1
Exhibit 10(g)
THE LIZ CLAIBORNE 401(K)
SAVINGS AND PROFIT SHARING PLAN
As Amended and Restated
Effective as of April 1, 2000
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The Liz Claiborne 401(k) Savings and Profit Sharing Plan
(As Amended and Restated
Effective as of April 1, 2000)
Preamble
Effective January 1, 1985, Liz Claiborne, Inc. (the "Company") adopted the
Liz Claiborne Savings Plan (the "Plan"), a stock bonus plan that provides for
contributions pursuant to section 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code"), which plan has been amended and restated from time to
time.
Effective January 1, 1983, the Company adopted the Liz Claiborne Profit
Sharing Retirement Plan (the "Profit Sharing Plan"), a profit sharing plan that
provides for employer profit sharing contributions, which plan has also been
amended and restated from time to time.
On June 9, 1999 the Company acquired approximately 85% of the stock of
Lucky Brand Dungarees, Inc. ("Lucky"), the sponsor of the Lucky Brand Employee
Retirement Plan and Trust (the "Lucky Plan"), a profit sharing plan providing
for contributions under section 401(k) of the Code.
On June 11, 1999, the Company acquired approximately 85% of the stock of
Segrets, Inc. ("Segrets"), the sponsor of the Segrets, Inc. 401(k) Profit
Sharing Plan (the "Segrets Plan"), a profit sharing plan providing for
contributions under section 401(k) of the Code.
On November 2, 1999 the Company acquired 100% of the stock of Podell
Industries, Inc., the sponsor of the Podell Industries, Inc. 401(k) Profit
Sharing Plan (the "Laundry Plan"), a profit sharing plan providing for
contributions under section 401(k) of the Code.
The Company now desires to amend and restate the Plan to reflect the merger
into it of the Profit Sharing Plan, the Lucky Plan, and the Segrets Plan
effective as of December 31, 1999 and the Laundry Plan effective as of April 1,
2000; and (ii) to further amend the Plan to comply with the provisions of the
Small Business Job Protection Act of 1996 ("SBJPA"), the Uruguay Round
Agreements Act (also referred to as "GATT"), the Taxpayer Relief Act of 1997
("TRA 97") and the IRS Restructuring and Reform Act of 1998 (together, the "GUST
provisions"), as well as other amendments determined by the Company to be
appropriate to further the purposes of the Plan, effective as of the dates
required by such provisions of law or as expressly set forth herein, and
otherwise as of the date hereof.
The Plan as amended and restated herein is intended to qualify as a profit
sharing plan within the meaning of section 401(a) of the Code with a cash or
deferred arrangement within the meaning of section 401(k) of the Code.
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ARTICLE I
General
1.1 Effective Date. The effective date of this amendment and restatement is
April 1, 2000. Except as expressly provided herein, the rights of a Participant
or an Eligible Employee who has terminated employment and who does not have an
Hour of Service on or after the Effective Date shall be determined by the terms
of the Plan in effect immediately prior to the Effective Date. Notwithstanding
the forgoing, certain provisions of this document are intended to comply with
changes to the Code made by the GUST provisions, and shall have the effective
dates of such changes. To the extent applicable, any provisions of the Plan
intended to comply with the GUST provisions shall also be considered amendments
to the prior version of this Plan, the Profit Sharing Plan, the Lucky Plan, the
Segrets Plan and the Laundry Plan as of the relevant effective dates.
1.2 Definitions. Terms used frequently with the same meaning are capitalized;
some terms are defined below, others in the section of the Plan to which they
principally pertain.
(a) When used in this Plan, the following terms shall have the designated
meanings, unless a different meaning is clearly required by the context:
(i) "Accounts". A Participant's Profit Sharing Contributions, Matching
Contributions, Tax-Saver Contributions, Qualified Non-Elective
Contributions, Buy-Back and Rollover Accounts.
(ii) "Affiliate". A Controlled Group Member or an Affiliated Service
Group Member.
(iii) "Affiliated Service Group Member". Any (A) member of an
affiliated service group, within the meaning of section 414(m) of the Code,
that includes the Company or a Controlled Group Member, or (B) organization
aggregated with the Company or a Controlled Group Member pursuant to
section 414(o) of the Code, but only if and to the extent (including time
period) required by such sections.
(iv) "Appropriate Form". The form prescribed by the Recordkeeper for a
particular purpose specified in the Plan, as more fully described in
Section 14.1.
(v) "Beneficiary". The person or persons entitled to benefits under
the Plan following a Participant's death, pursuant to Article X.
(vi) "Board of Directors". The Board of Directors of the Company, or
any duly authorized committee thereof.
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(vii) "Buy-Back Account". A separate account maintained for a
Participant which reflects his share of the Trust Fund attributable to his
repayment of a prior distribution under Section 7.5.
(viii) "Code". The Internal Revenue Code of 1986 as amended from time
to time. Reference to a specific provision of the Code shall include such
provision, any valid regulation or ruling promulgated thereunder and any
comparable provision of future law that amends, supplements or supersedes
such provision.
(ix) "Committee". The administrative/investment committee provided for
in Article XII.
(x) "Common Stock". Common stock of the Company.
(xi) "Company". Liz Claiborne, Inc. a Delaware Corporation, or any
successor thereto by merger, consolidation or otherwise
(xii) "Company Stock Fund. An Investment Fund invested primarily in
Common Stock.
(xiii) "Compensation". An individual's base salary or base wages and
commissions paid by an Employer for services as an Eligible Employee,
excluding bonuses, overtime, and all other forms of extra compensation, but
determined before giving effect to any Contribution Agreement under this
Plan, or any salary reduction or similar agreement under any plan described
in section 401(k) or 125 of the Code. The total amount of a Participant's
Compensation taken into account under the Plan for any Plan Year shall not
exceed the maximum amount permitted for such Plan Year under section
401(a)(17) of the Code.
(xiv) "Contribution Agreement". An agreement by an Eligible Employee
to reduce his Compensation otherwise payable in cash in order to receive
Tax-Saver Contributions under the Plan, which agreement may be either
express or deemed to have been made as provided in Section 4.2.
(xv) "Controlled Group Member". Any trade or business, whether or not
incorporated, during such period in which it controls, is controlled by, or
is under common control with the Company within the meaning of section
414(b) or 414(c) of the Code.
(xvi) "Disability". A Participant has incurred a Disability if he is
determined by the Committee to have become incapable of performing all of
the duties of his normal occupation because of an illness or accidental
injury that is expected to be permanent or of indefinite duration. In
making its determination the Committee may treat as conclusive evidence of
Disability a Participant's qualification for disability benefits under the
Social Security Act.
(xvii) "Effective Date". See Section 1.1.
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(xviii) "Eligible Employee". See Section 3.1.
(xix) "Employer". The Company and any other Controlled Group Member
which has adopted the Plan with the approval of the Company and which shall
not have discontinued its sponsorship pursuant to Section 13.1.
(xx) "Entry Date". The first day of each month and any other date
established as an entry date by the Committee with respect to Eligible
Employees generally, or such specified group of Eligible Employees as the
Committee may prescribe in its discretion.
(xxi) "ERISA". The Employee Retirement Income Security Act of 1974 as
amended from time to time. Reference to a specific provision of ERISA shall
include such provision, any valid regulation or ruling promulgated
thereunder and any comparable provision of future law that amends,
supplements or supersedes such provision.
(xxii) "Full Time" and "Part Time". See Subparagraph 3.1(f)(i).
(xxiii) "Highly Compensated Employee". For any Plan Year, an employee
who received compensation from the Company and its Affiliates (as
determined under section 414(q) of the Code) during the prior Plan Year in
excess of $80,000 (as adjusted pursuant to section 414(q) of the Code) or
who was a five percent (5%) owner (within the meaning of Section 414(q) of
the Code) of the Company at any time during the current or prior Plan Year.
(xxiv) "Hour of Service". Each hour for which an employee is paid or
entitled to payment for the performance of duties for the Company, another
Employer or an Affiliate, and each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Company, an
Employer or an Affiliate, disregarding payments made or due solely for
purposes of complying with workers' compensation, unemployment compensation
or disability insurance laws and payments which solely reimburse an
employee for medical expenses and severance pay. Hours to be credited for
reasons other than the performance of duties shall be determined and
credited in accordance with the provisions of Department of Labor
Regulation Section 2530.200b-2(b) and (c). With respect to employees for
whom hourly employment records are not regularly kept, the Committee shall
establish such equivalents as it deems appropriate in accordance with
Department of Labor Regulation 2530.200b-3(c).
(xxv) "Investment Fund". A portion of the Trust Fund which is
separately invested pursuant to Section 6.5.
(xxvi) "Leased Employee". An individual treated as an employee of
non-adopting Controlled Group Member pursuant to Section 3.9.
(xxvii) "Matching Contributions". Contributions made by an Employer
for a Participant under Section 4.7, based on the Tax-Saver Contributions
made for the Participant.
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(xxviii) "Matching Contributions Account". A separate account
maintained for each Participant which reflects his share of the Trust Fund
attributable to Matching Contributions.
(xxix) "Maternity or Paternity Absence". An employee's absence from
work because of the pregnancy of the employee, the birth of the employee's
child or the adoption of a child by the employee or for purposes of caring
for the employee's child immediately following such birth or adoption. The
Committee may require the employee to furnish such information as it
considers necessary to establish that such employee's absence was a
maternity or paternity absence.
(xxx) "Normal Retirement Date". An employee's 65th birthday.
(xxxi) "One Year Break in Service": A continuous 12-month period of
absence commencing on the earlier of the day an employee quits, retires,
dies, or is discharged or, in the case of an absence for any other reason,
the first anniversary of the first day of such absence if the employee is
not paid or entitled to payment for the performance of duties for the
Company or any Affiliate during such 12-month period. Solely for purposes
of determining whether a One Year Break is Service has occurred, an
employee who is absent from service beyond the first anniversary of the
date on which his Maternity or Paternity Absence began shall be deemed to
have terminated employment no later than the second anniversary of the date
on which the Maternity or Paternity Absence began.
(xxxii) "Participant". Any employee who has become a Participant in
this Plan in accordance with Article II, and any other employee or former
employee who has an undistributed Account balance under the Plan.
(xxxiii) "Plan". The Liz Claiborne 401(k) Savings and Profit Sharing
Plan (As Amended and Restated Effective as of April 1, 2000), as from time
to time in effect.
(xxxiv) "Plan Year". Each twelve-month period starting on January 1
and ending on December 31.
(xxxv) "Profit Sharing Contributions". Contributions by an Employer
under Section 4.13.
(xxxvi) "Profit Sharing Contributions Account". A separate account
maintained for each Participant which reflects his share of the Trust Fund
attributable to Profit Sharing Contributions.
(xxxvii) "Qualified Non-Elective Contributions". Discretionary
contributions by an Employer for a Participant under Section 4.10.
(xxxviii) "Recordkeeper". The entity which the Committee has employed
to perform recordkeeping and certain other administrative functions for the
Plan.
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(xxxix) "Rollover". A Participant's rollover contribution pursuant to
Section 4.12.
(xl) "Rollover Account". A separate account maintained for each
Participant which reflects his share of the Trust Fund attributable to his
Rollovers.
(xli) "Tax-Saver Contributions Account". A separate Account maintained
for each Participant which reflects his share of the Trust Fund
attributable to Tax-Saver Contributions.
(xlii) "Tax-Saver Contributions". Contributions made by an Employer
for the benefit of a Participant under Section 4.1, based on the amount by
which the Participant elected (or is deemed to have elected) to reduce the
Compensation otherwise payable to him in cash in accordance with Section
4.2.
(xliii) Termination Date. The date on which an employee's employment
with the Company and its Affiliates terminates for any reason.
(xliv) "Total Earnings". Total compensation (as that term is defined
in Treas. Reg Section 1.415-2(d)(ll)(i)) paid by the Company or an
Affiliate to an individual, but determined before giving effect to any
Contribution Agreement under this Plan (or any other cash or deferred
arrangement described in section 401(k) of the Code) or to any similar
reduction agreement pursuant to any cafeteria plan (within the meaning of
section 125 of the Code). For purposes of Sections 5.7 and 5.11, Total
Earnings shall be limited to such compensation paid by an Employer or
Affiliate to an individual for the portion of the Plan Year during which he
was eligible to make Tax-Saver Contributions or eligible to receive
Matching Contributions, as applicable. Total earnings taken into account
under the Plan for any Plan Year shall not exceed the maximum amount
permitted for such Plan Year under section 401(a)(17) of the Code.
(xlv) "Treasury Regulations". Any regulation published by the
Secretary of the Treasury with respect to any section of the Code, and any
revenue ruling, notice or announcement of general application pertinent to
any Code section published by the United States Treasury Department.
(xlvi) "Trust Agreement". The trust agreement referred to in Article
XI.
(xlvii) "Trust Fund". All the assets held under the Plan by the
Trustee as provided for in Article XI.
(xlviii) "Trustee". The corporation, individual, individuals, or
combination thereof which may at any time be acting as trustee under the
Trust Agreement entered into in connection with the Plan.
(xlix) "Valuation Date". Generally, each business day; for this
purpose, a business day is any day on which the New York Stock Exchange is
open. Notwithstanding the foregoing, the Committee, in its discretion, may
suspend daily valuations for such period as it considers appropriate, or
may designate a different
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valuation cycle (such as monthly or quarterly), as long as there is a
valuation as of the last business day of each Plan Year.
(l) "Year of Eligibility Service". See Section 2.2
(li) "Year of Vesting Service". See Section 2.3
(b) Where the context permits, words in any gender shall include any other
gender, words in the singular shall include the plural and the plural shall
include the singular.
1.3 Plan Supplements. The provisions of the Plan as applied to any Employer or
any group of employees of any Employer may be modified or supplemented from time
to time by the Company by the adoption of one or more "Supplements". Each
Supplement shall form a part of the Plan as of the Supplement's effective date.
In the event of any inconsistency between a Supplement and the Plan document,
the terms of the Supplement shall govern.
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ARTICLE II
Service
2.1 General. Service is used under the Plan to determine when an employee is
able to participate in the different types of contributions available under the
Plan and when he has earned a vested, nonforfeitable right to such
contributions. Service is determined differently for different purposes under
the Plan.
2.2 Year of Eligibility Service. An employee will have earned a "Year of
Eligibility Service" at the end of a twelve consecutive month computation period
during which the employee is credited with at least 1,000 Hours of Service; such
computation period shall begin on (a) the first day for which the employee is
paid or entitled to payment for the performance of duties for the Company or an
Affiliate or (b) any anniversary of such first day. The employee need not be
employed at the end of such computation period to be credited with a Year of
Eligibility Service.
2.3 Years of Vesting Service. An employee will have "Years of Vesting Service"
equal to the number of years, computed to a fraction based upon 365 days
comprising a year, elapsed since the first date for which the employee has an
Hour of Service and ending on the day he last severs employment with the Company
and its Affiliates, subject to the following:
(a) An employee will have severed employment with the Company and its
Affiliates on the earlier of (i) the day he quits, retires, dies or is
discharged, or (ii) the first anniversary of the first day of an absence
for any other reason.
(b) If an employee's employment with the Company and its Affiliates is
terminated and he incurs a One Year Break in Service, he shall not be
credited with service for the period between the date he severed employment
with the Company and its affiliates and the date, if any, of his
reemployment by the Company or an Affiliate.
(c) Any absence that is shorter than twelve full months shall count as
vesting service.
(d) The period between the first anniversary of the first day of a
Maternity or Paternity Absence and the second anniversary shall be
considered neither vesting service nor any part of a One Year Break in
Service.
(e) Vesting service earned by an employee after five (5) consecutive One
Year Breaks in Service shall be disregarded in determining the vested
percentage of his benefit under the Plan derived from Matching and Profit
Sharing Contributions accrued prior to such break.
(f) If an employee or Participant terminates employment with the Company
and its Affiliates without having a vested interest in any portion of an
Account and such employee or Participant incurs six (6) consecutive One
Year Breaks in Service, his employment prior to the first such One Year
break in Service shall be disregarded and he shall be treated as a new hire
for purpose of when he may begin participation in the Plan
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and Section 3.1 after his reemployment. The foregoing rule of parity shall not
affect an individual's retention of his Years of Vesting Service earned prior to
his reemployment by the Company or an Affiliate for purposes of determining his
vested interest in any Employer contributions first allocated to his Account
after his reemployment.
2.4 Changes in Employment Status and Application of Different Service Crediting
Rules to the Determination of Eligibility. In the event that an individual
changes status from a Full Time employee to a Part Time employee or vice-versa
(whether in connection with a termination of employment or otherwise) the
following rules shall apply:
(a) an employee who moves from Part Time status to Full Time status shall
be credited with the greater of (i) the period of elapsed-time service that
would be credited under Section 2.3 during the entire computation period in
which the transfer occurs or (ii) the service creditable under Section 2.2
as of the date of transfer; and
(b) An employee who moves from Full Time to Part Time status shall receive
credit for Hours of Service in the computation period in which the transfer
occurs for any elapsed time service earned prior to the date of transfer,
determined by multiplying 45 by the number of weeks worked in any
fractional part of a year credited under Section 2.3 prior to the transfer.
For purposes of the foregoing, the transfer will be deemed to have occurred on
the date the employee returns to work when the change in status occurs in
connection with an interruption of active employment.
Notwithstanding the foregoing, if an individual changes from Full Time to Part
Time status after he has received his initial enrollment kit, he will continue
to be treated as a Full Time employee for purposes of subparagraph 3.1(f)(i).
2.5 Service With Acquired Companies or Businesses. Notwithstanding the foregoing
provisions of this Article II, in the event that the Company or an Employer
acquires a business not previously included in the Company's "controlled group"
of businesses within the meaning of section 414 of the Code, the Committee in
its discretion may decide to recognize service with such business prior to the
acquisition as though it were service with an Affiliate, to the extent that, and
in accordance with such rules as, the Committee deems appropriate.
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ARTICLE III
Participation in the Plan
3.1 Eligibility to Participate in the Plan. An employee who was a Participant in
the Plan (or in the Profit Sharing Plan) prior to the Effective Date with
respect to eligibility to make Tax-Saver Contributions, eligibility to receive
Matching Contributions or eligibility to share in Profit Sharing Contributions
shall continue as a Participant with respect to such right(s) after the
Effective Date if such employee is still employed in a group to which the Plan
has been extended on the Effective Date. Each other employee of an Employer
shall be an "Eligible Employee" with respect to a particular portion of the Plan
as of the Entry Date coincident with or next following the date on which he
first satisfies all of the following requirements:
(a) he is employed in the continental United States in a group to which the
Plan (or the relevant portion thereof) has been extended by the Company or
his Employer; for this purpose an Employer may, in its discretion,
determine that employees in a specified division, subdivision, plant,
location or job classification of such Employer shall not be Eligible
Employees, provided that any such determination shall not discriminate in
favor of officers, shareholders or highly compensated employees so as to
prevent the Plan from qualifying under section 401(a) of the Code;
(b) he does not perform services for the Company or an Employer under a
contract, agreement, arrangement or understanding that purports to treat
him as an independent contractor, a fragrance demonstrator or the employee
of a leasing organization, agency or other entity, even if he is
subsequently determined (by judicial action or otherwise) to have instead
been a common law employee of such Employer;
(c) his employment with the Company or his Employer is not covered by a
collective bargaining agreement, unless participation in the Plan has been
extended to him under the terms of such collective bargaining agreement;
(d) he has attained age 21;
(e) he is not a non-resident alien; and
(f) he has satisfied the applicable service requirement for that portion of
the Plan, as follows:
(i) with respect to Tax-Saver Contributions, if he is a "Full Time"
employee (that is, he is scheduled to work a full work week determined
by the customary practice of his location, business unit or job
description as determined by the Committee in its sole discretion), he
has completed one half (1/2) of a Year of Vesting Service, or if he is
a "Part Time" employee (that is, he is not a Full Time employee), he
has completed a Year of Eligibility Service;
(ii) with respect to Matching Contribution, if he is a Full Time
employee, he has completed a Year of Vesting Service (or has a Year of
Eligibility Service for the
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computation period ending in the 2000 Plan Year), and if he is a Part
Time employee, he has completed a Year of Eligibility Service;
(iii) with respect to Profit Sharing Contributions, he has completed a
Year of Eligibility Service, whether he is a Full Time or Part Time
employee; and
(iv) there is no service requirement for Rollover Contributions with
respect to an otherwise eligible employee.
3.2 Transfer to Eligible Employment. If an employee transfers from a position
with an Employer or Affiliate that is not covered by the Plan to a position with
an Employer that is covered by the Plan, he shall become a Participant on the
later of (a) the first Entry Date coincident with or next following the date of
such transfer, or (b) the first Entry Date on which he could have become a
Participant pursuant to Section 3.1 if his prior employment by the Employer or
Affiliate had been in a position eligible for participation in the Plan.
3.3 Reemployment. If an employee who has terminated employment is rehired into
an eligible group, he shall commence or resume participation under the Plan on
the later of (a) the date of such rehire, or (b) the Entry Date coinciding with
or next following that date he satisfies all of the requirements of Section 3.1,
unless such employee is treated as a new hire for eligibility purposes under
paragraph 2.3(f), in which case he must again satisfy the service requirements
of paragraph 3.1(f).
3.4 Inactive Participation. If an individual ceases to meet all of the
eligibility requirements of Section 3.1, such individual shall be considered an
inactive Participant in the Plan for as long as any amount is credited to his
Account under the Plan, but:
(a) no contributions shall be made by or for him; and
(b) except as otherwise expressly provided herein, he may not make a
withdrawal or borrow under Section X after he ceases to be an employee of
an Employer or an Affiliate.
3.5 Transfers Between Employers. If a Participant transfers from employment as
an Eligible Employee with one Employer to employment as an Eligible Employee
with another Employer his participation in the Plan shall not be interrupted and
his Contribution Agreement (if any) with his prior Employer shall be deemed to
apply to his second Employer in the same manner as it applied to his prior
Employer.
3.6 No Employment Rights. The establishment of the Plan shall not be construed
as conferring any rights upon any employee or any person for a continuation of
his employment, nor shall it be construed as limiting in any way the right of
any Employer or Affiliate to discharge any employee or to treat him without
regard to the effect which such treatment might have upon him as a Participant
under the Plan.
3.7 Rollover Participation. An employee who satisfies all of the requirements of
Section 3.1 other than paragraphs (d) and (f) may make a Rollover Contribution
pursuant to Section 4.12 and thereby become a Participant as of the date of such
contribution (if he has not previously become a Participant) only for the
purposes of such Rollover, and shall not be eligible to share in
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Tax-Saver, Matching or Profit Sharing Contributions until he has qualified for
such contributions in accordance with the applicable provisions of Section 3.1.
3.8 Participation Voluntary For Certain Purposes. Participation with respect to
Tax-Saver and Matching Contributions in this Plan shall be voluntary and any
person otherwise eligible may decline to participate in those portions of the
Plan; participation with respect to Profit Sharing Contributions shall be
automatic.
3.9 Leased Employees. If a person satisfies the requirements of section 414(n)
of the Code and applicable Treasury Regulations for treatment as a "Leased
Employee", such Leased Employee shall not be eligible to participate in this
Plan but, to the extent required by section 414(n) of the Code and applicable
Treasury Regulations, such person shall be treated as if the services performed
by him in such capacity were performed by him as an employee of a Controlled
Group Member which has not adopted the Plan, provided, however, that no such
service shall be credited for any period during which not more than 20% of the
non-Highly Compensated Employees of the Company and its Affiliates consists of
Leased Employees and the Leased Employee is a participant in a money purchase
pension plan maintained by the leasing organization which (a) provides for a
non-integrated employer contribution of at least 10 percent of compensation, (b)
provides for full and immediate vesting, and (c) covers all employees of the
leasing organization (beginning with the date they become employees), other than
those employees excluded under section 414(n)(5) of the Code.
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ARTICLE IV
Contributions
4.1 Tax-Saver Contributions. Subject to the terms and conditions of the Plan,
including Article V, an Eligible Employee may elect to have his Compensation
reduced and a corresponding amount of Tax-Saver Contributions made on his behalf
for each payroll period in an amount equal to any whole percentage of his
Compensation for such payroll period between 1% and 15%, inclusive, provided
that a whole percentage of his Compensation for a payroll period shall not be
required if necessary or appropriate to comply with any applicable limitations
on the amount of Tax-Saver Contributions permitted. Notwithstanding the
foregoing, the Committee shall decrease the rate of a Participant's Tax-Saver
Contributions for any payroll period to the extent the amount of the
corresponding reduction, plus the amount of the Participant's deductions for
such payroll period for welfare benefits sponsored by the Employer and any other
withholding from pay required by law, would exceed the Participant's
Compensation for such payroll period.
4.2 Contribution Agreement for Tax-Saver Contributions. Prior to April 1, 2000,
to become a Participant for purposes of Tax-Saver Contributions an Eligible
Employee must have completed and returned a Contribution Agreement. On and after
April 1, 2000, an Eligible Employee, upon first becoming eligible to make
Tax-Saver Contributions, shall be deemed to have completed a Contribution
Agreement under which he agrees to reduce the Compensation otherwise payable to
him in cash on each subsequent payroll date by 3% (or such other amount as the
Committee may specify on a uniform and nondiscriminatory basis); provided,
however, that any such individual may elect not to have such automatic
contributions made on his behalf, or to have contributions made in a different
amount, by providing such notification as the Committee may specify.
4.3 Time of Tax-Saver Contributions. Tax-Saver Contributions shall be
contributed by the Participant's Employer as soon as reasonably practicable
after the payroll date to which such contributions relate.
4.4 Change in Contribution Rate. Any Eligible Employee or Participant who
previously has declined to make Tax-Saver Contributions and any Participant who
has a Contribution Agreement in effect may prospectively increase or decrease
the percentage of Tax-Saver Contributions to be made on his behalf within the
limits specified in Section 4.1, effective as of a future payroll date, by
giving notice on the Appropriate Form to the Committee at least thirty (30) days
before such date or within such other period as the Committee may prescribe.
4.5 Voluntary Suspension of Tax-Saver Contributions. A Participant may
voluntarily suspend his Contribution Agreement effective as of a future payroll
date by giving notice to the Committee on the Appropriate Form at least thirty
(30) days before such date or within such other advance period as the Committee
may prescribe. No Tax-Saver Contributions or Matching Contributions shall be
made for any Participant with respect to any period during which his
Contribution Agreement has been so suspended. An Eligible Employee may reinstate
his
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Contribution Agreement as of the first day of any payroll period, by giving
notice on the Appropriate Form at least thirty (30) days before the first day of
such payroll period (or within such other advance period as the Committee may
prescribe).
4.6 Mandatory Suspension of Tax-Saver Contributions. The Contribution Agreement
of a Participant who makes a hardship withdrawal from his Tax-Saver
Contributions Account pursuant to Section 8.3 shall be suspended as of the
payroll period in which the withdrawal is made until the next payroll period
that is at least 12 months after the date of such withdrawal. An Eligible
Employee may reinstate his Contribution Agreement as of the first day of any
payroll period following a period of mandatory suspension under this Section
4.6, by giving advance notice to the Committee on the Appropriate Form so that
it is received by the Committee within such period as the Committee shall
prescribe.
4.7 Matching Contributions. Matching Contributions shall be made with respect to
Tax-Saver Contributions in accordance with the following:
(a) For each payroll period beginning on or after the Effective Date the
Employers shall make Matching Contributions to the Plan for each
Participant who had a Contribution Agreement in effect during such payroll
period, in an amount equal to 50% of such Participant's Tax-Saver
Contributions for such payroll period that do not exceed 6% of his
Compensation for that payroll period.
(b) Prior to the Effective Date, at the end of each calendar quarter, the
Employers would determine whether the Matching Contributions made pursuant
to paragraph (a) above on a payroll-by-payroll basis equal, for that
calendar quarter, 50% of the Participant's Tax-Saver Contributions for that
quarter that do not exceed 5% of his Compensation for that quarter or, if
shorter, so much of the quarter during which he was a Participant. If the
amount contributed under paragraph (a) did not equal the amount required by
this paragraph (b), the Employers would contribute the additional amount
necessary to make the Participant whole. No such true-up contribution shall
be made with respect to any calendar quarter commencing on or after the
Effective Date.
4.8 Payment of Matching Contributions. Matching Contributions made with respect
to a payroll period under paragraph 4.7(a) shall be paid to the Trustee as soon
as reasonably practicable after the end of such period, and any true-up Matching
Contributions made under paragraph 4.7(b) for a quarter shall be made as soon as
practicable after such quarter, but in no event later than the due date
(including extensions) of the Employer's federal income tax return for the tax
year to which such contribution relates. Such Matching Contributions shall be
allocated to the Participant's Matching Contributions Account as of such
Valuation Date within the Plan Year as the Committee shall direct.
4.9 Matching Contributions Only For Permissible Tax-Saver Contributions. No
Matching Contributions shall be made with respect to (i) Excess Tax-Saver
Contributions (as defined in Section 5.8) distributable pursuant to Section 5.9,
(ii) Tax-Saver Contributions in excess of the elective deferral limit (as
defined in Section 5.4), or (iii) excess Annual Additions that are refunded
under Section 5.3. Any amounts paid into the Trust Fund with the intention that
they constitute Matching Contributions with respect to such amounts shall be
retained in the
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Trust Fund and applied to meet the obligation of the Employers to make
contributions under this Article IV.
4.10 Qualified Non-Elective Contributions. For each Plan Year, each Employer
shall contribute to the Trust Fund, in cash, such additional amounts (if any) as
the Committee, in its sole discretion, shall determine to be necessary or
desirable in order to meet the requirements of Sections 5.6 and 5.10 for such
Plan Year. Such additional contributions shall be made at such time as shall be
required by applicable Treasury Regulations. The Committee shall designate any
such amounts as "qualified non-elective contributions" (within the meaning of
section 401(m)(4)(C) of the Code) and shall determine the group of Eligible
Employees (who shall not be Highly Compensated Employees) eligible to share in
such Qualified Non-Elective Contributions, the method of apportionment under
which such Eligible Employees shall share in such contributions and the
Investment Funds in which such contributions shall initially be invested.
Anything in this Plan to the contrary notwithstanding, each Participant, at all
times, shall have a fully vested and nonforfeitable right to 100% of the amounts
in his Accounts attributable to Qualified Non-Elective Contributions, and such
contributions shall be treated as Tax-Saver Contributions for purposes of
determining when they may be distributed under the Plan, except that no such
amounts may be withdrawn prior to age 59 1/2 or separation from service, even on
account of hardship. At the direction of the Committee, Qualified Non-Elective
Contributions may be used to satisfy the Average Deferral Percentage test under
Section 5.6 or the Contribution Percentage test under Section 5.10 in accordance
with applicable Treasury Regulations.
4.11 Contributions for Military Service. Effective December 12, 1994,
notwithstanding any provisions of this Plan to the contrary, contributions
(including Profit Sharing Contributions) shall be made with respect to a period
in which an individual would have been a Participant but for his military
service to the extent required by Chapter 43 of Title 38 of the United States
Code (USERRA) and in accordance with section 414(u) of the Code. The amount of
any such Tax-Saver Contributions and of Matching Contributions in respect
thereof shall be based upon such individual's election made following his return
to employment with the Employer following such military service (and within the
time during which he had reemployment rights) in accordance with procedures
established by the Committee; provided that no such Tax-Saver Contributions may
exceed the amount the individual would have been permitted to elect to
contribute had the individual remained continuously employed by the Employer
throughout the period of such military service (and Matching Contributions shall
be limited accordingly). Such contributions (and Profit Sharing Contributions)
shall be taken into account as Annual Additions for purposes of Section 5.2 in
the Plan Year to which they relate, and for purposes of applying the elective
deferral limit set forth in Section 5.4 in the Plan Year to which they relate,
rather than in the Plan Year in which made, and shall be disregarded for
purposes of applying the limits described in Sections 5.6 and 5.10. Any such
contribution shall be made no later than five years from the date of such return
to employment or, if less, a period equal to three times the period of such
military service.
4.12 Rollovers. The Committee, in its sole discretion, may authorize Eligible
Employees to make Rollovers which qualify as rollover contributions under
applicable provisions of the Code. The Committee shall exercise such discretion
on a nondiscriminatory basis. All Rollovers shall
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be received and held in the Trust Fund, and shall be credited to the
Participant's Rollover Account as of such date as the Committee shall specify.
4.13 Profit Sharing Contributions. For each Plan Year the Employers shall
contribute to the Trust Fund such amount (if any) as shall have been determined
by the Company. Such determination may be made at any time prior to the due date
(including extensions) of the Company's Federal income tax return for its fiscal
year ending with or within such Plan Year.
4.14 Eligibility to Share in Profit Sharing Contributions. A Participant shall
be eligible to share in Profit Sharing Contributions for a Plan Year only if (a)
he has completed at least 1,000 Hours of Service during the Plan Year and he is
employed by an Employer or Affiliate on the December 31 of such year (or on the
latest earlier date during such year which the Committee determines is necessary
or appropriate in order for the Plan to satisfy the requirements of Section
410(b) of the Code), or (b) during such Plan Year his employment ended after he
(i) died, (ii) reached his Normal Retirement Date, (iii) reached age 60 and
completed at least 6 Years of Vesting Service, (iv) completed at least 20 Years
of Vesting Service or (v) incurred a Disability.
4.15 Allocation of Profit Sharing Contributions and Forfeitures. Profit Sharing
Contributions for a Plan Year shall be allocated as of the last business day of
such year to the Profit Sharing Accounts of all Participants who are eligible to
share in such contributions, in the ratio that each such Participant's
Compensation for the Plan Year bears to the total Compensation of all such
Participants for that Plan Year. For this purpose, Compensation paid before the
day participation began for purposes of Section 4.14 shall not be taken into
account.
4.16 Contributions May Not Exceed Amount Deductible. In no event shall
contributions under this Article IV for any taxable year exceed the maximum
amount (including amounts carried forward) deductible for that taxable year
under section 404(a)(3) of the Code, and all such contributions are conditioned
on their deductibility.
4.17 Form of Payment to Trustee. Profit Sharing, Tax-Saver, Matching and
Qualified Non-Elective Contributions shall be made in cash; provided that, to
the extent Profit Sharing, Matching or Tax-Saver Contributions are to be
invested in the Company Stock Fund, the Employers may contribute shares of
Common Stock having a fair market value (determined as of the date such
contributions are to be allocated to the Participants' Accounts) equal to the
amount of the contributions so required. Shares so contributed may be authorized
but unissued shares, treasury shares, shares purchased for the purpose of making
such contribution, or any combination of the foregoing. The Company is
authorized to contribute cash or Common Stock to the Plan on behalf of any other
Employer, and to the extent that the Company makes any such contribution, such
Employer shall reimburse the Company therefor.
4.18 Time of Payment of Profit Sharing Contribution. All Profit Sharing
Contributions shall be paid or delivered by the Employer to the Trustee by the
due date (including extensions) of the Employer's Federal income tax return for
its fiscal year to which such contributions relate.
4.19 Profits Not Required. Each Employer shall make all contributions to the
Plan without regard to current or accumulated earnings and profits.
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ARTICLE V
Limits on Contributions
5.1 Reduction of Contribution Rates. To conform the operation of the Plan to
sections 401(a)(4), 401(k)(3), 401(m)(2), 402(g) and 415(c), the Committee may
establish limits on Tax-Saver Contribution rates that may be elected by the
Participant, may unilaterally modify or revoke a Contribution Agreement, and may
reduce the rate of Matching Contributions (even to zero) payable with respect to
a Participant or group of Participants.
5.2 Limitations on Annual Additions. Notwithstanding any other provisions of the
Plan to the contrary, a Participant's Annual Additions (as defined below) for
any Plan Year shall not exceed an amount equal to the lesser of:
(a) $30,000 (as adjusted for cost-of-living increased under section 415(d)
of the Code); or
(b) 25 percent of the Participant's Total Earnings for that Plan Year,
calculated as if each Section 415 Affiliate (defined below) were an
Affiliate,
reduced by any Annual Additions for the Participant for the Plan Year under any
other defined contribution plan of an Employer or an Affiliate or Section 415
Affiliate, provided that, if any other such plan has a similar provision, the
reduction shall be pro rata. The term "Annual Additions" means, with respect to
any Participant for any Plan Year, the sum of all contributions allocated to a
Participant's Accounts under the Plan for such year, excluding Rollovers and any
Tax-Saver Contributions that are distributed as excess deferrals, but including
any Tax-Saver or Matching Contributions treated as excess contributions or
excess aggregate contributions under Sections 5.8 or 5.11. The term Annual
Additions shall also include employer contributions allocated for a Plan Year to
any individual medical account (as defined in section 415(l) of the Code) of a
Participant and any amount allocated for a Plan Year to the separate account of
a Participant for payment of post-retirement medical benefits under a funded
welfare benefit plan (as described in section 419A (d)(2) of the Code), which is
maintained by the Employer or an Affiliate or Section 415 Affiliate. "Section
415 Affiliate" means any entity that would be a Controlled Group Member if the
ownership test of section 414 of the Code was "more than 50%" rather than "at
least 80%".
5.3 Excess Annual Additions. If, as a result of a reasonable error in estimating
a Participant's Total Earnings, a reasonable error in determining the amount of
Tax-Saver Contributions that may be made with respect to a Participant under the
limits of section 415 of the Code or such other mitigating circumstances as the
Commissioner of Internal Revenue shall prescribe, the Annual Additions for a
Participant for a Plan Year exceed the limitations set forth in section 5.2, the
excess amounts shall be treated, as necessary, in accordance with Treasury
Regulations Section 1.415-6(b)(6)(ii), after any Tax-Saver Contributions, and
any income, losses, appreciation or depreciation attributable thereto, are first
returned to the Participant to reduce the excess amount. To the extent
applicable to the foregoing, reference to section 415(e)
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of the Code under prior versions of this Plan or any other plan merged into this
Plan shall be disregarded effective January 1, 2000.
5.4 Limitation on Elective Deferrals. Notwithstanding any other provision of
this Plan, no Tax-Saver Contributions may be made on behalf of any Participant
for a Plan Year in an amount in excess of the elective deferral limit for that
Plan Year. A Participant's Tax-Saver Contributions under Section 4.1 shall be
discontinued for the remainder of a Plan Year when, in the aggregate, they equal
the elective deferral limit for such Plan Year. For purposes of this Section
5.4, the "elective deferral limit" means the maximum amount permitted for that
Plan Year under section 402(g)(5) of the Code ($10,500 for the 2000 Plan Year),
reduced by the amount of elective deferrals (as defined in section 402(g)(3) of
the Code) made by the Participant during that calendar year under any plans or
agreements maintained by an Employer or by an Affiliate other than this Plan
(and, in the sole discretion of the Committee, any plans or agreements
maintained by any other employer, if reported to the Committee at such time and
in such manner as the Committee shall prescribe). The elective deferral limit
with respect to a Participant who has received a hardship withdrawal from his
Tax-Saver Contributions Account under this Plan as provided in Section 8.3, or a
hardship withdrawal with respect to his elective deferrals under any other plan
or agreement of any Employer or Affiliate, for his taxable year following the
taxable year of such withdrawal, shall be reduced by the amount of the elective
deferrals made by the Participant during the taxable year of the withdrawal
under this Plan and all such other plans and agreements. Each such other plan or
agreement shall be deemed amended by reason of this provision and the
Participant's execution of the Appropriate Form to the extent necessary to give
full effect to any reduction required under the preceding sentence.
5.5 Distribution of Excess Deferrals. If the elective deferrals made by a
Participant during his taxable year under this Plan and any other plans or
agreements maintained by an Employer or Affiliate exceed the elective deferral
limit, the excess Tax-Saver Contributions, adjusted for any income or loss
attributable to such Tax-Saver Contributions up to the date of distribution, in
the sole discretion of the Committee, may be distributed no later than April 15
of the following Plan Year. If the Participant's Tax-Saver Contributions Account
is invested in more than one Investment Fund, such distribution shall be made
pro rata, to the extent practicable, from all such Investment Funds. Any
Matching Contributions made with respect to such excess Tax-Saver Contributions
and allocated to his Matching Contributions Account shall be forfeited and used
to reduce Employer contributions. A Participant also may request that excess
Tax-Saver Contributions be distributed to him, by delivering a written claim to
the Committee by March 1 of the Plan Year of distribution. Such claim must
include (a) a statement that the Participant's elective deferral limit will be
exceeded unless the excess Tax-Saver Contributions are distributed and (b) an
acknowledgement that any Matching Contributions made with respect to such excess
Tax-Saver Contributions and allocated to his Matching Contributions Account will
be forfeited. The amount of excess deferrals to be distributed pursuant to this
Section 5.5 for a taxable year will be reduced by the amount of Excess
Contributions previously distributed with respect to such Participant for the
Plan Year beginning in such taxable year under Section 5.8.
5.6 Section 401(k) Limit on Tax-Saver Contributions. Notwithstanding anything in
this Plan to the contrary, effective January 1, 1997, Tax-Saver Contributions
for any Plan Year for a Participant who is a Highly Compensated Employee for
such year shall be reduced if and to the extent deemed necessary or advisable by
the Committee in order that the Average Deferral
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Percentage (as defined in Section 5.7) for Participants who are Highly
Compensated Employees for that Plan Year shall not exceed the percentage
determined in the following schedule, based on the Average Deferral Percentage
for that Plan Year for all Eligible Employees who are not Highly Compensated
Employees for that Plan Year:
Column 1 Column 2
Average Deferral Percentage Average Deferral
for Eligible Employees Percentage for Eligible
Who are Not Highly Compensated Employees Who Are
Employees for the Highly Compensated
Plan Year Employees for the Plan Year
(i) Less than 2% (i) Two (2) times the
percentage in Column 1
(ii) 2% - 8% (ii) The percentage in Column
1, plus 2%
(iii) More than 8% (iii) One and one-quarter
(1-1/4) times the
percentage in Column 1
5.7 Determination of Average Deferral Percentages. For purposes of Section 5.6,
the "Average Deferral Percentage" for any group of individuals who are eligible
to enter into a Contribution Agreement for a portion of a Plan Year means the
average of the individual ratios, for each person in such group, of (a) his
Tax-Saver Contributions (and Qualified Non-Elective Contributions, if
applicable) for the Plan Year to (b) his Total Earnings for such Plan Year. The
individual ratios, and the Average Deferral Percentage for any group of eligible
individuals, shall be calculated to the nearest one-hundredth of one percent
(0.01%).
5.8 Treatment of Excess Tax-Saver Contributions. For purposes of this Section
5.8, "Excess Contributions" means, with respect to any Plan Year, a dollar
amount equal to the excess of (a) the aggregate amount of Tax-Saver
Contributions actually paid into the Plan on behalf of Highly Compensated
Employees for such Plan Year, over (b) the maximum amount of Tax-Saver
Contributions permitted for such Plan Year under the limitations set forth in
Section 5.6, determined by reducing the deferral percentages under the leveling
method prescribed in applicable Treasury Regulations and calculating the
aggregate dollar amount of lost contributions from such reductions. The
aggregate amount of such lost contributions shall be the Excess Contributions
for the Plan Year, which shall be distributed in cash to Highly Compensated
Employees on the basis of the respective amounts of Tax-Saver Contributions (and
amounts taken into account as Tax-Saver Contributions) made on their behalf,
reducing the Highly Compensated Employee with the largest amount of Tax-Saver
Contributions first, and the next highest and so forth, until the entire amount
of such Excess Contributions is distributed. Excess Contributions for a Plan
Year with respect to any Highly Compensated Employee shall be distributed in
cash no later than March 15 of the following Plan Year if possible, and in any
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event by the close of such following Plan Year. If the Accounts of an affected
Participant are invested in more than one Investment Fund, such distribution
shall be made pro rata, to the extent practicable, from all such Investment
Funds. The amount of Excess Contributions distributed to any such Participant
shall be adjusted for any income or loss attributable to such Excess
Contributions up to the date of distribution. The amount of Excess Contributions
to be distributed for a Plan Year (determined before adjustment for any income
or loss allocable thereto) shall be reduced by the amount of excess elective
deferrals previously distributed pursuant to Section 5.5 for the same Plan Year.
5.9 Section 401(k)(3) Testing for Collective Bargaining Unit Employees. The
provisions of Sections 5.6, 5.7 and 5.8 shall be applied separately to employees
in any collective bargaining unit participating in the Plan. If employees in
more than one bargaining unit are eligible under the Plan, the Committee, in its
discretion, may apply such provisions separately to each separate collective
bargaining unit, on an aggregate basis with respect to all collective bargaining
units, or separately with respect to such collective bargaining units or
combinations of bargaining units as it determines, provided that such treatment
is determined on a basis that is reasonable and reasonably consistent from year
to year.
5.10 Section 401(m) Limit on Matching Contributions. Notwithstanding anything in
this Plan to the contrary, effective January 1, 1997, Matching Contributions for
any Plan Year for an Eligible Employee who is a Highly Compensated Employee
shall be reduced to the extent necessary in order that the Contribution
Percentage (defined in Section 5.11) for Eligible Employees who are Highly
Compensated Employees for that Plan Year does not exceed the percentage
determined in the following schedule, based on the Contribution Percentage for
the Plan Year for all Eligible Employees who are not Highly Compensated
Employees:
Column 1 Column 2
Contribution Percentage for Eligible Contribution Percentage for Eligible
Employees Who Are Not Highly Employees Who Are Highly
Compensated Employees for the Plan Year Compensated Employees for the Plan Year
(i) Less than 2% (i) Two (2) times the percentage in Column 1
(ii) 2% - 8% (ii) The percentage in Column 1, plus 2%
(iii) More than 8% (iii) One and one-quarter (1-1/4) times
the percentage in Column 1
The foregoing percentages in Column 2 shall be adjusted, as necessary, to
satisfy the aggregate limit set forth in Section 5.13.
5.11 Determination and Correction of Excess Matching Contributions. For purposes
of Section 5.10, the Contribution Percentage for any group of individuals means
the average of the individual ratios, for each person in such group who is
eligible to receive Matching
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Contributions during the Plan Year and who is not covered by a collective
bargaining agreement, of (a) his share of Matching Contributions for the Plan
Year to (b) his Total Earnings for the Plan Year. For purposes of calculating
part (a) of the Contribution Percentage, Qualified Non-Elective Contributions
and Tax-Saver Contributions may be taken into account in accordance with
applicable Treasury Regulations to the extent such contributions are not taken
into account for purposes of the Average Deferral Percentage test of Section
5.6. The individual ratios, and the Contribution Percentage for any group of
eligible individuals, shall be calculated to the nearest one-hundredth of one
percent (0.01%). If the Plan fails to meet the section 401(m) test for a Plan
Year. the total amount of excess Matching Contributions shall be determined, and
allocated to individuals within the Highly Compensated Employee group using the
same two-part leveling methodology as that described in Section 5.8. Excess
Matching Contributions shall be eliminated by (a) forfeiting such amounts that
are not vested or with respect to which the related Tax-Saver Contributions have
been returned under Section 5.5 or Section 5.8, or (b) if vested (and with
respect to which the Plan has retained the related Tax-Saver Contributions), by
paying such contributions to the Participant in cash no later than March 15 of
the following Plan Year, if at all possible, and in any event, no later than the
close of the following Plan Year. If any Account from which a distribution or
forfeiture is to be made pursuant to this Section 5.11 is invested in more than
one Investment Fund, such distribution or forfeiture shall be made pro rata, to
the extent practicable, from all such Investment Funds. The amount of excess
Matching Contributions distributed or forfeited under this Section 5.11 shall be
adjusted for any income or loss through to the date of distribution or
forfeiture.
5.12 Special Testing Rules. The following rules shall apply to the tests
described in Sections 5.6 and 5.10.
(a) Separate Testing for Early Eligibles. Effective for Plan Years
beginning on or after January 1, 1999, if the Company elects to apply
section 410(b)(4)(B) of the Code in determining whether the Plan meets the
requirements of section 401(k)(3)(A)(i) of the Code, the Company in
determining whether the Plan meets the limits of Section 5.6 and 5.10 may
exclude from consideration Eligible Employees (other than Highly
Compensated Employees) who have not yet met the minimum age and service
requirements of Code section 410(a)(1)(A).
(b) Multiple Arrangements for Highly Compensated Employees Combined. If
more than one plan providing for a cash or deferred arrangement, or for
matching contributions, or employee contributions (within the meaning of
sections 401(k) and 401(m) of the Code) is maintained by the Employer or an
Affiliate, the individual ratios of any Highly Compensated Employee who
participates in more than one such plan or arrangement shall, for purposes
of determining the Average Deferral Percentage (as defined in Section 5.7)
and Contribution Percentage (as defined in Section 5.11), be determined as
if all such arrangements were a single plan or arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of section 410(b) of the Code only if aggregated with one or
more other plans, then Sections 5.6 and 5.10 shall be applied by
determining the Average Deferral Percentage and Contribution Percentage of
Eligible Participants as if all such plans were a single plan. Plans may be
aggregated under this paragraph (c) only if they have the same plan year.
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5.13 Aggregate Limit Under Section 401(m) of the Code. For purposes of this
Article V, the Aggregate Limit for any Plan Year shall mean a percentage equal
to the greater of the sum described in (a) or (b) below:
(a) The sum of:
(i) 125 percent of the greater of (A) the Average Deferral Percentage
for the Plan Year for eligible individuals who are not Highly Compensated
Employees for such year or (B) the Contribution Percentage for such year of
such eligible individuals, and
(ii) two percent plus the lesser of (i) (A) or (i) (B) above; in no
event, however, shall the amount determined under this clause (ii) exceed
200 percent of the lesser of (A) or (B) above; or
(b) The sum of:
(i) 125 percent of the lesser of (A) the Average Deferral Percentage
for the Applicable Plan Year for Eligible Participants who are not Highly
Compensated Employees for such year or (B) the Contribution Percentage for
such year of such Eligible Participants, and
(ii) two percent plus the greater of (i) (A) or (i) (B) above; in no
event, however, shall the amount determined under this clause (ii) exceed
200 percent of the greater of (i) (A) or (i) (B) above.
The Aggregate Limit shall be calculated to the nearest one-hundredth of one
percent (0.01%). The Aggregate Limit shall not apply to reduce allocations
otherwise permissible for a Plan Year unless the Average Deferral Percentage and
the Contribution Percentage for Eligible Employees who are Highly Compensated
Employees for the Plan Year each exceeds 125% of the corresponding percentages
determined for Eligible Employees who are not Highly Compensated Employees for
the Plan Year. In that event, Tax-Saver Contributions for Participants who are
Highly Compensated Employees for the Plan Year shall be further reduced in order
that the sum of the Average Deferral Percentage plus the Contribution Percentage
for Participants who are Highly Compensated Employees for the Plan Year does not
exceed the Aggregate Limit.
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ARTICLE VI
Accounts and Investment Funds
6.1 Accounts. The Committee shall cause the following "Accounts" to be
maintained in the name of each Participant:
(a) a "Profit Sharing Contributions Account," which shall reflect Profit
Sharing Contributions, if any, made on his behalf and the income, losses,
appreciation, depreciation and depreciation and expenses attributable
thereto;
(b) a "Tax-Saver Contributions Account," which shall reflect Tax-Saver
Contributions, if any, made on his behalf and the income, losses,
appreciation, depreciation and expenses attributable thereto;
(c) a "Matching Contributions Account," which shall reflect Matching
Contributions made on his behalf and the income, losses, appreciation,
depreciation and expenses attributable thereto;
(d) a "Qualified Non-Elective Contributions Account," which shall reflect
Qualified Non-Elective Contributions, if any, made on his behalf, and the
income, losses, appreciation, depreciation and expenses attributable
thereto;
(e) a "Rollover Account," which shall reflect Rollover Contributions, if
any, made by him and the income, losses, appreciation, depreciation and
expenses attributable thereto;
(f) a "Buy Back Account", which shall reflect any previously-distributed
amounts returned by him upon his reemployment to avoid a forfeiture of the
unvested portion of his Accounts in accordance with Section 7.5.
In addition, the Committee may maintain subaccounts within the Tax-Saver
Contributions Account to distinguish contributions eligible to be matched from
contributions above the matching limit, as well as subaccounts to reflect
balances transferred to this Plan from another qualified plan that are subject
to special rules. The Accounts and subaccounts provided for in this Section 6.1
shall be for accounting purposes only, and there shall be no segregation of
assets within the Investment Funds among the separate Accounts. Reference to the
"balance" in a Participant's Accounts means the aggregate of the balances in the
subaccounts maintained in the Investment Funds attributable to those Accounts.
6.2 Allocation of Contributions. Subject to the provisions of Article V,
contributions shall be allocated as follows:
(a) Tax-Saver Contributions, Matching Contributions contributed with
respect to payroll periods, Rollover Contributions and amounts paid back to
avoid a forfeiture under Section 7.5 made on behalf of a Participant shall
be allocated to that Participant's
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appropriate Accounts as of the Valuation Date coinciding with the paycheck
or payment date to which such contribution relates.
(b) Matching Contributions made with respect to a calendar quarter shall be
allocated as of the last day of that quarter and Profit Sharing
Contributions and Qualified Non-Elective Contributions for a Plan Year
shall be allocated as of the last day of such Plan Year.
Notwithstanding the foregoing, unless the Committee establishes uniform rules to
the contrary, contributions made to the Plan shall share in the gains and losses
of the Investment Funds only when received by the Trustee with verified data.
6.3 Correction of Error. In the event of an error in the adjustment of a
Participant's Account, the Committee, in its sole discretion, may correct such
error by either crediting or charging the adjustment required to make such
correction to or against income and expenses of the Trust for the Plan Year in
which the correction is made or the Employer may make an additional contribution
to permit correction of the error. No Participant shall have a vested right to
any amounts erroneously credited to his Accounts. Except as provided in this
Section 6.3 the Accounts of other Participants shall not be readjusted on
account of such error.
6.4 Statement of Plan Interest. As soon as practicable after the last day of
each Plan Year and at such other intervals as the Committee may determine, the
Committee shall provide each Participant with a statement reflecting the
balances of his Accounts. Each Participant is responsible for reviewing his
statement and any Participant who discovers an error shall bring it to the
attention of the Committee within 90 days of receipt of his statement; after
such 90 days the Participant shall be deemed to have confirmed the accuracy of
the statement unless he has so notified the Committee of an error.
6.5 Investment Funds. The Committee shall establish and cause the Trustee to
maintain one or more "Investment Funds" or "Funds" for the investment of
Participants' Accounts. The Committee in its discretion may add additional
Investment Funds, may delete any Investment Fund or may change the investment
strategy or categories of permitted investments of any Investment Plan without
prior notice to Participants. One of the Investment Funds shall be a "Company
Stock Fund" invested in Common Stock and cash or cash equivalents held for
liquidity purposes.
6.6 Investment Fund Accounting. The Committee shall maintain or cause to be
maintained separate subaccounts for each Participant in each of the Investment
Funds to separately reflect his interest in each such Fund and the portion of
such interest that is attributable to each of his Accounts. The Committee, in it
sole discretion, may establish uniform rules for reporting the value of each
Participant's interest in an Investment Fund that has the effect of blending the
value of the cash or cash equivalents that comprise part of that Fund with the
value of the securities in which the Fund is primarily invested, as in "unit"
accounting.
6.7 Allocation of Fund Earnings and Changes in Value. As of each Valuation Date,
interest, dividends and changes in value and expenses of each Investment Fund
since the preceding Valuation Date shall be allocated to each Participant's
subaccounts invested in such Investment Fund by adjusting upward or downward the
balance of his subaccounts invested in
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such Investment Fund in the ratio which the subaccounts of such Participant
invested in such Investment Fund bears to the total of the subaccounts of all
Participants invested in such Investment Fund as of such Valuation Date,
excluding therefrom, for purposes of this allocation only, all Tax-Saver,
Matching, Profit Sharing, Qualified Non-Elective and Rollover Contributions and
amounts paid into Buy Back Accounts received since the preceding Valuation Date,
so that the total of the subaccounts of all Participants in each Investment Fund
shall equal the total value of such fund (exclusive of such contributions) as
determined by the Trustee in accordance with uniform procedures consistently
applied.
The Plan shall use a daily valuation system, which generally shall mean
that Accounts will be updated each business day to reflect activity for that
day, such as new contributions received by the Trustee, changes in Participant's
investment elections, and changes in the value of the Investment Funds under the
Plan. Such daily valuation shall be dependent upon the Plan's Recordkeeper
receiving complete and accurate information from a variety of different sources
on a timely basis. Since events may occur that cause an interruption in this
process, affecting a single Participant or a group of Participants, there shall
be no guarantee by the Plan that any given transaction will be processed on the
anticipated day. In the event of any such interruption, any affected transaction
shall be processed as soon as administratively feasible and no attempt shall be
made to reconstruct events as they would have occurred absent the interruption,
regardless of the cause, unless the Committee in its sole discretion directs the
Plan's Recordkeeper to do so.
6.8 Investment Fund Elections. A Participant may specify the percentage of
contributions subsequently credited to his Accounts that are to be invested in
each of the Investment Funds in accordance with uniform rules established by the
Committee. Any such investment direction shall be deemed to be a continuing
direction until changed by the Participant. During any period in which no such
direction has been given in accordance with rules established by the Committee,
contributions credited to a Participant shall be invested in the Investment
Funds as determined by the Committee. A Participant may modify his investment
direction prospectively by making a new investment election prior to the
effective time of the change in accordance with uniform rules established by the
Committee, which rules may be modified from time to time without prior notice.
The Plan is intended to satisfy the requirements of section 404(c) of ERISA
with respect to Participant's investment elections. To the extent permitted by
law, neither the Company, any Employer, the Committee, the Trustee nor any other
fiduciary of the Plan shall be liable for any loss resulting from a
Participant's exercise of his right to direct the investment of his Accounts.
6.9 Transfers Between Investment Funds. Subject to uniform rules established by
the Committee, each Participant may elect to transfer the value of his Accounts
held in any Investment Fund to any other Investment Fund then made available to
such Participant. Any such election shall be made prior to the time it is to be
effective in accordance with uniform rules established by the Committee. The
Committee may change any such investment election rules at any time without
prior notice to Participants.
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6.10 Liquidity. In order to accommodate investment changes and other elections
by Participants in a timely manner, a certain portion of each of the Investment
Funds may be held in cash or cash equivalents. The percentage of assets held in
each Investment Fund in cash or cash equivalents may differ from Fund to Fund
and from time to time, as considered appropriate by the Committee (or its
delegate). The rate of return of each Investment Fund will be a combination of
the short term earnings (or losses) on the cash portion of the Fund and the
earnings (or losses) of the securities or other investments in which such Fund
is primarily invested, determined in accordance with uniform rules established
by the Committee (or its delegate).
6.11 Voting and Tendering of Common Stock. Notwithstanding any other provisions
of the Plan:
(a) Effective January 1, 1999, Common Stock held by the Trustee shall be
voted as follows:
(i) Before each meeting of the Company's shareholders, each
Participant shall be furnished with a proxy statement for the meeting,
together with an appropriate form on which the Participant may provide
voting instructions (including instruction on matters not specified in the
proxy statement which may come before the meeting) for the Common Stock
allocated to the Participant's Accounts under the Plan on the Valuation
Date coinciding with or next preceding the record date for such meeting for
which the number of such shares has been provided to the Plan
administrator. Upon timely receipt of such instructions, such shares shall
be voted as instructed.
(ii) Common Stock for which the Trustee does not receive timely voting
directions shall be voted in the same proportion as all Common Stock held
under the Plan (including shares held in a separate trust fund) with
respect to which directions are received by the Trustee.
(b) Tender and exchange rights with respect to Common Stock held by the
Trustee shall be exercised as follows:
(i) Each Participant shall be furnished with a notice of any tender or
exchange offer for, or a request or invitation for tender of, Common Stock,
together with an appropriate form on which such Participant may instruct
the Trustee with respect to the tender or exchange of Common Stock
allocated to his Accounts. Common Stock as to which the Trustee has
received timely instructions shall be tendered or exchanged in accordance
with such instructions.
(ii) Common Stock allocated to Participant's Accounts for which
instructions are not timely received shall not be tendered or exchanged.
(c) The Committee and the Trustee shall take all reasonable steps necessary
to assure that Participants' individual directions shall remain
confidential. Notwithstanding the foregoing, the Trustee shall provide such
information with respect to the tender or exchange of Common Stock as the
Recordkeeper may require for operation of the Plan, if the Recordkeeper
agrees to keep such information confidential. The Trustee shall
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execute such ballots, proxies or other instruments as may be necessary or
desirable in order to effectuate the provisions of this Section 6.11.
6.12 Allocation Shall Not Vest Title. The fact that allocation is made and
amounts credited to the Accounts of a Participant shall not vest in such
Participant any right, title or interest in and to any assets except at the time
or times and upon the terms and conditions expressly set forth in this Plan, nor
shall the Trustee be required to segregate physically the assets of the Trust
Fund by reason thereof.
6.13 Committee Modifications. Notwithstanding the preceding provisions of this
Article VI, the Committee may in its sole discretion: (a) limit or restrict a
Participant's ability to change the allocation of his Accounts among the
Investment Funds and/or to designate the allocation of future contributions
among the Investment Funds, in order to conform to the practices and provisions
of any investment media held in any such Investment Fund; and (b) vary the
procedure otherwise provided for in this Article VI relating to the
determination and allocation of the investment return among Participants'
Accounts, in order to facilitate the administration of the Plan on an equitable
and practicable basis.
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ARTICLE VII
Vesting
7.1 Matching and Profit Sharing Contributions. A Participant's Matching and
Profit Sharing Contributions Accounts shall vest in accordance with the
schedules set forth below.
(a) Each Participant's Matching Contributions Account shall vest in
accordance with the following:
Years of Vesting Service Vested Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
(b) Subject to paragraph (c) below, the Profit Sharing Contributions
Accounts of Participants credited with an Hour of Service before January 1,
1997 shall vest in accordance with the following:
Years of Vesting Service Vested Percentage
Less than 2 0 percent
2 20 percent
3 40 percent
4 60 percent
5 80 percent
6 100 percent
(c) The Profit Sharing Contributions Accounts for Participants who are
credited with their first Hour of Service on or after January 1, 1997, or
who had an Hour of Service
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before such date but had ceased earning vesting service prior to such date
and had no vested interest under paragraph (b) as of such date, shall vest
as follows:
Years of Vesting Service Vested Percentage
Less than 5 0 percent
5 100 percent
7.2 Tax-Saver, Qualified Non-Elective, Buy Back and Rollover Contributions
Accounts. A Participant's interest in his Tax-Saver, Qualified Non-Elective, Buy
Back and Rollover Contributions Accounts shall be fully vested and
nonforfeitable at all times.
7.3 Accelerated Vesting. Notwithstanding the foregoing provisions of this
Article VII, a Participant shall have a fully vested, nonforfeitable interest in
all of his Accounts if, while employed by the Company and its Affiliates, he
attains his Normal Retirement Date, dies or incurs a Disability. In addition,
the Accounts of all affected employees shall become fully vested and
nonforfeitable in the event of the Plan's termination (in accordance with
Section 13.3), partial termination (in accordance with applicable Treasury
Regulations) or the complete discontinuance of Employer contributions to the
Plan.
7.4 Forfeitures. If a Participant's employment with the Company and its
affiliates terminates before he is 100% vested in his Profit Sharing
Contributions Account and/or Matching Contributions Account, the non-vested
portions of his Profit Sharing and Matching Contributions Accounts shall be
forfeited as of the Valuation Date coincident with or next following the earlier
of the day as of which he receives (or is deemed to receive) the vested portion
of his Accounts or the day he incurs five consecutive One Year Breaks in
Service. For purposes of the foregoing, if a Participant's vested interest in
his Accounts has a value of zero, the Participant shall be deemed to have
received a single sum distribution of such zero vested interest upon his
Termination Date.
7.5 Restoration of Forfeiture and Buy Back Requirement. If a Participant who has
forfeited the non-vested portion of his Profit Sharing and/or Matching
Contributions Accounts is reemployed by the Company or one of its Affiliates
before he incurs five consecutive One Year Breaks in Service, the amounts
forfeited shall be restored to his Profit Sharing and Matching Contributions
Accounts as soon as administratively practicable after his reemployment date, if
the Participant repays the full amount of the distribution to the Plan (other
than the portion, if any, attributable to his Rollover Account) before the
earlier of (a) five years after the first date on which the Participant is
reemployed or (b) the date the Participant incurs five consecutive One Year
Breaks in Service following the date of distribution.
The vested amount repaid by the Participant upon his reemployment pursuant
to this Section 7.5 shall be credited to a Buy Back Account in his name, his
interest in which shall always remain 100% vested and nonforfeitable.
The restoration of the non-vested portion of his Accounts shall be funded
by forfeitures, and to the extent forfeitures are inadequate for this purpose,
by a special contribution
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which his Employer shall be required to make for this purpose (without regard to
the otherwise applicable limitations of the Plan).
7.6 Subaccount for Restored Amount. Any portion of a Participant's Matching
Contributions Account or Profit Sharing Contributions Account which is restored
pursuant to Section 7.5 after being contingently forfeited shall be maintained
in a special subaccount within his Matching Contributions Account or Profit
Sharing Contributions Account, as applicable. In order to prevent an
acceleration of vesting in such a Participant's Matching Contributions Account
or Profit Sharing Contributions Account, the vested portion of any such
subaccount as of any subsequent time shall be expressed by the formula:
P(A+D)-D
where P is the Participant's vested percentage at such time determined without
regard to this sentence, A is the amount in such subaccount at such time, and D
is the amount of any distribution or partial distribution previously made to
him.
7.7 Application of Forfeitures. All forfeitures however occurring shall be
applied first to restore previously forfeited amounts as provided in Section
7.5, and to the extent not needed for this purpose, to reduce future Employer
contributions to the Plan.
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ARTICLE VIII
Withdrawals and Loans During Employment
8.1 Withdrawals At Age 59 1/2. Except as provided in Sections 8.2 and 8.3, there
shall be no withdrawals of amounts credited to a Participant's Accounts under
the Plan while a Participant remains employed by the Company and its Affiliates,
until the Participant attains age 59 1/2, at which time he may withdraw all or
any portion of the vested balance of his Accounts for any reason.
8.2 Withdrawal from Rollover Account. A Participant may elect to withdraw all or
a portion of his Rollover Account at any time, but no more frequently than once
in any Plan Year.
8.3 Hardship Withdrawals. Subject to the further provisions of this Article
VIII, if a Participant has not yet attained age 59 1/2 and he has already
received all other amounts available to him as a withdrawal under Section 8.2 or
as a loan under Section 8.7, the Participant may elect to make a hardship
withdrawal from his remaining Accounts (excluding any loan balances) in the
following amounts and order of priority: (a) all or a part of his Buy-Back
Account, (b) if his Buy-Back Account has been exhausted, all or a part of the
vested portion of his Matching Contributions Account; (c) if the vested portion
of his Matching Contributions Account has been exhausted, all or a part of the
vested portion of his Profit Sharing Contributions Account; and (d) if the
vested portion of his Profit Sharing Contributions Account has been exhausted,
all or some of his Tax-Saver Contributions and any earnings on such
contributions credited to his Accounts before 1989. No amount attributable to
Qualified Non-Elective Contributions may be withdrawn under this Section 8.3.
8.4 Hardship Defined. To qualify as a "hardship" withdrawal, the withdrawal must
be necessary to satisfy one or more of the following needs:
(a) medical expenses previously incurred by the Participant, or the
Participant's spouse or dependents (as defined in section 152 of the Code)
or expenses necessary in order for such persons to obtain medical care
described in section 213(d) of the Code (which expenses will never be
covered by insurance);
(b) tuition payments, related educational fees (not including books and
supplies), and room and board expenses, for the next 12 months of
post-secondary education of a Participant or a Participant's spouse, child
or dependent (as defined in section 152 of the Code);
(c) costs (other than mortgage payments) directly related to the purchase
of the principal residence of a Participant;
(d) payments necessary to prevent the eviction of the Participant from the
Participant's principal residence or foreclosure on the mortgage on that
residence; or
(e) such other expense as the Secretary of Treasury indicates qualifies as
a hardship in Treasury Regulations.
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In addition, a withdrawal will not be considered to be made on account of
hardship unless it is necessary to meet the condition of hardship affecting such
Participant. Before allowing a hardship withdrawal, the Committee shall require
a Participant to first take all other amounts available to him as a loan or a
distribution other than on account of hardship as herein defined, under this
Plan and all other plans maintained by any Employer or Affiliate. A Participant
making a hardship withdrawal shall be subject to the mandatory suspension and
limitation adjustment of Sections 4.6 and 5.4. A withdrawal made pursuant to the
foregoing restrictions and penalties shall be deemed to be necessary to
alleviate the Participant's condition of hardship.
8.5 Vesting Adjusted to Reflect Withdrawals. Notwithstanding any other provision
of this Plan, in the event that a Participant makes a withdrawal from his
Matching Contributions Account or Profit Sharing Contributions Account at a time
when he is less than 100% vested in such Account, and if his employment
subsequently terminates (or he requests another withdrawal therefrom) prior to
the time his interest in such Account is 100% vested, such Participant's vested
interest in his Matching Contributions Account and/or Profit Sharing
Contributions Account shall be adjusted to reflect such prior withdrawal in
accordance with the principles applicable to restored subaccounts under Section
7.6, in order to avoid an acceleration of vesting in his Matching Contributions
Account or Profit Sharing Contributions Account.
8.6 Withdrawal Payment. A withdrawal request under Section 8.2 or Section 8.3
shall be made by filing the Appropriate Form with the Committee, within such
time as the Committee may prescribe. The withdrawal shall be effective as of the
Valuation Date on which the Recordkeeper processes the withdrawal and, subject
to obtaining such consents and waivers as the Committee considers necessary to
comply with applicable Treasury Regulations, payment of the withdrawn amount
shall be made on or as soon as administratively practicable after such Valuation
Date. The Appropriate Form with respect to a hardship withdrawal from his
Tax-Saver Contributions Account shall include an acknowledgement of the
mandatory suspension of contributions described in Section 4.6, and to a similar
suspension of "elective deferrals" (as defined in section 402(g)(3) of the Code)
and of employee contributions under this Plan and each other qualified and
nonqualified plan of deferred compensation (excluding mandatory employee
contributions under any defined benefit plan), or stock option, stock purchase,
or similar plans, of any Employer or Affiliate until the first anniversary of
the date of such withdrawal, and to the adjustment described in Section 5.4 of
the "elective deferral limit" with respect to the Participant for the year
following the year of the withdrawal. Each such other plan shall be deemed
amended by reason of this provision and the Participant's execution of the
Appropriate Form to the extent necessary to give full effect to such agreement.
A Participant may direct on the Appropriate Form, at such time and in such
manner as the Committee may prescribe and subject to Committee consent, the
proportions in which any withdrawal from his Accounts pursuant to this Article
VIII shall be allocated among the Investment Funds; failing such direction or
consent, the allocation shall be made pro rata.
8.7 Loans. A Participant who is a "party in interest" with respect to the Plan
(within the meaning of section 3(14) of ERISA), may borrow from the vested
balance of his Accounts, subject to such uniform rules as the Committee shall
establish from time to time. No more than one loan may be outstanding at the
same time. The loan request shall be made on the Appropriate Form and submitted
to the Recordkeeper together with such application fee as the Committee may
authorize (if any). The Recordkeeper shall notify the Participant in writing
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within a reasonable time of the approval or denial of such loan request, and
such notification by the Recordkeeper shall be final. The Committee may at any
time suspend authorization for future loans to Participants, but no such
suspension shall affect any loan then outstanding under this Section 8.7.
8.8 Loan Requirements. A loan pursuant to Section 8.7 shall not be made to a
Participant unless such loan meets all of the following requirements:
(a) Amount. Such loan must be in an amount of not less than one thousand
dollars ($1,000), and shall not exceed the lowest of (i) fifty thousand
dollars ($50,000), (ii) one-half of the fully vested balance of the
Participant's Accounts, or (iii) such other amount as may be determined by
the Committee in the event that the Participant's Accounts are invested (in
whole or in part) in an Investment Fund that restricts the liquidation of
investments to fund Participant loans or otherwise. The limitations under
each of clause (i) and (ii) above shall be reduced by the outstanding
balance (if any) of all other loans to the Participant from any qualified
plan (within the meaning of Section 401(a) of the Code maintained by the
Company or any Affiliate. The fifty thousand dollars ($50,000) in clause
(i) above shall be further reduced by the excess, if any, of the highest
outstanding loan balance of all loans described in the preceding sentence
during the twelve (12) month period preceding the loan, over the
outstanding loan balance of all loans described in the preceding sentence.
If any outstanding balance of a loan from another plan is required to be
taken into account under clause (i) or (ii) above, the value of the
Participant's interest under that plan from which such loan was made shall
also be taken into account under clause (ii) above.
(b) Adequate Security. Such loan must be adequately secured by the
assignment, as collateral security, of the value of the Participant's fully
vested Accounts. If the Loan Administrator subsequently determines that the
loan is no longer adequately secured, he may require additional security in
such form as he deems acceptable.
(c) Interest. Such loan must bear interest, payable at quarterly intervals
(or more frequent intervals, if the Recordkeeper shall so require), at a
rate commensurate with the interest rates charged by persons in the
business of lending money for loans which would be made under similar
circumstances. The Recordkeeper shall at regular intervals (but no less
frequently than quarterly) determine such rate on the basis of a review of
pertinent information.
(d) Repayment Term. Such loan must provide for substantially level
amortization (within the meaning of section 72(p)(2)(C) of the Code) with
payments made at least quarterly for a period no longer than five (5)
years. If a Participant terminates employment with the Employers and
Affiliates, his loan shall accelerate and become immediately due and
payable as of the Participant's Termination Date.
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Notwithstanding the foregoing, a Participant shall have the right to prepay
the full outstanding balance of his loan without penalty, on the first day
of any calendar quarter or such other Valuation Date as the Committee may
direct.
(e) Promissory Note. Such loan must be evidenced by a promissory note
executed by the Participant and, if the Recordkeeper shall in his sole
discretion determine, also executed by the Participant's spouse. Such note
shall provide that if the Participant is actively employed by an Employer,
the loan is to be repaid by regular deductions from his pay in each pay
period in which the loan is outstanding, and shall contain such terms and
provisions as the Recordkeeper in his sole discretion shall determine.
8.9 Valuation for Loan Processing. The Recordkeeper will generally process a
loan based on the Valuation Date immediately preceding receipt of the loan
request, provided that the portion of the Participant's Accounts that may be
borrowed pursuant to paragraph 8.8(a) shall be fixed as of the Valuation Date
coinciding with the date the loan distribution is actually processed by the
Recordkeeper.
8.10 Funding of Participant Loans. A Participant's loan shall be funded solely
by reduction of the Participant's Account balances as of the effective date of
the loan. Such reduction shall affect the Participant's Accounts in the
following order: (a) Rollover Account (if any); (b) Buy Back Account (if any);
(c) Matching Contributions Account; (d) Profit Sharing Contributions Account and
(e) Tax-Saver Contributions Account. The promissory note executed pursuant to
paragraph 8.8(c) by a Participant who receives a loan shall be held by the
Trustee as a Trust asset and allocated solely to such Participant's Account. For
all purposes hereunder, the value of such promissory note shall be considered to
be the outstanding unpaid balance of the note. A loan to a Participant shall be
his individual directed investment.
8.11 Allocation of Loan Among Investment Funds. If a Participant's Account is
invested in more than one Investment Fund, the loan proceeds shall be obtained
from each Investment Fund pro rata in accordance with uniform rules established
by the Committee.
8.12 Loan Repayment. Payments of principal and interest on a Participant's loan
shall be used to restore the Participant's Accounts from which the loan was made
in the following order: (a) Tax-Saver Contributions Account; (b) Profit Sharing
Contributions Account (c) Matching Contributions Account; (d) Buy-Back Account;
and (e) Rollover Account. Such payments shall be allocated to such Investment
Funds as the Participant shall have designated for future contributions. If a
Participant fails to give timely and complete instructions as to the allocation
among Investment Funds, the payment of principal and interest shall be invested
in such Investment Fund or Funds as the Committee may direct.
8.13 Loan Expenses. The Recordkeeper may determine to charge any fees, taxes or
other expenses (including, without limitation, any asset liquidation charge or
similar extraordinary expense) incurred in connection with a loan to the
Accounts of the Participant obtaining such loan. Such charges shall be imposed
on a uniform and nondiscriminatory basis.
8.14 Disposition of Loan Upon Certain Events. In the event that distribution of
a Participant's Accounts is to be made under the terms of the Plan before the
Participant repays an
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outstanding loan, the Trustee shall reduce the value of the Participant's
Accounts by the amount of the Participant's outstanding loan before making a
distribution to the Participant or his Beneficiary.
8.15 Compliance with Applicable Law. The Recordkeeper shall take such actions as
he may deem appropriate in order to assure full compliance with all applicable
laws and regulations relating to Participants loans and the granting and
repayment thereof.
8.16 Loan Default. A loan made pursuant to Section 8.7 shall be in default if a
scheduled payment of principal or interest is not received by the Recordkeeper
by the end of the calendar quarter following the quarter in which the payment
was due. Notwithstanding the foregoing, a Participant who terminates employment
with the Company and its Affiliates must repay the entire balance of his loans
within 30 days of his termination of employment to avoid a default, whether or
not such Participant is receiving an actual distribution of any other part of
his Account in connection with such termination. Upon default of the loan, the
entire outstanding principal amount and accrued interest of the loan shall
become immediately due and payable, and the Plan may execute upon the its
security interest in the Participant's Accounts to satisfy the debt; provided,
however, that the execution shall occur only when, and to the extent that, the
Participant's Accounts become distributable to the Participant consistent with
the requirements for qualification of the Plan under section 401(a) of the Code.
Furthermore, the Committee may take any other action it deems appropriate to
obtain payment of the outstanding amount of principal and accrued interest,
which may include accepting payments of principal and interest that were not
made on schedule and permitting the loan to remain outstanding under its
original payment schedule. Any costs incurred by the Plan in collecting, or
attempting to collect, amounts in default shall be charged against the
Participant's Accounts.
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ARTICLE IX
Distributions to Participants After Termination of Employment
9.1 Distributions to Participants After Termination of Employment. When a
Participant's Termination Date occurs (for a reason other than his death), his
Accounts shall be distributed in accordance with the following provisions of
this Section 9.1, unless the Participant is reemployed by the Company or an
Affiliate before such distribution is processed.
(a) Effective January 1, 1998, if the value of the Participant's Accounts
does not exceed $5,000, his Accounts will be distributed to him in a lump
sum payment as soon as practicable after the Plan's Recordkeeper is
notified of his termination of employment. Whether this paragraph (a)
applies and the amount of the payment to be made hereunder will be
determined as of the Valuation Date coinciding with the date the payment is
processed.
(b) If the value of the Participant's Accounts exceeds $5,000, the
Participant may withdraw his Accounts on the Distribution Date (as defined
in paragraph (c) below) he elects, in either of the following forms of
payment he selects: (i) a lump sum or (ii) monthly, quarterly, semi-annual
or annual installments (to be as nearly equal as practicable) for a period
not to exceed his life expectancy or the joint life expectancy of himself
and his Beneficiary.
(c) A "Distribution Date" shall mean the date as of which a payment is made
to the Participant pursuant to this Section 9.1, without regard to any
administrative delay. A Participant may elect that his Distribution Date
occur as soon as practicable after his Termination Date or on any Valuation
Date thereafter, but not later than the April 1 following the year in which
he attains age 70 1/2, provided that no election of Distribution Date will
be valid if it is made more than 90 days prior to such date.
Any election under paragraph (b) or (c) above shall be modified, as necessary,
to conform to Section 9.11.
9.2 Distribution Only Upon Separation From Service. Notwithstanding any other
provision of the Plan to the contrary, a Participant may not commence
distribution of the portion of this Accounts attributable to his Tax-Saver
Contributions pursuant to this Article IX prior to the date he attains age 59
1/2 or becomes Disabled, even though his employment with the Company and its
Affiliates has terminated, unless or until he also has a "separation from
service" within the meaning of section 401(k)(2)(B) of the Code. The foregoing
restriction shall not apply, however, if the Participant's termination of
employment occurs in connection with either (a) the sale by the Company or an
Employer to an unrelated corporation of at least 85% of the assets of a trade or
business or (b) the disposition of its interest in a subsidiary to an unrelated
person or persons, and the requirements for distribution under applicable
Treasury Regulations on account of such sale or disposition are met.
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9.3 Form of Payment. Distributions from the Company Stock Fund shall be made in
cash unless the Participant elects to have all or a portion of his interest in
such fund distributed in shares of Common Stock. Distributions from the other
Investment Funds shall be made in cash, unless the Participant elects that some
or all of the balances of such funds be transferred to the Company Stock Fund
and distributed in shares of Common Stock in accordance with uniform rules
established by the Committee.
9.4 Direct Rollover Option. In accordance with uniform rules established by the
Committee, each Participant, surviving spouse of a Participant or alternate
payee under a qualified domestic relations order within the meaning of section
414(p) of the Code who is due to receive an eligible rollover distribution from
the Plan may direct the Trustee to transfer all or a portion of such
distribution directly to another eligible retirement plan. For purposes of this
Section 9.4, the terms "eligible rollover distribution" and "eligible retirement
plan" as applied to any such individual shall have the meaning accorded such
terms under section 401(a)(31) of the Code (or any successor provision thereto)
and applicable regulations thereunder.
9.5 Put Option. If Common Stock acquired by the Plan, when distributed, is not
readily tradable on an established market, a Participant who is entitled to a
distribution of such stock shall have the right to require that the Company
repurchase it under a fair valuation formula in compliance with any applicable
regulations. Such put option shall be exercisable for a period of at least sixty
(60) days following the date of distribution of such Common Stock, and if the
put option is not exercised within such sixty (60) day period, for an additional
period of at least sixty (60) days in the following Plan Year as provided in
applicable regulations. The Company shall make full payment of the purchase
price for Common Stock which is the subject of a put option that is properly
exercised by a Participant within 30 days after the Participant surrenders to
the Company certificates representing such Common Stock, duly endorsed or
accompanied by a stock power duly executed, in either case with his signature
duly guaranteed, and accompanied by all required stock transfer stamps; provided
that, in the event the shares put to the Company were distributed to the
Participant as part of a total distribution, the Company may elect to make such
payment in substantially equal annual installments over a period beginning
within 30 days after the date the put option is exercised and not exceeding five
years if the Company provides adequate security and pays a reasonable interest
rate with respect thereto.
9.6 Facility of Payment. Notwithstanding the provisions of Sections 9.1 or 10.1,
if in the Company's opinion, a Participant or other person entitled to benefits
under the Plan is under a legal disability or is in any way incapacitated so as
to be unable to manage his financial affairs, the Committee may direct the
Trustee to make payment to a relative or friend of such person for his benefit
until claim is made by a conservator or other person legally charged with the
care of his person or his estate. Thereafter, any benefits under the Plan to
which such Participant or other person is entitled shall be paid to such
conservator or other person legally charged with the care of his person or his
estate.
9.7 Interests Not Transferable. The interests of Participants and other persons
entitled to benefits under the Plan are not subject to the claims of their
creditors and may not be voluntarily or involuntarily assigned, alienated or
encumbered, except in the case of a properly documented levy of the Internal
Revenue Service, required tax withholding or qualified domestic relations orders
that relate to the provision of child support, alimony or marital rights of a
spouse, child or
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other dependent and which meet such other requirements as may be imposed by
section 414(p) of the Code or applicable Treasury Regulations. Notwithstanding
any other provision of the Plan to the contrary, distribution of the entire
portion of a Participant's Accounts awarded to his alternate payee may be made
in a lump sum payment, as soon as practicable after the Committee (or its
delegate) determines that such order is qualified, without regard to whether the
Participant would himself be entitled under the terms of the Plan to withdraw or
receive a distribution of such lump sum amount at that time, but only if the
terms of the order provide for such immediate distribution either specifically
or by general reference to any manner of distribution permitted under the Plan.
9.8 Absence of Guaranty. None of the Company, the Trustee, or the Employers in
any way guarantee the assets of the Plan from loss or depreciation, or guarantee
any payment to any person. The liability of the Trustee to make any payment is
limited to the available assets of the Plan held under the Trust.
9.9 Missing Participants or Beneficiaries. Each Participant and each designated
Beneficiary must file with the Recordkeeper from time to time in writing his
post office address and each change of post office address. Any communication,
statement or notice addressed to a Participant or designated Beneficiary at his
last post office address filed with the Recordkeeper, or, in the case of a
Participant, if no address is filed with the Recordkeeper, then at his last post
office address as shown on the Employer's records, will be binding on the
Participant and his designated Beneficiary for all purposes of the Plan. None of
the Company, the Employers, or the Trustee will be required to search for or
locate a Participant or designated Beneficiary.
9.10 Doubt as to Right to Payment. In the event that at any time any doubt
exists as to the right of any person to any payment hereunder or the amount or
time of such payment (including, without limitation, any case of doubt as to
identity, or any case in which any notice has been received from any other
person claiming any interest in amounts payable hereunder, or any case in which
a claim from other persons may exist by reason of community property or similar
laws), the Committee shall be entitled, in its discretion, to direct the Trustee
to hold such sum as a segregated amount in trust until such right or amount or
time is determined or until order of a court of competent jurisdiction, or to
pay such sum into court in accordance with appropriate rules of law in such case
then provided, or to make payment only upon receipt of a bond or similar
indemnification (in such amount and in such form as is satisfactory to such
Committee).
9.11 Limits on Commencement and Duration of Payments. Except as expressly
provided below, the following provisions shall be applied in accordance with
sections 401(a)(9) and 401(a)(14) of the Code and applicable Treasury
Regulations and shall act as a restriction on (and not an enlargement of ) any
other distribution provisions set forth herein:
(a) Unless the Participant elects otherwise (which election may be
passive), payment to a Participant under this Article IX shall be made or
commenced not later than the 60th day after the close of the Plan Year in
which occurs the later of his Termination Date or his Normal Retirement
Date.
(b) Distribution of the Participant's Accounts shall be made or shall
commence no later than the April 1 following the calendar year in which
later of the following occurs:
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(i) the Participant attains age 70 1/2 or (ii) the Participant terminates
employment with the Company and its Affiliates.
(c) A Participant who commences payment of his Accounts pursuant to
paragraph (b) may choose his form of payment in accordance with paragraph
9.1(b), subject to the remaining provisions of this Section 9.11.
(d) Distribution shall be made over the life of the Participant or over the
lives of the Participant and his Beneficiary (or over a period not
extending beyond the life expectancy of such Participant or the point life
expectancies of the Participant and his Beneficiary). For this purpose,
life expectancy will not be recalculated each year.
(e) If a Participant dies after distribution of his Accounts has begun, the
remainder of his Accounts shall be distributed to his Beneficiary at least
as rapidly as under the payment schedule commenced before his death.
(f) If a Participant dies before distribution of his Accounts has begun,
distribution to his Beneficiary shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death,
provided that this five-year rule shall not apply to a natural person
designated as a Beneficiary by the Participant or under the terms of the
Plan, if
(i) the Participant's Accounts will be distributed over the life (or
life expectancy) of such designated Beneficiary, and
(ii) the distribution to the Beneficiary begins not later than
December 31 of the calendar year following the calendar year of the
Participant's death or, if the Beneficiary is the Participant's
surviving spouse, not later than the December 31 following the
calendar year in which the Participant would have attained age 70 1/2.
(g) If the Participant's surviving spouse is his Beneficiary and the spouse
dies before distribution to the spouse begins, paragraph (f) shall be
applied as though the spouse were the Participant.
9.12 Contributions Subsequent to Distribution. Any Employer contribution made
subsequent to the complete distribution of the balance of a Participant's
Accounts shall be paid to the Participant (or his Beneficiary, if applicable) as
soon as practicable after the date of such contribution.
9.13 Payments to Minors. If at any time a person entitled to receive any payment
hereunder is a minor, such payment, in the sole discretion of the Committee, may
be made for the benefit of such minor to his parent, guardian or the person with
whom he resides, or to the minor himself, and the release of any such parent,
guardian, person or minor shall be a valid and complete discharge for such
payment.
9.14 Identity of Proper Payee. The determination of the Committee as to the
identity of the proper payee of any payment and the amount properly payable
shall be conclusive, and payment
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in accordance with such determination shall constitute a complete discharge of
all obligations on account thereof.
9.15 Inability to Locate Payee. Notwithstanding any other provision of the Plan,
in the event that the Committee cannot locate any person to whom a payment is
due under this Plan, the benefit in respect of which such payment is to be made
shall be forfeited at such time as the Committee shall determine in its sole
discretion (but in all events prior to the time such benefit would otherwise
escheat under any applicable law); provided that, such benefit shall be
reinstated (from current forfeitures (if any), from investment gains within the
Trust Fund or from a special Employer contribution, as determined by the
Committee), if such person subsequently makes a valid claim for such benefit
prior to termination of the Plan.
9.16 Estoppel of Participants and Their Beneficiaries. The Employers, Committee
and Trustee may rely upon any certificate, statement or other representation
made to them by any employee, Participant, spouse or other beneficiary with
respect to age, length of service, leave of absence, date of cessation of
employment, marital status, or other fact required to be determined under any of
the provisions of this Plan, and shall not be liable on account of the payment
of any moneys or the doing of any act in reliance upon any such certificate,
statement or other representation. Any such certificate, statement or other
representation made by an employee or Participant shall be conclusively binding
upon such employee or Participant and his spouse or other beneficiary, and such
employee, Participant, spouse or beneficiary shall thereafter and forever be
stopped from disputing the truth and correctness of such certificate, statement
or other representation. Any such certificate, statement or other representation
made by a Participant's spouse or other beneficiary shall be conclusively
binding upon such spouse or beneficiary, and such spouse or beneficiary shall
thereafter and forever be stopped from disputing the truth and correctness of
such certificate, statement or other representation.
9.17 Community Property Laws. Notwithstanding any provision to the contrary
contained in this Plan, the Committee may require consent of a Participant's
spouse to any election (or revocation of an election) with respect to the form
of payment of the Participant's benefits under the Plan, if the Committee, in
its sole discretion, deems such consent necessary or advisable in light of the
possible application thereto of community property or similar laws.
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ARTICLE X
Distribution Upon Death of Participant
10.1 Distribution to Beneficiary. If a Participant dies before his vested
Account balance has been fully paid to him, payment of the remainder of such
vested balance shall be paid to his Beneficiary in accordance with the
following:
(a) If the Participant dies before payment to him has commenced, his
Beneficiary may elect, subject to Section 9.11, either (i) a lump sum
payment, (ii) monthly, quarterly, semi-annual or annual installment
payments for a period not exceeding the Beneficiary's life expectancy, or
(iii) if the Beneficiary is the Participant's Surviving Spouse, an annuity
purchased for the Beneficiary from a commercial insurance company,
commencing as of such Distribution Date the Beneficiary elects that is not
later than the date that would have been the Participant's Normal
Retirement Date (or as soon as practicable after the Participant's death if
his death occurs after his Normal Retirement Date), provided that if the
Participant's vested Account balance is $5,000 or less, payment shall
automatically be made in a lump sum as soon as practicable after the
Participant's death is confirmed, and provided further that if the
Beneficiary does not elect payment in one of the permitted forms in a
timely manner so as to comply with this paragraph (a) and Section 9.11, the
Beneficiary shall be paid in a lump sum..
(b) If the Participant dies after commencing to receive installment
payments in accordance with the clause 7.1(b)(ii), payment shall continue
in the same form to his Beneficiary.
10.2 Designation of Beneficiary. Subject to the further provisions of this
Article X, each Participant may designate, at such time and in such manner as
the Committee shall prescribe, a Beneficiary or Beneficiaries (who may be a
natural person, executor, administrator, trust, foundation or other entity) to
receive the vested balance of his Accounts after his death. Such designation of
a Beneficiary or Beneficiaries shall not be effective for any purpose unless and
until it has been filed by the Participant with the Committee, provided,
however, that a designation mailed by the Participant to the Committee prior to
death and received by it after his death shall take effect upon such receipt,
but prospectively only and without prejudice to any payor or payee on account of
any payments made before receipt by the Committee. Notwithstanding the
foregoing, a Participant's sole Beneficiary shall be his Surviving Spouse, if
the Participant has a surviving spouse, unless the Participant has designated
another Beneficiary with Spousal Consent. For purposes of this Section 10.2 the
term "Spouse" or "Surviving Spouse" shall mean a Participant's legal spouse as
of the date of his death. A former legal spouse will be treated as the
Participant's Spouse to the extent provided in a qualified domestic relations
order (as defined in section 414(p) of the Code). The term "Spousal Consent"
shall mean written consent by a Participant's Spouse to an election, Beneficiary
designation or similar action by the Participant. A Spousal Consent shall be
ineffective unless it acknowledges the effect of such election, Beneficiary
designation or action and is witnessed by a notary public and, with respect to
Spousal Consent pertaining to a Beneficiary designation, unless such designation
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specifically identifies the Participant's Beneficiaries (and alternate
Beneficiaries) by name or class. If the Committee is satisfied that such Spousal
Consent cannot be obtained because there is no Spouse, because the Spouse cannot
be located, or because of other circumstances which may be permitted under
applicable law, Spousal Consent shall be deemed to have been given. Any consent
or deemed consent with respect to a Spouse which satisfies the foregoing
requirements shall be effective only with respect to the Spouse by whom given
(or deemed to be given), and may not be revoked by such Spouse with respect to
the election, Beneficiary designation or other action to which such consent
pertains.
10.3 Change of Beneficiary. A Participant, from time to time in such manner as
the Committee shall prescribe, may change his designated Beneficiary or
Beneficiaries, but any such designation which has the effect of naming a person
other than the Surviving Spouse as sole Beneficiary is subject to the Spousal
Consent requirement of Section 10.2.
10.4 Failure to Designate Beneficiary. If a Participant has failed to properly
designate a Beneficiary to receive the Participant's death benefits, or a
Beneficiary previously designated has predeceased the Participant and no
alternative designation has become effective, such benefits shall be distributed
to the Participant's Surviving Spouse, if any, or if no Spouse survives the
Participant, to the Participant's estate.
10.5 Proof of Death. The Committee, as a condition precedent to making payment
to any Beneficiary, may require that a death certificate, burial certificate or
other evidence of death, and/or a court order or other evidence of the status
and authority of the Beneficiary or of any legal representative of the
Beneficiary, acceptable to it be furnished.
10.6 Discharge of Liability. If distribution in respect of a Participant's
Accounts is made to a person reasonably believed by the Committee or its
delegate (taking into account any document purporting to be a valid consent of
the Participant's spouse, or any representation by the Participant that he is
not married) to properly qualify as the Participant's Beneficiary under the
foregoing provisions of this Article X, the Plan shall have no further liability
with respect to such Accounts (or the portion thereof distributed).
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ARTICLE XI
Trust Fund
11.1 Trust Agreement. By adopting the Plan, each Employer shall automatically
become a party to the Trust Agreement between the Company and the Trustee under
which the Trustee shall receive the contributions made by the Employers under
the Plan and shall hold, invest and distribute the Trust Fund in accordance with
the terms and provisions of the Trust Agreement. Any and all rights or benefits
which may accrue to any person under the Plan shall be subject to all the terms
and provisions of the Trust Agreement. In the event that the Trustee shall be a
bank or similar financial institution supervised by the United States or a
State, the Committee, in its discretion, may authorize the Trustee to invest all
or a part of the Plan's assets in deposits which bear a reasonable interest rate
in such bank or financial institution.
11.2 No Diversion of Trust Fund. The Trust Fund shall in no event be used for or
diverted to purposes other than for the exclusive benefit of Participants and
their Beneficiaries (including the payment of the expenses of the administration
of the Plan and of the Trust Fund), except that, at the Committee's request, a
contribution that is made by an Employer by a mistake of fact may be returned to
such Employer within one year after the payment of the contribution.
11.3 Duration of Trust. The Trust shall continue for such time as may be
necessary to accomplish the purposes for which it is created.
11.4 Company as Agent. The Company is hereby authorized to act as agent for all
other Employers in dealings with the Trustee under the Plan.
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ARTICLE XII
Administration
12.1 Committee. A committee (the "Committee") consisting of not less than two
(2) members shall be appointed by the Board of Directors to administer the Plan
and oversee the investment of its assets. Each member of the Committee may
resign or may be removed at any time by the Board of Directors. In the event
that a vacancy or vacancies shall occur on the Committee, the remaining member
or members shall act as the Committee until the Board of Directors fills such
vacancy or vacancies. A member of the Committee shall serve without compensation
for his services as such member, and in the event of the removal, death or
resignation of any member, his successor shall be appointed by the Board of
Directors. No person shall be ineligible to be a member of a Committee because
he is, was or may become entitled to benefits under the Plan or because he is a
director and/or officer of an Employer or Affiliate or a Trustee; provided, that
no member of a Committee shall participate in any determination by the Committee
specifically relating to the disposition of his own Account. The members of the
Committee shall serve without bond except to the extent required by applicable
law.
12.2 Committee Powers and Authority. Except as otherwise expressly provided in
the Plan or in the Trust Agreement, or by the Board of Directors:
(a) The Committee shall be responsible for the administration of the Plan
as set forth herein. Otherwise, the Company shall be the plan administrator
of the Plan within the meaning of section 3(16)(A) or ERISA and 414(g) of
the Code.
(b) The Committee shall be responsible for making appropriate provision for
the investment and reinvestment of the Trust Fund.
(c) The Committee shall have all powers necessary or helpful for the
carrying out of its responsibilities hereunder, and the decisions or
actions of the Committee in respect of any matter hereunder shall be
conclusive and binding upon all parties concerned.
(d) The Committee may delegate to one or more of its members, to the
Recordkeeper or to any other duly appointed agent of the Committee,
including but not limited to any individual employed in the Benefits
Department of the Company, the right to act on its behalf in any one or
more matters connected with the administration of the Plan.
(e) Without limiting the generality of the foregoing, the Committee shall
have the power and absolute discretion to:
(i) make rules and regulations for the administration of the Plan
which are not inconsistent with the terms and provisions of the Plan;
(ii) construe all terms, provisions, conditions and limitations of the
Plan, resolve ambiguities, remedy inconsistencies and supply omissions;
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(iii) make all relevant factual findings; and
(iv) conclusively determine all questions arising out of or in
connection with the provisions of the Plan or its administration in any and
all cases in which the Committee deems such a determination advisable,
including but not limited to the power to determine the eligibility of
employees to participate in the Plan and the rights of Participants and
other persons entitled to benefits under the Plan and their respective
benefits.
The foregoing list of powers is not intended to be either complete or exclusive,
and the Committee, in addition, shall have such other discretionary powers as
may be necessary for the performance of its duties under the Plan and the Trust
Agreement.
12.3 Limitation of Liability and Indemnification. Except as otherwise provided
by law, no person who is a member of the Committee, or who is an employee,
director or officer of an Employer or any Affiliate, shall incur any liability
whatsoever on account of any matter connected with or related to the Plan or the
administration of the Plan, unless such person shall have acted in bad faith, or
have willfully neglected his duties, in respect of the Plan. The Company shall
indemnify and save each such person harmless against any and all loss,
liability, claim, damage, cost and expense which may arise by reason of, or be
based upon, any matter connected with or related to the Plan or the
administration of the Plan (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or in settlement of any such claim
whatsoever), to the fullest extent permitted under the Certificate of
Incorporation and By-Laws of the Company.
12.4 Committee Action. A majority of the members of the Committee at the time in
office shall constitute a quorum for the transaction of business. The Committee
shall select from among its members a Chairman, and shall appoint (from its
members or otherwise) a Secretary. The Committee may act by vote or consent of
the majority of its members then in office and may establish its own procedures.
The Committee may authorize any one or more of its members or the Secretary of
the Committee to sign and deliver any instrument, certificate or other paper or
document on its behalf. Notwithstanding the preceding provisions of this Section
12.4, if the Committee shall consist of only two members, both members shall be
necessary to establish a quorum for the transaction of business and action may
be taken only by unanimous vote, unless the action in question directly concerns
one of the Committee member's benefits under the Plan, in which event the other
member shall act as the Committee.
12.5 Subcommittees, Counsel and Agents. The Committee may appoint from its
members such subcommittees (of one or more such members), with such powers, as
the Committee shall determine. The Committee may employ such counsel (including
legal counsel, who may be counsel for an Employer or any Affiliate) and agents
and such clerical and other services as it may require in carrying out the
provisions of the Plan, and may charge the fees, charges and costs resulting
from such employment as an administrative expense to the Plan. Unless otherwise
required by law, persons employed by the Committee as counsel, or as its agents
or otherwise, may include members of the Committee, or of the Board or Boards of
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Directors of any Employer or Affiliate, or firms with which members of the
Committee or Board or Boards of Directors of any Employer or Affiliate are
associated as partners, employees or otherwise. Persons serving on the Committee
or on any subcommittee shall be fully protected in acting or refraining from
acting in accordance with the advice of legal or other counsel.
12.6 Reliance on Information. The members of the Committee and any Employer and
Affiliate and their respective officers, directors and employees, shall be
entitled to rely upon all tables, valuations, certificates, opinions and reports
furnished by any actuary, accountant, trustee, insurance company, counsel,
physician or other expert who shall be engaged by the Committee, an Employer or
any Affiliate, and the members of the Committee and any Employer and Affiliate
and their respective officers, directors and employees, shall be fully protected
in respect of any action taken or suffered by them in good faith in reliance
thereon, and all action so taken or suffered shall be conclusive upon all
persons affected thereby.
12.7 Instructions to Trustee. The Committee shall provide appropriate
instructions in accordance with the Trust Agreement to enable the Trustee to
make the distributions provided for in the Plan.
12.8 Fiduciaries. The provisions of this Section 12.8 shall apply
notwithstanding any contrary provision of the Plan or of the Trust Agreement.
(a) Named Fiduciaries. The named fiduciaries under the Plan shall be (i)
the Company, (ii) the Committee and each of its members, and (Iii) a
Participant to the extent such Participant has directed the investment of
his Accounts under Article VI.
(b) Allocation of Fiduciary and Other Responsibilities. The Committee shall
have the right, which shall be exercised in accordance with the procedures
set forth in the Plan or in the Trust Agreement for action by the
Committee, to allocate responsibilities (fiduciary or otherwise) among its
members, and it shall have the right to designate persons other than the
Committee to carry out responsibilities (fiduciary or otherwise) under the
Plan.
(c) Service in Multiple Capacities. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
(d) Advisers. The Committee, and any fiduciary designated by the Committee
pursuant to paragraph (b) above to whom such power is granted by the
Committee, may employ one or more persons to render advice with regard to
any responsibility such fiduciary has under the Plan.
(e) Investment Manager. The Committee may appoint an investment manager or
managers, as defined in ERISA, to manage (including the power to acquire,
invest and dispose of) any assets of the Plan.
(f) Limitation of Liability. Except to the extent otherwise provided by
law, if any duty or responsibility of a named fiduciary has been allocated
or delegated to any other person in accordance with any provision of this
Plan or of the Trust Agreement, then such named fiduciary shall not be
liable for any act or omission of such person in carrying out such duty or
responsibility.
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12.9 Genuineness of Documents. The Committee, and any Employer and Affiliate and
their respective officers, directors and employees, shall be entitled to rely
upon any notice, request, consent, letter, telegram or other paper or document
believed by them or any of them to be genuine, and to have been signed or sent
by the proper person, and shall be fully protected in respect of any action
taken or suffered by them in good faith in reliance thereon.
12.10 Proper Proof. In any case in which an Employer or the Committee shall be
required under the Plan to take action upon the occurrence of any event, they
shall be under no obligation to take such action unless and until proper and
satisfactory evidence of such occurrence shall have been received by them.
12.11 Claims Procedure. The Committee shall establish a claims procedure in
accordance with applicable law and shall afford a reasonable opportunity to any
Participant or Beneficiary whose claim for benefits has been denied for a full
and fair review of the decision denying such claim.
12.12 Recordkeeper. The Committee may appoint a Recordkeeper to perform such
administrative functions as the Committee may determine from time to time,
including but not limited to the processing of loans, withdrawals and
distributions, and contribution and in accordance with Investment Fund elections
by Participant, in accordance with the terms of the Plan.
12.13 Administrative Expenses. Except as otherwise determined by the Company,
the expenses of administering the Plan and the fees and expenses incurred in
connection with the collection, administration, management, investment,
protection and distribution of the Plan assets under the Trust shall be paid
directly by the Trust out of Plan assets or, if paid by one or more Employers,
reimbursed by the Trust, to the maximum extent permitted by law, and shall be
allocated to Participants' Accounts in accordance with rules established by the
Committee in its sole discretion.
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ARTICLE XIII
Discontinuing Participation
and
Right of Company to Amend or Terminate
13.1 Discontinuance of Participation By an Employer. An Employer's participation
in the Plan shall cease in accordance with the following:
(a) Any Employer may elect, at any time, to discontinue its participation
hereunder in whole or in part with respect to any of its divisions or
locations, by filing written notice thereof with the Board of Directors and
the Committee and specifying the group or groups of Participants affected
by such election.
(b) The Plan shall be discontinued as to all Participants of any Employer
which shall be declared bankrupt or which makes any general assignment for
the benefit of creditors.
(c) The Plan shall be discontinued as to Participants of any Employer in
the event of the dissolution, merger, consolidation, or sale or other
disposition of all of the business and assets or stock of such Employer,
unless provision is made for the continuance of the Plan by a successor.
(d) The Plan shall be discontinued as to Participants of any Employer that
ceases to be a Controlled Group Member, unless the Board of Directions
expressly permits its continued participation in the Plan.
In such event the Committee shall either make such current or deferred
distribution to the Participants affected by such discontinuance as it shall
deem appropriate and in accordance with the Plan, or in lieu thereof, direct
that the portion of the Trust Fund allocable to such Participants be transferred
to a successor qualified plan or funding medium, if provision is made for
coverage for such Participants under such plan or funding medium. No Participant
shall make any contributions to the Plan, after discontinuance of his Employer's
participation in the Plan with respect to him.
13.2 Amendment. The Company shall have the right to amend the Plan by resolution
of the Board of Directors, by resolution of any duly authorized committee
thereof or by written action of any duly authorized officer of the Company, to
any extent that it may deem advisable, and all Employers, employees,
Participants, and Beneficiaries shall be bound thereby. Where deemed necessary
or advisable in order to ensure compliance with applicable law (including
administrative interpretations thereof), amendments may be put into effect in
practice and in communications to Participants prior to the time that they are
embodied in formal amendments to the Plan document. No amendment shall reduce a
Participant's interest to the Plan to an amount less that what his interest
would have been if his Termination Date had occurred on the day of the
amendment.
13.3 Termination. The Plan may be terminated at any time by resolution of the
Board of Directors, provided that no such action shall permit any part of the
corpus or income of the Trust
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Fund to be used for or diverted to purposes other than for the exclusive benefit
of the Participants and their Beneficiaries under the Plan and for the payment
of the administrative costs of the Plan prior to the satisfaction of all
liabilities under the Plan.
13.4 Plan Merger. The Company may determine that the Plan should be merged with,
or the Company or the Committee may determine that all or a portion of the
Plan's assets should be transferred to, any other qualified plan within the
meaning of section 401(a) of the Code, and the Committee in its discretion may
permit the Plan to accept a transfer of all or a portion of the assets of
another qualified plan. In the case of any merger or consolidation with, or
transfer of assets or liabilities to or from, any other plan, each Participant
in this Plan shall be entitled to a benefit immediately after the merger,
consolidation, or transfer (if such other 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
been terminated). In the event of a transfer or merger into the Plan, the
provisions of the other plan that pertain to optional forms of benefit and other
rights that may not be eliminated by amendment shall be incorporated herein by
reference to the extent necessary to comply with Section 411(d)(6) of the Code
and applicable Treasury Regulations until such time as a separate supplement
setting forth such protected features is added to the Plan.
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ARTICLE XIV
Miscellaneous
14.1 Appropriate Forms and Filing with Committee. For all purposes of this Plan,
the date on which an Appropriate Form, Contribution Agreement, or any other
document is returned to or filed with the Committee shall be the date on which
such Appropriate Form, Contribution Agreement or other document is actually
received by the Committee or its designated agent. As and to the extent
determined by the Committee from time to time, an appropriate form may consist
of electronic or voice communication, provided that a Participant's designation
of a Beneficiary and any Spousal Consent required in connection with any such
designation shall be in writing. The Committee shall prescribe the conditions
for use of the Appropriate Form. Any submission by a Participant of an election
through an electronic or voice communication system shall constitute his valid
signature for purposes of any transaction effected thereby. An election made
through any such system shall be considered received on the day it is
transmitted, unless such transmission is received after the applicable cut-off
date and/or time prescribed by the Recordkeeper. The availability of electronic,
internet or interactive phone access to the Plan's recordkeeping system shall
not guaranty access to any Participant at a particular time.
14.2 Governing Laws. The Plan shall be governed by and construed and
administered under the laws of the State of [New Jersey], except to the extent
such laws are preempted by Federal law.
14.3 Separability. If any provision of this Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan and the Plan shall be construed and enforced as if such
provisions had not been included therein.
14.4 Captions. The captions contained herein and the table of contents prefixed
hereto are inserted only as a matter of convenience and for reference and in no
way define, limit, enlarge or describe the scope or intent of this Plan nor in
any way shall affect the Plan or the construction of any provision thereof.
14.5 Limitation of Liability. Except to the extent otherwise provided by law, no
liability shall attach to or be incurred by any stockholder, officer or director
of any Employer or any Affiliate, and if an Employer or Affiliate shall be a
partnership, any partner thereof, under or by reason of the terms, conditions
and provisions contained in this Plan or in the Trust Agreement, or for the acts
or decisions taken or made thereunder or in connection therewith; and as a
condition precedent to his participation in the Plan or the receipt of benefits
thereunder, or both, such liability, if any, is expressly waived and released by
each Participant and Beneficiary, and by any and all persons claiming under or
through such persons, such waiver and release to be conclusively evidenced by
any act or participation in or the acceptance of benefits or the making of
elections under this Plan.
14.6 Construction. The Plan is intended to constitute a qualified plan under
section 401(a) of the Code (which includes a qualified cash or deferred
arrangement within the meaning of section 401(k) of the Code) and to comply with
applicable provisions of ERISA. Accordingly, the Plan
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shall, at all times, be construed and administered in a manner consistent with
the requirements of said sections 401(a) and 401(k) of the Code and the
requirements of ERISA.
14.7 Action by Employers. Except as otherwise provided herein, any action
required or permitted to be taken by the Company or any other Employer which is
a corporation shall be by resolution of its Board of Directors or a duly
authorized committee thereof or by written action of a duly authorized officer
of the Company or the Employer. Any action required or permitted to be taken by
an Employer that is a partnership shall be by a general partner of such
partnership or by a duly authorized officer thereof.
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ARTICLE XV
"Top-Heavy" Provisions
15.1 Applicable Plans. For purposes of this Article XV, "Applicable Plans" shall
include (a) each plan of an Employer or an Affiliate in which a Key Employee (as
defined in Section [15.2] below for this Plan, and as defined in section 416(i)
of the Code for each other Applicable Plan) participates during the five
(5)-year period ending on such plan's "Determination Date" (as described in
Section 151.4 below) and (b) each other plan of an Employer or an Affiliate
which, during such period, enables any plan in clause (a) of this sentence to
meet the requirements of section 401(a)(4) or 410 of the Code. Any plan not
required to be included under the preceding sentence may also be included, at
the option of the Company, provided that the requirements of sections 401(a)(4)
and 410 of the Code continue to be satisfied for the group of Applicable Plans
after such inclusion. Applicable Plans shall include terminated plans, frozen
plans and, to the extent that benefits are provided with respect to service with
an Employer or an Affiliate, multiemployer plans (described in section 414(f) of
the Code) and multiple employer plans (described in section 413(c) of the Code)
to which an Employer or an Affiliate makes contributions.
15.2 Key Employee. For purposes of this Article XV, "Key Employee" for any Plan
Year shall mean an employee (including a former employee whether or not
deceased) of an Employer or an Affiliate who, at any time during a given Plan
Year or any of the four (4) preceding Plan Years, is one or more of the
following.
(a) An officer of an Employer or an Affiliate having Top-Heavy Compensation
of more than fifty percent (50%) of the dollar amount in effect under
section 415(b)(1)(A) of the Code for any such Plan Year; provided, that the
number of employees treated as officers shall be no more than fifty (50)
or, if fewer, the greater of three (3) employees or ten percent (10%) of
the employees (exclusive of employees described in section 414(q)(5) of the
Code).
(b) One of the ten (10) employees (i) having Top-Heavy Compensation of more
than the dollar limit under section 415(c)(1)(A) and (ii) owning or
considered as owning within the meaning of section 416(i) of the Code) the
largest percentage interests in value of an Employer or an Affiliate,
provided that such percentage interest exceeds one-half percent (.5%) in
value. If two employees have the same interest in the Employer or an
Affiliate, the employee having the greater Total Compensation shall be
treated as having a larger interest.
(c) A person owning (or considered as owning, within the meaning of section
416(i) of the Code) more than five percent (5%) of the outstanding stock of
an Employer or an Affiliate, or stock possessing more than five percent
(5%) of the total combined voting power of all stock of the Employer or an
Affiliate (or having more than five percent (5%) of the capital or profits
interest in any Employer or an Affiliate that is not a corporation,
determined under similar principles).
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(d) A one percent (1%) owner of an Employer or an Affiliate having
Top-Heavy Compensation of more than one hundred fifty thousand dollars
($150,000). "One percent (1%) owner" means any person who would be
described in paragraph (c) of Section [15.1.2] if "one percent (1%)" were
substituted for "five percent (5%)" in each place where it appears in
paragraph (c).
For purposes of this Section [15.2], "Top-Heavy Compensation" means
"compensation" as that term is defined in section 414(q)(4) of the Code.
15.3 Top Heavy Condition. In any Plan Year for which the sum, for all Key
Employees (as defined in Section 15.2 above for this Plan and as defined in
section 416(i) of the Code for each other Applicable Plan), of the present value
of the cumulative accrued benefits under all Applicable Plans which are defined
benefit plans (determined based on the actuarial assumptions set forth in the
"top-heavy" provisions of such plans) and the aggregate of their accounts under
all Applicable Plans which are defined contribution plans, exceeds sixty percent
(60%) of a similar sum determined for all participants in such plans (but
excluding participants who are former Key Employees), the Plan shall be deemed
"Top-Heavy."
15.4 Determination Date. The determination as to whether this Plan is
"Top-Heavy" for a given Plan Year shall be made on the last day of the preceding
Plan Year (the "Determination Date"); and other plans shall be included in
determining whether this Plan is "Top-Heavy" based on the determination date as
defined in section 416(g)(4)(C) of the Code for each such plan which occurs in
the same calendar year as such Determination Date for this Plan.
15.5 Valuation. The value of account balances and the present value of accrued
benefits for each Applicable Plan will be determined, subject to section 416 of
the Code and the regulations thereunder, as of the most recent valuation date
that falls within or ends with the 12-month period ending on the applicable
determination date for such plan.
15.6 Distribution within Five Years. Subject to Section 15.7 below,
distributions from the Plan or any other Applicable Plan during the five
(5)-year period ending on the applicable Determination Date shall be taken into
account in determining whether the Plan is "Top-Heavy."
15.7 No Services within Five Years. Benefits and distributions shall not be
taken into account with respect to any individual who has not rendered any
services to any Employer or Affiliate at any time during the five (5)-year
period ending on the applicable Determination Date.
15.8 Compliance with Code Section 416. The calculation of the "top-heavy" ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Code section 416 and the regulations
thereunder.
15.9 Deductible Employee Contributions. Deductible employee contributions will
not be taken into account for purposes of computing the "top-heavy" ratio.
15.10 Beneficiaries. The terms "Key Employee" and "Participant" include their
Beneficiaries.
15.11 Accrued Benefit Under Defined Benefit Plans. Solely for purposes of
determining whether this Plan or any other Applicable Plan is "Top-Heavy" for a
given Plan Year, the
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accrued benefit under any defined benefit plan of a Participant other than a Key
Employee shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans maintained by the
Employer or an Affiliate, or (b) if there is no such method, as if such benefit
accrued not more rapidly than at the slowest accrual rate permitted under the
fractional accrual rule of section 411(b)(1)(C) of the Code.
15.12 Provisions Applicable in "Top-Heavy" Years. For any Plan Year in which the
Plan is deemed to be "Top-Heavy," the following provisions shall apply to any
Participant who has not terminated employment before such Plan Year:
(a) Required Allocation. The amount of Employer contributions and
forfeitures which shall be allocated to the Account of any Participant who
(a) is employed by an Employer or an Affiliate on the last day of the Plan
Year and (b) is not a Key Employee shall be (i) at least three percent (3%)
of such member's Total Compensation for such Plan Year, or, (ii) if less,
an amount equal to such Total Compensation multiplied by the highest
allocation rate for any Key Employee. For purposes of the preceding
sentence, the allocation rate for each individual Key Employee shall be
determined by dividing the Employer contributions and forfeitures allocated
to such Key Employee's account (including elective contributions) under all
Applicable Plans considered together by his Total Compensation; provided,
however, that clause (ii) above shall not apply if this Plan enables a
defined benefit plan required to be aggregated with this Plan under Section
15.1 above to meet the requirements of section 401(a)(4) or 410 of the
Code. The minimum allocation provisions of this Section 15.12 shall, to the
extent necessary, be satisfied by special Employer contributions made by
the Employer for that purpose. Notwithstanding the foregoing, the minimum
allocations otherwise required by this Section 15.12 shall not be required
to be made for any Participant (y) if such Participant is covered under a
defined benefit plan maintained by an Employer or an Affiliate which
provides the minimum benefit required under section 416(c)(1) of the Code,
and/or (z) to the extent that the minimum allocation otherwise required by
this Section 15.12 is made under another defined contribution plan
maintained by an Employer or an Affiliate. In addition, any minimum
allocation required to be made for a Participant who is not a Key Employee
shall be deemed satisfied to the extent of the benefits provided by any
other qualified plan maintained by an Employer or an Affiliate. For Plan
Years beginning on or after January 1, 1989, Tax-Saver Contributions by a
non-Key Employee shall be disregarded in determining the amount of
contributions required to be allocated for his benefit under this Section
15.12. For Plan Years beginning on or after January 1, 1989, Matching
Contributions for a non-Key Employee that are taken into account to meet
the minimum allocation requirements of this Section 15.12 shall be
disregarded in applying the provisions of Sections 5.6 and 5.10 of the
Plan.
(b) Multiplier. Except as otherwise provided by law, "1.00" shall be
substituted for the multiplier "1.25" required by section 415(e)(2)(B)(i)
and (3)(B)(i) of the Code, to the extent applicable, unless the following
conditions are met:: (a) the percentage described in Section 15.3 above
does not exceed ninety percent (90%), and (b) "four percent (4%)" is
substituted for "three percent (3%)" in paragraph (a) above
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Notwithstanding any other provision of this Plan, if the sum of the
combined limitation fractions described in section 415(e)(2) and (3) of the
Code, calculated by substituting "1.00" for "1.25" in applying section
415(e)(2)(B)(i) and (3)(B)(i) of the Code, for any Participant exceeds one
hundred percent (100%) for the last Plan Year before the Plan becomes
"Top-Heavy," such fractions shall be adjusted, in accordance with applicable
regulations, so that their sum does not exceed 100% for such Plan Year.
(c) Vesting. Any Participant shall be vested in his Profit Sharing and
Matching Contributions Account on a basis at least as favorable as is
provided under the following schedule:
Years of Service Vested Percentage
Less Than 2 Years 0%
2 Years But Less Than 3 20%
3 Years But Less Than 4 40%
4 Years But Less Than 5 60%
5 Years But Less Than 6 80%
6 Years or More 100%
In any Plan Year in which the Plan is not deemed to be "top- heavy," the
vested percentage shall be no less than that which was determined as of the last
day of the last Plan Year in which the Plan was deemed to be "top-heavy." The
minimum vesting schedule set out above shall apply to all benefits within the
meaning of Code section 411(a)(7) except those attributable to employee
contributions, including benefits accrued before the effective date of this
Article XV and benefits accrued before the Plan became "top-heavy." Any vesting
schedule change caused by alterations in the Plan's "top-heavy" status shall be
deemed to result from a Plan amendment giving rise to the right of election
required by Code section 411(a)(10)(B)
(d) Bargaining Unit Employees. The provisions of paragraphs (a) and (c)
above shall not apply to any employee included in a unit of employees
covered by a collective bargaining agreement if, within the meaning of
section 416(i)(4) of the Code, retirement benefits were the subject of good
faith bargaining.
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officers, the 1st day of April, 2000.
LIZ CLAIBORNE, INC.
By: /s/ Roberta S. Karp
-------------------
Roberta S. Karp
ATTEST: /s/ Nicholas J. Rubino
----------------------
Nicholas J. Rubino
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Table of Contents
Page
----
ARTICLE I General.................................................................................. 2
1.1 Effective Date........................................................................... 2
1.2 Definitions.............................................................................. 2
1.3 Plan Supplements......................................................................... 7
ARTICLE II Service.................................................................................. 8
2.1 General.................................................................................. 8
2.2 Year of Eligibility Service.............................................................. 8
2.3 Years of Vesting Service................................................................. 8
2.4 Changes in Employment Status and Application of Different Service Crediting Rules to
the Determination of Eligibility......................................................... 9
2.5 Service With Acquired Companies or Businesses............................................ 9
ARTICLE III Participation in the Plan................................................................ 10
3.1 Eligibility to Participate in the Plan................................................... 10
3.2 Transfer to Eligible Employment.......................................................... 11
3.3 Reemployment............................................................................. 11
3.4 Inactive Participation................................................................... 11
3.5 Transfers Between Employers.............................................................. 11
3.6 No Employment Rights..................................................................... 11
3.7 Rollover Participation................................................................... 11
3.8 Participation Voluntary For Certain Purposes............................................. 12
3.9 Leased Employees......................................................................... 12
ARTICLE IV Contributions............................................................................ 13
4.1 Tax-Saver Contributions.................................................................. 13
4.2 Contribution Agreement for Tax-Saver Contributions....................................... 13
4.3 Time of Tax-Saver Contributions.......................................................... 13
4.4 Change in Contribution Rate.............................................................. 13
4.5 Voluntary Suspension of Tax-Saver Contributions.......................................... 13
4.6 Mandatory Suspension of Tax-Saver Contributions.......................................... 14
4.7 Matching Contributions................................................................... 14
4.8 Payment of Matching Contributions........................................................ 14
4.9 Matching Contributions Only For Permissible Tax-Saver Contributions...................... 14
4.10 Qualified Non-Elective Contributions..................................................... 15
4.11 Contributions for Military Service....................................................... 15
4.12 Rollovers................................................................................ 15
4.13 Profit Sharing Contributions............................................................. 16
4.14 Eligibility to Share in Profit Sharing Contributions..................................... 16
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Table of Contents
(continued)
Page
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4.15 Allocation of Profit Sharing Contributions and Forfeitures............................... 16
4.16 Contributions May Not Exceed Amount Deductible........................................... 16
4.17 Form of Payment to Trustee............................................................... 16
4.18 Time of Payment of Profit Sharing Contribution........................................... 16
4.19 Profits Not Required..................................................................... 16
ARTICLE V Limits on Contributions.................................................................. 17
5.1 Reduction of Contribution Rates.......................................................... 17
5.2 Limitations on Annual Additions.......................................................... 17
5.3 Excess Annual Additions.................................................................. 17
5.4 Limitation on Elective Deferrals......................................................... 18
5.5 Distribution of Excess Deferrals......................................................... 18
5.6 Section 401(k) Limit on Tax-Saver Contributions.......................................... 18
5.7 Determination of Average Deferral Percentages............................................ 19
5.8 Treatment of Excess Tax-Saver Contributions.............................................. 19
5.9 Section 401(k)(3) Testing for Collective Bargaining Unit Employees....................... 20
5.10 Section 401(m) Limit on Matching Contributions........................................... 20
5.11 Determination and Correction of Excess Matching Contributions............................ 20
5.12 Special Testing Rules.................................................................... 21
5.13 Aggregate Limit Under Section 401(m) of the Code......................................... 22
ARTICLE VI Accounts and Investment Funds............................................................ 23
6.1 Accounts................................................................................. 23
6.2 Allocation of Contributions.............................................................. 23
6.3 Correction of Error...................................................................... 24
6.4 Statement of Plan Interest............................................................... 24
6.5 Investment Funds......................................................................... 24
6.6 Investment Fund Accounting............................................................... 24
6.7 Allocation of Fund Earnings and Changes in Value......................................... 24
6.8 Investment Fund Elections................................................................ 25
6.9 Transfers Between Investment Funds....................................................... 25
6.10 Liquidity................................................................................ 26
6.11 Voting and Tendering of Common Stock..................................................... 26
6.12 Allocation Shall Not Vest Title.......................................................... 27
6.13 Committee Modifications.................................................................. 27
ARTICLE VII Vesting.................................................................................. 28
7.1 Matching and Profit Sharing Contributions................................................ 28
7.2 Tax-Saver, Qualified Non-Elective, Buy Back and Rollover Contributions Accounts.......... 29
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Table of Contents
(continued)
Page
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7.3 Accelerated Vesting...................................................................... 29
7.4 Forfeitures.............................................................................. 29
7.5 Restoration of Forfeiture and Buy Back Requirement....................................... 29
7.6 Subaccount for Restored Amount........................................................... 30
7.7 Application of Forfeitures............................................................... 30
ARTICLE VIII Withdrawals and Loans During Employment.................................................. 31
8.1 Withdrawals At Age 59 1/2................................................................ 31
8.2 Withdrawal from Rollover Account......................................................... 31
8.3 Hardship Withdrawals..................................................................... 31
8.4 Hardship Defined......................................................................... 31
8.5 Vesting Adjusted to Reflect Withdrawals.................................................. 32
8.6 Withdrawal Payment....................................................................... 32
8.7 Loans.................................................................................... 32
8.8 Loan Requirements........................................................................ 33
8.9 Valuation for Loan Processing............................................................ 34
8.10 Funding of Participant Loans............................................................. 34
8.11 Allocation of Loan Among Investment Funds................................................ 34
8.12 Loan Repayment........................................................................... 34
8.13 Loan Expenses............................................................................ 34
8.14 Disposition of Loan Upon Certain Events.................................................. 34
8.15 Compliance with Applicable Law........................................................... 35
8.16 Loan Default............................................................................. 35
ARTICLE IX Distributions to Participants After Termination of Employment............................ 36
9.1 Distributions to Participants After Termination of Employment............................ 36
9.2 Distribution Only Upon Separation From Service........................................... 36
9.3 Form of Payment.......................................................................... 37
9.4 Direct Rollover Option................................................................... 37
9.5 Put Option............................................................................... 37
9.6 Facility of Payment...................................................................... 37
9.7 Interests Not Transferable............................................................... 37
9.8 Absence of Guaranty...................................................................... 38
9.9 Missing Participants or Beneficiaries.................................................... 38
9.10 Doubt as to Right to Payment............................................................. 38
9.11 Limits on Commencement and Duration of Payments.......................................... 38
9.12 Contributions Subsequent to Distribution................................................. 39
9.13 Payments to Minors....................................................................... 39
9.14 Identity of Proper Payee................................................................. 39
9.15 Inability to Locate Payee................................................................ 40
9.16 Estoppel of Participants and Their Beneficiaries......................................... 40
9.17 Community Property Laws.................................................................. 40
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Table of Contents
(continued)
Page
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ARTICLE X Distribution Upon Death of Participant................................................... 41
10.1 Distribution to Beneficiary............................................................. 41
10.2 Designation of Beneficiary............................................................... 41
10.3 Change of Beneficiary.................................................................... 42
10.4 Failure to Designate Beneficiary......................................................... 42
10.5 Proof of Death........................................................................... 42
10.6 Discharge of Liability................................................................... 42
ARTICLE XI Trust Fund............................................................................... 43
11.1 Trust Agreement.......................................................................... 43
11.2 No Diversion of Trust Fund............................................................... 43
11.3 Duration of Trust........................................................................ 43
11.4 Company as Agent......................................................................... 43
ARTICLE XII Administration........................................................................... 44
12.1 Committee................................................................................ 44
12.2 Committee Powers and Authority........................................................... 44
12.3 Limitation of Liability and Indemnification.............................................. 45
12.4 Committee Action......................................................................... 45
12.5 Subcommittees, Counsel and Agents........................................................ 45
12.6 Reliance on Information.................................................................. 46
12.7 Instructions to Trustee.................................................................. 46
12.8 Fiduciaries.............................................................................. 46
12.9 Genuineness of Documents................................................................. 47
12.10 Proper Proof............................................................................. 47
12.11 Claims Procedure......................................................................... 47
12.12 Recordkeeper............................................................................. 47
12.13 Administrative Expenses.................................................................. 47
ARTICLE XIII Discontinuing Participation and Right of Company to Amend or Terminate................... 48
13.1 Discontinuance of Participation By an Employer........................................... 48
13.2 Amendment................................................................................ 48
13.3 Termination.............................................................................. 48
13.4 Plan Merger.............................................................................. 49
ARTICLE XIV Miscellaneous............................................................................ 50
14.1 Appropriate Forms and Filing with Committee.............................................. 50
14.2 Governing Laws........................................................................... 50
14.3 Separability............................................................................. 50
14.4 Captions................................................................................. 50
14.5 Limitation of Liability.................................................................. 50
14.6 Construction............................................................................. 50
14.7 Action by Employers...................................................................... 51
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Table of Contents
(continued)
Page
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ARTICLE XV "Top-Heavy" Provisions................................................................... 52
15.1 Applicable Plans......................................................................... 52
15.2 Key Employee............................................................................. 52
15.3 Top Heavy Condition...................................................................... 53
15.4 Determination Date....................................................................... 53
15.5 Valuation................................................................................ 53
15.6 Distribution within Five Years........................................................... 53
15.7 No Services within Five Years............................................................ 53
15.8 Compliance with Code Section 416......................................................... 53
15.9 Deductible Employee Contributions........................................................ 53
15.10 Beneficiaries............................................................................ 53
15.11 Accrued Benefit Under Defined Benefit Plans.............................................. 53
15.12 Provisions Applicable in "Top-Heavy" Years............................................... 54
Supplement A
Supplement B
Supplement C
Supplement D
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SUPPLEMENT A
TO THE
LIZ CLAIBORNE SAVINGS PLAN
Special Provisions Applicable to Former Members
of the Liz Claiborne Profit Sharing Retirement Plan
This Supplement A sets forth special provisions of the Plan that apply to
certain individuals who participated in the Liz Claiborne Profit Sharing
Retirement Plan (the "Profit-Sharing Plan"), the assets of which were merged
into this Plan as of December 31, 1999.
A-1 Special Definitions. For purposes of this Supplement A:
(a) "Company" means Liz Claiborne, Inc., a Delaware corporation.
(b) "Merger" means the transfer of assets of the Profit Sharing Plan
to this Plan effective as of December 31, 1999.
(c) "Profit Sharing Participant" means an individual who had a Profit
Sharing Account as of December 31, 1999.
(d) "Profit Sharing Plan" means the Profit Sharing Plan, as in effect
through December 31, 1999.
(e) "Transferred Profit Sharing Account" means the account maintained
under the Profit Sharing Plan for a Profit Sharing Member on December 31,
1999.
A-2 Participation in Plan Effective January 1, 2000. Profit Sharing Plan
Participants automatically become Members of the Plan effective January 1, 2000.
A-3 Merger. Effective as of December 31, 1999, the assets of the Profit
Sharing Plan and effective as of January 1, 2000 the terms of this Plan
supersede in all respects the terms of the Profit Sharing Plan with respect to
the Profit Sharing Accounts transferred to the Plan.
A-4 Transfer of Accounts. Each Profit Sharing Account transferred to the
Plan shall be held in a subaccount of the Profit Sharing Contributions Account
established for each Participant under the Plan.
A-5 Investment of Transferred Accounts. During a transition period
commencing on the Merger date and ending as soon as practicable thereafter, as
determined by the Committee in its sole discretion, Transferred Profit Sharing
Accounts shall be invested in such manner as the Committee prescribes. After the
transition period, any reallocation of the investment of such accounts, as well
as the investment direction for any future contributions allocated to the
Participant's Profit Sharing Contributions Account, shall be in accordance with
the provisions of the Plan.
A-6 Pre-Merger Elections and Designations. Notwithstanding any other
provision of this Plan, withdrawals or distributions already in process prior to
the Merger Date on account of deaths, terminations of employment or participant
requests under the Profit
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64
Sharing Plan shall continue to be processed under the applicable procedures of
the Profit Sharing Plan.
A-7 Post-Merger Beneficiary Designation. Beneficiary designations made
under the Profit Sharing Plan on or before December 31, 1999 by Profit Sharing
Participants shall be of no effect with respect to participation in the Plan on
and after January 1, 2000, as of which date only beneficiary designations made
under the Plan shall be given effect.
A-8 1999 Contribution. Prior to the filing deadline for its 1999 federal
income tax return, the Company, in its sole discretion, may make a contribution
to the Profit Sharing Plan with respect to each Profit Sharing Participant who
was eligible to share in such a contribution under Article IV of the Profit
Sharing Plan, by paying such contribution into the Plan as the continuation of
the Profit Sharing Plan by reason of the Merger. Such contribution shall be
allocated among such Profit Sharing Participants in accordance with the
provisions of the Profit Sharing Plan governing contributions for the 1999 Year
and accounted for under the Plan in the Participant's Profit Sharing
Contributions Account.
A-9 Profit Sharing Plan Amended. The provisions of this Supplement A shall
be treated as an amendment to and part of the Profit Sharing Plan, to the extent
necessary to give full effect to this Supplement. All provisions of the Plan as
the continuation and amendment of the Profit Sharing Plan, shall be treated as
effective with respect to the Profit Sharing Plan for periods prior to the
Merger to the extent necessary for the Profit Sharing Plan to meet applicable
requirements of all provisions of law that become effective since the last
determination letter with respect to the Profit Sharing Plan effective as of
their respective effective dates, including, without limitation, the Small
Business Job Protection Act of 1996 ("SBJPA"), the Uruguay Round Agreements
("GATT"), the Taxpayer Relief Act of 1997, and the IRS Restructuring and Reform
Act of 1998.
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SUPPLEMENT B
TO THE
LIZ CLAIBORNE SAVINGS PLAN
Special Provisions Applicable to Employees of Lucky Brand Dungarees
This Supplement B sets forth special provisions of the Plan that apply to
(a) certain employees of Lucky Brand Dungarees, Inc. ("Lucky") and (b) certain
other individuals who had undistributed accounts under the Lucky Plan on
December 31, 1999. Except as otherwise defined below, the terms used herein
shall have the meanings set forth in the Plan.
B-1 Special Definitions. For purposes of this Supplement B:
(a) "Lucky Accounts" means the account or accounts maintained under
the Lucky Plan for a Lucky Participant on December 31, 1999.
(b) "Lucky Participant" means an individual who had a Lucky Account on
December 31, 1999.
(c) "Lucky Plan" means the Lucky Brand Employee Retirement Plan, and
Trust as in effect through December 31, 1999.
(d) "Merger" means the transfer of assets of the Lucky Plan to this
Plan effective December 31, 1999.
B-2 Merger. Effective as of December 31, 1999, the assets of the Lucky Plan
are merged into this Plan and the trust thereunder, and the terms of this Plan
supersede the terms of the Lucky Plan with respect to the Lucky Accounts.
B-3 Requirement for Participation Effective January 1, 2000 for Tax-Saver
and Matching Contributions. The following rules modify the provisions of
paragraph 3.1(f) of the Plan with respect to Lucky Participants.
(a) Any individual who was a Lucky Participant on December 31, 1999
shall automatically become a Participant on January 1, 2000 with respect to
the Tax Saver and Matching Contributions portions of the Plan.
(b) Any individual who was not a Lucky Participant on December 31,
1999, but who was on the Lucky payroll on that date and was eligible to
join the Lucky Plan on January 1, 2000, shall instead be eligible to
participate in the Tax Saver and Matching Contributions portions of the
Plan on January 1, 2000.
(c) Any other individual who was on the Lucky payroll on December 31,
1999 shall be eligible to participate in the Tax Saver and Matching
Contributions portions of the Plan on the first day of the month after he
reaches age 21 and completes 90 days of service.
The eligibility for Plan participation of an individual whose date of hire by
Lucky is after December 31, 1999 shall be determined solely in accordance with
the normal provisions of the Plan.
B-4 Profit Sharing Participation. A Lucky employee shall participate in the
Profit Sharing portion of the Plan as of the first day of the month on or after
January 1, 2000 after he has satisfied the requirements of Section 3.1 of the
Plan. For purposes of paragraph
66
3.1(f) (iii), service with Lucky both before and after the Merger shall be taken
into account in determining whether he has one Year of Eligibility Service. Once
he has become a Participant with respect to the Profit Sharing portion of the
Plan, such an individual shall be eligible to share in Profit Sharing
Contributions only if he meets the requirements therefor under Section 4.14 of
the Plan.
B-5 Transfer of Accounts. Upon transfer to the Plan, a Participant's Lucky
Accounts, if any, shall be allocated as follows: amounts in his Elective Account
under the Lucky Plan shall be transferred to a Tax-Saver Contributions Account,
amounts in his Participant's Account attributable to employer matching
contributions shall be transferred to a Matching Contributions Account, and any
amounts in a Participant's Rollover Account shall be transferred to a Rollover
Account.
B-6 Investment of Transferred Accounts. During a transition period
commencing on the Merger date and ending as soon as practicable thereafter, as
determined by the Committee in its sole discretion, Transferred Lucky Accounts
shall be invested in such manner as the Committee prescribes. After the end of
the transition period, any reallocation of the investment of such accounts, as
well as the investment direction for any future contributions allocated to the
Participant's Accounts, shall be made in accordance with the rules of the Plan.
No transactions, including withdrawals or loans, shall be processed during the
foregoing transition period except as provided in subsection B-11.
B-7 Vesting in Matching Contributions Account. Individuals who were on the
Lucky payroll on December 31, 1999 shall vest in their Matching Contributions
Accounts (with regard to contributions made both before and after the Merger) in
accordance with the following vesting schedule:
Years of Vesting Service Vested Percentage
1 20%
2 40%
3 60%
4 80%
5 100%
B-8 Vesting in Profit Sharing Contributions Account. With respect to any
individual who was on the Lucky payroll on December 31, 1999, the vested portion
of any Profit Sharing Contributions Account shall be determined in accordance
with the normal rules of the Plan; provided, however, that in determining which
vesting schedule under paragraph (b) or (c) of Section 7.1 shall apply, the
individual's date of hire by Lucky shall be used in determining when an
individual is first credited with an "Hour of Service."
B-9 Calculation of Service for Vesting in Matching and Profit Sharing
Contributions Accounts. For any individual who was on the Lucky payroll on
December 31, 1999, "Years of Vesting Service" for purposes of calculating the
vested portion of his Profit Sharing Contributions Account and Matching
Contributions Account shall be calculated in
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67
accordance with the Plan; provided, however, that employment before the Merger
shall be taken into account in determining Years of Vesting Service as though it
were employment with an Affiliate, except that the first date that a Lucky
Participant has an "Hour of Service" shall be deemed to be (i) June 1 of the
calendar year of his actual date of hire by Lucky if such actual date of hire
was August 1 or later, or (ii) June 1 of the calendar year preceding the
calendar year of his actual date of hire by Lucky if such actual date of hire
was before August 1s.
B-10 Post-Merger Beneficiary Designation Required. Beneficiary designations
made under the Lucky Plan through December 31, 1999 by Lucky Participants shall
be of no effect with respect to participation in the Plan on and after January
1, 2000, as of which date only beneficiary designations made under the Plan
shall be given effect.
B-11 Pre-Merger Elections and Designations. Notwithstanding any other
provision of this Plan, withdrawals, distributions or loans already in process
prior to the Merger on account of deaths, terminations of employment or
participant requests under the Lucky Plan shall continue to be processed under
the applicable procedures of the Lucky Plan.
B-12 Contributions. Prior to the filing deadline for its 1999 federal
income tax, Lucky may, in its sole discretion, make a contribution to the Lucky
Plan for the 1999 Plan Year with respect to each Lucky Participant who was
eligible to share in such contribution under the terms of the Lucky Plan, by
paying such contribution into the Plan as the continuation of the Lucky Plan by
reason of the Merger. Such contribution shall be allocated among such Lucky
Participants in accordance with the provisions of the Lucky Plan governing
contributions for the 1999 Plan Year and accounted for under the Plan in the
Participant's Matching Contributions Account.
B-13 Lucky Plan Amended. The provisions of this Supplement B shall be
treated as an amendment to and part of the Lucky Plan to the extent necessary to
give full effect to this Supplement. All provisions of the Plan, in its capacity
as a continuation and amendment of the Lucky Plan, shall be treated as effective
with respect to the Lucky Plan for periods prior to the Merger to the extent
necessary for the Lucky Plan to meet applicable requirements of law that became
effective since the last determination letter with respect to the Lucky Plan,
effective as of their respective effective dates, including, without limitation,
the Small Business Job Protection Act of 1996 ("SBJPA"), the Uruguay Round
Agreements Act ("GATT"), the Taxpayer Relief Act of 1997, and the IRS
Restructuring and Reform Act of 1998.
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68
SUPPLEMENT C
TO THE
LIZ CLAIBORNE SAVINGS PLAN
Special Provisions Applicable to Employees of Segrets, Inc.
This Supplement C sets forth special provisions of the Plan that apply to
(a) certain employees of Segrets, Inc. ("Segrets") and (b) other individuals who
had undistributed accounts under the Segrets Plan on December 31, 1999. Except
as otherwise defined below, the terms used herein shall have the meanings set
forth in the Plan.
C-1 Special Definitions. For purposes of this Supplement C:
(a) "Segrets Accounts" means the account or accounts maintained under
the Segrets Plan for a Segrets Participant on December 31, 1999.
(b) "Segrets Participant" means an individual who had a Segrets
Account on December 31, 1999.
(c) "Segrets Plan" means the Segrets, Inc. 401(k) Plan, as in effect
through December 31, 1999.
(d) "Merger" means the transfer of assets of the Segrets Plan to this
Plan effective as of December 31, 1999.
C-2 Merger. Effective as of December 31, 1999, the assets of the Segrets
Plan are merged into this Plan and the trust thereunder, and the terms of this
Plan supersede the terms of the Segrets Plan with respect to the Segrets
Accounts.
C-3 Segrets Employees Eligible to Join the Plan Effective January 1, 2000
for Purposes of Tax-Saver and Matching Contributions. The following rules modify
the provisions of paragraph 3.1(f) of the Plan with respect to Segrets
Participants.
(a) Any individual who was a Segrets Participant on December 31, 1999
shall automatically become a Participant in the Tax Saver and Matching
Contributions portions of the Plan on January 1, 2000.
(b) Any individual who was not a Segrets Participant on December 31,
1999, but who was on the Segrets payroll on that date and was eligible to
join the Segrets Plan on January 1, 2000, shall instead be eligible to
participate in the Tax Saver and Matching Contributions portions of the
Plan on January 1, 2000.
(c) Any other individual who was on the Segrets payroll on December
31, 1999 shall be eligible to join the Tax Saver and Matching Contributions
portions of the Plan on the first day of the month after he or she reaches
age 18 and completes one Year of Eligibility Service.
69
The eligibility for Plan participation of an individual whose date of hire by
Segrets is after December 31, 1999 shall be determined solely in accordance with
the normal provisions of the Plan.
C-4 Profit Sharing Participation A Segrets employee shall participate in
the Profit Sharing portion of the Plan as of the first day of the month on or
after January 1, 2000 after he has satisfied the requirements of Section 3.1.
For purposes of paragraph 3.1(f)(iii), service with Segrets both before and
after the Merger shall be taken into account in determining whether he has one
Year of Eligibility Service. Once he has become a Participant in the Profit
Sharing portion of the Plan, such an individual shall be eligible to share in
the Profit Sharing Contribution for a Plan Year only if he meets the
requirements of Section 4.14 for that Plan Year.
C-5 Transfer of Accounts. Upon transfer to the Plan, a Participant's
Segrets Accounts, if any, shall be allocated as follows: amounts attributable to
Salary Reduction Contributions will be transferred to a Tax-Saver Contributions
Account, amounts attributable to employer Matching Contributions will be
transferred to a Matching Contributions Account, and any amounts attributable to
a participant Rollover Contribution will be transferred to a Rollover Account.
C-6 Investment of Transferred Accounts. During a transition period
commencing on the Merger date and ending as soon as practicable thereafter, as
determined by the Committee in its sole discretion, Transferred Segrets Accounts
shall be invested in such manner as the Committee prescribes. After the end of
the transition period any reallocation of the investment of such accounts, as
well as the investment direction for any future contributions allocated to the
Participant's accounts, shall be in accordance with the rules of the Plan. No
transactions shall be processed during the transition period, such as
withdrawals, investments changes or loans, except as provided in subsection
C-10.
C-7 Vesting in Profit Sharing Contributions Account. With respect to any
individual who was on the Segrets payroll on December 31, 1999, the vested
portion of any Profit Sharing Contributions Account shall be determined in
accordance with the normal rules of the Plan; provided, however, that in
determining which vesting schedule under paragraph (b) or (c) of Section 7.1
shall apply, the individual's date of hire by Segrets shall be used in
determining when an individual is first credited with an "Hour of Service."
C-8 Calculation of Service for Vesting in Profit Sharing and Matching
Contributions Accounts. With respect to any individual who was on the Segrets
payroll on December 31, 1999, "Years of Vesting Service" for purposes of
calculating the vested portion of his Profit Sharing and Matching Contributions
Accounts shall be calculated in accordance with the Plan; provided, however,
that employment with Segrets before the Merger shall be taken into account in
determining Years of Vesting Service as though it were employment with an
Affiliate, except that the first date for which such an individual has an "Hour
of Service" shall be deemed to be (i) June 1 of the calendar year of his actual
date of hire if such actual date of hire was August 1 or later, or (ii) June 1
of the calendar year preceding the calendar year of his actual date of hire if
such actual date of hire was before August .
C-9 Post-Merger Beneficiary Designation Required. Beneficiary designations
made under the Segrets Plan through December 31, 1999 by Segrets Participants
shall be of no
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70
effect with respect to the Plan on and after January 1, 2000, as of which date
only beneficiary designations made under the Plan shall be given effect.
C-10 Pre-Merger Elections and Designations. Notwithstanding any other
provision of this Plan, withdrawals, distributions or loans already in process
prior to the Merger on account of deaths, terminations of employment or
participant requests under the Segrets Plan shall continue to be processed in
accordance with the applicable provisions of the Segrets Plan.
C-11 Contributions. Prior to the filing deadline for its 1999 federal
income tax return, Segrets, in its sole discretion, may make a contribution to
the Segrets Plan with respect to each Segrets Participant who was eligible to
share in such contribution under section 4.04 of the Segrets Plan by paying such
contribution into the Plan as the continuation of the Segrets Plan by reason of
the Merger. Such contribution shall be allocated among such Segrets Participants
in accordance with the provisions of the Segrets Plan governing contributions
for the 1999 Plan Year and accounted for under the Plan in the Participant's
Matching Contributions Account.
C-12 Segrets Plan Amended. The provisions of this Supplement C shall be
treated as an amendment to and part of the Segrets Plan to the extent necessary
to give full effect to this Supplement. All provisions of the Plan, in its
capacity as a continuation and amendment of the Segrets Plan, shall be treated
as effective with respect to the Segrets Plan for periods prior to the Merger to
the extent necessary for the Segrets Plan to meet applicable requirements of law
that became effective since the last determination letter with respect to the
Segrets Plan, effective as of their respective effective dates, including,
without limitation, the Small Business Job Protection Act of 1996 ("SBJPA"), the
Uruguay Round Agreements Act ("GATT"), the Taxpayer Relief Act of 1997, and the
IRS Restructuring and Reform Act of 1998.
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71
SUPPLEMENT D
TO THE
LIZ CLAIBORNE SAVINGS PLAN
Special Provisions Applicable to Former Participants
in the Podell Industries, Inc. 401(k) Profit Sharing Plan
This Supplement D sets forth special provisions of the Plan that apply to
individuals who had account balances under the Laundry Plan on April 1, 2000.
Except as otherwise defined below, the terms used herein shall have the meanings
set forth elsewhere in the Plan.
D-1 Special Definitions. For purposes of this Supplement D:
(a) "Laundry" means Podell Industries, Inc. and its subsidiary
Laundry, Inc.
(b) "Laundry Accounts" means the account or accounts maintained under
the Laundry Plan for a Laundry Participant on April 1, 2000.
(c) "Laundry Participant" means an individual who had a Laundry
Account on April 1, 2000.
(d) "Laundry Plan" means the Podell Industries, Inc. 401(k) Profit
Sharing Plan, as in effect through April 1, 2000.
(e) "Merger" means the transfer of assets of the Laundry Plan to this
Plan effective as of April 1, 2000.
D-2. Merger. Effective as of April 1, 2000, the assets of the Laundry Plan
are merged into this Plan and the trust thereunder and effective as of April 1,
2000 the terms of this Plan supersede in all respects the terms of the Laundry
Plan with respect to the Laundry Accounts transferred to the Plan.
D-3. Eligibility. The following rules modify the provisions of paragraph
3.1(f) of the Plan with respect to Laundry Participants.
(a) Any individual who was a Laundry Participant on March 31, 2000
shall automatically become a Participant in the Plan on April 1, 2000 for
purposes of making Tax Saver Contributions.
(b) Any individual who was not a Laundry Participant on March 31,
2000, but who was on the Laundry payroll on that date shall be eligible to
participate in the Plan for purposes of making Tax Saver Contributions on
the date on or after April 1, 2000 on which he satisfies the eligibility
requirements set forth in the Laundry Plan as of March 31, 2000. For
purposes of this paragraph (b), service with Laundry or another Employer or
Affiliate after the Merger will be counted in the same manner as service
with Laundry prior to the Merger.
(c) The eligibility for Plan participation of an individual whose date
of hire by Laundry is after March 31, 2000 shall be determined solely in
accordance with the regular provisions of the Plan.
72
(d) Participation in the Plan for purposes of receiving Matching
Contributions and Profit Sharing Contributions shall be determined under
Section 3.1, except that service with Laundry prior to its acquisition by
the Company shall be deemed to be service with an Affiliate.
D-4 Transfer of Accounts. Upon transfer to the Plan, a Participant's
Laundry Accounts, if any, shall be allocated as follows: amounts in his Deferral
Contributions Account under the Laundry Plan shall be transferred to a Tax-Saver
Contributions Account, amounts in his Regular Matching Contributions Account
shall be transferred to a Matching Contributions Account, and any amounts
attributable to a rollover contribution shall be transferred to a Rollover
Account.
D-5 Investment of Transferred Amounts. During a transition period
commencing on the Merger date and ending as soon as practicable thereafter, as
determined by the Committee in its sole discretion, Transferred Laundry Accounts
shall be invested in such manner as the Committee prescribes. After the end of
the transition period, Participants may elect to have such accounts reallocated
among the Investment Funds in accordance with the normal provisions of the Plan.
No transactions, such as withdrawals or loans, shall be processed during the
transition period except as provided in subsection D-11.
D-6 Vesting in Matching Contributions Account. Individuals who were on the
Laundry payroll on June 30, 2000 shall be vested in their Matching Contributions
Account (with regard to contributions made both before and after the Merger) in
accordance with the following vesting schedule.
Years of Service Vested Percentage
less than 2 0%
2 33-1/3%
3 66-2/3%
4 or more 100%
D-7 Calculation of Service for Vesting in Matching Contributions Account.
With respect to any individual who was on the Laundry payroll on March 31, 2000,
"Years of Vesting Service" for purposes of calculating the vested portion of his
Matching Contributions Account shall be calculated in accordance with the Plan;
provided, however, that for this purpose (a) employment both before and after
the Merger shall be taken into account, and (b) the first date for which such an
individual has an "Hour of Service" shall be deemed to be (i) June 1 of the
calendar year of his actual date of hire if such actual date of hire was August
1 or later, or (ii) June 1 of the calendar year preceding the calendar year of
his actual date of hire if such actual date of hire was before August 1.
D-8 Vesting in Profit Sharing Contributions Account. With respect to any
individual who was on the Laundry payroll on March 31, 2000, the vested portion
of any Profit Sharing Contributions Account shall be determined in accordance
with the normal rules of the Plan; provided, however, that in determining which
vesting schedule under paragraph (b) or (c) of Section 7.1 shall apply, the
individual's date of hire by Laundry shall be used in determining when such an
individual is first credited with an "Hour of Service."
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73
D-9 Calculation of Service for Vesting in Profit Sharing Contribution
Account. For any individual who was on the Laundry payroll on March 31, 2000,
"Years of Vesting Service" for purposes of calculating the vested portion of his
Profit Sharing Contributions Account shall be calculated in accordance with the
Plan; provided, however, that employment with Laundry both before and after the
Merger shall be taken into account in determining such individual's Years of
Vesting Service.
D-10 Post-Merger Beneficiary Designation Required. Beneficiary designations
made under the Laundry Plan through March 31, 2000 by Laundry Participants shall
be of no effect with respect to the Plan on and after April 1, 2000, as of which
date only beneficiary designations made under the Plan shall be given effect.
D-11 Pre-Merger Elections and Designations. Notwithstanding any other
provision of this Plan, withdrawals, distributions or loans in process prior to
the Merger on account of deaths, or terminations of employment or participant
requests occurring or made prior to April 1, 2000 shall continue to be processed
under the applicable procedures of the Laundry Plan.
D-12 Laundry Plan Amended. The provisions of this Supplement D shall be
treated as an amendment to and part of the Laundry Plan, to the extent necessary
to give full effect to this Supplement. All provisions of the Plan, in its
capacity as a continuation and amendment of the Laundry Plan, shall be treated
as effective with respect to the Laundry Plan for periods prior to the Merger to
the extent necessary for the Laundry Plan to meet applicable requirements of all
provisions of law that become effective since the last determination letter with
respect to the Laundry Plan effective as of their respective effective dates,
including, without limitation, the Small Business Job Protection Act of 1996
("SBJPA"), the Uruguay Round Agreements ("GATT"), the Taxpayer Relief Act of
1997, and the IRS Restructuring and Reform Act of 1998.
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