LA-Z-BOY CHAIR COMPANY
MATCHED RETIREMENT SAVINGS PLAN
ARTICLE I
PURPOSE
On October 2, 1989, La-Z-Boy Chair Company adopted this La-Z-Boy Chair
Company Matched Retirement Savings Plan (the "Plan") for certain eligible
employees, effective January 1, 1990. Effective January 1, 1992, all salaried
employees of La-Z-Boy, all employees of La-Z-Boy Lincolnton, of Hammary
Furniture Company and of Kincaid Furniture Company and certain employees of
La-Z-Boy Grand Rapids became Employees under the Plan. Effective January 1,
1993, certain other employees of La-Z-Boy Grand Rapids also became Employees
under the Plan. The Plan has been amended from time to time, and in order to
incorporate both those changes as well as other changes, some of which are
occasioned by changes in applicable law, has been restated into a single plan
document.
The Plan is a cash or deferred profit-sharing plan. Employees become
Participants upon meeting the Plan's eligibility requirements. A Participant
may elect to make before-tax salary reduction contributions ("Deferrals") to
his or her fully Vested Deferred Income Account rather than receive such
amounts in cash. Such Participants also receive shares of Employer
contributions which are allocated to their individual Accounts. Participants
are not, however, allowed to make personal after-tax contributions to the
Plan.
The Plan's assets are held in trust and invested pursuant to a separate
Trust Agreement. Accounts are credited regularly with the Plan's investment
gains or losses. Accounts are distributed when a Participant retires or dies
and, to the extent Vested, when a Participant is discharged or resigns.
Withdrawals from Deferred Income Accounts are permitted for Participants who
suffer financial hardships. Loans are also available to Participants.
The Plan is intended to qualify under applicable provisions of the
Internal Revenue Code and similar provisions of state law.
ARTICLE II
DEFINITIONS
The following terms, when capitalized, shall have the meaning specified
below unless the context clearly indicates to the contrary:
2.1 "Account" shall mean each separate account maintained for a
Participant under the Plan, collectively or singly as the context requires.
Accounts shall be credited with contributions, credited or debited with
investment gains or losses, charged for distributions and commingled for
investment purposes, as provided elsewhere in the Plan. The Plan
Administrator may create special types of Accounts for administrative reasons,
even though the Accounts are not expressly authorized by the Plan.
2.2 "Active Participant" shall mean a Participant who is employed in a
position covered by the Plan (see Article III) at the time in question and is,
e.g., eligible to make Deferrals.
2.3 "Beneficiary" shall mean a person or entity entitled under
Article IX to receive a Participant's Account upon his or her death. The
surviving spouse of a Participant shall be his or her Beneficiary unless the
Participant designates another person or entity as Beneficiary and the spouse
consents to the designation.
2.4 "Board of Directors" shall mean the Board of Directors of La-Z-Boy
Chair Company.
2.5 "Break in Service" shall mean a period of non-Employment which
causes a former Employee to lose credits under this Plan. A former Employee
incurs a Break in Service if (1) he or she does not have more than five
hundred hours of Service in a Plan Year beginning after he or she first became
an Employee and (2) he or she is not an Employee on the last day of the Plan
Year. See Section 12.6 for special rules relating to maternity and paternity
absences.
2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
2.7 "Compensation" shall mean, as elected by the Plan Administrator
for a Plan Year, any definition of Compensation satisfying Reg.
Section 1.414(s)- 1(b), for example, the total cash compensation paid to the
Employee during the period in question for services rendered to the Employer
as an Employee while an Active Participant. Compensation shall include the
earnings waived by an Employee pursuant to a salary reduction arrangement
under any cash or deferred plan or cafeteria plan which is maintained by the
Employer and which is qualified under Code Section 401(k) or 125 (but such
waived earnings shall not be taken into account in determining an Employee's
maximum permissible amount under Section 5.5(d)(2)(b)(ii) or the maximum
amount of contributions deductible by the Employer for any of its taxable
years). The annual Compensation of any Employee taken into account under the
Plan for any Plan Year beginning before 1994 shall not exceed $200,000 and for
any Plan Year beginning after 1993 shall not exceed $150,000, as adjusted in
accordance with Section 415(d) of the Code, and determined in accordance with
Code Section 414(q)(6). To the extent permitted by applicable law, for
purposes of testing for nondiscrimination under Code Sections 401(k) and (m),
the Compensation taken into account shall be limited to the Compensation
received by the Employee only during the period while the Employee is a
Participant.
"Creditable Compensation", for purposes of the Participant's Deferral
election in Section 4.1, shall mean all W-2 wages other than severance pay,
moving expenses, tuition or medical reimbursement, Christmas and other gifts,
restricted shares of stock, excess group-term life insurance, suggestion
awards, short-term or extended disability and "hospital audit" payments, but
further increased by any amount contributed by the Employer pursuant to a
salary reduction agreement and which is not includible in the gross income of
such individual under Sections 125, 402(a)(8) or 403(b) of the Code.
Creditable Compensation for any Plan Year beginning before 1994 shall also be
limited to the adjusted equivalent of $200,000 and to $150,000 after 1993.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the Compensation and Creditable
Compensation of each Employee taken into account under the Plan shall not
exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for increases
in the cost-of-living in accordance with Section 401(a)(17)(B) of the Code.
The cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation and Creditable
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA
'93 annual compensation limit will be multiplied by a fraction, the numerator
of which is the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall mean
the OBRA '93 annual compensation limit set forth in this provision.
If Compensation or Creditable Compensation for any prior determination
period is taken into account in determining an Employee's benefits accruing in
the current Plan Year, the Compensation or Creditable Compensation for that
prior determination period is subject to the OBRA '93 annual compensation
limit in effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual compensation limit
is $150,000.
2.8 "Deferral" shall mean an amount contributed to this Plan by the
Employer in lieu of being paid to a Participant as salary or wages. Deferrals
shall be made under salary reduction arrangements between each Participant and
the Employer. Article IV contains the provisions under which Deferrals may be
made. Deferrals constitute Employer contributions, not Employee
contributions. A Participant's Deferrals shall be credited to his or her
Deferred Income Account, which shall be fully Vested at all times.
2.9 "Deferred Income Account" shall mean the account of a Participant
to which his or her Deferrals and the gains and losses thereon are credited.
A Participant's Deferred Income Account shall be fully Vested at all times.
2.10 "Early Retirement Date" shall mean the later of the Participant's
55th birthday or the tenth anniversary of the commencement of his or her
participation in the Plan, as determined under Reg. Section 1.411(a)-7(b).
2.11 "Employee" shall mean an individual who renders services to an
Employer as a common law employee or officer (i.e. person whose wages from the
Employer are subject to federal income tax withholding). A person rendering
services to an Employer purportedly as an independent contractor shall not be
treated as an Employee before the Employer has acknowledged that it must
withhold federal income taxes from his or her pay. Leased employees within
the meaning of Section 414(n)(2) of the Code shall be included as Employees
for purposes of the pension requirements of Section 414(n)(3) of the Code but
shall not participate in, or accrue benefits under, the Plan; provided,
however, that if such leased employees constitute less than twenty percent of
the Company's nonhighly compensated work force within the meaning of Section
414(n)(1)(C)(ii) of the Code, the term Employee shall not include any leased
employee covered by a plan described in Section 414(n)(5) of the Code.
2.12 "Employer" shall mean:
(a) Adopting Employers: La-Z-Boy Chair Company, any other
company which adopts the Plan, any successor entity which continues the Plan
or such companies collectively; and
(b) Non-Adopting Employers: Companies that have not adopted the
Plan but which are related to the adopting Employers by ownership, as
determined under Section 12.5.
(c) To the extent an adopting Employer has not extended Plan
participation to designated job classifications or locations (e.g., a specific
plant), it shall be treated as a non-adopting Employer.
(d) All Employees of adopting and non-adopting Employers shall
be treated as employed by a single company for all Plan purposes, including
Service crediting, except that:
(i) no person shall become a Participant except
while employed by an adopting Employer or as specifically permitted
in Section 3.2,
(ii) a Participant shall cease to be an Active
Participant if he or she transfers to a non-adopting Employer and
ceases to be employed by an adopting Employer, and
(iii) amounts paid by non-adopting Employers shall be
ignored in determining compensation for contribution purposes
under this Plan (but such amounts shall be taken into account
under Article V for purposes of determining the maximum annual
addition to a Participant's Account).
(e) In contexts in which actions are required or permitted to be
taken or notice is to be given, the Employer shall mean La-Z-Boy Chair Company
or any successor company.
2.13 "Employment" shall mean the period during which an individual is
an Employee. Employment shall commence on the day the individual first
performs services for the Employer as an Employee and shall terminate on the
day such services cease, as determined under Section 12.6. See Section 12.6
for special rules relating to maternity and paternity absences.
2.14 "ERISA" shall mean the Employee Retirement Income Security Act of
1974 as amended from time to time.
2.15 "Normal Retirement Age", means the later of his or her 65th
birthday or the fifth anniversary of the commencement of his or her
participation in the Plan, as determined under Reg. 1.411(a)-7(b).
2.16 "Normal Retirement Date," in respect of any Participant, means the
date on which the Participant attains his or her Normal Retirement Age.
2.17 "Participant" shall mean any person who is included in the Plan
pursuant to Article III. A person shall cease to be an Active Participant
when he or she ceases to be an Employee, as determined under Section 12.6.
2.18 "Plan" shall mean this document, the Trust Agreement and, wherever
and whenever appropriate, Plan Rules.
2.19 "Plan Administrator" shall mean the La-Z-Boy Chair Company Central
Board of Administration. The Plan Administrator is the Plan's "named
fiduciary" within the meaning of Section 402(a)(2) of ERISA.
2.20 "Plan Rules" shall mean rules adopted by the Plan Administrator
for the administration, interpretation or application of the Plan. See
Exhibit A for more details on Plan Rules.
2.21 "Plan Year" shall mean the fiscal year of the Plan, which shall be
the twelve month period beginning on January 1 and ending on December 31,
i.e., a calendar year. The Plan Year is the Plan's limitation year for
purposes of Code Section 415. The Plan Year may be changed by Plan amendment,
but the new Plan Year must begin on a date within the Plan Year in which the
change is implemented and the limitations of Code Section 415 must be met
during both the short old Plan Year and the new Plan Year (see Section 5.5).
2.22 "Retirement" shall mean a Participant's termination of Employment
on or after the Participant's Early Retirement Date or Normal Retirement Date,
or after the Plan Administrator has determined (in accordance with
Section 7.2) that the Participant has suffered a disability. The Plan, in
addition to being a cash or deferred profit-sharing plan, is intended to be an
accident and health benefits plan under Section 105 of the Code and benefits
payable under the Plan on account of disability are intended to be excludable
from income under Code Section 105(c).
2.23 "Service" shall mean an Employee's period of Employment. Service
is used to determine whether an Employee is eligible for the Plan and whether
his or her Employer Contribution Account is fully Vested. The Service
requirement for participation is set forth in Article III and the Service
requirement for vesting is set forth in Article VII. Special rules for
calculating Service are found in Section 12.6, which deals with maternity and
paternity absences, and Section 12.7, which explains how hours of Service are
calculated. Service shall be calculated under the following rules:
(a) An Employee shall have one year of Service for eligibility
purposes if he or she completes one thousand hours of Service in the twelve
consecutive month period ("Year One") commencing on the day he or she first
performs an hour of Service for the Employer, in which case he or she will be
deemed to have commenced employment on the first day of the month in which
employment actually commenced; the Plan Year which includes the first
anniversary of said date shall be the next computation period ("Year Two")
without regard to whether said individual completed one thousand hours of
Service during Year One; and each Plan Year thereafter shall be another such
computation period; provided that an employee who is credited with one
thousand hours of Service in both Year One and Year Two shall be credited with
two years of Service for purposes of eligibility.
(b) For eligibility purposes only, an Employee shall not be
credited with a year of Service until the end of the twelve consecutive month
period in which the hours of Service requirement is met.
(c) For vesting purposes, the rules set forth above shall apply
except an Employee shall be credited with a year of Service when he or she,
after attaining age 18, completes at least one thousand hours of Service in a
Plan Year. Participants who were Employees prior to January 1, 1990 shall be
credited with the years of vesting service earned as of December 31, 1989
under other qualified retirement plans sponsored by the Company.
(d) Service with a company before its acquisition by the
Employer or an affiliate shall be recognized to the extent provided in a
schedule to this Plan or in relevant acquisition agreements or corporate
resolutions. Unless such schedule, agreements or resolutions specifically
provide for recognition of service in accordance with specified seniority
crediting rules of the predecessor employer, the amount of Service recognized
based on employment with the predecessor shall be determined in accordance
with the rules of this Section.
(e) If this Plan is successor to another plan (i.e., a plan
which was merged into this Plan), all service recognized under the prior plan
shall be recognized under this Plan.
(f) Service by an Employee with any employer during any period
while such employer is required to be aggregated with his or her Employer
under Code Sections 414(b), (c), (m) or (o) shall be recognized under this
Plan.
2.24 "Trust" or "Trust Fund" shall mean the fund established under one
or more Trust Agreements pursuant to the Plan.
2.25 "Trust Agreement" shall mean an agreement between a Trustee and
the Employer entered into for the purpose of investing and administering the
Trust Fund. Each Trust Agreement constitutes part of this Plan.
2.26 "Trustee" shall mean the trustee under a Trust Agreement.
2.27 "Vested" shall mean nonforfeitable. A Participant's Account shall
be Vested upon the attainment of his or her Normal Retirement Age.
2.28 "Vesting Service" of an Employee shall mean his or her years of
Service calculated in accordance with Sections 2.23(c) and 7.5.
ARTICLE III
EMPLOYEE PARTICIPATION
3.1 Requirements for Participation
(a) A person shall become a Participant on the earliest of
January 1, 1990, May 1, 1990, November 1, 1990 or, for Plan Years beginning
after 1990, the first day of the first or seventh month of the Plan Year on
which the person meets all of the following requirements:
(i) the person is an Employee of an Adopting Employer;
(ii) the person has one year of Service, as modified,
effective July 1, 1995, by Section 3.1(e);
(iii) the person is a resident or citizen of the United
States of America;
(iv) the person is not employed in a bargaining unit
covered by a collective bargaining agreement unless it provides for Plan
coverage of bargaining unit members; and
(v) the person has attained age twenty-one.
No one shall become a Participant prior to January 1, 1990.
(b) An individual shall cease to be a Participant when his or
her Employment terminates (see Section 12.6).
(c) Former Employees who are rehired shall become Participants
in accordance with the following special rules:
(i) Eligibility Rule for Rehired Eligible Employee or
Participant: A rehired Employee who terminated Employment after meeting
all of the requirements of subsection (a) or after becoming a Participant
shallbe eligible to participate in the Plan at the beginning of the payroll
period coincident with or next following his or her first day of work after
rehire in a position covered by the Plan provided that no deferral election
shall apply to compensation received prior to the date of such election.
(ii) Eligibility Rule for Rehired Non-Eligible Employee:
An Employee who terminates Employment before meeting the requirements of
subsection (a) and who again becomes an Employee shall retain his or her
prior Service and shall be eligible to become a Participant upon meeting
the requirements of subsection (a). The Employee's years of Service shall
continue to be calculated with reference to successive twelve-month periods
commencing on the date the Employee was first entitled to be credited with
an hour of Service following his or her original date of Employment (unless
a shift to the Plan Year occurred under Section 2.23).
(d) A Participant shall be an Active Participant (e.g., eligible
to make Deferrals) only while employed in a position covered by the Plan under
subsections 3.1(a)(i), (a)(iii) and (a)(iv). If an Active Participant
transfers to any position with the Employer which is not covered by the Plan,
e.g., under Section 12.6(g), he or she shall cease to be an Active
Participant. The individual will again become an Active Participant when he
or she returns to a position covered by the Plan.
(e) Effective July 1, 1995, a person who has completed at least
1,000 hours of Service during the six (6) month period commencing on his first
day of employment will be deemed to have satisfied the Service requirement of
Section 3.1(a)(ii) for eligibility to participate in the Plan as of the end of
that six month period. A person who fails to complete 1,000 hours of Service
during that initial six month period shall not be precluded from completing
the Service requirement for eligibility during the otherwise applicable twelve
month periods described in Section 2.23(a).
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Deferral Election
(a) Subject to limitations established by this Article, in
Plan Rules or by applicable law, each Participant shall be allowed to
defer one percent or more (in whole percents) of his or her compensation
by electing to have his or her Employer contribute an amount equaling
the Deferral to his or her Deferred Income Account instead of paying the
Deferral to the Participant in cash. Plan Rules may specify a minimum
dollar amount which can be deferred per pay period.
Plan Rules may provide special procedures for making Deferral
elections in the event special non-periodic payments such as bonuses are
to be awarded to a group of Participants.
The maximum amount a Participant may defer is equal to the lesser
of
(i)(a) For Participants who are also participants in the
La-Z-Boy Chair Company Profit Sharing Plan, seven percent of the
Participant's reditable Compensation (as defined in Section 2.7)
for the portion of the Plan Year during which he or she is a
Participant,or
(b) For Participants who are not participantsin the
La-Z-Boy Chair Company Profit Sharing Plan, fifteen
percent of the Participant's Creditable Compensation
(as defined in Section 2.7) for the portion of the Plan
Year during which he or she is a Participant; or
(ii) The adjusted equivalent of $7,000 for the
Participant's taxable year.
Deferrals made by a Participant which exceed the percentage limits
specified in (i) above shall be refunded, along with allocable income, in the
same manner as excess Deferrals under Section 4.2.
(b) Deferrals shall also be subject to the limitations in
Section 4.2, which sets forth the statutory anti-discrimination test contained
in Code Section 401(k); in Section 5.1(c) (regarding the $7,000 limit); in
Section 5.5, which limits annual additions attributable to Deferrals; and in
Section 5.8 (regarding multiple use of the alternative limitations). All
Deferrals shall be paid by the Employer to the Trustee as soon as feasible and
no later thanthe close of the calendar month following the month for which
the Deferrals were made, and shall constitute Employer contributions to the
Plan. Contributions made for a Plan Year after the end of the Plan Year shall
also be made in accordance with Section 5.2.
(c) The procedures for making and changing Deferral elections
shall be established by Plan Rules. In particular, such Rules may provide
that a Participant who ceases to make Deferrals may not be allowed to resume
making Deferrals for a period of time stated in such Rules.
(d) The Plan Administrator shall monitor all elections by
eligible Participants under Section 4.1 and all Deferrals being made
periodically to the Trust and may require adjustments in any such election
prior to or during the Plan Year for which the election is made and/or may
reduce future Deferrals for the Participants on behalf of whom they are being
made in order to assure compliance with such limitations.
4.2 Special Deferral Limits
(a) In the case of any Active Participant who in any Plan Year
is considered a "highly compensated" Active Participant under Section 4.7, his
or her Deferrals under Section 4.1(a) shall be subject to the restrictions of
subsection (b). In ranking Active Participants to determine who is considered
highly compensated (if such ranking is necessary), persons with the same
Compensation for the Plan Year may be ranked by the Plan Administrator in any
consecutive order. Participants who had no Compensation during the Plan Year
shall not be taken into account under this Section except as required by law.
(b) The Actual Deferral Percentage of highly compensated Active
Participants for a Plan Year shall not exceed the Actual Deferral Percentage
of all other Active Participants for that Plan Year by more than the
applicable amount set forth in the following table:
If the non-highly The Actual Deferral
compensated Active Percentage of the Highly
Participants have an Actual compensated Active Participants
Deferral Percentage of may not Exceed
- ---------------------------- --------------------------------
0% 0%
More than 0% but less than 2% 2.0 times the lower
compensated group's Actual
Deferral Percentage
2% to 8% The lower compensated group's
Actual Deferral Percentage
plus two percentage points
More than 8% 1.25 times the lower
compensated group's Actual
Deferral Percentage
The "Actual Deferral Percentage" during a Plan Year for a group of Active
Participants shall be the percentage determined by averaging (to the nearest
one-hundredth of one percent)the Deferral rates of each member of the group
(calculated separately and to the nearest one-hundredth of one percent).
An Active Participant's Deferral rate shall be determined by dividing
(i) the sum of
(A) the Participant's Deferrals under Section 4.1,
if any, for the Plan Year;
(B) the Participant's share of any fail-safe
contribution made pursuant to Section 4.3 for the Plan Year;
and
(C) at the election of the Plan Administrator, the
amount of Employer contributions to this Plan and any other
qualified defined contribution plan which were allocated to
the Participant for the Plan Year, if all such allocations
were fully Vested for all persons in such plan at the time
they were allocated and cannot be withdrawn by them before
separation from service except in the event of hardship, or
after age 59-1/2, by
(ii) his or her Compensation, as determined under
Section 2.7, for the Plan Year, or if permitted by applicable
regulations, for the portion of the Plan Year in which the
Participant was making Deferrals under a salary reduction
arrangement.
For purposes of determining the Deferral Rate of a Participant who is
highly compensated, the Deferrals and Compensation of such Participant shall
include the Deferrals and Compensation of family members, and such family
members shall be disregarded in determining the Deferral Rate for Participants
who are not highly compensated employees.
(c) If, notwithstanding the Plan Administrator's efforts to
monitor Deferrals to the Accounts of Participants as required by Section
4.1(d), the Actual Deferral Percentage for highly compensated
Participants for a Plan Year would exceed the maximum deferral rate
permissible under subsection (b), to the extent permitted under Section
401(k)(8) of the Code and Regulations thereunder, all Deferrals
initially allocated to the accounts of highly compensated Participants
which exceed the special limitations described in subsection (b) above
may within 2-1/2 months following the end of the Plan Year for which
such contributions were made be returned to such Participants, adjusted
for any income or loss allocable to such excess. If such excess
Deferrals (adjusted for income or loss as provided in (e) below) are not
returned to such Participants within such 2-1/2 month period, then the
same shall be returned to such Participants prior to the close of the
Plan Year which encompasses such 2-1/2 month period.
(d) The amount of excess Deferrals for highly compensated Active
Participants is to be computed on an individual basis pursuant to the
following method:
The actual deferral ratio for the highly compensated Participant
with the highest actual deferral ratio shall be reduced to the extent
required to either
(i) enable the arrangement to satisfy the test specified
In Section 4.2(b), or
(ii) cause such person's actual deferral ratio to equal the
actual deferral ratio of the highly compensated Participant with the
next highest actual deferral ratio.
Such reduction is to be iterated until the test specified in
Section 4.2(b) is satisfied. In case there are two or more highly
compensated Participants with the same actual deferral ratio, the
deferral ratio of such persons shall be reduced equally and
simultaneously.
For each highly compensated Participant, the amount of excess
Deferrals is equal to his Deferrals prior to the application of this
subsection (d) minus the amount determined by multiplying his actual deferral
ratio, as determined after application of this subsection (d), by his
Compensation used in determining such ratio. In no case shall the excess
Deferrals with respect to any individual exceed the actual Deferrals on behalf
of such individual.
(e) Income or loss allocable to an excess amount referred to in
(c), above, under applicable Treasury Regulations, shall be determined
by multiplying the income or loss allocable to the Participant's
Deferrals for the Plan Year by a fraction, the numerator of which is
said excess amount contributed on behalf of the Participant for the
preceding Plan Year and the denominator of which is the balance of his
Deferred Income Account on the last day of the preceding Plan Year,
reduced by the gain allocable or increased by the loss allocable to such
total amount for the preceding Plan Year. Solely for the 1990 Plan
Year, the income or loss computed above shall be further adjusted by an
amount equal to 10% of the income or loss computed above multiplied by
the number of months between the end of the preceding Plan Year and the
date such excess Deferrals are distributed.
(f) No Participant may make Deferrals to the extent it would
cause the Plan to violate the limitations in Section 5.5 (relating to
Code Sections 402(g) and 415) as to that Participant.
(g) If the Employer has one or more other cash or deferred plans
in addition to this Plan,
(i) the Deferral limitations of this Section shall be
applied to this Plan by aggregating it with any such other plan
with which this Plan is aggregated for purposes of establishing
that either plan covers a non-discriminatory group of Employees,
or
(ii) even when aggregation of plans under paragraph (i) is
not required, the Deferrals and Compensation of any highly
compensated person who is a participant in more than one cash or
deferred plan of the Employer shall be aggregated for Deferral
limit testing purposes under this Section.
4.3 Fail-Safe Contributions
In the event that the rate of Deferrals made by highly compensated
active Participants would be excessive, the Employer in its discretion may
make a fully Vested "fail-safe" contribution for all other Active Participants
to be allocated among their Deferred Income Accounts in proportion to their
Compensation for the Plan Year, except as follows:
(a) The Plan Administrator may elect by written notice to
allocate the fail-safe contribution only among specific Participants
designated by the Plan Administrator in the manner it specifies so long
as no such Participant is a member of the "prohibited group" under Code
Section 401(a)(4).
(b) The maximum amount allocated under this Section to any
Participant shall be limited so as to preclude the Participant's
Deferral percentage, as defined in Section 4.2(b), from exceeding the
Deferral limits contained in Section 4.1(b).
(c) The Employer may also make contributions to the extent required
under Sections 7.3 or 12.9.
4.4 Hardship Distributions
Subject to the application of uniform rules adopted by the Plan
Administrator, consistently applied, and subject to the requirements of this
Section 4.4, the Plan Administrator will upon the written request of a
Participant -
(a) Direct the Trustee to distribute funds from the Participant's
Account under the Plan to such Participant in a lump sum on account of
financial hardship if the Plan Administrator determines that the
distribution is on account of the immediate and heavy financial need
of the Participant and is necessary to satisfy such financial need, in
that (i) such distribution, net of taxes thereon, shall not exceed the
amount required to meet the immediate need created by the hardship,
and (ii) such distribution shall not be made to the extent that other
resources of the Participant are reasonably available. In determining
whether the distribution is necessary in light of the Participant's
financial need, the Plan Administrator may reasonably rely upon the
Participant's written representation that the need cannot be relieved --
(i) through reimbursement or compensation by
insurance or otherwise;
(ii) by reasonable liquidation of the Participant's
` assets, to the extent such liquidation would not itself cause
an immediate and heavy financial need;
(iii) by cessation of Deferrals under the Plan; or
(iv) by other distributions or nontaxable loans from
plans maintained by the Employer, by a Related Company or by any
other employer of the Participant, or by borrowing from
commercial sources on reasonable commercial terms.
For purposes of this determination, the Participant's resources shall be
deemed to include those assets of his spouse and minor children that are
reasonably available to the Participant. The determination by the Plan
Administrator of the existence of the hardship and the amount required to
be distributed to meet the need created by the hardship shall be made in
accordance with objective, uniform and non-discriminatory rules adopted
by the Plan Administrator consistent with Section 401(k)(2)(b) of the Code
and Regulations thereunder. Hardship distributions may be made only from
that portion of a Participant's Deferred Income Account which consists of
Deferrals not previously distributed (but not from income on such Deferrals)
and may not exceed 80% of such previously undistributed Deferrals, or from a
fully Vested rollover or transferred account.
(b) The Plan Administrator may by Plan Rule prohibit Participants who
receive hardship distributions from continuing to make Deferrals under Section
4.1 for a stated period of time.
(c) A hardship withdrawal shall be made from the Participant's
Accounts in the investment funds (as listed in Section 6.7) in proportion to
his/her current balances in the funds. Consequently, hardship withdrawals may
not be available at times other than when the investment funds will permit
such liquidation of accounts.
(d) Notwithstanding that a requirement of spousal consent generally
does not apply to this Plan, no such distribution from a rollover account
shall be made to a Participant unless the Participant's spouse, if any,
consents in writing to the distribution during the 90-day period ending
on the date of the distribution. Such consent must be in writing, must
acknowledge the effect of the distribution,and must be witnessed by a
Plan representative or notary public.
4.5 Withdrawals at Age 59-1/2
The Plan Administrator may adopt Plan Rules permitting any Participant to
withdraw amounts from his or her Account on or after the date the Participant
reaches age 59-1/2. Plan Rules may prohibit Participants who receive
distributions under this Section from continuing to make Deferrals under
Section 4.1 for a stated period of time.
4.6 Rollover Contributions; Transfers
(a) Any person who is or who may soon become a Participant and who
has received or who is entitled to receive a distribution from a pension
benefit plan or from a "rollover" individual retirement arrangement may
contribute such amount, or cause such amount to be contributed, to the Plan.
A "rollover" contribution (as opposed to a direct plan-to-plan transfer)
shall only be allowed to the extent permitted by Code Section 402(c).
Except with respect to a plan merger described in Section 8.7, a plan-to-
plan transfer or a rollover shall not be permitted under this Section to
the extent the amount to be transferred to the Plan is directly or
indirectly attributable to any defined benefit or money purchase pension
plan or any other defined contribution plan subject to the joint and
survivor annuity requirements of Code Section 401(a)(11) unless the
elective transfer conditions of Reg. Section 1.411(d)-4, Q&A-3(b) are
satisfied.
(b) Any such rollover or transfer must be in the form of cash
or marketable securities. If such rollover or transfer is made from other
than an Employer-sponsored qualified plan, the Participant shall
provide evidence satisfactory to the Plan Administrator that such rollover
or transfer amounts meet the requirements of the Code and that such
amounts are not subject to joint and survivor annuity requirements.
Any special expenses incurred by the Plan Administrator with respect
to an actual or attempted rollover or transfer shall be charged to the
individual Participant's Account under the Plan.
(c) The Plan Administrator shall establish a fully Vested
"Rollover Account" for each Participant electing to make a rollover
contribution under subsection (a), to which shall be credited the
rollover or transfer contribution and credited or debited investment
gains or losses. For all purposes of the Plan, a Rollover Account
shall be treated as if it were a separate fully Vested Account
belonging to the owner of the Rollover Account. If the Rollover
Account's owner is not otherwise a Participant, the individual shall
be considered a Participant with respect to his or her Rollover Account,
but for no other Plan purpose, until he or she becomes a regular
Participant pursuant to Section 3.1. For example, such an individual
may give investment directions with respect to the Rollover Account,
but may not make Deferrals or be eligible for Matching Employer
Contributions until the requirements of Section 3.1 are satisfied.
Amounts may not be withdrawn from Rollover Accounts during continued
Employment except as otherwise permitted by the Plan or by Plan Rules.
(d) To qualify for lump sum tax treatment under Code Section
402(d), a Participant must have five years of plan participation.
Service under another plan does not count towards meeting this
requirement unless this Plan received amounts from the other plan in a
direct plan-to-plan transfer.
(e) Effective January 1, 1993, any Participant receiving a
distribution from the Plan which is eligible for rollover treatment may
direct the Plan Administrator to have such distribution transferred
directly to an eligible transferee plan designated by the Participant;
however, any special expenses incurred by the Plan Administrator with
respect to an actual or attempted rollover or transfer shall be charged
to the individual Participant's Account under the Plan. Failure to
designate such a transferee will subject the distribution to mandatory
withholding. Effective January 1, 1993, the following provisions shall
apply:
(i) These provisions of this subsection (e) apply to
distributions made on or after January 1, 1993. 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 Plan
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.
(ii) Eligible rollover distribution: 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 Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(iii) Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the 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.
(iv) Distributee: 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 Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(v) Direct rollover: A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
4.7 Highly Compensated Employees
A "highly compensated" Employee means any Employee who, during a particular
Plan Year or the preceding Plan Year: (a) was at any time a 5-percent owner as
defined in Code Section 416(i)(1); (b) received aggregate "compensation" from
one or more Employers in excess of the adjusted equivalent of $75,000; (c)
received aggregate "compensation" from one or more Employers in excess of
the adjusted equivalent of $50,000 and was in the "top paid group" for the
Plan Year; or (d) was at any time an officer and received "compensation"
greater than 50 percent of the amount in effect under Code Section
415(b)(1)(A) for the Plan Year; provided that an Employee not described
in (b), (c) or (d) above for the preceding Plan Year shall not be
treated as being described in (b), (c) or (d) for the current Plan Year
unless such person is a member of the group of 100 Employees paid the
greatest "compensation" from the Employer or any related company during
the current Plan Year. As used in this Section 4.7, "compensation" means
compensation as described in Code Section 414(q)(7). As used in this
Section 4.7, "top paid group" means the group consisting of the
top 20-percent of employees of the Employers andany related companies when
ranked on the basis of Plan Year compensation, subject to the exclusions
listed in Code Section 414(q)(8), and "employee" means any individual who
renders service to the Employer or a related company as a common law employee
or officer. Furthermore, with respect to any Plan Year, the Plan Administrator
may make the calendar year calculation election provided under Regulation
Section1.414(q)-1T, Q&A-14(b). For purposes of (d) above no more than 50
employees (or, if lesser, the greater of three employees or 10% of the
employees) shall be treated as officers. If for any Plan Year no officer of
the Employer or a related company meets the compensation requirements of
(d) above, the highest paid officer for such Plan Year shall be treated as
a highly compensated Employee. A former employee who terminated employment
with the Employer or a related company prior to the Plan Year
compensated Employees is being made shall be treated as a highly compensated
Employee if such employee was a highly compensated employee in the Plan Year
of termination or in any Plan Year ending on or after the employee's 55th
birthday.
If an employee is, during a particular Plan Year or the preceding Plan
Year, a family member of a 5-percent owner or of a highly compensated Employee
who is one of the 10 most highly compensated employees (ranked on the basis of
compensation paid by the Employer) during such year, then all family
members and the 5-percent owner or top-ten compensated Employee shall be
aggregated. In that case, all such persons shall be treated as a single
Employeewhose compensation, Plan contributions and Plan benefits shall be
the aggregate of those received or credited to each such person. For these
purposes, "family member" means the spouse or any lineal ascendant or
descendant of such 5-percent owner or top-ten Employee as well as the spouse
of such lineal ascendants and descendants.
ARTICLE V
EMPLOYER CONTRIBUTIONS
5.1 Employer Contributions
(a) The Employer shall contribute to each Participant's
Deferred Income Account (1) his or her Deferrals, (2) the Matching
Employer Contributions required to be contributed under subsection
(b), and (3) any discretionary contributions allocated to the Participant
under Section 4.3.
(b) For the Plan Year beginning January 1, 1990 the Employer
shall contribute to the Plan for each Participant for whom the Employer
contributed a Deferral a matching contribution (in the Plan called a
"Matching Employer Contribution") in the amount of fifty percent of that
portion of the Participant's Deferral (after correction for any excess
Deferrals pursuant to Section 4.2) for such Plan Year which does not
exceed two percent of the Participant's Compensation for such Plan Year.
Prior to the beginning of any subsequent Plan Year the Employer may
determine and communicate to Participants any change to be made to the
amount of the Matching Employer Contribution to be made for Participants
for such subsequent Plan Year. The Employer shall make Matching
Employer Contributions to the Plan for Participants in the amounts so
determined and communicated to Participants. Matching Employer
Contributions shall be allocated, according to Section 6.10(a)(2), to
separate "Matching Employer Contribution Accounts" for Participants,
which shall be vested according to the schedule in Section 7.1 and
which may not be withdrawn by Participants before separation from
service except in case of hardship or after age 59-1/2 (if so permitted
under Sections 4.4 and 4.5).
(c) In the event that the $7,000 limit (or its adjusted
equivalent) provided for in Section 4.1(a)(ii) is exceeded, the Committee
shall direct the Trustee to distribute such excess amount, adjusted for
any income or loss allocable to such amount, to the Participant not later
than the first April 15th following the close of the Participant's taxable
year. In the event that a Participant is also a participant in
another qualified cash or deferred arrangement [as defined in Code Section
401(k)], a simplified employee pension [as defined in Code Section 408(k)],
or a salary reduction arrangement [within the meaning of Code Section
3121(a)(5)(D)] under Code Section 403(b) or otherwise, and if the
elective deferrals, as defined in Code Section 402(g), made under such
other arrangement(s) and this Plan cumulatively exceed the limit
imposed on the Participant by Section 402(g) of the Code for such
Participant's taxable year, the Participant may, not later than March 1
following the close of his taxable year, notify the Plan Administrator in
writing of such excess and request that his Deferrals under this Plan be
reduced by an amount specified by the Participant. With respect to the Plan
and any other plan of the Employer or a related company in which an
Employee participates, such individual shall be deemed to have notified the
Plan Administrator regarding excess elective deferrals and to have requested
that the total excess deferrals (and income thereon) be distributed, but
taking into account only elective deferrals under this Plan and any other
plan of the Employer or a related company; furthermore, under such
circumstances the Employer may notify the Plan Administrator on behalf of
such individual. Such amount shall then be distributed in the same manner
as provided at the outset of this paragraph.
Income or loss attributable to an excess amount referred to in the
preceding paragraph shall be determined by multiplying the income or loss
allocable to the Participant's Deferrals for the Plan Year by a fraction,
the numerator of which is the excess amount contributed on behalf of the
Participant for the preceding calendar year and the denominator of which
is the account balance attributable to Deferrals on the last day of the
preceding calendar year, reduced by the gain allocable to such total
amount for the taxable year and increased by the loss allocable to such
total amount for the taxable year. Solely for the 1990 Plan Year, the
income or loss computed above shall be further adjusted by an amount equal
to 10% of the income or loss computed above multiplied by the number of
months between the end of the preceding calendar year and the date such
excess Deferrals are distributed.
5.2 Time of Contribution
(a) Payment of contributions (other than Deferrals) for a Plan
Year ending in or with the Employer's taxable year may be made at any time
during such taxable year or after its close, but not later than the date
(including extensions) on which the Employer's federal income tax return is
due with respect to such taxable year. If the Employer makes a contribution
for a taxable year after the end of the taxable year
(i) it shall notify the Trustee in writing that the
contribution is made for the prior taxable year;
(ii) it shall claim such payment as a deduction on its
federal income tax return for its prior taxable year; and
(iii) the Plan Administrator and the Trustee shall treat the
payment as a contribution by the Employer to the Trust actually made
on the last day of such prior taxable year, but only with actual
earnings thereon to be credited.
(b) If this Plan terminates completely on other than the last day
of the taxable year of the Employer, payment of contributions for the last
Plan Year must be made for the Employer's taxable year in which such Plan
Year commenced, subsection (a) notwithstanding.
5.3 Allocation of Employer Contributions
(a) Deferrals made pursuant to Section 4.1 shall be allocated to
Deferred Income Accounts in accordance with Section 4.1(a).
(b) Persons must be Active Participants on the last day of the
Plan Year in order to share in the Employer's additional contributions to
the Plan under Section 4.3.
(c) Forfeitures of matching contributions subject to reallocation
for the Plan Year in question shall be treated as part of the Employer
contribution.
(d) The Matching Employer Contribution under Section 5.1(b) will
primarily be made in the form of Company Stock which will be held in the
La-Z-Boy Stock Fund. The Company may,at its option, instead or in addition
contribute cash with instructions to the Trustee to use such cash to purchase
Company Stock, which will then be held in the La-Z-Boy Stock Fund. Moreover,
the Company may, at its option, instead or in addition contribute cash with
instructions to the Trustee that such cash shall be allocated to Matching
Employee Contribution Accounts in the various investment funds in the
same proportion as each Participant has elected for his Deferrals. The method
of valuing Company Stock for purposes of allocating Matching Employer
Contributions is found in Section 6.10(a)(2).
5.4 Limitation on Employer Contributions
The Employer shall limit its contribution for any Participant so that the
highest allocation to which the Participant would be entitled for the Plan Year
before application of Section 5.5 would be his or her "maximum permissible
amount" (as defined in Section 5.5(d)). Any excess shall have been
contributed by mistake and shall be promptly refunded to the Employer, as
permitted under Section5.9(b).
5.5 Limitation on Allocations
(a) The annual addition to any Participant's Account for any Plan
Year shall not exceed his or her maximum permissible amount. Subsection (d)
defines the terms used in this Section.
(b) Prior to determining the Participant's actual earnings for
the Plan Year, the Employer may determine the maximum permissible
amount on the basis of a reasonable estimate of the Participant's
earnings for the Plan Year, uniformly determined for all Participants
similarly situated. As soonas administratively feasible after the
end of the Plan Year, the maximum permissible amount for the Plan
Year will be determined on the basis of the Participant's actual
earnings for the Plan Year.
(c) If a Participant's annual addition would exceed his or her
maximum permissible amount, the excess amount shall be eliminated as
follows:
(i) Any Deferrals (adjusted for gains or losses,
effective 1996), to the extent they would reduce the excess, shall
be returned to the Participant as soon as administratively feasible.
Any Matching Employer Contributions based upon Deferrals returned to
Participants shall have been contributed by mistake and shall be
returned to the Company as soon as administratively feasible.
(ii) If after the application of paragraph (i) an excess
amount still exists and the Participant is covered by the Plan at the
end of the Plan Year, the excess amount shall not be allocated to the
Participant in that Plan Year but shall be credited to a suspense
account and allocated to the Participant in the next Plan Year (and
the succeeding Plan Years if necessary) in addition to Employer
contributions and forfeitures which would otherwise be allocated to
the Participant.
(iii) If after the application of paragraph (i) an excess
amount still exists and the Participant is not covered by the Plan at
the end of the Plan Year, the excess amount shall be held unallocated
in a suspense account. The suspense account shall be allocated in the
next Plan Year (and succeeding Plan Years if necessary) to all
remaining Participants in lieu of (or, to the extent contributions are
discretionary in amount, in addition to) Employer contributions and
forfeitures which would otherwise be allocated to those Participants.
(iv) The suspense account shall not share in gains or losses
of the Trust Fund. In the event the Plan is terminated, a special
allocation of any amounts held in suspense shall be made to all Active
Participants employed as of the termination date in proportion to their
Compensation to date for the Plan Year, subject to the limitations of
this Section. To the extent that this Section then precludes the
allocation of the entire suspense account, the balance shall revert
to the Employer and to the extent any such amount consists of
Deferrals, the Employer shall pay the same to the appropriate
Participants.
(d) Terms used in this Section shall have the following meanings:
(i) "Annual addition" means the sum for the Plan Year of all
Employer contributions (including Deferrals, Matching Employer
Contributions and "fail-safe" contributions), forfeitures allocated to
a Participant's accounts in all qualified defined contribution and
defined benefit plans maintained by the Employer, amounts described in
Sections 415(l)(1) and 419A(d)(2) of the Code and Employee after-tax
contributions (if permitted under the provisions of the Plan as in
effect from time to time).
(ii) "Maximum permissible amount" shall mean, with respect to
a Participant, the lesser of
(A) twenty-five percent of the Participant's Earnings
for the Plan Year; or
(B) $30,000 (or such higher amount then in effect
pursuant to Code Section 415(d) for the calendar year in or
with which the Plan Year ends). Because the Plan Year is the
"limitation year," if a short Plan Year is created for
any reason, the dollar amount in this subparagraph shall
be prorated by multiplying it by a fraction, the numerator of
which is the number of months in the short Plan Year and the
denominator of which is twelve.
(iii) "Earnings" shall mean the total cash and non-cash
remuneration paid to a Participant during the Plan Year (including any
such amounts which are otherwise excluded from "Compensation," as
defined in Section 2.7) but excluding:
(A) employer contributions for simplified employee
pensions to the extent such contributions are deductible by the
Participant;
(B) salary reduction contributions to cash or deferred
plans or cafeteria plans, deferred compensation or any
distributions from a plan of deferred compensation (other than an
amount included in the Participant's gross income for the Plan
Year which is attributable to an unfunded, non-qualified plan);
(C) amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or property)
held by a Participant becomes freely transferable or is no
longer subject to a substantial risk of forfeiture;
(D) amounts realized from the sale, exchange or other
disposition of stock under a qualified or incentive stock option;
and
(E) other amounts which receive special tax benefits,
or contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of a Code Section
403(b) annuity contract (whether or not the contributions are
excludable from the gross income of the Participant).
5.6 Combined Defined Contribution/Defined Benefit Plan Limit
(a) If a Participant in this Plan is also at any time participating
in one or more qualified defined benefit plans of the Employer, the
annual additions which may be credited to a Participant's Account under this
Plan for any limitation year shall be limited so that the sum of the
Participant's defined contribution plan and defined benefit plan fractions,
as defined below, will not exceed 1.0. This limitation shall only apply if
the defined benefit plan does not provide for a corresponding limitation on
the Participant's accrued benefit under that plan.
(b) "Defined contribution plan fraction" shall have the meaning set
forth in Code Section 415(e)(3). If, based on reasonable projections, it is
expected that a Participant's defined contribution plan fraction in the future
will be materially less than his or her current defined contribution plan
fraction, the Plan Administrator shall compute the defined contribution plan
fraction on a projected basis. (Code Section 415(e)(3) defines the term
"defined contribution plan fraction" as a fraction, the numerator of which is
the sum of the annual additions to the Participant's account in this Plan and
all other qualified defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior limitation years
(including the annual additions attributable to the Participant's
non-deductible contributions to all qualified defined benefit plans maintained
by the Employer, whether or not terminated), and the denominator of which is
the sum of the annual additions which would have been made by the Employer
for the Participant for the current and all prior limitation years (whether
or not this Plan or any defined contribution plan was then in existence)
if, in each such year, the Participant's annual additions equaled the
lesser of (i) one hundred twenty-five percent of the dollar limitation
in effect under Code Section 415(c)(1)(A), or (ii) thirty-five percent
of the Participant's earnings for the year in question. A Participant's
defined contribution plan fraction as of the end of the last limitation
year beginning prior to 1976 shall be calculated in accordance with
Treas. Reg. Section 1.415-7(d). If the Participant was a participant
as of the end of the first day of the first limitation year beginning
after December 31, 1986, in one or more qualified defined contribution
plans maintained by the Employer which were in existence on May 6, 1986,
the numerator of the Participant's defined contribution plan fraction
will be adjusted if the sum of this fraction and the defined benefit
plan fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of () the
excess of the sum of both fractions over 1.0, and () the denominator of the
defined contribution plan fraction, will be permanently subtracted from the
numerator of the defined contribution plan fraction. The adjustment shall be
calculated using the fractions as they would be computed as of the later of
the end of the last limitation year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan made after
May 5, 1986, but using the Code Section 415 limitation applicable to the
first limitation year beginning on or after January 1, 1987. Further, the
annual addition for any limitation year beginning before January 1, 1987,
shall not be recomputed to treat all employee contributions as annual
additions.)
(c) "Defined benefit plan fraction" shall have the meaning set
forth in Code Section 415(e)(2). (This Code Section defines the term as a
fraction, the numerator of which is the sum of the projected annual
Employer-provided benefit of the Participant under all qualified defined
benefit plans (whether or not terminated) maintained by the Employer and
the denominator of which is the lesser of (i) one hundred twenty-five percent
of the dollar limitation determined for the limitation year under Code
Sections 415(b) and (d), or (ii) one hundred forty percent of the
Participant's compensation as determined under Code Section 415(b)(1)(B).
The projected annual benefit is the annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if the projected annual
benefit is expressed in a form other than a straight life annuity or
qualified joint and survivor annuity) to which the Participant would be
entitled under the terms of the plan, assuming that the Participant
will continue employment until normal retirement age under the plan
(or current age, if later), and that the Participant's compensation for
the current limitation year and all other relevant factors used to
determine benefits under the plan will remain constant for all future
limitation years. If the Participant was a participant as of the first
day of the first limitation year beginning after December 31, 1986, in
one or more qualified defined benefit plans maintained by the Employer
which were in existence on May 6, 1986, the denominator of the
Participant's defined benefit plan fraction shall not be less than one
hundred twenty-five percent of the sum of the annual benefits which the
Participant had accrued under such plans as of the later of the close
of the last limitation year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the plan after May 5, 1986.
The preceding sentence shall apply only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code
Section 415 for all limitation years beginning before January 1, 1987.)
(d) For any Plan Year in which the Plan is top heavy and the
exception in Code Section 416(h)(2) does not apply, "one hundred percent"
shall be substituted for "one hundred twenty-five percent" in subsections
(b) and (c) in determining the denominators of a key employee's defined
contribution and defined benefit plan fractions.
5.7 Special Limitation on Allocations under Code Section 401(m)
(a) Subject to Section 5.8, allocations of Matching Employer
Contributions to the Participant's Matching Employer Contribution Account
under the Plan shall be limited so that the Average Contribution Percentage
for any Plan Year for highly compensated Participants shall bear a
relationship to the Average Contribution Percentage of all other Active
Participants which meets either of the following tests:
(1) The Average Contribution Percentage of the highly
compensated Participants is not more than the Average Contribution
Percentage of all other Active Participants multiplied by 1.25, or
(2) The excess of the Average Contribution Percentage of
the highly compensated Participants over the Average Contribution
Percentage of all other Active Participants is not more than 2 percentage
points, and the Average Contribution Percentage of the highly compensated
Participants is not more than the Average Contribution Percentage of all
other Active Participants multiplied by 2.
For purposes of this Section 5.7(a), "Average Contribution
Percentage" for a specified group of Participants means the average
(computed to the nearest one-hundredth of one percent)
of the ratios, calculated separately (and to the nearest one-hundredth
of one percent) for each Participant in the group, of the amount of
Matching Employer Contributions actually paid to the Trust on behalf
of each such Participant for such Plan Year, to the Participant's
Compensation for such Plan Year or, if permitted by applicable
regulations, for the portion of the Plan Year in which the Participant
was eligible to make Deferrals under a salary reduction agreement.
As separately calculated for each Participant, such ratio is
hereinafter referred to as his "Contribution Percentage."
For purposes of this Section 5.7(a) the following special rules
shall apply:
(3) In making the computations required by (1) and (2),
above, for highly compensated Participants and other Participants, the
Plan Administrator shall include any Participant eligible to have
Matching Employer Contributions allocated to his Matching Employer
Contribution Account for the Plan Year, whether or not such allocation
was actually made.
(4) If two or more plans of the Employer to which matching
contributions, employee contributions, or elective deferrals are made
are treated as one plan for purposes of Code Section 410(b), such
plans shall be treated as one plan for purposes of this Section 5.7(a).
In addition, if a highly compensated Participant participates in two
or more plans described in Code Section 401(a) or arrangements described
in Code Section 401(k) which are maintained by the Employer or related
company to which such contributions are made, all such contributions
shall be aggregated for purposes of this Section 5.7(a).
(5) For purposes of determining the Contribution
Percentage of a Participant who is highly compensated, the
Matching Employer Contributions and Compensation of such
Participant shall include the Matching Employer Contributions and
Compensation of family members, and such family members shall be
disregarded in determining the Contribution Percentage for
Participants who are not highly compensated employees.
(6) The determination and treatment of the Matching Employer
Contributions and Contribution Percentage of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.
(7) The Plan Administrator shall monitor the Matching Employer
Contributions being made periodically to the Trust and may require
adjustments during the Plan Year and/or may reduce future Matching
Employer Contributions for any Participants on behalf of whom they are
being made in order to assure compliance with applicable limitations.
(b) If, notwithstanding the Plan Administrator's efforts to monitor
allocations to the Accounts of Participants as required by section (a) above,
the Plan Administrator determines after the end of a Plan Year that the
allocations of Matching Employer Contributions to the Matching Employer
Contributions Accounts of highly compensated Participants for such Plan Year
exceed the special limitations described in subsection (a) above.
(1) To the extent permitted under Section 401(m) of the Code
and regulations thereunder, all Matching Employer Contributions initially
allocated to the accounts of highly compensated Participants which exceed
the special limitations described in subsection (a) above may within
2-1/2 months following the end of the Plan Year for which such
contributions were made be distributed to such Participants, adjusted
for any income or loss allocable to such excess. If such excess Matching
Employer Contributions (adjusted for income or loss as provided in (3),
below) are not distributed to such Participants within such 2-1/2 month
period, then the same shall be distributed to such Participants
prior to the close of the Plan Year which encompasses such 2-1/2
month period.
(2) The amount of excess Matching Employer Contributions
for highly compensated Participants is to be computed on an individual
basis pursuant to the following method:
The Contribution Percentage for the highly compensated
Participant with the highest Contribution Percentage shall be
reduced to the extent required to either
(i) enable the arrangement to satisfy a test as
specified in subsection (a), above; or
(ii) cause such person's Contribution Percentage
to equal the Contribution Percentage of the highly
compensated Participant with the next highest Contribution
Percentage.
Such reduction is to be iterated until a test as specified in
subsection (a) above is satisfied. In case there are two or more
highly compensated Participants with the same Contribution
Percentage, the contribution ratio of such persons shall be reduced
equally and simultaneously. For each highly compensated Participant,
the amount of excess Matching Employer Contributions is equal to
his or her Matching Employer Contribution prior to the application
of this subparagraph (2) minus the amount determined by multiplying
his or her Contribution Percentage, as determined after application
of this subparagraph (2), by his or her Compensation used in
determining such ratio. In no case shall the excess Matching
Employer Contributions with respect to any individual exceed the
actual Matching Employer Contributions on behalf of such individual.
(3) Income or loss allocable to an excess amount
referred to in (1), above, under applicable Treasury Regulations,
shall be determined by multiplying the income or loss allocable
to the Participant's Matching Employer Contributions for the Plan
Year by a fraction, the numerator of which is said excess amount
contributed on behalf of the Participant for the preceding Plan
Year and the denominator of which is the balance of his or her
Matching Employer Contribution Account on the last day of the
preceding Plan Year, reduced by the gain allocable or increased by
the loss allocable to such total amount for the preceding Plan
Year. Solely for the 1990 Plan Year, the income or loss computed
above shall be further adjusted by an amount equal to 10% of the
income or loss computed above multiplied by the number of months
between the end of the preceding Plan year and the date such
excess Matching Employer Contributions are distributed.
5.8 Multiple Use of Alternative Limitation
In the event that multiple use of the alternative limitations of Section
4.2(b) and Section 5.7(a) shall occur (as defined under Code Section 401(m)
(9)(a)), the actual deferral ratios of highly compensated Active
Participants shall be reduced in a manner similar to that of Section 4.2(c)
and (d) to the extent necessary to correct the multiple use of the
alternative limitations. Any such excess Deferrals shall be allocated income
or loss in a manner similar to that of Section 4.2(e). The computations
contemplated in this Section 5.8 shall notbe performed until after the
adjustments required by Sections 4.2 and 5.7 above have been taken into
account.
5.9 Return of Contributions
(a) All Company contributions to the Trust are conditioned
upon the Plan and Trust being and remaining qualified and upon deductibility
under Section 404 of the Code, unless otherwise expressly stated by the
Company. Accordingly (unless so stated), if the Plan or Trust is not so
qualified or if and to the extent that such a deduction is disallowed
within the meaning of Section 403(c)(2) of ERISA, the contribution in
question shall be repaid to the Company upon demand (but subject to Section
5.9(c) below and, if by reason of disallowance, only to the extent
disallowed) within one year after such disallowance or denial of
qualification. Any Deferrals so returned to the Company shall be paid by
the Company to the Participants on whose behalf they were made.
(b) If and to the extent that a Company contribution to the
Trust is made as a result of facts and circumstances constituting a good
faith mistake of fact, the same shall be repaid to the Company upon
demand (but subject to Section 5.9(c) below and only to the extent of such
mistake) within one year after the payment of the contribution. Any
Deferrals so returned to the Company shall be paid by the Company to the
Participants on whose behalf they were made.
(c) All repayments of Employer contributions under Sections 5.9(a)
and (b) above shall be subject to the conditions that:
(1) Such repayment shall not include any earnings
attributable to that portion of the Company contributions which
qualifies for repayment under Sections 5.9(a) and (b) above, except to
the extent earnings on Deferrals may be included in such
repayment under applicable Treasury Regulations or rulings.
(2) There shall be deducted from the amount of such repayment
any losses attributable to that portion of the Company contribution
which qualifies for repayment under Sections 5.9(a) and (b) above.
(3) If in any event such repayment would result in any
Participant's account being reduced to a balance which is less than
the balance which would have been in his account had the amount
contributed by mistake of fact or in excess of the deductible amount
not been contributed, then the amount to be repaid shall be reduced
until no Participant's account shall be so reduced by reason of such
repayment.
ARTICLE VI
TRUST FUND EARNINGS AND INVESTMENTS
6.1 Value of Accounts
(a) The value of an Account for all purposes of this Plan shall be
its value as last actually determined under this Article on or before the date
in question, increased by contributions thereafter credited to the Account and
decreased by amounts thereafter withdrawn or distributed from the Account.
(b) The last day of June and of December shall be valuation dates.
The Plan Administrator may, but need not, establish more frequent regular
valuation dates, e.g., the last day of each month, or any special valuation
dates. As of each valuation date (and prior to allocating contributions or
forfeitures as of such date), the Plan Administrator shall allocate the
Plan's gains and losses since the last valuation date among Accounts by
adjusting the stated value of each Account to reflect its actual value as
of the then current valuation date. This adjustment shall be accomplished
by multiplying the last determined value of each Account (or its average
balance determined under Section 6.5) by the earnings factor for the
valuation date. Investment funds maintained pursuant to this Article shall
be valued separately and a separate earnings factor, as described in Section
6.2, shall be calculated for each such fund. An Account shall share in a
fund's gains and losses only to the extent the Account is invested in the
fund. If an Account becomes wholly or partially distributable other than
on a valuation date and the Plan Administrator determines that the Plan
has had substantial gains or losses since the last valuation date, the
Plan Administrator may establish a special valuation date and the
distributable Account shall be revalued in accordance with this Article.
6.2 Earnings Factor
(a) Except as otherwise provided in Plan Rules, the earnings
factor referred to in Section 6.1 shall mean the percentage determined by
dividing the Trust Fund's current adjusted value, as defined in subsection
(b), by the total amount credited to all Accounts (net of any earmarked
investments described in Section 6.6) as of the valuation date, before
allocations or distributions as of such date.
(b) The Trust Fund's current adjusted value shall be equal to
the Trust Fund's current value, as determined under Section 6.3, reduced
by all amounts contributed to the Trust by any person which are then being
held pending allocation.
6.3 Rules for Valuing Trust Assets
(a) As of each valuation date (and before making any
distributions as of such date), the Plan Administrator shall be informed
by the Trustee of the value of the entire Trust Fund. Earmarked
investments described in Section 6.6 shall not be taken into account.
(b) The Trustee shall determine the fair market value of Trust
Fund assets in compliance with the Plan and the principles of Section
3(26) of ERISA and regulations issued pursuant thereto. Valuation shall
be based upon information reasonably available to the Trustee, including
data from, but not limited to, newspapers and financial publications of
general circulation, statistical and valuation services, records of
securities exchanges, appraisals by qualified persons, transactions and
bona-fide offers in assets of the type in question and other information
customarily used in the valuation of property for purposes of the Internal
Revenue Code. The Trustee may elect to value any bank deposit, certificate
of deposit, bond, interest-bearing insurance contract, promissory note or
other evidence of indebtedness at its unpaid face value, with interest
accrued to the valuation date, if the obligation is not in default. The
value of any real property held in the Trust Fund, determined as of the
last day of any Plan Year, shall be considered to remain unchanged until
the last day of the following Plan Year. In determining the value of the
Plan's investment in any collective investment fund, separate account,
partnership or similar entity, the Trustee may (but need not) rely on the
most recent prior valuation of units or interests in the fund, separate
account, partnership or entity made by or on behalf of the fund, separate
account, partnership or entity. With respect to securities for which
there is a generally recognized market, the published selling prices on or
nearest to such valuation date shall establish the fair market value of
such security. Fair market value so determined shall be conclusive for
all purposes of the Plan and Trust.
(c) Administrative expenses which are paid or payable by the
Plan shall be accounted for in the manner specified by the Plan
Administrator except that expenses incurred on behalf of a specific
Participant may be charged to his Account. In valuing the Trust Fund,
the Trustee may elect to treat as a Plan asset the unamortized amount of
capitalized administrative expenditures paid by the Plan.
6.4 Unallocated Amounts
Amounts being held pending allocation shall not share in gains and losses
except e extent specified by the Plan Administrator.
6.5 Special Rule for Variable Account Balances
The Plan Administrator may elect to allocate gains and losses on the
basis of the average Account balances since the last valuation date, as
determined under a reasonable method consistently applied.
6.6 Special Rule for Earmarked Investments
All gains and losses on an investment earmarked to a Participant's Account
shall be credited to that Account. Earmarked investments shall be ignored in
establishing the value of Accounts for purposes of allocating gains and losses
under Section 6.1 and their value shall not be included in the Trust Fund value
determined under Section 6.3. At present, investments earmarked to Accounts
consist only of certain loans to Participants.
6.7 Investment Funds
(a) For investment purposes, the assets of the Trust Fund
(other than earmarked investments described in Section 6.6) shall be
divided in accordance with the Plan Administrator's instructions among
separate investment funds, which the Trustee and Plan Administrator
shall from time to time make available and which shall include:
(i) the La-Z-Boy Stock Fund, which shall be invested
and reinvested in Company Stock as defined in Section 6.10(d); and
(ii) other investment funds as may be required by law
or from time to time made available by the Plan Administrator and
the Trustee.
(b) When an individual first becomes a Participant, the Plan
Administrator shall give the Participant the right to specify how his or
her Account shall be invested in each of the investment funds. Thereafter,
the Plan Administrator shall periodically give all Participants the
opportunity to elect to change how new amounts credited to their Accounts
are invested or to change how amounts previously credited to their Accounts
are invested. Investment directions shall be made in the manner specified
by the Plan Administrator and in accordance with applicable Plan Rules.
In the absence of proper elections under this Article, the Plan
Administrator shall not process Deferrals by the Participant and all
distributions shall be charged first to the balance of his or her Account,
proportionately among the other funds, and then to the portion of the
Participant's Account invested in the La-Z-Boy Stock Fund.
(c) All gains and losses with respect to an investment fund
shall be credited to it as more fully described in Section 6.1(b).
(d) The Trust Fund, or any part thereof, may be invested
through ownership of assets or shares in a collective investment entity
such as a mutual fund, common trust fund or pooled investment fund which
allows participation by a trust fund established under a qualified plan,
and which may be maintained by the Trustee or an investment manager.
For such purposes, the terms and conditions of the declaration of trust
or other governing documents through which the common trust fund or
pooled investment fund is established or maintained are incorporated
herein and made applicable hereto.
6.8 Investment in Insurance
A Participant is not permitted to direct the investment of his or her
Account in individual or group insurance policies or annuity contracts.
6.9 Loans to Participants
(a) The Plan Administrator shall have the investment management
discretion to direct the Trustee to loan money to Participants from their
Accounts. Each such loan shall be treated as an earmarked investment of
the borrower's Account. All loans are subject to applicable Plan Rules
which, for example, may provide that a Participant may only have one
loan outstanding from the Plan at any time, and may obtain only one loan
each Plan Year.
(b) A Participant who wishes to borrow money from the Plan
shall file a written loan application with the Plan Administrator.
The Plan Administrator shall approve or deny the loan in accordance
with written criteria applied in a uniform and nondiscriminatory
manner. No loan shall be granted unless the following requirements
are met:
(i) No loan shall be made in an amount less than
$1,000 or greater than fifty percent of the Participant's total
Vested Account balances. In addition, no loan of more than
$50,000 (reduced as described below if applicable) shall be made.
Such $50,000 maximum shall be reduced by the excess, if any, of
(A) the highest outstanding balance of loans from the Plan during
the one-year period ending on the day before the date on which the
loan is made, over (B) the outstanding balance of loans from the
Plan on the date on which the loan is made. In applying these
loan limits, the unpaid balance then due under all loans to the
Participant under this and all other qualified retirement plans
of the Employer shall be aggregated with any proposed loan;
(ii) The loan shall bear a commercially reasonable rate
of interest, taking into account the security given for such loan;
(iii) The loan shall be adequately secured and security may
be required in addition to that automatically provided under
subsection (c);
(iv) Interest and principal on a loan must be repaid
in substantially equal installments not less frequently than
quarterly (normally through payroll deductions) over a specified
period not to exceed five years (including renewals, extensions
and refinancing) unless said loan is for the purpose of purchasing,
constructing or renovating the principal residence of the
Participant; and
(v) The loan shall be documented by such note,
evidence of indebtedness and other instruments executed by the
Participant which the Plan Administrator shall require.
(c) Each loan from the Plan shall be secured by the borrowing
Participant's interest in the Plan. If a Participant's Employment
terminates or the Plan terminates before he or she has repaid the loan,
the loan shall become immediately due and shall be repaid out of the
Participant's Vested Account or benefits, which shall be reduced
accordingly. This right of set-off does not mandate that the Plan
Administrator defer collection of a loan until termination of Employment
but merely provides a method of ensuring payment by such time. If a
Participant's loan is in default or the Participant files for relief
under the United States Bankruptcy Code and the Participant's Employment
has not terminated, the loan shall become immediately due and payable
and shall be satisfied to the extent possible from the Participant's
Vested Account (other than his or her Deferred Income Account unless
the Participant has reached age 59-1/2) and the Account shall be reduced
accordingly.
(d) Plan Rules shall determine the method by which the loan
proceeds are withdrawn from the Participant's balances in the investment
funds and the method by which loan repayments are re-invested among the
funds.
(e) Each Participant applying for a loan shall be subject to
a loan processing fee of up to $100 as specified in Plan Rules. If the
fee is charged in advance, it shall be returned to the Participant if
the loan is not approved; otherwise, the fee shall be deducted from the
proceeds of the loan.
(f) An assignment or pledge of any portion of the
Participant's interest in the Plan will be treated as a loan to the
Participant.
(g) Notwithstanding that a requirement of spousal consent
generally oes not apply to this Plan, no such loan shall be made to a
Participant unless the Participant's spouse, if any, consents in writing
to the use of the Participant's Account as security for the loan during
the 90- day period ending on the date on which the loan is to be so
secured. Such consent must be in writing, must acknowledge the effect of
the loan and must be witnessed by a Plan representative or notary public.
If such spousal consent is obtained, or is not required because the
Participant is not married at the time the loan is secured by the
Participant's Account, no consent of a different or subsequent spouse
shall be required in order to apply the Trust's security interest in the
Account to pay the balance of the loan pursuant to (c) above. However,
any renegotiation, extension, renewal, or other revision of a loan shall
be treated as a new loan for purposes of this Section 6.9(g). If a
valid spousal consent to the use of a Participant's Account as security
for a loan to the Participant has been obtained, for purposes of
determining the amount of the Participant's Vested Account used to
purchase a qualified joint and survivor annuity or a qualified
preretirement survivor annuity (in those instances where such annuities
are required), the Participant's Account shall be reduced by the amount
of the Participant's Account applied to pay the balance of the loan to the
Participant from the Trust outstanding at the time of the Participant's
death, termination of employment, or other event triggering a distribution
of the Participant's Account under the Plan.
(h) To the extent permitted by applicable Department of Labor
regulations, no loan shall be made to a Participant who is not an active
employee.
6.10 Special Rules Applicable to the La-Z-Boy Stock Fund
(a) (1) There shall be no limitation under the Plan on the
portion of the assets of the Trust Fund which may be invested in
the La-Z-Boy Stock Fund other than compliance with the other
provisions of the Plan relating to investment of elective
Deferrals and of Matching Employer Contributions.
(2) For purposes of allocating the Matching Employer
Contribution for a given month beginning before April 1994,
Company Stock shall be valued at the average of its closing price
on the New York Stock Exchange composite tape on the last five
business days of that month; for months after March 1994, Company
Stock shall be valued at its closing price on the New York Stock
Exchange composite tape on the business day of that month on which
the corresponding Deferrals are received by the Trustee. However,
for purposes of establishing a Participant's Account balance,
Company Stock held in the La-Z-Boy Stock Fund shall be valued at
its closing price on the New York Stock Exchange composite tape on
the last business day coinciding with or prior to the date of
valuation.
(b) All shares of Company Stock acquired by the Trustee shall
be held by the Trustee until disposed of pursuant to provisions of the Plan
Such shares may be registered in the name of the Trustee or its nominee.
The Trustee or its nominee shall vote shares of Company Stock in the
accounts of Participants as follows:
(1) The Trustee shall adopt reasonable measures to
notify Participants (and beneficiaries of Participants) who have
an interest in the La-Z-Boy Stock Fund of the date and purposes
of each meeting of stockholders of the Company at which holders of
shares of Company Stock shall be entitled to vote, and to request
instructions from the Participant to the Trustee as to the voting
at such meeting of shares of Company Stock in the account of each
Participant;
(2) Before each such meeting the Committee shall furnish
to the Trustee, and the Trustee shall furnish to each such
Participant (or beneficiary of a Participant), the same
information furnished by the Company to its shareholders in respect
to such meeting, including proxy materials and, where applicable, a
copy of the Company's annual report.
(3) The instructions received by the Trustee from
Participants (or beneficiaries of Participants) shall be held by
the individual or individuals designated by the Trustee to receive
such instructions in confidence and shall not be divulged or
released to any other person, including officers or employees of
the Company or any related company.
(4) Upon timely receipt of such instructions the
Trustee itself or by proxy, shall vote the shares of Company
Stock in such ccount of the Participant in accordance with the
Participant's instructions.
(5) If the Trustee shall not have received timely
instructions from a Participant on a particular matter in respect
of any shares of Company Stock in such Participant's account,
the Trustee itself or by proxy shall vote all such shares in the
same ratio as the shares with respect to which instructions were
received from Participants.
(c) Except as otherwise expressly provided in the Plan, the
Trustee shall not sell, alienate, encumber, pledge, transfer or otherwise
dispose of, or tender or withdraw, any shares of Company Stock held by it
under the Plan. In the event the Trustee determines that a tender or
exchange offer for shares of Company Stock has commenced, then,
notwithstanding any other provision of this Agreement, the following
provisions of this Section 6.10(c) shall become applicable.
(1) Upon determination that an offer described in the
first paragraph of this Section 6.10(c) has commenced, the
Trustee shall cause to be sent to each Participant and Beneficiary
of a deceased Participant who, on the effective date of such offer
or at any time during the effective period of such offer, has
shares of Company Stock allocated to his account, such information
as is reasonably available to the Trustee and as the Trustee
determines is necessary for such Participant or Beneficiary to
make an informed decision in respect of such offer, together with
a form prescribed by the Trustee pursuant to which such Participant
or Beneficiary may direct the Trustee to tender or exchange pursuant
to such offer all or part of the shares of Company Stock so allocated
to his account. The Trustee shall tender or exchange only those
shares of Company Stock as to which valid and timely directions to
tender or exchange are received and not validly and timely revoked,
and all other shares of Company Stock held under the Plan shall
continue to be held by the Trustee. If in the course of an offer
described in the first paragraph of this Section 6.10(c) there shall
arise any issue on which Participants or Beneficiaries who have
directed the tender or exchange of shares of Company Stock are
required to have an opportunity to alter their circumstances
(including but not limited to an opportunity to tender or
exchange shares of Company Stock in a competing offer), the
Trustee shall, in accordance with the foregoing provision of
this subparagraph (1) and to the extent reasonably practicable,
solicit the directions of such Participants and Beneficiaries with
respect to each such issue and act in response to such directions.
(2) The instructions received by the Trustee from
Participants (or Beneficiaries of Participants) shall be held by
the individual or individuals designated by the Trustee to receive
such instructions in confidence and shall not be divulged or
released to any other person, including officers or employees of
the Company or any related company.
(3) To the extent that an offer described in the first
paragraph of this Section 6.10(c) is for cash, proceeds received
by the Trustee from the tender or sale of any shares of Company
Stock pursuant to such offer shall be invested by the Trustee in
one or more of the other investment funds then available in
accordance with directions from Participants and Beneficiaries
whose shares of Company Stock were sold. In the absence of
direction from the Participant or Beneficiary, the proceeds shall
be invested similarly to current Deferrals (or evenly in case of a
Beneficiary). To the extent that an offer described in the first
paragraph of this Section 6.10 (c) is for property other than cash
property received by the Trustee from the tender, exchange, or sale
of any shares of Company Stock pursuant to such offer shall be held
by the Trustee in a separate investment fund pending a determination
of its disposition by the Trustee. The Trustee shall allocate the
proceeds from any shares of Company Stock sold pursuant to such an
offer to the accounts of Participants and Beneficiaries who
directed the Trustee to sell such shares pursuant to such offer.
(4) Any rights to purchase Company common or preferred
stock appurtenant to shares of Company Stock allocated to the
account of a Participant in the La-Z-Boy Stock Fund which become
detached m such shares of Company Stock shall be allocated, held
or disposed of by the Trustee in the manner directed by the Plan
Administrator.
(d) For purposes of the Plan, "Company Stock" means shares of
common stock, $1.00 par value, of the La-Z-Boy Chair Company.
ARTICLE VII
VESTING
7.1 Vesting of Matching Employer Contribution Accounts
The Vested portion of a Participant's Matching Employer Contribution
Account shall be the percentage of such Account shown on the following table
(subject to Sections 7.2 and 7.4 which contains special vesting rules
applicable to certain Employees):
Years of Vesting
Vesting Service Percentage
----------------------- ------------------
less than 5 5 or more
0% 100%
7.2 Accelerated Vesting of Matching Employer Contribution Accounts;
Disability
A Participant's Matching Employer Contribution Account shall become fully
Vested upon the earliest to occur of:
(a) the individual's attaining Normal Retirement Age while an
Employee
(b) the individual's death (or presumed death) while an
Employee;
(c) the complete termination of the Plan, or its partial
termination as to him or her (as more fully provided in Section 11.2); or
(d) the individual's suffering a disability while an Employee.
A Participant shall have suffered a disability if he or she becomes
unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment which can be expected
to result in death or to be of long-continued and indefinite duration.
Determination of whether a Participant is suffering a disability and the
date on which the disability commenced shall be made solely by the Plan
Administrator and shall be based on medical evidence.
7.3 Forfeitures upon Termination of Employment
(a) The nonvested portion of the Matching Employer Contribution
Account of a Participant whose Employment terminates other than by death or
disability as described in Section 7.2 shall be forfeited as of the end of
the Plan Year in which the Participant's Employment terminates or, if
later, as of the end of the Plan Year (but not later than the end of the
Plan Year in which the fifth consecutive Break in Service occurs) in
which the Participant receives a distribution from his Account.
Forfeitures for a Plan Year will first be applied in the manner prescribed
in Section 12.9. Any balance remaining will then be allocated under
Section 5.3.
(b) If a Participant whose Employment terminates again becomes
an Employee before he or she has five consecutive Breaks in Service, the
forfeited portion of his or her Account shall be restored to the amount
on the date of distribution if the Participant repays to the Plan the
full amount of the prior distribution before the earlier of 5 years after
the first date on which the Participant is subsequently re-employed by
the Company, or the date the Participant incurs 5 consecutive Breaks in
Service following the date of the distribution. The funds to be used to
reestablish such account shall first be obtained out of forfeitures
(if any) and next out of Company contributions to the Trust, for such Plan
Year or succeeding Plan Years.
7.4 Vesting Schedules for Merged Plans
The vesting schedules applicable to any plans that are merged with this
Plan shall continue to apply to the accounts transferred as a result of such a
merger.
7.5 Additional Rules for Vesting Service
In computing a Participant's period of Service for purposes of Section
7.1 above, he shall be credited with Service as provided in Section 2.23(c),
except that the following shall not be counted:
(a) For purposes of determining an Employee's Vested percentage
in his Matching Employer Contribution Account following a Break in
Service, years of Service during periods prior to a Break in Service shall
not be counted unless and until the Employee completes a year of Service
after his subsequent reemployment;
(b) In the case of a Participant or other Employee who does not
have a Vested right to a benefit derived from Employer contributions,
i.e., who is not Vested in any part of his Account under the Plan, years
of Service prior to a period of consecutive Breaks in Service shall not
be counted if the number of consecutive Breaks in Service in such period
equals or exceeds five (excluding from the number of years of Service
before such period any years of Service not required to be counted
hereunder by reason of any prior Break in Service);
(c) Notwithstanding subsection (b) above, if as of the day
before the first day of the plan year beginning in 1985 of any plan
merged into this Plan, any years of Service prior to such date were not
required to be counted for purposes of determining the Vested percentage
of a Participant's account under such plan as then in effect, such years
of Service shall not be counted under this Plan;
(d) years of Service during any period for which the Employer
did not maintain the Plan or a predecessor plan (within the meaning of
Section 411(a)(4)(C) of the Code);provided, further, that years of
Service after five or more consecutive Breaks in Service shall not be
counted for purposes of determining the Vested percentage under Section
7.1 above of the Participant's Matching Employer Contribution Account
which accrued before such five or more consecutive Breaks in Service.
If a Participant's eligibility computation period overlaps two vesting
computation periods and he completed a year of Service during such
eligibility computation period but failed to complete a year of Service
in either of the overlapped vesting computation periods, then the year of
Service completed for eligibility to participate shall be deemed a year of
Service for the vesting computation period during which such eligibility
computation period ended.
ARTICLE VIII
BENEFITS UPON TERMINATION OF EMPLOYMENT
8.1 Distribution of Accounts on Retirement
(a) A Participant's Account shall be distributed to him or her
in the event of his or her Retirement because of disability or at any
time subsequent to his or her Early or Normal Retirement Date. Subject
to Section 8.7, a Participant shall receive his or her distribution in
one lump sum. However, if the Account balance is at least $3,500, consent
of the Participant (and spouse) may be required.
(b) A Participant's election of deferred payment under
subsection (c) shall be disallowed by the Plan Administrator if the
Participant's Account balance does not exceed $3,500 (or such higher
amount allowable under applicable law)
(c) (1) Distribution under this Section shall normally be
made as soon as administratively feasible following the end of the
Plan Year in which the Participant's Retirement occurs. If the
Account balance exceeds $3,500 (or such higher amount allowable
under applicable law) and the Participant has not attained his
or her Normal Retirement Age, payment of benefits shall not be
made without the Participant's consent. In that event, payment
shall be made as soon as administratively feasible after the
Participant's attainment of his or her Normal Retirement Age,
without any requirement of consent by the Participant.
Notwithstanding the above, effective April 1, 1992, a
Participant who is eligible to receive an immediate distribution
of at last $3,500 from the Plan, who is also a participant in
another tax-qualified profit sharing plan sponsored by the
Company and/or its subsidiaries, and who is not eligible to
receive a distribution from such other profit sharing plan within
the same calendar year as the immediate distribution from the
Plan shall have a one-time election to defer the distribution from
the Plan until as soon as administratively feasible after January
1 of the calendar year in which the distribution from such other
profit sharing plan is scheduled to occur.
(2) If a distribution is one to which Sections 401(a)
(11) and 417 of the Code do not apply, such distribution may
commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Regulations is given, provided
that: (i) the Plan Administrator clearly informs
the Participant that the Participant has a right for a
period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
(ii) the Participant, after receiving the
notice, affirmatively elects a distribution.
(d) Pending complete distribution of an Account, the person
entitled to the Account shall have the same investment direction
rights as any other Participant.
(e) If a Participant's Account balance is at least $3,500, he
or she may elect to receive the entire portion of his or her
account which is invested in the La-Z-Boy Stock Fund in cash or in
stock, but whole shares only.
8.2 Distribution after Termination of Employment
(a) A Participant who terminates Employment, other than
through Retirement, shall receive the Vested portion of the
amount then credited to his or her Account as follows: Subject
to the provisions of Section 8.1(c), distribution shall normally
be made in a lump sum as soon as administratively feasible after
the end of the Plan Year in which the Participant's Employment
terminates. If the Participant's vested Account is at least
$3,500, the Participant must elect in writing to receive such
Account, and failure to elect shall be deemed an election to
defer payment until attainment of the Participant's Normal
Retirement Age. Notwithstanding the above, if the
Participant's vested Account does not exceed $3,500 (or such
higher amount allowable under applicable law), distribution
shall be made in a cash lump sum within 60 days after the end
of the Plan Year in which the Participant's Employment terminates.
(b) For these purposes, "termination of employment" shall mean
a severance of the employer/employee relationship in such a manner
that it reasonably appears to the Plan Administrator that the
Participant shall incur a Break in Service by the end of the
current or succeeding Plan Year.
8.3 Subsequent Allocations
If any amount is allocated to an Account after distribution of the Account
is made, the amount allocated shall be paid to the person entitled to the
Account in cash in accordance with the method of distribution then in effect
and within the time allowed under Section 8.1(d) or 8.2, whichever is
applicable.
8.4 Early Withdrawal Penalties
If a Participant receives an actual or constructive distribution or
withdrawal from this Plan prior to attaining age 59-1/2, a ten percent penalty
tax may be levied on the distribution by Code Section 72(t).
8.5 Joint and Survivor Annuity Requirements
Except as provided in Section 8.7, the Plan is not subject to the joint
and survivor annuity requirements of ERISA and the Code because it is not a
money purchase pension plan and (1) Vested benefits are payable on the death
of a Participant to his or her surviving spouse (and are not paid to non-
spousal Beneficiaries unless the Participant is not survived by a spouse
or the spouse has otherwise consented), (2) annuities are not available
under this Plan, and (3) subsequent to the enactment of the Retirement
Equity Act of 1984 (August 23, 1984), this Plan has never been the
transferee of benefits from a defined benefit or defined contribution
plan which was subject to the joint and survivor annuity requirements of
the Code or ERISA (subject to the exception in Section 8.7).
8.6 Required Distributions
Notwithstanding any other provisions of the Plan to the contrary,
payment of a Participant's vested account balance shall be made no later
than his or her "required beginning date." A Participant's required
beginning date shall normally be the April 1 next following the end of
the calendar year in which the Participant attains age 70-1/2 or, if
later, ceases to be an Employee.* In the case of a Participant who is
or has been a "five-percent owner" (as defined in Code Section 416) of
the Employer at any time during the five Plan Years ending in or with
the calendar year in which he or she attains age 70-1/2, the required
beginning date shall be the April 1 next following the end of the
calendar year in which the Participant attains age 70-1/2, even if
the Participant is still an Employee, unless such Participant has made
a valid election to delay distribution pursuant to Section 242(b) of
TEFRA, Pub. L. No. 97-248 (1982). A Participant who remains employed
after his or her required beginning date shall be subject to the minimum
distribution requirements of Code Section 401(a)(9) and the
regulations thereunder. In particular, notwithstanding Section
8.1(a), a Participant who has not terminated his or her employment
may request (or the Plan Administrator shall authorize) an installment
distribution of the minimum distribution required under Section 401(a)(9)
of the Code, but not of any additional amount, and only at such times as
reasonably precede the Participant's required payment dates. In
particular, the Plan Administrator may authorize that such an installment
payment be made during the December immediately preceding an active
Employee's required beginning date.
8.7 Special Provisions for Merged Plans
(a) (i) Effective January 1, 1992, no further contributions shall
be made under the Burris Industries, Inc. Amended Employee
Retirement Saving Plan and Trust Agreement. The annuity
provisions and any other form of benefit contained in the
aforesaid plan shall not apply to any contributions made on
or after January 1, 1992 unless provided for `elsewhere than
in this Section 8.7 or in Section 4.6(a) of this Plan.
(ii) The Trustee shall maintain separate accounts on behalf of
each affected Participant for assets transferred to the Trust
Fund from the trust maintained under the Burris plan cited in
subsection (a)(i) above. These separate accounts shall be
credited with earnings (or losses), distributions therefrom and
other items generally allocable to an individual account.
(iii) The statutory provisions relating to qualified
pre-retirement survivor annuities, qualified joint and survivor
annuities and spousal consents to distributions shall apply to
the separate accounts maintained under subsection (a)(ii) above.
Furthermore, any form of distribution or other optional form of
benefit which was available on December 31, 1991 under the Burris
plan cited in subsection (a)(i)above, and which may not be
disregarded under Section 411(d)(6) of the Code, shall continue
to apply to the separate accounts maintained under subsection
(a)(ii) above, but shall not apply to any other accounts under
this Plan unless expressly stated otherwise.
(b) (i) Effective January 1, 1993, no further contributions shall
be made under the Kincaid Furniture Company Amended Profit-Sharing
Plan and Trust Agreement. The installment provisions and any other
form of benefit contained in the aforesaid plan shall not apply to
any contributions made on or after January 1, 1993 unless provided
for elsewhere than in this Section 8.7 or in Section 4.6(a) of
this Plan.
(ii) The Trustee shall maintain separate accounts on behalf of
each affected Participant for assets transferred to the Trust
Fund from the trust maintained under the Kincaid plan cited in
subsection (b)(i) above. These separate accounts shall be
credited with earnings (or losses), distributions therefrom and
other items generally allocable to an individual account.
(iii) Any form of distribution or other optional form of
benefit which was available on December 31, 1992 under the
Kincaid plan cited in subsection (b)(i)above, and which may
not be disregarded under Section 411(d)(6) of the Code, shall
continue to apply to the separate accounts maintained under
subsection (b)(ii) above, but shall not apply to any other
accounts under this Plan unless expressly stated otherwise.
(c) (i) Effective January 1, 1993, no further contributions shall
be made under the Rose Johnson Incorporated Amended Profit-
Sharing and Retirement Plan. The installment provisions
and any other form of benefit contained in the aforesaid plan
shall not apply to any contributions made on or after January
1, 1993 unless provided for elsewhere than in this Section 8.7
or in Section 4.6(a) of this Plan.
(ii) The Trustee shall maintain separate accounts on behalf of
each affected Participant for assets transferred to the Trust
Fund from the trust maintained under the Rose Johnson plan cited
in subsection (c)(i) above. These separate accounts shall be
credited with earnings (or losses), distributions therefrom and
other items generally allocable to an individual account.
(iii) Any form of distribution or other optional form of benefit
which was available on June 30, 1993 under the Rose Johnson plan
cited in subsection (c)(i)above, and which may not be disregarded
under Section 411(d)(6) of the Code, shall continue to apply to
the separate accounts maintained under subsection (c)(ii) above,
but shall not apply to any other accounts under this Plan unless
expressly stated otherwise.
(d) The provisions of Section 8.7(a)-(c) and the references in Section
4.6(a) and in this Article VIII to this Section 8.7 shall become
effective January 1, 1992 or at such other subsequent times as a merger
with this Plan has occurred.
(e) Notwithstanding subsection (d) above, any provisions of this Plan
which shall be needed to ensure that any plan which is merged into this
Plan is in compliance with applicable law shall be deemed to have been
included in such plan by virtue of its merger into this Plan. In
particular, any provisions of this Plan which shall be needed to ensure
that the Burris Industries, Inc. Amended Employee Retirement Saving
Plan, the Kincaid Furniture Company Amended Profit-Sharing Plan and
the Rose Johnson Incorporated Amended Profit-Sharing and Retirement Plan
are in compliance with the Tax Reform Act of 1986 or other applicable
law shall be deemed to have been included in those plans by virtue of
their merger into this Plan.
ARTICLE IX
BENEFITS UPON DEATH
9.1 Designation of Beneficiary
Each Participant or former Participant may designate, revoke and
redesignate Beneficiaries. Such actions shall be taken in writing on a form
provided by the Plan Administrator and shall generally be effective upon
delivery to the Plan Administrator. However, no designation of Beneficiary,
and no amendment or revocation thereof, shall become effective, if filed after
such Participant's death unless the Plan Administrator determines such
designation, amendment or revocation to be valid. The surviving spouse of a
Participant shall automatically be his or her Beneficiary unless such spouse
has consented in writing to the designation of a Beneficiary other than the
spouse and the consent has been witnessed by a notary public.
9.2 Distribution on Death
(a) Upon the death or presumed death of a Participant or
former Participant, the Vested amount credited to his or her
Account shall be paid to the person or persons determined
under subsection (b). Distribution shall be made in cash in
one lump sum unless another method of distribution is properly
elected under Section 9.3.
(b) Amounts payable under subsection (a) shall be paid to
the highest priority person or persons surviving until the
distribution is actually paid or commences. The distribution
priorities are as follows:
(i) First, to the Participant's surviving spouse or
such other person or persons properly designated by the
Participant under Section 9.1 (with spousal consent
where necessary);
(ii) Second, to the Participant's issue;
(iii) Third, to the Participant's parents; and
(iv) Fourth, to the Participant's brothers and sisters
and issue thereof.
(c) Members of a priority class shall cease to be entitled
to benefits upon the Plan Administrator's determination that no
members of the class exist or the Plan Administrator's failure
to locate any members of the class after making reasonable
efforts to do so for one year.
(d) If the Plan Administrator determines that no person
eligible to receive the Participant's Account exists or can be
located, the Plan Administrator shall follow a procedure
similar to the procedure outlined in Section 12.1(b).
(e) The costs of settling any dispute involving the right of
a person to a Participant's Account shall be paid by the Plan but charged
to the Participant's Account, which shall be reduced by the amount of
the costs incurred unless the Plan Administrator shall deem such a
charge to be inequitable.
9.3 Election of Payment Method
(a) A Participant or former Participant (or a named individual
he or she appoints in a writing filed with the Plan Administrator) may
specify how payment under this Article shall be made.
(b) If the Participant's Vested account balance exceeds
$3,500, the election of method of payment under Section 8.1(e) shall be
available to the Beneficiary or other person appointed under Section
9.3(a).
(c) Elections under this Article must be made in the manner
specified by the Plan Administrator, and as soon as reasonably possible
after the death of the Participant. Failure to make this election in a
timely manner shall be deemed an election to receive only cash.
9.4 Time of Distribution
(a) Distributions under this Article shall be made as soon
as administratively feasible after the death of the Participant in
question, unless the Plan Administrator determines that an extension
of not more than ninety days is needed to provide the election under
Section 9.3.
(b) If the amount payable under this Article cannot be
ascertained or the person to whom it is payable has not been determined
or located and reasonable efforts to do so have been made within the time
limits of subsection (a), then distribution under this Article shall be
made as soon as administratively feasible after such amount is ascertained
or such person is determined or located, subject, however, to Section 9.2(d).
ARTICLE X
ADMINISTRATION OF THE PLAN
10.1 Duties of the Plan Administrator
The Plan Administrator shall be responsible for the general administration
and management of the Plan and shall administer the Plan on a nondiscriminatory
basis in accordance with its terms. The Plan Administrator shall have all
powers and duties necessary to fulfill its responsibilities, including but
not limited to the following powers and duties:
(a) To construe and interpret all provisions of the Plan and the
Trust Agreement, including but not limited to the power to construe and
interpret all provisions relating to eligibility for benefits and the amount,
manner and time of payment of benefits, any such construction and
interpretation by the Plan Administrator and any action taken thereon in
good faith by any person to be final and conclusive upon any affected party;
(b) To determine all questions relating to the eligibility of
Employees to participate;
(c) To determine, compute and certify to the Trustee the amount
and kind of benefits payable to Participants and their Beneficiaries;
(d) To authorize all disbursements by the Trustee from the Trust;
(e) To maintain all records necessary for the administration of
the Plan, other than those maintained by the Trustee;
(f) To provide for disclosure of all information and filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental bodies as shall be required by the Code or ERISA or any other
federal or state law;
(g) To adopt or modify Plan Rules (see Exhibit I) for the
regulation or application of the Plan or facilitation of compliance with
applicable provisions of the Securities Exchange Act of 1934; such Plan
Rules may establish administrative procedures or requirements which modify
the terms of this Plan but Plan Rules shall not substantially alter
significant requirements or provisions of the Plan unless the Plan
specifically designates such authority to the Plan Administrator;
(h) To administer the claims procedure set forth in Section 10.5;
(i) To the extent required under the Code, to notify each recipient
of a distribution from this Plan of his or her right to make a transfer or
rollover contribution of all or part of the distribution;
(j) To delegate any power or duty to any firm or person in
accordance with Section 10.3; and
(k) To exercise all other powers or duties granted to the Plan
Administrator by other provisions of the Plan or the Trust Agreement or by
resolutions of the Board of Directors.
10.2 Investments and Funding Policy
(a) The Trustee shall have the exclusive responsibility to manage
the investments of the Trust Fund except to the extent such responsibility is
delegated to one or more investment managers pursuant to the Plan.
(b) The Plan Administrator shall establish a funding policy to
the extent required by applicable law. The Employer shall supply full and
timely information to the Plan Administrator on all matters necessary for the
Plan Administrator to establish such a policy. The Plan Administrator shall
advise the Trustee and any other person delegated investment management
responsibility of all such matters, if any, as may be pertinent to their
duties.
10.3 Delegation of Administrative Responsibility
(a) The Plan Administrator may delegate all or any portion of its
administrative responsibilities and powers with respect to the Plan (other
than investment management responsibilities) to any other person pursuant to
this Section. Investment responsibilities and powers may be delegated only
to the extent permitted by ERISA. In particular, the Company and the Plan
Administrator may appoint one or more investment managers, as such term is
defined in Section 3(38) of ERISA.
(b) A delegation under this Section shall be accomplished by a
written instrument executed by the Plan Administrator specifying
responsibilities and powers delegated and the fiduciary responsibilities
allocated to such delegate. The allocation of such responsibilities and
powers shall be effective upon the date specified in the delegation, subject
to written acceptance by the delegate. Any delegation of powers and
responsibilities shall provide for reports, no less often than annually, by
such delegate to the Plan Administrator of such information necessary fully
to inform the Plan Administrator of the status and operation of the Plan
and of the delegate's discharge of responsibilities delegated.
10.4 Compensation, Indemnity and Liability
(a) The Plan Administrator, any individual serving as Trustee and
any delegate under Sections 10.3 or 10.7 who is an Employee shall serve
without compensation for services to the Plan. Any individual who handles
Plan assets or who serves as Trustee shall be bonded if so required by law.
The Employer shall furnish the Plan Administrator, any individual serving as
Trustee or any such delegate with all clerical or other assistance necessary
in the performance of his or her duties. The Plan Administrator is
authorized to employ such legal counsel and advisors as it may deem advisable
to assist in the performance of its duties hereunder.
(b) All costs of administering the Plan (including the cost of the
bond and legal services described in subsection (a)) shall be paid by the
Employer, except that expenses specifically attributable to a Participant's
Account, e.g., brokerage fees, shall be charged to that Account to the extent
specified by the Plan Administrator.
(c) To the extent permitted by applicable law, the Employer shall
indemnify and save harmless members of the Board of Directors, members of the
Plan Administrator, any individual serving as Trustee and any delegate
appointed pursuant to Sections 10.3 or 10.7 who is an Employee against any
and all expenses, liabilities and claims (including legal fees incurred to
defend against such liabilities and claims) arising out of their discharge
in good faith of responsibilities under or incident to the Plan. Such
indemnification shall continue as to a person who has ceased to be a
director, officer, employee, agent or trustee and shall inure to the benefit
of the heirs and personal representatives of such person. Expenses and
liabilities arising out of willful misconduct shall not be covered under
this indemnity. This indemnity shall not preclude such further indemnities
as may be available under insurance purchased by the Employer or provided
by the Employer under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, or as may be provided under the
Trust Agreement or an agreement with an investment manager, as such
indemnities are permitted under applicable law. Payments with respect
to any indemnity and payment of expenses or fees shall be made only
from assets of the Employer and shall not be made directly or indirectly
from Trust assets.
10.5 Procedure for Resolving Disputed Claims
(a) Normally, a Participant or Beneficiary need not present a
formal claim for benefits in order to qualify for rights or benefits
under this Plan. If, however, any person is not granted the rights or
benefits to which the individual believes himself or herself to be
entitled, a formal claim for benefits must be filed in accordance with
this Section. The claim shall be presented to the claims official
appointed by the Plan Administrator in writing within the maximum time
permitted by law or under regulations promulgated by the Secretary of
Labor or his delegate pertaining to claims procedures.
(b) The claims official shall, within a reasonable time,
consider the claim and shall issue his or her determination thereon in
writing.
(c) If the claim is granted, appropriate action shall be taken
and, if appropriate, distribution or payment shall be made from the
Trust Fund.
(d) If the claim is wholly or partially denied, the claims
official shall, within ninety days (or such longer period as may be
reasonably necessary), endeavor to provide the claimant with written
notice of the denial, setting forth, in a manner calculated to be
understood by the claimant
(i) the specific reason or reasons for the denial;
(ii) specific references to pertinent Plan provisions
on which the denial is based;
(iii) a description of any additional material or
information necessary for the claimant to perfect the claim
and an explanation of why the material or information is
necessary; and
(iv) an explanation of the Plan's claim review procedure.
If the claim is neither granted nor denied within the 90 days, it
shall be treated as denied for purposes of this review procedure.
(e) Each claimant shall have the opportunity to appeal the
claims official's denial of a claim to the Plan Administrator in writing
for a full and fair review. The claimant or his or her duly authorized
representative
(i) may request a review upon written application to the
Plan Administrator (which shall be filed with it),
(ii) may review pertinent documents, and
(iii) may submit issues and comments in writing.
(f) The Plan Administrator may establish time limits within
which a claimant may request review of a denied claim which are reasonable
in relation to the nature of the benefit which is the subject of the claim
and other attendant circumstances, but which shall not be less than sixty
days after receipt by the claimant of written notice of denial of his or
her claim.
(g) The decision by the Plan Administrator upon review of a
claim shall be made not later than sixty days after its receipt of the
request for review, unless special circumstances require an extension of
time for processing or for a hearing, in which case a decision shall
be rendered as soon as possible, but not later than one hundred twenty
days after receipt of the request for review.
(h) The decision on review shall be in writing and shall
include specific reasons for the decision written in a manner calculated
to be understood by the claimant, with specific references to the pertinent
Plan provisions on which the decision is based.
(i) To the extent permitted by law, the decision of the claims
official (if no review is properly requested) or the decision of the Plan
Administrator on review, as the case may be, shall be final and binding on
all parties if warranted on the record and reasonably based on applicable
law and the provisions of the Plan and Trust Agreement, i.e., if not
arbitrary and capricious. No legal action for benefits under the Plan
shall be brought unless and until the claimant has exhausted his or her
remedies under this Section. To the extent permitted by law, costs and
fees incurred in defending the Plan or the Trust Fund in a legal action
may be charged against the Account of the Participant on whose behalf
such action was brought.
10.6 Effect of Plan Administrator Action
(a) All actions taken and all determinations made by the Plan
Administrator in good faith shall be final and binding upon all
Participants, their beneficiaries, the Trustee and any other person
interested in the Plan or Trust Fund. To the extent the Plan Administrator
has been granted discretionary authority under the Plan, its prior exercise
of such authority shall not obligate the Plan Administrator to exercise its
authority in a like fashion thereafter.
(b) The Plan shall be construed and interpreted by the Plan
Administrator in accordance with its terms and their intended meaning and
all such constructions and interpretations made by the Plan Administrator
in good faith shall be final and binding upon all Participants, their
beneficiaries, the Trustee and any other person interested in the Plan
or Trust Fund. If, due to errors in drafting or otherwise, a provision
does not accurately reflect its intended meaning, as demonstrated by
consistent interpretations by the Plan Administrator or other evidence of
intention, the provision shall be considered ambiguous and shall be
interpreted by the Plan Administrator in a fashion consistent with its
intent, such interpretation to be binding upon all persons as hereinabove
stated. The Plan Administrator, without the need for Board approval, shall
amend the Plan retroactively to cure any such ambiguity. This subsection
may not be invoked by a Participant, Beneficiary or any other person to
require the Plan to be construed or interpreted in a manner which is
inconsistent with its construction or interpretation by the Plan
Administrator.
10.7 Appointment of Committee
(a) The Plan Administrator may, but need not, appoint a
Committee (the "Committee") to administer the Plan; if such a Committee
is appointed, such Committee shall be deemed to have been expressly
delegated the powers and duties of the Plan Administrator, including but
not limited to the powers and duties described in Sections 10.1 and 10.6.
The Committee shall consist of at least three members. The members of the
Committee shall be appointed pursuant to procedures specified by the Plan
Administrator. A person appointed shall become a member of the Committee by
filing a written notice of acceptance with the Plan Administrator. A
member of the Committee may resign by delivering a written notice of
resignation to the Plan Administrator. The Plan Administrator may remove
any member (with or without cause) by delivering a written notice of removal
to such member. Resignation or removal shall be effective on the date
specified. The Trustee shall be promptly notified of the membership
(and of any changes in the membership) of the Committee, and of the
members of the Committee authorized to give directions to the Trustee on
behalf of the Committee. The Trustee shall also be provided with specimen
signatures of each Committee member. Vacancies in the membership of
the Committee shall be filled promptly by the Plan Administrator.
(b) The Committee shall choose a Secretary who shall keep minutes
of the Committee's proceedings and all records and documents pertaining to
the Committee's administration of the Plan. Any action of the Committee
shall be taken pursuant to a majority vote, or to the written consent of a
majority (which may be executed subsequent to the effective date of the
action), of its members and their action shall constitute the action of
the Committee and be as binding as if all members had joined in the action.
A quorum of the Committee shall consist of a majority of the members. The
Chairman and the Secretary may execute any certificate or other written
direction on behalf of the Committee. The Trustee or third persons dealing
with the Committee may conclusively rely upon any certificate or other
written direction signed by the Chairman or the Secretary which purports to
have been duly authorized by the Committee.
(c) A member of the Committee shall not vote or act upon any
matter which relates Solely to such person as a Participant or upon any
other matter in which the member has an interest which may materially
affect such member's best judgment as a fiduciary. If a matter arises
affecting one of the members of the Committee, as described in the
previous sentence, and the other members of the Committee are unable to
agree as to the disposition of such matter, the Plan Administrator shall
appoint a substitute member of the Committee in place of the affected
member for the sole purpose of deciding the matter.
(d) The Committee, if one has been appointed, shall act in lieu
of the Plan Administrator in matters of day to day administration of the
Plan, and references within the Plan to the Plan Administrator shall mean
the Committee whenever appropriate. Conversely, references within the
Plan to the Committee shall mean the Plan Administrator whenever
appropriate.
ARTICLE XI
AMENDMENT AND TERMINATION OF THE PLAN
11.1 Amendments
(a) The Employer reserves the right to amend the Plan
prospectively or retroactively at any time. No amendment shall divert
any assets of the Plan to any purpose other than the exclusive benefit
of the Participants or their Beneficiaries. No amendment shall decrease
the Vested percentage or amount of a Participant's Account or, to the
extent prohibited by Code Section 411(d)(6)(B), reduce or eliminate any
subsidy, early retirement benefit or optional benefit form.
(b) All amendments shall be adopted in writing by resolution of
the Board of Directors, by the Plan Administrator in accordance with
powers delegated to it by resolutions of the Board of Directors, or, in
the case of an amendment that does not substantially alter the nature
or expense of the Plan, by the Plan Administrator without approval by
the Board; however, the Committee may not amend or terminate the Plan.
(c) Any material modification of the Plan by amendment or
termination shall be communicated to all interested parties and the
Secretaries of Labor and the Treasury in the time and manner required
by law.
(d) No Plan amendment, unless it expressly provides otherwise,
shall be applied retroactively to increase the Vested percentage of a
former Participant whose Employment terminated before the date the
amendment became effective unless and until he or she again becomes a
Participant and additional Employer contributions are allocated to the
Participant.
(e) No Plan amendment, unless it expressly provides otherwise,
shall be applied retroactively to increase the amount of Service credited
to any person for Employment before the date the amendment became effective.
(f) Except as provided in subsections (d) and (e), all rights
under the Plan shall be determined under the terms of the Plan as in effect
at the time the determination is made.
11.2 Termination of Plan; Discontinuance of Contributions
(a) The Plan is intended to be a permanent program, but an
Employer shall have the right at any time to declare the Plan terminated
completely as to it or as to any of the Employer's divisions, subsidiaries,
facilities or any other operational units.
(b) If the Plan Administrator determines in its sole discretion
that the Plan has been terminated partially or completely, within the meaning
of regulations under Code Section 411, the Plan Administrator shall determine
the date of such termination and who has been affected by the
termination. The Accounts of all persons affected by the termination who
were Employees on the date thereof shall become fully Vested. In addition,
the Plan Administrator may, in a non-discriminatory manner, vest the Accounts
of a group of Participants in full because they are affected by a business
divestiture, layoff or other similar transaction, in which case the partial
termination rules set forth in this Section shall apply (even when a true
"partial termination" has not occurred). If the Plan is being completely
terminated, the nonvested portion of the Account of each person who is not
then an Employee shall be forfeited (except as otherwise required by law).
These forfeitures shall first be applied as corrective contributions in the
manner prescribed in Section 12.9. Any balance remaining will next be applied
to costs of administering and/or terminating the Plan, and only then allocated
to all other Participants as of the termination date in accordance with
Section 5.3, unless otherwise specified by the Plan Administrator. However,
the Accounts of all affected persons, to the extent Vested, shall remain
payable under the terms set forth in the Plan, except as provided in
subsection (c).
(c) In connection with a termination or partial termination
(whether actual or deemed) of the Plan or thereafter, the Plan Administrator
may elect to discharge all of the Plan's obligations to affected Participants.
In such event, the Plan Administrator shall cause the following actions to
take place:
(i) An allocation of amounts being held under Section
5.5(c) shall be made in accordance with such Section if a complete
Plan termination is taking place;
(ii) The Plan Administrator shall direct the Trustee to
liquidate the necessary portion of the Trust Fund and distribute
affected Accounts, less proportionate shares of the expenses of
termination, to the persons entitled thereto.
(d) An Employer shall have the right at any time to discontinue
contributions to the Plan completely or as to any of such Employer's
divisions, subsidiaries, facilities or other operational units. A complete
discontinuance of contributions shall constitute a plan termination
with respect to affected Employees and the rules of subsections (a), (b) and
(c) shall apply.
(e) This Section has been included in the Plan to meet requirements
of federal law. It is not intended to create, nor shall it be construed as
creating, any contractual rights whatsoever.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Payments
(a) In the event any amount becomes payable under the Plan to a
minor or other individual whom the Plan Administrator considers to be unable
to give a valid receipt for the payment by reason of physical or mental
condition, the Plan Administrator may direct that payment be made to any
person found by the Plan Administrator to have assumed the care of the
individual in question. Any such payment shall constitute payment by the
Plan and result in a full release and discharge of the Trustee, the Plan
Administrator, the Employer and their officers, directors, employees,
agents and representatives.
(b) Payment of benefits to the person entitled thereto may be
made by a check sent first class mail, address correction requested, to
the last known address on file with the Plan Administrator. If within
six months from the date of issuance of the check the payment letter
cannot be delivered to the person entitled thereto or the check has
not been negotiated, the services of the Social Security Administration
shall be used for assistance in locating such person. If such
person still cannot be located within three years after the benefit
becomes payable, the remaining account balance will be distributed into
a bank account established on behalf of such person. However, effective
January 1, 1992, the remaining account balance shall be treated as
forfeited and shall be allocated or used to pay expenses of administration,
as specified by the Plan Administrator; if the person to whom the benefit
became payable subsequently appears and identifies himself or herself to the
satisfaction of the Plan Administrator, the amount forfeited
(without earnings thereon) shall be contributed to the Plan by the Company
in accordance with Section 12.9 and subsequently distributed to the person
entitled thereto. The right of any person to restoration of a benefit which
was forfeited pursuant to this Section shall cease upon termination of
this Plan.
(c) Payments to Participants or Beneficiaries shall be postponed by
the Trustee or Plan Administrator until any anticipated taxes or expenses or
amounts to be paid under a qualified domestic relations order have been
paid in full or until it is determined that such charges will not be
imposed.
(d) If, pursuant to Section 12.1(b), the Plan Administrator retains
at the Plan's expense a private investigator or other person or service to
assist in locating a missing person, all costs incurred for such services
shall be paid by the Plan but charged to the Account to which the missing
person was entitled (which shall be reduced by the amount of the costs
incurred), except as the Plan Administrator may otherwise direct.
12.2 Consolidation or Merger of Companies
In the event of the consolidation or merger of the Employer with or into
any other business entity, or the sale by the Employer of substantially all
of its assets, the successor may continue the Plan by adopting the same by
resolution of its board of directors or agreement of its partners or
proprietor and by executing a proper supplemental agreement to the Trust
Agreement with the Trustee, if required by the Trustee. If, within ninety
days from the effective date of a consolidation, merger or sale of assets,
the new corporation, partnership or proprietorship does not adopt the Plan,
the Plan shall be terminated in accordance with Section 11.2.
12.3 Plan Mergers and Spinoffs
The Plan shall not be merged or consolidated with any other plan, nor shall
its assets or liabilities be transferred to any other plan, unless immediately
after the merger, consolidation or transfer (if the plan in question were then
terminated), each Participant in this Plan would have a benefit which is equal
to or greater in amount than the benefit the Participant would have been
entitled to under this Plan had this Plan been terminated immediately before
the merger, consolidation or transfer. This provision does not prohibit the
commingling of assets of this Plan and any other qualified plan for
investment purposes.
12.4 Adoption of Plan to Cover Other Companies, Facilities or Groups
Any related company described in Section 12.5 may, with the approval of
the Plan Administrator, adopt the Plan (as a whole company or as to any one
or more divisions, subsidiaries, facilities, etc.) effective as of the day it
specifies. Adoption shall be accomplished by action of the adopting company
(without Board of Directors approval) or resolution of the adopting company's
own board of directors or agreement of its partners, which action must be
approved by the Plan Administrator in order to be effective. The same
procedure shall be followed when an Employer that has adopted the Plan wishes
to change the positions, facilities, etc. covered by this Plan.
12.5 Related Companies
(a) "Related company" means and includes (i) each organization,
whether or not incorporated, which is a service organization and is a
member of an affiliated service group (within the meaning of Section 414(m)
of the Code) of which the Company is a member, (ii) all corporations which
are members of a controlled group of corporations (within the meaning of
Section 414(b) of the Code) of which the Company is a member, (iii) each
trade or business, whether or not incorporated, which is under common
control (within the meaning of Section 414(c) of the Code) with the
Company and (iv) any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code; provided
that no such corporation, organization, trade or business shall be considered
to be a "related company" at any time prior to or subsequent to the period
of time during which it meets the foregoing definition; and provided that
the status of being employed by a "related company" shall only pertain to an
individual during the period of time when his employer is a "related company,
" and not to period(s) of time prior or subsequent to its "related company"
status, unless the Plan shall otherwise expressly provide.
For purposes of determining the maximum annual addition to a
Participant's Account, Code Sections 414(b) and (c) shall be applied as
modified by Code Section 415(h). The Plan Administrator may allow companies
(e.g., because they are less than eighty percent-owned subsidiaries or joint
ventures) to adopt the Plan under the procedure described in Section 12.4.
Any such company which adopts the Plan shall thereafter be treated as an
"Employer," as shall any other entity which is "related" to such company
under the rules set forth in this subsection.
(b) If this Plan is adopted by a company which is not "related"
to the Employer under Code Sections 414(b), (c), (m) or (o), the following
special rules shall apply, as required by Code Section 413(c):
(i) Service with such company (or companies related to
it under subsection (a)) shall be recognized by all Employers for
all participation and vesting purposes of this Plan, and vice versa.
(ii) Deductions with respect to the Plan under Code
Section 404 shall be allocated among all Employers in a reasonable
fashion, in accordance with applicable law under Code Section 413(c).
(iii) Discrimination in participation or benefits (including
the testing of Deferrals for purposes of non-discrimination) or the
occurrence of a partial or complete Plan termination shall be
determined separately for each Employer or group of Employers
which constitutes a single employer under Code Section 414(b),
(c), (m) or (o).
(iv) If the Plan is disqualified as to any one Employer
it shall be disqualified as to all Employers.
12.6 Termination of Employment
(a) A person's Employment shall not terminate on account of an
authorized leave of absence, sick leave or vacation, or on account of a
military leave described in subsection (b), a direct transfer between the
Employers or a temporary layoff for lack of work. However:
(i) continuation of a temporary layoff for lack of work
for a duration in excess of the number of months (not to exceed 12)
allowable under applicable personnel policies of the Employer shall
be considered a discharge effective as of the end of the last
day of such allowable period;
(ii) failure to return to work upon expiration of any
leave of absence, sick leave or vacation or within the number of
days allowable under applicable personnel policies of the Employer
after recall from a temporary layoff for lack of work shall be
considered a resignation effective as of the expiration of such
leave of absence, sick leave, vacation or layoff;
(iii) if a Participant transfers from a position covered by
this Plan to a position which is not covered by this Plan with an
Employer which is not a related company and the conditions set forth
below are met, the Participant shall be considered to have terminated
Employment upon the date of such transfer and shall be entitled to
have his or her Account distributed in accordance with Article VIII:
(A) the transferor and transferee companies are
different corporations;
(B) the Participant's job functions and
responsibilities are significantly different after the transfer
than before;
(C) the Participant's Account was fully Vested when
the transfer occurred; and
(D) the Participant requests distribution of his
or her Account within the time limits prescribed by the Plan
Administrator.
A Participant whose Account is not fully Vested when the transfer occurs
but who otherwise meets all of the foregoing conditions shall be entitled to
distribution of his or her Account on the earlier of the date the Account
becomes fully Vested or the date the Participant's Employment with all
related companies terminates. This distribution shall be made within the
time limits set forth in Section 8.2.
(b) Any Employee who leaves the Employer directly to perform
service in the Armed Forces of the United States or in the United States
Public Health Service under conditions entitling the Employee to
reemployment rights, as provided in the laws of the United States, shall
be on military leave. An Employee's military leave shall expire if such
Employee voluntarily resigns from the Employer during the leave or if he
or she fails to make application for reemployment within the period
specified by such law for the preservation of reemployment rights. In
such event, the individual's Employment shall terminate by resignation
on the day the military leave expired.
(c) A Participant's Employment shall be considered terminated
for all purposes of this Plan, including distribution-triggering purposes,
if the Participant ceases to be employed by the Employer and all related
companies, as determined under Section 12.5, because of the sale of a
business by such companies (whether the sale is a stock sale or asset
sale), unless the sales agreement or related documents expressly provide
to the contrary. Employment terminated under the preceding sentence
shall be considered as having terminated on account of a "separation from
service" within the meaning of Code Section 401 or 402 without regard to
whether the termination was in fact a "separation from service."
(d) If an Employee is absent from work because of such
individual's pregnancy, the birth of a child, placement of an adopted
child, or caring for an adopted or natural child following birth or
placement, the individual shall not be treated as having incurred a Break
in Service in the Plan Year in which the absence begins or, if the
individual would not otherwise have suffered a Break in Service during
that Plan Year, in the following Plan Year.
(e) No credit shall be given under subsection (d) unless a
Participant files a written request which establishes valid reasons
for the absence, as determined by the Plan Administrator.
(f) Except to the extent that a maternity or paternity
absence constitutes an authorized leave of absence from the Employer under
applicable personnel policies, an Employee who is absent from work for
reasons of maternity or paternity shall be deemed to have terminated
Employment for all purposes of this Plan other than the special rules
in subsection (d).
(g) During any period of time when a Participant fails to meet
the definition of an Employee because he is included in an employee unit
covered by a collective bargaining agreement (not violated by this
sub-paragraph (g)) which does not provide for Plan coverage of
bargaining unit numbers, he shall be considered an Inactive Participant,
and no contributions will be allocated to his Account for such period.
However, during such period an Inactive Participant shall continue to
be treated as a Participant for other Plan purposes including the
periodic adjustments to Accounts of Participants described in
Section 6.1(b).
12.7 Determination of Hours of Service
(a) An Employee shall be credited with one hour of Service for:
(i) Each hour (straight-time or overtime) for which he
or she is paid or entitled to payment by the Employer for the
performance of services as an Employee. During any periods in
which an individual is not compensated on an hourly basis, he shall
be credited with the hours of Service (as designated on his
payroll check) for each payroll period in which he receives any
compensation, regardless of amount.
(ii) Each hour in or attributable to a period of time
during which the individual performs no such duties (irrespective
of whether his or her Employment has terminated) due to a vacation,
holiday, illness, incapacity (including pregnancy or disability),
layoff, jury duty, military duty or a leave of absence, for which
he or she is paid or entitled to payment by the Employer, whether
direct or indirect; provided, however, that
(A) no more than five hundred and one hours of
Service shall be credited under this paragraph to an Employee on
account of any such period, and
(B) no such hours shall be credited to an
Employee if attributable to payments made or due under
a plan maintained solely for the purpose of complying
with applicable worker's compensation, unemployment
compensation or disability insurance laws or to a payment
which solely reimburses the Employee for medical or medically-
related expenses incurred by the Employee.
(iii) Each hour not credited under paragraphs (i) and (ii)
for which the individual is entitled to back pay, irrespective of
mitigation of damages, whether awarded or agreed to by the Employer.
(b) The calculation of hours of Service under subsections (a)(ii)
and (a)(iii) shall be made in accordance with 29 C.F.R. Section
2530.200b-2(b).Each hour of Service shall be attributed to the
Plan Year or initial eligibility year in which it occurs except
to the extent that, in accordance with 29 C.F.R. Section
2530.200b-2(c), the Employer credits such hour to another
computation period.
(c) For Plan Years beginning before 1992 and solely for purposes
of determining eligibility, an Employee shall be credited with 190 hours
of Service for each month during which he or she earned at least one hour of
Service under Section 12.7(a)(i).
12.8 Top Heavy Rules
(a) If this Plan is or ever becomes "top heavy," as determined
under subsection (b), the following special rules shall apply:
(i) If the Plan is top heavy for a Plan Year,
each Participant who is an Employee (but not a key employee) on
the last day of the Plan Year shall receive an allocation of
Employer contributions (but not including his or her Deferrals
or Matching Employer Contributions) and forfeitures at least
equal to the product of
(A) the Participant's earnings while an Active
Participant during the Plan Year (as determined under
Section 5.5(d)(iii) except as limited by paragraph
(ii) below), and
(B) the lesser of (1) three percent or (2) the
allocation of Employer contributions (including Deferrals)
and forfeitures for the Plan Year to the most
highly-benefitted key employee (as defined in subsection
(c)) who is a Participant, expressed as a percentage of
that individual's earnings, as determined under
subparagraph (A).
If a Participant in this Plan is also covered by other
defined contribution plans maintained by the Employer for the
same Plan Year, this Plan and all such other defined contribution
plans shall be aggregated in determining whether the minimum benefit
required under Code Section 416(c)(2) is provided for the Participant
under this Plan. If a Participant in this Plan is also covered by a
defined benefit plan maintained by the Employer for the same Plan
Year and the minimum benefit required under Code Section 416(c)(1)
is being provided under such other plan for the Plan Year if it
is not provided under this Plan, minimum benefits under this paragraph
need not be provided to the Participant if the Plan Administrator so
elects.
(ii) All Employer-provided benefits accruing through the
end of the Plan's last top heavy Plan Year shall vest in accordance
with the following schedule:
Years of Vested
Vesting Service Percentage
----------------------- --------------------
less than 3 3 or more
0% 100%
A former Employee's Vested percentage shall not be determined
under this paragraph unless he or she again becomes an Employee before
the nonvested portion of his or her Matching Employer Contribution
Account is permanently forfeited under the terms of this Plan. When
the Plan ceases to be top heavy, vesting in Employer contributions
accruing thereafter shall be determined in accordance with the
regular vesting provisions of the Plan. However, to the extent
required by applicable law, a Participant with at least three years
of Service when the Plan ceases to be top heavy shall be entitled to
elect, in accordance with Regulation Section 1.411(a)-8T(b), to
have the Vested percentage of Employer contributions accruing
thereafter determined under this paragraph rather than under
the regular vesting provisions of the Plan. The period during
which the election may be made shall commence with the date the
Plan ceases to be top heavy and shall end on the later of (i)
sixty days after such date, or (ii) sixty days after the
Participant is issued written notice of the right to make
the election by the Plan Administrator. The Plan
Administrator shall establish appropriate procedures consistent
with the other vesting provisions of this Plan for administering
this special vesting rule.
(b) This Plan is "top heavy" for a Plan Year commencing after
1983 if, as of the last day of the preceding Plan Year or, in the case
of the first Plan Year, the last day of such Plan Year (the "determination
date"), the amount credited to the Accounts of key employees (as defined in
subsection (c)) exceeds sixty percent of such amounts credited to all
Participant Accounts. Top heavy status shall be determined in accordance
with Code Section 416 and regulations issued under it (Code Section 416
prescribes the following rules: The Account of (1) a former key
employee or (2) any Participant who has not performed any services for
the Employer during the five year period ending on the determination date
shall not be included in determining whether the Plan is top heavy. The
amount credited to an Account shall be determined as of the last
valuation date coincident with or next preceding the determination date,
and shall include contributions not yet made but to be allocated as of the
determination date. For purposes of determining whether this Plan is top
heavy, the aggregate distributions (without interest thereon) made under
the Plan to a Participant other than a former key employee during the
five year period ending on the determination date shall be taken into
account. Deductible (IRA-type) contributions, or rollovers (or similar
transfers) initiated by the Participant and made after December 31, 1983,
shall be ignored in determining whether this Plan is top heavy, except
as otherwise provided in applicable Regulations. Notwithstanding the
foregoing, if, as of the determination date described above, this
Plan is required to be part of an "aggregation group," this Plan shall be
top heavy if the group is top heavy and shall not be top heavy if the group
is not top heavy. An "aggregation group" shall include all active or
discontinued (within the last five Plan Years) plans of the Employer in
which a key employee participates and all other plans of the Employer which
enable any such plan to meet the requirements of Code Section 401(a)(4)
or 410. Distributions made within the five Plan Years ending on the
determination date from a terminated and liquidated plan shall be included
in the aggregation group if the terminated plan would have been required
to be included in the group had the plan not been terminated. The Employer
may treat any plan, including discontinued plans, not required to be
included in the aggregation group as part of that group if the inclusion
of the plan would not prevent the aggregation group from meeting the
requirements of Code Section 401(a)(4) or 410. The rules set forth above
for determining whether this Plan is top heavy shall be applied with
respect to the sum of benefits provided under all plans in the aggregation
group to determine whether the group is top heavy. For purposes of this
Section 12.8, XIII(A), the accrued benefits for all defined benefit plans
required or permitted to be aggregated with this Plan shall mean the
actuarial equivalent (which shall be the same for all plans being aggregated)
of the accrued benefit determined as of the actuarial valuation date
preceding or coinciding with the determination date. If there is no method
of computing accrued benefits that uniformly applies for all such plans, then
solely for the purposes of this Section 12.8, the accrued benefit of an
employee other than a key employee shall be determined as if his benefits
accrued not more rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Section 411(b)(1)(C) of the Code.)
(c) An Employee shall be a "key employee" if, during the Plan Year
in question or any of the four preceding Plan Years, he or she is or was
(i) a corporate officer of the Employer or a related
company having an annual compensation greater than 50 percent of
the adjusted equivalent of the amount in effect under Code Section
415(b)(1)(A) for the Plan Year in question;
(ii) one of the ten Employees owning (or considered as
owning within the meaning of Code Section 318) the largest interest
in the Employer and having an annual compensation of more than the
adjusted equivalent of $30,000 for the Plan Year in question;
(iii) a more than five percent owner of the Employer; or
(iv) a more than one percent owner of the Employer having
an annual compensation from the Employer of more than $150,000.
The number of officers of the Employer treated as key employees
under paragraph (i) shall be limited as follows, and further provided
that employees described in Section 414(q)(8) of the Code shall be excluded:
The maximum number of
If the total number officers treated as key
of Employees is employees shall not exceed
------------------------------ -----------------------------
0 - 30 3
31 - 500 10 percent of total Employees
501 or more 50
In determining under paragraph (ii) which Employees own the largest interests
in the Employer, if two Employees have the same interest, the Employee having
the greatest annual compensation for the Plan Year in question shall be treated
as owning the greater interest. A Beneficiary of a key employee or a former
key employee shall also be treated as a key employee or former key employee,
respectively. For all purposes of this subsection, "compensation" shall have
the same meaning as in Section 414(q)(7) of the Code. For all purposes of this
subsection, except for calculation of ownership interests under paragraphs
(ii), (iii) and (iv), the Employer and all related companies described in
Section 12.5 shall be treated as a single employer. Determinations under this
subsection shall be made in accordance with Code Section 416(i) and applicable
Treasury Regulations.
12.9 Corrective Contributions
If it becomes necessary to correct mistakes made in amounts distributed
from or credited to Accounts, or to restore the portion of a Participant's
Account which was forfeited pursuant to any provision of the Plan,
correction or restoration shall first be made out of Employer contributions
and forfeitures and then out of Trust Fund earnings for the Plan Year in
question, but only to the extent that such amounts have not already been
allocated under the provisions of the Plan. Any additional amounts needed
may be provided by a special contribution to the Plan which the Employer,
at its sole discretion (but subject to the applicable limitations on
deductible contributions and maximum annual additions), may elect to make.
Any special contribution shall be allocated or credited in the fashion
specified by the Plan Administrator.
12.10 Alienation
The rights of a Participant or Beneficiary under the Plan shall not be
subject to any claim of any creditor nor to attachment or garnishment or other
legal process by any creditor. A Participant or Beneficiary shall not have the
right to alienate, anticipate, commute, pledge, encumber or assign any of the
benefits or payments or proceeds which the individual may expect to receive,
contingently or otherwise, under the Plan. The provisions of this Section
shall not preclude any assignment or alienation expressly permitted under
applicable pension plan law or other provisions of the Plan.
12.11 Division of Benefits by Domestic Relations Orders
(a) This Plan will follow the terms of any qualified domestic
relations order issued with respect to a Participant. However, the Plan
will only follow orders which meet all of the requirements of subsection
(b) or subsection (c). Subsection (c) establishes an optional
standardized procedure.
(b) A "qualified domestic relations order" is any judgment,
decree or order, including the approval of a property settlement
agreement, provided that:
(i) the order relates to the provision of child
support, alimony or marital property rights and is made pursuant
to state domestic relations or community property laws;
(ii) the order creates or recognizes the existence
of an alternate payee's right to receive all or a portion of a
Participant's Account;
(iii) the order specifies the name and last known mailing
address of the Participant and each alternate payee covered by the
order;
(iv) the order precisely specifies the amount or
percentage of the Participant's Account to be paid to each alternate
payee or the manner in which the amount or percentage is to be
determined;
(v) the order specifies the number of payments or the
period to which the order applies;
(vi) the order specifically names this Plan as the plan
to which the order applies;
(vii) the order does not require this Plan to provide any
type of benefits or form of benefits not otherwise provided under
this Plan; and
(viii) if the order requires that payments to the alternate
payee commence before they commence with respect to the Participant,
the order specifies that payments will not commence earlier than the
earliest retirement age applicable to the Participant, generally
age fifty (50).
Subsection (d) sets forth the procedures under which the Plan
Administrator shall determine whether a domestic relations order properly
qualifies.
(c) The Plan Administrator on request shall furnish a standard
form of qualified domestic relations order to a Participant or any other
person. This order may provide for an immediate lump sum payment, made
within sixty days after the close of the Plan Year and based upon the
Participant's Service as of the close of such Plan Year, of the present
value of the amount to which the alternate payee is determined to be
entitled. If this form is used without substantial modification and
is incorporated in a judgment, decree or order described in subsection
(b)(i) which on its face appears to be valid, the Plan Administrator
shall treat it as a qualified domestic relations order and shall pay
benefits to the alternate payee in accordance with its terms. If this
procedure is not followed, the alternate payee (1) must wait until the
time described in subsection (b)(viii) before benefits which are not in
pay status can become payable to the alternate payee and (2) cannot
use any special forms of benefit payment authorized in the standard
form of order. Any special benefit form provisions in standard domestic
relations orders adopted by the Plan Administrator shall be authorized as
benefit options under this Plan, but only as to alternate payees
for whom the standard order has been used.
(d) The Plan Administrator shall not treat any judgment,
order or decree as a "qualified domestic relations order" unless it meets
all of the requirements set forth in subsection (b) or (c) and is
sufficiently precise and unambiguous so as to preclude any interpretative
disputes. If the order meets these requirements, the Plan Administrator
shall follow the terms of the order whether or not this Plan has been joined
as a party to the litigation out of which the order arises. Upon receipt
of a domestic relations order, the Plan Administrator shall notify the
Participant and alternate payee of (1) its receipt of the order and (2)
its need to determine the qualified status of the order in accordance with
subsection (b) or (c). Any expenses attributable to determining the
qualified status of an order, other than the standard order referenced
in subsection (c), shall, to the extent specified by the Plan Administrator,
be charged against the amount due the alternate payee. The alternate payee
may designate a representative to receive copies of future notices with
respect to the qualified status of the order. To the extent an order
calls for benefits to be paid to an alternate payee before the qualified
nature of the order is determined, the Plan Administrator shall separately
account for the benefit payments affected by the order. This account shall
be administered in accordance with the rules set forth in Section
206(d)(3)(H) of ERISA.
12.12 Duty to Provide Data
(a) Every person with an interest in the Plan or claiming
benefits under the Plan shall furnish the Plan Administrator with such
documents, evidence or other information as the Plan Administrator
considers necessary or desirable for the purpose of administering the Plan.
The Plan Administrator shall postpone payment of benefits until such
information and such documents, evidence or information have been furnished.
(b) Every person participating in or claiming a benefit under
this Plan shall give written notice to the Plan Administrator of his or
her post office address and each change of post office address. Any
communication, statement or notice addressed to such a person at his or her
latest post office address as filed with the Plan Administrator will, on
deposit in the United States mail with postage prepaid, be as binding upon
such person for all purposes of the Plan as if it had been received, whether
actually received or not. If a person fails to give notice of his or her
correct address, the Plan Administrator, the Employer and Plan fiduciaries
shall not be obliged to search for, or to ascertain, his or her whereabouts
unless otherwise required by applicable law or by other provisions of this
Plan.
(c) If benefits which are otherwise currently payable cannot be
paid to the person entitled to the benefits because the individual has
failed to comply with this Section or other Plan provisions relating to
claims for benefits, any unpaid past due amount shall be subject to the
procedures outlined in Section 12.1(b).
12.13 Limitation on Rights of Employees
The Plan is strictly a voluntary undertaking on the part of the Employer
and shall not constitute a contract between the Employer and any Employee, or
consideration for, or an inducement or condition of, the employment of an
Employee. Except as otherwise required by law, nothing contained in the Plan
shall give any Employee the right to be retained in the service of the
Employer or to interfere with or restrict the right of the Employer, which
is hereby expressly reserved, to discharge or retire any Employee at any time,
with or without cause. Except as otherwise required by law, inclusion under
the Plan will not give any Employee any right or claim to any benefit
hereunder except to the extent such right has specifically become fixed
under the terms of the Plan and there are funds available therefor in the
hands of the Trustee. The doctrine of substantial performance shall have
no application to Employees, Participants or Beneficiaries. Each condition
and provision, including numerical items, has been carefully considered and
constitutes the minimum limit on performance which will give rise to the
applicable right.
12.14 Service of Process
The Chairman of the La-Z-Boy Chair Company Central Board of Administration
is hereby designated as agent for the service of legal process on the Plan.
The address is: 1284 N. Telegraph Road, Monroe, Michigan 48161-9983.
12.15 Governing Law
The Plan and Trust shall be interpreted, administered and enforced in
accordance with the Code and ERISA, and the rights of Participants, former
Participants, Beneficiaries and all other persons shall be determined in
accordance therewith; provided, however, that to the extent state law is
applicable, the laws of the State of Michigan shall apply.
12.16 Plurals, etc.
Where the context so indicates, the singular shall include the plural and
vice versa. Similarly, pronouns of any gender shall be deemed synonymous.
12.17 Titles
Titles are provided for convenience only and are not to serve as a basis
for interpretation or construction of the Plan.
12.18 References
Unless the context clearly indicates to the contrary, a reference to a
Plan or Trust provision, statute, regulation or document shall be construed as
referring to any subsequently enacted, adopted or executed counterpart.
Adopted by the Board of Directors
of La-Z-Boy Chair Company October 2, 1989
Amended and Restated by the Board of
Directors of La-Z-Boy Chair Company July 31, 1992
Amended and Restated by the Board of
Directors of La-Z-Boy Chair Company November 8, 1993
Amended by the Central Board of
Administration of La-Z-Boy Chair Company March 2, 1995
EXHIBIT I
Plan Rules
As permitted by Sections 2.18 and 10.1 of the Plan, the Plan Administrator
may adopt Plan Rules for convenience in the administration and interpretation
of the Plan. These Rules may be changed from time to time. The Plan Rules
shall consist of the Rules set forth in this document, in administrative
forms adopted by the Plan Administrator or in written or oral policy
decisions or interpretations made by the Plan Administrator.
Although the Plan Administrator has broad powers to establish
administrative procedures and to interpret the Plan by means of Plan Rules, the
following Plan provisions, among others, expressly contemplate the
establishment of Plan Rules:
(a) Section 4.1 (Procedures for making and changing Deferral elections)
(b) Section 4.4 (Rules governing hardship distributions from Deferred
Income Accounts)
(c) Section 4.5 (Rules governing withdrawals from Deferred Income
Accounts after age 59-1/2)
(d) Section 6.2 (Determination of earnings factor)
(e) Section 6.7 (Choice among investment funds)
(f) Section 6.9 (Loans to Participants)
(g) Section 8.1 (Benefit distribution elections)
Amendment and Restatement
of the
LA-Z-BOY CHAIR COMPANY
MATCHED RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE
AND
SECTION PROVISIONS PAGE
I. Purpose.........................................I-1
II. Definitions
2.1 Account................................................II-1
2.2 Active Participant.....................................II-1
2.3 Beneficiary............................................II-1
2.4 Board of Directors.....................................II-2
2.5 Break in Service.......................................II-2
2.6 Code...................................................II-2
2.7 Compensation...........................................II-2
2.8 Deferral...............................................II-5
2.9 Deferred Income Account................................II-5
2.10 Early Retirement Date..................................II-5
2.11 Employee...............................................II-5
2.12 Employer...............................................II-6
2.13 Employment.............................................II-7
2.14 ERISA..................................................II-7
2.15 Normal Retirement Age..................................II-7
2.16 Normal Retirement Date.................................II-8
2.17 Participant............................................II-8
2.18 Plan...................................................II-8
2.19 Plan Administrator.....................................II-8
2.20 Plan Rules.............................................II-8
2.21 Plan Year..............................................II-8
2.22 Retirement.............................................II-9
2.23 Service................................................II-9
2.24 Trust or Trust Fund...................................II-11
2.25 Trust Agreement.......................................II-11
2.26 Trustee...............................................II-11
2.27 Vested................................................II-12
2.28 Vesting Service.......................................II-12
III. Employee Participation
3.1 Requirements for Participation.......................III-1
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IV. Employee Contributions
4.1 Deferral Election.....................................IV-1
4.2 Special Deferral Limits...............................IV-3
4.3 Fail-Safe Contributions...............................IV-8
4.4 Hardship Distributions................................IV-9
4.5 Withdrawals at Age 59-1/2.............................IV-11
4.6 Rollover Contributions; Transfers.....................IV-11
4.7 Highly Compensated Employees..........................IV-16
V. Employer Contributions
5.1 Employer Contributions.................................V-1
5.2 Time of Contribution...................................V-4
5.3 Allocation of Employer Contributions...................V-5
5.4 Limitation on Employer Contributions...................V-5
5.5 Limitation on Allocations..............................V-6
5.6 Combined Defined Contribution\
Defined Benefit Plan Limit...........................V-10
5.7 Special Limitation on Allocations
under Code Section 401(m)............................V-14
5.8 Multiple Use of Alternative
Limitation...........................................V-19
5.9 Return of Contributions................................V-20
VI. Trust Fund Earnings and
Investments
6.1 Value of Accounts.....................................VI-1
6.2 Earnings Factor.......................................VI-2
6.3 Rules for Valuing Trust Assets........................VI-2
6.4 Unallocated Amounts...................................VI-4
6.5 Special Rule for Variable Account
Balances............................................VI-4
6.6 Special Rule for Earmarked
Investments.........................................VI-4
6.7 Investment Funds......................................VI-5
6.8 Investment in Insurance...............................VI-6
6.9 Loans to Participants.................................VI-6
6.10 Special Rules Applicable to the
La-Z-Boy Stock Fund.................................VI-11
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SECTION PROVISIONS PAGE
VII. Vesting
7.1 Vesting of Matching Employer
Contribution Accounts..............................VII-1
7.2 Accelerated Vesting of Matching
Employer Contribution Accounts;
Disability.........................................VII-1
7.3 Forfeitures upon Termination
of Employment......................................VII-2
7.4 Vesting Schedules for
Merged Plans.......................................VII-3
7.5 Additional Rules for Vesting Service.................VII-3
VIII. Benefits Upon Termination
of Employment
8.1 Distribution of Accounts on
Retirement........................................VIII-1
8.2 Distribution after Termination
of Employment.....................................VIII-3
8.3 Subsequent Allocations..............................VIII-4
8.4 Early Withdrawal Penalties .........................VIII-4
8.5 Joint and Survivor Annuity
Requirements......................................VIII-4
8.6 Required Distributions..............................VIII-5
8.7 Special Provisions for
Merged Plans......................................VIII-6
IX. Benefits Upon Death
9.1 Designation of Beneficiary............................IX-1
9.2 Distribution on Death.................................IX-1
9.3 Election of Payment Methods...........................IX-2
9.4 Time of Distribution..................................IX-3
X. Administration of the Plan
10.1 Duties of the Plan Administrator.......................X-1
10.2 Investments and Funding Policy.........................X-3
10.3 Delegation of Administrative
Responsibility.......................................X-3
10.4 Compensation, Indemnity and Liability..................X-4
10.5 Procedure for Resolving
Disputed Claims......................................X-6
10.6 Effect of Plan Administrator
Action...............................................X-8
10.7 Appointment of Committee...............................X-10
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XI. Amendment and Termination
of the Plan
11.1 Amendments..............................................XI-1
11.2 Termination of Plan;
Discontinuance of Contributions.......................XI-2
XII. Miscellaneous Provisions
12.1 Payments...............................................XII-1
12.2 Consolidation or Merger of Companies...................XII-3
12.3 Plan Mergers and Spinoffs..............................XII-3
12.4 Adoption of Plan to Cover Other
Companies, Facilities or Groups......................XII-4
12.5 Related Companies......................................XII-4
12.6 Termination of Employment..............................XII-6
12.7 Determination of Hours of Service......................XII-10
12.8 Top Heavy Rules........................................XII-11
12.9 Corrective Contributions...............................XII-18
12.10 Alienation.............................................XII-18
12.11 Division of Benefits By Domestic
Relations Orders.....................................XII-19
12.12 Duty to Provide Data...................................XII-22
12.13 Limitation on Rights of Employees......................XII-23
12.14 Service of Process.....................................XII-23
12.15 Governing Law..........................................XII-24
12.16 Plurals, etc...........................................XII-24
12.17 Titles.................................................XII-24
12.18 References.............................................XII-25
Exhibit I Plan Rules A-1