,
before the application of Code Section 415
limitations to the Plan, the contributions
are not includable in the gross income of the
Employee for the taxable year in which
contributed, (B) any distributions from a
plan of deferred compensation to the extent
such amounts are includable in the gross
income of the Employee; (2) amounts realized
from the exercise of a non-qualified stock
option or when restricted stock (or property)
held by an Employee either becomes freely
transferrable or is no longer subject to
substantial risk of Forfeiture; (3) amounts
realized from the sale, exchange or other
disposition of stock acquired under a
qualified stock option; and (4) other amounts
which receive special tax benefits, such as
premiums for group term life insurance (but
only to the extent that the premiums are not
includable in the gross income of the
Employee). For "limitation years" beginning
after December 31, 1988, "415 Compensation"
shall be limited in accordance with the
provisions of Section 1.10 hereof.
(e) For purposes of applying the limitations
of Code Section 415, the "limitation year"
shall be the calendar year.
(f) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above
shall be adjusted annually as provided in
Code Section 415(d) pursuant to the
Regulations. The adjusted limitation is
effective as of January 1st of each calendar
year and is applicable to "limitation years"
ending with or within that calendar year.
(g) For the purpose of this Section, all
qualified defined benefit plans (whether
terminated or not) ever maintained by the
Employer shall be treated as one defined
benefit plan, and all qualified defined
contribution plans (whether terminated or
not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(h) For the purpose of this Section, if the
Employer is a member of a controlled group of
corporations, trades or businesses under
common control (as defined by Code Section
1563(a) or Code Sections 414(b) and (c) as
modified by Code Section 415(h) or is a
member of an affiliated service group (as
defined by Code Section 414(m)), all
Employees of such Employers shall be
considered to be employed by a single
Employer.
(i) Subject to the exception in Section
4.4(m) below, if an Employee is (or has been)
a Participant in one or more defined benefit
plans and one or more defined contribution
plans maintained by the Employer, the sum of
the defined benefit plan fraction and the
defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(j) (1) The defined benefit plan fraction
for any "limitation year" is a
fraction (A) the numerator of which
is the "projected annual benefit"
of the Participant under the Plan
(determined as of the close of the
"limitation year"), and (B) the
denominator of which is the greater
of the product of 1.25 multiplied
by the "protected current accrued
benefit" or the lesser of: (i) the
product of 1.25 multiplied by the
maximum dollar limitation provided
under Code Section 415(b)(1)(A) for
such "limitation year", or (ii) the
product of 1.4 multiplied by the
amount which may be taken into
account under Code Section
415(b)(1)(B) for such "limitation
year".
(2) For purposes of applying the
limitations of Code Section 415,
the "projected annual benefit" for
any Participant is the benefit,
payable annually, under the terms
of the Plan determined pursuant to
Regulation 1.415-7(b)(3).
(k) The defined contribution plan fraction
for any "limitation year" is a fraction (A)
the numerator of which is the sum of the
"annual additions" to the Participant's
accounts as of the close of the "limitation
year", adjusted pursuant to Regulation 1.415-7(d)(1),
and (B) the denominator of which is
the sum of the lesser of the following
amounts determined for such year and each
prior year of service with the Employer:
(i) the product of 1.25 multiplied by the
dollar limitation in effect under Code
Section 415(c)(1)(A) for such "limitation
year" (determined without regard to Code
Section 415(c)(6)), or (ii) the product of
1.4 multiplied by the amount which may be
taken into account under Code Section
415(c)(1)(B) for such "limitation year".
(l) if the sum of the defined benefit plan
fraction and the defined contribution plan
fraction shall exceed 1.0 in any "limitation
year" for any Participant in this Plan for
reasons other than described in 3.4(m) below,
the Administrator shall limit, to the extent
necessary, the "annual additions" to such
Participant's accounts for such "limitation
year". If, after limiting the "annual
additions" to such Participant's Accounts for
the "limitation year", the sum of the defined
benefit plan fraction and the defined
contribution plan fraction still exceed 1.0,
the Administrator shall then, in conjunction
with the person or persons appointed to
administer the defined benefit plan,
effectuate an adjustment of the numerator of
the defined benefit plan fraction so that the
sum of both fractions shall not exceed 1.0 in
any "limitation year" for such Participant.
(m) If (1) the substitution of 1.00 for 1.25
and $41,500 for $51,875 above or (2) the
excess benefit accruals or "annual additions"
provided for in Internal Revenue Service
Notice 82-19 cause the 1.0 limitation to be
exceeded for any Participant in any
"limitation year", such Participant shall be
subject to the following restrictions for
each future "limitation year" until the 1.0
limitation is satisfied: (A) the
Participant's accrued benefit under the
defined benefit plan shall not increase, (B)
no "annual additions" may be credited to a
Participant's Accounts, and (C) no Employee
contributions (voluntary or mandatory) shall
be made under any defined benefit plan or any
defined contribution plan of the Employer.
(n) Notwithstanding anything contained in
this Section to the contrary, the
limitations, adjustments and other
requirements prescribed in this Section shall
at all times comply with the provisions of
Code Section 415 and the Regulations
thereunder, the terms of which are
specifically incorporated herein by
reference.
3.5 Adjustment for Excessive Additions
(a) If as a result of the allocation of
Forfeitures, a reasonable error in
estimating a Participant's Compensation, or
other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable,
the "annual additions" under this Plan would
cause the maximum "annual additions" to be
exceeded for any Participant, the
Administrator shall (1) hold any "excess
amount" in a "Section 415 suspense account",
(2) use the "Section 415 suspense account" in
the next "limitation year" (and succeeding
"limitation years" if necessary) to reduce
Employer contributions for that Participant
if that Participant is covered by the Plan as
of the end of the "limitation year", or if
the Participant is not so covered, allocate
and reallocate the "Section 415 suspense
account" in the next "limitation year" (and
succeeding "limitation years" if necessary)
to all Participants in the Plan before any
Employer contributions which would constitute
"annual additions" are made to the Plan for
such "limitation year", or (3) reduce
Employer contributions to the Plan for such
"limitation year" by the amount of the
"Section 415 suspense account" allocated and
reallocated during such "limitation year".
(b) For purposes of this Article, "excess
amount" for any Participant for a "limitation
year" shall mean the excess, if any, of (1)
the "annual additions" which would be
credited to his account under the terms of
the Plan without regard to the limitations of
Code Section 415 over (2) the maximum "annual
additions" determined pursuant to Section
3.4.
(c) For purposes of this Section, "Section
415 suspense account" shall mean an
unallocated account equal to the sum of
"excess amounts" for all Participants in the
Plan during the "limitation year". The
"Section 415 suspense account" shall not
share in any earnings or losses of the Trust
Fund.
(d) The Plan may not distribute "excess
amounts" to Participants or Former
Participants.
ARTICLE IV
INVESTMENT POLICY
4.1 Investment Policy
(a) The Plan is a stock bonus plan intended
to invest primarily in Company Stock.
(b) With due regard to subparagraph (a)
above, funds under the Plan may also be
invested in other property the ownership of
which under the Code and the Regulations is
permissible by the Trust.
4.2 Application of Cash
Employer contributions in cash and other cash
received by the Trust Fund shall first be
applied to pay any Current Obligations of the
Trust Fund.
4.3 Loans to the Trust
(a) The Plan may borrow money, provided, the
proceeds of an Exempt Loan are used within a
reasonable time after receipt only for any or
all of the following purposes:
(1) To acquire Company Stock.
(2) To repay such loan.
(3) To repay a prior Exempt Loan.
(b) All loans to the Trust which are made or
guaranteed by a disqualified person must
satisfy all requirements applicable to Exempt
Loans including but not limited to the
following:
(1) The loan must be at a reasonable
rate of interest;
(2) Any collateral pledged to the
creditor by the Plan shall consist only
of Company Stock purchased with the
borrowed funds;
(3) Under the terms of the loan, any
pledge of Company Stock shall provide
for the release of shares so pledged on
a pro-rata basis pursuant to Article
III;
(4) Under the terms of the loan, the
creditor shall have no recourse against
the Plan except with respect to such
collateral, earnings attributable to
such collateral, Employer contributions
(other than contributions of Company
Stock) that are made to meet Current
Obligations and earnings attributable to
such contributions;
(5) The loan must be for a specific
term and may not be payable at the
demand of any person except in the case
of default;
(6) In the event of default upon an
Exempt Loan, the value of the Trust Fund
transferred in satisfaction of the
Exempt Loan shall not exceed the amount
of default. If the lender is a
disqualified person, an Exempt Loan
shall provide for a transfer of Trust
Funds upon default only upon and to the
extent of the failure of the Plan to
meet the payment schedule of the Exempt
Loan;
(7) Exempt Loan payments during a Plan
Year must not exceed an amount equal to:
(A) the sum, over all Plan Years, of all
contributions made by the Employer to
the Plan with respect to such Exempt
Loan and earnings on such Employer
contributions, less (B) the sum of the
Exempt Loan payments in all preceding
Plan Years. A separate accounting shall
be maintained for such Employer
contributions and earnings until the
Exempt Loan is repaid.
(c) For purpose of this Section, the term
"disqualified person" shall have the meaning
ascribed to it in Section 4975(e) of the
Code.
ARTICLE V
VALUATIONS
5.1 Valuation of the Trust Fund
The Administrator shall direct the Trustee,
as of each June 30 and December 31, and at
such other date or dates deemed necessary by
the Administrator (herein called the
"Valuation Date"), to determine the net worth
of the assets comprising the Trust Fund as it
exists on the Valuation Date prior to taking
into consideration any contribution to be
allocated for that Plan Year. In determining
such net worth, the Trustee shall value the
assets comprising the Trust Fund at their
fair market value as of the Valuation Date
and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
5.2 Method of Valuation
In determining the fair market value of
shares of Company Stock held in the Trust
Fund, the Administrator shall direct the
Trustee to value the same at the prices they
were last traded on such exchange as of the
close of business on the Valuation Date.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 Determination of Benefits Upon Retirement
Upon the Normal Retirement Date of a
Participant, all amounts credited to such
Participant's Account (and not theretofore
distributed pursuant to the election provided
under the terms of Section 6.11 hereof) shall
become distributable in accordance with the
terms of Sections 6.5 and 6.6 hereof.
However, a Participant may postpone the
termination of his employment with the
Employer to a later date, in which event the
participation of such Participant in the Plan
shall continue until his Late Retirement
Date, and thereupon, all amounts credited to
such Participant's Account (and not
theretofore distributed pursuant to the
election provided under the terms of
Section 6.11 hereof) shall become
distributable in accordance with the terms of
Sections 6.5 and 6.6 hereof.
6.2 Determination of Benefits Upon Death
(a) Upon the death of a Participant before
his Retirement Date or other termination of
employment, all amounts credited to such
Participant's Account shall become fully
Vested. On or before the last day of the
Plan Year coinciding with or next following
such death, the Administrator shall direct
the Trustee, in accordance with the
provisions of Sections 6.5 and 6.6, to
distribute the value of the deceased
Participant's Account to the Participant's
Beneficiary.
(b) On or before the last day of the Plan
Year coinciding with or next following the
death of a Former Participant, the Trustee,
in accordance with the provisions of Sections
6.5 and 6.6, shall distribute any remaining
amounts credited to the account of such
deceased Former Participant to such Former
Participant's Beneficiary.
(c) The Administrator may require such
proper proof of death and such evidence of
the right of any person to receive payment of
the value of the account of a deceased
Participant or Former Participant as the
Administrator may deem desirable. The
Administrator's determination of death and of
the right of any person to receive payment
shall be conclusive.
(d) The Beneficiary of the death benefit
payable pursuant to this Section shall be the
Participant's spouse, except, however, the
Participant may designate a Beneficiary other
than his spouse if:
(1) the spouse has waived her right to
be the Participant's Beneficiary,
or
(2) the Participant has no spouse, or
(3) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form
satisfactory to the Administrator. A
Participant may at any time revoke his
designation of a Beneficiary or change his
Beneficiary by filing written notice of such
revocation or change with the Administrator.
However, the Participant's spouse must again
consent in writing to any such change or
revocation. In the event no valid
designation of Beneficiary exists at the time
of the Participant's death, the death benefit
shall be payable to his estate.
(e) Any consent by the Participant's spouse
to waive any rights to the death benefit must
be in writing, must acknowledge the effect of
such waiver, and be witnessed by a Plan
representative or a notary public. Further,
the spouse's consent must be irrevocable and
must acknowledge the specific nonspouse
Beneficiary.
6.3 Disability Retirement Benefits
No disability benefits, other than those
payable upon termination of employment, are
provided in this Plan.
6.4 Determination of Benefits Upon Termination
(a) On or before the last day of the Plan
Year coinciding with or subsequent to the
termination of a Participant's employment for
any reason other than death or retirement,
the Administrator shall direct the Trustee to
segregate such Terminated Participant's
Account, if the amount therein is Vested,
which amount shall remain in a separate
account for the Terminated Participant until
such time as a distribution is made to the
Terminated Participant. If the Terminated
Participant's Account is not Vested, the
amount therein shall be allocated to the
accounts of the remaining Participants in
accordance with the terms of the Plan as a
Forfeiture as of the next succeeding
Valuation Date.
Subject to the provisions of Section 6.5(d)
hereof, unless the Terminated Participant
otherwise elects in writing a later
distribution date, distribution of a
Terminated Participant's Account shall
commence as soon as practicable following the
termination of his employment (provided that
a Terminated Participant's Vested benefit
derived from Employer contributions may not
be paid without his written consent if the
value exceeds $3,500).
(b) Subject to Appendix 6.4(b), the
determination as to whether a Participant's
Account is Vested shall be made on the basis
of the Participant's number of years of
Credited Service according to the following
schedule:
Vesting Schedule
Years of
Credited Service Percentage
0-4 0%
5 100%
(c) The computation of a Participant's
nonforfeitable percentage of his interest in
the Plan shall not be reduced as the result
of any direct or indirect amendment to this
Article. In the event that the Plan is
amended to change or modify the Vesting
Schedule of Section 6.4(b) hereof, a
Participant with at least three (3) years of
Credited Service as of the expiration date of
the election period may elect to have his
nonforfeitable percentage computed under the
Plan without regard to such amendment. If a
Participant fails to make such election, then
such Participant shall be subject to the new
vesting schedule, if more favorable to him
than the Vesting Schedule provided under
Section 6.4(b) hereof. The Participant's
election period shall commence on the
adoption date of the amendment and shall end
60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the
amendment, or
(3) the date the Participant receives
written notice of the amendment from
the Employer or Administrator.
(d) If any Former Participant is reemployed
after a one year Period of Severance has
occurred, his Credited Service shall include
Service prior to his one year Period of
Severance subject to the following rules:
(1) Such Service shall be recognized
for vesting purposes only after he has
been employed for six Months of Service
following the date of his Reemployment
Commencement Date; and
(2) Nonvested Former Participants shall
lose credits otherwise allowable under
(1) above if their consecutive one year
Periods of Severance equal or exceed the
greater of five (5) or the aggregate
number of their pre-severance Service.
6.5 Distribution of Benefits
(a) The Administrator, pursuant to the
election of the Participant (or if no
election has been made prior to the
Participant's death, by his Beneficiary), in
his sole discretion, shall direct the Trustee
to distribute to a Participant or his
Beneficiary all amounts to which he is
entitled under the Plan in one lump-sum
payment.
(b) Notwithstanding anything herein to the
contrary, cash dividends on shares of Company
Stock allocable to Participants' Accounts may
be paid to Participants or their
Beneficiaries, as determined in the sole
discretion of the Administrator, within 90
days after the close of the Plan Year in
which the dividend is paid.
(c) Except as limited by Sections 6.5 and
6.6, whenever the Trustee is to make a
distribution on or before an Anniversary
Date, the distribution may be made on such
date or as soon thereafter as is practicable,
but in no event later than 180 days after the
Anniversary Date. Except, however, unless a
Former Participant elects in writing to defer
the receipt of benefits (such election may
not result in a death benefit that is more
than incidental), the payment of benefits
shall begin no later than one (1) year after
the close of the Plan Year:
(1) in which occurs the date on which
the Participant separates from Service
by reason of death, disability or
attainment of his Normal Retirement
Rate, or,
(2) which is the fifth Plan Year
following the Plan Year in which the
Participant otherwise separates from
Service with the Employer (except that
this clause (2) shall not apply if the
Participant is reemployed by the
Employer before such year).
For purposes of this Section 6.5(c), a
Participant's benefits shall not include any
portion of his Company Stock Account acquired
with the proceeds of an Exempt Loan until the
close of the Plan Year in which such loan is
repaid in full.
(d) Notwithstanding any provision in the
Plan to the contrary, a Participant's
benefits shall be distributed to him not
later than April 1 of the calendar year
following the calendar year in which the
Participant attains age 70-1/2.
6.6 How Plan Benefits Will be Distributed
(a) Distribution of a Participant's benefit
will be made entirely in whole shares or
other units of Company Stock. Any balance in
a Participant's Other Investments Account
will be applied to acquire for distribution
the maximum number of whole shares or other
units of Company Stock at the then fair
market value. Any fractional unit value
unexpended will be distributed in cash.
(b) The Trustee will make distribution from
the Trust only on instructions from the
Administrator.
(c) Except as otherwise provided in this
Article, a Participant is not entitled to any
payment, withdrawal or distribution under the
Plan during his participation.
6.7 Distributions For Minor Beneficiaries
In the event a distribution is to be made to
a minor, then the Administrator may in the
Administrator's sole discretion, direct that
such distribution be paid to the legal
guardian, or if none, to a parent of such
Beneficiary or a responsible adult with whom
the Beneficiary maintains his residence, or
to the custodian for such Beneficiary under
the Uniform Gift to Minors Act or Gift to
Minors Act, if such is permitted by the laws
of the state in which said Beneficiary
resides. Such a payment to the legal
guardian, custodian or parent of a minor
Beneficiary shall fully discharge the
Trustee, Employer, and Plan from further
liability on account thereof.
6.8 Location of Participant or Beneficiary
Unknown
In the event that all, or any portion, of the
distribution payable to a Participant or his
Beneficiary hereunder shall at the expiration
of five (5) years after it shall become
payable, remain unpaid solely by reason of
the inability of the Administrator, after
sending a registered letter, return receipt
requested, to the last known address, and
after further diligent effort, to ascertain
the whereabouts of such Participant or his
Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to
the Plan; provided, however, that any such
forfeited amount shall be reinstated as a
payable benefit in the event a claim therefor
is subsequently made by the Participant or
his Beneficiary.
6.9 Limitations on Benefits and Distributions
All rights and benefits, including elections,
provided to a Participant in this Plan shall
be subject to the rights afforded to any
"alternate payee" under a "qualified domestic
relations order." Furthermore, a
distribution to an "alternate payee" shall be
permitted if such distribution is authorized
by a "qualified domestic relations order,"
even if the affected Participant has not
separated from service or has not reached the
"earliest retirement age" under the Plan.
For purposes of this Section, "alternate
payee," "qualified domestic relations order"
and "earliest retirement age" shall have the
respective meanings set forth in Code Section
414(p).
6.10 Direct Rollovers
(a) Notwithstanding any provision of the
Plan to the contrary that would otherwise
limit a distributee's election under this
Section, a distributee may elect, at the time
and in the manner prescribed by the
Administrator, to have any portion of an
eligible rollover distribution paid directly
to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) This Section 6.10 shall be effective
with respect to distributions made on or
after January 1, 1993.
(c) For purposes of this Section the
following definitions shall apply:
(1) An eligible rollover distribution
is any distribution of all or any
portion of the balance to the credit of
the distributee, except that an eligible
rollover distribution does not include:
any distribution that is one of a series
of substantially equal periodic payments
(not less frequently than annually) made
for the life (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 includable in gross income
(determined without regard to the
exclusion for net unrealized
appreciation with respect to employer
securities).
(2) An eligible retirement plan is an
individual retirement account described
in Section 408(a) of the Code, 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.
(3) A 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
a qualified domestic relations order, as
defined in Code Section 414(p), are
distributees with regard to the interest
of the spouse or former spouse.
(4) A direct rollover is a payment by
the Plan to the eligible retirement plan
specified by the distributee.
(d) If, after receiving a notice pursuant to
Section 402(f) of the Code ("Section 402(f)
Notice"), a Participant elects to make or not
make a direct rollover, a distribution may be
made less than 30 days after the
Section 402(f) Notice is given, provided
that:
(1) the Administrator clearly informs
the Participant that the Participant has
a right to a period of at least 30 days
after receiving the Section 402(f)
Notice to consider the decision of
whether or not to elect a distribution,
and
(2) the Participant, after receiving
the Section 402(f) Notice, affirmatively
elects a distribution.
6.11 Directed Investment Account
(a) Each "Qualified Participant" may elect
within 180 days after the close of each Plan
Year during the "Qualified Election Period"
to direct the Trustee in writing to
distribute to him at least 25 percent of the
Participant's Company Stock Account (to the
extent such portion exceeds the amount to
which a prior election under this Section
6.11 applies). In the case of the election
year in which the Participant can make his
last election, the preceding sentence shall
be applied by substituting "50 percent" for
"25 percent".
(b) For the purposes of this Section the
following definitions shall apply:
(1) "Qualified Participant" means any
Participant or Former Participant who
has completed ten (10) Plan Years of
Service as a Participant and has
attained age 55.
(2) "Qualified Election Period" means
the six (6) Plan Year period beginning
with the Plan Year after the Plan Year
in which the Participant attains age 55
or if later, beginning with the Plan
Year after the first Plan Year in which
the Participant first became a
"Qualified Participant").
ARTICLE VII
AMENDMENT, TERMINATION, AND MERGERS
7.1 Amendments
The Employer shall have the right at any time
to amend the Plan by written instrument duly
adopted by the Board. However, no such
amendment shall authorize or permit any part
of the Trust Fund (other than such part as is
required to pay taxes and administration
expenses) to be used for or diverted to
purposes other than for the exclusive benefit
of the Participants or their Beneficiaries or
estates; no such amendment shall cause any
reduction in the amount credited to the
account of any Participant or cause or permit
any portion of the Trust Fund to revert to or
become the property of the Employer; and no
such amendment which affects the rights,
duties or responsibilities of the Trustee and
Administrator may be made without the
Trustee's and Administrator's written
consent. Any such amendment shall become
effective as provided therein upon its
execution. The Trustee shall not be required
to execute any such amendment unless the
Trust provisions contained herein are a part
of the Plan and the amendment affects the
duties of the Trustee hereunder.
In addition, no such amendment shall have the
effect of terminating the protections and
rights set forth in Section 6.4(c), unless
such termination shall then be permitted
under the applicable provisions of the Code
and Regulations.
7.2 Termination
The Employer shall have the right at any time
to terminate the Plan by delivering to the
Trustee and Administrator written notice of
such termination. Upon any termination (full
or partial) or a complete discontinuance of
contributions, all amounts theretofore
credited to the affected Participants'
Accounts shall become 100% Vested and shall
not thereafter be subject to forfeiture.
Subject to the limitations of Section 3.4
hereof, all amounts outstanding in the
Unallocated Company Stock Suspense Account at
such time not used in repayment of any Exempt
Loan then outstanding shall be allocated in
accordance with the provisions of Section 3.3
and this Section 7.2. Upon such termination
of the Plan, the Employer, by written notice
to the Trustee and Administrator, may direct
either:
(a) complete distribution of the assets
in the Participants' Accounts to the
Participants in a manner consistent with
the requirements of Article VI,
(b) continuation of the Trust created
by this agreement and the distribution
of benefits at such time and in such
manner as though the Plan had not been
terminated, or
(c) conversion of the Plan to another
form of qualified defined contribution
plan.
7.3 Merger or Consolidation
This Plan and Trust may be merged or
consolidated with, or its assets and/or
liabilities may be transferred to any other
Plan and Trust only if the benefits which
would be received by a Participant of this
Plan, in the event of a termination of the
Plan immediately after such transfer, merger
or consolidation, are at least equal to the
benefits the Participant would have received
if the Plan had terminated immediately before
the transfer, merger or consolidation.
ARTICLE VIII
ADMINISTRATION
8.1 Powers and Responsibilities of the Employer
(a) The Employer shall be empowered to
appoint and remove the Trustee and the
Administrator from time to time as it deems
necessary for the proper administration of
the Plan to assure that the Plan is being
operated for the exclusive benefit of the
Participants and their Beneficiaries in
accordance with the terms of the Plan, the
Code and the Act.
(b) The Employer shall furnish the Trustee
with all necessary cooperation to effectuate
the exercise of the voting rights of the
Trustee and the Participants under the terms
of the Trust and to insure the confidential-
ity of votes cast by the Participants with
respect to company stock notices and
information statements when voting rights
must be exercised.
8.2 Assignment and Designation of Administrative
Authority
The Employer shall appoint one or more
Administrators. Any person, including, but
not limited to, one or more Employees of the
Employer, shall be eligible to serve as an
Administrator. Any person so appointed shall
signify his acceptance by filing a written
acceptance with the Employer. An
Administrator may resign by delivering his
written resignation to the Employer or be
removed by the Employer by delivery of
written notice of removal, to take effect at
a date specified therein, or upon delivery to
the Administrator if no date is specified.
The Employer, upon the resignation or removal
of an Administrator, shall promptly designate
in writing a successor to this position. If
the Employer does not appoint an
Administrator, the Employer will function as
the Administrator.
8.3 Allocation and Delegation of Responsibilities
If more than one person is appointed as
Administrator, the responsibilities of each
Administrator may be specified by the
Employer and accepted in writing by each
Administrator. In the event that no such
delegation is made by the Employer, the
Administrators may allocate the
responsibilities among themselves, in which
event the Administrators shall notify the
Employer and the Trustee in writing of such
action and specify the responsibilities of
each Administrator. The Trustee thereafter
shall accept and rely upon any documents
executed by the appropriate Administrator
until such time as the Employer or the
Administrators file with the Trustee a
written revocation of such designation.
8.4 Powers and Duties of the Administrator
The primary responsibility of the
Administrator is to administer the Plan for
the exclusive benefit of the Participants and
their Beneficiaries, subject to the specific
terms of the Plan. The Administrator shall
administer the Plan in accordance with its
terms and shall have the power to determine
any questions arising in connection with the
administration, interpretation, and
application of the Plan. Any such
determination by the Administrator shall be
conclusive and binding upon all persons. The
Administrator may establish procedures,
correct any defect, supply any information,
or reconcile any inconsistency in such manner
and to such extent as shall be deemed
necessary or advisable to carry out the
purpose of the Plan; provided, however, that
any procedure, discretionary act,
interpretation or construction shall be done
in a nondiscriminatory manner based upon
uniform principles consistently applied and
shall be consistent with the intent that the
Plan shall continue to be deemed a qualified
plan under the terms of Code Section 401(a),
and shall comply with the terms of the Act
and all regulations issued pursuant thereto.
The Administrator shall have all powers
necessary or appropriate to accomplish his
duties under this Plan.
The Administrator shall be charged with the
duties of the general administration of the
Plan, including, but not limited to, the
following:
(a) to determine all questions relating to
the eligibility of Employees to participate
or remain a Participant hereunder;
(b) to compute, certify, and direct the
Trustee with respect to the amount and the
kind of benefits to which any Participant
shall be entitled hereunder;
(c) to authorize and direct the Trustee with
respect to all non-discretionary or otherwise
directed disbursements from the Trust;
(d) to maintain all necessary records for
the administration of the Plan;
(e) to interpret the provisions of the Plan
and to make and publish such rules for
regulation of the Plan as are consistent with
the terms hereof; and
(f) to assist any Participant regarding his
rights, benefits, or elections available
under the Plan.
8.5 Records and Reports
The Administrator shall keep a record of all
actions taken and shall keep all other books
of account, records, and other data that may
be necessary for proper administration of the
Plan and shall be responsible for supplying
all information and reports to the Internal
Revenue Service, Department of Labor,
Participants, Beneficiaries and others as
required by law.
8.6 Appointment of Advisors
The Administrator may appoint counsel,
advisers, and other persons as the
Administrator deems necessary or desirable in
connection with the administration of this
Plan.
8.7 Information from Employer
To enable the Administrator to perform his
functions, the Employer shall supply full and
timely information to the Administrator on
all matters relating to the Compensation of
all Participants, their Hours of Service,
their Years of Service, their retirement,
death, disability, or termination of
employment, and such other pertinent facts as
the Administrator may require; and the
Administrator shall advise the Trustee of
such of the foregoing facts as may be
pertinent to the Trustee's duties under the
Plan. The Administrator may rely upon such
information as is supplied by the Employer
and shall have no duty or responsibility to
verify such information.
8.8 Payment of Expenses
All expenses of administration may be paid
out of the Trust Fund unless paid by the
Employer. Such expenses shall include any
expenses incident to the functioning of the
Administrator, including, but not limited to,
fees of accountants, counsel, and other
specialists and their agents, and other costs
of administering the Plan. Until paid, the
expenses shall constitute a liability of the
Trust Fund. However, the Employer may
reimburse the Trust Fund for any
administration expense incurred. Any
administration expense paid to the Trust Fund
as a reimbursement shall not be considered an
Employer contribution under Article IV
hereof.
8.9 Majority Actions
Except where there has been an allocation and
delegation of administrative authority
pursuant to Section 8.3, if there shall be
more than one Administrator, they shall act
by a majority of their number, but may
authorize one or more of them to sign all
papers on their behalf.
8.10 Claims Procedure
Claims for benefits under the Plan may be
filed with the Administrator on forms
supplied by the Employer. Written notice of
the disposition of a claim shall be furnished
to the claimant within 90 days after the
application is filed. In the event the claim
is denied, the reasons for the denial shall
be specifically set forth in the notice in
language calculated to be understood by the
claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an
explanation as to how the claimant can
perfect the claim will be provided. In
addition, the claimant shall be furnished
with an explanation of the Plan's claims
review procedure.
8.11 Claims Review Procedure
Any Employee, former Employee, or Beneficiary
of either, who has been denied a benefit by a
decision of the Administrator pursuant to
Section 8.10 shall be entitled to request the
Administrator to give further consideration
to his claim by filing with the Administrator
(on a form which may be obtained from the
Administrator) a request for a hearing. Such
request, together with a written statement of
the reasons why the claimant believes his
claim should be allowed, shall be filed with
the Administrator no later than 60 days after
receipt of the written notification provided
for in Section 8.10. The Administrator shall
then conduct a hearing within the next 60
days, at which the claimant may be
represented by an attorney or any other
representative of his choosing and at which
the claimant shall have an opportunity to
submit written and oral evidence and
arguments in support of his claim. At the
hearing (or prior thereto upon 5 business
days' written notice to the Administrator)
the claimant or his representative shall have
an opportunity to review all documents in the
possession of the Administrator which are
pertinent to the claim at issue and its
disallowance. Either the claimant or the
Administrator may cause a court reporter to
attend the hearing and record the
proceedings. In such event, a complete
written transcript of the proceedings shall
be furnished to both parties by the court
reporter. The full expense of any such court
reporter and such transcripts shall be borne
by the party causing the court reporter to
attend the hearing. A final decision as to
the allowance of the claim shall be made by
the Administrator within 60 days of receipt
of the appeal (unless there has been an
extension of said 60 days' limitation due to
special circumstances, provided the delay and
the special circumstances occasioning it are
communicated to the claimant within the 60
day period). Such communication shall be
written in a manner calculated to be
understood by the claimant and shall include
specific reasons for the decision and
specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE IX
MISCELLANEOUS
9.1 Participant's Rights
This Plan shall not be deemed to constitute a
contract between the Employer and any
Participant or to be a consideration or an
inducement for the employment of any
Participant or Employee. Nothing contained
in this Plan shall be deemed to give any
Participant or Employee the right to be
retained in the service of the Employer or to
interfere with the right of the Employer to
discharge any Participant or Employee at any
time regardless of the effect which such
discharge shall have upon him as a
Participant of this Plan.
9.2 Alienation
(a) Subject to the exceptions provided
below, no benefit which shall be payable out
of the Trust Fund to any person (including a
Participant or his Beneficiary) shall be
subject in any manner to anticipation,
alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge
the same shall be void; and no such benefit
shall in any manner be liable for, or subject
to, the debts, contracts, liabilities,
engagements, or torts of any such person, nor
shall it be subject to attachment or legal
process for or against such person, and the
same shall not be recognized by the Trustee,
except to such extent as may be required by
law.
(b) This provision shall not apply to a
"qualified domestic relations order" defined
in Code Section 414(p), and those other
domestic relations orders permitted to be so
treated by the Administrator under the
provisions of the Retirement Equity Act of
1984. The Administrator shall establish a
written procedure to determine the qualified
status of domestic relations orders and to
administer distributions under such qualified
orders. Further, to the extent provided
under a "qualified domestic relations order",
a former spouse of a Participant shall be
treated as the spouse or surviving spouse for
all purposes under the Plan.
9.3 Construction of Plan
This Plan and Trust shall be construed and
enforced according to the Act and the laws of
the State of New York, other than its laws
respecting choice of law, to the extent not
preempted by the Act.
9.4 Gender and Number
Wherever any words are used herein in the
masculine, feminine or neuter gender, they
shall be construed as though they were also
used in another gender in all cases where
they would so apply, and whenever any words
are used herein in the singular or plural
form, they shall be construed as though they
were also used in the other form in all cases
where they would so apply.
9.5 Legal Action
In the event any claim, suit, or proceeding
is brought regarding the Trust and/or Plan
established hereunder to which the Trustee or
the Administrator may be a party, and such
claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they
shall be entitled to be reimbursed from the
Trust Fund for any and all costs, attorneys'
fees, and other expenses pertaining thereto
incurred by them for which they shall have
become liable.
9.6 Prohibition Against Diversion of Funds
(a) Except as provided below and otherwise
specifically permitted by law, it shall be
impossible by operation of the Plan or of the
Trust, by termination of either, by power of
revocation or amendment, by the happening of
any contingency, by collateral arrangement or
by any other means, for any part of the
corpus or income of any trust fund maintained
pursuant to the Plan or any funds contributed
thereto to be used for, or diverted to,
purposes other than the exclusive benefit of
Participants, Retired Participants, or their
Beneficiaries.
(b) In the event the Employer shall make a
contribution under a mistake of fact pursuant
to Section 403(c)(2)(A) of the Act, the
Employer may demand repayment of such
excessive contribution at any time within one
(1) year following the time of payment and
the Trustee shall return such amount to the
Employer within the one (1) year period.
Earnings of the Plan attributable to the
excess contributions may not be returned to
the Employer but any losses attributable
thereto must reduce the amount so returned.
9.7 Bonding
Every Fiduciary, except a bank or an
insurance company, unless exempted by the Act
and regulations thereunder, shall be bonded
in an amount not less than 10% of the amount
of the funds such Fiduciary handles;
provided, however, that the minimum bond
shall be $1,000 and the maximum bond,
$500,000. The amount of funds handled shall
be determined at the beginning of each Plan
Year by the amount of funds handled by such
person, group, or class to be covered and
their predecessors, if any, during the
preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of
the funds to be handled during the then
current year. The bond shall provide
protection to the Plan against any loss by
reason of acts of fraud or dishonesty by the
Fiduciary alone or in connivance with others.
The surety shall be a corporate surety
company (as such term is used in Section
412(a)(2) of the Act), and the bond shall be
in a form approved by the Secretary of Labor.
Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an
expense of and may, at the election of the
Administrator, be paid from the Trust Fund or
by the Employer.
9.8 Receipt and Release for Payments
Any payment to any Participant, his legal
representative, Beneficiary, or to any
guardian or committee appointed for such
Participant or Beneficiary in accordance with
the provisions of the Plan, shall, to the
extent thereof, be in full satisfaction of
all claims hereunder against the Trustee and
the Employer, either of whom may require such
Participant, legal representative,
Beneficiary, guardian or committee, as a
condition precedent to such payment, to
execute a receipt and release thereof in such
form as shall be determined by the Trustee or
Employer.
9.9 Action by the Employer
Whenever the Employer under the terms of the
Plan is permitted or required to do or
perform any act or matter or thing, it shall
be done and performed by a person duly
authorized by its legally constituted
authority.
9.10 Named Fiduciaries and Allocation of
Responsibility
The "named Fiduciaries" of this Plan are (1)
the Employer, (2) the Administrator and (3)
the Trustee. The named Fiduciaries shall
have only those specific powers, duties,
responsibilities, and obligations as are
specifically given them under the Plan. In
general, the Employer shall have the sole
responsibility for making the contributions
provided for under Section 4.1; and shall
have the sole authority to appoint and remove
the Trustee and the Administrator; and to
amend or terminate, in whole or in part, the
Plan. The Administrator shall have the sole
responsibility for the administration of the
Plan, which responsibility is specifically
described in the Plan. The Trustee shall
have the sole responsibility for holding the
assets under the Trust. Each named Fiduciary
warrants that any directions given, informat-
ion furnished, or action taken by it shall be
in accordance with the provisions of the
Plan, authorizing or providing for such
direction, information or action. Further-
more, each named Fiduciary may rely upon any
such direction, information or action of
another named Fiduciary as being proper under
the Plan, and is not required under the Plan
to inquire into the propriety of any such
direction, information or action. It is
intended under the Plan that each named
Fiduciary shall be responsible for the proper
exercise of its own powers, duties,
responsibilities and obligations under the
Plan. No named Fiduciary shall guarantee the
Trust Fund in any manner against investment
loss or depreciation in asset value. Any
person or group may serve in more than one
Fiduciary capacity.
9.11 Headings
The headings and subheadings of this Plan
have been inserted for convenience of
reference and are to be ignored in any
construction of the provisions hereof.
9.12 Notices and Deliveries
All notices hereunder shall be in writing.
Any notices, payments or deliveries to the
Employer shall be directed to the Human
Resources Department of the Employer at the
following address:
Chock Full O'Nuts Corporation
370 Lexington Avenue
New York, New York 10017
Any notices, payments or deliveries to the
Trustee shall be directed to the Trustee
Chock Full O'Nuts Corporation Employee Stock
Ownership Plan at the above address.
Any notices, payments or deliveries (other
than to the Employer or Trustee) shall be
directed to the addressee at the address
designated by said addressee by notice to the
Employer and the Trustee, or at such other
address set forth herein. The Employer or
the Trustee may designate a new address for
the purpose of this Plan by notice to the
other and to all Participants, Former
Participants and Beneficiaries. Unless
otherwise specified herein, notices shall be
sent by registered or certified mail.
9.13 Uniformity
All provisions of this Plan shall be
interpreted and applied in a uniform,
nondiscriminatory manner.
9.14 Indemnification
Neither the Employer, any of its officers or
directors, nor the Administrator shall be
personally liable for any action or inaction
with respect to any duty or responsibility
imposed upon such person by the terms of the
Plan, unless such action or inaction is
judicially determined to be a breach of that
person's fiduciary responsibility with
respect to the Plan under any applicable law.
The Employer shall indemnify or purchase
insurance to underwrite indemnity for the
Administrator and/or the Employer's board of
directors against any personal liability or
expense except for his own gross negligence.
9.15 Voting Passthroughs, Tender Offers; Rights
(a) On all proposals on which the holders of
shares of Company Stock are entitled to vote,
each Participant shall have the right to
direct the Trustee as to the manner in which
to vote the Company Stock allocated to his
Company Stock Account under the Plan.
(b) In the case of a tender for any Company
Stock, each Participant shall have the right
to direct the Trustee whether to accept or
reject such tender in connection with all or
any part of the Company Stock allocated to
his Company Stock Account under the Plan.
(c) With respect to any conversion or
subscription or other right appurtenant to
Company Stock, each Participant shall have
the right to direct the Trustee whether or
not to exercise such right in connection with
all or any part of the Company Stock
allocated to his Company Stock Account under
the Plan.
(d) The Employer shall neither interfere
with nor in any way attempt to influence any
direction conveyed by a Participant to the
Trustee pursuant to the preceding subsections
(a), (b) or (c) of this Section 9.15, which
direction shall be kept confidential at all
times from the Employer by the Trustee.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 Adoption by Other Employers
Notwithstanding anything herein to the
contrary, with the consent of the Employer
and Trustee, any other corporation or entity,
whether an affiliate or subsidiary or not,
may adopt this Plan and all of the provisions
hereof, and participate herein and be known
as a Participating Employer, by a properly
executed document evidencing said intent and
will of such Participating Employer.
10.2 Requirements of Participating Employers
(a) The Transfer of any Participant from or
to an Employer participating in this Plan,
whether he be an Employee of the Employer or
a Participating Employer, shall not affect
such Participant's rights under the Plan, and
all amounts credited to such Participant's
Account as well as his accumulated service
time with the transferor or predecessor, and
his length of participation in the Plan,
shall continue to his credit.
(b) Any expenses of the Trust which are to
be paid by the Employer or borne by the Trust
Fund shall be paid by each Participating
Employer in the same proportion that the
total amount standing to the credit of all
Participants employed by such Employer bears
to the total standing to the credit of all
Participants.
10.3 Designation of Agent
Each Participating Employer shall be deemed
to be a part of this Plan; provided, however,
that with respect to all of its relations
with the Trustee and Administrator for the
purpose of this Plan, each Participating
Employer shall be deemed to have irrevocably
designated the Employer as its agent. Unless
the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed
to include each Participating Employer as
related to its adoption of the Plan.
10.4 Employee Transfers
It is anticipated that an Employee may be
transferred between Participating Employers,
and in the event of any such transfer, the
Participating Employer to which the Employee
is transferred shall thereupon become
obligated hereunder with respect to such
Employee in the same manner as was the
Participating Employer from whom the Employee
was transferred.
10.5 Participating Employer's Contribution
All contributions made by a Participating
Employer, as provided for in this Plan, shall
be determined separately by each
Participating Employer, and shall be paid to
and held by the Trustee for the exclusive
benefit of the Employees of such
Participating Employer and the Beneficiaries
of such Employees, subject to all the terms
and conditions of this Plan.
10.6 Discontinuance of Participation
Any Participating Employer shall be permitted
to discontinue or revoke its participation in
the Plan. At the time of any such
discontinuance or revocation, satisfactory
evidence thereof and of any applicable
conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter
transfer, deliver and assign Trust Fund
assets allocable to the Participants of such
Participating Employer to such new Trustee as
shall have been designated by such
Participating Employer, in the event that it
has established a separate pension plan for
its Employees. If no successor is
designated, the Trustee shall retain such
assets for the Employees of said
Participating Employer pursuant to the
provisions of Article VII hereof. In no such
event shall any part of the corpus or income
of the Trust as it relates to such
Participating Employer be used for or
diverted for purposes other than for the
exclusive benefit of the Employees of such
Participating Employer.
10.7 Administrator's Authority
The Administrator shall have authority to
make any and all necessary rules or
regulations, binding upon all Participating
Employers and all Participants, to effectuate
the purpose of this Article.
IN WITNESS WHEREOF, this Plan has been
executed by a duly authorized officer of the Company as
of this ________ day of August, 1994.
CHOCK FULL O'NUTS CORP.
By:___________________________
Howard M. Leitner
President
SECRETARY'S CERTIFICATE
I, Howard M. Leitner, Secretary of the June
27, 1994 meeting of the Board of Directors of Chock
Full O'Nuts Corporation hereby certify that the
foregoing document comprises the Chock Full O'Nuts
Corporation Employee Stock Ownership Plan, as amended
and restated, adopted pursuant to resolution duly
adopted by the Board of Directors of said Corporation,
and that said Plan is currently in full force and
effect.
Dated:___________________ _____________________________
Howard M. Leitner
Secretary of the
Meeting
CHOCK FULL O'NUTS CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
APPENDIX 1.11
Any employees of the Cain's Coffee Co. who
became employees of the Employer pursuant to
the Stock Purchase Agreement dated as of
October 16, 1992 between the Employer and
Nestle' Beverage Company shall have all
service rendered to Cain's Coffee Co. prior
to such acquisition recognized for
eligibility for benefit commencement and
vesting purposes hereunder.
No service with Cain's Coffee Co. shall be
recognized for purposes of eligibility to
participate or allocations of Company Stock.
Accordingly, such employees shall not be
eligible to participate before January 1,
1994.
Appendix 3.4(g)
TOP HEAVY REQUIREMENTS
1.1 In General
The terms of this Appendix 3.4(g) shall take effect
with respect to the Chock Full o'Nuts Corporation
Employee Stock Ownership Plan (the "Plan") in any Plan
Year (as defined in the Plan) in which the Plan is Top
Heavy or Super Top Heavy (as defined herein).
Hereafter, any term that is defined in the Plan shall
have in this Appendix 3.4(g) the same meaning ascribed
to it in the Plan, unless the context clearly indicates
a different meaning.
1.2 Definitions
(a) "Key Employee" means an Employee as
defined in Code Section 416(i) and the Regulations
thereunder. Generally, an Employee or former
Employee (as well as each of his Beneficiaries) is
considered a Key Employee if he, at any time
during the Plan Year or any of the preceding four
(4) Plan Years, has been included in one of the
following categories:
1. an officer of the Employer (as that term is
deemed within the meaning of the Regulations
under Code Section 416) having annual "415
Compensation" greater than 150 percent of the
amount in effect under Code Section
415(c)(1)(A) for any such Plan Year.
2. one of the 10 employees having annual "415
Compensation" from the Employer for a Plan
Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for
the calendar year in which such Plan Year
ends and owning (or considered as owning
within the meaning of Code Section 318) both
more than one-half percent interest and one
of the ten largest interests in the Employer.
3. a "five percent owner" of the Employer.
"Five percent owner" means any person who
owns (or is considered as owning within the
meaning of Code Section 318) more than five
percent (5 %) of the outstanding stock of the
Employer or stock possessing more than five
(5 %) percent of the total of all stock of
the Employer, or, in the case of an
unincorporated business, any person who owns
more than five percent (5%) of the capital or
profits interests in the Employer. In
determining percentage ownership hereunder,
employers that would otherwise be aggregated
under Code Sections 414(b), (c), and (m)
shall be treated as separate employers.
4. a "one percent owner" of the Employer having
an annual "415 Compensation" from the
Employer of more than $150,000. "One percent
owner" means any person who owns (or is
considered as owning within the meaning of
Code Section 318) more than one percent (1%)
of the outstanding stock of the Employer or
stock possessing more than one (1%) percent
of the total combined voting power of all
stock of the Employer, or, in the case of an
unincorporated business, any person who owns
more than one percent (1%) of the capital or
profits interests in the Employer. In
determining percentage ownership hereunder,
employers that would otherwise be aggregated
under Code Sections 414(b), (c), and (m)
shall be treated as separate employers.
However, in determining whether an individual
has "415 Compensation" of more than $150,000,
"415 Compensation" from each employer
required to be aggregated under Code Sections
414(b), (c), and (m) shall be taken into
account.
5. "Non-Key Employee" means any Employee or
former Employee (and his Beneficiaries) who
is not a Key Employee.
6. "Super Top Heavy Plan" means a plan described
in Section 1.4(b) of this Appendix 3.4(g).
7. "Top Heavy Plan" means a plan described in
Section 1.4(a) of this Appendix 3.4(g).
8. "Top Heavy Plan Year" means that, for a
particular Plan Year, the Plan is a Top Heavy
Plan.
1.3 Plan Requirements
For any Top Heavy Plan Year, the Plan shall provide
special minimum allocation requirements in accordance
with Code Section 416(c) pursuant to the terms hereof.
1.4 Determination of Top Heavy Status
(a) This Plan shall be a Top Heavy Plan for
any Plan Year in which, as of the Determination
Date (as defined herein), (1) the Present Value of
Accrued Benefits (as defined herein) of Key
Employees and (2) the sum of the Aggregate
Accounts (as defined herein) of Key Employees
under this Plan and all plans of an Aggregation
Group (as defined herein), exceeds sixty percent
(60%) of the Present Value of Accrued Benefits and
the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an
Aggregation Group.
If any Participant is a Non-Key Employee for
any Plan Year, but such Participant was a Key
Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit
and/or Aggregate Account balance shall not be
taken into account for purposes of determining
whether this Plan is a Top Heavy or Super Top
Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In
addition, if a Participant or Former Participant
has not performed any services for any Employer
maintaining the Plan at any time during the five-year
period ending on the Determination Date, any
accrued benefit for such Participant or Former
Participant shall not be taken into account for
the purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy
Plan for any Plan Year in which, as of the
Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under
this Plan and all plans of an Aggregation Group,
exceeds ninety percent (90%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under this Plan and
all plans of an Aggregation Group.
(c) "Aggregate Account": A Participant's
Aggregate Account as of the Determination Date is
the sum of:
(1) his Participant's Account balance as of
the most recent valuation occurring
within a twelve (12) month period ending
on the Determination Date;
(2) an adjustment for any contributions due
as of the Determination Date. Such
adjustment shall be the amount of any
contributions actually made after the
valuation date but on or before the
Determination Date, except for the first
Plan Year when such adjustment shall
also reflect the amount of any
contributions made after the
Determination Date that are allocated as
of a date in that first Plan Year;
(3) any Plan distributions made within the
Plan Year that includes the
Determination Date or within the four
(4) preceding Plan Years. However, in
the case of distributions made after the
valuation date and prior to the
Determination Date, such distributions
are not included as distributions for
top heavy purposes to the extent that
such distributions are already included
in the Participant's Aggregate Account
balance as of the valuation date.
Notwithstanding anything herein to the
contrary, all distributions, including
distributions made prior to January 1,
1984, and distributions under a
terminated plan which if it had not been
terminated would have been required to
be included in an Aggregation Group,
will be counted. Further, distributions
from the Plan (including the cash value
of life insurance policies) of a
Participant's account balance because of
death shall be treated as a distribution
for the purposes of this paragraph;
(4) any Employee contributions, whether
voluntary or mandatory. However,
amounts attributable to tax deductible
qualified deductible employee
contributions shall not be considered to
be a part of the Participant's Aggregate
Account balance;
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are
both initiated by the Employee and made
from a plan maintained by one employer
to a plan maintained by another
employer), if this Plan provides the
rollovers or plan-to-plan transfers, it
shall always consider such rollovers or
plan-to-plan transfers as a distribution
for the purpose of this Section.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not
initiated by the Employee or made to a
plan maintained by the same employer),
if this Plan provides the rollover or
plan-to-plan transfer, it shall not be
counted as a distribution for purposes
of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan
transfer, it shall consider such
rollover or plan-to-plan transfer as
part of the Participant's Aggregate
Account balance, irrespective of the
date on which such rollover or plan-to-plan
transfer is accepted.
(7) For the purposes of determining whether
two employers are to be treated as the
same employer in (5) and (6) above, all
employers aggregated under Code Section
414(b), (c) or (m) are treated as the
same employer.
(d) "Aggregation Group" means either a
Required Aggregation Group or a Permissive
Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In
determining a Required Aggregation Group
hereunder, each plan of the Employer in
which a Key Employee is a participant in
the Plan Year containing the
Determination Date or any of the four
preceding Plan Years, and each other
plan of the Employer which enables any
plan in which a Key Employee
participates to meet the requirements of
Code Sections 401(a)(4) or 410, will be
required to be aggregated. Such group
shall be known as a Required Aggregation
Group.
In the case of a Required Aggregation
Group, each plan in the group will be
considered a Top Heavy Plan if the
Required Aggregation Group is a Top
Heavy Group. No plan in the Required
Aggregation Group will be considered a
Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy
Group.
(2) Permissive Aggregation Group: The
Employer may also include any other plan
not required to be included in the
Required Aggregation Group, provided the
resulting group, taken as a whole, would
continue to satisfy the provisions of
Code Sections 401(a)(4) and 410. Such
group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation
Group, only a plan that is part of the
Required Aggregation Group will be
considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top
Heavy Group. No plan in the Permissive
Aggregation Group will be considered a
Top Heavy Plan if the permissive
Aggregation Group is not a Top Heavy
Group.
(3) Only those plans of the Employer in
which the Determination Dates fall
within the same calendar year shall be
aggregated in order to determine whether
such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it
was maintained within the last five (5)
years ending on the Determination Date.
(e) "Determination Date" means (a) the last
day of the preceding Plan Year, or (b) in the case
of the first Plan Year, the last day of such Plan
Year.
(f) Present Value of Accrued Benefit: In
the case of a defined benefit plan, the Present
Value of Accrued Benefit for a Participant other
than a Key Employee, shall be as determined using
the single accrual method used for all plans of
the Employer and Affiliated Employers, or if no
such single method exists, using a method which
results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code
Section 411(b)(1)(C).
(g) "Top Heavy Group" means an Aggregation
Group in which, as of the Determination Date, the
sum of:
(1) the Present Value of Accrued Benefits of
Key Employees under all defined benefit
plans included in the group, and
(2) the Aggregate Accounts of Key Employees
under all defined contribution plans
included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
1.5 Minimum Allocations Required For Top Heavy Plan
Years
(a) Notwithstanding the provisions of
Section 3.4 of the Plan, for any Top Heavy Plan
Year, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Account
of each Non-Key Employee shall be equal to at
least three percent (3 %) of such Non-Key
Employee's "415 Compensation". However, if (i)
the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Account
of each Key Employee for such Top Heavy Plan Year
is less than three percent (3 %) of each Key
Employee's "415 Compensation" and (ii) this Plan
is not required to be included in an Aggregation
Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410, the
sum of the Employer's contributions and
Forfeitures allocated to the Participant's Account
of each Non-Key Employee shall be equal to the
largest percentage allocated to the Participant's
Account of any Key Employee.
(b) For any Plan Year when (1) the Plan is a
Top Heavy Plan but not a Super Top Heavy Plan and
(2) a Key Employee is a Participant in both this
Plan and a defined benefit plan included in a
Required Aggregation Group which is top heavy, the
extra minimum allocation shall be provided for
each Non-Key Employee who is a Participant only in
this Plan by substituting four percent (4%) for
three percent (3%) in the Section above.
(c) For purposes of the minimum allocations
set forth above, the percentage allocated to the
Participant's Account of any Key Employee shall be
equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf
of such Key Employee divided by the "415
Compensation" for such Key Employee.
(d) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to
the Participant's Account of all Non-Key Employees
who are Participants and who are employed by the
Employer on the last day of the Plan Year.
(e) In lieu of the above, in any Plan Year
in which a Non-Key Employee is a Participant in
both this Plan and a defined benefit pension plan
included in a Required Aggregation Group which is
top heavy, the Employee shall not be required to
provide such Non-Key Employee with both the full
separate defined benefit plan minimum benefit and
the full separate defined contribution plan
minimum allocation. Therefore, for any Plan Year
when the Plan is a Top Heavy Plan, Non-Key
Employees who are participating in this Plan and a
defined benefit plan maintained by the Employer
shall receive a minimum monthly accrued benefit in
the defined benefit plan equal to the product of
(1) one-twelfth (1/12th) of "415 Compensation"
averaged over five (5) consecutive "limitation
years" (or actual "limitation years" if less)
which produce the highest average and (i) two per-
cent (2%) multiplied by years of Credited Service
when the Plan is top heavy, or (ii) twenty percent
(20%).
1.6 Limitation Year
Notwithstanding the foregoing, for any "limitation
year" in which the Plan is a Top Heavy Plan, 1.0 shall
be substituted for 1.25 in Sections 4.40(j)(1) and
4.4(k) of the Plan unless the extra minimum allocation
is being provided pursuant to Section 1.5(b) of this
Appendix 3.4(g). However, for any "limitation year" in
which the Plan is a Super Top Heavy Plan, 1.0 shall be
substituted for 1.25 in any event.
1.7 Vesting
Notwithstanding the provisions of Section 7.4(b) of the
Plan, for any Top Heavy Plan Year, the determination as
to whether a Participant's Account is Vested shall be
made on the basis of the Participant's number of years
of Credited Service according to the following
schedule:
Vesting Schedule
Years of Credited Service Percentage
2 20
3 40
4 60
5 80
6 or more 100
Appendix 7.4(b)
Notwithstanding the provisions of
Section 7(b) of the Plan, all Employees of Hillside
Coffee of California, Inc. who were Participants in the
Plan as of the date on which ownership of the stock of
Hillside Coffee of California, Inc. was acquired by
Gourmet Coffees of America, Inc., shall be fully vested
in their Participant's Accounts under the Plan.