14248.2
EXHIBIT 10.6
SMITH'S FOOD & DRUG CENTERS, INC. EMPLOYEE PROFIT SHARING PLAN
Established Effective January 3, 1993
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS 1
Affiliated Company 1
Agent for Service 1
Authorized Absence 1
Beneficiary 2
Break in Service 2
Code 2
Committee 2
Common Stock 2
Company 2
Compensation 2
Disability 3
Employee 3
Employment Commencement Date 3
ERISA 3
Fiduciary 3
Hour of Service 4
Named Fiduciary 4
Participant 4
Participant Account 4
Plan 4
Plan Year 4
Related Plan 4
Trust 4
Trust Fund 4
Trustees 4
Valuation Date 4
Year of Service 4
ARTICLE II - SERVICE AND LEAVE OF ABSENCE 5
2.1 Years of Service 5
2.2 Hours of Service. 5
ARTICLE III - ELIGIBILITY AND PARTICIPATION 7
3.1 Initial Participation 7
3.2 Termination of Participation 7
3.3 Participation Following Re-Employment or Ineligible
Employment 7
ARTICLE IV - CONTRIBUTIONS 8
4.1 Amount of Contributions 8
4.2 Time for Payment 8
4.3 Form of Contributions 8
4.4 Return of Contributions for Failure of
Deductibility or Mistake of Fact 8
4.5 For Exclusive Benefit of Employees 9
4.6 Participant Contributions 9
4.7 Rollovers and Transfers from Other Plans 9
ARTICLE V - ACCOUNTS, ALLOCATIONS AND VESTING 9
5.1 Participant Accounts 9
5.2 Allocation and Crediting of Company Contributions
and Forfeitures 9
5.3 Allocation and Crediting of Cash Dividends 9
5.4 Stock Splits, Warrants and Options 10
5.5 General Limitation on Allocations to P
articipants 10
5.6 Vesting 12
5.7 Permissive Vesting 12
ARTICLE VI - VALUATION 12
6.1 Valuation of Trust Fund 12
6.2 Allocation of Earnings and Losses 13
6.3 Notice of Value of Participant Accounts 13
ARTICLE VII - PAYMENT OF ACCOUNT BALANCES 13
7.1 Fully Vested Benefits 13
7.2 Non-Vested Benefits 13
7.3 Forfeitures 13
7.4 Manner of Making Distributions 13
7.5 Time for Making Distributions 14
7.6 Persons Under Legal or Other Disability 14
7.7 Designation of Beneficiaries 15
7.8 Missing Participants or Beneficiaries 15
7.9 Pre-Termination Distributions on Account of
Hardship 16
7.10 Rollover Transfers and Withholding 17
ARTICLE VIII - LIMITATIONS OF RIGHTS 17
8.1 Non-Transferability of Benefits 17
8.2 Employees' Rights; Limitations 17
ARTICLE IX - AMENDMENT; MERGER, CONSOLIDATION OR
TRANSFER OF ASSETS; TERMINATION 17
9.1 Amendment 17
9.2 Merger, Consolidation or Transfer of Assets 18
9.3 Termination 18
9.4 Discontinuance of Contributions 18
9.5 Limitations 19
9.6 Notice of Amendment, Termination or Partial
Termination 19
ARTICLE X - TRUST FUND 19
10.1 Trust Agreement 19
10.2 Trust Contributions 19
10.3 Trust Fund Investments 20
10.4 Participant Accounts 20
10.5 Voting Rights 20
ARTICLE XI - CLAIM AND REVIEW PROCEDURE 20
11.1 Definitions 20
11.2 Claim Filing Procedure 20
11.3 Consideration of Claim; Rendering of Decision 21
11.4 Appellate Review Procedure 21
11.5 Limitation on Claims Procedure 22
11.6 Other Remedies 22
11.7 Authorized Representatives 22
ARTICLE XII - ADMINISTRATION 22
12.1 Allocation of Responsibility Among Fiduciaries 22
12.2 Appointment of Committee 23
12.3 Committee Meetings 23
12.4 Committee Officers 23
12.5 Committee Expenses 23
12.6 Committee Responsibilities 24
12.7 Other Powers 24
12.8 Indemnification of Committee 24
12.9 Expenses of Establishing and Administering the
Plan 25
ARTICLE XIII - TOP-HEAVY PROVISIONS 25
13.1 Special Rules Applicable for Top-Heavy
Plan Years 25
13.2 Definitions Relating to Top-Heavy Provisions 26
ARTICLE XIV - MISCELLANEOUS 28
14.1 Governing Law 28
14.2 Information Returns 28
14.3 Company Action 28
14.4 Company Records 28
14.5 No Guarantee of Interests 28
14.6 Interpretations and Adjustments 28
14.7 Uniform Rules 29
14.8 Evidence 29
14.9 Waiver of Notice 29
14.10 Gender and Number 29
SMITH'S FOOD & DRUG CENTERS, INC. EMPLOYEE PROFIT SHARING PLAN
Established Effective January 3, 1993
THIS EMPLOYEE PROFIT SHARING PLAN, is hereby established
effective January 3, 1993, by Smith's Food & Drug Centers, Inc.,
a Delaware corporation, for the purpose of providing funds for
the eventual retirement of its eligible employees, and to provide
eligible employees greater incentive to strive for the success of
the operation of Smith's Food & Drug Centers, Inc. through
ownership of Smith's Food & Drug Centers, Inc. common stock
acquired with plan contributions.
ARTICLE I
DEFINITIONS
The following terms, when used in the Plan, shall have the
meaning set forth below, unless a different meaning is plainly
required by the context:
"Affiliated Company" means the Company, and any other
employer that is, along with the Company, a member of a
controlled group of corporations or under common control (as
defined in Section 414(b) and (c) of the Code), a member of an
affiliated service group (as defined in Section 414(m) of the
Code) which includes the Company or any other entity required to
be aggregated with the Company pursuant to regulations under
Section 414(o) of the Code.
"Agent for Service" means the Committee or any member
thereof.
"Authorized Absence" means any of the following periods of
absence from employment from the Company:
(a) layoffs, not in excess of 6 months, due to
temporary closing or downturn of business,
(b) leaves of absence authorized by the Company in
accordance with standard personnel policies applied in a
uniform and nondiscriminatory manner to all Employees
similarly situated, and
(c) military leave while the Employee's rights are
protected by law; provided the Employee returns to
employment with the Company immediately (but in the case
of military leave, within the 90-day period following
release or discharge from the military or within the
period prescribed by applicable law, whichever is longer)
upon the expiration of such periods of absence.
"Beneficiary" means the person or persons who become
entitled to receive payments in the event of the death of a
Participant in accordance with the provisions of Section 7.7.
"Break in Service" means a Plan Year during which an
Employee or Participant is credited with 500 or fewer Hours of
Service with the Company. A Break in Service shall not be deemed
to have occurred during any period of Authorized Absence.
"Code" means the Internal Revenue Code of 1986, as
amended. Reference to a section of the Code shall include that
section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.
"Committee" means the Administrative Committee designated
in accordance with Section 12.2.
"Common Stock" means the Company's Class B common stock
which is readily tradable on an established securities market or
other common stock issued by the Company which is readily
tradable on an established securities market.
"Company" means Smith's Food & Drug Centers, Inc., a
corporation organized and existing under the laws of the State of
Delaware, and, where applicable, its subsidiaries which have
adopted the Plan.
"Compensation" means wages within the meaning of Section
3401(a) of the Code and all other payments of compensation to an
Employee by the Company for which the Company is required to
furnish the Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code. Compensation is determined
without regard to any rules under Section 3401 which limit the
remuneration included in wages based on the nature or location of
the employment or the services performed. Notwithstanding the
foregoing, Compensation shall include any amount which is
contributed by the Company pursuant to a salary reduction
arrangement and which is not includable in the gross income of
the Employee under Sections 125 (i.e., a cafeteria plan) or
402(a)(8) (i.e., a Section 401(k) cash or deferred arrangement)
of the Code. Notwithstanding the foregoing, Compensation shall
not include amounts in excess of $200,000 (adjusted at the same
time and in the same manner as permitted under Section 415(d) of
the Code). In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section 414(q)(6) of
the Code shall apply, except that in applying such rules, the
term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not
attained age 19 before the close of the applicable period. If,
as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, the limitation shall be prorated
among the affected individuals in proportion to each such
individual's Compensation as determined under this provision
prior to the application of this limitation.
"Disability" means, as determined by the Committee in its
sole discretion, the inability of a Participant to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or to be of long, continued and indefinite
duration.
"Employee" means any person who is employed by the Company
but excludes any person who is employed as an independent
contractor. A person who is considered a leased employee of the
Company within the meaning of Sections 414(n)(2) and 414(o)(2) of
the Code shall not be considered an Employee for purposes of the
Plan but shall be considered an employee for purposes of the
requirements of Section 414(n)(3) of the Code; provided, however,
a leased employee shall not be considered an employee of the
Company for any purpose if:
(a) such leased employee is covered by a
money purchase pension plan providing:
(1) a non-integrated employer
contribution rate of at least 10% of
compensation, as defined in Section
415(c)(3) of the Code, but including
amounts contributed pursuant to a salary
reduction agreement which are excludable
from the employee's gross income under
Sections 125, 401(a)(8), 402(h) or 403(b)
of the Code;
(2) immediate participation; and
(3) full and immediate vesting.
(b) leased employees do not constitute
more than 20% of the recipient's non-highly
compensated work force.
"Employment Commencement Date" means the date on which an
Employee is first credited with an Hour of Service or, if
applicable, the date on which an Employee is first credited with
an Hour of Service following a Break in Service.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"Fiduciary" means any person who: (a) exercises any
discretionary authority or control respecting management of the
Plan or exercises any authority or control respecting management
or disposition of the assets of the Plan, (b) renders investment
advice for a fee or any other compensation, direct or indirect,
with respect to any monies or other property of the Trust Fund,
or has any authority or responsibility to do so, or (c) has any
discretionary responsibility in the administration of the Plan
and Trust.
"Hour of Service" mean each hour credited to an Employee
under Section 2.2.
"Named Fiduciary" means the Committee.
"Participant" means any Employee who becomes a Participant
as provided in Article III hereof. Whether or not an Employee is
eligible to be a Participant shall be determined by the
Committee.
"Participant Account" means the account established and
maintained for each Participant pursuant to Article V.
"Plan" means the plan set forth in and created by this
document, and all subsequent amendments thereto.
"Plan Year" means the fiscal year of the Plan and shall
coincide with the Company's fiscal year.
"Related Plan" means any defined contribution plan (as
defined in Section 415(k) of the Code) maintained by the Company
or by any other employer that is, along with the Company, a
member of a controlled group of corporations or under common
control (as defined in Section 414(b) and (c) of the Code, as
modified by Section 415(h) thereof) or by any member of an
affiliated service group (as defined in Section 414(m) of the
Code) or by any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code.
"Trust" means the trust set forth in and created by the
Smith's Food & Drug Centers, Inc. Stock Profit Sharing Trust
effective January 3, 1993.
"Trust Fund" means all assets held by the Trustees for the
Company under the Trust.
"Trustees" means the trustee or trustees of the Trust
created pursuant to the Plan and any duly appointed and qualified
successor trustee or trustees.
"Valuation Date" means each date the Trust Fund is valued
by the Trustees in accordance with Section 6.1.
"Year of Service" means each year credited to an Employee
under Section 2.1.
ARTICLE II
SERVICE AND LEAVE OF ABSENCE
2.1 Years of Service. Years of Service shall include
each Plan Year during which an Employee has completed at least
1,000 Hours of Service with the Company.
2.1.1 Years of Service shall not include Plan
Years beginning prior to the effective date of the Plan.
2.1.2 If a Participant who incurred a Break in
Service is reemployed by the Company, his Years of Service
shall include Years of Service to his credit at the
beginning of such Break in Service, unless he did not have
a vested and nonforfeitable right to any portion of his
Participant Account prior to such Break in Service and the
number of consecutive one-year Breaks in Service equals or
exceeds five.
2.2 Hours of Service. The term "Hour of Service", with
respect to any Employee, shall include:
2.2.1 Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the
Company or an Affiliated Company. These hours shall be
credited to the Employee for the computation period or
periods in which the duties are performed.
2.2.2 Each hour for which an Employee is paid, or
entitled to payment, by the Company or an Affiliated
Company on account of a period of time during which no
duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), lay
off, jury duty, military duty or leave of absence. No
more than 501 Hours of Service shall be credited under
this paragraph for any single continuous period (whether
or not such period occurs in a single computation period).
Hours under this paragraph shall be calculated and
credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations which are incorporated herein by this
reference.
2.2.3 Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by
the Company or an Affiliated Company. For vesting
purposes, these hours shall be credited to the Employee
for the computation period or periods to which the award
or agreement pertains rather than the computation period
in which the award, agreement or payment is made.
2.2.4 Hours of Service shall be determined on the
following basis: for hourly paid Employees, from records
of the Company or Affiliated Company of hours worked and
hours for which payment is made or due as determined under
this Section 2.2, and for salaried Employees, on the basis
of 45 hours per week, with an Employee receiving credit
for a full week for each week during which he has one Hour
of Service. An Employee shall not receive credit more
than once for any Hour of Service.
2.2.5 For purposes only of determining a Break in
Service:
(a) For any period of Authorized Absence,
Hours of Service are determined on the basis of a
45-hour week or pro rata portion thereof.
(b) For any period of absence (i) by
reason of the pregnancy of the Employee, the birth of
a child of the Employee, or the placement of a child
with the Employee in connection with the adoption of
such child by the Employee or (ii) for purposes of
caring for such child of the Employee for a period
beginning immediately following such birth or
placement, Hours of Service are determined under
2.2.5(c) and (d).
(c) The hours to be credited as Hours of
Service for purposes of 2.2.5(b) shall be those Hours
of Service which otherwise would normally have been
credited to the Employee under the Plan, except that
if the Committee is unable to determine the
foregoing, eight Hours of Service shall be credited
to the Employee for each working day of such absence.
Provided, that the total Hours of Service to be
credited by reason of any one pregnancy or placement
shall not exceed 501.
(d) The Hours of Service described in
2.2.5(b) and (c) shall be credited only to the
computation period in which the period of absence
begins if the Employee would be prevented from
incurring a One Year Break in Service in such period
solely because such period of absence is treated as
Hours of Service hereunder, or, in any other case, in
the immediately following computation period.
2.2.6 Notwithstanding anything else to the contrary,
for purposes only of allocating contributions and
forfeitures under Section 5.2, the following shall apply:
(a) The hours to be credited as Hours of
Service pursuant to this Section 2.2 shall only be
hours for which an Employee is paid, or entitled to
payment, by the Company and such hours shall be
credited to the Plan Year in which the payment is
made. Hours of Service for salaried Employees shall
be determined on the basis of 45 hours per week. A
salaried Employee who is employed for less than a
full week shall be credited with the pro rata portion
of such week during which he is employed by the
Company.
(b) The Hours of Service credited to a
Participant during a Plan Year shall not exceed
2,080.
2.2.7 Provisions of this Section 2.2 shall be construed
so as to resolve any ambiguities in favor of crediting an
Employee with Hours of Service.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Initial Participation. Each Employee shall become a
Participant in the Plan on his Employment Commencement Date.
Notwithstanding the foregoing, the following classes of Employees
shall be excluded from participation in the Plan: (a) Employees
who are holding or have exercised an option under any stock
option plan of the Company; (b) Employees who are officers of the
Company; and (c) Employees who are members of the Board of
Directors of the Company.
3.2 Termination of Participation. A Participant shall
continue to be such until the first to occur of the following
events:
3.2.1 Normal or Late Retirement. The Participant
retires from the employ of the Company on or after the
date on which he attains age 65. Until actual retirement,
a Participant shall continue to participate in the Plan.
3.2.2 Disability Retirement. The Participant
retires or is retired from the employ of the Company
because of Disability, irrespective of his age.
3.2.3 Death. The Participant dies.
3.2.4 Resignation or Dismissal. The Participant
resigns or is dismissed from the employ of the Company
before retirement in accordance with 3.2.l or 3.2.2 above.
3.2.5 Ineligible Class of Employees. The
Participant becomes a member of an ineligible class of
Employees.
3.3 Participation Following Re-Employment or Ineligible
Employment.
3.3.1 Former Employees. A former Participant shall
become a Participant immediately upon his return to the
employ of the Company.
3.3.2 Eligible Classes of Employees. In the event a
Participant becomes ineligible to participate because the
Employee is no longer a member of the eligible class of
Employees, such Employee shall participate immediately
upon his return to an eligible class of Employees. In the
event an Employee who has never been a Participant because
the Employee was not a member of the eligible class of
Employees becomes a member of the eligible class, such
Employee shall participate immediately if such Employee
has satisfied the requirements of Section 3.1, and would
have previously become a Participant had the Employee been
in the eligible class.
ARTICLE IV
CONTRIBUTIONS
4.1 Amount of Contributions. With respect to each Plan
Year and subject to Section 4.4, the Company shall contribute to
the Plan such amounts as may be determined by the Executive
Committee of the Board of Directors or by the executive
officer(s) of the Company to whom the Board of Directors has
delegated such responsibility.
4.2 Time for Payment. The Company may make payment of
its contribution for a Plan Year in one sum or several
installments on any date or dates which the Company may select,
but shall complete the transfer of its contribution for each Plan
Year on or before the date prescribed by law (including
extensions thereof) for the filing of its federal income tax
return for the fiscal year corresponding to the applicable Plan
Year.
4.3 Form of Contributions. The Company contributions
with respect to each Plan Year shall be transferred to the
Trustees in the form of cash or Common Stock, as determined by
the Company's Board of Directors.
4.4 Return of Contributions for Failure of Deductibility
or Mistake of Fact. Notwithstanding anything herein to the
contrary, upon the Company's request, a contribution which was
conditioned upon the deductibility of the contribution under
Section 404 of the Code shall be returned (to the extent the
deduction is disallowed) to the Company within one year after the
date on which the deduction is disallowed. Each contribution
made by the Company pursuant to this Article IV is hereby
expressly conditioned upon the deductibility of the contribution
under Section 404 of the Code. If a contribution or any portion
thereof is made by the Company as a result of a mistake of fact,
the Trustees shall, upon written request by the Company, return
the contribution or such portion to the Company within one year
after the date of payment to the Trustees. If a contribution
under the Plan is conditioned on initial qualification of the
Plan under Section 401(a) of the Code, and the Plan receives an
adverse determination with respect to its initial qualification,
the Trustees shall, upon written request of the Company, return
to the Company the amount of such contribution (increased by
earnings attributable thereto and reduced by losses attributable
thereto) within one calendar year after the date that
qualification of the Plan is denied, provided that the
application for the determination is made by the time prescribed
by law for filing the Company's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe.
4.5 For Exclusive Benefit of Employees. Any and all
contributions by the Company to the Plan, with the exceptions
covered by Section 4.4, shall be irrevocable, and neither such
contributions nor any income therefrom shall be used for, nor
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries under the Plan.
4.6 Participant Contributions. No Participant shall be
required or permitted to make contributions to the Plan.
4.7 Rollovers and Transfers from Other Plans. Rollover
contributions and transfers from other qualified retirement plans
shall not be permitted.
ARTICLE V
ACCOUNTS, ALLOCATIONS AND VESTING
5.1 Participant Accounts. A separate Participant Account
shall be established and maintained by the Committee for each
Participant.
5.2 Allocation and Crediting of Company Contributions and
Forfeitures. Subject to the limitations in this Section 5.2 and
Section 5.5, as of the last day of each Plan Year, the Company
contribution for the Plan Year ending on that date, together with
forfeitures which arose under the Plan during that year, shall be
allocated among and credited to the Participant Accounts of the
Participants described below in the ratio which the Hours of
Service credited to each Participant for the Plan Year bears to
the total Hours of Service credited to all Participants for such
Plan Year. The Company contribution for any Plan Year will be
allocated among and credited to the Participant Accounts of the
following Participants:
5.2.1 Participants who are credited with a Year of
Service for the Plan Year and are still Employees as of
the last day of the Plan Year; and
5.2.2 Participants who died, retired or became
permanently and totally disabled during the Plan Year.
Any allocation of Common Stock will be carried in whole and
fractional shares.
5.3 Allocation and Crediting of Cash Dividends. Any cash
dividends declared on the Common Stock held in Participant
Accounts shall be allocated to the corresponding Participant
Accounts and may be applied by the Trustees to the purchase of
additional Common Stock.
5.4 Stock Splits, Warrants and Options. Any Common Stock
received by the Trustees as a result of a stock split or stock
dividend, or a reorganization or other recapitalization of the
Company will be allocated in the same manner as the Common Stock
to which it is attributable is then allocated. In the event any
rights, warrants or options are issued on Common Stock, the
Trustees will exercise them for the acquisition of additional
Common Stock to the extent that cash is then available from any
source including dividends on Common Stock. Any Common Stock
acquired in this fashion will be treated as Common Stock bought
by the Trustees for the net price paid. Any rights, warrants or
options on Common Stock which cannot be exercised for lack of
cash may be sold by the Trustees and the proceeds treated as a
current cash dividend received on Common Stock. Common Stock
acquired in this fashion will be allocated to each Participant
Account in the same ratio that the Common Stock in each
Participant Account bears to the aggregate total of the Common
Stock in all Participant Accounts.
5.5 General Limitation on Allocations to Participants.
Notwithstanding any other provisions of the Plan, the Annual
Addition (defined in 5.5.4) credited to a Participant Account for
any Plan Year shall not exceed an amount equal to:
5.5.1 The lesser of:
(a) $30,000 or, if greater, one-fourth of
the defined benefit dollar limitation set forth in
Section 415(b)(1)(A) of the Code as in effect for the
limitation year; or
(b) 25 percent of the Participant's
Compensation for the limitation year (defined in
5.5.6).
If the foregoing limitation is exceeded, the Participant's
Annual Addition shall be reduced as provided in 5.5.5.
5.5.2 The limitation in 5.5.1 shall not apply to any
contribution for medical benefits (within the meaning of
Section 419A(f)(2) of the Code) after separation from
service and any other amount which is otherwise treated as
an Annual Addition under Section 415(l)(1) of the Code.
5.5.3 If a Participant also participates in a
defined benefit plan (as defined in Section 415(k) of the
Code) maintained by the Company, the sum of the defined
benefit plan fraction and the defined contribution plan
fraction (as such terms are defined in Section 415(e) of
the Code) shall not exceed 1.0 for any limitation year
(defined in 5.5.6). If the sum of the fractions exceeds
1.0, the Participant's Annual Addition shall be reduced as
provided in 5.5.5. For purposes of this Section 5.5, a
plan is deemed to be maintained by the Company if the plan
is maintained by any employer that is, along with the
Company, a member of a controlled group of corporations or
under common control (as defined in Section 414(b) and (c)
of the Code, as modified by Section 415(b) thereof) or a
member of an affiliated service group (as defined in
Section 414(m) of the Code).
5.5.4 The Annual Addition described in 5.5.1 subject
to the above limitations consists of the following:
(a) The amount of any Company
contributions credited to the Participant's Account
under the Plan and the Participant's account under
any Related Plan during the Plan Year;
(b) The amount of any forfeitures credited
to the Participant's Account under the Plan and the
Participant's account under any Related Plan during
the Plan Year;
(c) The amount of any contributions made
by the Participant under any Related Plan during the
Plan Year; and
(d) The amount allocated to the
Participant's individual medical account, as defined
in Section 415(1)(1) of the Code, under any Related
Plan during the Plan Year; and
(e) The amount attributable to
post-retirement medical benefits allocated to the
separate account of a Participant, who is a key
employee (as defined in Section 419A(d)(3) of the
Code), under a welfare benefit plan (as defined in
Section 419(e) of the Code) maintained by the
Company.
5.5.5 Any increases in the value of a Participant's
Account due to an increase in the fair market value of the
Trust Fund are not subject to the limitations of 5.5.1.
In the event that it is determined that, but for this
5.5.5, the Annual Addition to a Participant's Account
would be in excess of the limitations contained in this
Section, such Annual Addition shall be reduced to the
extent necessary to bring such Annual Addition within the
limitations contained in this Section in the following
order:
(a) Any Participant contributions which
are included in such Annual Addition shall be
returned to a Participant and shall be treated as a
withdrawal of Participant contributions; and
(b) If there are no such Participant
contributions, or if such Participant contributions
are not sufficient to reduce the Annual Addition to
the limitations contained herein, such Participant's
allocable share of Company contributions for the Plan
Year shall be reduced.
The portion of any contribution which has been allocated
to a Participant under the Plan for a Plan Year, but which
cannot be credited to his Participant Account because of
the limitations imposed by this Section 5.5 shall, subject
to the limitations of this Section 5.5, be allocated among
and credited to the Participants entitled to share in the
contribution for that year in accordance with Section 5.2.
5.5.6 For purposes of this Section 5.5, the term
"limitation year" means the period to be used in
determining the Plan's compliance with Section 415 of the
Code and the regulations thereunder. The Company shall
take all actions to ensure that the limitation year is the
same period as the Plan Year.
5.6 Vesting. A Participant's interest in his Participant
Account shall become vested and nonforfeitable to the extent of
the following percentages, based upon his Years of Service
completed after the effective date of the Plan, unless otherwise
provided in Articles IX or XIII:
Years of Service Percentage Vested
Less than 5 0
5 or more 100
The foregoing to the contrary notwithstanding, if a Participant
retires or is retired pursuant to 3.2.1 or 3.2.2 or dies while an
Employee of the Company, the Participant's interest in his
Participant Account shall thereafter be fully vested and
nonforfeitable.
5.7 Permissive Vesting. Notwithstanding the rules of
Section 5.6 above, the Board of Directors of the Company may
determine that the interests of all Participants under the Plan
who are affected by a closure or sale of a unit of the Company to
an entity that is not an Affiliated Company shall become fully
vested and nonforfeitable, notwithstanding the fact that the
closure or sale does not constitute a partial termination under
Section 9.3.
ARTICLE VI
VALUATION
6.1 Valuation of Trust Fund. As soon as practicable, the
Trustees shall determine the fair market value of the Trust Fund
as of the last day of each Plan Year (excluding the Company's
contribution due as of that day and any amounts distributed to
Participants whose participation was terminated during the
period), and as of such other dates as may be determined by the
Trustees, in such manner as the Trustees in their discretion
shall prescribe but in accordance with a method consistently
followed and uniformly applied.
6.2 Allocation of Earnings and Losses. Any increases or
decreases in such value since the preceding Valuation Date shall
be allocated by the Committee to Participant Accounts on the
basis of account balances as of the last day of the current Plan
Year, but prior to crediting of any contributions for such Plan
Year.
6.3 Notice of Value of Participant Accounts. Within 60
days following receipt of a written request (but not more
frequently than once during any 12-month period), the Committee
shall give a Participant notice in writing of the fair market
value of his Participant Account. Alternatively, the Committee
may elect to give each Participant notice in writing as soon as
practicable after the end of the Plan Year of the fair market
value of his Participant Account including Company contributions
and forfeitures allocated to his account as of the last day of
the Plan Year.
ARTICLE VII
PAYMENT OF ACCOUNT BALANCES
7.1 Fully Vested Benefits. If a Participant retires or
is retired from the employ of the Company under 3.2.1 or 3.2.2,
dies while in the employ of the Company, or resigns or is
dismissed when his Participant Account is fully vested in him,
the entire balance (after all adjustments then required under the
Plan have been made) in his Participant Account will become
distributable to or for his benefit, or to or for the benefit of
his Beneficiary, as the case may be, in accordance with Sections
7.4 and 7.5.
7.2 Non-Vested Benefits. Except as specifically provided
in Section 7.1, if a Participant resigns or is dismissed from the
employ of the Company before retirement under 3.2.1 or 3.2.2 and
before becoming vested under Article V, the Participant will not
be entitled to a benefit under the Plan. The balance in his
Participant Account will be reduced to the extent not vested in
accordance with Article V.
7.3 Forfeitures. The amount, if any, by which a
Participant Account is reduced in accordance with Section 7.2
will be a forfeiture and, to the extent not needed to restore
forfeitures pursuant to this Section 7.3, will be allocated and
credited in accordance with Section 5.2 as of the last day of the
Plan Year in which the Participant was deemed to receive a
distribution of his Participant Account. For purposes of this
Section 7.3, a zero vested Participant Account balance will be
deemed distributed immediately upon termination of employment by
the Participant. If a Participant is deemed to receive a
distribution pursuant to this Section 7.3, and the Participant
resumes employment covered under this Plan before the Participant
has incurred five consecutive one-year Breaks in Service, his
Participant Account balance on the date of the deemed
distribution shall be restored, without adjustment for earnings
or losses.
7.4 Manner of Making Distributions. The entire balance
(after all adjustments then required under the Plan have been
made) in a Participant Account, as of the Valuation Date next
preceding the date of distribution, will be distributed in a
single sum to or for the benefit of the Participant, or in the
event of his death to or for the benefit of his Beneficiary, in
the form of whole shares of Common Stock, or cash in the
following manner. At least 30 days before the proposed payment
date, the Committee shall notify the Participant of his right to
demand distribution of his Participant Account entirely in whole
shares of Common Stock (with the value of fractional shares paid
in cash). The Participant or, if applicable, the Beneficiary
does not elect, within 15 days following the date of notification
by the Committee of such right, to receive a distribution of his
Participant Account entirely in whole shares of Common Stock
(with the value of fractional shares paid in cash), the
Participant Account shall be distributed entirely in whole shares
of Common Stock (with the value of fractional shares paid in
cash) or in cash as determined by the Committee. The amount of
fractional shares, if any, to be paid in cash will be based on
the market value of the Common Stock as of the Valuation Date
coincident with or immediately preceding the date on which the
distribution occurs.
7.5 Time for Making Distributions. If a Participant
Account becomes distributable under Section 7.1, distribution of
the balance of such Account will be made as soon as
administratively practicable following the date the Participant
terminates participation in the Plan pursuant to Section 3.2, but
in no event later than the 60th day next following the close of
the Plan Year during which the Participant attains age 65 or
terminates employment with the Company, whichever occurs last.
However, if the balance of the Participant Account exceeds
$3,500, distribution of such Account shall not be made prior to
age 65 or death, whichever occurs first, unless the Participant
consents in writing to such distribution. Anything else to the
contrary notwithstanding, distribution of the Participant Account
will be made or commenced by April 1 of the calendar year
following the calendar year in which the Participant attains
70-1/2 without regard to whether the Participant has terminated
employment. If a Participant is eligible to share in any
contribution or other amount not distributed pursuant to the
foregoing provisions, such amount shall be distributed as soon as
administratively practicable after the time such amount is
allocated on his behalf. If part or all of a Participant Account
is assigned to an alternate payee pursuant to a qualified
domestic relations order within the meaning of Section 414(p) of
the Code, distribution of the assigned portion of such Account
may be made or commenced in accordance with this Article without
regard to whether the Participant has attained his "earliest
retirement age" within the meaning of Section 414(p) of the Code.
For purposes of the distribution of the assigned portion of the
Participant Account, the alternate payee will be treated as if
the alternate payee were a Participant.
7.6 Persons Under Legal or Other Disability. In the
event a Participant or Beneficiary is declared incompetent and a
conservator or other person legally charged with the care of his
person or of his estate is appointed, any benefits to which such
Participant or Beneficiary is entitled shall be paid to such
conservator or other person legally charged with the care of his
person or of his estate.
7.7 Designation of Beneficiaries. Each Participant from
time to time, by signing a form furnished by the Committee, may
designate any person or persons to whom his benefits under the
Plan are to be distributed if the Participant dies before
receiving all of such benefits. If the Participant is married,
the Participant may not designate a Beneficiary other than the
Participant's spouse unless the Participant's spouse consents in
writing to such designation. The consent is irrevocable, must
designate a Beneficiary which cannot be changed without spousal
consent (unless the consent of the spouse expressly permits
designations by the Participant without spousal consent), must
acknowledge the effect of such designation, and must be witnessed
by a Plan representative or a notary public. Such consent will
not be required if it is established to the satisfaction of the
Committee that the spouse cannot be located or that there is some
other circumstance precluding such consent as set forth in
regulations under Section 417 of the Code. If the spouse is
legally incompetent to give consent, the spouse's legal guardian,
even if such guardian is the Participant, may give consent. Any
beneficiary designation or any consent by the Participant's
spouse (or establishment that a spouse cannot be located) will be
void if the Participant marries or remarries.
A beneficiary designation form will be effective only when
the form is filed in writing with the Committee while the
Participant is alive and will cancel all beneficiary designation
forms previously signed and filed by the Participant. If a
Participant failed to designate a Beneficiary before his death as
provided above, or if the Beneficiary designated by a deceased
Participant dies before him or before complete distribution of
his benefits, the Beneficiary designated shall be deemed to be
the Participant's spouse, if the Participant was married at the
time of his death. If the Participant was not married at the
time of his death, the Committee shall make distribution of the
Participant's interest in the Trust Fund to the person or persons
indicated below in the following order of priority:
7.7.1 The issue of the Participant by right of
representation.
7.7.2 The parents of the Participant.
7.7.3 The siblings of the Participant and their
issue by right of representation.
7.7.4 The executor, administrator or personal
representative of the Participant's estate.
7.8 Missing Participants or Beneficiaries. Each
Participant and each designated Beneficiary must file with the
Company 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 Beneficiary at his last
post office address filed with the Company will be binding on the
Participant and his Beneficiary for all purposes of the Plan.
The Committee shall not be required to search for or locate a
Participant or Beneficiary. If the Company or Committee notify a
Participant or Beneficiary that he is entitled to a distribution
and also notifies him of the provisions of this Section, and the
Participant or Beneficiary fails to claim his benefits under the
Plan or make his whereabouts known to the Company or the
Committee within two calendar years after the notification, the
benefits under the Plan of the Participant or Beneficiary will be
disposed of as follows:
7.8.1 If the whereabouts of the Participant is
unknown but the whereabouts of the Participant's
designated Beneficiary then is known to the Company or the
Committee, distribution will be made to the designated
Beneficiary.
7.8.2 If the whereabouts of the Participant and his
designated Beneficiary then is unknown to the Company or
the Committee, but the whereabouts of one or more
relatives by adoption, blood or marriage of the
Participant is known to the Company or the Committee, the
Committee shall distribute the Participant's benefits to
any one or more of such relatives and in such proportions
as the Committee determines.
7.8.3 If the whereabouts of the Participant, his
designated Beneficiary and relatives is unknown, the
balance of the Participant Account shall be deemed a
forfeiture.
The foregoing to the contrary notwithstanding, if a claim for
benefits distributed pursuant to the foregoing provisions is made
by a Participant or designated Beneficiary who has not received
such distribution and who would otherwise be entitled thereto,
the Participant's benefit shall be restored and distributed under
the applicable provisions of the Plan.
7.9 Pre-Termination Distributions on Account of Hardship.
The Committee may, upon the request of a Participant at any time
prior to his termination of employment, direct the Trustees to
make a lump-sum distribution to the Participant from the vested
portion of his Participant Account, determined as of the
Valuation Date coinciding with or immediately succeeding the date
a request is made hereunder, for the purposes set forth below,
subject to the following rules:
(a) Each request for a distribution must be made by
written application to the Committee supported by such
evidence as the Committee may require;
(b) In no event shall the amount distributed to a
Participant in accordance with this Section 7.9 exceed the
amount necessary to satisfy the financial hardship serving
as the basis for the distribution;
(c) The Committee shall direct the Trustee to make a
distribution to a Participant in accordance with this
Section 7.9 only to enable the Participant (1) to meet any
expenses incurred or necessary for medical care, described
in Section 213(d) of the Code, to the extent not covered
by insurance, for the Participant or any of his
dependents; (2) to pay tuition and related educational
fees for the next 12-months post-secondary education for
the Participant or any of his dependents; or (3) to
purchase a principal residence for the Participant; or (4)
to prevent eviction from the Participant's principal
residence or foreclosure of the mortgage on the
Participant's principal residence.
7.10 Rollover Transfers and Withholding. If a
distribution under this Article VII constitutes an "eligible
rollover distribution" within the meaning of Section 402(f)(2)(A)
of the Code, and the Participant or Beneficiary entitled to such
distribution elects to have such distribution paid directly to an
"eligible retirement plan" within the meaning of Section
401(a)(31)(D) of the Code, the Committee shall cause the
distribution to be made in the form of a "trustee-to-trustee
transfer" to the "eligible retirement plan" pursuant to Section
401(a)(31) of the Code and regulations thereunder. Within a
reasonable time (i.e., no earlier than 90 days and no later than
30 days) prior to making an "eligible rollover distribution," the
Committee shall provide the Participant or Beneficiary, whichever
is applicable, with the written explanation described in Section
402(f) of the Code. To the extent required by the Code and
regulations thereunder, the Committee shall direct the Trustees
to withhold income tax on distributions from the Plan.
ARTICLE VIII
LIMITATIONS OF RIGHTS
8.1 Non-Transferability of Benefits. The interests of
Participants and Beneficiaries under the Plan are not subject to
the claims of their creditors and may not in any way be assigned,
alienated or encumbered. The foregoing shall not apply to
qualified domestic relations orders within the meaning of Section
414(p) of the Code and regulations thereunder. The Committee
shall adopt written rules and procedures relating to the
administration of and payment pursuant to qualified domestic
relations orders.
8.2 Employees' Rights; Limitations. Neither the adoption
of this Plan nor any modification thereof, nor the payment of any
benefits, shall be construed as giving any Participant or other
person any legal or equitable right against the Company, the
Committee or the Trustees, or in or to any property in the Trust
Fund, except as provided herein, nor as enlarging, modifying or
affecting the tenure or terms of employment of any Participant.
ARTICLE IX
AMENDMENT; MERGER, CONSOLIDATION OR
TRANSFER OF ASSETS; TERMINATION
9.1 Amendment. While the Company expects and intends to
continue the Plan, it must necessarily reserve and reserves the
right, subject to Section 9.5, to amend the Plan in whole or in
part from time to time either retroactively or prospectively, by
an instrument in writing, duly executed and acknowledged.
9.2 Merger, Consolidation or Transfer of Assets. This
Plan shall not be merged or consolidated with, nor shall any
assets or liabilities be transferred to, any other plan, unless
the benefits payable to each Participant if the Plan was
terminated immediately after such action would be equal to or
greater than the benefits to which such Participant would have
been entitled if this Plan had been terminated immediately before
such action.
9.3 Termination.
9.3.1 The Plan will terminate on the date the Plan
is terminated by the Company. Notwithstanding the
foregoing, the Plan will terminate on the last day of the
Plan Year coincident with or next following the first to
occur of the following:
(a) The date the Company is judicially
declared bankrupt or insolvent; or
(b) The dissolution, merger, consolidation
or reorganization of the Company, or the sale by the
Company of all or substantially all of its assets,
except that, subject to the provisions of Section
9.2, in any such event arrangements may be made
whereby the Plan will be continued by any successor
to the Company or any purchaser of all or
substantially all of the Company's assets, in which
case the successor or purchaser will be substituted
for the Company under the Plan.
9.3.2 On termination of the Plan in accordance with
9.3.1, or on partial termination of the Plan by operation
of law, any adjustments required under the Plan as of the
last day of the Plan Year coincident with or next
following such termination or partial termination shall be
made and each affected Participant's benefits will be
fully vested and nonforfeitable. The Committee shall then
direct the Trustees to make distribution of such benefits
in accordance with Article VII. All appropriate
accounting provisions of the Plan will continue to apply
until the benefits of all affected Participants have been
distributed to them.
9.4 Discontinuance of Contributions. The Company shall
have the right at any time to discontinue its contributions
hereunder. For purposes of this Section 9.4, a complete
discontinuance of contributions is contrasted with a suspension
of contributions under the Plan which is merely a temporary
cessation of contributions by the Company. Upon complete
discontinuance of the Company's contributions, all affected
Participants' rights to benefits shall become vested and
nonforfeitable. The Committee shall continue to direct the
Trustees to make distributions of benefits from time to time in
accordance with Article VII. All appropriate accounting
provisions of the Plan will continue to apply until the benefits
of all affected Participants have been distributed to them.
9.5 Limitations.
9.5.1 No amendment, modification or termination of
this Plan shall reduce the vested interest of any
Participant or cause any part of the Trust Fund to revert
to the Company (except as may be specifically provided
elsewhere in the Plan with respect to the return of
Company contributions) or to be used for or diverted to or
for the benefit of anyone other than Participants in the
Plan and their Beneficiaries, including for this purpose
former Participants and their Beneficiaries. For purposes
of this paragraph, a Plan amendment which has the effect
of (a) eliminating or reducing an early retirement benefit
or a retirement-type subsidy, or (b) eliminating an
optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be
treated as reducing vested interests. In the case of a
retirement-type subsidy, the preceding sentence shall
apply only with respect to a Participant who satisfies
(either before or after the amendment) the pre-amendment
conditions for the subsidy.
9.5.2 If any amendment changes the vesting schedule,
any Participant with three or more Years of Service may,
by filing a written request with the Committee within 60
days after receipt of notice of such amendment, elect to
have his vested interest computed under the vesting
schedule in effect prior to the amendment.
9.5.3 The rights, duties or responsibilities of the
Trustees shall not be changed without their written
consent.
9.6 Notice of Amendment, Termination or Partial
Termination. Affected Participants will be notified by the
Committee of an amendment, termination or partial termination of
the Plan within a reasonable time.
ARTICLE X
TRUST FUND
10.1 Trust Agreement. The Company will enter into a Trust
Agreement with the Trustees providing for the administration of
the Trust Fund in such form and containing such provisions as the
Company deems appropriate, including, but not by way of
limitation, provisions with respect to the powers and authority
of the Trustees, and the authority of the Company to amend or
terminate the Trust Agreement or to change Trustees and to settle
accounts of the Trustees on behalf of all persons having an
interest in the Trust Fund.
10.2 Trust Contributions. The Trustees will not be
responsible in any way for the collection of contributions
provided for under this Plan. The Trustees will accept and hold
under the Trust Agreement such contributions as they may receive
from time to time from the Company. All contributions under the
Plan will be paid over to the Trustees and will be held and
administered under the Trust Agreement together with the income
therefrom, for use in providing the benefits of the Plan. The
Company will have no liability for the payment of benefits under
the Plan.
10.3 Trust Fund Investments. The Trust Fund will consist
primarily of Common Stock. The Trustees are directed to invest
and hold up to 100% of the Trust Fund in shares of Common Stock.
The Trustees may purchase or sell Common Stock from or to the
Company (provided, the requirements of Section 408(e) of ERISA
are satisfied) or from or to any other source, and such Common
Stock may be outstanding, newly issued or treasury securities.
The Trustees shall not borrow money from the Company for the
purpose of purchasing Common Stock.
10.4 Participant Accounts. The Trustees are not required
to maintain a segregation of assets in the Trust Fund for each
Participant Account.
10.5 Voting Rights. The Trustees will, in their fiduciary
capacity, exercise all voting rights with respect to the Common
Stock in the Trust Fund.
ARTICLE XI
CLAIM AND REVIEW PROCEDURE
11.1 Definitions. For the purposes of the Claims
Procedure described in this Article, the following definitions
shall apply:
11.1.1 "Claim" refers to a request by a Claimant in
accordance with this Article for a benefit under this
Plan.
11.1.2 "Claimant" refers to any Participant of this
Plan and to any Beneficiary who is either in pay status on
the date of a Claim is submitted hereunder or who as of
such date claims to be entitled to receive a benefit under
this Plan.
11.2 Claim Filing Procedure. Each Claimant shall have the
right to submit a Claim with respect to a benefit sought
hereunder. Such Claim shall be in writing, signed by the
Claimant under oath, and addressed and delivered to the Committee
or its designated representative either personally or by
certified or registered mail, return receipt requested. The
Claim shall state with particularity:
11.2.1 The benefit claimed;
11.2.2 The provisions of the Plan and the particular
provisions of law, if any, upon which the Claimant relies
in support of his Claim; and
11.2.3 All facts believed to be relevant in
connection with such Claim.
11.3 Consideration of Claim; Rendering of Decision. Upon
receipt of a Claim hereunder, the Committee or its designated
representative shall consider the merits of the Claim and shall
within 90 days from the receipt of the Claim render a decision on
the merits and communicate the same to the Claimant. In the
event the Committee or its designated representative denies the
Claim in whole or in part, the Claimant shall be so notified in
writing, which shall set forth the following in a manner
reasonably calculated to be understood by the Claimant:
11.3.1 The reason or reasons for rejection of the
Claim;
11.3.2 The provisions of the Plan and the particular
provisions of law, if any, relied upon in reaching such
determination;
11.3.3 A description of any additional information
needed from the Claimant in order for him to perfect his
Claim; and
11.3.4 A statement outlining the Appellate Review
Procedure as set forth in Section 11.4.
The failure of the Committee or its designated representative to
render a decision on the merits of a Claim shall be deemed to be
a denial of such Claim; notice of such denial shall be deemed to
have been given to the Claimant on the 90th day from receipt by
the Committee or its designated representative of the Claim.
11.4 Appellate Review Procedure. Where a Claim has been
or is deemed denied, the Claimant shall have the right within 60
days after the date he receives or is deemed to have been given
notice that his Claim has been rejected, in whole or in part, to
a full and fair review pursuant to the Appellate Review Procedure
set forth herein. Such procedure shall enable the Claimant to
appeal from an adverse decision by delivering a written request
for an appeal to the Committee either personally or by certified
or registered mail, return receipt requested. Such request shall
set forth the reasons why the Claimant believes the decision
rejecting his Claim is erroneous and shall be signed by the
Claimant under oath. Within 30 days after such request is
received, the Committee will conduct a full and fair review of
the entire Claim at a hearing, de novo, at which the Committee
may invite the Claimant to present his views with respect to the
merits of the Claim. In addition, the Claimant may submit issues
and comments in writing to the Committee for consideration and
may review pertinent documents. A decision with respect to the
merits of the Claim shall be rendered by the Committee not later
than 60 days after the delivery of the written request for an
appeal hereunder, unless special circumstances (such as the need
to hold a hearing) require an extension of time for processing,
and then not later than 120 days after receipt of the request.
The Claimant shall be notified in writing of the Appellate Review
decision, which shall include specific reasons believed to
support such decision, including specific references to
provisions of this Plan and of law, shall be written in a manner
reasonably calculated to be understood by the Claimant and shall
be delivered to the Claimant.
11.5 Limitation on Claims Procedure.
11.5.1 Insofar as the same is consistent with
regulations promulgated under Section 503 of the ERISA,
relating to Claims Procedures, any Claim under this Claims
Procedure must be submitted within 18 months from the
earlier of (1) the date on which the Claimant learned of
facts sufficient to enable him to formulate such Claim, or
(2) the date on which the Claimant should reasonably have
been expected to learn the facts sufficient to enable him
to formulate such Claim. For this purpose, the first date
on which any document that is filed with any governmental
organization is either given to or made available (under
law) to a Participant or beneficiary (in pay status), and
which discloses facts sufficient to enable a reasonable
person to formulate a Claim hereunder, shall be
conclusively deemed to be the date on which the Claimant
should reasonably have been expected to learn the facts
sufficient to enable him to formulate such a Claim.
Claims submitted after such period shall be deemed to have
been waived by the Claimant and shall thereafter be wholly
unenforceable.
11.5.2 No statute of limitations set forth under
either Section 413 of the ERISA, or any other applicable
provision of law, shall be deemed to be extended in any
way by the period of limitations set forth herein with
respect to this Plan's Claims Procedure.
11.6 Other Remedies. No action shall be commenced under
Section 502(a)(1)(B) of the ERISA until the Claimant shall first
have exhausted the Claims Procedure available to him hereunder,
provided that such Claimant would not have been irreparably and
materially harmed by any delay occasioned by this Claims
Procedure.
11.7 Authorized Representatives. All references in this
Article to Claimant shall include representatives who are duly
authorized as such, in writing, which authorization shall have
been delivered to the Committee at some stage of the Claims
Procedure. After such written authorization is delivered to the
Committee, copies of all subsequent communications with the
Claimant and decisions with respect to his Claim shall be
delivered to the authorized representative, as well as to the
Claimant.
ARTICLE XII
ADMINISTRATION
12.1 Allocation of Responsibility Among Fiduciaries. The
Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them
under the Plan. In general, the Company shall have the sole
responsibility for making the contributions necessary to provide
benefits under the Plan, and shall have the sole authority to
appoint and remove the Trustees and members of the Committee, and
to amend or terminate the Plan, in whole or in part. The
Committee shall have the sole responsibility for the
administration of the Plan, which responsibility is specifically
described in the Plan. The Trustees shall have the sole
responsibility for the administration and management of the Trust
Fund. Each Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in
accordance with the provisions of the Plan authorizing or
providing for such direction, information or action.
Furthermore, each Fiduciary may rely upon any such direction,
information or action of another Fiduciary as being proper under
the Plan, and is not required to inquire into the propriety of
any such direction, information or action. It is intended under
the Plan that each Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and
obligations under the Plan and shall not be responsible for any
act or failure to act of another Fiduciary. No Fiduciary
guarantees the Trust Fund in any manner against investment loss
or depreciation in asset value.
12.2 Appointment of Committee. The Plan shall be
administered by a Committee consisting of such persons, who shall
serve for such terms, as the Chief Executive Officer of the
Company shall determine. Members of the Committee may also act
as Trustees.
12.3 Committee Meetings. The Committee shall hold
meetings upon such notices and at such place or places, and at
such time or times as it may determine. Notices shall not be
required if waived in writing. A majority of the members of the
Committee at the time in office shall constitute a quorum for the
transaction of business. All resolutions or other actions taken
by the Committee at any meeting shall be by a vote of the
majority of those present at any such meeting and entitled to
vote. Resolutions may be adopted or other action taken without a
meeting upon written consent signed by at least a majority of the
members of the Committee. The Committee shall keep minutes of
its actions. No member of the Committee shall have any right to
vote on any matter relating solely to himself or to his rights or
benefits under the Plan. In the event of a deadlock or other
situation which prevents agreement of a majority of the Committee
members, the matter shall be decided by a majority of the Board
of Directors of the Company.
12.4 Committee Officers. The Committee shall appoint one
member as chairman of the Committee, and the chairman may appoint
a secretary who need not be a member of the Committee. The
Committee shall designate the person or persons who shall be
authorized to sign for the Committee.
12.5 Committee Expenses. All reasonable expenses of the
Committee may be paid by the Company, but if not paid by the
Company shall be paid from the Trust Fund. However, no fee or
compensation shall be paid to any member of the Committee for his
services as such.
12.6 Committee Responsibilities. The Committee shall have
the responsibility for the general administration of the Plan.
It shall have the power and duty to do all things necessary or
convenient to effect the intent and purposes of the Plan and not
inconsistent with any of the provisions hereof, whether or not
such powers and duties are specifically set forth herein, and in
amplification of the foregoing and not in limitation thereof, the
Committee shall have the power to construe the Plan, to make such
investigations as they may deem necessary, to determine all
questions arising hereunder, including particularly directions to
the Trustees on all matters necessary for it to properly
discharge its powers and duties, but subject in all cases to the
right of the Trustees to obtain and act upon the advice of their
own legal counsel. In addition, the Committee shall have the
responsibility for the reporting and disclosure requirements
under ERISA permitted to be done by plan administrators (i.e.,
filing Form 5500s, Annual Reports, summary plan descriptions, and
participant reports). Decisions of the Committee made in good
faith upon any matters within the scope of its authority shall,
unless disapproved by the Board of Directors of the Company, be
final and binding on the Company, the Trustees, Participants,
their Beneficiaries and all others. The Committee at all times,
in making and carrying out its decisions and directions, shall
act in a uniform and nondiscriminatory manner and may, from time
to time, prescribe and modify uniform rules of interpretation and
administration.
12.7 Other Powers. In addition to the foregoing, the
Committee shall have the following powers:
12.7.1 To appoint or employ such accountants, legal
counsel, specialists or other agents, persons or firms as
they deem necessary or desirable in connection with the
administration of the Plan and to delegate to such persons
any powers and duties, both ministerial and discretionary,
as the Committee deems appropriate.
12.7.2 To prescribe procedures to be followed by
Participants and Beneficiaries filing applications for
benefits.
12.7.3 To receive from the Company and from
Participants such information as shall be necessary for
the proper administration of the Plan.
12.8 Indemnification of Committee. Each member of the
Committee shall be indemnified by the Company (i.e., not from the
Trust Fund) against costs, expenses, and liabilities reasonably
incurred by him in connection with any action to which he may be
a party by reason of his service as a member of the Committee
except in relation to matters as to which he shall be adjudged in
such action to be liable for negligence or willful misconduct in
the performance of his duties. The foregoing right to
indemnification shall be in addition to such other rights as each
member of the Committee may enjoy as a matter of law or by reason
of insurance coverage of any kind, but shall not extend to costs,
expenses, and/or liabilities otherwise covered by insurance or
that would be so covered by any insurance then in force if such
insurance contained a waiver of subrogation. Rights granted
hereunder shall be in addition to and not in lieu of any rights
to indemnification to which each member of the Committee may be
entitled pursuant to the by-laws of the Company. Service as a
member of the Committee shall be deemed in partial fulfillment of
the member's function as an Employee, officer and/or director of
the Company, if he serves in such capacity as well.
12.9 Expenses of Establishing and Administering the Plan.
All expenses paid or incurred in establishing and administering
the Plan may be paid by the Company, but if not paid by the
Company, shall be paid by the Trustees from the Trust Fund.
Provided, that if expenses are paid by the Company, the Company
may withhold as reimbursement such amounts from the contribution
due the Plan for the fiscal year of the Company for which the
expenses are paid or incurred.
ARTICLE XIII
TOP-HEAVY PROVISIONS
13.1 Special Rules Applicable for Top-Heavy Plan Years.
The special rules of this Article shall apply to any Top-Heavy
Plan Year and shall supersede any conflicting provisions
elsewhere in the Plan.
13.1.1 For any Top-Heavy Plan Year, a Participant's
interest in his Participant Account shall become vested
and nonforfeitable to the extent of the following
percentages based upon his Years of Service:
Years of Service Vested Percentage
Less than 3 0
3 or more 100
This vesting schedule shall not apply to the Participant
Account of any Participant who is not credited with an
Hour of Service during the Top-Heavy Plan Year. If the
Plan becomes a Top-Heavy Plan and subsequently ceases
being a Top-Heavy Plan, the vesting schedule set forth
above shall automatically cease to apply and the vesting
schedule set forth in Section 5.6 shall automatically
apply with respect to all amounts allocated to the
Participant Account for Plan Years after the last Top-
Heavy Plan Year. This change in vesting schedules shall
apply only to the extent that Section 11.5 of the Plan and
Section 411(a)(10) of the Code are satisfied.
13.1.2 For any Top-Heavy Plan Year, the amount
allocated to each Non-Key Employee who is employed by the
Company on the last day of the Plan Year, under this Plan
and any other defined contribution plan included in the
Required Aggregation Group, shall not be less than the
lesser of 3% of his Compensation for that Plan Year, or
the largest percentage, as a percentage of the first
$200,000 of the Key Employee's Compensation for that Plan
Year, allocated to any Key Employee for that Plan Year.
The foregoing minimum benefit shall be determined without
regard to (a) contributions under the Federal Insurance
Contributions Act or similar state or federal laws, (b)
the number of Hours of Service credited to the Participant
during the Plan Year, (c) whether the Participant's
Compensation is less than a stated amount and (d) whether
the Participant made an otherwise mandatory contribution
to the Plan. If the Participant is also covered by a
defined benefit Top Heavy Plan sponsored by the Company,
the minimum benefit required by this subsection shall be
satisfied by providing the required minimum benefit under
the defined benefit plan offset by the benefits provided
under this Plan and any other defined contribution plan
maintained by the Company.
13.1.3 Only the first $200,000 (as adjusted to take
into account any cost-of-living increase adjustments
provided under Section 416(d)(2) of the Code) of a
Participant's Compensation for that Plan Year shall be
taken into account for purposes of the Plan.
13.1.4 The limitation on contributions shall be
applied by substituting "1.0" for "1.25" in computing the
defined benefit plan fraction and the defined contribution
plan fraction for purposes of 5.5.3. This rule shall not
apply, however, if the Plan is not a Super Top-Heavy Plan
and each Participant who is not a Key Employee either (a)
receives an allocation of at least 4% of his compensation
for that year under the Plan or (b) accrues the minimum
defined benefit accrual (defined in Section 416(c)(1) of
the Code as modified by Section 416(h)(2)(A)(ii)(I) Code)
for that year under any defined benefit plan maintained by
the Company or an Affiliated Company.
13.2 Definitions Relating to Top-Heavy Provisions. The
following terms, when used in this Article, shall have the
meaning set forth below, unless a different meaning is plainly
required by the context:
"Determination Date" means the last day of the preceding
Plan Year or the last day of the first Plan Year.
"Key Employee" means each Employee or former Employee (and
his Beneficiary) who at any time during the five Plan Years
ending on the Determination Date:
(a) Was an officer of the Employer or an Affiliated
Company (but only if he had Compensation greater than 50%
of the dollar amount an effect under Section 415(b)(1)(A)
of the Code for the Plan Year),
(b) Was one of the ten Employees owning the largest
interest of the Company and its Affiliated Companies (but
only if he had Compensation greater than the dollar amount
in effect under Section 415(c)(1)(A) of the Code for the
Plan Year),
(c) Owned at least 5% of the Company's outstanding
shares of stock or at least 5% of the total combined
voting power of the Company's shares of stock, or
(d) Owned at least 1% of the Company's outstanding
shares of stock or at least 1% of the total combined
voting power of the Company's shares of stock and had
Compensation of more than $150,000 from the Company and/or
any Affiliated Company.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the regulations
thereunder.
"Non-Key Employee" means any Employee or former Employee
who is not a Key Employee.
"Permissive Aggregation Group" means all qualified
employee pension benefit plans (within the meaning of ERISA) in
the Required Aggregation Group and any qualified employee pension
benefit plans sponsored by the Company or an Affiliated Company
which are not part of the Required Aggregation Group, but which
satisfy the requirements of Sections 401(a)(4) and 410 of the
Code when considered together with the Required Aggregation
Group, and which the Company elects to include in the Permissive
Aggregation Group.
"Required Aggregation Group" means the Plan and any other
qualified employee pension benefit plan sponsored by the Company
or an Affiliated Company in which a Key Employee participates, or
which enables the Plan to meet the requirements of Sections
401(a)(4) or 410 of the Code.
"Super Top-Heavy Plan" means this Plan if it would
constitute a Top-Heavy Plan if "90%" is substituted for "60%"
wherever it appears in the definition of Top-Heavy Plan and
Top-Heavy Group.
"Top-Heavy Group" means all plans of the Company and any
Affiliated Company in the Required Aggregation Group and any
other qualified employee pension benefit plan of the Company and
any Affiliated Company which the Company elects to aggregate as
part of a Permissive Aggregation Group if, on any Determination
Date, the Valuation Amount of all Key Employees' accrued benefits
under those plans exceeds 60% of the Valuation Amount of all
Participants' accrued benefits.
"Top-Heavy Plan" means this Plan if, on any Determination
Date, the Valuation Amount of Key Employees' accrued benefits
exceeds 60% of all Participants' accrued benefits.
"Top-Heavy Plan Year" means any Plan Year during which the
Plan is a Top-Heavy Plan or part of a Top-Heavy Group.
"Valuation Amount" means, in the case of a defined benefit
plan, the present value of the cumulative accrued benefits and,
in the case of a defined contribution plan, the Participant's
account balance adjusted for contributions due as of the
Determination Date. Valuation Amount shall be determined as of
the most recent valuation date which is within the 12-month
period ending on the Determination Date. For purposes of
determining the present value of cumulative accrued benefits and
account balances, distributions made during the five Plan Years
ending on the Determination Date shall be taken into account.
The determination of Valuation Amount will be made in accordance
with Section 416(g) of the Code and the regulations thereunder.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. Notwithstanding any other provisions
of the Plan, the Committee shall administer the Plan in
conformity with the applicable laws of the State of Utah and of
the United States (including ERISA) and all rules and regulations
from time to time promulgated under the authority of such laws.
14.2 Information Returns. The Company shall furnish the
Committee all data and information which is necessary to enable
the Committee to file returns and reports required by the
Internal Revenue Service and the Department of Labor.
14.3 Company Action. Any action required or permitted to
be taken by the Company may be taken on behalf of the Company by
any officer of the Company.
14.4 Company Records. Records of the Company as to an
Employee's or Participant's period of employment, termination of
employment and the reason therefor, leaves of absence,
re-employment and compensation will be conclusive on all persons,
unless determined by the Committee to be incorrect.
14.5 No Guarantee of Interests. Neither the Trustees, the
Committee nor the Company in any way guarantees the Trust Fund
from loss or depreciation, nor do they guarantee any payment to
any person. The liability of the Trustees, the Committee and the
Company to make any payments hereunder is limited to the
available assets of the Trust Fund.
14.6 Interpretations and Adjustments. To the extent
permitted by law, an interpretation of the Plan and a decision on
any matter within the Committee's discretion made in good faith
is binding on all persons. A misstatement or other mistake of
fact shall be corrected when it becomes known, and the Committee
shall make such adjustment on account thereof as it considers
equitable and practicable.
14.7 Uniform Rules. In the administration of the Plan,
uniform rules will be applied to all Participants similarly
situated.
14.8 Evidence. Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information
which the person acting on it considers pertinent and reliable
and signed, made or presented by the proper party or parties.
14.9 Waiver of Notice. Any notice required under the Plan
may be waived by the person entitled to notice.
14.10 Gender and Number. Except where otherwise
clearly indicated by the context, the masculine and the neuter
shall include the feminine and the neuter, the singular shall
include the plural, and vice-versa.
IN WITNESS WHEREOF, the Company has caused the Plan to be
executed by its duly authorized officers this ____ day of
_____________________, 1992.
SMITH'S FOOD & DRUG CENTERS, INC.
By
Its
ATTEST:
FIRST AMENDMENT
TO
SMITH'S FOOD & DRUG CENTERS, INC. EMPLOYEE PROFIT SHARING PLAN
WHEREAS, the Smith's Food & Drug Centers, Inc. Employee
Profit Sharing Plan (the "Plan") was established effective
January 3, 1993;
WHEREAS, in order to receive a favorable determination
letter, the Internal Revenue Service has required that the Plan
be amended;
WHEREAS, the Company desires to amend the Plan;
NOW, THEREFORE, Section 7.10 of the Plan is hereby amended
and restated, effective January 3, 1993, to read in its entirety
as follows:
7.10 Rollover Transfers and Withholding.
Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under
this Section 7.10, a distributee may elect, at the time and
in the manner prescribed by the Committee, to have any
portion of an eligible rollover distribution paid directly
to an eligible retirement plan specified by the distributee
in a direct rollover.
7.10.1 An eligible rollover distribution is
any distribution of all of any portion of the balance
to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of 10
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with
respect to employer securities).
7.10.2 An eligible retirement plan is an
individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity
plan described in Section 403(a) of the Code or a
qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.
7.10.3 A distributee includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse, and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse
or former spouse.
7.10.4 A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
7.10.5 Within a reasonable time (i.e., no
earlier than 90 days) prior to making an eligible
rollover distribution, the Committee shall provide the
distributee with the written explanation described in
Section 402(f) of the Code. To the extent required by
the Code and regulations thereunder, the Committee
shall direct the Trustee to withhold income tax on
distributions from the Plan.
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed by its duly authorized officers this 2nd day of
August, 1993.
SMITH'S FOOD & DRUG CENTERS, INC.
By:
_______________________________
Its
___________________________
ATTEST:
________________________
SECOND AMENDMENT
TO
SMITH'S FOOD & DRUG CENTERS, INC. EMPLOYEE PROFIT SHARING PLAN
WHEREAS, the Smith's Food & Drug Centers, Inc. Employee
Profit Sharing Plan (the "Plan") was established effective
January 3, 1993;
WHEREAS, the Company desires to amend the Plan to clarify
the hours to be credited as Hours of Service;
NOW, THEREFORE, subsections 2.2.2 and 2.2.6 of the Plan
are hereby amended and restated, effective January 3, 1993, to
read in their entirety as follows:
2.2.2 Each hour for which an Employee is
paid, or entitled to payment, by the Company or an
Affiliated Company on account of a period of time
during which no duties are performed (irrespective
of whether the employment relationship has
terminated) due to vacation, holiday, illness,
incapacity (including disability), lay off, jury
duty, military duty or leave of absence. No more
than 501 Hours of Service shall be credited under
this subsection 2.2.2 for any single continuous
period (whether or not such period occurs in a
single computation period). In addition, no Hours
of Service shall be credited for payments made or
due under a plan maintained solely for the purpose
of complying with applicable workmen's
compensation, unemployment compensation or
disability insurance laws. Hours under this
subsection 2.2.2 shall be calculated and credited
pursuant to Section 2530.200b-2 of the Department
of Labor Regulations which are incorporated herein
by this reference.
. . .
2.2.6 Notwithstanding anything else to the
contrary, for purposes only of allocating
contributions and forfeitures under Section 5.2,
the following shall apply:
(a) The hours to be credited as Hours of Service
pursuant to this Section 2.2 shall only be hours for which
an Employee is paid, or entitled to payment, by the
Company and such hours shall be credited to the Plan Year
in which the payment is made. No hours will be credited
with respect to payments on account of disability, whether
or not made or due under a plan maintained solely for the
purpose of complying with applicable disability insurance
laws. Hours of Service for salaried Employees shall be
determined on the basis of 45 hours per week. A salaried
Employee who is employed for less than a full week shall
be credited with the pro rata portion of such week during
which he is employed by the Company.
(b) The Hours of Service credited to a Participant
during a Plan Year shall not exceed 2,080.
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed by its duly authorized officers this _____ day of
_____________.
SMITH'S FOOD & DRUG CENTERS, INC.
By
Its
ATTEST:
___________________________