EXHIBIT 10.1
AMETEK 401(K) PLAN FOR ACQUIRED BUSINESSES
AMETEK, Inc. adopted the AMETEK 401(k) Plan for Acquired Businesses
(the "Plan") effective as of May 1, 1999, for the benefit of its eligible
employees. The Plan was subsequently amended and restated, in its entirety,
effective January 1, 2001. The document set forth as stated herein is an
amendment and restatement of the Plan, generally effective as of January 1,
2002, except as otherwise required by law or provided herein. The Plan has been
amended and restated in order to add Catch-up Contributions, to incorporate all
prior amendments and to bring the Plan into compliance with the requirements of
applicable law as in effect on the Effective Date of this amendment and
restatement.
The provisions of the Plan as set forth in this amendment and
restatement supersede prior Plan provisions for all persons in the employment of
the Employer or any Affiliate at any time on or after the Effective Date of this
amendment and restatement and of all persons claiming through, under or against
such persons. The provisions of the Plan as in effect immediately prior to the
Effective Date of this amendment and restatement shall govern Participants who
ceased to be employed, by retirement or otherwise, prior to the Effective Date
of this amendment and restatement and of all persons claiming through, under or
against such Participants. The preceding sentence shall not apply to the extent
that applying the provisions of the Plan as in effect immediately prior to the
Effective Date of this amendment and restatement to such Participants would
violate the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any other applicable law, would result in disqualification of this
Plan, or would require inconsistent administrative practices, in which case the
provisions of this Plan shall apply.
The provisions of the Plan are subject to a determination by the
Internal Revenue Service that the Plan is "qualified" under Section 401(a) of
the Internal Revenue Code of 1986, as amended. It is further intended that the
Plan also conform to the requirements of Title I of ERISA
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND CONSTRUCTION.................................... 1
ARTICLE II PARTICIPATION.................................................. 8
ARTICLE III SERVICE ...................................................... 10
ARTICLE IV CONTRIBUTIONS.................................................. 12
ARTICLE V INDIVIDUAL ACCOUNTS............................................. 22
ARTICLE VI PAYMENT OF BENEFITS............................................ 25
ARTICLE VII LOANS TO PARTICIPANTS AND WITHDRAWALS......................... 30
ARTICLE VIII COMMITTEE AND PLAN ADMINISTRATOR............................. 34
ARTICLE IX INVESTMENT OF PLAN ASSETS...................................... 39
ARTICLE X AMENDMENT, TERMINATION OR TRANSFER OF ASSETS.................... 41
ARTICLE XI TOP HEAVY PLANS................................................ 43
ARTICLE XII MISCELLANEOUS................................................. 46
-i-
ARTICLE I
DEFINITIONS AND CONSTRUCTION
The following words and phrases shall have the meanings set forth below
unless the context clearly indicates otherwise:
1.1 "Accounts" shall mean the Catch-up Contribution Account, the
Deferral Account, the Employer Matching Contribution Account and the Rollover
Contribution Account, or as many Accounts as are applicable, maintained on
behalf of a Participant in accordance with this Plan.
1.2 "Adjustment Factor" shall mean the cost-of-living adjustment
factor prescribed by the Secretary of the Treasury under Section 415(d) of the
Code and as applied to such items and in such manner as the Secretary shall
provide.
1.3 "Affiliate" shall mean any corporation that is, along with the
Company, a member of a controlled group of corporations (as defined in Section
414(b) of the Code) or any other trade or business (whether or not incorporated)
that, along with the Company, is under common control (as defined in Section
414(c) of the Code) or any other trade or business that is a member of an
"affiliated service group" (as such term is defined in Section 414(m) of the
Code or in regulations under Section 414(o) of the Code) of which the Company is
also a member.
1.4 "Alternate Payee" shall mean an "alternate payee" as defined
in Section 414(p) of the Code.
1.5 "Average Contribution Percentage" shall mean the average of
the Contribution Percentages of a group of Participants.
1.6 "Average Deferral Percentage" shall mean the average of the
Deferral Percentages of a group of Participants.
1.7 "Beneficiary" shall mean the person or persons designated by a
Participant or Former Participant in accordance with Section 6.3, as the person
or persons entitled to receive upon the death of such Participant or Former
Participant, any benefit under the provisions of this Plan.
1.8 "Board of Directors" shall mean the Board of Directors of the
Company.
1.9 "Catch-up Contribution" shall mean the amount by which a
Participant has reduced his Compensation pursuant to a Deferral Election
described in Section 4.1(c).
1.10 "Catch-up Contribution Account" shall mean a separate Account
maintained for each Participant who has elected to make a Deferral Election
under Section 4.1(c), consisting of the amount contributed pursuant to such
Deferral Election plus any earnings of the Trust and realized and unrealized
gains and losses allocable to such Account, but less any amounts previously
distributed to the Participant, Former Participant or Beneficiary for whom the
Account is maintained.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
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1.12 "Committee" shall mean the Administrative Committee appointed
and serving pursuant to Article VIII.
1.13 "Common Stock Fund" shall have the meaning set forth in
Section 9.5.
1.14 "Company" shall mean AMETEK, Inc., a Delaware corporation.
1.15 "Compensation" shall mean "compensation" as such term is
defined in Treas. Reg. Section 1.415-2(d)(11)(i), excluding reimbursements or
other expense allowances, fringe benefits, moving expenses, deferred
compensation, welfare benefits, sign-on bonuses, imputed income with respect to
split dollar life insurance, severance benefits (paid in any form), and amounts
described in Treas. Reg. Section 1.415-2(d)(3) but including amounts contributed
to the Plan on behalf of a Participant pursuant to the Participant's Deferral
Election under Section 4.1 hereof, amounts otherwise excludible from an
Employee's gross income under Section 125 of the Code and, effective for Plan
Years beginning on or after January 1, 2001, Section 132(f)(4) of the Code.
Notwithstanding the foregoing, effective January 1, 1998, any amounts deducted
from an Employee's earnings on a pre-tax basis for group health care coverage
because the Employee is unable to certify that he or she has other health care
coverage, shall be treated as an amount contributed by the Employer pursuant to
a salary reduction agreement under Section 125 of the Code purposes of
determining the Employee's Compensation, so long as the Employer does not
otherwise request or collect information regarding the Employee's other health
coverage as part of the enrollment process for the Employer's health care plan.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the dollar limit applicable under Section 401(a)(17) of the Code (effective
January 1, 2002, $200,000), adjusted in accordance with Section 401(a)(17)(B) of
the Code. The cost-of-living adjustment in effect for a calendar year applies to
any period, not exceeding twelve (12) months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than twelve (12) months, the annual
compensation limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator of which
is twelve (12).
Any reference in this Plan to the limitation under Section 401(a)(17)
of the Code shall mean the annual compensation limit set forth in this
provision.
1.16 "Contribution Percentage" shall mean the ratio of the Employer
Matching Contributions made on behalf of a Participant for a Plan Year to the
Participant's Compensation for such Plan Year.
1.17 "Deferral" shall mean the amount by which a Participant has
reduced his Compensation pursuant to a Deferral Election described in Section
4.1(b).
1.18 "Deferral Account" shall mean a separate Account maintained
for each Participant who has elected to make a Deferral Election under Section
4.1(b), consisting of the amount contributed pursuant to such Deferral Election
plus any earnings of the Trust and realized and unrealized gains and losses
allocable to such Account, but less any amounts previously distributed to the
Participant, Former Participant or Beneficiary for whom the Account is
maintained.
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1.19 "Deferral Election" shall mean an election that a Participant
has made to contribute to the Plan pursuant to Section 4.1(b) and/or Section
4.1(c).
1.20 "Deferral Percentage" shall mean the ratio of a Participant's
Deferrals for the Plan Year to the Participant's Compensation for such Plan
Year.
1.21 "Disability" shall mean a disability that entitles the
Participant to disability benefits from Social Security; provided, however, that
the Participant's disability occurs while he is employed by the Company or an
Affiliate.
1.22 "Effective Date" shall mean January 1, 2002. The original
Effective Date of the Plan was May 1, 1999.
1.23 "Employee" shall mean any person classified as a regular
Employee who is employed by the Employer at a division of the Company designated
for inclusion by the Board of Directors as set forth in Schedule I, and who is
on the payroll of the Employer and whose wages from the Employer are subject to
withholding for United States Federal income tax purposes; provided, however,
that Employee shall not include any person who is hired as a Temporary Employee
or Intern.
Notwithstanding the foregoing, the term "Employee" shall not include
any person who is classified as an independent contractor or otherwise as a
person who is not treated as an employee for purposes of withholding federal
employment taxes, regardless of any contrary governmental or judicial
determination relating to such employment status or tax withholding obligation.
If a person described in the preceding sentence is subsequently reclassified as,
or determined to be, an employee by the Internal Revenue Service, any other
governmental agency or authority, or a court, or if an Employer or Affiliated
Company is required to reclassify such an individual as an employee as a result
of such reclassification or determination (including any reclassification by an
Employer or Affiliated Company in settlement of any claim or action relating to
such individual's employment status), such person, for purposes of this Plan,
shall be deemed an Employee from the later of the actual or the effective date
of such reclassification; provided, however that any person who is an Employee
solely by reason of this paragraph shall not be eligible to participate in the
Plan unless he otherwise meets the requirements of the first paragraph of this
definition.
1.24 "Employer" shall mean the Company and any Affiliate of the
Company that adopts this Plan pursuant to Section 10.4 hereof.
1.25 "Employer Matching Contribution Account" shall mean a separate
Account maintained for each Participant, consisting of the Participant's share
of Employer Matching Contributions, plus any earnings of the Trust and any
realized or unrealized gains and losses allocable to such Account, but less any
amounts previously distributed to the Participant, Former Participant or
Beneficiary for whom the Account is maintained.
1.26 "Employer Matching Contribution" shall mean a profit-sharing
contribution made to a Participant's Employer Matching Contribution Account
pursuant to Section 4.2(b).
1.27 "Employment Commencement Date" shall mean the date (whether
before or after the Effective Date) on which the Employee first performs an Hour
of Service as an Employee, except as otherwise provided in Section 3.5 with
respect to a One Year Period of Severance.
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1.28 "Entry Date" shall mean the first day of January, April, July
and October of any Plan Year.
1.29 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.30 "Former Participant" shall mean a person who has ceased to be
a Participant but who is entitled to immediate or deferred benefits under this
Plan.
1.31 "Highly Compensated Employee" shall mean an Employee of the
Company or an Affiliate who performs an Hour of Service and who:
(a) was at any time a Five Percent Owner (within the
meaning of Section 11.1(c)) during the Plan Year or the Look-Back Year; or
(b) for the Look-Back Year received Total Compensation in
excess of $90,000 multiplied by the Adjustment Factor.
A former Employee shall be treated as a Highly Compensated Employee, if such
Employee was a Highly Compensated Employee while an active Employee in either
the Plan Year in which such Employee separated from service or in any Plan Year
ending on or after his 55th birthday.
For purposes of this Section 1.31, the following definitions shall apply:
"Total Compensation" shall mean the Employee's "compensation" as
defined in Subsection 5.5(d); and
"Look-Back Year" shall mean the twelve (12) month period immediately
preceding the Plan Year.
1.32 "Hour of Service" shall have the meaning defined in Section
3.2.
1.33 "Intern" shall mean a student who is employed by the Company
or Affiliate while attending school or during his or her breaks from school or
any other individual who is classified as an "intern" in accordance with the
Company's or Affiliate's regular employment practices and policies.
1.34 "Investment Funds" shall mean the funds comprising the Trust
Fund.
1.35 "Leased Employee" shall mean any person who is not an employee
of the recipient and who provides services to the recipient if (a) such services
are provided pursuant to an agreement between the recipient and any other person
(the "leasing organization"), (b) such person has performed such services for
the recipient (or for the recipient and related persons) on a substantially
full-time basis for a period of at least one year, and (c) such services are
performed under the primary direction or control by the recipient; provided,
however, that if such individuals constitute 20% or less of such non-highly
compensated work force of the Company or any Affiliate then the term "Leased
Employee" means only those individuals who are not covered by a plan that meets
the following requirements:
(a) such plan is a money purchase pension plan with a
nonintegrated employer contribution rate for each participant of at least 10% of
compensation;
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(b) such plan provides for full and immediate vesting;
and
(c) each employee of the leasing organization (other than
employees who perform substantially all of their services for the leasing
organization) immediately participates in such plan.
1.36 "Limitation Year" shall mean the Plan Year.
1.37 "Mandatory Distribution Date" shall have the meaning set forth
in Section 6.5(a).
1.38 "Normal Retirement Age" shall mean a Participant's or Former
Participant's 65th birthday.
1.39 "One Year Period of Severance" shall have the meaning set
forth in Section 3.5.
1.40 "Participant" shall mean an Employee who has met the
requirements for participation in, and has signified his acceptance of, this
Plan, pursuant to the provisions of Article II.
1.41 "Period of Service" shall mean a period of service performed
for an Employer by an Employee commencing on the Employee's Employment
Commencement Date and ending on his Severance From Service Date.
1.42 "Period of Severance" shall mean the period commencing on an
Employee's Severance From Service Date and ending on the date he again performs
an Hour of Service for the Employer as an Employee.
1.43 "Plan" shall mean the AMETEK 401 (k) Plan for Acquired
Businesses, as it is embodied herein and as it may be amended from time to time.
1.44 "Plan Administrator" shall mean the person, group of persons,
firm or corporation serving as plan administrator pursuant to Section 8.11.
1.45 "Plan Year" shall mean the twelve (12) consecutive month
period commencing January 1st and ending the following December 31st.
1.46 "Qualified Domestic Relations Order" shall mean a judgment,
decree or order (including approval of a property settlement agreement) made
pursuant to a state domestic relations law (including a community property law)
that:
(a) relates to the provision of child support, alimony
payments or marital property rights to a spouse, former spouse, child or other
dependent of a Participant (the "Alternate Payee");
(b) creates or recognizes the existence of the Alternate
Payee's right to, or assigns to the Alternate Payee the right to receive all or
a portion of the benefits payable to a Participant under this Plan;
(c) specifies (i) the name and last known mailing address
(if any) of the Participant and each Alternate Payee covered by the order, (ii)
the amount or percentage of the Participant's Plan benefits to be paid to the
Alternate Payee, or the manner in which such
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amount or percentage is to be determined, and (iii) the number of payments or
the period to which the order applies and each plan to which the order relates;
and
(d) does not require the Plan to (i) provide any type or
form of benefit, or any option not otherwise provided under the Plan, (ii)
provide increased benefits, or (iii) pay benefits to the Alternate Payee under a
prior Qualified Domestic Relations Order. A Qualified Domestic Relations Order
may provide that distribution commence on or after the date on which the
Participant attains, or would have attained the earlier of (i) the date on which
the Participant is entitled to a distribution under the Plan or (ii) the date on
which the Participant attains age fifty (50), regardless of whether the
Participant has incurred a Severance From Service Date. Notwithstanding the
foregoing, a Qualified Domestic Relations Order may provide that distribution
commence as soon as administratively practicable following its determination as
a Qualified Domestic Relations Order regardless of whether the Participant has
incurred a Severance From Service Date, if the Order directs (i) that the
payment of the benefits be determined as if the Participant had retired on the
date on which payment is to begin under such Order, taking into account only the
balance standing to the Participant's credit in his Accounts on such date, and
(ii) that the payment be made in a form in which such benefits may be paid under
the Plan to the Participant other than in the form of a joint and survivor
annuity with respect to the Alternate Payee and his subsequent spouse.
1.47 "Qualified Military Service" shall mean any service in the
uniformed services (as defined in chapter 43 of title 38, United States Code)
where the Participant's right to reemployment is protected by law and shall
apply to reemployments on or after December 12, 1994. Notwithstanding any
provision of the Plan to the contrary, contributions, benefits and service
credit with respect to Qualified Military Service will be provided in accordance
Section 414(u) of the Code.
1.48 "Rollover Contribution" shall mean a contribution that meets
the requirements of Section 4.5(b) as modified by Section 4.5(c).
1.49 "Rollover Contribution Account" shall mean a separate Account
maintained for each Participant who has elected to make a Rollover Contribution
pursuant to Section 4.5, consisting of the Rollover Contribution plus any
earnings of the Trust and realized or unrealized gains or losses allocable to
such Account, but less any amounts previously distributed to the Participant,
Former Participant or Beneficiary for whom the Account is maintained.
1.50 "Severance From Service Date" shall have the meaning set forth
in Section 3.3.
1.51 "Temporary Employee" shall mean an individual who is hired by
the Company or Affiliate (rather than an agency) for a specific position for a
designated length of time that is normally not more than 24 consecutive months
in duration and who is committed to leave the employment of the Company or
Affiliate at the conclusion of such period.
1.52 "Trust" shall mean the AMETEK 401(k) Plan for Acquired
Businesses Trust, as amended from time to time.
1.53 "Trust Fund" shall mean the assets held by the Trustee for the
benefit of the Participants, Former Participants and their Beneficiaries, but
not including any Plan assets theretofore set aside for distribution of benefits
to or with regard to Participants, Former Participants or Beneficiaries.
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1.54 "Trustee" shall mean the trustee or trustees appointed by the
Company to hold the assets of the Plan, as provided in Section 9.1 and the
Trust, and any successor trustee or trustees as the Company from time to time
may designate.
1.55 "Valuation Date" shall mean the last business day of each
month, and any other date as determined by the Committee, that is closer to the
event requiring valuation of a Participant's Accounts under the Plan.
1.56 "Year of Service" shall have the meaning set forth in Section
3.1.
Except when otherwise indicated by the context, any masculine
terminology used herein also includes the feminine and neuter, and vice versa,
and the definition of any term herein in the singular shall also include the
plural, and vice versa. The words "hereof," "herein," "hereunder," and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular provision or section. All references to Articles and
Sections shall mean and refer to Articles and Sections contained in this Plan,
unless otherwise indicated.
In determining time periods within which an event or action is to take
place for purposes of the Plan, no fraction of a day shall be considered and any
act, the performance of which would fall on a Saturday, Sunday, holiday or other
non-business day, may be performed on the next following business day.
It is the intention of the Employer that the Plan be qualified under
the provisions of Sections 401(a), 401(k), 401(m), 414(v) and 501(a) of the Code
and under ERISA, and all provisions of this Plan shall be construed and
interpreted in light of that intention.
The titles and headings of Articles and Sections are intended for
convenience of reference only and are not to be considered in construction of
the provisions hereof.
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ARTICLE II
PARTICIPATION
2.1 Eligibility.
(a) Each Employee, who is employed at a business location
whose employees have been designated by the Board of Directors as eligible to
participate in this Plan (subject to Section 10.4 of the Plan), and who is not
an ineligible employee as described in Section 2.2, shall become a Participant
in the Plan as of the effective date of participation for such business
location, provided that he is at least age eighteen (18) on that date, and
provided further, that he was employed by the business immediately prior to the
acquisition date. Participating business locations are set forth in Schedule I
hereto.
(b) Each Employee, who becomes an employee at a business
location whose employees have been designated by the Board of Directors as
eligible to participate in this Plan (subject to Section 10.4 of the Plan) and
who is not an ineligible employee as described in Section 2.2, shall become a
Participant in the Plan as of the Entry Date that follows his date of hire by at
least thirty-one (31) days, provided that he is at least age eighteen (18) on
that date.
(c) Any Employee who is an ineligible employee as
described in Section 2.2, but who becomes an eligible employee and meets the
requirements of either of the previous paragraphs, shall become a Participant on
the next Entry Date following his change in eligibility status that is at least
thirty-one (31) days from his most recent date of hire.
(d) An Employee shall remain a Participant as long as he
continues to meet the requirements of this Section 2.1.
2.2 Ineligible Employees. Notwithstanding Section 2.1, an Employee
shall not be eligible to be a Participant in this Plan if (i) he is a Leased
Employee, unless the participation of such Leased Employee in the Plan is
required so that the Plan meets the applicable requirements of Section 414(n)(3)
of the Code or (ii) he is an employee whose terms and conditions of employment
are determined pursuant to the terms of a collective bargaining agreement;
unless the collective bargaining agreement provides for the inclusion of such
Employee in the Plan, in which case the Employee will be eligible to participate
in the Plan, pursuant to Section 2.1, on the later of the date specified in the
collective bargaining agreement or the next January 1st that is on or after the
date he completes the eligibility requirements set forth in Section 2.1.
2.3 Participant Information. The Employer shall from time to time
furnish the Committee, the Trustee and the Plan Administrator with relevant
information with respect to Employees who are or become eligible for
participation in the Plan, Participants, Former Participants and Beneficiaries,
including without limitation, information as to their names, compensation, dates
of birth, Employment Commencement Dates, Hours of Service, Periods of Service,
retirements and deaths or other causes for a termination of employment. The
Committee, the Trustee and the Plan Administrator may rely upon such information
and shall be under no obligation to make inquiry with regard to the accuracy
thereof.
2.4 Employee Acceptance. Each Employee who meets the requirements
for participation in this Plan shall be so notified in writing by the Plan
Administrator. An Employee
8
shall become a Participant if he signifies his acceptance of the Plan and the
benefits hereof by filing with the Committee his written application for
participation in the Plan on a form supplied by the Committee and by agreeing to
make a Deferral Election pursuant to Section 4.1. If an Employee does not file
his application when he is first eligible to make a Deferral Election, such
Employee shall become a Participant as of the Entry Date following or coinciding
with the receipt by the Committee of such application, provided he continues to
meet the eligibility requirements on such Entry Date.
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ARTICLE III
SERVICE
3.1 Year of Service. A Participant shall be credited with a Year
of Service for each twelve (12) consecutive month Period of Service beginning
with his Employment Commencement Date, and anniversaries thereof. For purposes
of this Plan, any service performed by an Employee for the Company or any
Affiliate shall be considered to be service performed by an Employee for an
Employer.
3.2 Hours of Service. An Hour of Service shall mean an hour for
which an Employee is directly or indirectly paid, or entitled to payment, by the
Employer, for the performance of duties. Hours of Service shall include each
hour for which back pay, irrespective of mitigation of damages, has been either
awarded or agreed to by the Employer, and such 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. Hours of Service shall also include each hour for which the
Employee is directly or indirectly paid, or entitled to payment, by the Employer
for reasons (such as vacation, sickness or temporary disability) other than for
the performance of duties during the applicable computation period. Effective
for reemployments on or after December 12, 1994, an Employee who is absent by
reason of Qualified Military Service and who returns to employment within the
time that his reemployment rights are protected by federal law shall be granted
credit for each hour during any period of Qualified Military Service that would
have constituted part of the Employee's customary work week if he had remained
actively employed in the position he held immediately prior to the beginning of
the period of Qualified Military Service.
3.3 Severance From Service Date. An Employee's Severance From
Service Date shall mean the earlier of:
(a) the date the Employee quits, retires, is discharged
or dies; or
(b) the later of:
(i) the first anniversary of the first date of a
period during which the Employee remains continuously absent
from service with the Employer, either with or without pay,
for any reason other than those set forth in Section 3.3(a)
(including, but not limited to, periods of sick leave or
temporary layoff); or
(ii) the second anniversary of the first date of
a period of continuous absence from service with the Employer,
for reason of (A) the pregnancy of the Employee, (B) the birth
of the Employee's child, (C) the placement of a child with the
Employee in connection with the adoption of such child by the
Employee or (D) caring for such child for a period beginning
immediately following such birth or placement.
(c) Notwithstanding anything contained in Section 3.3(b)
to the contrary, if an Employee is continuously absent from service with the
Employer for more than one year for a reason described in Section 3.3(b)(ii),
the period between the first and second anniversaries of the Employee's first
date of absence shall not be treated as a Year of Service for any purpose under
this Plan.
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3.4 Absence of Less Than Twelve Months. If a Participant's service
as an Employee is severed pursuant to Section 3.3(a) but he resumes service as
an Employee of the Employer within twelve (12) months of his Severance From
Service Date the intervening Period of Severance shall be deemed to be a Period
of Service.
3.5 Severance From Service.
(a) One Year Period of Severance. A One Year Period of
Severance shall occur when an Employee or former Employee does not perform an
Hour of Service as an Employee within the twelve (12) month period beginning on
his Severance From Service Date.
(b) Participation After a One Year Period of Severance. A
Participant who incurs a One-Year Period of Severance shall again become a
Participant on his new Employment Commencement Date. For this purpose, the new
Employment Commencement Date shall be the date following the Participant's
reemployment on which he first performs an Hour of Service for the Employer.
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ARTICLE IV
CONTRIBUTIONS
4.1 Deferral Election.
(a) Election. For each Plan Year, a Participant may make
a Deferral Election under subsection (b), relating to Deferrals, and/or
subsection (c), relating to Catch-up Contributions, pursuant to which the
Participant shall direct the Employer to reduce the Participant's Compensation
and to contribute to the Plan, on the Participant's behalf, the amount by which
the Participant's Compensation has been so reduced.
(b) Amount of Deferral. A Participant may make a Deferral
Election in an amount (in multiples of one percent (1%)) equal to (i) in the
case of an employee who is not a Highly Compensated Employee, not less than one
percent (1%) and not more than 14 percent (14%) (50 percent (50%), effective
with respect to Compensation payable on or after the first pay date on or after
July 1, 2002) of his Compensation for a payroll period or (ii) in the case of a
Highly Compensated Employee, not less than one percent (1%) and not more than
nine percent (9%) of his Compensation for a payroll period; provided that the
Committee may amend the Plan in accordance with Section 10.1(b) to modify the
maximum percentage of Compensation that may be deferred by Highly Compensated
Employees under this Section 4.1(b) for any Plan Year. Such contribution shall
be made by payroll deduction at the regular payroll period applicable to the
Participant, or deducted from any special, non-recurring payment of Compensation
made to the Participant.
(c) Amount of Catch-up Contribution. Effective with
respect to Compensation payable on or after the first pay date on or after July
1, 2002, a Participant who has attained, or will attain, age 50 prior to the end
of the Plan Year may make an additional Deferral Election (in multiples of one
percent (1%)) equal to not less than one percent (1%) and not more than 50
percent (50%) of his Compensation, or in any dollar amount specified by the
Participant, for any payroll period during the Plan Year; provided, however that
(1) Catch-up Contributions shall not be treated as contributed pursuant to this
subsection (c) unless the Participant is unable to contribute additional
Deferrals for the Plan Year under subsection (b) due to limitations imposed by
Sections 4.1(b), 4.2(a), 4.4(a) or 5.5 of the Plan or corresponding provisions
of the Code and (2) the amount contributed pursuant to this subsection (c) for
any Plan Year and, to the extent required by Treasury regulations, any other
elective deferrals contributed on the Participant's behalf pursuant to section
414(v) of the Code for a Plan Year shall not exceed the lesser of (A) $1,000 (or
such other amount as may be applicable under section 414(v) of the Code) or (B)
the excess of the Participant's Compensation (as defined in Section 5.5(d)) for
the Plan Year over the Deferrals contributed on the Participant's behalf under
subsection (b) above for the Plan Year. Catch-up Contributions under this
subsection (c) shall not be subject to the limitations described in Sections
4.2, 4.4, and 5.5. Such Catch-up Contribution shall be made by payroll deduction
at the regular payroll period applicable to the Participant, or deducted from
any special, non-recurring payment of Compensation made to the Participant.
(d) Committee's Approval. A Participant's Deferral
Election shall be subject to the approval (or partial approval) of the
Committee. The Committee's approval shall not be given:
12
(i) if the Participant's Deferrals for the Plan
Year would exceed the dollar amount as may apply under Section
402(g) of the Code (effective January 1, 2002, $11,000),
multiplied by the Adjustment Factor;
(ii) if the Deferral Election results in
prohibited discrimination in favor of an Employee who is a
Highly Compensated Employee;
(iii) if the Deferrals, taken together with the
Employer Matching Contribution made on behalf of the
Participant for the Limitation Year under this Plan and any
other defined contribution plan of the Employer or an
Affiliate, exceeds 25 percent (25%) (effective January 1,
2002, 100 percent (100%)) of the Participant's "compensation"
(as defined in Section 5.5(d) hereof) for the Limitation Year;
or
(iv) if the Committee otherwise determines that
the election is in excess of the amounts permitted by the
Code.
In making its determination, the Committee shall apply the provisions of this
Section 4.1(d) and the applicable provisions of the Code and the regulations and
rulings promulgated thereunder. If, as a result of subsequent events, a Deferral
Election that has been previously approved by the Committee would later result
in contributions in excess of the amount permitted under this Section 4.1(d),
the Committee may revoke, in whole or in part, its prior approval and may
require the Participant to reduce his Deferral Election in order to prevent such
excess.
(e) Correction of Excess Deferral. If a Participant
notifies the Plan Administrator by March 1 of any calendar year that his
Deferrals under this Plan for the preceding calendar year, when added to his
other elective deferrals under any other plan or arrangement (whether or not
maintained by the Employer or an Affiliated Company) exceed the limit imposed by
Section 402(g) of the Code for such preceding calendar year, the Plan
Administrator shall distribute, by April 15 following receipt of notice by the
Participant, the amount of Deferrals specified in the Participant's notice, plus
income thereon determined in the manner described in Section 4.4(g), or shall
recharacterize such excess Deferrals as Catch-up Contributions contributed
pursuant to subsection (c) to the extent permitted by Section 414(v) of the Code
and the regulations permitted thereunder, and any Employer Matching
Contributions related to such excess Deferrals shall be forfeited and used to
reduce future Employer Matching Contributions.
4.2 Employer Deferral, Catch-up Contributions and Matching
Contributions.
(a) Deferrals and Catch-up Contributions. The Employer
shall contribute to the Plan, on behalf of each Participant, the amount by which
the Participant has elected to reduce his Compensation pursuant to his Deferral
Election in accordance with Section 4.1. Notwithstanding any other provisions of
the Plan to the contrary, the maximum amount that the Employer shall contribute
on behalf of any Participant pursuant to such Participant's Deferral Election
(excluding Catch-up Contributions contributed pursuant to subsection (c)) for
any Plan Year shall not exceed the dollar amount as may apply under Section
402(g) of the Code (effective January 1, 2002, $11,000), multiplied by the
Adjustment Factor.
(b) Employer Matching Contributions. The Employer shall
contribute on behalf of each Participant who has a Deferral Election in effect
during each payroll period, an amount equal to 100 percent (100%) of the amount
contributed on behalf of such Participant
13
pursuant to such Participant's Deferral Election (excluding a Deferral Election
made under Section 4.1(c)) that does not exceed the applicable percentage of his
Compensation for that payroll period. The applicable percentage (two percent
(2%), three percent (3%), four percent (4%), five percent (5%), six percent (6%)
or such other percentage as the Board of Directors shall designate) of a
Participant's Compensation for a payroll period shall be determined for each
business location by the Board of Directors as designated in Schedule I. The
Employer may, in the sole discretion of its Board of Directors, make the
Employer Matching Contribution hereunder at any time during the Plan Year, or,
following the end of the Plan Year, within the time prescribed by law for filing
the Employer's federal income tax return (including extensions thereof for its
taxable year that coincides with, or ends within, such Plan Year. In the event
that a Participant receives a distribution of excess Deferrals under Section 4.4
or 5.5 and any Employer Matching Contributions allocated to the Participant by
reason of such distributed Deferrals remain in the Participant's Accounts after
application of Section 4.4(b) or (c), the Participant shall forfeit such
Employer Matching Contributions (plus earnings thereon determined in the manner
described in Section 4.4(g)). Employer Matching Contributions forfeited under
this Section 4.2(b) shall be used to reduce future Employer Matching
Contributions.
(c) Deferral Election - Discontinuance, Variation and
Resumption. A Deferral Election, if approved by the Committee, shall continue in
effect until changed or revoked by the Participant. A Participant may make,
discontinue or change a Deferral Election, effective as of any Entry Date during
the Plan Year, by filing a form with the Committee at least thirty (30) days
prior to such date indicating his instructions with respect thereto; provided,
however, that a Participant may completely discontinue a Deferral Election,
effective as of the first day of any month by filing a form with the Committee
at least thirty (30) days prior to such date. The Committee may modify or waive
the thirty (30) day advance notice requirements of this Section 4.2 if it finds,
in its sole discretion, that such modification or waiver is appropriate under
the circumstances to further the purposes of this Plan. All changes in a
Deferral Election are subject to approval by the Committee in accordance with
Section 4.1(d).
(d) Limitation on Contributions. Notwithstanding any
other provision of the Plan to the contrary, the Employer shall not make any
contributions (excluding Catch-up Contributions contributed under Section
4.1(c)) to the Plan pursuant to this Section 4.2 on behalf of a Participant if
such contributions would exceed the limitations of Section 5.5.
(e) Limitation on Contributions on Behalf of Highly
Compensated Employees. Notwithstanding any other provision of the Plan to the
contrary, the Employer shall not make any contributions (excluding Catch-up
Contributions contributed under Section 4.1(c)) to the Plan pursuant to this
Section 4.2 on behalf of a Participant who is a Highly Compensated Employee that
would exceed the limitations of Section 4.4.
4.3 Reemployment Following a Period of Qualified Military Service.
Notwithstanding any provision of this Plan to the contrary, effective for
reemployments on or after December 12, 1994, all contributions with respect to
periods of Qualified Military Service shall be provided in a manner consistent
section 414(u) of the Code, as follows:
(a) Deferrals and Catch-up Contributions. An Employee who
is reemployed following a period of Qualified Military Service shall be
permitted to contribute additional Deferrals and Catch-up Contributions under
the Plan in an amount equal to the maximum amount of Deferrals and/or Catch-up
Contributions that the Employee would have been
14
permitted to make under the Plan during the period of Qualified Military Service
if the Employee had continued to be employed during such period and received
Compensation equal to:
(i) the Compensation the Employee would have
received during such period if the Employee were not in
Qualified Military Service, or
(ii) the Employee's average Compensation during
the twelve (12)-month period immediately preceding the
Qualified Military Service, or
(iii) if the Employee was employed less than
twelve (12) months prior to the Qualified Military Service,
his average Compensation during the period of employment
immediately preceding the Qualified Military Service,
or such lesser Deferrals and/or Catch-up Contributions as determined by the
Employee. Proper adjustment shall be made to the amount determined under the
preceding sentence for any Deferrals and/or Catch-up Contributions actually made
during the period of such Qualified Military Service. The additional Deferrals
and/or Catch-up Contributions shall be made during the period that begins on the
date of the reemployment of the Employee and has the same length as the lesser
of (i) the product of three (3) and the period of Qualified Military Service and
(ii) five (5) years.
(b) Employer Matching Contributions. The Employer
Matching Contribution, with respect to any additional Deferrals, will equal the
Employer Matching Contribution that would have been required had such Deferral
Election been made during the period of Qualified Military Service.
(c) Inapplicability of Certain Limitations. If any
contributions are made by a Participant or the Employer in accordance with this
Section 4.3:
(i) any such contribution shall not be subject to any
otherwise applicable limitation contained in, and the
Plan shall not be treated as failing to meet the
requirements of, Section 4.4 or Section 7, and shall
not be taken into account in applying such
limitations to other contributions or benefits under
the Plan with respect to the year in which the
contribution is made; and
(ii) any such contribution (excluding Catch-up
Contributions contributed under Section 4.1(c)) shall
be subject to the limitations referred to in Section
4.3(c)(i) with respect to the year to which the
contribution relates (in accordance with rules
prescribed by the Secretary of the Treasury).
4.4 Nondiscrimination Requirements.
(a) Average Deferral Percentage Test. The Average
Deferral Percentage in each Plan Year for all Participants who are Highly
Compensated Employees shall not exceed the greater of:
(i) the Average Deferral Percentage for all
Participants who are non-Highly Compensated Employees for the
preceding Plan Year multiplied by 1.25; or
15
(ii) the lesser of: (A) the Average Deferral
Percentage for all Participants who are non-Highly Compensated
Employees for the preceding Plan Year multiplied by two or (B)
the Average Deferral Percentage for all Participants who are
non-Highly Compensated Employees plus two percentage points.
For purposes of the Average Deferral Percentage test, the Deferral Percentage of
any Participant who is a Highly Compensated Employee and is eligible to receive
qualified nonelective contributions (within the meaning of Section 401(m)(4)(C)
of the Code) or elective deferrals (within the meaning of Section 401(m)(4)(B)
of the Code) under two or more plans that are qualified under Section 401(a) and
401(k) of the Code and that are maintained by the Company or an Affiliate shall
be determined as if all such contributions and elective deferrals were made
under a single plan.
(b) Average Contribution Percentage Test. The Average
Contribution Percentage in each Plan Year for all Participants who are Highly
Compensated Employees shall not exceed the greater of:
(i) the Average Contribution Percentage for all
Participants who are non-Highly Compensated Employees for the
preceding Plan Year multiplied by 1.25; or
(ii) the lesser of (A) the Average Contribution
Percentage for all Participants who are non-Highly Compensated
Employees for the preceding Plan Year multiplied by two or (B)
the Average Contribution Percentage for all Participants who
are non-Highly Compensated Employees plus two percentage
points.
For purposes of the Average Contribution Percentage test, the Contribution
Percentage of any Participant who is a Highly Compensated Employee and is
eligible to receive matching contributions (within the meaning of Section
401(m)(4)(A) of the Code) under two or more plans that are qualified under
Sections 401(a) of the Code and that are maintained by the Company or any
Affiliate shall be determined as if all such contributions were made under a
single plan.
(c) Aggregate Limit. For any Plan Year beginning before
January 1, 2002 in which both the limitations in Sections 4.4(a) and (b) are
exceeded, the sum of the Average Deferral Percentage and the Average
Contribution Percentage for active Participants who are Highly Compensated
Employees (determined after adjustments are made under Subections 5.7(e)(i) and
(ii) for purposes of satisfying the limitations described in Sections 5.7(a) and
(b)) shall not exceed the greater of:
(i) the sum of (A) the greater of the applicable
Average Deferral Percentage or the Average Contribution
Percentage for all other active Participants multiplied by
1.25, plus (B) the lesser of (1) two (2) multiplied by the
greater of the applicable Average Deferral Percentage or the
Average Contribution Percentage for all other active
Participants, or (2) two percent (2%) plus the greater of the
applicable Average Deferral Percentage or the Average
Contribution Percentage for all other active Participants; or
(ii) the sum of (A) the lesser of the applicable
Average Deferral Percentage or the Average Contribution
Percentage for all other active Participants multiplied by
1.25, plus (B) the lesser of (1) two (2) multiplied by the
16
greater of the applicable Average Deferral Percentage or the
Average Contribution Percentage for all other active
Participants, or (2) two percent (2%) plus the greater of the
applicable Average Deferral Percentage or the Average
Contribution Percentage for all other active Participants.
The application of this Section 4.4(c) shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(d) Special Participant Rule. For purposes of Subsection
(a), (b) and (c), the term "Participants" includes Employees eligible to
participate in the Plan in accordance with Article II whether or not they
elected to participate in the Plan or make a Deferral Election. "Participants"
shall not include Employees who are non-Highly Compensated Employees and who
have not attained age twenty-one (21) and who have completed less than a Year of
Service before the last day of the Plan Year.
(e) Corrections.
(i) In the event the Plan Administrator
determines that the nondiscrimination requirement of
Subsection (a) has not been satisfied in a Plan Year after
Deferral Amounts have been allocated to Participants'
Accounts, the Plan Administrator shall:
(A) determine how much the Average
Deferral Percentage for the Highly Compensated
Employee with the highest Average Deferral Percentage
for the Plan Year would need to be reduced to comply
with the limit in Subsection (a) or to cause such
Average Deferral Percentage to equal the Average
Deferral Percentage of the Highly Compensated
Employee with the next highest Average Deferral
Percentage, and repeat this process until the
Deferral Percentage Test described in Section 4.3(a)
would be satisfied;
(B) convert the excess percentage
amount determined under (A) into a dollar amount by
first multiplying the hypothetical reductions
described in (A) by the applicable Highly Compensated
Employee's compensation, and then by adding together
all such dollar amounts;
(C) reduce the Deferral Amount of the
Highly Compensated Employee or Employees with the
greatest dollar amount of Deferral Amounts made on
their behalf with respect to the Plan Year by the
lesser of (1) the amount by which the dollar amount
of the affected Highly Compensated Employee's
Deferral Amount exceeds the dollar amount of the
Highly Compensated Employee with the next highest
dollar amount of Deferral Amounts, or (2) the amount
of the excess dollar amount determined under (B);
(D) repeat this reduction process until
the Deferral Amounts of Highly Compensated Employees
have been reduced by an amount equal to the excess
dollar amount determined under (B);
(E) direct the Trustee to return the
excess Deferral Amounts, as adjusted in accordance
with Subsection (g), to the individuals from
17
whose Deferral Account the excess Deferral Amounts
were obtained within two and one-half months
following the close of the Plan Year, if
administratively practicable, but in no event later
than the close of the following Plan Year.
The Deferral Amount of any Highly
Compensated Employee that must be reduced pursuant to
this Section 4.4(e) shall be reduced (i) first, by
distributing Deferral Amounts not taken into account
in determining Employer Matching Contributions under
Section 4.2(b) and (ii) then, by distributing
Deferral Amounts not described in (i), within 12
months of the close of the Plan Year with respect to
which the distribution applies. The provisions of
Section 4.2(b) regarding the forfeiture of related
Employer Matching Contributions will apply.
Notwithstanding the foregoing, at the
election of the Plan Administrator and in accordance
with rules uniformly applicable to all affected
Participants, the reduction described in this Section
may be accomplished, in whole or in part, by
recharacterizing excess Deferral Amounts as Deferral
Amounts contributed pursuant to Section 4.1(c) to the
extent permitted by Section 414(v) of the Code and
regulations issued thereunder. Matching Contributions
related to Deferral Amounts recharacterized as
Deferral Amounts under Section 4.1(c) shall be
forfeited.
(ii) In the event the Plan Administrator
determines that the nondiscrimination requirement of
Subsection (b) has not been satisfied in a Plan Year after
Employer Matching Contributions have been allocated to
Participants' Accounts, the Plan Administrator shall:
(A) determine how much the Average
Contribution Percentage for the Highly Compensated
Employee with the highest Average Contribution
Percentage for the Plan Year would need to be reduced
to comply with the limit in Subsection (b) or to
cause such Average Contribution Percentage to equal
the Average Contribution Percentage of the Highly
Compensated Employee with the next highest Average
Contribution Percentage, and repeat this process
until the Employer Contribution Percentage Test
described in Section 4.3(b) would be satisfied;
(B) convert the excess percentage
amount determined under (A) into a dollar amount by
first multiplying the hypothetical reductions
described in (A) by the applicable Highly Compensated
Employee's compensation, and then by adding together
all such dollar amounts;
(C) convert the excess percentage
amount determined under (A) into a dollar amount;
(D) reduce the Employer Matching
Contribution of the Highly Compensated Employee or
Employees with the greatest dollar amount of Employer
Matching Contributions made on their behalf with
respect to the Plan Year by the lesser of (1) the
amount by which the dollar amount of
18
the affected Highly Compensated Employee's Employer
Matching Contribution exceeds the dollar amount of
the Highly Compensated Employee with the next highest
dollar amount of Employer Matching Contributions, or
(2) the amount of the excess dollar amount determined
under (B);
(E) repeat this reduction process until
the Employer Matching Contributions of Highly
Compensated Employees have been reduced by an amount
equal to the excess dollar amount determined under
(B); and
(F) direct the Trustee to return the
excess Employer Matching Contributions, as adjusted
in accordance with Subsection (g), to the individuals
form whose Employer Matching Contribution Account the
excess Employer Matching Contributions were obtained
within two and one-half months following the close of
the Plan Year, if administratively practicable, but
in no event later than the close of the following
Plan Year.
(iii) In the event the Plan Administrator
determines that the nondiscrimination requirement of
Subsection (c) has not been satisfied in a Plan Year after
Deferrals and Employer Matching Contributions have been
allocated to Participants' Accounts, the Plan Administrator
shall reduce the Average Deferral Percentage and/or the
Average Contribution Percentage (as determined under
Subsection 4.4(f) below) for the Highly Compensated Employees
to the extent required to enable the Plan to satisfy the tests
in Subsection (c). The reduction shall be accomplished in the
same manner as is set forth in Sections 4.4(a) and 4.4(b),
whichever is appropriate.
(f) Corrective Distributions. If the Plan Administrator
determines that Deferrals or Employer Matching Contributions in excess of the
amount permitted under Subsections (a), (b) or (c) were made to the Plan, then
the Plan Administrator will cause the Trustee to make a corrective distribution
of any such excess (and income allocable thereto as computed in accordance with
Subsection (g)) to the Highly Compensated Employees within twelve (12) months of
the close of the Plan Year to which the excess is attributed based on the excess
dollar amounts determined under Subsection (e). Such a distribution is not
subject to spousal consent. In the case of a corrective distribution required
hereunder because of an excess arising under Subsection (c), reductions shall
first be made from the Highly Compensated Employees' Deferrals and then from
their Employer Matching Contributions, if necessary.
(g) Income Attributable to Excess Contributions. The
income attributable to excess Deferrals or Employer Matching Contributions as
determined in accordance with Subsection (e) shall be an amount equal to the sum
of:
(i) the earnings or losses allocated to
Deferrals or Employer Matching Contributions, as applicable,
for the preceding Plan Year multiplied by a fraction the
numerator of which is the excess determined in accordance with
Subsection (e), as applicable, on behalf of the Participant
for the preceding Plan Year and the denominator of which is
the portion of the Participant's Account attributable to
Deferral Elections or Employer Matching Contributions, as
applicable, as of the last day of the preceding Plan Year,
reduced by earnings and increased by losses for the preceding
Plan Year; plus
19
(ii) the earnings or losses allocated to
Deferrals, or Employer Matching Contributions, as applicable
for the period between the end of the preceding Plan Year and
the last day of the month preceding the distribution date
multiplied by a fraction determined under the method described
in clause (i) above.
(h) Coordination Rule. Excess Deferrals determined with
respect to a Plan Year that shall be distributed in accordance with Section (f)
shall be reduced by any excess deferrals, previously distributed to such
Participant for the Participant's taxable year ending with or within such Plan
Year.
4.5 Rollovers and Transfers.
(a) Rollover Contribution - General. Subject to such
terms and conditions as the Committee may establish from time to time, a
Participant (or an Employee who is not eligible to participate in the Plan
solely because he has failed to satisfy the age and service requirements of
Section 2.1, and who, for purposes of his Rollover Contribution only, shall be
considered a Participant in the Plan) may at any time make a Rollover
Contribution to this Plan of all or a portion of the amount payable to the
Participant (a) as an eligible rollover distribution (as defined under Section
401(a)(31)(C) of the Code) from a qualified plan, or (b) from an individual
retirement account or annuity that received a qualifying rollover contribution
from a qualified plan; provided that the amount contributed to the Rollover
Account shall exclude an amount equal to the Participant's after-tax
contributions to the qualified plan. Any payment to the Plan pursuant to this
Section 4.5 shall be made as a direct rollover that satisfies Section 401(a)(31)
of the Code or shall be made to the Plan within 60 days after the Participant's
receipt of the distribution from the plan or individual retirement arrangement
in such manner as may be approved by the Committee. Notwithstanding the above,
if the Committee subsequently determines that any Rollover Contribution
previously made to the Plan by a Participant is not a valid Rollover
Contribution, the Committee shall return to the Participant, as soon as
administratively possible, the amount of the invalid Rollover Contribution,
together with earnings attributable to the Rollover Contribution.
(b) Rollover Contribution - Defined. A contribution shall
qualify as a Rollover Contribution if:
(i) subject to subsection (c) below, it
represents an Eligible Rollover Distribution to the
Participant under a retirement plan qualified under Section
401(a) of the Code;
(ii) it represents the balance to the credit of
the Participant in an individual retirement account or annuity
(as described in Section 408 of the Code) created solely to
receive amounts described in Subsection (i) above, and to
which no other contributions were made by the Employee; or
(iii) it represents a direct transfer to the
Trustee from an Eligible Retirement Plan described in
Subsection (i), above, of all or a portion of the benefit to
which the Employee was entitled under such Eligible Retirement
Plan.
For purposes of this Section 4.5, but subject to subsection (c) below, "Eligible
Rollover Distribution" and "Eligible Retirement Plan" shall have the meanings
set forth in Section 6.4(e).
20
(c) Limitation. A Rollover Contribution shall not include
any amount that constituted an employee contribution, whether voluntary or
mandatory, made by the Employee to a plan described in Subsection (b)(i).
4.6 Non-Forfeitability of Certain Accounts. A Participant's rights
to his Catch-up Contribution Account, his Deferral Account, his Employer
Matching Contribution Account, and his Rollover Contribution Account, if any,
shall, at all times, be 100 percent (100%) nonforfeitable.
21
ARTICLE V
INDIVIDUAL ACCOUNTS
5.1 Participant Accounts. The Committee shall maintain a Catch-up
Contribution Account, a Deferral Account, an Employer Matching Contribution
Account and a Rollover Contribution Account, if applicable, in the name of each
Participant.
5.2 Valuation of Accounts. As of each Valuation Date, the
Committee shall:
(a) First, add to each of the Participant's Accounts the
Catch-up Contributions, Deferrals and Employer Matching Contributions made
during the preceding month that are then allocable to each such Account and
subtract all distributions made to Participants since the last preceding
Valuation Date;
(b) Next, allocate to the Accounts of each Participant or
Former Participant who has elected to invest in any Investment Fund, each item
of income, expense, gain and loss accruing to such Fund among the Accounts of
Participants or Former Participants electing to invest, or having an investment,
in such Fund in the same proportion to the value, as of the last preceding
Valuation Date, that the portion of each such Account so invested bears to the
value of the portion of all such Accounts that are invested in such Fund.
(c) With respect to a Participant who has a Severance
From Service Date with the Employer for any reason during a month, the Committee
may (A) value such Participant's Accounts, in accordance with the provisions of
this Section 5.2, as of the last day of the month in which such Severance From
Service Date, and (B) value the portion of the Participant's Accounts, if any,
that is invested in the Common Stock Fund as of the date on which such shares
are sold.
5.3 Employer Matching Contributions Considered Made on Last Day of
Plan Year. For purposes of this Article V, the Employer Matching Contributions
made pursuant to Section 4.2(b) for any Plan Year will be considered to have
been made on the last day of that Plan Year, regardless of when paid to the
Trustee.
5.4 Valuation. The Trustee shall have prepared, on a daily basis,
a valuation of each Investment Fund and each Participant's or Former
Participant's Accounts, the same to be available to each Participant or Former
Participant. Within a reasonable time after the close of each month, the Trustee
shall prepare or cause to be prepared a statement of the condition of the Trust
Fund, setting forth all investments, receipts, disbursements, and other
transactions effected during such month, and showing all the assets of the Trust
Fund and the cost and fair market value thereof. The items of information in the
statement shall be shown separately for each investment vehicle maintained in
the Investment Fund. This statement shall be delivered to the Committee and the
Plan Administrator. The Plan Administrator shall then cause to be prepared, and
the Trustee shall deliver to each Participant or Former Participant, a quarterly
report disclosing the status of his Accounts in the Trust Fund.
5.5 Limitation on Annual Additions.
(a) General. Notwithstanding any other provision of the
Plan, the Annual Addition to a Participant's Accounts for any Limitation Year
may not exceed an amount equal to the lesser of:
22
(i) $30,000 (effective January 1, 2002,
$40,000), adjusted in accordance with section 415(d) of the
Code, or
(ii) 25 percent (25%) (effective January 1, 2002,
100 percent (100%)) of the Participant's compensation for the
Limitation Year.
(b) For Plan Years beginning prior to January 1, 2000, if
an Employee is or was a Participant in any defined benefit plan required to be
taken into account for purposes of applying the combined plan limitations
contained in Section 415(e) of the Code, then for any Plan Year 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. If,
for any year the foregoing combined plan limitation would be exceeded, the
benefit provided under the defined benefit plan shall be reduced to the extent
necessary to meet that limitation.
(c) Annual Additions - Defined. For purposes of this
Section 5.5, the term "Annual Addition" means, for each Limitation Year, the sum
of:
(i) the portion of the contribution (other than
a contribution made pursuant to a Participant's Deferral
Election) made by the Employer (or a Related Employer) for
such Limitation Year under this Plan and any defined
contribution plan; plus
(ii) the amount, if any, contributed on behalf of
the Participant pursuant to the Participant's Deferral
Election (excluding Catch-up Contributions made under Section
4.1(c)) for such Limitation Year under this Plan or any other
defined contribution plan maintained by the Employer or a
Related Employer; plus
(iii) the amount of forfeitures, if any, allocated
to the Participant's account for such Limitation Year under
this Plan or any other defined contribution plan maintained by
the Employer or a Related Employer; plus
(iv) the amount, if any, of the Participant's
voluntary contributions made under a defined contribution plan
maintained by the Employer or a Related Employer for such
Limitation Year.
The term "Annual Addition" shall not include any Rollover Contribution or any
earnings allocable to any Account thereunder.
(d) Compensation - Defined. Solely for purposes of this
Section 5.5, Compensation shall mean "compensation" as such term is defined in
Treas. Reg. Section 1.415-2(d)(11)(i), plus contributions made at the Employee's
election to employee benefit plans but excluded from the Employee's gross income
pursuant to Section 125, 401(k), 402(h)(i)(B), 403(b), 408(p) or 457 of the
Code, and, for Plan Years beginning on or after January 1, 2001, Section
132(f)(4) of the Code. Notwithstanding the foregoing, effective January 1, 1998,
any amounts deducted from an Employee's earnings on a pre-tax basis for group
health care coverage because the Employee is unable to certify that he or she
has other health care coverage, shall be treated as an amount contributed by the
Employer pursuant to a salary reduction agreement under Section 125 of the Code
purposes of determining the Employee's Compensation, so long as the Employer
does not otherwise request or collect information
23
regarding the Employee's other health coverage as part of the enrollment process
for the Employer's health care plan.
(e) Other Plans. For purposes of applying the limitations
of this Section 5.5, all defined benefit plans maintained by the Employer or a
Related Employer (whether or not terminated) are to be treated as one defined
benefit plan, and all defined contribution plans maintained by the Employer or a
Related Employer (whether or not terminated) are to be treated as one defined
contribution plan. Any contributions to the Employer's defined benefit plan made
by an Employee shall be deemed to be made under a separate defined contribution
plan.
(f) Related Employer - Defined. For purposes of this
Section 5.5, the term "Related Employer" shall mean any other corporation that
is, along with the Employer, a member of a controlled group of corporations (as
defined in Section 414(b) of the Code, as modified by Section 415(h) thereof) or
any other trades or businesses (whether or not incorporated) that, along with
the Employer, are under common control (as defined in Section 414(c) of the Code
as modified by Section 415(h) thereof) or any other employer that forms, along
with the Employer, an "affiliated service group" (as such term is defined in
Section 414(m) of the Code or in regulations under Section 414(o)).
(g) Return of Excess Annual Additions. If a Participant's
Annual Addition exceeds the amounts specified above:
(i) The Plan shall distribute Deferrals to the
Participant to the extent an excess exists, together with
earning on such excess amounts. The Committee shall make such
distribution in a lump sum as soon as administratively
possible after the excess is determined. Any such excess
Deferrals may instead be recharacterized as Catch-up
Contributions contributed pursuant to Section 4.1(c) to the
extent permitted by Section 414(v) of the Code and the
regulations issued thereunder.
(ii) Employer Matching Contributions based on the
Deferrals above shall be forfeited in the Plan Year in which
the Deferrals are distributed. Employer Matching Contributions
are based on distributed Deferrals to the extent that Employer
Matching Contributions would have been reduced if the
Participant had made Deferrals for the Plan Year equal to
undistributed Deferrals.
(iii) Deferrals and Employer Matching
Contributions that are distributed or recharacterized under
(i) or forfeited under (ii), respectively, above shall not be
counted in determining whether the limit in Section 402(g) of
the Code has been exceeded or in performing the
nondiscrimination tests in Section 4.4 of this Plan.
5.6 Allocations Do Not Create Rights. No Participant shall acquire
any right to or interest in any specific asset of the Trust Fund merely as a
result of the allocations provided for in the Plan.
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ARTICLE VI
PAYMENT OF BENEFITS
6.1 Retirement, Death, Disability or Termination of Employment.
Upon a Participant's termination of employment with the Employer, either
voluntarily or involuntarily, or as a result of retirement, Disability or death,
he shall be entitled to 100 percent (100%) of the value of his Accounts. The
value of all Accounts shall be determined and payable in accordance with the
provisions of Sections 5.2, 5.3 and 6.4. Notwithstanding the foregoing, in the
event a Participant is affected by a sale or other disposition involving his
employer prior to January 1, 2002, such Participant's Deferral Election Account
may not be distributed before (i) he has experienced a "separation from service"
in accordance with the principles set forth in Revenue Ruling 79-336 and
subsequent related rulings by the Internal Revenue Service, as determined by the
Committee in its sole discretion; (ii) the sale or other disposition by a
corporation to an unrelated corporation of substantially all of the assets used
in a trade or business (but only if such Participant continues employment with
the acquiring corporation, the acquiring corporation does not maintain the Plan
after the disposition and the other applicable requirements of Section
401(k)(10) of the Code are satisfied); or (iii) the sale or other disposition by
a corporation of its interest in a subsidiary to an unrelated entity (but only
if such Participant continues employment with the subsidiary, the acquiring
entity does not maintain the Plan after the disposition and the other applicable
requirements of Section 401(k)(10) of the Code are satisfied).
6.2 Attainment of 59 1/2.
(a) General Rule. If a Participant attains age 59 1/2 and
remains in the service of the Employer, he may elect to have the value of his
Catch-up Contribution Account, his Deferral Account, his Employer Matching
Contribution Account (determined in accordance with Sections 5.2 and 5.3 and
valued as of the Valuation Date coincident with or next succeeding the date of
his election or, pursuant to procedures that the Committee may, in its sole
discretion, adopt, as of the last day of the month in which he files his
election), and his Rollover Contribution Account paid to him (or his Beneficiary
in the event of his death) in a lump sum as soon as practicable following the
date as of which his Accounts are valued. The Participant (or Beneficiary) may
make such an election by filing a written notice with the Committee, on a form
acceptable to the Committee. Notwithstanding such withdrawal, the Participant
may also elect to continue to participate in the Plan if he otherwise remains
eligible.
(b) Special Rule for Former National Controls Corporation
Retirement Savings Plan (the "NCC Plan") Participants. In addition to the lump
sum distribution described in paragraph 6.2(a), any Participant who was formerly
a participant in the NCC Plan in conjunction with the merger of the NCC Plan
into this Plan shall be entitled to receive a distribution elected pursuant to
Section 6.2(a) in the form of installment payments described in Section 6.4(d),
but only with respect to that portion of his account balance that represented
his balance under the NCC Plan as of the date of the merger.
6.3 Beneficiary Designation. If a Participant or Former
Participant has a spouse, his spouse shall be his Beneficiary, unless the
Participant or Former Participant designates someone other than his spouse as
his Beneficiary (other than as a contingent Beneficiary) and his spouse consents
to such designation pursuant to this Section 6.3. If the Participant or Former
Participant does not have a spouse, or if the spouse consents, the Participant
or Former Participant shall have the right to designate someone other than his
spouse as his Beneficiary.
25
In all events, the Participant or Former Participant shall have the right to
designate a contingent Beneficiary. Each such designation shall be in writing,
filed with the Committee, and shall be in such form as may be required by the
Committee. If a married Participant or Former Participant designates someone
other than his spouse as his Beneficiary (other than as a contingent
Beneficiary), such Beneficiary designation shall not be effective unless (a) the
spouse consents to such Beneficiary designation, in writing, and her consent is
witnessed by a Plan representative or notary public, or (b) the Participant or
Former Participant demonstrates, to the satisfaction of the Committee, that he
is not married or his spouse cannot be located. The Committee shall determine
which Beneficiary, if any, shall have been validly designated. If no Beneficiary
has been validly designated, or if the designated Beneficiaries predecease the
Participant or Former Participant, then the amount, if any, payable upon the
Participant's or Former Participant's death shall be paid:
(a) to the Participant's or Former Participant's
surviving spouse; or, if there is none,
(b) to the Participant's or Former Participant's children
and issue of deceased children, in equal shares, per stirpes; or if there are
none,
(c) to the Participant's or the Former Participant's
parents, in equal shares, or to the survivor thereof; or if there are none,
(d) to the legal representative(s) of the Participant's
or the Former Participant's estate.
6.4 Form of Payment.
(a) Retired or Disabled Participants. Upon a
Participant's termination of employment with the Employer and the Affiliates on
or after his Normal Retirement Age or on account of a Disability, he shall be
entitled to receive an immediate distribution or a direct transfer to another
plan of the value of his Accounts as soon as administratively practicable after
returning a completed benefit distribution form to the Plan Administrator;
provided, however that his Accounts must be distributed no later than his
Mandatory Distribution Date as determined under Section 6.5
(b) Terminated Participants. Upon a Participant's
termination of employment with the Employer and the Affiliates, either
voluntarily or involuntarily, prior to his Normal Retirement Age (other than by
reason of his death or Disability), he shall be entitled to receive a
distribution or a direct transfer to another plan of the value of his Accounts
as soon as administratively practicable after returning a completed benefit
distribution form to the Plan Administrator; provided, however, that his
Accounts must be distributed no later than his Mandatory Distribution Date as
determined under Section 6.5.
Until benefits are distributed, a Participant's Accounts shall be held
and invested in accordance with Section 9.2 pursuant to the instructions of the
Former Participant.
(c) Death of a Participant. If a Participant or Former
Participant, dies prior to the date payment of his benefit begins, the value of
his Accounts shall be paid to his Beneficiary as soon as practicable following
his death.
26
(d) Amount and Form of Payment. Any distribution made
pursuant to this Plan shall be made in a single lump sum and in cash except that
if, as of the date the Participant terminates his employment, part of his
Accounts is invested in the Common Stock Fund or in shares of any Investment
Fund, then the Participant, Former Participant or Beneficiary to whom such
payment is made may elect to have that portion of the Accounts that is so
invested paid in common stock or shares held in each such Investment Fund;
provided, however, that cash will be paid in lieu of any fractional shares
allocated to the Participant's or Former Participant's Accounts.
Notwithstanding the foregoing, any Participant who was
formerly a participant in the NCC Plan and whose Account balance under the NCC
Plan is transferred to the Plan in conjunction with the merger of the NCC Plan
into the Plan shall be entitled to receive his distribution in the form of
installment payments in substantially equal installments not less frequently
than annually over a period not exceeding the Participant's life expectancy or
the life expectancy of the Participant and any individual designated as a
Beneficiary by the Participant, but only with respect to that portion of this
Account balance that represented his account balance under the NCC Plan as of
the date of the merger.
(e) Direct Rollover. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a Distributee's election under
this Subsection, 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
Participant in a Direct Rollover.
For purposes of Subsection (e) of this Section 6.4, the
following definitions shall apply:
(i) An "Eligible Rollover Distribution" is any
distribution from the Plan, excluding (1) any distribution
that is one of a series of substantially equal periodic
payments (not less frequently than annually) over the life (or
life expectancy) of the individual, the joint lives (or joint
life expectancies) of the individual and the individual's
designated Beneficiary, or a specified period of ten (10) or
more years, (2) any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code,
(3) with respect to distributions made prior to January 1,
2002, any distribution to the extent such distribution is not
included in gross income, and (4) effective January 1, 1999
(or January 1, 2000 if elected by the Committee) any hardship
distribution described in Section 401(k)(2)(B)(i)(IV) of the
Code or, effective January 1, 2002, any hardship distribution;
and
(ii) An "Eligible Retirement Plan" is (1) an
individual retirement account described in Section 408(a) of
the Code, (2) an individual retirement annuity described in
Section 408(b) of the Code (other than an endowment contract),
(3) an annuity plan described in Section 403(a) of the Code,
(4) a qualified plan the terms of which permit the acceptance
of rollover distributions, (5) effective January 1, 2002, an
eligible deferred compensation plan described in Section
457(b) of the Code that is maintained by an eligible employer
described in Section 457(e)(i)(A) of the Code that shall
separately account for the distribution, or (6) effective
January 1, 2002, an annuity contract described in Section
403(b) of the Code; provided, however, that (i) the eligible
retirement plans described in clauses (3) and (4) shall not
apply with respect to a distribution made prior to January 1,
2002 to a Beneficiary who is the surviving
27
spouse of a Participant and (ii) with respect to a
distribution (or portion of a distribution) consisting of
after-tax employee contributions, "Eligible Retirement Plan"
shall mean a plan described in clause (4) that separately
accounts for such amounts or a plan described in clause (1) or
(2).
(iii) 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 Relation Order are Distributees with regard
to the interest of the spouse or former spouse.
(iv) A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the distributee.
6.5 Limitations on Commencement or Duration of Benefit Payments.
(a) Commencement of Benefits. If a Participant is a 5%
owner of the Employer (as determined under Section 416 of the Code), he shall
receive, with respect to each calendar year during which and following the
calendar year in which he attained age 70 1/2, the minimum required distribution
amount described under Section 401(a)(9) of the Code and the regulations
thereunder. Notwithstanding any provision of the Plan to the contrary, the
payment of benefits to each Participant or Former Participant who is not a 5%
owner of the Employer shall commence not later than the April 1st following the
later of the calendar year in which the Participant or Former Participant
attains age 70 1/2 or the calendar year in which he retires (his "Mandatory
Distribution Date"). Such payments shall be made:
(i) in a lump sum on or before such date;
(ii) in annual installments beginning by such
date, over the life of such Participant or Former Participant
or over the lives of the Participant or Former Participant and
his Beneficiary; or
(iii) in annual installments beginning by such
date, over a period that may not extend beyond the life
expectancy of such Participant or Former Participant and the
joint life expectancy of the Participant, Former Participant
and his Beneficiary.
(b) Maximum Duration of Death Benefits. If a surviving
spouse of a deceased Participant or Former Participant dies before such
Participant's or Former Participant's interest has been distributed to such
surviving spouse, then the benefit shall be distributed to his Beneficiary
within (i) within five years after the death of the Participant or Former
Participant (or the death of his surviving spouse, as the case may be).
All benefits payable under this Section 6.5 shall satisfy the
incidental death benefit rule of Section 401(a)(G) of the Code by determining
the life expectancies of the Participant and his Beneficiary with reference to
Treasury Regulation Section 1.401(a)(9)-5. With respect to distributions under
the Plan made for calendar years beginning on or after January 1, 2002, the Plan
will apply the minimum distribution requirements of section 401(a)(9) of the
Code in accordance with the Treasury Regulations under section 401(a)(9) that
were proposed on January 17, 2001, notwithstanding any provision of the Plan to
the contrary. This amendment shall continue in effect until the end of the last
calendar year beginning before the effective date
28
of final Treasury Regulations under section 401(a)(9) or such other date as may
be specified in guidance published by the Internal Revenue Service. With respect
to distributions under the Plan made for calendar years beginning on or after
January 1, 2003, the Plan will apply the minimum distribution requirements of
section 401(a)(9) of the Code in accordance with the final Treasury Regulations
under section 401(a)(9) that were published on April 17, 2002.
(c) Additional Limitations. Notwithstanding anything to
the contrary contained in this Section 6.5, the payment of benefits hereunder to
a Participant or Former Participant shall commence not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occurs:
(i) his attainment of age sixty-five (65);
(ii) the tenth anniversary of the year in which
the Participant began to participate in the Plan; or
(iii) the termination of the Participant's service
with the Employer or an Affiliate; provided, however, that the
Participant or Former Participant may elect to defer the
commencement of the payment of benefits hereunder until any
time prior to the April 1st following the calendar year in
which he attains age 70 1/2.
6.6 Cash-Out of Benefits. Notwithstanding anything contained in
this Plan to the contrary, if the value of a Participant's or Former
Participant's Accounts (calculated for distributions made on or after January 1,
2002, by excluding the portion of the Participant's Accounts attributable to his
Rollover Contribution Account and rollover contributions made to a plan that was
merged with and into the Plan) is $5,000 or less, the Committee shall pay such
benefit in a single lump sum as soon as practicable after the retirement,
termination, Disability or death of the Participant or Former Participant, and
any such distribution to the Participant, Former Participant or his Beneficiary,
as the case may be, shall be in complete discharge of the Plan's obligation with
respect to such benefit.
6.7 Qualified Domestic Relations Orders. If the Plan Administrator
has determined that a domestic relations order that pertains to the benefits
under this Plan of a Participant or Former Participant is a Qualified Domestic
Relations Order, then the amount of benefits otherwise payable under this Plan
to such Participant or Former Participant, or his Beneficiary, as the case may
be, shall be reduced by the value of any amounts paid or payable pursuant to
such Order.
29
ARTICLE VII
LOANS TO PARTICIPANTS AND WITHDRAWALS
7.1 Loans.
(a) General. The Committee shall be authorized to
administer a loan program under the Plan, pursuant to this Section 7.1. A
Participant may borrow a portion of his Accounts, in accordance with the
following procedures, terms and conditions
(i) In order to borrow any portion of his
Accounts, the Participant shall file a written application
with the Committee and shall sign a written form, prescribed
by the Committee, authorizing the Employer to deduct from such
Participant's pay for each month during the term of the loan,
amounts determined in accordance with such schedule of
repayment as may be determined appropriate by the Committee in
order to repay the principal and accrued interest due under
the loan. In determining a schedule of repayment of any loan
under this Plan, the Committee shall provide for substantially
level amortization of such loan (with payments not less
frequently than quarterly), over the term of the loan. Loan
proceeds shall be distributed to the Participant as soon as
administratively practicable following application.
(ii) The aggregate total of all outstanding loans
to a Participant under this Plan shall be in an amount
specified by the Participant, which amount shall not be less
than $1,000 nor more than 50 percent (50%) of the
nonforfeitable value of such Participant's Accounts,
determined on the date of the loan application; provided,
however, that any loan amount, when added to the highest
outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which such loan is
made, shall not exceed $50,000.
(iii) Any loan to a Participant under this Plan
shall be made at an interest rate fixed by the Committee,
determined as of the date of the loan application. The
Committee shall ascertain a reasonable rate of interest each
month, with respect to loans granted in the following month,
that shall provide the Plan with a return commensurate with,
and be determined on the basis of, the interest rates charged
by commercial lending institutions for loans that would be
made under similar circumstances.
(iv) The aggregate total of all outstanding loans
to a Participant under this Plan shall be adequately secured
by up to 50 percent (50%) of the nonforfeitable value of the
Participant's Accounts. In addition to said value of the
Participant's Accounts, the Committee may require the
Participant to post additional security if it believes such
security is necessary or desirable in order to adequately
secure the loan. If, because of a decrease in the value of the
Participant's Accounts, or for any other reason, the Committee
believes the loan to be inadequately secured, it shall either
require the Participant to post security in addition to the
value of such Accounts or demand accelerated repayment of the
loan. The types of security that may be required to be posted
shall include, but not be limited to, certificates of deposit,
stocks, short-term bonds and other short-term securities and
their cash equivalents.
30
(v) Any loan to a Participant under this Plan
shall contain such default provisions as may be determined
appropriate by the Committee, including the provision that if
an event of default occurs and is not cured within thirty (30)
days, the unpaid principal and accrued interest due under the
loan shall be declared immediately payable in full and may be
charged back against the Participant's Accounts as a
distribution at the earliest time that the Participant is
entitled to receive a distribution under this Plan. A failure
to make a scheduled payment, or the filing of an application
for a benefit distribution (other than a hardship withdrawal
pursuant to Section 7.2) under this Plan, shall constitute
events of default.
(vi) If a Participant is absent during a period
of Qualified Military Service, repayment shall be waived
during such period and, upon the Participant's reemployment by
an Employer within the time during which the Participant's
right to reemployment is protected by applicable law, the loan
payment schedule shall resume with the original maturity date
of the promissory note adjusted to reflect the period of
Qualified Military Service.
(vii) If a Participant incurs a Disability or is
on an approved unpaid leave of absence, the Committee may, in
its sole discretion, waive payments for up to one (1) year and
re-amortize the loan and establish a new loan payment schedule
pursuant to which the loan will be repaid in full by the
original maturity date of the Participant's note.
(viii) A loan origination fee, in an amount
determined by the Committee annually, will be charged to each
Participant obtaining a loan and will be deducted from the
loan proceeds.
(ix) A loan maintenance fee, in an amount
determined by the Committee, will be charged to each
Participant and will be deducted from such Participant's
Accounts for each Plan Year during which such loan is
outstanding.
(b) Allocation of Loans. The written instrument
evidencing any loan made pursuant to this Section 7.1 shall be held by the
Trustee for the benefit of the Participant to whom the loan was made and not for
the Trust Fund as a whole, and the Participant's interest in Investment Funds
or, for loans made prior to July 1, 2002, the Common Stock Fund will be reduced
by a like amount, in the same proportion that his interest in each such
Investment Fund bears to the amount of the loan.
(c) Aggregation of Loans. For purposes of determining
whether the dollar limitations of Section 7.1 (a) have been met, the Committee
shall take into account the unpaid principal amount of any loan(s) made to the
Participant under the provisions of any employee benefit plan to which
contributions have been made on his behalf by the Employer or an Affiliate.
(d) Number of Outstanding Loans. A Participant may have
up to two (2) outstanding loans from his Accounts at any given time. If a
Participant already has an outstanding loan from his Accounts, he may request a
second loan, provided that (i) the request is made no sooner than six (6) months
after the initial loan request and (ii) the limits described in Subsection (a)
are not exceeded by the total of the two loans.
31
(e) Maximum Term of Loans. The Committee may not permit a
Participant to borrow any part of the value of the Participant's Accounts,
pursuant to Section 7.1 unless the Participant is required, by the terms of the
loan, to repay the amount borrowed within five (5) years of the date of the
loan. Notwithstanding the foregoing, if the Participant borrows from his
Accounts, under the provisions of this Section 7.1 and the proceeds of such loan
will be used by the Participant to acquire any dwelling unit that, within a
reasonable period of time, is to be used as a principal residence of the
Participant, then the maximum term of the loan need not be restricted to five
years and the loan shall be repaid within a reasonable period of time, as fixed
by the Committee in the loan papers at the time the loan is made. At the time
the loan is made, the Committee shall determine whether a dwelling unit will be
used as a principal residence within a reasonable period of time. If the
Participant is absent due to Qualified Military Service, loan repayments shall
be suspended during such absence and shall resume following the completion of
the period of Qualified Military Service. Any such resumed repayments shall be
made, following the period of Qualified Military Service, at least as frequently
as, and in an amount not less than, the original loan payments. In the event of
Qualified Military Service, the terms of the loan may be extended by a period
not to exceed the original term of the loan plus the period of Qualified
Military Service.
(f) Allocation of Payments. Each payment by the
Participant to the Trustee in repayment of any outstanding loan(s) shall be
allocated to the portion of the Participant's Accounts invested in the
Investment Funds in the same proportion as any new contributions on behalf of
the Participant would be allocated between the Investment Funds.
(g) Repayment of Loans. A Participant may repay any
outstanding principal and accrued interest due under the loan without being
charged with any prepayment penalty at any time after the six month period
beginning on the date that the loan was made. No penalty will apply to
prepayments.
7.2 Hardship Distribution.
(a) General. As of the last day of any month, a
Participant shall be entitled to receive a hardship distribution from his
Deferral Account, his Rollover Contribution Account and his Catch-up
Contribution Account if he establishes, to the satisfaction of the Committee or
as provided in Subsection (b) or Subsection (c), that (i) he has an immediate
and heavy financial need and (ii) the distribution is necessary to satisfy such
financial need. In no event, however, shall the amount that is distributed to a
Participant exceed the lesser of the amount required to meet such financial
need, as determined by the Committee, or the balance of the Participant's
Deferral Account, Rollover Account and Catch-up Contributions Account. The
amount of an immediate and heavy financial need may include any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution. In order to make a
withdrawal pursuant to this Section 7.2, the Participant shall file with the
Committee a written application, on a form acceptable to the Committee, at least
thirty (30) days prior to the date on which the Participant wishes to make a
withdrawal, setting forth the reasons for the withdrawal request, the amount he
wishes to withdraw and such other information as the Committee may require. In
administering the provisions of this Section 7.2, the Committee shall act in a
uniform, non-discriminatory manner, and all Participants shall be treated
similarly under similar circumstances.
(b) Immediate and Heavy Financial Need. For the purposes
of this Section 7.2, a distribution will be deemed to be on account of an
immediate and heavy financial need within the meaning of Subsection (a) (i) if
it is for:
32
(i) Medical care expenses (within the meaning of
Section 213(d) of the Code) previously incurred by the
Participant, the Participant's spouse or the Participant's
dependents or prepayment of medical care expenses necessary
for such persons to obtain such care;
(ii) Costs directly related to the purchase
(excluding mortgage payments) of the Participant's principal
residence;
(iii) Payment of tuition, related educational
fees, and room and board expenses, for the next 12 months of
post-secondary education for the employee, or the employee's
spouse, children, or dependents (as defined in Section 152 of
the Code); or
(iv) Payments necessary to prevent eviction from,
or foreclosure of a mortgage on, the Participant's principal
residence.
(c) Distribution Deemed Necessary. For purposes of
Subsection (a) (ii), a distribution shall be treated as necessary to satisfy an
immediate and heavy financial need of a Participant, if, and only if, the
Participant has obtained all distributions (other than hardship distributions)
and all nontaxable loans available to him under this Plan (provided that such
available loan amount equals or exceeds the financial need) and any other plan
maintained by the Company or any Affiliate. Notwithstanding the preceding
sentence, a Participant may satisfy Subsection (a) (ii), without obtaining all
nontaxable loans available to him under the Plan, by demonstrating to the
Committee that he lacks other resources that are reasonably available to satisfy
his heavy and immediate financial need, provided, that the Committee determines
that requiring the Participant to obtain a loan under the Plan would impair the
Participant's ability to obtain additional funds from other sources that are
necessary to satisfy the same financial need, or in and of itself impose an
additional hardship on the Participant.
(d) Suspension and Limitation of Deferral Elections. A
Participant who receives a hardship distribution pursuant to this Section 7.2
shall have his Deferral Elections suspended for a one year period (or, with
respect to withdrawals made on or after January 1, 2002, a six month period)
commencing on the date of receipt of the hardship distribution, and, for
hardship withdrawals made prior to January 1, 2001, the Participant's Deferral
Election for the Plan Year following the Plan Year of the hardship distribution
shall be limited to the amount described in Section 402(g) of the Code as in
effect for such following year, reduced by the amount of the Participant's
Deferral Elections made for the Plan Year of the hardship distribution prior to
the beginning of the one year suspension.
(e) Members of Reserve Units. A Participant, who is a
member of a reserve unit of the armed forces of the United States that is called
to active duty, shall not be subject to the loan requirements deemed necessary
to meet the requirements of Subsection (c) in order to receive a hardship
distribution from the Plan.
33
ARTICLE VIII
COMMITTEE AND PLAN ADMINISTRATOR
8.1 Committee - Authority. The Administrative Committee (the
"Committee") shall have the authority to control and manage the operation and
administration of this Plan (other than the authority to manage and control the
assets of the Plan), except to the extent such powers have been allocated to the
Trustee or a Plan Administrator, or delegated to any other person pursuant to
the Plan or the Trust. The Committee and the Plan Administrator shall be "named
fiduciaries" within the meaning of Section 402 of ERISA.
8.2 Appointment. The Committee shall consist of at least 3
persons, all of whom shall be appointed by the Board of Directors, to serve at
its pleasure. The members may, but need not be, officers or directors of the
Company. If, at any time, there shall be fewer than 3 members, the Board of
Directors shall appoint one or more new members so that there are at least 3
members. The appointment of a Committee member shall become effective upon
delivery of his acceptance in writing of such appointment to the Company and to
each other Committee member, if any, then acting under this Plan.
8.3 Death, Resignation or Removal of Committee Member. A Committee
member shall cease to be such upon his death, resignation, removal by the Board
of Directors or being declared legally incompetent. Any Committee member may
resign by notice in writing mailed or delivered to the Company and to the
remaining member or members. Any one or all of the Committee members may be
removed by the Board of Directors by delivery to the affected member or members,
with copies to the other members then acting, of an instrument executed by the
Company evidencing the action taken by the Board of Directors to remove such
member or members.
8.4 Written Notice of Appointment, Resignation or Removal. A copy
of any instrument evidencing the acceptance of appointment, resignation or
removal of a Committee member shall be filed with the records of this Plan and
shall be deemed a part of this Plan.
8.5 Action By Committee. Any and all acts may be taken and
decisions may be made hereunder by a majority of the Committee members then
acting. The Committee may make any decision or take any action at a meeting duly
called and held, or by written documents signed by the minimum number of
Committee members empowered to take action or make decisions at that time, as
hereinabove provided. The members may delegate to each or any of their number
authority to perform ministerial acts or to sign documents on behalf of the
Committee, and a document so signed shall be conclusively presumed to be the
action of the Committee.
8.6 Employment of Agents. The Committee may enlist the services of
such agents, representatives and advisers as they may deem advisable to assist
them in the performance of their duties under this Plan, including, but not by
way of limitation, custodial agents for the Trust Fund and attorneys and
accountants.
8.7 No Committee Member Compensation. The Committee members shall
serve without compensation, as such, but the reasonable expenses incurred by the
Committee, including reasonable fees and expenses of custodial agents,
attorneys, accountants and other advisers, shall be paid from the Trust Fund and
shall be allocated between principal and income
34
as the Committee may determine; provided, however, that the Company may, in its
own discretion, pay all or part of such expenses.
8.8 Committee Powers. The Committee shall have the specific powers
elsewhere herein granted to it and shall have such other powers as may be
necessary in order to enable it to discharge its responsibilities with respect
to this Plan, including, but not by way of limitation, the sole discretionary
authority to do the following:
(a) To interpret and construe this Plan and to determine
all questions arising under this Plan, other than those specifically reserved
elsewhere herein for determination by the Company or the Plan Administrator, and
to correct any defect or supply any omission or reconcile any inconsistency in
this Plan in such manner and to such extent as they shall deem expedient to
effectuate the purposes and intent of this Plan;
(b) To determine all questions of eligibility and status
and rights of Participants and others under this Plan, either directly or on
appeal. The Committee shall have the exclusive discretionary authority to
determine eligibility for benefits under the Plan, to construe the terms of the
Plan, to make factual determinations and to determine any question that may
arise in connection with the operation or the administration of the Plan. The
actions and the decisions of the Committee shall be conclusive and binding upon
the Employer and any and all Participants, Former Participants, spouses,
Beneficiaries, Alternate Payees and their respective heirs, distributees,
executors, administrators, or assignees; subject, however, to the right of
Participants, Former Participants spouses, Beneficiaries, Alternate Payees and
their respective heirs, distributees, executors, administrators, or assignees to
file a written claim under the claims procedure as set forth in Section 8.9;
(c) To authorize and make, or cause to be made, payment
of all benefits and expenses that become payable under this Plan;
(d) To adopt and to amend from time to time such by-laws
and rules and regulations as they shall deem necessary for the administration of
this Plan, which are not inconsistent with the terms and provisions of this
Plan; and
(e) To establish reasonable procedures to determine
whether a domestic relations order is a Qualified Domestic Relations Order and
for payments to be made pursuant to such Order. Any payment made by the
Committee pursuant to a Qualified Domestic Relations Order shall reduce, by a
like amount, the amount otherwise payable under the Plan to the Participant or
Former Participant to whom such Order relates or his Beneficiary, as the case
may be.
8.9 Claim for Benefits. A Participant, Former Participant,
Alternate Payee or Beneficiary ("Claimant") shall file a claim for benefits with
the Committee at the time and in the manner prescribed by it. The Committee
shall provide adequate notice in writing to any Claimant whose claim for
benefits under the Plan has been denied. Such notice must be sent within 90 days
of the date the claim is received by the Committee, unless special circumstances
warrant an extension of time for processing the claim. Such extension shall not
exceed 90 days and no extension shall be allowed unless, within the initial 90
day period, the Claimant is sent a notice of extension indicating the special
circumstances requiring the extension and specifying a date by which the
Committee expects to render its final decision. The Committee's notice of denial
to the Claimant shall set forth:
35
(a) The specific reason or reasons for the denial;
(b) Specific references to pertinent Plan provisions on
which the Committee based its denial;
(c) A description of any additional material and
information needed for the Claimant to perfect his claim and an explanation of
why the material or information is needed;
(d) A statement that the Claimant may:
(i) Request a review upon written application to
the Committee;
(ii) Review pertinent Plan documents; and
(iii) Submit issues and comments in writing;
(e) The name and address of the Committee's delegate to
whom the Claimant may forward his appeal; and
(f) The procedure for the appeal of such denial and the
time limits applicable for such procedure, including a statement of the
Claimant's right to bring a civil action under Section 502(a) of ERISA following
an adverse benefit determination on appeal.
The Committee's notice must further advise the Claimant that
his failure to appeal the action to the Committee in writing within the 60-day
period will render the Committee's determination final, binding, and conclusive.
Any appeal that the Claimant wishes to make from the adverse determination must
be made, in writing, to the Committee, within 60 days after receipt of the
Committee's notice of denial of benefits. The Claimant or the Claimant's
authorized representative may examine the Plan and obtain, upon request and
without charge, copies of all information relevant to the Claimant's appeal. If
the Claimant should appeal to the Committee, he or his duly authorized
representative may submit, in writing, whatever issues and comments he or his
duly authorized representative feel are pertinent. The Committee shall
re-examine all facts related to the appeal and make a final determination as to
whether the denial of benefits is justified under the circumstances. The
Committee shall advise the Claimant, in writing, of its decision on his appeal.
Such communication shall be written in a manner calculated by be understood by
the Claimant and shall include the specific reasons for the decision, specific
references to the Plan provisions on which the decision is based, the Claimant's
rights to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claim
for benefits, and the Claimant's right to bring a civil action under Section
502(a) of ERISA. The notice of the decision shall be given within 60 days of the
Claimant's written request for review, unless special circumstances (such as a
hearing) would make the rendering of a decision within the 60-day period
unfeasible, but in no event shall the Committee render a decision on an appeal
from the denial of a claim for benefits later than 120 days after receipt of a
request for review. If an extension of time for review is required because of
special circumstances, written notice of the extension shall be furnished to the
Claimant prior to the date the extension period commences.
8.10 Liability for Contributions. The Committee shall not be
responsible for the determination or collection of any contributions that may be
or become payable under this Plan.
36
8.11 Plan Administrator. The Board of Directors may designate in
writing the Committee, or a person, who may but need not be a Committee member,
or a corporation that may but need not be the Company, to act as the Plan
Administrator hereunder. The appointment of a Plan Administrator shall be
effective upon delivery of written acceptance of such appointment to the Company
and the Committee. The Board of Directors may from time to time revoke such
designation by notice in writing mailed or delivered to the Plan Administrator,
and the Plan Administrator may resign by notice in writing mailed or delivered
to the Company. Any designation, acceptance, resignation or removal of the Plan
Administrator shall be deemed a part of this Plan. The Company shall be the Plan
Administrator unless a Plan Administrator has been appointed pursuant to this
Section 8.11. The Plan Administrator shall have those responsibilities assigned
to the "plan administrator" by ERISA, the Code, any other applicable law, any
regulations issued pursuant to any of the foregoing, and the provisions of this
Plan.
8.12 Compensation and Expenses of Plan Administrator. Unless the
Plan Administrator is a firm or corporation, the Plan Administrator shall serve
without compensation; provided, however, that the reasonable expenses incurred
by the Plan Administrator hereunder shall be paid from the Trust Fund except to
the extent that the Company, in its own discretion, pays all or part of such
expenses. If the Plan Administrator is a firm or corporation, its compensation
shall be determined by written agreement between it and the Company and shall be
paid from the Trust Fund unless the Company, in its own discretion, pays all or
part of such compensation. If the Company is the Plan Administrator, it shall
serve without compensation and shall bear its own expenses.
8.13 Allocation of Duties. The Committee and the Plan Administrator
may further allocate their fiduciary responsibilities with respect to this Plan
among themselves, and may designate one or more other persons, firms or
corporations to carry out such fiduciary responsibilities under this Plan. Any
allocation or designation pursuant to this Section 8.13 shall be in writing and
shall constitute a part of this Plan.
8.14 Participation of Committee Members and Plan Administrator.
Nothing contained in this Plan shall preclude a Committee member or Plan
Administrator from becoming a Participant in this Plan, if he be otherwise
eligible, but he shall not be entitled to vote or to act upon or to sign any
document relating to his own participation in this Plan.
8.15 Books and Records. The Committee shall maintain appropriate
records of all actions taken. The Committee and the Plan Administrator shall
submit, make available or deliver on request to governmental agencies or
instrumentalities, the Company and other Employers, Participants, Former
Participants, Beneficiaries and other persons entitled thereto, such reports,
documents or records as may be required by law, or as they may otherwise deem
appropriate. The Company may, at any time, inspect the records of the Committee
and the Plan Administrator.
8.16 Fiduciary Standard. The Committee and the Plan Administrator
shall exercise their powers in accordance with rules applicable alike to all
similar cases, and they shall discharge all their powers and duties hereunder in
accordance with the terms of this Plan, solely in the interests of Participants,
Former Participants and Beneficiaries, and for the exclusive purpose of
providing benefits to such persons, with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims.
37
8.17 Indemnification. To the extent permitted by law, the Company
shall indemnify and save each Committee Member, each former Committee Member,
the Plan Administrator and each former Plan Administrator if, while serving as
such, he is or was an Employee (each such person being herein called an
"Indemnitee"), and their respective heirs and legal representatives, harmless
from and against any loss, cost or expense including reasonable attorney's fees
(collectively, "liability") that any such person may incur individually,
jointly, or jointly and severally, arising out of or in connection with the
administration of this Plan, including, without limitation of the foregoing, any
liability that may arise out of or in connection with the management and control
of the Trust Fund, unless such liability is determined to be due to willful
breach of the Indemnitee's responsibilities under this Plan, under ERISA, or
other applicable law.
38
ARTICLE IX
INVESTMENT OF PLAN ASSETS
9.1 Contributions Held in Trust. All contributions under this Plan
shall be paid to the Trustee. The Trustee shall have the exclusive authority and
discretion to accept such sums of money and such other property as shall from
time to time be paid or delivered to it pursuant to this Plan and, except to the
extent provided in Sections 9.2 and 9.3, to hold, invest, reinvest and
distribute the Trust Fund in accordance with the provisions of this Plan and the
Trust.
9.2 Investment Funds. The Trust Fund shall consist of separate
Investment Funds selected by the Committee. The Committee may, in its
discretion, establish additional funds and may terminate any fund from time to
time. The Investment Funds may include, but shall not be limited to, collective
or commingled trust funds maintained by the Trustee or another bank or trust
company acceptable to the Trustee or investment companies regulated under the
Investment Company Act of 1940. The Investment Funds may, in whole or in part,
be invested in any common, collective, or commingled trust fund maintained by
the Trustee or another bank or trust company acceptable to the Trustee, that is
invested principally in property of the kind specified for that particular
Investment Fund and that is maintained for the investment of the assets of plans
and trusts that are qualified under the provision of Section 401(a) of the Code
and exempt from Federal taxation under provisions of Section 501(a) of the Code,
and during such period of time as an investment through any such medium exists
the declaration of trust of such trust shall constitute a part of the Trust. The
Plan is intended to be a plan described in Section 404(c) of ERISA and Title 29
of the Code of Federal Regulations Section 2550.404c-1.
9.3 Investment of Contributions. Each Participant or Former
Participant shall direct that his contributions be paid into and invested, in
whole percentages, in any one or more of the Investment Funds, provided that the
sum of such percentages does not exceed 100 percent (100%). At the time the
Participant elects to make contributions to the Plan, he shall file an election
with the Committee specifying the investment vehicle or vehicles in which his
contributions will be invested. Notwithstanding the foregoing, a Participant may
not elect to have more than 25 percent (25%) of any future contributions made to
the Plan on his behalf invested in the Common Stock Fund.
9.4 Changes in Investment Elections. A Participant or Former
Participant who has elected to have all or part of his Accounts invested in any
vehicle maintained in the Investment Fund can change his election on a daily
basis and elect to have his Accounts or any future contributions made to the
Plan on his behalf, invested in any of the available Investment Funds, with such
investment changes to be completed as soon as administratively practicable
following the request. Notwithstanding the foregoing, a Participant may not
elect to have amounts transferred from any Investment Fund to the AMETEK Common
Stock Fund in an amount that would cause the value of his Accounts allocated to
the AMETEK Common Stock Fund to exceed 25 percent (25%) of the value of his
Accounts allocated to all of the Investment Funds. Whenever amounts have to be
transferred because of a change in the Participant's election, the Trustee or
the Investment Manager, as the case may be, shall make such transfer as soon as
is practicable.
9.5 Common Stock Fund. The Trustee shall invest and reinvest the
assets of the Common Stock Fund in the common stock of the Company, par value
$1.00 (the "Common Stock"). Any dividends paid with respect to the Common Stock
shall be reinvested in additional shares. Shares of Common Stock may be acquired
from the Company, from other
39
shareholders or on the open market; provided, however, that in no event shall
the Trustee pay more than fair market value for the Common Stock.
Notwithstanding any provision of the Plan or the Trust to the contrary, on all
corporate matters requiring shareholder approval, each Participant or Former
Participant who has elected to invest part of his Accounts in the Common Stock
Fund shall have the right to direct the Trustee how to vote any Common Stock
allocated to his Accounts. Prior to the holding of any special or annual meeting
of the Company's shareholders, the Committee shall distribute to each
Participant or Former Participant all proxy materials and a proxy form of ballot
on which the Participant or Former Participant can direct the Trustee as to the
voting of shares of Common Stock allocated to his Accounts. Any and all
fractional shares of Common Stock allocated to the Participant's or Former
Participant's Accounts shall be combined with other fractional shares of other
Participants or Former Participants and shall be voted, to the extent possible,
to reflect the direction of Participants or Former Participants holding such
fractional shares. Shares of Common Stock for which no instructions are received
shall be voted, for or against, by the Trustee in the same proportion as the
shares for which the Trustee has received instructions from the Participant or
Former Participant.
9.6 Appointment of Investment Manager. The Board of Directors may,
from time to time, appoint one or more Investment Managers to manage, invest and
reinvest the Trust Fund, or such part or parts of the Trust Fund as is specified
in such appointment. Any appointment made pursuant to this Section 9.6 may be
revoked or modified by the Board of Directors at any time and a new appointment
made hereunder.
40
ARTICLE X
AMENDMENT, TERMINATION OR TRANSFER OF ASSETS
10.1 Amendment or Termination. The Board of Directors, at a regular
meeting or by unanimous written consent, may amend, terminate or suspend this
Plan at any time or from time to time by an instrument in writing duly executed
in the name of the Company and delivered to the Committee; provided, however,
that:
(a) No amendment shall provide for the use of the assets
of this Plan or any part thereof other than for the exclusive benefit of
Participants, Former Participants and Beneficiaries;
(b) The Committee may amend the Plan, without action or
approval by the Board of Directors, to modify the maximum percentage of
Compensation that may be deferred by Highly Compensated Employees under Section
4.1(b);
(c) No amendment shall deprive any Participant, Former
Participant or Beneficiary of any of the benefits that are vested in him or to
which he is entitled under this Plan by reason of the prior Years of Service,
death, Disability or termination of employment of such Participant or Former
Participant; and
(d) Without limiting the generality of the foregoing and
notwithstanding anything to the contrary in this Plan contained, this Plan may
be amended at any time and from time to time in any respect so as to qualify
this Plan as exempt pursuant to Sections 401 and 501(a) of the Code and like
provisions of subsequent Revenue Acts, and to comply with the provisions of
ERISA, regardless of whether any such amendment may change, alter or amend the
relative benefits under this Plan of any Participant, Former Participant or
Beneficiary.
10.2 Termination of Plan. This Plan shall cease and come to an end,
although the Trust Fund shall continue to be held by the Trustee for
distribution in accordance with Section 10.3, if and when
(a) It is declared terminated in a writing executed in
the name of the Company and delivered to the Trustees; or
(b) The Company is dissolved or liquidated or disposes of
substantially all of its assets without provision for continuation of this Plan
by any successor person, firm or corporation.
10.3 Distribution of Assets. Upon termination of this
Plan, or complete discontinuance of contributions to this Plan, the
proportionate interest of each Participant in the Trust Fund shall become
nonforfeitable. Upon partial termination of this Plan the nonforfeitable rights
shall be applicable only to the portion of this Plan that is terminated and only
to those Participants affected by the partial termination. Except as otherwise
provided by ERISA, there shall first be set aside amounts due to Former
Participants that were not previously paid pursuant to the provisions of Article
VI, and the amount to which any such Former Participants is entitled as
hereinabove provided shall be paid to him or his duly designated Beneficiary, as
the case may be. The proportionate interest of each Participant in the remaining
assets of the Trust Fund shall then be determined in accordance with Sections
5.2 and 5.3 except that the value of such proportionate interest shall be
determined as of the date of termination of this Plan. There shall
41
be paid to each Participant or his duly designated Beneficiary, as the case may
be, the benefit thus determined pursuant to this Section 10.3, plus his
proportionate share of any earnings thereon, or less his proportionate share of
any losses thereon, if applicable. Provision for the payment of benefits
pursuant to this Section 10.3 may be made at the direction of the Company, by
continuing the Trust Fund in existence and making provision therefrom for
benefit distributions in accordance with the terms of this Plan, by immediate
and full distribution from the Trust Fund of Participants' Accounts, or by any
combination thereof. Notwithstanding the foregoing provisions of this Section
10.3, following the termination of the Plan, a distribution of a Participant's
Deferral Election Account shall not occur if the employer establishes or
maintains a successor plan (as defined under Code Section 401(k) and the
corresponding Treasury regulations).
10.4 Affiliates.
(a) Adoption by Affiliates. Any affiliate may, subject to
the approval of the Company, adopt and become a party to this Plan by resolution
of its Board of Directors, certified copies of which shall be delivered to the
Company, the Committee, the Trustee and the Plan Administrator. The effective
date of any such adoption shall be the first day of a calendar month as is fixed
in the resolution of adoption.
(b) Withdrawal by Affiliate. Any one or more of the
Employers shall be entitled to withdraw from this Plan without the consent or
approval of any one or more of the remaining Employers. Any Employer shall be
deemed to have withdrawn from this Plan in the event it loses its corporate or
other legal existence by dissolution or merger. In the event of such withdrawal
from this Plan of an Employer while this Plan continues for any one or more of
the other Employers, if the obligations hereunder of the withdrawing Employer
are not assumed by any one or more of the remaining Employers, it shall be
deemed that this Plan has been terminated with respect to such withdrawing
Employer and in such event the Committee or the Trustee, as the case may be,
shall perform the acts set forth in Section 10.3 with respect to the part of the
Trust Fund representing the Accounts of the Participants, Former Participants
employed by the withdrawing Employer; provided, however, that if any Participant
of a withdrawing Employer is immediately employed by any other Employer then he
shall continue as a Participant under this Plan.
10.5 Amendment to Vesting Schedule. If any amendment changes the
method for determining the nonforfeitable percentage of the value of a
Participant's Accounts, the Committee shall give written notice thereof, within
sixty (60) days of the later of the date on which such amendment was adopted or
became effective, to each Participant who has completed three or more Years of
Service prior to the sixtieth day following the later of (i) the date he
receives notice of such amendment, (ii) the date the amendment is adopted, or
(iii) the date the amendment becomes effective. Such Participant may elect to
have his nonforfeitable percentage determined without regard to the amendment by
filing a written request with the Committee within sixty (60) days of the later
of the dates specified in clauses (i), (ii) and (iii) of this Section 10.5. Such
election shall be irrevocable.
10.6 Merger of Plan. 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, Former Participant and
Beneficiary, if the transferee plan were terminated immediately after such
action, would be equal to or greater than the benefits to which he would have
been entitled if this Plan had been terminated immediately before such action.
42
ARTICLE XI
TOP HEAVY PLANS
11.1 Definitions. For purposes of this Article XI, the following
definitions shall apply unless the context clearly indicates otherwise:
(a) "Aggregation Group" shall mean a group of plans
consisting of all plans of the Company or any Affiliate in which one or more Key
Employees are participants, whether or not such plans are terminated and whether
or not such plans are sponsored by a corporation, and all other plans maintained
by the Company or any Affiliate that enable any plan in which a Key Employee is
a participant to comply with the coverage and nondiscrimination requirements of
Sections 401(a)(4) or 410 of the Code; and all plans of the Company or an
Affiliate that the Company designates as part of the Aggregation Group, provided
the resulting Aggregation Group meets the coverage and nondiscrimination
requirements of Sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" shall mean the last day of the
preceding Plan Year, and in the case of the first Plan Year, the last day of
such Plan Year.
(c) "Five Percent Owner" shall mean:
(i) any person who owns, or is considered as
owning, within the meaning of Section 318 of the Code, as
modified by Section 416 thereof, more than 5 percent (5%) of
the outstanding stock of the Company or any Affiliate or more
than 5 percent (5%) of the total combined voting power of all
of the stock of the Company or any Affiliate; or
(ii) if the Affiliate is not a corporation, any
person who owns, or is considered as owning, within the
meaning of Section 416 of the Code, more than 5 percent (5%)
of the capital or profits of the Affiliate.
For purposes of this Subsection (c), the Company and each Affiliate shall not be
treated as a single employer, and a person's ownership interest in the Company
or any such Affiliate shall not be aggregated.
(d) "Key Employee" shall mean any individual who is, or
was at any time during the Plan Year ending with the Determination Date or any
of the four preceding Plan Years (or, effective January 1, 2002, during the Plan
Year):
(i) an Officer, but only if the individual's
Total Compensation exceeds (A) 50 percent (50%) of the dollar
limit set forth in Section 415(b)(1)(A) of the Code,
multiplied by the Adjustment Factor, for a Plan Year beginning
before January 1, 2002, or (B) the dollar amount in effect
under Section 416(i)(1)(A)(i) of the Code for a Plan Year
beginning after December 31, 2001;
(ii) for periods prior to January 1, 2002, a Top
Ten Owner, but only if the individual's Total Compensation
exceeds the dollar limit set forth in Section 415(c)(1)(A) of
the Code, as adjusted for increases in the cost-of-living;
(iii) a Five Percent Owner;
43
(iv) a One Percent Owner whose Total Compensation
exceeds $150,000; or
(v) the Beneficiary of any individual described
in clauses (i) through (iv) of this Subsection (d).
(e) "Non-Key Employee" shall mean each individual who is
an employee of the Company or an Affiliate but who is not a Key Employee.
(f) "Officer" shall mean an individual who is an
executive in the regular and continued service of the Company or an Affiliate;
provided, however, that the number of employees who are considered Officers for
purposes of this Section 11.1 shall not exceed:
(i) three (3), if the number of employees of the
Company and Affiliates does not exceed thirty (30);
(ii) 10 percent (10%) of the number of employees
of the Company and Affiliates, if the number of employees is
more than thirty (30) but less than 500; and
(iii) fifty (50), if the number of employees of
the Company and Affiliates is 500 or more.
If the number of Officers exceeds the limits set forth in this Subsection (f),
then the Officers having the highest annual Total Compensation among all
Officers, during the Plan Year ending with the Determination Date and the four
preceding Plan Years, shall be considered Key Employees.
(g) "One Percent Owner" shall have the same meaning as
Five Percent Owner, except that "1 percent (1%)" shall be substituted for "5
percent (5%)", wherever the latter term appears in Subsection (c).
(h) "Super Top Heavy Plan" shall have the same meaning as
"Top Heavy Plan," except that "90 percent (90%)" shall be substituted for "60
percent (60%)" wherever the latter term appears in Subsection (i).
(i) "Top Heavy Plan" This Plan shall be considered a Top
Heavy Plan for any Plan Year, if, as of the Determination Date,
(i) the Plan is not part of an Aggregation Group
and the present value of the accrued benefits of Key Employees
participating in the Plan exceeds 60 percent (60%) of the
present value of the cumulative accrued benefits of all
Participants in the Plan, or
(ii) the Plan is part of an Aggregation Group and
the present value of the account balances and accrued benefits
of Key Employees participating in the Aggregation Group
exceeds 60 percent (60%) of the present value of the
cumulative account balances and accrued benefits of all
participating employees in the Aggregation Group, as computed
in each case in accordance with Section 416 of the Code.
44
For purposes of this Subsection (i), a Participant's accrued
benefit or account balance shall not include any tax free rollover (as described
in Section 402(a)(5)(A) or Section 408(d)(3) of the Code) or plan-to-plan
transfer that (A) is made from the Plan (or, if applicable, plans that are part
of the Aggregation Group) if the plan to which the tax free rollover or
plan-to-plan transfer is made is an employee benefit plan that is maintained by
the Company or an Affiliate and the tax free rollover or plan-to-plan transfer
is not initiated by the Participant or (B) is made to any plan that is part of
the Aggregation Group if the plan from which the tax free rollover or
plan-to-plan transfer is made is an employee benefit plan that is not maintained
by the Company or an Affiliate and the tax free rollover or plan-to-plan
transfer is initiated by the Participant.
The present value of the cumulative account balances or
accrued benefit of any Participant or Former Participant shall also include any
distributions from the Plan (or, if applicable, from any plan in the Aggregation
Group), including any terminated plan that would have been aggregated with the
Plan under Section 416(g)(2)(A)(i) had it not been terminated, made to the
Participant or Former Participant or his Beneficiary during the Plan Year ending
with the Determination Date (effective January 1, 2002) and, the case of a
distribution made for a reason other than a separation from service, death, or
disability, any of the four preceding Plan Years.
Solely for purposes of determining if the Plan, or any other
plan included in a required Aggregation Group of which this Plan is a part, is
Top-Heavy, the accrued benefit of a Non-Key Employee shall be determined under
the method, if any, that uniformly applies for accrual purposes under all plans
maintained by Affiliates, or if there is no such method, as if such benefit
accrued not more rapidly than the shortest accrual rate permitted under the
fractional accrual rule of Section 411(b)(1)(C) of the Code.
If an individual is not a Key Employee but was a Key Employee
in a prior year or if any individual has not performed services for the Employer
at any time during the five-year period (or, effective January 1, 2002, the
one-year period) ending on the Determination Date, any Accrued Benefit for such
individual shall not be taken into account in determining the Top-Heavy status
of the Plan.
(j) "Top Ten Owner" shall mean one of the ten employees
owning, or considered as owning, within the meaning of Section 318 of the Code,
the greatest interest in the Company or an Affiliate, but only if such employee
owns at least a 0.5 percent (0.5%) interest in the Company or the Affiliate. For
purposes of this Subsection (j), if two employees have the same ownership
interest in the Company or the Affiliate, the employee with the greater Total
Compensation shall be considered as owning the larger interest in the Company or
the Affiliate.
(k) "Total Compensation" shall mean the Employee's
`compensation' as defined in Subsection 5.5(d).
11.2 Minimum Contributions. For each Plan Year during which the
Plan is a Top Heavy Plan, the amount of Employer Contributions allocated to the
Matching Contribution Account of each Non-Key Employee who has satisfied the
eligibility requirements of Article II (other than the requirements of Section
2.4) and who is still in the service of the Employer as of the last day of the
Plan Year, shall be an amount at least equal to the lesser of:
(a) 3% of the Non-Key Employee's Total Compensation for
the Plan Year; or
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(b) a percentage that is equal to the highest percentage
of Total Compensation contributed by the Employer on behalf of any Key Employee
(including amounts allocated to the Deferral Account of such Key Employee under
Section 4.2(a)).
The amount the Employer is required to contribute on behalf of each Non-Key
Employee pursuant to this Section 11.2 shall be reduced by the amount of any
Employer Contribution made on behalf of such Non-Key Employee with respect to
such Plan Year pursuant to the provisions of this Plan or any contribution
(other than an elective deferral) to other defined contribution plan maintained
by the Employer.
11.3 Coordination with Defined Benefit Plan. In the event that a
Non-Key Employee who is entitled to receive a contribution under Section 11.2 is
also entitled to receive a minimum benefit pursuant to Section 416 of the Code
under a defined benefit pension plan maintained by the Employer, and the Non-Key
Employee does not accrue a benefit under such defined benefit pension plan that,
together with the Non-Key Employee's minimum contribution provided under Section
11.2 hereof, satisfies the requirements of Section 416 of the Code, the amount
of Employer Matching Contributions allocated to the Employer Matching
Contribution Account of such Non-Key Employee shall equal the lesser of:
(a) 5 percent (5%) of the Non-Key Employee's Total
Compensation for the Plan Year; or
(b) the percentage necessary in order that the Non-Key
Employee receive the minimum combined benefits under this Plan and such benefit
pension plan to which he is entitled under Section 416 of the Code.
Notwithstanding the foregoing, the amount allocated to the Employer Contribution
Account of each Non-Key Employee shall be reduced by the amount of any Employer
Contribution made on behalf of such Non-Key Employee with respect to such Plan
Year pursuant to Section 11.2 or any other provision of this Plan or any other
defined contribution plan maintained by the Employer.
ARTICLE XII
MISCELLANEOUS
12.1 No Rights Implied. Nothing herein contained shall be deemed to
give any Participant, Former Participant or Beneficiary an interest in any
specific property of this Plan or of the Trust Fund or any interest other than
his right to receive payment in accordance with the provisions of this Plan.
12.2 Assignment and Alienation. The interest in this Plan of a
Participant, Former Participant or Beneficiary shall not be subject to
assignment or transfer or otherwise be alienable either by voluntary or
involuntary act of such person, or by operation of law, nor shall it be subject
to attachment, execution, garnishment, sequestration or other seizure under any
legal, equitable or other process other than pursuant to the terms of a
Qualified Domestic Relations Order (pursuant to Section 6.7), in satisfaction of
a federal tax levy or in accordance with certain judgments and settlements as
set forth in Section 401(a)(13)(C) of the Code. If any Participant, Former
Participant or Beneficiary shall attempt to or shall alienate, sell, transfer,
pledge or otherwise encumber any amount to which he is or might become entitled,
or if by reason of the bankruptcy or insolvency of any such person or the
issuance of any garnishment,
46
writ of execution or other court process, or other event happening at any time,
any amount otherwise payable hereunder to such person should devolve upon anyone
else or would not be enjoyed by him, the Committee, in its absolute discretion,
may terminate such interest and may hold or apply it to or for the benefit of
such Participant, Former Participant or Beneficiary, or as the case may be, the
spouse, children or other dependents of such person, in such manner as the
Committee may deem proper.
12.3 No Diversion of Trust Assets. Anything contained in this Plan
to the contrary notwithstanding, it shall be impossible at any time for any part
of the corpus or income of the Trust Fund or of any segregated share of the
assets of this Plan to be used for or diverted to purposes other than for the
exclusive benefit of Participants, Former Participants or Beneficiaries, and no
part thereof shall ever revert to the Company or any of the Employers.
12.4 Exclusive Benefit. This Plan is created for the exclusive
benefit of Participants, Former Participants and Beneficiaries and shall be
interpreted in a manner consistent with its being an employees' trust as defined
in Section 401 of the Code.
12.5 No Employment Contract. This Plan shall not be construed as
creating any contract of employment between the Employer and any Employee; and
the Employer shall have the same control over its employees as though this Plan
had never been executed.
12.6 Fiduciaries. Any person or group of persons may serve in more
than one fiduciary capacity with respect to this Plan.
12.7 Incapacity. In the event that the Committee finds that any
Participant, Former Participant or Beneficiary is unable to care for his affairs
due to illness or accident, any payments due to such Participant, Former
Participant or Beneficiary under this Plan may be made to his duly appointed
legal representative. The Committee may, in its discretion, make such payments
to a child, parent or spouse of such Participant, Former Participant or
Beneficiary, or to any other person with whom he resides or who is charged with
his care. Any payment or payments so made shall be in complete discharge of the
liability under this Plan therefor.
12.8 Governing Law. This Plan shall be construed according to the
laws of the Commonwealth of Pennsylvania, where it is made and where it shall be
enforced, except to the extent such laws have been superseded by ERISA.
IN WITNESS WHEREOF, AMETEK has caused these presents to be executed, in
its corporate name, by its duly authorized officer on this 22nd day of January,
2003.
AMETEK, Inc.
By: /s/ John J. Molinelli
----------------------
AMETEK, Inc.
By: /s/ Donna F. Winquist
----------------------
Attest:
Kathryn E. Londra
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(SEAL)
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