SALANT CORPORATION
LONG TERM SAVINGS AND INVESTMENT PLAN
AS AMENDED AND RESTATED
EFFECTIVE JANUARY, 1, 1989
SALANT CORPORATION
LONG TERM SAVINGS AND INVESTMENT PLAN
(As amended and restated effective January 1, 1989)
Salant Corporation hereby amends and restates the Salant
Corporation Long Term Savings and Investment Plan, the Manhattan
Industries Salary Savings Plan (the "Manhattan Plan") and the Denton
Mills, Inc. Employees Profit-Sharing Plan (the "Denton Plan") to comply
with requirements of the Tax Reform Act of 1986, the Revenue Act of
1987, the Technical and Miscellaneous Revenue Act of 1989, the
Unemployment Compensation Amendments of 1992 and the Revenue
Reconciliation Act of 1993 (the "Acts") effective as of January 1, 1989 with
respect to the Plan, February 1, 1989 with respect to the Manhattan Plan
and November 1, 1989 with respect to the Denton Plan, or with respect to
certain provisions, as of the pertinent effective dates contained in the
provisions of the Acts, and merges the Manhattan Plan and the Denton Plan
into the Plan effective as of March 1, 1992. It is intended that this Plan as
amended and restated will be qualified under Section 401(a) of the Internal
Revenue Code and that its designated contribution provisions will satisfy
the additional requirements of Section 401(k) of the Code.
Table of Contents
Title Page
Section 1 Definitions 1
Section 2 Membership 7
Section 3 Salary Deferral Contributions. 8
Section 4 Company Matching Contributions 10
Section 5 The Trust Fund. 14
Section 6 Vesting 19
Section 7 Maximum Contributions 21
Section 8 Distributions, Loans, and Withdrawals 23
Section 9 Administration of Plan 35
Section 10 Top-Heavy Plan Years 38
Section 11 Miscellaneous 43
Section 12 Conditional Adoption 45
Appendix A Adopting Employers 46
Section 1
Definitions
1.1 "Affiliate" means any corporation or unincorporated
business in control of, controlled by, or under common control with, the
Company within the meaning of Sections 414(b) and (c) of the Code and
any organization which is a member of an affiliated service group of which
the Company is a Member within the meaning of Section 414(m) of the
Code; provided, however, that, for the purposes of the limitations upon the
benefits of a member contained in Section 7, "Affiliate" status shall be
determined in accordance with Section 415(h) of the Code. Except to the
extent approved by the Board of Directors, a corporation or unincorporated
business shall not be deemed an Affiliate for any purpose under the Plan
with respect to any period before it becomes an Affiliate.
1.2 "Aggregate Compensation" means the total amount of
Compensation paid to Members with respect to a Plan Year.
1.3 "Board" means the Board of Directors of Salant
Corporation.
1.4 "Code" means the Internal Revenue Code of 1986 as
amended.
1.5 "Committee" means the person or persons appointed by
the Board to administer the Plan.
1.6 "Common Stock" means the common stock of Salant
Corporation.
1.7 "Company" means Salant Corporation and any other
Affiliate or other entity which, with the consent of the Board, has adopted
the Plan and any successor to such Company. Each participating Company
delegates all rights, powers, and duties, including amendment or termination
of the Plan, to Salant Corporation. Appendix A to the Plan lists the
Companies that have adopted the Plan and the effective date of such
adoption.
1.8 "Company Matching Contributions" for any Plan Year
means the sum of a Member's "Basic Matching Contribution" and "Bonus
Matching Contribution," if any, as provided in Section 4 of this Plan.
1.9 "Compensation" means the total wages within the
meaning of Section 3401(a) of the Code and all other payments of
compensation paid by the Company to an Employee for which the
Company is required to furnish the Employee a written statement under
Sections 6041(d), 6051(a)(3) and 6052 of the Code with respect to any
period of Service together with any salary deferral contributions made under
this Plan or any other employee plan qualified under Section 401(k) or
Section 125 of the Code, but excluding all of the following items (even if
includible in gross income): reimbursements or other expense allowances,
fringe benefits (cash and non-cash), moving expenses, deferred
compensation and welfare benefits, severance payments to former
Employees, and any amount in excess of the amount specified in Section
401(a)(17) of the Code (as amended by the Revenue Reconciliation Act of
1993 and as adjusted for increases in the cost of living by the Secretary of
the Treasury pursuant to Section 401(a)(17)(B)of the Code).
1.10 "Denton Plan" means the Denton Mills, Inc. Employees
Profit-Sharing Plan as it existed prior to March 1, 1992, the date of its
merger into the Plan.
1.11 "Effective Date" means July 1, 1983. The effective
date of this amendment and restatement is January 1, 1989, except as
otherwise specifically stated.
1.12 "Employee" means any person, including officers,
employed by the Company who is classified by the Company under
uniform rules as a regular, office, sales, security, supervisory or technical
employee, provided that no such person shall be an Employee if such
person is included in a unit of employees covered by a collective bargaining
agreement between employee representatives and the Company or an
Affiliate unless such agreement provides that such employees shall be
eligible to participate in the Plan.
1.13 "Entry Date" means January 1 and July 1 and, with
respect to an Employee hired after June 30, 1993, April 1 October 1.
1.14 "ERISA" means the Employee Retirement Income
Security Act of 1974, as most recently amended.
1.15 "Hour of Service" means (a) each hour for which an
Employee is directly or indirectly paid, or entitled to payment, by his
Employer for the performance of duties; (b) each hour for which an
Employee is directly or indirectly paid, or entitled to payment, by his
Employer for reasons other than the performance of duties; (c) each hour
for which back pay, irrespective of mitigation of damages, is either awarded
or agreed to by the Employer excluding any hour credited under (a) or (b);
and (d) each hour attributable to a period of service with respect to which a
Member is not paid or entitled to payment (including an approved leave of
absence). For purposes of paragraph (d) of this Section 1.15, the number of
Hours of Service attributable to any such period of service shall be
determined by the Committee on a basis consistent with the Member's
customary work week. The Hours of Service to be so credited shall be
determined pursuant to 29 Code of Federal Regulations, Section 2530.200b-
2(b) and (c) as promulgated by the United States Department of Labor, as
amended from time to time.
Hours of Service shall be counted on the basis of such records
or assumptions as shall be adopted by the Committee on a
nondiscriminatory basis which is consistent with the Plan and permitted by
the Secretary.
1.16 "Manhattan Member Contributions" means the amount,
if any, credited to the account of a member of the Manhattan Plan equal to
the amount of the Member's contributions made under the provisions of the
Manhattan Industries Inc. Employees Benefit Plan prior to February 1,
1984, plus interest at the rate of 7% per annum credited to January 31,
1984.
1.17 "Manhattan Plan" means the Manhattan Industries
Salary Savings Plan as it existed prior to March 1, 1992, the date of its
merger into the Plan.
1.18 "Member" means any individual who has become a
member in accordance with Section 2 of the Plan and whose interest in the
Fund has not been completely distributed pursuant to Section 8.
1.19 "Plan" means this Salant Corporation Long Term
Savings and Investment Plan as from time to time in effect; and prior to
March 1, 1992 also means the provisions of the Manhattan Plan and the
Denton Plan as restated and set forth herein.
1.20 "Plan Year" means the calendar year. With respect to
the Manhattan Plan prior to the merger, "Plan Year" means for periods prior
to February 1, 1991, each twelve month period beginning on February 1
and ending on January 31; the eleven month period beginning on February
1, 1991 and ending on December 31, 1991; and each calendar year
thereafter. With respect to the Denton Plan prior to the merger, "Plan
Year" means for periods prior to November 1, 1991, each twelve month
period beginning on November 1 and ending on October 31; the two month
period beginning on November 1, 1991 and ending on December 31, 1991;
and each calendar year thereafter.
1.21 "Salary Deferral Contributions" for any Plan Year
means the sum of a Member's "Employee Matched Contributions" and
"Employee Supplemental Contributions," as provided in Section 3 of this
Plan. Salary Deferral Contributions shall be treated as employer
contributions for all purposes under this Plan except Section 6 and Section
11.
1.22 "Service" means the number of years including each
month as 1/12 of a year and each partial month as a full month contained in
the period beginning on the date on which an Employee first performs an
Hour of Service with the Company or any Employer and ending on the date
of termination or interruption of such employment, which shall be deemed
to be the earlier of (A) the date of retirement, quit or discharge or (B) the
later of (i) the first anniversary of the date a leave of absence commenced
or (ii) the second anniversary of the date a leave of absence commenced, if
the absence beyond the first anniversary is because of the pregnancy of the
Employee, the birth of a child of the Employee, the placement of a child in
connection with the adoption of such child by the Employee or the caring
for such child for a period immediately following such birth or placement.
(a) Service shall not include any service which preceded an
interruption in such service if the person had no vested interest under the
Plan at the time of such interruption and if the number of full consecutive
12 month periods contained in such interruption of such service equals or
exceeds the greater of five and the aggregate number of full consecutive 12
month periods of service not theretofore excluded preceding such
interruption.
(b) The service of a person whose service has been
interrupted shall include service thereafter but shall not be aggregated with
service prior to such interruption until such person completes a 12
consecutive month period of service after resumption of his service.
(c) An interruption of service shall not be deemed to occur
if employment recommences within 12 months.
(d) Service shall include periods during which an employee
is absent for military service provided employment is resumed within the
period prescribed by the statutes of the United States, as from time to time
in effect, for the exercise of veteran's reemployment rights and periods
during which an employee is absent pursuant to an authorized leave of
absence approved by the Committee under uniform rules.
(e) Service shall also include periods of employment by
any Affiliate commencing with the date of acquisition of control of such
Affiliate, to the extent that such periods of employment would have counted
as service had such employment been by the Company.
(f) Service shall also include service as an employee with
any corporation, division, plant, unit, or other business entity which has
been, or which in the future is, merged into or otherwise acquired by the
Company but only to the extent that the Board approves such service as
Service under the Plan.
(g) To the extent that such periods would have counted as
service had the employer then been the Company, service shall also include
periods of employment by any employer acting as a field warehouseman if
such employment has been determined by the Committee to be solely in
connection with a field warehousing arrangement with the Company.
(h) The Service of a Member who had been a participant
in the Manhattan Plan shall be the greater of (a) the sum of (1) his
"Service" as determined under the terms of the Manhattan Plan through
January 31, 1991 and (2) his Period of Service commencing on February 1,
1991 or (b) the sum of (1) his "Service" as determined under the terms of
the Manhattan Plan through January 31, 1992 and (2) his Period of Service
commencing on February 1, 1992. The Period of Service of a Member who
had been a participant in the Denton Plan shall be the greater of (a) the sum
of (1) his "Service" as determined under the terms of the Denton Plan
through October 31, 1991 and (2) his Service commencing on November 1,
1991 or (b) the sum of (1) his "Service" as determined under the terms of
the Denton Plan through October 31, 1992 and (2) his Period of Service
commencing on November 1, 1992.
1.23 "Trust Fund" means the trust fund established under the
Plan.
1.24 "Trustee" means Chemical Bank, N.A. or any successor
corporate trustee from time to time acting as trustee of the Trust Fund.
1.25 "Valuation Date" means the last business day of each
calendar month and such other special valuation dates as shall be agreed to
by the Committee and the Trustee.
Section 2
Membership
2.1 Any Employee who was a Member of the Plan or the
Manhattan Plan or the Denton Plan on December 31, 1991 and who is
employed by the Company on January 1, 1992 shall be a Member of this
Plan or the Manhattan Plan or the Denton Plan, as the case may be, as of
January 1, 1992. Every other Employee shall become a Member on the
first Entry Date on or after the date as of which he has both completed one
year of Service and attained age 21 (or in the case of an Employee hired
before July 1, 1993, the earlier of his completion of two years of Service
and the date as of which he has both completed one year of Service and
attained age 21). If an Employee ceases to be a Member and is reemployed
by the Company, he shall recommence membership as of the first day on
which he again performs an Hour of Service for the Company.
2.2 Any Employee who is eligible to receive from any
corporate plan an "Eligible Rollover Distribution," as defined in Section
402(c)(4) of the Code, or who has rolled over any portion of such
distribution within 60 days to an "eligible retirement plan," as defined in
Section 402(c)(8)(B) of the Code (regardless of whether he is making
Salary Deferral Contributions) may make a rollover contribution of all or
any portion of such amount into this Plan within 60 days of receipt of such
"Eligible Rollover Distribution" or distribution from such "eligible
retirement plan." Any such amount shall be separately accounted for
hereunder, shall at all times be fully (100%) vested, and shall be treated in
the same manner as Manhattan Member Contributions for all other purposes
hereunder, except that the Employee shall not be deemed a Member for
purposes of Sections 3 and 4 solely by virtue of having made such
contributions. The Committee may impose such administrative or other
restrictions on the right to make such contributions as it deems appropriate
or necessary, including, but not limited to, requesting written verification
of the qualified status of the plan from which the "Eligible Rollover
Distribution" is derived or verification that no disqualifying contributions
were made to such "eligible retirement plan."
Section 3
Salary Defer ral Contributions
3.1 Any Member participating in the Plan may elect in
writing to defer 1%, 2%, 3%, 4%, 5% or 6% of his Compensation while a
Member under this Plan, which contributions shall be Employee Matched
Contributions for purposes of Section 4.
3.2 Any Member making Employee Matched Contributions
may also elect in writing to defer additional full percentages of
Compensation up to an additional 9% of his Compensation while a Member
under this Plan which will not be matched by the Company ("Employee
Supplemental Contributions").
3.3. A Member may change, suspend or resume an election
to defer Compensation once in any calendar quarter. All elections, changes
of elections, suspensions and resumptions with respect to salary deferral
under this Plan shall be made as of the next succeeding Entry Date on no
less than 30 days' notice to the Committee.
3.4 Notwithstanding any other provision of the Plan, under
no circumstances shall the salary reductions of any Member in any calendar
year exceed $7,000 ($9,240 for 1994, and as adjusted for increases in the
cost of living factor pursuant to Section 402(g)(5) of the Code) nor shall a
salary reduction election by a 'highly compensated Member,' as defined in
Section 414(q) of the Code, be given effect to the extent such election
might cause the Plan to fail to meet the discrimination standards set forth in
Section 401(k)(3) of the Code. In this regard, the average of the
percentages of salary deferred ("average deferral percentage") by each
highly compensated Member participating in the Plan for any Plan Year
must either be (a) not more than such average of all other Members in the
Plan for such Plan Year multiplied by 1.25 or (b) not more than such
average of all other such Members for such Plan Year multiplied by 2.0, if
the differential between such average for the highly compensated Members
and such average for all other Members does not exceed 2 percentage
points. In the event the Company determines that the deferrals elected by
highly compensated Members might cause the deferrals under the Plan to
fail to meet the foregoing limitations, the Committee shall reduce in an
equitable manner, as it in its sole discretion shall determine, the
permissible percentages of Compensation which may subsequently be deferred
under the Plan by highly compensated Members. Notwithstanding the foregoing,
the Committee shall not reduce the permissible Employee Matched
Contributions of any highly compensated Member if any other highly
compensated Member may make Employee Supplemental Contributions.
3.5 While any election under Section 3.1 or Section 3.2 to
make Employee Matched Contributions or Employee Supplemental
Contributions is in effect, the Member's Compensation for each payroll
period shall be reduced by the elected percentage, and the deferred amount
shall be paid over in cash to the Trust Fund.
3.6 If, prior to March 1 in any calendar year a Member
notifies the Committee in writing that the sum of his salary reductions
under this Plan and his elective deferrals (as defined in Section 402(g) of
the Code) under all other plans for the previous calendar year exceeds
$7,000 (as adjusted) and requests that such excess be distributed to him, the
amount of such excess, adjusted for income or loss allocable thereto, shall
be distributed to him no later than the following April 15. Such
distribution shall be paid first out of the portion of the Member's account
attributable to Employee Supplemental Contributions and, to the extent
necessary, out of the portion of his account attributable to Employee
Matched Contributions.
3.7 Salary reductions of highly compensated Members shall
be maintained within the limit of Section 3.4 by reducing the salary
reductions of highly compensated Members in order of the percentages of
salary deferred beginning with the highest of such percentages. The amount
by which a Member's salary reductions is so reduced, adjusted for income
or loss allocable thereto, and reduced, but not below zero, by the amount of
any distribution made or to be made to the Member pursuant to Section 3.6
shall be distributed to the Member no later than December 31 following the
Plan Year for which such excess salary reductions were contributed to the
Plan on his behalf.
Section 4
Company Matc hing Contributions
4.1 The Company shall make monthly Basic Matching
Contributions to the Trust Fund Equal to 20% of the aggregate Employee
Matched Contributions of Members less the amount of any forfeitures
occurring during the previous month.
4.2 Each Basic Matching Contribution shall be allocated as
of each Valuation Date among the Members who made Employee Matched
Contributions during a calendar month in proportion to their Employee
Matched Contributions made during the calendar month for which the Basic
Matching Contribution is being made.
4.3 At the end of each Plan Year, the Company, in its
discretion, may make additional Bonus Matching Contributions out of the
Company's net income, as defined in Section 4.4.
Bonus Matching Contributions shall be allocated among those
Members who are employed on the last day of such Plan Year, or who
retired, died, became disabled, or transferred to a nonparticipating Employer
during such Plan Year, in proportion to their Employee Matched
Contributions made during the Plan Year.
4.4 For purposes of this Section 4, the term "net income"
means an amount for each fiscal year of the Company equal to the
Company's net income before income and franchise taxes for that fiscal
year, as shown on an income statement for that year prepared in accordance
with generally accepted accounting principles consistently applied but
without deduction for the Company's contribution under this Plan for that
fiscal year.
4.5 The aggregate of Salary Deferral Contributions and
Company Matching Contributions for any Plan Year may not exceed 15%
of the compensation paid or accrued to all Employees under the Plan
(within the meaning of Section 404(a)(3) of the Code) in the taxable year of
the Company ending with or within such Plan Year, plus any allowable
credit and contribution carryovers provided in Section 404(a)(3) of the
Code.
4.6 The total amount of the Trust Fund forfeited by
Members during any calendar month shall be applied to reduce future
Company Matching Contributions due under the Plan.
4.7 Notwithstanding any other provision of the Plan, under
no circumstances shall a Company Matching Contribution be allocated to
the account of a highly compensated Member, as defined in Section 414(q)
of the Code, to the extent that such allocation might cause the Plan to fail
to meet the discrimination standards as set forth in Section 401(m) of the
Code. In this regard the average of the allocations as a percentage of salary
("average contribution percentage") of each highly compensated Member
participating in the Plan for any Plan Year must either be (a) not more than
such average of all other Members in the Plan for such year multiplied by
1.25 or (b) not more than such average of all other Members for such Plan
Year multiplied by 2.0, if the differential between such average for the
highly compensated Members and such average for all other Members does
not exceed 2 percentage points. In any Plan Year for which the salary
deferrals of non-highly compensated employees exceeds the amount
necessary to keep the average deferral percentage of highly compensated
employees within the limit set forth in the second sentence of Section 3.4,
the excess salary deferrals shall be treated as Company Matching
Contributions allocated to the accounts on non-highly compensated
employees for purposes of this Section 4.7.
4.8 Company Matching Contributions to accounts of highly
compensated Members shall be maintained within the limits of Section 4.7
by reducing such Company Matching Contributions in the order of such
highly compensated Employees' Company Matching Contribution as a
percentage of salary beginning with the highest of such percentages. Such
reduction shall be made in proportion to the Member's Matching
Contribution allocated to his account for the Plan Year to which the
reduction relates. The amount of such reduction in the Member's Company
Matching Contribution allocated to his account to the extent the Member is
vested in his Company Matching Contributions, adjusted for income or loss
allocable thereto shall be distributed to the Member no later than December
31 following the Plan Year for which such excess Company Matching
Contributions were contributed to the Plan. The amount of any reduction in
the Company Matching Contribution allocated to a Member's account, to
the extent that he is not yet vested in his Company Matching Contributions,
adjusted for income or loss allocable thereto, shall be a forfeiture as of the
December 31 of the Plan Year following the Plan Year for which the
excess Company Matching Contribution was made. Any forfeiture pursuant
to this Section shall be applied to reduce future Company Matching
Contributions under the Plan.
4.9 For any Plan Year during which both the average
deferral percentage and the average contribution percentage for the eligible
highly compensated Members exceed the like percentages for all other
eligible Employees multiplied by 1.25, the sum of the average deferral
percentage and the average contribution percentage for the eligible highly
compensated Members shall not exceed the greater of:
(a) the sum of:
(1) 125% of the greater of the average deferral
percentage or the average contribution percentage for all other eligible
employees; plus
(B) the lesser of:
(i) 200% of the lesser of the average
deferral percentage or the average contribution percentage for all other
eligible employees; or
(ii) two percentage points plus the lesser
of the average actual deferral percentage or the average contribution
percentage for all other eligible employees; or
(2) the sum of:
(A) 125% of the lesser of the average actual
deferral percentage or the average contribution percentage for all other
eligible employees; plus
(B) the lesser of:
(i) 200% of the greater of the average
actual deferral percentage or the average contribution percentage for all
other eligible employees; or
(ii) two (2) percentage points plus the
greater of the average actual deferral percentage or the average contribution
percentage for all other eligible employees.
Section 5
The Trust Fund
5.1 Contributions shall be held in a Trust Fund by the
Trustee, pursuant to the terms of a Trust Agreement. No employee,
Member or beneficiary under this Plan or any other person shall have any
interest in or right to any part of the corpus, income or earnings of the
Trust Fund or any part of the assets of the Plan except as and to the extent
provided by the terms of the Plan.
5.2 Effective as of January 1, 1992, the Trust Fund shall
consist of the five funds listed below:
FUND (1) - Money Market Fund. A fund together with the
earnings thereon, invested in obligations of the United States Government
or agencies thereof, demand notes, commercial paper, certificates of deposit,
time deposits, and bankers' acceptances, with maturity dates of less than
one year from date of purchase.
FUND (2) - Fixed Income Fund. A fund, together with
earnings thereon, invested in fixed income investments of intermediate-term
maturities. Such fund may be restricted to obligations of the United States
Government or agencies thereof, or obligations guaranteed as to the
payment of principal and interest by such institutions.
FUND (3) - General Equity Fund. A fund, together with the
earnings thereon, invested in such (a) common or capital stocks; (b)
preferred stocks, notes, bonds or debentures, convertible into common or
capital stocks; (c) warrants or rights to purchase or subscribe for common
or capital stocks or securities convertible into common or capital stocks;
and (d) other types of equity investments, including real estate stock funds,
as the Trustee in its sole discretion shall determine, provided that no
investment shall be made in stocks or securities of the Company or
affiliates.
FUND (4) - Guaranteed Income Fund. A fund, together with
the earnings thereon, invested in contracts with insurance companies which
provide for a stated rate of interest.
FUND (5) - Salant Corporation Common Stock Fund. A fund,
together with the earnings thereon, consisting of Common Stock of Salant
Corporation contributed by the Company or purchased by the Trustee with
cash contributions made by the Company. If so directed, the Trustee shall
regularly purchase, or cause to be purchased, Common Stock of Salant
Corporation from time to time in the open market or by private purchase,
including purchase from Salant Corporation of authorized but unissued
shares of such Common Stock or shares of such Common Stock held as
treasury stock. All purchases and contributions from the Company shall be
made at a price equal to the closing price at which Salant Corporation's
Common Stock was traded as reported in the NYSE-Composite
Transactions list reported in the Wall Street Journal for the date of such
purchase or contribution or if there were no such trades on such date, at a
price equal to the mean between the "bid" and "asked" prices for such date.
The Committee may select additional or substitute investment
funds for subsequent investment of Salary Deferral Contributions.
The Trustee may keep any portion of the above funds of the
Trust Fund in the Money Market Fund or in short-term obligations of the
United States Government or agencies thereof or in other types of short-
term investments, including commercial paper (other than obligations of the
Company or affiliates), as it may from time to time deem to be in the best
interests of the Plan or Trust Fund; provided, however, that cash balances
(including any interim investment thereof) shall not be maintained in fund
(5) except to the extent that such balances are in anticipation of cash
distributions from fund (5) or are maintained not to disrupt directed
purchases of the Trustee required by the Plan.
5.3 The Trustee shall maintain sufficiently detailed records
so that the Trustee, the Committee or a designated plan recordkeeper, using
information reports which shall be no less frequent than monthly
revaluations at current market values, as determined by the Trustee, may
maintain a separate account for each Member, in which it shall keep a
separate record of the share of such Member in each fund of the Trust Fund
which is attributable to Company Matching Contributions, Salary Deferral
Contributions, Manhattan Member Contributions and any contribution of an
Eligible Rollover Distribution. Each month the earnings, income, losses
and expenses of the Trust Fund shall be allocated among Members'
accounts based on the balance in such accounts as of the previous Valuation
Date.
5.4 Elections for Investment. At the time an Employee
commences membership under the Plan, he shall also elect in writing to the
Committee to have his Salary Deferral Contributions, if any, invested in one
or more of funds (1), (2), (3) and (4) described in subsection 5.2. At the
time an Employee contributes an Eligible Rollover Distribution to the Plan,
he shall elect in writing to invest such contribution in one or more of funds
(1),(2), (3) and (4) described in subsection 5.2. In no event shall a Member
be permitted to elect to have a percentage other than a whole-number
multiple of 10% (25% prior to January 1, 1994) of such contributions
invested in any one fund. Company Matching Contributions shall be
invested in fund (5) and may not be transferred to other funds except as
provided in subsection 5.5(c).
5.5 Change of Elections For Investment. Transfers
between Funds. Each Member may, by filing a revised written election
with the Committee, make the following changes in his investment
elections:
(a) He may, not more than once in any calendar quarter, as
of any Valuation Date, file a revised investment election applicable to his
Salary Deferral Contributions to be made for the month following such
election and thereafter, subject to the limitations contained in subsection
5.4.
(b) He may, not more than once in any calendar quarter, as
of any Valuation Date, elect to reallocate his interest attributable to his
Salary Deferral Contributions, Eligible Rollover Distributions and
Manhattan Member Contributions in one or more of funds (1), (2), (3) and
(4) by specifying what percentage of the value of his account immediately
after the reallocation will be held in each such fund selected by him,
provided that all such percentages so specified shall be in whole-number
multiples of 10% (25% prior to January 1, 1994).
(c) Notwithstanding the foregoing, a Member who
terminates Service at or after age 60, and who is not reemployed shall be
entitled to make only one change of investment election thereafter, which
election shall be limited to transferring his entire account to fund (1) or
fund (2).
All transfers under these paragraphs (b) and (c) shall be made
as of the Valuation Date of the month in which the Member files a revised
written investment election with the Committee.
5.6 Voting of Salant Corporation Common Stock.
Common Stock of Salant Corporation held by the Trustee shall be voted by
the Trustee as directed by the Member to whose account such stock is
credited. The Company shall cause each Member to be provided with a
copy of a notice of each such stockholder meeting and the proxy statement
of Salant Corporation, together with an appropriate form for the Member to
indicate his voting instructions. If instructions are not timely received by
the Trustee with respect to any such stock, the Trustee shall vote the
uninstructed stock in the same proportions as the Trustee was instructed to
vote with respect to the shares for which it received instructions.
5.7 Tendering of Salant Corporation Common Stock
(a) Upon a commencement of a tender offer for Salant
Corporation Common Stock, the Company shall notify each Member whose
account includes shares of Salant Corporation Common Stock of such
tender offer and use its best efforts to timely distribute or cause to be
distributed to each such Member such information as is distributed to
shareholders of the Company in connection with such tender offer, and shall
provide a means by which the Member can instruct the Trustee whether or
not to tender the shares of Salant Corporation Common Stock allocated to
his account. The Company shall provide the Trustee with a copy of any
materials provided to Members.
(b) Each Member to whom subsection (a) applies, whether
or not such Member is then vested in his account, shall have the right to
instruct the Trustee how the Trustee is to respond to the tender offer, and
the Trustee shall respond as instructed. The Trustee shall not tender any
shares of Salant Corporation Common Stock allocated to a Member's
account for which the Trustee has received no instructions from the
Member.
(c) A Member who has directed the Trustee to tender
shares of Salant Corporation Common Stock allocated to his account may,
at any time prior to the tender offer withdrawal date, instruct the Trustee to
withdraw, and the Trustee shall withdraw, such shares of Salant Corporation
Common Stock from the tender offer prior to the withdrawal deadline. A
Member shall not be limited as to the number of instructions to tender or
withdraw which he may give to the Trustee.
(d) The Trustee shall allocate the proceeds received in
exchange for tendered Salant Corporation Common Stock in accordance
with the Member's investment election applicable to his Salary Deferral
Contributions.
5.8 Expenses. Administrative expenses of the Plan shall be
paid out of the Trust Fund unless and to the extent paid by the Company.
The Company may reimburse the Trust Fund for any payment so made.
Section 6
Vesting
6.1 A Member shall at all times be fully (100%) vested in
his Salary Deferral Contributions and any Manhattan Member Contributions
or any amount credited to the Member as a participant in the Denton Plan
and their allocable earnings.
6.2 A Member's Company Matching Contributions for any
Plan Year shall be vested in accordance with the following schedules:
Completed Years
of Service % Vested
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
Company Matching Contributions shall also be fully (100%)
vested upon earlier death or disability, or upon a Member's attainment of
age 65 or upon the Member's involuntary termination of employment other
than for cause. "Disability" for this purpose shall mean physical or mental
disability which a licensed physician acceptable to the Committee has
certified as permanent or likely to be permanent and as rendering the
Member unable to perform his customary duties. The Committee shall act
in a uniform and nondiscriminatory manner with respect to all Members
similarly situated in ruling on determinations of disability.
6.3 If a Member shall terminate employment at a time
when he is not fully (100%) vested in all of his account under the Plan, the
non-vested portion of his account shall be forfeited upon his incurring a
termination of Service and shall be used to reduce the amount of the next
monthly Company Matching Contribution required to be contributed
pursuant to Section 4.1, and shall be allocated in accordance with
Section 4.2.
6.4 If an amount to the credit of a Member's account is
forfeited pursuant to Section 6.3, such amount shall subsequently be
restored to his account provided (a) he is re-employed by the Company
prior to the expiration of five years after his termination of Service and (b)
prior to the earlier of (i) five years after his re-employment date and (ii)
an interruption of Service of at least five years following his termination of
Service he makes a lump sum payment to the Trust Fund in cash in an
amount equal to the total amount of cash plus the value of the Common
Stock, if any, distributed to him from the Trust Fund on account of his
termination of Service. Such amounts shall be repaid and restored to funds
(1), (2), (3), (4) and/or (5) in accordance with the Plan's terms and the
portion allocable to a Member's contributions shall be allocated in
accordance with his most recent investment election.
Section 7
Maximum Cont ributions
7.1 In no event may a Member's Annual Addition under
this Plan exceed the lesser of: $30,000 (or such other amount as may be
prescribed pursuant to Section 415 of the Code) or 25% of Compensation
from the Company and from all Affiliates during the Limitation Year,
which shall be the Plan Year.
"Annual Additions" means, for each Limitation Year, the sum
of:
(a) all of a Member's Salary Deferral Contributions; and
(b) a Member's Company Matching Contributions.
7.2 If any Member participates in this Plan and
participates or has participated in any defined benefit pension plan
maintained by the Company or any Affiliate, the sum of his defined benefit
plan fraction and defined contribution plan fraction in any Limitation Year
may not exceed 1.0, calculated in the following manner:
(a) The defined contribution plan fraction is a fraction -
(1) The numerator of which is the Annual Additions
to a Member's account as of the close of the Limitation Year, and
(2) the denominator of which is the sum of the
lesser of the following amounts for this Limitation Year and each prior
Limitation Year:
(A) the product of 1.25
and the maximum dollar limitation under
Section 415(c) of this Limitation Year and
each prior Limitation Year; or
(B) the product of -
(i) 1.4 multiplied by
(ii) the maximum compensation
limitation under Section 415(c) for such
Limitation Year.
The defined benefit plan fraction is a fraction -
(1) the numerator of which is the aggregate projected
annual benefit of the Member under all defined benefit plans maintained by
the Company or any Affiliate (determined as of the close of the Limitation
Year); and
(2) the denominator of which is the lesser of:
(A) the product of 1.25 multiplied by
the maximum dollar limitation under Section 415(b) for
such year, or
(B) the product of -
(i) 1.4 multiplied by
(ii) the maximum
compensation limitation under Section 415(b)
for such year.
7.3 In any Limitation Year in which a Member would exceed the
foregoing 1.0 limitation, his benefits shall be reduced to the extent
necessary so that the sum of his defined contribution plan fraction and his
defined benefit plan fraction will not exceed 1.0 in the following non-
discretionary order of reduction:
(a) Benefits under defined benefit plans maintained by the
Company shall be reduced in the order specified in such plans.
(b) Employee Supplemental Contributions.
(c) Employee Matching Contributions and associated Company
Matching Contributions.
7.4 This Section 7 shall be interpreted in accordance with
regulations under Section 415 of the Code.
Section 8
Distribu tions, Loans, and Withdrawals
8.l Form of Distribution.
(a) At the time specified in Section 8.2 and with respect to a
Member who was a participant in the Denton Plan prior to January 1, 1992,
subject to Section 8.11, the vested portion of a Member's account balance
shall be distributed to him or in the event of his death, and subject to
Section 8.4(a), to his beneficiary in a lump sum, provided, however, that a
Member whose Service is terminated (i) by early retirement at or after the
attainment of age 60 and the completion of at least 10 years of Service as
provided under the Salant Corporation Retirement Plan, or (ii) after
attainment of age 65 whether or not the Member is eligible for retirement
under said Retirement Plan, or (iii) by reason of his total and permanent
physical or mental Disability as defined in Section 6.2, may elect
distribution in a lump sum or in annual installments as nearly equal as
practicable over a period of years specified by the Member not to exceed
twenty years. All lump sum distributions made on account of termination
of Service shall be in cash except for distributions from Fund (5), which
shall be in Common Stock, with cash in lieu of fractional shares, unless the
Member requests in writing by reasonable notice prior to such distribution
that such distribution shall be made solely in cash. A Member who elects
installment distributions must waive his right to receive a distribution in
Common Stock.
(b) Any election made under this Section 8.1 may be changed at
any time prior to the time distribution of the Member's account commences
but may not be changed thereafter, except that a Member may exercise on
or after retirement the right to transfer investments to the Plan's Money
Market Fund or Fixed Income Fund as provided in Section 5.5(c) and the
Member may irrevocably elect to accelerate payment of his unpaid
installments.
8.2 Timing of Distribution.
(a) Subject to Section 8.3, the distribution of a Member's account
in accordance with Section 8.1 shall commence -
(1) upon the earliest practicable date after the Member's
termination of employment, if the distribution is made in a lump sum and
does not exceed $3,500;
(2) if the Member so elects, upon any date following his
termination of employment and prior to his attainment of age 65; or
(3) upon the earliest practicable date after his attainment of
age 65 or death in any case not specified in Paragraph (1) or (2).
(b) In no event, unless a Member consents to postponement in
accordance with Subsection (c), shall the distribution of his account
commence later than the 60th day after the last day of the Plan Year in
which occurs the later of his attainment of age 65 or the date of his
termination of employment.
(c) Subject to Section 8.3, a Member may consent to postpone the
distribution of his account beyond the latest date permitted by Subsection
(b) by filing a written statement with the Committee describing the
distribution to which he is entitled and stating the date upon which he
desires such distribution to commence.
8.3 Minimum Distribution. Notwithstanding anything to the
contrary contained in this Plan --
(a) The entire interest of each Member must be paid to him
commencing not later than the April 1st next following the close of his
taxable year in which he attains age 70-1/2. The entire interest shall be
payable in accordance with regulations under Section 401(a)(9) of the Code,
including Section 1.40l(a)(9)-2, over a period not extending beyond the life
of such Member or the joint lives of such Member and his designated
beneficiary, or the life expectancy of such Member or the joint life and last
survivor expectancy of such Member and his designated beneficiary;
provided, however, that any portion of a Member's interest remaining to be
distributed on the date of such Member's death shall be distributed at least
as rapidly as under the method of distribution in effect as of such Member's
death.
(b) If the Member has died prior to the commencement of the
distribution of his interest in accordance with Paragraph (a) of this Section
10.3, the entire interest of such Member shall be distributed:
(1) in the case of a distribution to a
designated beneficiary other than the Member's
surviving spouse, commencing within one (l) year (or
such longer time as the Secretary of the Treasury may
by regulation prescribe) after the Member's death or
(2) if the beneficiary is the Member's
surviving spouse, commencing not later than the date
on which the Member would have attained age 70-1/2,
and payable in either case, in accordance with Treasury Regulations Section
1.401(a)(9), over the life, or over a period not extending beyond the life
expectancy, of such designated beneficiary or surviving spouse.
(c) For purposes of Subsections (a) and (b), the life expectancy of
the Member, and of a surviving spouse shall not be redetermined after
benefits have commenced to be distributed.
(d) Any amount paid to a Member's child shall be treated as if it
had been paid to the Member's surviving spouse if such amount will
become payable to such surviving spouse upon such child reaching maturity
or such other designated event which may be permitted under such
regulations.
(e) A Member may not elect to receive his benefits over a period
of years which would permit his beneficiary (other than his spouse) to
receive a benefit which is 50% or more of the actuarial value (determined
as of the Member's benefit commencement date) of the combined benefits
payable to such beneficiary and such Member.
8.4 (a) Subject to Section 8.11 with respect to the Member's
account balance, if any, accrued under the Denton Plan prior to January 1,
1992, if the Member is survived by a spouse to whom he was married
throughout the one-year period ending on the date his benefits commenced
to be distributed to him, or throughout the one-year period ending on his
death if his death occurs prior to the commencement of the distribution to
him or the Member married such spouse within one year of such
commencement, such Member's entire account balance shall be payable to
such surviving spouse, unless such spouse has consented in writing to the
designation of a beneficiary other than such spouse, and such consent is
witnessed by a Plan representative or by a notary public.
(b) Subject to the foregoing, upon receipt of a notification from
the Committee that he has qualified for participation in the Plan, a Member
shall designate, on forms provided for that purpose by the Committee, a
beneficiary and successor beneficiary. The designation of a beneficiary
shall be effective upon its receipt by the Committee. A Member may from
time to time change the beneficiary or the manner of distribution which he
has designated, without notice to his beneficiary, in accordance with such
rules and regulations as the Committee may from time to time prescribe.
(c) If a Member is not survived by a beneficiary designated under
the terms of the Plan pursuant to subsection (a) or by him pursuant to
Subsection (b), the Committee may (but shall not be required to) designate
a beneficiary, but only from among the Member's spouse, descendants
(including adoptive descendants), parents, brothers and sisters or nephews
and nieces. If the Committee shall fail to designate a beneficiary, the
balance in the Member's account shall be paid to his estate.
8.5 (a) If distribution is made in a lump sum, the amount of
the distribution shall be determined as of the Valuation Date immediately
preceding the distribution. If, after the date of a lump sum distribution,
any amounts are credited to the Member's account as his share of the Employer
Matching Contribution, such amounts shall be distributed to him as soon as
reasonably practicable after the allocation of such contributions.
(b) If distribution is made in installments, the amount of each
annual installment shall be determined by dividing the value of the
Member's account as of the Valuation Date immediately preceding
distribution of the installment by the remaining number of unpaid
installments. At the Member's election, payments may be made on a
monthly or quarterly rather than an annual basis pursuant to valuation
methods consistent with the foregoing.
8.6 Withdrawals - General Rules. Any Member may by written
application to the Committee request a "hardship withdrawal," as defined
below, of Salary Deferral Contributions and the earnings allocated to them
through the end of the last Plan Year ended before July 1, 1989 from his
account or a withdrawal without need to demonstrate "hardship" of his
vested Company Matching Contributions. A Member who shall have
attained the age of 59-1/2 shall not be limited to withdrawals of Salary
Deferral Contributions for hardship but may make withdrawals of such
contributions and the earnings thereon for any purpose. Such withdrawals
shall be effective as of the date of the filing of the withdrawal application
and shall be made as soon as practicable after the succeeding Valuation
Date unless the Committee and the Trustee have agreed to an earlier
valuation. Withdrawals shall be permitted not more than once in any
twelve-month period except upon a showing of Hardship.
8.7 Standards for Hardship Withdrawals. In accordance with the
rules established by the Committee uniformly applicable to all Members, all
or any part of the amount to the credit of the account of a Member may, in
the sole discretion of the Committee, to the extent that such amount is
vested, be distributed to him in cash at any time upon his written
application to the Committee showing immediate and heavy financial need
for a distribution which need may not be satisfied from other resources
available to the Member. Any such distribution approved by the
Committee shall be made from the Member's Employee Supplemental
Contributions and earnings thereon to the extent available, and if
insufficient therefor, the balance shall be distributed out of Employee
Matched Contributions and the earnings thereon. The amount distributed
shall not exceed the amount required to meet the immediate financial need
created by the hardship.
8.8 Withdrawal of Manhattan Member Contributions. A Member
who has made Manhattan Member Contributions or a rollover contribution
pursuant to Section 2.2 may make withdrawals of such contributions and
their allocable earnings for any purpose. Such withdrawals shall be
effective as of the date of the filing of the withdrawal application and shall
be made as soon as practicable after the succeeding Valuation Date unless
the Committee and the Trustee have agreed to an earlier valuation.
8.9 Form of Withdrawals. Distributions on account of withdrawals
and distributions on account of financial necessity shall be in cash.
8.10 Member Loans (a) Any Member who is a party-in-interest
within the meaning of Section 3(14) of ERISA may apply to the Committee
for a loan from the Plan by written application submitted at least thirty (30)
days (or such fewer number of days as the Committee, in their sole
discretion, may determine) prior to the date as of which the Member desires
to make the loan. The loan application shall specify the desired amount
and term of the loan and shall contain all such other information or
documentation as the committee requires.
(b) Upon receipt of a loan application containing all required
information, the loan requested shall be granted; provided, however, that -
(1) The amount of any loan granted to a Member together
with the aggregate outstanding balance (determined as of the date the loan
is made) of all previous loans to that Member under the Plan may not
exceed the lesser of:
(A) fifty percent (50%) of the sum of
the vested balances in his accounts (including any
accrued income earnings, losses or expenses
attributable thereto) determined as of the most recent
Valuation Date; or
(B) $50,000, reduced by the excess
(if any) of (i) the highest aggregate outstanding balance
of loans to the Member from the Plan and all other
plans maintained by an Employer or Affiliate during
the one-year period ending on the date before the date
the loan is made, over (ii) the aggregate outstanding
balances of loans to the Member from the Plan and all
other plans maintained by an Employer or Affiliate on
the date such loan is made.
(2) Except for home loans described in paragraph (d)
below, the maturity date for any loan to a Member may not exceed five (5)
years from the date the loan is made;
(3) Each loan shall bear interest at a rate to be determined
by the Trustee at the beginning of each calendar quarter. In determining
the rate of interest applicable to loans made or renewed during such quarter,
the Trustee shall take into account the rates of interest used by at least two
commercial entities in the business of lending money for similar types of
loans made under similar circumstances with similar collateral, and the rate
of interest established by the Trustee shall be commensurate with such
commercial rates;
(4) All loans shall be subject to any additional
nondiscriminatory criteria that may be established by the Committee,
provided that such criteria shall be those considered in an ordinary
commercial setting by an entity in the process of making similar types of
loans, including criteria relevant to creditworthiness and financial need;
(5) A Member may have only one outstanding loan from
the Plan at any time; and
(6) To the extent that the amount of any loan is greater
than the excess of the value of the aggregate balances in the Member's
accounts over the value, if any, of such accounts accrued under the Denton
Plan prior to January 1, 1992, the loan shall require the written consent of
the Member's spouse which is either witnessed by a Plan representative or a
notary public.
(c) The Committee shall make loans available to all Members on
a reasonably equivalent and nondiscriminatory basis and in accordance with
Section 408(b)(1) of ERISA and regulations promulgated thereunder; and
any Member to whom such loan is made agrees to such changes in the
terms of the loan as may be required by changes in the applicable law or
regulations thereto. The Committee shall not make loans available to
highly-compensated employees (within the meaning of Section 414(q) of
the code) in an amount greater than the amount made available to other
employees.
(d) The provisions of Subsection (b)(2) above shall not apply with
respect to any loan used to acquire, construct, reconstruct or substantially
rehabilitate the "principal residence" of a Member. The maturity date of
any such loan shall be a reasonable period of time as established by the
Committee, in their sole discretion, consistent with the requirements of
Section 72(p) of the Code and other applicable law.
(e) The entire principal amount or any portion of a loan may be
prepaid at any time following the expiration of 90 days after the date on
which the loan was made, without premium or penalty, together with
accrued or unpaid interest on the amount as of the date of prepayment.
(f) Principal and interest with respect to any loan to a Member
shall be repaid by payroll deduction in level installments in amounts
sufficient to liquidate the loan over its remaining term.
(g) Upon a Member's termination of employment the outstanding
principal amount of each loan together with all accrued and unpaid interest
shall become immediately due and payable.
(h) That portion of an account that remains charged by reason of a
loan to a Member shall not share in any income, expense, gain or loss
realized by the remainder of the Trust Fund and shall not be available for
any in-service withdrawal or distribution provisions under the Plan.
(i) Each Member to whom a loan is made shall grant to the
Trustees a security interest in his accounts to the extent of the loan and
execute a promissory note in a form acceptable to the Trustee, which shall
be payable to the order of the Trustees of the Plan for the amount of the
loan and which shall set forth the term, interest rate, and repayment
schedule for the loan. Such note shall be considered an asset of the
account against which the loan is charged.
(j) If a Member defaults on any periodic repayment of income or
principal, the Committee shall have the right to accelerate repayment or to
demand immediate repayment of the entire amount outstanding.
(k) Except as provided in paragraph (1) below if a Member fails
to pay in full the principal amount or the accrued interest on his loan upon
his termination of employment, the balance of any account that has been
charged by reason of the loan shall be reduced by the amount of the unpaid
principal and interest, and the amount by which the balance of the account
is reduced shall be treated as a distribution.If, under the terms of the Plan
without regard to this Section 10.9, the Member is not eligible to receive a
distribution, then the balance of any account charged by reason of a loan
shall be reduced and treated as a distribution on the first day on which the
Member is eligible to receive a distribution, and interest shall accrue on the
unpaid principal until such date.
(l) A Member on an authorized unpaid leave of absence shall be
entitled to suspend loan repayments during such unpaid leave for up to
twelve months without being deemed to be in default on his promissory
note thereby; provided, however, that the maturity of the loan may not be
extended beyond the maximum provided in Subsection (b)(2) or (d) of this
Section 8.10.
8.11 Distribution of Amounts Accrued Under the Denton Plan Prior
to January 1, 1992.
(a) Unless the Member elects an optional form in accordance with
subsection (b), then upon any distribution, the account balances of a
Member who was a participant in the Denton Plan shall, in the case of a
Member who is not married, be used to purchase an annuity for the life of
the Member and, in the case of a Member who is married, be used to
purchase a joint and 50% survivor annuity.
(b) A Member may elect, subject to the provisions of subsection
(c), and during the 90-day period prior to the commencement of benefits, to
have his benefit paid in one of the following manners:
(1) In a lump sum;
(2) In periodic payments of substantially equal amounts for
a specified number of years not in excess of 10. Such periodic payments
shall be made not less frequently than annually;
(3) Purchase of a life annuity.
(c) Any election by a married Member of one of the optional
forms of payment set forth in Subsection (b) must be in writing and must
be consented to by the Member's spouse. The spouse's consent must be
witnessed by a plan representative or notary public. Notwithstanding this
consent requirement, if the Member establishes to the satisfaction of a plan
representative that such written consent may not be obtained because there
is no spouse or the spouse cannot be located, a waiver by the Member will
be deemed a qualified election. Any consent necessary under this item will
be valid only with respect to the spouse who signs the consent, or in the
event of a deemed qualified election, the designated spouse. Additionally, a
revocation of a prior election may be made by a Member without the
consent of spouse at any time before a distribution of the Member's
account(s) is made. The number of revocations shall not be limited.
(d) Each Member shall be provided no later than 90 days before
the commencement of benefits a written explanation of: (a) the terms and
conditions of a qualified joint and survivor annuity; (b) the Member's right
to make and the effect of an election to receive benefits in another form; (c)
the rights of a Member's spouse; and (d) the right to make, and the effect of
a revocation of a previous election not to receive benefits in the form of a
joint and survivor annuity.
(e) With respect to the account balance of a Member who was a
participant in the Denton Plan each such Member may designate one or
more beneficiaries to receive any death benefits that may become payable
under the Plan by filing with the Company the forms specified for this
purpose. For a Member who is married, the beneficiary is the Member's
spouse, unless the spouse has consented in a notarized writing to the
selection by the Member of a beneficiary other than the spouse and the
Member selects such a beneficiary. With respect to such benefits, the
Member shall have a right to select one of the modes of payment specified
in Subsection (b) subject to the requirements of Section 8.3. Such selection
shall be made in the manner and on the forms prescribed by the Company.
If the Member has not specified a payment mode of distribution, the
beneficiary may select one of the modes of distribution specified in
Subsection (b). Any death benefits with respect to which the Member did
not designate a beneficiary or the beneficiary fails to survive the Member
shall be paid in a lump-sum in accordance with Section 8.4.
(f) The Employer will provide each married Member with an
account balance accrued under the Denton Plan prior to January 1, 1992
within the applicable period set forth in subsection (g) with a written
explanation of (1) the terms of the preretirement survivor's death benefit;
(2) the Member's right to designate and the effect of designating a
beneficiary other than the Member's spouse; (3) the rights of the Member's
spouse; (4) the right to make and the effect of a revocation of a previous
beneficiary designation.
(g) The applicable period shall be whichever of the following
periods ends last: (1) the period beginning with the first day of the Plan
Year in which the Member attains age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Member attains age 35; (2)
a reasonable period after the individual becomes a Member; (3) a
reasonable period ending after Section 417(a)(5) of the Code ceases to
apply to the Member or Section 401(a)(11) of the Code applies to the
Member; (4) a reasonable period after separation from service if the
Participant separates before attaining age 35.
8.12 Qualified Domestic Relations Order. A distribution may be
made to an "alternate payee" pursuant to a "qualified domestic relations
order" (each as defined in Section 414(p) of the Code) at a time when such
a distribution would not be permitted to the Member pursuant to the
provisions of the Plan or Section 401(k) of the Code.
8.13 Direct Transfers. If a Member who is entitled to a distribution
of at least $200 which is an "eligible rollover distribution," as defined in
section 402(f)(2)(a) of the Code, elects in writing on a form provided by the
Company to have such distribution, or a portion of such distribution equal
to at least $500 (or the entire distribution if less than $500) paid directly to
a specified "eligible retirement plan," as defined in section 402(c)(8)(B) of
the Code, which is a defined contribution plan the terms of which permit
the acceptance of rollover distributions, the portion of such distribution
which would otherwise be includible in the Member's gross income shall be
distributed in the form of a direct trustee-to-trustee transfer to the
eligible retirement plan so specified.
Section 9
Administr ation of Plan
9.1 Salant Corporation by its approval of the Plan, as
amended, accepts responsibility as plan administrator of the Plan and a
named fiduciary of the Plan with respect to the selection and retention of
the Trustee of the Fund, the selection and retention of any Investment
Manager, investment of Plan Assets in Common Stock, the selection of the
members of the Committee and for reviewing the performance of such
Committee as to the fiduciary duties and responsibilities vested in it under
the Plan as hereinafter set forth. Salant Corporation shall act by resolution
of the Board. Such action shall be evidenced by written resolution certified
in writing by the Secretary or any Assistant Secretary of Salant Corporation.
9.2 The Committee shall consist of not fewer than 3 nor
more than 5 members and may, but need not, include members of the
Board. Any member may resign at will by notice to Salant Corporation or
be removed (with or without cause) by Salant Corporation. The Committee
shall have exclusive responsibility and authority for approving and
reviewing the Plan's investment and funding objectives and policies; and for
reviewing and evaluating the performance and policies of the Trustee and of
any Investment Manager. The Committee shall report regularly, at least
annually, to the Board with respect to its evaluation of same. The
Committee shall also have primary responsibility and authority for the
administration of the Plan including the authority to interpret its provisions,
to authorize distributions from Plan assets, to establish and enforce such
rules and regulations as it shall deem proper for the administration of the
Plan, to determine the amount of benefits which shall be payable to any
person in accordance with the provisions of the Plan, to implement benefit
claim procedures in accordance with Section 9.5 hereof, and to authorize
the payment of benefits from Plan assets. The Committee shall also have
the responsibility for compiling and communicating to the Investment
Manager, if any, the financial information and projections with respect to
anticipated contributions to and distributions from the Plan so that the
current and ongoing liquidity and other financial needs of the Plan may be
properly integrated into the recommendations of the Investment Manager
respecting the Plan's investment objectives. The Committee shall have the
authority to engage independent counsel and consultants in order to fulfill
its responsibilities, to rely on the advice of same and to compensate same
out of Plan assets. The Committee shall also, from time to time,
recommend Plan amendments to the Board as the Committee in
consultation with others may deem appropriate. In addition to and in
furtherance of the powers and authorities herein conveyed, the Committee
shall be authorized, in its discretion, to allocate responsibilities among one
or more of its members, and to delegate responsibilities to any person or
persons selected by it. Any action taken by the Committee shall be taken
by a majority of its members at a meeting or by written instrument
approved by such majority in the absence of a meeting. A written
resolution or memorandum signed by at least two members or by one
member and the secretary of the Committee shall be sufficient evidence to
any person of any action taken by such Committee. The plan administrator
shall also have the responsibility with respect to reporting and disclosure
requirements under ERISA.
9.3 Salant Corporation shall have the power to appoint one
or more Investment Managers of the Fund. Any Investment Manager
appointed by Salant Corporation shall be a bank, an insurance company, or
an advisor registered under the Investment Company Act of 1940, as
specified in Section 3(38) of ERISA and shall have responsibility for
recommending investment objectives and policies to the Committee and for
implementing same. The Investment Manager shall be responsible for
investment decisions involving its allocable assets of the Fund and shall
make regular reports to the Committee.
9.4 Any person, corporation or other entity may serve in
more than one fiduciary capacity under the Plan.
9.5 In the event of a dispute over entitlement to benefits,
claims for additional benefits under the Plan shall be filed with the
Committee on forms supplied by the Committee. Written notice of the
disposition of a claim shall be furnished the claimant within 90 days after
the claim is filed, unless written notice is furnished within the initial 90
day period specifying the reasons an additional 90 days are needed to rule
upon the claim. If the claim is denied, the reasons for the denial shall be
specifically set forth in writing, pertinent provisions of the Plan shall be
cited, including an explanation of the Plan's claims review procedure, and,
if the claim is perfectible, an explanation as to how the claimant can perfect
the claim shall be provided.
If a claimant whose claim has been denied wishes further
consideration of his claim, he may obtain a form from the Committee on
which to request a review of his claim denial. Such form, together with a
written statement of the claimant's positions, shall be filed with the
Committee no later than 60 days after receipt of the written notification
provided for in the previous paragraph. The Committee shall fully and
fairly review the matter within the next 60 days and shall advise the
claimant, in writing, promptly of its decision, except that, due to special
circumstances, and if the claimant is so advised within 60 days of the filing
of the appeal, said review and advice may be made within 120 days of the
filing of the appeal.
Section 10
Top-Heavy Plan Years
10.1 For purposes of this Section 10:
(a) (1) "Key Employee" means any Member who, at any
time during the Plan Year or any of the four preceding Plan Years, is --
(A) one of the ten
Employees owning the largest interests in
the Company and all Affiliates considered
as a unit;
(B) an owner of a 5
percent or greater interest in the Company
or any Affiliate;
(C) an owner of a greater
than one percent interest in the Company
or any Affiliate, whose Section 415
Compensation from all Employers
combined exceeds $150,000.
(D) an officer of the
Company or an Affiliate whose Section
415 Compensation exceeds 50% of the
dollar limit in effect under
Section 415(b)(1)(A) of the Code for any
such Plan Year.
(2) No Employee shall be considered a Key Employee
pursuant to Subsection (1)(A) if such Employee's Compensation is less than
the amount determined under Section 415(c)(1)(A) of the Code (as adjusted
pursuant to Section 415(d)(1)(B) of the Code), for the calendar year in
which falls the Determination Date; provided, further, if any two Employees
own the same interest in the Company or any Affiliate, the Employee
having the larger Section 415 Compensation will be considered to own the
larger interest.
(3) For purposes of Subsection 10.1(a)(1)(A)- (C), an
Employee shall be considered as owning all interests in the Company or an
Affiliate which he owns directly or would be deemed to own under the
rules contained in Section 318 of the Code, except that subparagraph (C) of
Section 318(a)(2) shall be applied by substituting "5%" for "50%."
(4) No more than the greater of three Employees or
10% of all Employees (up to a maximum of 50) of the Company and all
Affiliates combined shall be considered officers for purposes of
Subsection 10.1(a)(1)(D) and no Employee of the Company or an Affiliate
which is not a corporation shall be considered an officer for such purpose.
Where the actual number of such officers exceeds the limit imposed by the
preceding sentence, those Employees who will be considered officers for
purposes of Subsection 10.1(a)(1)(D) shall be the officers having the highest
annual compensation during the five-year period which includes the Plan
Year and the four preceding Plan Years.
(b) "Determination Date" means, with respect to each Plan
Year, the last day of the immediately preceding Plan Year.
(c) "Aggregation Group" means
(1) each plan of the Company or an Affiliate
(including terminated plans) which --
(A) has one or more
participants who are Key Employees,
and/or
(B) enables any plan
described in subsection (A) to meet the
requirements of Section 401(a)(4) or
Section 410 of the Code,
plus, at the Board's election,
(2) any other plan or plans which, when considered
together with the plan or plans described in subsection (1), satisfy the
requirements of Section 401(a)(4) and Section 410 of the Code.
(d) "Top-Heavy Plan Year" means any Plan Year with respect
to which the Plan is a Top-Heavy Plan described in Section 10.3, such
Section 10.3 to be read as incorporating the applicable definitions contained
in Section 416 of the Code and the regulations promulgated thereunder, and
those of any successor statute thereto.
(e) "Section 415 Compensation," for any period, means an
individual's current compensation from the Company or an Affiliate
required to be reported on Form W-2 for such period, including those items
listed in Paragraph (1) of Section 1.415-2(d) of the Federal Income Tax
Regulations but excluding those items listed in Paragraph (2) thereof.
10.2 To the extent required under
Section 401(a)(10)(B) and/or Section 416 of the Code (or any successor
statute(s) thereto), for any Top-Heavy Plan Year, the provisions of the Plan
shall apply only to the extent not inconsistent with Sections 10.4 and 10.5
of the Plan.
10.3 (a) Except as provided in Section 10.3(a)(3), the
Plan is a Top-Heavy Plan with respect to a Plan Year if, as of the
Determination Date of such Plan Year --
(1) the aggregate of the Accounts of Key Employees
under the Plan exceeds 60% of the aggregate of the Accounts of all
Employees under the Plan; or
(2) the Plan is a member of an Aggregation Group:
(A) which is described in
Section 10.1(c)(1), and
(B) with respect to which
the sum of --
(i) the present
value of the cumulative accrued
benefits for Key Employees under
all defined benefit plans within the
Aggregation Group, and
(ii) the
aggregate of the accounts of Key
Employees under all defined
contribution plans in the
Aggregation Group --
exceeds 60 percent of the sum of --
(i) the present
value of the cumulative accrued
benefits of all Employees under all
defined benefit plans included in
the Aggregation Group; and
(ii) the
aggregate of the accounts of all
Employees under all defined
contribution plans within the
Aggregation Group.
(3) Notwithstanding Paragraphs (1) and (2) of this
Section 10.3(a), the Plan shall not be a Top-Heavy Plan for any Plan Year
in which the Plan is a member of an Aggregation Group with respect to
which the percentage test described in Section 10.3(a)(2)(B) is not met.
(b) For purposes of this Section 10.3:
(1) the accrued benefit and/or account balance of any
Employee who is not a Key Employee during the Plan Year but who was a
Key Employee during any prior Plan Year shall be disregarded;
(2) the present value of an Employee's accrued
benefit under a defined benefit plan as of a Determination Date shall be
determined as of that valuation date which occurs within the twelve (12)
month period ending on such Determination Date and is used by the
enrolled actuary for computing Plan costs for minimum funding, as if the
Employee's separation from service occurred on such valuation date;
(3) the account balance of an Employee in a defined
contribution plan as of any Determination Date shall be equal to the
account balance of the Employee on the valuation date which occurs within
the twelve (12) month period ending on such Determination Date including
an adjustment for contributions made or which are due as of such
Determination Date;
(4) the accrued benefit and/or account balance of any
individual who has not received compensation from an Employer during the
five-year period ending on any Determination Date after 1984 shall be
disregarded; and
(5) the account balance of an Employee in a defined
contribution plan or the present value of the accrued benefit of an
Employee in a defined benefit plan, as of a Determination Date -
(A) excludes any rollover
contribution or similar transfer to such
plan made after December 31, 1983 and
attributable to the Employee's interest in a
plan other than a plan maintained by the
Company or an Affiliate, and
(B) includes any amount
distributed with respect to the Employee
under the Plan within the five (5) year
period ending on the Determination Date,
except to the extent that such amount is
included in such Employee's Account
balance or the present value of his accrued
benefit pursuant to Paragraph (2) or (3).
This Subparagraph (B) shall also apply to
distributions under a terminated plan
which, if it had not been terminated,
would have been required to be included
in an Aggregation Group, and
(6) the terms "Employee" and "Key Employee"
include their beneficiaries.
10.4 (a) Except as otherwise provided in Subsection
(b), the amount of the Employer contribution made on behalf of each
Member, or Employee eligible to participate who has not separated from
Service at the end of the Plan Year and who is not a Key Employee for any
Top-Heavy Plan Year shall be at least equal to the lesser of:
(1) three percent (3%) of such Member's Section
415 Compensation; or
(2) the percentage of Compensation represented by
the Employer contributions made on behalf of the Key Employee for whom
such percentage is the highest for such Plan Year, determined by dividing
the contribution made on behalf of each such Key Employee by so much of
his Compensation as does not exceed $200,000.
(b) Where the inclusion of this Plan in an Aggregation
Group pursuant to Section 10.1(c)(1) enables a defined benefit plan
described in Section 10.1(c)(1) to meet the requirements of
Section 401(a)(4) or Section 410 of the Code, the minimum Employer
contribution required under this Section shall be the amount specified in
Section 10.4(a)(1).
(c) For Plan Years beginning after 1984, the term
"Employer contribution" for purposes of Section 10.4(a) shall include any
contribution made on behalf of a Member pursuant to Section 3.1 of the
Plan.
10.5 For any Top-Heavy Plan Year, the limitations
contained in Section 7 of the Plan shall be applied by substituting "1.0" for
"1.25" in Sections 7.2(a)(2)(A) and 7.2(b)(2)(A) of the Plan, unless for such
Plan Year --
(a) the requirements of Section 10.4 would be satisfied if
"four percent (4%)" were substituted for "three percent (3%)" in
Subsection (a)(1) thereof; and
(b) the Plan would not be a plan described in
Section 10.3 if "90%" were substituted for "60%" wherever the latter figure
appears in Section 10.3.
Section 11
Miscellaneo us
11.1 It shall be impossible for any part of the corpus or
income of the Trust Fund to be used for or diverted to purposes other than
for the exclusive benefit of Members and their beneficiaries, or to deprive
any one of them of his vested interest in the Trust Fund. Subject to this
provision, the Plan may be amended at any time by the Board, and any
amendment may be given retroactive effect as the Board may determine,
except that no amendment may be adopted which has the effect of
eliminating an optional form of benefit with respect to benefits attributable
to service prior to the amendment.
11.2 The Plan may be terminated, partially terminated or
contributions under the Plan may be completely discontinued at any time by
the Board. In the event of termination, partial termination of the Plan or
complete discontinuance of contributions under the Plan, no contribution
shall be made thereafter except for a month the last day of which coincides
with or precedes such termination or discontinuance, no distribution shall be
made except as provided in the Plan, the rights of all Members directly
affected by any such termination or discontinuance of contributions to the
amounts to the credit of their accounts as of the date of such termination or
discontinuance shall be fully vested, no person shall have any right or
interest except with respect to the Trust Fund, and the Trustee shall
continue to act until the Trust Fund shall have been distributed in
accordance with the Plan assuming the restrictions described in Section 8.5
to the extent still required by law shall remain in effect.
In the event of closing of a plant or layoff or discharge of a
number of employees which would not constitute a partial termination for
purposes of the Code, the Board may determine in its discretion pursuant to
uniform and non-discriminatory rules to fully vest all affected Members.
11.3 Except as otherwise provided in the case of a
qualified domestic relations order described in Section 414(p) of the Code,
and the loan provisions of Section 8, no Member or beneficiary shall have
the right to assign, transfer, alienate, pledge, encumber or subject to lien
any benefits to which he is entitled under the Plan, and benefits under the
Plan shall not be subject to attachment, garnishment or other legal process.
Any attempted assignment, transfer, alienation, pledge or encumbrance of
benefits or subjection of benefits to lien or adverse legal process of any
kind shall not be recognized by the Committee and the Committee in such
case may direct that such benefits be held or applied for the benefit of such
Member or beneficiary, his spouse, children or other dependents in such
manner and in such proportion as the Committee deems advisable.
11.4 If a Member or beneficiary to whom benefits shall be
due under the Plan shall be or become incompetent, either physically or
mentally, in the judgment of the Committee, the Committee shall have the
right to determine to whom such benefits shall be paid for the benefit of
such Member or beneficiary.
11.5 Each Member and beneficiary shall keep the
Committee advised of his current address. If amounts become distributable
under the Plan and the Committee is unable to locate the Member or
beneficiary to whom the distributions are payable, the account of such
Member or beneficiary shall be closed after three (3) years from the time
such distributions first become payable and the amount of such account
shall be applied to reduce Company Matching Contributions. If, however,
such Member or beneficiary subsequently makes proper claim to the
Committee for such amount, the amount of such account will be restored to
the Trust Fund by the Company and will be distributable in accordance
with the terms of the Plan.
11.6 In the case of any merger or consolidation with, or
transfer of assets or liabilities to, any other plan, each Member and
beneficiary under the Plan shall be entitled to receive a benefit immediately
after the merger, consolidation or transfer (if the merged, consolidated or
transferee plan then terminated) which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
11.7 This Plan shall be governed by the laws of the State
of New York to the extent not preempted by ERISA or other federal law.
Section 12
Conditional Adoption
This amended and restated Plan is adopted subject to the
conditions precedent that it be determined to be qualified under Section
401(a) of the Code and that it be determined to satisfy the requirements of
Section 401(k) of the Code. In the event that the Internal Revenue Service
determines that this Plan or any part thereof does not so qualify, all affected
company contributions shall be returned to the Company and all affected
Salary Deferral Contributions, together with any allocable earnings, shall be
returned to Members within one year of the date of the denial of
qualification or unfavorable determination.
IN WITNESS WHEREOF, Salant Corporation has hereby
adopted this Plan on this day of December, 1994, as of the year and
day first above written.
Attest:
President
Secretary
6985
03/23/95 APPENDIX A
ADOPTING COMPANIES
Name Effective Date
Salant Corporation January 1, 1979
Denton Mills, Inc. January 1, 1992